Market Overview

COPT Reports Third Quarter 2012 Results

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COLUMBIA, Md.--(BUSINESS WIRE)--

Corporate Office Properties Trust (COPT or the Company) (NYSE: OFC), announced financial and operating results for the third quarter ended September 30, 2012.

“Year to date, we are ahead of plan on leasing, on selling non-strategic properties, and in de-leveraging our balance sheet," stated Roger A. Waesche, Jr., President and Chief Executive Officer. "We remain focused on completing the strategic initiatives currently in progress to position the Company for future growth," he added.

Results:

Diluted loss per share was ($0.39) for the quarter ended September 30, 2012 as compared to earnings per share (EPS) of $0.03 in the third quarter of 2011. The third quarter 2012 loss per diluted share includes impairment losses of $55.8 million associated with non-strategic operating properties. Diluted funds from operations per share (FFOPS), as adjusted for comparability, was $0.53 for the third quarter ended September 30, 2012, which represented a 2% increase from the $0.52 reported for the third quarter of 2011. Adjustments for comparability encompass items such as acquisition costs, impairments and gains on non-operating properties, gains (losses) on early extinguishment of debt, derivative losses and issuance costs on redeemed preferred shares. Please refer to the reconciliation tables that appear later in this press release. Per NAREIT's definition, FFOPS for the third quarter of 2012 was $0.52 versus $0.49 reported in the third quarter of 2011.

Operating Performance:

Portfolio Summary – At September 30, 2012, the Company's consolidated portfolio of 206 operating office properties totaled 18.6 million square feet. The weighted average remaining lease term for the portfolio was 4.6 years and the average rental rate (including tenant reimbursements) was $27.73 per square foot. The Company's consolidated portfolio was 88.1% occupied and 89.9% leased as of September 30, 2012, up 70 and 60 basis points, respectively, from June 30, 2012 levels.

Same Office Performance – The Company's same office portfolio excludes properties identified for eventual disposal. For the quarter ended September 30, 2012, COPT's same office portfolio represents 81.6% of the rentable square feet of the portfolio and consists of 163 properties. The Company's same office portfolio occupancy was 89.3% at the end of the third quarter of 2012, down 160 basis points from the end of the third quarter 2011. Sequentially, same office occupancy declined 30 basis points from June 30, 2012 to September 30, 2012.

On a GAAP basis, same office NOI grew 2.5% year-over-year for the quarter ended September 30, 2012, and increased 3.5% for the nine months ended September 30, 2012 versus the prior year period. On a cash basis and excluding lease termination fees, same office NOI declined 2.1% in the third quarter of 2012 versus 2011, owing to the receipt of a prepayment of rent in 2011. Excluding this prepayment and lease termination fees, same office cash NOI in the third quarter would have increased 3.9% year-over-year.

Leasing – COPT leased a total of 608,000 square feet during the quarter ended September 30, 2012, which included 259,000 square feet of development and first generation leasing. During this same period, the Company's renewal rate was 48.3%. For the quarter ended September 30, 2012, total rent on renewed space increased 9.4% as measured from the straight-line rent in effect preceding the renewal date; on a cash basis, renewal rents decreased 1.9%.

Investment Activity:

Construction – The Company had eight office properties under construction at September 30, 2012, and three additional properties placed under construction in early October 2012. These 11 construction properties total 1.3 million square feet and have a total projected cost of $307.9 million, of which $162.4 million had been incurred by September 30, 2012. As of the same date, COPT had two properties under redevelopment for an anticipated total cost of $56.3 million, of which $31.1 million had been spent.

Acquisitions – In the third quarter of 2012, COPT acquired one five-story, Class-A building with 202,000 square feet for $48.3 million. The building is located at 13857 McLearen Road, known as the McLearen Center in Herndon, Virginia. McLearen Center is in close proximity to several large US Government controlled campuses. The building is 100% leased to a strategic tenant in the Defense Information Technology industry.

