2018 Q2 Form 10-Q Financial Statement

#000086054618000029 Filed on July 31, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2017 Q2
Revenue $146.7M $151.4M
YoY Change -3.1% 3.77%
Cost Of Revenue $16.94M $22.32M
YoY Change -24.08% 94.42%
Gross Profit $129.8M $129.1M
YoY Change 0.53% -3.96%
Gross Profit Margin 88.46% 85.26%
Selling, General & Admin $7.628M $7.859M
YoY Change -2.94% -2.08%
% of Gross Profit 5.88% 6.09%
Research & Development $1.200M $1.600M
YoY Change -25.0% -33.33%
% of Gross Profit 0.92% 1.24%
Depreciation & Amortization $33.70M $33.30M
YoY Change 1.2% -1.48%
% of Gross Profit 25.96% 25.79%
Operating Expenses $7.628M $7.859M
YoY Change -2.94% -2.08%
Operating Profit $38.30M $36.62M
YoY Change 4.6% -235.52%
Interest Expense -$17.10M -$17.20M
YoY Change -0.58% -19.25%
% of Operating Profit -44.64% -46.97%
Other Income/Expense, Net
YoY Change
Pretax Income $20.78M $18.53M
YoY Change 12.15% -138.33%
Income Tax $63.00K $48.00K
% Of Pretax Income 0.3% 0.26%
Net Earnings $19.43M $17.53M
YoY Change 10.89% -136.96%
Net Earnings / Revenue 13.24% 11.57%
Basic Earnings Per Share $0.19 $0.08
Diluted Earnings Per Share $0.19 $0.08
COMMON SHARES
Basic Shares Outstanding 101.8M shares 99.04M shares
Diluted Shares Outstanding 101.9M shares 99.20M shares

Balance Sheet

Concept 2018 Q2 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $8.500M $10.60M
YoY Change -19.81% -20.3%
Cash & Equivalents $8.472M $10.61M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory $42.20M $51.30M
Prepaid Expenses
Receivables $23.70M $42.70M
Other Receivables $0.00 $0.00
Total Short-Term Assets $74.40M $104.6M
YoY Change -28.87% -69.8%
LONG-TERM ASSETS
Property, Plant & Equipment $6.407M $5.303M
YoY Change 20.82% -6.74%
Goodwill
YoY Change
Intangibles $50.59M $69.21M
YoY Change -26.9% -22.06%
Long-Term Investments $50.10M $2.415M
YoY Change 1974.53%
Other Assets $66.20M $64.00M
YoY Change 3.44% -7.65%
Total Long-Term Assets $3.538B $3.488B
YoY Change 1.44% -0.22%
TOTAL ASSETS
Total Short-Term Assets $74.40M $104.6M
Total Long-Term Assets $3.538B $3.488B
Total Assets $3.612B $3.592B
YoY Change 0.56% -6.49%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $88.90M $95.30M
YoY Change -6.72% 2.69%
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $15.80M
YoY Change
Total Short-Term Liabilities $143.3M $165.0M
YoY Change -13.15% 6.38%
LONG-TERM LIABILITIES
Long-Term Debt $1.872B $1.898B
YoY Change -1.37% -9.38%
Other Long-Term Liabilities $64.00M $69.20M
YoY Change -7.51% 0.44%
Total Long-Term Liabilities $1.936B $1.967B
YoY Change -1.59% -9.06%
TOTAL LIABILITIES
Total Short-Term Liabilities $143.3M $165.0M
Total Long-Term Liabilities $1.936B $1.967B
Total Liabilities $2.079B $2.132B
YoY Change -2.49% -8.03%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock $1.033M $995.0K
YoY Change 3.82% 5.07%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.442B $1.352B
YoY Change
Total Liabilities & Shareholders Equity $3.612B $3.575B
YoY Change 1.05% -6.94%

Cashflow Statement

Concept 2018 Q2 2017 Q2
OPERATING ACTIVITIES
Net Income $19.43M $17.53M
YoY Change 10.89% -136.96%
Depreciation, Depletion And Amortization $33.70M $33.30M
YoY Change 1.2% -1.48%
Cash From Operating Activities $54.50M $57.40M
YoY Change -5.05% -25.45%
INVESTING ACTIVITIES
Capital Expenditures -$62.90M -$63.50M
YoY Change -0.94% 40.49%
Acquisitions
YoY Change
Other Investing Activities $900.0K $2.700M
YoY Change -66.67% -190.0%
Cash From Investing Activities -$62.00M -$60.80M
YoY Change 1.97% 26.4%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 7.500M -212.0M
YoY Change -103.54% 171.79%
NET CHANGE
Cash From Operating Activities 54.50M 57.40M
Cash From Investing Activities -62.00M -60.80M
Cash From Financing Activities 7.500M -212.0M
Net Change In Cash 0.0000000009313 -215.4M
YoY Change -100.0% 338.7%
FREE CASH FLOW
Cash From Operating Activities $54.50M $57.40M
Capital Expenditures -$62.90M -$63.50M
Free Cash Flow $117.4M $120.9M
YoY Change -2.89% -1.06%

Facts In Submission

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us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
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42187000 USD
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22950000 USD
us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
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46651000 USD
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23138000 USD
us-gaap Contracts Revenue
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36172000 USD
CY2018Q2 us-gaap Contracts Revenue
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17581000 USD
us-gaap Contracts Revenue
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44779000 USD
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22315000 USD
us-gaap Cost Of Services
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34801000 USD
CY2018Q2 us-gaap Cost Of Services
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16941000 USD
us-gaap Cost Of Services
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43157000 USD
CY2017Q2 us-gaap Costs And Expenses
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114817000 USD
us-gaap Costs And Expenses
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219185000 USD
CY2018Q2 us-gaap Costs And Expenses
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108439000 USD
us-gaap Costs And Expenses
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228024000 USD
CY2017Q4 us-gaap Costs In Excess Of Billings On Uncompleted Contracts Or Programs
