-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qa1PE9RgmfRvUhQFtsND2U+JvqLwHfVpf8hjVli733o1RA1Nu+/kJvlVWqAtpm/8 6VbZO6HQy1h/J9uCsYFMSw== 0000921112-98-000003.txt : 19980119 0000921112-98-000003.hdr.sgml : 19980119 ACCESSION NUMBER: 0000921112-98-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980116 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980116 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY PROPERTY TRUST CENTRAL INDEX KEY: 0000921112 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 237768996 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13130 FILM NUMBER: 98508500 BUSINESS ADDRESS: STREET 1: 65 VALLEY STREAM PKWY STREET 2: STE 100 CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6106481700 MAIL ADDRESS: STREET 1: 65 VALLEY STREAM PKWY STREET 2: SUITE 100 CITY: MALVERN STATE: PA ZIP: 19355 FORMER COMPANY: FORMER CONFORMED NAME: ROUSE & ASSOCIATES PROPERTY TRUST DATE OF NAME CHANGE: 19940421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY PROPERTY LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000921113 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 232766549 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13132 FILM NUMBER: 98508501 BUSINESS ADDRESS: STREET 1: 65 VALLEY STREAM PKWY STREET 2: STE 100 CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6106481700 MAIL ADDRESS: STREET 1: 65 VALLEY STREAM PKWY STREET 2: SUITE 100 CITY: MALVERN STATE: PA ZIP: 19355 FORMER COMPANY: FORMER CONFORMED NAME: ROUSE & ASSOCIATES LTD PART DATE OF NAME CHANGE: 19940331 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 16, 1998 (January 6, 1998) LIBERTY PROPERTY TRUST LIBERTY PROPERTY LIMITED PARTNERSHIP ------------------------------------ (Exact name of registrant as specified in their governing documents) MARYLAND 1-13130 23-7768996 PENNSYLVANIA 1-13132 23-2766549 - --------------------------- ------------- ------------------- State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 65 VALLEY STREAM PARKWAY, SUITE 100 MALVERN, PENNSYLVANIA 19355 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (610) 648-1700 ITEM 5: OTHER EVENTS - --------------------- Liberty Property Limited Partnership is a Pennsylvania limited partnership (the "Operating Partnership"). Liberty Property Trust, a Maryland real estate investment trust (the "Trust"), owns an approximate 90.11% interest in the Operating Partnership (as of September 30, 1997) (the Trust and the Operating Partnership are collectively referred to as the "Company"): On January 6, 1998, the Company acquired title to two office properties, comprising 281,505 leaseable square feet, located in Troy, Michigan (the "Liberty Center Properties"). The Company's total investment in these properties is anticipated to be approximately $43.4 million. The "total investment" for a property is defined as the property's purchase price plus closing costs and management's estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and where appropriate, other development costs and carrying costs required to reach rent commencement(the "Total Investment"). Pursuant to Rule 3-14 of Regulation S-X, audited historical financial information concerning the Liberty Center Properties is provided in Item 7 of this Current Report on Form 8-K. Additionally, certain pro forma information is provided in Item 7. Factors considered by the Company in determining the price to be paid for the Liberty Center Properties included their historical and expected cash flow, the nature of tenants and terms of leases in place, occupancy rates, opportunities for alternative and new tenancies, current operating costs and real estate taxes on the properties and anticipated changes therein under Company ownership, physical condition and locations of the properties, the anticipated effect to the Company's financial results (particularly funds from operations), the ability to sustain and potentially increase its distributions to Company shareholders, and other factors. The Company took into consideration the capitalization rates at which it believed other comparable buildings were recently sold, but determined the price it was willing to pay primarily on factors discussed above relating to the properties themselves and their fit into the Company's operations. The Company, after investigation of the properties, is not aware of any material fact, other than those enumerated above, that would cause the financial information reported not to be necessarily indicative of future operating results. - ------------------------------- Statements contained in this report contain forward-looking statements with respect to estimates of Total Investment, pro forma financial information and their underlying assumptions. As such, these statements involve risks and uncertainties that could affect future results, and accordingly, such results may differ from those expressed herein. These risks and uncertainties include, but are not limited to, uncertainties affecting real estate businesses generally, risks relating to acquisition activities and risks relating to leasing and releasing activities and rates. -2- ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS - ------------------------------------------ PAGE ---- (a) Financial Statements of Businesses Acquired (1) Statement of Operating Revenues and Certain Operating Expenses for the Liberty Center Properties Report of Independent Auditors........................ 