===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): August 5, 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
===============================================================================
<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. Changes 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 March 31, 1997 and pro forma condensed consolidated
statements of operations (unaudited) for the three months ended March 31, 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 March 31, 1997 and pro forma condensed
consolidated statements of operations (unaudited) for the
three months ended March 31, 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: August 5, 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
March 31, 1997 and pro forma condensed consolidated statements of operations
(unaudited) for the three months ended March 31, 1997 and the year ended
December 31, 1996, relating to the Company.
PRO FORMA FINANCIAL INFORMATION
The following tables set forth unaudited pro forma financial information
for the Company as of March 31, 1997 and for the three months ended March 31,
1997 and the year ended December 31, 1996 after giving effect to: (i) the
acquisition of office properties and land that have been consummated since the
beginning of the periods presented and the acquisition of other office
properties and land that the Company expects to consummate in the near future;
(ii) the Company's sales of common and preferred stock during 1996, the sale of
common stock in January 1997 (the "January Common Stock Offering"), and the sale
of common stock in April 1997 (the "April Common Stock Offering"); (iii) the
Company's sale of senior unsecured notes (the "June Debt Offering"); (iv) the
anticipated sale of Series B Cumulative Redeemable Preferred Shares (the "August
Preferred Stock offering"); and (v) the repayment of amounts outstanding under
the Company's line of credit.
The unaudited Pro Forma Condensed Consolidated Balance Sheet is presented
as if the following transactions occurred on March 31, 1997: (i) the acquisition
of office properties and land that have been consummated since March 31, 1997,
and the acquisition of other office properties and land that the Company expects
to consummate in the near future; (ii) the sale of common stock in the April
Common Stock Offering; (iii) the June Debt Offering; (iv) the August Preferred
Stock Offering; and (v) the repayment of amounts outstanding under the Company's
line of credit. The unaudited Pro Forma Condensed Consolidated Statements of
Operations for the three months ended March 31, 1997 and the year ended December
31, 1996 are presented as if the following transactions had been consummated as
of the beginning of periods presented: (i) the acquisition of office properties
and land that have been consummated since the beginning of 1996 and the
acquisition of other office properties and land that the Company expects to
consummate in the near future; (ii) the sales of common and preferred stock
during 1996, the sale of common stock in the January Offering and the sale of
common stock in the April Common Stock Offering; (iii) the June Debt Offering;
(iv) the August 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 March 31, 1997, had the aforementioned transactions
occurred 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.
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
At March 31, 1997 (Unaudited)
-------------------------------------------------------------------------------------
Pro Forma Adjustments
---------------------------------------------------------------------
Acquired Probable April Common June Debt
Historical (A) Properties (B) Acquisitions (C) Stock Offering (D) Offering (E)
-------------- -------------- ----------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Rental property, net $1,538,536 $300,857 (1) $ 73,100 (4) $ -- $ --
Development property 91,663 68,859 (1) 61,986 (4) -- --
Restricted and unrestricted cash 35,197 -- -- -- --
Other assets 91,920 (1,767)(1)(2) (1,585)(4)(5) -- 3,057
---------- -------- -------- --------- ---------
Total assets $1,757,316 $367,949 $133,501 $ -- $ 3,057
========== ======== ======== ========= =========
LIABILITIES
Mortgages and notes payable $ 735,060 $351,472 (2) $133,501 (5) $(208,115) $(271,943)
Senior unsecured notes -- -- -- -- $ 275,000
Other liabilities 51,447 3,654 (2) -- --
---------- -------- -------- --------- ---------
