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8-K - 8-K - LIBERTY PROPERTY TRUSTa13-4394_18k.htm

Exhibit 99.1

 

 

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 5, 2013 — Liberty Property Trust reported that funds from operations available to common shareholders (diluted) (“FFO”) for the fourth quarter of 2012 was $0.63 per share, compared to $0.63 per share for the fourth quarter of 2011.

 

For the year ended December 31, 2012, FFO per share was $2.58, and included $5.0 million in termination fees.  This compares to FFO of $2.61 per share for 2011, which included $4.1 million in termination fees.

 

Net income per common share (diluted) was $0.32 per share for the quarter ended December 31, 2012, compared to $0.30 per share (diluted) for the quarter ended December 31, 2011.  Net income for the full year 2012 was $1.17 per common share, compared with $1.59 per share for 2011.

 

“Over the past two years, Liberty has made great strides in enhancing our portfolio quality and market position, and our portfolio continues to perform well in an unpredictable market,” said Bill Hankowsky, chairman and chief executive officer. “Although economic uncertainty continues to constrain decision making, there is pent-up demand in the marketplace, and we expect this demand could more positively affect occupancies and development opportunities as the year goes on.”

 

Portfolio Performance

 

Leasing: At December 31, 2012, Liberty’s in-service portfolio of 81.3 million square feet was 92.1% occupied, compared to 91.8% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 4.9 million square feet of space. Liberty leased 18.5 million square feet in 2012.

 

Same Store Performance: Property level operating income for same store properties decreased by 0.2% on a cash basis and decreased by 0.3% on a straight line basis for the fourth quarter of 2012 compared to the same quarter in 2011 and decreased by 0.3% on a cash basis and decreased by 0.8% on a straight line basis for the full year 2012 compared to 2011.

 

-more-



 

Capital Activities and Balance Sheet Management

 

Property Sales: During the fourth quarter, Liberty sold two operating properties, which contained 257,000 square feet of leasable space for $17.7 million. The properties were 61.9% leased at the time of the sale.

 

Senior Unsecured Notes: During the fourth quarter, Liberty issued $300 million of 10 ½ year 3.375% Senior Unsecured Notes. The net proceeds were used to repay borrowings under the company’s unsecured credit facility and for general corporate purposes.

 

Real Estate Investments

 

Acquisitions: During the quarter, Liberty acquired 22 industrial properties for $176.3 million. The properties total 3.5 million square feet of leasable space, and are 92.5% leased at a current yield of 6.8%.

 

Development: In the fourth quarter, Liberty brought into service five development properties for a total investment of $44.1 million. The properties contain 290,000 square feet of leasable space and were 77.0% occupied and 97.7% leased as of December 31, 2012. The current yield on these properties is 8.5% and the projected stabilized yield is 10.5%.

 

Also during the quarter, Liberty began development on one property for a projected investment of $11.6 million. The property is a 181,000 square foot industrial build-to-suit for GAC Industries in Houston, TX.

 

Subsequent Events

 

Liberty has announced that it will begin development during the first quarter of 3 Quarry Ridge, a 200,000 square foot office building in Malvern, Pennsylvania. The property is 100% leased to the Vanguard Group and represents an investment of $55 million.

 

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 81 million square foot portfolio includes 680 properties which provide office, distribution and light manufacturing facilities to 1,800 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.

 

2



 

Liberty will host a conference call during which management will discuss fourth quarter results, on Tuesday, February 5, 2013, at 1 p.m. Eastern Time.  To access the conference call, please dial 855-277-7530. The passcode needed for access is 91553147. A replay of the call will be available until March 5, 2013, 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.

 

3



 

Liberty Property Trust

Statement of Operations

December 31, 2012

(Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Year ended

 

 

 

December 31, 2012

 

December 31, 2011

 

December 31, 2012

 

December 31, 2011

 

Operating Revenue

 

 

 

 

 

 

 

 

 

Rental

 

$

121,709

 

$

118,171

 

$

478,835

 

$

464,053

 

Operating expense reimbursement

 

54,518

 

50,533

 

206,717

 

199,188

 

Total operating revenue

 

176,227

 

168,704

 

685,552

 

663,241

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Rental property

 

37,704

 

34,105

 

133,630

 

125,761

 

Real estate taxes

 

18,407

 

18,336

 

79,859

 

76,982

 

General and administrative

 

18,286

 

16,547

 

64,730

 

59,367

 

Depreciation and amortization

 

42,923

 

39,994

 

165,628

 

