EX-99 2 w37400exv99.htm PRESS RELEASE BY THE REGISTRANTS exv99
 

EXHIBIT 99.1
     
(LIBERTY LOGO)
  Press Release
         
For Immediate Release
  Inquiries:   Jeanne A. Leonard
July 23, 2007
      Liberty Property Trust
 
      610/648-1704
LIBERTY PROPERTY TRUST ANNOUNCES
SECOND QUARTER RESULTS
Malvern, PA — Liberty Property Trust (NYSE:LRY) reported that net income per common share (diluted) was $0.57 for the quarter ended June 30, 2007, compared to $0.76 per share for the quarter ended June 30, 2006. For the six-month period ended June 30, 2007, net income per common share (diluted) was $1.00, compared to $1.76 per share for the same period in 2006.
Funds from operations available to common shareholders (diluted) (“FFO”) for the second quarter of 2007 was $0.79 per share, compared to $0.80 per share for the second quarter of 2006. Operating results for the second quarter of 2007 include lease termination fees of $0.6 million or approximately $0.01 per share, and preferred unit redemption costs of $0.7 million or approximately $0.01 per share. FFO per share for the six month period ended June 30, 2007 was $1.59, compared to $1.57 per share for the same period in 2006. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.
“Liberty continues to execute on our 2007 strategic plan to reposition the company for enhanced growth in dynamic markets,” said Bill Hankowsky, Liberty’s chief executive officer. “During the second quarter, we increased our position in Phoenix and moved well forward with our exit from the Detroit market. Our robust development pipeline continues to add quality, well-leased properties to the portfolio every quarter, and our existing portfolio has now produced five straight quarters of positive same store growth. We are experiencing steady improvement in virtually all of our markets and property types.”
Portfolio Performance
Leasing: At June 30, 2007 Liberty’s in-service portfolio of 68.4 million square feet was 91.1% occupied, compared to 92.1% at the end of the first quarter of 2007. This decrease in occupancy is primarily due to the timing of certain tenant expansions and re-leasing activities.
Same Store Performance: Property level operating income for same store properties increased by 3.1% on a cash basis and by 2.2% on a straight line basis for the second quarter of 2007 compared to the same quarter in 2006.
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Liberty Property Trust Second Quarter 2007 Earnings -2-
Real Estate Investments
Development: During the second quarter, Liberty brought into service 11 development properties totaling 2.2 million square feet. At quarter-end the properties were 93.5% leased at a yield of 8.1% on the company’s investment of $164.0 million. The expected stabilized yield on these developments is 9.6%. In addition, a joint venture in which the company holds a 25% interest brought into service one development property totaling 593,000 square feet. At quarter-end this property was 100% leased at a yield of 7.7% on the joint venture’s investment of $27.4 million.
During the second quarter, Liberty began development of four properties totaling 269,000 square feet, with an expected total investment of $34.7 million. The properties consist of a 26,000 square foot operations center at the Philadelphia Navy Yard for The Philadelphia Stock Exchange, a 126,000 square foot distribution building in South Carolina, a 36,000 square foot office building in Tampa, Florida and an 81,000 square foot office building in Jacksonville, Florida. In addition, a joint venture in which Liberty holds a 50% interest began construction of a 340,000 square foot distribution building in Orlando, Florida.
As of June 30, 2007, Liberty had 5.8 million square feet of wholly-owned and joint venture properties under development. This activity represents a total investment of $944 million, with an expected yield of 8.6%. The properties were 50.9% leased at quarter-end.
Acquisitions: During the second quarter, Liberty acquired five properties totaling 363,000 square feet. These properties are 66.0% leased, have a current yield of 6.1% and a projected stabilized yield of 8.2% on a total investment of $69.4 million. The properties include three office buildings totaling 139,000 square feet at Allred Cotton Center in Phoenix, Arizona; a 107,000 square foot office building in Exton, Pennsylvania; and a 117,000 square foot office building in Greenville, South Carolina. In addition, a joint venture in which the company holds a 25% interest acquired two distribution buildings in Aurora, Illinois. The properties total 501,000 square feet, are 53.4% leased, have a current yield of 3.2% and a projected stabilized yield of 7.4%.
Dispositions: During the second quarter, Liberty sold ten properties containing 1.8 million square feet, and 149 acres of land, for $111.0 million. These properties were 91.1% leased when sold, and include six distribution and flex properties in Michigan totaling 1.4 million square feet, two distribution buildings in Chesterfield, Virginia totaling 302,000 square feet, a 39,000 square foot office building in Greenville, South Carolina and a 50,000 square foot flex building in Minnetonka, Minnesota.
Financing and Balance Sheet Management
During the quarter, Liberty redeemed for $23.7 million its outstanding 7.63% Series D Cumulative Redeemable Preferred Units.
Also during the quarter, Liberty initiated a $50 million accelerated share repurchase program.
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Liberty Property Trust Second Quarter 2007 Earnings -3-
Subsequent Events
On July 10, Liberty purchased five office buildings totaling 428,000 square feet at Allred Cotton Center in Phoenix, Arizona for approximately $89.5 million.
About the Company
Liberty Property Trust (NYSE:LRY) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior office and industrial properties. Liberty’s 68 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 tenants.
Additional information about the Company, including Liberty’s Quarterly Supplemental Package with detailed financial information is available in the Investors section of the Company’s web site at www.libertyproperty.com. If you are unable to access the web site, a copy of the supplemental package may be obtained by contacting Liberty by phone at 610-648-1704, or by e-mail to jleonard@libertyproperty.com.
Liberty will host a conference call during which management will discuss second quarter results, on Tuesday, July 24, 2007, at 1:00 p.m. eastern time. To access the conference call in the United States or Canada, please dial 1-888-870-2815. For international access, dial 706-643-7691. No password or code is needed. A replay of the call will be available by dialing 1-800-642-1687 for US/Canada participants or 706-645-9291 for international participants. A passcode is needed for the replay: 7026688. The call can also be accessed via the Internet on the Investors page of Liberty’s web site at www.libertyproperty.com for one week following the call.
The statements contained in this press release may include forward-looking statements within the meaning of the federal securities law. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. These factors include, without limitation, the uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants’ business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, the financial condition of tenants, the uncertainties of real estate development and construction activity, the costs and availability of financing, the effects of local economic and market conditions, regulatory changes, potential liability relative to environmental matters and other risks and uncertainties detailed in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
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Liberty Property Trust
Statement of Operations
June 30, 2007
(Unaudited and in thousands, except per share amounts)
                                 
