EX-99.1 2 cdp03312024ex991.htm EX-99.1 Document
Exhibit 99.1

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COPT Defense Properties
Supplemental Information + Earnings Release - Unaudited
For the Period Ended 3/31/24
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Please refer to the section entitled “Definitions” for definitions of non-GAAP measures
and other terms we use herein that may not be customary or commonly known.

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COPT Defense Properties
Summary Description
THE COMPANY
COPT Defense Properties (the “Company” or “COPT Defense”), an S&P MidCap 400 Company, is a self-managed real estate investment trust (“REIT”) focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (which we refer to herein as our Defense/IT Portfolio). Our 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. The ticker symbol under which our common shares are publicly traded on the New York Stock Exchange is “CDP”. As of March 31, 2024, our Defense/IT Portfolio of 193 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.0 million square feet and was 96.8% leased.


MANAGEMENTStephen E. Budorick, President + CEOINVESTOR RELATIONSVenkat Kommineni, VP
Britt A. Snider, EVP + COO
443.285.5587 | venkat.kommineni@copt.com
Anthony Mifsud, EVP + CFO
Michelle Layne, Manager
443.285.5452 | michelle.layne@copt.com


CORPORATE CREDIT RATING
Fitch: BBB- Stable | Moody’s: Baa3 Stable | S&P: BBB- Stable


DISCLOSURE STATEMENT
This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. 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 we cannot predict with accuracy and some of which we might not even anticipate.  Although we believe that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, we 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 we undertake 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 our Annual Report on Form 10-K for the year ended December 31, 2023.
1
COPT Defense Properties
Equity Research Coverage
Firm Senior AnalystPhone Email
Bank of America Securities Camille Bonnel 416.369.2140 camille.bonnel@bofa.com
BTIGTom Catherwood212.738.6410tcatherwood@btig.com
Citigroup Global Markets Michael Griffin 212.816.5871 michael.a.griffin@citi.com
Evercore ISISteve Sakwa212.446.9462steve.sakwa@evercoreisi.com
Green Street  Dylan Burzinski 949.640.8780 dburzinski@greenstreet.com
Jefferies & Co. Peter Abramowitz 212.336.7241  pabramowitz@jefferies.com
JP Morgan Tony Paolone 212.622.6682 anthony.paolone@jpmorgan.com
Raymond James Bill Crow 727.567.2594 bill.crow@raymondjames.com
Truist Securities Michael Lewis 212.319.5659 michael.r.lewis@truist.com
Wedbush SecuritiesRichard Anderson212.938.9949richard.anderson@wedbush.com
Wells Fargo SecuritiesBlaine Heck410.662.2556blaine.heck@wellsfargo.com
 
With the exception of Green Street, the above-listed firms are those whose analysts publish research material on the Company and whose estimates of our FFO per share can be tracked through FactSet. Any opinions, estimates or forecasts the above analysts make regarding COPT Defense’s future performance are their own and do not represent the views, estimates or forecasts of COPT Defense’s management.
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COPT Defense Properties
Selected Financial Summary Data
(in thousands, except per share data)
 PageThree Months Ended
SUMMARY OF RESULTS Refer.3/31/2412/31/239/30/236/30/233/31/23
Net income (loss)7$33,671 $34,820 $(221,207)$31,642 $80,398 
NOI from real estate operations13$101,657 $98,656 $96,494 $95,024 $93,903 
Same Property NOI17$95,403 $94,854 $95,039 $94,223 $92,723 
Same Property cash NOI18$91,619 $89,493 $88,793 $87,989 $86,391 
Adjusted EBITDA11$95,841 $93,934 $90,260 $89,044 $87,443 
FFO per NAREIT8$72,799 $72,360 $70,016 $70,033 $68,816 
Diluted AFFO avail. to common share and unit holders10$59,269 $54,280 $64,122 $46,003 $38,616 
Dividend per common shareN/A$0.295 $0.285 $0.285 $0.285 $0.285 
Per share - diluted:     
EPS9$0.29 $0.30 $(1.94)$0.27 $0.70 
FFO - Nareit9$0.62 $0.62 $0.60 $0.60 $0.59 
FFO - as adjusted for comparability9$0.62 $0.62 $0.60 $0.60 $0.59 
Numerators for diluted per share amounts:
Diluted EPS7$32,480 $33,552 $(217,179)$30,138 $78,467 
Diluted FFO available to common share and unit holders8$71,892 $70,913 $68,512 $68,323 $67,651 
Diluted FFO available to common share and unit holders, as adjusted for comparability8$71,969 $71,100 $68,593 $68,569 $67,651 

3
COPT Defense Properties
Selected Financial Summary Data (continued)
(in thousands, except ratios)
 PageAs of or for Three Months Ended
PAYOUT RATIOS AND CAPITALIZATIONRefer.3/31/2412/31/239/30/236/30/233/31/23
GAAP
Payout ratio:
Net incomeN/A100.7%93.7%N/A103.1%40.6%
Capitalization and debt ratios:
Total assets6$4,232,895 $4,246,966 $4,239,257 $4,246,346 $4,177,992 
Total equity6$1,526,046 $1,523,755 $1,525,873 $1,776,695 $1,768,814 
Debt per balance sheet6$2,416,873 $2,416,287 $2,415,783 $2,176,174 $2,123,012 
Debt to assets3157.1%56.9%57.0%51.2%50.8%
Net income to interest expense ratio311.6x1.7xN/A1.9x4.9x
Debt to net income ratio3117.9x17.3xN/A17.2x6.6x
Non-GAAP
Payout ratios:     
Diluted FFON/A46.8%45.7%47.3%47.5%47.9%
Diluted FFO - as adjusted for comparabilityN/A46.7%45.6%47.3%47.3%47.9%
Diluted AFFON/A56.8%59.7%50.6%70.5%83.9%
Capitalization and debt ratios:    
Total Market Capitalization28$5,218,681 $5,377,815 $5,172,058 $4,914,516 $4,856,761 
Total Equity Market Capitalization28$2,774,450 $2,932,815 $2,726,295 $2,717,000 $2,711,499 
Net debt36$2,372,747 $2,328,941 $2,293,005 $2,234,633 $2,181,408 
Net debt to adjusted book3140.9%40.6%40.5%38.4%38.1%
Adjusted EBITDA fixed charge coverage ratio314.5x4.4x4.6x4.9x5.0x
Net debt to in-place adj. EBITDA ratio316.1x6.1x6.2x6.3x6.2x
Net debt adjusted for fully-leased development to in-place adj. EBITDA ratio316.0x6.0x5.9x5.7x5.8x

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COPT Defense Properties
Selected Portfolio Data (1)
 3/31/2412/31/239/30/236/30/233/31/23
# of Properties
Total Portfolio201198196194194
Consolidated Portfolio177174172170170
Defense/IT Portfolio193190188186186
Same Property189189189189189
% Occupied
Total Portfolio93.6 %94.2 %94.1 %93.4 %92.8 %
Consolidated Portfolio92.2 %92.9 %92.7 %91.9 %91.2 %
Defense/IT Portfolio95.6 %96.2 %95.9 %95.3 %94.4 %
Same Property93.5 %93.8 %93.8 %93.3 %92.6 %
% Leased
Total Portfolio94.9 %95.3 %95.1 %94.9 %95.0 %
Consolidated Portfolio93.8 %94.3 %94.0 %93.7 %93.9 %
Defense/IT Portfolio96.8 %97.2 %97.0 %96.8 %96.7 %
Same Property95.0 %95.1 %94.9 %94.7 %94.9 %
Square Feet (in thousands)
Total Portfolio24,13723,85923,47923,03523,020
Consolidated Portfolio19,84119,56319,18418,74018,725
Defense/IT Portfolio21,99321,71921,33920,89520,878
Same Property22,22722,22722,22722,22722,227
(1)Except for the Consolidated Portfolio, includes properties owned through unconsolidated real estate joint ventures (see page 33).

5
COPT Defense Properties
Consolidated Balance Sheets
(in thousands)
 3/31/2412/31/239/30/236/30/233/31/23
Assets     
Properties, net:     
Operating properties, net$3,272,452 $3,246,806 $3,148,434 $3,272,670 $3,272,873 
Development and redevelopment in progress, including land (1)76,931 82,972 141,854 206,130 151,910 
Land held (1)168,495 173,900 177,909 193,435 189,292 
Total properties, net3,517,878 3,503,678 3,468,197 3,672,235 3,614,075 
Property - operating right-of-use assets 40,368 41,296 40,487 41,652 42,808 
Cash and cash equivalents123,144 167,820 204,238 14,273 15,199 
Investment in unconsolidated real estate joint ventures40,597 41,052 41,495 41,928 42,279 
Accounts receivable, net50,088 48,946 40,211 47,363 46,149 
Deferred rent receivable 153,788 149,237 142,041 136,382 130,153 
Lease incentives, net61,150 61,331 60,506 59,541 49,679 
Deferred leasing costs, net 70,902 70,057 68,033 69,218 68,930 
Investing receivables, net82,523 81,512 87,535 86,708 85,499 
Prepaid expenses and other assets, net92,457 82,037 86,514 77,046 83,221 
Total assets$4,232,895 $4,246,966 $4,239,257 $4,246,346 $4,177,992 
Liabilities and equity     
Liabilities:     
Debt $2,416,873 $2,416,287 $2,415,783 $2,176,174 $2,123,012 
Accounts payable and accrued expenses111,981 133,315 135,605 135,784 128,509 
Rents received in advance and security deposits37,557 35,409 32,063 32,021 34,653 
Dividends and distributions payable33,906 32,644 32,645 32,636 32,630 
Deferred revenue associated with operating leases34,019 29,049 24,590 9,199 9,022 
Property - operating lease liabilities33,141 33,931 32,940 33,923 34,896 
Other liabilities16,406 18,996 17,936 27,699 21,008 
Total liabilities2,683,883 2,699,631 2,691,562 2,447,436 2,383,730 
Redeemable noncontrolling interests22,966 23,580 21,822 22,215 25,448 
Equity:   
COPT Defense’s shareholders’ equity:   
Common shares1,126 1,126 1,125 1,125 1,125 
Additional paid-in capital2,487,468 2,489,989 2,489,717 2,486,996 2,484,501 
Cumulative distributions in excess of net income(1,009,964)(1,009,318)(1,010,885)(762,617)(760,820)
Accumulated other comprehensive income 3,849 2,115 6,094 5,224 1,353 
Total COPT Defense’s shareholders’ equity1,482,479 1,483,912 1,486,051 1,730,728 1,726,159 
Noncontrolling interests in subsidiaries:     
Common units in the Operating Partnership29,214 25,502 25,337 29,563 29,268 
Other consolidated entities14,353 14,341 14,485 16,404 13,387 
Total noncontrolling interests in subsidiaries43,567 39,843 39,822 45,967 42,655 
Total equity1,526,046 1,523,755 1,525,873 1,776,695 1,768,814 
Total liabilities, redeemable noncontrolling interests and equity$4,232,895 $4,246,966 $4,239,257 $4,246,346 $4,177,992 
(1)Refer to pages 25 and 27 for detail.


