Exhibit 99.1

Earnings Release & Supplemental Information — Unaudited

March 31, 2012

 

OVERVIEW:	Section I
Earnings Release	—
Summary Description	1
Equity Research Coverage	2
Selected Financial Summary Data	3
Selected Portfolio Data	4
FINANCIAL STATEMENTS:	Section II
Quarterly Consolidated Balance Sheets	5
Consolidated Statements of FFO	6
Consolidated Statements of Operations	7
Consolidated Reconciliations of AFFO	8
PORTFOLIO INFORMATION:	Section III
Consolidated Office Properties by Region	9
NOI from Real Estate Operations and Occupancy by Property Grouping	10
Real Estate Revenues & NOI from Real Estate Operations by Segment	11
Consolidated Office Occupancy Rates by Region by Quarter	12
Same Office Properties Average Occupancy Rates by Region	13
Same Office Property Real Estate Revenues & NOI by Region	14
Unstabilized Office Properties	15
Office Leasing for the Quarter Ended	16
Office Lease Expiration Analysis	17
Top 20 Office Tenants	18
INVESTING ACTIVITY:	Section IV
Dispositions and Acquisitions	19
Construction, Redevelopment, Wholesale Data Center, Land Held
& Pre-Construction	20
Summary of Construction Projects	21
Summary of Redevelopment Projects	22
Wholesale Data Center	23
Summary of Land Held and Pre-Construction	24
CAPITALIZATION:	Section V
Quarterly Common Equity Analysis	25
Quarterly Preferred Equity and Total Market Capitalization Analysis	26
Dividend Analysis	27
Debt Analysis	28-29
Debt Maturity Schedule	30
Consolidated Joint Ventures	31
Unconsolidated Joint Venture	32
RECONCILIATIONS & DEFINITIONS:	Section VI
Supplementary Reconciliations of Non-GAAP Measures	33-34
Definitions	35-39

 

Please refer to the section entitled “Definitions” for definitions of non-GAAP measures and other terms we use herein that may not be customary or commonly known.

 

 

		6711 Columbia Gateway Drive, Suite 300
		Columbia, Maryland 21046
		Telephone 443-285-5400
		Facsimile 443-285-7650
		www.copt.com
		NYSE: OFC
		NEWS RELEASE
FOR IMMEDIATE RELEASE		IR Contacts:
		Stephanie Krewson	Michelle Layne
		VP, Investor Relations	Investor Relations Specialist
		443-285-5453	443-285-5452
		stephanie.krewson@copt.com	michelle.layne@copt.com

 

COPT REPORTS FIRST QUARTER 2012 RESULTS

 

COLUMBIA, MD April 26, 2012 — Corporate Office Properties Trust (COPT) (NYSE: OFC), an office real estate investment trust (REIT) that focuses primarily on serving the specialized requirements of U.S. Government and Defense Information Technology tenants, announced financial and operating results for the first quarter ended March 31, 2012.

 

“While we continue to operate in a challenging economic environment, 2012 is starting off well, as evidenced by our quarterly results,” stated Roger A. Waesche, Jr., President and Chief Executive Officer of Corporate Office Properties Trust. “We continue to make solid progress executing on our Strategic Reallocation Plan and we are pleased with the performance of our same office portfolio,” he added.

 

Results:

 

Diluted earnings per share (EPS) was $0.04 for the quarter ended March 31, 2012 as compared to an EPS loss of ($0.33) in the first quarter of 2011. Diluted funds from operations per share (FFOPS), as adjusted for comparability, was $0.53 for the first quarter ended March 31, 2012, which represented an 8% increase from the $0.49 reported for the first quarter of 2011. Adjustments for comparability encompass items such as acquisition costs, impairments and gains on non-operating properties, gains (losses) on early extinguishment of debt and derivative losses. Please refer to the reconciliation tables that appear later in this press release. Per NAREIT’s definition, FFOPS for the first quarter of 2012 was $0.54 versus $0.13 reported in the first quarter of 2011.

 

Operating Performance:

 

Portfolio Summary — At March 31, 2012, the Company’s consolidated portfolio of 231 operating office properties totaled 20.2 million square feet. The weighted average remaining lease term for the portfolio was 4.7 years and the average rental rate (including tenant reimbursements) was $26.95 per square foot. The Company’s consolidated portfolio was 87% occupied and 89% leased as of March 31, 2012, up 80 and 70 basis points, respectively, from December 31, 2011 levels.

