EX-99 3 ex99-1.txt EXHIBIT 99.1 FOR IMMEDIATE RELEASE Contact: Press Contact: Investor Contact: -------------- ----------------- Michael Beckerman Gerard H. Sweeney Beckerman Public Relations Christopher P. Marr 908-781-6420 Brandywine Realty Trust michael@beckermanpr.com 610-325-5600 info@brandywinerealty.com Brandywine Realty Trust Announces First Quarter 2003 Earnings PLYMOUTH MEETING, PA, April 24, 2003 - Brandywine Realty Trust (BDN-NYSE) announced today that fully diluted earnings per share (EPS) were $.30 for the first quarter of 2003, a decrease of $.25 per share as compared to $.55 for the first quarter of 2002. Net income was $13.9 million for the first quarter of 2003, a decrease of $9.6 million, as compared to $23.5 million for the first quarter of 2002. The decrease in net income and EPS in the first quarter of 2003 as compared to the similar period in 2002 was primarily due to the net gain on disposition of discontinued operations of $.6 million in 2003 as compared to $8.4 million in 2002. Fully diluted funds from operations (FFO) were $30.1 million or $.65 per share for the first quarter 2003 compared to $32.4 million or $0.68 per share for the first quarter of 2002. FFO represents a non generally accepted accounting principle ("GAAP") financial measure. A table reconciling FFO to net income, the GAAP measure that the Company believes to be most directly comparable, is within the consolidated financial statements included in this release. "We executed very well against our first quarter 2003 business plan in what continues to remain a challenging leasing environment. Our occupancy at the end of the quarter slightly exceeded our expectations. Our financial results, particularly on a same store basis, were impacted by excessive snow removal expenses. We continue to achieve high tenant retention and remain focused on our tenant service platform. As expected, capital costs and lease rates remain under pressure, however, our first quarter statistics were directly in line with our business plan goals. Overall, we remain encouraged by our transaction flow and the strength of our market position," commented Gerard H. Sweeney, Brandywine's President and Chief Executive Officer. Brandywine Realty Trust Summary Portfolio Performance o FFO payout ratio was 68.2% for the quarter o Quarterly rental rate decreases on new leases were 7.9% on a cash basis and 4.8% on a straight-line basis o Quarterly rental rate decreases on renewals were 2.9% on a cash basis and .8% on a straight-line basis o Quarterly retention rate was 70.3% o Portfolio was 90.0% occupied and 91.7% leased as of March 31, 2003 o Leases expired or were terminated for approximately 777,000 square feet during the quarter o Leases were renewed for 546,000 square feet during the quarter o New leases were signed for 135,000 square feet during the quarter 401 Plymouth Road, Suite 500 o Plymouth Meeting, PA 19462 Phone: (610) 325-5600 o Fax: (610) 325-5622 o www.brandywinerealty.com Distributions On March 25, 2003, the Board of Trustees declared a regular quarterly dividend distribution of $0.44 per common share that was paid on April 15, 2003 to shareholders of record as of April 4, 2003. 2003 Financial Outlook As a result of economic conditions in the Company's markets, we continue to experience challenging operational conditions resulting in difficult earnings visibility. Our expectations for 2003 are based on the following key assumptions: o Occupancy is expected to decline slightly from the levels achieved in 2002. o Same-store net operating income is expected to decrease in the range of 1.5% to 3.0%. o Operating expenses (excluding snow removal) and real estate taxes and general and administrative expenses as a percentage of revenues are expected to be consistent with those experienced in 2002. Based on these key assumptions and management's view of current and anticipated market conditions, we affirm our guidance from our February 27, 2003 press release and continue to expect the second quarter 2003 EPS to be $.26 - $.29 per share and FFO to be $.65 - $.67 per share and full year 2003 EPS to be $1.11 to $1.17 and FFO to be $2.62 - $2.69 per share. Forward-Looking Statements Estimates of future earnings per share and FFO per share and certain other statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company and its affiliates to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others: the Company's ability to lease vacant space and to renew or relet space under expiring leases at expected levels, competition with other real estate companies for tenants, the potential loss or bankruptcy of major tenants, interest rate levels, the availability of debt and equity financing, competition for real estate acquisitions and risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns, unanticipated operating and capital costs, the Company's ability to obtain adequate insurance, including coverage for terrorist acts, dependence upon certain geographic markets, and general and local economic and real estate conditions, including the extent and duration of adverse changes that affect the industries in which the Company's tenants compete. Additional information on factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Reports on Form 10-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Non-GAAP Supplemental Financial Measures Funds from Operations (FFO) --------------------------- FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors. The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company. NAREIT