Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q2 2021 Earnings Presentation
55 slides from Copt Defense Properties's earnings presentation, Jul 30, 2021
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, 2021 Overview: Section! Summary Description 1 Equity Research Coverage. 2 Selected Financial Summary Data. 3 Selected Portfolio Data. 4 Financial Statements: Section II Consolidat
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. 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Net income (loss) 6 $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 37
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 183 182 181 176 174 Consolidated Portfolio 164 165 164 161 159 Core Portfolio 181 180 179 174 172 Same Properties 1
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 Assets Properties, net: Operating properties, net $ 3,099,182 $ 3,106,698 $ 3,115,280 $ 2,999,892 $ 2,888,817 Development and redevelopment in progress, including land (1) 201,421 18
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Revenues Lease revenue $ 143,658 $ 144,624 $ 139,093 $ 133,875 $ 132,147 $ 288,282 $ 263,159 Other property revenue 765
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Net income (loss) $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 37,819 $ 50,671 Real estate-related depreciation and amortization 37
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 Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 EPS Denominator: Weighted average common shares - basic 111,974 111,888 111,817 111,811 111,800 111
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 65,605 $ 64,454 $ 64,188 $ 61,48
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Net income (loss) $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 37,819 $ 50,671 Interest expense 15,942 17,519 17,148 17,152
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 6/30/21 (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 31 3
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 - 6/30/21 (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 Rent
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 Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 64,840 $ 66,446 $ 63,733
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 42,514 $ 39,666 $ 42,430 $ 41,365 $ 41,968 $ 82,180 $ 84,138 NoVA Defense/IT 9,600
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 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 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 (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 63,405 $ 64,843 $
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 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,886 $ 38,891 $ 41,765 $ 40,679 $ 41,500
Slide 20: Leasing - Office and Data Center Shell Portfolio (Quarter)
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 6/30/21 (square feet in thousands) Defense/IT Locations Ft Meade/ Lackland Data Total BW NoVA Air Force Navy Redstone Center Defense/IT Regional Corridor Defense/IT Base Support Arsenal Shells Locati
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 6/30/21 (square feet in thousands) Defense/IT Locations Ft Meade/ Lackland Data Total BW NoVA Air Force Navy Redstone Center Defense/IT Regional Corridor Defense/IT Base Support Arsenal Shells Loc
Slide 22: Lease Expiration Analysis
Corporate Office Properties Trust Lease Expiration Analysis as of 6/30/21 (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 (continued) / 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 19,658 $ 544,659 99.5% $ 32.2
Slide 24: 2021 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2021 Core Portfolio Quarterly Lease Expiration Analysis as of 6/30/21 (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 Reven
Slide 25: Top 20 Tenants
Corporate Office Properties Trust Top 20 Tenants as of 6/30/21 (1) (dollars and square feet in thousands) % Total of Total Occupied Square Weighted 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: Property Dispositions
Corporate Office Properties Trust Property Dispositions (dollars and square feet in thousands) % Occupied on Transaction # of Operational Transaction Transaction Value Property Property Segment Location Properties Square Feet Date Date (in millions) Quarter Ended 6/30/21 90% interest in MP 1 and 2 (
Slide 27: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 6/30/21 (1) (dollars and square feet in thousands) as of 6/30/21 (2) Actual or Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Squa
Slide 28: Summary of Redevelopment Projects
Corporate Office Properties Trust Summary of Redevelopment Projects as of 6/30/21 (dollars and square feet in thousands) as of 6/30/21 (1) Total Anticipated Cost to Actual or Rentable % Leased Incremental Date Anticipated Anticipated Property Square as of Historical Redevelopment Anticipated Cost to
Slide 29: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 6/30/21 (square feet in thousands) Total Property Square Feet Placed in Service Total Space 2021 Placed in % Leased Rentable Service % Property as of Square Leased as of Property and Location Segment 6/30/21 Feet
Slide 30: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 6/30/21 (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 170 1,816 Howard Coun
Slide 31: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Investment Grade Ratings & Outlook Latest Affirmation Wtd. Avg. Effective Gross Debt Maturity Stated Rate Balance at Fitch BBB- Stable 3/3/21 (Years) (1) Rate (2)(3) 6/30/21 Moody’s Baa3 Stable 3/3/21
