Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 20, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | CORPORATE OFFICE PROPERTIES TRUST | |
Entity Central Index Key | 860,546 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 94,650,659 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Corporate Office Properties, L.P. | ||
Entity Information [Line Items] | ||
Entity Registrant Name | CORPORATE OFFICE PROPERTIES, L.P. | |
Entity Central Index Key | 1,577,966 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Properties, net: | ||
Operating properties, net | $ 2,863,262 | $ 2,920,529 |
Projects in development or held for future development | 416,169 | 429,219 |
Total properties, net | 3,279,431 | 3,349,748 |
Assets held for sale, net | 225,897 | 96,782 |
Cash and cash equivalents | 62,489 | 60,310 |
Restricted cash and marketable securities | 7,763 | 7,716 |
Accounts receivable (net of allowance for doubtful accounts of $1,789 and $1,525, respectively) | 28,776 | 29,167 |
Deferred rent receivable (net of allowance of $881 and $1,962, respectively) | 96,936 | 105,484 |
Intangible assets on real estate acquisitions, net | 93,526 | 98,338 |
Deferred leasing costs (net of accumulated amortization of $66,237 and $66,364, respectively) | 44,768 | 53,868 |
Investing receivables | 48,998 | 47,875 |
Prepaid expenses and other assets, net | 49,324 | 60,024 |
Total assets | 3,937,908 | 3,909,312 |
Liabilities: | ||
Debt, net | 2,140,212 | 2,077,752 |
Accounts payable and accrued expenses | 78,597 | 91,755 |
Rents received in advance and security deposits | 33,457 | 37,148 |
Dividends and distributions payable | 30,217 | 30,178 |
Deferred revenue associated with operating leases | 19,093 | 19,758 |
Interest rate derivatives | 15,072 | 3,160 |
Other liabilities | 15,046 | 13,779 |
Total liabilities | $ 2,331,694 | $ 2,273,530 |
Commitments and contingencies (Note 14) | ||
Redeemable noncontrolling interests | $ 22,333 | $ 19,218 |
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred Shares of beneficial interest at liquidation preference ($0.01 par value; 25,000,000 shares authorized, shares issued and outstanding of 7,431,667 at March 31, 2016 and December 31, 2015) | 199,083 | 199,083 |
Common Shares of beneficial interest | 947 | 945 |
Additional paid-in capital | 2,005,523 | 2,004,507 |
Cumulative distributions in excess of net income | (679,935) | (657,172) |
Accumulated other comprehensive loss | (12,862) | (2,838) |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,512,756 | 1,544,525 |
Noncontrolling interests in subsidiaries: | ||
Common units in COPLP | 51,031 | 52,359 |
Preferred units in COPLP | 8,800 | 8,800 |
Other consolidated entities | 11,294 | 10,880 |
Noncontrolling interests in subsidiaries | 71,125 | 72,039 |
Total equity | 1,583,881 | 1,616,564 |
Total liabilities, redeemable noncontrolling interest and equity | 3,937,908 | 3,909,312 |
Corporate Office Properties, L.P. | ||
Properties, net: | ||
Operating properties, net | 2,863,262 | 2,920,529 |
Projects in development or held for future development | 416,169 | 429,219 |
Total properties, net | 3,279,431 | 3,349,748 |
Assets held for sale, net | 225,897 | 96,782 |
Cash and cash equivalents | 62,489 | 60,310 |
Restricted cash and marketable securities | 2,092 | 1,953 |
Accounts receivable (net of allowance for doubtful accounts of $1,789 and $1,525, respectively) | 28,776 | 29,167 |
Deferred rent receivable (net of allowance of $881 and $1,962, respectively) | 96,936 | 105,484 |
Intangible assets on real estate acquisitions, net | 93,526 | 98,338 |
Deferred leasing costs (net of accumulated amortization of $66,237 and $66,364, respectively) | 44,768 | 53,868 |
Investing receivables | 48,998 | 47,875 |
Prepaid expenses and other assets, net | 49,324 | 60,024 |
Total assets | 3,932,237 | 3,903,549 |
Liabilities: | ||
Debt, net | 2,140,212 | 2,077,752 |
Accounts payable and accrued expenses | 78,597 | 91,755 |
Rents received in advance and security deposits | 33,457 | 37,148 |
Dividends and distributions payable | 30,217 | 30,178 |
Deferred revenue associated with operating leases | 19,093 | 19,758 |
Interest rate derivatives | 15,072 | 3,160 |
Other liabilities | 9,375 | 8,016 |
Total liabilities | $ 2,326,023 | $ 2,267,767 |
Commitments and contingencies (Note 14) | ||
Redeemable noncontrolling interests | $ 22,333 | $ 19,218 |
Corporate Office Properties Trust’s shareholders’ equity: | ||
Common Shares of beneficial interest | 1,378,061 | 1,400,745 |
Accumulated other comprehensive loss | (13,399) | (2,985) |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,572,545 | 1,605,643 |
Noncontrolling interests in subsidiaries: | ||
Noncontrolling interests in subsidiaries | 11,336 | 10,921 |
Total equity | 1,583,881 | 1,616,564 |
Total liabilities, redeemable noncontrolling interest and equity | 3,932,237 | 3,903,549 |
General Partner | Corporate Office Properties, L.P. | ||
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred partners' capital accounts | 199,083 | 199,083 |
Limited Partner | Corporate Office Properties, L.P. | ||
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred partners' capital accounts | $ 8,800 | $ 8,800 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts - AR | $ 1,789 | $ 1,525 |
Deferred rent receivable | 881 | 1,962 |
Deferred leasing costs, accumulated amortization | $ 66,237 | $ 66,364 |
Preferred Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Shares of beneficial interest, shares authorized | 25,000,000 | 25,000,000 |
Preferred Shares of beneficial interest, shares issued | 7,431,667 | 7,431,667 |
Preferred Shares of beneficial interest, shares outstanding | 7,431,667 | 7,431,667 |
Common Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares of beneficial interest, shares authorized | 125,000,000 | 125,000,000 |
Common Stock, Shares, Issued | 94,661,381 | 94,531,512 |
Common Shares of beneficial interest, shares outstanding | 94,661,381 | 94,531,512 |
Corporate Office Properties, L.P. | ||
Allowance for doubtful accounts - AR | $ 1,789 | $ 1,525 |
Deferred rent receivable | 881 | 1,962 |
Deferred leasing costs, accumulated amortization | $ 66,237 | $ 66,364 |
Corporate Office Properties, L.P. | General Partner | ||
Common Shares of beneficial interest, shares outstanding | 94,661,381 | 94,531,512 |
Preferred Units, Outstanding | 7,431,667 | 7,431,667 |
Corporate Office Properties, L.P. | Limited Partner | ||
Common Shares of beneficial interest, shares outstanding | 3,677,391 | 3,677,391 |
Preferred Units, Outstanding | 352,000 | 352,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Revenues | |||
Rental revenue | $ 105,382 | $ 98,238 | |
Tenant recoveries and other real estate operations revenue | 27,705 | 24,472 | |
Construction contract and other service revenues | 11,220 | 38,324 | |
Total revenues | 144,307 | 161,034 | |
Expenses | |||
Property operating expenses | 51,875 | 50,681 | |
Depreciation and amortization associated with real estate operations | 34,527 | 31,599 | |
Construction contract and other service expenses | 10,694 | 37,498 | |
Impairment losses | 2,446 | 0 | |
General, administrative and leasing expenses | 11,883 | 7,891 | |
Business development expenses and land carry costs | 2,418 | 2,790 | |
Total operating expenses | 113,843 | 130,459 | |
Operating income | 30,464 | 30,575 | |
Interest expense | (23,559) | (20,838) | |
Interest and other income | 1,156 | 1,283 | |
Gain (loss) on early extinguishment of debt | 17 | (3) | |
Income from continuing operations before equity in income of unconsolidated entities and income taxes | 8,078 | 11,017 | |
Equity in income of unconsolidated entities | 10 | 25 | |
Income tax benefit (expense) | 8 | (55) | |
Income from continuing operations | 8,096 | 10,987 | |
Discontinued operations | 0 | (238) | |
Income before gain on sales of real estate | 8,096 | 10,749 | |
Gain on sales of real estate | 0 | 3,986 | |
Net income | 8,096 | 14,735 | |
Net income attributable to noncontrolling interests: | |||
Common units in COPLP | (127) | (398) | |
Preferred units in COPLP | (165) | (165) | |
Other consolidated entities | (978) | (817) | |
Net income attributable to COPT | 6,826 | 13,355 | |
Preferred share/unit dividends/distributions | (3,552) | (3,552) | |
Net income attributable to COPT common shareholders | 3,274 | 9,803 | |
Net income attributable to COPT: | |||
Income from continuing operations | 6,826 | 13,581 | |
Discontinued operations, net | 0 | (226) | |
Net income attributable to COPT | $ 6,826 | $ 13,355 | |
Basic earnings per common share | |||
Income from continuing operations (in dollars per share/unit) | [1] | $ 0.03 | $ 0.10 |
Discontinued operations (in dollars per share/unit) | [1] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [1] | 0.03 | 0.10 |
Diluted earnings per common share | |||
Income from continuing operations (in dollars per share/unit) | [1] | 0.03 | 0.10 |
Discontinued operations (in dollars per share/unit) | [1] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [1] | 0.03 | 0.10 |
Dividends declared per common share/unit | $ 0.275 | $ 0.275 | |
Corporate Office Properties, L.P. | |||
Revenues | |||
Rental revenue | $ 105,382 | $ 98,238 | |
Tenant recoveries and other real estate operations revenue | 27,705 | 24,472 | |
Construction contract and other service revenues | 11,220 | 38,324 | |
Total revenues | 144,307 | 161,034 | |
Expenses | |||
Property operating expenses | 51,875 | 50,681 | |
Depreciation and amortization associated with real estate operations | 34,527 | 31,599 | |
Construction contract and other service expenses | 10,694 | 37,498 | |
Impairment losses | 2,446 | 0 | |
General, administrative and leasing expenses | 11,883 | 7,891 | |
Business development expenses and land carry costs | 2,418 | 2,790 | |
Total operating expenses | 113,843 | 130,459 | |
Operating income | 30,464 | 30,575 | |
Interest expense | (23,559) | (20,838) | |
Interest and other income | 1,156 | 1,283 | |
Gain (loss) on early extinguishment of debt | 17 | (3) | |
Income from continuing operations before equity in income of unconsolidated entities and income taxes | 8,078 | 11,017 | |
Equity in income of unconsolidated entities | 10 | 25 | |
Income tax benefit (expense) | 8 | (55) | |
Income from continuing operations | 8,096 | 10,987 | |
Discontinued operations | 0 | (238) | |
Income before gain on sales of real estate | 8,096 | 10,749 | |
Gain on sales of real estate | 0 | 3,986 | |
Net income | 8,096 | 14,735 | |
Net income attributable to noncontrolling interests: | |||
Net income attributable to noncontrolling interests in consolidated entities | (979) | (818) | |
Net income attributable to COPT | 7,117 | 13,917 | |
Preferred share/unit dividends/distributions | (3,717) | (3,717) | |
Net income attributable to COPT common shareholders | 3,400 | 10,200 | |
Net income attributable to COPT: | |||
Income from continuing operations | 7,117 | 14,152 | |
Discontinued operations, net | 0 | (235) | |
Net income attributable to COPT | $ 7,117 | $ 13,917 | |
Basic earnings per common share | |||
Income from continuing operations (in dollars per share/unit) | [2] | $ 0.03 | $ 0.10 |
Discontinued operations (in dollars per share/unit) | [2] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [2] | 0.03 | 0.10 |
Diluted earnings per common share | |||
Income from continuing operations (in dollars per share/unit) | [2] | 0.03 | 0.10 |
Discontinued operations (in dollars per share/unit) | [2] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [2] | 0.03 | 0.10 |
Dividends declared per common share/unit | $ 0.275 | $ 0.275 | |
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. | ||
[2] | Basic and diluted earnings per common unit are calculated based on amounts attributable to common unitholders of Corporate Office Properties, L.P. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net income | $ 8,096 | $ 14,735 |
Other comprehensive loss | ||
Unrealized losses on interest rate derivatives | (11,284) | (3,474) |
Other comprehensive loss | (10,414) | (2,701) |
Comprehensive (loss) income | (2,318) | 12,034 |
Comprehensive income attributable to noncontrolling interests | (880) | (1,329) |
Comprehensive (loss) income attributable to COPT | (3,198) | 10,705 |
Interest Expense | ||
Other comprehensive loss | ||
Losses on interest rate derivatives included in interest expense | 870 | 773 |
Corporate Office Properties, L.P. | ||
Net income | 8,096 | 14,735 |
Other comprehensive loss | ||
Unrealized losses on interest rate derivatives | (11,284) | (3,474) |
Other comprehensive loss | (10,414) | (2,701) |
Comprehensive (loss) income | (2,318) | 12,034 |
Comprehensive income attributable to noncontrolling interests | (979) | (873) |
Comprehensive (loss) income attributable to COPT | (3,297) | 11,161 |
Corporate Office Properties, L.P. | Interest Expense | ||
Other comprehensive loss | ||
Losses on interest rate derivatives included in interest expense | $ 870 | $ 773 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Preferred Shares | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Corporate Office Properties, L.P. | Corporate Office Properties, L.P.Common Shares | Corporate Office Properties, L.P.Accumulated Other Comprehensive Loss | Corporate Office Properties, L.P.Noncontrolling Interests | Corporate Office Properties, L.P.Limited Partner | Corporate Office Properties, L.P.Limited PartnerPreferred Shares | Corporate Office Properties, L.P.General Partner | Corporate Office Properties, L.P.General PartnerPreferred Shares |
Balance (COPT: 93,255,284 shares and 94,531,512 shares as of December 31, 2014 and 2015, respectively) at Dec. 31, 2014 | $ 1,520,884 | $ 199,083 | $ 933 | $ 1,969,968 | $ (717,264) | $ (1,297) | $ 69,461 | $ 1,520,884 | $ 1,305,219 | $ (1,381) | $ 9,163 | $ 8,800 | $ 199,083 | ||
Balance (preferred units) at Dec. 31, 2014 | 352,000 | 7,431,667 | |||||||||||||
Balance (in units/ shares) at Dec. 31, 2014 | 93,255,284 | 97,092,835 | |||||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||
Conversion of common units to common shares (COPT: 158,000 shares for the three months ended March 31, 2015) | $ 0 | 2 | 2,120 | (2,122) | |||||||||||
Issuance of common units resulting from common shares issued under at-the-market program (in units) | 890,241 | ||||||||||||||
Issuance of common units resulting from common shares issued under at-the-market program (COPT: 890,241 shares for the three months ended March 31, 2015) | $ 26,535 | 9 | 26,526 | 26,535 | $ 26,535 | ||||||||||
Exercise of share options (in units/shares) | 70,374 | 70,374 | |||||||||||||
Exercise of share options (COPT: 70,374 shares for the three months ended March 31, 2015) | $ 1,845 | 0 | 1,845 | 1,845 | $ 1,845 | ||||||||||
Share-based compensation issuance, net of redemptions (in units/shares) | 162,370 | 162,370 | |||||||||||||
Share-based compensation issuance, net of redemptions (COPT: 162,370 and 129,869 shares issued, net of redemptions for the three months ended March 31, 2015 and 2016, respectively) | $ 1,829 | 1 | 1,828 | 1,829 | $ 1,829 | ||||||||||
Redemption of vested equity awards | (2,031) | (2,031) | (2,031) | (2,031) | |||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | (475) | 475 | ||||||||||||
Comprehensive income | 11,472 | 13,355 | (2,650) | 767 | 11,472 | 10,200 | (2,756) | 311 | $ 165 | $ 3,552 | |||||
Dividends / Distributions to owners of common and preferred units | (29,550) | (29,550) | (30,727) | (27,010) | $ (165) | $ (3,552) | |||||||||
Distributions to owners of common and preferred units in COPLP | (1,177) | (1,177) | |||||||||||||
Distributions to noncontrolling interests in subsidiaries | (4) | (4) | (4) | (4) | |||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | $ (73) | (73) | (73) | $ (73) | |||||||||||
Balance (in units/ shares) at Mar. 31, 2015 | 94,536,269 | 98,215,820 | |||||||||||||
Balance (preferred units) at Mar. 31, 2015 | 352,000 | 7,431,667 | |||||||||||||
Balance (COPT: 94,536,269 shares and 94,661,381 shares as of March 31, 2015 and 2016, respectively) at Mar. 31, 2015 | $ 1,529,730 | 199,083 | 945 | 1,999,708 | (733,459) | (3,947) | 67,400 | 1,529,730 | $ 1,316,514 | (4,137) | 9,470 | $ 8,800 | $ 199,083 | ||
Balance (COPT: 93,255,284 shares and 94,531,512 shares as of December 31, 2014 and 2015, respectively) at Dec. 31, 2015 | $ 1,616,564 | 199,083 | 945 | 2,004,507 | (657,172) | (2,838) | 72,039 | 1,616,564 | $ 1,400,745 | (2,985) | 10,921 | $ 8,800 | $ 199,083 | ||
