-----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, TjrxHne0sZQEzM9dIq9xfj92O1OX6dfjv69ALt6MMoMwT9iQqPhlCDCjgV/eKBxU rdQO9vLR2x+GPBh3o5NBnw== 0000921112-98-000012.txt : 19980714 0000921112-98-000012.hdr.sgml : 19980714 ACCESSION NUMBER: 0000921112-98-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980713 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980713 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: 98665204 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: 98665205 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): July 13, 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 March 4, 1998, the Company acquired title to an office property, comprising 44,926 leaseable square feet, located in Richmond, Virginia ("3829-3855 Gaskins Road"). The Company's Total Investment (as defined below) in this property is anticipated to be approximately $3.7 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. On March 31, 1998, the Company acquired title to an office property, comprising 39,834 leaseable square feet, located in Greenville, South Carolina ("15 Brendan Way"). The Company's Total Investment in this property is anticipated to be approximately $4.1 million. On April 6, 1998, the Company acquired title to two office properties, comprising 54,825 leaseable square feet, located in Sunrise, Florida (the "Sawgrass Properties"). The Company's Total Investment in these properties is anticipated to be approximately $6.0 million. On May 8, 1998, the Company acquired title to an industrial property, comprising 50,000 leaseable square feet, located in Belcamp, Maryland, ("4606 Richlynn Drive"). The Company's Total Investment in this property is anticipated to be approximately $2.2 million. Collectively, 3829-3855 Gaskins Road, 15 Brendan Way, the Sawgrass Properties, and 4606 Richlynn Drive are known as the "Acquisition Properties." Pursuant to Rule 3-14 of Regulation S-X, audited historical financial information concerning the Acquisition 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 Acquisition Properties, 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 properties and anticipated changes therein under Company ownership, physical condition and location 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 Acquisition Properties, is not aware of any material fact, other -2- 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. -3- ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS - ------------------------------------------ PAGE ---- (a) Financial Statements of Real Estate Operations Acquired Statement of Operating Revenues and Certain Operating Expenses for the Acquisition Properties Report of Independent Auditors........................ 5 Statement of Operating Revenues and Certain Operating Expenses for the Acquisition Properties for the three months ended March 31, 1998 (unaudited) and for the year ended December 31, 1997............. 6 Notes to the Statement of Operating Revenues and Certain Operating Expenses for the Acquisition Properties for the three months ended March 31, 1998 (unaudited)and for the year ended December 31, 1997.. 7 (b) Pro Forma Financial Information (unaudited) Liberty Property Trust...................................... 9 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998....................................... 10 Pro Forma Consolidated Statement of Operations for the three months ended March 31, 1998.................... 11 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the three months ended March 31, 1998....................................... 12 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997..................... 13 Notes to Pro Forma Consolidated Financial Statement for the year ended December 31, 1997................. 14 Liberty Property Limited Partnership......................... 15 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1998....................................... 16 Pro Forma Consolidated Statement of Operations for the three months ended March 31, 1998.................... 17 Notes to Pro Forma Condensed Consolidated Financial Statements as of and for the three months ended March 31, 1998....................................... 18 Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997..................... 19 Notes to Pro Forma Consolidated Financial Statement for the year ended December 31, 1997................. 20 Signatures......................................................... 21 (c) Exhibits 23 Consent of Fegley & Associates...................... 