Exhibit 99.1

 

Supplemental Information

(Unaudited)

 

September 30, 2005

 

 

 

Corporate Office Properties Trust

Index to Supplemental Information (Unaudited)

September 30, 2005

 

	Page
Highlights and Discussion
Reporting Period Highlights – Third Quarter 2005	1
Forward-Looking Statements	4
Financial Statements
Quarterly Selected Financial Summary Data	5
Quarterly Consolidated Balance Sheets	6
Quarterly Consolidated Statements of Operations	7
Quarterly Consolidated Reconciliations of Funds From Operations (FFO), Adjusted Funds From Operations (AFFO) and Earnings per diluted share, as adjusted	8
Quarterly Consolidated Reconciliations of Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA), Combined Net Operating Income (NOI), Discontinued Operations and Gain on Sales of Real Estate	9
Selected Financial Analyses
Quarterly Equity Analysis	10
Quarterly Debt Analysis	11
Quarterly Operating Ratios	12
Quarterly Dividend Analysis	13
Investor Composition and Analyst Coverage	14
Debt Maturity Schedule – September 30, 2005	15
Portfolio Summary
Property Summary by Region – September 30, 2005 – Wholly Owned Properties	16
Property Summary by Region – September 30, 2005 – Joint Venture Properties	20
Property Occupancy Rates by Region by Quarter – Wholly Owned Properties	21
Property Occupancy Rates by Region by Quarter – Joint Venture Properties	22
Top Twenty Office Tenants of Wholly Owned Properties as of September 30, 2005	23
Combined Real Estate Revenue and Combined Net Operating Income by Geographic Region by Quarter	24
Same Office Property Cash and GAAP Net Operating Income by Quarter	25
Average Occupancy Rates by Region for Same Office Properties	26
Office Lease Expiration Analysis by Year for Wholly Owned Properties	27
Office Renewal Analysis as of September 30, 2005	28
Year to Date Acquisition Summary as of September 30, 2005	29
Year to Date Disposition Summary as of September 30, 2005	30
Development Summary as of September 30, 2005	31
Year to Date Development Placed into Service as of September 30, 2005	32
Land Inventory as of September 30, 2005	33
Joint Venture Summary as of September 30, 2005	34
Reconciliations of Non GAAP Measurements	35

 

 

To Members of the Investment Community:

 

We prepared this supplemental information package to provide you with additional detail on our properties and operations.  The information in this package is unaudited, furnished to the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our quarterly and annual reports.  If you have any questions or comments, please contact Ms. Mary Ellen Fowler, Vice President, Finance and Investor Relations at (410) 992-7324 or maryellen.fowler@copt.com.  Reconciliations between GAAP and non-GAAP measurements have been provided on page 35.  Refer to our Form 8-K for definitions of certain terms used herein.

 

Reporting Period Highlights – Third Quarter 2005

 

Financial Results

 

•                  Reported Net Income Available to Common Shareholders of $6,936,000 or $.18 per diluted share for the third quarter of 2005 as compared to $4,153,000 or $.12 per diluted share for the comparable 2004 period, representing an increase of 50.0% per share.  Excluding the $1.8 million writeoff of issuance costs associated with the redemption of our Series B preferred shares, our third quarter 2004 net income available to common shareholders would have been $.17 per diluted share.

•                  Reported FFO – diluted of $22,127,000 or $.47 per share/unit for the third quarter of 2005 as compared to $17,368,000 or $.39 per share/unit for the comparable 2004 period, representing an increase of 20.5% per share/unit.  Excluding the $1.8 million writeoff of issuance costs associated with the redemption of our Series B preferred shares, our third quarter 2004 FFO – diluted would have been $.43 per diluted share.

•                  Reported AFFO – diluted of $15,892,000 for the third quarter of 2005 as compared to $11,759,000 for the comparable 2004 period, representing an increase of 35.1%.

•                  Our FFO payout ratio was 60.6% for the third quarter of 2005 as compared to 65.9% for the comparable 2004 period.  Our AFFO payout ratio was 84.4% for the third quarter of 2005 as compared to 97.3% for the comparable 2004 period.

