Annual report pursuant to Section 13 and 15(d)

Equity - COPT and Subsidiaries

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Equity - COPT and Subsidiaries
 12 Months Ended
Dec. 31, 2017
Stockholders' Equity Note [Abstract]  
Equity - COPT and Subsidiaries
Equity - COPT and Subsidiaries

Preferred Shares

As of December 31, 2017, COPT had 25.0 million preferred shares authorized and unissued at $0.01 par value per share. In 2017, COPT redeemed all of its outstanding preferred shares, including:

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the 5.600% Series K Cumulative Redeemable Preferred Shares (the “Series K Preferred Shares”) redeemed effective January 21, 2017 at a price of $50.00 per share, or $26.6 million in the aggregate, plus accrued and unpaid dividends thereon through the date of redemption. Concurrently with this redemption, COPLP redeemed its Series K Preferred Units on the same terms. Since we made an irrevocable notification to holders of the Series K Preferred Shares in December 2016 of our intention to redeem such shares, we presented the liquidation preference of the shares as a liability on COPT’s consolidated balance sheet as of December 31, 2016; we also recognized a $17,000 decrease to net income available to common shareholders in 2016 pertaining to the original issuance costs incurred on the shares. The liability associated with these shares as of December 31, 2016 is classified in Level 2 of the fair value hierarchy; and
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the 7.375% Series L Cumulative Preferred Shares (the “Series L Preferred Shares”) redeemed effective June 27, 2017 at a price of $25.00 per share, or $172.5 million in the aggregate, plus accrued and unpaid dividends thereon up to but not including the date of redemption. Concurrently with this redemption, COPLP redeemed its Series L Preferred Units on the same terms. We also recognized a $6.8 million decrease to net income available to common shareholders in 2017 pertaining to the original issuance costs incurred on the shares.

Common Shares

In October 2012, COPT established an at-the-market (“ATM”) stock offering program under which it could, from time to time, offer and sell common shares in “at the market” stock offerings having an aggregate gross sales price of up to $150.0 million. COPT issued 890,241 common shares under this program in 2015 at a weighted average price of $30.29 per share. Net proceeds from the shares issued totaled $26.6 million, after payment of $0.4 million in commissions to sales agents; COPT contributed the net proceeds from these issuances to COPLP in exchange for an equal number of units in COPLP. As discussed below, this program was replaced by a new ATM program established in 2016.

In September 2016, COPT established a new ATM stock offering program under which it may, from time to time, offer and sell common shares in “at the market” stock offerings having an aggregate gross sales price of up to $200.0 million. This program replaced the ATM stock offering program that we previously had in place. COPT issued the following common shares under this ATM program:

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3.72 million common shares in the three months ended December 31, 2016 at a weighted average price of $29.56 per share. Net proceeds from the shares issued totaled $109.1 million, after payment of $0.9 million in commissions to sales agents; and
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591,000 common shares in 2017 at a weighted average price of $33.84 per share. Net proceeds from the shares issued totaled $19.7 million, after payment of $0.3 million in commissions to sales agents.

COPT contributed the net proceeds from these issuances to COPLP in exchange for an equal number of units in COPLP. COPT’s remaining capacity under this ATM program as of December 31, 2017 was an aggregate gross sales price of $70.0 million in common share sales.

On November 2, 2017, COPT entered into forward equity sale agreements to issue 9.2 million common shares at an initial gross offering price of $285.2 million, or $31.00 per share, before underwriting discounts, commissions and offering expenses. The forward sale price that we expect to receive upon physical settlement of the agreements will be subject to adjustment on a daily basis based on a floating interest rate factor equal to the overnight bank funding rate less a spread, and will be decreased on each of certain dates specified in the agreements during the term of the agreements. On December 27, 2017, COPT issued 1.7 million common shares under the agreements for net proceeds of $50.0 million. COPT contributed the net proceeds from these issuances to COPLP in exchange for an equal number of units in COPLP.

Holders of COPLP common units converted their units into COPT common shares on the basis of one common share for each common unit in the amount of 339,513 in 2017, 87,000 in 2016 and 160,160 in 2015.

COPT declared dividends per common share of $1.10 in 2017, 2016 and 2015.

See Note 15 for disclosure of common share activity pertaining to our share-based compensation plans.