Liberty Property Trust Announces First Quarter 2014 Results

         Liberty Property Trust Announces First Quarter 2014 Results

PR Newswire

MALVERN, Pa., April 22, 2014

MALVERN, Pa., April 22, 2014 /PRNewswire/ --Liberty Property Trust reported
that funds from operations available to common shareholders (diluted) ("FFO")
for the first quarter of 2014 was $0.58 per share, compared to $0.65 per share
for the first quarter of 2013. Funds from operations for the first quarter of
2014 and 2013 include $3.9 million and $3.8 million, respectively, of
additional compensation expense due to the accelerated vesting of long-term
compensation due to the years of service and ages of certain employees.

Net income per common share (diluted) was $0.49 for the quarter ended March
31, 2014, compared to $0.60 for the quarter ended March 31, 2013. Net income
for the quarter ended March 31, 2014 included net gains on property
dispositions of $46.0 million ($0.31 per share) versus $43.5 million ($0.36
per share) for the corresponding quarter in 2013.

Results for the first quarter of 2014 reflect the sale of 6.6 million square
feet of suburban office and flex properties which closed in two installments
during December 2013 and January 2014. Year-over-year results are reflective
of strategic portfolio transformation activities that have increased Liberty's
industrial portfolio and decreased its office exposure.

"In the first quarter, Liberty finalized our transformational sale of suburban
office and flex properties, we announced the largest office build-to-suit
development in the company's history, and we lowered our cost of borrowing
with a new, expanded line of credit," said Bill Hankowsky, chairman and chief
executive officer. "With the exception of the effects of the winter's
unusually harsh weather conditions, our portfolio performed as expected and
budgeted in the first quarter. We continue to see strong activity in our
industrial markets and anticipate accelerating growth in earnings in the
second half of 2014 consistent with our previously announced earnings
guidance."

Portfolio Performance

Leasing: At March 31, 2014, Liberty's in-service portfolio of 101.5 million
square feet was 91.0% occupied, compared to 91.6% at the end of the fourth
quarter of 2013. During the quarter, Liberty completed lease transactions
totaling 5.3 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 1.8% on a straight line
basis for the first quarter of 2014 compared to the same quarter in 2013.

Real Estate Investments

Development: In the first quarter, Liberty brought into service three
development properties for a total investment of $30.5 million. The properties
contain 502,000 square feet of leasable space and were 86.4% occupied as of
March 31, 2014. The current yield on these properties is 7.4% and the
projected stabilized yield is 8.4%.

Also during the quarter, Liberty began development on two properties for a
projected investment of $61.0 million. The properties consist of two
distribution properties for inventory in Texas: a 199,000 square foot
distribution facility in Coppell and a 207,000 square foot distribution
facility in Houston.

In addition, Liberty announced preliminary terms to develop, in a joint
venture with Comcast Corporation, a 1.5 million square foot office and hotel
property in Philadelphia, for $900 million. The joint venture will be 20%
owned by Liberty and will be managed by Liberty. Development is expected to
commence in summer 2014.

Acquisitions: Liberty acquired two properties for $37.6 million during the
quarter: a vacant 523,000 square foot distribution facility in California's
Inland Empire, and a fully-leased, 90,000 square foot distribution facility in
Greenville, South Carolina.

Real Estate Dispositions

In December 2013, Liberty entered into an agreement to sell 159 acres of land
and 97 operating properties totaling 6.6 million square feet of leasable
space. In December, the company closed on the first installment of the sale
for $367.7 million. This installment comprised 140 acres of land and 49
properties totaling 4.0 million square feet of leasable space. In January
2014, the remaining 19 acres of land and 48 properties totaling 2.6 million
square feet of leasable space were sold for $329.6 million. At the time of
sale the combined percentage leased for the 97 properties was 88.2%.

Liberty sold one additional operating property during the quarter, a vacant
60,000 square foot distribution building in southern California for $5.0
million.

Capital Activities and Balance Sheet Management

Liberty replaced its existing $500 million credit facility which was due
November 2015 with a new, $800 million facility.  The new facility matures in
March 2018 and the company has options to extend the maturity date for up to
one additional year. Based upon the company's current credit ratings,
borrowings under the new facility bear interest at LIBOR plus 105 basis
points.

