COPT Reports Third Quarter 2020 Results
3Q20 Results Outperform High-End of Guidance; Increase Full Year Guidance
COVID-19 Impact on Operations Remain Minimal; 3Q20 Rent Collections Continue to Exceed 99.5%
FFO per share, as adjusted for comparability, of $0.54 in 3Q Exceeded High-End of Guidance by 1-Cent
Same-Property Cash NOI change of (0.2%) in 3Q20 was at High-End of Guidance
Core Portfolio 94.0% Occupied & 94.6% Leased
1.2 Million SF of 99% Leased Developments Placed in Service During First Nine Months of 2020
Raising Full-Year Guidance for FFO per Share, as Adjusted for Comparability, by 2-Cents at the Mid-Point, to $2.09
Solid Leasing Volumes
Total Leasing of 1.1 Million SF in 3Q included 244,000 SF of Development Leasing and 61,000 SF of Vacancy Leasing
Continued Strong Tenant Retention of 89% in 3Q; 84% for First Nine Months of 2020
1.6 Million SF Under Active Development are 84% Leased
COLUMBIA, Md.--(BUSINESS WIRE)-- Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced financial and operating results for the third quarter ended September 30, 2020.
Management Comments
Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Third quarter FFO per share exceeded the high-end of our guidance, marking the third consecutive quarter of outperformance. Solid demand throughout our Defense/IT Locations continued to support strong development leasing volumes, and tenant retention remains on-track to set a 20-year record. We are in the process of selling interests in data center shell properties to a joint venture with an institutional partner. We anticipate completing two transactions that are expected to raise approximately $165 million of equity proceeds, which would reduce our year-end debt-to-EBITDA ratio to between 6.2x and 6.4x.” He continued, “The Company continues to meet or exceed its 2020 plan objectives largely unimpeded by restrictions, shutdowns, or tenant credit issues related to the pandemic, and is raising the mid-point of 2020 guidance for FFO per share, as adjusted for comparability, by 2-cents, to $2.09. The nearly 1.8 million square feet of fully leased development projects we have or will place in service this year position the Company to generate FFO growth of 3-to-6 percent in 2021.”
Financial Highlights
3rd Quarter Financial Results:
- Diluted earnings (loss) per share (“EPS”) was ($0.29) for the quarter ended September 30, 2020 as compared to $0.19 for the third quarter of 2019.
- Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, was $0.04 for the third quarter of 2020 as compared to $0.51 for third quarter 2019 results.
- FFOPS as adjusted for comparability of $0.54 in the third quarter of 2020 was 5.9% higher than the $0.51 reported for the third quarter of 2019.
Operating Performance Highlights
Operating Portfolio Summary:
- At September 30, 2020, the Company’s core portfolio of 174 operating office and data center shell properties was 94.0% occupied and 94.6% leased.
- During the quarter, the Company placed into service 599,000 square feet that were 100% leased, bringing the total for the year to 1.2 million square feet placed in service that were 99% leased.
Same-Property Performance:
- At September 30, 2020, COPT’s same-property portfolio of 152 buildings was 92.5% occupied and 93.2% leased.
- For the quarter and nine months ended September 30, 2020, the Company’s same-property cash NOI decreased 0.2% and increased 2.1%, respectively, over the prior year’s comparable periods.
Leasing:
- Total Square Feet Leased: For the quarter ended September 30, 2020, the Company leased 1.1 million total square feet, including 841,000 square feet of renewals, 244,000 square feet in development projects, and 61,000 square feet of new leases on vacant space.
For the nine months ended September 30, 2020, the Company executed 2.7 million square feet of total leasing, including 1.9 million square feet of renewals, 520,000 square feet of development leasing, and 274,000 square feet of vacancy leasing.
- Renewal Rates: During the quarter and nine months ended September 30, 2020, the Company respectively renewed 89.0% and 84.3% of total expiring square feet and is on-track to set a 20-year record for tenant retention.
- Cash Rent Spreads & Average Escalations on Renewing Leases: For the quarter and nine months ended September 30, 2020, cash rents on renewed space decreased 2.0%. For the same time periods, annual escalations on renewing leases averaged 2.4%.