 

Financing Activity and Capital Transactions

 

•                  On July 11, 2005, we closed a $36.0 million bridge loan, bearing interest based upon a pricing grid that was initially priced at LIBOR plus 1.25%.  Upon its maturity on October 11, 2005, we repaid this loan.

•                  On September 8, 2005, we closed on a $19.5 million credit facility to fund the construction of 6711 Columbia Gateway Drive in Columbia, Maryland and have borrowed $7.1 million as of September 30, 2005.

•                  Increased our quarterly dividend 9.8% from $.255 to $.280 per share.

•                  On September 28, 2005, we issued 2,300,000 common shares, generating proceeds of $75.3 million before expenses, or $32.76 per share.  The proceeds were used to pay down our unsecured revolving credit facility.

•                  As of September 30, 2005, our debt to market capitalization was 37.6% and our debt to undepreciated book value of real estate assets was 58.3%.  We achieved an EBITDA interest coverage ratio of 3.17x and an EBITDA fixed charge coverage ratio of 2.51x for this quarter.

 

1

 

Acquisitions 

 

•                  On July 8, 2005, we paid $7.6 million in cash and issued 89,879 common units valued at $2.4 million in exchange for 59 acres of land held for development and a 50,000 square foot build-to-suit opportunity located on 5 acres.  The 59 acre land parcel can support up to 650,000 square feet of development and the build-to-suit opportunity is 100% leased. This purchase marks our entry into the East submarket of Colorado Springs, Colorado, which supports Peterson Air Force Base.

•                  On July 27, 2005, we acquired a building containing 26,500 rentable square feet on 5 acres and an adjacent 4 acre land parcel located in Columbia, Maryland for $3.8 million.

•                  On September 19, 2005, we paid $26.0 million to acquire five office buildings containing 188,819 rentable square feet, located in Columbia, Maryland.

•                  On September 28, 2005, we paid $14.7 million to acquire an office building containing 102,717 rentable square feet, located in Colorado Springs, Colorado.  We also purchased the adjacent office building containing 33,190 rentable square feet for $3.3 million.  We simultaneously purchased a 50% undivided interest in a 132 acre land parcel, subject to a co-tenancy agreement.  This $10.65 million land purchase was funded with $2.5 million in cash, a $6.7 million seller note, and a $1.5 million bond assumption.  The $6.7 million seller note bears interest at prime rate plus 2.5% and requires $1.34 million in principal payments each September until maturity in September 2010.  The $1.5 million of Colorado Springs Stout Allen Public Building Authority Bonds Series 1998 bear interest at a fixed rate of 7.0%, require periodic principal payments and mature in December 2018.

•                  On September 30, 2005, we purchased an office building containing 67,500 rentable square feet located in Colorado Springs, Colorado for $9.0 million.  We assumed a $5.0 million mortgage loan, which bears interest at a fixed rate of 5.59% and matures in March 2034, unless prepaid without penalty during a three month prepayment period ending in March 2014.

 

Dispositions

 

•                  On August 31, 2005, we sold a development office building containing approximately 33,235 rentable square feet, located in Columbia, Maryland, for $4.8 million.  We recognized a gain of $80,000.

•                  On September 8, 2005, we sold three office properties containing 152,731 rentable square feet located in three neighboring towns of Cranbury, Monroe Township and Monmouth Junction, New Jersey for $22.5 million.  We recognized a gain of $4.3 million in our net income available to common shareholders.

•                  On September 29, 2005, we sold an 80% ownership interest in our entire Harrisburg, Pennsylvania portfolio of sixteen properties containing 671,759 rentable square feet with a total valuation of $73.0 million.  We retained a 20% interest in the limited partnership that now owns the properties.  The limited partnership simultaneously closed two ten year mortgage loans totaling $66.6 million.  These loans require interest only payments at a blended fixed interest rate of 5.82%.

 

Development

 

•                  Executed a ten year lease for 61,038 square feet with Applied Signal Technology, Inc. at our development property located at 306 Sentinel Drive (known as 306 NBP).

 

2

 

•                  During this quarter, we placed into service the entire 103,683 square feet of 2691 Technology Drive (known as 191 NBP).  This property is 100% leased to Northrop Grumman Corporation for a seven year term.

