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Brandywine Realty Trust Announces Second Quarter 2018 Results and Narrows 2018 Guidance

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PHILADELPHIA, July 19, 2018 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and six-month periods ended June 30, 2018.

Management Comments

"We remain excited about the strong progression of our 2018 business plan," stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust. "Market conditions remain strong and we continue to have a robust leasing pipeline.  Our 2018 revenue target is now 92% executed resulting in strong quarterly metrics, including a 22.8% increase in quarterly GAAP mark-to-market rents. Our development pipeline aggregating $270 million is now 92% leased at a weighted-average cash yield on cost of 9.2%.  In Austin, Texas, we achieved a significant milestone by receiving zoning approval for our Broadmoor campus that will allow us to transform the property into a six million square foot, mixed-use, transit-oriented urban environment.  Our balance sheet strengthening strategy was further enhanced by extending our unsecured line of credit through July 2022 while reducing borrowing costs.  After a successful second quarter we are narrowing our 2018 FFO guidance range from $1.34 to $1.42 to $1.35 to $1.41 per diluted share."

Second Quarter Highlights

Financial Results

  • Net income to common shareholders; $12.9 million, or $0.07 per share.
  • Funds from Operations (FFO); $63.0 million, or $0.35 per share.
  • As anticipated, our second quarter results include a gain on the sale of land totaling $2.8 million.

Portfolio Results

  • Core portfolio was 92.3% occupied and 94.2% leased.
  • Executed 361,000 square feet of new and renewal leases.
  • Achieved 79% tenant retention ratio.
  • Rental rate mark-to-market increased 22.8% / 4.4% on GAAP/cash basis.

Schuylkill Yards

  • On June 29, 2018, we acquired a leasehold interest in one-acre land parcel located at 3025 JFK Boulevard in Philadelphia, Pennsylvania and additional development rights for a gross purchase price totaling $20.9 million.  The land parcel is currently operating as a parking facility and will be part of the first phase at our Schuylkill Yards development site.  The acquisition was funded from cash-on-hand.

1919 Market Joint Venture

  • On June 26, 2018, the partnership owning 1919 Market Street located in Philadelphia, Pennsylvania paid off the existing construction loan totaling $88.8 million that was scheduled to mature in October 2018 through a loan to the partnership.  The property is no longer encumbered with third-party debt and our additional investment totaled $44.4 million and was funded through cash-on-hand.

Development/Redevelopment Acquisitions

  • On April 18, 2018, fully executed a lease for the entire building located at 500 North Gulph Road in King of Prussia, Pennsylvania, which is a 101,000 square foot office building currently under redevelopment.  Stabilization is anticipated during the fourth quarter of 2018.  The stabilized cash yield will be 9.3%.

2018 Finance / Capital Markets Activity

  • On July 17, 2018, we amended our revolving credit facility to extend the maturity date from May 15, 2019 to July 15, 2022 with two six-month extensions.  In addition, we lowered our interest rate borrowing margin by 10 basis points and reduced our financial covenant requirements.
  • We have no outstanding balance on our $600.0 million unsecured revolving credit facility as of June 30, 2018.
  • We have $108.3 million of cash and cash equivalents on-hand as of June 30, 2018.

Results for the Three and Six Month Period Ended June 30, 2018

Net income allocated to common shares totaled $12.9 million or $0.07 per diluted share in the second quarter of 2018 compared to net income of $4.1 million or $0.02 per diluted share in the second quarter of 2017.

FFO available to common shares and units totaled $63.0 million or $0.35 per diluted share in the second quarter of 2018 as compared to $57.4 million, or $0.32 per diluted share for the second quarter of 2017.  Our 2018 results include a gain of the sale of land in Austin, Texas totaling $2.8 million.  Our 2017 results include a one-time, non-cash charge related to our preferred share redemption totaling $3.2 million.  Our second quarter 2018 payout ratio ($0.18 common share distribution / $0.35 FFO per diluted share) was 51.4%. 

Net income allocated to common shares totaled $57.1 million or $0.32 per diluted share in the first six months of 2018 compared to net income of $23.4 million or $0.13 per diluted share in the first six months of 2017.

Our FFO available to common shares and units for the first six months of 2018 totaled $120.2 million or $0.66 per diluted share versus $113.5 million, or $0.64 per diluted share in the first six months of 2017.  Our first six months 2018 FFO payout ratio ($0.36 common share distribution / $0.66 FFO per diluted share) was 54.5%.

