##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2007
 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.
  MARYLAND(Brandywine Realty Trust)
    
    23-2413352DELAWARE(Brandywine Operating Partnership L.P.)
    
    23-2862640(State or other jurisdiction ofIncorporation or organization)
    
    (I.R.S. Employer Identification No.)555 East Lancaster AvenueRadnor, Pennsylvania
    
    19087(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code
    
    (610) 325-5600
  Brandywine Realty Trust
    
    Yes þ No oBrandywine Operating Partnership, L.P.
    
    Yes þ No o
  Brandywine Realty Trust
    
    Large accelerated filer þ Accelerated filer o Non-accelerated filer oBrandywine Operating Partnership, L.P.
    
    Large accelerated filer o Accelerated filer þ Non-accelerated filer o
  Brandywine Realty Trust
    
    Yes o No þBrandywine Operating Partnership, L.P.
    
    Yes o No þ




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TABLE OF CONTENTS
 PART I - FINANCIAL INFORMATIONBrandywine Realty TrustPageItem 1.
    
    Financial Statements (unaudited)Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Operations for the three-month periods ended March 31, 2007 and 2006
    
    
    4Consolidated Statements of Other Comprehensive Income for the three-month periods ended March 31, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2007 and March 31, 2006
    
    
    6Notes to Unaudited Consolidated Financial Statements
    
    
    7Brandywine Operating Partnership, L.P.Item 1.
    
    Financial Statements (unaudited)Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006
    
    
    30Consolidated Statements of Operations for the three-month periods ended March 31, 2007 and 2006
    
    
    31Consolidated Statements of Other Comprehensive Income for the three-month periods ended March 31, 2007 and 2006
    
    
    32Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2007 and March 31, 2006
    
    
    33Notes to Unaudited Consolidated Financial Statements
    
    
    34Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    56Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    68Item 4.
    
    Controls and Procedures
    
    
    68PART II - OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    68Item 1A.
    
    Risk Factors
    
    
    69Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    69Item 3.
    
    Defaults Upon Senior Securities
    
    
    69Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    69Item 5.
    
    Other Information
    
    
    69Item 6.
    
    Exhibits
    
    
    69Signatures
    
    
    71Amended and Restated 1997 Long-Term Incentive Plan2007 Non-Qualified Employee Share Purchase PlanRestricted Share AwardStatement re Computation of Ratios of Brandywine Realty TrustStatement re Computation of Ratios of Brandywine Operating Partnership, L.P.Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive Officer, in its capacity as the general partnerCertification of Chief Financial Officer, in its capacity as the general partnerCertification of Chief Executive Officer, as Adopted Pursuant to Section 906Certification of Chief Financial Officer, as Adopted Pursuant to Section 906Certification of Chief Executive Officer, in its capacity as the general partner, as Adopted Pursuant to Section 906Certification of Chief Financial Officer, in its capacity as the general partner, as Adopted Pursuant to Section 906
  Filing Format
  2




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##### 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)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSReal estate investments:Operating properties
    
    $
    4,773,814
    
    
    $
    4,927,305Accumulated depreciation
    
    
    (522,286
    )
    
    
    (515,698
    )Operating real estate investments, net
    
    
    4,251,528
    
    
    
    4,411,607Development land and construction-in-progress
    
    
    346,555
    
    
    
    328,119Total real
estate investments, net
    
    
    4,598,083
    
    
    
    4,739,726Cash and cash equivalents
    
    
    3,885
    
    
    
    25,379Cash escrowed with qualified intermediary (Note 3)
    
    
    109,102
    
    
    
    Accounts receivable, net
    
    
    18,339
    
    
    
    19,957Accrued rent receivable, net
    
    
    72,433
    
    
    
    71,589Asset held for sale, net
    
    
    127,333
    
    
    
    126,016Investment in real estate ventures, at equity
    
    
    72,983
    
    
    
    74,574Deferred costs, net
    
    
    77,002
    
    
    
    73,708Intangible assets, net
    
    
    248,384
    
    
    
    281,251Other assets
    
    
    107,936
    
    
    
    96,818Total assets
    
    $
    5,435,480
    
    
    $
    5,509,018LIABILITIES AND BENEFICIARIES EQUITYMortgage notes payable
    
    $
    879,232
    
    
    $
    883,920Unsecured notes, net of discounts
    
    
    1,908,435
    
    
    
    2,208,310Unsecured credit facility
    
    
    404,000
    
    
    
    60,000Accounts payable and accrued expenses
    
    
    103,650
    
    
    
    108,400Distributions payable
    
    
    42,321
    
    
    
    42,760Tenant security deposits and deferred rents
    
    
    58,655
    
    
    
    55,697Acquired below market leases, net
    
    
    76,639
    
    
    
    92,527Other liabilities
    
    
    16,620
    
    
    
    14,661Mortgage notes payable and other liabilities held for sale
    
    
    14,404
    
    
    
    20,826Total liabilities
    
    
    3,503,956
    
    
    
    3,487,101Minority interest  partners share of consolidated real estate ventures
    
    
    
    
    
    
    34,428Minority interest attributable to continuing operations  LP units
    
    
    87,664
    
    
    
    89,563Commitments and contingencies (Note 14)Beneficiaries equity:Preferred Shares (shares authorized20,000,000):7.50% Series C Preferred Shares, $0.01 par value; issued and outstanding2,000,000 in 2007 and 2006
    
    
    20
    
    
    
    207.375% Series D Preferred Shares, $0.01 par value; issued and outstanding2,300,000 in 2007 and 2006
    
    
    23
    
    
    
    23Common Shares of beneficial interest, $0.01 par value; shares authorized
200,000,000; issued and outstanding87,302,191 in 2007 and 88,327,041 in 2006
    
    
    872
    
    
    
    883Additional paid-in capital
    
    
    2,277,828
    
    
    
    2,311,541Cumulative earnings
    
    
    443,136
    
    
    
    423,764Accumulated other comprehensive income (loss)
    
    
    2,428
    
    
    
    1,576Cumulative distributions
    
    
    (880,447
    )
    
    
    (839,881
    )Total beneficiaries equity
    
    
    1,843,860
    
    
    
    1,897,926Total liabilities, minority interest and beneficiaries equity
    
    $
    5,435,480
    
    
    $
    5,509,018
  3




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BRANDYWINE REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)
 For the three-month periodsended March 31,2007
    
    
    2006Revenue:Rents
    
    $
    137,940
    
    
    $
    123,069Tenant reimbursements
    
    
    20,823
    
    
    
    16,634Other
    
    
    4,338
    
    
    
    4,215Total revenue
    
    
    163,101
    
    
    
    143,918Operating Expenses:Property operating expenses
    
    
    61,232
    
    
    
    55,181Depreciation and amortization
    
    
    62,047
    
    
    
    51,212Administrative expenses
    
    
    7,269
    
    
    
    8,490Total operating expenses
    
    
    130,548
    
    
    
    114,883Operating income
    
    
    32,553
    
    
    
    29,035Other Income (Expense):Interest income
    
    
    787
    
    
    
    2,650Interest expense
    
    
    (40,358
    )
    
    
    (40,378
    )Interest expense  Deferred financing costs
    
    
    (1,258
    )
    
    
    (479
    )Equity in income of real estate ventures
    
    
    754
    
    
    
    965Income (loss) before minority interest
    
    
    (7,522
    )
    
    
    (8,207
    )Minority interest  partners share of consolidated real estate ventures
    
    
    (116
    )
    
    
    298Minority interest attributable to continuing operations  LP units
    
    
    411
    
    
    
    435Income (loss) from continuing operations
    
    
    (7,227
    )
    
    
    (7,474
    )Discontinued operations:Income from discontinued operations
    
    
    1,776
    
    
    
    5,246Net gain on disposition of discontinued operations
    
    
    26,009
    
    
    
    Minority interest  partners share of consolidated real estate ventures
    
    
    
    
    
    
    (187
    )Minority interest attributable to discontinued operations  LP units
    
    
    (1,186
    )
    
    
    (227
    )Income from discontinued operations
    
    
    26,599
    
    
    
    4,832Net income (loss)
    
    
    19,372
    
    
    
    (2,642
    )Income allocated to Preferred Shares
    
    
    (1,998
    )
    
    
    (1,998
    )Income (loss) allocated to Common Shares
    
    $
    17,374
    
    
    $
    (4,640
    )Basic earnings per Common Share:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.05$
    0.20
    
    
    $
    (0.05
    )Diluted earnings per Common Share:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.05$
    0.19
    
    
    $
    (0.05
    )Dividends declared per Common Share
    
    $
    0.44
    
    
    $
    0.44Basic weighted average shares outstanding
    
    
    88,287,426
    
    
    
    89,299,967Diluted weighted average shares outstanding
    
    
    89,236,342
    
    
    
    89,742,981
  4




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BRANDYWINE REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(unaudited, in thousands)
 For the three-month periodsended March 31,2007
    
    
    2006Net income (loss)
    
    $
    19,372
    
    
    $
    (2,642
    )Other comprehensive income:Unrealized gain (loss) on derivative financial instruments
    
    
    1,450
    
    
    
    1,758Less: minority interest  consolidated real estate venture partners share of
unrealized gain (loss) on derivative financial instruments
    
    
    
    
    
    
    (513
    )Settlement of forward starting swaps
    
    
    
    
    
    
    3,266Reclassification of realized (gains)/losses on derivative financial
instruments to operations, net
    
    
    9
    
    
    
    96Unrealized gain (loss) on available-for-sale securities
    
    
    (607
    )
    
    
    (592
    )Total other comprehensive income (loss)
    
    
    852
    
    
    
    4,015Comprehensive income
    
    $
    20,224
    
    
    $
    1,373
  5




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BRANDYWINE REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 Three-month periodsended March 31,2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    19,372
    
    
    $
    (2,642
    )Adjustments to reconcile net income (loss) to net cash from
operating activities:Depreciation
    
    
    48,508
    
    
    
    41,079Amortization:Deferred financing costs
    
    
    1,257
    
    
    
    480Deferred leasing costs
    
    
    3,842
    
    
    
    2,166Acquired above (below) market leases, net
    
    
    (3,613
    )
    
    
    (1,939
    )Acquired lease intangibles
    
    
    14,247
    
    
    
    16,806Deferred compensation costs
    
    
    1,213
    
    
    
    776Straight-line rent
    
    
    (7,063
    )
    
    
    (7,708
    )Provision for doubtful accounts
    
    
    500
    
    
    
    1,056Real estate venture income in excess of distributions
    
    
    (84
    )
    
    
    (486
    )Net gain on sale of interests in real estate
    
    
    (26,009
    )
    
    
    Minority interest
    
    
    891
    
    
    
    (319
    )Changes in assets and liabilities:Accounts receivable
    
    
    5,416
    
    
    
    (4,018
    )Other assets
    
    
    (11,167
    )
    
    
    (7,482
    )Accounts payable and accrued expenses
    
    
    7,286
    
    
    
