COPT Reports 3Q 2022 Results

Reports EPS of $0.27 in 3Q22;
FFO per Share, as Adjusted for Comparability, of $0.58 at Midpoint of Guidance

Core Portfolio 93% Occupied & 95% Leased

1.9 million SF of Active Developments are 91% Leased

Outstanding Leasing

Total Leasing of 857,000 SF in 3Q22 and 2.3 million SF Year-to-Date

Record Level of Quarterly New Leasing Achieved at 351,000 SF

Tenant Retention of 92% in 3Q22 and 72% Year-to-Date

Guidance

Maintains Midpoint of Full-Year Guidance for FFOPS, As Adjusted for Comparability

at $2.35, Implying 2.6% Growth

Maintains Midpoint of Full-Year Same-Property Occupancy at 92.5% and

Narrows Full-Year Guidance for Change in Same-Property Cash NOI at (2%)-(1%)

Midpoint of Year-End Tenant Retention Rate Expected to be 75%

Narrows Change in Cash Rents on Renewals to (2%)-(1%)

COLUMBIA, Md.--(BUSINESS WIRE)-- Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced results for the third quarter ended September 30, 2022.

Management Comments

Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy which has concentrated our portfolio near priority U.S. defense installations continues to produce strong results. Third quarter FFOPS of $0.58 was at the midpoint of our guidance and we remain on track to achieve our annual objective which implies 2.6% growth in FFOPS, as adjusted for comparability. Leasing during the quarter was exceptional, achieving our highest level of vacancy leasing in over a decade and renewing over 92% of expiring leases. Despite the historic vacancy leasing volume, our vacancy leasing activity ratio stands at 89%. Development leasing activity also remains strong, and we are confident that we will achieve our 700,000 square foot goal for the year. Our lease structures continue to insulate our results from the impacts of the record inflationary environment, however the elevated interest expense environment will put some pressure on 2023 FFO growth.” 

He continued, “We are very pleased to have closed our new Revolving Credit Facility and Term Loan that extends these maturities to 2027 and 2028, and as a result, we have no significant debt maturing until 2026.”

Financial Highlights

3rd Quarter Financial Results:

  • Diluted earnings per share (“EPS”) was $0.27 for the quarter ended September 30, 2022 compared to $0.24 for the third quarter of 2021.
  • Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, was $0.58 for the third quarter of 2022 compared to $0.56 for the third quarter of 2021.
  • FFOPS, as adjusted for comparability, was $0.58 for the third quarter of 2022 compared to $0.57 for the third quarter of 2021.

Operating Performance Highlights

Operating Portfolio Summary:

  • At September 30, 2022, the Company’s 21.9 million square foot core portfolio was 92.8% occupied and 95.0% leased.

Same-Property Performance:

  • At September 30, 2022, COPT’s 20.3 million square foot same-property portfolio was 92.7% occupied and 94.9% leased.
  • For the quarter ended September 30, 2022, the Company’s same-property cash NOI decreased 1.4% compared to the third quarter of 2021.

Leasing:

  • Total Square Feet Leased: For the quarter ended September 30, 2022, the Company leased 857,000 square feet, including 506,000 square feet of renewals, and 351,000 square feet of new leases on vacant space. For the nine months ended September 30, 2022, the Company executed 2.3 million square feet of total leasing, including 1.2 million square feet of renewals, 628,000 square feet of vacancy leasing, and 476,000 square feet in development projects.
  • Tenant Retention Rates: During the quarter and nine months ended September 30, 2022, the Company renewed 92.2% and 72.0%, respectively, of expiring square feet.
  • Rent Spreads & Average Escalations on Renewing Leases: For the quarter and nine months ended September 30, 2022, straight-line rents on renewals increased 5.0% and 2.9%, respectively, and cash rents on renewed space decreased 1.1% and 2.7%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.6% and 2.5%, respectively.
  • Lease Terms: In the third quarter of 2022, lease terms averaged 3.7 years on renewing leases, and 6.9 years on vacancy leasing. For the first nine months, lease terms averaged 3.6 years on renewing leases, 6.7 years on vacancy leasing, and 13.3 years on development leasing.