22 -4- 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 Acquisition Properties, as defined in Note 1, for the year ended December 31, 1997. This financial statement is the responsibility of the management of the Acquisition 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 Acquisition 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, 1997, in conformity with generally accepted accounting principles. /s/ FEGLEY & ASSOCIATES Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES July 7, 1998 -5- STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR THE ACQUISITION PROPERTIES 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 $ 414 $ 1,446 Operating expense reimbursement 130 550 ------ -------- Total operating revenues 544 1,996 ------ -------- Certain operating expenses: Rental property expenses 65 295 Real estate taxes 58 199 ------ -------- Total certain operating expenses 123 494 ------ -------- Operating revenues in excess of certain operating expenses $ 421 $ 1,502 ====== ======== The accompanying notes are an integral part of this statement. -6- NOTES TO THE STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES FOR THE ACQUISITION PROPERTIES 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 the Acquisition Properties. 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 - -------------------------- --------------- -------------------- 3829-3855 Gaskins Road Richmond, VA Office building 44,926 leaseable square feet 15 Brendan Way Greenville, SC Office building 39,834 leaseable square feet 13650 NW 8th Street Sunrise, FL Office building 24,732 leaseable square feet 13630 NW 8th Street Sunrise, FL Office building 30,093 leaseable square feet 4606 Richlynn Drive Belcamp, MD Industrial building 50,000 leaseable 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 Acquisition 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 Acquisition Properties. The Acquisition Properties consist of commercial office and industrial 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 -7- 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 Acquisition Properties under non-cancellable operating leases as of December 31, 1997 are as follows (in thousands): 1998 $ 1,557 1999 829 2000 600 2001 634 2002 448 Thereafter - -------- Total $ 4,068 ======== -8- 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 the Acquisition Properties described in Item 5 as if the acquisitions 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 the Acquisition Properties, as if such acquisitions 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 the Acquisition Properties. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisitions of the Acquisition 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. -9- LIBERTY PROPERTY TRUST PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1998 (UNAUDITED, IN THOUSANDS)
LIBERTY THE PROPERTY HISTORICAL ACQUISITION TRUST PROPERTIES CONSOLIDATED ---------- -------------- ------------ ASSETS: Investment in real estate, net $2,286,903 $ 16,007 $2,302,910 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 $ 16,007 $2,422,771 ========== =========== =========== LIABILITIES: Mortgage loans $ 376,701 $ - $ 376,701 Unsecured notes 525,000 - 525,000 Credit facility 148,000 16,007 164,007 Convertible debentures 109,253 - 109,253 Other liabilities 103,113 - 103,113 ---------- ----------- ----------- Total liabilities 1,262,067 16,007 1,278,074 ---------- ----------- ----------- 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 $ 16,007 $2,422,771 ========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma condensed consolidated financial statement. -10- 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)
THE LIBERTY ACQUISITION PRO PROPERTY HISTORICAL PROPERTIES FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 61,015 $ 414 $ 61,429 Operating expense reim- bursement 20,250 130 20,380 Management fees 147 - 147 Interest and other 1,207 - 1,207 ---------- --------- ----------- Total revenue 82,619 544 83,163 ---------- --------- ----------- OPERATING EXPENSES Rental property expenses 14,916 65 14,981 Real estate taxes 7,019 58 7,077 General and administrative 3,350 - 3,350 Depreciation and amorti- zation 14,219 - $ 100 14,319 ---------- --------- --------- ----------- Total operating expenses 39,504 123 100 39,727 ---------- --------- --------- ----------- Operating income 43,115 421 (100) 43,436 Interest expense 16,566 - 272 16,838 ---------- --------- --------- ----------- Income (loss) before minority interest 26,549 421 (372) 26,598 Minority interest 1,809 31 (28) 1,812 ---------- --------- --------- ----------- Net income (loss) 24,740 390 (344) 24,786 Preferred dividend 2,750 - - 2,750 ---------- --------- --------- ----------- Income available to common shareholders $ 21,990 $ 390 $ (344) $ 22,036 ========== ========= ========== =========== Income