EPS of $0.34
FFO per Share, as Adjusted for Comparability, of $0.68
6.3% FFO per Share Growth Year-over-Year
2-cents above the Midpoint of Guidance
Increased Midpoint of 2025 FFO per Share Guidance by 1-cent to $2.67
Implies 3.9% FFO per Share Growth for the Year
Same Property Cash NOI Increased 2.2% in 2Q25 and 4.6% Year-to-Date
Increased Midpoint of 2025 Guidance for the Year by 50 basis points to 3.25%
Continued Strong Occupancy and Leased Levels
Total Portfolio 94.0% Occupied and 95.6% Leased
Defense/IT Portfolio 95.6% Occupied and 96.8% Leased
Strong Leasing in 1H25; On Track to Exceed Initial 2025 Goals
Total Leasing in 2Q25 and 1H25 of 724,000 SF and 1.4 million SF, respectively
Vacancy Leasing in 2Q25 and 1H25 of 233,000 SF and 353,000 SF, respectively
Increased Annual Target to 450,000 SF from 400,000 SF
Tenant Retention in 2Q25 and 1H25 of 90% and 82%, respectively
Increased Midpoint of 2025 Guidance by 250 basis points to 82.5%
Investment Leasing in 2Q25 and 1H25 of 14,000 SF and 103,000 SF, respectively
COPT Defense Properties (“COPT Defense” or the “Company”) (NYSE: CDP) announced results for the second quarter ended June 30, 2025.
Management Comments
Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which concentrates our portfolio near priority U.S. defense installations, continued to generate strong results during the second quarter. FFO per share exceeded the midpoint of our guidance range by $0.02. Based on this outperformance, and our forecast for the remainder of the year, we increased the midpoint of 2025 FFO per share guidance by $0.01 to $2.67, which implies nearly 4% year-over-year growth.
We are exceeding our plan in several areas and raised 2025 guidance on multiple key metrics. We increased the midpoint of 2025 guidance for same property cash NOI growth by 50 basis points to 3.25%, and tenant retention by 250 basis points to 82.5%. Based on our excellent leasing activity, we raised our target for vacancy leasing by 12.5% from 400,000 square feet to 450,000 square feet, with 353,000 square feet signed in the first half of the year, and a strong pipeline of deals in advanced negotiations.
Our favorable business outlook is further supported by continued growth in defense spending as the One Big Beautiful Bill Act, which was signed into law on July 4, 2025, adds $150 billion to defense spending over the next few years, with $113 billion allocated to FY 2026. Combining this allocation with the President’s FY 2026 budget request, this amounts to nearly $950 billion and represents a 13% year-over-year increase, with additional funding directed towards the priority missions we support including cybersecurity, intelligence, surveillance and reconnaissance, missile defense, unmanned autonomous vehicles, and naval fleet and aviation activity, among others. We expect this increase in defense spending will continue to support our strong vacancy leasing volumes and external growth through development and drive earnings growth and shareholder value. Looking forward, we continue to anticipate compound annual FFO per share growth of roughly 4% between 2023 to 2026.”
Financial Highlights
2nd Quarter Financial Results:
> Diluted earnings per share (“EPS”) was $0.34 for the quarter ended June 30, 2025, compared to $0.31 for the quarter ended June 30, 2024.
> Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition and as adjusted for comparability, was $0.68 for the quarter ended June 30, 2025, compared to $0.64 for the quarter ended June 30, 2024.
Operating Performance Highlights
Operating Portfolio Summary:
> At June 30, 2025, the Company’s 24.6 million square foot total portfolio was 94.0% occupied and 95.6% leased, which includes the 22.6 million square foot Defense/IT Portfolio that was 95.6% occupied and 96.8% leased.
> During the quarter ended June 30, 2025, the Company placed into service 26,000 square feet of development that was 100% leased.
Same Property Performance:
> At June 30, 2025, the Company’s 23.9 million square foot Same Property portfolio was 94.5% occupied and 95.7% leased.