- Lease Terms: In the third quarter, lease terms averaged 3.2 years on renewing leases, 11.8 years on development leasing, and 6.6 years on new leasing of vacant space. For the nine months, lease terms averaged 4.2 years on renewing leases, 14.2 years on development leasing, and 6.6 years on vacancy leasing.
Investment Activity Highlights
- Development Pipeline: As of October 7, 2020, the Company’s development pipeline consisted of 11 properties and expansion of one fully operational property totaling 1.6 million square feet that were 84% leased. These projects have a total estimated cost of $650.9 million, of which $410.1 million had been incurred as of September 30, 2020.
Balance Sheet and Capital Transaction Highlights
- As of September 30, 2020, the Company’s net debt plus preferred equity to adjusted book ratio was 41.1% and its net debt plus preferred equity to in-place adjusted EBITDA ratio was 6.8x. For the quarter ended September 30, 2020, the Company’s adjusted EBITDA fixed charge coverage ratio was 3.9x.
- As of September 30, 2020, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.55% with a weighted average maturity of 3.3 years; additionally, 94.0% of the Company’s debt was subject to fixed interest rates.
- During the quarter the Company issued $400 million of 2.25% senior unsecured notes, the proceeds from which were used to complete the tender offer for and subsequent redemption of all of its remaining $300 million of 3.7% senior unsecured notes due in 2021. The redemption was completed on October 19, 2020.
2020 Guidance
Management is increasing its prior full-year guidance ranges from $0.48-$0.52 for EPS to a new range of $0.77-$0.79. Management is also increasing its full-year guidance ranges for FFOPS per Nareit and FFOPS, as adjusted for comparability, to $1.44-$1.46 and $2.08-$2.10, respectively.
For the fourth quarter ending December 31, 2020, management is increasing its guidance for EPS from $0.43-$0.45 to a new range of $0.63-$0.65, lowering its existing guidance for FFOPS, per Nareit, to $0.48-$0.50, and affirming its existing guidance range of $0.52-$0.54 for FFOPS, as adjusted for comparability. Reconciliations of projected diluted EPS to projected FFOPS are as follows:
| Table 1: Reconciliation of EPS to FFOPS, per Nareit and | Quarter ending | Year ending | ||||||||||||||
| As Adjusted for Comparability | December 31, 2020 | December 31, 2020 | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| EPS |
$ |
0.63 |
|
$ |
0.65 |
|
$ |
0.77 |
|
$ |
0.79 |
|
||||
| Real estate-related depreciation and amortization |
|
0.36 |
|
|
0.36 |
|
|
1.27 |
|
|
1.27 |
|
||||
| Gain on sales of real estate |
|
(0.51 |
) |
|
(0.51 |
) |
|
(0.51 |
) |
|
(0.51 |
) |
||||
| Impairment losses |
|
- |
|
|
- |
|
|
0.01 |
|
|
0.01 |
|
||||
| FFO allocation to other noncontrolling interests resulting from capital event |
|
- |
|
|
- |
|
|
(0.10 |
) |
|
(0.10 |
) |
||||
| FFOPS, Nareit definition |
|
0.48 |
|
|
0.50 |
|
|
1.44 |
|
|
1.46 |
|
||||
| FFO allocation to other noncontrolling interests resulting from capital event |
|
- |
|
|
- |
|
|
0.10 |
|
|
0.10 |
|
||||
| Loss on interest rate derivatives and early extinguishment of debt |
|
0.04 |
|
|
0.04 |
|
|
0.54 |
|
|
0.54 |
|
||||
| FFOPS, as adjusted for comparability |
$ |
0.52 |
|
$ |
0.54 |
|
$ |
2.08 |
|
$ |
2.10 |
|
||||
Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its third quarter 2020 conference call, the details of which are provided below. The accompanying slide presentation can be viewed on and downloaded from the ‘Latest Updates’ section of COPT’s Investors website: https://investors.copt.com/
Conference Call Information
Management will discuss third quarter 2020 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:
|
Conference Call Date: |
Friday, October 30, 2020 |
||
|
Time: |
12:00 p.m. Eastern Time |
||
|
Telephone Number: (within the U.S.) |
855-463-9057 |
||
|
Telephone Number: (outside the U.S.) |
661-378-9894 |
||
|
Passcode: |
8968029 |
The conference call will also be available via live webcast in the ‘Latest Updates’ section of COPT’s Investors website: https://investors.copt.com/
Replay Information
A replay of the conference call will be immediately available via webcast on the Investors website. Additionally, a telephonic replay of this call will be available beginning at 3:00 p.m. Eastern Time on Friday, October 30, through 2:00 p.m. Eastern Time on Friday, November 13. To access the replay within the United States, please call 855-859-2056; to access it from outside the United States, please call 404-537-3406. In either case, use passcode 8968029.
