Enhanced Investments - Financial Portal

Published: 2021-10-29 00:00:00 ET

HTTP/1.1 200 OK HTTP/1.1 200 OK X-Crawlera-Slave: 152.44.99.208:3128 X-Crawlera-Version: 1.60.1 accept-ranges: bytes content-type: text/html last-modified: Fri, 29 Oct 2021 15:40:16 GMT server: AmazonS3 x-amz-id-2: ng4JvIvIWvDfJpmhhm3rk1lPI+FVp/DX7xyn0f90dfrcFqe6gDBaphxE6UcrN2qKsuvr+zPj/mw= x-amz-meta-mode: 33188 x-amz-meta-s3cmd-attrs: uid:504/gname:fitrprnt/uname:fitrprnt/gid:504/mode:33184/mtime:1635522007/atime:1635522010/md5:621280218d50af7a39c829a1137ac64b/ctime:1635522009 x-amz-replication-status: COMPLETED x-amz-request-id: 46TMSNWV9DM7CTWE x-amz-version-id: zy2.RJkbciKMhJ3iIYEntHWphiOnUM7k x-content-type-options: nosniff x-frame-options: SAMEORIGIN x-xss-protection: 1; mode=block x-akamai-transformed: 9 - 0 pmb=mTOE,2 expires: Fri, 07 Apr 2023 02:15:39 GMT cache-control: max-age=0, no-cache, no-store pragma: no-cache date: Fri, 07 Apr 2023 02:15:39 GMT vary: Accept-Encoding akamai-x-true-ttl: -1 strict-transport-security: max-age=31536000 ; includeSubDomains ; preload set-cookie: ak_bmsc=E5473507693400FC31D6E93DDD2E3B51~000000000000000000000000000000~YAAQlQ8kF1BNgE+HAQAAnnt/WRObfDgOVrTNdygOqLhaJOGi4S1MHQrU3+Ig18HaZjE1/jMFmy1wg4QJ+YadwfF6MlqtqBSJ6uLU0UlSjsdbdcvE3e1AxhGzcAkT/Z0k6GnUZBjSoFJQy3WU3pWGNRzmtnXzYAnLioWzcLJInmqnr9+TC+3HB73AVN/6+Bt4vBFK1gqCuAqUiRMQFYHwel+lYopQrZ+qx4BcJndzSFRxW1fFJou939dvIJxpYkolMpd9GVVKMOZiFjdApY4mvhve62SV5fXdaZHlhybrF3XYSE1konMtJpLtdGam84D7RREHh7YHsbmeMoZu+9megTK+GyysYfo0NDApK9ZoAFvS44XeoL7oLh172dmd/oPito8AOYgvmQ==; Domain=.sec.gov; Path=/; Expires=Fri, 07 Apr 2023 04:15:39 GMT; Max-Age=7200; HttpOnly set-cookie: bm_mi=6CD16E380427D1DCE2493388381A8EF7~YAAQlQ8kF1FNgE+HAQAAnnt/WRPs5eG+T21jmU9JV0shoMiKWkmaRw3LPGXFTXZ1egAkuh49GMkpWlIMo6T+h55mZoWsa1KOmV5tSLE6Jnt5kaSLaiK8JCt/+GTxpCMo/8fOqgj0YYEQinoZmnKuCWGbB58/b5p3Cg+trHz/pOO85C25SGbji+kYQwy6HHN4bnLTh969XE0uJ0i3PLRzi/ZPniIaECVvuCiJ1Bz6emV0hWSZSUpDObY6eCRBubEUS9l0wq0qFwVaxs45L8xh0OVVYq8dsttb0W0dwoCsiGp4fgvp0NED8STRt16MAzvz4qqNLdoTx/paS8VR+GnQaEaj4MD915JPwXyKZrUgCl8QKKxc0NkHa0JZqRkkwXnDqxA8zQf5PXOO~1; Domain=.sec.gov; Path=/; Expires=Fri, 07 Apr 2023 02:15:39 GMT; Max-Age=0; Secure Transfer-Encoding: chunked Proxy-Connection: close Connection: close bdn-20210930

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 September 30, 2021


☐			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 Arch Street
Suite 1800
Philadelphia, PA 19104
(Address of principal executive offices) (Zip Code)

(610) 325-5600
(Registrant’s telephone number, including area code)

2929 Walnut Street
Suite 1700
Philadelphia, PA 19104

(Former address)

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 171,126,257 Common Shares of Beneficial Interest, par value $0.01 per share of Brandywine Realty Trust, were outstanding as of October 25, 2021.

