ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended | June 30, 2014 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from | to |
Corporate Office Properties Trust | Maryland | 23-2947217 | ||
(State or other jurisdiction of | (IRS Employer | |||
incorporation or organization) | Identification No.) | |||
Corporate Office Properties, L.P. | Delaware | 23-2930022 | ||
(State or other jurisdiction of | (IRS Employer | |||
incorporation or organization) | Identification No.) |
6711 Columbia Gateway Drive, Suite 300, Columbia, MD | 21046 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer ý | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
• | combined reports better reflect how management and the analyst community view the business as a single operating unit; |
• | combined reports enhance investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management; |
• | combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and |
• | combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
• | consolidated financial statements; |
• | the following notes to the consolidated financial statements: |
• | Note 3, Fair Value Measurements of COPT and subsidiaries and COPLP and subsidiaries; and |
• | Note 16, Earnings per Share of COPT and subsidiaries and Earnings per Unit of COPLP and subsidiaries; |
• | “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPT”; and |
• | “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPLP.” |
PAGE | ||
Consolidated Financial Statements of Corporate Office Properties Trust | ||
Consolidated Financial Statements of Corporate Office Properties, L.P. | ||
Notes to Consolidated Financial Statements (unaudited) | ||
June 30, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,724,242 | $ | 2,702,693 | |||
Projects in development or held for future development | 530,000 | 511,608 | |||||
Total properties, net | 3,254,242 | 3,214,301 | |||||
Assets held for sale, net | 22,868 | — | |||||
Cash and cash equivalents | 76,216 | 54,373 | |||||
Restricted cash and marketable securities | 11,689 | 11,448 | |||||
Accounts receivable (net of allowance for doubtful accounts of $2,282 and $2,976, respectively) | 30,911 | 27,000 | |||||
Deferred rent receivable (net of allowance of $1,491 and $2,126, respectively) | 93,270 | 89,456 | |||||
Intangible assets on real estate acquisitions, net | 51,645 | 59,258 | |||||
Deferred leasing and financing costs, net | 65,251 | 66,267 | |||||
Mortgage and other investing receivables | 56,549 | 53,663 | |||||
Prepaid expenses and other assets | 46,859 | 54,186 | |||||
Total assets | $ | 3,709,500 | $ | 3,629,952 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,099,343 | $ | 1,927,703 | |||
Accounts payable and accrued expenses | 105,205 | 98,785 | |||||
Rents received in advance and security deposits | 27,520 | 31,492 | |||||
Dividends and distributions payable | 28,342 | 29,080 | |||||
Deferred revenue associated with operating leases | 12,355 | 10,369 | |||||
Interest rate derivatives | 3,236 | 3,309 | |||||
Other liabilities | 14,818 | 14,207 | |||||
Total liabilities | 2,290,819 | 2,114,945 | |||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interest | 18,901 | 17,758 | |||||
Equity: | |||||||
Corporate Office Properties Trust’s shareholders’ equity: | |||||||
Preferred Shares of beneficial interest at liquidation preference ($0.01 par value; 25,000,000 shares authorized; issued and outstanding of 7,431,667 at June 30, 2014 and 9,431,667 at December 31, 2013) | 199,083 | 249,083 | |||||
Common Shares of beneficial interest ($0.01 par value; 125,000,000 shares authorized, shares issued and outstanding of 87,668,308 at June 30, 2014 and 87,394,512 at December 31, 2013) | 877 | 874 | |||||
