Exhibit 99
![]() | Press Release |
For Immediate Release | Inquiries: | Jeanne A. Leonard Liberty Property Trust 610/648-1704 |
LIBERTY PROPERTY TRUST ANNOUNCES
THIRD QUARTER RESULTS
THIRD QUARTER RESULTS
Malvern, PA, October 20, 2008 — Liberty Property Trust (NYSE:LRY) reported that net income per common share (diluted) was $.41 per share for the quarter ended September 30, 2008 compared to $.41 per share for the quarter ended September 30, 2007. For the nine-month period ended September 30, 2008, net income per common share (diluted) was $1.08, compared to $1.41 per share for the same period in 2007. The primary difference between net income for the first nine months of 2007 and 2008 is attributable to a difference in gains on sales of property.
Funds from operations available to common shareholders (diluted) (“FFO”) for the third quarter of 2008 was $0.80 per share, compared to $0.80 per share for the third quarter of 2007. FFO per share for the nine month period ended September 30, 2008 was $2.41 per share, compared to $2.39 per share for the same period in 2007. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.
“Office and industrial conditions continued to hold up this quarter in a very unusual economic and financial environment,” said Bill Hankowsky, chairman and chief executive officer. “In spite of the current challenged economic scene, our multi-product, multi-market, multi-tenant portfolio and our capital structure are appropriately positioned for relative outperformance in this difficult market.”
Portfolio Performance
Leasing:At September 30, 2008 Liberty’s in-service portfolio of 75.9 million square feet was 92.0% occupied, compared to 92.5% at the end of the second quarter. During the third quarter, Liberty completed lease transactions totaling 4.0 million square feet of space.
Same Store Performance:Property level operating income for same store properties increased by 0.1% on a cash basis and decreased by 1.2% on a straight line basis for the third quarter of 2008 compared to the same quarter in 2007, and remained flat on a cash basis and decreased by 0.9% on a straight line basis for the nine months ended September 30th compared to the same period in 2007.
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Liberty Property Trust Third Quarter 2008 Results -2-
Real Estate Investments
Development:During the third quarter, Liberty brought into service six wholly-owned development properties totaling one million square feet for a total investment of $62.0 million. These properties are 83.6% leased at a current yield of 7.1% and a projected stabilized yield of 8.7%. A joint venture in which Liberty holds a 50% interest brought into service two development properties for a total investment of $19.1 million. These properties, totaling 296,000 square feet, are located in Orlando, Florida, and were 78.2% leased as of September 30.
During the third quarter, Liberty began development of one property for an expected total investment of $46.3 million. This 211,000 square foot office building is located in Orlando, and is 50.8% pre-leased. In addition, a joint venture in which the company holds a 25% interest began construction of a 464,000 square foot industrial building in Aurora, IL.
As of September 30, 2008, Liberty had 5.0 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $599.8 million, with an expected yield of 8.0%. The properties were 21.4% leased at September 30.
Acquisitions:Liberty acquired a 107,000 square foot office property in Sunrise, FL during the quarter for $17.0 million. The property is 100% leased, with a current yield of 10.9%.
Dispositions:During the third quarter Liberty sold six operating properties, which contained 254,000 square feet of leasable space for $31.1 million.
Subsequent Events
On October 8, Liberty completed a public offering of 4,750,000 common shares, generating net proceeds to the company of $149.5 million. The proceeds from this offering were used to repay borrowings under the Company’s unsecured credit facility and for general corporate purposes.
Earnings Outlook
Liberty expects to report funds from operations for 2008 in the range of $3.14-$3.16 per share, and for 2009 in the range of $3.00-$3.20 per share. A reconciliation of FFO to GAAP net income for both 2008 and 2009 is below:
2008 Range | 2009 Range | |||||||||||||||
Low | High | Low | High | |||||||||||||
Projected net income per share | $ | 1.47 | $ | 1.49 | $ | 1.24 | $ | 1.44 | ||||||||
Depreciation and amortization of unconsolidated joint ventures | 0.18 | 0.18 | 0.16 | 0.18 | ||||||||||||
Depreciation and amortization | 1.85 | 1.89 | 1.78 | 1.81 | ||||||||||||
Gain on property dispositions | (0.29 | ) | (0.32 | ) | (0.10 | ) | (0.15 | ) | ||||||||
Minority interest share of addbacks | (0.07 | ) | (0.08 | ) | (0.08 | ) | (0.08 | ) | ||||||||
Projected funds from operations per share | $ | 3.14 | $ | 3.16 | $ | 3.00 | $ | 3.20 |
Liberty Property Trust Third Quarter 2008 Results -3-
Commenting on this guidance, “The current economic pressures coupled with the credit drought yield a very unclear picture for 2009,” said Bill Hankowsky. “Therefore we are basing our forward guidance on a set of assumptions that project the current difficult economic environment to prevail throughout 2009.”
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 76 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 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 atwww.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 tojleonard@libertyproperty.com.
Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, October 21, 2008, at 1:00 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: 67954423. The call can also be accessed via the Internet on the Investors page of Liberty’s web site atwww.libertyproperty.com for two weeks following the call.
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, 2008
(Unaudited and in thousands, except per share amounts)
Statement of Operations
September 30, 2008
(Unaudited and in thousands, except per share amounts)
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||
Operating Revenue | ||||||||||||||||
Rental | $ | 131,042 | $ | 122,864 | $ | 392,650 | $ | 352,262 | ||||||||
Operating expense reimbursement | 57,935 | 52,254 | 173,337 | 152,908 | ||||||||||||
Total operating revenue | 188,977 | 175,118 | 565,987 | 505,170 | ||||||||||||
Operating Expenses | ||||||||||||||||
Rental property | 38,468 | 36,121 | 114,717 | 106,433 | ||||||||||||
Real estate taxes | 22,305 | 19,299 | 66,615 | 53,494 | ||||||||||||
General and administrative | 13,145 | 13,142 | 40,178 | 38,866 | ||||||||||||
Depreciation and amortization | 44,695 | 40,146 | 132,021 | 112,897 | ||||||||||||
Total operating expenses | 118,613 | 108,708 | 353,531 | 311,690 | ||||||||||||
Operating Income | 70,364 | 66,410 | 212,456 | 193,480 | ||||||||||||
Other Income/Expense | ||||||||||||||||
Interest and other | 3,333 | 2,443 | 9,459 | 8,105 | ||||||||||||
Interest | (38,909 | ) | (33,043 | ) | (118,336 | ) | (88,641 | ) | ||||||||
Total other income/expense | (35,576 | ) | (30,600 | ) | (108,877 | ) | (80,536 | ) | ||||||||
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures | 34,788 | 35,810 | 103,579 | 112,944 | ||||||||||||
Gain on property dispositions | 463 | 190 | 1,939 | 1,641 | ||||||||||||
Income taxes | (308 | ) | 1,022 | (1,372 | ) | 508 | ||||||||||
Minority interest | (6,947 | ) | (5,671 | ) | (19,948 | ) | (17,154 | ) | ||||||||
Equity in earnings of unconsolidated joint ventures | 470 | (29 | ) | 1,857 | 1,026 | |||||||||||
Income from continuing operations | 28,466 | 31,322 | 86,055 | 98,965 | ||||||||||||
Discontinued operations net of minority interest (including net gain on property dispositions of $10,232 and $4,145 for the quarters ended September 30, 2008 and 2007 and $13,635 and $24,376 for the nine month periods ended September 30, 2008 and 2007) | 10,088 | 5,852 | 14,089 | 30,334 | ||||||||||||
Net Income | $ | 38,554 | $ | 37,174 | $ | 100,144 | $ | 129,299 | ||||||||
Basic income per common share | ||||||||||||||||
Continuing operations | $ | 0.30 | $ | 0.35 | $ | 0.93 | $ | 1.09 | ||||||||
Discontinued operations | $ | 0.11 | $ | 0.06 | $ | 0.15 | $ | 0.33 | ||||||||
Total basic income per common share | $ | 0.41 | $ | 0.41 | $ | 1.08 | $ | 1.42 | ||||||||
Diluted income per common share | ||||||||||||||||
Continuing operations | $ | 0.30 | $ | 0.35 | $ | 0.93 | $ | 1.08 | ||||||||
Discontinued operations | $ | 0.11 | $ | 0.06 | $ | 0.15 | $ | 0.33 | ||||||||
Total diluted income per common share | $ | 0.41 | $ | 0.41 | $ | 1.08 | $ | 1.41 | ||||||||
Weighted average shares | ||||||||||||||||
Basic | 92,928 | 90,905 | 92,324 | 91,179 | ||||||||||||
Diluted | 93,369 | 91,367 | 92,626 | 91,905 | ||||||||||||
Liberty Property Trust
Statement of Funds From Operations
September 30, 2008
(Unaudited and in thousands, except per share amounts)
Statement of Funds From Operations
September 30, 2008
(Unaudited and in thousands, except per share amounts)
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
September 30, 2008 | September 30, 2007 | September 30, 2008 | September 30, 2007 | |||||||||||||||||||||||||||||
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 | $ | 38,554 | $ | 0.41 | $ | 37,174 | $ | 0.41 | $ | 100,144 | $ | 1.08 | $ | 129,299 | $ | 1.42 | ||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated joint ventures | 4,331 | 1,134 | 12,208 | 2,819 | ||||||||||||||||||||||||||||
Depreciation and amortization | 44,173 | 41,715 | 130,803 | 118,704 | ||||||||||||||||||||||||||||
Gain on property dispositions | (10,542 | ) | (5,302 | ) | (14,674 | ) | (27,238 | ) | ||||||||||||||||||||||||
