_______________________________________________________________
EPS of $1.23 for Full Year
FFO per Share, as Adjusted for Comparability, of $2.57
Increased 6.2% Over 2023 Results
Total Portfolio 93.6% Occupied and 95.1% Leased
Defense/IT Portfolio 95.6% Occupied and 96.8% Leased
For the year, Same Property Cash NOI Increased 9.1%
The Company's Highest Increase Ever Reported
_______________________________________________________________
Exceeded Leasing Goals in 2024
Total Leasing of 3.2 million SF
500,000 SF of Vacancy Leasing
Exceeded Annual Target of 400,000 SF
Tenant Retention of 86%
Highest Annual Retention Rate in Over 20 Years
_______________________________________________________________
Solid Investment Activity
Committed $212 million of Capital to New Investments
124,000 SF of Investment Leasing
_______________________________________________________________
COPT Defense Properties ("COPT Defense" or the "Company") (NYSE:CDP) announced results for the fourth quarter and full year ended December 31, 2024.
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 excellent results in 2024. The success of our differentiated strategy is evident in our occupancy rate of 93.6%, which is roughly 700 basis points higher than the Office sector, while occupancy in our Defense/IT Portfolio is even higher at 95.6%. We generated FFO per share growth of 6.2%, our second highest annual growth rate since 2015, which was driven by record performance in our Same Property portfolio, placing highly leased developments into service, and achieving our highest tenant retention rate in over 20 years of 86%.
We achieved a milestone in 2024 as we executed on our first acquisitions since 2015. We leveraged our investment-grade rated balance sheet to execute on several strategic and opportunistic investments, which serve to strengthen our relationship with the U.S. Government and top defense contractors, and will be accretive to shareholder value. The operating assets were acquired at significant discounts to replacement cost and provide strong going-in cash yields, while the development land provides an opportunity to expand our data center shell portfolio over the medium to long term.
We have generated FFO per share growth in each of the past six years, which amounts to a compound annual growth rate of 4.8% between 2019 to 2024. Looking forward, our guidance implies continued growth in 2025, with FFO per share growth of 3.5% at the midpoint, generated by continued strong performance of our portfolio."
Financial Highlights
4th Quarter Financial Results:
> Diluted earnings per share ("EPS") was $0.31 for the quarter ended December 31, 2024, compared to $0.30 for the quarter ended December 31, 2023.
> Diluted funds from operations per share ("FFOPS"), as calculated in accordance with Nareit's definition was $0.64 for the quarter ended December 31, 2024, compared to $0.62 for the quarter ended December 31, 2023.
> FFOPS, as adjusted for comparability, was $0.65 for the quarter ended December 31, 2024, compared to $0.62 for the quarter ended December 31, 2023.
Full Year 2024 Financial Results:
> EPS for the year ended December 31, 2024 was $1.23 as compared to $(0.67) for 2023.
> Per Nareit's definition, FFOPS for 2024 was $2.57 as compared to $2.41 for 2023.
> FFOPS, as adjusted for comparability, for 2024 was $2.57 as compared to $2.42 for 2023.
Operating Performance Highlights
Operating Portfolio Summary:
> At December 31, 2024, the Company's 24.5 million square foot total portfolio was 93.6% occupied and 95.1% leased, which includes the 22.4 million square foot Defense/IT Portfolio that was 95.6% occupied and 96.8% leased.
> During the quarter and year ended December 31, 2024, the Company placed into service 225,000 and 399,000 square feet, respectively, of developments that were 100% and 83% leased, respectively, as of year end.
Same Property Performance:
> At December 31, 2024, the Company's 22.2 million square foot Same Property portfolio was 94.1% occupied and 95.4% leased.
> The Company's Same Property cash NOI increased 10.0% and 9.1% for the three months and year ended December 31, 2024, respectively, compared to the same periods in 2023.
