þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 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 10.1 | |
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 |
September 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Rental properties | $ | 4,660,289 | $ | 4,793,080 | |||
Accumulated depreciation | (925,342 | ) | (865,710 | ) | |||
Operating real estate investments, net | 3,734,947 | 3,927,370 | |||||
Construction-in-progress | 43,449 | 25,083 | |||||
Land inventory | 95,500 | 109,008 | |||||
Total real estate investments, net | 3,873,896 | 4,061,461 | |||||
Cash and cash equivalents | 241,616 | 410 | |||||
Accounts receivable, net | 13,394 | 14,718 | |||||
Accrued rent receivable, net | 117,306 | 108,101 | |||||
Investment in real estate ventures, at equity | 179,037 | 115,807 | |||||
Deferred costs, net | 119,182 | 115,362 | |||||
Intangible assets, net | 52,575 | 70,515 | |||||
Notes receivable | 7,226 | 18,186 | |||||
Other assets | 62,494 | 53,158 | |||||
Total assets | $ | 4,666,726 | $ | 4,557,718 | |||
LIABILITIES AND BENEFICIARIES’ EQUITY | |||||||
Mortgage notes payable | $ | 502,123 | $ | 511,061 | |||
Unsecured credit facility | — | 275,500 | |||||
Unsecured term loans | 600,000 | 37,500 | |||||
Unsecured senior notes, net of discounts | 1,404,466 | 1,569,934 | |||||
Accounts payable and accrued expenses | 80,554 | 69,929 | |||||
Distributions payable | 24,820 | 23,895 | |||||
Deferred income, gains and rent | 80,748 | 99,569 | |||||
Acquired lease intangibles, net | 29,824 | 35,106 | |||||
Other liabilities | 59,982 | 45,528 | |||||
Total liabilities | 2,782,517 | 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; 143,438,501 and 142,690,755 issued and outstanding in 2012 and 2011, respectively | 1,432 | 1,424 | |||||
Additional paid-in capital | 2,828,722 | 2,776,197 | |||||
Deferred compensation payable in common shares | 5,352 | 5,631 | |||||
Common shares in grantor trust, 290,745 in 2012 and 292,646 in 2011 | (5,352 | ) | (5,631 | ) | |||
Cumulative earnings | 510,093 | 477,338 | |||||
Accumulated other comprehensive loss | (20,456 | ) | (6,079 | ) | |||
Cumulative distributions | (1,467,058 | ) | (1,392,332 | ) | |||
Total Brandywine Realty Trust’s equity | 1,852,796 | 1,856,591 | |||||
Non-controlling interests | 31,413 | 33,105 | |||||
Total equity | 1,884,209 | 1,889,696 | |||||
Total liabilities and equity | $ | 4,666,726 | $ | 4,557,718 |
For the three-month periods ended | For the nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 113,989 | $ | 116,251 | $ | 343,260 | $ | 346,579 | |||||||
Tenant reimbursements | 20,695 | 19,010 | 58,308 | 59,187 | |||||||||||
Termination fees | 931 | 157 | 2,522 | 2,673 | |||||||||||
Third party management fees, labor reimbursement and leasing | 3,007 | 3,028 | 9,021 | 8,514 | |||||||||||
Other | 1,761 | 955 | 4,259 | 3,314 | |||||||||||
Total revenue | 140,383 | 139,401 | 417,370 | 420,267 | |||||||||||
Operating Expenses: | |||||||||||||||
Property operating expenses | 40,705 | 40,788 | 118,068 | 124,023 | |||||||||||
Real estate taxes | 14,064 | 13,204 | 42,292 | 40,699 | |||||||||||
Third party management expenses | 1,298 | 1,379 | 3,812 | 4,395 | |||||||||||
Depreciation and amortization | 48,738 | 51,943 | 147,618 | 157,157 | |||||||||||
General and administrative expenses | 6,080 | 6,177 | 18,209 | 18,311 | |||||||||||
Total operating expenses | 110,885 | 113,491 | 329,999 | 344,585 | |||||||||||
Operating income | 29,498 | 25,910 | 87,371 | 75,682 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest income | 311 | 523 | 2,635 | 1,385 | |||||||||||
Historic tax credit transaction income | 11,840 | 12,026 | 11,840 | 12,026 | |||||||||||
Interest expense | (32,620 | ) | (32,346 | ) | (99,745 | ) | (99,477 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,218 | ) | (1,846 | ) | (3,790 | ) | (3,844 | ) | |||||||
