Corporate Office Properties Trust Reports Strong Second Quarter 2007 Results

COLUMBIA, Md.--(BUSINESS WIRE)--

Corporate Office Properties Trust (COPT) (NYSE:OFC) announced today financial and operating results for the quarter ended June 30, 2007.

    Highlights

    --  Earnings per diluted share ("EPS") of $.08 for the second
        quarter 2007 compared to $.13 per diluted share for the second
        quarter 2006, representing a 38.5% decrease per share.
        Included in second quarter 2007 is a $9.3 million increase in
        depreciation and amortization associated with real estate
        operations, as compared to the second quarter 2006,
        contributing to the significant decline in EPS. The
        acquisition of the Nottingham portfolio generated depreciation
        and amortization of $6.2 million, representing the majority of
        the $9.3 million increase in depreciation and amortization.
        During the second quarter 2007, a $1.0 million gain from the
        sale of a non-real estate investment, TractManager, Inc., was
        recognized.

    --  16.3% increase in Funds from Operations ("FFO") per diluted
        share to $.57 or $31.8 million for second quarter 2007
        compared to $.49 or $25.2 million for second quarter 2006.

    --  14.1% increase in Adjusted Funds from Operations ("AFFO")
        diluted to $21.6 million for second quarter 2007 as compared
        to $18.9 million for second quarter 2006.

    --  54.0% Diluted FFO payout ratio, 79.5% Diluted AFFO payout
        ratio for the quarter.

    --  $14.0 million acquisition of the remaining 50.0% undivided
        interest in a 132 acre land parcel that can support 1.75
        million square feet of office development in Colorado Springs,
        Colorado.

    --  92.7% occupied and 93.3% leased for our wholly owned portfolio
        as of June 30, 2007.

    --  3.1 million square feet under construction, development and
        redevelopment for a total projected cost of $569.7 million.

    --  69.3% of leases expiring during the quarter were renewed, with
        a 5.7% increase in total straight line rent for renewed space.

"We are pleased with our strong FFO growth for the quarter," stated Randall M. Griffin, President and Chief Executive Officer. "We placed 247,000 square feet of 100% leased development into service this quarter, almost half of the anticipated square feet to be placed into service by year end. We continue to see positive leasing activity and we are adding projects to our construction and development pipelines," he added.

Financial Results

EPS for the quarter ended June 30, 2007 totaled $.08 per diluted share, or $3.9 million of net income available to common shareholders, as compared to $.13 per diluted share, or $5.5 million for the quarter ended June 30, 2006. Included in the second quarter 2007 is a $9.3 million increase in depreciation and amortization associated with real estate operations, as compared to the second quarter 2006, contributing to the significant decline in EPS. The acquisition of the Nottingham portfolio generated depreciation and amortization of $6.2 million, the primary driver of the $9.3 million increase. During the second quarter 2007, the Company recognized a $1.0 million gain from the sale of a non-real estate investment, TractManager, Inc., as described below.

Diluted FFO per share for the quarter ended June 30, 2007 increased 16.3% to $31.8 million, or $.57 per diluted share, as compared to $25.2 million, or $.49 per diluted share, for the quarter ended June 30, 2006. Included in FFO is a $1.0 million gain from the sale of TractManager, Inc. The Company's Diluted FFO payout ratio was 54.0% for second quarter 2007 compared to 56.4% for the comparable 2006 period.

Diluted AFFO for the quarter ended June 30, 2007 increased 14.1% to $21.6 million, as compared to $18.9 million for the quarter ended June 30, 2006. The Company's AFFO Payout ratio was 79.5% for second quarter 2007 compared to 75.0% for the comparable 2006 period.

As of June 30, 2007, the Company had a total market capitalization of $4.3 billion, with $1.8 billion in debt outstanding, equating to a 41.2% debt-to-total market capitalization ratio. The Company's total quarterly weighted average interest rate was 5.9% and 83.4% of total debt is subject to fixed interest rates. For the second quarter 2007, EBITDA Interest coverage ratio was 2.77x and EBITDA Fixed Charge coverage was 2.31x.

