Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries COPT Reports Second Quarter 2023 Results By: Corporate Office Properties Trust via Business Wire July 27, 2023 at 16:16 PM EDT EPS of $0.27 for 2Q23; FFO per Share, as Adjusted for Comparability, of $0.60 Exceeded High-End of Guidance Increased Midpoint of 2023 FFO per Share Guidance by 2-cents to $2.40 Core Portfolio 93.6% Occupied and 95.0% Leased Same-Property Cash NOI Increased 5.8% in 2Q23 and 7.0% Year-to-Date Raising Same-Property Cash NOI Guidance for the Year by 100 Basis Points, to 4.5%-5.5% 1.5 million SF of Active Developments are 92% Leased Strong Leasing Volume in 1H23; Well Positioned to Achieve 2023 Goals Total Leasing of 891,000 SF in 2Q23 and 1.7 million SF Year-to-Date 88,000 SF of Vacancy Leasing in 2Q23 and 187,000 SF Year-to-Date On Track to Achieve Annual Goal of 400,000 SF Tenant Retention of 89% in 2Q23 and 83% Year-to-Date On Track to Achieve Annual Goal of 80%-85% 495,000 SF of Development Leasing Year-to-Date On Track to Achieve Annual Goal of 700,000 SF Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced results for the second quarter ended June 30, 2023. Management Comments Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which has concentrated our portfolio near priority U.S. defense installations, continues to produce solid results. Since 2022, the significant growth in defense spending has materialized into elevated tenant demand for our portfolio, resulting in a 96.8% leased rate in our Defense/IT Locations segment, which accounts for 90% of our core portfolio annualized rental revenue. This is the highest leased rate since we started reporting the segment in 2015. Our second quarter results were strong as FFO per share exceeded the midpoint of our guidance range by $0.02. Given our outperformance year to date, we are increasing the midpoint of our full year FFO per share guidance by $0.02 to $2.40 per share, which represents a 2% increase over 2022’s results. Same-property cash NOI increased 5.8% for 2Q23 over 2Q22, and 7.0% for the first half of 2023 over the first half of 2022, which led us to again increase our full year change in cash NOI guidance by 100 basis points. Our leasing activity is right on track as we are roughly halfway towards our full year vacancy leasing goal and 70% towards our development leasing goal. Our investment grade rated balance sheet is well positioned to navigate the challenging capital markets environment as we have no significant debt maturities until 2026, with 96% of our NOI unencumbered. We remain confident in our strategy and expect to continue to allocate capital to investments at our Defense/IT Locations that will support continued growth in FFO per share and shareholder value.” Financial Highlights 2nd Quarter Financial Results: Diluted earnings per share (“EPS”) was $0.27 for the quarter ended June 30, 2023 compared to $0.29 for the quarter ended June 30, 2022. Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, and FFOPS, as adjusted for comparability, were $0.60 for the quarter ended June 30, 2023 compared to $0.59 for the quarter ended June 30, 2022. Operating Performance Highlights Operating Portfolio Summary: At June 30, 2023, the Company’s 22.9 million square foot core portfolio was 93.6% occupied and 95.0% leased. Same-Property Performance: At June 30, 2023, the Company’s 20.6 million square foot same-property portfolio was 92.8% occupied and 94.4% leased. The Company’s same-property cash NOI increased 5.8% for the three months ended June 30, 2023 compared to the same period in 2022. Leasing: Total Square Feet Leased: For the quarter ended June 30, 2023, the Company leased 891,000 square feet, including 803,000 square feet of renewals and 88,000 square feet of vacancy leasing. For the six months ended June 30, 2023, the Company executed 1.7 million square feet of total leasing, including 1.0 million square feet of renewals, 187,000 square feet of vacancy leasing, and 495,000 square feet in development projects. Tenant Retention Rates: During the quarter and six months ended June 30, 2023, the Company renewed 89.0% and 82.7%, respectively, of expiring square feet. Rent Spreads & Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2023, straight-line rents on renewals increased 7.4% and 6.9%, respectively, and cash rents on renewed space increased 1.3% and 1.1%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.6%. Lease Terms: In the quarter ended June 30, 2023, lease terms averaged 5.0 years on renewing leases and 6.9 years on vacancy leasing. For the six months ended June 30, 2023, lease terms averaged 4.5 years on renewing leases, 7.4 years on vacancy leasing, and 14.3 years on development leasing. Investment Activity Highlights Development Pipeline: The Company’s development pipeline consists of nine properties totaling 1.5 million square feet that were 92% leased at June 30, 2023. These projects represent a total estimated investment of $480.8 million, of which $222.1 million has been spent. Balance Sheet and Capital Transaction Highlights For the quarter ended June 30, 2023, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.9x. At June 30, 2023, the Company’s net debt to in-place adjusted EBITDA ratio was 6.3x and its net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio was 5.7x. At June 30, 2023, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.1% with a weighted average maturity of 6.2 years; additionally, 95.6% of the Company’s debt was subject to fixed interest rates. Associated Supplemental Presentation Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second quarter 2023 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT’s Investors website: https://investors.copt.com/financial-information/financial-results 2023 Guidance Management is updating its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of $1.46-$1.52, and $2.35-$2.41, respectively, to new ranges of $1.49-$1.53, and $2.38-$2.42, respectively. Management is establishing third quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.26-$0.28 and $0.59-$0.61, 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 September 30, 2023 Year Ending December 31, 2023 Low High Low High Diluted EPS $ 0.26 $ 0.28 $ 1.49 $ 1.53 Real estate-related depreciation and amortization 0.33 0.33 1.32 1.32 Gain on sales of real estate — — (0.43 ) (0.43 ) Diluted FFOPS, Nareit definition and as adjusted for comparability $ 0.59 $ 0.61 $ 2.38 $ 2.42 Conference Call Information Management will discuss second quarter 2023 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, July 28, 2023 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/BI48eea2c0fe934b24aefdd77f5c963ea1 The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT’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’s Investors website. 