COPT Reports Fourth Quarter and Full Year 2019 Results
EPS Exceeded Guidance; FFO per Share Achieved Mid-Point of Updated Guidance
Same-Property Cash NOI Growth of 6.2% in 4Q19 and 3.9% for the Full Year Exceeded Guidance
Core Portfolio 93.1% Occupied & 94.6% Leased
1.2 Million SF of 100% Leased Developments Placed into Service During 2019
2.3 Million SF Under Development are 79% Leased
Record Leasing Volumes
Total Leasing of 659,000 SF in 4Q and Record Total Leasing of 4.9 Million SF for the Full Year - 600,000 SF Higher than Prior Record Set in 2010
Development Leasing of 158,000 SF in 4Q19; Record 2.2 Million SF for the Year
U.S. Government Total New Leasing Volume of 586,000 SF During 2019, Including 164,000 SF of Vacancy Leasing
Strong Vacancy Leasing of 784,000 SF During the Year
Strong Tenant Retention of 84% in 4Q19 Exceeded Guidance; 77% for the Year Met Expectations
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, 2019.
Management Comments
Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Fourth quarter and full year FFO per share met the mid-points of our updated guidance ranges, and strong demand throughout our Defense/IT Locations translated into record leasing for new developments, strong vacancy leasing, and near-record leasing with the U.S. Government. Our 2.2 million square feet of development leasing exceeded our prior annual record set in 2012 by 1 million square feet, and we executed 586,000 square feet of development and vacancy leasing with the U.S. Government, our second-best year ever.” He continued, “We believe that this strong leasing achievement, combined with the $357 million of equity raised and the 1.2 million square feet of 100% leased developments placed into service during 2019, position our Company to deliver 1.5%-3.5% FFO per share growth in 2020, and robust FFO growth in 2021.”
Financial Highlights
4th Quarter Financial Results:
- Diluted earnings per share (“EPS”) was $0.38 for the quarter ended December 31, 2019 as compared to $0.16 for the fourth quarter of 2018.
- Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, of $0.49 for the fourth quarter of 2019 equaled fourth quarter 2018 results.
- FFOPS, as adjusted for comparability, was $0.50 for the fourth quarter of 2019, equal to fourth quarter 2018 results.
Full Year 2019 Financial Results:
- EPS for the year ended December 31, 2019 was $1.71, which included $105.2 million of gains on the sale of a 90% interest in nine data center shell properties during the year as compared to 2018 EPS of $0.69.
- Per Nareit’s definition, FFOPS for 2019 was $2.02 as compared to $1.99 for 2018.
- FFOPS, as adjusted for comparability, for 2019 was $2.03 as compared to $2.01 for 2018.
Adjustments for comparability encompass items such as demolition costs of redevelopment, executive transition costs, and non-comparable professional and legal expenses.
Operating Performance Highlights
Operating Portfolio Summary:
- At December 31, 2019, the Company’s core portfolio of 168 operating office and data center shell properties was 93.1% occupied and 94.6% leased.
- During the quarter and the year, the Company placed into service 375,000 and 1.2 million respective square feet that were 100% leased.
Same-Property Performance:
- At December 31, 2019, COPT’s same-property portfolio of 147 buildings was 91.9% occupied and 93.7% leased.
- For the quarter and year ended December 31, 2019, the Company’s same-property cash NOI increased 6.2% and 3.9%, respectively, over the prior year’s comparable periods.
Leasing:
-
Total Square Feet Leased: For the quarter ended December 31, 2019, the Company leased 659,000 total square feet, including 339,000 square feet of renewals, 162,000 square feet of new leases on vacant space, and 158,000 square feet in development projects.
For the year ended December 31, 2019, the Company leased 4.9 million total square feet, including 1.9 million square feet of renewals, 784,000 square feet of new leases on vacant space, and 2.2 million square feet in development projects.
- Renewal Rates: During the quarter and year ended December 31, 2019, the Company respectively renewed 84% and 77% of total expiring square feet.
- Cash Rent Spreads & Average Escalations on Renewing Leases: For the quarter and year ended December 31, 2019, cash rents on renewed space decreased 8.4% and 5.8%, respectively. For the same time periods, average annual escalations on renewing leases were 2.3% and 2.4%, respectively.