 

Same Office Performance — The Company’s same office portfolio excludes properties identified for eventual disposal as part of the Company’s Strategic Reallocation Plan. For the quarter ended March 31, 2012, COPT’s same office portfolio represents 79% of the rentable square feet of the portfolio and consists of 169 properties. The Company’s same office portfolio occupancy was 89.5% at the end of the first quarter of 2012, down 10 basis points from year end 2011.

 

 

For the first quarter ended March 31, 2012, the Company’s same office property cash NOI, excluding gross lease termination fees, increased 7% as compared to the first quarter ended 2011. Including gross lease termination fees, same office property cash NOI for the first quarter ended March 31, 2012 increased 8% over the same period in 2011.

 

Leasing — COPT leased a total of 570,000 square feet during the quarter ended March 31, 2012, which included 86,000 square feet of development leasing. During this same period, the Company’s renewal rate was 59%. For the quarter ended March 31, 2012, total rent on renewed space increased 2% as measured from the straight-line rent in effect preceding the renewal date; on a cash basis, renewal rents decreased 8%.

 

Investment Activity:

 

Construction — At March 31, 2012, the Company had six office properties totaling 789,000 square feet under construction for a total projected cost of $197.7 million, of which $136.4 million had been incurred.

 

Dispositions — In the first quarter of 2012, COPT sold seven stabilized properties, two vacant properties and a land parcel for net proceeds of approximately $61 million. The stabilized buildings contained an aggregate of 219,000 square feet and were 80% occupied (63 leases) at the time of sale.

 

Capital Transactions:

 

In February, the Company entered into a $250 million term loan agreement with its bank group. The Term Loan has a five-year term and a variable interest rate of LIBOR plus 1.65% to 2.40%, depending on the Company’s leverage levels. The Company used proceeds from the Term Loan to repay outstanding balances on its unsecured line of credit.

 

Balance Sheet and Financial Flexibility:

 

As of March 31, 2012, the Company had a total market capitalization of $4.4 billion, with $2.4 billion in debt outstanding, equating to a 55% debt-to-total market capitalization ratio. Also, the Company’s weighted average interest rate was 4.37% for the quarter ended March 31, 2012 and 80% of the Company’s debt was subject to fixed interest rates, including the effect of interest rate swaps.

 

For the first quarter 2012, the Company’s adjusted EBITDA to interest expense coverage ratio was 3.20x, and the adjusted EBITDA fixed charge coverage ratio was 2.72x. Adjusting for construction in progress, the Company’s adjusted debt-to-adjusted EBITDA ratio was 6.69x for the three months ended March 31, 2012.

 

2012 FFO Guidance:

 

Management is affirming its previously issued guidance for 2012 FFOPS of between $2.02 and $2.18, and is issuing second quarter 2012 FFOPS guidance of $0.48 to $0.52. A reconciliation of projected diluted EPS to projected FFOPS for the quarter ending June 30, 2012 and the year ending December 31, 2012 is provided, as follows:

 

 

		Quarter Ending						Year Ending
		June 30, 2012						December 31, 2012
		Low			High			Low			High
FFOPS		$	0.48		$	0.52		$	2.02		$	2.18
Real estate depreciation and amortization		(0.44		)	(0.44		)	(1.73		)	(1.73		)
Impairments of previously depreciated properties		—			—			(0.16		)	(0.16		)
Gains on sales of previously depreciated properties		—			—			0.05			0.05
EPS		$	0.04		$	0.08		$	0.18		$	0.34

 

Conference Call Information:

 

Management will discuss first quarter 2012 earnings results, as well as its 2012 guidance, on its conference call today at 11:00 a.m. Eastern Time, details of which are listed below:

 

Conference Call Date:		Thursday, April 26, 2012
Time:		11:00 a.m. Eastern Time
Telephone Number: (within the U.S.)		888-679-8035
Telephone Number: (outside the U.S.)		617-213-4848
Passcode:		35166438

 

Please use the following link to pre-register and view important information about this conference call. Pre-registering is not mandatory but is recommended as it will provide you immediate entry into the call and will facilitate the timely start of the conference. Pre-registration only takes a few moments and you may pre-register at anytime, including up to and after the call start time. To pre-register, please click on the below link:

https://www.theconferencingservice.com/prereg/key.process?key=PJAUAWVD7

 

You may also pre-register in the Investor Relations section of the Company’s website at www.copt.com. Alternatively, you may be placed into the call by an operator by calling the number provided above at least 5 to 10 minutes before the start of the call. A replay of this call will be available beginning Thursday, April 26 at 3:00 p.m. Eastern Time through Thursday, May 10 at midnight Eastern Time. To access the replay within the United States, please call 888-286-8010 and use passcode 94646315. To access the replay outside the United States, please call 617-801-6888 and use passcode 94646315.

