Form 8-K COLUMBIA PROPERTY TRUST, For: Oct 29
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
Columbia Property Trust, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-36113
MD | 20-0068852 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) | |
One Glenlake Parkway, Suite 1200
Atlanta, GA 30328
(Address of principal executive offices, including zip code)
(404) 465-2200
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On October 29, 2015, Columbia Property Trust, Inc. (the "Company") issued a press release for its third quarter 2015 results and published supplemental information and a presentation for the third quarter of 2015 to its website. The press release and supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively.
The information in this Item 2.02 of Form 8-K and the attached Exhibits 99.1 and 99.2 are furnished to the Securities and Exchange Commission (the "SEC"), and shall not be deemed to be "filed" with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934 as amended, or the Exchange Act, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing filed under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number | Description | |
99.1 | Press release announcing third quarter 2015 results, issued October 29, 2015 | |
99.2 | Supplemental Information for the quarter ended September 30, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Columbia Property Trust, Inc. | ||
Dated: October 29, 2015 | By: | /s/ James A. Fleming |
James A. Fleming | ||
Executive Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts: | |
Tripp Sullivan | |
T 615-760-1104 | |
Jim Fleming | |
T 404-465-2200 | |
Columbia Property Trust Reports Third Quarter 2015 Results
ATLANTA--October 29, 2015--Columbia Property Trust, Inc. (the “Company”) (NYSE: CXP) reported financial results today for the third quarter ended September 30, 2015.
Highlights:
• | For the third quarter of 2015, Normalized Funds from Operations (FFO) per diluted share was $0.47, Adjusted Funds from Operations (AFFO) per diluted share was $0.35, and Net Income Attributable to Common Stockholders per diluted share was $0.16 |
• | Expanded our presence in Manhattan with the acquisition of 229 West 43rd Street for $516 million |
• | Closed on the disposition of 11 non-core assets in July for $433 million, completing the majority of 2015 dispositions identified early in the year |
• | Continued execution of a high-barrier market strategy with the marketing for sale of 2.9 million square feet of office properties in Baltimore, Cleveland and Newark and a 400-room hotel that are projected to generate gross proceeds of $600 million to $700 million |
• | Completed the sale of a 49% interest in the Market Square Buildings in Washington, D.C. for a gross value of $292 million |
• | Recast $950 million of unsecured bank debt with longer maturities and lower borrowing costs |
• | Completed 509,000 square feet of leasing since second quarter, including a long-term, 370,000-square-foot lease renewal in October 2015 to retain CH2M in Denver |
"We made great strides during the quarter and in the subsequent weeks to increase our concentration in high-barrier markets, allocate capital accretively and generate leasing momentum," stated Nelson Mills, president and chief executive officer of Columbia Property Trust. "With projected gross proceeds of $900 million to $1 billion from our latest round of anticipated dispositions and the joint venture with Blackstone, we will have more than 80% of revenues in our seven target markets, a low-levered balance sheet and substantial flexibility to generate long-term shareholder returns by growing net asset value. Completing the transition of our portfolio and capitalizing on key leasing opportunities will remain priorities, and we are confident of continued success in each area."
Acquisition Activity:
In August 2015, we closed on the acquisition of the 481,110-square-foot Class A office portion of 229 West 43rd Street, a 16-story, 731,596-square-foot building in Midtown Manhattan, for $516 million. The acquisition will significantly increase our exposure to one of our target markets and is expected to have first-year net operating income (NOI) of approximately $22.3 million. The acquisition was funded with borrowings on our unsecured credit facility and a $300 million unsecured bridge loan.
Disposition Activity:
In July, we closed on the disposition of 11 properties totaling 2.9 million square feet for $433 million. Proceeds from the disposition were used to facilitate the repayment of $333 million in mortgage loans secured by three office assets.
In September and October, we began marketing for sale the 1.3 million-square-foot Key Center Tower and the 400-room Key Center Marriott in Cleveland, as well as the 653,000-square-foot 100 East Pratt in Baltimore and the 961,000-square-foot 80 Park Plaza in Newark. We anticipate these sales, which are subject to market conditions, to be completed in late 2015 or early 2016 and to generate gross proceeds in the range of $600 million to $700 million.
In October, we completed the sale of a 49% interest in the 687,000-square-foot Market Square property located in Washington, D.C. to Blackstone Property Partners. With a gross asset value of $595.0 million for Market Square, and after deducting the partner’s pro rata share of the $325.0 million indebtedness secured by Market Square, as well as an adjustment of $12.25 million for the partner's pro-rata share of above market debt, we received $120.0 million in net proceeds.
Financing Activity:
In July, we entered into a new $500 million unsecured revolving credit facility, which matures in July 2019 with two six-month extension options and bears interest at a rate of 100 basis points over LIBOR based on current credit ratings. In addition, we received an upgrade in August from Standard and Poor's of our senior unsecured debt and issuer rating to BBB, and we are continuing to benefit from lower borrowing costs on our unsecured bank debt.
In July, we also replaced our $450 million unsecured term loan maturing in February 2016 with two separate facilities. The new $300 million unsecured term loan matures in July 2020 and bears interest at 110 basis points over LIBOR. The new $150 million unsecured term loan matures in July 2022 and bears interest at 155 basis points over LIBOR, which has been fixed at a rate of 3.52% with an interest swap.
Portfolio Highlights:
• | During the third quarter, we entered into leases for 139,000 rentable square feet of office space with an average lease term of approximately 8.4 years. Our third quarter leasing activity included 120,000 square feet of new leases and 19,000 square feet of renewal leases. |
• | As of September 30, 2015, our portfolio of 28 office properties was 93.3% leased and 91.7% occupied compared with 93.5% leased and 92.9% occupied as of September 30, 2014, and 92.1% leased and 90.9% occupied as of June 30, 2015. |
• | For leases executed during the quarter, we experienced a 6.9% increase in rental rates on a cash basis and a 7.7% increase in rental rates on a GAAP basis. |
• | In October, we completed a 370,000-square-foot renewal with CH2M at our 478,000-square-foot campus in suburban Denver that extends this tenant through September 2032. |
Financial Results:
Net Income Attributable to Common Stockholders was $20.1 million, or $0.16 per diluted share, for the third quarter of 2015, compared with $25.0 million, or $0.20 per diluted share, for the third quarter of 2014.
Normalized FFO was $58.1 million, or $0.47 per diluted share, for the third quarter of 2015, compared with $64.1 million, or $0.51 per diluted share, in the prior-year period.
AFFO was $43.7 million, or $0.35 per diluted share, for the third quarter of 2015, compared with $49.4 million, or $0.40 per diluted share, in the prior-year period.
NOI for the third quarter of 2015 decreased 5.3% on a GAAP basis and 10.3% on a cash basis compared with the prior-year period, primarily due to the 11 Property Sale completed on July 1, 2015. Over the same period, same store NOI decreased 3.4% on a GAAP basis and 3.5% on a cash basis due to scheduled lease expirations.
Distributions:
For the third quarter of 2015, we paid a dividend of $0.30 per share, or an annualized rate of $1.20 per share. The dividend was paid on September 15, 2015, to stockholders of record as of September 1, 2015.
Share Repurchases:
In September, the Board of Directors authorized a share repurchase program to buy up to $200 million of our common stock for a two-year period ending September 4, 2017. During the third quarter, we purchased 570,000 shares for a total expenditure of $12.8 million, or a weighted-average price of $22.45 per share.
Guidance for 2015:
For the year ending December 31, 2015, we raised our guidance for Normalized FFO to a range of $1.96 to $1.98 per diluted share, and Net Income Available to Common Stockholders in the range of $0.30 to $0.32 per diluted share.
A reconciliation of projected Net Income Available to Common Stockholders per diluted share to projected FFO and Normalized FFO per diluted share is provided as follows:
Full Year | ||||||||
2015 Range | ||||||||
Low | High | |||||||
Net income available to common stockholders | $ | 0.30 | $ | 0.32 | ||||
Add: Real estate depreciation & amortization | 1.76 | 1.76 | ||||||
Deduct: Gain on sale of real estate assets | (0.16 | ) | (0.16 | ) | ||||
FFO | 1.90 | 1.92 | ||||||
Add: Acquisition costs | 0.03 | 0.03 | ||||||
Add: Interest rate swap settlement | 0.01 | 0.01 | ||||||
Add: Loss on early extinguishment of debt | 0.02 | 0.02 | ||||||
Normalized FFO | $ | 1.96 | $ | 1.98 | ||||
Our guidance for 2015 is based on the following assumptions for our portfolio. This guidance assumes no additional acquisitions during the year, and assumes that any additional disposition activity in 2015 will occur late in the year.
• | Leased percentage at year end 2015 of 92% to 94% |
• | GAAP straight-line rental income of $14 million to $17 million |
• | G&A of $30 million to $31 million, excluding any unusual or one-time items |
• | Weighted average diluted share count of 125 million (excludes impact of future share repurchases) |
Jim Fleming, Executive Vice President and Chief Financial Officer, added, "We are pleased to raise and tighten the guidance range for 2015 to reflect our overall performance and activity during the second half of the year. While we continue to anticipate strong demand for our previously announced dispositions, the expected timing of those transactions will have more influence on 2016 results. Our strong balance sheet enabled us to allocate some capital in the quarter to the share repurchase program. Consistent with past practice, we will let the sources from upcoming dispositions drive our uses of capital for reducing leverage, new investments and additional share repurchases."
These estimates reflect management’s view of current market conditions and incorporate certain economic and operational assumptions and projections. This annual guidance includes the continued enhancement of the portfolio based on the above assumptions. Actual results could differ from these estimates. Note that individual quarters may fluctuate on both a cash basis and a GAAP basis due to the timing of acquisitions and dispositions, lease commencements and expirations, the timing of repairs and maintenance, capital expenditures, capital markets activities and one-time revenue or expense events. In addition, the Company’s guidance is based on information available to management as of the date of this release.
Investor Conference Call and Webcast:
We will host a conference call and live audio webcast, both open for the general public to hear, on Friday, October 30, 2015, at 10:00 a.m. ET to discuss quarterly financial results and business highlights. The number to call for this interactive teleconference is (412) 542-4180. A replay of the conference call will be available through November 6, 2015, by dialing (877) 344-7529 and entering the confirmation number, 10072758.
The live audio webcast of the Company's quarterly conference call will be available online in the Investor Relations section of the Company's website at ColumbiaPropertyTrust.com. The online replay will be available in the Investor Relations section of the Company's website shortly after the call and archived for approximately twelve months following the call.
About Columbia Property Trust
Columbia Property Trust (NYSE: CXP) owns and operates Class-A office buildings in competitive, primarily CBD locations, and over half our investments are in high-barrier-to-entry, primary markets. As of September 30, 2015, our $5+ billion portfolio included 28 office properties containing 13.9 million square feet and one hotel, concentrated in San Francisco, New York, and Washington, D.C. For more information about Columbia, which carries an investment-grade rating from both Moody’s and Standard & Poor’s, please visit www.ColumbiaPropertyTrust.com.
Non-GAAP Supplemental Financial Measure Definitions:
Funds from Operations - FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), represents net income (computed in accordance with GAAP), plus depreciation of real estate assets and amortization of lease-related costs, excluding gains (losses) on sales of real estate and impairment losses on real estate assets. The Company computes FFO in accordance with NAREIT's definition, which may differ from the methodology for calculating FFO, or similarly titled measures, used by other companies and this may not be comparable to those presentations. We consider FFO an appropriate supplemental performance measure given its wide use by and relevance to investors and analysts. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assume that the value of real estate diminishes predictably over time.
Normalized FFO - We calculate Normalized FFO by starting with FFO, as defined by NAREIT, and adjusting for (i) real estate acquisition-related costs, (ii) listing costs, (iii) loss on interest rate swaps and (iv) loss on early extinguishment of debt. Such items create significant earnings volatility. We believe Normalized FFO provides a meaningful measure of our operating performance and more predictability regarding future earnings potential. Normalized FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income; therefore, it should not be compared to other REITs' equivalent to Normalized FFO.
Adjusted Funds from Operations - AFFO is calculated by adjusting Normalized FFO to exclude (i) additional amortization of lease assets (liabilities), (ii) straight-line rental income, (iii) gain (loss) on interest rate swaps, (iv) recurring capital expenditures, and adding back (v) stock based compensation expense and (vi) non-cash interest expense. Because AFFO adjusts for income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, we believe AFFO provides useful supplemental information. AFFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of our liquidity.
EBITDA - EBITDA is defined as net income before interest, taxes, depreciation and amortization. We believe EBITDA is a reasonable measure of our liquidity. EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis liquidity measures. Other REITs may calculate EBITDA differently and our calculation should not be compared to that of other REITs.
