þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended June 30, 2012 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to |
MARYLAND (Brandywine Realty Trust) | 23-2413352 | |
DELAWARE (Brandywine Operating Partnership L.P.) | 23-2862640 | |
(State or other jurisdiction of | (I.R.S. Employer | |
Incorporation or organization) | Identification No.) | |
555 East Lancaster Avenue | ||
Radnor, Pennsylvania | 19087 | |
(Address of principal executive offices) | (Zip Code) |
Brandywine Realty Trust | Yes þ No o | |
Brandywine Operating Partnership, L.P. | Yes þ No o |
Brandywine Realty Trust | Yes þ No o | |
Brandywine Operating Partnership, L.P. | Yes þ No o |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Brandywine Realty Trust | Yes o No þ | |
Brandywine Operating Partnership, L.P. | Yes o No þ |
• | facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business; |
• | remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and |
• | create time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | Consolidated Financial Statements; |
• | Parent Company’s and Operating Partnership’s Equity; and |
• | Liquidity and Capital Resources in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Page | |
Item 1. Brandywine Realty Trust | |
Brandywine Operating Partnership, L.P. | |
Financial Statements of Brandywine Operating Partnership, L.P. (unaudited) | |
Exhibit 3.1 | |
Exhibit 3.2 | |
Exhibit 4.1 | |
Exhibit 4.2 | |
Exhibit 31.1 | |
Exhibit 31.2 | |
Exhibit 31.3 | |
Exhibit 31.4 | |
Exhibit 32.1 | |
Exhibit 32.2 | |
Exhibit 32.3 | |
Exhibit 32.4 | |
EX-101 INSTANCE DOCUMENT | |
EX-101 SCHEMA DOCUMENT | |
EX-101 CALCULATION LINKBASE DOCUMENT | |
EX-101 LABELS LINKBASE DOCUMENT | |
EX-101 PRESENTATION LINKBASE DOCUMENT | |
EX-101 DEFINITION LINKBASE DOCUMENT |
Item 1. | — Financial Statements |
June 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Rental properties | $ | 4,639,047 | $ | 4,793,080 | |||
Accumulated depreciation | (897,367 | ) | (865,710 | ) | |||
Operating real estate investments, net | 3,741,680 | 3,927,370 | |||||
Construction-in-progress | 57,420 | 25,083 | |||||
Land inventory | 109,564 | 109,008 | |||||
Total real estate investments, net | 3,908,664 | 4,061,461 | |||||
Cash and cash equivalents | 190,055 | 410 | |||||
Available-for-sale securities | 42,072 | — | |||||
Accounts receivable, net | 11,445 | 14,718 | |||||
Accrued rent receivable, net | 113,380 | 108,101 | |||||
Assets held for sale, net | 41,450 | — | |||||
Investment in real estate ventures, at equity | 133,292 | 115,807 | |||||
Deferred costs, net | 114,920 | 115,362 | |||||
Intangible assets, net | 57,927 | 70,515 | |||||
Notes receivable | 7,226 | 18,186 | |||||
Other assets | 48,739 | 53,158 | |||||
Total assets | $ | 4,669,170 | $ | 4,557,718 | |||
LIABILITIES AND BENEFICIARIES’ EQUITY | |||||||
Mortgage notes payable | $ | 505,214 | $ | 511,061 | |||
Unsecured credit facility | — | 275,500 | |||||
Unsecured term loans | 600,000 | 37,500 | |||||
Unsecured senior notes, net of discounts | 1,404,627 | 1,569,934 | |||||
Accounts payable and accrued expenses | 57,653 | 69,929 | |||||
Distributions payable | 24,889 | 23,895 | |||||
Deferred income, gains and rent | 95,390 | 99,569 | |||||
Acquired lease intangibles, net | 31,526 | 35,106 | |||||
Other liabilities | 55,264 | 45,528 | |||||
Liabilities related to assets held for sale | 878 | — | |||||
Total liabilities | 2,775,441 | 2,668,022 | |||||
Commitments and contingencies (Note 17) | |||||||
Brandywine Realty Trust’s equity: | |||||||
Preferred Shares (shares authorized-20,000,000): | |||||||
7.50% Series C Preferred Shares, $0.01 par value; issued and outstanding- 0 in 2012 and 2,000,000 in 2011 | — | 20 | |||||
7.375% Series D Preferred Shares, $0.01 par value; issued and outstanding- 2,300,000 in 2012 and 2011, respectively | 23 | 23 | |||||
6.90% Series E Preferred Shares, $0.01 par value; issued and outstanding- 4,000,000 in 2012 and 0 in 2011 | 40 | — | |||||
