COPT Defense Reports Strong Third Quarter 2024 Results
_______________________________________________________________
EPS of
FFO per Share, as Adjusted for Comparability, of
Increased Midpoint of 2024 FFO per Share Guidance by
Implies
Defense/IT Portfolio
Same Property Cash NOI Increased
Raised Midpoint of Same Property Cash NOI Guidance for the Year by 50 Basis Points to
_______________________________________________________________
Strong Leasing Volume and Retention YTD
Total Leasing of 829,000 SF in 3Q24 and 2.5 million SF Year-to-Date
123,000 SF in 3Q24 and 387,000 SF Year-to-Date of Vacancy Leasing Exceeded Annual Target of 400,000 SF, with 4Q24 Progress To-Date
Tenant Retention of
80,000 SF in 3Q24 and 90,000 SF Year-to-Date of Investment Leasing
_______________________________________________________________
Active on External Growth
Acquired 365-acres in
_______________________________________________________________
Management Comments
Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “Our Defense/IT investment strategy, which concentrates our portfolio near priority
We are exceeding our plan in several areas and raised 2024 guidance on a group of key metrics. We increased the midpoint of 2024 guidance for same property cash NOI growth by 50 basis points to
We are especially excited to announce the acquisition of a 365-acre land parcel near
Additionally, we acquired a vacant office property in
Financial Highlights
3rd Quarter Financial Results:
> Diluted earnings per share (“EPS”) was
> Diluted funds from operations per share (“FFOPS”), as calculated in accordance with Nareit’s definition and as adjusted for comparability, was
Operating Performance Highlights
Operating Portfolio Summary:
> At September 30, 2024, the Company’s 24.3 million square foot Total Portfolio was
Same Property Performance:
> At September 30, 2024, the Company’s 22.2 million square foot same property portfolio was
> The Company’s same property cash NOI increased
Leasing:
> Total Square Feet Leased: For the quarter ended September 30, 2024, the Company leased 829,000 square feet, including 626,000 square feet of renewals, 123,000 square feet of vacancy leasing, and 80,000 square feet of investment leasing. For the nine months ended September 30, 2024, the Company executed 2.5 million square feet of total leasing, including 2.1 million square feet of renewals, 387,000 square feet of vacancy leasing, and 90,000 square feet of investment leasing.
> Tenant Retention Rates: During the quarter ended September 30, 2024, the Company renewed
> Rent Spreads & Average Escalations on Renewing Leases: For the quarter and nine months ended September 30, 2024, straight-line rents on renewals increased
> Lease Terms: In the quarter ended September 30, 2024, lease terms averaged 4.1 years on renewing leases, 7.1 years on vacancy leasing, and 9.5 years on investment leasing. For the nine months ended September 30, 2024, lease terms averaged 4.0 years on renewing leases, 7.8 years on vacancy leasing, and 9.0 years on investment leasing.
Investment Activity Highlights
> Development Pipeline: The Company’s development pipeline consists of five properties totaling 831,000 square feet that were
> Acquisitions:
During the quarter, the Company acquired:
> A 365-acre land parcel near
> An 80,000 square foot Class A office building at 3900 Rogers Road in
> Please see the Company’s acquisition press release dated October 28, 2024 and pages 8-22 of the Company’s 3Q24 Results Presentation (refer to the ‘Associated Supplemental Presentation’ section below).
Balance Sheet and Capital Transaction Highlights
> For the quarter ended September 30, 2024, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.8x.
> At September 30, 2024, the Company’s net debt to in-place adjusted EBITDA ratio was 6.1x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.9x.