- Lease Terms: In the fourth quarter, lease terms averaged 6.1 years on renewing leases, 6.6 years on new leasing of vacant space, and 12.1 years on development leasing. For the year, lease terms averaged 4.1 years on renewing leases, 6.4 years on new leasing of vacant space, and 12.6 years on development leasing.
Investment Activity Highlights
Development & Redevelopment Projects:
- Development Pipeline: At January 31, 2020, the Company’s development pipeline consisted of 13 properties totaling 2.3 million square feet that were 79% leased. These projects have a total estimated cost of $683.4 million, of which $326.6 million has been incurred.
- Redevelopment: At December 31, 2019, one project was under redevelopment totaling 106,000 square feet that was 80% leased. The Company has invested $23.3 million of the $25.6 million anticipated total cost.
Balance Sheet and Capital Transaction Highlights
- As of December 31, 2019, the Company’s net debt plus preferred equity to adjusted book ratio was 37.0% and its net debt plus preferred equity to in-place adjusted EBITDA ratio was 6.1x. For the quarter and year ended December 31, 2019, the Company’s adjusted EBITDA fixed charge coverage ratio was 3.7x.
- As of December 31, 2019, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate was 4.07%; additionally, 87.8% of the Company’s debt was subject to fixed interest rates and the consolidated debt portfolio had a weighted average maturity of 3.5 years.
- During the quarter ended March 31, 2019, the Company issued the remaining 1.6 million common shares under its 2017 forward equity sale agreements for net proceeds of $46.5 million.
- During the year, the Company sold a 90% interest in nine single-tenant data center shell properties through the Blackstone Real Estate Income Trust, Inc. (“BREIT”)-COPT joint venture formed in June 2019. The Company received a total of $310.6 million of proceeds in 2019, plus an additional $20.1 million in net proceeds associated with the joint venture entering into non-recourse mortgage loans on the properties.
Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its fourth quarter and year end 2019 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 fourth quarter and year end 2019 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:
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Conference Call Date: |
Friday, February 7, 2020 |
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Time: |
12:00 p.m. Eastern Time |
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Telephone Number: (within the U.S.) |
855-463-9057 |
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Telephone Number: (outside the U.S.) |
661-378-9894 |
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Passcode: |
8794749 |
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, February 7, through 3:00 p.m. Eastern Time on Friday, February 21. 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 8794749.
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 December 31, 2019, 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 buildings owned through unconsolidated joint ventures, COPT’s core portfolio of 168 office and data center shell properties encompassed 19.0 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 76.9% 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, 2018 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.
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Corporate Office Properties Trust |
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Summary Financial Data |
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(unaudited) |
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(in thousands, except per share data) |
||||||||||||||||
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|
||||||||||||
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|
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For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
