COPT Reports Second Quarter 2014 Results

  COPT Reports Second Quarter 2014 Results

Business Wire

COLUMBIA, Md. -- July 25, 2014

Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC)
announced financial and operating results for the second quarter ended June
30, 2014.

“Second quarter results were at the high end of our guidance range, reflecting
better expense management at the property level,” stated Roger A. Waesche,
Jr., COPT’s President & Chief Executive Officer. “Based on leasing already
executed, and the leasing momentum we are experiencing across the majority of
our portfolio, we are highly confident that FFO per share will now trend
higher, beginning with this third quarter,” he added.

Results:

Diluted earnings per share (“EPS”) was $0.02 for the quarter ended June 30,
2014 as compared to $(0.16) in the second quarter of 2013. Per NAREIT’s
definition, diluted funds from operations per share (“FFOPS”) for the second
quarter of 2014 was $0.37 versus $0.25 reported in the second quarter of 2013.
FFOPS, as adjusted for comparability, was $0.44 for the quarter ended June 30,
2014 as compared to $0.52 reported for the second quarter of 2013. Adjustments
for comparability could encompass items such as acquisition costs, impairment
losses and gains on non-operating properties (net of related tax adjustments),
losses (gains) on early extinguishment of debt and write-offs of original
issuance costs for redeemed preferred stock. Please refer to the
reconciliation tables that appear later in this press release.

Operating Performance:

Portfolio Summary – At June 30, 2014, the Company’s total portfolio of 180
operating office properties totaled 16.9 million square feet. The Company’s
total portfolio was 89.3% occupied and 91.4% leased as of June 30, 2014.
Excluding eight buildings held for sale at June 30, 2014, the Company’s core
portfolio of 172 buildings contained 16.6 million square feet that were 90.0%
occupied and 92.2% leased.

Same Office Performance – The Company’s same office portfolio for the quarter
ended June 30, 2014 represents 91% of the Company’s core rentable square feet
and consists of 161 properties. The Company’s same office portfolio was 90.8%
occupied at June 30, 2014, up 20 basis points from the second quarter of 2013.
For the second quarter ended June 30, 2014, the Company’s same office property
cash NOI, excluding gross lease termination fees, decreased 0.4% as compared
to the second quarter of 2013.

Leasing – COPT leased approximately 680,000 square feet of office space during
the quarter ended June 30, 2014, achieving a 74% renewal rate. For the quarter
ended June 30, 2014, rents on renewed space increased 5.9% on a GAAP basis and
decreased 4.8% on a cash basis. For the six months ended June 30, 2014, the
Company has leased 1.1 million square feet and achieved a 69% renewal rate.

Investment Activity:

Developments – At June 30, 2014, the Company had eight properties totaling 1.1
million square feet under construction for a total projected cost of $271.9
million, of which $131.6 million had been incurred. These eight projects were
50% pre-leased at July 24, 2014.

Redevelopments – As of the same date, COPT had four properties under
redevelopment totaling approximately 276,000 square feet that, at June 30,
2014, were 40% pre-leased.

Dispositions – The Company had eight operating properties held for sale,
totaling approximately 303,000 square feet that, at June 30, 2014, were 49.9%
leased and 48.3% occupied.

Balance Sheet and Capital Transactions:

As of June 30, 2014, the Company’s debt to adjusted book ratio was 43.9% and
its adjusted EBITDA fixed charge coverage ratio was 2.5x. Also, the Company’s
weighted average interest rate was 4.2% for the quarter ended June 30, 2014
and 92% of the Company’s debt was subject to fixed interest rates, including
the effect of interest rate swaps.

During the quarter, the Company issued $300 million of 3.70% senior unsecured
notes due June 15, 2021 at a price equal to 99.739% of the principal amount.
Also during the quarter, the Company redeemed all of its 2,000,000 outstanding
7.5% Series H Cumulative Redeemable Preferred Shares, at a price of $25.3230
per share including accrued and unpaid dividends through the date of
redemption.

