EX-99.1 3 dex991.htm EXHIBIT 99.1 EXHIBIT 99.1

LOGO

 

LOGO

 

Supplemental Operating and Financial Data

For the Quarter Ended September 30, 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

 

     PAGE

CORPORATE OVERVIEW

     

The Company

    3

Board of Directors / Executive Officers / Research Coverage

    4-5

Regional Offices / Investor Relations / Information Requests

    6-7

FINANCIAL HIGHLIGHTS

     

Key Quarterly Financial Data

    8

Same Store Results and Analysis

    9

Financial Ratios

    10

Share and Operating Partnership Unit Data

    11

Debt Capitalization Summary

    12-13

Corporate Investment Information

    14

Unconsolidated Equity Investments

    15

SEGMENT ANALYSIS

     

Core Operating Properties

     

Current Summary of Operating Properties

    16-20

Occupancy Summary and Lease Roll-over Schedule

    21-22

Operating Portfolio Lease Economics

    23-24

Top 25 Tenants by Rent

    25

Development

     

Development Activity by Market

    26

Land Held for Development Schedule

    27

Reconciliation of Non-GAAP Financial Measures

    28-30

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 9/30/03)

259 Properties

20.3 Million Square Feet

 

(consolidated/unconsolidated; as of 9/30/03)

297 Properties

26.1 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)

(At September 30, 2003)

 

88.5% Consolidated Properties

89.1% Consolidated/Unconsolidated Properties

 

REGIONAL DISTRIBUTION

(stabilized; as of 9/30/03)

 

    

Based on

NOI

    

Based on Square

Footage

  

Pacific region

    53.81 %   50.81 %

Eastern region

    29.74 %   26.20 %

Central region

    8.64 %   12.94 %

Mountain region

    7.81 %   10.05 %

 

MARKETS

(stabilized; as of 9/30/03)

 

     % of NOI
     % of Sq. Ft.
  

San Francisco Bay Area

    31.40 %   27.55 %

Washington DC Metro

    24.50 %   17.13 %

Southern California

    14.93 %   14.62 %

Seattle/Portland

    7.48 %   8.64 %

Atlanta

    5.24 %   9.07 %

Salt Lake City/Phoenix

    5.14 %   5.65 %

Chicago

    3.80 %   5.96 %

Dallas

    3.28 %   4.89 %

Denver

    2.67 %   4.40 %

Austin

    1.56 %   2.09 %
    
 
     100.00 %   100.00 %
    
 

 

3

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

 

Joan Carter

President & COO

UM Holdings LTD

 

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

 

4

RESEARCH COVERAGE(1)

 

David Aubuchon

A.G. Edwards

(314) 955-5452

 

Lee Schalop/Daniel Oppenheim

Bank of America Securities

(212) 847-5677/(212) 847-5705

 

Louis Taylor/Dennis Maloney

Deutsche Banc Alex. Brown

(212) 250-4912/(212) 250-6799

 

Christopher Haley/Donald Fandetti

Wachovia Securities

(443)263-6773/(443) 263-6537

 

David Kostin/Michael Bilerman

Goldman, Sachs & Company

(212) 902-6781/(212) 902-1970

 

John Lutzius/Elizabeth Dhillon

Green Street Advisors

(949) 640-8780

 

Anthony Paolone

JP Morgan

(212) 622-6682

 

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/Jamie Feldman

Prudential Securities

(212) 778-2515/ (212) 778-1724

 

Jonathan Litt/Gary Boston

Salomon Smith Barney

(212) 816-0231/(212) 816-1383

(1) Carramerica Realty Corp. is followed by the analysts 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.

 

5

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

 

6

STOCK EXCHANGE LISTINGS

 

New York Stock Exchange

 

COMMON STOCK 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

 

7

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Key Quarterly Financial Data

 

($ and shares in thousands)                               
     9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Shares and Units:

                                         

Common Shares

      52,330       52,158       51,851       51,836       53,131  

Outstanding OP Units (a)

      5,615       5,525       5,570       5,579       5,708  

Combined Shares and OP Units (a)

      57,945       57,683       57,421       57,415       58,839  

Weighted Average—Basic

      51,925       51,712       51,608       52,817       53,124  

Weighted Average—Diluted

      52,657       52,368       51,936       53,727       53,818  

Share Price:

                                         

At the End of the Period

    $ 29.85     $ 27.81     $ 25.35     $ 25.05     $ 25.17  

High During Period

      30.00       28.76       25.60       27.30       30.75  

Low During Period

      27.40       25.23       23.25       21.94       24.00  

Capitalization Summary:

                                         

Market Value of Common Equity

    $ 1,729,658     $ 1,604,164     $ 1,455,622     $ 1,438,246     $ 1,480,978  

Preferred Equity

      397,575       199,844       200,634       254,518       260,707  

Total Debt (f)

      1,513,277       1,672,304       1,675,310       1,607,356       1,569,826  

Total Market Capitalization

      3,640,510       3,476,312       3,331,566       3,300,120       3,311,511  

Total Debt/Total Market Capitalization

      41.6 %     48.1 %     50.3 %     48.7 %     47.4 %

Financial Information:

                                         

Total Assets

    $ 2,814,905     $ 2,796,570     $ 2,798,635     $ 2,815,705     $ 2,812,209  

Book Value of Real Estate Assets (before accumulated depreciation)

      3,103,079       3,048,870       3,060,301       3,052,736       3,012,611  

Total Liabilities

      1,632,298       1,802,196       1,795,263       1,741,692       1,664,936  

Total Minority Interest (including OP)

      73,555       74,240       76,144       76,222       77,962  

Total Shareholders’ Equity

      1,109,052       920,134       927,228       997,791       1,043,714  

Total Operating Revenues

      128,169       129,382       132,573       137,265       132,564  

Property NOI

      77,697       79,218       82,832       84,992       83,274  

Property Operating Margin

      63.9 %     65.0 %     65.2 %     65.4 %     65.6 %

EBITDA (e)

      76,180       78,405       80,123       82,167       81,630  

Interest Coverage Ratio (b,e,g)

      2.9       3.0       3.1       3.2       3.3  

Interest Coverage Ratio (c,e,g)

      2.9       3.0       3.1       3.1       3.3  

Fixed Charge Coverage Ratio (b,e,g)

      2.2       2.3       2.3       2.4       2.3  

Fixed Charge Coverage Ratio (c,e,g)

      2.2       2.3       2.3       2.3       2.3  

Diluted FFO available to common shareholders (d)

