10-Q 1 bdn630201510-qq2x2015.htm 10-Q BDN 6.30.2015 10-Q (Q2-2015)


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 10-Q
_________________________
(Mark One)
þ
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended June 30, 2015
or
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from                      to                     
Commission file number
001-9106 (Brandywine Realty Trust)
000-24407 (Brandywine Operating Partnership, L.P.)
_________________________
Brandywine Realty Trust
Brandywine Operating Partnership, L.P.
(Exact name of registrant as specified in its charter)
_________________________

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)
Registrant’s telephone number, including area code (610) 325-5600
_________________________
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 þ No o
Brandywine Operating Partnership, L.P.
 
Yes þ No o


1




Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Brandywine Realty Trust
 
Yes þ No o
Brandywine Operating Partnership, L.P.
 
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Brandywine Realty Trust:
Large accelerated filer þ
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company o
Brandywine Operating Partnership, L.P.:
Large accelerated filer o
 
Accelerated filer o
 
Non-accelerated filer þ
 
Smaller reporting company o
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 o No þ
Brandywine Operating Partnership, L.P.
 
Yes o No þ
A total of 179,898,005 Common Shares of Beneficial Interest, par value $0.01 per share of Brandywine Realty Trust, were outstanding as of July 24, 2015.



2




EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2015 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, 2015, owned a 99.1% interest in the Operating Partnership. The remaining 0.9% 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 result in the following benefits:
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 guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s Real Estate Ventures. 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.


3




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
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 debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.


4




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


5




PART I - FINANCIAL INFORMATION


Item 1.
— Financial Statements
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)
 
June 30,
2015
 
December 31,
2014
 
(unaudited)
 
 
ASSETS
 
 
 
Real estate investments:
 
 
 
Operating properties
$
4,700,839

 
$
4,603,692

Accumulated depreciation
(1,088,681
)
 
(1,067,829
)
Operating real estate investments, net
3,612,158

 
3,535,863

Construction-in-progress
263,772

 
201,360

Land inventory
119,995

 
90,603

Total real estate investments, net
3,995,925

 
3,827,826

Cash and cash equivalents
123,982

 
257,502

Accounts receivable, net
22,294

 
18,757

Accrued rent receivable, net
138,905

 
134,051

Assets held for sale, net

 
18,295

Investment in Real Estate Ventures, at equity
201,034

 
225,004

Deferred costs, net
126,567

 
125,224

Intangible assets, net
137,290

 
99,403

Mortgage note receivable

 
88,000

Other assets
68,313

 
65,111

Total assets
$
4,814,310

 
$
4,859,173

LIABILITIES AND BENEFICIARIES’ EQUITY
 
 
 
Mortgage notes payable
$
646,512

 
$
654,590

Unsecured term loans
200,000

 
200,000

Unsecured senior notes, net of discounts
1,597,267

 
1,596,718

Accounts payable and accrued expenses
98,897

 
96,046

Distributions payable
29,021

 
28,871

Deferred income, gains and rent
54,595

 
59,452

Acquired lease intangibles, net
31,565

 
26,010

Other liabilities
40,647

 
37,558

Liabilities related to assets held for sale

 
602

Total liabilities
2,698,504

 
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; 179,898,121 and 179,293,160 issued and outstanding in 2015 and 2014, respectively
1,799

 
1,793

Additional paid-in capital
3,317,751

 
3,314,693

Deferred compensation payable in common shares
11,996

 
6,219

Common shares in grantor trust, 748,045 in 2015 and 384,536 in 2014
(11,996
)
 
(6,219
)
Cumulative earnings
541,079

 
529,487

Accumulated other comprehensive loss
(5,651
)
 
(4,607
)
Cumulative distributions
(1,758,294
)
 
(1,700,579
)
Total Brandywine Realty Trust’s equity
2,096,724

 
2,140,827

Non-controlling interests
19,082

 
18,499

Total beneficiaries' equity
2,115,806

 
2,159,326

Total liabilities and beneficiaries' equity
$
4,814,310

 
$
4,859,173


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


6




BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)
 
Three-month periods ended
 
Six-month periods ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Revenue:
 
 
 
 
 
 
 
Rents
$
119,127

 
$
121,622

 
$
239,537

 
$
243,293

Tenant reimbursements
19,799

 
20,502

 
42,453

 
43,962

Termination fees
828

 
3,349

 
1,464

 
5,552

Third party management fees, labor reimbursement and leasing
4,659

 
4,187

 
8,531

 
8,337

Other
1,235

 
840

 
4,069

 
1,470

Total revenue
145,648

 
150,500

 
296,054

 
302,614

Operating expenses:
 
 
 
 
 
 
 
