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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): April 25, 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 April 25, 2024, COPT Defense Properties (the “Company”) issued a press release relating to its financial results for the period ended March 31, 2024 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: April 25, 2024



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

a2024_q1xcoptdefensexcovera.jpg

COPT Defense Properties
Supplemental Information + Earnings Release - Unaudited
For the Period Ended 3/31/24
waylineofficescolumbiamd_2a.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.

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


MANAGEMENT Stephen E. Budorick, President + CEO INVESTOR RELATIONS Venkat Kommineni, VP
Britt A. Snider, EVP + COO
443.285.5587 | venkat.kommineni@copt.com
Anthony Mifsud, EVP + CFO
Michelle Layne, Manager
443.285.5452 | michelle.layne@copt.com


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


DISCLOSURE STATEMENT
This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology.  Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate.  Although we believe that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, we can give no assurance that these expectations, estimates and projections will be achieved.  Future events and actual results may differ materially from those discussed in the forward-looking statements and we undertake no obligation to update or supplement any forward-looking statements.  The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.
1
COPT Defense Properties
Equity Research Coverage
Firm   Senior 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 410.662.2556 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
SUMMARY OF RESULTS  Refer. 3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Net income (loss) 7 $ 33,671  $ 34,820  $ (221,207) $ 31,642  $ 80,398 
NOI from real estate operations 13 $ 101,657  $ 98,656  $ 96,494  $ 95,024  $ 93,903 
Same Property NOI 17 $ 95,403  $ 94,854  $ 95,039  $ 94,223  $ 92,723 
Same Property cash NOI 18 $ 91,619  $ 89,493  $ 88,793  $ 87,989  $ 86,391 
Adjusted EBITDA 11 $ 95,841  $ 93,934  $ 90,260  $ 89,044  $ 87,443 
FFO per NAREIT 8 $ 72,799  $ 72,360  $ 70,016  $ 70,033  $ 68,816 
Diluted AFFO avail. to common share and unit holders 10 $ 59,269  $ 54,280  $ 64,122  $ 46,003  $ 38,616 
Dividend per common share N/A $ 0.295  $ 0.285  $ 0.285  $ 0.285  $ 0.285 
Per share - diluted:          
EPS 9 $ 0.29  $ 0.30  $ (1.94) $ 0.27  $ 0.70 
FFO - Nareit 9 $ 0.62  $ 0.62  $ 0.60  $ 0.60  $ 0.59 
FFO - as adjusted for comparability 9 $ 0.62  $ 0.62  $ 0.60  $ 0.60  $ 0.59 
Numerators for diluted per share amounts:
Diluted EPS 7 $ 32,480  $ 33,552  $ (217,179) $ 30,138  $ 78,467 
Diluted FFO available to common share and unit holders 8 $ 71,892  $ 70,913  $ 68,512  $ 68,323  $ 67,651 
Diluted FFO available to common share and unit holders, as adjusted for comparability 8 $ 71,969  $ 71,100  $ 68,593  $ 68,569  $ 67,651 

3
COPT Defense Properties
Selected Financial Summary Data (continued)
(in thousands, except ratios)
  Page As of or for Three Months Ended
PAYOUT RATIOS AND CAPITALIZATION Refer. 3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
GAAP
Payout ratio:
Net income N/A 100.7% 93.7% N/A 103.1% 40.6%
Capitalization and debt ratios:
Total assets 6 $ 4,232,895  $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992 
Total equity 6 $ 1,526,046  $ 1,523,755  $ 1,525,873  $ 1,776,695  $ 1,768,814 
Debt per balance sheet 6 $ 2,416,873  $ 2,416,287  $ 2,415,783  $ 2,176,174  $ 2,123,012 
Debt to assets 31 57.1% 56.9% 57.0% 51.2% 50.8%
Net income to interest expense ratio 31 1.6x 1.7x N/A 1.9x 4.9x
Debt to net income ratio 31 17.9x 17.3x N/A 17.2x 6.6x
Non-GAAP
Payout ratios:          
Diluted FFO N/A 46.8% 45.7% 47.3% 47.5% 47.9%
Diluted FFO - as adjusted for comparability N/A 46.7% 45.6% 47.3% 47.3% 47.9%
Diluted AFFO N/A 56.8% 59.7% 50.6% 70.5% 83.9%
Capitalization and debt ratios:        
Total Market Capitalization 28 $ 5,218,681  $ 5,377,815  $ 5,172,058  $ 4,914,516  $ 4,856,761 
Total Equity Market Capitalization 28 $ 2,774,450  $ 2,932,815  $ 2,726,295  $ 2,717,000  $ 2,711,499 
Net debt 36 $ 2,372,747  $ 2,328,941  $ 2,293,005  $ 2,234,633  $ 2,181,408 
Net debt to adjusted book 31 40.9% 40.6% 40.5% 38.4% 38.1%
Adjusted EBITDA fixed charge coverage ratio 31 4.5x 4.4x 4.6x 4.9x 5.0x
Net debt to in-place adj. EBITDA ratio 31 6.1x 6.1x 6.2x 6.3x 6.2x
Net debt adjusted for fully-leased development to in-place adj. EBITDA ratio 31 6.0x 6.0x 5.9x 5.7x 5.8x

4
COPT Defense Properties
Selected Portfolio Data (1)
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
# of Properties
Total Portfolio 201 198 196 194 194
Consolidated Portfolio 177 174 172 170 170
Defense/IT Portfolio 193 190 188 186 186
Same Property 189 189 189 189 189
% Occupied
Total Portfolio 93.6  % 94.2  % 94.1  % 93.4  % 92.8  %
Consolidated Portfolio 92.2  % 92.9  % 92.7  % 91.9  % 91.2  %
Defense/IT Portfolio 95.6  % 96.2  % 95.9  % 95.3  % 94.4  %
Same Property 93.5  % 93.8  % 93.8  % 93.3  % 92.6  %
% Leased
Total Portfolio 94.9  % 95.3  % 95.1  % 94.9  % 95.0  %
Consolidated Portfolio 93.8  % 94.3  % 94.0  % 93.7  % 93.9  %
Defense/IT Portfolio 96.8  % 97.2  % 97.0  % 96.8  % 96.7  %
Same Property 95.0  % 95.1  % 94.9  % 94.7  % 94.9  %
Square Feet (in thousands)
Total Portfolio 24,137 23,859 23,479 23,035 23,020
Consolidated Portfolio 19,841 19,563 19,184 18,740 18,725
Defense/IT Portfolio 21,993 21,719 21,339 20,895 20,878
Same Property 22,227 22,227 22,227 22,227 22,227
(1)Except for the Consolidated Portfolio, includes properties owned through unconsolidated real estate joint ventures (see page 33).

5
COPT Defense Properties
Consolidated Balance Sheets
(in thousands)
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Assets          
Properties, net:          
Operating properties, net $ 3,272,452  $ 3,246,806  $ 3,148,434  $ 3,272,670  $ 3,272,873 
Development and redevelopment in progress, including land (1) 76,931  82,972  141,854  206,130  151,910 
Land held (1) 168,495  173,900  177,909  193,435  189,292 
Total properties, net 3,517,878  3,503,678  3,468,197  3,672,235  3,614,075 
Property - operating right-of-use assets 40,368  41,296  40,487  41,652  42,808 
Cash and cash equivalents 123,144  167,820  204,238  14,273  15,199 
Investment in unconsolidated real estate joint ventures 40,597  41,052  41,495  41,928  42,279 
Accounts receivable, net 50,088  48,946  40,211  47,363  46,149 
Deferred rent receivable 153,788  149,237  142,041  136,382  130,153 
Lease incentives, net 61,150  61,331  60,506  59,541  49,679 
Deferred leasing costs, net 70,902  70,057  68,033  69,218  68,930 
Investing receivables, net 82,523  81,512  87,535  86,708  85,499 
Prepaid expenses and other assets, net 92,457  82,037  86,514  77,046  83,221 
Total assets $ 4,232,895  $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992 
Liabilities and equity          
Liabilities:          
Debt $ 2,416,873  $ 2,416,287  $ 2,415,783  $ 2,176,174  $ 2,123,012 
Accounts payable and accrued expenses 111,981  133,315  135,605  135,784  128,509 
Rents received in advance and security deposits 37,557  35,409  32,063  32,021  34,653 
Dividends and distributions payable 33,906  32,644  32,645  32,636  32,630 
Deferred revenue associated with operating leases 34,019  29,049  24,590  9,199  9,022 
Property - operating lease liabilities 33,141  33,931  32,940  33,923  34,896 
Other liabilities 16,406  18,996  17,936  27,699  21,008 
Total liabilities 2,683,883  2,699,631  2,691,562  2,447,436  2,383,730 
Redeemable noncontrolling interests 22,966  23,580  21,822  22,215  25,448 
Equity:      
COPT Defense’s shareholders’ equity:      
Common shares 1,126  1,126  1,125  1,125  1,125 
Additional paid-in capital 2,487,468  2,489,989  2,489,717  2,486,996  2,484,501 
Cumulative distributions in excess of net income (1,009,964) (1,009,318) (1,010,885) (762,617) (760,820)
Accumulated other comprehensive income 3,849  2,115  6,094  5,224  1,353 
Total COPT Defense’s shareholders’ equity 1,482,479  1,483,912  1,486,051  1,730,728  1,726,159 
Noncontrolling interests in subsidiaries:          
Common units in the Operating Partnership 29,214  25,502  25,337  29,563  29,268 
Other consolidated entities 14,353  14,341  14,485  16,404  13,387 
Total noncontrolling interests in subsidiaries 43,567  39,843  39,822  45,967  42,655 
Total equity 1,526,046  1,523,755  1,525,873  1,776,695  1,768,814 
Total liabilities, redeemable noncontrolling interests and equity $ 4,232,895  $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992 
(1)Refer to pages 25 and 27 for detail.