      46,266       47,006       48,382       50,540       43,193  

Dividends Declared

      0.50       0.50       0.50       0.50       0.50  

FFO Payout Ratio—Diluted (h)

      63.3 %     61.7 %     59.5 %     57.5 %     62.5 %

EPS Payout Ratio (h)

      135.1 %     208.3 %     217.4 %     147.1 %     72.5 %

Net-Straight Line Revenue/Expense Adjustment

      2,105       1,672       2,153       2,583       2,211  

Portfolio Size (including unconsolidated properties):

                                         

Buildings

      297       298       298       296       294  

Total Square Footage (in thousands)

      26,059       26,088       25,392       25.207       24,874  

Current Occupancy

      89.1 %     89.8 %     91.0 %     92.3 %     92.7 %
(a) Operating partnership.
(b) Excluding capitalized interest. See page 30 for computation.
(c) Including capitalized interest. See page 30 for computation.
(d) Represents diluted 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 in accordance with the NAREIT definition. Diluted funds from operations is computed as FFO attributable to common shareholders adjusted to reflect all operating partnership units as if they were converted to common shares for any period in which they are not antidulitive.

See page 28 for a reconciliation of diluted FFO to net income.

(e) Excludes $811 of HQ lease guarantees in the third quarter 2003.

See page 29 for reconciliation of EBITDA to net income.

(f) Excludes bond issue costs and discounts and the fair value of interest rate swaps.
(g) Refer to page 10 for definintion.
(h) Refer to page 29 for calculation of these amounts.

 

8

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Same Store Operating Property Results

 

(In thousands)

     Three Months Ended
September 30,
     %
Change
     Nine Months Ended
September 30,
     %
Change
  
     2003
     2002
           2003
     2002
        

Real estate operating revenue

    $ 115,252     $ 124,221     -7.2 %   $ 348,454     $ 362,684     -3.9 %

Real estate operating expenses

      41,508       41,458     0.1 %     122,096       119,181     2.4 %
    
 
       
 
     

Total real estate operating income

    $ 73,744     $ 82,763     -10.9 %   $ 226,358     $ 243,503     -7.0 %
    
 
       
 
     

Straight-line rent adjustment

    $ 1,541     $ 2,098     -26.5 %   $ 4,105     $ 6,323     -35.1 %
    
 
       
 
     

Average occupancy

      88.5 %     92.4 %   -3.9 %     89.8 %     92.7 %   -2.9 %
    
 
       
 
     

Same store square footage

      19,359,850                     19,099,086                
    
               
             

 

9

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Financial Ratios

 

Financial Position Ratios for Operations:

 

    

Sept. 30,

2003

    

Dec. 31,

2002

  

Total Debt/Total Capitalization (Book Value)(1)

    55.4 %   59.2 %

Total Debt/Total Capitalization (Market)(2)

    41.6 %   48.7 %

 

Operating Ratios for Operations:

 

    

Three Months Ended

September 30,

    

Nine Months Ended

September 30,

  
         2003    
         2002    
         2003    
         2002    
  

Secured Property Net Operating Income/EBITDA(3)

    23.3 %   31.3 %   23.9 %   29.9 %

Interest Coverage (4)

                         

Excluding capitalized interest

    2.94     3.34     3.04     3.36  

Including capitalized interest

    2.89     3.26     2.99     3.25  

Fixed Charge Coverage(5)

                         

Excluding capitalized interest

    2.23     2.32     2.29     2.24  

Including capitalized interest

    2.20     2.28     2.26     2.19  

Diluted FFO Payout Ratio (6)

    63.3 %   62.5 %   61.0 %   64.4 %

G&A as a % of Revenue (7)

    7.7 %   7.6 %   7.8 %   7.3 %

 

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 24 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 diluted 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 28 for a reconciliation of diluted funds from operations to net income.
(7) General and administrative expense divided by revenue plus interest income and equity on earnings in consolidated entities.

 

10

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 September 30, 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 and nine months ended September 30, 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.

 

(In thousands)

    

CarrAmerica

Realty Corporation

Common Shares

Outstanding

   

CarrAmerica

Realty Corporation

Series A

Convertible

Preferred Shares

Outstanding (a)

   

Dividend Paying

Units

Outstanding (b)

   

Non-Dividend

Paying Units

Outstanding

Outstanding as of

                    

September 30, 2003

    52,330    —      5,615    —  

December 31, 2002

    51,836    —      5,579    89

Weighted average for the three months ended September 30,

                    

2003

    51,925    —      5,581    34

2002

    53,124    —      5,619    123

Weighted average for the nine months ended September 30,

                    

2003

    51,751    —      5,571    71

2002

    52,824    4    5,692    160

 

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 redeemable for cash or common shares, at our option, on a one-for-one basis.
(c) The Company has the following Cumulative Redeemable Preferred shares outstanding as of September 30, 2003 which are not included in the table above. The Series B, C and D shares were redeemed October 12, 2003:

 

Series B

   

877,017 Shares

Series C

   

5,291,870 Shares

Series D

   

1,684,110 Shares

Series E

   

8,050,000 Shares

 

11

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Debt Capitalization Summary

 

($ in thousands)                      
                      Principal Maturity

Description of Notes/Lender

   Property
   Principal
Outstanding
   Interest
Rate
     Maturity
Date
   2003
   2004
   2005
   2006
   2007
   2008 &
Thereafter

Sun Life Assurance Company of Canada

  

Tract 17/Canyon Park
Commons

     4,423   9.13 %   01-Dec-04     78     4,345     —       —       —       —  

UBS Mortgage Finance Inc.

   U.S. West     10,032   7.92 %   01-Dec-05     1,014     4,363     4,655     —       —       —  

UBS Mortgage Finance Inc.

   U.S. West     3,025   7.92 %   01-Dec-05     290     1,291     1,444     —       —       —  

UBS Mortgage Finance Inc.

   U.S. West     4,538   7.92 %   01-Dec-05     435     1,936     2,167     —       —       —  

UBS Mortgage Finance Inc.

   U.S. West     4,538   7.92 %   01-Dec-05     435     1,936     2,167     —       —       —  

Salomon Brothers

   Redmond East     25,279   8.38 %   01-Jan-06     134     569     24,576     —       —       —  

State Farm

   Peterson (Note 2)     17,271   7.20 %   01-Jan-06     221     929     16,121     —       —       —  

EquiTrust Life Insurance Co.

   Holcomb Place     3,204   8.25 %   01-Nov-06     19     78     99     3,008     —       —  

Teachers Ins. and Ann. Assoc. of Amer.

