ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended | June 30, 2016 |
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 14, 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 | ||
June 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,782,330 | $ | 2,920,529 | |||
Projects in development or held for future development | 387,397 | 429,219 | |||||
Total properties, net | 3,169,727 | 3,349,748 | |||||
Assets held for sale, net | 300,584 | 96,782 | |||||
Cash and cash equivalents | 13,317 | 60,310 | |||||
Restricted cash and marketable securities | 8,302 | 7,716 | |||||
Accounts receivable (net of allowance for doubtful accounts of $745 and $1,525, respectively) | 32,505 | 29,167 | |||||
Deferred rent receivable (net of allowance of $422 and $1,962, respectively) | 92,316 | 105,484 | |||||
Intangible assets on real estate acquisitions, net | 88,788 | 98,338 | |||||
Deferred leasing costs (net of accumulated amortization of $63,768 and $66,364, respectively) | 42,632 | 53,868 | |||||
Investing receivables | 50,162 | 47,875 | |||||
Prepaid expenses and other assets, net | 43,359 | 60,024 | |||||
Total assets | $ | 3,841,692 | $ | 3,909,312 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,094,486 | $ | 2,077,752 | |||
Accounts payable and accrued expenses | 92,848 | 91,755 | |||||
Rents received in advance and security deposits | 32,035 | 37,148 | |||||
Dividends and distributions payable | 30,219 | 30,178 | |||||
Deferred revenue associated with operating leases | 17,560 | 19,758 | |||||
Interest rate derivatives | 20,245 | 3,160 | |||||
Other liabilities | 31,123 | 13,779 | |||||
Total liabilities | 2,318,516 | 2,273,530 | |||||
Commitments and contingencies (Note 15) | |||||||
Redeemable noncontrolling interests | 22,473 | 19,218 | |||||
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, shares issued and outstanding of 7,431,667 at June 30, 2016 and December 31, 2015) | 199,083 | 199,083 | |||||
Common Shares of beneficial interest ($0.01 par value; 125,000,000 shares authorized, shares issued and outstanding of 94,699,359 at June 30, 2016 and 94,531,512 at December 31, 2015) | 947 | 945 | |||||
Additional paid-in capital | 2,007,328 | 2,004,507 | |||||
Cumulative distributions in excess of net income | (756,940 | ) | (657,172 | ) | |||
Accumulated other comprehensive loss | (17,712 | ) | (2,838 | ) | |||
Total Corporate Office Properties Trust’s shareholders’ equity | 1,432,706 | 1,544,525 | |||||
Noncontrolling interests in subsidiaries: | |||||||
Common units in COPLP | 47,550 | 52,359 | |||||
Preferred units in COPLP | 8,800 | 8,800 | |||||
Other consolidated entities | 11,647 | 10,880 | |||||
Noncontrolling interests in subsidiaries | 67,997 | 72,039 | |||||
Total equity | 1,500,703 | 1,616,564 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,841,692 | $ | 3,909,312 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 107,524 | $ | 105,508 | $ | 212,906 | $ | 203,746 | |||||||
Tenant recoveries and other real estate operations revenue | 26,400 | 22,683 | 54,105 | 47,155 | |||||||||||
Construction contract and other service revenues | 12,003 | 42,172 | 23,223 | 80,496 | |||||||||||
Total revenues | 145,927 | 170,363 | 290,234 | 331,397 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 48,141 | 46,418 | 100,016 | 97,099 | |||||||||||
Depreciation and amortization associated with real estate operations | 33,248 | 33,786 | 67,775 | 65,385 | |||||||||||
Construction contract and other service expenses | 11,478 | 41,293 | 22,172 | 78,791 | |||||||||||
Impairment losses | 69,692 | 1,238 | 72,138 | 1,238 | |||||||||||
General, administrative and leasing expenses | 8,026 | 7,534 | 19,909 | 15,425 | |||||||||||
Business development expenses and land carry costs | 2,363 | 2,623 | 4,781 | 5,413 | |||||||||||
Total operating expenses | 172,948 | 132,892 | 286,791 | 263,351 | |||||||||||
Operating (loss) income | (27,021 | ) | 37,471 | 3,443 | 68,046 | ||||||||||
Interest expense | (22,639 | ) | (21,768 | ) | (46,198 | ) | (42,606 | ) | |||||||
Interest and other income | 1,330 | 1,242 | 2,486 | 2,525 | |||||||||||
