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Section 1: 10-Q (10-Q)

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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
_____________________________________________________________________________________________
Brandywine Realty Trust
Brandywine Operating Partnership, L.P.
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________________
Registrant’s telephone number, including area code (610) 325-5600
_____________________________________________________________________________________________
Maryland
 
 
 
 
 
 
 
 
(Brandywine Realty Trust)
 
 
 
001-9106
 
 
 
23-2413352
Delaware
 
 
 
 
 
 
 
 
(Brandywine Operating Partnership, L.P.)
 
 
 
000-24407
 
 
 
23-2862640
(State or Other Jurisdiction of Incorporation
or Organization)
 
 
 
(Commission file number)
 
 
 
(I.R.S. Employer Identification Number)
2929 Walnut Street
Suite 1700
Philadelphia, PA 19104
(Address of principal executive offices) (Zip Code)
(610) 325-5600
(Registrant’s telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Shares of Beneficial Interest
 
BDN
 
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Brandywine Realty Trust
Yes
  No 
 
Brandywine Operating Partnership, L.P.
Yes
  No 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Brandywine Realty Trust
Yes
  No 
 
Brandywine Operating Partnership, L.P.
Yes
  No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Brandywine Realty Trust:
Large accelerated filer
Accelerated filer 
Non-accelerated filer 
Smaller reporting company
Emerging growth company 
Brandywine Operating Partnership, L.P.:
Large accelerated filer 
Accelerated filer 
Non-accelerated filer
 
Smaller reporting company 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Brandywine Realty Trust
Yes   
 No
Brandywine Operating Partnership, L.P.
Yes   
 No
A total of 170,573,159 Common Shares of Beneficial Interest, par value $0.01 per share of Brandywine Realty Trust, were outstanding as of July 22, 2020.


Table of Contents

EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2020 of Brandywine Realty Trust (the “Parent Company”) and Brandywine Operating Partnership L.P. (the “Operating Partnership”). The Parent Company is a Maryland real estate investment trust, or REIT, that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company”. In addition, as used in this report, terms such as “we”, “us”, and “our” may refer to the Company, the Parent Company, or the Operating Partnership.
The Parent Company is the sole general partner of the Operating Partnership and, as of June 30, 2020, owned a 99.4% interest in the Operating Partnership. The remaining 0.6% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management.
Management operates the Parent Company and the Operating Partnership as one enterprise. The management of the Parent Company consists of the same members as the management of the Operating Partnership.
As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company's operations on a consolidated basis and how management operates the Company.
The Company believes that combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into a single report will:
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.
There are few differences between the Parent Company and the Operating Partnership, which are reflected in the footnote disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as an interrelated consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time (and contributing the net proceeds of such issuances to the Operating Partnership) and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all the assets of the Company, including the Company's ownership interests in the real estate ventures described below. The Operating Partnership conducts the operations of the Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness (directly and through subsidiaries) and through the issuance of partnership units of the Operating Partnership or equity interests in subsidiaries of the Operating Partnership.
The equity and non-controlling interests in the Parent Company and the Operating Partnership’s equity are the main areas of difference between the consolidated financial statements of the Parent Company and the Operating Partnership. The common units of limited partnership interest in the Operating Partnership are accounted for as partners’ equity in the Operating Partnership’s financial statements while the common units of limited partnership interests held by parties other than the Parent Company are presented as non-controlling interests in the Parent Company’s financial statements. The differences between the Parent Company and the Operating Partnership’s equity relate to the differences in the equity issued at the Parent Company and Operating Partnership levels.
To help investors understand the significant differences between the Parent Company and the Operating Partnership, this report presents the following as separate notes or sections for each of the Parent Company and the Operating Partnership:
Consolidated Financial Statements; and

2

Table of Contents

Notes to the Parent Company’s and Operating Partnership’s Equity.
This report also includes separate Item 4. (Controls and Procedures) disclosures and separate Exhibit 31 and 32 certifications for each of the Parent Company and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that the Parent Company and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. § 1350.
In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and real estate ventures and holds assets and incurs debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.

3

Table of Contents

TABLE OF CONTENTS
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Filing Format
This combined Form 10-Q is being filed separately by Brandywine Realty Trust and Brandywine Operating Partnership, L.P.