4 Statement of Operating Revenues and Certain Operating Expenses for the Liberty Center Properties for the nine months ended September 30, 1997 (unaudited) and for the year ended December 31, 1996.................................. 5 Notes to the Statement of Operating Revenues and Certain Operating Expenses for the Liberty Center Properties for the nine months ended September 30, 1997 (unaudited) and for the year December 31, 1996............................................... 6 (b) Pro Forma Financial Information (unaudited) Liberty Property Trust...................................... 8 Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997................................. 9 Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 1997........... 10 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 1997................................. 11 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1996................... 12 Notes to Pro Forma Consolidated Statement of Operations for the year ended December 31, 1996.... 13 Liberty Property Limited Partnership......................... 14 Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997................................. 15 Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 1997........... 16 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 1997.................................. 17 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1996................... 18 Notes to Pro Forma Consolidated Statement of Operations for the year ended December 31, 1996.... 19 Signatures......................................................... 20 (c) Exhibits 23 Consent of Fegley & Associates...................... 21 -3- REPORT OF INDEPENDENT AUDITORS To The Board of Trustees and Shareholders Liberty Property Trust We have audited the accompanying Statement of Operating Revenues and Certain Operating Expenses of the Liberty Center Properties, as defined in Note 1, for the year ended December 31, 1996. This financial statement is the responsibility of the management of the Liberty Center Properties. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying Statement of Operating Revenues and Certain Operating Expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Current Report on Form 8-K of Liberty Property Trust and Liberty Property Limited Partnership) and, as described in Note 1, is not intended to be a complete presentation of the Liberty Center Properties' revenues and expenses. In our opinion, the Statement of Operating Revenues and Certain Operating Expenses referred to above presents fairly, in all material respects, the Operating Revenues and Certain Operating Expenses described in Note 1 for the year ended December 31, 1996, in conformity with generally accepted accounting principles. /s/ FEGLEY & ASSOCIATES Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES January 15, 1998 -4- STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR THE LIBERTY CENTER PROPERTIES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS) NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ Operating revenues: Rental $ 2,557 $ 3,196 Operating expense reimbursement 1,678 1,964 ------- ------- Total operating revenues 4,235 5,160 ------- ------- Certain operating expenses: Rental property expenses 995 1,270 Real estate taxes 413 554 ------- ------- Total certain operating expenses 1,408 1,824 ------- ------- Operating revenues in excess of certain operating expenses $ 2,827 $ 3,336 ======= ======= The accompanying notes are an integral part of this statement. -5- NOTES TO THE STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR THE LIBERTY CENTER PROPERTIES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1996 1. Summary of Significant Accounting Policies - ---------------------------------------------- The Statement of Operating Revenues and Certain Operating Expenses (see "Basis of Presentation" below) includes the operations of the Liberty Center Properties. Liberty Property Trust (the "Company") owns an approximate 90.11% partners' interest in the Operating Partnership (as of September 30, 1997) (the Trust