EX-99.1 2 c03796exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(LIBERTY PROPERTY TRUST LOGO)
     
Inquiries:
  Jeanne A. Leonard
 
  Liberty Property Trust
 
  610/648-1704
LIBERTY PROPERTY TRUST ANNOUNCES
SECOND QUARTER RESULTS
Malvern, PA, July 26, 2010 — Liberty Property Trust (NYSE:LRY) reported that net income per common share (diluted) was $0.29 per share for the quarter ended June 30, 2010, compared to $0.35 per share (diluted) for the quarter ended June 30, 2009. For the six-month period ended June 30, 2010, net income per common share (diluted) was $0.56, compared to $.62 per share for the same period in 2009.
Funds from operations available to common shareholders (diluted) (“FFO”) for the second quarter of 2010 was $0.67 per share, compared to $0.72 per share for the second quarter of 2009. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release. Funds from operations for the second quarter include lease termination fees of $1.5 million, and $2.1 million in costs associated with the prepayment of mortgage loans. FFO per share for the six-month period ended June 30, 2010 was $1.31, compared to $1.44 per share for the same period in 2009.
“Liberty continues to perform extremely well against a backdrop of an economy trying to, but not yet succeeding at, getting off the ground,” said Bill Hankowsky, chairman and chief executive officer. “Our occupancy increased according to our forecast, and rental rates have stabilized in our markets. We expect the real estate recovery to be long and slow, with marketplace advantages continuing to flow to well-capitalized, customer-focused operators such as Liberty.”
Portfolio Performance
Leasing: At June 30, 2010 Liberty’s in-service portfolio of 78.8 million square feet was 88.7% occupied, compared to 88.2% at the end of the first quarter. During the quarter, Liberty completed lease transactions totaling 4.1 million square feet of space.
Same Store Performance: Property level operating income for same store properties decreased by 1.8% on a cash basis and decreased by 3.2% on a straight line basis for the second quarter of 2010 compared to the same quarter in 2009. Occupancy of the same store portfolio was 90.8% as of June 30, 2010 compared to 89.2% at the end of the first quarter.
Capital and Balance Sheet Management
During the second quarter, Liberty repaid $119.3 million of mortgage loans. The weighted average interest rate of these loans as of March 31, 2010 was 7.3%. The company incurred a $1.2 million prepayment penalty and wrote off $936,000 in deferred financing costs in conjunction with the prepayment of these loans.
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Liberty Property Trust
Second Quarter 2010 Earnings
Real Estate Investments
Development: During the second quarter, Liberty brought into service one development property totaling 211,000 square feet for a total investment of $45.7 million. This property is 99.4% occupied at a current yield of 8.0%. A joint venture in which the company holds a 25% interest brought into service one development property for a total investment of $25.1 million. This 464,000 square foot property is currently vacant. The projected stabilized yield is 4.9%. No development projects were commenced during the quarter.
As of June 30, 2010, Liberty had 251,000 square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $146.4 million, with an expected yield of 5.1%. The properties were 67.2% leased at June 30.
Acquisitions: Liberty acquired no properties during the quarter.
Dispositions: During the quarter, Liberty sold two operating properties, containing 72,000 square feet, and 12 acres of land, for $10.2 million.
Subsequent Events
On July 22, Liberty purchased two vacant distribution buildings in Houston for $14.7 million. The properties total 228,000 square feet and are located in the Northwest Houston industrial submarket.
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 79 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.
Liberty will host a conference call during which management will discuss second quarter results, on Tuesday, July 27, 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: 86691019. 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.
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Liberty Property Trust
Second Quarter 2010 Earnings
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, 2010
(Unaudited and in thousands, except per share amounts)
                                 
    Quarter Ended     Six Months Ended  
    June 30, 2010     June 30, 2009     June 30, 2010     June 30, 2009  
Operating Revenue
                                
Rental
   $ 130,509     $ 129,352     $ 260,578     $ 257,064  
Operating expense reimbursement
     54,469       54,205       113,202       111,465  
 
                        
Total operating revenue
     184,978       183,557       373,780       368,529  
 
                        
 
