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
FOURTH QUARTER AND FULL YEAR RESULTS
Malvern, PA, February 8, 2010 — Liberty Property Trust (NYSE:LRY) reported that funds from operations available to common shareholders (diluted) (“FFO”) for the fourth quarter of 2009 was a loss of $0.14 per share, compared to a profit of $0.80 per share for the fourth quarter of 2008. FFO for the fourth quarter includes a $94.5 million, non-cash impairment charge related to certain of the company’s investments in unconsolidated joint ventures and related goodwill. Excluding this impairment charge, FFO for the fourth quarter of 2009 would be $0.67 per share. Funds from operations for the fourth quarter also include termination fees of $1.7 million.
For the year ended December 31, 2009, FFO per share was $1.98. Excluding the $94.5 million non-cash impairment charge, FFO for the year ended December 31, 2009 would be $2.83 per share. This compares to FFO of $3.20 per share for 2008.
Net loss per common share (diluted) was $0.46 per share for the quarter ended December 31, 2009, compared to net income of $0.53 per share (diluted) for the quarter ended December 31, 2008. Net income for the full year 2009 was $0.52 per common share, compared with $1.62 per share for 2008. Adjusting for the non-cash impairment charge of $94.5 million, net income for the quarter ended December 31, 2009 would be $0.35 per share, and for the year ended December 31, 2009 it would be $1.37 per share.
“Fourth quarter activity was encouraging,” said Bill Hankowsky, chief executive officer. “At the end of the year we saw a marked increase in the number and quality of industrial prospects, coupled with renewed willingness on the part of companies to make commitments, in both the office and industrial sectors. This translated into very strong leasing performance. We believe that the market has bottomed, we are beginning to see very gradual recovery in the industrial sector, and we may see similar positive signs in the office sector in the second half of this year should the nation’s employment situation improve.”
Portfolio Performance
Leasing:At December 31, 2009, Liberty’s in-service portfolio of 78.2 million square feet was 89.2% occupied, compared to 89.3% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 4.7 million square feet of space.
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Liberty Property Trust Fourth Quarter 2009 Earnings -2-
Same Store Performance:Property level operating income for same store properties decreased by 1.4% on a cash basis and by 2.8% on a straight line basis for the fourth quarter of 2009 compared to the same quarter in 2008 and increased by 0.4% on a cash basis and 0.6% on a straight line basis for the full year 2009 compared to 2008.
Capital Activities and Balance Sheet Management
Property Sales:During the fourth quarter, Liberty sold seven operating properties, which contained 543,000 square feet of leaseable space, and 10.1 acres of land for $35.1 million.
Real Estate Investments
Development:During the fourth quarter, Liberty brought into service four development properties totaling 1.1 million square feet for a total investment of $121.4 million. These properties were 96.1% occupied as of December 31, 2009, at a yield of 9.1%.
A joint venture in which the company holds a 25% interest brought into service a 225,000 square foot development property during the quarter. This property is 9.6% leased. The projected stabilized yield on the $12.0 million investment is 7.4%.
No development commenced during the quarter.
As of December 31, 2009, Liberty had 1.0 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $243.5 million, with an expected yield of 6.2%. The properties were 34.1% leased at December 31.
Acquisitions:Liberty acquired no properties during the quarter.
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 78 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 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.
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Liberty Property Trust Fourth Quarter 2009 Earnings -3-
Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, February 9, 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: 51828607. 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
December 31, 2009
(In thousands, except per share amounts)
Statement of Operations
December 31, 2009
(In thousands, except per share amounts)
Quarter Ended | Year Ended | |||||||||||||||
December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||||
(Unaudited) | ||||||||||||||||
