Earns CDP's highest rating for supply chain engagement on climate Adds to other CDP recognition—Water Security A List and leadership score on climate change Drives sustainability through value chain decarbonization empowermentSHANGHAI, Aug. 6, 2025 /PRNewswire/ -- WuXi Biologics (2269.HK), a leading global Contract Research, Development, and Manufacturing Organization (CRDMO), today announced it was named to the A List for the Supplier Engagement Assessment (SEA) by CDP, the environmental non-profit organi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-14023 FORM 10-Q (Mark one) COPT DEFENSE PROPERTIES ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or (Exact name of registrant as specified in its charter) Maryland 23-2947217 (State or other jurisdiction ...

Albert Anthony is the pen name of a Croatian-American business author who is a media contributor on investor platform Seeking Alpha, where he has over +1K followers, & also writes for platforms like Investing dot com and is launching a book on Amazon in 2025 called Financial Markets: The Next Generation. Calling himself part of the new generation of analysts in the financial markets, he comes from a non-traditional financial background having been an analyst in the IT sector for several Fortune 500 companie ...

Financial Data and Key Metrics Changes - The company reported FFO per share of $0.68, which is $0.02 above the midpoint of guidance and represents a year-over-year increase of 6.3% [4][24] - Same property cash NOI increased by 2.2% year-over-year, driven by a 50 basis point increase in average occupancy [25][24] - The company increased the midpoint of full year guidance for same property cash NOI growth by 50 basis points to 3.25% [25] Business Line Data and Key Metrics Changes - The total portfolio is 95.6% leased, the highest level in nearly twenty years, with tenant retention at 90% during the quarter [5][12] - The defense IT portfolio occupancy increased to 95.6%, with Northern Virginia properties reaching 94% leased and 93% occupied, the highest levels in over a decade [12] - The company signed 353,000 square feet of vacancy leasing during the first half of the year, achieving 88% of the full year target [5][13] Market Data and Key Metrics Changes - The defense budget for 2026 is projected at nearly $950 billion, a 13% year-over-year increase, which is the largest nominal increase in at least twenty-five years [7][11] - The intelligence budget is expected to increase by $14 billion or 14% year-over-year, which is a key demand driver for the company's Northern Virginia and Fort Meade portfolios [8][11] Company Strategy and Development Direction - The company is focused on capturing additional leasing demand and capitalizing on external growth opportunities due to the strong growth outlook for defense spending [22][31] - The company plans to maintain its full year guidance for capital commitment to new investments at $200 million to $250 million [21] - The company is in advanced stages of negotiations on multiple build-to-suit opportunities, targeting an 8.5% cash yield on initial development costs [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the leasing environment, noting strong demand and tenant sentiment following the recent defense budget appropriations [38][58] - The company anticipates enhanced leasing activity will resume in 2026 following the appropriation of the 2025 defense budget [13] - Management expects 2025 to be the seventh consecutive year of FFO per share growth, with a revised guidance implying an annual increase of 3.9% [30][31] Other Important Information - The company has a strong balance sheet, with 97% of its debt at fixed rates, and plans to refinance a $400 million bond maturing in March 2026 [27][28] - The company is tracking a 1,300,000 square foot development leasing pipeline, with an additional 1,100,000 square feet of potential development opportunities [22] Q&A Session Summary Question: Can you talk about the build-to-suit negotiations and expected returns? - Management indicated ongoing discussions in three submarkets, targeting an 8.5% cash yield on initial development costs, with positive trends in negotiations [36] Question: What immediate impacts have been felt from the new legislation? - Management noted an increase in optimism and activity from tenants following the election, with a strong outlook maintained [38] Question: How do you expect the new defense budget to translate into opportunities? - Management highlighted expectations for mission expansions and increased leasing activity, particularly in the intelligence community [42] Question: What is the status of the $400 million bond issuance? - Management provided current trading spreads for potential bond issuance, indicating ongoing evaluation of terms [46] Question: Are any build-to-suit opportunities tied to Golden Dome or Space Command? - Management clarified that current negotiations do not involve these programs, but expressed readiness to support future needs [50] Question: Can you discuss the current leasing environment and demand? - Management reported strong demand across all submarkets, with notable interest in specific properties [58] Question: What are the plans for the Des Moines land parcel? - Management is engaged with the power company for future capacity, indicating a long-term investment perspective [59][62]

