February 05, 2013 at 08:00 AM EST
Liberty Property Trust Announces Fourth Quarter And Full Year Results

MALVERN, Pa., Feb. 5, 2013 /PRNewswire/ -- 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.

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.

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.

 

 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












SOURCE Liberty Property Trust

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