and the Operating Partnership are collectively referred to as the "Company"). PROPERTY NAME LOCATION DESCRIPTION - -------------------------- -------------------- -------------------- 50 West Big Bear Road Troy, Michigan Multi-story office building 142,290 square feet 100 West Big Bear Road Troy, Michigan Multi-story office building 139,215 square feet USE OF ESTIMATES - ---------------- Generally accepted accounting principles required management to make estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported revenues and expenses. BASIS OF PRESENTATION - --------------------- The Statement of Operating Revenues and Certain Operating Expenses is presented in conformity with Rule 3-14 of the Securities and Exchange Commission. Accordingly, depreciation, interest and income taxes are not presented. The Company is not aware of any factors relating to the Liberty Center Properties that would cause the reported financial information not to be indicative of future operating results. General company overhead has not been allocated to the Liberty Center Properties. The financial information presented for the nine months ended September 30, 1997 is unaudited. In the opinion of management, the unaudited financial information contains all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Statement of Revenues and Certain Operating Expenses for the Liberty Center Properties. The properties consist of commercial office space leased to tenants under leases with varying terms. Tenant renewal options are available. -6- REVENUE RECOGNITION - ------------------- Base rental income attributable to leases is recorded on a straight-line basis over the applicable lease term. The leases also typically provide for tenant reimbursement of common area maintenance and other operating expenses which are included in the accompanying Statement of Operating Revenue and Certain Operating Expenses as operating expense reimbursements. 2. MINIMUM FUTURE RENTALS - --------------------------- Future minimum rental payments due from tenants of the Liberty Center Properties under non-cancellable operating leases as of December 31, 1996 are as follows (in thousands): 1997 $ 3,503 1998 3,403 1999 2,802 2000 2,011 2001 1,748 Thereafter 2,779 ------- Total $16,246 ======= -7- LIBERTY PROPERTY TRUST PRO FORMA FINANCIAL INFORMATION (UNAUDITED) The unaudited, pro forma condensed consolidated balance sheet as of September 30, 1997 reflects the incremental effect of the Liberty Center Properties described in Item 5 as if the acquisitions had occurred on September 30, 1997. The accompanying unaudited, pro forma consolidated statement of operations for the nine months ended September 30, 1997 and the year ended December 31, 1996 reflect the incremental effect of the Liberty Center Properties, as if such acquisitions had occurred on January 1, 1996. These statements should be read in conjunction with respective consolidated financial statements and notes thereto included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and its Annual Report on Form 10-K for the year ended December 31, 1996. In the opinion of management, the unaudited, pro forma consolidated financial information provides for all adjustments necessary to reflect the effects of the Liberty Center Properties. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisition of the Liberty Center Properties had been in effect on the dates indicated, nor does it purport to represent the financial position, results of operations or cash flows for future periods. -8- LIBERTY PROPERTY TRUST PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 (UNAUDITED, IN THOUSANDS) LIBERTY THE LIBERTY PROPERTY HISTORICAL CENTER TRUST PROPERTIES CONSOLIDATED ---------- ----------- ------------ ASSETS: Investment in real estate, net $1,625,549 $ 43,400 $1,668,949 Cash and cash equivalents 24,097 - 24,097 Deferred financing and leasing costs, net 29,439 - 29,439 Other assets 56,114 - 56,114 ---------- ----------- ----------- Total assets $1,735,199 $ 43,400 $1,778,599 ========== =========== =========== LIABILITIES: Mortgage loans $ 391,055 $ - $ 391,055 Unsecured notes 200,000 - 200,000 Subordinated debentures 114,820 - 114,820 Line of credit 146,000 43,400 189,400 Other liabilities 86,633 - 86,633 ---------- ----------- ----------- Total liabilities 938,508 43,400 981,908 ---------- ----------- ----------- MINORITY INTEREST 66,430 - 66,430 SHAREHOLDERS' EQUITY: Series A preferred shares 125,000 - 125,000 Common shares 43 - 43 Additional paid-in capital 606,309 - 606,309 Unearned compensation (1,091) - (1,091) Retained earnings - - - ---------- ----------- ----------- Total shareholders' equity 730,261 - 730,261 ---------- ----------- ----------- Total liabilities and shareholders' equity $1,735,199 $ 43,400 $1,778,599 ========== =========== =========== The accompanying notes are an integral part of this unaudited, pro forma condensed consolidated financial statement. -9- LIBERTY PROPERTY TRUST PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
