COLUMBIA, Md.--(BUSINESS
WIRE)--Oct. 28, 2009-- Corporate Office
Properties Trust (COPT) (NYSE:OFC) announced today financial and operating
results for the quarter and nine months ended September 30, 2009.
Highlights
- 6% increase in diluted earnings per share
("Diluted EPS") to $.18 or $10.4 million of
net income available to common shareholders for the third quarter 2009 as
compared to $.17 per diluted share or $8.2 million
of net income available to common shareholders for the third quarter 2008.
Year to date, diluted EPS increased 32% to $.62 or $35.2
million of net income available to common shareholders as compared
to $.47 per diluted share or $23.0 million of
net income available to common shareholders for the first nine months of 2008.
- 3% decrease in diluted Funds from Operations
("FFO") per share to $.60 for the third quarter 2009 from $.62
for the third quarter 2008. FFO increased 7% to $42.4 million
for the third quarter 2009 from $39.5 million for the third
quarter 2008. Year to date, diluted FFO per share increased 10% to $1.94
or $134.1 million from $1.77 or $113.2
million for the first nine months of 2008.
- 9% increase in diluted Adjusted Funds from
Operations available to common share and common unit holders ("Diluted AFFO")
to $27.8 million for the third quarter 2009 as compared to
$25.5 million for the third quarter 2008. Year to date, diluted
AFFO increased 31% to $97.4 million from $74.5 million
for the first nine months of 2008.
- 91% occupied and leased for our wholly-owned
portfolio as of September 30, 2009.
- 68% renewal rate on expiring leases for
third quarter 2009, with a 4% decrease in total straight-line rents for renewed
space.
- 5% increase in same office property cash
NOI for the quarter compared to the third quarter 2008. The Company's same
office portfolio for the quarter ended September 30, 2009 represents
91% of the rentable square feet of its consolidated portfolio and consists
of 230 properties.
- 761,000 square feet leased in the quarter
and approximately 1.9 million square feet leased year to date.
"The Company continues to perform well despite an increasingly difficult real
estate environment. We increased our cash dividend during the quarter by 5.4%,
one of the few REITs to do so this year," stated Randall M. Griffin,
President and Chief Executive Officer, Corporate
Office Properties Trust. "We had an active leasing quarter. Our focused
expense control efforts helped produce strong same office performance," he added.
Financial Ratios
Diluted FFO payout ratio for the nine months ended September 30, 2009
was 59% as compared to 60% for the nine months ended September 30, 2008.
Diluted AFFO payout ratio for the nine months ended September 30, 2009
was 73% as compared to 81% for the nine months ended September 30, 2008.
As of September 30, 2009, the Company had a total market capitalization
of $4.5 billion, with $1.9 billion in debt outstanding,
equating to a 43% debt to total market capitalization ratio.
For the third quarter 2009, the Company's weighted average interest rate was
4.9% and at September 30, 2009, the Company had 85% of its total
debt subject to fixed interest rates.
For the third quarter 2009, the Company's EBITDA to interest coverage ratio
was 3.2x, and the EBITDA fixed charge coverage ratio was 2.6x.
Reconciliations of non-GAAP measures to the most directly comparable GAAP
measures are included in the tables that follow the text of this press release.
Operating Results
At September 30, 2009, the Company's wholly-owned portfolio
of 246 office properties totaled 18.4 million square feet. The weighted average
remaining lease term for the portfolio was 4.5 years and the average rental
rate (including tenant reimbursements) was $24.04 per square
foot.
For the quarter ended September 30, 2009, 529,000 square feet
was renewed equating to a 68% renewal rate, at an average committed cost of
$5.04 per square foot. Total rent on renewed space decreased
4% on a straight-line basis, as measured from the straight-line rent in effect
preceding the renewal date and decreased 8% on a cash basis. For renewed and
retenanted space of 670,000 square feet, total straight-line rent decreased
6% and total rent on a cash basis decreased 12%. The average committed cost
for renewed and retenanted space was $6.09 per square foot.
For the nine months ended September 30, 2009, 1.4 million square
feet was renewed equating to a 72% renewal rate, at an average committed cost
of $6.14 per square foot.
Development Activity
At September 30, 2009, the Company had 2.4 million square feet
under construction, development and redevelopment for a total projected cost
of $478.3 million.
