COPT Reports Second Quarter 2019 Results

EPS of $0.95 & FFO per Share of $0.52 Exceed Guidance

$0.75 per Share Gain on JV Contribution Drove EPS Outperformance

Strong Same-Property Cash NOI Growth of 4.5% Drove FFO Outperformance

Core Portfolio 92.9% Occupied & 94.1% Leased

606,000 SF of Development Placed into Service 100% Leased

Record Leasing Volumes

1.6 Million SF Total Leasing Completed in 2Q19

2Q19 and 1H19 Vacancy Leasing Volumes Are Double 2018 Levels

Solid Tenant Retention in 2Q19 of 81.1%; Increasing Annual Guidance to 75%─80%

Adjusting Full Year 2019 Cash Rent Spreads on Renewals to Incorporate Incremental Early Renewals

Development Leasing of 652,000 SF in 2Q19; 1.7 Million SF To-Date

Raising 2019 Development Leasing Goal Further; Now Expect 2 Million SF

Affirming Full-Year FFO per Share Guidance

Increasing Development Spend Guidance by another $75 Million, to $400─$450 Million

Contributing Two Additional Data Center Shells in 4Q19 to Recent Joint Venture

Highly-Leased Development Pipeline Expected to Drive Outsized FFO Growth in 2021

COLUMBIA, Md.–(BUSINESS WIRE)–Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced financial and operating results for the second quarter ended June 30, 2019.

Management Comments

Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Second quarter FFO per share exceeded the high-end of our guidance, driven in part by stronger-than-anticipated growth in same-property cash NOI of 4.5%. The strength of demand recovery throughout our Defense/IT locations continues to support record-levels of lease achievement, and we have already exceeded our previously elevated full-year goal of leasing 1.4 million square feet in development projects, setting a new corporate record for annual development leasing volume. Based on the pipeline of opportunities before us, we are increasing our development leasing target to 2.0 million square feet.” He continued, “As important, in June we created a strategic joint venture with a world class investment group. Proceeds from this venture fund our 2019 development investment needs, as well as most of our expected 2020 development investment.”

Financial Highlights

2nd Quarter Financial Results:

  • Diluted earnings per share (“EPS”) was $0.95 for the quarter ended June 30, 2019 as compared to $0.19 for the second quarter of 2018. Second quarter 2019 EPS included a $0.75 per share gain on sale from contributing a 90% interest in seven data center shells to a joint venture with Blackstone Real Estate Income Trust, Inc. (“BREIT”).
  • Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition and as adjusted for comparability, was $0.52 for the second quarter of 2019 as compared to $0.51 for second quarter 2018 results.

Operating Performance Highlights

Operating Portfolio Summary:

  • At June 30, 2019, the Company’s core portfolio of 167 operating office properties was 92.9% occupied and 94.1% leased.
  • During the quarter, the Company placed all or portions of five developments aggregating 606,000 square feet into service that were 100% leased. During the six months ended June 30, 2019, the Company placed 787,000 square feet into service in properties that were 100% leased.

Same-Property Performance:

  • At June 30, 2019, COPT’s same-property portfolio of 150 buildings was 92.0% occupied and 93.3% leased.
  • For the quarter ended June 30, 2019, the Company’s total same-property cash NOI increased 4.5% over the prior year’s comparable period, driven by a 5.4% increase in same-property cash NOI from Defense/IT locations.

Leasing:

  • Total Square Feet Leased―For the quarter ended June 30, 2019, the Company leased 1.6 million total square feet, including 659,000 square feet of renewing leases, 245,000 square feet of new leases on vacant space, and 652,000 square feet in development projects.

    For the six months ended June 30, 2019, the Company leased 2.5 million total square feet, including 950,000 square feet of renewing leases, 371,000 square feet of new leases on vacant space, and 1.2 million square feet in development projects.

  • Renewal Rates―During the quarter and six months ended June 30, 2019, the Company respectively renewed 81.1% and 77.8% of total expiring leases.
  • Cash Rent Spreads & Average Escalations on Renewing Leases―For the quarter and six months ended June 30, 2019, cash rents on renewed space decreased 3.3% and 4.6%, respectively. For the same time periods, average annual escalations on renewing leases were 2.6%.
  • Lease Terms―In the second quarter, lease terms averaged 2.8 years on renewing leases, 6.4 years on new leasing of vacant space, and 11.0 years on development leasing. For the six months, lease terms averaged 3.1 years on renewing leases, 6.1 years on new leasing of vacant space, and 12.0 years on development leasing.

