SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED June 30, 2001
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COMMISSION FILE NO. 1-11706
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CARRAMERICA REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 52-1796339
------------------------------------ ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification 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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N/A
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(Former name, former address and former fiscal year, if changed since last
report)
Number of shares outstanding of each of the registrant's
classes of common stock, as of August 3, 2001:
Common Stock, par value $.01 per share: 62,563,351 shares
----------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve (12) months (or such shorter period that the Registrant was
required to file such report) and (2) has been subject to such filing
requirements for the past ninety (90) days.
YES X NO
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Index
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Part I: Financial Information Page
----------------------------- ----
Item 1. Financial Statements
Consolidated balance sheets of CarrAmerica Realty
Corporation and subsidiaries as of June 30, 2001
(unaudited) and December 31, 2000....................... 4
Consolidated statements of operations of CarrAmerica
Realty Corporation and subsidiaries for the three
months and six months ended June 30, 2001 and 2000
(unaudited)............................................. 5 to 6
Consolidated statements of cash flows of CarrAmerica
Realty Corporation and subsidiaries for the six months
ended June 30, 2001 and 2000 (unaudited)................ 7
Notes to consolidated financial statements (unaudited).. 8 to 13
Independent Accountants' Review Report.................. 14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 15 to 20
Item 3. Quantitative and Qualitative Disclosures About
Market Risk............................................. 21
Part II: Other Information
--------------------------
Item 4. Submission of Matters to a Vote of Security Holders..... 22
Item 6. Exhibits and Reports on Form 8-K........................ 22
2
Part I
------
Item 1. Financial Information
---------------------
The information furnished in our accompanying consolidated balance sheets,
consolidated statements of operations and consolidated statements of cash flows
reflect all adjustments which are, in our opinion, necessary for a fair
presentation of the aforementioned financial statements for the interim periods.
The financial statements should be read in conjunction with the notes to the
financial statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations in our December 31, 2000 Annual Report on
Form 10-K. The results of operations for the six months ended June 30, 2001 are
not necessarily indicative of the operating results to be expected for the full
year.
3
CARRAMERICA REALTY CORPORTATION AND SUBSIDIARIES
Consolidated Balance Sheets As Of June 30, 2001 and December 31, 2000
--------------------------------------------------------------------------------
(in thousands, except share amounts)
June 30, December 31,
2001 2000
----------------- -----------------
(unaudited)
Assets
------
Rental property:
Land $ 644,799 $ 644,326
Buildings 1,825,629 1,836,214
Tenant improvements 338,606 325,936
Furniture, fixtures and equipment 3,521 6,844
----------------- -----------------
2,812,555 2,813,320
Less: Accumulated depreciation (422,617) (381,260)
----------------- -----------------
Total rental property 2,389,938 2,432,060
Land held for development or sale 44,599 47,984
Construction in progress 32,549 48,300
Cash and cash equivalents 14,482 24,704
Restricted deposits 7,288 39,482
Accounts and notes receivable 32,374 70,693
Investments in unconsolidated entities 153,468 269,193
Accrued straight-line rents 59,189 54,960
Tenant leasing costs, net 52,030 54,522
Deferred financing costs, net 9,760 11,311
Prepaid expenses and other assets, net 25,495 19,632
----------------- -----------------
$ 2,821,172 $ 3,072,841
================= =================
Liabilities, Minority Interest, and Stockholders' Equity
--------------------------------------------------------
Liabilities:
Mortgages and notes payable $ 1,109,778 $ 1,211,158
Accounts payable and accrued expenses 64,778 96,147
Rents received in advance and security deposits 29,892 29,143
----------------- -----------------
Total liabilities 1,204,448 1,336,448
Minority interest 85,993 89,687
Stockholders' equity:
Preferred stock, $.01 par value, authorized 35,000,000 shares:
Series A Cumulative Convertible Redeemable Preferred Stock,
80,000 and 480,000 shares issued and outstanding at June 30,
2001 and December 31, 2000, respectively, with an aggregate
liquidation preference of $2,000 and $12,000 respectively. 1 5
Series B, C, and D Cumulative Redeemable Preferred Stock,
8,800,000 shares issued and outstanding with an aggregate
liquidation preference of $400,000. 88 88
Common Stock, $.01 par value, authorized 180,000,000 shares
issued and outstanding 62,082,448 shares at June 30,
2001 and 65,017,623 shares at December 31, 2000. 621 650
Additional paid-in capital 1,653,396 1,755,985
Cumulative dividends in excess of net income (123,375) (110,022)
----------------- -----------------
Total stockholders' equity 1,530,731 1,646,706
----------------- -----------------
Commitments and contingencies
$ 2,821,172 $ 3,072,841
================= =================
See accompanying notes to consolidated financial statements.
4
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three Months Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------
(Unaudited and in thousands, except per share amounts)
2001 2000
-------------- --------------
Operating revenues:
Rental revenue:
Minimum base rent $ 105,802 $ 115,303
Recoveries from tenants 14,683 17,505
Parking and other tenant charges 3,338 6,319
-------------- --------------
Total rental revenue 123,823 139,127
Real estate service revenue 9,703 5,312
-------------- --------------
Total operating revenues 133,526 144,439
-------------- --------------
Operating expenses:
Property expenses:
Operating expenses 28,433 31,930
Real estate taxes 10,050 12,572
Interest expense 21,136 25,115
General and administrative 11,939 12,001
Depreciation and amortization 30,820 35,170
-------------- --------------
Total operating expenses 102,378 116,788
-------------- --------------
Real estate operating income 31,148 27,651
-------------- --------------
Other income:
Interest income 1,023 873
Equity in earnings of unconsolidated entities 3,674 1,267
-------------- --------------
Total other income 4,697 2,140
-------------- --------------
Income from continuing operations before income taxes, minority
interest, and (loss) gain on sale of assets and other
provisions, net 35,845 29,791
Income taxes (187) -
Minority interest (3,076) (2,353)
(Loss) gain on sale of assets and other provisions, net (22) 2,387
-------------- --------------
Income from continuing operations 32,560 29,825
Discontinued operations - Income from executive suites operations
(net of applicable income tax expense of $1,083 ) - 1,836
Discontinued operations - Gain on sale of discontinued operations
(net of applicable income tax expense of $21,131) - 31,852
-------------- --------------
Net income $ 32,560 $ 63,513
============== ==============
Basic net income per common share:
Income from continuing operations $ 0.39 $ 0.31
Discontinued operations - 0.03
Gain on sale of discontinued operations - 0.48
-------------- --------------
Net income $ 0.39 $ 0.82
============== ==============
Diluted net income per common share:
Income from continuing operations $ 0.38 $ 0.31
Discontinued operations - 0.03
Gain on sale of discontinued operations - 0.43
-------------- --------------
Net income $ 0.38 $ 0.77
============== ==============
See accompanying notes to consolidated financial statements.
