Corporate Office Properties Trust Announces First Quarter 2002 Results With 6.5% Growth in FFO Per Share.Business Editors COLUMBIA Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. , Md.--(BUSINESS WIRE)--April 24, 2002 Corporate Office Properties Trust Corporate Office Properties Trust Inc. (COPT) (NYSE: OFC) is a publicly-traded real estate investment trust (REIT) corporation that specializes in office development, and describes itself as "a fully integrated, self-managed real estate investment trust that focuses on the (NYSE NYSE See: New York Stock Exchange :OFC OFC Office OFC Officer OFC Of Course OFC Oxygen Free Copper OFC Oceania Football Confederation (soccer) OFC Optical Fiber Cable OFC Optical Fiber Communications OFC Optical Fiber Conference ) announced today financial and operating results for the quarter ended March 31, 2002. Highlights
-- 12.6% increase in first quarter total diluted Funds From Operations ("FFO")
to $11.4 million from $10.1 million for first quarter 2001.
-- 6.5% increase in first quarter FFO per diluted share to $0.33 from $0.31 for
first quarter 2001.
-- 15.0% increase in first quarter total diluted Adjusted Funds From Operations
("AFFO") to $9.5 million from $8.3 million for first quarter 2001.
-- 8.0% increase in first quarter AFFO per diluted share to $0.27 from $0.25
for first quarter 2001.
-- 4.1% increase in same property cash net operating income in first quarter
2002, as compared to first quarter 2001.
-- 94% occupied, 95% leased as of March 31st, 2002.
-- 142,936 square feet of development leasing executed year to date.
-- $132.0 million common share offering completed, comprised of $106.9 million
of secondary shares sold by Constellation Real Estate, Inc. ("Constellation"),
representing its entire ownership stake in the Company, and $25.1 million in
primary shares issued by the Company.
-- Revolving credit facility expanded from $125 million to $150 million with an
added option to extend the maturity date for an additional year to March 2005.
-- $16.3 million acquisition completed in April 2002, comprised of five
buildings located in the Baltimore/Washington ("B/W") Corridor totaling 166,625
square feet, 98.3% leased.
"We continue to consistently generate solid FFO FFO See: Funds from operations per share growth, despite the ongoing challenges in the economy," stated Clay W. Hamlin Hamlin may refer to: In places:
Financial Results Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. FFO for the quarter ended March 31, 2002 totaled $11.4 million, or $0.33 per diluted share, as compared to $10.1 million, or $0.31 per diluted share, for the first quarter ended March 31, 2001, representing a 6.5% increase on a per share basis. Diluted AFFO AFFO Adjusted Funds From Operation for the first quarter ended March 31, 2002 totaled $9.5 million, or $0.27 per diluted share, as compared to $8.3 million, or $0.25 per diluted share, for the first quarter ended March 31, 2001, representing an 8.0% increase on a per share basis. Revenues from real estate operations for the quarter ended March 31, 2002 were $34.2 million, as compared to revenue for the quarter ended March 31, 2001 of $29.4 million. The Company's diluted FFO payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. for the first quarter 2002 was 65%. On an AFFO basis, the Company's payout ratio was 78% for the quarter. As of March 31, 2002, the Company had a total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. of $1.1 billion, with $573.8 million in debt outstanding, equating e·quate v. e·quat·ed, e·quat·ing, e·quates v.tr. 1. To make equal or equivalent. 2. To reduce to a standard or an average; equalize. 3. to a 50.7% debt-to-total market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. ratio. The Company's total quarterly weighted average interest rate was 6.52% and its annual EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become interest coverage ratio was 2.65x. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of on income before extraordinary item and cumulative effect of accounting change ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") for the quarter ended March 31, 2002, was $0.13 per share, compared to $0.15 per share for the quarter ended March 31, 2001. The Company's increased share count contributed to the decrease in EPS. Operating Results At March 31, 2002, the Company's portfolio included 99 office properties totaling 7.8 million square feet located in five Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic submarkets: Baltimore/Washington Corridor The Baltimore/Washington corridor is between Washington, D.C. and Baltimore, MD, consisting principally of Anne Arundel, Howard, Montgomery and Prince George's counties. ; Dulles Dul·les , Allen Welsh 1893-1969. American public official. Director of the CIA (1953-1961), he resigned after the failed invasion of the Bay of Pigs. Noun 1. South, Northern Virginia Northern Virginia (NoVA) consists of Arlington, Fairfax, Loudoun, and Prince William counties and the independent cities of Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park. ; Blue Bell, Pennsylvania Blue Bell is a census-designated place (CDP) in Whitpain Township in Montgomery County, Pennsylvania, in the United States. As of the 2000 census, its population was 6,395. ; Harrisburg, Pennsylvania This article is about the capital city of the Commonwealth of Pennsylvania. For other places named Harrisburg, see Harrisburg (disambiguation). Harrisburg is the capital of the Commonwealth of Pennsylvania, a state of the United States of America. ; and Princeton, New Jersey