The Company's land inventory (wholly-owned and joint venture) at September
30, 2009 totaled 1,821 acres that can support 16.1 million square feet
of development.
During the quarter, the Company placed into service 338,000 square feet located
in six properties.
Financing and Capital Transactions
The Company closed the following transactions during the quarter:
- A $90.0 million secured loan
with a five-year term that carries interest at 7.25%.
- A $185.0 million secured
loan with a seven-year term that carries interest at 7.25%.
Subsequent Events
The Company executed the following transactions subsequent to quarter end:
- Acquired a newly-constructed, 156,000 square
foot property that is 100% leased, long-term to Northrop Grumman Corporation
and a 0.9 acre adjacent land parcel located in Linthicum, Maryland.
- Acquired a 474,000 square foot office tower,
parking lot, utility distribution center, four waterfront lots and riparian
rights, all part of the Canton Crossing planned unit development in Baltimore,
Maryland. The waterfront lots are approved for 500,000 square feet
of office, 150,000 square feet of retail, a 450 room hotel and a marina. The
office tower is 91% leased with CareFirst as the largest tenant
at 34%.
Earnings Guidance
The Company will discuss its updated 2009 diluted FFO per share guidance and
its initial 2010 diluted FFO per share guidance on its earnings conference call.
Conference Call
The Company will hold an investor/analyst conference call:
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Conference Call (within the United States)
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Date: |
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Thursday, October 29, 2009 |
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Time: |
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11:00 a.m. Eastern Time |
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Telephone Number: |
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888-679-8018 |
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Passcode: |
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90330872 |
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Conference Call (outside the United States)
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Date: |
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Thursday, October 29, 2009 |
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Time: |
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11:00 a.m. Eastern Time |
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Telephone Number: |
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617-213-4845 |
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Passcode: |
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90330872 |
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Please use the following link to pre-register and view important information
about this conference call. Pre-registering is not mandatory but is recommended
as it will provide you immediate entry into the call and will facilitate the
timely start of the conference. Pre-registration only takes a few moments and
you may pre-register at anytime, including up to and after the call start time.
To pre-register, please click on the below link:
https://www.theconferencingservice.com/prereg/key.process?key=P86DV6HWU
You may also pre-register in the Investor Relations section of the Company's
website at www.copt.com.
Alternatively, you may be placed into the call by an operator by calling the
number provided above at least 5 to 10 minutes before the start of the call.
A replay of this call will be available beginning Thursday, October 29
at 3:00 p.m. Eastern Time through Thursday, November 12
at midnight Eastern Time. To access the replay within the
United States, please call 888-286-8010 and use passcode 18266981.
To access the replay outside the
United States, please call 617-801-6888 and use passcode 18266981.
The conference call will also be available via live webcast in the Investor
Relations section of the Company's website at www.copt.com.
A replay of the conference call will be immediately available via webcast in
the Investor Relations section of the Company's website.
Definitions
Please refer to our Form 8-K or our website (www.copt.com)
for definitions of certain terms used in this press release. Reconciliations
of non-GAAP measures to the most directly comparable GAAP measures are included
in the attached tables.
Company Information
Corporate Office Properties Trust
(COPT) (NYSE: OFC) is a specialty office real estate investment trust (REIT)
that focuses on strategic customer relationships and specialized tenant requirements
in the U.S. Government, Defense Information Technology and Data sectors.
The Company acquires, develops, manages and leases properties which are typically
concentrated in large office parks primarily located adjacent to government
demand drivers and/or in growth corridors. As of September 30, 2009,
the Company owned 265 office and data properties totaling 19.4 million
rentable square feet, which includes 19 properties totaling 989,000 square feet
held through joint ventures. The Company's portfolio primarily consists of technically
sophisticated buildings in visually appealing settings that are environmentally
sensitive, sustainable and meet unique customer requirements. COPT is an S&P
MidCap 400 company and more information can be found at www.copt.com.
Forward-Looking Information
This press release may contain "forward-looking" statements, as defined
in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on the Company's current expectations,
estimates and projections about future events and financial trends affecting
the Company. Forward-looking statements can be identified by the use
of words such as "may", "will", "should", "expect", "estimate" or other comparable
terminology. Forward-looking statements are inherently subject to risks
and uncertainties, many of which the Company cannot predict with accuracy and
some of which the Company might not even anticipate. Accordingly, the
Company can give no assurance that these expectations, estimates and projections
will be achieved. Future events and actual results may differ materially
from those discussed in the forward-looking statements.