2014 FFO Guidance:

Management is narrowing its previously issued guidance for 2014 FFOPS, as
adjusted for comparability, from the prior range of $1.85–$1.92, to a new
range of $1.86–$1.90. Management is establishing guidance for third quarter
2014 FFOPS, as adjusted for comparability, of $0.46–$0.48, and for the fourth
quarter 2014 of $0.48-$0.50. A reconciliation of projected diluted EPS to
projected FFOPS for the quarter ending September 30, 2014 and the quarter and
year ending December 31, 2014 is provided, as follows:

                                                             
                 Quarter ending          Quarter ending          Year ending
                 September 30, 2014      December 31, 2014       December 31, 2014
                 Low        High        Low        High        Low        High
                                                                             
EPS              $ 0.03      $ 0.05      $ 0.78      $ 0.80      $ 0.86      $ 0.90
Real estate
depreciation       0.34        0.34        0.34        0.34        1.50        1.50
and
amortization
Gains on sales
of previously      0.05        0.05        -           -           0.05        0.05
depreciated
properties
Impairment
losses on
previously        -         -         -         -         (0.01 )    (0.01 )
depreciated
properties
FFOPS, NAREIT      0.42        0.44        1.12        1.14        2.40        2.44
definition
                                                                             
NOI from
properties to      (0.01 )     (0.01 )     (0.01 )     (0.01 )     (0.03 )     (0.03 )
be conveyed
(a)
Interest
expense on
loan secured       0.05        0.05        0.05        0.05        0.15        0.15
by properties
to be conveyed
(a)
Net gains on
extinguishment     -           -           (0.68 )     (0.68 )     (0.68 )     (0.68 )
of debt (b)
Issuance cost
of redeemed        -           -           -           -           0.02        0.02
preferred
shares
                                                                        
FFOPS, as
adjusted for     $ 0.46     $ 0.48     $ 0.48     $ 0.50     $ 1.86     $ 1.90  
comparability
                                                                             

   
     The Company expects to transfer two operating properties in satisfaction
     of non-recourse secured indebtedness. These amounts represent the
a.   Company's forecast of net operating income generated by these assets and
     interest expense (accrued at the default rate) from April 1^st through
     year-end, and assuming a transfer date of December 31, 2014.
b.   Represents debt and accrued interest in excess of the book value of the
     assets to be conveyed.
     

2Q 2014 Conference Call Information:

Management will discuss second quarter 2014 earnings results, as well as its
2014 guidance, on its conference call on July 25, 2014 at 12:00 p.m. Eastern
Time, details of which are listed below:

                                
Second Quarter 2014:               
Earnings Release Date:             Friday, July 25, 2014 at 6:00 a.m. Eastern
                                   Time
Conference Call Date:              Friday, July 25, 2014
Time:                              12:00 p.m. Eastern Time
Telephone Number: (within the      888-713-4213
U.S.)
Telephone Number: (outside the     617-213-4865
U.S.)
Passcode:                          91072056
                                   

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=PGHCVH47L

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 Friday, July 25 at 4:00 p.m.
Eastern Time through Friday, August 8 at midnight Eastern Time. To access the
replay within the United States, please call 888-286-8010 and use passcode
83203581. To access the replay outside the United States, please call
617-801-6888 and use passcode 83203581.

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 calls will be immediately available via webcast in the Investor
Relations section of the Company’s website.

Definitions:

For definitions of certain terms used in this press release, please refer to
the information furnished in our Supplemental Information Package filed as a
Form 8-K which can be found on our 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 an office REIT that focuses primarily on serving the specialized
requirements of U.S. Government agencies and defense contractors, most of
which are engaged in defense information technology and national
security-related activities. As of June 30, 2014, COPT derived 76% of its
annualized revenue from its strategic tenant niche properties and 24% from its
regional office properties. The Company generally acquires, develops, manages
and leases office and data center properties concentrated in large office
parks primarily located near knowledge-based government demand drivers and/or
in targeted markets or submarkets in the Greater Washington, DC/Baltimore
region. As of June 30, 2014, the Company’s consolidated portfolio consisted of
180 office properties totaling 16.9  million rentable square feet. COPT is an
S&P MidCap 400 company.