   Wasatch Corporate Center     11,566   8.15 %   02-Jan-07     70     293     318     10,885     —       —  

Metropolitan Life Insurance Company

   2600 West Olive     18,455   6.75 %   01-Jan-09     70     292     313     334     358     17,088

Midland Loan Services

   Palomar Oaks     9,312   8.85 %   01-Apr-09     50     213     233     255     278     8,283

Northwest Mutual

   1255 23rd St (Note 1)     37,048   8.12 %   01-Apr-09     148     609     662     717     778     34,134

Northwest Mutual

  

1730 Penn, I Square
(Note 1)

     177,693   8.12 %   01-Apr-09     705     2,921     3,176     3,440     3,730     163,721

New York Life Insurance

   South Coast     14,449   7.13 %   10-Jun-09     64     270     290     312     335     13,178

Business Men’s Assurance Co.

  

Sorenson—Bus. Men’s
Assur.

     1,904   7.75 %   01-Jul-11     45     190     205     222     240     1,002

Berkshire Life Insurance Co.

   Sorenson—Berkshire     1,434   8.88 %   01-May-17     14     58     64     70     76     1,152

Aid Association for Lutherans

  

900 19th St/Pres. Plaza
(Note 3)

     14,568   8.25 %   15-Jul-19     114     481     523     567     616     12,267

TransAmerica Life Insurance

   1775 Penn     11,503   7.63 %   01-Sep-09     36     150     162     175     188     10,792
       
           
 
 
 
 
 
        $ 370,242             $ 3,942   $ 20,924   $ 57,175   $ 19,985   $ 6,599   $ 261,617
       
           
 
 
 
 
 

Note 1: Secured by International Square, 1730 Pennsylvania Avenue and 1255 23rd Street.

Note 2: Secured by Century Springs West, Glenridge, Midori, Holcomb 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.

 

12

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Debt Capitalization Summary—continued

 

($ In thousands)                     
Unsecured Bonds Payable                     
                     Principal Maturity
     Principal
Outstanding
   

Interest

Rate

    

Maturity

Date

    2003
    2004
    2005
    2006
    2007
   

2008 &

Thereafter

7.200% Notes due 2004*

    $ 150,000    7.200 %   1-Jul-04    $ —      $ 150,000    $ —      $ —      $ —      $ —  
    
             
  
  
  
  
  

7.375% Notes due 2007

    $ 125,000    7.375 %   1-Jul-07    $ —      $ —      $ —      $ —      $ 125,000    $ —  
    
             
  
  
  
  
  

6.625% Notes due 2005

    $ 100,000    6.625 %   1-Mar-05    $ —      $ —      $ 100,000    $ —      $ —      $ —  
    
             
  
  
  
  
  

6.875% Notes due 2008

    $ 100,000    6.875 %   1-Mar-08    $ —      $ —      $ —      $ —      $ —      $ 100,000
    
             
  
  
  
  
  

7.125% Notes due 2012

    $ 400,000    7.125 %   15-Jan-12    $ —      $ —      $ —      $ —      $ —      $ 400,000
    
             
  
  
  
  
  

5.261% Notes due 2007

    $ 50,000    5.261 %   30-Nov-07    $ —      $ —      $ —      $ —      $ 50,000    $ —  
    
             
  
  
  
  
  

5.250% Notes due 2007*

    $ 175,000    5.250 %   30-Nov-07    $ —      $ —      $ —      $ —      $ 175,000    $ —  
    
             
  
  
  
  
  
* See Hedging Below

 

Unsecured Line of Credit

 

Lender

    Available
Commitment
    Interest
Rate
     Maturity
Date
    Amount
Outstanding
Beginning
of Year
    Advances
    Repayments
   

Amount
Outstanding
End

of Period

JP Morgan Chase

    $ 500,000    L+.700 %   28-Jun-04    $ 88,000    $ 354,000    $ 399,000    $ 43,000
    
             
  
  
  

 

Hedging Instruments

    Notional
Amount
   

Terms

    Maturity
Date
    Reset

Interest rate swap

    $ 150,000    6ML+2.72%    1-Jul-04    Arrears

Interest rate cap

    $ 97,000    1ML capped at 6.75%    1-Sep-04    Prompt

Interest rate swap

    $ 175,000    6ML+1.40%    30-Nov-07    Arrears

 

Bond Covenants

    Actual
     Requirement
  

Consolidated income available for debt service

    2.93     > 1.50  

Total indebtedness to total assets

    43.7 %   <60 %

Total secured debt to total assets

    10.7 %   <40 %

Unencumbered assets to unsecured indebtedness

    230.6 %   >150 %

 

13

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Investment Balances

 

     Accounting
Method
    Percentage
Ownership
     Investment
Balance as of
Sept. 30, 2003
($000)

Carr Office Park LLC

    Equity    35 %   45,264

575 7th Street

    Equity    30 %   23,223

1919 Pennsylvania Assoc.

    Equity    49 %   16,701

10 UCP

    Equity    20 %   13,451

1717 Pennsylvania1

    Equity    50 %   8,899

1201 F Street

    Equity    35 %   8,721

300 W. Sixth Street

    Equity    20 %   6,170

Custer Court

    Equity    49 %   2,932

AgilQuest

    Cost    18 %   2,759

WCM JV

    Equity    16 %   1,624

CC JM II

    Equity    50 %   1,619

essention

    Cost    19 %   1,217
               
                132,580
               
1 On October 1, 2003, we acquired the 50% of this partnership that we did not own for approximately $34.0 million including $12.0 million of acquired debt.