Property operating expenses
42,704

 
43,136

 
89,281

 
89,937

Real estate taxes
11,968

 
12,841

 
24,513

 
26,298

Third party management expenses
1,677

 
1,730

 
3,253

 
3,446

Depreciation and amortization
50,930

 
52,587

 
102,041

 
105,157

General and administrative expenses
6,791

 
6,005

 
15,427

 
14,186

Total operating expenses
114,070

 
116,299

 
234,515

 
239,024

Operating income
31,578

 
34,201

 
61,539

 
63,590

Other income (expense):
 
 
 
 
 
 
 
Interest income
313

 
385

 
1,063

 
770

Interest expense
(27,895
)
 
(31,512
)
 
(56,071
)
 
(63,356
)
Interest expense — amortization of deferred financing costs
(1,288
)
 
(1,197
)
 
(2,367
)
 
(2,386
)
Interest expense — financing obligation
(324
)
 
(316
)
 
(610
)
 
(588
)
Equity in loss of Real Estate Ventures
(873
)
 
(489
)
 
(742
)
 
(247
)
Net gain on disposition of real estate
1,571

 

 
10,590

 

Gain (loss) on sale of undepreciated real estate

 
(3
)
 

 
1,184

Net gain from remeasurement of investments in real estate ventures
758

 
458

 
758

 
458

Loss on real estate venture transactions

 
(282
)
 

 
(417
)
Provision for impairment on assets held for sale/sold
(782
)
 

 
(2,508
)
 

Income (Loss) from continuing operations
3,058

 
1,245

 
11,652

 
(992
)
Discontinued operations:
 
 
 
 
 
 
 
Income from discontinued operations

 
26

 

 
18

Net gain on disposition of discontinued operations

 
903

 

 
903

Total discontinued operations

 
929

 

 
921

Net income (loss)
3,058

 
2,174

 
11,652

 
(71
)
Net loss from discontinued operations attributable to non-controlling interests — LP units

 
(10
)
 

 
(10
)
Net loss attributable to non-controlling interest — partners' share of consolidated real estate ventures
5

 
24

 
5

 
12

Net (income) loss attributable to non-controlling interests — LP units
(7
)
 
5

 
(65
)
 
49

Net (income) loss attributable to non-controlling interests
(2
)
 
19

 
(60
)
 
51

Net income (loss) attributable to Brandywine Realty Trust
3,056

 
2,193

 
11,592

 
(20
)
Distribution to Preferred Shares
(1,725
)
 
(1,725
)
 
(3,450
)
 
(3,450
)
Nonforfeitable dividends allocated to unvested restricted shareholders
(76
)
 
(83
)
 
(177
)
 
(186
)
Net income (loss) attributable to Common Shareholders of Brandywine Realty Trust
$
1,255

 
$
385

 
$
7,965

 
$
(3,656
)
Basic income (loss) per Common Share:
 
 
 
 
 
 
 
Continuing operations
$
0.01

 
$

 
$
0.04

 
$
(0.03
)
Discontinued operations

 

 

 
0.01

 
$
0.01

 
$

 
$
0.04

 
$
(0.02
)
Diluted income (loss) per Common Share:
 
 
 
 
 
 
 
Continuing operations
$
0.01

 
$

 
$
0.04

 
$
(0.03
)
Discontinued operations

 

 

 
0.01

 
$
0.01

 
$

 
$
0.04

 
$
(0.02
)
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
179,860,284

 
157,037,348

 
179,712,428

 
156,916,356

Diluted weighted average shares outstanding
180,538,887

 
157,037,348

 
180,599,265

 
156,916,356

Net income attributable to Brandywine Realty Trust
 
 
 
 
 
 
 
Total continuing operations
$
3,056

 
$
1,274

 
$
11,592

 
$
(931
)
Total discontinued operations

 
919

 

 
911

Net income (loss)
$
3,056

 
$
2,193

 
$
11,592

 
$
(20
)

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


7




BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)

 
Three-month periods ended
 
Six-month periods ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Net income (loss)
$
3,058

 
$
2,174

 
$
11,652

 
$
(71
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized gain (loss) on derivative financial instruments
1,494

 
(2,285
)
 
(1,169
)
 
(3,265
)
Reclassification of realized losses on derivative financial instruments to operations, net (1)
58

 
60

 
116

 
120

     Total other comprehensive gain (loss)
1,552

 
(2,225
)
 
(1,053
)
 
(3,145
)
Comprehensive income (loss)
4,610

 
(51
)
 
10,599

 
(3,216
)
Comprehensive (income) loss attributable to non-controlling interest
(15
)
 
44

 
(51
)
 
86

Comprehensive income (loss) attributable to Brandywine Realty Trust
$
4,595

 
$
(7
)
 
$
10,548

 
$
(3,130
)
(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.




