Liberty Property Trust (NYSE:LPT) Q1 2018 Earnings Conference Call - Preliminary Transcript
Apr 24, 2018 • 01:00 pm ET
Good afternoon. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Liberty Property Trust First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.
Jeanne Leonard, you may begin your conference.
Thank you, Chris. Good afternoon everyone and thank you for tuning in today. You are going to hear prepared remarks from Chief Executive Officer, Bill Hankowsky; Chief Financial Officer, Chris Papa; and Chief Investment Officer, Mike Hagan. Also in the room and available for questions is Chief Accounting Officer, Mary Beth Morrissey. This morning Liberty issued a press release detailing our results as well as our supplemental financial package, and you can access these in the Investor section of Liberty's website at Libertyproperty.com.
In these documents, you will also find a reconciliation of non-GAAP financial measures to GAAP measures. I will also remind you that some of the statements made during this call will include forward-looking statements within the meaning of the federal securities laws. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that these 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, risks that were detailed in the issued press release and from time-to-time 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.
Bill, would you like to begin?
Thank you, Jeanne, and good afternoon, everyone. As you know, we had an excellent quarter from an operations perspective. But before we begin, we believe it's important to address recent developments concerning our Comcast Technology Center development project. Last week, we filed an 8-K to make you aware of an unusual situation at CTC, a $950 million mixed-use project which is nearing completion. Let me walk you through it. As is customary in many developing projects, Liberty, as developer entered into agreement with a contractor whereby the contractor agreed that the cost to construct the building will not exceed a guaranteed maximum price for GMP.
In the normal cost for project like this, the developer is provided by the contractor on a monthly basis or more often, a detailed accounting of progress versus the GMP and cost to complete with certified backup to substantiate those expenditures. Since the initiation of the project in 2014, our experienced team of developers, construction experts, project accountants and consultants has been fully engaged in this process. The late in the fourth quarter of 2017, our third-party contractor notified us that they have incurred cost overruns on the project and expect additional cost to complete the project, which are purported cost beyond the guaranteed maximum price.