•                  Executed a ten year lease for 53,057 square feet at our development property located at 6711 Columbia Gateway Drive.  This lease is for our new corporate headquarters.

 

Operations

 

•                  Our wholly owned portfolio was 94.6% occupied and 95.8% leased as of September 30, 2005.  Our entire portfolio was 93.8% occupied and 95.0% leased as of September 30, 2005.

•                  Our same property cash NOI increased by 9.0% or $2.8 million as compared to the quarter ended September 30, 2004.  The primary driver of the increase in cash NOI for our same office portfolio as compared to third quarter of 2004, among other effects, was higher rental revenues of $2.5 million.  This increase was primarily due to improved occupancy and higher rental rates in our Baltimore Washington Corridor and Northern Virginia regions. Our same property portfolio consists of 111 properties and represents 84.4% of our total square feet owned as of September 30, 2005.

•                  Weighted average lease term of our wholly owned portfolio is 4.9 years as of September 30, 2005, with an average contractual rental rate (including tenant reimbursements of operating costs) of $20.72 per square foot.

•                  We renewed 165,311 square feet, or 64.8%, of our expiring office leases (based upon square footage) with an average committed cost of $9.22 per square foot during the third quarter.  For our renewed and retenanted space of approximately 453,716 square feet, we realized a decrease in total rent of (14.3%), as measured from the GAAP straight-line rent in effect preceding the renewal date and a decrease of (22.5%) in total cash rent.  We incurred an average committed cost of $9.04 per square foot for our renewed and retenanted space in the third quarter.

•                  Executed a long-term lease for 171,200 rentable square feet at 431 Ridge Road and 30,000 rentable square feet at 437 Ridge Road with a large credit worthy tenant.

 

Subsequent Events

 

•                  On October 1, 2005, we placed into service the 125,681 square foot development property at 318 Sentinel Drive (known as 318 NBP).  This building is 100% leased to a large credit worthy tenant.

•                  On October 1, 2005, we placed into service the 468,994 square foot office complex known as 8611 Military Drive in San Antonio, Texas.  The complex consists of two connected buildings that are 100% leased to a large credit worthy tenant.

•                  On October 13, 2005, we executed a lease for 32,286 rentable square feet at 306 Sentinel Drive (known as 306 NBP) for a ten year lease term.

•                  On October 17, 2005, we closed a $103.0 million, ten year secured loan, requiring interest only payments at a fixed interest rate of 5.53%.  In connection with this permanent loan, we terminated our $73.4 million forward swap and remitted $603,000.

•                  On October 21, 2005, we purchased an office building containing 117,803 rentable square feet, on a 21 acre land parcel, located in Frederick, Maryland for $17.0 million.  We leased 58% of this building to Farmers & Mechanics Bank for a ten year term.  The land parcel can support future development of two office buildings containing approximately 80,000 square feet.

•                  On October 24, 2005, we executed a long term lease for 46,748 rentable square feet at 15 Gude Drive, located in Rockville, Maryland.

 

3

 

Forward-Looking Statements

 

This supplemental information contains “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on our current expectations, estimates and projections about future events and financial trends affecting us.  Forward-looking statements can be identified by the use of words such as “may”, “will”, “should”, “expect”, “estimate” or other comparable terminology.  Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate.  Accordingly, we can give no assurance that these expectations, estimates and projections will be achieved.  Future events and actual results may differ materially from those discussed in the forward-looking statements.

 

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

 

•                  our ability to borrow on favorable terms;

•                  general economic and business conditions, which will, among other things, affect office property demand and rents, tenant creditworthiness, interest rates and financing availability;

•                  adverse changes in the real estate markets including, among other things, increased competition with other companies;

•                  risk of real estate acquisition and development, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;

•                  risks of investing through joint venture structures, including risks that our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives;

•                  our ability to satisfy and operate effectively under federal income tax rules relating to real estate investment trusts and partnerships;

•                  governmental actions and initiatives; and

•                  environmental requirements.

 

We undertake no obligation to update or supplement any forward-looking statements.  For further information, please refer to our filings with the Securities and Exchange Commission, particularly the section entitled “Risk Factors” in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2004.

