þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2015 |
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, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,629,223 | $ | 4,603,692 | |||
Accumulated depreciation | (1,064,804 | ) | (1,067,829 | ) | |||
Operating real estate investments, net | 3,564,419 | 3,535,863 | |||||
Construction-in-progress | 242,246 | 201,360 | |||||
Land inventory | 135,917 | 90,603 | |||||
Total real estate investments, net | 3,942,582 | 3,827,826 | |||||
Cash and cash equivalents | 50,632 | 257,502 | |||||
Accounts receivable, net | 19,221 | 18,757 | |||||
Accrued rent receivable, net | 139,738 | 134,051 | |||||
Assets held for sale, net | 53,042 | 18,295 | |||||
Investment in Real Estate Ventures, at equity | 211,771 | 225,004 | |||||
Deferred costs, net | 124,472 | 125,224 | |||||
Intangible assets, net | 127,088 | 99,403 | |||||
Mortgage note receivable | — | 88,000 | |||||
Other assets | 73,075 | 65,111 | |||||
Total assets | $ | 4,741,621 | $ | 4,859,173 | |||
LIABILITIES AND BENEFICIARIES’ EQUITY | |||||||
Mortgage notes payable | $ | 642,396 | $ | 654,590 | |||
Unsecured term loans | 200,000 | 200,000 | |||||
Unsecured senior notes, net of discounts | 1,597,541 | 1,596,718 | |||||
Accounts payable and accrued expenses | 115,636 | 96,046 | |||||
Distributions payable | 28,318 | 28,871 | |||||
Deferred income, gains and rent | 41,133 | 59,452 | |||||
Acquired lease intangibles, net | 28,541 | 26,010 | |||||
Other liabilities | 41,630 | 37,558 | |||||
Liabilities related to assets held for sale | 1,269 | 602 | |||||
Total liabilities | 2,696,464 | 2,699,847 | |||||
Commitments and contingencies (Note 12) | |||||||
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 2015 and 2014 | 40 | 40 | |||||
Common Shares of Brandywine Realty Trust’s beneficial interest, $0.01 par value; shares authorized 400,000,000; 175,196,703 and 179,293,160 issued and outstanding in 2015 and 2014, respectively | 1,752 | 1,793 | |||||
Additional paid-in capital | 3,258,075 | 3,314,693 | |||||
Deferred compensation payable in common shares | 11,918 | 6,219 | |||||
Common shares in grantor trust, 745,686 in 2015 and 384,536 in 2014 | (11,918 | ) | (6,219 | ) | |||
Cumulative earnings | 561,227 | 529,487 | |||||
Accumulated other comprehensive loss | (8,490 | ) | (4,607 | ) | |||
Cumulative distributions | (1,786,374 | ) | (1,700,579 | ) | |||
Total Brandywine Realty Trust’s equity | 2,026,230 | 2,140,827 | |||||
Non-controlling interests | 18,927 | 18,499 | |||||
Total beneficiaries' equity | 2,045,157 | 2,159,326 | |||||
Total liabilities and beneficiaries' equity | $ | 4,741,621 | $ | 4,859,173 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 124,263 | $ | 120,288 | $ | 363,800 | $ | 363,581 | |||||||
Tenant reimbursements | 21,553 | 20,095 | 64,006 | 64,057 | |||||||||||
Termination fees | 1,097 | 1,418 | 2,561 | 6,970 | |||||||||||
Third party management fees, labor reimbursement and leasing | 4,274 | 3,932 | 12,805 | 12,269 | |||||||||||
Other | 1,398 | 825 | 5,467 | 2,295 | |||||||||||
Total revenue | 152,585 | 146,558 | 448,639 | 449,172 | |||||||||||
Operating expenses: | |||||||||||||||
Property operating expenses | 43,894 | 42,675 | 133,175 | 132,612 | |||||||||||
Real estate taxes | 13,119 | 12,869 | 37,632 | 39,167 | |||||||||||
Third party management expenses | 1,605 | 1,687 | 4,858 | 5,133 | |||||||||||
Depreciation and amortization | 58,314 | 52,616 | 160,355 | 157,773 | |||||||||||
General and administrative expenses | 6,127 | 5,900 | 21,554 | 20,086 | |||||||||||
Total operating expenses | 123,059 | 115,747 | 357,574 | 354,771 | |||||||||||
Operating income | 29,526 | 30,811 | 91,065 | 94,401 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 126 | 528 | 1,189 | 1,298 | |||||||||||
Tax credit transaction income | 11,853 | 11,853 | 11,853 | 11,853 | |||||||||||
Interest expense | (27,900 | ) | (31,481 | ) | (83,971 | ) | (94,837 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,010 | ) | (1,566 | ) | (3,377 | ) | (3,952 | ) | |||||||