6
COPT Defense Properties
Consolidated Statements of Operations
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Revenues          
Lease revenue $ 165,433  $ 160,337  $ 155,268  $ 153,682  $ 150,560 
Other property revenue 1,230  1,225  1,339  1,271  1,121 
Construction contract and other service revenues 26,603  18,167  11,949  14,243  15,820 
Total revenues 193,266  179,729  168,556  169,196  167,501 
Operating expenses          
Property operating expenses 66,746  64,577  61,788  61,600  59,420 
Depreciation and amortization associated with real estate operations 38,351  36,735  37,620  37,600  36,995 
Construction contract and other service expenses 26,007  17,167  11,493  13,555  15,201 
Impairment losses —  —  252,797  —  — 
General and administrative expenses 8,378  8,240  7,582  7,287  7,996 
Leasing expenses 2,187  2,308  2,280  2,345  1,999 
Business development expenses and land carry costs 1,182  797  714  726  495 
Total operating expenses 142,851  129,824  374,274  123,113  122,106 
Interest expense (20,767) (20,383) (17,798) (16,519) (16,442)
Interest and other income, net 4,122  5,659  2,529  2,143  2,256 
Gain on sales of real estate —  —  —  14  49,378 
Income (loss) before equity in income (loss) of unconsolidated entities and income taxes 33,770  35,181  (220,987) 31,721  80,587 
Equity in income (loss) of unconsolidated entities 69  (240) (68) 111  (64)
Income tax expense (168) (121) (152) (190) (125)
Net income (loss) 33,671  34,820  (221,207) 31,642  80,398 
Net (income) loss attributable to noncontrolling interests:          
Common units in the Operating Partnership (608) (576) 3,691  (516) (1,293)
Other consolidated entities (454) (592) 1,329  (839) (326)
Net income (loss) attributable to common shareholders $ 32,609  $ 33,652  $ (216,187) $ 30,287  $ 78,779 
Amount allocable to share-based compensation awards (129) (100) (992) (98) (248)
Redeemable noncontrolling interests —  —  —  (51) (64)
Numerator for diluted EPS $ 32,480  $ 33,552  $ (217,179) $ 30,138  $ 78,467 
7
COPT Defense Properties
Funds from Operations
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Net income (loss) $ 33,671  $ 34,820  $ (221,207) $ 31,642  $ 80,398 
Real estate-related depreciation and amortization 38,351  36,735  37,620  37,600  36,995 
Impairment losses on real estate —  —  252,797  —  — 
Gain on sales of real estate —  —  —  (14) (49,378)
Depreciation and amortization on unconsolidated real estate JVs (1) 777  805  806  805  801 
FFO - per Nareit (2) 72,799  72,360  70,016  70,033  68,816 
FFO allocable to other noncontrolling interests (3) (836) (972) (1,059) (1,239) (708)
Basic FFO allocable to share-based compensation awards (587) (513) (481) (480) (466)
Basic FFO available to common share and common unit holders (2) 71,376  70,875  68,476  68,314  67,642 
Redeemable noncontrolling interests 469  —  —  (28) (30)
Diluted FFO adjustments allocable to share-based compensation awards 47  38  36  37  39 
Diluted FFO available to common share and common unit holders - per Nareit (2) 71,892  70,913  68,512  68,323  67,651 
Executive transition costs 77  188  82  248  — 
Diluted FFO comparability adjustments allocable to share-based compensation awards —  (1) (1) (2) — 
Diluted FFO available to common share and common unit holders, as adjusted for comparability (2) $ 71,969  $ 71,100  $ 68,593  $ 68,569  $ 67,651 

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

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

  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
EPS Denominator:          
Weighted average common shares - basic 112,231  112,199  112,196  112,188  112,127 
Dilutive effect of share-based compensation awards 509  432  —  426  410 
Dilutive effect of redeemable noncontrolling interests —  —  —  62  91 
Weighted average common shares - diluted 112,740  112,631  112,196  112,676  112,628 
Diluted EPS $ 0.29  $ 0.30  $ (1.94) $ 0.27  $ 0.70 
Weighted Average Shares for period ended:          
Common shares 112,231  112,199  112,196  112,188  112,127 
Dilutive effect of share-based compensation awards 509  432  429  426  410 
Common units 1,625  1,514  1,520  1,514  1,489 
Redeemable noncontrolling interests 947  —  —  62  91 
Denominator for diluted FFO per share and as adjusted for comparability 115,312  114,145  114,145  114,190  114,117 
Weighted average common units (1,625) (1,514) (1,520) (1,514) (1,489)
Redeemable noncontrolling interests (947) —  —  —  — 
Dilutive effect of additional share-based compensation awards —  —  (429) —  — 
Denominator for diluted EPS 112,740  112,631  112,196  112,676  112,628 
Diluted FFO per share - Nareit (1) $ 0.62  $ 0.62  $ 0.60  $ 0.60  $ 0.59 
Diluted FFO per share - as adjusted for comparability (1) $ 0.62  $ 0.62  $ 0.60  $ 0.60  $ 0.59 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
9
COPT Defense Properties
Adjusted Funds from Operations
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Diluted FFO available to common share and common unit holders, as adjusted for comparability (1) $ 71,969  $ 71,100  $ 68,593  $ 68,569  $ 67,651 
Straight line rent adjustments and lease incentive amortization 3,473  313  12,882  (3,161) (3,516)
Amortization of intangibles and other assets included in NOI 122  26  26  17  (19)
Share-based compensation, net of amounts capitalized 2,645  2,318  2,280  2,213  1,733 
Amortization of deferred financing costs 685  681  639  628  632 
Amortization of net debt discounts, net of amounts capitalized 1,014  1,004  750  622  618 
Replacement capital expenditures (1) (20,776) (21,498) (21,122) (22,664) (28,210)
Other 137  336  74  (221) (273)
Diluted AFFO available to common share and common unit holders (“diluted AFFO”) (1) $ 59,269  $ 54,280  $ 64,122  $ 46,003  $ 38,616 
Replacement capital expenditures (1)          
Tenant improvements and incentives $ 12,776  $ 7,850  $ 14,457  $ 32,619  $ 19,986 
Building improvements 4,953  14,762  6,307  2,766  2,141 
Leasing costs 3,590  2,440  1,902  3,542  1,750 
Net additions to (exclusions from) tenant improvements and incentives 316  (189) (813) (16,007) 4,839 
Excluded building improvements and leasing costs (859) (3,365) (731) (256) (506)
Replacement capital expenditures $ 20,776  $ 21,498  $ 21,122  $ 22,664  $ 28,210 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
10
COPT Defense Properties
EBITDAre + Adjusted EBITDA
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Net income (loss) $ 33,671  $ 34,820  $ (221,207) $ 31,642  $ 80,398 
Interest expense 20,767  20,383  17,798  16,519  16,442 
Income tax expense 168  121  152  190  125 
Real estate-related depreciation and amortization 38,351  36,735  37,620  37,600  36,995 
Other depreciation and amortization 608  619  615  609  602 
Impairment losses on real estate —  —  252,797  —  — 
Gain on sales of real estate —  —  —  (14) (49,378)
Adjustments from unconsolidated real estate JVs 1,671  1,911  1,743  1,559  1,704 
EBITDAre (1) 95,236  94,589  89,518  88,105  86,888 
Credit loss expense (recoveries) 22  (1,288) 372  238  67 
Business development expenses 630  445  313  394  241 
Executive transition costs 430  188  82  307  247 
Net gain on other investments (477) —  (25) —  — 
Adjusted EBITDA (1) 95,841  93,934  90,260  89,044  87,443 
Pro forma NOI adjustment for property changes within period 813  1,341  1,647  56  (318)
Change in collectability of deferred rental revenue —  (198) —  28  899 
In-place adjusted EBITDA (1) $ 96,654  $ 95,077  $ 91,907  $ 89,128  $ 88,024 
(1)Refer to the section entitled “Definitions” for a definition of this measure.

11
COPT Defense Properties
Properties by Segment - 3/31/24
(square feet in thousands)
# of
Properties		 Operational
Square Feet		 % Occupied % Leased
Defense/IT Portfolio:
Fort Meade/Baltimore Washington (“BW”) Corridor:        
National Business Park 34  4,292  99.1% 99.1%
Howard County 36  3,064  91.4% 92.8%
Other 23  1,725  92.9% 96.5%
Total Fort Meade/BW Corridor 93  9,081  95.3% 96.5%
Northern Virginia (“NoVA”) Defense/IT 16  2,500  88.2% 92.6%
Lackland AFB (San Antonio, Texas) 8  1,062  100.0% 100.0%
Navy Support 22  1,273  85.9% 86.2%
Redstone Arsenal (Huntsville, Alabama) 24  2,374  97.4% 98.6%
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 193  21,993  95.6% 96.8%
Other 8  2,144  72.5% 76.1%
Total Portfolio 201  24,137  93.6% 94.9%
Consolidated Portfolio 177  19,841  92.2% 93.8%
(1)See page 33 for additional disclosure regarding our unconsolidated real estate JVs.

