þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2014 |
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; and |
• | Parent Company’s and Operating Partnership’s Equity. |
Page | |
Brandywine Realty Trust | |
Brandywine Operating Partnership, L.P. | |
Item 1. | — Financial Statements |
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,608,895 | $ | 4,669,289 | |||
Accumulated depreciation | (1,053,571 | ) | (983,808 | ) | |||
Operating real estate investments, net | 3,555,324 | 3,685,481 | |||||
Construction-in-progress | 140,456 | 74,174 | |||||
Land inventory | 90,842 | 93,351 | |||||
Total real estate investments, net | 3,786,622 | 3,853,006 | |||||
Cash and cash equivalents | 671,943 | 263,207 | |||||
Accounts receivable, net | 19,825 | 17,389 | |||||
Accrued rent receivable, net | 131,211 | 126,295 | |||||
Assets held for sale | 37,647 | — | |||||
Investment in real estate ventures, at equity | 197,539 | 180,512 | |||||
Deferred costs, net | 122,881 | 122,954 | |||||
Intangible assets, net | 105,300 | 132,329 | |||||
Other assets | 75,383 | 69,403 | |||||
Total assets | $ | 5,148,351 | $ | 4,765,095 | |||
LIABILITIES AND BENEFICIARIES’ EQUITY | |||||||
Mortgage notes payable | $ | 658,601 | $ | 670,151 | |||
Unsecured term loans | 200,000 | 450,000 | |||||
Unsecured senior notes, net of discounts | 1,854,779 | 1,475,230 | |||||
Accounts payable and accrued expenses | 97,022 | 83,693 | |||||
Distributions payable | 28,857 | 25,584 | |||||
Deferred income, gains and rent | 53,219 | 71,635 | |||||
Acquired lease intangibles, net | 27,388 | 34,444 | |||||
Other liabilities | 36,824 | 32,923 | |||||
Liabilities related to assets held for sale | 1,771 | — | |||||
Total liabilities | 2,958,461 | 2,843,660 | |||||
Commitments and contingencies (Note 16) | |||||||
Brandywine Realty Trust’s equity: | |||||||
Preferred Shares (shares authorized-20,000,000): | |||||||
6.90% Series E Preferred Shares, $0.01 par value; issued and outstanding- 4,000,000 in 2014 and 2013 | 40 | 40 | |||||
Common Shares of Brandywine Realty Trust’s beneficial interest, $0.01 par value; shares authorized 400,000,000; 178,982,369 and 156,731,993 issued and outstanding in 2014 and 2013, respectively | 1,790 | 1,566 | |||||
Additional paid-in capital | 3,310,313 | 2,971,596 | |||||
Deferred compensation payable in common shares | 6,219 | 5,407 | |||||
Common shares in grantor trust, 384,536 in 2014 and 312,280 in 2013 | (6,219 | ) | (5,407 | ) | |||
Cumulative earnings | 531,294 | 522,528 | |||||
Accumulated other comprehensive loss | (2,658 | ) | (2,995 | ) | |||
Cumulative distributions | (1,671,888 | ) | (1,592,515 | ) | |||
Total Brandywine Realty Trust’s equity | 2,168,891 | 1,900,220 | |||||
Non-controlling interests | 20,999 | 21,215 | |||||
Total beneficiaries' equity | 2,189,890 | 1,921,435 | |||||
Total liabilities and beneficiaries' equity | $ | 5,148,351 | $ | 4,765,095 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 120,288 | $ | 116,382 | $ | 363,581 | $ | 347,054 | |||||||
Tenant reimbursements | 20,095 | 20,694 | 64,057 | 60,595 | |||||||||||
Termination fees | 1,418 | 2,040 | 6,970 | 2,946 | |||||||||||
Third party management fees, labor reimbursement and leasing | 3,932 | 3,263 | 12,269 | 9,652 | |||||||||||
Other | 825 | 975 | 2,295 | 3,305 | |||||||||||
Total revenue | 146,558 | 143,354 | 449,172 | 423,552 | |||||||||||
Operating expenses: | |||||||||||||||
Property operating expenses | 42,675 | 40,639 | 132,612 | 119,421 | |||||||||||
Real estate taxes | 12,869 | 14,167 | 39,167 | 42,639 | |||||||||||
Third party management expenses | 1,687 | 1,317 | 5,133 | 4,105 | |||||||||||
Depreciation and amortization | 52,616 | 50,583 | 157,773 | 149,300 | |||||||||||
