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, 2014

Schedule of fair value assets and liabilities measured on recurring basis

The tables below set forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of December 31, 2014 and 2013 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, 2014:
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	5,756	$	—	$	—	$	5,756
Other	126		—		—		126
Interest rate derivatives (2)	—		274		—		274
Warrants to purchase common stock in KEYW (2)	—		164		—		164
Total Assets	$	5,882	$	438	$	—	$	6,320
Liabilities:
Deferred compensation plan liability (3)	$	—	$	5,882	$	—	$	5,882
Interest rate derivatives	—		1,855		—		1,855
Total Liabilities	$	—	$	7,737	$	—	$	7,737
Redeemable noncontrolling interest	$	—	$	—	$	18,417	$	18,417

December 31, 2013:
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	7,090	$	—	$	—	$	7,090
Common stocks	176		—		—		176
Other	201		—		—		201
Common stock (1)	298		—		—		298
Interest rate derivatives (2)	—		6,594				6,594
Warrants to purchase common stock in KEYW (2)	—		301		—		301
Total Assets	$	7,765	$	6,895	$	—	$	14,660
Liabilities:
Deferred compensation plan liability (3)	$	—	$	7,467	$	—	$	7,467
Interest rate derivatives	—		3,309		—		3,309
Total Liabilities	$	—	$	10,776	$	—	$	10,776
Redeemable noncontrolling interest	$	—	$	—	$	17,758	$	17,758

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

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

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

The tables below set forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of December 31, 2014 and 2013 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, 2014:
Assets:
Interest rate derivatives (1)	$	—	$	274	$	—	$	274
Warrants to purchase common stock in KEYW (1)	—		164		—		164
Total Assets	$	—	$	438	$	—	$	438
Liabilities:
Interest rate derivatives	$	—	$	1,855	$	—	$	1,855
Redeemable noncontrolling interest	$	—	$	—	$	18,417	$	18,417

December 31, 2013:
Assets:
Common stock (2)	$	298	$	—	$	—	$	298
Interest rate derivatives (1)	—		6,594		—		6,594
Warrants to purchase common stock in KEYW (1)	—		301		—		301
Total Assets	$	298	$	6,895	$	—	$	7,193
Liabilities:
Interest rate derivatives	$	—	$	3,309	$	—	$	3,309
Redeemable noncontrolling interest	$	—	$	—	$	17,758	$	17,758

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

(2) Included in the line entitled “restricted cash and marketable securities” on COPLP’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 the fair values of the properties (dollars in thousands):

Fair Value of Properties Held as of December 31, 2013

Quoted Prices in

Significant

Impairment

Active Markets for

Significant Other

Unobservable

Losses

Identical Assets

Observable Inputs

Inputs

Recognized in

Description

(Level 1)

(Level 2)

(Level 3)

Total

2013 (1)

Assets (2):

Properties, net

—

4,459

31,068

(1) Represents aggregate impairment losses on non recurring fair value measurements resulting in such losses, excluding exit costs incurred of $979,000.

(2) Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications.

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, 2013 (dollars in thousands):



Valuation Technique	Fair Value on Measurement Date		Unobservable Input	Range (Weighted Average)
Discounted cash flow	$	4,459	Discount rate	10.0% (1)
			Terminal capitalization rate	9.5% (1)
			Market rent growth rate	3.0% (1)
			Expense growth rate	3.0% (1)

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