T | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended | September 30, 2012 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from | to |
Maryland | 23-2947217 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification No.) |
6711 Columbia Gateway Drive, Suite 300, Columbia, MD | 21046 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
PAGE | ||
September 30, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | 2,487,919 | $ | 2,714,056 | |||
Projects in development or held for future development | 614,595 | 638,919 | |||||
Total properties, net | 3,102,514 | 3,352,975 | |||||
Assets held for sale, net | 137,815 | 116,616 | |||||
Cash and cash equivalents | 5,009 | 5,559 | |||||
Restricted cash and marketable securities | 20,926 | 36,232 | |||||
Accounts receivable (net of allowance for doubtful accounts of $4,754 and $3,546, respectively) | 15,877 | 26,032 | |||||
Deferred rent receivable | 83,156 | 86,856 | |||||
Intangible assets on real estate acquisitions, net | 81,059 | 89,120 | |||||
Deferred leasing and financing costs, net | 58,753 | 66,515 | |||||
Prepaid expenses and other assets | 92,547 | 87,619 | |||||
Total assets | $ | 3,597,656 | $ | 3,867,524 | |||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | 2,169,315 | $ | 2,426,303 | |||
Accounts payable and accrued expenses | 87,390 | 96,425 | |||||
Rents received in advance and security deposits | 26,773 | 29,548 | |||||
Dividends and distributions payable | 26,954 | 35,038 | |||||
Deferred revenue associated with operating leases | 13,102 | 15,554 | |||||
Distributions received in excess of investment in unconsolidated real estate joint venture | 6,420 | 6,071 | |||||
Interest rate derivatives | 6,543 | 30,863 | |||||
Other liabilities | 10,938 | 9,657 | |||||
Total liabilities | 2,347,435 | 2,649,459 | |||||
Commitments and contingencies (Note 16) | |||||||
Equity: | |||||||
Corporate Office Properties Trust’s shareholders’ equity: | |||||||
Preferred Shares of beneficial interest at liquidation preference ($0.01 par value; shares authorized of 25,000,000 at September 30, 2012 and 15,000,000 at December 31, 2011; shares issued and outstanding of 12,821,667 at September 30, 2012 and 8,121,667 at December 31, 2011) | 333,833 | 216,333 | |||||
Common Shares of beneficial interest ($0.01 par value; 125,000,000 shares authorized, shares issued and outstanding of 72,157,635 at September 30, 2012 and 72,011,324 at December 31, 2011) | 722 | 720 | |||||
Additional paid-in capital | 1,455,558 | 1,452,393 | |||||
Cumulative distributions in excess of net income | (610,659 | ) | (532,288 | ) | |||
Accumulated other comprehensive loss | (5,688 | ) | (1,733 | ) | |||
Total Corporate Office Properties Trust’s shareholders’ equity | 1,173,766 | 1,135,425 | |||||
Noncontrolling interests in subsidiaries: | |||||||
Common units in the Operating Partnership | 48,973 | 55,281 | |||||
Preferred units in the Operating Partnership | 8,800 | 8,800 | |||||
Other consolidated entities | 18,682 | 18,559 | |||||
Noncontrolling interests in subsidiaries | 76,455 | 82,640 | |||||
Total equity | 1,250,221 | 1,218,065 | |||||
Total liabilities and equity | $ | 3,597,656 | $ | 3,867,524 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | |||||||||||||||
Rental revenue | $ | 92,783 | $ | 87,692 | $ | 273,089 | $ | 258,896 | |||||||
Tenant recoveries and other real estate operations revenue | 22,078 | 20,286 | 63,598 | 58,117 | |||||||||||
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 (loss) | 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 Corporate Office Properties Trust | (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 Corporate Office Properties Trust common shareholders | $ | (28,145 | ) | $ | 2,541 | $ | (18,906 | ) | $ | (47,524 | ) | ||||
Net (loss) income attributable to Corporate Office Properties Trust: | |||||||||||||||
(Loss) income from continuing operations | $ | (30,200 | ) | $ | 1,381 | $ | (12,015 | ) | $ | (18,454 | ) | ||||
Discontinued operations, net | 10,428 | 5,185 | 9,674 | (16,994 | ) | ||||||||||
Net (loss) income attributable to Corporate Office Properties Trust | $ | (19,772 | ) | $ | 6,566 | $ | (2,341 | ) | $ | (35,448 | ) | ||||
Basic earnings per common share (1) | |||||||||||||||
Loss from continuing operations | $ | (0.54 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.46 | ) | |||
Discontinued operations | 0.15 | 0.07 | 0.13 | (0.24 | ) | ||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.39 | ) | $ | 0.03 | $ | (0.27 | ) | $ | (0.70 | ) | ||||
Diluted earnings per common share (1) | |||||||||||||||
Loss from continuing operations | $ | (0.54 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.46 | ) | |||
Discontinued operations | 0.15 | 0.07 | 0.13 | (0.24 | ) | ||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.39 | ) | $ | 0.03 | $ | (0.27 | ) | $ | (0.70 | ) | ||||
Dividends declared per common share | $ | 0.2750 | $ | 0.4125 | $ | 0.8250 | $ | 1.2375 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net (loss) income | $ | (20,765 | ) | $ | 7,470 | $ | (1,927 | ) | $ | (37,103 | ) | ||||
Other comprehensive loss | |||||||||||||||
Unrealized losses on interest rate derivatives | (2,760 | ) | (21,869 | ) | (7,386 | ) | (30,463 | ) | |||||||
Losses on interest rate derivatives included in net (loss) income | 632 | 1,179 | 3,034 | 3,446 | |||||||||||
Other comprehensive loss | (2,128 | ) | (20,690 | ) | (4,352 | ) | (27,017 | ) | |||||||
Comprehensive loss | (22,893 | ) | (13,220 | ) | (6,279 | ) | (64,120 | ) | |||||||
Comprehensive loss (income) attributable to noncontrolling interests | 1,111 | 302 | (171 | ) | 3,249 | ||||||||||
Comprehensive loss attributable to COPT | $ | (21,782 | ) | $ | (12,918 | ) | $ | (6,450 | ) | $ | (60,871 | ) |
Preferred Shares | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||||||||||
Balance at December 31, 2010 (66,931,582 common shares outstanding) | $ | 216,333 | $ | 669 | $ | 1,295,592 | $ | (281,794 | ) | $ | (4,163 | ) | $ | 96,501 | $ | 1,323,138 | |||||||||||
Conversion of common units to common shares (83,506 shares) | — | 1 | 1,275 | — | — | (1,276 | ) | — | |||||||||||||||||||
Common shares issued to the public (4,600,000 shares) | — | 46 | 145,315 | — | — | — | 145,361 | ||||||||||||||||||||
Exercise of share options (185,714 shares) | — | 2 | 2,393 | — | — | — | 2,395 | ||||||||||||||||||||
Share-based compensation | — | 2 | 9,536 | — | — | — | 9,538 | ||||||||||||||||||||
Restricted common share redemptions (112,683 shares) | — | — | (3,948 | ) | — | — | — | (3,948 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of Operating Partnership by COPT | — | — | (2,542 | ) | — | — | 2,542 | — | |||||||||||||||||||
Adjustments related to derivatives designated as cash flow hedges | — | — | — | — | (24,455 | ) | (2,562 | ) | (27,017 | ) | |||||||||||||||||
Net loss | — | — | — | (35,448 | ) | — | (1,655 | ) | (37,103 | ) | |||||||||||||||||
Dividends | — | — | — | (99,100 | ) | — | — | (99,100 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in the Operating Partnership | — | — | — | — | — | (5,894 | ) | (5,894 | ) | ||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | (23 | ) | — | — | 284 | 261 | |||||||||||||||||||
Distributions to noncontrolling interest in other consolidated entities | — | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||||
Balance at September 30, 2011 (71,986,936 common shares outstanding) | $ | 216,333 | $ | 720 | $ | 1,447,598 | $ | (416,342 | ) | $ | (28,618 | ) | $ | 87,932 | $ | 1,307,623 | |||||||||||
Balance at December 31, 2011 (72,011,324 common shares outstanding) | $ | 216,333 | $ | 720 | $ | 1,452,393 | $ | (532,288 | ) | $ | (1,733 | ) | $ | 82,640 | $ | 1,218,065 | |||||||||||
Conversion of common units to common shares (94,550 shares) | — | 1 | 1,187 | — | — | (1,188 | ) | — | |||||||||||||||||||
Preferred shares issued to the public (6,900,000 shares) | 172,500 | — | (6,838 | ) | — | — | — | 165,662 | |||||||||||||||||||
Costs associated with common shares issued to the public | — | — | (5 | ) | — | — | — | (5 | ) | ||||||||||||||||||
Redemption of preferred shares (2,200,000 shares) | (55,000 | ) | — | 1,827 | (1,827 | ) | — | — | (55,000 | ) | |||||||||||||||||
Exercise of share options (44,624 shares) | — | — | 666 | — | — | — | 666 | ||||||||||||||||||||
Share-based compensation | — | 1 | 9,191 | — | — | — | 9,192 | ||||||||||||||||||||
Restricted common share redemptions (135,777 shares) | — | — | (3,279 | ) | — | — | — | (3,279 | ) | ||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of Operating Partnership by COPT | — | — | 373 | — | — | (373 | ) | — | |||||||||||||||||||
Adjustments related to derivatives designated as cash flow hedges | — | — | — | — | (3,955 | ) | (397 | ) | (4,352 | ) | |||||||||||||||||
Increase in tax benefit from share-based compensation | — | — | 43 | — | — | — | 43 | ||||||||||||||||||||
Net loss | — | — | — | (2,341 | ) | — | 414 | (1,927 | ) | ||||||||||||||||||
Dividends | — | — | — | (74,203 | ) | — | — | (74,203 | ) | ||||||||||||||||||
Distributions to owners of common and preferred units in the Operating Partnership | — | — | — | — | — | (3,993 | ) | (3,993 | ) | ||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | — | (648 | ) | (648 | ) | ||||||||||||||||||
Balance at September 30, 2012 (72,157,635 common shares outstanding) | $ | 333,833 | $ | 722 | $ | 1,455,558 | $ | (610,659 | ) | $ | (5,688 | ) | $ | 76,455 | $ | 1,250,221 |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | 363,877 | $ | 350,593 | |||
Construction contract and other service revenues received | 58,637 | 73,382 | |||||