 

The conference calls will also be available via live webcast in the Investor Relations section of the Company’s website at www.copt.com. A replay of the conference calls will be immediately available via webcast in the Investor Relations section of the Company’s website.

 

 

Company Information:

 

COPT is an office REIT that focuses primarily on strategic customer relationships and specialized tenant requirements in the U.S. Government and Defense Information Technology sectors and Data Centers serving such sectors. The Company acquires, develops, manages and leases office and data center properties that are typically concentrated in large office parks primarily located adjacent to government demand drivers and/or in strong markets that we believe possess growth opportunities. As of March 31, 2012, the Company’s consolidated portfolio consisted of 231 office properties totaling 20.2 million rentable square feet. The Company’s portfolio primarily consists of technically sophisticated buildings in visually appealing settings that are environmentally sensitive, sustainable and meet unique customer requirements. COPT is an S&P MidCap 400 company and more information can be found at www.copt.com.

 

Forward-Looking Information:

 

This press release may contain “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 the Company’s current expectations, estimates and projections about future events and financial trends affecting the Company.  Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology.  Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate.  Accordingly, the Company 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:

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

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

·                  governmental actions and initiatives, including risks associated with the impact of a government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues,  non-renewal of leases, and/or a curtailment of demand for additional space by strategic tenants;

·                  the Company’s ability to sell properties included in its Strategic Reallocation Plan;

·                  the Company’s ability to borrow on favorable terms;

·                  risks of real estate acquisition and development activities, 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 the Company’s joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with the Company’s objectives;

·                  changes in the Company’s plans or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of impairment losses;

·                  the Company’s ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;

·                  the dilutive effect of issuing additional common shares; and

·                  environmental requirements.

 

The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company’s filings with the Securities and Exchange Commission, particularly the section entitled “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

 

Reconciliations:

 

Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the tables, below. Please refer to the information furnished with our Form 8-K on our website (www.copt.com) for definitions of these non-GAAP measures and other terms used in this press release.

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Amounts in thousands, except per share data)

 

		Three Months Ended March 31,
		2012			2011
Revenues
Real estate revenues		$	121,939		$	116,461
Construction contract and other service revenues		21,534			21,028
Total revenues		143,473			137,489
Expenses
Property operating expenses		47,202			47,061
Depreciation and amortization associated with real estate operations		31,066			30,043
Construction contract and other service expenses		20,607			20,618
Impairment losses		5,126			27,742
General and administrative expenses		7,017			6,777
Business development expenses and land carry costs		1,594			1,241
Total operating expenses		112,612			133,482
Operating income		30,861			4,007
Interest expense		(25,224		)	(26,115		)
Interest and other income		1,217			1,168
Income (loss) from continuing operations before equity in (loss) income of unconsolidated entities and income taxes		6,854			(20,940		)
Equity in (loss) income of unconsolidated entities		(89		)	30
Income tax (expense) benefit		(4,173		)	544
Income (loss) from continuing operations		2,592			(20,366		)
Discontinued operations		4,385			(901		)
Income (loss) before gain on sales of real estate		6,977			(21,267		)
Gain on sales of real estate, net of income taxes		—			2,701
Net income (loss)		6,977			(18,566		)
Net (income) loss attributable to noncontrolling interests
Common units in the Operating Partnership		(159		)	1,479
Preferred units in the Operating Partnership		(165		)	(165		)
Other consolidated entities		24			(538		)
Net income (loss) attributable to COPT		6,677			(17,790		)
Preferred share dividends		(4,025		)	(4,025		)
Net income (loss) attributable to COPT common shareholders		$	2,652		$	(21,815	)
Earnings per share (“EPS”) computation:
Numerator for diluted EPS:
Net income (loss) attributable to common shareholders		$	2,652		$	(21,815	)
Dilutive effect of common units in the Operating Partnership		—			(1,479		)
Amount allocable to restricted shares		(141		)	(282		)
Numerator for diluted EPS		$	2,511		$	(23,576	)
Denominator:
Weighted average common shares - basic		71,458			66,340
Dilutive effect of common units in the Operating Partnership		—			4,396
Weighted average common shares - diluted		71,458			70,736
Diluted EPS		$	0.04		$	(0.33	)