Operating Results

At June 30, 2007, the Company's wholly owned portfolio of 229 office properties totaling 17.7 million square feet was 92.7% occupied and 93.3% leased. The weighted average remaining lease term for the portfolio was 4.9 years and the average rental rate (including tenant reimbursements of operating costs) was $21.09 per square foot.

During the quarter, 476,000 square feet was renewed, equating to a 69.3% renewal rate, at an average committed capital cost of $4.91 per square foot. Total rent on renewed space increased 5.7% on a straight line basis and decreased 1.1% on a cash basis. For renewed and retenanted space of 612,000 square feet, total straight-line rent increased 6.1%, and total cash rent increased 0.5%. The average capital cost for renewed and retenanted space was $7.55 per square foot.

Same property cash NOI increased by 2.9%, or $1.3 million for the quarter compared to the quarter ended June 30, 2006. Same office property cash NOI was positively impacted by an increase in occupancy, primarily in our Northern Virginia region. The Company's same office portfolio consists of 157 properties and represents 74.4% of our wholly owned portfolio as of June 30, 2007.

The Company recognized lease termination fees of $708,000 for the quarter, net of write-offs of related straight line rents and the write-off of previously unamortized deferred market revenue, as compared to $665,000 in the second quarter 2006.

Development Activity

At quarter end June 30, the Company's development pipeline consisted of:

    --  Ten buildings under construction totaling 1.0 million square
        feet for a total projected cost of $211.7 million, that are
        48.5% leased.

    --  Twelve buildings under development totaling 1.3 million square
        feet for a total projected cost of $265.8 million.

    --  Three projects under redevelopment totaling 741,000 square
        feet for a total projected cost of $92.2 million.

The Company's land inventory (wholly owned and joint venture) at quarter end totaled 1,576 acres that can support 13.9 million square feet of development.

During the quarter, the Company placed two buildings totaling 247,000 square feet into service. The largest building is a 193,000 square foot development property fully leased through June 2022 to the Northrop Grumman Corporation. The building will house the Virginia Information Technologies Agency (VITA) and Northrop Grumman operations.

Acquisition Activity

During the quarter, the Company acquired the remaining 50.0% undivided interest in 132 acres of land that can support 1.75 million square feet of office development in Colorado Springs, Colorado for $14.0 million. In connection with this transaction, 262,165 common units were issued by the Company's operating partnership and were valued at $12.5 million, or $47.68 per unit.

Disposition Activity

During the quarter, the Company disposed of most of its investment in TractManager, Inc., as part of their merger with Tudor Ventures and GE Healthcare Financial Services. The Company received $2.5 million and recognized a $1.0 million gain in connection with the disposition. TractManager, Inc. is an entity that developed an Internet-based contract imaging and management system for sale to real estate owners and healthcare providers. The Company will continue to use the cost method of accounting for its $128,000 remaining investment.

Financing and Capital Transactions

During the quarter, the Company closed a $150.0 million, 5.65% fixed interest rate loan which matures on June 1, 2017 and requires interest only payments. $120.5 million of the loan proceeds were used to retire existing indebtedness scheduled to mature June 2007. The remaining proceeds and cash reserves were used to repay $30.0 million of borrowings outstanding under the Company's unsecured revolving credit facility.

Earnings Guidance

The Company has revised its 2007 EPS guidance from $.37 - $.44 to $.34 - $.39 per diluted share. The Company has also updated its 2007 FFO guidance to a range of $2.20 - $2.25 per diluted share from $2.18 - $2.25 per diluted share.