Additional paid-in capital | 1,819,436 | 1,814,015 | |||||
Cumulative distributions in excess of net income | (688,033 | ) | (641,868 | ) | |||
Accumulated other comprehensive (loss) income | (761 | ) | 3,480 | ||||
Total Corporate Office Properties Trust’s shareholders’ equity | 1,330,602 | 1,425,584 | |||||
Noncontrolling interests in subsidiaries: | |||||||
Common units in COPLP | 50,323 | 53,468 | |||||
Preferred units in COPLP | 8,800 | 8,800 | |||||
Other consolidated entities | 10,055 | 9,397 | |||||
Noncontrolling interests in subsidiaries | 69,178 | 71,665 | |||||
Total equity | 1,399,780 | 1,497,249 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,709,500 | $ | 3,629,952 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 94,332 | $ | 94,421 | $ | 192,367 | $ | 186,270 | |||||||
Tenant recoveries and other real estate operations revenue | 21,627 | 21,311 | 48,469 | 41,419 | |||||||||||
Construction contract and other service revenues | 23,861 | 20,795 | 45,651 | 35,057 | |||||||||||
Total revenues | 139,820 | 136,527 | 286,487 | 262,746 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 43,772 | 41,333 | 93,544 | 81,721 | |||||||||||
Depreciation and amortization associated with real estate operations | 30,895 | 27,673 | 74,491 | 54,683 | |||||||||||
Construction contract and other service expenses | 23,136 | 19,382 | 41,760 | 32,859 | |||||||||||
Impairment losses | 1,302 | — | 1,302 | — | |||||||||||
General, administrative and leasing expenses | 7,528 | 6,583 | 15,671 | 14,403 | |||||||||||
Business development expenses and land carry costs | 1,351 | 1,327 | 2,677 | 2,686 | |||||||||||
Total operating expenses | 107,984 | 96,298 | 229,445 | 186,352 | |||||||||||
Operating income | 31,836 | 40,229 | 57,042 | 76,394 | |||||||||||
Interest expense | (23,478 | ) | (21,102 | ) | (44,305 | ) | (41,392 | ) | |||||||
Interest and other income | 1,299 | 2,006 | 2,584 | 2,952 | |||||||||||
Loss on early extinguishment of debt | (270 | ) | (21,470 | ) | (270 | ) | (26,654 | ) | |||||||
Income (loss) from continuing operations before equity in (loss) income of unconsolidated entities and income taxes | 9,387 | (337 | ) | 15,051 | 11,300 | ||||||||||
Equity in (loss) income of unconsolidated entities | (47 | ) | 126 | 13 | 167 | ||||||||||
Income tax expense | (92 | ) | (21 | ) | (156 | ) | (37 | ) | |||||||
Income (loss) from continuing operations | 9,248 | (232 | ) | 14,908 | 11,430 | ||||||||||
Discontinued operations | (198 | ) | (4,502 | ) | (187 | ) | (3,241 | ) | |||||||
Income (loss) before gain on sales of real estate | 9,050 | (4,734 | ) | 14,721 | 8,189 | ||||||||||
Gain on sales of real estate | — | 329 | — | 2,683 | |||||||||||
Net income (loss) | 9,050 | (4,405 | ) | 14,721 | 10,872 | ||||||||||
Net (income) loss attributable to noncontrolling interests: | |||||||||||||||
Common units in COPLP | (158 | ) | 671 | (174 | ) | 242 | |||||||||
Preferred units in COPLP | (165 | ) | (165 | ) | (330 | ) | (330 | ) | |||||||
Other consolidated entities | (837 | ) | (1,466 | ) | (1,586 | ) | (1,129 | ) | |||||||
Net income (loss) attributable to COPT | 7,890 | (5,365 | ) | 12,631 | 9,655 | ||||||||||
Preferred share dividends | (4,344 | ) | (4,885 | ) | (8,834 | ) | (10,991 | ) | |||||||
Issuance costs associated with redeemed preferred shares | (1,769 | ) | (2,904 | ) | (1,769 | ) | (2,904 | ) | |||||||
Net income (loss) attributable to COPT common shareholders | $ | 1,777 | $ | (13,154 | ) | $ | 2,028 | $ | (4,240 | ) | |||||
Net income (loss) attributable to COPT: | |||||||||||||||
Income (loss) from continuing operations | $ | 8,077 | $ | (990 | ) | $ | 12,805 | $ | 12,859 | ||||||
Discontinued operations, net | (187 | ) | (4,375 | ) | (174 | ) | (3,204 | ) | |||||||