Gain (loss) on early extinguishment of debt | 5 | (65 | ) | 22 | (68 | ) | |||||||||
(Loss) income from continuing operations before equity in income of unconsolidated entities and income taxes | (48,325 | ) | 16,880 | (40,247 | ) | 27,897 | |||||||||
Equity in income of unconsolidated entities | 10 | 9 | 20 | 34 | |||||||||||
Income tax (expense) benefit | (1 | ) | (50 | ) | 7 | (105 | ) | ||||||||
(Loss) income from continuing operations | (48,316 | ) | 16,839 | (40,220 | ) | 27,826 | |||||||||
Discontinued operations | — | 394 | — | 156 | |||||||||||
(Loss) income before gain on sales of real estate | (48,316 | ) | 17,233 | (40,220 | ) | 27,982 | |||||||||
Gain on sales of real estate | — | (1 | ) | — | 3,985 | ||||||||||
Net (loss) income | (48,316 | ) | 17,232 | (40,220 | ) | 31,967 | |||||||||
Net loss (income) attributable to noncontrolling interests: | |||||||||||||||
Common units in COPLP | 1,976 | (476 | ) | 1,849 | (874 | ) | |||||||||
Preferred units in COPLP | (165 | ) | (165 | ) | (330 | ) | (330 | ) | |||||||
Other consolidated entities | (914 | ) | (810 | ) | (1,892 | ) | (1,627 | ) | |||||||
Net (loss) income attributable to COPT | (47,419 | ) | 15,781 | (40,593 | ) | 29,136 | |||||||||
Preferred share dividends | (3,553 | ) | (3,553 | ) | (7,105 | ) | (7,105 | ) | |||||||
Net (loss) income attributable to COPT common shareholders | $ | (50,972 | ) | $ | 12,228 | $ | (47,698 | ) | $ | 22,031 | |||||
Net (loss) income attributable to COPT: | |||||||||||||||
(Loss) income from continuing operations | $ | (47,419 | ) | $ | 15,402 | $ | (40,593 | ) | $ | 28,983 | |||||
Discontinued operations, net | — | 379 | — | 153 | |||||||||||
Net (loss) income attributable to COPT | $ | (47,419 | ) | $ | 15,781 | $ | (40,593 | ) | $ | 29,136 | |||||
Basic earnings per common share (1) | |||||||||||||||
(Loss) income from continuing operations | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Diluted earnings per common share (1) | |||||||||||||||
(Loss) income from continuing operations | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
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, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net (loss) income | $ | (48,316 | ) | $ | 17,232 | $ | (40,220 | ) | $ | 31,967 | |||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized (loss) gain on interest rate derivatives | (5,704 | ) | 392 | (16,988 | ) | (3,082 | ) | ||||||||
Losses on interest rate derivatives included in interest expense | 850 | 769 | 1,720 | 1,542 | |||||||||||
Equity in other comprehensive loss of equity method investee | (184 | ) | (264 | ) | (184 | ) | (264 | ) | |||||||
Other comprehensive (loss) income | (5,038 | ) | 897 | (15,452 | ) | (1,804 | ) | ||||||||
Comprehensive (loss) income | (53,354 | ) | 18,129 | (55,672 | ) | 30,163 | |||||||||
Comprehensive loss (income) attributable to noncontrolling interests | 1,085 | (1,542 | ) | 205 | (2,871 | ) | |||||||||
Comprehensive (loss) income attributable to COPT | $ | (52,269 | ) | $ | 16,587 | $ | (55,467 | ) | $ | 27,292 |
Preferred Shares | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||||||||||
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 (158,000 shares) | — | 2 | 2,120 | — | — | (2,122 | ) | — | |||||||||||||||||||
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 (149,619 shares issued, net of redemptions) | — | 2 | 3,656 | — | — | — | 3,658 | ||||||||||||||||||||
Redemption of vested equity awards | — | — | (2,245 | ) | — | — | — | (2,245 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (519 | ) | — | — | 519 | — | |||||||||||||||||||
Comprehensive income | — | — | — | 29,136 | (1,844 | ) | 1,728 | 29,020 | |||||||||||||||||||
Dividends | — | — | — | (59,106 | ) | — | — | (59,106 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (2,354 | ) | (2,354 | ) | ||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (28 | ) | (28 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (739 | ) | — | — | — | (739 | ) | ||||||||||||||||||