FFO Guidance

Liberty expects to report 2014 funds from operations ("FFO") per share in the
range of $2.45 - $2.55. A reconciliation of projected FFO to projected GAAP
net income for 2014 is below (all amounts projected):



                                           2014 Range
                                           Low    High
Net income per share                       $ 1.30 $ 1.40
Depreciation and amortization of
 unconsolidated joint ventures           0.09   0.11
Depreciation and amortization              1.53   1.61
Gain on property dispositions              (0.44) (0.54)
Noncontrolling interest share of addbacks  (0.03) (0.03)
Funds from operations per share            $ 2.45 $ 2.55



About the Company

Liberty Property Trust (NYSE: LPT) 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 101 million square foot portfolio includes
more than 700 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 first
quarter results, on Tuesday, April 22, 2014, at 1:00 p.m. Eastern Time. To
access the conference call, please dial 855-277-7530. The passcode needed for
access is 24534109. A replay of the call will be available until May 22, 2014,
by dialing 1-855-859-2056 using the same passcode as above. The call can also
be accessed in the Investors section 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. These
forward-looking statements include statements relating to, among others
things, future asset dispositions, expectations for our operating results,
business and financial condition, the impact of the Cabot acquisition on our
portfolio and business and our growth prospects, as well as statements that
are generally accompanied by words such as "believes," "anticipates,"
"expects," "estimates," "should," "seeks," "intends," "proposed," "planned,"
"outlook" and "goal" or similar expressions. 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 risks, uncertainties and other
factors include, without limitation, uncertainties affecting real estate
business generally (such as entry into new leases, renewals of leases and
dependence on tenants' business operations), risks relating to the integration
of the operations of entities that we have acquired or may acquire, risks
relating to financing arrangements and sales of securities, possible
environmental liabilities, risks relating to leverage and debt service
(including availability of financing terms acceptable to the company and
sensitivity of the company's operations and financing arrangements to
fluctuations in interest rates), dependence on the primary markets in which
the company's properties are located, the existence of complex regulations
relating to status as a REIT and the adverse consequences of the failure to
qualify as a REIT, risks relating to litigation, including without limitation
litigation involving entities that we have a acquired or may acquire, and the
potential adverse impact of market interest rates on the market price for the
company's securities, and other risks and uncertainties detailed in the
company's filings with the Securities and Exchange Commission, including
without limitation the Company's Annual Report on Form 10-K for the year ended
December 31, 2013. 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, 2014
(Unaudited and in thousands, except per share amounts)
                                      Quarter Ended
                                      March 31, 2014       March 31, 2013
Operating Revenue
Rental                             $           $        
                                          138,934           104,716
Operating expense reimbursement      58,681               42,411
 Total operating revenue            197,615              147,127
Operating Expenses
Rental property                      38,561               25,229
Real estate taxes                   24,501               17,957
General and administrative           18,361               19,793
Depreciation and amortization       56,734               37,220
 Total operating expenses           138,157              100,199
 Operating Income                   59,458               46,928
Other Income/Expense
Interest and other                 2,535                2,573
Interest                           (39,207)             (27,739)
 Total other income/expense         (36,672)             (25,166)
Income before property
dispositions, income taxes,
noncontrolling interest
 and equity in earnings of         22,786               21,762
unconsolidated joint ventures
(Loss) gain on property              (83)                 1,800
dispositions
Income taxes                        (531)                (491)
Equity in earnings of                4,159                1,757
unconsolidated joint ventures
Income from continuing operations   26,331               24,828
Discontinued operations (including
net gains on property dispositions
of
 $46,117 and $41,713 for the
 quarters ended March 31, 2014 and    47,775               49,828
 2013, respectively)
Net Income                          74,106               74,656
 Noncontrolling interest -           (1,853)              (3,417)
 operating partnerships
 Noncontrolling interest -           (353)                -
 consolidated joint ventures
Net Income available to common       $           $        
shareholders                          71,900           71,239
 Net income                         $           $        
                                           74,106           74,656
 Other comprehensive income (loss)   1,346                (4,851)
 - foreign currency translation
 Other comprehensive loss - change
 in net unrealized gain on            (511)                -
 derivative instruments
 
Comprehensive income                74,941               69,805
 Less: comprehensive income
 attributable to noncontrolling       (2,226)              (3,271)
 interest
Comprehensive income attributable    $           $        
to common shareholders                    72,715           66,534
Basic income per common share
                                      $           $        
 Continuing operations                     0.17          
                                                           0.19
                                      $           $        
 Discontinued operations                   0.32          
                                                           0.41
Total basic income per common        $           $        
share                                       0.49          
                                                           0.60
Diluted income per common share
                                      $           $        
 Continuing operations                     0.17          
                                                           0.19
                                      $           $        
 Discontinued operations                   0.32          
                                                           0.41
Total diluted income per common      $           $        
share                                       0.49          
                                                           0.60
Weighted average shares
 Basic                              146,425              118,688
 Diluted                            147,095              119,532
Amounts attributable to common
shareholders
 Income from continuing operations  $           $        
                                           25,250           22,908
 Discontinued operations            46,650               48,331
 Net income                         $           $        
                                           71,900           71,239