Investment Activity Highlights

  • Development Pipeline: The Company’s development pipeline consists of 12 properties and an expansion of one fully-operational property totaling 1.9 million square feet that were 91.0% leased at September 30, 2022. These projects represent a total estimated investment of $642.7 million, of which $337.1 million has been spent.

Balance Sheet and Capital Transaction Highlights

  • On October 26, 2022, the Company entered into a credit agreement with a group of lenders for an aggregate of $725.0 million of available borrowings including an unsecured revolving credit facility with a lender commitment of $600.0 million that replaced its existing Revolving Credit Facility; and a $125.0 million unsecured term loan, the proceeds of which were used to pay off the remaining $100.0 million outstanding under an existing unsecured term loan and pay down a portion of its Revolving Credit Facility.
  • For the quarter ended September 30, 2022, the Company’s adjusted EBITDA fixed charge coverage ratio was 5.1x.
  • At September 30, 2022, the Company’s net debt to in-place adjusted EBITDA ratio was 6.7x and its net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio was 5.9x.
  • At September 30, 2022, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 2.85% with a weighted average maturity of 6.9 years including the maturity dates and extension options available under the October 26, 2022 credit agreement; additionally, 92.5% of the Company’s debt was subject to fixed interest rates.

Associated Supplemental Presentation

Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its third quarter 2022 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT’s Investors website: https://investors.copt.com/financial-information/financial-results

2022 Guidance

Management is narrowing its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of $1.33-$1.37, and $2.33-$2.37, respectively, to new ranges of $1.35-$1.37, and $2.34-$2.36, respectively. Management is establishing fourth quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.27-$0.29 and $0.59-$0.61, respectively. Reconciliations of projected diluted EPS to projected diluted FFOPS, in accordance with Nareit and as adjusted for comparability are as follows:

Reconciliation of Diluted EPS to FFOPS, per Nareit, and As Adjusted for Comparability

 

Quarter Ending
December 31, 2022

 

Year Ending
December 31, 2022

 

 

Low

 

High

 

Low

 

High

Diluted EPS

 

$

0.27

 

$

0.29

 

$

1.35

 

 

$

1.37

 

Real estate-related depreciation and amortization

 

 

0.32

 

 

0.32

 

 

1.24

 

 

 

1.24

 

Gain on sales of real estate

 

 

 

 

 

 

(0.25

)

 

 

(0.25

)

Diluted FFOPS, Nareit definition and as adjusted for comparability

 

$

0.59

 

$

0.61

 

$

2.34

 

 

$

2.36

 

Conference Call Information

Management will discuss third quarter 2022 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:

Conference Call Date:

Friday, October 28, 2022

Time:

12:00 p.m. Eastern Time

Participants must register for the conference call at the link below to receive the dial-in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time:
https://register.vevent.com/register/BI72a10ea2a80646dc85eef9257f7c258b

The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT’s Investors website: https://investors.copt.com/news-events/ir-calendar

Replay Information

A replay of the conference call will be immediately available via webcast only on COPT’s Investors website.

Definitions

For definitions of certain terms used in this press release, please refer to the information furnished in the Company’s Supplemental Information Package furnished on a Form 8-K which can be found on its website (www.copt.com). Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the attached tables.

About COPT

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what the Company believes are growing, durable, priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban/urban-like submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of September 30, 2022, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 19 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 186 properties encompassed 21.9 million square feet and was 95.0% leased.

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. Although the Company believes that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, 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 and the Company undertakes no obligation to update or supplement any forward-looking statements.