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 it 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, 2020, the Company derived 88% of its core portfolio annualized rental revenue from Defense/IT Locations and 12% from its Regional Office Properties. As of the same date and including 15 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 174 office and data center shell properties encompassed 20.2 million square feet and was 94.6% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts that was 86.7% 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, 2019 and subsequent Quarterly Reports on Form 10-Q.
Category: Quarterly Results
Source: Corporate Office Properties Trust
|
Corporate Office Properties Trust |
|||||||||||||||
|
Summary Financial Data |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Revenues |
|
|
|
|
|
|
|
||||||||
|
Revenues from real estate operations |
$ |
134,443 |
|
|
$ |
130,734 |
|
|
$ |
399,097 |
|
|
$ |
395,495 |
|
|
Construction contract and other service revenues |
20,323 |
|
|
28,697 |
|
|
46,240 |
|
|
87,946 |
|
||||
|
Total revenues |
154,766 |
|
|
159,431 |
|
|
445,337 |
|
|
483,441 |
|
||||
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
|
Property operating expenses |
51,552 |
|
|
49,714 |
|
|
151,755 |
|
|
147,045 |
|
||||
|
Depreciation and amortization associated with real estate operations |
35,332 |
|
|
34,692 |
|
|
101,540 |
|
|
104,290 |
|
||||
|
Construction contract and other service expenses |
19,220 |
|
|
27,802 |
|
|
44,052 |
|
|
85,130 |
|
||||
|
Impairment losses |
1,530 |
|
|
327 |
|
|
1,530 |
|
|
327 |
|
||||
|
General and administrative expenses |
5,558 |
|
|
6,105 |
|
|
17,372 |
|
|
20,474 |
|
||||
|
Leasing expenses |
1,909 |
|
|
1,824 |
|
|
5,739 |
|
|
5,592 |
|
||||
|
Business development expenses and land carry costs |
1,094 |
|
|
964 |
|
|
3,474 |
|
|
2,947 |
|
||||
|
Total operating expenses |
116,195 |
|
|
121,428 |
|
|
325,462 |
|
|
365,805 |
|
||||
|
Interest expense |
(17,152) |
|
|
(17,126) |
|
|
(50,789) |
|
|
(54,275) |
|
||||
|
Interest and other income |
1,746 |
|
|
1,842 |
|
|
5,233 |
|
|
5,977 |
|
||||
|
Credit loss recoveries |
1,465 |
|
|
— |
|
|
161 |
|
|
— |
|
||||
|
Gain on sales of real estate |
— |
|
|
— |
|
|
5 |
|
|
84,469 |
|
||||
|
Loss on early extinguishment of debt |
(3,237) |
|
|
— |
|
|
(3,237) |
|
|
— |
|
||||
|
Loss on interest rate derivatives |
(53,196) |
|
|
— |
|
|
(53,196) |
|
|
— |
|
||||
|
(Loss) income before equity in income of unconsolidated entities and income taxes |
(31,803) |
|
|
22,719 |
|
|
18,052 |
|
|
153,807 |
|
||||
|
Equity in income of unconsolidated entities |
477 |
|
|
396 |
|
|
1,372 |
|
|
1,207 |
|
||||
|
Income tax (expense) benefit |
(16) |
|
|
131 |
|
|
(95) |
|
|
113 |
|
||||
|
Net (loss) income |
(31,342) |
|
|
23,246 |
|
|
19,329 |
|
|
155,127 |
|
||||
|
Net loss (income) attributable to noncontrolling interests: |
|
|
|
|
|
|
|
||||||||
|
Common units in the Operating Partnership (“OP”) |