Interest expense — financing obligation | (230 | ) | — | (608 | ) | — | |||||||||
Equity in income of real estate ventures | 500 | 418 | 1,382 | 2,739 | |||||||||||
Net gain on sale of interests in real estate | — | — | — | 2,791 | |||||||||||
Loss on real estate venture formation | (950 | ) | — | (950 | ) | — | |||||||||
Gain (loss) on early extinguishment of debt | (51 | ) | 176 | (1,549 | ) | (580 | ) | ||||||||
Income (loss) from continuing operations | 7,080 | 4,861 | (3,414 | ) | (9,278 | ) | |||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 69 | 1,750 | 1,867 | 5,329 | |||||||||||
Net gain on disposition of discontinued operations | 9,940 | — | 34,774 | 3,836 | |||||||||||
Total discontinued operations | 10,009 | 1,750 | 36,641 | 9,165 | |||||||||||
Net income (loss) | 17,089 | 6,611 | 33,227 | (113 | ) | ||||||||||
Net (income) loss from discontinued operations attributable to non-controlling interests — LP units | (182 | ) | (86 | ) | (669 | ) | (234 | ) | |||||||
Net (income) loss attributable to non-controlling interests — LP units | (78 | ) | (276 | ) | 244 | 88 | |||||||||
Net (income) loss attributable to non-controlling interests | (260 | ) | (362 | ) | (425 | ) | (146 | ) | |||||||
Net income (loss) attributable to Brandywine Realty Trust | 16,829 | 6,249 | 32,802 | (259 | ) | ||||||||||
Distribution to Preferred Shares | (2,785 | ) | (1,998 | ) | (7,832 | ) | (5,994 | ) | |||||||
Preferred share redemption charge | — | — | (2,090 | ) | — | ||||||||||
Amount allocated to unvested restricted shareholders | (95 | ) | (121 | ) | (286 | ) | (384 | ) | |||||||
Net income (loss) attributable to Common Shareholders of Brandywine Realty Trust | $ | 13,949 | $ | 4,130 | $ | 22,594 | $ | (6,637 | ) | ||||||
Basic income (loss) per Common Share: | |||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.02 | $ | (0.09 | ) | $ | (0.12 | ) | |||||
Discontinued operations | 0.07 | 0.01 | 0.25 | 0.07 | |||||||||||
$ | 0.10 | $ | 0.03 | $ | 0.16 | $ | (0.05 | ) | |||||||
Diluted income (loss) per Common Share: | |||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.02 | $ | (0.09 | ) | $ | (0.12 | ) | |||||
Discontinued operations | 0.07 | 0.01 | 0.25 | 0.07 | |||||||||||
$ | 0.10 | $ | 0.03 | $ | 0.16 | $ | (0.05 | ) | |||||||
Basic weighted average shares outstanding | 143,424,485 | 135,562,487 | 143,182,911 | 135,164,424 | |||||||||||
Diluted weighted average shares outstanding | 144,128,010 | 136,841,451 | 143,182,911 | 135,164,424 | |||||||||||
Net income (loss) attributable to Brandywine Realty Trust | |||||||||||||||
Income (loss) from continuing operations | $ | 7,002 | $ | 4,585 | $ | (3,170 | ) | $ | (9,190 | ) | |||||
Income from discontinued operations | 9,827 | 1,664 | 35,972 | 8,931 | |||||||||||
Net income (loss) | $ | 16,829 | $ | 6,249 | $ | 32,802 | $ | (259 | ) |
For the three-month periods ended | For the nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income (loss) | $ | 17,089 | $ | 6,611 | $ | 33,227 | $ | (113 | ) | ||||||
Comprehensive income (loss): | |||||||||||||||
Unrealized loss on derivative financial instruments | (4,222 | ) | — | (14,780 | ) | (613 | ) | ||||||||
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net | 76 | 53 | 200 | 126 | |||||||||||
Unrealized gain on available-for-sale securities | 65 | — | — | — | |||||||||||
Total comprehensive income (loss) | (4,081 | ) | 53 | (14,580 | ) | (487 | ) | ||||||||
Comprehensive income (loss) | 13,008 | 6,664 | 18,647 | (600 | ) | ||||||||||
Comprehensive (income) loss attributable to non-controlling interest | (186 | ) | (365 | ) | (158 | ) | (139 | ) | |||||||
Comprehensive income (loss) attributable to Brandywine Realty Trust | $ | 12,822 | $ | 6,299 | $ | 18,489 | $ | (739 | ) |
