ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended | September 30, 2015 |
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. | ||
September 30, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,932,843 | $ | 2,751,488 | |||
Projects in development or held for future development | 414,757 | 545,426 | |||||
Total properties, net | 3,347,600 | 3,296,914 | |||||
Assets held for sale, net | 150,572 | 14,339 | |||||
Cash and cash equivalents | 3,840 | 6,077 | |||||
Restricted cash and marketable securities | 9,286 | 9,069 | |||||
Accounts receivable (net of allowance for doubtful accounts of $2,010 and $717, respectively) | 19,962 | 26,901 | |||||
Deferred rent receivable (net of allowance of $1,816 and $1,418, respectively) | 103,064 | 95,910 | |||||
Intangible assets on real estate acquisitions, net | 106,174 | 43,854 | |||||
Deferred leasing and financing costs, net | 64,367 | 64,797 | |||||
Investing receivables | 46,821 | 52,147 | |||||
Prepaid expenses and other assets, net | 66,787 | 60,249 | |||||
Total assets | $ | 3,918,473 | $ | 3,670,257 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,121,240 | $ | 1,920,057 | |||
Accounts payable and accrued expenses | 98,551 | 123,035 | |||||
Rents received in advance and security deposits | 34,504 | 31,011 | |||||
Dividends and distributions payable | 30,182 | 29,862 | |||||
Deferred revenue associated with operating leases | 20,113 | 13,031 | |||||
Interest rate derivatives | 5,844 | 1,855 | |||||
Other liabilities | 8,524 | 12,105 | |||||
Total liabilities | 2,318,958 | 2,130,956 | |||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interest | 19,608 | 18,417 | |||||
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 September 30, 2015 and December 31, 2014) | 199,083 | 199,083 | |||||
Common Shares of beneficial interest ($0.01 par value; 125,000,000 shares authorized, shares issued and outstanding of 94,533,670 at September 30, 2015 and 93,255,284 at December 31, 2014) | 945 | 933 | |||||
Additional paid-in capital | 2,002,730 | 1,969,968 | |||||
Cumulative distributions in excess of net income | (686,986 | ) | (717,264 | ) | |||
Accumulated other comprehensive loss | (5,823 | ) | (1,297 | ) | |||
Total Corporate Office Properties Trust’s shareholders’ equity | 1,509,949 | 1,451,423 | |||||
Noncontrolling interests in subsidiaries: | |||||||
Common units in COPLP | 50,992 | 51,534 | |||||
Preferred units in COPLP | 8,800 | 8,800 | |||||
Other consolidated entities | 10,166 | 9,127 | |||||
Noncontrolling interests in subsidiaries | 69,958 | 69,461 | |||||
Total equity | 1,579,907 | 1,520,884 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,918,473 | $ | 3,670,257 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 109,080 | $ | 96,207 | $ | 312,826 | $ | 288,574 | |||||||
Tenant recoveries and other real estate operations revenue | 24,606 | 22,069 | 71,761 | 70,538 | |||||||||||
Construction contract and other service revenues | 17,058 | 34,739 | 97,554 | 80,390 | |||||||||||
Total revenues | 150,744 | 153,015 | 482,141 | 439,502 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 48,897 | 43,056 | 145,996 | 136,600 | |||||||||||
Depreciation and amortization associated with real estate operations | 38,403 | 30,237 | 103,788 | 104,728 | |||||||||||
Construction contract and other service expenses | 16,132 | 33,593 | 94,923 | 75,353 | |||||||||||
Impairment losses | 2,307 | 66 | 3,545 | 1,368 | |||||||||||
General, administrative and leasing expenses | 7,439 | 7,211 | 22,864 | 22,882 | |||||||||||
Business development expenses and land carry costs | 5,573 | 1,430 | 10,986 | 4,107 | |||||||||||
Total operating expenses | 118,751 | 115,593 | 382,102 | 345,038 | |||||||||||
Operating income | 31,993 | 37,422 | 100,039 | 94,464 | |||||||||||
Interest expense | (24,121 | ) | (24,802 | ) | (66,727 | ) | (69,107 | ) | |||||||
Interest and other income | 692 | 1,191 | 3,217 | 3,775 | |||||||||||
Gain (loss) on early extinguishment of debt | 85,745 | (176 | ) | 85,677 | (446 | ) | |||||||||