                                
Operating Expenses
                                
Rental property
     34,659       34,770       75,073       73,151  
Real estate taxes
     22,402       21,773       44,910       43,546  
General and administrative
     12,567       11,655       27,441       27,212  
Depreciation and amortization
     43,873       42,005       86,804       84,575  
 
                        
Total operating expenses
     113,501       110,203       234,228       228,484  
 
                        
 
                                
Operating Income
     71,477       73,354       139,552       140,045  
 
                                
Other Income/Expense
                                
Interest and other
     2,681       2,511       5,471       5,606  
Debt extinguishment gain
     —       563       —       1,092  
Interest
     (39,144 )     (36,755 )     (77,773 )     (73,946 )
 
                        
Total other income/expense
     (36,463 )     (33,681 )     (72,302 )     (67,248 )
 
                        
 
                                
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures
     35,014       39,673       67,250       72,797  
Gain (loss) on property dispositions
     2,242       (2,050 )     3,010       (2,344 )
Income taxes
     (503 )     (127 )     (955 )     (344 )
Equity in earnings of unconsolidated joint ventures
     783       1,192       1,177       1,609  
 
                        
 
                                
Income from continuing operations
     37,536       38,688       70,482       71,718  
 
                                
Discontinued operations (including net gain on property dispositions of $2,408 and $3,670 for the quarters ended June 30, 2010 and 2009 and $5,270 and $3,869 for the six month periods ended June 30, 2010 and 2009)
     2,478       4,524       5,354       5,336  
 
                        
Net Income
     40,014       43,212       75,836       77,054  
Noncontrolling interest — operating partnerships
     (6,421 )     (6,597 )     (12,704 )     (12,914 )
Noncontrolling interest — consolidated joint ventures
     (148 )     56       (136 )     420  
 
                        
Net Income available to common shareholders
   $ 33,445     $ 36,671     $ 62,996     $ 64,560  
 
                        
 
                                
Basic income per common share
                                
Continuing operations
   $ 0.28     $ 0.31     $ 0.51     $ 0.58  
 
                        
Discontinued operations
   $ 0.02     $ 0.04     $ 0.05     $ 0.05  
 
                        
Total basic income per common share
   $ 0.30     $ 0.35     $ 0.56     $ 0.63  
 
                        
 
                                
Diluted income per common share
                                
Continuing operations
   $ 0.27     $ 0.31     $ 0.51     $ 0.57  
 
                        
Discontinued operations
   $ 0.02     $ 0.04     $ 0.05     $ 0.05  
 
                        
Total diluted income per common share
   $ 0.29     $ 0.35     $ 0.56     $ 0.62  
 
                        
 
                                
Weighted average shares
                                
Basic
     112,644       105,768       112,512       103,244  
 
                        
Diluted
     113,380       106,245       113,182       103,625  
 
                        
 
                                
Amounts attributable to common shareholders
                                
Income from continuing operations
   $ 31,050     $ 32,307     $ 57,822     $ 59,418  
Discontinued operations
     2,395       4,364       5,174       5,142  
 
                        
Net income
   $ 33,445     $ 36,671     $ 62,996     $ 64,560  
 
                        

 

 

 

Liberty Property Trust
Statement of Funds From Operations
June 30, 2010
(Unaudited and in thousands, except per share amounts)
                                                                 
    Quarter Ended     Six Months Ended  
    June 30, 2010     June 30, 2009     June 30, 2010     June 30, 2009  
            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
   $ 33,445     $ 0.30     $ 36,671     $ 0.35     $ 62,996     $ 0.56     $ 64,560     $ 0.63  
 
                                                        
 
                                                                
Adjustments:
                                                                
Depreciation and amortization of unconsolidated joint ventures
     3,395               4,132               7,454               8,122          
Depreciation and amortization
     43,271               42,364               85,720               85,386          
Gain on property dispositions
     (2,746 )             (5,067 )             (5,410 )             (5,375 )        
Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions
     (1,476 )             (1,467 )             (2,954 )             (3,204 )        
 
                                                
Funds from operations available to common shareholders — basic
   $ 75,889     $ 0.67     $ 76,633     $ 0.72     $ 147,806     $ 1.31     $ 149,489     $ 1.45  
 
                                                
 
                                                                
Reconciliation of net income to FFO — diluted:
                                                                
