EPS of $0.34

FFO per Share, as Adjusted for Comparability, of $0.68

6.3% FFO per Share Growth Year-over-Year

2-cents above the Midpoint of Guidance

Increased Midpoint of 2025 FFO per Share Guidance by 1-cent to $2.67

Implies 3.9% FFO per Share Growth for the Year

Same Property Cash NOI Increased 2.2% in 2Q25 and 4.6% Year-to-Date

Increased Midpoint of 2025 Guidance for the Year by 50 basis points to 3.25%

Continued Strong Occupancy and Leased Levels

Total Portfolio 94.0% Occupied and 95.6% Leased

Defense/IT Portfolio 95.6% Occupied and 96.8% Leased

Strong Leasing in 1H25; On Track to Exceed Initial 2025 Goals

Total Leasing in 2Q25 and 1H25 of 724,000 SF and 1.4 million SF, respectively

Vacancy Leasing in 2Q25 and 1H25 of 233,000 SF and 353,000 SF, respectively

Increased Annual Target to 450,000 SF from 400,000 SF

Tenant Retention in 2Q25 and 1H25 of 90% and 82%, respectively

Increased Midpoint of 2025 Guidance by 250 basis points to 82.5%

Investment Leasing in 2Q25 and 1H25 of 14,000 SF and 103,000 SF, respectively

COPT Defense Properties ("COPT Defense" or the "Company") (NYSE:CDP) announced results for the second quarter ended June 30, 2025.

Management Comments

Stephen E. Budorick, COPT Defense's President & Chief Executive Officer, commented, "Our Defense/IT investment strategy, which concentrates our portfolio near priority U.S. defense installations, continued to generate strong results during the second quarter. FFO per share exceeded the midpoint of our guidance range by $0.02. Based on this outperformance, and our forecast for the remainder of the year, we increased the midpoint of 2025 FFO per share guidance by $0.01 to $2.67, which implies nearly 4% year-over-year growth.

We are exceeding our plan in several areas and raised 2025 guidance on multiple key metrics. We increased the midpoint of 2025 guidance for same property cash NOI growth by 50 basis points to 3.25%, and tenant retention by 250 basis points to 82.5%. Based on our excellent leasing activity, we raised our target for vacancy leasing by 12.5% from 400,000 square feet to 450,000 square feet, with 353,000 square feet signed in the first half of the year, and a strong pipeline of deals in advanced negotiations.

Our favorable business outlook is further supported by continued growth in defense spending as the One Big Beautiful Bill Act, which was signed into law on July 4, 2025, adds $150 billion to defense spending over the next few years, with $113 billion allocated to FY 2026. Combining this allocation with the President's FY 2026 budget request, this amounts to nearly $950 billion and represents a 13% year-over-year increase, with additional funding directed towards the priority missions we support including cybersecurity, intelligence, surveillance and reconnaissance, missile defense, unmanned autonomous vehicles, and naval fleet and aviation activity, among others. We expect this increase in defense spending will continue to support our strong vacancy leasing volumes and external growth through development and drive earnings growth and shareholder value. Looking forward, we continue to anticipate compound annual FFO per share growth of roughly 4% between 2023 to 2026."

Financial Highlights

2nd Quarter Financial Results:

> Diluted earnings per share ("EPS") was $0.34 for the quarter ended June 30, 2025, compared to $0.31 for the quarter ended June 30, 2024.

> Diluted funds from operations per share ("FFOPS"), as calculated in accordance with Nareit's definition and as adjusted for comparability, was $0.68 for the quarter ended June 30, 2025, compared to $0.64 for the quarter ended June 30, 2024.

Operating Performance Highlights

Operating Portfolio Summary:

> At June 30, 2025, the Company's 24.6 million square foot total portfolio was 94.0% occupied and 95.6% leased, which includes the 22.6 million square foot Defense/IT Portfolio that was 95.6% occupied and 96.8% leased.

> During the quarter ended June 30, 2025, the Company placed into service 26,000 square feet of development that was 100% leased.

Same Property Performance:

> At June 30, 2025, the Company's 23.9 million square foot Same Property portfolio was 94.5% occupied and 95.7% leased.

> The Company's Same Property cash NOI increased 2.2% in the quarter ended June 30, 2025, compared to the same period in 2024.

