Corporate Office Properties Trust Reports Strong First Quarter 2005 Results.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. -- 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, 2005. Highlights --Earnings per 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. share ("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. ") of $.14 for the first quarter 2005 compared to $.14 per diluted share for the first quarter 2004. --12.5% increase in FFO FFO See: Funds from operations per diluted share to $.45 or $21.1 million for first quarter 2005 from $.40 or $16.3 million for first quarter 2004. --$76.8 million in acquisitions for 691,000 square feet and 25.4 acres acquired so far this year. --92.4% 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 93.2% leased as of March 31, 2005. --1,161,000 square feet under construction, 286,000 square feet under development and 469,000 square feet under redevelopment. --$32.0 million construction facility closed during the quarter. --80.3% of leases 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. during the quarter 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. , with a 5.0% increase in total straight line rent. "This was a strong quarter for the Company as reflected in the FFO per diluted share growth and the excellent lease renewal statistics," stated Randall Randall may refer to the following: In places:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. two million square feet under construction, development and redevelopment that will add significantly to our 2006 and 2007 FFO." Financial Results EPS for the quarter ended March 31, 2005 totaled $.14 per diluted share, or $5.4 million of net income available to common shareholders, as compared to $.14 per diluted share, or $4.5 million for the quarter ended March 31, 2004. Revenues from real estate operations for the quarter ended March 31, 2005 were $60.6 million, as compared to revenue for the quarter ended March 31, 2004 of $49.0 million. Diluted FFO for the quarter ended March 31, 2005 totaled $21.1 million, or $.45 per diluted share, as compared to $16.3 million, or $.40 per diluted share, for the quarter ended March 31, 2004, representing a 12.5% increase on a per share basis. 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. was 54.5% for first quarter 2005 compared to 56.9% for the comparable 2004 period. Adjusted funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("AFFO AFFO Adjusted Funds From Operation ") diluted increased 20.9% to $14.8 million for first quarter 2005 as compared to $12.2 million for first quarter 2004. The Company's AFFO payout ratio was 78.1% for first quarter 2005 compared to 76.0% for first quarter 2004. As of March 31, 2005, the Company had a total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. of $2.5 billion, with $1.1 billion 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 44.1% 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. Debt to undepreciated book value of real estate assets was 59.5% at quarter end. The Company's total quarterly weighted average interest rate was 5.75% and 66.7% of total debt is subject to fixed interest rates. Subsequent to quarter end, the Company entered into a forward interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. for a notional amount The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change hands and is thus referred to as notional. of $73.4 million that increased fixed debt to 73.4%. For the first quarter 2005, 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 2.95x and EBITDA Fixed Charge coverage was 2.29x. Operating Results At March 31, 2005, the Company's portfolio of 145 office properties totaling 12.0 million square feet was 92.4% occupied and 93.2% leased. During the quarter, 361,299 square feet was renewed equating to an 80.3% renewal rate, at an average capital cost of $1.80 per square foot. The Company achieved a 5.0% increase in total straight line rent and a 1.9% decrease in total cash rent for 472,000 square feet of renewed and retenanted space. The average capital cost for renewed and retenanted space was $5.66 per square foot. Same property cash NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics decreased slightly by 1.2% for the quarter compared to the quarter ended March 31, 2004. Included in cash NOI for the same office portfolio, among other effects, is a decrease of $1.1 million in base rent and termination fees termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. associated with the former tenant, AT&T, at 431 Ridge Road The name Ridge Road can refer to multiple streets and roads. Canada
