Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q4 2021 Earnings Presentation
54 slides from Copt Defense Properties's earnings presentation, Feb 11, 2022
Slide 1: Corporate Office Properties Trust
Corporate Office Properties Trust FA COPT
Slide 2: Earnings Release & Supplemental Information - Table of Contents
CORPORATE OFFICE PROPERTIES TRUST Earnings Release & Supplemental Information - Unaudited For the Quarter Ended December 31, 2021 Overview: Section | Summary Description 1 Equity Research Coverage 2 Selected Financial Summary Data. 3 Selected Portfolio Data. 4 Financial Statements: Section II Consol
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, manage
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 Years Ended SUMMARY OF RESULTS Refer. 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Net income (loss) 6 $ 14,965 $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ 81,578
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 186 186 184 182 181 Consolidated Portfolio 167 167 165 165 164 Core Portfolio 184 184 182 180 179 Same Properties
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 Assets Properties, net: Operating properties, net $ 3,090,510 $ 3,034,365 $ 2,904,129 $ 2,908,986 $ 2,915,016 Development and redevelopment in progress, including land (1) 196,701 1
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Revenues Lease revenue $ 141,892 $ 138,032 $ 136,454 $ 137,290 $ 131,672 $ 553,668 $ 509,114 Other property revenue 756 84
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Net income (loss) $ 14,965 $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ 81,578 $ 102,878 Real estate-related depreciation and amortization 36,34
Slide 10: Diluted Share and Unit Computations
Corporate Office Properties Trust Diluted Share and Unit Computations (in thousands, except per share data) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 EPS Denominator: Weighted average common shares - basic 111,990 111,985 111,974 111,888 111,817 111,9
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 65,458 $ 65,179 $ 65,605 $ 64,454
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Net income (loss) $ 14,965 $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ 81,578 $ 102,878 Interest expense 16,217 15,720 15,942 17,519 17,
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 12/31/21 (square feet in thousands) # of Operational Properties Square Feet % Occupied % Leased Core Portfolio: Defense/IT Locations: Fort Meade/Baltimore Washington (“BW”) Corridor: National Business Park 32
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 - 12/31/21 (dollars and square feet in thousands) As of Period End # of Office % of Total NOI from Real Estate Operations and Data Annualized Annualized Center Shell Operational % Occupied Rental Ren
Slide 15: Consolidated Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Consolidated Real Estate Revenues and NOI by Segment (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 64,805 $ 66,029 $ 64,840 $
Slide 16: Consolidated Cash NOI by Segment
Corporate Office Properties Trust Consolidated Cash NOI by Segment (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 42,666 $ 42,301 $ 42,514 $ 39,666 $ 42,430 $ 167,147 $ 167,933 NoVA Def
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) Three Months Ended Years Ended # of Operational Properties Square Feet 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Core Portfolio: Defense/IT Locations: Fort Meade/BW C
Slide 18: Same Properties Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Same Properties Real Estate Revenues and NOI by Segment (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 62,347 $ 64,643 $ 63
Slide 19: Same Properties Cash NOI by Segment
Corporate Office Properties Trust Same Properties Cash NOI by Segment (dollars in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,422 $ 41,706 $ 42,074 $ 39,192 $ 42,069 $
Slide 20: Leasing - Office and Data Center Shell Portfolio, Quarter Ended 12/31/21
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1)(2) Quarter Ended 12/31/21 (square feet in thousands) Defense/IT Locations Ft Meade/ NoVA Total BW Defense/ Navy Redstone Defense/IT Regional Corridor IT Support Arsenal Locations Office Other Total Renewed Space L
Slide 21: Leasing - Office and Data Center Shell Portfolio, Year Ended 12/31/21
