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Factors that could cause actual results to differ materially, include, without limitation, the ability to renew or release space under favorable terms, regulatory changes in the economy, the successful and timely completion of acquisitions this divisions and development projects, changes in interest rates and other risks associated with the commercial real estate business, as detailed in our filings with the SEC.I would now like to turn the call over to Roger for his formal remarks. Roger Waesche Thank you, Stephanie. Good morning, everyone. We’re happy to be joining you today to share plan for 2012 and some important steps, which will position the company for the future. First, I’m going to provide a brief update on the 2012 federal budget process as it relates to the Department of Defense or DoD, discuss the progress we’ve made on and the expansion of our strategic reallocation plan and walk through the thinking that went into the dividend reset we announced this morning. Then, Steve will provide our guidance and underlying assumptions for 2012. Regarding the government’s 2012 fiscal year budget, here’s good news. The National Defense Authorization Act for fiscal year 2012, a necessary step in enacting the defense budget was passed by Congress and signed by the President in December. In mid-December, the House and Senate also passed the defense budget bill for fiscal year 2012, known as the Consolidated Appropriations Act, which the President signed in the law on December 23. The passage of the bill eliminated the need for ongoing continuing resolutions for the DoD, which we’ve had the past two years and provided the DoD with a base defense budget of $518 billion, an increase of $5 billion or approximately 1% over the fiscal year of 2011 budget. The 2012 base budget achieved savings through reduction in weapons programs and military vehicles.
Importantly, for COPT, the DoD has indicated in it’s planning documents that programs that support intelligence functions and National Cyber Security will be protected and funded [not cut], because COPT has build its franchise around key locations that serve the intelligence communities office space needs, we believe demand for our space will not be directly affected by whatever budget cuts do occur elsewhere in the DoD budget.Specifically, the President and the Defense Secretary outlined the following national defense priorities in their January 5 press conference as follows; Unmanned Aerial Vehicles and space missions, Cyber Security, all sources of intelligence programs and rapid mobilization. These programs are developed, tested, contracted for and refined at many of the military installations adjacent to COPT’s locations including Fort Meade, Redstone Arsenal, Aberdeen Proving Ground, Fort Belvoir, Peterson Air Force Base, and Lackland Air Force Base. So there is cause for measured optimism. Recall that as recently as our last earnings call in October, management was praised for the uncertainty of the continuing resolution situation to affect the DoD, and inhibit related defense contractors from much of 2012. With the passage of the Consolidated Appropriations Act in December however, COPT’s existing and prospective DoD tenants now have a fiscal year 2012 budget and consign new leases. Additionally, the office of management in budget has instructed the DoD to prepare its fiscal year 2013 budget without incorporating the automatic reductions outlined by the recent debt ceiling legislation. The guidance assumptions, Steve will give you during his remarks reflect our belief that our core business remains solid. That being said, we anticipate the leasing environment in 2012 will continue to be challenging, owing to the toughest economic recovery and the expectation of some defense spending cuts in fiscal 2013. But we acknowledge now, we're in a stronger position to convert existing demand for office space at our key locations into signed leases. Read the rest of this transcript for free on seekingalpha.com