5
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Six Months Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------
2001 2000
-------------- --------------
Operating revenues:
Rental revenue:
Minimum base rent $ 212,012 $ 229,183
Recoveries from tenants 28,724 34,339
Parking and other tenant charges 6,876 12,230
-------------- --------------
Total rental revenue 247,612 275,752
Real estate service revenue 19,840 10,253
-------------- --------------
Total operating revenues 267,452 286,005
-------------- --------------
Operating expenses:
Property expenses:
Operating expenses 60,474 64,212
Real estate taxes 19,617 24,518
Interest expense 41,996 52,005
General and administrative 26,340 21,773
Depreciation and amortization 61,645 67,319
-------------- --------------
Total operating expenses 210,072 229,827
-------------- --------------
Real estate operating income 57,380 56,178
-------------- --------------
Other income:
Interest income 2,127 1,750
Equity in earnings of unconsolidated entities 7,028 2,716
-------------- --------------
Total other income 9,155 4,466
-------------- --------------
Income from continuing operations before income taxes, minority
interest, and gain on sale of assets and other
provisions, net 66,535 60,644
Income taxes (234) -
Minority interest (4,529) (5,408)
Gain on sale of assets and other provisions, net 1,054 7,741
-------------- --------------
Income from continuing operations 62,826 62,977
Discontinued operations - Income from executive suites operations
(net of applicable income tax expense of $1,300 ) - 456
Discontinued operations - Gain on sale of discontinued operations
(net of applicable income tax expense of $21,131) - 31,852
-------------- --------------
Net income $ 62,826 $ 95,285
============== ==============
Basic net income per common share:
Income from continuing operations $ 0.73 $ 0.68
Discontinued operations - -
Gain on sale of discontinued operations - 0.48
-------------- --------------
Net income $ 0.73 $ 1.16
============== ==============
Diluted net income per common share:
Income from continuing operations $ 0.71 $ 0.68
Discontinued operations - -
Gain on sale of discontinued operations - 0.44
-------------- --------------
Net income $ 0.71 $ 1.12
============== ==============
See accompanying notes to consolidated financial statements.
6
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------
(Unaudited and in thousands)
2001 2000
---------------- ----------------
Cash flows from operating activities:
Net income $ 62,826 $ 95,285
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 61,645 67,370
Minority interest 4,529 5,408
Equity in earnings of unconsolidated entities (7,028) (2,716)
Gain on sale of assets and other provisions, net (1,054) (7,741)
Income and gain on sale of discontinued operations - (32,308)
Provision for uncollectible accounts 4,703 1,549
Stock based compensation 1,469 1,553
Other 264 (1,140)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 16,140 (5,689)
Increase in accrued straight-line rents (5,417) (6,466)
Additions to tenant leasing costs (5,519) (9,059)
Increase in prepaid expenses and other assets (7,866) (9,876)
Decrease in accounts payable and accrued expenses (32,221) (5,080)
Increase in rent received in advance and security deposits 1,279 3,095
---------------- ----------------
Total adjustments 30,924 (1,100)
---------------- ----------------
Net cash provided by operating activities 93,750 94,185
---------------- ----------------
Cash flows from investing activities:
Acquisition and development of rental property (16,207) (46,825)
Additions to land held for development or sale (34,840) (11,071)
Additions to construction in progress (19,215) (33,493)
Acquisition and development of executive suites assets - (6,678)
Payments on notes receivable 16,539 139
Distributions from unconsolidated entities 89,616 3,568
Investments in unconsolidated entities (10,440) (9,875)
Acquisition of minority interest (3,289) (1,478)
Decrease (increase) in restricted deposits 32,194 (322)
Proceeds from the sale of discontinued operations - 377,310
Proceeds from sales of properties 100,474 62,883
---------------- ----------------
Net cash provided by investing activities 154,832 334,158
---------------- ----------------
Cash flows from financing activities:
Repurchase of common stock (119,210) (28,450)
Exercises of stock options 16,082 9,945
Net repayments on unsecured credit facility (including $140,500 related to
discontinued operations in 2000) (86,000) (317,500)
Net repayments of mortgages payable (15,502) (7,849)
Proceeds from mortgages 26,628 -
Dividends and distributions to minority interests (80,802) (85,524)
Contributions from minority interests - 1,948
---------------- ----------------
Net cash used by financing activities (258,804) (427,430)
---------------- ----------------
(Decrease) increase in unrestricted cash and cash equivalents (10,222) 913
Unrestricted cash and cash equivalents, beginning of the period 24,704 51,886
---------------- ----------------
Unrestricted cash and cash equivalents, end of the period $ 14,482 $ 52,799
================ ================
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $3,837 and $7,229
for the six months ended June 30, 2001 and 2000, respectively) $ 49,207 $ 60,106
================ ================
See accompanying notes to consolidated financial statements.
