EX-99.1 2 a12-24659_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

Inquiries:

Jeanne A. Leonard

 

 

Liberty Property Trust

 

 

610/648-1704

 

LIBERTY PROPERTY TRUST ANNOUNCES THIRD QUARTER RESULTS

 

Malvern, PA, October 23, 2012 — Liberty Property Trust (NYSE:LRY) reported that funds from operations available to common shareholders (diluted) (“FFO”) for the third quarter of 2012 was $0.64 per share, compared to $0.64 per share for the same period in 2011. Funds from operations for the third quarter of 2012 include lease termination fees of $0.9 million.

 

FFO per share for the nine-month period ended September 30, 2012 was $1.94, compared to $1.98 per share for the same period in 2011.

 

Net income per common share (diluted) was $0.24 per share for the quarter ended September 30, 2012, compared to $0.31 per share for the quarter ended September 30, 2011. Net income for the nine-month period ended September 30, 2012 was $0.84 per share, compared with $1.29 per share for the same period in 2011. Net income per common share (diluted) for the nine months ended September 30, 2012 and September 30, 2011 includes net gains on property dispositions of $5.4 million ($0.05 per share) and $58.1 million ($0.50 per share), respectively.

 

“The economy continues to improve at a very slow pace, resulting in occupancy gains in the industrial portfolio offset by decreases in rental rates on signed leases in certain office markets,” said Bill Hankowsky, chairman and chief executive officer. “As far as external growth is concerned, we continue to see solid demand for high-quality industrial space from large corporate users and build-to suit opportunities for both industrial and office users. Our growing development pipeline is now delivering new product into service at solid returns.”

 

Portfolio Performance

 

Leasing: At September 30, 2012, Liberty’s in-service portfolio of 78 million square feet was 91.8% occupied, compared to 90.7% at the end of the second quarter. During the third quarter, Liberty completed lease transactions totaling 3.8 million square feet of space.

 

Same Store Performance: Property level operating income for same store properties increased by 0.3% on a cash basis and decreased by 0.3% on a straight line basis for the third quarter of 2012 compared to the same quarter in 2011.

 

Portfolio Activity

 

Development: Liberty brought into service two development properties representing a total investment of $15.7 million. These two build-to-suit developments total 282,000 square feet and were completed at current yield of 8.6%.

 

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Liberty Property Trust

Third Quarter 2012 Earnings

 

Liberty commenced development of three properties totaling 530,000 square feet at a projected investment of $55.5 million. The new development properties include a 100% pre-leased, 139,000 square foot office building in Phoenix, AZ, and two industrial distribution buildings in Houston, TX and Rogers, MN totaling 391,000 square feet which are being developed for inventory.

 

Acquisitions: Liberty purchased one distribution building totaling 232,000 square feet in Phoenix, AZ for $6.4 million. The property was 18% leased at purchase with an in-place yield of 3.2%. Liberty has subsequently leased an additional 20% of the property, and will also be commencing a significant renovation to provide cross-docking capabilities and truck storage. The expected stabilized yield is 8.3%.

 

Dispositions: During the quarter, Liberty sold 49 acres of land for $2.7 million

 

Balance Sheet and Capital Management

 

During the quarter, Liberty repaid its 6.375% Senior Notes due August 2012 in the amount of $230.1 million.

 

Earnings Outlook

 

Liberty expects to report funds from operations for the fourth quarter of 2012 in the range of $0.62 - $0.64, and for the full year 2012 in the range of $2.57 - $2.59 share. Guidance assumes that $167 million in acquisitions will be completed in the fourth quarter. A reconciliation of FFO to GAAP net income for the respective periods is below:

 

 

 

4Q 2012 Range

 

FY 2012 Range

 

 

 

Low

 

High

 

Low

 

High

 

Projected net income per share

 

$

0.35

 

$

0.36

 

$

1.19

 

$

1.20

 

Depreciation and amortization of unconsolidated joint ventures

 

0.03

 

0.03

 

0.12

 

0.13

 

Depreciation and amortization

 

0.34

 

0.35

 

1.39

 

1.40

 

Gain on property dispositions

 

(0.09

)

(0.09

)

(0.09

)

(0.10

)

Minority interest share of addbacks

 

(0.01

)

(0.01

)

(0.04

)

(0.04

)

 

 

 

 

 

 

 

 

 

 

Projected funds from operations per share

 

$

0.62

 

$

0.64

 

$

2.57

 

$

2.59

 

 

Earnings Guidance for 2013 will be provided on December 11, 2012.

 

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 consists of 650 properties providing office, distribution and light manufacturing facilities to 1,800 tenants.

 

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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 third quarter results on Tuesday, October 23, 2012, at 1 p.m. Eastern Time.  To access the conference call, please dial 1-888-870-2815. The passcode needed for access is 36148768. A replay of the call will be available until November 23, 2012, by dialing 1-855-859-2056 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.

