COPT Reports 2012 Results; Affirms 2013 Guidance
COLUMBIA, Md.--(BUSINESS WIRE)-- Corporate Office Properties Trust (COPT or the Company) (NYSE: OFC) announced financial and operating results for the fourth quarter and full year ended December 31, 2012.
"The COPT team exceeded expectations in 2012, with our strong execution of the Strategic Reallocation Plan, record development leasing and strengthening our balance sheet," stated Roger A. Waesche, Jr., COPT’s President & Chief Executive Officer. "In fact, notwithstanding the on-going challenges presented by the Federal budget issues, we executed leases at development and redevelopment properties for 1.2 million square feet – the highest new leasing volume in COPT’s history," he stated.
Results:
For the fourth quarter ended December 31, 2012 – Diluted earnings per share (EPS) was $0.16 for the quarter ended December 31, 2012 as compared to EPS loss of ($1.26) in the fourth quarter of 2011. Diluted funds from operations per share (FFOPS), as adjusted for comparability, was $0.51 for the fourth quarter ended December 31, 2012, which represented an 11% decrease from the $0.57 reported for the fourth quarter of 2011. Adjustments for comparability encompass items such as acquisition costs, impairments and gains on non-operating properties, 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 fourth quarter of 2012 was $0.49 versus ($0.35) reported in the fourth quarter of 2011.
For the year ended December 31, 2012 – EPS loss was ($0.03) for the year ended December 31, 2012 as compared to an EPS loss of ($1.97) for 2011. FFOPS for the full year 2012, as adjusted for comparability, was $2.11, which represented a 1% decrease from the $2.14 reported in 2011. Per NAREIT’s definition, FFOPS for 2012 was $2.13 as compared to $0.72 for the full year 2011.
Operating Performance:
Portfolio Summary – At December 31, 2012, the Company’s consolidated portfolio of 208 operating office properties totaled 18.8 million square feet. The weighted average remaining lease term for the portfolio was 4.4 years and the average rental rate (including tenant reimbursements) was $27.92 per square foot. The Company’s consolidated portfolio was 87.8% occupied and 89.2% leased as of December 31, 2012.
Same Office Performance – The Company’s same office portfolio excludes properties identified for eventual sale, including those in its Strategic Reallocation Plan. For the year ended December 31, 2012, COPT’s same office portfolio represents 84% of the rentable square feet of the portfolio and consists of 177 properties.
For the year ended December 31, 2012, the Company’s same office property cash NOI, excluding gross lease termination fees, increased 2.3% as compared to the year ended 2011. Including gross lease termination fees, same office property cash NOI for the year ended December 31, 2012 increased 2.8% over 2011. The Company’s same office portfolio occupancy was 89.1% at year end 2012, up 80 basis points from the end of 2011.
Leasing – COPT completed a total of 1.4 million and 3.3 million square feet of leasing, respectively, for the quarter and year ended December 31, 2012. During these same periods, the Company’s respective renewal rates were 86% and 64%. For the quarter and year ended December 31, 2012, total rent on renewed space increased 3.9% and 2.2%, respectively, as measured from the straight-line rent in effect preceding the renewal date; on a cash basis, renewal rents increased 1.0% in the fourth quarter of 2012 and decreased 4.2% for the year versus 2011.
Investment Activity for the year ended December 31, 2012:
Construction – At December 31, 2012, the Company had 11 properties totaling 1.4 million square feet under construction for a total projected cost of $288.7 million, of which $154.0 million had been incurred which was 67% pre-leased.
Acquisitions – During 2012, the Company acquired one building located at 13857 McLearen Road in Herndon, Virginia, with 202,000 square feet for $48.3 million.
Dispositions – In 2012, as part of the Company’s Strategic Reallocation Plan, COPT disposed of 35 buildings aggregating 2.3 million square feet for $317.6 million.
Capital Transactions in 2012:
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.
In June, the Company issued $172.5 million dollars of Series L preferred shares with a 7.375% annual dividend. The Company used the proceeds to pay down its line of credit and redeemed all $55 million of its outstanding Series G preferred shares, which paid an 8% annual dividend.
