Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q3 2022 Earnings Presentation
54 slides from Copt Defense Properties's earnings presentation, Oct 28, 2022
Slide 1: 3Q 2022 Supplemental Information Package
3Q 2022 SUPPLEMENTAL INFORMATION PACKAGE Corporate Office Properties Trust
Slide 2: Supplemental Information & Earnings Release Contents
Corporate Office Properties Trust Supplemental Information & Earnings Release - Unaudited For the Period Ended 9/30/22 Overview: Section I Summary Description 1 Equity Research Coverage 2 Selected Financial Summary Data 3 Selected Portfolio Data 4 Financial Statements: Section II Consolidated Balanc
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 Camille Bonnel 416-369-2140 camille.bonnel@bofa.com BTIG Tom Catherwood 212-738-6410 tcatherwood@btig.com Capital One Securities Chris Lucas 571-633-8151 christopher.lucas@capitalone
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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Net income 6 $ 32,316 $ 33,595 $ 60,824 $ 14,965 $ 28,794 $ 126,735 $ 6
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 # of Properties Total Portfolio 188 188 188 186 186 Consolidated Portfolio 169 169 169 167 167 Core Portfolio 186 186 186 184 184 Same Properties 176 176 176 176 176 % Occupied Total Portfolio 92.7
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Assets Properties, net: Operating properties, net $ 3,169,992 $ 3,180,790 $ 3,167,851 $ 3,090,510 $ 3,034,365 Development and redevelopment in progress, including land (1) 320,354 25
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Revenues Lease revenue $ 146,481 $ 142,277 $ 141,389 $ 141,892 $ 138,032 $ 430,147 $ 411,776 Other property revenue 1,2
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Net income $ 32,316 $ 33,595 $ 60,824 $ 14,965 $ 28,794 $ 126,735 $ 66,613 Real estate-related depreciation and amortization 35,247 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 EPS Denominator: Weighted average common shares - basic 112,093 112,082 112,020 111,990 111,985 11
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 66,595 $ 67,584 $ 65,992 $ 65,4
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Net income $ 32,316 $ 33,595 $ 60,824 $ 14,965 $ 28,794 $ 126,735 $ 66,613 Interest expense 15,123 14,808 14,424 16,217 15,720 4
Slide 13: Properties by Segment - 9/30/22
Corporate Office Properties Trust Properties by Segment (1) - 9/30/22 (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 3,925 93.8% 97.2% Howard Count
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 - 9/30/22 (dollars and square feet in thousands) As of Period End % of Total NOI from Real Estate Operations Annualized Annualized # of Operational % Occupied Rental Rental Three Months Nine Months P
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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 69,209 $ 67,589 $ 67,21
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 44,723 $ 43,613 $ 41,271 $ 42,666 $ 42,301 $ 129,607 $ 124,481 NoVA Defense/IT 10
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 Nine Months Ended # of Operational Properties Square Feet 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 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 (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 67,512 $ 65,938 $
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 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 43,342 $ 42,452 $ 40,157 $ 41,943 $ 42,18
Slide 20: Leasing - Three Months Ended 9/30/22
Corporate Office Properties Trust Leasing (1)(2) Three Months Ended 9/30/22 (square feet in thousands) Defense/IT Locations Ft Meade/ NoVA Total BW Defense/ Navy Redstone Defense/IT Corridor IT Support Arsenal Locations Other Total Renewed Space Leased Square Feet 440 10 51 — 501 5 506 Expiring Squa
Slide 21: Leasing - Nine Months Ended 9/30/22
Corporate Office Properties Trust Leasing (1)(2) Nine Months Ended 9/30/22 (square feet in thousands) Defense/IT Locations Ft Meade/ NoVA Data Total BW Defense/ Navy Redstone Center Defense/IT Regional Corridor IT Support Arsenal Shells Locations Office Other Total Renewed Space Leased Square Feet 8
Slide 22: Lease Expiration Analysis as of 9/30/22
Corporate Office Properties Trust Lease Expiration Analysis as of 9/30/22 (1) (dollars and square feet in thousands, except per square foot amounts) Annualized % of Core/Total Annualized Rental Square Rental Annualized Revenue of Footage of Revenue of Rental Expiring Leases per Leases Expiring Reven
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 20,347 $ 580,981 99.1% $ 32.9
Slide 24: 2023 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2023 Core Portfolio Quarterly Lease Expiration Analysis as of 9/30/22 (1) (dollars and square feet in thousands, except per square foot amounts) Annualized % of Core Annualized Rental Square Rental Annualized Revenue of Footage of Revenue of Rental Expiring Leases p
Slide 25: Top 20 Tenants as of 9/30/22
Corporate Office Properties Trust Top 20 Tenants as of 9/30/22 (1) (dollars and square feet in thousands) % Weighted Total of Total Average Annualized Annualized Occupied Remaining Rental Revenue Rental Square Lease Term Tenant (2) Revenue (2) Feet (3) United States Government (4) $ 214,548 36.6% 5,
Slide 26: Property Dispositions
Corporate Office Properties Trust Property Dispositions (dollars in thousands) % Occupied on Transaction # of Operational Transaction Transaction Value Property Property Segment Location Properties Megawatts Date Date (in millions) 9651 Hornbaker Road (DC-6) Wholesale Data Center Manassas, VA 1 19.2
