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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20543
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) August 17, 2000
Commission File No. 1-11706
CARRAMERICA REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 52-1796339
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
1850 K Street, N.W., Washington, D.C. 20006
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(Address or principal executive office) (Zip code)
Registrant's telephone number, including area code: (202) 729-1000
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CarrAmerica Realty Corporation
Form 8-K
Item 2: Disposition of Assets
On August 17, 2000, CarrAmerica Realty Corporation (the Company)
closed on a joint venture transaction with the New York State Teachers
Retirement System (NYSTRS). At closing, the Company and certain of its
affiliates, contributed properties to Carr Office Park, L.L.C. (the
Joint Venture), a newly formed joint venture, and NYSTERS contributed
cash of approximately $255.1 million. The Joint Venture encompasses
five premium-quality suburban office parks in four high-growth markets
(Chicago, Austin, Dallas, and Denver) 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. Additional property is
expected to be contributed to the Joint Venture upon obtaining certain
approvals to the assumption of an existing mortgage. A copy of the
press release relating to this transaction is attached as an exhibit
hereto.
The Company received approximately $249.6 million of cash and a 35%
interest in the Joint Venture in exchange for the properties. Upon
contribution of the additional property, the Company expects to
receive an additional $12.3 million of cash. The Company and certain
of its affiliates will provide development, property management, and
leasing services with respect to the contributed properties pursuant
to agreements with the Joint Venture.
The Company will use the cash received from the Joint Venture to repay
outstanding indebtedness and for other general corporate purposes.
Certain statements in this filing 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
that the Company may not control, governmental action
Item 7: (b) Pro forma financial information:
The following unaudited pro forma financial statements are based on the
consolidated financial statements of the Company. These statements
reflect how the consolidated balance sheet of the Company might have
appeared at June 30, 2000 if the contribution of properties to the
Joint Venture (exclusive of the possible contribution of additional
property) and related transactions had occurred at that date and how
the consolidated statements of continuing operations of the Company for
the six months ended June 30, 2000 and the year
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ended December 31, 1999 might have appeared if the contribution and
related transactions had been consummated at the beginning of each
period. These unaudited pro forma condensed financial statements are
not necessarily indicative of the results of operations or financial
position of the Company that would have occurred had the contribution
of properties and related transactions occurred at the beginning of the
periods presented or on the date indicated, nor are they necessarily
indicative of the future results of operations or financial position of
the Company.
These unaudited pro forma condensed financial statements should be read
in conjunction with the audited consolidated financial statements of
the Company included in its Form 10-K for the year ended December 31,
1999 and the unaudited consolidated financial statements of the Company
included in its Form 10-Q for the six months ended June 30, 2000. The
unaudited pro forma adjustments are based upon this financial
information and certain other assumptions included in the notes to the
unaudited pro forma condensed consolidated financial statements.
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CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet As Of June 30, 2000
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<TABLE>
<CAPTION>
Proforma Proforma
(In thousands) June 30, 2000 Adjustments June 30, 2000
---------------- -------------- ----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Assets
Rental property, net of accumulated depreciation $2,742,298 (261,476) 1 $2,480,822
Land held for development 96,863 (31,667) 1 65,196
Construction in progress 106,880 (23,616) 1 83,264
Cash and cash equivalents 52,799 - 52,799
Restricted cash and cash equivalents 12,797 - 12,797
Accounts and notes receivable 31,973 466 32,439
Investments 117,496 114,184 4 231,680
Accrued straight-line rents 53,712 (3,229) 1 50,483
Tenant leasing costs, net 63,644 (11,087) 1 52,557
Deferred financing costs, net 12,930 - 12,930
Prepaid expenses and other assets, net 26,971 - 26,971
---------------- -------------- ----------------
$3,318,363 (216,425) $3,101,938
================ ============== ================
Liabilities, Minority Interest, and Stockholders'
Equity
Liabilities:
Mortgages and notes payable $1,432,972 (249,597) 2 $1,183,375
Accounts payable and accrued expenses 77,065 9,640 5 86,705
Rent received in advance and security 30,853 - 30,853
deposits
---------------- -------------- ----------------
Total liabilities 1,540,890 (239,957) 1,300,933
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Minority interest 89,389 1,681 3 91,070
Stockholders' equity:
Preferred Stock 93 - 93
Common Stock 663 - 663
Additional paid in capital 1,802,621 - 1,802,621
Cumulative dividends in excess of net
income (115,293) 21,851 3 (93,442)
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Total stockholders' equity 1,688,084 21,851 1,709,935
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Commitments and contingencies
$3,318,363 (216,425) $3,101,938
================ ============== ================
See accompanying notes to condensed consolidated balance sheet.
</TABLE>
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NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
1. Eliminate book value of assets contributed to Joint Venture.
2. Record paydown of debt with proceeds from contribution of properties to
Joint Venture.
3. Record gain on contribution of properties (and minority interest therein),
net of estimated income taxes.
