Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q1 2020 Earnings Presentation
53 slides from Copt Defense Properties's earnings presentation, May 1, 2020
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 March 31, 2020 Overview: Summary Description Equity Research Coverage Selected Financial Summary Data Selected Portfolio Data... Financial Statements: Consolidated Balance Sheets. Consolid
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 Merrill Lynch Jamie Feldman 646-855-5808 james.feldman@baml.com BTIG Tom Catherwood 212-738-6410 tcatherwood@btig.com Capital One Securities Chris Lucas 571-633-8151 christopher.lucas@capitalon
Slide 5: Selected Financial Summary Data
Corporate Office Properties Trust Selected Financial Summary Data (in thousands, except per share data) Page Three Months Ended SUMMARY OF RESULTS Refer. 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Net income 6 $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 22,318 NOI from real estate operations 13 $ 83,830 $
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 171 170 169 169 165 Consolidated Portfolio 156 155 156 156 159 Core Portfolio 169 168 167 167 163 Same Properties 1
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (dollars in thousands) 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Assets Properties, net: Operating properties, net $ 2,813,949 $ 2,772,647 $ 2,713,900 $ 2,719,585 $ 2,865,829 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 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Revenues Lease revenue $ 131,012 $ 130,693 $ 129,461 $ 131,415 $ 130,903 Other property revenue 1,104 1,275 1,273 1,356 1,087 Cons
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Net income $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 22,318 Real estate-related depreciation and amortization 32,596 32,779 34,692 34,802 34,796 Impairment losses on real e
Slide 10: Diluted Share and Unit Computations
Corporate Office Properties Trust Diluted Share and Unit Computations (in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 EPS Denominator: Weighted average common shares - basic 111,724 111,670 111,582 111,557 109,951 Dilutive effect of share-based compensation awards 239 293
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 57,866 $ 56,330 $ 57,430 $ 59,222 $ 56,788 Straight line rent adj
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Net income $ 25,550 $ 44,877 $ 23,246 $ 109,563 $ 22,318 Interest expense 16,840 16,777 17,126 18,475 18,674 Income tax expense (benefit) 49 (104) (131) (176) 194
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 3/31/20 (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 - 3/31/20 (dollars and square feet in thousands) As of Period End # of Office NOI from Real and Data % of Total 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 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 64,438 $ 65,003 $ 63,436 $ 61,659 $ 62,683 NoVA D
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (dollars in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 42,170 $ 43,939 $ 42,604 $ 42,180 $ 40,256 NoVA Defense/IT 9,118 8,963 8,064 8,771 8,757 Lackland Air Force
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 Properties Square Feet 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Core Portfolio: Defense/IT Locations: Fort Meade/BW Corridor 86 8,138 92.2 % 92.1 %
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 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 63,216 $ 63,974 $ 62,809 $ 61,044 $ 61,987
Slide 19: Same Properties Cash NOI by Segment
Corporate Office Properties Trust Same Properties Cash NOI by Segment (dollars in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,848 $ 43,546 $ 42,456 $ 41,836 $ 39,796 NoVA Defense/IT 9,118 8,963 8,06
Slide 20: Leasing - Office and Data Center Shell Portfolio
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 3/31/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Total BW NoVA Navy Defense/IT Regional Corridor Defense/IT Support Locations Office Other Total Renewed Space Leased Square Feet 358
Slide 21: Lease Expiration Analysis
Corporate Office Properties Trust Lease Expiration Analysis as of 3/31/20 (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 Le
Slide 22: 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 18,059 $ 514,232 99.5% $ 31.4
Slide 23: 2020 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2020 Core Portfolio Quarterly Lease Expiration Analysis as of 3/31/20 (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 24: Top 20 Tenants
Corporate Office Properties Trust Top 20 Tenants as of 3/31/20 (1) (dollars and square feet in thousands) % Weighted Total of Total Occupied Square Average Annualized Annualized Feet in Office and Remaining Lease Term Rental Rental Data Center in Office and Data Tenant Revenue (2) Revenue (2) Shells
Slide 25: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 3/31/20 (1) (dollars and square feet in thousands) as of 3/31/20 (2) Actual or Anticipated Total Cost to Shell Anticipated Rentable % Leased as Anticipated Date Placed Completion Operational Property and Segment Location Square
Slide 26: Summary of Redevelopment Projects