Liberty Property Trust
Balance Sheet
March 31, 2014
(Unaudited and in thousands, except share and unit amounts)
                                           March 31, 2014    December 31,
                                                             2013
Assets
Real estate:
         Land and land improvements        $          $       
                                              1,149,233     1,139,455
         Building and improvements         5,206,349         5,144,758
         Less: accumulated depreciation    (1,094,397)       (1,057,680)
Operating real estate                      5,261,185         5,226,533
Development in progress                    242,771           209,187
Land held for development                  239,755           233,055
Net real estate                            5,743,711         5,668,775
Cash and cash equivalents                  370,553           163,414
Restricted cash                            20,041            51,456
Accounts receivable                        17,963            13,900
Deferred rent receivable                   102,729           99,956
Deferred financing and leasing costs, net
of accumulated
         amortization (2014, $150,476;     222,832           226,607
         2013, $140,958)
Investments in and advances to             181,249           179,655
unconsolidated joint ventures
Assets held for sale                     -                 275,957
Prepaid expenses and other assets          103,587           95,840
Total assets                               $          $       
                                              6,762,665     6,775,560
Liabilities
                                           $          $       
Mortgage loans                                              
                                           542,809           545,306
Unsecured notes                            2,708,440         2,708,213
Credit facility                            -                 -
Accounts payable                          53,458            70,406
Accrued interest                           42,218            25,777
Dividend and distributions payable         71,653            71,323
Other liabilities                          215,253           250,819
Total liabilities                          3,633,831         3,671,844
Noncontrolling interest - operating
partnership - 301,483 preferred units
         outstanding as of March 31, 2014  7,537             7,537
         and December 31, 2013
Equity
Shareholders' equity:
Common shares of beneficial interest,
$.001 par value, 183,987,000 shares
         authorized, 148,541,749
         (includes 1,249,909 in treasury)
         and 147,846,801
         (includes 1,249,909 in treasury)
         shares issued and outstanding as
         of
         March 31, 2014 and December 31,   149               148
         2013, respectively
Additional paid-in capital                 3,691,717         3,669,618
Accumulated other comprehensive income     10,558            9,742
Distributions in excess of net income      (589,775)         (591,713)
Common shares in treasury, at cost,
1,249,909 shares as of
         March 31, 2014 and December 31,   (51,951)          (51,951)
         2013
Total shareholders' equity                 3,060,698         3,035,844
Noncontrolling interest - operating
partnership
         3,553,566 and 3,556,566 common
         units outstanding as of March     56,681            56,713
         31, 2014 and December 31, 2013,
         respectively
Noncontrolling interest - consolidated     3,918             3,622
joint ventures
Total equity                               3,121,297         3,096,179
Total liabilities, noncontrolling          $          $       
interest - operating partnership & equity     6,762,665     6,775,560





Liberty Property Trust
Statement of Funds From Operations
March 31, 2014
(Unaudited and in thousands, except per share amounts)
                           Quarter Ended
                           March 31, 2014              March 31, 2013
                                        Per                      Per
                                        Weighted                  Weighted
                                        Average                Average
                           Dollars      Share          Dollars    Share
Reconciliation of net
income to FFO - basic:
Basic - income            $       $         $      $     
available to common         71,900     0.49                       
shareholders                                          71,239     0.60
Adjustments:
Depreciation and
amortization of            3,291                       3,397
unconsolidated joint
ventures
Depreciation and          56,107                      44,972
amortization
Gain on property          (45,526)                    (41,706)
dispositions
Noncontrolling interest
share in addback for
depreciation and
amortization
        and gain on
        property           (327)                       (200)
        dispositions
Funds from operations     $       $         $      $     
available to common         85,445     0.58                       
shareholders - basic                                  77,702     0.65
Reconciliation of net
income to FFO -
diluted:
Diluted - income          $       $         $      $     
available to common         71,900     0.49                       
shareholders                                          71,239     0.60
Adjustments:
Depreciation and
amortization of            3,291                       3,397
unconsolidated joint
ventures
Depreciation and          56,107                      44,972
amortization
Gain on property          (45,526)                    (41,706)
dispositions
Noncontrolling interest
excluding preferred unit   1,735                       2,206
distributions
Funds from operations     $       $         $      $     
available to common         87,507     0.58                       
shareholders - diluted                                80,108     0.65
Reconciliation of
weighted average
shares:
Weighted average common
shares - all basic         146,425                     118,688
calculations
Dilutive shares for
long term compensation     670                         844
plans
Diluted shares for net    147,095                     119,532
income calculations
Weighted average common   3,556                       3,714
units
Diluted shares for
Funds from operations      150,651                     123,246
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.



SOURCE Liberty Property Trust

Website: http://www.libertyproperty.com
Contact: Jeanne Leonard, Liberty Property Trust, 610.648.1704
 
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