Net income (loss) attributable to COPT | $ | 7,890 | $ | (5,365 | ) | $ | 12,631 | $ | 9,655 | ||||||
Basic earnings per common share (1) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.02 | $ | (0.10 | ) | $ | 0.02 | $ | (0.02 | ) | |||||
Discontinued operations | 0.00 | (0.06 | ) | 0.00 | (0.03 | ) | |||||||||
Net income (loss) attributable to COPT common shareholders | $ | 0.02 | $ | (0.16 | ) | $ | 0.02 | $ | (0.05 | ) | |||||
Diluted earnings per common share (1) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.02 | $ | (0.10 | ) | $ | 0.02 | $ | (0.02 | ) | |||||
Discontinued operations | 0.00 | (0.06 | ) | 0.00 | (0.03 | ) | |||||||||
Net income (loss) attributable to COPT common shareholders | $ | 0.02 | $ | (0.16 | ) | $ | 0.02 | $ | (0.05 | ) | |||||
Dividends declared per common share | $ | 0.275 | $ | 0.275 | $ | 0.550 | $ | 0.550 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income (loss) | $ | 9,050 | $ | (4,405 | ) | $ | 14,721 | $ | 10,872 | ||||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized (losses) gains on interest rate derivatives | (3,630 | ) | 7,830 | (5,753 | ) | 8,292 | |||||||||
Losses on interest rate derivatives included in interest expense | 719 | 674 | 1,414 | 1,332 | |||||||||||
Other comprehensive (loss) income | (2,911 | ) | 8,504 | (4,339 | ) | 9,624 | |||||||||
Comprehensive income | 6,139 | 4,099 | 10,382 | 20,496 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (1,081 | ) | (1,422 | ) | (1,992 | ) | (1,774 | ) | |||||||
Comprehensive income attributable to COPT | $ | 5,058 | $ | 2,677 | $ | 8,390 | $ | 18,722 |
Preferred Shares | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||||||||
Balance at December 31, 2012 (80,952,986 common shares outstanding) | $ | 333,833 | $ | 809 | $ | 1,653,672 | $ | (617,455 | ) | $ | (5,435 | ) | $ | 71,075 | $ | 1,436,499 | |||||||||||
Redemption of preferred shares (3,390,000 shares) | (84,750 | ) | — | 2,904 | (2,904 | ) | — | — | (84,750 | ) | |||||||||||||||||
Conversion of common units to common shares (279,019 shares) | — | 3 | 3,575 | — | — | (3,578 | ) | — | |||||||||||||||||||
Common shares issued to the public (4,485,000 shares) | — | 45 | 117,868 | — | — | — | 117,913 | ||||||||||||||||||||
Exercise of share options (32,756 shares) | — | — | 636 | — | — | — | 636 | ||||||||||||||||||||
Share-based compensation | — | 1 | 3,847 | — | — | — | 3,848 | ||||||||||||||||||||
Restricted common share redemptions (68,762 shares) | — | — | (1,784 | ) | — | — | — | (1,784 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (2,495 | ) | — | — | 2,495 | — | |||||||||||||||||||
Comprehensive income | — | — | — | 9,655 | 9,066 | 1,490 | 20,211 | ||||||||||||||||||||
Dividends | — | — | — | (58,188 | ) | — | — | (58,188 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (2,422 | ) | (2,422 | ) | ||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | — | — | — | 85 | 85 | ||||||||||||||||||||
Distributions to noncontrolling interest in other consolidated entities | — | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (5,631 | ) | — | — | — | (5,631 | ) | ||||||||||||||||||
Tax loss from share-based compensation | — | — | (122 | ) | — | — | — | (122 | ) | ||||||||||||||||||
Balance at June 30, 2013 (85,845,403 common shares outstanding) | $ | 249,083 | $ | 858 | $ | 1,772,470 | $ | (668,892 | ) | $ | 3,631 | $ | 69,137 | $ | 1,426,287 | ||||||||||||
Balance at December 31, 2013 (87,394,512 common shares outstanding) | $ | 249,083 | $ | 874 | $ | 1,814,015 | $ | (641,868 | ) | $ | 3,480 | $ | 71,665 | $ | 1,497,249 | ||||||||||||
Redemption of preferred shares (2,000,000 shares) | (50,000 | ) | — | 1,769 | (1,769 | ) | — | — | (50,000 | ) | |||||||||||||||||