> The Company’s Same Property cash NOI increased 2.2% in the quarter ended June 30, 2025, compared to the same period in 2024.
Leasing:
> Total Square Feet Leased: For the quarter ended June 30, 2025, the Company leased 724,000 square feet, including 477,000 square feet of renewals, 233,000 square feet of vacancy leasing, and 14,000 square feet of investment leasing. For the six months ended June 30, 2025, the Company executed 1.4 million square feet of total leasing, including 915,000 square feet of renewals, 353,000 square feet of vacancy leasing, and 103,000 square feet of investment leasing.
> Tenant Retention Rates: During the quarter ended June 30, 2025, the Company renewed 89.7% of expiring square feet in its total portfolio. During the six months ended June 30, 2025, the Company renewed 81.9% of expiring square feet in its total portfolio.
> Rent Spreads and Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2025, straight-line rents on renewals increased 9.5% and 8.8%, respectively, and cash rents on renewed space decreased 3.1% and 2.0%, respectively, while annual escalations on renewing leases averaged 2.4% and 2.5%, respectively.
> Lease Terms: In the quarter ended June 30, 2025, lease terms averaged 6.2 years on renewing leases, 7.9 years on vacancy leasing, and 5.4 years on investment leasing. For the six months ended June 30, 2025, lease terms averaged 4.9 years on renewing leases, 7.6 years on vacancy leasing, and 9.8 years on investment leasing.
Investment Activity Highlights
> Development Pipeline: The Company’s development pipeline consists of five properties totaling 756,000 square feet that were 62% leased as of June 30, 2025. These projects represent a total estimated investment of $309 million, of which $134 million was spent as of June 30, 2025.
Balance Sheet and Capital Transaction Highlights
> For the quarter ended June 30, 2025, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.9x.
> At June 30, 2025, the Company’s net debt to in-place adjusted EBITDA ratio was 5.9x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.8x.
> At June 30, 2025, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.4% with a weighted average maturity of 4.2 years, and 97% of the Company’s debt was subject to fixed interest rates.
Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second quarter 2025 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT Defense’s Investors website: https://investors.copt.com/financial-information/financial-results
2025 Guidance
Management is revising and increasing the midpoint of its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability of $1.28-$1.34 and $2.63-$2.69, respectively, to new ranges of $1.30-$1.34 and $2.65-$2.69, respectively. Management is establishing third quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.32-$0.34 and $0.66-$0.68, respectively. Reconciliations of projected diluted EPS to projected diluted FFOPS, in accordance with Nareit and as adjusted for comparability, are as follows:
Quarter ending |
|
Year ending |
||||||||||
| Reconciliation of Diluted EPS to FFOPS, per Nareit, and As Adjusted for Comparability | September 30, 2025 |
|
December 31, 2025 |
|||||||||
Low |
|
High |
|
Low |
|
High |
||||||
| Diluted EPS | $ |
0.32 |
$ |
0.34 |
$ |
1.30 |
$ |
1.34 |
||||
| Real estate-related depreciation and amortization |
|
0.34 |
|
0.34 |
|
1.35 |
|
1.35 |
||||
| Diluted FFOPS, Nareit definition and as adjusted for comparability | $ |
0.66 |
$ |
0.68 |
$ |
2.65 |
$ |
2.69 |
||||
The Company detailed its initial full year guidance, with supporting assumptions, in a separate press release issued February 6, 2025; that release can be found in the ‘News & Events – Press Releases’ section of COPT Defense’s Investors website: https://investors.copt.com/news-events/press-releases
Conference Call Information
Management will discuss second quarter 2025 results on its conference call tomorrow, details of which are listed below:
Conference Call Date: |
Tuesday, July 29, 2025 |
Time: |
12:00 p.m. Eastern Time |
Participants must register for the conference call at the link below to receive the dial-in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time: https://register-conf.media-server.com/register/BI89e5bfa081c749b38c8796f648dd9c1c
The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT Defense’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 Defense’s Investors website and will be maintained on the website for approximately 90 days after the conference call.