Financial Data and Key Metrics Changes - The company reported FFO per share of $0.68, which is $0.02 above the midpoint of guidance and represents a 6.3% year-over-year increase [3][4][22] - Same property cash NOI increased by 2.2% year-over-year, driven by a 50 basis point increase in average occupancy [4][22] - The company increased the midpoint of full year guidance for same property cash NOI growth by 50 basis points to 3.25% [22][25] Business Line Data and Key Metrics Changes - The total portfolio is 95.6% leased, the highest level in nearly twenty years, with a tenant retention rate of 90% during the quarter [4][11] - The company signed 353,000 square feet of vacancy leasing during the first half of the year, achieving 88% of the initial full year target [4][12] - In the defense IT portfolio, occupancy increased to 95.6%, with Northern Virginia properties reaching 94% leased, the highest levels in over a decade [11][12] Market Data and Key Metrics Changes - The defense budget for 2026 is projected at nearly $950 billion, a 13% year-over-year increase, which is the largest nominal increase in at least twenty-five years [6][10] - The intelligence budget is set to increase by $14 billion or 14% year-over-year, which is a key demand driver for the company's Northern Virginia and Fort Meade portfolios [7][10] Company Strategy and Development Direction - The company is focused on capitalizing on the increased defense spending, particularly in areas such as intelligence, surveillance, reconnaissance, and cybersecurity [10][27] - The company plans to maintain a capital commitment for new investments between $200 million and $250 million, with a development leasing pipeline of 1.3 million square feet [20][21] - The company is well-positioned to capture additional leasing demand and capitalize on external growth opportunities due to the strong growth outlook for defense spending [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the leasing environment, noting strong demand and tenant activity following the recent defense budget appropriations [34][52] - The company anticipates enhanced leasing activity will resume in 2026, following the appropriations and contract awards [12][27] - Management expects 2025 to be the seventh consecutive year of FFO per share growth, with a revised guidance implying an annual increase of 3.9% [26][27] Other Important Information - The company has a strong balance sheet, with 97% of its debt at fixed rates, and plans to refinance a $400 million bond maturing in March 2026 [24][25] - The company is focused on maintaining high tenant retention rates, with a historical retention rate of 98% over the past three years for large leases [15][16] Q&A Session Summary Question: Can you talk about the build-to-suit negotiations and expected returns? - The company is in discussions across three sub-markets, targeting an 8.5% cash yield on initial development costs, with positive trends in negotiations [32] Question: What immediate impacts have you felt from the new legislation? - There has been an increase in optimism and activity from tenants, although no significant inflection has been noted since the legislation passed [34] Question: How do you expect the new legislation to translate into opportunities? - The legislation is expected to lead to mission expansions and increased activity in the intelligence community, which should benefit the company's portfolio [38] Question: What is the current leasing environment like? - The leasing environment remains strong, with contractors showing clarity and optimism following the budget passing [52] Question: Are there any plans to bring assets to market? - The company is eager to bring assets to market but is waiting for an improvement in the interest rate environment [76]