THE LIBERTY LIBERTY CENTER PRO PROPERTY HISTORICAL PROPERTIES FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ----------- ------------ ------------ REVENUE Rental $ 119,223 $ 2,557 $121,780 Operating expense reim- bursement 38,121 1,678 39,799 Management fees 516 - 516 Interest and other 2,244 - 2,244 ---------- --------- ----------- Total revenue 160,104 4,235 164,339 ---------- --------- ----------- OPERATING EXPENSES Rental property expenses 29,849 995 30,844 Real estate taxes 12,297 413 12,710 General and administrative 7,602 - 7,602 Depreciation and amorti- zation 28,787 - $ 814 29,601 ---------- --------- --------- ----------- Total operating expenses 78,535 1,408 814 80,757 ---------- --------- --------- ----------- Operating income 81,569 2,827 (814) 83,582 Premium on debenture conversion 98 - - 98 Write off of deferred financing costs 2,919 - - 2,919 Interest expense 37,252 - 2,308 39,560 ---------- --------- --------- ----------- Income (loss) before minority interest 41,300 2,827 (3,122) 41,005 Minority interest 3,815 271 (299) 3,787 ---------- --------- --------- ----------- Net income (loss) 37,485 2,556 (2,823) 37,218 Preferred dividend 1,497 - - 1,497 ---------- --------- --------- ----------- Income available to common shareholders $ 35,988 $ 2,556 $(2,823) $ 35,721 ========== ========= ========== =========== Net income per common share - primary $ .93 =========== Weighted average number of common shares out- standing 38,551 ===========
The accompanying notes are an integral part of this unaudited, proforma consolidated financial statement. -10- LIBERTY PROPERTY TRUST NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company as of September 30, 1997 and for the nine months ended September 30, 1997. Reflects the Total Investment in the Liberty Center Properties. Reflects the use of $43,400 from the line of credit to finance the Total Investment in the Liberty Center Properties. Reflects incremental addition of revenues and certain expenses of the Liberty Center Properties in order to reflect a full nine months of operations for these acquisitions. Reflects incremental depreciation of the Liberty Center Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $43,400 on the line of credit to fund the purchase of the Liberty Center Properties. Reflects the allocation of the pro forma adjustment to minority interest based upon pro forma minority interest in the Operating Partnership of approximately 9.58%. The Company's pro forma taxable income for the nine month period ended September 30, 1997 is approximately $34,766 which has been calculated as pro forma income from operations of approximately $37,218 plus GAAP depreciation and amortization of $29,601 less tax basis depreciation and amortization and other tax differences of approximately $32,053. -11- LIBERTY PROPERTY TRUST PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
THE LIBERTY LIBERTY CENTER PRO PROPERTY HISTORICAL PROPERTIES FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ---------- ------------ ------------ REVENUE Rental $ 112,841 $ 3,196 $ 116,037 Operating expense reim- bursement 35,886 1,964 37,850 Management fees 1,340 - 1,340 Interest and other 4,198 - 4,198 ---------- -------- --------- Total revenue 154,265 5,160 159,425 ---------- -------- --------- OPERATING EXPENSES Rental property expenses 29,624 1,270 30,894 Real estate taxes 11,229 554 11,783 General and administrative 8,023 - 8,023 Depreciation and amorti- zation 28,203 - $ 1,085 29,288 ---------- -------- -------- --------- Total operating expenses 77,079 1,824 1,085 79,988 ---------- -------- --------- --------- Operating income 77,186 3,336 (1,085) 79,437 Premium on debenture con- version 1,027 - - 1,027 Interest expense 38,528 - 3,077 41,605 ---------- -------- -------- --------- Income (loss) before minority interest 37,631 3,336 (4,162) 36,805 Minority interest 3,891 345 (430) 3,806 ---------- -------- -------- ---------- Net income (loss) $ 33,740 $ 2,991 $(3,732) $ 32,999 ========== ======== ======== ========== Net income per common share - primary $ 1.11 ========== Weighted average number of common shares out- standing 29,678 ==========