Operating and Leasing Activity

In the second quarter of 2018, our Net Operating Income (NOI) excluding termination revenues and other income items decreased (2.5%) on a GAAP basis and increased 0.3% on a cash basis for our 81 same store properties, which were 92.6% and 93.4% occupied on June 30, 2018 and 2017, respectively.

We leased approximately 361,000 square feet and commenced occupancy on 279,000 square feet during the second quarter of 2018.  The second quarter occupancy activity includes 126,000 square feet of renewals, 63,000 square feet of new leases and 90,000 square feet of tenant expansions.  We have an additional 293,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2018.

We achieved a 79% tenant retention ratio in our core portfolio with net absorption of 4,900 square feet during the second quarter of 2018.  Second quarter rental rate growth increased 22.8% as our renewal rental rates increased 9.1% and our new lease/expansion rental rates increased 42.6%, all on a GAAP basis.

At June 30, 2018, our core portfolio of 86 properties comprising 15.6 million square feet was 92.3% occupied and we are currently 94.2% leased (reflecting new leases commencing after June 30, 2018).

Distributions

On May 23, 2018, our Board of Trustees declared a quarterly dividend distribution of $0.18 per common share that is payable on July 20, 2018 to shareholders of record as of July 6, 2018. 

2018 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are narrowing our 2018 net income guidance of $0.29 - $0.37 to $0.29 - $0.35 per diluted share and 2018 FFO guidance of $1.34 - $1.42 to $1.35 - $1.41 per diluted share.  This guidance is provided for informational purposes and is subject to change.  The following is a reconciliation of the calculation of 2018 FFO and earnings per diluted share:

   
Guidance for 2018 Range
           
Earnings per diluted share allocated to common shareholders $ 0.29  to $ 0.35
Plus:  real estate depreciation, amortization 1.06    1.06
FFO per diluted share $ 1.35 to $ 1.41
           

Our 2018 FFO key assumptions to include:

  • Core Occupancy improving to a range of 94-95% by year-end 2018 and 95-96% leased;
  • Average Same-Store Occupancy of 92.3% during 2018 versus 93.5% during 2017;
  • 8-10% GAAP increase in overall lease rates during 2018 with a resulting (1)-1% (decrease)/increase in 2018 same store GAAP NOI;
  • (2)-2% cash (decrease)/increase in overall lease rates during 2018 with a resulting 1-3% increase in 2018 same store cash NOI;
  • Speculative Revenue Target:  $26.3 million, 92% achieved;
  • $0.18 per share quarterly dividend;
  • No acquisition activity;
  • $100.8 million sales activity, 100% achieved;
  • One development start; and
  • Annual earnings and FFO per diluted share based on 182.0 million fully diluted weighted average common shares.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE:BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets.  Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 184 properties and 25.3 million square feet as of June 30, 2018, which excludes assets held for sale.  Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together.  For more information, please visit www.brandywinerealty.com.

Conference Call and Audio Webcast

BDN management will discuss 2018 financial results and earnings guidance for fiscal 2018 on Friday, July 20, 2018 at 9:00 a.m. Eastern Time.  The conference call can be accessed by dialing 1-833-818-6810 and providing conference ID: 4898156.  Beginning two hours after the conference call, a taped replay of the call can be accessed through Friday, August 3, 2018, by calling 1-855-859-2056 and entering access code 4898156.  The conference call can also be accessed via a webcast on our website at www.brandywinerealty.com.

Looking Ahead – Third Quarter 2018 Conference Call

We anticipate we will release our third quarter 2018 earnings on Wednesday, October 17, 2018, after the market close and will host our third quarter 2018 conference call on Thursday, October 18, 2018 at 9:00 a.m. Eastern Time.  We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Forward-Looking Statements

Estimates of future earnings per share, FFO per share, common share dividend distributions 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 our and our affiliates' actual results, performance, achievements or transactions 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: our 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, equity or other financing; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our 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 our tenants operate.  The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including the Company's financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors.  The Company's practice regarding payment of dividends may be modified at any time and from time to time.  Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2017.  We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP).  Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance.  At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

Funds from Operations (FFO)

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us.  NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures.  Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests.  To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release.  FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

Net Operating Income (NOI)

NOI is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships.  In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization.  NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently.  NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.  NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations.  NOI is used internally to evaluate the performance of our operating segments and to make decisions about resource allocations.  We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