Important factors that may affect these expectations, estimates, and projections
include, but are not limited to:
- the Company's ability to borrow on favorable
terms;
- general economic and business conditions,
which will, among other things, affect office property demand and rents, tenant
creditworthiness, interest rates and financing availability;
- adverse changes in the real estate markets
including, among other things, increased competition with other companies;
- risk of real estate acquisition and development,
including, among other things, risks that development projects may not be
completed on schedule, that tenants may not take occupancy or pay rent or
that development or operating costs may be greater than anticipated;
- risks of investing through joint venture
structures, including risks that the Company's joint venture partners may
not fulfill their financial obligations as investors or may take actions that
are inconsistent with the Company's objectives;
- our ability to satisfy and operate effectively
under federal income tax rules relating to real estate investment trusts and
partnerships;
- governmental actions and initiatives;
and
- environmental requirements.
The Company undertakes no obligation to update or supplement any forward-looking
statements. For further information, please refer to the Company's filings
with the Securities and Exchange Commission, particularly the section
entitled "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K
for the year ended December 31, 2008.
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Corporate Office Properties Trust |
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Summary Financial Data |
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(unaudited) |
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(Amounts in thousands, except per share data) |
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Three Months Ended September
30, |
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Nine Months Ended September
30, |
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2009 |
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2008 |
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2009 |
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2008 |
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Revenues |
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Real estate revenues |
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$ |
104,843 |
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$ |
101,086 |
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$ |
317,405 |
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$ |
296,034 |
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Service operations revenues |
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95,321 |
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|
90,002 |
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|
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273,534 |
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123,040 |
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Total revenues |
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200,164 |
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191,088 |
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|
|
590,939 |
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419,074 |
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Expenses |
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|
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Property operating expenses |
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38,583 |
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35,854 |
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114,778 |
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104,353 |
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Depreciation and other amortization associated with real estate operations
|
|
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26,712 |
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|
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25,583 |
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|
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81,911 |
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|
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75,430 |
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Service operations expenses |
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93,805 |
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|
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87,657 |
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|
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268,289 |
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120,090 |
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General and administrative expenses |