    Conference Call

    The Company will hold an investor/analyst conference call:

    Conference Call and Webcast Date: Wednesday, August 1, 2007

    Time: 11:00 a.m. Eastern Time

    Dial In Number: 866-713-8566

    Passcode: 97519594

A replay of this call will be available beginning Wednesday, August 1, 2007 at 2:00 p.m. Eastern Time through Wednesday, August 15, 2007 at midnight Eastern Time. To access the replay, please call 888-286-8010 and use passcode 18361175.

The conference call will also be available via live webcast in the Investor Relations section of the Company's website at www.copt.com. A replay of the conference call will be immediately available via webcast in the Investor Relations section of the Company's website.

Definitions

Please refer to our Form 8-K or our website (www.copt.com) for definitions of certain terms used in this press release. Reconciliations of GAAP and non-GAAP measurements are included in the attached tables.

Company Information

Corporate Office Properties Trust (COPT) is a fully integrated, self-managed real estate investment trust (REIT) that focuses on the ownership, management, leasing, acquisition and development of suburban office properties located primarily in submarkets within the Greater Washington, DC region. As of June 30, 2007, the Company owned 247 office properties totaling 18.5 million rentable square feet, which includes 18 properties totaling 806,000 square feet held through joint ventures. The Company has implemented a core customer expansion strategy that is built around meeting, through acquisitions and development, the multi-location requirements of the Company's existing strategic tenants. The Company's property management services team provides comprehensive property and asset management to company owned properties and select third party clients. The Company's development and construction services team provides a wide range of development and construction management services for company owned properties, as well as land planning, design/build services, consulting, and merchant development to select third party clients. The Company's shares are traded on the New York Stock Exchange under the symbol OFC. More information on Corporate Office Properties Trust can be found on the Internet at www.copt.com.

Forward-Looking Information

This press release may contain "forward-looking" statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "estimate" or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements.

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

    --  the Company's ability to borrow on favorable terms;

    --  general economic and business conditions, which will, among
        other things, affect office property demand and rents, tenant
        creditworthiness, interest rates and financing availability;

    --  adverse changes in the real estate markets including, among
        other things, increased competition with other companies;

    --  risk of real estate acquisition and development, including,
        among other things, risks that development projects may not be
        completed on schedule, that tenants may not take occupancy or
        pay rent or that development or operating costs may be greater
        than anticipated;

    --  risks of investing through joint venture structures, including
        risks that the Company's joint venture partners may not
        fulfill their financial obligations as investors or may take
        actions that are inconsistent with the Company's objectives;

    --  our ability to satisfy and operate effectively under federal
        income tax rules relating to real estate investment trusts and
        partnerships;

    --  governmental actions and initiatives; and

    --  environmental requirements.

The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company's filings with the Securities and Exchange Commission, particularly the section entitled "Risk Factors" in Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2006.

                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
            (Amounts in thousands, except per share data)

                                                  Three Months Ended
                                                       June 30,
                                                 ---------------------
                                                    2007       2006
                                                 ---------- ----------
Revenues
  Real estate revenues                           $  90,952  $  70,769
  Service operations revenues                       11,693     14,140
                                                 ---------- ----------
    Total revenues                                 102,645     84,909
                                                 ---------- ----------
Expenses
  Property operating expenses                       29,038     21,640
  Depreciation and other amortization associated
   with real estate operations                      27,429     18,095
  Service operations expenses                       11,262     13,461
  General and administrative expenses                5,085      3,705
                                                 ---------- ----------
    Total operating expenses                        72,814     56,901
                                                 ---------- ----------
Operating income                                    29,831     28,008
Interest expense                                   (20,541)   (17,132)
Amortization of deferred financing costs              (921)      (606)
Gain on sale of non-real estate investment           1,033          -
                                                 ---------- ----------
Income from continuing operations before equity
 in loss of unconsolidated entities, income
 taxes and minority interests                        9,402     10,270
Equity in loss of unconsolidated entities              (57)       (32)
Income tax expense                                    (178)      (206)
                                                 ---------- ----------
Income from continuing operations before
 minority interests                                  9,167     10,032
Minority interests in income from continuing
 operations                                           (959)    (1,235)
                                                 ---------- ----------
Income from continuing operations                    8,208      8,797
(Loss) income from discontinued operations, net
 of minority interests                                (492)       294
                                                 ---------- ----------
Income before gain on sales of real estate           7,716      9,091
Gain on sales of real estate, net                      161         25
                                                 ---------- ----------
Net income                                           7,877      9,116
Preferred share dividends                           (4,025)    (3,653)
                                                 ---------- ----------
Net income available to common shareholders      $   3,852  $   5,463
                                                 ========== ==========

