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

Leases (Tables)

3 Months Ended

Mar. 31, 2019

The table below sets forth our allocation of lease revenue recognized between fixed contractual payments and variable lease payments (in thousands):



Lease revenue	For the Three Months Ended March 31, 2019
Fixed contractual payments	$	105,335
Variable lease payments	25,568
	$	130,903

Fixed contractual payments due under our property leases were as follows (in thousands):

(1) As of March 31, 2019, represents the nine months ending December 31, 2019

Our right-of-use assets consisted of the following (in thousands):



Leases	Balance Sheet Location	March 31, 2019
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	27,569
Finance leases
Property	Property - finance right-of-use assets	40,488
Vehicles and office equipment	Prepaid expenses and other assets, net	1,197
Total finance lease right-of-use assets		41,685

Total right-of-use assets		$	69,254

Lease liabilities consisted of the following (in thousands):



Leases	Balance Sheet Location	March 31, 2019
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	16,619
Finance leases	Other liabilities	1,275

Total lease liabilities		$	17,894

The table below sets forth the weighted average lease terms and discount rates of our leases as of March 31, 2019:



Weighted average remaining lease term
Operating leases	70 years
Finance leases	2 years
Weighted average discount rate
Operating leases	7.35	%
Finance leases	3.10	%

The table below presents our total lease cost (in thousands):



Lease cost	Statement of Operations Location	For the Three Months Ended March 31, 2019
Operating lease cost
Property leases	Property operating expense	$	413
Vehicles and office equipment	General, administrative and leasing expense	17
Finance lease cost
Amortization of vehicles and office equipment right-of-use assets	General, administrative and leasing expense	113
Interest on lease liabilities	Interest expense	4
		$	547

The table below presents the effect of lease payments on our consolidated statement of cash flows (in thousands):



Supplemental cash flow information	For the Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	228
Operating cash flows for financing leases	$	4
Financing cash flows for financing leases	$	52

Payments on leases as of March 31, 2019 were due as follows (in thousands):



Year Ending December 31,	Operating leases			Finance leases			Total
2019 (1)	$	830		$	179		$	1,009
2020	1,128			862			1,990
2021	1,111			202			1,313
2022	1,129			64			1,193
2023	1,135			—			1,135
Thereafter	99,185			—			99,185
Total lease payments	104,518			1,307			105,825
Less: Amount representing interest	(87,899		)	(32		)	(87,931		)
Lease liability	$	16,619		$	1,275		$	17,894

(1) Represents the nine months ending December 31, 2019.

Future minimum rental payments on leases as of December 31, 2018 were due as follows (in thousands):



Year Ending December 31,	Operating leases		Finance leases			Total
2019	$	1,101	$	219		$	1,320
2020	1,110		844			1,954
2021	1,094		184			1,278
2022	1,115		49			1,164
2023	1,119		—			1,119
Thereafter	83,373		—			83,373
Total lease payments	$	88,912	1,296			90,208
Less: Amount representing interest	N/A		(24		)	(24		)
Total	N/A		$	1,272		$	90,184