Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QcGKmBHqCpKPnwjnD3w/qlb1nFn6kxicmt3d0WzZmRog0YQGKcmX7fcxZJ2s8s6R 5QPVD8uhP6iR1Bp7dvldiQ== 0000928385-03-001405.txt : 20030502 0000928385-03-001405.hdr.sgml : 20030502 20030502081814 ACCESSION NUMBER: 0000928385-03-001405 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030501 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARRAMERICA REALTY CORP CENTRAL INDEX KEY: 0000893577 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 521796339 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11706 FILM NUMBER: 03678067 BUSINESS ADDRESS: STREET 1: 1850 K STREET NW STREET 2: SUITE 500 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 2027297500 MAIL ADDRESS: STREET 1: 1700 PENNSYLVANIA AVENUE STREET 2: SUITE 700 CITY: WASHINGTON STATE: DC ZIP: 20006 FORMER COMPANY: FORMER CONFORMED NAME: CARR REALTY CORP DATE OF NAME CHANGE: 19940218 8-K 1 d8k.htm FORM 8-K Form 8-K

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) May 1, 2003

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

CarrAmerica Realty Corporation

Form 8-K

Item 7 Financial Statements and Exhibits

Exhibits Number
99.1		Supplemental Operating and Financial Data for the Quarter Ended March 31, 2003

99.2		Press Release dated May 1, 2003, issued by CarrAmerica Realty Corporation

Item 9 Regulation FD Disclosure

On May 1, 2003, the Company announced its consolidated financial results for the quarter ended March 31, 2003. A copy of the Company’s earnings press release is furnished as Exhibit 99.2 to this report on Form 8-K. A copy of the Company’s Supplemental Operating and Financial Data for the Quarter Ended March 31, 2003 is furnished as Exhibit 99.1 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished pursuant to Item 12 of Form 8-K as directed by the Securities and Exchange Commission in Release No. 34-47583. The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

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: May 2, 2003

CARRAMERICA REALTY CORPORATION

By:

/s/ Kurt A. Heister

Kurt A. Heister

Controller

EXHIBIT INDEX

Exhibit Number

99.1		Supplemental Operating and Financial Data for the Quarter Ended March 31, 2003

99.2		Press Release dated May 1, 2003

EX-99.1 3 dex991.txt EXHIBIT 99.1 Carr America(R) America's Workplace(R) [PICTURE] [PICTURE] [PICTURE] Supplemental Operating and Financial Data For the Quarter Ended March 31, 2003 All dollar amounts shown in this report are in U.S. dollars. This supplemental Operating and Financial Data is not an offer to sell or solicitation to buy any securities of the Company. Any offers to sell or solicitations to buy any securities of the Company shall be made by means of a prospectus. TABLE OF CONTENTS