6
COPT Defense Properties
Consolidated Statements of Operations
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Revenues     
Lease revenue$165,433 $160,337 $155,268 $153,682 $150,560 
Other property revenue1,230 1,225 1,339 1,271 1,121 
Construction contract and other service revenues26,603 18,167 11,949 14,243 15,820 
Total revenues193,266 179,729 168,556 169,196 167,501 
Operating expenses     
Property operating expenses66,746 64,577 61,788 61,600 59,420 
Depreciation and amortization associated with real estate operations38,351 36,735 37,620 37,600 36,995 
Construction contract and other service expenses26,007 17,167 11,493 13,555 15,201 
Impairment losses— — 252,797 — — 
General and administrative expenses8,378 8,240 7,582 7,287 7,996 
Leasing expenses2,187 2,308 2,280 2,345 1,999 
Business development expenses and land carry costs1,182 797 714 726 495 
Total operating expenses142,851 129,824 374,274 123,113 122,106 
Interest expense(20,767)(20,383)(17,798)(16,519)(16,442)
Interest and other income, net4,122 5,659 2,529 2,143 2,256 
Gain on sales of real estate— — — 14 49,378 
Income (loss) before equity in income (loss) of unconsolidated entities and income taxes33,770 35,181 (220,987)31,721 80,587 
Equity in income (loss) of unconsolidated entities69 (240)(68)111 (64)
Income tax expense(168)(121)(152)(190)(125)
Net income (loss)33,671 34,820 (221,207)31,642 80,398 
Net (income) loss attributable to noncontrolling interests:     
Common units in the Operating Partnership(608)(576)3,691 (516)(1,293)
Other consolidated entities(454)(592)1,329 (839)(326)
Net income (loss) attributable to common shareholders$32,609 $33,652 $(216,187)$30,287 $78,779 
Amount allocable to share-based compensation awards(129)(100)(992)(98)(248)
Redeemable noncontrolling interests— — — (51)(64)
Numerator for diluted EPS$32,480 $33,552 $(217,179)$30,138 $78,467 
7
COPT Defense Properties
Funds from Operations
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Net income (loss)$33,671 $34,820 $(221,207)$31,642 $80,398 
Real estate-related depreciation and amortization38,351 36,735 37,620 37,600 36,995 
Impairment losses on real estate— — 252,797 — — 
Gain on sales of real estate— — — (14)(49,378)
Depreciation and amortization on unconsolidated real estate JVs (1)777 805 806 805 801 
FFO - per Nareit (2)72,799 72,360 70,016 70,033 68,816 
FFO allocable to other noncontrolling interests (3)(836)(972)(1,059)(1,239)(708)
Basic FFO allocable to share-based compensation awards(587)(513)(481)(480)(466)
Basic FFO available to common share and common unit holders (2)71,376 70,875 68,476 68,314 67,642 
Redeemable noncontrolling interests469 — — (28)(30)
Diluted FFO adjustments allocable to share-based compensation awards47 38 36 37 39 
Diluted FFO available to common share and common unit holders - per Nareit (2)71,892 70,913 68,512 68,323 67,651 
Executive transition costs77 188 82 248 — 
Diluted FFO comparability adjustments allocable to share-based compensation awards— (1)(1)(2)— 
Diluted FFO available to common share and common unit holders, as adjusted for comparability (2)$71,969 $71,100 $68,593 $68,569 $67,651 

(1)See page 33 for additional disclosure regarding our unconsolidated real estate JVs.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
(3)Pertains to noncontrolling interests in consolidated real estate JVs reported on page 32.

8
COPT Defense Properties
Diluted Share + Unit Computations
(in thousands, except per share data)

 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
EPS Denominator:     
Weighted average common shares - basic112,231 112,199 112,196 112,188 112,127 
Dilutive effect of share-based compensation awards509 432 — 426 410 
Dilutive effect of redeemable noncontrolling interests— — — 62 91 
Weighted average common shares - diluted112,740 112,631 112,196 112,676 112,628 
Diluted EPS$0.29 $0.30 $(1.94)$0.27 $0.70 
Weighted Average Shares for period ended:     
Common shares112,231 112,199 112,196 112,188 112,127 
Dilutive effect of share-based compensation awards509 432 429 426 410 
Common units1,625 1,514 1,520 1,514 1,489 
Redeemable noncontrolling interests947 — — 62 91 
Denominator for diluted FFO per share and as adjusted for comparability115,312 114,145 114,145 114,190 114,117 
Weighted average common units(1,625)(1,514)(1,520)(1,514)(1,489)
Redeemable noncontrolling interests(947)— — — — 
Dilutive effect of additional share-based compensation awards— — (429)— — 
Denominator for diluted EPS112,740 112,631 112,196 112,676 112,628 
Diluted FFO per share - Nareit (1)$0.62 $0.62 $0.60 $0.60 $0.59 
Diluted FFO per share - as adjusted for comparability (1)$0.62 $0.62 $0.60 $0.60 $0.59 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
9
COPT Defense Properties
Adjusted Funds from Operations
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Diluted FFO available to common share and common unit holders, as adjusted for comparability (1)$71,969 $71,100 $68,593 $68,569 $67,651 
Straight line rent adjustments and lease incentive amortization3,473 313 12,882 (3,161)(3,516)
Amortization of intangibles and other assets included in NOI122 26 26 17 (19)
Share-based compensation, net of amounts capitalized2,645 2,318 2,280 2,213 1,733 
Amortization of deferred financing costs685 681 639 628 632 
Amortization of net debt discounts, net of amounts capitalized1,014 1,004 750 622 618 
Replacement capital expenditures (1)(20,776)(21,498)(21,122)(22,664)(28,210)
Other137 336 74 (221)(273)
Diluted AFFO available to common share and common unit holders (“diluted AFFO”) (1)$59,269 $54,280 $64,122 $46,003 $38,616 
Replacement capital expenditures (1)     
Tenant improvements and incentives$12,776 $7,850 $14,457 $32,619 $19,986 
Building improvements4,953 14,762 6,307 2,766 2,141 
Leasing costs3,590 2,440 1,902 3,542 1,750 
Net additions to (exclusions from) tenant improvements and incentives316 (189)(813)(16,007)4,839 
Excluded building improvements and leasing costs(859)(3,365)(731)(256)(506)
Replacement capital expenditures$20,776 $21,498 $21,122 $22,664 $28,210 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
10
COPT Defense Properties
EBITDAre + Adjusted EBITDA
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Net income (loss)$33,671 $34,820 $(221,207)$31,642 $80,398 
Interest expense20,767 20,383 17,798 16,519 16,442 
Income tax expense168 121 152 190 125 
Real estate-related depreciation and amortization38,351 36,735 37,620 37,600 36,995 
Other depreciation and amortization608 619 615 609 602 
Impairment losses on real estate— — 252,797 — — 
Gain on sales of real estate — — — (14)(49,378)
Adjustments from unconsolidated real estate JVs1,671 1,911 1,743 1,559 1,704 
EBITDAre (1)95,236 94,589 89,518 88,105 86,888 
Credit loss expense (recoveries)22 (1,288)372 238 67 
Business development expenses630 445 313 394 241 
Executive transition costs430 188 82 307 247 
Net gain on other investments(477)— (25)— — 
Adjusted EBITDA (1)95,841 93,934 90,260 89,044 87,443 
Pro forma NOI adjustment for property changes within period813 1,341 1,647 56 (318)
Change in collectability of deferred rental revenue— (198)— 28 899 
In-place adjusted EBITDA (1)$96,654 $95,077 $91,907 $89,128 $88,024 
(1)Refer to the section entitled “Definitions” for a definition of this measure.

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COPT Defense Properties
Properties by Segment - 3/31/24
(square feet in thousands)
# of
Properties		Operational
Square Feet		% Occupied% Leased
Defense/IT Portfolio:
Fort Meade/Baltimore Washington (“BW”) Corridor:    
National Business Park34 4,292 99.1%99.1%
Howard County36 3,064 91.4%92.8%
Other23 1,725 92.9%96.5%
Total Fort Meade/BW Corridor93 9,081 95.3%96.5%
Northern Virginia (“NoVA”) Defense/IT 16 2,500 88.2%92.6%
Lackland AFB (San Antonio, Texas)8 1,062 100.0%100.0%
Navy Support22 1,273 85.9%86.2%
Redstone Arsenal (Huntsville, Alabama)24 2,374 97.4%98.6%
Data Center Shells:
Consolidated Properties6 1,408 100.0%100.0%
Unconsolidated JV Properties (1)24 4,295 100.0%100.0%
Total Defense/IT Portfolio193 21,993 95.6%96.8%
Other 8 2,144 72.5%76.1%
Total Portfolio201 24,137 93.6%94.9%
Consolidated Portfolio177 19,841 92.2%93.8%
(1)See page 33 for additional disclosure regarding our unconsolidated real estate JVs.

chart-27d7ef8e584e420ba80a.jpgchart-0159efe4f31d4dd98d7a.jpg
(2)Refer to the section entitled “Definitions” for a definition of this measure.
12
COPT Defense Properties
Consolidated Real Estate Revenues + NOI by Segment
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Consolidated real estate revenues     
Defense/IT Portfolio:
Fort Meade/BW Corridor$78,068 $74,758 $73,350 $72,176 $69,777 
NoVA Defense/IT 21,426 20,410 20,333 19,841 19,829 
Lackland Air Force Base16,411 17,861 16,193 17,595 15,605 
Navy Support8,226 8,405 8,190 8,118 7,925 
Redstone Arsenal16,808 14,971 13,768 12,978 13,414 
Data Center Shells-Consolidated8,457 7,654 6,811 6,287 6,692 
Total Defense/IT Portfolio149,396 144,059 138,645 136,995 133,242 
Other 17,267 17,503 17,962 17,958 18,439 
Consolidated real estate revenues (1)$166,663 $161,562 $156,607 $154,953 $151,681 
NOI from real estate operations (2)     
Defense/IT Portfolio:
Fort Meade/BW Corridor$50,178 $48,894 $48,134 $47,988 $45,257 
NoVA Defense/IT 12,164 11,972 12,433 12,158 12,257 
Lackland Air Force Base7,723 7,708 7,626 7,644 7,660 
Navy Support4,600 4,783 4,257 4,602 4,382 
Redstone Arsenal11,016 10,157 8,820 8,228 8,778 
Data Center Shells:
Consolidated properties7,514 6,966 6,133 5,544 6,098 
COPT Defense’s share of unconsolidated real estate JVs1,740 1,671 1,675 1,671 1,642 
Total Defense/IT Portfolio94,935 92,151 89,078 87,835 86,074 
Other 6,722 6,505 7,416 7,189 7,829 
NOI from real estate operations (1)$101,657 $98,656 $96,494 $95,024 $93,903 
(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
13
COPT Defense Properties
Cash NOI by Segment
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Cash NOI from real estate operations (1)     
Defense/IT Portfolio:
Fort Meade/BW Corridor$47,117 $46,173 $45,513 $45,727 $43,662 
NoVA Defense/IT12,933 12,881 12,765 12,642 11,423 
Lackland Air Force Base8,186 8,114 7,913 7,919 7,915 
Navy Support4,503 5,008 4,621 4,911 5,023 
Redstone Arsenal6,308 4,869 4,861 3,707 4,988 
Data Center Shells:
Consolidated properties6,688 5,868 4,904 4,918 5,379 
COPT Defense’s share of unconsolidated real estate JVs1,477 1,400 1,396 1,385 1,351 
Total Defense/IT Portfolio87,212 84,313 81,973 81,209 79,741 
Other 6,723 6,536 7,400 7,350 7,583 
Cash NOI from real estate operations (2)$93,935 $90,849 $89,373 $88,559 $87,324 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
(2)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
chart-969b2ac8899c4921ac7a.jpgchart-8983d6428ea547218a9a.jpg

14
COPT Defense Properties
NOI from Real Estate Operations + Occupancy by Property Grouping - 3/31/24
(dollars and square feet in thousands)
 As of Period EndNOI from Real Estate Operations (3)
# of
Properties		Operational Square Feet% Occupied (1)% Leased (1)Annualized
Rental Revenue (2)		% of Total
Annualized
Rental Revenue (2)
Property GroupingThree Months Ended
Defense/IT Portfolio:
Same Property: (2)
Consolidated properties160 16,536 94.8%96.4%$553,073 84.4 %$87,587 
Unconsolidated real estate JV 21 3,547 100.0%100.0%5,821 0.9 %1,301 
Total Same Property in Defense/IT Portfolio181 20,083 95.8%97.0%558,894 85.3 %88,888 
Properties Placed in Service (4)8 960 97.8%97.8%24,976 3.8 %5,532 
Other unconsolidated JV properties (5)3 748 100.0%100.0%1,360 0.2 %444 
Acquired property (6)1 202 55.6%55.6%4,070 0.6 %71 
Total Defense/IT Portfolio193 21,993 95.6%96.8%589,300 90.0 %94,935 
Other8 2,144 72.5%76.1%65,622 10.0 %6,722 
Total Portfolio 201 24,137 93.6%94.9%$654,922 100.0 %$101,657 
Consolidated Portfolio177 19,841 92.2%93.8%$647,741 98.9 %$99,917 
(1)Percentages calculated based on operational square feet.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
(3)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(4)Newly developed or redeveloped properties placed in service that were not fully operational by 1/1/23.
(5)Includes three data center shell properties in which we sold ownership interests and retained 10% interests through unconsolidated real estate JVs in 2023.
(6)Includes an office property acquired on 3/15/24.