Princeton, New Jersey is located in Mercer County, New Jersey, United States. Princeton University has been sited in the town since 1756. - Exit 8A. At March 31, 2002, the portfolio was 94% occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. and 95% leased. During the quarter, 56.7% of expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. leases were renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. , representing 60,796 square feet. The Company achieved a 3.21% increase in straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. base rents on the renewed and retenanted space with an average capital expenditure of $3.08 per square foot, including tenant improvements and leasing commissions. "Since the beginning of the year we have seen a significant increase in leasing activity in our core markets," commented Randall Randall may refer to the following: In places:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "This demand is predominately being driven by large credit tenants across numerous industries, including defense, security, banking, insurance, technology and engineering. We are being very proactive in working our existing portfolio to take advantage of these opportunities, thus strengthening our tenant base and enhancing the long-term stability The long-term stability of an oscillator, the degree of uniformity of frequency over time, when the frequency is measured under identical environmental conditions, such as supply voltage, load, and temperature. of our revenue stream. In addition, we are also making good progress on leasing up our newly developed properties. Thus far this year we have already executed new leases totaling 143,000 square feet with a number of high quality tenants and remain on track to bring these properties up to stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders by year end." Acquisition/Disposition Activity On February February: see month. 25, 2002, the Company acquired for $5.4 million the remaining 50% joint venture interest in 2701 Technology Drive, a 117,450 square foot Class A building located in the National Business Park. As of March 31, 2002, the property was 100% leased. In addition, the Company acquired the remaining 20% joint venture interest in Montpelier Montpelier, estate, United States Montpelier, estate, central Va., near Charlottesville; formerly the home of President James Madison. The brick mansion was built c.1760 by Madison's father. Madison and his wife are buried nearby. Research Park and simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics sold this 43,785 square foot property, realizing a gain of $352,000. The Company also sold 1362 Mellon Road, a development property, for a gain of $597,000. Development Activity For the quarter, the Company executed three leases aggregating 71,693 square feet at its newly developed 1304 Concourse and 6724 Alexander Bell Drive properties. Financing and Capital Transactions On February 28, 2002, the Company executed a $132.0 million, publicly underwritten common share offering comprised of $106.9 million secondary shares sold by Constellation Constellation, ship Constellation (kŏnstĭlā`shən), U.S. frigate, launched in 1797. It was named by President Washington for the constellation of 15 stars in the U.S. flag of that time. (totaling 8,876,172 common shares, representing Constellation's entire ownership position in the Company) and $25.1 million in primary shares issued by the Company (totaling 2,084,828 common shares). The Company expanded its existing revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility from $125 to $150 million and added an option to extend the maturity date for an additional one year period to March 31, 2005, subject to certain customary conditions. Subsequent Events In April, the Company acquired a five building portfolio totaling 166,625 square feet located in the B/W B/W Black and White B/W Between B/W be with B/W Bundled With B/W Backed With (recording industry) B/W backwash B/W B-Wing (Star Wars) B/W Back of Walk Corridor for $16.3 million. As of March 31st, the properties were 98.3% leased. The Company also executed two leases totaling 71,243 square feet at its newly developed 6731 Columbia Gateway Drive property. Conference Call The Company will hold an investor/analyst conference call on April 25, 2002, beginning at 4:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The conference call may be joined by dialing (719) 457-2692. The confirmation code for the call is 611371. A replay of the conference call will begin at 7:00 p.m., EDT and will be available through Thursday Thursday: see week. , May 2, midnight EDT. The telephone number for the replay is (719) 457-0820. You will then need to enter the confirmation code. Company Information Corporate Office Properties Trust is a fully-integrated, self-managed real estate investment trust which focuses on the ownership, management, leasing, acquisition and development of suburban office properties located in select Mid-Atlantic submarkets. The Company currently owns 104 office properties totaling 7.9 million rentable square feet. Corporate Development Services, the Company's development company, provides a wide range of development and construction management services. In addition, Corporate Office Services provides land planning, design/build services, consulting and merchant development to third party entities. The Company's shares are traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol OFC. More information on Corporate Office Properties Trust can be found on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.copt.com. Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information This press release contains forward-looking information based upon the Company's current best judgment and expectations. Actual results could vary from those presented herein. The risks and uncertainties associated with the forward-looking information include the strength of the commercial office real estate market in which the Company operates, competitive market conditions, general economic growth, interest rates and capital market conditions. For further information, please refer to the Company's filings with the Securities and Exchange Commission. Financial Tables Attached