 
 
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
    June 30,     December 31,  
    2018     2017  
ASSETS   (unaudited)          
Real estate investments:                
Operating properties   $ 3,864,629     $ 3,832,348  
Accumulated depreciation     (931,194 )     (895,091 )
Operating real estate investments, net     2,933,435       2,937,257  
Construction-in-progress     120,593       121,188  
Land held for development     95,658       98,242  
Prepaid leasehold interests in land held for development     40,177       -  
Total real estate investments, net     3,189,863       3,156,687  
Assets held for sale, net     4,254       392  
Cash and cash equivalents     108,304       202,179  
Accounts receivable, net of allowance of $3,850 and $3,467 as of June 30, 2018 and December 31,
2017, respectively
    19,530       17,938  
Accrued rent receivable, net of allowance of $13,403 and $13,645 as of June 30, 2018 and
December 31, 2017, respectively
    176,380       169,760  
Investment in real estate ventures, at equity     170,361       194,621  
Deferred costs, net     96,184       96,695  
Intangible assets, net     59,418       64,972  
Other assets     167,225       92,204  
Total assets   $ 3,991,519     $ 3,995,448  
LIABILITIES AND BENEFICIARIES' EQUITY                
Mortgage notes payable, net   $ 324,289     $ 317,216  
Unsecured term loan, net     248,595       248,429  
Unsecured senior notes, net     1,365,909       1,365,183  
Accounts payable and accrued expenses     106,790       107,074  
Distributions payable     32,493       32,456  
Deferred income, gains and rent     29,239       42,593  
Acquired lease intangibles, net     18,573       20,274  
Other liabilities     14,856       15,623  
Total liabilities   $ 2,140,744     $ 2,148,848  
                 
Brandywine Realty Trust's Equity:                
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized
400,000,000; 178,604,473 and 178,285,236 issued and outstanding as of June 30, 2018 and
December 31, 2017, respectively
    1,787       1,784  
Additional paid-in-capital     3,223,072       3,218,564  
Deferred compensation payable in common shares     14,036       12,445  
Common shares in grantor trust, 982,305 and 894,736 as of June 30, 2018 and December 31, 2017,
respectively
    (14,036 )     (12,445 )
Cumulative earnings     717,515       660,174  
Accumulated other comprehensive income     9,221       2,399  
Cumulative distributions     (2,118,230 )     (2,053,741 )
Total Brandywine Realty Trust's equity     1,833,365       1,829,180  
Noncontrolling interests     17,410       17,420  
Total beneficiaries' equity     1,850,775       1,846,600  
Total liabilities and beneficiaries' equity   $ 3,991,519     $ 3,995,448  
                 
                 


BRANDYWINE REALTY TRUST  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(unaudited, in thousands, except share and per share data)  
   
  Three Months Ended June 30,     Six Months Ended June 30,  
  2018     2017     2018     2017  
Revenue                              
Rents $ 107,657     $ 101,557     $ 214,017     $ 204,889  
Tenant reimbursements   18,688       18,038       38,537       36,573  
Termination fees   582       140       1,132       1,813  
Third party management fees, labor reimbursement and leasing   4,913       7,080       12,587       13,565  
Other   1,946       976       3,871       1,871  
Total revenue   133,786       127,791       270,144       258,711  
Operating expenses:                              
Property operating expenses   37,887       37,215       77,219       74,100  
Real estate taxes   12,417       11,078       24,839       22,827  
Third party management expenses   2,243       2,325       6,993       4,772  
Depreciation and amortization   43,717       44,263       87,008       90,155  
General and administrative expenses   7,523       6,659       16,246       15,984  
Provision for impairment   -       327       -       3,057  
Total operating expenses   103,787       101,867       212,305       210,895  
Operating income   29,999       25,924       57,839       47,816  
Other income (expense)                              
Interest income   641       163       1,344       556  
Interest expense   (19,301 )     (20,304 )     (38,834 )     (41,741 )
Interest expense - amortization of deferred financing costs   (627 )     (596 )     (1,254 )     (1,230 )
Equity in income (loss) of Real Estate Ventures   (358 )     1,084       (1,183 )     336  
Net gain (loss) on disposition of real estate   (35 )     1,088       (35 )     8,411  
Net gain on sale of undepreciated real estate   2,837       -       2,859       -  
Net gain on real estate venture transactions   -       -       37,263       14,582  
Net income before income taxes   13,156       7,359       57,999       28,730  
Income tax (provision) benefit   (20 )     339       (158 )     239  
Net income   13,136       7,698       57,841       28,969  
Net income attributable to noncontrolling interests   (130 )     (45 )     (506 )     (214 )
Net income attributable to Brandywine Realty Trust   13,006       7,653       57,335       28,755  
Distribution to preferred shareholders   -       (307 )     -       (2,032 )
Preferred share redemption charge   -       (3,181 )     -       (3,181 )
Nonforfeitable dividends allocated to unvested restricted shareholders   (86 )     (73 )     (200 )     (172 )
Net income attributable to Common Shareholders of Brandywine Realty Trust $ 12,920     $ 4,092     $ 57,135     $ 23,370  
                               