Interest expense — financing obligation | (296 | ) | (273 | ) | (906 | ) | (861 | ) | |||||||
Recognized hedge activity | — | (828 | ) | — | (828 | ) | |||||||||
Equity in loss of Real Estate Ventures | (1,093 | ) | (486 | ) | (1,835 | ) | (733 | ) | |||||||
Net gain on disposition of real estate | 6,083 | 4,698 | 16,673 | 4,698 | |||||||||||
Net gain on sale of undepreciated real estate | 3,019 | — | 3,019 | 1,184 | |||||||||||
Net gain from remeasurement of investment in real estate ventures | — | — | 758 | 458 | |||||||||||
Loss on real estate venture transactions | — | — | — | (417 | ) | ||||||||||
Loss on early extinguishment of debt | — | (2,606 | ) | — | (2,606 | ) | |||||||||
Provision for impairment on assets held for sale/sold | — | (1,765 | ) | (2,508 | ) | (1,765 | ) | ||||||||
Income from continuing operations | 20,308 | 8,885 | 31,960 | 7,893 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | — | — | — | 18 | |||||||||||
Net gain (loss) on disposition of discontinued operations | — | (3 | ) | — | 900 | ||||||||||
Total discontinued operations | — | (3 | ) | — | 918 | ||||||||||
Net income | 20,308 | 8,882 | 31,960 | 8,811 | |||||||||||
Net income from discontinued operations attributable to non-controlling interests | — | — | — | (10 | ) | ||||||||||
Net income from continuing operations attributable to non-controlling interests | (161 | ) | (108 | ) | (221 | ) | (47 | ) | |||||||
Net income attributable to non-controlling interests | (161 | ) | (108 | ) | (221 | ) | (57 | ) | |||||||
Net income attributable to Brandywine Realty Trust | 20,147 | 8,774 | 31,739 | 8,754 | |||||||||||
Distribution to preferred shareholders | (1,725 | ) | (1,725 | ) | (5,175 | ) | (5,175 | ) | |||||||
Nonforfeitable dividends allocated to unvested restricted shareholders | (76 | ) | (82 | ) | (253 | ) | (268 | ) | |||||||
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ | 18,346 | $ | 6,967 | $ | 26,311 | $ | 3,311 | |||||||
Basic income per Common Share: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.01 | |||||||
Discontinued operations | — | — | — | 0.01 | |||||||||||
$ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.02 | ||||||||
Diluted income per Common Share: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.01 | |||||||
Discontinued operations | — | — | — | 0.01 | |||||||||||
$ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.02 | ||||||||
Basic weighted average shares outstanding | 178,188,037 | 171,606,722 | 179,198,714 | 161,866,955 | |||||||||||
Diluted weighted average shares outstanding | 178,776,684 | 173,193,870 | 179,988,492 | 163,353,970 | |||||||||||
Net income attributable to Brandywine Realty Trust | |||||||||||||||
Total continuing operations | $ | 20,147 | $ | 8,777 | $ | 31,739 | $ | 7,846 | |||||||
Total discontinued operations | — | (3 | ) | — | 908 | ||||||||||
Net income | $ | 20,147 | $ | 8,774 | $ | 31,739 | $ | 8,754 | |||||||
Distributions declared per Common Share | $ | 0.15 | $ | 0.15 | $ | 0.45 | $ | 0.45 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 20,308 | $ | 8,882 | $ | 31,960 | $ | 8,811 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized gain (loss) on derivative financial instruments | (2,922 | ) | 4,232 | (4,091 | ) | 967 | |||||||||
Loss on settlement of interest rate swaps | — | (828 | ) | — | (828 | ) | |||||||||
Reclassification of realized losses on derivative financial instruments to operations, net (1) | 58 | 76 | 174 | 196 | |||||||||||
Total other comprehensive gain (loss) | (2,864 | ) | 3,480 | (3,917 | ) | 335 | |||||||||
Comprehensive income | 17,444 | 12,362 | 28,043 | 9,146 | |||||||||||
Comprehensive income attributable to non-controlling interest | (136 | ) | (141 | ) | (187 | ) | (55 | ) | |||||||
Comprehensive income attributable to Brandywine Realty Trust | $ | 17,308 | $ | 12,221 | $ | 27,856 | $ | 9,091 |