The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Source: Corporate Office Properties Trust

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

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

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2022

 

2021

 

2022

 

2021

Revenues

 

 

 

 

 

 

 

Revenues from real estate operations

$

147,687

 

 

$

138,873

 

 

$

433,213

 

 

$

413,922

 

Construction contract and other service revenues

 

34,813

 

 

 

28,046

 

 

 

130,570

 

 

 

64,592

 

Total revenues

 

182,500

 

 

 

166,919

 

 

 

563,783

 

 

 

478,514

 

Operating expenses

 

 

 

 

 

 

 

Property operating expenses

 

57,663

 

 

 

52,728

 

 

 

168,960

 

 

 

156,918

 

Depreciation and amortization associated with real estate operations

 

35,247

 

 

 

33,807

 

 

 

104,323

 

 

 

103,039

 

Construction contract and other service expenses

 

33,555

 

 

 

27,089

 

 

 

126,509

 

 

 

61,964

 

General and administrative expenses

 

6,558

 

 

 

7,269

 

 

 

19,695

 

 

 

20,624

 

Leasing expenses

 

2,340

 

 

 

2,073

 

 

 

6,102

 

 

 

6,346

 

Business development expenses and land carry costs

 

552

 

 

 

1,093

 

 

 

2,036

 

 

 

3,559

 

Total operating expenses

 

135,915

 

 

 

124,059

 

 

 

427,625

 

 

 

352,450

 

Interest expense

 

(15,123

)

 

 

(15,720

)

 

 

(44,355

)

 

 

(49,181

)

Interest and other income

 

2,290

 

 

 

1,818

 

 

 

6,001

 

 

 

5,911

 

Credit loss (expense) recoveries

 

(1,693

)

 

 

326

 

 

 

(1,602

)

 

 

1,040

 

Gain on sales of real estate

 

16

 

 

 

(32

)

 

 

12

 

 

 

39,711

 

Loss on early extinguishment of debt

 

 

 

 

(1,159

)

 

 

(342

)

 

 

(59,553

)

Income from continuing operations before equity in income of unconsolidated entities and income taxes

 

32,075

 

 

 

28,093

 

 

 

95,872

 

 

 

63,992

 

Equity in income of unconsolidated entities

 

308

 

 

 

297

 

 

 

1,514

 

 

 

779

 

Income tax expense

 

(67

)

 

 

(47

)

 

 

(224

)

 

 

(103

)

Income from continuing operations

 

32,316

 

 

 

28,343

 

 

 

97,162

 

 

 

64,668

 

Discontinued operations

 

 

 

 

451

 

 

 

29,573

 

 

 

1,945

 

Net Income

 

32,316

 

 

 

28,794

 

 

 

126,735

 

 

 

66,613

 

Net income attributable to noncontrolling interests:

 

 

 

 

 

 

 

Common units in the Operating Partnership (“OP”)

 

(476

)

 

 

(357

)

 

 

(1,828

)

 

 

(831

)

Other consolidated entities

 

(919

)

 

 

(1,336

)

 

 

(2,357

)

 

 

(2,949

)

Net income attributable to COPT common shareholders

$

30,921

 

 

$

27,101

 

 

$

122,550

 

 

$

62,833

 

 

 

 

 

 

 

 

 

Earnings per share (“EPS”) computation:

 

 

 

 

 

 

 

Numerator for diluted EPS:

 

 

 

 

 

 

 

Net income attributable to COPT common shareholders

$

30,921

 

 

$

27,101

 

 

$

122,550

 

 

$

62,833

 

Amount allocable to share-based compensation awards

 

(75

)

 

 

(79

)

 

 

(334

)

 

 

(320

)

Redeemable noncontrolling interests

 

(40

)

 

 

(89

)

 

 

(109

)

 

 

(82

)

Numerator for diluted EPS

$

30,806

 

 

$

26,933

 

 

$

122,107

 

 

$

62,431

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares - basic

 

112,093

 

 

 

111,985

 

 

 

112,066

 

 

 

111,949

 

Dilutive effect of share-based compensation awards

 