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Amounts in thousands, except per share data and ratios)

 

		Three Months Ended March 31,
		2012			2011
Net income (loss)		$	6,977		$	(18,566	)
Real estate-related depreciation and amortization		31,087			33,020
Impairment losses on previously depreciated operating properties		11,833			—
Depreciation and amortization on unconsolidated real estate entities		114			119
Gain on sales of previously depreciated operating properties, net of income taxes		(4,138		)	—
Funds from operations (“FFO”)		45,873			14,573
Noncontrolling interests - preferred units in the Operating Partnership		(165		)	(165		)
Noncontrolling interests - other consolidated entities		24			(538		)
Preferred share dividends		(4,025		)	(4,025		)
Depreciation and amortization allocable to noncontrolling interests in other consolidated entities		(284		)	(65		)
Basic and diluted FFO allocable to restricted shares		(294		)	(282		)
Basic and diluted FFO available to common share and common unit holders (“Basic and diluted FFO”)		41,129			9,498
Operating property acquisition costs		—			23
Gain on sales of non-operating properties, net of income taxes		—			(2,701		)
Impairment (recoveries) losses on other properties		(5,246		)	27,742
Income tax expense on impairment recoveries on other properties		4,642			—
Diluted FFO available to common share and common unit holders, as adjusted for comparability		40,525			34,562
Straight line rent adjustments		(2,179		)	(3,912		)
Amortization of acquisition intangibles included in net operating income		190			161
Share-based compensation, net of amounts capitalized		3,402			2,759
Amortization of deferred financing costs		1,572			1,759
Amortization of net debt discounts, net of amounts capitalized		663			1,398
Amortization of settled debt hedges		16			16
Recurring capital expenditures on properties not in disposition plans		(1,875		)	(7,976		)
Diluted adjusted funds from operations available to common share and common unit holders, excluding recurring capital expenditures on properties sold or in disposition plans		42,314			28,767
Recurring capital expenditures on properties sold or in disposition plans		(1,548		)	(6,368		)
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”)		$	40,766		$	22,399
Weighted average shares
Weighted average common shares		71,458			66,340
Conversion of weighted average common units		4,281			4,396
Weighted average common shares/units - basic FFO per share		75,739			70,736
Dilutive effect of share-based compensation awards		44			261
Weighted average common shares/units - diluted FFO per share		75,783			70,997
Diluted FFO per share		$	0.54		$	0.13
Diluted FFO per share, as adjusted for comparability		$	0.53		$	0.49
Dividends/distributions per common share/unit		$	0.2750		$	0.4125
Payout ratios
Diluted FFO		51.0		%	310.7		%
Diluted FFO, as adjusted for comparability		51.8		%	85.4		%
Diluted AFFO, excluding recurring capital expenditures on properties sold or in disposition plans		49.6		%	102.6		%
Adjusted EBITDA interest coverage ratio		3.20x			2.91x
Adjusted EBITDA fixed charge coverage ratio		2.72x			2.48x
Debt to Adjusted EBITDA ratio (1)		8.05x			8.66x
Adjusted debt to Adjusted EBITDA ratio (2)		6.69x			7.23x
Reconciliation of denominators for diluted EPS and diluted FFO per share
Denominator for diluted EPS		71,458			70,736
Weighted average common units		4,281			—
Anti-dilutive EPS effect of share-based compensation awards		44			261
Denominator for diluted FFO per share		75,783			70,997

 

(1)          Represents debt as of period end divided by Adjusted EBITDA for the period, as annualized (i.e. three month periods are multiplied by four).

(2)          Represents debt adjusted to subtract construction in progress as of period end divided by Adjusted EBITDA for the period, as annualized (i.e. three month periods are multiplied by four).

