The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

Liberty Property Trust Announces Fourth Quarter And Full Year Results

Tuesday, February 05, 2013

Liberty Property Trust Announces Fourth Quarter And Full Year Results08:00 EST Tuesday, February 05, 2013MALVERN, Pa., Feb. 5, 2013 /PRNewswire/ -- Liberty Property Trust reported that funds from operations available to common shareholders (diluted) ("FFO") for the fourth quarter of 2012 was $0.63 per share, compared to $0.63 per share for the fourth quarter of 2011.For the year ended December 31, 2012, FFO per share was $2.58, and included $5.0 million in termination fees.  This compares to FFO of $2.61 per share for 2011, which included $4.1 million in termination fees.Net income per common share (diluted) was $0.32 per share for the quarter ended December 31, 2012, compared to $0.30 per share (diluted) for the quarter ended December 31, 2011.  Net income for the full year 2012 was $1.17 per common share, compared with $1.59 per share for 2011.  "Over the past two years, Liberty has made great strides in enhancing our portfolio quality and market position, and our portfolio continues to perform well in an unpredictable market," said Bill Hankowsky, chairman and chief executive officer. "Although economic uncertainty continues to constrain decision making, there is pent-up demand in the marketplace, and we expect this demand could more positively affect occupancies and development opportunities as the year goes on." Portfolio PerformanceLeasing: At December 31, 2012, Liberty's in-service portfolio of 81.3 million square feet was 92.1% occupied, compared to 91.8% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 4.9 million square feet of space. Liberty leased 18.5 million square feet in 2012.Same Store Performance: Property level operating income for same store properties decreased by 0.2% on a cash basis and decreased by 0.3% on a straight line basis for the fourth quarter of 2012 compared to the same quarter in 2011 and decreased by 0.3% on a cash basis and decreased by 0.8% on a straight line basis for the full year 2012 compared to 2011. Capital Activities and Balance Sheet ManagementProperty Sales: During the fourth quarter, Liberty sold two operating properties, which contained 257,000 square feet of leasable space for $17.7 million. The properties were 61.9% leased at the time of the sale. Senior Unsecured Notes: During the fourth quarter, Liberty issued $300 million of 10 ½ year 3.375% Senior Unsecured Notes. The net proceeds were used to repay borrowings under the company's unsecured credit facility and for general corporate purposes. Real Estate InvestmentsAcquisitions: During the quarter, Liberty acquired 22 industrial properties for $176.3 million. The properties total 3.5 million square feet of leasable space, and are 92.5% leased at a current yield of 6.8%. Development: In the fourth quarter, Liberty brought into service five development properties for a total investment of $44.1 million. The properties contain 290,000 square feet of leasable space and were 77.0% occupied and 97.7% leased as of December 31, 2012. The current yield on these properties is 8.5% and the projected stabilized yield is 10.5%. Also during the quarter, Liberty began development on one property for a projected investment of $11.6 million. The property is a 181,000 square foot industrial build-to-suit for GAC Industries in Houston, TX. Subsequent EventsLiberty has announced that it will begin development during the first quarter of 3 Quarry Ridge, a 200,000 square foot office building in Malvern, Pennsylvania. The property is 100% leased to the Vanguard Group and represents an investment of $55 million. About the CompanyLiberty 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 81 million square foot portfolio includes 680 properties which provide office, distribution and light manufacturing facilities to 1,800 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 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 fourth quarter results, on Tuesday, February 5, 2013, at 1 p.m. Eastern Time.  To access the conference call, please dial 855-277-7530. The passcode needed for access is 91553147. A replay of the call will be available until March 5, 2013, 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.  Liberty Property Trust  Statement of Operations December 31, 2012 (Unaudited and in thousands, except per share amounts)  Quarter Ended  Year ended December 31, 2012December 31, 2011December 31, 2012December 31, 2011 Operating Revenue  Rental  $                           121,709$                           118,171$                           478,835$                           464,053  Operating expense reimbursement54,51850,533206,717199,188 Total operating revenue 176,227168,704685,552663,241 Operating Expenses   Rental property37,70434,105133,630125,761 Real estate taxes 18,40718,33679,85976,982 General and administrative18,28616,54764,73059,367 Depreciation and amortization 42,92339,994165,628156,242 Total operating expenses 117,320108,982443,847418,352 Operating Income 58,90759,722241,705244,889 Other Income/Expense  Interest and other  1,3201,4729,2898,389 Interest  (29,738)(29,510)(119,630)(120,718) Total other income/expense (28,418)(28,038)(110,341)(112,329) Income before property dispositions, income taxes, noncontrolling interest     and equity in earnings of unconsolidated joint ventures 30,48931,684131,364132,560 Gain on property dispositions 1,3051,6644,1235,025 Income taxes (331)(51)(976)(1,020) Equity in earnings (loss) of unconsolidated joint ventures 7161,026(681)3,496 Income from continuing operations 32,17934,323133,830140,061 Discontinued operations (including net gains on property dispositions of $8,837 and $5,860 for the quarters ended December 31, 2012 and 2011 and net gains of $11,383 and $60,582 for the years ended December 31, 2012 and 2011)8,3926,92213,92170,649 Net Income 40,57141,245147,751210,710 Noncontrolling interest - operating partnerships (2,416)(6,453)(10,590)(27,222) Noncontrolling interest - consolidated joint ventures 275-275511 Net Income available to common shareholders     $                             38,430$                             34,792$                           137,436$                           183,999 Net income $                             40,571$                             41,245$                           147,751$                           210,710 Other comprehensive income (loss) 389(217)3,436(281) Comprehensive income 40,96041,028151,187210,429 Less: comprehensive income attributable to noncontrolling interest (2,153)(6,446)(10,422)(26,705) Comprehensive income attributable to common shareholders $                             38,807$                             34,582$                           140,765$                           183,724 Basic income per common share   Continuing operations $                                 0.26$                                 0.24$                                 1.06$                                 1.00 Discontinued operations $                                 0.07$                                 0.06$                                 0.12$                                 0.60 Total basic income per common share $                                 0.33$                                 0.30$                                 1.18$                                 1.60 Diluted income per common share  Continuing operations $                                 0.25$                                 0.24$                                 1.06$                                 1.00 Discontinued operations $                                 0.07$                                 0.06$                                 0.11$                                 0.59 Total diluted income per common share $                                 0.32$                                 0.30$                                 1.17$                                 1.59 Weighted average shares  Basic 117,556115,373116,863114,755 Diluted 118,378116,090117,694115,503 Amounts attributable to common shareholders      Income from continuing operations $                             30,293$                             28,090$                           123,945$                           115,653 Discontinued operations 8,1376,70213,49168,346 Net income $                             38,430$                             34,792$                           137,436$                           183,999   Liberty Property Trust  Statement of Funds From Operations December 31, 2012 (Unaudited and in thousands, except per share amounts)  Quarter Ended  Year ended December 31, 2012December 31, 2011December 31, 2012December 31, 2011Per Per Per Per WeightedWeightedWeightedWeighted Average   Average   Average   Average  DollarsShareDollarsShareDollarsShareDollarsShare Reconciliation of net income to FFO - basic:  Basic - income available to common shareholders $              38,430$             0.33$              34,792$                         0.30$        137,436$             1.18$        183,999$              1.60 Adjustments:  Depreciation and amortization of unconsolidated joint ventures 3,4133,54914,15214,452 Depreciation and amortization 42,51842,123164,615168,435 Gain on property dispositions/impairment (8,265)(6,066)(7,589)(61,198) Noncontrolling interest share in addback for depreciation and amortization  and gain on property dispositions/impairment (1,145)(1,258)(5,286)(3,926) Funds from operations available to common shareholders - basic $              74,951$             0.64$              73,140$                         0.63$        303,328$             2.60$        301,762$              2.63 Reconciliation of net income to FFO - diluted:  Diluted - income available to common shareholders $              38,430$             0.32$              34,792$                         0.30$        137,436$             1.17$        183,999$              1.59 Adjustments:  Depreciation and amortization of unconsolidated joint ventures 3,4133,54914,15214,452 Depreciation and amortization  42,51842,123164,615168,435 Gain on property dispositions/impairment (8,265)(6,066)(7,589)(61,198) Noncontrolling interest excluding preferred unit distributions  1,2051,1434,3786,153 Funds from operations available to common shareholders - diluted $              77,301$             0.63$              75,541$                         0.63$        312,992$             2.58$        311,841$              2.61 Reconciliation of weighted average shares:  Weighted average common shares - all basic calculations 117,556115,373116,863114,755 Dilutive shares for long term compensation plans 822717831748 Diluted shares for net income calculations 118,378116,090117,694115,503 Weighted average common units 3,7283,8093,7603,869 Diluted shares for Funds from operations calculations 122,106119,899121,454119,372The 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 TrustBalance Sheet December 31, 2012(Unaudited and in thousands, except share and unit amounts)December 31, 2012December 31, 2011AssetsReal estate:Land and land improvements$                         900,501$                         852,785Building and improvements4,353,4334,092,056Less: accumulated depreciation(1,170,030)(1,047,336)Operating real estate4,083,9043,897,505Development in progress248,60288,848Land held for development258,324219,375Net real estate4,590,8304,205,728Cash and cash equivalents38,35618,204Restricted cash33,14763,659Accounts receivable8,9888,192Deferred rent receivable108,628102,613Deferred financing and leasing costs, net of accumulatedamortization (2012, $136,706; 2011, $123,557)141,245129,614Investments in and advances to unconsolidated joint ventures169,021174,687Assets held for sale  -210,790Prepaid expenses and other assets87,75676,186Total assets$                      5,177,971$                      4,989,673LiabilitiesMortgage loans$                         302,855$                         290,819Unsecured notes2,262,5431,792,643Credit facility92,000139,400Accounts payable 31,05823,418Accrued interest20,16424,147Dividend and distributions payable58,03856,958Other liabilities185,956194,995Total liabilities2,952,6142,522,380Noncontrolling interest - operating partnership - 301,483 preferred unitsoutstanding as of December 31, 2012 and December 31, 20117,5377,537EquityShareholders' equity:Common shares of beneficial interest, $.001 par value, 183,987,000 sharesauthorized, 119,720,776 (includes 1,249,909 in treasury) and 117,352,353(includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively119117Additional paid-in capital2,687,7012,617,355Accumulated other comprehensive income (loss)2,900(429)Distributions in excess of net income(547,757)(461,498)Common shares in treasury, at cost, 1,249,909 shares as ofDecember 31, 2012 and December 31, 2011(51,951)(51,951)Total shareholders' equity2,091,0122,103,594Noncontrolling interest - operating partnership3,713,851 and 3,808,746 common units outstanding as of December 31, 2012 and December 31, 2011, respectively60,22364,4281,290,000 and 9,740,000 preferred units outstanding as of December 31, 2012 and December 31, 2011, respectively63,264287,959Noncontrolling interest - consolidated joint ventures3,3213,775Total equity2,217,8202,459,756Total liabilities, noncontrolling interest - operating partnership & equity$                      5,177,971$                      4,989,673SOURCE Liberty Property TrustFor further information: Jeanne A. Leonard, Liberty Property Trust, +1-610-648-1704