-----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, OahHJqNmVnp4iH4d7nZi+G31HfkdRI2n85ac+KlkWRJl6B6GIoiLxzJb693u2ukV 8rqQLCU0moeAlMsYQ1P31w== 0000921112-98-000011.txt : 19980626 0000921112-98-000011.hdr.sgml : 19980626 ACCESSION NUMBER: 0000921112-98-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980624 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980625 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: 98653714 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: 98653715 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): June 24, 1998 LIBERTY PROPERTY TRUST LIBERTY PROPERTY LIMITED PARTNERSHIP ------------------------------------ (Exact names of registrants as specified in their respective 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) Registrants' 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 92.40% interest in the Operating Partnership (as of March 31, 1998) (the Trust and the Operating Partnership are collectively referred to as the "Company"). On June 23, 1998, the Company entered into a contract to acquire title to an office property, comprising 156,000 leaseable square feet, located in Boca Raton, Florida ("Boca Colonnade"). The Company's Total Investment (as defined below) in this property is anticipated to be approximately $20.2 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. Pursuant to Rule 3-14 of Regulation S-X, audited historical financial information concerning Boca Colonnade 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 Boca Colonnade, included the 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 property and anticipated changes therein under Company ownership, physical condition and location of the property, 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 property, 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. - ------------------------------- The statements contained in this filing may include forward-looking statements within the meaning of the federal securities law. Although the Company 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 and uncertainties that could cause actual results to differ materially from the expected results. 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 re-leasing activities. Additional information on factors which could impact the Company and the forward-looking statements contained herein are detailed in the Company's filings with the Securities and Exchange Commission. - -2- ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS - ------------------------------------------ PAGE ---- (a) Financial Statements of Real Estate Operations to be Acquired Statement of Operating Revenues and Certain Operating Expenses for Boca Colonnade Report of Independent Auditors........................ 4 Statement of Operating Revenues and Certain Operating Expenses for Boca Colonnade for the three months ended March 31, 1998 (unaudited) and for the year ended December 31, 1997............. 5 Notes to the Statement of Operating Revenues and Certain Operating Expenses for Boca Colonnade for the three months ended March 31, 1998 (unaudited) and for the year ended December 31, 1997............. 6 (b) Pro Forma Financial Information (unaudited) Liberty Property Trust...................................... 8 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998....................................... 9 Pro Forma Consolidated Statement of Operations for the three months ended March 31, 1998.................... 10 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the three months ended March 31, 1998....................................... 11 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997..................... 12 Notes to Pro Forma Consolidated Financial Statement for the year ended December 31, 1997................. 13 Liberty Property Limited Partnership......................... 14 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998....................................... 15 Pro Forma Consolidated Statement of Operations for the three months ended March 31, 1998.................... 16 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the three months ended March 31, 1998....................................... 17 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997..................... 18 Notes to Pro Forma Consolidated Financial Statement for the year ended December 31, 1997................. 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 Boca Colonnade, as defined in Note 1, for the year ended December 31, 1997. This financial statement is the responsibility of the management of Boca Colonnade. 