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5,898 |
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|
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5,904 |
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17,275 |
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17,608 |
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Business development expenses |
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458 |
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|
|
199 |
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|
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1,550 |
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|
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464 |
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Total operating expenses |
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165,456 |
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155,197 |
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483,803 |
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|
|
317,945 |
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Operating income |
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34,708 |
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|
|
35,891 |
|
|
|
107,136 |
|
|
|
101,129 |
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Interest expense |
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(20,986 |
) |
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(22,503 |
) |
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(59,088 |
) |
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(65,580 |
) |
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Interest and other income |
|
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2,619 |
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|
|
559 |
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|
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4,949 |
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|
924 |
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Income from continuing operations before
equity in loss of unconsolidated entities and income taxes |
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16,341 |
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13,947 |
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52,997 |
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36,473 |
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Equity in loss of unconsolidated entities |
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(758 |
) |
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(57 |
) |
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(1,075 |
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(167 |
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Income tax expense |
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(47 |
) |
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(97 |
) |
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(169 |
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(102 |
) |
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Income from continuing operations |
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15,536 |
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13,793 |
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51,753 |
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36,204 |
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Discontinued operations |
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- |
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(9 |
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- |
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2,571 |
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Income before gain on sales of real estate |
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15,536 |
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13,784 |
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51,753 |
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38,775 |
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Gain on sales of real estate, net of income taxes |
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- |
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4 |
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- |
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1,104 |
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Net income |
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15,536 |
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13,788 |
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51,753 |
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39,879 |
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Less net income attributable to noncontrolling interests |
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Common units in the Operating Partnership |
