EX-99.1 2 a15-3587_1ex99d1.htm EX-99.1

Exhibit 99.1

 

News Release

 

Inquiries: Jeanne Leonard, Liberty Property Trust, 610.648.1704

 

Liberty Property Trust Announces Fourth Quarter and Full Year Results

 

Malvern, PA, February 3, 2015 - Liberty Property Trust reported that funds from operations available to common shareholders (diluted) (“FFO”) for the fourth quarter of 2014 was $0.67 per share, compared to $0.63 per share for the fourth quarter of 2013.

 

For the year ended December 31, 2014, FFO per share was $2.48, which included acquisition expenses of $0.005 per share. This compares to FFO of $2.49 per share for 2013, which included acquisition expenses of $0.08 per share.

 

Net income per common share (diluted) was $0.55 per share for the quarter ended December 31, 2014, compared to $0.48 per share (diluted) for the quarter ended December 31, 2013.  Net income for the full year 2014 was $1.47 per common share (diluted), compared with $1.60 per share (diluted) for 2013. Net income for 2014 reflects gain on sale of $0.62 per share, compared with $0.73 per share for 2013.

 

“Real estate markets continue to perform well, capping a strong 2014 performance. Our portfolio clearly benefited from the positive trends, exhibiting solid occupancy gains and rent increases in the fourth quarter,” said Bill Hankowsky, chairman and chief executive officer. “We also continue to see solid opportunities for value creation, as evidenced by the growth in the development pipeline this quarter.”

 

Portfolio Performance

 

Occupancy: At December 31, 2014, Liberty’s in-service portfolio of 106 million square feet was 93.0% occupied, compared to 92.3% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 5.3 million square feet of space. Liberty leased 25.0 million square feet in 2014.

 

Same Store Performance: Property level operating income for same store properties decreased by 0.7% on a cash basis and by 0.8% on a straight line basis for the fourth quarter of 2014 compared to the same quarter in 2013 and decreased by 1.0% on both a cash and straight line basis for the full year 2014 compared to 2013.

 

- more -

 

1


 

Real Estate Investments

 

Development Deliveries: In the fourth quarter, Liberty brought into service two wholly-owned distribution development properties for a total investment of $55.2 million. The properties contain 956,000 square feet of leasable space and were 100% leased as of December 31, 2014. The current yield on these properties is 8.2%.

 

A joint venture in which Liberty holds a 25% interest brought into service one distribution property for a total investment of $15.8 million. The property contains 203,000 square feet and is 100% leased at a current yield of 8.8%.

 

Development Starts: During the quarter, Liberty began development of five properties for a projected investment of $98.3 million.  The properties consist of:

 

·                  11150 NW 122nd Street, Medley, FL, a 140,400 square foot distribution facility, 100% pre-leased

·                  1720 W. Rio Salado Parkway, Tempe, AZ, a 92,000 square foot office building, 100% pre-leased

·                  4701 League Island Boulevard, Philadelphia, PA, a 75,777 square foot flex building, 100% pre-leased

·                  130 Caliber Ridge Drive, Greer, SC, a 156,000 square foot distribution building

·                  1200 Intrepid Avenue, Philadelphia, PA, a 93,572 square foot office building

 

In addition to wholly-owned starts, a joint venture in which the company holds a 50% interest began development of two properties containing 369,000 square feet for a projected investment of $20.5 million. The properties consist of:

 

·                  10670 Central Port Drive, Orlando, FL, a 196,302 square foot distribution building, 73% pre-leased

·                  2307 Tradeport Drive, Orlando, FL, a 173,000 square foot distribution building

 

Acquisitions: During the quarter, Liberty acquired one operating property for $27.3 million. 1920 West Baseline Road is a 374,000 square foot distribution building in Rialto, CA. The property is currently vacant.