> At September 30, 2024, and including the effect of interest rate swaps, the Company’s weighted average effective interest rate on its consolidated debt portfolio was
Associated Supplemental Presentation
Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its third quarter 2024 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT Defense’s Investors website: https://investors.copt.com/financial-information/financial-results
2024 Guidance
Management is revising its full-year guidance for diluted EPS and diluted FFOPS, per Nareit and as adjusted for comparability, from the prior range of
Reconciliation of Diluted EPS to FFOPS, per Nareit, and As Adjusted for Comparability |
|
Quarter Ending
|
|
Year Ending
|
||||||||
|
Low |
|
High |
|
Low |
|
High |
|||||
Diluted EPS |
|
$ |
0.31 |
|
$ |
0.33 |
|
$ |
1.24 |
|
$ |
1.26 |
Real estate-related depreciation and amortization |
|
|
0.33 |
|
|
0.33 |
|
|
1.32 |
|
|
1.32 |
Diluted FFOPS, Nareit definition and as adjusted for comparability |
|
$ |
0.64 |
|
$ |
0.66 |
|
$ |
2.56 |
|
$ |
2.58 |
Conference Call Information
Management will discuss third quarter 2024 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below:
Conference Call Date: Tuesday, October 29, 2024
Time: 12:00 p.m. Eastern Time
Participants must register for the conference call at the link below to receive the dial-in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time:
https://register.vevent.com/register/BI9796486f46f6424aa012b44d48ca9ae6
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
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) (in thousands) |
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Lease revenue |
$ |
170,549 |
|
|
$ |
155,268 |
|
|
$ |
501,601 |
|
|
$ |
459,510 |
|
Other property revenue |
|
2,014 |
|
|
|
1,339 |
|
|
|
4,710 |
|
|
|
3,731 |
|
Construction contract and other service revenues |
|
16,662 |
|
|
|
11,949 |
|
|
|
63,523 |
|
|
|
42,012 |
|
Total revenues |
|
189,225 |
|
|
|
168,556 |
|
|
|
569,834 |
|
|
|
505,253 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Property operating expenses |
|
68,881 |
|
|
|
61,788 |
|
|
|
199,037 |
|
|
|
182,808 |
|
Depreciation and amortization associated with real estate operations |
|
38,307 |
|
|
|
37,620 |
|
|
|
114,819 |
|
|
|
112,215 |
|
Construction contract and other service expenses |
|
16,127 |
|
|
|
11,493 |
|
|
|
61,746 |
|
|
|
40,249 |
|
Impairment losses |
|
— |
|
|
|
252,797 |
|
|
|
— |
|
|
|
252,797 |
|
General and administrative expenses |
|
8,157 |
|
|
|
7,582 |
|
|
|
25,126 |
|
|
|
22,865 |
|
Leasing expenses |
|
2,341 |
|
|
|
2,280 |
|
|
|
6,990 |
|
|
|
6,624 |
|
Business development expenses and land carry costs |
|
918 |
|
|
|
714 |
|
|
|
3,079 |
|
|
|
1,935 |
|
Total operating expenses |
|
134,731 |
|
|
|
374,274 |
|
|
|
410,797 |
|
|
|
619,493 |
|
Interest expense |
|
(20,376 |
) |
|
|
(17,798 |
) |
|
|
(61,760 |
) |
|
|
(50,759 |
) |
Interest and other income, net |
|
3,324 |
|
|
|
2,529 |
|
|
|
10,330 |
|
|
|
6,928 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
49,392 |
|
Income (loss) before equity in income (loss) of unconsolidated entities and income taxes |
