EX-99.1 2 c95895exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
(LIBERTY LOGO)   Press Release
         
For Immediate Release
  Inquiries:   Jeanne A. Leonard
 
      Liberty Property Trust
 
      610/648-1704
LIBERTY PROPERTY TRUST ANNOUNCES
FOURTH QUARTER AND FULL YEAR RESULTS
Malvern, PA, February 8, 2010 — Liberty Property Trust (NYSE:LRY) reported that funds from operations available to common shareholders (diluted) (“FFO”) for the fourth quarter of 2009 was a loss of $0.14 per share, compared to a profit of $0.80 per share for the fourth quarter of 2008. FFO for the fourth quarter includes a $94.5 million, non-cash impairment charge related to certain of the company’s investments in unconsolidated joint ventures and related goodwill. Excluding this impairment charge, FFO for the fourth quarter of 2009 would be $0.67 per share. Funds from operations for the fourth quarter also include termination fees of $1.7 million.
For the year ended December 31, 2009, FFO per share was $1.98. Excluding the $94.5 million non-cash impairment charge, FFO for the year ended December 31, 2009 would be $2.83 per share. This compares to FFO of $3.20 per share for 2008.
Net loss per common share (diluted) was $0.46 per share for the quarter ended December 31, 2009, compared to net income of $0.53 per share (diluted) for the quarter ended December 31, 2008. Net income for the full year 2009 was $0.52 per common share, compared with $1.62 per share for 2008. Adjusting for the non-cash impairment charge of $94.5 million, net income for the quarter ended December 31, 2009 would be $0.35 per share, and for the year ended December 31, 2009 it would be $1.37 per share.
“Fourth quarter activity was encouraging,” said Bill Hankowsky, chief executive officer. “At the end of the year we saw a marked increase in the number and quality of industrial prospects, coupled with renewed willingness on the part of companies to make commitments, in both the office and industrial sectors. This translated into very strong leasing performance. We believe that the market has bottomed, we are beginning to see very gradual recovery in the industrial sector, and we may see similar positive signs in the office sector in the second half of this year should the nation’s employment situation improve.”
Portfolio Performance
Leasing: At December 31, 2009, Liberty’s in-service portfolio of 78.2 million square feet was 89.2% occupied, compared to 89.3% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 4.7 million square feet of space.
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Liberty Property Trust Fourth Quarter 2009 Earnings -2-
Same Store Performance: Property level operating income for same store properties decreased by 1.4% on a cash basis and by 2.8% on a straight line basis for the fourth quarter of 2009 compared to the same quarter in 2008 and increased by 0.4% on a cash basis and 0.6% on a straight line basis for the full year 2009 compared to 2008.
Capital Activities and Balance Sheet Management
Property Sales: During the fourth quarter, Liberty sold seven operating properties, which contained 543,000 square feet of leaseable space, and 10.1 acres of land for $35.1 million.
Real Estate Investments
Development: During the fourth quarter, Liberty brought into service four development properties totaling 1.1 million square feet for a total investment of $121.4 million. These properties were 96.1% occupied as of December 31, 2009, at a yield of 9.1%.
A joint venture in which the company holds a 25% interest brought into service a 225,000 square foot development property during the quarter. This property is 9.6% leased. The projected stabilized yield on the $12.0 million investment is 7.4%.
No development commenced during the quarter.
As of December 31, 2009, Liberty had 1.0 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $243.5 million, with an expected yield of 6.2%. The properties were 34.1% leased at December 31.
Acquisitions: Liberty acquired no properties during the quarter.
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 78 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,000 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.
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Liberty Property Trust Fourth Quarter 2009 Earnings -3-
Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, February 9, 2010, at 1 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: 51828607. The call can also be accessed via the Internet on the Investors page of Liberty’s web site at www.libertyproperty.com for two weeks 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
December 31, 2009
(In thousands, except per share amounts)
                                 
    Quarter Ended     Year Ended  
    December 31, 2009     December 31, 2008     December 31, 2009     December 31, 2008  
    (Unaudited)              
Operating Revenue
                               
Rental
  $ 131,842     $ 128,649     $ 519,928     $ 507,698  
Operating expense reimbursement
    55,735       56,117       224,329       223,654  
 
                       
Total operating revenue
    187,577       184,766       744,257       731,352  
 
                       
 