Leasing:
> Total Square Feet Leased: For the quarter ended December 31, 2024, the Company leased 709,000 square feet, including 561,000 square feet of renewals, 114,000 square feet of vacancy leasing, and 34,000 square feet of investment leasing. For the year ended December 31, 2024, the Company executed 3.2 million square feet of total leasing, including 2.6 million square feet of renewals, 500,000 square feet of vacancy leasing, and 124,000 square feet of investment leasing.
> Tenant Retention Rates: During the quarter and year ended December 31, 2024, the Company renewed 93.0% and 86.0%, respectively, of expiring square feet in its total portfolio and renewed 95.9% and 88.6%, respectively, of expiring square feet in its Defense/IT Portfolio.
> Rent Spreads and Average Escalations on Renewing Leases: For the quarter and year ended December 31, 2024, straight-line rents on renewals increased 5.5% and 8.6%, respectively, and cash rents on renewed space decreased 0.2% and increased 0.6%, respectively, while annual escalations on renewing leases averaged 2.7% and 2.4%, respectively.
> Lease Terms: In the quarter ended December 31, 2024, lease terms averaged 3.5 years on renewing leases, 7.4 years on vacancy leasing, and 5.9 years on investment leasing. For the year ended December 31, 2024, lease terms averaged 3.9 years on renewing leases, 7.7 years on vacancy leasing, and 8.2 years on investment leasing.
Investment Activity Highlights
> Development Pipeline: The Company's development pipeline consists of four properties totaling 606,000 square feet that were 75% leased as of December 31, 2024. These projects represent a total estimated investment of $252.9 million, of which $67.4 million was spent.
Balance Sheet and Capital Transaction Highlights
> For the quarter ended December 31, 2024, the Company's adjusted EBITDA fixed charge coverage ratio was 4.7x.
> At December 31, 2024, the Company's net debt to in-place adjusted EBITDA ratio was 6.0x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.9x.
> At December 31, 2024, and including the effect of interest rate swaps, the Company's weighted average effective interest rate on its consolidated debt portfolio was 3.3% with a weighted average maturity of 4.7 years, and 100% of the Company's debt was subject to fixed interest rates.
Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management's prepared remarks for its fourth quarter and full year 2024 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results' section of COPT Defense's Investors website: https://investors.copt.com/financial-information/financial-results
2025 Guidance
The Company details its initial full year and first quarter guidance, with supporting assumptions, in a separate press release issued concurrently with this press release; that release can be found in the ‘News & Events – Press Releases' section of COPT Defense's Investors website: https://investors.copt.com/news-events/press-releases
Conference Call Information
Management will discuss fourth quarter and full year 2024 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:
| Conference Call Date: | Friday, February 7, 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.vevent.com/register/BI959f6e09b0064c679a6d9d437eec49c7
The conference call will also be available via live webcast in the ‘News & Events – IR Calendar' section of COPT Defense's Investors website: https://investors.copt.com/news-events/ir-calendar
Replay Information
A replay of the conference call will be immediately available via webcast only on COPT Defense's Investors website and will be maintained on the website for approximately 90 days after the conference call.
Definitions
For definitions of certain terms used in this press release, please refer to the information furnished in the Company's Supplemental Information Package furnished on a Form 8-K which can be found on its website (www.copt.com). Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the attached tables.
About COPT Defense
COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government ("USG") defense installations and missions (referred to as its Defense/IT Portfolio). The Company's tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of December 31, 2024, the Company's Defense/IT Portfolio of 195 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.4 million square feet and was 96.8% leased.
Forward-Looking Information
This press release may contain "forward-looking" statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "could," "believe," "anticipate," "expect," "estimate," "plan" or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Although the Company believes that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements and the Company undertakes no obligation to update or supplement any forward-looking statements.
