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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
____________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 8, 2024
____________________________________________

COPT DEFENSE PROPERTIES
(Exact name of registrant as specified in its charter)
Maryland   1-14023 23-2947217
(State or other jurisdiction   (Commission File (IRS Employer
of incorporation)   Number) Identification No.)

6711 Columbia Gateway Drive, Suite 300, Columbia, MD
 21046
(Address of principal executive offices) (Zip Code)
        
Registrant’s telephone number, including area code:  (443) 285-5400

____________________________________________

Not applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares of beneficial interest, $0.01 par value CDP New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02.             Results of Operations and Financial Condition
 
On February 8, 2024, COPT Defense Properties (the “Company”) issued a press release relating to its financial results for the period ended December 31, 2023 and, in connection with this release, is making available certain supplemental information pertaining to its properties and operations.  The earnings release and supplemental information are included as Exhibit 99.1 to this report and are incorporated herein by reference.
 
The information included herein, including the exhibits, shall not be deemed “filed” for any purpose, including the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or subject to liabilities of that Section.  The information included herein, including the exhibits, shall also not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.

Item 9.01.             Financial Statements and Exhibits

(d)     Exhibits.

Exhibit Number   Exhibit Title
 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  COPT DEFENSE PROPERTIES
/s/ Anthony Mifsud
  Anthony Mifsud
  Executive Vice President and Chief Financial Officer
Date: February 8, 2024



EX-99.1 2 cdp12312023ex991.htm EX-99.1 Document
Exhibit 99.1

a2023_q4xcoptdefensexcovera.jpg

COPT Defense Properties
Supplemental Information + Earnings Release - Unaudited
For the Period Ended 12/31/23
supptoc3cdpa.jpg
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.

newcoptlogohorizontaljpga.jpg

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 December 31, 2023, our Defense/IT Portfolio of 190 properties, including 24 owned through unconsolidated joint ventures, encompassed 21.7 million square feet and was 97.2% leased.


MANAGEMENT Stephen E. Budorick, President + CEO INVESTOR RELATIONS Venkat Kommineni, VP
Anthony Mifsud, EVP + CFO
443.285.5587 | venkat.kommineni@copt.com
Britt A. Snider, EVP + COO
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, 2022.
1
COPT Defense Properties
Equity Research Coverage
Firm   Senior Analyst Phone   Email
Bank of America Securities   Camille Bonnel   416.369.2140   camille.bonnel@bofa.com
BTIG Tom Catherwood 212.738.6410 tcatherwood@btig.com
Citigroup Global Markets   Michael Griffin   212.816.5871   michael.a.griffin@citi.com
Evercore ISI Steve Sakwa 212.446.9462 steve.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 Securities Richard Anderson 212.938.9949 richard.anderson@wedbush.com
Wells Fargo Securities Blaine Heck 443.263.6529 blaine.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.
2
COPT Defense Properties
Selected Financial Summary Data
(in thousands, except per share data)
  Page Three Months Ended Years Ended
SUMMARY OF RESULTS  Refer. 12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Net income (loss) 7 $ 34,820  $ (221,207) $ 31,642  $ 80,398  $ 52,087  $ (74,347) $ 178,822 
NOI from real estate operations 13 $ 98,656  $ 96,494  $ 95,024  $ 93,903  $ 93,810  $ 384,077  $ 362,304 
Same Property NOI 17 $ 86,951  $ 87,176  $ 86,254  $ 84,452  $ 84,795  $ 344,833  $ 334,313 
Same Property cash NOI 18 $ 86,501  $ 85,940  $ 85,037  $ 83,194  $ 82,808  $ 340,672  $ 322,230 
Adjusted EBITDA 11 $ 93,934  $ 90,260  $ 89,044  $ 87,443  $ 87,787  $ 360,681  $ 341,709 
FFO per NAREIT 8 $ 72,360  $ 70,016  $ 70,033  $ 68,816  $ 70,282  $ 281,225  $ 274,339 
Diluted AFFO avail. to common share and unit holders 10 $ 54,280  $ 64,122  $ 46,003  $ 38,616  $ 26,122  $ 203,021  $ 178,413 
Dividend per common share N/A $ 0.285  $ 0.285  $ 0.285  $ 0.285  $ 0.275  $ 1.14  $ 1.10 
Per share - diluted:            
EPS 9 $ 0.30  $ (1.94) $ 0.27  $ 0.70  $ 0.45  $ (0.67) $ 1.53 
FFO - Nareit 9 $ 0.62  $ 0.60  $ 0.60  $ 0.59  $ 0.60  $ 2.41  $ 2.35 
FFO - as adjusted for comparability 9 $ 0.62  $ 0.60  $ 0.60  $ 0.59  $ 0.60  $ 2.42  $ 2.36 
Numerators for diluted per share amounts:
Diluted EPS 7 $ 33,552  $ (217,179) $ 30,138  $ 78,467  $ 50,290  $ (74,668) $ 172,397 
Diluted FFO available to common share and unit holders 8 $ 70,913  $ 68,512  $ 68,323  $ 67,651  $ 68,696  $ 275,399  $ 268,186 
Diluted FFO available to common share and unit holders, as adjusted for comparability 8 $ 71,100  $ 68,593  $ 68,569  $ 67,651  $ 68,794  $ 275,913  $ 268,965 

3
COPT Defense Properties
Selected Financial Summary Data (continued)
(in thousands, except ratios)
  Page Three Months Ended Years Ended
PAYOUT RATIOS AND CAPITALIZATION Refer. 12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
GAAP
Payout ratio:
Net income N/A 93.7% N/A 103.1% 40.6% 60.3% N/A 70.2%
Capitalization and debt ratios:
Total assets 6 $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992  $ 4,257,275 
Total equity 6 $ 1,523,755  $ 1,525,873  $ 1,776,695  $ 1,768,814  $ 1,721,455 
Debt per balance sheet 6 $ 2,416,287  $ 2,415,783  $ 2,176,174  $ 2,123,012  $ 2,231,794 
Debt to assets 32 56.9% 57.0% 51.2% 50.8% 52.4% N/A N/A
Net income to interest expense ratio 32 1.7x N/A 1.9x 4.9x 3.1x N/A 2.9x
Debt to net income ratio 32 17.3x N/A 17.2x 6.6x 10.7x N/A N/A
Non-GAAP
Payout ratios:            
Diluted FFO N/A 45.7% 47.3% 47.5% 47.9% 45.5% 47.1% 46.6%
Diluted FFO - as adjusted for comparability N/A 45.6% 47.3% 47.3% 47.9% 45.4% 47.0% 46.5%
Diluted AFFO N/A 59.7% 50.6% 70.5% 83.9% 119.7% 63.9% 70.1%
Capitalization and debt ratios:          
Total Market Capitalization 29 $ 5,377,815  $ 5,172,058  $ 4,914,516  $ 4,856,761  $ 5,214,423 
Total Equity Market Capitalization 29 $ 2,932,815  $ 2,726,295  $ 2,717,000  $ 2,711,499  $ 2,959,469 
Net debt 38 $ 2,328,941  $ 2,293,005  $ 2,234,633  $ 2,181,408  $ 2,294,261 
Net debt to adjusted book 32 40.6% 40.5% 38.4% 38.1% 39.8% N/A N/A
Adjusted EBITDA fixed charge coverage ratio 32 4.4x 4.6x 4.9x 5.0x 4.7x 4.7x 5.1x
Net debt to in-place adj. EBITDA ratio 32 6.1x 6.2x 6.3x 6.2x 6.3x N/A N/A
Pro forma net debt to in-place adjusted EBITDA ratio (1) N/A N/A N/A N/A N/A 6.0x N/A N/A
Net debt adjusted for fully-leased development to in-place adj. EBITDA ratio 32 6.0x 5.9x 5.7x 5.8x 6.1x N/A N/A
Pro forma net debt adj. for fully-leased development to in-place adj. EBITDA ratio (1) N/A N/A N/A N/A N/A 5.7x N/A N/A
(1)Includes, for the 12/31/22 period, adjustments associated with our sale on 1/10/23 of a 90% interest in three data center shell properties.
4
COPT Defense Properties
Selected Portfolio Data (1)
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22
# of Properties
Total Portfolio 198 196 194 194 194
Consolidated Portfolio 174 172 170 170 173
Defense/IT Portfolio 190 188 186 186 186
Same Property 180 180 180 180 180
% Occupied
Total Portfolio 94.2  % 94.1  % 93.4  % 92.8  % 92.7  %
Consolidated Portfolio 92.9  % 92.7  % 91.9  % 91.2  % 91.4  %
Defense/IT Portfolio 96.2  % 95.9  % 95.3  % 94.4  % 94.1  %
Same Property 93.4  % 93.4  % 92.8  % 92.1  % 92.0  %
% Leased
Total Portfolio 95.3  % 95.1  % 94.9  % 95.0  % 95.2  %
Consolidated Portfolio 94.3  % 94.0  % 93.7  % 93.9  % 94.3  %
Defense/IT Portfolio 97.2  % 97.0  % 96.8  % 96.7  % 96.7  %
Same Property 94.7  % 94.5  % 94.4  % 94.5  % 94.7  %
Square Feet (in thousands)
Total Portfolio 23,859 23,479 23,035 23,020 23,006
Consolidated Portfolio 19,563 19,184 18,740 18,725 19,458
Defense/IT Portfolio 21,719 21,339 20,895 20,878 20,869
Same Property 20,609 20,609 20,609 20,609 20,609
(1)Except for the Consolidated Portfolio, includes properties owned through unconsolidated real estate joint ventures (see page 34).

5
COPT Defense Properties
Consolidated Balance Sheets
(in thousands)
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22
Assets          
Properties, net:          
Operating properties, net $ 3,246,806  $ 3,148,434  $ 3,272,670  $ 3,272,873  $ 3,258,899 
Development and redevelopment in progress, including land (1) 82,972  141,854  206,130  151,910  109,332 
Land held (1) 173,900  177,909  193,435  189,292  188,167 
Total properties, net 3,503,678  3,468,197  3,672,235  3,614,075  3,556,398 
Property - operating right-of-use assets 41,296  40,487  41,652  42,808  37,020 
Assets held for sale, net —  —  —  —  161,286 
Cash and cash equivalents 167,820  204,238  14,273  15,199  12,337 
Investment in unconsolidated real estate joint ventures 41,052  41,495  41,928  42,279  21,460 
Accounts receivable, net 48,946  40,211  47,363  46,149  43,334 
Deferred rent receivable 149,237  142,041  136,382  130,153  125,147 
Lease incentives, net 61,331  60,506  59,541  49,679  49,757 
Deferred leasing costs, net 70,057  68,033  69,218  68,930  69,339 
Investing receivables, net 81,512  87,535  86,708  85,499  84,621 
Prepaid expenses and other assets, net 82,037  86,514  77,046  83,221  96,576 
Total assets $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992  $ 4,257,275 
Liabilities and equity          
Liabilities:          
Debt $ 2,416,287  $ 2,415,783  $ 2,176,174  $ 2,123,012  $ 2,231,794 
Accounts payable and accrued expenses 133,315  135,605  135,784  128,509  157,998 
Rents received in advance and security deposits 35,409  32,063  32,021  34,653  30,016 
Dividends and distributions payable 32,644  32,645  32,636  32,630  31,400 
Deferred revenue associated with operating leases 29,049  24,590  9,199  9,022  11,004 
Property - operating lease liabilities 33,931  32,940  33,923  34,896  28,759 
Other liabilities 18,996  17,936  27,699  21,008  18,556 
Total liabilities 2,699,631  2,691,562  2,447,436  2,383,730  2,509,527 
Redeemable noncontrolling interests 23,580  21,822  22,215  25,448  26,293 
Equity:      
COPT Defense’s shareholders’ equity:      
Common shares 1,126  1,125  1,125  1,125  1,124 
Additional paid-in capital 2,489,989  2,489,717  2,486,996  2,484,501  2,486,116 
Cumulative distributions in excess of net income (1,009,318) (1,010,885) (762,617) (760,820) (807,508)
Accumulated other comprehensive income 2,115  6,094  5,224  1,353  2,071 
Total COPT Defense’s shareholders’ equity 1,483,912  1,486,051  1,730,728  1,726,159  1,681,803 
Noncontrolling interests in subsidiaries:          
Common units in the Operating Partnership 25,502  25,337  29,563  29,268  25,808 
Other consolidated entities 14,341  14,485  16,404  13,387  13,844 
Total noncontrolling interests in subsidiaries 39,843  39,822  45,967  42,655  39,652 
Total equity 1,523,755  1,525,873  1,776,695  1,768,814  1,721,455 
Total liabilities, redeemable noncontrolling interests and equity $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992  $ 4,257,275 
(1)Refer to pages 26 and 28 for detail.