THE COMPANY CarrAmerica Realty Corporation (the "Company") is a self-administered and self-managed equity real estate investment trust ("REIT"), organized under the laws of Maryland, which owns, develops, acquires and operates office properties. The Company's office properties are located primarily in 12 suburban markets across the United States. CURRENT PORTFOLIO (consolidated, stabilized; as of 3/31/03) 262 Properties 20.5 Million Square Feet (consolidated/unconsolidated; as of 3/31/03) 298 Properties 25.4 Million Square Feet CARRAMERICA MISSION STATEMENT Our primary goal is to excel in meeting the needs of our customers by providing built environments of the highest quality and services that continue to set new standards of excellence. The core values that infuse our efforts are quality, integrity, a sense of community and a genuine commitment to people. UNSECURED SENIOR DEBT RATINGS Fitch: BBB Moody's: Baa2 Standard & Poor's: BBB WEIGHTED AVERAGE OCCUPANCY (stabilized) 90.4% Consolidated Properties 91.0% All Properties REGIONAL DISTRIBUTION (stabilized; as of 3/31/03) Based on Based on Square NOI Footage ------------- --------------- Pacific region 55.1% 50.6% Eastern region 28.6% 26.3% Central region 9.0% 13.0% Mountain region 7.3% 10.1% MARKETS (stabilized; as of 3/31/03) % of NOI % of Sq. Ft. -------- ----------- San Francisco Bay Area 31.4 26.9 Washington DC Metro 23.6 17.2 Southern California 14.5 15.0 Seattle/Portland 9.2 8.7 Salt Lake City/Phoenix 5.0 5.7 Atlanta 5.0 9.1 Chicago 4.1 6.0 Dallas 3.4 4.9 Denver 2.3 4.4 Austin 1.5 2.1 -------- ----------- 100.0 100.0 -------- ----------- BOARD OF DIRECTORS Thomas A. Carr Chairman of the Board and Chief Executive Officer CarrAmerica Realty Corporation Andrew F. Brimmer President Brimmer & Company Inc. Oliver T. Carr, Jr. Chairman of the Board The Oliver Carr Company Philip L. Hawkins President and Chief Operating Officer CarrAmerica Realty Corporation Timothy Howard Executive Vice President and Chief Financial Officer Fannie Mae Robert E. Torray Chairman Robert E. Torray & Co., Inc. Wesley S. Williams, Jr. Partner Covington & Burling EXECUTIVE OFFICERS Thomas A. Carr Chief Executive Officer Philip L. Hawkins President and Chief Operating Officer Stephen E. Riffee Chief Financial Officer Karen B. Dorigan Chief Investment Officer Linda A. Madrid Managing Director, General Counsel and Corporate Secretary RESEARCH COVERAGE(1) David Aubuchon A.G. Edwards (314) 955-5452 Lee Schalop/Alexis Hughes Bank of America Securities (212) 847-5677/(212) 847-5705 Louis Taylor Deutsche Banc Alex. Brown (212) 469-4912 Christopher Haley/Donald Fandetti First Union (443)263-6773/(443) 263-6537 David Kostin Goldman, Sachs & Company (212) 902-6781 John Lutzius/Elizabeth Morse Green Street Advisors (949) 640-8780 David Fick/Ken Weinberg Legg Mason Wood Walker (410) 454-5018/(410) 454-5175 David Harris Lehman Brothers (212) 526-5702 Steve Sakwa/Brian Legg Merrill Lynch & Company, Inc. (212) 449-0335/(212) 449-1153 Greg Whyte Morgan Stanley Dean Witter (212) 761-6331 Jim Sullivan Prudential Securities (212) 778-2515 Jonathan Litt/Gary Boston Salomon Smith Barney (212) 816-0231/(212) 816-1383 (1)Carramerica Realty Corp. is followed by the analyst(s) listed above. Please note that any opinions, estimates or forecasts regarding Carramerica Realty Corp.'s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Carramerica Realty Corp. or its management. Carramerica Realty Corp. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. 2 CORPORATE HEADQUARTERS 1850 K Street, N.W. Suite 500 Washington, D.C. 20006 (202) 729-1700 REGIONAL OFFICES Atlanta, Georgia J. Thad Ellis, Regional Managing Director Austin, Texas Jeffrey S. Pace, Regional Managing Director Chicago, Illinois Gerald J. O'Malley, Regional Managing Director Dallas, Texas William Vanderstraaten, Regional Managing Director Denver, Colorado Robert Milkovich, Regional Managing Director Northern California Christopher Peatross, Regional Managing Director Phoenix, Arizona Robert Milkovich, Regional Managing Director Salt Lake City Robert Milkovich, Regional Managing Director Seattle/Portland Clete Casper, Regional Managing Director Southern California Malcolm O'Donnell, Regional Managing Director Washington, D.C. John Donovan, Regional Managing Director STOCK EXCHANGE LISTINGS New York Stock Exchange TRADING SYMBOL CRE INVESTOR RELATIONS CarrAmerica Realty Corporation 1850 K Street, N.W. Washington, D.C. 20006 Telephone: (202) 729-1700 Fax: (202) 729-1060 CONTACT Stephen M. Walsh Senior Vice President, Capital Markets Telephone: (202) 729-1764 E-mail: swalsh@carramerica.com INFORMATION REQUEST To request a standard Investor Relations package, Annual Report, or to be added to our mailing or fax list, please contact or address an e-mail to: Investor Relations at (202) 729-7518 Or 1 (800) 417-2277 swalsh@carramerica.com CarrAmerica. PLEASE VISIT OUR CORPORATE WEB SITE AT: www.carramerica.com 3 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Key Quarterly Financial Data