|
37,442 |
|
|
|
(220,987 |
) |
|
|
107,607 |
|
|
|
(108,679 |
) |
Equity in income (loss) of unconsolidated entities |
|
85 |
|
|
|
(68 |
) |
|
|
180 |
|
|
|
(21 |
) |
Income tax expense |
|
(130 |
) |
|
|
(152 |
) |
|
|
(312 |
) |
|
|
(467 |
) |
Net income (loss) |
|
37,397 |
|
|
|
(221,207 |
) |
|
|
107,475 |
|
|
|
(109,167 |
) |
Net (income) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
||||||||
Common units in the Operating Partnership (“OP”) |
|
(711 |
) |
|
|
3,691 |
|
|
|
(2,013 |
) |
|
|
1,882 |
|
Other consolidated entities |
|
(601 |
) |
|
|
1,329 |
|
|
|
(1,654 |
) |
|
|
164 |
|
Net income (loss) attributable to common shareholders |
$ |
36,085 |
|
|
$ |
(216,187 |
) |
|
$ |
103,808 |
|
|
$ |
(107,121 |
) |
|
|
|
|
|
|
|
|
||||||||
Earnings per share (“EPS”) computation: |
|
|
|
|
|
|
|
||||||||
Numerator for diluted EPS: |
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders |
$ |
36,085 |
|
|
$ |
(216,187 |
) |
|
$ |
103,808 |
|
|
$ |
(107,121 |
) |
Amount allocable to share-based compensation awards |
|
(104 |
) |
|
|
(992 |
) |
|
|
(319 |
) |
|
|
(1,093 |
) |
Numerator for diluted EPS |
$ |
35,981 |
|
|
$ |
(217,179 |
) |
|
$ |
103,489 |
|
|
$ |
(108,214 |
) |
Denominator: |
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic |
|
112,314 |
|
|
|
112,196 |
|
|
|
112,279 |
|
|
|
112,170 |
|
Dilutive effect of share-based compensation awards |
|
696 |
|
|
|
— |
|
|
|
566 |
|
|
|
— |
|
Weighted average common shares - diluted |
|
113,010 |
|
|
|
112,196 |
|
|
|
112,845 |
|
|
|
112,170 |
|
Diluted EPS |
$ |
0.32 |
|
|
$ |
(1.94 |
) |
|
$ |
0.92 |
|
|
$ |
(0.96 |
) |
COPT Defense Properties Summary Financial Data (unaudited) (in thousands, except per share data) |
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
37,397 |
|
|
$ |
(221,207 |
) |
|
$ |
107,475 |
|
|
$ |
(109,167 |
) |
Real estate-related depreciation and amortization |
|
38,307 |
|
|
|
37,620 |
|
|
|
114,819 |
|
|
|
112,215 |
|
Impairment losses on real estate |
|
— |
|
|
|
252,797 |
|
|
|
— |
|
|
|
252,797 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Depreciation and amortization on unconsolidated real estate JVs |
|
756 |
|
|
|
806 |
|
|
|
2,311 |
|
|
|
2,412 |
|
Funds from operations (“FFO”) |
|
76,460 |
|
|
|
70,016 |
|
|
|
224,605 |
|
|
|
208,865 |
|
FFO allocable to other noncontrolling interests |
|
(985 |
) |
|
|
(1,059 |
) |
|
|
(2,805 |
) |
|
|
(3,006 |
) |
Basic FFO allocable to share-based compensation awards |
|
(617 |
) |
|
|
(481 |
) |
|
|
(1,803 |
) |
|
|
(1,427 |
) |
Basic FFO available to common share and common unit holders (“Basic FFO”) |
|
74,858 |
|
|
|
68,476 |
|
|
|
219,997 |
|
|
|
204,432 |
|
Redeemable noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
1,446 |
|
|
|
(58 |
) |
Diluted FFO adjustments allocable to share-based compensation awards |
|
47 |
|
|
|
36 |
|
|
|
141 |
|
|
|
112 |
|
Diluted FFO available to common share and common unit holders (“Diluted FFO”) |
|
74,905 |
|
|
|
68,512 |
|
|
|
221,584 |
|
|
|
204,486 |
|
Executive transition costs |
|
69 |
|
|
|
82 |
|
|
|
227 |
|
|
|
330 |
|
