Liberty Property Limited Partnership Inactive
Filed: 23 Oct 12, 12:00am
Exhibit 99.1
| Inquiries: | Jeanne A. Leonard |
|
| Liberty Property Trust |
|
| 610/648-1704 |
LIBERTY PROPERTY TRUST ANNOUNCES THIRD QUARTER RESULTS
Malvern, PA, October 23, 2012 — Liberty Property Trust (NYSE:LRY) reported that funds from operations available to common shareholders (diluted) (“FFO”) for the third quarter of 2012 was $0.64 per share, compared to $0.64 per share for the same period in 2011. Funds from operations for the third quarter of 2012 include lease termination fees of $0.9 million.
FFO per share for the nine-month period ended September 30, 2012 was $1.94, compared to $1.98 per share for the same period in 2011.
Net income per common share (diluted) was $0.24 per share for the quarter ended September 30, 2012, compared to $0.31 per share for the quarter ended September 30, 2011. Net income for the nine-month period ended September 30, 2012 was $0.84 per share, compared with $1.29 per share for the same period in 2011. Net income per common share (diluted) for the nine months ended September 30, 2012 and September 30, 2011 includes net gains on property dispositions of $5.4 million ($0.05 per share) and $58.1 million ($0.50 per share), respectively.
“The economy continues to improve at a very slow pace, resulting in occupancy gains in the industrial portfolio offset by decreases in rental rates on signed leases in certain office markets,” said Bill Hankowsky, chairman and chief executive officer. “As far as external growth is concerned, we continue to see solid demand for high-quality industrial space from large corporate users and build-to suit opportunities for both industrial and office users. Our growing development pipeline is now delivering new product into service at solid returns.”
Portfolio Performance
Leasing: At September 30, 2012, Liberty’s in-service portfolio of 78 million square feet was 91.8% occupied, compared to 90.7% at the end of the second quarter. During the third quarter, Liberty completed lease transactions totaling 3.8 million square feet of space.
Same Store Performance: Property level operating income for same store properties increased by 0.3% on a cash basis and decreased by 0.3% on a straight line basis for the third quarter of 2012 compared to the same quarter in 2011.
Portfolio Activity
Development: Liberty brought into service two development properties representing a total investment of $15.7 million. These two build-to-suit developments total 282,000 square feet and were completed at current yield of 8.6%.
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Liberty Property Trust
Third Quarter 2012 Earnings
Liberty commenced development of three properties totaling 530,000 square feet at a projected investment of $55.5 million. The new development properties include a 100% pre-leased, 139,000 square foot office building in Phoenix, AZ, and two industrial distribution buildings in Houston, TX and Rogers, MN totaling 391,000 square feet which are being developed for inventory.
Acquisitions: Liberty purchased one distribution building totaling 232,000 square feet in Phoenix, AZ for $6.4 million. The property was 18% leased at purchase with an in-place yield of 3.2%. Liberty has subsequently leased an additional 20% of the property, and will also be commencing a significant renovation to provide cross-docking capabilities and truck storage. The expected stabilized yield is 8.3%.
Dispositions: During the quarter, Liberty sold 49 acres of land for $2.7 million
Balance Sheet and Capital Management
During the quarter, Liberty repaid its 6.375% Senior Notes due August 2012 in the amount of $230.1 million.
Earnings Outlook
Liberty expects to report funds from operations for the fourth quarter of 2012 in the range of $0.62 - $0.64, and for the full year 2012 in the range of $2.57 - $2.59 share. Guidance assumes that $167 million in acquisitions will be completed in the fourth quarter. A reconciliation of FFO to GAAP net income for the respective periods is below:
|
| 4Q 2012 Range |
| FY 2012 Range |
| ||||||||
|
| Low |
| High |
| Low |
| High |
| ||||
Projected net income per share |
| $ | 0.35 |
| $ | 0.36 |
| $ | 1.19 |
| $ | 1.20 |
|
Depreciation and amortization of unconsolidated joint ventures |
| 0.03 |
| 0.03 |
| 0.12 |
| 0.13 |
| ||||
Depreciation and amortization |
| 0.34 |
| 0.35 |
| 1.39 |
| 1.40 |
| ||||
Gain on property dispositions |
| (0.09 | ) | (0.09 | ) | (0.09 | ) | (0.10 | ) | ||||
Minority interest share of addbacks |
| (0.01 | ) | (0.01 | ) | (0.04 | ) | (0.04 | ) | ||||
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|
|
|
|
|
|
|
| ||||
Projected funds from operations per share |
| $ | 0.62 |
| $ | 0.64 |
| $ | 2.57 |
| $ | 2.59 |
|
Earnings Guidance for 2013 will be provided on December 11, 2012.
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 consists of 650 properties providing office, distribution and light manufacturing facilities to 1,800 tenants.