Adjusted EBITDA - Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and incrementally removing any impairment losses, gains or losses from sales of property, real estate acquisition-related costs, discontinued operations adjustments, or other extraordinary items. We do not include impairment losses in this measure because we feel these types of losses create volatility in our earnings and make it difficult to determine the earnings generated by our ongoing business. We believe adjusted EBITDA is a reasonable measure of our liquidity. Adjusted EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis liquidity measures. Other REITs may calculate adjusted EBITDA differently and our calculation should not be compared to that of other REITs.
Cash Net Operating Income (Cash NOI) - Cash NOI is defined as Adjusted EBITDA adjusted for (i) portfolio general and administrative expense, (ii) interest rate swap valuation adjustments, (iii) interest expense associated with interest rates swaps, (iv) GAAP lease termination income, (v) non-cash property operations, (vi) straight-line rental income, (vii) net effect of above/(below) market amortization, and (viii) discontinued operations adjustments. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. Cash NOI is a non-GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
GAAP Net Operating Income (GAAP NOI) - GAAP NOI is defined as Adjusted EBITDA adjusted for (i) portfolio general and administrative expense, (ii) interest rate swap valuation adjustments, (iii) interest expense associated with interest rates swaps, (iv) GAAP lease termination income, (v) discontinued operations adjustments. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. GAAP NOI is a non-GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
Forward-Looking Statements:
Certain statements contained in this press release other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, guidance, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in the Company's most recently filed Annual Report on Form 10-K for the year ended December 31, 2014 and subsequently filed periodic reports for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.
Management's Quotes:
Quotes attributed to management within this document reflect management's beliefs at the time of release.
COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per-share amounts)
(Unaudited) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Assets: | |||||||
Real estate assets, at cost: | |||||||
Land | $ | 1,056,275 | $ | 785,101 | |||
Buildings and improvements, less accumulated depreciation of $648,405 and $660,098, as of September 30, 2015 and December 31, 2014, respectively | 3,322,241 | 3,026,431 | |||||
Intangible lease assets, less accumulated amortization of $266,454 and $313,822, as of September 30, 2015 and December 31, 2014, respectively | 280,049 | 247,068 | |||||
Construction in progress | 45,623 | 17,962 | |||||
Total real estate assets | 4,704,188 | 4,076,562 | |||||
Cash and cash equivalents | 44,823 | 149,790 | |||||
Tenant receivables, net of allowance for doubtful accounts of $1 and $3 as of September 30, 2015 and December 31, 2014 | 10,818 | 6,945 | |||||
Straight-line rent receivable | 112,750 | 116,489 | |||||
Prepaid expenses and other assets | 29,636 | 52,143 | |||||
Deferred financing costs, less accumulated amortization of $17,494 and $15,205, as of September 30, 2015 and December 31, 2014, respectively | 13,719 | 8,426 | |||||
Intangible lease origination costs, less accumulated amortization of $181,420 and $219,626, as of September 30, 2015 and December 31, 2014, respectively | 87,710 | 105,528 | |||||
Deferred lease costs, less accumulated amortization of $39,845 and $36,589, as of September 30, 2015 and December 31, 2014, respectively | 99,035 | 102,995 | |||||
Investment in development authority bonds | 120,000 | 120,000 | |||||
Total assets | $ | 5,222,679 | $ | 4,738,878 | |||
Liabilities: | |||||||
Line of credit, term loans, and notes payable | $ | 1,659,387 | $ | 1,430,884 | |||
Bonds payable, net of discounts of $1,096 and $818, as of September 30, 2015 and December 31, 2014, respectively | 598,904 | 249,182 | |||||
Accounts payable, accrued expenses, and accrued capital expenditures | 110,103 | 106,276 | |||||
Deferred income | 25,232 | 24,753 | |||||
Intangible lease liabilities, less accumulated amortization of $83,736 and $84,935, as of September 30, 2015 and December 31, 2014, respectively | 66,753 | 74,305 | |||||
Obligations under capital leases | 120,000 | 120,000 | |||||
Total liabilities | 2,580,379 | 2,005,400 | |||||
Commitments and Contingencies (Note 6) | — | — | |||||
Equity: | |||||||
Common stock, $0.01 par value, 225,000,000 shares authorized, 124,510,229 and 124,973,304 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | 1,245 | 1,249 | |||||
Additional paid-in capital | 4,591,204 | 4,601,808 | |||||
Cumulative distributions in excess of earnings | (1,945,731 | ) | (1,867,611 | ) | |||
Cumulative other comprehensive loss | (4,418 | ) | (1,968 | ) | |||
Total equity | 2,642,300 | 2,733,478 | |||||
Total liabilities and equity | $ | 5,222,679 | $ | 4,738,878 | |||
COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts)
(Unaudited) | (Unaudited) | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues: | |||||||||||||||
Rental income | $ | 107,011 | $ | 104,938 | $ | 332,736 | $ | 309,326 | |||||||
Tenant reimbursements | 22,627 | 23,861 | 77,395 | 70,528 | |||||||||||
Hotel income | 6,941 | 6,732 | 18,898 | 17,298 | |||||||||||
Other property income | 1,140 | 1,450 | 4,357 | 5,754 | |||||||||||
137,719 | 136,981 | 433,386 | 402,906 | ||||||||||||
Expenses: | |||||||||||||||
Property operating costs | 46,538 | 41,144 | 144,375 | 118,956 | |||||||||||
Hotel operating costs | 5,331 | 5,039 | 15,069 | 13,869 | |||||||||||
Asset and property management fees | 472 | 682 | 1,372 | 1,646 | |||||||||||
Depreciation | 32,441 | 29,980 | 100,261 | 87,453 | |||||||||||
Amortization | 20,276 | 19,476 | 67,233 | 58,218 | |||||||||||
Impairment loss on real estate assets | — | — | — | 14,982 | |||||||||||
General and administrative | 6,797 | 7,836 | 21,921 | 23,194 | |||||||||||
Acquisition expenses | 1,680 | 7,996 | 3,675 | 14,098 | |||||||||||
113,535 | 112,153 | 353,906 | 332,416 | ||||||||||||
Real estate operating income | 24,184 | 24,828 | 79,480 | 70,490 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (22,012 | ) | (19,273 | ) | (66,261 | ) | (56,043 | ) | |||||||
Interest and other income | 1,808 | 1,803 | 5,448 | 5,415 | |||||||||||
Loss on interest rate swaps | (1,102 | ) | (28 | ) | (1,110 | ) | (363 | ) | |||||||
Loss on early extinguishment of debt | (2,672 | ) | — | (3,149 | ) | — | |||||||||
(23,978 | ) | (17,498 | ) | (65,072 | ) | (50,991 | ) | ||||||||
Income from continuing operations before income tax expense, and gain on sale of real estate | 206 | 7,330 | 14,408 | 19,499 | |||||||||||
Income tax expense | (245 | ) | (409 | ) | (140 | ) | (416 | ) | |||||||
Income (loss) from continuing operations before gain on sale of real estate | (39 | ) | 6,921 | 14,268 | 19,083 | ||||||||||
Gain on sale of real estate assets | 20,182 | 18,607 | 20,182 | 18,607 | |||||||||||
Income from continuing operations | 20,143 | 25,528 | 34,450 | 37,690 | |||||||||||
Discontinued operations: | |||||||||||||||
Operating loss from discontinued operations | — | (540 | ) | — | (303 | ) | |||||||||
Loss on disposition of discontinued operations | — | — | — | (978 | ) | ||||||||||
Loss from discontinued operations | — | (540 | ) | — | (1,281 | ) | |||||||||
Net income | $ | 20,143 | $ | 24,988 | $ | 34,450 | $ | 36,409 | |||||||
Per-share information – basic: | |||||||||||||||
Income from continuing operations | $ | 0.16 | $ | 0.20 | $ | 0.28 | $ | 0.30 | |||||||
Loss from discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.01 | ) | ||||||
Net income | $ | 0.16 | $ | 0.20 | $ | 0.28 | $ | 0.29 | |||||||
Weighted-average common shares outstanding – basic | 124,359 | 124,863 | 124,359 | 124,858 | |||||||||||
Per-share information – diluted: | |||||||||||||||
Income from continuing operations | $ | 0.16 | $ | 0.20 | $ | 0.28 | $ | 0.30 | |||||||
Loss from discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.01 | ) | ||||||
Net income | $ | 0.16 | $ | 0.20 | $ | 0.28 | $ | 0.29 | |||||||
Weighted-average common shares outstanding – diluted | 124,460 | 124,938 | 124,445 | 124,921 | |||||||||||
Dividends per share | $ | 0.30 | $ | 0.30 | $ | 0.90 | $ | 0.90 | |||||||
COLUMBIA PROPERTY TRUST, INC.
FUNDS FROM OPERATIONS, NORMALIZED FUNDS FROM OPERATIONS
AND ADJUSTED FUNDS FROM OPERATIONS
(in thousands, except per-share amounts, unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Reconciliation of Net Income to Funds From Operations, Normalized Funds From Operations and Adjusted Funds From Operations: | |||||||||||||||
Net income | $ | 20,143 | $ | 24,988 | $ | 34,450 | $ | 36,409 | |||||||
Adjustments: | |||||||||||||||
Depreciation of real estate assets | 32,441 | 29,980 | 100,261 | 87,453 | |||||||||||
Amortization of lease-related costs | 20,276 | 19,476 | 67,233 | 58,218 | |||||||||||
Impairment loss on real estate assets | — | — | — | 14,982 | |||||||||||
Gain on sale of real estate assets | (20,182 | ) | (18,607 | ) | (20,182 | ) | (18,607 | ) | |||||||
Loss on sale of real estate assets - discontinued operations | — | — | — | 978 | |||||||||||
FFO | 52,678 | 55,837 | 181,762 | 179,433 | |||||||||||
Real estate acquisition-related costs | 1,680 | 7,996 | 3,675 | 14,098 | |||||||||||
Shelf registration costs | — | 269 | — | 269 | |||||||||||
Settlement of interest rate swap | 1,102 | — | 1,102 | — | |||||||||||
Loss on early extinguishment of debt | 2,672 | — | 3,149 | — | |||||||||||
Normalized FFO | 58,132 | 64,102 | 189,688 | 193,800 | |||||||||||
Other income (expenses) included in net income, which do not correlate with our operations: | |||||||||||||||
Additional amortization of lease assets (liabilities)(1) | (2,401 | ) | (931 | ) | (7,353 | ) | (2,131 | ) | |||||||
Straight-line rental income(2) | (4,957 | ) | (3,253 | ) | (12,716 | ) | (4,108 | ) | |||||||
Gain on interest rate swaps | — | (1,300 | ) | (2,634 | ) | (3,624 | ) | ||||||||
Stock-based compensation expense in general and administrative(3) | 896 | 488 | 2,925 | 1,511 | |||||||||||
Non-cash interest expense(4) | 1,152 | 785 | 3,138 | 2,297 | |||||||||||
Total other non-cash adjustments | (5,310 | ) | (4,211 | ) | (16,640 | ) | (6,055 | ) | |||||||
Recurring capital expenditures(5) | (9,140 | ) | (10,491 | ) | (37,292 | ) | (41,038 | ) | |||||||
Adjusted FFO | $ | 43,682 | $ | 49,400 | $ | 135,756 | $ | 146,707 | |||||||
Per-share information - basic | |||||||||||||||
FFO per share | $ | 0.42 | $ | 0.45 | $ | 1.46 | $ | 1.44 | |||||||
Normalized FFO per share | $ | 0.47 | $ | 0.51 | $ | 1.53 | $ | 1.55 | |||||||
Adjusted FFO per share | $ | 0.35 | $ | 0.40 | $ | 1.09 | $ | 1.17 | |||||||
Weighted-average shares outstanding - basic | 124,359 | 124,863 | 124,359 | 124,858 | |||||||||||
Per-share information - diluted | |||||||||||||||
FFO per share | $ | 0.42 | $ | 0.45 | $ | 1.46 | $ | 1.44 | |||||||
Normalized FFO per share | $ | 0.47 | $ | 0.51 | $ | 1.52 | $ | 1.55 | |||||||
Adjusted FFO per share | $ | 0.35 | $ | 0.40 | $ | 1.09 | $ | 1.17 | |||||||
Weighted-average shares outstanding - diluted | 124,460 | 124,938 | 124,445 | 124,921 | |||||||||||
(1) | GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Such intangible lease assets (liabilities) arise from the allocation of acquisition price related to direct costs associated with obtaining a new tenant, the value of opportunity costs associated with lost rentals, the value of tenant relationships, and the value of effective rental rates of in-place leases that are above or below market rates of comparable leases at the time of acquisition. Like real estate values, market lease rates in aggregate have historically risen or fallen with local market conditions. |
(2) | Prior to first quarter 2015, adjustments for straight-line rent related to lease terminations were included. |
(3) | This item represents the noncash impact of compensation expense related to stock grants under our Long-Term Incentive Plan. |
(4) | This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments. GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. |
(5) | Recurring Capital Expenditures are defined as capital expenditures incurred to maintain the building structure and functionality, and to lease space at our properties in their current condition. Recurring capital expenditures include building capital, tenant improvements, and leasing commissions. This measure excludes capital for first generation leasing and acquisitions. |
COLUMBIA PROPERTY TRUST, INC.
