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COPT Reports Strong Second Quarter 2020 Results

2Q20 Results Outperform Expectations

FFO per share of $0.51 in 2Q Exceeded High-End of Guidance by $0.01

Solid Same-Property Cash NOI Growth of 1.7% in 2Q Outperformed Guidance

Core Portfolio 93.6% Occupied & 94.7% Leased

412,000 SF of 97.5% Leased Developments Placed in Service during 2Q; 642,000 SF of 99% Leased Developments Placed in Service During First Half of 2020

Solid Leasing Volumes

Total Leasing in 2Q of 959,000 SF included 276,000 SF of Development Leasing and 70,000 SF of Vacancy Leasing

Continued Strong Tenant Retention of 76% in 2Q; 81% for First Half of 2020

1.9 Million SF Under Development are 84% Leased

Executed a New, 3.1MW Lease with Defense Contractor at DC-6

COVID-19 Impact on Operations Continues to be Minimal

Maintaining Mid-Point of Full-Year Guidance for FFO per Share, As Adjusted for Comparability, of $2.07

Monthly Rent Collections, Net of Rent Accommodations, Continue to Exceed 99%

Corporate Office Properties Trust ("COPT" or the "Company") (NYSE: OFC) announced financial and operating results for the second quarter ended June 30, 2020.

Management Comments

Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, "The Company delivered strong second quarter results, with FFO per share exceeding the high-end of our guidance range by 1-cent. Cost savings and the timing of repair and maintenance costs more than offset the reserves we took on tenants impacted by the shutdowns and drove same-property cash NOI growth of 1.7%." He continued, "Our operations and ability to execute development and renewal leasing continue to be minimally impacted by the pandemic due to the high concentration of U.S. Government national security activity in our portfolio. Accordingly, we affirm the $2.07 mid-point of our updated 2020 guidance for FFO per share, as adjusted for comparability."

Financial Highlights

2nd Quarter Financial Results:

  • Diluted earnings per share ("EPS") was $0.21 for the quarter ended June 30, 2020 as compared to $0.95 for the second quarter of 2019.

  • Diluted funds from operations per share ("FFOPS"), as calculated in accordance with Nareit’s definition and as adjusted for comparability, was $0.51 for the second quarter of 2020 as compared to $0.52 for second quarter 2019 results.

Operating Performance Highlights

Operating Portfolio Summary:

  • At June 30, 2020, the Company’s core portfolio of 172 operating office and data center shell properties was 93.6% occupied and 94.7% leased.

  • During the quarter, the Company placed into service 412,000 square feet that were 97.5% leased.

Same-Property Performance:

  • At June 30, 2020, COPT’s same-property portfolio of 152 buildings was 92.3% occupied and 93.5% leased.

  • For the quarter and six months ended June 30, 2020, the Company’s same-property cash NOI increased 1.7% and 3.3%, respectively, over the prior year’s comparable periods.

Leasing:

  • Total Square Feet Leased: For the quarter ended June 30, 2020, the Company leased 959,000 total square feet, including 613,000 square feet of renewals, 70,000 square feet of new leases on vacant space, and 276,000 square feet in development projects. For the six months ended June 30, 2020, the Company executed 1.6 million square feet of total leasing.

  • Renewal Rates: During the quarter and six months ended June 30, 2020, the Company respectively renewed 75.6% and 81.0% of total expiring square feet.

  • Cash Rent Spreads & Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2020, cash rents on renewed space decreased 3.2% and 2.0%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.4%.

  • Lease Terms: In the second quarter, lease terms averaged 5.2 years on renewing leases, 4.9 years on new leasing of vacant space, and 16.3 years on development leasing. For the first six months, lease terms averaged 5.1 years on renewing leases, 6.7 years on vacancy leasing, and 16.3 years on development leasing.

  • DC-6: At the Company’s wholesale data center, COPT executed a new, 3.1 megawatt lease with a defense contractor in April, increasing DC-6 to 90.6% leased.