General and administrative expenses | 5,900 | 6,436 | 20,086 | 20,323 | |||||||||||
Total operating expenses | 115,747 | 113,142 | 354,771 | 335,788 | |||||||||||
Operating income | 30,811 | 30,212 | 94,401 | 87,764 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 528 | 268 | 1,298 | 448 | |||||||||||
Historic tax credit transaction income | 11,853 | 11,853 | 11,853 | 11,853 | |||||||||||
Interest expense | (31,481 | ) | (30,338 | ) | (94,837 | ) | (91,689 | ) | |||||||
Amortization of deferred financing costs | (1,566 | ) | (1,158 | ) | (3,952 | ) | (3,502 | ) | |||||||
Interest expense — financing obligation | (273 | ) | (264 | ) | (861 | ) | (693 | ) | |||||||
Recognized hedge activity | (828 | ) | — | (828 | ) | — | |||||||||
Equity in income (loss) of real estate ventures | (486 | ) | 714 | (733 | ) | 3,757 | |||||||||
Net gain on disposition of real estate | 4,698 | — | 4,698 | — | |||||||||||
Net gain (loss) on sale of undepreciated real estate | — | (129 | ) | 1,184 | (129 | ) | |||||||||
Net gain from remeasurement of investment in RE ventures | — | — | 458 | 7,847 | |||||||||||
Net gain (loss) on real estate venture transactions | — | — | (417 | ) | 3,683 | ||||||||||
Loss on early extinguishment of debt | (2,606 | ) | (11 | ) | (2,606 | ) | (1,127 | ) | |||||||
Provision for impairment on assets held for sale | (1,765 | ) | — | (1,765 | ) | — | |||||||||
Income from continuing operations | 8,885 | 11,147 | 7,893 | 18,212 | |||||||||||
Discontinued operations: | |||||||||||||||
Income (loss) from discontinued operations | — | (43 | ) | 18 | 946 | ||||||||||
Net gain (loss) on disposition of discontinued operations | (3 | ) | (16 | ) | 900 | 3,029 | |||||||||
Total discontinued operations | (3 | ) | (59 | ) | 918 | 3,975 | |||||||||
Net income | 8,882 | 11,088 | 8,811 | 22,187 | |||||||||||
Net (income) loss from discontinued operations attributable to non-controlling interests — LP units | — | 1 | (10 | ) | (52 | ) | |||||||||
Net income attributable to non-controlling interest — partners' share of consolidated real estate ventures | (24 | ) | — | (12 | ) | — | |||||||||
Net income attributable to non-controlling interests — LP units | (84 | ) | (106 | ) | (35 | ) | (143 | ) | |||||||
Net income attributable to non-controlling interests | (108 | ) | (105 | ) | (57 | ) | (195 | ) | |||||||
Net income attributable to Brandywine Realty Trust | 8,774 | 10,983 | 8,754 | 21,992 | |||||||||||
Distribution to Preferred Shares | (1,725 | ) | (1,725 | ) | (5,175 | ) | (5,175 | ) | |||||||
Nonforfeitable dividends allocated to unvested restricted shareholders | (82 | ) | (85 | ) | (268 | ) | (278 | ) | |||||||
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ | 6,967 | $ | 9,173 | $ | 3,311 | $ | 16,539 | |||||||
Basic income per Common Share: | |||||||||||||||
Continuing operations | $ | 0.04 | $ | 0.06 | $ | 0.01 | $ | 0.08 | |||||||
Discontinued operations | — | — | 0.01 | 0.03 | |||||||||||
$ | 0.04 | $ | 0.06 | $ | 0.02 | $ | 0.11 | ||||||||
Diluted income per Common Share: | |||||||||||||||
Continuing operations | $ | 0.04 | $ | 0.06 | $ | 0.01 | $ | 0.08 | |||||||
Discontinued operations | — | — | 0.01 | 0.03 | |||||||||||
$ | 0.04 | $ | 0.06 | $ | 0.02 | $ | 0.11 | ||||||||
Basic weighted average shares outstanding | 171,606,722 | 156,703,348 | 161,866,955 | 151,933,441 | |||||||||||
Diluted weighted average shares outstanding | 173,193,870 | 157,992,082 | 163,353,970 | 153,142,825 | |||||||||||
Net income attributable to Brandywine Realty Trust | |||||||||||||||
Total continuing operations | $ | 8,777 | $ | 11,041 | $ | 7,846 | $ | 18,069 | |||||||
