<PAGE>
Immediate Karen L. Widmayer: Media Contact
(202) 729-1789
Stephen Walsh: Analyst Contact
(202) 729-1764
CORRECTION -- CARRAMERICA ANNOUNCES 12% FFO GROWTH PER SHARE IN THIRD QUARTER
2000
Washington D.C. - November 3, 2000 - CarrAmerica Realty Corporation (NYSE:CRE)
today reported third quarter Funds From Operations (FFO) from continuing
operations of $56.3 million or $.75 per diluted share, a 12% increase over the
same period in 1999. FFO for the nine month period ended September 30, 2000 was
$165.3 million or $2.22 per diluted share as compared to $143.1 million or $1.90
per diluted share for the same period in 1999, a 17% increase.
CarrAmerica President and Chief Executive Officer, Thomas A. Carr, commented,
"Our property level performance continues to be strong and we have achieved
added financial flexibility this year with the successful execution of our
capital plan." Mr. Carr continued, "We believe CarrAmerica is very well
positioned to grow our business in the coming year."
Same Store Occupancy Exceeds 97%; Rental Rate Growth Reaches 40%
----------------------------------------------------------------
Performance of operating properties remains strong with an average occupancy
of 97.1% at September 30, 2000. Property net operating income was $91.9 million
for the third quarter, up 6% from the same period in 1999.
Same store portfolio operating income during the quarter grew 6.6% on a GAAP
basis and 7.0% on a cash basis over the same period in 1999. The occupancy rate
for same store properties was 97.1% in the third quarter of 2000 as compared to
96.5% for third quarter 1999.
Rental rates increased 40% on average on the rolling leases executed during
the nine-month period ended September 30, 2000.
Development Update
------------------
As of September 30, 2000, CarrAmerica and its affiliate, CarrAmerica
Development, Inc., had approximately 796,000 square feet of wholly owned
projects under development in seven of the Company's markets. Total cost of this
development is expected to be approximately $149 million, of which $79
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<PAGE>
CarrAmerica Release of November 6, 2000
Page Two
million had been invested as of September 30, 2000. This development pipeline
is currently 100% leased or committed and the year-one unleveraged return on
CarrAmerica's invested capital is expected to be approximately 11.8%.
CarrAmerica or its affiliates own a partial interest in nine development
projects totaling 1.3 million square feet under development in Austin, Dallas,
Denver and Washington, D.C. The total cost of these projects is expected to be
$253 million and the projects are currently 68% leased or committed.
CarrAmerica and its affiliate, CarrAmerica Development, Inc., expect to
commence an additional $117 million of new development in the fourth quarter of
2000. CarrAmerica's share of the total project costs for these developments is
approximately $75 million.
During the third quarter, CarrAmerica and its affiliates placed in service
approximately 208,746 square feet of new office space in wholly owned projects
with total project costs of approximately $29.1 million at an expected year-one
unleveraged return on invested capital of approximately 11.3%. In addition,
89,587 square feet were placed in service in partially owned projects in which
CarrAmerica owns approximately 35% on average, with total project costs of $22.1
million, and an average yield of 10.5%.
During the third quarter, 231,838 square feet of new leases were executed in
development projects both wholly owned and within joint ventures. Major lease
transactions include:
<TABLE>
<CAPTION>
Tenant Property Market S.F.
----------------------------------- -------------------------- -------------- ------
<S> <C> <C> <C>
AT&T Broadband Dry Creek Corporate Center Englewood, CO 92,356
Austin Ventures 300 W. Sixth Street Austin, TX 45,000
DGI Technologies Custer Court Dallas, TX 30,000
Health Insurance Assn. of America 1201 F Street Washington, DC 40,960
Icon Parkway North Deerfield, IL 20,071
</TABLE>
CarrAmerica Closes on Development Joint Venture
-----------------------------------------------
As announced previously by the Company, in August 2000, CarrAmerica closed on
an approximately $422 million development joint venture with New York State
Teachers' Retirement System, including one building which will be contributed at
a value of approximately $40 million upon obtaining certain approvals to the
assumption of an existing $24 million mortgage. The properties were contributed
or sold to the venture at a value of approximately $70 million over net book
value. The venture encompasses five premium-quality suburban office parks in
four high-growth markets totaling more than 2.5 million square feet of
stabilized properties, 461,000 square feet of office projects now under
development and land that can support approximately 1.5 million square feet of
office space. The value of the venture is expected to increase to over $675
million when the remaining land is fully developed.