Investment Activity Highlights

Development & Redevelopment Projects:

  • Construction Pipeline. At July 29, 2019, the Company’s construction pipeline consisted of 13 properties totaling 2.1 million square feet that were 83% leased. These projects have a total estimated cost of $579.3 million, of which $236.3 million has been incurred.
  • Redevelopment. At June 30, 2019, one project was under redevelopment totaling 106,000 square feet that was 67% leased. The Company has invested $18.1 million of the $25.5 million anticipated total cost.

Balance Sheet and Capital Transaction Highlights

  • On June 20, 2019, the Company raised $238.5 million of proceeds to fund development by contributing a 90% interest in seven data center shell properties to a joint venture with BREIT. The Company owns a 10% interest in the joint venture.
  • As of June 30, 2019, the Company’s net debt plus preferred equity to adjusted book ratio was 36.2% and its net debt plus preferred equity to in-place adjusted EBITDA ratio was 5.7x. For the same period, the Company’s adjusted EBITDA fixed charge coverage ratio was 3.7x.
  • As of June 30, 2019, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate was 4.15%; additionally, 95.1% of the Company’s debt was subject to fixed interest rates and the consolidated debt portfolio had a weighted average maturity of 4.0 years.

2019 Guidance

Management is increasing its previously issued guidance range of $1.34―$1.38 for full year EPS to include the gain on sale from contributing two more data center shell properties in the fourth quarter. The new range for full year EPS is $1.52─$1.56. The Company is reiterating its previously issued guidance range for full year FFOPS, as adjusted for comparability, of $2.01―$2.05.

Management also is establishing EPS and FFOPS, as adjusted for comparability, guidance for the third quarter ending September 30, 2019 at ranges of $0.14―$0.16 and $0.49―$0.51, respectively. Reconciliations of projected diluted EPS to projected FFOPS are as follows:

Reconciliation of EPS to FFOPS, per Nareit and

Quarter ending

Year ending

As Adjusted for Comparability

September 30, 2019

December 31, 2019

Low

High

Low

High

 
EPS

$

0.14

$

0.16

$

1.52

 

$

1.56

 

Real estate depreciation and amortization

 

0.35

 

0.35

 

1.40

 

 

1.40

 

Gain on sales of real estate

 

 

 

(0.91

)

 

(0.91

)

FFOPS, Nareit definition and as adjusted for comparability

$

0.49

$

0.51

$

2.01

 

$

2.05

 

Updated Full-Year Guidance AssumptionsManagement is updating the following assumptions for its full-year guidance:

  • Development Leasing Objective. Management is increasing its development leasing goal for the year, from the previously elevated target of 1.4 million square feet, to a new target of 2.0 million square feet.
  • Development Spend. Due to its expanded set of development opportunities, the Company is increasing its development investment guidance by $75 million, from the prior elevated range of $325─$375 million, to a new range of $400─$450 million.
  • Proceeds from Asset Sales. To fund its value-added developments, the Company is increasing its disposition guidance for the year from the previously elevated range of $200─$225 million, to $300 million.
  • Same Property Cash NOI Growth. The Company’s initial guidance assumes cash NOI from same-properties would increase 1.5%-3% for the year; the Company is increasing its assumption to growth of between 2.75%─3.25%.
  • Renewal Rates. The Company is increasing its tenant retention guidance for the full year from its original range of 70%─75% to a new range of 75%─80%.
  • Cash Rent Spreads on Renewing Leases. To incorporate the impact of executing sizeable early renewals that will be incremental to its original forecast, the Company is lowering its full-year guidance for cash rents on renewing leases, from the prior range of flat to down 2%, to a new range of (5%)─(4%).

Associated Supplemental Presentation

Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second quarter 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 second quarter 2019 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:

Conference Call Date:

Tuesday, July 30, 2019

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:

9254219

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 available immediately via webcast on COPT’s Investors website. Additionally, a telephonic replay of this call will be available beginning at 3:00 p.m. Eastern Time on Tuesday, July 30 through 3:00 p.m. Eastern Time on Tuesday, August 13. To access the replay within the United States, please call 855-859-2056; to access it from outside the United States, please call 404-537-3406. In either case, use passcode 9254219.