    3,870Tenant security deposits and deferred rents
    
    
    3,390
    
    
    
    10,918Other liabilities
    
    
    (7,465
    )
    
    
    2,681Net cash from operating activities
    
    
    50,521
    
    
    
    55,238Cash flows from investing activities:Acquisition of Prentiss
    
    
    
    
    
    
    (935,856
    )Acquisition of properties
    
    
    
    
    
    
    (12,480
    )Acquisition of minority interest  partners share of consolidated real estate venture
    
    
    (63,732
    )
    
    
    Sales of properties, net
    
    
    109,127
    
    
    
    134,064Capital expenditures
    
    
    (68,015
    )
    
    
    (52,364
    )Investment in unconsolidated real estate ventures
    
    
    (512
    )
    
    
    (358
    )Cash distributions from unconsolidated real estate ventures
in excess of equity in income
    
    
    1,849
    
    
    
    1,717Leasing costs
    
    
    (9,259
    )
    
    
    (2,621
    )Net cash from investing activities
    
    
    (30,542
    )
    
    
    (867,898
    )Cash flows from financing activities:Proceeds from Credit Facility borrowings
    
    
    442,000
    
    
    
    215,000Repayments of Credit Facility borrowings
    
    
    (98,000
    )
    
    
    (205,000
    )Proceeds from mortgage notes payable
    
    
    
    
    
    
    20,520Repayments of mortgage notes payable
    
    
    (4,695
    )
    
    
    (6,807
    )Proceeds from term loan
    
    
    
    
    
    
    750,000Repayments of term loan
    
    
    
    
    
    
    (750,000
    )Proceeds from unsecured notes
    
    
    
    
    
    
    847,818Repayments of unsecured notes
    
    
    (299,866
    )
    
    
    Proceeds from forward starting swap termination
    
    
    
    
    
    
    3,266Repayments on employee stock loans
    
    
    
    
    
    
    10Debt financing costs
    
    
    (72
    )
    
    
    (5,581
    )Exercise of stock options
    
    
    6,166
    
    
    
    1,923Repurchases of Common Shares
    
    
    (44,677
    )
    
    
    Distributions paid to shareholders
    
    
    (41,031
    )
    
    
    (27,985
    )Distributions to minority interest holders
    
    
    (1,298
    )
    
    
    (1,377
    )Net cash from financing activities
    
    
    (41,473
    )
    
    
    841,787Increase (decrease) in cash and cash equivalents
    
    
    (21,494
    )
    
    
    29,127Cash and cash equivalents at beginning of period
    
    
    25,379
    
    
    
    7,174Cash and cash equivalents at end of period
    
    $
    3,885
    
    
    $
    36,301Supplemental disclosure:Cash paid for interest, net of capitalized interest
    
    $
    24,023
    
    
    $
    23,350Supplemental disclosure of non-cash activity:Common shares issued in the Prentiss acquisition
    
    
    
    
    
    
    1,022,173Operating Partnership units issued in Prentiss acquisitions
    
    
    
    
    
    
    64,103Operating
Partnership units issued in property acquisitions
    
    
    
    
    
    
    13,819Cash escrowed with qualified intermediary (Note 3)
    
    
    109,102
    
    
    
    Debt, minority interest and other liabilities, net, assumed in the Prentiss acquisition
    
    
    
    
    
    
    679,520
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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 THE COMPANY
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
  7




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Principles of Consolidation
  Use of Estimates
  Operating Properties
  Purchase Price Allocation
  8




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
     Revenue Recognition
  Stock-Based Compensation Plans
  9




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   Accounting for Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Hedging Activities
 An Amendment of SFAS 133
  Income Taxes
   10




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  New Pronouncements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 Fair Value Measurements
 Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109
 REAL ESTATE INVESTMENTS
  March 31, 2007
    
    
    December 31, 2006Land
    
    $
    724,642
    
    
    $
    756,400Building and improvements
    
    
    3,665,362
    
    
    
    3,807,040Tenant improvements
    
    
    383,810
    
    
    
    363,8654,773,814
    
    
    
    4,927,305
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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Acquisitions and Dispositions
  2007
   2006
 Prentiss Acquisition
    12




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 At January 5, 2006Real estate investmentsLand  operating
    
    $
    282,584Building and improvements
    
    
    1,942,728Tenant improvements
    
    
    120,610Construction in progress and land inventory
    
    
    57,329Total real estate investments acquired
    
    
    2,403,251Rent receivables
    
    
    6,031Other assets acquired:Intangible assets:In-place leases
    
    
    187,907Relationship values
    
    
    98,382Above-market leases
    
    
    26,352Total intangible assets acquired
    
    
    312,641Investment in real estate ventures
    
    
    66,921Investment in marketable securities
    
    
    193,089Other assets
    
    
    8,868Total other assets
    
    
    581,519Total assets acquired
    
    
    2,990,801Liabilities assumed:Mortgage notes payable
    
    
    532,607Unsecured notes
    
    
    78,610Secured note payable
    
    
    186,116Security deposits and deferred rent
    
    
    6,475Other liabilities:Below-market leases
    
    
    78,911Other liabilities
    
    
    43,995Total other liabilities assumed
    
    
    122,906Total liabilities assumed
    
    
    926,714Minority interest
    
    
    104,658Net assets acquired
    
    $
    1,959,429
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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
    Three-month periodended March 31, 2006(unaudited)Pro forma revenue
    
    $
    147,322Pro forma loss from continuing operations
    
    
    (7,124
    )Pro forma loss allocated to common shares
    
    
    (4,289
    )Earnings per common share from continuing operationsBasic  as reported
    
    $
    (0.11
    )Basic  as pro forma
    
    $
    (0.10
    )Diluted  as reported
    
    $
    (0.11
    )Diluted  as pro forma
    
    $
    (0.10
    )Earnings per common shareBasic  as reported
    
    $
    (0.05
    )Basic  as pro forma
    
    $
    (0.05
    )Diluted  as reported
    
    $
    (0.05
    )Diluted  as pro forma
    
    $
    (0.05
    )
    Other Acquisitions and Dispositions
 14




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  INVESTMENT IN UNCONSOLIDATED VENTURES
      2007
    
    
    2006Operating property, net of accumulated depreciation
    
    $
    376,574
    
    
    $
    365,168Other assets
    
    
    42,645
    
    
    
    52,935Liabilities
    
    
    26,333
    
    
    
    28,764Debt
    
    
    358,659
    
    
    
    332,589Equity
    
    
    39,610
    
    
    
    56,888Companys share of equity (Companys basis)
    
    
    72,983
    
    
    
    74,574
  Three-month periodsended March 31,2007
    
    
    2006Revenue
    
    $
    18,314
    
    
    $
    19,724Operating expenses
    
    
    6,297
    
    
    
    7,994Interest expense, net
    
    
    5,238
    
    
    
    4,994Depreciation and amortization
    
    
    4,229
    
    
    
    4,873Net income
    
    
    2,551
    
    
    
    1,862Companys share of income (Company basis)
    
    
    754
    
    
    
    965
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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  DEFERRED COSTS
  March 31, 2007Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    88,913
    
    
    $
    (29,083
    )
    
    $
    59,830Financing Costs
    
    
    22,322
    
    
    
    (5,150
    )
    
    
    17,172Total
    
    $
    111,235
    
    
    $
    (34,233
    )
    
    $
    77,002
 December 31, 2006Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    83,629
    
    
    $
    (28,278
    )
    
    $
    55,351Financing Costs
    
    
    24,648
    
    
    
    (6,291
    )
    
    
    18,357Total
    
    $
    108,277
    
    
    $
    (34,569
    )
    
    $
    73,708
 INTANGIBLE ASSETS
  March 31, 2007AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    183,089
    
    
    $
    (51,153
    )
    
    $
    131,936Tenant relationship value
    
    
    119,377
    
    
    
    (22,375
    )
    
    
    97,002Above market leases acquired
    
    
    31,878
    
    
    
    (12,432
    )
    
    
    19,446Total
    
    $
    334,344
    
    
    $
    (85,960
    )
    
    $
    248,384Below market leases acquired
    
    $
    103,865
    
    
    $
    (27,226
    )
    
    $
    76,639
 December 31, 2006AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    207,513
    
    
    $
    (52,293
    )
    
    $
    155,220Tenant relationship value
    
    
    124,605
    
    
    
    (19,572
    )
    
    
    105,033Above market leases acquired
    
    
    32,667
    
    
    
    (11,669
    )
    
    
    20,998Total
    
    $
    364,785
    
    
    $
    (83,534
    )
    
    $
    281,251Below market leases acquired
    
    $
    118,536
    
    
    $
    (26,009
    )
    
    $
    92,527
 16




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Assets
    
    
    Liabilities2007
    
    $
    39,395
    
    
    $
    14,0092008
    
    
    45,049
    
    
    
    14,7472009
    
    
    39,795
    
    
    
    12,7582010
    
    
    33,920
    
    
    
    10,2582011
    
    
    27,040
    
    
    
    8,471Thereafter
    
    
    63,185
    
    
    
    16,396Total
    
    $
    248,384
    
    
    $
    76,639
 DEBT OBLIGATIONS
  17




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 MORTGAGE DEBT
 EffectiveMarch 31,
    
    
    December 31,
    
    
    Interest
    
    
    
    MaturityProperty / Location
    
    2007
    
    
    2006
    
    
    Rate
    
    
    
    DateInterstate Center
    
    
    
    
    
    
    552
    
    
    6.19%
    
    
    
    Mar-07The Bluffs
    
    
    10,700
    
    
    
    10,700
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Pacific Ridge
    
    
    14,500
    
    
    
    14,500
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Pacific View/Camino
    
    
    26,000
    
    
    
    26,000
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Computer Associates Building
    
    
    31,000
    
    
    
    31,000
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Presidents Plaza
    
    
    30,900
    
    
    
    30,900
    
    
    6.00%
    
    (a), (b)
    
    Apr-07440 & 442 Creamery Way
    
    
    5,379
    
    
    
    5,421
    
    
    8.55%
    
    (b)
    
    May-07481 John Young Way
    
    
    2,277
    
    
    
    2,294
    
    
    8.40%
    
    
    
    Nov-07400 Commerce Drive
    
    
    11,742
    
    
    
    11,797
    
    
    7.12%
    
    
    
    Jun-08Two Logan Square
    
    
    71,054
    
    
    
    71,348
    
    
    5.78%
    
    (a)
    
    Jul-09200 Commerce Drive
    
    
    5,821
    
    
    
    5,841
    
    
    7.12%
    
    (a)
    
    Jan-101333 Broadway
    
    
    24,311
    
    
    
    24,418
    
    
    5.18%
    
    (a)
    
    May-10The Ordway
    
    
    46,033
    
    
    
    46,199
    
    
    7.95%
    
    (a)
    
    Aug-10World Savings Center
    
    
    27,424
    
    
    
    27,524
    
    
    7.91%
    
    (a)
    
    Nov-10Plymouth Meeting Exec.
    
