Edgar Filing: BioMed Realty Trust Inc

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller

reporting company)

BMR-2015.6.30-10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

Form 10-Q

QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

Commission File Number: 1-32261 (BioMed Realty Trust, Inc.)

000-54089 (BioMed Realty, L.P.)

BIOMED REALTY TRUST, INC.

BIOMED REALTY, L.P.

(Exact name of registrant as specified in its charter)



Maryland	20-1142292 (BioMed Realty Trust, Inc.)
(State or other jurisdiction of	20-1320636 (BioMed Realty, L.P.)
incorporation or organization)	(I.R.S. Employer Identification No.)

17190 Bernardo Center Drive
San Diego, California	92128
(Address of Principal Executive Offices)	(Zip Code)

(858) 485-9840

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



BioMed Realty Trust, Inc.	Yes þ No o
BioMed Realty, L.P.	Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



BioMed Realty Trust, Inc.	Yes þ No o
BioMed Realty, L.P.	Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

BioMed Realty Trust, Inc.:

BioMed Realty, L.P.:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



BioMed Realty Trust, Inc.	Yes o No þ
BioMed Realty, L.P.	Yes o No þ

The number of outstanding shares of BioMed Realty Trust, Inc.’s common stock, par value $0.01 per share, as of July 29, 2015 was 203,567,974.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2015 of BioMed Realty Trust, Inc., a Maryland corporation, and BioMed Realty, L.P., a Maryland limited partnership of which BioMed Realty Trust, Inc. is the parent company and general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our” or “our company” refer to BioMed Realty Trust, Inc. together with its consolidated subsidiaries, including BioMed Realty, L.P. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “our operating partnership” or “the operating partnership” refer to BioMed Realty, L.P. together with its consolidated subsidiaries.

BioMed Realty Trust, Inc. operates as a real estate investment trust, or REIT, and is the general partner of BioMed Realty, L.P. As of June 30, 2015, BioMed Realty Trust, Inc. owned an approximate 97.5% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining 2.5% partnership interest (including long term incentive plan units) in BioMed Realty, L.P. As the sole general partner of BioMed Realty, L.P., BioMed Realty Trust, Inc. has the full, exclusive and complete responsibility for the operating partnership’s day-to-day management and control.

There are a few differences between our company and our operating partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between our company and our operating partnership in the context of how BioMed Realty Trust, Inc. and BioMed Realty, L.P. operate as an interrelated consolidated company. BioMed Realty Trust, Inc. is a REIT, whose only material asset is its ownership of partnership interests of BioMed Realty, L.P. As a result, BioMed Realty Trust, Inc. does not conduct business itself, other than acting as the sole general partner of BioMed Realty, L.P., issuing public equity from time to time and guaranteeing certain debt of BioMed Realty, L.P. BioMed Realty Trust, Inc. itself does not hold any indebtedness but guarantees some of the secured and unsecured debt of BioMed Realty, L.P. BioMed Realty, L.P. holds substantially all the assets of the company and holds the ownership interests in the company’s joint ventures. BioMed Realty, L.P. conducts the operations of the business and is structured as a partnership with no publicly-traded equity. Except for net proceeds from public equity issuances by BioMed Realty Trust, Inc., which are generally contributed to BioMed Realty, L.P. in exchange for partnership units, BioMed Realty, L.P. generates the capital required by the company’s business through BioMed Realty, L.P.’s operations, by BioMed Realty, L.P.’s direct or indirect incurrence of indebtedness or through the issuance of partnership units.

Noncontrolling interests and stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of BioMed Realty Trust, Inc. and those of BioMed Realty, L.P. The operating partnership and long term incentive plan units in BioMed Realty, L.P. that are not owned by BioMed Realty Trust, Inc. are accounted for as partners’ capital in BioMed Realty, L.P.’s financial statements and as noncontrolling interests in BioMed Realty Trust, Inc.’s financial statements. The noncontrolling interests in BioMed Realty, L.P.’s financial statements include the interests of joint venture partners. The noncontrolling interests in BioMed Realty Trust, Inc.’s financial statements include the same noncontrolling interests at the BioMed Realty, L.P. level as well as the limited partnership unit holders of BioMed Realty, L.P., not including BioMed Realty Trust, Inc. The differences between stockholders’ equity and partners’ capital result from the differences in the equity issued at the BioMed Realty Trust, Inc. and BioMed Realty, L.P. levels.

We believe combining the quarterly reports on Form 10-Q of BioMed Realty Trust, Inc. and BioMed Realty, L.P. into this single report:


•	better reflects how management and the analyst community view the business as a single operating unit,


•	enhances investor understanding of our company by enabling them to view the business as a whole and in the same manner as management,


•	is more efficient for our company and results in savings in time, effort and expense, and


•	is more efficient for investors by reducing duplicative disclosure and providing a single document for their review.

To help investors understand the significant differences between our company and our operating partnership, this report presents the following separate sections for each of BioMed Realty Trust, Inc. and BioMed Realty, L.P.:


•	consolidated financial statements,


•	the following notes to the consolidated financial statements:


•	Equity / Partners’ Capital,


•	Debt, and

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•	Earnings Per Share / Unit,


•	Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and


•	Unregistered Sales of Equity Securities and Use of Proceeds.

This report also includes separate Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of BioMed Realty Trust, Inc. and BioMed Realty, L.P. in order to establish that the Chief Executive Officer and the Chief Financial Officer of BioMed Realty Trust, Inc. have made the requisite certifications and BioMed Realty Trust, Inc. and BioMed Realty, L.P. are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

BIOMED REALTY TRUST, INC. AND BIOMED REALTY, L.P.