15
COPT Defense Properties
Same Property (1) Average Occupancy Rates by Segment 
(square feet in thousands)
 # of PropertiesOperational Square FeetThree Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Defense/IT Portfolio:
Fort Meade/BW Corridor91 8,693 96.2 %96.2 %95.8 %94.8 %93.0 %
NoVA Defense/IT16 2,500 87.9 %88.5 %89.8 %89.9 %90.6 %
Lackland Air Force Base8 1,062 100.0 %100.0 %100.0 %100.0 %100.0 %
Navy Support21 1,244 85.6 %87.8 %87.2 %87.6 %88.9 %
Redstone Arsenal20 2,049 97.7 %97.4 %93.5 %90.6 %89.7 %
Data Center Shells:
Consolidated properties4 988 100.0 %100.0 %100.0 %100.0 %100.0 %
Unconsolidated JV properties21 3,547 100.0 %100.0 %100.0 %100.0 %100.0 %
Total Defense/IT Portfolio181 20,083 95.7 %95.9 %95.5 %94.8 %94.1 %
Other 8 2,144 72.0 %73.9 %75.2 %75.0 %78.6 %
Total Same Property189 22,227 93.4 %93.8 %93.5 %92.9 %92.6 %

Same Property (1) Period End Occupancy Rates by Segment 
(square feet in thousands)
# of PropertiesOperational Square Feet
 3/31/2412/31/239/30/236/30/233/31/23
Defense/IT Portfolio:
Fort Meade/BW Corridor91 8,693 96.1 %96.3 %96.1 %95.4 %93.4 %
NoVA Defense/IT16 2,500 88.2 %88.9 %89.5 %89.9 %90.7 %
Lackland Air Force Base8 1,062 100.0 %100.0 %100.0 %100.0 %100.0 %
Navy Support21 1,244 86.4 %88.0 %87.4 %87.4 %88.4 %
Redstone Arsenal20 2,049 97.5 %97.7 %95.7 %92.3 %89.7 %
Data Center Shells:
Consolidated properties4 988 100.0 %100.0 %100.0 %100.0 %100.0 %
Unconsolidated JV properties21 3,547 100.0 %100.0 %100.0 %100.0 %100.0 %
Total Defense/IT Portfolio181 20,083 95.8 %96.0 %95.8 %95.2 %94.2 %
Other 8 2,144 72.5 %73.2 %75.4 %74.9 %77.6 %
Total Same Property189 22,227 93.5 %93.8 %93.8 %93.3 %92.6 %
(1)Includes properties stably owned and 100% operational since at least 1/1/23.

16
COPT Defense Properties
Same Property Real Estate Revenues + NOI by Segment
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Same Property real estate revenues     
Defense/IT Portfolio:
Fort Meade/BW Corridor$76,082 $74,008 $73,350 $72,177 $69,769 
NoVA Defense/IT21,426 20,411 20,333 19,840 19,829 
Lackland Air Force Base16,411 17,860 16,193 17,596 15,605 
Navy Support8,073 8,251 8,035 7,964 7,771 
Redstone Arsenal14,311 13,861 13,520 12,820 13,292 
Data Center Shells-Consolidated6,427 6,186 6,205 6,285 6,293 
Total Defense/IT Portfolio142,730 140,577 137,636 136,682 132,559 
Other 15,262 15,500 15,953 15,964 16,790 
Same Property real estate revenues$157,992 $156,077 $153,589 $152,646 $149,349 
Same Property NOI from real estate operations (“NOI”)     
Defense/IT Portfolio:
Fort Meade/BW Corridor$48,330 $48,239 $48,134 $47,988 $45,257 
NoVA Defense/IT12,164 11,972 12,433 12,158 12,257 
Lackland Air Force Base7,723 7,708 7,625 7,645 7,660 
Navy Support4,522 4,702 4,177 4,510 4,293 
Redstone Arsenal9,321 9,148 8,665 8,134 8,682 
Data Center Shells:
Consolidated properties5,527 5,538 5,539 5,544 5,753 
COPT Defense’s share of unconsolidated real estate JVs1,301 1,233 1,236 1,232 1,245 
Total Defense/IT Portfolio88,888 88,540 87,809 87,211 85,147 
Other 6,515 6,314 7,230 7,012 7,576 
Same Property NOI (1)$95,403 $94,854 $95,039 $94,223 $92,723 
(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.



17
COPT Defense Properties
Same Property Cash NOI by Segment
(dollars in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Same Property cash NOI from real estate operations (“cash NOI”)     
Defense/IT Portfolio:
Fort Meade/BW Corridor$47,052 $46,267 $45,513 $45,727 $43,662 
NoVA Defense/IT12,933 12,882 12,764 12,642 11,423 
Lackland Air Force Base8,186 8,114 7,913 7,919 7,915 
Navy Support4,429 4,932 4,545 4,825 4,940 
Redstone Arsenal6,412 4,966 4,953 3,771 5,015 
Data Center Shells:
Consolidated properties4,984 4,960 4,865 4,918 5,101 
COPT Defense’s share of unconsolidated real estate JVs1,183 1,108 1,106 1,095 1,092 
Total Defense/IT Portfolio85,179 83,229 81,659 80,897 79,148 
Other 6,440 6,264 7,134 7,092 7,243 
Same Property cash NOI (1)$91,619 $89,493 $88,793 $87,989 $86,391 
Percentage change in total Same Property cash NOI (1)(2)6.1%
Percentage change in Defense/IT Portfolio Same Property cash NOI (2)7.6%

(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(2)Represents the change between the current period and the same period in the prior year.

chart-09840a3f20d84db79d4a.jpgchart-40e0dce2b7434ad3b4ea.jpg
18
COPT Defense Properties
Leasing (1)(2)
Three Months Ended 3/31/24
(square feet in thousands)
Defense/IT Portfolio
 Ft Meade/BW CorridorNoVA Defense/ITNavy SupportRedstone ArsenalTotal Defense/IT PortfolioOther Total
Renewed Space    
Leased Square Feet227 116 80 85 509 42 551 
Expiring Square Feet272 127 125 89 613 93 706 
Vacating Square Feet45 11 45 4 105 51 155 
Retention Rate (% based upon square feet)83.5 %91.5 %64.1 %95.3 %82.9 %45.6 %78.0 %
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $2.89 $5.77 $0.63 $0.19 $2.75 $3.10 $2.77 
Weighted Average Lease Term in Years4.2 4.8 3.1 2.0 3.8 7.9 4.1 
Straight-line Rent Per Square Foot
Renewal Straight-line Rent$32.58 $34.91 $28.89 $26.03 $31.44 $32.07 $31.49 
Expiring Straight-line Rent$30.44 $37.87 $24.78 $25.11 $30.36 $30.35 $30.36 
Change in Straight-line Rent7.0 %(7.8 %)16.6 %3.6 %3.6 %5.7 %3.7 %
Cash Rent Per Square Foot
Renewal Cash Rent$32.20 $37.16 $28.71 $25.82 $31.72 $30.83 $31.65 
Expiring Cash Rent$32.62 $39.79 $27.97 $25.45 $32.34 $33.93 $32.46 
Change in Cash Rent(1.3 %)(6.6 %)2.6 %1.4 %(1.9 %)(9.2 %)(2.5 %)
Compound Annual Growth Rate2.4 %1.4 %2.5 %1.7 %2.1 %2.2 %2.1 %
Average Escalations Per Year2.7 %2.5 %2.6 %2.5 %2.6 %1.1 %2.4 %
New Leases
Development and Redevelopment Space
Leased Square Feet— — — 10 10 — 10 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot$— $— $— $3.14 $3.14 $— $3.14 
Weighted Average Lease Term in Years— — — 5.3 5.3 — 5.3 
Straight-line Rent Per Square Foot$— $— $— $23.81 $23.81 $— $23.81 
Cash Rent Per Square Foot$— $— $— $23.50 $23.50 $— $23.50 
Vacant Space
Leased Square Feet80 20 13 — 113 47 160 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $9.23 $9.12 $4.64 $— $8.68 $6.14 $7.93 
Weighted Average Lease Term in Years8.8 9.5 5.1 — 8.5 7.4 8.2 
Straight-line Rent Per Square Foot$32.09 $33.17 $25.29 $— $31.50 $28.03 $30.48 
Cash Rent Per Square Foot$30.77 $34.40 $25.96 $— $30.85 $28.15 $30.05 
Total Square Feet Leased307 136 93 95 632 89 721 
Average Escalations Per Year2.6 %2.6 %2.6 %2.6 %2.6 %1.9 %2.5 %
Average Escalations Excl. Data Center Shells2.5 %
(1)Activity excludes owner occupied space, leases with less than a one-year term and expirations associated with space removed from service. Weighted average lease term is based on the term defined in the lease assuming no exercise of early termination rights. Committed costs for leasing are reported above in the period of lease execution. Actual capital expenditures for leasing are reported on page 10 in the period such costs are incurred.
(2)Refer to the section entitled “Definitions” for definitions of certain terms on this schedule.
19
COPT Defense Properties
Lease Expiration Analysis as of 3/31/24 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Year of Expiration (2)Square Footage of Leases ExpiringAnnualized Rental
Revenue of Expiring Leases (3)		% of Defense/IT
Annualized 
Rental
Revenue
Expiring (3)		Annualized Rental
Revenue of
Expiring Leases per Occupied Sq. Foot (3)
Defense/IT Portfolio
Ft Meade/BW Corridor1,145 $47,852 8.1 %$41.75 
NoVA Defense/IT130 3,987 0.7 %30.71 
Navy Support234 6,275 1.1 %26.79 
Redstone Arsenal49 1,019 0.2 %20.81 
Data Center Shells-Unconsolidated JV Properties310 444 0.1 %14.31 
20241,868 59,577 10.1 %37.47 
Ft Meade/BW Corridor1,870 71,284 12.1 %38.06 
NoVA Defense/IT281 11,849 2.0 %42.21 
Lackland Air Force Base703 39,803 6.8 %56.64 
Navy Support212 4,968 0.8 %23.41 
Redstone Arsenal288 6,860 1.2 %23.82 
Data Center Shells-Unconsolidated JV Properties121 175 — %14.48 
20253,475 134,939 22.9 %40.06 
Ft Meade/BW Corridor938 37,545 6.4 %40.02 
NoVA Defense/IT66 2,250 0.4 %33.84 
Lackland Air Force Base250 12,793 2.2 %51.17 
Navy Support193 6,722 1.1 %34.77 
Redstone Arsenal105 3,021 0.5 %28.71 
Data Center Shells-Unconsolidated JV Properties446 814 0.1 %18.26 
20261,998 63,146 10.7 %39.52 
Ft Meade/BW Corridor793 29,477 5.0 %37.18 
NoVA Defense/IT190 6,443 1.1 %33.86 
Navy Support212 8,231 1.4 %38.80 
Redstone Arsenal163 4,394 0.7 %26.94 
Data Center Shells-Unconsolidated JV Properties364 518 0.1 %14.23 
20271,722 49,063 8.3 %35.18 
Ft Meade/BW Corridor1,421 48,015 8.1 %33.76 
NoVA Defense/IT211 7,170 1.2 %33.93 
Navy Support54 1,462 0.2 %27.31 
Data Center Shells-Unconsolidated JV Properties515 867 0.1 %16.82 
20282,201 57,515 9.8 %33.08 
Thereafter
Consolidated Properties7,227 220,697 37.5 %29.81 
Unconsolidated JV Properties2,539 4,363 0.7 %17.18 
Total Defense/IT Portfolio21,030 $589,300 100.0 %$34.01 
20
COPT Defense Properties
Lease Expiration Analysis as of 3/31/24 (1) (continued)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Year of Expiration (2)Square Footage of Leases ExpiringAnnualized Rental
Revenue of Expiring Leases (3)		% of Total
Annualized 
Rental
Revenue
Expiring (3)		Annualized Rental
Revenue of
Expiring Leases per Occupied Sq. Foot (3)
Total Defense/IT Portfolio21,030 $589,300 90.0 %$34.01 
Other
         202444 1,547 0.2 %34.05 
         2025173 11,027 1.7 %29.40 
         2026164 5,995 0.9 %36.47 
         2027124 4,622 0.7 %36.93 
         2028243 8,951 1.4 %36.73 
Thereafter806 33,480 5.1 %41.33 
Total Other1,554 65,622 10.0 %38.21 
Total Portfolio22,584 $654,922 100.0 %$34.36 
Consolidated Portfolio18,289 $647,741 
Unconsolidated JV Properties4,295 $7,181 
Note: As of 3/31/24, the weighted average lease term was 5.2 years for both the Defense/IT and total portfolio and 5.1 years for the consolidated portfolio.