Total liabilities 786,507 355,126 133,501 (208,115) 3,057
Minority interest 54,797 12,823 (3) -- -- --
STOCKHOLDERS' EQUITY
Preferred stock 17 -- -- -- --
Common stock 487 -- -- 82 --
Additional paid-in capital 974,662 -- -- 208,033 --
Dividends paid in excess of earnings (59,154) -- -- -- --
---------- -------- -------- --------- --------
Total stockholders' equity 916,012 -- -- 208,115 --
---------- -------- -------- --------- --------
Total liabilities and
stockholders' equity $1,757,316 $367,949 $133,501 $ -- $ 3,057
========== ======== ======== ========= ========
</TABLE>
At March 31, 1997 (Unaudited)
--------------------------------
Pro Forma Adjustments
---------------------
August Preferred Pro Forma
Stock Offering (F) Consolidated
------------------ ------------
Rental property, net $ -- $1,912,493
Development property -- 222,508
Restricted and unrestricted cash -- 35,197
Other assets -- 91,625
--------- ----------
Total assets $ -- $2,261,823
========= ==========
LIABILITIES
Mortgages and notes payable $(144,875) $ 595,100
Senior unsecured notes -- 275,000
Other liabilities -- 55,101
--------- ----------
Total liabilities (144,875) 925,201
Minority interest -- 67,620
STOCKHOLDERS' EQUITY
Preferred stock 60 77
Common stock -- 569
Additional paid-in capital 144,815 1,327,510
Dividends paid in excess of earnings -- (59,154)
--------- ----------
Total stockholders' equity 144,875 1,269,002
--------- ----------
Total liabilities and
stockholders' equity $ -- $2,261,823
========= ==========
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
March 31, 1997
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical condensed consolidated balance sheet as
of March 31, 1997.
(B) Reflects the following pro forma adjustments related to the acquired
properties:
(1) total acquisition costs of $370,294 ($7,389 related to 2400 Lake Park
Drive, $4,251 related to 680 Engineering Drive; $50,246 related to
Embassy Row, $21,745 related to Toll Hill East and West, $6,650
related to MOPAC at Breaker land, $9,852 related to Foster City
Technology Center, $15,120 related to the 150 River Oaks, $12,000
related to Peninsula Corporate Center land, $5,811 related to
Peninsula Executive Center land, $14,601 related to Willow Creek
Corporate Center, $6,163 related to Westlake Corporate Center, $926
related to RadiSys Corporate Headquarters land, $28,180 related to
Sorenson Research Park, $7,563 related to Highland Park, $5,105
related to Eastgate Technology Park, $1,987 related to Tollway Plaza I
land, $22,796 related to Oakmead West, $14,402 related to Bannockburn
IV, $3,757 related to Tollway Plaza II & III, $16,200 related to Von
Karman, $8,376 related to Summit Oaks, $18,776 related to Draper Park
North, $34,114 related to Canyon Park, $25,258 related to San Mateo II
and III, $885 related to Panorama III land, $5,200 related to Two
Mission Park, $15,137 related to 3571 North First Street, and $7,804
related to the Lightspan Building);
(2) the assumption of existing debt of $4,523 related to Sorenson Research
Park and $12,932 related to Draper Park North, the assumption of other
liabilities totaling $3,654, the use of the Company's purchase
deposits of $2,345 (net of other assets acquired of $578) and draws on
the Company's line of credit of $334,017; and
(3) the issuance of 435,400 units in connection with the acquisition
Sorenson Research Park.
(C) Reflects the following pro forma adjustments related to the anticipated
effects of probable property acquisitions:
(4) total acquisition costs of $135,086 ($39,000 related to CM Capital,
$2,019 related to Preston Ridge, $8,117 related to Reston Crossing
land, $22,284 related to Valley Technology Centre land, $34,100
related to Panattoni, $9,800 related to Rosewood, $17,400 related to
Watkins-Johnson, and $2,366 related to Draper Park North land); and
(5) the use of the Company's purchase deposits of $1,585 and draws on the
Company's line of credit of $133,501.
(D) Reflects the sale of 8,214,285 shares of common stock to the underwriter
and Security Capital USRealty at a net price of $208,115, after deduction
of transaction costs of $544.
<PAGE>
The Company used all of the proceeds to pay down amounts outstanding under
its line of credit.
(E) Reflects the issuance of $275,000 of senior unsecured notes. The Company
used all of the proceeds (net of deferred financing costs incurred of
$2,250 and discount on issuance of senior unsecured notes of $807) to pay
down amounts outstanding under its line of credit.