8




BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF BENEFICIARIES’ EQUITY
For the six-month period ended June 30, 2015
(unaudited, in thousands, except number of shares)

 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,592

 
 
 
 
 
60

 
11,652

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,044
)
 
 
 
(9
)
 
(1,053
)
Issuance of partnership interest in joint venture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,025

 
1,025

Bonus share issuance
 
 
 
 
8,447

 
 
 
 
 
125

 
 
 
 
 
 
 
 
 
 
 
 
 
125

Equity issuance costs
 
 
 
 
 
 
 
 
 
 
(48
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(48
)
Share-based compensation activity
 
 
 
 
509,675

 
280,011

 
6

 
2,949

 
 
 
 
 
 
 
 
 
 
 
 
 
2,955

Share issuance from/to Deferred Compensation Plan
 
 
 
 
86,839

 
83,498

 


 


 
5,777

 
(5,777
)
 
 
 
 
 
 
 
 
 

Adjustment to non-controlling interest
 
 
 
 
 
 
 
 
 
 
32

 
 
 
 
 
 
 
 
 
 
 
(32
)
 

Preferred Share distributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,450
)
 
 
 
(3,450
)
Distributions declared ($0.30 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(54,265
)
 
(461
)
 
(54,726
)
BALANCE,
June 30, 2015
4,000,000

 
$
40

 
179,898,121

 
748,045

 
$
1,799

 
$
3,317,751

 
$
11,996

 
$
(11,996
)
 
$
541,079

 
$
(5,651
)
 
$
(1,758,294
)
 
$
19,082

 
$
2,115,806


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


9





BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENT OF BENEFICIARIES’ EQUITY
For the six-month period ended June 30, 2014
(unaudited, in thousands, except number of shares)

 
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20
)
 
 
 
 
 
(51
)
 
(71
)
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,110
)
 
 
 
(35
)
 
(3,145
)
Equity issuance costs
 
 
 
 
 
 
 
 
 
 
(60
)
 
 
 
 
 
 
 
 
 
 
 
 
 
(60
)
Share-based compensation activity
 
 
 
 
279,913

 


 
5

 
3,612

 
 
 
 
 
12

 
 
 
 
 
 
 
3,629

Share issuance from/to Deferred Compensation Plan
 
 
 
 
79,077

 
74,808

 
 
 
(90
)
 
896

 
(896
)
 
 
 
 
 
 
 
 
 
(90
)
Adjustment to non-controlling interest
 
 
 
 
 
 
 
 
 
 
12

 
 
 
 
 
 
 
 
 
 
 
(12
)
 

Preferred Share distributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,450
)
 
 
 
(3,450
)
Distributions declared ($0.30 per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(47,276
)
 
(530
)
 
(47,806
)
BALANCE,
June 30, 2014
4,000,000

 
$
40

 
157,090,983

 
387,088

 
$
1,571

 
$
2,975,070

 
$
6,303

 
$
(6,303
)
 
$
522,520

 
$
(6,105
)
 
$
(1,643,241
)
 
$
20,587

 
$
1,870,442


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


10




BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Six-month periods ended
 
June 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income (loss)
$
11,652

 
$
(71
)
Adjustments to reconcile net income (loss) to net cash from operating activities:
 
 
 
Depreciation and amortization
102,041

 
105,157

Amortization of deferred financing costs
2,367

 
2,386

Amortization of debt discount/(premium), net
(318
)
 
(324
)
Amortization of stock compensation costs
3,568

 
3,752

Shares used for employee taxes upon vesting of share awards
(2,056
)
 
(1,266
)
Straight-line rent income
(11,483
)
 
(7,183
)
Amortization of acquired above (below) market leases, net
(2,633
)
 
(3,698
)
Straight-line ground rent expense
44

 
44

Provision for doubtful accounts
704

 
1,272

Loss on real estate venture transactions

 
417

Net gain on sale of interests in real estate
(10,590
)
 
(2,087
)
Net gain from remeasurement of investment in a real estate venture
(758
)
 
(458
)
Provision for impairment on assets held for sale/sold
2,508

 

Real Estate Venture (income) loss and cash distributions
1,197

 
558

Deferred financing obligation
(612
)
 
(590
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
(390
)
 
(6,328
)
Other assets
(1,313
)
 
1,462

Accounts payable and accrued expenses
(2,261
)
 
(2,815
)
Deferred income, gains and rent
(3,991
)
 
(116
)
Other liabilities
941

 
129

Net cash from operating activities
88,617

 
90,241

Cash flows from investing activities:
 
 
 
