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TheStreet Open House

COPT Announces Tax Treatment Of 2012 Distributions

Stocks in this article: OFC

Corporate Office Properties Trust (COPT or the Company) (NYSE: OFC) announced that 33.18% of its 2012 Common Share distributions qualifies as ordinary income and 66.82% qualifies as return of capital. The Company also announced that 100% of its distributions paid to Preferred Shares in 2012 qualify as ordinary income. Shareholders are encouraged to consult with their tax advisors as to their specific tax treatment for Corporate Office Properties Trust Common and Preferred Share distributions.

The Common and Preferred share distributions with a record date of December 31, 2012 (with a payment date of January 15, 2013) will be allocable to 2013 for income tax purposes as the company had already distributed in excess of 100% of its 2012 taxable income to shareholders prior to making its fourth quarter distributions.

The table below summarizes the income tax treatment for 2012 distributions for the Common Shares of COPT.

               
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Return of Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Capital (1)   Gain
 

Common Shares (CUSIP# 22002T108)

 
3/31/2012 4/16/2012 $ 0.2750 $ 0.2750 $ 0.091244 $ - $ - $ 0.183756 $ -
6/29/2012 7/16/2012 $ 0.2750 $ 0.2750 $ 0.091244 $ - $ - $ 0.183756 $ -
9/12/2012 10/15/2012 $ 0.2750 $ 0.2750 $ 0.091244 $ - $ - $ 0.183756 $ -
12/31/2012 1/15/2013 $ 0.2750   $ -   $ -   $ -   $ -   $ -   $ -
 
$ 1.1000   $ 0.8250   $ 0.273732   $ -   $ -   $ 0.551268   $ -
 
(1) Represents a return of shareholder investment.
 

The table below summarizes the income tax treatment for 2012 distributions for the COPT Series G Preferred Shares.

             
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Gain
 
Series G Preferred Shares (CUSIP# 22002T504)
 
3/31/2012 4/16/2012 $ 0.5000 $ 0.5000 $ 0.5000 $ - $ - $ -
6/29/2012 7/16/2012 $ 0.5000 $ 0.5000 $ 0.5000 $ - $ - $ -
8/1/2012 8/1/2012 $ 0.1222   $ 0.1222   $ 0.1222   $ -   $ -   $ -
 
$ 1.1222   $ 1.1222   $ 1.1222   $ -   $ -   $ -
 

The table below summarizes the income tax treatment for 2012 distributions for the COPT Series H Preferred Shares.

             
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Gain
 
Series H Preferred Shares (CUSIP# 22002T603)
 
3/31/2012 4/16/2012 $ 0.4688 $ 0.4688 $ 0.4688 $ - $ - $ -
6/29/2012 7/16/2012 $ 0.4688 $ 0.4688 $ 0.4688 $ - $ - $ -
9/12/2012 10/15/2012 $ 0.4688 $ 0.4688 $ 0.4688 $ - $ - $ -
12/31/2012 1/15/2013 $ 0.4688   $ -   $ -   $ -   $ -   $ -
 
$ 1.8752   $ 1.4064   $ 1.4064   $ -   $ -   $ -
 

The table below summarizes the income tax treatment for 2012 distributions for the COPT Series J Preferred Shares.

             
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Gain
 
Series J Preferred Shares (CUSIP# 22002T702)
 
3/31/2012 4/16/2012 $ 0.4766 $ 0.4766 $ 0.4766 $ - $ - $ -
6/29/2012 7/16/2012 $ 0.4766 $ 0.4766 $ 0.4766 $ - $ - $ -
9/12/2012 10/15/2012 $ 0.4766 $ 0.4766 $ 0.4766 $ - $ - $ -
12/31/2012 1/15/2013 $ 0.4766   $ -   $ -   $ -   $ -   $ -
 
$ 1.9064   $ 1.4298   $ 1.4298   $ -   $ -   $ -
 

The table below summarizes the income tax treatment for 2012 distributions for the COPT Series K Preferred Shares.

             
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Gain
 
Series K Preferred Shares (CUSIP# 22002T801)
 
3/31/2012 4/16/2012 $ 0.7000 $ 0.7000 $ 0.7000 $ - $ - $ -
6/29/2012 7/16/2012 $ 0.7000 $ 0.7000 $ 0.7000 $ - $ - $ -
9/12/2012 10/15/2012 $ 0.7000 $ 0.7000 $ 0.7000 $ - $ - $ -
12/31/2012 1/15/2013 $ 0.7000   $ -   $ -   $ -   $ -   $ -
 
$ 2.8000   $ 2.1000   $ 2.1000   $ -   $ -   $ -
 

The table below summarizes the income tax treatment for 2012 distributions for the COPT Series L Preferred Shares.

             
2012
Total 2012 Taxable 2012 Total Unrecaptured
Payment Distribution per Total Distribution Ordinary 2012 Qualified Capital Gain Section 1250
Record Date   Date   Share   Allocable to 2012   Dividends   Dividends   Distribution   Gain
 
Series L Preferred Shares (CUSIP# 22002T884)
 
9/12/2012 10/15/2012 $ 0.5531 $ 0.5531 $ 0.5531 $ - $ - $ -
12/31/2012 1/15/2013 $ 0.4609   $ -   $ -   $ -   $ -   $ -
 
$ 1.0140   $ 0.5531   $ 0.5531   $ -   $ -   $ -
 

Company Information:

COPT is an office REIT that focuses primarily on strategic customer relationships and specialized tenant requirements in the U.S. Government and Defense Information Technology sectors and Data Centers serving such sectors. The Company acquires, develops, manages and leases office and data center properties that are typically concentrated in large office parks primarily located adjacent to government demand drivers and/or in strong markets that we believe possess growth opportunities. As of September 30, 2012, the Company’s consolidated portfolio consisted of 206 office properties totaling 18.6 million rentable square feet. The Company’s portfolio primarily consists of technically sophisticated buildings in visually appealing settings that are environmentally sensitive, sustainable and meet unique customer requirements. COPT is an S&P MidCap 400 company and more information can be found at www.copt.com.

Forward-Looking Information:

This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements.

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

  • general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values;
  • adverse changes in the real estate markets including, among other things, increased competition with other companies;
  • governmental actions and initiatives, including risks associated with the impact of a government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases, and/or a curtailment of demand for additional space by strategic tenants;
  • the Company’s ability to sell properties included in its Strategic Reallocation Plan;
  • the Company’s ability to borrow on favorable terms;
  • risks of real estate acquisition and development activities, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;
  • risks of investing through joint venture structures, including risks that the Company’s joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with the Company’s objectives;
  • changes in the Company’s plans or views of market economic conditions or failure to obtain development rights, any of which could result in recognition of impairment losses;
  • the Company’s ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;
  • the Company's ability to achieve projected results;
  • the dilutive effect of issuing additional common shares; and
  • environmental requirements.

The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company’s filings with the Securities and Exchange Commission, particularly the section entitled “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and in our Current Report on Form 8-K dated October 10, 2012.



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