Earnings per share "EPS" computation
Numerator                                        $   3,852  $   5,463
                                                 ========== ==========

Denominator:
Weighted average common shares - basic              46,686     41,510
Dilutive effect of share-based compensation
 awards                                              1,105      1,721
                                                 ---------- ----------
Weighted average common shares - diluted            47,791     43,231
                                                 ========== ==========

EPS
  Basic                                          $    0.08  $    0.13
                                                 ========== ==========
  Diluted                                        $    0.08  $    0.13
                                                 ========== ==========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
       (Amounts in thousands, except per share data and ratios)

                                                   Three Months Ended
                                                        June 30,
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

Net income                                         $  7,877  $  9,116
Add: Real estate-related depreciation and
 amortization                                        27,087    18,490
Add: Depreciation and amortization on
 unconsolidated real estate entities                    169       109
Less: Depreciation and amortization allocable to
 minority interests in other consolidated entities      (47)      (44)
Loss on sales of real estate, excluding
 development portion                                     11         6
                                                   --------- ---------
Funds from operations ("FFO")                        35,097    27,677
Add: Minority interests-common units in the
 Operating Partnership                                  765     1,157
Less: Preferred share dividends                      (4,025)   (3,653)
                                                   --------- ---------
Funds from Operations - basic and diluted ("Basic
 and Diluted FFO")                                   31,837    25,181
Less: Straight-line rent adjustments                 (3,224)   (2,315)
Less: Recurring capital expenditures                 (6,526)   (3,425)
Less: Amortization of deferred market rental
 revenue                                               (473)     (495)
                                                   --------- ---------
Adjusted Funds from Operations - diluted ("Diluted
 AFFO")                                            $ 21,614  $ 18,946
                                                   ========= =========

Weighted average shares
  Weighted average common shares                     46,686    41,510
  Conversion of weighted average common units         8,313     8,465
                                                   --------- ---------
  Weighted average common shares/units - basic FFO
   per share                                         54,999    49,975
  Dilutive effect of share-based compensation
   awards                                             1,105     1,721
                                                   --------- ---------
  Weighted average common shares/units - diluted
   FFO per share                                     56,104    51,696
                                                   ========= =========

Diluted FFO per common share                       $   0.57  $   0.49
                                                   ========= =========
Dividends/distributions per common share/unit      $   0.31  $   0.28
                                                   ========= =========
Earnings payout ratio                                 379.4%    217.0%
                                                   ========= =========
Diluted FFO payout ratio                               54.0%     56.4%
                                                   ========= =========
Diluted AFFO payout ratio                              79.5%     75.0%
                                                   ========= =========
EBITDA interest coverage ratio                         2.77x     2.70x
                                                   ========= =========
EBITDA fixed charge coverage ratio                     2.31x     2.22x
                                                   ========= =========

Reconciliation of denominators for diluted EPS and
 diluted FFO per share
Denominator for diluted EPS                          47,791    43,231
Weighted average common units                         8,313     8,465
                                                   --------- ---------
Denominator for diluted FFO per share                56,104    51,696
                                                   ========= =========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
            (Amounts in thousands, except per share data)