Total discontinued operations | (3 | ) | (58 | ) | 908 | 3,923 | |||||||||
Net income | $ | 8,774 | $ | 10,983 | $ | 8,754 | $ | 21,992 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income | $ | 8,882 | $ | 11,088 | $ | 8,811 | $ | 22,187 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized gain (loss) on derivative financial instruments | 4,232 | (1,302 | ) | 967 | 9,978 | ||||||||||
Recognized hedge activity | (828 | ) | — | (828 | ) | — | |||||||||
Reclassification of realized losses on derivative financial instruments to operations, net (1) | 76 | 64 | 196 | 232 | |||||||||||
Comprehensive income | 12,362 | 9,850 | 9,146 | 32,397 | |||||||||||
Comprehensive income attributable to non-controlling interest | (141 | ) | (91 | ) | (55 | ) | (312 | ) | |||||||
Comprehensive income attributable to Brandywine Realty Trust | $ | 12,221 | $ | 9,759 | $ | 9,091 | $ | 32,085 |
Number of Preferred Shares | Par Value of Preferred Shares | Number of Common Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust’s beneficial interest | Additional Paid-in Capital | 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, 2013 | 4,000,000 | $ | 40 | 156,731,993 | 312,280 | $ | 1,566 | $ | 2,971,596 | $ | 5,407 | $ | (5,407 | ) | $ | 522,528 | $ | (2,995 | ) | $ | (1,592,515 | ) | $ | 21,215 | $ | 1,921,435 | ||||||||||||||||||||||
Net loss | 8,754 | 57 | 8,811 | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | 337 | (2 | ) | 335 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Shares of Beneficial Interest | 21,850,000 | 219 | 335,179 | 335,398 | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of LP Units to Common Shares | 41,734 | 655 | (655 | ) | — | |||||||||||||||||||||||||||||||||||||||||||
Equity issuance costs | (452 | ) | (452 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | 279,913 | 5 | 4,597 | 12 | 4,614 | |||||||||||||||||||||||||||||||||||||||||||
Share issuance from/to Deferred Compensation Plan | 78,729 | 72,256 | (90 | ) | 812 | (812 | ) | (90 | ) | |||||||||||||||||||||||||||||||||||||||
Adjustment to non-controlling interest | (1,172 | ) | 1,172 | — | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (5,175 | ) | (5,175 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.45 per share) | (74,198 | ) | (788 | ) | (74,986 | ) | ||||||||||||||||||||||||||||||||||||||||||
BALANCE, September 30, 2014 | 4,000,000 | $ | 40 | 178,982,369 | 384,536 | $ | 1,790 | $ | 3,310,313 | $ | 6,219 | $ | (6,219 | ) | $ | 531,294 | $ | (2,658 | ) | $ | (1,671,888 | ) | $ | 20,999 | $ | 2,189,890 |
Number of Preferred Shares | Par Value of Preferred Shares | Number of Common Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust’s beneficial interest | Additional Paid-in Capital | 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, 2012 | 4,000,000 | $ | 40 | 143,538,733 | 290,745 | $ | 1,434 | $ | 2,780,194 | $ | 5,352 | $ | (5,352 | ) | $ | 479,734 | $ | (15,918 | ) | $ | (1,493,206 | ) | $ | 21,238 | $ | 1,773,516 | ||||||||||||||||||||||
Net income | 21,992 | 195 | 22,187 | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | 10,093 | 117 | 10,210 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Shares of Beneficial Interest | 12,650,000 | 127 | 181,907 | 182,034 | ||||||||||||||||||||||||||||||||||||||||||||
Equity issuance costs | (382 | ) | (382 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of LP Units to Common Shares | 81,998 | 1 | 1,240 | (1,241 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Bonus share issuance | 27,918 | 361 | 361 | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | 409,979 | 34,117 | 3 | 8,022 | 9 | 8,034 | ||||||||||||||||||||||||||||||||||||||||||