defines FFO as net income (loss) before minority interest of unitholders (preferred and common) and excluding gains (losses) on sales of depreciable operating property and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after adjustment for unconsolidated joint ventures. The GAAP measure that the Company believes to be most directly comparable to FFO, net income, includes depreciation and amortization expenses, gains or losses on property sales and minority interest. In computing FFO, the Company eliminates substantially all of these items because, in the Company's view, they are not indicative of the results from the Company's property operations. To facilitate a clear understanding of the Company's historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity, nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions to shareholders. Cash Available for Distribution (CAD) ------------------------------------- Cash available for distribution, CAD, is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies. BRANDYWINE REALTY TRUST CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except per share information)
March 31, December 31, 2003 2002 ------------ ------------ ASSETS Real estate investments: Operating properties $ 1,908,948 $ 1,886,329 Accumulated depreciation (255,743) (244,490) ------------ ------------ 1,653,205 1,641,839 Construction-in-progress 39,371 58,127 Land held for development 43,797 43,075 ------------ ------------ 1,736,373 1,743,041 Cash and cash equivalents 8,543 26,801 Escrowed cash 17,473 16,318 Accounts receivable, net 4,454 3,657 Accrued rent receivable 29,824 28,320 Investment in marketable securities 11,840 11,872 Assets held for sale 8,853 10,648 Investment in joint ventures, at equity 14,911 14,842 Deferred costs, net 28,620 29,256 Other assets 31,984 34,533 ------------ ------------ Total assets $ 1,892,875 $ 1,919,288 ============ ============ LIABILITIES AND BENEFICIARIES' EQUITY Mortgage notes payable $ 591,597 $ 597,729 Borrowings under Credit Facility 295,000 307,000 Unsecured term loan 100,000 100,000 Accounts payable and accrued expenses 23,153 27,576 Distributions payable 21,227 21,186 Tenant security deposits and deferred rents 22,843 22,237 Other liabilities 20,335 22,006 Liabilities related to assets held for sale 33 59 ------------ ------------ Total liabilities 1,074,188 1,097,793 Minority interest 134,869 135,052 Beneficiaries' equity: Preferred Shares: 7.25% Series A Preferred Shares, $0.01 par value; shares authorized-10,000,000; issued and outstanding-750,000 in 2003 and 2002 8 8 8.75% Series B Preferred Shares, $0.01 par value; shares authorized-10,000,000; issued and outstanding-4,375,000 in 2003 and 2002 44 44 Common Shares of beneficial interest, $0.01 par value; shares authorized-100,000,000; issued and outstanding-35,301,820 in 2003 and 35,226,315 in 2002 353 352 Additional paid-in capital 843,682 841,659 Share warrants 401 401 Cumulative earnings 238,558 225,010 Accumulated other comprehensive loss (5,925) (6,402) Cumulative distributions (393,303) (374,629) ------------ ------------ Total beneficiaries' equity 683,818 686,443 ------------ ------------ Total liabilities and beneficiaries' equity $ 1,892,875 $ 1,919,288 ============ ============
BRANDYWINE REALTY TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share data)
Quarter Ended March 31, ------------------------- 2003 2002 ------------ ------------ Revenue Rents $ 65,137 $ 59,962 Tenant reimbursements 8,686 7,453 Other 2,732 2,880 ------------ ------------ Total revenue 76,555 70,295 Operating Expenses Property operating expenses 21,843 18,446 Real estate taxes 6,708 5,832 Interest 15,306 15,730 Depreciation and amortization 15,002 12,461 Administrative expenses 3,514 4,036 ------------ ------------ Total operating expenses 62,373 56,505 ------------ ------------ Income from continuing operations before equity in income of real estate ventures, net gain on sales of interests in real estate and minority interest 14,182 13,790 Equity in income of real estate ventures 158 464 ------------ ------------ Income from continuing operations before net gain on sales of interests in real estate and minority interest 14,340 14,254 Net gain on sales of interests in real estate 1,152 - Minority interest attributable to continuing operations (2,332) (2,361) ------------ ------------ Income from continuing operations 13,160 11,893 Discontinued operations: Income from discontinued operations 234 3,823 Net gain on disposition of discontinued operations 561 8,446 Minority interest (38) (693) ------------ ------------ Income from discontinued operations 757 11,576 ------------ ------------ Net Income 13,917 23,469 Income allocated to Preferred Shares (2,976) (2,977) ------------ ------------ Income allocated to Common Shares $ 10,941 $ 20,492 ============ ============ Earnings per Common Share after discontinued operations: Basic income per Common Share $ 0.30 $ 0.56 ============ ============ Basic weighted-average shares outstanding 35,300,142 35,700,964 ============ ============ Diluted income per Common Share $ 0.30 $ 0.55 ============ ============ Diluted weighted-average shares outstanding 35,369,883 35,749,669 ============ ============
BRANDYWINE REALTY TRUST FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION (unaudited, in thousands, except share and per share data)
