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): June 20, 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: June 20, 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 and Concurrent
USRealty Purchase"); (iii) the Company's sale of senior unsecured notes (the
"June Debt Offering"); and (iv) 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 and Concurrent USRealty Purchase; (iii) the June Debt
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 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 and Concurrent USRealty
Purchase; (iii) the June Debt Offering; and (iv) 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 June Debt Pro Forma
Historical (A) Properties (B) Acquisitions (C) Offering (D) Offering (E) Consolidated
-------------- -------------- ----------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Rental property, net $1,538,536 $157,924 (1) $277,910 (4) $ -- $ -- $1,974,370
Development property 91,663 61,902 (1) 58,212 (4) -- -- 211,777
Restricted and unrestricted cash 35,197 -- -- -- -- 35,197
Other assets 91,920 (1,886)(1)(2) (1,785)(4)(5) -- 1,781 90,030
---------- -------- -------- --------- --------- ----------
Total assets $1,757,316 $217,940 $334,337 $ -- $ 1,781 $2,311,374
========== ======== ======== ========= ========= ==========
LIABILITIES
Mortgages and notes payable $ 735,060 $203,165 (2) $334,337 (5) $(208,115) $(198,219) $ 866,228
Senior unsecured notes -- -- -- -- $ 200,000 200,000
Other liabilities 51,447 1,952 (2) -- -- 53,399
---------- -------- -------- --------- --------- ----------
Total liabilities 786,507 205,117 334,337 (208,115) 1,781 1,119,627
Minority interest 54,797 12,823 (3) -- -- -- 67,620
STOCKHOLDERS' EQUITY
Preferred stock 17 -- -- -- -- 17
Common stock 487 -- -- 82 -- 569
Additional paid-in capital 974,662 -- -- 208,033 -- 1,182,695
Dividends paid in excess of earnings (59,154) -- -- -- -- (59,154)
---------- -------- -------- --------- --------- ----------
Total stockholders' equity 916,012 -- -- 208,115 -- 1,124,127
---------- -------- -------- --------- --------- ----------
Total liabilities and
stockholders' equity $1,757,316 $217,940 $334,337 $ -- $ 1,781 $2,311,374
========== ======== ======== ========= ========= ==========
</TABLE>
<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 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 $220,085 ($7,389 related to the 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 150 River
Oaks, $12,000 related to Peninsula Corporate Center land, $14,301
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, and $5,811 related to Peninsula Executive
Center land);
(2) the assumption of existing debt of $4,523 related to Sorenson
Research Park, the assumption of other liabilities totaling
$1,952, the use of the Company's purchase deposits of $2,145 (net
of other assets acquired of $259) and a draw on the Company's Line
of Credit of $198,642; and
(3) the issuance of 435,400 units of CarrAmerica Realty, L.P. in
connection with the acquisition Sorenson Research Park.
(C) Reflects the following pro forma adjustments related to the anticipated
effects of probable acquisitions:
(4) total acquisition costs of $336,122 ($69,600 related to CM
Capital, $14,510 related to Bannockburn IV, $8,570 related to
Summit Oaks, $2,303 related to Panorama III land, $21,658 related
to Draper Park North, $3,757 related to Tollway Plaza II & III,
$46,241 related to Canyon Park, $2,019 related to Preston Ridge,
$8,117 related to Reston Crossing land, $22,284 related to Valley
Technology Centre land, $60,063 related to Panattoni, $16,175
related to Von Karmen, $25,075 related to San Mateo, and $35,750
related to Signature Plaza); and
(5) the assumption of existing debt of $13,000 related to Draper Park
North, the use of the Company's purchase deposits of $1,785 and a
draw on the Company's Line of Credit of $321,337.
(D) Reflects the sale of 8,214,285 shares of common stock of the Company
to the underwriter and Security Capital U.S. Realty at a net price of
$208,115, after deduction of transaction costs of $544. The Company
expects to use all of the proceeds to pay down amounts outstanding under
its Line of Credit.