In August, the Company entered into a $120 million term loan agreement, with the ability to expand the amount drawn during the term, subject to certain conditions, by an additional $80 million. The Term Loan has a seven-year term and a variable interest rate of LIBOR plus 2.10% to 2.60%, depending on the Company’s leverage levels.
In October, the Company completed a public offering of 8,625,000 newly issued common shares, which generated net proceeds of approximately $204.9 million. COPT used the net proceeds from the offering to repay amounts outstanding under its unsecured revolving credit facility and for general corporate purposes.
Balance Sheet and Financial Flexibility:
As of December 31, 2012, the Company had a total market capitalization of $4.5 billion, with $2.0 billion in debt outstanding, equating to a 45.0% debt-to-total market capitalization ratio. Also, the Company’s weighted average interest rate was 4.5% for the quarter ended December 31, 2012 and 80% of the Company’s debt was subject to fixed interest rates, including the effect of interest rate swaps.
2013 FFO Guidance:
Management is affirming its previously issued guidance for 2013 FFOPS of between $1.83 and $1.93, and its first quarter 2013 FFOPS guidance of between $0.44 and $0.46. A reconciliation of projected diluted EPS to projected FFOPS for the quarter ending March 31, 2013 and the year ending December 31, 2013 is provided, as follows:
| Quarter Ending | Year Ending | |||||||||||||||||||
| March 31, 2013 | December 31, 2013 | |||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||
| FFOPS, NAREIT definition | $ | 0.44 | $ | 0.46 | $ | 1.83 | $ | 1.93 | ||||||||||||
| Real estate depreciation and amortization | (0.35 | ) | (0.37 | ) | (1.41 | ) | (1.48 | ) | ||||||||||||
| Noncontrolling interests in non-FFO items and other | 0.01 | 0.02 | 0.04 | 0.08 | ||||||||||||||||
| EPS | $ | 0.10 | $ | 0.11 | $ | 0.46 | $ | 0.53 | ||||||||||||
Conference Call Information:
Management will discuss fourth quarter and full year 2012 earnings results, as well as its 2013 guidance, on its conference call today at 12:00 p.m. Eastern Time, details of which are listed below:
| Conference Call Date: | Friday, February 8, 2013 | |||
| Time: | 12:00 p.m. Eastern Time | |||
| Telephone Number: (within the U.S.) | 888-679-8034 | |||
| Telephone Number: (outside the U.S.) | 617-213-4847 | |||
| Passcode: | 99191178 | |||
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=PXR4G4A6B
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 Friday, February 8 at 1:00 p.m. Eastern Time through Friday, February 22 at midnight Eastern Time. To access the replay within the United States, please call 888-286-8010 and use passcode 65264157. To access the replay outside the United States, please call 617-801-6888 and use passcode 65264157.
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.
Definitions:
Please refer to the information furnished with our Form 8-K or our website (www.copt.com) for definitions of certain terms used in this press release. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the attached tables.
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 December 31, 2012, the Company’s consolidated portfolio consisted of 208 office properties totaling 18.8 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, any 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 Company's ability to achieve projected results;
- 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 and in our Current Report on Form 8-K dated October 10, 2012.