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 | 32,804 | 423 | 33,227 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (14,377 | ) | (203 | ) | (14,580 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
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 | 1 | 149 | (49 | ) | (332 | ) | (231 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Bonus Share Issuance | 35,703 | 387 | 387 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Shares | 280,851 | 9,036 | 3 | (1,294 | ) | (1,291 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Amortization | 2,138 | 2,138 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Performance Units | 249,797 | 2 | (1,331 | ) | (1,329 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Performance Units Amortization | 1,926 | 1,926 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Share Options | 165,159 | 2 | 746 | 748 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share Option Amortization | 1,121 | 1,121 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/to Deferred Compensation Plan | (5,564 | ) | (10,937 | ) | (279 | ) | 279 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Trustee Fees Paid in Shares | 1,336 | — | 15 | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to Non-controlling Interest | 358 | (347 | ) | 11 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (7,832 | ) | (7,832 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share redemption charges | (2,090 | ) | (2,090 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.45 per share) | (64,804 | ) | (1,233 | ) | (66,037 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, September 30, 2012 | 6,300,000 | $ | 63 | 143,438,501 | — | 290,745 | $ | 1,432 | $ | 2,828,722 | $ | — | $ | 5,352 | $ | (5,352 | ) | $ | 510,093 | $ | (20,456 | ) | $ | (1,467,058 | ) | $ | 31,413 | $ | 1,884,209 |
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 | (259 | ) | 146 | (113 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (479 | ) | (8 | ) | (487 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Shares of Beneficial Interest | 679,285 | 7 | 8,265 | 8,272 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Issuance Costs | (308 | ) | (30 | ) | (338 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of LP Units to Common Shares | 92,992 | 1 | 1,098 | (1,099 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Bonus Share Issuance | (463 | ) | 463 | 12 | 6 | (6 | ) | (6 | ) | 6 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of Restricted Shares | 85,248 | (116,216 | ) | 9,043 | 1 | (1,818 | ) | 3,062 | (1,597 | ) | (352 | ) | |||||||||||||||||||||||||||||||||||||||||||
Restricted Share Amortization | 2,228 | 2,228 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Performance Units Amortization | 1,229 | 1,229 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Share Options | 120,179 | 1 | 658 | 659 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share Option Amortization | 1,105 | 1,105 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Outperformance Plan Amortization | 128 | 128 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/to Deferred Compensation Plan | (845 | ) | (8,141 | ) | (16 | ) | (149 | ) | 149 | (16 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Share Choice Plan Issuance | (1,684 | ) | (55 | ) | (55 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Trustees Fees Paid in Shares | 2,672 | 32 | 32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to Non-controlling Interest | 3,037 | (3,037 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (5,994 | ) | (5,994 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.45 per share) | (61,294 | ) | (1,890 | ) | (63,184 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, September 30, 2011 | 4,300,000 | $ | 43 | 135,579,643 | — | 292,646 | $ | 1,353 | $ | 2,686,800 | $ | — | $ | 5,631 | $ | (5,631 | ) | $ | 481,577 | $ | (2,424 | ) | $ | (1,368,809 | ) | $ | 122,354 | $ | 1,920,894 |