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 Loss | Cumulative Distributions | Non-Controlling Interests | Total | ||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2014 | 4,000,000 | $ | 40 | 179,293,160 | 384,536 | $ | 1,793 | $ | 3,314,693 | $ | 6,219 | $ | (6,219 | ) | $ | 529,487 | $ | (4,607 | ) | $ | (1,700,579 | ) | $ | 18,499 | $ | 2,159,326 | ||||||||||||||||||||||
Net income | 31,739 | 221 | 31,960 | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (3,883 | ) | (34 | ) | (3,917 | ) | ||||||||||||||||||||||||||||||||||||||||||
Repurchase and retirement of Common Shares of Beneficial Interest | (4,701,302 | ) | (47 | ) | (60,770 | ) | (60,817 | ) | ||||||||||||||||||||||||||||||||||||||||
Issuance of partnership interest in joint venture | 1,025 | 1,025 | ||||||||||||||||||||||||||||||||||||||||||||||
Bonus share issuance | 8,447 | 125 | 125 | |||||||||||||||||||||||||||||||||||||||||||||
Equity issuance costs | (100 | ) | (100 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | 509,675 | 280,011 | 6 | 4,036 | 1 | 4,043 | ||||||||||||||||||||||||||||||||||||||||||
Share issuance from/to Deferred Compensation Plan | 86,723 | 81,139 | (2 | ) | 5,699 | (5,699 | ) | (2 | ) | |||||||||||||||||||||||||||||||||||||||
Adjustment to non-controlling interest | 93 | (93 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Share distributions | (5,175 | ) | (5,175 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.45 per share) | (80,620 | ) | (691 | ) | (81,311 | ) | ||||||||||||||||||||||||||||||||||||||||||
BALANCE, September 30, 2015 | 4,000,000 | $ | 40 | 175,196,703 | 745,686 | $ | 1,752 | $ | 3,258,075 | $ | 11,918 | $ | (11,918 | ) | $ | 561,227 | $ | (8,490 | ) | $ | (1,786,374 | ) | $ | 18,927 | $ | 2,045,157 |
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 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 | |||||||||||||||||||||||||||||||||||||||||||||
Other 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 |
Nine-month periods ended | |||||||
September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 31,960 | $ | 8,811 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation and amortization | 160,355 | 157,773 | |||||
Amortization of deferred financing costs | 3,377 | 3,952 | |||||
Amortization of debt discount/(premium), net | (507 | ) | (455 | ) | |||
Amortization of stock compensation costs | 4,312 | 3,622 | |||||
Shares used for employee taxes upon vesting of share awards | (2,056 | ) | (1,263 | ) | |||
Recognized hedge activity | — | 828 | |||||
Straight-line rent income | (17,579 | ) | (11,416 | ) | |||
Amortization of acquired above (below) market leases, net | (5,473 | ) | (5,206 | ) | |||
Straight-line ground rent expense | 66 | 66 | |||||
Provision for doubtful accounts | 1,276 | 1,687 | |||||
Loss on real estate venture transactions | — | 417 | |||||
Net gain on sale of interests in real estate | (19,692 | ) | (5,882 | ) | |||
Net gain from remeasurement of investment in a real estate venture | (758 | ) | (458 | ) | |||
Loss on early extinguishment of debt | — | 2,606 | |||||
Provision for impairment on assets held for sale/sold | 2,508 | 1,765 | |||||
Tax credit transaction income | (11,853 | ) | (11,853 | ) | |||
Real Estate Venture loss in excess of distributions | 2,579 | 659 | |||||
Deferred financing obligation | (906 | ) | (864 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (1,008 | ) | (4,586 | ) | |||
Other assets | (9,511 | ) | (10,317 | ) | |||
Accounts payable and accrued expenses | 13,819 | 9,304 | |||||
Deferred income, gains and rent | (3,491 | ) | (4,430 | ) | |||
Other liabilities | (2,458 | ) | (1,760 | ) | |||
Net cash provided by operating activities | 144,960 | 133,000 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (141,303 | ) | (12,405 | ) | |||
Acquisition of property - 1031 exchange funds applied | (62,812 | ) | — | ||||
Proceeds from the sale of properties | 152,243 | 81,625 | |||||
Sale of property - 1031 exchange funds held in escrow | 62,800 | — | |||||