NET OPERATING INCOME AND SAME STORE NET OPERATING INCOME - CASH BASIS
(in thousands, unaudited)
Three Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Reconciliation of Net Income to Net Operating Income - Cash Basis and Same Store Net Operating Income - Cash Basis: | |||||||
Net income | $ | 20,143 | $ | 24,988 | |||
Net interest expense | 22,004 | 19,273 | |||||
Interest income from development authority bonds | (1,800 | ) | (1,800 | ) | |||
Income tax expense | 245 | 409 | |||||
Depreciation | 32,441 | 29,980 | |||||
Amortization | 20,276 | 19,476 | |||||
EBITDA | $ | 93,309 | $ | 92,326 | |||
Real estate acquisition costs | 1,680 | 7,996 | |||||
Shelf registration costs | — | 269 | |||||
Settlement of interest rate swaps | 1,102 | — | |||||
Loss on early extinguishment of debt | 2,672 | — | |||||
Gain on sale of real estate assets | (20,182 | ) | (18,607 | ) | |||
Adjusted EBITDA | $ | 78,581 | $ | 81,984 | |||
General and administrative | 6,797 | 7,836 | |||||
Shelf registration costs in general and administrative | — | (269 | ) | ||||
Interest rate swap valuation adjustment | — | (1,300 | ) | ||||
Interest expense associated with interest rate swaps | — | 1,328 | |||||
Lease termination income (1) | (808 | ) | (877 | ) | |||
Straight-line rental income | (4,957 | ) | (2,195 | ) | |||
Net effect of above/(below) market amortization | (2,401 | ) | (957 | ) | |||
Non-cash property operations | — | 27 | |||||
Operating loss from discontinued operations - cash basis | — | 548 | |||||
Net operating income - cash basis | $ | 77,212 | $ | 86,125 | |||
Net Operating Income from: | |||||||
Acquisitions(2) | (9,812 | ) | (401 | ) | |||
Dispositions(3) | 50 | (15,845 | ) | ||||
Same store NOI - cash basis | $ | 67,450 | $ | 69,879 | |||
(1) | Includes adjustments for straight-line rent related to lease terminations. |
(2) | Includes the following acquisitions: 229 West 43rd Street, 315 Park Avenue South, 1881 Campus Commons, 116 Huntington Avenue, and 650 California Street. |
(3) | Dispositions include: 170 Park Avenue, 180 Park Avenue, 1580 West Nursery Road, Acxiom, Highland Landmark III, The Corridors III, 215 Diehl Road, 544 Lakeview, Bannockburn Lake III, 550 King Street, Robbins Road, Lenox Park Buildings, 9 Technology Drive, and 7031 Columbia Gateway Drive. |
COLUMBIA PROPERTY TRUST, INC.
NET OPERATING INCOME AND SAME STORE NET OPERATING INCOME - GAAP BASIS
(in thousands, unaudited)
Three Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Reconciliation of Net Income to Net Operating Income - GAAP Basis and Same Store Net Operating Income - GAAP Basis: | |||||||
Net income | $ | 20,143 | $ | 24,988 | |||
Net interest expense | 22,004 | 19,273 | |||||
Interest income from development authority bonds | (1,800 | ) | (1,800 | ) | |||
Income tax expense | 245 | 409 | |||||
Depreciation | 32,441 | 29,980 | |||||
Amortization | 20,276 | 19,476 | |||||
EBITDA | $ | 93,309 | $ | 92,326 | |||
Real estate acquisition costs | 1,680 | 7,996 | |||||
Shelf registration costs | — | 269 | |||||
Settlement of interest rate swaps | 1,102 | — | |||||
Loss on early extinguishment of debt | 2,672 | — | |||||
Gain on sale of real estate assets | (20,182 | ) | (18,607 | ) | |||
Adjusted EBITDA | $ | 78,581 | $ | 81,984 | |||
General and administrative | 6,797 | 7,836 | |||||
Shelf registration costs in general and administrative | — | (269 | ) | ||||
Interest rate swap valuation adjustment | — | (1,300 | ) | ||||
Interest expense associated with interest rate swaps | — | 1,328 | |||||
Lease termination income(1) | (808 | ) | (877 | ) | |||
Loss on sale of real estate assets - discontinued operations | — | 575 | |||||
Net Operating Income - GAAP Basis | $ | 84,570 | $ | 89,277 | |||
Net Operating Income from: | |||||||
Acquisitions(2) | (13,778 | ) | (663 | ) | |||
Dispositions(3) | 50 | (15,284 | ) | ||||
Same Store NOI - GAAP Basis | $ | 70,842 | $ | 73,330 | |||
(1) | Includes adjustments for straight-line rent related to lease terminations. |
(2) | Includes the following acquisitions: 229 West 43rd Street, 315 Park Avenue South, 1881 Campus Commons, 116 Huntington Avenue, and 650 California Street. |
(3) | Dispositions include: 170 Park Avenue, 180 Park Avenue, 1580 West Nursery Road, Acxiom, Highland Landmark III, The Corridors III, 215 Diehl Road, 544 Lakeview, Bannockburn Lake III, 550 King Street, Robbins Road, Lenox Park Buildings, 9 Technology Drive, and 7031 Columbia Gateway Drive. |
2015 Q3 Supplemental Information ®
Introduction Management & Investor Contacts 3 Company Overview 4 Capitalization Analysis & Research Coverage 5 2015 Guidance 6 Select Performance Information 7 Financial Information Consolidated Balance Sheet 8 Consolidated Statements of Operations 9 10 Net Operating Income 11 Debt Overview 12 Debt Covenant Compliance 13 Debt Maturities 14 Operational & Portfolio Information Property Overview 15 Market Summary 16 Top 20 Tenants & Tenant Industry Profile 17 Lease Expiration Schedule 18 Lease Expiration by Market 19 Leasing Summary 20 Occupancy Summary 21 Occupancy by Market 22 Capital Expenditure Summary 23 Transaction Activity 24 Additional Information / Reconciliations / Definitions 25 Net Operating Income and Same Store Net Operating Income - Cash Basis (Reconciliation to Net Income) 26 Net Operating Income and Same Store Net Operating Income - GAAP Basis (Reconciliation to Net Income) 27 Definitions 28 Forward Looking Statements: Supplemental Information - Q3 2015 2 Columbia Property Trust, Inc. Table of Contents This supplemental package contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, including our 2015 guidance, which speak only as of the date this supplemental package is published, and which are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other owners and operators of real estate); adverse economic or real estate developments in the company’s target markets; risks associated with the availability and terms of financing, the use of debt to fund acquisitions, and the ability to refinance indebtedness as it comes due; reductions in asset valuations and related impairment charges; risks associated with downturns in foreign, domestic and local economies, changes in interest rates; potential liability for uninsured losses and environmental contamination; risks associated with the company’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and possible adverse changes in tax and environmental laws; and risks associated with the company’s dependence on key personnel whose continued service is not guaranteed. We do not intend to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. For additional risks and uncertainties that would cause actual results to differ materially from those presented in our forward-looking statements see our Annual Report on Form 10-K for the year ended December 31, 2014 and subsequently filed periodic reports. On the Cover: Left - Market Square in Washington, D.C.; Middle - 650 California Street in San Francisco, CA; Right - 229 West 43rd Street in New York, NY. Normalized Funds From Operations - NFFO Adjusted Funds From Operations - AFFO (Reconciliation to Net Income)
Corporate One Glenlake Parkway, Suite 1200 Atlanta, Georgia 30328 404-465-2200 www.columbiapropertytrust.com Executive and Senior Management E. Nelson Mills James A. Fleming Chief Executive Officer, Executive Vice President President and Director Chief Financial Officer Drew Cunningham David Dowdney Wendy Gill Kevin Hoover Senior Vice President Senior Vice President Senior Vice President Senior Vice President Real Estate Operations Western Region Corporate Operations and Real Estate Transactions Chief Accounting Officer Board of Directors Charles R. Brown Richard W. Carpenter John L. Dixon Murray J. McCabe E. Nelson Mills Independent Director Independent Director Independent Director Independent Director Chief Executive Officer Chairman President Michael S. Robb George W. Sands Thomas G. Wattles Independent Director Independent Director Independent Director Corporate Counsel King & Spalding LLP 1180 Peachtree Street Atlanta, GA 30309 T 404-572-4600 www.kslaw.com Investor Relations Shareholder Services James A. Fleming T 855-347-0042 (toll free) Executive Vice President & Chief Financial Officer F 816-701-7629 T 404-465-2126 E [email protected] E [email protected] Tripp Sullivan SCR Partners, LLC T 615-760-1104 E [email protected] Supplemental Information - Q3 2015 3 Columbia Property Trust, Inc. Management & Investor Contacts
Unaudited As of Period End 9/30/2015 Select Portfolio Statistics Number of Properties / Buildings 29 / 41 Office Rentable Square Footage (in thousands) 13,937 Percent Leased 93.3% Commenced Occupancy 91.7% Average Economic Occupancy (1) 88.6% Percentage of Properties Multi-Tenant / Single (2) 79% / 21% Office Percentage of Portfolio (3) 98% Numbers of Markets / States (4) 15 / 13 Percentage of Portfolio Central Business District / Suburban (2) 68% / 32% Weighted Average Lease Term Remaining (2) 5.9 Years Balance Sheet ($ in thousands) Gross Real Estate Assets (5) 5,737,688 Gross Real Estate Assets - Unencumbered (5) (6) 4,402,767 Total Gross Debt (7) 2,259,387 Percentage of Gross Real Estate Assets - Unencumbered / Gross Real Estate Assets 76.7% Total Gross Debt / Gross Real Estate Assets 39.4% Rating / Outlook Standard & Poor's BBB / Stable Moody's Baa2 / Stable Number of Employees 97 (1) Total square feet of leases that have commenced and the tenant is paying rent divided by total rentable square feet. Monthly average for the current quarter. (2) Based on Annualized Lease Revenue (ALR). (3) Based on square feet. (4) Includes Washington, D.C. 4 Columbia Property Trust, Inc. Company Overview Supplemental Information - Q3 2015 (6) Unencumbered assets are those not subject to mortgage debt. (5) Gross Real Estate Assets includes (i) land, (ii) building and improvements, (iii) intangible lease assets, (iv) construction in progress, and (v) intangible lease origination costs, less (vi) intangible lease liabilities. Columbia Property Trust (NYSE: CXP) owns and operates Class-A office buildings in competitive, primarily CBD locations, and over half our investments are in high-barrier-to-entry, primary markets. As of September 30, 2015, our $5+ billion portfolio included 28 office properties containing 13.9 million square feet and one hotel, concentrated in San Francisco, New York, and Washington, D.C. For more information about Columbia, which carries an investment-grade rating from both Moody's and Standard & Poor's, please visit our website at www.columbiapropertytrust.com. This data supplements the information provided in our reports filed with the Securities and Exchange Commission and should be reviewed in conjunction with such filings. (7) Total Gross Debt includes (i) line of credit and notes payable, and (ii) bonds payable.