Acquisition of properties
(120,379
)
 
(12,405
)
Acquisition of property - 1031 exchange funds applied
(62,812
)
 

Sale of properties
80,268

 
40,149

Sale of property - 1031 exchange funds held in escrow
62,800

 

Proceeds from repayment of mortgage notes receivable
88,000

 
2,800

Capital expenditures for tenant improvements
(39,693
)
 
(58,035
)
Capital expenditures for redevelopments
(21,844
)
 
(4,773
)
Capital expenditures for developments
(83,628
)
 
(19,270
)
Advances for purchase of tenant assets, net of repayments
(3,003
)
 
16

Investment in unconsolidated Real Estate Ventures
(49,139
)
 
(3,095
)
Deposits for real estate
(2,935
)
 

Escrowed cash
2,113

 
1,758

Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income
5,774

 
5,329

Leasing costs
(10,892
)
 
(13,862
)
Net cash used in investing activities
(155,370
)
 
(61,388
)
Cash flows from financing activities:
 
 
 
Repayments of mortgage notes payable
(7,046
)
 
(6,647
)
Debt financing costs paid
(2,941
)
 
(35
)
Proceeds from the exercise of stock options
127

 
709

Partner contribution to consolidated real estate venture
1,025

 

Distributions paid to shareholders
(57,471
)
 
(50,710
)
Distributions to noncontrolling interest
(461
)
 
(541
)
Net cash used in financing activities
(66,767
)
 
(57,224
)
Decrease in cash and cash equivalents
(133,520
)
 
(28,371
)
Cash and cash equivalents at beginning of period
257,502

 
263,207

Cash and cash equivalents at end of period
$
123,982

 
$
234,836

 
 
 
 
Supplemental disclosure:
 
 
 
Cash paid for interest, net of capitalized interest during the six months ended June 30, 2015 and 2014 of $5,623 and $2,726, respectively
$
63,239

 
$
66,869



11




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 property acquisition
67,261

 

Change in receivable from settlement of acquisitions

 
619

Change in other liabilities from contingent consideration related to a property acquisition
1,585

 

Change in operating real estate from contingent consideration related to a property acquisition
(1,585
)
 

Change in capital expenditures financed through accounts payable at period end
(4,142
)
 
(639
)
Change in capital expenditures financed through retention payable at period end
5,415

 
1,188

Change in unfunded tenant allowance

 
(193
)
The accompanying notes are an integral part of these consolidated financial statements.


12





BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit and per unit information)
 
June 30,
2015
 
December 31,
2014
 
(unaudited)
 
 
ASSETS
 
 
 
Real estate investments:
 
 
 
Operating properties
$
4,700,839

 
$
4,603,692

Accumulated depreciation
(1,088,681
)
 
(1,067,829
)
Operating real estate investments, net
3,612,158

 
3,535,863

Construction-in-progress
263,772

 
201,360

Land inventory
119,995

 
90,603

Total real estate investments, net
3,995,925

 
3,827,826

Cash and cash equivalents
123,982

 
257,502

Accounts receivable, net
22,294

 
18,757

Accrued rent receivable, net
138,905

 
134,051

Assets held for sale, net

 
18,295

Investment in Real Estate Ventures, at equity
201,034

 
225,004

Deferred costs, net
126,567

 
125,224

Intangible assets, net
137,290

 
99,403

Mortgage note receivable

 
88,000

Other assets
68,313

 
65,111

Total assets
$
4,814,310

 
$
4,859,173

LIABILITIES AND PARTNERS' EQUITY
 
 
 
Mortgage notes payable
$
646,512

 
$
654,590

Unsecured term loans
200,000

 
200,000

Unsecured senior notes, net of discounts
1,597,267

 
1,596,718

Accounts payable and accrued expenses
98,897

 
96,046

Distributions payable
29,021

 
28,871

Deferred income, gains and rent
54,595

 
59,452

Acquired lease intangibles, net
31,565

 
26,010

Other liabilities
40,647

 
37,558

Liabilities related to assets held for sale

 
602

Total liabilities
2,698,504

 
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
22,727

 
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, 179,898,121 and 179,293,160 units issued and outstanding in 2015 and 2014, respectively
2,000,257

 
2,041,902

Accumulated other comprehensive loss
(6,058
)
 
(5,007
)
Total Brandywine Operating Partnership, L.P.’s equity
2,091,049

 
2,133,745

Non-controlling interest - consolidated real estate ventures
2,030

 
1,010

Total partners’ equity
2,093,079

 
2,134,755

 
 
 
 
Total liabilities and partners’ equity
$
4,814,310

 
$
4,859,173

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




13




BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except unit and per unit information)
 