Conversion of common units to common shares (78,498 shares) | — | — | 1,047 | — | — | (1,047 | ) | — | |||||||||||||||||||
Costs associated with common shares issued to the public | — | — | (7 | ) | — | — | — | (7 | ) | ||||||||||||||||||
Exercise of share options (51,289 shares) | — | — | 1,185 | — | — | — | 1,185 | ||||||||||||||||||||
Share-based compensation | — | 3 | 3,542 | — | — | — | 3,545 | ||||||||||||||||||||
Restricted common share redemptions (49,454 shares) | — | — | (1,326 | ) | — | — | — | (1,326 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (72 | ) | — | — | 72 | — | |||||||||||||||||||
Comprehensive income | — | — | — | 12,631 | (4,241 | ) | 976 | 9,366 | |||||||||||||||||||
Dividends | — | — | — | (57,027 | ) | — | — | (57,027 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (2,483 | ) | (2,483 | ) | ||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | — | — | — | 3 | 3 | ||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (717 | ) | — | — | — | (717 | ) | ||||||||||||||||||
Balance at June 30, 2014 (87,668,308 common shares outstanding) | $ | 199,083 | $ | 877 | $ | 1,819,436 | $ | (688,033 | ) | $ | (761 | ) | $ | 69,178 | $ | 1,399,780 |
For the Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 232,877 | $ | 233,068 | |||
Construction contract and other service revenues received | 35,105 | 28,898 | |||||
Property operating expenses paid | (78,621 | ) | (75,566 | ) | |||
Construction contract and other service expenses paid | (34,588 | ) | (33,404 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (16,904 | ) | (14,988 | ) | |||
Interest expense paid | (35,365 | ) | (41,825 | ) | |||
Previously accreted interest expense paid | — | (11,116 | ) | ||||
Payments in connection with early extinguishment of debt | (104 | ) | (23,932 | ) | |||
Interest and other income received | 346 | 390 | |||||
Income taxes refund | 204 | 6 | |||||
Net cash provided by operating activities | 102,950 | 61,531 | |||||
Cash flows from investing activities | |||||||
Construction, development and redevelopment | (105,459 | ) | (99,779 | ) | |||
Tenant improvements on operating properties | (10,842 | ) | (10,496 | ) | |||
Other capital improvements on operating properties | (16,482 | ) | (11,738 | ) | |||
Proceeds from dispositions of properties | 1,971 | 12,344 | |||||
Mortgage and other loan receivables funded | (565 | ) | (2,756 | ) | |||
Leasing costs paid | (7,772 | ) | (6,048 | ) | |||
Other | (892 | ) | 3,144 | ||||
Net cash used in investing activities | (140,041 | ) | (115,329 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 115,000 | 374,000 | |||||
Unsecured senior notes | 297,342 | 347,081 | |||||
Other debt proceeds | 9,931 | 80,232 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (115,000 | ) | (226,000 | ) | |||
Scheduled principal amortization | (3,437 | ) | (5,003 | ) | |||
Other debt repayments | (133,010 | ) | (486,803 | ) | |||
Deferred financing costs paid | (653 | ) | (2,099 | ) | |||
Net proceeds from issuance of common shares | 1,178 | 118,768 | |||||
Redemption of preferred shares | (50,000 | ) | (84,750 | ) | |||
Common share dividends paid | (48,118 | ) | (45,852 | ) | |||
Preferred share dividends paid | (9,626 | ) | (12,355 | ) | |||
Distributions paid to noncontrolling interests in COPLP | (2,641 | ) | (2,503 | ) | |||
Restricted share redemptions | (1,326 | ) | (1,784 | ) | |||
Other | (706 | ) | (532 | ) | |||
Net cash provided by financing activities | 58,934 | 52,400 | |||||
Net increase (decrease) in cash and cash equivalents | 21,843 | (1,398 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 54,373 | 10,594 | |||||
End of period | $ | 76,216 | $ | 9,196 |