Common Shares of Brandywine Realty Trust’s beneficial interest, $0.01 par value; shares authorized 200,000,000; 143,367,946 and 142,690,755 issued in 2012 and 2011, respectively and 143,367,946 and 142,690,755 outstanding in 2012 and 2011, respectively | 1,431 | 1,424 | |||||
Additional paid-in capital | 2,826,475 | 2,776,197 | |||||
Deferred compensation payable in common shares | 5,436 | 5,631 | |||||
Common shares in grantor trust, 293,122 in 2012 and 292,646 in 2011 | (5,436 | ) | (5,631 | ) | |||
Cumulative earnings | 493,266 | 477,338 | |||||
Accumulated other comprehensive loss | (16,449 | ) | (6,079 | ) | |||
Cumulative distributions | (1,442,662 | ) | (1,392,332 | ) | |||
Total Brandywine Realty Trust’s equity | 1,862,124 | 1,856,591 | |||||
Non-controlling interests | 31,605 | 33,105 | |||||
Total equity | 1,893,729 | 1,889,696 | |||||
Total liabilities and equity | $ | 4,669,170 | $ | 4,557,718 |
For the three-month periods ended | For the six-month periods ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 115,032 | $ | 114,995 | $ | 229,271 | $ | 230,328 | |||||||
Tenant reimbursements | 18,605 | 18,237 | 37,613 | 40,177 | |||||||||||
Termination fees | 101 | 1,948 | 1,591 | 2,516 | |||||||||||
Third party management fees, labor reimbursement and leasing | 2,872 | 2,733 | 6,014 | 5,486 | |||||||||||
Other | 966 | 1,336 | 2,498 | 2,359 | |||||||||||
Total revenue | 137,576 | 139,249 | 276,987 | 280,866 | |||||||||||
Operating Expenses: | |||||||||||||||
Property operating expenses | 37,906 | 39,115 | 77,363 | 83,235 | |||||||||||
Real estate taxes | 14,134 | 13,786 | 28,228 | 27,495 | |||||||||||
Third party management expenses | 1,264 | 1,506 | 2,514 | 3,016 | |||||||||||
Depreciation and amortization | 49,331 | 55,710 | 98,880 | 105,214 | |||||||||||
General and administrative expenses | 6,079 | 5,890 | 12,129 | 12,134 | |||||||||||
Total operating expenses | 108,714 | 116,007 | 219,114 | 231,094 | |||||||||||
Operating income | 28,862 | 23,242 | 57,873 | 49,772 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest income | 1,841 | 421 | 2,324 | 862 | |||||||||||
Interest expense | (32,981 | ) | (34,738 | ) | (67,125 | ) | (67,131 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,261 | ) | (1,070 | ) | (2,572 | ) | (1,998 | ) | |||||||
Interest expense — financing obligation | (196 | ) | — | (378 | ) | — | |||||||||
Equity in income of real estate ventures | 838 | 1,088 | 882 | 2,321 | |||||||||||
Net gain on sale of interests in real estate | — | — | — | 2,791 | |||||||||||
Loss on early extinguishment of debt | (1,250 | ) | (756 | ) | (1,498 | ) | (756 | ) | |||||||
Loss from continuing operations | (4,147 | ) | (11,813 | ) | (10,494 | ) | (14,139 | ) | |||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 783 | 1,743 | 1,798 | 3,579 | |||||||||||
Net gain on disposition of discontinued operations | 10,166 | 3,836 | 24,834 | 3,836 | |||||||||||
Total discontinued operations | 10,949 | 5,579 | 26,632 | 7,415 | |||||||||||
Net income (loss) | 6,802 | (6,234 | ) | 16,138 | (6,724 | ) | |||||||||
Net (income) loss from discontinued operations attributable to non-controlling interests — LP units | (200 | ) | (111 | ) | (487 | ) | (148 | ) | |||||||
Net (income) loss attributable to non-controlling interests — LP units | 169 | 276 | 322 | 364 | |||||||||||
Net (income) loss attributable to non-controlling interests | (31 | ) | 165 | (165 | ) | 216 | |||||||||
Net income (loss) attributable to Brandywine Realty Trust | 6,771 | (6,069 | ) | 15,973 | (6,508 | ) | |||||||||
Distribution to Preferred Shares | (3,049 | ) | (1,998 | ) | (5,047 | ) | (3,996 | ) | |||||||
Preferred share redemption charge | (2,090 | ) | — | (2,090 | ) | — | |||||||||
Amount allocated to unvested restricted shareholders | (95 | ) | (121 | ) | (191 | ) | (263 | ) | |||||||
Net income (loss) attributable to Common Shareholders of Brandywine Realty Trust | $ | 1,537 | $ | (8,188 | ) | $ | 8,645 | $ | (10,767 | ) | |||||