(1)This expiration analysis reflects consolidated and unconsolidated properties and includes the effect of early renewals completed on existing leases but excludes the effect of new tenant leases on square feet yet to commence as of 3/31/24. With regard to properties owned through unconsolidated real estate joint ventures, the amounts reported above reflect 100% of the properties’ square footage but only reflect the portion of Annualized Rental Revenue that was allocable to COPT Defense’s ownership interest.
(2)The year of lease expiration is based on the lease term determined in accordance with GAAP.
(3)Refer to the section entitled “Definitions” for a definition of annualized rental revenue.
chart-a7d117fb98c14760a9ea.jpg
21
COPT Defense Properties
2024 Defense/IT Portfolio Quarterly Lease Expiration Analysis as of 3/31/24 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Quarter of Expiration (2)Square Footage of Leases ExpiringAnnualized Rental
Revenue of Expiring Leases (3)		% of Defense/IT
Annualized
Rental
Revenue Expiring (3)		Annualized Rental Revenue of Expiring Leases per Occupied Sq. Foot (3)
Defense IT Portfolio
Ft Meade/BW Corridor663 $27,421 4.7 %$41.38 
NoVA Defense/IT89 3,006 0.5 %33.77 
Navy Support21 630 0.1 %29.64 
Redstone Arsenal31 550 0.1 %17.72 
Q2 2024804 31,607 5.4 %39.32 
Ft Meade/BW Corridor240 8,605 1.5 %35.73 
NoVA Defense/IT30 630 0.1 %20.72 
Navy Support97 2,233 0.4 %23.07 
Data Center Shells-Unconsolidated JV Properties310 444 0.1 %14.31 
Q3 2024677 11,912 2.1 %29.84 
Ft Meade/BW Corridor243 11,826 2.0 %48.73 
NoVA Defense/IT10 351 0.1 %33.78 
Navy Support116 3,412 0.6 %29.37 
Redstone Arsenal18 469 0.1 %26.15 
Q4 2024387 16,058 2.8 %41.47 
1,868 $59,577 10.1 %$37.47 
(1)This expiration analysis reflects consolidated and unconsolidated properties and includes the effect of early renewals completed on existing leases but excludes the effect of new tenant leases on square feet yet to commence as of 3/31/24.
(2)The period of lease expiration is based on the lease term determined in accordance with GAAP.
(3)Refer to the section entitled “Definitions” for a definition of annualized rental revenue.

22
COPT Defense Properties
Top 20 Tenants as of 3/31/24 (1)
(dollars and square feet in thousands)
TenantTotal
Annualized
Rental Revenue (2)		%
of Total
Annualized 
Rental Revenue (2)		Occupied Square FeetWeighted Average Remaining Lease Term (3)
United States Government(4)$232,891 35.6 %5,529 3.5 
Fortune 100 Company57,542 8.8 %6,182 7.9 
General Dynamics Corporation32,844 5.0 %703 3.6 
Northrop Grumman Corporation15,048 2.3 %519 5.5 
The Boeing Company14,701 2.2 %443 2.7 
CACI International Inc 13,166 2.0 %327 4.2 
Peraton Corp. 12,858 2.0 %330 4.5 
Booz Allen Hamilton, Inc. 12,103 1.8 %297 1.9 
Fortune 100 Company 11,752 1.8 %183 10.5 
Morrison & Foerster, LLP 9,631 1.5 %102 13.0 
CareFirst, Inc.9,067 1.4 %264 10.4 
KBR, Inc. 7,843 1.2 %309 9.1 
Yulista Holding, LLC 7,088 1.1 %368 5.7 
AT&T Corporation 6,774 1.0 %321 5.5 
Mantech International Corp. 6,584 1.0 %200 1.5 
Jacobs Solutions Inc. 6,474 1.0 %185 5.2 
Wells Fargo & Company 6,270 1.0 %145 4.4 
The University System of Maryland 6,054 0.9 %172 5.8 
Lockheed Martin Corporation 5,712 0.9 %194 6.0 
The Mitre Corporation 5,406 0.8 %152 2.2 
Subtotal Top 20 Tenants 479,808 73.3 %16,925 5.6 
All remaining tenants 175,114 26.7 %5,659 4.1 
Total / Weighted Average $654,922 100.0 %22,584 5.2 

(1)For properties owned through unconsolidated real estate JVs, includes COPT Defense’s share of those properties’ ARR of $7.2 million (see page 33 for additional information).
(2)Refer to the section entitled “Definitions” for a definition of annualized rental revenue.
(3)Weighted average remaining lease term is based on the lease term determined in accordance with GAAP. The weighting of the lease term was computed based on occupied square feet (excluding leases not associated with square feet, such as ground leases).
(4)Substantially all of our government leases are subject to early termination provisions which are customary in government leases. As of 3/31/24, $5.8 million of our ARR was through the General Services Administration (GSA), representing 2.5% of our ARR from the United States Government and 0.9% of our total ARR.






23
COPT Defense Properties
Operating Property Acquisition
(square feet in thousands)
PropertyProperty Segment/Sub-SegmentLocation# of PropertiesOperational Square FeetTransaction
Date		% Occupied on Transaction DateTransaction
Value
(in millions)
6841 Benjamin Franklin DriveFort Meade/BW CorridorColumbia, Maryland12023/15/2455.6%$15 

24
COPT Defense Properties
Summary of Development Projects as of 3/31/24 (1)
(dollars and square feet in thousands) 
Total Rentable Square Feet
% Leased as of 3/31/24
as of 3/31/24 (2)
Actual or Anticipated Shell Completion Date Anticipated Operational Date (3)
Anticipated Total CostCost to DateCost to Date Placed in Service
Property and Segment/Sub-SegmentLocation
Defense/IT Portfolio:
Fort Meade/BW Corridor:
400 National Business ParkwayAnnapolis Junction, Maryland138 0%$65,100 $12,776 $— 1Q 251Q 26
Redstone Arsenal:
8100 Rideout Road (4)Huntsville, Alabama128 42%45,991 33,085 11,723 3Q 233Q 24
9700 Advanced Gateway Huntsville, Alabama50 20%11,000 161 — 1Q 251Q 26
Subtotal / Average178 35%56,991 33,246 11,723 
Data Center Shells:
Southpoint Phase 2 Bldg ANorthern Virginia225 100%82,500 27,222 — 3Q 243Q 24
Southpoint Phase 2 Bldg BNorthern Virginia193 100%65,000 5,410 — 3Q 253Q 25
MP 3Northern Virginia225 100%111,800 10,402 — 4Q 254Q 25
Data Center Shells Subtotal / Average643 100%259,300 43,034 — 
Total Defense/IT Portfolio Under Development959 74%$381,391 $89,056 $11,723   
(1)Includes properties under, or contractually committed for, development as of 3/31/24.
(2)Cost includes land, development, leasing costs and allocated portion of structured parking and other shared infrastructure, if applicable.
(3)Anticipated operational date is the earlier of the estimated date when leases have commenced on 100% of a property’s space or one year from the cessation of major construction activities.
(4)Although classified as under development, 27,000 square feet were operational as of 3/31/24.




25
COPT Defense Properties
Development Placed in Service as of 3/31/24
(square feet in thousands)
 
Square Feet Placed in Service
Total Space Placed in Service % Leased as of 3/31/24
Total Property
Property Segment/Sub-Segment
% Leased as of 3/31/24
Rentable Square Feet2024
Property and Location1st Quarter
5300 Redstone Gateway
Huntsville, Alabama
Redstone Arsenal100%46 46 100%
8100 Rideout Road
Huntsville, Alabama
Redstone Arsenal42%128 27 100%
Total Development Placed in Service57%174 73 100%
% Leased as of 3/31/24
100%

26
COPT Defense Properties
Summary of Land Owned/Controlled as of 3/31/24 (1)
(dollars and square feet in thousands)
LocationAcres Estimated Developable Square FeetCarrying Amount
Defense/IT Portfolio land owned/controlled for future development:   
Fort Meade/BW Corridor:
National Business Park1441,483
Howard County19290
Other1261,338
Total Fort Meade/BW Corridor289 3,111
NoVA Defense/IT29 1,171
Navy Support3864
Redstone Arsenal (2)2953,350
Total Defense/IT Portfolio land owned/controlled for future development6517,696$158,839 
Other land owned/controlled53 1,5389,656 
Land held, net7049,234$168,495 

(1)This land inventory schedule includes properties under ground lease to us and excludes all properties listed as development as detailed on page 25. The costs associated with the land included on this summary are reported on our consolidated balance sheet in the line entitled “land held.”
(2)This land is controlled under a long-term master lease agreement to LW Redstone Company, LLC, a consolidated JV (see page 32). As this land is developed in the future, the JV will execute site-specific leases under the master lease agreement. Lease payments will commence under the site-specific leases as cash rents under tenant leases commence at the respective properties.
27
COPT Defense Properties
Capitalization Overview
(dollars, shares and units in thousands)
Wtd. Avg. Maturity (Years) (1)Stated RateEffective Rate
(2)(3)
Amount Outstanding at 3/31/24
Debt
Secured debt1.45.04 %3.54 %$98,820 
Unsecured debt5.63.26 %3.34 %2,345,411 
Total Consolidated Debt5.43.33 %3.34 %$2,444,231 
Fixed-rate debt (3)5.62.98 %3.34 %$2,444,231 
Variable-rate debt (3)3.46.67 %N/A— 
Total Consolidated Debt$2,444,231 
Common Equity
Common Shares112,641 
Common Units (4)2,148 
Total Common Shares and Units114,789 
Closing Common Share Price on 3/28/24
$24.17 
Equity Market Capitalization (5)$2,774,450 
Total Market Capitalization (5)$5,218,681 
(1)Calculated assuming exercise of extension options on our Revolving Credit Facility and term loan.
(2)Excludes the effect of deferred financing cost amortization.
(3)Includes the effect of interest rate swaps with notional amounts totaling $233.0 million that hedge the risk of changes in interest rates on variable-rate debt. We had swaps in place for all of our variable-rate debt balances as of 3/31/24.
(4)Includes certain unvested share-based compensation awards in the form of profit interest units.
(5)Refer to the section entitled “Definitions” for a definition of this measure.











Investment Grade Ratings & OutlookLatest Report
FitchBBB-Stable11/22/23
Moody’sBaa3Stable1/22/24
S&PBBB-Stable9/7/23
chart-3ab0a36fc706447fae0a.jpgchart-f348493531154c379b0a.jpg
28
COPT Defense Properties
Summary of Outstanding Debt as of 3/31/24
(dollars in thousands)
Unsecured DebtStated RateAmount OutstandingMaturity DateSecured DebtStated RateAmount OutstandingBalloon Payment Due Upon MaturityMaturity Date
Revolving Credit FacilitySOFR+
0.10%+1.05%		$75,000 Oct-26(1)(2)LW Redstone:
1000, 1200 & 1100 Redstone Gateway (3)4.47%(4)$27,865 $27,649 Jun-24
Senior Unsecured Notes
2.25% due 20262.25%400,000 Mar-264000 & 4100 Market Street and 8800 Redstone Gateway (2)(3) SOFR
+0.10%+1.55%		22,400 $22,100 Mar-25(6)
5.25% due 20285.25%345,000 Sep-28(5)
2.00% due 20292.00%400,000 Jan-29M Square:
2.75% due 20312.75%600,000 Apr-315825 & 5850 University Research Court (3) 3.82%37,975 $35,603 Jun-26
2.90% due 20332.90%400,000 Dec-33
Subtotal - Senior Unsecured Notes2.95%$2,145,000 5801 University Research Court (2)(3)SOFR
+0.10%+1.45%		10,580 $10,020 Aug-26
Unsecured Bank Term LoansTotal Secured Debt5.04%$98,820 
2026 MaturitySOFR+
0.10%+1.30%		$125,000 Jan-26(2)(7)
Other Unsecured Debt0.00%411 May-26
Total Unsecured Debt3.26%$2,345,411 
Debt Summary
Total Unsecured Debt3.26%$2,345,411 
Total Secured Debt5.04%98,820 
Consolidated Debt3.33%$2,444,231 
Debt per balance sheet$2,416,873 
Net discounts and deferred financing costs27,358 
Consolidated Debt2,444,231 
COPT Defense’s share of unconsolidated JV gross debt (8)52,819 
Gross debt$2,497,050 
(1)The Company’s $600.0 million Revolving Credit Facility matures in October 2026 and may be extended by two six-month periods at our option.
(2)Pre-payable anytime without penalty.
(3)These properties are owned through consolidated joint ventures.
(4)Represents the weighted average rate of three loans on the properties.
(5)These notes are due in 2028 unless earlier exchanged, redeemed or repurchased only in the event of certain circumstances and during certain periods defined under the terms of the notes. Upon exchange of the notes, the principal amount of notes exchanged is payable in cash, with the remainder of the exchange obligation, if any, payable in cash, common shares or a combination thereof at our election.
(6)The loan maturity may be extended for two one-year periods, provided certain conditions are met.
(7)The Company’s term loan matures in January 2026 and may be extended by two 12-month periods at our option.
(8)See page 33 for additional disclosure regarding our unconsolidated real estate joint ventures.

