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, 2003
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 June 30, 2003:
(# 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES x NO ¨
| Page | ||||
| Part I: Financial Information |
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| Item 1. |
Financial Statements |
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| Consolidated Balance Sheets as of June 30, 2003 (unaudited) and December 31, 2002 |
4 | |||
| 5 | ||||
| Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 (unaudited) |
6 | |||
| 7 - 10 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 -19 | ||
| Item 3. |
20 | |||
| Item 4. |
20 | |||
| Part II: Other Information |
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| Item 1. |
21 | |||
| Item 6. |
21 | |||
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 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 and Management’s Discussion and Analysis of Financial Condition and Results of Operations. The results of operations for the six months ended June 30, 2003 are not necessarily indicative of the operating results to be expected for the full year.
3
CARRAMERICA REALTY, L.P. AND SUBSIDIARIES
As of June 30, 2003 and December 31, 2002
| June 30, 2003 |
December 31, 2002 |
|||||||
| (In thousands)
|
(unaudited) | |||||||
| Assets |
||||||||
| Rental property: |
||||||||
| Land |
$ | 129,091 | $ | 129,091 | ||||
| Buildings |
588,883 | 587,114 | ||||||
| Tenant improvements |
48,939 | 44,547 | ||||||
| Furniture, fixtures, and equipment |
774 | 782 | ||||||
| 767,687 | 761,534 | |||||||
| Less—accumulated depreciation |
(118,927 | ) | (105,370 | ) | ||||
| Total rental property |
648,760 | 656,164 | ||||||
| Land held for development |
5,770 | 5,660 | ||||||
| Cash and cash equivalents |
— | 1,654 | ||||||
| Restricted deposits |
239 | — | ||||||
| Accounts and notes receivable, net |
8,918 | 10,180 | ||||||
| Investments in unconsolidated entities |
44,874 | 45,924 | ||||||
| Accrued straight-line rents |
15,638 | 13,816 | ||||||
| Tenant leasing costs, net |
8,525 | 7,707 | ||||||
| Prepaid expenses and other assets, net |
9,820 | 9,516 | ||||||
| $ | 742,544 | $ | 750,621 | |||||
| Liabilities, Redeemable Partnership Units and Partners’ Capital |
||||||||
| Liabilities: |
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| Mortgages and notes payable |
$ | 76,834 | $ | 81,636 | ||||
| Notes payable to affiliates |
38,638 | 38,944 | ||||||
| Accounts payable and accrued expenses |
9,626 | 12,095 | ||||||
| Due to affiliates |
43,514 | 56,423 | ||||||
| Rents received in advance and security deposits |
6,976 | 6,400 | ||||||
| Total liabilities |
175,588 | 195,498 | ||||||
| Mandatorily redeemable partnership units (at redemption value) |
35,017 | 32,776 | ||||||
| Partners’ capital: |
||||||||
| General partner |
5,809 | 5,679 | ||||||
| Limited partners |
526,130 | 516,668 | ||||||
| Total partners’ capital |
531,939 | 522,347 | ||||||
| Commitments and contingencies |
||||||||
| $ | 742,544 | $ | 750,621 | |||||
See accompanying notes to consolidated financial statements.
4
CARRAMERICA REALTY, L.P. AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2003 and 2002
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| (Unaudited and in thousands)
|
2003 |
2002 |
2003 |
2002 |
||||||||||||
| Operating revenues: |
||||||||||||||||
| Rental revenues: |
||||||||||||||||
| Minimum base rent |
$ | 22,212 | $ | 18,285 | $ | 44,727 | $ | 36,208 | ||||||||
| Recoveries from tenants |
3,820 | 3,311 | 7,431 | 6,998 | ||||||||||||
| Other tenant charges |
1,000 | 609 | 1,806 | 1,130 | ||||||||||||
| Total rental revenues |
27,032 | 22,205 | 53,964 | 44,336 | ||||||||||||
| Other revenue |
177 | 263 | 505 | 445 | ||||||||||||
| Total operating revenues |
27,209 | 22,468 | 54,469 | 44,781 | ||||||||||||
| Operating expenses: |
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| Property expenses: |
||||||||||||||||
| Operating expenses |
7,242 | 5,416 | 14,315 | 11,205 | ||||||||||||
| Real estate taxes |
2,477 | 2,394 | 5,035 | 4,737 | ||||||||||||
| Interest expense |
3,064 | 3,788 | 4,987 | 7,931 | ||||||||||||
| General and administrative |
1,189 | 1,049 | 2,284 | 2,460 | ||||||||||||
| Depreciation and amortization |
8,413 | 5,959 | 16,018 | 12,496 | ||||||||||||
| Total operating expenses |
22,385 | 18,606 | 42,639 | 38,829 | ||||||||||||
| Real estate operating income |
4,824 | 3,862 | 11,830 | 5,952 | ||||||||||||
| Other income: |
||||||||||||||||
| Interest income |
384 | 202 | 390 | 410 | ||||||||||||
| Equity in earnings of unconsolidated entities |
762 | 981 | 1,257 | 2,019 | ||||||||||||
| Total other income |
1,146 | 1,183 | 1,647 | 2,429 | ||||||||||||
| Income from continuing operations before loss on sales of assets and other provisions, net |
5,970 | 5,045 | 13,477 | 8,381 | ||||||||||||
| Loss on sales of assets and other provisions, net |
(3 | ) | (149 | ) | (442 | ) | (1,009 | ) | ||||||||
| Income from continuing operations |
5,967 | 4,896 | 13,035 | 7,372 | ||||||||||||
| Discontinued operations—net operations of sold properties |
— | 1,631 | — | 3,453 | ||||||||||||
| Discontinued operations—gain on sale of property |
— | 3,340 | — | 3,340 | ||||||||||||
| Net income |
$ | 5,967 | $ | 9,867 | $ | 13,035 | $ | 14,165 | ||||||||
| Net income attributable to general partner |
$ | 60 | $ | 99 | $ | 130 | $ | 142 | ||||||||
| Net income attributable to limited partners |
$ | 5,907 | $ | 9,768 | $ | 12,905 | $ | 14,023 | ||||||||
See accompanying notes to consolidated financial statements.
5
CARRAMERICA REALTY, L.P. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2003 and 2002
| (Unaudited and in thousands)
|
2003 |
2002 |
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| Cash flows from operating activities: |
||||||||
| Net income |
$ | 13,035 | $ | 14,165 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
16,018 | 15,485 | ||||||
| Loss on sale of assets and other provisions, net |
442 | 1,009 | ||||||
| Gain on sale of discontinued operations |
— | (3,340 | ) | |||||
| Equity in earnings of unconsolidated entities |
(1,257 | ) | (2,019 | ) | ||||
| Other |
— | (145 | ) | |||||
| Change in assets and liabilities: |
||||||||
| Decrease in accounts and notes receivable, net |
1,262 | 2,308 | ||||||
| Increase in accrued straight-line rents |
(1,822 | |||||||