Diluted — income available to common shareholders
   $ 33,445     $ 0.29     $ 36,671     $ 0.35     $ 62,996     $ 0.56     $ 64,560     $ 0.62  
 
                                                        
 
                                                                
Adjustments:
                                                                
Depreciation and amortization of unconsolidated joint ventures
     3,395               4,132               7,454               8,122          
Depreciation and amortizaton
     43,271               42,364               85,720               85,386          
Gain on property dispositions
     (2,746 )             (5,067 )             (5,410 )             (5,375 )        
Noncontrolling interest excluding preferred unit distributions
     1,168               1,345               2,198               2,409          
 
                                                
Funds from operations available to common shareholders — diluted
   $ 78,533     $ 0.67     $ 79,445     $ 0.72     $ 152,958     $ 1.31     $ 155,102     $ 1.44  
 
                                                
 
                                                                
Reconciliation of weighted average shares:
                                                                
Weighted average common shares — all basic calculations
     112,644               105,768               112,512               103,244          
Dilutive shares for long term compensation plans
     736               477               670               381          
 
                                                        
Diluted shares for net income calculations
     113,380               106,245               113,182               103,625          
Weighted average common units
     3,943               4,017               3,952               4,019          
 
                                                        
Diluted shares for funds from operations calculations
     117,323               110,262               117,134               107,644          
 
                                                        

 

 

 

Liberty Property Trust
Balance Sheet
June 30, 2010
(In thousands, except share amounts)
                 
    June 30, 2010     December 31, 2009  
    (unaudited)        
Assets
                
Real estate:
                
Land and land improvements
   $ 858,919     $ 850,559  
Building and improvements
     4,364,449       4,289,932  
Less: accumulated depreciation
     (1,036,823 )     (973,624 )
 
            
 
                
Operating real estate
     4,186,545       4,166,867  
 
                
Development in progress
     7,951       66,714  
Land held for development
     210,748       218,633  
 
            
 
                
Net real estate
     4,405,244       4,452,214  
 
                
Cash and cash equivalents
     39,541       237,446  
Restricted cash
     36,351       42,232  
Accounts receivable
     6,657       6,057  
Deferred rent receivable
     102,544       95,527  
Deferred financing and leasing costs, net of accumulated amortization (2010, $118,545; 2009, $108,403)
     131,880       134,309  
Investment in unconsolidated joint ventures
     172,586       175,584  
Prepaid expenses and other assets
     58,289       85,574  
 
            
 
                
Total assets
   $ 4,953,092     $ 5,228,943  
 
            
 
                
Liabilities
                
Mortgage loans
   $ 352,019     $ 473,993  
Unsecured notes
     1,842,882       1,842,882  
Credit facility
     50,000       140,000  
Accounts payable
     36,772       31,195  
Accrued interest
     31,294       31,251  
Dividend and distributions payable
     55,718       55,402  
Other liabilities
     133,281       171,051  
 
            
 
                
Total liabilities
     2,501,966       2,745,774  
 
            
 
                
Equity
                
Shareholders’ equity:
                
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 114,642,717 (includes 1,249,909 in treasury) and 113,875,211 (includes 1,249,909 in treasury) shares issued and outstanding as of June 30, 2010 and December 31, 2009, respectively
     115       114  
Additional paid-in capital
     2,530,789       2,509,704  
Accumulated other comprehensive (loss) income
     (3,195 )     2,339  
Distributions in excess of net income
     (382,461 )     (337,911 )
Common shares in treasury, at cost, 1,249,909 shares as of June 30, 2010 and December 31, 2009
     (51,951 )     (51,951 )
 
            
Total shareholders’ equity
     2,093,297       2,122,295  
 
                
Noncontrolling interest — operating partnership
                
3,943,224 and 4,011,354 common units outstanding as of June 30, 2010 and December 31, 2009, respectively
     69,113       72,294  
9,740,000 preferred units outstanding as of June 30, 2010 and December 31, 2009
     287,959       287,959  
Noncontrolling interest — consolidated joint ventures
     757       621  
 
            
 
                
Total equity
     2,451,126       2,483,169  
 
            
 
                
Total liabilities & equity
   $ 4,953,092     $ 5,228,943