Unaudited ($ & shares in thousands except for per-share data and percentages) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Common Stock Data Weighted-Average Shares Outstanding - Basic 124,359 124,925 124,903 124,868 124,863 Weighted-Average Shares Outstanding - Diluted 124,460 125,017 124,935 124,944 124,938 High Closing Price 25.30 27.45 27.67 25.79 26.09 Low Closing Price 21.16 24.55 24.08 23.80 23.85 Average Closing Price 23.46 26.40 25.59 25.15 25.37 Closing Price (as of period end) 23.20 24.55 27.02 25.35 23.87 Dividends / Share (annualized) 1.20 1.20 1.20 1.20 1.20 Dividend Yield (annualized) (1) 5.2% 4.9% 4.4% 4.7% 5.0% Common Shares Outstanding (1) 124,510 125,076 125,077 124,973 124,969 Market Value of Common Shares (1) 2,888,632 3,070,616 3,379,581 3,168,066 2,983,010 Total Market Capitalization (1) (2) 5,148,019 5,209,312 5,514,596 4,848,950 4,823,834 Equity Research Coverage Evercore ISI Goldman Sachs & Co. JMP Securities Morgan Stanley Sheila McGrath Brad Burke Mitch Germain Vance Edelson 212-497-0882 917-343-2082 212-906-3546 212-761-4000 Oppenheimer & Co Wunderlich Securities, Inc. BMO Capital Markets Inc. Steve Manaker Craig Kucera John P. Kim 212-667-5950 540-277-3366 212-885-4115 Debt Research Coverage J.P. Morgan Securities Mark Streeter 212-834-5086 Rating Agencies Moody's Investor Services Standard & Poor's Lori Marks Fernanda Hernandez 212-553-1098 212-438-1347 (2) Market value of shares plus gross debt as of quarter end. Supplemental Information - Q3 2015 5 (1) Based on closing price and ending shares for the last trading day of quarter. Three Months Ended Columbia Property Trust, Inc. Capitalization Analysis & Research Coverage
Unaudited Per share Low High Net Income 0.30$ 0.32$ Real Estate Depreciation & Amortization 1.76 1.76 Gain on Sale of Real Estate Assets (0.16) (0.16) Funds From Operations 1.90$ 1.92$ Acquisition Costs 0.03 0.03 Interest Rate Swap Settlement Expense 0.01 0.01 Loss on Early Extinguishment of Debt 0.02 0.02 Normalized Funds From Operations 1.96$ 1.98$ 2015 Portfolio Assumptions l Leased percentage at year end: l GAAP Straight Line Rental Income: l General & Administrative: (1) l 2 2015 Other Assumptions l Weighted-average common shares outstanding - diluted: 125MM (excludes impact of future share repurchases) (1) Excludes any unusual or one-time items. Supplemental Information - Q3 2015 6 Columbia Property Trust, Inc. 2015 Guidance Twelve Months Ended 12/31/2015 Investor Conference Call and Webcast: The Company will host a conference call and live audio webcast, both open for the general public to hear, on Friday, October 30, 2015, at 10:00 a.m. ET to discuss financial results, business highlights and provide a Company update. The number to call for this interactive teleconference is (412) 542-4180. A replay of the conference call will be available through November 6, 2015, by dialing (877) 344-7529 and entering the confirmation number, 10072758. NOTE: These estimates reflect management's view of current market conditions and incorporate certain economic and operational assumptions and projections. This annual guidance includes the continued repositioning of the portfolio based on the above assumptions. Actual results could differ from these estimates. Note that individual quarters may fluctuate on both a cash basis and a GAAP basis due to the timing of dispositions, lease commencements and expirations, the timing of repairs and maintenance, capital expenditures, capital markets activities and one-time revenue or expense events. In addition, the Company's guidance is based on information available to management as of the date of this release. 92% to 94% $14MM to $17MM $30MM to $31MM This guidance assumes no additional acquisitions during the year, and assumes that any additional disposition activity in 2015 will occur late in the year.
Unaudited ($ in thousands except for square feet, per-share data, percentages and ratios) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Operating Information Percent Leased (as of period end) (page 21) 93.3% 92.1% 92.3% 93.3% 93.5% New Leases - Square Feet (page 20) 120,446 60,508 190,099 134,072 78,043 Renewal Leases - Square Feet (page 20) 18,560 104,705 40,050 189,393 44,986 Cash NOI (page 11) 77,212 87,068 85,001 80,940 86,125 Adjusted EBITDA (page 26) 78,581 87,313 84,769 79,444 81,984 Net Income (page 9) 20,143 8,709 5,598 56,226 24,988 Net Income per Share - Basic & Diluted 0.16 0.07 0.04 0.45 0.20 Normalized FFO (page 10) 58,132 66,260 65,296 61,360 64,102 Normalized FFO per Share - Basic & Diluted 0.47 0.53 0.52 0.49 0.51 AFFO (page 10) 43,682 45,836 46,238 35,108 49,400 AFFO per Share - Basic & Diluted 0.35 0.37 0.37 0.28 0.40 Rental Income (page 9) 107,011 112,916 112,809 105,215 104,938 Total Revenues (page 9) 137,719 148,124 147,543 137,891 136,981 Straight Line Rent (page 10) 4,957 3,822 3,937 2,288 2,195 Total Operating Expenses (page 9) 113,535 118,364 122,007 119,512 112,153 Recurring Capital (page 23) 9,140 15,005 13,147 20,937 10,491 Non-Recurring Capital (page 23) 16,907 13,289 10,755 5,141 7,917 Dividends 37,524 37,523 37,523 37,491 37,492 Dividends per Share 0.30 0.30 0.30 0.30 0.30 Balance Sheet Information (as of period end) Gross Real Estate Assets (1) 5,737,688 5,778,566 5,792,468 5,216,396 5,497,405 Total Assets 5,222,679 5,126,233 5,157,608 4,738,878 4,883,587 Net Debt (2) 2,213,468 2,103,783 2,102,533 1,530,276 1,793,510 Gross Debt (3) 2,259,387 2,138,696 2,135,015 1,680,884 1,840,824 Ratios NOI Margin (4) 61.4% 62.9% 62.1% 62.2% 65.2% Fixed Charge Coverage Ratio (5) 3.65 4.03 4.16 4.28 4.52 Net Debt (Average) to Adjusted EBITDA (6) 6.51 5.99 5.87 4.82 5.47 Gross Debt / Gross Real Estate Assets (as of period end) 39.4% 37.0% 36.9% 32.2% 33.5% Normalized FFO Payout Ratio (7) 64.5% 56.6% 57.5% 61.1% 58.5% AFFO Payout Ratio (8) 85.9% 81.9% 81.2% 106.8% 75.9% (4) NOI margin is calculated as GAAP NOI divided by total GAAP revenues for continuing and discontinued operations. (7) Calculated as dividends divided by Normalized FFO for the quarter. (8) Calculated as dividends divided by AFFO for the quarter. Supplemental Information - Q3 2015 7 Columbia Property Trust, Inc. Select Performance Information NOTE: This section includes non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 25, 26 & 27. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company's financial condition and results of operations can be found on page 28. (1) Gross Real Estate Assets includes (i) land, (ii) building and improvements, (iii) intangible lease assets, (iv) construction in progress, and (v) intangible lease origination costs, less (vi) intangible lease liabilities. (2) Net debt is calculated as the total principal amount of debt outstanding less cash and cash equivalents and discount on bonds payable. (5) Fixed charge coverage is calculated as Adjusted EBITDA divided by the sum of interest expense, principal amortization, and capitalized interest. Three Months Ended (6) Net debt is calculated as the quarterly average of principal debt outstanding less cash and cash equivalents and discount on bonds payable. Prior to first quarter 2015, net debt is calculated as of the last day of the quarter. Adjusted EBITDA is annualized for purposes of the calculation. (3) Total Gross Debt includes (i) line of credit and notes payable, and (ii) bonds payable.
Columbia Property Trust, Inc. Unaudited (in thousands) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Assets: Real estate assets, at cost: Land 1,056,275$ 849,042$ 912,035$ 785,101$ 789,967$ Buildings and improvements 3,970,646 3,687,609 4,083,182 3,686,529 3,676,473 Buildings and improvements, accumulated depreciation (648,405) (616,274) (693,780) (660,098) (630,114) Intangible lease asset 546,503 530,299 608,689 560,890 561,859 Intangible lease asset, accumulated amortization (266,454) (264,564) (316,720) (313,822) (302,713) Construction in progress 45,623 39,777 27,201 17,962 16,479 Real estate assets held for sale - 512,304 - - 257,768 Real estate assets held for sale, accumulated depreciation - (139,820) - - (46,637) Total real estate assets 4,704,188$ 4,598,373$ 4,620,607$ 4,076,562$ 4,323,082$ Cash and cash equivalents 44,823 33,742 31,236 149,790 46,433 Tenant receivables, net of allowance for doubtful accounts 10,818 8,551 10,859 6,945 8,200 Straight line rent receivable 112,750 107,727 121,098 116,489 113,645 Prepaid expenses and other assets 29,636 28,910 29,728 52,143 28,320 Deferred financing costs, less accumulated amortization 13,719 9,811 10,653 8,426 9,334 Intangible lease origination costs 269,130 263,845 326,355 325,154 329,538 Intangible lease origination costs, accumulated amortization (181,420) (179,438) (220,596) (219,626) (216,091) Deferred lease costs 138,880 135,000 147,006 139,584 131,511 Deferred lease costs, accumulated amortization (39,845) (37,166) (39,338) (36,589) (34,238) Investment in development authority bonds 120,000 120,000 120,000 120,000 120,000 Other assets held for sale - 78,948 - - 37,484 Other assets held for sale, accumulated amortization - (42,070) - - (13,631) Total assets 5,222,679$ 5,126,233$ 5,157,608$ 4,738,878$ 4,883,587$ Liabilities: Line of credit and notes payable 1,659,387$ 1,517,696$ 1,535,015$ 1,430,884$ 1,590,824$ Bonds payable 600,000 600,000 600,000 250,000 250,000 Discount on bonds payable (1,096) (1,171) (1,246) (818) (881) 110,103 93,144 97,973 106,276 100,911 Deferred income 25,232 22,304 25,688 24,753 26,478 Intangible lease liabilities 150,489 150,994 164,994 159,240 159,241 Intangible lease liabilities, accumulated amortization (83,736) (79,607) (86,922) (84,935) (80,043) Obligations under capital leases 120,000 120,000 120,000 120,000 120,000 Liabilities held for sale - 31,901 - - 5,469 Liabilities held for sale, accumulated amortization - (3,662) - - (2,432) Total liabilities 2,580,379$ 2,451,599$ 2,455,502$ 2,005,400$ 2,169,567$ Equity: Common stock 1,245$ 1,250$ 1,250$ 1,249$ 1,249$ Additional paid in capital 4,591,204 4,603,107 4,602,201 4,601,808 4,601,363 Cumulative distributions in excess of earnings (1,945,731) (1,928,350) (1,899,536) (1,867,611) (1,886,346) Other comprehensive loss (4,418) (1,373) (1,809) (1,968) (2,246) Total equity 2,642,300$ 2,674,634$ 2,702,106$ 2,733,478$ 2,714,020$ Total liabilities and equity 5,222,679$ 5,126,233$ 5,157,608$ 4,738,878$ 4,883,587$ Supplemental Information - Q3 2015 8 As of Period End Accounts payable, accrued expenses, and accrued capital expenditures Consolidated Balance Sheet