                               
Operating Expenses
                               
Rental property
    40,191       39,101       149,968       149,170  
Real estate taxes
    20,007       19,682       86,676       83,762  
General and administrative
    12,792       14,133       51,250       54,467  
Depreciation and amortization
    42,801       41,757       170,764       169,190  
 
                       
Total operating expenses
    115,791       114,673       458,658       456,589  
 
                       
 
Operating Income
    71,786       70,093       285,599       274,763  
 
                               
Other Income/Expense
                               
Interest and other
    3,259       4,053       11,503       13,440  
Debt extinguishment gain
          2,521       1,547       2,521  
Interest
    (38,283 )     (37,844 )     (149,569 )     (152,896 )
 
                       
Total other income/expense
    (35,024 )     (31,270 )     (136,519 )     (136,935 )
 
                       
 
                               
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures
    36,762       38,823       149,080       137,828  
Gain on property dispositions
    626       8,633       1,687       10,572  
Income taxes
    (64 )     (273 )     (494 )     (1,645 )
Equity in earnings of unconsolidated joint ventures
    37       948       2,161       2,805  
Impairment charges — investment in unconsolidated joint ventures and other
    (79,247 )           (82,552 )      
— goodwill
    (15,700 )           (15,700 )      
 
                       
 
                               
Income from continuing operations
    (57,586 )     48,131       54,182       149,560  
 
                               
Discontinued operations (including net gain on property dispositions of $8,859 and $9,884 for the quarters ended December 31, 2009 and 2008 and $17,859 and $23,519 for the years ended December 31, 2009 and 2008)
    8,780       11,248       24,810       30,546  
 
                       
Net Income
    (48,806 )     59,379       78,992       180,106  
Noncontrolling interest — operating partnerships
    (3,393 )     (7,396 )     (23,125 )     (27,681 )
Noncontrolling interest — consolidated joint ventures
    112       (185 )     509       (483 )
 
                       
Net Income available to common shareholders
  $ (52,087 )   $ 51,798     $ 56,376     $ 151,942  
 
                       
 
                               
Basic income per common share
                               
Continuing operations
  $ (0.54 )   $ 0.42     $ 0.30     $ 1.31  
 
                       
Discontinued operations
  $ 0.08     $ 0.11     $ 0.22     $ 0.31  
 
                       
Total basic income per common share
  $ (0.46 )   $ 0.53     $ 0.52     $ 1.62  
 
                       
 
                               
Diluted income per common share
                               
Continuing operations
  $ (0.54 )   $ 0.42     $ 0.30     $ 1.31  
 
                       
Discontinued operations
  $ 0.08     $ 0.11     $ 0.22     $ 0.31  
 
                       
Total diluted income per common share
  $ (0.46 )   $ 0.53     $ 0.52     $ 1.62  
 
                       
 
                               
Weighted average shares
                               
Basic
    112,159       97,434       107,550       93,615  
 
                       
Diluted
    112,722       97,493       108,002       93,804  
 
                       
 
                               
Amounts attributable to common shareholders
                               
Income from continuing operations
  $ (60,565 )   $ 40,995     $ 32,444     $ 122,688  
Discontinued operations
    8,478       10,803       23,932       29,254  
 
                       
Net income
  $ (52,087 )   $ 51,798     $ 56,376     $ 151,942  
 
                       

 

 


 

Liberty Property Trust
Statement of Funds From Operations
December 31, 2009
(Unaudited and in thousands, except per share amounts)
                                                                 
    Quarter Ended     Year Ended  
    December 31, 2009     December 31, 2008     December 31, 2009     December 31, 2008  
            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
  $ (52,087 )   $ (0.46 )   $ 51,798     $ 0.53     $ 56,376     $ 0.52     $ 151,942     $ 1.62  
 
                                                       
 
                                                               
Adjustments:
                                                               
Depreciation and amortization of unconsolidated joint ventures
    4,067               4,027               16,180               16,235          
Depreciation and amortization
    42,206               42,597               170,633               173,400          
Gain on property dispositions
    (8,380 )             (19,662 )             (23,197 )             (34,336 )        
Minority interest share in addback for depreciation and amortization and gain on property dispositions
    (1,304 )             (1,068 )             (5,801 )             (6,606 )        
 
                                               
Funds from operations available to common shareholders — basic
  $ (15,498 )   $ (0.14 )   $ 77,692     $ 0.80     $ 214,191     $ 1.99     $ 300,635     $ 3.21  
 
