PART I: FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Corporate Office Properties Trust and Corporate Office Properties, L.P., along with detailed accounting notes [Corporate Office Properties Trust and Subsidiaries (COPT)](index=5&type=section&id=Corporate%20Office%20Properties%20Trust%20and%20Subsidiaries) COPT reported total revenues of **$145.8 million**, net income of **$24.1 million**, and **$4.05 billion** in total assets, with **$62.2 million** in operating cash flow for Q1 2020 COPT Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total assets** | **$4,054,457** | **$3,854,453** | | Total properties, net | $3,419,628 | $3,340,886 | | Cash and cash equivalents | $159,061 | $14,733 | | **Total liabilities** | **$2,366,359** | **$2,105,777** | | Debt, net | $2,076,839 | $1,831,139 | | **Total equity** | **$1,665,186** | **$1,719,245** | COPT Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Total revenues | $145,797 | $148,940 | | Net income | $25,550 | $22,318 | | **Net income attributable to COPT common shareholders** | **$24,054** | **$20,859** | | **Diluted EPS** | **$0.21** | **$0.19** | COPT Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,218 | $54,652 | | Net cash used in investing activities | ($114,463) | ($121,155) | | Net cash provided by financing activities | $197,002 | $66,328 | | **Net increase in cash** | **$144,757** | **($175)** | [Corporate Office Properties, L.P. and Subsidiaries (COPLP)](index=13&type=section&id=Corporate%20Office%20Properties%2C%20L.P.%20and%20Subsidiaries) COPLP's financial results largely mirror COPT's, reporting **$145.8 million** in total revenues and **$24.3 million** in net income attributable to common unitholders for Q1 2020 COPLP Consolidated Statement of Operations Highlights (in thousands, except per unit data) | Account | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Total revenues | $145,797 | $148,940 | | Net income attributable to COPLP | $24,418 | $21,281 | | **Net income attributable to COPLP common unitholders** | **$24,341** | **$21,116** | | **Diluted EPU** | **$0.21** | **$0.19** | - The financial statements of COPLP are substantially similar to COPT's, with key differences in the equity section where common units not owned by COPT are treated as partners' capital or noncontrolling interests[9](index=9&type=chunk) [Notes to Consolidated Financial Statements](index=19&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, including the adoption of new credit loss guidance, and provide breakdowns of debt structure, leasing activities, and segment performance, emphasizing the company's focus on Defense/IT Locations - The company's portfolio primarily consists of office and data center properties supporting the **United States Government (USG)** and its contractors, designated as "Defense/IT Locations"[47](index=47&type=chunk) - Adoption of new credit loss guidance (CECL) on January 1, 2020, resulted in a **$5.5 million** allowance for credit losses recognized as a cumulative-effect adjustment to equity[56](index=56&type=chunk) Debt Composition as of March 31, 2020 (in thousands) | Debt Type | Carrying Value | | :--- | :--- | | Mortgage and Other Secured Debt | $242,584 | | Revolving Credit Facility | $242,000 | | Term Loan Facility | $397,863 | | Unsecured Senior Notes | $1,193,388 | | Unsecured note payable | $1,004 | | **Total debt, net** | **$2,076,839** | Net Operating Income (NOI) from Real Estate Operations by Segment (Q1 2020, in thousands) | Segment | NOI from Real Estate Operations | | :--- | :--- | | Total Defense/IT Locations | $71,508 | | Regional Office | $7,923 | | Wholesale Data Center | $3,939 | | Other | $460 | | **Total** | **$83,830** | - The company faces potential impacts from the **COVID-19 pandemic**, including disruptions to tenant operations, leasing, capital markets access, and development projects, with the full effect remaining uncertain[154](index=154&type=chunk)[155](index=155&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 performance, highlighting **93.7%** portfolio occupancy, the impact of **COVID-19** on different segments, and analyzing changes in NOI, FFO, and cash flows, affirming adequate liquidity [Effects of COVID-19](index=43&type=section&id=Effects%20of%20COVID-19) Management assesses the **COVID-19 pandemic's** impact, noting the resilience of the **Defense/IT portfolio** (**87.7%** of revenue) due to essential tenants, while the **Regional Office portfolio** (**11.8%** of revenue) faces enhanced risk - The **Defense/IT portfolio**, comprising **87.7%** of annualized rental revenue, is considered resilient to **COVID-19** disruptions as tenants are primarily **USG** and its contractors, deemed "essential businesses"[168](index=168&type=chunk) - The **Regional Office properties** (**11.8%** of annualized rental revenue) are more subject to traditional office fundamentals and face enhanced risk from **COVID-19's** economic impact[169](index=169&type=chunk) - In response to potential financial market instability from **COVID-19**, the company borrowed under its **Revolving Credit Facility** in late March 2020 to pre-fund short-term capital needs[175](index=175&type=chunk) [Occupancy and Leasing](index=45&type=section&id=Occupancy%20and%20Leasing) As of March 31, 2020, the total portfolio occupancy was **93.7%**, with **631,000 square feet** of leasing completed during Q1 