Liberty Property Trust Announces Second Quarter Results

MALVERN, Pa., July 21, 2008 /PRNewswire-FirstCall via COMTEX/ ----Liberty Property Trust (NYSE: LRY) reported that net income per common share (diluted) was $0.34 per share for the quarter ended June 30, 2008, compared to $0.57 per share (diluted) for the quarter ended June 30, 2007. For the six-month period ended June 30, 2008, net income per common share (diluted) was $0.67, compared to $1.00 per share for the same period in 2007. Net income reported for the second quarter and first six months of 2007 included significant gains on sales of property whereas the gains were less significant for the same periods in 2008.

Funds from operations available to common shareholders (diluted) ("FFO") for the second quarter of 2008 was $0.80 per share, compared to $0.79 per share for the second quarter of 2007. FFO per share for the six month period ended June 30, 2008 was $1.60, compared to $1.59 per share for the same period in 2007. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.

"Liberty had a very solid quarter in a very shaky environment, aptly reflecting Liberty's defensive operating platform, which has historically outperformed during challenging economic times," said Bill Hankowsky, chief executive officer. "Although the economy continues to dampen demand, supply and demand are generally in balance, Liberty's leasing performance is robust, and our operating metrics are solid. We are comfortable reaffirming our guidance for 2008 funds from operations at $3.10-$3.25 per share."

Portfolio Performance

Leasing: At June 30, 2008 Liberty's in-service portfolio of 74.8 million square feet was 92.5% occupied, compared to 92.2% at the end of the first quarter. During the second quarter, Liberty completed lease transactions totaling 5.1 million square feet of space.

Same Store Performance: Property level operating income for same store properties increased by 0.6% on a cash basis and decreased by 0.3% on a straight line basis for the second quarter of 2008 compared to the same quarter in 2007.

Real Estate Investments

Development: During the second quarter, Liberty brought into service four wholly-owned development properties totaling 782,000 square feet for a total investment of $46.9 million. These properties are 100% leased at a current yield of 10.4%. A joint venture in which Liberty holds a 50% interest brought into service one development property for a total investment of $25.9 million. This 55,000 square foot office property in the United Kingdom is unleased. Also, the final 285,000 square feet of the 1.25 million square foot Comcast Center development came into service during the second quarter.

During the second quarter, Liberty began development of one industrial property for an expected total investment of $50.5 million. The 346,000 build-to-suit will serve as a new baking facility for Tasty Baking Company in Philadelphia.

As of June 30, 2008, Liberty had 5.7 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $610.3 million, with an expected yield of 8.4%. The properties were 34.0% leased at June 30.

Acquisitions: Liberty acquired no properties during the quarter.