Significant leases signed during the quarter include 126,000 square feet with a large credit worthy Worthy can refer to: People
NBP Name Binding Protocol NBP National Braille Press NBP National Bank of Pakistan NBP National Biosolids Partnership NBP Nathaniel B. ). This building is under construction with an anticipated occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy in the fourth quarter of 2005. Development Activity The Company commenced construction on two buildings during the quarter. The first building is a 126,000 square foot office building known as 322 NBP. This will be the fourth building to be built in Phase II of The National Business Park (NBP). In addition, the Company started construction on 6711 Columbia Gateway Drive, a 125,000 square foot office building located in Columbia Gateway Business Park. At March 31, the Company has two buildings under development: 320 NBP, a 126,000 square foot building and 302 NBP, a 160,000 square foot building both located in Phase II of The National Business Park. In addition, the Company has a two building complex (discussed below) totaling approximately 469,000 square feet located at 8611 Military Drive, San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. , that is under redevelopment. Acquisition Activity As of March 31, the Company has acquired two buildings with 469,000 square feet for a total cost of $30.5 million that were 100.0% leased at closing in San Antonio, Texas. The buildings are located at the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of Loop 410 and Military Drive. This acquisition marks the initiation of the Company's expansion strategy, which is built around meeting the multi-location requirements of the Company's existing strategic tenants. The Company also acquired a total of 74 acres of land during the quarter for a total cost of $11.3 million. Land was acquired in three locations: 19 acres in Westfields Corporate Center for $7.1 million, 39 acres at the Dahlgren Dahlgren may refer to:
Financing and Capital Transactions In March, the Company closed on a $32.0 million construction facility to fund the construction of Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. Technology Park II in Chantilly, Virginia Chantilly is an unincorporated community located in western Fairfax County and southeastern Loudoun County of Northern Virginia. Recognized by the U.S. Census Bureau as a census designated place (CDP), the community population was 41,041 as of the 2000 census. . Subsequent Events Since March 31, 2005, the Company has: --Acquired a 222,000 square foot office building complex in Rockville, Maryland Rockville is the county seat of Montgomery County, Maryland, United States. According to the 2006 census update, the city had a total population of 59,114, making it the second largest city in Maryland. for $43.3 million which includes a contiguous 9.7 acre parcel of land approved to build approximately 215,000 square feet of office space. --Formed a joint venture with a limited partnership affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: with Somerset Somerset, cities, United States Somerset. 1 City (1990 pop. 10,733), seat of Pulaski co., S Ky., in a farm, coal, and limestone area of the Cumberland foothills; inc. 1810. Construction Company, to develop up to 1.8 million square feet of office space in 13 buildings on 63 acres of land in a planned mixed-use mixed-use adj. Containing or zoned for commercial and residential facilities or development: a 40-story mixed-use tower; a mixed-use parcel of land. community to be known as Arundel Preserve Arundel Preserve is a real estate development in Hanover, Maryland, that is being developed by Somerset Construction Co. of Bethesda, Corporate Office Properties Trust of Columbia, Bozzuto Development Co. of Greenbelt, and Toll Brothers Inc. of Horsham, Pa. along 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, Hanover, Maryland Hanover, Maryland, is a locality in northwestern Anne Arundel County, Maryland in the United States, located south of Baltimore near the Howard County line. It is located approximately at the intersection of Maryland State Highway 100 and the Baltimore-Washington Parkway. . The Company will make an initial investment of $2.2 million and will develop, lease and manage the office buildings. --Closed on a $55 million bridge loan with the proceeds used to acquire the Rockville Rockville, city (1990 pop. 44,835), seat of Montgomery co., W central Md., a NW suburb of Washington, D.C.; settled c.1760s, inc. as a city 1860. It has several scientific research and technology laboratories that focus on the aerospace, electronics, nuclear energy, property. --Entered into a $73.4 million notional no·tion·al adj. 1. Of, containing, or being a notion; mental or imaginary. 