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(956 |
) |
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(1,467 |
) |
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(4,032 |
) |
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(4,130 |
) |
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Preferred units in the Operating Partnership |
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(165 |
) |
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(165 |
) |
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(495 |
) |
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(495 |
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Other |
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40 |
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90 |
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15 |
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(132 |
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Net income attributable to COPT |
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14,455 |
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12,246 |
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|
47,241 |
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|
|
35,122 |
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Preferred share dividends |
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(4,025 |
) |
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(4,025 |
) |
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|
(12,076 |
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(12,076 |
) |
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Net income attributable to COPT common shareholders |
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$ |
10,430 |
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$ |
8,221 |
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$ |
35,165 |
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$ |
23,046 |
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Earnings per share "EPS" computation: |
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Numerator for diluted EPS: |
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Net income available to common shareholders |
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$ |
10,430 |
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$ |
8,221 |
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$ |
35,165 |
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$ |
23,046 |
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Amount allocable to restricted shares |
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(253 |
) |
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(192 |
) |
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(763 |
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(528 |
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Numerator for diluted EPS |
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10,177 |
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|
8,029 |
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|
|
34,402 |
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|
|
22,518 |
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|
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|
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Denominator: |
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|
|
|
|
|
|
|
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Weighted average common shares - basic |
|
|
57,470 |
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|
|
47,273 |
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|
|
55,366 |
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|
|
47,128 |
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Dilutive effect of stock option awards |
|
|
485 |
|
|
|
779 |
|
|
|
506 |
|
|
|
765 |
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Weighted average common shares - diluted |
|
|
57,955 |
|
|
|
48,052 |
|
|
|
55,872 |
|
|
|
47,893 |
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|
|
|
|
|
|
|
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Diluted EPS |
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$ |
0.18 |
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|
$ |
0.17 |
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$ |
0.62 |
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$ |
0.47 |
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|
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|
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Corporate Office Properties Trust |
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Summary Financial Data |
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(unaudited) |
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(Amounts in thousands, except per share data and ratios) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