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.

Company Information

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties 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, 2019, the Company derived 88% of its core portfolio annualized revenue from Defense/IT Locations and 12% from its Regional Office Properties. As of the same date and including 13 buildings owned through unconsolidated joint ventures, COPT’s core portfolio of 167 office and data center shell properties encompassed 18.8 million square feet and was 94.1% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts.

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.

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

  • general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values;
  • adverse changes in the real estate markets including, among other things, increased competition with other companies;
  • governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases, and/or reduced or delayed demand for additional space by the Company’s strategic customers;
  • the Company’s ability to borrow on favorable terms;
  • risks of real estate acquisition and development activities, 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;
  • changes in the Company’s plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of significant impairment losses;
  • the Company’s ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;
  • possible adverse changes in tax laws;
  • the dilutive effects of issuing additional common shares;
  • the Company’s ability to achieve projected results;
  • security breaches relating to cyber attacks, cyber intrusions or other factors; 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, 2018.

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,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

Revenues from real estate operations

$

132,771

 

 

$

129,162

 

 

$

264,761

 

 

$

257,440

 

Construction contract and other service revenues

42,299

 

 

17,581

 

 

59,249

 

 

44,779

 

Total revenues

175,070

 

 

146,743

 

 

324,010

 

 

302,219

 

Operating expenses

 

 

 

 

 

 

 

Property operating expenses

47,886

 

 

49,446

 

 

97,331

 

 

100,397

 

Depreciation and amortization associated with real estate operations

34,802

 

 

33,190

 

 

69,598

 

 

66,702

 

Construction contract and other service expenses

41,002

 

 

16,941

 

 

57,328

 

 

43,157

 

General and administrative expenses

7,650

 

 

6,067

 

 

14,369

 

 

11,928

 

Leasing expenses

1,736

 

 

1,561

 

 

3,768

 

 

2,992

 

Business development expenses and land carry costs

870

 

 

1,234

 

 

1,983

 

 

2,848

 

Total operating expenses

133,946

 

 

108,439

 

 

244,377

 

 

228,024

 

Interest expense

(18,475

)

 

(18,945

)

 

(37,149

)

 

(37,729

)

Interest and other income

1,849

 

 

1,439

 

 

4,135

 

 

2,798

 

Gain on sales of real estate

84,469

 

 

(23

)

 

84,469

 

 

(27

)

Income before equity in income of unconsolidated entities and income taxes

108,967

 

 

20,775

 

 

131,088

 

 

39,237

 

Equity in income of unconsolidated entities

420

 

 

373

 

 

811

 

 

746

 

Income tax benefit (expense)

176

 

 

(63

)

 

(18

)

 

(118

)

Net income

109,563

 

 

21,085

 

 

131,881

 

 

39,865

 

Net income attributable to noncontrolling interests:

 

 

 

 

 

 

 

Common units in the Operating Partnership (“OP”)

(1,339

)

 

(608

)

 

(1,596

)

 

(1,152

)

Preferred units in the OP

(165

)

 

(165

)

 

(330

)

 

(330

)

Other consolidated entities

(1,268

)

 

(878

)

 

(2,305

)

 

(1,799

)

Net income attributable to COPT common shareholders

$

106,791

 

 

$

19,434

 

 

$

127,650

 

 

$

36,584

 

 

 

 

 

 

 

 

 

Earnings per share (“EPS”) computation:

 

 

 

 

 

 

 

Numerator for diluted EPS:

 

 

 

 

 

 

 

Net income attributable to COPT common shareholders

$

106,791

 

 

$

19,434

 

 

$

127,650

 

 

$

36,584

 

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

(346

)

 

(117

)

 

(391

)

 

(234

)

Numerator for diluted EPS

$

107,512

 

 

$

19,317

 

 

$

128,840

 

 

$

36,350

 

Denominator:

 

 

 

 

 

 

 

Weighted average common shares – basic

111,557

 

 

101,789

 

 

110,759

 

 

101,397

 

Dilutive effect of share-based compensation awards

310

 

 

119

 

 

289

 

 

131

 

Dilutive effect of redeemable noncontrolling interests

1,062

 

 

 

 

130

 