2. Speculative or theoretical. 3. forward swap Forward Swap A swap agreement created through the synthesis of two swaps differing in duration for the purpose of fulfilling the specific time-frame needs of an investor. Also referred to as a "forward start swap," "delayed start swap," and a "deferred start swap. on April 7, 2005 at a fixed rate of 5.02%. Earnings Guidance The Company's 2005 FFO guidance is $1.78 to $1.85 per diluted share and EPS guidance is $.49 to $.56 per share for 2005. The Company's 2005 FFO guidance projections include acquisitions of $200.0 million of properties ratably over the year, dispositions of $50.0 million, placement into service of 314,000 square feet currently under construction and an increase in occupancy to 95.0% by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . The Company's FFO guidance for second quarter 2005 is $.44 to $.46 per diluted share and EPS guidance for the second quarter is $.13 to $.15 per diluted share. Conference Call The Company will hold an investor/analyst conference call: Conference Call and Webcast Date: Tuesday, May 3, 2005 Time: 4:00 p.m. ET Dial In Number: (800) 478-6251 Confirmation Code for the call: 2994976 A replay of this call will be available beginning Tuesday Tuesday: see week. , May 3, 2005 at 7:00 p.m. ET through Tuesday, May 17, 2005 at midnight ET. To access the replay, please call 888-203-1112 and use confirmation code 2994976. The conference call will also be available via live webcast in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.copt.com. A replay of the conference call will be immediately available via webcast in the Investor Relations section of the Company's website. Definitions Please refer to our Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. or our website (www.copt.com) for definitions of certain terms used in this press release. Reconciliations of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and non-GAAP measurements are included in the attached tables. Company Information Corporate Office Properties Trust (COPT) is a fully integrated, self-managed real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) that focuses on the ownership, management, leasing, acquisition and development of suburban office properties primarily in select 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. The Company is among the largest owners of suburban office properties in the Greater Washington, DC region. The Company currently owns 147 office properties totaling 12.2 million rentable square feet. The Company has implemented a core customer expansion strategy that is built around meeting, through acquisitions and development, the multi-location requirements of the Company's existing strategic tenants. The Company's property management services team provides comprehensive property and asset management to company owned properties and select third party clients. The Company's development and construction services team provides a wide range of development and construction management services for company owned properties, as well as land planning, design/build services, consulting, and merchant development to select third party clients. 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 Company's website 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 may contain "forward-looking" statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. can be identified by the use of words such as "may", "will", "should", "expect", "estimate" or other comparable terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or . Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements. Important factors that may affect these expectations, estimates, and projections include, but are not limited to: --the Company's ability to borrow Borrow To obtain or receive money on loan with the promise or understanding that it will be repaid. on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms; --general economic and business conditions, which will, among other things, affect office property demand and rents, tenant creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. , interest rates and financing availability; --adverse changes in the real estate markets including, among other things, increased competition with other