Unaudited (in thousands, except per-share amounts) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Revenues: Rental income 107,011$ 112,916$ 112,809$ 105,215$ 104,938$ Tenant reimbursements 22,627 26,519 28,249 24,847 23,861 Hotel income 6,941 6,964 4,993 5,587 6,732 Other property income (1) 332 430 353 413 573 Lease termination income (2) 808 1,295 1,139 1,829 877 Total revenues 137,719$ 148,124$ 147,543$ 137,891$ 136,981$ Operating expenses: Property operating costs 46,538 48,083 49,754 44,766 41,144 Hotel operating costs 5,331 5,147 4,591 4,923 5,039 Asset and property management fees 472 503 397 612 682 Depreciation 32,441 33,813 34,007 30,313 29,980 Amortization 20,276 23,738 23,219 20,625 19,476 Impairment loss on real estate assets - - - 10,148 - General and administrative 6,797 7,080 8,044 8,081 7,836 Acquisition fees and expenses 1,680 - 1,995 44 7,996 Total operating expenses 113,535$ 118,364$ 122,007$ 119,512$ 112,153$ Operating income 24,184$ 29,760$ 25,536$ 18,379$ 24,828$ Other income (expense): Interest expense (20,212) (20,965) (19,684) (17,868) (17,473) Capital lease obligation interest expense (1,800) (1,800) (1,800) (1,800) (1,800) Development authority bond income 1,800 1,800 1,800 1,800 1,800 Interest and other income 8 7 33 60 3 Interest rate swap valuation adjustment - 1,319 1,315 1,322 1,300 Interest expense associated with interest rate swaps - (1,321) (1,321) (1,330) (1,328) Loss on interest rate swaps (1,102) - - - - Loss on early extinguishment of debt (2,672) - (477) (23) - Total other income (expense) (23,978)$ (20,960)$ (20,134)$ (17,839)$ (17,498)$ 206$ 8,800$ 5,402$ 540$ 7,330$ Income tax (expense) benefit (245) (91) 196 (246) (409) (39)$ 8,709$ 5,598$ 294$ 6,921$ Gain on sale of real estate assets 20,182 - - 56,668 18,607 Income from continuing operations 20,143$ 8,709$ 5,598$ 56,962$ 25,528$ Discontinued operations: Operating loss - - - (87) (540) Loss on disposition of discontinued operations - - - (649) - Loss from discontinued operations -$ -$ -$ (736)$ (540)$ 20,143$ 8,709$ 5,598$ 56,226$ 24,988$ 124,359 124,925 124,903 124,868 124,863 0.16$ 0.07$ 0.04$ 0.45$ 0.20$ 124,460 125,017 124,935 124,944 124,938 0.16$ 0.07$ 0.04$ 0.45$ 0.20$ (1) Other property income includes (i) property management fee income, (ii) cafeteria revenue and (iii) fitness center revenue. Supplemental Information - Q3 2015 9 Columbia Property Trust, Inc. Consolidated Statements of Operations (3) Includes nonrecurring fees incurred under the consulting and transition services agreements which were terminated at expiration effective (2) Includes adjustments for straight-line rent related to lease terminations. Net income per share - basic Net income Weighted-average common shares outstanding - basic Weighted-average common shares outstanding - diluted Net income per share - diluted Three Months Ended Income before income tax (expense) benefit and gains on sale of real estate assets Income from continuing operations before gains on sale of real estate assets
Unaudited (in thousands, except per-share amounts) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Net Operating Income - Cash Basis 77,212$ 87,068$ 85,001$ 80,940$ 86,125$ Lease termination income (1) 808 1,295 1,139 1,254 (181) General and administrative (G&A) (6,797) (7,080) (8,044) (8,081) (7,836) Shelf registration costs - - - - 269 Stock based compensation expense in G&A (2) 896 1,015 1,014 464 488 Straight-line rent receivable write-off in G&A (3) 6 4 6 203 - Interest expense - cash (net) (19,058) (21,370) (19,927) (18,410) (18,017) Income tax (expense) benefit (245) (91) 196 (246) (409) Operating loss from discontinued operations - cash basis - - - (79) (548) Recurring capital expenditures (4) (9,140) (15,005) (13,147) (20,937) (10,491) AFFO 43,682$ 45,836$ 46,238$ 35,108$ 49,400$ AFFO per share (basic) 0.35$ 0.37$ 0.37$ 0.28$ 0.40$ AFFO per share (diluted) 0.35$ 0.37$ 0.37$ 0.28$ 0.40$ Additional amortization of lease assets (liabilities) (5) 2,401 2,210 2,742 2,555 931 Straight-line rental income (6) 4,957 3,822 3,937 2,660 3,253 Gain on interest rate swaps - 1,319 1,315 1,322 1,300 Stock based compensation expense in G&A (2) (896) (1,015) (1,014) (464) (488) Non-cash interest expense (7) (1,152) (917) (1,069) (758) (785) Total other non-cash adjustments 5,310 5,419 5,911 5,315 4,211 Recurring capital expenditures (4) 9,140 15,005 13,147 20,937 10,491 Normalized FFO 58,132$ 66,260$ 65,296$ 61,360$ 64,102$ Normalized FFO per share (basic) 0.47$ 0.53$ 0.52$ 0.49$ 0.51$ Normalized FFO per share (diluted) 0.47$ 0.53$ 0.52$ 0.49$ 0.51$ 124,359 124,925 124,903 124,868 124,863 124,460 125,017 124,935 124,944 124,938 Supplemental Information - Q3 2015 10 (1) Effective January 1, 2015, lease termination income is presented on an accrual basis. Prior to that date, lease termination income is presented on a cash basis. (4) See page 28 of this supplemental report for a description of Recurring Capital Expenditures. (5) GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Such intangible lease assets (liabilities) arise from the allocation of acquisition price related to direct costs associated with obtaining a new tenant, the value of opportunity costs associated with lost rentals, the value of tenant relationships, and the value of effective rental rates of in-place leases that are above or below market rates of comparable leases at the time of acquisition. Like real estate values, market lease rates in aggregate have historically risen or fallen with local market conditions. (2) This item represents the noncash impact of compensation expense related to stock grants under our 2013 Long-Term Incentive Plan within general and administrative expense. (3) Includes adjustments for straight line-rent related to lease terminations within general and administrative expense. Three Months Ended Columbia Property Trust, Inc. Weighted-average common shares outstanding - basic Weighted-average common shares outstanding - diluted Normalized Funds From Operations - NFFO (7) This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments. GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. (6) Prior to first quarter 2015, adjustments for straight-line rent related to lease terminations were included.
Unaudited (in thousands) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 GAAP Basis Revenues: Rental Income 86,374$ 87,238$ 88,030$ 88,136$ 87,418$ Tenant Reimbursements 20,389 21,635 22,171 21,578 21,173 Hotel Income 6,941 6,964 4,993 5,587 6,732 Other Property Income 324 332 333 369 360 Total Revenues 114,028$ 116,169$ 115,527$ 115,670$ 115,683$ Operating Expenses: Property Operating Costs (37,855) (37,961) (38,481) (39,301) (37,314) Hotel Operating Costs (5,331) (5,147) (4,591) (4,923) (5,039) Total Operating Expenses (43,186)$ (43,108)$ (43,072)$ (44,224)$ (42,353)$ Net Operating Income GAAP - Same Store 70,842$ 73,061$ 72,455$ 71,446$ 73,330$ Net Operating Income from: Acquisitions (1) 13,778 10,445 10,407 4,323 663 Dispositions (2) (50) 9,594 8,818 9,964 15,284 Net Operating Income GAAP - Total 84,570$ 93,100$ 91,680$ 85,733$ 89,277$ Cash Basis Revenues: Rental Income 82,466$ 82,895$ 82,544$ 83,797$ 83,218$ Tenant Reimbursements 20,389 21,635 22,171 21,578 21,173 Hotel Income 6,941 6,964 4,993 5,587 6,732 Other Property Income 324 332 333 368 360 Total Revenues 110,120$ 111,826$ 110,041$ 111,330$ 111,483$ Operating Expenses: Property Operating Costs (37,339) (37,445) (37,965) (38,549) (36,565) Hotel Operating Costs (5,331) (5,147) (4,591) (4,923) (5,039) Total Operating Expenses (42,670)$ (42,592)$ (42,556)$ (43,472)$ (41,604)$ Net Operating Income Cash - Same Store 67,450$ 69,234$ 67,485$ 67,858$ 69,879$ Net Operating Income from: Acquisitions (1) 9,812 7,468 7,597 2,414 401 Dispositions (2) (50) 10,366 9,919 10,668 15,845 Net Operating Income Cash - Total 77,212$ 87,068$ 85,001$ 80,940$ 86,125$ Reconciliation of GAAP to Cash Net Operating Income Net Operating Income GAAP - Total 84,570$ 93,100$ 91,680$ 85,733$ 89,277$ Less amounts included in GAAP basis rental income: Straight-line rental inc. (excluding lease terminations) (4,957) (3,822) (3,937) (2,288) (2,195) Net effect of above/(below) lease market amortization (2,401) (2,210) (2,742) (2,505) (957) Net Operating Income Cash - Total 77,212$ 87,068$ 85,001$ 80,940$ 86,125$ Supplemental Information - Q3 2015 11 Columbia Property Trust, Inc. (1) Includes the following acquisitions: 229 West 43rd Street, 315 Park Avenue South, 1881 Campus Commons, 116 Huntington Avenue, and 650 California Street. Three Months Ended (2) Includes the following dispositions: 170 Park Avenue, 180 Park Avenue, 1580 West Nursery Road, Acxiom, Highland Landmark III, The Corridors III, 215 Diehl Road, 544 Lakeview, Bannockburn Lake III, 550 King Street, Robbins Road, Lenox Park Buildings, 9 Technology Drive, and 7031 Columbia Gateway Drive. Net Operating Income
Unaudited ($ in thousands) (at 9/30/2015) Debt Instrument - Secured Maturity Rate Rate Type Balance % of Total Debt Mortgage Notes SanTan Corporate Center October-16 5.83% Fixed 39,000$ 1.7% 221 Main Street May-17 3.95% Fixed 73,000 3.2% 263 Shuman Boulevard July-17 5.55% Fixed 49,000 2.2% One Glenlake Parkway December-18 5.80% Fixed 29,992 1.3% 650 California Street July-19 3.60% Fixed 129,395 5.7% Market Square July-23 5.07% Fixed 325,000 14.4% Weighted Average / Secured - Mortgage Notes 5.2 Years 4.76% 645,387$ 28.5% Debt Instrument - Unsecured Maturity Rate Rate Type Balance % of Total Debt Bank Facilities $300 Million Bridge Loan (1) February-16 LIBOR + 110 bps Floating 300,000$ 13.2% $500 Million Revolving Credit Facility (2) July-19 LIBOR + 100 bps Floating 264,000 11.7% $300 Million Term Loan (3) July-20 LIBOR + 110 bps Floating 300,000 13.3% $150 Million Term Loan (4) July-22 3.52% Fixed 150,000 6.7% Weighted Average / Bank Facilities 3.5 Years 1.73% 1,014,000$ 44.9% Senior Notes $250 Million Notes @ 5.875% April-18 5.88% Fixed 250,000$ 11.1% $350 Million Notes @ 4.150% April-25 4.15% Fixed 350,000 15.5% Weighted Average / Senior Notes 6.6 Years 4.87% 600,000$ 26.6% Weighted Average / Unsecured 4.7 Years 2.89% 1,614,000$ 71.5% Weighted Average / Total Debt 4.8 Years 3.43% 2,259,387$ 100.0% Weighted Ave Maturity Weighted Ave Rate - Qtr Balance % of Total Debt 6.0 Years 4.68% 1,395,387$ 61.8% 3.0 Years 1.41% 864,000 38.2% Total 4.8 Years 3.43% 2,259,387$ 100.0% Supplemental Information - Q3 2015 12 Fixed Rate Debt Floating Rate Debt (4) Columbia Property Trust is party to an interest rate swap agreement, which effectively fixes its interest rate on the $150 Million Term Loan at 3.52% per annum and terminates on July 29, 2022. The spread of 1.55% over the swapped rate is based on the company's credit rating. This interest rate swap agreement qualifies for