-more-
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 third quarter results on Tuesday, October 23, 2012, at 1 p.m. Eastern Time. To access the conference call, please dial 1-888-870-2815. The passcode needed for access is 36148768. A replay of the call will be available until November 23, 2012, 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.
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Liberty Property Trust
Statement of Operations
September 30, 2012
(Unaudited and in thousands, except per share amounts)
|
| Quarter Ended |
| Nine months ended |
| ||||||||
|
| September 30, 2012 |
| September 30, 2011 |
| September 30, 2012 |
| September 30, 2011 |
| ||||
|
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|
| ||||
Operating Revenue |
|
|
|
|
|
|
|
|
| ||||
Rental |
| $ | 119,334 |
| $ | 115,760 |
| $ | 357,126 |
| $ | 345,882 |
|
Operating expense reimbursement |
| 52,392 |
| 49,432 |
| 152,200 |
| 148,655 |
| ||||
Total operating revenue |
| 171,726 |
| 165,192 |
| 509,326 |
| 494,537 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating Expenses |
|
|
|
|
|
|
|
|
| ||||
Rental property |
| 34,635 |
| 31,876 |
| 95,926 |
| 91,657 |
| ||||
Real estate taxes |
| 20,292 |
| 19,755 |
| 61,452 |
| 58,646 |
| ||||
General and administrative |
| 14,621 |
| 13,617 |
| 46,444 |
| 42,819 |
| ||||
Depreciation and amortization |
| 40,929 |
| 38,922 |
| 122,705 |
| 116,247 |
| ||||
Total operating expenses |
| 110,477 |
| 104,170 |
| 326,527 |
| 309,369 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating Income |
| 61,249 |
| 61,022 |
| 182,799 |
| 185,168 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other Income/Expense |
|
|
|
|
|
|
|
|
| ||||
Interest and other |
| 2,642 |
| 1,989 |
| 7,969 |
| 6,918 |
| ||||
Interest |
| (30,704 | ) | (29,173 | ) | (89,892 | ) | (90,198 | ) | ||||
Total other income/expense |
| (28,062 | ) | (27,184 | ) | (81,923 | ) | (83,280 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before property dispositions, income taxes, noncontrolling interest and equity in earnings of unconsolidated joint ventures |
| 33,187 |
| 33,838 |
| 100,876 |
| 101,888 |
| ||||
Gain on property dispositions |
| 2,001 |
| 1,898 |
| 2,859 |
| 3,361 |
| ||||
Income taxes |
| (321 | ) | (356 | ) | (645 | ) | (969 | ) | ||||
Equity in (loss) earnings of unconsolidated joint ventures |
| (3,082 | ) | 827 |
| (1,397 | ) | 2,470 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations |
| 31,785 |
| 36,207 |
| 101,693 |
| 106,750 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Discontinued operations (including net loss on property dispositions of $1,540 for the quarter ended September 30, 2012 and net gain of $4,095 for the quarter ended September 30, 2011 and net gain of $2,505 and $54,722 for the nine month periods ended September 30, 2012 and 2011) |
| (1,887 | ) | 5,474 |
| 5,487 |
| 62,715 |
| ||||
Net Income |
| 29,898 |
| 41,681 |
| 107,180 |
| 169,465 |
| ||||
Noncontrolling interest - operating partnerships |
| (2,092 | ) | (6,414 | ) | (8,174 | ) | (20,769 | ) | ||||
Noncontrolling interest - consolidated joint ventures |
| — |
| 53 |
| — |
| 511 |
| ||||
Net Income available to common shareholders |
| $ | 27,806 |
| $ | 35,320 |
| $ | 99,006 |
| $ | 149,207 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 29,898 |
| $ | 41,681 |
| $ | 107,180 |
| $ | 169,465 |
|
Other comprehensive income (loss) |
| 2,245 |
| (2,247 | ) | 3,047 |
| (64 | ) | ||||
Comprehensive income |
| 32,143 |
| 39,434 |
| 110,227 |
| 169,401 |
| ||||
Less: comprehensive income attributable to noncontrolling interest |
| (2,161 | ) | (6,342 | ) | (8,269 | ) | (20,769 | ) | ||||
Comprehensive income attributable to common shareholders |
| $ | 29,982 |
| $ | 33,092 |
| $ | 101,958 |
| $ | 148,632 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic income per common share |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 0.26 |
| $ | 0.26 |
| $ | 0.80 |
| $ | 0.77 |
|
Discontinued operations |
| $ | (0.02 | ) | $ | 0.05 |
| $ | 0.05 |
| $ | 0.53 |
|
Total basic income per common share |
| $ | 0.24 |
| $ | 0.31 |
| $ | 0.85 |
| $ | 1.30 |