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4884000 USD
CY2018Q2 us-gaap Costs In Excess Of Billings On Uncompleted Contracts Or Programs
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4158000 USD
CY2017Q4 us-gaap Deferred Compensation Plan Assets
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4616000 USD
us-gaap Income Tax Expense Benefit
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118000 USD
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4194000 USD
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29560000 USD
CY2018Q2 us-gaap Deferred Costs Leasing Accumulated Amortization
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29546000 USD
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48322000 USD
CY2018Q2 us-gaap Deferred Costs Leasing Net
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48183000 USD
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86710000 USD
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89606000 USD
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11682000 USD
CY2018Q2 us-gaap Deferred Revenue Leases Net
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10783000 USD
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1892000 USD
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1774000 USD
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32793000 USD
us-gaap Depreciation And Amortization
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65852000 USD
CY2018Q2 us-gaap Depreciation And Amortization
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33190000 USD
us-gaap Depreciation And Amortization
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66702000 USD
us-gaap Depreciation Depletion And Amortization
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66948000 USD
us-gaap Depreciation Depletion And Amortization
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67684000 USD
CY2017Q4 us-gaap Development In Process
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403494000 USD
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48628000 USD
us-gaap Direct Costs Of Leased And Rented Property Or Equipment
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97147000 USD
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49446000 USD
us-gaap Direct Costs Of Leased And Rented Property Or Equipment
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100397000 USD
us-gaap Dividends
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60922000 USD
us-gaap Dividends
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56493000 USD
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28462000 USD
CY2017Q4 us-gaap Dividends Payable Current And Noncurrent
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28921000 USD
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29449000 USD
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0.08
us-gaap Earnings Per Share Basic
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0.26
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0.19
us-gaap Earnings Per Share Basic
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0.36
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0.08
us-gaap Earnings Per Share Diluted
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0.26
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0.19
us-gaap Earnings Per Share Diluted
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0.36
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4250000 USD
us-gaap Gain Loss On Sale Of Properties
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-27000 USD
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12000 USD
us-gaap Gain Loss On Sale Of Properties Net Of Applicable Income Taxes
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4250000 USD
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-23000 USD
us-gaap Gain Loss On Sale Of Properties Net Of Applicable Income Taxes
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-27000 USD
CY2017Q2 us-gaap Gains Losses On Extinguishment Of Debt
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-513000 USD
us-gaap Gains Losses On Extinguishment Of Debt
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-513000 USD
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0 USD
us-gaap Gains Losses On Extinguishment Of Debt
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0 USD
us-gaap Impairment Of Real Estate
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1618000 USD
us-gaap Impairment Of Real Estate
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0 USD
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19011000 USD
CY2018Q2 us-gaap Incentive To Lessee
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18376000 USD
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18847000 USD
us-gaap Income Loss Before Gain Or Loss On Sale Of Properties Extraordinary Items And Cumulative Effects Of Accounting Changes
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37349000 USD
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IncomeLossBeforeGainOrLossOnSaleOfPropertiesExtraordinaryItemsAndCumulativeEffectsOfAccountingChanges
21108000 USD
us-gaap Income Loss Before Gain Or Loss On Sale Of Properties Extraordinary Items And Cumulative Effects Of Accounting Changes
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39892000 USD
CY2017Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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18525000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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36690000 USD