Leasing:

> Total Square Feet Leased: For the quarter ended June 30, 2025, the Company leased 724,000 square feet, including 477,000 square feet of renewals, 233,000 square feet of vacancy leasing, and 14,000 square feet of investment leasing. For the six months ended June 30, 2025, the Company executed 1.4 million square feet of total leasing, including 915,000 square feet of renewals, 353,000 square feet of vacancy leasing, and 103,000 square feet of investment leasing.

> Tenant Retention Rates: During the quarter ended June 30, 2025, the Company renewed 89.7% of expiring square feet in its total portfolio. During the six months ended June 30, 2025, the Company renewed 81.9% of expiring square feet in its total portfolio.

> Rent Spreads and Average Escalations on Renewing Leases: For the quarter and six months ended June 30, 2025, straight-line rents on renewals increased 9.5% and 8.8%, respectively, and cash rents on renewed space decreased 3.1% and 2.0%, respectively, while annual escalations on renewing leases averaged 2.4% and 2.5%, respectively.

> Lease Terms: In the quarter ended June 30, 2025, lease terms averaged 6.2 years on renewing leases, 7.9 years on vacancy leasing, and 5.4 years on investment leasing. For the six months ended June 30, 2025, lease terms averaged 4.9 years on renewing leases, 7.6 years on vacancy leasing, and 9.8 years on investment leasing.

Investment Activity Highlights

> Development Pipeline: The Company's development pipeline consists of five properties totaling 756,000 square feet that were 62% leased as of June 30, 2025. These projects represent a total estimated investment of $309 million, of which $134 million was spent as of June 30, 2025.

Balance Sheet and Capital Transaction Highlights

> For the quarter ended June 30, 2025, the Company's adjusted EBITDA fixed charge coverage ratio was 4.9x.

> At June 30, 2025, the Company's net debt to in-place adjusted EBITDA ratio was 5.9x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.8x.

> At June 30, 2025, and including the effect of interest rate swaps, the Company's weighted average effective interest rate on its consolidated debt portfolio was 3.4% with a weighted average maturity of 4.2 years, and 97% of the Company's debt was subject to fixed interest rates.

Associated Supplemental Presentation

Prior to the call, the Company will post a slide presentation to accompany management's prepared remarks for its second quarter 2025 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results' section of COPT Defense's Investors website: https://investors.copt.com/financial-information/financial-results

2025 Guidance

Management is revising and increasing the midpoint of its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability of $1.28-$1.34 and $2.63-$2.69, respectively, to new ranges of $1.30-$1.34 and $2.65-$2.69, respectively. Management is establishing third quarter guidance for diluted EPS and diluted FFOPS per Nareit and as adjusted for comparability at $0.32-$0.34 and $0.66-$0.68, respectively. Reconciliations of projected diluted EPS to projected diluted FFOPS, in accordance with Nareit and as adjusted for comparability, are as follows:

	Quarter ending				Year ending
Reconciliation of Diluted EPS to FFOPS, per Nareit, and As Adjusted for Comparability	September 30, 2025				December 31, 2025
	Low		High		Low		High

Diluted EPS	$	0.32	$	0.34	$	1.30	$	1.34
Real estate-related depreciation and amortization		0.34		0.34		1.35		1.35
Diluted FFOPS, Nareit definition and as adjusted for comparability	$	0.66	$	0.68	$	2.65	$	2.69

The Company detailed its initial full year guidance, with supporting assumptions, in a separate press release issued February 6, 2025; that release can be found in the ‘News & Events – Press Releases' section of COPT Defense's Investors website: https://investors.copt.com/news-events/press-releases

Conference Call Information

Management will discuss second quarter 2025 results on its conference call tomorrow, details of which are listed below:

Conference Call Date:	Tuesday, July 29, 2025
Time:	12:00 p.m. Eastern Time

Participants must register for the conference call at the link below to receive the dial-in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time: https://register-conf.media-server.com/register/BI89e5bfa081c749b38c8796f648dd9c1c

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

Replay Information

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

Definitions

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

About COPT Defense

COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government ("USG") defense installations and missions (referred to as its Defense/IT Portfolio). The Company's tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of June 30, 2025, the Company's Defense/IT Portfolio of 198 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.6 million square feet and was 96.8% leased.