Three-month periods ended
 
Six-month periods ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Revenue:
 
 
 
 
 
 
 
Rents
$
119,127

 
$
121,622

 
$
239,537

 
$
243,293

Tenant reimbursements
19,799

 
20,502

 
42,453

 
43,962

Termination fees
828

 
3,349

 
1,464

 
5,552

Third party management fees, labor reimbursement and leasing
4,659

 
4,187

 
8,531

 
8,337

Other
1,235

 
840

 
4,069

 
1,470

Total revenue
145,648

 
150,500

 
296,054

 
302,614

Operating expenses:
 
 
 
 
 
 
 
Property operating expenses
42,704

 
43,136

 
89,281

 
89,937

Real estate taxes
11,968

 
12,841

 
24,513

 
26,298

Third party management expenses
1,677

 
1,730

 
3,253

 
3,446

Depreciation and amortization
50,930

 
52,587

 
102,041

 
105,157

General & administrative expenses
6,791

 
6,005

 
15,427

 
14,186

Total operating expenses
114,070

 
116,299

 
234,515

 
239,024

Operating income
31,578

 
34,201

 
61,539

 
63,590

Other income (expense):
 
 
 
 
 
 
 
Interest income
313

 
385

 
1,063

 
770

Interest expense
(27,895
)
 
(31,512
)
 
(56,071
)
 
(63,356
)
Interest expense — amortization of deferred financing costs
(1,288
)
 
(1,197
)
 
(2,367
)
 
(2,386
)
Interest expense — financing obligation
(324
)
 
(316
)
 
(610
)
 
(588
)
Equity in loss of Real Estate Ventures
(873
)
 
(489
)
 
(742
)
 
(247
)
Net gain on disposition of real estate
1,571

 

 
10,590

 

Net gain (loss) on sale of undepreciated real estate

 
(3
)
 

 
1,184

Net gain from remeasurement of investments in real estate ventures
758

 
458

 
758

 
458

Loss on real estate venture transactions

 
(282
)
 

 
(417
)
Provision for impairment on assets held for sale/sold
(782
)
 

 
(2,508
)
 

Income (Loss) from continuing operations
3,058

 
1,245

 
11,652

 
(992
)
Discontinued operations:
 
 
 
 
 
 
 
Income from discontinued operations

 
26

 

 
18

Net gain on disposition of discontinued operations

 
903

 

 
903

Total discontinued operations

 
929

 

 
921

Net income (loss)
3,058

 
2,174

 
11,652

 
(71
)
Net loss attributable to non-controlling interests
5

 
24

 
5

 
12

Net income (loss) attributable to Brandywine Operating Partnership
3,063

 
2,198

 
11,657

 
(59
)
Distribution to Preferred Units
(1,725
)
 
(1,725
)
 
(3,450
)
 
(3,450
)
Amount allocated to unvested restricted unitholders
(76
)
 
(83
)
 
(177
)
 
(186
)
Net income (loss) attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P.
$
1,262

 
$
390

 
$
8,030

 
$
(3,695
)
Basic income (loss) per Common Partnership Unit:
 
 
 
 
 
 
 
Continuing operations
$
0.01

 
$

 
$
0.04

 
$
(0.03
)
Discontinued operations

 

 

 
0.01

 
$
0.01

 
$

 
$
0.04

 
$
(0.02
)
Diluted income (loss) per Common Partnership Unit:
 
 
 
 
 
 
 
Continuing operations
$
0.01

 
$

 
$
0.04

 
$
(0.03
)
Discontinued operations

 

 

 
0.01

 
$
0.01

 
$

 
$
0.04

 
$
(0.02
)
Basic weighted average common partnership units outstanding
181,395,386

 
158,801,087

 
181,247,530

 
158,680,095

Diluted weighted average common partnership units outstanding
182,073,989

 
158,801,087

 
182,134,367

 
158,680,095

Net income (loss) attributable to Brandywine Operating Partnership, L.P.
 
 
 
 
 
 
 
Total continuing operations
$
3,063

 
$
1,269

 
$
11,657

 
$
(980
)
Total discontinued operations

 
929

 

 
921

Net income (loss)
$
3,063

 
$
2,198

 
$
11,657

 
$
(59
)
The accompanying notes are an integral part of these consolidated financial statements.


14




BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)

 
Three-month periods ended
 
Six-month periods ended
 
June 30,
 
June 30,
 
2015
 
2014
 
2015
 
2014
Net income (loss)
$
3,058

 
$
2,174

 
$
11,652

 
$
(71
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized gain (loss) on derivative financial instruments
1,494

 
(2,285
)
 
(1,169
)
 
(3,265
)
Reclassification of realized losses on derivative financial instruments to operations, net (1)
58

 
60

 
116

 
120

Total other comprehensive income (loss)
1,552

 
(2,225
)
 
(1,053
)
 
(3,145
)
Comprehensive income (loss) attributable to Brandywine Operating Partnership, L.P.
$
4,610

 
$
(51
)
 
$
10,599

 
$
(3,216
)
(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.