The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Source: COPT Defense Properties
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(dollars and shares in thousands, except per share data) |
|||||||||||||||
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Lease revenue |
$ |
169,765 |
|
|
$ |
160,337 |
|
|
$ |
671,366 |
|
|
$ |
619,847 |
|
Other property revenue |
|
1,641 |
|
|
|
1,225 |
|
|
|
6,351 |
|
|
|
4,956 |
|
Construction contract and other service revenues |
|
12,027 |
|
|
|
18,167 |
|
|
|
75,550 |
|
|
|
60,179 |
|
Total revenues |
|
183,433 |
|
|
|
179,729 |
|
|
|
753,267 |
|
|
|
684,982 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Property operating expenses |
|
66,964 |
|
|
|
64,577 |
|
|
|
266,001 |
|
|
|
247,385 |
|
Depreciation and amortization associated with real estate operations |
|
38,821 |
|
|
|
36,735 |
|
|
|
153,640 |
|
|
|
148,950 |
|
Construction contract and other service expenses |
|
11,519 |
|
|
|
17,167 |
|
|
|
73,265 |
|
|
|
57,416 |
|
Impairment losses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252,797 |
|
General and administrative expenses |
|
8,429 |
|
|
|
8,240 |
|
|
|
33,555 |
|
|
|
31,105 |
|
Leasing expenses |
|
2,243 |
|
|
|
2,308 |
|
|
|
9,233 |
|
|
|
8,932 |
|
Business development expenses and land carry costs |
|
1,171 |
|
|
|
797 |
|
|
|
4,250 |
|
|
|
2,732 |
|
Total operating expenses |
|
129,147 |
|
|
|
129,824 |
|
|
|
539,944 |
|
|
|
749,317 |
|
Interest expense |
|
(20,391 |
) |
|
|
(20,383 |
) |
|
|
(82,151 |
) |
|
|
(71,142 |
) |
Interest and other income, net |
|
2,331 |
|
|
|
5,659 |
|
|
|
12,661 |
|
|
|
12,587 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
49,392 |
|
Income (loss) before equity in income (loss) of unconsolidated entities and income taxes |
|
36,226 |
|
|
|
35,181 |
|
|
|
143,833 |
|
|
|
(73,498 |
) |
Equity in income (loss) of unconsolidated entities |
|
217 |
|
|
|
(240 |
) |
|
|
397 |
|
|
|
(261 |
) |
Income tax benefit (expense) |
|
24 |
|
|
|
(121 |
) |
|
|
(288 |
) |
|
|
(588 |
) |
Net income (loss) |
|
36,467 |
|
|
|
34,820 |
|
|
|
143,942 |
|
|
|
(74,347 |
) |
Net (income) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
||||||||
Common units in the Operating Partnership ("OP") |
|
(681 |
) |
|
|
(576 |
) |
|
|
(2,694 |
) |
|
|
1,306 |
|
Other consolidated entities |
|
(665 |
) |
|
|
(592 |
) |
|
|
(2,319 |
) |
|
|
(428 |
) |
Net income (loss) attributable to common shareholders |
$ |
35,121 |
|
|
$ |
33,652 |
|
|
$ |
138,929 |
|
|
$ |
(73,469 |
) |
|
|
|
|
|
|
|
|
||||||||
Earnings per share ("EPS") computation: |
|
|
|
|
|
|
|
||||||||
Numerator for diluted EPS: |
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders |
$ |
35,121 |
|
|
$ |
33,652 |
|
|
$ |
138,929 |
|
|
$ |
(73,469 |
) |
Amount allocable to share-based compensation awards |
|
(103 |
) |
|
|
(100 |
) |
|
|
(421 |
) |
|
|
(1,199 |
) |
Numerator for diluted EPS |
$ |
35,018 |
|
|
$ |
33,552 |
|
|
$ |
138,508 |