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 Boca Colonnade's 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, 1997, in conformity with generally accepted accounting principles. /s/ FEGLEY & ASSOCIATES Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES June 24, 1998 - -4- STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR BOCA COLONNADE FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED) AND FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS) THREE MONTHS YEAR ENDED ENDED MARCH 31, DECEMBER 31, 1998 1997 --------------- ------------ Operating revenues: Rental $ 398 $ 1,592 Operating expense reimbursement 273 1,090 ------ -------- Total operating revenues 671 2,682 ------ -------- Certain operating expenses: Rental property expenses 249 997 Real estate taxes 48 190 ------ -------- Total certain operating expenses 297 1,187 ------ -------- Operating revenues in excess of certain operating expenses $ 374 $ 1,495 ====== ======== The accompanying notes are an integral part of this statement. - -5- NOTES TO THE STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR BOCA COLONNADE FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED) AND FOR THE YEAR ENDED DECEMBER 31, 1997 1. Summary of Significant Accounting Policies - ---------------------------------------------- The Statement of Operating Revenues and Certain Operating Expenses (see "Basis of Presentation" below) includes the operations of Boca Colonnade. Liberty Property Trust (the "Company") owns an approximate 92.40% partners' interest in the Operating Partnership (as of March 31, 1998) (the Trust and the Operating Partnership are collectively referred to as the "Company"). PROPERTY NAME LOCATION DESCRIPTION - -------------------------- -------------------- -------------------- 777 Yamato Road Boca Raton, FL Office building 156,024 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 Boca Colonnade that would cause the reported financial information not to be indicative of future operating results. General company overhead has not been allocated to Boca Colonnade. Boca Colonnade consists of commercial office space leased to tenants under leases with varying terms. Tenant renewal options are available. 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. - -6- 2. MINIMUM FUTURE RENTALS - --------------------------- Future minimum rental payments due from tenants of Boca Colonnade under non-cancellable operating leases as of March 31, 1998 are as follows (in thousands): 1998 $ 1,645 1999 1,692 2000 1,080 2001 266 2002 143 Thereafter 15 -------- Total $ 4,841 ======== - -7- LIBERTY PROPERTY TRUST PRO FORMA FINANCIAL INFORMATION (UNAUDITED) The unaudited, pro forma condensed consolidated balance sheet as of March 31, 1998 reflects the incremental effect of Boca Colonnade described in Item 5 as if the acquisition had occurred on March 31, 1998. The accompanying unaudited, pro forma consolidated statements of operations for the three months ended March 31, 1998 and the year ended December 31, 1997 reflect the incremental effect of Boca Colonnade, as if such acquisition had occurred on January 1, 1997. 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 March 31, 1998 and its Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, the unaudited, pro forma consolidated financial information provides for all adjustments necessary to reflect the effects of Boca Colonnade. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisition of Boca Colonnade 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 MARCH 31, 1998 (UNAUDITED, IN THOUSANDS)
LIBERTY PROPERTY HISTORICAL TRUST BOCA COLONNADE CONSOLIDATED ---------- -------------- ------------ ASSETS: Investment in real estate, net $2,286,903 $ 20,180 $2,307,083 Cash and cash equivalents 37,119 - 37,119 Deferred financing and leasing costs, net 31,865 - 31,865 Other assets 50,877 - 50,877 ---------- ----------- ----------- Total assets $2,406,764 $ 20,180 $2,426,944 ========== =========== =========== LIABILITIES: Mortgage loans $ 376,701 $ - $ 376,701 Unsecured notes 525,000 - 525,000 Credit facility 148,000 20,180 168,180 Convertible debentures 109,253 - 109,253 Other liabilities 103,113 - 103,113 ---------- ----------- ----------- Total liabilities 1,262,067 20,180 1,282,247 ---------- ----------- ----------- MINORITY INTEREST 86,997 - 86,997 SHAREHOLDERS' EQUITY: Series A preferred shares 120,814 - 120,814 Common shares 57 - 57 Additional paid-in capital 950,829 - 950,829 Unearned compensation (879) - (879) Dividends in excess of net income (13,121) - (13,121) ---------- ----------- ----------- Total shareholders' equity 1,057,700 - 1,057,700 ---------- ----------- ----------- Total liabilities and shareholders' equity $2,406,764 $ 20,180 $2,426,944 ========== =========== ===========
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 THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
LIBERTY BOCA PRO PROPERTY HISTORICAL COLONNADE FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 61,015 $ 398 $ 61,413 Operating expense reim- bursement 20,250 273 20,523 Management fees 147 - 147 Interest and other 1,207 - 1,207 ---------- --------- ----------- Total revenue 82,619 671 83,290 ---------- --------- ----------- OPERATING EXPENSES Rental property expenses 14,916 249 15,165 Real estate taxes 7,019 48 7,067 General and administrative 3,350 - 3,350 Depreciation and amorti- zation 14,219 - $ 126 14,345 ---------- --------- --------- ----------- Total operating expenses 39,504 297 126 39,927 ---------- --------- --------- ----------- Operating income 43,115 374 (126) 43,363 Interest expense 16,566 - 343 16,909 ---------- --------- --------- ----------- Income (loss) before minority interest 26,549 374 (469) 26,454 Minority interest 1,809 28 (35) 1,802 ---------- --------- --------- ----------- Net income (loss) 24,740 346 (434) 24,652 Preferred dividend 2,750 - - 2,750 ---------- --------- --------- ----------- Income available to common shareholders $ 21,990 $ 346 $ (434) $ 21,902 ========== ========= ========== =========== Income per common share - basic $ 0.40 $ 0.40 ========== =========== Income per common share - diluted $ 0.40 $ 0.39 ========== ========== Weighted average number of common shares out- standing - basic 55,279 55,279 ========== =========== Weighted average number of common shares out- standing - diluted 55,667 55,667 ========== ===========
