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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark one)
| | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | | | | |
For the quarterly period ended | September 30, 2020 |
or
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | | | | | | | | | | |
For the transition period from | | to | |
Commission file number 1-14023 (Corporate Office Properties Trust)
Commission file number 333-189188 (Corporate Office Properties, L.P.)
CORPORATE OFFICE PROPERTIES TRUST
CORPORATE OFFICE PROPERTIES, L.P.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
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) |
Registrant’s telephone number, including area code: (443) 285-5400
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Shares of beneficial interest, $0.01 par value | OFC | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Corporate Office Properties Trust ☒ Yes ☐ No
Corporate Office Properties, L.P. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Corporate Office Properties Trust ☒ Yes ☐ No
Corporate Office Properties, L.P. ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Corporate Office Properties Trust
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Large accelerated filer | ☒ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ |
Corporate Office Properties, L.P.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Corporate Office Properties Trust ☐
Corporate Office Properties, L.P. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Corporate Office Properties Trust ☐ Yes ☒ No
Corporate Office Properties, L.P. ☐ Yes ☒ No
As of October 23, 2020, 112,175,248 of Corporate Office Properties Trust’s Common Shares of Beneficial Interest, $0.01 par value, were issued and outstanding.
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2020 of Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”) and Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”). Unless stated otherwise or the context otherwise requires, “we,” “our,” and “us” refer collectively to COPT, COPLP and their subsidiaries.
COPT is a real estate investment trust, or REIT, and the sole general partner of COPLP. As of September 30, 2020, COPT owned 98.6% of the outstanding common units in COPLP; the remaining common units and all of the outstanding COPLP preferred units were owned by third parties. As the sole general partner of COPLP, COPT controls COPLP and can cause it to enter into major transactions including acquisitions, dispositions and refinancings and cause changes in its line of business, capital structure and distribution policies.
There are a few differences between the Company and the Operating Partnership which are reflected in this Form 10-Q. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how the two operate as an interrelated, consolidated company. COPT is a REIT whose only material asset is its ownership of partnership interests of COPLP. As a result, COPT does not conduct business itself, other than acting as the sole general partner of COPLP, issuing public equity and guaranteeing certain debt of COPLP. COPT itself is not directly obligated under any indebtedness but guarantees some of the debt of COPLP. COPLP owns substantially all of the assets of COPT either directly or through its subsidiaries, conducts almost all of the operations of the business and is structured as a limited partnership with no publicly traded equity. Except for net proceeds from public equity issuances by COPT, which are contributed to COPLP in exchange for partnership units, COPLP generates the capital required by COPT’s business.
Noncontrolling interests, shareholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of COPT and those of COPLP. The common limited partnership interests in COPLP not owned by COPT are accounted for as partners’ capital in COPLP’s consolidated financial statements and as noncontrolling interests in COPT’s consolidated financial statements. The only other significant differences between the consolidated financial statements of COPT and those of COPLP are assets in connection with a non-qualified elective deferred compensation plan and the corresponding liability to the plan’s participants that are held directly by COPT.
We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:
•combined reports better reflect how management, investors 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.
To help investors understand the differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:
•consolidated financial statements;
•the following notes to the consolidated financial statements:
•Note 3, Fair Value Measurements of COPT and subsidiaries and COPLP and subsidiaries;
•Note 8, Prepaid Expenses and Other Assets, Net 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.”
This report also includes separate sections under Part I, Item 4. Controls and Procedures and separate Exhibit 31 and Exhibit 32 certifications for each of COPT and COPLP to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that COPT and COPLP are compliant with Rule 13a-15 and Rule 15d-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.