15




BRANDYWINE OPERATING PARTNERSHIP L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Six-month periods ended
 
June 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income (loss)
$
11,652

 
$
(71
)
Adjustments to reconcile net income (loss) to net cash from operating activities:
 
 
 
Depreciation and amortization
102,041

 
105,157

Amortization of deferred financing costs
2,367

 
2,386

Amortization of debt discount/(premium), net
(318
)
 
(324
)
Amortization of stock compensation costs
3,568

 
3,752

Shares used for employee taxes upon vesting of share awards
(2,056
)
 
(1,266
)
Straight-line rent income
(11,483
)
 
(7,183
)
Amortization of acquired above (below) market leases, net
(2,633
)
 
(3,698
)
Straight-line ground rent expense
44

 
44

Provision for doubtful accounts
704

 
1,272

Loss on real estate venture transactions

 
417

Net gain on sale of interests in real estate
(10,590
)
 
(2,087
)
Loss on real estate venture formation


 


Net gain on remeasurement of investment in a real estate venture
(758
)
 
(458
)
Provision for impairment on assets held for sale
2,508

 

Real Estate Venture (income) loss and cash distributions
1,197

 
558

Deferred financing obligation
(612
)
 
(590
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
(390
)
 
(6,328
)
Other assets
(1,313
)
 
1,462

Accounts payable and accrued expenses
(2,261
)
 
(2,815
)
Deferred income, gains and rent
(3,991
)
 
(116
)
Other liabilities
941

 
129

Net cash from operating activities
88,617

 
90,241

Cash flows from investing activities:
 
 
 
Acquisition of properties
(120,379
)
 
(12,405
)
Acquisition of property - 1031 exchange funds applied
(62,812
)
 

Sale of properties
80,268

 
40,149

Sale of property - 1031 exchange funds held in escrow
62,800

 

Proceeds from repayment of mortgage notes receivable
88,000

 
2,800

Capital expenditures for tenant improvements
(39,693
)
 
(58,035
)
Capital expenditures for redevelopments
(21,844
)
 
(4,773
)
Capital expenditures for developments
(83,628
)
 
(19,270
)
Advances for purchase of tenant assets, net of repayments
(3,003
)
 
16

Investment in unconsolidated Real Estate Ventures
(49,139
)
 
(3,095
)
Deposits for real estate
(2,935
)
 

Escrowed cash
2,113

 
1,758

Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income
5,774

 
5,329

Leasing costs
(10,892
)
 
(13,862
)
Net cash used in investing activities
(155,370
)
 
(61,388
)
Cash flows from financing activities:
 
 
 
Repayments of mortgage notes payable
(7,046
)
 
(6,647
)
Debt financing costs paid
(2,941
)
 
(35
)
Proceeds from the exercise of stock options
127

 
709

Partner contribution to consolidated real estate venture
1,025

 

Distributions paid to preferred and common partnership unitholders
(57,932
)
 
(51,251
)
Net cash used in financing activities
(66,767
)
 
(57,224
)
Decrease in cash and cash equivalents
(133,520
)
 
(28,371
)
Cash and cash equivalents at beginning of period
257,502

 
263,207

Cash and cash equivalents at end of period
$
123,982

 
$
234,836

 
 
 
 
Supplemental disclosure:
 
 
 
Cash paid for interest, net of capitalized interest during the six months ended June 30, 2015 and 2014 of $5,623 and $2,726, respectively
$
63,239

 
$
66,869



16




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 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 property acquisition
1,585

 

Change in operating real estate from contingent consideration related to a property acquisition
(1,585
)
 

Change in capital expenditures financed through accounts payable at period end
(4,142
)
 
(639
)
Change in capital expenditures financed through retention payable at period end
5,415

 
1,188

Change in unfunded tenant allowance

 
(193
)