 

14

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Unconsolidated Equity Investments

As of and for the nine months ended September 30, 2003

 

($ in thousands)    CC JM
     1717
Penn4
     Custer
Court
     1201 F St.
     300 W.
Sixth St.
     Carr
Office
Park
     WCM JV
     1919
Assoc.
     575
Seventh
    

10

UCP

  

Equity1

    1,791     8,913     2,573     9,217     5,283     67,333     1,482     18,074     16,707     13,451  

Loans Payable2

    9,188     11,794     3,676     13,607     11,000     77,004     —       39,410     19,838     26,300  

Percentage Ownership

    50 %   50 %   49 %   35 %   20 %   35 %   16 %   49 %   30 %   20 %

Total revenue

    3,976     5,892     980     8,480     7,957     53,502     1,097     13,304     405     6,816  
    
 
 
 
 
 
 
 
 
 

Expenses

                                                             

Operating expenses

    1,180     2,401     688     2,885     3,633     19,568     173     4,420     151     2,504  

Interest expense

    990     1,178     330     2,049     1,849     11,772     —       4,456     29     1,142  

Depreciation/amortization

    869     1,612     396     1,996     2,709     14,755     465     2,198     111     1,421  
    
 
 
 
 
 
 
 
 
 

Total expenses

    3,039     5,191     1,414     6,930     8,191     46,095     638     11,074     291     5,067  
    
 
 
 
 
 
 
 
 
 

Net income

    937     701     (434 )   1,550     (234 )   7,407     459     2,230     114     1,749  
    
 
 
 
 
 
 
 
 
 

CarrAmerica’s share of net

                                                             

net income

    469     351     (213 )   543     (47 )   2,592     73     1,093     34     350  

Adjustments3

    —       —       —       —       —       (285 )   —       —       —       —    
    
 
 
 
 
 
 
 
 
 

Equity in earnings

    469     351     (213 )   543     (47 )   2,307     73     1,093     34     350  
    
 
 
 
 
 
 
 
 
 
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
4 See note on page 14.

 

15

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Summary of Portfolio Operating Properties As Of Sept. 30, 2003

 

     Net Rentable
Area in
Square
Feet(1)
    Percent
Leased(2)
     Number
of
Buildings
       

Consolidated Properties

                       

EAST REGION

                       

Downtown Washington, D.C.:

                       

International Square

    1,014,914    97.5 %   3       

900 19th Street

    101,215    96.4 %   1       

2550 M Street

    192,393    100.0 %   1       

1730 Pennsylvania Avenue

    229,292    98.7 %   1       

1255 23rd Street

    306,395    96.9 %   1       

1747 Pennsylvania Avenue

    151,997    100.0 %   1       

1775 Pennsylvania Avenue

    143,857    98.6 %   1       

Suburban Washington, D.C.:

                       

One Rock Spring Plaza

    205,721    97.1 %   1       

Sunrise Corporate Center

    260,253    99.2 %   3       

Reston Crossing East & West

    327,788    100.0 %   2       

TransPotomac V Plaza

    97,006    98.1 %   1       

Canal Center

    492,001    84.9 %   4       
    
  
 
      

Washington, D.C. Subtotal

    3,522,832    96.4 %   20       

Atlanta, GA:

                       

Glenridge

    63,494    91.3 %   1       

Century Springs West

    95,206    61.9 %   1       

Holcomb Place

    72,828    100.0 %   1       

Midori

    100,195    48.1 %   1       

Parkwood

    150,270    96.0 %   1       

The Summit

    179,085    79.9 %   1       

Spalding Ridge

    127,726    80.4 %   1       

2400 Lake Park Drive

    103,460    76.2 %   1       

680 Engineering Drive

    62,154    61.5 %   1       

Embassy Row

    465,835    77.9 %   3       

Embassy 100, 500

    190,470    100.0 %   2       

Waterford Centre

    83,170    51.9 %   1       

The Forum

    90,462    100.0 %   1       
    
  
 
      

Atlanta Subtotal

    1,784,355    80.3 %   16       
    
  
 
      

East Region Subtotal:

    5,307,187    91.0 %   36    26.1 %

PACIFIC REGION

                       

Southern California,

                       

Orange County/Los Angeles:

                       

Scenic Business Park

    138,076    85.8 %   4       

Harbor Corporate Park

    151,239    98.3 %   4       

Warner Center

    344,706    96.7 %   12       

South Coast Executive Center

    162,504    96.6 %   2       

Warner Premier

    61,210    94.0 %   1       

Von Karman

    104,375    100.0 %   1       

 

16

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Summary of Portfolio Operating Properties As Of Sept. 30, 2003 (con’t)

 

     Net Rentable
Area in
Square
Feet(1)
    Percent
Leased(2)
     Number
of
Buildings
     

2600 W. Olive

    144,831    100.0 %   1     

Bay Technology Center

    107,481    100.0 %   2     

Pacific Corporate Plaza 1,2, & 3

    124,119    100.0 %   3     

Alton Deere Plaza

    182,461    89.8 %   6     

Westlake Spectrum

    108,084    85.9 %   2     
    
  
 
    

Orange County/Los Angeles Subtotal

    1,629,086    95.3 %   38     

Southern California,

                     

San Diego:

                     

Del Mar Corporate Plaza

    123,142    53.5 %   2     

Towne Center Technology Park 1, 2, 3

    182,120    100.0 %   3     

Lightspan

    64,800    100.0 %   1     

La Jolla Spectrum 1 & 2

    156,653    100.0 %   2     

Palomar Oaks Technology Park

    170,357    83.1 %   6     

Town Center Technology Park IV

    105,358    100.0 %   1     

Highlands Corporate Center

    205,191    93.3 %   5     

11119 Torrey Pines Road

    76,701    100.0 %   1     

Carroll Vista I & II

    107,579    100.0 %   3     
    
  
 
    

San Diego Subtotal

    1,191,901    91.6 %   24     

Northern California,

                     

San Francisco Bay Area:

                     

CarrAmerica Corporate Center

    1,004,679    97.2 %   7     

Valley Business Park I

    67,784    91.4 %   2     

Bayshore Centre 2

    94,874    100.0 %   1     

Rincon Centre

    201,178    88.4 %   3     

Valley Centre II

    212,082    100.0 %   4     

Valley Office Centre

    68,881    91.9 %   2     

Valley Centre

    102,291    100.0 %   2     

Valley Business Park II

    166,928    88.9 %   6     

Rio Robles

    368,178    59.0 %   7     

First Street Technology Center

    67,582    0.0 %   1     

Baytech Business Park

    300,000    87.2 %   4     

3571 North First Street

    116,000    100.0 %   1     

San Mateo Center I

    73,240    28.2 %   1     

Oakmead West Land A-G

    425,981    100.0 %   7     

San Mateo II & III

    141,427    69.7 %   2     

Hacienda West

    207,224    97.0 %   2     

Sunnyvale Technology Center

    165,520    100.0 %   5     

Clarify Corporate Center 1, 2, 3, 4

    258,048    100.0 %   4     

Valley Technology Center 1, 2, 3, 4, 5, 6 & 7

    460,590    100.0 %   7     

Golden Gateway Commons

    276,370    88.9 %   3     

Techmart Commerce Center

    267,735    90.9 %   1     

Fremont Technology Park 1, 2, 3

    139,304    61.1 %   3     

Mountain View Gateway Center

    236,400    100.0 %   2     

 