Corporate Office Properties Trust Summary of Redevelopment Projects as of 3/31/20 (dollars and square feet in thousands) as of 3/31/20 (1) Total Cost to Actual or Rentable % Leased Incremental Date Anticipated Anticipated Property Square as of Historical Redevelopment Anticipated Cost to Placed in C
Slide 27: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 3/31/20 (square feet in thousands) Square Feet Placed in Total Property Service Space Placed % Leased Rentable 2020 in Service % Property as of Square Leased as of Property and Location Segment 3/31/20 Feet 1st Q
Slide 28: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 3/31/20 (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 196 2,106
Slide 29: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Gross Debt Investment Grade Ratings & Outlook Latest Affirmation Avg. Effective Stated Rate Balance at Fitch BBB- Stable 10/7/19 Maturity (Years) Rate (1)(2) 3/31/20 Moody’s Baa3 Stable 11/20/18 D
Slide 30: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 3/31/20 (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% $ 242,000 Mar
Slide 31: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 3/31/20 (continued) 600,000 $ (Consolidated debt maturities in thousands) 500,000 400,000 300,000 200,000 100,000 0 2020 2021 2022 2023 2024 (1) 2025 2026 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured De
Slide 32: Debt Analysis
Corporate Office Properties Trust Debt Analysis (dollars and square feet in thousands) As of and for Three As of and for Three Months Ended Months Ended Senior Note Covenants (1) Required 3/31/20 Line of Credit & Term Loan Covenants (1) Required 3/31/20 Total Debt / Total Assets < 60% 40.5% Total De
Slide 33: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 3/31/20 (dollars and square feet in thousands) NOI for the Three Months Operational Ended 3/31/20 Total Assets Venture % COPT Operating Properties Square Feet % Occupied % Leased (1) (2) Level Debt Owned Suburban Marylan
Slide 34: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 3/31/20 (dollars and square feet in thousands) DC Shell JV DC Shell JV Joint venture information formed in 2016 formed in 2019 COPT ownership % 50% 10% COPT’s investment $ 37,275 $ 13,945 # 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 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 NOI from real estate operations (1) Real estate revenues $ 132,116 $ 131,968 $ 130,734 $ 132,771 $ 131,990 Property operating expens
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 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Total interest expense $ 16,840 $ 16,777 $ 17,126 $ 18,475 $ 18,674 Less: Amortization of deferred financing costs (575)
Slide 37: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (dollars in thousands) Three Months Ended 3/31/20 12/31/19 9/30/19 6/30/19 3/31/19 Total assets $ 4,054,457 $ 3,854,453 $ 3,855,369 $ 3,803,469 $ 3,775,859 Accumulated depreciation 1,035,703 1,007,120 97
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 acquisition intangibles included in FFO and NOI (
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 First 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
Financial Highlights 1st Quarter Financial Results: • Diluted earnings per share (“EPS”) was $0.21 for the quarter ended March 31, 2020 as compared to $0.19 for the first quarter of 2019. • Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, was $
Slide 46: 2020 Guidance
• In March, the Company amended its bank term loan scheduled to mature December 2022 to increase the loan amount by $150 million and to lower the interest rate. 2020 Guidance To create capacity for unknown impacts on results that may emerge as a result of the COVID-19 pandemic shutdowns, management
Slide 47: About COPT
through unconsolidated joint ventures, COPT’s core portfolio of 169 office and data center shell properties encompassed 19.2 million square feet and was 95.2% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts that was 76.9% leased. iv
Slide 48: Forward-Looking Information
Forward-Looking Information This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events
Slide 49: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended March 31, 2020 2019 Revenues Revenues from real estate operations $ 132,116 $ 131,990 Construction contract and other service revenues 13,681 16,950 Total revenues 14
Slide 50: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended March 31, 2020 2019 Net income $ 25,550 $ 22,318 Real estate-related depreciation and amortization 32,596 34,796 Gain on sales of real estate (5) — Depreciation and a
Slide 51: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) March 31, December 31, 2020 2019 Balance Sheet Data Properties, net of accumulated depreciation $ 3,419,628 $ 3,340,886 Total assets 4,054,457 3,854,453 Debt, per balance she
Slide 52: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months Ended March 31, 2020 2019 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends - unrestricted shares and deferred shares $ 30,7
Slide 53: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars in thousands) For the Three Months Ended March 31, 2020 2019 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures Tenan
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