EX-99 2 w44753exv99.htm THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS exv99
 

Exhibit 99
PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
On October 4, 2007, Liberty Property Trust, a Maryland real estate investment trust (“Liberty”), together with its operating partnership, Liberty Property Limited Partnership (“Liberty LP”) and other related entities, completed mergers with Republic Property Trust, a Maryland real estate investment trust (“Republic”) and Republic’s operating partnership, Republic Property Limited Partnership, (“Republic LP”), contemplated by the Agreement and Plan of Merger, dated as of July 23, 2007 (the “Merger Agreement”), by and among Liberty, Liberty LP, Liberty Acquisition LLC, a wholly owned subsidiary of Liberty (“Liberty Acquisition”), Republic and Republic LP.
In order to partially finance the Mergers, Liberty, on October 4, 2007, entered into a joint venture (the “Joint Venture”) with New York State Common Retirement Fund (“NY Common”), through the formation of a joint venture limited partnership (“Liberty Washington”) that on October 4, 2007 acquired the real estate property assets of Republic. Liberty owns 25% of Liberty Washington and NY Common owns 75%. NY Common contributed approximately $415 million to Liberty Washington and Liberty Washington holds all of the real property assets of Republic.

 

 

The pro forma condensed consolidated financial statements do not purport to represent what our financial position or results of operations would have been assuming the completion of this acquisition had occurred on January 1, 2007 and for the period indicated, nor do they purport to project our financial position or results of operations at any future date or for any future period. These pro forma condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2006 and our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007.

 

 

Liberty Property Trust
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2007
(Unaudited and in thousands)
                                                                                      
       Liberty Property Trust           Republic Property Trust        Pro Forma                    Liberty Washington LP               Liberty Property Trust     
    Historical (A)     Historical (B)           Adjustments                       Subtotal             Sale         Pro Forma  
Assets
                                                        
Real Estate:
                                                        
Land and land improvements
       $ 751,765       $ 137,600       $ 1,014    (C )     $ 890,379       $ (138,614 )  (J )     $ 751,765  
Building and improvements
     4,114,484       479,549       203,656    (C )     4,797,689       (683,205 )  (J )     4,114,484  
Less: Accumulated depreciation
     (834,385 )     (48,739 )     48,739    (D )      (834,385 )     -           (834,385 )
                                 
Operating real estate
     4,031,864       568,410       253,409           4,853,683       (821,819 )         4,031,864  
 
                                                        
Development in progress
     572,606       47,124       24,144    (C )     643,874       (71,268 )  (J )     572,606  
Land held for development
     246,870       -       8,105    (C )     254,975       (8,105 )  (J )     246,870  
                                 
 
                                                        
Net real estate
     4,851,340       615,534       285,658           5,752,532       (901,192 )         4,851,340  
 
                                                        
Cash and cash equivalents
     36,031       3,794       -           39,825       (277 )  (K )     39,548  
Investment in and advances to unconsolidated joint ventures
     77,666       -       -           77,666       197,855    (L )     275,521  
Other assets
     420,072       37,607       22,106    (E )     479,785       (49,056 )  (K )     430,729  
                                 
 
                                                        
Total assets
     $ 5,385,109       $ 656,935       $ 307,764           $ 6,349,808       $ (752,670 )         $ 5,597,138  
                                 
 
                                                        
Liabilities
                                                        
 
                                                        
Mortgage loans
     $ 231,986       $ 379,488       $ (100,026 )  (F )     $ 511,448       $ (279,462 )  (M )     $ 231,986  
Unsecured notes
     2,155,000       -       -           2,155,000       -           2,155,000  
Credit facility
     372,960       55,000       551,894    (G )     979,854       (415,064 )  (N )     564,790  
Other liabilities
     408,092       33,999       44,706    (H )     486,797       (38,144 )  (O )     448,653  
                                 
 
                                                        
Total liabilities
     3,168,038       468,487       496,574           4,133,099       (732,670 )         3,400,429  
 
                                                        
Minority interest
     373,145       22,136       (22,136 )  (I )     373,145       -           373,145  
 
                                                        
Shareholders equity
                                                        
Additional paid in capital
     1,966,419       219,926       (220,288 )  (I )     1,966,057                   1,966,057  
Other shareholders equity
     (122,493 )     (53,614 )     53,614    (I )     (122,493 )     (20,000 )  (P )     (142,493 )
                                 