 

Real Estate Dispositions

 

During the fourth quarter, Liberty sold 13 properties, containing 1.5 million square feet of leasable space, for $201.2 million. The properties were 97.5% leased at the time of the sale and consist of five multi-tenant industrial buildings in Houston, TX; four office properties at Maitland Center in Orlando, FL; an office property in Minneapolis, MN; two office buildings in Horsham, PA; and a distribution building in Philadelphia, PA.

 

2


 

Subsequent Events

 

Comcast Corporation has notified Liberty that it intends to exercise its right to lease the entirety of the office space in the Comcast Innovation and Technology Center being developed in Philadelphia.  Comcast had previously committed to lease approximately 74% of the office space in the building, but has rights to expand its lease to include all of the office space.  Liberty and Comcast are working together to document this expansion of the Comcast lease.

 

Comcast Innovation & Technology Center is a 59-story tower in center city Philadelphia. It is currently under construction and will be completed in the first quarter of 2018. Owned by a joint venture between Comcast Corporation and Liberty Property Trust and developed by Liberty, it will include 1.3 million square feet of office space and a 222-room Four Seasons Hotel.

 

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 106 million square foot portfolio includes more than 750 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 fourth quarter results, on Tuesday, February 3, 2015, at 1 p.m. Eastern Time.  To access the conference call, please dial 855-277-7530. The passcode needed for access is 70954560. A replay of the call will be available until March 3, 2015, 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.  These forward-looking statements include statements relating to, among others things, future asset dispositions, expectations for our operating results, business and financial condition, business and our growth prospects, as well as statements that are generally accompanied by words such as “believes,” “anticipates,” “expects,” “estimates,” “should,” “seeks,”

 

3


 

“intends,” “proposed,” “planned,” “outlook” and “goal” or similar expressions. 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 risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate business generally (such as entry into new leases, renewals of leases and dependence on tenants’ business operations), risks relating to the integration of the operations of entities that we have acquired or may acquire, risks relating to financing arrangements and sales of securities, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the company and sensitivity of the company’s operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the company’s properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, risks relating to litigation, including without limitation litigation involving entities that we have a acquired or may acquire, and the potential adverse impact of market interest rates on the market price for the company’s securities, 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.

 

# # #

 

4


 

Liberty Property Trust

Statement of Operations

December 31, 2014

 (Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31, 2014

 

December 31, 2013

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue

 

 

 

 

 

 

 

 

 

Rental

 

$

146,726

 

$

136,148

 

$

568,346

 

$

458,081

 

Operating expense reimbursement

 

56,959

 

56,279

 

224,285

 

187,849

 

Total operating revenue

 

203,685

 

192,427

 

792,631

 

645,930

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Rental property

 

34,397

 

35,074

 

138,124

 

114,617

 

Real estate taxes

 

26,002

 

24,126

 

101,814

 

79,918

 

General and administrative

 

15,250

 

21,098

 

63,327

 

74,564

 

Depreciation and amortization

 

58,759

 

59,878

 

231,943

 

173,784

 

Total operating expenses

 

134,408

 

140,176

 

535,208

 

442,883

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

69,277

 

52,251

 

257,423

 

203,047

 

 

 

 

 

 

 

 

 

 

 

Other Income/Expense

 

 

 

 

 

 

 

 

 

Interest and other

 

5,883

 

4,286

 

17,669

 

18,555

 

Interest

 

(36,252

)

(37,701

)

(151,887

)

(127,115

)

Total other income/expense

 

(30,369

)

(33,415

)

(134,218

)

(108,560

)

 

 

 

 

 

 

 

 

 

 

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

 

38,908

 

18,836

 

123,205

 

94,487

 

Gain on property dispositions

 

43,152

 

—

 

45,030

 

—

 

Income taxes

 

(884

)

(1,019

)

(2,967

)

(2,799

)

Equity in earnings of unconsolidated joint ventures

 

3,017

 

2,094

 

10,314

 

6,067

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

84,193

 

19,911

 

175,582

 