    
    43,949
    
    
    
    44,103
    
    
    7.00%
    
    (a)
    
    Dec-10Four Tower Bridge
    
    
    10,591
    
    
    
    10,626
    
    
    6.62%
    
    
    
    Feb-11Arboretum I, II, III & V
    
    
    22,623
    
    
    
    22,750
    
    
    7.59%
    
    
    
    Jul-11Midlantic Drive/Lenox Drive/DCC I
    
    
    62,289
    
    
    
    62,678
    
    
    8.05%
    
    
    
    Oct-11Research Office Center
    
    
    42,040
    
    
    
    42,205
    
    
    7.64%
    
    (a)
    
    Oct-11Concord Airport Plaza
    
    
    38,245
    
    
    
    38,461
    
    
    7.20%
    
    (a)
    
    Jan-12Six Tower Bridge
    
    
    14,655
    
    
    
    14,744
    
    
    7.79%
    
    
    
    Aug-12Newtown Square/Berwyn Park/Libertyview
    
    
    63,011
    
    
    
    63,231
    
    
    7.25%
    
    
    
    May-13Coppell Associates
    
    
    3,682
    
    
    
    3,737
    
    
    6.89%
    
    
    
    Dec-13Southpoint III
    
    
    4,822
    
    
    
    4,949
    
    
    7.75%
    
    
    
    Apr-14Tysons Corner
    
    
    100,000
    
    
    
    100,000
    
    
    4.84%
    
    (a)
    
    Aug-15Coppell Associates
    
    
    16,600
    
    
    
    16,600
    
    
    5.75%
    
    
    
    Mar-16Grande A
    
    
    59,190
    
    
    
    59,513
    
    
    7.48%
    
    
    
    Jul-27Grande B
    
    
    77,120
    
    
    
    77,535
    
    
    7.48%
    
    
    
    Jul-27Principal balance outstanding
    
    
    865,958
    
    
    
    869,626Plus: unamortized fixed-rate debt premiums
    
    
    13,274
    
    
    
    14,294Total mortgage indebtedness
    
    $
    879,232
    
    
    $
    883,920UNSECURED DEBT:Line-of-Credit
    
    
    404,000
    
    
    
    60,000
    
    
    Libor + 0.80%
    
    Dec-092009 Five Year Notes
    
    
    275,000
    
    
    
    275,000
    
    
    4.62%
    
    
    
    Nov-092014 Ten Year Notes
    
    
    250,000
    
    
    
    250,000
    
    
    5.53%
    
    
    
    Nov-14Private Placement Notes due 2008
    
    
    113,000
    
    
    
    113,000
    
    
    4.34%
    
    
    
    Dec-082010 Five Year Notes
    
    
    300,000
    
    
    
    300,000
    
    
    5.61%
    
    
    
    Dec-10Indenture IA (Preferred Trust I)
    
    
    27,062
    
    
    
    27,062
    
    
    Libor + 1.25%
    
    Mar-35Indenture IB (Preferred Trust I)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    Apr-35Indenture II (Preferred Trust II)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    Jul-352009 Three Year Notes
    
    
    -
    
    
    
    300,000
    
    
    Libor + 0.45
    
    Apr-092012 Six Year Notes
    
    
    300,000
    
    
    
    300,000
    
    
    5.77%
    
    
    
    Apr-122016 Ten Year Notes
    
    
    250,000
    
    
    
    250,000
    
    
    5.95%
    
    
    
    Apr-163.874% Exchangeable Notes
    
    
    345,000
    
    
    
    345,000
    
    
    3.87%
    
    
    
    Oct-11Principal balance outstanding
    
    
    2,315,610
    
    
    
    2,271,610Plus: unamortized fixed-rate debt premiums
    
    
    (3,175
    )
    
    
    (3,300
    )Total mortgage indebtedness
    
    $
    2,312,435
    
    
    $
    2,268,310Total Debt Obligations
    
    $
    3,191,667
    
    
    $
    3,152,230
   18




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
         19




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   2007
    
    $
    129,6832008
    
    
    138,2272009
    
    
    762,3062010
    
    
    453,8032011
    
    
    481,158Thereafter
    
    
    1,216,391Total indebtedness
    
    $
    3,181,568
 RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
 Risk Management
  Use of Derivative Financial Instruments
    20




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   Concentration of Credit Risk
  DISCONTINUED OPERATIONS
  Three-month periodended March 31, 2007Revenue:Rents
    
    $
    10,937Tenant reimbursements
    
    
    684Other
    
    
    69Total revenue
    
    
    11,690Expenses:Property operating expenses
    
    
    4,012Real estate taxes
    
    
    1,308Depreciation and amortization
    
    
    4,594Total operating expenses
    
    
    9,914Income from discontinued operations before gain on
sale of interests in real estate and minority interest
    
    
    1,776Net gain on sale of interests in real estate
    
    
    26,009Minority interest attributable to discontinued
operations  LP units
    
    
    (1,186
    )Income from discontinued operations
    
    $
    26,599
 21




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Three-month periodended March 31, 2006Revenue:Rents
    
    $
    24,713Tenant reimbursements
    
    
    2,469Other
    
    
    370Total revenue
    
    
    27,552Expenses:Property operating expenses
    
    
    9,411Real estate taxes
    
    
    3,487Depreciation and amortization
    
    
    9,122Total operating expenses
    
    
    22,020Operating income
    
    
    5,532Interest expense
    
    
    (286
    )Income from discontinued operations before gain on
sale of interests in real estate and minority interest
    
    
    5,246Minority interest  partners share of consolidated
real estate venture
    
    
    (187
    )Minority interest attributable to discontinued
operations  LP units
    
    
    (227
    )Income from discontinued operations
    
    $
    4,832
  Real Estate Investments:Operating Property
    
    $
    114,237Accumulated depreciation
    
    
    (7,774
    )106,463Other assets
    
    
    20,870Total Assets Held for Sale
    
    $
    127,333Other liabilities
    
    $
    14,404
  MINORITY INTEREST IN OPERATING PARTNERSHIP AND REAL ESTATE VENTURES
   22




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  BENEFICIARIES EQUITY
 Earnings per Share (EPS)
  Three-month periods ended March 31,2007
    
    
    2006Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedIncome (loss) from continuing operations
    
    $
    (7,227
    )
    
    $
    (7,227
    )
    
    $
    (7,474
    )
    
    $
    (7,474
    )Income (loss) from discontinued operations
    
    
    26,599
    
    
    
    26,599
    
    
    
    4,832
    
    
    
    4,832Income allocated to Preferred Shares
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )Net income available to common shareholders
    
    $
    17,374
    
    
    $
    17,374
    
    
    $
    (4,640
    )
    
    $
    (4,640
    )Weighted-average shares outstanding
    
    
    88,287,426
    
    
    
    88,287,426
    
    
    
    89,299,967
    
    
    
    89,299,967Contingent securities/Stock based compensation
    
    
    
    
    
    
    948,916
    
    
    
    
    
    
    
    443,014Total weighted-average shares outstanding
    
    
    88,287,426
    
    
    
    89,236,342
    
    
    
    89,299,967
    
    
    
    89,742,981Earnings per Common Share:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.10
    )
    
    $
    (0.11
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.30
    
    
    
    0.05
    
    
    
    0.05$
    0.20
    
    
    $
    0.19
    
    
    $
    (0.05
    )
    
    $
    (0.05
    )
  Common and Preferred Shares
    23




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Common Share Repurchases
  SHARE BASED COMPENSATION
  Stock Options
  Weighted
    
    
    Weighted AverageAverage
    
    
    Remaining Contractual
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Value (in 000's)Outstanding at January 1, 2007
    
    
    1,286,070
    
    
    $
    26.45
    
    
    
    1.50
    
    
    
    8,739Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (198,495
    )
    
    
    28.80
    
    
    
    0.87
    
    
    
    1,171Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029Vested at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029Exercisable at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029
   Restricted Stock Awards
 24




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##### Table of Contents



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  WeightedAverage GrantShares
    
    
    Date Fair valueNon-vested at January 1, 2007
    
    
    338,860
    
    
    $
    28.23Granted
    
    
    216,828
    
    
    
    35.19Vested
    
    
    (96,068
    )
    
    
    26.28Forfeited
    
    
    (2,124
    )
    
    
    30.55Non-vested at March 31, 2007
    
    
    457,496
    
    
    $
    31.90
 Outperformance Program
   SEGMENT INFORMATION
  25




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BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  26




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##### Table of Contents



BRANDYWINE
REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Pennsylvania 
    
    
    Pennsylvania 
    
    
    
    
    
    
    
    
    
    
    Richmond,
    
    
    Northern
    
    
    Southern
    
    
    MetropolitanWest
    
    
    North
    
    
    New Jersey
    
    
    Urban
    
    
    Virginia
    
    
    California
    
    
    California
    
    
    Washington, D.C.
    
    
    Southwest
    
    
    Corporate
    
    
    TotalAs of March 31, 2007:Real estate investments, at cost:Operating properties
    
    $
    926,700
    
    
    $
    440,726
    
    
    $
    554,586
    
    
    $
    575,636
    
    
    $
    250,935
    
    
    $
    402,033
    
    
    $
    105,810
    
    
    $
    1,284,748
    
    
    $
    232,640
    
    
    $
    
    
    
    $
    4,773,814Development and
construction-in-progress
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    346,555
    
    
    
    346,555As of December 31,
2006:Real estate investments, at cost:Operating properties
    
    $
    922,347
    
    
    $
    530,436
    
    
    $
    570,009
    
    
    $
    568,008
    
    
    $
    244,519
    
    
    $
    396,927
    
    
    $
    95,942
    
    
    $
    1,255,940
    
    
    $
    343,177
    
    
    $
    
    
    
    $
    4,927,305Development and
construction-in-progress
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    328,119
    
    
    
    328,119For the three-months
ended March 31, 2007:Total revenue
    
    $
    27,509
    
    
    $
    19,481
    
    
    $
    24,675
    
    
    $
    23,455
    
    
    $
    8,940
    
    
    $
    15,091
    
    
    $
    3,141
    
    
    $
    32,385
    
    
    $
    8,239
    
    
    $
    185
    
    
    $
    163,101Property operating
expenses
    
    
    11,696
    
    
    
    7,641
    
    
    
    11,264
    
    
    
    9,734
    
    
    
    3,495
    
    
    
    6,679
    
    
    
    1,727
    
    
    
    11,785
    
    
    
    4,222
    
    
    
    (7,011
    )
    
    
    61,232Net operating income
    
    $
    15,813
    
    
    $
    11,840
    
    
    $
    13,411
    
    
    $
    13,721
    
    
    $
    5,445
    
    
    $
    8,412
    
    
    $
    1,414
    
    
    $
    20,600
    
    
    $
    4,017
    
    
    $
    7,196
    
    
    $
    101,869For the three-months
ended March 31, 2006:Total revenue
    
    $
    25,233
    
    
    $
    18,275
    
    
    $
    23,695
    
    
    $
    19,560
    
    
    $
    7,483
    
    
    $
    13,678
    
    
    $
    2,674
    
    
    $
    26,157
    
    
    $
    9,409
    
    
    $
    (2,246
    )
    