Balance at June 30, 2015 (94,529,618 common shares outstanding) | $ | 199,083 | $ | 946 | $ | 2,000,775 | $ | (747,234 | ) | $ | (3,141 | ) | $ | 67,204 | $ | 1,517,633 | |||||||||||
Balance at December 31, 2015 (94,531,512 common shares outstanding) | $ | 199,083 | $ | 945 | $ | 2,004,507 | $ | (657,172 | ) | $ | (2,838 | ) | $ | 72,039 | $ | 1,616,564 | |||||||||||
Conversion of common units to common shares (26,758 shares) | — | — | 371 | — | — | (371 | ) | — | |||||||||||||||||||
Costs associated with common shares issued to the public | — | — | (5 | ) | — | — | — | (5 | ) | ||||||||||||||||||
Share-based compensation (141,089 shares issued, net of redemptions) | — | 2 | 4,301 | — | — | — | 4,303 | ||||||||||||||||||||
Redemption of vested equity awards | — | — | (1,492 | ) | — | — | — | (1,492 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | (5 | ) | — | — | 5 | — | |||||||||||||||||||
Comprehensive loss | — | — | — | (40,593 | ) | (14,874 | ) | (1,322 | ) | (56,789 | ) | ||||||||||||||||
Dividends | — | — | — | (59,175 | ) | — | — | (59,175 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | — | (2,346 | ) | (2,346 | ) | ||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | (349 | ) | — | — | — | (349 | ) | ||||||||||||||||||
Balance at June 30, 2016 (94,699,359 common shares outstanding) | $ | 199,083 | $ | 947 | $ | 2,007,328 | $ | (756,940 | ) | $ | (17,712 | ) | $ | 67,997 | $ | 1,500,703 |
For the Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 260,984 | $ | 240,538 | |||
Construction contract and other service revenues received | 34,992 | 86,790 | |||||
Property operating expenses paid | (87,005 | ) | (79,667 | ) | |||
Construction contract and other service expenses paid | (24,303 | ) | (76,355 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (19,212 | ) | (20,121 | ) | |||
Interest expense paid | (41,179 | ) | (32,375 | ) | |||
Interest and other income received | 128 | 4,055 | |||||
Other | (5 | ) | (26 | ) | |||
Net cash provided by operating activities | 124,400 | 122,839 | |||||
Cash flows from investing activities | |||||||
Construction, development and redevelopment | (75,339 | ) | (117,498 | ) | |||
Acquisitions of operating properties and related intangible assets | — | (137,125 | ) | ||||
Tenant improvements on operating properties | (14,862 | ) | (10,314 | ) | |||
Other capital improvements on operating properties | (16,007 | ) | (8,372 | ) | |||
Proceeds from dispositions of properties | 5,448 | 17,424 | |||||
Investing receivables payments received | — | 5,114 | |||||
Leasing costs paid | (3,434 | ) | (6,732 | ) | |||
Other | (13 | ) | (3,538 | ) | |||
Net cash used in investing activities | (104,207 | ) | (261,041 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 133,500 | 294,000 | |||||
Unsecured senior notes | — | 296,580 | |||||
Other debt proceeds | 45,000 | 50,000 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (119,000 | ) | (377,000 | ) | |||
Scheduled principal amortization | (3,532 | ) | (3,319 | ) | |||
Other debt repayments | (40,498 | ) | (50,630 | ) | |||
Deferred financing costs paid | (528 | ) | (4,693 | ) | |||
Net proceeds from issuance of common shares | (5 | ) | 28,567 | ||||
Common share dividends paid | (52,021 | ) | (51,642 | ) | |||
Preferred share dividends paid | (7,105 | ) | (7,105 | ) | |||
Distributions paid to noncontrolling interests in COPLP | (2,362 | ) | (2,461 | ) | |||
Distributions paid to redeemable noncontrolling interests | (14,306 | ) | — | ||||
Redemption of vested equity awards | (1,492 | ) | (2,245 | ) | |||
Other | (4,837 | ) | (853 | ) | |||
Net cash (used in) provided by financing activities | (67,186 | ) | 169,199 | ||||
Net (decrease) increase in cash and cash equivalents | (46,993 | ) | 30,997 | ||||
Cash and cash equivalents | |||||||
Beginning of period | 60,310 | 6,077 | |||||
End of period | $ | 13,317 | $ | 37,074 |
For the Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Reconciliation of net (loss) income to net cash provided by operating activities: | |||||||
Net (loss) income | $ | (40,220 | ) | $ | 31,967 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 68,901 | 66,404 | |||||