chart-27d7ef8e584e420ba80a.jpgchart-0159efe4f31d4dd98d7a.jpg
(2)Refer to the section entitled “Definitions” for a definition of this measure.
12
COPT Defense Properties
Consolidated Real Estate Revenues + NOI by Segment
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Consolidated real estate revenues          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 78,068  $ 74,758  $ 73,350  $ 72,176  $ 69,777 
NoVA Defense/IT 21,426  20,410  20,333  19,841  19,829 
Lackland Air Force Base 16,411  17,861  16,193  17,595  15,605 
Navy Support 8,226  8,405  8,190  8,118  7,925 
Redstone Arsenal 16,808  14,971  13,768  12,978  13,414 
Data Center Shells-Consolidated 8,457  7,654  6,811  6,287  6,692 
Total Defense/IT Portfolio 149,396  144,059  138,645  136,995  133,242 
Other 17,267  17,503  17,962  17,958  18,439 
Consolidated real estate revenues (1) $ 166,663  $ 161,562  $ 156,607  $ 154,953  $ 151,681 
NOI from real estate operations (2)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 50,178  $ 48,894  $ 48,134  $ 47,988  $ 45,257 
NoVA Defense/IT 12,164  11,972  12,433  12,158  12,257 
Lackland Air Force Base 7,723  7,708  7,626  7,644  7,660 
Navy Support 4,600  4,783  4,257  4,602  4,382 
Redstone Arsenal 11,016  10,157  8,820  8,228  8,778 
Data Center Shells:
Consolidated properties 7,514  6,966  6,133  5,544  6,098 
COPT Defense’s share of unconsolidated real estate JVs 1,740  1,671  1,675  1,671  1,642 
Total Defense/IT Portfolio 94,935  92,151  89,078  87,835  86,074 
Other 6,722  6,505  7,416  7,189  7,829 
NOI from real estate operations (1) $ 101,657  $ 98,656  $ 96,494  $ 95,024  $ 93,903 
(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
13
COPT Defense Properties
Cash NOI by Segment
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Cash NOI from real estate operations (1)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 47,117  $ 46,173  $ 45,513  $ 45,727  $ 43,662 
NoVA Defense/IT 12,933  12,881  12,765  12,642  11,423 
Lackland Air Force Base 8,186  8,114  7,913  7,919  7,915 
Navy Support 4,503  5,008  4,621  4,911  5,023 
Redstone Arsenal 6,308  4,869  4,861  3,707  4,988 
Data Center Shells:
Consolidated properties 6,688  5,868  4,904  4,918  5,379 
COPT Defense’s share of unconsolidated real estate JVs 1,477  1,400  1,396  1,385  1,351 
Total Defense/IT Portfolio 87,212  84,313  81,973  81,209  79,741 
Other 6,723  6,536  7,400  7,350  7,583 
Cash NOI from real estate operations (2) $ 93,935  $ 90,849  $ 89,373  $ 88,559  $ 87,324 
(1)Refer to the section entitled “Definitions” for a definition of this measure.
(2)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
chart-969b2ac8899c4921ac7a.jpgchart-8983d6428ea547218a9a.jpg

14
COPT Defense Properties
NOI from Real Estate Operations + Occupancy by Property Grouping - 3/31/24
(dollars and square feet in thousands)
  As of Period 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
Defense/IT Portfolio:
Same Property: (2)
Consolidated properties 160  16,536  94.8% 96.4% $ 553,073  84.4  % $ 87,587 
Unconsolidated real estate JV 21  3,547  100.0% 100.0% 5,821  0.9  % 1,301 
Total Same Property in Defense/IT Portfolio 181  20,083  95.8% 97.0% 558,894  85.3  % 88,888 
Properties Placed in Service (4) 8  960  97.8% 97.8% 24,976  3.8  % 5,532 
Other unconsolidated JV properties (5) 3  748  100.0% 100.0% 1,360  0.2  % 444 
Acquired property (6) 1  202  55.6% 55.6% 4,070  0.6  % 71 
Total Defense/IT Portfolio 193  21,993  95.6% 96.8% 589,300  90.0  % 94,935 
Other 8  2,144  72.5% 76.1% 65,622  10.0  % 6,722 
Total Portfolio 201  24,137  93.6% 94.9% $ 654,922  100.0  % $ 101,657 
Consolidated Portfolio 177  19,841  92.2% 93.8% $ 647,741  98.9  % $ 99,917 
(1)Percentages calculated based on operational square feet.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
(3)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.
(4)Newly developed or redeveloped properties placed in service that were not fully operational by 1/1/23.
(5)Includes three data center shell properties in which we sold ownership interests and retained 10% interests through unconsolidated real estate JVs in 2023.
(6)Includes an office property acquired on 3/15/24.

15
COPT Defense Properties
Same Property (1) Average Occupancy Rates by Segment 
(square feet in thousands)
  # of Properties Operational Square Feet Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Defense/IT Portfolio:
Fort Meade/BW Corridor 91  8,693  96.2  % 96.2  % 95.8  % 94.8  % 93.0  %
NoVA Defense/IT 16  2,500  87.9  % 88.5  % 89.8  % 89.9  % 90.6  %
Lackland Air Force Base 8  1,062  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Navy Support 21  1,244  85.6  % 87.8  % 87.2  % 87.6  % 88.9  %
Redstone Arsenal 20  2,049  97.7  % 97.4  % 93.5  % 90.6  % 89.7  %
Data Center Shells:
Consolidated properties 4  988  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Unconsolidated JV properties 21  3,547  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Total Defense/IT Portfolio 181  20,083  95.7  % 95.9  % 95.5  % 94.8  % 94.1  %
Other 8  2,144  72.0  % 73.9  % 75.2  % 75.0  % 78.6  %
Total Same Property 189  22,227  93.4  % 93.8  % 93.5  % 92.9  % 92.6  %

Same Property (1) Period End Occupancy Rates by Segment 
(square feet in thousands)
# of Properties Operational Square Feet
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Defense/IT Portfolio:
Fort Meade/BW Corridor 91  8,693  96.1  % 96.3  % 96.1  % 95.4  % 93.4  %
NoVA Defense/IT 16  2,500  88.2  % 88.9  % 89.5  % 89.9  % 90.7  %
Lackland Air Force Base 8  1,062  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Navy Support 21  1,244  86.4  % 88.0  % 87.4  % 87.4  % 88.4  %
Redstone Arsenal 20  2,049  97.5  % 97.7  % 95.7  % 92.3  % 89.7  %
Data Center Shells:
Consolidated properties 4  988  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Unconsolidated JV properties 21  3,547  100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Total Defense/IT Portfolio 181  20,083  95.8  % 96.0  % 95.8  % 95.2  % 94.2  %
Other 8  2,144  72.5  % 73.2  % 75.4  % 74.9  % 77.6  %
Total Same Property 189  22,227  93.5  % 93.8  % 93.8  % 93.3  % 92.6  %
(1)Includes properties stably owned and 100% operational since at least 1/1/23.

16
COPT Defense Properties
Same Property Real Estate Revenues + NOI by Segment
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Same Property real estate revenues          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 76,082  $ 74,008  $ 73,350  $ 72,177  $ 69,769 
NoVA Defense/IT 21,426  20,411  20,333  19,840  19,829 
Lackland Air Force Base 16,411  17,860  16,193  17,596  15,605 
Navy Support 8,073  8,251  8,035  7,964  7,771 
Redstone Arsenal 14,311  13,861  13,520  12,820  13,292 
Data Center Shells-Consolidated 6,427  6,186  6,205  6,285  6,293 
Total Defense/IT Portfolio 142,730  140,577  137,636  136,682  132,559 
Other 15,262  15,500  15,953  15,964  16,790 
Same Property real estate revenues $ 157,992  $ 156,077  $ 153,589  $ 152,646  $ 149,349 
Same Property NOI from real estate operations (“NOI”)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 48,330  $ 48,239  $ 48,134  $ 47,988  $ 45,257 
NoVA Defense/IT 12,164  11,972  12,433  12,158  12,257 
Lackland Air Force Base 7,723  7,708  7,625  7,645  7,660 
Navy Support 4,522  4,702  4,177  4,510  4,293 
Redstone Arsenal 9,321  9,148  8,665  8,134  8,682 
Data Center Shells:
Consolidated properties 5,527  5,538  5,539  5,544  5,753 
COPT Defense’s share of unconsolidated real estate JVs 1,301  1,233  1,236  1,232  1,245 
Total Defense/IT Portfolio 88,888  88,540  87,809  87,211  85,147 
Other 6,515  6,314  7,230  7,012  7,576 
Same Property NOI (1) $ 95,403  $ 94,854  $ 95,039  $ 94,223  $ 92,723 
(1)Refer to the section entitled “Supplementary Reconciliations of Non-GAAP Measures” for reconciliation.



17
COPT Defense Properties
Same Property Cash NOI by Segment
(dollars in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Same Property cash NOI from real estate operations (“cash NOI”)          
Defense/IT Portfolio:
Fort Meade/BW Corridor $ 47,052  $ 46,267  $ 45,513  $ 45,727  $ 43,662 
NoVA Defense/IT 12,933  12,882  12,764  12,642  11,423 
Lackland Air Force Base 8,186  8,114  7,913  7,919  7,915 
Navy Support 4,429  4,932  4,545  4,825  4,940 
Redstone Arsenal 6,412  4,966  4,953  3,771  5,015 
Data Center Shells:
Consolidated properties 4,984  4,960  4,865  4,918  5,101 
COPT Defense’s share of unconsolidated real estate JVs 1,183  1,108  1,106  1,095  1,092 
Total Defense/IT Portfolio 85,179  83,229  81,659  80,897  79,148 
Other 6,440  6,264  7,134  7,092  7,243 
Same Property cash NOI (1) $ 91,619  $ 89,493  $ 88,793  $ 87,989  $ 86,391 
Percentage change in total Same Property cash NOI (1)(2) 6.1%
Percentage change in Defense/IT Portfolio Same Property cash NOI (2) 7.6%