||||||||||||
|
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|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
Revenues |
|
|
|
|
|
|
|
|||||||||
|
Revenues from real estate operations |
$ |
131,968 |
|
|
$ |
130,825 |
|
|
$ |
527,463 |
|
|
$ |
517,253 |
|
|
|
Construction contract and other service revenues |
25,817 |
|
|
7,657 |
|
|
113,763 |
|
|
60,859 |
|
|||||
|
Total revenues |
157,785 |
|
|
138,482 |
|
|
641,226 |
|
|
578,112 |
|
|||||
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Operating expenses |
|
|
|
|
|
|
|
|||||||||
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Property operating expenses |
51,098 |
|
|
51,298 |
|
|
198,143 |
|
|
201,035 |
|
|||||
|
Depreciation and amortization associated with real estate operations |
32,779 |
|
|
36,219 |
|
|
137,069 |
|
|
137,116 |
|
|||||
|
Construction contract and other service expenses |
24,832 |
|
|
7,111 |
|
|
109,962 |
|
|
58,326 |
|
|||||
|
Impairment losses |
2 |
|
|
2,367 |
|
|
329 |
|
|
2,367 |
|
|||||
|
General and administrative expenses |
7,043 |
|
|
5,105 |
|
|
27,517 |
|
|
22,829 |
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|||||
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Leasing expenses |
2,293 |
|
|
1,976 |
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|
7,885 |
|
|
6,071 |
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|||||
|
Business development expenses and land carry costs |
1,292 |
|
|
1,425 |
|
|
4,239 |
|
|
5,840 |
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|||||
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Total operating expenses |
119,339 |
|
|
105,501 |
|
|
485,144 |
|
|
433,584 |
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|||||
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Interest expense |
(16,777 |
) |
|
(18,475 |
) |
|
(71,052 |
) |
|
(75,385 |
) |
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Interest and other income |
1,917 |
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|
74 |
|
|
7,894 |
|
|
4,358 |
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Gain on sales of real estate |
20,761 |
|
|
2,367 |
|
|
105,230 |
|
|
2,340 |
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|||||
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Loss on early extinguishment of debt |
— |
|
|
(258 |
) |
|
— |
|
|
(258 |
) |
|||||
|
Income before equity in income of unconsolidated entities and income taxes |
44,347 |
|
|
16,689 |
|
|
198,154 |
|
|
75,583 |
|
|||||
|
Equity in income of unconsolidated entities |
426 |
|
|
1,577 |
|
|
1,633 |
|
|
2,697 |
|
|||||
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Income tax benefit |
104 |
|
|
190 |
|
|
217 |
|
|
363 |
|
|||||
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Net income |
44,877 |
|
|
18,456 |
|
|
200,004 |
|
|
78,643 |
|
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Net income attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|||||||||
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Common units in the Operating Partnership (“OP”) |
(500 |
) |
|
(210 |
) |
|
(2,363 |
) |
|
(1,742 |
) |
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Preferred units in the OP |
(77 |
) |
|
(165 |
) |
|
(564 |
) |
|
(660 |
) |
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Other consolidated entities |
(1,515 |
) |
|
(1,061 |
) |
|
(5,385 |
) |
|
(3,940 |
) |
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Net income attributable to COPT common shareholders |
$ |
42,785 |
|
|
$ |
17,020 |
|
|
$ |
191,692 |
|
|
$ |
72,301 |
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|
|
|
|
|
|
|
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Earnings per share (“EPS”) computation: |
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Numerator for diluted EPS: |
|
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|
|
|