29
COPT Defense Properties
Summary of Outstanding Debt as of 3/31/24 (continued)

chart-2eac257542c94ec1ad8a.jpg
chart-a10e1aa33cc44d03a48a.jpgchart-01ac7d8e4bb4484baa6a.jpg
(1)Revolving Credit Facility maturity of $75.0 million is included above in 2027 assuming our exercise of two six-month extension options.
(2)Term loan balance of $125.0 million is included in 2028 assuming our exercise of two 12-month extension options. Also includes $345.0 million principal amount of exchangeable senior notes due in 2028 unless earlier exchanged, redeemed or repurchased only in the event of certain circumstances and during certain periods defined under the terms of the notes.
(3)Includes the effect of interest rate swaps with notional amounts totaling $233.0 million that hedge the risk of changes in interest rates on variable-rate debt.
30
COPT Defense Properties
Debt Analysis
(dollars and square feet in thousands)
As of and for Three Months Ended
3/31/24
As of and for Three Months Ended
3/31/24
Senior Note Covenants (1)RequiredLine of Credit & Term Loan Covenants (1)(2)Required
Total Debt / Total Assets< 60%42.5%Total Debt / Total Assets< 60%38.3%
Secured Debt / Total Assets< 40%1.7%Secured Debt / Total Assets< 40%2.0%
Debt Service Coverage> 1.5x4.3xAdjusted EBITDA / Fixed Charges> 1.5x4.6x
Unencumbered Assets / Unsecured Debt> 150%234.3%Unsecured Debt / Unencumbered Assets< 60%38.0%
Unencumbered Adjusted NOI / Unsecured Interest Expense> 1.75x4.6x
Debt RatiosPage Refer.Unencumbered Portfolio Analysis
GAAP# of unencumbered properties173 
Debt per balance sheet6$2,416,873 % of total portfolio86 %
Total assets6$4,232,895 Unencumbered square feet in-service20,124 
Debt to assets57.1 %% of total portfolio83 %
Net income7$33,671 NOI from unencumbered real estate operations$97,073 
Debt to net income ratio (2)17.9 x% of total NOI from real estate operations95 %
Interest expense7$20,767 Adjusted EBITDA from unencumbered real estate operations$91,257 
Net income to interest expense ratio (2)1.6 x% of total adjusted EBITDA from real estate operations95 %
Unencumbered adjusted book$5,528,468 
Non-GAAP% of total adjusted book95 %
Net debt36$2,372,747 
Adjusted book36$5,806,374 
Net debt to adjusted book40.9 %
Net debt adj. for fully-leased development36$2,329,713 
In-place adjusted EBITDA11$96,654 
Net debt to in-place adjusted EBITDA ratio 6.1 x
Net debt adj. for fully-leased devel. to in-place adj. EBITDA ratio6.0 x
Denominator for debt service coverage35$20,641 
Denominator for fixed charge coverage35$21,230 
Adjusted EBITDA11$95,841 
Adjusted EBITDA debt service coverage ratio4.6 x
Adjusted EBITDA fixed charge coverage ratio4.5 x
(1)The covenants are calculated as defined in the applicable agreements, and the calculations differ between those agreements.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
31
COPT Defense Properties
Consolidated Real Estate Joint Ventures as of 3/31/24
(dollars and square feet in thousands)

NOI from Real Estate Operations (1)Venture Level Debt Outstanding (3)COPT Defense Nominal
Ownership %
Operating PropertiesOperational
Square Feet		% Occupied% LeasedThree Months EndedTotal Assets (2)
Suburban Maryland:      
M Square Associates, LLC (4 properties)
414 88.8%95.5%$1,565 $92,514 $48,555 50%
Huntsville, Alabama:
LW Redstone Company, LLC (23 properties)
2,237 98.0%99.2%10,660 593,434 50,265 85%(4)
Washington, D.C.:
Stevens Place (1 property)
188 60.6%83.5%1,255 130,123 — 95%
Total / Average2,839 94.2%97.7%$13,480 $816,071 $98,820 
 
        
Non-Operating PropertiesEstimated Developable Square FeetTotal Assets (2)Venture Level Debt OutstandingCOPT Defense Nominal Ownership %
Suburban Maryland:    
M Square Research Park348 $5,942 $— 50%
Huntsville, Alabama:    
Redstone Gateway (5)3,501 130,075 — 85%(3)
Total3,849 $136,017 $—  
 
(1)Represents NOI from real estate operations of the JV operating properties before allocation to JV partners.
(2)Total assets includes the assets of the consolidated JV plus any outside investment basis.
(3)Excludes debt from us to the JV, which is eliminated in the presentation of our consolidated financial statements.
(4)Our partner receives an annual priority return of 13.5% on its $9.0 million in contributed equity, plus certain fees for leasing and development, and we expect to receive all other distributions from the JV.
(5)Total assets include $78.0 million in notes receivable due from the City of Huntsville (including accrued interest and excluding allowance for credit losses) in connection with infrastructure costs funded by the JV.
32
COPT Defense Properties
Unconsolidated Real Estate Joint Ventures as of 3/31/24 (1)
(dollars and square feet in thousands) 
Joint venture information
COPT Defense ownership %
10 %
COPT Defense’s investment
$37,615 (2)
# of Properties24 
Square Feet4,295 
% Occupied100 %
COPT Defense’s share of ARR$7,181 
Balance sheet informationTotalCOPT Defense’s Share (4)
Operating properties, net$953,549 $95,355 
Total assets$1,052,588 $105,259 
Debt (3)$524,949 $52,495 
Total liabilities$609,039 $60,904 
Three Months Ended
Operating information TotalCOPT Defense’s Share (4)
Revenue$20,891 $2,089 
Operating expenses(3,492)(349)
NOI from real estate operations and EBITDAre (5)17,399 1,740 
Interest expense(8,933)(893)
Depreciation and amortization(8,238)(778)
Net income$228 $69 
NOI from real estate operations (per above) (5)$17,399 $1,740 
Straight line rent adjustments(637)(64)
Amortization of acquired above- and below-market rents(1,988)(199)
Cash NOI from real estate operations (5)$14,774 $1,477 
(1)Includes equity method investments in five JVs that own and operate data center shell properties.
(2)Includes $40.6 million reported in “Investment in unconsolidated real estate joint ventures” and $3.0 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheet.
(3)Maturities on JV debt range from 2027 (assuming exercise of three one-year extension options) to 2030.
(4)Represents the portion allocable to our ownership interest.
(5)Refer to the section entitled “Definitions” for definitions of these measures.



33
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Net income (loss)$33,671 $34,820 $(221,207)$31,642 $80,398 
Construction contract and other service revenues(26,603)(18,167)(11,949)(14,243)(15,820)
Depreciation and other amortization associated with real estate operations38,351 36,735 37,620 37,600 36,995 
Construction contract and other service expenses26,007 17,167 11,493 13,555 15,201 
Impairment losses— — 252,797 — — 
General and administrative expenses8,378 8,240 7,582 7,287 7,996 
Leasing expenses2,187 2,308 2,280 2,345 1,999 
Business development expenses and land carry costs1,182 797 714 726 495 
Interest expense20,767 20,383 17,798 16,519 16,442 
Interest and other income, net(4,122)(5,659)(2,529)(2,143)(2,256)
Gain on sales of real estate — — — (14)(49,378)
Equity in (income) loss of unconsolidated entities(69)240 68 (111)64 
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities (1)1,740 1,671 1,675 1,671 1,642 
Income tax expense168 121 152 190 125 
NOI from real estate operations101,657 98,656 96,494 95,024 93,903 
Straight line rent adjustments and lease incentive amortization3,632 703 13,262 (2,916)(3,818)
Amortization of acquired above- and below-market rents(24)(121)(120)(129)(166)
Amortization of intangibles and other assets to property operating expenses147 146 147 146 147 
Lease termination fees, net(775)(716)(748)(1,059)(1,221)
Tenant funded landlord assets and lease incentives(10,439)(7,548)(19,383)(2,221)(1,230)
Cash NOI adjustments in unconsolidated real estate JVs(263)(271)(279)(286)(291)
Cash NOI from real estate operations$93,935 $90,849 $89,373 $88,559 $87,324 
NOI from real estate operations (from above)$101,657 $98,656 $96,494 $95,024 $93,903 
Non-Same Property NOI from real estate operations(6,254)(3,802)(1,455)(801)(1,180)
Same Property NOI from real estate operations95,403 94,854 95,039 94,223 92,723 
Straight line rent adjustments and lease incentive amortization5,367 3,142 10,154 (2,696)(3,570)
Amortization of acquired above- and below-market rents(69)(121)(120)(129)(166)
Lease termination fees, net(775)(717)(748)(1,059)(1,221)
Tenant funded landlord assets and lease incentives(8,190)(7,541)(15,402)(2,213)(1,222)
Cash NOI adjustments in unconsolidated real estate JVs(117)(124)(130)(137)(153)
Same Property Cash NOI from real estate operations$91,619 $89,493 $88,793 $87,989 $86,391 
(1)See page 33 for additional disclosure regarding our unconsolidated real estate JVs.
34
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
 Three Months Ended
 3/31/2412/31/239/30/236/30/233/31/23
Real estate revenues
Lease revenue
Fixed contractual payments$126,198 $123,677 $120,408 $118,461 $116,039 
Variable lease payments (1)39,235 36,660 34,860 35,221 34,521 
Lease revenue165,433 160,337 155,268 153,682 150,560 
Other property revenue1,230 1,225 1,339 1,271 1,121 
Real estate revenues$166,663 $161,562 $156,607 $154,953 $151,681 
Provision for credit (recoveries) losses on billed lease revenue$(109)$498 $13 $(196)$269 
Total revenues $193,266 $179,729 $168,556 $169,196 $167,501 
Construction contract and other service revenues(26,603)(18,167)(11,949)(14,243)(15,820)
Real estate revenues$166,663 $161,562 $156,607 $154,953 $151,681 
Total interest expense$20,767 $20,383 $17,798 $16,519 $16,442 
Less: Amortization of deferred financing costs(685)(681)(639)(628)(632)
Less: Amortization of net debt discounts, net of amounts capitalized(1,014)(1,004)(750)(622)(618)
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 derivatives804 819 805 791 773 
Denominator for interest coverage19,872 19,517 17,214 16,060 15,965 
Scheduled principal amortization769 763 753 746 790 
Denominator for debt service coverage20,641 20,280 17,967 16,806 16,755 
Capitalized interest589 1,028 1,487 1,194 770 
Denominator for fixed charge coverage$21,230 $21,308 $19,454 $18,000 $17,525 
Dividends on unrestricted common and deferred shares$33,143 $31,998 $31,996 $31,995 $31,989 
Distributions on unrestricted common units500 430 432 433 430 
Dividends and distributions on restricted shares and units267 209 200 204 215 
Total dividends and distributions for GAAP payout ratio33,910 32,637 32,628 32,632 32,634 
Dividends and distributions on antidilutive shares and units(266)(212)(202)(205)(216)
Dividends and distributions for non-GAAP payout ratios$33,644 $32,425 $32,426 $32,427 $32,418 
(1)Represents primarily lease revenue associated with property operating expense reimbursements from tenants.
35
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
3/31/2412/31/239/30/236/30/233/31/23
Total assets$4,232,895 $4,246,966 $4,239,257 $4,246,346 $4,177,992 
Accumulated depreciation1,434,621 1,400,162 1,367,473 1,334,066 1,300,430 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs225,443 228,484 228,334 226,555 224,791 
COPT Defense’s share of liabilities of unconsolidated real estate JVs60,904 60,583 60,762 60,724 60,734 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs10,364 9,528 8,664 7,800 6,936 
Less: Property - operating lease liabilities(33,141)(33,931)(32,940)(33,923)(34,896)
Less: Property - finance lease liabilities(409)(415)(420)(426)(431)
Less: Cash and cash equivalents(123,144)(167,820)(204,238)(14,273)(15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs(1,159)(852)(1,031)(974)(881)
Adjusted book$5,806,374 $5,742,705 $5,665,861 $5,825,895 $5,719,476 
Gross debt (page 29)
$2,497,050 $2,497,613 $2,498,274 $2,249,880 $2,197,488 
Less: Cash and cash equivalents(123,144)(167,820)(204,238)(14,273)(15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs(1,159)(852)(1,031)(974)(881)
Net debt2,372,747 2,328,941 2,293,005 2,234,633 2,181,408 
Costs incurred on fully-leased development properties(43,034)(53,914)(124,038)(189,407)(137,309)
Net debt adjusted for fully-leased development $2,329,713 $2,275,027 $2,168,967 $2,045,226 $2,044,099 

36
COPT Defense Properties
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 investment trusts (“REITs”).  Since these measures exclude certain items includable in their respective most comparable GAAP measures, reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP and non-GAAP measures.  These measures should not be used as an alternative to the respective most comparable GAAP measures when evaluating our financial performance or to cash flow from operating, investing and financing activities when evaluating our liquidity or ability to make cash distributions or pay debt service.
 