17

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Summary of Portfolio Operating Properties As Of Sept. 30, 2003 (con’t)

 

     Net Rentable
Area in
Square
Feet(1)
    Percent
Leased(2)
     Number
of
Buildings
       

Stanford Research Park

    89,595    100.0 %   2       

500 Forbes

    155,685    100.0 %   1       
    
  
 
      

San Francisco Subtotal

    5,667,576    90.3 %   80       

Portland, OR:

                       

Sunset Corporate Park

    132,531    60.0 %   3       

Rock Creek Corp Center

    142,662    100.0 %   3       
    
  
 
      

Portland Subtotal

    275,193    80.7 %   6       

Seattle, WA:

                       

Redmond East

    396,497    90.4 %   10       

Redmond Hilltop B & C

    90,880    100.0 %   2       

Canyon Park

    316,667    99.1 %   6       

Willow Creek

    96,179    100.0 %   1       

Willow Creek Corp. Center 1, 2, 3, 4, 5, & 6

    328,537    10.6 %   6       

Canyon Park Commons 1, 2, 4

    176,846    100.0 %   3       

Canyon Park Commons

    95,290    100.0 %   1       
    
  
 
      

Seattle Subtotal

    1,500,896    77.7 %   29       
    
  
 
      

Pacific Region Subtotal

    10,264,652    89.2 %   177    50.6 %

CENTRAL REGION

                       

Austin, TX:

                       

City View Centre

    137,185    76.7 %   3       

City View Centre

    128,716    100.0 %   1       

Tower of the Hills

    166,149    100.0 %   2       
    
  
 
      

Austin Subtotal

    432,050    92.6 %   6       

Chicago, IL:

                       

Parkway North I

    249,259    31.5 %   1       

Unisys

    366,497    66.7 %   2       

The Crossings

    291,888    77.0 %   1       

Bannockburn I & II

    209,450    83.3 %   2       

Bannockburn IV

    108,801    93.0 %   1       
    
  
 
      

Chicago Subtotal

    1,225,895    67.2 %   7       

Dallas, TX:

                       

Cedar Maple Plaza

    113,117    85.7 %   3       

Quorum North

    115,723    55.9 %   1       

Quorum Place

    178,684    74.6 %   1       

Tollway Plaza 1, 2

    359,903    96.9 %   2       

Two Mission Park

    77,593    73.8 %   1       

5000 Quorum

    161,338    72.8 %   1       
    
  
 
      

Dallas Subtotal

    1,006,358    81.3 %   9       
    
  
 
      

Central Region Subtotal

    2,664,303    76.7 %   22    13.1 %

 

18

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Summary of Portfolio Operating Properties As Of Sept. 30, 2003 (con’t)

 

     Net Rentable
Area in
Square
Feet(1)
    Percent
Leased(2)
     Number
of
Buildings
       

MOUNTAIN REGION

                       

Denver, CO:

                       

Harlequin Plaza

    324,601    97.7 %   2       

Quebec Court I

    130,000    100.0 %   1       

Quebec Court II

    157,294    100.0 %   1       

Quebec Centre

    106,867    95.6 %   3       

Dry Creek 2 & 3

    185,957    84.9 %   2       
    
  
 
      

Denver Subtotal

    904,719    95.6 %   9       
    
  
 
      

Phoenix, AZ:

                       

Qwest Communications

    532,506    100.0 %   4       

Salt Lake City, UT:

                       

Sorenson Research Park

    281,264    90.8 %   5       

Wasatch Corporate Center

    178,231    79.3 %   3       

Wasatch Corporate Center 18

    49,566    62.1 %   1       

Sorenson X

    41,288    100.0 %   1       

Creekside I & II

    78,000    100.0 %   1       
    
  
 
      

Salt Lake City Subtotal

    628,349    87.0 %   11       
    
  
 
      

Mountain Region Subtotal

    2,065,574    94.1 %   24    10.2 %

TOTAL CONSOLIDATED PROPERTIES:

    20,301,716          259    100.0 %

WEIGHTED AVERAGE @ Sept. 30, 2003

         88.5 %           

 

19

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Summary of Portfolio Operating Properties As Of Sept. 30, 2003

 

Property

   

Company’s

Effective

Property

Ownership

    

Net Rentable

Area in

Square

Feet(1)

   

Percent

Leased(2)

    

Number

of

Buildings

Unconsolidated Properties

                      

Washington, D.C.:

                      

1919 Pennsylvania Avenue

    49.0 %   328,667    98.2 %   1

2025 M Street

    49.0 %   245,303    99.5 %   1

1201 F Street

    35.0 %   226,922    99.6 %   1

Bond Building

    15.0 %   162,182    100.0 %   1

1717 Pennsylvania Avenue

    50.0 %   184,446    100.0 %   1

Booz-Allen & Hamilton Building

    50.0 %   222,989    100.0 %   1

Portland, OR:

                      

GM Call Center

    16.2 %   103,279    100.0 %   1

Chicago Market Office:

                      

Parkway 3, 4, 5, 6, 9, 10

    35.0 %   774,900    82.6 %   6

Dallas Market Office:

                      

Royal Ridge Phase II, A,B

    35.0 %   505,677    97.6 %   4

Custer Court

    49.0 %   120,838    62.4 %   1

Austin Market Office:

                      

300 W. 6th Street

    20.0 %   446,391    69.2 %   1

Riata Corporate

    35.0 %   673,622    98.8 %   8

Riata Crossing

    35.0 %   324,056    100.0 %   4

Denver Market Office:

                      

Panorama I, II, III, V, VIII, X

    35.0 %   664,050    97.9 %   6

Orange County/Los Angeles Market Office:

                      

10UCP

    20.0 %   774,364    80.6 %   1

TOTAL UNCONSOLIDATED PROPERTIES:

          5,757,686          38

WEIGHTED AVERAGE @ Sept. 30, 2003

               91.2 %    

ALL OPERATING PROPERTIES

                      

TOTAL:

          26,059,402          297

WEIGHTED AVERAGE @ Sept. 30, 2003

               89.1 %    
(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 Sept. 30, 2003.