FORM 10-Q - QUARTERLY REPORT

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015

TABLE OF CONTENTS



		Page
	PART I - FINANCIAL INFORMATION

	Item 1 Consolidated Financial Statements	6

	Consolidated Financial Statements of BioMed Realty Trust, Inc.:	7

	Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014	7

	Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014 (Unaudited)	8

	Consolidated Statements of Comprehensive (Loss) / Income for the three and six months ended June 30, 2015 and 2014 (Unaudited)	9

	Consolidated Statement of Equity for the six months ended June 30, 2015 (Unaudited)	10

	Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (Unaudited)	11

	Consolidated Financial Statements of BioMed Realty, L.P.:	13

	Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and December 31, 2014	13

	Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014 (Unaudited)	14

	Consolidated Statements of Comprehensive (Loss) / Income for the three and six months ended June 30, 2015 and 2014 (Unaudited)	15

	Consolidated Statement of Capital for the six months ended June 30, 2015 (Unaudited)	16

	Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (Unaudited)	17

	Notes to Consolidated Financial Statements of BioMed Realty Trust, Inc. and BioMed Realty, L.P.	19

	Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations	34

	Item 3 Quantitative and Qualitative Disclosures About Market Risk	52

	Item 4 Controls and Procedures	55

	PART II - OTHER INFORMATION

	Item 1 Legal Proceedings	56

	Item 1A Risk Factors	56

	Item 2 Unregistered Sale of Equity Securities and Use of Proceeds	56

	Item 3 Defaults Upon Senior Securities	56



	Item 4 Mine Safety Disclosures	56

	Item 5 Other Information	56

	Item 6 Exhibits	57

	SIGNATURES	58

	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32.1

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PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

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BIOMED REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



	June 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
Land	$	651,201		$	704,958
Building and improvements	4,956,823			4,877,135
Land under development	248,225			151,242
Construction in progress	777,766			629,679
Investments in real estate	6,634,015			6,363,014
Accumulated depreciation	(1,026,103		)	(946,439		)
Investments in real estate, net	5,607,912			5,416,575
Investments in unconsolidated partnerships	34,469			35,291
Cash and cash equivalents	45,329			46,659
Accounts receivable, net	10,740			14,631
Accrued straight-line rents, net	169,592			163,716
Deferred leasing costs, net	229,290			219,713
Other assets	240,877			274,301
Total assets	$	6,338,209		$	6,170,886
LIABILITIES AND EQUITY
Mortgage notes payable, net	$	488,945		$	496,757
Exchangeable senior notes	—			95,678
Unsecured senior notes, net	1,294,614			1,293,903
Unsecured senior term loans	750,856			749,326
Unsecured line of credit	369,000			84,000
Accounts payable, accrued expenses and other liabilities	353,947			381,280
Total liabilities	3,257,362			3,100,944
Equity:
Stockholders’ equity:
Common stock, $.01 par value, 250,000,000 shares authorized, 203,567,974 shares and 197,442,432 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	2,036			1,975
Additional paid-in capital	3,750,959			3,649,235
Accumulated other comprehensive loss, net	(24,544		)	(2,214		)
Dividends in excess of earnings	(710,913		)	(645,983		)
Total stockholders’ equity	3,017,538			3,003,013
Noncontrolling interests	63,309			66,929
Total equity	3,080,847			3,069,942
Total liabilities and equity	$	6,338,209		$	6,170,886

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)



	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenues:
Rental	$	116,260		$	120,924		$	233,780		$	240,950
Tenant recoveries	41,573			40,280			85,529			79,015
Other revenue	141			9,957			16,675			20,072
Total revenues	157,974			171,161			335,984			340,037
Expenses:
Rental operations	55,270			53,636			113,917			106,159
Depreciation and amortization	61,272			62,736			128,352			125,145
General and administrative	12,531			12,443			25,320			24,385
Executive severance	—			—			9,891			—
Acquisition-related expenses	1,100			1,134			1,564			2,384
Total expenses	130,173			129,949			279,044			258,073
Income from operations	27,801			41,212			56,940			81,964
Equity in net income / (loss) of unconsolidated partnerships	139			(10		)	292			(148		)
Interest expense, net	(19,315		)	(23,131		)	(40,710		)	(51,141		)
Impairment of real estate	(35,071		)	—			(35,071		)	—
Other income	64,021			1,027			76,905			9,190
Net income	37,575			19,098			58,356			39,865
Net income attributable to noncontrolling interests	(13,997		)	(462		)	(17,433		)	(2,396		)
Net income attributable to the Company	23,578			18,636			40,923			37,469
Net income per share attributable to common stockholders:
Basic and diluted earnings per share	$	0.11		$	0.10		$	0.20		$	0.19
Weighted-average common shares outstanding:
Basic	202,055,325			191,003,248			201,423,721			190,954,827
Diluted	207,458,236			196,800,354			206,997,405			196,673,649

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME

(In thousands)

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net income	$	37,575		$	19,098		$	58,356		$	39,865
Other comprehensive income:
Foreign currency translation adjustments	1,480			750			264			988
Unrealized gain / (loss) on derivative instruments, net	405			(328		)	(958		)	(918		)
Amortization of deferred interest costs	1,655			1,684			3,318			3,375
Reclassification on sale of equity securities	(55,489		)	—			(67,823		)	(9,322		)
Unrealized gain / (loss) on equity securities	1,685			(7,884		)	37,338			16,750
Total other comprehensive (loss) / income	(50,264		)	(5,778		)	(27,861		)	10,873
Comprehensive (loss) / income	(12,689		)	13,320			30,495			50,738
Comprehensive (income) / loss attributable to noncontrolling interests	(3,081		)	1,201			(11,902		)	(4,434		)
Comprehensive (loss) / income attributable to the Company	$	(15,770	)	$	14,521		$	18,593		$	46,304

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share data)

(Unaudited)



	Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss, net			Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
	Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss, net			Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2014	197,442,432	$	1,975	$	3,649,235		$	(2,214	)	$	(645,983	)	$	3,003,013		$	66,929		$	3,069,942
Net issuances of unvested restricted common stock	354,266	4		(5,325		)	—			—			(5,321		)	—			(5,321		)
Exchange of Exchangeable Senior Notes	5,764,026	57		95,699			—			—			95,756			—			95,756
Conversion of OP units to common stock	7,250	—		(40		)	—			—			(40		)	40			—
Vesting of share-based awards	—	—		11,409			—			—			11,409			—			11,409
Reallocation of noncontrolling interests to equity	—	—		1,340			—			—			1,340			(1,340		)	—
Common stock dividends	—	—		—			—			(105,853		)	(105,853		)	—			(105,853		)
OP unit distributions	—	—		—			—			—			—			(2,809		)	(2,809		)
Purchases of noncontrolling interests	—	—		(1,359		)	—			—			(1,359		)	859			(500		)
Distributions to noncontrolling interests	—	—		—			—			—			—			(12,272		)	(12,272		)
Net income	—	—		—			—			40,923			40,923			17,433			58,356
Foreign currency translation adjustments	—	—		—			257			—			257			7			264
Reclassification on sale of equity securities	—	—		—			(54,287		)	—			(54,287		)	(13,536		)	(67,823		)
Unrealized gain on equity securities	—	—		—			29,400			—			29,400			7,938			37,338
Amortization of deferred interest costs	—	—		—			3,233			—			3,233			85			3,318
Unrealized loss on derivative instruments, net	—	—		—			(933		)	—			(933		)	(25		)	(958		)
Balance at June 30, 2015	203,567,974	$	2,036	$	3,750,959		$	(24,544	)	$	(710,913	)	$	3,017,538		$	63,309		$	3,080,847