The accompanying notes are an integral part of this unaudited, proforma consolidated financial statement. -12- LIBERTY PROPERTY TRUST NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical operations of the Company for the year ended December 31, 1996. Reflects the incremental addition of revenues and certain expenses of the Liberty Center Properties in order to reflect a full twelve months of operations for these acquisitions. Reflects incremental depreciation of the Liberty Center Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $43,400 on the line of credit to fund the purchase of the Liberty Center Properties. Reflects the allocation of the pro forma adjustment to minority interest based upon pro forma minority interest in the Operating Partnership of approximately 10.34%. The Company's pro forma taxable income for the year ended December 31, 1996 is approximately $31,667 which has been calculated as pro forma income from operations of approximately $32,999 plus GAAP depreciation and amortization of $29,288 less tax basis depreciation and amortization and other tax differences of approximately $30,620. -13- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA FINANCIAL INFORMATION (UNAUDITED) The unaudited, pro forma condensed consolidated balance sheet as of September 30, 1997 reflects the incremental effect of the Liberty Center Properties described in Item 5 as if the acquisitions had occurred on September 30, 1997. The accompanying unaudited, pro forma consolidated statement of operations for the nine months ended September 30, 1997 and the year ended December 31, 1996 reflects the incremental effect of the Liberty Center Properties, as if such acquisitions had occurred on January 1, 1996. These statements should be read in conjunction with respective consolidated financial statements and notes thereto included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and its Annual Report on Form 10-K for the year ended December 31, 1996. In the opinion of management, the unaudited, pro forma consolidated financial information provides for all adjustments necessary to reflect the effects of the Liberty Center Properties. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisition of the Liberty Center Properties had been in effect on the dates indicated, nor does it purport to represent the financial position, results of operations or cash flows for future periods. -14- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 (UNAUDITED, IN THOUSANDS) LIBERTY PROPERTY THE LIBERTY LIMITED HISTORICAL CENTER PARTNERSHIP PROPERTIES CONSOLIDATED ---------- ----------- ------------ ASSETS: Investment in real estate, net $1,625,549 $ 43,400 $1,668,949 Cash and cash equivalents 24,097 - 24,097 Deferred financing and leasing costs, net 29,439 - 29,439 Other assets 56,114 - 56,114 ---------- ----------- ----------- Total assets $1,735,199 $ 43,400 $1,778,599 ========== =========== =========== LIABILITIES: Mortgage loans $ 391,055 $ - $ 391,055 Unsecured notes 200,000 - 200,000 Subordinated debentures 114,820 - 114,820 Line of credit 146,000 43,400 189,400 Other liabilities 86,633 - 86,633 ---------- ----------- ----------- Total liabilities 938,508 43,400 981,908 ---------- ----------- ----------- OWNERS' EQUITY: General partner's equity 730,261 - 730,261 Limited partners' equity 66,430 - 66,430 ---------- ----------- ----------- Total owners' equity 796,691 - 796,691 ---------- ----------- ----------- Total liabilities and owners' equity $1,735,199 $ 43,400 $1,778,599 ========== =========== =========== -15- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED AND IN THOUSANDS)
LIBERTY THE LIBERTY PROPERTY CENTER PRO LIMITED HISTORICAL PROPERTIES FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ----------- ------------ ------------ REVENUE Rental $ 119,223 $ 2,557 $ 121,780 Operating expense reim- bursement 38,121 1,678 39,799 Management fees 516 - 516 Interest and other 2,244 - 2,244 ---------- --------- ------------ Total revenue 160,104 4,235 164,339 ---------- --------- ------------ OPERATING EXPENSES Rental property expenses 29,849 995 30,844 Real estate taxes 12,297 413 12,710 General and administrative 7,602 - 7,602 Depreciation and amorti- zation 28,787 - $ 814 29,601 ---------- --------- ---------- ------------ Total operating expenses 78,535 1,408 814 80,757 ---------- --------- ---------- ------------ Operating income 81,569 2,827 (814) 83,582 Premium on debenture conversion 98 - - 98 Write off of deferred financing costs 2,919 - - 2,919 Interest expense 37,252 - 2,308 39,560 ---------- --------- ---------- ------------ Net income (loss) $ 41,300 $ 2,827 $ (3,122) $ 41,005 ========== ========= ========== ============ Net income (loss) allocated to general partner $ 37,485 $ 2,556 $ (2,823) $ 37,218 Net income (loss) allocated to limited partners 3,815 271 (299) 3,787 ========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, proforma consolidated financial statement. -16- LIBERTY PROPERTY LIMITED PARTNERSHIP NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company as of September 30, 1997 and for the nine months ended September 30, 1997. Reflects