Liberty Property Trust Announces Fourth Quarter And Full Year Results

    Liberty Property Trust Announces Fourth Quarter And Full Year Results  PR Newswire  MALVERN, Pa., Feb. 5, 2013  MALVERN, 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 Performance  Leasing: 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 by0.3% 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 Management  Property 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 Investments  Acquisitions: 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 Events  Liberty 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 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 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     December      December 31,   December 31,                         31, 2012     31, 2011      2012           2011 Operating Revenue                         $       $        $         $      Rental                                                                       121,709    118,171     478,835      464,053  Operating expense     54,518       50,533        206,717        199,188 reimbursement   Total operating      176,227      168,704       685,552        663,241   revenue Operating Expenses  Rental property       37,704       34,105        133,630        125,761 Real estate taxes     18,407       18,336        79,859         76,982 General and            18,286       16,547        64,730         59,367 administrative Depreciation and       42,923       39,994        165,628        156,242 amortization   Total operating      117,320      108,982       443,847        418,352   expenses   Operating Income    58,907       59,722        241,705        244,889 Other Income/Expense Interest and other   1,320        1,472         9,289          8,389 Interest             (29,738)     (29,510)      (119,630)      (120,718)   Total other          (28,418)     (28,038)      (110,341)      (112,329)   income/expense Income before property dispositions, income taxes, noncontrolling interest  and equity in earnings of             30,489       31,684        131,364        132,560 unconsolidated joint ventures Gain on property       1,305        1,664         4,123          5,025 dispositions Income taxes          (331)        (51)          (976)          (1,020) Equity in earnings (loss) of               716          1,026         (681)          3,496 unconsolidated joint ventures Income from            32,179       34,323        133,830        140,061 continuing operations 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          8,392        6,922         13,921         70,649    $11,383 and $60,582   for the years ended   December 31, 2012   and 2011) Net Income            40,571       41,245        147,751        210,710   Noncontrolling   interest - operating  (2,416)      (6,453)       (10,590)       (27,222)   partnerships   Noncontrolling   interest -            275          -             275            511   consolidated joint   ventures Net Income available   $       $        $         $      to common                                             shareholders                              137,436      183,999                         38,430       34,792                         $       $        $         $        Net income                                                                                       147,751      210,710                         40,571       41,245   Other comprehensive  389          (217)         3,436          (281)   income (loss) Comprehensive income  40,960       41,028        151,187        210,429   Less: comprehensive   income attributable   (2,153)      (6,446)       (10,422)       (26,705)   to noncontrolling   interest Comprehensive income   $       $        $         $      attributable to common                                shareholders                                  140,765      183,724                         38,807       34,582 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               117,556      115,373       116,863        114,755   Diluted             118,378      116,090       117,694        115,503 Amounts attributable to common shareholders   Income from          $       $        $         $        continuing                                            operations                                  123,945      115,653                         30,293       28,090   Discontinued         8,137        6,702         13,491         68,346   operations                         $       $        $         $        Net income                                                                                       137,436      183,999                         38,430       34,792      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, 2012   December 31, 2011   December 31, 2012    December 31, 2011                                    Per                Per                 Per                 Per                                    Weighted            Weighted             Weighted             Weighted                                    Average          Average           Average           Average                            Dollars Share       Dollars Share       Dollars  Share       Dollars  Share Reconciliation of net income to FFO - basic: Basic - income available  $    $       $    $       $     $       $     $     to common shareholders           0.33                137,436   1.18    183,999   1.60                            38,430             34,792    0.30 Adjustments: Depreciation and amortization of            3,413               3,549               14,152               14,452 unconsolidated joint ventures Depreciation and          42,518              42,123              164,615              168,435 amortization Gain on property          (8,265)             (6,066)             (7,589)              (61,198) dispositions/impairment Noncontrolling