<PAGE>
(E) Reflects the expected issuance of $200,000 of senior unsecured notes. The
Company expects to use all of the proceeds (net of deferred financing
costs incurred of $1,781) 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
-----------------------------------------------------------------
April Common
January Stock Offering
Common and Concurrent
Acquired Probable Stock USRealty June Debt
Historical Properties Acquisitions Offering Purchase Offering Pro Forma
(A) (B) (C) (D) (E) (F) Consolidated
---------- ----------- ------------ -------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $66,289 $10,374 (1) $7,951 (6) $ -- $ -- $ 84,614
Real estate service income 4,178 -- -- -- -- 4,178
------- ------ ------- ---- ------ ----- -------
Total revenues 70,467 10,374 7,951 -- -- 88,792
------- ------ ------- ---- ------ ----- -------
Real estate operating expenses:
Property operating expenses 23,643 2,616 (4) 2,455 (8) -- -- 28,714
Interest expense 11,257 3,589 (2) 5,059 (9) (823) (3,819) 166 15,429
General and administrative 5,156 -- -- -- -- 5,156
Depreciation and amortization 15,916 1,831 (3) 1,706 (7) -- -- 19,453
------- ------ ------- ---- ------ ----- -------
Total operating expenses 55,972 8,036 9,220 (823) (3,819) 166 68,752
------- ------ ------- ---- ------ ----- -------
Real estate operating income 14,495 2,338 (1,269) 823 3,819 (166) 20,040
Other operating income (expense), net 481 -- (1) -- -- -- -- 481
------- ------ ------- ---- ------ ----- -------
Income before minority interest 14,976 2,338 (1,269) 823 3,819 (166) 20,521
------- ------ ------- ---- ------ ----- -------
Minority interest (1,717) (234)(5) 6 (10) -- -- -- (1,945)
------- ------ ------- ---- ------ ----- -------
Income from continuing operations $13,259 $2,104 $(1,263) $823 $3,819 $(166) $18,576
======= ====== ======= ==== ====== ===== =======
Earnings from continuing operations
per common share $ 0.26 $ 0.31 (G)
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the year ended December 31, 1996 (Unaudited)
------------------------------------------------------------------------------------------
Pro Forma Adjustments
-------------------------------------------------------------------
April Common
January Stock Offering
Common and Concurrent
Acquired Probable Stock USRealty June Debt
Historical Properties Acquisitions Offering Purchase Offering Pro Forma
(A) (B) (C) (D) (E) (F) Consolidated
---------- ----------- ------------ -------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $154,165 $120,705 (1) $27,913 (7) $ -- $ -- -- $302,783
Real estate service income 12,512 -- -- -- -- -- 12,512
-------- -------- ------- -------- ------- ----- -------
Total revenues 166,677 120,705 27,913 -- -- -- 315,295
-------- -------- ------- ------- ------- ----- -------
Real estate operating expenses:
Property operating expenses 51,927 42,151 (4) 9,310 (8) -- -- -- 103,388
Interest expense 31,630 42,574 (2) 20,794 (9) (10,200) (15,609) 343 69,532
General and administrative 15,228 -- -- -- -- -- 15,228
Depreciation and amortization 38,264 26,148 (3) 6,815 (7) -- -- -- 71,227
-------- -------- ------- -------- ------- ----- -------
Total operating expenses 137,049 110,873 36,919 (10,200) (15,609) 343 259,375
-------- -------- ------- -------- ------- ----- -------
Real estate operating income 29,628 9,832 (9,006) 10,200 15,609 (343) 55,920
Other operating income (expense), net (94) 8 (1) -- -- -- -- (86)
-------- -------- ------- -------- ------- ----- -------
Income before minority interest 29,534 9,840 (9,006) 10,200 15,609 (343) 55,834
-------- -------- ------- -------- ------- ----- -------
Minority interest (4,732) (1,142)(5) 157 (10) -- -- -- (5,717)
-------- -------- ------- -------- ------- ----- -------
Income from continuing operations $ 24,802 $ 8,698 $(8,849) $10,200 $15,609 $(343) $50,117
======== ======== ======= ======= ======= ===== =======
Earnings from continuing operations
per common share $ 0.90 $ 0.83 (G)
======== =======
</TABLE>
<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 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 ($5,272 of
interest costs net of $2,420 capitalized for the three months
ended March 31, 1997 and $38,187 of interest costs net of $7,912
capitalized in 1996) and interest expense on debt assumed in
certain acquisitions ($737 for the three months ended March 31,
1997 and $12,299 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 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 ($5,857 of
interest costs net of $1,063 capitalized for the three months
ended March 31, 1997 and $23,939 of interest costs net of $4,204
capitalized in 1996) and interest expense on debt assumed in
certain acquisitions ($265 for the three months ended March 31,
1997 and $1,059 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 and Concurrent USRealty
Purchase of common stock.
<PAGE>
(F) Pro forma adjustment reflects the increase in interest expense of $166
for the three months ended March 31, 1997 and $343 for 1996, which
includes the amortization of deferred financing costs of $52 for the
three months ended March 31, 1997 and $209 for 1996, associated with the
pay down of amounts outstanding under the Line of Credit with the
proceeds from the expected issuance of $200 million of senior unsecured
notes.
(G) Based upon 57,169,359 and 56,931,340 pro forma shares of common stock
outstanding and common stock equivalents on a weighted average basis
during the three months ended March 31, 1997 and the year ended December
31, 1996, respectively.
