Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q2 2020 Earnings Presentation
52 slides from Copt Defense Properties's earnings presentation, Jul 31, 2020
Slide 1: Corporate Office Properties Trust
Corporate Office Properties Trust Fa COPT
Slide 2: Earnings Release & Supplemental Information Contents
CORPORATE OFFICE PROPERTIES TRUST Earnings Release & Supplemental Information — Unaudited For the Quarter Ended June 30, 2020 Overview: Summary Description Equity Research Coverage Selected Financial Summary Data Selected Portfolio Data... Financial Statements: Consolidated Balance Sheets. Consolida
Slide 3: Summary Description
Corporate Office Properties Trust Summary Description The Company: Corporate Office Properties Trust (the “Company” or “COPT”) is a self-managed real estate investment trust (“REIT”). COPT is listed on the New York Stock Exchange under the symbol “OFC” and is an S&P MidCap 400 Company. We own, manag
Slide 4: Equity Research Coverage
Corporate Office Properties Trust Equity Research Coverage Firm Senior Analyst Phone Email Bank of America Securities Jamie Feldman 646-855-5808 james.feldman@bofa.com BTIG Tom Catherwood 212-738-6410 tcatherwood@btig.com Capital One Securities Chris Lucas 571-633-8151 christopher.lucas@capitalone.c
Slide 5: Selected Financial Summary Data
Corporate Office Properties Trust Selected Financial Summary Data (in thousands, except per share data) Page Three Months Ended Six Months Ended SUMMARY OF RESULTS Refer. 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Net income 6 $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 50,671 $ 13
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 174 171 170 169 169 Consolidated Portfolio 159 156 155 156 156 Core Portfolio 172 169 168 167 167 Same Properties 1
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (dollars in thousands) 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 Assets Properties, net: Operating properties, net $ 2,888,817 $ 2,813,949 $ 2,772,647 $ 2,713,900 $ 2,719,585 Development and redevelopment in progress, including land (1) 31
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Revenues Lease revenue $ 132,147 $ 131,012 $ 130,693 $ 129,461 $ 131,415 $ 263,159 $ 262,318 Othe
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Net income $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 50,671 $ 131,881 Real estate-related depreciation and amortization 33,612 32,
Slide 10: Diluted Share and Unit Computations
Corporate Office Properties Trust Diluted Share and Unit Computations (in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 EPS Denominator: Weighted average common shares - basic 111,800 111,724 111,670 111,582 111,557 111,762 110,759 Dilutive e
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 57,817 $ 57,866 $ 56,330 $ 57,43
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Net income $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 50,671 $ 131,881 Interest expense 16,797 16,840 16,777 17,126 18,475 3
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 6/30/20 (square feet in thousands) # of Operational % % Properties Square Feet Occupied Leased Core Portfolio: (2) Defense/IT Locations: Fort Meade/Baltimore Washington (“BW”) Corridor: National Business Park
Slide 14: NOI from Real Estate Operations and Occupancy by Property Grouping
Corporate Office Properties Trust NOI from Real Estate Operations and Occupancy by Property Grouping - 6/30/20 (dollars and square feet in thousands) As of Period End # of Office and Data % of Total NOI from Real Estate Operations Center Annualized Annualized Shell Operational % Occupied Rental Rent
Slide 15: Consolidated Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Consolidated Real Estate Revenues and NOI by Segment (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 62,698 $ 64,438
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,968 $ 42,170 $ 43,939 $ 42,604 $ 42,180 $ 84,138 $ 82,436 NoVA Defense/
Slide 17: Same Properties Average Occupancy Rates by Segment
Corporate Office Properties Trust Same Properties (1) Average Occupancy Rates by Segment (square feet in thousands) # of Operational Three Months Ended Six Months Ended Properties Square Feet 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Core Portfolio: Defense/IT Locations: Fort Meade/BW
Slide 18: Same Properties Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Same Properties Real Estate Revenues and NOI by Segment (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 61,507 $ 6
Slide 19: Same Properties Cash NOI by Segment
Corporate Office Properties Trust Same Properties Cash NOI by Segment (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,283 $ 41,848 $ 43,546 $ 42,456 $ 41,836
Slide 20: Leasing - Office and Data Center Shell Portfolio, Quarter