Table of Contents

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2021 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 September 30, 2021, owned a 99.5% interest in the Operating Partnership. The remaining 0.5% 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:

Table of Contents

•Consolidated Financial Statements; and

•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.

Table of Contents

TABLE OF CONTENTS


			Page

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Brandywine Realty Trust

Financial Statements of Brandywine Realty Trust			5

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020			5

Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020			6

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020			7

Consolidated Statements of Beneficiaries’ Equity for the three and nine months ended September 30, 2021 and 2020			8

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020			10

Brandywine Operating Partnership, L.P.

Financial Statements of Brandywine Operating Partnership, L.P.			11

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020			11

Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020			12

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020			13

Consolidated Statements of Partners’ Equity for the three and nine months ended September 30, 2021 and 2020			14

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020			16

Notes to Unaudited Consolidated Financial Statements			17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			30

Item 3. Quantitative and Qualitative Disclosures about Market Risk			45

Item 4. Controls and Procedures			45

PART II — OTHER INFORMATION			47

Item 1. Legal Proceedings			47

Item 1A. Risk Factors			47

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			47

Item 3. Defaults Upon Senior Securities			47

Item 4. Mine Safety Disclosures			47

Item 5. Other Information			47

Item 6. Exhibits			48

Signatures			49

Filing Format

This combined Form 10-Q is being filed separately by Brandywine Realty Trust and Brandywine Operating Partnership, L.P.

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)


	September 30, 2021		December 31, 2020
ASSETS
Real estate investments:
Operating properties	$	3,437,074	$	3,474,109
Accumulated depreciation	(957,793)		(896,561)
Right of use asset - operating leases, net	20,478		20,977
Operating real estate investments, net	2,499,759		2,598,525
Construction-in-progress	266,263		210,311
Land held for development	118,684		117,984
Prepaid leasehold interests in land held for development, net	27,762		39,185
Total real estate investments, net	2,912,468		2,966,005
Assets held for sale, net	562		7,349
Cash and cash equivalents	42,484		46,344
Accounts receivable	11,645		13,536
Accrued rent receivable, net of allowance of $4,133 and $5,086 as of September 30, 2021 and December 31, 2020, respectively	165,564		155,372
Investment in unconsolidated real estate ventures	449,658		401,327
Deferred costs, net	81,632		84,856
Intangible assets, net	34,514		48,570
Other assets	131,230		176,747
Total assets	$	3,829,757	$	3,900,106
LIABILITIES AND BENEFICIARIES' EQUITY


Unsecured term loan, net	$	249,477	$	249,084
Unsecured senior notes, net	1,581,112		1,581,511
Accounts payable and accrued expenses	133,615		121,982
Distributions payable	32,763		32,706
Deferred income, gains and rent	21,861		21,396
Intangible liabilities, net	14,451		18,448

Lease liability - operating leases	22,911		22,758
Other liabilities	48,090		47,573
Total liabilities	$	2,104,280	$	2,095,458
Commitments and contingencies (See Note 15)
Brandywine Realty Trust's Equity:
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 171,126,257 and 170,572,964 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	1,712		1,707
Additional paid-in-capital	3,145,209		3,138,152
Deferred compensation payable in common shares	18,491		17,516
Common shares in grantor trust, 1,169,703 and 1,160,494 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	(18,491)		(17,516)
Cumulative earnings	1,117,804		1,110,083
Accumulated other comprehensive loss	(4,333)		(7,561)
Cumulative distributions	(2,545,979)		(2,448,238)
Total Brandywine Realty Trust's equity	1,714,413		1,794,143
Noncontrolling interests	11,064		10,505
Total beneficiaries' equity	$	1,725,477	$	1,804,648
Total liabilities and beneficiaries' equity	$	3,829,757	$	3,900,106