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Six Months Ended
	June 30,
	2015			2014

Operating activities:
Net income	$	58,356		$	39,865
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	128,352			125,145
Allowance for doubtful accounts	1,360			532
Impairment of real estate	35,071			—
Gain on sale of debt and equity securities	(67,823		)	(9,322		)
Gain on repayment of notes receivable	(8,557		)	—
Non-cash revenue adjustments	786			564
Other non-cash adjustments	8,151			14,698
Compensation expense related to share based payments	11,409			7,479
Distributions representing a return on capital from unconsolidated partnerships	834			264
Changes in operating assets and liabilities:
Accounts receivable	3,933			(1,458		)
Accrued straight-line rents	(7,249		)	(8,267		)
Deferred leasing costs	(18,684		)	(6,551		)
Other assets	4,422			(17,085		)
Accounts payable, accrued expenses and other liabilities	(18,213		)	4,507
Net cash provided by operating activities	132,148			150,371
Investing activities:
Purchases of investments in real estate and related intangible assets	(181,637		)	(135,036		)
Capital expenditures	(202,150		)	(179,689		)
Contributions from tax credit transactions, net	3,332			22,557
Proceeds from sale of property, net of selling costs	33,829			—
Draws on notes and construction loan receivable	(7,363		)	(39,769		)
Repayment of notes receivable	11,418			184,239
Contributions to unconsolidated partnerships, net	(212		)	(1,257		)
Purchases of debt and equity securities	(21,232		)	(9,221		)
Proceeds from the sale of debt and equity securities	71,695			13,952
Net cash used in investing activities	(292,320		)	(144,224		)
Financing activities:
Payment of deferred loan costs	(63		)	(3,086		)
Unsecured line of credit proceeds	305,000			658,000
Unsecured line of credit payments	(20,000		)	(631,000		)
Mortgage notes proceeds	19,335			14,043
Principal payments on mortgage notes payable	(26,013		)	(338,104		)
Proceeds from unsecured senior notes	—			397,632
Distributions to noncontrolling interests	(12,272		)	—
Purchases of noncontrolling interests	(500		)	—
Distributions to operating partnership unit and LTIP unit holders	(2,809		)	(2,761		)
Dividends paid to common stockholders	(104,261		)	(96,157		)

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	Six Months Ended
	June 30,
	2015			2014

Net cash provided by / (used in) financing activities	158,417			(1,433		)
Effect of exchange rate changes on cash and cash equivalents	425			(416		)
Net (decrease) / increase in cash and cash equivalents	(1,330		)	4,298
Cash and cash equivalents at beginning of period	46,659			34,706
Cash and cash equivalents at end of period	$	45,329		$	39,004
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $14,971 and $9,614, for the six months ended June 30, 2015 and 2014, respectively)	$	35,118		$	45,414
Supplemental disclosure of non-cash investing and financing activities:
Accrual for common stock dividends declared	$	52,927		$	48,132
Accrual for distributions declared for operating partnership unit and LTIP unit holders	1,405			1,351
Accrued additions to real estate and related intangible assets	92,716			100,424
Mortgage notes assumed (includes premium of $3,966 during the six months ended June 30, 2014)	—			71,937
Exchange of Exchangeable Senior Notes for common stock	95,678			—
Noncontrolling interests in connection with 100 College Street and 300 George Street acquisitions	—			21,740
Deposits applied for investments in real estate	13,916			—

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)



	June 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
Land	$	651,201		$	704,958
Building and improvements	4,956,823			4,877,135
Land under development	248,225			151,242
Construction in progress	777,766			629,679
Investments in real estate	6,634,015			6,363,014
Accumulated depreciation	(1,026,103		)	(946,439		)
Investments in real estate, net	5,607,912			5,416,575
Investments in unconsolidated partnerships	34,469			35,291
Cash and cash equivalents	45,329			46,659
Accounts receivable, net	10,740			14,631
Accrued straight-line rents, net	169,592			163,716
Deferred leasing costs, net	229,290			219,713
Other assets	240,877			274,301
Total assets	$	6,338,209		$	6,170,886
LIABILITIES AND CAPITAL
Mortgage notes payable, net	$	488,945		$	496,757
Exchangeable senior notes	—			95,678
Unsecured senior notes, net	1,294,614			1,293,903
Unsecured senior term loans	750,856			749,326
Unsecured line of credit	369,000			84,000
Accounts payable, accrued expenses and other liabilities	353,947			381,280
Total liabilities	3,257,362			3,100,944
Capital:
Partners’ capital:
Limited partners' capital, 5,398,224 and 5,405,474 units issued and outstanding at June 30, 2015 and December 31, 2014, respectively	43,402			45,600
General partner's capital, 203,567,974 and 197,442,432 units issued and outstanding at June 30, 2015 and December 31, 2014, respectively	3,038,149			3,002,135
Accumulated other comprehensive (loss) / income	(20,611		)	878
Total partners’ capital	3,060,940			3,048,613
Noncontrolling interests	19,907			21,329
Total capital	3,080,847			3,069,942
Total liabilities and capital	$	6,338,209		$	6,170,886

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except unit data)

(Unaudited)