                                                   Six Months Ended
                                                       June 30,
                                                 ---------------------
                                                    2007       2006
                                                 ---------- ----------
Revenues
  Real estate revenues                           $ 180,627  $ 139,991
  Service operations revenues                       21,770     30,449
                                                 ---------- ----------
    Total revenues                                 202,397    170,440
                                                 ---------- ----------
Expenses
  Property operating expenses                       60,786     42,701
  Depreciation and other amortization associated
   with real estate operations                      53,998     36,767
  Service operations expenses                       21,150     29,165
  General and administrative expenses                9,699      7,668
                                                 ---------- ----------
    Total operating expenses                       145,633    116,301
                                                 ---------- ----------
Operating income                                    56,764     54,139
Interest expense                                   (40,417)   (34,161)
Amortization of deferred financing costs            (1,805)    (1,162)
Gain on sale of non-real estate investment           1,033          -
                                                 ---------- ----------
Income from continuing operations before equity
 in loss of unconsolidated entities, income
 taxes and minority interests                       15,575     18,816
Equity in loss of unconsolidated entities             (151)       (55)
Income tax expense                                    (283)      (421)
                                                 ---------- ----------
Income from continuing operations before
 minority interests                                 15,141     18,340
Minority interests in income from continuing
 operations                                         (1,385)    (2,193)
                                                 ---------- ----------
Income from continuing operations                   13,756     16,147
(Loss) income from discontinued operations, net
 of minority interests                                (493)     2,771
                                                 ---------- ----------
Income before gain on sales of real estate          13,263     18,918
Gain on sales of real estate, net                      161        135
                                                 ---------- ----------
Net income                                          13,424     19,053
Preferred share dividends                           (8,018)    (7,307)
                                                 ---------- ----------
Net income available to common shareholders      $   5,406  $  11,746
                                                 ========== ==========

Earnings per share "EPS" computation
Numerator                                        $   5,406  $  11,746
                                                 ========== ==========

Denominator:
Weighted average common shares - basic              46,185     40,594
Dilutive effect of share-based compensation
 awards                                              1,305      1,801
                                                 ---------- ----------
Weighted average common shares - diluted            47,490     42,395
                                                 ========== ==========

EPS
  Basic                                          $    0.12  $    0.29
                                                 ========== ==========
  Diluted                                        $    0.11  $    0.28
                                                 ========== ==========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
       (Amounts in thousands, except per share data and ratios)

                                                   Six Months Ended
                                                       June 30,
                                                 ---------------------
                                                    2007       2006
                                                 ---------- ----------

Net income                                       $  13,424  $  19,053
Add: Real estate-related depreciation and
 amortization                                       53,387     37,558
Add: Depreciation and amortization on
 unconsolidated real estate entities                   337        194
Less: Depreciation and amortization allocable to
 minority interests in other consolidated
 entities                                              (89)       (77)
Loss (gain) on sales of real estate, excluding
 development portion                                    11     (2,453)
                                                 ---------- ----------
Funds from operations ("FFO")                       67,070     54,275
Add: Minority interests-common units in the
 Operating Partnership                               1,073      2,563
Less: Preferred share dividends                     (8,018)    (7,307)
                                                 ---------- ----------
Funds from Operations - basic and diluted
 ("Basic and Diluted FFO")                          60,125     49,531
Less: Straight-line rent adjustments                (5,795)    (4,437)
Less: Recurring capital expenditures                (9,667)    (6,233)
Less: Amortization of deferred market rental
 revenue                                              (984)    (1,050)
                                                 ---------- ----------
Adjusted Funds from Operations - diluted
 ("Diluted AFFO")                                $  43,679  $  37,811
                                                 ========== ==========

Weighted average shares
  Weighted average common shares                    46,185     40,594
  Conversion of weighted average common units        8,361      8,493
                                                 ---------- ----------
  Weighted average common shares/units - basic
   FFO per share                                    54,546     49,087
  Dilutive effect of share-based compensation
   awards                                            1,305      1,801
                                                 ---------- ----------
  Weighted average common shares/units - diluted
   FFO per share                                    55,851     50,888
                                                 ========== ==========

