COPT(US:CDP)2025-10-30 20:23Financial Performance - For the three months ended September 30, 2025, net income was $43.744 million, an increase of 17.0% compared to $37.397 million for the same period in 2024 [14]. - The company's same property net operating income (NOI) for the three months ended September 30, 2025, was $107.870 million, up from $104.044 million in the same period last year, reflecting a 3.4% increase [14]. - Adjusted EBITDA for the three months ended September 30, 2025, was $103.771 million, compared to $99.236 million for the same period in 2024, representing a 4.6% increase [14]. - The diluted funds from operations (FFO) per share for the three months ended September 30, 2025, was $0.69, consistent with the previous quarter and up from $0.65 in the same period last year [14]. - Total revenues for Q3 2025 were $188.8 million, a slight decrease from $189.9 million in Q2 2025 and $189.2 million in Q3 2024 [24]. - Net income for Q3 2025 was $43.7 million, an increase from $40.2 million in Q2 2025 and $37.4 million in Q3 2024, representing a year-over-year growth of 16.3% [24]. - The company reported a diluted EPS of $0.37 for Q3 2025, up from $0.34 in Q2 2025 and $0.31 in Q1 2025, with a total of $1.01 for the nine months ended September 30, 2025, compared to $0.92 for the same period last year [30]. Portfolio and Occupancy - As of September 30, 2025, COPT Defense Properties' Defense/IT Portfolio consists of 198 properties, encompassing 22.6 million square feet, and is 97.0% leased [7]. - The total portfolio occupancy rate was 93.9% as of September 30, 2025, slightly down from 94.0% in June 2025 and up from 93.1% in September 2024 [18]. - The consolidated portfolio occupancy rate was 92.6% in Q3 2025, compared to 92.8% in Q2 2025 and 91.6% in Q3 2024 [18]. - The Defense/IT portfolio occupancy rate was 95.4% as of September 30, 2025, slightly down from 96.1% in the previous quarter [51]. - The total number of properties in the Defense/IT Portfolio increased to 198, with 168 consolidated properties and 24 unconsolidated JV properties [51]. - Total leased square feet for Defense/IT portfolio reached 792, with an expiring square feet of 968, indicating a retention rate of 81.8% [68]. Assets and Liabilities - The total assets of COPT Defense Properties as of September 30, 2025, were $4.351 billion, an increase from $4.234 billion a year earlier [16]. - The company's total equity as of September 30, 2025, was $1.555 billion, compared to $1.532 billion as of September 30, 2024 [16]. - Total liabilities stood at $2.77 billion as of September 30, 2025, compared to $2.72 billion in June 2025 and $2.68 billion in September 2024 [21]. - The debt to assets ratio as of September 30, 2025, was 56.2%, slightly improved from 56.5% a year earlier [16]. - Total consolidated debt as of September 30, 2025, is $2,462,641, with an effective rate of 3.26% [100]. Revenue and Leasing Activity - Lease revenue increased to $178.3 million in Q3 2025, compared to $175.6 million in Q2 2025 and $170.5 million in Q3 2024, reflecting a year-over-year growth of 4.9% [24]. - Total Defense/IT Portfolio revenues reached $161.57 million for the three months ended September 30, 2025, compared to $158.71 million in the previous quarter, reflecting a growth of 1.1% [43]. - The annualized rental revenue for the total Defense/IT Portfolio was $633.87 million, with a total NOI of $102.86 million for the three months ended September 30, 2025 [51]. - Total leasing activity for Q3 2025 was 971,000 square feet, with year-to-date leasing at 2.3 million square feet [191]. - The company reported a total of $26,982,000 in replacement capital expenditures for Q3 2025, compared to $23,919,000 in Q2 2025 and $21,464,000 in Q1 2025 [32]. Dividends and Shareholder Returns - COPT Defense Properties declared a dividend of $0.305 per common share for the third quarter of 2025, unchanged from the previous quarter [14]. - Total dividends and distributions for Q3 2025 were $35.20 million, up from $33.91 million in Q2 2025, indicating a growth of 3.81% [128]. - The company increased the midpoint of 2025 FFO per share guidance by $0.03 to $2.70, implying a 5.1% growth for the year [181]. Development and Future Outlook - The company has 812,000 square feet under development in the Defense/IT portfolio, with an anticipated total cost of $311,481,000 [86]. - The company has 1,001 acres of land owned/controlled for future development, estimated to yield 10,745,000 developable square feet [91]. - Management anticipates compound annual FFO per share growth of over 4% from 2023 to 2026 [183].