Basic income (loss) per Common Share: | |||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.12 | ) | $ | (0.13 | ) | |||
Discontinued operations | 0.08 | 0.04 | 0.18 | 0.05 | |||||||||||
$ | 0.01 | $ | (0.06 | ) | $ | 0.06 | $ | (0.08 | ) | ||||||
Diluted income (loss) per Common Share: | |||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.12 | ) | $ | (0.13 | ) | |||
Discontinued operations | 0.08 | 0.04 | 0.18 | 0.05 | |||||||||||
$ | 0.01 | $ | (0.06 | ) | $ | 0.06 | $ | (0.08 | ) | ||||||
Basic weighted average shares outstanding | 143,300,637 | 135,342,538 | 143,060,796 | 134,962,093 | |||||||||||
Diluted weighted average shares outstanding | 143,300,637 | 135,342,538 | 143,060,796 | 134,962,093 | |||||||||||
Net income (loss) attributable to Brandywine Realty Trust | |||||||||||||||
Loss from continuing operations | $ | (3,978 | ) | $ | (11,537 | ) | $ | (10,172 | ) | $ | (13,775 | ) | |||
Income from discontinued operations | 10,749 | 5,468 | 26,145 | 7,267 | |||||||||||
Net income (loss) | $ | 6,771 | $ | (6,069 | ) | $ | 15,973 | $ | (6,508 | ) |
For the three-month periods ended | For the six-month periods ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income (loss) | $ | 6,802 | $ | (6,234 | ) | $ | 16,138 | $ | (6,724 | ) | |||||
Comprehensive income (loss): | |||||||||||||||
Unrealized loss on derivative financial instruments | (10,650 | ) | — | (10,623 | ) | (613 | ) | ||||||||
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net | 76 | 51 | 124 | 74 | |||||||||||
Unrealized loss on available-for-sale securities | (65 | ) | — | (65 | ) | — | |||||||||
Total comprehensive income (loss) | (10,639 | ) | 51 | (10,564 | ) | (539 | ) | ||||||||
Comprehensive income (loss) | (3,837 | ) | (6,183 | ) | 5,574 | (7,263 | ) | ||||||||
Comprehensive (income) loss attributable to non-controlling interest | 163 | 164 | 29 | 226 | |||||||||||
Comprehensive income (loss) attributable to Brandywine Realty Trust | $ | (3,674 | ) | $ | (6,019 | ) | $ | 5,603 | $ | (7,037 | ) |
Number of Preferred Shares | Par Value of Preferred Shares | Number of Common Shares | Number of Treasury Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust’s beneficial interest | Additional Paid-in Capital | Common Shares in Treasury | Deferred Compensation Payable in Common Shares | Common Shares in Grantor Trust | Cumulative Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions | Non-Controlling Interests | Total | |||||||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2011 | 4,300,000 | $ | 43 | 142,690,755 | — | 292,646 | $ | 1,424 | $ | 2,776,197 | $ | — | $ | 5,631 | $ | (5,631 | ) | $ | 477,338 | $ | (6,079 | ) | $ | (1,392,332 | ) | $ | 33,105 | $ | 1,889,696 | ||||||||||||||||||||||||||
Net income | 15,973 | 165 | 16,138 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (10,370 | ) | (194 | ) | (10,564 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares | 4,000,000 | 40 | 96,810 | 96,850 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share Issuance Costs | (610 | ) | (610 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Preferred Shares | (2,000,000 | ) | (20 | ) | (47,890 | ) | (47,910 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Conversion of LP Units to Common Shares | 20,464 | — | 149 | (45 | ) | (332 | ) | (228 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Bonus Share Issuance | 35,703 | 387 | 387 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Shares | 280,851 | 9,036 | 3 | (1,295 | ) | (1,292 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Amortization | 1,426 | 1,426 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Performance Units | 249,797 | 3 | (1,332 | ) | (1,329 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Performance Units Amortization | 1,205 | 1,205 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Share Options | 94,429 | 1 | 274 | 275 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share Option Amortization | 747 | 747 