|
|
$ |
(74,668 |
) |
Denominator: |
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic |
|
112,347 |
|
|
|
112,199 |
|
|
|
112,296 |
|
|
|
112,178 |
|
Dilutive effect of share-based compensation awards |
|
711 |
|
|
|
432 |
|
|
|
603 |
|
|
|
— |
|
Dilutive exchangeable debt |
|
664 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Weighted average common shares - diluted |
|
113,722 |
|
|
|
112,631 |
|
|
|
112,899 |
|
|
|
112,178 |
|
Diluted EPS |
$ |
0.31 |
|
|
$ |
0.30 |
|
|
$ |
1.23 |
|
|
$ |
(0.67 |
) |
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
36,467 |
|
|
$ |
34,820 |
|
|
$ |
143,942 |
|
|
$ |
(74,347 |
) |
Real estate-related depreciation and amortization |
|
38,821 |
|
|
|
36,735 |
|
|
|
153,640 |
|
|
|
148,950 |
|
Impairment losses on real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252,797 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Depreciation and amortization on unconsolidated real estate JVs |
|
745 |
|
|
|
805 |
|
|
|
3,056 |
|
|
|
3,217 |
|
Funds from operations ("FFO") |
|
76,033 |
|
|
|
72,360 |
|
|
|
300,638 |
|
|
|
281,225 |
|
FFO allocable to other noncontrolling interests |
|
(1,050 |
) |
|
|
(972 |
) |
|
|
(3,855 |
) |
|
|
(3,978 |
) |
Basic FFO allocable to share-based compensation awards |
|
(614 |
) |
|
|
(513 |
) |
|
|
(2,417 |
) |
|
|
(1,940 |
) |
Basic FFO available to common share and common unit holders ("Basic FFO") |
|
74,369 |
|
|
|
70,875 |
|
|
|
294,366 |
|
|
|
275,307 |
|
Redeemable noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
1,963 |
|
|
|
(58 |
) |
Diluted FFO adjustments allocable to share-based compensation awards |
|
47 |
|
|
|
38 |
|
|
|
188 |
|
|
|
150 |
|
Diluted FFO available to common share and common unit holders ("Diluted FFO") |
|
74,416 |
|
|
|
70,913 |
|
|
|
296,517 |
|
|
|
275,399 |
|
Executive transition costs |
|
58 |
|
|
|
188 |
|
|
|
285 |
|
|
|
518 |
|
Diluted FFO comparability adjustments allocable to share-based compensation awards |
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
Diluted FFO available to common share and common unit holders, as adjusted for comparability |
|
74,473 |
|
|
|
71,100 |
|
|
|
296,800 |
|
|
|
275,913 |
|
Straight line rent adjustments and lease incentive amortization |
|
2,950 |
|
|
|
313 |
|
|
|
10,824 |
|
|
|
6,518 |
|
Amortization of intangibles and other assets included in net operating income ("NOI") |
|
211 |
|
|
|
26 |
|
|
|
755 |
|
|
|
50 |
|
Share-based compensation, net of amounts capitalized |
|
2,617 |
|
|
|
2,318 |
|
|
|
10,443 |
|
|
|
8,544 |
|
Amortization of deferred financing costs |
|
671 |
|
|
|
681 |
|
|
|
2,708 |
|
|
|
2,580 |
|
Amortization of net debt discounts, net of amounts capitalized |
|
1,041 |
|
|
|
1,004 |
|
|
|
4,110 |
|
|
|
2,994 |
|
Replacement capital expenditures |
|
(34,134 |
) |
|
|
(21,498 |
) |
|
|
(103,984 |
) |
|
|
(93,494 |
) |
Other |
|
73 |
|
|
|
336 |
|
|
|
566 |
|
|
|
(84 |
) |