6
COPT Defense Properties
Consolidated Statements of Operations
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Revenues          
Lease revenue $ 160,337  $ 155,268  $ 153,682  $ 150,560  $ 150,022  $ 619,847  $ 580,169 
Other property revenue 1,225  1,339  1,271  1,121  1,163  4,956  4,229 
Construction contract and other service revenues 18,167  11,949  14,243  15,820  24,062  60,179  154,632 
Total revenues 179,729  168,556  169,196  167,501  175,247  684,982  739,030 
Operating expenses          
Property operating expenses 64,577  61,788  61,600  59,420  58,470  247,385  227,430 
Depreciation and amortization associated with real estate operations 36,735  37,620  37,600  36,995  36,907  148,950  141,230 
Construction contract and other service expenses 17,167  11,493  13,555  15,201  23,454  57,416  149,963 
Impairment losses —  252,797  —  —  —  252,797  — 
General and administrative expenses 8,240  7,582  7,287  7,996  7,766  31,105  27,461 
Leasing expenses 2,308  2,280  2,345  1,999  2,235  8,932  8,337 
Business development expenses and land carry costs 797  714  726  495  1,157  2,732  3,193 
Total operating expenses 129,824  374,274  123,113  122,106  129,989  749,317  557,614 
Interest expense (20,383) (17,798) (16,519) (16,442) (16,819) (71,142) (61,174)
Interest and other income, net 5,659  2,529  2,143  2,256  4,671  12,587  9,070 
Gain on sales of real estate —  —  14  49,378  19,238  49,392  19,250 
Loss on early extinguishment of debt —  —  —  —  (267) —  (609)
Income (loss) from continuing operations before equity in (loss) income of unconsolidated entities and income taxes 35,181  (220,987) 31,721  80,587  52,081  (73,498) 147,953 
Equity in (loss) income of unconsolidated entities (240) (68) 111  (64) 229  (261) 1,743 
Income tax expense (121) (152) (190) (125) (223) (588) (447)
Income (loss) from continuing operations 34,820  (221,207) 31,642  80,398  52,087  (74,347) 149,249 
Discontinued operations —  —  —  —  —  —  29,573 
Net income (loss) 34,820  (221,207) 31,642  80,398  52,087  (74,347) 178,822 
Net (income) loss attributable to noncontrolling interests:          
Common units in the Operating Partnership (576) 3,691  (516) (1,293) (775) 1,306  (2,603)
Other consolidated entities (592) 1,329  (839) (326) (833) (428) (3,190)
Net income (loss) attributable to common shareholders $ 33,652  $ (216,187) $ 30,287  $ 78,779  $ 50,479  $ (73,469) $ 173,029 
Amount allocable to share-based compensation awards (100) (992) (98) (248) (129) (1,199) (463)
Redeemable noncontrolling interests —  —  (51) (64) (60) —  (169)
Numerator for diluted EPS $ 33,552  $ (217,179) $ 30,138  $ 78,467  $ 50,290  $ (74,668) $ 172,397 
7
COPT Defense Properties
Funds from Operations
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Net income (loss) $ 34,820  $ (221,207) $ 31,642  $ 80,398  $ 52,087  $ (74,347) $ 178,822 
Real estate-related depreciation and amortization 36,735  37,620  37,600  36,995  36,907  148,950  141,230 
Impairment losses on real estate —  252,797  —  —  —  252,797  — 
Gain on sales of real estate (1) —  —  (14) (49,378) (19,238) (49,392) (47,814)
Depreciation and amortization on unconsolidated real estate JVs (2) 805  806  805  801  526  3,217  2,101 
FFO - per Nareit (3) 72,360  70,016  70,033  68,816  70,282  281,225  274,339 
FFO allocable to other noncontrolling interests (4) (972) (1,059) (1,239) (708) (1,227) (3,978) (4,795)
Basic FFO allocable to share-based compensation awards (513) (481) (480) (466) (360) (1,940) (1,433)
Basic FFO available to common share and common unit holders (3) 70,875  68,476  68,314  67,642  68,695  275,307  268,111 
Redeemable noncontrolling interests —  —  (28) (30) (27) (58) (34)
Diluted FFO adjustments allocable to share-based compensation awards 38  36  37  39  28  150  109 
Diluted FFO available to common share and common unit holders - per Nareit (3) 70,913  68,512  68,323  67,651  68,696  275,399  268,186 
Loss on early extinguishment of debt —  —  —  —  267  —  609 
Gain on early extinguishment of debt on unconsolidated real estate JVs (2) —  —  —  —  (168) —  (168)
Executive transition costs 188  82  248  —  —  518  343 
Diluted FFO comparability adjustments allocable to share-based compensation awards (1) (1) (2) —  (1) (4) (5)
Diluted FFO available to common share and common unit holders, as adjusted for comparability (3) $ 71,100  $ 68,593  $ 68,569  $ 67,651  $ 68,794  $ 275,913  $ 268,965 
(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(2)See page 34 for additional disclosure regarding our unconsolidated real estate JVs.
(3)Refer to the section entitled “Definitions” for a definition of this measure.
(4)Pertains to noncontrolling interests in consolidated real estate JVs reported on page 33.

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

  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
EPS Denominator:          
Weighted average common shares - basic 112,199  112,196  112,188  112,127  112,096  112,178  112,073 
Dilutive effect of share-based compensation awards 432  —  426  410  435  —  431 
Dilutive effect of redeemable noncontrolling interests —  —  62  91  102  —  116 
Weighted average common shares - diluted 112,631  112,196  112,676  112,628  112,633  112,178  112,620 
Diluted EPS $ 0.30  $ (1.94) $ 0.27  $ 0.70  $ 0.45  $ (0.67) $ 1.53 
Weighted Average Shares for period ended:              
Common shares 112,199  112,196  112,188  112,127  112,096  112,178  112,073 
Dilutive effect of share-based compensation awards 432  429  426  410  435  424  431 
Common units 1,514  1,520  1,514  1,489  1,476  1,509  1,454 
Redeemable noncontrolling interests —  —  62  91  102  38  116 
Denominator for diluted FFO per share and as adjusted for comparability 114,145  114,145  114,190  114,117  114,109  114,149  114,074 
Weighted average common units (1,514) (1,520) (1,514) (1,489) (1,476) (1,509) (1,454)
Redeemable noncontrolling interests —  —  —  —  —  (38) — 
Dilutive effect of additional share-based compensation awards —  (429) —  —  —  (424) — 
Denominator for diluted EPS 112,631  112,196  112,676  112,628  112,633  112,178  112,620 
Diluted FFO per share - Nareit (1) $ 0.62  $ 0.60  $ 0.60  $ 0.59  $ 0.60  $ 2.41  $ 2.35 
Diluted FFO per share - as adjusted for comparability (1) $ 0.62  $ 0.60  $ 0.60  $ 0.59  $ 0.60  $ 2.42  $ 2.36 
(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 Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Diluted FFO available to common share and common unit holders, as adjusted for comparability (1) $ 71,100  $ 68,593  $ 68,569  $ 67,651  $ 68,794  $ 275,913  $ 268,965 
Straight line rent adjustments and lease incentive amortization 313  12,882  (3,161) (3,516) (3,043) 6,518  (8,825)
Amortization of intangibles and other assets included in NOI 26  26  17  (19) 15  50  (258)
Share-based compensation, net of amounts capitalized 2,318  2,280  2,213  1,733  2,247  8,544  8,700 
Amortization of deferred financing costs 681  639  628  632  619  2,580  2,297 
Amortization of net debt discounts, net of amounts capitalized 1,004  750  622  618  615  2,994  2,440 
Replacement capital expenditures (1) (21,498) (21,122) (22,664) (28,210) (43,283) (93,494) (95,886)
Other 336  74  (221) (273) 158  (84) 980 
Diluted AFFO available to common share and common unit holders (“diluted AFFO”) (1) $ 54,280  $ 64,122  $ 46,003  $ 38,616  $ 26,122  $ 203,021  $ 178,413 
Replacement capital expenditures (1)          
Tenant improvements and incentives $ 7,850  $ 14,457  $ 32,619  $ 19,986  $ 33,439  $ 74,912  $ 62,952 
Building improvements 14,762  6,307  2,766  2,141  8,468  25,976  29,528 
Leasing costs 2,440  1,902  3,542  1,750  4,389  9,634  11,480 
Net (exclusions from) additions to tenant improvements and incentives (189) (813) (16,007) 4,839  (75) (12,170) 2,150 
Excluded building improvements and leasing costs (3,365) (731) (256) (506) (2,938) (4,858) (10,224)
Replacement capital expenditures $ 21,498  $ 21,122  $ 22,664  $ 28,210  $ 43,283  $ 93,494  $ 95,886 
(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 Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Net income (loss) $ 34,820  $ (221,207) $ 31,642  $ 80,398  $ 52,087  $ (74,347) $ 178,822 
Interest expense 20,383  17,798  16,519  16,442  16,819  71,142  61,174 
Income tax expense 121  152  190  125  223  588  447 
Real estate-related depreciation and amortization 36,735  37,620  37,600  36,995  36,907  148,950  141,230 
Other depreciation and amortization 619  615  609  602  602  2,445  2,363 
Impairment losses on real estate —  252,797  —  —  —  252,797  — 
Gain on sales of real estate (1) —  —  (14) (49,378) (19,238) (49,392) (47,814)
Adjustments from unconsolidated real estate JVs 1,911  1,743  1,559  1,704  1,033  6,917  3,313 
EBITDAre (2) 94,589  89,518  88,105  86,888  88,433  359,100  339,535 
Credit loss (recoveries) expense (1,288) 372  238  67  (1,331) (611) 271 
Business development expenses 445  313  394  241  794  1,393  1,891 
Executive transition costs 188  82  307  247  387  824  730 
Loss on early extinguishment of debt —  —  —  —  267  —  609 
Gain on early extinguishment of debt on unconsolidated real estate JVs —  —  —  —  (168) —  (168)
Net gain on other investments —  (25) —  —  (595) (25) (1,159)
Adjusted EBITDA (2) 93,934  90,260  89,044  87,443  87,787  $ 360,681  $ 341,709 
Pro forma NOI adjustment for property changes within period 1,341  1,647  56  (318) 2,704 
Change in collectability of deferred rental revenue (198) —  28  899  — 
In-place adjusted EBITDA (2) 95,077  91,907  89,128  88,024  90,491 
Pro forma NOI adjustment from subsequent event transactions (3) N/A N/A N/A N/A (2,903)
Pro forma in-place adjusted EBITDA (2) $ 95,077  $ 91,907  $ 89,128  $ 88,024  $ 87,588 
(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.
(3)Includes, for the 12/31/22 period, NOI adjustment from our sale on 1/10/23 of a 90% interest in three data center shell properties.
11
COPT Defense Properties
Properties by Segment - 12/31/23
(square feet in thousands)
# of
Properties		 Operational
Square Feet		 % Occupied % Leased
Defense/IT Portfolio:
Fort Meade/Baltimore Washington (“BW”) Corridor:        
National Business Park 34  4,293  99.3% 99.4%
Howard County 35  2,862  93.9% 94.9%
Other 23  1,725  93.1% 94.6%
Total Fort Meade/BW Corridor 92  8,880  96.4% 97.0%
Northern Virginia (“NoVA”) Defense/IT 16  2,501  88.9% 92.4%
Lackland AFB (San Antonio, Texas) 8  1,062  100.0% 100.0%
Navy Support 22  1,273  87.4% 89.6%
Redstone Arsenal (Huntsville, Alabama) 22  2,300  97.5% 98.7%
Data Center Shells:
Consolidated Properties 6  1,408  100.0% 100.0%
Unconsolidated JV Properties (1) 24  4,295  100.0% 100.0%
Total Defense/IT Portfolio 190  21,719  96.2% 97.2%
Other 8  2,140  73.2% 76.8%
Total Portfolio 198  23,859  94.2% 95.3%
Consolidated Portfolio 174  19,563  92.9% 94.3%
(1)See page 34 for additional disclosure regarding our unconsolidated real estate JVs.