Adjusted book
Defined as total assets presented on our consolidated balance sheet, net of lease liabilities associated with property right-of-use assets, and excluding the effect of cash and cash equivalents, accumulated depreciation on real estate properties, accumulated amortization of intangible assets on real estate acquisitions, accumulated amortization of deferred leasing costs and unconsolidated real estate joint ventures (“JVs”) cash and cash equivalents, liabilities and accumulated depreciation and amortization (of intangibles on property acquisitions and deferred leasing costs) allocable to our ownership interest in the JVs. We use adjusted book for purposes of calculating our net debt to adjusted book, which we believe is a useful supplemental measure for investors to use in further understanding the relationship of our outstanding debt to our assets available to service such debt. We believe that total assets is the most directly comparable GAAP measure to this non-GAAP measure.

Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) 
Adjusted EBITDA is net income or loss adjusted for the effects of interest expense, depreciation and amortization, gain on sales and impairment losses of real estate and investments in unconsolidated real estate JVs, gain or loss on early extinguishment of debt, loss on interest rate derivatives, net gain or loss on other investments, credit loss expense or recoveries, operating property acquisition costs, income taxes, business development expenses, demolition costs on redevelopment and nonrecurring improvements, executive transition costs and certain other expenses that we believe are not relevant to an investor’s evaluation of our ability to repay debt.  Adjusted EBITDA also includes adjustments to net income or loss for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. While EBITDA (earnings before interest, taxes, depreciation and amortization) is a universally-defined supplemental measure, Adjusted EBITDA incorporates additional adjustments for gains and losses from investing and financing activities and certain other items that we believe represent costs that are not closely correlated to (or associated with) our operating performance and are not relevant to an investor’s evaluation of our ability to repay debt. We believe that adjusted EBITDA is a
useful supplemental measure for assessing our un-levered performance and ability to repay outstanding debt from operations.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.
 
Adjusted EBITDA debt service coverage ratio 
This measure divides Adjusted EBITDA by the sum of interest expense (excluding amortization of deferred financing costs and amortization of debt discounts and premiums, net of amounts capitalized, and gains or losses on interest rate derivatives) and scheduled principal amortization on mortgage loans.

Amortization of acquisition intangibles included in NOI 
Represents the amortization of intangible asset and liability categories that is included in net operating income, including amortization of above- or below-market leases and above- or below-market cost arrangements.

Basic FFO available to common share and common unit holders (“Basic FFO”) 
This measure is FFO adjusted to subtract (1) preferred share dividends, (2) income or loss attributable to noncontrolling interests through ownership of preferred units in COPT Defense Properties, L.P. (the “Operating Partnership”) or interests in other consolidated entities not owned by us, (3) depreciation and amortization allocable to noncontrolling interests in other consolidated entities, (4) Basic FFO allocable to share-based compensation awards and (5) issuance costs associated with redeemed preferred shares.  With these adjustments, Basic FFO represents FFO available to common shareholders and holders of common units in the Operating Partnership (“common units”).  Common units are substantially similar to our common shares of beneficial interest (“common shares”) and are exchangeable into common shares, subject to certain conditions.  We believe that Basic FFO is useful to investors due to the close correlation of common units to common shares.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

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 NOI, lease termination fees from tenants to terminate their lease obligations prior to the end of the agreed upon lease terms and rental revenue recognized under GAAP resulting from landlord assets and lease incentives funded by tenants.  Cash NOI also includes adjustments to NOI from real estate operations for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. Under GAAP, rental revenue is recognized evenly over the term of tenant leases (through straight-line rental adjustments and amortization of tenant incentives), which, given the long term nature of our leases, does not align with the economics of when tenant payments are due to us under the arrangements.  Also under GAAP, when a property is acquired, we allocate the acquisition to certain intangible components, which are then amortized into NOI over their estimated lives, even though the resulting revenue adjustments are not reflective of our lease economics.  In addition, revenue from lease termination fees and tenant-
37
COPT Defense Properties
Definitions
funded landlord improvements, absent an adjustment from us, would result in large one-time lump sum amounts in Cash NOI that we do not believe are reflective of a property’s long-term value.  We believe that Cash NOI is a useful supplemental measure of operating performance for a REIT’s operating real estate because it makes adjustments to NOI for the above stated items to be more reflective of the economics of when tenant payments are due to us under our leases and the value of our properties.  As is the case with NOI, the measure is useful in our opinion in evaluating and comparing the performance of reportable segments, Same Property groupings and individual properties.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

COPT Defense’s share of NOI from unconsolidated real estate JVs
Represents the net of revenues and property operating expenses of real estate operations owned through unconsolidated JVs that are allocable to COPT Defense’s ownership interest. This measure is included in the computation of NOI, our segment performance measure, as discussed below.

Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) 
Defined as Diluted FFO, as adjusted for comparability, adjusted for the following: (1) the elimination of the effect of (a) noncash rental revenues and property operating expenses (comprised of straight-line rental adjustments, which includes the amortization of recurring tenant incentives, and amortization of acquisition intangibles included in FFO and NOI, both of which are described under “Cash NOI” above), (b) share-based compensation, net of amounts capitalized, (c) amortization of deferred financing costs, (d) amortization of debt discounts and premiums and (e) amortization of settlements of debt hedges; and (2) replacement capital expenditures (defined below).  Diluted AFFO also includes adjustments to Diluted FFO, as adjusted for comparability for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We believe that Diluted AFFO is a useful supplemental measure of operating performance for a REIT because it incorporates adjustments for: certain revenue and expenses that are not associated with cash to or from us during the period; and certain capital expenditures for operating properties incurred during the period that do require cash outlays.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

Diluted FFO available to common share and common unit holders (“Diluted FFO”) 
Diluted FFO is Basic FFO adjusted to add back any changes in Basic FFO that would result from the assumed conversion of securities that are convertible or exchangeable into common shares.  The computation of Diluted FFO assumes the conversion of common units but does not assume the conversion of other securities that are convertible into common shares if the conversion of those securities would increase Diluted FFO per share in a given period.  We believe that Diluted FFO (which includes discontinued operations, if any) is useful to investors because it is the numerator used to compute Diluted FFO per share, discussed below.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

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 extinguishment of debt; FFO associated with properties that secured non-recourse debt on which we defaulted and, subsequently, extinguished via conveyance of such properties (including property NOI, interest expense and gains on debt extinguishment); loss on interest rate derivatives; executive transition costs associated with named executive officers; and, for periods prior to 10/1/22, demolition costs on redevelopment and nonrecurring improvements and executive transition costs associated with other senior management team members.  Diluted FFO, as adjusted for comparability also includes adjustments to Diluted FFO for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We believe this to be a useful supplemental measure alongside Diluted FFO as it excludes gains and losses from certain investing and financing activities and certain other items that we believe are not closely correlated to (or associated with) our operating performance. We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.
 
Diluted FFO per share 
Diluted FFO per share is (1) Diluted FFO divided by (2) the sum of the (a) weighted average common shares outstanding during a period, (b) weighted average common units outstanding during a period and (c) weighted average number of potential additional common shares that would have been outstanding during a period if other securities that are convertible or exchangeable into common shares were converted or exchanged.  The computation of Diluted FFO per share assumes the conversion of common units but does not assume the conversion of other securities that are convertible into common shares if the conversion of those securities would increase Diluted FFO per share in a given period.  We believe that Diluted FFO per share is useful to investors because it provides investors with a further context for evaluating our FFO results in the same manner that investors use earnings per share (“EPS”) in evaluating net income or loss available to common shareholders.  We believe that diluted EPS is the most directly comparable GAAP measure to this non-GAAP measure.

Diluted FFO per share, as adjusted for comparability 
Defined as (1) Diluted FFO available to common share and common unit holders, as adjusted for comparability divided by (2) the sum of the (a) weighted average common shares outstanding during a period, (b) weighted average common units outstanding during a period and (c) weighted average number of potential additional common shares that would have been outstanding during a period if other securities that are convertible or exchangeable into common shares were converted or exchanged.  The computation of this measure assumes the conversion of common units but does not assume the conversion of other securities that are convertible into common shares if the conversion of those securities would increase the per share measure in a given period.  We believe this to be a useful supplemental measure alongside Diluted FFO per share as it excludes gains and losses from investing and financing activities and certain other items that we
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COPT Defense Properties
Definitions
believe are not closely correlated to (or associated with) our operating performance. We believe that diluted EPS is the most directly comparable GAAP measure to this non-GAAP measure.
 
Earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”) 
Defined as net income or loss adjusted for the effects of interest expense, depreciation and amortization, gains on sales and impairment losses of real estate and investments in unconsolidated real estate JVs, and income taxes. EBITDAre also includes adjustments to net income or loss for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. While EBITDA (earnings before interest, taxes, depreciation and amortization) is a universally-defined supplemental measure, EBITDAre incorporates additional adjustments for gains and losses from investing activities related to our investments in operating properties. We believe that EBITDAre is a useful supplemental measure for assessing our un-levered performance. We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

Funds from operations (“FFO” or “FFO per Nareit”)
Defined as net income or loss 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-related depreciation and amortization. FFO also includes adjustments to net income or loss for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We believe that we use the National Association of Real Estate Investment Trust’s (“Nareit”) definition of FFO, although others may interpret the definition differently and, accordingly, our presentation of FFO may differ from those of other REITs.  We believe that FFO is useful to management and investors as a supplemental measure of operating performance because, by excluding gains on sales and impairment losses of real estate (net of associated income tax) and real estate-related depreciation and amortization, FFO can help one compare our operating performance between periods.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

Gross debt
Defined as debt reported on our consolidated balance sheet adjusted to exclude net discounts and premiums and deferred financing costs, as further adjusted to include outstanding debt of unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We believe that this measure is useful to investors as it represents our total outstanding debt, including our share of unconsolidated joint venture debt. We believe that debt reported on our consolidated balance sheet is the most directly comparable GAAP measure to this non-GAAP measure.