Dispositions – In the third quarter of 2012, COPT disposed of 24 operating properties for $178.1 million. The operating buildings contained a total of 1.5 million square feet and were 83.8% occupied (90 leases) at the time of disposition. During the nine months ended September 30, 2012, COPT disposed of a total of $318 million of properties and adjacent land that aggregated 2.3 million operational square feet that were 80.4% occupied at the time of sale.

Capital Transactions:

In August, the Company entered into a $120 million term loan agreement, with the ability to expand the amount drawn during the term, subject to certain conditions, by an additional $80 million. The Term Loan has a seven-year term and a variable interest rate of LIBOR plus 2.10% to 2.60%, depending on the Company's leverage levels.

Balance Sheet and Financial Flexibility:

As of September 30, 2012, the Company had a total market capitalization of $4.3 billion, with $2.2 billion in debt outstanding, equating to a 50% debt-to-total market capitalization ratio. Also, the Company's weighted average interest rate was 4.4% for the quarter ended September 30, 2012 and 76% of the Company's debt was subject to fixed interest rates, including the effect of interest rate swaps.

For the third quarter 2012, the Company's adjusted EBITDA to interest expense coverage ratio was 3.4x, and the adjusted EBITDA fixed charge coverage ratio was 2.6x. Adjusting for construction in progress, the Company's debt-to-adjusted EBITDA ratio was 6.2x for the three months ended September 30, 2012.

Subsequent Events:

Leasing – Between October 1 and October 17, 2012, COPT completed 437,000 square feet of leases at development projects. Specifically, the Company executed leases for 363,000 square feet of Class-A office space at Redstone Gateway in Huntsville, AL, 55,000 square feet at its redevelopment project in Blue Bell, PA, and 19,000 square feet in Colorado Springs, CO.

Capital Raises – On October 16, 2012, the Company completed a public offering of 8,625,000 common shares at a price of $24.75 per share for net proceeds of $204.9 million after underwriter discounts but before offering expenses.

2012 FFO Guidance:

Management is narrowing its previously issued guidance for 2012 FFOPS of $2.02 to $2.08 to a new range of $2.05 to $2.08. Management also is issuing fourth quarter 2012 FFOPS guidance of $0.45 to $0.48. A reconciliation of projected EPS to projected FFOPS for the quarter and year ending December 31, 2012 is provided as follows:

   
Quarter Ending Year Ending
December 31, 2012 December 31, 2012
   
FFOPS, as adjusted for comparability $ 0.45 $ 0.48 $ 2.05 $ 2.08
Gains on non-operating properties, net of income taxes - - 0.01 0.01
Net gains on early extinguishment of debt - - 0.01 0.01
Issuance costs on redeemed Preferred shares   -       -     (0.02 )     (0.02 )
 
FFOPS, NAREIT definition 0.45 0.48 2.05 2.08
 
Real estate depreciation and amortization (0.40 ) (0.40 ) (1.62 ) (1.62 )
Impairments and exit costs on previously depreciated properties - - (0.90 ) (0.90 )
Gains on sales of previously depreciated properties   -       -     0.27       0.27  
 
EPS $ 0.05     $ 0.08   $ (0.20 )   $ (0.17 )
 

Conference Call Information:

Management will discuss third quarter 2012 earnings results, as well as its 2012 guidance, on its conference call today at 11:00 a.m. Eastern Time, details of which are listed below:

     
Time: 11:00 a.m. Eastern Time
 
Telephone Number: (within the U.S.) 888-679-8018
 
Telephone Number: (outside the U.S.) 617-213-4845
 
Passcode: 49667248
 

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=PQFR39JDX

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 25 at 3:00 p.m. Eastern Time through Thursday, November 8 at midnight Eastern Time. To access the replay within the United States, please call 888-286-8010 and use passcode 51365923. To access the replay outside the United States, please call 617-801-6888 and use passcode 51365923.