chart-c93c464d891c414a9e4a.jpgchart-2741020e0c2f404a90ca.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 Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Consolidated real estate revenues          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 74,758  $ 73,350  $ 72,176  $ 69,777  $ 69,778  $ 290,061  $ 273,790 
NoVA Defense/IT 20,410  20,333  19,841  19,829  18,695  80,413  73,985 
Lackland Air Force Base 17,861  16,193  17,595  15,605  17,118  67,254  62,911 
Navy Support 8,405  8,190  8,118  7,925  8,247  32,638  32,754 
Redstone Arsenal 14,971  13,768  12,978  13,414  10,114  55,131  38,593 
Data Center Shells-Consolidated 7,654  6,811  6,287  6,692  10,008  27,444  35,722 
Total Defense/IT Portfolio 144,059  138,645  136,995  133,242  133,960  552,941  517,755 
Wholesale Data Center —  —  —  —  —  —  1,980 
Other 17,503  17,962  17,958  18,439  17,225  71,862  66,643 
Consolidated real estate revenues (1) $ 161,562  $ 156,607  $ 154,953  $ 151,681  $ 151,185  $ 624,803  $ 586,378 
NOI from real estate operations (2)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 48,894  $ 48,134  $ 47,988  $ 45,257  $ 45,784  $ 190,273  $ 176,063 
NoVA Defense/IT 11,972  12,433  12,158  12,257  11,862  48,820  47,350 
Lackland Air Force Base 7,708  7,626  7,644  7,660  7,690  30,638  30,610 
Navy Support 4,783  4,257  4,602  4,382  4,712  18,024  18,753 
Redstone Arsenal 10,157  8,820  8,228  8,778  6,204  35,983  22,993 
Data Center Shells:
Consolidated properties 6,966  6,133  5,544  6,098  8,951  24,741  31,350 
COPT Defense’s share of unconsolidated real estate JVs 1,671  1,675  1,671  1,642  1,095  6,659  4,327 
Total Defense/IT Portfolio 92,151  89,078  87,835  86,074  86,298  355,138  331,446 
Wholesale Data Center —  —  —  —  (4) —  1,001 
Other 6,505  7,416  7,189  7,829  7,516  28,939  29,857 
NOI from real estate operations (1) $ 98,656  $ 96,494  $ 95,024  $ 93,903  $ 93,810  $ 384,077  $ 362,304 
(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 Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Cash NOI from real estate operations (1)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 46,173  $ 45,513  $ 45,727  $ 43,662  $ 45,106  $ 181,075  $ 174,713 
NoVA Defense/IT 12,881  12,765  12,642  11,423  10,274  49,711  40,881 
Lackland Air Force Base 8,114  7,913  7,919  7,915  7,889  31,861  31,023 
Navy Support 5,008  4,621  4,911  5,023  5,257  19,563  19,976 
Redstone Arsenal 4,869  4,861  3,707  4,988  5,263  18,425  19,276 
Data Center Shells:
Consolidated properties 5,868  4,904  4,918  5,379  6,960  21,069  25,976 
COPT Defense’s share of unconsolidated real estate JVs 1,400  1,396  1,385  1,351  1,012  5,532  3,967 
Total Defense/IT Portfolio 84,313  81,973  81,209  79,741  81,761  327,236  315,812 
Wholesale Data Center —  —  —  —  (4) —  1,010 
Other 6,536  7,400  7,350  7,583  6,876  28,869  26,990 
Cash NOI from real estate operations (2) $ 90,849  $ 89,373  $ 88,559  $ 87,324  $ 88,633  $ 356,105  $ 343,812 
(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-54f5c064c343449ea8ea.jpgchart-a6ab7bd5163b448fb08a.jpg

14
COPT Defense Properties
NOI from Real Estate Operations + Occupancy by Property Grouping - 12/31/23
(dollars and square feet in thousands)
  As of Period End NOI 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 Grouping Three Months Ended Year Ended
Defense/IT Portfolio:
Same Property: (2)
Consolidated properties 153  15,287  94.8% 96.1% $ 514,672  79.6  % $ 79,563  $ 312,400 
Unconsolidated real estate JV 19  3,182  100.0% 100.0% 4,916  0.8  % 1,074  4,301 
Total Same Property in Defense/IT Portfolio 172  18,469  95.7% 96.8% 519,588  80.3  % 80,637  316,701 
Properties Placed in Service (4) 13  2,137  98.7% 98.7% 58,969  9.1  % 10,916  35,735 
Other unconsolidated JV properties (5) 5  1,113  100.0% 100.0% 1,826  0.3  % 598  2,702 
Total Defense/IT Portfolio 190  21,719  96.2% 97.2% 580,383  89.8  % 92,151  355,138 
Other 8  2,140  73.2% 76.8% 66,277  10.2  % 6,505  28,939 
Total Portfolio 198  23,859  94.2% 95.3% $ 646,660  100.0  % $ 98,656  $ 384,077 
Consolidated Portfolio 174  19,563  92.9% 94.3% $ 639,920  99.0  % $ 96,985  $ 377,418 
(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 1/1/22.
(5)Includes data center shell properties in which we sold ownership interests and retained 10% interests through unconsolidated real estate JVs in 2023 and 2022. See page 34 for additional disclosure regarding our unconsolidated real estate JVs.


15
COPT Defense Properties
Same Property (1) Average Occupancy Rates by Segment 
(square feet in thousands)
  # of Properties Operational Square Feet Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Defense/IT Portfolio:
Fort Meade/BW Corridor 90  8,510  96.1  % 95.7  % 94.7  % 92.9  % 92.5  % 94.8  % 91.1  %
NoVA Defense/IT 16  2,501  88.5  % 89.8  % 89.9  % 90.6  % 89.9  % 89.7  % 89.1  %
Lackland Air Force Base 8  1,062  100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Navy Support 21  1,244  87.8  % 87.2  % 87.6  % 88.9  % 90.4  % 87.9  % 91.5  %
Redstone Arsenal 16  1,512  96.9  % 91.6  % 87.8  % 87.0  % 87.6  % 90.8  % 88.5  %
Data Center Shells:
Consolidated properties 2  458  100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Unconsolidated JV properties 19  3,182  100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Total Defense/IT Portfolio 172  18,469  95.6  % 95.1  % 94.4  % 93.6  % 93.5  % 94.7  % 92.9  %
Other 8  2,140  73.9  % 75.2  % 75.0  % 78.6  % 80.0  % 75.7  % 80.2  %
Total Same Property 180  20,609  93.3  % 93.0  % 92.3  % 92.1  % 92.1  % 92.7  % 91.6  %

Same Property (1) Period End Occupancy Rates by Segment 
(square feet in thousands)
# of Properties Operational Square Feet
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22
Defense/IT Portfolio:
Fort Meade/BW Corridor 90  8,510  96.2  % 96.0  % 95.3  % 93.3  % 92.5  %
NoVA Defense/IT 16  2,501  88.9  % 89.5  % 89.9  % 90.7  % 90.0  %
Lackland Air Force Base 8  1,062  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Navy Support 21  1,244  88.0  % 87.4  % 87.4  % 88.4  % 89.7  %
Redstone Arsenal 16  1,512  97.4  % 94.7  % 90.1  % 86.7  % 88.0  %
Data Center Shells:
Consolidated properties 2  458  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Unconsolidated JV properties 19  3,182  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Total Defense/IT Portfolio 172  18,469  95.7  % 95.5  % 94.8  % 93.8  % 93.5  %
Other 8  2,140  73.2  % 75.4  % 74.9  % 77.6  % 78.8  %
Total Same Property 180  20,609  93.4  % 93.4  % 92.8  % 92.1  % 92.0  %
(1)Includes properties stably owned and 100% operational since at least 1/1/22.

16
COPT Defense Properties
Same Property Real Estate Revenues + NOI by Segment
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Same Property real estate revenues          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 72,326  $ 71,668  $ 70,510  $ 68,112  $ 68,673  $ 282,616  $ 272,656 
NoVA Defense/IT 20,411  20,333  19,840  19,829  18,695  80,413  73,985 
Lackland Air Force Base 17,860  16,193  17,596  15,605  17,118  67,254  62,911 
Navy Support 8,251  8,035  7,964  7,771  8,092  32,021  32,276 
Redstone Arsenal 9,972  9,629  8,972  9,499  9,204  38,072  36,424 
Data Center Shells-Consolidated 2,479  2,479  2,538  2,505  2,395  10,001  9,560 
Total Defense/IT Portfolio 131,299  128,337  127,420  123,321  124,177  510,377  487,812 
Other 15,500  15,953  15,964  16,790  16,059  64,207  62,069 
Same Property real estate revenues $ 146,799  $ 144,290  $ 143,384  $ 140,111  $ 140,236  $ 574,584  $ 549,881 
Same Property NOI from real estate operations (“NOI”)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 46,816  $ 46,721  $ 46,489  $ 43,887  $ 44,858  $ 183,913  $ 175,138 
NoVA Defense/IT 11,972  12,433  12,158  12,257  11,862  48,820  47,350 
Lackland Air Force Base 7,708  7,625  7,645  7,660  7,690  30,638  30,610 
Navy Support 4,702  4,177  4,510  4,293  4,610  17,682  18,421 
Redstone Arsenal 6,200  5,746  5,197  5,465  5,307  22,608  21,364 
Data Center Shells:
Consolidated properties 2,165  2,166  2,170  2,238  2,088  8,739  8,186 
COPT Defense’s share of unconsolidated real estate JVs 1,074  1,078  1,073  1,076  1,076  4,301  4,308 
Total Defense/IT Portfolio 80,637  79,946  79,242  76,876  77,491  316,701  305,377 
Other 6,314  7,230  7,012  7,576  7,304  28,132  28,936 
Same Property NOI (1) $ 86,951  $ 87,176  $ 86,254  $ 84,452  $ 84,795  $ 344,833  $ 334,313 
(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 Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Same Property cash NOI from real estate operations (“cash NOI”)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 46,526  $ 45,783  $ 45,894  $ 43,949  $ 45,285  $ 182,152  $ 174,892 
NoVA Defense/IT 12,882  12,764  12,642  11,423  10,274  49,711  40,881 
Lackland Air Force Base 8,114  7,913  7,919  7,915  7,889  31,861  31,023 
Navy Support 4,932  4,545  4,825  4,940  5,163  19,242  19,666 
Redstone Arsenal 4,779  4,894  3,706  4,704  4,746  18,083  18,767 
Data Center Shells:
Consolidated properties 1,988  1,894  1,954  2,020  1,866  7,856  7,270 
COPT Defense’s share of unconsolidated real estate JVs 1,016  1,013  1,005  1,000  994  4,034  3,950 
Total Defense/IT Portfolio 80,237  78,806  77,945  75,951  76,217  312,939  296,449 
Other 6,264  7,134  7,092  7,243  6,591  27,733  25,781 
Same Property cash NOI (1) $ 86,501  $ 85,940  $ 85,037  $ 83,194  $ 82,808  $ 340,672  $ 322,230 
Percentage change in total Same Property cash NOI (1)(2) 4.5% 5.7%
Percentage change in Defense/IT Portfolio Same Property cash NOI (2) 5.3% 5.6%