Impairment losses | 72,138 | 1,472 | |||||
Losses on interest rate derivatives | 1,870 | — | |||||
Amortization of deferred financing costs and net debt discounts | 2,998 | 2,618 | |||||
Increase in deferred rent receivable | (1,276 | ) | (5,956 | ) | |||
Gain on sales of real estate | — | (3,985 | ) | ||||
Share-based compensation | 3,839 | 3,210 | |||||
Other | (1,725 | ) | 1,754 | ||||
Operating changes in assets and liabilities: | |||||||
(Increase) decrease in accounts receivable | (3,320 | ) | 10,655 | ||||
Increase in restricted cash and marketable securities | (389 | ) | (735 | ) | |||
Decrease in prepaid expenses and other assets, net | 11,303 | 6,518 | |||||
Increase in accounts payable, accrued expenses and other liabilities | 15,394 | 12,557 | |||||
Decrease in rents received in advance and security deposits | (5,113 | ) | (3,640 | ) | |||
Net cash provided by operating activities | $ | 124,400 | $ | 122,839 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Increase in accrued capital improvements, leasing and other investing activity costs | $ | 1,604 | $ | 15,927 | |||
Increase in property and redeemable noncontrolling interests in connection with property contributed in a joint venture | $ | 22,600 | $ | — | |||
Decrease in redeemable noncontrolling interests and increase in other liabilities in connection with distribution payable to redeemable noncontrolling interest | $ | 6,675 | $ | — | |||
Other liabilities assumed on acquisition of operating properties | $ | — | $ | 5,265 | |||
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | $ | (15,268 | ) | $ | (1,540 | ) | |
Equity in other comprehensive loss of an equity method investee | $ | (184 | ) | $ | (264 | ) | |
Dividends/distribution payable | $ | 30,219 | $ | 30,178 | |||
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | $ | 371 | $ | 2,122 | |||
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | $ | 5 | $ | 519 | |||
Increase in redeemable noncontrolling interest and decrease in equity to carry redeemable noncontrolling interest at fair value | $ | 349 | $ | 739 |
June 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,782,330 | $ | 2,920,529 | |||
Projects in development or held for future development | 387,397 | 429,219 | |||||
Total properties, net | 3,169,727 | 3,349,748 | |||||
Assets held for sale, net | 300,584 | 96,782 | |||||
Cash and cash equivalents | 13,317 | 60,310 | |||||
Restricted cash and marketable securities | 3,256 | 1,953 | |||||
Accounts receivable (net of allowance for doubtful accounts of $745 and $1,525, respectively) | 32,505 | 29,167 | |||||
Deferred rent receivable (net of allowance of $422 and $1,962, respectively) | 92,316 | 105,484 | |||||
Intangible assets on real estate acquisitions, net | 88,788 | 98,338 | |||||
Deferred leasing costs (net of accumulated amortization of $63,768 and $66,364, respectively) | 42,632 | 53,868 | |||||
Investing receivables | 50,162 | 47,875 | |||||
Prepaid expenses and other assets, net | 43,359 | 60,024 | |||||
Total assets | $ | 3,836,646 | $ | 3,903,549 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,094,486 | $ | 2,077,752 | |||
Accounts payable and accrued expenses | 92,848 | 91,755 | |||||
Rents received in advance and security deposits | 32,035 | 37,148 | |||||
Distributions payable | 30,219 | 30,178 | |||||
Deferred revenue associated with operating leases | 17,560 | 19,758 | |||||
Interest rate derivatives | 20,245 | 3,160 | |||||
Other liabilities | 26,077 | 8,016 | |||||
Total liabilities | 2,313,470 | 2,267,767 | |||||
Commitments and contingencies (Note 15) | |||||||
Redeemable noncontrolling interests | 22,473 | 19,218 | |||||
Equity: | |||||||
Corporate Office Properties, L.P.’s equity: | |||||||
Preferred units | |||||||
General partner, preferred units outstanding of 7,431,667 at June 30, 2016 and December 31, 2015 | 199,083 | 199,083 | |||||
Limited partner, 352,000 preferred units outstanding at June 30, 2016 and December 31, 2015 | 8,800 | 8,800 | |||||