Financial Performance - The Funds From Operations Per Share (FFOPS), adjusted for comparability, reached $0.68 for 2Q25 and $1.33 for 1H25[12] - Year-over-year FFO per share growth was 6.3% for 2Q25 and 4.7% for 1H25[12] - The company increased 2025 FFO per share guidance by 1 cent at the midpoint, implying 3.9% year-over-year growth[19, 81] - Same Property Cash Net Operating Income (NOI) increased by 2.2% for 2Q25 and 4.6% for 1H25 across the total portfolio[12] Portfolio Metrics - Occupancy rate for the Defense/IT Portfolio was 95.6% occupied and 96.8% leased[12] - Total leasing activity amounted to 724,000 square feet in 2Q25 and 1.4 million square feet in 1H25[12] - The company increased the annual vacancy leasing target to 450,000 square feet from 400,000 square feet[12, 55] - Tenant retention rate for the total portfolio was 90%[12] Strategic Factors - The One Big Beautiful Bill Act (OBBBA) passed in July 2025, adding approximately $113 billion for Department of Defense (DOD) activities in FY 2026, representing a 13% increase over FY 2025 enacted levels[30] - The company expects to renew approximately 95% of large leases (greater than 50,000 square feet) expiring through year-end 2026[66]

Group 1 - COPT Defense (CDP) reported quarterly funds from operations (FFO) of $0.68 per share, exceeding the Zacks Consensus Estimate of $0.67 per share, and up from $0.64 per share a year ago [1][2] - The company achieved revenues of $189.92 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.13%, compared to $187.34 million in the same quarter last year [3] - COPT Defense has outperformed consensus FFO estimates two times and revenue estimates four times over the last four quarters [2][3] Group 2 - The stock has underperformed the market, losing about 9.4% since the beginning of the year, while the S&P 500 gained 8.6% [4] - The current consensus FFO estimate for the upcoming quarter is $0.68 on revenues of $187.28 million, and for the current fiscal year, it is $2.67 on revenues of $749.72 million [8] - The Zacks Industry Rank for REIT and Equity Trust - Other is in the top 38% of over 250 Zacks industries, indicating a favorable outlook for the industry [9]

[Overview](index=3&type=section&id=OVERVIEW) [Summary Description](index=3&type=section&id=Summary%20Description) COPT Defense Properties is a REIT specializing in properties for the U.S. Government and defense contractors, with its **22.6 million** sq ft Defense/IT Portfolio **96.8%** leased - The company focuses on properties near key U.S. Government defense installations, serving tenants engaged in priority national security activities[5](index=5&type=chunk) Portfolio Snapshot as of June 30, 2025 | Metric | Value | | :--- | :--- | | **Portfolio** | Defense/IT | | **Number of Properties** | 198 | | **Total Square Feet** | **22.6 million** | | **% Leased** | **96.8%** | - The company holds investment-grade credit ratings: Fitch (**BBB-** Stable), Moody's (**Baa3** Positive), and S&P (**BBB-** Stable)[6](index=6&type=chunk) [Equity Research Coverage](index=4&type=section&id=Equity%20Research%20Coverage) Eight investment firms publish research on COPT Defense Properties, with their analyses not representing the company's views - The company is covered by analysts from firms including BTIG, Citigroup, Evercore ISI, Green Street, Jefferies, JP Morgan, Truist Securities, and Wells Fargo Securities[9](index=9&type=chunk) [Selected Financial Summary Data](index=5&type=section&id=Selected%20Financial%20Summary%20Data) Q2 **2025** net income was **$40.2 million** and diluted FFO per share **$0.68**, with six-month net income growing to **$76.4 million** and net debt to EBITDA stable at **5.9x** Q2 2025 Financial Highlights (Three Months Ended 6/30/25) | Metric | Value (in thousands, except per share) | | :--- | :--- | | Net income | **$40,166** | | Diluted EPS | **$0.34** | | FFO per Nareit | **$80,471** | | Diluted FFO per share | **$0.68** | | Dividend per common share | **$0.305** | Six Months Ended Financial Comparison (6/30/25 vs 6/30/24) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net income | **$76,394** | **$70,078** | | Diluted EPS | **$0.64** | **$0.60** | | Diluted FFO per share | **$1.33** | **$1.27** | | Same Property cash NOI | **$202,872** | **$194,027** | Key Ratios as of 6/30/25 | Ratio | Value | | :--- | :--- | | Debt to assets | **56.9%** | | Diluted FFO Payout Ratio | **44.5%** | | Diluted AFFO Payout Ratio | **60.7%** | | Net debt to in-place adj. EBITDA ratio | **5.9x** | [Selected Portfolio Data](index=7&type=section&id=Selected%20Portfolio%20Data) As of Q2 **2025**, the total portfolio was **95.6%** leased (**24.6 million** sq ft), with the core Defense/IT Portfolio at **96.8%** leased (**22.6 million** sq ft) Portfolio Metrics as of June 30, 2025 | Portfolio Type | of Properties | Square Feet (thousands) | % Occupied | % Leased | | :--- | :--- | :--- | :--- | :--- | | **Total Portfolio** | **204** | **24,571** | **94.0%** | **95.6%** | | **Defense/IT Portfolio** | **198** | **22,583** | **95.6%** | **96.8%** | | **Consolidated Portfolio** | **180** | **20,276** | **92.8%** | **94.6%** | [Financial Statements](index=8&type=section&id=FINANCIAL%20STATEMENTS) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June **30**, **2025**, total assets