 

4

 

Quarterly Selected Financial Summary Data

(Dollars in thousands)

 

		2005									2004
		September 30			June 30			March 31			December 31			September 30
Revenues from Real Estate Operations		$	62,996		$	60,186		$	59,705		$	57,776		$	52,276
Total Revenues		92,780			78,650			76,802			65,491			59,742
Combined Net Operating Income		44,338			43,133			41,709			41,444			36,900
EBITDA		45,918			40,463			39,366			38,439			34,713
Net Income		10,589			10,589			9,040			9,446			9,750
Preferred Share dividends		(3,653		)	(3,654		)	(3,654		)	(3,654		)	(3,784		)
Issuance costs associated with redeemed preferred shares		—			—			—			—			(1,813		)
Net Income Available to Common Shareholders		$	6,936		$	6,936		$	5,386		$	5,792		$	4,153
Earnings per diluted share		$	0.18		$	0.18		$	0.14		$	0.15		$	0.12
Earnings per diluted share, as adjusted for issuance costs associated with redeemed preferred shares		$	0.18		$	0.18		$	0.14		$	0.15		$	0.17
Funds From Operations (FFO) - Diluted		$	22,127		$	21,834		$	21,143		$	20,879		$	17,368
FFO per diluted share		$	0.47		$	0.47		$	0.45		$	0.45		$	0.39
FFO per diluted share, as adjusted for issuance costs associated with redeemed preferred shares		$	0.47		$	0.47		$	0.45		$	0.45		$	0.43
Adjusted FFO - Diluted		$	15,892		$	16,981		$	14,756		$	13,164		$	11,759
Payout Ratios:
Earnings Payout		158.1		%	171.6		%	173.4		%	160.4		%	222.4		%
FFO - Diluted		60.6		%	53.1		%	54.5		%	55.4		%	65.9		%
AFFO - Diluted		84.4		%	68.2		%	78.1		%	87.9		%	97.3		%
Total Dividends/Distributions		$	17,236		$	15,405		$	15,337		$	15,286		$	15,235

 

Note:  The above presentation does not separately report discontinued operations.

 

5

 

Quarterly Consolidated Balance Sheets

(Dollars in thousands except per share data)

 

		2005									2004
		September 30			June 30			March 31			December 31			September 30
Assets
Investment in real estate:
Land - operational		$	268,583		$	274,531		$	268,307		$	268,327		$	260,197
Land - development		127,085			108,320			97,085			74,190			75,925
Construction in progress		147,184			138,337			109,345			61,962			49,453
Buildings and improvements		1,315,969			1,333,526			1,294,457			1,280,537			1,231,518
Investment in and advances to unconsolidated real estate joint ventures		1,208			1,233			1,209			1,201			1,094
Less: accumulated depreciation		(163,424		)	(165,101		)	(153,127		)	(141,716		)	(131,018		)
Net investment in real estate		1,696,605			1,690,846			1,617,276			1,544,501			1,487,169
Cash and cash equivalents		17,348			21,486			6,212			13,821			6,812
Restricted cash		15,083			15,982			13,830			12,617			10,760
Accounts receivable, net		12,537			13,613			17,529			16,771			10,209
Investment in and advances to other unconsolidated entities		1,621			1,621			1,621			1,621			1,621
Deferred rent receivable		30,222			29,291			27,890			26,282			23,383
Deferred charges, net		31,420			28,662			27,168			27,642			26,407
Intangible assets on real estate acquisitions, net		67,686			66,354			64,965			67,560			67,083
Prepaid and other assets		25,465			19,501			19,658			18,646			14,703
Furniture, fixtures and equipment, net		3,709			3,092			2,771			2,565			2,579
Total assets		$	1,901,696		$	1,890,448		$	1,798,920		$	1,732,026		$	1,650,726
Liabilities and shareholders’ equity
Liabilities:
Mortgage and other loans payable		$	1,124,299		$	1,177,779		$	1,091,688		$	1,022,688		$	947,332
Accounts payable and accrued expenses		38,795			53,984			46,400			46,307			41,168
Rents received in advance and security deposits		14,191			13,421			13,298			12,781			11,519
Deferred revenue associated with acquired operating leases		8,045			8,092			6,612			7,247			7,670
Distributions in excess of investment in unconsolidated real estate joint venture		2,519			—			—			—			—
Dividends and distributions payable		16,665			14,834			14,766			14,713			14,533
Fair value of derivatives		1,516			4,188			—			—			45
Other liabilities		4,619			4,024			7,661			7,488			7,115
Total liabilities		1,210,649			1,276,322			1,180,425			1,111,224			1,029,382
Minority interests:
Preferred units in the Operating Partnership		8,800			8,800			8,800			8,800			8,800
Common units in the Operating Partnership		98,433			87,439			87,539			88,355			90,029
Other consolidated real estate joint ventures		1,297			861			1,699			1,723			1,594
Total minority interests		108,530			97,100			98,038			98,878			100,423
Commitments and contingencies		—			—			—			—			—
Shareholders’ equity:
Preferred Shares ($0.01 par value; 15,000,000 authorized)		67			67			67			67			67
Common Shares of beneficial interest ($0.01 par value; 75,000,000 authorized, 39,558,398 shares issued as of September 30, 2005)		396			372			370			368			367
Additional paid-in capital		654,024			586,567			582,805			578,228			573,766
Cumulative distributions in excess of net income		(63,256		)	(59,226		)	(55,312		)	(51,358		)	(47,862		)
Value of unearned restricted common share grants		(7,318		)	(7,396		)	(7,473		)	(5,381		)	(5,381		)
Accumulated other comprehensive income/(loss)		(1,396		)	(3,358		)	—			—			(36		)
Total shareholders’ equity		582,517			517,026			520,457			521,924			520,921
Total shareholders’ equity and minority interests		691,047			614,126			618,495			620,802			621,344
Total liabilities and shareholders’ equity		$	1,901,696		$	1,890,448		$	1,798,920		$	1,732,026		$	1,650,726