Definitions
For definitions of certain terms used in this press release, please refer to the information furnished in the Company’s Supplemental Information Package furnished on a Form 8-K which can be found on its website (www.copt.com). Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the attached tables.
About COPT Defense
COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (referred to as its Defense/IT Portfolio). The Company’s tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of June 30, 2025, the Company’s Defense/IT Portfolio of 198 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.6 million square feet and was 96.8% leased.
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 and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Although the Company believes that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements and the Company undertakes no obligation to update or supplement any forward-looking statements.
The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(dollars and shares in thousands, except per share data) |
|||||||||||||||
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Lease revenue |
$ |
175,598 |
|
|
$ |
165,619 |
|
|
$ |
350,906 |
|
|
$ |
331,052 |
|
Other property revenue |
|
1,859 |
|
|
|
1,466 |
|
|
|
4,148 |
|
|
|
2,696 |
|
Construction contract and other service revenues |
|
12,458 |
|
|
|
20,258 |
|
|
|
22,717 |
|
|
|
46,861 |
|
Total revenues |
|
189,915 |
|
|
|
187,343 |
|
|
|
377,771 |
|
|
|
380,609 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Property operating expenses |
|
66,915 |
|
|
|
63,410 |
|
|
|
138,955 |
|
|
|
130,156 |
|
Depreciation and amortization associated with real estate operations |
|
39,573 |
|
|
|
38,161 |
|
|
|
78,932 |
|
|
|
76,512 |
|
Construction contract and other service expenses |
|
11,873 |
|
|
|
19,612 |
|
|
|
21,578 |
|
|
|
45,619 |
|
General and administrative expenses |
|
8,202 |
|
|
|
8,591 |
|
|
|
16,350 |
|
|
|
16,969 |
|
Leasing expenses |
|
2,613 |
|
|
|
2,462 |
|
|
|
5,612 |
|
|
|
4,649 |
|
Business development expenses and land carry costs |
|
1,096 |
|
|
|
979 |
|
|
|
2,105 |
|
|
|
2,161 |
|
Total operating expenses |
|
130,272 |
|
|
|
133,215 |
|
|
|
263,532 |
|
|
|
276,066 |
|
Interest expense |
|
(20,938 |
) |
|
|
(20,617 |
) |
|
|
(41,442 |
) |
|
|
(41,384 |
) |
Interest and other income, net |
|
1,223 |
|
|
|
2,884 |
|
|
|
2,791 |
|
|
|
7,006 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
300 |
|
|
|
— |
|
Income before equity in income of unconsolidated entities and income taxes |
|
39,928 |
|
|
|
36,395 |
|
|
|
75,888 |
|
|
|
70,165 |
|
Equity in income of unconsolidated entities |
|
355 |
|
|
|
26 |
|
|
|
726 |
|
|
|
95 |
|
Income tax expense |
|
(117 |
) |
|
|
(14 |
) |
|
|
(220 |
) |
|
|
(182 |
) |
Net income |
|
40,166 |
|
|
|
36,407 |
|
|
|
76,394 |
|
|
|
70,078 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
||||||||
Common units in the Operating Partnership (“OP”) |
|
(846 |
) |
|
|
(694 |
) |
|
|
(1,572 |
) |
|
|
(1,302 |
) |