(a) Operating partnership. (b) Excluding capitalized interest. (c) Including capitalized interest. (d) Represents adjusted Funds from Operations (FFO). Funds from operations is defined as net income (loss), excluding gains (losses) on sales of property, plus depreciation and amortization of assets and after adjustments for unconsolidated partnerships and joint ventures. Adjusted funds from operations is computed to reflect all operating partnership units as if they were converted to common shares for any period in which they are not antidulitive. (e) Excludes $2,400 and $6,293 of HQ lease guarantees in the first quarter and second quarter, respectively, of 2002. See page 6 for reconciliation of EBITDA to net income. (f) Excludes bond issue costs and discounts and fair value of interest rate swap. (g) Refer to page 8 for definintion. (h) Refer to page 6 for calculation of these amounts. 4 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Key Quarterly Financial Data - Reconciliation of Non-GAAP Financial Measures Reconciliation of Adjusted Funds from Operations to Net Income

We believe that adjusted funds from operations is helpful to investors as a measure of our performance. Adjusted FFO excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains and losses on sales of real estate and real estate related depreciation and amortization, which can make periodic analyses of operating performance more difficult to compare. We also believe that adjusted FFO provides investors with an indication of our ability to incur and service debt, to make capital expenditures and to fund other cash needs. Reconciliation of Adjusted Funds from Operations per Share to Diluted Earnings per Share from Continuing Operations

/1/ Funds from operations is defined as net income (loss), excluding gains (losses) on sales of property, plus depreciation and amortization of assets and after adjustments for unconsolidated partnerships and joint venture. Adjusted funds from operations is computed to reflect all operating partnership units as if they were converted to common shares for any period in which they are not antidilutive. /2/ Operating partnership units are considered to be converted to common shares for any period in which they are not antidilutive. Adjusted FFO per share may include operating partnership units in periods which operating partnership units are antidilutive for EPS purposes. 5 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Key Quarterly Financial Data - Reconciliation of Non-GAAP Financial Measures (con't) Reconciliation of EBITDA to Net Income

We believe that EBITDA is helpful as an alternative measure of operating performance due the significant nature of our long-lived assets and can be used to measure our ability to service debt, fund capital expenditures and expand our business. EBITDA excludes non cash charges such as depreciation and amortization as well as the interest cost associated with financing activities. It also excludes taxes. Secured Property Net Operating Income/EBITDA

Secured property NOI is computed as rental revenue less property operating expenses and real estate taxes from only those properties with mortgage debt. See the table above for reconciliation of EBITDA to net income.