7
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
(1) Description of Business and Summary of Significant Accounting Policies
(a) Business
We are a fully integrated, self-administered and self-managed publicly
traded real estate investment trust ("REIT"), organized under the laws
of Maryland. We focus on the acquisition, development, ownership and
operation of office properties, located primarily in selected suburban
markets across the United States.
(b) Basis of Presentation
Our accounts and those of our majority-owned/controlled subsidiaries
and affiliates are consolidated in the financial statements. We use
the equity or cost methods, as appropriate in the circumstances, to
account for our investments in and our share of the earnings or losses
of unconsolidated entities. These entities are not majority owned or
controlled by us.
Management has made estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses in the financial
statements, and the disclosure of contingent assets and liabilities.
Estimates are required in order for us to prepare our financial
statements in conformity with accounting principles generally accepted
in the United States of America. Significant estimates are required
in a number of areas, including the evaluation of impairment of long-
lived assets, determination of useful lives of assets subject to
depreciation or amortization and evaluation of the collectibility of
accounts and notes receivable. Actual results could differ from these
estimates.
(c) Interim Financial Statements
The financial statements reflect all adjustments, which are, in our
opinion, necessary to reflect a fair presentation of the results for
the interim periods, and all adjustments are of a normal, recurring
nature.
(d) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133 "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position
and measure those instruments at fair value. We adopted this
statement as of January 1, 2001 and the adoption had no effect on the
financial statements. We had no derivative instruments as of June 30,
2001.
(e) Earnings Per Share
The following table sets forth information relating to the
computations of our basic and diluted earnings per share for income
from continuing operations:
8
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2001 June 30, 2000
---------------------------------------------- -----------------------------------------------
(In thousands, Income Shares Per Share Income Shares Per Share
except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
--------------- --------------- ----------- --------------- --------------- ------------
Basic EPS $ 23,815 61,840 $ 0.39 $ 21,080 66,856 $ 0.31
=========== ============
Effect of Dilutive Securities
Stock options - 1,200 - 878
--------------- --------------- ----------- --------------- --------------- ------------
Diluted EPS $ 23,815 63,040 $ 0.38 $ 21,080 67,734 $ 0.31
=============== =============== =========== =============== =============== ============
Income from continuing operations has been reduced by preferred stock
dividends of approximately $8,745,000 and approximately $8,745,000 for
the three months ended June 30, 2001 and 2000, respectively.
Six Months Ended Six Months Ended
June 30, 2001 June 30, 2000
---------------------------------------------- -----------------------------------------------
(In thousands, Income Shares Per Share Income Shares Per Share
except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
--------------- --------------- ----------- --------------- --------------- ------------
Basic EPS $ 45,432 62,509 $ 0.73 $ 45,455 66,912 $ 0.68
=========== ============
Effect of Dilutive Securities
Stock options - 1,340 - 395
Convertible partnership units 4,304 6,068 - -
--------------- --------------- ----------- --------------- --------------- ------------
Diluted EPS $ 49,736 69,917 $ 0.71 $ 45,455 67,307 $ 0.68
=============== =============== =========== =============== =============== ============
Income from continuing operations has been reduced by preferred stock
dividends of approximately $17,394,000 and approximately $17,522,000
for the six months ended June 30, 2001 and 2000, respectively.
The effects of convertible units in CarrAmerica Realty, L.P. and Carr
Realty, L.P. and Series A Convertible Preferred Stock are not included
in the computation of diluted earnings per share for the periods in
which their effect is antidilutive.
(f) Reclassifications
Certain reclassifications of prior period amounts have been made to
conform to the current period's presentation.
(3) Discontinued Operations
On January 20, 2000, we, along with HQ Global Workplaces, Inc. (HQ Global),
VANTAS Incorporated (VANTAS) and FrontLine Capital Group, entered into
several agreements that contemplated several transactions including (i) the
merger of VANTAS with and into HQ Global, (ii) the acquisition by FrontLine
Capital Group of shares of HQ Global common stock from us and other
stockholders of HQ Global, and (iii) the acquisition by VANTAS of our debt
and equity interest in OmniOffices (UK) Limited and OmniOffices LUX 1929
Holding Company S.A. On June 1, 2000, we consummated the transactions.
As part of the HQ Global/VANTAS transactions, we received put rights with
respect to our continuing interest in HQ Global. These rights can be
exercised at specified times at our option if HQ Global has not completed
an initial public offering. A portion of the put is exercisable in late
2001, with the balance exercisable in June 2002. Payment for our HQ Global
stock will be based on the fair market value of our investment and can be
made either in cash, a short-term note (in case of the 2001 put right) or
delivery of common stock of FrontLine Capital Group, a NASDAQ-listed
company and the majority shareholder of HQ Global.
9
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
(4) Gain on Sale of Assets and Other Provisions, Net
We dispose of assets that are inconsistent with our long-term strategic or
return objectives or where market conditions for sale are favorable.
During the three months ended June 30, 2001, we disposed of a parcel of
land held for development. We recognized a loss of $22,000 on this
transaction. During the three months ended June 30, 2000, we disposed of
three operating properties. We recognized a gain of $2.4 million, net of
taxes of $0.9 million on these properties.
During the six months ended June 30, 2001, we disposed of seven operating
properties, one property under development and two parcels of land held for
development. We recognized a gain of $2.0 million, net of taxes of $2.0
million. We also recognized an impairment loss of $0.9 million on a parcel
of land held for development during the six months ended June 30, 2001.
During the six months ended June 30, 2000, we disposed of five operating
properties. We recognized a gain of $7.7 million, net of taxes of $1.3
million on these properties.
(5) Segment Information
Our reportable operating segments are real estate property operations and
development operations. Other business activities and operating segments
that are not reportable are included in other operations. The real estate
property operations segment includes the operation and management of rental
properties. The development operations segment includes the development of
new rental properties for us and for unaffiliated companies. Our
reportable segments offer different products and services and are managed
separately because each requires different business strategies and
management expertise.