	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenues:
Rental	$	116,260		$	120,924		$	233,780		$	240,950
Tenant recoveries	41,573			40,280			85,529			79,015
Other revenue	141			9,957			16,675			20,072
Total revenues	157,974			171,161			335,984			340,037
Expenses:
Rental operations	55,270			53,636			113,917			106,159
Depreciation and amortization	61,272			62,736			128,352			125,145
General and administrative	12,531			12,443			25,320			24,385
Executive severance	—			—			9,891			—
Acquisition-related expenses	1,100			1,134			1,564			2,384
Total expenses	130,173			129,949			279,044			258,073
Income from operations	27,801			41,212			56,940			81,964
Equity in net income / (loss) of unconsolidated partnerships	139			(10		)	292			(148		)
Interest expense, net	(19,315		)	(23,131		)	(40,710		)	(51,141		)
Impairment of real estate	(35,071		)	—			(35,071		)	—
Other income	64,021			1,027			76,905			9,190
Net income	37,575			19,098			58,356			39,865
Net (income) / loss attributable to noncontrolling interests	(13,384		)	52			(16,363		)	(1,361		)
Net income attributable to the Operating Partnership	24,191			19,150			41,993			38,504
Net income per unit attributable to unit holders:
Basic and diluted earnings per unit	$	0.11		$	0.10		$	0.20		$	0.19
Weighted-average units outstanding:
Basic	207,454,664			196,408,722			206,826,111			196,362,737
Diluted	207,458,236			196,800,354			206,997,405			196,673,649

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME

(In thousands)

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net income	$	37,575		$	19,098		$	58,356		$	39,865
Other comprehensive income:
Foreign currency translation adjustments	1,480			750			264			988
Unrealized gain / (loss) on derivative instruments, net	405			(328		)	(958		)	(918		)
Amortization of deferred interest costs	1,655			1,684			3,318			3,375
Reclassification on sale of equity securities	(55,489		)	—			(67,823		)	(9,322		)
Unrealized gain / (loss) on equity securities	1,685			(7,884		)	37,338			16,750
Total other comprehensive (loss) / income	(50,264		)	(5,778		)	(27,861		)	10,873
Comprehensive (loss) / income	(12,689		)	13,320			30,495			50,738
Comprehensive (income) / loss attributable to noncontrolling interests	(2,336		)	1,601			(9,991		)	(3,156		)
Comprehensive (loss) / income attributable to the Operating Partnership	$	(15,025	)	$	14,921		$	20,504		$	47,582

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENT OF CAPITAL

(In thousands, except unit data)

(Unaudited)



	Limited Partners' Capital					General Partner's Capital				Accumulated Other Comprehensive Income / (Loss)			Total Partners' Capital			Noncontrolling Interests			Total Capital
	Units		Amount			Units	Amount			Accumulated Other Comprehensive Income / (Loss)			Total Partners' Capital			Noncontrolling Interests			Total Capital
Balance at December 31, 2014	5,405,474		$	45,600		197,442,432	$	3,002,135		$	878		$	3,048,613		$	21,329		$	3,069,942
Net issuances of unvested restricted OP units	—		—			354,266	(5,321		)	—			(5,321		)	—			(5,321		)
Conversion of OP units	(7,250	)	40			7,250	(40		)	—			—			—			—
Exchange of Exchangeable Senior Notes	—		—			5,764,026	95,756			—			95,756			—			95,756
Vesting of share-based awards	—		—			—	11,409			—			11,409			—			11,409
Reallocation of capital	—		(499		)	—	499			—			—			—			—
Distributions	—		(2,809		)	—	(105,853		)	—			(108,662		)	—			(108,662		)
Purchases of noncontrolling interests	—		—			—	(1,359		)	—			(1,359		)	859			(500		)
Distributions to noncontrolling interests	—		—			—	—			—			—			(12,272		)	(12,272		)
Net income	—		1,070			—	40,923			—			41,993			16,363			58,356
Foreign currency translation adjustments	—		—			—	—			264			264			—			264
Reclassification on sale of equity securities	—		—			—	—			(54,287		)	(54,287		)	(13,536		)	(67,823		)
Unrealized gain on equity securities	—		—			—	—			30,174			30,174			7,164			37,338
Amortization of deferred interest costs	—		—			—	—			3,318			3,318			—			3,318
Unrealized loss on derivative instruments, net	—		—			—	—			(958		)	(958		)	—			(958		)
Balance at June 30, 2015	5,398,224		$	43,402		203,567,974	$	3,038,149		$	(20,611	)	$	3,060,940		$	19,907		$	3,080,847

See accompanying notes to consolidated financial statements.

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BIOMED REALTY, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Six Months Ended
	June 30,
	2015			2014

Operating activities:
Net income	$	58,356		$	39,865
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	128,352			125,145
Allowance for doubtful accounts	1,360			532
Impairment of real estate	35,071			—
Gain on sale of debt and equity securities	(67,823		)	(9,322		)
Gain on repayment of notes receivable	(8,557		)	—
Non-cash revenue adjustments	786			564
Other non-cash adjustments	8,151			14,698
Compensation expense related to share-based payments	11,409			7,479
Distributions representing a return on capital from unconsolidated partnerships	834			264
Changes in operating assets and liabilities:
Accounts receivable	3,933			(1,458		)
Accrued straight-line rents	(7,249		)	(8,267		)
Deferred leasing costs	(18,684		)	(6,551		)
Other assets	4,422			(17,085		)
Accounts payable, accrued expenses and other liabilities	(18,213		)	4,507
Net cash provided by operating activities	132,148			150,371
Investing activities:
Purchases of investments in real estate and related intangible assets	(181,637		)	(135,036		)
Capital expenditures	(202,150		)	(179,689		)
Contributions from tax credit transactions, net	3,332			22,557
Proceeds from sale of properties, net of selling costs	33,829			—
Draws on notes and construction loan receivable	(7,363		)	(39,769		)
Repayment of notes receivable	11,418			184,239
Contributions to unconsolidated partnerships, net	(212		)	(1,257		)
Purchases of debt and equity securities	(21,232		)	(9,221		)
Proceeds from the sale of debt and equity securities	71,695			13,952
Net cash used in investing activities	(292,320		)	(144,224		)
Financing activities:
Payment of deferred loan costs	(63		)	(3,086		)
Unsecured line of credit proceeds	305,000			658,000
Unsecured line of credit payments	(20,000		)	(631,000		)
Mortgage notes proceeds	19,335			14,043
Principal payments on mortgage notes payable	(26,013		)	(338,104		)
Proceeds from unsecured senior notes	—			397,632
Purchases of interests in noncontrolling interest	(500		)	—

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	Six Months Ended
	June 30,
	2015			2014

Distributions to noncontrolling interests	(12,272		)	—
Distributions paid to unit holders	(107,070		)	(98,918		)
Net cash provided by / (used in) financing activities	158,417			(1,433		)
Effect of exchange rate changes on cash and cash equivalents	425			(416		)
Net (decrease) / increase in cash and cash equivalents	(1,330		)	4,298
Cash and cash equivalents at beginning of period	46,659			34,706
Cash and cash equivalents at end of period	$	45,329		$	39,004
Supplemental disclosure of cash flow information:
Cash paid during the period for interest (net of amounts capitalized of $14,971 and $9,614, for the six months ended June 30, 2015 and 2014, respectively)	$	35,118		$	45,414
Supplemental disclosure of non-cash investing and financing activities:
Accrual for unit distributions declared	$	54,332		$	49,483
Accrued additions to real estate and related intangible assets	92,716			100,424
Mortgage notes assumed (includes premiums of $3,966 during the six months ended June 30, 2014)	—			71,937
Noncontrolling interests in connection with 100 College Street and 300 George Street acquisitions	—			21,740
Exchange of Exchangeable Senior Notes for common units	95,678			—
Deposits applied for investments in real estate	13,916			—

See accompanying notes to consolidated financial statements.