For the Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | 14,721 | $ | 10,872 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 75,839 | 58,244 | |||||
Impairment losses | 1,329 | 9,052 | |||||
Settlement of previously accreted interest expense | — | (11,116 | ) | ||||
Amortization of deferred financing costs | 2,289 | 2,971 | |||||
Increase in deferred rent receivable | (1,754 | ) | (6,598 | ) | |||
Amortization of net debt discounts | 400 | 1,328 | |||||
Loss (gain) on sales of real estate | 4 | (2,683 | ) | ||||
Share-based compensation | 3,056 | 3,296 | |||||
Loss on early extinguishment of debt | 282 | 2,722 | |||||
Other | (1,664 | ) | (2,472 | ) | |||
Changes in operating assets and liabilities: | |||||||
Increase in accounts receivable | (3,916 | ) | (4,384 | ) | |||
Increase in restricted cash and marketable securities | (113 | ) | (969 | ) | |||
Decrease in prepaid expenses and other assets | 3,213 | 5,884 | |||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 13,236 | (1,079 | ) | ||||
Decrease in rents received in advance and security deposits | (3,972 | ) | (3,537 | ) | |||
Net cash provided by operating activities | $ | 102,950 | $ | 61,531 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Decrease in accrued capital improvements, leasing and other investing activity costs | $ | (7,153 | ) | $ | (12,750 | ) | |
(Decrease) increase in fair value of derivatives applied to accumulated other comprehensive (loss) income and noncontrolling interests | $ | (4,369 | ) | $ | 9,592 | ||
Dividends/distribution payable | $ | 28,342 | $ | 28,602 | |||
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | $ | 1,047 | $ | 3,578 | |||
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | $ | 72 | $ | 2,495 | |||
Increase in redeemable noncontrolling interest and decrease in shareholders’ equity to carry redeemable noncontrolling interest at fair value | $ | 717 | $ | 5,631 |
June 30, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,724,242 | $ | 2,702,693 | |||
Projects in development or held for future development | 530,000 | 511,608 | |||||
Total properties, net | 3,254,242 | 3,214,301 | |||||
Assets held for sale, net | 22,868 | — | |||||
Cash and cash equivalents | 76,216 | 54,373 | |||||
Restricted cash and marketable securities | 4,068 | 3,981 | |||||
Accounts receivable (net of allowance for doubtful accounts of $2,282 and $2,976, respectively) | 30,911 | 27,000 | |||||
Deferred rent receivable (net of allowance of $1,491 and $2,126, respectively) | 93,270 | 89,456 | |||||
Intangible assets on real estate acquisitions, net | 51,645 | 59,258 | |||||
Deferred leasing and financing costs, net | 65,251 | 66,267 | |||||
Mortgage and other investing receivables | 56,549 | 53,663 | |||||
Prepaid expenses and other assets | 46,859 | 54,186 | |||||
Total assets | $ | 3,701,879 | $ | 3,622,485 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,099,343 | $ | 1,927,703 | |||
Accounts payable and accrued expenses | 105,205 | 98,785 | |||||
Rents received in advance and security deposits | 27,520 | 31,492 | |||||
Distributions payable | 28,342 | 29,080 | |||||
Deferred revenue associated with operating leases | 12,355 | 10,369 | |||||
Interest rate derivatives | 3,236 | 3,309 | |||||
Other liabilities | 7,197 | 6,740 | |||||
Total liabilities | 2,283,198 | 2,107,478 | |||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interest | 18,901 | 17,758 | |||||
Equity: | |||||||
Corporate Office Properties, L.P.’s equity: | |||||||
Preferred units | |||||||
General partner, preferred units outstanding of 7,431,667 at June 30, 2014 and 9,431,667 at December 31, 2013 | 199,083 | 249,083 | |||||
Limited partner, 352,000 preferred units outstanding at June 30, 2014 and December 31, 2013 | 8,800 | 8,800 | |||||