4

Table of Contents

PART I - FINANCIAL INFORMATION
Item 1. — Financial Statements


BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share information)
 
June 30,
2020
 
December 31,
2019
ASSETS
 
 
 
Real estate investments:
 
 
 
Operating properties
$
3,650,521

 
$
4,006,459

Accumulated depreciation
(957,189
)
 
(973,318
)
Right of use asset - operating leases, net
21,315

 
21,656

Operating real estate investments, net
2,714,647

 
3,054,797

Construction-in-progress
235,475

 
180,718

Land held for development
112,420

 
96,124

Prepaid leasehold interests in land held for development, net
39,389

 
39,592

Total real estate investments, net
3,101,931

 
3,371,231

Assets held for sale, net
300,483

 
7,349

Cash and cash equivalents
44,819

 
90,499

Accounts receivable, net of allowance of $0 and $284 as of June 30, 2020 and December 31, 2019, respectively
18,823

 
16,363

Accrued rent receivable, net of allowance of $6,844 and $7,691 as of June 30, 2020 and December 31, 2019, respectively
177,124

 
174,144

Investment in Real Estate Ventures
118,558

 
120,294

Deferred costs, net
87,811

 
95,560

Intangible assets, net
55,262

 
84,851

Other assets
117,959

 
115,678

Total assets
$
4,022,770

 
$
4,075,969

LIABILITIES AND BENEFICIARIES' EQUITY
 
 
 
Mortgage notes payable, net
$
89,435

 
$
313,812

Unsecured credit facility
61,000

 

Unsecured term loan, net
248,823

 
248,561

Unsecured senior notes, net
1,581,777

 
1,582,045

Accounts payable and accrued expenses
113,826

 
113,347

Distributions payable
32,747

 
33,815

Deferred income, gains and rent
24,984

 
35,284

Intangible liabilities, net
18,577

 
22,263

Liabilities related to assets held for sale, net
225,993

 

Lease liability - operating leases
22,655

 
22,554

Other liabilities
32,104

 
15,985

Total liabilities
$
2,451,921

 
$
2,387,666

Commitments and contingencies (See Note 14)

 

Brandywine Realty Trust's Equity:
 
 
 
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 170,573,159 and 176,480,095 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
1,707

 
1,766

Additional paid-in-capital
3,135,590

 
3,192,158

Deferred compensation payable in common shares
17,516

 
16,216

Common shares in grantor trust, 1,160,689 and 1,105,542 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
(17,516
)
 
(16,216
)
Cumulative earnings
816,574

 
804,556

Accumulated other comprehensive loss
(9,970
)
 
(2,370
)
Cumulative distributions
(2,383,273
)
 
(2,318,233
)
Total Brandywine Realty Trust's equity
1,560,628

 
1,677,877

Noncontrolling interests
10,221

 
10,426

Total beneficiaries' equity
$
1,570,849

 
$
1,688,303

Total liabilities and beneficiaries' equity
$
4,022,770

 
$
4,075,969

The accompanying notes are an integral part of these consolidated financial statements.

5

Table of Contents

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Revenue
 
 
 
 
 
 
 
Rents
$
132,180

 
$
137,787

 
$
271,384

 
$
275,885

Third party management fees, labor reimbursement and leasing
4,061

 
5,148

 
9,015

 
9,103

Other
596

 
1,216

 
1,526

 
3,059

Total revenue
136,837

 
144,151

 
281,925

 
288,047

Operating expenses
 
 
 
 
 
 
 
Property operating expenses
33,292

 
38,684

 
70,753

 
78,184

Real estate taxes
16,815

 
16,089

 
33,602

 
31,872

Third party management expenses
2,375

 
2,449

 
5,037

 
4,566

Depreciation and amortization
49,743

 
51,667

 
101,781

 
103,111

General and administrative expenses
8,343

 
8,399

 
16,904

 
18,243

Total operating expenses
110,568

 
117,288

 
228,077

 
235,976

Gain on sale of real estate
 
 
 
 
 
 
 
Net gain on disposition of real estate

 

 
2,586

 

Net gain on sale of undepreciated real estate
201

 
250

 
201

 
1,251

Total gain on sale of real estate
201

 
250

 
2,787

 
1,251

Operating income
26,470

 
27,113

 
56,635

 
53,322

Other income (expense):
 
 
 
 
 
 
 
