Liberty Property Trust Announces


The following excerpt is from the company's SEC filing.

Malvern, PA, February 4, 2014 — Liberty Property Trust reported that funds from operations available to common shareholders (diluted) (“FFO”) for the fourth quarter of 2013 was $0.63 per share, compared to $0.63 per share for the fourth quarter of 2012.

For the year ended December 31, 2013, FFO per share was $2.49, which included acquisition expenses of $10.2 million. This compares to FFO of $2.58 per share for 2012, which included acquisition expenses of $2.9 million.

Net income per common share (diluted) was $0.48 per share for the quarter ended December 31, 2013, compared to $0.32 per share (dilute d) for the quarter ended December 31, 2012.  Net income for the full year 2013 was $1.60 per common share (diluted), compared with $1.17 per share (diluted) for 2012. Net income for 2013 reflects gain on sale of $0.79 per share, compared with $0.13 per share for 2012.

“The fourth quarter of 2013 was a truly transformational period for Liberty. With the acquisition of the Cabot industrial portfolio and the announced sale of 6.6 million square feet of suburban office and flex real estate, Liberty’s portfolio has changed dramatically, providing a stronger platform for future growth,” said Bill Hankowsky, chairman and chief executive officer. “The quarter’s operational activity was strong, with a growing development pipeline, strong leasing and increased occupancy. All activity points to outstanding opportunities for a very productive year ahead.”

Leasing: At December 31, 2013, Liberty’s in-service portfolio of 103 million square feet was 91.6% occupied, compared to 90.6% at the end of the third quarter. During the quarter, Liberty completed lease transactions totaling 5.7 million square feet of space. Liberty leased 26.8 million square feet in 2013.

Same Store Performance: Property level operating income for same store properties increased by 1.6% on a cash basis and by 1.2% on a straight line basis for the fourth quarter of 2013 compared to the same quarter in 2012 and increased by 2.0% on a cash basis and by 1.3% on a straight line basis for the full year 2013 compared to 2012.

  Real Estate Investments   Acquisitions   ·                  Liberty acquired all of the outstanding general and limited partnership interests of Cabot Industrial Fund III Operating Partnership, L.P. The acquisition resulted in the purchase of a 100% ownership interest in 177 operating properties for $1.469 billion. These properties, which contain 23 million square feet, are 92.8% leased.   ·                  Liberty acquired two operating properties for $39.8 million. These properties, which contain 720,000 square feet, are 100% leased and their current yield is 6.6%. The company also acquired land totaling 184 acres for $30.5 million.   Development   ·                  Liberty brought into service one development property for a total investment of $9.2 million. The property contains 88,000 square feet of leasable space and was 81.8% occupied as of December 31, 2013. The current yield on this property is 9.2% and the projected stabilized yield is 10.5%.   ·                  Liberty began development on four properties for a projected investment of $91.9 million. The properties consist of two fully pre-leased properties: 13225 Brockton Lane, a 227,000 square foot distribution building in Rogers, MN and 201 Rouse Boulevard, an 80,000 square foot office building in Philadelphia, PA; and two inventory properties: 8303 Fallbrook Drive, a 400,000 square foot distribution building in Houston, TX and 1850 West Rio Salado Parkway, a 154,000 square foot office building in Tempe, AZ.   ·                  A joint venture in which the Company holds a 25% interest began construction on 2277 Center Square Road in Logan Township, NJ, a 203,000 square foot inventory distribution facility for a projected investment of $11.8 million.   Real Estate Dispositions   Wholly Owned Dispositions   ·                  During the fourth quarter, Liberty entered into an agreement to sell 159 acres of land and 97 operating properties totaling 6.6 million square feet of leasable space. At the time of sale the combined percentage leased for these properties was 88.2%.   ·                  In December, Liberty closed on the first installment of the sale, which was for 140 acres of land and 49 properties totaling 4.0 million square feet of leasable space for $367.7 million.   ·                  In January 2014, the remaining 19 acres of land and 48 properties totaling 2.6 million square feet were sold for $329.6 million.   ·                  Liberty sold two additional operating properties containing 161,000 square feet and 17 acres of land, for $14.0 million. These two properties were 63.2% leased at the time of the sale.   2

