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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): December 16, 1997
CarrAmerica Realty Corporation
(formerly Carr Realty Corporation)
(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
- ---------------------------- ---------- -----------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 624-7500
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<PAGE>
FORM 8-K
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHNAGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
Attached hereto as Exhibit 99.1 are a pro forma condensed consolidated
balance sheet (unaudited) at September 30, 1997 and pro forma condensed
consolidated statements of operations (unaudited) for the nine months ended
September 30, 1997 and the year ended December 31, 1996, relating to the
Company.
(c) Exhibits.
Exhibit
Number
------
99.1 Pro Forma Financial Information.
Pro forma condensed consolidated balance sheet (unaudited) at
September 30, 1997 and pro forma condensed consolidated
statements of operations (unaudited) for the nine months
ended September 30, 1997 and the year ended December 31,
1996, relating to the Company.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
Date: December 16, 1997
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
-------------------------
Brian K. Fields
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number
99.1 Pro Forma Financial Information.
Pro forma condensed consolidated balance sheet (unaudited) at
September 30, 1997 and pro forma condensed consolidated
statements of operations (unaudited) for the nine months
ended September 30, 1997 and the year ended December 31,
1996, relating to the Company.
Exhibit 99.1
PRO FORMA FINANCIAL INFORMATION
The unaudited Pro Forma Condensed Consolidated Balance Sheet is
presented as if the following transactions occurred on September 30, 1997: (i)
the acquisition and sale of office properties, land and OmniOffices that have
been consummated since September 30, 1997 and the acquisition and sale of other
office properties and land that the Company expects to consummate in the near
future; (ii) the Series C Preferred Stock Offering; (iii) the Series D Preferred
Stock Offering; and (iv) the repayment of amounts outstanding under the
Company's line of credit. The unaudited Pro Forma Condensed Consolidated
Statements of Operations for the nine months ended September 30, 1997 and the
year ended December 31, 1996 are presented as if the following transactions had
been consummated as of the beginning of the periods presented: (i) the
acquisition and sale of office properties, land and OmniOffices that have been
consummated since the beginning of 1996 and the acquisition and sale of other
office properties and land that the Company expects to consummate in the near
future; (ii) the sales of common stock and preferred stock during 1996 and 1997;
(iii) the sale of the Company's senior unsecured notes; (iv) the Series D
Preferred Stock Offering; and (v) the repayment of amounts outstanding under the
Company's line of credit.
In management's opinion, all material adjustments necessary to reflect
the transactions described above are presented in the pro forma adjustments
columns, which are further described in the notes to the unaudited pro forma
financial information.
The unaudited Pro Forma Condensed Consolidated Balance Sheet and the
unaudited Pro Forma Condensed Consolidated Statements of Operations should be
read in conjunction with the Consolidated Financial Statements of the Company
and Notes thereto. The unaudited Pro Forma Condensed Consolidated Balance Sheet
is not necessarily indicative of what the actual financial position of the
Company would have been at September 30, 1997 assuming the aforementioned
transactions had been consummated on such date, nor does it purport to represent
the future financial position of the Company. The unaudited Pro Forma Condensed
Consolidated Statements of Operations are not necessarily indicative of what the
actual results of operations of the Company would have been assuming the
aforementioned transactions had been consummated as of the beginning of the
respective periods, nor does it purport to represent the results of operations
for future periods.