Property operating expenses paid | (137,644 | ) | (143,481 | ) | |||
Construction contract and other service expenses paid | (50,438 | ) | (73,009 | ) | |||
General and administrative and business development expenses paid | (14,257 | ) | (15,921 | ) | |||
Interest expense paid | (63,811 | ) | (69,237 | ) | |||
Previously accreted interest expense paid | — | (17,314 | ) | ||||
Cash settlement of interest rate derivatives | (29,738 | ) | — | ||||
Proceeds from sale of trading marketable securities | 18,975 | — | |||||
Exit costs on property dispositions | (4,066 | ) | — | ||||
Payments in connection with early extinguishment of debt | (2,637 | ) | (350 | ) | |||
Interest and other income received | 786 | 377 | |||||
Income taxes paid | (8 | ) | (174 | ) | |||
Net cash provided by operating activities | 139,676 | 104,866 | |||||
Cash flows from investing activities | |||||||
Purchases of and additions to properties | |||||||
Construction, development and redevelopment | (107,621 | ) | (169,873 | ) | |||
Acquisitions of operating properties | (48,308 | ) | (32,806 | ) | |||
Tenant improvements on operating properties | (20,924 | ) | (27,421 | ) | |||
Other capital improvements on operating properties | (9,571 | ) | (11,575 | ) | |||
Proceeds from sales of properties | 290,607 | 27,312 | |||||
Proceeds from sale of equity method investment | — | 5,773 | |||||
Mortgage and other loan receivables funded or acquired | (11,603 | ) | (20,401 | ) | |||
Mortgage and other loan receivables payments received | 119 | 5,203 | |||||
Leasing costs paid | (7,289 | ) | (10,357 | ) | |||
Other | (1,646 | ) | (3,580 | ) | |||
Net cash provided by (used in) investing activities | 83,764 | (237,725 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | 262,000 | 1,110,000 | |||||
Other debt proceeds | 399,296 | 438,619 | |||||
Repayments of debt | |||||||
Revolving Credit Facility | (844,000 | ) | (734,000 | ) | |||
Scheduled principal amortization | (9,094 | ) | (10,647 | ) | |||
Other debt repayments | (51,850 | ) | (698,050 | ) | |||
Deferred financing costs paid | (3,210 | ) | (12,771 | ) | |||
Net proceeds from issuance of preferred shares | 165,662 | — | |||||
Net proceeds from issuance of common shares | 661 | 147,781 | |||||
Redemption of preferred shares | (55,000 | ) | — | ||||
Common share dividends paid | (69,325 | ) | (84,971 | ) | |||
Preferred share dividends paid | (12,345 | ) | (12,076 | ) | |||
Distributions paid to noncontrolling interests in the Operating Partnership | (4,510 | ) | (5,937 | ) | |||
Restricted share redemptions | (3,279 | ) | (3,948 | ) | |||
Other | 1,004 | 261 | |||||
Net cash (used in) provided by financing activities | (223,990 | ) | 134,261 | ||||
Net (decrease) increase in cash and cash equivalents | (550 | ) | 1,402 | ||||
Cash and cash equivalents | |||||||
Beginning of period | 5,559 | 10,102 | |||||
End of period | $ | 5,009 | $ | 11,504 |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Reconciliation of net loss to net cash provided by operating activities: | |||||||
Net loss | $ | (1,927 | ) | $ | (37,103 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and other amortization | 95,248 | 102,963 | |||||
Impairment losses | 60,593 | 72,347 | |||||
Settlement of previously accreted interest expense | — | (17,314 | ) | ||||
Amortization of deferred financing costs | 4,696 | 5,090 | |||||
Increase in deferred rent receivable | (7,939 | ) | (7,587 | ) | |||
Amortization of net debt discounts | 2,357 | 4,778 | |||||
Gain on sales of real estate | (20,969 | ) | (4,166 | ) | |||
Gain on equity method investment | — | (2,452 | ) | ||||
Share-based compensation | 8,262 | 8,156 | |||||
(Gain) loss on early extinguishment of debt | (3,436 | ) | 1,670 | ||||
Other | (459 | ) | 18 | ||||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in accounts receivable | 10,063 | (1,311 | ) | ||||
Decrease in restricted cash and marketable securities | 15,051 | 3,035 | |||||
Decrease (increase) in prepaid expenses and other assets | 5,501 | (8,197 | ) | ||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 3,413 | (11,699 | ) | ||||
Decrease in rents received in advance and security deposits | (2,775 | ) | (3,362 | ) | |||
Decrease in interest rate derivatives in connection with cash settlement | (28,003 | ) | — | ||||
Net cash provided by operating activities | $ | 139,676 | $ | 104,866 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
(Decrease) increase in accrued capital improvements, leasing and other investing activity costs | $ | (11,627 | ) | $ | 25,314 | ||
Increase in property, debt and other liabilities in connection with acquisitions | $ | — | $ | 3,040 | |||
Decrease in property in connection with surrender of property in settlement of debt | $ | 12,812 | $ | — | |||
Decrease in debt in connection with surrender of property in settlement of debt | $ | 16,304 | $ | — | |||
Decrease in fair value of derivatives applied to AOCL and noncontrolling interests | $ | 4,398 | $ | 27,064 | |||
Dividends/distribution payable | $ | 26,954 | $ | 35,029 | |||
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | $ | 1,188 | $ | 1,276 | |||
Adjustments to noncontrolling interests resulting from changes in ownership of Operating Partnership by COPT | $ | 373 | $ | 2,542 |
• | 206 operating office properties totaling 18.6 million square feet; |
• | ten office properties under construction or redevelopment that we estimate will total approximately 1.2 million square feet upon completion, including two partially operational properties included above; |
• | land held or under pre-construction totaling 1,696 acres (including 572 controlled but not owned) that we believe are potentially developable into approximately 19.8 million square feet; and |
• | a partially operational, wholesale data center which upon completion and stabilization is expected to have a critical load of 18 megawatts. |
Common Units | 94 | % |
Series H Preferred Units | 100 | % |
Series I Preferred Units | 0 | % |
Series J Preferred Units | 100 | % |
Series K Preferred Units | 100 | % |
Series L Preferred Units | 100 | % |
• | our preferred shares of beneficial interest; these shares are reported on our consolidated balance sheets at their liquidation preference value after having been reported at par value in our 2011 Annual Report on Form 10-K; and |
• | costs expensed in connection with properties not in operations; these costs are included in the line on our consolidated statements of operations entitled “business development expenses and land carry costs,” after having been included in property operating expenses in our 2011 Annual Report on Form 10-K. |
Description | Quoted Prices in Active Markets for Identical Assets(Level 1) | Significant Other Observable Inputs(Level 2) | Significant Unobservable Inputs(Level 3) | Total | ||||||||||||
Assets: | ||||||||||||||||
Marketable securities in deferred compensation plan (1) | ||||||||||||||||
Mutual funds | $ | 6,161 | $ | — | $ | — | $ | 6,161 | ||||||||
Common stocks | 533 | — | — | 533 | ||||||||||||
Other | 242 | — | — | 242 | ||||||||||||
Common stock (1) | 438 | — | — | 438 | ||||||||||||
Warrants to purchase common shares in KEYW (2) | — | 295 | — | 295 | ||||||||||||
Assets | $ | 7,374 | $ | 295 | $ | — | $ | 7,669 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation plan liability (3) | $ | 6,936 | $ | — | $ | — | $ | 6,936 | ||||||||
Interest rate derivatives | — | 6,543 | — | 6,543 | ||||||||||||
Liabilities | $ | 6,936 | $ | 6,543 | $ | — | $ | 13,479 |
Impairment Losses | ||||||||||||||||||||||||
Quoted Prices in | Significant | Recognized (1) | ||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | Three Months | Nine Months | ||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Ended | Ended | ||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | September 30, 2012 | September 30, 2012 | ||||||||||||||||||
Assets (2): | ||||||||||||||||||||||||
Properties, net | $ | — | $ | — | $ | 369,312 | $ | 369,312 | $ | 52,900 | $ | 60,593 |
Description | Fair Value on Measurement Date | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||
Properties on which impairment losses were recognized | $ | 369,312 | Bid for properties indicative of value | Indicative bid (1) | (1) | |||||
Contract of sale | Contract price (1) | (1) | ||||||||
Discounted cash flow | Discount rate | 10.1% to 11.0% (10.4%) | ||||||||
Terminal capitalization rate | 8.7% to 10.0% (8.9%) | |||||||||
Market rent growth rate | 3.0% (2) | |||||||||
Expense growth rate | 3.0% (2) | |||||||||
Yield Analysis | Yield | 12% (2) | ||||||||
Market rent rate | $8.50 per square foot (2) | |||||||||
Leasing costs | $20.00 per square foot (2) |
September 30, 2012 | December 31, 2011 | ||||||
Land | $ | 427,559 | $ | 472,483 | |||
Buildings and improvements | 2,626,084 | 2,801,252 | |||||
Less: accumulated depreciation | (565,724 | ) | (559,679 | ) | |||
Operating properties, net | $ | 2,487,919 | $ | 2,714,056 |
September 30, 2012 | December 31, 2011 | ||||||
Land | $ | 220,234 | $ | 229,833 | |||
Construction in progress, excluding land | 394,361 | 409,086 | |||||
Projects in development or held for future development | $ | 614,595 | $ | 638,919 |
Project Name | Location | Date of Sale | Number of Buildings | Total Rentable Square Feet | Transaction Value | Gain on Disposition | ||||||||||||
White Marsh Portfolio Disposition | White Marsh, Maryland | 1/30/2012 | 5 | 163,000 | $ | 19,100 | $ | 2,445 | ||||||||||
1101 Sentry Gateway | San Antonio, Texas | 1/31/2012 | 1 | 95,000 | 13,500 | 1,739 | ||||||||||||