156,242

 

Total operating expenses

 

117,320

 

108,982

 

443,847

 

418,352

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

58,907

 

59,722

 

241,705

 

244,889

 

 

 

 

 

 

 

 

 

 

 

Other Income/Expense

 

 

 

 

 

 

 

 

 

Interest and other

 

1,320

 

1,472

 

9,289

 

8,389

 

Interest

 

(29,738

)

(29,510

)

(119,630

)

(120,718

)

Total other income/expense

 

(28,418

)

(28,038

)

(110,341

)

(112,329

)

 

 

 

 

 

 

 

 

 

 

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

 

30,489

 

31,684

 

131,364

 

132,560

 

Gain on property dispositions

 

1,305

 

1,664

 

4,123

 

5,025

 

Income taxes

 

(331

)

(51

)

(976

)

(1,020

)

Equity in earnings (loss) of unconsolidated joint ventures

 

716

 

1,026

 

(681

)

3,496

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

32,179

 

34,323

 

133,830

 

140,061

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations (including net gains on property dispositions of $8,837 and $5,860 for the quarters ended December 31, 2012 and 2011 and net gains of $11,383 and $60,582 for the years ended December 31, 2012 and 2011)

 

8,392

 

6,922

 

13,921

 

70,649

 

Net Income

 

40,571

 

41,245

 

147,751

 

210,710

 

Noncontrolling interest - operating partnerships

 

(2,416

)

(6,453

)

(10,590

)

(27,222

)

Noncontrolling interest - consolidated joint ventures

 

275

 

 

275

 

511

 

Net Income available to common shareholders

 

$

38,430

 

$

34,792

 

$

137,436

 

$

183,999

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

40,571

 

$

41,245

 

$

147,751

 

$

210,710

 

Other comprehensive income (loss)

 

389

 

(217

)

3,436

 

(281

)

Comprehensive income

 

40,960

 

41,028

 

151,187

 

210,429

 

Less: comprehensive income attributable to noncontrolling interest

 

(2,153

)

(6,446

)

(10,422

)

(26,705

)

Comprehensive income attributable to common shareholders

 

$

38,807

 

$

34,582

 

$

140,765

 

$

183,724

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.26

 

$

0.24

 

$

1.06

 

$

1.00

 

Discontinued operations

 

$

0.07

 

$

0.06

 

$

0.12

 

$

0.60

 

Total basic income per common share

 

$

0.33

 

$

0.30

 

$

1.18

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

Diluted income per common share

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.25

 

$

0.24

 

$

1.06

 

$

1.00

 

Discontinued operations

 

$

0.07

 

$

0.06

 

$

0.11

 

$

0.59

 

Total diluted income per common share

 

$

0.32

 

$

0.30

 

$

1.17

 

$

1.59

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

 

 

 

 

 

 

 

Basic

 

117,556

 

115,373

 

116,863

 

114,755

 

Diluted

 

118,378

 

116,090

 

117,694

 

115,503

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to common shareholders

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

30,293

 

$

28,090

 

$

123,945

 

$

115,653

 

Discontinued operations

 

8,137

 

6,702

 

13,491

 

68,346

 

Net income

 

$

38,430

 

$

34,792

 

$

137,436

 

$

183,999

 

 



 

Liberty Property Trust

Statement of Funds From Operations

December 31, 2012

(Unaudited and in thousands, except per share amounts)

 

 

 

Quarter Ended

 

Year ended

 

 

 

December 31, 2012

 

December 31, 2011

 

December 31, 2012

 

December 31, 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

 

$

38,430

 

$

0.33

 

$

34,792

 

$

0.30

 

$

137,436

 

$

1.18

 

$

183,999

 

$

1.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,413

 

 

 

3,549

 

 

 

14,152

 

 

 

14,452

 

 

 

Depreciation and amortization

 

42,518

 

 

 

42,123

 

 

 

164,615

 

 

 

168,435

 

 

 

Gain on property dispositions/impairment

 

(8,265

)

 

 

(6,066

)

 

 

(7,589

)

 

 

(61,198

)

 

 

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

 

(1,145

)

 

 

(1,258

)

 

 

(5,286

)

 

 

(3,926

)

 

 

Funds from operations available to common shareholders - basic

 

$

74,951

 

$

0.64

 

$

73,140

 

$

0.63

 

$

303,328

 

$

2.60

 

$

301,762

 

$

2.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to FFO - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted - income available to common shareholders

 

$

38,430

 

$

0.32

 

$

34,792

 