 

 

Dilutive convertible preferred units

176

 

 

 

 

 

 

 

Common units in the OP

 

 

 

 

1,329

 

 

 

Weighted average common shares – diluted

113,105

 

 

101,908

 

 

112,507

 

 

101,528

 

Diluted EPS

$

0.95

 

 

$

0.19

 

 

$

1.15

 

 

$

0.36

 

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,

 

2019

 

2018

 

2019

 

2018

Net income

$

109,563

 

 

$

21,085

 

 

$

131,881

 

 

$

39,865

 

Real estate-related depreciation and amortization

34,802

 

 

33,190

 

 

69,598

 

 

66,702

 

Gain on sales of real estate

(84,469

)

 

23

 

 

(84,469

)

 

27

 

Depreciation and amortization on unconsolidated real estate JVs

566

 

 

564

 

 

1,132

 

 

1,127

 

Funds from operations (“FFO”)

60,462

 

 

54,862

 

 

118,142

 

 

107,721

 

Noncontrolling interests – preferred units in the OP

(165

)

 

(165

)

 

(330

)

 

(330

)

FFO allocable to other noncontrolling interests

(1,188

)

 

(753

)

 

(2,159

)

 

(1,697

)

Basic and diluted FFO allocable to share-based compensation awards

(229

)

 

(224

)

 

(414

)

 

(437

)

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

58,880

 

 

53,720

 

 

115,239

 

 

105,257

 

Redeemable noncontrolling interests

33

 

 

 

 

942

 

 

 

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

58,913

 

 

53,720

 

 

116,181

 

 

105,257

 

Demolition costs on redevelopment and nonrecurring improvements

 

 

9

 

 

44

 

 

48

 

Executive transition costs

 

 

213

 

 

4

 

 

376

 

Non-comparable professional and legal expenses

311

 

 

 

 

311

 

 

 

Diluted FFO comparability adjustments allocable to share-based compensation awards

(2

)

 

(1

)

 

(2

)

 

(2

)

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

59,222

 

 

53,941

 

 

116,538

 

 

105,679

 

Straight line rent adjustments and lease incentive amortization

1,051

 

 

(1,195

)

 

(616

)

 

(2,023

)

Amortization of intangibles included in net operating income

(50

)

 

231

 

 

12

 

 

587

 

Share-based compensation, net of amounts capitalized

1,623

 

 

1,550

 

 

3,296

 

 

3,035

 

Amortization of deferred financing costs

529

 

 

468

 

 

1,057

 

 

936

 

Amortization of net debt discounts, net of amounts capitalized

374

 

 

358

 

 

744

 

 

712

 

Accum. other comprehensive loss on derivatives amortized to expense

33

 

 

34

 

 

67

 

 

68

 

Replacement capital expenditures

(16,002

)

 

(15,613

)

 

(27,175

)

 

(31,133

)

Other diluted AFFO adjustments associated with real estate JVs

181

 

 

(32

)

 

214

 

 

99

 

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

$

46,961

 

 

$

39,742

 

 

$

94,137

 

 

$

77,960

 

Diluted FFO per share

$

0.52

 

 

$

0.51

 

 

$

1.02

 

 

$

1.00

 

Diluted FFO per share, as adjusted for comparability

$

0.52

 

 

$

0.51

 

 

$

1.03

 

 

$

1.01

 

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,

2019

 

December 31,

2018

Balance Sheet Data

 

 

 

Properties, net of accumulated depreciation

$

3,194,372

 

 

$

3,250,626

 

Total assets

 

3,803,469

 

 

 

3,656,005

 

Debt, per balance sheet

 

1,784,362

 

 

 

1,823,909

 

Total liabilities

 

2,054,555

 

 

 

2,002,697

 

Redeemable noncontrolling interest

 

29,803

 

 

 

26,260

 

Equity

 

1,719,111

 

 

 

1,627,048

 

Net debt to adjusted book

 

36.1

%

 

 

38.9

%

 

 

 

 

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

 

 

 

Number of operating properties

 

167

 

 

 

161

 

Total net rentable square feet owned (in thousands)

 

18,788

 

 

 

17,937

 

Occupancy %

 

92.9

%

 

 

93.1

%

Leased %

 

94.1

%

 

 

94.0

%

 

 

 

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

2019

 