433

 

 

 

375

 

 

 

429

 

 

 

285

 

Dilutive effect of redeemable noncontrolling interests

 

105

 

 

 

138

 

 

 

121

 

 

 

130

 

Weighted average common shares - diluted

 

112,631

 

 

 

112,498

 

 

 

112,616

 

 

 

112,364

 

Diluted EPS

$

0.27

 

 

$

0.24

 

 

$

1.08

 

 

$

0.56

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(in thousands, except per share data)

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2022

 

2021

 

2022

 

2021

Net income

$

32,316

 

 

$

28,794

 

 

$

126,735

 

 

$

66,613

 

Real estate-related depreciation and amortization

 

35,247

 

 

 

36,611

 

 

 

104,323

 

 

 

111,487

 

Gain on sales of real estate from continuing and discontinued operations

 

(16

)

 

 

32

 

 

 

(28,576

)

 

 

(39,711

)

Depreciation and amortization on unconsolidated real estate JVs

 

524

 

 

 

525

 

 

 

1,575

 

 

 

1,455

 

Funds from operations (“FFO”)

 

68,071

 

 

 

65,962

 

 

 

204,057

 

 

 

139,844

 

FFO allocable to other noncontrolling interests

 

(1,348

)

 

 

(1,696

)

 

 

(3,568

)

 

 

(4,025

)

Basic FFO allocable to share-based compensation awards

 

(354

)

 

 

(313

)

 

 

(1,073

)

 

 

(663

)

Basic FFO available to common share and common unit holders (“Basic FFO”)

 

66,369

 

 

 

63,953

 

 

 

199,416

 

 

 

135,156

 

Redeemable noncontrolling interests

 

(5

)

 

 

(68

)

 

 

(7

)

 

 

1

 

Diluted FFO adjustments allocable to share-based compensation awards

 

27

 

 

 

13

 

 

 

81

 

 

 

27

 

Diluted FFO available to common share and common unit holders (“Diluted FFO”)

 

66,391

 

 

 

63,898

 

 

 

199,490

 

 

 

135,184

 

Loss on early extinguishment of debt

 

 

 

 

1,159

 

 

 

342

 

 

 

59,553

 

Demolition costs on redevelopment and nonrecurring improvements

 

 

 

 

129

 

 

 

 

 

 

431

 

Executive transition costs

 

206

 

 

 

 

 

 

343

 

 

 

 

Diluted FFO comparability adjustments allocable to share-based compensation awards

 

(2

)

 

 

(7

)

 

 

(4

)

 

 

(300

)

Diluted FFO available to common share and common unit holders, as adjusted for comparability

 

66,595

 

 

 

65,179

 

 

 

200,171

 

 

 

194,868

 

Straight line rent adjustments and lease incentive amortization

 

605

 

 

 

(1,806

)

 

 

(5,782

)

 

 

(6,451

)

Amortization of intangibles and other assets included in net operating income

 

50

 

 

 

41

 

 

 

(273

)

 

 

122

 

Share-based compensation, net of amounts capitalized

 

2,188

 

 

 

2,048

 

 

 

6,453

 

 

 

5,961

 

Amortization of deferred financing costs

 

540

 

 

 

736

 

 

 

1,678

 

 

 

2,340

 

Amortization of net debt discounts, net of amounts capitalized

 

612

 

 

 

567

 

 

 

1,825

 

 

 

1,629

 

Replacement capital expenditures

 

(17,528

)

 

 

(13,331

)

 

 

(52,603

)

 

 

(38,656

)

Other

 

377

 

 

 

201

 

 

 

822

 

 

 

620

 

Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”)

$

53,439

 

 

$

53,635

 

 

$

152,291

 

 

$

160,433

 

Diluted FFO per share

$

0.58

 

 

$

0.56

 

 

$

1.75

 

 

$

1.19

 

Diluted FFO per share, as adjusted for comparability

$

0.58

 