Investment Activity Highlights

Development & Redevelopment Projects:

  • Development Pipeline: At July 7, 2020, the Company’s development pipeline consisted of 11 properties and expansions in three fully-operational properties totaling 1.9 million square feet that were 84% leased. These projects have a total estimated cost of $612.2 million, of which $379.1 million had been incurred as of June 30, 2020.

Balance Sheet and Capital Transaction Highlights

  • As of June 30, 2020, the Company’s net debt plus preferred equity to adjusted book ratio was 38.8% and its net debt plus preferred equity to in-place adjusted EBITDA ratio was 6.4x. For the quarter ended June 30, 2020, the Company’s adjusted EBITDA fixed charge coverage ratio was 3.8x.

  • As of June 30, 2020, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.66% with a weighted average maturity of 3.0 years; additionally, 88.5% of the Company’s debt was subject to fixed interest rates.

2020 Guidance

Management is increasing its prior full-year guidance ranges of $0.65-$0.69 for EPS to a new range of $0.76-$0.80. Management is maintaining its full-year guidance ranges for FFOPS per Nareit and FFOPS, as adjusted for comparability, at $1.95-$1.99 and $2.05-$2.09, respectively.

Management also is establishing guidance for EPS and FFOPS, per Nareit and as adjusted for comparability, for the third quarter ending September 30, 2020 at ranges of $0.16-$0.18 and $0.51-$0.53, respectively; and for the fourth quarter ending December 31, 2020, management is establishing guidance ranges for EPS and FFOPS, per Nareit and as adjusted for comparability, at $0.17-$0.19 and $0.52-$0.54, respectively. Reconciliations of projected diluted EPS to projected FFOPS are as follows:

 

Table 1: Reconciliation of EPS to FFOPS, per Nareit and

Quarter ending

Quarter ending

 

Year ending

As Adjusted for Comparability

 

September 30, 2020

 

December 31, 2020

 

December 31, 2020

Low

High

Low

High

 

Low

High

 

 

EPS

 $

0.16

 

 $

0.18

 

 $

0.17

 

 $

0.19

 

 $

0.76

 

 

 $

  0.80

 

Real estate-related depreciation and amortization

 

   0.35

 

 

   0.35

 

 

   0.35

 

 

   0.35

 

 

   1.29

 

 

 

     1.29

 

FFO allocation to other noncontrolling interests resulting from capital event

 

 

       -

 

 

       -

 

 

       -

 

 

       -

 

 

  (0.10

)

 

 

    (0.10

)

FFOPS, Nareit definition

 

   0.51

 

 

   0.53

 

 

   0.52

 

 

   0.54

 

 

   1.95

 

 

 

     1.99

 

FFO allocation to other noncontrolling interests resulting from capital event

 

 

       -

 

 

       -

 

 

       -

 

 

       -

 

 

   0.10

 

 

 

     0.10

 

FFOPS, as adjusted for comparability

 $

0.51

 $

0.53

 $

0.52

 $

0.54

 

 $

2.05

 

 $

  2.09

 

 

Associated Supplemental Presentation

Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second 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 second 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, July 31, 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:

 

 

 

 

4686936

 

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, July 31, through 3:00 p.m. Eastern Time on Friday, August 14. 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 4686936.

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 June 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 172 office and data center shell properties encompassed 19.6 million square feet and was 94.7% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts that was 90.6% 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

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 June 30,

 

For the Six Months

Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Revenues

 

 

 

 

 

 

 

 

Revenues from real estate operations

 

$

132,538

 

 

$

132,771

 

 

$

264,654

 

 

$

264,761

 

Construction contract and other service revenues

 

12,236

 

 

42,299

 

 

25,917

 

 

59,249

 

Total revenues

 

144,774

 

 

175,070

 

 

290,571

 

 

324,010

 

Operating expenses

 

 

 

 

 

 

 

 

Property operating expenses

 

50,204

 

 

47,886

 

 

100,203

 

 

97,331

 

Depreciation and amortization associated with real estate operations

 

33,612

 

 

34,802

 

 

66,208

 

 

69,598

 

Construction contract and other service expenses

 

