Liberty Property Trust Announces First Quarter Results

Liberty Property Trust

Statement of Operations

March 31, 2010

(In thousands, except per share amounts)

Quarter Ended

March 31,
2010

March 31,
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,
  minority interest and equity in earnings of
  unconsolidated joint ventures

32,248

33,214

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
  property dispositions of $2,862 and $199 for the
  quarters ended March 31, 2010 and 2009)

2,864

722

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

March 31, 2009

Per

Per

Weighted

Weighted

Average  

Average  

Dollars

Share

Dollars

Share

Reconciliation of net income to FFO - basic:

Basic - income available to common shareholders

$ 29,551

$        0.26

$ 27,889

$        0.28

Adjustments:

Depreciation and amortization of unconsolidated joint ventures

4,059

3,990

Depreciation and amortization

42,449

43,022

Gain on property dispositions

(2,664)

(308)

Noncontrolling interest share in addback for depreciation and amortization  and gain on property dispositions

(1,478)

(1,737)

  Funds from operations available to common shareholders - basic

$ 71,917

$        0.64

$ 72,856

$        0.72

Reconciliation of net income to FFO - diluted:

Diluted - income available to common shareholders

$ 29,551

$        0.26

$ 27,889

$        0.28

Adjustments:

Depreciation and amortization of unconsolidated joint ventures

4,059

3,990

Depreciation and amortizaton  

42,449

43,022

Gain on property dispositions

(2,664)

(308)

Noncontrolling interest excluding preferred unit distributions  

1,030

1,064

  Funds from operations available to common shareholders - diluted

$ 74,425

$        0.64

$ 75,657

$        0.72

Reconciliation of weighted average shares:

Weighted average common shares - all basic calculations

112,341

100,681

Dilutive shares for long term compensation plans

614

279

Diluted shares for net income calculations

112,955

100,960

Weighted average common units

3,961

4,021

Diluted shares for funds from operations calculations

116,916

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, 2010

December 31, 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