Liberty Property Trust Announces Fourth Quarter and Full Year Results
MALVERN, Pa., Feb. 8 /PRNewswire-FirstCall/ -- Liberty Property Trust (NYSE: LRY) reported that funds from operations available to common shareholders (diluted) ("FFO") for the fourth quarter of 2009 was a loss of $0.14 per share, compared to a profit of $0.80 per share for the fourth quarter of 2008. FFO for the fourth quarter includes a $94.5 million, non-cash impairment charge related to certain of the company's investments in unconsolidated joint ventures and related goodwill. Excluding this impairment charge, FFO for the fourth quarter of 2009 would be $0.67 per share. Funds from operations for the fourth quarter also include termination fees of $1.7 million.
For the year ended December 31, 2009, FFO per share was $1.98. Excluding the $94.5 million non-cash impairment charge, FFO for the year ended December 31, 2009 would be $2.83 per share. This compares to FFO of $3.20 per share for 2008.
Net loss per common share (diluted) was $0.46 per share for the quarter ended December 31, 2009, compared to net income of $0.53 per share (diluted) for the quarter ended December 31, 2008. Net income for the full year 2009 was $0.52 per common share, compared with $1.62 per share for 2008. Adjusting for the non-cash impairment charge of $94.5 million, net income for the quarter ended December 31, 2009 would be $0.35 per share, and for the year ended December 31, 2009 it would be $1.37 per share.
"Fourth quarter activity was encouraging," said Bill Hankowsky, chief executive officer. "At the end of the year we saw a marked increase in the number and quality of industrial prospects, coupled with renewed willingness on the part of companies to make commitments, in both the office and industrial sectors. This translated into very strong leasing performance. We believe that the market has bottomed, we are beginning to see very gradual recovery in the industrial sector, and we may see similar positive signs in the office sector in the second half of this year should the nation's employment situation improve."
Portfolio Performance
Leasing: At December 31, 2009, Liberty's in-service portfolio of 78.2 million square feet was 89.2% occupied, compared to 89.3% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 4.7 million square feet of space.
Same Store Performance: Property level operating income for same store properties decreased by 1.4% on a cash basis and by 2.8% on a straight line basis for the fourth quarter of 2009 compared to the same quarter in 2008 and increased by 0.4% on a cash basis and 0.6% on a straight line basis for the full year 2009 compared to 2008.
Capital Activities and Balance Sheet Management
Property Sales: During the fourth quarter, Liberty sold seven operating properties, which contained 543,000 square feet of leaseable space, and 10.1 acres of land for $35.1 million.
Real Estate Investments
Development: During the fourth quarter, Liberty brought into service four development properties totaling 1.1 million square feet for a total investment of $121.4 million. These properties were 96.1% occupied as of December 31, 2009, at a yield of 9.1%.
A joint venture in which the company holds a 25% interest brought into service a 225,000 square foot development property during the quarter. This property is 9.6% leased. The projected stabilized yield on the $12.0 million investment is 7.4%.
No development commenced during the quarter.
As of December 31, 2009, Liberty had 1.0 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $243.5 million, with an expected yield of 6.2%. The properties were 34.1% leased at December 31.
Acquisitions: Liberty acquired no properties during the quarter.
About the Company
Liberty 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 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 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 [email protected].
Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, February 9, 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: 51828607. The call can also be accessed via the Internet on the Investors page of Liberty's web site at 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
December 31, 2009
(In thousands, except per share amounts)
Quarter Ended Year Ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited)
Operating Revenue
Rental $131,842 $128,649 $519,928 $507,698
Operating expense
reimbursement 55,735 56,117 224,329 223,654
------ ------ ------- -------
Total operating
revenue 187,577 184,766 744,257 731,352
------- ------- ------- -------
Operating Expenses
Rental property 40,191 39,101 149,968 149,170
Real estate taxes 20,007 19,682 86,676 83,762
General and
administrative 12,792 14,133 51,250 54,467
Depreciation and
amortization 42,801 41,757 170,764 169,190
------ ------ ------- -------
Total operating
expenses 115,791 114,673 458,658 456,589
------- ------- ------- -------
Operating Income 71,786 70,093 285,599 274,763
Other Income/Expense
Interest and other 3,259 4,053 11,503 13,440
Debt extinguishment gain - 2,521 1,547 2,521
Interest (38,283) (37,844) (149,569) (152,896)
------- ------- -------- --------
Total other
income/expense (35,024) (31,270) (136,519) (136,935)
------- ------- -------- --------
Income before property
dispositions, income
taxes, minority interest
and equity in earnings
of unconsolidated
joint ventures 36,762 38,823 149,080 137,828
Gain on property
dispositions 626 8,633 1,687 10,572
Income taxes (64) (273) (494) (1,645)
Equity in earnings of
unconsolidated joint
ventures 37 948 2,161 2,805
Impairment charges -
investment in
unconsolidated joint
ventures and other (79,247) - (82,552) -
- goodwill (15,700) - (15,700) -
------- --- ------- ---
Income from continuing
operations (57,586) 48,131 54,182 149,560
Discontinued operations
(including net gain on
property dispositions
of $8,859 and $9,884
for the quarters ended
December 31, 2009 and
2008 and $17,859 and
$23,519 for the years
ended December 31, 2009
and 2008) 8,780 11,248 24,810 30,546
----- ------ ------ ------
Net Income (48,806) 59,379 78,992 180,106
Noncontrolling
interest - operating
partnerships (3,393) (7,396) (23,125) (27,681)
Noncontrolling
interest - consolidated
joint ventures 112 (185) 509 (483)
--- ---- --- ----
Net Income available to
common
shareholders $(52,087) $51,798 $56,376 $151,942
======== ======= ======= ========
Basic income per
common share
Continuing operations $(0.54) $0.42 $0.30 $1.31
====== ===== ===== =====
Discontinued operations $0.08 $0.11 $0.22 $0.31
===== ===== ===== =====
Total basic income
per common share $(0.46) $0.53 $0.52 $1.62
====== ===== ===== =====
Diluted income per
common share
Continuing operations $(0.54) $0.42 $0.30 $1.31
====== ===== ===== =====
Discontinued operations $0.08 $0.11 $0.22 $0.31
===== ===== ===== =====
Total diluted income
per common share $(0.46) $0.53 $0.52 $1.62
====== ===== ===== =====
Weighted average shares
Basic 112,159 97,434 107,550 93,615
======= ====== ======= ======
Diluted 112,722 97,493 108,002 93,804
======= ====== ======= ======
Amounts attributable
to common shareholders
Income from continuing
operations $(60,565) $40,995 $32,444 $122,688
Discontinued operations 8,478 10,803 23,932 29,254
----- ------ ------ ------
Net income $(52,087) $51,798 $56,376 $151,942
======== ======= ======= ========
Liberty Property Trust
Statement of Funds From Operations
December 31, 2009
(Unaudited and in thousands, except per share amounts)
Quarter Ended
-------------
December 31, 2009 December 31, 2008
----------------- -----------------
Per Per
Weighted Weighted
Average Average
Dollars Share Dollars Share
------- ------- ------- -------
Reconciliation of net income to
FFO - basic:
Basic -income available to common
shareholders $(52,087) $(0.46) $51,798 $0.53
====== =====
Adjustments:
Depreciation and amortization of
unconsolidated joint ventures 4,067 4,027
Depreciation and amortization 42,206 42,597
Gain on property dispositions (8,380) (19,662)
Minority interest share in addback
for depreciation and amortization
and gain on property dispositions (1,304) (1,068)
------ ------
Funds from operations available to
common shareholders -basic $(15,498) $(0.14) $77,692 $0.80
======== ====== ======= =====
Reconciliation of net income to FFO
- diluted:
Diluted -income available to
common shareholders $(52,087) $(0.46) $51,798 $0.53
====== =====
Adjustments:
Depreciation and amortization of
unconsolidated joint ventures 4,067 4,027
Depreciation and amortizaton 42,206 42,597
Gain on property dispositions (8,380) (19,662)
Minority interest excluding
preferred unit distributions (1,860) 2,143
------ -----
Funds from operations available to