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Three Months Ended September
30, |
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Nine Months Ended September
30, |
| |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income |
|
$ |
15,536 |
|
|
$ |
13,788 |
|
|
$ |
51,753 |
|
|
$ |
39,879 |
|
|
Add: Real estate-related depreciation and amortization |
|
|
26,712 |
|
|
|
25,583 |
|
|
|
81,911 |
|
|
|
75,482 |
|
|
Add: Depreciation and amortization on unconsolidated real estate entities
|
|
|
160 |
|
|
|
162 |
|
|
|
481 |
|
|
|
489 |
|
|
Less: Gain on sales of operating properties, net of income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,630 |
) |
|
Funds from operations ("FFO") |
|
|
42,408 |
|
|
|
39,533 |
|
|
|
134,145 |
|
|
|
113,220 |
|
|
Less: Noncontrolling interests - preferred units in the Operating Partnership
|
|
|
(165 |
) |
|
|
(165 |
) |
|
|
(495 |
) |
|
|
(495 |
) |
|
Less: Noncontrolling interests - other consolidated entities |
|
|
40 |
|
|
|
90 |
|
|
|
15 |
|
|
|
(132 |
) |
|
Less: Preferred share dividends |
|
|
(4,025 |
) |
|
|
(4,025 |
) |
|
|
(12,076 |
) |
|
|
(12,076 |
) |
|
Less: Depreciation and amortization allocable
to noncontrolling interests in other consolidated entities |
|
|
(91 |
) |
|
|
(74 |
) |
|
|
(251 |
) |
|
|
(198 |
) |
|
Less: Basic and diluted FFO allocable to restricted shares |
|
|
(395 |
) |
|
|
(321 |
) |
|
|
(1,298 |
) |
|
|
(903 |
) |
|
Basic and diluted FFO available to common
share and common unit holders ("Basic and diluted FFO") |
|
|
37,772 |
|
|
|
35,038 |
|
|
|
120,040 |
|
|
|
99,416 |
|
|
Less: Straight-line rent adjustments |
|
|
(2,665 |
) |
|
|
(2,850 |
) |
|
|
(5,523 |
) |
|
|
(8,284 |
) |
|
Less: Amortization of deferred market rental revenue |
|
|
(451 |
) |
|
|
(555 |
) |
|
|
(1,447 |
) |
|
|
(1,458 |
) |
|
Less: Recurring capital expenditures |
|
|
(7,572 |
) |
|
|
(7,008 |
) |
|
|
(17,838 |
) |
|
|
(17,611 |
) |
|
Add: Amortization of discount on Exchangeable Senior Notes, net of amounts
capitalized |
|
|
762 |
|
|
|
828 |
|
|
|
2,183 |
|
|
|
2,446 |
|
|
Diluted adjusted funds from operations
available to common share and common unit holders ("Diluted AFFO") |
|
$ |
27,846 |
|
|
$ |
25,453 |
|
|
$ |
97,415 |
|
|
$ |
74,509 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares |
|
|
57,470 |
|
|
|
47,273 |
|
|
|
55,366 |
|
|
|
47,128 |
|
|
Conversion of weighted average common units |
|
|
5,084 |
|
|
|
8,130 |
|
|
|
5,932 |
|
|
|
8,145 |
|
|
Weighted average common shares/units - basic FFO per share |
|
|
62,554 |
|
|
|
55,403 |
|
|
|
61,298 |
|
|
|
55,273 |
|
|
Dilutive effect of share-based compensation awards |
|
|
485 |
|
|
|
779 |
|
|
|
506 |
|
|
|
765 |
|
|
Weighted average common shares/units - diluted FFO per share |
|
|
63,039 |
|
|
|
56,182 |
|
|
|
61,804 |
|
|
|
56,038 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per share |
|
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
1.94 |
|
|
$ |
1.77 |
|
|
Dividends/distributions per common share/unit |
|
$ |
0.3925 |
|
|
$ |
0.3725 |
|
|
$ |
1.1375 |
|
|
$ |
1.0525 |
|
|
Earnings payout ratio |
|
|
219.1 |
% |
|
|
233.3 |
% |
|
|
184.0 |
% |
|
|
223.7 |
% |
|
Diluted FFO payout ratio |
|
|
65.8 |
% |
|
|
63.4 |
% |
|
|
58.9 |
% |
|
|
60.5 |
% |
|
Diluted AFFO payout ratio |
|
|
89.2 |
% |
|
|
87.2 |
% |
|
|
72.6 |
% |
|
|
80.7 |
% |
|
EBITDA interest coverage ratio |
|
|
3.20x |
|
|
|
2.92x |
|
|
|
3.47x |
|
|
|
2.91x |
|
|
EBITDA fixed charge coverage ratio |
|
|
2.64x |
|
|
|
2.44x |
|
|
|
2.83x |
|
|
|
2.43x |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of denominators for diluted EPS and diluted FFO per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted EPS |
|
|
57,955 |
|
|
|
48,052 |
|
|
|
55,872 |
|
|
|
47,893 |
|
|
Weighted average common units |
|
|
5,084 |
|
|
|
8,130 |
|
|
|
5,932 |
|
|
|
8,145 |
|
|
Denominator for diluted FFO per share |
|
|
63,039 |
|
|
|
56,182 |
|
|
|
61,804 |
|
|
|
56,038 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Office Properties Trust |
|
|
|
|
|
|
|
|
|
Summary Financial Data |
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
(Dollars and shares in thousands, except per share data) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
|
| |
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
Balance Sheet Data (in thousands) (as of period end) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties, net of accumulated depreciation |
|
$ |
2,868,707 |
|
|
$ |
2,778,466 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
3,230,647 |
|
|
|
3,114,239 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
1,897,852 |
|
|
|
1,856,751 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,094,464 |
|
|
|
2,031,816 |
|
|
|
|
|
|
|
|
|
|
Beneficiaries' equity |
|
|
1,136,183 |
|
|
|
1,082,423 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt to total assets |
|
|
58.7 |
% |
|
|
59.6 |
% |
|
|
|
|
|
|
|
|
|
Debt to undepreciated book value of real estate assets |