Diluted adjusted funds from operations available to common share and common unit holders ("Diluted AFFO") |
$ |
47,902 |
|
|
$ |
54,280 |
|
|
$ |
222,222 |
|
|
$ |
203,021 |
|
Diluted FFO per share |
$ |
0.64 |
|
|
$ |
0.62 |
|
|
$ |
2.57 |
|
|
$ |
2.41 |
|
Diluted FFO per share, as adjusted for comparability |
$ |
0.65 |
|
|
$ |
0.62 |
|
|
$ |
2.57 |
|
|
$ |
2.42 |
|
Dividends/distributions per common share/unit |
$ |
0.295 |
|
|
$ |
0.285 |
|
|
$ |
1.18 |
|
|
$ |
1.14 |
|
COPT Defense Properties |
|||||||
Summary Financial Data |
|||||||
(unaudited) |
|||||||
(Dollars and shares in thousands, except per share data) |
|||||||
|
|||||||
|
December 31,
|
|
December 31,
|
||||
Balance Sheet Data |
|
|
|
||||
Properties, net of accumulated depreciation |
$ |
3,630,526 |
|
|
$ |
3,503,678 |
|
Total assets |
$ |
4,254,191 |
|
|
$ |
4,246,966 |
|
Debt per balance sheet |
$ |
2,391,755 |
|
|
$ |
2,416,287 |
|
Total liabilities |
$ |
2,693,624 |
|
|
$ |
2,699,631 |
|
Redeemable noncontrolling interests |
$ |
23,974 |
|
|
$ |
23,580 |
|
Total equity |
$ |
1,536,593 |
|
|
$ |
1,523,755 |
|
Debt to assets |
|
56.2 |
% |
|
|
56.9 |
% |
Net debt to adjusted book |
|
40.4 |
% |
|
|
40.6 |
% |
|
|
|
|
||||
Defense/IT Portfolio Data (as of period end) |
|
|
|
||||
Number of operating properties |
|
195 |
|
|
|
190 |
|
Total operational square feet (in thousands) |
|
22,391 |
|
|
|
21,719 |
|
% Occupied |
|
95.6 |
% |
|
|
96.2 |
% |
% Leased |
|
96.8 |
% |
|
|
97.2 |
% |
|
For the Three Months Ended
|
|
For the Years Ended
|
||||||||
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
GAAP |
|
|
|
|
|
|
|
||||
Payout ratio: |
|
|
|
|
|
|
|
||||
Net income |
93.0 |
% |
|
93.7 |
% |
|
94.2 |
% |
|
N/A |
|
Debt ratios: |
|
|
|
|
|
|
|
||||
Net income to interest expense ratio |
1.8x |
|
1.7x |
|
1.8x |
|
N/A |
|
|||
Debt to net income ratio |
16.4x |
|
17.3x |
|
N/A |
|
|
N/A |
|
||
Non-GAAP |
|
|
|
|
|
|
|
||||
Payout ratios: |
|
|
|
|
|
|
|
||||
Diluted FFO |
45.2 |
% |
|
45.7 |
% |
|
45.4 |
% |
|
47.1 |
% |
Diluted FFO, as adjusted for comparability |
45.2 |
% |
|
45.6 |
% |
|
45.4 |
% |
|
47.0 |
% |
Diluted AFFO |
70.3 |
% |
|
59.7 |
% |
|
60.6 |
% |
|
63.9 |
% |
Debt ratios: |
|
|
|
|
|
|
|
||||
Adjusted EBITDA fixed charge coverage ratio |
4.7x |
|
4.4x |
|
4.7x |
|
4.7x |
||||
Net debt to in-place adjusted EBITDA ratio |
6.0x |
|
6.1x |
|
N/A |
|
|
N/A |
|
||
Net debt adj. for fully-leased investment properties to in-place adj. EBITDA ratio |
5.9x |
|
6.0x |
|
N/A |
|
|
N/A |
|
||
|
|
|
|
|
|
|
|
||||
Reconciliation of denominators for per share measures |
|
|
|
|
|
|
|||||
Denominator for diluted EPS |
113,722 |
|
|
112,631 |
|
|
112,899 |
|
|
112,178 |
|
Weighted average common units |
1,664 |
|
|
1,514 |
|
|
1,672 |
|
|
1,509 |
|
Dilutive effect of additional share-based compensation awards |
— |
|
|
— |
|
|
— |
|
|
424 |
|
Redeemable noncontrolling interests |
— |
|
|
— |
|
|
842 |
|
|
38 |
|