222 and 224 Schilling Circle | Hunt Valley, Maryland | 2/10/2012 | 2 | 56,000 | 4,400 | 102 | ||||||||||||
15 and 45 West Gude Drive | Rockville, Maryland | 5/2/2012 | 2 | 231,000 | 49,107 | — | ||||||||||||
11800 Tech Road | Silver Spring, Maryland | 6/14/2012 | 1 | 240,000 | 21,300 | — | ||||||||||||
400 Professional Drive | Gaithersburg, Maryland | 7/2/2012 | 1 | 130,000 | 16,198 | — | ||||||||||||
July 2012 Portfolio Disposition | Baltimore/Washington Corridor and Greater Baltimore | 7/24/2012 | 23 | 1,387,000 | 161,901 | 16,908 | ||||||||||||
35 | 2,302,000 | $ | 285,506 | $ | 21,194 |
Three Months Ended | |||||||||||||||
9/30/2012 | 6/30/2012 | 3/31/2012 | Total | ||||||||||||
Operating properties | $ | 55,829 | $ | 2,354 | $ | 11,833 | $ | 70,016 | |||||||
Non-operating properties | — | — | (5,246 | ) | (5,246 | ) | |||||||||
Total | $ | 55,829 | $ | 2,354 | $ | 6,587 | $ | 64,770 |
Land, operating properties | $ | 3,507 | ||
Building and improvements | 30,177 | |||
Intangible assets on real estate acquisitions | 14,993 | |||
Total assets | 48,677 | |||
Below-market leases | (369 | ) | ||
Total acquisition cost | $ | 48,308 |
Weighted Average Amortization Period (in Years) | |||||
Tenant relationship value | $ | 7,472 | 10 | ||
In-place lease value | 7,109 | 5 | |||
Above-market leases | 412 | 5 | |||
$ | 14,993 | 7 |
Investment Balance at (1) | Date | Nature of | Maximum Exposure | |||||||||||||
September 30, 2012 | December 31, 2011 | Acquired | Ownership | Activity | to Loss (2) | |||||||||||
$ | (6,420 | ) | $ | (6,071 | ) | 9/29/2005 | 20% | Operates 16 Buildings | $ | — |
September 30, 2012 | December 31, 2011 | ||||||
Properties, net | $ | 58,763 | $ | 59,792 | |||
Other assets | 4,223 | 3,529 | |||||
Total assets | $ | 62,986 | $ | 63,321 | |||
Liabilities (primarily debt) | $ | 69,120 | $ | 67,710 | |||
Owners’ equity | (6,134 | ) | (4,389 | ) | |||
Total liabilities and owners’ equity | $ | 62,986 | $ | 63,321 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 1,778 | $ | 1,905 | $ | 5,497 | $ | 5,719 | |||||||
Property operating expenses | (758 | ) | (904 | ) | (2,219 | ) | (2,869 | ) | |||||||
Interest expense | (1,138 | ) | (984 | ) | (3,291 | ) | (2,983 | ) | |||||||
Depreciation and amortization expense | (568 | ) | (578 | ) | (1,732 | ) | (1,753 | ) | |||||||
Net loss | $ | (686 | ) | $ | (561 | ) | $ | (1,745 | ) | $ | (1,886 | ) |
Ownership | September 30, 2012 | (1) | ||||||||||||||||
Date | % at | Total | Pledged | Total | ||||||||||||||
Acquired | 9/30/2012 | Nature of Activity | Assets | Assets | Liabilities | |||||||||||||
LW Redstone Company, LLC | 3/23/2010 | 85% | Developing business park (2) | $ | 68,494 | $ | 16,146 | $ | 13,364 | |||||||||
M Square Associates, LLC | 6/26/2007 | 50% | Operating two buildings and developing others (3) | 60,608 | 47,642 | 43,762 | ||||||||||||
Arundel Preserve #5, LLC | 7/2/2007 | 50% | Operating one building (4) | 38,636 | 36,838 | 20,118 | ||||||||||||
COPT-FD Indian Head, LLC | 10/23/2006 | 75% | Holding land parcel (5) | 6,538 | — | — | ||||||||||||
MOR Forbes 2 LLC | 12/24/2002 | 50% | Operating one building (6) | 3,831 | — | 95 | ||||||||||||
$ | 178,107 | $ | 100,626 | $ | 77,339 |
September 30, 2012 | December 31, 2011 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
In-place lease value | $ | 134,964 | $ | 89,808 | $ | 45,156 | $ | 151,361 | $ | 97,594 | $ | 53,767 | ||||||||||||
Tenant relationship value | 46,827 | 22,192 | 24,635 | 45,940 | 23,246 | 22,694 | ||||||||||||||||||
Above-market cost arrangements | 12,416 | 3,789 | 8,627 | 12,416 | 2,857 | 9,559 | ||||||||||||||||||
Above-market leases | 8,925 | 7,278 | 1,647 | 10,118 | 8,037 | 2,081 | ||||||||||||||||||
Market concentration premium | 1,333 | 339 | 994 | 1,333 | 314 | 1,019 | ||||||||||||||||||
$ | 204,465 | $ | 123,406 | $ | 81,059 | $ | 221,168 | $ | 132,048 | $ | 89,120 |
September 30, 2012 | December 31, 2011 | ||||||
Mortgage and other investing receivables | $ | 40,761 | $ | 27,998 | |||
Prepaid expenses | 24,396 | 20,035 | |||||
Furniture, fixtures and equipment, net | 8,657 | 10,177 | |||||
Deferred tax asset | 6,666 | 10,892 | |||||
Lease incentives | 5,595 | 5,233 | |||||
Other assets | 6,472 | 13,284 | |||||
Prepaid expenses and other assets | $ | 92,547 | $ | 87,619 |
September 30, 2012 | December 31, 2011 | ||||||
Notes receivable from City of Huntsville | $ | 30,623 | $ | 17,741 | |||
Mortgage loans receivable | 10,138 | 10,257 | |||||
$ | 40,761 | $ | 27,998 |
Maximum | |||||||||||||||
Availability at | Carrying Value at | Scheduled Maturity | |||||||||||||
September 30, 2012 | September 30, 2012 | December 31, 2011 | Stated Interest Rates at | Dates at | |||||||||||
September 30, 2012 | September 30, 2012 | ||||||||||||||
Mortgage and Other Secured Loans: | |||||||||||||||
Fixed rate mortgage loans (1) | N/A | $ | 978,461 | $ | 1,052,421 | 5.20% - 7.87% (2) | 2013-2034 | ||||||||
Variable rate secured loans | N/A | 38,671 | 39,213 | LIBOR + 2.25% (3) | 2015 | ||||||||||
Other construction loan facilities | $ | 123,802 | 70,374 | 40,336 | LIBOR + 1.95% to 2.75% (4) | 2013-2015 | |||||||||
Total mortgage and other secured loans | 1,087,506 | 1,131,970 | |||||||||||||
Revolving Credit Facility (5) | 800,000 | 80,000 | 662,000 | LIBOR + 1.75% to 2.50% (6) | September 1, 2014 | ||||||||||
Term Loan Facilities (7) | 770,000 | 770,000 | 400,000 | LIBOR + 1.65% to 2.60% (8) | 2015-2019 | ||||||||||
Unsecured notes payable | N/A | 1,809 | 5,050 | 0% (9) | 2026 | ||||||||||
4.25% Exchangeable Senior Notes | N/A | 230,000 | 227,283 | 4.25% | April 2030 (10) | ||||||||||
Total debt | $ | 2,169,315 | $ | 2,426,303 |
(1) | Several of the fixed rate mortgages carry interest rates that were above or below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $1.5 million at September 30, 2012 and $2.4 million at December 31, 2011. |
(2) | The weighted average interest rate on these loans was 6.00% at September 30, 2012. |
(3) | The interest rate on the loan outstanding was 2.48% at September 30, 2012. |
(4) | The weighted average interest rate on these loans was 2.72% at September 30, 2012. |
(5) | Effective August 10, 2012, we exercised our right to reduce the lenders’ aggregate commitment under the facility from $1.0 billion to $800 million, with the ability for us to increase the lenders’ aggregate commitment to $1.3 billion, provided that there is no default under the facility and subject to the approval of the lenders. |
(6) | The weighted average interest rate on the Revolving Credit Facility was 2.19% at September 30, 2012. |
(7) | We have the ability to borrow an aggregate of an additional $180.0 million under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. As described further below, we entered into new facilities in 2012. |
(8) | The weighted average interest rate on these loans was 2.19% at September 30, 2012. |
(9) | These notes carry interest rates that were below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying value of these notes reflects an unamortized discount totaling $902,000 at September 30, 2012 and $1.8 million at December 31, 2011. |
(10) | As described further in our 2011 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at the Operating Partnership’s discretion, our common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2012 and is equivalent to an exchange price of $47.96 per common share). The carrying value of these notes included a principal amount of $240 million and an unamortized discount totaling $10.0 million at September 30, 2012 and $12.7 million at December 31, 2011. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2012 and December 31, 2011 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands): |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Interest expense at stated interest rate | $ | 2,550 | $ | 2,550 | $ | 7,650 | $ | 7,650 | |||||||
Interest expense associated with amortization of discount | 919 | 866 | 2,717 | 2,558 | |||||||||||
Total | $ | 3,469 | $ | 3,416 | $ | 10,367 | $ | 10,208 |
September 30, 2012 | December 31, 2011 | ||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||
Fixed-rate debt | |||||||||||||||
4.25% Exchangeable Senior Notes | $ | 230,000 | $ | 240,335 | $ | 227,283 | $ | 238,077 | |||||||
Other fixed-rate debt | 980,270 | 992,977 | 1,057,471 | 1,054,424 | |||||||||||
Variable-rate debt | 959,045 | 959,944 | 1,141,549 | 1,139,856 | |||||||||||
$ | 2,169,315 | $ | 2,193,256 | $ | 2,426,303 | $ | 2,432,357 |
Fair Value at | |||||||||||||||||||
Notional Amount | Fixed Rate | Floating Rate Index | Effective Date | Expiration Date | September 30, 2012 | December 31, 2011 | |||||||||||||
$ | 100,000 | 0.6123 | % | One-Month LIBOR | 1/3/2012 | 9/1/2014 | $ | (671 | ) | $ | 55 | ||||||||
100,000 | 0.6100 | % | One-Month LIBOR | 1/3/2012 | 9/1/2014 | (667 | ) | 56 | |||||||||||
100,000 | 0.8320 | % | One-Month LIBOR | 1/3/2012 | 9/1/2015 | (1,447 | ) | (66 | ) | ||||||||||
100,000 | 0.8320 | % | One-Month LIBOR | 1/3/2012 | 9/1/2015 | (1,447 | ) | (49 | ) | ||||||||||
38,671 | (1) | 3.8300 | % | One-Month LIBOR | 11/2/2010 | 11/2/2015 | (1,393 | ) | (1,054 | ) | |||||||||
100,000 | 0.8055 | % | One-Month LIBOR | 9/2/2014 | 9/1/2016 | (262 | ) | — | |||||||||||
100,000 | 0.8100 | % | One-Month LIBOR | 9/2/2014 | 9/1/2016 | (272 | ) | — | |||||||||||
100,000 | 1.6730 | % | One-Month LIBOR | 9/1/2015 | 8/1/2019 | (123 | ) | — | |||||||||||
100,000 | 1.7300 | % | One-Month LIBOR | 9/1/2015 | 8/1/2019 | (261 | ) | — | |||||||||||
50,000 | 0.5025 | % | One-Month LIBOR | 1/3/2011 | 1/3/2012 | — | (1 | ) | |||||||||||
50,000 | 0.5025 | % | One-Month LIBOR | 1/3/2011 | 1/3/2012 | — | (1 | ) | |||||||||||