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

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18
COPT Defense Properties
Leasing (1)(2)
Three Months Ended 3/31/24
(square feet in thousands)
Defense/IT Portfolio
  Ft Meade/BW Corridor NoVA Defense/IT Navy Support Redstone Arsenal Total Defense/IT Portfolio Other  Total
Renewed Space        
Leased Square Feet 227  116  80  85  509  42  551 
Expiring Square Feet 272  127  125  89  613  93  706 
Vacating Square Feet 45  11  45  4  105  51  155 
Retention Rate (% based upon square feet) 83.5  % 91.5  % 64.1  % 95.3  % 82.9  % 45.6  % 78.0  %
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 2.89  $ 5.77  $ 0.63  $ 0.19  $ 2.75  $ 3.10  $ 2.77 
Weighted Average Lease Term in Years 4.2  4.8  3.1  2.0  3.8  7.9  4.1 
Straight-line Rent Per Square Foot
Renewal Straight-line Rent $ 32.58  $ 34.91  $ 28.89  $ 26.03  $ 31.44  $ 32.07  $ 31.49 
Expiring Straight-line Rent $ 30.44  $ 37.87  $ 24.78  $ 25.11  $ 30.36  $ 30.35  $ 30.36 
Change in Straight-line Rent 7.0  % (7.8  %) 16.6  % 3.6  % 3.6  % 5.7  % 3.7  %
Cash Rent Per Square Foot
Renewal Cash Rent $ 32.20  $ 37.16  $ 28.71  $ 25.82  $ 31.72  $ 30.83  $ 31.65 
Expiring Cash Rent $ 32.62  $ 39.79  $ 27.97  $ 25.45  $ 32.34  $ 33.93  $ 32.46 
Change in Cash Rent (1.3  %) (6.6  %) 2.6  % 1.4  % (1.9  %) (9.2  %) (2.5  %)
Compound Annual Growth Rate 2.4  % 1.4  % 2.5  % 1.7  % 2.1  % 2.2  % 2.1  %
Average Escalations Per Year 2.7  % 2.5  % 2.6  % 2.5  % 2.6  % 1.1  % 2.4  %
New Leases
Development and Redevelopment Space
Leased Square Feet —  —  —  10  10  —  10 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ —  $ —  $ —  $ 3.14  $ 3.14  $ —  $ 3.14 
Weighted Average Lease Term in Years —  —  —  5.3  5.3  —  5.3 
Straight-line Rent Per Square Foot $ —  $ —  $ —  $ 23.81  $ 23.81  $ —  $ 23.81 
Cash Rent Per Square Foot $ —  $ —  $ —  $ 23.50  $ 23.50  $ —  $ 23.50 
Vacant Space
Leased Square Feet 80  20  13  —  113  47  160 
Statistics for Completed Leasing:
Per Annum Average Committed Cost per Square Foot $ 9.23  $ 9.12  $ 4.64  $ —  $ 8.68  $ 6.14  $ 7.93 
Weighted Average Lease Term in Years 8.8  9.5  5.1  —  8.5  7.4  8.2 
Straight-line Rent Per Square Foot $ 32.09  $ 33.17  $ 25.29  $ —  $ 31.50  $ 28.03  $ 30.48 
Cash Rent Per Square Foot $ 30.77  $ 34.40  $ 25.96  $ —  $ 30.85  $ 28.15  $ 30.05 
Total Square Feet Leased 307  136  93  95  632  89  721 
Average Escalations Per Year 2.6  % 2.6  % 2.6  % 2.6  % 2.6  % 1.9  % 2.5  %
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
Lease Expiration Analysis as of 3/31/24 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Year of Expiration (2) Square Footage of Leases 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 1,145  $ 47,852  8.1  % $ 41.75 
NoVA Defense/IT 130  3,987  0.7  % 30.71 
Navy Support 234  6,275  1.1  % 26.79 
Redstone Arsenal 49  1,019  0.2  % 20.81 
Data Center Shells-Unconsolidated JV Properties 310  444  0.1  % 14.31 
2024 1,868  59,577  10.1  % 37.47 
Ft Meade/BW Corridor 1,870  71,284  12.1  % 38.06 
NoVA Defense/IT 281  11,849  2.0  % 42.21 
Lackland Air Force Base 703  39,803  6.8  % 56.64 
Navy Support 212  4,968  0.8  % 23.41 
Redstone Arsenal 288  6,860  1.2  % 23.82 
Data Center Shells-Unconsolidated JV Properties 121  175  —  % 14.48 
2025 3,475  134,939  22.9  % 40.06 
Ft Meade/BW Corridor 938  37,545  6.4  % 40.02 
NoVA Defense/IT 66  2,250  0.4  % 33.84 
Lackland Air Force Base 250  12,793  2.2  % 51.17 
Navy Support 193  6,722  1.1  % 34.77 
Redstone Arsenal 105  3,021  0.5  % 28.71 
Data Center Shells-Unconsolidated JV Properties 446  814  0.1  % 18.26 
2026 1,998  63,146  10.7  % 39.52 
Ft Meade/BW Corridor 793  29,477  5.0  % 37.18 
NoVA Defense/IT 190  6,443  1.1  % 33.86 
Navy Support 212  8,231  1.4  % 38.80 
Redstone Arsenal 163  4,394  0.7  % 26.94 
Data Center Shells-Unconsolidated JV Properties 364  518  0.1  % 14.23 
2027 1,722  49,063  8.3  % 35.18 
Ft Meade/BW Corridor 1,421  48,015  8.1  % 33.76 
NoVA Defense/IT 211  7,170  1.2  % 33.93 
Navy Support 54  1,462  0.2  % 27.31 
Data Center Shells-Unconsolidated JV Properties 515  867  0.1  % 16.82 
2028 2,201  57,515  9.8  % 33.08 
Thereafter
Consolidated Properties 7,227  220,697  37.5  % 29.81 
Unconsolidated JV Properties 2,539  4,363  0.7  % 17.18 
Total Defense/IT Portfolio 21,030  $ 589,300  100.0  % $ 34.01 
20
COPT Defense Properties
Lease Expiration Analysis as of 3/31/24 (1) (continued)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Year of Expiration (2) Square Footage of Leases 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 21,030  $ 589,300  90.0  % $ 34.01 
Other
         2024 44  1,547  0.2  % 34.05 
         2025 173  11,027  1.7  % 29.40 
         2026 164  5,995  0.9  % 36.47 
         2027 124  4,622  0.7  % 36.93 
         2028 243  8,951  1.4  % 36.73 
Thereafter 806  33,480  5.1  % 41.33 
Total Other 1,554  65,622  10.0  % 38.21 
Total Portfolio 22,584  $ 654,922  100.0  % $ 34.36 
Consolidated Portfolio 18,289  $ 647,741 
Unconsolidated JV Properties 4,295  $ 7,181 
Note: As of 3/31/24, the weighted average lease term was 5.2 years for both the Defense/IT and total portfolio and 5.1 years for the consolidated portfolio.

(1)This expiration analysis reflects consolidated and unconsolidated properties and includes the effect of early renewals completed on existing leases but excludes the effect of new tenant leases on square feet yet to commence as of 3/31/24. With regard to properties owned through unconsolidated real estate joint ventures, the amounts reported above reflect 100% of the properties’ square footage but only reflect the portion of Annualized Rental Revenue that was allocable to COPT Defense’s ownership interest.
(2)The year of lease expiration is based on the lease term determined in accordance with GAAP.
(3)Refer to the section entitled “Definitions” for a definition of annualized rental revenue.
chart-a7d117fb98c14760a9ea.jpg
21
COPT Defense Properties
2024 Defense/IT Portfolio Quarterly Lease Expiration Analysis as of 3/31/24 (1)
(dollars and square feet in thousands, except per square foot amounts)
Segment of Lease and Quarter of Expiration (2) Square Footage of Leases 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 663  $ 27,421  4.7  % $ 41.38 
NoVA Defense/IT 89  3,006  0.5  % 33.77 
Navy Support 21  630  0.1  % 29.64 
Redstone Arsenal 31  550  0.1  % 17.72 
Q2 2024 804  31,607  5.4  % 39.32 
Ft Meade/BW Corridor 240  8,605  1.5  % 35.73 
NoVA Defense/IT 30  630  0.1  % 20.72 
Navy Support 97  2,233  0.4  % 23.07 
Data Center Shells-Unconsolidated JV Properties 310  444  0.1  % 14.31 
Q3 2024 677  11,912  2.1  % 29.84 
Ft Meade/BW Corridor 243  11,826  2.0  % 48.73 
NoVA Defense/IT 10  351  0.1  % 33.78 
Navy Support 116  3,412  0.6  % 29.37 
Redstone Arsenal 18  469  0.1  % 26.15 
Q4 2024 387  16,058  2.8  % 41.47 
1,868  $ 59,577  10.1  % $ 37.47 
(1)This expiration analysis reflects consolidated and unconsolidated properties and includes the effect of early renewals completed on existing leases but excludes the effect of new tenant leases on square feet yet to commence as of 3/31/24.
(2)The period of lease expiration is based on the lease term determined in accordance with GAAP.
(3)Refer to the section entitled “Definitions” for a definition of annualized rental revenue.

22
COPT Defense Properties
Top 20 Tenants as of 3/31/24 (1)
(dollars and square feet in thousands)
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) $ 232,891  35.6  % 5,529  3.5 
Fortune 100 Company 57,542  8.8  % 6,182  7.9 
General Dynamics Corporation 32,844  5.0  % 703  3.6 
Northrop Grumman Corporation 15,048  2.3  % 519  5.5 
The Boeing Company 14,701  2.2  % 443  2.7 
CACI International Inc   13,166  2.0  % 327  4.2 
Peraton Corp.   12,858  2.0  % 330  4.5 
Booz Allen Hamilton, Inc.   12,103  1.8  % 297  1.9 
Fortune 100 Company   11,752  1.8  % 183  10.5 
Morrison & Foerster, LLP   9,631  1.5  % 102  13.0 
CareFirst, Inc. 9,067  1.4  % 264  10.4 
KBR, Inc.   7,843  1.2  % 309  9.1 
Yulista Holding, LLC   7,088  1.1  % 368  5.7 
AT&T Corporation   6,774  1.0  % 321  5.5 
Mantech International Corp.   6,584  1.0  % 200  1.5 
Jacobs Solutions Inc.   6,474  1.0  % 185  5.2 
Wells Fargo & Company   6,270  1.0  % 145  4.4 
The University System of Maryland   6,054  0.9  % 172  5.8 
Lockheed Martin Corporation   5,712  0.9  % 194  6.0 
The Mitre Corporation   5,406  0.8  % 152  2.2 
Subtotal Top 20 Tenants   479,808  73.3  % 16,925  5.6 
All remaining tenants   175,114  26.7  % 5,659  4.1 
Total / Weighted Average   $ 654,922  100.0  % 22,584  5.2 

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






23
COPT Defense Properties
Operating Property Acquisition
(square feet in thousands)
Property Property Segment/Sub-Segment Location # of Properties Operational Square Feet Transaction
Date		 % Occupied on Transaction Date Transaction
Value
(in millions)
6841 Benjamin Franklin Drive Fort Meade/BW Corridor Columbia, Maryland 1 202 3/15/24 55.6% $ 15 

