[PART I: FINANCIAL INFORMATION](index=3&type=section&id=PART%20I:%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's analysis of financial condition [Item 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) Presents COPT's unaudited consolidated financial statements for Q3 2021, covering Balance Sheets, Operations, and Cash Flows [Note 1: Organization](index=11&type=section&id=1.%20Organization) COPT is a REIT specializing in office and data center properties, primarily serving U.S. Government and defense contractors - The company's core business is owning and operating office and data center properties, with a strategic focus on locations supporting the U.S. Government and its contractors, particularly in defense and IT[20](index=20&type=chunk) Portfolio Summary as of September 30, 2021 | Asset Type | Quantity/Size | | :--- | :--- | | Operating Properties | 186 properties (21.7M sq ft) | | - Office Properties | 160 properties (16.9M sq ft) | | - Data Center Shells | 26 properties (4.7M sq ft) | | Wholesale Data Center | 19.25 megawatts capacity | | Properties Under Development | 13 properties (1.8M sq ft estimated) | | Land for Future Development | ~720 acres (~8.9M sq ft potential) | [Note 4: Properties, Net](index=14&type=section&id=4.%20Properties,%20Net) Details the company's real estate assets, including new developments and a significant data center shell sale - On June 2, 2021, the company sold a 90% interest in two data center shell properties in Northern Virginia for **$106.9 million**, recognizing a gain of **$40.2 million**[35](index=35&type=chunk) - In the first nine months of 2021, the company placed six newly-developed properties, totaling **709,000 square feet**, into service[36](index=36&type=chunk) [Note 9: Debt, Net](index=22&type=section&id=9.%20Debt,%20Net) Discusses the company's debt structure, including an increase in net debt and significant refinancing activities - Issued **$600.0 million** of 2.75% Senior Notes due 2031 and **$400.0 million** of 2.00% Senior Notes due 2029[62](index=62&type=chunk)[63](index=63&type=chunk) - Purchased and redeemed all outstanding 3.60% Senior Notes and 5.25% Senior Notes, resulting in a loss on early extinguishment of debt of **$58.4 million** in the first nine months of 2021[65](index=65&type=chunk) Debt Composition (in thousands) | Debt Type | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Mortgage and Other Secured Debt | $171,008 | $255,110 | | Revolving Credit Facility | $10,000 | $143,000 | | Term Loan Facility | $299,274 | $398,447 | | Unsecured Senior Notes | $1,678,659 | $1,289,461 | | **Total debt, net** | **$2,159,732** | **$2,086,918** | [Note 14: Information by Business Segment](index=26&type=section&id=14.%20Information%20by%20Business%20Segment) Outlines the company's operational segments, with Defense/IT Locations as the primary NOI contributor NOI from Real Estate Operations by Segment (Q3 2021 vs Q3 2020, in thousands) | Segment | Q3 2021 NOI | Q3 2020 NOI | | :--- | :--- | :--- | | Defense/IT Locations | $78,529 | $74,629 | | Regional Office | $8,415 | $7,131 | | Wholesale Data Center | $3,292 | $2,426 | | Other | $224 | $457 | | **Total** | **$90,460** | **$84,643** | - The Defense/IT Locations segment is the primary driver of the company's performance, accounting for approximately **87%** of the total NOI from real estate operations in Q3 2021[84](index=84&type=chunk) [Note 18: Commitments and Contingencies](index=34&type=section&id=18.%20Commitments%20and%20Contingencies) Addresses legal actions, potential tax claims, and the company's resilience to COVID-19 impacts - Management believes the company is less susceptible to the impacts of the COVID-19 pandemic due to its portfolio's significant concentration in Defense/IT Locations[120](index=120&type=chunk) - A potential loss of up to **$3.4 million** is considered reasonably possible for certain municipal tax claims, which could be material to results of operations but not to financial position or liquidity[117](index=117&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$4,151,138** | **$4,077,023** | | Total properties, net | $3,607,122 | $3,562,549 | | Cash and cash equivalents | $14,570 | $18,369 | | **Total