Quarter Ended March 31, ------------------------- 2003 2002 ------------ ------------ Reconciliation of Net Income to Funds from Operations (FFO): Net income $ 13,917 $ 23,469 Add (deduct): Minority interest attributable to continuing operations 2,332 2,361 Net gain on sale of interests in real estate (1,152) - Minority interest attributable to discontinued operations 38 693 Net gain on disposition of discontinued operations (561) (8,446) ------------ ------------ Income before net gains on sales of interests in real estate and minority interest 14,574 18,077 Add: Depreciation: Real property 13,388 12,353 Real estate ventures 493 581 Amortization of leasing costs 1,640 1,367 ------------ ------------ Funds from operations (FFO) $ 30,095 $ 32,378 ============ ============ Number of weighted-average Common Shares 46,626,668 47,358,998 ============ ============ FFO per weighted-average Common Share - fully diluted $ 0.65 $ 0.68 ============ ============ Dividend per Common Share $ 0.44 $ 0.44 Payout ratio of FFO (1) 68.2% 64.4% EPS per weighted-average Common Share - fully diluted $ 0.30 $ 0.55 Cash Available for Distribution (CAD): FFO $ 30,095 $ 32,378 Add (deduct): Rental income from straight-line rents (1,484) (1,369) Deferred market rental income (66) - Amortization: Deferred financing costs 495 525 Deferred compensation costs 812 889 Second generation capital expenditures (2): Building and tenant improvements (5,317) (3,227) Lease commissions (1,381) (1,623) ------------ ------------ Cash available for distribution $ 23,154 $ 27,573 ============ ============ Number of weighted-average Common Shares 46,626,668 47,358,998 ============ ============ Dividend per Common Share $ 0.44 $ 0.44 Cash flows from: Operating activities $ 25,339 $ 23,499 Investing activities (6,601) 17,531 Financing activities (36,996) (24,039)
(1) Payout ratio is calculated by dividing dividend per Common Share by FFO per weighted-average Common Share (2) Represents expenditures incurred during the period (regardless if lease commencement is after quarter end). Excludes first generation costs, which consist of capital expenditures, tenant improvements and leasing commissions associated with development and purchase price adjustments relating to acquisitions (including seller escrows, purchase price reduction or costs anticipated to initially lease-up acquired properties). BRANDYWINE REALTY TRUST SAME STORE OPERATIONS (unaudited) Of the 238 properties owned by the Company as of March 31, 2003, a total of 225 properties ("Same Store Properties") containing an aggregate of 14.8 million net rentable square feet were owned for the entire three-month periods ended March 31, 2003 and 2002. Average occupancy for the Same Store Properties during the three-month periods ended March 31, was 90.6% during 2003 and 92.0% during 2002. The following table sets forth revenue and expense information for the Same Store Properties:
Quarter Ended March 31, ---------------------- Dollar Percent 2003 2002 Change Change ----------- ---------- ---------- ----------- (amounts in thousands) Revenue Rents (a) $ 57,714 $ 57,960 $ (246) -0.4% Tenant reimbursements 8,267 7,991 276 3.5% Other 1,210 1,174 36 3.1% ----------- ---------- ---------- Total revenue 67,191 67,125 66 0.1% Operating Expenses Property operating expenses (b) 22,337 18,882 3,455 18.3% Real estate taxes 6,147 5,808 339 5.8% ----------- ---------- ---------- Total property operating expenses 28,484 24,690 3,794 15.4% ----------- ---------- ---------- Net operating income $ 38,707 $ 42,435 $ (3,728) -8.8% =========== ========== ==========
(a) Includes straight-line rental income of $1,070,000 for 2003 and $1,204,000 for 2002 (b) Includes snow removal costs of $3.6 million in 2003 and $.7 million in 2002 The following table is a reconciliation of income from continuing operations to Same Store net operating income:
Quarter Ended March 31, ------------------------- 2003 2002 ------------ ------------ (amounts in thousands) Income from continuing operations $ 13,160 $ 11,893 Add/(deduct): Interest expense 15,306 15,730 Depreciation and amortization 15,028 13,720 Administrative expenses 3,514 4,036 Equity in income of real estate ventures (158) (464) Net gain on sale of interests in real estate (1,152) - Minority interest attributable to continuing operations 2,332 2,361 Income from discontinued operations 234 3,823 ------------ ------------ Consolidated net operating income 48,264 51,099 Less: Net operating income of non same store properties (9,557) (8,664) ------------ ------------ Same Store Net Operating Income $ 38,707 $ 42,435 ============ ============
First Quarter Earnings Call and Supplemental Information Package Brandywine President and CEO, Gerard H. Sweeney, will be hosting a conference call on Friday, April 25, 2003 at 1:00 p.m. EST. Call 1-877-679-9045. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, May 9, 2003 by calling 1-800-615-3210 - access code 97355. The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of first quarter earnings. The Supplemental Information package is available through the Company's website @ brandywinerealty.com. The Supplemental Information Package will be found in both the "About The Company" section and the "Investor Relations - Annual Reports" section of the web page. Brandywine Realty Trust, with headquarters in Plymouth Meeting, PA and regional offices in Mount Laurel, NJ and Richmond, VA, is one of the Mid-Atlantic Region's largest full-service real estate companies. Brandywine owns, manages or has an ownership interest in 290 office and industrial properties, aggregating 20.5 million square feet. # # #