 

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

September 30, 2012

(Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

 

 

 

Rental

 

$

119,334

 

$

115,760

 

$

357,126

 

$

345,882

 

Operating expense reimbursement

 

52,392

 

49,432

 

152,200

 

148,655

 

Total operating revenue

 

171,726

 

165,192

 

509,326

 

494,537

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Rental property

 

34,635

 

31,876

 

95,926

 

91,657

 

Real estate taxes

 

20,292

 

19,755

 

61,452

 

58,646

 

General and administrative

 

14,621

 

13,617

 

46,444

 

42,819

 

Depreciation and amortization

 

40,929

 

38,922

 

122,705

 

116,247

 

Total operating expenses

 

110,477

 

104,170

 

326,527

 

309,369

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

61,249

 

61,022

 

182,799

 

185,168

 

 

 

 

 

 

 

 

 

 

 

Other Income/Expense

 

 

 

 

 

 

 

 

 

Interest and other

 

2,642

 

1,989

 

7,969

 

6,918

 

Interest

 

(30,704

)

(29,173

)

(89,892

)

(90,198

)

Total other income/expense

 

(28,062

)

(27,184

)

(81,923

)

(83,280

)

 

 

 

 

 

 

 

 

 

 

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

 

33,187

 

33,838

 

100,876

 

101,888

 

Gain on property dispositions

 

2,001

 

1,898

 

2,859

 

3,361

 

Income taxes

 

(321

)

(356

)

(645

)

(969

)

Equity in (loss) earnings of unconsolidated joint ventures

 

(3,082

)

827

 

(1,397

)

2,470

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

31,785

 

36,207

 

101,693

 

106,750

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations (including net loss on property dispositions of $1,540 for the quarter ended September 30, 2012 and net gain of $4,095 for the quarter ended September 30, 2011 and net gain of $2,505 and $54,722 for the nine month periods ended September 30, 2012 and 2011)

 

(1,887

)

5,474

 

5,487

 

62,715

 

Net Income

 

29,898

 

41,681

 

107,180

 

169,465

 

Noncontrolling interest - operating partnerships

 

(2,092

)

(6,414

)

(8,174

)

(20,769

)

Noncontrolling interest - consolidated joint ventures

 

 

53

 

 

511

 

Net Income available to common shareholders

 

$

27,806

 

$

35,320

 

$

99,006

 

$

149,207

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

29,898

 

$

41,681

 

$

107,180

 

$

169,465

 

Other comprehensive income (loss)

 

2,245

 

(2,247

)

3,047

 

(64

)

Comprehensive income

 

32,143

 

39,434

 

110,227

 

169,401

 

Less: comprehensive income attributable to noncontrolling interest

 

(2,161

)

(6,342

)

(8,269

)

(20,769

)

Comprehensive income attributable to common shareholders

 

$

29,982

 

$

33,092

 

$

101,958

 

$

148,632

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.26

 

$

0.26

 

$

0.80

 

$

0.77

 

Discontinued operations

 

$

(0.02

)

$

0.05

 

$

0.05

 

$

0.53

 

Total basic income per common share

 

$

0.24

 

$

0.31

 

$

0.85

 

$

1.30

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.26

 

$

0.26

 

$

0.79

 

$

0.76

 

Discontinued operations

 

$

(0.02

)

$

0.05

 

$

0.05

 

$

0.53

 

Total diluted income per common share

 

$

0.24

 

$

0.31

 

$

0.84

 

$

1.29

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

 

 

 

 

Basic

 

117,141

 

115,014

 

116,625

 

114,547

 

Diluted

 

118,043

 

115,780

 

117,462

 

115,329

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to common shareholders

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

29,635

 

$

30,021

 

$

93,689

 

$

88,537

 

Discontinued operations

 

(1,829

)

5,299

 

5,317

 

60,670

 

Net income

 

$

27,806

 

$

35,320

 

$

99,006

 

$

149,207

 

 



 

Liberty Property Trust

Statement of Funds From Operations

September 30, 2012

(Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

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

 

$

27,806

 

$

0.24

 

$

35,320

 

$

0.31

 

$

99,006

 

$

0.85

 

$

149,207

 

$

1.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,569

 

 

 

3,585

 

 

 

10,739

 

 

 

10,903

 

 

 

Depreciation and amortization

 

40,631

 

 

 

41,147

 

 

 

122,097

 

 

 

126,312

 

 

 

Gain on property dispositions/impairment

 

4,759

 

 

 

(4,090

)

 

 

676

 

 

 

(55,132

)

 

 

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

 

(1,504

)

 

 

(1,296

)

 

 

(4,141

)

 

 

(2,668

)

 

 

Funds from operations available to common shareholders - basic

 

$

75,261

 

$

0.64

 

$

74,666

 

$

0.65

 

$

228,377

 