                                               
 
                                                               
Reconciliation of net income to FFO — diluted:
                                                               
Diluted — income available to common shareholders
  $ (52,087 )   $ (0.46 )   $ 51,798     $ 0.53     $ 56,376     $ 0.52     $ 151,942     $ 1.62  
 
                                                       
 
                                                               
Adjustments:
                                                               
Depreciation and amortization of unconsolidated joint ventures
    4,067               4,027               16,180               16,235          
Depreciation and amortization
    42,206               42,597               170,633               173,400          
Gain on property dispositions
    (8,380 )             (19,662 )             (23,197 )             (34,336 )        
Minority interest excluding preferred unit distributions
    (1,860 )             2,143               2,114               6,669          
 
                                               
Funds from operations available to common shareholders — diluted
  $ (16,054 )   $ (0.14 )(1)   $ 80,903     $ 0.80     $ 222,106     $ 1.98 (1)   $ 313,910     $ 3.20  
 
                                               
 
                                                               
Reconciliation of weighted average shares:
                                                               
Weighted average common shares — all basic calculations
    112,159               97,434               107,550               93,615          
Dilutive shares for long term compensation plans
    563               59               452               189          
 
                                                       
Diluted shares for net income calculations
    112,722               97,493               108,002               93,804          
Weighted average common units
    4,016               4,189               4,018               4,190          
 
                                                       
Diluted shares for funds from operations calculations
    116,738               101,682               112,020               97,994          
 
                                                       
     
(1)   Excluding the $94.5 million non-cash impairment charge FFO for the quarter and year ended December 31, 2009 would have been $.67 and $2.83 per share, respectively.
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 REITs 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.

 

 


 

Liberty Property Trust
Balance Sheet
December 31, 2009
(In thousands, except share amounts)
                 
    December 31, 2009     December 31, 2008  
Assets
               
Real estate:
               
Land and land improvements
  $ 850,559     $ 801,763  
Building and improvements
    4,410,254       4,191,361  
Less: accumulated depreciation
    (1,093,946 )     (963,043 )
 
           
 
               
Operating real estate
    4,166,867       4,030,081  
 
               
Development in progress
    66,714       245,463  
Land held for development
    218,633       209,551  
 
           
 
               
Net real estate
    4,452,214       4,485,095  
 
               
Cash and cash equivalents
    237,446       15,794  
Restricted cash
    42,232       39,726  
Accounts receivable
    4,591       12,985  
Deferred rent receivable
    95,527       83,033  
Deferred financing and leasing costs, net of accumulated amortization (2009, $133,429; 2008, $139,078)
    134,309       132,627  
Investment in unconsolidated joint ventures
    175,584       266,602  
Assets held for sale
          98,706  
Prepaid expenses and other assets
    85,518       82,467  
 
           
 
               
Total assets
  $ 5,227,421     $ 5,217,035  
 
           
 
               
Liabilities
               
Mortgage loans
  $ 473,993     $ 198,560  
Unsecured notes
    1,842,882       2,131,607  
Credit facility
    140,000       260,000  
Accounts payable
    31,195       32,481  
Accrued interest
    31,251       36,474  
Dividend and distributions payable
    55,402       48,858  
Other liabilities
    169,529       182,549  
 
           
 
Total liabilities
    2,744,252       2,890,529  
 
           
 
               
Equity
               
Shareholders’ equity:
               
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 113,875,211 (includes 1,249,909 in treasury) and 100,034,404 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2009 and 2008, respectively
    114       101  
Additional paid-in capital
    2,469,570       2,162,820  
Accumulated other comprehensive income
    2,339       (5,378 )
Distributions in excess of net income
    (337,911 )     (185,721 )
Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2009 and 2008
    (51,951 )     (51,951 )
 
           
Total shareholders’ equity
    2,082,161       1,919,871  
 
               
Noncontrolling interest — operating partnership
               
4,011,354 and 4,074,967 common units outstanding as of December 31, 2009 and 2008, respectively
    112,428       117,546  
9,740,000 preferred units outstanding as of December 31, 2009 and 2008
    287,959       287,959  
Noncontrolling interest — consolidated joint ventures
    621       1,130  
 
           
 
               
Total equity
    2,483,169       2,326,506  
 
           
 
               
Total liabilities & equity
  $ 5,227,421     $ 5,217,035