Diluted FFO per common share                     $    1.08  $    0.97
                                                 ========== ==========
Dividends/distributions per common share/unit    $    0.62  $    0.56
                                                 ========== ==========
Earnings payout ratio                                539.1%     196.7%
                                                 ========== ==========
Diluted FFO payout ratio                              57.0%      56.2%
                                                 ========== ==========
Diluted AFFO payout ratio                             78.5%      73.6%
                                                 ========== ==========

Reconciliation of denominators for diluted EPS
 and diluted FFO per share
Denominator for diluted EPS                         47,490     42,395
Weighted average common units                        8,361      8,493
                                                 ---------- ----------
Denominator for diluted FFO per share               55,851     50,888
                                                 ========== ==========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
       (Dollars and shares in thousands, except per share data)

                                               June 30,   December 31,
                                                 2007         2006
                                             ------------ ------------
Balance Sheet Data (in thousands) (as of
 period end):
Investment in real estate, net of
 accumulated depreciation                    $ 2,524,573  $ 2,111,310
Total assets                                   2,854,729    2,419,601
Debt                                           1,752,478    1,498,537
Total liabilities                              1,886,209    1,629,111
Minority interests                               130,751      116,187
Beneficiaries' equity                            837,769      674,303

Debt to Total Assets                                61.4%        61.9%
Debt to Undepreciated Book Value of Real
 Estate Assets                                      60.4%        62.0%
Debt to Total Market Capitalization                 41.2%        34.9%

Property Data (wholly owned properties)
(as of period end):
Number of operating properties owned                 229          170
Total net rentable square feet owned (in
 thousands)                                       17,710       15,050
Occupancy                                           92.7%        92.8%

Reconciliation of denominator for debt to
 total assets to denominator for debt to
 undepreciated book value of real estate
 assets
Denominator for debt to total assets         $ 2,854,729  $ 2,419,601
Assets other than assets included in
 investment in real estate                      (330,156)    (308,291)
Accumulated depreciation on real estate
 assets                                          255,248      219,574
Intangible assets on real estate
 acquisitions, net                               123,861       87,325
                                             ------------ ------------
Denominator for debt to undepreciated book
 value of real estate assets                 $ 2,903,682  $ 2,418,209
                                             ============ ============
                               Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                               ------------------- -------------------
                                  2007     2006      2007      2006
                               --------- --------- --------- ---------
Reconciliation of tenant
 improvements and incentives,
 capital improvements and
 leasing costs for operating
 properties to recurring
 capital expenditures
Total tenant improvements and
 incentives on operating
 properties                     $ 7,673  $  3,317  $ 14,190  $  6,190
Total capital improvements on
 operating properties             2,387     2,536     3,968     5,659
Total leasing costs on
 operating properties             2,014     1,421     4,993     2,367
Less: Nonrecurring tenant
 improvements and incentives
 on operating properties         (3,636)   (1,752)   (9,494)   (3,033)
Less: Nonrecurring capital
 improvements on operating
 properties                      (1,446)   (1,068)   (1,854)   (3,587)
Less: Nonrecurring leasing
 costs incurred on operating
 properties                        (494)   (1,076)   (2,192)   (1,434)
Add: Recurring improvements on
 operating properties held
 through joint ventures              28        47        56        71
                               --------- --------- --------- ---------
Recurring capital expenditures  $ 6,526  $  3,425  $  9,667  $  6,233
                               ========= ========= ========= =========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
                        (Dollars in thousands)