Common units, 87,668,308 and 87,394,512 held by the general partner and 3,899,202 and 3,977,700 held by limited partners at June 30, 2014 and December 31, 2013, respectively | 1,182,635 | 1,226,318 | |||||
Accumulated other comprehensive (loss) income | (825 | ) | 3,605 | ||||
Total Corporate Office Properties, L.P.’s equity | 1,389,693 | 1,487,806 | |||||
Noncontrolling interests in subsidiaries | 10,087 | 9,443 | |||||
Total equity | 1,399,780 | 1,497,249 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,701,879 | $ | 3,622,485 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 94,332 | $ | 94,421 | $ | 192,367 | $ | 186,270 | |||||||
Tenant recoveries and other real estate operations revenue | 21,627 | 21,311 | 48,469 | 41,419 | |||||||||||
Construction contract and other service revenues | 23,861 | 20,795 | 45,651 | 35,057 | |||||||||||
Total revenues | 139,820 | 136,527 | 286,487 | 262,746 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 43,772 | 41,333 | 93,544 | 81,721 | |||||||||||
Depreciation and amortization associated with real estate operations | 30,895 | 27,673 | 74,491 | 54,683 | |||||||||||
Construction contract and other service expenses | 23,136 | 19,382 | 41,760 | 32,859 | |||||||||||
Impairment losses | 1,302 | — | 1,302 | — | |||||||||||
General, administrative and leasing expenses | 7,528 | 6,583 | 15,671 | 14,403 | |||||||||||
Business development expenses and land carry costs | 1,351 | 1,327 | 2,677 | 2,686 | |||||||||||
Total operating expenses | 107,984 | 96,298 | 229,445 | 186,352 | |||||||||||
Operating income | 31,836 | 40,229 | 57,042 | 76,394 | |||||||||||
Interest expense | (23,478 | ) | (21,102 | ) | (44,305 | ) | (41,392 | ) | |||||||
Interest and other income | 1,299 | 2,006 | 2,584 | 2,952 | |||||||||||
Loss on early extinguishment of debt | (270 | ) | (21,470 | ) | (270 | ) | (26,654 | ) | |||||||
Income (loss) from continuing operations before equity in (loss) income of unconsolidated entities and income taxes | 9,387 | (337 | ) | 15,051 | 11,300 | ||||||||||
Equity in (loss) income of unconsolidated entities | (47 | ) | 126 | 13 | 167 | ||||||||||
Income tax expense | (92 | ) | (21 | ) | (156 | ) | (37 | ) | |||||||
Income (loss) from continuing operations | 9,248 | (232 | ) | 14,908 | 11,430 | ||||||||||
Discontinued operations | (198 | ) | (4,502 | ) | (187 | ) | (3,241 | ) | |||||||
Income before gain on sales of real estate | 9,050 | (4,734 | ) | 14,721 | 8,189 | ||||||||||
Gain on sales of real estate | — | 329 | — | 2,683 | |||||||||||
Net income (loss) | 9,050 | (4,405 | ) | 14,721 | 10,872 | ||||||||||
Net income attributable to noncontrolling interests in consolidated entities | (837 | ) | (1,473 | ) | (1,574 | ) | (1,137 | ) | |||||||
Net income (loss) attributable to COPLP | 8,213 | (5,878 | ) | 13,147 | 9,735 | ||||||||||
Preferred unit distributions | (4,509 | ) | (5,050 | ) | (9,164 | ) | (11,321 | ) | |||||||
Issuance costs associated with redeemed preferred units | (1,769 | ) | (2,904 | ) | (1,769 | ) | (2,904 | ) | |||||||
Net income (loss) attributable to COPLP common unitholders | $ | 1,935 | $ | (13,832 | ) | $ | 2,214 | $ | (4,490 | ) | |||||
Net income (loss) attributable to COPLP: | |||||||||||||||
Income (loss) from continuing operations | $ | 8,408 | $ | (1,311 | ) | $ | 13,329 | $ | 13,074 | ||||||
Discontinued operations, net | (195 | ) | (4,567 | ) | (182 | ) | (3,339 | ) | |||||||
Net income (loss) attributable to COPLP | $ | 8,213 | $ | (5,878 | ) | $ | 13,147 | $ | 9,735 | ||||||
Basic earnings per common unit (1) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.02 | $ | (0.10 | ) | $ | 0.02 | $ | (0.02 | ) | |||||
Discontinued operations | 0.00 | (0.06 | ) | 0.00 | (0.03 | ) | |||||||||