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/to Deferred Compensation Plan | (5,389 | ) | (8,560 | ) | (195 | ) | 195 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Trustee Fees Paid in Shares | 1,336 | — | 15 | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to Non-controlling Interest | 392 | (379 | ) | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (5,047 | ) | (5,047 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share redemption charges | (2,090 | ) | (2,090 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.30 per share) | (43,193 | ) | (760 | ) | (43,953 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, June 30, 2012 | 6,300,000 | $ | 63 | 143,367,946 | — | 293,122 | $ | 1,431 | $ | 2,826,475 | $ | — | $ | 5,436 | $ | (5,436 | ) | $ | 493,266 | $ | (16,449 | ) | $ | (1,442,662 | ) | $ | 31,605 | $ | 1,893,729 |
Number of Preferred Shares | Par Value of Preferred Shares | Number of Common Shares | Number of Treasury Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust’s beneficial interest | Additional Paid-in Capital | Common Shares in Treasury | Deferred Compensation Payable in Common Shares | Common Shares in Grantor Trust | Cumulative Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions | Non-Controlling Interests | Total | |||||||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2010 | 4,300,000 | $ | 43 | 134,601,796 | 116,679 | 291,281 | $ | 1,343 | $ | 2,671,217 | $ | (3,074 | ) | $ | 5,774 | $ | (5,774 | ) | $ | 483,439 | $ | (1,945 | ) | $ | (1,301,521 | ) | $ | 128,272 | $ | 1,977,774 | |||||||||||||||||||||||||
Net loss | (6,508 | ) | (216 | ) | (6,724 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (529 | ) | (10 | ) | (539 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Shares of Beneficial Interest | 679,285 | 7 | 8,265 | 8,272 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Equity issuance costs | (234 | ) | (26 | ) | (260 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of LP Units to Common Shares | 92,992 | 1 | 1,098 | (1,099 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Bonus Share Issuance | (463 | ) | 463 | 12 | 5 | (5 | ) | (6 | ) | 6 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Shares | 85,248 | (116,216 | ) | 9,043 | 1 | (1,820 | ) | 3,062 | (1,598 | ) | (355 | ) | |||||||||||||||||||||||||||||||||||||||||||
Restricted Share Amortization | 1,519 | 1,519 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Performance Units Amortization | 780 | 780 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Share Options | 76,887 | 1 | 428 | 429 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share Option Amortization | 728 | 728 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Outperformance Plan Amortization | 109 | 109 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/to Deferred Compensation Plan | (487 | ) | (4,935 | ) | (16 | ) | (42 | ) | 42 | (16 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Share Choice Plan Issuance | (1,684 | ) | (55 | ) | (55 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Trustees Fees Paid in Shares | 2,672 | 32 | 32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to Non-controlling Interest | 2,679 | (2,679 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (3,996 | ) | (3,996 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.30 per share) | (40,836 | ) | (824 | ) | (41,660 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, June 30, 2011 | 4,300,000 | $ | 43 | 135,536,709 | — | 295,852 | $ | 1,353 | $ | 2,684,730 | $ | — | $ | 5,737 | $ | (5,737 | ) | $ | 475,327 | $ | (2,474 | ) | $ | (1,346,353 | ) | $ | 123,418 | $ | 1,936,044 |
Six-month periods ended | |||||||
June 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 16,138 | $ | (6,724 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation and amortization | 101,624 | 109,776 | |||||
Amortization of deferred financing costs | 2,572 | 1,998 | |||||
Amortization of debt discount/(premium), net | 745 | 529 | |||||