                                  Three Months Ended  Six Months Ended
                                       June 30,           June 30,
                                  ------------------  ----------------
                                    2007      2006      2007    2006
                                  --------- --------  -------- -------
Reconciliation of dividends for
 Earnings Payout Ratio to
 dividends and distributions for
 FFO & AFFO Payout Ratio
Common share dividends for
 earnings payout ratio             $14,613  $11,853    $29,142 $23,110
Common unit distributions            2,574    2,357      5,128   4,731
                                  --------- --------  -------- -------
Dividends and distributions for
 FFO & AFFO payout ratio           $17,187  $14,210    $34,270 $27,841
                                  ========= ========  ======== =======

Reconciliation of GAAP net income
 to earnings before interest,
 income taxes, depreciation and
 amortization ("EBITDA")
Net income                         $ 7,877  $ 9,116
Interest expense on continuing
 operations                         20,541   17,132
Interest expense on discontinued
 operations                            533      504
Income tax expense                     181      206
Real estate-related depreciation
 and amortization                   27,087   18,490
Amortization of deferred
 financing costs-continuing
 operations                            921      606
Amortization of deferred
 financing costs-discontinued
 operations                              -        3
Other depreciation and
 amortization                          342      260
Minority interests                     899    1,297
                                  --------- --------
EBITDA                             $58,381  $47,614
                                  ========= ========

Reconciliation of interest
 expense from continuing
 operations to the denominators
 for interest coverage-EBITDA and
 fixed charge coverage-EBITDA
Interest expense from continuing
 operations                        $20,541  $17,132
Interest expense from
 discontinued operations               533      504
                                  --------- --------
Denominator for interest
 coverage-EBITDA                    21,074   17,636
Preferred share dividends            4,025    3,653
Preferred unit distributions           165      165
                                  --------- --------
Denominator for fixed charge
 coverage-EBITDA                   $25,264  $21,454
                                  ========= ========

Reconciliation of same property
 net operating income to same
 property cash net operating
 income
Same property net operating
 income                            $48,419  $47,686
Less: Straight-line rent
 adjustments                        (1,532)  (2,065)
Less: Amortization of deferred
 market rental revenue                (245)    (300)
                                  --------- --------
Same property cash net operating
 income                            $46,642  $45,321
                                  ========= ========
                  Corporate Office Properties Trust
                        Summary Financial Data
                             (unaudited)
            (Amounts in thousands, except per share data)

                                                        Year Ending
                                                     December 31, 2007
                                                     -----------------
Reconciliation of projected EPS-diluted to projected
 diluted FFO per share                                 Low      High
                                                     -------- --------
Reconciliation of numerators
----------------------------------------------------
Numerator for projected EPS-diluted                  $ 16,350 $ 18,750
Real estate-related depreciation and amortization     103,544  103,544
Minority interests-common units                         3,017    3,460
                                                     -------- --------
Numerator for projected diluted FFO per share        $122,911 $125,754
                                                     ======== ========

Reconciliation of denominators
----------------------------------------------------
Denominator for projected EPS-diluted                  47,616   47,616
Weighted average common units                           8,340    8,340
                                                     -------- --------
Denominator for projected diluted FFO per share        55,956   55,956
                                                     ======== ========

Projected EPS - diluted                              $   0.34 $   0.39
                                                     ======== ========
Projected diluted FFO per share                      $   2.20 $   2.25
                                                     ======== ========

 Top Twenty Office Tenants of Wholly Owned Properties as of June 30,
                               2007 (1)
                        (Dollars in thousands)



                                                        Percentage of
                                               Total        Total
                                  Number of  Occupied     Occupied
            Tenant                 Leases   Square Feet  Square Feet
-------------------------------   --------- ----------- -------------