Balance (preferred units) at Dec. 31, 2015 | 352,000 | 352,000 | 7,431,667 | 7,431,667 | |||||||||||
Balance (in units/ shares) at Dec. 31, 2015 | 94,531,512 | 98,208,903 | 3,677,391 | 94,531,512 | |||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||
Costs associated with common shares issued to the public | $ (5) | (5) | (5) | $ (5) | |||||||||||
Share-based compensation issuance, net of redemptions (in units/shares) | 129,869 | 129,869 | |||||||||||||
Share-based compensation issuance, net of redemptions (COPT: 162,370 and 129,869 shares issued, net of redemptions for the three months ended March 31, 2015 and 2016, respectively) | $ 2,425 | 2 | 2,423 | 2,425 | $ 2,425 | ||||||||||
Redemption of vested equity awards | (1,154) | (1,154) | (1,154) | (1,154) | |||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 54 | (54) | ||||||||||||
Comprehensive income | (2,878) | 6,826 | (10,024) | 320 | (2,878) | 3,400 | (10,414) | 419 | $ 165 | $ 3,552 | |||||
Dividends / Distributions to owners of common and preferred units | (29,589) | (29,589) | (30,765) | (27,048) | $ (165) | $ (3,552) | |||||||||
Distributions to owners of common and preferred units in COPLP | (1,176) | (1,176) | |||||||||||||
Distributions to noncontrolling interests in subsidiaries | (4) | (4) | (4) | (4) | |||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | $ (302) | (302) | (302) | $ (302) | |||||||||||
Balance (in units/ shares) at Mar. 31, 2016 | 94,661,381 | 98,338,772 | 3,677,391 | 94,661,381 | |||||||||||
Balance (preferred units) at Mar. 31, 2016 | 352,000 | 352,000 | 7,431,667 | 7,431,667 | |||||||||||
Balance (COPT: 94,536,269 shares and 94,661,381 shares as of March 31, 2015 and 2016, respectively) at Mar. 31, 2016 | $ 1,583,881 | $ 199,083 | $ 947 | $ 2,005,523 | $ (679,935) | $ (12,862) | $ 71,125 | $ 1,583,881 | $ 1,378,061 | $ (13,399) | $ 11,336 | $ 8,800 | $ 199,083 |
Consolidated Statements of Equ7
Consolidated Statements of Equity (Parenthetical) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Balance (in units/ shares) | 94,661,381 | 94,536,269 |
Conversion of common units to common shares (in units/ shares) | 0 | 158,000 |
Exercise of share options (in units/shares) | 70,374 | |
Share-based compensation issuance, net of redemptions (in units/shares) | 129,869 | 162,370 |
Common Shares | ||
Issuance of common units resulting from common shares issued under at-the-market program (in units) | 890,241 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Revenues from real estate operations received | $ 130,059 | $ 117,521 |
Construction contract and other service revenues received | 7,747 | 19,968 |
Property operating expenses paid | (46,084) | (42,768) |
Construction contract and other service expenses paid | (10,765) | (27,853) |
General, administrative, leasing, business development and land carry costs paid | (12,175) | (12,728) |
Interest expense paid | (21,386) | (12,795) |
Other | 43 | 545 |
Net cash provided by operating activities | 47,439 | 41,890 |
Cash flows from investing activities | ||
Construction, development and redevelopment | (45,146) | (62,057) |
Acquisitions of operating properties and related intangible assets | 0 | (56,622) |
Tenant improvements on operating properties | (6,388) | (5,520) |
Other capital improvements on operating properties | (9,505) | (3,720) |
Proceeds from dispositions of properties | 5,452 | 17,424 |
Leasing costs paid | (1,593) | (1,935) |
Other | 1,121 | (5,956) |
Net cash used in investing activities | (56,059) | (118,386) |
Proceeds from debt | ||
Revolving Credit Facility | 88,500 | 150,000 |
Repayments of debt | ||
Revolving Credit Facility | (25,000) | (69,000) |
Scheduled principal amortization | (1,800) | (1,649) |
Other debt repayments | (50) | (50) |
Net proceeds from issuance of common shares/units | (5) | 28,404 |
Common share/unit dividends/distributions paid | (26,002) | (25,646) |
Preferred share/unit dividends/distributions paid | (3,552) | (3,552) |
Distributions paid to noncontrolling interests in COPLP | 1,171 | 1,217 |
Distributions paid to redeemable noncontrolling interests | (13,848) | (122) |
Redemption of vested equity awards | (1,154) | (2,031) |
Other | (5,119) | (289) |
Net cash provided by financing activities | 10,799 | 74,848 |
Net increase (decrease) in cash and cash equivalents | 2,179 | (1,648) |
Cash and cash equivalents | ||
Beginning of period | 60,310 | 6,077 |
End of period | 62,489 | 4,429 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 8,096 | 14,735 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 35,129 | 32,091 |
Impairment losses | 2,446 | 233 |
Losses on interest rate derivatives | 1,551 | 0 |
Amortization of deferred financing costs and net debt discounts | 1,495 | 1,254 |
Increase in deferred rent receivable | (1,456) | (1,746) |
Gain on sales of real estate | 0 | (3,986) |
Share-based compensation | 2,108 | 1,552 |
Other | (802) | (640) |
Operating changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable | 409 | (6,918) |
Decrease (increase) in restricted cash and marketable securities | 15 | (1,577) |
Decrease (increase) in prepaid expenses and other assets, net | 5,941 | (6,352) |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (3,802) | 12,704 |
(Decrease) increase in rents received in advance and security deposits | (3,691) | 540 |
Net cash provided by operating activities | 47,439 | 41,890 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | (9,420) | (3,897) |
Increase in property and redeemable noncontrolling interests in connection with property contributed in a joint venture | 22,600 | 0 |
Decrease in redeemable noncontrolling interests and increase in other liabilities in connection with distribution payable to redeemable noncontrolling interest | 6,675 | 0 |
Other liabilities assumed on acquisition of operating properties | 0 | 5,265 |
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | (10,414) | (2,701) |
Dividends/distributions payable | 30,217 | 30,174 |
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | 0 | 2,122 |
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | (54) | 475 |
Increase in redeemable noncontrolling interest and decrease in equity to carry redeemable noncontrolling interest at fair value | 302 | 73 |
Corporate Office Properties, L.P. | ||
Cash flows from operating activities | ||
Revenues from real estate operations received | 130,059 | 117,521 |
Construction contract and other service revenues received | 7,747 | 19,968 |
Property operating expenses paid | (46,084) | (42,768) |
Construction contract and other service expenses paid | (10,765) | (27,853) |
General, administrative, leasing, business development and land carry costs paid | (12,175) | (12,728) |
Interest expense paid | (21,386) | (12,795) |
Other | 43 | 545 |
Net cash provided by operating activities | 47,439 | 41,890 |
Cash flows from investing activities | ||
Construction, development and redevelopment | (45,146) | (62,057) |
Acquisitions of operating properties and related intangible assets | 0 | (56,622) |
Tenant improvements on operating properties | (6,388) | (5,520) |
Other capital improvements on operating properties | (9,505) | (3,720) |
Proceeds from dispositions of properties | 5,452 | 17,424 |
Leasing costs paid | (1,593) | (1,935) |
Other | 1,121 | (5,956) |
Net cash used in investing activities | (56,059) | (118,386) |
Proceeds from debt | ||
Revolving Credit Facility | 88,500 | 150,000 |
Repayments of debt | ||
Revolving Credit Facility | (25,000) | (69,000) |
Scheduled principal amortization | (1,800) | (1,649) |
Other debt repayments | (50) | (50) |
Net proceeds from issuance of common shares/units | (5) | 28,404 |
Common share/unit dividends/distributions paid | (27,008) | (26,698) |
Preferred share/unit dividends/distributions paid | (3,717) | (3,717) |
Distributions paid to redeemable noncontrolling interests | (13,848) | (122) |
Redemption of vested equity awards | (1,154) | (2,031) |
Other | (5,119) | (289) |
Net cash provided by financing activities | 10,799 | 74,848 |
Net increase (decrease) in cash and cash equivalents | 2,179 | (1,648) |
Cash and cash equivalents | ||
Beginning of period | 60,310 | 6,077 |
End of period | 62,489 | 4,429 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 8,096 | 14,735 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 35,129 | 32,091 |
Impairment losses | 2,446 | 233 |
Losses on interest rate derivatives | 1,551 | 0 |
Amortization of deferred financing costs and net debt discounts | 1,495 | 1,254 |
Increase in deferred rent receivable | (1,456) | (1,746) |
Gain on sales of real estate | 0 | (3,986) |
Share-based compensation | 2,108 | 1,552 |
Other | (802) | (640) |
Operating changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable | 409 | (6,918) |
Decrease (increase) in restricted cash and marketable securities | (77) | (1,523) |
Decrease (increase) in prepaid expenses and other assets, net | 5,941 | (6,352) |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (3,710) | 12,650 |
(Decrease) increase in rents received in advance and security deposits | (3,691) | 540 |
Net cash provided by operating activities | 47,439 | 41,890 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | (9,420) | (3,897) |
Increase in property and redeemable noncontrolling interests in connection with property contributed in a joint venture | 22,600 | 0 |
Decrease in redeemable noncontrolling interests and increase in other liabilities in connection with distribution payable to redeemable noncontrolling interest | 6,675 | 0 |
Other liabilities assumed on acquisition of operating properties | 0 | 5,265 |
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | (10,414) | (2,701) |
Dividends/distributions payable | 30,217 | 30,174 |
Increase in redeemable noncontrolling interest and decrease in equity to carry redeemable noncontrolling interest at fair value | $ 302 | $ 73 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”) is a fully-integrated and self-managed real estate investment trust (“REIT”). Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”) is the entity through which COPT, the sole general partner of COPLP, conducts almost all of its operations and owns almost all of its assets. Unless otherwise expressly stated or the context otherwise requires, “we”, “us” and “our” as used herein refer to each of the Company and the Operating Partnership. We own, manage, lease, develop and selectively acquire office and data center properties. The majority of our portfolio is in locations that support United States Government agencies and their contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what we believe are growing, durable priority missions (“Defense/IT Locations”). We also own a complementary portfolio of traditional office properties located in select urban/urban-like submarkets within our regional footprint with durable Class-A office fundamentals and characteristics, as well as other properties supporting general commercial office tenants (“Regional Office”). As of March 31, 2016 , our properties included the following: • 179 operating office properties totaling 18.3 million square feet, including ten triple-net leased, single-tenant data center properties; • 11 office properties under, or contractually committed for, construction or redevelopment that we estimate will total approximately 1.3 million square feet upon completion, including one partially operational property included above and a property completed but held for future lease to the United States Government; • 1,358 acres of land we control that we believe could be developed into approximately 16.5 million square feet; and • a wholesale data center with a critical load of 19.25 megawatts. COPLP owns real estate both directly and through subsidiary partnerships and limited liability companies (“LLCs”). In addition to owning real estate, COPLP also owns subsidiaries that provide real estate services such as property management and construction and development services primarily for our properties but also for third parties. Some of these services are performed by a taxable REIT subsidiary (“TRS”). Equity interests in COPLP are in the form of common and preferred units. As of March 31, 2016 , COPT owned 96.3% of the outstanding COPLP common units (“common units”) and 95.5% of the outstanding COPLP preferred units (“preferred units”); the remaining common and preferred units in COPLP were owned by third parties. Common units in COPLP not owned by COPT carry certain redemption rights. The number of common units in COPLP owned by COPT is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of COPT, and the entitlement of all COPLP common units to quarterly distributions and payments in liquidation is substantially the same as those of COPT common shareholders. Similarly, in the case of each series of preferred units in COPLP held by COPT, there is a series of preferred shares of beneficial interest (“preferred shares”) in COPT that is equivalent in number and carries substantially the same terms as such series of COPLP preferred units. COPT’s common shares are publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OFC”. Because COPLP is managed by COPT, and COPT conducts substantially all of its operations through COPLP, we refer to COPT’s executive officers as COPLP’s executive officers, and although, as a partnership, COPLP does not have a board of trustees, we refer to COPT’s Board of Trustees as COPLP’s Board of Trustees. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The COPT consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities. We eliminate all intercompany balances and transactions in consolidation. We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. We use the cost method of accounting when we own an interest in an entity and cannot exert significant influence over its operations. These interim financial statements should be read together with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. All adjustments are of a normal recurring nature. The consolidated financial statements have been prepared using the accounting policies described in our 2015 Annual Report on Form 10-K. Recent Accounting Pronouncements We adopted guidance issued by the Financial Accounting Standards Board (“FASB”) effective January 1, 2016 regarding the presentation of extraordinary and unusual items in statements of operations. This guidance eliminates the concept of extraordinary items. However, the presentation and disclosure requirements for items that are either unusual in nature or infrequent in occurrence remain and will be expanded to include items that are both unusual in nature and infrequent in occurrence. Our adoption of this guidance did not affect on our reported consolidated financial statements. We adopted guidance issued by the FASB effective January 1, 2016 modifying the analysis that must be performed by us in determining whether we should consolidate certain types of legal entities. The guidance did not amend the existing disclosure requirements for VIEs or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, COPLP is considered a variable interest entity of COPT. As COPLP was already consolidated in the balance sheets of COPT, the identification of COPLP as a variable interest entity had no impact on the consolidated financial statements. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption. In addition, there were no voting interest entities under prior existing guidance determined to be variable interest entities under the revised guidance. We adopted effective January 1, 2016 guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the statement of operations or disclosed in the notes. Our adoption of this guidance did not affect our reported consolidated financial statements. In May 2014, the FASB issued guidance regarding the recognition of revenue from contracts with customers. Under this guidance, an entity will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance requires improved disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We are required to adopt this guidance for our annual and interim periods beginning January 1, 2018 using one of two methods: retrospective restatement for each reporting period presented at the time of adoption, or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. We are currently assessing the financial impact of this guidance on our consolidated financial statements. In February 2016, the FASB issued guidance that sets forth principles for the recognition, measurement, presentation and disclosure of leases. This guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. The resulting classification determines whether the lease expense is recognized based on an effective interest method or straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The guidance requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. This guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the financial impact of this guidance on our consolidated financial statements. In March 2016, the FASB issued guidance intended to simplify certain aspects of the accounting for employee based share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the consolidated statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. We are currently assessing the financial impact of this guidance on our consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements COPT has a non-qualified elective deferred compensation plan for certain members of our management team that permits participants to defer up to 100% of their compensation on a pre-tax basis and receive a tax-deferred return on such deferrals. The assets held in the plan (comprised primarily of mutual funds and equity securities) and the corresponding liability to the participants are measured at fair value on a recurring basis on COPT’s consolidated balance sheet using quoted market prices, as are other marketable securities that we hold. The balance of the plan, which was fully funded, totaled $5.7 million as of March 31, 2016 , and is included in the accompanying COPT consolidated balance sheets in the line entitled restricted cash and marketable securities. The offsetting liability associated with the plan is adjusted to fair value at the end of each accounting period based on the fair value of the plan assets and reported in other liabilities on COPT’s consolidated balance sheets. The assets of the plan and other marketable securities that we hold are classified in Level 1 of the fair value hierarchy. The liability associated with the plan is classified in Level 2 of the fair value hierarchy. The fair values of our interest rate derivatives are determined using widely accepted valuation techniques, including a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While we determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our interest rate derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of March 31, 2016 , we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments are not significant. As a result, we determined that our interest rate derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. As discussed further in Note 5, our partners in two real estate joint ventures, LW Redstone Company, LLC and Stevens Investors, LLC, have the right to require us to acquire their respective interests at fair value; accordingly, we classify the fair value of our partners’ interests as redeemable noncontrolling interests in the mezzanine section of our consolidated balance sheet. We determine the fair value of the interests based on unobservable inputs after considering the assumptions that market participants would make in pricing the interest. We apply a discount rate to the estimated future cash flows allocable to our partners from the properties underlying the respective joint ventures. Estimated cash flows used in such analyses are based on our plans for the properties and our views of market and economic conditions, and consider items such as current and future rental rates, occupancies for the properties and comparable properties and estimated operating and capital expenditures. The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments. As discussed in Note 6, we estimated the fair values of our investing receivables based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. For our disclosure of debt fair values in Note 8, we estimated the fair value of our unsecured senior notes based on quoted market rates for publicly-traded debt (categorized within Level 2 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible and may not be a prudent management decision. For additional fair value information, please refer to Note 6 for investing receivables, Note 8 for debt and Note 9 for interest rate derivatives. COPT and Subsidiaries The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of March 31, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: Marketable securities in deferred compensation plan (1) Mutual funds $ 5,580 $ — $ — $ 5,580 Other 91 — — 91 Total assets $ 5,671 $ — $ — $ 5,671 Liabilities: Deferred compensation plan liability (2) $ — $ 5,671 $ — $ 5,671 Interest rate derivatives — 15,072 — 15,072 Total liabilities $ — $ 20,743 $ — $ 20,743 (1) Included in the line entitled “restricted cash and marketable securities” on COPT’s consolidated balance sheet. (2) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. COPLP and Subsidiaries The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of March 31, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Liabilities: Interest rate derivatives $ — $ 15,072 $ — $ 15,072 Nonrecurring Fair Value Measurements During the three months ended March 31, 2016 , we recognized the following impairment losses resulting from nonrecurring fair value measurements: • $1.6 million on land in Colorado Springs, Colorado, the carrying amount of which exceeded the estimated fair value less costs to sell. Most of these losses pertained to land we decided to sell during the quarter that was reclassified as held for sale, and the remainder was attributable to further decreases in fair value of properties previously classified as held for sale based on recent bids from and negotiations with prospective buyers; and • $847,000 on operating properties in White Marsh, Maryland (included in our Regional Office segment) classified as held for sale whose carrying amounts exceeded their estimated fair values less costs to sell based on recent negotiations with prospective buyers. The table below sets forth the fair value hierarchy of the valuation technique we used to determine nonrecurring fair value measurements of these assets as of March 31, 2016 (dollars in thousands): Fair Values as of March 31, 2016 Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Assets held for sale, net (1) $ — $ — $ 14,886 $ 14,886 (1) Represents estimated fair values less costs to sell. Fair values were derived from bids for the properties that were deemed to be indicative of value. |
Properties, Net
Properties, Net | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Properties, Net | Properties, Net Operating properties, net consisted of the following (in thousands): March 31, December 31, Land $ 464,674 $ 463,305 Buildings and improvements 3,111,871 3,157,587 Less: Accumulated depreciation (713,283 ) (700,363 ) Operating properties, net $ 2,863,262 $ 2,920,529 Projects in development or held for future development consisted of the following (in thousands): March 31, December 31, Land $ 220,834 $ 207,774 Development in progress, excluding land 195,335 221,445 Projects in development or held for future development $ 416,169 $ 429,219 Our properties held for sale included: • as of March 31, 2016: 13 operating properties in White Marsh, Maryland (included in our Regional Office segment); four operating properties in Greater Philadelphia (included in our Regional Office segment); two operating properties in Hanover, Maryland (included in our Fort Meade/BW Corridor sub-segment); two operating properties in San Antonio (included in our Other segment); and land in Northern Virginia, Colorado Springs and Greater Philadelphia; and • as of December 31, 2015: 13 operating properties in White Marsh, Maryland (included in our Regional Office segment); two operating properties in San Antonio (included in our Other segment); and land in Northern Virginia and Colorado Springs. The table below sets forth the components of assets held for sale on our consolidated balance sheet for these properties (in thousands): March 31, 2016 December 31, 2015 Properties, net $ 199,481 $ 90,188 Deferred rent receivable 12,542 2,891 Intangible assets on real estate acquisitions, net 1,591 1,591 Deferred leasing costs, net 9,228 1,391 Lease incentives, net 3,055 721 Assets held for sale, net $ 225,897 $ 96,782 Acquisitions We acquired the following operating properties in 2015: • 250 W. Pratt Street, a 367,000 square foot office property in Baltimore, Maryland that was 96.2% leased, for $61.8 million on March 19, 2015; • 2600 Park Tower Drive, a 237,000 square foot office property in Vienna, Virginia (in the Northern Virginia region) that was 100% leased, for $80.5 million on April 15, 2015; and • 100 Light Street, a 558,000 square foot office property in Baltimore, Maryland that was 93.5% leased, and its structured parking garage, 30 Light Street, for $121.2 million on August 7, 2015. In connection with that acquisition, we assumed a $55.0 million mortgage loan with a fair value at assumption of $55.5 million . These properties contributed revenues of $9.2 million for the three months ended March 31, 2016 and $332,000 for the three months ended March 31, 2015, and net income from continuing operations of $942,000 for the three months ended March 31, 2016 and $170,000 for the three months ended March 31, 2015. We accounted for these acquisitions as business combinations. We included the results of operations for the acquisitions in our consolidated statements of operations from their respective purchase dates through March 31, 2016 . The following table presents pro forma information for COPT and subsidiaries as if these acquisitions had occurred on January 1, 2014. This pro forma information also includes adjustments to reclassify operating property acquisition costs to the three months ended March 31, 2014 from the 2015 periods in which they were actually incurred. The pro forma financial information was prepared for comparative purposes only and is not necessarily indicative of what would have occurred had these acquisitions been made at that time or of results which may occur in the future (in thousands, except per share amounts). For the Three Months Ended March 31, 2015 (Unaudited) Pro forma total revenues $ 169,925 Pro forma net income attributable to COPT common shareholders $ 10,847 Pro forma EPS: Basic $ 0.11 Diluted $ 0.11 2016 Dispositions We sold land in the three months ended March 31, 2016 for $5.7 million , with no gain recognized. 2016 Construction Activities During the three months ended March 31, 2016 , we placed into service 149,000 square feet in one newly constructed office property and 51,000 square feet in a redeveloped property. As of March 31, 2016 , we had eight office properties under construction, or for which we were contractually committed to construct, that we estimate will total 1.2 million square feet upon completion (including a property completed but held for future lease to the United States Government) and three office properties under redevelopment that we estimate will total 104,000 square feet upon completion. |
Real Estate Joint Ventures
Real Estate Joint Ventures | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Real Estate Joint Ventures | Real Estate Joint Ventures The table below sets forth information pertaining to our investments in consolidated real estate joint ventures as of March 31, 2016 (dollars in thousands): Nominal Ownership March 31, 2016 (1) Date % as of Total Encumbered Total Acquired 3/31/2016 Nature of Activity Assets Assets Liabilities LW Redstone Company, LLC 3/23/2010 85% Development and operation of real estate (2) $ 149,301 $ 82,018 $ 53,356 M Square Associates, LLC 6/26/2007 50% Development and operation of real estate (3) 56,333 47,820 37,462 Stevens Investors, LLC 8/11/2015 95% Development of real estate (4) 37,724 — 6,937 $ 243,358 $ 129,838 $ 97,755 (1) Excludes amounts eliminated in consolidation. (2) This joint venture’s properties are in Huntsville, Alabama. (3) This joint venture’s properties are in College Park, Maryland. (4) This joint venture’s property is in Washington, DC. In January 2016, our partner in Stevens Investors, LLC contributed to the joint venture, for a value of $22.6 million , interests in contracts controlling land to be developed (including a purchase agreement and a ground lease). Our partner subsequently received a cash distribution from the joint venture of $13.4 million , which was funded by us. Our partner is also entitled to receive an additional distribution from the joint venture of $6.7 million to be funded by us (expected later in 2016 or 2017) that was reported in other liabilities on our consolidated balance sheet as of March 31, 2016. |
Investing Receivables
Investing Receivables | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Investing Receivables | Investing Receivables Investing receivables, including accrued interest thereon, consisted of the following (in thousands): March 31, December 31, Notes receivable from the City of Huntsville $ 45,998 $ 44,875 Other investing loans receivable 3,000 3,000 $ 48,998 $ 47,875 Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 5) and carry an interest rate of 9.95% . We did not have an allowance for credit losses in connection with our investing receivables as of March 31, 2016 or December 31, 2015 . The fair value of these receivables approximated their carrying amounts as of March 31, 2016 and December 31, 2015 . |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, Net | 3 Months Ended |
Mar. 31, 2016 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepaid Expenses and Other Assets, Net | Prepaid Expenses and Other Assets, Net Prepaid expenses and other assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 15,516 $ 23,009 Lease incentives, net 8,375 11,133 Furniture, fixtures and equipment, net 5,669 6,004 Construction contract costs incurred in excess of billings 5,232 3,261 Deferred financing costs, net (1) 5,182 5,867 Deferred tax asset, net (2) 3,474 3,467 Equity method investments 1,646 1,636 Other assets 4,230 5,647 Prepaid expenses and other assets, net $ 49,324 $ 60,024 (1) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. (2) Includes a valuation allowance of $2.1 million . |
Debt, Net
Debt, Net | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt, Net | Debt, Net Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of Scheduled Maturity March 31, December 31, Stated Interest Rates as of as of March 31, 2016 March 31, 2016 Mortgage and Other Secured Loans: Fixed rate mortgage loans (2) $ 279,782 $ 281,208 3.96% - 7.87% (3) 2016-2024 Variable rate secured loans 49,488 49,792 LIBOR + 1.85% - 2.00% (4) 2016-2020 Total mortgage and other secured loans 329,270 331,000 Revolving Credit Facility 107,000 43,500 LIBOR + 0.875% to 1.60% (5) May 2019 Term Loan Facilities (6) 516,205 515,902 LIBOR + 0.90% to 2.60% (7) 2019-2022 Unsecured Senior Notes 3.600%, $350,000 aggregate principal 346,817 346,714 3.60% (8) May 2023 5.250%, $250,000 aggregate principal 245,840 245,731 5.25% (9) February 2024 3.700%, $300,000 aggregate principal 297,493 297,378 3.70% (10) June 2021 5.000%, $300,000 aggregate principal 296,105 296,019 5.00% (11) July 2025 Unsecured notes payable 1,482 1,508 0% (12) 2026 Total debt, net $ 2,140,212 $ 2,077,752 (1) The carrying values of our loans other than the Revolving Credit Facility reflect net deferred financing costs of $7.5 million as of March 31, 2016 and $8.0 million as of December 31, 2015 . (2) 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 $489,000 as of March 31, 2016 and $514,000 as of December 31, 2015 . (3) The weighted average interest rate on our fixed rate mortgage loans was 6.08% as of March 31, 2016 . (4) The weighted average interest rate on our variable rate secured loans was 2.40% as of March 31, 2016 . (5) The weighted average interest rate on the Revolving Credit Facility was 1.60% as of March 31, 2016 . (6) An additional $150 million in borrowings is available to be drawn under a term loan. In addition, we have the ability to borrow an additional $430.0 million in the aggregate under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. (7) The weighted average interest rate on these loans was 2.08% as of March 31, 2016 . (8) The carrying value of these notes reflects an unamortized discount totaling $2.2 million as of March 31, 2016 and December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 3.70% . (9) The carrying value of these notes reflects an unamortized discount totaling $3.7 million as of March 31, 2016 and $3.8 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 5.49% . (10) The carrying value of these notes reflects an unamortized discount totaling $2.0 million as of March 31, 2016 and $2.1 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 3.85% . (11) The carrying value of these notes reflects an unamortized discount totaling $3.2 million as of March 31, 2016 and $3.3 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 5.15% . (12) 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 $530,000 as of March 31, 2016 and $554,000 as of December 31, 2015 . All debt is owed by the Operating Partnership. While COPT is not directly obligated by any debt, it has guaranteed the Operating Partnership’s Revolving Credit Facility, Term Loan Facilities and Unsecured Senior Notes. Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of March 31, 2016 , we were within the compliance requirements of these financial covenants. We capitalized interest costs of $1.8 million in the three months ended March 31, 2016 and $2.1 million in the three months ended March 31, 2015 . The following table sets forth information pertaining to the fair value of our debt (in thousands): March 31, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,186,255 $ 1,216,295 $ 1,185,842 $ 1,211,658 Other fixed-rate debt 281,264 289,254 282,716 291,991 Variable-rate debt 672,693 677,203 609,194 610,987 $ 2,140,212 $ 2,182,752 $ 2,077,752 $ 2,114,636 |