Denominator for diluted FFO per share and as adjusted for comparability |
115,386 |
|
|
114,145 |
|
|
115,413 |
|
|
114,149 |
|
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Numerators for Payout Ratios |
|
|
|
|
|
|
|
||||||||
Dividends on unrestricted common and deferred shares |
$ |
33,167 |
|
|
$ |
31,998 |
|
|
$ |
132,628 |
|
|
$ |
127,978 |
|
Distributions on unrestricted common units |
|
491 |
|
|
|
430 |
|
|
|
1,987 |
|
|
|
1,725 |
|
Dividends and distributions on restricted shares and units |
|
248 |
|
|
|
209 |
|
|
|
1,000 |
|
|
|
828 |
|
Total dividends and distributions for GAAP payout ratio |
|
33,906 |
|
|
|
32,637 |
|
|
|
135,615 |
|
|
|
130,531 |
|
Dividends and distributions on antidilutive shares and units |
|
(250 |
) |
|
|
(212 |
) |
|
|
(1,006 |
) |
|
|
(835 |
) |
Dividends and distributions for non-GAAP payout ratios |
$ |
33,656 |
|
|
$ |
32,425 |
|
|
$ |
134,609 |
|
|
$ |
129,696 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income (loss) to earnings before interest, income taxes, depreciation and amortization for real estate ("EBITDAre"), adjusted EBITDA and in-place adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
36,467 |
|
|
$ |
34,820 |
|
|
$ |
143,942 |
|
|
$ |
(74,347 |
) |
Interest expense |
|
20,391 |
|
|
|
20,383 |
|
|
|
82,151 |
|
|
|
71,142 |
|
Income tax (benefit) expense |
|
(24 |
) |
|
|
121 |
|
|
|
288 |
|
|
|
588 |
|
Real estate-related depreciation and amortization |
|
38,821 |
|
|
|
36,735 |
|
|
|
153,640 |
|
|
|
148,950 |
|
Other depreciation and amortization |
|
589 |
|
|
|
619 |
|
|
|
2,375 |
|
|
|
2,445 |
|
Impairment losses on real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252,797 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Adjustments from unconsolidated real estate JVs |
|
1,681 |
|
|
|
1,911 |
|
|
|
6,820 |
|
|
|
6,917 |
|
EBITDAre |
|
97,925 |
|
|
|
94,589 |
|
|
|
389,216 |
|
|
|
359,100 |
|
Credit loss (recoveries) expense |
|
(113 |
) |
|
|
(1,288 |
) |
|
|
383 |
|
|
|
(611 |
) |
Business development expenses |
|
758 |
|
|
|
445 |
|
|
|
2,548 |
|
|
|
1,393 |
|
Executive transition costs |
|
58 |
|
|
|
188 |
|
|
|
638 |
|
|
|
824 |
|
Net gain on other investments |
|
— |
|
|
|
— |
|
|
|
(488 |
) |
|
|
(25 |
) |
Adjusted EBITDA |
|
98,628 |
|
|
|
93,934 |
|
|
$ |
392,297 |
|
|
$ |
360,681 |
|
Pro forma NOI adjustment for property changes within period |
|
528 |
|
|
|
1,341 |
|
|
|
|
|
||||
Change in collectability of deferred rental revenue |
|
1,646 |
|
|
|
(198 |
) |
|
|
|
|
||||
In-place adjusted EBITDA |
$ |
100,802 |
|
|
$ |
95,077 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures |
|
|
|
|
|
|
|
||||||||
Tenant improvements and incentives |
$ |
22,912 |
|
|
$ |
7,850 |
|
|
$ |
69,505 |
|
|
$ |
74,912 |
|
Building improvements |
|
10,942 |
|
|
|
14,762 |
|
|
|
28,294 |
|
|
|
25,976 |
|
Leasing costs |
|
2,629 |
|
|
|
2,440 |
|
|
|
12,342 |
|
|
|
9,634 |
|
Net exclusions from tenant improvements and incentives |