 

$

0.57

 

 

$

1.75

 

 

$

1.71

 

Dividends/distributions per common share/unit

$

0.275

 

 

$

0.275

 

 

$

0.825

 

 

$

0.825

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

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

 

 

September 30,
2022

 

December 31,
2021

Balance Sheet Data

 

 

 

Properties, net of accumulated depreciation

$

3,691,411

 

 

$

3,532,944

 

Total assets

 

4,269,329

 

 

 

4,262,452

 

Debt, per balance sheet

 

2,269,834

 

 

 

2,272,304

 

Total liabilities

 

2,543,216

 

 

 

2,578,479

 

Redeemable noncontrolling interests

 

25,447

 

 

 

26,898

 

Equity

 

1,700,666

 

 

 

1,657,075

 

Net debt to adjusted book

 

40.3

%

 

 

40.5

%

 

 

 

 

Core Portfolio Data (as of period end) (1)

 

 

 

Number of operating properties

 

186

 

 

 

184

 

Total operational square feet (in thousands)

 

21,928

 

 

 

21,553

 

% Occupied

 

92.8

%

 

 

92.6

%

% Leased

 

95.0

%

 

 

94.4

%

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

2022

 

2021

 

2022

 

2021

Payout ratios

 

 

 

 

 

 

 

Diluted FFO

47.1%

 

48.8%

 

47.0%

 

69.2%

Diluted FFO, as adjusted for comparability

46.9%

 

47.8%

 

46.8%

 

48.0%

Diluted AFFO

58.5%

 

58.1%

 

61.6%

 

58.3%

Adjusted EBITDA fixed charge coverage ratio

5.1x

 

4.8x

 

5.2x

 

4.7x

Net debt to in-place adjusted EBITDA ratio (2)

6.7x

 

6.3x

 

N/A

 

N/A

Net debt adj. for fully-leased development to in-place adj. EBITDA ratio (3)

5.9x

 

5.9x

 

N/A

 

N/A

 

 

 

 

 

 

 

 

Reconciliation of denominators for per share measures

 

 

 

 

 

 

Denominator for diluted EPS

112,631

 

112,498

 

112,616

 

112,364

Weighted average common units

1,477

 

1,262

 

1,446

 

1,257

Anti-dilutive EPS effect of share-based compensation awards

 

 

 

26

Denominator for diluted FFO per share and as adjusted for comparability

114,108

 

113,760

 

114,062

 

113,647

(1)  

Represents Defense/IT Locations and Regional Office properties.

(2)  

Represents net debt as of period end divided by in-place adjusted EBITDA for the period, as annualized (i.e. three month periods are multiplied by four).

(3)  

Represents net debt less costs incurred on properties under development that were 100% leased as of period end divided by in-place adjusted EBITDA for the period, as annualized (i.e. three month periods are multiplied by four).

   

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(in thousands)

 
 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2022

 

2021

 

2022

 

2021

Reconciliation of common share dividends to dividends and distributions for payout ratios

 

 

 

 

 

 

 

Common share dividends - unrestricted shares and deferred shares

$

30,844

 

 

$

30,813

 

 

$

92,523

 

 

$

92,429

 

Common unit distributions - unrestricted units

 

406

 

 

 

347

 

 

 

1,217

 

 

 

1,041

 

Common unit distributions - dilutive restricted units

 

13

 

 

 

6

 

 

 

38

 

 

 

19

 

Dividends and distributions for payout ratios

$

31,263

 

 

$

31,166

 

 

$

93,778

 

 

$

93,489

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP net income to earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”), adjusted EBITDA and in-place adjusted EBITDA

 

 

 

 

 

 

 

Net income

$

32,316

 

 

$

28,794

 

 

$

126,735

 

 

$

66,613

 

Interest expense

 

15,123

 

 

 

15,720

 

 

 

44,355

 

 

 

49,181

 

Income tax expense

 

67

 

 