Interest Rate Derivatives
Interest Rate Derivatives | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Derivatives | Interest Rate Derivatives The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date March 31, December 31, $ 100,000 0.8055% One-Month LIBOR 9/2/2014 9/1/2016 $ (137 ) $ (148 ) 100,000 0.8100% One-Month LIBOR 9/2/2014 9/1/2016 (139 ) (151 ) 100,000 1.6730% One-Month LIBOR 9/1/2015 8/1/2019 (2,738 ) (1,217 ) 100,000 1.7300% One-Month LIBOR 9/1/2015 8/1/2019 (2,929 ) (1,429 ) 13,853 (1) 1.3900% One-Month LIBOR 10/13/2015 10/1/2020 (242 ) 53 100,000 1.9013% One-Month LIBOR 9/1/2016 12/1/2022 (3,601 ) (138 ) 100,000 1.9050% One-Month LIBOR 9/1/2016 12/1/2022 (3,511 ) (45 ) 50,000 1.9079% One-Month LIBOR 9/1/2016 12/1/2022 (1,775 ) (32 ) $ (15,072 ) $ (3,107 ) (1) The notional amount of this instrument is scheduled to amortize to $12.1 million . Each of the interest rate swaps set forth in the table above was designated as a cash flow hedge of interest rate risk. The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands): Fair Value at Derivatives Balance Sheet Location March 31, December 31, 2015 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets $ — $ 53 Interest rate swaps designated as cash flow hedges Interest rate derivatives (15,072 ) (3,160 ) The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): For the Three Months Ended March 31, 2016 2015 Amount of (loss) gain recognized in accumulated other comprehensive loss (“AOCL”) (effective portion) $ (11,284 ) $ (3,474 ) Amount of losses reclassified from AOCL into interest expense (effective portion) 870 773 Amount of loss recognized in interest expense (ineffective portion) 1,551 — Over the next 12 months, we estimate that approximately $4.5 million of losses will be reclassified from AOCL as an increase to interest expense. We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. These agreements also incorporate the loan covenant provisions of our indebtedness with a lender affiliate of the derivative counterparties. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of March 31, 2016 , the fair value of interest rate derivatives in a liability position related to these agreements was $15.8 million , excluding the effects of accrued interest and credit valuation adjustments. As of March 31, 2016 , we had not posted any collateral related to these agreements. We are not in default with any of these provisions. If we breached any of these provisions, we could be required to settle our obligations under the agreements at their termination value of $16.1 million . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The table below sets forth the activity for redeemable noncontrolling interests in our LW Redstone, LLC and Stevens Investors, LLC joint ventures described in Note 5 (in thousands): For the Three Months Ended March 31, 2016 2015 Beginning balance $ 19,218 $ 18,417 Contributions from noncontrolling interests 22,779 — Distributions to noncontrolling interests (20,526 ) (157 ) Net income attributable to noncontrolling interests 560 562 Adjustment to arrive at fair value of interests 302 73 Ending balance $ 22,333 $ 18,895 |
Information by Business Segment
Information by Business Segment | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Information by Business Segment | Information by Business Segment Our segment reporting includes the following segments: Defense/IT Locations; Regional Office; our operating wholesale data center; and other. Our segment reporting also includes reporting for Defense/IT Locations sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (referred to herein as “Fort Meade/BW Corridor”); Northern Virginia Defense/IT Locations; Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy Support Locations”), which included properties proximate to the Washington Navy Yard, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; Redstone Arsenal (in Huntsville); and data center shells (properties leased to tenants to be operated as data centers in which the tenants generally fund the costs for the power, fiber connectivity and data center infrastructure). The table below reports segment financial information for our reportable segments (in thousands). We measure the performance of our segments through the measure we define as NOI from real estate operations, which is derived by subtracting property operating expenses from revenues from real estate operations. Operating Office Property Segments Defense/Information Technology Locations Fort Meade/BW Corridor Northern Virginia Defense/IT Lackland Air Force Base Navy Support Locations Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Operating Other Total Three Months Ended March 31, 2016 Revenues from real estate operations $ 62,509 $ 12,116 $ 10,225 $ 6,934 $ 3,116 $ 6,330 $ 101,230 $ 23,502 $ 6,493 $ 1,862 $ 133,087 Property operating expenses 23,246 4,541 5,420 3,524 978 810 38,519 9,831 2,661 864 51,875 NOI from real estate operations $ 39,263 $ 7,575 $ 4,805 $ 3,410 $ 2,138 $ 5,520 $ 62,711 $ 13,671 $ 3,832 $ 998 $ 81,212 Additions to long-lived assets $ 6,519 $ 3,078 $ — $ 1,270 $ 618 $ — $ 11,485 $ 2,759 $ — $ 157 $ 14,401 Transfers from non-operating properties $ 35,751 $ (94 ) $ 6 $ — $ 211 $ 26,097 $ 61,971 $ 82 $ 51 $ (11 ) $ 62,093 Segment assets at March 31, 2016 $ 1,319,444 $ 407,199 $ 133,757 $ 195,306 $ 107,693 $ 227,808 $ 2,391,207 $ 603,662 $ 240,484 $ 70,039 $ 3,305,392 Three Months Ended March 31, 2015 Revenues from real estate operations $ 61,184 $ 11,046 $ 8,665 $ 7,265 $ 2,446 $ 5,114 $ 95,720 $ 21,960 $ 3,035 $ 1,995 $ 122,710 Property operating expenses 23,516 5,616 4,763 3,398 829 695 38,817 8,748 2,212 909 50,686 NOI from real estate operations $ 37,668 $ 5,430 $ 3,902 $ 3,867 $ 1,617 $ 4,419 $ 56,903 $ 13,212 $ 823 $ 1,086 $ 72,024 Additions to long-lived assets $ 3,445 $ 787 $ — $ 1,593 $ 83 $ — $ 5,908 $ 65,934 $ 30 $ 99 $ 71,971 Transfers from non-operating properties $ 12,930 $ 43,473 $ 31,091 $ — $ 2,997 $ 15,097 $ 105,588 $ 11,507 $ 177 $ — $ 117,272 Segment assets at March 31, 2015 $ 1,267,663 $ 412,410 $ 133,197 $ 195,249 $ 99,335 $ 170,209 $ 2,278,063 $ 597,389 $ 162,170 $ 72,758 $ 3,110,380 The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 Segment revenues from real estate operations $ 133,087 $ 122,710 Construction contract and other service revenues 11,220 38,324 Total revenues $ 144,307 $ 161,034 The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 Segment property operating expenses $ 51,875 $ 50,686 Less: Property operating expenses from discontinued operations — (5 ) Total property operating expenses $ 51,875 $ 50,681 As previously discussed, we provide real estate services such as property management and construction and development services primarily for our properties but also for third parties. The primary manner in which we evaluate the operating performance of our service activities is through a measure we define as net operating income from service operations (“NOI from service operations”), which is based on the net of revenues and expenses from these activities. Construction contract and other service revenues and expenses consist primarily of subcontracted costs that are reimbursed to us by the customer along with a management fee. The operating margins from these activities are small relative to the revenue. We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations. The table below sets forth the computation of our NOI from service operations (in thousands): For the Three Months Ended March 31, 2016 2015 Construction contract and other service revenues $ 11,220 $ 38,324 Construction contract and other service expenses (10,694 ) (37,498 ) NOI from service operations $ 526 $ 826 The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to income from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 NOI from real estate operations $ 81,212 $ 72,024 NOI from service operations 526 826 Interest and other income 1,156 1,283 Equity in income of unconsolidated entities 10 25 Income tax benefit (expense) 8 (55 ) Other adjustments: — Depreciation and other amortization associated with real estate operations (34,527 ) (31,599 ) Impairment losses (2,446 ) — General, administrative and leasing expenses (11,883 ) (7,891 ) Business development expenses and land carry costs (2,418 ) (2,790 ) Interest expense (23,559 ) (20,838 ) NOI from discontinued operations — 5 Gain (loss) on early extinguishment of debt 17 (3 ) Income from continuing operations $ 8,096 $ 10,987 The following table reconciles our segment assets to the consolidated total assets of COPT and subsidiaries (in thousands): March 31, March 31, Segment assets $ 3,305,392 $ 3,110,380 Non-operating property assets 444,334 496,930 Other assets 188,182 164,341 Total COPT consolidated assets $ 3,937,908 $ 3,771,651 The accounting policies of the segments are the same as those used to prepare our consolidated financial statements, except that discontinued operations are not presented separately for segment purposes. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, impairment losses, loss on early extinguishment of debt and gain on sales of real estate to our real estate segments since they are not included in the measure of segment profit reviewed by management. We also did not allocate general, administrative and leasing expenses, business development expenses and land carry costs, interest and other income, equity in income of unconsolidated entities, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments. |
Share-Based Compensation and Ot
Share-Based Compensation and Other Compensation Matters | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation and Other Compensation Matters | Share-Based Compensation and Other Compensation Matters Performance Share Units (“PSUs”) On March 1, 2016, our Board of Trustees granted 26,299 PSUs with an aggregate grant date fair value of $1.0 million to executives. The PSUs have a performance period beginning on January 1, 2016 and concluding on the earlier of December 31, 2018 or the date of: (1) termination by us without cause, death or disability of the executive or constructive discharge of the executive (collectively, “qualified termination”); or (2) a sale event. The number of PSUs earned (“earned PSUs”) at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return relative to a peer group of companies, as set forth in the following schedule: 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 If the percentile rank exceeds the 25th percentile and is between two of the percentile ranks set forth in the table above, then the percentage of the earned PSUs will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. At the end of the performance period, we, in settlement of the award, will issue a number of fully-vested COPT common shares equal to the sum of: • 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. If a performance period ends due to a sale event or qualified termination, the number of earned PSUs is prorated based on the portion of the three -year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all PSUs are forfeited. PSUs do not carry voting rights. We computed a grant date fair value of $38.21 per PSU using a Monte Carlo model, which included assumptions of, among other things, the following: baseline common share value of $23.90 ; expected volatility for COPT common shares of 20.4% ; and a risk-free interest rate of 0.96% . We are recognizing the grant date fair value in connection with these PSU awards over the period commencing on March 1, 2016 and ending on December 31, 2018. Restricted Shares During the three months ended March 31, 2016 , certain employees were granted a total of 184,237 restricted common shares with an aggregate grant date fair value of $4.4 million (weighted average of $23.90 per share). Restricted shares granted to employees vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employees remain employed by us. During the three months ended March 31, 2016 , forfeiture restrictions lapsed on 137,593 previously issued common shares; these shares had a weighted average grant date fair value of $27.47 per share, and the aggregate intrinsic value of the shares on the vesting dates was $3.3 million . Executive Transition Costs Our Board of Trustees appointed Stephen E. Budorick, our Executive Vice President and Chief Operating Officer since September 2011, to become our President and Chief Executive Officer effective May 12, 2016, the date of the Company’s 2016 Annual Meeting of Shareholders. On that date, Roger A. Waesche, Jr., our current President and Chief Executive Officer, will leave the Company to pursue other interests, and he was not nominated for reelection as a Trustee. The Board expects to appoint Mr. Budorick to our Board of Trustees after the 2016 Annual Meeting of Shareholders. In addition, our Executive Vice President, Development & Construction Services, Wayne H. Lingafelter, departed the Company to pursue other interests effective March 31, 2016. We recognized executive transition costs of approximately $4.1 million in the three months ended March 31, 2016 primarily in connection with the departure of Mr. Waesche and Mr. Lingafelter. |
Earnings Per Share ("EPS") and