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

Table of Contents

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share information)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue
Rents	$	112,159	$	121,277	$	336,878	$	392,661
Third party management fees, labor reimbursement and leasing	6,500		4,324		19,778		13,339
Other	1,759		505		4,633		2,031
Total revenue	120,418		126,106		361,289		408,031
Operating expenses
Property operating expenses	30,304		31,567		88,503		102,320
Real estate taxes	13,421		14,923		42,784		48,525
Third party management expenses	3,327		2,509		9,866		7,546
Depreciation and amortization	48,175		43,533		131,303		145,314
General and administrative expenses	7,076		7,069		22,016		23,973

Total operating expenses	102,303		99,601		294,472		327,678
Gain on sale of real estate
Net gain on disposition of real estate	—		271,901		142		274,487
Net gain on sale of undepreciated real estate	910		—		2,903		201
Total gain on sale of real estate	910		271,901		3,045		274,688
Operating income	19,025		298,406		69,862		355,041
Other income (expense):
Interest and investment income	4,494		467		7,845		1,487
Interest expense	(15,190)		(16,310)		(46,973)		(56,510)
Interest expense - amortization of deferred financing costs	(709)		(715)		(2,127)		(2,195)

Equity in loss of unconsolidated real estate ventures	(6,634)		(5,788)		(20,798)		(9,882)

Net gain on real estate venture transactions	—		75		—		75


Net income before income taxes	986		276,135		7,809		288,016
Income tax (provision) benefit	(12)		(2)		(46)		224
Net income	974		276,133		7,763		288,240
Net income attributable to noncontrolling interests	(7)		(1,612)		(42)		(1,701)
Net income attributable to Brandywine Realty Trust	967		274,521		7,721		286,539


Nonforfeitable dividends allocated to unvested restricted shareholders	(91)		(93)		(331)		(317)
Net income attributable to Common Shareholders of Brandywine Realty Trust	$	876	$	274,428	$	7,390	$	286,222

Basic income per Common Share	$	0.01	$	1.61	$	0.04	$	1.66

Diluted income per Common Share	$	0.01	$	1.60	$	0.04	$	1.66

Basic weighted average shares outstanding	170,907,018		170,573,028		170,794,585		172,380,410
Diluted weighted average shares outstanding	172,237,194		171,026,492		172,077,950		172,735,436

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

Table of Contents

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	974	$	276,133	$	7,763	$	288,240
Comprehensive income (loss):
Unrealized gain (loss) on derivative financial instruments	911		1,040		2,681		(6,979)



Amortization of interest rate contracts (1)	188		188		564		564
Total comprehensive income (loss)	1,099		1,228		3,245		(6,415)
Comprehensive income	2,073		277,361		11,008		281,825
Comprehensive income attributable to noncontrolling interest	(12)		(1,619)		(59)		(1,665)
Comprehensive income attributable to Brandywine Realty Trust	$	2,061	$	275,742	$	10,949	$	280,160

(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.

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	170,572,964	1,160,494	$	1,707	$	3,138,152	$	17,516	$	(17,516)	$	1,110,083	$	(7,561)	$	(2,448,238)	$	10,505	$	1,804,648

Net income											6,921						43		6,964
Other comprehensive income													1,092				6		1,098


Share-based compensation activity	108,345	12,719			2,502														2,502
Share Issuance from/(to) Deferred Compensation Plan	(18,058)	(61,436)			(198)		142		(142)										(198)

Distributions declared ($0.19 per share)															(32,573)		(187)		(32,760)
BALANCE, March 31, 2021	170,663,251	1,111,777	$	1,707	$	3,140,456	$	17,658	$	(17,658)	$	1,117,004	$	(6,469)	$	(2,480,811)	$	10,367	$	1,782,254
Net loss											(167)						(8)		(175)
Other comprehensive income													1,042				6		1,048
Issuance of partnership interest in consolidated real estate ventures																	2,289		2,289
Redemption of LP Units																	(2,334)		(2,334)
Share-based compensation activity	237,240	63,566	2		688														690
Share Issuance from/(to) Deferred Compensation Plan							833		(833)										—
Reallocation of Noncontrolling interest					(569)												569		—
Distributions declared ($0.19 per share)															(32,562)		(157)		(32,719)
BALANCE, June 30, 2021	170,900,491	1,175,343	$	1,709	$	3,140,575	$	18,491	$	(18,491)	$	1,116,837	$	(5,427)	$	(2,513,373)	$	10,732	$	1,751,053
Net income											967						7		974
Other comprehensive income													1,094				5		1,099
Issuance of Common Shares of Beneficial Interest	226,695		3		3,049														3,052
Issuance of partnership interest in consolidated real estate ventures																	476		476
Share-based compensation activity	(929)	(5,640)			1,585														1,585