The conference calls 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.

Company Information:

COPT is an office REIT that focuses primarily on strategic customer relationships and specialized tenant requirements in the U.S. Government and Defense Information Technology sectors and Data Centers serving such sectors. The Company acquires, develops, manages and leases office and data center properties that are typically concentrated in large office parks primarily located adjacent to government demand drivers and/or in strong markets that we believe possess growth opportunities. As of September 30, 2012, the Company's consolidated portfolio consisted of 206 office properties totaling 18.6 million rentable square feet. 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,” “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 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 strategic tenants;
  • 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;
  • the Company's ability to sell properties included in its Strategic Reallocation Plan;
  • 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 or views of market economic conditions or failure to obtain development rights, any of which could result in recognition of 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 dilutive effect 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, 2011.

Reconciliations:

Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the tables, below. Please refer to the information furnished with our Form 8-K on our website (www.copt.com) for definitions of these non-GAAP measures and other terms used in this press release.

   
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(in thousands, except per share data)
 
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Revenues
Real estate revenues $ 114,861 $ 107,978 $ 336,687 $ 317,013
Construction contract and other service revenues 15,283   18,729   53,812   67,854  
Total revenues 130,144   126,707   390,499   384,867  
Expenses
Property operating expenses 42,799 41,669 126,339 123,135
Depreciation and amortization associated with real estate operations 28,698 31,269 84,920 84,205
Construction contract and other service expenses 14,410 18,171 51,302 65,698
Impairment losses 46,096 41,260 42,983
General and administrative expenses 5,061 6,154 19,820 19,251
Business development expenses and land carry costs 1,632   1,751   4,506   4,322  
Total operating expenses 138,696   99,014   328,147   339,594  
Operating (loss) income (8,552 ) 27,693 62,352 45,273
Interest expense (23,239 ) (24,176 ) (71,909 ) (74,861 )
Interest and other income 1,095 (242 ) 3,152 3,682
Loss on early extinguishment of debt (768 ) (1,611 ) (937 ) (1,636 )
(Loss) income from continuing operations before equity in loss of unconsolidated entities and income taxes (31,464 ) 1,664 (7,342 ) (27,542 )
Equity in loss of unconsolidated entities (246 ) (159 ) (522 ) (223 )
Income tax (expense) benefit (106 ) 457   (4,296 ) 6,043  
(Loss) income from continuing operations (31,816 ) 1,962 (12,160 ) (21,722 )
Discontinued operations 11,051   5,508   10,212   (18,109 )
(Loss) income before gain on sales of real estate (20,765 ) 7,470 (1,948 ) (39,831 )
Gain on sales of real estate, net of income taxes     21   2,728  
Net (loss) income (20,765 ) 7,470 (1,927 ) (37,103 )
Net loss (income) attributable to noncontrolling interests
Common units in the Operating Partnership 1,569 (178 ) 1,020 3,188
Preferred units in the Operating Partnership (165 ) (165 ) (495 ) (495 )
Other consolidated entities (411 ) (561 ) (939 ) (1,038 )
Net (loss) income attributable to COPT (19,772 ) 6,566 (2,341 ) (35,448 )
Preferred share dividends (6,546 ) (4,025 ) (14,738 ) (12,076 )
Issuance costs associated with redeemed preferred shares (1,827 )   (1,827 )  
Net (loss) income attributable to COPT common shareholders $ (28,145 ) $ 2,541   $ (18,906 ) $ (47,524 )
 
Earnings per share (“EPS”) computation:
Numerator for diluted EPS:
Net (loss) income attributable to common shareholders $ (28,145 ) $ 2,541 $ (18,906 ) $ (47,524 )
Dilutive effect of common units in the Operating Partnership (3,188 )
Amount allocable to restricted shares (111 ) (262 ) (357 ) (781 )
Numerator for diluted EPS $ (28,256 ) $ 2,279   $ (19,263 ) $ (51,493 )
 