Amortization of stock compensation costs | 2,433 | 3,063 | |||||
Shares used for employee taxes upon vesting of share awards | (2,234 | ) | (1,012 | ) | |||
Straight-line rent income | (12,861 | ) | (9,447 | ) | |||
Amortization of acquired above (below) market leases to rental revenue, net | (2,922 | ) | (2,636 | ) | |||
Straight-line ground rent expense | 949 | 975 | |||||
Provision for doubtful accounts | 962 | 689 | |||||
Real estate venture income in excess of distributions | (590 | ) | (1,618 | ) | |||
Net gain on sale of interests in real estate | (24,834 | ) | (6,627 | ) | |||
Loss on early extinguishment of debt | 1,498 | 756 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 3,561 | 2,063 | |||||
Other assets | 5,260 | 2,231 | |||||
Accounts payable and accrued expenses | (11,546 | ) | (4,500 | ) | |||
Deferred income, gains and rent | (2,871 | ) | (5,048 | ) | |||
Deferred financing obligation | (825 | ) | — | ||||
Other liabilities | (1,438 | ) | 3,874 | ||||
Net cash from operating activities | 75,621 | 88,342 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (9,226 | ) | (22,032 | ) | |||
Investments in available-for-sale securities | (98,744 | ) | — | ||||
Proceeds from the sale of available-for-sale securities | 56,322 | — | |||||
Sales of properties, net | 120,957 | 5,639 | |||||
Proceeds from repayment of mortgage notes receivable | 23,931 | — | |||||
Capital expenditures | (51,701 | ) | (67,768 | ) | |||
Advances for purchase of tenant assets, net of repayments | 283 | (386 | ) | ||||
Loan provided to an unconsolidated Real Estate Venture partner | — | (1,045 | ) | ||||
Investment in unconsolidated Real Estate Ventures | (18,617 | ) | — | ||||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 1,723 | 3,063 | |||||
Leasing costs | (14,940 | ) | (14,724 | ) | |||
Net cash from (used in) investing activities | 9,988 | (97,253 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from New Unsecured Term Loans | 600,000 | — | |||||
Proceeds from Credit Facility | 21,500 | 181,500 | |||||
Repayments of Credit Facility | (297,000 | ) | (322,500 | ) | |||
Repayments of mortgage notes payable | (6,028 | ) | (122,204 | ) | |||
Proceeds from unsecured notes | — | 321,498 | |||||
Deferred financing obligation non-cash interest expense | 468 | — | |||||
Net proceeds from issuance of common shares | — | 8,069 | |||||
Net proceeds from issuance of preferred shares | 96,240 | — | |||||
Redemption of preferred shares | (50,188 | ) | — | ||||
Repayments of unsecured notes | (167,371 | ) | (23,931 | ) | |||
Repayments of unsecured term loan | (37,500 | ) | — | ||||
Net settlement of hedge transactions | (74 | ) | (613 | ) | |||
Debt financing costs | (8,431 | ) | (3,662 | ) | |||
Exercise of stock options | 276 | 429 | |||||
Distributions paid to shareholders | (47,059 | ) | (44,669 | ) | |||
Distributions to noncontrolling interest | (797 | ) | (838 | ) | |||
Net cash from (used in) financing activities | 104,036 | (6,921 | ) | ||||
Increase (decrease) in cash and cash equivalents | 189,645 | (15,832 | ) | ||||
Cash and cash equivalents at beginning of period | 410 | 16,565 | |||||
Cash and cash equivalents at end of period | $ | 190,055 | $ | 733 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the six months ended June 30, 2012 and 2011 of $1,207 and $859, respectively | $ | 69,480 | $ | 67,098 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in capital expenditures financed through accounts payable at period end | (1,735 | ) | 903 | ||||
Change in capital expenditures financed through retention payable at period end | 56 | (5,500 | ) | ||||
Change in unfunded tenant allowance | (1,144 | ) | 514 |
June 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,639,047 | $ | 4,793,080 | |||
Accumulated depreciation | (897,367 | ) | (865,710 | ) | |||
Operating real estate investments, net | 3,741,680 | 3,927,370 | |||||
Construction-in-progress | 57,420 | 25,083 | |||||
Land inventory | 109,564 | 109,008 | |||||