386 |
|
|
(267) |
|
|
(185) |
|
|
(1,863) |
|
||||
|
Preferred units in the OP |
(77) |
|
|
(157) |
|
|
(231) |
|
|
(487) |
|
||||
|
Other consolidated entities |
(812) |
|
|
(1,565) |
|
|
(3,207) |
|
|
(3,870) |
|
||||
|
Net (loss) income attributable to COPT common shareholders |
$ |
(31,845) |
|
|
$ |
21,257 |
|
|
$ |
15,706 |
|
|
$ |
148,907 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per share (“EPS”) computation: |
|
|
|
|
|
|
|
||||||||
|
Numerator for diluted EPS: |
|
|
|
|
|
|
|
||||||||
|
Net (loss) income attributable to COPT common shareholders |
$ |
(31,845) |
|
|
$ |
21,257 |
|
|
$ |
15,706 |
|
|
$ |
148,907 |
|
|
Redeemable noncontrolling interests |
— |
|
|
— |
|
|
— |
|
|
100 |
|
||||
|
Amount allocable to share-based compensation awards |
(145) |
|
|
(118) |
|
|
(359) |
|
|
(469) |
|
||||
|
Numerator for diluted EPS |
$ |
(31,990) |
|
|
$ |
21,139 |
|
|
$ |
15,347 |
|
|
$ |
148,538 |
|
|
Denominator: |
|
|
|
|
|
|
|
||||||||
|
Weighted average common shares - basic |
111,811 |
|
|
111,582 |
|
|
111,778 |
|
|
111,036 |
|
||||
|
Dilutive effect of share-based compensation awards |
— |
|
|
361 |
|
|
278 |
|
|
313 |
|
||||
|
Dilutive effect of redeemable noncontrolling interests |
— |
|
|
— |
|
|
— |
|
|
123 |
|
||||
|
Weighted average common shares - diluted |
111,811 |
|
|
111,943 |
|
|
112,056 |
|
|
111,472 |
|
||||
|
Diluted EPS |
$ |
(0.29) |
|
|
$ |
0.19 |
|
|
$ |
0.14 |
|
|
$ |
1.33 |
|
|
Corporate Office Properties Trust |
|||||||||||||||
|
Summary Financial Data |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Net (loss) income |
$ |
(31,342) |
|
|
$ |
23,246 |
|
|
$ |
19,329 |
|
|
$ |
155,127 |
|
|
Real estate-related depreciation and amortization |
35,332 |
|
|
34,692 |
|
|
101,540 |
|
|
104,290 |
|
||||
|
Impairment losses on real estate |
1,530 |
|
|
327 |
|
|
1,530 |
|
|
327 |
|
||||
|
Gain on sales of real estate |
— |
|
|
— |
|
|
(5) |
|
|
(84,469) |
|
||||
|
Depreciation and amortization on unconsolidated real estate JVs |
819 |
|
|
790 |
|
|
2,455 |
|
|
1,922 |
|
||||
|
Funds from operations (“FFO”) |
6,339 |
|
|
59,055 |
|
|
124,849 |
|
|
177,197 |
|
||||
|
Noncontrolling interests - preferred units in the OP |
(77) |
|
|
(157) |
|
|
(231) |
|
|
(487) |
|
||||
|
FFO allocable to other noncontrolling interests |
(1,074) |
|
|
(1,429) |
|
|
(14,614) |
|
|
(3,588) |
|
||||
|
Basic FFO allocable to share-based compensation awards |
(119) |
|
|
(248) |
|
|
(449) |
|
|
(662) |
|
||||
|
Basic FFO available to common share and common unit holders (“Basic FFO”) |
5,069 |
|
|
57,221 |
|
|
109,555 |
|
|
172,460 |
|
||||
|
Redeemable noncontrolling interests |
— |
|
|
34 |
|
|
103 |
|
|
100 |
|
||||
|
Diluted FFO available to common share and common unit holders (“Diluted FFO”) |
5,069 |
|
|
57,255 |
|
|
109,658 |
|
|
172,560 |
|
||||
|
Loss on early extinguishment of debt |
3,237 |
|
|
— |
|
|
3,237 |
|
|
— |
|
||||
|
Loss on interest rate derivatives |
53,196 |
|
|