120,000 | 1.7600 | % | One-Month LIBOR | 1/2/2009 | 5/1/2012 | — | (552 | ) | |||||||||||
100,000 | 1.9750 | % | One-Month LIBOR | 1/1/2010 | 5/1/2012 | — | (532 | ) | |||||||||||
100,000 | (2) | 3.8415 | % | Three-Month LIBOR | 9/30/2011 | 9/30/2021 | — | (16,333 | ) | ||||||||||
75,000 | (2) | 3.8450 | % | Three-Month LIBOR | 9/30/2011 | 9/30/2021 | — | (12,275 | ) | ||||||||||
100,000 | (2) | 2.0525 | % | Three-Month LIBOR-Reverse | 12/30/2011 | 9/30/2021 | — | 345 | |||||||||||
75,000 | (2) | 2.0525 | % | Three-Month LIBOR-Reverse | 12/30/2011 | 9/30/2021 | — | 260 | |||||||||||
$ | (6,543 | ) | $ | (30,147 | ) |
(1) | The notional amount of this instrument is scheduled to amortize to $36.2 million. |
(2) | As described further in our 2011 Annual Report on Form 10-K, on January 5, 2012, we settled these instruments, along with interest accrued thereon, for an aggregate of $29.7 million. Our policy is to present payments to terminate interest rate swaps entered into in order to hedge forecasted interest payments as operating activities on our consolidated statement of cash flows. Accordingly, the payments to settle these instruments were included in net cash provided by operating activities on our consolidated statement of cash flows. |
September 30, 2012 | December 31, 2011 | |||||||||||
Derivatives | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Interest rate swaps designated as cash flow hedges | Prepaid expenses and other assets | $ | — | Prepaid expenses and other assets | $ | 111 | ||||||
Interest rate swaps not designated as hedges | N/A | — | Prepaid expenses and other assets | 605 | ||||||||
Interest rate swaps designated as cash flow hedges | Interest rate derivatives | (6,543 | ) | Interest rate derivatives | (2,255 | ) | ||||||
Interest rate swaps not designated as hedges | N/A | — | Interest rate derivatives | (28,608 | ) |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Amount of loss recognized in accumulated other comprehensive loss (“AOCL”) (effective portion) | $ | (2,760 | ) | $ | (21,869 | ) | $ | (7,386 | ) | $ | (30,463 | ) | |||
Amount of loss reclassified from AOCL into interest expense (effective portion) | (632 | ) | (1,179 | ) | (3,034 | ) | (3,446 | ) |
Operating Office Property Segments | |||||||||||||||||||||||||||||||||||||||||||||||
Baltimore/ Washington Corridor | Northern Virginia | San Antonio | Washington, DC - Capitol Riverfront | St. Mary’s & King George Counties | Greater Baltimore | Suburban Maryland | Colorado Springs | Greater Philadelphia | Other | Operating Wholesale Data Center | Total | ||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 55,799 | $ | 20,363 | $ | 8,125 | $ | 4,389 | $ | 4,085 | $ | 11,918 | $ | 2,371 | $ | 6,278 | $ | 2,541 | $ | 3,589 | $ | 1,806 | $ | 121,264 | |||||||||||||||||||||||
Property operating expenses | 19,069 | 7,313 | 4,337 | 1,959 | 1,292 | 4,662 | 1,058 | 2,528 | 736 | 716 | 1,346 | 45,016 | |||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 36,730 | $ | 13,050 | $ | 3,788 | $ | 2,430 | $ | 2,793 | $ | 7,256 | $ | 1,313 | $ | 3,750 | $ | 1,805 | $ | 2,873 | $ | 460 | $ | 76,248 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 4,454 | $ | 54,781 | $ | — | $ | 414 | $ | 355 | $ | 1,055 | $ | 36 | $ | 548 | $ | 195 | $ | (35 | ) | $ | — | $ | 61,803 | ||||||||||||||||||||||
Transfers from non-operating properties | $ | 12,431 | $ | 12,979 | $ | — | $ | — | $ | 24 | $ | 99 | $ | (88 | ) | $ | 315 | $ | 1,843 | $ | 548 | $ | (5 | ) | $ | 28,146 | |||||||||||||||||||||
Three Months Ended September 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 54,744 | $ | 18,640 | $ | 7,701 | $ | 4,507 | $ | 3,508 | $ | 18,193 | $ | 5,648 | $ | 6,037 | $ | 1,701 | $ | 3,167 | $ | 1,283 | $ | 125,129 | |||||||||||||||||||||||
Property operating expenses | 19,628 | 7,278 | 3,824 | 1,808 | 1,143 | 7,553 | 1,975 | 2,465 | 417 | 849 | 1,054 | 47,994 | |||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 35,116 | $ | 11,362 | $ | 3,877 | $ | 2,699 | $ | 2,365 | $ | 10,640 | $ | 3,673 | $ | 3,572 | $ | 1,284 | $ | 2,318 | $ | 229 | $ | 77,135 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 3,410 | $ | 5,420 | $ | — | $ | (227 | ) | $ | 197 | $ | 2,034 | $ | 4,126 | $ | 1,369 | $ | 694 | $ | 26,769 | $ | 51 | $ | 43,843 | ||||||||||||||||||||||
Transfers from non-operating properties | $ | 17,625 | $ | 7 | $ | 87 | $ | — | $ | — | $ | 343 | $ | 11 | $ | 209 | $ | 48 | $ | — | $ | 13,515 | $ | 31,845 | |||||||||||||||||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 167,726 | $ | 57,974 | $ | 23,563 | $ | 12,515 | $ | 12,436 | $ | 41,954 | $ | 12,680 | $ | 18,880 | $ | 7,171 | $ | 10,977 | $ | 4,660 | $ | 370,536 | |||||||||||||||||||||||
Property operating expenses | 58,285 | 21,889 | 12,177 | 5,585 | 3,689 | 16,357 | 5,461 | 7,107 | 2,083 | 2,201 | 3,728 | 138,562 | |||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 109,441 | $ | 36,085 | $ | 11,386 | $ | 6,930 | $ | 8,747 | $ | 25,597 | $ | 7,219 | $ | 11,773 | $ | 5,088 | $ | 8,776 | $ | 932 | $ | 231,974 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 9,393 | $ | 57,161 | $ | 259 | $ | 116 | $ | 815 | $ | 5,390 | $ | 1,219 | $ | 1,334 | $ | 285 | $ | 124 | $ | 11 | $ | 76,107 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 42,488 | $ | 12,979 | $ | 464 | $ | — | $ | 218 | $ | 493 | $ | 793 | $ | 2,611 | $ | 11,233 | $ | 394 | $ | 57,675 | $ | 129,348 | |||||||||||||||||||||||
Segment assets at September 30, 2012 | $ | 1,187,700 | $ | 535,521 | $ | 119,752 | $ | 106,090 | $ | 97,977 | $ | 283,996 | $ | 53,395 | $ | 173,918 | $ | 66,301 | $ | 111,426 | $ | 100,471 | $ | 2,836,547 | |||||||||||||||||||||||
Nine Months Ended September 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 160,856 | $ | 55,359 | $ | 22,453 | $ | 13,349 | $ | 10,606 | $ | 53,651 | $ | 16,582 | $ | 17,869 | $ | 5,315 | $ | 8,567 | $ | 3,769 | $ | 368,376 | |||||||||||||||||||||||
Property operating expenses | 58,669 | 22,144 | 10,775 | 5,092 | 3,118 | 23,238 | 6,814 | 6,788 | 1,180 | 2,409 | 2,592 | 142,819 | |||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 102,187 | $ | 33,215 | $ | 11,678 | $ | 8,257 | $ | 7,488 | $ | 30,413 | $ | 9,768 | $ | 11,081 | $ | 4,135 | $ | 6,158 | $ | 1,177 | $ | 225,557 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 14,631 | $ | 10,234 | $ | — | $ | 585 | $ | 1,038 | $ | 14,237 | $ | 7,631 | $ | 3,190 | $ | 690 | $ | 26,773 | $ | 51 | $ | 79,060 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 43,648 | $ | 4 | $ | 846 | $ | — | $ | — | $ | 8,184 | $ | 396 | $ | 211 | $ | 3,598 | $ | — | $ | 20,169 | $ | 77,056 | |||||||||||||||||||||||
Segment assets at September 30, 2011 | $ | 1,200,407 | $ | 485,450 | $ | 115,001 | $ | 112,865 | $ | 84,781 | $ | 438,041 | $ | 145,677 | $ | 212,415 | $ | 101,432 | $ | 115,777 | $ | 43,904 | $ | 3,055,750 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Segment revenues from real estate operations | $ | 121,264 | $ | 125,129 | $ | 370,536 | $ | 368,376 | |||||||
Construction contract and other service revenues | 15,283 | 18,729 | 53,812 | 67,854 | |||||||||||
Less: Revenues from discontinued operations (Note 14) | (6,403 | ) | (17,151 | ) | (33,849 | ) | (51,363 | ) | |||||||
Total revenues | $ | 130,144 | $ | 126,707 | $ | 390,499 | $ | 384,867 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Segment property operating expenses | $ | 45,016 | $ | 47,994 | $ | 138,562 | $ | 142,819 | |||||||
Less: Property operating expenses from discontinued operations (Note 14) | (2,217 | ) | (6,325 | ) | (12,223 | ) | (19,684 | ) | |||||||
Total property operating expenses | $ | 42,799 | $ | 41,669 | $ | 126,339 | $ | 123,135 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Construction contract and other service revenues | $ | 15,283 | $ | 18,729 | $ | 53,812 | $ | 67,854 | |||||||
Construction contract and other service expenses | (14,410 | ) | (18,171 | ) | (51,302 | ) | (65,698 | ) | |||||||
NOI from service operations | $ | 873 | $ | 558 | $ | 2,510 | $ | 2,156 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
NOI from real estate operations | $ | 76,248 | $ | 77,135 | $ | 231,974 | $ | 225,557 | |||||||
NOI from service operations | 873 | 558 | 2,510 | 2,156 | |||||||||||
Interest and other income | 1,095 | (242 | ) | 3,152 | 3,682 | ||||||||||
Equity in loss of unconsolidated entities | (246 | ) | (159 | ) | (522 | ) | (223 | ) | |||||||
Income tax (expense) benefit | (106 | ) | 457 | (4,296 | ) | 6,043 | |||||||||
Other adjustments: | — | — | |||||||||||||
Depreciation and other amortization associated with real estate operations | (28,698 | ) | (31,269 | ) | (84,920 | ) | (84,205 | ) | |||||||
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 | ) | |||||||
Interest expense on continuing operations | (23,239 | ) | (24,176 | ) | (71,909 | ) | (74,861 | ) | |||||||
NOI from discontinued operations | (4,186 | ) | (10,826 | ) | (21,626 | ) | (31,679 | ) | |||||||
Loss on early extinguishment of debt | (768 | ) | (1,611 | ) | (937 | ) | (1,636 | ) | |||||||
(Loss) income from continuing operations | $ | (31,816 | ) | $ | 1,962 | $ | (12,160 | ) | $ | (21,722 | ) |
September 30, 2012 | September 30, 2011 | ||||||
Segment assets | $ | 2,836,547 | $ | 3,055,750 | |||
Non-operating property assets | 616,526 | 727,268 | |||||
Other assets | 144,583 | 182,374 | |||||
Total assets | $ | 3,597,656 | $ | 3,965,392 |
Percentile Rank | Earned PSUs Payout % | |
75th or greater | 200% of PSUs granted | |
50th or greater | 100% of PSUs granted | |
25th | 50% of PSUs granted | |
Below 25th | 0% of PSUs granted |