Income from continuing operations before equity in income of unconsolidated entities and income taxes | 94,309 | 13,635 | 122,206 | 28,686 | |||||||||||
Equity in income of unconsolidated entities | 18 | 193 | 52 | 206 | |||||||||||
Income tax expense | (48 | ) | (101 | ) | (153 | ) | (257 | ) | |||||||
Income from continuing operations | 94,279 | 13,727 | 122,105 | 28,635 | |||||||||||
Discontinued operations | — | 191 | 156 | 4 | |||||||||||
Income before gain on sales of real estate | 94,279 | 13,918 | 122,261 | 28,639 | |||||||||||
Gain on sales of real estate | 15 | 10,630 | 4,000 | 10,630 | |||||||||||
Net income | 94,294 | 24,548 | 126,261 | 39,269 | |||||||||||
Net income attributable to noncontrolling interests: | |||||||||||||||
Common units in COPLP | (3,357 | ) | (768 | ) | (4,231 | ) | (942 | ) | |||||||
Preferred units in COPLP | (165 | ) | (165 | ) | (495 | ) | (495 | ) | |||||||
Other consolidated entities | (972 | ) | (895 | ) | (2,599 | ) | (2,481 | ) | |||||||
Net income attributable to COPT | 89,800 | 22,720 | 118,936 | 35,351 | |||||||||||
Preferred share dividends | (3,552 | ) | (3,553 | ) | (10,657 | ) | (12,387 | ) | |||||||
Issuance costs associated with redeemed preferred shares | — | — | — | (1,769 | ) | ||||||||||
Net income attributable to COPT common shareholders | $ | 86,248 | $ | 19,167 | $ | 108,279 | $ | 21,195 | |||||||
Net income attributable to COPT: | |||||||||||||||
Income from continuing operations | $ | 89,800 | $ | 22,537 | $ | 118,783 | $ | 35,342 | |||||||
Discontinued operations, net | — | 183 | 153 | 9 | |||||||||||
Net income attributable to COPT | $ | 89,800 | $ | 22,720 | $ | 118,936 | $ | 35,351 | |||||||
Basic earnings per common share (1) | |||||||||||||||
Income from continuing operations | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to COPT common shareholders | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Diluted earnings per common share (1) | |||||||||||||||
Income from continuing operations | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to COPT common shareholders | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Dividends declared per common share | $ | 0.275 | $ | 0.275 | $ | 0.825 | $ | 0.825 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 94,294 | $ | 24,548 | $ | 126,261 | $ | 39,269 | |||||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized (losses) gains on interest rate derivatives | (3,638 | ) | 1,015 | (6,720 | ) | (4,738 | ) | ||||||||
Losses on interest rate derivatives included in interest expense | 915 | 756 | 2,457 | 2,170 | |||||||||||
Equity in other comprehensive loss of equity method investee | — | — | (264 | ) | — | ||||||||||
Other comprehensive (loss) income | (2,723 | ) | 1,771 | (4,527 | ) | (2,568 | ) | ||||||||
Comprehensive income | 91,571 | 26,319 | 121,734 | 36,701 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (4,453 | ) | (1,968 | ) | (7,324 | ) | (3,960 | ) | |||||||
Comprehensive income attributable to COPT | $ | 87,118 | $ | 24,351 | $ | 114,410 | $ | 32,741 |
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, 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 (117,149 shares) | — | 1 | 1,544 | — | — | (1,545 | ) | — | |||||||||||||||||||
Costs associated with common shares issued to the public | — | — | (7 | ) | — | — | — | (7 | ) | ||||||||||||||||||
Exercise of share options (57,888 shares) | — | — | 1,359 | — | — | — | 1,359 | ||||||||||||||||||||
Share-based compensation (142,182 shares issued, net of redemptions) | — | 2 | 5,247 | — | — | — | 5,249 | ||||||||||||||||||||
Redemption of vested equity awards | — | — | (1,389 | ) | — | — | — | (1,389 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (248 | ) | — | — | 248 | — | |||||||||||||||||||
Comprehensive income | — | — | — | 35,351 | (2,609 | ) | 2,313 | 35,055 | |||||||||||||||||||