In-place adjusted EBITDA
Defined as Adjusted EBITDA, as further adjusted for: (1) certain events occurring in a three month period to reflect Adjusted EBITDA as if the events occurred at the beginning of such period, including: (a) properties acquired, placed in service or expanded upon subsequent to the commencement of a period made in order to reflect a full period of ownership/operations; (b) properties removed from service or in which we disposed of interests; (c) significant mid-period occupancy changes associated with properties recently placed in service as if such occupancy changes occurred at the beginning of such period; and (2) adjustments to deferred rental revenue associated with changes in our assessment of collectability. The measure also includes adjustments for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We believe that the pro forma adjustments described above are consistent with the requirements for preparation of amounts presented on a pro forma basis in accordance with Article 11 of Regulation S-X. We believe that in-place adjusted EBITDA is a useful supplemental measure of performance for assessing our un-levered performance and ability to repay outstanding debt from operations, as further adjusted for changes in operating properties subsequent to the commencement of a quarter and for the other items noted above that we believe are not closely correlated with our operating performance and are not relevant to an investor’s evaluation of our ability to repay debt.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

Net debt
Defined as Gross debt (total outstanding debt reported per our balance sheet as adjusted to exclude net discounts and premiums and deferred financing costs), as adjusted to subtract cash and cash equivalents as of the end of the period. The measure also includes adjustments to Gross debt for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. We use net debt for purposes of calculating our net debt to adjusted book, which we believe is a useful supplemental measure for investors to use in further understanding the relationship of our outstanding debt to our assets available to service such debt. We believe that debt reported on our consolidated balance sheet is the most directly comparable GAAP measure to this non-GAAP measure.

Net debt adjusted for fully-leased development
Defined as Net debt less costs incurred on properties under development that were 100% leased. We believe that this supplemental measure is useful in providing investors the impact to our debt of fully leased properties under development that are not yet contributing to our adjusted EBITDA. We believe that debt reported on our consolidated balance sheet is the most directly comparable GAAP measure to this non-GAAP measure.

Net debt to Adjusted book
Defined as Net debt divided by Adjusted book (defined above).

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COPT Defense Properties
Definitions
Net debt to in-place adjusted EBITDA ratio and Net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio
Defined as Net debt or Net debt adjusted for fully-leased development divided by in-place adjusted EBITDA (defined above) for the three month period that is annualized by multiplying by four.

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 estate operations owned through unconsolidated real estate JVs that are allocable to COPT Defense’s ownership interest in the JVs. We believe that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of the core real estate operations that is unaffected by depreciation, amortization, financing and general, administrative and leasing expenses; we believe this measure is particularly useful in evaluating the performance of reportable segments, Same Property groupings and individual properties.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

NOI fixed charge coverage ratio and Adjusted EBITDA fixed charge coverage ratio 
These measures divide either NOI from real estate operations or Adjusted EBITDA by the sum of (1) interest expense (excluding amortization of deferred financing costs and amortization of debt discounts and premiums, net of amounts capitalized, and gains or losses on interest rate derivatives), (2) scheduled principal amortization on mortgage loans, (3) capitalized interest, (4) dividends on preferred shares and (5) distributions on preferred units in the Operating Partnership not owned by us.
 
NOI interest coverage ratio and Adjusted EBITDA interest coverage ratio 
These measures divide either NOI from real estate operations or Adjusted EBITDA by interest expense (excluding amortization of deferred financing costs and amortization of debt discounts and premiums, net of amounts capitalized, gains on losses on interest rate derivatives and interest expense on debt in default to be extinguished via conveyance of properties).

Payout ratios based on: Diluted FFO; Diluted FFO, as adjusted for comparability; and Diluted AFFO 
These payout ratios are defined as (1) the sum of dividends on common and deferred shares and distributions to holders of interests in the Operating Partnership to the extent they are dilutive in the respective FFO per share numerators divided by (2) the respective non-GAAP measures.



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 the acquisition of a property, (2) improvements associated with the expansion of a building or its improvements, (3) renovations to a building which change the underlying classification of the building (for example, from industrial to office or Class C office to Class B office), (4) capital improvements that represent the addition of something new to the property rather than the replacement of something (for example, the addition of a new heating and air conditioning unit that is not replacing one that was previously there) or (5) replacements of significant components of a building after the building has reached the end of its original useful life. Replacement capital expenditures excludes expenditures of operating properties included in disposition plans during the period that were already sold or are held for future disposition. For cash tenant incentives not due to the tenant for a period exceeding three months past the date on which such incentives were incurred, we recognize such incentives as replacement capital expenditures in the periods such incentives are due to the tenant. Replacement capital expenditures, which is included in the computation of Diluted AFFO, is intended to represent non-transformative capital expenditures of existing properties held for long-term investment. We believe that the excluded expenditures are more closely associated with our investing activities than the performance of our operating portfolio.

Same Property NOI from real estate operations and Same Property cash NOI
from real estate operations Defined as NOI, or Cash NOI, from real estate operations of Same Property groupings.  We believe that these are important supplemental measures of Same Property operating performance for the same reasons discussed above for NOI from real estate operations and Cash NOI from real estate operations.
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COPT Defense Properties
Definitions
Other Definitions
Acquisition Costs — Transaction costs expensed in connection with executed or anticipated acquisitions of operating properties.
Annualized Rental Revenue (“ARR”) — The monthly contractual base rent as of the reporting date (ignoring free rent then in effect and rent associated with tenant funded landlord assets) multiplied by 12, plus the estimated annualized expense reimbursements under existing leases for occupied space. With regard to properties owned through unconsolidated real estate JVs, we include the portion of ARR allocable to COPT Defense’s ownership interest. We consider ARR to be a useful measure for analyzing revenue sources because, since it is point-in-time based, it does not contain increases and decreases in revenue associated with periods in which lease terms were not in effect; historical revenue under GAAP does contain such fluctuations. We find the measure particularly useful for leasing, tenant, segment and industry analysis.
Average Escalations — Leasing statistic used to report average increase in rental rates over lease terms for leases with a term of greater than one-year.
Cash Rent — Includes monthly contractual base rent (ignoring rent abatements and rent associated with tenant funded landlord assets) multiplied by 12, plus estimated annualized expense reimbursements (average for first 12 months of term for new or renewed leases or as of lease expiration for expiring leases). We believe that cash rent is a useful measure for evaluating the rental rates at the time rent payments commence for our leasing activity, including changes in such rates relative to rates that may have been previously in place.
Committed Cost per Square Foot — Includes tenant improvement allowance (excluding tenant funded landlord assets), leasing commissions and estimated turn key costs and excludes lease incentives. We believe this is a useful measure for evaluating our costs associated with obtaining new leases.
Compound Annual Growth Rate — For renewed space, represents the compound annual growth rate between the first year cash rent of the expired lease and the first year cash rent of the renewal lease.
Debt to Net Income Ratio — Represents debt reported on our consolidated balance sheet divided by net income for the three month period that is annualized by multiplying by four. We do not present this ratio for periods with a net loss.
Defense/IT Portfolio — Represents properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions.
Development Properties — Properties under, or contractually committed for, development.
Equity Market Capitalization — Defined as the sum of: (1) the product of the closing price of our common shares on the NYSE and the sum of (a) common shares outstanding and (b) common units outstanding; and (2) the liquidation value of preferred shares and preferred units in our operating partnership.
First Generation Space — Newly-developed or redeveloped space that has never been occupied.
Net Income to Interest Expense Ratio — Represents net income reported on our consolidated statements of operations divided by interest expense. We do not present this ratio for periods with a net loss.
Net Income Payout Ratio — Defined as (1) the sum of dividends on common and deferred shares and distributions to holders of interests in the Operating Partnership divided by (2) net income. We do not present this ratio for periods with a net loss.
Operational Space — The portion of a property in operations (excludes portion under development or redevelopment).
Redevelopment Properties — Properties previously in operations on which activities to substantially renovate such properties were underway or approved.
Same Property — Operating properties stably owned and 100% operational since at least 1/1/23.
Second Generation Space — Space leased that has been previously occupied.
Straight-line Rent — Includes annual minimum base rents, net of abatements and lease incentives and excluding rent associated with tenant funded landlord assets, on a straight-line basis over the term of the lease, and estimated annual expense reimbursements (as of lease commencement for new or renewed leases or as of lease expiration for expiring leases). We believe that straight-line rent is a useful measures for evaluating the rental rates over the related lease terms for our leasing activity, including changes in such rates relative to rates that may have been previously in place.
Total Market Capitalization — Defined as the sum of: (1) consolidated outstanding debt, excluding discounts, premiums and deferred financing costs; (2) the product of the closing price of our common shares on the NYSE and the sum of (a) common shares outstanding and (b) common units outstanding; and (3) the liquidation value of preferred shares and preferred units in our operating partnership.
Total Portfolio — Operating properties, including ones owned through unconsolidated real estate JVs.
Vacancy Leasing Activity Ratio — Square footage associated with prospective tenants for vacant square feet in service divided by total vacant square feet in service.
Vacant Space Leased — Includes acquired first generation space, vacated second generation space and leases executed on developed and redeveloped space previously placed in service.
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NEWS RELEASE
IR Contacts:
Venkat Kommineni, CFAMichelle Layne
443.285.5587443.285.5452
venkat.kommineni@copt.commichelle.layne@copt.com


COPT Defense Reports First Quarter 2024 Results
_______________________________________________________________

EPS of $0.29
FFO per Share, as Adjusted for Comparability, of $0.62
Exceeded High-End of Guidance

Increased Midpoint of 2024 FFO per Share Guidance by 3-cents to $2.54
Implies 5% FFO per Share Growth at the Midpoint for the Year

Defense/IT Portfolio 95.6% Occupied and 96.8% Leased

Same Property Cash NOI Increased 6.1%
Raised Same Property Cash NOI Guidance for the Year by 50 Basis Points, to 6.0%-7.0%

Committed $91 Million of Capital to New Investments

Placed 73,000 SF of Developments into Service that are 100% Leased

$381 Million of Active Developments (959,000 SF) are 74% Leased
_______________________________________________________________

Excellent Leasing to Start the Year
Total Leasing of 721,000 SF

160,000 SF of Vacancy Leasing
On Track to Achieve Annual Target of 400,000 SF

Tenant Retention of 78%
On Track to Achieve Annual Goal of 75%-85%

_______________________________________________________________


COLUMBIA, MD (BUSINESS WIRE) April 25, 2024 - COPT Defense Properties (“COPT Defense” or the “Company”) (NYSE: CDP) announced results for the first quarter ended March 31, 2024.



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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, generated strong results in the first quarter with FFO per share exceeding the midpoint of our guidance range by $0.02. Based on this outperformance and our forecast over the remainder of the year, we increased the midpoint of 2024 FFO per share guidance by $0.03 to $2.54, which implies 5% year-over-year growth.

In terms of internal growth, the strength of demand for our portfolio is evidenced by our same property cash NOI growth of 6.1% for our Total Portfolio and 7.6% for our Defense/IT Portfolio on a year-over-year basis, which led us to increase our 2024 guidance by 50 basis points at the midpoint. Our Defense/IT Portfolio was 95.6% occupied and 96.8% leased at quarter-end, while our tenant retention rate was 78%, all of which we believe compare favorably to other leading REIT sectors.

In terms of external growth, we committed $91 million of capital to new investments which includes two development projects totaling $76 million at The National Business Park and Redstone Gateway, two of our highest occupancy markets. We also acquired Franklin Center in Columbia Gateway for $15 million, which marks our first acquisition since 2015. This transaction is an excellent opportunity to acquire high quality inventory at a deeply discounted basis, and leverage our Defense/IT franchise and strong demand from defense contractors, to create significant shareholder value.

Our actual and expected performance led our Board of Trustees to approve a 3.5% increase in our quarterly dividend in February, which marks our second consecutive annual increase, following the 3.6% raise in 2023. Looking forward, we continue to anticipate compound annual FFO per share growth of roughly 4% between 2023 to 2026.”

Financial Highlights

1st Quarter Financial Results:
•Diluted earnings per share (“EPS”) was $0.29 for the quarter ended March 31, 2024 as compared to $0.70 for the quarter ended March 31, 2023.

•Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition and as adjusted for comparability, was $0.62 for the quarter ended March 31, 2024 compared to $0.59 for the quarter ended March 31, 2023.





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Operating Performance Highlights

Operating Portfolio Summary:
•At March 31, 2024, the Company’s 24.1 million square foot Total Portfolio was 93.6% occupied and 94.9% leased, which includes the 22.0 million square foot Defense/IT Portfolio that was 95.6% occupied and 96.8% leased.

•During the quarter ended March 31, 2024, the Company placed into service $32.3 million of developments totaling 73,000 square feet that were 100% leased.

Same Property Performance:
•At March 31, 2024, the Company’s 22.2 million square foot same property portfolio was 93.5% occupied and 95.0% leased.

•The Company’s same property cash NOI increased 6.1% for the three months ended March 31, 2024 compared to the same period in 2023.