| Corporate Office Properties Trust | ||||||||||||||||||||
| Summary Financial Data | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
|
For the Three Months Ended December 31, |
For the Years Ended December 31, |
|||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Revenues | ||||||||||||||||||||
| Real estate revenues | $ | 117,481 | $ | 111,483 | $ | 454,171 | $ | 428,496 | ||||||||||||
| Construction contract and other service revenues | 20,024 | 16,491 | 73,836 | 84,345 | ||||||||||||||||
| Total revenues | 137,505 | 127,974 | 528,007 | 512,841 | ||||||||||||||||
| Expenses | ||||||||||||||||||||
| Property operating expenses | 44,887 | 42,525 | 167,161 | 162,397 | ||||||||||||||||
| Depreciation and amortization associated with real estate operations | 28,560 | 28,906 | 113,480 | 113,111 | ||||||||||||||||
| Construction contract and other service expenses | 19,274 | 15,941 | 70,576 | 81,639 | ||||||||||||||||
| Impairment losses | 1,954 | 40,495 | 43,214 | 83,478 | ||||||||||||||||
| General and administrative expenses | 5,740 | 5,881 | 26,271 | 25,133 | ||||||||||||||||
| Leasing expenses | 1,363 | 1,433 | 5,629 | 5,181 | ||||||||||||||||
| Business development expenses and land carry costs | 1,205 | 1,800 | 5,711 | 6,122 | ||||||||||||||||
| Total operating expenses | 102,983 | 136,981 | 432,042 | 477,061 | ||||||||||||||||
| Operating income (loss) | 34,522 | (9,007 | ) | 95,965 | 35,780 | |||||||||||||||
| Interest expense | (22,715 | ) | (23,361 | ) | (94,624 | ) | (98,222 | ) | ||||||||||||
| Interest and other income | 4,020 | 1,921 | 7,172 | 5,603 | ||||||||||||||||
| Loss on early extinguishment of debt | (6 | ) | (3 | ) | (943 | ) | (1,639 | ) | ||||||||||||
| Loss on interest rate derivatives | — | (29,805 | ) | — | (29,805 | ) | ||||||||||||||
| Income (loss) from continuing operations before equity in loss of unconsolidated entities and income taxes | 15,821 | (60,255 | ) | 7,570 | (88,283 | ) | ||||||||||||||
| Equity in loss of unconsolidated entities | (24 | ) | (108 | ) | (546 | ) | (331 | ) | ||||||||||||
| Income tax (expense) benefit | (54 | ) | 38 | (381 | ) | 6,710 | ||||||||||||||
| Income (loss) from continuing operations | 15,743 | (60,325 | ) | 6,643 | (81,904 | ) | ||||||||||||||
| Discontinued operations | 3,267 | (30,781 | ) | 13,677 | (48,404 | ) | ||||||||||||||
| Income (loss) before gain on sales of real estate | 19,010 | (91,106 | ) | 20,320 | (130,308 | ) | ||||||||||||||
| Gain on sales of real estate, net of income taxes | — | 4 | 21 | 2,732 | ||||||||||||||||
| Net income (loss) | 19,010 | (91,102 | ) | 20,341 | (127,576 | ) | ||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ||||||||||||||||||||
| Common units in the Operating Partnership | (651 | ) | 5,348 | 87 | 8,439 | |||||||||||||||
| Preferred units in the Operating Partnership | (165 | ) | (165 | ) | (660 | ) | (660 | ) | ||||||||||||
| Other consolidated entities | 345 | 423 | 1,209 | 369 | ||||||||||||||||
| Net income (loss) attributable to COPT | 18,539 | (85,496 | ) | 20,977 | (119,428 | ) | ||||||||||||||
| Preferred share dividends | (6,106 | ) | (4,026 | ) | (20,844 | ) | (16,102 | ) | ||||||||||||
| Issuance costs associated with redeemed preferred shares | — | — | (1,827 | ) | — | |||||||||||||||
| Net income (loss) attributable to COPT common shareholders | $ | 12,433 | $ | (89,522 | ) | $ | (1,694 | ) | $ | (135,530 | ) | |||||||||
| Earnings per share (“EPS”) computation: | ||||||||||||||||||||
| Numerator for diluted EPS: | ||||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 12,433 | $ | (89,522 | ) | $ | (1,694 | ) | $ | (135,530 | ) | |||||||||