Dividends | — | — | — | (84,692 | ) | — | — | (84,692 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (3,710 | ) | (3,710 | ) | ||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | — | — | — | 3 | 3 | ||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (1,606 | ) | (1,606 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (7 | ) | — | — | — | (7 | ) | ||||||||||||||||||
Balance at September 30, 2014 (87,711,731 common shares outstanding) | $ | 199,083 | $ | 877 | $ | 1,822,283 | $ | (692,978 | ) | $ | 871 | $ | 67,368 | $ | 1,397,504 | ||||||||||||
Balance at December 31, 2014 (93,255,284 common shares outstanding) | $ | 199,083 | $ | 933 | $ | 1,969,968 | $ | (717,264 | ) | $ | (1,297 | ) | $ | 69,461 | $ | 1,520,884 | |||||||||||
Conversion of common units to common shares (160,160 shares) | — | 2 | 2,149 | — | — | (2,151 | ) | — | |||||||||||||||||||
Common shares issued under at-the-market program (890,241 shares) | — | 9 | 26,526 | — | — | — | 26,535 | ||||||||||||||||||||
Exercise of share options (76,474 shares) | — | — | 2,008 | — | — | — | 2,008 | ||||||||||||||||||||
Share-based compensation (151,511 shares issued, net of redemptions) | — | 1 | 5,599 | — | — | — | 5,600 | ||||||||||||||||||||
Redemption of vested equity awards | — | — | (2,330 | ) | — | — | — | (2,330 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (591 | ) | — | — | 591 | — | |||||||||||||||||||
Comprehensive income | — | — | — | 118,936 | (4,526 | ) | 5,634 | 120,044 | |||||||||||||||||||
Dividends | — | — | — | (88,658 | ) | — | — | (88,658 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (3,530 | ) | (3,530 | ) | ||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (47 | ) | (47 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (599 | ) | — | — | — | (599 | ) | ||||||||||||||||||
Balance at September 30, 2015 (94,533,670 common shares outstanding) | $ | 199,083 | $ | 945 | $ | 2,002,730 | $ | (686,986 | ) | $ | (5,823 | ) | $ | 69,958 | $ | 1,579,907 |
For the Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 373,607 | $ | 358,212 | |||
Construction contract and other service revenues received | 104,817 | 62,170 | |||||
Property operating expenses paid | (146,274 | ) | (141,489 | ) | |||
Construction contract and other service expenses paid | (112,614 | ) | (58,218 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (29,620 | ) | (22,288 | ) | |||
Interest expense paid | (46,278 | ) | (54,683 | ) | |||
Payments in connection with early extinguishment of debt | (18 | ) | (104 | ) | |||
Interest and other income received | 4,130 | 448 | |||||
Income taxes (paid) refunded | (8 | ) | 200 | ||||
Net cash provided by operating activities | 147,742 | 144,248 | |||||
Cash flows from investing activities | |||||||
Acquisitions of operating properties and related intangible assets | (202,866 | ) | — | ||||
Construction, development and redevelopment | (174,434 | ) | (150,862 | ) | |||
Tenant improvements on operating properties | (18,129 | ) | (17,754 | ) | |||
Other capital improvements on operating properties | (12,610 | ) | (21,179 | ) | |||
Proceeds from dispositions of properties | 45,066 | 57,973 | |||||
Investing receivables funded | (22 | ) | (3,610 | ) | |||
Investing receivables payments received | 5,114 | 10,278 | |||||
Leasing costs paid | (8,603 | ) | (10,549 | ) | |||
Increase in prepaid expenses and other assets associated with investing activities | (4,348 | ) | (1,260 | ) | |||
Other | (457 | ) | (83 | ) | |||
Net cash used in investing activities | (371,289 | ) | (137,046 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 422,000 | 115,000 | |||||
Unsecured senior notes | 296,580 | 297,342 | |||||
Other debt proceeds | 50,000 | 11,569 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (418,000 | ) | (115,000 | ) | |||
Scheduled principal amortization | (5,011 | ) | (4,914 | ) | |||
Other debt repayments | (50,681 | ) | (183,059 | ) | |||
Deferred financing costs paid | (5,377 | ) | (694 | ) | |||
Net proceeds from issuance of common shares | 28,567 | 1,352 | |||||
