[GRAPHIC OMITTED] FOR IMMEDIATE RELEASE
Contact:
Press Contact: Investor Contact:
- -------------- -----------------
Michael Beckerman Gerard H. Sweeney
Beckerman Public Relations Christopher P. Marr
908-781-6420 Brandywine Realty Trust
michael@beckermanpr.com 610-325-5600
info@brandywinerealty.com
Brandywine Realty Trust Announces Fourth Quarter and Full Year 2002 Results
PLYMOUTH MEETING, PA, February 27, 2003 -- Brandywine Realty Trust (BDN-NYSE)
announced today that fully diluted earnings per share (EPS) was $0.27 for the
fourth quarter of 2002, an increase of $0.17 per share as compared to $0.10 for
the fourth quarter of 2001. Net income was $12.7 million for the fourth quarter
of 2002, an increase of $5.8 million, as compared to $6.9 million for the fourth
quarter of 2001. The increase in net income and EPS in the fourth quarter of
2002 as compared to the similar period in 2001, was primarily due to $6.6
million of non-recurring charges incurred in the fourth quarter of 2001.
Fully diluted EPS was $1.40 for the year 2002, an increase of $0.83 per share as
compared to $0.57 for the year 2001. Net income was $63.0 million for year 2002,
an increase of $29.3 million, as compared to $33.7 million for the year 2001.
The increase in net income in 2002 was primarily the result of the net
acquisition, development and disposition activity during 2002, a decrease in
depreciation and amortization expense in 2002 resulting from the change in the
estimated lives of various buildings from 25 to 40 years and the aforementioned
2001 non-recurring charges.
Fully diluted funds from operations (FFO) were $31.7 million or $0.68 per share
for the fourth quarter of 2002 compared to $32.6 million or $0.69 per share for
the fourth quarter of 2001. The Company ended the quarter with its portfolio
91.0% occupied and experienced same-store revenue growth for the fourth quarter
of 2002 of 1.9% as compared to the same quarter of 2001. FFO for the year 2002
was $126.4 million or $2.69 per share as compared to $127.3 million or $2.69 per
share for 2001. FFO per share is calculated on a diluted basis which assumes
full conversion of the convertible preferred shares.
"We are encouraged by our fourth quarter results given the uncertain economic
climate. Our sound business strategy and seasoned management team, along with
our commitment to tenant retention and our high-quality assets will benefit us
in the challenging leasing environment we expect will remain in 2003. This
economy provides wonderful opportunities for companies with strong operating
platforms to outperform," commented Gerard H. Sweeney, Brandywine's President
and Chief Executive Officer.
401 Plymouth Road Suite 500 o Plymouth Meeting PA 19462
Phone (610) 325-5600 o Fax (610) 325-5622 o www/brandywinerealty.com
Brandywine Realty Trust Summary Portfolio Performance
o FFO payout ratio was 64.5% for the quarter and 65.3% for the year
o Cash available for distribution (CAD) payout ratio was 79.7% for the quarter
and 80.6% for the year
o Decrease in same-store net operating income (NOI) for the quarter of 5.2% with
rental income on a cash basis and 4.2% with rental income on a straight-line
basis (based on 225 properties or 93.2% of the portfolio)
o Decrease in same-store net operating income (NOI) for the year of 3.7% with
rental income on a cash basis and 4.0% with rental income on a straight-line
basis (based on 194 properties or 82.3% of the portfolio)
o Quarterly new lease rental rate decrease of 2.1% on a cash basis and an
increase of 1.6% on a straight-line basis
o Quarterly rental rate increases on renewals were 0.3% on a cash basis and 3.7%
on a straight-line basis
o YTD rental rate increases on new leases were 0.3% on a cash basis and 4.5% on
a straight-line basis
o YTD rental rate increases on renewals were 3.5% on a cash basis and 7.1% on a
straight-line basis
o Quarterly retention rate was 86.9% and YTD retention rate was 78.0%
o Portfolio was 91.0% occupied and 91.6% leased as of December 31, 2002
o Leases expired or were terminated for approximately 785,000 square feet during
the quarter
o Leases were renewed for 682,000 square feet during the quarter
o New leases were signed during the quarter for 228,000 square feet and for
703,000 square feet YTD
o The Company's three development projects consist of approximately 428,000
square feet that were 43% pre-leased as of December 31, 2002.