Proceeds from repayment of mortgage notes receivable | 88,000 | 5,125 | |||||
Capital expenditures for tenant improvements | (56,095 | ) | (85,698 | ) | |||
Capital expenditures for redevelopments | (38,925 | ) | (10,195 | ) | |||
Capital expenditures for developments | (122,380 | ) | (48,057 | ) | |||
Advances for purchase of tenant assets, net of repayments | 290 | (212 | ) | ||||
Investment in unconsolidated Real Estate Ventures | (62,868 | ) | (16,330 | ) | |||
Deposits for real estate | (451 | ) | — | ||||
Escrowed cash | 1,004 | 1,076 | |||||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 7,401 | 7,341 | |||||
Leasing costs paid | (18,295 | ) | (17,018 | ) | |||
Net cash used in investing activities | (191,391 | ) | (94,748 | ) | |||
Cash flows from financing activities: | |||||||
Repayments of mortgage notes payable | (10,598 | ) | (9,994 | ) | |||
Repayments of unsecured term loans | — | (250,828 | ) | ||||
Proceeds from unsecured notes | — | 496,459 | |||||
Net proceeds from issuance of common shares | — | 335,016 | |||||
Repayments of unsecured notes | — | (120,361 | ) | ||||
Debt financing costs paid | (3,229 | ) | (3,630 | ) | |||
Proceeds from the exercise of stock options | 127 | 709 | |||||
Partner contribution to consolidated real estate venture | 1,025 | — | |||||
Repurchase and retirement of common shares | (60,817 | ) | — | ||||
Distributions paid to shareholders | (86,255 | ) | (76,081 | ) |
Distributions to noncontrolling interest | (692 | ) | (806 | ) | |||
Net cash used in financing activities | (160,439 | ) | 370,484 | ||||
Decrease in cash and cash equivalents | (206,870 | ) | 408,736 | ||||
Cash and cash equivalents at beginning of period | 257,502 | 263,207 | |||||
Cash and cash equivalents at end of period | $ | 50,632 | $ | 671,943 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2015 and 2014 of $8,764 and $4,466, respectively | $ | 80,720 | $ | 92,196 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in investments in joint venture related to non-cash disposition of property | — | (5,897 | ) | ||||
Change in real estate investments related to non-cash property acquisition | (67,261 | ) | — | ||||
Change in investments in joint venture related to non-cash acquisition of property | 67,261 | — | |||||
Change in receivable from settlement of acquisitions | — | 619 | |||||
Change in other liabilities from contingent consideration related to a business combination | 1,585 | — | |||||
Change in operating real estate from contingent consideration related to a business combination | (1,585 | ) | — | ||||
Change in other liabilities from a deferred payment related to an asset acquisition | 2,000 | — | |||||
Change in operating real estate from a deferred payment related to an asset acquisition | (2,000 | ) | — | ||||
Change in capital expenditures financed through accounts payable at period end | (2,472 | ) | 4,415 | ||||
Change in capital expenditures financed through retention payable at period end | 6,873 | 3,479 | |||||
Change in unfunded tenant allowance | — | (327 | ) |
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Operating properties | $ | 4,629,223 | $ | 4,603,692 | |||
Accumulated depreciation | (1,064,804 | ) | (1,067,829 | ) | |||
Operating real estate investments, net | 3,564,419 | 3,535,863 | |||||
Construction-in-progress | 242,246 | 201,360 | |||||
Land inventory | 135,917 | 90,603 | |||||
Total real estate investments, net | 3,942,582 | 3,827,826 | |||||
Cash and cash equivalents | 50,632 | 257,502 | |||||
Accounts receivable, net | 19,221 | 18,757 | |||||
Accrued rent receivable, net | 139,738 | 134,051 | |||||
Assets held for sale, net | 53,042 | 18,295 | |||||
Investment in Real Estate Ventures, at equity | 211,771 | 225,004 | |||||
Deferred costs, net | 124,472 | 125,224 | |||||
Intangible assets, net | 127,088 | 99,403 | |||||
Mortgage note receivable | — | 88,000 | |||||
Other assets | 73,075 | 65,111 | |||||