Nine-month periods ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 33,227 | $ | (113 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation and amortization | 150,362 | 164,014 | |||||
Amortization of deferred financing costs | 3,790 | 3,844 | |||||
Amortization of debt discount/(premium), net | 1,095 | 1,028 | |||||
Amortization of stock compensation costs | 3,740 | 4,201 | |||||
Shares used for employee taxes upon vesting of share awards | (2,232 | ) | (1,012 | ) | |||
Straight-line rent income | (17,792 | ) | (14,925 | ) | |||
Amortization of acquired above (below) market leases to rental revenue, net | (4,468 | ) | (4,011 | ) | |||
Straight-line ground rent expense | 1,423 | 1,450 | |||||
Provision for doubtful accounts | 1,363 | 1,190 | |||||
Real estate venture income in excess of distributions | (1,024 | ) | (1,020 | ) | |||
Net gain on sale of interests in real estate | (34,773 | ) | (6,627 | ) | |||
Loss on real estate formation | 950 | — | |||||
Loss on early extinguishment of debt | 1,549 | 580 | |||||
Historic tax credit transaction income | (11,840 | ) | (12,026 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | 1,580 | 2,130 | |||||
Other assets | (7,200 | ) | (5,000 | ) | |||
Accounts payable and accrued expenses | 9,565 | 21,382 | |||||
Deferred income, gains and rent | (4,681 | ) | (4,376 | ) | |||
Deferred financing obligation | (1,314 | ) | — | ||||
Other liabilities | (1,175 | ) | 5,284 | ||||
Net cash from operating activities | 122,145 | 155,993 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (9,226 | ) | (40,674 | ) | |||
Investments in available-for-sale securities | (98,250 | ) | — | ||||
Proceeds from the sale of available-for-sale securities | 98,250 | — | |||||
Sales of properties, net | 170,918 | 5,639 | |||||
Proceeds from repayment of mortgage notes receivable | 23,930 | — | |||||
Capital expenditures | (73,649 | ) | (97,557 | ) | |||
Advances for purchase of tenant assets, net of repayments | (13 | ) | (1,552 | ) | |||
Loan provided to an unconsolidated Real Estate Venture partner | — | (1,045 | ) | ||||
Investment in unconsolidated Real Estate Ventures | (49,763 | ) | (2,259 | ) | |||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 2,779 | 3,432 | |||||
Leasing costs | (22,111 | ) | (28,460 | ) | |||
Net cash from (used in) investing activities | 42,865 | (162,476 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from New Unsecured Term Loans | 600,000 | — | |||||
Proceeds from Credit Facility | 21,500 | 407,502 | |||||
Repayments of Credit Facility borrowings | (297,000 | ) | (424,502 | ) | |||
Repayments of mortgage notes payable | (9,209 | ) | (218,959 | ) | |||
Proceeds from unsecured notes | — | 321,498 | |||||
Deferred financing obligation non-cash interest expense | 701 | — | |||||
Net proceeds from issuance of common shares | — | 7,966 | |||||
Net proceeds from issuance of preferred shares | 96,240 | — | |||||
Redemption of preferred shares | (50,188 | ) | — | ||||
Repayments of unsecured notes | (167,841 | ) | (25,366 | ) | |||
Repayments of unsecured term loan | (37,500 | ) | — | ||||
Net settlement of hedge transactions | (74 | ) | (613 | ) | |||
Debt financing costs | (8,462 | ) | (4,199 | ) | |||
Exercise of stock options | 748 | 659 | |||||
Distributions paid to shareholders | (71,523 | ) | (67,119 | ) | |||
Distributions to noncontrolling interest | (1,196 | ) | (1,243 | ) | |||
Net cash from (used in) financing activities | 76,196 | (4,376 | ) | ||||
Increase (decrease) in cash and cash equivalents | 241,206 | (10,859 | ) | ||||
Cash and cash equivalents at beginning of period | 410 | 16,565 | |||||