Redemption of preferred shares | — | (50,000 | ) | ||||
Common share dividends paid | (77,641 | ) | (72,217 | ) | |||
Preferred share dividends paid | (10,657 | ) | (13,179 | ) | |||
Distributions paid to noncontrolling interests in COPLP | (3,581 | ) | (3,786 | ) | |||
Redemption of vested equity awards | (2,330 | ) | (1,389 | ) | |||
Other | (2,559 | ) | (2,582 | ) | |||
Net cash provided by (used in) financing activities | 221,310 | (21,557 | ) | ||||
Net decrease in cash and cash equivalents | (2,237 | ) | (14,355 | ) | |||
Cash and cash equivalents | |||||||
Beginning of period | 6,077 | 54,373 | |||||
End of period | $ | 3,840 | $ | 40,018 |
For the Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | 126,261 | $ | 39,269 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 105,397 | 106,619 | |||||
Impairment losses | 3,779 | 1,371 | |||||
Amortization of deferred financing costs | 3,339 | 3,646 | |||||
Increase in deferred rent receivable | (11,939 | ) | (2,738 | ) | |||
Amortization of net debt discounts | 805 | 659 | |||||
Gain on sales of real estate | (4,000 | ) | (10,654 | ) | |||
Share-based compensation | 4,949 | 4,563 | |||||
(Gain) loss on early extinguishment of debt | (86,075 | ) | 458 | ||||
Other | 1,922 | (2,446 | ) | ||||
Operating changes in assets and liabilities: | |||||||
Decrease in accounts receivable | 6,526 | 6,815 | |||||
Increase in restricted cash and marketable securities | (1,102 | ) | (2,591 | ) | |||
Increase in prepaid expenses and other assets, net | (5,228 | ) | (26,553 | ) | |||
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (655 | ) | 24,247 | ||||
Increase in rents received in advance and security deposits | 3,763 | 1,583 | |||||
Net cash provided by operating activities | $ | 147,742 | $ | 144,248 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Decrease in accrued capital improvements, leasing and other investing activity costs | $ | (11,722 | ) | $ | (174 | ) | |
Debt assumed on acquisition of operating property | $ | 55,490 | $ | — | |||
Other liabilities assumed on acquisition of operating properties | $ | 5,265 | $ | — | |||
Decrease in property in connection with surrender of property in settlement of debt | $ | (82,738 | ) | $ | — | ||
Decrease in debt in connection with surrender of property in settlement of debt | $ | (150,000 | ) | $ | — | ||
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | $ | (4,263 | ) | $ | (2,613 | ) | |
Equity in other comprehensive loss of an equity method investee | $ | (264 | ) | $ | — | ||
Dividends/distribution payable | $ | 30,182 | $ | 28,344 | |||
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | $ | 2,151 | $ | 1,545 | |||
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | $ | 591 | $ | 248 | |||
Increase in redeemable noncontrolling interest and decrease in equity to carry redeemable noncontrolling interest at fair value | $ | 599 | $ | 7 |
September 30, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,932,843 | $ | 2,751,488 | |||
Projects in development or held for future development | 414,757 | 545,426 | |||||
Total properties, net | 3,347,600 | 3,296,914 | |||||
Assets held for sale, net | 150,572 | 14,339 | |||||
Cash and cash equivalents | 3,840 | 6,077 | |||||
Restricted cash and marketable securities | 3,787 | 3,187 | |||||
Accounts receivable (net of allowance for doubtful accounts of $2,010 and $717, respectively) | 19,962 | 26,901 | |||||
Deferred rent receivable (net of allowance of $1,816 and $1,418, respectively) | 103,064 | 95,910 | |||||
Intangible assets on real estate acquisitions, net | 106,174 | 43,854 | |||||
Deferred leasing and financing costs, net | 64,367 | 64,797 | |||||
Investing receivables | 46,821 | 52,147 | |||||
Prepaid expenses and other assets, net | 66,787 | 60,249 | |||||
Total assets | $ | 3,912,974 | $ | 3,664,375 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,121,240 | $ | 1,920,057 | |||
Accounts payable and accrued expenses | 98,551 | 123,035 | |||||