$

0.30

 

$

137,436

 

$

1.17

 

$

183,999

 

$

1.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of unconsolidated joint ventures

 

3,413

 

 

 

3,549

 

 

 

14,152

 

 

 

14,452

 

 

 

Depreciation and amortization

 

42,518

 

 

 

42,123

 

 

 

164,615

 

 

 

168,435

 

 

 

Gain on property dispositions/impairment

 

(8,265

)

 

 

(6,066

)

 

 

(7,589

)

 

 

(61,198

)

 

 

Noncontrolling interest excluding preferred unit distributions

 

1,205

 

 

 

1,143

 

 

 

4,378

 

 

 

6,153

 

 

 

Funds from operations available to common shareholders - diluted

 

$

77,301

 

$

0.63

 

$

75,541

 

$

0.63

 

$

312,992

 

$

2.58

 

$

311,841

 

$

2.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - all basic calculations

 

117,556

 

 

 

115,373

 

 

 

116,863

 

 

 

114,755

 

 

 

Dilutive shares for long term compensation plans

 

822

 

 

 

717

 

 

 

831

 

 

 

748

 

 

 

Diluted shares for net income calculations

 

118,378

 

 

 

116,090

 

 

 

117,694

 

 

 

115,503

 

 

 

Weighted average common units

 

3,728

 

 

 

3,809

 

 

 

3,760

 

 

 

3,869

 

 

 

Diluted shares for Funds from operations calculations

 

122,106

 

 

 

119,899

 

 

 

121,454

 

 

 

119,372

 

 

 

 

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, 2012

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

 

 

 

December 31, 2012

 

December 31, 2011

 

Assets

 

 

 

 

 

Real estate:

 

 

 

 

 

Land and land improvements

 

$

900,501

 

$

852,785

 

Building and improvements

 

4,353,433

 

4,092,056

 

Less: accumulated depreciation

 

(1,170,030

)

(1,047,336

)

 

 

 

 

 

 

Operating real estate

 

4,083,904

 

3,897,505

 

 

 

 

 

 

 

Development in progress

 

248,602

 

88,848

 

Land held for development

 

258,324

 

219,375

 

 

 

 

 

 

 

Net real estate

 

4,590,830

 

4,205,728

 

 

 

 

 

 

 

Cash and cash equivalents

 

38,356

 

18,204

 

Restricted cash

 

33,147

 

63,659

 

Accounts receivable

 

8,988

 

8,192

 

Deferred rent receivable

 

108,628

 

102,613

 

Deferred financing and leasing costs, net of accumulated amortization (2012, $136,706; 2011, $123,557)

 

141,245

 

129,614

 

Investments in and advances to unconsolidated joint ventures

 

169,021

 

174,687

 

Assets held for sale

 

 

210,790

 

Prepaid expenses and other assets

 

87,756

 

76,186

 

 

 

 

 

 

 

Total assets

 

$

5,177,971

 

$

4,989,673

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Mortgage loans

 

$

302,855

 

$

290,819

 

Unsecured notes

 

2,262,543

 

1,792,643

 

Credit facility

 

92,000

 

139,400

 

Accounts payable

 

31,058

 

23,418

 

Accrued interest

 

20,164

 

24,147

 

Dividend and distributions payable

 

58,038

 

56,958

 

Other liabilities

 

185,956

 

194,995

 

 

 

 

 

 

 

Total liabilities

 

2,952,614

 

2,522,380

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of December 31, 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, 119,720,776 (includes 1,249,909 in treasury) and 117,352,353 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively

 

119

 

117

 

Additional paid-in capital

 

2,687,701

 

2,617,355

 

Accumulated other comprehensive income (loss)

 

2,900

 

(429

)

Distributions in excess of net income

 

(547,757

)

(461,498

)

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

 

(51,951

)

(51,951

)

Total shareholders’ equity

 

2,091,012

 

2,103,594

 

 

 

 

 

 

 

Noncontrolling interest - operating partnership

 

 

 

 

 

3,713,851 and 3,808,746 common units outstanding as of December 31, 2012 and December 31, 2011, respectively

 

60,223

 

64,428

 

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

 

63,264

 

287,959

 

Noncontrolling interest - consolidated joint ventures

 

3,321

 

3,775

 

 

 

 

 

 

 

Total equity

 

2,217,820

 

2,459,756

 

 

 

 

 

 

 

Total liabilities, noncontrolling interest - operating partnership & equity

 

$

5,177,971

 

$

4,989,673