CY2018Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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20798000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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39264000 USD
CY2017Q2 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
370000 USD
us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
747000 USD
CY2018Q2 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
373000 USD
us-gaap Income Loss From Equity Method Investments
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746000 USD
CY2017Q2 us-gaap Income Tax Expense Benefit
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48000 USD
us-gaap Income Tax Expense Benefit
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88000 USD
CY2018Q2 us-gaap Income Tax Expense Benefit
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63000 USD
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-8050000 USD
us-gaap Increase Decrease In Operating Liabilities
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-2387000 USD
us-gaap Increase Decrease In Operating Liabilities
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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160000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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158000 shares
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119000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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131000 shares
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19163000 USD
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38157000 USD
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18945000 USD
us-gaap Interest And Debt Expense
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37729000 USD
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1600000 USD
us-gaap Interest Costs Capitalized
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3100000 USD
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1400000 USD
us-gaap Interest Costs Capitalized
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2800000 USD
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36351000 USD
us-gaap Interest Paid Net
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36155000 USD
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3073000 USD
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9792000 USD
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43661000 USD
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42752000 USD
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41787000 USD
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40806000 USD
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2079333000 USD
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3595205000 USD
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401000 USD
us-gaap Minority Interest Change In Redemption Value
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758000 USD
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789000 USD
us-gaap Minority Interest Decrease From Distributions To Noncontrolling Interest Holders
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711000 USD
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44651000 USD
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8800000 USD
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8800000 USD
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Operating Activities
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us-gaap Net Income Loss
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1140000 USD
us-gaap Net Income Loss Attributable To Redeemable Noncontrolling Interest
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1229000 USD
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7640000 USD
us-gaap Net Income Loss Available To Common Stockholders Basic
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25479000 USD
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19434000 USD
us-gaap Net Income Loss Available To Common Stockholders Basic
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36584000 USD
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us-gaap Net Income Loss Available To Common Stockholders Diluted
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25237000 USD
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19317000 USD
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36350000 USD
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261000 USD
us-gaap Noncontrolling Interest In Net Income Loss Operating Partnerships Nonredeemable
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883000 USD
CY2018Q2 us-gaap Noncontrolling Interest In Net Income Loss Operating Partnerships Nonredeemable
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608000 USD
us-gaap Noncontrolling Interest In Net Income Loss Operating Partnerships Nonredeemable
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1152000 USD
CY2017Q2 us-gaap Noncontrolling Interest In Net Income Loss Preferred Unit Holders Nonredeemable
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165000 USD
us-gaap Noncontrolling Interest In Net Income Loss Preferred Unit Holders Nonredeemable
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330000 USD
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165000 USD
us-gaap Noncontrolling Interest In Net Income Loss Preferred Unit Holders Nonredeemable
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330000 USD