Liabilities** | **$2,454,353** | **$2,357,881** | | Debt, net | $2,159,732 | $2,086,918 | | **Total Equity** | **$1,670,779** | **$1,693,712** | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$174,636** | **$154,766** | **$500,769** | **$445,337** | | Lease revenue | $145,749 | $133,875 | $434,031 | $397,034 | | **Net Income (Loss)** | **$28,794** | **($31,342)** | **$66,613** | **$19,329** | | Net income (loss) attributable to COPT common shareholders | $27,101 | ($31,845) | $62,833 | $15,706 | | **Diluted EPS** | **$0.24** | **($0.29)** | **$0.56** | **$0.14** | Consolidated Statements of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $199,903 | $159,041 | | Net cash used in investing activities | ($111,992) | ($396,209) | | Net cash (used in) provided by financing activities | ($91,799) | $233,713 | | **Net decrease in cash and cash equivalents** | **($3,888)** | **($3,455)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, operational achievements, COVID-19 impact, and liquidity for the first nine months of 2021 [Overview and COVID-19 Impact](index=36&type=section&id=Overview%20and%20COVID-19%20Impact) Highlights key operational achievements and the company's resilience to the COVID-19 pandemic due to its Defense/IT focus - Key activities in the first nine months of 2021 included placing **709,000 sq. ft.** of newly-developed properties into service and achieving a **94.6%** leased rate for the office and data center shell portfolio[124](index=124&type=chunk) - The company executed a major debt refinancing, issuing **$600 million** of 2.75% Notes and **$400 million** of 2.00% Notes to redeem higher-cost debt, resulting in a **$58.4 million** loss on early extinguishment[124](index=124&type=chunk) - Management believes the company has been less susceptible to the impact of the COVID-19 pandemic due to its portfolio's concentration in Defense/IT Locations, with no significant effect on results of operations[130](index=130&type=chunk) [Occupancy and Leasing](index=38&type=section&id=Occupancy%20and%20Leasing) Details portfolio occupancy rates and leasing activity, including renewals and development space leasing Portfolio Occupancy Rates | Portfolio | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total** | **93.3%** | **94.1%** | | Defense/IT Locations | 94.1% | 94.5% | | Regional Office | 87.8% | 92.5% | - Completed **2.7 million square feet** of leasing in the first nine months of 2021, including **1.4 million sq. ft.** of renewals (capturing **74.6%** of expirations) and **915,000 sq. ft.** in development projects[137](index=137&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Analyzes net income performance, highlighting the impact of derivative losses and real estate sales Net Income (Loss) Comparison (in thousands) | Period | 2021 | 2020 | Variance | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | **$28,794** | **($31,342)** | **$60,136** | | **Nine Months Ended Sep 30** | **$66,613** | **$19,329** | **$47,284** | - The Q3 2021 net income improvement was largely due to the absence of a **$53.2 million** loss on interest rate derivatives that was recognized in Q3 2020[142](index=142&type=chunk)[149](index=149&type=chunk) - The nine-month 2021 net income was driven by a **$39.7 million** gain on the sale of real estate, partially offset by a **$59.6 million** loss on early extinguishment of debt from refinancing activities[152](index=152&type=chunk)[158](index=158&type=chunk) [Funds from Operations (FFO)](index=44&type=section&id=Funds%20from%20Operations) Presents FFO as a key performance metric, showing growth driven by operating performance and development projects Diluted FFO Per Share, As Adjusted for Comparability | Period | 2021 | 2020 | | :--- | :--- | :--- | | **Three Months Ended Sep 30** | **$0.57** | **$0.54** | | **Nine Months Ended Sep 30** | **$1.71** | **$1.56** | - The increase in FFO per share reflects underlying growth in the property portfolio's operating performance, partially offset by comparability adjustments such as the loss on early extinguishment of debt[170](index=170&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity sources, credit rating objectives, and expected capital spending for the remainder of 2021 - As of September 30, 2021, the company had **$14.6 million** in cash and **$790 million** of availability under its **$800 million** Revolving Credit Facility[179](index=179&type=chunk)[181](index=181&type=chunk) - The company aims to maintain its investment grade credit rating to ensure access to unsecured debt from public markets and banks[180](index=180&type=chunk) - Expected capital spending for the remainder of 2021 includes approximately **$85 million** for development and **$40 million** for improvements and leasing costs on operating properties[186](index=186&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Identifies interest rate changes as the primary market risk, detailing its potential impact on interest expense - The company's main market risk is interest rate changes. A **1%** increase in LIBOR would have increased interest expense by **$2.5 million** in the first nine months of 2021, based on variable-rate debt balances and interest rate swaps[192](index=192&type=chunk) - The total fair value of the company's debt was estimated at **$2.2 billion** as of September 30, 2021, compared to a carrying value of **$2.16 billion**[192](index=192&type=chunk)[67](index=67&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[193](index=193&type=chunk) - No material changes to internal control over financial reporting occurred during the third quarter of 2021[194](index=194&type=chunk) [PART II: OTHER INFORMATION](index=52&type=section&id=PART%20II:%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other significant corporate information [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) States that the company is not involved in any material litigation or threatened legal actions - There is no material litigation currently pending or threatened against the company[195](index=195&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to the risk factors previously disclosed in the company's 2020 Annual Report - No material changes to risk factors from the 2020 Annual Report on Form 10-K were reported[196](index=196&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) Details new Letter Agreements with the COO and CFO regarding their participation in the Executive Change in Control and Severance Plan - New 5-year Letter Agreements were established with the COO and CFO regarding their participation in the Executive Change in Control and Severance Plan[197](index=197&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including executive agreements and financial data files - Exhibits filed include executive letter agreements, CEO/CFO certifications, and financial data files in XBRL format[201](index=201&type=chunk)

Call Start: 12:00 January 1, 0000 12:50 PM ET Corporate Office Properties Trust (OFC) Q3 2021 Earnings Conference Call October 29, 2021, 12:00 pm ET Company Participants Stephanie Krewson-Kelly - VP, IR Steve Budorick - President & CEO Todd Hartman - EVP & COO Anthony Mifsud - EVP & CFO Conference Call Participants Manny Korchman - Citi Jamie Feldman - Bank of America Steve Sakwa - Evercore ISI Blaine Heck - Wells Fargo Tom Catherwood - BTIG Dave Rodgers - Baird Rich Anderson - SMBC Rob Simone - Hedgeye Ris ...

Corporate Office Properties Trust (OFC) Q2 2021 Earnings Conference Call July 30, 2021 12:00 PM ET Company Participants Stephanie Krewson-Kelly - Vice President, Investor Relations Steve Budorick - President and Chief Executive Officer Todd Hartman - Executive Vice President and Chief Operating Officer Anthony Mifsud - Executive Vice President and Chief Financial Officer Conference Call Participants Manny Korchman - Citi Craig Mailman - Keybanc Steve Sakwa - Evercore ISI Jamie Feldman - Bank of America Anth ...

Corporate Office Properties Trust (OFC) Q1 2021 Results Conference Call April 30, 2021 12:00 PM ET Company Participants Stephanie Krewson-Kelly - IR Steve Budorick - President & CEO Todd Hartman - EVP & COO Anthony Mifsud - EVP & CFO Conference Call Participants Manny Korchman - Citi Craig Mailman - KeyBanc Capital Markets Jamie Feldman - Bank of America Steve Sakwa - Evercore ISI Tom Catherwood - BTIG Rich Anderson - SMBC Dave Rodgers - Baird Daniel Ismail - Green Street Omotayo Okusanya - Mizuho Bill Crow ...