(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-0f12103f144d4eb0929a.jpgchart-caf92cb1bfab4ddb965a.jpg
18
COPT Defense Properties
Leasing (1)(2)
Three Months Ended 12/31/23
(square feet in thousands)
Defense/IT Portfolio
  Ft Meade/BW Corridor NoVA Defense/IT Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Portfolio Other  Total
Renewed Space        
Leased Square Feet 94  —  133  —  24  251  50  301 
Expiring Square Feet 114  28  159  —  24  324  113  437 
Vacating Square Feet 20  28  26  —  —  73  63  136 
Retention Rate (% based upon square feet) 82.8  % —  % 83.9  % —  % 100.0  % 77.6  % 44.2  % 68.9  %
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 6.71  $ —  $ 3.41  $ —  $ 0.44  $ 4.37  $ 4.94  $ 4.47 
Weighted Average Lease Term in Years 4.8  —  6.3  —  5.0  5.6  9.8  6.3 
Straight-line Rent Per Square Foot
Renewal Straight-line Rent $ 42.16  $ —  $ 19.20  $ —  $ 27.10  $ 28.56  $ 32.73  $ 29.25 
Expiring Straight-line Rent $ 37.26  $ —  $ 14.92  $ —  $ 10.96  $ 22.93  $ 31.04  $ 24.28 
Change in Straight-line Rent 13.2  % —  % 28.7  % —  % 147.3  % 24.5  % 5.5  % 20.5  %
Cash Rent Per Square Foot
Renewal Cash Rent $ 41.15  $ —  $ 18.12  $ —  $ 25.81  $ 27.49  $ 29.00  $ 27.74 
Expiring Cash Rent $ 41.57  $ —  $ 16.89  $ —  $ 11.81  $ 25.68  $ 33.06  $ 26.90 
Change in Cash Rent (1.0  %) —  % 7.2  % —  % 118.5  % 7.0  % (12.3  %) 3.1  %
Average Escalations Per Year 2.5  % —  % 2.5  % —  % 3.0  % 2.5  % 2.5  % 2.5  %
New Leases
Development and Redevelopment Space
Leased Square Feet —  —  —  27  225  252  —  252 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ —  $ —  $ —  $ 8.32  $ —  $ 0.88  $ —  $ 0.88 
Weighted Average Lease Term in Years —  —  —  10.8  15.0  14.6  —  14.6 
Straight-line Rent Per Square Foot $ —  $ —  $ —  $ 34.85  $ 42.01  $ 41.26  $ —  $ 41.26 
Cash Rent Per Square Foot $ —  $ —  $ —  $ 33.00  $ 34.99  $ 34.78  $ —  $ 34.78 
Vacant Space
Leased Square Feet 18  10  3  18  —  50  65  115 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 7.72  $ 2.03  $ 11.97  $ 6.11  $ —  $ 6.15  $ 15.11  $ 11.25 
Weighted Average Lease Term in Years 8.3  1.0  3.5  10.3  —  7.3  10.8  9.3 
Straight-line Rent Per Square Foot $ 26.58  $ 33.78  $ 28.03  $ 30.33  $ —  $ 29.56  $ 55.83  $ 44.52 
Cash Rent Per Square Foot $ 26.20  $ 33.78  $ 27.78  $ 28.18  $ —  $ 28.61  $ 57.44  $ 45.02 
Total Square Feet Leased 112  10  136  45  249  552  115  668 
Average Escalations Per Year 2.6  % —  % 2.5  % 2.6  % 2.8  % 2.7  % 2.4  % 2.6  %
Average Escalations Excl. Data Center Shells 2.5  %
(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
Leasing (1)(2)
Year Ended 12/31/23
(square feet in thousands)
Defense/IT Portfolio
  Ft Meade/BW Corridor NoVA Defense/IT Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Portfolio Other Total
Renewed Space        
Leased Square Feet 1,103  240  246  3  24  1,616  52  1,668 
Expiring Square Feet 1,203  351  306  3  24  1,886  207  2,093 
Vacating Square Feet 100  111  60  —  —  271  154  425 
Retention Rate (% based upon square feet) 91.7  % 68.3  % 80.5  % 100.0  % 100.0  % 85.7  % 25.3  % 79.7  %
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 2.99  $ 4.27  $ 2.75  $ 1.04  $ 0.44  $ 3.10  $ 4.95  $ 3.16 
Weighted Average Lease Term in Years 4.5  4.8  4.7  3.2  5.0  4.6  9.8  4.8 
Straight-line Rent Per Square Foot
Renewal Straight-line Rent $ 37.55  $ 36.69  $ 21.06  $ 26.12  $ 27.10  $ 34.74  $ 33.03  $ 34.69 
Expiring Straight-line Rent $ 34.80  $ 34.01  $ 17.99  $ 25.50  $ 10.96  $ 31.76  $ 31.03  $ 31.73 
Change in Straight-line Rent 7.9  % 7.9  % 17.0  % 2.4  % 147.3  % 9.4  % 6.5  % 9.3  %
Cash Rent Per Square Foot
Renewal Cash Rent $ 37.53  $ 38.27  $ 20.58  $ 26.78  $ 25.81  $ 34.87  $ 29.33  $ 34.69 
Expiring Cash Rent $ 37.09  $ 38.20  $ 19.72  $ 26.13  $ 11.81  $ 34.22  $ 33.21  $ 34.19 
Change in Cash Rent 1.2  % 0.2  % 4.4  % 2.5  % 118.5  % 1.9  % (11.7  %) 1.5  %
Average Escalations Per Year 2.7  % 2.3  % 2.5  % 2.5  % 3.0  % 2.6  % 2.5  % 2.6  %
New Leases
Development and Redevelopment Space
Leased Square Feet —  —  —  104  643  747  —  747 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ —  $ —  $ —  $ 7.91  $ —  $ 1.10  $ —  $ 1.10 
Weighted Average Lease Term in Years —  —  —  10.5  15.0  14.4  —  14.4 
Straight-line Rent Per Square Foot $ —  $ —  $ —  $ 33.76  $ 35.30  $ 35.09  $ —  $ 35.09 
Cash Rent Per Square Foot $ —  $ —  $ —  $ 31.11  $ 30.05  $ 30.20  $ —  $ 30.20 
Vacant Space
Leased Square Feet 150  137  44  29  —  361  91  452 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 6.94  $ 9.92  $ 7.75  $ 6.24  $ —  $ 8.11  $ 14.56  $ 9.41 
Weighted Average Lease Term in Years 6.8  9.3  5.7  9.9  —  7.9  9.5  8.2 
Straight-line Rent Per Square Foot $ 29.94  $ 33.83  $ 27.92  $ 29.65  $ —  $ 31.14  $ 50.78  $ 35.10 
Cash Rent Per Square Foot $ 29.29  $ 33.33  $ 28.40  $ 27.76  $ —  $ 30.59  $ 51.83  $ 34.87 
Total Square Feet Leased 1,253  377  290  136  667  2,724  143  2,867 
Average Escalations Per Year 2.6  % 2.4  % 2.5  % 2.7  % 2.4  % 2.5  % 2.4  % 2.5  %
Average Escalations Excl. Data Center Shells 2.6  %
(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.
20
COPT Defense Properties
Lease Expiration Analysis as of 12/31/23 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Year of Expiration (2) Square Footage of Leases Expiring Annualized 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 Corridor 1,360  $ 54,190  9.3  % $ 39.82 
NoVA Defense/IT 264  9,782  1.7  % 37.02 
Navy Support 352  10,373  1.8  % 29.50 
Redstone Arsenal 130  3,502  0.6  % 27.00 
Data Center Shells-Unconsolidated JV Properties 310  439  0.1  % 14.17 
2024 2,416  78,286  13.5  % 36.62 
Ft Meade/BW Corridor 1,913  71,809  12.4  % 37.48 
NoVA Defense/IT 281  11,781  2.0  % 41.97 
Lackland Air Force Base 703  39,803  6.9  % 56.64 
Navy Support 197  4,506  0.8  % 22.86 
Redstone Arsenal 296  6,972  1.2  % 23.53 
Data Center Shells-Unconsolidated JV Properties 121  170  —  % 14.09 
2025 3,511  135,042  23.3  % 39.66 
Ft Meade/BW Corridor 825  33,086  5.7  % 40.09 
NoVA Defense/IT 66  2,230  0.4  % 33.54 
Lackland Air Force Base 250  12,565  2.2  % 50.26 
Navy Support 178  5,998  1.0  % 33.62 
Redstone Arsenal 29  742  0.1  % 25.85 
Data Center Shells-Unconsolidated JV Properties 446  806  0.1  % 18.07 
2026 1,794  55,427  9.6  % 39.78 
Ft Meade/BW Corridor 687  26,092  4.5  % 37.97 
NoVA Defense/IT 190  6,300  1.1  % 33.11 
Navy Support 195  7,742  1.3  % 39.70 
Redstone Arsenal 163  4,405  0.8  % 27.00 
Data Center Shells-Unconsolidated JV Properties 364  490  0.1  % 13.46 
2027 1,599  45,030  7.8  % 35.40 
Ft Meade/BW Corridor 1,395  46,215  8.0  % 33.10 
NoVA Defense/IT 211  7,050  1.2  % 33.36 
Navy Support 54  1,438  0.2  % 26.87 
Data Center Shells-Unconsolidated JV Properties 515  840  0.1  % 16.30 
2028 2,175  55,543  9.6  % 32.43 
Thereafter
Consolidated Properties 6,867  207,060  35.7  % 29.38 
Unconsolidated JV Properties 2,540  3,995  0.7  % 15.73 
Total Defense/IT Portfolio 20,902  $ 580,383  100.0  % $ 33.74 
21
COPT Defense Properties
Lease Expiration Analysis as of 12/31/23 (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 Expiring Annualized 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 Portfolio 20,902  $ 580,383  89.8  % $ 33.74 
Other
2024 161  4,313  0.7  % 26.52 
2025 135  10,620  1.6  % 35.71 
2026 164  5,971  0.9  % 36.32 
2027 115  4,353  0.7  % 37.66 
2028 243  8,848  1.4  % 36.34 
Thereafter 750  32,172  5.0  % 42.69 
Total Other 1,568  66,277  10.2  % 38.42 
Total Portfolio 22,470  $ 646,660  100.0  % $ 34.14 
Consolidated Portfolio 18,175  $ 639,920 
Unconsolidated JV Properties 4,295  $ 6,741 
Note: As of 12/31/23, the weighted average lease term was 5.3 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 12/31/23. 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-f802338b11554304b91a.jpg
22
COPT Defense Properties
2024 Defense/IT Portfolio Quarterly Lease Expiration Analysis as of 12/31/23 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Quarter of Expiration (2) Square Footage of Leases Expiring Annualized 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 Corridor 671  $ 26,715  4.6  % $ 39.78 
NoVA Defense/IT 49  1,612  0.3  % 33.07 
Navy Support 84  3,050  0.5  % 36.42 
Redstone Arsenal 4  122  —  % 29.11 
Q1 2024 808  31,499  5.4  % 38.97 
Ft Meade/BW Corridor 191  6,507  1.1  % 34.13 
NoVA Defense/IT 82  3,004  0.5  % 36.42 
Navy Support 12  395  0.1  % 33.45 
Redstone Arsenal 31  531  0.1  % 17.10 
Q2 2024 316  10,437  1.8  % 33.03 
Ft Meade/BW Corridor 279  10,013  1.7  % 35.74 
NoVA Defense/IT 13  435  0.1  % 33.33 
Navy Support 104  2,425  0.4  % 23.31 
Redstone Arsenal 4  130  —  % 33.25 
Data Center Shells-Unconsolidated JV Properties 310  439  0.1  % 14.17 
Q3 2024 710  13,442  2.3  % 31.10 
Ft Meade/BW Corridor 219  10,953  1.9  % 50.09 
NoVA Defense/IT 120  4,732  0.8  % 39.43 
Navy Support 152  4,503  0.8  % 29.62 
Redstone Arsenal 91  2,720  0.5  % 30.02 
Q4 2024 582  22,908  4.0  % 39.41 
2,416  $ 78,286  13.5  % $ 36.62 
(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 12/31/23.
(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.

