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, 2004
COMMISSION FILE NO. 1-11706
CARRAMERICA REALTY CORPORATION
(Exact name of registrant as specified in its charter)
| Maryland | 52-1796339 | |
| (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 shares outstanding of each of the registrant’s
classes of common stock, as of July 28, 2004:
Common Stock, par value $.01 per share: 54,348,532 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 reports) 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 ¨
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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, 2004 are not necessarily indicative of the operating results to be expected for the full year.
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CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003
| (In thousands, except share and per share amounts)
|
June 30, 2004 |
December 31, 2003 |
||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Rental property: |
||||||||
| Land |
$ | 690,828 | $ | 690,410 | ||||
| Buildings |
1,922,731 | 1,974,347 | ||||||
| Tenant improvements |
413,564 | 420,533 | ||||||
| Furniture, fixtures and equipment |
49,789 | 48,216 | ||||||
| 3,076,912 | 3,133,506 | |||||||
| Less: Accumulated depreciation |
(701,963 | ) | (692,901 | ) | ||||
| Total rental property |
2,374,949 | 2,440,605 | ||||||
| Land held for development or sale |
41,586 | 41,284 | ||||||
| Assets related to properties held for sale |
172,725 | 10,626 | ||||||
| Cash and cash equivalents |
8,259 | 4,299 | ||||||
| Restricted deposits |
2,922 | 2,549 | ||||||
| Accounts and notes receivable, net |
21,551 | 17,829 | ||||||
| Investments in unconsolidated entities |
139,215 | 137,604 | ||||||
| Accrued straight-line rents |
81,818 | 84,552 | ||||||
| Tenant leasing costs, net |
47,620 | 51,547 | ||||||
| Prepaid expenses and other assets, net |
68,134 | 45,123 | ||||||
| $ | 2,958,779 | $ | 2,836,018 | |||||
| Liabilities, Minority Interest, and Stockholders’ Equity |
||||||||
| Liabilities: |
||||||||
| Mortgages and notes payable, net |
$ | 1,850,178 | $ | 1,727,648 | ||||
| Accounts payable and accrued expenses |
98,306 | 95,586 | ||||||
| Rent received in advance and security deposits |
34,389 | 34,757 | ||||||
| Total liabilities |
1,982,873 | 1,857,991 | ||||||
| Minority interest |
63,963 | 70,456 | ||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.01 par value, authorized 35,000,000 shares: |
||||||||
| Series E Cumulative Redeemable Preferred Stock, at redemption value, issued and outstanding, 8,050,000 shares at June 30, 2004 and December 31, 2003. |
201,250 | 201,250 | ||||||
| Common Stock, $.01 par value, authorized 180,000,000 shares: issued and outstanding 54,346,800 shares at June 30, 2004 and 52,880,953 shares at December 31, 2003. |
543 | 529 | ||||||
| Additional paid-in capital |
1,012,875 | 976,644 | ||||||
| Cumulative dividends in excess of net income |
(302,950 | ) | (270,852 | ) | ||||
| Accumulated other comprehensive income - Unrealized gains on available-for-sale securities |
225 | — | ||||||
| Total stockholders’ equity |
911,943 | 907,571 | ||||||
| Commitments and contingencies |
||||||||
| $ | 2,958,779 | $ | 2,836,018 | |||||
See accompanying notes to consolidated financial statements.
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CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2004 and 2003
| (In thousands, except per share amounts)
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Operating revenues: |
||||||||||||||||
| Rental revenue: |
||||||||||||||||
| Base rent |
$ | 96,661 | $ | 94,329 | $ | 193,654 | $ | 190,614 | ||||||||
| Recoveries from tenants |
13,219 | 13,694 | 26,658 | 29,746 | ||||||||||||
| Parking and other tenant charges |
6,374 | 5,239 | 10,479 | 11,227 | ||||||||||||
| Total rental revenue |
116,254 | 113,262 | 230,791 | 231,587 | ||||||||||||
| Real estate service revenue |
5,301 | 7,478 | 10,767 | 13,033 | ||||||||||||
| Total operating revenues |
121,555 | 120,740 | 241,558 | 244,620 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Property expenses: |
||||||||||||||||
| Operating expenses |
29,753 | 28,809 | 58,597 | 58,176 | ||||||||||||
| Real estate taxes |
9,980 | 10,311 | 20,785 | 21,439 | ||||||||||||
| General and administrative |
10,758 | 10,657 | 21,030 | 20,943 | ||||||||||||
| Depreciation and amortization |
30,792 | 30,942 | 61,839 | 59,929 | ||||||||||||
| Total operating expenses |
81,283 | 80,719 | 162,251 | 160,487 | ||||||||||||
| Real estate operating income |
40,272 | 40,021 | 79,307 | 84,133 | ||||||||||||
| Other (expense) income: |
||||||||||||||||
| Interest expense |
(27,835 | ) | (26,035 | ) | (54,176 | ) | (51,908 | ) | ||||||||
| Other |
530 | 93 | 1,224 | 191 | ||||||||||||
| Equity in earnings of unconsolidated entities |
1,749 | 1,858 | 3,747 | 3,185 | ||||||||||||
| Net other expense |
(25,556 | ) | (24,084 | ) | (49,205 | ) | (48,532 | ) | ||||||||
| Income from continuing operations before income taxes, minority interest and (loss) gain on sale of properties |
14,716 | 15,937 | 30,102 | 35,601 | ||||||||||||
| Income taxes |
(32 | ) | (120 | ) | (154 | ) | (372 | ) | ||||||||
| Minority interest |
(2,139 | ) | (2,693 | ) | (4,165 | ) | (5,769 | ) | ||||||||
| (Loss) gain on sale of properties |
(48 | ) | 821 | (58 | ) | 544 | ||||||||||
| Income from continuing operations |
12,497 | 13,945 | 25,725 | 30,004 | ||||||||||||
| Discontinued operations - Net operations of properties sold or held for sale |
1,510 | 2,884 | 3,446 | 5,796 | ||||||||||||
| Discontinued operations - Gain on sale of properties |
— | — | 66 | — | ||||||||||||
| Net income |
14,007 | 16,829 | 29,237 | 35,800 | ||||||||||||
| Less: Dividends on preferred and unvested restricted stock and issuance costs of redeemed preferred stock |
(3,938 | ) | (4,449 | ) | (7,877 | ) | (11,581 | ) | ||||||||
| Net income available to common shareholders |
$ | 10,069 | $ | 12,380 | $ | 21,360 | $ | 24,219 | ||||||||
| Basic net income per common share: |
||||||||||||||||
| Continuing operations |
$ | 0.16 | $ | 0.18 | $ | 0.33 | $ | 0.36 | ||||||||
| Discontinued operations |
0.03 | 0.06 | 0.07 | 0.11 | ||||||||||||
| Net income |
$ | 0.19 | $ | 0.24 | $ | 0.40 | $ | 0.47 | ||||||||
| Diluted net income per common share: |
||||||||||||||||
| Continuing operations |
$ | 0.16 | $ | 0.18 | $ | 0.33 | $ | 0.36 | ||||||||
| Discontinued operations |
0.03 | 0.06 | 0.06 | 0.11 | ||||||||||||
| Net income |
$ | 0.19 | $ | 0.24 | $ | 0.39 | $ | 0.47 | ||||||||