were **$4.29 billion**, liabilities **$2.72 billion**, debt **$2.44 billion**, and equity **$1.55 billion**, reflecting steady growth Consolidated Balance Sheet Highlights (in thousands) | Account | 6/30/25 | 12/31/24 | | :--- | :--- | :--- | | **Total properties, net** | **$3,682,556** | **$3,630,526** | | **Total assets** | **$4,286,950** | **$4,254,191** | | **Debt** | **$2,438,591** | **$2,391,755** | | **Total liabilities** | **$2,717,951** | **$2,693,624** | | **Total equity** | **$1,545,741** | **$1,536,593** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 **2025** revenues reached **$189.9 million** and net income **$40.2 million**, with six-month net income rising to **$76.4 million** from **$70.1 million** in **2024** Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues | **$189,915** | **$187,343** | | Total operating expenses | **$130,272** | **$133,215** | | Interest expense | (**$20,938**) | (**$20,617**) | | Net income | **$40,166** | **$36,407** | | Net income attributable to common shareholders | **$38,347** | **$35,114** | [Funds from Operations (FFO)](index=10&type=section&id=Funds%20from%20Operations) Q2 **2025** FFO per Nareit was **$80.5 million**, with diluted FFO at **$78.6 million**; six-month diluted FFO grew to **$153.1 million** from **$146.2 million** FFO Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | **$40,166** | **$36,407** | | Real estate-related depreciation and amortization | **$39,573** | **$38,161** | | **FFO - per Nareit** | **$80,471** | **$75,346** | | **Diluted FFO available to common share and common unit holders** | **$78,635** | **$74,280** | [Diluted Share and Unit Computations](index=11&type=section&id=Diluted%20Share%20%2B%20Unit%20Computations) Q2 **2025** diluted EPS was **$0.34** and diluted FFO per share **$0.68**, up from **$0.31** and **$0.64** respectively in Q2 **2024** Per Share Data for Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted EPS | **$0.34** | **$0.31** | | Diluted FFO per share - Nareit | **$0.68** | **$0.64** | | Diluted FFO per share - as adjusted | **$0.68** | **$0.64** | | Denominator for diluted EPS (thousands) | **113,224** | **112,785** | | Denominator for diluted FFO (thousands) | **115,401** | **115,414** | [Adjusted Funds from Operations (AFFO)](index=12&type=section&id=Adjusted%20Funds%20from%20Operations) Q2 **2025** diluted AFFO was **$57.7 million**, lower than Q2 **2024**'s **$61.4 million**, primarily due to higher replacement capital expenditures Diluted AFFO Reconciliation for Q2 2025 (in thousands) | Line Item | Amount | | :--- | :--- | | Diluted FFO available, as adjusted | **$78,635** | | Straight line rent adjustments | (**$1,836**) | | Share-based compensation | **$2,924** | | Replacement capital expenditures | (**$23,919**) | | **Diluted AFFO available** | **$57,660** | [EBITDAre and Adjusted EBITDA](index=13&type=section&id=EBITDAre%20%2B%20Adjusted%20EBITDA) Q2 **2025** EBITDAre was **$102.8 million**, with Adjusted EBITDA at **$104.7 million**, a notable increase from Q2 **2024**'s **$98.6 million** EBITDAre and Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | **$40,166** | **$36,407** | | Interest expense | **$20,938** | **$20,617** | | Real estate-related depreciation & amortization | **$39,573** | **$38,161** | | **EBITDAre** | **$102,777** | **$97,472** | | **Adjusted EBITDA** | **$104,726** | **$98,592** | | **In-place adjusted EBITDA** | **$104,803** | **$98,619** | [Portfolio Information](index=14&type=section&id=PORTFOLIO%20INFORMATION) [Properties by Segment](index=14&type=section&id=Properties%20by%20Segment) As of June **30**, **2025**, the Defense/IT Portfolio (**198** properties) was **96.8%** leased, with Data Center Shells **100%** leased, indicating strong demand Defense/IT Portfolio by Segment (as of 6/30/25) | Segment | of Properties | Operational Square Feet (k) | % Occupied | % Leased | | :--- | :--- | :--- | :--- | :--- | | Fort Meade/BW Corridor | **95** | **9,234** | **94.5%** | **95.5%** | | NoVA Defense/IT | **16** | **2,501** | **93.1%** | **94.1%** | | Lackland Air Force Base | **9** | **1,142** | **100.0%** | **100.0%** | | Redstone Arsenal | **25** | **2,511** | **95.8%** | **98.4%** | | Data Center Shells (Total) | **31** | **5,924** | **100.0%** | **100.0%** | | **Total Defense/IT Portfolio** | **198** | **22,583** | **95.6%** | **96.8%** | [Consolidated Real Estate Revenues & NOI by Segment](index=15&type=section&id=Consolidated%20Real%20Estate%20Revenues%20%2B%20NOI%20by%20Segment) Q2 **2025** consolidated Defense/IT Portfolio generated **$158.7 million** in revenues and **$103.8 million** in NOI, with total NOI at **$112.4 million** Q2 2025 Revenue and NOI by Segment (in thousands) | Segment | Consolidated Real Estate Revenues | NOI from Real Estate Operations | | :--- | :--- | :--- | | Fort Meade/BW