Share issuance from/to Deferred Compensation Plan | (4,838 | ) | (11,839 | ) | 79 | (79 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Adjustment to non-controlling interest | (766 | ) | 766 | — | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (5,175 | ) | (5,175 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.45 per share) | (68,821 | ) | (806 | ) | (69,627 | ) | ||||||||||||||||||||||||||||||||||||||||||
BALANCE, September 30, 2013 | 4,000,000 | $ | 40 | 156,703,790 | 313,023 | $ | 1,565 | $ | 2,970,576 | $ | 5,431 | $ | (5,431 | ) | $ | 501,735 | $ | (5,825 | ) | $ | (1,567,202 | ) | $ | 20,269 | $ | 1,921,158 |
Nine-month periods ended | |||||||
September 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 8,811 | $ | 22,187 | |||
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||
Depreciation and amortization | 157,773 | 151,066 | |||||
Amortization of deferred financing costs | 3,952 | 3,502 | |||||
Amortization of debt discount/(premium), net | (455 | ) | 1,112 | ||||
Amortization of stock compensation costs | 3,622 | 5,510 | |||||
Shares used for employee taxes upon vesting of share awards | (1,263 | ) | (1,062 | ) | |||
Recognized hedge activity | 828 | — | |||||
Straight-line rent income | (11,416 | ) | (16,337 | ) | |||
Amortization of acquired above (below) market leases, net | (5,206 | ) | (5,372 | ) | |||
Straight-line ground rent expense | 66 | 1,286 | |||||
Provision for doubtful accounts | 1,687 | 1,777 | |||||
Net (gain) loss on real estate venture transactions | 417 | (3,683 | ) | ||||
Net gain on sale of interests in real estate | (5,882 | ) | (3,044 | ) | |||
Net gain from remeasurement of investment in a real estate venture | (458 | ) | (7,847 | ) | |||
Loss on early extinguishment of debt | 2,606 | 1,127 | |||||
Provision for impairment on assets held for sale | 1,765 | — | |||||
Historic tax credit transaction income | (11,853 | ) | (11,853 | ) | |||
Real estate venture income in excess of distributions | 659 | (2,371 | ) | ||||
Deferred financing obligation | (864 | ) | (1,392 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (4,586 | ) | (287 | ) | |||
Other assets | (10,317 | ) | (6,660 | ) | |||
Accounts payable and accrued expenses | 9,304 | 14,684 | |||||
Deferred income, gains and rent | (4,430 | ) | 1,265 | ||||
Other liabilities | (1,760 | ) | 1,718 | ||||
Net cash from operating activities | 133,000 | 145,326 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (12,405 | ) | (20,758 | ) | |||
Sales of properties, net | 81,625 | 145,931 | |||||
Distribution of sales proceeds from real estate ventures | — | 16,963 | |||||
Proceeds from repayment of mortgage notes receivable | 5,125 | 200 | |||||
Capital expenditures for tenant improvements | (85,698 | ) | (64,481 | ) | |||
Capital expenditures for redevelopments | (10,195 | ) | (5,288 | ) | |||
Capital expenditures for developments | (48,057 | ) | (5,399 | ) | |||
Reimbursement from real estate venture for pre-formation development costs | — | 1,976 | |||||
Advances for purchase of tenant assets, net of repayments | (212 | ) | (420 | ) | |||
Investment in unconsolidated Real Estate Ventures | (16,330 | ) | (30,142 | ) | |||
Escrowed cash | 1,076 | 902 | |||||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 7,341 | 3,661 | |||||
Leasing costs | (17,018 | ) | (25,704 | ) | |||
Net cash from (used in) investing activities | (94,748 | ) | 17,441 | ||||
Cash flows from financing activities: | |||||||
Proceeds from Credit Facility borrowings | — | 186,000 | |||||
Repayments of Credit Facility borrowings | — | (255,000 | ) | ||||
Repayments of mortgage notes payable | (9,994 | ) | (8,351 | ) | |||
Repayments of unsecured term loans | (250,828 | ) | — | ||||