We believe that adjusted FFO payout ratio is helpful as one indicator of our ability to make our dividend payments through the cash items that comprise a part of our income from operations. As a real estate investment trust, the Company is required to payout 90% of its taxable income to shareholders. Adjusted FFO Payout Ratio is computed as dividends per share divided by adjusted FFO per share. EPS Payout Ratio is computed as dividends per share divided by EPS. Refer to table on page 5 for reconciliation of adjusted FFO per share to EPS. 6 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Same Store Operating Property Results (In thousands) Three Months Ended % March 31, Change ---------------------------- ---------- 2003 2002 ----------- ----------- Real estate operating revenue $ 120,954 $ 121,989 -0.8% Real estate operating expenses 40,671 40,236 1.1% ----------- ----------- Total real estate operating income - GAAP basis $ 80,283 $ 81,753 -1.8% =========== =========== Straight-line rent adjustment 1,623 2,424 -33.0% ----------- ----------- Total real estate operating income - Cash basis $ 78,660 $ 79,329 -0.8% =========== =========== YTD average occupancy 91.1% 94.2% -3.1% =========== =========== Same store square footage 19,438,786 =========== 7 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Financial Ratios - -------------------------------------------------------------------------------- Financial Position Ratios for Operations: March 31, Dec. 31, 2003 2002 ----------- ---------- Total Debt/Total Capitalization (Book Value)(1) 61.7% 59.2% Total Debt/Total Capitalization (Market)(2) 50.3% 48.7% Operating Ratios for Operations: Three Months Ended March 31, ------------------------- 2003 2002 -------- -------- Secured Property Net Operating Income/EBITDA(3) 24.0% 29.1% Interest Coverage (4) Excluding capitalized interest 3.14 3.36 Including capitalized interest 3.09 3.24 Fixed Charge Coverage(5) Excluding capitalized interest 2.31 2.16 Including capitalized interest 2.28 2.11 Adjusted FFO Payout Ratio (6) 57.5% 61.7% G&A as a % of Revenue (7) 7.6% 8.2% NOTES: (1) Total debt excluding unamortized bond discount and fair market value of interest rate swaps divided by total debt excluding unamortized bond discount and fair market value of interest rate swaps plus stockholders' equity, minority interest, rents received in advance and security deposits. (2) Total debt excluding unamortized bond discount and fair market value of interest rate swaps divided by market value of common stock (total common shares outstanding at quarter end times closing market price at quarter end) plus preferred equity liquidation value and total debt excluding unamortized bond discount and fair market value of interest rate swaps. (3) See page 6 for a reconciliation of EBITDA to net income and the computation of these amounts. Secured property net operating income is rental revenue less property operating expenses and real estate taxes from only those properties with mortgage debt. (4) Calculated as net income less interest expense (including or excluding capitalized interest), income tax expense, depreciation and amortization expense, minority interest, obligations under lease guarantees and gain (loss) on sale of assets and other provisions, net divided by interest expense (including or excluding capitalized interest). (5) Calculated as net income less interest expense (including or excluding capitalized interest), income tax expense, depreciation and amortization expense, minority interest, obligations under lease guarantees and gain (loss) on sale of assets and other provisions, net divided by principal mortgage debt payments plus preferred dividends and interest expense (including or excluding capitalized interest). (6) Dividends divided by adjusted funds from operations (net income (loss), excluding gains (losses) on sales of property, plus depreciation and amortization of assets and after adjustments for unconsolidated partnerships and joint venture). See page 5 for a reconciliation of adjusted funds from operations to net income. (7) General and administrative expense divided by revenue plus interest income and equity on earnings in consolidated entities. 8 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Share and Operating Partnership Unit Data - -------------------------------------------------------------------------------- The following table sets forth the Common and Series A Preferred shares of the Company and dividend and non-dividend paying operating partnership units outstanding at March 31, 2003 and December 31, 2002, and the weighted average Common and Series A Preferred shares of the Company and dividend and non-dividend paying operating partnership units outstanding for the quarter ended March 31, 2003 and 2002. The non-dividend paying units are not entitled to any distributions until they convert into dividend paying units on fixed dates in the future.

Notes: (a) Series A Preferred shares were convertible into common shares on a one-for-one basis. Balance of shares were converted in the first quarter of 2002. (b) Operating partnership Units are convertible into cash or common shares on a one-for-one basis. (c) The Company has the following Cumulative Redeemable Preferred shares outstanding as of March 31, 2003 which are not included in the table above: Series B 889,017 Shares Series C 5,431,320 Shares Series D 1,705,010 Shares 9 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Debt Capitalization Summary - -------------------------------------------------------------------------------- ($ in thousands)

Note 1: Secured by International Square, 1730 Pennsylvania Avenue and 1255 23rd Street. Note 2: Secured by Century Springs West, Glenridge, Midori, Lakewood and Parkwood. Note 3: Holder has right to call loan any time after 8/1/04 with 6 months notice. Borrower can prepay any time after 7/1/04 without penalty. 10 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Debt Capitalization Summary - continued - ------------------------------------------------------------------------------- ($ In thousands)