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 COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what the Company believes are growing, durable, priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 192 properties encompassed 22.9 million square feet and was 95% 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, 2022. Source: Corporate Office Properties Trust Corporate Office Properties Trust Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Revenues Lease revenue $ 153,682 $ 142,277 $ 304,242 $ 283,666 Other property revenue 1,271 969 2,392 1,860 Construction contract and other service revenues 14,243 42,557 30,063 95,757 Total revenues 169,196 185,803 336,697 381,283 Operating expenses Property operating expenses 61,600 54,116 121,020 111,297 Depreciation and amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Total operating expenses 123,113 139,288 245,219 291,710 Interest expense (16,519 ) (14,808 ) (32,961 ) (29,232 ) Interest and other income, net 2,143 1,593 4,399 3,802 Gain on sales of real estate 14 (19 ) 49,392 (4 ) Loss on early extinguishment of debt — — — (342 ) Income from continuing operations before equity in income of unconsolidated entities and income taxes 31,721 33,281 112,308 63,797 Equity in income of unconsolidated entities 111 318 47 1,206 Income tax expense (190 ) (4 ) (315 ) (157 ) Income from continuing operations 31,642 33,595 112,040 64,846 Discontinued operations — — — 29,573 Net Income 31,642 33,595 112,040 94,419 Net income attributable to noncontrolling interests: Common units in the Operating Partnership (“OP”) (516 ) (496 ) (1,809 ) (1,352 ) Other consolidated entities (839 ) (789 ) (1,165 ) (1,438 ) Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Earnings per share (“EPS”) computation: Numerator for diluted EPS: Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Amount allocable to share-based compensation awards (98 ) (75 ) (349 ) (259 ) Redeemable noncontrolling interests (51 ) (30 ) (115 ) (69 ) Numerator for diluted EPS $ 30,138 $ 32,205 $ 108,602 $ 91,301 Denominator: Weighted average common shares - basic 112,188 112,082 112,157 112,052 Dilutive effect of share-based compensation awards 426 429 418 427 Dilutive effect of redeemable noncontrolling interests 62 126 77 129 Weighted average common shares - diluted 112,676 112,637 112,652 112,608 Diluted EPS $ 0.27 $ 0.29 $ 0.96 $ 0.81 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Depreciation and amortization on unconsolidated real estate JVs 805 525 1,606 1,051 Funds from operations (“FFO”) 70,033 68,951 138,849 135,986 FFO allocable to other noncontrolling interests (1,239 ) (1,178 ) (1,947 ) (2,220 ) Basic FFO allocable to share-based compensation awards (480 ) (357 ) (946 ) (719 ) Basic FFO available to common share and common unit holders (“Basic FFO”) 68,314 67,416 135,956 133,047 Redeemable noncontrolling interests (28 ) 4 (58 ) (2 ) Diluted FFO adjustments allocable to share-based compensation awards 37 27 76 54 Diluted FFO available to common share and common unit holders (“Diluted FFO”) 68,323 67,447 135,974 133,099 Loss on early extinguishment of debt — — — 342 Executive transition costs 248 137 248 137 Diluted FFO comparability adjustments allocable to share-based compensation awards (2 ) — (2 ) (2 ) Diluted FFO available to common share and common unit holders, as adjusted for comparability 68,569 67,584 136,220 133,576 Straight line rent adjustments and lease incentive amortization (3,161 ) (3,198 ) (6,677 ) (6,387 ) Amortization of intangibles and other assets included in net operating income (“NOI”) 17 49 (2 ) (323 ) Share-based compensation, net of amounts capitalized 2,213 2,154 3,946 4,265 Amortization of deferred financing costs 628 541 1,260 1,138 Amortization of net debt discounts, net of amounts capitalized 622 608 1,240 1,213 Replacement capital expenditures (22,664 ) (17,717 ) (50,874 ) (35,075 ) Other (221 ) 406 (494 ) 445 Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 46,003 $ 50,427 $ 84,619 $ 98,852 Diluted FFO per share $ 0.60 $ 0.59 $ 1.19 $ 1.17 Diluted FFO per share, as adjusted for comparability $ 0.60 $ 0.59 $ 1.19 $ 1.17 Dividends/distributions per common share/unit $ 0.285 $ 0.275 $ 0.57 $ 0.55 Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) June 30, 2023 December 31, 2022 Balance Sheet Data Properties, net of accumulated depreciation $ 3,672,235 $ 3,556,398 Total assets $ 4,246,346 $ 4,257,275 Debt per balance sheet $ 2,176,174 $ 2,231,794 Total liabilities $ 2,447,436 $ 2,509,527 Redeemable noncontrolling interests $ 22,215 $ 26,293 Total equity $ 1,776,695 $ 1,721,455 Debt to assets 51.2 % 52.4 % Net debt to adjusted book 38.4 % 39.8 % Core Portfolio Data (as of period end) Number of operating properties 192 192 Total operational square feet (in thousands) 22,878 22,849 % Occupied 93.6 % 92.8 % % Leased 95.0 % 95.3 % For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 GAAP Payout ratio: Net income 103.1 % 93.4 % 58.3 % 66.5 % Debt ratios: Net income to interest expense ratio 1.9x 2.3x 3.4x 3.2x Debt to net income ratio 17.2x 16.2x N/A N/A Non-GAAP Payout ratios: Diluted FFO 47.5 % 46.3 % 47.7 % 47.0 % Diluted FFO, as adjusted for comparability 47.3 % 46.3 % 47.6 % 46.8 % Diluted AFFO 70.5 % 62.0 % 76.6 % 63.2 % Debt ratios: Adjusted EBITDA fixed charge coverage ratio 4.9x 5.3x 5.0x 5.3x Net debt to in-place adjusted EBITDA ratio 6.3x 6.4x N/A N/A Net debt adj. for fully-leased development to in-place adj. EBITDA ratio 5.7x 5.8x N/A N/A Reconciliation of denominators for per share measures Denominator for diluted EPS 112,676 112,637 112,652 112,608 Weighted average common units 1,514 1,476 1,502 1,430 Denominator for diluted FFO per share and as adjusted for comparability 114,190 114,113 114,154 114,038 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerators for Payout Ratios Dividends on unrestricted common and deferred shares $ 31,995 $ 30,842 $ 63,984 $ 61,679 Distributions on unrestricted common units 433 407 863 811 Dividends and distributions on restricted shares and units 204 135 419 293 Total dividends and distributions for GAAP payout ratio 32,632 31,384 65,266 62,783 Dividends and distributions on antidilutive shares and units (205 ) (123 ) (421 ) (268 ) Dividends and distributions for non-GAAP payout ratios $ 32,427 $ 31,261 $ 64,845 $ 62,515 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 $ 31,642 $ 33,595 $ 112,040 $ 94,419 Interest expense 16,519 14,808 32,961 29,232 Income tax expense 190 4 315 157 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Other depreciation and amortization 609 552 1,211 1,159 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Adjustments from unconsolidated real estate JVs 1,559 760 3,263 1,518 EBITDAre 88,105 84,550 174,993 167,001 Loss on early extinguishment of debt — — — 342 Net gain on other investments — 1 — (564 ) Credit loss expense (recoveries) 238 225 305 (91 ) Business development expenses 394 385 635 711 Executive transition costs 307 137 554 137 Adjusted EBITDA 89,044 85,298 $ 176,487 $ 167,536 Pro forma NOI adjustment for property changes within period 56 127 Change in collectability of deferred rental revenue 28 231 In-place adjusted EBITDA $ 89,128 $ 85,656 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures Tenant improvements and incentives $ 32,619 $ 10,655 $ 52,605 $ 20,665 Building improvements 2,766 6,751 4,907 