 

6

 

Quarterly Consolidated Statements of Operations

(Dollars and units in thousands)

 

		2005									2004
		September 30			June 30			March 31			December 31			September 30
Revenues
Rental revenue		$	54,978		$	53,601		$	52,430		$	51,902		$	46,781
Tenant recoveries and other real estate operations revenue		8,018			6,585			7,275			5,874			5,495
Construction contract revenues		28,476			17,445			15,728			6,882			6,766
Other service operations revenues		1,308			1,019			1,369			833			700
Total Revenues		92,780			78,650			76,802			65,491			59,742
Expenses
Property operating		19,032			17,574			18,565			16,876			15,789
Depreciation and amortization associated with real estate operations		18,004			15,068			14,387			13,668			11,619
Construction contract expenses		28,073			17,223			14,897			6,453			6,483
Other service operations expenses		1,253			955			1,291			823			495
General and administrative expenses		3,318			3,166			3,276			3,467			2,698
Total Operating Expenses		69,680			53,986			52,416			41,287			37,084
Operating Income		23,100			24,664			24,386			24,204			22,658
Interest expense		(14,370		)	(13,728		)	(13,183		)	(12,483		)	(10,668		)
Amortization of deferred financing costs		(641		)	(471		)	(396		)	(495		)	(577		)
Income from continuing operations before gain/(loss) on sales of real estate, income taxes and minority interests		8,089			10,465			10,807			11,226			11,413
Gain/(loss) on sales of real estate, excluding discontinued operations		105			210			24			24			24
Income tax (expense)		(294		)	(213		)	(457		)	(420		)	(145		)
Income from continuing operations before minority interests		7,900			10,462			10,374			10,830			11,292
Minority interest in income from continuing operations
Common units in the Operating Partnership		(821		)	(1,307		)	(1,285		)	(1,381		)	(1,583		)
Preferred units in the Operating Partnership		(165		)	(165		)	(165		)	(165		)	(14		)
Other consolidated entities		19			15			24			12			8
Income from continuing operations		6,933			9,005			8,948			9,296			9,703
Income from discontinued operations, net of minority interests		3,656			115			92			150			47
Net Income		10,589			9,120			9,040			9,446			9,750
Preferred share dividends		(3,653		)	(3,654		)	(3,654		)	(3,654		)	(3,784		)
Issuance costs associated with redeemed preferred shares		—			—			—			—			(1,813		)
Net Income Available to Common Shareholders		$	6,936		$	5,466		$	5,386		$	5,792		$	4,153
For EPS Computations:
Numerator for Dilutive EPS		$	6,936		$	5,466		$	5,386		$	5,792		$	4,153
Denominator:
Weighted Average Common Shares - Basic		36,913			36,692			36,555			36,296			33,797
Dilutive options		1,667			1,528			1,537			1,638			1,655
Weighted Average Common Shares - Diluted		38,580			38,220			38,092			37,934			35,452
Earnings per diluted share		$	0.18		$	0.14		$	0.14		$	0.15		$	0.12