(F) Reflects the expected sale of 6,000,000 shares of Series B Cumulative
Redeemable Preferred Stock at a net price of $144,875, after deduction of
transaction costs $400. For pro forma purposes, the Company assumes that
all of the proceeds will be used to pay down amounts outstanding under its
line of credit.
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the three months ended March 31, 1997 (Unaudited)
----------------------------------------------------------------------------------
Pro Forma Adjustments
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
January April
Acquired Probable Common Stock Common Stock
Historical(A) Properties(B) Acquisitions(C) Offering(D) Offering(E)
------------- ------------- ------------- ------------ ------------
Real estate operating revenue:
Rental revenue $ 66,289 14,609(1) $ 2,629(6) $ -- $ --
Real estate service income 4,178 -- -- -- --
------------- ------------- --------------- ------------ ------------
Total revenues 70,467 14,609 2,629 -- --
------------- ------------- --------------- ------------ ------------
Real estate operating expenses:
Property operating expenses 23,643 4,119(4) 549(8) -- --
Interest expense 11,257 6,336(2) 1,288(9) (823) (3,819)
General and administrative 5,156 -- -- -- --
Depreciation and amortization 15,916 2,723(3) 424(7) -- --
------------- ------------- --------------- ------------ ------------
Total operating expenses 55,972 13,178 2,261 (823) (3,819)
------------- ------------- --------------- ------------ ------------
Real estate operating 14,495 1,431 368 823 3,819
income
Other operating income
(expense), net 481 -- -- -- --
------------- ------------- --------------- ------------ ------------
Income before minority
interest 14,976 1,431 368 823 3,819
Minority interest (1,717) (324)(5) (2)(10) -- --
------------- ------------- --------------- ------------ ------------
Income from continuing $ 13,259 $ 1,107 $ 366 $ 823 $ 3,819
operations ============= ============= =============== ============ ============
Earnings from continuing
operations per common share $ 0.26
=============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the three months ended March 31, 1997
(Unaudited)
--------------------------------------------------
Pro Forma Adjustments
---------------------------------
June Debt August Preferred Pro Forma
Offering(F) Stock Offering(G) Consolidated
----------- ----------------- -------------
<S> <C> <C> <C>
Real estate operating revenue:
Rental revenue $ -- $ -- $ 83,527
Real estate service income -- -- 4,178
------------ ------------ -------------
Total revenues -- -- 87,705
------------ ------------ -------------
Real estate operating expenses:
Property operating expenses -- -- 28,311
Interest expense 79 (2,658) 11,660
General and administrative -- -- 5,156
Depreciation and amortization -- -- 19,063
------------ ------------ -------------
Total operating expenses 79 (2,658) 64,190
------------ ------------ -------------
Real estate operating
income (79) 2,658 23,515
Other operating income
(expense), net -- -- 481
------------ ------------ -------------
Income before minority
interest (79) 2,658 23,996
------------ ------------ -------------
Minority interest -- -- (2,043)
------------ ------------ -------------
Income from continuing $ (79) $ 2,658 $ 21,953
operations ============ ============ =============
Earnings from continuing
operations per common share $ 0.31(H)
=============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the year ended December 31, 1996 (Unaudited)
-------------------------------------------------------------------------------
Pro Forma Adjustments
-------------------------------------------------------------------
January
Common
Acquired Probable Stock April Common June Debt
Historical Properties Acquisitions Offering Stock Offering Offering
(A) (B) (C) (D) (E) (F)
---------- ----------- ------------ -------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $154,165 $134,236 (1) $ 9,283 (6) $ -- $ -- $ --
Real estate service income 12,512 -- -- -- -- --
-------- -------- ------- -------- ------- -----
Total revenues 166,677 134,236 9,283 -- -- --
-------- -------- ------- ------- ------- -----
Real estate operating expenses:
Property operating expenses 51,927 46,575 (4) 2,416 (8) -- -- --
Interest expense 31,630 53,266 (2) 5,364 (9) (10,200) (15,609) (3)
General and administrative 15,228 -- -- -- -- --
Depreciation and amortization 38,264 29,720 (3) 1,696 (7) -- -- --