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 6/30/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Data Total BW NoVA Navy Redstone Center Defense/IT Regional Corridor Defense/IT Support Arsenal Shells Locations Office Other Total R
Slide 21: Leasing - Office and Data Center Shell Portfolio, Six Months
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Six Months Ended 6/30/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Data Total BW NoVA Navy Redstone Center Defense/IT Regional Corridor Defense/IT Support Arsenal Shells Locations Office Other Tota
Slide 22: Lease Expiration Analysis as of 6/30/20
Corporate Office Properties Trust Lease Expiration Analysis as of 6/30/20 (1) (dollars and square feet in thousands, except per square foot amounts) Office and Data Center Shells Annualized % of Core/Total Annualized Rental Square Rental Annualized Revenue of Footage of Revenue of Rental Expiring Le
Slide 23: Lease Expiration Analysis (continued)
Annualized % of Core/Total Annualized Rental Square Rental Annualized Revenue of Footage of Revenue of Rental Expiring Leases per Leases Expiring Revenue Occupied Sq. Foot Segment of Lease and Year of Expiration (2) Expiring Leases (3) Expiring (3)(4) (3) Core Portfolio 18,371 $ 519,934 99.5% $ 31.2
Slide 24: 2020 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2020 Core Portfolio Quarterly Lease Expiration Analysis as of 6/30/20 (1) (dollars and square feet in thousands, except per square foot amounts) Annualized Annualized % of Core Rental Square Rental Annualized Revenue of Footage of Revenue of Rental Expiring Leases L
Slide 25: Top Tenants as of 6/30/20
Corporate Office Properties Trust Top 20 Tenants as of 6/30/20 (1) (dollars and square feet in thousands) % Weighted Total of Total Occupied Square Average Annualized Annualized Feet in Office and Remaining Lease Term Rental Rental Data Center in Office and Data Tenant Revenue (2) Revenue (2) Shells
Slide 26: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 6/30/20 (1) (dollars and square feet in thousands) as of 6/30/20 (2) Actual or Anticipated Total Cost to Shell Anticipated Rentable % Leased as Anticipated Date Placed Completion Operational Property and Segment Location Square
Slide 27: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 6/30/20 (square feet in thousands) Total Property Square Feet Placed in Service Space Placed % Leased Rentable 2020 in Service % Property as of Square Prior 1st 2nd Total Leased as of Property and Location Segmen
Slide 28: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 6/30/20 (1) (square feet in thousands) Estimated Developable Square Carrying Location Acres Feet Amount Land owned/controlled for future development Defense/IT Locations: Fort Meade/BW Corridor: National Business Park 196 2,106
Slide 29: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Gross Debt Investment Grade Ratings & Outlook Latest Affirmation Avg. Effective Stated Rate Balance at Fitch BBB- Stable 10/7/19 Maturity (Years) Rate (1)(2) 6/30/20 Moody’s Baa3 Stable 6/10/20 De
Slide 30: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 6/30/20 (dollars in thousands) Balloon Payment Amount Maturity Amount Due Upon Maturity Unsecured Debt Stated Rate Outstanding Date Secured Debt Stated Rate Outstanding Maturity Date Revolving Credit Facility L + 1.10% $ 169,000 Mar
Slide 31: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 6/30/20 (continued) 600,000 $ (Consolidated debt maturities in thousands) 500,000 400,000 300,000 200,000 100,000 0 2020 2021 2022 2023 2024 (1) 2025 2026 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured De
Slide 32: Debt Analysis
Corporate Office Properties Trust Debt Analysis (dollars and square feet in thousands) As of and for Three As of and for Three Months Ended Months Ended Senior Note Covenants (1) Required 6/30/20 Line of Credit & Term Loan Covenants (1) Required 6/30/20 Total Debt / Total Assets < 60% 39.4% Total De
Slide 33: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 6/30/20 (dollars and square feet in thousands) NOI for the NOI for the Three Months Six Months Operational Ended 6/30/20 Ended 6/30/20 Total Assets Venture % COPT Operating Properties Square Feet % Occupied % Leased (1)
Slide 34: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 6/30/20 (dollars and square feet in thousands) DC Shell JV DC Shell JV formed in formed in Joint venture information 2016 2019 COPT ownership % 50% 10% COPT’s investment $ 36,720 $ 13,737 # of Properties 6 9 Square Fee
Slide 35: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 NOI from real estate operations (1) Real estate revenues $ 132,538 $ 132,116 $ 131,968 $ 130,734 $
Slide 36: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (dollars in thousands) Three Months Ended Six Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 6/30/20 6/30/19 Total interest expense $ 16,797 $ 16,840 $ 16,777 $ 17,126 $ 18,475 $ 33,637 $ 37,149 L
