Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v2.4.0.8
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Schedule of differences between taxable income reported on income tax returns and net income as reported on consolidated statements of operations
The differences between taxable income reported on our income tax returns (estimated 2013 and actual 2012 and 2011) and net income as reported on our consolidated statements of operations are set forth below (in thousands):
 
 
For the Years Ended December 31,
 
 
2013
 
2012
 
2011
 
 
 (Estimated)
 
 
 
 
COPLP consolidated net income (loss)
 
$
101,544

 
$
20,341

 
$
(127,570
)
Adjustments:
 
 
 
 
 
 
Rental revenue recognition
 
(973
)
 
(10,794
)
 
(10,708
)
Compensation expense recognition
 
10,051

 
(2,669
)
 
(1,298
)
Operating expense recognition
 
(1,718
)
 
1,158

 
751

Gain on sales of properties
 
(53,545
)
 
(74,858
)
 
1,154

Impairment losses
 
32,047

 
66,910

 
151,021

Loss on interest rate derivatives
 
—

 
(29,805
)
 
29,805

Gains from non-real estate investments
 
—

 
7,854

 
4,447

Income from service operations
 
1,224

 
1,500

 
(12,078
)
Income tax expense
 
1,978

 
381

 
6,710

Depreciation and amortization
 
23,824

 
24,804

 
44,070

Interest expense
 
1,159

 
3,978

 
5,548

Income from unconsolidated entities
 
(1,462
)
 
(725
)
 
(374
)
COPLP consolidated noncontrolling interests
 
(3,907
)
 
(636
)
 
(1,919
)
Other
 
(624
)
 
(70
)
 
80

COPLP consolidated taxable income
 
$
109,598

 
$
7,369

 
$
89,639

Noncontrolling interests, other
 
(4,930
)
 
(622
)
 
(5,583
)
Other
 
—

 
741

 
(6
)
COPT consolidated taxable income
 
$
104,668

 
$
7,488

 
$
84,050

Schedule of characterization of dividends declared on common and preferred shares
The characterization of dividends declared on COPT’s common and preferred shares during each of the last three years was as follows:
 
 
Common Shares
 
Preferred Shares
 
 
For the Years Ended December 31,
 
For the Years Ended December 31,
 
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Ordinary income
 
71.8
%
 
33.2
%
 
56.9
%
 
76.2
%
 
100
%
 
85.9
%
Long-term capital gain
 
22.4
%
 
0.0
%
 
9.4
%
 
23.8
%
 
0.0
%
 
14.1
%
Return of capital
 
5.8
%
 
66.8
%
 
33.7
%
 
0.0
%
 
0.0
%
 
0.0
%
Components of provision for income tax
Our TRS’ provision for income tax consisted of the following (in thousands):
 
 
For the Years Ended December 31,
 
 
2013
 
2012
 
2011
Deferred
 
 
 
 
 
 
Federal
 
$
(1,742
)
 
$
(312
)
 
$
5,510

State
 
(236
)
 
(69
)
 
1,219

 
 
(1,978
)
 
(381
)
 
6,729

Current
 
 
 
 
 
 
Federal
 
—

 
—

 
(16
)
State
 
—

 
—

 
(3
)
 
 
—

 
—

 
(19
)
Total income tax (expense) benefit
 
$
(1,978
)
 
$
(381
)
 
$
6,710

Schedule of reconciliation of Federal statutory rate to effective tax rate
A reconciliation of our TRS’ Federal statutory rate to the effective tax rate for income tax reported on our statements of operations is set forth below:
 
 
 
For the Years Ended December 31,
 
 
2013
 
2012
 
2011
Income taxes at U.S. statutory rate
 
34.0
 %
 
34.0
%
 
34.0
%
State and local, net of U.S. Federal tax benefit
 
4.5
 %
 
4.6
%
 
4.6
%
Increase in deferred tax asset valuation allowance
 
562.9
 %
 
0.0
%
 
0.0
%
Other
 
(1.1
)%
 
0.0
%
 
0.0
%
Effective tax rate
 
600.3
 %
 
38.6
%
 
38.6
%
Schedule of tax effects of temporary differences and carry forwards in net deferred tax assets
The table below sets forth the tax effects of temporary differences and carry forwards included in the net deferred tax asset of our TRS (in thousands):
 
 
December 31,
 
 
2013
 
2012
Operating loss forward
 
$
5,382

 
$
6,014

Share-based compensation
 
869

 
904

Accrued payroll
 
221

 
12

Property
 
(105
)
 
(111
)
Valuation allowance
 
(2,062
)
 
(207
)
Deferred tax asset, net
 
$
4,305

 
$
6,612