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) | Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) COPT and Subsidiaries EPS We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that: • 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 COPT 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. Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data): For the Three Months Ended March 31, 2016 2015 Numerator: Income from continuing operations $ 8,096 $ 10,987 Gain on sales of real estate, net — 3,986 Preferred share dividends (3,552 ) (3,552 ) Income from continuing operations attributable to noncontrolling interests (1,270 ) (1,392 ) Income from continuing operations attributable to share-based compensation awards (118 ) (122 ) Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders $ 3,156 $ 9,907 Discontinued operations — (238 ) Discontinued operations attributable to noncontrolling interests — 12 Numerator for basic and diluted EPS on net income attributable to COPT common shareholders $ 3,156 $ 9,681 Denominator (all weighted averages): Denominator for basic EPS (common shares) 94,203 93,199 Dilutive effect of share-based compensation awards 95 198 Denominator for diluted EPS (common shares) 94,298 93,397 Basic EPS: Income from continuing operations attributable to COPT common shareholders $ 0.03 $ 0.10 Discontinued operations attributable to COPT common shareholders 0.00 0.00 Net income attributable to COPT common shareholders $ 0.03 $ 0.10 Diluted EPS: Income from continuing operations attributable to COPT common shareholders $ 0.03 $ 0.10 Discontinued operations attributable to COPT common shareholders 0.00 0.00 Net income attributable to COPT common shareholders $ 0.03 $ 0.10 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): Weighted Average Shares Excluded from Denominator For the Three Months Ended March 31, 2016 2015 Conversion of common units 3,677 3,732 Conversion of Series I Preferred Units 176 176 Conversion of Series K Preferred Shares 434 434 The following share-based compensation securities were excluded from the computation of diluted EPS because their effects were antidilutive: • weighted average restricted shares and deferred share awards for the three months ended March 31, 2016 and 2015 of 405,000 and 400,000 , respectively; and • weighted average options for the three months ended March 31, 2016 and 2015 of 379,000 and 474,000 , respectively. We had outstanding senior notes, which we redeemed in April 2015, with an exchange settlement feature, but such notes did not affect our diluted EPS reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods. COPLP and Subsidiaries EPU We present both basic and diluted EPU. We compute basic EPU by dividing net income available to common unitholders allocable to unrestricted common units under the two-class method by the weighted average number of unrestricted common units outstanding during the period. Our computation of diluted EPU is similar except that: • the denominator is increased to include: (1) the weighted average number of potential additional common units that would have been outstanding if securities that are convertible into our common units were converted; and (2) the effect of dilutive potential common units 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 units that we added to the denominator. Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data): For the Three Months Ended March 31, 2016 2015 Numerator: Income from continuing operations $ 8,096 $ 10,987 Gain on sales of real estate, net — 3,986 Preferred unit distributions (3,717 ) (3,717 ) Income from continuing operations attributable to noncontrolling interests (979 ) (821 ) Income from continuing operations attributable to share-based compensation awards (118 ) (122 ) Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders $ 3,282 $ 10,313 Discontinued operations — (238 ) Discontinued operations attributable to noncontrolling interests — 3 Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders $ 3,282 $ 10,078 Denominator (all weighted averages): Denominator for basic EPU (common units) 97,880 96,931 Dilutive effect of share-based compensation awards 95 198 Denominator for diluted EPU (common units) 97,975 97,129 Basic EPU: Income from continuing operations attributable to COPLP common unitholders $ 0.03 $ 0.10 Discontinued operations attributable to COPLP common unitholders 0.00 0.00 Net income attributable to COPLP common unitholders $ 0.03 $ 0.10 Diluted EPU: Income from continuing operations attributable to COPLP common unitholders $ 0.03 $ 0.10 Discontinued operations attributable to COPLP common unitholders 0.00 0.00 Net income attributable to COPLP common unitholders $ 0.03 $ 0.10 Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands): Weighted Average Units Excluded from Denominator For the Three Months Ended March 31, 2016 2015 Conversion of Series I preferred units 176 176 Conversion of Series K preferred units 434 434 The following share-based compensation securities were excluded from the computation of diluted EPU because their effects were antidilutive: • weighted average restricted units and deferred share awards for the three months ended March 31, 2016 and 2015 of 405,000 and 400,000 , respectively; and • weighted average options for the three months ended March 31, 2016 and 2015 of 379,000 and 474,000 , respectively. We had outstanding senior notes, which we redeemed in April 2015, with an exchange settlement feature, but such notes did not affect our diluted EPU reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the normal course of business, we are involved in legal actions arising from our ownership and administration of properties. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management does not anticipate that any liabilities that may result from such proceedings will have a materially adverse effect on our financial position, operations or liquidity. Our assessment of the potential outcomes of these matters involves significant judgment and is subject to change based on future developments. Environmental We are subject to various Federal, state and local environmental regulations related to our property ownership and operation. We have performed environmental assessments of our properties, the results of which have not revealed any environmental liability that we believe would have a materially adverse effect on our financial position, operations or liquidity. Tax Incremental Financing Obligation In August 2010, Anne Arundel County, Maryland issued $30 million in tax incremental financing bonds to third-party investors in order to finance public improvements needed in connection with our project known as National Business Park North. The real estate taxes on increases in assessed value of a development district encompassing National Business Park North are to be transferred to a special fund pledged to the repayment of the bonds. We recognized a $1.9 million liability through March 31, 2016 representing our estimated obligation to fund through a special tax any future shortfalls between debt service on the bonds and real estate taxes available to repay the bonds. Operating Leases We are obligated as lessee under operating leases (mostly ground leases) with various expiration dates extending to the year 2100. Future minimum rental payments due under the terms of these operating leases as of March 31, 2016 follow (in thousands): Year Ending December 31, 2016 (1) $ 896 2017 1,123 2018 1,076 2019 1,051 2020 1,067 Thereafter 86,800 $ 92,013 (1) Represents nine months ending December 31, 2016. Contractual Obligations We had amounts remaining to be incurred under various contractual obligations as of March 31, 2016 that included the following: • new development and redevelopment obligations of $60.1 million ; • capital expenditures for operating properties of $44.9 million ; • third party construction and development of $17.7 million ; and • purchase obligations of $3.0 million . Environmental Indemnity Agreement In connection with a lease and subsequent sale in 2008 and 2010 of three properties in Dayton, New Jersey, we agreed to provide certain environmental indemnifications. The prior owner of the properties, a Fortune 100 company that is responsible for groundwater contamination at such properties, previously agreed to indemnify us for (1) direct losses incurred in connection with the contamination and (2) its failure to perform remediation activities required by the State of New Jersey, up to the point that the state declares the remediation to be complete. Under the environmental indemnification agreement, we agreed to the following: • 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 through 2025. 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. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The COPT consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities. We eliminate all intercompany balances and transactions in consolidation. We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. We use the cost method of accounting when we own an interest in an entity and cannot exert significant influence over its operations. These interim financial statements should be read together with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. All adjustments are of a normal recurring nature. The consolidated financial statements have been prepared using the accounting policies described in our 2015 Annual Report on Form 10-K. |
Recent Accounting Pronouncement | Recent Accounting Pronouncements We adopted guidance issued by the Financial Accounting Standards Board (“FASB”) effective January 1, 2016 regarding the presentation of extraordinary and unusual items in statements of operations. This guidance eliminates the concept of extraordinary items. However, the presentation and disclosure requirements for items that are either unusual in nature or infrequent in occurrence remain and will be expanded to include items that are both unusual in nature and infrequent in occurrence. Our adoption of this guidance did not affect on our reported consolidated financial statements. We adopted guidance issued by the FASB effective January 1, 2016 modifying the analysis that must be performed by us in determining whether we should consolidate certain types of legal entities. The guidance did not amend the existing disclosure requirements for VIEs or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, COPLP is considered a variable interest entity of COPT. As COPLP was already consolidated in the balance sheets of COPT, the identification of COPLP as a variable interest entity had no impact on the consolidated financial statements. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption. In addition, there were no voting interest entities under prior existing guidance determined to be variable interest entities under the revised guidance. We adopted effective January 1, 2016 guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the statement of operations or disclosed in the notes. Our adoption of this guidance did not affect our reported consolidated financial statements. In May 2014, the FASB issued guidance regarding the recognition of revenue from contracts with customers. Under this guidance, an entity will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance requires improved disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We are required to adopt this guidance for our annual and interim periods beginning January 1, 2018 using one of two methods: retrospective restatement for each reporting period presented at the time of adoption, or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. We are currently assessing the financial impact of this guidance on our consolidated financial statements. In February 2016, the FASB issued guidance that sets forth principles for the recognition, measurement, presentation and disclosure of leases. This guidance requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. The resulting classification determines whether the lease expense is recognized based on an effective interest method or straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The guidance requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. This guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the financial impact of this guidance on our consolidated financial statements. In March 2016, the FASB issued guidance intended to simplify certain aspects of the accounting for employee based share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the consolidated statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. We are currently assessing the financial impact of this guidance on our consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities measured on recurring basis | The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of March 31, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Liabilities: Interest rate derivatives $ — $ 15,072 $ — $ 15,072 The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of March 31, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: Marketable securities in deferred compensation plan (1) Mutual funds $ 5,580 $ — $ — $ 5,580 Other 91 — — 91 Total assets $ 5,671 $ — $ — $ 5,671 Liabilities: Deferred compensation plan liability (2) $ — $ 5,671 $ — $ 5,671 Interest rate derivatives — 15,072 — 15,072 Total liabilities $ — $ 20,743 $ — $ 20,743 (1) Included in the line entitled “restricted cash and marketable securities” on COPT’s consolidated balance sheet. (2) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. |
Schedule of fair value hierarchy of impaired properties and other assets associated with such properties | The table below sets forth the fair value hierarchy of the valuation technique we used to determine nonrecurring fair value measurements of these assets as of March 31, 2016 (dollars in thousands): Fair Values as of March 31, 2016 Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Assets held for sale, net (1) $ — $ — $ 14,886 $ 14,886 (1) Represents estimated fair values less costs to sell. Fair values were derived from bids for the properties that were deemed to be indicative of value. |
Properties, Net (Tables)
Properties, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands): March 31, December 31, Land $ 464,674 $ 463,305 Buildings and improvements 3,111,871 3,157,587 Less: Accumulated depreciation (713,283 ) (700,363 ) Operating properties, net $ 2,863,262 $ 2,920,529 |
Schedule of projects in development or held for future development | Projects in development or held for future development consisted of the following (in thousands): March 31, December 31, Land $ 220,834 $ 207,774 Development in progress, excluding land 195,335 221,445 Projects in development or held for future development $ 416,169 $ 429,219 |
Components of assets held for sale | The table below sets forth the components of assets held for sale on our consolidated balance sheet for these properties (in thousands): March 31, 2016 December 31, 2015 Properties, net $ 199,481 $ 90,188 Deferred rent receivable 12,542 2,891 Intangible assets on real estate acquisitions, net 1,591 1,591 Deferred leasing costs, net 9,228 1,391 Lease incentives, net 3,055 721 Assets held for sale, net $ 225,897 $ 96,782 |
Pro Forma results | The pro forma financial information was prepared for comparative purposes only and is not necessarily indicative of what would have occurred had these acquisitions been made at that time or of results which may occur in the future (in thousands, except per share amounts). For the Three Months Ended March 31, 2015 (Unaudited) Pro forma total revenues $ 169,925 Pro forma net income attributable to COPT common shareholders $ 10,847 Pro forma EPS: Basic $ 0.11 Diluted $ 0.11 |
Real Estate Joint Ventures (Tab
Real Estate Joint Ventures (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of information related to investments in consolidated real estate joint ventures | The table below sets forth information pertaining to our investments in consolidated real estate joint ventures as of March 31, 2016 (dollars in thousands): Nominal Ownership March 31, 2016 (1) Date % as of Total Encumbered Total Acquired 3/31/2016 Nature of Activity Assets Assets Liabilities LW Redstone Company, LLC 3/23/2010 85% Development and operation of real estate (2) $ 149,301 $ 82,018 $ 53,356 M Square Associates, LLC 6/26/2007 50% Development and operation of real estate (3) 56,333 47,820 37,462 Stevens Investors, LLC 8/11/2015 95% Development of real estate (4) 37,724 — 6,937 $ 243,358 $ 129,838 $ 97,755 (1) Excludes amounts eliminated in consolidation. (2) This joint venture’s properties are in Huntsville, Alabama. (3) This joint venture’s properties are in College Park, Maryland. (4) This joint venture’s property is in Washington, DC. |
Investing Receivables (Tables)
Investing Receivables (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of investing receivables | Investing receivables, including accrued interest thereon, consisted of the following (in thousands): March 31, December 31, Notes receivable from the City of Huntsville $ 45,998 $ 44,875 Other investing loans receivable 3,000 3,000 $ 48,998 $ 47,875 |
Prepaid Expenses and Other As28
Prepaid Expenses and Other Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 15,516 $ 23,009 Lease incentives, net 8,375 11,133 Furniture, fixtures and equipment, net 5,669 6,004 Construction contract costs incurred in excess of billings 5,232 3,261 Deferred financing costs, net (1) 5,182 5,867 Deferred tax asset, net (2) 3,474 3,467 Equity method investments 1,646 1,636 Other assets 4,230 5,647 Prepaid expenses and other assets, net $ 49,324 $ 60,024 (1) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. (2) Includes a valuation allowance of $2.1 million . |
Debt, Net (Tables)