Our operating segments' performance is measured using funds from
operations. Funds from operations is defined by the National Association
of Real Estate Investment Trusts (NAREIT) as follows:
. Net income (loss) - computed in accordance with generally accepted
accounting principles (GAAP);
. Less gains (or plus losses) from sales of depreciable operating
properties and items that are classified as extraordinary items
under GAAP;
. Plus depreciation and amortization of assets uniquely significant to
the real estate industry;
. Plus or minus adjustments for unconsolidated partnerships and joint
ventures (to reflect funds from operations on the same basis).
Funds from operations does not represent net income or cash flow generated
from operating activities in accordance with GAAP. As such, it should not
be considered an alternative to net income as an indication of our
performance or to cash flows as a measure of our liquidity or our ability
to make distributions.
Operating results of our reportable segments and our other operations for
the three and six months ended June 30, 2001 and 2000 are summarized and
reconciled to net income for the applicable period as follows:
10
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
For the three months ended June 30, 2001
-------------------------------------------------------
Real Estate
Property Development Other
(In millions) Operations Operations Operations Total
------------ ------------ ------------- ------------
Operating revenue $ 123.8 4.6 5.1 $ 133.5
Segment expense 38.4 1.1 10.8 50.3
------------ ------------ ------------- ------------
Net segment revenue (expense) 85.4 3.5 (5.7) 83.2
Interest expense 11.3 - 9.8 21.1
Other income (expense), net 5.4 0.1 (0.4) 5.1
------------ ------------ ------------- ------------
Funds from operations $ 79.5 3.6 (15.9) 67.2
============ ============ =============
Depreciation and amortization (31.6)
------------
Income from continuing operations before
minority interest and loss on sale of
assets and other provisions, net 35.6
Minority interest and loss on sale of
assets and other provisions, net (3.1)
------------
Net income $ 32.5
============
For the three months ended June 30, 2000
-------------------------------------------------------
Real Estate
Property Development Other
(In millions) Operations Operations Operations Total
------------ ------------- ------------ ------------
Operating revenue $ 139.1 2.1 3.2 $ 144.4
Segment expense 44.5 1.4 10.6 56.5
------------ ------------- ------------ ------------
Net segment revenue (expense) 94.6 0.7 (7.4) 87.9
Interest expense 12.1 - 13.0 25.1
Other income (expense), net 3.9 - (2.7) 1.2
------------ ------------- ------------ ------------
Funds from operations $ 86.4 0.7 (23.1) 64.0
============ ============= ============
Depreciation and amortization (34.3)
------------
Income from continuing operations before
minority interest and gain on sale of
assets and other provisions, net 29.7
Minority interest and gain on sale of
assets and other provisions, net -
Discontinued operations, net of applicable
income tax expense 1.9
Gain on sale of discontinued operations,
net of applicable income tax expense 31.9
------------
Net income $ 63.5
============
11
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
For the six months ended June 30, 2001
-------------------------------------------------------
Real Estate
Property Development Other
(In millions) Operations Operations Operations Total
------------ ------------- ------------ ------------
Operating revenue $ 247.6 10.8 9.0 $ 267.4
Segment expense 80.1 2.6 23.7 106.4
------------ ------------- ------------ ------------
Net segment revenue (expense) 167.5 8.2 (14.7) 161.0
Interest expense 22.4 - 19.6 42.0
Other income (expense), net 12.4 0.3 (1.4) 11.3
------------ ------------- ------------ ------------
Funds from operations $ 157.5 8.5 (35.7) 130.3
============ ============= ============
Depreciation and amortization (64.0)
------------
Income from continuing operations before
minority interest and gain on sale of
assets and other provisions, net 66.3
Minority interest and gain on sale of
assets and other provisions, net (3.5)
------------
Net income $ 62.8
============
For the six months ended June 30, 2000
-------------------------------------------------------
Real Estate
Property Development Other
(In millions) Operations Operations Operations Total
------------ ------------- ------------ ------------
Operating revenue $ 275.7 4.0 6.3 $ 286.0
Segment expense 88.7 2.4 19.4 110.5
------------ ------------- ------------ ------------
Net segment revenue (expense) 187.0 1.6 (13.1) 175.5
Interest expense 24.9 - 27.1 52.0
Other income (expense), net 5.1 - (2.6) 2.5
------------ ------------- ------------ ------------
Funds from operations $ 167.2 1.6 (42.8) 126.0
============ ============= ============
Depreciation and amortization (65.4)
------------
Income from continuing operations before
minority interest and gain on sale of
assets and other provisions, net 60.6
Minority interest and gain on sale of
assets and other provisions, net 2.3
Discontinued operations, net of applicable
income tax expense 0.5
Gain on sale of discontinued operations,
net of applicable income tax expense 31.9
------------
Net income $ 95.3
============
(6) Supplemental Cash Flow Information
In April 2001, we exercised an option under a loan agreement to acquire two
office buildings and related land located in the San Francisco Bay area.
For financial reporting purposes, we had classified the loan as an
investment in an unconsolidated entity and accounted for it using the
equity method. The investment, which had a carrying value of approximately
$50.3 million at the date the option was exercised, was reclassified to
rental property in connection with this transaction.
12
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
On June 29, 2001, we contributed land subject to a note payable of
approximately $26.0 million to a joint venture in exchange for a 30%
ownership interest. Our investment in the joint venture amounted to $7.3
million, the net book value of the asset and liability contributed.
In the second quarter of 2001, 400,000 shares of our Series A Cumulative
Convertible Redeemable Preferred Stock were converted to shares of common
stock.