Total shareholders equity
     1,843,926       166,312       (166,674 )         1,843,564       (20,000 )         1,823,564  
 
                                                        
Liabilities and shareholders’ equity
     $ 5,385,109       $ 656,935       $ 307,764           $ 6,349,808       $ (752,670 )         $ 5,597,138  
                                 
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Trust
Pro Forma Condensed Consolidated Income Statement
For the Nine Month Period Ended September 30, 2007
(Unaudited and in thousands except per share amounts)
                                                                                    
       Liberty Property Trust           Republic Property Trust        Pro Forma                        Liberty Washington LP               Liberty Property Trust     
    Historical(A)     Historical(B)        Adjustments                   Subtotal        Sale         Pro Forma  
Operating Revenue
                                                            
Rental
     $ 357,605       $ 51,368       $ 404        (Q ) (R)     $ 409,377       $ (51,772 )  (W )     $ 357,605  
Operating expense reimbursement
     155,386       —       4,496        (R )     159,882       (4,496 )  (W )     155,386  
                                     
Total operating revenue
     512,991       51,368       4,900               569,259       (56,268 )         512,991  
 
                                                            
Operating Expenses
                                                            
Rental property
     108,294       10,130       —               118,424       (10,130 )  (W )     108,294  
Real estate taxes
     54,459       5,740       —               60,199       (5,740 )  (W )     54,459  
General and administrative
     38,872       11,833       —               50,705       —           50,705  
Depreciation and amortization
     114,566       18,373       5,864        (S )     138,803       (24,237 )  (W )     114,566  
                                     
Total operating expenses
     316,191       46,076       5,864               368,131       (40,107 )         328,024  
 
                                                            
Operating Income
     196,800       5,292       (964 )             201,128       (16,161 )         184,967  
 
                                                            
Other Income/Expense
                                                            
Interest and other
     8,125       448       (322 )      (T )     8,251       1,575    (T )     9,826  
Interest
     (89,882 )     (17,872 )     (21,397 )      (U )     (129,151 )     30,493    (X )     (98,658 )
                                     
Total other income/expense
     (81,757 )     (17,424 )     (21,719 )             (120,900 )     32,068           (88,832 )
                                     
 
                                                            
Income (loss) before property dispositions, income taxes, minority interest
and equity in earnings of unconsolidated joint ventures
     115,043       (12,132 )     (22,683 )             80,228       15,907           96,135  
 
                                                            
Gain (loss) on property dispositions, income taxes , minority interest, and
equity in (loss) earnings of unconsolidated joint ventures		     (14,069 )     1,435       90        (V )     (12,544 )     (2,125 )  (Y )     (14,669 )
                                     
 
                                                            
Income (loss) from continuing operations
     100,974       (10,697 )     (22,593 )             67,684       13,782           81,466  
 
                                                            
Discontinued operations
     28,325       —       —               28,325       —           28,325  
                                     
Net Income (Loss)
     $ 129,299       $ (10,697 )     $ (22,593 )             $ 96,009       $ 13,782           $ 109,791  
                                     
 
Basic income per common share
                                                            
Continuing operations
     $ 1.11                                                   $ 0.89  
Discontinued operations
     0.31                                                   0.31  
                                                     
Total basic income per common share
     $ 1.42                                                   $ 1.20  
                                                     
Diluted income per common share
                                                            
Continuing operations
     $ 1.10                                                   $ 0.88  
Discontinued operations
     0.31                                                   0.31  
                                                     
Total diluted income per common share
     $ 1.41                                                   $ 1.19  
                                                     
 
                                                            
Weighted Average number of common shares outstanding
                                                            
Basic
     91,179                                                   91,179  
Diluted
     91,905                                                   91,905  
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Trust
Pro Forma Condensed Consolidated Income Statement
For the Year Ended December 31, 2006
(Unaudited and in thousands except per share amounts)
                                                                                     
       Liberty Property Trust           Republic Property Trust        Pro Forma                        Liberty Washington LP                   Liberty Property Trust     
    Historical(A)     Historical(B)        Adjustments                   Subtotal        Sale             Pro Forma  
Operating Revenue
                                                                
Rental
     $ 464,714       $ 58,548       $ 402       (Q ) (R)     $ 523,664       $ (58,950 )     (W )     $ 464,714  
Operating expense reimbursement
     202,005       -       5,653       (R )     207,658       (5,653 )     (W )     202,005  
                                         