-------- -------- ------- -------- ------- -----
Total operating expenses 137,049 129,561 9,476 (10,200) (15,609) (3)
-------- -------- ------- -------- ------- -----
Real estate operating income 29,628 4,675 (193) 10,200 15,609 3
Other operating income (expense), net (94) 8 (1) -- -- -- --
-------- -------- ------- -------- ------- -----
Income before minority interest 29,534 4,683 (193) 10,200 15,609 3
-------- -------- ------- -------- ------- -----
Minority interest (4,732) (1,030)(5) (3) (10) -- -- --
-------- -------- ------- -------- ------- -----
Income from continuing operations $ 24,802 $ 3,653 $ (196) $10,200 $15,609 $ 3
======== ======== ======= ======= ======= =====
Earnings from continuing operations
per common share $ 0.90
========
</TABLE>
For the year ended December 31, 1996 (Unaudited)
------------------------------------------------
Pro Forma Adjustments
----------------------------
August Preferred
Stock Offering Pro Forma
(G) Consolidated
---------------- ------------
Real estate operating revenue:
Rental revenue $ -- $297,684
Real estate service income -- 12,512
---------- -------
Total revenues -- 310,196
---------- -------
Real estate operating expenses:
Property operating expenses -- 100,918
Interest expense (10,866) 53,582
General and administrative -- 15,228
Depreciation and amortization -- 69,680
---------- -------
Total operating expenses (10,866) 239,408
---------- -------
Real estate operating income 10,866 70,788
Other operating income (expense), net -- (86)
---------- -------
Income before minority interest 10,866 70,702
---------- -------
Minority interest -- (5,765)
---------- -------
Income from continuing operations $ 10,866 $64,937
========== =======
Earnings from continuing operations
per common share $ 0.86 (H)
=======
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Three Months Ended March 31, 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 three months ended March 31, 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 acquired;
(2) the additional interest expense on the line of credit ($7,756 of
interest costs net of $2,562 capitalized for the three months ended
March 31, 1997 and $48,340 of interest costs net of $8,433
capitalized in 1996) and interest expense on debt assumed in certain
acquisitions ($1,142 for the three months ended March 31, 1997 and
$13,359 in 1996);
(3) the depreciation expense for the acquisitions based on the new
accounting basis for the rental property;
(4) 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
(5) the minority interest share of earnings.
(C) Pro forma adjustments for the probable property acquisitions reflect:
(6) the historical operating activity of the properties to be acquired;
(7) the depreciation expense for the probable acquisitions based on the
new accounting basis for the rental property to be acquired;
(8) the historical operating activity of the rental properties to be
acquired reduced by the elimination of management fee expenses that
will not be incurred by the Company upon purchase of the properties;
(9) the additional interest expense on the line of credit ($2,450 of
interest costs net of $1,162 capitalized for the three months ended
March 31, 1997 and $10,013 of interest costs net of $4,649
capitalized in 1996); and
(10) the minority interest share of earnings.
(D) Pro forma adjustment reflects the reduction in interest expense associated
with the pay down of amounts outstanding under the line of credit with the
proceeds from the January Offering of common stock.
(E) Pro forma adjustment reflects the reduction in interest expense associated
with the pay down of amounts outstanding under the line of credit with the
proceeds from the April Offering of common stock.
(F) Pro forma adjustment reflects the increase in interest expense of $79 for
the three months ended March 31, 1997 and the decrease in interest expense
of $3 for 1996, which includes the amortization of deferred financing
costs of $94 for the three months ended March 31, 1997 and $373 for 1996,
associated with the pay down 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 line of credit with the
proceeds from the anticipated August Offering of preferred stock.
(H) Based upon 57,169,359 and 56,931,340 pro forma shares of common stock
outstanding on a weighted average basis during the three months ended
March 31, 1997 and the year ended December 31, 1996, respectively.