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BIOMED REALTY TRUST, INC.

BIOMED REALTY, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization of the Parent Company and Description of Business

BioMed Realty Trust, Inc., a Maryland corporation (the “Parent Company”), operates as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) focused on acquiring, developing, owning, leasing and managing laboratory and office space for the life science industry principally through its subsidiary, BioMed Realty, L.P., a Maryland limited partnership (the “Operating Partnership” and together with the Parent Company referred to as the “Company”). The Company’s tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. The Company’s properties are generally located in markets with well-established reputations as centers for scientific research, including Boston, San Francisco, San Diego, New York, Maryland, Cambridge (United Kingdom), North Carolina, Pennsylvania, Seattle and research parks located near or adjacent to universities and their related medical systems.

The Parent Company is the sole general partner of the Operating Partnership and, as of June 30, 2015, owned a 97.5% interest in the Operating Partnership. The remaining 2.5% interest in the Operating Partnership is held by limited partners. Each partner’s percentage interest in the Operating Partnership is determined based on the number of operating partnership units and long-term incentive plan units (“LTIP units” and together with the operating partnership units, the “OP units”) owned as compared to total OP units (and potentially issuable OP units, as applicable) outstanding as of each period end and is used as the basis for the allocation of net income or loss to each partner.

2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying interim financial statements are unaudited, but have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments and eliminations, consisting of normal recurring adjustments necessary for a fair presentation of the financial statements for these interim periods have been recorded. These financial statements should be read in conjunction with the audited consolidated financial statements and notes therein included in the Company's annual report on Form 10-K for the year ended December 31, 2014.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such reclassifications have no effect on net income as previously reported.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, partnerships and limited liability companies that it controls, and variable interest entities (“VIEs”) for which the Company has determined itself to be the primary beneficiary. All material intercompany transactions and balances have been eliminated. The Company consolidates entities the Company controls and records a noncontrolling interest for the portions not owned by the Company. Control is determined, where applicable, by the sufficiency of equity invested and the rights of the equity holders, and by the ownership of a majority of the voting interests, with consideration given to the existence of approval or veto rights granted to the minority stockholder. If the minority stockholder holds substantive participating rights, it overcomes the presumption of control by the majority voting interest holder. In contrast, if the minority stockholder simply holds protective rights (such as consent rights over certain actions), it does not overcome the presumption of control by the majority voting interest holder.

Assets and liabilities of subsidiaries outside the United States with non-U.S. dollar functional currencies are translated into U.S. dollars using exchange rates as of the balance sheet dates. Income and expenses are translated using the average exchange rates for the reporting period. Foreign currency translation adjustments are recorded as a component of other comprehensive income. For the three months ended June 30, 2015 and 2014, total revenues from properties outside the United States were $4.4 million and $4.9 million, respectively, which represented 2.8% and 2.9% of the Company's total revenues during the respective periods. For the six months ended June 30, 2015 and 2014, total revenues from properties outside the United States were $8.6 million and $9.7 million, respectively, which represented 2.6% and 2.8% of the Company's total revenues during the respective

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periods. The Company’s net investments in properties outside the United States were $208.3 million and $200.2 million at June 30, 2015 and December 31, 2014, respectively.

Investments in Partnerships and Limited Liability Companies

The Company has determined that it is the primary beneficiary in six VIEs (excluding certain VIEs associated with tax credits discussed below), consisting of single-tenant properties in which the tenant has a purchase option, which are consolidated and reflected in the accompanying consolidated financial statements. Selected financial data of the VIEs at June 30, 2015 and December 31, 2014 consist of the following (in thousands):



	June 30, 2015		December 31, 2014
Investment in real estate, net	$	426,383	$	433,842
Total assets	486,667		493,066
Total debt	187,744		189,848
Total liabilities	199,439		203,529

Historic Tax Credits and New Market Tax Credits

The Company is a party to certain contractual arrangements with tax credit investors ("TCIs") that were established to enable the TCIs to receive benefits of historic tax credits ("HTCs") and/or new market tax credits ("NMTCs") for certain properties owned by the Company. At June 30, 2015 and December 31, 2014, the Company owned ten properties that had syndicated HTCs or NMTCs, or both, to TCIs.

Capital contributions are made by TCIs into special purpose entities that ultimately invest these funds in the entity that owns the subject property that generates the tax credits. The TCIs are allocated substantially all of the tax credits and hold only a noncontrolling interest in the economic risk and rewards of the special purpose entities. HTCs are delivered to the TCI upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCI after the investment has been funded and spent on a qualified business. HTCs are subject to 20% recapture per year beginning one year after the completion of the historic rehabilitation of the subject property. NMTCs are subject to 100% recapture until the end of the seventh year following the qualifying investment. The Company has provided the TCIs with certain guarantees which protect the TCIs from loss should a tax credit recapture event occur. The contractual arrangements with the TCIs include a put/call provision whereby the Company may be obligated or entitled to repurchase the ownership interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. The Company anticipates that either the TCIs will exercise their put rights or the Company will exercise its call rights; however, the Company believes that the put rights are more likely to be exercised.