Total operating revenue
     666,719       58,548       6,055               731,322       (64,603 )             666,719  
 
                                                                
Operating Expenses
                                                                
Rental property
     139,055       11,349       -               150,404       (11,349 )     (W )     139,055  
Real estate taxes
     71,652       5,592       -               77,244       (5,592 )     (W )     71,652  
General and administrative
     45,991       9,794       -               55,785       -               55,785  
Depreciation and amortization
     144,692       21,322       9,771       (S )     175,785       (31,093 )     (W )     144,692  
                                         
Total operating expenses
     401,390       48,057       9,771               459,218       (48,034 )             411,184  
 
                                                                
Operating Income
     265,329       10,491       (3,716 )             272,104       (16,569 )             255,535  
 
                                                                
Other Income/Expense
                                                                
Interest and other
     9,591       1,260       (1,507 )     (T )     9,344       2,100       (T )     11,444  
Interest
     (119,584 )     (17,267 )     (28,626 )     (U )     (165,477 )     34,191       (X )     (131,286 )
                                         
Total other income/expense
     (109,993 )     (16,007 )     (30,133 )             (156,133 )     36,291               (119,842 )
                                         
 
                                                                
Income before property dispositions, income taxes, minority interest
and equity in earnings of unconsolidated joint ventures
     155,336       (5,516 )     (33,849 )             115,971       19,722               135,693  
 
                                                                
Gain (loss) on property dispositions, income taxes , minority interest, and
equity in (loss) earnings of unconsolidated joint ventures		     (1,639 )     664       1,060       (V )     85       (1,740 )     (Y )     (1,655 )
                                         
 
                                                                
Income (loss) from continuing operations
     153,697       (4,852 )     (32,789 )             116,056       17,982               134,038  
 
Discontinued operations
     112,877       -       -               112,877       -               112,877  
                                         
Net Income (Loss)
     $ 266,574       $ (4,852 )     $ (32,789 )             $ 228,933       $ 17,982               $ 246,915  
                                         
 
Basic income per common share
                                                                
Continuing operations
     $ 1.72                                                       $ 1.51  
                                                         
Discontinued operations
     1.26                                                       1.26  
                                                         
Total basic income per common share
     $ 2.98                                                       $ 2.77  
                                                         
 
Diluted income per common share
                                                                
Continuing operations
     $ 1.70                                                       $ 1.48  
Discontinued operations
     1.25                                                       1.25  
                                                         
Total diluted income per common share
     $ 2.95                                                       $ 2.73  
                                                         
 
                                                                
Weighted Average number of common shares outstanding
                                                                
Basic
     89,313                                                       89,313  
Diluted
     90,492                                                       90,492  
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Trust
Notes to Pro Forma Condensed Consolidated Financial Statements
September 30, 2007
(Unaudited and in thousands)
                     
A   Reflects the unaudited condensed consolidated balance sheet and income statement of Liberty Property Trust (LRY) as of and for the nine month period ended September 30, 2007 as reported in the Company’s Quarterly Report on Form 10-Q and LRY’s condensed consolidated income statement for the year ended December 31, 2006 as reported in the Company’s Annual Report on Form 10-K.
   
 
                
B   Reflects the unaudited condensed consolidated balance sheet and income statement of Republic Property Trust (RPB) as of and for the nine month period ended September 30, 2007 and RPB’s condensed consolidated income statement for the year ended December 31, 2006 as reported in RPB’s Annual Report on Form 10-K.
   
 
                
C   Represents the adjustments required to RPB’s historical cost basis in order to reflect LRY’s purchase price allocation.
   
 
                
D   Adjustment to eliminate RPB’s historical accumulated depreciation.
   
