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

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of fair value assets and liabilities measured on recurring basis

The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2015 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
Assets:
Warrants to purchase common stock (1)	$	—	$	42	$	—	$	42
Liabilities:
Interest rate derivatives	$	—	$	5,844	$	—	$	5,844
Redeemable noncontrolling interest	$	—	$	—	$	19,608	$	19,608

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

The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2015 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
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	5,395	$	—	$	—	$	5,395
Other	104		—		—		104
Warrants to purchase common stock (2)	—		42		—		42
Total assets	$	5,499	$	42	$	—	$	5,541
Liabilities:
Deferred compensation plan liability (3)	$	—	$	5,499	$	—	$	5,499
Interest rate derivatives	—		5,844		—		5,844
Total liabilities	$	—	$	11,343	$	—	$	11,343
Redeemable noncontrolling interest	$	—	$	—	$	19,608	$	19,608

(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.

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 these properties (dollars in thousands):

Fair Values of Properties Held as of September 30, 2015

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

(Level 1)

(Level 2)

(Level 3)

Total

Assets:

Assets held for sale, net (1)

—

7,225

(1) Represents estimated fair values less costs to sell.

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 September 30, 2015 (dollars in thousands):



Valuation Technique	Fair Values on Measurement Date		Unobservable Input	Range (Weighted Average) (1)
Discounted cash flow	$	7,225	Discount rate	8.25%
			Terminal capitalization rate	7.75%
			Market rent growth rate	2.0%
			Expense growth rate	2.0%

(1) Only one value applied for these unobservable inputs.