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|||||||||
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Net income attributable to COPT common shareholders |
$ |
42,785 |
|
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$ |
17,020 |
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$ |
191,692 |
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|
$ |
72,301 |
|
|
|
Redeemable noncontrolling interests |
33 |
|
|
— |
|
|
132 |
|
|
— |
|
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Amount allocable to share-based compensation awards |
(154 |
) |
|
(114 |
) |
|
(623 |
) |
|
(462 |
) |
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Numerator for diluted EPS |
$ |
42,664 |
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|
$ |
16,906 |
|
|
$ |
191,201 |
|
|
$ |
71,839 |
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|
|
Denominator: |
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|
|
|
|
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Weighted average common shares - basic |
111,670 |
|
|
108,528 |
|
|
111,196 |
|
|
103,946 |
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|||||
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Dilutive effect of share-based compensation awards |
293 |
|
|
45 |
|
|
308 |
|
|
134 |
|
|||||
|
Dilutive effect of redeemable noncontrolling interests |
108 |
|
|
— |
|
|
119 |
|
|
— |
|
|||||
|
Dilutive effect of forward equity sale agreements |
— |
|
|
— |
|
|
— |
|
|
45 |
|
|||||
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Weighted average common shares - diluted |
112,071 |
|
|
108,573 |
|
|
111,623 |
|
|
104,125 |
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Diluted EPS |
$ |
0.38 |
|
|
$ |
0.16 |
|
|
$ |
1.71 |
|
|
$ |
0.69 |
|
|
|
Corporate Office Properties Trust |
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Summary Financial Data |
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(unaudited) |
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(in thousands, except per share data) |
||||||||||||||||
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||||||||||||
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For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
||||||||||||
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
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Net income |
$ |
44,877 |
|
|
$ |
18,456 |
|
|
$ |
200,004 |
|
|
$ |
78,643 |
|
|
|
Real estate-related depreciation and amortization |
32,779 |
|
|
36,219 |
|
|
137,069 |
|
|
137,116 |
|
|||||
|
Impairment losses on real estate |
2 |
|
|
2,367 |
|
|
329 |
|
|
2,367 |
|
|||||
|
Gain on sales of real estate |
(20,761 |
) |
|
(2,367 |
) |
|
(105,230 |
) |
|
(2,340 |
) |
|||||
|
Depreciation and amortization on unconsolidated real estate JVs |
781 |
|
|
565 |
|
|
2,703 |
|
|
2,256 |
|
|||||
|
Funds from operations (“FFO”) |
57,678 |
|
|
55,240 |
|
|
234,875 |
|
|
218,042 |
|
|||||
|
Noncontrolling interests - preferred units in the OP |
(77 |
) |
|
(165 |
) |
|
(564 |
) |
|
(660 |
) |
|||||
|
FFO allocable to other noncontrolling interests |
(1,436 |
) |
|
(1,011 |
) |
|
(5,024 |
) |
|
(3,768 |
) |
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Basic and diluted FFO allocable to share-based compensation awards |
(243 |
) |
|
(200 |
) |
|
(905 |
) |
|
(851 |
) |
|||||
|
Basic FFO available to common share and common unit holders (“Basic FFO”) |
55,922 |
|
|
53,864 |
|
|
228,382 |
|
|
212,763 |
|
|||||
|
Distributions on dilutive preferred units in the OP |
77 |
|
|
— |
|
|
— |
|
|
— |
|
|||||
|
Redeemable noncontrolling interests |
33 |
|
|
331 |
|
|
132 |
|
|
1,540 |
|
|||||
|
Diluted FFO available to common share and common unit holders (“Diluted FFO”) |
56,032 |
|
|
54,195 |
|
|
228,514 |
|
|
214,303 |
|
|||||
|
Loss on early extinguishment of debt |
— |
|
|
258 |
|
|
— |
|
|
258 |
|
|||||
|
Demolition costs on redevelopment and nonrecurring improvements |
104 |
|
|
