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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 and Exchange Act of 1934
Date of Report (date of earliest event reported): September 29, 1998
CarrAmerica Realty Corporation
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(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1850 K Street, N.W., Washington, D.C. 20006
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(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 729-7500
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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. Changes in Registrant's Certifying Accountant.
Not applicable.
ITEM 5. Other Events.
None.
ITEM 6. Resignations of Registrant's Directors.
Not applicable.
ITEM 7. Financial Statements and Exhibits.
(a) Pro Forma Financial Information.
Attached hereto as Exhibit 99.1 are a pro forma condensed
consolidated balance sheet (unaudited) at June 30, 1998 and a pro forma
condensed consolidated statements of operations (unaudited) for the six months
ended June 30, 1998 and the year ended December 31, 1997 relating to the
Company.
(b) Exhibits
Exhibit
Number
99.1 Pro Forma Financial Information.
Pro forma condensed consolidated balance
sheet (unaudited) at June 30, 1998 and a pro forma condensed
consolidated statements of operations (unaudited) for the six
months ended June 30, 1998 and the year ended December 31,
1997 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: September 29, 1998
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
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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
June 30, 1998 and a pro forma condensed consolidated
statements of operations (unaudited) for the six months ended
June 30, 1998 and the year ended December 31, 1997 relating
to the Company.
Exhibit 99.1
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PROFORMA FINANCIAL INFORMATION
June 30, 1998
Unaudited
The unaudited Pro Forma Condensed Consolidated Balance Sheet is
presented as if the following transactions occurred on June 30, 1998: (i) the
acquisition and sales of office properties, land, and executive office suite
centers, that have been consummated since June 30, 1998 and the acquisition of
other office properties, land, and executive office suite centers that the
Company expects to consummate in the near future; (ii) the net draws on the
Company's unsecured revolving credit facility, and (iii) the issuance of senior
unsecured notes in September, 1998. The unaudited Pro Forma Condensed
Consolidated Statements of Operations for the six months ended June 30, 1998 and
the year ended December 31, 1997 are presented as if the following transactions
had been consummated as of the beginning of each period: (i) the acquisition and
sales of office properties, land, OmniOffices and other executive office suite
centers that have been consummated since the beginning of 1997 and the
acquisition of other office properties, land, and executive office suite centers
that the Company expects to consummate in the near future; (ii) the sales of
common stock and preferred stock during 1997 and 1998; (iii) the issuance of
senior unsecured notes by the Company in July 1997 and February 1998; (iv) the
anticipated issuance of senior unsecured notes in September, 1998; and (v) the
repayment of amounts outstanding under the Company's unsecured revolving credit
facility.
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 June 30, 1998, 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 each
period, nor do they 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 June 30, 1998 (Unaudited)
-------------------------------------------------------------------------------------------------
Pro Forma Adjustments
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
September 1998
Acquired Disposed Probable Senior Unsecured Pro Forma
Historical(A) Properties(B) Properties(C) Acquisitions(D) Note Offering(E) Consolidated
------------ --------- ----------- ---------- ----------- -----------
ASSETS
Rental property, net $ 2,565,238 $ 23,721(1) $ (27,455)(3) $ 19,575(6) $ - $ 2,581,079
Development property 417,722 50,458(1) - 23,552(6) - 491,732
Restricted and unrestricted
cash 79,638 - - - - 79,638
Other assets 433,040 11,800(1),(2) (76)(3) 16,506(6),(7) 954 462,224
------------ -------- ----------- ---------- ----------- -------------
Total assets $ 3,495,638 $ 85,979 $ (27,531) $ 59,633 $ 954 $ 3,614,673
============ ======== =========== ========== =========== =============
LIABILITIES
Mortgages, unsecured notes
and credit facilities $ 1,393,964 $ 85,564(2) $ (32,823)(4) $ 59,633(7) $ (149,046) $ 1,357,292
Senior unsecured notes - - - - 150,000 150,000
Other liabilities 125,014 415(2) - - - 125,429
------------ -------- ----------- ---------- ----------- -------------
Total liabilities 1,518,978 85,979 (32,823) 59,633 954 1,632,721
Minority interest 90,916 - 658 (5) - - 91,574
STOCKHOLDERS' EQUITY
Preferred stock 96 - - - - 96
Common stock 716 - - - - 716
Additional paid-in capital 1,965,118 - - - - 1,965,118
Accumulated Other Compre-
hensive Income 787 - - - - 787
Dividends paid in excess
of earnings (80,973) - 4,634 (5) - - (76,339)
------------ -------- ----------- ---------- ----------- -------------
Total stockholders' equity 1,885,744 - 4,634 - - 1,890,378
------------ -------- ----------- ---------- ----------- -------------
Total liabilities and
stockholders' equity $ 3,495,638 $ 85,979 $ (27,531) $ 59,633 $ 954 $ 3,614,673
============ ======== =========== ========== =========== =============
</TABLE>
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
June 30, 1998
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical condensed consolidated balance sheet as of
June 30, 1998.