 

20

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Lease Rollover Schedule—Stabilized Properties

 

Region/Market

   Sq. Feet
  

Current

Occupancy

    

YTD Avg/

Occupancy

    

Vacant

Sq. Feet

   2003
   2004
   2005
   2006
   2007
   2008
   2009
   2010
   2011
   2012
  

2013 &

Thereafter

PACIFIC REGION

                                                                

San Francisco Bay Area

   5,667,576   90.3 %   91.4 %   548,831   252,777   606,357   633,555   948,729   586,350   889,533   409,331   183,653   —     307,756   300,704

Orange County/Los Angeles

   1,629,086   95.3 %   89.4 %   76,641   62,030   253,976   119,739   319,240   276,997   298,408   38,363   25,428   82,405   30,402   45,457

Seattle

   1,500,896   77.7 %   86.3 %   334,469   10,803   172,888   329,719   112,461   49,779   81,821   333,264   —     —     —     75,692

San Diego

   1,191,901   91.6 %   95.2 %   99,850   168,711   161,274   72,130   163,757   30,542   9,170   97,969   24,126   —     287,478   76,894

Portland

   275,193   80.7 %   80.7 %   53,069   9,703   31,497   14,390   —     122,127   —     —     44,407   —     —     —  

MOUNTAIN REGION

                                                                

Denver

   904,719   95.5 %   93.5 %   40,277   23,494   60,603   179,693   153,654   10,924   368,159   35,124   —     —     —     32,791

Phoenix

   532,506   100.0 %   100.0 %   —     —     —     —     —     532,506   —     —     —     —     —     —  

Salt Lake City

   628,349   87.0 %   85.0 %   81,584   23,055   155,581   64,174   92,999   142,751   21,300   —     —     —     28,814   18,091.00

CENTRAL REGION

                                                                

Chicago

   1,225,895   67.2 %   72.8 %   402,378   21,114   169,495   87,738   56,459   74,962   165,525   16,760   54,579   75,750   21,082   80,053

Dallas

   1,006,358   81.3 %   85.8 %   187,730   64,944   135,041   92,264   59,886   138,015   166,959   130,195   4,278   6,589   —     20,457

Austin

   432,050   92.6 %   90.3 %   31,964   1,874   278,995   11,882   20,050   51,541   —     27,036   —     —     —     8,708

EAST REGION

                                                                

Washington, DC

                                                                

Downtown Properties

   2,140,063   98.0 %   97.9 %   43,238   10,790   67,029   187,812   374,622   279,220   217,446   86,474   39,911   3,528   239,237   590,756

Suburban Properties

   1,382,769   93.9 %   95.2 %   84,147   29,943   113,500   275,230   76,099   148,662   66,631   377,620   95,761   67,901   47,275   —  

Atlanta

   1,784,355   80.2 %   82.8 %   352,494   103,310   172,279   103,824   64,371   181,376   65,704   187,804   142,722   211,125   64,835   134,511

Total

   20,301,716   88.5 %   88.9 %   2,336,672   782,548   2,378,515   2,172,150   2,442,327   2,625,752   2,350,656   1,739,940   614,865   447,298   1,026,879   1,384,114

 

21

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Rent Rollover Schedule—Stabilized Properties

 

Region/Market

   2003
   2004
   2005
   2006
   2007
   2008
   2009
   2010
   2011
   2012
  

2013 &

Thereafter

PACIFIC REGION

                                                                  

San Francisco Bay Area

   $ 4,174,468   $ 14,712,713   $ 22,726,775   $ 24,091,860   $ 8,745,045   $ 16,110,282   $ 8,292,898   $ 6,078,057   $ —     $ 7,893,580   $ 9,825,214

Orange County/Los Angeles

     1,238,052     5,988,603     3,045,401     8,040,760     5,074,741     5,876,022     357,609     487,566     1,913,647     729,648     907,360

Seattle

     182,279     2,406,399     5,232,353     1,452,033     660,857     1,158,686     5,305,053     —       —       —       1,135,380

San Diego

     2,391,869     3,669,453     2,399,037     3,700,401     571,535     210,000     3,208,836     1,182,437     —       5,318,062     3,328,335

Portland

     91,908     625,792     215,807     —       2,680,688     —       —       608,496     —       —       —  

MOUNTAIN REGION

                                                                  

Denver

     379,919     1,133,789     3,282,663     2,729,995     189,665     6,287,405     507,117     —       —       —       476,568

Phoenix

     —       —       —       —       10,253,938     —       —       —       —       —       —  

Salt Lake City

     320,276     2,359,197     1,101,397     1,175,431     1,899,314     302,460     —       —       —       473,414     267,780

CENTRAL REGION

                                                                  

Chicago

     394,172     3,290,102     1,434,480     858,951     1,326,738     2,654,482     295,123     936,277     1,174,853     339,836     843,593

Dallas

     1,306,072     2,912,458     2,024,674     1,210,441     2,521,490     3,469,209     1,598,851     89,838     158,136     —       —  

Austin

     40,149     4,753,428     217,753     365,526     644,852     —       477,996     —       —       —       —  

EAST REGION

                                                                  

Washington, DC

                                                                  

Downtown Properties

     359,873     2,239,048     3,823,273     12,116,174     8,911,341     7,797,971     2,919,077     1,299,383     135,683     8,327,997     30,726,723

Suburban Properties

     810,319     3,034,265     6,934,206     2,344,728     4,382,578     1,486,040     8,305,237     2,756,824     1,945,257     1,377,286     —  

Atlanta

     1,939,236     3,396,666     1,896,218     1,316,428     3,397,639     112,731     2,928,673     2,089,538     3,819,296     1,405,623     2,475,918

Total

   $ 13,628,592   $ 50,521,913   $ 54,334,037   $ 59,402,728   $ 51,260,421   $ 45,465,288   $ 34,196,470   $ 15,528,416   $ 9,146,872   $ 25,865,446   $ 49,986,871

Note: Represents rent rollover of minimum annualized base rent.

 

22

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Operating Portfolio Lease Economics

 

     3rd Quarter 2003

Market

   

Total

Executed

Sq. Ft.

   

New GAAP

Rental

Rate

   

Prior GAAP

Rental

Rate

   

% Change

In GAAP

Rental Rate

    

Ave. Lease

Term in

Years

   

Lease

Commissions

Per Sq. Ft.

   

Tenant

Improvements

Per Sq. Ft.

   

Total T/I’s

and L/C’s

Per Sq. Ft.