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. - -10- LIBERTY PROPERTY TRUST NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company as of March 31, 1998 and for the three months ended March 31, 1998. Reflects the Total Investment in Boca Colonnade. Reflects the use of $20,180 from the credit facility to finance the Total Investment in Boca Colonnade. Reflects incremental addition of revenues and certain expenses of Boca Colonnade in order to reflect a full three months of operations for the acquisition. Reflects incremental depreciation of Boca Colonnade based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $20,180 on the credit facility to fund the purchase of Boca Colonnade. Reflects the allocation of the pro forma adjustment to minority interest based upon pro forma minority interest in the Operating Partnership of approximately 7.60%. The Company's pro forma taxable income for the year ended December 31, 1997 is approximately $24,177 which has been calculated as pro forma income from operations of approximately $24,652 plus GAAP depreciation and amortization of $14,345 less tax basis depreciation and amortization and other tax differences of approximately $14,820. - -11- LIBERTY PROPERTY TRUST PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
LIBERTY BOCA PRO PROPERTY HISTORICAL COLONNADE FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 169,859 $ 1,592 $171,451 Operating expense reim- bursement 55,502 1,090 56,592 Management fees 673 - 673 Interest and other 6,483 - 6,483 ---------- --------- ----------- Total revenue 232,517 2,682 235,199 ---------- --------- ----------- OPERATING EXPENSES Rental property expenses 43,118 997 44,115 Real estate taxes 17,961 190 18,151 General and administrative 10,650 - 10,650 Depreciation and amorti- zation 40,752 - $ 505 41,257 ---------- --------- --------- ----------- Total operating expenses 112,481 1,187 505 114,173 ---------- --------- --------- ----------- Operating income 120,036 1,495 (505) 121,026 Premium on debenture conversion 98 - - 98 Interest expense 53,888 - 1,370 55,258 ---------- --------- --------- ----------- Income (loss) before minority interest 66,050 1,495 (1,875) 65,670 Minority interest 5,606 135 (170) 5,571 ---------- --------- --------- ----------- Net income (loss) 60,444 1,360 (1,705) 60,099 Preferred dividend 4,247 - - 4,247 ---------- --------- --------- ----------- Income available to common shareholders $ 56,197 $ 1,360 $ (1,705) $ 55,852 ========== ========= ========== =========== Income per common share - basic $ 1.39 $ 1.38 ========== =========== Income per common share - diluted $ 1.38 $ 1.37 ========== ========== Weighted average number of common shares out- standing - basic 40,493 40,493 ========== =========== Weighted average number of common shares out- standing - diluted 40,806 40,806 ========== ===========
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. - -12- LIBERTY PROPERTY TRUST NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company for the year ended December 31, 1997. Reflects incremental addition of revenues and certain expenses of Boca Colonnade in order to reflect a full year of operations for the acquisition. Reflects incremental depreciation of Boca Colonnade based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $20,180 on the credit facility to fund the purchase of Boca Colonnade. Reflects the allocation of the pro forma adjustment to minority interest based upon pro forma minority interest in the Operating Partnership of approximately 9.07%. The Company's pro forma taxable income for the year ended December 31, 1997 is approximately $46,737 which has been calculated as pro forma income from operations of approximately $60,099 plus GAAP depreciation and amortization of $41,257 less tax basis depreciation and amortization and other tax differences of approximately $54,619. - -13- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA FINANCIAL INFORMATION (UNAUDITED) The unaudited, pro forma condensed consolidated balance sheet as of March 31, 1998 reflects the incremental effect of Boca Colonnade described in Item 5 as if the acquisition had occurred on March 31, 1998. The accompanying unaudited, pro forma consolidated statements of operations for the three months ended March 31, 1998 and the year ended December 31, 1997 reflect the incremental effect of Boca Colonnade, as if such acquisition had occurred on January 1, 1997. 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 March 31, 1998 and its Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, the unaudited, pro forma consolidated financial information provides for all adjustments necessary to reflect the effects of Boca Colonnade. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisition of Boca Colonnade 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 MARCH 31, 1998 (UNAUDITED, IN THOUSANDS)