    $
    143,918Property operating
expenses
    
    
    8,468
    
    
    
    9,776
    
    
    
    9,815
    
    
    
    8,871
    
    
    
    2,966
    
    
    
    5,137
    
    
    
    1,103
    
    
    
    9,270
    
    
    
    3,795
    
    
    
    (4,020
    )
    
    
    55,181Net operating income
    
    $
    16,765
    
    
    $
    8,499
    
    
    $
    13,880
    
    
    $
    10,689
    
    
    $
    4,517
    
    
    $
    8,541
    
    
    $
    1,571
    
    
    $
    16,887
    
    
    $
    5,614
    
    
    $
    1,774
    
    
    $
    88,737
 27




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##### Table of Contents



BRANDYWINE
REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Three-month periodsended March 31,2007
    
    
    2006Consolidated net operating income (loss)
    
    $
    101,869
    
    
    $
    88,737Less:Interest income
    
    
    787
    
    
    
    2,650Interest expense
    
    
    (40,358
    )
    
    
    (40,378
    )Deferred financing costs
    
    
    (1,258
    )
    
    
    (479
    )Depreciation and amortization
    
    
    (62,047
    )
    
    
    (51,212
    )Administrative expenses
    
    
    (7,269
    )
    
    
    (8,490
    )Minority interest  partners share of consolidated
real estate ventures
    
    
    (116
    )
    
    
    298Minority interest attributable to continuing
operations  LP units
    
    
    411
    
    
    
    435Plus:Equity in income of real estate ventures
    
    
    754
    
    
    
    965Income (loss) from continuing operations
    
    
    (7,227
    )
    
    
    (7,474
    )Income (loss) from discontinued operations
    
    
    26,599
    
    
    
    4,832Net income (loss)
    
    $
    19,372
    
    
    $
    (2,642
    )
 COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
   Environmental
  Ground Rent
  28




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##### Table of Contents



BRANDYWINE
REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Other Commitments or Contingencies
     SUBSEQUENT EVENTS
     29




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 
 BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share information)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSReal estate investments:Operating properties
    
    $
    4,773,814
    
    
    $
    4,927,305Accumulated depreciation
    
    
    (522,286
    )
    
    
    (515,698
    )Operating real estate investments, net
    
    
    4,251,528
    
    
    
    4,411,607Development land and construction-in-progress
    
    
    346,555
    
    
    
    328,119Total real
estate investments, net
    
    
    4,598,083
    
    
    
    4,739,726Cash and cash equivalents
    
    
    3,885
    
    
    
    25,379Cash escrowed with qualified intermediary (Note 3)
    
    
    109,102
    
    
    
    Accounts receivable, net
    
    
    18,339
    
    
    
    19,957Accrued rent receivable, net
    
    
    72,433
    
    
    
    71,589Asset held for sale, net
    
    
    127,333
    
    
    
    126,016Investment in real estate ventures, at equity
    
    
    72,983
    
    
    
    74,574Deferred costs, net
    
    
    77,002
    
    
    
    73,708Intangible assets, net
    
    
    248,384
    
    
    
    281,251Other assets
    
    
    107,936
    
    
    
    96,818Total assets
    
    $
    5,435,480
    
    
    $
    5,509,018LIABILITIES AND PARTNERS EQUITYMortgage notes payable
    
    $
    879,232
    
    
    $
    883,920Unsecured notes, net of discounts
    
    
    1,908,435
    
    
    
    2,208,310Unsecured credit facility
    
    
    404,000
    
    
    
    60,000Accounts payable and accrued expenses
    
    
    103,650
    
    
    
    108,400Distributions payable
    
    
    42,321
    
    
    
    42,760Tenant security deposits and deferred rents
    
    
    58,655
    
    
    
    55,697Acquired below market leases, net
    
    
    76,639
    
    
    
    92,527Other liabilities
    
    
    16,620
    
    
    
    14,661Mortgage notes payable and other liabilities held for sale
    
    
    14,404
    
    
    
    20,826Total liabilities
    
    
    3,503,956
    
    
    
    3,487,101Minority interest  partners share of consolidated real estate ventures
    
    
    
    
    
    
    34,436Commitments and contingencies (Note 14)Redeemable limited partnership units at redemption value;3,939,284 and 3,961,235 issued and outstanding in 2007 and 2006, respectively
    
    
    135,039
    
    
    
    131,711Partners equity:7.50% Series D Preferred Mirror Units; 2,000,000 issued and outstanding in 2007
and 2006
    
    
    47,912
    
    
    
    47,9127.375% Series E Preferred Mirror Units; 2,300,000 issued and outstanding in 2007
and 2006
    
    
    55,538
    
    
    
    55,538General Partnership Capital, 87,302,191 and 88,327,041 units issued and outstanding
in 2007 and 2006, respectively
    
    
    1,690,608
    
    
    
    1,750,745Accumulated other comprehensive loss
    
    
    2,427
    
    
    
    1,575Total partners equity
    
    
    1,796,485
    
    
    
    1,855,770Total liabilities, minority interest, and partners equity
    
    $
    5,435,480
    
    
    $
    5,509,018
  30




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)
 For the three-month periodsended March 31,2007
    
    
    2006Revenue:Rents
    
    $
    137,940
    
    
    $
    123,069Tenant reimbursements
    
    
    20,823
    
    
    
    16,634Other
    
    
    4,338
    
    
    
    4,215Total revenue
    
    
    163,101
    
    
    
    143,918Operating Expenses:Property operating expenses
    
    
    61,232
    
    
    
    55,181Depreciation and amortization
    
    
    62,047
    
    
    
    51,212Administrative expenses
    
    
    7,269
    
    
    
    8,490Total operating expenses
    
    
    130,548
    
    
    
    114,883Operating income
    
    
    32,553
    
    
    
    29,035Other Income (Expense):Interest income
    
    
    787
    
    
    
    2,650Interest expense
    
    
    (40,358
    )
    
    
    (40,378
    )Interest expense  Deferred financing costs
    
    
    (1,258
    )
    
    
    (479
    )Equity in income of real estate ventures
    
    
    754
    
    
    
    965Income (loss) before minority interest
    
    
    (7,522
    )
    
    
    (8,207
    )Minority interest  partners share of consolidated real estate ventures
    
    
    (116
    )
    
    
    298Income (loss) from continuing operations
    
    
    (7,638
    )
    
    
    (7,909
    )Discontinued operations:Income from discontinued operations
    
    
    1,776
    
    
    
    5,246Net gain on disposition of discontinued operations
    
    
    26,009
    
    
    
    Minority interest  partners share of consolidated real estate ventures
    
    
    
    
    
    
    (187
    )Income from discontinued operations
    
    
    27,785
    
    
    
    5,059Net income (loss)
    
    
    20,147
    
    
    
    (2,850
    )Income allocated to Preferred Units
    
    
    (1,998
    )
    
    
    (1,998
    )Income (loss) allocated to Common Partnership Units
    
    $
    18,149
    
    
    $
    (4,848
    )Basic earnings per Common Partnership Unit:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.05$
    0.20
    
    
    $
    (0.05
    )Diluted earnings per Common Partnership Unit:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.05$
    0.19
    
    
    $
    (0.05
    )Basic weighted average Common Partnership Unit
    
    
    92,227,034
    
    
    
    93,318,834Diluted weighted average Common Partnership Unit
    
    
    93,175,950
    
    
    
    93,761,848
  31




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(unaudited, in thousands)
 For the three-monthperiods ended March 31,2007
    
    
    2006Net income (loss)
    
    $
    18,149
    
    
    $
    (4,848
    )Other comprehensive income:Unrealized gain (loss) on derivative financial instruments
    
    
    1,450
    
    
    
    1,758Less: minority interest  consolidated real estate venture partners share of
unrealized gain (loss) on derivative financial instruments
    
    
    
    
    
    
    (513
    )Settlement of forward starting swaps
    
    
    
    
    
    
    3,266Reclassification of realized (gains)/losses on derivative financial
instruments to operations, net
    
    
    9
    
    
    
    96Unrealized gain (loss) on available-for-sale securities
    
    
    (607
    )
    
    
    (592
    )Total other comprehensive income (loss)
    
    
    852
    
    
    
    4,015Comprehensive income
    
    $
    19,001
    
    
    $
    (833
    )
  32




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 Three-month periodsended March 31,2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    18,149
    
    
    $
    (4,848
    )Adjustments to reconcile net income (loss) to net cash from
operating activities:Depreciation
    
    
    48,508
    
    
    
    41,079Amortization:Deferred financing costs
    
    
    1,257
    
    
    
    480Deferred leasing costs
    
    
    3,842
    
    
    
    2,166Acquired above (below) market leases, net
    
    
    (3,613
    )
    
    
    (1,939
    )Acquired lease intangibles
    
    
    14,247
    
    
    
    16,806Deferred compensation costs
    
    
    1,213
    
    
    
    776Straight-line rent
    
    
    (7,063
    )
    
    
    (7,708
    )Provision for doubtful accounts
    
    
    500
    
    
    
    1,056Real estate venture income in excess of distributions
    
    
    (84
    )
    
    
    (486
    )Net gain on sale of interests in real estate
    
    
    (26,009
    )
    
    
    Minority interest
    
    
    2,114
    
    
    
    1,887Changes in assets and liabilities:Accounts receivable
    
    
    5,416
    
    
    
    (4,018
    )Other assets
    
    
    (11,167
    )
    
    
    (7,482
    )Accounts payable and accrued expenses
    
    
    7,286
    
    
    
    3,870Tenant security deposits and deferred rents
    
    
    3,390
    
    
    
    10,918Other liabilities
    
    
    (7,465
    )
    
    
    2,681Net cash from operating activities
    
    
    50,521
    
    
    
    55,238Cash flows from investing activities:Acquisition of Prentiss
    
    
    
    
    
    
    (935,856
    )Acquisition of properties
    
    
    
    
    
    
    (12,480
    )Acquisition of minority interest  partners share of consolidated real estate venture
    
    
    (63,732
    )
    
    
    Sales of properties, net
    
    
    109,127
    
    
    
    134,064Capital expenditures
    
    
    (68,015
    )
    
    
    (52,364
    )Investment in unconsolidated real estate ventures
    
    
    (512
    )
    
    
    (358
    )Cash distributions from unconsolidated real estate ventures
in excess of equity in income
    
    
    1,849
    
    
    
    1,717Leasing costs
    
    
    (9,259
    )
    
    
    (2,621
    )Net cash from investing activities
    
    
    (30,542
    )
    
    
    (867,898
    )Cash flows from financing activities:Proceeds from Credit Facility borrowings
    