1
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
(In Thousands)
<TABLE>
<CAPTION>
At September 30, 1997 (Unaudited)
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Pro Forma Adjustments
----------------------------------------------------
<S> <C> <C> <C> <C>
Acquired Disposed Probable
Historical (A) Properties (B) Property (C) Acquisitions (D)
-------------- -------------- ------------ ----------------
ASSETS
Rental property, net $1,926,846 $297,348 (1) $(21,785)(4) $118,921 (8)
Development property 214,761 17,363 (1) - 74,584 (8)
Restricted and unrestricted cash 37,990 - - -
Other assets 171,420 (3,350)(2) (758)(5) (2,475)(9)
---------- -------- -------- --------
Total assets $2,351,017 $311,361 $(22,543) $191,030
========== ======== ======== ========
LIABILITIES
Mortgages, unsecured notes and
credit facilities $ 903,058 $255,973 (2) $(24,591)(6) $191,030 (9)
Other liabilities 72,514 2,275 (2) (697)(5) -
---------- -------- -------- --------
Total liabilities 975,572 258,248 (25,288) 191,030
Minority interest 67,331 53,113 (3) - -
STOCKHOLDERS' EQUITY
Preferred stock 88 - - -
Common stock 582 - - -
Additional paid-in capital 1,381,214 - - -
Dividends paid in excess of earnings (73,770) - 2,745 (7) -
------- -------- -------- --------
Total stockholders' equity 1,308,114 - 2,745 -
--------- -------- -------- --------
Total liabilities and stockholders' equity $2,351,017 $311,361 $(22,543) $191,030
========== ======== ======== ========
At September 30, 1997 (Unaudited)
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Pro Forma Adjustments
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<S> <C> <C> <C> <C>
Probable Series C Preferred Series D Preferred Pro Forma
Dispositions (E) Stock Offering (F) Stock Offering (G) Consolidated
---------------- ------------------ ------------------ ------------
ASSETS
Rental property, net $(20,353)(10) $ - $ - $2,300,977
Development property - - - 306,708
Restricted and unrestricted cash - - - 37,990
Other assets (597)(11) - - 164,240
-------- --------- -------- ----------
Total assets $(20,950) $ - $ - $2,809,915
======== ========= ======== ==========
LIABILITIES
Mortgages, unsecured notes and
credit facilities $(22,911)(12) $(144,875) $(48,275) $1,109,409
Other liabilities (406)(11) - - 73,686
-------- --------- -------- ----------
Total liabilities (23,317) (144,875) (48,275) 1,183,095
Minority interest - - - 120,444
STOCKHOLDERS' EQUITY
Preferred stock - 60 20 168
Common stock - - - 582
Additional paid-in capital - 144,815 48,255 1,574,284
Dividends paid in excess of earnings 2,367 (13) - - (68,658)
-------- --------- ------- ----------
Total stockholders' equity 2,367 144,875 48,275 1,506,376
-------- --------- ------- ----------
Total liabilities and stockholders' equity $(20,950) $ - $ - $2,809,915
======== ========= ======= ==========
</TABLE>
2
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Notes to Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical condensed consolidated balance sheet as
of September 30, 1997.
(B) Reflects the following pro forma adjustments related to the acquired
properties:
(1) total acquisition costs of $314,711 ($28,712 related to 2600 W.
Olive, $14,746 related to San Mateo I, $42,262 related to
Presidential Circle, $12,286 related to Tract 17, $11,762 related to
The Grove at Black Canyon Phase I, $4,061 related to Marriott Tract
Land, $7,542 related to Reston Crossing Land, $21,086 related to
Century Park II, $81,075 related to 900-910 East Hamilton, $85,420
related to the US West Portfolio and $5,759 related to Hamilton
Land);
(2) the assumption of existing debt of $103,343 ($19,370 related to 2600
W. Olive, $23,483 related to Presidential Circle, $5,838 related to
Tract 17 and $54,652 related to the US West Portfolio), the use of
the Company's purchase deposits of $3,350, the assumption of other
liabilities totaling $2,275, and draws on the Company's line of
credit of $152,630; and
(3) the issuance of 1,738,937 units (271,326 related to 2600 W. Olive,
475,095 related to San Mateo I and 992,516 related to the US West
Portfolio) in connection with acquisitions.
(C) Reflects the following pro forma adjustments related to the disposition of
First State Bank Tower:
(4) total cost of rental property of $21,785;
(5) the transfer of net assets of $61 ($758 in other assets and $697 in
other liabilities) in connection with the sale of the property;
(6) the repayment of debt of $9,508 and the repayment of $15,083 on the
Company's line of credit with the estimated sales proceeds of
$24,591; and
(7) the recognition of a $2,745 gain on disposition of the property.