 

47

 

 

 

224

 

 

 

103

 

Real estate-related depreciation and amortization

 

35,247

 

 

 

36,611

 

 

 

104,323

 

 

 

111,487

 

Other depreciation and amortization

 

602

 

 

 

589

 

 

 

1,761

 

 

 

2,189

 

Gain on sales of real estate

 

(16

)

 

 

32

 

 

 

(28,576

)

 

 

(39,711

)

Adjustments from unconsolidated real estate JVs

 

762

 

 

 

763

 

 

 

2,280

 

 

 

2,167

 

EBITDAre

 

84,101

 

 

 

82,556

 

 

 

251,102

 

 

 

192,029

 

Loss on early extinguishment of debt

 

 

 

 

1,159

 

 

 

342

 

 

 

59,553

 

Net gain on other investments

 

 

 

 

 

 

 

(564

)

 

 

(63

)

Credit loss expense (recoveries)

 

1,693

 

 

 

(326

)

 

 

1,602

 

 

 

(1,040

)

Business development expenses

 

386

 

 

 

473

 

 

 

1,097

 

 

 

1,605

 

Demolition costs on redevelopment and nonrecurring improvements

 

 

 

 

129

 

 

 

 

 

 

431

 

Executive transition costs

 

206

 

 

 

 

 

 

343

 

 

 

 

Adjusted EBITDA

 

86,386

 

 

 

83,991

 

 

$

253,922

 

 

$

252,515

 

Pro forma net operating income adjustment for property changes within period

 

 

 

 

3,240

 

 

 

 

 

Change in collectability of deferred rental revenue

 

13

 

 

 

 

 

 

 

 

In-place adjusted EBITDA

$

86,399

 

 

$

87,231

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of interest expense to the denominators for fixed charge coverage-Adjusted EBITDA

 

 

 

 

 

 

 

Interest expense

$

15,123

 

 

$

15,720

 

 

$

44,355

 

 

$

49,181

 

Less: Amortization of deferred financing costs

 

(540

)

 

 

(736

)

 

 

(1,678

)

 

 

(2,340

)

Less: Amortization of net debt discounts, net of amounts capitalized

 

(612

)

 

 

(567

)

 

 

(1,825

)

 

 

(1,629

)

COPT’s share of interest expense of unconsolidated real estate JVs, excluding deferred financing costs and amortization of net debt premium

 

236

 

 

 

236

 

 

 

700

 

 

 

706

 

Scheduled principal amortization

 

851

 

 

 

989

 

 

 

2,469

 

 

 

2,910

 

Capitalized interest

 

1,969

 

 

 

1,763

 

 

 

4,874

 

 

 

5,275

 

Denominator for fixed charge coverage-Adjusted EBITDA

$

17,027

 

 

$

17,405

 

 

$

48,895

 

 

$

54,103

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(in thousands)

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2022

 

2021

 

2022

 

2021

Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures

 

 

 

 

 

 

 

Tenant improvements and incentives

$

8,848

 

 

$

8,654

 

 

$

29,513

 

 

$

24,096

 

Building improvements

 

7,477

 

 

 

7,793

 

 

 

21,060

 

 

 

18,192

 

Leasing costs

 

3,073

 

 

 

2,939

 

 

 

7,091

 

 

 

6,873

 

Net (exclusions from) additions to tenant improvements and incentives

 

(57

)

 

 

(1,523

)

 

 

2,225

 

 

 

389

 

Excluded building improvements and leasing costs

 

(1,813

)

 

 

(4,532

)

 

 

(7,286

)

 

 

(10,894

)

Replacement capital expenditures

$

17,528

 

 

$

13,331

 

 

$

52,603

 

 

$

38,656

 

 

 

 

 

 

 

 

 

Same Properties cash NOI

$

82,711

 

 

$

83,927

 

 

$

243,919

 

 

$

246,225

 

Straight line rent adjustments and lease incentive amortization

 