Proceeds from unsecured notes | 496,459 | — | |||||
Deferred financing obligation interest expense | — | 697 | |||||
Net proceeds from issuance of common shares | 335,016 | 181,527 | |||||
Repayments of unsecured notes | (120,361 | ) | (13,027 | ) | |||
Debt financing costs | (3,630 | ) | (6 | ) |
Exercise of stock options | 709 | 2,240 | |||||
Distributions paid to shareholders | (76,081 | ) | (72,061 | ) | |||
Distributions to noncontrolling interest | (806 | ) | (818 | ) | |||
Net cash from financing activities | 370,484 | 21,201 | |||||
Increase in cash and cash equivalents | 408,736 | 183,968 | |||||
Cash and cash equivalents at beginning of period | 263,207 | 1,549 | |||||
Cash and cash equivalents at end of period | $ | 671,943 | $ | 185,517 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2014 and 2013 of $4,466 and $2,012, respectively | $ | 92,196 | $ | 76,528 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in operating real estate related to a non-cash acquisition of an operating property | — | (21,649 | ) | ||||
Change in intangible assets, net related to non-cash acquisition of an operating property | — | (3,517 | ) | ||||
Change in acquired lease intangibles, net related to non-cash acquisition of an operating property | — | 462 | |||||
Change in investments in joint venture related to non-cash disposition of property | (5,897 | ) | — | ||||
Change in investments in joint venture related to non-cash acquisition of property | — | 13,040 | |||||
Change in operating real estate related to non-cash adjustment to land | — | (4,386 | ) | ||||
Change in receivable from settlement of acquisitions | 619 | — | |||||
Change in investments in real estate ventures related to a contribution of land | — | (6,058 | ) | ||||
Change in capital expenditures financed through accounts payable at period end | 4,415 | 1,210 | |||||
Change in capital expenditures financed through retention payable at period end | 3,479 | (736 | ) | ||||
Change in unfunded tenant allowance | (327 | ) | (811 | ) | |||
Conversion of LP Units to Common Shares | 655 | 1,241 |
September 30, 2014 | December 31, 2013 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,608,895 | $ | 4,669,289 | |||
Accumulated depreciation | (1,053,571 | ) | (983,808 | ) | |||
Operating real estate investments, net | 3,555,324 | 3,685,481 | |||||
Construction-in-progress | 140,456 | 74,174 | |||||
Land inventory | 90,842 | 93,351 | |||||
Total real estate investments, net | 3,786,622 | 3,853,006 | |||||
Cash and cash equivalents | 671,943 | 263,207 | |||||
Accounts receivable, net | 19,825 | 17,389 | |||||
Accrued rent receivable, net | 131,211 | 126,295 | |||||
Assets held for sale | 37,647 | — | |||||
Investment in real estate ventures, at equity | 197,539 | 180,512 | |||||
Deferred costs, net | 122,881 | 122,954 | |||||
Intangible assets, net | 105,300 | 132,329 | |||||
Other assets | 75,383 | 69,403 | |||||
Total assets | $ | 5,148,351 | $ | 4,765,095 | |||
LIABILITIES AND PARTNERS' EQUITY | |||||||
Mortgage notes payable | $ | 658,601 | $ | 670,151 | |||
Unsecured term loans | 200,000 | 450,000 | |||||
Unsecured senior notes, net of discounts | 1,854,779 | 1,475,230 | |||||
Accounts payable and accrued expenses | 97,022 | 83,693 | |||||
Distributions payable | 28,857 | 25,584 | |||||
Deferred income, gains and rent | 53,219 | 71,635 | |||||
Acquired lease intangibles, net | 27,388 | 34,444 | |||||
Other liabilities | 36,824 | 32,923 | |||||
Liabilities related to assets held for sale | 1,771 | — | |||||
Total liabilities | 2,958,461 | 2,843,660 | |||||
Commitments and contingencies (Note 16) | |||||||