us-gaap Noncontrolling Interest Increase From Subsidiary Equity Issuance
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0 USD
us-gaap Noncontrolling Interest Increase From Subsidiary Equity Issuance
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0 USD
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36618000 USD
us-gaap Operating Income Loss
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72051000 USD
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us-gaap Operating Income Loss
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1270000 USD
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644000 USD
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39000 USD
us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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39000 USD
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0 USD
us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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0 USD
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1865000 USD
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47000 USD
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1912000 USD
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6588000 USD
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1861000 USD
us-gaap Other Noncash Income Expense
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777000 USD
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1583000 USD
us-gaap Other Nonoperating Income
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1439000 USD
us-gaap Other Nonoperating Income
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2798000 USD
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940000 USD
us-gaap Other Operating Activities Cash Flow Statement
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2093000 USD
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0 USD
us-gaap Payments To Develop Real Estate Assets
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85926000 USD
us-gaap Payments To Develop Real Estate Assets
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67749000 USD
CY2017Q2 us-gaap Preferred Stock Dividends Income Statement Impact
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3039000 USD
us-gaap Preferred Stock Dividends Income Statement Impact
PreferredStockDividendsIncomeStatementImpact
6219000 USD
us-gaap Proceeds From Sale Of Real Estate Heldforinvestment
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0 USD
CY2017Q2 us-gaap Profit Loss
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18859000 USD
us-gaap Profit Loss
ProfitLoss
41599000 USD
CY2018Q2 us-gaap Profit Loss
ProfitLoss
21085000 USD
us-gaap Profit Loss
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39865000 USD
CY2017Q2 us-gaap Property Plant And Equipment Additions
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15155000 USD
us-gaap Stock Issued During Period Value Stock Options Exercised
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150000 USD
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6847000 USD
us-gaap Other Preferred Stock Dividends And Adjustments
OtherPreferredStockDividendsAndAdjustments
6847000 USD
CY2018Q2 us-gaap Other Preferred Stock Dividends And Adjustments
OtherPreferredStockDividendsAndAdjustments
0 USD
us-gaap Other Preferred Stock Dividends And Adjustments
OtherPreferredStockDividendsAndAdjustments
0 USD
CY2017Q2 us-gaap Other Real Estate Revenue
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26950000 USD
us-gaap Other Real Estate Revenue
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53102000 USD
CY2018Q2 us-gaap Other Real Estate Revenue
OtherRealEstateRevenue
28041000 USD
us-gaap Other Real Estate Revenue
OtherRealEstateRevenue
55485000 USD
CY2017Q2 us-gaap Participating Securities Distributed And Undistributed Earnings Loss Basic
ParticipatingSecuritiesDistributedAndUndistributedEarningsLossBasic
117000 USD
us-gaap Participating Securities Distributed And Undistributed Earnings Loss Basic
ParticipatingSecuritiesDistributedAndUndistributedEarningsLossBasic
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us-gaap Prior Period Reclassification Adjustment Description
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Reclassification</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity, including restricted cash and marketable securities that were reclassified to the line entitled &#8220;prepaid expenses and other assets, net&#8221; on our consolidated balance sheets after having been reported on a separate line in our Quarterly Reports on Form 10-Q filed in prior years and previous Annual Reports on Form 10-K. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Organization</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Corporate Office Properties Trust (&#8220;COPT&#8221;) and subsidiaries (collectively, the &#8220;Company&#8221;) is a fully-integrated and self-managed real estate investment trust (&#8220;REIT&#8221;). Corporate Office Properties, L.P. (&#8220;COPLP&#8221;) and subsidiaries (collectively, the &#8220;Operating Partnership&#8221;) is the entity through which COPT, the sole general partner of COPLP, conducts almost all of its operations and owns almost all of its assets. Unless otherwise expressly stated or the context otherwise requires, &#8220;we&#8221;, &#8220;us&#8221; and &#8220;our&#8221; as used herein refer to each of the Company and the Operating Partnership. We own, manage, lease, develop and selectively acquire office and data center properties. The majority of our portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (&#8220;IT&#8221;) related activities servicing what we believe are growing, durable, priority missions (&#8220;Defense/IT Locations&#8221;). We also own a portfolio of office properties located in select urban/urban-like submarkets in the Greater Washington, DC/Baltimore region</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">with durable Class-A office fundamentals and characteristics (&#8220;Regional Office&#8221;). As of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, our properties included the following:</font></div><div style="line-height:120%;padding-left:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:0px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">159</font><font style="font-family:inherit;font-size:10pt;"> properties totaling </font><font style="font-family:inherit;font-size:10pt;">17.7 million</font><font style="font-family:inherit;font-size:10pt;"> square feet comprised of </font><font style="font-family:inherit;font-size:10pt;">143</font><font style="font-family:inherit;font-size:10pt;"> office properties and </font><font style="font-family:inherit;font-size:10pt;">16</font><font style="font-family:inherit;font-size:10pt;"> single-tenant data center shell properties (&#8220;data center shells&#8221;). We owned </font><font style="font-family:inherit;font-size:10pt;">six</font><font style="font-family:inherit;font-size:10pt;"> of these data center shells through an unconsolidated real estate joint venture;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:0px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">a wholesale data center with a critical load of </font><font style="font-family:inherit;font-size:10pt;">19.25</font><font style="font-family:inherit;font-size:10pt;"> megawatts;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:0px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">nine</font><font style="font-family:inherit;font-size:10pt;"> properties under construction or redevelopment (</font><font style="font-family:inherit;font-size:10pt;">five</font><font style="font-family:inherit;font-size:10pt;"> office properties and </font><font style="font-family:inherit;font-size:10pt;">four</font><font style="font-family:inherit;font-size:10pt;"> data center shells) that we estimate will total approximately </font><font style="font-family:inherit;font-size:10pt;">1.0 million</font><font style="font-family:inherit;font-size:10pt;"> square feet upon completion, including </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> partially-operational property; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:24px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:0px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">approximately </font><font style="font-family:inherit;font-size:10pt;">1,000</font><font style="font-family:inherit;font-size:10pt;"> acres of land controlled for future development that we believe could be developed into approximately </font><font style="font-family:inherit;font-size:10pt;">12.3 million</font><font style="font-family:inherit;font-size:10pt;"> square feet and </font><font style="font-family:inherit;font-size:10pt;">150</font><font style="font-family:inherit;font-size:10pt;"> acres of other land.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">COPLP owns real estate directly and through subsidiary partnerships and limited liability companies (&#8220;LLCs&#8221;).&#160; In addition to owning real estate, COPLP also owns subsidiaries that provide real estate services such as property management and construction and development services primarily for our properties but also for third parties. Some of these services are performed by a taxable REIT subsidiary (&#8220;TRS&#8221;).</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Equity interests in COPLP are in the form of common and preferred units. As of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, COPT owned </font><font style="font-family:inherit;font-size:10pt;">97.0%</font><font style="font-family:inherit;font-size:10pt;"> of the outstanding COPLP common units (&#8220;common units&#8221;); the remaining common units and all of the outstanding COPLP preferred units (&#8220;preferred units&#8221;) were owned by third parties. Common units not owned by COPT carry certain redemption rights. The number of common units owned by COPT is equivalent to the number of outstanding common shares of beneficial interest (&#8220;common shares&#8221;) of COPT, and the entitlement of all common units to quarterly distributions and payments in liquidation is substantially the same as those of COPT common shareholders. Similarly, in the case of any series of preferred units held by COPT, there is a series of preferred shares of beneficial interest (&#8220;preferred shares&#8221;) in COPT that is equivalent in number and carries substantially the same terms as such series of COPLP preferred units. COPT&#8217;s common shares are publicly traded on the New York Stock Exchange (&#8220;NYSE&#8221;) under the ticker symbol &#8220;OFC&#8221;. </font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Because COPLP is managed by COPT, and COPT conducts substantially all of its operations through COPLP, we refer to COPT&#8217;s executive officers as COPLP&#8217;s executive officers; similarly, although COPLP does not have a board of trustees, we refer to COPT&#8217;s Board of Trustees as COPLP&#8217;s Board of Trustees.</font></div></div>

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