the Total Investment in the Liberty Center Properties. Reflects the use of $43,400 from the line of credit to finance the Total Investment in the Liberty Center Properties. Reflects the incremental addition of revenues and certain expenses of the Liberty Center Properties in order to reflect a full nine months of operations for these acquisitions. Reflects incremental depreciation of the Liberty Center Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $43,400 on the line of credit to fund the purchase of the Liberty Center Properties. Reflects the allocation of the pro forma adjustment to the net income allocated to the limited partners based upon pro forma ownership in the Operating Partnership of approximately 9.58%. -17- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED AND IN THOUSANDS)
LIBERTY THE LIBERTY PROPERTY CENTER PRO LIMITED HISTORICAL PROPERTIES FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ------------ ------------ ------------ REVENUE Rental $ 112,841 $ 3,196 $ 116,037 Operating expense reim- bursement 35,886 1,964 37,850 Management fees 1,340 - 1,340 Interest and other 4,198 - 4,198 ---------- ---------- --------- Total revenue 154,265 5,160 159,425 ---------- ---------- --------- OPERATING EXPENSES Rental property expenses 29,624 1,270 30,894 Real estate taxes 11,229 554 11,783 General and administrative 8,023 - 8,023 Depreciation and amorti- zation 28,203 - $ 1,085 29,288 ---------- ---------- ---------- --------- Total operating expenses 77,079 1,824 1,085 79,988 ---------- ---------- ---------- --------- Operating income 77,186 3,336 (1,085) 79,437 Premium on debenture con- version 1,027 - - 1,027 Interest expense 38,528 - 3,077 41,605 ---------- ---------- ---------- --------- Net income (loss) $ 37,631 $ 3,336 $ (4,162) $ 36,805 ========== ========== ========== ========= Net income (loss) allocated to general partner $ 33,740 $ 2,991 $ (3,732) $ 32,999 Net income (loss) allocated to limited partners 3,891 345 (430) 3,806 ========== ========== ========== =========
The accompanying notes are an integral part of this unaudited, proforma consolidated financial statement. -18- LIBERTY PROPERTY LIMITED PARTNERSHIP NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company for the year ended December 31, 1996. Reflects the incremental addition of revenue and certain expenses of the Liberty Center Properties in order to reflect a full twelve months of operations for these acquisitions. Reflects incremental depreciation of the Liberty Center Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $43,400 on the line of credit to fund the purchase of the Liberty Center Properties. Reflects the allocation of the pro forma adjustment to the net income allocated to the limited partners based upon pro forma ownership in the Operating Partnership of approximately 10.34%. -19- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. LIBERTY PROPERTY TRUST Dated: January 15, 1998 BY: /s/ WILLARD G. ROUSE, III ---------------------------------------- NAME: Willard G. Rouse, III TITLE: Chief Executive Officer LIBERTY PROPERTY LIMITED PARTNERSHIP BY: LIBERTY PROPERTY TRUST, SOLE GENERAL PARTNER Dated: January 15, 1998 BY: /s/ WILLARD G. ROUSE III ---------------------------------------- NAME: Willard G. Rouse, III TITLE: Chief Executive Officer -20- EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the incorporation by reference in the Registration Statement (Form S- 3 No. 333-43267) and related Prospectus of Liberty Property Trust and Liberty Property Limited Partnership, to the incorporation by reference in the Registration Statement (Form S-3 No. 33-94782) and related Prospectus of Liberty Property Trust and Liberty Property Limited Partnership, to the incorporation by reference in the Registration Statement (Form S-3 No. 333-14139) and related Prospectus of Liberty Property Trust, to the incorporation by reference in the Registration Statement (Form S-3 No. 333-22211) and related Prospectus of Liberty Property Trust and Liberty Property Limited Partnership, to the incorporation by reference in the Registration Statement (Form S-8 No. 33-94036) and related Prospectus of Liberty Property Trust, to the incorporation by reference in the Registration Statement (Form S-8 No. 333-44149) and related Prospectus of Liberty Property Trust of our report dated January 14, 1998, with respect to the Statement of Operating Revenues and Certain Operating Expenses for the Liberty Center Properties included in the Current Report on Form 8-K of Liberty Property Trust and Liberty Property Limited Partnership dated January 6, 1998, filed with the Securities and Exchange Commission. /s/ FEGLEY & ASSOCIATES Fegley & Associates Plymouth Meeting, PA January 15, 1998 -21- -----END PRIVACY-ENHANCED MESSAGE-----