TABLE OF CONTENTS
FORM 10-Q
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
Corporate Office Properties Trust and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
| | | | | | | | | | | |
| September 30, 2020 | | December 31, 2019 |
Assets | | | |
Properties, net: | | | |
Operating properties, net | $ | 2,999,892 | | | $ | 2,772,647 | |
Projects in development or held for future development | 587,046 | | | 568,239 | |
Total properties, net | 3,586,938 | | | 3,340,886 | |
Property - operating right-of-use assets | 36,442 | | | 27,864 | |
Property - finance right-of-use assets | 40,432 | | | 40,458 | |
| | | |
Cash and cash equivalents | 11,458 | | | 14,733 | |
Investment in unconsolidated real estate joint ventures | 49,662 | | | 51,949 | |
Accounts receivable, net | 36,151 | | | 35,444 | |
Deferred rent receivable | 92,853 | | | 87,736 | |
Intangible assets on real estate acquisitions, net | 22,433 | | | 27,392 | |
Deferred leasing costs (net of accumulated amortization of $31,927 and $33,782 respectively) | 59,392 | | | 58,392 | |
Investing receivables (net of allowance for credit losses of $4,040 at September 30, 2020) | 74,136 | | | 73,523 | |
| | | |
| | | |
Prepaid expenses and other assets, net | 110,292 | | | 96,076 | |
Total assets | $ | 4,120,189 | | | $ | 3,854,453 | |
Liabilities and equity | | | |
Liabilities: | | | |
Debt, net | $ | 2,181,551 | | | $ | 1,831,139 | |
Accounts payable and accrued expenses | 140,921 | | | 148,746 | |
Rents received in advance and security deposits | 30,276 | | | 33,620 | |
Dividends and distributions payable | 31,307 | | | 31,263 | |
Deferred revenue associated with operating leases | 8,579 | | | 7,361 | |
Property - operating lease liabilities | 26,382 | | | 17,317 | |
| | | |
Interest rate derivatives | 10,977 | | | 25,682 | |
Other liabilities | 17,038 | | | 10,649 | |
Total liabilities | 2,447,031 | | | 2,105,777 | |
Commitments and contingencies (Note 17) | | | |
Redeemable noncontrolling interests | 23,522 | | | 29,431 | |
Equity: | | | |
Corporate Office Properties Trust’s shareholders’ equity: | | | |
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,175,688 at September 30, 2020 and 112,068,705 at December 31, 2019) | 1,122 | | | 1,121 | |
Additional paid-in capital | 2,479,321 | | | 2,481,558 | |
Cumulative distributions in excess of net income | (860,647) | | | (778,275) | |
Accumulated other comprehensive loss | (10,548) | | | (25,444) | |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,609,248 | | | 1,678,960 | |
Noncontrolling interests in subsidiaries: | | | |
Common units in COPLP | 19,522 | | | 19,597 | |
Preferred units in COPLP | 8,800 | | | 8,800 | |
Other consolidated entities | 12,066 | | | 11,888 | |
Noncontrolling interests in subsidiaries | 40,388 | | | 40,285 | |
Total equity | 1,649,636 | | | 1,719,245 | |
Total liabilities, redeemable noncontrolling interests and equity | $ | 4,120,189 | | | $ | 3,854,453 | |
See accompanying notes to consolidated financial statements.
Corporate Office Properties Trust and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended September 30, | | For the Nine Months Ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
Revenues | | | | | | | |
Lease revenue | $ | 133,875 | | | $ | 129,461 | | | $ | 397,034 | | | $ | 391,779 | |
Other property revenue | 568 | | | 1,273 | | | 2,063 | | | 3,716 | |
Construction contract and other service revenues | 20,323 | | | 28,697 | | | 46,240 | | | 87,946 | |
Total revenues | 154,766 | | | 159,431 | | | 445,337 | | | 483,441 | |
Operating expenses | | | | | | | |
Property operating expenses | 51,552 | | | 49,714 | | | 151,755 | | | 147,045 | |
Depreciation and amortization associated with real estate operations | 35,332 | | | 34,692 | | | 101,540 | | | 104,290 | |
Construction contract and other service expenses | 19,220 | | | 27,802 | | | 44,052 | | | 85,130 | |
Impairment losses | 1,530 | | | 327 | | | 1,530 | | | 327 | |
General, administrative and leasing expenses | 7,467 | | | 7,929 | | | 23,111 | | | 26,066 | |
Business development expenses and land carry costs | 1,094 | | | 964 | | | 3,474 | | | 2,947 | |
Total operating expenses | 116,195 | | | 121,428 | | | 325,462 | | | 365,805 | |
Interest expense | (17,152) | | | (17,126) | | | (50,789) | | | (54,275) | |
Interest and other income | 1,746 | | | 1,842 | | | 5,233 | | | 5,977 | |
Credit loss recoveries | 1,465 | | | — | | | 161 | | | — | |
Gain on sales of real estate | — | | | — | | | 5 | | | 84,469 | |
Loss on early extinguishment of debt | (3,237) | | | — | | | (3,237) | | | — | |
Loss on interest rate derivatives | (53,196) | | | — | | | (53,196) | | | — | |
(Loss) income before equity in income of unconsolidated entities and income taxes | (31,803) | | | 22,719 | | | 18,052 | | | 153,807 | |
Equity in income of unconsolidated entities | 477 | | | 396 | | | 1,372 | | | 1,207 | |
Income tax (expense) benefit | (16) | | | 131 | | | (95) | | | 113 | |
Net (loss) income | (31,342) | | | 23,246 | | | 19,329 | | | 155,127 | |
Net loss (income) attributable to noncontrolling interests: | | | | | | | |
Common units in COPLP | 386 | | | (267) | | | (185) | | | (1,863) | |
Preferred units in COPLP | (77) | | | (157) | | | (231) | | | (487) | |
Other consolidated entities | (812) | | | (1,565) | | | (3,207) | | | (3,870) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net (loss) income attributable to COPT common shareholders | $ | (31,845) | | | $ | 21,257 | | | $ | 15,706 | | | $ | 148,907 | |
| | | | | | | |
Earnings per common share: (1) | | | | | | | |
Net (loss) income attributable to COPT common shareholders - basic | $ | (0.29) | | | $ | 0.19 | | | $ | 0.14 | | | $ | 1.34 | |
Net (loss) income attributable to COPT common shareholders - diluted | $ | (0.29) | | | $ | 0.19 | | | $ | 0.14 | | | $ | 1.33 | |
(1) Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust.