Distributions
On December 20, 2002, the Board of Trustees declared a regular quarterly
dividend distribution of $0.44 per common share that was paid on January 15,
2003 to shareholders of record as of December 31, 2002.
2003 Financial Outlook
As a result of economic conditions in the Company's markets, we continue to
experience operational challenges that result in difficult earnings visibility.
Our expectations for 2003 are based on the following key factors:
o A slight decline in average occupancy from levels achieved in 2002
o A decrease in same-store net operating income ranging from 1.5% to 3.0%
o Operating margins and general and administrative margins consistent with those
experienced in 2002
Based on these key assumptions, we affirm our guidance from our October 29, 2002
press release and continue to expect the first quarter 2003 FFO to be $0.64 -
$0.66 per share and EPS to be $0.23 - $0.26 per share and full year 2003 FFO to
be $2.62 to $2.69 and EPS to be $1.01 - $1.10 per share. These estimates reflect
management's view of current market conditions and certain assumptions with
regard to rental rates, occupancy levels and various other assumptions and
projections. The estimates may be positively or negatively impacted primarily by
the timing and terms of property leases.
Forward-Looking Statements
Estimates of future FFO per share and certain other statements in this release
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results, performance, achievements or transactions of the Company and
its affiliates to be materially different from any future results, performance,
achievements or transactions expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors relate to, among others:
the Company's ability to lease vacant space and to renew or relet space under
expiring leases at expected levels, competition with other real estate companies
for tenants, the potential loss or bankruptcy of major tenants, interest rate
levels, the availability of debt and equity financing, competition for real
estate acquisitions and risks of acquisitions, dispositions and developments,
including the cost of construction delays and cost overruns, unanticipated
operating and capital costs, the Company's ability to obtain adequate insurance,
including coverage for terrorist acts, dependence upon certain geographic
markets, and general and local economic and real estate conditions, including
the extent and duration of adverse changes that affect the industries in which
the Company's tenants compete. Additional information on factors which could
impact the Company and the forward-looking statements contained herein are
included in the Company's filings with the Securities and Exchange Commission,
including the Company's Annual Reports on Form 10-K. The Company assumes no
obligation to update or supplement forward-looking statements that become untrue
because of subsequent events.
Funds From Operations
Management believes FFO should be considered in conjunction with net income and
cash flows to facilitate a clear understanding of our operating results. FFO
should not be considered as an alternative to net income, as a measure of our
financial performance or as an alternative to cash flows from operating
activities as a measure of liquidity. FFO does not represent cash generated from
operating activities in accordance with generally accepted accounting principles
and is not necessarily indicative of cash available to fund cash needs. The
principal difference between net income and FFO is that depreciation and
amortization are not components of FFO. The Company follows the National
Association of Real Estate Investment Trust's definition of FFO, which may
differ from the methodology for computing FFO used by other REIT's, and
accordingly, the Company's calculation of FFO may not be comparable to such
other REIT's.