|
|
56.7 |
% |
|
|
57.8 |
% |
|
|
|
|
|
|
|
|
|
Debt to total market capitalization |
|
|
42.6 |
% |
|
|
47.4 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Data (wholly owned properties)
(as of period end) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of operating properties owned |
|
|
246 |
|
|
|
238 |
|
|
|
|
|
|
|
|
|
|
Total net rentable square feet owned (in thousands) |
|
|
18,449 |
|
|
|
18,462 |
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
90.9 |
% |
|
|
93.2 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of denominator for debt
to total assets to denominator for debt to undepreciated book value of
real estate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for debt to total assets |
|
$ |
3,230,647 |
|
|
$ |
3,114,239 |
|
|
|
|
|
|
|
|
|
|
Assets other than assets included in properties, net |
|
|
(361,940 |
) |
|
|
(335,773 |
) |
|
|
|
|
|
|
|
|
|
Accumulated depreciation on real estate assets |
|
|
402,125 |
|
|
|
343,110 |
|
|
|
|
|
|
|
|
|
|
Intangible assets on real estate acquisitions, net |
|
|
75,506 |
|
|
|
91,848 |
|
|
|
|
|
|
|
|
|
|
Denominator for debt to undepreciated book value of real estate assets |
|
$ |
3,346,338 |
|
|
$ |
3,213,424 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
September 30, |
| |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
Reconciliation of tenant improvements
and incentives, capital improvements and leasing costs for operating properties
to recurring capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total tenant improvements and incentives on operating properties |
|
$ |
3,553 |
|
|
$ |
6,305 |
|
|
$ |
11,604 |
|
|
$ |
14,883 |
|
|
Total capital improvements on operating properties |
|
|
2,927 |
|
|
|
3,179 |
|
|
|
6,763 |
|
|
|
6,827 |
|
|
Total leasing costs on operating properties |
|
|
1,855 |
|
|
|
999 |
|
|
|
4,431 |
|
|
|
2,764 |
|
|
Less: Nonrecurring tenant improvements and incentives on operating properties
|
|
|
(711 |
) |
|
|
(1,995 |
) |
|
|
(2,780 |
) |
|
|
(4,077 |
) |
|
Less: Nonrecurring capital improvements on operating properties |
|
|
(58 |
) |
|
|
(1,299 |
) |
|
|
(1,340 |
) |
|
|
(2,667 |
) |
|
Less: Nonrecurring leasing costs incurred on operating properties |
|
|
- |
|
|
|
(217 |
) |
|
|
(916 |
) |
|
|
(269 |
) |
|
Add: Recurring capital expenditures on operating properties held through
joint ventures |
|
|
6 |
|
|
|
36 |
|
|
|
76 |
|
|
|
150 |
|
|
Recurring capital expenditures |
|
$ |
7,572 |
|
|
$ |
7,008 |
|
|
$ |
17,838 |
|
|
$ |
17,611 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Corporate Office Properties Trust |
|
Summary Financial Data |
|
(unaudited) |
|
(Dollars in thousands) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
September 30, |
| |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
Reconciliation of dividends for earnings
payout ratio to dividends and distributions for FFO & AFFO payout ratio
|
|
|
|
|
|
|
|
|
|
Common share dividends for earnings payout ratio |
|
$ |
22,851 |
|
|
$ |
19,183 |
|
|
$ |
64,712 |
|
|
$ |
51,553 |
|
|
Common unit distributions |
|
|
1,995 |
|
|
|
3,021 |
|
|
|
5,974 |
|
|
|
8,564 |
|
|
Dividends and distributions for FFO & AFFO payout ratio |
|
$ |
24,846 |
|
|
$ |
22,204 |
|
|
$ |
70,686 |
|
|
$ |
60,117 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net income to
earnings before interest, income taxes, depreciation and amortization
("EBITDA") |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
15,536 |
|
|
$ |
13,788 |
|
|
$ |
51,753 |
|
|
$ |
39,879 |
|
|
Interest expense on continuing operations |
|
|
20,986 |
|
|
|
22,503 |
|
|
|
59,088 |
|
|
|
65,580 |
|
|
Interest expense on discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
51 |
|
|
Income tax expense |
|
|
47 |
|
|
|
97 |
|
|
|
169 |
|
|
|
680 |
|
|
Real estate-related depreciation and amortization |
|
|
26,712 |
|
|
|
25,583 |
|
|
|
81,911 |
|
|
|
75,482 |
|
|
Depreciation of furniture, fixtures and equipment |
|
|
458 |
|
|
|
401 |
|
|
|
1,261 |
|
|
|
1,177 |
|
|
EBITDA |
|
$ |
63,739 |
|
|
$ |
62,372 |
|
|
$ |
194,182 |
|
|
$ |
182,849 |
|
| |
|
|
|
|
|
|
|
|
|
Reconciliation of interest expense
from continuing operations to the denominators for interest coverage-EBITDA
and fixed charge coverage-EBITDA |
|
|
|
|
|
|
|
|
|
Interest expense from continuing operations |
|
$ |
20,986 |
|
|
$ |
22,503 |
|
|
$ |
59,088 |
|
|
$ |
65,580 |
|
|
Interest expense from discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
51 |
|
|
Less: Amortization of deferred financing costs |
|
|
(1,056 |
) |
|
|
(1,143 |
) |
|
|
(3,089 |
) |
|
|
(2,805 |
) |
|
Denominator for interest coverage-EBITDA |
|
|
19,930 |
|
|
|
21,360 |
|
|
|
55,999 |
|
|
|
62,826 |
|
|
Preferred share dividends |
|
|
4,025 |
|
|
|
4,025 |
|
|
|
12,076 |
|
|
|
12,076 |
|
|
Preferred unit distributions |
|
|
165 |
|
|
|
165 |
|
|
|
495 |
|
|
|
495 |
|
|
Denominator for fixed charge coverage-EBITDA |
|
$ |
24,120 |
|
|
$ |
25,550 |