Net income (loss) attributable to COPLP common unitholders | $ | 0.02 | $ | (0.16 | ) | $ | 0.02 | $ | (0.05 | ) | |||||
Diluted earnings per common unit (1) | |||||||||||||||
Income (loss) from continuing operations | $ | 0.02 | $ | (0.10 | ) | $ | 0.02 | $ | (0.02 | ) | |||||
Discontinued operations | 0.00 | (0.06 | ) | 0.00 | (0.03 | ) | |||||||||
Net income (loss) attributable to COPLP common unitholders | $ | 0.02 | $ | (0.16 | ) | $ | 0.02 | $ | (0.05 | ) | |||||
Distributions declared per common unit | $ | 0.275 | $ | 0.275 | $ | 0.550 | $ | 0.550 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income (loss) | $ | 9,050 | $ | (4,405 | ) | $ | 14,721 | $ | 10,872 | ||||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized (losses) gains on interest rate derivatives | (3,630 | ) | 7,830 | (5,753 | ) | 8,292 | |||||||||
Losses on interest rate derivatives included in interest expense | 719 | 674 | 1,414 | 1,332 | |||||||||||
Other comprehensive (loss) income | (2,911 | ) | 8,504 | (4,339 | ) | 9,624 | |||||||||
Comprehensive income | 6,139 | 4,099 | 10,382 | 20,496 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (884 | ) | (1,579 | ) | (1,666 | ) | (1,289 | ) | |||||||
Comprehensive income attributable to COPLP | $ | 5,255 | $ | 2,520 | $ | 8,716 | $ | 19,207 |
Limited Partner Preferred Units | General Partner Preferred Units | Common Units | ||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2012 | 352,000 | $ | 8,800 | 12,821,667 | $ | 333,833 | 85,020,528 | $ | 1,089,391 | $ | (5,708 | ) | $ | 10,183 | $ | 1,436,499 | ||||||||||||||||
Redemption of preferred units resulting from redemption of preferred shares | — | — | (3,390,000 | ) | (84,750 | ) | — | — | — | — | (84,750 | ) | ||||||||||||||||||||
Issuance of common units resulting from public issuance of common shares | — | — | — | — | 4,485,000 | 117,913 | — | — | 117,913 | |||||||||||||||||||||||
Issuance of common units resulting from exercise of share options | — | — | — | — | 32,756 | 636 | — | — | 636 | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | 164,404 | 3,848 | — | — | 3,848 | |||||||||||||||||||||||
Restricted common unit redemptions | — | — | — | — | (68,762 | ) | (1,784 | ) | — | — | (1,784 | ) | ||||||||||||||||||||
Comprehensive loss | — | 330 | — | 10,991 | — | (1,586 | ) | 9,471 | 1,005 | 20,211 | ||||||||||||||||||||||
Distributions to owners of common and preferred units | — | (330 | ) | — | (10,991 | ) | — | (49,289 | ) | — | — | (60,610 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (8 | ) | (8 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | 85 | 85 | |||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (5,631 | ) | — | — | (5,631 | ) | |||||||||||||||||||||
Tax loss from share-based compensation | — | — | — | — | — | (122 | ) | — | — | (122 | ) | |||||||||||||||||||||
Balance at June 30, 2013 | 352,000 | $ | 8,800 | 9,431,667 | $ | 249,083 | 89,633,926 | $ | 1,153,376 | $ | 3,763 | $ | 11,265 | $ | 1,426,287 | |||||||||||||||||
Balance at December 31, 2013 | 352,000 | $ | 8,800 | 9,431,667 | $ | 249,083 | 91,372,212 | $ | 1,226,318 | $ | 3,605 | $ | 9,443 | $ | 1,497,249 | |||||||||||||||||
Redemption of preferred units resulting from redemption of preferred shares | — | — | (2,000,000 | ) | (50,000 | ) | — | — | — | — | (50,000 | ) | ||||||||||||||||||||
Costs associated with common shares issued to the public | — | — | — | — | — | (7 | ) | — | — | (7 | ) | |||||||||||||||||||||
Issuance of common units resulting from exercise of share options | — | — | — | — | 51,289 | 1,185 | — | — | 1,185 | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | 193,463 | 3,545 | — | — | 3,545 | |||||||||||||||||||||||