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. 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:

  *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 a curtailment of 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;
  *the Company's ability to achieve projected results;
  *the dilutive effects of issuing additional common shares; 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, 2013.

                                                  
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(in thousands, except per share data)
                                                     
                         For the Three Months        For the Six Months
                         Ended June 30,              Ended June 30,
                         2014         2013          2014         2013
Revenues
Real estate revenues     $ 115,959     $ 115,732     $ 240,836     $ 227,689
Construction contract
and other service        23,861       20,795       45,651       35,057    
revenues
Total revenues           139,820      136,527      286,487      262,746   
Expenses
Property operating       43,772        41,333        93,544        81,721
expenses
Depreciation and
amortization             30,895        27,673        74,491        54,683
associated with real
estate operations
Construction contract
and other service        23,136        19,382        41,760        32,859
expenses
Impairment losses        1,302         —             1,302         —
General and
administrative           5,815         4,992         11,973        10,976
expenses
Leasing expenses         1,713         1,591         3,698         3,427
Business development
expenses and land        1,351        1,327        2,677        2,686     
carry costs
Total operating          107,984      96,298       229,445      186,352   
expenses
Operating income         31,836        40,229        57,042        76,394
Interest expense         (23,478   )   (21,102   )   (44,305   )   (41,392   )
Interest and other       1,299         2,006         2,584         2,952
income
Loss on early            (270      )   (21,470   )   (270      )   (26,654   )
extinguishment of debt
Income (loss) from
continuing operations
before equity in
(loss) income of         9,387         (337      )   15,051        11,300
unconsolidated
entities and income
taxes
Equity in (loss)
income of                (47       )   126           13            167
unconsolidated
entities
Income tax expense       (92       )   (21       )   (156      )   (37       )
Income (loss) from       9,248         (232      )   14,908        11,430
continuing operations
Discontinued             (198      )   (4,502    )   (187      )   (3,241    )
operations
Income before gain on    9,050         (4,734    )   14,721        8,189
sales of real estate
Gain on sales of real
estate, net of income    —            329          —            2,683     
taxes
Net income (loss)        9,050         (4,405    )   14,721        10,872
Net (income) loss
attributable to
noncontrolling
interests
Common units in the      (158      )   671           (174      )   242
Operating Partnership
Preferred units in the   (165      )   (165      )   (330      )   (330      )
Operating Partnership
Other consolidated       (837      )   (1,466    )   (1,586    )   (1,129    )
entities
Net income (loss)        7,890         (5,365    )   12,631        9,655
attributable to COPT
Preferred share          (4,344    )   (4,885    )   (8,834    )   (10,991   )
dividends
Issuance costs
associated with          (1,769    )   (2,904    )   (1,769    )   (2,904    )
redeemed preferred
shares
Net income (loss)
attributable to COPT     $ 1,777      $ (13,154 )   $ 2,028      $ (4,240  )
common shareholders
                                                                             
Earnings per share
(“EPS”) computation:
Numerator for diluted
EPS:
Net income
attributable to common   $ 1,777       $ (13,154 )   $ 2,028       $ (4,240  )
shareholders
Dilutive effect of
common units in the      —             (671      )   —             (242      )
Operating Partnership
Amount allocable to      (108      )   (102      )   (229      )   (220      )
restricted shares
Numerator for diluted    $ 1,669      $ (13,927 )   $ 1,799      $ (4,702  )
EPS
                                                                             
Denominator:
Weighted average         87,214        85,425        87,148        83,422
common shares - basic
Dilutive effect of
common units in the      —             3,801         —             3,847
Operating Partnership
Dilutive effect of
share-based              201          —            156          —         
compensation awards
Weighted average
common shares -          87,415       89,226       87,304       87,269    
diluted
Diluted EPS              $ 0.02       $ (0.16   )   $ 0.02       $ (0.05   )
                                                                             

                                                    
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(in thousands, except per share data)
                                                       