Denominator:
Weighted average common shares - basic 71,688 71,312 71,590 68,718
Dilutive effect of common units in the Operating Partnership       4,371  
Weighted average common shares - diluted 71,688   71,312   71,590   73,089  
Diluted EPS $ (0.39 ) $ 0.03   $ (0.27 ) $ (0.70 )
 
   
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(in thousands, except per share data)
 
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Net (loss) income $ (20,765 ) $ 7,470 $ (1,927 ) $ (37,103 )
Real estate-related depreciation and amortization 30,624 36,032 93,377 101,101
Impairment losses on previously depreciated operating properties 55,829 70,016 31,031
Depreciation and amortization on unconsolidated real estate entities 113 116 346 350
Gain on sales of previously depreciated operating properties, net of income taxes (16,913 ) (1,299 ) (20,936 ) (1,449 )
Funds from operations (“FFO”) 48,888 42,319 140,876 93,930
Noncontrolling interests - preferred units in the Operating Partnership (165 ) (165 ) (495 ) (495 )
Noncontrolling interests - other consolidated entities (411 ) (561 ) (939 ) (1,038 )
Preferred share dividends (6,546 ) (4,025 ) (14,738 ) (12,076 )
Issuance costs associated with redeemed preferred shares (1,827 ) (1,827 )
Depreciation and amortization allocable to noncontrolling interests in other consolidated entities (160 ) (276 ) (312 ) (566 )
Basic and diluted FFO allocable to restricted shares (214 ) (263 ) (728 ) (782 )
Basic and diluted FFO available to common share and common unit holders (“Basic and diluted FFO”) 39,565 37,029 121,837 78,973
Operating property acquisition costs 222 77 229 152
Gain on sales of non-operating properties, net of income taxes (33 ) (2,717 )
Impairment (recoveries) losses on other properties (5,246 ) 41,316
Income tax expense on impairment recoveries on other properties 4,642 (4,598 )
(Gain) loss on early extinguishment of debt (970 ) 1,995 (799 ) 2,020
Issuance costs associated with redeemed preferred shares 1,827     1,827    
Diluted FFO available to common share and common unit holders, as adjusted for comparability 40,644 39,101 122,457 115,146
Straight line rent adjustments (2,595 ) (2 ) (6,631 ) (6,525 )
Amortization of acquisition intangibles included in net operating income 251 212 659 600
Share-based compensation, net of amounts capitalized 1,703 2,759 8,262 8,156
Amortization of deferred financing costs 1,527 1,629 4,696 5,090
Amortization of net debt discounts, net of amounts capitalized 683 1,184 2,028 4,046
Amortization of settled debt hedges 15 16 46 47
Recurring capital expenditures on properties not in disposition plans (8,518 ) (8,710 ) (16,467 ) (26,960 )
Diluted adjusted funds from operations available to common share and common unit holders, excluding recurring capital expenditures on properties sold or in disposition plans 33,710 36,189 115,050 99,600
Recurring capital expenditures on properties sold or in disposition plans 651   (2,889 ) (3,330 ) (13,896 )
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 34,361   $ 33,300   $ 111,720   $ 85,704  
Diluted FFO per share $ 0.52 $ 0.49 $ 1.61 $ 1.08
Diluted FFO per share, as adjusted for comparability $ 0.53 $ 0.52 $ 1.61 $ 1.57
Dividends/distributions per common share/unit $ 0.2750 $ 0.4125 $ 0.8250 $ 1.2375
Payout ratios
Diluted FFO 53.1 % 85.0 % 51.7 % 117.0 %
Diluted FFO, as adjusted for comparability 51.7 % 80.5 % 51.4 % 80.3 %
Diluted AFFO, excluding recurring capital expenditures on properties sold or in disposition plans 62.3 % 87.0 % 54.7 % 92.8 %
Adjusted EBITDA interest coverage ratio 3.40x 3.07x 3.19x 2.98x
Adjusted EBITDA fixed charge coverage ratio 2.58x 2.59x 2.60x 2.53x
Debt to Adjusted EBITDA ratio (1) 7.54x 8.65x 7.58x 8.67x
Adjusted debt to Adjusted EBITDA ratio (2) 6.17x 6.96x 6.20x 6.98x
Reconciliation of denominators for diluted EPS and diluted FFO per share
Denominator for diluted EPS 71,688 71,312 71,590 73,089
Weighted average common units 4,233 4,336 4,256
Anti-dilutive EPS effect of share-based compensation awards 73   52   48   147  
Denominator for diluted FFO per share 75,994   75,700   75,894   73,236  
 