companies; --risk of real estate acquisition and development, 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 operating costs npl → gastos mpl operacionales may be greater than anticipated; --risks of investing through joint venture structures, including risks that the Company's joint venture partners may not fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. their financial obligations as investors or may take actions that are inconsistent Reciprocally contradictory or repugnant. Things are said to be inconsistent when they are contrary to each other to the extent that one implies the negation of the other. with the Company's objectives; --governmental actions and initiatives; and --environmental requirements. The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company's filings with the Securities and Exchange Commission, particularly the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Risk Factors" in Item 1 of the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2004.
Financial Tables Attached
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(Amounts in thousands, except per share data)
Three months ended
March 31,
------------------
2005 2004
--------- --------
Revenues
Real estate revenues $ 60,627 $48,971
Service operations revenues 17,097 7,652
--------- --------
Total revenues 77,724 56,623
--------- --------
Expenses
Property operating 18,918 15,039
Depreciation and other amortization associated
with real estate operations 14,666 10,359
Service operations expenses 16,188 6,910
General and administrative expenses 3,276 2,286
--------- --------
Total operating expenses 53,048 34,594
--------- --------
Operating income 24,676 22,029
Interest expense (13,358) (10,262)
Amortization of deferred financing costs (396) (859)
--------- --------
Income from continuing operations before gain
(loss) on sales of real estate, equity in loss of
unconsolidated entities, income taxes and minority
interests 10,922 10,908
Gain (loss) on sales of real estate 24 (222)
Equity in loss of unconsolidated entities - (88)
Income tax expense (457) (200)
--------- --------
Income from continuing operations before minority
interests 10,489 10,398
Minority interests in income from continuing
operations of consolidated subsidiaries (1,449) (1,405)
--------- --------
Net income 9,040 8,993
Preferred share dividends (3,654) (4,456)
--------- --------
Net income available to common shareholders $ 5,386 $ 4,537
========= ========
Earnings per share "EPS" computation
Numerator:
Net income available to common shareholders $ 5,386 $ 4,537
Dividends on convertible preferred shares - 21
--------- --------
Numerator for diluted EPS $ 5,386 $ 4,558
========= ========
Denominator:
Weighted average common shares - basic 36,555 29,814
Assumed conversion of dilutive options 1,537 1,749
Assumed conversion of preferred shares - 539
--------- --------
Weighted average common shares - diluted 38,092 32,102
========= ========
EPS
Basic $ 0.15 $ 0.15
========= ========
Diluted $ 0.14 $ 0.14
========= ========
Corporate Office Properties Trust
Summary Financial Data
(unaudited)
(Amounts in thousands, except per share data and ratios)
Three months ended
March 31,
------------------
2005 2004
--------- --------
Net income $ 9,040 $ 8,993
Add: Real estate-related depreciation and
amortization 14,505 10,261
Add: Depreciation and amortization on
unconsolidated real estate entities - 106
Less: Depreciation and amortization allocable to
minority interests in other consolidated entities (32) -
Less: Gain on sales of real estate, excluding
development portion (24) (23)
--------- --------
Funds from operations ("FFO") 23,489 19,337
Add: Minority interests-common units in the
Operating Partnership 1,308 1,405
Less: Preferred share dividends (3,654) (4,456)
--------- --------
Funds from Operations - basic ("Basic FFO") 21,143 16,286
Add: Convertible preferred share dividends - 21
--------- --------
Funds from Operations - diluted ("Diluted FFO") 21,143 16,307
Less: Straight-line rent adjustments (1,583) (766)
Less: Recurring capital expenditures (4,734) (3,023)
Less: Amortization of deferred market rental
revenue (70) (309)
--------- --------
Adjusted Funds from Operations - diluted ("Diluted
AFFO") $ 14,756 $12,209
========= ========
Weighted average shares
Weighted average common shares 36,555 29,814
Conversion of weighted average common units 8,544 8,863
--------- --------
Weighted average common shares/units - basic FFO
per share 45,099 38,677
Assumed conversion of share options 1,537 1,749
Assumed conversion of weighted average