|
(7 |
) |
|
|
(189 |
) |
|
|
(3 |
) |
|
|
(12,170 |
) |
Excluded building improvements and leasing costs |
|
(2,342 |
) |
|
|
(3,365 |
) |
|
|
(6,154 |
) |
|
|
(4,858 |
) |
Replacement capital expenditures |
$ |
34,134 |
|
|
$ |
21,498 |
|
|
$ |
103,984 |
|
|
$ |
93,494 |
|
COPT Defense Properties |
|||||||||||||||
Summary Financial Data |
|||||||||||||||
(unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Interest expense |
$ |
20,391 |
|
|
$ |
20,383 |
|
|
$ |
82,151 |
|
|
$ |
71,142 |
|
Less: Amortization of deferred financing costs |
|
(671 |
) |
|
|
(681 |
) |
|
|
(2,708 |
) |
|
|
(2,580 |
) |
Less: Amortization of net debt discounts, net of amounts capitalized |
|
(1,041 |
) |
|
|
(1,004 |
) |
|
|
(4,110 |
) |
|
|
(2,994 |
) |
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 |
|
872 |
|
|
|
819 |
|
|
|
3,305 |
|
|
|
3,188 |
|
Scheduled principal amortization |
|
455 |
|
|
|
763 |
|
|
|
2,334 |
|
|
|
3,052 |
|
Capitalized interest |
|
928 |
|
|
|
1,028 |
|
|
|
2,872 |
|
|
|
4,479 |
|
Denominator for fixed charge coverage-Adjusted EBITDA |
$ |
20,934 |
|
|
$ |
21,308 |
|
|
$ |
83,844 |
|
|
$ |
76,287 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income (loss) to NOI from real estate operations, same property NOI from real estate operations and same property cash NOI from real estate operations |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
36,467 |
|
|
$ |
34,820 |
|
|
$ |
143,942 |
|
|
$ |
(74,347 |
) |
Construction contract and other service revenues |
|
(12,027 |
) |
|
|
(18,167 |
) |
|
|
(75,550 |
) |
|
|
(60,179 |
) |
Depreciation and other amortization associated with real estate operations |
|
38,821 |
|
|
|
36,735 |
|
|
|
153,640 |
|
|
|
148,950 |
|
Construction contract and other service expenses |
|
11,519 |
|
|
|
17,167 |
|
|
|
73,265 |
|
|
|
57,416 |
|
Impairment losses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252,797 |
|
General and administrative expenses |
|
8,429 |
|
|
|
8,240 |
|
|
|
33,555 |
|
|
|
31,105 |
|
Leasing expenses |
|
2,243 |
|
|
|
2,308 |
|
|
|
9,233 |
|
|
|
8,932 |
|
Business development expenses and land carry costs |
|
1,171 |
|
|
|
797 |
|
|
|
4,250 |
|
|
|
2,732 |
|
Interest expense |
|
20,391 |
|
|
|
20,383 |
|
|
|
82,151 |
|
|
|
71,142 |
|
Interest and other income, net |
|
(2,331 |
) |
|
|
(5,659 |
) |
|
|
(12,661 |
) |
|
|
(12,587 |
) |
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Equity in (income) loss of unconsolidated entities |
|
(217 |
) |
|
|
240 |
|
|
|
(397 |
) |
|
|
261 |
|
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities |
|
1,898 |
|
|
|
1,671 |
|
|
|
7,217 |
|
|
|
6,659 |
|
Income tax (benefit) expense |
|
(24 |
) |
|
|
121 |
|
|
|
288 |
|
|
|
588 |
|
NOI from real estate operations |
|
106,340 |
|
|
|
98,656 |
|
|
|
418,933 |
|
|
|
384,077 |
|
Non-Same Property NOI from real estate operations |
|
(7,997 |
) |
|
|
(3,802 |
) |
|
|
(27,864 |
) |
|
|
(7,238 |
) |