Common units, 94,699,359 and 94,531,512 held by the general partner and 3,650,633 and 3,677,391 held by limited partners at June 30, 2016 and December 31, 2015, respectively | 1,299,571 | 1,400,745 | |||||
Accumulated other comprehensive loss | (18,437 | ) | (2,985 | ) | |||
Total Corporate Office Properties, L.P.’s equity | 1,489,017 | 1,605,643 | |||||
Noncontrolling interests in subsidiaries | 11,686 | 10,921 | |||||
Total equity | 1,500,703 | 1,616,564 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,836,646 | $ | 3,903,549 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 107,524 | $ | 105,508 | $ | 212,906 | $ | 203,746 | |||||||
Tenant recoveries and other real estate operations revenue | 26,400 | 22,683 | 54,105 | 47,155 | |||||||||||
Construction contract and other service revenues | 12,003 | 42,172 | 23,223 | 80,496 | |||||||||||
Total revenues | 145,927 | 170,363 | 290,234 | 331,397 | |||||||||||
Expenses | |||||||||||||||
Property operating expenses | 48,141 | 46,418 | 100,016 | 97,099 | |||||||||||
Depreciation and amortization associated with real estate operations | 33,248 | 33,786 | 67,775 | 65,385 | |||||||||||
Construction contract and other service expenses | 11,478 | 41,293 | 22,172 | 78,791 | |||||||||||
Impairment losses | 69,692 | 1,238 | 72,138 | 1,238 | |||||||||||
General, administrative and leasing expenses | 8,026 | 7,534 | 19,909 | 15,425 | |||||||||||
Business development expenses and land carry costs | 2,363 | 2,623 | 4,781 | 5,413 | |||||||||||
Total operating expenses | 172,948 | 132,892 | 286,791 | 263,351 | |||||||||||
Operating (loss) income | (27,021 | ) | 37,471 | 3,443 | 68,046 | ||||||||||
Interest expense | (22,639 | ) | (21,768 | ) | (46,198 | ) | (42,606 | ) | |||||||
Interest and other income | 1,330 | 1,242 | 2,486 | 2,525 | |||||||||||
Gain (loss) on early extinguishment of debt | 5 | (65 | ) | 22 | (68 | ) | |||||||||
(Loss) income from continuing operations before equity in income of unconsolidated entities and income taxes | (48,325 | ) | 16,880 | (40,247 | ) | 27,897 | |||||||||
Equity in income of unconsolidated entities | 10 | 9 | 20 | 34 | |||||||||||
Income tax (expense) benefit | (1 | ) | (50 | ) | 7 | (105 | ) | ||||||||
(Loss) income from continuing operations | (48,316 | ) | 16,839 | (40,220 | ) | 27,826 | |||||||||
Discontinued operations | — | 394 | — | 156 | |||||||||||
(Loss) income before gain on sales of real estate | (48,316 | ) | 17,233 | (40,220 | ) | 27,982 | |||||||||
Gain on sales of real estate | — | (1 | ) | — | 3,985 | ||||||||||
Net (loss) income | (48,316 | ) | 17,232 | (40,220 | ) | 31,967 | |||||||||
Net income attributable to noncontrolling interests in consolidated entities | (911 | ) | (812 | ) | (1,890 | ) | (1,630 | ) | |||||||
Net (loss) income attributable to COPLP | (49,227 | ) | 16,420 | (42,110 | ) | 30,337 | |||||||||
Preferred unit distributions | (3,718 | ) | (3,718 | ) | (7,435 | ) | (7,435 | ) | |||||||
Net (loss) income attributable to COPLP common unitholders | $ | (52,945 | ) | $ | 12,702 | $ | (49,545 | ) | $ | 22,902 | |||||
Net (loss) income attributable to COPLP: | |||||||||||||||
(Loss) income from continuing operations | $ | (49,227 | ) | $ | 16,026 | $ | (42,110 | ) | $ | 30,178 | |||||
Discontinued operations, net | — | 394 | — | 159 | |||||||||||
Net (loss) income attributable to COPLP | $ | (49,227 | ) | $ | 16,420 | $ | (42,110 | ) | $ | 30,337 | |||||
Basic earnings per common unit (1) | |||||||||||||||
(Loss) income from continuing operations | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net (loss) income attributable to COPLP common unitholders | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Diluted earnings per common unit (1) | |||||||||||||||
(Loss) income from continuing operations | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net (loss) income attributable to COPLP common unitholders | $ | (0.54 | ) | $ | 0.13 | $ | (0.51 | ) | $ | 0.23 | |||||
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, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net (loss) income | $ | (48,316 | ) | $ | 17,232 | $ | (40,220 | ) | $ | 31,967 | |||||