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1)(2) Year Ended 12/31/21 (square feet in thousands) Defense/IT Locations Ft Meade/ NoVA Lackland Data Total BW Defense/ Air Force Navy Redstone Center Defense/IT Regional Corridor IT Base Support Arsenal Shells Loca
Slide 22: Lease Expiration Analysis as of 12/31/21
Corporate Office Properties Trust Lease Expiration Analysis as of 12/31/21 (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 L
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 19,966 $ 561,600 99.1% $ 32.5
Slide 24: 2022 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2022 Core Portfolio Quarterly Lease Expiration Analysis as of 12/31/21 (1) (dollars and square feet in thousands, except per square foot amounts) Office and Data Center Shells Annualized % of Core Annualized Rental Square Rental Annualized Revenue of Footage of Reve
Slide 25: Top 20 Tenants as of 12/31/21
Corporate Office Properties Trust Top 20 Tenants as of 12/31/21 (1) (dollars and square feet in thousands) % Total of Total Occupied Square Weighted Average Annualized Annualized Feet in Office and Remaining Lease Rental Revenue Rental Data Center Term in Office and Tenant (2) Revenue (2) Shells Dat
Slide 26: Property Dispositions
Corporate Office Properties Trust Property Dispositions (dollars and square feet in thousands) % Occupied on Transaction # of Operational Transaction Transaction Value Property Segment Location Properties Square Feet Date Date (in millions) 90% interest in MP 1 and 2 (1) Data Center Shells Northern
Slide 27: Summary of Development Projects as of 12/31/21
Corporate Office Properties Trust Summary of Development Projects as of 12/31/21 (1) (dollars and square feet in thousands) Actual or as of 12/31/21 (2) Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Sq
Slide 28: Development Placed in Service as of 12/31/21
Corporate Office Properties Trust Development Placed in Service as of 12/31/21 (square feet in thousands) Total Property Square Feet Placed in Service Total Space 2021 Placed in % Leased Rentable Service % Property as of Square Prior 1st 2nd 3rd 4th Total Leased as of Property and Location Segment 1
Slide 29: Summary of Land Owned/Controlled as of 12/31/21
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 12/31/21 (1) (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 146 1,816 Howard Cou
Slide 30: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Avg. Effective Gross Debt Investment Grade Ratings & Outlook Latest Affirmation Maturity Stated Rate Balance at Fitch BBB- Stable 10/8/21 (Years) (1) Rate (2)(3) 12/31/21 Moody’s Baa3 Stable 3/3/2
Slide 31: Summary of Outstanding Debt as of 12/31/21
Corporate Office Properties Trust Summary of Outstanding Debt as of 12/31/21 (dollars in thousands) Balloon Payment Stated Amount Maturity Stated Amount Due Upon Maturity Unsecured Debt Rate Outstanding Date Secured Debt Rate Outstanding Maturity Date Revolving Credit Facility L + 1.10% $ 76,000 Mar
Slide 32: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 12/31/21 (continued) 800,000 $ (Consolidated debt maturities in thousands) 600,000 400,000 200,000 0 2022 2023 2024 (1) 2025 2026 2029 2031 2033 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured Debt: 0.0% R
Slide 33: 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 Ended Senior Note Covenants (1) Required 12/31/21 Line of Credit & Term Loan Covenants (1) Required 12/31/21 Total Debt / Total Assets < 60% 40.9% Total
Slide 34: Consolidated Real Estate Joint Ventures as of 12/31/21
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 12/31/21 (dollars and square feet in thousands) NOI for the COPT Three Months NOI for the Nominal Operational Ended 12/31/21 Year Ended Total Assets Venture Ownership Operating Properties Square Feet % Occupied % Leased
Slide 35: Unconsolidated Real Estate Joint Ventures as of 12/31/21
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 12/31/21 (dollars and square feet in thousands) Joint venture information (1) BREIT-COPT BRE-COPT 2 BRE-COPT 3 COPT ownership % 10% 10% 10% COPT’s investment $ 12,460 $ 15,579 $ 11,850 # of Properties 9 8 2 Square Feet
Slide 36: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 NOI from real estate operations (1) Real estate revenues $ 150,883 $ 146,590 $ 144,423 $ 145,164 $ 139,628 $
Slide 37: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Discontinued operations Revenues from real estate operations $ 8,235 $ 7,717 $ 7,204 $ 7,334 $ 7,421 $ 30,490