13,583 Leasing costs 3,542 1,748 5,292 4,018 Net (exclusions from) additions to tenant improvements and incentives (16,007 ) 474 (11,168 ) 2,282 Excluded building improvements and leasing costs (256 ) (1,911 ) (762 ) (5,473 ) Replacement capital expenditures $ 22,664 $ 17,717 $ 50,874 $ 35,075 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA Interest expense $ 16,519 $ 14,808 $ 32,961 $ 29,232 Less: Amortization of deferred financing costs (628 ) (541 ) (1,260 ) (1,138 ) Less: Amortization of net debt discounts, net of amounts capitalized (622 ) (608 ) (1,240 ) (1,213 ) COPT’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and loss on interest rate derivatives 791 233 1,564 464 Scheduled principal amortization 746 844 1,536 1,618 Capitalized interest 1,194 1,376 1,964 2,905 Denominator for fixed charge coverage-Adjusted EBITDA $ 18,000 $ 16,112 $ 35,525 $ 31,868 Reconciliation of net income to NOI from real estate operations, same properties NOI from real estate operations and same properties cash NOI from real estate operations Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Construction contract and other service revenues (14,243 ) (42,557 ) (30,063 ) (95,757 ) Depreciation and other amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Interest expense 16,519 14,808 32,961 29,232 Interest and other income, net (2,143 ) (1,593 ) (4,399 ) (3,802 ) Gain on sales of real estate from continuing operations (14 ) 19 (49,392 ) 4 Loss on early extinguishment of debt — — — 342 Equity in income of unconsolidated entities (111 ) (318 ) (47 ) (1,206 ) Unconsolidated real estate JVs NOI allocable to COPT included in equity in income of unconsolidated entities 1,671 1,080 3,313 2,160 Income tax expense 190 4 315 157 Discontinued operations — — — (29,573 ) Revenues from real estate operations from discontinued operations — — — 1,980 Property operating expenses from discontinued operations — — — (971 ) NOI from real estate operations 95,024 90,210 188,927 177,398 Non-Same Properties NOI from real estate operations (8,770 ) (6,603 ) (18,221 ) (12,365 ) Same Properties NOI from real estate operations 86,254 83,607 170,706 165,033 Straight line rent adjustments and lease incentive amortization 1,232 (1,301 ) 2,624 (3,592 ) Amortization of acquired above- and below-market rents (129 ) (97 ) (295 ) (616 ) Lease termination fees, net (1,059 ) (399 ) (2,280 ) (620 ) Tenant funded landlord assets and lease incentives (1,191 ) (1,311 ) (2,379 ) (2,821 ) Cash NOI adjustments in unconsolidated real estate JVs (70 ) (92 ) (145 ) (190 ) Same Properties Cash NOI from real estate operations $ 85,037 $ 80,407 $ 168,231 $ 157,194 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) June 30, 2023 December 31, 2022 Reconciliation of total assets to adjusted book Total assets $ 4,246,346 $ 4,257,275 Accumulated depreciation 1,334,066 1,267,434 Accumulated depreciation included in assets held for sale — 6,014 Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 226,555 222,779 COPT’s share of liabilities of unconsolidated real estate JVs 60,724 52,404 COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 7,800 6,078 Less: Property - operating lease liabilities (33,923 ) (28,759 ) Less: Property - finance lease liabilities (426 ) — Less: Cash and cash equivalents (14,273 ) (12,337 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) Adjusted book $ 5,825,895 $ 5,770,432 June 30, 2023 December 31, 2022 June 30, 2022 Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development Debt per balance sheet $ 2,176,174 $ 2,231,794 $ 2,177,811 Net discounts and deferred financing costs 21,342 23,160 23,857 COPT’s share of unconsolidated JV gross debt 52,364 52,100 26,250 Gross debt 2,249,880 2,307,054 2,227,918 Less: Cash and cash equivalents (14,273 ) (12,337 ) (20,735 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) (457 ) Net debt 2,234,633 2,294,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Net debt adjusted for fully-leased development $ 2,045,226 $ 2,198,289 $ 1,983,241 Net debt $ 2,234,633 $ 2,294,261 $ 2,206,726 Pro forma debt adjustments from subsequent event transaction proceeds N/A (189,000 ) N/A Pro forma net debt 2,234,633 2,105,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Pro forma net debt adjusted for fully-leased development $ 2,045,226 $ 2,009,289 $ 1,983,241 View source version on businesswire.com: https://www.businesswire.com/news/home/20230727043433/en/Contacts IR Contacts: Venkat Kommineni, CFA 443-285-5587 venkat.kommineni@copt.com Michelle Layne 443-285-5452 michelle.layne@copt.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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COPT Reports Second Quarter 2023 Results By: Corporate Office Properties Trust via Business Wire July 27, 2023 at 16:16 PM EDT EPS of $0.27 for 2Q23; FFO per Share, as Adjusted for Comparability, of $0.60 Exceeded High-End of Guidance Increased Midpoint of 2023 FFO per Share Guidance by 2-cents to $2.40 Core Portfolio 93.6% Occupied and 95.0% Leased Same-Property Cash NOI Increased 5.8% in 2Q23 and 7.0% Year-to-Date Raising Same-Property Cash NOI Guidance for the Year by 100 Basis Points, to 4.5%-5.5% 1.5 million SF of Active Developments are 92% Leased Strong Leasing Volume in 1H23; Well Positioned to Achieve 2023 Goals Total Leasing of 891,000 SF in 2Q23 and 1.7 million SF Year-to-Date 88,000 SF of Vacancy Leasing in 2Q23 and 187,000 SF Year-to-Date On Track to Achieve Annual Goal of 400,000 SF Tenant Retention of 89% in 2Q23 and 83% Year-to-Date On Track to Achieve Annual Goal of 80%-85% 495,000 SF of Development Leasing Year-to-Date On Track to Achieve Annual Goal of 700,000 SF Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced results for the second quarter ended June 30, 2023. Management Comments Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which has concentrated our portfolio near priority U.S. defense installations, continues to produce solid results. Since 2022, the significant growth in defense spending has materialized into elevated tenant demand for our portfolio, resulting in a 96.8% leased rate in our Defense/IT Locations segment, which accounts for 90% of our core portfolio annualized rental revenue. This is the highest leased rate since we started reporting the segment in 2015. Our second quarter results were strong as FFO per share exceeded the midpoint of our guidance range by $0.02. Given our outperformance year to date, we are increasing the midpoint of our full year FFO per share guidance by $0.02 to $2.40 per share, which represents a 2% increase over 2022’s results. Same-property cash NOI increased 5.8% for 2Q23 over 2Q22, and 7.0% for the first half of 2023 over the first half of 2022, which led us to again increase our full year change in cash NOI guidance by 100 basis points. Our leasing activity is right on track as we are roughly halfway towards our full year vacancy leasing goal and 70% towards our development leasing goal. Our investment grade rated balance sheet is well positioned to navigate the challenging capital markets environment as we have no significant debt maturities until 2026, with 96% of our NOI unencumbered. We remain confident in our strategy and expect to continue to allocate capital to investments at our Defense/IT Locations that will support continued growth in FFO per share and shareholder value.” Financial Highlights 2nd Quarter Financial Results: Diluted earnings per share (“EPS”) was $0.27 for the quarter ended June 30, 2023 compared to $0.29 for the quarter ended June 30, 2022. Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, and FFOPS, as adjusted for comparability, were $0.60 for the quarter ended June 30, 2023 compared to $0.59 for the quarter ended June 30, 2022. Operating Performance Highlights Operating Portfolio Summary: At June 30, 2023, the Company’s 22.9 million square foot core portfolio was 93.6% occupied and 95.0% leased. Same-Property Performance: At June 30, 2023, the Company’s 20.6 million square foot same-property portfolio was 92.8% occupied and 94.4% leased. The Company’s same-property cash NOI increased 5.8% for the three months ended June 30, 2023 compared to the same period in 2022. Leasing: Total Square Feet Leased: For the quarter ended June 30, 2023, the Company leased 891,000 square feet, including 803,000 square feet of renewals and 88,000 square feet of vacancy leasing. For the six months ended June 30, 2023, the Company executed 1.7 million square feet of total leasing, including 1.0 million square feet of renewals, 187,000 square feet of vacancy leasing, and 495,000 square feet in development projects. Tenant Retention Rates: During the quarter and six months ended June 30, 2023, the Company renewed 89.0% and 82.7%, respectively, of expiring square feet. Rent Spreads & Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2023, straight-line rents on renewals increased 7.4% and 6.9%, respectively, and cash rents on renewed space increased 1.3% and 1.1%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.6%. Lease Terms: In the quarter ended June 30, 2023, lease terms averaged 5.0 years on renewing leases and 6.9 years on vacancy leasing. For the six months ended June 30, 2023, lease terms averaged 4.5 years on renewing leases, 7.4 years on vacancy leasing, and 14.3 years on development leasing. Investment Activity Highlights Development Pipeline: The Company’s development pipeline consists of nine properties totaling 1.5 million square feet that were 92% leased at June 30, 2023. These projects represent a total estimated investment of $480.8 million, of which $222.1 million has been spent. Balance Sheet and Capital Transaction Highlights For the quarter ended June 30, 2023, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.9x. At June 30, 2023, the Company’s net debt to in-place adjusted EBITDA ratio was 6.3x and its net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio was 5.7x. At June 30, 2023, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.1% with a weighted average maturity of 6.2 years; additionally, 95.6% of the Company’s debt was subject to fixed interest rates. Associated Supplemental Presentation Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second quarter 2023 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT’s Investors website: https://investors.copt.com/financial-information/financial-results 2023 Guidance Management is updating its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of $1.46-$1.52, and $2.35-$2.41, respectively, to new ranges of $1.49-$1.53, and $2.38-$2.42, respectively. Management is establishing third quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.26-$0.28 and $0.59-$0.61, 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 September 30, 2023 Year Ending December 31, 2023 Low High Low High Diluted EPS $ 0.26 $ 0.28 $ 1.49 $ 1.53 Real estate-related depreciation and amortization 0.33 0.33 1.32 1.32 Gain on sales of real estate — — (0.43 ) (0.43 ) Diluted FFOPS, Nareit definition and as adjusted for comparability $ 0.59 $ 0.61 $ 2.38 $ 2.42 Conference Call Information Management will discuss second quarter 2023 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, July 28, 2023 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/BI48eea2c0fe934b24aefdd77f5c963ea1 The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT’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’s Investors website. 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 COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what the Company believes are growing, durable, priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 192 properties encompassed 22.9 million square feet and was 95% 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, 2022. Source: Corporate Office Properties Trust Corporate Office Properties Trust Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Revenues Lease revenue $ 153,682 $ 142,277 $ 304,242 $ 283,666 Other property revenue 1,271 969 2,392 1,860 Construction contract and other service revenues 14,243 42,557 30,063 95,757 Total revenues 169,196 185,803 336,697 381,283 Operating expenses Property operating expenses 61,600 54,116 121,020 111,297 Depreciation and amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Total operating expenses 123,113 139,288 245,219 291,710 Interest expense (16,519 ) (14,808 ) (32,961 ) (29,232 ) Interest and other income, net 2,143 1,593 4,399 3,802 Gain on sales of real estate 14 (19 ) 49,392 (4 ) Loss on early extinguishment of debt — — — (342 ) Income from continuing operations before equity in income of unconsolidated entities and income taxes 31,721 33,281 112,308 63,797 Equity in income of unconsolidated entities 111 318 47 1,206 Income tax expense (190 ) (4 ) (315 ) (157 ) Income from continuing operations 31,642 33,595 112,040 64,846 Discontinued operations — — — 29,573 Net Income 31,642 33,595 112,040 94,419 Net income attributable to noncontrolling interests: Common units in the Operating Partnership (“OP”) (516 ) (496 ) (1,809 ) (1,352 ) Other consolidated entities (839 ) (789 ) (1,165 ) (1,438 ) Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Earnings per share (“EPS”) computation: Numerator for diluted EPS: Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Amount allocable to share-based compensation awards (98 ) (75 ) (349 ) (259 ) Redeemable noncontrolling interests (51 ) (30 ) (115 ) (69 ) Numerator for diluted EPS $ 30,138 $ 32,205 $ 108,602 $ 91,301 Denominator: Weighted average common shares - basic 112,188 112,082 112,157 112,052 Dilutive effect of share-based compensation awards 426 429 418 427 Dilutive effect of redeemable noncontrolling interests 62 126 77 129 Weighted average common shares - diluted 112,676 112,637 112,652 112,608 Diluted EPS $ 0.27 $ 0.29 $ 0.96 $ 0.81 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Depreciation and amortization on unconsolidated real estate JVs 805 525 1,606 1,051 Funds from operations (“FFO”) 70,033 68,951 138,849 135,986 FFO allocable to other noncontrolling interests (1,239 ) (1,178 ) (1,947 ) (2,220 ) Basic FFO allocable to share-based compensation awards (480 ) (357 ) (946 ) (719 ) Basic FFO available