 
(1) Represents debt as of period end divided by Adjusted EBITDA for the period, as annualized (i.e. three month periods are multiplied by four).
(2) Represents debt adjusted to subtract construction in progress as of period end divided by 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 and shares in thousands, except per share data)
 
September 30, December 31,
2012 2011
Balance Sheet Data
Properties, net of accumulated depreciation $ 3,102,514 $ 3,352,975
Total assets 3,597,656 3,867,524
Debt, net 2,169,315 2,426,303
Total liabilities 2,347,435 2,649,459
Equity 1,250,221 1,218,065
Debt to adjusted book 51.9 % 54.6 %
Debt to total market capitalization 50.0 % 56.8 %
 
Consolidated Property Data (as of period end)
Number of operating properties 206 238
Total net rentable square feet owned (in thousands) 18,591 20,514
Occupancy 88.1 % 86.2 %
 
Reconciliation of total assets to denominator for debt to adjusted book
Denominator for debt to total assets $ 3,597,656 $ 3,867,524
Accumulated depreciation 565,724 559,679
Accumulated depreciation included in assets held for sale 12,669   17,922  
Denominator for debt to adjusted book $ 4,176,049   $ 4,445,125  
 
   
Reconciliations of tenant improvements and incentives, capital improvements and leasing costs for operating properties to recurring capital expenditures For the Three Months Ended September 30, For the Nine Months Ended September 30,
2012   2011 2012   2011

Properties to be held

Tenant improvements and incentives on operating properties $ 7,774 $ 5,533 $ 11,103 $ 20,720
Building improvements on operating properties 4,646 2,239 6,813 5,321
Leasing costs for operating properties 947 3,933 5,109 9,026
Less: Nonrecurring tenant improvements and incentives on operating properties (3,852 ) (1,816 ) (4,510 ) (4,893 )
Less: Nonrecurring building improvements on operating properties (940 ) (1,069 ) (1,919 ) (2,188 )
Less: Nonrecurring leasing costs for operating properties (130 ) (130 ) (209 ) (1,093 )
Add: Recurring capital expenditures on operating properties held through joint ventures 73   20   80   67  
Recurring capital expenditures on properties not sold or in disposition plans $ 8,518   $ 8,710   $ 16,467   $ 26,960  
 

Properties sold or in disposition plans

Tenant improvements and incentives on operating properties $ (737 ) $ 1,549 $ 2,020 $ 10,748
Building improvements on operating properties 191 3,141 1,473 4,475
Leasing costs for operating properties 7 290 541 1,321
Less: Nonrecurring tenant improvements and incentives on operating properties (10 ) (165 ) (256 )
Less: Nonrecurring building improvements on operating properties (112 ) (1,977 ) (530 ) (2,288 )
Less: Nonrecurring leasing costs for operating properties   (104 ) (9 ) (104 )
Recurring capital expenditures on properties sold or in disposition plans $ (651 ) $ 2,889   $ 3,330   $ 13,896  
 
   
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(Dollars in thousands)
 