 
                
E   Adjustment comprises the following:                
    Elimination of RPB deferred rent receivable     $ (5,062 )        
    Elimination of RPB deferred leasing costs     (19,042 )        
    Elimination of RPB capitalized debt issue costs     (2,334 )        
    Capitalized mortgage assumption costs     2,992          
    Record value of “in-place” leasing     46,064          
    Other     (512 )        
                 
   
 
     $ 22,106          
                 
   
 
                
F   Adjustment comprises the following:                
    Repayment of RPB mortgage debt     $ (93,993 )        
    Elimination of historical Republic fair value adjustment on mortgage notes payable 2,373          
    Estimated LRY mortgage payable fair value adjustment     (8,406 )        
                 
   
 
     $ (100,026 )        
                 
   
 
                
G   Adjustment comprises the following:                
    Borrowings under the credit facility to fund merger consideration and related
costs of the transaction 		  $ 606,894          
    Repay RPB’s credit facility     (55,000 )        
                 
   
 
     $ 551,894          
                 
   
 
                
H   Adjustment comprises the following:                
    Elimination of RPB’s acquired in-place leasing liability     $ (19,186 )        
    Record LRY’s acquired in-place leasing liability     37,079          
    Accrue costs of transaction     31,706          
    Other     (4,893 )        
                 
   
 
     $ 44,706          
                 
   
 
                
I   Eliminate RPB historical equity and direct expenses associated with the transaction.
   
 
                
J   Record sale of RPB real estate assets to JV.
   
 
                
K   LRY retained certain other assets and liabilities acquired from RPB.
    Additionally, reflects loan costs associated with the remaining RPB mortgage debt ($2,992)
   
 
                
L   Reflects LRY 25% ownership interest in the JV and a loan of $59,500 to the JV.
   
 
                
M   Reflects the JV assumption of RPB mortgage debt securing real estate assets sold to JV.
   
 
                
N   Represents proceeds from the sale of the RPB portfolio to the JV.
   
 
                
O   Adjustment comprises the following:
         LRY’s acquired in-place leasing liability transferred to the JV   $ (37,079 )        
   
JV liability to finish rehabilitation property
     (1,065 )        
                 
   
 
     $ (38,144 )        
                 
   
 
                
P   Impairment recorded in conjunction with the sale.
   
 
                
Q   Reflects adjustment to record rental income for in-place leases on a straight-line basis beginning January 1
and amortization of the above and below market lease values.
   
 
                
R   Reflects reclass of RPB operating expense reimbursement from rental income to conform to LRY presentation.
   
 
                
S   Adjust depreciation and amortization based on LRY’s purchase price allocation.
   
 
                
T   Remove historical property management fees recognized on contracts that have been terminated.
Reflect management fees that would have been earned from the JV.
   
 
                
U   Reflects interest expense on borrowings under the credit facility associated with the purchase as well
as market rate adjustments.
   
 
                
V   Adjustment comprises the following:
   
 
     9/30/2007       12/31/2006  
             
   
Remove historical RPB minority interest
   $ (1,435 )   $ (664 )
   
Record LRY minority interest
     1,525       1,724  
             
   
 
     $ 90       $ 1,060  
             
   
 
                
W   Reflects the sale of assets to the JV.
   
 
                
X   Reflects interest expense on mortgage debt assumed by the JV.
   
 
                
Y   Reflects 25% ownership interest in the operations of the JV and adjusts LRY minority interest.

 

 

Liberty Property Limited Partnership
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2007
(Unaudited and in thousands)
                                                                                      
       Liberty Property Limited           Republic Property Trust        Pro Forma                    Liberty Washington LP               Liberty Property Limited     
    Partnership Historical (A)     Historical (B)        Adjustments                  Subtotal           Sale         Partnership Pro Forma  
Assets
                                                        
Real Estate:
                                                        
Land and land improvements
     $ 751,765       $ 137,600       $ 1,014     (C)     $ 890,379       $ (138,614 )   (J)     $ 751,765  
Building and improvements
     4,114,484       479,549       203,656     (C)     4,797,689       (683,205 )   (J)     4,114,484  
Less: Accumulated depreciation
     (834,385 )     (48,739 )     48,739     (D)     (834,385 )     -           (834,385 )
                                 
Operating real estate
     4,031,864       568,410       253,409           4,853,683       (821,819 )         4,031,864  
 
                                                        
Development in progress
     572,606       47,124       24,144     (C)     643,874       (71,268 )   (J)     572,606  
Land held for development
     246,870       -       8,105     (C)     254,975       (8,105 )   (J)     246,870  
                                 
 
                                                        
Net real estate
     4,851,340       615,534       285,658           5,752,532       (901,192 )         4,851,340  
 
                                                        
Cash and cash equivalents
     36,031       3,794       -           39,825       (277 )   (K)     39,548  
Investment in and advances to unconsolidated joint ventures
     77,666       -       -           77,666       197,855     (L)     275,521  
Other assets
     420,072       37,607       22,106     (E)     479,785       (49,056 )   (K)     430,729  
                                 