Rents received in advance and security deposits | 34,504 | 31,011 | |||||
Distributions payable | 30,182 | 29,862 | |||||
Deferred revenue associated with operating leases | 20,113 | 13,031 | |||||
Interest rate derivatives | 5,844 | 1,855 | |||||
Other liabilities | 3,025 | 6,223 | |||||
Total liabilities | 2,313,459 | 2,125,074 | |||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interest | 19,608 | 18,417 | |||||
Equity: | |||||||
Corporate Office Properties, L.P.’s equity: | |||||||
Preferred units | |||||||
General partner, preferred units outstanding of 7,431,667 at September 30, 2015 and December 31, 2014 | 199,083 | 199,083 | |||||
Limited partner, 352,000 preferred units outstanding at September 30, 2015 and December 31, 2014 | 8,800 | 8,800 | |||||
Common units, 94,533,670 and 93,255,284 held by the general partner and 3,677,391 and 3,837,551 held by limited partners at September 30, 2015 and December 31, 2014, respectively | 1,367,904 | 1,305,219 | |||||
Accumulated other comprehensive loss | (6,086 | ) | (1,381 | ) | |||
Total Corporate Office Properties, L.P.’s equity | 1,569,701 | 1,511,721 | |||||
Noncontrolling interests in subsidiaries | 10,206 | 9,163 | |||||
Total equity | 1,579,907 | 1,520,884 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,912,974 | $ | 3,664,375 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 109,080 | $ | 96,207 | $ | 312,826 | $ | 288,574 | |||||||
Tenant recoveries and other real estate operations revenue | 24,606 | 22,069 | 71,761 | 70,538 | |||||||||||
Construction contract and other service revenues | 17,058 | 34,739 | 97,554 | 80,390 | |||||||||||
Total revenues | 150,744 | 153,015 | 482,141 | 439,502 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 48,897 | 43,056 | 145,996 | 136,600 | |||||||||||
Depreciation and amortization associated with real estate operations | 38,403 | 30,237 | 103,788 | 104,728 | |||||||||||
Construction contract and other service expenses | 16,132 | 33,593 | 94,923 | 75,353 | |||||||||||
Impairment losses | 2,307 | 66 | 3,545 | 1,368 | |||||||||||
General, administrative and leasing expenses | 7,439 | 7,211 | 22,864 | 22,882 | |||||||||||
Business development expenses and land carry costs | 5,573 | 1,430 | 10,986 | 4,107 | |||||||||||
Total operating expenses | 118,751 | 115,593 | 382,102 | 345,038 | |||||||||||
Operating income | 31,993 | 37,422 | 100,039 | 94,464 | |||||||||||
Interest expense | (24,121 | ) | (24,802 | ) | (66,727 | ) | (69,107 | ) | |||||||
Interest and other income | 692 | 1,191 | 3,217 | 3,775 | |||||||||||
Gain (loss) on early extinguishment of debt | 85,745 | (176 | ) | 85,677 | (446 | ) | |||||||||
Income from continuing operations before equity in income of unconsolidated entities and income taxes | 94,309 | 13,635 | 122,206 | 28,686 | |||||||||||
Equity in income of unconsolidated entities | 18 | 193 | 52 | 206 | |||||||||||
Income tax expense | (48 | ) | (101 | ) | (153 | ) | (257 | ) | |||||||
Income from continuing operations | 94,279 | 13,727 | 122,105 | 28,635 | |||||||||||
Discontinued operations | — | 191 | 156 | 4 | |||||||||||
Income before gain on sales of real estate | 94,279 | 13,918 | 122,261 | 28,639 | |||||||||||
Gain on sales of real estate | 15 | 10,630 | 4,000 | 10,630 | |||||||||||
Net income | 94,294 | 24,548 | 126,261 | 39,269 | |||||||||||
Net income attributable to noncontrolling interests in consolidated entities | (972 | ) | (897 | ) | (2,602 | ) | (2,471 | ) | |||||||
Net income attributable to COPLP | 93,322 | 23,651 | 123,659 | 36,798 | |||||||||||
Preferred unit distributions | (3,717 | ) | (3,718 | ) | (11,152 | ) | (12,882 | ) | |||||||
Issuance costs associated with redeemed preferred units | — | — | — | (1,769 | ) | ||||||||||
Net income attributable to COPLP common unitholders | $ | 89,605 | $ | 19,933 | $ | 112,507 | $ | 22,147 | |||||||
Net income attributable to COPLP: | |||||||||||||||
Income from continuing operations | $ | 93,322 | $ | 23,460 | $ | 123,500 | $ | 36,789 | |||||||