Slide 32: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 6/30/21 (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% $ 169,000 Mar
Slide 33: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 6/30/21 (continued) 800,000 $ (Consolidated debt maturities in thousands) 600,000 400,000 200,000 0 2021 2022 2023 2024 (1) 2025 2026 2031 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured Debt: 0.0% Revolve
Slide 34: Debt Analysis
Corporate Office Properties Trust Debt Analysis (dollars and square feet in thousands) As of and for As of and for Three Months Ended 6/30/21 Three Months 2.25% and Ended Senior Note Covenants (1) Required 2.75% Notes 5.00% Notes Line of Credit & Term Loan Covenants (1) Required 6/30/21 Total Debt /
Slide 35: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 6/30/21 (dollars and square feet in thousands) NOI for the NOI for the COPT Three Months Six Months Nominal Operational Ended 6/30/21 Ended 6/30/21 Total Assets Venture Ownership Operating Properties Square Feet % Occupi
Slide 36: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 6/30/21 (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 $ 12,840 $ 15,877 $ 11,869 # of Properties 9 8 2 Square Feet
Slide 37: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (in thousands) Three Months Ended Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 NOI from real estate operations (1) Real estate revenues $ 144,423 $ 145,164 $ 139,628 $ 134,443 $ 132,538
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 Six Months Ended 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 6/30/21 6/30/20 Total interest expense $ 15,942 $ 17,519 $ 17,148 $ 17,152 $ 16,797 $ 33,461 $ 33,637 Less: Amo
Slide 39: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 6/30/21 3/31/21 12/31/20 9/30/20 6/30/20 Total assets $ 4,052,032 $ 4,112,948 $ 4,077,023 $ 4,120,189 $ 4,011,325 Accumulated depreciation 1,182,432 1,157,059 1,124,253 1,095,441 1,065,094
Slide 40: 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 41: 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 42: 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 43: 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 and investments in unconsolidated real estate JVs (net of associated income tax) and real estate-re
Slide 44: Definitions: Net debt to in-place adjusted EBITDA ratio
Corporate Office Properties Trust Definitions Net debt to in-place adjusted EBITDA ratio, Net debt plus preferred equity to in-place adjusted EBITDA ratio, Net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio and Net debt adjusted for fully-leased development plus preferr
Slide 45: Definitions: Replacement capital expenditures
Corporate Office Properties Trust Definitions Replacement capital expenditures Replacement capital expenditures are defined as tenant improvements and incentives, building improvements and leasing costs incurred during the period for operating properties that are not (1) items contemplated prior to
Slide 46: Definitions: Redevelopment, Regional Office, Same Properties
Corporate Office Properties Trust Definitions Redevelopment Properties — Properties previously in operations on which activities to substantially renovate such properties were underway or approved. Regional Office Properties — Includes office properties located in select urban/urban-like submarkets
Slide 47: COPT Reports Second Quarter 2021 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 48: Financial Highlights
Financial Highlights 2nd Quarter Financial Results: • Diluted earnings per share (“EPS”) was $0.38 for the quarter ended June 30, 2021 compared to $0.21 for the second quarter of 2020. • Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, was $0.3
Slide 49: Balance Sheet and Capital Transaction Highlights
Balance Sheet and Capital Transaction Highlights • In April, the Company redeemed the remaining $166 million of its 3.6% senior notes due 2023 and $104 million of its 5.25% senior notes due 2024. • In June, the Company sold two data center shells to a new, 90%/10% joint venture with Blackstone Real
Slide 50: Definitions and About COPT
p.m. Eastern Time on Friday, August 13. To access the replay within the United States, please call 855-859-2056; to access it from outside the United States, please call 404-537-3406. In either case, use passcode 8848821. Definitions For definitions of certain terms used in this press release, pleas
Slide 51: 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 Six Months Ended Ended June 30, June 30, 2021 2020 2021 2020 Revenues Revenues from real estate operations $ 144,423 $ 132,538 $ 289,587 $ 264,65
Slide 52: Summary Financial Data (unaudited): FFO
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, 2021 2020 2021 2020 Net income $ 43,898 $ 25,121 $ 37,819 $ 50,671 Real estate-related depreciation and amortization 37,555
Slide 53: 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) June 30, December 31, 2021 2020 Balance Sheet Data Properties, net of accumulated depreciation $ 3,530,717 $ 3,562,549 Total assets 4,052,032 4,077,023 Debt, per balance shee
Slide 54: Summary Financial Data: EBITDA Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Six Months Ended Ended June 30, June 30, 2021 2020 2021 2020 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends - unrestricte
Slide 55: Summary Financial Data: Replacement Capital Expenditures
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Six Months Ended Ended June 30, June 30, 2021 2020 2021 2020 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to rep
COPT Defense Properties — Q2 2021 Earnings Presentation on 6ix