13
Independent Accountants' Review Report
--------------------------------------
The Board of Directors and Stockholders
CarrAmerica Realty Corporation:
We have reviewed the condensed consolidated balance sheet of CarrAmerica Realty
Corporation and subsidiaries as of June 30, 2001, the related condensed
consolidated statements of operations for the three-month and six-month periods
ended June 30, 2001 and 2000, and the related condensed consolidated statements
of cash flows for the six-month periods ended June 30, 2001 and 2000. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above for
them to be in conformity with accounting principles generally accepted in the
United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
CarrAmerica Realty Corporation and subsidiaries as of December 31, 2000, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
February 2, 2001, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 2000, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/s/KPMG LLP
Washington, D.C.
July 26, 2001
14
Management's Discussion and Analysis
--------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The discussion that follows is based primarily on our consolidated
financial statements as of June 30, 2001 and December 31, 2000 and for the three
months and six months ended June 30, 2001 and 2000 and should be read along with
the consolidated financial statements and related notes. The ability to compare
one period to another may be significantly affected by acquisitions completed,
development properties placed in service and dispositions made during those
periods.
The discussion and analysis of operating results focuses on our segments as
management believes that segment analysis provides the most effective means of
understanding the business. Our reportable operating segments are real estate
property operations and development operations. Other business activities and
operations, which are not reported separately, are included in other operations.
Executive office suites operations are presented as discontinued operations in
our financial statements.
Our operating segments' performance is measured using funds from operations.
Funds from operations is defined by the National Association of Real Estate
Investment Trusts (NAREIT) as follows:
. Net income (loss) - computed in accordance with generally accepted accounting
principles (GAAP);
. Less gains (or plus losses) from sales of depreciable operating properties
and items that are classified as extraordinary items under GAAP;
. Plus depreciation and amortization of assets uniquely significant to the real
estate industry;
. Plus or minus adjustments for unconsolidated partnerships and joint ventures
(to reflect funds from operations on the same basis).
Funds from operations does not represent net income or cash flow generated from
operating activities in accordance with GAAP. As such, it should not be
considered an alternative to net income as an indication of our performance or
to cash flows as a measure of our liquidity or our ability to make
distributions.
RESULTS OF OPERATIONS
Real Estate Property Operations
Operating results of real estate property operations are summarized as
follows:
=======================================================================================================================
For the three months ended Variance For the six months ended Variance
--------------- ---------------
June 30, 2001 vs. June 30, 2001 vs.
-------------------------- ------------------------
(in millions) 2001 2000 2000 2001 2000 2000
---- ---- ---- ---- ---- ----
Operating revenue $ 123.8 $ 139.1 $ (15.3) $ 247.6 $ 275.7 $ (28.1)
Segment expense 38.4 44.5 (6.1) 80.1 88.7 (8.6)
Interest expense 11.3 12.1 (0.8) 22.4 24.9 (2.5)
Other income, net 5.4 3.9 1.5 12.4 5.1 7.3
=======================================================================================================================
Real estate operating revenues decreased $15.3 million (11.0%) for the
three months ended June 30, 2001 as compared to 2000. This decrease resulted
from the dispositions of interests in properties, including the properties
contributed to Carr Office Park, L.L.C. In August 2000, we contributed
properties to Carr Office Park, L.L.C., a joint venture in which we have a 35%
interest. The decrease in revenues was partially offset by development
properties being placed in service and "same store" rental growth. Same store
rental revenues grew by approximately 4.0% (approximately $4.2 million). This
increase was due primarily to an increase in average rental rates in properties
in the Northern and Southern California markets.
Real estate operating revenues decreased $28.1 million (10.2%) for the six
months ended June 30, 2001 as compared to 2000. This decrease was attributable
to the factors mentioned above. Same store rental revenues grew by
approximately 4.0% (approximately $8.2 million). This increase was due
primarily to an increase in average rental rates in properties in the Northern
California market.
Real estate operating expenses decreased $6.1 million (13.7%) for the
second quarter of 2001 as compared to the same period in 2000. This decrease
was due primarily to the dispositions of interests in properties, including the
properties
15
Management's Discussion and Analysis
--------------------------------------------------------------------------------
contributed to Carr Office Park, L.L.C., partially offset by an increase in
same store operating expenses of approximately $1.5 million (4.7%).
Real estate operating expenses decreased $8.6 million (9.7%) for the first
six months 2001 as compared to the same period in 2000. This decrease was also
due primarily to the dispositions of interests in properties, including the
properties contributed to Carr Office Park, L.L.C., partially offset by an
increase in same store operating expenses of approximately $4.4 million (7.1%).
The increase in expenses includes an increase in the provision for uncollectible
accounts of approximately $3.2 million due to tenant bankruptcies and collection
issues.
Real estate interest expense decreased $0.8 million (6.6%) in the second
quarter of 2001 as compared to the same period in 2000. This decrease was
principally the result of the retirement of mortgages following certain property
dispositions.
Real estate interest expense decreased $2.5 million (10.0%) for the first
half of 2001 as compared to the first half of 2000. This decrease was
principally the result of the retirement of mortgages following certain property
dispositions.
Real estate other income increased $1.5 million (38.5%) for the three
months ended June 30, 2001 as compared to the three months ended June 30, 2000.
This increase was primarily the result of equity in earnings of unconsolidated
entities (excluding depreciation), primarily from the investment in Carr Office
Park, L.L.C. For the six months ended June 30, 2001, real estate other income
increased $7.3 million (143.1%) for the same reason.
During the first half of 2001, demand for office space in each of our
markets, except for downtown Washington, D.C., declined in response to an
overall decline in these markets. Our results of operations for the second
quarter of 2001 were not adversely impacted by the increased market vacancy
levels, for several reasons. First, notwithstanding increased vacancies in our
markets generally, the occupancy in our portfolio of properties remained strong,
as it increased to 97.2% at June 30, 2001, as compared to 97.0% at March 31,
2001. Second, rental rates on space that was re-leased in the second quarter
increased an average of 42.2% over the rates that were in effect under the
expiring leases.