    
    442,000
    
    
    
    215,000Repayments of Credit Facility borrowings
    
    
    (98,000
    )
    
    
    (205,000
    )Proceeds from mortgage notes payable
    
    
    
    
    
    
    20,520Repayments of mortgage notes payable
    
    
    (4,695
    )
    
    
    (6,807
    )Proceeds from term loan
    
    
    
    
    
    
    750,000Repayments of term loan
    
    
    
    
    
    
    (750,000
    )Proceeds from unsecured notes
    
    
    
    
    
    
    847,818Repayments of unsecured notes
    
    
    (299,866
    )
    
    
    Proceeds from forward starting swap termination
    
    
    
    
    
    
    3,266Repayments on employee stock loans
    
    
    
    
    
    
    10Debt financing costs
    
    
    (72
    )
    
    
    (5,581
    )Exercise of stock options
    
    
    6,166
    
    
    
    1,923Repurchases of Common Partnership Units
    
    
    (44,677
    )
    
    
    Distributions paid to preferred and common partnership unitholders
    
    
    (42,329
    )
    
    
    (29,362
    )Net cash from financing activities
    
    
    (41,473
    )
    
    
    841,787Increase (decrease) in cash and cash equivalents
    
    
    (21,494
    )
    
    
    29,127Cash and cash equivalents at beginning of period
    
    
    25,379
    
    
    
    7,174Cash and cash equivalents at end of period
    
    $
    3,885
    
    
    $
    36,301Supplemental disclosure:Cash paid for interest, net of capitalized interest
    
    $
    24,023
    
    
    $
    23,350Supplemental disclosure of non-cash activity:Common shares issued in the Prentiss acquisition
    
    
    
    
    
    
    1,022,173Operating Partnership units issued in Prentiss acquisitions
    
    
    
    
    
    
    64,103Operating
Partnership units issued in property acquisitions
    
    
    
    
    
    
    13,819Cash escrowed with qualified intermediary (Note 3)
    
    
    109,102
    
    
    
    Debt, minority interest and other liabilities, net, assumed in the Prentiss acquisition
    
    
    
    
    
    
    679,520The accompanying notes are an integral part of these consolidated financial statements.
 33




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 ORGANIZATION AND NATURE OF OPERATIONS
     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
 34
    Table of Contents   BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Principles of Consolidation
  Use of Estimates
  Operating Properties
  Purchase Price Allocation
 35
    Table of Contents   BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
     Revenue Recognition
  Stock-Based Compensation Plans
  36




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   Accounting for Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Hedging Activities
 An Amendment of SFAS 133
  Income Taxes
  37
    Table of Contents   BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   New Pronouncements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 Fair Value Measurements
 Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109
 REAL ESTATE INVESTMENTS
  38




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 March 31, 2007
    
    
    December 31, 2006Land
    
    $
    724,642
    
    
    $
    756,400Building and improvements
    
    
    3,665,362
    
    
    
    3,807,040Tenant improvements
    
    
    383,810
    
    
    
    363,8654,773,814
    
    
    
    4,927,305
 Acquisitions and Dispositions
  2007
   2006
 Prentiss Acquisition
    39




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 At January 5, 2006Real estate investmentsLand  operating
    
    $
    282,584Building and improvements
    
    
    1,942,728Tenant improvements
    
    
    120,610Construction in progress and land inventory
    
    
    57,329Total real estate investments acquired
    
    
    2,403,251Rent receivables
    
    
    6,031Other assets acquired:Intangible assets:In-place leases
    
    
    187,907Relationship values
    
    
    98,382Above-market leases
    
    
    26,352Total intangible assets acquired
    
    
    312,641Investment in real estate ventures
    
    
    66,921Investment in marketable securities
    
    
    193,089Other assets
    
    
    8,868Total other assets
    
    
    581,519Total assets acquired
    
    
    2,990,801Liabilities assumed:Mortgage notes payable
    
    
    532,607Unsecured notes
    
    
    78,610Secured note payable
    
    
    186,116Security deposits and deferred rent
    
    
    6,475Other liabilities:Below-market leases
    
    
    78,911Other liabilities
    
    
    43,995Total other liabilities assumed
    
    
    122,906Total liabilities assumed
    
    
    926,714Minority interest
    
    
    104,658Net assets acquired
    
    $
    1,959,429
   40




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
    Three-month periodended March 31, 2006(unaudited)Pro forma revenue
    
    $
    147,322Pro forma loss from continuing operations
    
    
    (7,544
    )Pro forma loss allocated to common shares
    
    
    (4,482
    )Earnings per common share from continuing operationsBasic  as reported
    
    $
    (0.11
    )Basic  as pro forma
    
    $
    (0.10
    )Diluted  as reported
    
    $
    (0.11
    )Diluted  as pro forma
    
    $
    (0.10
    )Earnings per common shareBasic  as reported
    
    $
    (0.05
    )Basic  as pro forma
    
    $
    (0.05
    )Diluted  as reported
    
    $
    (0.05
    )Diluted  as pro forma
    
    $
    (0.05
    )
    41




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Other Acquisitions and Dispositions
  INVESTMENT IN UNCONSOLIDATED VENTURES
      2007
    
    
    2006Operating property, net of accumulated depreciation
    
    $
    376,574
    
    
    $
    365,168Other assets
    
    
    42,645
    
    
    
    52,935Liabilities
    
    
    26,333
    
    
    
    28,764Debt
    
    
    358,659
    
    
    
    332,589Equity
    
    
    39,610
    
    
    
    56,888Partnerships share of equity (Partnerships basis)
    
    
    72,983
    
    
    
    74,574
  42




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Three-month periodsended March 31,2007
    
    
    2006Revenue
    
    $
    18,314
    
    
    $
    19,724Operating expenses
    
    
    6,297
    
    
    
    7,994Interest expense, net
    
    
    5,238
    
    
    
    4,994Depreciation and amortization
    
    
    4,229
    
    
    
    4,873Net income
    
    
    2,551
    
    
    
    1,862Partnerships share of income (Partnership basis)
    
    
    754
    
    
    
    965
  DEFERRED COSTS
  March 31, 2007Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    88,913
    
    
    $
    (29,083
    )
    
    $
    59,830Financing Costs
    
    
    22,322
    
    
    
    (5,150
    )
    
    
    17,172Total
    
    $
    111,235
    
    
    $
    (34,233
    )
    
    $
    77,002
 December 31, 2006Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    83,629
    
    
    $
    (28,278
    )
    
    $
    55,351Financing Costs
    
    
    24,648
    
    
    
    (6,291
    )
    
    
    18,357Total
    
    $
    108,277
    
    
    $
    (34,569
    )
    
    $
    73,708
 INTANGIBLE ASSETS
  43




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 March 31, 2007AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    183,089
    
    
    $
    (51,153
    )
    
    $
    131,936Tenant relationship value
    
    
    119,377
    
    
    
    (22,375
    )
    
    
    97,002Above market leases acquired
    
    
    31,878
    
    
    
    (12,432
    )
    
    
    19,446Total
    
    $
    334,344
    
    
    $
    (85,960
    )
    
    $
    248,384Below market leases acquired
    
    $
    103,865
    
    
    $
    (27,226
    )
    
    $
    76,639
 December 31, 2006AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    207,513
    
    
    $
    (52,293
    )
    
    $
    155,220Tenant relationship value
    
    
    124,605
    
    
    
    (19,572
    )
    
    
    105,033Above market leases acquired
    
    
    32,667
    
    
    
    (11,669
    )
    
    
    20,998Total
    
    $
    364,785
    
    
    $
    (83,534
    )
    
    $
    281,251Below market leases acquired
    
    $
    118,536
    
    
    $
    (26,009
    )
    
    $
    92,527
  Assets
    
    
    Liabilities2007
    
    $
    39,395
    
    
    $
    14,0092008
    
    
    45,049
    
    
    
    14,7472009
    
    
    39,795
    
    
    
    12,7582010
    
    
    33,920
    
    
    
    10,2582011
    
    
    27,040
    
    
    
    8,471Thereafter
    
    
    63,185
    
    
    
    16,396Total
    
    $
    248,384
    
    
    $
    76,639
 DEBT OBLIGATIONS
  44




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##### Table of Contents



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 MORTGAGE DEBT
 EffectiveMarch 31,
    
    
    December 31,
    
    
    Interest
    
    
    
    MaturityProperty / Location
    
    2007
    
    
    2006
    
    
    Rate
    
    
    
    DateInterstate Center
    
    
    
    
    
    
    552
    
    
    6.19%
    
    
    
    Mar-07The Bluffs
    
    
    10,700
    
    
    
    10,700
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Pacific Ridge
    
    
    14,500
    
    
    
    14,500
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Pacific View/Camino
    
    
    26,000
    
    
    
    26,000
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Computer Associates Building
    
    
    31,000
    
    
    
    31,000
    
    
    6.00%
    
    (a), (b)
    
    Apr-07Presidents Plaza
    
    
    30,900
    
    
    
    30,900
    
    
    6.00%
    
    (a), (b)
    
    Apr-07440 & 442 Creamery Way
    
    
    5,379
    
    
    
    5,421
    
    
    8.55%
    
    (b)
    
    May-07481 John Young Way
    
    
    2,277
    
    
    
    2,294
    
    
    8.40%
    
    
    
    Nov-07400 Commerce Drive
    
    
    11,742
    
    
    
    11,797
    
    
    7.12%
    
    
    
    Jun-08Two Logan Square
    
    
    71,054
    
    
    
    71,348
    
    
    5.78%
    
    (a)
    
    Jul-09200 Commerce Drive
    
    
    5,821
    
    
    
    5,841
    
    
    7.12%
    
    (a)
    
    Jan-101333 Broadway
    
    
    24,311
    
    
    
    24,418
    
    
    5.18%
    
    (a)
    
    May-10The Ordway
    
    
    46,033
    
    
    
    46,199
    
    
    7.95%
    
    (a)
    
    Aug-10World Savings Center
    
    
    27,424
    
    
    
    27,524
    
    
    7.91%
    
    (a)
    
    Nov-10Plymouth Meeting Exec.
    
