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

Leases (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2019		For the Six Months Ended June 30, 2019
Fixed contractual payments	$	104,768	$	210,103
Variable lease payments	26,647		52,215
	$	131,415	$	262,318

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

(1) As of June 30, 2019, represents the six months ending December 31, 2019

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



Leases	Balance Sheet Location	June 30, 2019
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	27,434
Finance leases
Property	Property - finance right-of-use assets	40,476
Vehicles and office equipment	Prepaid expenses and other assets, net	1,272
Total finance lease right-of-use assets		41,748

Total right-of-use assets		$	69,182

Lease liabilities consisted of the following (in thousands):



Leases	Balance Sheet Location	June 30, 2019
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	16,640
Finance leases	Other liabilities	1,228

Total lease liabilities		$	17,868

The table below sets forth the weighted average terms and discount rates of our leases as of June 30, 2019:



Weighted average remaining lease term
Operating leases	69 years
Finance leases	2 years
Weighted average discount rate
Operating leases	7.35	%
Finance leases	3.12	%

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



Lease cost	Statement of Operations Location	For the Three Months Ended June 30, 2019		For the Six Months Ended June 30, 2019
Operating lease cost
Property leases	Property operating expenses	$	413	$	826
Vehicles and office equipment	General, administrative and leasing expenses	18		35
Finance lease cost
Amortization of vehicles and office equipment right-of-use assets	General, administrative and leasing expenses	116		229
Amortization of property right-of-use assets	Property operating expenses	12		12
Interest on lease liabilities	Interest expense	3		7
		$	562	$	1,109

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



Supplemental cash flow information	For the Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	550
Operating cash flows for financing leases	$	7
Financing cash flows for financing leases	$	110

Payments on leases as of June 30, 2019 were due as follows (in thousands):



Year Ending December 31,	Operating leases			Finance leases			Total
2019 (1)	$	554		$	118		$	672
2020	1,126			862			1,988
2021	1,111			202			1,313
2022	1,129			64			1,193
2023	1,134			—			1,134
Thereafter	99,187			—			99,187
Total lease payments	104,241			1,246			105,487
Less: Amount representing interest	(87,601		)	(18		)	(87,619		)
Lease liability	$	16,640		$	1,228		$	17,868

(1) Represents the six 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