— |
|
|
53,196 |
|
|
— |
|
||||
|
Demolition costs on redevelopment and nonrecurring improvements |
11 |
|
|
— |
|
|
63 |
|
|
44 |
|
||||
|
Executive transition costs |
— |
|
|
— |
|
|
— |
|
|
4 |
|
||||
|
Non-comparable professional and legal expenses |
— |
|
|
175 |
|
|
— |
|
|
486 |
|
||||
|
Dilutive preferred units in the OP |
77 |
|
|
— |
|
|
231 |
|
|
— |
|
||||
|
FFO allocation to other noncontrolling interests resulting from capital event |
— |
|
|
— |
|
|
11,090 |
|
|
— |
|
||||
|
Diluted FFO comparability adjustments for redeemable noncontrolling interests |
34 |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Diluted FFO comparability adjustments allocable to share-based compensation awards |
(139) |
|
|
— |
|
|
(307) |
|
|
(2) |
|
||||
|
Diluted FFO available to common share and common unit holders, as adjusted for comparability |
61,485 |
|
|
57,430 |
|
|
177,168 |
|
|
173,092 |
|
||||
|
Straight line rent adjustments and lease incentive amortization |
(1,009) |
|
|
(515) |
|
|
662 |
|
|
(1,131) |
|
||||
|
Amortization of intangibles included in net operating income |
(39) |
|
|
(59) |
|
|
(186) |
|
|
(47) |
|
||||
|
Share-based compensation, net of amounts capitalized |
1,727 |
|
|
1,697 |
|
|
4,754 |
|
|
4,993 |
|
||||
|
Amortization of deferred financing costs |
658 |
|
|
538 |
|
|
1,875 |
|
|
1,595 |
|
||||
|
Amortization of net debt discounts, net of amounts capitalized |
453 |
|
|
377 |
|
|
1,229 |
|
|
1,121 |
|
||||
|
Accum. other comprehensive loss on derivatives amortized to expense |
— |
|
|
12 |
|
|
— |
|
|
79 |
|
||||
|
Replacement capital expenditures |
(13,085) |
|
|
(16,752) |
|
|
(46,971) |
|
|
(43,927) |
|
||||
|
Other diluted AFFO adjustments associated with real estate JVs |
150 |
|
|
66 |
|
|
(6) |
|
|
280 |
|
||||
|
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) |
$ |
50,340 |
|
|
$ |
42,794 |
|
|
$ |
138,525 |
|
|
$ |
136,055 |
|
|
Diluted FFO per share |
$ |
0.04 |
|
|
$ |
0.51 |
|
|
$ |
0.97 |
|
|
$ |
1.53 |
|
|
Diluted FFO per share, as adjusted for comparability |
$ |
0.54 |
|
|
$ |
0.51 |
|
|
$ |
1.56 |
|
|
$ |
1.53 |
|
|
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,
|
|
December 31,
|
||||||||||||||
|
Balance Sheet Data |
|
|
|
||||||||||||||
|
Properties, net of accumulated depreciation |
$ |
3,586,938 |
|
|
$ |
3,340,886 |
|
||||||||||
|
Total assets |
4,120,189 |
|
|
3,854,453 |
|
||||||||||||
|
Debt, per balance sheet |
2,181,551 |
|
|
1,831,139 |
|
||||||||||||
|
Total liabilities |
2,447,031 |
|
|
2,105,777 |
|
||||||||||||
|
Redeemable noncontrolling interests |
23,522 |
|
|
29,431 |
|
||||||||||||
|
Equity |
1,649,636 |
|
|
1,719,245 |
|
||||||||||||
|
Net debt to adjusted book |
41.0 |
% |
|
36.8 |
% |
||||||||||||
|
|
|
|
|
||||||||||||||
|
Core Portfolio Data (as of period end) (1) |
|
|
|
||||||||||||||
|
Number of operating properties |
174 |
|
|
168 |
|
||||||||||||
|
Total operational square feet (in thousands) |
20,232 |
|
|
19,016 |
|