Diluted FFO comparability adjustments allocable to share-based compensation awards |
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
Diluted FFO available to common share and common unit holders, as adjusted for comparability |
|
74,974 |
|
|
|
68,593 |
|
|
|
221,810 |
|
|
|
204,813 |
|
Straight line rent adjustments and lease incentive amortization |
|
613 |
|
|
|
12,882 |
|
|
|
7,874 |
|
|
|
6,205 |
|
Amortization of intangibles and other assets included in net operating income (“NOI”) |
|
211 |
|
|
|
26 |
|
|
|
544 |
|
|
|
24 |
|
Share-based compensation, net of amounts capitalized |
|
2,617 |
|
|
|
2,280 |
|
|
|
7,826 |
|
|
|
6,226 |
|
Amortization of deferred financing costs |
|
671 |
|
|
|
639 |
|
|
|
2,037 |
|
|
|
1,899 |
|
Amortization of net debt discounts, net of amounts capitalized |
|
1,032 |
|
|
|
750 |
|
|
|
3,069 |
|
|
|
1,990 |
|
Replacement capital expenditures |
|
(27,824 |
) |
|
|
(21,122 |
) |
|
|
(69,850 |
) |
|
|
(71,996 |
) |
Other |
|
298 |
|
|
|
74 |
|
|
|
493 |
|
|
|
(420 |
) |
Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) |
$ |
52,592 |
|
|
$ |
64,122 |
|
|
$ |
173,803 |
|
|
$ |
148,741 |
|
Diluted FFO per share |
$ |
0.65 |
|
|
$ |
0.60 |
|
|
$ |
1.92 |
|
|
$ |
1.79 |
|
Diluted FFO per share, as adjusted for comparability |
$ |
0.65 |
|
|
$ |
0.60 |
|
|
$ |
1.92 |
|
|
$ |
1.79 |
|
Dividends/distributions per common share/unit |
$ |
0.295 |
|
|
$ |
0.285 |
|
|
$ |
0.885 |
|
|
$ |
0.855 |
|
COPT Defense Properties Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) |
|||||||
|
September 30,
|
|
December 31,
|
||||
Balance Sheet Data |
|
|
|
||||
Properties, net of accumulated depreciation |
$ |
3,604,688 |
|
|
$ |
3,503,678 |
|
Total assets |
$ |
4,234,302 |
|
|
$ |
4,246,966 |
|
Debt per balance sheet |
$ |
2,390,839 |
|
|
$ |
2,416,287 |
|
Total liabilities |
$ |
2,679,271 |
|
|
$ |
2,699,631 |
|
Redeemable noncontrolling interests |
$ |
22,436 |
|
|
$ |
23,580 |
|
Total equity |
$ |
1,532,595 |
|
|
$ |
1,523,755 |
|
Debt to assets |
|
56.5 |
% |
|
|
56.9 |
% |
Net debt to adjusted book |
|
40.8 |
% |
|
|
40.6 |
% |
|
|
|
|
||||
Defense/IT Portfolio Data (as of period end) |
|
|
|
||||
Number of operating properties |
|
194 |
|
|
|
190 |
|
Total operational square feet (in thousands) |
|
22,174 |
|
|
|
21,719 |
|
% Occupied |
|
95.0 |
% |
|
|
96.2 |
% |
% Leased |
|
96.5 |
% |
|
|
97.2 |
% |
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||
GAAP |
|
|
|
|
|
|
|
||||
Payout ratio: |
|
|
|
|
|
|
|
||||
Net income |
90.7 |
% |
|
N/A |
|
|
94.6 |
% |
|
N/A |
|
Debt ratios: |
|
|
|
|
|
|
|
||||
Net income to interest expense ratio |
1.8x |
|
N/A |
|
|
1.7x |
|
N/A |
|
||
Debt to net income ratio |
16.0x |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
Non-GAAP |
|
|
|
|
|
|
|
||||
Payout ratios: |
|
|
|
|
|
|
|
||||
Diluted FFO |
44.9 |
% |
|
47.3 |
% |
|
45.6 |
% |
|
47.6 |
% |
Diluted FFO, as adjusted for comparability |
44.9 |
% |
|
47.3 |
% |
|
45.5 |
% |
|
47.5 |
% |
Diluted AFFO |
64.0 |
% |
|
50.6 |
% |
|
58.1 |
% |
|
65.4 |
% |
Debt ratios: |
|
|
|
|
|
|
|
||||
Adjusted EBITDA fixed charge coverage ratio |
4.8x |
|