Total real estate investments, net | 3,908,664 | 4,061,461 | |||||
Cash and cash equivalents | 190,055 | 410 | |||||
Available-for-sale securities | 42,072 | — | |||||
Accounts receivable, net | 11,445 | 14,718 | |||||
Accrued rent receivable, net | 113,380 | 108,101 | |||||
Assets held for sale, net | 41,450 | — | |||||
Investment in real estate ventures, at equity | 133,292 | 115,807 | |||||
Deferred costs, net | 114,920 | 115,362 | |||||
Intangible assets, net | 57,927 | 70,515 | |||||
Notes receivable | 7,226 | 18,186 | |||||
Other assets | 48,739 | 53,158 | |||||
Total assets | $ | 4,669,170 | $ | 4,557,718 | |||
LIABILITIES AND EQUITY | |||||||
Mortgage notes payable | $ | 505,214 | $ | 511,061 | |||
Unsecured credit facility | — | 275,500 | |||||
Unsecured term loans | 600,000 | 37,500 | |||||
Unsecured senior notes, net of discounts | 1,404,627 | 1,569,934 | |||||
Accounts payable and accrued expenses | 57,653 | 69,929 | |||||
Distributions payable | 24,889 | 23,895 | |||||
Deferred income, gains and rent | 95,390 | 99,569 | |||||
Acquired lease intangibles, net | 31,526 | 35,106 | |||||
Other liabilities | 55,264 | 45,528 | |||||
Liabilities related to assets held for sale | 878 | — | |||||
Total liabilities | 2,775,441 | 2,668,022 | |||||
Commitments and contingencies (Note 17) | |||||||
Redeemable limited partnership units at redemption value; 2,657,721 and 2,698,648 issued and outstanding in 2012 and 2011, respectively | 40,106 | 38,370 | |||||
Brandywine Operating Partnership, L.P.’s equity: | |||||||
7.50% Series D Preferred Mirror Units; issued and outstanding- 0 in 2012 and 2,000,000 in 2011 | — | 47,912 | |||||
7.375% Series E Preferred Mirror Units; issued and outstanding- 2,300,000 in 2012 and 2011, respectively | 55,538 | 55,538 | |||||
6.90% Series E-Linked Preferred Mirror Units; issued and outstanding- 4,000,000 in 2012 and 0 in 2011 | 96,850 | — | |||||
General Partnership Capital, 143,367,946 and 142,690,755 units issued in 2012 and 2011, respectively and 143,367,946 and 142,690,755 units outstanding in 2012 and 2011, respectively | 1,717,657 | 1,754,302 | |||||
Accumulated other comprehensive loss | (16,422 | ) | (6,426 | ) | |||
Total Brandywine Operating Partnership, L.P.’s equity | 1,853,623 | 1,851,326 | |||||
Total liabilities and partners’ equity | $ | 4,669,170 | $ | 4,557,718 |
For the three-month periods ended | For the six-month periods ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 115,032 | $ | 114,995 | $ | 229,271 | $ | 230,328 | |||||||
Tenant reimbursements | 18,605 | 18,237 | 37,613 | 40,177 | |||||||||||
Termination fees | 101 | 1,948 | 1,591 | 2,516 | |||||||||||
Third party management fees, labor reimbursement and leasing | 2,872 | 2,733 | 6,014 | 5,486 | |||||||||||
Other | 966 | 1,336 | 2,498 | 2,359 | |||||||||||
Total revenue | 137,576 | 139,249 | 276,987 | 280,866 | |||||||||||
Operating Expenses: | |||||||||||||||
Property operating expenses | 37,906 | 39,115 | 77,363 | 83,235 | |||||||||||
Real estate taxes | 14,134 | 13,786 | 28,228 | 27,495 | |||||||||||
Third party management expenses | 1,264 | 1,506 | 2,514 | 3,016 | |||||||||||
Depreciation and amortization | 49,331 | 55,710 | 98,880 | 105,214 | |||||||||||
General & administrative expenses | 6,079 | 5,890 | 12,129 | 12,134 | |||||||||||
Total operating expenses | 108,714 | 116,007 | 219,114 | 231,094 | |||||||||||
Operating income | 28,862 | 23,242 | 57,873 | 49,772 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest income | 1,841 | 421 | 2,324 | 862 | |||||||||||
Interest expense | (32,981 | ) | (34,738 | ) | (67,125 | ) | (67,131 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,261 | ) | (1,070 | ) | (2,572 | ) | (1,998 | ) | |||||||
Interest expense — financing obligation | (196 | ) | — | (378 | ) | — | |||||||||
Equity in income of real estate ventures | 838 | 1,088 | 882 | 2,321 | |||||||||||
Net gain on sale of interests in real estate | — | — | — | 2,791 | |||||||||||