Leasing:
•Total Square Feet Leased: For the quarter ended March 31, 2024, the Company leased 721,000 square feet, including 551,000 square feet of renewals, 160,000 square feet of vacancy leasing, and 10,000 square feet in development projects.

•Tenant Retention Rates: During the quarter ended March 31, 2024, the Company renewed 78% of expiring square feet in its Total Portfolio and 82.9% in its Defense/IT Portfolio.

•Rent Spreads & Average Escalations on Renewing Leases: For the quarter ended March 31, 2024, straight-line rents on renewals increased 3.7% and cash rents on renewed space decreased 2.5%. For the same time period, annual escalations on renewing leases averaged 2.4%.

•Lease Terms: In the quarter ended March 31, 2024, lease terms averaged 4.1 years on renewing leases, 8.2 years on vacancy leasing, and 5.3 years on development projects.

Investment Activity Highlights
•Development Pipeline: The Company’s development pipeline consists of six properties totaling 959,000 square feet that were 74% leased as of March 31, 2024. These projects represent a total estimated investment of $381.4 million, of which $89.1 million has been spent.

•Acquisition: During the quarter, the Company acquired 6841 Benjamin Franklin Center Drive, a 7-story LEED-Gold office building containing 202,000 square feet in Columbia, Maryland for $15 million.
◦Please see the Company’s Franklin Center acquisition press release dated April 25, 2024 for further details and pages 8-14 of the Company’s 1Q24 Results Presentation (refer to the ‘Associated Supplemental Presentation’ section below).

Balance Sheet and Capital Transaction Highlights
•For the quarter ended March 31, 2024, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.5x.

•At March 31, 2024, the Company’s net debt to in-place adjusted EBITDA ratio was 6.1x and its net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio was 6.0x.



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•At March 31, 2024, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.3% with a weighted average maturity of 5.4 years, and 100% 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 first quarter 2024 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

2024 Guidance
Management is revising its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of $1.15-$1.23, and $2.47-$2.55, respectively, to new ranges of $1.19-$1.25, and $2.51-$2.57, respectively. Management is establishing second quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.29-$0.31 and $0.62-$0.64, respectively. Reconciliations of projected diluted EPS to projected diluted FFOPS, in accordance with Nareit and as adjusted for comparability are as follows:

Reconciliation of Diluted EPS to FFOPS, per Nareit,
and As Adjusted for Comparability
Quarter Ending June 30, 2024
Year Ending December 31, 2024
LowHighLowHigh
Diluted EPS$0.29 $0.31 $1.19 $1.25 
Real estate-related depreciation and amortization0.33 0.33 1.32 1.32 
Diluted FFOPS, Nareit definition and as adjusted for comparability$0.62 $0.64 $2.51 $2.57 

Conference Call Information
Management will discuss first quarter 2024 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:

Conference Call Date: Friday, April 26, 2024
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.vevent.com/register/BI45e0b73633dc499fa57ffc62af57efd2

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.



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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 March 31, 2024, the Company’s Defense/IT Portfolio of 193 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.0 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, 2023.


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COPT Defense Properties
Summary Financial Data
(unaudited)
(dollars and shares in thousands, except per share data)
 For the Three Months Ended March 31,
 20242023
Revenues  
Lease revenue$165,433 $150,560 
Other property revenue1,230 1,121 
Construction contract and other service revenues26,603 15,820 
Total revenues193,266 167,501 
Operating expenses  
Property operating expenses66,746 59,420 
Depreciation and amortization associated with real estate operations38,351 36,995 
Construction contract and other service expenses26,007 15,201 
General and administrative expenses8,378 7,996 
Leasing expenses2,187 1,999 
Business development expenses and land carry costs1,182 495 
Total operating expenses142,851 122,106 
Interest expense(20,767)(16,442)
Interest and other income, net4,122 2,256 
Gain on sales of real estate— 49,378 
Income before equity in income (loss) of unconsolidated entities and income taxes33,770 80,587 
Equity in income (loss) of unconsolidated entities69 (64)
Income tax expense(168)(125)
Net income 33,671 80,398 
Net income attributable to noncontrolling interests:  
Common units in the Operating Partnership (“OP”)(608)(1,293)
Other consolidated entities(454)(326)
Net income attributable to common shareholders$32,609 $78,779 
Earnings per share (“EPS”) computation:  
Numerator for diluted EPS:  
Net income attributable to common shareholders$32,609 $78,779 
Amount allocable to share-based compensation awards(129)(248)
Redeemable noncontrolling interests— (64)
Numerator for diluted EPS$32,480 $78,467 
Denominator:  
Weighted average common shares - basic112,231 112,127 
Dilutive effect of share-based compensation awards509 410 
Dilutive effect of redeemable noncontrolling interests— 91 
Weighted average common shares - diluted112,740 112,628 
Diluted EPS$0.29 $0.70 
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COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands, except per share data)
 For the Three Months Ended March 31,
 20242023
Net income$33,671 $80,398 
Real estate-related depreciation and amortization38,351 36,995 
Gain on sales of real estate — (49,378)
Depreciation and amortization on unconsolidated real estate JVs777 801 
Funds from operations (“FFO”)72,799 68,816 
FFO allocable to other noncontrolling interests(836)(708)
Basic FFO allocable to share-based compensation awards(587)(466)
Basic FFO available to common share and common unit holders (“Basic FFO”)71,376 67,642 
Redeemable noncontrolling interests469 (30)
Diluted FFO adjustments allocable to share-based compensation awards47 39 
Diluted FFO available to common share and common unit holders (“Diluted FFO”)71,892 67,651 
Executive transition costs77 — 
Diluted FFO available to common share and common unit holders, as adjusted for comparability71,969 67,651 
Straight line rent adjustments and lease incentive amortization3,473 (3,516)
Amortization of intangibles and other assets included in net operating income (“NOI”)122 (19)
Share-based compensation, net of amounts capitalized2,645 1,733 
Amortization of deferred financing costs685 632 
Amortization of net debt discounts, net of amounts capitalized1,014 618 
Replacement capital expenditures(20,776)(28,210)
Other137 (273)
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”)$59,269 $38,616 
Diluted FFO per share$0.62 $0.59 
Diluted FFO per share, as adjusted for comparability$0.62 $0.59 
Dividends/distributions per common share/unit$0.295 $0.285 

vii


COPT Defense Properties
Summary Financial Data
(unaudited)
(Dollars and shares in thousands, except per share data)
March 31,
2024		December 31,
2023
Balance Sheet Data  
Properties, net of accumulated depreciation$3,517,878 $3,503,678 
Total assets$4,232,895 $4,246,966 
Debt per balance sheet$2,416,873 $2,416,287 
Total liabilities$2,683,883 $2,699,631 
Redeemable noncontrolling interests$22,966 $23,580 
Total equity$1,526,046 $1,523,755 
Debt to assets57.1 %56.9 %
Net debt to adjusted book40.9 %40.6 %
Defense/IT Portfolio Data (as of period end)  
Number of operating properties193 190 
Total operational square feet (in thousands)21,993 21,719 
% Occupied95.6 %96.2 %
% Leased96.8 %97.2 %
For the Three Months Ended March 31,
20242023
GAAP  
Payout ratio:
Net income100.7 %40.6 %
Debt ratios:
Net income to interest expense ratio1.6 x 4.9 x 
Debt to net income ratio17.9 x 6.6 x 
Non-GAAP
Payout ratios:
Diluted FFO46.8 %47.9 %
Diluted FFO, as adjusted for comparability46.7 %47.9 %
Diluted AFFO56.8 %83.9 %
Debt ratios:
Adjusted EBITDA fixed charge coverage ratio4.5 x 5.0 x 
Net debt to in-place adjusted EBITDA ratio6.1 x 6.2 x 
Net debt adj. for fully-leased development to in-place adj. EBITDA ratio6.0 x 5.8 x 
Reconciliation of denominators for per share measures 
Denominator for diluted EPS112,740 112,628 
Weighted average common units1,625 1,489 
Redeemable noncontrolling interests947 — 
Denominator for diluted FFO per share and as adjusted for comparability115,312 114,117 




viii


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended March 31,
 20242023
Numerators for Payout Ratios
Dividends on unrestricted common and deferred shares$33,143 $31,989 
Distributions on unrestricted common units500 430 
Dividends and distributions on restricted shares and units267 215 
Total dividends and distributions for GAAP payout ratio33,910 32,634 
Dividends and distributions on antidilutive shares and units(266)(216)
Dividends and distributions for non-GAAP payout ratios$33,644 $32,418 
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 $33,671 $80,398 
Interest expense20,767 16,442 
Income tax expense168 125 
Real estate-related depreciation and amortization38,351 36,995 
Other depreciation and amortization608 602 
Gain on sales of real estate — (49,378)
Adjustments from unconsolidated real estate JVs1,671 1,704 
EBITDAre95,236 86,888 
Credit loss expense22 67 
Business development expenses630 241 
Executive transition costs430 247 
Net gain on other investments(477)— 
Adjusted EBITDA95,841 87,443 
Pro forma NOI adjustment for property changes within period813 (318)
Change in collectability of deferred rental revenue— 899 
In-place adjusted EBITDA$96,654 $88,024 
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures
Tenant improvements and incentives$12,776 $19,986 
Building improvements4,953 2,141 
Leasing costs3,590 1,750 
Net additions to tenant improvements and incentives316 4,839 
Excluded building improvements and leasing costs(859)(506)
Replacement capital expenditures$20,776 $28,210 
ix


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended March 31,
 20242023
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA  
Interest expense$20,767 $16,442 
Less: Amortization of deferred financing costs(685)(632)
Less: Amortization of net debt discounts, net of amounts capitalized(1,014)(618)
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 derivatives804 773 
Scheduled principal amortization769 790 
Capitalized interest589 770 
Denominator for fixed charge coverage-Adjusted EBITDA$21,230 $17,525 
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$33,671 $80,398 
Construction contract and other service revenues(26,603)(15,820)
Depreciation and other amortization associated with real estate operations38,351 36,995 
Construction contract and other service expenses26,007 15,201 
General and administrative expenses8,378 7,996 
Leasing expenses2,187 1,999 
Business development expenses and land carry costs1,182 495 
Interest expense20,767 16,442 
Interest and other income, net(4,122)(2,256)
Gain on sales of real estate— (49,378)
Equity in (income) loss of unconsolidated entities(69)64 
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities1,740 1,642 
Income tax expense168 125 
NOI from real estate operations101,657 93,903 
Non-Same Property NOI from real estate operations(6,254)(1,180)
Same Property NOI from real estate operations95,403 92,723 
Straight line rent adjustments and lease incentive amortization5,367 (3,570)
Amortization of acquired above- and below-market rents(69)(166)
Lease termination fees, net(775)(1,221)
Tenant funded landlord assets and lease incentives(8,190)(1,222)
Cash NOI adjustments in unconsolidated real estate JVs(117)(153)
Same Property Cash NOI from real estate operations$91,619 $86,391 

x


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
March 31,
2024		December 31,
2023
Reconciliation of total assets to adjusted book  
Total assets$4,232,895 $4,246,966 
Accumulated depreciation1,434,621 1,400,162 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs225,443 228,484 
COPT Defense’s share of liabilities of unconsolidated real estate JVs60,904 60,583 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs10,364 9,528 
Less: Property - operating lease liabilities(33,141)(33,931)
Less: Property - finance lease liabilities(409)(415)
Less: Cash and cash equivalents(123,144)(167,820)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs(1,159)(852)
Adjusted book$5,806,374 $5,742,705 

March 31,
2024		December 31,
2023		March 31,
2023
Reconciliation of debt to net debt and net debt adjusted for fully-leased development
Debt per balance sheet$2,416,873 $2,416,287 $2,123,012 
Net discounts and deferred financing costs27,358 28,713 22,250 
COPT Defense’s share of unconsolidated JV gross debt52,819 52,613 52,226 
Gross debt2,497,050 2,497,613 2,197,488 
Less: Cash and cash equivalents(123,144)(167,820)(15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs(1,159)(852)(881)
Net debt2,372,747 2,328,941 2,181,408 
Costs incurred on fully-leased development properties(43,034)(53,914)(137,309)
Net debt adjusted for fully-leased development $2,329,713 $2,275,027 $2,044,099 
xi