The portion of the TCI’s capital contribution that is attributed to the put is recorded at fair-value at inception and is accreted to the expected put price as interest expense in the consolidated statements of income. At June 30, 2015 and December 31, 2014, approximately $5.4 million and $5.2 million of put liabilities, respectively, were included in other liabilities in the consolidated balance sheets. The remaining balance of the TCI’s capital contribution is initially recorded in other liabilities in the consolidated balance sheets and is reclassified, upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. During the six months ended June 30, 2015 and 2014, $3.3 million and $22.6 million of tax credits, net of costs and estimated put payments, respectively, were contributed by TCIs and were recorded as other liabilities in the consolidated balance sheets. During the six months ended June 30, 2015 and 2014, $3.2 million and $25.8 million of tax credits had been delivered to the TCIs and were reclassified as a reduction of the carrying value of the subject property. Direct and incremental costs incurred in structuring the transaction, consisting of third-party legal, accounting and other professional fees, are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above.

At June 30, 2015 and December 31, 2014, the Company determined that the special purpose entity owning one property under development is a VIE, since there is insufficient capital to finance the remaining development activities without further subordinated financial support. The Company has determined it is the primary beneficiary of this VIE, because it has the authority to direct the activities which most significantly impact its economic performance. Selected financial data of the VIE at June 30, 2015 and December 31, 2014 consisted of the following (in thousands):

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	June 30, 2015		December 31, 2014
Investment in real estate, net	$	14,053	$	2,507
Total assets	25,603		24,478
Total liabilities	9,872		7,467

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed

The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on an estimate of the future undiscounted cash flows (excluding interest charges) expected to result from the long-lived asset’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a long-lived asset, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair-value of the property. The Company is required to make subjective assessments as to whether there are impairments in the values of its investments in long-lived assets. These assessments have a direct impact on the Company’s net income because recording an impairment loss results in an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. Although the Company’s strategy is to hold its properties over the long-term, if the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized to reduce the property to the lower of the carrying amount or fair-value, and such loss could be material.

During the three months ended June 30, 2015, the Company recognized impairment losses of $35.1 million, primarily related to the King of Prussia property, which was sold in May 2015. The property had been placed under active redevelopment to be held for long-term operations. However, in May 2015, the Company's strategy changed from actively redeveloping to selling with respect to this property as a result of market conditions which dictated an earlier sale. In connection with the change in strategy in May 2015, the Company recognized an impairment loss of $32.3 million once the sale of the property became probable and the property was written down to its estimated fair value, less costs to sell. No gain or loss was recognized upon completion of the sale in May 2015.

Deferred Leasing Costs, Net

Leasing commissions and other direct costs associated with obtaining new or renewal leases are recorded at cost and amortized on a straight-line basis over the terms of the respective leases, with remaining terms ranging from less than one year to approximately 20 years as of June 30, 2015. Deferred leasing costs also include the net carrying value of acquired in-place leases and acquired management agreements.

Deferred leasing costs, net at June 30, 2015 consisted of the following (in thousands):



	Balance at		Accumulated
	June 30, 2015		Amortization			Net
Acquired in-place leases	$	421,408	$	(287,164	)	$	134,244
Acquired management agreements	25,801		(23,336		)	2,465
Deferred leasing and other direct costs	137,163		(44,582		)	92,581
	$	584,372	$	(355,082	)	$	229,290

Deferred leasing costs, net at December 31, 2014 consisted of the following (in thousands):



	Balance at		Accumulated
	December 31, 2014		Amortization			Net
Acquired in-place leases	$	415,389	$	(271,782	)	$	143,607
Acquired management agreements	25,801		(22,328		)	3,473
Deferred leasing and other direct costs	111,290		(38,657		)	72,633
	$	552,480	$	(332,767	)	$	219,713

Investments

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Investments in equity securities, which are included in other assets on the accompanying consolidated balance sheets, consisted of the following (in thousands):



	June 30, 2015		December 31, 2014
Available-for-sale securities, historical cost	$	11,800	$	10,280
Unrealized gain, net	17,857		48,341
Available-for-sale securities, fair-value (1)	29,657		58,621
Privately-held securities, cost basis	56,476		43,428
Total equity securities	$	86,133	$	102,049


(1)	Determination of fair-value is classified as Level 1 in the fair-value hierarchy based on the use of quoted prices in active markets.

The Company holds investments in available-for-sale securities of certain publicly-traded companies. Changes in the fair-value of investments classified as available-for-sale are recorded in comprehensive income. The fair-value of the Company's equity investments in publicly-traded companies are based upon the closing trading price of the equity security as of the balance sheet date. Certain of these investments have fair-values less than the Company’s cost basis, net of previous other-than-temporary impairment in these securities due to decreases in their respective stock prices during the six months ended June 30, 2015. However, management has the intent and ability to retain the investments for a period of time sufficient to allow for an anticipated recovery in their market value. Management will continue to periodically evaluate whether any investment, the fair-value of which is less than the Company’s cost basis, should be considered other-than-temporarily impaired. If other-than-temporary impairment is considered to exist, the related unrealized loss will be reclassified from accumulated other comprehensive loss and recorded as a reduction of net income.

The Company also holds investments in securities of certain privately-held companies and funds, which are recorded at cost basis due to the Company’s lack of control or significant influence over such companies and funds.

During the three and six months ended June 30, 2015, the Company realized gains of $55.1 million and $68.8 million, respectively, primarily from the sale of investments in certain publicly-traded companies. Realized gains on investments in available-for-sale securities are included in other income in the consolidated statements of income. The basis for which the cost of an investment sold and the amount reclassified out of accumulated other comprehensive income into earnings is determined by specific identification. In addition, during the three and six months ended June 30, 2015, the Company realized a gain of $11.4 million related to the collection of a note receivable that was previously fully reserved. The realized gain is also included in other income in the consolidated statements of income.

During the six months ended June 30, 2015, the Company recorded impairment charges of $2.8 million. Impairment charges are included in other expense in the consolidated statements of income and primarily relate to the Company’s investments in a privately-held company. Other than these investments, there were no identified events or changes in circumstances that may have a significant adverse effect on the carrying value of the Company’s cost method investments and therefore, no evaluation of impairment was performed during the six months ended June 30, 2015 on the Company’s remaining cost method investments.

Construction Loan Receivable

The Company had a $255.0 million interest in a $355.0 million construction loan secured by first priority mortgages on a 1.1 million square foot laboratory, office and retail development project located in Boston, Massachusetts, which is 95% leased to Vertex Pharmaceuticals Incorporated to serve as its new corporate headquarters (the "Construction Loan"). In May 2014, the borrower repaid the then outstanding principal and accrued interest balance prior to maturity, of which the Company's portion was approximately $191.2 million.