See accompanying notes to consolidated financial statements.
Corporate Office Properties Trust and Subsidiaries
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Three Months Ended September 30, | | For the Nine Months Ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
Net (loss) income | $ | (31,342) | | | $ | 23,246 | | | $ | 19,329 | | | $ | 155,127 | |
Other comprehensive income (loss): | | | | | | | |
Unrealized income (loss) on interest rate derivatives | 1,428 | | | (11,047) | | | (39,592) | | | (33,437) | |
Reclassification adjustments on interest rate derivatives recognized in interest expense | 1,342 | | | (307) | | | 2,408 | | | (1,434) | |
Reclassification adjustments on interest rate derivatives recognized in loss on interest rate derivatives | 51,865 | | | — | | | 51,865 | | | — | |
| | | | | | | |
Total other comprehensive income (loss) | 54,635 | | | (11,354) | | | 14,681 | | | (34,871) | |
Comprehensive income | 23,293 | | | 11,892 | | | 34,010 | | | 120,256 | |
Comprehensive income attributable to noncontrolling interests | (1,173) | | | (1,750) | | | (3,408) | | | (5,691) | |
Comprehensive income attributable to COPT | $ | 22,120 | | | $ | 10,142 | | | $ | 30,602 | | | $ | 114,565 | |
See accompanying notes to consolidated financial statements.
Corporate Office Properties Trust and Subsidiaries
Consolidated Statements of Equity
(Dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Shares | | Additional Paid-in Capital | | Cumulative Distributions in Excess of Net Income | | Accumulated Other Comprehensive Loss | | Noncontrolling Interests | | Total |
For the Three Months Ended September 30, 2019 | | | | | | | | | | | | |
Balance at June 30, 2019 (111,949,887 common shares outstanding) | | $ | 1,119 | | | $ | 2,475,293 | | | $ | (780,667) | | | $ | (23,465) | | | $ | 46,831 | | | $ | 1,719,111 | |
Conversion of common units to common shares (97,539 shares) | | 1 | | | 1,475 | | | — | | | — | | | (1,476) | | | — | |
Redemption of common units | | — | | | — | | | — | | | — | | | (24) | | | (24) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation (11,749 shares issued, net of redemptions) | | 1 | | | 1,525 | | | — | | | — | | | 369 | | | 1,895 | |
Redemption of vested equity awards | | — | | | (53) | | | — | | | — | | | — | | | (53) | |
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | | — | | | 312 | | | — | | | — | | | (312) | | | — | |
Comprehensive income | | — | | | — | | | 21,257 | | | (11,115) | | | 565 | | | 10,707 | |
Dividends | | — | | | — | | | (30,825) | | | — | | | — | | | (30,825) | |
Distributions to owners of common and preferred units in COPLP | | — | | | — | | | — | | | — | | | (517) | | | (517) | |
| | | | | | | | | | | | |
Distributions to noncontrolling interests in other consolidated entities | | — | | | — | | | — | | | — | | | (5,878) | | | (5,878) | |
Adjustment to arrive at fair value of redeemable noncontrolling interests | | — | | | 1,531 | | | — | | | — | | | — | | | 1,531 | |
| | | | | | | | | | | | |
Balance at September 30, 2019 (112,059,175 common shares outstanding) | | $ | 1,121 | | | $ | 2,480,083 | | | $ | (790,235) | | | $ | (34,580) | | | $ | 39,558 | | | $ | 1,695,947 | |
| | | | | | | | | | | | |
For the Three Months Ended September 30, 2020 | | | | | | | | | | | | |
Balance at June 30, 2020 (112,183,192 common shares outstanding) | | $ | 1,122 | | | $ | 2,477,977 | | | $ | (797,959) | | | $ | (64,513) | | | $ | 40,297 | | | $ | 1,656,924 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation (7,504 shares redeemed, net of issuances) | | — | | | 1,223 | | | — | | | — | | | 561 | | | 1,784 | |
Redemption of vested equity awards | | — | | | (57) | | | — | | | — | | | — | | | (57) | |
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | | — | | | 552 | | | — | | | — | | | (552) | | | — | |
Comprehensive income | | — | | | — | | | (31,845) | | | 53,965 | | | 533 | | | 22,653 | |