Discontinued operations, net | — | 191 | 159 | 9 | |||||||||||
Net income attributable to COPLP | $ | 93,322 | $ | 23,651 | $ | 123,659 | $ | 36,798 | |||||||
Basic earnings per common unit (1) | |||||||||||||||
Income from continuing operations | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to COPLP common unitholders | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Diluted earnings per common unit (1) | |||||||||||||||
Income from continuing operations | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to COPLP common unitholders | $ | 0.91 | $ | 0.22 | $ | 1.15 | $ | 0.24 | |||||||
Distributions declared per common unit | $ | 0.275 | $ | 0.275 | $ | 0.825 | $ | 0.825 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 94,294 | $ | 24,548 | $ | 126,261 | $ | 39,269 | |||||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized gains (losses) on interest rate derivatives | (3,638 | ) | 1,015 | (6,720 | ) | (4,738 | ) | ||||||||
Losses on interest rate derivatives included in interest expense | 915 | 756 | 2,457 | 2,170 | |||||||||||
Equity in other comprehensive loss of equity method investee | — | — | (264 | ) | — | ||||||||||
Other comprehensive (loss) income | (2,723 | ) | 1,771 | (4,527 | ) | (2,568 | ) | ||||||||
Comprehensive income | 91,571 | 26,319 | 121,734 | 36,701 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (1,035 | ) | (964 | ) | (2,780 | ) | (2,630 | ) | |||||||
Comprehensive income attributable to COPLP | $ | 90,536 | $ | 25,355 | $ | 118,954 | $ | 34,071 |
Limited Partner Preferred Units | General Partner Preferred Units | Common Units | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | ||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | Total Equity | ||||||||||||||||||||||||||
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 | — | — | — | — | 57,888 | 1,359 | — | — | 1,359 | |||||||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | 142,182 | 5,249 | — | — | 5,249 | |||||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | — | — | (1,389 | ) | — | — | (1,389 | ) | |||||||||||||||||||||
Comprehensive income | — | 495 | — | 12,387 | — | 23,916 | (2,726 | ) | 983 | 35,055 | ||||||||||||||||||||||
Distributions to owners of common and preferred units | — | (495 | ) | — | (12,387 | ) | — | (75,520 | ) | — | — | (88,402 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (1,606 | ) | (1,606 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | 3 | 3 | |||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (7 | ) | — | — | (7 | ) | |||||||||||||||||||||
Balance at September 30, 2014 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 91,572,282 | $ | 1,179,919 | $ | 879 | $ | 8,823 | $ | 1,397,504 | |||||||||||||||||
Balance at December 31, 2014 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 97,092,835 | $ | 1,305,219 | $ | (1,381 | ) | $ | 9,163 | $ | 1,520,884 | ||||||||||||||||
Issuance of common units resulting from common shares issued under at-the-market program | — | — | — | — | 890,241 | 26,535 | — | — | 26,535 | |||||||||||||||||||||||
Issuance of common units resulting from exercise of share options | — | — | — | — | 76,474 | 2,008 | — | — | 2,008 | |||||||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | 151,511 | 5,600 | — | — | 5,600 | |||||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | — | — | (2,330 | ) | — | — | (2,330 | ) | |||||||||||||||||||||
Comprehensive income | — | 495 | — | 10,657 | — | 112,507 | (4,705 | ) | 1,090 | 120,044 | ||||||||||||||||||||||
Distributions to owners of common and preferred units | — | (495 | ) | — | (10,657 | ) | — | (81,036 | ) | — | — | (92,188 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (47 | ) | (47 | ) | |||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (599 | ) | — | — | (599 | ) | |||||||||||||||||||||
Balance at September 30, 2015 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 98,211,061 | $ | 1,367,904 | $ | (6,086 | ) | $ | 10,206 | $ | 1,579,907 |
