EX-99.1 2 a11-21714_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

Inquiries:

Jeanne A. Leonard

 

 

Liberty Property Trust

 

 

610/648-1704

 

 

LIBERTY PROPERTY TRUST ANNOUNCES SECOND QUARTER RESULTS

 

Malvern, PA, July 26, 2011 -- Liberty Property Trust (NYSE:LRY) reported that funds from operations available to common shareholders (diluted) (“FFO”) for the second quarter of 2011 was $0.65 per share, compared to $0.67 per share for the same period in 2010. FFO for the second quarter of 2011 included a $4.2 million, non-cash impairment charge. Excluding this impairment charge, FFO for the second quarter would be $0.69 per share. Funds from operations for the second quarter of 2011 include lease termination fees of $1.6 million.

 

FFO per share for the six-month period ended June 30, 2011 was $1.30, compared to $1.31 per share for the same period in 2010.

 

Net income per common share (diluted) was $0.74 per share for the quarter ended June 30, 2011, compared to $0.29 per share (diluted) for the quarter ended June 30, 2010. Net income for the six-month period ended June 30, 2011 was $0.99 per share, compared with $0.56 per share for the same period in 2010.   Net income for the three months ended June 30, 2011 and 2010 includes net gains on property dispositions of $50.5 million ($0.44 per share) and $4.7 million ($0.04 per share). Net income for the six months ended June 30, 2011 and 2010 includes net gains on property dispositions of $52.1 million ($0.45 per share) and $8.3 million ($0.07 per share).

 

“Liberty had a remarkably productive second quarter, and we’ve continued that momentum in the third quarter,” said Bill Hankowsky, chairman and chief executive officer. “We have made significant progress in our transaction plan for 2011, we are planting seeds of future growth through development and value-add acquisition opportunities, and we are seeing signs of increasing demand in our markets.”

 

Portfolio Performance

 

Leasing: At June 30, 2011 Liberty’s in-service portfolio of 77 million square feet was 89.5% occupied, compared to 88.7% at the end of the first quarter. During the second quarter, Liberty completed lease transactions totaling 3.4 million square feet of space.

 

Same Store Performance: Property level operating income for same store properties increased by 2.8% on a cash basis and increased by 0.9% on a straight line basis for the second quarter of 2011 compared to the same quarter in 2010. Included in rental property operating expense is a $1.5 million credit resulting from a reduction in the allowance for doubtful accounts.

 

 

-more-

 


 

Liberty Property Trust

Second Quarter 2011 Earnings

 

 

Portfolio Activity

 

During the second quarter and subsequently in the third quarter, Liberty furthered the execution of its portfolio repositioning strategy through property sales and acquisitions.

 

Dispositions: During the quarter, Liberty sold 51 operating properties, containing 3.1 million square feet, for $266.0 million. The properties sold included: 32 office and high-finish flex properties in Lehigh Valley, Pennsylvania totaling 1.4 million square feet; 14 office and flex properties in Richmond, Virginia totaling 919,000 square feet; a 552,000 square foot distribution building in Sturtevant, Wisconsin; a 29,000 square foot office building in Milwaukee, Wisconsin; a 62,000 square foot office building in Mt. Laurel, New Jersey; a 32,000 square foot flex building in Tampa, Florida; and a 35,000 square foot office building in Horsham, Pennsylvania.

 

In addition, a joint venture in which Liberty holds a 25% interest sold a 231,000 square foot industrial property in Bridgeport, New Jersey, for $8.4 million; a joint venture in which Liberty holds a 20% interest sold a 22,000 square foot office property in Solihull, United Kingdom for $7.5 million; and a joint venture in which Liberty holds a 50% interest sold five acres of land in Manchester, United Kingdom for $9.6 million.

 

Acquisitions: Liberty acquired two properties during the quarter for a total investment, including purchase price, transaction costs and projected leasing costs and improvements, of $41.1 million. The projected stabilized yield on these two properties is 8.0%.

 

The two properties acquired consist of a fully leased, 179,000 square foot multi-tenant industrial building in Charlotte, North Carolina, and a 535,000 square foot distribution building in Lehigh Valley, Pennsylvania. The Lehigh Valley property was empty at purchase, but Liberty has subsequently signed two leases which will bring this property to 100% occupancy. One lease, for 197,500 square feet, will commence on September 1, 2011, the other, for the balance of the building, will commence on January 1, 2012.

 

Development: Liberty commenced no new development during the second quarter.

 

Subsequent Events

 

On July 1, 2011, Liberty purchased two industrial properties containing 1.2 million square feet in Elwood, Illinois for a total investment, including purchase price, transaction costs and projected leasing costs and improvements, of $59.4 million. The properties were 36% leased at purchase, but subsequently, Liberty has leased an additional 211,523 square feet of space.

 

On July 22, 2011, Liberty sold four office properties in Milwaukee, Wisconsin, containing 338,000 square feet, for $41 million.

 

 

-more-

 


 

Liberty Property Trust

Second Quarter 2011 Earnings

 

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 77 million square foot portfolio includes nearly 700 properties which provide office, distribution and light manufacturing facilities to 1,900 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 26, 2011, at 12:00 noon 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.  The passcode needed to access the call is 84152957. 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, using the same passcode as above. 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.