Operating Revenue | ||||||||||||||||
Rental | $ | 131,842 | $ | 128,649 | $ | 519,928 | $ | 507,698 | ||||||||
Operating expense reimbursement | 55,735 | 56,117 | 224,329 | 223,654 | ||||||||||||
Total operating revenue | 187,577 | 184,766 | 744,257 | 731,352 | ||||||||||||
Operating Expenses | ||||||||||||||||
Rental property | 40,191 | 39,101 | 149,968 | 149,170 | ||||||||||||
Real estate taxes | 20,007 | 19,682 | 86,676 | 83,762 | ||||||||||||
General and administrative | 12,792 | 14,133 | 51,250 | 54,467 | ||||||||||||
Depreciation and amortization | 42,801 | 41,757 | 170,764 | 169,190 | ||||||||||||
Total operating expenses | 115,791 | 114,673 | 458,658 | 456,589 | ||||||||||||
Operating Income | �� | 71,786 | 70,093 | 285,599 | 274,763 | |||||||||||
Other Income/Expense | ||||||||||||||||
Interest and other | 3,259 | 4,053 | 11,503 | 13,440 | ||||||||||||
Debt extinguishment gain | — | 2,521 | 1,547 | 2,521 | ||||||||||||
Interest | (38,283 | ) | (37,844 | ) | (149,569 | ) | (152,896 | ) | ||||||||
Total other income/expense | (35,024 | ) | (31,270 | ) | (136,519 | ) | (136,935 | ) | ||||||||
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures | 36,762 | 38,823 | 149,080 | 137,828 | ||||||||||||
Gain on property dispositions | 626 | 8,633 | 1,687 | 10,572 | ||||||||||||
Income taxes | (64 | ) | (273 | ) | (494 | ) | (1,645 | ) | ||||||||
Equity in earnings of unconsolidated joint ventures | 37 | 948 | 2,161 | 2,805 | ||||||||||||
Impairment charges — investment in unconsolidated joint ventures and other | (79,247 | ) | — | (82,552 | ) | — | ||||||||||
— goodwill | (15,700 | ) | — | (15,700 | ) | — | ||||||||||
Income from continuing operations | (57,586 | ) | 48,131 | 54,182 | 149,560 | |||||||||||
Discontinued operations (including net gain on property dispositions of $8,859 and $9,884 for the quarters ended December 31, 2009 and 2008 and $17,859 and $23,519 for the years ended December 31, 2009 and 2008) | 8,780 | 11,248 | 24,810 | 30,546 | ||||||||||||
Net Income | (48,806 | ) | 59,379 | 78,992 | 180,106 | |||||||||||
Noncontrolling interest — operating partnerships | (3,393 | ) | (7,396 | ) | (23,125 | ) | (27,681 | ) | ||||||||
Noncontrolling interest — consolidated joint ventures | 112 | (185 | ) | 509 | (483 | ) | ||||||||||
Net Income available to common shareholders | $ | (52,087 | ) | $ | 51,798 | $ | 56,376 | $ | 151,942 | |||||||
Basic income per common share | ||||||||||||||||
Continuing operations | $ | (0.54 | ) | $ | 0.42 | $ | 0.30 | $ | 1.31 | |||||||
Discontinued operations | $ | 0.08 | $ | 0.11 | $ | 0.22 | $ | 0.31 | ||||||||
Total basic income per common share | $ | (0.46 | ) | $ | 0.53 | $ | 0.52 | $ | 1.62 | |||||||
Diluted income per common share | ||||||||||||||||
Continuing operations | $ | (0.54 | ) | $ | 0.42 | $ | 0.30 | $ | 1.31 | |||||||
Discontinued operations | $ | 0.08 | $ | 0.11 | $ | 0.22 | $ | 0.31 | ||||||||
Total diluted income per common share | $ | (0.46 | ) | $ | 0.53 | $ | 0.52 | $ | 1.62 | |||||||
Weighted average shares | ||||||||||||||||
Basic | 112,159 | 97,434 | 107,550 | 93,615 | ||||||||||||
Diluted | 112,722 | 97,493 | 108,002 | 93,804 | ||||||||||||
Amounts attributable to common shareholders | ||||||||||||||||
Income from continuing operations | $ | (60,565 | ) | $ | 40,995 | $ | 32,444 | $ | 122,688 | |||||||
Discontinued operations | 8,478 | 10,803 | 23,932 | 29,254 | ||||||||||||
Net income | $ | (52,087 | ) | $ | 51,798 | $ | 56,376 | $ | 151,942 | |||||||
Liberty Property Trust
Statement of Funds From Operations
December 31, 2009
(Unaudited and in thousands, except per share amounts)
Statement of Funds From Operations
December 31, 2009
(Unaudited and in thousands, except per share amounts)
Quarter Ended | Year Ended | |||||||||||||||||||||||||||||||
December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||||||||
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 | $ | (52,087 | ) | $ | (0.46 | ) | $ | 51,798 | $ | 0.53 | $ | 56,376 | $ | 0.52 | $ | 151,942 | $ | 1.62 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated joint ventures | 4,067 | 4,027 | 16,180 | 16,235 | ||||||||||||||||||||||||||||
Depreciation and amortization | 42,206 | 42,597 | 170,633 | 173,400 | ||||||||||||||||||||||||||||
Gain on property dispositions | (8,380 | ) | (19,662 | ) | (23,197 | ) | (34,336 | ) | ||||||||||||||||||||||||
Minority interest share in addback for depreciation and amortization and gain on property dispositions | (1,304 | ) | (1,068 | ) | (5,801 | ) | (6,606 | ) | ||||||||||||||||||||||||
Funds from operations available to common shareholders — basic | $ | (15,498 | ) | $ | (0.14 | ) | $ | 77,692 | $ | 0.80 | $ | 214,191 | $ | 1.99 | $ | 300,635 | $ | 3.21 | ||||||||||||||
Reconciliation of net income to FFO — diluted: | ||||||||||||||||||||||||||||||||
Diluted — income available to common shareholders | $ | (52,087 | ) | $ | (0.46 | ) | $ | 51,798 | $ | 0.53 | $ | 56,376 | $ | 0.52 | $ | 151,942 | $ | 1.62 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization of unconsolidated joint ventures | 4,067 | 4,027 | 16,180 | 16,235 | ||||||||||||||||||||||||||||
Depreciation and amortization | 42,206 | 42,597 | 170,633 | 173,400 | ||||||||||||||||||||||||||||
Gain on property dispositions | (8,380 | ) | (19,662 | ) | (23,197 | ) | (34,336 | ) | ||||||||||||||||||||||||
Minority interest excluding preferred unit distributions | (1,860 | ) | 2,143 | 2,114 | 6,669 | |||||||||||||||||||||||||||
Funds from operations available to common shareholders — diluted | $ | (16,054 | ) | $ | (0.14 | )(1) | $ | 80,903 | $ | 0.80 | $ | 222,106 | $ | 1.98 | (1) | $ | 313,910 | $ | 3.20 | |||||||||||||
Reconciliation of weighted average shares: | ||||||||||||||||||||||||||||||||
Weighted average common shares — all basic calculations | 112,159 | 97,434 | 107,550 | 93,615 | ||||||||||||||||||||||||||||
Dilutive shares for long term compensation plans | 563 | 59 | 452 | 189 | ||||||||||||||||||||||||||||
Diluted shares for net income calculations | 112,722 | 97,493 | 108,002 | 93,804 | ||||||||||||||||||||||||||||
Weighted average common units | 4,016 | 4,189 | 4,018 | 4,190 | ||||||||||||||||||||||||||||
Diluted shares for funds from operations calculations | 116,738 | 101,682 | 112,020 | 97,994 | ||||||||||||||||||||||||||||
(1) | Excluding the $94.5 million non-cash impairment charge FFO for the quarter and year ended December 31, 2009 would have been $.67 and $2.83 per share, respectively. |
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, 2009
(In thousands, except share amounts)
Balance Sheet
December 31, 2009
(In thousands, except share amounts)
December 31, 2009 | December 31, 2008 | |||||||
Assets | ||||||||
Real estate: | ||||||||
Land and land improvements | $ | 850,559 | $ | 801,763 | ||||
Building and improvements | 4,410,254 | 4,191,361 | ||||||
Less: accumulated depreciation | (1,093,946 | ) | (963,043 | ) | ||||
Operating real estate | 4,166,867 | 4,030,081 | ||||||
Development in progress | 66,714 | 245,463 | ||||||
Land held for development | 218,633 | 209,551 | ||||||
Net real estate | 4,452,214 | 4,485,095 | ||||||
Cash and cash equivalents | 237,446 | 15,794 | ||||||
Restricted cash | 42,232 | 39,726 | ||||||
Accounts receivable | 4,591 | 12,985 | ||||||
Deferred rent receivable | 95,527 | 83,033 | ||||||
Deferred financing and leasing costs, net of accumulated amortization (2009, $133,429; 2008, $139,078) | 134,309 | 132,627 | ||||||
Investment in unconsolidated joint ventures | 175,584 | 266,602 | ||||||
Assets held for sale | — | 98,706 | ||||||
Prepaid expenses and other assets | 85,518 | 82,467 | ||||||
Total assets | $ | 5,227,421 | $ | 5,217,035 | ||||
Liabilities | ||||||||
Mortgage loans | $ | 473,993 | $ | 198,560 | ||||
Unsecured notes | 1,842,882 | 2,131,607 | ||||||
Credit facility | 140,000 | 260,000 | ||||||
Accounts payable | 31,195 | 32,481 | ||||||
Accrued interest | 31,251 | 36,474 | ||||||
Dividend and distributions payable | 55,402 | 48,858 | ||||||
Other liabilities | 169,529 | 182,549 | ||||||
Total liabilities | 2,744,252 | 2,890,529 | ||||||
Equity | ||||||||
Shareholders’ equity: | ||||||||
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 113,875,211 (includes 1,249,909 in treasury) and 100,034,404 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2009 and 2008, respectively | 114 | 101 | ||||||
Additional paid-in capital | 2,469,570 | 2,162,820 | ||||||
Accumulated other comprehensive income | 2,339 | (5,378 | ) | |||||
Distributions in excess of net income | (337,911 | ) | (185,721 | ) | ||||
Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2009 and 2008 | (51,951 | ) | (51,951 | ) | ||||
Total shareholders’ equity | 2,082,161 | 1,919,871 | ||||||
Noncontrolling interest — operating partnership | ||||||||
4,011,354 and 4,074,967 common units outstanding as of December 31, 2009 and 2008, respectively | 112,428 | 117,546 | ||||||
9,740,000 preferred units outstanding as of December 31, 2009 and 2008 | 287,959 | 287,959 | ||||||
Noncontrolling interest — consolidated joint ventures | 621 | 1,130 | ||||||
Total equity | 2,483,169 | 2,326,506 | ||||||
Total liabilities & equity | $ | 5,227,421 | $ | 5,217,035 | ||||