Dividends | | — | | | — | | | (30,843) | | | — | | | — | | | (30,843) | |
Distributions to owners of common and preferred units in COPLP | | — | | | — | | | — | | | — | | | (444) | | | (444) | |
| | | | | | | | | | | | |
Distributions to noncontrolling interests in other consolidated entities | | — | | | — | | | — | | | — | | | (7) | | | (7) | |
Adjustment to arrive at fair value of redeemable noncontrolling interests | | — | | | (374) | | | — | | | — | | | — | | | (374) | |
| | | | | | | | | | | | |
Balance at September 30, 2020 (112,175,688 common shares outstanding) | | $ | 1,122 | | | $ | 2,479,321 | | | $ | (860,647) | | | $ | (10,548) | | | $ | 40,388 | | | $ | 1,649,636 | |
See accompanying notes to consolidated financial statements.
Corporate Office Properties Trust and Subsidiaries
Consolidated Statements of Equity (continued)
(Dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Common Shares | | Additional Paid-in Capital | | Cumulative Distributions in Excess of Net Income | | Accumulated Other Comprehensive Loss | | Noncontrolling Interests | | Total |
For the Nine Months Ended September 30, 2019 | | | | | | | | | | | | | |
Balance at December 31, 2018 (110,241,868 common shares outstanding) | | | $ | 1,102 | | | $ | 2,431,355 | | | $ | (846,808) | | | $ | (238) | | | $ | 41,637 | | | $ | 1,627,048 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Conversion of common units to common shares (103,039 shares) | | | 1 | | | 1,555 | | | — | | | — | | | (1,556) | | | — | |
Redemption of common units | | | — | | | — | | | — | | | — | | | (25) | | | (25) | |
Common shares issued under forward equity sale agreements (1,614,087 shares) | | | 16 | | | 46,438 | | | — | | | — | | | — | | | 46,454 | |
| | | | | | | | | | | | | |
Share-based compensation (100,181 shares issued, net of redemptions) | | | 2 | | | 4,574 | | | — | | | — | | | 954 | | | 5,530 | |
Redemption of vested equity awards | | | — | | | (1,973) | | | — | | | — | | | — | | | (1,973) | |
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | | | — | | | (522) | | | — | | | — | | | 522 | | | — | |
Comprehensive income | | | — | | | — | | | 148,907 | | | (34,342) | | | 2,962 | | | 117,527 | |
Dividends | | | — | | | — | | | (92,334) | | | — | | | — | | | (92,334) | |
Distributions to owners of common and preferred units in COPLP | | | — | | | — | | | — | | | — | | | (1,620) | | | (1,620) | |
Contributions from noncontrolling interests in other consolidated entities | | | — | | | — | | | — | | | — | | | 2,570 | | | 2,570 | |
Distributions to noncontrolling interests in other consolidated entities | | | — | | | — | | | — | | | — | | | (5,886) | | | (5,886) | |
Adjustment to arrive at fair value of redeemable noncontrolling interests | | | — | | | (1,344) | | | — | | | — | | | — | | | (1,344) | |
| | | | | | | | | | | | | |
Balance at September 30, 2019 (112,059,175 common shares outstanding) | | | $ | 1,121 | | | $ | 2,480,083 | | | $ | (790,235) | | | $ | (34,580) | | | $ | 39,558 | | | $ | 1,695,947 | |
| | | | | | | | | | | | | |
For the Nine Months Ended September 30, 2020 | | | | | | | | | | | | | |
Balance at December 31, 2019 (112,068,705 common shares outstanding) | | | $ | 1,121 | | | $ | 2,481,558 | | | $ | (778,275) | | | $ | (25,444) | | | $ | 40,285 | | | $ | 1,719,245 | |
Cumulative effect of accounting change for adoption of credit loss guidance | | | — | | | — | | | (5,541) | | | — | | | — | | | (5,541) | |
Balance at December 31, 2019, as adjusted | | | 1,121 | | | 2,481,558 | | | (783,816) | | | (25,444) | | | 40,285 | | | 1,713,704 | |
Conversion of common units to common shares (12,009 shares) | | | — | | | 182 | | | — | | | — | | | (182) | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Share-based compensation (94,974 shares issued, net of redemptions) | | | 1 | | | 3,394 | | | — | | | — | | | 1,335 | | | 4,730 | |
Redemption of vested equity awards | | | — | | | (1,629) | | | — | | | — | | | — | | | (1,629) | |