Lease Termination

During the six months ended June 30, 2015 and 2014, the Company recorded lease termination revenue, net of write-offs of lease intangibles, included in other revenue on the consolidated statements of income of approximately $16.2 million and $6.5 million, respectively. Lease termination revenue for the six months ended June 30, 2015 primarily related to the early termination of Vertex Pharmaceuticals' leases at three of the Company's properties in Cambridge, Massachusetts in February 2015. Lease

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termination revenue for the six months ended June 30, 2014 primarily related to the early termination of leases at the Company's 4570 Executive Drive property.

Management’s Estimates

Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reporting of revenue and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and reported amounts of revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. ASU 2014-09 is effective for the Company beginning January 1, 2017. However in July 2015, the FASB granted a one-year deferral of the effective date. The Company does not expect the adoption of this standard to have a significant impact on the consolidated financial statements as a substantial portion of the Company's revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU 2014-09.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective for the Company beginning January 1, 2016. Early adoption is permitted. The Company does not expect the adoption of this standard to have a significant impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. ASU 2015-03 is effective for the Company beginning January 1, 2016. Early adoption is permitted. Upon adoption, the Company will apply the new standard on a retrospective basis and adjust the balance sheet of each individual period to reflect the period-specific effects of applying the new standard. The Company does not expect the adoption of this standard to have a significant impact on the consolidated financial statements.

3. Equity of the Parent Company

During the six months ended June 30, 2015, the Parent Company issued restricted stock awards to the Company’s employees and directors totaling 591,154 and 15,244 shares of common stock, respectively (238,003 shares of common stock were surrendered to the Company and subsequently retired in lieu of cash payments for taxes due on the vesting of restricted stock and 21,840 shares were forfeited during the same period), which are included in the total of common stock outstanding as of the period end.

The Parent Company awarded units to certain of its executive officers (the “Performance Units”), which represent a contingent right to receive one share of the Parent Company’s common stock if vesting conditions are satisfied. Outstanding Performance Units vest ratably over two or three year periods (each, a “Performance Period”) based upon the Parent Company’s total stockholder return relative to its peer group (the "Market Conditions"). The grant date fair-value of the Performance Units was estimated using a Monte Carlo simulation which considered the likelihood of achieving the Market Conditions. The expected value of the Performance Units on the grant date was determined by simulating the total stockholder return for the Parent Company and the peer group, considering the stock price variance for each of the peer group companies compared to each other and the Parent Company. In January 2015, 136,296 Performance Units which were originally granted to certain executive officers in January 2012 and represent the maximum number of Performance Units that could have vested, were forfeited as a result of the Parent Company's total stockholder return relative to its peer group for the three years ending December 31, 2014 being below the threshold for any payout. In addition, of the 203,144 Performance Units which were originally granted to certain executive officers in January 2013 and represent the maximum number of Performance Units that could have vested, 13,215 Performance Units vested (resulting

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in the issuance of 13,215 shares of the Parent Company’s common stock, of which 5,504 shares were surrendered to the Company and subsequently retired in lieu of cash payments for taxes due on such vesting) and the remaining 189,929 Performance Units were forfeited, based on the Parent Company’s total stockholder return relative to its peer group for the two years ending December 31, 2014. During the six months ended June 30, 2015, the Parent Company awarded 401,480 Performance Units which represent the maximum number of Performance Units that may vest over a three-year Performance Period ending December 31, 2017. The grant date fair-value of these awards of approximately $5.8 million will be recognized as compensation expense on a straight-line basis over the three-year Performance Period. The total unearned compensation remaining on the Performance Units granted during the six months ended June 30, 2015 to be expensed in future periods over a weighted-average term of 2.5 years was $4.0 million as of June 30, 2015. No dividends will be paid or accrued on the Performance Units, and shares of the Parent Company's common stock will not be issued until vesting of the Performance Units occurs.

Common Stock, Operating Partnership Units and LTIP Units

As of June 30, 2015, the Company had outstanding 203,567,974 shares of the Parent Company’s common stock and 5,083,400 and 314,824 operating partnership and LTIP units, respectively (excluding operating partnership units held by the Parent Company). A share of the Parent Company’s common stock and the operating partnership and LTIP units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership.

Dividends and Distributions

The following table lists the dividends and distributions declared by the Parent Company and the Operating Partnership during the six months ended June 30, 2015:

Declaration Date

Securities Class

Amount Per

Share/Unit

Period Covered

Dividend and

Distribution

Payable Date

Dividend and

Distribution Amount

(In thousands)

March 16, 2015

Common stock and OP units

0.260

January 1, 2015 to March 31, 2015

April 15, 2015

54,331

June 15, 2015

Common stock and OP units

0.260

April 1, 2015 to June 30, 2015

July 15, 2015

54,331

Changes in Accumulated Other Comprehensive Income / (Loss) by Component

The following table shows the changes in accumulated other comprehensive income / (loss) for the Parent Company for the six months ended June 30, 2015, by component (in thousands):



	Foreign currency translation adjustments			Unrealized gains on available-for-sale securities			(Loss) / gain on derivative instruments			Total
	Foreign currency translation adjustments			Unrealized gains on available-for-sale securities			(Loss) / gain on derivative instruments			Total
Balance at December 31, 2014	$	2,309		$	37,705		$	(42,228	)	$	(2,214	)
Other comprehensive income / (loss) before reclassifications	264			37,338			(2,680		)	34,922
Amounts reclassified from accumulated other comprehensive income (1)	—			(67,823		)	5,040			(62,783		)
Net other comprehensive income / (loss)	264			(30,485		)	2,360			(27,861		)
Net other comprehensive loss / (income) allocable to noncontrolling interests	(7		)	5,598			(60		)	5,531
Balance as of June 30, 2015	$	2,566		$	12,818		$	(39,928	)	$	(24,544	)


(1)	Amounts reclassified from unrealized gain on available-for-sale securities are included in other income, net in the consolidated statements of income. Amounts reclassified from loss on derivative instruments are included in interest expense, net in the consolidated statements of income. See Note 9 for further information.

Noncontrolling Interests

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Noncontrolling interests on the consolidated balance sheets of the Parent Company relate primarily to the OP units in the Operating Partnership that are not owned by the Parent Company. With respect to the noncontrolling interests in the Operating Partnership, noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer are further evaluated to determine whether temporary or permanent equity classification on the balance sheet is appropriate. Because the OP units comprising the noncontrolling interests contain such a provision, the Company evaluated this guidance, including the requirement to settle in unregistered shares, and determined that the OP units meet the requirements to qualify for presentation as permanent equity.