We expect vacancy rates to continue to increase in most of our markets
through the balance of the year due to expected weak demand. As a result, we
expect occupancy in our portfolio to decline 1% to 2% between June 30, 2001 and
the end of 2001. Should demand weaken beyond 2001 or worsen, occupancy levels
may decline further. We do not expect the softened market conditions to have a
material adverse affect on our operating results for the remainder of 2001. We
continue to expect that space that is re-leased should be re-leased at rental
rates in excess of the rates in effect under the expiring leases.
Development Operations
Operating results of development operations are summarized as follows:
=======================================================================================================================
For the three months ended Variance For the six months ended Variance
--------------- --------------
June 30, 2001 vs. June 30, 2001 vs.
-------------------------- ------------------------
(in millions) 2001 2000 2000 2001 2000 2000
---- ---- ---- ---- ---- ----
Operating revenue $ 4.6 $ 2.1 $ 2.5 $ 10.8 $ 4.0 $ 6.8
Segment expense 1.1 1.4 (0.3) 2.6 2.4 0.2
Interest expense - - - - - -
Other income, net 0.1 - 0.1 0.3 - 0.3
=======================================================================================================================
Revenue from our development operations increased $2.5 million (119.0%) for
the second quarter of 2001 compared to the second quarter of 2000. This
increase resulted primarily from our expanded operations in this area, including
services provided to Carr Office Park, L.L.C. and other unconsolidated joint
ventures in connection with their development of new properties. Revenues from
development operations increased $6.8 million (170.0%) for the first six months
of 2001 compared to the same period a year ago for the same reasons.
16
Management's Discussion and Analysis
--------------------------------------------------------------------------------
Other Operations
Operating results of other operations are summarized as follows:
=======================================================================================================================
For the three months ended Variance For the six months ended Variance
------------ --------------
June 30, 2001 vs. June 30, 2001 vs.
-------------------------- ------------------------
(in millions) 2001 2000 2000 2001 2000 2000
---- ---- ---- ---- ---- ----
Operating revenue $ 5.1 $ 3.2 $ 1.9 $ 9.0 $ 6.3 $ 2.7
Segment expense 10.8 10.6 0.2 23.7 19.4 4.3
Interest expense 9.8 13.0 (3.2) 19.6 27.1 (7.5)
Other (expense) income, net (0.4) (2.7) 2.3 (1.4) (2.6) 1.2
=======================================================================================================================
Revenues from our other operations increased $1.9 million (59.4%) in the
second quarter of 2001 as compared to the second quarter of 2000. The increase
in 2001 resulted primarily from expansion of our operations in the area of
managing rental properties for affiliates and others. In particular, in August
2000, we began providing leasing and management services to Carr Office Park,
L.L.C. Revenues from other operations for the six months ended June 30, 2001
increased $2.7 million (42.9%) from the same period in 2000 for the same reason
Expenses of our other operations increased $0.2 million (1.9%) in the three
months ended June 30, 2001 compared to the three months ended June 30, 2000.
The increase was due primarily to our expanded property management operations
discussed above and professional fees associated with internal process
improvement efforts and other initiatives. For the six months ended June 30,
2001, expenses of our other operations increased $4.3 million (22.2%) from the
same period in 2001 for the same reasons.
Interest expense decreased $3.2 million (24.6%) during the second quarter
of 2001 compared to the second quarter of 2000 due primarily to lower debt
levels partially offset by a decrease in capitalized interest due to a lower
level of development activity. Interest expense decreased $7.5 million (27.7%)
for the first six months of 2001 compared to the first six months of 2000 for
the same reasons.
During the second quarter of 2001, one of our strategic partners, Broadband
Office, Inc. filed for Chapter 11 bankruptcy protection. The bankruptcy of
Broadband Office, Inc. had no material impact on our operating results nor our
strategic plan. Broadband Office, Inc. had provided some telecommunications
related services to us. We arranged with other providers for the same services
with no significant impact on our business.
Depreciation and Amortization
Depreciation and amortization decreased $2.6 million (7.6%) in the second
quarter of 2001 compared to the second quarter of 2000. This decrease was due
primarily to dispositions of interests in properties, including the properties
contributed to Carr Office Park, L.L.C., partially offset by development
properties being placed in service. For the six months ended June 30, 2001,
depreciation and amortization decreased $1.4 million (2.1%) from the same period
a year ago due to the reasons previously stated.
Gain on Sale of Assets and Other Provisions, Net
We dispose of assets that are inconsistent with our long-term strategic or
return objectives or where market conditions for sale are favorable. The
proceeds from the sales are redeployed into other properties or used to fund
development operations or to support other corporate needs. During the three
months ended June 30, 2001, we disposed of a parcel of land held for
development. We recognized a net loss of $22,000 on this transaction. During
the three months ended June 30, 2000, we disposed of three operating
properties. We recognized a gain of $2.4 million, net of taxes of $0.9 million.
During the six months ended June 30, 2001, we disposed of seven operating
properties, one property under development and two parcels of land held for
development. We recognized a gain of $2.0 million, net of taxes of $2.0
million. We also recognized an impairment loss of $0.9 million on a parcel of
land held for development during the six months ended June 30, 2001. During the
six months ended June 30, 2000, we disposed of five operating properties. We
recognized a gain of $7.7 million, net of taxes of $1.3 million.
17
Management's Discussion and Analysis
--------------------------------------------------------------------------------
Consolidated Cash Flows
Consolidated cash flow information is summarized as follows:
===============================================================================================
For the six months ended Variance
--------------
June 30, 2001 vs.
-------------------------
(in millions) 2001 2000 2000
---- ---- ----
Cash provided by operating activities $ 93.8 $ 94.2 $ (0.4)
Cash provided by investing activities 154.8 334.2 (179.4)
Cash used by financing activities (258.8) (427.4) 168.6
===============================================================================================
Operations generated $93.8 million of net cash in 2001 compared to $94.2
million in 2000. The changes in cash flow from operating activities were
primarily the result of factors discussed above in the analysis of operating
results. The level of net cash provided by operating activities is also affected
by the timing of receipt of revenues and payment of expenses, including in 2001,
income taxes relating to sales of certain assets and discontinued operations in
2000.