2018

 

2019

 

2018

Payout ratios

 

 

 

 

 

 

 

Diluted FFO

52.7

%

 

54.3

%

 

53.5

%

 

55.1

%

Diluted FFO, as adjusted for comparability

52.4

%

 

54.1

%

 

53.3

%

 

54.9

%

Diluted AFFO

66.1

%

 

73.4

%

 

66.0

%

 

74.4

%

Adjusted EBITDA fixed charge coverage ratio

3.7x

 

3.6x

 

3.7x

 

3.6x

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

5.7x

 

6.3x

 

N/A

 

 

N/A

 

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

5.7x

 

6.3x

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

Reconciliation of denominators for per share measures

Denominator for diluted EPS

113,105

 

 

101,908

 

 

112,507

 

 

101,528

 

Weighted average common units

1,327

 

 

3,197

 

 

 

3,208

 

Redeemable noncontrolling interests

(926

)

 

 

907

 

 

Dilutive convertible preferred units

(176

)

 

 

 

Denominator for diluted FFO per share and as adjusted for comparability

113,330

 

 

105,105

 

 

113,414

 

 

104,736

 

 

 

 

 

 

 

 

 

(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,

 

2019

 

2018

 

2019

 

2018

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

 

 

 

 

 

 

 

Common share dividends – unrestricted shares and deferred shares

$

30,693

 

 

$

28,284

 

 

$

61,378

 

 

$

56,258

 

Common unit distributions – unrestricted units

365

 

 

879

 

 

730

 

 

1,758

 

Dividends and distributions for payout ratios

$

31,058

 

 

$

29,163

 

 

$

62,108

 

 

$

58,016

 

 

 

 

 

 

 

 

 

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

$

109,563

 

 

$

21,085

 

 

$

131,881

 

 

$

39,865

 

Interest expense

18,475

 

 

18,945

 

 

37,149

 

 

37,729

 

Income tax (benefit) expense

(176

)

 

63

 

 

18

 

 

118

 

Depreciation of furniture, fixtures and equipment

496

 

 

459

 

 

929

 

 

982

 

Real estate-related depreciation and amortization

34,802

 

 

33,190

 

 

69,598

 

 

66,702

 

Gain on sales of real estate

(84,469

)

 

23

 

 

(84,469

)

 

27

 

Adjustments from unconsolidated real estate JVs

830

 

 

828

 

 

1,657

 

 

1,652

 

EBITDAre

79,521

 

 

74,593

 

 

156,763

 

 

147,075

 

Net gain on other investments

(12

)

 

 

 

(400

)

 

 

Business development expenses

460

 

 

757

 

 

1,008

 

 

1,780

 

Non-comparable professional and legal expenses

311

 

 

 

 

311

 

 

 

Demolition costs on redevelopment and nonrecurring improvements

 

 

9

 

 

44

 

 

48

 

Executive transition costs

 

 

213

 

 

4

 

 

376

 

Adjusted EBITDA

80,280

 

 

75,572

 

 

$

157,730

 

 

$

149,279

 

Proforma net operating income adjustment for property changes within period

(1,981

)

 

418

 

 

 

 

 

In-place adjusted EBITDA

$

78,299

 

 

$

75,990

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Interest expense

$

18,475

 

 

$

18,945

 

 

$

37,149

 

 

$

37,729

 

Less: Amortization of deferred financing costs

(529

)

 

(468

)

 

(1,057

)

 

(936

)

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

(374

)

 

(358

)

 

(744

)

 

(712

)

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

(33

)

 

(34

)

 

(67

)

 

(68

)

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

258

 

 

258

 

 

513

 

 

513

 

Scheduled principal amortization

1,095

 

 

1,049

 

 

2,193

 

 

2,101

 

Capitalized interest

2,388

 

 

1,397

 

 

4,392

 

 

2,771

 

Preferred unit distributions

165

 

 

165

 

 

330

 

 

330

 

Denominator for fixed charge coverage-Adjusted EBITDA

$

21,445

 

 

$

20,954

 

 

$

42,709

 

 

$

41,728

 

 

 

 

 

 

 

 

 

Contacts

IR Contacts:

Stephanie Krewson-Kelly

443-285-5453

stephanie.kelly@copt.com

Michelle Layne

443-285-5452

michelle.layne@copt.com

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