11,711

 

 

41,002

 

 

24,832

 

 

57,328

 

General and administrative expenses

 

6,511

 

 

7,650

 

 

11,814

 

 

14,369

 

Leasing expenses

 

1,647

 

 

1,736

 

 

3,830

 

 

3,768

 

Business development expenses and land carry costs

 

1,262

 

 

870

 

 

2,380

 

 

1,983

 

Total operating expenses

 

104,947

 

 

133,946

 

 

209,267

 

 

244,377

 

Interest expense

 

(16,797

)

 

(18,475

)

 

(33,637

)

 

(37,149

)

Interest and other income

 

2,282

 

 

1,849

 

 

3,487

 

 

4,135

 

Credit loss expense

 

(615

)

 

 

 

(1,304

)

 

 

Gain on sales of real estate

 

 

 

84,469

 

 

5

 

 

84,469

 

Income before equity in income of unconsolidated entities and income taxes

 

24,697

 

 

108,967

 

 

49,855

 

 

131,088

 

Equity in income of unconsolidated entities

 

454

 

 

420

 

 

895

 

 

811

 

Income tax (expense) benefit

 

(30

)

 

176

 

 

(79

)

 

(18

)

Net income

 

25,121

 

 

109,563

 

 

50,671

 

 

131,881

 

Net income attributable to noncontrolling interests:

 

 

 

 

 

 

 

 

Common units in the Operating Partnership ("OP")

 

(284

)

 

(1,339

)

 

(571

)

 

(1,596

)

Preferred units in the OP

 

(77

)

 

(165

)

 

(154

)

 

(330

)

Other consolidated entities

 

(1,263

)

 

(1,268

)

 

(2,395

)

 

(2,305

)

Net income attributable to COPT common shareholders

 

$

23,497

 

 

$

106,791

 

 

$

47,551

 

 

$

127,650

 

 

 

 

 

 

 

 

 

 

Earnings per share ("EPS") computation:

 

 

 

 

 

 

 

 

Numerator for diluted EPS:

 

 

 

 

 

 

 

 

Net income attributable to COPT common shareholders

 

$

23,497

 

 

$

106,791

 

 

$

47,551

 

 

$

127,650

 

Distributions on dilutive convertible preferred units

 

 

 

165

 

 

 

 

 

Redeemable noncontrolling interests

 

 

 

902

 

 

 

 

66

 

Common units in the OP

 

 

 

 

 

 

 

1,515

 

Amount allocable to share-based compensation awards

 

(109

)

 

(346

)

 

(206

)

 

(391

)

Numerator for diluted EPS

 

$

23,388

 

 

$

107,512

 

 

$

47,345

 

 

$

128,840

 

Denominator:

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

111,800

 

 

111,557

 

 

111,762

 

 

110,759

 

Dilutive convertible preferred units

 

 

 

176

 

 

 

 

 

Dilutive effect of redeemable noncontrolling interests

 

 

 

1,062

 

 

 

 

130

 

Common units in the OP

 

 

 

 

 

 

 

1,329

 

Dilutive effect of share-based compensation awards

 

321

 

 

310

 

 

280

 

 

289

 

Weighted average common shares - diluted

 

112,121

 

 

113,105

 

 

112,042

 

 

112,507

 

Diluted EPS

 

$

0.21

 

 

$

0.95

 

 

$

0.42

 

 

$

1.15

 

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(in thousands, except per share data)

 

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Net income

 

$

25,121

 

 

$

109,563

 

 

$

50,671

 

 

$

131,881

 

Real estate-related depreciation and amortization

 

33,612

 

 

34,802

 

 

66,208

 

 

69,598

 

Gain on sales of real estate

 

 

 

(84,469

)

 

(5

)

 

(84,469

)

Depreciation and amortization on unconsolidated real estate JVs

 

818

 

 

566

 

 

1,636

 

 

1,132

 

Funds from operations ("FFO")

 

59,551

 

 

60,462

 

 

118,510

 

 

118,142

 

Noncontrolling interests - preferred units in the OP

 