Forward-Looking Information

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

The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

COPT Defense Properties
Summary Financial Data
(unaudited)
(dollars and shares in thousands, except per share data)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Revenues
Lease revenue	$	175,598		$	165,619		$	350,906		$	331,052
Other property revenue		1,859			1,466			4,148			2,696
Construction contract and other service revenues		12,458			20,258			22,717			46,861
Total revenues		189,915			187,343			377,771			380,609
Operating expenses
Property operating expenses		66,915			63,410			138,955			130,156
Depreciation and amortization associated with real estate operations		39,573			38,161			78,932			76,512
Construction contract and other service expenses		11,873			19,612			21,578			45,619
General and administrative expenses		8,202			8,591			16,350			16,969
Leasing expenses		2,613			2,462			5,612			4,649
Business development expenses and land carry costs		1,096			979			2,105			2,161
Total operating expenses		130,272			133,215			263,532			276,066
Interest expense		(20,938	)		(20,617	)		(41,442	)		(41,384	)
Interest and other income, net		1,223			2,884			2,791			7,006
Gain on sales of real estate		—			—			300			—
Income before equity in income of unconsolidated entities and income taxes		39,928			36,395			75,888			70,165
Equity in income of unconsolidated entities		355			26			726			95
Income tax expense		(117	)		(14	)		(220	)		(182	)
Net income		40,166			36,407			76,394			70,078
Net income attributable to noncontrolling interests
Common units in the Operating Partnership ("OP")		(846	)		(694	)		(1,572	)		(1,302	)
Other consolidated entities		(973	)		(599	)		(1,735	)		(1,053	)
Net income attributable to common shareholders	$	38,347		$	35,114		$	73,087		$	67,723

Earnings per share ("EPS") computation
Numerator for diluted EPS
Net income attributable to common shareholders	$	38,347		$	35,114		$	73,087		$	67,723
Amount allocable to share-based compensation awards		(112	)		(92	)		(229	)		(215	)
Numerator for diluted EPS	$	38,235		$	35,022		$	72,858		$	67,508
Denominator
Weighted average common shares - basic		112,459			112,293			112,421			112,261
Dilutive effect of share-based compensation awards		765			492			744			501
Weighted average common shares - diluted		113,224			112,785			113,165			112,762
Diluted EPS	$	0.34		$	0.31		$	0.64		$	0.60

COPT Defense Properties
Summary Financial Data
(unaudited)
(dollars and shares in thousands, except per share data)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Net income	$	40,166		$	36,407		$	76,394		$	70,078
Real estate-related depreciation and amortization		39,573			38,161			78,932			76,512
Gain on sales of real estate		—			—			(300	)		—
Depreciation and amortization on unconsolidated real estate JVs		732			778			1,473			1,555
Funds from operations ("FFO")		80,471			75,346			156,499			148,145
FFO allocable to other noncontrolling interests		(1,382	)		(984	)		(2,540	)		(1,820	)
Basic FFO allocable to share-based compensation awards		(550	)		(599	)		(1,080	)		(1,186	)
Basic FFO available to common share and common unit holders ("Basic FFO")		78,539			73,763			152,879			145,139
Redeemable noncontrolling interest		—			471			—			940
Diluted FFO adjustments allocable to share-based compensation awards		96			46			201			94
Diluted FFO available to common share and common unit holders ("Diluted FFO")		78,635			74,280			153,080			146,173
Executive transition costs		—			81			—			158
Diluted FFO comparability adjustments allocable to share-based compensation awards		—			(1	)		—			(1	)
Diluted FFO available to common share and common unit holders, as adjusted for comparability		78,635			74,360			153,080			146,330
Straight line rent adjustments and lease incentive amortization		(1,836	)		3,788			(3,535	)		7,261
Amortization of intangibles and other assets included in net operating income ("NOI")		64			211			226			333
Share-based compensation, net of amounts capitalized		2,924			2,564			5,778			5,209
Amortization of deferred financing costs		657			681			1,324			1,366
Amortization of net debt discounts, net of amounts capitalized		1,060			1,023			2,111			2,037
Replacement capital expenditures		(23,919	)		(21,250	)		(45,383	)		(42,026	)
Other		75			58			156			195
Diluted adjusted funds from operations available to common share and common unit holders ("Diluted AFFO")	$	57,660		$	61,435		$	113,757		$	120,705
Diluted FFO per share	$	0.68		$	0.64		$	1.33		$	1.27
Diluted FFO per share, as adjusted for comparability	$	0.68		$	0.64		$	1.33		$	1.27
Dividends/distributions per common share/unit	$	0.305		$	0.295		$	0.61		$	0.59

COPT Defense Properties
Summary Financial Data
(unaudited)
(Dollars and shares in thousands, except per share data)