Other consolidated entities |
|
(973 |
) |
|
|
(599 |
) |
|
|
(1,735 |
) |
|
|
(1,053 |
) |
Net income attributable to common shareholders |
$ |
38,347 |
|
|
$ |
35,114 |
|
|
$ |
73,087 |
|
|
$ |
67,723 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share (“EPS”) computation |
|
|
|
|
|
|
|
||||||||
Numerator for diluted EPS |
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders |
$ |
38,347 |
|
|
$ |
35,114 |
|
|
$ |
73,087 |
|
|
$ |
67,723 |
|
Amount allocable to share-based compensation awards |
|
(112 |
) |
|
|
(92 |
) |
|
|
(229 |
) |
|
|
(215 |
) |
Numerator for diluted EPS |
$ |
38,235 |
|
|
$ |
35,022 |
|
|
$ |
72,858 |
|
|
$ |
67,508 |
|
Denominator |
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic |
|
112,459 |
|
|
|
112,293 |
|
|
|
112,421 |
|
|
|
112,261 |
|
Dilutive effect of share-based compensation awards |
|
765 |
|
|
|
492 |
|
|
|
744 |
|
|
|
501 |
|
Weighted average common shares - diluted |
|
113,224 |
|
|
|
112,785 |
|
|
|
113,165 |
|
|
|
112,762 |
|
Diluted EPS |
$ |
0.34 |
|
|
$ |
0.31 |
|
|
$ |
0.64 |
|
|
$ |
0.60 |
|
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(dollars and shares in thousands, except per share data) |
|||||||||||||||
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
Net income |
$ |
40,166 |
|
|
$ |
36,407 |
|
|
$ |
76,394 |
|
|
$ |
70,078 |
|
Real estate-related depreciation and amortization |
|
39,573 |
|
|
|
38,161 |
|
|
|
78,932 |
|
|
|
76,512 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
(300 |
) |
|
|
— |
|
Depreciation and amortization on unconsolidated real estate JVs |
|
732 |
|
|
|
778 |
|
|
|
1,473 |
|
|
|
1,555 |
|
Funds from operations (“FFO”) |
|
80,471 |
|
|
|
75,346 |
|
|
|
156,499 |
|
|
|
148,145 |
|
FFO allocable to other noncontrolling interests |
|
(1,382 |
) |
|
|
(984 |
) |
|
|
(2,540 |
) |
|
|
(1,820 |
) |
Basic FFO allocable to share-based compensation awards |
|
(550 |
) |
|
|
(599 |
) |
|
|
(1,080 |
) |
|
|
(1,186 |
) |
Basic FFO available to common share and common unit holders (“Basic FFO”) |
|
78,539 |
|
|
|
73,763 |
|
|
|
152,879 |
|
|
|
145,139 |
|
Redeemable noncontrolling interest |
|
— |
|
|
|
471 |
|
|
|
— |
|
|
|
940 |
|
Diluted FFO adjustments allocable to share-based compensation awards |
|
96 |
|
|
|
46 |
|
|
|
201 |
|
|
|
94 |
|
Diluted FFO available to common share and common unit holders (“Diluted FFO”) |
|
78,635 |
|
|
|
74,280 |
|
|
|
153,080 |
|
|
|
146,173 |
|
Executive transition costs |
|
— |
|
|
|
81 |
|
|
|
— |
|
|
|
158 |
|
Diluted FFO comparability adjustments allocable to share-based compensation awards |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Diluted FFO available to common share and common unit holders, as adjusted for comparability |
|
78,635 |
|
|
|
74,360 |
|
|
|
153,080 |
|
|
|
146,330 |
|
Straight line rent adjustments and lease incentive amortization |
|
(1,836 |
) |
|
|
3,788 |
|
|
|
(3,535 |
) |
|
|
7,261 |
|
Amortization of intangibles and other assets included in net operating income (“NOI”) |
|
64 |
|
|
|
211 |