• | the number of earned PSUs in settlement of the award plan; plus |
• | the aggregate dividends that would have been paid with respect to the common shares issued in settlement of the earned PSUs through the date of settlement had such shares been issued on the grant date, divided by the share price on such settlement date, as defined under the terms of the agreement. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Deferred | |||||||||||||||
Federal | $ | (87 | ) | $ | 427 | $ | (3,517 | ) | $ | 4,993 | |||||
State | (19 | ) | 95 | (779 | ) | 1,105 | |||||||||
(106 | ) | 522 | (4,296 | ) | 6,098 | ||||||||||
Current | |||||||||||||||
Federal | — | (53 | ) | — | (45 | ) | |||||||||
State | — | (12 | ) | — | (10 | ) | |||||||||
— | (65 | ) | — | (55 | ) | ||||||||||
Total income tax (expense) benefit | $ | (106 | ) | $ | 457 | $ | (4,296 | ) | $ | 6,043 |
• | 1344 and 1348 Ashton Road and 1350 Dorsey Road in the Baltimore/Washington Corridor that were sold on May 24, 2011; |
• | 216 Schilling Circle in Greater Baltimore that was sold on August 23, 2011; |
• | four properties comprising the Towson Portfolio in Greater Baltimore that were sold on September 29, 2011; |
• | 11011 McCormick Road in Greater Baltimore that was sold on November 1, 2011; |
• | 10001 Franklin Square Drive in Greater Baltimore that was sold on December 13, 2011; |
• | 13 properties comprising the Rutherford Business Center portfolio in Greater Baltimore that were sold on December 15, 2011; |
• | five properties in White Marsh, Maryland (in the Greater Baltimore region) that were sold on January 30, 2012; |
• | 1101 Sentry Gateway in San Antonio that was sold on January 31, 2012; |
• | 222 and 224 Schilling Circle in Greater Baltimore that were sold on February 10, 2012; |
• | 15 and 45 West Gude Drive in Suburban Maryland that were sold on May 2, 2012; |
• | 11800 Tech Road in Suburban Maryland that was sold on June 14, 2012; |
• | 400 Professional Drive in Suburban Maryland for which the title to the property was transferred to the mortgage lender on July 2, 2012 (see Note 4); |
• | 23 operating properties in the Baltimore/Washington Corridor and Greater Baltimore regions that were sold on July 24, 2012; and |
• | 16 operating properties in Colorado Springs and an operating property in Suburban Maryland classified as held for sale at September 30, 2012. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue from real estate operations | $ | 6,403 | $ | 17,151 | $ | 33,849 | $ | 51,363 | |||||||
Property operating expenses | (2,217 | ) | (6,325 | ) | (12,223 | ) | (19,684 | ) | |||||||
Depreciation and amortization | (1,926 | ) | (4,763 | ) | (8,457 | ) | (16,896 | ) | |||||||
Impairment losses | (9,733 | ) | — | (23,510 | ) | (29,364 | ) | ||||||||
Business development and land carry costs | — | (17 | ) | (24 | ) | (56 | ) | ||||||||
Interest expense | (127 | ) | (1,453 | ) | (2,107 | ) | (4,526 | ) | |||||||
Gain on sales of real estate | 16,913 | 1,299 | 20,948 | 1,438 | |||||||||||
Gain (loss) on early extinguishment of debt | 1,738 | (384 | ) | 1,736 | (384 | ) | |||||||||
Discontinued operations | $ | 11,051 | $ | 5,508 | $ | 10,212 | $ | (18,109 | ) |
September 30, 2012 | December 31, 2011 | ||||||
Properties, net | $ | 126,789 | $ | 108,356 | |||
Deferred rent receivable | 3,733 | 2,800 | |||||
Intangible assets on real estate acquisitions, net | 4,417 | 1,737 | |||||
Deferred leasing and financing costs, net | 2,781 | 3,723 | |||||
Lease incentives | 95 | — | |||||
Assets held for sale | $ | 137,815 | $ | 116,616 |
• | the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into our common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to share-based compensation using the treasury stock or if-converted methods; and |
• | the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we added to the denominator. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Numerator: | |||||||||||||||
(Loss) income from continuing operations | $ | (31,816 | ) | $ | 1,962 | $ | (12,160 | ) | $ | (21,722 | ) | ||||
Gain on sales of real estate, net | — | — | 21 | 2,728 | |||||||||||
Preferred share dividends | (6,546 | ) | (4,025 | ) | (14,738 | ) | (12,076 | ) | |||||||
Issuance costs associated with redeemed preferred shares | (1,827 | ) | — | (1,827 | ) | — | |||||||||
Loss (income) from continuing operations attributable to noncontrolling interests | 1,616 | (581 | ) | 124 | 540 | ||||||||||
Income from continuing operations attributable to restricted shares | (111 | ) | (262 | ) | (357 | ) | (781 | ) | |||||||
Numerator for basic EPS from continuing operations attributable to COPT common shareholders | (38,684 | ) | (2,906 | ) | (28,937 | ) | (31,311 | ) | |||||||
Dilutive effect of common units in the Operating Partnership on diluted EPS from continuing operations | — | — | — | (2,025 | ) | ||||||||||
Numerator for diluted EPS from continuing operations attributable to COPT common shareholders | $ | (38,684 | ) | $ | (2,906 | ) | $ | (28,937 | ) | $ | (33,336 | ) | |||
Numerator for basic EPS from continuing operations attributable to COPT common shareholders | $ | (38,684 | ) | $ | (2,906 | ) | $ | (28,937 | ) | $ | (31,311 | ) | |||
Discontinued operations | 11,051 | 5,508 | 10,212 | (18,109 | ) | ||||||||||
Discontinued operations attributable to noncontrolling interests | (623 | ) | (323 | ) | (538 | ) | 1,115 | ||||||||
Numerator for basic EPS on net (loss) income attributable to COPT common shareholders | (28,256 | ) | 2,279 | (19,263 | ) | (48,305 | ) | ||||||||
Dilutive effect of common units in the Operating Partnership | — | — | — | (3,188 | ) | ||||||||||
Numerator for diluted EPS on net (loss) income attributable to COPT common shareholders | $ | (28,256 | ) | $ | 2,279 | $ | (19,263 | ) | $ | (51,493 | ) | ||||
Denominator (all weighted averages): | |||||||||||||||
Denominator for basic EPS (common shares) | 71,688 | 71,312 | 71,590 | 68,718 | |||||||||||
Dilutive effect of common units | — | — | — | 4,371 | |||||||||||
Denominator for basic and diluted EPS | 71,688 | 71,312 | 71,590 | 73,089 | |||||||||||
Basic EPS: | |||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.54 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.46 | ) | |||
Discontinued operations attributable to COPT common shareholders | 0.15 | 0.07 | 0.13 | (0.24 | ) | ||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.39 | ) | $ | 0.03 | $ | (0.27 | ) | $ | (0.70 | ) | ||||
Diluted EPS: | |||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.54 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.46 | ) | |||
Discontinued operations attributable to COPT common shareholders | 0.15 | 0.07 | 0.13 | (0.24 | ) | ||||||||||
Net (loss) income attributable to COPT common shareholders | $ | (0.39 | ) | $ | 0.03 | $ | (0.27 | ) | $ | (0.70 | ) |
Weighed Average Shares Excluded from Denominator | |||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Conversion of common units | 4,233 | 4,336 | 4,256 | — | |||||||
Conversion of convertible preferred units | 176 | 176 | 176 | 176 | |||||||
Conversion of convertible preferred shares | 434 | 434 | 434 | 434 |
• | weighted average restricted shares for the three months ended September 30, 2012 and 2011 of 420,000 and 629,000, respectively, and for the nine months ended September 30, 2012 and 2011 of 475,000 and 635,000, respectively; and |
• | weighted average options for the three months ended September 30, 2012 and 2011 of 752,000 and 697,000, respectively, and for the nine months ended September 30, 2012 and 2011 of 780,000 and 655,000, respectively. |
• | to indemnify the tenant against losses covered under the prior owner’s indemnity agreement if the prior owner fails to indemnify the tenant for such losses. This indemnification is capped at $5.0 million in perpetuity after the State of New Jersey declares the remediation to be complete; |
• | to indemnify the tenant for consequential damages (e.g., business interruption) at one of the buildings in perpetuity and another of the buildings for 15 years after the tenant’s acquisition of the property from us. This indemnification is limited to $12.5 million; and |
• | to pay 50% of additional costs related to construction and environmental regulatory activities incurred by the tenant as a result of the indemnified environmental condition of the properties. This indemnification is limited to $300,000 annually and $1.5 million in the aggregate. |
• | completed dispositions of 35 operating properties totaling 2.3 million square feet and non-operating properties for aggregate transaction values totaling $313.6 million. The $291 million in net proceeds from these sales after secured debt repayment and other transaction costs were used primarily to pay down our Revolving Credit Facility; |
• | acquired a property in Herndon, Virginia totaling 202,000 square feet that was 100% leased for $48.3 million on July 11, 2012; |
• | issued 6.9 million Series L Cumulative Preferred Shares (the “Series L Preferred Shares”) at a price of $25.00 per share for net proceeds of $165.7 million after underwriting discounts but before offering expenses. These shares are nonvoting and redeemable for cash at $25.00 per share at our option on or after June 27, 2017. The net proceeds were used to pay down our Revolving Credit Facility and for general corporate purposes; |
• | redeemed all of our Series G Preferred Shares of beneficial interest (the “Series G Preferred Shares”) at a price of $25.00 per share, or $55.0 million in the aggregate, plus accrued and unpaid dividends thereon through the date of redemption; |