hedge accounting treatment; therefore, changes in fair value are recorded as a market value adjustment to interest rate swap in our consolidated statements of other comprehensive income. (2) The Revolving Credit Facility ($500MM) bears interest at a rate based on, at the option of Columbia Property Trust, LIBOR for seven days, one-, two-, three-, or six-month periods, plus an applicable margin ranging from 0.875% to 1.55% based on credit rating, or the alternate base rate which is the greater of (a) Prime Rate, (b) Fed Funds plus 1/2 of 1%, and (c) the Libor Rate plus 1%, plus an applicable margin ranging from 0.00% to 0.55% based on credit rating. This facility carries two six-month extension options. (3) The $300 Million Term Loan bears interest at a rate based on, at the option of Columbia Property Trust, LIBOR for seven days, one-, two-, three-, or six-month periods, plus an applicable margin ranging from 0.90% to 1.75% based on credit rating, or the alternate base rate which is the greater of (a) Prime Rate, (b) Fed Funds plus 1/2 of 1%, and (c) the Libor Rate plus 1%, plus an applicable margin ranging from 0.00% to 0.75% based on credit rating. (1) The $300 Million Bridge Loan bears interest, at the option of Columbia Property Trust, at either (a) an alternate base rate plus an applicable margin ranging from 0.00% to 0.75% based on credit rating, or (b) LIBOR plus an applicable margin based on five stated pricing levels ranging from 0.90% to 1.75% based on credit rating. This loan carries one six-month extension option. Fixed and Floating Rate Debt Analysis Columbia Property Trust, Inc. Debt Overview
Unaudited (at 9/30/2015) Bond Covenant Compliance Metric Actual (9/30/15) Debt to Total Asset Value Ratio Max 60% 38% Interest Coverage Ratio (adjusted EBITDA) Min 1.50x 3.43x Secured Debt to Total Asset Value Ratio Max 40% 11% Maintenance of Total Unencumbered Assets Min 150% 282% Term Loan / Bridge Loan / Revolving Credit Facility Covenant Compliance Metric Actual (9/30/15) Debt to Total Asset Value Ratio Max 60% 40% Interest Coverage Ratio (adjusted EBITDA) Min 1.50x 3.22x Secured Debt to Total Asset Value Ratio Max 40% 11% Unencumbered Asset Coverage Ratio Min 1.66x 2.69x Unencumbered Interest Coverage Ratio Min 1.75x 5.09x Supplemental Information - Q3 2015 13 Columbia Property Trust, Inc. Debt Covenant Compliance
Unaudited ($ in thousands) (at 9/30/2015) Secured Debt Unsecured Debt Unsecured Debt Total Debt % of Weighted Average % of Gross Mortgage Notes Bank Facilities Senior Notes Balance Total Debt Rate - Qtr (1) Real Estate Assets 39,000$ 300,000$ -$ 339,000$ 14.9% 1.90% 5.9% 122,000 - - 122,000 5.4% 4.59% 2.1% 29,992 - 250,000 279,992 12.4% 5.87% 4.9% 129,395 264,000 - 393,395 17.4% 2.24% 6.9% - 300,000 - 300,000 13.3% 1.31% 5.2% - 150,000 - 150,000 6.7% 3.52% 2.6% 325,000 - - 325,000 14.4% 5.07% 5.7% - - 350,000 350,000 15.5% 4.15% 6.1% 645,387$ 1,014,000$ 600,000$ 2,259,387$ 100.0% 3.43% 39.4% 28.5% 44.9% 26.6% Supplemental Information - Q3 2015 14 2016 Columbia Property Trust, Inc. Debt Maturities Maturity Year 2017 2018 2019 2023 2025 % of Total Debt (1) Includes effective rates on variable rate loans swapped to fixed. 2020 2022 Total $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Maturity Schedule Mortgage Debt Bridge Loan Bonds Line of Credit Term Loan 5.87% 1.90% 4.59% 5.07% 2.24% 4.15% 1.31% 3.52%
Unaudited (SF & $ in thousands) (at 9/30/2015) Market Ownership % Secured Debt? Annualized Lease Revenue (ALR) % of ALR ALR / Leased S.F. Rentable S.F. Leased S.F. % Leased University Circle San Francisco, CA 100% 34,948$ 6.9% 78.53$ 451 445 98.7% 333 Market Street San Francisco, CA 100% 24,369 4.8% 37.09 657 657 100.0% 650 California Street San Francisco, CA 100% Yes 22,795 4.5% 52.64 477 433 90.8% 221 Main Street San Francisco, CA 100% Yes 21,059 4.1% 58.34 378 361 95.5% Subtotal - San Francisco 103,171 20.3% 54.42 1,963 1,896 96.6% 229 West 43rd Street New York, NY 100% 32,743 6.4% 69.67 481 470 97.7% 222 East 41st Street New York, NY 100% 28,657 5.6% 80.95 372 354 95.2% 315 Park Avenue South New York, NY 100% 21,734 4.3% 76.80 328 283 86.3% Subtotal - New York 83,134 16.3% 75.10 1,181 1,107 93.7% Market Square (1) Washington, D.C. 100% Yes 44,503 8.7% 80.48 687 553 80.5% 80 M Street Washington, D.C. 100% 13,151 2.6% 52.19 285 252 88.4% Subtotal - Washington, D.C. 57,654 11.3% 71.62 972 805 82.8% 5 Houston Center Houston, TX 100% 26,282 5.2% 49.68 581 529 91.0% Energy Center I Houston, TX 100% 12,852 2.5% 38.71 332 332 100.0% 515 Post Oak Houston, TX 100% 4,906 1.0% 27.88 274 176 64.2% Subtotal - Houston 44,040 8.7% 42.47 1,187 1,037 87.4% Lindbergh Center Atlanta, GA 100% 22,003 4.2% 23.04 955 955 100.0% Three Glenlake Parkway Atlanta, GA 100% 7,477 1.5% 21.06 355 355 100.0% One Glenlake Parkway Atlanta, GA 100% Yes 6,422 1.3% 25.38 350 253 72.3% Subtotal - Atlanta 35,902 7.0% 22.97 1,660 1,563 94.2% International Financial Tower Northern New Jersey 100% 23,189 4.5% 37.58 630 617 97.9% Cranberry Woods Drive Pittsburgh, PA 100% 15,565 3.1% 18.89 824 824 100.0% South Jamaica Street Denver, CO 100% 13,064 2.6% 27.33 478 478 100.0% 116 Huntington Avenue Boston, MA 100% 9,993 2.0% 46.92 271 213 78.6% Sterling Commerce Dallas, TX 100% 7,880 1.5% 25.42 310 310 100.0% Pasadena Corporate Park Los Angeles, CA 100% 7,486 1.5% 30.06 264 249 94.3% SanTan Corporate Center Phoenix, AZ 100% Yes 6,534 1.3% 25.03 267 261 97.8% Key Center Tower Cleveland, OH 100% 35,302 6.9% 32.18 1,325 1,097 82.8% Key Center Marriott (Hotel) Cleveland, OH 100% - 0.0% - - - 0.0% 100 East Pratt Baltimore, MD 100% 25,752 5.1% 40.17 653 641 98.2% 80 Park Plaza Northern New Jersey 100% 20,351 4.0% 21.18 961 961 100.0% 800 North Frederick Suburban Maryland 100% 7,219 1.4% 18.37 393 393 100.0% 263 Shuman Boulevard Chicago, IL 100% Yes 6,615 1.3% 18.69 354 354 100.0% 1881 Campus Commons Washington, D.C. 100% 6,316 1.2% 31.11 244 203 83.2% Subtotal - Potential Dispositions 101,555 19.9% 27.83 3,930 3,649 92.8% Total - All Properties 509,167$ 100.0% 39.14$ 13,937 13,009 93.3% Supplemental Information - Q3 2015 15 (1) On October 28, 2015, CXP entered into a joint venture with a third party and transferred its interest in Market Square to the joint venture. CXP retains a 51% interest in the unconsolidated joint venture. Operational and portfolio information contained in this supplement does not reflect this transaction. Property Columbia Property Trust, Inc. Property Overview
Unaudited (SF & $ in thousands) (at 9/30/2015) State Number of Properties Annualized Lease Revenue (ALR) % of ALR Rentable Square Footage Leased Square Footage % Leased San Francisco CA 4 103,171$ 20.3% 1,963 1,896 96.6% New York NY 3 83,134 16.3% 1,181 1,107 93.7% Washington, D.C. DC 2 57,654 11.3% 972 805 82.8% Houston TX 3 44,040 8.7% 1,187 1,037 87.4% Atlanta GA 3 35,902 7.0% 1,660 1,563 94.2% Northern New Jersey NJ 1 23,189 4.5% 630 617 97.9% Pittsburgh PA 1 15,565 3.1% 824 824 100.0% Denver CO 1 13,064 2.6% 478 478 100.0% Boston MA 1 9,993 2.0% 271 213 78.6% Dallas TX 1 7,880 1.5% 310 310 100.0% Los Angeles CA 1 7,486 1.5% 264 249 94.3% Phoenix AZ 1 6,534 1.3% 267 261 97.8% Potential Dispositions - 7 101,555 19.9% 3,930 3,649 92.8% Total 29 509,167$ 100.0% 13,937 13,009 93.3% Supplemental Information - Q3 2015 16 Columbia Property Trust, Inc. Geography Market Summary 20.3% 16.3% 11.3% 8.7% 7.0% 4.5% 3.1% 2.6% 2.0% 1.5% 22.7% Market Distribution by Annualized Lease Revenue San Francisco Denver New York Pittsburgh Other Washington, D.C. Boston Atlanta Houston Dallas Northern New Jersey
Unaudited (SF & $ in thousands) (at 9/30/2015) Tenant Credit Rating (1) Number of Properties Annualized Lease Revenue (ALR) % of ALR Leased Square Footage % of Leased Square Footage Wtg Ave Remaining Lease Term Years (2) Jones Day Not Rated 1 28,124$ 5.5% 353 2.7% 1.1 Wells Fargo Bank N.A. AA- 3 28,084 5.5% 699 5.4% 9.9 AT&T Corporation/AT&T Services BBB+ 1 22,003 4.3% 955 7.3% 5.3 PSEG Services Corporation BBB+ 1 20,351 4.0% 961 7.4% 14.1 Credit Suisse A 2 19,473 3.8% 265 2.0% 2.1 Pershing LLC A+ 1 17,457 3.3% 471 3.6% 5.7 Westinghouse Electric Company BBB 1 15,565 3.1% 824 6.3% 9.7 T Rowe Price Associates Inc. Not Rated 1 15,411 3.0% 425 3.3% 12.3 Yahoo! B+ 1 13,616 2.7% 193 1.5% 9.8 Keybank National Association A- 1 13,248 2.6% 478 3.7% 14.8 CH2M Hill, Inc. Not Rated 1 13,064 2.6% 478 3.7% 2.0 Foster Wheeler BBB- 1 12,850 2.5% 332 2.6% 2.9 IBM AA- 3 9,967 2.0% 482 3.7% 0.7 Newell Rubbermaid, Inc. BBB- 2 8,945 1.8% 411 3.2% 5.1 DLA Piper US, LLP Not Rated 1 8,087 1.6% 119 0.9% 2.8 Shearman & Sterling Not Rated 1 7,386 1.5% 93 0.7% 0.5 DocuSign, Inc. Not Rated 1 7,195 1.4% 107 0.8% 8.8 OfficeMax B- 1 6,615 1.3% 354 2.7% 1.7 Edison Electric Institute Not Rated 1 6,021 1.2% 79 0.6% 14.8 Caremark PCS BBB+ 1 5,246 1.0% 207 1.6% 7.3 Subtotal - Top 20 278,708$ 54.7% 8,286 63.7% 6.7 All other 230,459 45.3% 4,723 36.3% 5.0 Total 509,167$ 100.0% 13,009 100.0% 5.9 (1) Credit rating may reflect the credit rating of the parent or a guarantor. Only the Standard & Poor's credit rating has been provided. (2) Based on Annualized Lease Revenue. Supplemental Information - Q3 2015 17 Columbia Property Trust, Inc. Top 20 Tenants & Tenant Industry Profile 16.7% 14.6% 11.8% 9.6% 7.8% 6.2% 6.1% 2.6% 2.6% 2.5% 19.5% Tenant Industry Profile (2) Services - Legal Services Fire - Depository Institutions Trans & Util - Communication Services - Business Services Trans & Util - Electric, Gas, And Sanitary Services Services - Engineering & Management Services Fire - Nondepository Institutions Const. - Heavy Construction, ex. Building Fire - Security And Commodity Brokers Retail - Miscellaneous Retail Other
Unaudited (SF & $ in thousands) (at 9/30/2015) Expiring Annualized Lease Revenue (ALR) % of ALR Expiring Expiring Rentable Square Footage % of Rentable Square Footage Expiring -$ 0.0% 928 6.7% 1,701 0.3% 146 1.0% 67,736 13.3% 1,304 9.4% 69,318 13.6% 1,905 13.7% 38,693 7.6% 826 5.9% 18,444 3.6% 336 2.4% 33,688 6.6% 865 6.2% 60,647 11.9% 1,814 13.0% 31,152 6.1% 766 5.5% 26,021 5.1% 662 4.7% 11,947 2.4% 222 1.6% 37,288 7.3% 1,188 8.5% 35,604 7.0% 877 6.3% 1,579 0.3% 27 0.2% 15,569 3.1% 433 3.1% 59,780 11.8% 1,638 11.8% 509,167$ 100.0% 13,937 100.0% Supplemental Information - Q3 2015 18 2023 2029+ Total 2024 2025 2026 2027 2028 Columbia Property Trust, Inc. NOTE: Expirations that have been renewed are reflected above based on the renewal expiration date. Vacant 2015 2016 2017 Year 2018 2019 2020 2021 2022 Lease Expiration Schedule 0.3% 13.3% 13.6% 7.6% 3.6% 6.6% 11.9% 6.1% 5.1% 2.4% 7.3% 7.0% 0.3% 3.1% 11.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029+ Lease Expiration Schedule % of ALR Expiring