Cash and cash equivalents at end of period | $ | 241,616 | $ | 5,706 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2012 and 2011 of $1,978 and $1,450, respectively | $ | 83,618 | $ | 78,091 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in capital expenditures financed through accounts payable at period end | (1,270 | ) | (2,114 | ) | |||
Change in capital expenditures financed through retention payable at period end | 284 | (5,863 | ) | ||||
Change in unfunded tenant allowance | (1,411 | ) | (442 | ) | |||
Distributions payable | 24,820 | 23,505 |
September 30, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,660,289 | $ | 4,793,080 | |||
Accumulated depreciation | (925,342 | ) | (865,710 | ) | |||
Operating real estate investments, net | 3,734,947 | 3,927,370 | |||||
Construction-in-progress | 43,449 | 25,083 | |||||
Land inventory | 95,500 | 109,008 | |||||
Total real estate investments, net | 3,873,896 | 4,061,461 | |||||
Cash and cash equivalents | 241,616 | 410 | |||||
Accounts receivable, net | 13,394 | 14,718 | |||||
Accrued rent receivable, net | 117,306 | 108,101 | |||||
Investment in real estate ventures, at equity | 179,037 | 115,807 | |||||
Deferred costs, net | 119,182 | 115,362 | |||||
Intangible assets, net | 52,575 | 70,515 | |||||
Notes receivable | 7,226 | 18,186 | |||||
Other assets | 62,494 | 53,158 | |||||
Total assets | $ | 4,666,726 | $ | 4,557,718 | |||
LIABILITIES AND EQUITY | |||||||
Mortgage notes payable | $ | 502,123 | $ | 511,061 | |||
Unsecured credit facility | — | 275,500 | |||||
Unsecured term loans | 600,000 | 37,500 | |||||
Unsecured senior notes, net of discounts | 1,404,466 | 1,569,934 | |||||
Accounts payable and accrued expenses | 80,554 | 69,929 | |||||
Distributions payable | 24,820 | 23,895 | |||||
Deferred income, gains and rent | 80,748 | 99,569 | |||||
Acquired lease intangibles, net | 29,824 | 35,106 | |||||
Other liabilities | 59,982 | 45,528 | |||||
Total liabilities | 2,782,517 | 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 | 40,509 | 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, 143,438,501 and 142,690,755 units issued and outstanding in 2012 and 2011, respectively | 1,711,926 | 1,754,302 | |||||
Accumulated other comprehensive loss | (20,614 | ) | (6,426 | ) | |||
Total Brandywine Operating Partnership, L.P.’s equity | 1,843,700 | 1,851,326 | |||||
Total liabilities and partners’ equity | $ | 4,666,726 | $ | 4,557,718 |
For the three-month periods ended | For the nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 113,989 | $ | 116,251 | $ | 343,260 | $ | 346,579 | |||||||
Tenant reimbursements | 20,695 | 19,010 | 58,308 | 59,187 | |||||||||||
Termination fees | 931 | 157 | 2,522 | 2,673 | |||||||||||
Third party management fees, labor reimbursement and leasing | 3,007 | 3,028 | 9,021 | 8,514 | |||||||||||
Other | 1,761 | 955 | 4,259 | 3,314 | |||||||||||
Total revenue | 140,383 | 139,401 | 417,370 | 420,267 | |||||||||||
Operating Expenses: | |||||||||||||||
Property operating expenses | 40,705 | 40,788 | 118,068 | 124,023 | |||||||||||
Real estate taxes | 14,064 | 13,204 | 42,292 | 40,699 | |||||||||||
Third party management expenses | 1,298 | 1,379 | 3,812 | 4,395 | |||||||||||
Depreciation and amortization | 48,738 | 51,943 | 147,618 | 157,157 | |||||||||||
General & administrative expenses | 6,080 | 6,177 | 18,209 | 18,311 | |||||||||||
Total operating expenses | 110,885 | 113,491 | 329,999 | 344,585 | |||||||||||
Operating income | 29,498 | 25,910 | 87,371 | 75,682 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest income | 311 | 523 | 2,635 | 1,385 | |||||||||||
Historic tax credit transaction income | 11,840 | 12,026 | 11,840 | 12,026 | |||||||||||
Interest expense | (32,620 | ) | (32,346 | ) | (99,745 | ) | (99,477 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,218 | ) | (1,846 | ) | (3,790 | ) | (3,844 | ) | |||||||
Interest expense — financing obligation | (230 | ) | — | (608 | ) | — | |||||||||