per common share - basic $ 0.40 $ 0.40 ========== =========== Income per common share - diluted $ 0.40 $ 0.40 ========== ========== 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. -11- 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 the Acquisition Properties. Reflects the use of $16,007 from the credit facility to finance the Total Investment in the Acquisition Properties. Reflects incremental addition of revenues and certain expenses of the Acquisition Properties in order to reflect a full three months of operations for the acquisition. Reflects incremental depreciation of the Acquisition Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $16,007 on the credit facility to fund the purchase of the Acquisition Properties. 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 $24,309 which has been calculated as pro forma income from operations of approximately $24,786 plus GAAP depreciation and amortization of $14,319 less tax basis depreciation and amortization and other tax differences of approximately $14,796. -12- LIBERTY PROPERTY TRUST PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THE LIBERTY ACQUISITION PRO PROPERTY HISTORICAL PROPERTIES FORMA TRUST ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 169,859 $ 1,446 $171,305 Operating expense reim- bursement 55,502 550 56,052 Management fees 673 - 673 Interest and other 6,483 - 6,483 ---------- --------- ----------- Total revenue 232,517 1,996 234,513 ---------- --------- ----------- OPERATING EXPENSES Rental property expenses 43,118 295 43,413 Real estate taxes 17,961 199 18,160 General and administrative 10,650 - 10,650 Depreciation and amorti- zation 40,752 - $ 400 41,152 ---------- --------- --------- ----------- Total operating expenses 112,481 494 400 113,375 ---------- --------- --------- ----------- Operating income 120,036 1,502 (400) 121,138 Premium on debenture conversion 98 - - 98 Interest expense 53,888 - 1,087 54,975 ---------- --------- --------- ----------- Income (loss) before minority interest 66,050 1,502 (1,487) 66,065 Minority interest 5,606 136 (135) 5,607 ---------- --------- --------- ----------- Net income (loss) 60,444 1,366 (1,352) 60,458 Preferred dividend 4,247 - - 4,247 ---------- --------- --------- ----------- Income available to common shareholders $ 56,197 $ 1,366 $ (1,352) $ 56,211 ========== ========= ========== =========== Income per common share - basic $ 1.39 $ 1.39 ========== =========== Income per common share - diluted $ 1.38 $ 1.38 ========== ========== 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. -13- 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 the Acquisition Properties in order to reflect a full year of operations for the acquisition. Reflects incremental depreciation of the Acquisition Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $16,007 on the credit facility to fund the purchase of the Acquisition Properties. Reflects the allocation of the pro forma adjustment to minority interest based upon pro forma minority interest in the Operating Partnership of approximately 9.07%. The Company's pro forma taxable income for the year ended December 31, 1997 is approximately $47,097 which has been calculated as pro forma income from operations of approximately $60,458 plus GAAP depreciation and amortization of $41,152 less tax basis depreciation and amortization and other tax differences of approximately $54,513. -14- 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 the Acquisition Properties described in Item 5 as if the acquisitions 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 the Acquisition Properties, as if such acquisitions 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 the Acquisition Properties. These pro forma statements may not necessarily be indicative of the results that would have actually occurred if the acquisitions of the Acquisition 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. -15- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1998 (UNAUDITED, IN THOUSANDS)
LIBERTY PROPERTY THE LIMITED HISTORICAL ACQUISITION PARTNERSHIP PROPERTIES CONSOLIDATED ---------- -------------- ------------ ASSETS: Investment in real estate, net $2,286,903 $ 16,007 $2,302,910 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 $ 16,007 $2,422,771 ========== =========== =========== LIABILITIES: Mortgage loans $ 376,701 $ - $ 376,701 Unsecured notes 525,000 - 525,000 Credit facility 148,000 16,007 164,007 Convertible debentures 109,253 - 109,253 Other liabilities 103,113 - 103,113 ---------- ----------- ----------- Total liabilities 1,262,067 16,007 1,278,074 ---------- ----------- ----------- 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 $ 16,007 $2,422,771 ========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma condensed consolidated financial statement. -16- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED AND IN THOUSANDS)