                             For the Three Months      For the Six Months
                             Ended June 30,            Ended June 30,
                             2014        2013         2014        2013
Net income (loss)            $ 9,050      $ (4,405 )   $ 14,721     $ 10,872
Real estate-related
depreciation and             30,895       28,935       74,491       57,187
amortization
Impairment losses on
previously depreciated       1,328        7,195        1,329        9,052
operating properties
Loss on sales of
previously depreciated       —           —           4           —        
operating properties
Funds from operations        41,273       31,725       90,545       77,111
(“FFO”)
Noncontrolling interests -
preferred units in the       (165     )   (165     )   (330     )   (330     )
Operating Partnership
FFO allocable to other       (758     )   (1,270   )   (1,519   )   (1,997   )
noncontrolling interests
Preferred share dividends    (4,344   )   (4,885   )   (8,834   )   (10,991  )
Issuance costs associated
with redeemed preferred      (1,769   )   (2,904   )   (1,769   )   (2,904   )
shares
Basic and diluted FFO
allocable to restricted      (146     )   (89      )   (351     )   (272     )
shares
Basic and diluted FFO
available to common share    34,091       22,412       77,742       60,617
and common unit holders
(“Basic and diluted FFO”)
Gain on sales of             —            (329     )   —            (2,683   )
non-operating properties
Loss on early                363          21,470       386          26,654
extinguishment of debt
Issuance costs associated
with redeemed preferred      1,769        2,904        1,769        2,904
shares
FFO on properties in         3,629        —            3,629        —
default to be conveyed
Diluted FFO comparability
adjustments allocable to     (26      )   —           (26      )   —        
restricted shares
Diluted FFO available to
common share and common      39,826       46,457       83,500       87,492
unit holders, as adjusted
for comparability
Straight line rent           (1,745   )   (2,011   )   (985     )   (5,844   )
adjustments
Straight line rent
adjustments - properties     1            —            1            —
in default to be conveyed
Amortization of
intangibles included in      224          172          441          349
net operating income
Share-based compensation,    1,501        1,647        3,056        3,296
net of amounts capitalized
Amortization of deferred     1,122        1,443        2,289        2,971
financing costs
Amortization of deferred
financing costs -            (27      )   —            (27      )   —
properties in default to
be conveyed
Amortization of net debt
discounts, net of amounts    229          556          400          1,184
capitalized
Amortization of settled      15           15           30           30
debt hedges
Recurring capital            (13,585  )   (5,862   )   (24,637  )   (11,170  )
expenditures
Diluted adjusted funds
from operations available
to common share and common   $ 27,561    $ 42,417    $ 64,068    $ 78,308 
unit holders (“Diluted
AFFO”)
Diluted FFO per share        $ 0.37       $ 0.25       $ 0.85       $ 0.69
Diluted FFO per share, as    $ 0.44       $ 0.52       $ 0.92       $ 1.00
adjusted for comparability
Dividends/distributions      $ 0.275      $ 0.275      $ 0.550      $ 0.550
per common share/unit
                                                                             

                                                              
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(Dollars and shares in thousands, except per share data)
                                               
                                                 June 30,        December 31,
                                                 2014            2013
Balance Sheet Data
Properties, net of
accumulated                                      $ 3,254,242     $ 3,214,301
depreciation
Total assets                                     3,709,500       3,629,952
Debt, net                                        2,099,343       1,927,703
Total liabilities                                2,290,819       2,114,945
Redeemable
noncontrolling                                   18,901          17,758
interest
Equity                                           1,399,780       1,497,249
Debt to adjusted                                 43.9        %   43.6        %
book
Debt to total market                             43.3        %   44.3        %
capitalization
                                                                             
Core Portfolio Data
(as of period end)
(1)
Number of operating                              172             177
properties
Total net rentable
square feet owned                                16,620          16,045
(in thousands)
Occupancy %                                      90.0        %   88.7        %
Leased %                                         92.2        %   90.0        %
                                                                             