| Amount allocable to restricted shares | (112 | ) | (256 | ) | (469 | ) | (1,037 | ) | ||||||||||||
| Numerator for diluted EPS | $ | 12,321 | $ | (89,778 | ) | $ | (2,163 | ) | $ | (136,567 | ) | |||||||||
| Denominator: | ||||||||||||||||||||
| Weighted average common shares - basic | 79,004 | 71,351 | 73,454 | 69,382 | ||||||||||||||||
| Dilutive effect of share-based compensation awards | 67 | — | — | — | ||||||||||||||||
| Weighted average common shares - diluted | 79,071 | 71,351 | 73,454 | 69,382 | ||||||||||||||||
| Diluted EPS | $ | 0.16 | $ | (1.26 | ) | $ | (0.03 | ) | $ | (1.97 | ) | |||||||||
| Corporate Office Properties Trust | ||||||||||||||||||||
| Summary Financial Data | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
|
For the Three Months Ended December 31, |
For the Years Ended December 31, |
|||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Net income (loss) | $ | 19,010 | $ | (91,102 | ) | $ | 20,341 | $ | (127,576 | ) | ||||||||||
| Real estate-related depreciation and amortization | 28,560 | 33,030 | 121,937 | 134,131 | ||||||||||||||||
| Impairment losses on previously depreciated operating properties | 247 | 39,481 | 70,263 | 70,512 | ||||||||||||||||
| Gain on sales of previously depreciated operating properties, net of income taxes | 8 | (3,362 | ) | (20,928 | ) | (4,811 | ) | |||||||||||||
| Depreciation and amortization on unconsolidated real estate entities | — | 142 | 346 | 492 | ||||||||||||||||
| Funds from operations (“FFO”) | 47,825 | (21,811 | ) | 191,959 | 72,748 | |||||||||||||||
| Noncontrolling interests - preferred units in the Operating Partnership | (165 | ) | (165 | ) | (660 | ) | (660 | ) | ||||||||||||
| FFO allocable to other noncontrolling interests | (738 | ) | (283 | ) | (1,989 | ) | (1,887 | ) | ||||||||||||
| Preferred share dividends | (6,106 | ) | (4,026 | ) | (20,844 | ) | (16,102 | ) | ||||||||||||
| Issuance costs associated with redeemed preferred shares | — | — | (1,827 | ) | — | |||||||||||||||
| Basic and diluted FFO allocable to restricted shares | (191 | ) | (255 | ) | (919 | ) | (1,037 | ) | ||||||||||||
| Basic and diluted FFO available to common share and common unit holders (“Basic and diluted FFO”) | 40,625 | (26,540 | ) | 165,720 | 53,062 | |||||||||||||||
| Operating property acquisition costs | — | 4 | 229 | 156 | ||||||||||||||||
| Gain on sales of non-operating properties, net of income taxes | — | — | (33 | ) | (2,717 | ) | ||||||||||||||
| Impairment losses (recoveries) on non-operating properties | 1,893 | 39,193 | (3,353 | ) | 80,509 | |||||||||||||||
| Income tax expense on impairment (losses) recoveries on non-operating properties | — | 452 | 673 | (4,775 | ) | |||||||||||||||
| Loss on interest rate derivatives | — | 29,805 | — | 29,805 | ||||||||||||||||
| Loss (gain) on early extinguishment of debt | 6 | 3 | (793 | ) | 2,023 | |||||||||||||||
| Issuance costs associated with redeemed preferred shares | — | — | 1,827 | — | ||||||||||||||||
| Diluted FFO available to common share and common unit holders, as adjusted for comparability | 42,524 | 42,917 | 164,270 | 158,063 | ||||||||||||||||
| Straight line rent adjustments | (3,385 | ) | (2,144 | ) | (10,016 | ) | (8,669 | ) | ||||||||||||
| Amortization of intangibles included in net operating income | 221 | 249 | 880 | 849 | ||||||||||||||||
| Share-based compensation, net of amounts capitalized | 1,720 | 3,764 | 9,982 | 11,920 | ||||||||||||||||
| Amortization of deferred financing costs | 1,547 | 1,506 | 6,243 | 6,596 | ||||||||||||||||