 

7

 

Quarterly Consolidated Reconciliations of Funds From Operations (FFO), Adjusted Funds From

Operations (AFFO) and Earnings per diluted share, as adjusted

(Dollars and shares in thousands)

 

		2005									2004
		September 30			June 30			March 31			December 31			September 30
Net Income		$	10,589		$	9,120		$	9,040		$	9,446		$	9,750
Issuance costs associated with redeemed preferred shares		—			—			—			—			(1,813		)
Combined real estate related depreciation and other amortization		17,848			15,087			14,505			13,625			11,700
Depreciation and amortization allocable to minority interests in other consol. entities		(23		)	(30		)	(32		)	(30		)	(56		)
Gain on sales of real estate properties, excluding development		(4,360		)	(24		)	(24		)	(24		)	(24		)
Funds From Operations (FFO)		24,054			24,153			23,489			23,017			19,557
Minority interest - common units, gross		1,726			1,335			1,308			1,418			1,595
Preferred share dividends		(3,653		)	(3,654		)	(3,654		)	(3,654		)	(3,784		)
Funds From Operations (FFO) - Basic		22,127			21,834			21,143			20,781			17,368
Restricted share dividends		—			—			—			98			—
Funds From Operations (FFO) - Diluted		$	22,127		$	21,834		$	21,143		$	20,879		$	17,368
Straight line rent adjustments		(1,519		)	(1,369		)	(1,583		)	(2,895		)	(2,519		)
Amortization of deferred market rental revenue		229			(191		)	(70		)	(125		)	(224		)
Issuance costs associated with redeemed preferred shares		—			—			—			—			1,813
Recurring capital expenditures		(4,945		)	(3,293		)	(4,734		)	(4,695		)	(4,679		)
Adjusted Funds from Operations - Diluted		$	15,892		$	16,981		$	14,756		$	13,164		$	11,759
Preferred dividends - redeemable non-convertible (1)		3,653			3,654			3,654			3,654			3,784
Preferred distributions		165			165			165			165			14
Common distributions		2,452			2,205			2,179			2,179			2,202
Common dividends		10,966			9,381			9,339			9,288			9,235
Total Dividends/Distributions		$	17,236		$	15,405		$	15,337		$	15,286		$	15,235
Denominator for earnings per share - Diluted		38,580			38,220			38,092			37,934			35,452
Common units		8,758			8,676			8,544			8,588			8,690
Denominator for funds from operations per share - Diluted		47,338			46,896			46,636			46,522			44,142
Funds From Operations (FFO) - Diluted		$	22,127		$	21,834		$	21,143		$	20,879		$	17,368
Issuance costs associated with redeemed preferred shares (1)		n/a			n/a			n/a			n/a			1,813
FFO diluted, as adjusted for issuance costs associated with redeemed preferred shares		$	22,127		$	21,834		$	21,143		$	20,879		$	19,181
Numerator for Dilutive EPS Computation		$	6,936		$	5,466		$	5,386		$	5,792		$	4,153
Issuance costs associated with redeemed preferred shares (1)		n/a			n/a			n/a			n/a			1,813
Numerator for Dilutive EPS Computation, as adjusted		$	6,936		$	5,466		$	5,386		$	5,792		$	5,966
Earnings per diluted share, as adjusted for issuance costs associated with redeemed preferred shares		$	0.18		$	0.14		$	0.14		$	0.15		$	0.17

 

(1)          Earnings per diluted share and FFO per diluted share have been adjusted to exclude the issuance costs associated with our Series B redeemed preferred shares.

 

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