    Quarter Ended     Year to Date  
    June 30, 2007     June 30, 2006     June 30, 2007     June 30, 2006  
Operating Revenue
                                
Rental
   $ 121,843     $ 113,322     $ 241,306     $ 223,069  
Operating expense reimbursement
     54,495       46,455       107,658       93,194  
 
                        
Total operating revenue
     176,338       159,777       348,964       316,263  
 
                        
 
                                
Operating Expenses
                                
Rental property
     37,886       32,014       76,030       64,951  
Real estate taxes
     19,490       17,296       36,637       33,722  
General and administrative
     12,799       11,558       26,138       21,588  
Depreciation and amortization
     39,266       35,299       76,982       69,102  
 
                        
Total operating expenses
     109,441       96,167       215,787       189,363  
 
                        
 
                                
Operating Income
     66,897       63,610       133,177       126,900  
 
                                
Other Income/Expense
                                
Interest and other
     3,298       2,064       6,304       3,815  
Interest
     (30,137 )     (28,045 )     (58,315 )     (57,350 )
 
                        
Total other income/expense
     (26,839 )     (25,981 )     (52,011 )     (53,535 )
 
                        
 
                                
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures
     40,058       37,629       81,166       73,365  
Gain on property dispositions
     1,299       17,438       1,451       17,483  
Income taxes
     (213 )     (235 )     (514 )     (610 )
Minority interest
     (6,113 )     (5,738 )     (11,657 )     (10,223 )
Equity in earnings of unconsolidated joint ventures
     326       741       1,055       916  
 
                        
 
                                
Income from continuing operations
     35,357       49,835       71,501       80,931  
 
                                
Discontinued operations net of minority interest (including net gain on property dispositions of $17,430 and $16,550 for the quarters ended June 30, 2007 and 2006 and $20,231 and $76,080 for the six month periods ended June 30, 2007 and 2006)
     17,070       18,615       20,624       77,946  
 
                        
Net Income
   $ 52,427     $ 68,450     $ 92,125     $ 158,877  
 
                        
 
                                
Basic income per common share
                                
Continuing operations
   $ 0.38     $ 0.56     $ 0.78     $ 0.91  
 
                        
Discontinued operations
   $ 0.19     $ 0.21     $ 0.23     $ 0.88  
 
                        
Total basic income per common share
   $ 0.57     $ 0.77     $ 1.01     $ 1.79  
 
                        
 
                                
Diluted income per common share
                                
Continuing operations
   $ 0.38     $ 0.55     $ 0.78     $ 0.89  
 
                        
Discontinued operations
   $ 0.19     $ 0.21     $ 0.22     $ 0.87  
 
                        
Total diluted income per common share
   $ 0.57     $ 0.76     $ 1.00     $ 1.76  
 
                        
 
                                
Weighted average shares
                                
Basic
     91,597       88,934       91,318       88,587  
 
                        
Diluted
     92,328       90,324       92,168       90,101  
 
                        

 

 

Liberty Property Trust
Balance Sheet
June 30, 2007
(In thousands, except share amounts)
                 
    June 30, 2007     December 31, 2006  
    (Unaudited)          
Assets
                
Real estate:
                
Land and land improvements
   $ 740,003     $ 677,041  
Building and improvements
     4,008,403       3,802,949  
Less: accumulated depreciation
     (849,996 )     (803,968 )
 
            
 