(D) Reflects the following pro forma adjustments related to the
anticipated effects of probable acquisitions:
(8) total acquisition costs of $193,505 ($30,550 related to CM
Capital-Hacienda West, $22,284 related to Valley Tech Center Land,
$17,400 related to Watkins Johnson Land, $15,200 related to Tower of
the Hills, $9,800 related to The Commons at Las Colinas Land, $6,334
related to LaJolla Spectrum Land, $4,916 related to Evergreen Land,
$2,679 related to Rocky Point Land, $5,157 related to the exercise
of options on Panorama IV and West Land, $13,575 related to Bay
Technology Center, $8,933 related to Waterford, $22,588 related to
Citymark Tower, $28,075 related to Sunnyvale Technology Center and
$6,014 related to DMB land); and
3
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Notes to Pro Forma Condensed Consolidated Balance Sheet-(Continued)
(9) the use of the Company's purchase deposits of $2,475 and draws on
the Company's line of credit of $191,030.
(E) Reflects the following pro forma adjustments related to the anticipated
effects of probable dispositions:
(10) total cost of rental properties of $20,353 ($10,867 related to
Littlefield Complex and $9,486 related to Norwood Tower);
(11) the transfer of net assets of $191 ($597 in other assets and $406 in
other liabilities) in connection with the sale of the properties;
(12) the repayment of $22,911 on the Company's line of credit with the
estimated sales proceeds; and
(13) the recognition of a $2,367 net gain on disposition of the
properties.
(F) Reflects the sale of 6,000,000 shares of Series C Cumulative Redeemable
Preferred Stock at a net price of $144,875, after deduction of transaction
costs of $400. The Company used all of the proceeds to pay down amounts
outstanding under its line of credit.
(G) Reflects the sale of 2,000,000 shares of Series D Cumulative Redeemable
Preferred Stock at a net price of $48,275, after deduction of transaction
costs of $150. The Company plans to use all of the proceeds to pay down
amounts outstanding under its line of credit.
4
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
(In Thousands, except per share data)
<TABLE>
<CAPTION>
For the Nine Months Ended September 30, 1997 (Unaudited)
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Pro Forma Adjustments
---------------------------------------------------
Acquired Disposed Probable
Historical (A) Properties (B) Property (C) Acquisitions (D)
-------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $231,832 $47,491 (1) $(2,426)(6) $9,093 (9)
Real estate service income 11,512 - - -
Executive suites revenue 5,000 29,084 (1) - -
-------- ------- ------- ------
Total revenues 248,344 76,575 (2,426) 9,093
-------- ------- ------- ------
Real estate operating expenses:
Property operating expenses 81,920 14,097 (4) (1,434)(6) 3,925 (12)
Interest expense 37,266 31,167 (2) (1,377)(7) 6,522 (10)
Executive suites operating expenses 4,124 24,573 (4) - -
General and administrative 15,777 - - -
Depreciation and amortization 54,561 12,159 (3) (630)(8) 2,291 (11)
-------- -------- ------ -------
Total operating expenses 193,648 81,996 (3,441) 12,738
-------- -------- ------ -------
Real estate operating income 54,696 (5,421) 1,015 (3,645)
Other operating income (expense), net 2,333 - - -
-------- -------- ------ -------
Income before minority interest 57,029 (5,421) 1,015 (3,645)
-------- -------- ------ -------
Minority interest (5,758) (1,436)(5) - (38)(13)
-------- -------- ------ -------
Income from continuing operations $ 51,271 $(6,857) $1,015 $(3,683)
======== ======= ====== =======
Earnings from continuing operations
per common share $ 0.87
========
For the Nine Months Ended September 30, 1997 (Unaudited)
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Pro Forma Adjustments
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Probable Prior 1997 Series D Preferred Pro Forma
Dispositions (E) Offerings (F) Stock Offering (G) Consolidated
---------------- ------------- ------------------ ------------
<S> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $(2,117)(14) $ - $ - $283,873
Real estate service income - - - 11,512
Executive suites revenue - - - 34,084
------- -------- ------- --------
Total revenues (2,117) - - 329,469
------- -------- ------- --------
Real estate operating expenses:
Property operating expenses (1,329)(14) - - 97,179