Debt, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of Scheduled Maturity March 31, December 31, Stated Interest Rates as of as of March 31, 2016 March 31, 2016 Mortgage and Other Secured Loans: Fixed rate mortgage loans (2) $ 279,782 $ 281,208 3.96% - 7.87% (3) 2016-2024 Variable rate secured loans 49,488 49,792 LIBOR + 1.85% - 2.00% (4) 2016-2020 Total mortgage and other secured loans 329,270 331,000 Revolving Credit Facility 107,000 43,500 LIBOR + 0.875% to 1.60% (5) May 2019 Term Loan Facilities (6) 516,205 515,902 LIBOR + 0.90% to 2.60% (7) 2019-2022 Unsecured Senior Notes 3.600%, $350,000 aggregate principal 346,817 346,714 3.60% (8) May 2023 5.250%, $250,000 aggregate principal 245,840 245,731 5.25% (9) February 2024 3.700%, $300,000 aggregate principal 297,493 297,378 3.70% (10) June 2021 5.000%, $300,000 aggregate principal 296,105 296,019 5.00% (11) July 2025 Unsecured notes payable 1,482 1,508 0% (12) 2026 Total debt, net $ 2,140,212 $ 2,077,752 (1) The carrying values of our loans other than the Revolving Credit Facility reflect net deferred financing costs of $7.5 million as of March 31, 2016 and $8.0 million as of December 31, 2015 . (2) 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 $489,000 as of March 31, 2016 and $514,000 as of December 31, 2015 . (3) The weighted average interest rate on our fixed rate mortgage loans was 6.08% as of March 31, 2016 . (4) The weighted average interest rate on our variable rate secured loans was 2.40% as of March 31, 2016 . (5) The weighted average interest rate on the Revolving Credit Facility was 1.60% as of March 31, 2016 . (6) An additional $150 million in borrowings is available to be drawn under a term loan. In addition, we have the ability to borrow an additional $430.0 million in the aggregate under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. (7) The weighted average interest rate on these loans was 2.08% as of March 31, 2016 . (8) The carrying value of these notes reflects an unamortized discount totaling $2.2 million as of March 31, 2016 and December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 3.70% . (9) The carrying value of these notes reflects an unamortized discount totaling $3.7 million as of March 31, 2016 and $3.8 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 5.49% . (10) The carrying value of these notes reflects an unamortized discount totaling $2.0 million as of March 31, 2016 and $2.1 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 3.85% . (11) The carrying value of these notes reflects an unamortized discount totaling $3.2 million as of March 31, 2016 and $3.3 million as of December 31, 2015 . The effective interest rate under the notes, including amortization of the issuance costs, was 5.15% . (12) 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 $530,000 as of March 31, 2016 and $554,000 as of December 31, 2015 . |
Schedule of the fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands): March 31, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,186,255 $ 1,216,295 $ 1,185,842 $ 1,211,658 Other fixed-rate debt 281,264 289,254 282,716 291,991 Variable-rate debt 672,693 677,203 609,194 610,987 $ 2,140,212 $ 2,182,752 $ 2,077,752 $ 2,114,636 |
Interest Rate Derivatives (Tabl
Interest Rate Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of key terms and fair values of interest rate swap derivatives | The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date March 31, December 31, $ 100,000 0.8055% One-Month LIBOR 9/2/2014 9/1/2016 $ (137 ) $ (148 ) 100,000 0.8100% One-Month LIBOR 9/2/2014 9/1/2016 (139 ) (151 ) 100,000 1.6730% One-Month LIBOR 9/1/2015 8/1/2019 (2,738 ) (1,217 ) 100,000 1.7300% One-Month LIBOR 9/1/2015 8/1/2019 (2,929 ) (1,429 ) 13,853 (1) 1.3900% One-Month LIBOR 10/13/2015 10/1/2020 (242 ) 53 100,000 1.9013% One-Month LIBOR 9/1/2016 12/1/2022 (3,601 ) (138 ) 100,000 1.9050% One-Month LIBOR 9/1/2016 12/1/2022 (3,511 ) (45 ) 50,000 1.9079% One-Month LIBOR 9/1/2016 12/1/2022 (1,775 ) (32 ) $ (15,072 ) $ (3,107 ) (1) The notional amount of this instrument is scheduled to amortize to $12.1 million . |
Schedule of fair value and balance sheet classification of interest rate derivatives | The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands): Fair Value at Derivatives Balance Sheet Location March 31, December 31, 2015 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets $ — $ 53 Interest rate swaps designated as cash flow hedges Interest rate derivatives (15,072 ) (3,160 ) |
Schedule of effect of interest rate derivatives on consolidated statements of operations and comprehensive income | The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): For the Three Months Ended March 31, 2016 2015 Amount of (loss) gain recognized in accumulated other comprehensive loss (“AOCL”) (effective portion) $ (11,284 ) $ (3,474 ) Amount of losses reclassified from AOCL into interest expense (effective portion) 870 773 Amount of loss recognized in interest expense (ineffective portion) 1,551 — |
Redeemable Noncontrolling Int31
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Schedule of activity for redeemable noncontrolling interest | The table below sets forth the activity for redeemable noncontrolling interests in our LW Redstone, LLC and Stevens Investors, LLC joint ventures described in Note 5 (in thousands): For the Three Months Ended March 31, 2016 2015 Beginning balance $ 19,218 $ 18,417 Contributions from noncontrolling interests 22,779 — Distributions to noncontrolling interests (20,526 ) (157 ) Net income attributable to noncontrolling interests 560 562 Adjustment to arrive at fair value of interests 302 73 Ending balance $ 22,333 $ 18,895 |
Information by Business Segme32
Information by Business Segment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment financial information for real estate operations | Operating Office Property Segments Defense/Information Technology Locations Fort Meade/BW Corridor Northern Virginia Defense/IT Lackland Air Force Base Navy Support Locations Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Operating Other Total Three Months Ended March 31, 2016 Revenues from real estate operations $ 62,509 $ 12,116 $ 10,225 $ 6,934 $ 3,116 $ 6,330 $ 101,230 $ 23,502 $ 6,493 $ 1,862 $ 133,087 Property operating expenses 23,246 4,541 5,420 3,524 978 810 38,519 9,831 2,661 864 51,875 NOI from real estate operations $ 39,263 $ 7,575 $ 4,805 $ 3,410 $ 2,138 $ 5,520 $ 62,711 $ 13,671 $ 3,832 $ 998 $ 81,212 Additions to long-lived assets $ 6,519 $ 3,078 $ — $ 1,270 $ 618 $ — $ 11,485 $ 2,759 $ — $ 157 $ 14,401 Transfers from non-operating properties $ 35,751 $ (94 ) $ 6 $ — $ 211 $ 26,097 $ 61,971 $ 82 $ 51 $ (11 ) $ 62,093 Segment assets at March 31, 2016 $ 1,319,444 $ 407,199 $ 133,757 $ 195,306 $ 107,693 $ 227,808 $ 2,391,207 $ 603,662 $ 240,484 $ 70,039 $ 3,305,392 Three Months Ended March 31, 2015 Revenues from real estate operations $ 61,184 $ 11,046 $ 8,665 $ 7,265 $ 2,446 $ 5,114 $ 95,720 $ 21,960 $ 3,035 $ 1,995 $ 122,710 Property operating expenses 23,516 5,616 4,763 3,398 829 695 38,817 8,748 2,212 909 50,686 NOI from real estate operations $ 37,668 $ 5,430 $ 3,902 $ 3,867 $ 1,617 $ 4,419 $ 56,903 $ 13,212 $ 823 $ 1,086 $ 72,024 Additions to long-lived assets $ 3,445 $ 787 $ — $ 1,593 $ 83 $ — $ 5,908 $ 65,934 $ 30 $ 99 $ 71,971 Transfers from non-operating properties $ 12,930 $ 43,473 $ 31,091 $ — $ 2,997 $ 15,097 $ 105,588 $ 11,507 $ 177 $ — $ 117,272 Segment assets at March 31, 2015 $ 1,267,663 $ 412,410 $ 133,197 $ 195,249 $ 99,335 $ 170,209 $ 2,278,063 $ 597,389 $ 162,170 $ 72,758 $ 3,110,380 |
Schedule of reconciliation of segment revenues to total revenues | The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 Segment revenues from real estate operations $ 133,087 $ 122,710 Construction contract and other service revenues 11,220 38,324 Total revenues $ 144,307 $ 161,034 |
Schedule of reconciliation of segment property operating expenses to total property operating expenses | The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 Segment property operating expenses $ 51,875 $ 50,686 Less: Property operating expenses from discontinued operations — (5 ) Total property operating expenses $ 51,875 $ 50,681 |
Schedule of computation of net operating income from service operations | The table below sets forth the computation of our NOI from service operations (in thousands): For the Three Months Ended March 31, 2016 2015 Construction contract and other service revenues $ 11,220 $ 38,324 Construction contract and other service expenses (10,694 ) (37,498 ) NOI from service operations $ 526 $ 826 |
Schedule of reconciliation of net operating income from real estate operations and service operations to (loss) income from continuing operations | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to income from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended March 31, 2016 2015 NOI from real estate operations $ 81,212 $ 72,024 NOI from service operations 526 826 Interest and other income 1,156 1,283 Equity in income of unconsolidated entities 10 25 Income tax benefit (expense) 8 (55 ) Other adjustments: — Depreciation and other amortization associated with real estate operations (34,527 ) (31,599 ) Impairment losses (2,446 ) — General, administrative and leasing expenses (11,883 ) (7,891 ) Business development expenses and land carry costs (2,418 ) (2,790 ) Interest expense (23,559 ) (20,838 ) NOI from discontinued operations — 5 Gain (loss) on early extinguishment of debt 17 (3 ) Income from continuing operations $ 8,096 $ 10,987 |
Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to the consolidated total assets of COPT and subsidiaries (in thousands): March 31, March 31, Segment assets $ 3,305,392 $ 3,110,380 Non-operating property assets 444,334 496,930 Other assets 188,182 164,341 Total COPT consolidated assets $ 3,937,908 $ 3,771,651 |
Share-Based Compensation and 33
Share-Based Compensation and Other Compensation Matters (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of payouts for defined performance under performance-based awards of share-based compensation | The number of PSUs earned (“earned PSUs”) at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return relative to a peer group of companies, as set forth in the following schedule: 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 |
Earnings Per Share ("EPS") an34
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Line Items] | |
Summary of calculation of numerator and denominator in basic and diluted earnings 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): For the Three Months Ended March 31, 2016 2015 Numerator: Income from continuing operations $ 8,096 $ 10,987 Gain on sales of real estate, net — 3,986 Preferred share dividends (3,552 ) (3,552 ) Income from continuing operations attributable to noncontrolling interests (1,270 ) (1,392 ) Income from continuing operations attributable to share-based compensation awards (118 ) (122 ) Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders $ 3,156 $ 9,907 Discontinued operations — (238 ) Discontinued operations attributable to noncontrolling interests — 12 Numerator for basic and diluted EPS on net income attributable to COPT common shareholders $ 3,156 $ 9,681 Denominator (all weighted averages): Denominator for basic EPS (common shares) 94,203 93,199 Dilutive effect of share-based compensation awards 95 198 Denominator for diluted EPS (common shares) 94,298 93,397 Basic EPS: Income from continuing operations attributable to COPT common shareholders $ 0.03 $ 0.10 Discontinued operations attributable to COPT common shareholders 0.00 0.00 Net income attributable to COPT common shareholders $ 0.03 $ 0.10 Diluted EPS: Income from continuing operations attributable to COPT common shareholders $ 0.03 $ 0.10 Discontinued operations attributable to COPT common shareholders 0.00 0.00 Net income attributable to COPT common shareholders $ 0.03 $ 0.10 |
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): Weighted Average Shares Excluded from Denominator For the Three Months Ended March 31, 2016 2015 Conversion of common units 3,677 3,732 Conversion of Series I Preferred Units 176 176 Conversion of Series K Preferred Shares 434 434 |
Corporate Office Properties, L.P. | |
Earnings Per Share [Line Items] | |
Summary of calculation of numerator and denominator in basic and diluted earnings per share | Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data): For the Three Months Ended March 31, 2016 2015 Numerator: Income from continuing operations $ 8,096 $ 10,987 Gain on sales of real estate, net — 3,986 Preferred unit distributions (3,717 ) (3,717 ) Income from continuing operations attributable to noncontrolling interests (979 ) (821 ) Income from continuing operations attributable to share-based compensation awards (118 ) (122 ) Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders $ 3,282 $ 10,313 Discontinued operations — (238 ) Discontinued operations attributable to noncontrolling interests — 3 Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders $ 3,282 $ 10,078 Denominator (all weighted averages): Denominator for basic EPU (common units) 97,880 96,931 Dilutive effect of share-based compensation awards 95 198 Denominator for diluted EPU (common units) 97,975 97,129 Basic EPU: Income from continuing operations attributable to COPLP common unitholders $ 0.03 $ 0.10 Discontinued operations attributable to COPLP common unitholders 0.00 0.00 Net income attributable to COPLP common unitholders $ 0.03 $ 0.10 Diluted EPU: Income from continuing operations attributable to COPLP common unitholders $ 0.03 $ 0.10 Discontinued operations attributable to COPLP common unitholders 0.00 0.00 Net income attributable to COPLP common unitholders $ 0.03 $ 0.10 |
Schedule of securities excluded from computation of diluted earnings per share | Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands): Weighted Average Units Excluded from Denominator For the Three Months Ended March 31, 2016 2015 Conversion of Series I preferred units 176 176 Conversion of Series K preferred units 434 434 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rental payments for operating leases | Future minimum rental payments due under the terms of these operating leases as of March 31, 2016 follow (in thousands): Year Ending December 31, 2016 (1) $ 896 2017 1,123 2018 1,076 2019 1,051 2020 1,067 Thereafter 86,800 $ 92,013 (1) Represents nine months ending December 31, 2016. |
Organization (Details)
Organization (Details) ft² in Thousands | Mar. 31, 2016aft²PropertyMW |
Properties under or approved for redevelopment | |
Investments in real estate | |
Number of real estate properties | 3 |
Area of real estate property (in square feet or acres) | ft² | 104 |
Operating office properties | |
Investments in real estate | |
Number of real estate properties | 179 |
Area of real estate property (in square feet or acres) | ft² | 18,300 |
Operating office properties | Single-tenant data centers | |
Investments in real estate | |
Number of real estate properties | 10 |
Office properties under, or contractually committed for, construction or approved for redevelopment | |
Investments in real estate | |
Number of real estate properties | 11 |
Area of real estate property (in square feet or acres) | ft² | 1,300 |
Partially operational properties | Properties under or approved for redevelopment | |
Investments in real estate | |
Number of real estate properties | 1 |
Land controlled for future development | |
Investments in real estate | |
Area of real estate property (in square feet or acres) | a | 1,358 |
Developable square feet | ft² | 16,500 |
Wholesale data centers | |
Investments in real estate | |
Critical load (in megawatts) | MW | 19.25 |
Organization (Details 2)
Organization (Details 2) - Corporate Office Properties, L.P. | 3 Months Ended |
Mar. 31, 2016 | |
Common Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 96.30% |
Preferred Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 95.50% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)joint_venture | |
Assets and liabilities measured at fair value on a recurring basis | |
Number of joint ventures with redeemable noncontrolling interests | joint_venture | 2 |
Deferred compensation plan | Management | |
Assets and liabilities measured at fair value on a recurring basis | |
Maximum percentage of participants' compensation which is deferrable (as a percent) | 100.00% |
Balance of the plan which was fully funded | $ | $ 5.7 |
Fair Value Measurements (Deta39
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Liabilities: | ||
Interest rate derivatives | $ 15,072 | $ 3,160 |
Corporate Office Properties, L.P. | ||
Liabilities: | ||
Interest rate derivatives | 15,072 | $ 3,160 |
Fair value measurement on a recurring basis | ||
Assets: | ||
Assets | 5,671 | |