97,755

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations (including net gains on property dispositions of $339 and $46,017 for the quarters ended December 31, 2014 and 2013, respectively and $46,631 and $95,384 for the years ended December 31, 2014 and 2013, respectively)

 

306

 

51,832

 

48,581

 

121,839

 

Net Income

 

84,499

 

71,743

 

224,163

 

219,594

 

Noncontrolling interest - operating partnerships

 

(2,088

)

(1,809

)

(5,706

)

(9,203

)

Noncontrolling interest - consolidated joint ventures

 

(73

)

(247

)

(547

)

(653

)

Net Income available to common shareholders

 

$

82,338

 

$

69,687

 

$

217,910

 

$

209,738

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

84,499

 

$

71,743

 

$

224,163

 

$

219,594

 

Other comprehensive (loss) income - foreign currency translation

 

(9,226

)

5,282

 

(14,415

)

5,397

 

Other comprehensive (loss) income - change in net unrealized gain on derivative instruments

 

(971

)

1,584

 

(1,961

)

1,584

 

Comprehensive income

 

74,302

 

78,609

 

207,787

 

226,575

 

Less: comprehensive income attributable to noncontrolling interest

 

(1,923

)

(2,219

)

(5,870

)

(9,995

)

Comprehensive income attributable to common shareholders

 

$

72,379

 

$

76,390

 

$

201,917

 

$

216,580

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.55

 

$

0.13

 

$

1.16

 

$

0.70

 

Discontinued operations

 

$

0.01

 

$

0.35

 

$

0.32

 

$

0.91

 

Total basic income per common share

 

$

0.56

 

$

0.48

 

$

1.48

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.55

 

$

0.13

 

$

1.15

 

$

0.70

 

Discontinued operations

 

$

—

 

$

0.35

 

$

0.32

 

$

0.90

 

Total diluted income per common share

 

$

0.55

 

$

0.48

 

$

1.47

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

 

 

 

 

Basic

 

147,881

 

145,865

 

147,216

 

130,180

 

Diluted

 

148,519

 

146,498

 

147,886

 

130,909

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to common shareholders

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

82,039

 

$

19,083

 

$

170,471

 

$

91,274

 

Discontinued operations

 

299

 

50,604

 

47,439

 

118,464

 

Net income

 

$

82,338

 

$

69,687

 

$

217,910

 

$

209,738

 

 


 

Liberty Property Trust

Statement of Funds From Operations

December 31, 2014

(Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Year Ended

 

 

 

December 31, 2014

 

December 31, 2013

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

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

 

$

82,338

 

$

0.56

 

$

69,687

 

$

0.48

 

$

217,910

 

$

1.48

 

$

209,738

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,366

 

 

 

3,061

 

 

 

13,332

 

 

 

13,152

 

 

 

Depreciation and amortization

 

58,284

 

 

 

66,313

 

 

 

230,014

 

 

 

201,731

 

 

 

Gain on property dispositions

 

(43,491

)

 

 

(46,324

)

 

 

(91,120

)

 

 

(94,934

)

 

 

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

 

(424

)

 

 

(546

)

 

 

(3,570

)

 

 

(3,171

)

 

 

Funds from operations available to common shareholders - basic

 

$

100,073

 

$

0.68

 

$

92,191

 

$

0.63

 

$

366,566

 

$

2.49

 

$

326,516

 

$

2.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to FFO - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted - income available to common shareholders

 

$

82,338

 

$

0.55

 

$

69,687

 

$

0.48

 

$

217,910

 

$

1.47

 

$

209,738

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,366

 

 

 

3,061

 

 

 

13,332

 

 

 

13,152

 

 

 

Depreciation and amortization

 

58,284

 

 

 

66,313

 

 

 

230,014

 

 

 

201,731

 

 

 

Gain on property dispositions

 

(43,491

)

 

 

(46,324

)

 

 

(91,120

)

 

 

(94,934

)

 

 

Noncontrolling interest excluding preferred unit distributions

 

1,970

 

 

 

1,691

 

 

 

5,234

 