4. Record investment in Joint Venture.
5. Record income taxes payable on gain.
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CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statement of Continuing Operations for the Year
Ended December 31, 1999
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<TABLE>
<CAPTION>
Proforma
Year Year
(Amounts in thousands, except per share amounts) Ended Proforma Ended
December 31, 1999 Adjustments December 31, 1999
--------------------- -------------- --------------------
(unaudited)
<S> <C> <C> <C>
Revenues:
Rental income: $ 498,849 (36,557) 1 $ 462,292
Real estate service revenue 17,054 - 17,054
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Total operating revenues 515,903 (36,557) 479,346
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Operating expenses:
Property expenses:
Operating expenses 122,676 (8,309) 1 114,367
Real estate taxes 44,529 (3,179) 1 41,350
Interest expense 89,057 (14,733) 2 74,324
General and administrative 38,894 (857) 1 38,037
Depreciation and amortization 119,700 (13,050) 1 106,650
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Total operating expenses 414,856 (40,128) 374,728
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Real estate operating income 101,047 3,571 104,618
Other operating income:
Interest Income 3,936 (64) 1 3,872
Equity in earnings of
unconsolidated partnerships 5,167 3,929 3 9,096
Gain on treasury locks 4,489 - 4,489
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Total other operating income 13,592 3,865 17,457
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Income from continuing operations
before minority interest, income
taxes and gain on sale of assets 114,639 7,436 122,075
Minority Interest (17,599) 1,008 4 (16,591)
Income taxes (783) - (783)
Gain on sale of assets, net of income taxes 54,822 - 54,822
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Income from continuing operations $ 151,079 8,444 $ 159,523
===================== ============== ====================
Basic net income per common share
from continuing operations $ 1.71 0.12 $ 1.83
Diluted net income per common share
from continuing operations $ 1.71 0.12 $ 1.83
Basic weighted average shares outstanding 67,858 67,858 67,858
Diluted weighted average shares outstanding 67,982 67,982 67,982
</TABLE>
See accompanying notes to condensed consolidated statements of continuing
operations.
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CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statement of Continuing Operations for the Six
Months Ended June 30, 2000
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<TABLE>
<CAPTION>
Proforma
Six Months Six Months
(Amounts in thousands, except per share amounts) Ended Proforma Ended
June 30, 2000 Adjustments June 30, 2000
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(unaudited) (unaudited)
<S> <C> <C> <C>
Revenues:
Rental income: $ 275,752 (26,213) 1 $ 249,539
Real estate service revenue 10,253 - 10,253
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Total operating revenues 286,005 (26,213) 259,792
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Operating expenses:
Property expenses:
Operating expenses 64,212 (5,815) 1 58,397
Real estate taxes 24,518 (2,862) 1 21,656
Interest expense 52,005 (9,557) 2 42,448
General and administrative 21,773 (436) 1 21,337
Depreciation and amortization 67,319 (7,844) 1 59,475
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Total operating expenses 229,827 (26,514) 203,313
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Real estate operating income 56,178 301 56,479
Other operating income:
Interest Income 1,750 (51) 1 1,699
Equity in earnings of
unconsolidated partnerships 2,716 3,259 3 5,975
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Total other operating income 4,466 3,208 7,674
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Income from continuing operations
before minority interest and gain
on sale of assets 60,644 3,509 64,153
Minority Interest (5,408) 494 4 (4,914)
Gain on sale of assets, net of income taxes 7,741 - 7,741
-------------------- -------------- --------------------
Income from continuing operations $ 62,977 4,003 $ 66,980
==================== ============== ====================
Basic net income per common share
from continuing operations $ 0.68 0.06 $ 0.74
Diluted net income per common share
from continuing operations $ 0.68 0.06 $ 0.74
Basic weighted average shares outstanding 66,912 66,912 66,912
Diluted weighted average shares outstanding 67,307 67,307 67,307
</TABLE>
See accompanying notes to condensed consolidated statements of continuing
operations.
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NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS
1. Eliminate revenues, expenses and minority interest in earnings of properties
contributed to Joint Venture.
2. Eliminate net interest expense associated with debt paid down with proceeds
from contribution of properties to Joint Venture.
3. Record equity in net earnings of the Joint Venture.
4. Record minority interest.
5. The pro forma condensed consolidated statements of continuing operations do
not include the gain which will be recognized on the contribution of
properties to the Joint Venture or related income taxes. The gain is
expected to approximate $33,172,000 including minority interest, net of
related income taxes of approximately $9,640,000.
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Item 7: (c) Exhibits:
10.1 Amended and Restated Limited Liability Company Agreement of
Carr Office Park, L.L.C., dated as of August 15, 2000
10.2 Contribution and Purchase/Sale Agreement, dated as of August
15, 2000, Among CarrAmerica Realty Corporation, CarrAmerica
Realty L.P., CarrAmerica Development, Inc., Carr Development
& Construction, L.P., Carr Parkway North I Corporation and
New York State Teachers' Retirement System
10.3 Supplemental Agreement (Amending and Supplementing the
Contribution Agreement and the LLC Agreement), dated as of
August 15, 2000, Among CarrAmerica Realty Corporation,
CarrAmerica Realty L.P., CarrAmerica Development, Inc., Carr
Development & Construction, L.P., Carr Parkway North I
Corporation and New York State Teachers' Retirement System
99.1 Press Release dated August 17, 2000
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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 thereunto duly authorized.
Date: September 1, 2000
CARRAMERICA REALTY CORPORATION
By: /s/ Stephen E. Riffee
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Stephen E. Riffee
Principal Accounting Officer
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