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Dollars and shares in thousands, except per share data)

 

		March 31,			December 31,
		2012			2011
Balance Sheet Data (in thousands) (as of period end)
Properties, net of accumulated depreciation		$	3,338,291		$	3,352,975
Total assets		3,797,368			3,867,524
Debt, net		2,418,078			2,426,303
Total liabilities		2,596,572			2,649,459
Beneficiaries’ equity		1,200,796			1,218,065
Debt to undepreciated book value of real estate assets		59.4		%	58.8		%
Debt to total market capitalization		54.8		%	56.8		%
Property Data (consolidated office properties) (as of period end)
Number of operating properties owned		231			238
Total net rentable square feet owned (in thousands)		20,236			20,514
Occupancy		87.0		%	86.2		%
Reconciliation of denominator for debt to total assets to denominator for debt to undepreciated book value of real estate assets
Denominator for debt to total assets		$	3,797,368		$	3,867,524
Assets other than assets included in properties, net and assets held for sale		(377,725		)	(397,933		)
Accumulated depreciation on real estate assets		570,242			559,679
Accumulated depreciation included in assets held for sale		5,840			17,922
Intangible assets on real estate acquisitions, net		83,940			89,120
Non real estate assets included in assets held for sale		(5,664		)	(6,523		)
Denominator for debt to undepreciated book value of real estate assets		$	4,074,001		$	4,129,789

 

		Three Months Ended
		March 31,
		2012			2011
Reconciliations of tenant improvements and incentives, capital improvements and leasing costs for operating properties to recurring capital expenditures
Properties not sold or in disposition plans
Tenant improvements and incentives on operating properties		$	666		$	7,435
Building improvements on operating properties		871			944
Leasing costs for operating properties		1,299			2,601
Less: Nonrecurring tenant improvements and incentives on operating properties		(561		)	(2,211		)
Less: Nonrecurring building improvements on operating properties		(407		)	(199		)
Less: Nonrecurring leasing costs for operating properties		—			(616		)
Add: Recurring capital expenditures on operating properties held through joint ventures		7			22
Recurring capital expenditures on properties not sold or in disposition plans		$	1,875		$	7,976
Properties sold or in disposition plans
Tenant improvements and incentives on operating properties		$	930		$	5,835
Building improvements on operating properties		823			1,046
Leasing costs for operating properties		142			135
Less: Nonrecurring tenant improvements and incentives on operating properties		(158		)	(237		)
Less: Nonrecurring building improvements on operating properties		(189		)	(411		)
Recurring capital expenditures on properties sold or in disposition plans		$	1,548		$	6,368

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Dollars in thousands)

 

		Three Months Ended
		March 31,
		2012			2011
Reconciliation of common share dividends to dividends and distributions for payout ratios
Common share dividends		$	19,819		$	27,704
Common unit distributions		1,173			1,809
Dividends and distributions for payout ratios		$	20,992		$	29,513
Reconciliation of FFO to FFO, as adjusted for comparability
FFO		$	45,873		$	14,573
Gain on sales of non-operating properties, net of income taxes		—			(2,701		)
Impairment (recoveries) losses on non-operating properties, net of associated tax		(604		)	27,742
Operating property acquisition costs		—			23
FFO, as adjusted for comparability		$	45,269		$	39,637
Reconciliation of GAAP net (loss) income to adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”)
Net income (loss)		$	6,977		$	(18,566	)
Interest expense on continuing operations		25,224			26,115
Interest expense on discontinued operations		451			813
Income tax expense (benefit)		4,173			(544		)
Real estate-related depreciation and amortization		31,087			33,020
Depreciation of furniture, fixtures and equipment		618			625
Impairment losses		6,587			27,742
Adjusted EBITDA		$	75,117		$	69,205
Reconciliation of interest expense from continuing operations to the denominators for interest coverage-Adjusted EBITDA and fixed charge coverage-Adjusted EBITDA
Interest expense from continuing operations		$	25,224		$	26,115
Interest expense from discontinued operations		451			813
Less: Amortization of deferred financing costs		(1,572		)	(1,759		)
Less: Amortization of net debt discount, net of amounts capitalized		(663		)	(1,398		)
Denominator for interest coverage-Adjusted EBITDA		23,440			23,771
Preferred share dividends		4,025			4,025
Preferred unit distributions		165			165
Denominator for fixed charge coverage-Adjusted EBITDA		$	27,630		$	27,961
Reconciliation of same office property net operating income to same office property cash net operating income and same office property cash net operating income, excluding gross lease termination fees
Same office property net operating income		$	64,826		$	61,775
Less: Straight-line rent adjustments		(1,992		)	(3,515		)
Less: Amortization of deferred market rental revenue		(103		)	(124		)
Add: Amortization of above-market cost arrangements		353			434
Same office property cash net operating income		63,084			58,570
Less: Lease termination fees, gross		(534		)	(138		)
Same office property cash net operating income, excluding gross lease termination fees		$	62,550		$	58,432
Reconciliation of debt, net to denominator for adjusted debt to Adjusted EBITDA ratio
Debt, net		$	2,418,078		$	2,396,795
Less: Construction in progress		(408,883		)	(396,170		)
Less: Construction in progress on assets held for sale		(75		)	—
Denominator for adjusted debt to adjusted EBITDA ratio		$	2,009,120		$	2,000,625