24
COPT Defense Properties
Summary of Development Projects as of 3/31/24 (1)
(dollars and square feet in thousands) 
Total Rentable Square Feet
% Leased as of 3/31/24
as of 3/31/24 (2)
 Actual or Anticipated Shell Completion Date  Anticipated Operational Date (3)
Anticipated Total Cost Cost to Date Cost to Date Placed in Service
Property and Segment/Sub-Segment Location
Defense/IT Portfolio:
Fort Meade/BW Corridor:
400 National Business Parkway Annapolis Junction, Maryland 138  0% $ 65,100  $ 12,776  $ —  1Q 25 1Q 26
Redstone Arsenal:
8100 Rideout Road (4) Huntsville, Alabama 128  42% 45,991  33,085  11,723  3Q 23 3Q 24
9700 Advanced Gateway Huntsville, Alabama 50  20% 11,000  161  —  1Q 25 1Q 26
Subtotal / Average 178  35% 56,991  33,246  11,723 
Data Center Shells:
Southpoint Phase 2 Bldg A Northern Virginia 225  100% 82,500  27,222  —  3Q 24 3Q 24
Southpoint Phase 2 Bldg B Northern Virginia 193  100% 65,000  5,410  —  3Q 25 3Q 25
MP 3 Northern Virginia 225  100% 111,800  10,402  —  4Q 25 4Q 25
Data Center Shells Subtotal / Average 643  100% 259,300  43,034  — 
Total Defense/IT Portfolio Under Development 959  74% $ 381,391  $ 89,056  $ 11,723     
(1)Includes properties under, or contractually committed for, development as of 3/31/24.
(2)Cost includes land, development, leasing costs and allocated portion of structured parking and other shared infrastructure, if applicable.
(3)Anticipated operational date is the earlier of the estimated date when leases have commenced on 100% of a property’s space or one year from the cessation of major construction activities.
(4)Although classified as under development, 27,000 square feet were operational as of 3/31/24.




25
COPT Defense Properties
Development Placed in Service as of 3/31/24
(square feet in thousands)
 
Square Feet Placed in Service
Total Space Placed in Service % Leased as of 3/31/24
Total Property
Property Segment/Sub-Segment
% Leased as of 3/31/24
 Rentable Square Feet 2024
Property and Location 1st Quarter
5300 Redstone Gateway
Huntsville, Alabama
 Redstone Arsenal 100% 46  46  100%
8100 Rideout Road
Huntsville, Alabama
 Redstone Arsenal 42% 128  27  100%
Total Development Placed in Service 57% 174  73  100%
% Leased as of 3/31/24
 100%

26
COPT Defense Properties
Summary of Land Owned/Controlled as of 3/31/24 (1)
(dollars and square feet in thousands)
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 1,483
Howard County 19 290
Other 126 1,338
Total Fort Meade/BW Corridor 289   3,111
NoVA Defense/IT 29   1,171
Navy Support 38 64
Redstone Arsenal (2) 295 3,350
Total Defense/IT Portfolio land owned/controlled for future development 651 7,696 $ 158,839 
Other land owned/controlled 53   1,538 9,656 
Land held, net 704 9,234 $ 168,495 

(1)This land inventory schedule includes properties under ground lease to us and excludes all properties listed as development as detailed on page 25. The costs associated with the land included on this summary are reported on our consolidated balance sheet in the line entitled “land held.”
(2)This land is controlled under a long-term master lease agreement to LW Redstone Company, LLC, a consolidated JV (see page 32). As this land is developed in the future, the JV will execute site-specific leases under the master lease agreement. Lease payments will commence under the site-specific leases as cash rents under tenant leases commence at the respective properties.
27
COPT Defense Properties
Capitalization Overview
(dollars, shares and units in thousands)
Wtd. Avg. Maturity (Years) (1) Stated Rate Effective Rate
(2)(3)
Amount Outstanding at 3/31/24
Debt
Secured debt 1.4 5.04  % 3.54  % $ 98,820 
Unsecured debt 5.6 3.26  % 3.34  % 2,345,411 
Total Consolidated Debt 5.4 3.33  % 3.34  % $ 2,444,231 
Fixed-rate debt (3) 5.6 2.98  % 3.34  % $ 2,444,231 
Variable-rate debt (3) 3.4 6.67  % N/A — 
Total Consolidated Debt $ 2,444,231 
Common Equity
Common Shares 112,641 
Common Units (4) 2,148 
Total Common Shares and Units 114,789 
Closing Common Share Price on 3/28/24
 $ 24.17 
Equity Market Capitalization (5) $ 2,774,450 
Total Market Capitalization (5) $ 5,218,681 
(1)Calculated assuming exercise of extension options on our Revolving Credit Facility and term loan.
(2)Excludes the effect of deferred financing cost amortization.
(3)Includes the effect of interest rate swaps with notional amounts totaling $233.0 million that hedge the risk of changes in interest rates on variable-rate debt. We had swaps in place for all of our variable-rate debt balances as of 3/31/24.
(4)Includes certain unvested share-based compensation awards in the form of profit interest units.
(5)Refer to the section entitled “Definitions” for a definition of this measure.











Investment Grade Ratings & Outlook Latest Report
Fitch BBB- Stable 11/22/23
Moody’s Baa3 Stable 1/22/24
S&P BBB- Stable 9/7/23
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28
COPT Defense Properties
Summary of Outstanding Debt as of 3/31/24
(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) $ 27,865  $ 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%		 22,400  $ 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% 37,975  $ 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%		 10,580  $ 10,020  Aug-26
Unsecured Bank Term Loans Total Secured Debt 5.04% $ 98,820 
2026 Maturity SOFR+
0.10%+1.30%		 $ 125,000  Jan-26 (2)(7)
Other Unsecured Debt 0.00% 411  May-26
Total Unsecured Debt 3.26% $ 2,345,411 
Debt Summary
Total Unsecured Debt 3.26% $ 2,345,411 
Total Secured Debt 5.04% 98,820 
Consolidated Debt 3.33% $ 2,444,231 
Debt per balance sheet $ 2,416,873 
Net discounts and deferred financing costs 27,358 
Consolidated Debt 2,444,231 
COPT Defense’s share of unconsolidated JV gross debt (8) 52,819 
Gross debt $ 2,497,050 
(1)The Company’s $600.0 million Revolving Credit Facility matures in October 2026 and may be extended by two six-month periods at our option.
(2)Pre-payable anytime without penalty.
(3)These properties are owned through consolidated joint ventures.
(4)Represents the weighted average rate of three loans on the properties.
(5)These notes are due in 2028 unless earlier exchanged, redeemed or repurchased only in the event of certain circumstances and during certain periods defined under the terms of the notes. Upon exchange of the notes, the principal amount of notes exchanged is payable in cash, with the remainder of the exchange obligation, if any, payable in cash, common shares or a combination thereof at our election.
(6)The loan maturity may be extended for two one-year periods, provided certain conditions are met.
(7)The Company’s term loan matures in January 2026 and may be extended by two 12-month periods at our option.
(8)See page 33 for additional disclosure regarding our unconsolidated real estate joint ventures.

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

chart-2eac257542c94ec1ad8a.jpg
chart-a10e1aa33cc44d03a48a.jpgchart-01ac7d8e4bb4484baa6a.jpg
(1)Revolving Credit Facility maturity of $75.0 million is included above in 2027 assuming our exercise of two six-month extension options.
(2)Term loan balance of $125.0 million is included in 2028 assuming our exercise of two 12-month extension options. Also includes $345.0 million principal amount of exchangeable senior notes due in 2028 unless earlier exchanged, redeemed or repurchased only in the event of certain circumstances and during certain periods defined under the terms of the notes.
(3)Includes the effect of interest rate swaps with notional amounts totaling $233.0 million that hedge the risk of changes in interest rates on variable-rate debt.
30
COPT Defense Properties
Debt Analysis
(dollars and square feet in thousands)
As of and for Three Months Ended
3/31/24
As of and for Three Months Ended
3/31/24
Senior Note Covenants (1) Required Line of Credit & Term Loan Covenants (1)(2) Required
Total Debt / Total Assets < 60% 42.5% Total Debt / Total Assets < 60% 38.3%
Secured Debt / Total Assets < 40% 1.7% Secured Debt / Total Assets < 40% 2.0%
Debt Service Coverage > 1.5x 4.3x Adjusted EBITDA / Fixed Charges > 1.5x 4.6x
Unencumbered Assets / Unsecured Debt > 150% 234.3% Unsecured Debt / Unencumbered Assets < 60% 38.0%
Unencumbered Adjusted NOI / Unsecured Interest Expense > 1.75x 4.6x
Debt Ratios Page Refer. Unencumbered Portfolio Analysis
GAAP # of unencumbered properties 173 
Debt per balance sheet 6 $ 2,416,873  % of total portfolio 86  %
Total assets 6 $ 4,232,895  Unencumbered square feet in-service 20,124 
Debt to assets 57.1  % % of total portfolio 83  %
Net income 7 $ 33,671  NOI from unencumbered real estate operations $ 97,073 
Debt to net income ratio (2) 17.9  x % of total NOI from real estate operations 95  %
Interest expense 7 $ 20,767  Adjusted EBITDA from unencumbered real estate operations $ 91,257 
Net income to interest expense ratio (2) 1.6  x % of total adjusted EBITDA from real estate operations 95  %
Unencumbered adjusted book $ 5,528,468 
Non-GAAP % of total adjusted book 95  %
Net debt 36 $ 2,372,747 
Adjusted book 36 $ 5,806,374 
Net debt to adjusted book 40.9  %
Net debt adj. for fully-leased development 36 $ 2,329,713 
In-place adjusted EBITDA 11 $ 96,654 
Net debt to in-place adjusted EBITDA ratio 6.1  x
Net debt adj. for fully-leased devel. to in-place adj. EBITDA ratio 6.0  x
Denominator for debt service coverage 35 $ 20,641 
Denominator for fixed charge coverage 35 $ 21,230 
Adjusted EBITDA 11 $ 95,841 
Adjusted EBITDA debt service coverage ratio 4.6  x
Adjusted EBITDA fixed charge coverage ratio 4.5  x
(1)The covenants are calculated as defined in the applicable agreements, and the calculations differ between those agreements.
(2)Refer to the section entitled “Definitions” for a definition of this measure.
31
COPT Defense Properties
Consolidated Real Estate Joint Ventures as of 3/31/24
(dollars and square feet in thousands)