 

 

-more-

 


 

Liberty Property Trust

Statement of Operations

June 30, 2011

(Unaudited and in thousands, except per share amounts)

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30, 2011

 

June 30, 2010

 

June 30, 2011

 

June 30, 2010

 

Operating Revenue

 

 

 

 

 

 

 

 

 

Rental

 

  $

123,064

 

  $

122,065

 

  $

244,429

 

  $

243,626

 

Operating expense reimbursement

 

51,845

 

50,579

 

107,019

 

104,816

 

Total operating revenue

 

174,909

 

172,644

 

351,448

 

348,442

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Rental property

 

31,568

 

31,452

 

66,689

 

68,077

 

Real estate taxes

 

20,908

 

21,065

 

41,687

 

42,174

 

General and administrative

 

13,261

 

12,548

 

29,224

 

27,415

 

Depreciation and amortization

 

41,303

 

39,719

 

83,102

 

79,769

 

Total operating expenses

 

107,040

 

104,784

 

220,702

 

217,435

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

67,869

 

67,860

 

130,746

 

131,007

 

 

 

 

 

 

 

 

 

 

 

Other Income/Expense

 

 

 

 

 

 

 

 

 

Interest and other

 

2,381

 

2,646

 

5,013

 

5,391

 

Interest

 

(31,231) 

 

(36,410) 

 

(65,830) 

 

(72,185

)

Total other income/expense

 

(28,850) 

 

(33,764) 

 

(60,817) 

 

(66,794

)

 

 

 

 

 

 

 

 

 

 

Income before property dispositions, income taxes, noncontrolling interest and equity in earnings of unconsolidated joint ventures

 

39,019

 

34,096

 

69,929

 

64,213

 

Gain on property dispositions

 

302

 

2,242

 

1,463

 

3,010

 

Income taxes

 

(63) 

 

(503) 

 

(613) 

 

(955

)

Equity in earnings of unconsolidated joint ventures

 

1,109

 

783

 

1,643

 

1,177

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

40,367

 

36,618

 

72,422

 

67,445

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations (including net gain on property dispositions of $50,157 and $2,408 for the quarters ended June 30, 2011 and 2010 and $50,627 and $5,270 for the six month periods ended June 30, 2011 and 2010)

 

52,474

 

3,396

 

55,362

 

8,391

 

Net Income

 

92,841

 

40,014

 

127,784

 

75,836

 

Noncontrolling interest - operating partnerships

 

(8,120) 

 

(6,421) 

 

(14,355) 

 

(12,704

)

Noncontrolling interest - consolidated joint ventures

 

257

 

(148) 

 

458

 

(136

)

Net Income available to common shareholders

 

  $

84,978

 

  $

33,445

 

  $

113,887

 

  $

62,996

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

  $

0.30

 

  $

0.27

 

  $

0.53

 

  $

0.49

 

Discontinued operations

 

  $

0.44

 

  $

0.03

 

  $

0.47

 

  $

0.07

 

Total basic income per common share

 

  $

0.74

 

  $

0.30

 

  $

1.00

 

  $

0.56

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

  $

0.30

 

  $

0.26

 

  $

0.52

 

  $

0.49

 

Discontinued operations

 

  $

0.44

 

  $

0.03

 

  $

0.47

 

  $

0.07

 

Total diluted income per common share

 

  $

0.74

 

  $

0.29

 

  $

0.99

 

  $

0.56

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

 

 

 

 

Basic

 

114,623

 

112,644

 

114,285

 

112,512

 

Diluted

 

115,406

 

113,380

 

115,087

 

113,182

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to common shareholders

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

  $

34,221

 

  $

30,163

 

  $

60,346

 

  $

54,888

 

Discontinued operations

 

50,757

 

3,282

 

53,541

 

8,108

 

Net income

 

  $

84,978

 

  $

33,445

 

  $

113,887

 

  $

62,996

 

 


 

Liberty Property Trust

Statement of Funds From Operations

June 30, 2011

(Unaudited and in thousands, except per share amounts)

 

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 30, 2011

 

June 30, 2010

 

June 30, 2011

 

June 30, 2010

 

 

 

 

 

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

 

$

84,978

 

 

$

0.74

 

$

33,445

 

 

$

0.30

 

$

113,887

 

 

$

1.00

 

$

62,996

 

 

$

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,669

 

 

 

 

3,395

 

 

 

 

7,318

 

 

 

 

7,454

 

 

 

 

Depreciation and amortization

 

41,194

 

 

 

 

43,271

 

 

 

 

85,165

 

 

 

 

85,720

 

 

 

 

Gain on property dispositions

 

(54,695

)

 

 

 

(2,746

)

 

 

 

(55,714

)

 

 

 

(5,410

)

 

 

 

Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions

 

322

 

 

 

 

(1,476

)

 

 

 

(1,219

)

 

 

 

(2,954

)

 

 

 

Funds from operations available to common shareholders - basic

 

$

75,468

 

 

$

0.66

 

$

75,889

 

 

$

0.67

 