| Amortization of net debt discounts, net of amounts capitalized | 693 | 634 | 2,721 | 4,680 | ||||||||||||||||
| Amortization of settled debt hedges | 16 | 15 | 62 | 62 | ||||||||||||||||
| Recurring capital expenditures | (27,476 | ) | (12,550 | ) | (43,943 | ) | (39,510 | ) | ||||||||||||
| Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) | $ | 15,860 | $ | 34,391 | $ | 130,199 | $ | 133,991 | ||||||||||||
| Diluted FFO per share | $ | 0.49 | $ | (0.35 | ) | $ | 2.13 | $ | 0.72 | |||||||||||
| Diluted FFO per share, as adjusted for comparability | $ | 0.51 | $ | 0.57 | $ | 2.11 | $ | 2.14 | ||||||||||||
| Dividends/distributions per common share/unit | $ | 0.2750 | $ | 0.4125 | $ | 1.1000 | $ | 1.6500 | ||||||||||||
| Corporate Office Properties Trust | ||||||||||||||||||||
| Summary Financial Data | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
|
December 31, 2012 |
December 31, 2011 |
|||||||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Properties, net of accumulated depreciation | $ | 3,163,044 | $ | 3,352,975 | ||||||||||||||||
| Total assets | 3,653,759 | 3,863,555 | ||||||||||||||||||
| Debt, net | 2,019,168 | 2,426,303 | ||||||||||||||||||
| Total liabilities | 2,206,962 | 2,648,748 | ||||||||||||||||||
| Redeemable noncontrolling interest | 10,298 | 8,908 | ||||||||||||||||||
| Equity | 1,436,499 | 1,205,899 | ||||||||||||||||||
| Debt to adjusted book | 47.8 | % | 54.6 | % | ||||||||||||||||
| Debt to total market capitalization | 45.0 | % | 56.8 | % | ||||||||||||||||
| Consolidated Property Data (as of period end) | ||||||||||||||||||||
| Number of operating properties | 208 | 238 | ||||||||||||||||||
| Total net rentable square feet owned (in thousands) | 18,831 | 20,514 | ||||||||||||||||||
| Occupancy | 87.8 |
% |
86.2 | % | ||||||||||||||||
| Reconciliation of total assets to denominator for debt to adjusted book | ||||||||||||||||||||
| Denominator for debt to total assets | $ | 3,653,759 | $ | 3,863,555 | ||||||||||||||||
| Accumulated depreciation | 555,975 | 559,679 | ||||||||||||||||||
| Accumulated depreciation included in assets held for sale | 12,201 | 17,922 | ||||||||||||||||||
| Denominator for debt to adjusted book | $ | 4,221,935 | $ | 4,441,156 | ||||||||||||||||
|
For the Three Months Ended December 31, |
For the Years Ended December 31, |
|||||||||||||||||||
| 2012 | 2011 |
2012 |
2011 |
|||||||||||||||||
| Payout ratios | ||||||||||||||||||||
| Diluted FFO | 57.5 | % | (118.6 | )% | 52.1 | % | 233.5 | % | ||||||||||||
| Diluted FFO, as adjusted for comparability | 55.0 | % | 73.3 | % | 52.6 | % | 78.4 | % | ||||||||||||
| Diluted AFFO | 147.4 | % | 91.5 | % | 66.3 | % | 92.5 | % | ||||||||||||
| Adjusted EBITDA interest coverage ratio |
|
3.4 |
x |
|
3.2 |
x |
|
3.2 |
x |
|
3.0 |
x |
||||||||
| Adjusted EBITDA fixed charge coverage ratio |
|
2.6 |
x |
|
2.7 |
x |
|
2.6 |
x |
|
2.6 |
x |
||||||||
| Debt to Adjusted EBITDA ratio (1) |
|
7.2 |
x |
|
8.5 |
x |
|
7.1 |
x |
|
8.6 |
x |
||||||||
| Adjusted debt to Adjusted EBITDA ratio (2) |
|
6.0 |
x |
|
7.0 |
x |
|
6.0 |
x |
|
7.1 |
x |
||||||||
| Reconciliation of denominators for diluted EPS and diluted FFO per share | ||||||||||||||||||||
| Denominator for diluted EPS | 79,071 | 71,351 | 73,454 | 69,382 | ||||||||||||||||
| Weighted average common units | 4,171 | 4,308 | 4,235 | 4,355 | ||||||||||||||||
| Anti-dilutive EPS effect of share-based compensation awards | — | 29 | 53 | 111 | ||||||||||||||||
| Denominator for diluted FFO per share | 83,242 | 75,688 | 77,742 | 73,848 | ||||||||||||||||
| Reconciliation of FFO to FFO, as adjusted for comparability | ||||||||||||||||||||