Interest income
445

 
553

 
1,020

 
1,078

Interest expense
(20,191
)
 
(20,516
)
 
(40,200
)
 
(40,873
)
Interest expense - amortization of deferred financing costs
(731
)
 
(666
)
 
(1,480
)
 
(1,332
)
Equity in loss of Real Estate Ventures
(2,203
)
 
(1,491
)
 
(4,094
)
 
(2,849
)
Net gain on real estate venture transactions

 
1,276

 

 
1,535

Net income before income taxes
3,790

 
6,269

 
11,881

 
10,881

Income tax (provision) benefit
230

 
(17
)
 
226

 
(46
)
Net income
4,020

 
6,252

 
12,107

 
10,835

Net income attributable to noncontrolling interests
(24
)
 
(47
)
 
(89
)
 
(107
)
Net income attributable to Brandywine Realty Trust
3,996

 
6,205

 
12,018

 
10,728

Nonforfeitable dividends allocated to unvested restricted shareholders
(93
)
 
(93
)
 
(224
)
 
(212
)
Net income attributable to Common Shareholders of Brandywine Realty Trust
$
3,903

 
$
6,112

 
$
11,794

 
$
10,516

 
 
 
 
 
 
 
 
Basic income per Common Share
$
0.02

 
$
0.03

 
$
0.07

 
$
0.06

 
 
 
 
 
 
 
 
Diluted income per Common Share
$
0.02

 
$
0.03

 
$
0.07

 
$
0.06

 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
170,518,095

 
176,143,206

 
173,294,031

 
176,001,071

Diluted weighted average shares outstanding
170,770,078

 
176,690,824

 
173,605,948

 
176,578,140

 
The accompanying notes are an integral part of these consolidated financial statements.

6

Table of Contents

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Net income
$
4,020

 
$
6,252

 
$
12,107

 
$
10,835

Comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized gain (loss) on derivative financial instruments
38

 
(4,934
)
 
(8,019
)
 
(7,623
)
Amortization of interest rate contracts (1)
188

 
188

 
376

 
394

Total comprehensive income (loss)
226

 
(4,746
)
 
(7,643
)
 
(7,229
)
Comprehensive income
4,246

 
1,506

 
4,464

 
3,606

Comprehensive income attributable to noncontrolling interest
(25
)
 
(21
)
 
(46
)
 
(67
)
Comprehensive income attributable to Brandywine Realty Trust
$
4,221

 
$
1,485

 
$
4,418

 
$
3,539

(1) 
Amounts reclassified from comprehensive income to interest expense within the Consolidated Statements of Operations.
The accompanying notes are an integral part of these consolidated financial statements.

7

Table of Contents

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF BENEFICIARIES’ EQUITY
(unaudited, in thousands, except number of 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
 
Noncontrolling Interests
 
Total
BALANCE, beginning of period
176,480,095

 
1,105,542

 
$
1,766

 
$
3,192,158

 
$
16,216

 
$
(16,216
)
 
$
804,556

 
$
(2,370
)
 
$
(2,318,233
)
 
$
10,426

 
$
1,688,303

Net income
 
 
 
 
 
 
 
 
 
 
 
 
8,022

 
 
 
 
 
65

 
8,087

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,825
)
 
 
 
(44
)
 
(7,869
)
Repurchase and retirement of Common Shares of Beneficial Interest
(5,644,200
)
 
 
 
(57
)
 
(53,801
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(53,858
)
Share-based compensation activity
142,468

 
50,967

 
1

 
2,030

 
 
 
 
 
 
 
 
 
 
 
 
 
2,031

Share Issuance from/(to) Deferred Compensation Plan
(12,376
)
 
(38,726
)
 
 
 
(193
)
 
796

 
(796
)
 
 
 
 
 
 
 
 
 
(193
)
Distributions declared ($0.19 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(32,500
)
 
(187
)
 
(32,687
)
BALANCE, March 31, 2020
170,965,987

 
1,117,783

 
$
1,710

 
$
3,140,194

 
$
17,012

 
$
(17,012
)
 
$
812,578

 
$
(10,195
)
 
$
(2,350,733
)
 
$
10,260

 
$
1,603,814

Net income
 
 
 
 
 
 
 
 
 
 
 
 
3,996

 
 
 
 
 
24

 
4,020

Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
225

 
 