  Joint Venture Dispositions   ·                  A joint venture in which the Company holds a 25% interest sold four operating properties which contained 171,000 square feet of leasable space for $31.5 million. These properties were 99.5% leased at the time of sale.   ·                  A joint venture in which the company holds a 20% interest sold one operating property which contained 44,000 square feet of leasable space for $9.6 million. The property was vacant at the time of sale.   Subsequent Events   As previously announced, Liberty has reached preliminary terms to develop, in a joint venture with Comcast Corporation, the “Comcast Innovation and Technology Center,” in Philadelphia. The proposed project includes a 59-story, 1.5 million square foot tower incorporating 1.3 million square feet of office space and a 200+room Four Seasons Hotel. Comcast will lease at least 957,000 square feet for a lease term of 20 years. The project is expected to represent a cost of $900 million to the joint venture, which will be 20% owned by Liberty and will be managed by Liberty.   “We are excited to be on this path with Comcast to create a truly unique vertical urban campus for innovation in Philadelphia,” said Bill Hankowsky. For more information on this project, visit http://Liberty CITC Philadelphia.   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 100 million square foot portfolio includes 746 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 4, 2014, at 1l a.m. Eastern Time.  To access the conference call, please dial 855-277-7530. The passcode needed for access is 44824981. A replay of the call will be available until March 4, 2014, 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.   3

  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.  The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.   4  

  Liberty Property Trust Statement of Operations December 31, 2013 (Unaudited and in thousands, except per share amounts)       Quarter Ended   Year Ended       December 31, 2013   December 31, 2012   December 31, 2013   December 31, 2012   Operating Revenue                   Rental   $ 136,148   $ 101,274   $ 458,081   $ 396,418   Operating expense reimbursement   56,279   43,157   187,849   163,861   Total operating revenue   192,427   144,431   645,930   560,279                       Operating Expenses                   Rental property   35,074   29,229   114,617   104,431   Real estate taxes   24,126   15,873   79,918   65,697   General and administrative   21,098   18,274   74,564   64,686   Depreciation and amortization   59,878   35,281   173,784   135,523   Total operating expenses   140,176   98,657   442,883   370,337                       Operating Income   52,251   45,774   203,047   189,942                       Other Income/Expense                   Interest and other   2,439   2,183   9,879   8,745   Interest   (37,701 ) (25,871 ) (127,115 ) (103,363 ) Total other income/expense   (35,262 ) (23,688 ) (117,236 ) (94,618 )                     Income before property dispositions, income taxes, noncontrolling interest and equity in earnings of unconsolidated joint ventures   16,989   22,086   85,811   95,324   Gain on property dispositions   1,847   1,305   8,676   3,080   Income taxes   (1,019 ) (331 ) (2,799 ) (976 ) Equity in earnings (loss) of unconsolidated joint ventures   2,094   716   6,067   (681 )                     Income from continuing operations   19,911   23,776   97,755   96,747                       Discontinued operations (including net gains on property dispositions of $46,017 and $8,837 for the quarters ended December 31, 2013 and 2012, respectively and net gains of $95,384 and $12,426 for the years ended December 31, 2013 and 2012, respectively)   51,832   16,795   121,839   51,004                       Net Income   71,743   40,571   219,594   147,751   Noncontrolling interest - operating partnerships   (1,809 ) (2,416 ) (9,203 ) (10,590 ) Noncontrolling interest - consolidated joint ventures   (247 ) 275   (653 ) 275   Net Income available to common shareholders   $ 69,687   $ 38,430   $ 209,738   $ 137,436                       Net income   $ 71,743   $ 40,571   $ 219,594   $ 147,751   Other comprehensive income - foreign currency translation   5,282   389   5,397   3,436   Other comprehensive income - change in net unrealized gain on derivative instruments   1,584   —   1,584   —   Comprehensive income   78,609   40,960   226,575   151,187   Less: comprehensive income attributable to noncontrolling interest   (2,219 ) (2,153 ) (9,995 ) (10,422 ) Comprehensive income attributable to common shareholders   $ 76,390   $ 38,807   $ 216,580   $ 140,765                       Basic income per common share                   Continuing operations   $ 0.13   $ 0.19   $ 0.70   $ 0.75   Discontinued operations   $ 0.35   $ 0.14   $ 0.91   $ 0.43   Total basic income per common share   $ 0.48   $ 0.33   $ 1.61   $ 1.18                       Diluted income per common share                   Continuing operations   $ 0.13   $ 0.19   $ 0.70   $ 0.75   Discontinued operations   $ 0.35   $ 0.13   $ 0.90   $ 0.42   Total diluted income per common share   $ 0.48   $ 0.32   $ 1.60   $ 1.17                       Weighted average shares                   Basic   145,865   117,556   130,180   116,863   Diluted   146,498   118,378   130,909   117,694                       Amounts attributable to common shareholders                   Income from continuing operations   $ 19,083   $ 22,146   $ 91,274   $ 88,008   Discontinued operations   50,604   16,284   118,464   49,428   Net income   $ 69,687   $ 38,430   $ 209,738   $ 137,436    