| FFO | $ | 47,825 | $ | (21,811 | ) | $ | 191,959 | $ | 72,748 | |||||||||||
| Gain on sales of non-operating properties, net of income taxes | — | — | (33 | ) | (2,717 | ) | ||||||||||||||
| Impairment losses (recoveries) on non-operating properties, net of associated tax | 1,893 | 39,645 | (2,680 | ) | 75,734 | |||||||||||||||
| Operating property acquisition costs | — | 4 | 229 | 156 | ||||||||||||||||
| Loss on interest rate derivatives | — | 29,805 | — | 29,805 | ||||||||||||||||
| Loss (gain) on early extinguishment of debt, continuing and discontinued operations | 6 | 3 | (793 | ) | 2,023 | |||||||||||||||
| Issuance costs associated with redemption of preferred shares | — | — | 1,827 | — | ||||||||||||||||
| FFO, as adjusted for comparability | $ | 49,724 | $ | 47,646 | $ | 190,509 | $ | 177,749 | ||||||||||||
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(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). |
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Corporate Office Properties Trust |
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Summary Financial Data |
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(unaudited) |
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(Dollars in thousands) |
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| For the Three Months | For the Years Ended | |||||||||||||||
| Ended December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Reconciliation of common share dividends to dividends and distributions for payout ratios | ||||||||||||||||
| Common share dividends | $ | 22,255 | $ | 29,693 | $ | 81,720 | $ | 116,717 | ||||||||
| Common unit distributions | 1,119 | 1,775 | 4,617 | 7,173 | ||||||||||||
| Dividends and distributions for payout ratios | $ | 23,374 | $ | 31,468 | $ | 86,337 | $ | 123,890 | ||||||||
| Reconciliation of GAAP net income (loss) to adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) | ||||||||||||||||
| Net income (loss) | $ | 19,010 | $ | (91,102 | ) | $ | 20,341 | $ | (127,576 | ) | ||||||
| Interest expense on continuing operations | 22,715 | 23,361 | 94,624 | 98,222 | ||||||||||||
| Interest expense on discontinued operations | 67 | 1,553 | 2,174 | 6,079 | ||||||||||||
| Income tax expense (benefit) | 54 | (38 | ) | 381 | (6,710 | ) | ||||||||||
| Real estate-related depreciation and amortization | 28,560 | 33,030 | 121,937 | 134,131 | ||||||||||||
| Depreciation of furniture, fixtures and equipment | 610 | 601 | 2,481 | 2,463 | ||||||||||||
| Impairment losses | 2,140 | 78,674 | 66,910 | 151,021 | ||||||||||||
| Loss (gain) on early extinguishment of debt on continuing and discontinued operations | 6 | 3 | (793 | ) | 2,023 | |||||||||||
| Gain on sales of operating properties | 8 | (3,362 | ) | (20,928 | ) | (4,811 | ) | |||||||||
| Gain on sales of non-operational properties | — | — | (33 | ) | (2,717 | ) | ||||||||||
| Net gain on investments in unconsolidated entities included in interest and other income | (2,992 | ) | (771 | ) | (3,589 | ) | (1,820 | ) | ||||||||
| Operating property acquisition costs | — | 4 | 229 | 156 | ||||||||||||
| Loss on interest rate derivatives | — | 29,805 | — | 29,805 | ||||||||||||
| Adjusted EBITDA | $ | 70,178 | $ | 71,758 | $ | 283,734 | $ | 280,266 | ||||||||
| 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 | $ | 22,715 | $ | 23,361 | $ | 94,624 | $ | 98,222 | ||||||||
| Interest expense from discontinued operations | 67 | 1,553 | 2,174 | 6,079 | ||||||||||||
| Less: Amortization of deferred financing costs | (1,547 | ) | (1,506 | ) | (6,243 | ) | (6,596 | ) | ||||||||