163 |
|
|
148 |
|
|
462 |
|
|||||
|
Executive transition costs |
— |
|
|
371 |
|
|
4 |
|
|
793 |
|
|||||
|
Non-comparable professional and legal expenses |
195 |
|
|
— |
|
|
681 |
|
|
— |
|
|||||
|
Diluted FFO comparability adjustments allocable to share-based compensation awards |
(1 |
) |
|
(13 |
) |
|
(3 |
) |
|
(16 |
) |
|||||
|
Diluted FFO available to common share and common unit holders, as adjusted for comparability |
56,330 |
|
|
54,974 |
|
|
229,344 |
|
|
215,800 |
|
|||||
|
Straight line rent adjustments and lease incentive amortization |
1,386 |
|
|
(46 |
) |
|
255 |
|
|
(1,487 |
) |
|||||
|
Amortization of intangibles included in net operating income |
(174 |
) |
|
153 |
|
|
(221 |
) |
|
893 |
|
|||||
|
Share-based compensation, net of amounts capitalized |
1,735 |
|
|
1,601 |
|
|
6,728 |
|
|
6,193 |
|
|||||
|
Amortization of deferred financing costs |
541 |
|
|
550 |
|
|
2,136 |
|
|
1,954 |
|
|||||
|
Amortization of net debt discounts, net of amounts capitalized |
382 |
|
|
365 |
|
|
1,503 |
|
|
1,439 |
|
|||||
|
Accum. other comprehensive loss on derivatives amortized to expense |
— |
|
|
34 |
|
|
79 |
|
|
135 |
|
|||||
|
Replacement capital expenditures |
(19,862 |
) |
|
(14,848 |
) |
|
(63,789 |
) |
|
(64,784 |
) |
|||||
|
Other diluted AFFO adjustments associated with real estate JVs |
(68 |
) |
|
(28 |
) |
|
212 |
|
|
121 |
|
|||||
|
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) |
$ |
40,270 |
|
|
$ |
42,755 |
|
|
$ |
176,247 |
|
|
$ |
160,264 |
|
|
|
Diluted FFO per share |
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
2.02 |
|
|
$ |
1.99 |
|
|
|
Diluted FFO per share, as adjusted for comparability |
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
2.03 |
|
|
$ |
2.01 |
|
|
|
Dividends/distributions per common share/unit |
$ |
0.275 |
|
|
$ |
0.275 |
|
|
$ |
1.100 |
|
|
$ |
1.100 |
|
|
|
Corporate Office Properties Trust |
||||||||||||
|
Summary Financial Data |
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|
(unaudited) |
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(Dollars and shares in thousands, except per share data) |
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December 31, 2019 |
|
December 31, 2018 |
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|
Balance Sheet Data |
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|
Properties, net of accumulated depreciation |
$3,340,886 |
|
|
$3,250,626 |
|
|||||||
|
Total assets |
3,854,453 |
|
3,656,005 |
|
||||||||
|
Debt, per balance sheet |
1,831,139 |
|
1,823,909 |
|
||||||||
|
Total liabilities |
2,105,777 |
|
2,002,697 |
|
||||||||
|
Redeemable noncontrolling interest |
29,431 |
|
26,260 |
|
||||||||
|
Equity |
1,719,245 |
|
1,627,048 |
|
||||||||
|
Net debt to adjusted book |
36.8 |
% |
38.9 |
% |
||||||||
|
|
|
|
||||||||||
|
Core Portfolio Data (as of period end) (1) |
|
|
||||||||||
|
Number of operating properties |
168 |
|
161 |
|
||||||||
|
Total net rentable square feet owned (in thousands) |
19,016 |
|
17,937 |
|
||||||||
|
% Occupied |
93.1 |
% |
93.1 |
% |
||||||||
|
% Leased |
94.6 |
% |
94.0 |
% |
||||||||
|
|
|
|
||||||||||
|
|
For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
|||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||
|
Payout ratios |
|
|
|
|||||||||
|
Diluted FFO |
55.6 |
% |
56.4 |
% |
54.4 |
% |
|
55.4 |
% |
|||
|
Diluted FFO, as adjusted for comparability |
55.3 |
% |
55.6 |
% |
54.2 |
% |
|
55.0 |
% |
|||
|
Diluted AFFO |
77.3 |
% |
71.5 |
% |
70.5 |
% |
|
74.1 |
% |
|||
|
Adjusted EBITDA fixed charge coverage ratio |
3.7x |
|
3.6x |
|
3.7x |
|
|
3.6x |
|
|||
|
Net debt to in-place adjusted EBITDA ratio (2) |
6.1x |
|
6.0x |
|
N/A |
|
|
N/A |
|
|||
|
Net debt plus preferred equity to in-place adjusted EBITDA ratio (3) |
6.1x |
|
6.0x |
|
N/A |
|
|
N/A |
|
|||
|
|
|
|
|
|||||||||
|
Reconciliation of denominators for per share measures |
|
|
||||||||||
|
Denominator for diluted EPS |
112,071 |