(B) Reflects the following pro forma adjustments related to the acquired
properties:
(1) total acquisition costs of $89,379 ($17,296 related to Palomar,
$6,425 related to Benecia, $20,901 related to Orchard Bayside
land, $10,575 related to Point South land, $9,480 related to
Junction Road land, $5,204 related to Royal Ridge II land, $4,298
related to Parmer Lane land, and $15,200 related to certain
executive office suite centers); and
(2) the use of the Company's purchase deposits of $3,400, the
assumption of other liabilities totaling $415, the assumption of
existing debt of $11,082, and draws on the Company's unsecured
revolving credit facility of $74,482.
(C) Reflects the following pro forma adjustments related to the disposition
the JD Edwards property:
(3) total net cost of the property of $27,531;
(4) the repayment of $32,823 on the Company's unsecured revolving
credit facility with the total sales proceeds; and
(5) the $5,292 gain on disposition of the property.
(D) Reflects the following pro forma adjustments related to the anticipated
effects of probable acquisitions:
(6) total acquisition costs of $59,777 ($19,575 related to Concord,
$2,237 related to Royal Ridge III land, $19,400 related to the
option to purchase 1201 F land, $609 related to Panarama X land,
$1,306 related to Wasatch 16 land, and $16,650 related to certain
executive office suite centers); and
(7) the use of the Company's purchase deposits of $144, assumption of
existing debt of $7,850, and draws on the Company's unsecured
revolving credit facility of $51,783.
(E) Reflects the issuance of $150,000 of senior unsecured notes due October,
reduced by offering costs of $954. The Company expects to use the net
proceeds of $149,046 to pay down amounts outstanding under the unsecured
revolving credit facility.
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Six Months ended June 30, 1998 (Unaudited)
---------------------------------------------------------------------------------------------------
Pro Forma Adjustments
------------------------------------------------------------------------
September 1998
Prior Stock Senior
Acquired Disposed Probable and Debt Unsecured Pro Forma
Historical(A) Properties(B) Properties(C) Acquisitions(D)Offerings(E) Note Offering(F)Consolidated
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $ 207,293 $ 25,462(1) $ (2,745)(6) $ 2,935 (10) $ - $ - $ 232,945
Real estate service income 6,514 - - - - - 6,514
Executive suites revenue 50,309 10,369(1) - 3,835 (10) - - 64,513
---------- ------------ ------------ ------------ --------- - ----------- -----------
Total revenues 264,116 35,831 (2,745) 6,770 - - 303,972
---------- ------------ ------------ ------------ --------- - ----------- -----------
Real estate operating expenses:
Property operating expenses 67,152 2,587(4) (851)(6) 511 (13) - - 69,399
Interest expense 34,578 9,016(2) (1,367)(7) 1,113 (11) (5,462) 453 38,331
Executive suites operating
expenses 43,441 24,092(1) - 4,879 (10) - - 72,412
General and administrative 14,461 - - - - - 14,461
Depreciation and amortization 49,879 4,878(3) (497)(8) 604 (12) - - 54,864
---------- ----------- ------------ ------------ ---------- ---------- -----------
Total operating expenses 209,511 40,573 (2,715) 7,107 (5,462) 453 249,467
---------- ------------ ------------ ------------ ---------- ---------- -----------
Real estate operating
income 54,605 (4,742) (30) (337) 5,462 (453) 54,505
Other operating income
(expense), net 30,962 (79)(1) (6)(6) - - - 30,877
--------- ----------- ------------ ------------ --------- --------- -----------
Income before minority
interest 85,567 (4,821) (36) (337) 5,462 (453) 85,382
--------- ----------- ------------ ------------ ---------- --------- -----------
Minority Interest (10,951) (195)(5) 129 (9) (21)(14) - - (11,038)
--------- ----------- ------------ ------------ ---------- --------- -----------
Income from continuing
operations $ 74,616 $ (5,016) $ 93 $ (358) $ 5,462 $ (453) $ 74,344
========= ============ ============ ============ ========== ========= ===========
Earnings from continuing
operations per common share $ 0.87 $ 0.79(G)
========= =========
</TABLE>
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the year ended December 31, 1997 (Unaudited)
---------------------------------------------------------------------------------------------------
Pro Forma Adjustments
------------------------------------------------------------------------
September 1998
Prior Stock Senior
Acquired Disposed Probable and Debt Unsecured Pro Forma
Historical(A) Properties(B) Properties(C) Acquisitions(D)Offerings(E) Note Offering(F)Consolidated
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real estate operating revenue:
Rental revenue $ 325,502 $ 147,965(1) $ (19,644)(6) $ 5,869 (10) $ - $ - $ 459,692
Real estate service income 15,998 - - - - - 15,998
Executive suites revenue 17,865 62,586(1) - 7,669 (10) - - 88,120
----------- ----------- ---------- -------- ---------- -------- -----------
Total revenues 359,365 210,551 (19,644) 13,538 - - 563,810
----------- ----------- ---------- -------- ---------- -------- -----------
Real estate operating expenses:
Property operating expenses 114,826 27,537(4) (8,892)(6) 1,022 (13) - - 134,493
Interest expense 51,528 71,907(2) (11,225)(7) 2,412 (11) (52,881) (167) 61,574
Executive suites operating
expenses 15,728 103,620(1) - 9,756 (10) - - 129,104
General and administrative 21,839 - - - - - 21,839
Depreciation and amortization 76,958 31,241(3) (3,345)(8) 1,207 (12) - - 106,061
----------- ----------- ---------- -------- ---------- -------- -----------
Total operating expenses 280,879 234,305 (23,462) 14,397 (52,881) (167) 453,071
----------- ----------- ---------- -------- ---------- -------- -----------
Real estate operating
income 78,486 (23,754) 3,818 (859) 52,881 167 110,739
Other operating income
(expense), net 8,527 - (153)(6) - - - 8,374
----------- ----------- ---------- -------- ---------- -------- -----------
Income before minority
interest 87,013 (23,754) 3,665 (859) 52,881 167 119,113
----------- ----------- ---------- -------- ---------- -------- -----------
Minority Interest (8,273) (976)(5) 232 (9) (43)(14) - - (9,060)
----------- ----------- ---------- -------- ---------- -------- -----------
Income from continuing
operations $ 78,740 $ (24,730) $ 3,897 $ (902) $ 52,881 $ 167 $ 110,053
=========== =========== ========== ======== ========== ======== ===========
Earnings from continuing
operations per common share $ 1.23 $ 1.04(G)
=========== ============
</TABLE>
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS For the six month period ended
June 30, 1998 and
the year ended December 31, 1997
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical condensed consolidated statements of
operations for the six month period ended June 30, 1998 and the year
ended December 31, 1997.
(B) Pro forma adjustments for the purchases of the acquired properties reflect:
(1) the historical operating activity of the properties, OmniOffices,
and certain executive office suites centers;
(2) the additional interest expense on outstanding amounts on the
unsecured revolving credit facility (weighted average interest
rate 6.38% for 1998 and 7.1% for 1997), and assumed debt (interest
rates ranging from 7.75% to 8.85%) incurred for the acquisitions
($11,002 of interest costs net of $1,986 capitalized for
development property in 1998 and $84,041 of interest costs net of
$12,134 capitalized for development property in 1997);
(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 and certain executive office suites centers based on
useful lives ranging from 5 to 30 years;
(4) the historical operating activity of the properties, 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 operations.
(C) Pro forma adjustments for the dispositions of three properties during
1998 and five properties during 1997 reflect:
(6) the elimination of the historical operating activity of the
properties sold;
(7) the reduction of interest expense from the repayment of
outstanding amounts on the unsecured revolving credit facility
(weighted average interest rate of 6.38 % for 1998 and 7.1% for
1997) using the sales proceeds; and
(8) the elimination of the historical depreciation expense of the
properties sold.
(9) the elimination of the minority interest share of earnings
(D) Reflects the following pro forma adjustments related to the anticipated
effects of the probable acquisitions of properties and certain executive
office suites centers:
(10) the historical operating activity of the properties and certain
executive office suites centers;
<PAGE>
(11) the additional interest expense on outstanding amounts on the
unsecured revolving credit facility (weighted average interest
rate of 6.38% for 1998 and 7.1% for 1997) incurred for
acquisitions ($1,510 of interest costs net of $745 capitalized for
development property in 1998 and $3,389 of interest costs net of
$1,677 capitalized for development property in 1997) and interest
expense of $348 for 1998 and $695 for 1997 on assumed debt at
interest rates ranging from 7.75% to 8.85%;
(12) the depreciation expense based on the new accounting basis of the
rental properties based on a 30 year useful life and the assets of
certain executive office suites centers based on useful lives
ranging from 5 to 30 years;
(13) 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
(14) the minority interest share of earnings.
(E) Pro forma adjustment reflects the net reduction in interest expense
associated with the pay down of amounts outstanding under the Company's
unsecured revolving credit facility with the proceeds from sales of
common stock in January, April, and December of 1997 and April 1998, the
proceeds from sales of preferred stock in August, November, and December
of 1997 and the proceeds from the issuance of senior unsecured notes in
July 1997 and February 1998.
(F) Proforma adjustment reflects the change in interest expense associated
with the paydown of amounts under the unsecured revolving credit facility
with the proceeds from the anticipated issuance of the $150 million of
senior unsecured notes.
(G) Based upon 71,505,390 and 70,891,812 pro forma shares of common stock
outstanding on a weighted average basis for the six month period ended
June 30, 1998 and the year ended December 31, 1997, respectively.