common shareholders -diluted $(16,054) $(0.14) (1) $80,903 $0.80
======== ====== ======= =====
Reconciliation of weighted average
shares:
Weighted average common shares -
all basic calculations 112,159 97,434
Dilutive shares for long term
compensation plans 563 59
--- ---
Diluted shares for net income
calculations 112,722 97,493
Weighted average common units 4,016 4,189
Diluted shares for funds from
operations calculations 116,738 101,682
======= =======
Year Ended
----------
December 31, 2009 December 31, 2008
----------------- -----------------
Per Per
Weighted Weighted
Average Average
Dollars Share Dollars Share
------- ------- ------- -------
Reconciliation of net income to
FFO - basic:
Basic -income available to
common shareholders $56,376 $0.52 $151,942 $1.62
===== =====
Adjustments:
Depreciation and amortization of
unconsolidated joint ventures 16,180 16,235
Depreciation and amortization 170,633 173,400
Gain on property dispositions (23,197) (34,336)
Minority interest share in
addback for depreciation and
amortization
and gain on property
dispositions (5,801) (6,606)
------ ------
Funds from operations available
to common shareholders -basic $214,191 $1.99 $300,635 $3.21
======== ===== ======== =====
Reconciliation of net income to
FFO -diluted:
Diluted -income available to
common shareholders $56,376 $0.52 $151,942 $1.62
===== =====
Adjustments:
Depreciation and amortization of
unconsolidated joint ventures 16,180 16,235
Depreciation and amortizaton 170,633 173,400
Gain on property dispositions (23,197) (34,336)
Minority interest excluding
preferred unit distributions 2,114 6,669
----- -----
Funds from operations available
to common shareholders -
diluted $222,106 $1.98 (1) $313,910 $3.20
======== ===== ======== =====
Reconciliation of weighted
average shares:
Weighted average common shares -
all basic calculations 107,550 93,615
Dilutive shares for long term
compensation plans 452 189
--- ---
Diluted shares for net income
calculations 108,002 93,804
Weighted average common units 4,018 4,190
Diluted shares for funds from
operations calculations 112,020 97,994
======= ======
(1) Excluding the $94.5 million non-cash impairment charge FFO for the
quarter and year ended December 31, 2009 would have been $.67 and
$2.83 per share, respectively.
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
December 31, 2009
(In thousands, except share amounts)
December 31, 2009 December 31, 2008
----------------- -----------------
Assets
Real estate:
Land and land improvements $850,559 $801,763
Building and improvements 4,410,254 4,191,361
Less: accumulated depreciation (1,093,946) (963,043)
---------- --------
Operating real estate 4,166,867 4,030,081
Development in progress 66,714 245,463
Land held for development 218,633 209,551
------- -------
Net real estate 4,452,214 4,485,095
Cash and cash equivalents 237,446 15,794
Restricted cash 42,232 39,726
Accounts receivable 4,591 12,985
Deferred rent receivable 95,527 83,033
Deferred financing and leasing costs,
net of accumulated amortization
(2009, $133,429; 2008, $139,078) 134,309 132,627
Investment in unconsolidated joint
ventures 175,584 266,602
Assets held for sale - 98,706
Prepaid expenses and other assets 85,518 82,467
------ ------
Total assets $5,227,421 $5,217,035
========== ==========
Liabilities
Mortgage loans $473,993 $198,560
Unsecured notes 1,842,882 2,131,607
Credit facility 140,000 260,000
Accounts payable 31,195 32,481
Accrued interest 31,251 36,474
Dividend and distributions payable 55,402 48,858
Other liabilities 169,529 182,549
------- -------
Total liabilities 2,744,252 2,890,529
--------- ---------
Equity
Shareholders' equity:
Common shares of beneficial interest,
$.001 par value, 183,987,000 shares
authorized, 113,875,211 (includes
1,249,909 in treasury) and 100,034,404
(includes 1,249,909 in treasury) shares
issued and outstanding as of
December 31, 2009 and 2008, respectively 114 101
Additional paid-in capital 2,469,570 2,162,820
Accumulated other comprehensive income 2,339 (5,378)
Distributions in excess of net income (337,911) (185,721)
Common shares in treasury, at cost,
1,249,909 shares as of
December 31, 2009 and 2008 (51,951) (51,951)
------- -------
Total shareholders' equity 2,082,161 1,919,871
Noncontrolling interest - operating
partnership
4,011,354 and 4,074,967
common units outstanding as of
December 31, 2009 and 2008,
respectively 112,428 117,546
9,740,000 preferred units
outstanding as of December 31,
2009 and 2008 287,959 287,959
Noncontrolling interest -
consolidated joint ventures 621 1,130
--- -----
Total equity 2,483,169 2,326,506
--------- ---------
Total liabilities & equity $5,227,421 $5,217,035
========== ==========
SOURCE Liberty Property Trust
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