to common share and common unit holders (“Basic FFO”) 68,314 67,416 135,956 133,047 Redeemable noncontrolling interests (28 ) 4 (58 ) (2 ) Diluted FFO adjustments allocable to share-based compensation awards 37 27 76 54 Diluted FFO available to common share and common unit holders (“Diluted FFO”) 68,323 67,447 135,974 133,099 Loss on early extinguishment of debt — — — 342 Executive transition costs 248 137 248 137 Diluted FFO comparability adjustments allocable to share-based compensation awards (2 ) — (2 ) (2 ) Diluted FFO available to common share and common unit holders, as adjusted for comparability 68,569 67,584 136,220 133,576 Straight line rent adjustments and lease incentive amortization (3,161 ) (3,198 ) (6,677 ) (6,387 ) Amortization of intangibles and other assets included in net operating income (“NOI”) 17 49 (2 ) (323 ) Share-based compensation, net of amounts capitalized 2,213 2,154 3,946 4,265 Amortization of deferred financing costs 628 541 1,260 1,138 Amortization of net debt discounts, net of amounts capitalized 622 608 1,240 1,213 Replacement capital expenditures (22,664 ) (17,717 ) (50,874 ) (35,075 ) Other (221 ) 406 (494 ) 445 Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 46,003 $ 50,427 $ 84,619 $ 98,852 Diluted FFO per share $ 0.60 $ 0.59 $ 1.19 $ 1.17 Diluted FFO per share, as adjusted for comparability $ 0.60 $ 0.59 $ 1.19 $ 1.17 Dividends/distributions per common share/unit $ 0.285 $ 0.275 $ 0.57 $ 0.55 Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) June 30, 2023 December 31, 2022 Balance Sheet Data Properties, net of accumulated depreciation $ 3,672,235 $ 3,556,398 Total assets $ 4,246,346 $ 4,257,275 Debt per balance sheet $ 2,176,174 $ 2,231,794 Total liabilities $ 2,447,436 $ 2,509,527 Redeemable noncontrolling interests $ 22,215 $ 26,293 Total equity $ 1,776,695 $ 1,721,455 Debt to assets 51.2 % 52.4 % Net debt to adjusted book 38.4 % 39.8 % Core Portfolio Data (as of period end) Number of operating properties 192 192 Total operational square feet (in thousands) 22,878 22,849 % Occupied 93.6 % 92.8 % % Leased 95.0 % 95.3 % For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 GAAP Payout ratio: Net income 103.1 % 93.4 % 58.3 % 66.5 % Debt ratios: Net income to interest expense ratio 1.9x 2.3x 3.4x 3.2x Debt to net income ratio 17.2x 16.2x N/A N/A Non-GAAP Payout ratios: Diluted FFO 47.5 % 46.3 % 47.7 % 47.0 % Diluted FFO, as adjusted for comparability 47.3 % 46.3 % 47.6 % 46.8 % Diluted AFFO 70.5 % 62.0 % 76.6 % 63.2 % Debt ratios: Adjusted EBITDA fixed charge coverage ratio 4.9x 5.3x 5.0x 5.3x Net debt to in-place adjusted EBITDA ratio 6.3x 6.4x N/A N/A Net debt adj. for fully-leased development to in-place adj. EBITDA ratio 5.7x 5.8x N/A N/A Reconciliation of denominators for per share measures Denominator for diluted EPS 112,676 112,637 112,652 112,608 Weighted average common units 1,514 1,476 1,502 1,430 Denominator for diluted FFO per share and as adjusted for comparability 114,190 114,113 114,154 114,038 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerators for Payout Ratios Dividends on unrestricted common and deferred shares $ 31,995 $ 30,842 $ 63,984 $ 61,679 Distributions on unrestricted common units 433 407 863 811 Dividends and distributions on restricted shares and units 204 135 419 293 Total dividends and distributions for GAAP payout ratio 32,632 31,384 65,266 62,783 Dividends and distributions on antidilutive shares and units (205 ) (123 ) (421 ) (268 ) Dividends and distributions for non-GAAP payout ratios $ 32,427 $ 31,261 $ 64,845 $ 62,515 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 $ 31,642 $ 33,595 $ 112,040 $ 94,419 Interest expense 16,519 14,808 32,961 29,232 Income tax expense 190 4 315 157 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Other depreciation and amortization 609 552 1,211 1,159 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Adjustments from unconsolidated real estate JVs 1,559 760 3,263 1,518 EBITDAre 88,105 84,550 174,993 167,001 Loss on early extinguishment of debt — — — 342 Net gain on other investments — 1 — (564 ) Credit loss expense (recoveries) 238 225 305 (91 ) Business development expenses 394 385 635 711 Executive transition costs 307 137 554 137 Adjusted EBITDA 89,044 85,298 $ 176,487 $ 167,536 Pro forma NOI adjustment for property changes within period 56 127 Change in collectability of deferred rental revenue 28 231 In-place adjusted EBITDA $ 89,128 $ 85,656 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures Tenant improvements and incentives $ 32,619 $ 10,655 $ 52,605 $ 20,665 Building improvements 2,766 6,751 4,907 13,583 Leasing costs 3,542 1,748 5,292 4,018 Net (exclusions from) additions to tenant improvements and incentives (16,007 ) 474 (11,168 ) 2,282 Excluded building improvements and leasing costs (256 ) (1,911 ) (762 ) (5,473 ) Replacement capital expenditures $ 22,664 $ 17,717 $ 50,874 $ 35,075 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA Interest expense $ 16,519 $ 14,808 $ 32,961 $ 29,232 Less: Amortization of deferred financing costs (628 ) (541 ) (1,260 ) (1,138 ) Less: Amortization of net debt discounts, net of amounts capitalized (622 ) (608 ) (1,240 ) (1,213 ) COPT’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and loss on interest rate derivatives 791 233 1,564 464 Scheduled principal amortization 746 844 1,536 1,618 Capitalized interest 1,194 1,376 1,964 2,905 Denominator for fixed charge coverage-Adjusted EBITDA $ 18,000 $ 16,112 $ 35,525 $ 31,868 Reconciliation of net income to NOI from real estate operations, same properties NOI from real estate operations and same properties cash NOI from real estate operations Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Construction contract and other service revenues (14,243 ) (42,557 ) (30,063 ) (95,757 ) Depreciation and other amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Interest expense 16,519 14,808 32,961 29,232 Interest and other income, net (2,143 ) (1,593 ) (4,399 ) (3,802 ) Gain on sales of real estate from continuing operations (14 ) 19 (49,392 ) 4 Loss on early extinguishment of debt — — — 342 Equity in income of unconsolidated entities (111 ) (318 ) (47 ) (1,206 ) Unconsolidated real estate JVs NOI allocable to COPT included in equity in income of unconsolidated entities 1,671 1,080 3,313 2,160 Income tax expense 190 4 315 157 Discontinued operations — — — (29,573 ) Revenues from real estate operations from discontinued operations — — — 1,980 Property operating expenses from discontinued operations — — — (971 ) NOI from real estate operations 95,024 90,210 188,927 177,398 Non-Same Properties NOI from real estate operations (8,770 ) (6,603 ) (18,221 ) (12,365 ) Same Properties NOI from real estate operations 86,254 83,607 170,706 165,033 Straight line rent adjustments and lease incentive amortization 1,232 (1,301 ) 2,624 (3,592 ) Amortization of acquired above- and below-market rents (129 ) (97 ) (295 ) (616 ) Lease termination fees, net (1,059 ) (399 ) (2,280 ) (620 ) Tenant funded landlord assets and lease incentives (1,191 ) (1,311 ) (2,379 ) (2,821 ) Cash