CarrAmerica recognized a gain of approximately $20.1 million (after taxes and
an accounting deferral) on the properties being sold or contributed to the joint
venture. The operating properties were contributed or sold to the venture at an
overall going in cap rate based on cash NOI of approximately 9.34%.
Cash proceeds to CarrAmerica and its affiliates from the joint venture were
approximately $250 million. CarrAmerica has used the proceeds to repay
outstanding indebtedness, including $150 million of its unsecured notes that
matured on October 1, 2000, and for other general corporate purposes including
stock repurchases. The joint venture expects to place 50 to 60% debt on the
operating assets in the first quarter of 2001, which would yield additional cash
proceeds to CarrAmerica of approximately $75 million. CarrAmerica and its
affiliates have retained a 35% interest in the venture. CarrAmerica's affiliates
will also earn development, property management and leasing fees from the
contributed properties.
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<PAGE>
CarrAmerica Release of November 6, 2000
Page Three
Dispositions
------------
In addition to the land and buildings sold and/or contributed to the joint
venture with New York State Teachers' Retirement System, during the third
quarter, the Company and its affiliates sold land that could support the
development of 152,000 square feet for $13 million.
The Company and its affiliates have 10 properties under contract to be sold at
a purchase price of $216 million and four land parcels under contract to be sold
at a purchase price of $14.8 million.
The Company anticipates the proceeds from the sale of these assets to be used
to repay amounts outstanding on the Company's line of credit, to fund future
development project costs and for other general corporate purposes. There can be
no assurance that any pending disposition will occur on such terms or at all.
CarrAmerica Stock Repurchase Plan Expanded
------------------------------------------
CarrAmerica has purchased approximately $71.4 million of its common stock to
date under the previously announced $100 million share repurchase program. The
average price per share has been $28.14.
CarrAmerica also announced that its Board of Directors has authorized an
expansion of the existing share repurchase program of up to an additional $50
million of its outstanding common shares. These additional shares will be
purchased under the same terms and conditions as its current program.
CarrAmerica Announces Third Quarter Dividend
--------------------------------------------
The Board of Directors of CarrAmerica yesterday declared a third quarter
dividend for its common stock and its Series A Cumulative Convertible Redeemable
preferred stock of $.4625 per share. The dividends will be payable to common and
Series A preferred shareholders of record as of the close of business on
November 17, 2000. CarrAmerica's common stock will begin trading ex-dividend on
November 15, 2000, and the dividends payable to common shareholders will be paid
on December 1, 2000. Dividends payable to Series A preferred shareholders will
be paid on December 1, 2000.
The Company also declared a regular dividend for its Series B, Series C, and
Series D preferred stock. The Series B Cumulative Redeemable preferred stock
dividend was declared to be $.5356 per share, the Series C Cumulative Redeemable
preferred stock dividend was declared to be $.5344 per share, and the Series D
Cumulative Redeemable preferred stock dividend was declared to be $.5281 per
share. The Series B, Series C and Series D preferred stock dividends are payable
to shareholders of record as of the close of business on November 17, 2000. Such
preferred stock will begin trading ex-dividend on November 15, 2000 and the
dividends will be paid on November 30, 2000.
CarrAmerica Third Quarter Webcast and Conference Call
-----------------------------------------------------
CarrAmerica will conduct a conference call to discuss the 2000 third quarter
results and the Company's outlook for the remainder of the year and 2001 on
Monday, November 6, 2000 at 11:00 a.m. ET. A live webcast of the call will be
available through a link at CarrAmerica's web site, www.carramerica.com.