    
    43,949
    
    
    
    44,103
    
    
    7.00%
    
    (a)
    
    Dec-10Four Tower Bridge
    
    
    10,591
    
    
    
    10,626
    
    
    6.62%
    
    
    
    Feb-11Arboretum I, II, III & V
    
    
    22,623
    
    
    
    22,750
    
    
    7.59%
    
    
    
    Jul-11Midlantic Drive/Lenox Drive/DCC I
    
    
    62,289
    
    
    
    62,678
    
    
    8.05%
    
    
    
    Oct-11Research Office Center
    
    
    42,040
    
    
    
    42,205
    
    
    7.64%
    
    (a)
    
    Oct-11Concord Airport Plaza
    
    
    38,245
    
    
    
    38,461
    
    
    7.20%
    
    (a)
    
    Jan-12Six Tower Bridge
    
    
    14,655
    
    
    
    14,744
    
    
    7.79%
    
    
    
    Aug-12Newtown Square/Berwyn Park/Libertyview
    
    
    63,011
    
    
    
    63,231
    
    
    7.25%
    
    
    
    May-13Coppell Associates
    
    
    3,682
    
    
    
    3,737
    
    
    6.89%
    
    
    
    Dec-13Southpoint III
    
    
    4,822
    
    
    
    4,949
    
    
    7.75%
    
    
    
    Apr-14Tysons Corner
    
    
    100,000
    
    
    
    100,000
    
    
    4.84%
    
    (a)
    
    Aug-15Coppell Associates
    
    
    16,600
    
    
    
    16,600
    
    
    5.75%
    
    
    
    Mar-16Grande A
    
    
    59,190
    
    
    
    59,513
    
    
    7.48%
    
    
    
    Jul-27Grande B
    
    
    77,120
    
    
    
    77,535
    
    
    7.48%
    
    
    
    Jul-27Principal balance outstanding
    
    
    865,958
    
    
    
    869,626Plus: unamortized fixed-rate debt premiums
    
    
    13,274
    
    
    
    14,294Total mortgage indebtedness
    
    $
    879,232
    
    
    $
    883,920UNSECURED DEBT:Line-of-Credit
    
    
    404,000
    
    
    
    60,000
    
    
    Libor + 0.80%
    
    
    
    Dec-092009 Five Year Notes
    
    
    275,000
    
    
    
    275,000
    
    
    4.62%
    
    
    
    Nov-092014 Ten Year Notes
    
    
    250,000
    
    
    
    250,000
    
    
    5.53%
    
    
    
    Nov-14Private Placement Notes due 2008
    
    
    113,000
    
    
    
    113,000
    
    
    4.34%
    
    
    
    Dec-082010 Five Year Notes
    
    
    300,000
    
    
    
    300,000
    
    
    5.61%
    
    
    
    Dec-10Indenture IA (Preferred Trust I)
    
    
    27,062
    
    
    
    27,062
    
    
    Libor + 1.25%
    
    
    
    Mar-35Indenture IB (Preferred Trust I)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    
    
    Apr-35Indenture II (Preferred Trust II)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    
    
    Jul-352009 Three Year Notes
    
    
    
    
    
    
    300,000
    
    
    Libor + 0.45
    
    
    
    Apr-092012 Six Year Notes
    
    
    300,000
    
    
    
    300,000
    
    
    5.77%
    
    
    
    Apr-122016 Ten Year Notes
    
    
    250,000
    
    
    
    250,000
    
    
    5.95%
    
    
    
    Apr-163.874% Exchangeable Notes
    
    
    345,000
    
    
    
    345,000
    
    
    3.87%
    
    
    
    Oct-11Principal balance outstanding
    
    
    2,315,610
    
    
    
    2,271,610Plus: unamortized fixed-rate debt premiums
    
    
    (3,175
    )
    
    
    (3,300
    )Total mortgage indebtedness
    
    $
    2,312,435
    
    
    $
    2,268,310Total Debt Obligations
    
    $
    3,191,667
    
    
    $
    3,152,230
 
 (a)
    
    Loans were assumed upon acquisition of the related property. Interest rates presented above
reflect the market rate at the time of acquisition.(b)
    
    In April 2007, the Partnership has elected to prepay the loan on the date indicated in the
Maturity date column. 45




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
        46




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   2007
    
    $
    129,6832008
    
    
    138,2272009
    
    
    762,3062010
    
    
    453,8032011
    
    
    481,158Thereafter
    
    
    1,216,391Total indebtedness
    
    $
    3,181,568
 RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
 Risk Management
  Use of Derivative Financial Instruments
    47




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   Concentration of Credit Risk
  DISCONTINUED OPERATIONS
  Three-month periodended March 31, 2007Revenue:Rents
    
    $
    10,937Tenant reimbursements
    
    
    684Other
    
    
    69Total revenue
    
    
    11,690Expenses:Property operating expenses
    
    
    4,012Real estate taxes
    
    
    1,308Depreciation and amortization
    
    
    4,594Total operating expenses
    
    
    9,914Income from discontinued operations before gain on
sale of interests in real estate and minority interest
    
    
    1,776Net gain on sale of interests in real estate
    
    
    26,009Income from discontinued operations
    
    $
    27,785
  48




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Three-month periodended March 31, 2006Revenue:Rents
    
    $
    24,713Tenant reimbursements
    
    
    2,469Other
    
    
    370Total revenue
    
    
    27,552Expenses:Property operating expenses
    
    
    9,411Real estate taxes
    
    
    3,487Depreciation and amortization
    
    
    9,122Total operating expenses
    
    
    22,020Operating income
    
    
    5,532Interest expense
    
    
    (286
    )Income from discontinued operations before gain on
sale of interests in real estate and minority interest
    
    
    5,246Minority interest  partners share of consolidated
real estate venture
    
    
    (187
    )Income from discontinued operations
    
    $
    5,059
  Real Estate Investments:Operating Property
    
    $
    114,237Accumulated depreciation
    
    
    (7,774
    )106,463Other assets
    
    
    20,870Total Assets Held for Sale
    
    $
    127,333Other liabilities
    
    $
    14,404
  MINORITY INTEREST IN REAL ESTATE VENTURES
   PARTNERS EQUITY
 Earnings per Common Partnership Unit
  49




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Three-month periods ended March 31,2007
    
    
    2006Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedIncome (loss) from continuing operations
    
    $
    (7,638
    )
    
    $
    (7,638
    )
    
    $
    (7,909
    )
    
    $
    (7,909
    )Income (loss) from discontinued operations
    
    
    27,785
    
    
    
    27,785
    
    
    
    5,059
    
    
    
    5,059Income allocated to Preferred Units
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )Net income available to common partnership
unitholders
    
    $
    18,149
    
    
    $
    18,149
    
    
    $
    (4,848
    )
    
    $
    (4,848
    )Weighted-average common partnership units
outstanding
    
    
    92,227,034
    
    
    
    92,227,034
    
    
    
    93,318,834
    
    
    
    93,318,834Contingent securities/Stock based compensation
    
    
    
    
    
    
    948,916
    
    
    
    
    
    
    
    443,014Total weighted-average partnership units outstanding
    
    
    92,227,034
    
    
    
    93,175,950
    
    
    
    93,318,834
    
    
    
    93,761,848Earnings per Common Partnership Unit:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.10
    )
    
    $
    (0.11
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.30
    
    
    
    0.30
    
    
    
    0.05
    
    
    
    0.05$
    0.20
    
    
    $
    0.19
    
    
    $
    (0.05
    )
    
    $
    (0.05
    )
 Common Partnership Unit and Preferred Mirror Units
   Common Share Repurchases
  SHARE BASED COMPENSATION
  50




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 Stock Options
  Weighted
    
    
    Weighted AverageAverage
    
    
    Remaining Contractual
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Value (in 000s)Outstanding at January 1, 2007
    
    
    1,286,070
    
    
    $
    26.45
    
    
    
    1.50
    
    
    
    8,739Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (198,495
    )
    
    
    28.80
    
    
    
    0.87
    
    
    
    1,171Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029Vested at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029Exercisable at March 31, 2007
    
    
    1,087,575
    
    
    $
    26.03
    
    
    
    1.32
    
    
    
    8,029
   Restricted Stock Awards
  WeightedAverage GrantShares
    
    
    Date Fair valueNon-vested at January 1, 2007
    
    
    338,860
    
    
    $
    28.23Granted
    
    
    216,828
    
    
    
    35.19Vested
    
    
    (96,068
    )
    
    
    26.28Forfeited
    
    
    (2,124
    )
    
    
    30.55Non-vested at March 31, 2007
    
    
    457,496
    
    
    $
    31.90
 Outperformance Program
  51




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
   SEGMENT INFORMATION
  52




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Pennsylvania
    
    
    Pennsylvania
    
    
    
    
    
    
    
    
    
    Richmond,
    
    
    Northern
    
    
    Southern
    
    
    MetropolitanWest
    
    
    North
    
    
    New Jersey
    
    
    Urban
    
    
    Virginia
    
    
    California
    
    
    California
    
    
    Washington, D.C.
    
    
    Southwest
    
    
    Corporate
    
    
    TotalAs of March 31, 2007:Real estate investments, at cost:Operating properties
    
    $
    926,700
    
    
    $
    440,726
    
    
    $
    554,586
    
    
    $
    575,636
    
    
    $
    250,935
    
    
    $
    402,033
    
    
    $
    105,810
    
    
    $
    1,284,748
    
    
    $
    232,640
    
    
    $
    
    
    
    $
    4,773,814Development and
construction-in-progress
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    346,555
    
    
    
    346,555As of December 31,
2006:Real estate investments, at cost:Operating properties
    
    $
    922,347
    
    
    $
    530,436
    
    
    $
    570,009
    
    
    $
    568,008
    
    
    $
    244,519
    
    
    $
    396,927
    
    
    $
    95,942
    
    
    $
    1,255,940
    
    
    $
    343,177
    
    
    $
    
    
    
    $
    4,927,305Development and
construction-in-progress
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    328,119
    
    
    
    328,119For the three-months ended
March 31, 2007:Total revenue
    
    $
    27,509
    
    
    $
    19,481
    
    
    $
    24,675
    
    
    $
    23,455
    
    
    $
    8,940
    
    
    $
    15,091
    
    
    $
    3,141
    
    
    $
    32,385
    
    
    $
    8,239
    
    
    $
    185
    
    
    $
    163,101Property operating
expenses
    
    
    11,696
    
    
    
    7,641
    
    
    
    11,264
    
    
    
    9,734
    
    
    
    3,495
    
    
    
    6,679
    
    
    
    1,727
    
    
    
    11,785
    
    
    
    4,222
    
    
    
    (7,011
    )
    
    
    61,232Net operating income
    
    $
    15,813
    
    
    $
    11,840
    
    
    $
    13,411
    
    
    $
    13,721
    
    
    $
    5,445
    
    
    $
    8,412
    
    
    $
    1,414
    
    
    $
    20,600
    
    
    $
    4,017
    
    
    $
    7,196
    
    
    $
    101,869For the three-months ended
March 31, 2006:Total revenue
    
    $
    25,233
    
    
    $
    18,275
    
    
    $
    23,695
    
    
    $
    19,560
    
    
    $
    7,483
    
    
    $
    13,678
    
    
    $
    2,674
    
    
    $
    26,157
    
    
    $
    9,409
    
    
    $
    (2,246
    )
    
    $
    143,918Property operating
expenses
    
    
    8,468
    
    
    
    9,776
    
    
    
    9,815
    
    
    
    8,871
    
    
    
    2,966
    
    
    
    5,137
    
    
    
    1,103
    
    
    
    9,270
    
    
    
    3,795
    
    
    
    (4,020
    )
    
