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Table of Contents
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 September 30, 2002
 
COMMISSION FILE NO. 000-22741
 
CARRAMERICA REALTY, L.P.

(Exact name of registrant as specified in its charter)
 
Delaware

 
52-1976308

(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
 
1850 K Street, N.W., Washington, D.C. 20006

(Address or principal executive office) (Zip code)
 
Registrant’s telephone number, including area code    (202) 729-1700
 
N/A

(Former name, former address and former fiscal year, if changed since last report)
 
Number of Partnership Units outstanding of each of the registrant’s
classes of Partnership Units as of September 30, 2002:
 
(# of shares) 14,362,972

 
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                     


Table of Contents
 
Index
 
         
Page

Part I:        Financial Information
    
Item 1.
       
       
4
       
5
       
6
       
7 - 9
Item 2.
     
10 - 17
Item 3.
     
18
Item 4.
     
18
Part II:       Other Information
    
Item 6.
     
19

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Table of Contents
 
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 of CarrAmerica Realty, L.P. and subsidiary reflects 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. The results of operations for the three and nine months ended September 30, 2002 are not necessarily indicative of the operating results to be expected for the full year.

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Table of Contents
 
CARRAMERICA REALTY, L.P. AND SUBSIDIARY
Consolidated Balance Sheets As of September 30, 2002 and December 31, 2001
 

 
(In thousands)
 
    
September 30, 2002

    
December 31, 2001

 
    
(unaudited)
        
Assets
                 
Rental property:
                 
Land
  
$
129,091
 
  
$
113,583
 
Buildings
  
 
594,785
 
  
 
533,132
 
Tenant improvements
  
 
41,886
 
  
 
64,856
 
Furniture, fixtures, and equipment
  
 
673
 
  
 
591
 
    


  


    
 
766,435
 
  
 
712,162
 
Less—accumulated depreciation
  
 
(98,823
)
  
 
(92,025
)
    


  


Total rental property
  
 
667,612
 
  
 
620,137
 
Land held for development or sale
  
 
5,642
 
  
 
6,412
 
Cash and cash equivalents
  
 
385
 
  
 
1,226
 
Restricted deposits
  
 
1,553
 
  
 
1,015
 
Accounts and notes receivable, net
  
 
10,203
 
  
 
12,665
 
Due from affiliates
  
 
9,273
 
  
 
—  
 
Investments in unconsolidated entities
  
 
47,776
 
  
 
47,970
 
Accrued straight-line rents
  
 
12,507
 
  
 
12,340
 
Tenant leasing costs, net
  
 
7,172
 
  
 
11,918
 
Deferred financing costs, net
  
 
104
 
  
 
167
 
Prepaid expenses and other assets, net
  
 
2,003
 
  
 
1,053
 
    


  


    
$
764,230
 
  
$
714,903
 
    


  


Liabilities, Mandatorily Redeemable Partnership Units and Partners’ Capital
                 
Liabilities:
                 
Mortgages and notes payable
  
$
196,775
 
  
$
140,729
 
Accounts payable and accrued expenses
  
 
13,049
 
  
 
12,119
 
Due to affiliates
  
 
—  
 
  
 
44,785
 
Rents received in advance and security deposits
  
 
5,675
 
  
 
6,277
 
    


  


Total liabilities
  
 
215,499
 
  
 
203,910
 
Mandatorily redeemable partnership units
  
 
32,933
 
  
 
40,151
 
Partners’ capital:
                 
General partner
  
 
5,613
 
  
 
5,215
 
Limited partners
  
 
510,185
 
  
 
465,627
 
    


  


Total partners’ capital
  
 
515,798
 
  
 
470,842
 
Commitments and contingencies
                 
    
$
764,230
 
  
$
714,903
 
    


  


 
See accompanying notes to consolidated financial statements.
 