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


17




BRANDYWINE REALTY TRUST AND BRANDYWINE OPERATING PARTNERSHIP, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2015
1. ORGANIZATION OF THE PARENT COMPANY AND THE OPERATING PARTNERSHIP
The Parent Company is a self-administered and self-managed real estate investment trust (“REIT”) that provides leasing, property management, development, redevelopment, acquisition and other tenant-related services for a portfolio of office, industrial, retail and mixed-use properties. The Parent Company owns its assets and conducts its operations through the Operating Partnership and subsidiaries of the Operating Partnership. The Parent Company is the sole general partner of the Operating Partnership and, as of June 30, 2015, owned a 99.1% interest in the Operating Partnership. The Parent Company’s common shares of beneficial interest are publicly traded on the New York Stock Exchange under the ticker symbol “BDN”.
As of June 30, 2015, the Company owned 199 properties, consisting of 167 office properties, 20 industrial facilities, five mixed-use properties, one retail property (193 core properties), four development properties, one redevelopment property and one re-entitlement property (collectively, the “Properties”) containing an aggregate of approximately 25.2 million net rentable square feet. In addition, as of June 30, 2015, the Company owned economic interests in 18 unconsolidated real estate ventures that own properties containing an aggregate of approximately 5.6 million net rentable square feet (collectively, the “Real Estate Ventures”). As of June 30, 2015, the Company also owned 430 acres of undeveloped land, and held options to purchase approximately 63 additional acres of undeveloped land. As of June 30, 2015, the total potential development that these land parcels could support, under current zoning, entitlements or combination thereof, amounted to an estimated 7.2 million square feet of development, inclusive of options to purchase approximately 63 additional acres of undeveloped land. The Properties and the properties owned by the Real Estate Ventures are located in or near Philadelphia, Pennsylvania; Metropolitan Washington, D.C.; Southern New Jersey; Richmond, Virginia; Wilmington, Delaware; Austin, Texas; and Oakland, Concord and Carlsbad, California.
The Company conducts its third-party real estate management services business primarily through wholly-owned management company subsidiaries. As of June 30, 2015, the management company subsidiaries were managing properties containing an aggregate of approximately 33.0 million net rentable square feet, of which approximately 25.2 million net rentable square feet related to Properties owned by the Company and approximately 7.8 million net rentable square feet related to properties owned by third parties and Real Estate Ventures.
Unless otherwise indicated, all references in this Form 10-Q to square feet represent net rentable area.
2. BASIS OF PRESENTATION
Basis of Presentation
The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting solely of normal recurring matters) for a fair statement of the financial position of the Company as of June 30, 2015, the results of its operations for the three and six-month periods ended June 30, 2015 and 2014 and its cash flows for the six-month periods ended June 30, 2015 and 2014 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Parent Company’s and the Operating Partnership’s consolidated financial statements and footnotes included in their combined 2014 Annual Report on Form 10-K filed with the SEC on February 19, 2015.
The Company's Annual Report on Form 10-K for the year ended December 31, 2014 contains a discussion of our significant accounting policies under Note 2, "Summary of Significant Accounting Policies". There have been no significant changes in our significant accounting policies since December 31, 2014. Management discusses our significant accounting policies and management’s judgments and estimates with the Company's Audit Committee.
Recent Accounting Pronouncements
On July 9, 2015, the Financial Accounting Standards Board ("FASB") elected to defer the effective date of the revenue recognition standard issued in May 2014 by one year. Reporting entities may choose to adopt the standard as of the original effective date or for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Calendar year-end public entities are therefore required to apply the new revenue guidance beginning in their 2018 interim and annual financial statements. The Company has not yet determined the impact, if any, that the adoption of this guidance will have on its consolidated financial


18




statements. See Note 2, "Summary of Significant Accounting Policies," included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 for the Company's initial disclosure of this standard.
In April 2015, the FASB issued guidance simplifying the presentation of debt issuance costs. The guidance requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. The amortization of these costs will remain under the interest method and will continue to be reported as interest expense. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. The Company has not yet determined the impact, if any, that the adoption of this guidance will have on its consolidated financial statements.
In February 2015, the FASB issued guidance modifying the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance does not change the general order in which the consolidation models are applied. A reporting entity that holds an economic interest in, or is otherwise involved with, another legal entity first determines if the variable interest entity model applies, and if so, whether it holds a controlling financial interest under that model. If the entity being evaluated for consolidation is not a variable interest entity, then the voting model should be applied to determine whether the entity should be consolidated by the reporting entity. Key changes to the guidance include, though are not limited to; (i.) limiting the extent to which related party interests are included in the other economic interest criterion to the decision maker’s effective interest holding, (ii.) requiring limited partners of a limited partnership, or the members of a limited liability company that is similar to a limited partnership, to have, at minimum, kick-out or participating rights to demonstrate that the partnership is a voting entity, (iii.) changing the evaluation of whether the equity holders at risk lack decision making rights when decision making is outsourced and (iv.) changing how the economics test is performed. The guidance does not amend the existing disclosure requirements for variable interest entities or voting model entities. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company has not yet determined the impact, if any, that the adoption of this guidance will have on its consolidated financial statements.
3. REAL ESTATE INVESTMENTS
As of June 30, 2015 and December 31, 2014, the gross carrying value of the Company’s Properties was as follows (in thousands):
 