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
December 31, December 31,
2002 2001
----------- -----------
ASSETS
Real estate investments:
Operating properties $ 1,889,158 $ 1,893,039
Accumulated depreciation (245,230) (230,793)
----------- -----------
1,643,928 1,662,246
Construction-in-progress 58,127 111,378
Land held for development 43,075 39,285
----------- -----------
1,745,130 1,812,909
Cash and cash equivalents 26,801 13,459
Escrowed cash 16,318 16,311
Accounts receivable, net 3,657 6,394
Accrued rent receivable 28,333 25,222
Investment in marketable securities 11,872 10,735
Assets held for sale 8,517 --
Investment in joint ventures, at equity 14,842 19,067
Deferred costs, net 29,271 24,261
Other assets 34,547 31,845
----------- -----------
Total assets $ 1,919,288 $ 1,960,203
=========== ===========
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable $ 597,729 $ 614,840
Borrowings under Credit Facility 307,000 394,325
Unsecured term loan 100,000 --
Accounts payable and accrued expenses 27,576 35,054
Distributions payable 21,186 21,525
Tenant security deposits and deferred rents 22,276 22,290
Other liabilities 22,006 20,179
Liabilities related to assets held for sale 20 --
----------- -----------
Total liabilities 1,097,793 1,108,213
Minority interest 135,052 143,834
Beneficiaries' equity:
Preferred Shares:
7.25% Series A Preferred Shares, $0.01 par value;
shares authorized-10,000,000; issued and
outstanding-750,000 in 2002 and 2001 8 8
8.75% Series B Preferred Shares, $0.01 par value;
shares authorized-10,000,000; issued and
outstanding-4,375,000 in 2002 and 2001 44 44
Common Shares of beneficial interest, $0.01 par value;
shares authorized-100,000,000; issued and
outstanding-35,226,315 in 2002 and 35,640,935 in 2001 351 355
Additional paid-in capital 841,660 848,214
Share warrants 401 401
Cumulative earnings 225,010 163,502
Accumulated other comprehensive loss (6,402) (4,587)
Cumulative distributions (374,629) (299,781)
----------- -----------
Total beneficiaries' equity 686,443 708,156
----------- -----------
Total liabilities and beneficiaries' equity $ 1,919,288 $ 1,960,203
=========== ===========
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
Quarter Ended December 31, Year Ended December 31,
-------------------------- --------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenue
Rents $ 65,653 $ 57,855 $ 253,338 $ 233,612
Tenant reimbursements 9,254 7,146 33,624 32,470
Other 1,677 3,543 9,768 10,464
----------- ----------- ----------- -----------
Total revenue 76,584 68,544 296,730 276,546
Operating Expenses
Property operating expenses 20,392 18,082 76,746 72,492
Real estate taxes 6,950 5,720 25,854 23,077
Interest 15,358 16,116 63,522 66,385
Depreciation and amortization 15,339 16,750 58,632 69,047
Administrative expenses 2,992 3,461 14,804 15,177
Non-recurring charges -- 6,600 -- 6,600
Unrealized loss on assets held-for-sale 665 -- 665 --
----------- ----------- ----------- -----------
Total operating expenses 61,696 66,729 240,223 252,778
----------- ----------- ----------- -----------
Income from continuing operations before equity in income of
real estate ventures, net gain on sales of interests in
real estate, minority interest and extraordinary item 14,888 1,815 56,507 23,768
Equity in income of real estate ventures (65) 545 987 2,768
----------- ----------- ----------- -----------
Income from continuing operations before net gain on sales of
interests in real estate, minority interest and
extraordinary item 14,823 2,360 57,494 26,536
Net gain on sales of interests in real estate -- 3,227 -- 4,524
Minority interest attributable to continuing operations (2,332) (1,877) (9,283) (7,915)
----------- ----------- ----------- -----------
Income from continuing operations 12,491 3,710 48,211 23,145
Income from discontinued operations, net of minority interest 256 3,178 6,694 11,688
Net gain on disposition of discontinued operations, net of
minority interest -- -- 8,079 --
----------- ----------- ----------- -----------
Income before extraordinary item 12,747 6,888 62,984 34,833
Extraordinary item -- -- -- (1,111)
----------- ----------- ----------- -----------
Net Income 12,747 6,888 62,984 33,722
Income allocated to Preferred Shares (2,976) (2,975) (11,906) (11,906)
----------- ----------- ----------- -----------
Income allocated to Common Shares $ 9,771 $ 3,913 $ 51,078 $ 21,816
=========== =========== =========== ===========
Earnings per Common Share after discontinued operations:
Basic income per Common Share $ 0.27 $ 0.10 $ 1.40 $ 0.57
=========== =========== =========== ===========
