Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q3 2020 Earnings Presentation
52 slides from Copt Defense Properties's earnings presentation, Oct 30, 2020
Slide 1: Corporate Office Properties Trust
Corporate Office Properties Trust Fi COPT
Slide 2: Earnings Release & Supplemental Information contents
CORPORATE OFFICE PROPERTIES TRUST Earnings Release & Supplemental Information — Unaudited For the Quarter Ended September 30, 2020 Overview: Summary Description. Equity Research Coverage ‘Selected Financial Summary Data. Selected Portfolio Data Financial Statements: Consolidated Balance Sheets. . Co
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 Nine Months Ended SUMMARY OF RESULTS Refer. 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Net (loss) income 6 $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 19
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 176 174 171 170 169 Consolidated Portfolio 161 159 156 155 156 Core Portfolio 174 172 169 168 167 Same Properties 1
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (dollars in thousands) 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 Assets Properties, net: Operating properties, net $ 2,999,892 $ 2,888,817 $ 2,813,949 $ 2,772,647 $ 2,713,900 Development and redevelopment in progress, including land (1) 30
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Revenues Lease revenue $ 133,875 $ 132,147 $ 131,012 $ 130,693 $ 129,461 $ 397,034 $ 391,779 Oth
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Net (loss) income $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 19,329 $ 155,127 Real estate-related depreciation and amortization 3
Slide 10: Diluted Share and Unit Computations
Corporate Office Properties Trust Diluted Share and Unit Computations (in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 EPS Denominator: Weighted average common shares - basic 111,811 111,800 111,724 111,670 111,582 111,778 111,036 Dilutive
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 61,485 $ 57,817 $ 57,866 $ 56,3
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Net (loss) income $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 23,246 $ 19,329 $ 155,127 Interest expense 17,152 16,797 16,840 16,777
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 9/30/20 (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 - 9/30/20 (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 Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 63,328 $ 62,698
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (dollars in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,365 $ 41,968 $ 42,170 $ 43,939 $ 42,604 $ 125,503 $ 125,040 NoVA Defen
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 Nine Months Ended Properties Square Feet 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Core Portfolio: Defense/IT Locations: Fort Meade/B
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 Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 62,122 $
Slide 19: Same Properties Cash NOI by Segment
Corporate Office Properties Trust Same Properties Cash NOI by Segment (dollars in thousands) Three Months Ended Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 40,759 $ 41,283 $ 41,848 $ 43,546 $ 42,45
Slide 20: Leasing - Office and Data Center Shell Portfolio, Quarter
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 9/30/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Lackland Total BW Air Force Navy Redstone Defense/IT Regional Corridor Base Support Arsenal Locations Office Total Renewed Space Leas
Slide 21: Leasing - Office and Data Center Shell Portfolio, Nine Months
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Nine Months Ended 9/30/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Lackland Total BW NoVA Air Force Navy Redstone Data Center Defense/IT Regional Corridor Defense/IT Base Support Arsenal Shells Lo
Slide 22: Lease Expiration Analysis
Corporate Office Properties Trust Lease Expiration Analysis as of 9/30/20 (1) (dollars and square feet in thousands, except per square foot amounts) Office and Data Center Shells Annualized % of Core/Total Square Rental Annualized Annualized Rental Footage of Revenue of Rental Revenue of Leases Expi
Slide 23: Lease Expiration Analysis: Wholesale Data Center
Annualized % of Core/Total Square Rental Annualized Annualized Rental Footage of Revenue of Rental Revenue of Leases Expiring Revenue Expiring Leases per Segment of Lease and Year of Expiration (2) Expiring Leases (3) Expiring (3)(4) Occupied Sq. Foot (3) Core Portfolio 19,022 $ 534,280 99.5% $ 30.8
Slide 24: 2021 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2021 Core Portfolio Quarterly Lease Expiration Analysis as of 9/30/20 (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 20 Tenants