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | | | — | | | 527 | | | — | | | — | | | (527) | | | — | |
Comprehensive income | | | — | | | — | | | 15,706 | | | 14,896 | | | 693 | | | 31,295 | |
Dividends | | | — | | | — | | | (92,537) | | | — | | | — | | | (92,537) | |
Distributions to owners of common and preferred units in COPLP | | | — | | | — | | | — | | | — | | | (1,306) | | | (1,306) | |
Contributions from noncontrolling interests in other consolidated entities | | | — | | | — | | | — | | | — | | | 112 | | | 112 | |
Distributions to noncontrolling interests in other consolidated entities | | | — | | | — | | | — | | | — | | | (22) | | | (22) | |
Adjustment to arrive at fair value of redeemable noncontrolling interests | | | — | | | (4,711) | | | — | | | — | | | — | | | (4,711) | |
| | | | | | | | | | | | | |
Balance at September 30, 2020 (112,175,688 common shares outstanding) | | | $ | 1,122 | | | $ | 2,479,321 | | | $ | (860,647) | | | $ | (10,548) | | | $ | 40,388 | | | $ | 1,649,636 | |
Corporate Office Properties Trust and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| | | | | | | | | | | |
| For the Nine Months Ended September 30, |
| 2020 | | 2019 |
Cash flows from operating activities | | | |
Revenues from real estate operations received | $ | 394,094 | | | $ | 391,758 | |
Construction contract and other service revenues received | 53,911 | | | 65,813 | |
Property operating expenses paid | (159,007) | | | (151,478) | |
Construction contract and other service expenses paid | (45,686) | | | (68,599) | |
General, administrative, leasing, business development and land carry costs paid | (24,408) | | | (23,806) | |
Interest expense paid | (49,693) | | | (52,818) | |
Lease incentives paid | (12,634) | | | (6,366) | |
| | | |
| | | |
| | | |
| | | |
Other | 2,464 | | | 2,533 | |
Net cash provided by operating activities | 159,041 | | | 157,037 | |
Cash flows from investing activities | | | |
Development and redevelopment of properties | (284,416) | | | (308,997) | |
| | | |
Tenant improvements on operating properties | (23,377) | | | (16,466) | |
Other capital improvements on operating properties | (24,797) | | | (14,497) | |
Proceeds from property dispositions | | | |
Distribution from unconsolidated real estate joint venture following contribution of properties | — | | | 129,783 | |
Sale of properties | — | | | 107,440 | |
Distributions from unconsolidated real estate joint ventures | 2,287 | | | 16,937 | |
Investing receivables funded | (258) | | | (11,169) | |
Leasing costs paid | (12,455) | | | (13,502) | |
| | | |
| | | |
Settlement of interest rate derivatives | (53,130) | | | — | |
Other | (63) | | | 1,558 | |
Net cash used in investing activities | (396,209) | | | (108,913) | |
Cash flows from financing activities | | | |
Proceeds from debt | | | |
Revolving Credit Facility | 409,000 | | | 349,000 | |
Unsecured senior notes | 395,264 | | | — | |
Other debt proceeds | 199,088 | | | 32,002 | |
Repayments of debt | | | |
Revolving Credit Facility | (529,000) | | | (342,000) | |
Unsecured senior notes | (122,948) | | | — | |
Scheduled principal amortization | (3,077) | | | (3,300) | |
| | | |
Deferred financing costs paid | (2,161) | | | (405) | |
| | | |
Net proceeds from issuance of common shares | — | | | 46,415 | |
| | | |
Common share dividends paid | (92,512) | | | (91,835) | |
| | | |
Distributions paid to noncontrolling interests in COPLP | (1,303) | | | (1,661) | |
Distributions paid to noncontrolling interests in other consolidated entities | (15) | | | (5,882) | |
Distributions paid to redeemable noncontrolling interests | (13,515) | | | (984) | |
Redemption of vested equity awards | (1,629) | | | (1,973) | |
Payments in connection with early extinguishment of debt | (3,037) | | | — | |
Other | (442) | | | (1,944) | |
Net cash provided by (used in) financing activities | 233,713 | | | (22,567) | |
Net (decrease) increase in cash and cash equivalents and restricted cash | ( |