Atlanta

    47,144    17.64    18.83    -6.32 %   6.84    4.93    10.33    15.26

Austin

    10,001    18.53    20.93    -11.46 %   4.09    2.10    8.90    11.00

Chicago

    72,717    18.42    26.09    -29.41 %   6.11    5.83    17.11    22.94

Dallas

    38,431    14.62    22.09    -33.81 %   3.49    1.96    7.49    9.45

Denver

    56,295    14.75    19.10    -22.75 %   8.48    8.49    25.65    34.14

Los Angeles/Orange County

    194,705    19.50    20.84    -6.45 %   3.55    1.03    4.48    5.51

Portland

    —      —      —      —       —      —      —      —  

Salt Lake City

    1,908    14.38    17.32    -16.97 %   4.25    4.28    11.74    16.02

San Diego

    54,287    28.34    29.28    -3.22 %   5.43    8.58    7.52    16.10

San Francisco Bay

    321,715    27.13    24.77    9.56 %   5.49    4.18    2.01    6.19

Seattle

    70,837    15.73    21.65    -27.33 %   3.37    0.21    0.85    1.06

Suburban Washington DC

    15,234    31.33    29.17    7.40 %   5.00    2.53    —      2.53

Downtown Washington DC

    4,478    37.06    34.29    8.08 %   5.09    —      15.00    15.00

Total

    887,752    22.60    23.64    -4.40 %   5.09    3.72    6.34    10.06
     3rd Quarter 2002

Market

   

Total

Executed

Sq. Ft.

   

New GAAP

Rental

Rate

   

Prior GAAP

Rental

Rate

   

% Change

In GAAP

Rental Rate

    

Ave. Lease

Term in

Years

   

Lease

Commissions

Per Sq. Ft.

   

Tenant

Improvements

Per Sq. Ft.

   

Total T/I’s

and L/C’s

Per Sq. Ft.

Atlanta

    141,413    16.40    21.85    -24.98 %   6.09    4.16    19.98    24.14

Austin

    1,726    8.91    27.28    -67.34 %   5.34    3.98    7.98    11.96

Chicago

    59,582    23.32    25.01    -6.74 %   3.71    3.89    10.24    14.13

Dallas

    32,105    16.32    19.93    -18.12 %   4.57    4.81    12.00    16.81

Denver

    11,118    15.47    25.17    -38.54 %   4.74    1.04    2.01    3.05

Los Angeles/Orange County

    96,055    22.38    26.71    -16.22 %   4.86    3.97    6.37    10.34

Portland

    6,909    17.16    18.16    -5.51 %   1.00    —      —      —  

Salt Lake City

    36,962    20.91    19.98    4.67 %   2.75    1.16    3.85    5.01

San Diego

    31,480    25.71    24.36    5.54 %   1.71    1.59    1.77    3.36

San Francisco Bay

    127,937    19.86    29.86    -33.49 %   3.59    3.98    7.35    11.33

Seattle

    8,694    21.78    23.41    -6.96 %   1.70    —      —      —  

Suburban Washington DC

    5,998    30.23    31.60    -4.32 %   3.58    3.40    21.58    24.98

Downtown Washington DC

    3,234    30.78    36.20    -14.97 %   1.27    1.26    —      1.26

Total

    563,213    19.86    24.80    -19.89 %   4.30    3.56    10.18    13.74

 

23

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Operating Portfolio Lease Economics

 

     2003 Year-to-Date

Market

   

Total

Executed

Sq. Ft.

   

New GAAP

Rental

Rate

   

Prior GAAP

Rental

Rate

   

% Change

In GAAP

Rental Rate

    

Ave. Lease

Term in

Years

   

Lease

Commissions

Per Sq. Ft.

   

Tenant

Improvements

Per Sq. Ft.

   

Total T/I’s

and L/C’s

Per Sq. Ft.

Atlanta

    152,979    18.10    20.11    -9.99 %   4.83    3.12    7.63    10.75

Austin

    26,410    18.08    23.74    -23.85 %   5.29    3.59    6.67    10.26

Chicago

    281,564    22.49    25.59    -12.12 %   6.80    6.42    14.83    21.25

Dallas

    159,089    17.30    22.78    -24.03 %   4.49    2.86    10.35    13.21

Denver

    68,461    15.53    18.70    -16.99 %   7.73    7.17    21.84    29.01

Los Angeles/Orange County

    402,200    19.90    22.16    -10.21 %   4.82    3.44    12.74    16.18

Portland

    —      —      —      —       —      —      —      —  

Salt Lake City

    67,546    13.02    15.07    -13.60 %   6.10    4.73    8.88    13.61

San Diego

    83,054    29.24    31.21    -6.31 %   4.83    7.24    9.00    16.24

San Francisco Bay

    731,533    22.32    29.13    -23.36 %   5.61    5.86    11.46    17.32

Seattle

    122,028    17.94    22.04    -18.60 %   4.01    0.12    3.11    3.23

Suburban Washington DC

    31,359    30.68    27.87    10.08 %   4.41    2.12    2.49    4.61

Downtown Washington DC

    456,314    46.13    42.91    7.50 %   14.92    15.63    58.45    74.08

Total

    2,582,537    26.01    28.88    -9.95 %   7.10    6.63    19.61    26.24
     2002 Year-to-Date

Market

    Total
Executed
Sq. Ft.
    New GAAP
Rental
Rate
   

Prior GAAP
Rental

Rate

    % Change
In GAAP
Rental Rate
     Ave. Lease
Term in
Years
    Lease
Commissions
Per Sq. Ft.
    Tenant
Improvements
Per Sq. Ft.
    Total T/I’s
and L/C’s
Per Sq. Ft.

Atlanta

    289,173    18.39    21.39    -14.03 %   5.42    2.71    11.33    14.04

Austin

    47,713    22.65    23.05    -1.72 %   5.01    4.55    18.16    22.71

Chicago

    156,735    21.93    24.96    -12.12 %   4.35    3.90    6.03    9.93

Dallas

    81,654    18.75    21.40    -12.37 %   3.99    4.38    7.98    12.36

Denver

    181,299    16.49    19.17    -14.02 %   5.23    2.89    10.95    13.84

Los Angeles/Orange County

    225,894    23.30    26.18    -11.00 %   6.57    5.59    15.68    21.27

Portland

    20,818    17.49    19.26    -9.22 %   2.04    —      —      —  

Salt Lake City

    87,587    19.52    16.80    16.19 %   2.32    0.49    1.62    2.11

San Diego

    73,579    26.34    24.44    7.78 %   2.74    3.30    7.40    10.70

San Francisco Bay

    463,594    23.67    28.01    -15.52 %   3.94    4.80    6.33    11.13

Seattle

    12,148    22.44    23.68    -5.26 %   2.28    —      —      —  

Suburban Washington DC

    5,998    30.23    31.60    -4.32 %   3.58    3.40    21.58    24.98

Downtown Washington DC

    17,790    38.69    34.21    13.09 %   6.60    5.58    26.08    31.66

Total

    1,663,982    21.41    23.96    -10.67 %   4.62    3.84    9.30    13.14

 

24

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

25 Largest Tenants—Based on Annualized Base Rent

 

Tenant

   

Percentage

of

Portfolio

Annualized

Rent

    

Square

Feet

   

Percentage

of

Occupied

Square

Feet

  

International Monetary Fund

    4.10 %   501,068    2.39 %

Qwest Communications

    2.44 %   532,506    2.54 %

AT&T

    2.12 %   538,979    2.57 %

Peoplesoft, Inc.