|
|
|
226 |
|
|
|
333 |
|
Share-based compensation, net of amounts capitalized |
|
2,924 |
|
|
|
2,564 |
|
|
|
5,778 |
|
|
|
5,209 |
|
Amortization of deferred financing costs |
|
657 |
|
|
|
681 |
|
|
|
1,324 |
|
|
|
1,366 |
|
Amortization of net debt discounts, net of amounts capitalized |
|
1,060 |
|
|
|
1,023 |
|
|
|
2,111 |
|
|
|
2,037 |
|
Replacement capital expenditures |
|
(23,919 |
) |
|
|
(21,250 |
) |
|
|
(45,383 |
) |
|
|
(42,026 |
) |
Other |
|
75 |
|
|
|
58 |
|
|
|
156 |
|
|
|
195 |
|
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) |
$ |
57,660 |
|
|
$ |
61,435 |
|
|
$ |
113,757 |
|
|
$ |
120,705 |
|
Diluted FFO per share |
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
1.33 |
|
|
$ |
1.27 |
|
Diluted FFO per share, as adjusted for comparability |
$ |
0.68 |
|
|
$ |
0.64 |
|
|
$ |
1.33 |
|
|
$ |
1.27 |
|
Dividends/distributions per common share/unit |
$ |
0.305 |
|
|
$ |
0.295 |
|
|
$ |
0.61 |
|
|
$ |
0.59 |
|
COPT Defense Properties |
|||||||
Summary Financial Data |
|||||||
(unaudited) |
|||||||
(Dollars and shares in thousands, except per share data) |
|||||||
|
June 30,
|
|
December 31,
|
||||
Balance Sheet Data |
|
|
|
||||
Properties, net of accumulated depreciation |
$ |
3,682,556 |
|
|
$ |
3,630,526 |
|
Total assets |
$ |
4,286,950 |
|
|
$ |
4,254,191 |
|
Debt per balance sheet |
$ |
2,438,591 |
|
|
$ |
2,391,755 |
|
Total liabilities |
$ |
2,717,951 |
|
|
$ |
2,693,624 |
|
Redeemable noncontrolling interest |
$ |
23,258 |
|
|
$ |
23,974 |
|
Total equity |
$ |
1,545,741 |
|
|
$ |
1,536,593 |
|
Debt to assets |
|
56.9 |
% |
|
|
56.2 |
% |
Net debt to adjusted book |
|
40.6 |
% |
|
|
40.4 |
% |
|
|
|
|
||||
Defense/IT Portfolio Data (as of period end) |
|
|
|
||||
Number of operating properties |
|
198 |
|
|
|
197 |
|
Total operational square feet (in thousands) |
|
22,583 |
|
|
|
22,549 |
|
% Occupied |
|
95.6 |
% |
|
|
95.4 |
% |
% Leased |
|
96.8 |
% |
|
|
96.7 |
% |
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
||||||||
2025 |
|
2024 |
|
2025 |
|
2024 |
|||||
GAAP |
|
|
|
|
|
|
|
||||
Payout ratio |
|
|
|
|
|
|
|
||||
Net income |
87.7% |
|
93.1% |
|
92.2% |
|
96.8% |
||||
Debt ratios |
|
|
|
|
|
|
|
||||
Net income to interest expense ratio |
1.9x |
|
1.8x |
|
1.8x |
|
1.7x |
||||
Debt to net income ratio |
15.2x |
|
16.4x |
|
N/A |
|
N/A |
||||
Non-GAAP |
|
|
|
|
|
|
|
||||
Payout ratios |
|
|
|
|
|
|
|
||||
Diluted FFO |
44.5% |
|
45.3% |
|
45.7% |
|
46.0% |
||||
Diluted FFO, as adjusted for comparability |
44.5% |
|
45.3% |
|
45.7% |
|
46.0% |
||||
Diluted AFFO |
60.7% |
|
54.8% |
|
61.5% |
|
55.8% |
||||
Debt ratios |
|
|
|
|
|
|
|
||||
Adjusted EBITDA fixed charge coverage ratio |
4.9x |
|
4.7x |
|
4.8x |
|
4.6x |
||||
Net debt to in-place adjusted EBITDA ratio |
5.9x |
|
6.0x |
|
N/A |
|
N/A |
||||
Net debt adj. for fully-leased investment properties to in-place adj. EBITDA ratio |
5.8x |
|
5.9x |
|
N/A |
|
N/A |
||||
|
|
|
|
|
|
|
|
||||
Reconciliation of denominators for per share measures |
|
|
|
|
|
|
|||||