 
                                                        
Total assets
     $ 5,385,109       $ 656,935       $ 307,764           $ 6,349,808       $ (752,670 )         $ 5,597,138  
                                 
 
                                                        
Liabilities
                                                        
 
                                                        
Mortgage loans
     $ 231,986       $ 379,488       (100,026 )   (F)     $ 511,448       (279,462 )   (M)     $ 231,986  
Unsecured notes
     2,155,000               -           2,155,000       -           2,155,000  
Credit facility
     372,960       55,000       551,894     (G)     979,854       (415,064 )   (N)     564,790  
Other liabilities
     408,092       33,999       44,706     (H)     486,797       (38,144 )   (O)     448,653  
                                 
 
                                                        
Total liabilities
     3,168,038       468,487       496,574           4,133,099       (732,670 )         3,400,429  
 
                                                        
Minority interest
     464       22,136       (22,136 )   (I)     464       -           464  
 
                                                        
Owners equity
                                                        
Owners equity
     2,216,607       166,312       (166,674 )   (I)     2,216,245       (20,000 )   (P)     2,196,245  
                                 
 
Total owners equity
     2,216,607       166,312       (166,674 )         2,216,245       (20,000 )         2,196,245  
 
                                                        
Liabilities and shareholders’ equity
     $ 5,385,109       $ 656,935       $ 307,764           $ 6,349,808       $ (752,670 )         $ 5,597,138  
                                 
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Limited Partnership
Pro Forma Condensed Consolidated Income Statement
For the Nine Month Period Ended September 30, 2007
(Unaudited and in thousands except per share amounts)
                                                                                      
       Liberty Property Limited           Republic Property Trust        Pro Forma                    Liberty Washington LP               Liberty Property Limited     
    Partnership Historical(A)     Historical(B)        Adjustments               Subtotal        Sale         Partnership Pro Forma  
Operating Revenue
                                                        
Rental
     $ 357,605       $ 51,368       $ 404     (Q)(R)     $ 409,377       $ (51,772 )   (W)     $ 357,605  
Operating expense reimbursement
     155,386       -       4,496     (R)     159,882       (4,496 )   (W)     155,386  
                                 
Total operating revenue
     512,991       51,368       4,900           569,259       (56,268 )         512,991  
 
                                                        
Operating Expenses
                                                        
Rental property
     108,294       10,130       -           118,424       (10,130 )   (W)     108,294  
Real estate taxes
     54,459       5,740       -           60,199       (5,740 )   (W)     54,459  
General and administrative
     38,872       11,833       -           50,705       -           50,705  
Depreciation and amortization
     114,566       18,373       5,864     (S)     138,803       (24,237 )   (W)     114,566  
                                 
Total operating expenses
     316,191       46,076       5,864           368,131       (40,107 )         328,024  
 
                                                        
Operating Income
     196,800       5,292       (964 )         201,128       (16,161 )         184,967  
 
                                                        
Other Income/Expense
                                                        
Interest and other
     8,125       448       (322 )   (T)     8,251       1,575     (T)     9,826  
Interest
     (89,882 )     (17,872 )     (21,397 )   (U)     (129,151 )     30,493     (X)     (98,658 )
                                 
Total other income/expense
     (81,757 )     (17,424 )     (21,719 )         (120,900 )     32,068           (88,832 )
                                 
 
                                                        
Income (loss) before property dispositions, income taxes, minority interest
and equity in earnings of unconsolidated joint ventures
     115,043       (12,132 )     (22,683 )         80,228       15,907           96,135  
 
                                                        
Gain (loss) on property dispositions, income taxes , minority interest, and
equity in (loss) earnings of unconsolidated joint ventures
     3,130       1,435       (1,435 )   (V)     3,130       (1,030 )   (Y)     2,100  
                                 
 
                                                        
Income (loss) from continuing operations
     118,173       (10,697 )     (24,118 )         83,358       14,877           98,235  
 
                                                        
Discontinued operations net of minority interest
     29,623       -       -           29,623       -           29,623  
                                 
Net Income (Loss)
     147,796       (10,697 )     (24,118 )         112,981       14,877           127,858  
Preferred unit distributions
     (11,874 )     -       -           (11,874 )     -           (11,874 )
Excess of preferred unit redemption over carrying amount
     (696 )     -       -           (696 )     -           (696 )
                                 