Other comprehensive (loss) income | |||||||||||||||
Unrealized (loss) gain on interest rate derivatives | (5,704 | ) | 392 | (16,988 | ) | (3,082 | ) | ||||||||
Losses on interest rate derivatives included in interest expense | 850 | 769 | 1,720 | 1,542 | |||||||||||
Equity in other comprehensive loss of equity method investee | (184 | ) | (264 | ) | (184 | ) | (264 | ) | |||||||
Other comprehensive (loss) income | (5,038 | ) | 897 | (15,452 | ) | (1,804 | ) | ||||||||
Comprehensive (loss) income | (53,354 | ) | 18,129 | (55,672 | ) | 30,163 | |||||||||
Comprehensive income attributable to noncontrolling interests | (911 | ) | (872 | ) | (1,890 | ) | (1,745 | ) | |||||||
Comprehensive (loss) income attributable to COPLP | $ | (54,265 | ) | $ | 17,257 | $ | (57,562 | ) | $ | 28,418 |
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, 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) | — | — | — | — | 149,619 | 3,658 | — | — | 3,658 | |||||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | — | — | (2,245 | ) | — | — | (2,245 | ) | |||||||||||||||||||||
Comprehensive income | — | 330 | — | 7,105 | — | 22,902 | (1,919 | ) | 602 | 29,020 | ||||||||||||||||||||||
Distributions to owners of common and preferred units | — | (330 | ) | — | (7,105 | ) | — | (54,025 | ) | — | — | (61,460 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (28 | ) | (28 | ) | |||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (739 | ) | — | — | (739 | ) | |||||||||||||||||||||
Balance at June 30, 2015 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 98,209,169 | $ | 1,303,313 | $ | (3,300 | ) | $ | 9,737 | $ | 1,517,633 | ||||||||||||||||
Balance at December 31, 2015 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 98,208,903 | $ | 1,400,745 | $ | (2,985 | ) | $ | 10,921 | $ | 1,616,564 | ||||||||||||||||
Costs associated with common shares issued to the public | — | — | — | — | — | (5 | ) | — | — | (5 | ) | |||||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | 141,089 | 4,303 | — | — | 4,303 | |||||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | — | — | (1,492 | ) | — | — | (1,492 | ) | |||||||||||||||||||||
Comprehensive loss | — | 330 | — | 7,105 | — | (49,545 | ) | (15,452 | ) | 773 | (56,789 | ) | ||||||||||||||||||||
Distributions to owners of common and preferred units | — | (330 | ) | — | (7,105 | ) | — | (54,086 | ) | — | — | (61,521 | ) | |||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | — | — | (8 | ) | (8 | ) | |||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | — | — | — | — | — | (349 | ) | — | — | (349 | ) | |||||||||||||||||||||
Balance at June 30, 2016 | 352,000 | $ | 8,800 | 7,431,667 | $ | 199,083 | 98,349,992 | $ | 1,299,571 | $ | (18,437 | ) | $ | 11,686 | $ | 1,500,703 |
For the Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 260,984 | $ | 240,538 | |||
Construction contract and other service revenues received | 34,992 | 86,790 | |||||
Property operating expenses paid | (87,005 | ) | (79,667 | ) | |||
Construction contract and other service expenses paid | (24,303 | ) | (76,355 | ) | |||
General, administrative, leasing, business development and land carry costs paid | (19,212 | ) | (20,121 | ) | |||
Interest expense paid | (41,179 | ) | (32,375 | ) | |||
Interest and other income received | 128 | 4,055 | |||||
Other | (5 | ) | (26 | ) | |||
Net cash provided by operating activities | 124,400 | 122,839 | |||||
Cash flows from investing activities | |||||||
Construction, development and redevelopment | (75,339 | ) | (117,498 | ) | |||
Acquisitions of operating properties and related intangible assets | — | (137,125 | ) | ||||
Tenant improvements on operating properties | (14,862 | ) | (10,314 | ) | |||
Other capital improvements on operating properties | (16,007 | ) | (8,372 | ) | |||
Proceeds from dispositions of properties | 5,448 | 17,424 | |||||
Investing receivables payments received | — | 5,114 | |||||
Leasing costs paid | (3,434 | ) | (6,732 | ) | |||
Other | (13 | ) | (3,538 | ) | |||