    
    55,181Net operating income
    
    $
    16,765
    
    
    $
    8,499
    
    
    $
    13,880
    
    
    $
    10,689
    
    
    $
    4,517
    
    
    $
    8,541
    
    
    $
    1,571
    
    
    $
    16,887
    
    
    $
    5,614
    
    
    $
    1,774
    
    
    $
    88,737
 53




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
  Three-month periodsended March 31,2007
    
    2006Consolidated net operating income (loss)
    
    $
    101,869
    
    
    $
    88,737Less:Interest income
    
    
    787
    
    
    
    2,650Interest expense
    
    
    (40,358
    )
    
    
    (40,378
    )Deferred financing costs
    
    
    (1,258
    )
    
    
    (479
    )Depreciation and amortization
    
    
    (62,047
    )
    
    
    (51,212
    )Administrative expenses
    
    
    (7,269
    )
    
    
    (8,490
    )Minority interest  partners share of consolidated
real estate ventures
    
    
    (116
    )
    
    
    298Plus:Equity in income of real estate ventures
    
    
    754
    
    
    
    965Income (loss) from continuing operations
    
    
    (7,638
    )
    
    
    (7,909
    )Income (loss) from discontinued operations
    
    
    27,785
    
    
    
    5,059Net income (loss)
    
    $
    20,147
    
    
    $
    (2,850
    )
 COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
   Environmental
  Ground Rent
  Other Commitments or Contingencies
 54




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BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
     SUBSEQUENT EVENTS
     55




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    changes in general economic conditions;
    
    changes in local real estate conditions (including changes in rental rates and the
number of competing properties);
    
    changes in the economic conditions affecting industries in which our principal tenants compete;
    
    our failure to lease unoccupied space in accordance with our projections;
    
    our failure to re-lease occupied space upon expiration of leases;
    
    the bankruptcy of major tenants;
    
    changes in prevailing interest rates;
    
    the unavailability of equity and debt financing;
    
    unanticipated costs associated with the acquisition and integration of our acquisitions;
    
    unanticipated costs to complete and lease-up pending developments;
    
    impairment charges;
    
    increased costs for, or lack of availability of, adequate insurance, including for terrorist acts;
    
    demand for tenant services beyond those traditionally provided by landlords;
    
    potential liability under environmental or other laws;
    
    earthquakes and other natural disasters;
    
    risks associated with state and local tax audits:
    
    the existence of complex regulations relating to our status as a REIT and to our
acquisition, disposition and development activities, the adverse consequences of our
failure to qualify as a REIT;
    
    the impact of newly adopted accounting principles on our accounting policies and on
period-to-period comparisons of financial results and the other risks identified in the
Risk Factors section and elsewhere in our Annual Report on Form 10-K for the year ended
December 31, 2006.
     56




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Tenant Rollover Risk
 Tenant Credit Risk
 Development Risk
 57




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58




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##### Table of Contents



Comparison of the Three-Month Periods Ended March 31, 2007 and 2006
   59




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Properties
    
    
    Development
    
    
    Administrative/Same Store Property Portfolio
    
    
    Acquired
    
    
    Properties (a)
    
    
    Eliminations (b)
    
    
    Total PortfolioIncrease/
    
    
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase/
    
    
    %(dollars in thousands)
    
    2007
    
    
    2006
    
    
    (Decrease)
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    (Decrease)
    
    
    ChangeRevenue:Cash rents
    
    $
    113,350
    
    
    $
    107,932
    
    
    $
    5,418
    
    
    
    5.0
    %
    
    $
    4,756
    
    
    $
    
    
    
    $
    9,625
    
    
    $
    7,035
    
    
    $
    (880
    )
    
    $
    103
    
    
    $
    126,851
    
    
    $
    115,070
    
    
    $
    11,781
    
    
    
    10
    %Straight-line rents
    
    
    3,372
    
    
    
    4,851
    
    
    
    (1,479
    )
    
    
    -30.5
    %
    
    
    127
    
    
    
    
    
    
    
    4,745
    
    
    
    1,209
    
    
    
    
    
    
    
    
    
    
    
    8,244
    
    
    
    6,060
    
    
    
    2,184
    
    
    
    36
    %Rents  FAS 141
    
    
    2,258
    
    
    
    2,064
    
    
    
    194
    
    
    
    9.4
    %
    
    
    713
    
    
    
    
    
    
    
    (126
    )
    
    
    (125
    )
    
    
    
    
    
    
    
    
    
    
    2,845
    
    
    
    1,939
    
    
    
    906
    
    
    
    47
    %Total rents
    
    
    118,980
    
    
    
    114,847
    
    
    
    4,133
    
    
    
    3.6
    %
    
    
    5,596
    
    
    
    
    
    
    
    14,244
    
    
    
    8,119
    
    
    
    (880
    )
    
    
    103
    
    
    
    137,940
    
    
    
    123,069
    
    
    
    14,871
    
    
    
    12
    %Tenant reimbursements
    
    
    19,346
    
    
    
    15,739
    
    
    
    3,607
    
    
    
    22.9
    %
    
    
    268
    
    
    
    
    
    
    
    1,100
    
    
    
    773
    
    
    
    109
    
    
    
    122
    
    
    
    20,823
    
    
    
    16,634
    
    
    
    4,189
    
    
    
    25
    %Termination fess
    
    
    558
    
    
    
    589
    
    
    
    (31
    )
    
    
    -5.3
    %
    
    
    772
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,330
    
    
    
    589
    
    
    
    741
    
    
    
    126
    %Other, excluding termination fees
    
    
    661
    
    
    
    785
    
    
    
    (124
    )
    
    
    -15.8
    %
    
    
    17
    
    
    
    
    
    
    
    36
    
    
    
    28
    
    
    
    2,294
    
    
    
    2,813
    
    
    
    3,008
    
    
    
    3,626
    
    
    
    (618
    )
    
    
    -17
    %Total revenue
    
    
    139,545
    
    
    
    131,960
    
    
    
    7,585
    
    
    
    5.7
    %
    
    
    6,653
    
    
    
    
    
    
    
    15,380
    
    
    
    8,920
    
    
    
    1,523
    
    
    
    3,038
    
    
    
    163,101
    
    
    
    143,918
    
    
    
    19,183
    
    
    
    13
    %Property operating expenses
    
    
    56,439
    
    
    
    52,758
    
    
    
    3,681
    
    
    
    7.0
    %
    
    
    1,481
    
    
    
    
    
    
    
    6,828
    
    
    
    5,035
    
    
    
    (3,516
    )
    
    
    (2,612
    )
    
    
    61,232
    
    
    
    55,181
    
    
    
    6,051
    
    
    
    11
    %Subtotal
    
    
    83,106
    
    
    
    79,202
    
    
    
    3,904
    
    
    
    4.9
    %
    
    
    5,172
    
    
    
    
    
    
    
    8,552
    
    
    
    3,885
    
    
    
    5,039
    
    
    
    5,650
    
    
    
    101,869
    
    
    
    88,737
    
    
    
    13,132
    
    
    
    15
    %Administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,269
    
    
    
    8,490
    
    
    
    (1,221
    )
    
    
    -14
    %Depreciation and amortization
    
    
    48,038
    
    
    
    48,565
    
    
    
    (527
    )
    
    
    -1.1
    %
    
    
    2,805
    
    
    
    
    
    
    
    10,422
    
    
    
    2,199
    
    
    
    782
    
    
    
    448
    
    
    
    62,047
    
    
    
    51,212
    
    
    
    10,835
    
    
    
    21
    %Operating Income (loss)
    
    $
    35,068
    
    
    $
    30,637
    
    
    $
    4,431
    
    
    
    14.5
    %
    
    $
    2,367
    
    
    $
    
    
    
    $
    (1,870
    )
    
    $
    1,686
    
    
    $
    4,257
    
    
    $
    5,202
    
    
    $
    32,553
    
    
    $
    29,035
    
    
    $
    3,518
    
    
    
    12
    %Number of properties
    
    
    257
    
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281Square feet
    
    
    25,294
    
    
    
    25,294
    
    
    
    
    
    
    
    
    
    
    
    747
    
    
    
    
    
    
    
    3,515
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,556Occupancy %
    
    
    93.3
    %
    
    
    91.7
    %
    
    
    
    
    
    
    
    
    
    
    97.4
    %
    
    
    
    
    
    
    46.8
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87.5
    %Other Income (Expense):Interest income
    
    
    787
    
    
    
    2,650
    
    
    
    (1,863
    )
    
    
    -70
    %Interest expense
    
    
    (40,358
    )
    
    
    (40,378
    )
    
    
    20
    
    
    
    0
    %Interest expense  Deferred financing costs
    
    
    (1,258
    )
    
    
    (479
    )
    
    
    (779
    )
    
    
    163
    %Equity in income of real estate ventures
    
    
    754
    
    
    
    965
    
    
    
    (211
    )
    
    
    -22
    %Income (loss) before minority interest
    
    
    (7,522
    )
    
    
    (8,207
    )
    
    
    685
    
    
    
    -8
    %Minority interest  partners share of consolidated real estate ventures
    
    
    (116
    )
    
    
    298
    
    
    
    (414
    )
    
    
    -139
    %Minority interest attributable to continuing operations  LP units
    
    
    411
    
    
    
    435
    
    
    
    (24
    )
    
    
    -6
    %Income (loss) from continuing operations
    
    
    (7,227
    )
    
    
    (7,474
    )
    
    
    247
    
    
    
    -3
    %Income (loss) from discontinued operations
    
    
    26,599
    
    
    
    4,832
    
    
    
    21,767
    
    
    
    450
    %Net Income (loss)
    
    $
    19,372
    
    
    $
    (2,642
    )
    
    $
    22,014
    
    
    
    -833
    %Earnings per common share
    
    $
    0.20
    
    
    
    ($0.05
    )
    
    $
    0.25
    
    
    
    -500
    %
  
 (a)
    
     Results include: eighteen developments and redevelopments and two properties placed in service(b)
    
     Represents certain revenues and expenses at the corporate level as well as various intercompany costs that are eliminated in consolidation 60




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##### Table of Contents



Revenue
  1)
    
    An additional $5.4 million at the Same Store Portfolio from increased occupancy
and increased rents received on lease renewals.2)
    
    An additional $4.8 million from four properties that we acquired after the
first quarter of 2006.3)
    
    An additional $2.5 million from increased occupancy at one of our development
properties (Cira Centre).
    Property Operating Expenses
  1)
    
    An increase of $3.7 million at the Same Store Portfolio, primarily due to increased
occupancy and real estate tax reassessments. Increased occupancy at our properties causes
an increase in the amount of expense incurred for utilities, security, and janitorial
services.2)
    
    The incurrence of $1.5 million of property operating expenses for the four properties
that we acquired after the first quarter of 2006.3)
    
    An increase of $1.8 million at our development
properties, with approximately $1.1
million attributable to increased occupancy at the Cira Centre over the first quarter of
2006 and the balance reflecting the timing of properties being placed in service and
occupancy by tenants.
 Depreciation and Amortization Expense
  1)
    