Our investing activities provided net cash of $154.8 million in 2001 and
$334.2 million in 2000. The decrease in net cash provided by investing
activities in 2001 is due primarily to the fact that in 2000, we sold our
investment in HQ Global, generating $377.3 million of cash. This decrease was
partially offset by a reduction in development activities ($21.1 million),
receipt of a distribution from Carr Office Park, L.L.C. from proceeds of third
party financing of its properties ($77.9 million), an increase in proceeds from
sales of properties ($37.6 million), and a release of restricted deposits ($32.5
million).
Our financing activities used net cash of $258.8 million in 2001 and $427.4
million in 2000. The decrease in net cash used by financing activities in 2001
is due primarily to lower repayments on unsecured credit facilities ($231.5
million) and increased proceeds from new mortgage debt ($26.6 million). The
effect of the changes was partially offset by increased stock repurchase
activities ($90.8 million) and increased mortgage repayments ($7.7 million).
LIQUIDITY AND CAPITAL RESOURCES
We seek to create and maintain a capital structure that will enable us to
diversify our capital resources. This should allow us to obtain additional
capital from a number of different sources. These sources could include
additional equity offerings of common stock and/or preferred stock, public and
private debt financings and possible asset dispositions. Our management
believes that we will have access to the capital resources necessary to expand
and develop our business, to fund our operating and administrative expenses, to
continue to meet our debt service obligations, to pay dividends in accordance
with REIT requirements, to acquire additional properties and land and to pay for
construction in progress.
We have three investment grade ratings. As of June 30, 2001, Duff & Phelps
Credit Rating Co. and Standard & Poors have each assigned their BBB rating to
our prospective senior unsecured debt offerings and their BBB- rating to our
prospective cumulative preferred stock offerings. Moody's Investor Service has
assigned its Baa2 rating to our prospective senior unsecured debt offerings and
its Ba2 rating to our prospective cumulative preferred stock offerings.
Our total debt at June 30, 2001 was approximately $1.1 billion, of which
$90.0 million (8.2%) bore a LIBOR-based floating interest rate. The interest
rate on borrowings on our unsecured credit facility at June 30, 2001 was 4.54%.
The interest rate of the unsecured credit facility is 70 basis points over 30-
day LIBOR. Our fixed rate mortgage payable debt bore an effective weighted
average interest rate of 8.09% at June 30, 2001. The weighted average term of
this debt is 6.1 years. At June 30, 2001, our debt represented 31.0% of our
total market capitalization of $3.6 billion.
In June 2001, we closed on a new three year $500 million unsecured credit
facility with J.P. Morgan Chase, as agent for a group of banks. We can extend
the life of the line an additional year at our option. The line carries an
interest rate of 70 basis points over LIBOR. The new credit facility has
substantially similar terms as our previous facility. As of June 30, 2001,
$90.0 million was drawn on the credit facility, $1.8 million in letters of
credit were outstanding and we had $408.2 million available for borrowing.
Rental revenue and real estate service revenue have been our principal
sources of cash to pay our operating expenses, debt service and capital
expenditures, excluding non-recurring capital expenditures. We believe that our
current sources of revenue will continue to provide the necessary funds for our
operating expenses and debt service.
18
Management's Discussion and Analysis
--------------------------------------------------------------------------------
We and our affiliates also require capital to invest in our existing
portfolio of operating assets for capital projects. These capital projects
include such things as large-scale renovations, routine capital expenditures,
deferred maintenance on properties we have recently acquired and tenant related
matters, including tenant improvements, allowances and leasing commissions. We
believe that operations along with borrowings under our credit facility will
continue to provide the necessary funds for these capital projects.
We will require a substantial amount of capital for development projects
currently underway and in the future. As of June 30, 2001, we had approximately
0.4 million square feet of office space in three development projects in
progress. Our total expected investment on these projects is $54.7 million.
Through June 30, 2001, we had invested $32.5 million or 59.4% of the total
expected investment for these projects. As of June 30, 2001, we also had 0.9
million square feet of office space under construction in seven projects in
which we own minority interests. These projects are expected to cost $198.1
million, of which our total investment is expected to be approximately $60.7
million. Through June 30, 2001, approximately $99.1 million or 50.0% of total
project costs had been expended on these projects. We have financed our
investment in projects under construction at June 30, 2001 primarily from the
proceeds of asset dispositions and borrowings under our credit facility. We
expect that these sources and project-specific financing of selected assets will
provide additional funds required to complete the development and to finance the
costs of additional projects.
Prior to the second quarter of 1998, we primarily met our capital
requirements by accessing the public debt and equity markets. As a general
matter, conditions in the public equity markets for most REITs have not been
favorable since that time. In response to these unfavorable conditions, we had
curtailed our acquisition program and satisfied our capital requirements through
the disposition of selected assets, the refinancing of selected assets, prudent
use of joint ventures to reduce our investment requirements and use of our
credit facility.
In the future, if the debt and equity markets are not favorable, if we
cannot raise the expected funds from the sale of properties and/or if we are
unable to obtain capital from other sources, we believe that we would continue
to have sufficient funds to pay our operating and debt service expenses, our
regular quarterly dividends, to make necessary routine capital improvements with
respect to our existing portfolio of operating assets, and to continue to fund
all of our current development projects. However, our ability to expand our
development activities or fund additional development in our joint ventures
could be adversely affected if it is necessary for us to access either the
public equity or debt markets at a time when those markets may not be the best
source of capital for us.
Our Board of Directors has authorized us to spend up to $325 million to
repurchase our common shares, preferred shares, and debt securities. Since the
start of this program in mid-2000 through June 30, 2001, we have acquired
approximately 7.2 million common shares for $209.4 million, representing an
average price of $28.94 per share.