||||||||||||
|
% Occupied |
94.0 |
% |
|
93.1 |
% |
||||||||||||
|
% Leased |
94.6 |
% |
|
94.6 |
% |
||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
||||||||||
|
Payout ratios |
|
|
|
|
|
|
|
|
|||||||||
|
Diluted FFO |
613.6 |
% |
|
54.2 |
% |
|
85.1 |
% |
|
54.0 |
% |
|
|||||
|
Diluted FFO, as adjusted for comparability |
50.7 |
% |
|
54.1 |
% |
|
52.8 |
% |
|
53.8 |
% |
|
|||||
|
Diluted AFFO |
61.9 |
% |
|
72.6 |
% |
|
67.5 |
% |
|
68.5 |
% |
|
|||||
|
Adjusted EBITDA fixed charge coverage ratio |
3.9x |
|
|
3.7x |
|
|
3.8x |
|
|
3.7x |
|
|
|||||
|
Net debt to in-place adjusted EBITDA ratio (2) |
6.8x |
|
|
6.1x |
|
|
N/A |
|
N/A |
|
|||||||
|
Net debt plus preferred equity to in-place adjusted EBITDA ratio (3) |
6.8x |
|
|
6.1x |
|
|
N/A |
|
N/A |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Reconciliation of denominators for per share measures |
|
|
|
|
|
|
|
||||||||||
|
Denominator for diluted EPS |
111,811 |
|
|
111,943 |
|
|
112,056 |
|
|
111,472 |
|
|
|||||
|
Weighted average common units |
1,240 |
|
|
1,312 |
|
|
1,235 |
|
|
1,323 |
|
|
|||||
|
Redeemable noncontrolling interests |
— |
|
|
109 |
|
|
125 |
|
|
— |
|
|
|||||
|
Anti-dilutive EPS effect of share-based compensation awards |
274 |
|
|
— |
|
|
— |
|
|
— |
|
|
|||||
|
Denominator for diluted FFO per share |
113,325 |
|
|
113,364 |
|
|
113,416 |
|
|
112,795 |
|
|
|||||
|
Dilutive convertible preferred units |
176 |
|
|
— |
|
|
176 |
|
|
— |
|
|
|||||
|
Redeemable noncontrolling interests |
109 |
|
|
— |
|
|
— |
|
|
— |
|
|
|||||
|
Denominator for diluted FFO per share, as adjusted for comparability |
113,610 |
|
|
113,364 |
|
|
113,592 |
|
|
112,795 |
|
|
|||||
|
(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 plus the total liquidation preference of preferred equity 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) |
|||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Reconciliation of common share dividends to dividends and distributions for payout ratios |
|
|
|
|
|
|
|
||||||||
|
Common share dividends - unrestricted shares and deferred shares |
$ |
30,763 |
|
|
$ |
30,721 |
|
|
$ |
92,278 |
|
|
$ |
92,099 |
|
|
Common unit distributions - unrestricted units |
341 |
|
|
338 |
|
|
1,021 |
|
|
1,068 |
|
||||
|
Dividends and distributions for diluted FFO payout ratio |
31,104 |
|
|
31,059 |
|
|
93,299 |
|
|
93,167 |
|
||||
|
Distributions on dilutive preferred units |
77 |
|
|
— |
|
|
231 |
|
|
— |
|
||||
|
Dividends and distributions for other payout ratios |
$ |
31,181 |
|
|
$ |
31,059 |
|
|
$ |
93,530 |
|
|
$ |
93,167 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
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 (loss) income |
$ |
(31,342) |
|
|
$ |
23,246 |
|
|
$ |
19,329 |
|
|
$ |
155,127 |
|
|
Interest expense |
17,152 |
|
|
17,126 |
|
|
50,789 |
|
|
54,275 |
|
||||
|
Income tax expense (benefit) |
16 |
|
|
(131) |
|
|
95 |
|
|
(113) |
|
||||
|
Real estate-related depreciation and amortization |