Liabilities: | ||
Deferred compensation plan liability | 5,671 | |
Interest rate derivatives | 15,072 | |
Liabilities | 20,743 | |
Fair value measurement on a recurring basis | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 5,580 | |
Fair value measurement on a recurring basis | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 91 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Assets | 5,671 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 5,580 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 91 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Assets | 0 | |
Liabilities: | ||
Deferred compensation plan liability | 5,671 | |
Interest rate derivatives | 15,072 | |
Liabilities | 20,743 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | ||
Liabilities: | ||
Interest rate derivatives | 15,072 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Significant Other Observable Inputs (Level 2) | ||
Liabilities: | ||
Interest rate derivatives | $ 15,072 |
Fair Value Measurements (Deta40
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Assets and liabilities measured at fair value on a non-recurring basis | ||
Impairment losses | $ 2,446 | $ 0 |
Fair value measurement on a recurring basis | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Assets | 5,671 | |
Assets Held For Sale | Fair value measurement on a nonrecurring basis | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Assets | 14,886 | |
Assets Held For Sale | Fair value measurement on a nonrecurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Assets | 14,886 | |
Colorado Springs | Real Estate Investment Properties, Net | Fair value measurement on a nonrecurring basis | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Impairment losses | 1,600 | |
White Marsh, Maryland | Real Estate Investment Properties, Net | Fair value measurement on a nonrecurring basis | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Impairment losses | $ 847 |
Properties, Net (Details)
Properties, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments in real estate | ||
Less: accumulated depreciation | $ (713,283) | $ (700,363) |
Operating properties, net | 2,863,262 | 2,920,529 |
Land | ||
Investments in real estate | ||
Gross | 464,674 | 463,305 |
Buildings and improvements | ||
Investments in real estate | ||
Gross | $ 3,111,871 | $ 3,157,587 |
Properties, Net (Details 2)
Properties, Net (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Properties | ||
Projects in development or held for future development | $ 416,169 | $ 429,219 |
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 | 220,834 | 207,774 |
Projects in development or held for future development | Construction in progress, excluding land | ||
Properties | ||
Projects in development or held for future development | $ 195,335 | $ 221,445 |
Properties, Net (Details 3)
Properties, Net (Details 3) $ in Thousands | Mar. 31, 2016USD ($)Property | Dec. 31, 2015USD ($)Property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | $ 225,897 | $ 96,782 |
Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Properties, net | 199,481 | 90,188 |
Deferred rent receivable | 12,542 | 2,891 |
Intangible assets on real estate acquisitions, net | 1,591 | 1,591 |
Deferred leasing costs, net | 9,228 | 1,391 |
Lease incentives, net | 3,055 | 721 |
Assets held for sale, net | $ 225,897 | $ 96,782 |
Regional Office | White Marsh, Maryland | 2016 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 13 | |
Regional Office | White Marsh, Maryland | 2015 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 13 | |
Regional Office | Greater Philadelphia, Pennsylvania | 2016 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 4 | |
Fort Meade/BW Corridor | Hanover, Maryland | 2016 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 2 | |
Other Segments | San Antonio, Texas | 2016 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 2 | |
Other Segments | San Antonio, Texas | 2015 Assets Held For Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | Property | 2 |
Properties, Net (Details 4)
Properties, Net (Details 4) ft² in Thousands, $ in Thousands | Aug. 07, 2015USD ($)ft² | Apr. 15, 2015USD ($)ft² | Mar. 19, 2015USD ($)ft² | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) |
2015 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Contributed revenues | $ 9,200 | $ 332 | |||
Contributed net income from continuing operations | $ 942 | $ 170 | |||
250 W Pratt St | Baltimore, Maryland | |||||
Business Acquisition [Line Items] | |||||
Square footage of real estate properties (in square feet) | ft² | 367 | ||||
Acquired property percentage leased | 96.20% | ||||
Total acquisition cost | $ 61,800 | ||||
2600 Park Tower Drive | Northern Virginia | |||||
Business Acquisition [Line Items] | |||||
Square footage of real estate properties (in square feet) | ft² | 237 | ||||
Acquired property percentage leased | 100.00% | ||||
Total acquisition cost | $ 80,500 | ||||
100 and 30 Light Street | Baltimore, Maryland | |||||
Business Acquisition [Line Items] | |||||
Square footage of real estate properties (in square feet) | ft² | 558 | ||||
Acquired property percentage leased | 93.50% | ||||
Total acquisition cost | $ 121,200 | ||||
Business combination, liabilities assumed | 55,000 | ||||
Fair value assumption of debt | $ 55,500 |
Properties, Net (Details 5)
Properties, Net (Details 5) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2015USD ($)$ / shares | |
Real Estate [Abstract] | |
Pro forma total revenues | $ | $ 169,925 |
Pro forma net income attributable to COPT common shareholders | $ | $ 10,847 |
Pro Forma EPS, Basic (in dollars per share) | $ / shares | $ 0.11 |
Pro Forma EPS, Diluted (in dollars per share) | $ / shares | $ 0.11 |
Properties, Net (Details 6)
Properties, Net (Details 6) ft² in Thousands, $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)ft²Property | |
Construction and Redevelopment Activities | |
Sale price of land | $ | $ 5.7 |
Newly constructed properties placed in service | |
Construction and Redevelopment Activities | |
Square feet of properties placed in service | 149 |
Number of real estate properties | Property | 1 |
Newly redeveloped properties placed in service | |
Construction and Redevelopment Activities | |
Square feet of properties placed in service | 51 |
Properties under construction or contractually committed for construction | |
Construction and Redevelopment Activities | |
Number of real estate properties | Property | 8 |
Square footage of real estate properties (in square feet) | 1,200 |
Properties under or approved for redevelopment | |
Construction and Redevelopment Activities | |
Number of real estate properties | Property | 3 |
Square footage of real estate properties (in square feet) | 104 |
Real Estate Joint Ventures (Det
Real Estate Joint Ventures (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 20 Months Ended | |
Jan. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2017 | |
Investments in consolidated real estate joint ventures | ||||
Contributions to joint venture | $ 22,600 | $ 0 | ||
Consolidated real estate joint ventures | ||||
Investments in consolidated real estate joint ventures | ||||
Total Assets | 243,358 | |||
Encumbered Assets | 129,838 | |||
Total Liabilities | $ 97,755 | |||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company, LLC | ||||
Investments in consolidated real estate joint ventures | ||||
Ownership (as a percent) | 85.00% | |||
Total Assets | $ 149,301 | |||
Encumbered Assets | 82,018 | |||
Total Liabilities | $ 53,356 | |||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | ||||
Investments in consolidated real estate joint ventures | ||||
Ownership (as a percent) | 50.00% | |||
Total Assets | $ 56,333 | |||
Encumbered Assets | 47,820 | |||
Total Liabilities | $ 37,462 | |||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | ||||
Investments in consolidated real estate joint ventures | ||||
Ownership (as a percent) | 95.00% | |||
Total Assets | $ 37,724 | |||
Encumbered Assets | 0 | |||
Total Liabilities | $ 6,937 | |||
Contributions to joint venture | $ 22,600 | |||
Distributions to joint venture | $ 13,400 | |||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | Other Liabilities | Scenario, Forecast | ||||
Investments in consolidated real estate joint ventures | ||||
Distributions to joint venture | $ 6,700 |
Investing Receivables (Details)
Investing Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | $ 48,998 | $ 47,875 |
Notes Receivable from City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | $ 45,998 | 44,875 |
Notes Receivable from City of Huntsville | LW Redstone Company, LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Stated interest rate (as a percent) | 9.95% | |
Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | $ 3,000 | $ 3,000 |
Prepaid Expenses and Other As49
Prepaid Expenses and Other Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 15,516 | $ 23,009 |
Lease incentives, net | 8,375 | 11,133 |
Furniture, fixtures and equipment, net | 5,669 | 6,004 |
Construction contract costs incurred in excess of billings | 5,232 | 3,261 |
Deferred financing costs, net | 5,182 | 5,867 |
Deferred tax asset, net | 3,474 | 3,467 |
Equity method investments | 1,646 | 1,636 |
Other assets | 4,230 | 5,647 |
Prepaid expenses and other assets, net | 49,324 | 60,024 |
Taxable REIT Subsidiary | ||
Mortgage and Other Investing Receivables [Line Items] | ||
Deferred tax assets, valuation allowance | $ 2,100 | $ 2,100 |
Debt, Net (Details)
Debt, Net (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Debt | |||
Carrying Value | $ 2,140,212,000 | $ 2,077,752,000 | |
Deferred financing costs, net | 5,182,000 | 5,867,000 | |
Interest costs capitalized | 1,800,000 | $ 2,100,000 | |
Loans payable | |||
Debt | |||
Deferred financing costs, net | 7,500,000 | 8,000,000 | |
Mortgage and Other Secured Loans: | |||
Debt | |||
Carrying Value | 329,270,000 | 331,000,000 | |
Fixed rate mortgage loans | |||
Debt | |||
Carrying Value | $ 279,782,000 | 281,208,000 | |
Stated interest rates, low end of range (as a percent) | 3.96% | ||
Stated interest rates, high end of range (as a percent) | 7.87% | ||
Unamortized premium included in carrying value | $ 489,000 | 514,000 | |
Weighted-average interest rate excluding incremental rate on default rate | 6.08% | ||
Variable rate secured loans | |||
Debt | |||
Carrying Value | $ 49,488,000 | 49,792,000 | |
Description of variable rate basis | LIBOR | ||
Stated interest rate (as a percent) | 2.40% | ||
Variable rate secured loans | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.85% | ||
Variable rate secured loans | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 2.00% | ||
Variable rate secured loans | Revolving Credit Facility | |||
Debt | |||
Weighted average interest rate (as a percent) | 1.60% | ||
Revolving Credit Facility | |||
Debt | |||
Carrying Value | $ 107,000,000 | 43,500,000 | |
Description of variable rate basis | LIBOR | ||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 0.875% | ||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.60% | ||
Term Loan Facilities | |||
Debt | |||
Carrying Value | $ 516,205,000 | 515,902,000 | |
Increase to maximum borrowing capacity | 150,000,000 | ||
Aggregate additional borrowing capacity available | $ 430,000,000 | ||
Description of variable rate basis | LIBOR | ||
Weighted average interest rate (as a percent) | 2.08% | ||
Term Loan Facilities | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 0.90% | ||
Term Loan Facilities | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 2.60% | ||
3.60% Senior Notes | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 346,817,000 | 346,714,000 | |
Stated interest rate (as a percent) | 3.60% | ||
Debt instrument, face amount | $ 350,000 | ||
Unamortized discount included in carrying value | $ 2,200,000 | 2,200,000 | |
Interest rate on debt (as a percent) | 3.70% | ||
5.250% Senior Notes | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 245,840,000 | 245,731,000 | |
Stated interest rate (as a percent) | 5.25% | ||
Debt instrument, face amount | $ 250,000 | ||
Unamortized discount included in carrying value | $ 3,700,000 | 3,800,000 | |
Interest rate on debt (as a percent) | 5.49% | ||
3.70% Senior Notes | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 297,493,000 | 297,378,000 | |
Stated interest rate (as a percent) | 3.70% | ||
Debt instrument, face amount | $ 300,000 | ||
Unamortized discount included in carrying value | $ 2,000,000 | 2,100,000 | |
Interest rate on debt (as a percent) | 3.85% | ||
5.000% Senior Notes | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 296,105,000 | 296,019,000 | |
Stated interest rate (as a percent) | 5.00% | ||
Debt instrument, face amount | $ 300,000 | ||
Unamortized discount included in carrying value | $ 3,200,000 | 3,300,000 | |
Interest rate on debt (as a percent) | 5.15% | ||
Unsecured notes payable | |||
Debt | |||
Carrying Value | $ 1,482,000 | 1,508,000 | |
Stated interest rate (as a percent) | 0.00% | ||
Unamortized discount included in carrying value | $ 530,000 | $ 554,000 |
Debt, Net (Details 2)
Debt, Net (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Carrying amount and estimated fair value of debt | ||
Carrying Value | $ 2,140,212 | $ 2,077,752 |
Carrying Amount | ||
Carrying amount and estimated fair value of debt | ||
Variable-rate debt | 672,693 | 609,194 |
Carrying Value | 2,140,212 | 2,077,752 |
Carrying Amount | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Fixed-rate debt | 1,186,255 | 1,185,842 |
Carrying Amount | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Fixed-rate debt | 281,264 | 282,716 |
Total Estimated Fair Value | ||
Carrying amount and estimated fair value of debt | ||
Variable-rate debt | 677,203 | 610,987 |
Carrying Value | 2,182,752 | 2,114,636 |
Total Estimated Fair Value | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Fixed-rate debt | 1,216,295 | 1,211,658 |
Total Estimated Fair Value | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Fixed-rate debt | $ 289,254 | $ 291,991 |
Interest Rate Derivatives (Deta
Interest Rate Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||
Amount of (loss) gain recognized in accumulated other comprehensive loss (“AOCL”) (effective portion) | $ (11,284) | $ (3,474) | |
Interest Expense | |||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||
Amount of losses reclassified from AOCL into interest expense (effective portion) | 870 | 773 | |
Interest rate swaps | |||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||
Approximate loss amount to be reclassified from AOCI to interest expense over the next 12 months | 4,500 | ||
Interest rate derivatives in liability position, fair value | 15,800 | ||
Termination value to settle obligations under interest rate derivative agreements | 16,100 | ||
Interest rate swaps | Interest Expense | |||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||
Amount of loss recognized in interest expense (ineffective portion) | 1,551 | $ 0 | |
Interest rate swaps | Prepaid expenses and other current assets | |||
Fair value of interest rate derivatives and balance sheet classification | |||
Interest rate derivatives | 0 | $ 53 | |
Interest rate swaps | Interest rate derivatives | |||
Fair value of interest rate derivatives and balance sheet classification | |||
Fair value of Interest rate swaps classified as interest rate derivatives | (15,072) | (3,160) | |
Designated | |||
Fair values of interest rate swap derivatives | |||
Fair value of interest rate swaps | (15,072) | (3,107) | |
Designated | Interest rate swap, effective date September 2, 2014, swap one | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 0.8055% | ||
Fair value of interest rate swaps | $ (137) | (148) | |
Designated | Interest rate swap, effective date September 2, 2014, swap two | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 0.81% | ||
Fair value of interest rate swaps | $ (139) | (151) | |
Designated | Interest rate swap, effective date September 1, 2015, swap one | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 1.673% | ||
Fair value of interest rate swaps | $ (2,738) | (1,217) | |
Designated | Interest rate swap, effective date September 1, 2015, swap two | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 1.73% | ||
Fair value of interest rate swaps | $ (2,929) | (1,429) | |
Designated | Interest rate swap, effective October 13, 2015 | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 13,853 | ||