23
COPT Defense Properties
Top 20 Tenants as of 12/31/23 (1)
(dollars and square feet in thousands)
Tenant Total
Annualized
Rental Revenue (2)		 %
of Total
Annualized 
Rental Revenue (2)		 Occupied Square Feet Weighted Average Remaining Lease Term (3)
United States Government (4) $ 232,220  35.9  % 5,536  3.7 
Fortune 100 Company 56,031  8.7  % 6,182  8.1 
General Dynamics Corporation 32,553  5.0  % 703  3.1 
CACI International Inc 14,940  2.3  % 354  3.9 
Northrop Grumman Corporation 14,815  2.3  % 519  5.7 
The Boeing Company   14,665  2.3  % 443  2.7 
Peraton Corp.   12,633  2.0  % 330  4.7 
Booz Allen Hamilton, Inc.   11,819  1.8  % 297  2.1 
Fortune 100 Company   11,752  1.8  % 183  10.8 
Morrison & Foerster, LLP   9,437  1.5  % 102  13.3 
CareFirst Inc. 9,036  1.4  % 264  10.7 
KBR, Inc.   7,832  1.2  % 310  9.4 
Yulista Holding, LLC   6,906  1.1  % 368  6.0 
RTX Corporation   6,890  1.1  % 186  3.4 
Miles and Stockbridge, PC   6,702  1.0  % 160  2.9 
AT&T Corporation   6,655  1.0  % 321  5.8 
Mantech International Corp.   6,467  1.0  % 200  1.5 
Jacobs Engineering Group Inc.   6,448  1.0  % 185  5.1 
Wells Fargo & Company   6,244  1.0  % 145  4.7 
The University System of Maryland   5,885  0.9  % 172  4.9 
Subtotal Top 20 Tenants   479,930  74.3  % 16,960  5.8 
All remaining tenants   166,730  25.7  % 5,510  4.0 
Total / Weighted Average   $ 646,660  100.0  % 22,470  5.3 

(1)For properties owned through unconsolidated real estate JVs, includes COPT Defense’s share of those properties’ ARR of $6.7 million (see page 34 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 12/31/23, $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.






24
COPT Defense Properties
Property Dispositions
(dollars and square feet in thousands)
Property Property Segment/Sub-Segment Location # of Properties Operational Square Feet Transaction
Date		 % Occupied on Transaction Date Transaction
Value
(in millions)
90% interest in P2 A, B and C (1) Data Center Shells Northern Virginia 3  748 1/10/23 100.0  % $ 190 

(1)     We sold a 90% interest in these properties based on an aggregate property value of $211.3 million and retained a 10% interest in the properties through a newly-formed JV.
25
COPT Defense Properties
Summary of Development Projects as of 12/31/23 (1)
(dollars and square feet in thousands) 
Total Rentable Square Feet
% Leased as of 12/31/23
as of 12/31/23 (2)
 Actual or Anticipated Shell Completion Date  Anticipated Operational Date (3)
Anticipated Total Cost Cost to Date Cost to Date Placed in Service
Property and Segment/Sub-Segment Location
Redstone Arsenal:
5300 Redstone Gateway Huntsville, Alabama 46  100% $ 20,551  $ 17,973  $ —  1Q 24 1Q 24
8100 Rideout Road Huntsville, Alabama 128  42% 43,963  30,485  —  3Q 23 3Q 24
Subtotal / Average 174  57% 64,514  48,458  — 
Data Center Shells:
Southpoint Phase 2 Bldg A Northern Virginia 225  100% 82,500  20,760  —  3Q 24 3Q 24
Southpoint Phase 2 Bldg B Northern Virginia 193  100% 65,000  5,150  —  3Q 25 3Q 25
MP 3 Northern Virginia 225  100% 111,800  10,031  —  4Q 25 4Q 25
Subtotal / Average 643  100% 259,300  35,941  — 
Total Under Development 817  91% $ 323,814  $ 84,399  $ —     
(1)Includes properties under, or contractually committed for, development as of 12/31/23.
(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.




26
COPT Defense Properties
Development Placed in Service as of 12/31/23
(square feet in thousands)
 
Total Space Placed in Service % Leased as of 12/31/23
Total Property Square Feet Placed in Service
Property Segment/Sub-Segment
% Leased as of 12/31/23
 Rentable Square Feet Prior Year 2023 Total
Property and Location 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total 2023
Expedition VII
St. Mary’s County, Maryland
 Navy Support 62% 29  18  11  —  —  —  11  29  62%
7000 Redstone Gateway
  Huntsville, Alabama
 Redstone Arsenal 78% 46  21  —  15  10  —  25  46  78%
300 Secured Gateway
  Huntsville, Alabama
 Redstone Arsenal 100% 206  —  —  —  206  —  206  206  100%
PS A
Northern Virginia
 Data Center Shells 100% 227  —  —  —  227  —  227  227  100%
PS B
Northern Virginia
 Data Center Shells 100% 193  —  —  —  —  193  193  193  100%
550 National Business Parkway
  Annapolis Junction, Maryland
 Fort Meade/BW Corridor 100% 186  —  —  —  —  186  186  186  100%
Total Development Placed in Service 98% 887  39  11  15  443  379  848  887  98%
% Leased as of 12/31/23
 0% 100% 98% 100% 98%

27
COPT Defense Properties
Summary of Land Owned/Controlled as of 12/31/23 (1)
(dollars and square feet in thousands)
Location Acres   Estimated Developable Square Feet Carrying Amount
Defense/IT Portfolio land owned/controlled for future development:      
Fort Meade/BW Corridor:
National Business Park 144 1,630
Howard County 19 290
Other 126 1,338
Total Fort Meade/BW Corridor 289   3,258
NoVA Defense/IT 29   1,171
Navy Support 38 64
Redstone Arsenal (2) 300 3,400
Total Defense/IT Portfolio land owned/controlled for future development 656 7,893 $ 164,367 
Other land owned/controlled 53   1,538 9,533 
Land held, net 709 9,431 $ 173,900 

(1)This land inventory schedule includes properties under ground lease to us and excludes all properties listed as development as detailed on page 26. 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 33). 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.
28
COPT Defense Properties
Capitalization Overview
(dollars, shares and units in thousands)
Wtd. Avg. Maturity (Years) (1) Stated Rate Effective Rate
(2)(3)
Amount Outstanding at 12/31/23
Debt
Secured debt 1.6 5.04  % 3.55  % $ 99,539 
Unsecured debt 5.8 3.26  % 3.34  % 2,345,461 
Total Consolidated Debt 5.7 3.33  % 3.35  % $ 2,445,000 
Fixed-rate debt (3) 5.9 2.98  % 3.35  % $ 2,445,000 
Variable-rate debt (3) 3.7 6.69  % N/A — 
Total Consolidated Debt $ 2,445,000 
Common Equity
Common Shares 112,555 
Common Units (4) 1,874 
Total Common Shares and Units 114,429 
Closing Common Share Price on 12/29/23
 $ 25.63 
Equity Market Capitalization (5) $ 2,932,815 
Total Market Capitalization (5) $ 5,377,815 
(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 $233.1 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 12/31/23.
(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 & Outlook Latest Report
Fitch BBB- Stable 11/22/23
Moody’s Baa3 Stable 1/22/24
S&P BBB- Stable 9/7/23
chart-4983c68703cd4a4db81a.jpgchart-48967414c5ab4de2b81a.jpg
29
COPT Defense Properties
Summary of Outstanding Debt as of 12/31/23
(dollars in thousands)
Unsecured Debt Stated Rate Amount Outstanding Maturity Date Secured Debt Stated Rate Amount Outstanding Balloon Payment Due Upon Maturity Maturity Date
Revolving Credit Facility SOFR+
0.10%+1.05%		 $ 75,000  Oct-26 (1)(2) LW Redstone:
1000, 1200 & 1100 Redstone Gateway (3) 4.47% (4) $ 28,187  $ 27,649  Jun-24
Senior Unsecured Notes
2.25% due 2026 2.25% 400,000  Mar-26 4000 & 4100 Market Street and 8800 Redstone Gateway (2)(3) SOFR
+0.10%+1.55%		 22,475  $ 22,100  Mar-25 (6)
5.25% due 2028 5.25% 345,000  Sep-28 (5)
2.00% due 2029 2.00% 400,000  Jan-29 M Square:
2.75% due 2031 2.75% 600,000  Apr-31 5825 & 5850 University Research Court (3) 3.82% 38,237  $ 35,603  Jun-26
2.90% due 2033 2.90% 400,000  Dec-33
Subtotal - Senior Unsecured Notes 2.95% $ 2,145,000  5801 University Research Court (2)(3) SOFR
+0.10%+1.45%		 10,640  $ 10,020  Aug-26
Unsecured Bank Term Loans Total Secured Debt 5.04% $ 99,539 
2026 Maturity SOFR+
0.10%+1.30%		 $ 125,000  Jan-26 (2)(7)
Other Unsecured Debt 0.00% 461  May-26
Total Unsecured Debt 3.26% $ 2,345,461 
Debt Summary
Total Unsecured Debt 3.26% $ 2,345,461 
Total Secured Debt 5.04% 99,539 
Consolidated Debt 3.33% $ 2,445,000 
Debt per balance sheet $ 2,416,287 
Net discounts and deferred financing costs 28,713 
Consolidated Debt 2,445,000 
COPT Defense’s share of unconsolidated JV gross debt (8) 52,613 
Gross debt $ 2,497,613 
(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 34 for additional disclosure regarding our unconsolidated real estate joint ventures.

30
COPT Defense Properties
Summary of Outstanding Debt as of 12/31/23 (continued)

chart-f64db430a0114dd0a46a.jpg
chart-af161dab347246d2948a.jpgchart-ac0652520c714909b32a.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 $233.1 million that hedge the risk of changes in interest rates on variable-rate debt.
31
COPT Defense Properties
Debt Analysis
(dollars and square feet in thousands)
As of and for Three Months Ended
12/31/23
As of and for Three Months Ended
12/31/23
Senior Note Covenants (1) Required Line of Credit & Term Loan Covenants (1)(2) Required
Total Debt / Total Assets < 60% 42.6% Total Debt / Total Assets < 60% 38.9%
Secured Debt / Total Assets < 40% 1.8% Secured Debt / Total Assets < 40% 2.1%
Debt Service Coverage > 1.5x 4.2x Adjusted EBITDA / Fixed Charges > 1.5x 4.4x
Unencumbered Assets / Unsecured Debt > 150% 234.0% Unsecured Debt / Unencumbered Assets < 60% 39.4%
Unencumbered Adjusted NOI / Unsecured Interest Expense > 1.75x 4.4x
Debt Ratios (All coverage computations include discontinued operations) Page Refer. Unencumbered Portfolio Analysis
GAAP # of unencumbered properties 170 
Debt per balance sheet 6 $ 2,416,287  % of total portfolio 86  %
Total assets 6 $ 4,246,966  Unencumbered square feet in-service 19,846 
Debt to assets 56.9  % % of total portfolio 83  %
Net income 7 $ 34,820  NOI from unencumbered real estate operations $ 94,213 
Debt to net income ratio (2) 17.3  x % of total NOI from real estate operations 95  %
Interest expense 7 $ 20,383  Adjusted EBITDA from unencumbered real estate operations $ 89,491 
Net income to interest expense ratio (2) 1.7  x % of total adjusted EBITDA from real estate operations 95  %
Unencumbered adjusted book $ 5,465,260 
Non-GAAP % of total adjusted book 95  %
Net debt 38 $ 2,328,941 
Adjusted book 38 $ 5,742,705 
Net debt to adjusted book 40.6  %
Net debt adj. for fully-leased development 38 $ 2,275,027 
In-place adjusted EBITDA 11 $ 95,077 
Net debt to in-place adjusted EBITDA ratio 6.1  x
Net debt adj. for fully-leased devel. to in-place adj. EBITDA ratio 6.0  x
Denominator for debt service coverage 37 $ 20,280 
Denominator for fixed charge coverage 37 $ 21,308 
Adjusted EBITDA 11 $ 93,934 
Adjusted EBITDA debt service coverage ratio 4.6  x
Adjusted EBITDA fixed charge coverage ratio 4.4  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.
32
COPT Defense Properties
Consolidated Real Estate Joint Ventures as of 12/31/23
(dollars and square feet in thousands)