Total assets | $ | 4,741,621 | $ | 4,859,173 | |||
LIABILITIES AND PARTNERS' EQUITY | |||||||
Mortgage notes payable | $ | 642,396 | $ | 654,590 | |||
Unsecured term loans | 200,000 | 200,000 | |||||
Unsecured senior notes, net of discounts | 1,597,541 | 1,596,718 | |||||
Accounts payable and accrued expenses | 115,636 | 96,046 | |||||
Distributions payable | 28,318 | 28,871 | |||||
Deferred income, gains and rent | 41,133 | 59,452 | |||||
Acquired lease intangibles, net | 28,541 | 26,010 | |||||
Other liabilities | 41,630 | 37,558 | |||||
Liabilities related to assets held for sale | 1,269 | 602 | |||||
Total liabilities | 2,696,464 | 2,699,847 | |||||
Commitments and contingencies (Note 12) | |||||||
Redeemable limited partnership units at redemption value; 1,535,102 issued and outstanding in 2015 and 2014 | 22,247 | 24,571 | |||||
Brandywine Operating Partnership, L.P.’s equity: | |||||||
6.90% Series E-Linked Preferred Mirror Units; issued and outstanding- 4,000,000 in 2015 and 2014 | 96,850 | 96,850 | |||||
General Partnership Capital, 175,196,703 and 179,293,160 units issued and outstanding in 2015 and 2014, respectively | 1,932,953 | 2,041,902 | |||||
Accumulated other comprehensive loss | (8,924 | ) | (5,007 | ) | |||
Total Brandywine Operating Partnership, L.P.’s equity | 2,020,879 | 2,133,745 | |||||
Non-controlling interest - consolidated real estate ventures | 2,031 | 1,010 | |||||
Total partners’ equity | 2,022,910 | 2,134,755 | |||||
Total liabilities and partners’ equity | $ | 4,741,621 | $ | 4,859,173 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue: | |||||||||||||||
Rents | $ | 124,263 | $ | 120,288 | $ | 363,800 | $ | 363,581 | |||||||
Tenant reimbursements | 21,553 | 20,095 | 64,006 | 64,057 | |||||||||||
Termination fees | 1,097 | 1,418 | 2,561 | 6,970 | |||||||||||
Third party management fees, labor reimbursement and leasing | 4,274 | 3,932 | 12,805 | 12,269 | |||||||||||
Other | 1,398 | 825 | 5,467 | 2,295 | |||||||||||
Total revenue | 152,585 | 146,558 | 448,639 | 449,172 | |||||||||||
Operating expenses: | |||||||||||||||
Property operating expenses | 43,894 | 42,675 | 133,175 | 132,612 | |||||||||||
Real estate taxes | 13,119 | 12,869 | 37,632 | 39,167 | |||||||||||
Third party management expenses | 1,605 | 1,687 | 4,858 | 5,133 | |||||||||||
Depreciation and amortization | 58,314 | 52,616 | 160,355 | 157,773 | |||||||||||
General & administrative expenses | 6,127 | 5,900 | 21,554 | 20,086 | |||||||||||
Total operating expenses | 123,059 | 115,747 | 357,574 | 354,771 | |||||||||||
Operating income | 29,526 | 30,811 | 91,065 | 94,401 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 126 | 528 | 1,189 | 1,298 | |||||||||||
Tax credit transaction income | 11,853 | 11,853 | 11,853 | 11,853 | |||||||||||
Interest expense | (27,900 | ) | (31,481 | ) | (83,971 | ) | (94,837 | ) | |||||||
Interest expense — amortization of deferred financing costs | (1,010 | ) | (1,566 | ) | (3,377 | ) | (3,952 | ) | |||||||
Interest expense — financing obligation | (296 | ) | (273 | ) | (906 | ) | (861 | ) | |||||||
Recognized hedge activity | — | (828 | ) | — | (828 | ) | |||||||||
Equity in loss of Real Estate Ventures | (1,093 | ) | (486 | ) | (1,835 | ) | (733 | ) | |||||||
Net gain on disposition of real estate | 6,083 | 4,698 | 16,673 | 4,698 | |||||||||||
Net gain on sale of undepreciated real estate | 3,019 | — | 3,019 | 1,184 | |||||||||||
Net gain from remeasurement of investment in real estate ventures | — | — | 758 | 458 | |||||||||||
Loss on real estate venture transactions | — | — | — | (417 | ) | ||||||||||
Loss on early extinguishment of debt | — | (2,606 | ) | — | (2,606 | ) | |||||||||
Provision for impairment on assets held for sale/sold | — | (1,765 | ) | (2,508 | ) | (1,765 | ) | ||||||||
Income from continuing operations | 20,308 | 8,885 | 31,960 | 7,893 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | — | — | — | 18 | |||||||||||
