Liberty Property Trust Announces First Quarter Results

Original

Revised

Low

High

Low

High

Projected net income per share

$ 1.12

$ 1.24

$ 1.45

$ 1.50

Depreciation and amortization of unconsolidated joint ventures

0.12

0.14

0.12

0.14

Depreciation and amortization

1.46

1.50

1.40

1.44

Gain on property dispositions

(0.10)

(0.08)

(0.47)

(0.43)

Projected funds from operations per share

$  2.60

$    2.80

$    2.50

$   2.65

Liberty Property Trust

Statement of Operations

March 31, 2011

(In thousands, except per share amounts)

Quarter Ended

March 31, 2011

March 31, 2010

(unaudited)

Operating Revenue

Rental  

$          122,588

$          122,963

 Operating expense reimbursement

56,020

55,103

Total operating revenue

178,608

178,066

Operating Expenses

 Rental property

35,862

37,422

Real estate taxes

21,020

21,341

General and administrative

15,965

14,867

Depreciation and amortization

42,242

40,560

Total operating expenses

115,089

114,190

Operating Income

63,519

63,876

Other Income/Expense

Interest and other  

2,676

2,774

Interest  

(34,778)

(36,260)

Total other income/expense

(32,102)

(33,486)

Income before property dispositions, income taxes, minority interest

  and equity in earnings of unconsolidated joint ventures

31,417

30,390

Gain on property dispositions

1,161

768

Income taxes

(550)

(452)

Equity in earnings of unconsolidated joint ventures

534

394

Income from continuing operations

32,562

31,100

Discontinued operations (including net gain on property dispositions

  of $470 and $2,862 for the quarters ended March 31, 2011 and

  2010)

2,381

4,722

Net Income

34,943

35,822

Noncontrolling interest - operating partnerships

(6,235)

(6,283)

Noncontrolling interest - consolidated joint ventures

201

12

Net Income available to common shareholders    

$            28,909

$            29,551

Basic income per common share  

Continuing operations

$                0.23

$                0.22

Discontinued operations

$                0.02

$                0.04

Total basic income per common share

$                0.25

$                0.26

Diluted income per common share

Continuing operations

$                0.23

$                0.22

Discontinued operations

$                0.02

$                0.04

Total diluted income per common share

$                0.25

$                0.26

Weighted average shares

Basic

114,013

112,341

Diluted

114,766

112,955

Amounts attributable to common shareholders    

Income from continuing operations

$            26,607

$            24,988

Discontinued operations

2,302

4,563

Net income

$            28,909

$            29,551

Liberty Property Trust

Statement of Funds From Operations

March 31, 2011

(Unaudited and in thousands, except per share amounts)

Quarter Ended

March 31, 2011

March 31, 2010

Per

Per

Weighted

Weighted

Average  

Average  

Dollars

Share

Dollars

Share

Reconciliation of net income to FFO - basic:

Basic - income available to common shareholders

$ 28,909

$        0.25

$ 29,551

$        0.26

Adjustments:

Depreciation and amortization of unconsolidated joint ventures

3,649

4,059

Depreciation and amortization

43,971

42,449

Gain on property dispositions

(1,019)

(2,664)

Noncontrolling interest share in addback for depreciation and

  amortization and gain on property dispositions

(1,541)

(1,478)

    Funds from operations available to common shareholders - basic

$ 73,969

$        0.65

$ 71,917

$        0.64

Reconciliation of net income to FFO - diluted:

Diluted - income available to common shareholders

$ 28,909

$        0.25

$ 29,551

$        0.26

Adjustments:

Depreciation and amortization of unconsolidated joint ventures

3,649

4,059

Depreciation and amortization  

43,971

42,449

Gain on property dispositions

(1,019)

(2,664)

Noncontrolling interest excluding preferred unit distributions  

982

1,030

    Funds from operations available to common shareholders - diluted

$ 76,492

$        0.64

$ 74,425

$        0.64

Reconciliation of weighted average shares:

Weighted average common shares - all basic calculations

114,013

112,341

Dilutive shares for long term compensation plans

753

614

Diluted shares for net income calculations

114,766

112,955

Weighted average common units

3,929

3,961

Diluted shares for funds from operations calculations

118,695

116,916

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, 2011

(In thousands, except share amounts)

March 31, 2011

December 31, 2010

Assets

(unaudited)

Real estate:

Land and land improvements

$          837,039

$                  837,566

Building and improvements

4,192,100

4,180,811

Less: accumulated depreciation

(1,042,574)

(1,011,743)

Operating real estate

3,986,565

4,006,634

Development in progress

4,843

-

Land held for development

207,457

209,253

Net real estate

4,198,865

4,215,887

Cash and cash equivalents

32,711

108,409

Restricted cash

54,882

49,526

Accounts receivable

11,675

6,898

Deferred rent receivable

106,662

104,076

Deferred financing and leasing costs, net of accumulated

  amortization (2011, $116,429; 2010, $116,285)

134,413

135,893

Investments in and advances to unconsolidated joint ventures

176,617

171,916

Assets held for sale  

198,631

198,569

Prepaid expenses and other assets

70,213

73,625

Total assets

$       4,984,669

$               5,064,799

Liabilities

Mortgage loans

$          295,120

$                  320,679

Unsecured notes

1,792,643

2,039,143

Credit facility

200,000

-

Accounts payable

26,850

23,652

Accrued interest

33,477

29,821

Dividend and distributions payable

56,428

56,149

Other liabilities

149,605

156,803

Total liabilities

2,554,123

2,626,247

Equity

Shareholders' equity:

Common shares of beneficial interest, $.001 par value, 183,987,000 shares

  authorized, 116,117,404 (includes 1,249,909 in treasury) and 115,530,608

  (includes 1,249,909 in treasury) shares issued and outstanding as of

  March 31, 2011 and December 31, 2010, respectively

116

116

Additional paid-in capital

2,576,783

2,560,193

Accumulated other comprehensive income (loss)

1,918

(155)

Distributions in excess of net income

(451,672)

(426,017)

Common shares in treasury, at cost, 1,249,909 shares as of

  March 31, 2011 and December 31, 2010  

(51,951)

(51,951)

Total shareholders' equity

2,075,194

2,082,186

Noncontrolling interest - operating partnership

3,928,733 common units outstanding as of  March 31, 2011 and December 31, 2010

66,808

67,621

9,740,000 preferred units outstanding as of March 31, 2011 and December 31, 2010

287,959

287,959

Noncontrolling interest - consolidated joint ventures

585

786

Total equity

2,430,546

2,438,552

Total liabilities & equity

$       4,984,669

$               5,064,799