Slide 38: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) Three Months Ended Years Ended 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Total interest expense $ 16,217 $ 15,720 $ 15,942 $ 17,519 $ 17,148 $ 65,398 $ 67,937 Less: Amort
Slide 39: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 Total assets $ 4,262,452 $ 4,151,138 $ 4,052,032 $ 4,112,948 $ 4,077,023 Accumulated depreciation 1,152,523 1,122,211 1,104,625 1,082,034 1,052,00
Slide 40: Definitions - Non-GAAP Measures
Corporate Office Properties Trust Definitions Non-GAAP Measures Amortization of acquisition intangibles included in NOI We believe that the measures defined below that are not determined in accordance Represents the amortization of intangible asset and liability categories that is with generally acc
Slide 41: Definitions
Corporate Office Properties Trust Definitions evaluating and comparing the performance of reportable segments, Same Diluted FFO available to common share and common unit holders, as adjusted for Properties groupings and individual properties. We believe that NOI from real comparability (“Diluted FFO
Slide 42: Definitions
Corporate Office Properties Trust Definitions Diluted FFO per share, as adjusted for comparability net income is the most directly comparable GAAP measure to this non-GAAP Defined as (1) Diluted FFO available to common share and common unit holders, measure. as adjusted for comparability divided by
Slide 43: Definitions
Corporate Office Properties Trust Definitions Net debt to in-place adjusted EBITDA ratio and Net debt adjusted for fully-leased These payout ratios are defined as (1) the sum of dividends on unrestricted development to in-place adjusted EBITDA ratio common shares and distributions to holders of inte
Slide 44: Definitions - Other Definitions
Corporate Office Properties Trust Definitions Other Definitions First Generation Space — Newly-developed or redeveloped space that has never been occupied. Acquisition Costs — Transaction costs expensed in connection with executed or anticipated acquisitions of operating properties. Operational Spac
Slide 45: COPT 4Q and Full Year 2021 Results Exceed Guidance
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 46: Financial Highlights
projects with the U.S. Government and defense contractors who support the priority missions our Defense/IT Locations serve.” Financial Highlights 4th Quarter Financial Results: • Diluted earnings per share (“EPS”) was $0.12 for the quarter ended December 31, 2021 compared to $0.73 for the fourth qua
Slide 47: Investment Activity Highlights
Investment Activity Highlights • Development Pipeline: The Company’s development pipeline consists of 11 properties totaling 1.7 million square feet that were 96% leased at December 31, 2021. These projects represent a total estimated investment of $542.4 million, of which $209.9 million has been sp
Slide 48: Definitions and About COPT
Definitions For definitions of certain terms used in this press release, please refer to the information furnished in the Company’s Supplemental Information Package furnished on a Form 8-K which can be found on its website (www.copt.com). Reconciliations of non-GAAP measures to the most directly com
Slide 49: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) For the Three Months For the Years Ended Ended December 31, December 31, 2021 2020 2021 2020 Revenues Revenues from real estate operations $ 142,648 $ 132,207 $ 556,570 $ 511
Slide 50: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months For the Years Ended Ended December 31, December 31, 2021 2020 2021 2020 Net income $ 14,965 $ 83,549 $ 81,578 $ 102,878 Real estate-related depreciation and amortization 36
Slide 51: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) December 31, December 31, 2021 2020 Balance Sheet Data Properties, net of accumulated depreciation $ 3,532,944 $ 3,362,285 Total assets 4,262,452 4,077,023 Debt, per balance
Slide 52: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Years Ended Ended December 31, December 31, 2021 2020 2021 2020 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends - unrestri
Slide 53: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Years Ended Ended December 31, December 31, 2021 2020 2021 2020 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to
Slide 54: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) December 31, December 31, 2021 2020 Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development Debt, per balance sheet $ 2,272,304
COPT Defense Properties — Q4 2021 Earnings Presentation on 6ix