Denominator for diluted EPS |
113,224 |
|
|
112,785 |
|
|
113,165 |
|
|
112,762 |
|
Weighted average common units |
2,177 |
|
|
1,703 |
|
|
2,113 |
|
|
1,664 |
|
Redeemable noncontrolling interest |
— |
|
|
926 |
|
|
— |
|
|
937 |
|
Denominator for diluted FFO per share and as adjusted for comparability |
115,401 |
|
|
115,414 |
|
|
115,278 |
|
|
115,363 |
|
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
Numerators for Payout Ratios |
|
|
|
|
|
|
|
||||||||
Dividends on unrestricted common and deferred shares |
$ |
34,324 |
|
|
$ |
33,153 |
|
|
$ |
68,642 |
|
|
$ |
66,296 |
|
Distributions on unrestricted common units |
|
666 |
|
|
|
505 |
|
|
|
1,327 |
|
|
|
1,005 |
|
Dividends and distributions on restricted shares and units |
|
218 |
|
|
|
238 |
|
|
|
454 |
|
|
|
505 |
|
Total dividends and distributions for GAAP payout ratio |
|
35,208 |
|
|
|
33,896 |
|
|
|
70,423 |
|
|
|
67,806 |
|
Dividends and distributions on antidilutive shares and units |
|
(194 |
) |
|
|
(241 |
) |
|
|
(407 |
) |
|
|
(507 |
) |
Dividends and distributions for non-GAAP payout ratios |
$ |
35,014 |
|
|
$ |
33,655 |
|
|
$ |
70,016 |
|
|
$ |
67,299 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income to earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”), adjusted EBITDA and in-place adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
40,166 |
|
|
$ |
36,407 |
|
|
$ |
76,394 |
|
|
$ |
70,078 |
|
Interest expense |
|
20,938 |
|
|
|
20,617 |
|
|
|
41,442 |
|
|
|
41,384 |
|
Income tax expense |
|
117 |
|
|
|
14 |
|
|
|
220 |
|
|
|
182 |
|
Real estate-related depreciation and amortization |
|
39,573 |
|
|
|
38,161 |
|
|
|
78,932 |
|
|
|
76,512 |
|
Other depreciation and amortization |
|
468 |
|
|
|
564 |
|
|
|
1,010 |
|
|
|
1,172 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
(300 |
) |
|
|
— |
|
Adjustments from unconsolidated real estate JVs |
|
1,515 |
|
|
|
1,709 |
|
|
|
3,033 |
|
|
|
3,380 |
|
EBITDAre |
|
102,777 |
|
|
|
97,472 |
|
|
|
200,731 |
|
|
|
192,708 |
|
Credit loss expense |
|
1,187 |
|
|
|
436 |
|
|
|
1,702 |
|
|
|
458 |
|
Business development expenses |
|
741 |
|
|
|
603 |
|
|
|
1,334 |
|
|
|
1,233 |
|
Executive transition costs |
|
21 |
|
|
|
81 |
|
|
|
78 |
|
|
|
511 |
|
Net gain on other investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(477 |
) |
Adjusted EBITDA |
|
104,726 |
|
|
|
98,592 |
|
|
$ |
203,845 |
|
|
$ |
194,433 |
|
Pro forma NOI adjustment for property changes within period |
|
57 |
|
|
|
— |
|
|
|
|
|
||||
Change in collectability of deferred rental revenue |
|
20 |
|
|
|
27 |
|
|
|
|
|
||||
In-place adjusted EBITDA |
$ |
104,803 |
|
|
$ |
98,619 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures |
|
|
|
|
|
|
|
||||||||
Tenant improvements and incentives |
$ |
15,293 |
|
|
$ |
15,045 |
|
|
$ |
29,051 |
|
|
$ |
27,821 |
|
Building improvements |
|
5,641 |
|
|
|
5,705 |
|
|
|
7,513 |
|
|
|
10,658 |
|
Leasing costs |
|
4,929 |
|
|
|
3,110 |
|
|
|
8,390 |
|
|
|
6,700 |
|
Net (exclusions from) additions to tenant improvements and incentives |