-------------------
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<PAGE>
CarrAmerica Release of November 6, 2000
Page Four
The phone number for the conference call is 1-800-982-3661; for local
Washington, D.C. area participants, 703-871-3020; and for international
participants, 1-050-089-2521 (passcode 4680945 for all callers). The call is
open to all interested persons. A taped replay of the conference call can be
accessed from 3:00 PM ET on November 6 through midnight ET on November 13 by
dialing 1-888-266-2081 and for local Washington, D.C. area and international
participants, 703-925-2533 (passcode 4680945 for all callers).
A copy of supplemental material on the Company's third quarter operations is
available on the Company's web site, www.carramerica.com, and is being filed on
-------------------
Form 8-K with the Securities and Exchange Commission. A copy is also available
on request from:
Stephen Walsh
CarrAmerica Realty Corporation
1850 K Street, NW, Suite 500
Washington, D.C. 20006
(Telephone) 202-729-1764
(e-mail) [email protected]
----------------------
CarrAmerica owns, develops and operates office properties in 14 markets
throughout the United States. The Company is committed to becoming America's
leading office workplace company by meeting the rapidly changing needs of its
customers with superior service, a large portfolio of quality office properties,
extraordinary development capabilities and land positions. CarrAmerica is a
leading office innovator with interests in and strategic relationships with HQ
Global Workplaces, a global leader in executive office suites, Broadband Office,
Inc., a leading global provider of network-based applications and
communications, Internet and e-business solutions and DukeSolutions, a Duke
Energy subsidiary providing comprehensive energy management programs.
Currently, CarrAmerica and its affiliates own, directly or through joint
ventures, interests in a portfolio of 284 operating office properties and have
17 office buildings under development in seven key growth markets. CarrAmerica's
markets include Atlanta, Austin, Chicago, Dallas, Denver, Los Angeles/Orange
County, Phoenix, Portland, Salt Lake City, San Diego, San Francisco Bay Area,
Seattle, South Florida and metropolitan Washington, D.C. For additional
information on CarrAmerica, including space availability, visit our web site at
www.carramerica.com.
Certain statements in this release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance,
achievements or transactions of the Company and its affiliates or industry
results to be materially different from any future results, performance,
achievements or transactions expressed or implied by such forward-looking
statements. Such factors include, among others, the following: national and
local economic, business and real estate conditions that will, among other
things, affect demand for office properties, availability and creditworthiness
of tenants, the level of lease rents and the availability of financing for both
tenants and the Company, adverse changes in the real estate markets including,
among other things, competition with other companies, risks of real estate
acquisition and development (including the failure of pending acquisitions to
close and pending developments to be completed on time and within budget),
actions, strategies and performance of affiliates or joint ventures that the
Company may not control, governmental actions and initiatives, and
environmental/safety requirements.
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<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
--------------------------------------------------------------------------------
(In thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
<S> <C> <C>
Assets
------
Rental Property:
Land $ 658,308 $ 674,390
Buildings 1,901,740 2,082,533
Tenant Improvements 308,626 304,983
Furniture, fixtures and equipment 5,990 5,916
---------- ----------
2,874,664 3,067,822
Less - accumulated depreciation (368,138) (323,455)
---------- ----------
Net rental property 2,506,526 2,744,367
Land held for future development 61,979 104,050
Construction-in-progress 79,169 116,013
Cash and cash equivalents - unrestricted 20,435 51,886
Cash and cash equivalents - restricted 16,403 12,475
Accounts and notes receivable 41,417 34,734
Investments 240,562 67,143
Accrued straight-line rents 53,459 47,764