                       For the Three Months      For the Six Months Ended
                       Ended June 30,            June 30,
                       2014        2013         2014            2013
Payout ratios
Diluted FFO            73.8     %   110.0    %   64.8        %   81.3        %
Diluted FFO, as
adjusted for           63.2     %   53.1     %   60.3        %   56.3        %
comparability
Diluted AFFO           91.3     %   58.1     %   78.6        %   62.9        %
Adjusted EBITDA
interest coverage      3.6      x   3.5      x   3.6         x   3.5         x
ratio
Adjusted EBITDA
fixed charge           2.5      x   2.4      x   2.5         x   2.4         x
coverage ratio
Adjusted debt to
in-place adjusted      7.1      x   6.9      x   N/A             N/A
EBITDA ratio (2)
                                                                             
Reconciliation of
denominators for
diluted EPS and
diluted FFO per
share
Denominator for        87,415       89,226       87,304          87,269
diluted EPS
Weighted average       3,912        —            3,934           —
common units
Anti-dilutive EPS
effect of              —           96          —              74          
share-based
compensation awards
Denominator for
diluted FFO per        91,327      89,322      91,238         87,343      
share
                                                                             
Reconciliation of
FFO to FFO, as
adjusted for
comparability
FFO, per NAREIT        $ 41,273     $ 31,725     $ 90,545        $77,111
Gain on sales of
non-operating          —            (329     )   —               (2,683      )
properties
Loss on early
extinguishment of
debt, continuing and   363          21,470       386             26,654
discontinued
operations
Issuance costs
associated with        1,769        2,904        1,769           2,904
redeemed preferred
shares
FFO from properties
to be conveyed to      3,629       —           3,629          —           
extinguish debt in
default
FFO, as adjusted for   $ 47,034    $ 55,770    $ 96,329       $103,986    
comparability
                                                                             

(1)  Represents operating properties held for long-term investment.
      Represents debt as of period end divided by in-place adjusted EBITDA for
(2)   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      For the Six Months Ended
                           Ended June 30,            June 30,
                           2014        2013         2014         2013
Reconciliation of common
share dividends to
dividends and
distributions for payout
ratios
Common share dividends     $ 24,103     $ 23,604     $ 48,194      $ 47,198
Common unit                1,072       1,042       2,153        2,092     
distributions
Dividends and
distributions for payout   $ 25,175    $ 24,646    $ 50,347     $ 49,290  
ratios
                                                                             
Reconciliation of GAAP
net income to adjusted
earnings before
interest, income taxes,
depreciation and
amortization (“Adjusted
EBITDA”) and in-place
adjusted EBITDA
Net income (loss)          $ 9,050      $ (4,405 )   $ 14,721      $ 10,872
Interest expense on        23,478       21,102       44,305        41,392
continuing operations
Interest expense on        —            2,267        —             4,348
discontinued operations
Income tax expense         92           21           156           37
Real estate-related
depreciation and           30,895       28,935       74,491        57,187
amortization
Depreciation of
furniture, fixtures and    843          527          1,348         1,057
equipment
Impairment losses          1,328        7,195        1,329         9,052
Loss on early
extinguishment of debt     363          21,470       386           26,654
on continuing and
discontinued operations
Loss on sales of           —            —            4             —
operating properties
Gain on sales of
non-operational            —            (329     )   —             (2,683    )
properties
Net loss (gain) on
investments in
unconsolidated entities    282          (961     )   302           (1,021    )
included in interest and
other income
EBITDA on properties in    (531     )   —           (531      )   —         
default to be conveyed
Adjusted EBITDA            $ 65,800     $ 75,822     $ 136,511    $ 146,895 
Less: Net operating
income from properties     —           (45      )
in quarter of
disposition
Adjusted and in-place      $ 65,800    $ 75,777 
adjusted EBITDA
                                                                             