June 30,
2015
 
December 31,
2014
Land
$
677,644

 
$
669,635

Building and improvements
3,476,667

 
3,409,303

Tenant improvements
546,528

 
524,754

 
4,700,839

 
4,603,692

Assets held for sale - real estate investments (a)

 
27,436

Total
$
4,700,839

 
$
4,631,128

(a)
Real estate investments related to assets held for sale above represents gross real estate assets and does not include accumulated depreciation or other assets on the balance sheets of the properties held for sale.
Acquisitions
On June 22, 2015, through a series of transactions with International Business Machines ("IBM"), the Company acquired the remaining 50.0% interest in Broadmoor Austin Associates, consisting of seven office buildings and the 66.0 acre underlying land parcel located in Austin, Texas, for an aggregate purchase price of $211.4 million. The office buildings contain 1,112,236 net rentable square feet of office space and were 100.0% occupied as of June 30, 2015. The Company funded the cost of the acquisition with an aggregate cash payment of $143.8 million, consisting of $81.0 million from available corporate funds and $62.8 million previously held in escrow related to a Section 1031 like-kind exchange. Part of the cash payment was used at closing to repay, at no repayment penalty, the remaining $51.2 million of secured debt. The Company incurred $0.2 million of acquisition related costs that are classified within general and administrative expenses.
The Company previously accounted for its 50.0% non-controlling interest in Broadmoor Austin Associates under the equity method of accounting. As a result of acquiring IBM's remaining 50.0% common interest in Broadmoor Austin Associates, the Company obtained control of Broadmoor Austin Associates and the Company's existing investment balance was remeasured based on fair value of the underlying properties acquired and the existing distribution provisions under the relevant partnership agreement. As a result, the Company recorded a $0.8 million gain on remeasurement.


19




The Company has treated its acquisition of the 50.0% ownership interest in Broadmoor Austin Associates as a business combination and allocated the purchase price to the tangible and intangible assets and liabilities. The Company utilized a number of sources in making estimates of fair values for purposes of allocating the purchase price to tangible and intangibles assets acquired and intangible liabilities assumed. As of June 30, 2015, the purchase price is preliminary and subject to change. The purchase price has been allocated as follows:
 
June 22, 2015
Building, land and improvements
$
161,252

Land inventory
8,064

Intangible assets acquired (a)
50,637

Below market lease liabilities assumed (b)
(8,600
)
 
$
211,353

 
 
Return of existing equity method investment
(67,261
)
Net working capital assumed
(271
)
     Total cash payment at settlement
$
143,821

(a)
Weighted average amortization period of 4.0 years.
(b)
Weighted average amortization period of 1.5 years.
The unaudited pro forma information below summarizes the Company’s combined results of operations for the three and six-month periods ended June 30, 2015 and 2014, respectively, as though the acquisition of Broadmoor Austin Associates was completed on January 1, 2014. The supplemental pro forma operating data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods (in thousands except for per share amounts).
 
 
Three-month periods ended
 
Six-month periods ended
 
 
June 30,
 
June 30,
 
 
2015
 
2014
 
2015
 
2014
Pro forma revenue
 
$
148,677

 
$
153,893

 
$
302,323

 
$
309,771

Pro forma income from continuing operations
 
5,210

 
3,767

 
16,277

 
4,391

Pro forma net income available to common shareholders
 
3,407

 
2,907

 
12,590

 
1,727

 
 
 
 
 
 
 
 
 
Earnings (loss) per common share from continuing operations:
 
 
 
 
 
 
 
 
Basic -- as reported
 
$
0.01

 
$
0.01

 
$
0.06

 
$
(0.01
)
Basic -- as pro forma
 
$
0.03

 
$
0.02

 
$
0.09

 
$
0.03

 
 
 
 
 
 
 
 
 
Diluted -- as reported
 
$
0.01

 
$
0.01

 
$
0.06

 
$
(0.01
)
Diluted -- as pro forma
 
$
0.03

 
$
0.02

 
$
0.09

 
$
0.03

 
 
 
 
 
 
 
 
 
Earnings (loss) per common share:
 
 
 
 
 
 
 
 
Basic -- as reported
 
$

 
$

 
$
0.04

 
$
(0.02
)
Basic -- as pro forma
 
$
0.02

 
$
0.02

 
$
0.07

 
$
0.01

 
 
 
 
 
 
 
 
 
Diluted -- as reported
 
$

 
$

 
$
0.04

 
$
(0.02
)
Diluted -- as pro forma
 
$
0.02

 
$
0.02

 
$
0.07

 
$
0.01



20