*See Hedging Below

* Denotes Less Than ** Denotes Greater Than 11 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Investment Balances

12 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Unconsolidated Equity Investments As of and for the three months ended March 31, 2003 - --------------------------------------------------------------------------------

/1/ CarrAmerica's share of the investee's equity /2/ CarrAmerica's percentage of investee's debt /3/ Adjustments made to investee's net income for equity in earnings 13 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Current Summary of Portfolio Operating Properties As Of March 31, 2003

14 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Current Summary of Portfolio Operationg Properties As Of March 31, 2003

15 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Current Summary of Portfolio Operationg Properties As Of March 31, 2003

16 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Current Summary of Portfolio Operating Properties As of March 31, 2003

/(1)/ Includes office, retail and parking space but excludes storage space. /(2)/ Includes space for leases that have been executed and have commenced as of Mar. 31, 2003. 17 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Lease Rollover Schedule - Stabilized Properties - --------------------------------------------------------------------------------

Note: The Rollover Schedule has been adjusted in 2005 to reflect the approximate current expiration of approximately 472,000 square feet of leases with the International Monetary Fund (IMF) in the Downtown D.C. market. The leases include a provision that requires the IMF to give a minimum of 24 months notice with respect to vacating their leased space in the International Square property. To date, they have not given notice to vacate the property. 18 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Rent Rollover Schedule - Stabilized Properties - --------------------------------------------------------------------------------

Note: Represents rent rollover of minimum annualized base rent. Note: The Rollover Schedule has been adjusted in 2005 to reflect the approximate current expiration of approximately $15.5 million of leases with the International Monetary Fund (IMF) in the Downtown D.C. market. The leases include a provision that requires the IMF to give a minimum of 24 months notice with respect to vacating their leased space in the International Square property. To date, they have not given notice to vacate the property. 19 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Operating Portfolio Lease Economics

20 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES 25 Largest Tenants - Based on Annualized Base Rent - --------------------------------------------------------------------------------

21 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Current Development Activity by Market - --------------------------------------------------------------------------------

/1/ 675 E Street is a residential project with units for sale. There is no rentable square footage or yield based on income associated with this project.

/2/ Project yields represent Carr's yields, exclusive of fees. 22 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES Land Held for Future Development