|
|
$ |
68,570 |
|
|
$ |
75,397 |
|
| |
|
|
|
|
|
|
|
|
|
Reconciliation of same property net
operating income to same office property cash net operating income and
same office property cash net operating income, excluding gross lease
termination fees |
|
|
|
|
|
|
|
|
|
Same office property net operating income |
|
$ |
63,608 |
|
|
$ |
62,412 |
|
|
$ |
185,660 |
|
|
$ |
179,560 |
|
|
Less: Straight-line rent adjustments |
|
|
(733 |
) |
|
|
(2,529 |
) |
|
|
(2,204 |
) |
|
|
(6,683 |
) |
|
Less: Amortization of deferred market rental revenue |
|
|
(385 |
) |
|
|
(480 |
) |
|
|
(944 |
) |
|
|
(1,117 |
) |
|
Same office property cash net operating income |
|
$ |
62,490 |
|
|
$ |
59,403 |
|
|
$ |
182,512 |
|
|
$ |
171,760 |
|
|
Less: Lease termination fees, gross |
|
|
(966 |
) |
|
|
(209 |
) |
|
|
(5,184 |
) |
|
|
(368 |
) |
|
Same office property cash net operating
income, excluding gross lease termination fees |
|
$ |
61,524 |
|
|
$ |
59,194 |
|
|
$ |
177,328 |
|
|
$ |
171,392 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Top Twenty Office Tenants of Wholly Owned Properties as of September
30, 2009 (1) |
|
(Dollars in thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Percentage of |
|
Total |
|
Percentage |
|
Weighted |
| |
|
|
|
|
|
Total |
|
Total |
|
Annualized |
|
of Total |
|
Average |
| |
|
|
|
Number of |
|
Occupied |
|
Occupied |
|
Rental |
|
Annualized Rental |
|
Remaining |
|
Tenant |
|
|
|
Leases |
|
Square Feet |
|
Square Feet |
|
Revenue (2) (3) |
|
Revenue |
|
Lease Term (4) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States of America |
|
(5) |
|
67 |
|
2,649,894 |
|
15.8 |
% |
|
|
75,570 |
|
18.7 |
% |
|
6.2 |
|
Northrop Grumman Corporation |
|
(6) |
|
15 |
|
1,135,642 |
|
6.8 |
% |
|
|
30,218 |
|
7.5 |
% |
|
6.0 |
|
Booz Allen Hamilton, Inc. |
|
|
|
9 |
|
738,284 |
|
4.4 |
% |
|
|
21,545 |
|
5.3 |
% |
|
5.5 |
|
Computer Sciences Corporation |
|
(6) |
|
3 |
|
454,986 |
|
2.7 |
% |
|
|
12,475 |
|
3.1 |
% |
|
1.8 |
|
L-3 Communications Holdings, Inc. |
|
(6) |
|
5 |
|
266,943 |
|
1.6 |
% |
|
|
9,877 |
|
2.4 |
% |
|
4.5 |
|
General Dynamics Corporation |
|
(6) |
|
10 |
|
299,153 |
|
1.8 |
% |
|
|
8,302 |
|
2.1 |
% |
|
1.3 |
|
Wells Fargo & Company |
|
(6) |
|
7 |
|
218,199 |
|
1.3 |
% |
|
|
7,764 |
|
1.9 |
% |
|
8.4 |
|
The Aerospace Corporation |
|
(6) |
|
3 |
|
245,935 |
|
1.5 |
% |
|
|
7,523 |
|
1.9 |
% |
|
5.3 |
|
ITT Corporation |
|
(6) |
|
8 |
|
305,689 |
|
1.8 |
% |
|
|
7,223 |
|
1.8 |
% |
|
4.8 |
|
Integral Systems, Inc. |
|
(6) |
|
4 |
|
241,504 |
|
1.4 |
% |
|
|
6,062 |
|
1.5 |
% |
|
10.4 |
|
Comcast Corporation |
|
(6) |
|
7 |
|
306,123 |
|
1.8 |
% |
|
|
6,011 |
|
1.5 |
% |
|
4.1 |
|
AT&T Corporation |
|
(6) |
|
5 |
|
306,932 |
|
1.8 |
% |
|
|
5,955 |
|
1.5 |
% |
|
3.7 |
|
Unisys Corporation |
|
|
|
2 |
|
258,498 |
|
1.5 |
% |
|
|
4,631 |
|
1.1 |
% |
|
0.5 |
|
The Boeing Company |
|
(6) |
|
4 |
|
144,227 |
|
0.9 |
% |
|
|
4,467 |
|
1.1 |
% |
|
4.0 |
|
Ciena Corporation |
|
|
|
4 |
|
229,842 |
|
1.4 |
% |
|
|
4,391 |
|
1.1 |
% |
|
3.7 |
|
BAE Systems PLC |
|
(6) |
|
7 |
|
211,805 |
|
1.3 |
% |
|
|
3,235 |
|
0.8 |
% |
|
5.8 |
|
The Johns Hopkins Institutions |
|
(6) |
|
4 |
|
128,827 |
|
0.8 |
% |
|
|
3,234 |
|
0.8 |
% |
|
3.1 |
|
Merck & Co., Inc. |
|
(6) |
|
2 |
|
225,900 |
|
1.3 |
% |
|
|
2,772 |
|
0.7 |
% |
|
7.0 |
|
Lockheed Martin Corporation |
|
|
|
5 |
|
143,943 |
|
0.9 |
% |
|
|
2,683 |
|
0.7 |
% |
|
2.8 |
|
Magellan Health Services, Inc. |
|
|
|
2 |
|
113,727 |
|
0.7 |
% |
|
|
2,681 |
|
0.7 |
% |
|
2.6 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Top 20 Office Tenants |
|
|
|
173 |
|
8,626,053 |
|
51.4 |
% |
|
|
226,619 |
|
56.2 |
% |
|
5.3 |
|
All remaining tenants |
|
|
|
702 |
|
8,151,421 |
|
48.6 |
% |
|
|
176,721 |
|
43.8 |
% |
|
3.6 |
|
Total/Weighted Average |
|
|
|
875 |
|
16,777,474 |
|
100.0 |
% |
|
$ |
403,340 |
|
100.0 |
% |
|
4.5 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Table excludes owner occupied leasing
activity which represents 164,257 square feet with a weighted average
remaining lease term of 5.8 years as of September 30, 2009. |
|
(2) |
|
Total Annualized Rental Revenue is the
monthly contractual base rent as of September 30, 2009, multiplied by
12, plus the estimated annualized expense reimbursements under existing
office leases. |
|
(3) |
|
Order of tenants is based on Annualized
Rent. |
|
(4) |
|
The weighting of the lease term was computed
using Total Rental Revenue. |
|
(5) |
|
Many of our government leases are subject
to early termination provisions which are customary to government leases.
|
| |
|
The weighted average remaining lease term was computed assuming no exercise
of such early termination rights. |
|
(6) |
|
Includes affiliated organizations or agencies.
|
| |
|
|
Source: Corporate Office Properties
Trust (COPT)
Corporate Office Properties Trust (COPT)
Mary Ellen Fowler
Senior Vice President and Treasurer
443-285-5450
maryellen.fowler@copt.com
|