Net cash used in investing activities | (104,207 | ) | (261,041 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 133,500 | 294,000 | |||||
Unsecured senior notes | — | 296,580 | |||||
Other debt proceeds | 45,000 | 50,000 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (119,000 | ) | (377,000 | ) | |||
Scheduled principal amortization | (3,532 | ) | (3,319 | ) | |||
Other debt repayments | (40,498 | ) | (50,630 | ) | |||
Deferred financing costs paid | (528 | ) | (4,693 | ) | |||
Net proceeds from issuance of common units | (5 | ) | 28,567 | ||||
Common unit distributions paid | (54,053 | ) | (53,773 | ) | |||
Preferred unit distributions paid | (7,435 | ) | (7,435 | ) | |||
Redemption of vested equity awards | (1,492 | ) | (2,245 | ) | |||
Distributions paid to redeemable noncontrolling interests | (14,306 | ) | — | ||||
Other | (4,837 | ) | (853 | ) | |||
Net cash (used in) provided by financing activities | (67,186 | ) | 169,199 | ||||
Net (decrease) increase in cash and cash equivalents | (46,993 | ) | 30,997 | ||||
Cash and cash equivalents | |||||||
Beginning of period | 60,310 | 6,077 | |||||
End of period | $ | 13,317 | $ | 37,074 |
For the Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Reconciliation of net (loss) income to net cash provided by operating activities: | |||||||
Net (loss) income | $ | (40,220 | ) | $ | 31,967 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 68,901 | 66,404 | |||||
Impairment losses | 72,138 | 1,472 | |||||
Losses on interest rate derivatives | 1,870 | — | |||||
Amortization of deferred financing costs and net debt discounts | 2,998 | 2,618 | |||||
Increase in deferred rent receivable | (1,276 | ) | (5,956 | ) | |||
Gain on sales of real estate | — | (3,985 | ) | ||||
Share-based compensation | 3,839 | 3,210 | |||||
Other | (1,725 | ) | 1,754 | ||||
Operating changes in assets and liabilities: | |||||||
(Increase) decrease in accounts receivable | (3,320 | ) | 10,655 | ||||
Increase in restricted cash and marketable securities | (1,106 | ) | (744 | ) | |||
Decrease in prepaid expenses and other assets, net | 11,303 | 6,518 | |||||
Increase in accounts payable, accrued expenses and other liabilities | 16,111 | 12,566 | |||||
Decrease in rents received in advance and security deposits | (5,113 | ) | (3,640 | ) | |||
Net cash provided by operating activities | $ | 124,400 | $ | 122,839 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Increase in accrued capital improvements, leasing and other investing activity costs | $ | 1,604 | $ | 15,927 | |||
Increase in property and redeemable noncontrolling interests in connection with property contributed in a joint venture | $ | 22,600 | $ | — | |||
Decrease in redeemable noncontrolling interests and increase in other liabilities in connection with distribution payable to redeemable noncontrolling interest | $ | 6,675 | $ | — | |||
Other liabilities assumed on acquisition of operating properties | $ | — | $ | 5,265 | |||
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | $ | (15,268 | ) | $ | (1,540 | ) | |
Equity in other comprehensive loss of an equity method investee | $ | (184 | ) | $ | (264 | ) | |
Distributions payable | $ | 30,219 | $ | 30,178 | |||
Increase in redeemable noncontrolling interest and decrease in equity to carry redeemable noncontrolling interest at fair value | $ | 349 | $ | 739 |
• | 181 operating office properties totaling 18.4 million square feet, including 11 triple-net leased, single-tenant data center properties; |
• | 12 office properties under, or contractually committed for, construction or redevelopment that we estimate will total approximately 1.5 million square feet upon completion, including two partially operational properties |
• | 1,379 acres of land we control that we believe could be developed into approximately 16.7 million square feet; and |
• | a wholesale data center with a critical load of 19.25 megawatts. |
Description | Quoted Prices in Active Markets for Identical Assets(Level 1) | Significant Other Observable Inputs(Level 2) | Significant Unobservable Inputs(Level 3) | Total | ||||||||||||
Assets: |