Corridor | **$81,337** | **$54,440** | | NoVA Defense/IT | **$22,018** | **$13,160** | | Redstone Arsenal | **$18,977** | **$12,817** | | **Total Defense/IT Portfolio** | **$158,709** | **$103,784** | | **Total Real Estate Operations** | **$177,457** | **$112,412** | [Cash NOI by Segment](index=16&type=section&id=Cash%20NOI%20by%20Segment) Q2 **2025** total Cash NOI was **$104.9 million**, up from **$101.4 million** in Q2 **2024**, with the Defense/IT Portfolio contributing **$96.9 million** Q2 2025 Cash NOI by Segment (in thousands) | Segment | Q2 2025 Cash NOI | Q2 2024 Cash NOI | | :--- | :--- | :--- | | Fort Meade/BW Corridor | **$51,640** | **$51,380** | | NoVA Defense/IT | **$12,717** | **$12,452** | | **Total Defense/IT Portfolio** | **$96,873** | **$93,875** | | **Total Cash NOI** | **$104,927** | **$101,381** | [NOI and Occupancy by Property Grouping](index=17&type=section&id=NOI%20from%20Real%20Estate%20Operations%20%2B%20Occupancy%20by%20PropertyGrouping) As of June **30**, **2025**, the Same Property portfolio was **96.2%** occupied, generating **$100.4 million** in Q2 NOI and accounting for **87.5%** of total ARR Portfolio Breakdown as of 6/30/25 | Property Grouping | of Properties | % Occupied | % Leased | Q2 2025 NOI (thousands) | | :--- | :--- | :--- | :--- | :--- | | **Same Property (Defense/IT)** | **192** | **96.2%** | **97.0%** | **$100,434** | | **Properties Placed in Service** | **4** | **84.4%** | **93.8%** | **$2,424** | | **Acquired properties** | **2** | **67.4%** | **84.4%** | **$926** | | **Total Portfolio** | **204** | **94.0%** | **95.6%** | **$112,412** | [Same Property Occupancy Rates by Segment](index=18&type=section&id=Same%20Property%20Average%20Occupancy%20Rates%20by%20Segment) The Same Property portfolio maintained high occupancy, with period-end rates increasing to **94.5%** overall and **96.2%** for Defense/IT in Q2 **2025** Same Property Period End Occupancy Rates | Portfolio | 6/30/25 | 3/31/25 | 6/30/24 | | :--- | :--- | :--- | :--- | | Total Same Property | **94.5%** | **94.1%** | **93.9%** | | Defense/IT Portfolio | **96.2%** | **95.9%** | **95.8%** | [Same Property Revenues and NOI by Segment](index=19&type=section&id=Same%20Property%20Real%20Estate%20Revenues%20%2B%20NOI%20by%20Segment) Q2 **2025** Same Property NOI increased to **$108.7 million**, with year-to-date growth of **3.8%** to **$212.9 million**, driven by the Defense/IT portfolio Same Property NOI Comparison (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Same Property NOI** | **$108,665** | **$104,092** | **$212,941** | **$205,204** | | **Defense/IT Portfolio Same Property NOI** | **$100,434** | **$96,673** | **$195,631** | **$191,552** | [Same Property Cash NOI by Segment](index=20&type=section&id=Same%20Property%20Cash%20NOI%20by%20Segment) Total Same Property Cash NOI increased by **2.2%** in Q2 **2025** and **4.6%** year-to-date, with the Defense/IT portfolio showing **2.0%** and **3.0%** growth respectively - Total Same Property cash NOI increased by **2.2%** in Q2 **2025** and **4.6%** for the six months ended **6/30/25**, compared to the same periods in the prior year[61](index=61&type=chunk)[62](index=62&type=chunk) - The Defense/IT Portfolio's Same Property cash NOI grew by **2.0%** in Q2 **2025** and **3.0%** for the six months ended **6/30/25**, year-over-year[61](index=61&type=chunk)[62](index=62&type=chunk) [Leasing Activity](index=21&type=section&id=Leasing) Q2 **2025** leasing totaled **724,000** sq ft with **89.7%** retention, and straight-line rents on renewals increased **9.5%**, while cash rents decreased **3.1%** Leasing Summary for Q2 2025 (Total Portfolio) | Leasing Metric | Square Feet (thousands) | Details | | :--- | :--- | :--- | | **Total Leased** | **724** | - | | Renewed Space | **477** | **89.7%** Retention Rate | | Vacant Space Leased | **233** | Avg. Term: **7.9** years | | New Leases (Investment) | **14** | Avg. Term: **5.4** years | - For renewed space in Q2 **2025**, straight-line rents increased by **9.5%**, while cash rents decreased by **3.1%**[65](index=65&type=chunk) - For the six months ended June **30**, **2025**, total leasing activity was **1,371,000** square feet, with a tenant retention rate of **81.9%**[69](index=69&type=chunk) [Lease Expiration Analysis](index=23&type=section&id=Lease%20Expiration%20Analysis) As of June **30**, **2025**, **17.3%** of Defense/IT ARR expires in remaining **2025**, with a **5.0**-year weighted average lease term and **37.2%** expiring after **2029** Defense/IT Portfolio Lease Expiration Schedule by ARR | Year of Expiration | % of Defense/IT ARR Expiring | | :--- | :--- | | **2025** | **17.3%** | | **2026** | **9.1%** | | **2027** | **9.4%** | | **2028** | **15.7%** | | **2029** | **11.3%** | | Thereafter | **37.2%** | - The weighted average remaining lease term