[LIBERTY PROPERTY TRUST LOGO] Press Release
Inquiries: Jeanne A. Leonard
Liberty Property Trust
610/648-1704
For immediate release
April 26, 2004
LIBERTY PROPERTY TRUST ANNOUNCES
FIRST QUARTER 2004 RESULTS
Malvern, PA -- Liberty Property Trust (NYSE:LRY) reported that net income per
common share (diluted) was $.45 per share for the quarter ended March 31, 2004,
compared to $.53 per share (diluted) for the quarter ended March 31, 2003.
Funds from operations available to common shareholders ("FFO") (diluted) for the
first quarter of 2004 was $.81 per share, compared to $.88 per share for the
first quarter of 2003. A reconciliation of GAAP net income to FFO is included in
the financial tables accompanying this press release.
Operating results for the first quarter of 2004 include lease termination fees
of $1.8 million, and $1.2 million in development profit in conjunction with the
County of Kent's sale of residential land at Liberty's Kings Hill business park
development in the United Kingdom.
"Our first quarter results affirmed our overall sense of 2004. Leasing
productivity was on target, but the overall real estate environment remains
acutely competitive," said Bill Hankowsky, chief executive officer. "We continue
to believe this year will provide increased development opportunities, but our
focus will remain on leasing the core portfolio."
REAL ESTATE INVESTMENTS
DEVELOPMENT: During the first quarter, Liberty brought into service two
development properties totaling 104,000 square feet. The properties were 94.5
percent leased as of March 31, 2004, and were producing a return of 10.3 percent
on the company's investment of $10.2 million.
During the quarter, Liberty commenced one new development project representing a
total investment of $5.4 million. The project is a 101,000 square foot
distribution facility in Toano, Virginia for Wythe-Will Distributing Company. As
of quarter end, Liberty had 1.5 million square feet under development,
representing a total investment of $127.5 million. These properties were 62.6
percent leased at March 31, 2004.
ACQUISITIONS: During the first quarter, Liberty acquired three properties for
$24.9 million. These properties, which contain 238,000 square feet, are 60.2
percent leased with a current yield of 7.8 percent and a projected stabilized
yield of 11.0 percent.
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LRY First Quarter Results
Page 2
DISPOSITIONS: During the first quarter, Liberty sold two properties containing
71,000 square feet, and 7 acres of land for $6.4 million.
PORTFOLIO PERFORMANCE
LEASING: At March 31, 2004, Liberty's in-service portfolio of 57 million square
feet was 91.5 percent occupied. During the quarter, Liberty completed lease
transactions totaling 2.5 million square feet of space.
SAME STORE PERFORMANCE: Property level operating income for same store
properties increased by 0.2 percent on a cash basis and decreased by 0.3 percent
on a straight line basis for the first quarter of 2004 compared to the same
quarter in 2003.
ABOUT THE COMPANY
Liberty Property Trust (NYSE:LRY) is a leading real estate company dedicated to
enhancing people's lives through extraordinary work environments. Liberty's 57
million square foot portfolio of office and industrial properties offers
exceptional locations, flexible design, thoughtful amenities, superior service,
and state-of-the-art technology to the company's 2,000 tenants. Liberty
increases the value of this portfolio through expert property management,
marketing and development.
Additional information about the Company, including Liberty's Quarterly
Supplemental Package with detailed financial information is available in the
Investor section of the Company's web site at www.libertyproperty.com. The first
quarter supplemental package will be available on-line by 8:00 a.m. on April 27,
2004. If you are unable to access the web site, a copy of the supplemental
package may be obtained by contacting Liberty by phone at 610-648-1708, or by
e-mail to eshoemaker@libertyproperty.com..
Liberty will host a conference call during which management will discuss first
quarter results, on Tuesday, April 27, 2004, at 2:00 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: 6432285. The call can also be accessed live
via the Internet on the Investor Relations page of Liberty's web site at
www.libertyproperty.com for one week following the call.
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LRY First Quarter Results
Page 3
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
BALANCE SHEET
MARCH 31, 2004
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
MARCH 31, 2004 DECEMBER 31, 2003
-------------- -----------------
(UNAUDITED)
ASSETS
Real estate:
Land and land improvements $ 571,819 $ 564,332
Building and improvements 3,398,613 3,363,608
Less: accumulated depreciation (613,856) (586,736)
-------------- -----------------
Operating real estate 3,356,576 3,341,204
Development in progress 68,051 56,869
Land held for development 163,166 162,483
-------------- -----------------
Net real estate 3,587,793 3,560,556
Cash and cash equivalents 34,505 21,809
Restricted cash 22,696 15,292
Accounts receivable 14,947 10,896
Deferred rent receivable 60,647 58,015
Deferred financing and leasing costs, net of accumulated
amortization (2004, $94,515; 2003, $89,650) 98,580 98,506
Investment in unconsolidated joint ventures 20,575 19,631
Prepaid expenses and other assets 53,872 49,303
-------------- -----------------
Total assets $ 3,893,615 $ 3,834,008
============== =================
LIABILITIES
Mortgage loans $ 375,037 $ 363,866
Unsecured notes 1,355,000 1,355,000
Credit facility 183,000 167,000
Accounts payable 35,487 14,685
Accrued interest 19,777 31,622
Dividend payable 53,191 52,384
Other liabilities 91,553 96,887
-------------- -----------------
Total liabilities 2,113,045 2,081,444
-------------- -----------------
Minority interest 208,040 207,667
SHAREHOLDERS' EQUITY
Common shares of beneficial interest, $.001 par value, 191,200,000 shares
authorized, 84,282,457 (includes 59,100 in treasury) and 83,071,491
(includes 59,100 in treasury) shares issued and outstanding as of
March 31, 2004 and December 31, 2003, respectively 84 83
Additional paid-in capital 1,659,380 1,623,446
Accumulated other comprehensive income 19,182 14,710
Unearned compensation (8,174) (3,497)
Distributions in excess of net income (96,615) (88,518)
Common shares in treasury, at cost, 59,100 shares as of
March 31, 2004 and December 31, 2003 (1,327) (1,327)
-------------- -----------------
Total shareholders' equity 1,572,530 1,544,897
Total liabilities & shareholders' equity $ 3,893,615 $ 3,834,008
============== =================
LIBERTY PROPERTY TRUST
STATEMENT OF OPERATIONS
MARCH 31, 2004
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED
----------------------------------
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
OPERATING REVENUE
Rental $ 116,078 $ 112,413
Operating expense reimbursement 46,236 43,750
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Total operating revenue 162,314 156,163
-------------- --------------
OPERATING EXPENSES
Rental property 34,761 32,243
Real estate taxes 15,846 14,696
General and administrative 8,482 5,850
Depreciation and amortization 32,764 28,681
-------------- --------------
Total operating expenses 91,853 81,470
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Operating Income 70,461 74,693
OTHER INCOME/EXPENSE
Interest and other 2,597 1,909
Interest (30,699) (30,487)
-------------- --------------
Total other income/expense (28,102) (28,578)
-------------- --------------
Income before property dispositions, income taxes, minority interest
and income from investments in unconsolidated joint ventures 42,359 46,115
(Loss) gain on property dispositions (330) 598
Income taxes (389) (578)
Minority interest (4,578) (5,587)
Equity in earnings of unconsolidated joint ventures (405) 442
-------------- --------------
Income from continuing operations 36,657 40,990
Discontinued operations net of minority interest (including net gain on property
dispositions of $2,097 and $163 for the quarters ended March 31, 2004 and 2003) 2,014 597
-------------- --------------
INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 38,671 $ 41,587
============== ==============
BASIC INCOME PER COMMON SHARE
Continuing operations $ 0.44 $ 0.53
============== ==============
Discontinued operations $ 0.02 $ 0.01
============== ==============
TOTAL BASIC INCOME PER COMMON SHARE $ 0.46 $ 0.54
============== ==============
DILUTED INCOME PER COMMON SHARE
Continuing operations $ 0.43 $ 0.52
============== ==============
Discontinued operations $ 0.02 $ 0.01
============== ==============
TOTAL DILUTED INCOME PER COMMON SHARE $ 0.45 $ 0.53
============== ==============
WEIGHTED AVERAGE SHARES
Basic 83,480 76,814
============== ==============
Diluted 85,102 77,851
============== ==============
LIBERTY PROPERTY TRUST
STATEMENT OF FUNDS FROM OPERATIONS
MARCH 31, 2004
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED
------------------------------------------------------
MARCH 31, 2004 MARCH 31, 2003
------------------------- -------------------------
PER WEIGHTED PER WEIGHTED
DOLLARS AVERAGE SHARE DOLLARS AVERAGE SHARE
------- ------------- ------- -------------
RECONCILIATION OF NET INCOME TO FFO - BASIC:
BASIC - INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 38,671 $ 0.46 $ 41,587 $ 0.54
====== ======
Adjustments:
Depreciation and amortization of unconsolidated joint ventures 886 166
Depreciation and amortization 32,012 28,463
Gain on property dispositions (1,767) (178)
Minority interest share in addback for depreciation and
amortization, and gain on property dispositions (1,311) (1,286)
-------- ------ -------- ------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS - BASIC $ 68,491 $ 0.82 $ 68,752 $ 0.90
======== ====== ======== ======
RECONCILIATION OF NET INCOME TO FFO - DILUTED:
DILUTED - INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 38,671 $ 0.45 $ 41,587 $ 0.53
====== ======
Adjustments:
Depreciation and amortization of unconsolidated joint ventures 886 166
Depreciation and amortization 32,012 28,463
Gain on property dispositions (1,767) (178)
Minority interest excluding preferred share distributions 1,694 1,993
-------- ------ -------- ------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS - DILUTED $ 71,496 $ 0.81 $ 72,031 $ 0.88
======== ====== ======== ======
RECONCILIATION OF WEIGHTED AVERAGE SHARES:
Weighted average common shares - all basic calculations 83,480 76,814
Dilutive shares for long term compensation plans 1,622 1,037
-------- --------
Diluted shares for net income calculations 85,102 77,851
Weighted average common units 3,698 3,711
-------- --------
Diluted shares for funds from operations calculations 88,800 81,562
======== ========
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 REIT's 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.