Corporate Office Properties Trust Top 20 Tenants as of 9/30/20 (1) (dollars and square feet in thousands) % Weighted Total of Total Occupied Square Average Annualized Annualized Feet in Office and Remaining Lease Term Rental Revenue Rental Data Center in Office and Data Tenant (2) Revenue (2) Shells
Slide 26: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 9/30/20 (1) (dollars and square feet in thousands) as of 9/30/20 (2) Actual or Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Squa
Slide 27: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 9/30/20 (square feet in thousands) Total Property Square Feet Placed in Service 2020 Space Placed % Leased Rentable in Service % Property as of Square Prior 1st 2nd 3rd Total Leased as of Property and Location Se
Slide 28: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 9/30/20 (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 175 1,999
Slide 29: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Investment Grade Ratings & Outlook Latest Affirmation Avg. Effective Gross Debt Maturity Stated Rate Balance at Fitch BBB- Stable 9/30/20 (Years) Rate (1)(2) 9/30/20 Moody’s Baa3 Stable 9/10/20 De
Slide 30: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/20 (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% $ 57,000 Mar-
Slide 31: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/20 (continued) 600,000 $ (Consolidated debt maturities in thousands) 500,000 400,000 300,000 200,000 100,000 0 2020 (1) 2021 2022 2023 2024 (2) 2025 2026 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecure
Slide 32: Debt Analysis
Corporate Office Properties Trust Debt Analysis (dollars and square feet in thousands) As of and for As of and for Three Months Three Months Ended 9/30/20 Ended Senior Note Covenants (1) Required 2.25% Notes Other Notes Line of Credit & Term Loan Covenants (1) Required 9/30/20 Total Debt / Total Ass
Slide 33: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 9/30/20 (dollars and square feet in thousands) NOI for the NOI for the Three Months Nine Months Operational Ended 9/30/20 Ended 9/30/20 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 9/30/20 (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 $ 36,135 $ 13,527 # 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 Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 NOI from real estate operations (1) Real estate revenues $ 134,443 $ 132,538 $ 132,116 $ 131,968 $
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 Nine Months Ended 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 9/30/20 9/30/19 Total interest expense $ 17,152 $ 16,797 $ 16,840 $ 16,777 $ 17,126 $ 50,789 $ 54,275
Slide 37: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (dollars in thousands) 9/30/20 6/30/20 3/31/20 12/31/19 9/30/19 Total assets $4,120,189 $4,011,325 $4,054,457 $3,854,453 $3,855,369 Accumulated depreciation 1,095,441 1,065,094 1,035,703 1,007,120 979,35
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 intangibles and other assets included in FFO and
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 Third 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
properties to a joint venture with an institutional partner. We anticipate completing two transactions that are expected to raise approximately $165 million of equity proceeds, which would reduce our year-end debt-to- EBITDA ratio to between 6.2x and 6.4x.” He continued, “The Company continues to me
Slide 46: Investment Activity and Balance Sheet Highlights
averaged 4.2 years on renewing leases, 14.2 years on development leasing, and 6.6 years on vacancy leasing. Investment Activity Highlights • Development Pipeline: As of October 7, 2020, the Company’s development pipeline consisted of 11 properties and expansion of one fully operational property tota
Slide 47: Conference Call Information
Conference Call Information Management will discuss third quarter 2020 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, October 30, 2020 Time: 12:00 p.m. Eastern Time Telephone Number: (within the U.S.) 855-463-9057
Slide 48: Summary Financial Data
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Revenues Revenues from real estate operations $ 134,443 $ 130,734 $ 399,097 $ 395,495 Constr
Slide 49: Summary Financial Data: FFO
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Net (loss) income $ (31,342) $ 23,246 $ 19,329 $ 155,127 Real estate-related depreciation an
Slide 50: Summary Financial Data: Balance Sheet and Payout Ratios
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) September 30, December 31, 2020 2019 Balance Sheet Data Properties, net of accumulated depreciation $ 3,586,938 $ 3,340,886 Total assets 4,120,189 3,854,453 Debt, per balance
Slide 51: Summary Financial Data: Dividend and EBITDA Reconciliations
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share divi
Slide 52: Summary Financial Data: Capital Expenditures Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operatin
COPT Defense Properties — Q3 2020 Earnings Presentation on 6ix