PER SHARE DATA                              
Basic income per common share $ 0.07     $ 0.02     $ 0.32     $ 0.13  
Basic weighted average shares outstanding   178,547,555       175,333,300       178,471,960       175,255,564  
                               
Diluted income per common share $ 0.07     $ 0.02     $ 0.32     $ 0.13  
Diluted weighted average shares outstanding   179,692,336       176,756,598       179,740,690       176,480,380  
                               
                               


BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS
(unaudited, in thousands, except share and per share data)
 
  Three Months Ended June 30,       Six Months Ended June 30,  
  2018     2017       2018     2017  
Reconciliation of Net Income to Funds from Operations:                                
Net income attributable to common shareholders $ 12,920     $ 4,092       $ 57,135     $ 23,370  
Add (deduct):                                
Net income attributable to noncontrolling interests - LP units   109       37         480       201  
Nonforfeitable dividends allocated to unvested restricted shareholders   86       73         200       172  
Net gain on real estate venture transactions   -       -         (37,263 )     (14,582 )
Net (gain) loss on disposition of real estate   35       (1,088 )       35       (8,411 )
Provision for impairment   -       -         -       2,730  
Depreciation and amortization:                                
Real property   35,179       35,948         69,787       69,598  
Leasing costs including acquired intangibles   8,144       8,131         16,450       20,249  
Company's share of unconsolidated real estate ventures   6,732       10,449         13,896       20,689  
Partners' share of consolidated real estate ventures   (54 )     (64 )       (109 )     (123 )
Funds from operations $ 63,151     $ 57,578       $ 120,611     $ 113,893  
Funds from operations allocable to unvested restricted shareholders   (168 )     (151 )       (371 )     (349 )
Funds from operations available to common share and unit holders (FFO) $ 62,983     $ 57,427       $ 120,240     $ 113,544  
                                 
FFO per share - fully diluted $ 0.35     $ 0.32       $ 0.66     $ 0.64  
                                 
Weighted-average shares/units outstanding - fully diluted   181,172,135       178,236,397         181,220,489       177,960,179  
                                 
Distributions paid per common share $ 0.18     $ 0.16       $ 0.36     $ 0.32  
                                 
FFO payout ratio (distributions paid per common share/FFO per diluted share)   51.4 %     50.0 %       54.5 %     50.0 %
                                 
                                 

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – 2nd QUARTER
(unaudited and in thousands)

Of the 93 properties owned by the Company as of June 30, 2018, a total of 81 properties ("Same Store Properties") containing an aggregate of 14.3 million net rentable square feet were owned for the entire three-month periods ended June 30, 2018 and 2017. As of June 30, 2018, five properties were recently completed/acquired, two properties were in development and five properties were in redevelopment. Average occupancy for the Same Store Properties was 92.5% during 2018 and 94.0% during 2017. The following table sets forth revenue and expense information for the Same Store Properties:

    Three Months Ended June 30,  
    2018     2017  
Revenue                
Rents   $ 91,401     $ 91,585  
Tenant reimbursements     16,274       16,668  
Termination fees     582       140  
Other     606       563  
Total revenue     108,863       108,956  
                 
Operating expenses                
Property operating expenses     30,913       30,983  
Real estate taxes     10,985       9,804  
Net operating income   $ 66,965     $ 68,169  
                 
Net operating income - percentage change over prior year     -1.8 %        
                 
Net operating income, excluding net termination fees & other   $ 65,777     $ 67,466  
                 
Net operating income, excluding net termination fees & other - percentage change over prior year     -2.5 %        
                 