| Less: Amortization of net debt discount, net of amounts capitalized | (693 | ) | (634 | ) | (2,721 | ) | (4,680 | ) | ||||||||
| Denominator for interest coverage-Adjusted EBITDA | 20,542 | 22,774 | 87,834 | 93,025 | ||||||||||||
| Preferred share dividends | 6,106 | 4,026 | 20,844 | 16,102 | ||||||||||||
| Preferred unit distributions | 165 | 165 | 660 | 660 | ||||||||||||
| Denominator for fixed charge coverage-Adjusted EBITDA | $ | 26,813 | $ | 26,965 | $ | 109,338 | $ | 109,787 | ||||||||
|
Corporate Office Properties Trust |
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|
Summary Financial Data |
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|
(unaudited) |
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|
(Dollars in thousands) |
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| For the Three Months | For the Years Ended | |||||||||||||||
| Ended December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Reconciliations of tenant improvements and incentives, capital improvements and leasing costs for operating properties to recurring capital expenditures | ||||||||||||||||
| Tenant improvements and incentives on operating properties | $ | 10,713 | $ | 10,036 | $ | 21,816 | $ | 30,756 | ||||||||
| Building improvements on operating properties | 18,049 | 4,519 | 24,862 | 9,840 | ||||||||||||
| Leasing costs for operating properties | 1,381 | 1,448 | 6,490 | 10,474 | ||||||||||||
| Less: Nonrecurring tenant improvements and incentives on operating properties | (283 | ) | (1,371 | ) | (4,793 | ) | (6,264 | ) | ||||||||
| Less: Nonrecurring building improvements on operating properties | (2,226 | ) | (2,106 | ) | (4,145 | ) | (4,294 | ) | ||||||||
| Less: Nonrecurring leasing costs for operating properties | — | (5 | ) | (209 | ) | (1,098 | ) | |||||||||
| Add: Recurring capital expenditures on operating properties held through joint ventures | (158 | ) | 29 | (78 | ) | 96 | ||||||||||
| Recurring capital expenditures | $ | 27,476 | $ | 12,550 | $ | 43,943 | $ | 39,510 | ||||||||
| 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 | $ | 64,911 | $ | 64,601 | $ | 262,343 | $ | 254,419 | ||||||||
| Less: Straight-line rent adjustments | (1,291 | ) | (617 | ) | (5,703 | ) | (5,170 | ) | ||||||||
| Less: Amortization of deferred market rental revenue | (79 | ) | (83 | ) | (354 | ) | (288 | ) | ||||||||
| Add: Amortization of above-market cost arrangements | 371 | 434 | 1,466 | 1,735 | ||||||||||||
| Same office property cash net operating income | 63,912 | 64,335 | 257,752 | 250,696 | ||||||||||||
| Less: Lease termination fees, gross | (544 | ) | (48 | ) | (1,692 | ) | (491 | ) | ||||||||
| Same office property cash net operating income, excluding gross lease termination fees | $ | 63,368 | $ | 64,287 | $ | 256,060 | $ | 250,205 | ||||||||
| Reconciliation of debt, net to denominator for adjusted debt to Adjusted EBITDA ratio | ||||||||||||||||
| Debt, net | $ | 2,019,168 | $ | 2,426,303 | $ | 2,019,168 | $ | 2,426,303 | ||||||||
| Less: Construction in progress | (329,054 | ) | (409,086 | ) | (329,054 | ) | (409,086 | ) | ||||||||
| Less: Construction in progress on assets held for sale | — | (12,277 | ) | — | (12,277 | ) | ||||||||||
| Denominator for adjusted debt to adjusted EBITDA ratio | $ | 1,690,114 | $ | 2,004,940 | $ | 1,690,114 | $ | 2,004,940 | ||||||||
Corporate Office Properties Trust
IR Contacts:
Stephanie
Krewson, 443-285-5453
VP, Investor Relations
stephanie.krewson@copt.com
or
Michelle
Layne, 443-285-5452
Investor Relations Specialist
michelle.layne@copt.com
Source: Corporate Office Properties Trust
Released February 8, 2013