 

 

5,848

 

 

 

Funds from operations available to common shareholders - diluted

 

$

102,467

 

$

0.67

 

$

94,428

 

$

0.63

 

$

375,370

 

$

2.48

 

$

335,535

 

$

2.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - all basic calculations

 

147,881

 

 

 

145,865

 

 

 

147,216

 

 

 

130,180

 

 

 

Dilutive shares for long term compensation plans

 

638

 

 

 

633

 

 

 

670

 

 

 

729

 

 

 

Diluted shares for net income calculations

 

148,519

 

 

 

146,498

 

 

 

147,886

 

 

 

130,909

 

 

 

Weighted average common units

 

3,554

 

 

 

3,595

 

 

 

3,554

 

 

 

3,678

 

 

 

Diluted shares for Funds from operations calculations

 

152,073

 

 

 

150,093

 

 

 

151,440

 

 

 

134,587

 

 

 

 

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, 2014

(Unaudited and in thousands, except share and unit amounts)

 

 

 

December 31, 2014

 

December 31, 2013

 

Assets

 

 

 

 

 

Real estate:

 

 

 

 

 

Land and land improvements

 

$

1,189,760

 

$

1,137,897

 

Building and improvements

 

5,342,597

 

5,129,702

 

Less: accumulated depreciation

 

(1,181,364

)

(1,051,593

)

 

 

 

 

 

 

Operating real estate

 

5,350,993

 

5,216,006

 

 

 

 

 

 

 

Development in progress

 

277,411

 

209,187

 

Land held for development

 

269,059

 

233,055

 

 

 

 

 

 

 

Net real estate

 

5,897,463

 

5,658,248

 

 

 

 

 

 

 

Cash and cash equivalents

 

69,346

 

163,414

 

Restricted cash

 

20,325

 

51,456

 

Accounts receivable

 

15,482

 

13,900

 

Deferred rent receivable

 

107,909

 

99,797

 

Deferred financing and leasing costs, net of accumulated amortization (2014, $169,468; 2013, $140,461)

 

206,286

 

226,067

 

Investments in and advances to unconsolidated joint ventures

 

208,832

 

179,655

 

Assets held for sale

 

8,495

 

287,183

 

Prepaid expenses and other assets

 

89,474

 

95,840

 

 

 

 

 

 

 

Total assets

 

$

6,623,612

 

$

6,775,560

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Mortgage loans

 

$

487,301

 

$

545,306

 

Unsecured notes

 

2,509,094

 

2,708,213

 

Credit facility

 

167,000

 

—

 

Accounts payable

 

52,043

 

70,406

 

Accrued interest

 

24,513

 

25,777

 

Dividend and distributions payable

 

72,253

 

71,323

 

Other liabilities

 

217,494

 

250,819

 

 

 

 

 

 

 

Total liabilities

 

3,529,698

 

3,671,844

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of December 31, 2014 and 2013

 

7,537

 

7,537

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common shares of beneficial interest, $.001 par value, 283,987,000 shares authorized, 149,807,179 (includes 1,249,909 in treasury) and 147,846,801 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2014 and 2013, respectively

 

150

 

148

 

Additional paid-in capital

 

3,740,594

 

3,669,618

 

Accumulated other comprehensive (loss) income

 

(6,252

)

9,742

 

Distributions in excess of net income

 

(654,869

)

(591,713

)

Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2014 and 2013

 

(51,951

)

(51,951

)

Total shareholders’ equity

 

3,027,672

 

3,035,844

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership 3,553,566 and 3,556,566 common units outstanding as of December 31, 2014 and 2013, respectively

 

54,786

 

56,713

 

Noncontrolling interest - consolidated joint ventures

 

3,919

 

3,622

 

 

 

 

 

 

 

Total equity

 

3,086,377

 

3,096,179

 

 

 

 

 

 

 

Total liabilities, noncontrolling interest - operating partnership & equity

 

$

6,623,612

 

$

6,775,560