(77

)

 

(165

)

 

(154

)

 

(330

)

FFO allocable to other noncontrolling interests

 

(1,525

)

 

(1,188

)

 

(13,540

)

 

(2,159

)

Basic FFO allocable to share-based compensation awards

 

(254

)

 

(229

)

 

(447

)

 

(414

)

Basic FFO available to common share and common unit holders ("Basic FFO")

 

57,695

 

 

58,880

 

 

104,369

 

 

115,239

 

Dilutive preferred units in the OP

 

77

 

 

 

 

154

 

 

 

Redeemable noncontrolling interests

 

37

 

 

33

 

 

69

 

 

942

 

Diluted FFO available to common share and common unit holders ("Diluted FFO")

 

57,809

 

 

58,913

 

 

104,592

 

 

116,181

 

Demolition costs on redevelopment and nonrecurring improvements

 

9

 

 

 

 

52

 

 

44

 

Executive transition costs

 

 

 

 

 

 

 

4

 

Non-comparable professional and legal expenses

 

 

 

311

 

 

 

 

311

 

FFO allocation to other noncontrolling interests resulting from capital event

 

 

 

 

 

11,090

 

 

 

Diluted FFO comparability adjustments allocable to share-based compensation awards

 

(1

)

 

(2

)

 

(51

)

 

(2

)

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

 

57,817

 

 

59,222

 

 

115,683

 

 

116,538

 

Straight line rent adjustments and lease incentive amortization

 

2,523

 

 

1,051

 

 

1,671

 

 

(616

)

Amortization of intangibles included in net operating income

 

(73

)

 

(50

)

 

(147

)

 

12

 

Share-based compensation, net of amounts capitalized

 

1,638

 

 

1,623

 

 

3,027

 

 

3,296

 

Amortization of deferred financing costs

 

642

 

 

529

 

 

1,217

 

 

1,057

 

Amortization of net debt discounts, net of amounts capitalized

 

390

 

 

374

 

 

776

 

 

744

 

Accum. other comprehensive loss on derivatives amortized to expense

 

 

 

33

 

 

 

 

67

 

Replacement capital expenditures

 

(16,132

)

 

(16,002

)

 

(33,886

)

 

(27,175

)

Other diluted AFFO adjustments associated with real estate JVs

 

(115

)

 

181

 

 

(156

)

 

214

 

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

 

$

46,690

 

 

$

46,961

 

 

$

88,185

 

 

$

94,137

 

Diluted FFO per share

 

$

0.51

 

 

$

0.52

 

 

$

0.92

 

 

$

1.02

 

Diluted FFO per share, as adjusted for comparability

 

$

0.51

 

 

$

0.52

 

 

$

1.02

 

 

$

1.03

 

Dividends/distributions per common share/unit

 

$

0.275

 

 

$

0.275

 

 

$

0.550

 

 

$

0.550

 

 

 

 

 

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

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

 

 

 

 

 

 

 

 

 

 

 

June 30,

2020

 

December 31,

2019

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

Properties, net of accumulated depreciation

 

 

 

 

 

$

3,513,099

 

 

$

3,340,886

 

Total assets

 

 

 

 

 

 

4,011,325

 

 

 

3,854,453

 

Debt, per balance sheet

 

 

 

 

 

 

2,012,019

 

 

 

1,831,139

 

Total liabilities

 

 

 

 

 

 

2,331,253

 

 

 

2,105,777

 

Redeemable noncontrolling interests

 

 

 

 

 

 

23,148

 

 

 

29,431

 

Equity

 

 

 

 

 

 

1,656,924

 

 

 

1,719,245

 

Net debt to adjusted book

 

 

 

 

 

 

38.6

%

 

 

36.8

%

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Number of operating properties

 

 

 

 

 

 

172

 

 

 

168

 

Total operational square feet (in thousands)

 

 

 

 

 

 

19,624

 

 

 

19,016

 

% Occupied

 

 

 

 

 

 

93.6

%

 

 

93.1

%

% Leased

 

 

 

 

 

 

94.7

%

 