Reconciliation of
interest expense from
continuing operations to
the denominators for
interest
coverage-Adjusted EBITDA
and fixed charge
coverage-Adjusted EBITDA
Interest expense from      $ 23,478     $ 21,102     $ 44,305      $ 41,392
continuing operations
Interest expense from      —            2,267        —             4,348
discontinued operations
Less: Amortization of      (1,122   )   (1,443   )   (2,289    )   (2,971    )
deferred financing costs
Less: Amortization of
net debt discount, net     229          (556     )   400           (1,184    )
of amounts capitalized
Less: Interest exp. on
debt in default to be      (4,133   )   —           (4,133    )   —         
extin. via conveyance of
properties
Denominator for interest   18,452       21,370       38,283        41,585
coverage-Adjusted EBITDA
Scheduled principal        1,582        2,491        3,437         5,003
amortization
Capitalized interest       1,422        2,088        3,011         4,528
Preferred share            4,344        4,885        8,834         10,991
dividends
Preferred unit             165         165         330          330       
distributions
Denominator for fixed
charge coverage-Adjusted   $ 25,965    $ 30,999    $ 53,895     $ 62,437  
EBITDA
                                                                             


Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(Dollars in thousands)
                                             
                      For the Three Months      For the Six Months Ended
                      Ended June 30,            June 30,
                      2014        2013         2014          2013
Reconciliations of
tenant improvements
and incentives,
capital
improvements and
leasing costs for
operating
properties to
recurring capital
expenditures
Tenant improvements
and incentives on     $ 4,512      $ 3,798      $  10,831      $ 6,089
operating
properties
Building
improvements on       6,357        2,538        10,339         4,138
operating
properties
Leasing costs for
operating             2,790        1,185        4,318          2,854
properties
Less: Nonrecurring
tenant improvements
and incentives on     483          (23      )   467            (8            )
operating
properties
Less: Nonrecurring
building
improvements on       (519     )   (1,580   )   (1,087     )   (1,847        )
operating
properties
Less: Nonrecurring
leasing costs for     (38      )   (50      )   (231       )   (50           )
operating
properties
Add: Recurring
capital
expenditures on
operating             —           (6       )   —             (6            )
properties held
through joint
ventures
Recurring capital     $ 13,585    $ 5,862     $  24,637     $ 11,170      
expenditures
                                                                             
Reconciliation of
same office
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          $ 67,056     $ 67,939     $  132,717     $ 134,269
operating income
Less: Straight-line   (938     )   (874     )   (1,480     )   (2,456        )
rent adjustments
Less: Amortization
of deferred market    15           (34      )   23             (63           )
rental revenue
Add: Amortization
of below-market       272         319         544           638           
cost arrangements
Same office
property cash net     66,405       67,350       131,804        132,388
operating income
Less: Lease
termination fees,     (93      )   (750     )   (605       )   (974          )
gross
Same office
property cash net
operating income,     $ 66,312    $ 66,600    $  131,199    $ 131,414     
excluding gross
lease termination
fees
                                                                             
                                                June 30,      December 31,
                                                2014           2013
Reconciliation of
total assets to
adjusted book
Total assets                                    $3,709,500     $  3,629,952
Accumulated                                     655,214        597,649
depreciation
Accumulated
depreciation                                    3,121          —
included in assets
held for sale
Accumulated
amortization of
real estate                                     201,627        193,142
intangibles and
deferred leasing
costs
Accumulated
amortization of
real estate
intangibles and                                 4,277          —
deferred leasing
costs included in
assets held for
sale
Less: Adjusted book
assoc. with
properties to be                                (130,921   )   —             
conveyed to
extinguish debt in
default
Adjusted book                                   $4,442,818    $   4,420,743 
                                                                             
Reconciliation of
debt to adjusted
debt
Debt, net                                       $2,099,343     $   1,927,703
Less: Debt in
default to be
extinguished via                                (150,000   )   —             
conveyance of
properties
Numerator for debt
to adjusted book                                1,949,343      1,927,703
ratio
Less: Cash and cash                             (76,216    )   (54,373       )
equivalents
Adjusted debt                                   $1,873,127    $   1,873,330 
                                                                             

Contact:

Corporate Office Properties Trust
IR Contacts:
Stephanie Krewson, 443-285-5453
stephanie.krewson@copt.com
or
Michelle Layne, 443-285-5452
michelle.layne@copt.com
 
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