convertible preferred shares - 539
--------- --------
Weighted average common shares/units - diluted
FFO per share 46,636 40,965
========= ========
Diluted FFO per common share $ 0.45 $ 0.40
========= ========
Dividends/distributions per common share/unit $ 0.255 $ 0.235
========= ========
Earnings payout ratio 173% 158%
========= ========
Diluted FFO payout ratio 54% 57%
========= ========
Diluted AFFO payout ratio 78% 76%
========= ========
EBITDA interest coverage ratio 2.95 3.13
========= ========
EBITDA fixed charge coverage ratio 2.29 2.18
========= ========
Reconciliation of denominators for diluted EPS and
diluted FFO per share
Denominator for diluted EPS 38,092 32,102
Weighted average common units 8,544 8,863
--------- --------
Denominator for diluted FFO per share 46,636 40,965
========= ========
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
(Dollars and shares in thousands, except per share data)
March 31, December 31,
2005 2004
----------- ------------
Balance Sheet Data (in thousands) (as of
period end):
Investment in real estate, net of accumulated
depreciation $1,617,276 $ 1,544,501
Total assets 1,798,920 1,732,026
Mortgage and other loans payable 1,091,688 1,022,688
Total liabilities 1,180,425 1,111,224
Minority interests 98,038 98,878
Beneficiaries' equity 520,457 521,924
Debt to Total Assets 60.7% 59.0%
Debt to Undepreciated Book Value of Real
Estate Assets 59.5% 58.3%
Debt to Total Market Capitalization 44.1% 40.4%
Property Data, including joint ventures (as
of period ended):
Number of operating properties owned 145 145
Total net rentable square feet owned (in
thousands) 11,982 11,978
Occupancy 92.4% 94.0%
Three Months Ended
March 31,
------------------------
2005 2004
----------- ------------
Reconciliation of tenant improvements and
incentives, capital improvements and leasing
costs for operating properties to recurring
capital expenditures
Total tenant improvements and incentives on
operating properties $ 13,163 $ 2,268
Total capital improvements on operating
properties 2,105 836
Total leasing costs on operating properties 668 566
Less: Nonrecurring tenant improvements and
incentives on operating properties (9,551) (112)
Less: Nonrecurring capital improvements on
operating properties (1,630) (505)
Less: Nonrecurring leasing costs incurred on
operating properties (21) (30)
----------- ------------
Recurring capital expenditures $ 4,734 $ 3,023
=========== ============
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
(Dollars in thousands)
Three Months Ended
March 31,
------------------
2005 2004
-------- --------
Reconciliation of dividends for Earnings Payout
Ratio to dividends and distributions for FFO &
AFFO Payout Ratio
Common share dividends for earnings payout ratio $ 9,339 $ 7,178
Common unit distributions 2,179 2,074
Convertible preferred share dividends - 21
-------- --------
Dividends and distributions for FFO & AFFO payout
ratio $11,518 $ 9,273
======== ========
Reconciliation of GAAP net income to earnings
before interest, income taxes, depreciation and
amortization ("EBITDA")
Net income $ 9,040 $ 8,993
Interest expense on continuing operations 13,358 10,262
Income tax expense 457 200
Real estate-related depreciation and amortization 14,505 10,261
Amortization of deferred financing costs 396 859
Other depreciation and amortization 161 98
Minority interests 1,449 1,405
-------- --------
EBITDA $39,366 $32,078
======== ========
Reconciliation of interest expense from continuing
operations to the denominator for fixed charge
coverage-EBITDA
Interest expense from continuing operations $13,358 $10,262
Preferred share dividends 3,654 4,456
Preferred unit distributions 165 -
-------- --------
Denominator for fixed charge coverage-EBITDA $17,177 $14,718
======== ========
Reconciliation of same property net operating
income to same property cash net operating income
Same property net operating income $33,133 $33,702
Less: Straight-line rent adjustments (746) (762)
Less: Amortization of deferred market rental
revenue (157) (313)
-------- --------
Same property cash net operating income $32,230 $32,627
======== ========
Corporate Office Properties Trust
Summary Financial Data
(Unaudited)
(Amounts in thousands, except per share data)
March 31, December 31,
2005 2004
----------- ------------
Reconciliation of denominator for debt to
total assets to denominator for debt to
undepreciated book value of real estate
assets
Denominator for debt to total assets $1,798,920 $ 1,732,026
Assets other than assets included in
investment in real estate (181,644) (187,525)