Interest expense (1,288)(15) (21,930) (2,658) 47,702
Executive suites operating expenses - - - 28,697
General and administrative - - - 15,777
Depreciation and amortization (693)(16) - - 67,688
------- -------- ------- --------
Total operating expenses (3,310) (21,930) (2,658) 257,043
------- -------- ------- --------
Real estate operating income 1,193 21,930 2,658 72,426
Other operating income (expense), net - - - 2,333
--------
Income before minority interest 1,193 21,930 2,658 74,759
------- -------- ------- --------
Minority interest - - - (7,232)
------- -------- ------- --------
Income from continuing operations $ 1,193 $ 21,930 $ 2,658 $ 67,527
======= ======== ======= ========
Earnings from continuing operations
per common share $ 0.70(H)
========
</TABLE>
5
<PAGE>
CarrAmerica Realty Corporations and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations-(Continued)
(In Thousands, except per share data)
<TABLE>
<CAPTION>
For the Year Ended December 31, 1996 (Unaudited)
---------------------------------------------------------------------
Pro Forma Adjustments
---------------------------------------------------
Acquired Disposed Probable
Historical (A) Properties (B) Property (C) Acquisitions (D)
-------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $154,165 $176,860 (1) $(1,223)(6) $11,310 (9)
Real estate service income 12,512 - - -
Executive suites revenue - 42,019 (1) - -
-------- -------- ------- -------
Total revenues 166,677 218,879 (1,223) 11,310
-------- -------- ------- -------
Real estate operating expenses:
Property operating expenses 51,927 55,342 (4) (726)(6) 5,219 (12)
Interest expense 31,630 81,180 (2) (1,426)(7) 8,886 (10)
Executive suites operating expenses - 36,718 (4) - -
General and administrative 15,228 2,300 (4) - -
Depreciation and amortization 38,264 42,089 (3) (296)(8) 3,055 (11)
-------- -------- ------- -------
Total operating expenses 137,049 217,629 (2,448) 17,160
-------- -------- ------- -------
Real estate operating income 29,628 1,250 1,225 (5,850)
Other operating income (expense), net (94) 8 (1) - -
-------- -------- ------- -------
Income before minority interest 29,534 1,258 1,225 (5,850)
-------- -------- ------- -------
Minority interest (4,732) (2,198)(5) - 11 (13)
-------- -------- ------- -------
Income from continuing operations $ 24,802 $ (940) $ 1,225 $(5,839)
======== ======== ======= =======
Earnings from continuing operations
per common share $0.90
=====
For the Year Ended December 31, 1996 (Unaudited)
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Pro Forma Adjustments
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Probable Prior 1997 Series D Preferred Pro Forma
Dispositions (E) Offerings (F) Stock Offering (G) Consolidated
---------------- ------------- ------------------ ------------
<S> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $(2,896)(14) $ - $ - $338,216
Real estate service income - - - 12,512
Executive suites revenue - - - 42,019
------- -------- ------- ---------
Total revenues (2,896) - - 392,747
------- -------- ------- ---------
Real estate operating expenses:
Property operating expenses (1,671)(14) - - 110,091
Interest expense (1,718)(15) (51,179) (3,621) 63,752
Executive suites operating expenses - - - 36,718
General and administrative - - - 17,528
Depreciation and amortization (751)(16) - - 82,361
------- -------- ------- ---------
Total operating expenses (4,140) (51,179) (3,621) 310,450
------- -------- ------- ---------
Real estate operating income 1,244 51,179 3,621 82,297
Other operating income (expense), net (1)(14) - - (87)
------- -------- ------- ---------
Income before minority interest 1,243 51,179 3,621 82,210
------- -------- ------- ---------
Minority interest - - - (6,919)
------- -------- ------- ---------
Income from continuing operations $1,243 $ 51,179 $ 3,621 $ 75,291
======= ======== ======= ========
Earnings from continuing operations
per common share $ 0.69 (H)
========
</TABLE>
6
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Notes to Pro Forma Condensed Consolidated Statements of Operations
For the Nine Months Ended September 30, 1997
and the Year Ended December 31, 1996
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical condensed consolidated statements of
operations for the nine months ended September 30, 1997 and the year ended
December 31, 1996.