4.6x |
|
4.7x |
|
4.9x |
||||
Net debt to in-place adjusted EBITDA ratio |
6.1x |
|
6.2x |
|
N/A |
|
|
N/A |
|
||
Net debt adj. for fully-leased investment properties to in-place adj. EBITDA ratio |
5.9x |
|
5.9x |
|
N/A |
|
|
N/A |
|
||
|
|
|
|
|
|
|
|
||||
Reconciliation of denominators for per share measures |
|
|
|
|
|
|
|||||
Denominator for diluted EPS |
113,010 |
|
|
112,196 |
|
|
112,845 |
|
|
112,170 |
|
Weighted average common units |
1,696 |
|
|
1,520 |
|
|
1,675 |
|
|
1,508 |
|
Dilutive effect of additional share-based compensation awards |
— |
|
|
429 |
|
|
— |
|
|
422 |
|
Redeemable noncontrolling interests |
— |
|
|
— |
|
|
873 |
|
|
51 |
|
Denominator for diluted FFO per share and as adjusted for comparability |
114,706 |
|
|
114,145 |
|
|
115,393 |
|
|
114,151 |
|
COPT Defense Properties Summary Financial Data (unaudited) (in thousands) |
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Numerators for Payout Ratios |
|
|
|
|
|
|
|
||||||||
Dividends on unrestricted common and deferred shares |
$ |
33,165 |
|
|
$ |
31,996 |
|
|
$ |
99,461 |
|
|
$ |
95,980 |
|
Distributions on unrestricted common units |
|
491 |
|
|
|
432 |
|
|
|
1,496 |
|
|
|
1,295 |
|
Dividends and distributions on restricted shares and units |
|
247 |
|
|
|
200 |
|
|
|
752 |
|
|
|
619 |
|
Total dividends and distributions for GAAP payout ratio |
|
33,903 |
|
|
|
32,628 |
|
|
|
101,709 |
|
|
|
97,894 |
|
Dividends and distributions on antidilutive shares and units |
|
(249 |
) |
|
|
(202 |
) |
|
|
(756 |
) |
|
|
(623 |
) |
Dividends and distributions for non-GAAP payout ratios |
$ |
33,654 |
|
|
$ |
32,426 |
|
|
$ |
100,953 |
|
|
$ |
97,271 |
|
|
|
|
|
|
|
|
|
||||||||
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) |
$ |
37,397 |
|
|
$ |
(221,207 |
) |
|
$ |
107,475 |
|
|
$ |
(109,167 |
) |
Interest expense |
|
20,376 |
|
|
|
17,798 |
|
|
|
61,760 |
|
|
|
50,759 |
|
Income tax expense |
|
130 |
|
|
|
152 |
|
|
|
312 |
|
|
|
467 |
|
Real estate-related depreciation and amortization |
|
38,307 |
|
|
|
37,620 |
|
|
|
114,819 |
|
|
|
112,215 |
|
Other depreciation and amortization |
|
614 |
|
|
|
615 |
|
|
|
1,786 |
|
|
|
1,826 |
|
Impairment losses on real estate |
|
— |
|
|
|
252,797 |
|
|
|
— |
|
|
|
252,797 |
|
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Adjustments from unconsolidated real estate JVs |
|
1,759 |
|
|
|
1,743 |
|
|
|
5,139 |
|
|
|
5,006 |
|
EBITDAre |
|
98,583 |
|
|
|
89,518 |
|
|
|
291,291 |
|
|
|
264,511 |
|
Credit loss expense |
|
38 |
|
|
|
372 |
|
|
|
496 |
|
|
|
677 |
|
Business development expenses |
|
557 |
|
|
|
313 |
|
|
|
1,790 |
|
|
|
948 |
|
Executive transition costs |
|
69 |
|
|
|
82 |
|
|
|
580 |
|
|
|
636 |
|
Net gain on other investments |
|
(11 |
) |
|
|
(25 |
) |
|
|
(488 |
) |
|
|
(25 |
) |
Adjusted EBITDA |
|
99,236 |
|
|
|
90,260 |
|
|
$ |
293,669 |
|
|
$ |
266,747 |
|
Pro forma NOI adjustment for property changes within period |
|
— |
|
|
|
1,647 |
|
|
|
|
|
||||
In-place adjusted EBITDA |
$ |
99,236 |
|
|
$ |
91,907 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures |
|
|
|
|
|
|
|
||||||||
Tenant improvements and incentives |