Columbia Property Trust, Inc. Unaudited (in thousands, except square footage & percentages) Geography Expiring Square Footage Expiring ALR (1) Expiring Square Footage Expiring ALR (1) Expiring Square Footage Expiring ALR (1) Expiring Square Footage Expiring ALR (1) Expiring Square Footage Expiring ALR (1) San Francisco 6,873 328 38,005 2,202 122,543 4,884 29,036 1,891 196,457 9,305 New York - - - - - - 69,945 4,731 69,945 4,731 Washington, D.C. 160 4 - - 107,396 8,523 97,238 5,497 204,794 14,024 Houston - - - - - - 8,150 363 8,150 363 Atlanta - - - - - - 4,213 120 4,213 120 Northern New Jersey - - - - - - - - - - Pittsburgh - - - - - - - - - - Denver - - - - - - - - - - Boston 2,179 94 - - - - - - 2,179 94 Dallas - - - - - - - - - - Los Angeles - - - - - - - - - - Phoenix - - - - - - - - - - Potential Dispositions 136,565 1,275 - - 426,120 8,260 1,190 40 563,875 9,575 Total 145,777 1,701$ 38,005 2,202$ 656,059 21,667$ 209,772 12,642$ 1,049,613 38,212$ % of Total Portfolio 1.0% 0.3% 0.3% 0.4% 4.7% 4.3% 1.5% 2.5% 7.5% 7.5% Supplemental Information - Q3 2015 19 Lease Expiration by Market Total Three Months Ended 12/31/15 3/31/16 6/30/16 9/30/16 (1) Expiring ALR is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
Unaudited, Weighted average unless otherwise noted 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Number of Leases 4 13 1 6 6 Square Feet of Leasing 18,560 104,705 40,050 189,393 44,986 Lease Term (months) 51 99 52 157 158 Cash Rent Releasing Spread -5.1% 22.8% 46.6% -0.8% 40.1% GAAP Rent Releasing Spread 8.5% 36.7% 69.4% 6.5% 49.5% Tenant Improvements per Square Foot 11.19 35.01 7.50 91.41 82.84 Leasing Commissions per Square Foot 7.43 16.18 12.00 44.50 3.58 Total per Square Foot 18.62$ 51.19$ 19.50$ 135.91$ 86.42$ Tenant Improvements per Square Foot per Year of Lease Term 2.61 4.23 1.72 7.01 6.29 Leasing Commissions per Square Foot per Year of Lease Term 1.73 1.96 2.76 3.41 0.27 Total per Square Foot per Year 4.34$ 6.19$ 4.48$ 10.42$ 6.56$ 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Number of Leases 11 10 4 6 8 Square Feet of Leasing 95,855 22,682 53,924 38,361 71,756 Lease Term (months) 86 81 100 89 93 Tenant Improvements per Square Foot 26.99 27.22 62.88 57.07 56.97 Leasing Commissions per Square Foot 17.59 7.11 18.31 20.20 20.69 Total per Square Foot 44.58$ 34.33$ 81.19$ 77.27$ 77.66$ Tenant Improvements per Square Foot per Year of Lease Term 3.77 4.03 7.52 7.70 7.37 Leasing Commissions per Square Foot per Year of Lease Term 2.46 1.05 2.19 2.72 2.68 Total per Square Foot per Year 6.23$ 5.08$ 9.71$ 10.42$ 10.04$ 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Number of Leases 1 5 4 7 1 Square Feet of Leasing 24,591 37,826 136,175 95,711 6,287 Lease Term (months) 134 80 129 103 88 Cash Rent Releasing Spread 8.6% 21.8% 64.3% 6.2% 187.5% GAAP Rent Releasing Spread 7.6% 33.9% 85.3% 14.6% 225.1% Tenant Improvements per Square Foot 60.66 37.39 77.07 43.24 53.33 Leasing Commissions per Square Foot 33.11 26.10 35.73 28.42 20.00 Total per Square Foot 93.77$ 63.49$ 112.80$ 71.66$ 73.33$ Tenant Improvements per Square Foot per Year of Lease Term 5.45 5.62 7.16 5.02 7.27 Leasing Commissions per Square Foot per Year of Lease Term 2.97 3.92 3.32 3.30 2.73 Total per Square Foot per Year 8.42$ 9.54$ 10.48$ 8.32$ 10.00$ 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Number of Leases 16 28 9 19 15 Square Feet of Leasing 139,006 165,213 230,149 323,465 123,029 Lease Term (months) 101 92 113 141 117 Cash Rent Releasing Spread 6.9% 22.5% 61.3% 0.7% 58.7% GAAP Rent Releasing Spread 7.7% 35.8% 82.7% 8.2% 71.6% Tenant Improvements per Square Foot 38.37 35.07 65.03 79.44 66.60 Leasing Commissions per Square Foot 22.68 18.27 29.35 39.53 14.15 Total per Square Foot 61.05$ 53.34$ 94.38$ 118.97$ 80.75$ Tenant Improvements per Square Foot per Year of Lease Term 3.91 4.52 6.30 6.50 6.97 Leasing Commissions per Square Foot per Year of Lease Term 2.45 2.28 2.96 3.30 1.80 Total per Square Foot per Year 6.36$ 6.80$ 9.26$ 9.80$ 8.77$ (1) Includes executed leases that have not yet commenced for space covered by an existing lease. Supplemental Information - Q3 2015 20 Total Leases Renewal Leases New Leases (Space Vacant > 1 Year) New Leases (Space Vacant < 1 Year) (1) Columbia Property Trust, Inc. Three Months Ended Three Months Ended Three Months Ended Three Months Ended Leasing Summary
Unaudited (SF & $ in thousands) (at 9/30/2015) Rentable Leased Percent Square Footage Square Footage Leased As of June 30, 2015 16,260 14,976 92.1% Portfolio Activity (1) Acquisition: 229 West 43rd Street 481 470 97.7% Dispositions: 180 Park Avenue (224) (160) 71.4% 170 Park Avenue (145) - 0.0% 1580 West Nursery Road (315) (315) 100.0% Acxiom (322) (322) 100.0% Highland Landmark III (273) (186) 68.1% The Corridors III (222) (211) 95.0% 215 Diehl Road (162) (162) 100.0% 544 Lakeview (139) (71) 51.1% Bannockburn Lake III (106) - 0.0% Robbins Road (458) (458) 100.0% 550 King Street (490) (490) 100.0% Subtotal 13,885 13,071 94.1% Leasing Activity New Leases (2) 52 312 Lease Expirations/Early Terminations (374) Net Absorption 52 (62) As of September 30, 2015 13,937 13,009 93.3% (1) As of acquisition/disposition date. Supplemental Information - Q3 2015 21 (2) New leasing activity for space that was either vacant at the beginning of the quarter or that became available due to expiration/termination of an existing lease. Columbia Property Trust, Inc. Occupancy Summary 93.3% 92.1% 92.3% 93.3% 93.5% 50% 60% 70% 80% 90% 100% 9/30/15 6/30/15 3/31/15 12/31/14 9/30/14 Percent Leased
Unaudited (SF in thousands) (at 9/30/2015) Rentable Square Footage Leased Square Footage Percent Leased Commenced Occupancy Average Economic Occupancy (1) San Francisco 1,963 1,896 96.6% 95.4% 92.5% New York 1,181 1,107 93.7% 93.7% 86.6% Washington, D.C. 972 805 82.8% 80.1% 69.7% Houston 1,187 1,037 87.4% 84.2% 82.9% Atlanta 1,660 1,563 94.2% 93.4% 88.6% Other Markets 3,044 2,952 97.0% 96.9% 93.7% Potential Dispositions (2) 3,930 3,649 92.8% 89.5% 89.7% Total 13,937 13,009 93.3% 91.7% 88.6% (1) Total square feet of leases that have commenced and the tenant is paying rent divided by total rentable square feet. Monthly average for the current quarter. Supplemental Information - Q3 2015 22 Columbia Property Trust, Inc. Occupancy by Market (1) Property acquired subsequent to quarter end. Unless explicitly stated, operational and portfolio information contained in this supplement does not reflect this (2) Includes the following assets: Key Center Tower, Key Center Marriott, 100 East Pratt, 80 Park Plaza, 800 North Frederick, 263 Shuman Boulevard, and 1881 Campus Commons (see page 15).
Unaudited ($ in thousands) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Recurring 2,194$ 2,971$ 2,156$ 4,999$ 3,926$ Non-Recurring 11,594 6,869 3,977 815 1,616 Building Capital 13,788$ 9,840$ 6,133$ 5,814$ 5,542$ Recurring 6,700$ 11,219$ 7,366$ 4,350$ 5,294$ Non-Recurring 2,132 5,745 2,567 7,068 5,685 Tenant Improvements 8,832$ 16,964$ 9,933$ 11,418$ 10,979$ Recurring 750$ 685$ 2,824$ 7,166$ 1,456$ Non-Recurring 2,845 1,167 1,327 1,208 834 Leasing Commissions 3,595$ 1,852$ 4,151$ 8,374$ 2,290$ Recurring (504)$ 130$ 801$ 4,422$ (185)$ Non-Recurring 336 (492) 2,884 (3,950) (218) Other Leasing Costs (168)$ (362)$ 3,685$ 472$ (403)$ Total Recurring 9,140$ 15,005$ 13,147$ 20,937$ 10,491$ Total Non-Recurring 16,907 13,289 10,755 5,141 7,917 Total Capital Expenditures 26,047$ 28,294$ 23,902$ 26,078$ 18,408$ NOTE: See page 28 of this supplemental report for a description of Recurring and Non-Recurring Capital Expenditures. Supplemental Information - Q3 2015 23 Capital Expenditures Three Months Ended Columbia Property Trust, Inc. Capital Expenditure Summary
Unaudited ($ in thousands) (at 10/29/2015) Acquisitions Location Acquisition Date Percent Ownership Purchase Price Rentable Square Footage $ / SF % Leased at Acquisition 229 West 43rd Street New York, NY 8/4/2015 100.0% 516,000$ 481,110 1,073$ 97.7% 315 Park Avenue South New York, NY 1/7/2015 100.0% 372,000 326,812 1,138 93.9% 1881 Campus Commons Reston, VA 1/7/2015 100.0% 64,000 244,565 262 78.0% Subtotal (2 Property Portfolio) 436,000 571,377 763 116 Huntington Avenue Boston, MA 1/8/2015 100.0% 152,000 270,943 561 77.8% 650 California Street San Francisco, CA 9/9/2014 100.0% 310,200 476,592 651 88.1% 221 Main Street San Francisco, CA 4/22/2014 100.0% 228,800 374,598 611 82.8% Total - Acquisitions 1,643,000$ 2,174,620 Dispositions Location Disposition Date Percent Ownership Sale Price Rentable Square Footage $ / SF % Leased at Disposition 180 Park Avenue Northern New Jersey 7/1/2015 100.0% 223,837 71.4% 170 Park Avenue Northern New Jersey 7/1/2015 100.0% 145,000 0.0% 1580 West Nursery Road Baltimore, MD 7/1/2015 100.0% 315,350 100.0% Acxiom Chicago, IL 7/1/2015 100.0% 321,852 100.0% Highland Landmark III Chicago, IL 7/1/2015 100.0% 272,975 68.1% The Corridors III Chicago, IL 7/1/2015 100.0% 221,940 95.0% 215 Diehl Road Chicago, IL 7/1/2015 100.0% 161,865 100.0% 544 Lakeview Chicago, IL 7/1/2015 100.0% 139,218 51.1% Bannockburn Lake III Chicago, IL 7/1/2015 100.0% 106,495 0.0% Robbins Road Boston, MA 7/1/2015 100.0% 458,237 100.0% 550 King Street Boston, MA 7/1/2015 100.0% 490,119 100.0% Subtotal (11 Property Portfolio) 433,250$ 2,856,888 152$ Lenox Park Buildings Atlanta, GA 10/3/2014 100.0% 290,000 1,040,327 279 100.0% 9 Technology Drive Boston, MA 8/22/2014 100.0% 47,000 250,813 187 100.0% 7031 Columbia Gateway Drive Baltimore, MD 7/1/2014 100.0% 59,509 247,624 240 100.0% 200 South Orange Orlando, FL 6/30/2014 100.0% 18,800 128,296 147 100.0% 160 Park Avenue Northern New Jersey 6/4/2014 100.0% 10,200 240,274 42 0.0% Total - Dispositions 858,759$ 4,764,222 Joint Ventures Location Closing Date % Ownership CXP/Partner Contributed Value Rentable Square Footage $ / SF % Leased at Execution Market Square (1) Washington, D.C. 10/28/2015 51% / 49% 595,000$ 687,310 866$ 80.5% Total - Joint Ventures 595,000$ 687,310 Total - Dispositions / Joint Ventures 1,453,759$ 5,451,532 Supplemental Information - Q3 2015 24 (1) Property acquired subsequent to quarter end. Unless explicitly stated, operational and portfolio information contained in this supplement does not reflect this Columbia Property Trust, Inc. Transaction Activity Property Name Property Name Property Name (1) On October 28, 2015, CXP entered into a joint venture with a third party and transferred its interest in Market Square to the joint venture. CXP retains a 51% interest in the unconsolidated joint venture. Operational and portfolio information contained in this supplement does not reflect this transaction.