(B) Pro forma adjustments for the purchases of the acquired properties
reflect:
(1) the historical operating activity of the properties and OmniOffices;
(2) the additional interest expense on debt of $300,000 at weighted
average interest rates ranging from 7.3% to 7.5%, incurred for the
acquisitions ($26,264 of interest costs net of $3,545 capitalized
for development property for the nine months ended September 30,
1997 and $69,056 of interest costs net of $10,091 capitalized for
development property for 1996) and interest expense on assumed debt
of $584,000, at interest rates ranging from 5.0% to 9.6% ($8,448 for
the nine months ended September 30, 1997 and $22,215 for 1996);
(3) the depreciation expense based on the new accounting basis of the
rental properties based on a 30 year useful life and the assets of
OmniOffices based on useful lives ranging from 5 to 30 years;
(4) the historical operating activity of the properties and OmniOffices
reduced by the elimination of management fee expenses that are no
longer incurred by the Company upon purchase of the properties and
increased by $2,300 in 1996 for incremental general and
administrative costs associated with the Company's asset growth; and
(5) the minority interest share of earnings.
(C) Pro forma adjustments for the disposition of First State Bank Tower
reflect:
(6) the elimination of the historical operating activity of the property
sold;
(7) the reduction of interest expense from the repayment of $24,591 in
debt, at a weighted average interest rate of 8.1%, using the sales
proceeds; and
(8) the elimination of the historical depreciation expense of the
property sold.
(D) Reflects the following pro forma adjustments related to the anticipated
effects of the probable property acquisitions:
(9) the historical operating activity of the properties;
(10) the additional interest expense on debt of $200,000, at weighted
average interest rates ranging from 7.3% to 7.5%, incurred for the
acquisitions ($10,516 of interest costs net of $3,994 capitalized
for development property for the nine months ended September 30,
1997 and $14,327 of interest costs net of $5,441 capitalized for
development property for 1996);
(11) the depreciation expense based on the new accounting basis for the
rental properties based on a 30 year useful life;
7
<PAGE>
CarrAmerica Realty Corporation and Subsidiaries
Notes to Pro Forma Condensed Consolidated Statements of Operations-(Continued)
For the Nine Months Ended September 30, 1997
and the Year Ended December 31, 1996
(Unaudited)
(12) the historical operating activity of the properties acquired reduced
by the elimination of management fee expenses that are no longer
incurred by the Company upon purchase of the properties; and
(13) the minority interest share of earnings.
(E) Pro forma adjustment for the probable dispositions reflect:
(14) the elimination of the historical operating activity of the
properties to be sold;
(15) the reduction of interest expense from the repayment of $22,911 in
debt at weighted average interest rates ranging from of 7.3% to
7.5%, using the sales proceeds; and
(16) the elimination of the historical depreciation expense of the
properties to be sold.
(F) Pro forma adjustment reflects the reduction in interest expense associated
with the pay down of amounts outstanding under the Company's line of
credit with the proceeds from sales of common stock in January and April
of 1997, and the sale of preferred stock in August and November of 1997
and the change in interest expense associated with the paydown of amounts
outstanding under the line of credit with the proceeds from the issuance
of $275 million of senior unsecured notes.
(G) Pro forma adjustment reflects the reduction in interest expense associated
with the pay down of amounts outstanding under the Company's line of
credit with the proceeds from the Series D Cumulative Redeemable Preferred
Stock offering.
(H) Based upon 58,000,642 and 57,827,465 pro forma shares of common stock
outstanding and common stock equivalents on a weighted average basis
during the nine months ended September 30, 1997 and during 1996,
respectively.
8