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
(all amounts in thousands except per share data)
Three Months Ended
--------------------
March 31, March 31,
2002 2001
-------- --------
Real Estate Operations
Revenues
Rental revenue $ 30,240 $ 25,345
Tenant recoveries and other
revenue 3,993 4,049
-------- --------
Total revenues from real
estate operations 34,233 29,394
-------- --------
Expenses
Property operating 10,100 8,376
Interest 8,567 8,112
Depreciation and amortization 7,127 5,224
-------- --------
Total expenses from real
estate operations 25,794 21,712
-------- --------
Earnings from real estate
operations before equity in
income of unconsolidated real
estate joint ventures 8,439 7,682
Equity in income of
unconsolidated real estate
joint ventures (12) 30
-------- --------
Earnings from real estate
operations 8,427 7,712
Losses from service
operations (90) (329)
General and administrative (2,170) (1,446)
-------- --------
Income before minority
interests, income taxes,
discontinued operations,
extraordinary item and
cumulative effect of
accounting change 6,167 5,937
Minority interests (1,591) (2,098)
-------- --------
Income before income taxes,
discontinued operations,
extraordinary item and
cumulative effect of
accounting change 4,576 3,839
Income tax benefit, net 27 81
-------- --------
Income before discontinued
operations, extraordinary
item and cumulative
effect of accounting change 4,603 3,920
Discontinued operations, net 720 50
-------- --------
Income before extraordinary
item and cumulative effect
of accounting change 5,323 3,970
Extraordinary item - loss on
early retirement of debt, net (28) (70)
-------- --------
Income before cumulative
effect of accounting change 5,295 3,900
Cumulative effect of
accounting change, net -- (174)
-------- --------
Net income 5,295 3,726
Preferred Share dividends (2,533) (881)
-------- --------
Net income available to Common
Shareholders $ 2,762 $ 2,845
======== ========
Earnings per Common Share on
income before extraordinary
item and cumulative
effect of accounting change
Basic $ 0.13 $ 0.15
======== ========
Diluted (1) $ 0.13 $ 0.15
======== ========
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
(all amounts in thousands except per share data and ratios)
Three Months Ended
-----------------------
March 31, March 31,
2002 2001
--------- ---------
Income before minority interests,
income taxes, discontinued
operations, extraordinary
item and cumulative effect of
accounting change $ 6,167 $ 5,937
Add: Real estate related
depreciation and amortization 6,602 4,805
Add: Discontinued operations, gross 1,071 76
Less: Preferred Share dividends (2,533) (881)
Less: Preferred Unit distributions (572) (572)
Less: Gain on sale of rental
properties included in
discontinued operations,
excluding redevelopment
portion(2) (93) --
Minority interests in other
consolidated entities (31) 4
Income tax benefit, gross 40 122
--------- ---------
Funds from Operations - basic
("Basic FFO") 10,651 9,491
Add: Preferred Unit distributions 572 572
Add: Convertible Preferred
Share dividends 136 100
Income on share options assumed
converted -- (61)
Expense associated with dilutive
options 14 --
--------- ---------
Funds from Operations - diluted
("Diluted FFO") 11,373 10,102
Less: Straight line rent adjustments (214) (690)
Less: Recurring capital improvements (1,618) (1,116)
--------- ---------
Adjusted Funds from Operations -
diluted ("Diluted AFFO") $ 9,541 $ 8,296
========= =========
Basic weighted average shares
Weighted average Common Shares 20,889 19,982
Weighted average Common Units 9,607 9,388
--------- ---------
Basic weighted average Common
Shares/Units 30,496 29,370
Assumed conversion of share
options 828 273
Conversion of weighted average
Conv. Preferred Shares 1,197 878
Conversion of Preferred Units 2,421 2,421
--------- ---------
Diluted weighted average Common
Shares (3) 34,942 32,942
========= =========
Diluted FFO per Common Share $ 0.33 $ 0.31
========= =========
Diluted AFFO per Common Share $ 0.27 $ 0.25
========= =========
Dividends/distributions per
Common Share/Unit $ 0.21 $ 0.20
========= =========
Diluted FFO payout ratio 65% 65%
========= =========
Diluted AFFO payout ratio 78% 79%
========= =========
----------------------------------------------------------------------
(1) The effect of the conversions of Preferred Units and Common
Units is antidilutive in calculating diluted earnings per
share for the three months ended March 31, 2002 and 2001.
(2) A portion of the gain from the sale of rental properties that
is attributable to development services performed on the
properties is included in FFO.
(3) The Company reports a diluted FFO, which assumes the exercise
of any outstanding in-the-money options and the conversion of
the Company's Operating Partnership's Preferred Units and
Common Unit Warrants, and the Company's convertible Preferred
Shares.
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
March 31, December 31,
2002 2001
---------- ----------
Balance Sheet Data (in thousands)
(as of period end):
Real estate investments, net of
accumulated depreciation $ 942,461 $ 927,053
Total assets 1,003,236 984,210
Mortgages payable 573,821 573,327
Total liabilities 611,298 615,507
Minority interests 106,558 104,782
Beneficiaries' equity 285,380 263,921
Debt to Undepreciated Book Value 57.4% 58.6%
Debt to Total Market Capitalization 50.7% 53.7%
Interest Coverage for the Quarter
Ended (on EBITDA) 2.65x 2.68x
Property Data, including joint
ventures (as of period end):
Number of operating properties owned 99 98
Total net rentable square feet owned
(in thousands) 7,778 7,801
Occupancy 93.9% 96.1%
Common Share price (as of period end): $ 13.10 $ 11.87
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