for the total portfolio is **5.0** years as of June **30**, **2025**[73](index=73&type=chunk) [2025 Defense/IT Portfolio Quarterly Lease Expiration Analysis](index=25&type=section&id=2025%20Defense%2FIT%20Portfolio%20Quarterly%20Lease%20Expiration%20Analysis) Remaining **2025** Defense/IT lease expirations total **$109.4 million** in ARR, with Q3 seeing **8.9%** (**$55.9 million**) and Q4 **8.5%** (**$53.5 million**) 2025 Quarterly Lease Expirations (Defense/IT Portfolio) | Quarter of Expiration | Square Footage Expiring (k) | Annualized Rental Revenue Expiring (k) | % of Defense/IT ARR Expiring | | :--- | :--- | :--- | :--- | | Q3 **2025** | **1,296** | **$55,909** | **8.9%** | | Q4 **2025** | **943** | **$53,488** | **8.5%** | | **Total 2025 Remaining** | **2,239** | **$109,397** | **17.3%** | [Top 20 Tenants](index=26&type=section&id=Top%2020%20Tenants) The top **20** tenants, including the U.S. Government (**35.8%** of ARR), account for **73.0%** of total annualized rental revenue, highlighting portfolio stability - The U.S. Government is the largest tenant, accounting for **35.8%** of total Annualized Rental Revenue (ARR) and occupying **5.6 million** square feet[81](index=81&type=chunk) - The top **20** tenants, including major defense contractors like General Dynamics, Northrop Grumman, and The Boeing Company, represent **73.0%** of total ARR[81](index=81&type=chunk) [Investing Activity](index=27&type=section&id=INVESTING%20ACTIVITY) [Summary of Development Projects](index=27&type=section&id=Summary%20of%20Development%20Projects) As of June **30**, **2025**, COPT Defense has a **756,000** sq ft development pipeline (**62%** pre-leased) with an anticipated cost of **$308.7 million**, including fully leased data center shells Development Pipeline Summary (as of 6/30/25) | Metric | Value | | :--- | :--- | | Total Projects | **5** | | Total Rentable Square Feet | **756,000** | | % Leased | **62%** | | Anticipated Total Cost | **$308.7 million** | | Cost to Date | **$134.4 million** | - The development pipeline is heavily weighted towards data center shells, with two projects in Northern VA totaling **418,000** sq. ft. that are **100%** leased[84](index=84&type=chunk) [Development Placed in Service](index=28&type=section&id=Development%20Placed%20in%20Service) In H1 **2025**, **36,000** sq ft of the **9700** Advanced Gateway project in Huntsville, AL, was placed in service and was **100%** leased 2025 Development Placed in Service | Property | Location | Total 2025 Sq. Ft. Placed in Service | % Leased as of 6/30/25 | | :--- | :--- | :--- | :--- | | **9700** Advanced Gateway | Huntsville, AL | **36,000** | **100%** | [Summary of Land Owned/Controlled](index=29&type=section&id=Summary%20of%20Land%20Owned%2FControlled) As of June **30**, **2025**, the company holds **1,008** acres of land for future Defense/IT development, with **10.8 million** sq ft potential and a **$204.5 million** book value Land Inventory for Future Development (as of 6/30/25) | Portfolio | Acres | Estimated Developable Sq. Ft. (k) | Carrying Amount (k) | | :--- | :--- | :--- | :--- | | **Defense/IT Portfolio** | **1,008** | **10,846** | **$204,517** | | Other | **53** | **1,538** | **$9,653** | | **Total** | **1,061** | **12,384** | **$214,170** | [Capitalization](index=30&type=section&id=CAPITALIZATION) [Capitalization Overview](index=30&type=section&id=Capitalization%20Overview) As of June **30**, **2025**, total market capitalization was **$5.64 billion**, with **$2.46 billion** in consolidated debt at a **3.40%** effective rate and **97%** fixed-rate Debt Profile as of 6/30/25 | Debt Type | Wtd. Avg. Maturity (Years) | Effective Rate | Amount Outstanding (thousands) | | :--- | :--- | :--- | :--- | | Fixed-rate debt | **4.4** | **3.34%** | **$2,392,075** | | Variable-rate debt | **2.3** | **5.62%** | **$67,025** | | **Total Consolidated Debt** | **4.2** | **3.40%** | **$2,459,100** | Market Capitalization as of 6/30/25 (in thousands) | Metric | Value | | :--- | :--- | | Closing Common Share Price | **$27.58** | | Equity Market Capitalization | **$3,181,463** | | **Total Market Capitalization** | **$5,640,563** | [Summary of Outstanding Debt](index=31&type=section&id=Summary%20of%20Outstanding%20Debt) As of June **30**, **2025**, consolidated debt totaled **$2.46 billion**, primarily **$2.15 billion** in senior unsecured notes, with **$2.39 billion** being unsecured Major Debt Components as of 6/30/25 (in thousands) | Debt Instrument | Amount Outstanding | Maturity Date | | :--- | :--- | :--- | | Revolving Credit Facility | **$120,000** | Oct-**26** | | Senior Unsecured Notes (Subtotal) | **$2,145,000** | Various (**2026**-**2033**) | | Unsecured Bank Term Loan | **$125,000** | Jan-**26** | | Total Secured Debt | **$68,939** | Various (**2026**) | | **Consolidated