Redeemable limited partnership units at redemption value; 1,721,905 and 1,763,739 issued and outstanding in 2014 and 2013, respectively | 25,985 | 26,486 | |||||
Brandywine Operating Partnership, L.P.’s equity: | |||||||
6.90% Series E-Linked Preferred Mirror Units; issued and outstanding- 4,000,000 in 2014 and 2013 | 96,850 | 96,850 | |||||
General Partnership Capital, 178,982,369 and 156,731,993 units issued and outstanding in 2014 and 2013, respectively | 2,069,031 | 1,800,530 | |||||
Accumulated other comprehensive loss | (3,042 | ) | (3,377 | ) | |||
Total Brandywine Operating Partnership, L.P.’s equity | 2,162,839 | 1,894,003 | |||||
Non-controlling interest - consolidated real estate ventures | 1,066 | 946 | |||||
Total partners’ equity | 2,163,905 | 1,894,949 | |||||
Total liabilities and partners’ equity | $ | 5,148,351 | $ | 4,765,095 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 120,288 | $ | 116,382 | $ | 363,581 | $ | 347,054 | |||||||
Tenant reimbursements | 20,095 | 20,694 | 64,057 | 60,595 | |||||||||||
Termination fees | 1,418 | 2,040 | 6,970 | 2,946 | |||||||||||
Third party management fees, labor reimbursement and leasing | 3,932 | 3,263 | 12,269 | 9,652 | |||||||||||
Other | 825 | 975 | 2,295 | 3,305 | |||||||||||
Total revenue | 146,558 | 143,354 | 449,172 | 423,552 | |||||||||||
Operating expenses: | |||||||||||||||
Property operating expenses | 42,675 | 40,639 | 132,612 | 119,421 | |||||||||||
Real estate taxes | 12,869 | 14,167 | 39,167 | 42,639 | |||||||||||
Third party management expenses | 1,687 | 1,317 | 5,133 | 4,105 | |||||||||||
Depreciation and amortization | 52,616 | 50,583 | 157,773 | 149,300 | |||||||||||
General & administrative expenses | 5,900 | 6,436 | 20,086 | 20,323 | |||||||||||
Total operating expenses | 115,747 | 113,142 | 354,771 | 335,788 | |||||||||||
Operating income | 30,811 | 30,212 | 94,401 | 87,764 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 528 | 268 | 1,298 | 448 | |||||||||||
Historic tax credit transaction income | 11,853 | 11,853 | 11,853 | 11,853 | |||||||||||
Interest expense | (31,481 | ) | (30,338 | ) | (94,837 | ) | (91,689 | ) | |||||||
Amortization of deferred financing costs | (1,566 | ) | (1,158 | ) | (3,952 | ) | (3,502 | ) | |||||||
Interest expense — financing obligation | (273 | ) | (264 | ) | (861 | ) | (693 | ) | |||||||
Recognized hedge activity | (828 | ) | — | (828 | ) | — | |||||||||
Equity in income (loss) of real estate ventures | (486 | ) | 714 | (733 | ) | 3,757 | |||||||||
Net gain on disposition of real estate | 4,698 | — | 4,698 | — | |||||||||||
Net gain (loss) on sale of undepreciated real estate | — | (129 | ) | 1,184 | (129 | ) | |||||||||
Net gain from remeasurement of investment in RE ventures | — | — | 458 | 7,847 | |||||||||||
Net gain (loss) on real estate venture transactions | — | — | (417 | ) | 3,683 | ||||||||||
Loss on early extinguishment of debt | (2,606 | ) | (11 | ) | (2,606 | ) | (1,127 | ) | |||||||
Provision for impairment on assets held for sale | (1,765 | ) | — | (1,765 | ) | — | |||||||||
Income from continuing operations | 8,885 | 11,147 | 7,893 | 18,212 | |||||||||||
Discontinued operations: | |||||||||||||||
Income (loss) from discontinued operations | — | (43 | ) | 18 | 946 | ||||||||||
Net gain (loss) on disposition of discontinued operations | (3 | ) | (16 | ) | 900 | 3,029 | |||||||||
Total discontinued operations | (3 | ) | (59 | ) | 918 | 3,975 | |||||||||
Net income | 8,882 | 11,088 | 8,811 | 22,187 | |||||||||||
Net income attributable to non-controlling interests | (24 | ) | — | (12 | ) | — | |||||||||
Net income attributable to Brandywine Operating Partnership | 8,858 | 11,088 | 8,799 | 22,187 | |||||||||||