Unaudited (in thousands, except per-share amounts) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Net Income 20,143$ 8,709$ 5,598$ 56,226$ 24,988$ Depreciation of real estate assets 32,441 33,813 34,007 30,313 29,980 Amortization of lease-related costs 20,276 23,738 23,219 20,625 19,476 Loss on disposition of real estate assets - discontinued operations - - - 649 - Gain on sale of real estate assets - continuing operations (20,182) - - (56,668) (18,607) Impairment loss on real estate assets - - - 10,148 - FFO 52,678$ 66,260$ 62,824$ 61,293$ 55,837$ Real estate acquisition-related costs 1,680 - 1,995 44 7,996 Shelf registration costs - - - - 269 Settlement of interest rate swap 1,102 - - - - Loss on early extinguishment of debt 2,672 - 477 23 - Normalized FFO 58,132$ 66,260$ 65,296$ 61,360$ 64,102$ Normalized FFO per share (basic) 0.47$ 0.53$ 0.52$ 0.49$ 0.51$ Normalized FFO per share (diluted) 0.47$ 0.53$ 0.52$ 0.49$ 0.51$ Additional amortization of lease assets (liabilities) (1) (2,401) (2,210) (2,742) (2,555) (931) Straight-line rental income (2) (4,957) (3,822) (3,937) (2,660) (3,253) Gain on interest rate swaps - (1,319) (1,315) (1,322) (1,300) Stock based compensation expense in G&A (3) 896 1,015 1,014 464 488 Non-cash interest expense (4) 1,152 917 1,069 758 785 Total other non-cash adjustments (5,310) (5,419) (5,911) (5,315) (4,211) Recurring capital expenditures (5) (9,140) (15,005) (13,147) (20,937) (10,491) AFFO 43,682$ 45,836$ 46,238$ 35,108$ 49,400$ AFFO per share (basic) 0.35$ 0.37$ 0.37$ 0.28$ 0.40$ AFFO per share (diluted) 0.35$ 0.37$ 0.37$ 0.28$ 0.40$ 124,359 124,925 124,903 124,868 124,863 124,460 125,017 124,935 124,944 124,938 (5) See page 28 of this supplemental report for a description of Recurring Capital Expenditures. Supplemental Information - Q3 2015 25 Columbia Property Trust, Inc. Adjusted Funds From Operations - AFFO (Reconciliation to Net Income) (4) This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments. GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. Three Months Ended (1) GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Such intangible lease assets (liabilities) arise from the allocation of acquisition price related to direct costs associated with obtaining a new tenant, the value of opportunity costs associated with lost rentals, the value of tenant relationships, and the value of effective rental rates of in-place leases that are above or below market rates of comparable leases at the time of acquisition. Like real estate values, market lease rates in aggregate have historically risen or fallen with local market conditions. (3) This item represents the noncash impact of compensation expense related to stock granted under our 2013 Long-Term Incentive Plan. (2) Prior to first quarter 2015, adjustments for straight-line rent related to lease terminations were included. Weighted-average common shares outstanding - basic Weighted-average common shares outstanding - diluted
Unaudited (in thousands) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Net Income 20,143$ 8,709$ 5,598$ 56,226$ 24,988$ Interest expense (net) 22,004 22,762 21,469 19,638 19,273 Interest income from development authority bonds (1,800) (1,800) (1,800) (1,800) (1,800) Income tax expense (benefit) 245 91 (196) 246 409 Depreciation 32,441 33,813 34,007 30,313 29,980 Amortization 20,276 23,738 23,219 20,625 19,476 EBITDA 93,309$ 87,313$ 82,297$ 125,248$ 92,326$ Impairment loss - - - 10,148 - Gain on sale of real estate assets (20,182) - - (56,668) (18,607) Real estate acquisition-related costs 1,680 - 1,995 44 7,996 Shelf registration costs - - - - 269 Settlement of interest rate swap 1,102 - - - - Loss on early extinguishment of debt 2,672 - 477 23 - Loss on disposition of real estate assets - discontinued operations - - - 649 - Adjusted EBITDA 78,581$ 87,313$ 84,769$ 79,444$ 81,984$ General and administrative 6,797 7,080 8,044 8,081 7,836 Shelf registration costs in G&A - - - - (269) Interest rate swap valuation adjustment - (1,319) (1,315) (1,322) (1,300) Interest expense associated with interest rate swaps - 1,321 1,321 1,330 1,328 Lease termination income (1) (808) (1,295) (1,139) (1,829) (877) Straight line rental income (4,957) (3,822) (3,937) (2,288) (2,195) Net effect of above/(below) market amortization (2,401) (2,210) (2,742) (2,505) (957) Non-cash property operations - - - (50) 27 Operating loss from discontinued operations - cash basis - - - 79 548 Net Operating Income - Cash Basis 77,212$ 87,068$ 85,001$ 80,940$ 86,125$ Less Net Operating Income from: Acquisitions (2) (9,812) (7,468) (7,597) (2,414) (401) Dispositions (3) 50 (10,366) (9,919) (10,668) (15,845) Same Store NOI - Cash Basis 67,450$ 69,234$ 67,485$ 67,858$ 69,879$ Supplemental Information - Q3 2015 26 Columbia Property Trust, Inc. Net Operating Income and Same Store Net Operating Income - Cash Basis (Reconciliation to Net Income) (3) Includes the following dispositions: 170 Park Avenue, 180 Park Avenue, 1580 West Nursery Road, Acxiom, Highland Landmark III, The Corridors III, 215 Diehl Road, 544 Lakeview, Bannockburn Lake III, 550 King Street, Robbins Road, Lenox Park Buildings, 9 Technology Drive, and 7031 Columbia Gateway Drive. (1) Includes adjustments for straight-line rent related to lease terminations. (2) Includes the following acquisitions: 229 West 43rd Street, 315 Park Avenue South, 1881 Campus Commons, 116 Huntington Avenue, and 650 California Street. Three Months Ended
Unaudited (in thousands) 9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014 Net Income 20,143$ 8,709$ 5,598$ 56,226$ 24,988$ Interest expense (net) 22,004 22,762 21,469 19,638 19,273 Interest income from development authority bonds (1,800) (1,800) (1,800) (1,800) (1,800) Income tax expense (benefit) 245 91 (196) 246 409 Depreciation 32,441 33,813 34,007 30,313 29,980 Amortization 20,276 23,738 23,219 20,625 19,476 EBITDA 93,309$ 87,313$ 82,297$ 125,248$ 92,326$ Impairment loss - - - 10,148 - Gain on sale of real estate assets (20,182) - - (56,668) (18,607) Real estate acquisition-related costs 1,680 - 1,995 44 7,996 Shelf registration costs - - - - 269 Settlement of interest rate swap 1,102 - - - - Loss on early extinguishment of debt 2,672 - 477 23 - Loss on disposition of real estate assets - discontinued operations - - - 649 - Adjusted EBITDA 78,581$ 87,313$ 84,769$ 79,444$ 81,984$ General and administrative 6,797 7,080 8,044 8,081 7,836 Shelf registration costs in G&A - - - - (269) Interest rate swap valuation adjustment - (1,319) (1,315) (1,322) (1,300) Interest expense associated with interest rate swaps - 1,321 1,321 1,330 1,328 Lease termination income (1) (808) (1,295) (1,139) (1,829) (877) Operating loss from discontinued operations - GAAP basis - - - 29 575 Net Operating Income - GAAP Basis 84,570$ 93,100$ 91,680$ 85,733$ 89,277$ Less Net Operating Income from: Acquisitions (2) (13,778) (10,445) (10,407) (4,323) (663) Dispositions (3) 50 (9,594) (8,818) (9,964) (15,284) Same Store NOI - GAAP Basis 70,842$ 73,061$ 72,455$ 71,446$ 73,330$ Supplemental Information - Q3 2015 27 Columbia Property Trust, Inc. (3) Includes the following dispositions: 170 Park Avenue, 180 Park Avenue, 1580 West Nursery Road, Acxiom, Highland Landmark III, The Corridors III, 215 Diehl Road, 544 Lakeview, Bannockburn Lake III, 550 King Street, Robbins Road, Lenox Park Buildings, 9 Technology Drive, and 7031 Columbia Gateway Drive. (2) Includes the following acquisitions: 229 West 43rd Street, 315 Park Avenue South, 1881 Campus Commons, 116 Huntington Avenue, and 650 California Street. Net Operating Income and Same Store Net Operating Income - GAAP Basis (Reconciliation to Net Income) Three Months Ended (1) Includes adjustments for straight-line rent related to lease terminations.
Supplemental Information - Q3 2015 28 Columbia Property Trust, Inc. Definitions Funds From Operations (“FFO”): FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), represents net income (computed in accordance with GAAP), plus depreciation of real estate assets and amortization of lease-related costs, excluding gains (losses) on sales of real estate and impairment losses on real estate assets. The Company computes FFO in accordance with NAREIT's definition, which may differ from the methodology for calculating FFO, or similarly titled measures, used by other companies and this may not be comparable to those presentations. We consider FFO an appropriate supplemental performance measure given its wide use by and relevance to investors and analysts. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assume that the value of real estate diminishes predictably over time. Normalized FFO: We calculate Normalized FFO by starting with FFO, as defined by NAREIT, and adjusting for (i) real estate acquisition-related costs, (ii) listing costs, (iii) loss on interest rate swaps and (iv) loss on early extinguishment of debt. Such items create significant earnings volatility. We believe Normalized FFO provides a meaningful measure of our operating performance and more predictability regarding future earnings potential. Normalized FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income; therefore, it should not be compared to other REITs' equivalent to Normalized FFO. EBITDA: EBITDA is defined as net income before interest, taxes, depreciation and amortization. We believe EBITDA is a reasonable measure of our liquidity. EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis liquidity measures. Other REITs may calculate EBITDA differently and our calculation should not be compared to that of other REITs. Included in this supplemental report are non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with GAAP. These measures include earnings (or components of earnings), as defined, from both continuing operations and discontinued operations. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the company's financial condition and results of operations can be found below. Adjusted Funds From Operations (“AFFO”): AFFO is calculated by adjusting Normalized FFO to exclude (i) additional amortization of lease assets (liabilities), (ii) straight-line rental income, (iii) gain (loss) on interest rate swaps, (iv) recurring capital expenditures, and adding back (v) stock based compensation expense and (vi) non-cash interest expense. Because AFFO adjusts for income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, we believe AFFO provides useful supplemental information. AFFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of our liquidity. Annualized Lease Revenue (“ALR”): ALR is the sum of (i) annualized rental payments (defined as base rent plus operating expense reimbursements, excluding rental abatements) for executed and commenced leases as well as leases executed but not yet commenced for vacant space, and (ii) annualized parking revenues, payable either under the terms of an executed lease or vendor contract. ALR excludes rental payments for executed leases that have not yet commenced for space covered by an existing lease. Adjusted EBITDA: Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and incrementally removing any impairment losses, gains or losses from sales of property, real estate acquisition-related costs, discontinued operations adjustments, or other extraordinary items. We do not include impairment losses in this measure because we feel these types of losses create volatility in our earnings and make it difficult to determine the earnings generated by our ongoing business. We believe adjusted EBITDA is a reasonable measure of our liquidity. Adjusted EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis liquidity measures. Other REITs may calculate adjusted EBITDA differently and our calculation should not be compared to that of other REITs. GAAP Net Operating Income (“GAAP NOI”): GAAP NOI is defined as Adjusted EBITDA adjusted for (i) portfolio general and administrative expense, (ii) interest rate swap valuation adjustments, (iii) interest expense associated with interest rates swaps, (iv) GAAP lease termination income, (v) discontinued operations adjustments. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. GAAP NOI is a non- GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. Recurring Capital Expenditures: Recurring Capital Expenditures are defined as capital expenditures incurred to maintain the building structure and functionality, and to lease space at our properties in their current condition. Recurring capital expenditures include building capital, tenant improvements, and leasing commissions. This measure excludes capital for first generation leasing and acquisitions. Non-Recurring Capital Expenditures : Non-Recurring Capital Expenditures are defined as capital expenditures incurred to repurpose a building and to lease space to first generation tenants. Capital expenditures that don’t meet the definition of “recurring capital expenditures” are also included in this measure. Same Store Net Operating Income (“Same Store NOI”): Same Store NOI is calculated as the NOI attributable to the properties owned or placed in service during the entire span of the current and prior year reporting periods. We believe Same Store NOI is an important measure of comparison of our stabilized properties’ operating performance. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs. Cash Net Operating Income (“Cash NOI”): Cash NOI is defined as Adjusted EBITDA adjusted for (i) portfolio general and administrative expense, (ii) interest rate swap valuation adjustments, (iii) interest expense associated with interest rates swaps, (iv) GAAP lease termination income, (v) non-cash property operations, (vi) straight-line rental income, (vii) net effect of above/(below) market amortization, and (viii) discontinued operations adjustments. The company uses this measure to assess its operating results and believes it is important in assessing operating performance. Cash NOI is a non-GAAP measure which does not have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
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