For the Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 373,607 | $ | 358,212 | |||
Construction contract and other service revenues received | 104,817 | 62,170 | |||||
Property operating expenses paid | (146,274 | ) | (141,489 | ) | |||
Construction contract and other service expenses paid | (112,614 | ) | (58,218 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (29,620 | ) | (22,288 | ) | |||
Interest expense paid | (46,278 | ) | (54,683 | ) | |||
Payments in connection with early extinguishment of debt | (18 | ) | (104 | ) | |||
Interest and other income received | 4,130 | 448 | |||||
Income taxes (paid) refunded | (8 | ) | 200 | ||||
Net cash provided by operating activities | 147,742 | 144,248 | |||||
Cash flows from investing activities | |||||||
Acquisitions of operating properties and related intangible assets | (202,866 | ) | — | ||||
Construction, development and redevelopment | (174,434 | ) | (150,862 | ) | |||
Tenant improvements on operating properties | (18,129 | ) | (17,754 | ) | |||
Other capital improvements on operating properties | (12,610 | ) | (21,179 | ) | |||
Proceeds from dispositions of properties | 45,066 | 57,973 | |||||
Investing receivables funded | (22 | ) | (3,610 | ) | |||
Investing receivables payments received | 5,114 | 10,278 | |||||
Leasing costs paid | (8,603 | ) | (10,549 | ) | |||
Increase in prepaid expenses and other assets associated with investing activities | (4,348 | ) | (1,260 | ) | |||
Other | (457 | ) | (83 | ) | |||
Net cash used in investing activities | (371,289 | ) | (137,046 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 422,000 | 115,000 | |||||
Unsecured senior notes | 296,580 | 297,342 | |||||
Other debt proceeds | 50,000 | 11,569 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (418,000 | ) | (115,000 | ) | |||
Scheduled principal amortization | (5,011 | ) | (4,914 | ) | |||
Other debt repayments | (50,681 | ) | (183,059 | ) | |||
Deferred financing costs paid | (5,377 | ) | (694 | ) | |||
Net proceeds from issuance of common units | 28,567 | 1,352 | |||||
Redemption of preferred units | — | (50,000 | ) | ||||
Common unit distributions paid | (80,727 | ) | (75,508 | ) | |||
Preferred unit distributions paid | (11,152 | ) | (13,674 | ) | |||
Redemption of vested equity awards | (2,330 | ) | (1,389 | ) | |||
Other | (2,559 | ) | (2,582 | ) | |||
Net cash provided by (used in) financing activities | 221,310 | (21,557 | ) | ||||
Net decrease in cash and cash equivalents | (2,237 | ) | (14,355 | ) | |||
Cash and cash equivalents | |||||||
Beginning of period | 6,077 | 54,373 | |||||
End of period | $ | 3,840 | $ | 40,018 |
For the Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | 126,261 | $ | 39,269 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 105,397 | 106,619 | |||||
Impairment losses | 3,779 | 1,371 | |||||
Amortization of deferred financing costs | 3,339 | 3,646 | |||||
Increase in deferred rent receivable | (11,939 | ) | (2,738 | ) | |||
Amortization of net debt discounts | 805 | 659 | |||||
Gain on sales of real estate | (4,000 | ) | (10,654 | ) | |||
Share-based compensation | 4,949 | 4,563 | |||||
(Gain) loss on early extinguishment of debt | (86,075 | ) | 458 | ||||
Other | 1,922 | (2,446 | ) | ||||
Operating changes in assets and liabilities: | |||||||
Decrease in accounts receivable | 6,526 | 6,815 | |||||
Increase in restricted cash and marketable securities | (1,485 | ) | (2,558 | ) | |||
Increase in prepaid expenses and other assets, net | (5,228 | ) | (26,553 | ) | |||
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (272 | ) | 24,214 | ||||
Increase in rents received in advance and security deposits | 3,763 | 1,583 | |||||
Net cash provided by operating activities | $ | 147,742 | $ | 144,248 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Decrease in accrued capital improvements, leasing and other investing activity costs | $ | (11,722 | ) | $ | (174 | ) | |
Debt assumed on acquisition of operating property | $ |