Same Property NOI from real estate operations |
|
98,343 |
|
|
|
94,854 |
|
|
|
391,069 |
|
|
|
376,839 |
|
Straight line rent adjustments and lease incentive amortization |
|
7,093 |
|
|
|
3,142 |
|
|
|
16,492 |
|
|
|
7,030 |
|
Amortization of acquired above- and below-market rents |
|
(69 |
) |
|
|
(121 |
) |
|
|
(276 |
) |
|
|
(536 |
) |
Lease termination fees, net |
|
(864 |
) |
|
|
(717 |
) |
|
|
(3,451 |
) |
|
|
(3,745 |
) |
Tenant funded landlord assets and lease incentives |
|
(5,871 |
) |
|
|
(7,541 |
) |
|
|
(18,501 |
) |
|
|
(26,378 |
) |
Cash NOI adjustments in unconsolidated real estate JVs |
|
(147 |
) |
|
|
(124 |
) |
|
|
(511 |
) |
|
|
(544 |
) |
Same Property Cash NOI from real estate operations |
$ |
98,485 |
|
|
$ |
89,493 |
|
|
$ |
384,822 |
|
|
$ |
352,666 |
|
COPT Defense Properties |
||||||||
Summary Financial Data |
||||||||
(unaudited) |
||||||||
(in thousands) |
||||||||
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||
Reconciliation of total assets to adjusted book |
|
|
|
|
||||
Total assets |
|
$ |
4,254,191 |
|
|
$ |
4,246,966 |
|
Accumulated depreciation |
|
|
1,537,293 |
|
|
|
1,400,162 |
|
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs |
|
|
228,154 |
|
|
|
228,484 |
|
COPT Defense's share of liabilities of unconsolidated real estate JVs |
|
|
61,294 |
|
|
|
60,583 |
|
COPT Defense's share of accumulated depreciation and amortization of unconsolidated real estate JVs |
|
|
12,817 |
|
|
|
9,528 |
|
Less: Property - operating lease liabilities |
|
|
(49,240 |
) |
|
|
(33,931 |
) |
Less: Property - finance lease liabilities |
|
|
(391 |
) |
|
|
(415 |
) |
Less: Cash and cash equivalents |
|
|
(38,284 |
) |
|
|
(167,820 |
) |
Less: COPT Defense's share of cash of unconsolidated real estate JVs |
|
|
(2,053 |
) |
|
|
(852 |
) |
Adjusted book |
|
$ |
6,003,781 |
|
|
$ |
5,742,705 |
|
|
|
December 31,
|
|
December 31,
|
||||
Reconciliation of debt to net debt and net debt adjusted for fully-leased investment properties |
|
|
|
|
||||
Debt per balance sheet |
|
$ |
2,391,755 |
|
|
$ |
2,416,287 |
|
Net discounts and deferred financing costs |
|
|
23,262 |
|
|
|
28,713 |
|
COPT Defense's share of unconsolidated JV gross debt |
|
|
53,750 |
|
|
|
52,613 |
|
Gross debt |
|
|
2,468,767 |
|
|
|
2,497,613 |
|
Less: Cash and cash equivalents |
|
|
(38,284 |
) |
|
|
(167,820 |
) |
Less: COPT Defense's share of cash of unconsolidated real estate JVs |
|
|
(2,053 |
) |
|
|
(852 |
) |
Net debt |
|
|
2,428,430 |
|
|
|
2,328,941 |
|
Costs incurred on fully-leased development properties |
|
|
(18,774 |
) |
|
|
(53,914 |
) |
Costs incurred on fully-leased operating property acquisitions |
|
|
(17,034 |
) |
|
|
— |
|
Net debt adjusted for fully-leased investment properties |
|
$ |
2,392,622 |
|
|
$ |
2,275,027 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250206735525/en/
IR Contacts:
Venkat Kommineni, CFA
443.285.5587
[email protected]
Michelle Layne
443.285.5452
[email protected]