NOI adjustments in unconsolidated real estate JVs (70 ) (92 ) (145 ) (190 ) Same Properties Cash NOI from real estate operations $ 85,037 $ 80,407 $ 168,231 $ 157,194 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) June 30, 2023 December 31, 2022 Reconciliation of total assets to adjusted book Total assets $ 4,246,346 $ 4,257,275 Accumulated depreciation 1,334,066 1,267,434 Accumulated depreciation included in assets held for sale — 6,014 Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 226,555 222,779 COPT’s share of liabilities of unconsolidated real estate JVs 60,724 52,404 COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 7,800 6,078 Less: Property - operating lease liabilities (33,923 ) (28,759 ) Less: Property - finance lease liabilities (426 ) — Less: Cash and cash equivalents (14,273 ) (12,337 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) Adjusted book $ 5,825,895 $ 5,770,432 June 30, 2023 December 31, 2022 June 30, 2022 Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development Debt per balance sheet $ 2,176,174 $ 2,231,794 $ 2,177,811 Net discounts and deferred financing costs 21,342 23,160 23,857 COPT’s share of unconsolidated JV gross debt 52,364 52,100 26,250 Gross debt 2,249,880 2,307,054 2,227,918 Less: Cash and cash equivalents (14,273 ) (12,337 ) (20,735 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) (457 ) Net debt 2,234,633 2,294,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Net debt adjusted for fully-leased development $ 2,045,226 $ 2,198,289 $ 1,983,241 Net debt $ 2,234,633 $ 2,294,261 $ 2,206,726 Pro forma debt adjustments from subsequent event transaction proceeds N/A (189,000 ) N/A Pro forma net debt 2,234,633 2,105,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Pro forma net debt adjusted for fully-leased development $ 2,045,226 $ 2,009,289 $ 1,983,241 View source version on businesswire.com: https://www.businesswire.com/news/home/20230727043433/en/Contacts IR Contacts: Venkat Kommineni, CFA 443-285-5587 venkat.kommineni@copt.com Michelle Layne 443-285-5452 michelle.layne@copt.com
EPS of $0.27 for 2Q23; FFO per Share, as Adjusted for Comparability, of $0.60 Exceeded High-End of Guidance Increased Midpoint of 2023 FFO per Share Guidance by 2-cents to $2.40 Core Portfolio 93.6% Occupied and 95.0% Leased Same-Property Cash NOI Increased 5.8% in 2Q23 and 7.0% Year-to-Date Raising Same-Property Cash NOI Guidance for the Year by 100 Basis Points, to 4.5%-5.5% 1.5 million SF of Active Developments are 92% Leased Strong Leasing Volume in 1H23; Well Positioned to Achieve 2023 Goals Total Leasing of 891,000 SF in 2Q23 and 1.7 million SF Year-to-Date 88,000 SF of Vacancy Leasing in 2Q23 and 187,000 SF Year-to-Date On Track to Achieve Annual Goal of 400,000 SF Tenant Retention of 89% in 2Q23 and 83% Year-to-Date On Track to Achieve Annual Goal of 80%-85% 495,000 SF of Development Leasing Year-to-Date On Track to Achieve Annual Goal of 700,000 SF
Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announced results for the second quarter ended June 30, 2023. Management Comments Stephen E. Budorick, COPT’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which has concentrated our portfolio near priority U.S. defense installations, continues to produce solid results. Since 2022, the significant growth in defense spending has materialized into elevated tenant demand for our portfolio, resulting in a 96.8% leased rate in our Defense/IT Locations segment, which accounts for 90% of our core portfolio annualized rental revenue. This is the highest leased rate since we started reporting the segment in 2015. Our second quarter results were strong as FFO per share exceeded the midpoint of our guidance range by $0.02. Given our outperformance year to date, we are increasing the midpoint of our full year FFO per share guidance by $0.02 to $2.40 per share, which represents a 2% increase over 2022’s results. Same-property cash NOI increased 5.8% for 2Q23 over 2Q22, and 7.0% for the first half of 2023 over the first half of 2022, which led us to again increase our full year change in cash NOI guidance by 100 basis points. Our leasing activity is right on track as we are roughly halfway towards our full year vacancy leasing goal and 70% towards our development leasing goal. Our investment grade rated balance sheet is well positioned to navigate the challenging capital markets environment as we have no significant debt maturities until 2026, with 96% of our NOI unencumbered. We remain confident in our strategy and expect to continue to allocate capital to investments at our Defense/IT Locations that will support continued growth in FFO per share and shareholder value.” Financial Highlights 2nd Quarter Financial Results: Diluted earnings per share (“EPS”) was $0.27 for the quarter ended June 30, 2023 compared to $0.29 for the quarter ended June 30, 2022. Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition, and FFOPS, as adjusted for comparability, were $0.60 for the quarter ended June 30, 2023 compared to $0.59 for the quarter ended June 30, 2022. Operating Performance Highlights Operating Portfolio Summary: At June 30, 2023, the Company’s 22.9 million square foot core portfolio was 93.6% occupied and 95.0% leased. Same-Property Performance: At June 30, 2023, the Company’s 20.6 million square foot same-property portfolio was 92.8% occupied and 94.4% leased. The Company’s same-property cash NOI increased 5.8% for the three months ended June 30, 2023 compared to the same period in 2022. Leasing: Total Square Feet Leased: For the quarter ended June 30, 2023, the Company leased 891,000 square feet, including 803,000 square feet of renewals and 88,000 square feet of vacancy leasing. For the six months ended June 30, 2023, the Company executed 1.7 million square feet of total leasing, including 1.0 million square feet of renewals, 187,000 square feet of vacancy leasing, and 495,000 square feet in development projects. Tenant Retention Rates: During the quarter and six months ended June 30, 2023, the Company renewed 89.0% and 82.7%, respectively, of expiring square feet. Rent Spreads & Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2023, straight-line rents on renewals increased 7.4% and 6.9%, respectively, and cash rents on renewed space increased 1.3% and 1.1%, respectively. For the same time periods, annual escalations on renewing leases averaged 2.6%. Lease Terms: In the quarter ended June 30, 2023, lease terms averaged 5.0 years on renewing leases and 6.9 years on vacancy leasing. For the six months ended June 30, 2023, lease terms averaged 4.5 years on renewing leases, 7.4 years on vacancy leasing, and 14.3 years on development leasing. Investment Activity Highlights Development Pipeline: The Company’s development pipeline consists of nine properties totaling 1.5 million square feet that were 92% leased at June 30, 2023. These projects represent a total estimated investment of $480.8 million, of which $222.1 million has been spent. Balance Sheet and Capital Transaction Highlights For the quarter ended June 30, 