United States of America       (5)       50   2,314,064         14.1%
Northrop Grumman Corporation   (6)       21     954,163          5.8%
Booz Allen Hamilton, Inc.                 9     723,409          4.4%
Computer Sciences Corporation  (6)        4     454,645          2.8%
L-3 Communications Holdings,
 Inc.                          (6)        4     221,635          1.4%
Unisys Corporation             (7)        4     760,145          4.6%
General Dynamics Corporation              8     270,456          1.6%
Wachovia Corporation           (6)        5     189,478          1.2%
The Aerospace Corporation                 2     221,785          1.4%
AT&T Corporation               (6)        9     337,052          2.1%
Comcast Corporation                       9     280,586          1.7%
The Boeing Company             (6)        4     143,480          0.9%
Ciena Corporation                         3     221,609          1.4%
Science Applications
 International Corp.                     12     170,839          1.0%
Lockheed Martin Corporation               6     163,685          1.0%
Magellan Health Services, Inc.            3     142,199          0.9%
BAE Systems PLC                (6)        7     212,339          1.3%
Merck & Co., Inc. (Unisys)     (7)        2     227,273          1.4%
The Johns Hopkins University              4     115,854          0.7%
Wyle Laboratories, Inc.                   4     174,792          1.1%



Subtotal Top 20 Office Tenants          170   8,299,488         50.6%
All remaining tenants                   772   8,113,632         49.4%
                                  ------------------------------------
Total/Weighted Average                  942  16,413,120        100.0%
                                  ====================================


                           Total         Percentage        Weighted
                         Annualized       of Total         Average
                           Rental     Annualized Rental   Remaining
      Tenant           Revenue (2)(3)      Revenue      Lease Term (4)
-------------------   --------------- ----------------- --------------

United States of
 America           (5)        $51,895             15.0%            6.1
Northrop Grumman
 Corporation       (6)         23,320              6.7%            6.6
Booz Allen
 Hamilton, Inc.                19,641              5.7%            7.0
Computer Sciences
 Corporation       (6)         11,347              3.3%            3.9
L-3 Communications
 Holdings, Inc.    (6)          8,844              2.6%            6.5
Unisys Corporation (7)          8,665              2.5%            2.2
General Dynamics
 Corporation                    7,005              2.0%            2.7
Wachovia
 Corporation       (6)          6,745              1.9%           10.9
The Aerospace
 Corporation                    6,504              1.9%            7.4
AT&T Corporation   (6)          6,013              1.7%            5.3
Comcast Corporation             5,242              1.5%            4.5
The Boeing Company (6)          4,079              1.2%            2.5
Ciena Corporation               3,675              1.1%            4.7
Science
 Applications
 International
 Corp.                          3,244              0.9%            0.4
Lockheed Martin
 Corporation                    3,048              0.9%            2.0
Magellan Health
 Services, Inc.                 3,021              0.9%            3.4
BAE Systems PLC    (6)          2,841              0.8%            3.5
Merck & Co., Inc.
 (Unisys)          (7)          2,621              0.8%            2.0
The Johns Hopkins
 University                     2,478              0.7%            8.5
Wyle Laboratories,
 Inc.                           2,435              0.7%            5.2



Subtotal Top 20
 Office Tenants               182,661             52.8%            5.6
All remaining
 tenants                      163,509             47.2%            4.2
                      ---------------------------------
Total/Weighted
 Average                     $346,170            100.0%            4.9
                      =================================


(1) Table excludes owner occupied leasing activity which represents
     147,004 square feet with a weighted average remaining lease term
     of 7.5 years as of June 30, 2007.

(2) Total Annualized Rental Revenue is the monthly contractual base
     rent as of June 30, 2007, multiplied by 12, plus the estimated
     annualized expense reimbursements under existing office leases.

(3) Order of tenants is based on Annualized Rent.

(4) The weighting of the lease term was computed using Total Rental
     Revenue.

(5) Many of our government leases are subject to early termination
     provisions which are customary to government leases. The weighted
     average remaining lease term was computed assuming no exercise of
     such early termination rights.

(6) Includes affiliated organizations or agencies.

(7) Merck & Co., Inc. subleases 219,065 rentable square feet from
     Unisys' 960,349 leased rentable square feet in our Greater
     Philadelphia region.

Source: Corporate Office Properties Trust