Net operating income   $ 66,965     $ 68,169  
Straight line rents & other     (347 )     (2,304 )
Above/below market rent amortization     (414 )     (440 )
Amortization of tenant inducements     319       347  
Non-cash ground rent     22       22  
Cash - Net operating income   $ 66,545     $ 65,794  
                 
Cash - Net operating income - percentage change over prior year     1.1 %        
                 
Cash - Net operating income, excluding net termination fees & other   $ 65,137     $ 64,967  
                 
Cash - Net operating income, excluding net termination fees & other - percentage change over prior year     0.3 %        
                 
    Three Months Ended June 30,  
    2018     2017  
Net income   $ 13,136     $ 7,698  
Add/(deduct):                
Interest income     (641 )     (163 )
Interest expense     19,301       20,304  
Interest expense - amortization of deferred financing costs     627       596  
Equity in (income) loss of real estate ventures     358       (1,084 )
Net (gain) loss on disposition of real estate     35       (1,088 )
Net gain on sale of undepreciated real estate     (2,837 )     -  
Depreciation and amortization     43,717       44,263  
General & administrative expenses     7,523       6,659  
Income tax provision (benefit)     20       (339 )
Provision for impairment     -       327  
Consolidated net operating income     81,239       77,173  
Less: Net operating income of non-same store properties and elimination of non-property specific operations     (14,274 )     (9,004 )
Same store net operating income   $ 66,965     $ 68,169  
                 
                 

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – SIX MONTHS
(unaudited and in thousands)
                      

Of the 93 properties owned by the Company as of June 30, 2018, a total of 81 properties ("Same Store Properties") containing an aggregate of 14.3 million net rentable square feet were owned for the entire six-month periods ended June 30, 2018 and 2017. As of June 30, 2018, five properties were recently completed/acquired, two properties were in development and five properties were in redevelopment. Average occupancy for the Same Store Properties was 92.5% during 2018 and 94.2% during 2017. The following table sets forth revenue and expense information for the Same Store Properties:

    Six Months Ended June 30,  
    2018     2017  
Revenue                
Rents   $ 182,565     $ 184,093  
Tenant reimbursements     33,497       33,112  
Termination fees     1,132       1,336  
Other     927       975  
Total revenue     218,121       219,516  
                 
Operating expenses                
Property operating expenses     63,475       62,074  
Real estate taxes     21,948       19,806  
Net operating income   $ 132,698     $ 137,636  
                 
Net operating income - percentage change over prior year     -3.6 %        
                 
Net operating income, excluding net termination fees & other   $ 130,639     $ 135,325  
                 
Net operating income, excluding net termination fees & other - percentage change over prior year     -3.5 %        
                 
Net operating income   $ 132,698     $ 137,636  
Straight line rents & other     (1,484 )     (4,137 )
Above/below market rent amortization     (866 )     (1,793 )
Amortization of tenant inducements     635       693  
Non-cash ground rent     44       44  
Cash - Net operating income   $ 131,027     $ 132,443  
                 
Cash - Net operating income - percentage change over prior year     -1.1 %        
                 
Cash - Net operating income, excluding net termination fees & other   $ 128,522     $ 129,262  
                 
Cash - Net operating income, excluding net termination fees & other - percentage change over prior year     -0.6 %        
                 
    Six Months Ended June 30,  
    2018     2017  
Net income:   $ 57,841     $ 28,969  
Add/(deduct):                
Interest income     (1,344 )     (556 )
Interest expense     38,834       41,741  
Interest expense - amortization of deferred financing costs     1,254       1,230  
Equity in (income) loss of real estate ventures     1,183       (336 )
Net gain on real estate venture transactions     (37,263 )     (14,582 )
Net (gain) loss on disposition of real estate     35       (8,411 )
Net gain on sale of undepreciated assets     (2,859 )     -  
Depreciation and amortization     87,008       90,155  
General & administrative expenses     16,246       15,984  
Income tax provision (benefit)     158       (239 )
Provision for impairment     -       3,057  
Consolidated net operating income     161,093       157,012  
Less: Net operating income of non-same store properties and elimination of non-property specific operations     (28,395 )     (19,376 )
Same store net operating income   $ 132,698     $ 137,636  
                 

Company / Investor Contact:

Tom Wirth
EVP & CFO
610-832-7434
tom.wirth@bdnreit.com 

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