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Table of Contents

CARRAMERICA REALTY, L.P. AND SUBSIDIARY
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2002 and 2001

(Unaudited and in thousands)
 
    
Three Months Ended
September 30,

  
Nine Months Ended
September 30,

 
    
2002

  
2001

  
2002

    
2001

 
Operating revenues:
                               
Rental revenue:
                               
Base rent
  
$
20,011
  
$
18,187
  
$
56,219
 
  
$
55,096
 
Recoveries from tenants
  
 
3,944
  
 
3,039
  
 
10,942
 
  
 
8,878
 
Parking and other tenant charges
  
 
1,035
  
 
827
  
 
2,165
 
  
 
2,304
 
    

  

  


  


Total rental revenue
  
 
24,990
  
 
22,053
  
 
69,326
 
  
 
66,278
 
Other revenue
  
 
201
  
 
195
  
 
646
 
  
 
676
 
    

  

  


  


Total operating revenues
  
 
25,191
  
 
22,248
  
 
69,972
 
  
 
66,954
 
    

  

  


  


Operating expenses:
                               
Property expenses:
                               
Operating expenses
  
 
6,643
  
 
5,781
  
 
17,760
 
  
 
18,500
 
Real estate taxes
  
 
2,403
  
 
1,672
  
 
7,140
 
  
 
5,207
 
Interest expense
  
 
3,602
  
 
4,333
  
 
11,533
 
  
 
15,289
 
General and administrative
  
 
598
  
 
1,699
  
 
3,058
 
  
 
6,154
 
Depreciation and amortization
  
 
7,224
  
 
6,442
  
 
19,720
 
  
 
18,017
 
    

  

  


  


Total operating expenses
  
 
20,470
  
 
19,927
  
 
59,211
 
  
 
63,167
 
    

  

  


  


Real estate operating income
  
 
4,721
  
 
2,321
  
 
10,761
 
  
 
3,787
 
    

  

  


  


Other income:
                               
Interest income
  
 
208
  
 
332
  
 
618
 
  
 
1,359
 
Equity in earnings of unconsolidated entities
  
 
635
  
 
363
  
 
2,654
 
  
 
3,400
 
    

  

  


  


Total other income
  
 
843
  
 
695
  
 
3,272
 
  
 
4,759
 
    

  

  


  


Income from continuing operations before gain (loss) on sale of assets and other provisions, net
  
 
5,564
  
 
3,016
  
 
14,033
 
  
 
8,546
 
Gain (loss) on sale of assets and other provisions, net
  
 
—  
  
 
67
  
 
(1,009
)
  
 
(7,435
)
    

  

  


  


Income from continuing operations
  
 
5,564
  
 
3,083
  
 
13,024
 
  
 
1,111
 
Discontinued operations—Net operations of sold properties
  
 
1,017
  
 
1,872
  
 
4,376
 
  
 
5,744
 
Discontinued operations—Gain on sale of properties
  
 
19,085
  
 
—  
  
 
22,425
 
  
 
—  
 
    

  

  


  


Income from discontinued operations
  
 
20,102
  
 
1,872
  
 
26,801
 
  
 
5,744
 
    

  

  


  


Net income
  
$
25,666
  
$
4,955
  
$
39,825
 
  
$
6,855
 
    

  

  


  


Net income attributable to general partner
  
$
257
  
$
50
  
$
398
 
  
$
69
 
    

  

  


  


Net income attributable to limited partners
  
$
25,403
  
$
4,905
  
$
39,427
 
  
$
6,786
 
    

  

  


  


 
See accompanying notes to consolidated financial statements.
 

5


Table of Contents
CARRAMERICA REALTY, L. P. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2002 and 2001
 

 
(Unaudited and in thousands)
 
    
2002

    
2001

 
Cash flows from operating activities:
                 
Net income
  
$
39,825
 
  
$
6,855
 
Adjustments to reconcile net income to net cash (used by) provided by operating activities:
                 
Depreciation and amortization (including discontinued operations)
  
 
23,358
 
  
 
22,606
 
Loss on sale of assets and other provisions, net
  
 
1,009
 
  
 
7,435
 
Gain on sale of discontinued operations
  
 
(22,425
)
  
 
—  
 
Equity in earnings of unconsolidated entities
  
 
(2,654
)
  
 
(3,400
)
Other
  
 
(143
)