LIBERTY PROPERTY LIMITED HISTORICAL PARTNERSHIP BOCA COLONNADE CONSOLIDATED ---------- -------------- ------------ ASSETS: Investment in real estate, net $2,286,903 $ 20,180 $2,307,083 Cash and cash equivalents 37,119 - 37,119 Deferred financing and leasing costs, net 31,865 - 31,865 Other assets 50,877 - 50,877 ---------- ----------- ----------- Total assets $2,406,764 $ 20,180 $2,426,944 ========== =========== =========== LIABILITIES: Mortgage loans $ 376,701 $ - $ 376,701 Unsecured notes 525,000 - 525,000 Credit facility 148,000 20,180 168,180 Convertible debentures 109,253 - 109,253 Other liabilities 103,113 - 103,113 ---------- ----------- ----------- Total liabilities 1,262,067 20,180 1,282,247 ---------- ----------- ----------- OWNERS' EQUITY: General partner's equity 1,057,700 - 1,057,700 Limited partners' equity 86,997 - 86,997 ---------- ----------- ----------- Total owners' equity 1,144,697 - 1,144,697 ---------- ----------- ----------- Total liabilities and owners' equity $2,406,764 $ 20,180 $2,426,944 ========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma condensed consolidated financial statement. - -15- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED AND IN THOUSANDS)
LIBERTY PROPERTY PRO LIMITED HISTORICAL BOCA COLONNADE FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 61,015 $ 398 $ 61,413 Operating expense reim- bursement 20,250 273 20,523 Management fees 147 - 147 Interest and other 1,207 - 1,207 ---------- --------- ------------ Total revenue 82,619 671 83,290 ---------- --------- ------------ OPERATING EXPENSES Rental property expenses 14,916 249 15,165 Real estate taxes 7,019 48 7,067 General and administrative 3,350 - 3,350 Depreciation and amorti- zation 14,219 - $ 126 14,345 ---------- --------- ---------- ------------ Total operating expenses 39,504 297 126 39,927 ---------- --------- ---------- ------------ Operating income 43,115 374 (126) 43,363 Interest expense 16,566 - 343 16,909 ---------- --------- ---------- ------------ Net income (loss) $ 26,549 $ 374 $ (469) $ 26,454 ========== ========= ========== ============ Net income (loss) allocated to general partner $ 24,740 $ 346 $ (434) $ 24,652 Net income (loss) allocated to limited partners 1,809 28 (35) 1,802 ========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. - -16- LIBERTY PROPERTY LIMITED PARTNERSHIP NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company as of March 31, 1998 and for the three months ended March 31, 1998. Reflects the Total Investment in Boca Colonnade. Reflects the use of $20,180 from the credit facility to finance the Total Investment in Boca Colonnade. Reflects the incremental addition of revenues and certain expenses of Boca Colonnade in order to reflect a full three months of operations for the acquisition. Reflects incremental depreciation of Boca Colonnade based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $20,180 on the credit facility to fund the purchase of Boca Colonnade. 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 7.60%. - -17- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED AND IN THOUSANDS)
LIBERTY PROPERTY BOCA PRO LIMITED HISTORICAL COLONNADE FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 169,859 $ 1,592 $ 171,451 Operating expense reim- bursement 55,502 1,090 56,592 Management fees 673 - 673 Interest and other 6,483 - 6,483 ---------- --------- ------------ Total revenue 232,517 2,682 235,199 ---------- --------- ------------ OPERATING EXPENSES Rental property expenses 43,118 997 44,115 Real estate taxes 17,961 190 18,151 General and administrative 10,650 - 10,650 Depreciation and amorti- zation 40,752 - $ 505 41,257 ---------- --------- ---------- ------------ Total operating expenses 112,481 1,187 505 114,173 ---------- --------- ---------- ------------ Operating income 120,036 1,495 (505) 121,026 Premium on debenture conversion 98 - - 98 Interest expense 53,888 - 1,370 55,258 ---------- --------- ---------- ------------ Net income (loss) $ 66,050 $ 1,495 $ (1,875) $ 65,670 ========== ========= ========== ============ Net income (loss) allocated to general partner $ 60,444 $ 1,360 $ (1,705) $ 60,099 Net income (loss) allocated to limited partners 5,606 135 (170) 5,571 ========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. - -18- LIBERTY PROPERTY LIMITED PARTNERSHIP NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED, DOLLARS IN THOUSANDS) Reflects historical financial information of the Company for the year ended December 31, 1997. Reflects the incremental addition of revenues and certain expenses of Boca Colonnade in order to reflect a full year of operations for the acquisition. Reflects incremental depreciation of Boca Colonnade based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $20,180 on the credit facility to fund the purchase of Boca Colonnade. 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 9.07%. - -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: June 24, 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: June 24, 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. 333-53297) and related Prospectus of Liberty Property Trust, 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-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 June 24, 1998, with respect to the Statement of Operating Revenues and Certain Operating Expenses for Boca Colonnade, included in the Current Report on Form 8-K of Liberty Property Trust and Liberty Property Limited Partnership dated June 24, 1998, filed with the Securities and Exchange Commission. /s/ FEGLEY & ASSOCIATES Fegley & Associates Plymouth Meeting, PA June 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----