Net gain (loss) on disposition of discontinued operations | — | (3 | ) | — | 900 | ||||||||||
Total discontinued operations | — | (3 | ) | — | 918 | ||||||||||
Net income | 20,308 | 8,882 | 31,960 | 8,811 | |||||||||||
Net (income) loss attributable to non-controlling interests | (1 | ) | (24 | ) | 4 | (12 | ) | ||||||||
Net income attributable to Brandywine Operating Partnership | 20,307 | 8,858 | 31,964 | 8,799 | |||||||||||
Distribution to preferred unitholders | (1,725 | ) | (1,725 | ) | (5,175 | ) | (5,175 | ) | |||||||
Amount allocated to unvested restricted unitholders | (76 | ) | (82 | ) | (253 | ) | (268 | ) | |||||||
Net income attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P. | $ | 18,506 | $ | 7,051 | $ | 26,536 | $ | 3,356 | |||||||
Basic income (loss) per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.01 | |||||||
Discontinued operations | — | — | — | 0.01 | |||||||||||
$ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.02 | ||||||||
Diluted income per Common Partnership Unit: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.01 | |||||||
Discontinued operations | — | — | — | 0.01 | |||||||||||
$ | 0.10 | $ | 0.04 | $ | 0.15 | $ | 0.02 | ||||||||
Basic weighted average common partnership units outstanding | 179,723,139 | 173,341,782 | 180,733,816 | 163,620,963 | |||||||||||
Diluted weighted average common partnership units outstanding | 180,311,786 | 174,928,930 | 181,523,594 | 165,107,978 | |||||||||||
Net income (loss) attributable to Brandywine Operating Partnership, L.P. | |||||||||||||||
Total continuing operations | $ | 20,307 | $ | 8,861 | $ | 31,964 | $ | 7,881 | |||||||
Total discontinued operations | — | (3 | ) | — | 918 | ||||||||||
Net income | $ | 20,307 | $ | 8,858 | $ | 31,964 | $ | 8,799 | |||||||
Distributions declared per Common Partnership Unit | 0.15 | 0.15 | 0.45 | 0.45 |
Three-month periods ended | Nine-month periods ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 20,308 | $ | 8,882 | $ | 31,960 | $ | 8,811 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized gain (loss) on derivative financial instruments | (2,922 | ) | 4,232 | (4,091 | ) | 967 | |||||||||
Loss on settlement of interest rate swaps | — | (828 | ) | — | (828 | ) | |||||||||
Reclassification of realized losses on derivative financial instruments to operations, net (1) | 58 | 76 | 174 | 196 | |||||||||||
Total other comprehensive income (loss) | (2,864 | ) | 3,480 | (3,917 | ) | 335 | |||||||||
Comprehensive income attributable to Brandywine Operating Partnership, L.P. | $ | 17,444 | $ | 12,362 | $ | 28,043 | $ | 9,146 |
Nine-month periods ended | |||||||
September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 31,960 | $ | 8,811 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation and amortization | 160,355 | 157,773 | |||||
Amortization of deferred financing costs | 3,377 | 3,952 | |||||
Amortization of debt discount/(premium), net | (507 | ) | (455 | ) | |||
Amortization of stock compensation costs | 4,312 | 3,622 | |||||
Shares used for employee taxes upon vesting of share awards | (2,056 | ) | (1,263 | ) | |||
Recognized hedge activity | — | 828 | |||||
Straight-line rent income | (17,579 | ) | (11,416 | ) | |||
Amortization of acquired above (below) market leases, net | (5,473 | ) | (5,206 | ) | |||
Straight-line ground rent expense | 66 | 66 | |||||
Provision for doubtful accounts | 1,276 | 1,687 | |||||
Loss on real estate venture transactions | — | 417 | |||||
Net gain on sale of interests in real estate | (19,692 | ) | (5,882 | ) | |||
Net gain on remeasurement of investment in a real estate venture | (758 | ) | (458 | ) | |||
Tax credit transaction income | (11,853 | ) | (11,853 | ) | |||
Loss on early extinguishment of debt | — | 2,606 | |||||
Provision for impairment on assets held for sale | 2,508 | 1,765 | |||||
Real Estate Venture loss in excess of distributions | 2,579 | 659 | |||||
Deferred financing obligation | (906 | ) | (864 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (1,008 | ) | (4,586 | ) | |||