|
(241 |
) |
|
|
(1,040 |
) |
|
|
3,297 |
|
|
|
(724 |
) |
Excluded building improvements |
|
(1,703 |
) |
|
|
(1,570 |
) |
|
|
(1,904 |
) |
|
|
(2,388 |
) |
Excluded leasing costs |
|
— |
|
|
|
— |
|
|
|
(964 |
) |
|
|
(41 |
) |
Replacement capital expenditures |
$ |
23,919 |
|
|
$ |
21,250 |
|
|
$ |
45,383 |
|
|
$ |
42,026 |
|
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Interest expense |
$ |
20,938 |
|
|
$ |
20,617 |
|
|
$ |
41,442 |
|
|
$ |
41,384 |
|
Less: Amortization of deferred financing costs |
|
(657 |
) |
|
|
(681 |
) |
|
|
(1,324 |
) |
|
|
(1,366 |
) |
Less: Amortization of net debt discounts, net of amounts capitalized |
|
(1,060 |
) |
|
|
(1,023 |
) |
|
|
(2,111 |
) |
|
|
(2,037 |
) |
COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and gain or loss on interest rate derivatives |
|
759 |
|
|
|
808 |
|
|
|
1,511 |
|
|
|
1,612 |
|
Scheduled principal amortization |
|
457 |
|
|
|
662 |
|
|
|
918 |
|
|
|
1,431 |
|
Capitalized interest |
|
1,126 |
|
|
|
643 |
|
|
|
2,053 |
|
|
|
1,232 |
|
Denominator for fixed charge coverage-Adjusted EBITDA |
$ |
21,563 |
|
|
$ |
21,026 |
|
|
$ |
42,489 |
|
|
$ |
42,256 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income to NOI from real estate operations, same property NOI from real estate operations and same property cash NOI from real estate operations |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
40,166 |
|
|
$ |
36,407 |
|
|
$ |
76,394 |
|
|
$ |
70,078 |
|
Construction contract and other service revenues |
|
(12,458 |
) |
|
|
(20,258 |
) |
|
|
(22,717 |
) |
|
|
(46,861 |
) |
Depreciation and other amortization associated with real estate operations |
|
39,573 |
|
|
|
38,161 |
|
|
|
78,932 |
|
|
|
76,512 |
|
Construction contract and other service expenses |
|
11,873 |
|
|
|
19,612 |
|
|
|
21,578 |
|
|
|
45,619 |
|
General and administrative expenses |
|
8,202 |
|
|
|
8,591 |
|
|
|
16,350 |
|
|
|
16,969 |
|
Leasing expenses |
|
2,613 |
|
|
|
2,462 |
|
|
|
5,612 |
|
|
|
4,649 |
|
Business development expenses and land carry costs |
|
1,096 |
|
|
|
979 |
|
|
|
2,105 |
|
|
|
2,161 |
|
Interest expense |
|
20,938 |
|
|
|
20,617 |
|
|
|
41,442 |
|
|
|
41,384 |
|
Interest and other income, net |
|
(1,223 |
) |
|
|
(2,884 |
) |
|
|
(2,791 |
) |
|
|
(7,006 |
) |
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
(300 |
) |
|
|
— |
|
Equity in income of unconsolidated entities |
|
(355 |
) |
|
|
(26 |
) |
|
|
(726 |
) |
|
|
(95 |
) |
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income of unconsolidated entities |
|
1,870 |
|
|
|
1,735 |
|
|
|
3,759 |
|
|
|
3,475 |
|
Income tax expense |
|
117 |
|
|
|
14 |
|
|
|
220 |
|
|
|
182 |
|
NOI from real estate operations |
|
112,412 |
|
|
|
105,410 |
|
|
|
219,858 |
|
|
|
207,067 |
|
Non-Same Property NOI from real estate operations |
|
(3,747 |
) |
|
|
(1,318 |
) |
|
|
(6,917 |
) |
|
|
(1,863 |
) |
Same Property NOI from real estate operations |
|
108,665 |
|
|
|
104,092 |
|
|
|
212,941 |
|
|
|
205,204 |
|