Distributions declared $0.19 per share)															(32,606)		(156)		(32,762)
BALANCE, September 30, 2021	171,126,257	1,169,703	$	1,712	$	3,145,209	$	18,491	$	(18,491)	$	1,117,804	$	(4,333)	$	(2,545,979)	$	11,064	$	1,725,477

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

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	176,480,095	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
Net income											274,521						1,612		276,133
Other comprehensive income													1,221				7		1,228
Impact of deconsolidation of real estate venture																	(1,017)		(1,017)
Distributions from consolidated real estate ventures																	(22)		(22)
Share-based compensation activity					1,263														1,263
Share Issuance from/(to) Deferred Compensation Plan	(195)	(195)			(2)														(2)
Distributions declared $0.19 per share)															(32,463)		(187)		(32,650)
BALANCE, September 30, 2020	170,572,964	1,160,494	$	1,707	$	3,136,851	$	17,516	$	(17,516)	$	1,091,095	$	(8,749)	$	(2,415,736)	$	10,614	$	1,815,782

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

Table of Contents

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	7,763	$	288,240
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	131,303		145,314
Amortization of deferred financing costs	2,127		2,195
Amortization of debt discount/(premium), net	(1,463)		(55)
Amortization of stock compensation costs	5,732		5,544
Straight-line rent income	(10,641)		(8,903)
Amortization of acquired above (below) market leases, net	(3,929)		(3,657)
Ground rent expense	712		1,092
Provision for doubtful accounts	940		1,041


Net gain on sale of interests in real estate	(3,045)		(274,688)


Loss from unconsolidated real estate ventures, net of distributions	20,798		9,880
Income tax provision (benefit)	46		(224)
Changes in assets and liabilities:
Accounts receivable	672		(6,263)
Other assets	(8,562)		(7,527)
Accounts payable and accrued expenses	3,650		10,782
Deferred income, gains and rent	914		(8,856)
Other liabilities	(6,298)		8,549
Net cash provided by operating activities	140,719		162,464
Cash flows from investing activities:
Acquisition of properties	—		(11,432)
Proceeds from the sale of properties	10,303		122,055

Proceeds from insurance	1,250		—
Proceeds from note receivable	50,000		—


Capital expenditures for tenant improvements	(30,168)		(55,262)
Capital expenditures for redevelopments	(18,705)		(18,664)
Capital expenditures for developments	(26,694)		(51,435)
Advances for the purchase of tenant assets, net of repayments	279		1,265
Investment in unconsolidated real estate ventures	(27,210)		(719)


Capital distributions from unconsolidated real estate ventures	7,499		6,916
Leasing costs paid	(11,475)		(16,747)
Net cash used in investing activities	(44,921)		(24,023)
Cash flows from financing activities:
Repayments of mortgage notes payable	—		(6,105)
Proceeds from credit facility borrowings	116,000		170,500
Repayments of credit facility borrowings	(116,000)		(170,500)

Exercise of stock options, net	(63)		47

Shares used for employee taxes upon vesting of share awards	(1,762)		(1,346)
Partner contributions to consolidated real estate venture	2,765		—

Repurchase and retirement of common shares	—		(60,000)
Redemption of limited partnership units	(2,334)		—
Distributions paid to shareholders	(97,637)		(98,651)
Distributions to noncontrolling interest	(547)		(561)
Net cash used in financing activities	(99,578)		(166,616)
Decrease in cash and cash equivalents and restricted cash	(3,780)		(28,175)
Cash and cash equivalents and restricted cash at beginning of period	47,077		91,170
Cash and cash equivalents and restricted cash at end of period	$	43,297	$	62,995

Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	$	46,344	$	90,499
Restricted cash, beginning of period	733		671
Cash and cash equivalents and restricted cash, beginning of period	$	47,077	$	91,170
Cash and cash equivalents, end of period	$	42,484	$	62,256
Restricted cash, end of period	813		739
Cash and cash equivalents and restricted cash, end of period	$	43,297	$	62,995
Supplemental disclosure: