EXHIBIT 99.1
For Immediate Release Inquiries: Jeanne A. Leonard
February 10, 2003 Liberty Property Trust
610-648-1704
LIBERTY PROPERTY TRUST ANNOUNCES
FOURTH QUARTER AND FULL YEAR RESULTS
Malvern, PA -- Liberty Property Trust (NYSE:LRY) reported that funds
from operations (?FFO?) for the fourth quarter of 2002 decreased to
$.83 from $.86 for the fourth quarter of 2001. For the year ended
December 31, 2002, FFO per share increased to $3.45 per share from
$3.42 per share for 2001. The full-year 2002 results were positively
impacted by $.10 in lease termination fees. A reconciliation of FFO to
GAAP net income is included in the financial statements accompanying
this press release.
Net income per common share (diluted) decreased to $.43 per share for
the quarter ended December 31, 2002, from $.51 per share (diluted) for
the quarter ended December 31, 2001, and decreased to $2.02 per share
for the full year 2002 from $2.15 per share for 2001. The fourth
quarter and full year results include a $5.3 million impairment loss
due to the write-down of the book carrying value of certain land
parcels.
?Liberty?s seasoned team delivered a strong fourth quarter with 2.5
million square feet of leases executed,? commented William P.
Hankowsky, Liberty?s chief executive officer. ?This was despite the
economy?s uneven performance and the weak real estate markets, as
evidenced by increasing national vacancy rates. Our strategy and our
strong leasing and management teams continue to provide us with
resilience in these challenging times.?
PORTFOLIO PERFORMANCE
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LEASING: At December 31, Liberty?s in-service portfolio of 51 million
square feet was 90.7 percent occupied, up slightly from the third
quarter 2002 occupancy of 90.6 percent, and down from 94.1 percent at
the end of 2001. During the year, Liberty completed lease transactions
totaling over 10 million square feet of space. Rents on renewal and
replacement space increased an average of 2.8 percent.
SAME STORE PERFORMANCE: Property level operating income for same store
properties decreased by 1.9 percent on a cash basis and 1.8 percent on
a straight line basis for the quarter, and decreased by 1.2 percent on
a cash basis and 1.8 percent on a straight line basis for the full
year.
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REAL ESTATE INVESTMENTS
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DEVELOPMENT: During the fourth quarter, Liberty brought into service
eight development properties totaling one million square feet. The
properties were 76.9 percent occupied as of December 31, 2002, and were
yielding 7.2 percent on Liberty?s investment of $64.6 million. The
projected stabilized yield is 10.5 percent.
No new developments commenced during the quarter. As of quarter end,
Liberty had one million square feet under development, representing a
total investment of $195.7 million. These properties were 78.1 percent
leased at December 31.
For the full year, Liberty brought into service 38 development
properties totaling 3.2 million square feet. These properties are
currently 82.6 percent leased, are yielding 9.4 percent, and are
expected to produce a stabilized return of 12.2 percent on the
company?s $270 million investment.
ACQUISITIONS: During the fourth quarter, Liberty acquired two
properties for $31.8 million. These properties, which contain 610,000
square feet, are 45.5 percent leased, with a current yield of 3.2
percent and a projected stabilized yield of 10.7 percent.
Acquisitions for the full year totaled eight properties for $77.8
million. Three of these properties, totaling $20.4 million in
investment, were subsequently sold to a joint venture. The remaining
1.1 million square feet is 46 percent leased, is yielding 4.9 percent,
and is expected to produce a stabilized return of 10.7 percent.
FINANCING AND BALANCE SHEET ACTIVITY
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PROPERTY SALES: During the fourth quarter, Liberty sold four operating
properties containing 119,000 square feet and five acres of land for
$12 million.
For the full year, Liberty sold 12 operating properties containing
528,000 square feet of space and 62 acres of land for $49.1 million.
Liberty also sold a 47,000 square foot development property in the
United Kingdom for $29.0 million. Liberty?s share of the gain on sale
from this merchant building activity was $1.3 million and is included
in funds from operations.
During the fourth quarter, Liberty also sold or contributed 28
distribution properties containing 3.1 million square feet and 43 acres
of land to a joint venture for $122.9 million. Liberty retains a 25
percent ownership position in the venture and realized proceeds of
approximately $110 million from the transaction. The joint venture,
with Colorado Public Employees? Retirement Association, consists of
Liberty?s former southern New Jersey industrial portfolio.
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DEBT AND EQUITY: During the year ended December 31, 2002, the company
* raised $23.7 million through a private placement of 473,000,
7.625 percent Series D Cumulative Redeemable Preferrred Units;
* sold $150 million principal amount of 6.375 percent senior
unsecured notes due 2012; and
* redeemed for $125 million its outstanding 8.80 percent Series A
Cumulative Redeemable Preferred Shares.
DIVIDENDS
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Effective with the third quarter payment, Liberty increased its
quarterly dividend by 1.7 percent, from $0.59 to $0.60. This equates
to an annualized dividend of $2.40.
ABOUT THE COMPANY
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Liberty Property Trust (NYSE:LRY) is a leading real estate company
dedicated to enhancing people?s lives through extraordinary work
environments. Liberty's 51 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 1,900 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
on the Investor Relations page of the company?s web site at
www.libertyproperty.com. The fourth quarter supplemental package will
be available on-line by 8:00 a.m. on February 11, 2003. 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 fourth quarter results, on Tuesday, February 11, 2003, 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: 7529145. 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.
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
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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
DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
12/31/2002 12/31/2001
---------- ----------
Assets
Real estate:
Land and land improvements $ 504,808 $ 447,826
Building and improvements 3,048,676 2,778,430
Less: accumulated depreciation (485,206) (395,065)
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Operating real estate 3,068,278 2,831,191
Development in progress 163,379 252,789
Land held for development 163,142 163,547
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Net real estate 3,394,799 3,247,527
Cash and cash equivalents 11,071 19,390
Accounts receivable 14,349 15,470
Deferred financing and leasing costs, net of accumulated
amortization (2002, $75,833; 2001, $59,531) 71,544 66,991
Investment in unconsolidated joint ventures 14,963 -
Assets held for sale - 107,972
Prepaid expenses and other assets 120,335 95,475
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Total assets $3,627,061 $3,552,825
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Liabilities
Mortgage loans $ 315,263 $ 340,131
Unsecured notes 1,418,924 1,345,000
Credit facility 132,000 68,000
Accounts payable 24,116 19,057
Accrued interest 32,571 31,392
Dividend payable 48,040 47,577
Other liabilities 96,119 83,852
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Total liabilities 2,067,033 1,935,009
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Minority interest 208,439 194,394
Shareholders' Equity
Series A preferred shares, $.001 par value, 5,000,000
shares authorized, 5,000,000 shares issued and
outstanding as of December 31, 2001 - 120,814
Common shares of beneficial interest, $.001 par value,
191,200,000 shares authorized, 76,484,612 (includes
59,100 in treasury) and 73,721,045 (includes 59,100
in treasury) shares issued and outstanding as of
December 31, 2002 and 2001, respectively 76 74
Additional paid-in capital 1,410,900 1,336,350
Unearned compensation (1,750) (1,056)
Distributions in excess of net income (56,310) (31,433)
Common shares in treasury, at cost, 59,100 shares as of
December 31, 2002 and 2001 (1,327) (1,327)
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Total shareholders' equity 1,351,589 1,423,422
Total liabilities & shareholders' equity $3,627,061 $3,552,825
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LIBERTY PROPERTY TRUST
STATEMENT OF OPERATIONS
DECEMBER 31, 2002
(In thousands, except per share amounts)
Quarter Ended Year Ended
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12/31/2002 12/31/2002 12/31/2002 12/31/2001
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REVENUE
Rental $ 108,714 $ 105,719 $ 435,632 $ 416,521
Operating expense reimbursement 41,554 40,421 161,798 159,822
Equity in earnings of unconsolidated joint ventures 255 - 255 -
Interest and other 2,737 2,113 8,344 6,569
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Total revenue 153,260 148,253 606,029 582,912
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OPERATING EXPENSES
Rental property 30,175 28,620 112,408 110,778
Real estate taxes 15,465 14,589 60,307 56,172
Interest 31,115 28,176 116,625 111,179
General and administrative 5,675 4,878 22,492 21,049
Depreciation and amortization 28,477 26,828 110,386 101,778
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Total operating expenses 110,907 103,091 422,218 400,956
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Income before property dispositions
and minority interest 42,353 45,162 183,811 181,956
(Loss) gain on property dispositions,
net of impairment (5,128) (219) (9,300) 2,115
Minority interest (4,691) (4,650) (20,282) (19,086)
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Income from continuing operations 32,534 40,293 154,229 164,985
Discontinued operations net of minority interest
(including net gain on property dispositions
of $762 for the quarter ended December 31, 2002
and $6,959 for the year ended December 31, 2002) 787 409 7,436 1,552
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Net income 33,321 40,702 161,665 166,537
Preferred share distributions - (2,750) (7,242) (11,000)
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Income available to common shareholders $ 33,321 $ 37,952 $ 154,423 $ 155,537
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Basic income per common share:
Continuing operations $ 0.43 $ 0.51 $ 1.96 $ 2.17
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Discontinued operations $ 0.01 $ 0.01 $ 0.10 $ 0.02
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Total basic income per common share: $ 0.44 $ 0.52 $ 2.06 $ 2.19
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Diluted income per common share:
Continuing operations $ 0.42 $ 0.50 $ 1.92 $ 2.13
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Discontinued operations $ 0.01 $ 0.01 $ 0.10 $ 0.02
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Total diluted income per common share: $ 0.43 $ 0.51 $ 2.02 $ 2.15
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Adjustments:
Minority interest excluding preferred
unit distributions 1,625 2,019 7,803 8,559
Depreciation and amortization of
unconcolidated joint ventures 83 - 83 -
Depreciation and amortization 27,912 26,676 109,063 100,801
Loss (gain) on property dispositions,
net of impairment 4,366 219 4,845 (2,115)
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Funds from operations $ 67,307 $ 66,866 $ 276,217 $ 262,782
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Funds from operations per share - diluted (1) $ 0.83 $ 0.86 $ 3.45 $ 3.42
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Diluted weighted average shares 80,888 78,149 80,096 77,633
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(1) Add interest and amortization of deferred financing costs on debentures of $2,587 for the year ended
December 31, 2001 to calculate diluted per share amounts.