2023, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.9x. At June 30, 2023, the Company’s net debt to in-place adjusted EBITDA ratio was 6.3x and its net debt adjusted for fully-leased development to in-place adjusted EBITDA ratio was 5.7x. At June 30, 2023, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.1% with a weighted average maturity of 6.2 years; additionally, 95.6% of the Company’s debt was subject to fixed interest rates. Associated Supplemental Presentation Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its second quarter 2023 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT’s Investors website: https://investors.copt.com/financial-information/financial-results 2023 Guidance Management is updating its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of $1.46-$1.52, and $2.35-$2.41, respectively, to new ranges of $1.49-$1.53, and $2.38-$2.42, respectively. Management is establishing third quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.26-$0.28 and $0.59-$0.61, 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 September 30, 2023 Year Ending December 31, 2023 Low High Low High Diluted EPS $ 0.26 $ 0.28 $ 1.49 $ 1.53 Real estate-related depreciation and amortization 0.33 0.33 1.32 1.32 Gain on sales of real estate — — (0.43 ) (0.43 ) Diluted FFOPS, Nareit definition and as adjusted for comparability $ 0.59 $ 0.61 $ 2.38 $ 2.42 Conference Call Information Management will discuss second quarter 2023 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, July 28, 2023 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/BI48eea2c0fe934b24aefdd77f5c963ea1 The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT’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’s Investors website. 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 COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what the Company believes are growing, durable, priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 192 properties encompassed 22.9 million square feet and was 95% 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, 2022. Source: Corporate Office Properties Trust Corporate Office Properties Trust Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Revenues Lease revenue $ 153,682 $ 142,277 $ 304,242 $ 283,666 Other property revenue 1,271 969 2,392 1,860 Construction contract and other service revenues 14,243 42,557 30,063 95,757 Total revenues 169,196 185,803 336,697 381,283 Operating expenses Property operating expenses 61,600 54,116 121,020 111,297 Depreciation and amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Total operating expenses 123,113 139,288 245,219 291,710 Interest expense (16,519 ) (14,808 ) (32,961 ) (29,232 ) Interest and other income, net 2,143 1,593 4,399 3,802 Gain on sales of real estate 14 (19 ) 49,392 (4 ) Loss on early extinguishment of debt — — — (342 ) Income from continuing operations before equity in income of unconsolidated entities and income taxes 31,721 33,281 112,308 63,797 Equity in income of unconsolidated entities 111 318 47 1,206 Income tax expense (190 ) (4 ) (315 ) (157 ) Income from continuing operations 31,642 33,595 112,040 64,846 Discontinued operations — — — 29,573 Net Income 31,642 33,595 112,040 94,419 Net income attributable to noncontrolling interests: Common units in the Operating Partnership (“OP”) (516 ) (496 ) (1,809 ) (1,352 ) Other consolidated entities (839 ) (789 ) (1,165 ) (1,438 ) Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Earnings per share (“EPS”) computation: Numerator for diluted EPS: Net income attributable to common shareholders $ 30,287 $ 32,310 $ 109,066 $ 91,629 Amount allocable to share-based compensation awards (98 ) (75 ) (349 ) (259 ) Redeemable noncontrolling interests (51 ) (30 ) (115 ) (69 ) Numerator for diluted EPS $ 30,138 $ 32,205 $ 108,602 $ 91,301 Denominator: Weighted average common shares - basic 112,188 112,082 112,157 112,052 Dilutive effect of share-based compensation awards 426 429 418 427 Dilutive effect of redeemable noncontrolling interests 62 126 77 129 Weighted average common shares - diluted 112,676 112,637 112,652 112,608 Diluted EPS $ 0.27 $ 0.29 $ 0.96 $ 0.81 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Depreciation and amortization on unconsolidated real estate JVs 805 525 1,606 1,051 Funds from operations (“FFO”) 70,033 68,951 138,849 135,986 FFO allocable to other noncontrolling interests (1,239 ) (1,178 ) (1,947 ) (2,220 ) Basic FFO allocable to share-based compensation awards (480 ) (357 ) (946 ) (719 ) Basic FFO available to common share and common unit holders (“Basic FFO”) 68,314 67,416 135,956 133,047 Redeemable noncontrolling interests (28 ) 4 (58 ) (2 ) Diluted FFO adjustments allocable to share-based compensation awards 37 27 76 54 Diluted FFO available to common share and common unit holders (“Diluted FFO”) 68,323 67,447 135,974 133,099 Loss on early extinguishment of debt — — — 342 Executive transition costs 248 137 248 137 Diluted FFO comparability adjustments allocable to share-based compensation awards (2 ) — (2 ) (2 ) Diluted FFO available to common share and common unit holders, as adjusted for comparability 68,569 67,584 136,220 133,576 Straight line rent adjustments and lease incentive amortization (3,161 ) (3,198 ) (6,677 ) (6,387 ) Amortization of intangibles and other assets included in net operating income (“NOI”) 17 49 (2 ) (323 ) Share-based compensation, net of amounts capitalized 2,213 2,154 3,946 4,265 Amortization of deferred financing costs 628 541 1,260 1,138 Amortization of net debt discounts, net of amounts capitalized 622 608 1,240 1,213 Replacement capital expenditures (22,664 ) (17,717 ) (50,874 ) (35,075 ) Other (221 ) 406 (494 ) 445 Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 46,003 $ 50,427 $ 84,619 $ 98,852 Diluted FFO per share $ 0.60 $ 0.59 $ 1.19 $ 1.17 Diluted FFO per share, as adjusted for comparability $ 0.60 $ 0.59 $ 1.19 $ 1.17 Dividends/distributions per common share/unit $ 0.285 $ 0.275 $ 0.57 $ 0.55 Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) June 30, 2023 December 31, 2022 Balance Sheet Data Properties, net of accumulated depreciation $ 3,672,235 $ 3,556,398 Total assets $ 4,246,346 $ 4,257,275 Debt per balance sheet $ 2,176,174 $ 2,231,794 Total liabilities $ 2,447,436 $ 2,509,527 Redeemable noncontrolling interests $ 22,215 $ 26,293 Total equity $ 1,776,695 $ 1,721,455 Debt to assets 51.2 % 52.4 % Net debt to adjusted book 38.4 % 39.8 % Core Portfolio Data (as of period end) Number of operating properties 192 192 Total operational square feet (in thousands) 22,878 22,849 % Occupied 93.6 % 92.8 % % Leased 95.0 % 95.3 % For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 GAAP Payout ratio: Net income 103.1 % 93.4 % 58.3 % 66.5 % Debt ratios: Net income to interest expense ratio 1.9x 2.3x 3.4x 3.2x Debt to net income ratio 17.2x 16.2x N/A N/A Non-GAAP Payout ratios: Diluted FFO 47.5 % 46.3 % 47.7 % 47.0 % Diluted FFO, as adjusted for comparability 47.3 % 46.3 % 47.6 % 46.8 % Diluted AFFO 70.5 % 62.0 % 76.6 % 63.2 % Debt ratios: Adjusted EBITDA fixed charge coverage ratio 4.9x 5.3x 5.0x 