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,

2012   2011 2012   2011
Reconciliation of common share dividends to dividends and distributions for payout ratios
Common share dividends $ 19,837 $ 29,688 $ 59,465 $ 87,024
Common unit distributions 1,157   1,781   3,498   5,398  
Dividends and distributions for payout ratios $ 20,994   $ 31,469   $ 62,963   $ 92,422  
Reconciliation of FFO to FFO, as adjusted for comparability
FFO $ 48,888 $ 42,319 $ 140,876 $ 93,930
Gain on sales of non-operating properties, net of income taxes (33 ) (2,717 )
Impairment (recoveries) losses on non-operating properties, net of associated tax (604 ) 36,718
Operating property acquisition costs 222 77 229 152
(Gain) loss on early extinguishment of debt, continuing and discontinued operations (970 ) 1,995 (799 ) 2,020
Issuance costs associated with redemption of preferred shares 1,827     1,827    
FFO, as adjusted for comparability $ 49,967   $ 44,391   $ 141,496   $ 130,103  
Reconciliation of GAAP net (loss) income to adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”)
Net (loss) income $ (20,765 ) $ 7,470 $ (1,927 ) $ (37,103 )
Interest expense on continuing operations 23,239 24,176 71,909 74,861
Interest expense on discontinued operations 127 1,453 2,107 4,526
Income tax expense (benefit) 106 (457 ) 4,296 (6,043 )
Real estate-related depreciation and amortization 30,624 36,032 93,377 101,101
Depreciation of furniture, fixtures and equipment 624 614 1,871 1,862
Impairment losses 55,829 64,770 72,347
(Gain) loss on early extinguishment of debt on continuing and discont. operations (970 ) 1,995 (799 ) 2,020
Gain on sales of operating properties (16,913 ) (1,299 ) (20,936 ) (1,449 )
Gain on sales of non-operational properties     (33 ) (2,717 )
Adjusted EBITDA $ 71,901   $ 69,984   $ 214,635   $ 209,405  
Reconciliation of interest expense from continuing operations to the denominators for interest coverage-Adjusted EBITDA and fixed charge coverage-Adjusted EBITDA
Interest expense from continuing operations $ 23,239 $ 24,176 $ 71,909 $ 74,861
Interest expense from discontinued operations 127 1,453 2,107 4,526
Less: Amortization of deferred financing costs (1,527 ) (1,629 ) (4,696 ) (5,090 )
Less: Amortization of net debt discount, net of amounts capitalized (683 ) (1,184 ) (2,028 ) (4,046 )
Denominator for interest coverage-Adjusted EBITDA 21,156 22,816 67,292 70,251
Preferred share dividends 6,546 4,025 14,738 12,076
Preferred unit distributions 165   165   495   495  
Denominator for fixed charge coverage-Adjusted EBITDA $ 27,867   $ 27,006   $ 82,525   $ 82,822  
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 operating income $ 64,159 $ 62,603 $ 190,173 $ 183,776
Less: Straight-line rent adjustments (1,407 ) 1,135 (4,222 ) (4,474 )
Less: Amortization of deferred market rental revenue (80 ) (73 ) (276 ) (205 )
Add: Amortization of above-market cost arrangements 371   434   1,095   1,302  
Same office property cash net operating income 63,043 64,099 186,770 180,399
Less: Lease termination fees, gross (413 ) (130 ) (1,111 ) (443 )
Same office property cash net operating income, excluding gross lease termination fees $ 62,630   $ 63,969   $ 185,659   $ 179,956  
Reconciliation of debt, net to denominator for adjusted debt to Adjusted EBITDA ratio
Debt, net $ 2,169,315 $ 2,420,073 $ 2,169,315 $ 2,420,073
Less: Construction in progress (394,361 ) (447,969 ) (394,361 ) (447,969 )
Less: Construction in progress on assets held for sale   (22,936 )   (22,936 )
Denominator for adjusted debt to adjusted EBITDA ratio $ 1,774,954   $ 1,949,168   $ 1,774,954   $ 1,949,168  
 

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

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