interest share in addback for depreciation and amortization  and gain on property     (1,145)             (1,258)             (5,286)              (3,926)  dispositions/impairment Funds from operations     $    $       $    $       $     $       $     $     available to common               0.64                303,328   2.60    301,762   2.63 shareholders - basic      74,951             73,140    0.63 Reconciliation of net income to FFO - diluted: Diluted - income          $    $       $    $       $     $       $     $     available to common               0.32                137,436   1.17    183,999   1.59 shareholders              38,430             34,792    0.30 Adjustments: Depreciation and amortization of            3,413               3,549               14,152               14,452 unconsolidated joint ventures Depreciation and          42,518              42,123              164,615              168,435 amortization Gain on property          (8,265)             (6,066)             (7,589)              (61,198) dispositions/impairment Noncontrolling interest excluding preferred unit   1,205               1,143               4,378                6,153 distributions Funds from operations     $    $       $    $       $     $       $     $     available to common               0.63                312,992   2.58    311,841   2.61 shareholders - diluted    77,301             75,541    0.63 Reconciliation of weighted average shares: Weighted average common shares - all basic         117,556             115,373             116,863              114,755 calculations Dilutive shares for long  822                 717                 831                  748 term compensation plans Diluted shares for net    118,378             116,090             117,694              115,503 income calculations Weighted average common   3,728               3,809               3,760                3,869 units Diluted shares for Funds from operations            122,106             119,899             121,454              119,372 calculations 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, 2012 (Unaudited and in thousands, except share and unit amounts)                                         December 31, 2012   December 31, 2011 Assets Real estate:      Land and land improvements         $           $                                                     900,501         852,785      Building and improvements          4,353,433           4,092,056      Less: accumulated depreciation     (1,170,030)         (1,047,336) Operating real estate                   4,083,904           3,897,505 Development in progress                 248,602             88,848 Land held for development               258,324             219,375 Net real estate                         4,590,830           4,205,728 Cash and cash equivalents               38,356              18,204 Restricted cash                         33,147              63,659 Accounts receivable                     8,988               8,192 Deferred rent receivable                108,628             102,613 Deferred financing and leasing costs, net of accumulated      amortization (2012, $136,706;      141,245             129,614      2011, $123,557) Investments in and advances to          169,021             174,687 unconsolidated joint ventures Assets held for sale                  -                   210,790 Prepaid expenses and other assets       87,756              76,186 Total assets                            $           $                                                   5,177,971        4,989,673 Liabilities Mortgage loans                          $           $                                                     302,855         290,819 Unsecured notes                         2,262,543           1,792,643 Credit facility                         92,000              139,400 Accounts payable                       31,058              23,418 Accrued interest                        20,164              24,147 Dividend and distributions payable      58,038              56,958 Other liabilities                       185,956             194,995 Total liabilities                       2,952,614           2,522,380 Noncontrolling interest - operating partnership - 301,483 preferred units      outstanding as of December 31,     7,537               7,537      2012 and December 31, 2011 Equity Shareholders' equity: Common shares of beneficial interest, $.001 par value, 183,987,000 shares      authorized, 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     119                 117      31, 2011, respectively Additional paid-in capital              2,687,701           2,617,355 Accumulated other comprehensive         2,900               (429) income (loss) Distributions in excess of net income   (547,757)           (461,498) Common shares in treasury, at cost, 1,249,909 shares as of      December 31, 2012 and December     (51,951)            (51,951)      31, 2011 Total shareholders' equity              2,091,012           2,103,594 Noncontrolling interest - operating partnership      3,713,851 and 3,808,746 common      units outstanding as of December      31, 2012            and December 31, 2011,       60,223              64,428            respectively      1,290,000 and 9,740,000 preferred      units outstanding as of December      31, 2012            and December 31, 2011,       63,264              287,959            respectively Noncontrolling interest -               3,321               3,775 consolidated joint ventures Total equity                            2,217,820           2,459,756 Total liabilities, noncontrolling       $           $         interest - operating partnership &        5,177,971        4,989,673 equity  SOURCE Liberty Property Trust  Website: http://www.libertyproperty.com Contact: Jeanne A. Leonard, Liberty Property Trust, +1-610-648-1704