The Company evaluates individual redeemable noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets. Any redeemable noncontrolling interest that fails to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value at the end of the period in which the determination is made.

The redemption value of the OP units not owned by the Parent Company, had such units been redeemed at June 30, 2015, was approximately $107.0 million based on the average closing price of the Parent Company’s common stock of $19.82 per share for the ten consecutive trading days immediately preceding June 30, 2015.

The following table shows the vested ownership interests in the Operating Partnership:



	June 30, 2015			December 31, 2014
	Operating Partnership Units and LTIP Units	Percentage of Total		Operating Partnership Units and LTIP Units	Percentage of Total
BioMed Realty Trust	202,204,287	97.5	%	196,031,538	97.4	%
Noncontrolling interest consisting of:
Operating partnership and LTIP units held by employees and related parties	2,638,638	1.3	%	2,645,888	1.3	%
Operating partnership and LTIP units held by third parties	2,627,145	1.2	%	2,627,145	1.3	%
Total	207,470,070	100.0	%	201,304,571	100.0	%

4. Capital of the Operating Partnership

Operating Partnership Units and LTIP Units

As of June 30, 2015, the Operating Partnership had outstanding 208,651,374 operating partnership units and 314,824 LTIP units. The Parent Company owned 97.5% of the partnership interests in the Operating Partnership at June 30, 2015, is the Operating Partnership’s general partner and is responsible for the management of the Operating Partnership’s business. As the general partner of the Operating Partnership, the Parent Company effectively controls the ability to issue common stock of the Parent Company upon a limited partner’s notice of redemption. In addition, the Parent Company has generally acquired OP units upon a limited partner’s notice of redemption in exchange for shares of its common stock. The redemption provisions of OP units owned by limited partners that permit the Parent Company to settle in either cash or common stock at the option of the Parent Company are further evaluated in accordance with applicable accounting guidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Operating Partnership evaluated this guidance, including the requirement to settle in unregistered shares, and determined that these OP units meet the requirements to qualify for presentation as permanent equity.

The redemption value of the OP units owned by the limited partners, not including the Parent Company, had such units been redeemed at June 30, 2015, was approximately $107.0 million based on the average closing price of the Parent Company’s common stock of $19.82 per share for the ten consecutive trading days immediately preceding June 30, 2015.

Changes in Accumulated Other Comprehensive Income / (Loss) by Component

The following table shows the changes in accumulated other comprehensive income / (loss) for the Operating Partnership for the six months ended June 30, 2015, by component (in thousands):

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	Foreign currency translation adjustments		Unrealized gains on available- for-sale securities			(Loss) / gain on derivative instruments			Total
	Foreign currency translation adjustments		Unrealized gains on available- for-sale securities			(Loss) / gain on derivative instruments			Total
Balance at December 31, 2014	$	2,367	$	38,732		$	(40,221	)	$	878
Other comprehensive income / (loss) before reclassifications	264		37,338			(2,680		)	34,922
Amounts reclassified from accumulated other comprehensive income (1)	—		(67,823		)	5,040			(62,783		)
Net other comprehensive income / (loss)	264		(30,485		)	2,360			(27,861		)
Net other comprehensive income allocable to noncontrolling interest	—		6,372			—			6,372
Balance as of June 30, 2015	$	2,631	$	14,619		$	(37,861	)	$	(20,611	)


(1)	Amounts reclassified from unrealized gain on available-for-sale securities are included in other income, net in the consolidated statements of income. Amounts reclassified from loss on derivative instruments are included in interest expense, net in the consolidated statements of income. See Note 9 for further information.

5. Debt

Debt of the Parent Company

The Parent Company does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, the Parent Company has guaranteed the Operating Partnership’s Unsecured Senior Notes due 2016 (the “Notes due 2016”), Unsecured Senior Notes due 2019 (the "Notes due 2019"), Unsecured Senior Notes due 2020 (the “Notes due 2020”), Unsecured Senior Notes due 2022 (the “Notes due 2022”), Unsecured Senior Term Loan due 2017 (the “Term Loan due 2017”), Unsecured Senior Term Loan due 2018 (the “Term Loan due 2018”) and unsecured line of credit.

Debt of the Operating Partnership

The following is a summary of the Operating Partnership’s outstanding consolidated debt as of June 30, 2015 and December 31, 2014 (dollars in thousands):

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	Stated Interest Rate		Effective Interest Rate		Principal Balance
	Stated Interest Rate		Effective Interest Rate		June 30, 2015		December 31, 2014		Maturity Date
Mortgage Notes Payable
9900 Belward Campus Drive	5.64	%	3.99	%	$	10,410	$	10,486	July 1, 2017
9901 Belward Campus Drive	5.64	%	3.99	%	12,819		12,913		July 1, 2017
100 College Street	2.40	%	2.40	%	101,847		82,210		August 2, 2016
4320 Forest Park Avenue (1)	4.00	%	2.70	%	—		21,000		June 30, 2015
300 George Street	6.20	%	4.91	%	44,172		45,052		July 1, 2025
Hershey Center for Applied Research	6.15	%	4.71	%	12,663		12,938		May 5, 2027
500 Kendall Street (Kendall D)	6.38	%	5.45	%	53,535		55,545		December 1, 2018
Shady Grove Road	5.97	%	5.97	%	140,106		141,131		September 1, 2016
University of Maryland BioPark I	5.93	%	4.69	%	15,682		16,056		May 15, 2025
University of Maryland BioPark II	5.20	%	4.33	%	61,364		61,905		September 5, 2021
University of Maryland BioPark Garage	5.20	%	4.33	%	4,619		4,660		September 1, 2021
University of Miami Life Science & Technology Park	4.00	%	2.89	%	20,000		20,000		February 1, 2016
					477,217		483,896
Unamortized premiums					11,728		12,861
Mortgage notes payable, net					488,945		496,757
Exchangeable Senior Notes (2)	3.75	%	3.75	%	—		95,678		January 30, 2015
Notes due 2016	3.85	%	3.99	%	400,000		400,000		April 15, 2016
Notes due 2019	2.63	%	2.72	%	400,000		400,000		May 1, 2019
Notes due 2020	6.13	%	6.27	%	250,000