2020, including **488,000 square feet** of renewals Portfolio Occupancy Rates | Portfolio | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Portfolio** | **93.7%** | **92.9%** | | Total Defense/IT Locations | 94.2% | 93.7% | | Regional Office | 91.4% | 88.1% | - In Q1 2020, the company completed **631,000 square feet** of leasing, including **488,000 square feet** of renewals, representing an **89.0%** retention rate on expiring leases[179](index=179&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Net income for Q1 2020 increased to **$25.6 million**, driven by lower operating and interest expenses, while total **NOI** from real estate operations remained flat at **$83.8 million** Comparison of Operations (in thousands) | Account | Q1 2020 | Q1 2019 | Variance | | :--- | :--- | :--- | :--- | | Total revenues | $145,797 | $148,940 | ($3,143) | | Total operating expenses | $104,320 | $110,431 | ($6,111) | | Interest expense | ($16,840) | ($18,674) | $1,834 | | **Net income** | **$25,550** | **$22,318** | **$3,232** | - **NOI from Same Properties** increased by **$1.9 million** (**2.7%**), driven by a **0.7%** increase in average occupancy and stable rental rates[187](index=187&type=chunk) - **NOI from developed and redeveloped properties** increased by **$3.8 million**, reflecting contributions from 10 properties placed in service during 2019 and 2020[187](index=187&type=chunk)[189](index=189&type=chunk) [Funds from Operations (FFO)](index=49&type=section&id=Funds%20from%20Operations) Diluted **FFO per share**, as adjusted, was **$0.51** for Q1 2020, an increase from **$0.50** in Q1 2019, primarily adjusted for noncontrolling interests from capital events FFO Reconciliation and Per Share Data | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net income (in thousands) | $25,550 | $22,318 | | Depreciation and amortization (in thousands) | $32,596 | $34,796 | | **Basic FFO (in thousands)** | **$46,674** | **$56,359** | | **Diluted FFO, as adjusted (in thousands)** | **$57,866** | **$56,788** | | **Diluted FFO per share, as adjusted** | **$0.51** | **$0.50** | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with **$159.1 million** in cash and **$558.0 million** available under its **Revolving Credit Facility**, expecting to spend **$220 million** on development and **$70 million** on property improvements in 2020 - As of March 31, 2020, the company had **$159.1 million** in cash and **$558.0 million** available under its **Revolving Credit Facility**[214](index=214&type=chunk)[216](index=216&type=chunk) - **COPT** maintains an **at-the-market (ATM) stock offering program** with **$300 million** in remaining capacity[217](index=217&type=chunk) Contractual Obligations Summary (in thousands) | Obligation | Total | < 1 Year | 1-3 Years | 3-5 Years | > 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt (Principal & Interest) | $2,344,004 | $71,741 | $827,178 | $992,844 | $452,241 | | Development & Redevelopment | $160,155 | $141,256 | $18,899 | $0 | $0 | | Operating Leases | $106,075 | $826 | $2,300 | $2,340 | $100,609 | | **Total** | **$2,682,375** | **$248,489** | **$854,352** | **$995,184** | **$584,325** | [Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is **interest rate risk**, with **$2.09 billion** in total debt (**$1.34 billion** fixed, **$745 million** variable), managed with swaps, where a **1% LIBOR** increase would raise Q1 interest expense by **$620,000** - The company's main market risk exposure stems from changes in **interest rates**, affecting its variable rate debt and the refinancing of maturing fixed-rate debt[226](index=226&type=chunk) - A **1%** increase in the applicable **LIBOR rate** would have increased interest expense by **$620,000** in Q1 2020, based on variable-rate debt balances and interest rate swaps[229](index=229&type=chunk) Debt Maturities as of March 31, 2020 (in thousands) | Year | Fixed Rate Debt | Variable Rate Debt | | :--- | :--- | :--- | | 2020 | $2,799 | $12,336 | | 2021 | $303,875 | $80 | | 2022 | $4,033 | $456,627 | | 2023 | $416,590 | $242,540 | | 2024 | $279,443 | $540 | | Thereafter | $337,442 | $32,575 | | **Total** | **$1,344,182** | **$744,698** | [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the **CEO** and **CFO**, concluded that disclosure controls and procedures for both **COPT** and **COPLP** were effective as of March 31, 2020, with no material changes to internal controls - The **CEO** and **CFO** concluded that as of March 31, 2020, the disclosure controls and procedures for both **COPT** and **COPLP** were effective[230](index=230&type=chunk)[233](index=233&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[231](index=231&type=chunk)[234](index=234&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material litigation outside the ordinary course of business, with routine litigation expected to be covered by insurance - The company is not involved in any material litigation, and any ordinary course litigation is expected to be covered by insurance[235](index=235&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor related to the **COVID-19 pandemic** is introduced, detailing potential adverse effects on tenant operations, leasing, capital access, and development projects, with uncertain but potentially material impact - A new risk factor has been added regarding the **COVID-19 pandemic**, which could adversely affect