Slide 27: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 9/30/22 (1) (dollars and square feet in thousands) Actual or as of 9/30/22 (2) Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Squa
Slide 28: Development Placed in Service
Corporate Office Properties Trust Development Placed in Service as of 9/30/22 (square feet in thousands) Total Property Square Feet Placed in Service Total Space 2022 Placed in % Leased Rentable Service % as of Square 1st 2nd 3rd Total Leased as of Property and Location Property Segment 9/30/22 Feet
Slide 29: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 9/30/22 (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 144 1,630 Howard Coun
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 9/28/22 (Years) (1) Rate (2)(3) 9/30/22 Moody’s Baa3 Stable 3/3/21
Slide 31: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/22 (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% $ 273,000 Mar
Slide 32: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/22 (continued) $700,000 $ Consolidated debt maturities (in thousands) $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 2022 2023 2024 2025 2026 2027 (1) 2028 (2) 2029 2031 2033 Unsecured Secured Variable/Fixed Rate Debt
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 9/30/22 Line of Credit & Term Loan Covenants (1)(2) Required 9/30/22 Total Debt / Total Assets < 60% 40.8% Total
Slide 34: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 9/30/22 (dollars and square feet in thousands) NOI for the NOI for the COPT Three Months Nine Months Nominal Operational Ended 9/30/22 Ended 9/30/22 Total Assets Venture Ownership Operating Properties Square Feet % Occup
Slide 35: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures (1) (dollars and square feet in thousands) Joint venture information As of 9/30/22 COPT ownership % 10% COPT’s investment $ 38,644 # of Properties 19 Square Feet 3,182 % Occupied 100% COPT’s share of ARR $ 4,699 As of 9/30/2
Slide 36: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 NOI from real estate operations (1) Real estate revenues $ 147,687 $ 143,246 $ 144,260 $ 150,883 $ 146,590
Slide 37: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Discontinued operations Revenues from real estate operations $ — $ — $ 1,980 $ 8,235 $ 7,717 $
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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Total interest expense $ 15,123 $ 14,808 $ 14,424 $ 16,217 $ 15,720 $ 44,355 $ 49,181 Less: Am
Slide 39: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Total assets $ 4,269,329 $ 4,185,193 $ 4,132,026 $ 4,262,452 $ 4,151,138 Accumulated depreciation 1,245,313 1,213,711 1,182,652 1,152,523 1,122,211
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 Payout ratios based on: Diluted FFO; Diluted FFO, as adjusted for comparability; development to in-place adjusted EBITDA ratio and Diluted AFFO Defined as Net debt or Net d
Slide 44: Definitions - Other Definitions
Corporate Office Properties Trust Definitions Other Definitions Redevelopment Properties — Properties previously in operations on which activities to substantially renovate such properties were underway or approved. Acquisition Costs — Transaction costs expensed in connection with executed or antici
Slide 45: COPT Reports 3Q 2022 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 Contact: Michelle Layne 443-285-5452 michelle.layne@copt.com COPT Reports 3Q 2022 Results _______________________________________
Slide 46: Management Comments
Management Comments Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy which has concentrated our portfolio near priority U.S. defense installations continues to produce strong results. Third quarter FFOPS of $0.58 was at the midpoint of o
Slide 47: Investment Activity and Balance Sheet Highlights
Investment Activity Highlights • Development Pipeline: The Company’s development pipeline consists of 12 properties and an expansion of one fully-operational property totaling 1.9 million square feet that were 91.0% leased at September 30, 2022. These projects represent a total estimated investment
Slide 48: Conference Call Information and About COPT
The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT’s Investors website: https://investors.copt.com/news-events/ir-calendar Replay Information A replay of the conference call will be immediately available via webcast only on COPT’s Investo
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 Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Revenues Revenues from real estate operations $ 147,687 $ 138,873 $ 433,2
Slide 50: 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 Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Net income $ 32,316 $ 28,794 $ 126,735 $ 66,613 Real estate-related depreciation and amortiz
Slide 51: Summary Financial Data - Balance Sheet and Portfolio Data
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) September 30, December 31, 2022 2021 Balance Sheet Data Properties, net of accumulated depreciation $ 3,691,411 $ 3,532,944 Total assets 4,269,329 4,262,452 Debt, per balance
Slide 52: Summary Financial Data - Dividends and EBITDA Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends -
Slide 53: Summary Financial Data - Capital Expenditure Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating proper
Slide 54: Summary Financial Data - Net Debt Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) September 30, December 31, September 30, 2022 2021 2021 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 balanc
COPT Defense Properties — Q3 2022 Earnings Presentation on 6ix