                
Operating real estate
     3,898,410       3,676,022  
 
                
Development in progress
     651,283       538,521  
Land held for development
     255,361       195,332  
 
            
 
                
Net real estate
     4,805,054       4,409,875  
 
                
Cash and cash equivalents
     12,741       53,737  
Restricted cash
     34,764       55,671  
Accounts receivable
     24,216       23,809  
Deferred rent receivable
     72,522       71,894  
Deferred financing and leasing costs, net of accumulated amortization (2007, $111,914; 2006, $100,406)
     134,681       129,157  
Investment in unconsolidated joint ventures
     55,955       47,196  
Assets held for sale
     180       51,266  
Prepaid expenses and other assets
     62,128       68,306  
 
            
 
                
Total assets
   $ 5,202,241     $ 4,910,911  
 
            
 
                
Liabilities
                
Mortgage loans
   $ 185,814     $ 185,978  
Unsecured notes
     1,955,000       1,955,000  
Credit facility
     542,960       246,960  
Accounts payable
     57,346       40,633  
Accrued interest
     36,339       36,297  
Dividend and distributions payable
     59,163       58,961  
Other liabilities
     245,133       217,751  
 
            
 
                
Total liabilities
     3,081,755       2,741,580  
 
            
 
                
Minority interest
     273,365       297,727  
 
                
Shareholders’ Equity
                
Common shares of beneficial interest, $.001 par value, 187,987,000 shares authorized, 92,069,183 (includes 835,377 in treasury) and 90,972,979 (includes 59,100 in treasury) shares issued and outstanding as of June 30, 2007 and December 31, 2006, respectively
     92       91  
Additional paid-in capital
     1,951,554       1,906,403  
Accumulated other comprehensive income
     22,525       20,323  
Distributions in excess of net income
     (75,145 )     (53,886 )
Common shares in treasury, at cost, 835,377 and 59,100 shares as of June 30, 2007 and December 31, 2006, respectively
     (51,905 )     (1,327 )
 
            
Total shareholders’ equity
     1,847,121       1,871,604  
 
                
Total liabilities & shareholders’ equity
   $ 5,202,241     $ 4,910,911  
 
            

 

 

Liberty Property Trust
Statement of Funds From Operations
June 30, 2007
(Unaudited and in thousands, except per share amounts)
                                                                 
    Quarter Ended     Year to Date  
    June 30, 2007     June 30, 2006     June 30, 2007     June 30, 2006  
            Per             Per             Per             Per  
            Weighted             Weighted             Weighted             Weighted  
            Average             Average             Average             Average  
    Dollars     Share     Dollars     Share     Dollars     Share     Dollars     Share  
Reconciliation of net income to FFO — basic:
                                                                
Basic — income available to common shareholders
   $ 52,427     $ 0.57     $ 68,450     $ 0.77     $ 92,125     $ 1.01     $ 158,877     $ 1.79  
 
                                                        
 
                                                                
Adjustments:
                                                                
Depreciation and amortization of unconsolidated joint ventures
     844               763               1,685               1,316          
Depreciation and amortization
     39,062               37,809               76,989               74,400          
Gain on property dispositions
     (18,549 )             (34,649 )             (21,936 )             (94,295 )        
Minority interest share in addback for depreciation and amortization and gain on property dispositions
     (938 )             (176 )             (2,484 )             681          
 
                                                
Funds from operations available to common shareholders — basic
   $ 72,846     $ 0.80     $ 72,197     $ 0.81     $ 146,379     $ 1.60     $ 140,979     $ 1.59  
 
                                                
 
                                                                
Reconciliation of net income to FFO — diluted:
                                                                
Diluted — income available to common shareholders
   $ 52,427     $ 0.57     $ 68,450     $ 0.76     $ 92,125     $ 1.00     $ 158,877     $ 1.76  
 
                                                        
 
                                                                
Adjustments:
                                                                
Depreciation and amortization of unconsolidated joint ventures
     844               763               1,685               1,316          
Depreciation and amortization
     39,062               37,809               76,989               74,400          
Gain on property dispositions
     (18,549 )             (34,649 )             (21,936 )             (94,295 )        
Minority interest excluding preferred unit distributions and excess of preferred unit redemption over carrying amount
     2,407               3,210               4,222               6,792          
 
                                                
Funds from operations available to common shareholders — diluted
   $ 76,191     $ 0.79     $ 75,583     $ 0.80     $ 153,085     $ 1.59     $ 147,090     $ 1.57  
 
                                                
 
                                                                
Reconciliation of weighted average shares:
                                                                
Weighted average common shares — all basic calculations
     91,597               88,934               91,318               88,587          
Dilutive shares for long term compensation plans
     731               1,390               850               1,514          
 
                                                        
Diluted shares for net income calculations
     92,328               90,324               92,168               90,101          
Weighted average common units
     4,190               3,653               4,190               3,586          
 
                                                        
Diluted shares for funds from operations calculations
     96,518               93,977               96,358               93,687          
 
                                                        
     The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REIT’s since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP.