MALVERN, Pa., April 26 /PRNewswire-FirstCall/ -- Liberty Property Trust reported that net income per common share (diluted) was $0.26 per share for the quarter ended March 31, 2010, compared to $0.28 per share (diluted) for the quarter ended March 31, 2009.
Funds from operations available to common shareholders (diluted) ("FFO") for the first quarter of 2010 was $0.64 per share, compared to $0.72 per share for the first quarter of 2009. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release. Funds from operations for the first quarter include termination fees of $1.8 million, and $1.7 million of additional compensation due to the accelerated vesting of long-term incentive compensation, due to the years of service and ages of certain employees.
"Liberty continues to perform well in a market which is poised for recovery but at the moment is still bouncing along the bottom," said Bill Hankowsky, chairman and chief executive officer. "Occupancy decreased slightly as expected, but rental rates declines have moderated, and fundamental indicators of future growth such as prospect activity, are positive. With a strong balance sheet, access to capital, and anticipated increases in portfolio occupancy, we are in an excellent position to take advantage of growth opportunities as the economic recovers."
Portfolio Performance
Leasing: At March 31, 2010 Liberty's in-service portfolio of 78.2 million square feet was 88.2% occupied, compared to 89.2% at the end of last year. During the quarter, Liberty completed lease transactions totaling 3.9 million square feet of space.
Same Store Performance: Property level operating income for same store properties decreased by 2.3% on a cash basis and decreased by 3.6% on a straight line basis for the first quarter of 2010 compared to the same quarter in 2009.
Real Estate Investments
Development: During the first quarter, Liberty brought into service one development property totaling 95,000 square feet for a total investment of $24.8 million. This property is 100% occupied at a current yield of 11.7%. No development projects were commenced during the quarter.
As of March 31, 2010, Liberty had 926,000 square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $218.3 million, with an expected yield of 5.5%. The properties were 38.2% leased at March 31.
Acquisitions: Liberty acquired no properties during the quarter.
Dispositions: During the quarter, Liberty sold two operating properties, containing 78,000 square feet, for $6.4 million.
About the Company
Liberty Property Trust 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 at http://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 first quarter results, on Tuesday, April 27, 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: 67698186. The call can also be accessed via the Internet on the Investors page of Liberty's web site at http://www.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.
Liberty Property Trust Statement of Operations March 31, 2010 (In thousands, except per share amounts) Quarter Ended March 31, March 31, 2010 2009 ---- --- (Unaudited) Operating Revenue Rental $130,282 $127,902 Operating expense reimbursement 58,905 57,400 ------ ------ Total operating revenue 189,187 185,302 ------- ------- Operating Expenses Rental property 40,664 38,500 Real estate taxes 22,551 21,817 General and administrative 14,874 15,556 Depreciation and amortization 43,006 42,638 ------ ------ Total operating expenses 121,095 118,511 ------- ------- Operating Income 68,092 66,791 Other Income/Expense Interest and other 2,793 3,095 Debt extinguishment gain - 529 Interest (38,637) (37,201) ------- ------- Total other income/expense (35,844) (33,577) ------- ------- Income before property dispositions, income taxes, 32,248 33,214 minority interest and equity in earnings of unconsolidated joint ventures Gain (loss) on property dispositions 768 (294) Income taxes (452) (217) Equity in earnings of unconsolidated joint ventures 394 417 --- --- Income from continuing operations 32,958 33,120 Discontinued operations (including net gain on 2,864 722 property dispositions of $2,862 and $199 for the ----- --- quarters ended March 31, 2010 and 2009) Net Income 35,822 33,842 Noncontrolling interest -operating partnerships (6,283) (6,317) Noncontrolling interest - consolidated joint ventures 12 364 --- --- Net Income available to common shareholders $29,551 $27,889 ======= ======= Basic income per common share Continuing operations $0.24 $0.27 ===== ===== Discontinued operations $0.02 $0.01 ===== ===== Total basic income per common share $0.26 $0.28 ===== ===== Diluted income per common share Continuing operations $0.24 $0.27 ===== ===== Discontinued operations $0.02 $0.01 ===== ===== Total diluted income per common share $0.26 $0.28 ===== ===== Weighted average shares Basic 112,341 100,681 ======= ======= Diluted 112,955 100,960 ======= ======= Amounts attributable to common shareholders Income from continuing operations $26,784 $27,194 Discontinued operations 2,767 695 Net income $29,551 $27,889 ======= ======= Liberty Property Trust Statement of Funds From Operations March 31, 2010 (Unaudited and in thousands, except per share amounts) Quarter Ended ------- March 31, 2010 -------------- Per Weighted Average Dollars Share ------- ----- Reconciliation of net income to FFO - basic: Basic -income available to common shareholders $29,551 $0.26 ===== Adjustments: Depreciation and amortization of unconsolidated joint ventures 4,059 Depreciation and amortization 42,449 Gain on property dispositions (2,664) Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions (1,478) Funds from operations available to common shareholders -basic $71,917 $0.64 ======= ===== Reconciliation of net income to FFO - diluted: Diluted -income available to common shareholders $29,551 $0.26 ===== Adjustments: Depreciation and amortization of unconsolidated joint ventures 4,059 Depreciation and amortizaton 42,449 Gain on property dispositions (2,664) Noncontrolling interest excluding preferred unit distributions 1,030 ----- Funds from operations available to common shareholders -diluted $74,425 $0.64 ======= ===== Reconciliation of weighted average shares: Weighted average common shares -all basic calculations 112,341 Dilutive shares for long term compensation plans 614 --- Diluted shares for net income calculations 112,955 Weighted average common units 3,961 ----- Diluted shares for funds from operations calculations 116,916 ------- Quarter Ended ------- March 31, 2009 -------------- Per Weighted Average Dollars Share ------- ----- Reconciliation of net income to FFO - basic: Basic -income available to common shareholders $27,889 $0.28 ===== Adjustments: Depreciation and amortization of unconsolidated joint ventures 3,990 Depreciation and amortization 43,022 Gain on property dispositions (308) Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions (1,737) Funds from operations available to common shareholders -basic $72,856 $0.72 ======= ===== Reconciliation of net income to FFO - diluted: Diluted -income available to common shareholders $27,889 $0.28 ===== Adjustments: Depreciation and amortization of unconsolidated joint ventures 3,990 Depreciation and amortizaton 43,022 Gain on property dispositions (308) Noncontrolling interest excluding preferred unit distributions 1,064 ----- Funds from operations available to common shareholders -diluted $75,657 $0.72 ======= ===== Reconciliation of weighted average shares: Weighted average common shares -all basic calculations 100,681 Dilutive shares for long term compensation plans 279 --- Diluted shares for net income calculations 100,960 Weighted average common units 4,021 ----- Diluted shares for funds from operations calculations 104,981 ------- 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 March 31, 2010 (In thousands, except share amounts) March 31, December 31, 2010 2009 ---------- ------------- Assets (unaudited) Real estate: Land and land improvements $849,403 $850,559 Building and improvements 4,318,266 4,289,932 Less: accumulated depreciation (1,005,744) (973,624) ---------- -------- Operating real estate 4,161,925 4,166,867 Development in progress 46,961 66,714 Land held for development 216,307 218,633 ------- ------- Net real estate 4,425,193 4,452,214 Cash and cash equivalents 141,535 237,446 Restricted cash 38,118 42,232 Accounts receivable 8,890 6,057 Deferred rent receivable 99,196 95,527 Deferred financing and leasing costs, net of accumulated amortization (2010, $141,257; 2009, $133,429) 130,969 134,309 Investment in unconsolidated joint ventures 173,944 175,584 Prepaid expenses and other assets 61,529 85,574 ------ ------ Total assets $5,079,374 $5,228,943 ========== ========== Liabilities Mortgage loans $472,681 $473,993 Unsecured notes 1,842,882 1,842,882 Credit facility 35,000 140,000 Accounts payable 31,560 31,195 Accrued interest 27,721 31,251 Dividend and distributions payable 55,573 55,402 Other liabilities 151,886 171,051 ------- ------- Total liabilities 2,617,303 2,745,774 --------- --------- Equity Shareholders' equity: Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 114,302,885 (includes 1,249,909 in treasury) and 113,875,211 (includes 1,249,909 in treasury) shares issued and outstanding as of March 31, 2010 and December 31, 2009, respectively 114 114 Additional paid-in capital 2,519,618 2,509,704 Accumulated other comprehensive (loss) income (2,135) 2,339 Distributions in excess of net income (362,059) (337,911) Common shares in treasury, at cost, 1,249,909 shares as of March 31, 2010 and December 31, 2009 (51,951) (51,951) ------- ------- Total shareholders' equity 2,103,587 2,122,295 Noncontrolling interest -operating partnership 3,943,224 and 4,011,354 common units outstanding as of March 31, 2010 and December 31, 2009, respectively 69,916 72,294 9,740,000 preferred units outstanding as of March 31, 2010 and December 31, 2009 287,959 287,959 Noncontrolling interest -consolidated joint ventures 609 621 --- --- Total equity 2,462,071 2,483,169 --------- --------- Total liabilities & equity $5,079,374 $5,228,943 ========== ==========
Liberty Property Trust
CONTACT: Jeanne A. Leonard of Liberty Property Trust, +1-610-648-1704
Web Site: http://www.libertyproperty.com/