    The incurrence of $2.8 million of depreciation and amortization expense on account of
the four properties acquired after the first quarter of 2006.2)
    
    The incurrence of $2.4 million of depreciation and amortization expense during the
first quarter of 2007 on account of Cira Centre, which we placed in service in the fourth
quarter of 2006.3)
    
    The incurrence of $2.8 million of accelerated amortization related to customer
relationship and in-place lease intangible assets for one of our properties now included in
Development Properties. The value ascribed to these intangibles considered renewal periods
and when the renewals did not occur the remaining value of the intangibles was written off
and the property was placed into development for future tenants.4)
    
    The incurrence of $2.0 million of accelerated depreciation associated with tenant
move-outs, primarily one tenant that was in a Development Property. There was no
termination fee received in connection with this move-out as a result of the tenants
bankruptcy.
 Administrative Expenses
  61




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##### Table of Contents



Interest Income/ Expense
   Minority Interest-partners share of consolidated real estate ventures
   Minority Interest attributable to continuing operations  LP units
  Discontinued Operations
   Net Income
  Earnings Per Share
  62




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##### Table of Contents



General
  
    
    fund normal recurring expenses,
    
    fund capital expenditures, including capital and tenant improvements and leasing costs,
    
    fund current development and redevelopment costs, and
    
    fund distributions declared by our Board of Trustees.
      Cash Flows
  63




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##### Table of Contents



Activity
    
    2007
    
    
    2006Operating
    
    $
    50,521
    
    
    $
    55,238Investing
    
    
    (30,542
    )
    
    
    (867,898
    )Financing
    
    
    (41,473
    )
    
    
    841,787Net cash flows
    
    $
    (21,494
    )
    
    $
    29,127
    Capitalization
 Indebtedness
    64




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##### Table of Contents



Balance:Fixed rate
    
    $
    2,709,057
    
    
    $
    2,718,173Variable rate
    
    
    482,610
    
    
    
    439,162Total
    
    $
    3,191,667
    
    
    $
    3,157,335Percent of Total Debt:Fixed rate
    
    
    85
    %
    
    
    86
    %Variable rate
    
    
    15
    %
    
    
    14
    %Total
    
    
    100
    %
    
    
    100
    %Weighted-average interest rate at period end:Fixed rate
    
    
    5.65
    %
    
    
    5.61
    %Variable rate
    
    
    6.04
    %
    
    
    5.97
    %Total
    
    
    5.71
    %
    
    
    5.66
    %
        65




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##### Table of Contents



Equity
    Shelf Registration Statement
  Short- and Long-Term Liquidity
   Inflation
  Commitments and Contingencies
  66




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##### Table of Contents



Payments by Period (in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsMortgage notes payable (a)
    
    $
    865,958
    
    
    $
    129,683
    
    
    $
    108,533
    
    
    $
    289,961
    
    
    $
    337,781Revolving credit facility
    
    
    404,000
    
    
    
    
    
    
    
    404,000
    
    
    
    
    
    
    
    Unsecured debt (a)
    
    
    1,911,610
    
    
    
    
    
    
    
    388,000
    
    
    
    645,000
    
    
    
    878,610Ground leases (b)
    
    
    279,956
    
    
    
    1,736
    
    
    
    3,472
    
    
    
    3,636
    
    
    
    271,112Other liabilities
    
    
    2,005
    
    
    
    
    
    
    
    1,317
    
    
    
    
    
    
    
    688$
    3,463,529
    
    
    $
    131,419
    
    
    $
    905,322
    
    
    $
    938,597
    
    
    $
    1,488,191
 
 (a)
    
    Amounts do not include unamortized discounts and/or premiums.(b)
    
    Future minimum rental payments under the terms of all non-cancelable ground leases under which we are
the lessee are expensed on a straight-line basis regardless of when payments are due.      Interest Rate Risk and Sensitivity Analysis
  67




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
   
 Item 4. Controls and Procedures
 (a)
    
    Evaluation of disclosure controls and procedures.Under the supervision and with the
participation of our management, including our principal executive officer and principal
financial officer, we conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act) as of the end of the period covered by this quarterly
report, have concluded that the Companys disclosure controls and procedures are effective
to ensure that information required to be disclosed by the Company in the reports that it
files under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the Securities and
Exchange Commission.(b)
    
    Changes in internal controls over financial reporting.There was no change in the
Companys internal control over financial reporting that occurred during the period covered
by this quarterly report that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.
 
 Part II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  68




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##### Table of Contents



Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total
    
    
    
    
    
    
    Purchased as
    
    
    Shares that MayNumber of
    
    
    Average
    
    
    Part of Publicly
    
    
    Yet Be PurchasedShares
    
    
    Price Paid Per
    
    
    Announced Plans
    
    
    Under the PlansPurchased
    
    
    Share
    
    
    or Programs
    
    
    or Programs (a)2007:January
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,319,800February
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,319,800March
    
    
    1,301,000
    
    
    $
    34.34
    
    
    
    1,301,000
    
    
    
    1,018,800Total
    
    
    1,301,000
    
    
    
    
    
    
    
    1,301,000
 
 (a)
    
    On May 2, 2006, our Board of Trustees authorized an increase in the number of common shares that we may repurchase,
whether in open-market or privately negotiated transactions. The Board authorized us to purchase up to an aggregate of 3,500,000
common shares (inclusive of the remaining share repurchase availability under the Boards prior authorization from September 2001).
There is no expiration date on the share repurchase program. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
    
    We held our annual meeting of shareholders on May 9, 2007. At the meeting, each of the
ten individuals nominated for election to our Board of Trustees was elected to the Board.
These individuals will serve on the Board until the next annual meeting of shareholders and
until their successors are elected and qualified or until their earlier resignation. The
number of shares cast for or withheld for each nominee is set forth below:
 Trustee
    
    For
    
    
    WithheldWalter DAlessio
    
    
    81,277,885
    
    
    
    680,203D. Pike Aloian
    
    
    81,636,876
    
    
    
    321,212Thomas F. August
    
    
    76,724,716
    
    
    
    5,233,372Donald E. Axinn
    
    
    67,991,394
    
    
    
    13,966,694Wyche Fowler
    
    
    81,638,270
    
    
    
    319,818Michael J. Joyce
    
    
    81,692,258
    
    
    
    265,830Anthony A. Nichols Sr.
    
    
    80,951,549
    
    
    
    1,006,539Michael V. Prentiss
    
    
    76,725,961
    
    
    
    5,232,127Charles P. Pizzi
    
    
    81,337,394
    
    
    
    620,694Gerard H. Sweeney
    
    
    81,283,927
    
    
    
    674,161
 
    
    At our annual meeting of shareholders, our shareholders voted as follows to ratify the
appointment of PricewaterhouseCoopers LLP as our independent registered public accounting
firm for the calendar year 2007 as follows:
 
    
    Votes for
    
    
    81,839,917
    
    Votes Against
    
    
    32,296
    
    Abstentions
    
    
    19,196
 
    
    At our annual meeting of shareholders, our shareholders approved the amendment and
restatement of our Amended and Restated 1997 Long-Term Incentive Plan, voting as follows:
 
    
    Votes for
    
    
    72,411,880
    
    Votes Against
    
    
    3,816,076
    
    Abstentions
    
    
    109,452
    
    Broker Non-Votes
    
    
    5,620,680
 
    
    At our annual meeting of shareholders, our shareholders approved the 2007 Non-Qualified
Share Purchase Plan, voting as follows:
 
    
    Votes for
    
    
    76,075,023
    
    Votes Against
    
    
    188,980
    
    Abstentions
    
    
    73,406
    
    Broker Non-Votes
    
    
    5,620,679
  
    
    At our annual meeting of shareholders, each non-employee Trustee received his annual
trustee fee of $35,000, payable in cash or common shares at the election of non-employee
Trustee, and his $40,000 annual restricted share award (1,209 shares), the form of which is
attached as Exhibit 10.7.
 
 Item 6. Exhibits
 (a)
    
    Exhibits
 10.1
    
    Employment letter agreement with Darryl M. Dunn (incorporated by reference to
Brandywines Current Report on Form 8-K filed on January 9, 2007)**10.2
    
    Performance Share Award to President and Chief Executive Officer (incorporated by
reference to Brandywines Current Report on Form 8-K filed on February 14, 2007)**10.3
    
    Form of Performance Award to Executives other than President and Chief Executive
Officer (incorporated by reference to Brandywines Current Report on Form 8-K filed on
February 14, 2007)**10.4
    
    Amended and Restated Employment Agreement for President and Chief Executive
Officer (incorporated by reference to Brandywines Current Report on Form 8-K filed on
February 14, 2007)**10.5
    
    Amended and Restated 1997 Long-Term Incentive Plan**10.6
    
    2007 Non-Qualified Employee Share Purchase Plan**10.7
    
    Form of 2007 Restricted Share Award to Non-Employee Trustees12.1
    
    Statement re Computation of Ratios of Brandywine Realty Trust12.2
    
    Statement re Computation of Ratios of Brandywine Operating Partnership, L.P.
 69




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##### Table of Contents



31.1
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant
to 13a-14 under the Securities Exchange Act of 193431.2
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant
to 13a-14 under the Securities Exchange Act of 193431.3
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
13a-14 under the Securities Exchange Act of 193431.4
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
13a-14 under the Securities Exchange Act of 193432.1
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 200232.2
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 200232.3
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
200232.4
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
 
 **
    
    Management contract or compensatory plan or arrangement 70




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##### Table of Contents



SIGNATURES OF REGISTRANT
  BRANDYWINE REALTY TRUST
(Registrant)Date: May 10, 2007
    
    By:
    
    /s/ Gerard H. SweeneyGerard H. Sweeney, President and 
Chief Executive Officer
(Principal Executive Officer)Date: May 10, 2007
    
    By:
    
    /s/ Howard M. SipznerHoward M. Sipzner, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)Date: May 10, 2007
    
    By:
    
    /s/ Darryl M. DunnDarryl M. Dunn, Vice President, 
Chief Accounting Officer & Treasurer
(Principal Accounting Officer)
 71




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##### Table of Contents



SIGNATURES OF REGISTRANT
  BRANDYWINE OPERATING PARTNERSHIP, L.P. (Registrant)BRANDYWINE REALTY TRUST, as general partnerDate: May 10, 2007
    
    By:
    
    /s/ Gerard H. SweeneyGerard H. Sweeney, President 
and Chief Executive Officer
(Principal Executive Officer)Date: May 10, 2007
    
    By:
    
    /s/ Howard M. SipznerHoward M. Sipzner, Executive Vice President 
and Chief Financial Officer
(Principal Financial Officer)Date: May 10, 2007
    
    By:
    
    /s/ Darryl M. DunnDarryl M. Dunn, Vice President, 
Chief Accounting Officer & Treasurer
(Principal Accounting Officer)
 72