• | entered into unsecured term loan agreements, under which we borrowed $370 million in the aggregate. The net proceeds from these borrowings were used to pay down our Revolving Credit Facility; |
• | exercised our right to reduce the lenders’ aggregate commitment under our unsecured revolving credit facility from $1.0 billion to $800 million, with the ability, subject to certain conditions, for us to increase the lenders’ aggregate commitment to $1.3 billion; |
• | finished the period with occupancy of our portfolio of operating office properties at 88.1%; |
• | had an increase of $6.4 million as compared to the nine months ended September 30, 2011 in our net operating income (“NOI”) from real estate operations (defined below) attributable to our Same Office Properties (also defined below); and |
• | had a decrease in net loss attributable to common shareholders of $28.6 million as compared to the nine months ended September 30, 2011, due in large part to an increase in gain on sales of properties and a decrease in impairment losses, as discussed further below. |
• | how we expect to generate cash for short and long-term capital needs; and |
• | our commitments and contingencies. |
• | general economic and business conditions, which will, among other things, affect office property and data center demand |
• | 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 our strategic customers; |
• | our 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; |
• | our ability to sell properties included in our Strategic Reallocation Plan; |
• | risks of investing through joint venture structures, including risks that our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives; |
• | changes in our 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; |
• | our ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships; |
• | the dilutive effects of issuing additional common shares; and |
• | environmental requirements. |
September 30, 2012 | December 31, 2011 | ||||||
Occupancy rates at period end | |||||||
Total | 88.1 | % | 86.2 | % | |||
Baltimore/Washington Corridor | 89.0 | % | 87.9 | % | |||
Northern Virginia | 87.9 | % | 84.8 | % | |||
San Antonio | 96.5 | % | 90.7 | % | |||
Washington, DC - Capitol Riverfront | 89.0 | % | 91.6 | % | |||
St. Mary’s and King George Counties | 85.4 | % | 87.3 | % | |||
Greater Baltimore | 84.3 | % | 84.5 | % | |||
Suburban Maryland | 94.1 | % | 79.6 | % | |||
Colorado Springs | 76.5 | % | 74.9 | % | |||
Greater Philadelphia | 100.0 | % | 99.7 | % | |||
Other | 100.0 | % | 100.0 | % | |||
Average contractual annual rental rate per square foot at period end (1) | $ | 27.73 | $ | 26.59 |
(1) | Includes estimated expense reimbursements. |
Rentable Square Feet | Occupied Square Feet | ||||
(in thousands) | |||||
December 31, 2011 | 20,514 | 17,685 | |||
Square feet vacated upon lease expiration (1) | — | (681 | ) | ||
Square feet retenanted after lease expiration (2) | — | 552 | |||
Square feet constructed or redeveloped | 184 | 450 | |||
Acquisition | 202 | 202 | |||
Dispositions | (2,302 | ) | (1,833 | ) | |
Other changes | (7 | ) | 4 | ||
September 30, 2012 | 18,591 | 16,379 |
(1) | Includes lease terminations and space reductions occurring in connection with lease renewals. |
(2) | Excludes retenanting of vacant square feet acquired or developed. |
• | office properties owned and 100% operational throughout the current and prior year reporting periods, excluding properties held for future disposition. We define these as changes from “Same Office Properties”; |
• | office properties acquired during the current and prior year reporting periods; |
• | constructed office properties placed into service that were not 100% operational throughout the current and prior year |
• | office properties included in the Strategic Reallocation Plan that were not sold as of September 30, 2012; |
• | office properties in the Greater Philadelphia region. In September 2012, we shortened the holding period for these properties because they no longer meet our strategic investment criteria; and |
• | property dispositions. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in thousands) | |||||||||||||||
NOI from real estate operations | $ | 76,248 | $ | 77,135 | $ | 231,974 | $ | 225,557 | |||||||
NOI from service operations | 873 | 558 | 2,510 | 2,156 | |||||||||||
NOI from discontinued operations | (4,186 | ) | (10,826 | ) | (21,626 | ) | (31,679 | ) | |||||||
Depreciation and amortization associated with real estate operations | (28,698 | ) | (31,269 | ) | (84,920 | ) | (84,205 | ) | |||||||
Impairment losses | (46,096 | ) | — | (41,260 | ) | (42,983 | ) | ||||||||
General and administrative expense | (5,061 | ) | (6,154 | ) | (19,820 | ) | (19,251 | ) | |||||||
Business development expenses and land carry costs | (1,632 | ) | (1,751 | ) | (4,506 | ) | (4,322 | ) | |||||||
Operating (loss) income | $ | (8,552 | ) | $ | 27,693 | $ | 62,352 | $ | 45,273 |
Comparison of the Three Months Ended September 30, 2012 to the Three Months Ended September 30, 2011 | |||||||||||
For the Three Months Ended September 30, | |||||||||||
2012 | 2011 | Variance | |||||||||
(in thousands) | |||||||||||
Revenues | |||||||||||
Revenues from real estate operations | $ | 114,861 | $ | 107,978 | $ | 6,883 | |||||
Construction contract and other service revenues | 15,283 | 18,729 | (3,446 | ) | |||||||
Total revenues | 130,144 | 126,707 | 3,437 | ||||||||
Expenses | |||||||||||
Property operating expenses | 42,799 | 41,669 | 1,130 | ||||||||
Depreciation and amortization associated with real estate operations | 28,698 | 31,269 | (2,571 | ) | |||||||
Construction contract and other service expenses | 14,410 | 18,171 | (3,761 | ) | |||||||
Impairment losses | 46,096 | — | 46,096 | ||||||||
General and administrative expense | 5,061 | 6,154 | (1,093 | ) | |||||||
Business development expenses and land carry costs | 1,632 | 1,751 | (119 | ) | |||||||
Total operating expenses | 138,696 | 99,014 | 39,682 | ||||||||
Operating (loss) income | (8,552 | ) | 27,693 | (36,245 | ) | ||||||
Interest expense | (23,239 | ) | (24,176 | ) | 937 | ||||||
Interest and other income (loss) | 1,095 | (242 | ) | 1,337 | |||||||
Loss on early extinguishment of debt | (768 | ) | (1,611 | ) | 843 | ||||||
Equity in loss of unconsolidated entities | (246 | ) | (159 | ) | (87 | ) | |||||
Income tax (expense) benefit | (106 | ) | 457 | (563 | ) | ||||||
(Loss) income from continuing operations | (31,816 | ) | 1,962 | (33,778 | ) | ||||||
Discontinued operations | 11,051 | 5,508 | 5,543 | ||||||||
Net (loss) income | (20,765 | ) | 7,470 | (28,235 | ) | ||||||
Net loss (income) attributable to noncontrolling interests | 993 | (904 | ) | 1,897 | |||||||
Preferred share dividends | (6,546 | ) | (4,025 | ) | (2,521 | ) | |||||
Issuance costs associated with redeemed preferred shares | (1,827 | ) | — | (1,827 | ) | ||||||
Net (loss) income attributable to COPT common shareholders | $ | (28,145 | ) | $ | 2,541 | $ | (30,686 | ) |
NOI from Real Estate Operations | |||||||||||
For the Three Months Ended September 30, | |||||||||||
2012 | 2011 | Variance | |||||||||
(Dollars in thousands, except per square foot data) | |||||||||||
Revenues | |||||||||||
Same Office Properties | $ | 102,088 | $ | 99,798 | $ | 2,290 | |||||
Constructed office properties placed in service | 3,925 | 2,338 | 1,587 | ||||||||
Acquired office properties | 2,233 | 502 | 1,731 | ||||||||
Strategic Reallocation Plan Properties Held | 7,028 | 6,741 | 287 | ||||||||
Greater Philadelphia properties | 2,541 | 1,701 | 840 | ||||||||
Dispositions | 1,588 | 12,765 | (11,177 | ) | |||||||
Other | 1,861 | 1,284 | 577 | ||||||||
121,264 | 125,129 | (3,865 | ) | ||||||||
Property operating expenses | |||||||||||
Same Office Properties | 37,929 | 37,195 | 734 | ||||||||
Constructed office properties placed in service | 1,008 | 533 | 475 | ||||||||
Acquired office properties | 341 | 56 | 285 | ||||||||
Strategic Reallocation Plan Properties Held | 2,537 | 2,640 | (103 | ) | |||||||
Greater Philadelphia properties | 736 | 417 | 319 | ||||||||
Dispositions | 909 | 5,961 | (5,052 | ) | |||||||
Other | 1,556 | 1,192 | 364 | ||||||||
45,016 | 47,994 | (2,978 | ) | ||||||||
NOI from real estate operations | |||||||||||
Same Office Properties | 64,159 | 62,603 | 1,556 | ||||||||
Constructed office properties placed in service | 2,917 | 1,805 | 1,112 | ||||||||
Acquired office properties | 1,892 | 446 | 1,446 | ||||||||
Strategic Reallocation Plan Properties Held | 4,491 | 4,101 | 390 | ||||||||
Greater Philadelphia properties | 1,805 | 1,284 | 521 | ||||||||
Dispositions | 679 | 6,804 | (6,125 | ) | |||||||
Other | 305 | 92 | 213 | ||||||||
$ | 76,248 | $ | 77,135 | $ | (887 | ) | |||||
Same Office Properties rent statistics | |||||||||||
Average occupancy rate | 89.4 | % | 90.7 | % | -1.3 | % | |||||
Average straight-line rent per occupied square foot (1) | $ | 5.97 | $ | 5.89 | $ | 0.08 |
(1) | Includes minimum base rents, net of abatements, and lease incentives on a straight-line basis for the three month periods set forth above. |
• | in September 2012, our Board of Trustees approved a plan by Management to shorten the holding period for all of our office properties and developable land in Greater Philadelphia, Pennsylvania because the properties no longer meet our strategic investment criteria. We determined that the carrying amounts of these properties will not likely be recovered from the cash flows from the operations and sales of such properties over the likely remaining holding period. Accordingly, during the three months ended September 30, 2012, we recognized aggregate non-cash impairment losses of $46.1 million for the amounts by which the carrying values of the properties exceeded their respective estimated fair values; and |