Equity in income of real estate ventures | 500 | 418 | 1,382 | 2,739 | |||||||||||
Net gain on sale of interests in real estate | — | — | — | 2,791 | |||||||||||
Loss on real estate venture formation | (950 | ) | — | (950 | ) | — | |||||||||
Gain (loss) on early extinguishment of debt | (51 | ) | 176 | (1,549 | ) | (580 | ) | ||||||||
Income (loss) from continuing operations | 7,080 | 4,861 | (3,414 | ) | (9,278 | ) | |||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 69 | 1,750 | 1,867 | 5,329 | |||||||||||
Net gain on disposition of discontinued operations | 9,940 | — | 34,774 | 3,836 | |||||||||||
Total discontinued operations | 10,009 | 1,750 | 36,641 | 9,165 | |||||||||||
Net income (loss) | 17,089 | 6,611 | 33,227 | (113 | ) | ||||||||||
Distribution to Preferred Units | (2,785 | ) | (1,998 | ) | (7,832 | ) | (5,994 | ) | |||||||
Preferred unit redemption charge | — | — | (2,090 | ) | — | ||||||||||
Amount allocated to unvested restricted unitholders | (95 | ) | (121 | ) | (286 | ) | (384 | ) | |||||||
Net income (loss) attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P. | $ | 14,209 | $ | 4,492 | $ | 23,019 | $ | (6,491 | ) | ||||||
Basic income (loss) per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.02 | $ | (0.09 | ) | $ | (0.11 | ) | |||||
Discontinued operations | 0.07 | 0.01 | 0.25 | 0.06 | |||||||||||
$ | 0.10 | $ | 0.03 | $ | 0.16 | $ | (0.05 | ) | |||||||
Diluted income (loss) per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.02 | $ | (0.09 | ) | $ | (0.11 | ) | |||||
Discontinued operations | 0.07 | 0.01 | 0.25 | 0.06 | |||||||||||
$ | 0.10 | $ | 0.03 | $ | 0.16 | $ | (0.05 | ) | |||||||
Basic weighted average common partnership units outstanding | 146,082,206 | 145,372,247 | 145,842,872 | 145,027,663 | |||||||||||
Diluted weighted average common partnership units outstanding | 146,785,731 | 146,651,211 | 145,842,872 | 145,027,663 | |||||||||||
Net income (loss) attributable to Brandywine Operating Partnership, L.P. | |||||||||||||||
Income (loss) from continuing operations | $ | 7,080 | $ | 4,861 | $ | (3,414 | ) | $ | (9,278 | ) | |||||
Income from discontinued operations | 10,009 | 1,750 | 36,641 | 9,165 | |||||||||||
Net income (loss) | $ | 17,089 | $ | 6,611 | $ | 33,227 | $ | (113 | ) |
For the three-month periods ended | For the nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income (loss) | $ | 17,089 | $ | 6,611 | $ | 33,227 | $ | (113 | ) | ||||||
Comprehensive income (loss): | |||||||||||||||
Unrealized loss on derivative financial instruments | (4,222 | ) | — | (14,780 | ) | (613 | ) | ||||||||
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net | 76 | 53 | 200 | 126 | |||||||||||
Unrealized gain on available-for-sale securities | 65 | — | — | — | |||||||||||
Total comprehensive income (loss) | (4,081 | ) | 53 | (14,580 | ) | (487 | ) | ||||||||
Comprehensive income (loss) attributable to Brandywine Operating Partnership, L.P. | $ | 13,008 | $ | 6,664 | $ | 18,647 | $ | (600 | ) |
Nine-month periods ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 33,227 | $ | (113 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | |||||||
Depreciation and amortization | 150,362 | 164,014 | |||||
Amortization of deferred financing costs | 3,790 | 3,844 | |||||
Amortization of debt discount/(premium), net | 1,095 | 1,028 | |||||
Amortization of stock compensation costs | 3,740 | 4,201 | |||||
Shares used for employee taxes upon vesting of share awards | (2,232 | ) | (1,012 | ) | |||
Straight-line rent income | (17,792 | ) | (14,925 | ) | |||
Amortization of acquired above (below) market leases, net | (4,468 | ) | (4,011 | ) | |||
Straight-line ground rent expense | 1,423 | 1,450 | |||||
Provision for doubtful accounts | 1,363 | 1,190 | |||||
Real estate venture income in excess of distributions | (1,024 | ) | (1,020 | ) | |||