Debt** | **$2,459,100** | - | [Debt Analysis](index=33&type=section&id=Debt%20Analysis) As of Q2 **2025**, COPT Defense complied with all debt covenants, with Total Debt to Assets at **41.4%** and Net Debt to EBITDA at **5.9x**, indicating a healthy debt profile Covenant Compliance as of 6/30/25 | Covenant (Senior Notes) | Required | Actual | | :--- | :--- | :--- | | Total Debt / Total Assets | < **60%** | **41.4%** | | Secured Debt / Total Assets | < **40%** | **1.2%** | | Debt Service Coverage | > **1.5x** | **4.8x** | | Unencumbered Assets / Unsecured Debt | > **150%** | **241.3%** | Key Debt Ratios as of 6/30/25 | Ratio | Value | | :--- | :--- | | Net debt to in-place adj. EBITDA | **5.9x** | | Adjusted EBITDA fixed charge coverage | **4.9x** | | Net debt to adjusted book | **40.6%** | [Consolidated Real Estate Joint Ventures](index=34&type=section&id=Consolidated%20Real%20Estate%20Joint%20Ventures) As of June **30**, **2025**, consolidated JVs, primarily LW Redstone, held **$866.2 million** in assets and **$68.9 million** in debt, including **24** operating properties Key Consolidated JVs as of 6/30/25 | Joint Venture | Location | COPT Ownership % | Total Assets (k) | Debt Outstanding (k) | | :--- | :--- | :--- | :--- | :--- | | M Square Associates, LLC | Suburban MD | **50%** | **$92,870** | **$46,914** | | LW Redstone Company, LLC | Huntsville, AL | **85%** | **$631,843** | **$22,025** | | Stevens Place | Washington, DC | **95%** | **$141,483** | **$0** | [Unconsolidated Real Estate Joint Ventures](index=35&type=section&id=Unconsolidated%20Real%20Estate%20Joint%20Ventures) The company holds a **10%** interest in five unconsolidated JVs with **24** data center shell properties (**4.3 million** sq ft, **100%** occupied), contributing **$1.87 million** in Q2 NOI Unconsolidated JV Summary (as of 6/30/25) | Metric | Total | COPT Defense's Share (10%) | | :--- | :--- | :--- | | of Properties | **24** | - | | Square Feet | **4,295,000** | - | | % Occupied | **100%** | - | | Total Assets (k) | **$1,022,601** | **$102,260** | | Debt (k) | **$536,435** | **$53,644** | | Q2 **2025** NOI (k) | **$18,706** | **$1,870** | [Reconciliations & Definitions](index=36&type=section&id=RECONCILIATIONS%20%2B%20DEFINITIONS) [Supplementary Reconciliations of Non-GAAP Measures](index=36&type=section&id=Supplementary%20Reconciliations%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of non-GAAP financial measures, including NOI, Cash NOI, Same Property NOI, Adjusted Book, and Net Debt, ensuring transparency - Provides a reconciliation from Net Income to NOI from real estate operations, showing a Q2 **2025** NOI of **$112.4 million**[121](index=121&type=chunk) - Details the calculation of Same Property Cash NOI, arriving at **$102.7 million** for Q2 **2025**[121](index=121&type=chunk) - Shows the calculation of Adjusted Book and Net Debt, with values of **$6.12 billion** and **$2.49 billion** respectively as of June **30**, **2025**[127](index=127&type=chunk) [Definitions](index=39&type=section&id=Definitions) This section defines key non-GAAP terms like FFO, AFFO, EBITDAre, Adjusted EBITDA, NOI, and Cash NOI, clarifying how management assesses performance - Defines Funds from Operations (FFO) according to Nareit's standard, as net income excluding gains/losses from property sales and real estate depreciation[146](index=146&type=chunk) - Defines Net Operating Income (NOI) as the primary segment performance measure, including revenues and property expenses from consolidated and unconsolidated JVs[153](index=153&type=chunk) - Defines Same Property as operating properties that have been stably owned and **100%** operational since at least January **1**, **2024**[169](index=169&type=chunk) [Earnings Release](index=44&type=section&id=EARNINGS%20RELEASE) [Second Quarter 2025 Results Highlights](index=44&type=section&id=Second%20Quarter%202025%20Results%20Highlights) COPT Defense reported strong Q2 **2025** results with **6.3%** FFO per share growth to **$0.68**, raising full-year guidance and achieving **2.2%** Same Property Cash NOI growth - FFO per Share, as Adjusted for Comparability, was **$0.68**, a **6.3%** YoY increase[173](index=173&type=chunk) - The midpoint of **2025** FFO per Share Guidance was increased by **1**-cent to **$2.67**[173](index=173&type=chunk) - The Defense/IT Portfolio was **96.8%** leased, and the company achieved **1.4 million** SF of leasing in the first half of **2025**[173](index=173&type=chunk) [Management Comments](index=45&type=section&id=Management%20Comments) CEO Stephen E. Budorick noted strong Defense/IT performance, raising **2025** guidance for cash NOI growth and tenant retention, anticipating **4%** FFO per share growth driven by increased defense spending - Raised **2025** guidance for same property cash NOI growth by **50** bps to **3.25%** and