Distribution to Preferred Units | (1,725 | ) | (1,725 | ) | (5,175 | ) | (5,175 | ) | |||||||
Amount allocated to unvested restricted unitholders | (82 | ) | (85 | ) | (268 | ) | (278 | ) | |||||||
Net income attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P. | $ | 7,051 | $ | 9,278 | $ | 3,356 | $ | 16,734 | |||||||
Basic income per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.04 | $ | 0.06 | $ | 0.01 | $ | 0.08 | |||||||
Discontinued operations | — | — | 0.01 | 0.03 | |||||||||||
$ | 0.04 | $ | 0.06 | $ | 0.02 | $ | 0.11 | ||||||||
Diluted income per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.04 | $ | 0.06 | $ | 0.01 | $ | 0.08 | |||||||
Discontinued operations | — | — | 0.01 | 0.03 | |||||||||||
$ | 0.04 | $ | 0.06 | $ | 0.02 | $ | 0.11 | ||||||||
Basic weighted average common partnership units outstanding | 173,341,782 | 158,467,087 | 163,620,963 | 153,731,070 | |||||||||||
Diluted weighted average common partnership units outstanding | 174,928,930 | 159,755,821 | 165,107,978 | 154,940,454 | |||||||||||
Net income (loss) attributable to Brandywine Operating Partnership, L.P. | |||||||||||||||
Total continuing operations | $ | 8,861 | $ | 11,147 | $ | 7,881 | $ | 18,212 | |||||||
Total discontinued operations | (3 | ) | (59 | ) | 918 | 3,975 | |||||||||
Net income | $ | 8,858 | $ | 11,088 | $ | 8,799 | $ | 22,187 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income | $ | 8,882 | $ | 11,088 | $ | 8,811 | $ | 22,187 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized gain (loss) on derivative financial instruments | 4,232 | (1,302 | ) | 967 | 9,978 | ||||||||||
Recognized hedge activity | (828 | ) | — | (828 | ) | — | |||||||||
Reclassification of realized losses on derivative financial instruments to operations, net (1) | 76 | 64 | 196 | 232 | |||||||||||
Other comprehensive income (loss) | 3,480 | (1,238 | ) | 335 | 10,210 | ||||||||||
Comprehensive income attributable to Brandywine Operating Partnership, L.P. | $ | 12,362 | $ | 9,850 | $ | 9,146 | $ | 32,397 |
Nine-month periods ended | |||||||
September 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 8,811 | $ | 22,187 | |||
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||
Depreciation and amortization | 157,773 | 151,066 | |||||
Amortization of deferred financing costs | 3,952 | 3,502 | |||||
Amortization of debt discount/(premium), net | (455 | ) | 1,112 | ||||
Amortization of stock compensation costs | 3,622 | 5,510 | |||||
Shares used for employee taxes upon vesting of share awards | (1,263 | ) | (1,062 | ) | |||
Recognized hedge activity | 828 | — | |||||
Straight-line rent income | (11,416 | ) | (16,337 | ) | |||
Amortization of acquired above (below) market leases, net | (5,206 | ) | (5,372 | ) | |||
Straight-line ground rent expense | 66 | 1,286 | |||||
Provision for doubtful accounts | 1,687 | 1,777 | |||||
Net (gain) loss on real estate venture transactions | 417 | (3,683 | ) | ||||
Net gain on sale of interests in real estate | (5,882 | ) | (3,044 | ) | |||
Net gain on remeasurement of investment in a real estate venture | (458 | ) | (7,847 | ) | |||
Historic tax credit transaction income | (11,853 | ) | (11,853 | ) | |||
Loss on early extinguishment of debt | 2,606 | 1,127 | |||||
Provision for impairment on assets held for sale | 1,765 | — | |||||
Real Estate venture income in excess of distributions | 659 | (2,371 | ) | ||||
Deferred financing obligation | (864 | ) | (1,392 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (4,586 | ) | (287 | ) | |||
Other assets | (10,317 | ) | (6,660 | ) | |||
Accounts payable and accrued expenses | 9,304 | 14,684 | |||||
Deferred income, gains and rent | (4,430 | ) | 1,265 | ||||
Other liabilities | (1,760 | ) | 1,718 | ||||