35,332 |
|
|
34,692 |
|
|
101,540 |
|
|
104,290 |
|
||||
|
Impairment losses on real estate |
1,530 |
|
|
327 |
|
|
1,530 |
|
|
327 |
|
||||
|
Other depreciation and amortization |
457 |
|
|
467 |
|
|
1,324 |
|
|
1,396 |
|
||||
|
Gain on sales of real estate |
— |
|
|
— |
|
|
(5) |
|
|
(84,469) |
|
||||
|
Adjustments from unconsolidated real estate JVs |
1,274 |
|
|
1,202 |
|
|
3,814 |
|
|
2,859 |
|
||||
|
EBITDAre |
24,419 |
|
|
76,929 |
|
|
178,416 |
|
|
233,692 |
|
||||
|
Loss on early extinguishment of debt |
3,237 |
|
|
— |
|
|
3,237 |
|
|
— |
|
||||
|
Loss on interest rate derivatives |
53,196 |
|
|
— |
|
|
53,196 |
|
|
— |
|
||||
|
Net loss (gain) on other investments |
250 |
|
|
— |
|
|
252 |
|
|
(400) |
|
||||
|
Credit loss recoveries |
(1,465) |
|
|
— |
|
|
(161) |
|
|
— |
|
||||
|
Business development expenses |
414 |
|
|
419 |
|
|
1,630 |
|
|
1,427 |
|
||||
|
Non-comparable professional and legal expenses |
— |
|
|
175 |
|
|
— |
|
|
486 |
|
||||
|
Demolition costs on redevelopment and nonrecurring improvements |
11 |
|
|
— |
|
|
63 |
|
|
44 |
|
||||
|
Executive transition costs |
— |
|
|
— |
|
|
— |
|
|
4 |
|
||||
|
Adjusted EBITDA |
80,062 |
|
|
77,523 |
|
|
$ |
236,633 |
|
|
$ |
235,253 |
|
||
|
Proforma net operating income adjustment for property changes within period |
1,631 |
|
|
— |
|
|
|
|
|
||||||
|
Change in collectability of deferred rental revenue |
224 |
|
|
— |
|
|
|
|
|
||||||
|
In-place adjusted EBITDA |
$ |
81,917 |
|
|
$ |
77,523 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Reconciliation of interest expense to the denominators for fixed charge coverage-Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
|
Interest expense |
$ |
17,152 |
|
|
$ |
17,126 |
|
|
$ |
50,789 |
|
|
$ |
54,275 |
|
|
Less: Amortization of deferred financing costs |
(658) |
|
|
(538) |
|
|
(1,875) |
|
|
(1,595) |
|
||||
|
Less: Amortization of net debt discounts, net of amounts capitalized |
(453) |
|
|
(377) |
|
|
(1,229) |
|
|
(1,121) |
|
||||
|
Less: Accum. other comprehensive loss on derivatives amortized to expense |
— |
|
|
(12) |
|
|
— |
|
|
(79) |
|
||||
|
COPT’s share of interest expense of unconsolidated real estate JVs, excluding deferred financing costs |
444 |
|
|
403 |
|
|
1,327 |
|
|
916 |
|
||||
|
Scheduled principal amortization |
1,033 |
|
|
1,107 |
|
|
3,077 |
|
|
3,300 |
|
||||
|
Capitalized interest |
2,908 |
|
|
2,927 |
|
|
9,440 |
|
|
7,319 |
|
||||
|
Preferred unit distributions |
77 |
|
|
157 |
|
|
231 |
|
|
487 |
|
||||
|
Denominator for fixed charge coverage-Adjusted EBITDA |
$ |
20,503 |
|
|
$ |
20,793 |
|
|
$ |
61,760 |
|
|
$ |
63,502 |
|
|
Corporate Office Properties Trust |
|||||||||||||||
|
Summary Financial Data |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures |
|
|
|
|
|
|
|
||||||||
|
Tenant improvements and incentives |
$ |
6,950 |
|
|
$ |
10,880 |
|
|
$ |
27,177 |
|
|
$ |
26,600 |
|
|
Building improvements |
10,400 |
|
|
8,908 |
|
|
26,537 |
|
|
17,772 |
|
||||
