COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of fair value assets and liabilities measured on recurring basis

The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):



Description	Quoted Prices in Active Markets for Identical Assets(Level 1)		Significant Other Observable Inputs(Level 2)		Significant Unobservable Inputs(Level 3)		Total
Liabilities:
Interest rate derivatives	$	—	$	20,245	$	—	$	20,245

The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2016 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):



Description	Quoted Prices in Active Markets for Identical Assets(Level 1)		Significant Other Observable Inputs(Level 2)		Significant Unobservable Inputs(Level 3)		Total
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	4,954	$	—	$	—	$	4,954
Other	92		—		—		92
Total assets	$	5,046	$	—	$	—	$	5,046
Liabilities:
Deferred compensation plan liability (2)	$	—	$	5,046	$	—	$	5,046
Interest rate derivatives	—		20,245		—		20,245
Total liabilities	$	—	$	25,291	$	—	$	25,291

(1) Included in the line entitled “restricted cash and marketable securities” on COPT’s consolidated balance sheet.

(2) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet.

Schedule of fair value hierarchy of impaired properties and other assets associated with such properties

The table below sets forth the fair value hierarchy of the valuation technique we used to determine nonrecurring fair value measurements of these assets as of June 30, 2016 (dollars in thousands):



	Fair Values as of June 30, 2016
	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Operating properties, net (1)	$	—	$	—	$	13,700	$	13,700
Projects in development or held for future development (2)	—		—		9,117		9,117
Assets held for sale, net (3)	—		—		55,322		55,322


(1)	Valuations were determined using a discounted cash flow model. Refer to table below for quantitative information about significant unobservable inputs used in the model.

(2) Valuation was determined using the comparable sales approach.

(3) Represents fair value less estimated costs to sell using contract prices or bids that were deemed indicative of fair value.

Schedule of quantitative information about significant unobservable inputs used for Level 3 fair value measurements

The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above for operating properties as of June 30, 2016:



Unobservable Input		Range (Weighted Average)
Discount rate		11.0% to 12.0% (11.6%)
Capitalization rate		9.0% to 10.0% (9.5%)