NOI from Real Estate Operations (1) Venture Level Debt Outstanding (3) COPT Defense Nominal
Ownership %
Operating Properties Operational
Square Feet		 % Occupied % Leased Three Months Ended Total Assets (2)
Suburban Maryland:            
M Square Associates, LLC (4 properties)
 414  88.8% 95.5% $ 1,565  $ 92,514  $ 48,555  50%
Huntsville, Alabama:
LW Redstone Company, LLC (23 properties)
 2,237  98.0% 99.2% 10,660  593,434  50,265  85% (4)
Washington, D.C.:
Stevens Place (1 property)
 188  60.6% 83.5% 1,255  130,123  —  95%
Total / Average 2,839  94.2% 97.7% $ 13,480  $ 816,071  $ 98,820 
 
        
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  $ 5,942  $ —  50%
Huntsville, Alabama:        
Redstone Gateway (5) 3,501  130,075  —  85% (3)
Total 3,849  $ 136,017  $ —   
 
(1)Represents NOI from real estate operations of the JV operating properties before allocation to JV partners.
(2)Total assets includes the assets of the consolidated JV plus any outside investment basis.
(3)Excludes debt from us to the JV, which is eliminated in the presentation of our consolidated financial statements.
(4)Our partner receives an annual priority return of 13.5% on its $9.0 million in contributed equity, plus certain fees for leasing and development, and we expect to receive all other distributions from the JV.
(5)Total assets include $78.0 million in notes receivable due from the City of Huntsville (including accrued interest and excluding allowance for credit losses) in connection with infrastructure costs funded by the JV.
32
COPT Defense Properties
Unconsolidated Real Estate Joint Ventures as of 3/31/24 (1)
(dollars and square feet in thousands) 
Joint venture information
COPT Defense ownership %
 10  %
COPT Defense’s investment
 $ 37,615  (2)
# of Properties 24 
Square Feet 4,295 
% Occupied 100  %
COPT Defense’s share of ARR $ 7,181 
Balance sheet information Total COPT Defense’s Share (4)
Operating properties, net $ 953,549  $ 95,355 
Total assets $ 1,052,588  $ 105,259 
Debt (3) $ 524,949  $ 52,495 
Total liabilities $ 609,039  $ 60,904 
Three Months Ended
Operating information Total COPT Defense’s Share (4)
Revenue $ 20,891  $ 2,089 
Operating expenses (3,492) (349)
NOI from real estate operations and EBITDAre (5) 17,399  1,740 
Interest expense (8,933) (893)
Depreciation and amortization (8,238) (778)
Net income $ 228  $ 69 
NOI from real estate operations (per above) (5) $ 17,399  $ 1,740 
Straight line rent adjustments (637) (64)
Amortization of acquired above- and below-market rents (1,988) (199)
Cash NOI from real estate operations (5) $ 14,774  $ 1,477 
(1)Includes equity method investments in five JVs that own and operate data center shell properties.
(2)Includes $40.6 million reported in “Investment in unconsolidated real estate joint ventures” and $3.0 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheet.
(3)Maturities on JV debt range from 2027 (assuming exercise of three one-year extension options) to 2030.
(4)Represents the portion allocable to our ownership interest.
(5)Refer to the section entitled “Definitions” for definitions of these measures.



33
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Net income (loss) $ 33,671  $ 34,820  $ (221,207) $ 31,642  $ 80,398 
Construction contract and other service revenues (26,603) (18,167) (11,949) (14,243) (15,820)
Depreciation and other amortization associated with real estate operations 38,351  36,735  37,620  37,600  36,995 
Construction contract and other service expenses 26,007  17,167  11,493  13,555  15,201 
Impairment losses —  —  252,797  —  — 
General and administrative expenses 8,378  8,240  7,582  7,287  7,996 
Leasing expenses 2,187  2,308  2,280  2,345  1,999 
Business development expenses and land carry costs 1,182  797  714  726  495 
Interest expense 20,767  20,383  17,798  16,519  16,442 
Interest and other income, net (4,122) (5,659) (2,529) (2,143) (2,256)
Gain on sales of real estate —  —  —  (14) (49,378)
Equity in (income) loss of unconsolidated entities (69) 240  68  (111) 64 
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities (1) 1,740  1,671  1,675  1,671  1,642 
Income tax expense 168  121  152  190  125 
NOI from real estate operations 101,657  98,656  96,494  95,024  93,903 
Straight line rent adjustments and lease incentive amortization 3,632  703  13,262  (2,916) (3,818)
Amortization of acquired above- and below-market rents (24) (121) (120) (129) (166)
Amortization of intangibles and other assets to property operating expenses 147  146  147  146  147 
Lease termination fees, net (775) (716) (748) (1,059) (1,221)
Tenant funded landlord assets and lease incentives (10,439) (7,548) (19,383) (2,221) (1,230)
Cash NOI adjustments in unconsolidated real estate JVs (263) (271) (279) (286) (291)
Cash NOI from real estate operations $ 93,935  $ 90,849  $ 89,373  $ 88,559  $ 87,324 
NOI from real estate operations (from above) $ 101,657  $ 98,656  $ 96,494  $ 95,024  $ 93,903 
Non-Same Property NOI from real estate operations (6,254) (3,802) (1,455) (801) (1,180)
Same Property NOI from real estate operations 95,403  94,854  95,039  94,223  92,723 
Straight line rent adjustments and lease incentive amortization 5,367  3,142  10,154  (2,696) (3,570)
Amortization of acquired above- and below-market rents (69) (121) (120) (129) (166)
Lease termination fees, net (775) (717) (748) (1,059) (1,221)
Tenant funded landlord assets and lease incentives (8,190) (7,541) (15,402) (2,213) (1,222)
Cash NOI adjustments in unconsolidated real estate JVs (117) (124) (130) (137) (153)
Same Property Cash NOI from real estate operations $ 91,619  $ 89,493  $ 88,793  $ 87,989  $ 86,391 
(1)See page 33 for additional disclosure regarding our unconsolidated real estate JVs.
34
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
  Three Months Ended
  3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Real estate revenues
Lease revenue
Fixed contractual payments $ 126,198  $ 123,677  $ 120,408  $ 118,461  $ 116,039 
Variable lease payments (1) 39,235  36,660  34,860  35,221  34,521 
Lease revenue 165,433  160,337  155,268  153,682  150,560 
Other property revenue 1,230  1,225  1,339  1,271  1,121 
Real estate revenues $ 166,663  $ 161,562  $ 156,607  $ 154,953  $ 151,681 
Provision for credit (recoveries) losses on billed lease revenue $ (109) $ 498  $ 13  $ (196) $ 269 
Total revenues $ 193,266  $ 179,729  $ 168,556  $ 169,196  $ 167,501 
Construction contract and other service revenues (26,603) (18,167) (11,949) (14,243) (15,820)
Real estate revenues $ 166,663  $ 161,562  $ 156,607  $ 154,953  $ 151,681 
Total interest expense $ 20,767  $ 20,383  $ 17,798  $ 16,519  $ 16,442 
Less: Amortization of deferred financing costs (685) (681) (639) (628) (632)
Less: Amortization of net debt discounts, net of amounts capitalized (1,014) (1,004) (750) (622) (618)
COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and gain or loss on interest rate derivatives 804  819  805  791  773 
Denominator for interest coverage 19,872  19,517  17,214  16,060  15,965 
Scheduled principal amortization 769  763  753  746  790 
Denominator for debt service coverage 20,641  20,280  17,967  16,806  16,755 
Capitalized interest 589  1,028  1,487  1,194  770 
Denominator for fixed charge coverage $ 21,230  $ 21,308  $ 19,454  $ 18,000  $ 17,525 
Dividends on unrestricted common and deferred shares $ 33,143  $ 31,998  $ 31,996  $ 31,995  $ 31,989 
Distributions on unrestricted common units 500  430  432  433  430 
Dividends and distributions on restricted shares and units 267  209  200  204  215 
Total dividends and distributions for GAAP payout ratio 33,910  32,637  32,628  32,632  32,634 
Dividends and distributions on antidilutive shares and units (266) (212) (202) (205) (216)
Dividends and distributions for non-GAAP payout ratios $ 33,644  $ 32,425  $ 32,426  $ 32,427  $ 32,418 
(1)Represents primarily lease revenue associated with property operating expense reimbursements from tenants.
35
COPT Defense Properties
Supplementary Reconciliations of Non-GAAP Measures (continued)
(in thousands)
3/31/24 12/31/23 9/30/23 6/30/23 3/31/23
Total assets $ 4,232,895  $ 4,246,966  $ 4,239,257  $ 4,246,346  $ 4,177,992 
Accumulated depreciation 1,434,621  1,400,162  1,367,473  1,334,066  1,300,430 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 225,443  228,484  228,334  226,555  224,791 
COPT Defense’s share of liabilities of unconsolidated real estate JVs 60,904  60,583  60,762  60,724  60,734 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 10,364  9,528  8,664  7,800  6,936 
Less: Property - operating lease liabilities (33,141) (33,931) (32,940) (33,923) (34,896)
Less: Property - finance lease liabilities (409) (415) (420) (426) (431)
Less: Cash and cash equivalents (123,144) (167,820) (204,238) (14,273) (15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,159) (852) (1,031) (974) (881)
Adjusted book $ 5,806,374  $ 5,742,705  $ 5,665,861  $ 5,825,895  $ 5,719,476 
Gross debt (page 29)
$ 2,497,050  $ 2,497,613  $ 2,498,274  $ 2,249,880  $ 2,197,488 
Less: Cash and cash equivalents (123,144) (167,820) (204,238) (14,273) (15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,159) (852) (1,031) (974) (881)
Net debt 2,372,747  2,328,941  2,293,005  2,234,633  2,181,408 
Costs incurred on fully-leased development properties (43,034) (53,914) (124,038) (189,407) (137,309)
Net debt adjusted for fully-leased development $ 2,329,713  $ 2,275,027  $ 2,168,967  $ 2,045,226  $ 2,044,099 