tenant retention by **250** bps to **82.5%**[177](index=177&type=chunk) - Increased the annual target for vacancy leasing by **12.5%** to **450,000** square feet[177](index=177&type=chunk) - Management anticipates continued growth driven by increased defense spending, with the 'One Big Beautiful Bill Act' adding **$150 billion** to defense spending over the next few years[178](index=178&type=chunk) [Financial and Operational Highlights](index=45&type=section&id=Financial%20and%20Operational%20Highlights) Q2 **2025** saw strong financial and operational performance, with diluted FFO per share of **$0.68**, **2.2%** Same Property cash NOI growth, and a solid **5.9x** net debt to EBITDA ratio [Operating Performance](index=45&type=section&id=Operating%20Performance) Q2 **2025** diluted EPS was **$0.34** and FFOPS **$0.68**, with the Defense/IT Portfolio **96.8%** leased and Same Property cash NOI up **2.2%** YoY Q2 2025 Operating Metrics | Metric | Value | | :--- | :--- | | Diluted EPS | **$0.34** | | Diluted FFOPS | **$0.68** | | Defense/IT Portfolio % Leased | **96.8%** | | Same Property Cash NOI Increase | **2.2%** | [Leasing Activity](index=46&type=section&id=Leasing%20Activity) Q2 **2025** total leasing was **724,000** sq ft with **89.7%** retention, and straight-line rents on renewals increased by **9.5%** Leasing Highlights | Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Total Square Feet Leased | **724,000** | **1,400,000** | | Tenant Retention Rate | **89.7%** | **81.9%** | | Straight-line Rent Change (Renewals) | **+9.5%** | **+8.8%** | | Cash Rent Change (Renewals) | **-3.1%** | **-2.0%** | [Investment Activity](index=46&type=section&id=Investment%20Activity) The active development pipeline includes five properties totaling **756,000** sq ft, **62%** leased, with an estimated total investment of **$309 million** - The development pipeline consists of **5** properties, totaling **756,000** sq. ft., which are **62%** leased, with a total estimated investment of **$309 million**[182](index=182&type=chunk) [Balance Sheet](index=46&type=section&id=Balance%20Sheet) The company maintains a strong balance sheet with a **4.9x** adjusted EBITDA fixed charge coverage and **5.9x** net debt to EBITDA, with **97%** fixed-rate debt at **3.4%** effective interest - Key leverage and coverage ratios as of June **30**, **2025**: - Adjusted EBITDA fixed charge coverage ratio: **4.9x** - Net debt to in-place adjusted EBITDA ratio: **5.9x** - Net debt adjusted for fully-leased investment properties to in-place adj. EBITDA ratio: **5.8x**[183](index=183&type=chunk) [2025 Guidance](index=47&type=section&id=2025%20Guidance) Management increased full-year **2025** diluted FFO per share guidance to **$2.65**-**$2.69** and set Q3 guidance at **$0.66**-**$0.68**, following strong H1 performance Updated 2025 Guidance | Metric | Q3 2025 Guidance | Full Year 2025 Guidance | | :--- | :--- | :--- | | Diluted EPS | **$0.32** - **$0.34** | **$1.30** - **$1.34** | | Diluted FFOPS | **$0.66** - **$0.68** | **$2.65** - **$2.69** |

Company Overview - COPT Defense (CDP) is a real estate investment trust (REIT) specializing in suburban office properties, currently experiencing a share price decline of -10.02% this year [3] - The company is based in Columbia and operates within the Finance sector [3] Dividend Information - CDP is currently distributing a dividend of $0.31 per share, resulting in a dividend yield of 4.38%, which is lower than the industry average yield of 4.84% and significantly higher than the S&P 500's yield of 1.52% [3] - The annualized dividend of $1.22 represents a 3.4% increase from the previous year, with an average annual increase of 2.33% over the last five years [4] - The current payout ratio for CDP is 47%, indicating that the company pays out 47% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate predicts earnings of $2.67 per share, reflecting a year-over-year growth rate of 3.89% [5] - The company's future dividend growth will be contingent on earnings growth and the payout ratio [4] Investment Appeal - CDP is positioned as an attractive investment opportunity due to its dividend yield and strong Zacks Rank of 2 (Buy) [6] - The company is seen as a viable option for income investors, especially in the context of rising interest rates, where high-yielding stocks may face challenges [6]

Core Viewpoint - COPT Defense (CDP) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which have a strong correlation with near-term stock price movements [4][6]. - Rising earnings estimates for COPT Defense suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - COPT Defense's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, COPT Defense is expected to earn $2.67 per share, with a 0.2% increase in the Zacks Consensus Estimate over the past three months [8].