tenant operations, leasing, access to capital, and development activities[237](index=237&type=chunk)[238](index=238&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2020, **12,009 common units** of **COPLP** were exchanged for an equal number of **COPT common shares** in an unregistered transaction exempt under Section 4(a)(2) of the Securities Act of 1933 - In Q1 2020, **12,009 COPLP common units** were exchanged for **12,009 COPT common shares** in an unregistered transaction[240](index=240&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the **Form 10-Q**, including an amended term loan agreement, a separation agreement, **CEO/CFO certifications**, and **XBRL data files** - Key exhibits filed include an **Amended and Restated Term Loan Agreement** dated March 6, 2020, and a **Separation Agreement** with the former **COO** dated March 16, 2020[242](index=242&type=chunk)

Corporate Office Properties Trust (OFC) Q1 2020 Earnings Conference Call May 1, 2020 ET Company Participants Stephanie Krewson-Kelly - President of Investor Relations Steve Budorick - President & Chief Executive Officer Anthony Mifsud - Executive Vice President & Chief Financial Officer Conference Call Participants Emmanuel Korchman - Citi Jamie Feldman - Bank of America Jason Green - Evercore Craig Mailman - KeyBanc Capital Markets Dave Rodgers - Baird Rich Anderson - SMBC Peter Abramowitz - Jefferies Dani ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | --- | |----------------------------------|-----------------------------|--------------------------------------------------------|----------------------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark one) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | --- | |----------------------------------------------------------------|---------------------------------------------------------------|-----------------------|- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | --- | |----------------------------------------------------------------|---------------------------------------------------------------|-----------------------|------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark one) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |------------------------------------------------------------------------------------------------------|------------------------------------------------------------------- ...

Ownership and Structure - As of December 31, 2018, the Company owned 98.8% of the outstanding common units of COPLP, with common units equivalent to the number of outstanding common shares of COPT[16]. - The Company intends to distribute at least 90% of its annual taxable income to maintain its REIT status[18]. Revenue and Property Portfolio - The Defense/IT Locations properties accounted for 87.9% of the annualized rental revenue, with 154 out of 163 properties in this category[24]. - The Company owned seven Regional Office properties as of December 31, 2018, representing 11.5% of the annualized rental revenue of the office and data center shell portfolio[29]. - As of December 31, 2018, Defense/IT Locations comprised 154 properties, representing 88.0% of the office and data center shell portfolio's square feet in operations[36]. Growth and Development Strategy - The Company plans to grow its operating portfolio primarily through property development opportunities aligned with its Defense/IT Locations strategy[32]. - The Company has significant land holdings to support growth and act as a barrier against competitive supply[32]. - The Company completed seven years of programmatic property sales in 2017 to improve strategic focus and enhance its balance sheet[30]. Financial Performance and Debt - The fair value of the company's debt was $1.9 billion as of December 31, 2018[257]. - Fixed-rate debt totaled $1.35 billion, with a weighted average interest rate of 4.30%[256]. - Variable-rate debt amounted to $489.4 million, with a weighted average interest rate of 3.60%[256]. - If interest rates had been 1% lower, the fair value of fixed-rate debt would have increased by approximately $56 million as of December 31, 2018[257]. - Interest expense would have increased by $1.7 million in 2018 if the applicable LIBOR rate was 1% higher[258]. Market Position and Competition - The company competes with other publicly-traded commercial office REITs for capital, which could affect its ability to raise necessary funds[41]. - The commercial real estate market is highly competitive, impacting the company's ability to lease existing vacant space[39]. - The company has a significant presence in key Defense/IT locations, including Fort Meade/BW Corridor and Northern Virginia[35]. Employee and Governance - The company had a total of 378 employees as of December 31, 2018, with no collective bargaining agreements in place[38]. - The Company has earned a "Green Star" score on the GRESB survey for four consecutive years, indicating high performance in environmental, social, and governance metrics[31]. - The Company aims to maintain an investment grade rating to facilitate access to unsecured, primarily fixed-rate debt from public markets and banks[33]. Data Center Development - From 2013 to 2018, the Company placed into service 17 data center shells totaling 2.8 million square feet, with an additional four under construction totaling 731,000 square feet as of December 31, 2018[25].