Basic weighted-average shares outstanding 35,226,315 35,546,344 35,513,813 35,646,571
=========== =========== =========== ===========
Diluted income per Common Share $ 0.27 $ 0.10 $ 1.40 $ 0.57
=========== =========== =========== ===========
Diluted weighted-average shares outstanding 35,251,565 35,576,844 35,548,043 35,674,380
=========== =========== =========== ===========
BRANDYWINE REALTY TRUST
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
Quarter Ended December 31, Year Ended December 31,
------------------------- ----------- -----------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Funds From Operations (FFO):
Income before gains on sales of interests in real estate, minority interest
and extraordinary item:
Continuing operations $ 14,823 $ 2,360 $ 57,494 $ 26,536
Discontinued operations 270 3,370 7,080 12,395
Non-recurring charges -- 6,600 -- 6,600
----------- ----------- ----------- -----------
Income before gains on sales, minority interest, extraordinary item and
non-recurring charges 15,093 12,330 64,574 45,531
Add:
Depreciation:
Real property 13,525 17,503 52,944 73,031
Real estate ventures 639 1,199 2,422 3,479
Amortization of leasing costs 1,814 1,599 5,820 5,158
Gain on sale of land interests -- -- -- 881
Unrealized loss on assets held-for-sale 665 -- 665 --
Less:
Gain included in equity in income of real estate ventures -- -- -- (785)
----------- ----------- ----------- -----------
Funds from operations, excluding non-recurring charges $ 31,736 $ 32,631 $ 126,425 $ 127,295
=========== =========== =========== ===========
Number of weighted-average Common Shares 46,508,350 47,197,842 46,928,420 47,297,302
=========== =========== =========== ===========
FFO per weighted-average Common Share, excluding non-recurring charges $ 0.68 $ 0.69 $ 2.69 $ 2.69
=========== =========== =========== ===========
FFO per weighted-average Common Share $ 0.68 $ 0.55 $ 2.69 $ 2.55
=========== =========== =========== ===========
Payout ratio of FFO (1) 64.5% 63.6% 65.3% 63.2%
Cash Available for Distribution (CAD):
FFO (excluding non-recurring charges) $ 31,736 $ 32,631 $ 126,425 $ 127,295
Add (deduct):
Rental income from straight-line rents (1,719) (1,498) (5,930) (6,206)
Deferred market rental income (459) -- (459) --
Amortization:
Deferred financing costs 252 540 1,795 2,679
Deferred compensation costs 765 982 3,182 3,710
Second generation capital expenditures (2):
Building and tenant improvements (3,235) (2,996) (16,548) (12,677)
Lease commissions (1,661) (718) (6,042) (3,577)
----------- ----------- ----------- -----------
Cash available for distribtution $ 25,679 $ 28,941 $ 102,423 $ 111,224
=========== =========== =========== ===========
FFO per weighted-average Common Share $ 0.55 $ 0.61 $ 2.18 $ 2.35
=========== =========== =========== ===========
Payout ratio of CAD (1) 79.7% 71.8% 80.6% 72.3%
Dividend per Common Share $ 0.44 $ 0.44 $ 1.76 $ 1.70
=========== =========== =========== ===========
(1) Payout ratio is calculated by dividing dividend per Common Share by FFO or
CAD per weighted-average Common Share
(2) Represents expenditures incurred during the period (regardless if lease
commencement is after quarter end). Excludes first generation costs, which
consist of capital expenditures, tenant improvements and leasing
commissions associated with development and purchase price adjustments
relating to acquisitions (including seller escrows, purchase price
reduction or costs anticipated to initially lease-up acquired properties).
Fourth Quarter Earnings Call and Supplemental Information Package
Brandywine President and CEO, Gerard H. Sweeney, will be hosting a conference
call on Friday, February 28, 2003 at 1:00 p.m. EST. Call 1-877-679-9045. After
the conference, a taped replay of the call can be accessed 24 hours a day
through Friday, March 14, 2003 by calling 1-800-615-3210 - access code 6375008.
The Company has prepared a Supplemental Information package that includes
financial results and operational statistics to support the announcement of
fourth quarter earnings. The Supplemental Information package is available
through the Company's website @www.brandywinerealty.com. The Supplemental
Information Package will be found in both the "About The Company" section and
the "Investor Relations - Annual Reports" section of the web page.
Brandywine Realty Trust, with headquarters in Plymouth Meeting, PA and regional
offices in Mount Laurel, NJ and Richmond, VA, is one of the Mid-Atlantic
Region's largest full-service real estate companies. Brandywine owns, manages or
has an ownership interest in 288 office and industrial properties, aggregating
19.9 million square feet.
# # #