Accumulated depreciation on real estate
assets 153,127 141,716
Intangible assets on real estate
acquisitions, net 64,965 67,560
----------- ------------
Denominator for debt to undepreciated book
value of real estate assets $1,835,368 $ 1,753,777
=========== ============
Three Months Twelve Months
Ending Ending
June 30, 2005 December 31, 2005
----------------- -----------------
Reconciliation of projected EPS-
diluted to projected diluted
FFO per share Low High Low High
-------- -------- -------- --------
Reconciliation of numerators
----------------------------------
Numerator for projected EPS-
diluted $ 5,150 $ 5,850 $19,575 $22,350
Real estate-related depreciation
and amortization 14,850 14,850 62,469 62,469
Minority interests-common units 1,260 1,432 4,790 5,469
-------- -------- -------- --------
Numerator for projected diluted
FFO per share $21,260 $22,132 $86,834 $90,288
======== ======== ======== ========
Reconciliation of denominators
----------------------------------
Denominator for projected EPS-
diluted 39,710 39,710 40,222 40,222
Weighted average common units 8,660 8,660 8,645 8,645
-------- -------- -------- --------
Denominator for projected diluted
FFO per share 48,370 48,370 48,867 48,867
======== ======== ======== ========
EPS - diluted $ 0.13 $ 0.15 $ 0.49 $ 0.56
======== ======== ======== ========
FFO per share - diluted $ 0.44 $ 0.46 $ 1.78 $ 1.85
======== ======== ======== ========
Top Twenty Office Tenants as of March 31, 2005
(Dollars and square feet in thousands)
Percentage of
Total Total
Number of Occupied Occupied
Tenant Leases Square Feet Square Feet
-------------------------------- --------- ----------- -------------
United States of America (3) 30 1,338,315 12.1%
Booz Allen Hamilton, Inc. 10 471,067 4.3%
Computer Sciences Corporation (4) 5 485,527 4.4%
General Dynamics Corporation 11 440,913 4.0%
The Titan Corporation (4) 5 232,136 2.1%
Northrop Grumman Corporation 9 396,607 3.6%
Unisys (5) 3 741,284 6.7%
AT&T Corporation (4) 7 316,148 2.9%
The Aerospace Corporation 3 222,366 2.0%
Wachovia Bank 3 176,470 1.6%
VeriSign, Inc. 2 162,841 1.5%
The Boeing Company (4) 8 162,699 1.5%
Ciena Corporation 3 221,609 2.0%
Commonwealth of Pennsylvania (4) 6 205,386 1.9%
Magellan Health Services, Inc. 2 142,199 1.3%
PricewaterhouseCoopers 1 97,638 0.9%
Johns Hopkins University (4) 7 106,473 1.0%
Merck & Co., Inc. (Unisys) (5) 1 219,065 2.0%
Carefirst, Inc. and Subsidiaries(4) 3 94,223 0.9%
BAE Systems 7 199,212 1.8%
Subtotal Top 20 Office Tenants 126 6,432,178 58.1%
All remaining tenants 495 4,644,315 41.9%
-----------------------------------
Total/Weighted Average 621 11,076,493 100.0%
===================================
Total Percentage Weighted
Annualized of Total Average
Rental Annualized Remaining
Revenue Rental Lease Term
Tenant (1) Revenue (2)
-------------------------------- ---------- ---------- -------------
United States of America (3) $30,495 13.3% 4.8
Booz Allen Hamilton, Inc. 11,473 5.0% 7.4
Computer Sciences Corporation (4) 11,372 5.0% 5.8
General Dynamics Corporation 8,870 3.9% 4.6
The Titan Corporation (4) 8,438 3.7% 8.4
Northrop Grumman Corporation 8,293 3.6% 3.1
Unisys (5) 7,901 3.4% 4.3
AT&T Corporation (4) 6,716 2.9% 3.4
The Aerospace Corporation 5,724 2.5% 9.7
Wachovia Bank 5,324 2.3% 13.7
VeriSign, Inc. 4,596 2.0% 9.3
The Boeing Company (4) 4,101 1.8% 3.8
Ciena Corporation 3,293 1.4% 3.1
Commonwealth of Pennsylvania (4) 3,008 1.3% 4.3
Magellan Health Services, Inc. 2,778 1.2% 6.3
PricewaterhouseCoopers 2,720 1.2% 0.9
Johns Hopkins University (4) 2,545 1.1% 2.4
Merck & Co., Inc. (Unisys) (5) 2,372 1.0% 4.3
Carefirst, Inc. and Subsidiaries(4) 2,277 1.0% 2.8
BAE Systems 2,229 1.0% 1.7
Subtotal Top 20 Office Tenants 134,525 58.7% 5.6
All remaining tenants 94,575 41.3% 4.0
---------------------
Total/Weighted Average $229,100 100.0% 4.9
=====================
(1) Total Annualized Rental Revenue is the monthly contractual base
rent as of March 31, 2005 multiplied by 12 plus the estimated
annualized expense reimbursements under existing office leases.
(2) The weighting of the lease term was computed using Total Rental
Revenue.
(3) Many of our government leases are subject to early termination
provisions which are customary to government leases. The weighted
average remaining lease term was computed assuming no exercise of
such early termination rights.
(4) Includes affiliated organizations or agencies.
(5) Merck & Co., Inc. subleases 219,065 rentable square feet from
Unisys' 960,349 leased rentable square feet.
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