Restricted common unit redemptions | — | — | — | — | (49,454 | ) | (1,326 | ) | — | — | (1,326 | ) | ||||||||||||||||||||
Comprehensive income | — | 330 | — | 8,834 | — | 3,983 | (4,430 | ) | 649 | 9,366 | ||||||||||||||||||||||
Distributions to owners of common and preferred units | — | (330 | ) | — | (8,834 | ) | — | (50,346 | ) | — | — | (59,510 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (8 | ) | (8 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | 3 | 3 | |||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (717 | ) | — | — | (717 | ) | |||||||||||||||||||||
Balance at June 30, 2014 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 91,567,510 | $ | 1,182,635 | $ | (825 | ) | $ | 10,087 | $ | 1,399,780 |
For the Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 232,877 | $ | 233,068 | |||
Construction contract and other service revenues received | 35,105 | 28,898 | |||||
Property operating expenses paid | (78,621 | ) | (75,566 | ) | |||
Construction contract and other service expenses paid | (34,588 | ) | (33,404 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (16,904 | ) | (14,988 | ) | |||
Interest expense paid | (35,365 | ) | (41,825 | ) | |||
Previously accreted interest expense paid | — | (11,116 | ) | ||||
Payments in connection with early extinguishment of debt | (104 | ) | (23,932 | ) | |||
Interest and other income received | 346 | 390 | |||||
Income taxes refund | 204 | 6 | |||||
Net cash provided by operating activities | 102,950 | 61,531 | |||||
Cash flows from investing activities | |||||||
Construction, development and redevelopment | (105,459 | ) | (99,779 | ) | |||
Tenant improvements on operating properties | (10,842 | ) | (10,496 | ) | |||
Other capital improvements on operating properties | (16,482 | ) | (11,738 | ) | |||
Proceeds from dispositions of properties | 1,971 | 12,344 | |||||
Mortgage and other loan receivables funded | (565 | ) | (2,756 | ) | |||
Leasing costs paid | (7,772 | ) | (6,048 | ) | |||
Other | (892 | ) | 3,144 | ||||
Net cash used in investing activities | (140,041 | ) | (115,329 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 115,000 | 374,000 | |||||
Unsecured senior notes | 297,342 | 347,081 | |||||
Other debt proceeds | 9,931 | 80,232 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (115,000 | ) | (226,000 | ) | |||
Scheduled principal amortization | (3,437 | ) | (5,003 | ) | |||
Other debt repayments | (133,010 | ) | (486,803 | ) | |||
Deferred financing costs paid | (653 | ) | (2,099 | ) | |||
Net proceeds from issuance of common units | 1,178 | 118,768 | |||||
Redemption of preferred units | (50,000 | ) | (84,750 | ) | |||
Common unit distributions paid | (50,429 | ) | (48,025 | ) | |||
Preferred unit distributions paid | (9,956 | ) | (12,685 | ) | |||
Restricted unit redemptions | (1,326 | ) | (1,784 | ) | |||
Other | (706 | ) | (532 | ) | |||
Net cash provided by financing activities | 58,934 | 52,400 | |||||
Net increase (decrease) in cash and cash equivalents | 21,843 | (1,398 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 54,373 | 10,594 | |||||
End of period | $ | 76,216 | $ | 9,196 |
For the Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | 14,721 | $ | 10,872 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 75,839 | 58,244 | |||||
Impairment losses | 1,329 | 9,052 | |||||
Settlement of previously accreted interest expense | — | (11,116 | ) | ||||
Amortization of deferred financing costs | 2,289 | 2,971 | |||||
Increase in deferred rent receivable | (1,754 | ) | (6,598 | ) | |||
Amortization of net debt discounts | 400 | 1,328 | |||||
Loss (gain) on sales of real estate | 4 | (2,683 | ) | ||||
Share-based compensation | 3,056 | 3,296 | |||||
Loss on early extinguishment of debt |