Income available to common unitholders
     $ 135,226       $ (10,697 )     $ (24,118 )         $ 100,411       $ 14,877           $ 115,288  
                                 
 
                                                        
Basic income per common unit
                                                        
Continuing operations
     $ 1.11                                               $ 0.89  
Discontinued operations
     0.31                                               0.31  
                                                 
Total basic income per common unit
     $ 1.42                                               $ 1.20  
                                                 
 
                                                        
Diluted income per common unit
                                                        
Continuing operations
     $ 1.10                                               $ 0.88  
Discontinued operations
     0.31                                               0.31  
                                                 
Total diluted income per common unit
     $ 1.41                                               $ 1.19  
                                                 
 
                                                        
Weighted Average number of common units outstanding
                                                        
Basic
     95,369                                               95,369  
Diluted
     96,095                                               96,095  
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Limited Partnership
Pro Forma Condensed Consolidated Income Statement
For the Year Ended December 31, 2006
(Unaudited and in thousands except per share amounts)
                                                                                      
       Liberty Property Limited           Republic Property Trust        Pro Forma                    Liberty Washington LP               Liberty Property Limited     
    Partnership Historical(A)     Historical(B)        Adjustments               Subtotal        Sale         Partnership Pro Forma  
Operating Revenue
                                                        
Rental
     $ 464,714       $ 58,548       $ 402     (Q)(R)     $ 523,664       $ (58,950 )   (W)     $ 464,714  
Operating expense reimbursement
     202,005       -       5,653     (R)     207,658       (5,653 )   (W)     202,005  
                                 
Total operating revenue
     666,719       58,548       6,055           731,322       (64,603 )         666,719  
 
                                                        
Operating Expenses
                                                        
Rental property
     139,055       11,349       -           150,404       (11,349 )   (W)     139,055  
Real estate taxes
     71,652       5,592       -           77,244       (5,592 )   (W)     71,652  
General and administrative
     45,991       9,794       -           55,785       -           55,785  
Depreciation and amortization
     144,692       21,322       9,771     (S)     175,785       (31,093 )   (W)     144,692  
                                 
Total operating expenses
     401,390       48,057       9,771           459,218       (48,034 )         411,184  
Operating Income
     265,329       10,491       (3,716 )         272,104       (16,569 )         255,535  
 
                                                        
Other Income/Expense
                                                        
Interest and other
     9,591       1,260       (1,507 )   (T)     9,344       2,100           11,444  
Interest
     (119,584 )     (17,267 )     (28,626 )   (U)     (165,477 )     34,191     (X)     (131,286 )
                                 
Total other income/expense
     (109,993 )     (16,007 )     (30,133 )         (156,133 )     36,291           (119,842 )
                                 
 
                                                        
Income before property dispositions, income taxes, minority interest
and equity in earnings of unconsolidated joint ventures
     155,336       (5,516 )     (33,849 )         115,971       19,722           135,693  
 
                                                        
Gain (loss) on property dispositions, income taxes , minority interest, and
equity in (loss) earnings of unconsolidated joint ventures
     18,779       664       (664 )   (V)     18,779       (1,001 )   (Y)     17,778  
                                 
 
                                                        
Income (loss) from continuing operations
     174,115       (4,852 )     (34,513 )         134,750       18,721           153,471  
 
                                                        
Discontinued operations net of minority interest
     117,935       -       -           117,935                   117,935  
                                 
Net Income (Loss)
     292,050       (4,852 )     (34,513 )         252,685       18,721           271,406  
Preferred unit distributions
     (13,691 )     -       -           (13,691 )     -           (13,691 )
                                 
 
                                                        
Income available to common unitholders
     $ 278,359       $ (4,852 )     $ (34,513 )         $ 238,994       $ 18,721           $ 257,715  
                                 
 
                                                        
Basic income per common unit
                                                        
Continuing operations
     $ 1.72                                               $ 1.51  
Discontinued operations
     1.26                                               1.26  
                                                 
Total basic income per common unit
     $ 2.98                                               $ 2.77  
                                                 
 
                                                        
Diluted income per common unit
                                                        
Continuing operations
     $ 1.70                                               $ 1.48  
Discontinued operations
     1.25                                               1.25  
                                                 
Total diluted income per common unit
     $ 2.95                                               $ 2.73  
                                                 
 
                                                        
Weighted Average number of common units outstanding
                                                        
Basic
     93,208                                               93,208  
Diluted
     94,387                                               94,387  
The accompanying notes are an integral part of these pro forma financial statements.