 

 

Summary Description

 

The Company — Corporate Office Properties Trust (the “Company” or “COPT”) is a self-managed office real estate investment trust (“REIT”). As of March 31, 2012, COPT derived 60% of its annualized rental revenue from properties occupied primarily by tenants in the U.S. Government and/or defense information technology (“Defense IT”) sectors and 83% of the Company’s square footage was located in the Greater Washington/Baltimore region. At March 31, 2012, COPT’s operating portfolio of 231 office properties encompassed 20.2 million square feet and was 88.9% leased. As of the same date, COPT also owned one wholesale data center that was 17% leased.

 

Corporate Strategy — Through acquisitions and development activities, COPT has assembled a portfolio of Class-A office parks located adjacent to knowledge-based defense installations (rather than weapons production-oriented bases) that are executing programs deemed critical to the nation’s current and future security. COPT also owns dedicated data centers that serve the specialized requirements of our government and Defense IT tenants and a wholesale data center.

 

Management:	Investor Relations:
Roger A. Waesche, Jr., President & CEO	Stephanie M. Krewson, VP of IR
Stephen E. Budorick, EVP & COO	443-285-5453, stephanie.krewson@copt.com
Wayne H. Lingafelter, EVP, Development	Michelle Layne, IR Specialist
& Construction	443-285-5452, michelle.layne@copt.com
Stephen E. Riffee, EVP & CFO

 

Disclosure Statement — This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” 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.  Although we believe that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, 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: general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values; adverse changes in the real estate markets, including, among other things, increased competition with other companies; governmental actions and initiatives, including risks associated with the impact of a government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases and/or a curtailment of demand for additional space by our strategic customers; our ability to sell properties included in our Strategic Reallocation Plan; our ability to borrow on favorable terms; risks of real estate acquisition and development activities, 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 and 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; changes in our plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of impairment losses; our ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships; the dilutive effects of issuing additional common shares; 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 1A of our Annual Report on Form 10-K for the year ended December 31, 2011.

 

1

 

Corporate Office Properties Trust

Equity Research Coverage

 

Firm		Senior Analyst		Phone		Email
Bank of America Merrill Lynch		Jamie Feldman		646-855-5808		james.feldman@baml.com
BMO Capital Markets		Richard Anderson		212-885-4180		richard.anderson@bmo.com
Citigroup Global Markets		Michael Bilerman		212-816-1383		michael.bilerman@citi.com
Cowen and Company		James Sullivan		646-562-1380		james.sullivan@cowen.com
Green Street Advisors		Michael Knott		949-640-8780		mknott@greenstreetadvisors.com
ISI Group		Steve Sakwa		212-446-9462		ssakwa@isigrp.com
Jefferies & Co.		Omotayo Okusanya		212-336-7076		tokusanya@jefferies.com
JP Morgan		Anthony Paolone		212-622-6682		anthony.paolone@jpmorgan.com
Keefe, Bruyette & Woods		Sheila McGrath		212-887-7793		smcgrath@kbw.com
KeyBanc Capital Markets		Jordan Sadler		917-368-2280		jsadler@keybanccm.com
Macquarie Securities		Rob Stevenson		212-231-8068		rob.stevenson@macquarie.com
Raymond James		Bill Crow		727-567-2594		bill.crow@raymondjames.com
RBC Capital Markets		Dave Rodgers		440-715-2647		dave.rodgers@rbccm.com
Robert W. Baird & Co., Inc.		Dave Aubuchon		314-445-6520		DAubuchon@rwbaird.com
Stifel, Nicolaus & Company, Inc.		John Guinee		443-224-1307		jwguinee@stifel.com
Wells Fargo Securities		Brendan Maiorana		443-263-6516		brendan.maiorana@wachovia.com

 

With the exception of Green Street Advisors, the above-listed firms are those whose analysts publish research material on the Company and whose estimates of our FFO per share can be tracked through Thomson’s First Call Corporation. Any opinions, estimates, or forecasts the above analysts make regarding COPT’s future performance are their own and do not represent the views, estimates, or forecasts of COPT’s management.