Tenant leasing costs, net 51,765 58,848
Deferred financing costs, net 12,216 15,621
Prepaid expenses and other assets, net 28,209 18,503
Net assets of discontinued operations --- 207,668
---------- ----------
$3,112,140 $3,479,072
========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Mortgages and notes payable $1,215,710 $1,603,371
Accounts payable and accrued expenses 103,346 68,643
Rent received in advance and security deposits 27,733 27,757
---------- ----------
1,346,789 1,699,771
---------- ----------
Minority interest 90,455 92,586
Stockholders' equity:
Preferred stock 93 95
Common stock 657 668
Additional paid in capital 1,778,991 1,816,990
Cumulative dividends paid in excess of net income (104,845) (131,038)
---------- ----------
1,674,896 1,686,715
---------- ----------
$3,112,140 $3,479,072
========== ==========
</TABLE>
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<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
--------------------------------------------------------------------------------
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
<S> <C> <C> <C> <C>
2000 1999 2000 1999
-------- -------- -------- --------
Revenues: (unaudited) (unaudited)
Rental income (1):
Minimum base rent $112,302 $107,621 $341,485 $311,934
Recoveries from tenants 15,389 14,530 49,728 42,501
Parking and other tenant charges 3,999 6,160 16,229 14,572
-------- -------- -------- --------
Total rental revenue 131,690 128,311 407,442 369,007
-------- -------- -------- --------
Real estate service income 7,667 4,202 17,920 13,049
-------- -------- -------- --------
Total operating revenues 139,357 132,513 425,362 382,056
-------- -------- -------- --------
Operating expenses:
Property expenses:
Operating expenses 29,750 30,862 93,962 90,974
Real estate taxes 10,028 10,887 34,546 33,750
Interest expense 24,772 23,431 76,777 64,592
General and administrative 12,282 10,596 34,055 28,888
Depreciation and amortization 31,847 33,655 99,166 88,267
-------- -------- -------- --------
Total operating expenses 108,679 109,431 338,506 306,471
-------- -------- -------- --------
Real estate operating income 30,678 23,082 86,856 75,585
-------- -------- -------- --------
Other operating income:
Interest income 602 1,063 2,352 2,861
Equity in earnings of unconsolidated partnerships 2,195 1,160 4,911 3,791
Gain on settlement of treasury locks --- --- --- 4,489
-------- -------- -------- --------
Total other operating income 2,797 2,223 7,263 11,141
-------- -------- -------- --------
Income from continuing operations before gain on sale
of assets, income taxes, and minority interest 33,475 25,305 94,119 86,726
Income taxes 0 0 0 0
Minority interest (3,747) (4,354) (9,155) (14,604)
-------- -------- -------- --------
Income from continuing operations before gain on sale
of assets 29,728 20,951 84,964 72,122
Discontinued operations - (Loss) income from operations of
discontinued Executive Suites subsidiary (less applicable
income tax expense) --- (2,848) 456 (5,969)
Discontinued operations - Gain on sale of discontinued
operations (less applicable income tax expense of
$21,131) --- --- 31,852 ---
-------- -------- -------- --------
Net income before gain on sale of assets: 29,728 18,103 117,272 66,153
Gain on sale of assets, net of income taxes 20,182 21,284 27,923 49,815
-------- -------- -------- --------
Net income $ 49,910 $ 39,387 $145,195 $115,968
======== ======== ======== ========
Basic net income per common share:
Net income from continuing operations $ 0 .62 $ 0.50 $ 1.29 $ 1.40
Discontinued operations --- (0.04) 0.01 (0.09)
Gain on sale of discontinued operations --- 0.48 ---
-------- -------- -------- --------
Net income $ 0.62 $ 0.46 $ 1.78 $ 1.31
======== ======== ======== ========
Diluted net income per share:
Net income from continuing operations $ 0.60 $ 0.49 $ 1.28 $ 1.40
Discontinued operations --- (0.04) 0.01 (0.09)
Gain on sale of discontinued operations --- --- 0.47 ---
-------- -------- -------- --------
Net income $ 0.60 $ 0.45 $ 1.76 $ 1.31
========= ========= ========= =========
</TABLE>
NOTE: (1) Rental income includes $3,168 and $3,708 of accrued straight-line
rents for the three month periods ended September 30, 2000 and 1999,
respectively, and $9,634 and $9,362 of accrued straight-line rents for
the nine month periods ended September 30, 2000 and 1999,
respectively.