NOI from Real Estate Operations (1) Venture Level Debt Outstanding (3) COPT Defense Nominal
Ownership %
Operating Properties Operational
Square Feet		 % Occupied % Leased Three Months Ended Year Ended Total Assets (2)
Suburban Maryland:            
M Square Associates, LLC (4 properties)
 414  88.8% 88.8% $ 1,634  $ 6,375  $ 92,153  $ 48,877  50%
Huntsville, Alabama:
LW Redstone Company, LLC (21 properties)
 2,164  97.9% 99.2% 9,765  34,411  562,268  50,662  85% (4)
Washington, D.C.:
Stevens Place (1 property)
 188  60.6% 83.5% 1,205  4,970  128,857  —  95%
Total / Average 2,766  94.0% 96.6% $ 12,604  $ 45,756  $ 783,278  $ 99,539 
 
        
Non-Operating Properties Estimated Developable Square Feet Total Assets (2) Venture Level Debt Outstanding COPT Defense Nominal Ownership %
Suburban Maryland:        
M Square Research Park 348  $ 5,964  $ —  50%
Huntsville, Alabama:        
Redstone Gateway (5) 3,574  156,254  —  85% (3)
Total 3,922  $ 162,218  $ —   
 
(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 $77.0 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.
33
COPT Defense Properties
Unconsolidated Real Estate Joint Ventures as of 12/31/23 (1)
(dollars and square feet in thousands) 
Joint venture information
COPT Defense ownership %
 10  %
COPT Defense’s investment
 $ 38,275  (2)
# of Properties 24 
Square Feet 4,295 
% Occupied 100  %
COPT Defense’s share of ARR $ 6,741 
Balance sheet information Total COPT Defense’s Share (4)
Operating properties, net $ 958,719  $ 95,872 
Total assets $ 1,056,461  $ 105,646 
Debt (3) $ 522,498  $ 52,250 
Total liabilities $ 605,833  $ 60,583 
Three Months Ended Year Ended
Operating information Total COPT Defense’s Share (4) Total COPT Defense’s Share (4)
Revenue $ 19,725  $ 1,973  $ 78,510  $ 7,851 
Operating expenses (3,006) (302) (11,913) (1,192)
NOI from real estate operations and EBITDAre (5) 16,719  1,671  66,597  6,659 
Interest expense (11,060) (1,106) (37,001) (3,700)
Depreciation and amortization (8,520) (805) (34,027) (3,217)
Net loss $ (2,861) $ (240) $ (4,431) $ (258)
NOI from real estate operations (per above) (5) $ 16,719  $ 1,671  $ 66,597  $ 6,659 
Straight line rent adjustments (615) (62) (2,888) (289)
Amortization of acquired above- and below-market rents (2,097) (209) (8,385) (838)
Cash NOI from real estate operations (5) $ 14,007  $ 1,400  $ 55,324  $ 5,532 
(1)Includes equity method investments in five JVs that own and operate data center shell properties, including one JV formed on 1/10/23 in connection with our sale of a 90% interest in three data center shell properties totaling 748,000 square feet and retention of a 10% interest in the properties through the JV.
(2)Includes $41.1 million reported in “Investment in unconsolidated real estate joint ventures” and $2.8 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.



34
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Net income (loss) $ 34,820  $ (221,207) $ 31,642  $ 80,398  $ 52,087  $ (74,347) $ 178,822 
Construction contract and other service revenues (18,167) (11,949) (14,243) (15,820) (24,062) (60,179) (154,632)
Depreciation and other amortization associated with real estate operations 36,735  37,620  37,600  36,995  36,907  148,950  141,230 
Construction contract and other service expenses 17,167  11,493  13,555  15,201  23,454  57,416  149,963 
Impairment losses —  252,797  —  —  —  252,797  — 
General and administrative expenses 8,240  7,582  7,287  7,996  7,766  31,105  27,461 
Leasing expenses 2,308  2,280  2,345  1,999  2,235  8,932  8,337 
Business development expenses and land carry costs 797  714  726  495  1,157  2,732  3,193 
Interest expense 20,383  17,798  16,519  16,442  16,819  71,142  61,174 
Interest and other income, net (5,659) (2,529) (2,143) (2,256) (4,671) (12,587) (9,070)
Gain on sales of real estate from continuing operations —  —  (14) (49,378) (19,238) (49,392) (19,250)
Loss on early extinguishment of debt —  —  —  —  267  —  609 
Equity in loss (income) of unconsolidated entities 240  68  (111) 64  (229) 261  (1,743)
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in (loss) income of unconsolidated entities (1) 1,671  1,675  1,671  1,642  1,095  6,659  4,327 
Income tax expense 121  152  190  125  223  588  447 
Discontinued operations —  —  —  —  —  —  (29,573)
Revenues from real estate operations from discontinued operations —  —  —  —  —  —  1,980 
Property operating expenses from discontinued operations —  —  —  —  —  —  (971)
NOI from real estate operations 98,656  96,494  95,024  93,903  93,810  384,077  362,304 
Straight line rent adjustments and lease incentive amortization 703  13,262  (2,916) (3,818) (2,974) 7,231  (7,822)
Amortization of acquired above- and below-market rents (121) (120) (129) (166) (131) (536) (844)
Amortization of intangibles and other assets to property operating expenses 146  147  146  147  146  586  586 
Lease termination fees, net (716) (748) (1,059) (1,221) (1,026) (3,744) (2,237)
Tenant funded landlord assets and lease incentives (7,548) (19,383) (2,221) (1,230) (1,109) (30,382) (7,815)
Cash NOI adjustments in unconsolidated real estate JVs (271) (279) (286) (291) (83) (1,127) (360)
Cash NOI from real estate operations $ 90,849  $ 89,373  $ 88,559  $ 87,324  $ 88,633  $ 356,105  $ 343,812 
NOI from real estate operations (from above) $ 98,656  $ 96,494  $ 95,024  $ 93,903  $ 93,810  $ 384,077  $ 362,304 
Non-Same Property NOI from real estate operations (11,705) (9,318) (8,770) (9,451) (9,015) (39,244) (27,991)
Same Property NOI from real estate operations 86,951  87,176  86,254  84,452  84,795  344,833  334,313 
Straight line rent adjustments and lease incentive amortization 7,947  15,060  1,232  1,392  319  25,631  (2,729)
Amortization of acquired above- and below-market rents (121) (120) (129) (166) (131) (536) (844)
Lease termination fees, net (717) (748) (1,059) (1,221) (1,026) (3,745) (2,237)
Tenant funded landlord assets and lease incentives (7,501) (15,364) (1,191) (1,188) (1,068) (25,244) (5,915)
Cash NOI adjustments in unconsolidated real estate JVs (58) (64) (70) (75) (81) (267) (358)
Same Property Cash NOI from real estate operations $ 86,501  $ 85,940  $ 85,037  $ 83,194  $ 82,808  $ 340,672  $ 322,230 
(1)See page 34 for additional disclosure regarding our unconsolidated real estate JVs.
35
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Real estate revenues
Lease revenue
Fixed contractual payments $ 123,677  $ 120,408  $ 118,461  $ 116,039  $ 116,349  $ 478,585  $ 455,360 
Variable lease payments (1) 36,660  34,860  35,221  34,521  33,673  141,262  126,789 
Lease revenue 160,337  155,268  153,682  150,560  150,022  619,847  582,149 
Other property revenue 1,225  1,339  1,271  1,121  1,163  4,956  4,229 
Real estate revenues $ 161,562  $ 156,607  $ 154,953  $ 151,681  $ 151,185  $ 624,803  $ 586,378 
Provision for credit losses (recoveries) on billed lease revenue $ 498  $ 13  $ (196) $ 269  $ —  $ 584  $ 501 
Discontinued operations
Revenues from real estate operations $ —  $ —  $ —  $ —  $ —  $ —  $ 1,980 
Property operating expenses —  —  —  —  —  —  (971)
Gain on sale of real estate —  —  —  —  —  —  28,564 
Discontinued operations $ —  $ —  $ —  $ —  $ —  $ —  $ 29,573 
Total revenues from continuing operations $ 179,729  $ 168,556  $ 169,196  $ 167,501  $ 175,247  $ 684,982  $ 739,030 
Construction contract and other service revenues (18,167) (11,949) (14,243) (15,820) (24,062) (60,179) (154,632)
Revenues from discontinued operations —  —  —  —  —  —  1,980 
Real estate revenues $ 161,562  $ 156,607  $ 154,953  $ 151,681  $ 151,185  $ 624,803  $ 586,378 
Gain on sales of real estate from continuing operations $ —  $ —  $ 14  $ 49,378  $ 19,238  $ 49,392  $ 19,250 
Gain on sales of real estate from discontinued operations —  —  —  —  —  —  28,564 
Gain on sales of real estate $ —  $ —  $ 14  $ 49,378  $ 19,238  $ 49,392  $ 47,814 
(1)Represents primarily lease revenue associated with property operating expense reimbursements from tenants.
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COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
  Three Months Ended Years Ended
  12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 12/31/23 12/31/22
Total interest expense $ 20,383  $ 17,798  $ 16,519  $ 16,442  $ 16,819  $ 71,142  $ 61,174 
Less: Amortization of deferred financing costs (681) (639) (628) (632) (619) (2,580) (2,297)
Less: Amortization of net debt discounts, net of amounts capitalized (1,004) (750) (622) (618) (615) (2,994) (2,440)
COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and loss on interest rate derivatives 819  805  791  773  423  3,188  1,123 
Denominator for interest coverage 19,517  17,214  16,060  15,965  16,008  68,756  57,560 
Scheduled principal amortization 763  753  746  790  864  3,052  3,333 
Denominator for debt service coverage 20,280  17,967  16,806  16,755  16,872  71,808  60,893 
Capitalized interest 1,028  1,487  1,194  770  1,835  4,479  6,709 
Denominator for fixed charge coverage $ 21,308  $ 19,454  $ 18,000  $ 17,525  $ 18,707  $ 76,287  $ 67,602 
Dividends on unrestricted common and deferred shares $ 31,998  $ 31,996  $ 31,995  $ 31,989  $ 30,844  $ 127,978  $ 123,367 
Distributions on unrestricted common units 430  432  433  430  406  1,725  1,623 
Dividends and distributions on restricted shares and units 209  200  204  215  134  828  567 
Total dividends and distributions for GAAP payout ratio 32,637  32,628  32,632  32,634  31,384  130,531  125,557 
Dividends and distributions on antidilutive shares and units (212) (202) (205) (216) (121) (835) (516)
Dividends and distributions for non-GAAP payout ratios $ 32,425  $ 32,426  $ 32,427  $ 32,418  $ 31,263  $ 129,696  $ 125,041 


37
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
12/31/23 9/30/23 6/30/23 3/31/23 12/31/22
Total assets $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992  $ 4,257,275 
Accumulated depreciation 1,400,162  1,367,473  1,334,066  1,300,430  1,267,434 
Accumulated depreciation included in assets held for sale —  —  —  —  6,014 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 228,484  228,334  226,555  224,791  222,779 
COPT Defense’s share of liabilities of unconsolidated real estate JVs 60,583  60,762  60,724  60,734  52,404 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 9,528  8,664  7,800  6,936  6,078 
Less: Property - operating lease liabilities (33,931) (32,940) (33,923) (34,896) (28,759)
Less: Property - finance lease liabilities (415) (420) (426) (431) — 
Less: Cash and cash equivalents (167,820) (204,238) (14,273) (15,199) (12,337)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (852) (1,031) (974) (881) (456)
Adjusted book $ 5,742,705  $ 5,665,861  $ 5,825,895  $ 5,719,476  $ 5,770,432 
Gross debt (page 30)
$ 2,497,613  $ 2,498,274  $ 2,249,880  $ 2,197,488  $ 2,307,054 
Less: Cash and cash equivalents (167,820) (204,238) (14,273) (15,199) (12,337)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (852) (1,031) (974) (881) (456)
Net debt 2,328,941  2,293,005  2,234,633  2,181,408  2,294,261 
Costs incurred on fully-leased development properties (53,914) (124,038) (189,407) (137,309) (95,972)
Net debt adjusted for fully-leased development $ 2,275,027  $ 2,168,967  $ 2,045,226  $ 2,044,099  $ 2,198,289 
Net debt $ 2,328,941  $ 2,293,005  $ 2,234,633  $ 2,181,408  $ 2,294,261 
Pro forma debt adjustments from subsequent event transaction proceeds (1) N/A N/A N/A N/A (189,000)
Pro forma net debt 2,328,941  2,293,005  2,234,633  2,181,408  2,105,261 
Costs incurred on fully-leased development properties (53,914) (124,038) (189,407) (137,309) (95,972)
Pro forma net debt adjusted for fully-leased development $ 2,275,027  $ 2,168,967  $ 2,045,226  $ 2,044,099  $ 2,009,289 
(1)Includes, for the 12/31/22 period, the effect of resulting proceeds available for debt pay downs from our sale on 1/10/23 of a 90% interest in three data center shell properties.
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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-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.
39
COPT Defense Properties
Definitions
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) 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 believe are not closely correlated to (or associated with) our operating performance.
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COPT Defense Properties
Definitions
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 from continuing and discontinued operations; consolidated property operating expenses from continuing and discontinued operations; 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.