36
COPT Defense Properties
Definitions
Non-GAAP Measures

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

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

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

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

Cash net operating income (“Cash NOI”) 
Defined as NOI from real estate operations adjusted to eliminate the effects of: straight-line rental adjustments, amortization of tenant incentives, amortization of intangibles and other assets included in FFO and NOI, lease termination fees from tenants to terminate their lease obligations prior to the end of the agreed upon lease terms and rental revenue recognized under GAAP resulting from landlord assets and lease incentives funded by tenants. Cash NOI also includes adjustments to NOI from real estate operations for the effects of the items noted above pertaining to unconsolidated real estate JVs that were allocable to our ownership interest in the JVs. Under GAAP, rental revenue is recognized evenly over the term of tenant leases (through straight-line rental adjustments and amortization of tenant incentives), which, given the long term nature of our leases, does not align with the economics of when tenant payments are due to us under the arrangements. Also under GAAP, when a property is acquired, we allocate the acquisition to certain intangible components, which are then amortized into NOI over their estimated lives, even though the resulting revenue adjustments are not reflective of our lease economics. In addition, revenue from lease termination fees and tenant-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.
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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, if any) is useful to investors because it is the numerator used to compute Diluted FFO per share, discussed below.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

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

Diluted FFO per share, as adjusted for comparability 
Defined as (1) Diluted FFO available to common share and common unit holders, as adjusted for comparability divided by (2) the sum of the (a) weighted average common shares outstanding during a period, (b) weighted average common units outstanding during a period and (c) weighted average number of potential additional common shares that would have been outstanding during a period if other securities that are convertible or exchangeable into common shares were converted or exchanged. The computation of this measure assumes the conversion of common units but does not assume the conversion of other securities that are convertible into common shares if the conversion of those securities would increase the per share measure in a given period. We believe this to be a useful supplemental measure alongside Diluted FFO per share as it excludes gains and losses from investing and financing activities and certain other items that we 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; consolidated property operating expenses; and the net of revenues and property operating expenses of real estate operations owned through unconsolidated real estate JVs that are allocable to COPT Defense’s ownership interest in the JVs. We believe that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of the core real estate operations that is unaffected by depreciation, amortization, financing and general, administrative and leasing expenses; we believe this measure is particularly useful in evaluating the performance of reportable segments, Same Property groupings and individual properties.  We believe that net income or loss is the most directly comparable GAAP measure to this non-GAAP measure.

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

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



Replacement capital expenditures 
Replacement capital expenditures are defined as tenant improvements and incentives, building improvements and leasing costs incurred during the period for operating properties that are not (1) items contemplated prior to the acquisition of a property, (2) improvements associated with the expansion of a building or its improvements, (3) renovations to a building which change the underlying classification of the building (for example, from industrial to office or Class C office to Class B office), (4) capital improvements that represent the addition of something new to the property rather than the replacement of something (for example, the addition of a new heating and air conditioning unit that is not replacing one that was previously there) or (5) replacements of significant components of a building after the building has reached the end of its original useful life. Replacement capital expenditures excludes expenditures of operating properties included in disposition plans during the period that were already sold or are held for future disposition. For cash tenant incentives not due to the tenant for a period exceeding three months past the date on which such incentives were incurred, we recognize such incentives as replacement capital expenditures in the periods such incentives are due to the tenant. Replacement capital expenditures, which is included in the computation of Diluted AFFO, is intended to represent non-transformative capital expenditures of existing properties held for long-term investment. We believe that the excluded expenditures are more closely associated with our investing activities than the performance of our operating portfolio.

Same Property NOI from real estate operations and Same Property cash NOI
from real estate operations Defined as NOI, or Cash NOI, from real estate operations of Same Property groupings.  We believe that these are important supplemental measures of Same Property operating performance for the same reasons discussed above for NOI from real estate operations and Cash NOI from real estate operations.
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COPT Defense Properties
Definitions
Other Definitions
Acquisition Costs — Transaction costs expensed in connection with executed or anticipated acquisitions of operating properties.
Annualized Rental Revenue (“ARR”) — The monthly contractual base rent as of the reporting date (ignoring free rent then in effect and rent associated with tenant funded landlord assets) multiplied by 12, plus the estimated annualized expense reimbursements under existing leases for occupied space. With regard to properties owned through unconsolidated real estate JVs, we include the portion of ARR allocable to COPT Defense’s ownership interest. We consider ARR to be a useful measure for analyzing revenue sources because, since it is point-in-time based, it does not contain increases and decreases in revenue associated with periods in which lease terms were not in effect; historical revenue under GAAP does contain such fluctuations. We find the measure particularly useful for leasing, tenant, segment and industry analysis.
Average Escalations — Leasing statistic used to report average increase in rental rates over lease terms for leases with a term of greater than one-year.
Cash Rent — Includes monthly contractual base rent (ignoring rent abatements and rent associated with tenant funded landlord assets) multiplied by 12, plus estimated annualized expense reimbursements (average for first 12 months of term for new or renewed leases or as of lease expiration for expiring leases). We believe that cash rent is a useful measure for evaluating the rental rates at the time rent payments commence for our leasing activity, including changes in such rates relative to rates that may have been previously in place.
Committed Cost per Square Foot — Includes tenant improvement allowance (excluding tenant funded landlord assets), leasing commissions and estimated turn key costs and excludes lease incentives. We believe this is a useful measure for evaluating our costs associated with obtaining new leases.
Compound Annual Growth Rate — For renewed space, represents the compound annual growth rate between the first year cash rent of the expired lease and the first year cash rent of the renewal lease.
Debt to Net Income Ratio — Represents debt reported on our consolidated balance sheet divided by net income for the three month period that is annualized by multiplying by four. We do not present this ratio for periods with a net loss.
Defense/IT Portfolio — Represents properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions.
Development Properties — Properties under, or contractually committed for, development.
Equity Market Capitalization — Defined as the sum of: (1) the product of the closing price of our common shares on the NYSE and the sum of (a) common shares outstanding and (b) common units outstanding; and (2) the liquidation value of preferred shares and preferred units in our operating partnership.
First Generation Space — Newly-developed or redeveloped space that has never been occupied.
Net Income to Interest Expense Ratio — Represents net income reported on our consolidated statements of operations divided by interest expense. We do not present this ratio for periods with a net loss.
Net Income Payout Ratio — Defined as (1) the sum of dividends on common and deferred shares and distributions to holders of interests in the Operating Partnership divided by (2) net income. We do not present this ratio for periods with a net loss.
Operational Space — The portion of a property in operations (excludes portion under development or redevelopment).
Redevelopment Properties — Properties previously in operations on which activities to substantially renovate such properties were underway or approved.
Same Property — Operating properties stably owned and 100% operational since at least 1/1/23.
Second Generation Space — Space leased that has been previously occupied.
Straight-line Rent — Includes annual minimum base rents, net of abatements and lease incentives and excluding rent associated with tenant funded landlord assets, on a straight-line basis over the term of the lease, and estimated annual expense reimbursements (as of lease commencement for new or renewed leases or as of lease expiration for expiring leases). We believe that straight-line rent is a useful measures for evaluating the rental rates over the related lease terms for our leasing activity, including changes in such rates relative to rates that may have been previously in place.
Total Market Capitalization — Defined as the sum of: (1) consolidated outstanding debt, excluding discounts, premiums and deferred financing costs; (2) the product of the closing price of our common shares on the NYSE and the sum of (a) common shares outstanding and (b) common units outstanding; and (3) the liquidation value of preferred shares and preferred units in our operating partnership.
Total Portfolio — Operating properties, including ones owned through unconsolidated real estate JVs.
Vacancy Leasing Activity Ratio — Square footage associated with prospective tenants for vacant square feet in service divided by total vacant square feet in service.
Vacant Space Leased — Includes acquired first generation space, vacated second generation space and leases executed on developed and redeveloped space previously placed in service.
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NEWS RELEASE
IR Contacts:
Venkat Kommineni, CFA Michelle Layne
443.285.5587 443.285.5452
venkat.kommineni@copt.com michelle.layne@copt.com


COPT Defense Reports First Quarter 2024 Results
_______________________________________________________________

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

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

Defense/IT Portfolio 95.6% Occupied and 96.8% Leased

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

Committed $91 Million of Capital to New Investments

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

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

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

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

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

_______________________________________________________________


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



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Management Comments

Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which concentrates our portfolio near priority U.S. defense installations, generated strong results in the first quarter with FFO per share exceeding the midpoint of our guidance range by $0.02. Based on this outperformance and our forecast over the remainder of the year, we increased the midpoint of 2024 FFO per share guidance by $0.03 to $2.54, which implies 5% year-over-year growth.

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

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

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

Financial Highlights

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

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





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Operating Performance Highlights

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

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

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

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

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

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

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

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

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

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

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

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



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

Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its first quarter 2024 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT Defense’s Investors website: https://investors.copt.com/financial-information/financial-results

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

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

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

Conference Call Date: Friday, April 26, 2024
Time: 12:00 p.m. Eastern Time

Participants must register for the conference call at the link below to receive the dial-in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time:
https://register.vevent.com/register/BI45e0b73633dc499fa57ffc62af57efd2

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

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



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

About COPT Defense
COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (referred to as its Defense/IT Portfolio). The Company’s tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of March 31, 2024, the Company’s Defense/IT Portfolio of 193 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.0 million square feet and was 96.8% leased.

Forward-Looking Information
This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Although the Company believes that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements and the Company undertakes no obligation to update or supplement any forward-looking statements.

The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.