We pay dividends quarterly. Funds which we accumulate for distribution are
invested primarily in short-term investments collateralized by securities if the
United States Government or one of its agencies.
Funds From Operations
We believe that funds from operations is helpful to investors as a measure
of the performance of an equity REIT. Based on our experience, funds from
operations, along with information about cash flows from operating activities,
investing activities and financing activities, provides investors with an
indication of our ability to incur and service debt, to make capital
expenditures and to fund other cash needs. Funds from operations is defined by
the National Association of Real Estate Investment Trusts (NAREIT) as follows:
. Net income (loss) - computed in accordance with generally accepted
accounting principles (GAAP);
. Less gains (or plus losses) from sales of depreciable operating
properties and items that are classified as extraordinary items under GAAP;
. Plus depreciation and amortization of assets uniquely significant to the
real estate industry;
. Plus or minus adjustments for unconsolidated partnerships and joint
ventures (to reflect funds from operations on the same basis).
Our funds from operations may not be comparable to funds from operations
reported by other REITs. These other REITs may not define the term in
accordance with the current NAREIT definition or may interpret the current
NAREIT definition differently than us. Funds from operations does not represent
net income or cash flow generated from operating activities in accordance with
GAAP. As such, it should not be considered an alternative to net income as an
indication of our performance or to cash flows as a measure of our liquidity or
our ability to make distributions.
19
Management's Discussion and Analysis
--------------------------------------------------------------------------------
The following table provides the calculation of our funds from operations
for the periods presented:
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
(In thousands) 2001 2000 2001 2000
------------ ------------- ------------ -------------
Net income from continuing operations before minority interest $ 35,636 $ 32,178 $ 67,355 $ 68,385
Adjustments to derive funds from operations:
Add depreciation and amortization 31,751 34,381 64,457 65,823
Deduct:
Minority interests' (non Unitholders) share of depreciation,
amortization and net income (219) (218) (501) (473)
Loss (gain) on sale of assets and other provisions, net 22 (2,387) (1,054) (7,741)
------------ ------------- ------------ -------------
Funds from operations before allocations to the
minority Unitholders 67,190 63,954 130,257 125,994
Less: Funds from operations allocable to the
minority Unitholders (4,507) (3,794) (8,344) (8,231)
------------ ------------- ------------ -------------
Funds from operations allocable to CarrAmerica
Realty Corporation 62,683 60,160 121,913 117,763
Less: Preferred stock dividends (8,745) (8,745) (17,394) (17,522)
------------ ------------- ------------ -------------
Funds from operations attributable to common shareholders $ 53,938 $ 51,415 $ 104,519 $ 100,241
============ ============= ============ =============
FORWARD-LOOKING STATEMENTS
Certain statements contained herein 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 our, and our affiliates, or the
industry's actual results, performance or achievements to be materially
different from any future results, performance or achievements 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
. Level of lease rents
. Availability of financing for both tenants and us;
. Adverse changes in the real estate markets, including, among other things:
. Competition with other companies
. Risks of real estate acquisition and development
. Failure of pending developments to be completed on time and on
budget;
. Actions, strategies and performance of affiliates that we may not control;
. Governmental actions and initiatives; and
. Environmental/safety requirements.
20
Quantitative and Qualitative Disclosures About Market Risk
--------------------------------------------------------------------------------
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Any significant changes in our market risk that have occurred since the
filing of our Annual Report on Form 10-K for the year ended December 31, 2000
are summarized in the Liquidity and Capital Resources section of the
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
21
Part II
OTHER INFORMATION
-----------------
Item 4. Submission of Matters to a Vote of Security Holders
The 2001 annual meeting of stockholders was held on May 3, 2001. We
solicited proxies for the meeting pursuant to Regulation 14 under the
Securities Exchange Act of 1934, as amended; there was no solicitation
in opposition to our management's nominees as listed in the proxy
statement and all nominees were elected.
Proposal One: Election of Directors
(a) 58,424,019 votes were cast for the election of Thomas A. Carr as a
Director; 3,136,369 votes were withheld.
(b) 58,423,669 votes were cast for the election of Caroline S. McBride
as a Director; 3,136,719 votes were withheld.
(c) 58,515,314 votes were cast for the election of Wesley S. Williams,
Jr. as a Director; 3,045,074 votes were withheld.
Proposal Two: To instate the election of directors annually.
FOR AGAINST ABSTAIN
--- ------- -------
21,129,885 34,078,373 92,606
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Revolving Credit Agreement dated June 28, 2001 among
CarrAmerica Realty Corporation, as Borrower, The Chase
Manhattan Bank, as Bank and as Administrative Agent for the
Banks, J.P. Morgan Securities Inc., as Lead Arranger,
Exclusive Advisor and Sole Bookrunner, Bank of America, N.A.
as Syndication Agent, PNC Bank, National Association, as
Documentation Agent, Commerzbank AG, New York Branch, as
Documentation Agent, First Union National Bank, as
Documentation Agent, and the Banks Listed in the Revolving
Credit Agreement.
10.2 Guaranty of Payment dated June 28, 2001 by CarrAmerica
Realty L.P. in favor of Chase Manhattan Bank.
15 Letter from KPMG LLP, dated August 14, 2001.
(b) Reports on Form 8-K
Current Report on Form 8-K filed on May 4, 2001 regarding certain
supplemental data included in the Company's press release dated
May 4, 2001.
22
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.
CARRAMERICA REALTY CORPORATION
/s/Richard F. Katchuk
-------------------------------------------
Richard F. Katchuk, Chief Financial Officer
/s/ Stephen E. Riffee
-------------------------------------------
Stephen E. Riffee, Senior Vice President, Controller and Treasurer
(Principal Accounting Officer)
Date: August 14, 2001
23