Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q3 2021 Earnings Presentation
54 slides from Copt Defense Properties's earnings presentation, Oct 29, 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 September 30, 2021 Overview: Summary Description Equity Research Coverage. Selected Financial Summary Data Selected Portfolio Data Financial Statements: Consolidated Balance Sheets. 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, 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. 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Net income (loss) 6 $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 6
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 9/30/21 6/30/21 (2) 3/31/21 12/31/20 9/30/20 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 186 184 182 181 176 Consolidated Portfolio 167 165 165 164 161 Core Portfolio 184 182 180 179 174 Same Properti
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 Assets Properties, net: Operating properties, net $ 3,227,797 $ 3,099,182 $ 3,106,698 $ 3,115,280 $ 2,999,892 Development and redevelopment in progress, including land (1) 151,438 20
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Revenues Lease revenue $ 145,749 $ 143,658 $ 144,624 $ 139,093 $ 133,875 $ 434,031 $ 397,034 Other property revenue 841
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Net income (loss) $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 66,613 $ 19,329 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, except per share data) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 EPS Denominator: Weighted average common shares - basic 111,985 111,974 111,888 111,817 111,811 11
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 65,179 $ 65,605 $ 64,454 $ 64,1
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Net income (loss) $ 28,794 $ 43,898 $ (6,079) $ 83,549 $ (31,342) $ 66,613 $ 19,329 Interest expense 15,720 15,942 17,519 17,148
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 9/30/21 (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 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 - 9/30/21 (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 Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 66,029 $ 64,840 $ 66,44
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (in thousands) Three Months Ended Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 42,301 $ 42,514 $ 39,666 $ 42,430 $ 41,365 $ 124,481 $ 125,503 NoVA Defense/IT 9,
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 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 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 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 64,643 $ 63,669 $
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 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,706 $ 42,074 $ 39,192 $ 42,069 $ 40,99
Slide 20: Leasing - Office and Data Center Shell Portfolio, Quarter
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 9/30/21 (square feet in thousands) Defense/IT Locations Ft Meade/ Total BW NoVA Navy Redstone Defense/IT Regional Corridor Defense/IT Support Arsenal Locations Office Total Renewed Space Leased Squar
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 9/30/21 (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 Lo
Slide 22: Lease Expiration Analysis as of 9/30/21
Corporate Office Properties Trust Lease Expiration Analysis as of 9/30/21 (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: 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 20,109 $ 564,670 99.6% $ 32.4
Slide 24: 2022 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2022 Core Portfolio Quarterly Lease Expiration Analysis as of 9/30/21 (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 9/30/21 (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 9/30/21 (1) (dollars and square feet in thousands) as of 9/30/21 (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: Development Placed in Service
Corporate Office Properties Trust Development Placed in Service as of 9/30/21 (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 9/30/21 Feet Prior Year 1st Qu
Slide 29: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 9/30/21 (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 146 1,816 Howard Coun
Slide 30: 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 10/8/21 (Years) (1) Rate (2)(3) 9/30/21 Moody’s Baa3 Stable 3/3/21
Slide 31: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/21 (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% $ 10,000 Mar-
Slide 32: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 9/30/21 (continued) 800,000 $ (Consolidated debt maturities in thousands) 600,000 400,000 200,000 0 2021 2022 2023 2024 (1) 2025 2026 2029 2031 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured Debt: 0.0% Re
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 9/30/21 Ended Senior Note Covenants (1) Required Other Notes 5.00% Notes Line of Credit & Term Loan Covenants (1) Required 9/30/21 Total Debt / Total Ass
Slide 34: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 9/30/21 (dollars and square feet in thousands) NOI for the NOI for the COPT Three Months Nine Months Nominal Operational Ended 9/30/21 Ended 9/30/21 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 as of 9/30/21 (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 $ 12,620 $ 15,735 $ 11,949 # 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 Nine Months Ended 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 NOI from real estate operations (1) Real estate revenues $ 146,590 $ 144,423 $ 145,164 $ 139,628 $ 134,443
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 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 9/30/21 9/30/20 Total interest expense $ 15,720 $ 15,942 $ 17,519 $ 17,148 $ 17,152 $ 49,181 $ 50,789 Less: Am
Slide 38: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20 Total assets $ 4,151,138 $ 4,052,032 $ 4,112,948 $ 4,077,023 $ 4,120,189 Accumulated depreciation 1,202,780 1,182,432 1,157,059 1,124,253 1,095,441
Slide 39: 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 40: 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 41: 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 42: 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 43: Definitions: Net Debt to In-Place Adjusted EBITDA, NOI
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 44: 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 45: 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 46: COPT Reports Third 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 47: Financial Highlights and Guidance Increase
this quarter, we are increasing the midpoint of full-year guidance for FFO per share, as adjusted for comparability, to $2.27, which is 8-cents above our original midpoint and represents 7.1% growth over 2020’s elevated results.” Financial Highlights 3rd Quarter Financial Results: • Diluted earnings
Slide 48: Balance Sheet and Capital Transaction Highlights
Balance Sheet and Capital Transaction Highlights • In August, the Company issued $400 million of 2.000% senior unsecured notes due 2029. The Company used net proceeds from this issuance to repay $100.0 million of its term loan facility due December 2022, retire the outstanding $89.0 million balance
Slide 49: Replay Information
Replay Information A replay of the conference call will be immediately available via webcast on the Investors website. Additionally, a telephonic replay of this call will be available beginning at 3:00 p.m. Eastern Time on Friday, October 29, through 2:00 p.m. Eastern Time on Friday, November 12. To
Slide 50: 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, 2021 2020 2021 2020 Revenues Revenues from real estate operations $ 146,590 $ 134,443 $ 436,1
Slide 51: Summary Financial Data (unaudited)
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, 2021 2020 2021 2020 Net income (loss) $ 28,794 $ (31,342) $ 66,613 $ 19,329 Real estate-related depreciation and
Slide 52: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) September 30, December 31, 2021 2020 Balance Sheet Data Properties, net of accumulated depreciation $ 3,607,122 $ 3,562,549 Total assets 4,151,138 4,077,023 Debt, per balance
Slide 53: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2021 2020 2021 2020 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends -
Slide 54: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2021 2020 2021 2020 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating proper
COPT Defense Properties — Q3 2021 Earnings Presentation on 6ix