$ |
18,772 |
|
|
$ |
14,457 |
|
|
$ |
46,593 |
|
|
$ |
67,062 |
|
Building improvements |
|
6,694 |
|
|
|
6,307 |
|
|
|
17,352 |
|
|
|
11,214 |
|
Leasing costs |
|
3,013 |
|
|
|
1,902 |
|
|
|
9,713 |
|
|
|
7,194 |
|
Net additions to (exclusions from) tenant improvements and incentives |
|
728 |
|
|
|
(813 |
) |
|
|
4 |
|
|
|
(11,981 |
) |
Excluded building improvements and leasing costs |
|
(1,383 |
) |
|
|
(731 |
) |
|
|
(3,812 |
) |
|
|
(1,493 |
) |
Replacement capital expenditures |
$ |
27,824 |
|
|
$ |
21,122 |
|
$ |
69,850 |
|
$ |
71,996 |
|||
COPT Defense Properties Summary Financial Data (unaudited) (in thousands) |
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Interest expense |
$ |
20,376 |
|
|
$ |
17,798 |
|
|
$ |
61,760 |
|
|
$ |
50,759 |
|
Less: Amortization of deferred financing costs |
|
(671 |
) |
|
|
(639 |
) |
|
|
(2,037 |
) |
|
|
(1,899 |
) |
Less: Amortization of net debt discounts, net of amounts capitalized |
|
(1,032 |
) |
|
|
(750 |
) |
|
|
(3,069 |
) |
|
|
(1,990 |
) |
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 |
|
821 |
|
|
|
805 |
|
|
|
2,433 |
|
|
|
2,369 |
|
Scheduled principal amortization |
|
448 |
|
|
|
753 |
|
|
|
1,879 |
|
|
|
2,289 |
|
Capitalized interest |
|
712 |
|
|
|
1,487 |
|
|
|
1,944 |
|
|
|
3,451 |
|
Denominator for fixed charge coverage-Adjusted EBITDA |
$ |
20,654 |
|
|
$ |
19,454 |
|
|
$ |
62,910 |
|
|
$ |
54,979 |
|
|
|
|
|
|
|
|
|
||||||||
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) |
$ |
37,397 |
|
|
$ |
(221,207 |
) |
|
$ |
107,475 |
|
|
$ |
(109,167 |
) |
Construction contract and other service revenues |
|
(16,662 |
) |
|
|
(11,949 |
) |
|
|
(63,523 |
) |
|
|
(42,012 |
) |
Depreciation and other amortization associated with real estate operations |
|
38,307 |
|
|
|
37,620 |
|
|
|
114,819 |
|
|
|
112,215 |
|
Construction contract and other service expenses |
|
16,127 |
|
|
|
11,493 |
|
|
|
61,746 |
|
|
|
40,249 |
|
Impairment losses |
|
— |
|
|
|
252,797 |
|
|
|
— |
|
|
|
252,797 |
|
General and administrative expenses |
|
8,157 |
|
|
|
7,582 |
|
|
|
25,126 |
|
|
|
22,865 |
|
Leasing expenses |
|
2,341 |
|
|
|
2,280 |
|
|
|
6,990 |
|
|
|
6,624 |
|
Business development expenses and land carry costs |
|
918 |
|
|
|
714 |
|
|
|
3,079 |
|
|
|
1,935 |
|
Interest expense |
|
20,376 |
|
|
|
17,798 |
|
|
|
61,760 |
|
|
|
50,759 |
|
Interest and other income, net |
|
(3,324 |
) |
|
|
(2,529 |
) |
|
|
(10,330 |
) |
|
|
(6,928 |
) |
Gain on sales of real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(49,392 |
) |
Equity in (income) loss of unconsolidated entities |
|
(85 |
) |
|
|
68 |
|
|
|
(180 |
) |
|
|
21 |
|
Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income (loss) of unconsolidated entities |
|
1,844 |
|
|
|
1,675 |
|
|
|
5,319 |
|
|
|
4,988 |
|
Income tax expense |
|
130 |
|
|
|
152 |
|
|
|
312 |
|
|
|
467 |
|
NOI from real estate operations |
|
105,526 |
|
|
|
96,494 |
|
|
|
312,593 |
|
|
|
285,421 |
|
Non-Same Property NOI from real estate operations |
|
(6,875 |
) |
|
|
(1,455 |
) |
|
|
(19,867 |
) |
|
|
(3,436 |
) |
Same Property NOI from real estate operations |
|