 

94.6

%

 

 

 

 

 

 

 

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Payout ratios

 

 

 

 

 

 

 

 

 

 

Diluted FFO

 

53.9

%

 

52.7

%

 

 

59.6

%

 

 

53.5

%

Diluted FFO, as adjusted for comparability

 

53.9

%

 

52.4

%

 

 

53.9

%

 

 

53.3

%

Diluted AFFO

 

66.8

%

 

66.1

%

 

 

70.7

%

 

 

66.0

%

Adjusted EBITDA fixed charge coverage ratio

 

3.8x

 

 

3.7x

 

 

3.8x

 

 

3.7x

 

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

 

6.4x

 

 

5.7x

 

 

 

N/A

 

 

 

N/A

 

Net debt plus preferred equity to in-place adjusted EBITDA ratio (3)

 

6.4x

 

 

5.7x

 

 

 

N/A

 

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of denominators for per share measures

 

 

 

 

 

 

 

 

 

 

 

Denominator for diluted EPS

 

112,121

 

 

113,105

 

 

 

112,042

 

 

 

112,507

 

Weighted average common units

 

1,237

 

 

1,327

 

 

 

1,232

 

 

 

 

Redeemable noncontrolling interests

 

157

 

 

(926

)

 

 

133

 

 

 

907

 

Dilutive convertible preferred units

 

176

 

 

(176

)

 

 

176

 

 

 

 

Denominator for diluted FFO per share and as adjusted for comparability

 

113,691

 

 

113,330

 

 

 

113,583

 

 

 

113,414

 

 

(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 June 30,

 

For the Six Months

Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

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

 

 

 

 

 

 

 

 

Common share dividends - unrestricted shares and deferred shares

 

$

30,761

 

 

$

30,693

 

 

$

61,515

 

 

$

61,378

 

Common unit distributions - unrestricted units

 

341

 

 

365

 

 

680

 

 

730

 

Distributions on dilutive preferred units

 

77

 

 

 

 

154

 

 

 

Dividends and distributions for payout ratios

 

$

31,179

 

 

$

31,058

 

 

$

62,349

 

 

$

62,108

 

 

 

 

 

 

 

 

 

 

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

 

$

25,121

 

 

$

109,563

 

 

$

50,671

 

 

$

131,881

 

Interest expense

 

16,797

 

 

18,475

 

 

33,637

 

 

37,149

 

Income tax expense (benefit)

 

30

 

 

(176

)

 

79

 

 

18

 

Depreciation of furniture, fixtures and equipment

 

448

 

 

496

 

 

867

 

 

929

 

Real estate-related depreciation and amortization

 

33,612

 

 

34,802

 

 

66,208

 

 

69,598

 

Gain on sales of real estate

 

 

 

(84,469

)

 

(5

)

 

(84,469

)

Adjustments from unconsolidated real estate JVs

 

1,270

 

 

830

 

 

2,540

 

 

1,657

 

EBITDAre

 

77,278

 

 

79,521

 

 

153,997

 

 

156,763

 

Net loss (gain) on other investments

 

2

 

 

(12

)

 

2

 

 

(400

)

Credit loss expense

 

615

 

 

 

 

1,304

 

 

 

Business development expenses

 

678

 

 

460

 

 

1,216

 

 

1,008

 

Non-comparable professional and legal expenses

 

 

 

311

 

 

 

 

311

 

Demolition costs on redevelopment and nonrecurring improvements

 

9

 

 

 

 

52

 

 

44

 

Executive transition costs

 

 

 

 

 

 

 

4

 

Adjusted EBITDA

 

78,582

 

 

80,280

 

 

$

156,571

 

 

$

157,730

 

Proforma net operating income adjustment for property changes within period

 

959

 

 

(1,981

)

 

 

 

 

Change in collectability of deferred rental revenue

 

1,007

 

 

 

 

 

 

 

In-place adjusted EBITDA

 

$

80,548

 

 

$

78,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest expense

 

$

16,797

 

 

$

18,475

 

 

$

33,637

 

 