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v


COPT Defense Properties
Summary Financial Data
(unaudited)
(dollars and shares in thousands, except per share data)
  For the Three Months Ended March 31,
  2024 2023
Revenues    
Lease revenue $ 165,433  $ 150,560 
Other property revenue 1,230  1,121 
Construction contract and other service revenues 26,603  15,820 
Total revenues 193,266  167,501 
Operating expenses    
Property operating expenses 66,746  59,420 
Depreciation and amortization associated with real estate operations 38,351  36,995 
Construction contract and other service expenses 26,007  15,201 
General and administrative expenses 8,378  7,996 
Leasing expenses 2,187  1,999 
Business development expenses and land carry costs 1,182  495 
Total operating expenses 142,851  122,106 
Interest expense (20,767) (16,442)
Interest and other income, net 4,122  2,256 
Gain on sales of real estate —  49,378 
Income before equity in income (loss) of unconsolidated entities and income taxes 33,770  80,587 
Equity in income (loss) of unconsolidated entities 69  (64)
Income tax expense (168) (125)
Net income 33,671  80,398 
Net income attributable to noncontrolling interests:    
Common units in the Operating Partnership (“OP”) (608) (1,293)
Other consolidated entities (454) (326)
Net income attributable to common shareholders $ 32,609  $ 78,779 
Earnings per share (“EPS”) computation:    
Numerator for diluted EPS:    
Net income attributable to common shareholders $ 32,609  $ 78,779 
Amount allocable to share-based compensation awards (129) (248)
Redeemable noncontrolling interests —  (64)
Numerator for diluted EPS $ 32,480  $ 78,467 
Denominator:    
Weighted average common shares - basic 112,231  112,127 
Dilutive effect of share-based compensation awards 509  410 
Dilutive effect of redeemable noncontrolling interests —  91 
Weighted average common shares - diluted 112,740  112,628 
Diluted EPS $ 0.29  $ 0.70 
vi


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands, except per share data)
  For the Three Months Ended March 31,
  2024 2023
Net income $ 33,671  $ 80,398 
Real estate-related depreciation and amortization 38,351  36,995 
Gain on sales of real estate —  (49,378)
Depreciation and amortization on unconsolidated real estate JVs 777  801 
Funds from operations (“FFO”) 72,799  68,816 
FFO allocable to other noncontrolling interests (836) (708)
Basic FFO allocable to share-based compensation awards (587) (466)
Basic FFO available to common share and common unit holders (“Basic FFO”) 71,376  67,642 
Redeemable noncontrolling interests 469  (30)
Diluted FFO adjustments allocable to share-based compensation awards 47  39 
Diluted FFO available to common share and common unit holders (“Diluted FFO”) 71,892  67,651 
Executive transition costs 77  — 
Diluted FFO available to common share and common unit holders, as adjusted for comparability 71,969  67,651 
Straight line rent adjustments and lease incentive amortization 3,473  (3,516)
Amortization of intangibles and other assets included in net operating income (“NOI”) 122  (19)
Share-based compensation, net of amounts capitalized 2,645  1,733 
Amortization of deferred financing costs 685  632 
Amortization of net debt discounts, net of amounts capitalized 1,014  618 
Replacement capital expenditures (20,776) (28,210)
Other 137  (273)
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 59,269  $ 38,616 
Diluted FFO per share $ 0.62  $ 0.59 
Diluted FFO per share, as adjusted for comparability $ 0.62  $ 0.59 
Dividends/distributions per common share/unit $ 0.295  $ 0.285 

vii


COPT Defense Properties
Summary Financial Data
(unaudited)
(Dollars and shares in thousands, except per share data)
March 31,
2024		 December 31,
2023
Balance Sheet Data    
Properties, net of accumulated depreciation $ 3,517,878  $ 3,503,678 
Total assets $ 4,232,895  $ 4,246,966 
Debt per balance sheet $ 2,416,873  $ 2,416,287 
Total liabilities $ 2,683,883  $ 2,699,631 
Redeemable noncontrolling interests $ 22,966  $ 23,580 
Total equity $ 1,526,046  $ 1,523,755 
Debt to assets 57.1  % 56.9  %
Net debt to adjusted book 40.9  % 40.6  %
Defense/IT Portfolio Data (as of period end)    
Number of operating properties 193  190 
Total operational square feet (in thousands) 21,993  21,719 
% Occupied 95.6  % 96.2  %
% Leased 96.8  % 97.2  %
For the Three Months Ended March 31,
2024 2023
GAAP    
Payout ratio:
Net income 100.7  % 40.6  %
Debt ratios:
Net income to interest expense ratio 1.6  x  4.9  x 
Debt to net income ratio 17.9  x  6.6  x 
Non-GAAP
Payout ratios:
Diluted FFO 46.8  % 47.9  %
Diluted FFO, as adjusted for comparability 46.7  % 47.9  %
Diluted AFFO 56.8  % 83.9  %
Debt ratios:
Adjusted EBITDA fixed charge coverage ratio 4.5  x  5.0  x 
Net debt to in-place adjusted EBITDA ratio 6.1  x  6.2  x 
Net debt adj. for fully-leased development to in-place adj. EBITDA ratio 6.0  x  5.8  x 
Reconciliation of denominators for per share measures  
Denominator for diluted EPS 112,740  112,628 
Weighted average common units 1,625  1,489 
Redeemable noncontrolling interests 947  — 
Denominator for diluted FFO per share and as adjusted for comparability 115,312  114,117 




viii


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended March 31,
  2024 2023
Numerators for Payout Ratios
Dividends on unrestricted common and deferred shares $ 33,143  $ 31,989 
Distributions on unrestricted common units 500  430 
Dividends and distributions on restricted shares and units 267  215 
Total dividends and distributions for GAAP payout ratio 33,910  32,634 
Dividends and distributions on antidilutive shares and units (266) (216)
Dividends and distributions for non-GAAP payout ratios $ 33,644  $ 32,418 
Reconciliation of net income to earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”), adjusted EBITDA and in-place adjusted EBITDA    
Net income $ 33,671  $ 80,398 
Interest expense 20,767  16,442 
Income tax expense 168  125 
Real estate-related depreciation and amortization 38,351  36,995 
Other depreciation and amortization 608  602 
Gain on sales of real estate —  (49,378)
Adjustments from unconsolidated real estate JVs 1,671  1,704 
EBITDAre 95,236  86,888 
Credit loss expense 22  67 
Business development expenses 630  241 
Executive transition costs 430  247 
Net gain on other investments (477) — 
Adjusted EBITDA 95,841  87,443 
Pro forma NOI adjustment for property changes within period 813  (318)
Change in collectability of deferred rental revenue —  899 
In-place adjusted EBITDA $ 96,654  $ 88,024 
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures
Tenant improvements and incentives $ 12,776  $ 19,986 
Building improvements 4,953  2,141 
Leasing costs 3,590  1,750 
Net additions to tenant improvements and incentives 316  4,839 
Excluded building improvements and leasing costs (859) (506)
Replacement capital expenditures $ 20,776  $ 28,210 
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COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
For the Three Months Ended March 31,
  2024 2023
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA    
Interest expense $ 20,767  $ 16,442 
Less: Amortization of deferred financing costs (685) (632)
Less: Amortization of net debt discounts, net of amounts capitalized (1,014) (618)
COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and gain or loss on interest rate derivatives 804  773 
Scheduled principal amortization 769  790 
Capitalized interest 589  770 
Denominator for fixed charge coverage-Adjusted EBITDA $ 21,230  $ 17,525 
Reconciliation of net income to NOI from real estate operations, same property NOI from real estate operations and same property cash NOI from real estate operations
Net income $ 33,671  $ 80,398 
Construction contract and other service revenues (26,603) (15,820)
Depreciation and other amortization associated with real estate operations 38,351  36,995 
Construction contract and other service expenses 26,007  15,201 
General and administrative expenses 8,378  7,996 
Leasing expenses 2,187  1,999 
Business development expenses and land carry costs 1,182  495 
Interest expense 20,767  16,442 
Interest and other income, net (4,122) (2,256)
Gain on sales of real estate —  (49,378)
Equity in (income) loss of unconsolidated entities (69) 64 
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities 1,740  1,642 
Income tax expense 168  125 
NOI from real estate operations 101,657  93,903 
Non-Same Property NOI from real estate operations (6,254) (1,180)
Same Property NOI from real estate operations 95,403  92,723 
Straight line rent adjustments and lease incentive amortization 5,367  (3,570)
Amortization of acquired above- and below-market rents (69) (166)
Lease termination fees, net (775) (1,221)
Tenant funded landlord assets and lease incentives (8,190) (1,222)
Cash NOI adjustments in unconsolidated real estate JVs (117) (153)
Same Property Cash NOI from real estate operations $ 91,619  $ 86,391 

x


COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)
March 31,
2024		 December 31,
2023
Reconciliation of total assets to adjusted book    
Total assets $ 4,232,895  $ 4,246,966 
Accumulated depreciation 1,434,621  1,400,162 
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 225,443  228,484 
COPT Defense’s share of liabilities of unconsolidated real estate JVs 60,904  60,583 
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 10,364  9,528 
Less: Property - operating lease liabilities (33,141) (33,931)
Less: Property - finance lease liabilities (409) (415)
Less: Cash and cash equivalents (123,144) (167,820)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,159) (852)
Adjusted book $ 5,806,374  $ 5,742,705 

March 31,
2024		 December 31,
2023		 March 31,
2023
Reconciliation of debt to net debt and net debt adjusted for fully-leased development
Debt per balance sheet $ 2,416,873  $ 2,416,287  $ 2,123,012 
Net discounts and deferred financing costs 27,358  28,713  22,250 
COPT Defense’s share of unconsolidated JV gross debt 52,819  52,613  52,226 
Gross debt 2,497,050  2,497,613  2,197,488 
Less: Cash and cash equivalents (123,144) (167,820) (15,199)
Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,159) (852) (881)
Net debt 2,372,747  2,328,941  2,181,408 
Costs incurred on fully-leased development properties (43,034) (53,914) (137,309)
Net debt adjusted for fully-leased development $ 2,329,713  $ 2,275,027  $ 2,044,099 
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