$

1.96

 

$

228,622

 

$

2.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to FFO - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted - income available to common shareholders

 

$

27,806

 

$

0.24

 

$

35,320

 

$

0.31

 

$

99,006

 

$

0.84

 

$

149,207

 

$

1.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,569

 

 

 

3,585

 

 

 

10,739

 

 

 

10,903

 

 

 

Depreciation and amortization

 

40,631

 

 

 

41,147

 

 

 

122,097

 

 

 

126,312

 

 

 

Gain on property dispositions/impairment

 

4,759

 

 

 

(4,090

)

 

 

676

 

 

 

(55,132

)

 

 

Noncontrolling interest excluding preferred unit distributions

 

881

 

 

 

1,161

 

 

 

3,173

 

 

 

5,010

 

 

 

Funds from operations available to common shareholders - diluted

 

$

77,646

 

$

0.64

 

$

77,123

 

$

0.64

 

$

235,691

 

$

1.94

 

$

236,300

 

$

1.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - all basic calculations

 

117,141

 

 

 

115,014

 

 

 

116,625

 

 

 

114,547

 

 

 

Dilutive shares for long term compensation plans

 

902

 

 

 

766

 

 

 

837

 

 

 

782

 

 

 

Diluted shares for net income calculations

 

118,043

 

 

 

115,780

 

 

 

117,462

 

 

 

115,329

 

 

 

Weighted average common units

 

3,739

 

 

 

3,816

 

 

 

3,771

 

 

 

3,890

 

 

 

Diluted shares for Funds from operations calculations

 

121,782

 

 

 

119,596

 

 

 

121,233

 

 

 

119,219

 

 

 

 

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

September 30, 2012

(In thousands, except share and unit amounts)

 

 

 

September 30, 2012

 

December 31, 2011

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Real estate:

 

 

 

 

 

Land and land improvements

 

$

865,657

 

$

852,785

 

Building and improvements

 

4,156,848

 

4,092,056

 

Less: accumulated depreciation

 

(1,135,002

)

(1,047,336

)

 

 

 

 

 

 

Operating real estate

 

3,887,503

 

3,897,505

 

 

 

 

 

 

 

Development in progress

 

249,129

 

88,848

 

Land held for development

 

227,469

 

219,375

 

 

 

 

 

 

 

Net real estate

 

4,364,101

 

4,205,728

 

 

 

 

 

 

 

Cash and cash equivalents

 

34,069

 

18,204

 

Restricted cash

 

37,972

 

63,659

 

Accounts receivable

 

6,965

 

8,192

 

Deferred rent receivable

 

107,813

 

102,613

 

Deferred financing and leasing costs, net of accumulated amortization (2012, $131,604; 2011, $123,557)

 

130,761

 

129,614

 

Investments in and advances to unconsolidated joint ventures

 

169,507

 

174,687

 

Assets held for sale

 

8,671

 

210,790

 

Prepaid expenses and other assets

 

96,506

 

76,186

 

 

 

 

 

 

 

Total assets

 

$

4,956,365

 

$

4,989,673

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Mortgage loans

 

$

290,197

 

$

290,819

 

Unsecured notes

 

1,962,543

 

1,792,643

 

Credit facility

 

150,000

 

139,400

 

Accounts payable

 

58,804

 

23,418

 

Accrued interest

 

36,177

 

24,147

 

Dividend and distributions payable

 

58,869

 

56,958

 

Other liabilities

 

173,758

 

194,995

 

 

 

 

 

 

 

Total liabilities

 

2,730,348

 

2,522,380

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of September 30, 2012 and December 31, 2011

 

7,537

 

7,537

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 119,146,729 (includes 1,249,909 in treasury) and 117,352,353 (includes 1,249,909 in treasury) shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively

 

119

 

117

 

Additional paid-in capital

 

2,669,676

 

2,617,355

 

Accumulated other comprehensive income (loss)

 

2,523

 

(429

)

Distributions in excess of net income

 

(529,913

)

(461,498

)

Common shares in treasury, at cost, 1,249,909 shares as of September 30, 2012 and December 31, 2011

 

(51,951

)

(51,951

)

Total shareholders’ equity

 

2,090,454

 

2,103,594

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership

 

 

 

 

 

3,736,746 and 3,808,746 common units outstanding as of September 30, 2012 and December 31, 2011, respectively

 

60,987

 

64,428

 

1,290,000 and 9,740,000 preferred units outstanding as of September 30, 2012 and December 31, 2011, respectively

 

63,264

 

287,959

 

Noncontrolling interest - consolidated joint ventures

 

3,775

 

3,775

 

 

 

 

 

 

 

Total equity

 

2,218,480

 

2,459,756

 

 

 

 

 

 

 

Total liabilities, noncontrolling interest - operating partnership & equity

 

$

4,956,365

 

$

4,989,673