$

37,149

 

Less: Amortization of deferred financing costs

 

(642

)

 

(529

)

 

(1,217

)

 

(1,057

)

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

 

(390

)

 

(374

)

 

(776

)

 

(744

)

Less: Accum. other comprehensive loss on derivatives amortized to expense

 

 

 

(33

)

 

 

 

(67

)

COPT’s share of interest expense of unconsolidated real estate JVs, excluding deferred financing costs

 

442

 

 

258

 

 

883

 

 

513

 

Scheduled principal amortization

 

1,023

 

 

1,095

 

 

2,044

 

 

2,193

 

Capitalized interest

 

3,174

 

 

2,388

 

 

6,532

 

 

4,392

 

Preferred unit distributions

 

77

 

 

165

 

 

154

 

 

330

 

Denominator for fixed charge coverage-Adjusted EBITDA

 

$

20,481

 

 

$

21,445

 

 

$

41,257

 

 

$

42,709

 

 

 

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Dollars in thousands)

 

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

 

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

 

$

8,870

 

 

$

8,568

 

 

$

20,227

 

 

$

15,720

 

Building improvements

 

13,662

 

 

4,333

 

 

16,137

 

 

8,864

 

Leasing costs

 

2,222

 

 

2,761

 

 

4,984

 

 

5,943

 

Net additions to tenant improvements and incentives

 

329

 

 

1,759

 

 

2,355

 

 

290

 

Excluded building improvements and leasing costs

 

(8,951

)

 

(1,419

)

 

(9,817

)

 

(3,642

)

Replacement capital expenditures

 

$

16,132

 

 

$

16,002

 

 

$

33,886

 

 

$

27,175

 

 

 

 

 

 

 

 

 

 

Same Properties cash NOI

 

$

75,837

 

 

$

74,584

 

 

$

150,799

 

 

$

145,992

 

Straight line rent adjustments and lease incentive amortization

 

(1,513

)

 

(701

)

 

(2,080

)

 

(15

)

Amortization of acquired above- and below-market rents

 

97

 

 

73

 

 

193

 

 

33

 

Amortization of below-market cost arrangements

 

(23

)

 

(23

)

 

(46

)

 

(46

)

Lease termination fees, gross

 

358

 

 

285

 

 

443

 

 

806

 

Tenant funded landlord assets and lease incentives

 

(147

)

 

530

 

 

222

 

 

926

 

Cash NOI adjustments in unconsolidated real estate JV

 

35

 

 

46

 

 

63

 

 

105

 

Same Properties NOI

 

$

74,644

 

 

$

74,794

 

 

$

149,594

 

 

$

147,801

 

 

 

 

June 30,

2020

 

December 31,

2019

Reconciliation of total assets to adjusted book

 

 

 

 

Total assets

 

$

4,011,325

 

 

$

3,854,453

 

Accumulated depreciation

 

1,065,094

 

 

1,007,120

 

Accumulated amortization of real estate intangibles and deferred leasing costs

 

216,267

 

 

212,547

 

COPT’s share of liabilities of unconsolidated real estate JVs

 

50,984

 

 

50,734

 

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

 

9,815

 

 

8,164

 

Less: Property - operating lease liabilities

 

(20,796

)

 

(17,317

)

Less: Property - finance lease liabilities

 

(688

)

 

(702

)

Less: Cash and cash equivalents

 

(21,596

)

 

(14,733

)

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

 

(627

)

 

(498

)

Adjusted book

 

$

5,309,778

 

 

$

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)

 

$

2,073,351

 

 

$

1,893,057

 

Less: Cash and cash equivalents

 

(21,596

)

 

(14,733

)

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

 

(627

)

 

(498

)

Net debt

 

$

2,051,128

 

 

$

1,877,826

 

Preferred equity

 

8,800

 

 

8,800

 

Net debt plus preferred equity

 

$

2,059,928

 

 

$

1,886,626

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200730006025/en/

Contacts

IR Contacts:
Stephanie Krewson-Kelly
443-285-5453
stephanie.kelly@copt.com

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