/1/ Property currently held for sale 23 23 EX-99.2 4 dex992.txt EXHIBIT 99.2 Immediate Karen Widmayer: Media Contact (202) 729-1789 karen.widmayer@carramerica.com Stephen Walsh: Analyst Contact (202) 729-1764 stephen.walsh@carramerica.com CARRAMERICA ANNOUNCES FIRST QUARTER FINANCIAL RESULTS Washington D.C. - May 1, 2003 - CarrAmerica Realty Corporation (NYSE:CRE) today reported first quarter 2003 diluted earnings per share of $0.26 on net income of $19.0 million, compared to diluted earnings per share of $0.17 on net income of $17.5 million for the first quarter of 2002, which included a $2.4 million charge for HQ Global Workplaces, Inc. lease guarantees. Diluted earnings per share for the first quarter of 2002, excluding the $2.4 million charge for HQ Global lease guarantees, would have been $0.21. For the first quarter of 2003, adjusted Funds From Operations (FFO) were $50.1 million or $0.87 per adjusted share, compared to $48.1 million or $0.81 per adjusted share for the first quarter of 2002, which included a $2.4 million charge for HQ Global Workplaces, Inc. lease guarantees. Adjusted FFO for the first quarter of 2002 would have been $50.5 million or $.85 per adjusted share excluding the charge for HQ Global lease guarantees. CarrAmerica President and COO, Philip L. Hawkins, said, "CarrAmerica was able to deliver good leasing results in the first quarter despite an economy that showed few signs of significant strength." Mr. Hawkins continued, "We experienced some increased activity from corporate customers in most of our markets but believe 2003 will continue to be a challenging year for most businesses." Portfolio Report Occupancy for stabilized properties was 90.4% at March 31, 2003, down from 92.3% at December 31, 2002 and down from 93.9% at March 31, 2002. Same store portfolio operating income for the first quarter of 2003 decreased 1.8% on a GAAP basis over the same period in 2002. Adjusting for termination fees, same store operating income for the first quarter of 2003 decreased by 2.8%. The average occupancy rate for same store properties was 91.1% in the first quarter of 2003 as compared to 94.2% for first quarter 2002. -CONTINUED- CarrAmerica Release of May 1, 2003 Page Two For the first quarter, rental rates decreased 15.8% on average on the rolling leases executed during the quarter. Capital Markets Activity During the first quarter, CarrAmerica repurchased or redeemed 2.2 million shares of preferred stock for approximately $54.0 million. In addition, the Company repurchased 322,600 shares of common stock for $7.9 million. Dispositions CarrAmerica has one 62,194 square foot office project in San Diego under contract to be sold. The sale is scheduled to close in the second quarter of 2003, subject to customary closing conditions, and is expected to result in net proceeds of approximately $9.2 million resulting in an estimated gain of approximately $3.5 million. Development Update CarrAmerica owns a partial interest in a 477,000 square foot office development, Terrell Place, in Washington, D.C. The total cost of this project is expected to be $159.0 million, of which $96.1 million had been invested as of March 31, 2003. CarrAmerica's share of the total project costs for this development is expected to be approximately $47.7 million, of which $28.8 million had been expended as of March 31, 2003. This project is currently 54.4% leased or committed, including a 243,791 square foot lease with the law firm of Venable, Baetjer, Howard and Civiletti, LLP. The year-one unleveraged return on CarrAmerica's invested capital (exclusive of fees) is expected to be approximately 10.9%. As of March 31, 2003, CarrAmerica had one residential project under construction with expected total project costs of $19.9 million, of which $6.6 million had been invested as of March 31, 2003. CarrAmerica Earnings Estimates On Friday, May 2, CarrAmerica management will discuss earnings guidance for 2003. Based on management's view of current market conditions and certain assumptions with regards to rental rates and other projections, an expected range of adjusted FFO per share of $3.20 - $3.30 and diluted earnings per share of $0.79 - $0.89, which includes $3.5 million of gain associated with the scheduled sale of the office project in San Diego but no other gains on sales of assets, for 2003 will be discussed. In addition, an expected range of adjusted FFO per share of $0.78 - $0.82 and diluted earnings per share of $0.25 - $0.29, which includes the $3.5 million of gain associated with the scheduled sale of the office project in San Diego but no other gains on sales of assets, for the second quarter of 2003 will be discussed. The projections for 2003 are based in part on the following assumptions: -CONTINUED- CarrAmerica Release of May 1, 2003 Page Three Average Office Portfolio Occupancy 89% - 91% Real Estate Service Revenue $24 - $25 million General and Administrative Expense $41 - $43 million Due to the uncertain nature of property acquisitions and dispositions, the above ranges do not include any possible property acquisitions or dispositions, other than the one previously discussed in this press