Pro forma net debt, pro forma net debt adjusted for fully-leased development, pro forma in-place adjusted EBITDA and associated ratios
These measures and the ratios in which they are used adjust for the effect of noted dispositions of interests in properties that occurred subsequent to the end of reporting periods and before our release of financial results for such periods. The adjustments remove Adjusted EBITDA from real estate operations associated with the disposed interests in properties and adjust our net debt measures for resulting proceeds available for debt pay downs to reflect these measures and ratios as if such events occurring subsequent to a three month reporting period occurred at the beginning of such reporting period. We believe that these adjustments 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 these further adjusted versions of these measures/ratios are useful in presenting the effect of the dispositions on our un-levered performance and ability to repay outstanding debt from operations.  We believe that debt reported on our consolidated balance sheet is the most directly comparable GAAP measure to pro forma net debt and pro forma net debt adjusted for fully-leased development and that net income or loss is the most directly comparable GAAP measure to pro forma in-place adjusted EBITDA.

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.

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 1/1/22.

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, CFA Michelle Layne
443.285.5587 443.285.5452
venkat.kommineni@copt.com michelle.layne@copt.com


COPT Defense Reports Full Year 2023 Results
_______________________________________________________________

EPS of ($0.67) for Full Year
Impacted by 3Q23 Impairment of Assets in Other Segment

FFO per Share, as Adjusted for Comparability, of $2.42
Increased 2.5% Over 2022 Results

Defense/IT Portfolio 96.2% Occupied and 97.2% Leased

Same Property Cash NOI Increased 5.7%
Highest Reported Year-over-Year Annual Increase in Over 15 Years

Placed 848,000 SF of Developments into Service that are 98% Leased

817,000 SF of Active Developments are 91% Leased
_______________________________________________________________

Exceeded Leasing Goals in 2023
Total Leasing of 2.9 million SF

452,000 SF of Vacancy Leasing
Exceeded Annual Target of 400,000 SF

Tenant Retention of 80%
3rd Highest Annual Retention Rate Over Last 20 Years

747,000 SF of Development Leasing
Exceeded Annual Guidance of 700,000 SF
_______________________________________________________________


COLUMBIA, MD (BUSINESS WIRE) February 8, 2024 - COPT Defense Properties (“COPT Defense” or the “Company”) (NYSE: CDP) announced results for the fourth quarter and full year ended December 31, 2023.



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Management Comments

Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “The performance of our Defense/IT investment strategy, which concentrates our portfolio near priority U.S. defense installations, continues to demonstrate operating strength, resulting in a solid earnings growth profile.

We achieved several key operating and financial performance milestones in 2023. Our Defense/IT Portfolio was 96.2% occupied and 97.2% leased at year end, which are the highest rates reported since we began disclosing the segment in 2015. Our sector leading tenant retention rate of 79.4% was the third highest figure in the last 20 years. Same property cash NOI increased 5.7%, the highest reported level in over 15 years, while cash rent spreads on renewals were the highest since 2008.

We attribute our continued strong performance to the strength in defense spending over the past few years, which has resulted in growing tenant demand in our Defense/IT Portfolio to support mission-critical national defense activities.

The outlook for defense spending remains favorable as the FY24 National Defense Authorization Act, which was passed in December and is awaiting Appropriation, calls for 3.3% year-over-year growth, which we believe will fuel demand for space in our portfolio through 2025.

We have generated FFO per share growth in each of the past 5 years, which amounts to a compound annual growth rate of 4.5% between 2019 to 2023. Looking forward, we expect FFO per share to increase 3.7% at the midpoint in 2024 and continue to anticipate compound annual growth of roughly 4% between 2023 to 2026.”

Financial Highlights

4th Quarter Financial Results:
•Diluted earnings per share (“EPS”) was $0.30 for the quarter ended December 31, 2023 as compared to $0.45 for the quarter ended December 31, 2022.

•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 December 31, 2023 compared to $0.60 for the quarter ended December 31, 2022.

Full Year 2023 Financial Results:
•    EPS for the year ended December 31, 2023 was $(0.67), which included a $252.8 million impairment charge for six operating properties in the Other segment and a parcel of land, located in Baltimore, Maryland, Northern Virginia and Washington, D.C., resulting from the Company’s quarterly portfolio review, as compared to $1.53 for 2022.

•     Per Nareit’s definition, FFOPS for 2023 was $2.41 as compared to $2.35 for 2022.

•     FFOPS, as adjusted for comparability, for 2023 was $2.42 as compared to $2.36 for 2022.




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Operating Performance Highlights

Operating Portfolio Summary:
•At December 31, 2023, the Company’s 23.9 million square foot Total Portfolio was 94.2% occupied and 95.3% leased, which includes the 21.7 million square foot Defense/IT Portfolio that was 96.2% occupied and 97.2% leased.

•During the quarter and year ended December 31, 2023, the Company placed into service 379,000 and 848,000 square feet, respectively, of developments that were 100% and 98% leased, respectively, as of year end.

Same Property Performance:
•At December 31, 2023, the Company’s 20.6 million square foot same property portfolio was 93.4% occupied and 94.7% leased.

•The Company’s same property cash NOI increased 4.5% and 5.7% for the three months and year ended December 31, 2023, respectively, compared to the same periods in 2022.

Leasing:
•Total Square Feet Leased: For the quarter ended December 31, 2023, the Company leased 668,000 square feet, including 301,000 square feet of renewals, 115,000 square feet of vacancy leasing, and 252,000 square feet in development projects. For the year ended December 31, 2023, the Company executed 2.9 million square feet of total leasing, including 1.7 million square feet of renewals, 452,000 square feet of vacancy leasing, and 747,000 square feet in development projects.

•Tenant Retention Rates: During the quarter and year ended December 31, 2023, the Company renewed 68.9% and 79.7% in its Total Portfolio, respectively, of expiring square feet. During the quarter and year ended December 31, 2023, the Company renewed 77.6% and 85.7% in its Defense/IT Portfolio, respectively, of expiring square feet.

•Rent Spreads & Average Escalations on Renewing Leases: For the quarter and year ended December 31, 2023, straight-line rents on renewals increased 20.5% and 9.3%, respectively, and cash rents on renewed space increased 3.1% and 1.5%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.5% and 2.6%, respectively.

•Lease Terms: In the quarter ended December 31, 2023, lease terms averaged 6.3 years on renewing leases, 9.3 years on vacancy leasing, and 14.6 years on development projects. For the year ended December 31, 2023, lease terms averaged 4.8 years on renewing leases, 8.2 years on vacancy leasing, and 14.4 years on development leasing.

Investment Activity Highlights
•Development Pipeline: The Company’s development pipeline consists of five properties totaling 817,000 square feet that were 91% leased as of December 31, 2023. These projects represent a total estimated investment of $323.8 million, of which $84.4 million has been spent.

Balance Sheet and Capital Transaction Highlights
•For the quarter ended December 31, 2023, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.4x.



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•At December 31, 2023, 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.

•At December 31, 2023, 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 5.7 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 fourth quarter and full year 2023 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
The Company details its initial full year and first quarter guidance, with supporting assumptions, in a separate press release issued concurrently with this press release; that release can be found in the ‘News & Events – Press Releases’ section of COPT Defense’s Investors website: https://investors.copt.com/news-events/press-releases

Conference Call Information
Management will discuss fourth quarter and full year 2023 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:

Conference Call Date: Friday, February 09, 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/BIec6f0e6112cd459ab4eda8f3c55c2d22

The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT Defense’s Investors website: https://investors.copt.com/news-events/ir-calendar

Replay Information
A replay of the conference call will be immediately available via webcast only on COPT Defense’s Investors website and will be maintained on the website for approximately 90 days after the conference call.

Definitions
For definitions of certain terms used in this press release, please refer to the information furnished in the Company’s Supplemental Information Package furnished on a Form 8-K which can be found on its website (www.copt.com). Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the attached tables.

About COPT Defense
COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (referred to as its Defense/IT Portfolio). The Company’s tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of December 31, 2023, the Company’s Defense/IT Portfolio of 190 properties, including 24 owned through unconsolidated joint ventures, encompassed 21.7 million square feet and was 97.2% leased.


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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, 2022.


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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 December 31, For the Years Ended December 31,
  2023 2022 2023 2022
Revenues    
Lease revenue $ 160,337  $ 150,022  $ 619,847  $ 580,169 
Other property revenue 1,225  1,163  4,956  4,229 
Construction contract and other service revenues 18,167  24,062  60,179  154,632 
Total revenues 179,729  175,247  684,982  739,030 
Operating expenses    
Property operating expenses 64,577  58,470  247,385  227,430 
Depreciation and amortization associated with real estate operations 36,735  36,907  148,950  141,230 
Construction contract and other service expenses 17,167  23,454  57,416  149,963 
Impairment losses —  —  252,797  — 
General and administrative expenses 8,240  7,766  31,105  27,461 
Leasing expenses 2,308  2,235  8,932  8,337 
Business development expenses and land carry costs 797  1,157  2,732  3,193 
Total operating expenses 129,824  129,989  749,317  557,614 
Interest expense (20,383) (16,819) (71,142) (61,174)
Interest and other income, net 5,659  4,671  12,587  9,070 
Gain on sales of real estate —  19,238  49,392  19,250 
Loss on early extinguishment of debt —  (267) —  (609)
Income (loss) from continuing operations before equity in (loss) income of unconsolidated entities and income taxes 35,181  52,081  (73,498) 147,953 
Equity in (loss) income of unconsolidated entities (240) 229  (261) 1,743 
Income tax expense (121) (223) (588) (447)
Income (loss) from continuing operations 34,820  52,087  (74,347) 149,249 
Discontinued operations —  —  —  29,573 
Net income (loss) 34,820  52,087  (74,347) 178,822 
Net (income) loss attributable to noncontrolling interests:    
Common units in the Operating Partnership (“OP”) (576) (775) 1,306  (2,603)
Other consolidated entities (592) (833) (428) (3,190)
Net income (loss) attributable to common shareholders $ 33,652  $ 50,479  $ (73,469) $ 173,029 
Earnings per share (“EPS”) computation:    
Numerator for diluted EPS:    
Net income (loss) attributable to common shareholders $ 33,652  $ 50,479  $ (73,469) $ 173,029 
Amount allocable to share-based compensation awards (100) (129) (1,199) (463)
Redeemable noncontrolling interests —  (60) —  (169)
Numerator for diluted EPS $ 33,552  $ 50,290  $ (74,668) $ 172,397 
Denominator:    
Weighted average common shares - basic 112,199  112,096  112,178  112,073 
Dilutive effect of share-based compensation awards 432  435  —  431 
Dilutive effect of redeemable noncontrolling interests —  102  —  116 
Weighted average common shares - diluted 112,631  112,633  112,178  112,620 
Diluted EPS $ 0.30  $ 0.45  $ (0.67) $ 1.53 
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COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands, except per share data)
  For the Three Months Ended December 31, For the Years Ended December 31,
  2023 2022 2023 2022
Net income (loss) $ 34,820  $ 52,087  $ (74,347) $ 178,822 
Real estate-related depreciation and amortization 36,735  36,907  148,950  141,230 
Impairment losses on real estate —  —  252,797  — 
Gain on sales of real estate from continuing and discontinued operations —  (19,238) (49,392) (47,814)
Depreciation and amortization on unconsolidated real estate JVs 805  526  3,217  2,101 
Funds from operations (“FFO”) 72,360  70,282  281,225  274,339 
FFO allocable to other noncontrolling interests (972) (1,227) (3,978) (4,795)
Basic FFO allocable to share-based compensation awards (513) (360) (1,940) (1,433)
Basic FFO available to common share and common unit holders (“Basic FFO”) 70,875  68,695  275,307  268,111 
Redeemable noncontrolling interests —  (27) (58) (34)
Diluted FFO adjustments allocable to share-based compensation awards 38  28  150  109 
Diluted FFO available to common share and common unit holders (“Diluted FFO”) 70,913  68,696  275,399  268,186 
Loss on early extinguishment of debt —  267  —  609 
Gain on early extinguishment of debt on unconsolidated real estate JVs —  (168) —  (168)
Executive transition costs 188  —  518  343 
Diluted FFO comparability adjustments allocable to share-based compensation awards (1) (1) (4) (5)
Diluted FFO available to common share and common unit holders, as adjusted for comparability 71,100  68,794  275,913  268,965 
Straight line rent adjustments and lease incentive amortization 313  (3,043) 6,518  (8,825)
Amortization of intangibles and other assets included in net operating income (“NOI”) 26  15  50  (258)
Share-based compensation, net of amounts capitalized 2,318  2,247  8,544  8,700 
Amortization of deferred financing costs 681  619  2,580  2,297 
Amortization of net debt discounts, net of amounts capitalized 1,004  615  2,994  2,440 
Replacement capital expenditures (21,498) (43,283) (93,494) (95,886)
Other 336  158  (84) 980 
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 54,280  $ 26,122  $ 203,021  $ 178,413 
Diluted FFO per share $ 0.62  $ 0.60  $ 2.41  $ 2.35 
Diluted FFO per share, as adjusted for comparability $ 0.62  $ 0.60  $ 2.42  $ 2.36 
Dividends/distributions per common share/unit $ 0.285  $ 0.275  $ 1.140  $ 1.100 