|
|
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|
|
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|
|
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| ||||
Diluted income per common share |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 0.26 |
| $ | 0.26 |
| $ | 0.79 |
| $ | 0.76 |
|
Discontinued operations |
| $ | (0.02 | ) | $ | 0.05 |
| $ | 0.05 |
| $ | 0.53 |
|
Total diluted income per common share |
| $ | 0.24 |
| $ | 0.31 |
| $ | 0.84 |
| $ | 1.29 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 117,141 |
| 115,014 |
| 116,625 |
| 114,547 |
| ||||
Diluted |
| 118,043 |
| 115,780 |
| 117,462 |
| 115,329 |
| ||||
|
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|
|
|
|
|
|
|
| ||||
Amounts attributable to common shareholders |
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations |
| $ | 29,635 |
| $ | 30,021 |
| $ | 93,689 |
| $ | 88,537 |
|
Discontinued operations |
| (1,829 | ) | 5,299 |
| 5,317 |
| 60,670 |
| ||||
Net income |
| $ | 27,806 |
| $ | 35,320 |
| $ | 99,006 |
| $ | 149,207 |
|
Liberty Property Trust
Statement of Funds From Operations
September 30, 2012
(Unaudited and in thousands, except per share amounts)
|
| Quarter Ended |
| Nine months ended |
| ||||||||||||||||||||
|
| September 30, 2012 |
| September 30, 2011 |
| September 30, 2012 |
| September 30, 2011 |
| ||||||||||||||||
|
|
|
| Per |
|
|
| Per |
|
|
| Per |
|
|
| Per |
| ||||||||
|
|
|
| Weighted |
|
|
| Weighted |
|
|
| Weighted |
|
|
| Weighted |
| ||||||||
|
|
|
| Average |
|
|
| Average |
|
|
| Average |
|
|
| Average |
| ||||||||
|
| Dollars |
| Share |
| Dollars |
| Share |
| Dollars |
| Share |
| Dollars |
| Share |
| ||||||||
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|
|
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|
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| ||||||||
Reconciliation of net income to FFO - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic - income available to common shareholders |
| $ | 27,806 |
| $ | 0.24 |
| $ | 35,320 |
| $ | 0.31 |
| $ | 99,006 |
| $ | 0.85 |
| $ | 149,207 |
| $ | 1.30 |
|
|
|
|
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|
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| ||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization of unconsolidated joint ventures |
| 3,569 |
|
|
| 3,585 |
|
|
| 10,739 |
|
|
| 10,903 |
|
|
| ||||||||
Depreciation and amortization |
| 40,631 |
|
|
| 41,147 |
|
|
| 122,097 |
|
|
| 126,312 |
|
|
| ||||||||
Gain on property dispositions/impairment |
| 4,759 |
|
|
| (4,090 | ) |
|
| 676 |
|
|
| (55,132 | ) |
|
| ||||||||
Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions/impairment |
| (1,504 | ) |
|
| (1,296 | ) |
|
| (4,141 | ) |
|
| (2,668 | ) |
|
| ||||||||
Funds from operations available to common shareholders - basic |
| $ | 75,261 |
| $ | 0.64 |
| $ | 74,666 |
| $ | 0.65 |
| $ | 228,377 |
| $ | 1.96 |
| $ | 228,622 |
| $ | 2.00 |
|
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|
|
|
|
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Reconciliation of net income to FFO - diluted: |
|
|
|
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|
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|
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|
|
|
|
|
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| ||||||||
Diluted - income available to common shareholders |
| $ | 27,806 |
| $ | 0.24 |
| $ | 35,320 |
| $ | 0.31 |
| $ | 99,006 |
| $ | 0.84 |
| $ | 149,207 |
| $ | 1.29 |
|
|
|
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| ||||||||
Adjustments: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization of unconsolidated joint ventures |
| 3,569 |
|
|
| 3,585 |
|
|
| 10,739 |
|
|
| 10,903 |
|
|
| ||||||||
Depreciation and amortization |
| 40,631 |
|
|
| 41,147 |
|
|
| 122,097 |
|
|
| 126,312 |
|
|
| ||||||||
Gain on property dispositions/impairment |
| 4,759 |
|
|
| (4,090 | ) |
|
| 676 |
|
|
| (55,132 | ) |
|
| ||||||||
Noncontrolling interest excluding preferred unit distributions |
| 881 |
|
|
| 1,161 |
|
|
| 3,173 |
|
|
| 5,010 |
|
|
| ||||||||
Funds from operations available to common shareholders - diluted |