 
1

 
226

Repurchase and retirement of Common Shares of Beneficial Interest
(604,283
)
 
 
 
(5
)
 
(6,136
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,141
)
Share-based compensation activity
166,628

 
 
 
2

 
1,666

 
 
 
 
 
 
 
 
 
 
 
 
 
1,668

Share Issuance from/(to) Deferred Compensation Plan
44,827

 
42,906

 
 
 
(11
)
 
504

 
(504
)
 
 
 
 
 
 
 
 
 
(11
)
Reallocation of Noncontrolling interest
 
 
 
 
 
 
(123
)
 
 
 
 
 
 
 
 
 
 
 
123

 

Distributions declared ($0.19 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(32,540
)
 
(187
)
 
(32,727
)
BALANCE, June 30, 2020
170,573,159

 
1,160,689

 
$
1,707

 
$
3,135,590

 
$
17,516

 
$
(17,516
)
 
$
816,574

 
$
(9,970
)
 
$
(2,383,273
)
 
$
10,221

 
$
1,570,849


The accompanying notes are an integral part of these consolidated financial statements.

8

Table of Contents

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENT OF BENEFICIARIES’ EQUITY
(unaudited, in thousands, except number of 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
 
Noncontrolling Interests
 
Total
BALANCE, beginning of period
176,873,324

 
977,120

 
$
1,770

 
$
3,200,312

 
$
14,021

 
$
(14,021
)
 
$
775,625

 
$
5,029

 
$
(2,183,909
)
 
$
12,201

 
$
1,811,028

Cumulative effect of accounting change
 
 
 
 
 
 
 
 
 
 
 
 
(5,336
)
 
 
 
 
 
 
 
(5,336
)
Net income
 
 
 
 
 
 
 
 
 
 
 
 
4,523

 
 
 
 
 
60

 
4,583

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,469
)
 
 
 
(14
)
 
(2,483
)
Repurchase and retirement of Common Shares of Beneficial Interest
(1,337,169
)
 
 
 
(13
)
 
(17,268
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(17,281
)
Issuance of partnership interest in consolidated real estate ventures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22

 
22

Share-based compensation activity
465,883

 
41,342

 
4

 
3,673

 
 
 
 
 
 
 
 
 
 
 
 
 
3,677

Share Issuance from/(to) Deferred Compensation Plan
(458
)
 
(5,920
)
 
 
 
 
 
619

 
(619
)
 
 
 
 
 
 
 
 
 

Reallocation of Noncontrolling interest
 
 
 
 
 
 
57

 
 
 
 
 
 
 
 
 
 
 
(57
)
 

Distributions declared ($0.19 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(33,560
)
 
(187
)
 
(33,747
)
BALANCE, March 31, 2019
176,001,580

 
1,012,542

 
$
1,761

 
$
3,186,774

 
$
14,640

 
$
(14,640
)
 
$
774,812

 
$
2,560

 
$
(2,217,469
)
 
$
12,025

 
$
1,760,463

Net income
 
 
 
 
 
 
 
 
 
 
 
 
6,205

 
 
 
 
 
47

 
6,252

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,720
)
 
 
 
(26
)
 
(4,746
)
Issuance of partnership interest in consolidated real estate ventures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3

 
3

Redemption of LP Units
1,245

 
 
 
 
 
16

 
 
 
 
 
 
 
 
 
 
 
(16
)
 

Share-based compensation activity
94,150

 
 
 
2

 
1,449

 
 
 
 
 
 
 
 
 
 
 
 
 
1,451

Share Issuance from/(to) Deferred Compensation Plan
100,908

 
100,908

 
 
 
 
 
1,599

 
(1,599
)
 
 
 
 
 
 
 
 
 

Distributions declared ($0.19 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(33,571
)
 
(187
)
 
(33,758
)
BALANCE, June 30, 2019
176,197,883

 
1,113,450

 
$
1,763

 
$
3,188,239

 
$
16,239

 
$
(16,239
)
 
$
781,017

 
$
(2,160
)
 
$
(2,251,040
)
 
$
11,846

 
$
1,729,665


The accompanying notes are an integral part of these consolidated financial statements.