|
108,573 |
|
111,623 |
|
|
104,125 |
|
|||
|
Weighted average common units |
1,228 |
|
1,345 |
|
1,299 |
|
|
2,468 |
|
|||
|
Redeemable noncontrolling interests |
— |
|
1,126 |
|
— |
|
|
936 |
|
|||
|
Dilutive convertible preferred units |
176 |
|
— |
|
— |
|
|
— |
|
|||
|
Denominator for diluted FFO per share and as adjusted for comparability |
113,475 |
|
111,044 |
|
112,922 |
|
|
107,529 |
|
|||
|
|
|
|
|
|||||||||
|
|
|
|
|
(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 December 31, |
|
For the Years Ended December 31, |
|||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
|
Reconciliation of common share dividends to dividends and distributions for payout ratios |
|
|
|
|
|
|
|
|||||||||
|
Common share dividends - unrestricted shares and deferred shares |
$ |
30,724 |
|
|
$ |
30,206 |
|
|
$ |
122,823 |
|
|
$ |
116,285 |
|
|
|
Common unit distributions - unrestricted units |
337 |
|
|
367 |
|
|
1,405 |
|
|
2,498 |
|
|||||
|
Distributions on dilutive preferred units |
$ |
77 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
Dividends and distributions for payout ratios |
$ |
31,138 |
|
|
$ |
30,573 |
|
|
$ |
124,228 |
|
|
$ |
118,783 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
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 |
$ |
44,877 |
|
|
$ |
18,456 |
|
|
$ |
200,004 |
|
|
$ |
78,643 |
|
|
|
Interest expense |
16,777 |
|
|
18,475 |
|
|
71,052 |
|
|
75,385 |
|
|||||
|
Income tax benefit |
(104 |
) |
|
(190 |
) |
|
(217 |
) |
|
(363 |
) |
|||||
|
Depreciation of furniture, fixtures and equipment |
438 |
|
|
404 |
|
|
1,834 |
|
|
1,947 |
|
|||||
|
Real estate-related depreciation and amortization |
32,779 |
|
|
36,219 |
|
|
137,069 |
|
|
137,116 |
|
|||||
|
Impairment losses on real estate |
2 |
|
|
2,367 |
|
|
329 |
|
|
2,367 |
|
|||||
|
Gain on sales of real estate |
(20,761 |
) |
|
(2,367 |
) |
|
(105,230 |
) |
|
(2,340 |
) |
|||||
|
Adjustments from unconsolidated real estate JVs |
1,206 |
|
|
832 |
|
|
4,065 |
|
|
3,314 |
|
|||||
|
EBITDAre |
75,214 |
|
|
74,196 |
|
|
308,906 |
|
|
296,069 |
|
|||||
|
Loss on early extinguishment of debt |
— |
|
|
258 |
|
|
— |
|
|
258 |
|
|||||
|
Net gain on other investments |
(1 |
) |
|
(449 |
) |
|
(401 |
) |
|
(449 |
) |
|||||
|
Business development expenses |
512 |
|
|
661 |
|
|
1,939 |
|
|
3,114 |
|
|||||
|
Non-comparable professional and legal expenses |
195 |
|
|
— |
|
|
681 |
|
|
— |
|
|||||
|
Demolition costs on redevelopment and nonrecurring improvements |
104 |
|
|
163 |
|
|
148 |
|
|
462 |
|
|||||
|
Executive transition costs |
— |
|
|
371 |
|
|
4 |
|
|
793 |
|
|||||
|
Adjusted EBITDA |
76,024 |
|
|
75,200 |
|
|
$ |
311,277 |
|
|
$ |
300,247 |
|
|||
|
Proforma net operating income adjustment for property changes within period |
463 |
|
|
2,052 |
|
|
|
|
|
|||||||
|
Change in collectability of deferred rental revenue |
928 |
|
|
— |
|
|
|
|
|
|||||||
|
In-place adjusted EBITDA |
$ |
77,415 |
|
|
$ |
77,252 |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Reconciliation of interest expense to the denominators for fixed charge coverage-Adjusted EBITDA |
|
|
|
|
|
|
|
|||||||||
|
Interest expense |
$ |
16,777 |
|
|
$ |
18,475 |
|
|
$ |
71,052 |
|
|
$ |
75,385 |
|
|
|
Less: Amortization of deferred financing costs |
(541 |
) |
|
(550 |
) |
|
(2,136 |
) |
|
(1,954 |
) |
|||||
|
Less: Amortization of net debt discounts, net of amounts capitalized |
(382 |
) |
|
(365 |
) |
|
(1,503 |
) |
|
(1,439 |
) |
|||||
|
Less: Accum. other comprehensive loss on derivatives amortized to expense |
— |
|
|
(34 |
) |
|
(79 |
) |
|
(135 |
) |
|||||
|
COPT’s share of interest expense of unconsolidated real estate JVs, excluding deferred financing costs |
416 |
|
|
260 |
|
|
1,332 |
|
|
1,034 |
|
|||||
|
Scheduled principal amortization |
1,010 |
|
|
1,079 |
|
|
4,310 |
|
|
4,240 |
|
|||||
|
Capitalized interest |
3,467 |
|
|
1,748 |
|
|
10,786 |
|
|
5,929 |
|
|||||
|
Preferred unit distributions |