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COPT Defense Properties
Summary Financial Data
(unaudited)
(Dollars and shares in thousands, except per share data)
December 31,
2023		 December 31,
2022
Balance Sheet Data    
Properties, net of accumulated depreciation $ 3,503,678  $ 3,556,398 
Total assets $ 4,246,966  $ 4,257,275 
Debt per balance sheet $ 2,416,287  $ 2,231,794 
Total liabilities $ 2,699,631  $ 2,509,527 
Redeemable noncontrolling interests $ 23,580  $ 26,293 
Total equity $ 1,523,755  $ 1,721,455 
Debt to assets 56.9  % 52.4  %
Net debt to adjusted book 40.6  % 39.8  %
Defense/IT Portfolio Data (as of period end)    
Number of operating properties 190  186 
Total operational square feet (in thousands) 21,719  20,869 
% Occupied 96.2  % 94.1  %
% Leased 97.2  % 96.7  %
For the Three Months Ended December 31, For the Years Ended December 31,
2023 2022 2023 2022
GAAP        
Payout ratio:
Net income 93.7  % 60.3  % N/A 70.2  %
Debt ratios:
Net income to interest expense ratio 1.7  x  3.1  x  N/A 2.9  x 
Debt to net income ratio 17.3  x  10.7  x  N/A N/A
Non-GAAP
Payout ratios:
Diluted FFO 45.7  % 45.5  % 47.1  % 46.6  %
Diluted FFO, as adjusted for comparability 45.6  % 45.4  % 47.0  % 46.5  %
Diluted AFFO 59.7  % 119.7  % 63.9  % 70.1  %
Debt ratios:
Adjusted EBITDA fixed charge coverage ratio 4.4  x  4.7  x  4.7  x  5.1  x 
Net debt to in-place adjusted EBITDA ratio 6.1  x  6.3  x  N/A N/A
Pro forma net debt to in-place adjusted EBITDA ratio (1) N/A 6.0  x  N/A N/A
Net debt adj. for fully-leased development to in-place adj. EBITDA ratio 6.0  x  6.1  x  N/A N/A
Pro forma net debt adj. for fully-leased development to in-place adj. EBITDA ratio (1) N/A 5.7  x  N/A N/A
Reconciliation of denominators for per share measures  
Denominator for diluted EPS 112,631  112,633  112,178  112,620 
Weighted average common units 1,514  1,476  1,509  1,454 
Dilutive effect of additional share-based compensation awards —  —  424  — 
Redeemable noncontrolling interests —  —  38  — 
Denominator for diluted FFO per share and as adjusted for comparability 114,145  114,109  114,149  114,074 

(1)Includes, for the 12/31/22 period, adjustments associated with our sale on 1/10/23 of a 90% interest in three data center shell properties.


viii


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended December 31, For the Years Ended December 31,
  2023 2022 2023 2022
Numerators for Payout Ratios
Dividends on unrestricted common and deferred shares $ 31,998  $ 30,844  $ 127,978  $ 123,367 
Distributions on unrestricted common units 430  406  1,725  1,623 
Dividends and distributions on restricted shares and units 209  134  828  567 
Total dividends and distributions for GAAP payout ratio 32,637  31,384  130,531  125,557 
Dividends and distributions on antidilutive shares and units (212) (121) (835) (516)
Dividends and distributions for non-GAAP payout ratios $ 32,425  $ 31,263  $ 129,696  $ 125,041 
Reconciliation of net income (loss) to earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”), adjusted EBITDA and in-place adjusted EBITDA        
Net income (loss) $ 34,820  $ 52,087  $ (74,347) $ 178,822 
Interest expense 20,383  16,819  71,142  61,174 
Income tax expense 121  223  588  447 
Real estate-related depreciation and amortization 36,735  36,907  148,950  141,230 
Other depreciation and amortization 619  602  2,445  2,363 
Impairment losses on real estate —  —  252,797  — 
Gain on sales of real estate from continuing and discontinued operations —  (19,238) (49,392) (47,814)
Adjustments from unconsolidated real estate JVs 1,911  1,033  6,917  3,313 
EBITDAre 94,589  88,433  359,100  339,535 
Credit loss (recoveries) expense (1,288) (1,331) (611) 271 
Business development expenses 445  794  1,393  1,891 
Executive transition costs 188  387  824  730 
Loss on early extinguishment of debt —  267  —  609 
Gain on early extinguishment of debt on unconsolidated real estate JVs —  (168) —  (168)
Net gain on other investments —  (595) (25) (1,159)
Adjusted EBITDA 93,934  87,787  $ 360,681  $ 341,709 
Pro forma NOI adjustment for property changes within period 1,341  2,704 
Change in collectability of deferred rental revenue (198) — 
In-place adjusted EBITDA $ 95,077  $ 90,491 
Pro forma NOI adjustment from subsequent event transactions N/A (2,903)
Pro forma in-place adjusted EBITDA $ 95,077  $ 87,588 
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures
Tenant improvements and incentives $ 7,850  $ 33,439  $ 74,912  $ 62,952 
Building improvements 14,762  8,468  25,976  29,528 
Leasing costs 2,440  4,389  9,634  11,480 
Net (exclusions from) additions to tenant improvements and incentives (189) (75) (12,170) 2,150 
Excluded building improvements and leasing costs (3,365) (2,938) (4,858) (10,224)
Replacement capital expenditures $ 21,498  $ 43,283  $ 93,494  $ 95,886 
ix


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended December 31, For the Years Ended December 31,
  2023 2022 2023 2022
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA        
Interest expense $ 20,383  $ 16,819  $ 71,142  $ 61,174 
Less: Amortization of deferred financing costs (681) (619) (2,580) (2,297)
Less: Amortization of net debt discounts, net of amounts capitalized (1,004) (615) (2,994) (2,440)
COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and loss on interest rate derivatives 819  423  3,188  1,123 
Scheduled principal amortization 763  864  3,052  3,333 
Capitalized interest 1,028  1,835  4,479  6,709 
Denominator for fixed charge coverage-Adjusted EBITDA $ 21,308  $ 18,707  $ 76,287  $ 67,602 
Reconciliation of net income (loss) to NOI from real estate operations, same property NOI from real estate operations and same property cash NOI from real estate operations
Net income (loss) $ 34,820  $ 52,087  $ (74,347) $ 178,822 
Construction contract and other service revenues (18,167) (24,062) (60,179) (154,632)
Depreciation and other amortization associated with real estate operations 36,735  36,907  148,950  141,230 
Construction contract and other service expenses 17,167  23,454  57,416  149,963 
Impairment losses —  —  252,797  — 
General and administrative expenses 8,240  7,766  31,105  27,461 
Leasing expenses 2,308  2,235  8,932  8,337 
Business development expenses and land carry costs 797  1,157  2,732  3,193 
Interest expense 20,383  16,819  71,142  61,174 
Interest and other income, net (5,659) (4,671) (12,587) (9,070)
Gain on sales of real estate from continuing operations —  (19,238) (49,392) (19,250)
Loss on early extinguishment of debt —  267  —  609 
Equity in loss (income) of unconsolidated entities 240  (229) 261  (1,743)
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in (loss) income of unconsolidated entities 1,671  1,095  6,659  4,327 
Income tax expense 121  223  588  447 
Discontinued operations —  —  —  (29,573)
Revenues from real estate operations from discontinued operations —  —  —  1,980 
Property operating expenses from discontinued operations —  —  —  (971)
NOI from real estate operations 98,656  93,810  384,077  362,304 
Non-Same Property NOI from real estate operations (11,705) (9,015) (39,244) (27,991)
Same Property NOI from real estate operations 86,951  84,795  344,833  334,313 
Straight line rent adjustments and lease incentive amortization 7,947  319  25,631  (2,729)
Amortization of acquired above- and below-market rents (121) (131) (536) (844)
Lease termination fees, net (717) (1,026) (3,745) (2,237)
Tenant funded landlord assets and lease incentives (7,501) (1,068) (25,244) (5,915)
Cash NOI adjustments in unconsolidated real estate JVs (58) (81) (267) (358)
Same Property Cash NOI from real estate operations $ 86,501  $ 82,808  $ 340,672  $ 322,230 

x


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
December 31,
2023		 December 31,
2022
Reconciliation of total assets to adjusted book    
Total assets $ 4,246,966  $ 4,257,275 
Accumulated depreciation 1,400,162  1,267,434 
Accumulated depreciation included in assets held for sale —  6,014 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 228,484  222,779 
COPT Defense’s share of liabilities of unconsolidated real estate JVs 60,583  52,404 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 9,528  6,078 
Less: Property - operating lease liabilities (33,931) (28,759)
Less: Property - finance lease liabilities (415) — 
Less: Cash and cash equivalents (167,820) (12,337)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (852) (456)
Adjusted book $ 5,742,705  $ 5,770,432 

December 31,
2023		 December 31,
2022
Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development
Debt per balance sheet $ 2,416,287  $ 2,231,794 
Net discounts and deferred financing costs 28,713  23,160 
COPT Defense’s share of unconsolidated JV gross debt 52,613  52,100 
Gross debt 2,497,613  2,307,054 
Less: Cash and cash equivalents (167,820) (12,337)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (852) (456)
Net debt 2,328,941  2,294,261 
Costs incurred on fully-leased development properties (53,914) (95,972)
Net debt adjusted for fully-leased development $ 2,275,027  $ 2,198,289 
Net debt $ 2,328,941  $ 2,294,261 
Pro forma debt adjustments from subsequent event transaction proceeds N/A (189,000)
Pro forma net debt 2,328,941  2,105,261 
Costs incurred on fully-leased development properties (53,914) (95,972)
Pro forma net debt adjusted for fully-leased development $ 2,275,027  $ 2,009,289 
xi