Loss on early extinguishment of debt | (1,250 | ) | (756 | ) | (1,498 | ) | (756 | ) | |||||||
Loss from continuing operations | (4,147 | ) | (11,813 | ) | (10,494 | ) | (14,139 | ) | |||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 783 | 1,743 | 1,798 | 3,579 | |||||||||||
Net gain on disposition of discontinued operations | 10,166 | 3,836 | 24,834 | 3,836 | |||||||||||
Total discontinued operations | 10,949 | 5,579 | 26,632 | 7,415 | |||||||||||
Net income (loss) | 6,802 | (6,234 | ) | 16,138 | (6,724 | ) | |||||||||
Distribution to Preferred Units | (3,049 | ) | (1,998 | ) | (5,047 | ) | (3,996 | ) | |||||||
Preferred unit redemption charge | (2,090 | ) | — | (2,090 | ) | — | |||||||||
Amount allocated to unvested restricted unitholders | (95 | ) | (121 | ) | (191 | ) | (263 | ) | |||||||
Net income (loss) attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P. | $ | 1,568 | $ | (8,353 | ) | $ | 8,810 | $ | (10,983 | ) | |||||
Basic income (loss) per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.12 | ) | $ | (0.13 | ) | |||
Discontinued operations | 0.07 | 0.04 | 0.18 | 0.05 | |||||||||||
$ | 0.01 | $ | (0.06 | ) | $ | 0.06 | $ | (0.08 | ) | ||||||
Diluted income (loss) per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.12 | ) | $ | (0.13 | ) | |||
Discontinued operations | 0.07 | 0.04 | 0.18 | 0.05 | |||||||||||
$ | 0.01 | $ | (0.06 | ) | $ | 0.06 | $ | (0.08 | ) | ||||||
Basic weighted average common partnership units outstanding | 145,958,358 | 145,220,765 | 145,721,890 | 144,852,515 | |||||||||||
Diluted weighted average common partnership units outstanding | 145,958,358 | 145,220,765 | 145,721,890 | 144,852,515 | |||||||||||
Net income (loss) attributable to Brandywine Operating Partnership, L.P. | |||||||||||||||
Loss from continuing operations | $ | (4,147 | ) | $ | (11,813 | ) | $ | (10,494 | ) | $ | (14,139 | ) | |||
Income from discontinued operations | 10,949 | 5,579 | 26,632 | 7,415 | |||||||||||
Net income (loss) | $ | 6,802 | $ | (6,234 | ) | $ | 16,138 | $ | (6,724 | ) |
For the three-month periods ended | For the six-month periods ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income (loss) | $ | 6,802 | $ | (6,234 | ) | $ | 16,138 | $ | (6,724 | ) | |||||
Comprehensive income (loss): | |||||||||||||||
Unrealized loss on derivative financial instruments | (10,650 | ) | — | (10,623 | ) | (613 | ) | ||||||||
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net | 76 | 51 | 124 | 74 | |||||||||||
Unrealized loss on available-for-sale securities | (65 | ) | — | (65 | ) | — | |||||||||
Total comprehensive income (loss) | (10,639 | ) | 51 | (10,564 | ) | (539 | ) | ||||||||
Comprehensive income (loss) attributable to Brandywine Operating Partnership, L.P. | $ | (3,837 | ) | $ | (6,183 | ) | $ | 5,574 | $ | (7,263 | ) |
Six-month periods ended | |||||||
June 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 16,138 | $ | (6,724 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation and amortization | 101,624 | 109,776 | |||||
Amortization of deferred financing costs | 2,572 | 1,998 | |||||
Amortization of debt discount/(premium), net | 745 | 529 | |||||
Amortization of stock compensation costs | 2,433 | 3,063 | |||||
Shares used for employee taxes upon vesting of share awards | (2,234 | ) | (1,012 | ) | |||
Straight-line rent income | (12,861 | ) | (9,447 | ) | |||
Amortization of acquired above (below) market leases, net | (2,922 | ) | (2,636 | ) | |||
Straight-line ground rent expense | 949 | 975 | |||||
Provision for doubtful accounts | 962 | 689 | |||||
Real estate venture income in excess of distributions | (590 | ) | (1,618 | ) | |||
Net gain on sale of interests in real estate | (24,834 | ) | (6,627 | ) | |||
Loss on early extinguishment of debt | 1,498 | 756 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 3,561 | 2,063 | |||||
Other assets | 5,260 | 2,231 | |||||
Accounts payable and accrued expenses | (11,546 | ) | (4,500 | ) | |||
Deferred income, gains and rent |