Other assets | (9,511 | ) | (10,317 | ) | |||
Accounts payable and accrued expenses | 13,819 | 9,304 | |||||
Deferred income, gains and rent | (3,491 | ) | (4,430 | ) | |||
Other liabilities | (2,458 | ) | (1,760 | ) | |||
Net cash provided by operating activities | 144,960 | 133,000 | |||||
Cash flows from investing activities: | |||||||
Acquisition of properties | (141,303 | ) | (12,405 | ) | |||
Acquisition of property - 1031 exchange funds applied | (62,812 | ) | — | ||||
Proceeds from the sale of properties | 152,243 | 81,625 | |||||
Sale of property - 1031 exchange funds held in escrow | 62,800 | — | |||||
Proceeds from repayment of mortgage notes receivable | 88,000 | 5,125 | |||||
Capital expenditures for tenant improvements | (56,095 | ) | (85,698 | ) | |||
Capital expenditures for redevelopments | (38,925 | ) | (10,195 | ) | |||
Capital expenditures for developments | (122,380 | ) | (48,057 | ) | |||
Advances for purchase of tenant assets, net of repayments | 290 | (212 | ) | ||||
Investment in unconsolidated Real Estate Ventures | (62,868 | ) | (16,330 | ) | |||
Deposits for real estate | (451 | ) | — | ||||
Escrowed cash | 1,004 | 1,076 | |||||
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income | 7,401 | 7,341 | |||||
Leasing costs paid | (18,295 | ) | (17,018 | ) | |||
Net cash used in investing activities | (191,391 | ) | (94,748 | ) | |||
Cash flows from financing activities: | |||||||
Repayments of mortgage notes payable | (10,598 | ) | (9,994 | ) | |||
Repayments of unsecured term loans | — | (250,828 | ) | ||||
Proceeds from unsecured notes | — | 496,459 | |||||
Net proceeds from issuance of common units | — | 335,016 | |||||
Repayments of unsecured notes | — | (120,361 | ) | ||||
Debt financing costs paid | (3,229 | ) | (3,630 | ) | |||
Proceeds from the exercise of stock options | 127 | 709 | |||||
Partner contribution to consolidated real estate venture | 1,025 | — | |||||
Repurchase and retirement of common partnership units | (60,817 | ) | — |
Distributions paid to preferred and common partnership unitholders | (86,947 | ) | (76,887 | ) | |||
Net cash used in financing activities | (160,439 | ) | 370,484 | ||||
Decrease in cash and cash equivalents | (206,870 | ) | 408,736 | ||||
Cash and cash equivalents at beginning of period | 257,502 | 263,207 | |||||
Cash and cash equivalents at end of period | $ | 50,632 | $ | 671,943 | |||
Supplemental disclosure: | |||||||
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2015 and 2014 of $8,764 and $4,466, respectively | $ | 80,720 | $ | 92,196 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in investments in joint venture related non-cash disposition of property | — | (5,897 | ) | ||||
Change in real estate investments related to non-cash property acquisition | (67,261 | ) | — | ||||
Change in investments in joint venture related to non-cash acquisition of property | 67,261 | — | |||||
Change in receivable from settlement of acquisitions | — | 619 | |||||
Change in other liabilities from contingent consideration related to a business combination | 1,585 | — | |||||
Change in operating real estate from contingent consideration related to a business combination | (1,585 | ) | — | ||||
Change in other liabilities from a deferred payment related to an asset acquisition | 2,000 | — | |||||
Change in operating real estate from a deferred payment related to an asset acquisition | (2,000 | ) | — | ||||
Change in capital expenditures financed through accounts payable at period end | (2,472 | ) | 4,415 | ||||
Change in capital expenditures financed through retention payable at period end | 6,873 | 3,479 | |||||
Change in unfunded tenant allowance | — | (327 | ) |
September 30, 2015 | December 31, 2014 | ||||||
Land | $ | 658,280 | $ | 669,635 | |||
Building and improvements | 3,438,563 | 3,409,303 | |||||
Tenant improvements | 532,380 | 524,754 | |||||
4,629,223 | 4,603,692 | ||||||