|
Leasing costs |
1,934 |
|
|
2,722 |
|
|
6,918 |
|
|
8,665 |
|
||||
|
Net additions to (exclusions from) tenant improvements and incentives |
(943) |
|
|
(2,156) |
|
|
1,412 |
|
|
(1,866) |
|
||||
|
Excluded building improvements and leasing costs |
(5,256) |
|
|
(3,602) |
|
|
(15,073) |
|
|
(7,244) |
|
||||
|
Replacement capital expenditures |
$ |
13,085 |
|
|
$ |
16,752 |
|
|
$ |
46,971 |
|
|
$ |
43,927 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Same Properties cash NOI |
$ |
73,910 |
|
|
$ |
74,071 |
|
|
$ |
224,709 |
|
|
$ |
220,063 |
|
|
Straight line rent adjustments and lease incentive amortization |
(1,214) |
|
|
(572) |
|
|
(3,294) |
|
|
(587) |
|
||||
|
Amortization of acquired above- and below-market rents |
98 |
|
|
82 |
|
|
291 |
|
|
115 |
|
||||
|
Amortization of intangibles and other assets to property operating expenses |
(23) |
|
|
(23) |
|
|
(69) |
|
|
(69) |
|
||||
|
Lease termination fees, gross |
609 |
|
|
823 |
|
|
1,052 |
|
|
1,629 |
|
||||
|
Tenant funded landlord assets and lease incentives |
342 |
|
|
526 |
|
|
564 |
|
|
1,452 |
|
||||
|
Cash NOI adjustments in unconsolidated real estate JV |
48 |
|
|
42 |
|
|
111 |
|
|
147 |
|
||||
|
Same Properties NOI |
$ |
73,770 |
|
|
$ |
74,949 |
|
|
$ |
223,364 |
|
|
$ |
222,750 |
|
|
|
September 30,
|
|
December 31,
|
||||
|
Reconciliation of total assets to adjusted book |
|
|
|
||||
|
Total assets |
$ |
4,120,189 |
|
|
$ |
3,854,453 |
|
|
Accumulated depreciation |
1,095,441 |
|
|
1,007,120 |
|
||
|
Accumulated amortization of real estate intangibles and deferred leasing costs |
215,651 |
|
|
212,547 |
|
||
|
COPT’s share of liabilities of unconsolidated real estate JVs |
50,957 |
|
|
50,734 |
|
||
|
COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs |
10,640 |
|
|
8,164 |
|
||
|
Less: Property - operating lease liabilities |
(26,382) |
|
|
(17,317) |
|
||
|
Less: Property - finance lease liabilities |
(28) |
|
|
(702) |
|
||
|
Less: Cash and cash equivalents |
(11,458) |
|
|
(14,733) |
|
||
|
Less: COPT’s share of cash of unconsolidated real estate JVs |
(538) |
|
|
(498) |
|
||
|
Adjusted book |
$ |
5,454,472 |
|
|
$ |
5,099,768 |
|
|
|
|
|
|
||||
|
Reconciliation of debt outstanding to net debt and net debt plus preferred equity |
|
|
|
||||
|
Debt outstanding (excluding net debt discounts and deferred financing costs) |
$ |
2,247,523 |
|
|
1,893,057 |
|
|
|
Less: Cash and cash equivalents |
(11,458) |
|
|
(14,733) |
|
||
|
Less: COPT’s share of cash of unconsolidated real estate JVs |
(538) |
|
|
(498) |
|
||
|
Net debt |
$ |
2,235,527 |
|
|
$ |
1,877,826 |
|
|
Preferred equity |
8,800 |
|
|
8,800 |
|
||
|
Net debt plus preferred equity |
$ |
2,244,327 |
|
|
$ |
1,886,626 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006224/en/
IR Contacts:
Stephanie Krewson-Kelly
443-285-5453
stephanie.kelly@copt.com
Michelle Layne
443-285-5452
michelle.layne@copt.com
Source: Corporate Office Properties Trust
Released October 29, 2020