release. By definition, adjusted FFO excludes gains or losses on the dispositions of properties. CarrAmerica Announces First Quarter Dividend The Board of Directors of CarrAmerica today declared a first quarter dividend for its common stock of $0.50 per share. The dividend will be payable to shareholders of record as of the close of business on May 20, 2003. CarrAmerica's common stock will begin trading ex-dividend on May 16, 2003 and the dividend will be paid on May 30, 2003. The Company also declared a regular dividend for its Series B, Series C, and Series D preferred stock. The total Series B Cumulative Redeemable preferred stock dividend is $.535625 per share, the total Series C Cumulative Redeemable preferred stock dividend is $.534375 per share, and the total Series D Cumulative Redeemable preferred stock dividend is $.528125 per share. The Series B, Series C and Series D preferred stock dividends are payable to shareholders of record as of the close of business on May 20, 2003. The preferred stock will begin trading ex-dividend on May 16, 2003 and the dividends will be paid on May 30, 2003. Corporate Governance The shareholders of CarrAmerica today approved a proposal submitted by the Company's Board of Directors to declassify the Board of Directors and require the annual election of directors beginning at the Company's 2004 annual meeting. CarrAmerica First Quarter Webcast and Conference Call CarrAmerica will conduct a conference call to discuss 2003 first quarter results on Friday, May 2, 2003 at 11:00 AM ET. A live webcast of the call will be available through a link at CarrAmerica's web site, www.carramerica.com. The phone number for the conference call is 1-800-289-0494 for U.S. participants and 1-913-981-5520 for international participants. The call is open to all interested persons. A taped replay of the conference call can be accessed from 2:00 PM on May 2 through May 6, 2003, by dialing 1-888-203-1112 for U.S. callers and 1-719-457-0820 for international callers, passcode 546421. A copy of supplemental material on the Company's first quarter operations is available on the Company's web site, www.carramerica.com, or by request from: -CONTINUED- CarrAmerica Release of May 1, 2003 Page Four Stephen Walsh CarrAmerica Realty Corporation 1850 K Street, NW, Suite 500 Washington, D.C. 20006 (Telephone) 202-729-1764 E-Mail) swalsh@carramerica.com CarrAmerica owns, develops and operates office properties in 12 markets throughout the United States. The Company has become one of America's leading office workplace companies by meeting the rapidly changing needs of its customers with superior service, a large portfolio of quality office properties and extraordinary development capabilities. CarrAmerica is a leading office innovator with interests in and/or strategic relationships with companies including essention, the engine behind InfoCentre, a web-based operations and issues management platform and AmerescoSolutions, an affiliate of Ameresco Energy Services, providing comprehensive energy management programs. Currently, CarrAmerica and its affiliates own, directly or through joint ventures, interests in a portfolio of 298 operating office properties and has an office building under development in Washington, D.C. CarrAmerica's markets include Atlanta, Austin, Chicago, Dallas, Denver, Los Angeles/Orange County, Portland, Salt Lake City, San Diego, San Francisco Bay Area, Seattle and metropolitan Washington, D.C. For additional information on CarrAmerica, including space availability, visit our web site at www.carramerica.com. Estimates of adjusted FFO and earnings per share, and other statements regarding management's expectations about, among other things, operating performance and financial condition, are, by definition, and certain statements in this release and the accompanying summary financial information may 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, dividends, 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, possible charges or payments resulting from our guarantee of certain leases of HQ Global Workplaces, Inc., the ability of the general economy to recover timely from the current economic downturn, 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 or companies in which the Company has made investments, our ability to maintain our status as a REIT for federal income tax purposes, governmental actions and initiatives, the ability to obtain insurance at a reasonable cost and environmental/safety requirements. For a further discussion of these and other factors that could impact the Company's future results, performance, achievements or transactions, see the documents filed by the Company from time to time with the Securities and Exchange Commission, and in particular the section titled, "The Company - Risk Factors" in the Company's Annual Report on Form 10-K. -CONTINUED- -###- CARRAMERICA REALTY CORPORATION Consolidated Balance Sheets March 31, December 31, (In thousands) 2003 2002 ----------- ----------- (Unaudited) Assets - ------ Rental property Land $ 669,034 $ 668,223 Buildings 1,976,611 1,967,496 Tenant improvements 371,176 367,901 Furniture, fixtures