98,651 |
|
|
|
95,039 |
|
|
|
292,726 |
|
|
|
281,985 |
|
Straight line rent adjustments and lease incentive amortization |
|
1,531 |
|
|
|
10,154 |
|
|
|
9,399 |
|
|
|
3,888 |
|
Amortization of acquired above- and below-market rents |
|
(69 |
) |
|
|
(120 |
) |
|
|
(207 |
) |
|
|
(415 |
) |
Lease termination fees, net |
|
(931 |
) |
|
|
(748 |
) |
|
|
(2,587 |
) |
|
|
(3,028 |
) |
Tenant funded landlord assets and lease incentives |
|
(1,942 |
) |
|
|
(15,402 |
) |
|
|
(12,630 |
) |
|
|
(18,837 |
) |
Cash NOI adjustments in unconsolidated real estate JVs |
|
(136 |
) |
|
|
(130 |
) |
|
|
(364 |
) |
|
|
(420 |
) |
Same Property Cash NOI from real estate operations |
$ |
97,104 |
|
|
$ |
88,793 |
|
|
$ |
286,337 |
|
|
$ |
263,173 |
|
COPT Defense Properties Summary Financial Data (unaudited) (in thousands) |
||||||||
|
|
September 30,
|
|
December 31,
|
||||
Reconciliation of total assets to adjusted book |
|
|
|
|
||||
Total assets |
|
$ |
4,234,302 |
|
|
$ |
4,246,966 |
|
Accumulated depreciation |
|
|
1,502,730 |
|
|
|
1,400,162 |
|
Accumulated amortization of intangibles on property acquisitions and deferred leasing costs |
|
|
227,281 |
|
|
|
228,484 |
|
COPT Defense’s share of liabilities of unconsolidated real estate JVs |
|
|
61,118 |
|
|
|
60,583 |
|
COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs |
|
|
12,014 |
|
|
|
9,528 |
|
Less: Property - operating lease liabilities |
|
|
(33,615 |
) |
|
|
(33,931 |
) |
Less: Property - finance lease liabilities |
|
|
(397 |
) |
|
|
(415 |
) |
Less: Cash and cash equivalents |
|
|
(34,478 |
) |
|
|
(167,820 |
) |
Less: COPT Defense’s share of cash of unconsolidated real estate JVs |
|
|
(1,575 |
) |
|
|
(852 |
) |
Adjusted book |
|
$ |
5,967,380 |
|
|
$ |
5,742,705 |
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
||||||||
Reconciliation of debt to net debt and net debt adjusted for fully-leased investment properties |
|
|
|
|
|
|
|||||||
Debt per balance sheet |
|
$ |
2,390,839 |
|
|
$ |
2,416,287 |
|
|
$ |
2,415,783 |
|
|
Net discounts and deferred financing costs |
|
|
24,633 |
|
|
|
28,713 |
|
|
|
29,980 |
|
|
COPT Defense’s share of unconsolidated JV gross debt |
|
|
53,148 |
|
|
|
52,613 |
|
|
|
52,511 |
|
|
Gross debt |
|
|
2,468,620 |
|
|
|
2,497,613 |
|
|
|
2,498,274 |
|
|
Less: Cash and cash equivalents |
|
|
(34,478 |
) |
|
|
(167,820 |
) |
|
|
(204,238 |
) |
|
Less: COPT Defense’s share of cash of unconsolidated real estate JVs |
|
|
(1,575 |
) |
|
|
(852 |
) |
|
|
(1,031 |
) |
|
Net debt |
|
|
2,432,567 |
|
|
|
2,328,941 |
|
|
|
2,293,005 |
|
|
Costs incurred on fully-leased development properties |
|
|
(70,954 |
) |
|
|
(53,914 |
) |
|
|
(124,038 |
) |
|
Costs incurred on fully-leased operating property acquisitions |
|
|
(17,034 |
) |
|
|
— |
|
|
|
— |
|
|
Net debt adjusted for fully-leased investment properties |
|
$ |
2,344,579 |
|
|
$ |
2,275,027 |
|
|
$ |
2,168,967 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241028177751/en/
IR Contacts:
Venkat Kommineni, CFA
443.285.5587
venkat.kommineni@copt.com
Michelle Layne
443.285.5452
michelle.layne@copt.com
Source: COPT Defense Properties