Fixed rate (as a percent) | 1.39% | ||
Fair value of interest rate swaps | $ (242) | 53 | |
Notional amount of interest rate derivatives after scheduled amortization | 12,100 | ||
Designated | Interest rate swap, effective September 1, 2016, swap one | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 1.9013% | ||
Fair value of interest rate swaps | $ (3,601) | (138) | |
Designated | Interest rate swap, effective September 1, 2016, swap two | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed rate (as a percent) | 1.905% | ||
Fair value of interest rate swaps | $ (3,511) | (45) | |
Designated | Interest rate swap, effective September 1, 2016, swap three | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 50,000 | ||
Fixed rate (as a percent) | 1.9079% | ||
Fair value of interest rate swaps | $ (1,775) | $ (32) |
Redeemable Noncontrolling Int53
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 19,218 | $ 18,417 |
Contributions from noncontrolling interests | 22,779 | 0 |
Distributions to noncontrolling interests | (20,526) | (157) |
Net income attributable to noncontrolling interests | 560 | 562 |
Adjustment to arrive at fair value of interests | 302 | 73 |
Ending balance | $ 22,333 | $ 18,895 |
Information by Business Segme54
Information by Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Segment financial information for real estate operations | |||
Revenues from real estate operations | $ 133,087 | $ 122,710 | |
Property operating expenses | 51,875 | 50,686 | |
NOI from real estate operations | 81,212 | 72,024 | |
Segment assets | 3,937,908 | 3,771,651 | $ 3,909,312 |
Segment assets | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 133,087 | 122,710 | |
Property operating expenses | 51,875 | 50,686 | |
NOI from real estate operations | 81,212 | 72,024 | |
Additions to long-lived assets | 14,401 | 71,971 | |
Transfers from non-operating properties | 62,093 | 117,272 | |
Segment assets | 3,305,392 | 3,110,380 | |
Segment assets | Defense/Information Technology Locations | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 101,230 | 95,720 | |
Property operating expenses | 38,519 | 38,817 | |
NOI from real estate operations | 62,711 | 56,903 | |
Additions to long-lived assets | 11,485 | 5,908 | |
Transfers from non-operating properties | 61,971 | 105,588 | |
Segment assets | 2,391,207 | 2,278,063 | |
Segment assets | Defense/Information Technology Locations | Fort Meade/BW Corridor | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 62,509 | 61,184 | |
Property operating expenses | 23,246 | 23,516 | |
NOI from real estate operations | 39,263 | 37,668 | |
Additions to long-lived assets | 6,519 | 3,445 | |
Transfers from non-operating properties | 35,751 | 12,930 | |
Segment assets | 1,319,444 | 1,267,663 | |
Segment assets | Defense/Information Technology Locations | Northern Virginia Defense/IT | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 12,116 | 11,046 | |
Property operating expenses | 4,541 | 5,616 | |
NOI from real estate operations | 7,575 | 5,430 | |
Additions to long-lived assets | 3,078 | 787 | |
Transfers from non-operating properties | (94) | 43,473 | |
Segment assets | 407,199 | 412,410 | |
Segment assets | Defense/Information Technology Locations | Lackland Air Force Base | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 10,225 | 8,665 | |
Property operating expenses | 5,420 | 4,763 | |
NOI from real estate operations | 4,805 | 3,902 | |
Additions to long-lived assets | 0 | 0 | |
Transfers from non-operating properties | 6 | 31,091 | |
Segment assets | 133,757 | 133,197 | |
Segment assets | Defense/Information Technology Locations | Navy Support Locations | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 6,934 | 7,265 | |
Property operating expenses | 3,524 | 3,398 | |
NOI from real estate operations | 3,410 | 3,867 | |
Additions to long-lived assets | 1,270 | 1,593 | |
Transfers from non-operating properties | 0 | 0 | |
Segment assets | 195,306 | 195,249 | |
Segment assets | Defense/Information Technology Locations | Redstone Arsenal | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 3,116 | 2,446 | |
Property operating expenses | 978 | 829 | |
NOI from real estate operations | 2,138 | 1,617 | |
Additions to long-lived assets | 618 | 83 | |
Transfers from non-operating properties | 211 | 2,997 | |
Segment assets | 107,693 | 99,335 | |
Segment assets | Defense/Information Technology Locations | Data Center Shells | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 6,330 | 5,114 | |
Property operating expenses | 810 | 695 | |
NOI from real estate operations | 5,520 | 4,419 | |
Additions to long-lived assets | 0 | 0 | |
Transfers from non-operating properties | 26,097 | 15,097 | |
Segment assets | 227,808 | 170,209 | |
Segment assets | Regional Office | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 23,502 | 21,960 | |
Property operating expenses | 9,831 | 8,748 | |
NOI from real estate operations | 13,671 | 13,212 | |
Additions to long-lived assets | 2,759 | 65,934 | |
Transfers from non-operating properties | 82 | 11,507 | |
Segment assets | 603,662 | 597,389 | |
Segment assets | Wholesale data centers | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 6,493 | 3,035 | |
Property operating expenses | 2,661 | 2,212 | |
NOI from real estate operations | 3,832 | 823 | |
Additions to long-lived assets | 0 | 30 | |
Transfers from non-operating properties | 51 | 177 | |
Segment assets | 240,484 | 162,170 | |
Segment assets | Other Segments | |||
Segment financial information for real estate operations | |||
Revenues from real estate operations | 1,862 | 1,995 | |
Property operating expenses | 864 | 909 | |
NOI from real estate operations | 998 | 1,086 | |
Additions to long-lived assets | 157 | 99 | |
Transfers from non-operating properties | (11) | 0 | |
Segment assets | $ 70,039 | $ 72,758 |
Information by Business Segme55
Information by Business Segment (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Reconciliation of segment revenues to total revenues | ||
Segment revenues from real estate operations | $ 133,087 | $ 122,710 |
Construction contract and other service revenues | 11,220 | 38,324 |
Total revenues | 144,307 | 161,034 |
Reconciliation of segment property operating expenses to property operating expenses | ||
Segment property operating expenses | 51,875 | 50,686 |
Less: Property operating expenses from discontinued operations | 0 | (5) |
Total property operating expenses | 51,875 | 50,681 |
Computation of net operating income from service operations | ||
Construction contract and other service revenues | 11,220 | 38,324 |
Construction contract and other service expenses | (10,694) | (37,498) |
NOI from service operations | 526 | 826 |
Reconciliation of NOI from real estate operations and NOI from service operations to (loss) income from continuing operations | ||
NOI from real estate operations | 81,212 | 72,024 |
NOI from service operations | 526 | 826 |
Interest and other income | 1,156 | 1,283 |
Equity in income of unconsolidated entities | 10 | 25 |
Income tax benefit (expense) | 8 | (55) |
Other adjustments: | ||
Depreciation and other amortization associated with real estate operations | (34,527) | (31,599) |
Impairment losses | (2,446) | 0 |
General, administrative and leasing expenses | (11,883) | (7,891) |
Business development expenses and land carry costs | (2,418) | (2,790) |
Interest expense | (23,559) | (20,838) |
NOI from discontinued operations | 0 | 5 |
Gain (loss) on early extinguishment of debt | 17 | (3) |
Income from continuing operations | $ 8,096 | $ 10,987 |
Information by Business Segme56
Information by Business Segment (Details 3) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Reconciliation of segment assets to total assets | |||
Assets | $ 3,937,908 | $ 3,909,312 | $ 3,771,651 |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Assets | 3,305,392 | 3,110,380 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Assets | 444,334 | 496,930 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Assets | $ 188,182 | $ 164,341 |
Share-Based Compensation and 57
Share-Based Compensation and Other Compensation Matters (Details) $ / shares in Units, $ in Millions | Mar. 01, 2016USD ($)shares | Mar. 31, 2016USD ($)Percentile_Rank$ / sharesshares |
CEO and Executive Vice President | ||
Other Share-based Compensation Additional Disclosures | ||
Executive transition cost | $ | $ 4.1 | |
Performance share units | ||
Share-Based Compensation | ||
Stock awards granted (in shares or units) | shares | 26,299 | |
Aggregate grant date fair value | $ | $ 1 | |
Potential earned PSUs payout for defined levels of performance under awards | ||
Earned PSUs payout (as a percent of PSUs granted) on 75th or greater percentile rank | 200.00% | |
Earned PSUs payout (as a percent of PSUs granted) on 50th percentile rank | 100.00% | |
Earned PSUs payout (as a percent of PSUs granted) on 25th percentile rank | 50.00% | |
Performance share units granted on percentile rank below 25th (as a percent) | 0.00% | |
The number of percentile ranks to fall between to earn interpolated PSUs between such percentile ranks, conditioned on the percentile rank exceeding 25% | Percentile_Rank | 2 | |
Assumptions used to value stock awards | ||
Performance period of the award | 3 years | |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 38.21 | |
Baseline value per common share (in dollars per share) | $ / shares | $ 23.90 | |
Expected volatility of common shares (as a percent) | 20.40% | |
Risk-free interest rate (as a percent) | 0.96% | |
Restricted shares | ||
Share-Based Compensation | ||
Stock awards granted (in shares or units) | shares | 184,237 | |
Aggregate grant date fair value | $ | $ 4.4 | |
Assumptions used to value stock awards | ||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 23.90 | |
Other Share-based Compensation Additional Disclosures | ||
Shares vested (in shares) | shares | 137,593 | |
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 27.47 | |
Aggregate intrinsic value of awards upon vesting | $ | $ 3.3 |
Earnings Per Share ("EPS") an58
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Numerator: | |||
Income from continuing operations | $ 8,096 | $ 10,987 | |
Gain on sales of real estate, net | 0 | 3,986 | |
Preferred share/unit dividends/distributions | (3,552) | (3,552) | |
Income from continuing operations attributable to noncontrolling interests | (1,270) | (1,392) | |
Income from continuing operations attributable to share-based compensation awards | (118) | (122) | |
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders | 3,156 | 9,907 | |
Discontinued operations | 0 | (238) | |
Discontinued operations attributable to noncontrolling interests | 0 | 12 | |
Numerator for basic and diluted EPS on net income attributable to COPT common shareholders | $ 3,156 | $ 9,681 | |
Denominator (all weighted averages): | |||
Denominator for basic EPS (common shares) | 94,203 | 93,199 | |
Dilutive effect of share-based compensation awards (shares) | 95 | 198 | |
Denominator for diluted EPS (common shares) | 94,298 | 93,397 | |
Basic EPS: | |||
Income from continuing operations (in dollars per share/unit) | [1] | $ 0.03 | $ 0.10 |
Discontinued operations (in dollars per share/unit) | [1] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [1] | 0.03 | 0.10 |
Diluted EPS: | |||
Income from continuing operations (in dollars per share/unit) | [1] | 0.03 | 0.10 |
Discontinued operations (in dollars per share/unit) | [1] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [1] | $ 0.03 | $ 0.10 |
Corporate Office Properties, L.P. | |||
Numerator: | |||
Income from continuing operations | $ 8,096 | $ 10,987 | |
Gain on sales of real estate, net | 0 | 3,986 | |
Preferred share/unit dividends/distributions | (3,717) | (3,717) | |
Income from continuing operations attributable to noncontrolling interests | (979) | (821) | |
Income from continuing operations attributable to share-based compensation awards | (118) | (122) | |
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders | 3,282 | 10,313 | |
Discontinued operations | 0 | (238) | |
Discontinued operations attributable to noncontrolling interests | 0 | 3 | |
Numerator for basic and diluted EPS on net income attributable to COPT common shareholders | $ 3,282 | $ 10,078 | |
Denominator (all weighted averages): | |||
Denominator for basic EPS (common shares) | 97,880 | 96,931 | |
Dilutive effect of share-based compensation awards (shares) | 95 | 198 | |
Denominator for diluted EPS (common shares) | 97,975 | 97,129 | |
Basic EPS: | |||
Income from continuing operations (in dollars per share/unit) | [2] | $ 0.03 | $ 0.10 |
Discontinued operations (in dollars per share/unit) | [2] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [2] | 0.03 | 0.10 |
Diluted EPS: | |||
Income from continuing operations (in dollars per share/unit) | [2] | 0.03 | 0.10 |
Discontinued operations (in dollars per share/unit) | [2] | 0 | 0 |
Net income attributable to COPT common shareholders (in dollars per share/unit) | [2] | $ 0.03 | $ 0.10 |
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. | ||
[2] | Basic and diluted earnings per common unit are calculated based on amounts attributable to common unitholders of Corporate Office Properties, L.P. |
Earnings Per Share ("EPS") an59
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Conversion of common units | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 3,677,000 | 3,732,000 |
Conversion of Series I Preferred Units | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176,000 | 176,000 |
Conversion of Series K Preferred Shares | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 434,000 | 434,000 |
Weighted average restricted stock and deferred shares | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 405,000 | 400,000 |
Weighted average options | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 379,000 | 474,000 |
Corporate Office Properties, L.P. | Weighted average restricted stock and deferred shares | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 405,000 | 400,000 |
Corporate Office Properties, L.P. | Weighted average options | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 379,000 | 474,000 |
Corporate Office Properties, L.P. | Conversion of Series I preferred units | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176,000 | 176,000 |
Corporate Office Properties, L.P. | Conversion of Series K preferred units | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 434,000 | 434,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Mar. 31, 2016USD ($)Property | Aug. 31, 2010USD ($) |
Tax incremental financing obligation | ||
Liability recognized with regard to tax incremental financing obligation at end of current period | $ 1,900,000 | |
Environmental Indemnity Agreement | ||
Number of lease properties which were provided environmental indemnifications | Property | 3 | |
Environmental indemnification to the tenant against losses covered under prior owner's indemnity agreement | $ 5,000,000 | |
Maximum environmental indemnification to the tenant against consequential damages after acquisition of property | $ 12,500,000 | |
Additional costs agreed to be paid by the entity related to construction and environmental regulatory activities (as a percent) | 50.00% | |
Maximum annual additional costs agreed to be paid by the entity related to construction and environmental regulatory activities | $ 300,000 | |
Maximum additional costs agreed to be paid by the entity related to construction and environmental regulatory activities | 1,500,000 | |
New Development and Redevelopment Obligations | ||
Loss Contingencies [Line Items] | ||
Purchase obligations | 60,100,000 | |
Capital Expenditures For Operating Properties | ||
Loss Contingencies [Line Items] | ||
Purchase obligations | 44,900,000 | |
Third Party Construction and Development | ||
Loss Contingencies [Line Items] | ||
Purchase obligations | 17,700,000 | |
Other Purchase Obligations | ||
Loss Contingencies [Line Items] | ||
Purchase obligations | $ 3,000,000 | |
Anne Arundel County, Maryland | Tax Incremental Financing Bond | ||
Tax incremental financing obligation | ||
Debt instrument, face amount | $ 30,000,000 |
Commitments and Contingencies61
Commitments and Contingencies - Future Minimum Payments (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 896 |
2,017 | 1,123 |
2,018 | 1,076 |
2,019 | 1,051 |
2,020 | 1,067 |
Thereafter | 86,800 |
Total | $ 92,013 |