LIBERTY THE PROPERTY ACQUISITION PRO LIMITED HISTORICAL PROPERTIES FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 61,015 $ 414 $ 61,429 Operating expense reim- bursement 20,250 130 20,380 Management fees 147 - 147 Interest and other 1,207 - 1,207 ---------- --------- ------------ Total revenue 82,619 544 83,163 ---------- --------- ------------ OPERATING EXPENSES Rental property expenses 14,916 65 14,981 Real estate taxes 7,019 58 7,077 General and administrative 3,350 - 3,350 Depreciation and amorti- zation 14,219 - $ 100 14,319 ---------- --------- ---------- ------------ Total operating expenses 39,504 123 100 39,727 ---------- --------- ---------- ------------ Operating income 43,115 421 (100) 43,436 Interest expense 16,566 - 272 16,838 ---------- --------- ---------- ------------ Net income (loss) $ 26,549 $ 421 $ (372) $ 26,598 ========== ========= ========== ============ Net income (loss) allocated to general partner $ 24,740 $ 390 $ (344) $ 24,786 Net income (loss) allocated to limited partners 1,809 31 (28) 1,812 ========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. -17- 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 the Acquisition Properties. Reflects the use of $16,007 from the credit facility to finance the Total Investment in the Acquisition Properties. Reflects the incremental addition of revenues and certain expenses of the Acquisition Properties in order to reflect a full three months of operations for the acquisition. Reflects incremental depreciation of the Acquisition Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $16,007 on the credit facility to fund the purchase of the Acquisition 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 7.60%. -18- LIBERTY PROPERTY LIMITED PARTNERSHIP PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED AND IN THOUSANDS)
LIBERTY THE PROPERTY ACQUISITION PRO LIMITED HISTORICAL PROPERTIES FORMA PARTNERSHIP ADJUSTMENTS CONSOLIDATED ---------- ------------- ------------ ------------ REVENUE Rental $ 169,859 $ 1,446 $ 171,305 Operating expense reim- bursement 55,502 550 56,052 Management fees 673 - 673 Interest and other 6,483 - 6,483 ---------- --------- ------------ Total revenue 232,517 1,996 234,513 ---------- --------- ------------ OPERATING EXPENSES Rental property expenses 43,118 295 43,413 Real estate taxes 17,961 199 18,160 General and administrative 10,650 - 10,650 Depreciation and amorti- zation 40,752 - $ 400 41,152 ---------- --------- ---------- ------------ Total operating expenses 112,481 494 400 113,375 ---------- --------- ---------- ------------ Operating income 120,036 1,502 (400) 121,138 Premium on debenture conversion 98 - - 98 Interest expense 53,888 - 1,087 54,975 ---------- --------- ---------- ------------ Net income (loss) $ 66,050 $ 1,502 $ (1,487) $ 66,065 ========== ========= ========== ============ Net income (loss) allocated to general partner $ 60,444 $ 1,366 $ (1,352) $ 60,458 Net income (loss) allocated to limited partners 5,606 136 (135) 5,607 ========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma consolidated financial statement. -19- 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 the Acquisition Properties in order to reflect a full year of operations for the acquisition. Reflects incremental depreciation of the Acquisition Properties based on asset lives of 40 years. Reflects an incremental increase in interest expense from the assumed borrowings of $16,007 on the credit facility to fund the purchase of the Acquisition 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 9.07%. -20- 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: July 13, 1998 BY: /s/ GEORGE J. ALBURGER, JR. ---------------------------------------- NAME: George J. Alburger, Jr. TITLE: Chief Financial Officer LIBERTY PROPERTY LIMITED PARTNERSHIP BY: LIBERTY PROPERTY TRUST, SOLE GENERAL PARTNER Dated: July 13, 1998 BY: /s/ GEORGE J. ALBURGER, JR. ---------------------------------------- NAME: George J. Alburger, Jr. TITLE: Chief Financial Officer -21- 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 July 7, 1998, with respect to the Statement of Operating Revenues and Certain Operating Expenses for the Acquisition Properties, included in the Current Report on Form 8-K of Liberty Property Trust and Liberty Property Limited Partnership dated July 13, 1998, filed with the Securities and Exchange Commission. /s/ FEGLEY & ASSOCIATES Fegley & Associates Plymouth Meeting, PA July 13, 1998 -----END PRIVACY-ENHANCED MESSAGE-----