(2,866

)

 

 

(1,432

)

 

 

(5,754

)

 

 

(753

)

Amortization of acquired above- and below-market rents

 

97

 

 

 

99

 

 

 

713

 

 

 

296

 

Lease termination fees, net

 

591

 

 

 

853

 

 

 

1,211

 

 

 

3,309

 

Tenant funded landlord assets and lease incentives

 

1,973

 

 

 

1,057

 

 

 

4,701

 

 

 

1,820

 

Cash NOI adjustments in unconsolidated real estate JVs

 

73

 

 

 

91

 

 

 

233

 

 

 

288

 

Same Properties NOI

$

82,579

 

 

$

84,595

 

 

$

245,023

 

 

$

251,185

 

 

 

 

September 30,
2022

 

December 31,
2021

Reconciliation of total assets to adjusted book

 

 

 

 

Total assets

 

$

4,269,329

 

 

$

4,262,452

 

Accumulated depreciation

 

 

1,245,313

 

 

 

1,152,523

 

Accumulated depreciation included in assets held for sale

 

 

 

 

 

82,385

 

Accumulated amortization of intangibles on property acquisitions and deferred leasing costs

 

 

221,646

 

 

 

215,925

 

Accumulated amortization of intangibles on property acquisitions and deferred leasing costs included in assets held for sale

 

 

 

 

 

4,547

 

COPT’s share of liabilities of unconsolidated real estate JVs

 

 

27,272

 

 

 

27,312

 

COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs

 

 

5,495

 

 

 

3,744

 

Less: Property - operating lease liabilities

 

 

(29,088

)

 

 

(29,342

)

Less: Cash and cash equivalents

 

 

(12,643

)

 

 

(13,262

)

Less: COPT’s share of cash of unconsolidated real estate JVs

 

 

(547

)

 

 

(434

)

Adjusted book

 

$

5,726,777

 

 

$

5,705,850

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(in thousands)

 

 

 

September 30,
2022

 

December 31,
2021

 

September 30,
2021

Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development

 

 

 

 

 

 

Debt, per balance sheet

 

$

2,269,834

 

 

$

2,272,304

 

 

$

2,159,732

 

Net discounts and deferred financing costs

 

 

22,984

 

 

 

25,982

 

 

 

22,941

 

COPT’s share of unconsolidated JV gross debt

 

 

26,250

 

 

 

26,250

 

 

 

26,250

 

Gross debt

 

$

2,319,068

 

 

$

2,324,536

 

 

$

2,208,923

 

Less: Cash and cash equivalents

 

 

(12,643

)

 

 

(13,262

)

 

 

(14,570

)

Less: COPT’s share of cash of unconsolidated real estate JVs

 

 

(547

)

 

 

(434

)

 

 

(530

)

Net debt

 

$

2,305,878

 

 

$

2,310,840

 

 

$

2,193,823

 

Costs incurred on fully-leased development properties

 

 

(275,359

)

 

 

(162,884

)

 

 

(119,981

)

Net debt adjusted for fully-leased development

 

$

2,030,519

 

 

$

2,147,956

 

 

$

2,073,842

 

 

 

 

 

 

 

 

Net debt

 

$

2,305,878

 

 

$

2,310,840

 

 

$

2,193,823

 

Debt pay down from Wholesale Data Center sale proceeds

 

 

N/A

 

 

 

(216,000

)

 

 

N/A

 

Pro forma net debt

 

$

2,305,878

 

 

$

2,094,840

 

 

$

2,193,823

 

Costs incurred on fully-leased development properties

 

 

(275,359

)

 

 

(162,884

)

 

 

(119,981

)

Pro forma net debt adjusted for fully-leased development

 

$

2,030,519

 

 

$

1,931,956

 

 

$

2,073,842

 

 

IR Contact:
Michelle Layne
443-285-5452
michelle.layne@copt.com

Source: Corporate Office Properties Trust