9

Table of Contents

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands) 
 
Six Months Ended June 30,
 
2020
 
2019
Cash flows from operating activities:
 
 
 
Net income
$
12,107

 
$
10,835

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
101,781

 
103,111

Amortization of deferred financing costs
1,480

 
1,332

Amortization of debt discount/(premium), net
(788
)
 
351

Amortization of stock compensation costs
4,462

 
5,135

Straight-line rent income
(4,416
)
 
(6,425
)
Amortization of acquired above (below) market leases, net
(2,617
)
 
(3,494
)
Ground rent expense
729

 
737

Provision for doubtful accounts
345

 
(24
)
Net gain on real estate venture transactions

 
(1,535
)
Net gain on sale of interests in real estate
(2,787
)
 
(1,251
)
Loss from Real Estate Ventures, net of distributions
4,092

 
3,857

Income tax provision (benefit)
(226
)
 
46

Changes in assets and liabilities:
 
 
 
Accounts receivable
(4,349
)
 
(665
)
Other assets
(3,315
)
 
(7,714
)
Accounts payable and accrued expenses
(4,215
)
 
(12,496
)
Deferred income, gains and rent
(5,418
)
 
(5,033
)
Other liabilities
3,455

 
(1,311
)
Net cash provided by operating activities
100,320

 
85,456

Cash flows from investing activities:
 
 
 
Acquisition of properties
(11,432
)
 

Proceeds from the sale of properties
21,250

 
5,523

Proceeds from real estate venture sales

 
259

Proceeds from repayment of mortgage notes receivable

 
3,341

Capital expenditures for tenant improvements
(27,834
)
 
(36,046
)
Capital expenditures for redevelopments
(14,686
)
 
(18,436
)
Capital expenditures for developments
(33,566
)
 
(39,155
)
Advances for the purchase of tenant assets, net of repayments
1,563

 
(627
)
Investment in unconsolidated Real Estate Ventures
(199
)
 
(182
)
Deposits for real estate

 
2,053

Capital distributions from Real Estate Ventures
3,575

 
33,817

Leasing costs paid
(13,998
)
 
(9,440
)
Net cash used in investing activities
(75,327
)
 
(58,893
)
Cash flows from financing activities:
 
 
 
Repayments of mortgage notes payable
(3,909
)
 
(3,761
)
Proceeds from credit facility borrowings
132,500

 
260,500

Repayments of credit facility borrowings
(71,500
)
 
(189,500
)
Proceeds from the exercise of stock options
47

 
800

Shares used for employee taxes upon vesting of share awards
(1,346
)
 
(1,554
)
Partner contributions to consolidated real estate venture

 
25

Repurchase and retirement of common shares
(60,000
)
 
(17,282
)
Distributions paid to shareholders
(66,107
)
 
(66,649
)
Distributions to noncontrolling interest
(374
)
 
(373
)
Net cash used in financing activities
(70,689
)
 
(17,794
)
Increase/(Decrease) in cash and cash equivalents and restricted cash
(45,696
)
 
8,769

Cash and cash equivalents and restricted cash at beginning of year
91,170

 
23,211

Cash and cash equivalents and restricted cash at end of period
$
45,474

 
$
31,980

 
 
 
 
Reconciliation of cash and cash equivalents and restricted cash:
 
 
 
Cash and cash equivalents, beginning of period
$
90,499

 
$
22,842

Restricted cash, beginning of period
671

 
369

Cash and cash equivalents and restricted cash, beginning of period
$
91,170

 
$
23,211

Cash and cash equivalents, end of period
$
44,819

 
$
31,573

Restricted cash, end of period
655

 
407

Cash and cash equivalents and restricted cash, end of period
$
45,474

 
$
31,980

Supplemental disclosure:
 
 
 
Cash paid for interest, net of capitalized interest during the six months ended June 30, 2020 and 2019 of $2,341 and $1,465, respectively
$
42,994

 
$
41,842

Cash paid for income taxes
483

 
938

Supplemental disclosure of non-cash activity:
 
 
 
Dividends and distributions declared but not paid
32,747

 
34,113

Change in investment in real estate ventures as a result of dispositions

 
1,276

Change in capital expenditures financed through accounts payable at period end
5,995

 
(15,351
)
Change in capital expenditures financed through retention payable at period end
222

 
(3,643
)
The accompanying notes are an integral part of these consolidated financial statements.

10

Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except unit and per unit information)
 
June 30,
2020
 
December 31,
2019
ASSETS