Minority interest share in addback for depreciation and amortization and gain on property dispositions | (1,629 | ) | (1,648 | ) | (5,538 | ) | (4,132 | ) | ||||||||||||||||||||||||
Funds from operations available to common shareholders — basic | $ | 74,887 | $ | 0.81 | $ | 73,073 | $ | 0.80 | $ | 222,943 | $ | 2.41 | $ | 219,452 | $ | 2.41 | ||||||||||||||||
Reconciliation of net income to FFO - diluted: | ||||||||||||||||||||||||||||||||
Diluted — income available to common shareholders | $ | 38,554 | $ | 0.41 | $ | 37,174 | $ | 0.41 | $ | 100,144 | $ | 1.08 | $ | 129,299 | $ | 1.41 | ||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated joint ventures | 4,331 | 1,134 | 12,208 | 2,819 | ||||||||||||||||||||||||||||
Depreciation and amortization | 44,173 | 41,715 | 130,803 | 118,704 | ||||||||||||||||||||||||||||
Gain on property dispositions | (10,542 | ) | (5,302 | ) | (14,674 | ) | (27,238 | ) | ||||||||||||||||||||||||
Minority interest excluding preferred unit distributions | 1,746 | 1,705 | 4,526 | 5,927 | ||||||||||||||||||||||||||||
Funds from operations available to common shareholders — diluted | $ | 78,262 | $ | 0.80 | $ | 76,426 | $ | 0.80 | $ | 233,007 | $ | 2.41 | $ | 229,511 | $ | 2.39 | ||||||||||||||||
Reconciliation of weighted average shares: | ||||||||||||||||||||||||||||||||
Weighted average common shares — all basic calculations | 92,928 | 90,905 | 92,324 | 91,179 | ||||||||||||||||||||||||||||
Dilutive shares for long term compensation plans | 441 | 462 | 302 | 726 | ||||||||||||||||||||||||||||
Diluted shares for net income calculations | 93,369 | 91,367 | 92,626 | 91,905 | ||||||||||||||||||||||||||||
Weighted average common units | 4,190 | 4,190 | 4,190 | 4,190 | ||||||||||||||||||||||||||||
Diluted shares for funds from operations calculations | 97,559 | 95,557 | 96,816 | 96,095 | ||||||||||||||||||||||||||||
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, 2008
(In thousands, except share amounts)
Balance Sheet
September 30, 2008
(In thousands, except share amounts)
September 30, 2008 | December 31, 2007 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Real estate: | ||||||||
Land and land improvements | $ | 805,797 | $ | 795,939 | ||||
Building and improvements | 4,235,427 | 4,432,690 | ||||||
Less: accumulated depreciation | (956,732 | ) | (863,193 | ) | ||||
Operating real estate | 4,084,492 | 4,365,436 | ||||||
Development in progress | 294,227 | 328,138 | ||||||
Land held for development | 227,003 | 247,124 | ||||||
Net real estate | 4,605,722 | 4,940,698 | ||||||
Cash and cash equivalents | 29,278 | 37,989 | ||||||
Restricted cash | 41,638 | 34,567 | ||||||
Accounts receivable | 24,055 | 17,405 | ||||||
Deferred rent receivable | 82,653 | 80,087 | ||||||
Deferred financing and leasing costs, net of accumulated amortization (2008, $136,565; 2007, $119,721) | 132,023 | 144,684 | ||||||
Investment in unconsolidated joint ventures | 255,317 | 278,383 | ||||||
Assets held for sale | 2,145 | 2,192 | ||||||
Prepaid expenses and other assets | 99,138 | 107,932 | ||||||
Total assets | $ | 5,271,969 | $ | 5,643,937 | ||||
Liabilities | ||||||||
Mortgage loans | $ | 205,450 | $ | 243,169 | ||||
Unsecured notes | 2,155,000 | 2,155,000 | ||||||
Credit facility | 370,000 | 622,960 | ||||||
Accounts payable | 54,302 | 44,666 | ||||||
Accrued interest | 38,063 | 39,725 | ||||||
Dividend and distributions payable | 60,991 | 59,849 | ||||||
Other liabilities | 212,667 | 268,926 | ||||||
Total liabilities | 3,096,473 | 3,434,295 | ||||||
Minority interest | 369,839 | 372,621 | ||||||
Shareholders’ Equity | ||||||||
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 94,645,598 (includes 1,249,909 in treasury) and 92,817,879 (includes 1,249,909 in treasury) shares issued and outstanding as of September 30, 2008 and December 31, 2007, respectively | 94 | 93 | ||||||
Additional paid-in capital | 2,037,360 | 1,984,141 | ||||||
Accumulated other comprehensive income | 10,750 | 21,378 | ||||||
Distributions in excess of net income | (190,596 | ) | (116,640 | ) | ||||
Common shares in treasury, at cost, 1,249,909 shares as of September 30, 2008 and December 31, 2007 | (51,951 | ) | (51,951 | ) | ||||
Total shareholders’ equity | 1,805,657 | 1,837,021 | ||||||
Total liabilities & shareholders’ equity | $ | 5,271,969 | $ | 5,643,937 | ||||