COPT Defense Properties Files Q3 2024 10-Q

TL;DR

COP Q3 10-Q filed Nov 4. Financials and ops update for period ending Sep 30, 2024.

AI Summary

COPT Defense Properties (COP) filed its Q3 2024 10-Q report on November 4, 2024, covering the period ending September 30, 2024. The filing details the company's financial performance and operational status. Specific financial figures and operational metrics for the third quarter and year-to-date periods are presented within the report.

Why It Matters

This filing provides investors with an update on COPT Defense Properties' financial health and operational performance for the third quarter of 2024, crucial for investment decisions.

Risk Assessment

Risk Level: medium — As a real estate investment trust, COP is subject to market fluctuations, interest rate changes, and tenant-specific risks that can impact its financial performance.

Key Players & Entities

• COPT Defense Properties (company) — Filer of the 10-Q report
• 0000860546 (company) — Central Index Key for COPT Defense Properties
• 20240930 (date) — End of the reporting period for the 10-Q
• 20241104 (date) — Filing date of the 10-Q

FAQ

Key Financial Figures

• $0.01 — Common Shares of beneficial interest, $0.01 par value CDP New York Stock Exchange

Filing Documents

• ofc-20240930.htm (10-Q) — 1999KB
• cdp09302024ex311.htm (EX-31.1) — 11KB
• cdp09302024ex312.htm (EX-31.2) — 11KB
• cdp09302024ex321.htm (EX-32.1) — 5KB
• cdp09302024ex322.htm (EX-32.2) — 5KB
• ofc-20240930_g1.jpg (GRAPHIC) — 18KB
• 0000860546-24-000062.txt ( ) — 11616KB
• ofc-20240930.xsd (EX-101.SCH) — 86KB
• ofc-20240930_cal.xml (EX-101.CAL) — 111KB
• ofc-20240930_def.xml (EX-101.DEF) — 390KB
• ofc-20240930_lab.xml (EX-101.LAB) — 926KB
• ofc-20240930_pre.xml (EX-101.PRE) — 650KB
• ofc-20240930_htm.xml (XML) — 2159KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Financial Statements Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 (unaudited) 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 40 Item 4.

Controls and Procedures

Controls and Procedures 41

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 41 Item 1A.

Risk Factors

Risk Factors 41 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 3. Defaults Upon Senior Securities 42 Item 4. Mine Safety Disclosures 42 Item 5. Other Information 42 Item 6. Exhibits 43

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements COPT Defense Properties and Subsidiaries Consolidated Balance Sheets (in thousands, except share data) (unaudited) September 30, 2024 December 31, 2023 Assets Properties, net: Operating properties, net $ 3,289,959 $ 3,246,806 Projects in development or held for future development 314,729 256,872 Total properties, net 3,604,688 3,503,678 Property - operating right-of-use assets 40,523 41,296 Cash and cash equivalents 34,478 167,820 Investment in unconsolidated real estate joint ventures 39,720 41,052 Accounts receivable, net 42,240 48,946 Deferred rent receivable 159,182 149,237 Lease incentives, net 63,034 61,331 Deferred leasing costs (net of accumulated amortization of $ 44,178 and $ 41,448 , respectively) 71,815 70,057 Investing receivables (net of allowance for credit losses of $ 2,867 and $ 2,377 , respectively) 83,536 81,512 Prepaid expenses and other assets, net 95,086 82,037 Total assets $ 4,234,302 $ 4,246,966 Liabilities and equity Liabilities: Debt, net $ 2,390,839 $ 2,416,287 Accounts payable and accrued expenses 134,112 133,315 Rents received in advance and security deposits 33,213 35,409 Dividends and distributions payable 33,915 32,644 Deferred revenue associated with operating leases 37,660 29,049 Property - operating lease liabilities 33,615 33,931 Other liabilities 15,917 18,996 Total liabilities 2,679,271 2,699,631 Commitments and contingencies (Note 17) Redeemable noncontrolling interests 22,436 23,580 Equity: Shareholders' equity: Common Shares of beneficial interest ($ 0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,693,206 at September 30, 2024 and 112,555,352 at December 31, 2023) 1,127 1,126 Additional paid-in capital 2,493,340 2,489,989 Cumulative distributions in excess of net income ( 1,005,260 ) ( 1,009,318 ) Accumulated other comprehensive income 58 2,115 Total shareholders' equity 1,489,265 1,483,912 Noncontrolling interest

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) 1. Organization COPT Defense Properties ("COPT Defense") and subsidiaries (collectively, the "Company", "we" or "us") is a fully-integrated and self-managed real estate investment trust ("REIT") focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government ("USG") defense installations and missions (which we refer to herein as our Defense/IT Portfolio). Our tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of September 30, 2024, our Defense/IT Portfolio included: > 194 operating properties totaling 22.2 million square feet comprised of 16.5 million square feet in 164 office properties and 5.7 million square feet in 30 single-tenant data center shells. We owned 24 of these data center shells through unconsolidated real estate joint ventures; > five properties under development ( two office properties and three data center shells) that will total approximately 831,000 square feet upon completion; and > approximately 1,020 acres of land controlled that we believe could be developed into approximately 11.0 million square feet. We also owned eight other operating properties totaling 2.1 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of September 30, 2024. We conduct almost all of our operations and own almost all of our assets through our operating partnership, COPT Defense Properties, L.P. ("CDPLP") and subsidiaries (collectively, the "Operating Partnership"), of which COPT Defense is the sole general partner. CDPLP owns real estate directly and through subsidiary partnerships and limited liability companies ("LLCs"). In addition to owning real estate, CDPLP also owns subsidiaries that provide real estate se

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