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

Leases (Tables)

6 Months Ended

Jun. 30, 2020

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



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Lease revenue	2020		2019		2020		2019
Fixed	$	103,993	$	104,193	$	208,102	$	208,837
Variable	28,154		27,222		55,057		53,481
	$	132,147	$	131,415	$	263,159	$	262,318

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

(1) As of June 30, 2020, represents the six months ending December 31, 2020

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



Leases	Balance Sheet Location	June 30, 2020		December 31, 2019
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	31,009	$	27,864
Finance leases - Property	Property - finance right-of-use assets	40,441		40,458
Total right-of-use assets		$	71,450	$	68,322

Property lease liabilities consisted of the following (in thousands):



Leases	Balance Sheet Location	June 30, 2020		December 31, 2019
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	20,796	$	17,317
Finance leases - Property	Other liabilities	688		702
Total lease liabilities		$	21,484	$	18,019

The table below sets forth the weighted average terms and discount rates of our property leases as of June 30, 2020:



Weighted average remaining lease term
Operating leases	65 years
Finance leases	< 1 year
Weighted average discount rate
Operating leases	7.22	%
Finance leases	3.62	%

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



	Statement of Operations Location	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Lease cost	Statement of Operations Location	2020		2019		2020		2019
Operating lease cost
Property leases	Property operating expenses	$	445	$	413	$	876	$	826
Finance lease cost
Amortization of property right-of-use assets	Property operating expenses	9		12		18		12
		$	454	$	425	$	894	$	838

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



	For the Six Months Ended June 30,
Supplemental cash flow information	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	541	$	550
Financing cash flows for financing leases	$	14	$	4

Payments on property leases were due as follows (in thousands):



	As of June 30, 2020								As of December 31, 2019
Year Ending December 31,	Operating leases			Finance leases		Total			Operating leases			Finance leases		Total
2020 (1)	$	636		$	660	$	1,296		$	1,092		$	674	$	1,766
2021	1,328			14		1,342			1,138			14		1,152
2022	1,352			14		1,366			1,162			14		1,176
2023	1,358			—		1,358			1,167			—		1,167
2024	1,363			—		1,363			1,173			—		1,173
Thereafter	113,780			—		113,780			100,609			—		100,609
Total lease payments	119,817			688		120,505			106,341			702		107,043
Less: Amount representing interest	(99,021		)	—		(99,021		)	(89,024		)	—		(89,024		)
Lease liability	$	20,796		$	688	$	21,484		$	17,317		$	702	$	18,019

(1) As of June 30, 2020, represents the six months ending December 31, 2020.

Payments on property leases were due as follows (in thousands):



	As of June 30, 2020								As of December 31, 2019
Year Ending December 31,	Operating leases			Finance leases		Total			Operating leases			Finance leases		Total
2020 (1)	$	636		$	660	$	1,296		$	1,092		$	674	$	1,766
2021	1,328			14		1,342			1,138			14		1,152
2022	1,352			14		1,366			1,162			14		1,176
2023	1,358			—		1,358			1,167			—		1,167
2024	1,363			—		1,363			1,173			—		1,173
Thereafter	113,780			—		113,780			100,609			—		100,609
Total lease payments	119,817			688		120,505			106,341			702		107,043
Less: Amount representing interest	(99,021		)	—		(99,021		)	(89,024		)	—		(89,024		)
Lease liability	$	20,796		$	688	$	21,484		$	17,317		$	702	$	18,019

(1) As of June 30, 2020, represents the six months ending December 31, 2020.