• | in connection primarily with the Strategic Reallocation Plan, we recognized aggregate impairment losses of $9.7 million in the current period, including $6.9 million pertaining to properties in Colorado Springs classified as held for sale and included in discontinued operations. |
For the Nine Months Ended September 30, | |||||||||||
2012 | 2011 | Variance | |||||||||
(in thousands) | |||||||||||
Revenues | |||||||||||
Revenues from real estate operations | $ | 336,687 | $ | 317,013 | $ | 19,674 | |||||
Construction contract and other service revenues | 53,812 | 67,854 | (14,042 | ) | |||||||
Total revenues | 390,499 | 384,867 | 5,632 | ||||||||
Expenses | |||||||||||
Property operating expenses | 126,339 | 123,135 | 3,204 | ||||||||
Depreciation and amortization associated with real estate operations | 84,920 | 84,205 | 715 | ||||||||
Construction contract and other service expenses | 51,302 | 65,698 | (14,396 | ) | |||||||
Impairment losses | 41,260 | 42,983 | (1,723 | ) | |||||||
General and administrative expense | 19,820 | 19,251 | 569 | ||||||||
Business development expenses and land carry costs | 4,506 | 4,322 | 184 | ||||||||
Total operating expenses | 328,147 | 339,594 | (11,447 | ) | |||||||
Operating income | 62,352 | 45,273 | 17,079 | ||||||||
Interest expense | (71,909 | ) | (74,861 | ) | 2,952 | ||||||
Interest and other income | 3,152 | 3,682 | (530 | ) | |||||||
Loss on early extinguishment of debt | (937 | ) | (1,636 | ) | 699 | ||||||
Equity in loss of unconsolidated entities | (522 | ) | (223 | ) | (299 | ) | |||||
Income tax (expense) benefit | (4,296 | ) | 6,043 | (10,339 | ) | ||||||
Loss from continuing operations | (12,160 | ) | (21,722 | ) | 9,562 | ||||||
Discontinued operations | 10,212 | (18,109 | ) | 28,321 | |||||||
Gain on sales of real estate, net of income taxes | 21 | 2,728 | (2,707 | ) | |||||||
Net loss | (1,927 | ) | (37,103 | ) | 35,176 | ||||||
Net (income) loss attributable to noncontrolling interests | (414 | ) | 1,655 | (2,069 | ) | ||||||
Preferred share dividends | (14,738 | ) | (12,076 | ) | (2,662 | ) | |||||
Issuance costs associated with redeemed preferred shares | (1,827 | ) | — | (1,827 | ) | ||||||
Net loss attributable to COPT common shareholders | $ | (18,906 | ) | $ | (47,524 | ) | $ | 28,618 |
For the Nine Months Ended September 30, | |||||||||||
2012 | 2011 | Variance | |||||||||
(Dollars in thousands, except per square foot data) | |||||||||||
Revenues | |||||||||||
Same Office Properties | $ | 302,602 | $ | 294,687 | $ | 7,915 | |||||
Constructed office properties placed in service | 10,869 | 5,680 | 5,189 | ||||||||
Acquired office properties | 4,207 | 502 | 3,705 | ||||||||
Strategic Reallocation Plan Properties Held | 21,004 | 20,008 | 996 | ||||||||
Greater Philadelphia properties | 7,171 | 5,315 | 1,856 | ||||||||
Dispositions | 19,877 | 38,408 | (18,531 | ) | |||||||
Other | 4,806 | 3,776 | 1,030 | ||||||||
370,536 | 368,376 | 2,160 | |||||||||
Property operating expenses | |||||||||||
Same Office Properties | 112,429 | 110,911 | 1,518 | ||||||||
Constructed office properties placed in service | 2,838 | 1,205 | 1,633 | ||||||||
Acquired office properties | 656 | 56 | 600 | ||||||||
Strategic Reallocation Plan Properties Held | 7,374 | 7,439 | (65 | ) | |||||||
Greater Philadelphia properties | 2,083 | 1,180 | 903 | ||||||||
Dispositions | 9,248 | 19,344 | (10,096 | ) | |||||||
Other | 3,934 | 2,684 | 1,250 | ||||||||
138,562 | 142,819 | (4,257 | ) | ||||||||
NOI from real estate operations | |||||||||||
Same Office Properties | 190,173 | 183,776 | 6,397 | ||||||||
Constructed office properties placed in service | 8,031 | 4,475 | 3,556 | ||||||||
Acquired office properties | 3,551 | 446 | 3,105 | ||||||||
Strategic Reallocation Plan Properties Held | 13,630 | 12,569 | 1,061 | ||||||||
Greater Philadelphia properties | 5,088 | 4,135 | 953 | ||||||||
Dispositions | 10,629 | 19,064 | (8,435 | ) | |||||||
Other | 872 | 1,092 | (220 | ) | |||||||
$ | 231,974 | $ | 225,557 | $ | 6,417 | ||||||
Same Office Properties rent statistics | |||||||||||
Average occupancy rate | 89.5 | % | 90.3 | % | (0.8 | )% | |||||
Average straight-line rent per occupied square foot (1) | $ | 17.83 | $ | 17.62 | $ | 0.21 |
(1) | Includes minimum base rents, net of abatements, and lease incentives on a straight-line basis for the nine month periods set forth above. |
• | as described above for the three month periods, we recognized $46.1 million impairment loss related to properties in Greater Philadelphia; |
• | we recognized aggregate net impairment losses in connection with Strategic Reallocation Plan properties of $18.7 million in the current period ($23.5 million classified as discontinued operations and including $4.2 million in exit costs) and $44.6 million in the prior period ($29.4 million classified as discontinued operations); and |
• | as described further in our 2011 Annual Report on Form 10-K, we recognized an impairment loss of $27.7 million on Fort Ritchie in the prior period. |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
(in thousands) | |||||||
Operating properties | $ | 70,016 | $ | 31,031 | |||
Non-operating properties | (5,246 | ) | 41,316 | ||||
Total | $ | 64,770 | $ | 72,347 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(Dollars and shares in thousands, except per share data) | |||||||||||||||
Net (loss) income | $ | (20,765 | ) | $ | 7,470 | $ | (1,927 | ) | $ | (37,103 | ) | ||||
Add: Real estate-related depreciation and amortization | 30,624 | 36,032 | 93,377 | 101,101 | |||||||||||
Add: Depreciation and amortization on unconsolidated real estate entities | 113 | 116 | 346 | 350 | |||||||||||
Add: Impairment losses on previously depreciated operating properties | 55,829 | — | 70,016 | 31,031 | |||||||||||
Less: Gain on sales of previously depreciated operating properties, net of income taxes | (16,913 | ) | (1,299 | ) | (20,936 | ) | (1,449 | ) | |||||||
FFO | 48,888 | 42,319 | 140,876 | 93,930 | |||||||||||
Less: Noncontrolling interests-preferred units in the Operating Partnership | (165 | ) | (165 | ) | (495 | ) | (495 | ) | |||||||
Less: Noncontrolling interests-other consolidated entities | (411 | ) | (561 | ) | (939 | ) | (1,038 | ) | |||||||
Less: Preferred share dividends | (6,546 | ) | (4,025 | ) | (14,738 | ) | (12,076 | ) | |||||||
Less: Issuance costs associated with redeemed preferred shares | (1,827 | ) | — | (1,827 | ) | — | |||||||||
Less: 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 | $ | 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 (losses) 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, as adjusted for comparability | $ | 40,644 | $ | 39,101 | $ | 122,457 | $ | 115,146 | |||||||
Weighted average common shares | 71,688 | 71,312 | 71,590 | 68,718 | |||||||||||
Conversion of weighted average common units | 4,233 | 4,336 | 4,256 | 4,371 | |||||||||||
Weighted average common shares/units - Basic FFO | 75,921 | 75,648 | 75,846 | 73,089 | |||||||||||
Dilutive effect of share-based compensation awards | 73 | 52 | 48 | 147 | |||||||||||
Weighted average common shares/units - Diluted FFO | 75,994 | 75,700 | 75,894 | 73,236 | |||||||||||
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 | |||||||
Numerator for diluted EPS | $ | (28,256 | ) | $ | 2,279 | $ | (19,263 | ) | $ | (51,493 | ) | ||||
Add: Income allocable to noncontrolling interests-common units in the Operating Partnership | (1,569 | ) | 178 | (1,020 | ) | — | |||||||||
Add: Real estate-related depreciation and amortization | 30,624 | 36,032 | 93,377 | 101,101 | |||||||||||
Add: Depreciation and amortization of unconsolidated real estate entities | 113 | 116 | 346 | 350 | |||||||||||
Add: Impairment losses on previously depreciated operating properties | 55,829 | — | 70,016 | 31,031 | |||||||||||
Add: Numerator for diluted EPS allocable to restricted shares | 111 | 262 | 357 | 781 | |||||||||||
Less: Depreciation and amortization allocable to noncontrolling interests in other consolidated entities | (160 | ) | (276 | ) | (312 | ) | (566 | ) | |||||||
Less: Basic and diluted FFO allocable to restricted shares | (214 | ) | (263 | ) | (728 | ) | (782 | ) | |||||||
Less: Gain on sales of previously depreciated operating properties, net of income taxes | (16,913 | ) | (1,299 | ) | (20,936 | ) | (1,449 | ) | |||||||
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 | ) | ||||||||||
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, as adjusted for comparability | $ | 40,644 | $ | 39,101 | $ | 122,457 | $ | 115,146 | |||||||
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 measures | 75,994 | 75,700 | 75,894 | 73,236 |
Construction, development and redevelopment | $ | 108,313 | |||
Acquisition of operating properties | 33,684 | (1) | |||
Tenant improvements on operating properties | 11,568 | (2) | |||
Capital improvements on operating properties | 8,285 | ||||
$ | 161,850 |
• | net repayments of debt of $243.6 million; |
• | proceeds from the issuance of the Series L Preferred Shares of $165.7 million; |
• | payments to redeem the Series G Preferred Shares of $55.0 million; and |
• | dividends and distributions of $86.2 million. |
• | net borrowings of $105.9 million; |
• | proceeds from the issuance of common shares of $147.8 million; and |
• | dividends and distributions of $103.0 million. |
For the Periods Ending December 31, | |||||||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | Thereafter | Total | |||||||||||||||||||||