Net cash from operating activities | 133,000 | 145,326 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (12,405 | ) | (20,758 | ) | |||
Sales of properties, net | 81,625 | 145,931 | |||||
Distribution of sales proceeds from real estate venture | — | 16,963 | |||||
Proceeds from repayment of mortgage notes receivable | 5,125 | 200 | |||||
Capital expenditures for tenant improvements | (85,698 | ) | (64,481 | ) | |||
Capital expenditures for redevelopments | (10,195 | ) | (5,288 | ) | |||
Capital expenditures for developments | (48,057 | ) | (5,399 | ) | |||
Reimbursement from real estate venture for pre-formation development costs | — | 1,976 | |||||
Advances for purchase of tenant assets, net of repayments | (212 | ) | (420 | ) | |||
Investment in unconsolidated Real Estate Ventures | (16,330 | ) | (30,142 | ) | |||
Escrowed cash | 1,076 | 902 | |||||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 7,341 | 3,661 | |||||
Leasing costs | (17,018 | ) | (25,704 | ) | |||
Net cash from (used in) investing activities | (94,748 | ) | 17,441 | ||||
Cash flows from financing activities: | |||||||
Proceeds from Credit Facility borrowings | — | 186,000 | |||||
Repayments of Credit Facility borrowings | — | (255,000 | ) | ||||
Repayments of mortgage notes payable | (9,994 | ) | (8,351 | ) | |||
Repayments of unsecured term loans | (250,828 | ) | — | ||||
Proceeds from unsecured notes | 496,459 | — | |||||
Deferred financing obligation interest expense | — | 697 | |||||
Net proceeds from issuance of common units | 335,016 | 181,527 | |||||
Repayments of unsecured notes | (120,361 | ) | (13,027 | ) |
Debt financing costs | (3,630 | ) | (6 | ) | |||
Exercise of stock options | 709 | 2,240 | |||||
Distributions paid to preferred and common partnership unitholders | (76,887 | ) | (72,879 | ) | |||
Net cash from (used in) financing activities | 370,484 | 21,201 | |||||
Increase (Decrease) in cash and cash equivalents | 408,736 | 183,968 | |||||
Cash and cash equivalents at beginning of period | 263,207 | 1,549 | |||||
Cash and cash equivalents at end of period | $ | 671,943 | $ | 185,517 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2014 and 2013 of $4,466 and $2,012, respectively | $ | 92,196 | $ | 76,528 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in operating real estate related to a non-cash acquisition of an operating property | — | (21,649 | ) | ||||
Change in intangible assets, net related to a non-cash acquisition of an operating property | — | (3,517 | ) | ||||
Change in acquired lease intangibles, net related to a non-cash acquisition of an operating property | — | 462 | |||||
Change in investments in joint venture related non-cash disposition of property | (5,897 | ) | — | ||||
Change in investments in joint venture related to non-cash acquisition of property | — | 13,040 | |||||
Change in operating real estate related to non-cash adjustment to land | — | (4,386 | ) | ||||
Change in receivable from settlement of acquisitions | 619 | — | |||||
Change in investments in real estate ventures related to a contribution of land | — | (6,058 | ) | ||||
Change in capital expenditures financed through accounts payable at period end | 4,415 | 1,210 | |||||
Change in capital expenditures financed through retention payable at period end | 3,479 | (736 | ) | ||||
Change in unfunded tenant allowance | (327 | ) | (811 | ) | |||
Conversion of LP Units to Common Shares | 655 | 1,241 |
September 30, 2014 | December 31, 2013 | ||||||
Land | $ | 675,109 | $ | 680,513 | |||
Building and improvements | 3,419,903 | 3,504,060 | |||||
Tenant improvements | 513,883 | 484,716 | |||||
$ | 4,608,895 | $ | 4,669,289 |