	June 30, 2025			December 31, 2024
Balance Sheet Data
Properties, net of accumulated depreciation	$	3,682,556		$	3,630,526
Total assets	$	4,286,950		$	4,254,191
Debt per balance sheet	$	2,438,591		$	2,391,755
Total liabilities	$	2,717,951		$	2,693,624
Redeemable noncontrolling interest	$	23,258		$	23,974
Total equity	$	1,545,741		$	1,536,593
Debt to assets		56.9	%		56.2	%
Net debt to adjusted book		40.6	%		40.4	%

Defense/IT Portfolio Data (as of period end)
Number of operating properties		198			197
Total operational square feet (in thousands)		22,583			22,549
% Occupied		95.6	%		95.4	%
% Leased		96.8	%		96.7	%

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2025	2024	2025	2024
GAAP
Payout ratio
Net income	87.7%	93.1%	92.2%	96.8%
Debt ratios
Net income to interest expense ratio	1.9x	1.8x	1.8x	1.7x
Debt to net income ratio	15.2x	16.4x	N/A	N/A
Non-GAAP
Payout ratios
Diluted FFO	44.5%	45.3%	45.7%	46.0%
Diluted FFO, as adjusted for comparability	44.5%	45.3%	45.7%	46.0%
Diluted AFFO	60.7%	54.8%	61.5%	55.8%
Debt ratios
Adjusted EBITDA fixed charge coverage ratio	4.9x	4.7x	4.8x	4.6x
Net debt to in-place adjusted EBITDA ratio	5.9x	6.0x	N/A	N/A
Net debt adj. for fully-leased investment properties to in-place adj. EBITDA ratio	5.8x	5.9x	N/A	N/A

Reconciliation of denominators for per share measures
Denominator for diluted EPS	113,224	112,785	113,165	112,762
Weighted average common units	2,177	1,703	2,113	1,664
Redeemable noncontrolling interest	—	926	—	937
Denominator for diluted FFO per share and as adjusted for comparability	115,401	115,414	115,278	115,363

COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Numerators for Payout Ratios
Dividends on unrestricted common and deferred shares	$	34,324		$	33,153		$	68,642		$	66,296
Distributions on unrestricted common units		666			505			1,327			1,005
Dividends and distributions on restricted shares and units		218			238			454			505
Total dividends and distributions for GAAP payout ratio		35,208			33,896			70,423			67,806
Dividends and distributions on antidilutive shares and units		(194	)		(241	)		(407	)		(507	)
Dividends and distributions for non-GAAP payout ratios	$	35,014		$	33,655		$	70,016		$	67,299

Reconciliation of net income to earnings before interest, income taxes, depreciation and amortization for real estate ("EBITDAre"), adjusted EBITDA and in-place adjusted EBITDA
Net income	$	40,166		$	36,407		$	76,394		$	70,078
Interest expense		20,938			20,617			41,442			41,384
Income tax expense		117			14			220			182
Real estate-related depreciation and amortization		39,573			38,161			78,932			76,512
Other depreciation and amortization		468			564			1,010			1,172
Gain on sales of real estate		—			—			(300	)		—
Adjustments from unconsolidated real estate JVs		1,515			1,709			3,033			3,380
EBITDAre		102,777			97,472			200,731			192,708
Credit loss expense		1,187			436			1,702			458
Business development expenses		741			603			1,334			1,233
Executive transition costs		21			81			78			511
Net gain on other investments		—			—			—			(477	)
Adjusted EBITDA		104,726			98,592		$	203,845		$	194,433
Pro forma NOI adjustment for property changes within period		57			—
Change in collectability of deferred rental revenue		20			27
In-place adjusted EBITDA	$	104,803		$	98,619

Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures
Tenant improvements and incentives	$	15,293		$	15,045		$	29,051		$	27,821
Building improvements		5,641			5,705			7,513			10,658
Leasing costs		4,929			3,110			8,390			6,700
Net (exclusions from) additions to tenant improvements and incentives		(241	)		(1,040	)		3,297			(724	)
Excluded building improvements		(1,703	)		(1,570	)		(1,904	)		(2,388	)
Excluded leasing costs		—			—			(964	)		(41	)
Replacement capital expenditures	$	23,919		$	21,250		$	45,383		$	42,026

COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA
Interest expense	$	20,938		$	20,617		$	41,442		$	41,384
Less: Amortization of deferred financing costs		(657	)		(681	)		(1,324	)		(1,366	)
Less: Amortization of net debt discounts, net of amounts capitalized		(1,060	)		(1,023	)		(2,111	)		(2,037	)
COPT Defense's share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and gain or loss on interest rate derivatives		759			808			1,511			1,612
Scheduled principal amortization		457			662			918			1,431
Capitalized interest		1,126			643			2,053			1,232
Denominator for fixed charge coverage-Adjusted EBITDA	$	21,563		$	21,026		$	42,489		$	42,256

Reconciliation of net income to NOI from real estate operations, same property NOI from real estate operations and same property cash NOI from real estate operations
Net income	$	40,166		$	36,407		$	76,394		$	70,078
Construction contract and other service revenues		(12,458	)		(20,258	)		(22,717	)		(46,861	)
Depreciation and other amortization associated with real estate operations		39,573			38,161			78,932			76,512
Construction contract and other service expenses		11,873			19,612			21,578			45,619
General and administrative expenses		8,202			8,591			16,350			16,969
Leasing expenses		2,613			2,462			5,612			4,649
Business development expenses and land carry costs		1,096			979			2,105			2,161
Interest expense		20,938			20,617			41,442			41,384
Interest and other income, net		(1,223	)		(2,884	)		(2,791	)		(7,006	)
Gain on sales of real estate		—			—			(300	)		—
Equity in income of unconsolidated entities		(355	)		(26	)		(726	)		(95	)
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income of unconsolidated entities		1,870			1,735			3,759			3,475
Income tax expense		117			14			220			182
NOI from real estate operations		112,412			105,410			219,858			207,067
Non-Same Property NOI from real estate operations		(3,747	)		(1,318	)		(6,917	)		(1,863	)
Same Property NOI from real estate operations		108,665			104,092			212,941			205,204
Straight line rent adjustments and lease incentive amortization		(9	)		182			145			4,095
Amortization of acquired above- and below-market rents		(69	)		(69	)		(138	)		(138	)
Lease termination fees, net		(728	)		(881	)		(1,562	)		(1,656	)
Tenant funded landlord assets and lease incentives		(4,929	)		(2,598	)		(8,034	)		(12,962	)
Cash NOI adjustments in unconsolidated real estate JVs		(220	)		(254	)		(480	)		(516	)
Same Property Cash NOI from real estate operations	$	102,710		$	100,472		$	202,872		$	194,027

COPT Defense Properties
Summary Financial Data
(unaudited)
(in thousands)

	June 30, 2025			December 31, 2024
Reconciliation of total assets to adjusted book
Total assets	$	4,286,950		$	4,254,191
Accumulated depreciation		1,608,032			1,537,293
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs		225,192			228,154
COPT Defense's share of liabilities of unconsolidated real estate JVs		61,026			61,294
COPT Defense's share of accumulated depreciation and amortization of unconsolidated real estate JVs		14,407			12,817
Less: Property - operating lease liabilities		(47,372	)		(49,240	)
Less: Property - finance lease liabilities		(377	)		(391	)
Less: Cash and cash equivalents		(21,288	)		(38,284	)
Less: COPT Defense's share of cash of unconsolidated real estate JVs		(1,944	)		(2,053	)
Adjusted book	$	6,124,626		$	6,003,781

	June 30, 2025			December 31, 2024			June 30, 2024
Reconciliation of debt to net debt and net debt adjusted for fully-leased investment properties
Debt per balance sheet	$	2,438,591		$	2,391,755		$	2,389,925
Net discounts and deferred financing costs		20,509			23,262			25,995
COPT Defense's share of unconsolidated JV gross debt		53,750			53,750			52,981
Gross debt		2,512,850			2,468,767			2,468,901
Less: Cash and cash equivalents		(21,288	)		(38,284	)		(100,443	)
Less: COPT Defense's share of cash of unconsolidated real estate JVs		(1,944	)		(2,053	)		(1,278	)
Net debt		2,489,618			2,428,430			2,367,180
Costs incurred on fully-leased development properties		(60,302	)		(18,774	)		(56,646	)
Costs incurred on fully-leased operating property acquisitions		—			(17,034	)		—
Net debt adjusted for fully-leased investment properties	$	2,429,316		$	2,392,622		$	2,310,534

Source: COPT Defense Properties

View source version on businesswire.com: https://www.businesswire.com/news/home/20250728153301/en/

NEWS RELEASE

IR Contacts:

Venkat Kommineni, CFA

443.285.5587

venkat.kommineni@copt.com

COPT Defense Reports Second Quarter 2025 Results