77 |
|
|
165 |
|
|
564 |
|
|
660 |
|
|||||
|
Denominator for fixed charge coverage-Adjusted EBITDA |
$ |
20,824 |
|
|
$ |
20,778 |
|
|
$ |
84,326 |
|
|
$ |
83,720 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Corporate Office Properties Trust |
||||||||||||||||
|
Summary Financial Data |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
(Dollars in thousands) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
||||||||||||
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures |
|
|
|
|
|
|
|
|||||||||
|
Tenant improvements and incentives |
$ |
11,447 |
|
|
$ |
7,876 |
|
|
$ |
38,047 |
|
|
$ |
37,502 |
|
|
|
Building improvements |
8,826 |
|
|
9,306 |
|
|
26,598 |
|
|
22,977 |
|
|||||
|
Leasing costs |
2,998 |
|
|
3,800 |
|
|
11,663 |
|
|
9,847 |
|
|||||
|
Net (exclusions from) additions to tenant improvements and incentives |
(426 |
) |
|
(2,131 |
) |
|
(2,292 |
) |
|
1,577 |
|
|||||
|
Excluded building improvements |
(2,983 |
) |
|
(3,984 |
) |
|
(10,227 |
) |
|
(7,073 |
) |
|||||
|
Excluded leasing costs |
— |
|
|
(19 |
) |
|
— |
|
|
(46 |
) |
|||||
|
Replacement capital expenditures |
$ |
19,862 |
|
|
$ |
14,848 |
|
|
$ |
63,789 |
|
|
$ |
64,784 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Same Properties cash NOI |
$ |
73,708 |
|
|
$ |
69,377 |
|
|
$ |
285,944 |
|
|
$ |
275,094 |
|
|
|
Straight line rent adjustments and lease incentive amortization |
(2,838 |
) |
|
(907 |
) |
|
(5,004 |
) |
|
(3,111 |
) |
|||||
|
Amortization of acquired above- and below-market rents |
197 |
|
|
(97 |
) |
|
312 |
|
|
(671 |
) |
|||||
|
Amortization of below-market cost arrangements |
(23 |
) |
|
(56 |
) |
|
(92 |
) |
|
(222 |
) |
|||||
|
Lease termination fees, gross |
417 |
|
|
906 |
|
|
2,046 |
|
|
3,231 |
|
|||||
|
Tenant funded landlord assets and lease incentives |
748 |
|
|
409 |
|
|
2,177 |
|
|
3,421 |
|
|||||
|
Cash NOI adjustments in unconsolidated real estate JV |
34 |
|
|
57 |
|
|
181 |
|
|
254 |
|
|||||
|
Same Properties NOI |
$ |
72,243 |
|
|
$ |
69,689 |
|
|
$ |
285,564 |
|
|
$ |
277,996 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
December 31, 2019 |
|
December 31, 2018 |
|||||||||||||||||
|
Reconciliation of total assets to adjusted book |
|
|
|
|||||||||||||||||
|
Total assets |
$ |
3,854,453 |
|
|
$ |
3,656,005 |
|
|||||||||||||
|
Accumulated depreciation |
1,007,120 |
|
|
897,903 |
|
|||||||||||||||
|
Accumulated amortization of real estate intangibles and deferred leasing costs |
212,547 |
|
|
204,882 |
|
|||||||||||||||
|
COPT’s share of liabilities of unconsolidated real estate JVs |
50,734 |
|
|
29,917 |
|
|||||||||||||||
|
COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs |
8,164 |
|
|
5,446 |
|
|||||||||||||||
|
Less: Property - operating lease liabilities |
(17,317 |
) |
|
— |
|
|||||||||||||||
|
Less: Property - finance lease liabilities |
(702 |
) |
|
(660 |
) |
|||||||||||||||
|
Less: Cash and cash equivalents |
(14,733 |
) |
|
(8,066 |
) |
|||||||||||||||
|
Less: COPT’s share of cash of unconsolidated real estate JVs |
(498 |
) |
|
(293 |
) |
|||||||||||||||
|
Adjusted book |
$ |
5,099,768 |
|
|
$ |
4,785,134 |
|
|||||||||||||
|
|
|
|
|
|||||||||||||||||
|
Reconciliation of debt outstanding to net debt and net debt plus preferred equity |
|
|
|
|||||||||||||||||
|
Debt outstanding (excluding net debt discounts and deferred financing costs) |
$ |
1,893,057 |
|
|
$ |
1,868,504 |
|
|||||||||||||
|
Less: Cash and cash equivalents |
(14,733 |
) |
|
(8,066 |
) |
|||||||||||||||
|
Less: COPT’s share of cash of unconsolidated real estate JVs |
(498 |
) |
|
(293 |
) |
|||||||||||||||
|
Net debt |
$ |
1,877,826 |
|
|
$ |
1,860,145 |
|
|||||||||||||
|
Preferred equity |
8,800 |
|
|
8,800 |
|
|||||||||||||||
|
Net debt plus preferred equity |
$ |
1,886,626 |
|
|
$ |
1,868,945 |
|
|||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200206005935/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 February 6, 2020