| $ | 77,646 |
| $ | 0.64 |
| $ | 77,123 |
| $ | 0.64 |
| $ | 235,691 |
| $ | 1.94 |
| $ | 236,300 |
| $ | 1.98 |
|
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Reconciliation of weighted average shares: |
|
|
|
|
|
|
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|
|
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| ||||||||
Weighted average common shares - all basic calculations |
| 117,141 |
|
|
| 115,014 |
|
|
| 116,625 |
|
|
| 114,547 |
|
|
| ||||||||
Dilutive shares for long term compensation plans |
| 902 |
|
|
| 766 |
|
|
| 837 |
|
|
| 782 |
|
|
| ||||||||
Diluted shares for net income calculations |
| 118,043 |
|
|
| 115,780 |
|
|
| 117,462 |
|
|
| 115,329 |
|
|
| ||||||||
Weighted average common units |
| 3,739 |
|
|
| 3,816 |
|
|
| 3,771 |
|
|
| 3,890 |
|
|
| ||||||||
Diluted shares for Funds from operations calculations |
| 121,782 |
|
|
| 119,596 |
|
|
| 121,233 |
|
|
| 119,219 |
|
|
| ||||||||
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, 2012
(In thousands, except share and unit amounts)
|
| September 30, 2012 |
| December 31, 2011 |
| ||
|
| (unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Real estate: |
|
|
|
|
| ||
Land and land improvements |
| $ | 865,657 |
| $ | 852,785 |
|
Building and improvements |
| 4,156,848 |
| 4,092,056 |
| ||
Less: accumulated depreciation |
| (1,135,002 | ) | (1,047,336 | ) | ||
|
|
|
|
|
| ||
Operating real estate |
| 3,887,503 |
| 3,897,505 |
| ||
|
|
|
|
|
| ||
Development in progress |
| 249,129 |
| 88,848 |
| ||
Land held for development |
| 227,469 |
| 219,375 |
| ||
|
|
|
|
|
| ||
Net real estate |
| 4,364,101 |
| 4,205,728 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents |
| 34,069 |
| 18,204 |
| ||
Restricted cash |
| 37,972 |
| 63,659 |
| ||
Accounts receivable |
| 6,965 |
| 8,192 |
| ||
Deferred rent receivable |
| 107,813 |
| 102,613 |
| ||
Deferred financing and leasing costs, net of accumulated amortization (2012, $131,604; 2011, $123,557) |
| 130,761 |
| 129,614 |
| ||
Investments in and advances to unconsolidated joint ventures |
| 169,507 |
| 174,687 |
| ||
Assets held for sale |
| 8,671 |
| 210,790 |
| ||
Prepaid expenses and other assets |
| 96,506 |
| 76,186 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 4,956,365 |
| $ | 4,989,673 |
|
|
|
|
|
|
| ||
Liabilities |
|
|
|
|
| ||
Mortgage loans |
| $ | 290,197 |
| $ | 290,819 |
|
Unsecured notes |
| 1,962,543 |
| 1,792,643 |
| ||
Credit facility |
| 150,000 |
| 139,400 |
| ||
Accounts payable |
| 58,804 |
| 23,418 |
| ||
Accrued interest |
| 36,177 |
| 24,147 |
| ||
Dividend and distributions payable |
| 58,869 |
| 56,958 |
| ||
Other liabilities |
| 173,758 |
| 194,995 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 2,730,348 |
| 2,522,380 |
| ||
|
|
|
|
|
| ||
Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of September 30, 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, 119,146,729 (includes 1,249,909 in treasury) and 117,352,353 (includes 1,249,909 in treasury) shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively |
| 119 |
| 117 |
| ||
Additional paid-in capital |
| 2,669,676 |
| 2,617,355 |
| ||
Accumulated other comprehensive income (loss) |
| 2,523 |
| (429 | ) | ||
Distributions in excess of net income |
| (529,913 | ) | (461,498 | ) | ||
Common shares in treasury, at cost, 1,249,909 shares as of September 30, 2012 and December 31, 2011 |
| (51,951 | ) | (51,951 | ) | ||
Total shareholders’ equity |
| 2,090,454 |
| 2,103,594 |
| ||
|
|
|
|
|
| ||
Noncontrolling interest - operating partnership |
|
|
|
|
| ||
3,736,746 and 3,808,746 common units outstanding as of September 30, 2012 and December 31, 2011, respectively |
| 60,987 |
| 64,428 |
| ||
1,290,000 and 9,740,000 preferred units outstanding as of September 30, 2012 and December 31, 2011, respectively |
| 63,264 |
| 287,959 |
| ||
Noncontrolling interest - consolidated joint ventures |
| 3,775 |
| 3,775 |
| ||
|
|
|
|
|
| ||
Total equity |
| 2,218,480 |
| 2,459,756 |
| ||
|
|
|
|
|
| ||
Total liabilities, noncontrolling interest - operating partnership & equity |
| $ | 4,956,365 |
| $ | 4,989,673 |
|