Contractual obligations (1) | |||||||||||||||||||||||||||
Debt (2) | |||||||||||||||||||||||||||
Balloon payments due upon maturity | $ | — | $ | 179,368 | $ | 231,681 | $ | 790,194 | $ | 274,605 | $ | 670,621 | $ | 2,146,469 | |||||||||||||
Scheduled principal payments | 2,890 | 9,874 | 6,660 | 5,548 | 4,037 | 3,257 | 32,266 | ||||||||||||||||||||
Interest on debt (3) | 22,853 | 86,261 | 75,422 | 57,989 | 33,834 | 12,229 | 288,588 | ||||||||||||||||||||
New construction and redevelopment obligations (4)(5) | 19,863 | 52,228 | — | — | — | — | 72,091 | ||||||||||||||||||||
Third-party construction and development obligations (5)(6) | 26,468 | 2,941 | — | — | — | — | 29,409 | ||||||||||||||||||||
Capital expenditures for operating properties (5)(7) | 9,892 | 19,715 | — | — | — | — | 29,607 | ||||||||||||||||||||
Operating leases (8) | 272 | 1,065 | 996 | 873 | 814 | 70,479 | 74,499 | ||||||||||||||||||||
Other purchase obligations (9) | 902 | 3,161 | 2,032 | 1,088 | 565 | 98 | 7,846 | ||||||||||||||||||||
Total contractual cash obligations | $ | 83,140 | $ | 354,613 | $ | 316,791 | $ | 855,692 | $ | 313,855 | $ | 756,684 | $ | 2,680,775 |
(1) | The contractual obligations set forth in this table generally exclude property operations contracts that had a value of less than $20,000. Also excluded are contracts associated with the operations of our properties that may be terminated with notice of one month or less, which is the arrangement that applies to most of our property operations contracts. |
(2) | Represents scheduled principal amortization payments and maturities only and therefore excludes a net discount of $9.4 million. |
(3) | Represents interest costs for debt at September 30, 2012 for the terms of such debt. For variable rate debt, the amounts reflected above used September 30, 2012 interest rates on variable rate debt in computing interest costs for the terms of such debt. |
(4) | Represents contractual obligations pertaining to new construction and redevelopment activities. Construction and redevelopment activities underway at September 30, 2012 included the following: |
Activity | Number of Properties | Square Feet (in thousands) | Estimated Remaining Costs(in millions) | Expected Year For Costs to be Incurred Through | ||||||
Construction of new office properties | 8 | 913 | $ | 77.0 | 2014 | |||||
Redevelopment of existing office properties | 2 | 297 | 25.2 | 2014 |
(5) | Due to the long-term nature of certain construction and development contracts and leases included in these lines, the amounts reported in the table represent our estimate of the timing for the related obligations being payable. |
(6) | Represents contractual obligations pertaining to projects for which we are acting as construction manager on behalf of unrelated parties who are our clients. We expect to be reimbursed in full for these costs by our clients. |
(7) | Represents contractual obligations pertaining to recurring and nonrecurring capital expenditures for our operating properties. We expect to finance these costs primarily using cash flow from operations. |
(8) | We expect to pay these items using cash flow from operations. |
(9) | Primarily represents contractual obligations pertaining to managed-energy service contracts in place for certain of our operating properties. We expect to pay these items using cash flow from operations. |
For the Periods Ending December 31, | |||||||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | Thereafter | Total | |||||||||||||||||||||
Long term debt: (1) | |||||||||||||||||||||||||||
Fixed rate debt (2) | $ | 2,695 | $ | 129,102 | $ | 157,526 | $ | 347,847 | $ | 278,642 | $ | 303,878 | $ | 1,219,690 | |||||||||||||
Weighted average interest rate | 6.26 | % | 5.62 | % | 6.41 | % | 4.67 | % | 6.57 | % | 5.52 | % | 5.64 | % | |||||||||||||
Variable rate debt | $ | 195 | $ | 60,140 | $ | 80,815 | $ | 447,895 | $ | — | $ | 370,000 | $ | 959,045 |
(1) | Maturities include $59.4 million in 2013, $80.0 million in 2014 and $411.8 million in 2015 that may each be extended for one year, subject to certain conditions. |
(2) | Represents principal maturities only and therefore excludes net discounts of $9.4 million. |
Notional | Fixed | Floating Rate | Effective | Expiration | Fair Value at | ||||||||||||||
Amount | Rate | Index | Date | Date | September 30, 2012 | December 31, 2011 | |||||||||||||
$ | 100,000 | 0.6123 | % | One-Month LIBOR | 1/3/2012 | 9/1/2014 | $ | (671 | ) | $ | 55 | ||||||||
100,000 | 0.6100 | % | One-Month LIBOR | 1/3/2012 | 9/1/2014 | (667 | ) | 56 | |||||||||||
100,000 | 0.8320 | % | One-Month LIBOR | 1/3/2012 | 9/1/2015 | (1,447 | ) | (66 | ) | ||||||||||
100,000 | 0.8320 | % | One-Month LIBOR | 1/3/2012 | 9/1/2015 | (1,447 | ) | (49 | ) | ||||||||||
38,671 | (1) | 3.8300 | % | One-Month LIBOR | 11/2/2010 | 11/2/2015 | (1,393 | ) | (1,054 | ) | |||||||||
100,000 | 0.8055 | % | One-Month LIBOR | 9/2/2014 | 9/1/2016 | (262 | ) | — | |||||||||||
100,000 | 0.8100 | % | One-Month LIBOR | 9/2/2014 | 9/1/2016 | (272 | ) | — | |||||||||||
100,000 | 1.6730 | % | One-Month LIBOR | 9/1/2015 | 8/1/2019 | (123 | ) | — | |||||||||||
100,000 | 1.7300 | % | One-Month LIBOR | 9/1/2015 | 8/1/2019 | (261 | ) | — | |||||||||||
50,000 | 0.5025 | % | One-Month LIBOR | 1/3/2011 | 1/3/2012 | — | (1 | ) | |||||||||||
50,000 | 0.5025 | % | One-Month LIBOR | 1/3/2011 | 1/3/2012 | — | (1 | ) | |||||||||||
120,000 | 1.7600 | % | One-Month LIBOR | 1/2/2009 | 5/1/2012 | — | (552 | ) | |||||||||||
100,000 | 1.9750 | % | One-Month LIBOR | 1/1/2010 | 5/1/2012 | — | (532 | ) | |||||||||||
100,000 | (2) | 3.8415 | % | Three-Month LIBOR | 9/30/2011 | 9/30/2021 | — | (16,333 | ) | ||||||||||
75,000 | (2) | 3.8450 | % | Three-Month LIBOR | 9/30/2011 | 9/30/2021 | — | (12,275 | ) | ||||||||||
100,000 | (2) | 2.0525 | % | Three-Month LIBOR-Reverse | 12/30/2011 | 9/30/2021 | — | 345 | |||||||||||
75,000 | (2) | 2.0525 | % | Three-Month LIBOR-Reverse | 12/30/2011 | 9/30/2021 | — | 260 | |||||||||||
$ | (6,543 | ) | $ | (30,147 | ) |
(1) | The notional amount of this instrument is scheduled to amortize to $36.2 million. |
(2) | As described further in our 2011 Annual Report on Form 10-K, on January 5, 2012, we cash settled these instruments, along with interest accrued thereon, for an aggregate of $29.7 million. |
(a) | During the three months ended September 30, 2012, 40,000 of the Operating Partnership’s common units were exchanged for 40,000 common shares in accordance with the Operating Partnership’s Second Amended and Restated Limited Partnership Agreement, as amended. The issuance of these common shares was effected in reliance upon the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. |
EXHIBIT NO. | DESCRIPTION | |
31.1 | Certification of the Chief Executive Officer of Corporate Office Properties Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith). | |
31.2 | Certification of the Chief Financial Officer of Corporate Office Properties Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith). | |
32.1 | Certification of the Chief Executive Officer of Corporate Office Properties Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.) (Furnished herewith). | |
32.2 | Certification of the Chief Financial Officer of Corporate Office Properties Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended). (Furnished herewith). | |
101.INS | XBRL Instance Document (furnished herewith). | |
101.SCH | XBRL Taxonomy Extension Schema Document (furnished herewith). | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (furnished herewith). | |
101.LAB | XBRL Extension Labels Linkbase (furnished herewith). | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (furnished herewith). | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith). |
CORPORATE OFFICE PROPERTIES TRUST | |||
Date: | October 26, 2012 | By: | /s/ Roger A. Waesche, Jr. |
Roger A. Waesche, Jr. | |||
President and Chief Executive Officer | |||
Date: | October 26, 2012 | By: | /s/ Stephen E. Riffee |
Stephen E. Riffee | |||
Executive Vice President and Chief Financial Officer |
Date: | October 26, 2012 | /s/ Roger A. Waesche, Jr. | |
Roger A. Waesche, Jr. | |||
President and Chief Executive Officer |
Date: | October 26, 2012 | /s/ Stephen E. Riffee | |
Stephen E. Riffee | |||
Chief Financial Officer |
/s/ Roger A. Waesche, Jr. | |
Roger A. Waesche, Jr. | |
President and Chief Executive Officer | |
Date: | October 26, 2012 |
/s/ Stephen E. Riffee | |
Stephen E. Riffee | |
Chief Financial Officer | |
Date: | October 26, 2012 |
Earnings Per Share ("EPS") (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of calculation of numerator and denominator in basic and diluted earning per share | Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):
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Schedule of securities excluded from computation of diluted earnings per share | Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands):
|
Properties, net (Details 2) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Properties | ||
Projects in development or held for future development | $ 614,595 | $ 638,919 |
Projects in development or held for future development | Land in development or held for future development
|
||
Properties | ||
Projects in development or held for future development | 220,234 | 229,833 |
Projects in development or held for future development | Construction in progress, excluding land
|
||
Properties | ||
Projects in development or held for future development | $ 394,361 | $ 409,086 |
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