 

2

 

 

Corporate Office Properties Trust

Selected Financial Summary Data

(in thousands, except per share data)

 

		Three Months Ended
		3/31/12			12/31/11			9/30/11			6/30/11			3/31/11
SUMMARY OF RESULTS
Same Office NOI		$64,826			$64,693			$64,943			$64,140			$61,775
NOI from real estate operations		$76,917			$77,261			$77,135			$76,133			$72,289
Adjusted EBITDA		$75,117			$75,173			$69,288			$73,058			$69,205
Net income (loss) attributable to COPT common shareholders		$2,652			$(86,253		)	$2,541			$(28,250		)	$(21,815		)
FFO - per NAREIT		$45,873			$(17,924		)	$42,319			$37,038			$14,573
FFO - as adjusted for comparability		$45,269			$46,935			$44,391			$46,075			$39,637
Basic and diluted FFO available to common share and common unit holders		$41,129			$(22,653		)	$37,029			$32,446			$9,498
Diluted AFFO available to common share and common unit holders		$40,766			$24,846			$33,300			$30,005			$22,399
Per share - diluted:
EPS		$0.04			$(1.21		)	$0.03			$(0.42		)	$(0.33		)
FFO - NAREIT		$0.54			$(0.30		)	$0.49			$0.44			$0.13
FFO - as adjusted for comparability		$0.53			$0.56			$0.52			$0.57			$0.49
Dividend per common share		$0.2750			$0.4125			$0.4125			$0.4125			$0.4125
Payout ratios:
Diluted FFO		51.0		%	-138.9		%	85.0		%	96.9		%	310.7		%
Diluted FFO - as adjusted for comparability		51.8		%	74.6		%	80.5		%	75.8		%	85.4		%
Diluted AFFO, excluding recurring capital expenditures on properties in disposition plans		49.6		%	93.4		%	87.0		%	90.8		%	102.6		%
CAPITALIZATION
Debt, net		$2,418,078			$2,426,303			$2,420,073			$2,299,416			$2,396,795
Debt to Total Market Capitalization		54.8		%	56.8		%	56.2		%	47.0		%	46.0		%
Debt to Undepreciated Book Value of Real Estate Assets		59.4		%	58.8		%	57.6		%	56.0		%	58.4		%
Adjusted EBITDA fixed charge coverage ratio		2.7 x			2.8 x			2.6 x			2.6 x			2.5 x
Adjusted Debt to Adjusted EBITDA ratio		6.7 x			6.7 x			7.0 x			6.4 x			7.2 x
OTHER
Revenue from early termination of leases		$395			$45			$103			$196			$146
Capitalized interest costs		$3,809			$4,294			$4,458			$4,308			$4,341

 

3

 

Corporate Office Properties Trust

Selected Portfolio Data

 

		3/31/12		12/31/11		9/30/11		6/30/11		3/31/11
# of Operating Office Properties
Wholly-owned		227		234		246		249		252
+ Consolidated JV		4		4		4		4		4
Consolidated properties		231		238		250		253		256
% Occupied
Wholly-owned		87.6	%	86.9	%	88.0	%	87.3	%	87.0	%
+ Consolidated JV		60.0	%	56.6	%	60.0	%	58.9	%	61.5	%
Consolidated properties		87.0	%	86.2	%	87.4	%	86.6	%	86.4	%
% Leased
Wholly-owned		89.2	%	88.7	%	89.8	%	89.4	%	89.2	%
+ Consolidated JV		78.4	%	67.3	%	63.6	%	60.1	%	62.8	%
Consolidated properties		88.9	%	88.2	%	89.2	%	88.7	%	88.6	%
Square Feet of Office Properties (in thousands)
Wholly-owned		19,793		20,072		20,205		20,244		20,183
+ Consolidated JV Square Footage		444		442		442		442		442
Consolidated Square Footage		20,236		20,514		20,647		20,686		20,625

 

4