Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q4 2020 Earnings Presentation
53 slides from Copt Defense Properties's earnings presentation, Feb 5, 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 December 31, 2020 Overview: Summary Description Equity Research Coverage. Selected Financial Summary Data. Selected Portfolio Data. Financial Statements: Consolidated Balance Sheets. Conso
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 Years Ended SUMMARY OF RESULTS Refer. 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Net income (loss) 6 $ 83,549 $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 102,8
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 181 176 174 171 170 Consolidated Portfolio 164 161 159 156 155 Core Portfolio 179 174 172 169 168 Same Properties
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 Assets Properties, net: Operating properties, net $ 3,115,280 $ 2,999,892 $ 2,888,817 $ 2,813,949 $ 2,772,647 Development and redevelopment in progress, including land (1) 172,614 3
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Revenues Lease revenue $ 139,093 $ 133,875 $ 132,147 $ 131,012 $ 130,693 $ 536,127 $ 522,472 Other property revenue 535 56
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Net income (loss) $ 83,549 $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 102,878 $ 200,004 Real estate-related depreciation and amortization 36,
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 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 EPS Denominator: Weighted average common shares - basic 111,817 111,811 111,800 111,724 111,670 111,7
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 64,188 $ 61,485 $ 57,817 $ 57,866
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Net income (loss) $ 83,549 $ (31,342) $ 25,121 $ 25,550 $ 44,877 $ 102,878 $ 200,004 Interest expense 17,148 17,152 16,797 16,840 1
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 12/31/20 (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 - 12/31/20 (dollars and square feet in thousands) As of Period End # of Office and Data % of Total NOI from Real Estate Operations Center Annualized Annualized 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 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 63,733 $ 63,328 $ 62,698 $
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (in thousands) Three Months Ended Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 42,430 $ 41,365 $ 41,968 $ 42,170 $ 43,939 $ 167,933 $ 168,979 NoVA Defense/IT 9,519
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 Years Ended Properties Square Feet 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 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 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 62,480 $ 62,122 $ 61
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 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 41,821 $ 40,759 $ 41,283 $ 41,848 $ 43,546 $
Slide 20: Leasing - Office and Data Center Shell Portfolio, Quarter
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 12/31/20 (square feet in thousands) Defense/IT Locations Ft Meade/ Data Total BW NoVA Navy Redstone Center Defense/IT Regional Corridor Defense/IT Support Arsenal Shells Locations Office Other Total
Slide 21: Leasing - Office and Data Center Shell Portfolio, Year
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Year Ended 12/31/20 (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 Location
Slide 22: Lease Expiration Analysis
Corporate Office Properties Trust Lease Expiration Analysis as of 12/31/20 (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 Exp
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 19,614 $ 543,774 99.5% $ 31.5
Slide 24: 2021 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2021 Core Portfolio Quarterly Lease Expiration Analysis as of 12/31/20 (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
Slide 25: Top 20 Tenants
Corporate Office Properties Trust Top 20 Tenants as of 12/31/20 (1) (dollars and square feet in thousands) % Weighted Total of Total Occupied Square Average Annualized Annualized Feet in Office and Remaining Lease Term Rental Revenue Rental Data Center in Office and Data Tenant (2) Revenue (2) Shell
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 12/31/20 90% interest in BLC 1 and 2
Slide 27: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 12/31/20 (1) (dollars and square feet in thousands) as of 12/31/20 (2) Actual or Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Sq
Slide 28: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 12/31/20 (square feet in thousands) Total Property Square Feet Placed in Service 2020 Space Placed % Leased Rentable in Service % Property as of Square Prior 1st 2nd 3rd 4th Total Leased as of Property and Locati
Slide 29: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 12/31/20 (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 175 1,999 Howard Cou
Slide 30: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Avg. Effective Gross Debt Maturity Stated Rate Balance at (Years) Rate (1)(2) 12/31/20 Investment Grade Ratings & Outlook Latest Affirmation Debt Fitch BBB- Stable 9/30/20 Secured debt 3.1 3.31% 3
Slide 31: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 12/31/20 (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% $ 143,000 Ma
Slide 32: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 12/31/20 (continued) 600,000 $ (Consolidated debt maturities in thousands) 500,000 400,000 300,000 200,000 100,000 0 2021 2022 2023 2024 (1) 2025 2026 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured 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 12/31/20 Ended Senior Note Covenants (1) Required 2.25% Notes Other Notes Line of Credit & Term Loan Covenants (1) Required 12/31/20 Total Debt / Total A
Slide 34: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 12/31/20 (dollars and square feet in thousands) NOI for the COPT Three Months NOI for the Nominal Operational Ended Year Ended Total Assets Venture Ownership Operating Properties Square Feet % Occupied % Leased 12/31/20
Slide 35: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 12/31/20 (dollars and square feet in thousands) Joint venture information (1) GI-COPT BREIT-COPT B RE COPT COPT ownership % 50% 10% 10% COPT’s investment $ — $ 13,315 $ 15,988 # of Properties N/A 9 8 Square Feet — 1,47
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 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 NOI from real estate operations (1) Real estate revenues $ 139,628 $ 134,443 $ 132,538 $ 132,116 $ 131,968 $
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 Years Ended 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 12/31/20 12/31/19 Total interest expense $ 17,148 $ 17,152 $ 16,797 $ 16,840 $ 16,777 $ 67,937 $ 71,052 Less: Amort
Slide 38: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 12/31/20 9/30/20 6/30/20 3/31/20 12/31/19 Total assets $ 4,077,023 $ 4,120,189 $ 4,011,325 $ 4,054,457 $ 3,854,453 Accumulated depreciation 1,124,253 1,095,441 1,065,094 1,035,703 1,007,12
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 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 44: 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 45: COPT Reports Fourth Quarter and Full Year 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 46: Management Comments
Management Comments Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Notwithstanding the challenges presented by the COVID-19 pandemic, 2020 was a very strong year for our Company. Our operations were minimally impacted by the pandemic shutdowns, as demonstrated by our 99
Slide 47: Operations and Investment Activity Highlights
• Renewal Rates: During the quarter and year ended December 31, 2020, the Company respectively renewed 59.0% and 80.6% of total expiring square feet. • Cash Rent Spreads & Average Escalations on Renewing Leases: For the quarter and year ended December 31, 2020, cash rents on renewed space decreased
Slide 48: Conference Call Information
Conference Call Information Management will discuss fourth quarter and year end 2020 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, February 5, 2021 Time: 12:00 p.m. Eastern Time Telephone Number: (within the U.S.)
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, 2020 2019 2020 2019 Revenues Revenues from real estate operations $ 139,628 $ 131,968 $ 538,725 $ 527
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, 2020 2019 2020 2019 Net income $ 83,549 $ 44,877 $ 102,878 $ 200,004 Real estate-related depreciation and amortization 3
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, 2020 2019 Balance Sheet Data Properties, net of accumulated depreciation $ 3,562,549 $ 3,340,886 Total assets 4,077,023 3,854,453 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, 2020 2019 2020 2019 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, 2020 2019 2020 2019 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to
COPT Defense Properties — Q4 2020 Earnings Presentation on 6ix