Corporate Office Properties Trust (NYSE:OFC) Q2 2022 Earnings Conference Call July 29, 2022 12:00 PM ET
Company Participants
Michelle Layne - Investor Relations
Steve Budorick - President and CEO
Anthony Mifsud - CFO
Todd Hartman - COO
Conference Call Participants
Michael Griffin - Citi
Blaine Heck - Wells Fargo
James Feldman - Bank of America
Steve Sakwa - Evercore ISI
David Rodgers - Robert W. Baird
Tom Catherwood - BTIG
Bill Crow - Raymond James
Operator
Welcome to the Corporate Office Properties Trust Second Quarter 2022 Results Conference Call. As a reminder, today's call is being recorded.
At this time, I will turn the call over to Michelle Layne, COPT's Manager of Investor Relations. Ms. Layne, please go ahead.
Michelle Layne
Thank you, Katherine. Good afternoon, and welcome to COPT's conference call to discuss second quarter results and updated guidance for the year. With me today are Steve Budorick, President and CEO; and Todd Hartman, Executive Vice President and COO; and Anthony Mifsud, Executive Vice President and CFO.
Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website in the results press release and presentation and in our supplemental information package. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC filings. Actual events and results can differ materially from those forward-looking statements, and the company does not undertake a duty to update them.
Steve?
Steve Budorick
Good afternoon, and thank you for joining us. We achieved another strong quarter with continued progress on our 2022 business plan. The successful performance and execution of our growth strategy since 2018 has positioned our company to deliver reliable annual FFO growth and long-term shareholder value. Over the past decade, we deeply concentrated investment in the property supporting priority U.S. defense missions and select mission-critical assets in regions that we collectively referred to as Defense/IT locations.
At the end of the quarter, these locations generated 90% of our annualized rental revenue. Demand in these locations is driven by and correlated with national security spending and largely immune from conditions in the overall economy. Our concentration of leases to the U.S. government and high credit contractors supporting national funds and cybersecurity missions is the foundation of our ability to generate resilient high-quality cash flow.
Our external growth strategy continues to be driven by successful preleased and low-risk development at these proven Defense/IT locations. We have an advantaged position in this unique market as the go-to landlord for specialized space satisfying government security requirements. We wisely protected our balance sheet. And as a result, the current interest rate environment poses limited risk to our performance. The $1.8 billion of refinancing completed in 2020 and 2021 provide the solid foundation for us to deliver future growth from our operating and development portfolios.