Dispositions: Liberty sold one operating property, which contained 84,000 square feet of leaseable space for $5.3 million. In addition, a joint venture in which Liberty holds a 50% interest sold 0.6 acres of land for $1.4 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 75 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 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 http://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 second quarter results, on Tuesday, July 22, 2008, at 1:00 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: 55023595. The call can also be accessed via the Internet on the Investors page of Liberty's web site at http://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 June 30, 2008 (Unaudited and in thousands, except per share amounts) Quarter Ended Six Months Ended
   June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Operating Revenue Rental $127,923 $116,785 $263,436 $231,282 Operating
   expense reimbursement 58,458 51,465 116,319 101,641 Total operating revenue 186,381 168,250 379,755 332,923 Operating Expenses
   Rental property 36,992 35,307 77,057 70,886 Real estate taxes 23,804 18,405 44,630 34,481 General and administrative 13,070
   12,643 27,037 25,726 Depreciation and amortization 43,892 37,396 87,866 73,241 Total operating expenses 117,758 103,751 236,590
   204,334 Operating Income 68,623 64,499 143,165 128,589 Other Income/Expense Interest and other 3,034 2,884 6,128 5,403 Interest
   (37,316) (28,877) (79,746) (55,884) Total other income/expense (34,282) (25,993) (73,618) (50,481) Income before property
   dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures 34,341 38,506 69,547
   78,108 Gain on property dispositions 835 1,299 1,476 1,451 Income taxes (580) (213) (1,064) (514) Minority interest (6,630)
   (6,045) (13,036) (11,524) Equity in earnings of unconsolidated joint ventures 1,010 326 1,387 1,055 Income from continuing
   operations 28,976 33,873 58,310 68,576 Discontinued operations net of minority interest (including net gain on property dispositions
   of $2,793 and $17,430 for the quarters ended June 30, 2008 and 2007 and $3,403 and $20,231 for the six month periods ended
   June 30, 2008 and 2007) 2,653 18,554 3,280 23,549 Net Income $31,629 $52,427 $61,590 $92,125 Basic income per common share
   Continuing operations $0.31 $0.37 $0.63 $0.75 Discontinued operations $0.03 $0.20 $0.04 $0.26 Total basic income per common
   share $0.34 $0.57 $0.67 $1.01 Diluted income per common share Continuing operations $0.31 $0.37 $0.63 $0.74 Discontinued operations
   $0.03 $0.20 $0.04 $0.26 Total diluted income per common share $0.34 $0.57 $0.67 $1.00 Weighted average shares Basic 92,323
   91,597 92,019 91,318 Diluted 92,701 92,328 92,248 92,168 Liberty Property Trust Statement of Funds From Operations June 30,
   2008 (Unaudited and in thousands, except per share amounts) Quarter Ended June 30, 2008 June 30, 2007 Per Per Weighted Weighted
   Average Average Dollars Share Dollars Share Reconciliation of net income to FFO - basic: Basic - income available to common
   shareholders $31,629 $0.34 $52,427 $0.57 Adjustments: Depreciation and amortization of unconsolidated joint ventures 4,329
   844 Depreciation and amortization 43,252 39,062 Gain on property dispositions (3,164) (18,549) Minority interest share in
   addback for depreciation and amortization and gain on property dispositions (1,914) (938) Funds from operations available
   to common shareholders - basic $74,132 $0.80 $72,846 $0.80 Reconciliation of net income to FFO - diluted: Diluted - income
   available to common shareholders $31,629 $0.34 $52,427 $0.57 Adjustments: Depreciation and amortization of unconsolidated
   joint ventures 4,329 844 Depreciation and amortization 43,252 39,062 Gain on property dispositions (3,164) (18,549) Minority
   interest excluding preferred unit distributions 1,428 2,407 Funds from operations available to common shareholders - diluted
   $77,474 $0.80 $76,191 $0.79 Reconciliation of weighted average shares: Weighted average common shares - all basic calculations
   92,323 91,597 Dilutive shares for long term compensation plans 378 731 Diluted shares for net income calculations 92,701 92,328
   Weighted average common units 4,190 4,190 Diluted shares for funds from operations calculations 96,891 96,518 Six Months Ended
   June 30, 2008 June 30, 2007 Per Per Weighted Weighted Average Average Dollars Share Dollars Share Reconciliation of net income
   to FFO - basic: Basic - income available to common shareholders $61,590 $0.67 $92,125 $1.01 Adjustments: Depreciation and
   amortization of unconsolidated joint ventures 7,877 1,685 Depreciation and amortization 86,630 76,989 Gain on property dispositions
   (4,132) (21,936) Minority interest share in addback for depreciation and amortization and gain on property dispositions (3,909)
   (2,484) Funds from operations available to common shareholders - basic $148,056 $1.61 $146,379 $1.60 Reconciliation of net
   income to FFO - diluted: Diluted - income available to common shareholders $61,590 $0.67 $92,125 $1.00 Adjustments: Depreciation
   and amortization of unconsolidated joint ventures 7,877 1,685 Depreciation and amortization 86,630 76,989 Gain on property
   dispositions (4,132) (21,936) Minority interest excluding preferred unit distributions 2,780 4,222 Funds from operations available
   to common shareholders - diluted $154,745 $1.60 $153,085 $1.59 Reconciliation of weighted average shares: Weighted average
   common shares - all basic calculations 92,019 91,318 Dilutive shares for long term compensation plans 229 850 Diluted shares
   for net income calculations 92,248 92,168 Weighted average common units 4,190 4,190 Diluted shares for funds from operations
   calculations 96,438 96,358 Liberty Property Trust Balance Sheet June 30, 2008 (In thousands, except share amounts) June 30,
   2008 December 31, 2007 Assets (Unaudited) Real estate: Land and land improvements $792,067 $796,501 Building and improvements
   4,184,851 4,434,731 Less: accumulated depreciation (927,575) (863,609) Operating real estate 4,049,343 4,367,623 Development
   in progress 316,369 328,138 Land held for development 221,775 247,124 Net real estate 4,587,487 4,942,885 Cash and cash equivalents
   13,579 37,989 Restricted cash 54,535 34,567 Accounts receivable 10,797 12,217 Deferred rent receivable 80,644 80,087 Deferred
   financing and leasing costs, net of accumulated amortization (2008, $134,547; 2007, $119,721) 131,490 144,689 Investment in
   unconsolidated joint ventures 319,622 278,383 Prepaid expenses and other assets 78,842 107,932 Total assets $5,276,996 $5,638,749
   Liabilities Mortgage loans $207,496 $243,169 Unsecured notes 2,155,000 2,155,000 Credit facility 375,000 622,960 Accounts
   payable 50,443 44,666 Accrued interest 37,816 39,725 Dividend and distributions payable 60,705 59,849 Other liabilities 199,732
   263,738 Total liabilities 3,086,192 3,429,107 Minority interest 370,362 372,621 Shareholders' Equity Common shares of beneficial
   interest, $.001 par value, 183,987,000 shares authorized, 94,186,521 (includes 1,249,909 in treasury) and 92,817,879 (includes
   1,249,909 in treasury) shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively 94 93 Additional
   paid-in capital 2,021,368 1,984,141 Accumulated other comprehensive income 21,707 21,378 Distributions in excess of net income
   (170,776) (116,640) Common shares in treasury, at cost, 1,249,909 shares as of June 30, 2008 and December 31, 2007 (51,951)
   (51,951) Total shareholders' equity 1,820,442 1,837,021 Total liabilities & shareholders' equity $5,276,996 $5,638,749
   

SOURCE Liberty Property Trust

http://www.libertyproperty.com 

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