 

 

Liberty Property Limited Partnership
Notes to Pro Forma Condensed Consolidated Financial Statements
September 30, 2007
(Unaudited and in thousands)
                         
A   Reflects the unaudited condensed consolidated balance sheet and income statement of Liberty Property Limited Partnership (LRY) as of and for the nine month period ended September 30, 2007 as reported in the Company’s Quarterly Report on Form 10-Q and LRY’s condensed consolidated income statement for the year ended December 31, 2006 as reported in the Company’s Annual Report on Form 10-K.
 
                        
B   Reflects the unaudited condensed consolidated balance sheet and income statement of Republic Property Trust (RPB) as of and for the nine month period ended September 30, 2007 and RPB’s condensed consolidated income statement for the year ended December 31, 2006 as reported in RPB’s Annual Report on Form 10-K.
 
                        
C   Represents the adjustments required to RPB’s historical cost basis in order to reflect LRY’s purchase price allocation.
 
                        
D   Adjustment to eliminate RPB’s historical accumulated depreciation.
 
                        
E   Adjustment comprises the following:
    Elimination of RPB deferred rent receivable     $ (5,062 )        
    Elimination of RPB deferred leasing costs     (19,042 )        
    Elimination of RPB capitalized debt issue costs     (2,334 )        
    Capitalized mortgage assumption costs     2,992          
    Record value of “in-place” leasing     46,064          
    Other     (512 )        
                     
 
             $ 22,106          
                     
 
                        
F   Adjustment comprises the following:                
    Repayment of RPB mortgage debt     $ (93,993 )        
    Elimination of historical Republic fair value adjustment on mortgage notes payable     2,373          
    Estimated LRY mortgage payable fair value adjustment     (8,406 )        
                     
 
             $ (100,026 )        
                     
 
                        
G   Adjustment comprises the following:                
    Borrowings under the credit facility to fund merger consideration and related costs of the transaction     $ 606,894          
    Repay RPB’s credit facility     (55,000 )        
                     
 
             $ 551,894          
                     
 
                        
H   Adjustment comprises the following:                
    Elimination of RPB’s acquired in-place leasing liability     $ (19,186 )        
    Record LRY’s acquired in-place leasing liability     37,079          
    Accrue costs of transaction     31,706          
    Other     (4,049 )        
                     
 
             $ 45,550          
                     
 
                        
I   Eliminate RPB historical equity and direct expenses associated with the transaction.
 
                        
J   Record sale of RPB real estate assets to JV.
 
                        
K   LRY retained certain other assets and liabilities acquired from RPB.
    Additionally, reflects loan costs associated with the remaining RPB mortgage debt ($2,992)
 
                        
L   Reflects LRY 25% ownership interest in the JV and a loan of $59,500 to the JV.
 
                        
M   Reflects the JV assumption of RPB mortgage debt securing real estate assets sold to JV.
 
                        
N   Represents proceeds from the sale of the RPB portfolio to the JV.
 
                        
O   Adjustment comprises the following:
 
     LRY’s acquired in-place leasing liability transferred to the JV     $ (37,079 )        
 
     JV liability to finish rehabilitation property     (1,065 )        
                     
 
             $ (38,144 )        
                     
 
                        
P   Impairment recorded in conjunction with the sale.
 
                        
Q   Reflects adjustment to record rental income for in-place leases on a straight-line basis beginning January 1
and amortization of the above and below market lease values.
 
                        
R   Reflects reclass of RPB operating expense reimbursement from rental income to conform to LRY presentation.
 
                        
S   Adjust depreciation and amortization based on LRY’s purchase price allocation.
 
                        
T   Remove historical property management fees recognized on contracts that have been terminated.
Reflect management fees that would have been earned from the JV.
 
                        
U   Reflects interest expense on borrowings under the credit facility associated with the purchase as well
as market rate adjustments.
 
                        
V   Remove historical RPB minority interest:
 
                        
W   Reflects the sale of assets to the JV.                
 
                        
X   Reflects interest expense on mortgage debt assumed by the JV.                
 
                        
Y   Reflects 25% ownership interest in the operations of the JV.