5.3x Net debt to in-place adjusted EBITDA ratio 6.3x 6.4x N/A N/A Net debt adj. for fully-leased development to in-place adj. EBITDA ratio 5.7x 5.8x N/A N/A Reconciliation of denominators for per share measures Denominator for diluted EPS 112,676 112,637 112,652 112,608 Weighted average common units 1,514 1,476 1,502 1,430 Denominator for diluted FFO per share and as adjusted for comparability 114,190 114,113 114,154 114,038 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerators for Payout Ratios Dividends on unrestricted common and deferred shares $ 31,995 $ 30,842 $ 63,984 $ 61,679 Distributions on unrestricted common units 433 407 863 811 Dividends and distributions on restricted shares and units 204 135 419 293 Total dividends and distributions for GAAP payout ratio 32,632 31,384 65,266 62,783 Dividends and distributions on antidilutive shares and units (205 ) (123 ) (421 ) (268 ) Dividends and distributions for non-GAAP payout ratios $ 32,427 $ 31,261 $ 64,845 $ 62,515 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 $ 31,642 $ 33,595 $ 112,040 $ 94,419 Interest expense 16,519 14,808 32,961 29,232 Income tax expense 190 4 315 157 Real estate-related depreciation and amortization 37,600 34,812 74,595 69,076 Other depreciation and amortization 609 552 1,211 1,159 Gain on sales of real estate from continuing and discontinued operations (14 ) 19 (49,392 ) (28,560 ) Adjustments from unconsolidated real estate JVs 1,559 760 3,263 1,518 EBITDAre 88,105 84,550 174,993 167,001 Loss on early extinguishment of debt — — — 342 Net gain on other investments — 1 — (564 ) Credit loss expense (recoveries) 238 225 305 (91 ) Business development expenses 394 385 635 711 Executive transition costs 307 137 554 137 Adjusted EBITDA 89,044 85,298 $ 176,487 $ 167,536 Pro forma NOI adjustment for property changes within period 56 127 Change in collectability of deferred rental revenue 28 231 In-place adjusted EBITDA $ 89,128 $ 85,656 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures Tenant improvements and incentives $ 32,619 $ 10,655 $ 52,605 $ 20,665 Building improvements 2,766 6,751 4,907 13,583 Leasing costs 3,542 1,748 5,292 4,018 Net (exclusions from) additions to tenant improvements and incentives (16,007 ) 474 (11,168 ) 2,282 Excluded building improvements and leasing costs (256 ) (1,911 ) (762 ) (5,473 ) Replacement capital expenditures $ 22,664 $ 17,717 $ 50,874 $ 35,075 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA Interest expense $ 16,519 $ 14,808 $ 32,961 $ 29,232 Less: Amortization of deferred financing costs (628 ) (541 ) (1,260 ) (1,138 ) Less: Amortization of net debt discounts, net of amounts capitalized (622 ) (608 ) (1,240 ) (1,213 ) COPT’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and loss on interest rate derivatives 791 233 1,564 464 Scheduled principal amortization 746 844 1,536 1,618 Capitalized interest 1,194 1,376 1,964 2,905 Denominator for fixed charge coverage-Adjusted EBITDA $ 18,000 $ 16,112 $ 35,525 $ 31,868 Reconciliation of net income to NOI from real estate operations, same properties NOI from real estate operations and same properties cash NOI from real estate operations Net income $ 31,642 $ 33,595 $ 112,040 $ 94,419 Construction contract and other service revenues (14,243 ) (42,557 ) (30,063 ) (95,757 ) Depreciation and other amortization associated with real estate operations 37,600 34,812 74,595 69,076 Construction contract and other service expenses 13,555 41,304 28,756 92,954 General and administrative expenses 7,287 6,467 15,283 13,137 Leasing expenses 2,345 1,888 4,344 3,762 Business development expenses and land carry costs 726 701 1,221 1,484 Interest expense 16,519 14,808 32,961 29,232 Interest and other income, net (2,143 ) (1,593 ) (4,399 ) (3,802 ) Gain on sales of real estate from continuing operations (14 ) 19 (49,392 ) 4 Loss on early extinguishment of debt — — — 342 Equity in income of unconsolidated entities (111 ) (318 ) (47 ) (1,206 ) Unconsolidated real estate JVs NOI allocable to COPT included in equity in income of unconsolidated entities 1,671 1,080 3,313 2,160 Income tax expense 190 4 315 157 Discontinued operations — — — (29,573 ) Revenues from real estate operations from discontinued operations — — — 1,980 Property operating expenses from discontinued operations — — — (971 ) NOI from real estate operations 95,024 90,210 188,927 177,398 Non-Same Properties NOI from real estate operations (8,770 ) (6,603 ) (18,221 ) (12,365 ) Same Properties NOI from real estate operations 86,254 83,607 170,706 165,033 Straight line rent adjustments and lease incentive amortization 1,232 (1,301 ) 2,624 (3,592 ) Amortization of acquired above- and below-market rents (129 ) (97 ) (295 ) (616 ) Lease termination fees, net (1,059 ) (399 ) (2,280 ) (620 ) Tenant funded landlord assets and lease incentives (1,191 ) (1,311 ) (2,379 ) (2,821 ) Cash NOI adjustments in unconsolidated real estate JVs (70 ) (92 ) (145 ) (190 ) Same Properties Cash NOI from real estate operations $ 85,037 $ 80,407 $ 168,231 $ 157,194 Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) June 30, 2023 December 31, 2022 Reconciliation of total assets to adjusted book Total assets $ 4,246,346 $ 4,257,275 Accumulated depreciation 1,334,066 1,267,434 Accumulated depreciation included in assets held for sale — 6,014 Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 226,555 222,779 COPT’s share of liabilities of unconsolidated real estate JVs 60,724 52,404 COPT’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 7,800 6,078 Less: Property - operating lease liabilities (33,923 ) (28,759 ) Less: Property - finance lease liabilities (426 ) — Less: Cash and cash equivalents (14,273 ) (12,337 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) Adjusted book $ 5,825,895 $ 5,770,432 June 30, 2023 December 31, 2022 June 30, 2022 Reconciliation of debt to net debt, net debt adjusted for fully-leased development and pro forma net debt adjusted for fully-leased development Debt per balance sheet $ 2,176,174 $ 2,231,794 $ 2,177,811 Net discounts and deferred financing costs 21,342 23,160 23,857 COPT’s share of unconsolidated JV gross debt 52,364 52,100 26,250 Gross debt 2,249,880 2,307,054 2,227,918 Less: Cash and cash equivalents (14,273 ) (12,337 ) (20,735 ) Less: COPT’s share of cash of unconsolidated real estate JVs (974 ) (456 ) (457 ) Net debt 2,234,633 2,294,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Net debt adjusted for fully-leased development $ 2,045,226 $ 2,198,289 $ 1,983,241 Net debt $ 2,234,633 $ 2,294,261 $ 2,206,726 Pro forma debt adjustments from subsequent event transaction proceeds N/A (189,000 ) N/A Pro forma net debt 2,234,633 2,105,261 2,206,726 Costs incurred on fully-leased development properties (189,407 ) (95,972 ) (223,485 ) Pro forma net debt adjusted for fully-leased development $ 2,045,226 $ 2,009,289 $ 1,983,241 View source version on businesswire.com: https://www.businesswire.com/news/home/20230727043433/en/
IR Contacts: Venkat Kommineni, CFA 443-285-5587 venkat.kommineni@copt.com Michelle Layne 443-285-5452 michelle.layne@copt.com