$

149,437

 

 

$

1.31

 

$

147,806

 

 

$

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to FFO - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted - income available to common shareholders

 

$

84,978

 

 

$

0.74

 

$

33,445

 

 

$

0.29

 

$

113,887

 

 

$

0.99

 

$

62,996

 

 

$

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,669

 

 

 

 

3,395

 

 

 

 

7,318

 

 

 

 

7,454

 

 

 

 

Depreciation and amortization

 

41,194

 

 

 

 

43,271

 

 

 

 

85,165

 

 

 

 

85,720

 

 

 

 

Gain on property dispositions

 

(54,695

)

 

 

 

(2,746

)

 

 

 

(55,714

)

 

 

 

(5,410

)

 

 

 

Noncontrolling interest excluding preferred unit distributions

 

2,867

 

 

 

 

1,168

 

 

 

 

3,849

 

 

 

 

2,198

 

 

 

 

Funds from operations available to common shareholders - diluted

 

$

78,013

 

 

$

0.65

 

$

78,533

 

 

$

0.67

 

$

154,505

 

 

$

1.30

 

$

152,958

 

 

$

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - all basic calculations

 

114,623

 

 

 

 

112,644

 

 

 

 

114,285

 

 

 

 

112,512

 

 

 

 

Dilutive shares for long term compensation plans

 

783

 

 

 

 

736

 

 

 

 

802

 

 

 

 

670

 

 

 

 

Diluted shares for net income calculations

 

115,406

 

 

 

 

113,380

 

 

 

 

115,087

 

 

 

 

113,182

 

 

 

 

Weighted average common units

 

3,926

 

 

 

 

3,943

 

 

 

 

3,927

 

 

 

 

3,952

 

 

 

 

Diluted shares for funds from operations calculations

 

119,332

 

 

 

 

117,323

 

 

 

 

119,014

 

 

 

 

117,134

 

 

 

 

 

 

 

 

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

June 30, 2011

(In thousands, except share amounts)

 

 

 

 

June 30, 2011

 

December 31, 2010

 

Assets

 

(unaudited)

 

 

 

 

Real estate:

 

 

 

 

 

 

 

Land and land improvements

 

$

838,730

 

 

$

833,827

 

 

Building and improvements

 

4,179,856

 

 

4,136,214

 

 

Less: accumulated depreciation

 

(1,070,428

)

 

(1,001,737

)

 

 

 

 

 

 

 

 

 

Operating real estate

 

3,948,158

 

 

3,968,304

 

 

 

 

 

 

 

 

 

 

Development in progress

 

11,829

 

 

-

 

 

Land held for development

 

210,605

 

 

209,253

 

 

 

 

 

 

 

 

 

 

Net real estate

 

4,170,592

 

 

4,177,557

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

49,895

 

 

108,409

 

 

Restricted cash

 

50,151

 

 

49,526

 

 

Accounts receivable

 

7,750

 

 

6,898

 

 

Deferred rent receivable

 

106,851

 

 

103,336

 

 

Deferred financing and leasing costs, net of accumulated amortization (2011, $120,290; 2010, $115,118)

 

131,047

 

 

134,419

 

 

Investments in and advances to unconsolidated joint ventures

 

175,472

 

 

171,916

 

 

Assets held for sale

 

41,533

 

 

239,113

 

 

Prepaid expenses and other assets

 

113,080

 

 

73,625

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,846,371

 

 

$

5,064,799

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Mortgage loans

 

$

293,702

 

 

$

320,679

 

 

Unsecured notes

 

1,792,643

 

 

2,039,143

 

 

Credit facility

 

33,000

 

 

-

 

 

Accounts payable

 

28,595

 

 

23,652

 

 

Accrued interest

 

24,375

 

 

29,821

 

 

Dividend and distributions payable

 

56,632

 

 

56,149

 

 

Other liabilities

 

141,959

 

 

156,803

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

2,370,906

 

 

2,626,247

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 116,575,289 (includes 1,249,909 in treasury) and 115,530,608 (includes 1,249,909 in treasury) shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively

 

117

 

 

116

 

 

Additional paid-in capital

 

2,591,408

 

 

2,560,193

 

 

Accumulated other comprehensive income (loss)

 

1,956

 

 

(155

)

 

Distributions in excess of net income

 

(421,507

)

 

(426,017

)

 

Common shares in treasury, at cost, 1,249,909 shares as of June 30, 2011 and December 31, 2010

 

(51,951

)

 

(51,951

)

 

Total shareholders’ equity

 

2,120,023

 

 

2,082,186

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership
3,902,065 and 3,928,733 common units outstanding as of June 30, 2011 and December 31, 2010, respectively
9,740,000 preferred units outstanding as of June 30, 2011 and December 31, 2010

 

67,155
287,959

 

 

67,621
287,959

 

 

Noncontrolling interest - consolidated joint ventures

 

328

 

 

786

 

 

 

 

 

 

 

 

 

 

Total equity

 

2,475,465

 

 

2,438,552

 

 

 

 

 

 

 

 

 

 

Total liabilities & equity

 

$

4,846,371

 

 

$

5,064,799