COPT Defense Properties Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of fair value assets and liabilities measured on recurring basis

The tables below set forth financial assets and liabilities of COPT and subsidiaries that are accounted for at fair value on a recurring basis as of December 31, 2018 and 2017 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
December 31, 2018:
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	3,819	$	—	$	—	$	3,819
Other	49		—		—		49
Interest rate derivatives	—		5,617		—		5,617
Total assets	$	3,868	$	5,617	$	—	$	9,485
Liabilities:
Deferred compensation plan liability (2)	$	—	$	3,868	$	—	$	3,868
Interest rate derivatives (2)	—		5,459		—		5,459
Total liabilities	$	—	$	9,327	$	—	$	9,327

December 31, 2017:
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	4,547	$	—	$	—	$	4,547
Other	69		—		—		69
Interest rate derivatives	—		3,073		—		3,073
Total assets	$	4,616	$	3,073	$	—	$	7,689
Liabilities:
Deferred compensation plan liability (2)	$	—	$	4,616	$	—	$	4,616

(1) Included in the line entitled “prepaid expenses and other assets, net” on COPT’s consolidated balance sheet.

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

COPLP and Subsidiaries

The tables below set forth financial assets and liabilities of COPLP and subsidiaries that are accounted for at fair value on a recurring basis as of December 31, 2018 and 2017 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
December 31, 2018:
Assets:
Interest rate derivatives	$	—	$	5,617	$	—	$	5,617
Liabilities:
Interest rate derivatives (1)	$	—	$	5,459	$	—	$	5,459

December 31, 2017:
Assets:
Interest rate derivatives	$	—	$	3,073	$	—	$	3,073

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 properties as of December 31, 2017 (in thousands):



	Fair Values as of December 31, 2017
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Operating properties, net	$	—	$	—	$	3,850	$	3,850
Projects in development or held for future development	$	—	$	—	$	1,755	$	1,755

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 as of December 31, 2017 (dollars in thousands):



Valuation Technique	Fair Values on Measurement Date		Unobservable Input	Range (Weighted Average)
Discounted cash flow	$	3,850	Discount rate	14% - 16% (14%)
			Terminal capitalization rate	12% (1)
Comparable sales analysis	$	1,755	Comparable sales prices	N/A

(1) Only one fair value applied for this unobservable input.