Straight line rent adjustments and lease incentive amortization |
|
(9 |
) |
|
|
182 |
|
|
|
145 |
|
|
|
4,095 |
|
Amortization of acquired above- and below-market rents |
|
(69 |
) |
|
|
(69 |
) |
|
|
(138 |
) |
|
|
(138 |
) |
Lease termination fees, net |
|
(728 |
) |
|
|
(881 |
) |
|
|
(1,562 |
) |
|
|
(1,656 |
) |
Tenant funded landlord assets and lease incentives |
|
(4,929 |
) |
|
|
(2,598 |
) |
|
|
(8,034 |
) |
|
|
(12,962 |
) |
Cash NOI adjustments in unconsolidated real estate JVs |
|
(220 |
) |
|
|
(254 |
) |
|
|
(480 |
) |
|
|
(516 |
) |
Same Property Cash NOI from real estate operations |
$ |
102,710 |
|
|
$ |
100,472 |
|
|
$ |
202,872 |
|
|
$ |
194,027 |
|
COPT Defense Properties |
||||||||
Summary Financial Data |
||||||||
(unaudited) |
||||||||
(in thousands) |
||||||||
|
|
June 30,
|
|
December 31,
|
||||
Reconciliation of total assets to adjusted book |
|
|
|
|
||||
Total assets |
|
$ |
4,286,950 |
|
|
$ |
4,254,191 |
|
Accumulated depreciation |
|
|
1,608,032 |
|
|
|
1,537,293 |
|
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs |
|
|
225,192 |
|
|
|
228,154 |
|
COPT Defense’s share of liabilities of unconsolidated real estate JVs |
|
|
61,026 |
|
|
|
61,294 |
|
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs |
|
|
14,407 |
|
|
|
12,817 |
|
Less: Property - operating lease liabilities |
|
|
(47,372 |
) |
|
|
(49,240 |
) |
Less: Property - finance lease liabilities |
|
|
(377 |
) |
|
|
(391 |
) |
Less: Cash and cash equivalents |
|
|
(21,288 |
) |
|
|
(38,284 |
) |
Less: COPT Defense’s share of cash of unconsolidated real estate JVs |
|
|
(1,944 |
) |
|
|
(2,053 |
) |
Adjusted book |
|
$ |
6,124,626 |
|
|
$ |
6,003,781 |
|
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
||||||
Reconciliation of debt to net debt and net debt adjusted for fully-leased investment properties |
|
|
|
|
|
|
||||||
Debt per balance sheet |
|
$ |
2,438,591 |
|
|
$ |
2,391,755 |
|
|
$ |
2,389,925 |
|
Net discounts and deferred financing costs |
|
|
20,509 |
|
|
|
23,262 |
|
|
|
25,995 |
|
COPT Defense’s share of unconsolidated JV gross debt |
|
|
53,750 |
|
|
|
53,750 |
|
|
|
52,981 |
|
Gross debt |
|
|
2,512,850 |
|
|
|
2,468,767 |
|
|
|
2,468,901 |
|
Less: Cash and cash equivalents |
|
|
(21,288 |
) |
|
|
(38,284 |
) |
|
|
(100,443 |
) |
Less: COPT Defense’s share of cash of unconsolidated real estate JVs |
|
|
(1,944 |
) |
|
|
(2,053 |
) |
|
|
(1,278 |
) |
Net debt |
|
|
2,489,618 |
|
|
|
2,428,430 |
|
|
|
2,367,180 |
|
Costs incurred on fully-leased development properties |
|
|
(60,302 |
) |
|
|
(18,774 |
) |
|
|
(56,646 |
) |
Costs incurred on fully-leased operating property acquisitions |
|
|
— |
|
|
|
(17,034 |
) |
|
|
— |
|
Net debt adjusted for fully-leased investment properties |
|
$ |
2,429,316 |
|
|
$ |
2,392,622 |
|
|
$ |
2,310,534 |
|
Source: COPT Defense Properties
View source version on businesswire.com: https://www.businesswire.com/news/home/20250728153301/en/
Contacts
NEWS RELEASE
IR Contacts:
Venkat Kommineni, CFA
443.285.5587
venkat.kommineni@copt.com