and equipment 4,264 4,262 ----------- ----------- 3,021,085 3,007,882 Less: Accumulated depreciation (596,762) (569,970) ----------- ----------- Net rental property 2,424,323 2,437,912 Land held for future development or sale 45,298 44,778 Construction in progress 6,574 12,732 Cash and cash equivalents 5,274 3,023 Restricted deposits 1,960 4,505 Accounts and notes receivable, net 16,444 20,391 Investments in unconsolidated entities 128,211 125,079 Accrued straight-line rents 77,037 74,884 Tenant leasing costs, net 43,421 42,170 Prepaid expenses and other assets, net 50,093 50,231 ----------- ----------- $ 2,798,635 $ 2,815,705 =========== =========== Liabilities and Stockholders' Equity - ------------------------------------ Liabilities: Mortgages and notes payable $ 1,672,713 $ 1,603,949 Accounts payable and accrued expenses 85,361 102,153 Rent received in advance and security deposits 37,189 35,590 ----------- ----------- 1,795,263 1,741,692 Minority interest 76,144 76,222 Stockholders' equity: Preferred stock 200,634 254,518 Common stock 519 518 Additional paid in capital 946,804 951,281 Cumulative dividends in excess of net income (220,729) (208,526) ----------- ----------- 927,228 997,791 ----------- ----------- Commitments and contingencies $ 2,798,635 $ 2,815,705 =========== =========== -CONTINUED- CARRAMERICA REALTY CORPORATION Consolidated Statements of Operations Three Months Ended March 31, ------------------- (In thousands, except per share amounts) 2003 2002 -------- -------- (Unaudited) Revenues: Rental income (1): Minimum base rent $105,763 $105,124 Recoveries from tenants 16,052 16,158 Parking and other tenant charges 5,988 2,793 -------- -------- Total rental revenue 127,803 124,075 Real estate service revenue 5,555 6,127 -------- -------- Total operating revenues 133,358 130,202 -------- -------- Operating expenses: Property expenses: Operating expenses 32,374 30,837 Real estate taxes 12,000 11,733 Interest expense 25,537 24,388 General and administrative 10,286 11,041 Depreciation and amortization 32,010 32,740 -------- -------- Total operating expenses 112,207 110,739 -------- -------- Real estate operating income 21,151 19,463 Other income (expense): Other income 98 194 HQ lease guarantees - (2,400) Equity in earnings of unconsolidated entities 1,327 2,043 -------- -------- Total other income (expense) 1,425 (163) -------- -------- Income from continuing operations before income taxes, minority interest, gain on sale of assets and impairment loss on land 22,576 19,300 Income taxes (252) (33) Minority interest (3,076) (2,623) Loss on sale of assets and impairment loss on land (277) (860) -------- -------- Income from continuing operations 18,971 15,784 Discontinued operations - Net operations of sold property - 1,716 -------- -------- Net income $ 18,971 $ 17,500 ======== ======== Basic net income per share: Income from continuing operations $ 0.26 $ 0.14 Discontinued operations - 0.03 -------- -------- Net income $ 0.26 $ 0.17 ======== ======== Diluted net income per share: Income from continuing operations $ 0.26 $ 0.14 Discontinued operations - 0.03 -------- -------- Net income $ 0.26 $ 0.17 ======== ======== NOTE: (1) Rental income includes $2,153 and $2,903 of accrued straight line rents for the three months period ended Mar. 31, 2003 and 2002, respectively. -CONTINUED- CARRAMERICA REALTY CORPORATION Consolidated Statements of Cash Flow

-CONTINUED- CARRAMERICA REALTY CORPORATION Funds From Operations Funds from operations ("FFO") and funds available for distribution ("FAD") are used as measures of operating performance for real estate companies. We provide FFO and FAD as a supplement to net income calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Although FFO and FAD are measures of operating performance, they do not represent net income calculated in accordance with GAAP. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (loss) (computed in accordance GAAP), excluding gains (or losses) on sales of property, plus depreciation and amortization of assets uniquely significant to the real estate industry and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We believe that FFO and FAD are helpful to investors as a measure of our performance. FFO excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains and losses on sales of real estate and real estate related depreciation and amortization, which can make periodic analyses of operating performance more difficult to compare. We also believe that FFO provides investors with an indication of our ability to incur and service debt, to make capital expenditures and to fund other cash needs. FAD deducts various capital items and non-cash revenue from adjusted FFO to assist in analysis of our cash available to pay dividends.

/1/ Adjusted funds from operations is computed to reflect all operating partnership units as if they were converted to common shares for any period in which they are not antidulitive. -CONTINUED- CARRAMERICA REALTY CORPORATION Funds From Operations (con't)

-CONTINUED- CARRAMERICA REALTY CORPORATION Funds From Operations (con't)

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