Slide 37: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (dollars in thousands) Three Months Ended 6/30/20 3/31/20 12/31/19 9/30/19 6/30/19 Total assets $4,011,325 $4,054,457 $3,854,453 $3,855,369 $3,803,469 Accumulated depreciation 1,065,094 1,035,703 1,007,1
Slide 38: Definitions: Non-GAAP Measures
Corporate Office Properties Trust Definitions Non-GAAP Measures We believe that the measures defined below that are not determined in accordance with generally accepted accounting principles (“GAAP”) are helpful to investors in measuring our performance and comparing it to that of other real estate
Slide 39: Definitions: Cash NOI
Corporate Office Properties Trust Definitions Cash net operating income (“Cash NOI”) Defined as NOI from real estate operations adjusted to eliminate the effects of: straight-line rental adjustments, amortization of tenant incentives, amortization of acquisition intangibles included in FFO and NOI (
Slide 40: Definitions: Diluted FFO as adjusted for comparability
Corporate Office Properties Trust Definitions Diluted FFO available to common share and common unit holders, as adjusted for comparability (“Diluted FFO, as adjusted for comparability”) Defined as Diluted FFO or FFO adjusted to exclude: operating property acquisition costs; gain or loss on early ext
Slide 41: Definitions: Funds from Operations
Corporate Office Properties Trust Definitions Funds from operations (“FFO” or “FFO per Nareit”) Defined as net income computed using GAAP, excluding gains on sales and impairment losses of real estate (net of associated income tax) and real estate-related depreciation and amortization. FFO also incl
Slide 42: Definitions: Net Operating Income
Corporate Office Properties Trust Definitions Net operating income from real estate operations (“NOI”) NOI, which is our segment performance measure, includes: consolidated real estate revenues; consolidated property operating expenses; and the net of revenues and property operating expenses of real
Slide 43: Definitions: Same Properties NOI and Other Definitions
Corporate Office Properties Trust Definitions Same Properties NOI and Same Properties cash NOI Defined as NOI, or Cash NOI, from real estate operations of Same Properties. We believe that these are important supplemental measures of operating performance of Same Properties for the same reasons discu
Slide 44: COPT Reports Strong Second Quarter 2020 Results
6711 Columbia Gateway Drive, Suite 300 Columbia, Maryland 21046 Telephone 443-285-5400 Facsimile 443-285-7650 www.copt.com NYSE: OFC NEWS RELEASE FOR IMMEDIATE RELEASE IR Contacts: Stephanie Krewson-Kelly Michelle Layne 443-285-5453 443-285-5452 stephanie.kelly@copt.com michelle.layne@copt.com COPT
Slide 45: Financial Highlights
Financial Highlights 2nd Quarter Financial Results: • Diluted earnings per share (“EPS”) was $0.21 for the quarter ended June 30, 2020 as compared to $0.95 for the second quarter of 2019. • Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition and as
Slide 46: 2020 Guidance
2020 Guidance Management is increasing its prior full-year guidance ranges of $0.65-$0.69 for EPS to a new range of $0.76-$0.80. Management is maintaining its full-year guidance ranges for FFOPS per Nareit and FFOPS, as adjusted for comparability, at $1.95-$1.99 and $2.05-$2.09, respectively. Manage
Slide 47: About COPT and Forward-Looking Information
through unconsolidated joint ventures, COPT’s core portfolio of 172 office and data center shell properties encompassed 19.6 million square feet and was 94.7% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts that was 90.6% leased. Forward-Looking Infor
Slide 48: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months For the Six Months Ended Ended June 30, June 30, 2020 2019 2020 2019 Revenues Revenues from real estate operations $ 132,538 $ 132,771 $ 264,654 $ 264,761 Construction cont
Slide 49: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months For the Six Months Ended Ended June 30, June 30, 2020 2019 2020 2019 Net income $ 25,121 $ 109,563 $ 50,671 $ 131,881 Real estate-related depreciation and amortization 33,6
Slide 50: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) June 30, December 31, 2020 2019 Balance Sheet Data Properties, net of accumulated depreciation $ 3,513,099 $ 3,340,886 Total assets 4,011,325 3,854,453 Debt, per balance shee
Slide 51: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months For the Six Months Ended Ended June 30, June 30, 2020 2019 2020 2019 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends - unr
Slide 52: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months For the Six Months Ended Ended June 30, June 30, 2020 2019 2020 2019 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating propertie
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