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<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Funds From Operations
--------------------------------------------------------------------------------
The National Association of Real Estate Investment Trusts (NAREIT) defines
funds from operations ("FFO") as net income (loss) (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from debt
restructuring or sales of property, plus depreciation and amortization of assets
uniquely significant to the real estate industry and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect FFO on the same basis.
NAREIT's definition for FFO excludes discontinued operations, however, the
Company has elected to calculate FFO from discontinued operations, the Company's
executive suites business. FFO for discontinued operations includes executive
suites earnings before depreciation, amortization and deferred taxes ("EBDADT").
The Company has restated the prior year to conform with the current year
presentation which excludes the add back of development losses associated with
the Company's executive suites business. The Company continues to exclude the
gain on settlement of treasury locks for the restated 1999 FFO.
<TABLE>
<CAPTION>
(In thousands, except per share amounts) Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net income from continuing operations before minority interest: $ 53,657 $ 46,589 $ 122,042 $ 136,541
Adjustments to derive funds from continuing operations: 31,739 33,140 97,561 86,916
Add: Depreciation and amortization
Deduct:
Minority interests' (non Unitholders) share
of depreciation, amortization and net income (248) (195) (722) (479)
(Gain) loss on settlement of treasury locks 0 0 0 (4,489)
Gain on sale of assets, net of income taxes (20,182) (21,284) (27,923) (49,815)
--------- --------- --------- ---------
FFO from continuing operations before allocations to the minority Unitholders 64,966 58,250 190,958 168,674
Less: FFO allocable to the minority Unitholders (4,000) (4,025) (12,230) (12,563)
--------- --------- --------- ---------
CarrAmerica Realty Corporation's FFO from continuing operations 60,966 54,225 178,728 156,111
Less: Preferred stock dividends (8,842) (8,932) (26,364) (26,516)
--------- --------- --------- ---------
CarrAmerica Realty Corporation's FFO from continuing operations attributable to
common shares $ 52,124 $ 45,293 $ 152,364 $ 129,595
--------- --------- --------- ---------
Discontinued operations 0 210 13,368 6,093
Gain on sale of discontinued operations 0 - 31,852 -
--------- --------- --------- ---------
CarrAmerica Realty Corporation's FFO attributable to common shares $ 52,124 $ 45,503 $ 197,854 $ 135,688
========= ========= ========= =========
Weighted average common shares outstanding:
Basic 65,987 66,795 66,603 68,208
Diluted 74,767 74,078 74,544 75,511
========= ========= ========= =========
Basic funds from operations per common share:
Funds from continuing operations $ 0.79 $ 0.68 $ 2.29 $ 1.90
Funds from discontinued operations - - 0.20 0.09
Funds from sale of discontinued operations - - 0.48 -
--------- --------- --------- ---------
Total funds from operations $ 0.79 $ 0.68 $ 2.97 $ 1.99
========= ========= ========= =========
Diluted funds from operations per share:
Funds from continuing operations $ 0.75 $ 0.67 $ 2.22 $ 1.90
Funds from discontinued operations - - 0.18 0.08
Funds from sale of discontinued operations - - 0.43 -
--------- --------- --------- ---------
Total funds from operations $ 0.75 $ 0.67 $ 2.83 $ 1.98
========= ========= ========= =========
CarrAmerica Realty Corporation
FFO from continuing operations attributable to common shares $ 52,124 $ 45,293 $ 152,364 $ 129,595
Series A Preferred share dividends 224 315 698 944
Minority interest from convertible partnership units 4,000 4,025 12,231 12,563
--------- --------- --------- ---------
Adjusted FFO from continuing operations attributable to common shares $ 56,348 $ 49,633 $ 165,293 $ 143,102
========= ========= ========= =========
Weighted average common shares outstanding - Basic 65,987 66,795 66,603 68,208
Weighted average conversion of Series A Preferred shares 480 680 500 680
Weighted average conversion of operating partnership units 6,480 6,498 6,480 6,503
Incremental options 1,820 105 961 117
--------- --------- --------- ---------
Adjusted weighted average common shares - Diluted 74,767 74,078 74,544 75,508
========= ========= ========= =========
</TABLE>
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