  Liberty Property Trust Balance Sheet December 31, 2013 (Unaudited and in thousands, except share and unit amounts)       December 31, 2013   December 31, 2012   Assets           Real estate:           Land and land improvements   $ 1,139,455   $ 845,958   Building and improvements   5,127,551   4,028,390   Less: accumulated depreciation   (1,040,472 ) (1,055,864 )             Operating real estate   5,226,534   3,818,484               Development in progress   209,187   248,602   Land held for development   233,055   249,221               Net real estate   5,668,776   4,316,307               Cash and cash equivalents   163,414   38,356   Restricted cash   51,456   33,147   Accounts receivable   13,900   8,988   Deferred rent receivable   99,955   101,621   Deferred financing and leasing costs, net of accumulated amortization (2013, $140,198; 2012, $121,858)   226,607   129,329   Investments in and advances to unconsolidated joint ventures   179,655   169,021   Assets held for sale   275,957   289,654   Prepaid expenses and other assets   95,840   87,756               Total assets   $ 6,775,560   $ 5,174,179               Liabilities           Mortgage loans   $ 545,306   $ 302,855   Unsecured notes   2,708,213   2,258,751   Credit facility   —   92,000   Accounts payable   70,406   31,058   Accrued interest   25,777   20,164   Dividend and distributions payable   71,323   58,038   Other liabilities   250,819   185,956               Total liabilities   3,671,844   2,948,822               Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of December 31, 2013 and 2012   7,537   7,537               Equity           Shareholders’ equity:           Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 147,846,801 (includes 1,249,909 in treasury) and 119,720,776 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2013 and 2012, respectively   148   119   Additional paid-in capital   3,669,618   2,687,701   Accumulated other comprehensive income   9,742   2,900   Distributions in excess of net income   (591,713 ) (547,757 ) Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2013 and 2012   (51,951 ) (51,951 ) Total shareholders’ equity   3,035,844   2,091,012               Noncontrolling interest - operating partnership           3,556,566 and 3,713,851 common units outstanding as of December 31, 2013 and 2012, respectively   56,713   60,223   1,290,000 preferred units outstanding as of December 31, 2012   —   63,264   Noncontrolling interest - consolidated joint ventures   3,622   3,321               Total equity   3,096,179   2,217,820               Total liabilities, noncontrolling interest - operating partnership & equity   $ 6,775,560   $ 5,174,179      

  Liberty Property Trust Statement of Funds From Operations December 31, 2013 (Unaudited and in thousands, except per share amounts)       Quarter Ended   Year Ended       December 31, 2013   December 31, 2012   December 31, 2013   December 31, 2012           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   $ 69,687   $ 0.48   $ 38,430   $ 0.33   $ 209,738   $ 1.61   $ 137,436   $ 1.18                                       Adjustments:                                   Depreciation and amortization of unconsolidated joint ventures   3,061       3,413       13,152       14,152       Depreciation and amortization   66,313       42,518       201,731       164,615       Gain on property dispositions   (46,324 )     (8,265 )     (94,934 )     (7,589 )     Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions   (546 )     (1,145 )     (3,171 )     (5,286 )     Funds from operations available to common shareholders - basic   $ 92,191   $ 0.63   $ 74,951   $ 0.64   $ 326,516   $ 2.51   $ 303,328   $ 2.60                                       Reconciliation of net income to FFO - diluted:                                   Diluted - income available to common shareholders   $ 69,687   $ 0.48   $ 38,430   $ 0.32   $ 209,738   $ 1.60   $ 137,436   $ 1.17                                       Adjustments:                                   Depreciation and amortization of unconsolidated joint ventures   3,061       3,413       13,152       14,152       Depreciation and amortization   66,313       42,518       201,731       164,615       Gain on property dispositions   (46,324 )     (8,265 )     (94,934 )     (7,589 )     Noncontrolling interest excluding preferred unit distributions   1,691       1,205       5,848       4,378       Funds from operations available to common shareholders - diluted   $ 94,428   $ 0.63   $ 77,301   $ 0.63   $ 335,535   $ 2.49   $ 312,992   $ 2.58                                       Reconciliation of weighted average shares:                                   Weighted average common shares - all basic calculations   145,865       117,556       130,180       116,863       Dilutive shares for long term compensation plans   633       822       729       831       Diluted shares for net income calculations   146,498       118,378       130,909       117,694       Weighted average common units   3,595       3,728       3,678       3,760       Diluted shares for Funds from operations calculations   150,093       122,106       134,587       121,454         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.  

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. Liberty Property Trust next reports earnings on February 04, 2014.

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