    2.04 %   215,323    1.03 %

Nextel Communications, Inc.

    1.84 %   377,452    1.80 %

Nortel Networks, Inc.

    1.80 %   258,048    1.23 %

Cell Genesys

    1.56 %   155,685    0.74 %

Patton Boggs, L.L.P.

    1.53 %   190,975    0.91 %

Sun Microsystems, Inc.

    1.52 %   239,608    1.14 %

Citicorp

    1.36 %   222,651    1.06 %

Applied Materials, Inc.

    1.28 %   223,326    1.06 %

Merrill Lynch

    1.26 %   127,736    0.61 %

Gateway, Inc.

    1.26 %   287,478    1.37 %

Software AG of North America

    1.21 %   209,521    1.00 %

Proxim, Inc.

    1.19 %   202,655    0.97 %

Lattice Semiconductor Corp.

    1.18 %   216,650    1.03 %

Federal Deposit Insurance Corp

    0.97 %   121,793    0.58 %

Safeway Inc.

    0.93 %   145,350    0.69 %

King & Spalding

    0.84 %   88,655    0.42 %

Pacific Bell Mobile Services

    0.81 %   139,489    0.66 %

KPMG, LLP

    0.79 %   135,558    0.65 %

The Scripps Research Institute

    0.79 %   76,894    0.37 %

Boston Scientific

    0.76 %   212,082    1.01 %

Chronicle of Higher Education

    0.73 %   90,416    0.43 %

Unisys Corp.

    0.70 %   165,688    0.79 %
    
 
  

TOTAL

    35.01 %   5,675,586    27.05 %
    
 
  

 

25

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Current Development Activity by Market

 

Wholly Owned Property

Under Construction @ Sept. 30, 2003

   

Start

Date

   

Estimated

Construction

Completion

Date

   

In Place

Dev Costs

   

Cost

of

Units

Sold

   

Estimated

Remaining

Costs to

Complete

   

Total

Projected

Investment

Washington, DC

                              

675 E Street1

    4Q01    3Q03    12,988    665    6,701    20,354
              
  
  
  
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.

 

Partially Owned Property

Under Construction @ Sept. 30, 2003 2

   

%

Ownership

     Square Feet
   

Start

Date

   

Estimated

Construction

Completion

Date

   

Estimated

Stabilization

Date

   

In Place

Dev Costs

   

Estimated

Remaining

Costs to

Complete

   

Total

Projected

Investment

   

Estimated

Stabilized

Return

    

% Currently

Leased or

Committed

  

Washington, DC

                                                      

575 7th Street

    30 %   476,352    3Q01    3Q03    3Q04    126,617    32,421    159,038    10.5 %   52.7 %
          
                 
  
  
  
 
2 Project yields represent Carr’s yields, exclusive of fees.

 

Note: Estimated construction completion date based on substantial completion of the core and shell building.

 

26

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Land Held for Future Development

 

Region/Property

   

Market

    Acres
   

Buildable

Office Square

Feet

Wholly Owned Land

               

Pacific Region

               

Canyon Pointe A-B

    Seattle, WA    10    173,760

LaJolla Commons

    San Diego, CA    2    45,000

Sunset Corporate

    Portland, OR    12    124,800
         
  

Subtotal

         24    343,560

Mountain Region

               

Dry Creek Corporate Center

    Denver, CO    80    748,000

Sorenson Research Park XI

    Salt Lake City, UT    6    80,238

Wasatch 16

    Salt Lake City, UT    5    80,238

Creekside 2 owned

    Salt Lake City, UT    6    78,000

Creekside 3 optioned

    Salt Lake City, UT    6    78,452
         
  

Subtotal

         103    1,064,928

Central Region

               

Tollway Plaza III

    Dallas, TX    4    134,400

Royal Ridge IV & V

    Dallas, TX    29    417,000
         
  

Subtotal

         33    551,400

Eastern Region

               

Peninsula Corporate Center 1-21

    Boca Raton, FL    19    221,350

Total

         179    2,181,238
         
  

Partially Owned Land

               

Mountain Region

               

Panorama IV

    Denver, CO    7    136,850

Panorama VI

    Denver, CO    9    129,898

Panorama VII

    Denver, CO    6    100,000

Panorama IX

    Denver, CO    6    125,490
         
  

Subtotal

         28    492,238

Central Region

               

Riata 1

    Austin, TX    4    61,585

Riata Crossing 4

    Austin, TX    5    79,780

Riata Crossing 6

    Austin, TX    8    49,702

Seven/Eight Parkway North

    Chicago, IL    11    250,567

Royal Ridge Bldgs 4-6

    Dallas, TX    16    316,786

Royal Ridge Bldg 8

    Dallas, TX    6    132,709
         
  
          50    891,129

Total

         78    1,383,367
         
  

Total All Land Held for Future Development or Sale

         257    3,564,605
         
  
1 Property currently held for sale

 

27

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Key Quarterly Financial Data—Reconciliation of Non-GAAP Financial Measures

 

Reconciliation of Diluted Funds from Operations to Net Income

 

     Quarter Ended
  
(In thousands)    9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Net income

    $ 23,987     $ 16,829     $ 18,971     $ 23,501     $ 48,119  

Depreciation and amortization

      34,658       35,653       33,343       35,745       32,331  

Minority interest

      2,283       2,366       2,796       2,329       (36 )

Gain on sale of property

      (120 )     (3,531 )     277       (5,270 )     (7,042 )

Gain on sale of discontinued operations

      (10,035 )     —         —         —         (19,085 )

Preferred stock dividends and dividends on unvested restricted stock

      (4,507 )     (4,311 )     (7,005 )     (5,765 )     (11,094 )
    
 
 
 
 

Diluted funds from operations1

    $ 46,266     $ 47,006     $ 48,382     $ 50,540     $ 43,193  
    
 
 
 
 
1 FFO is a widely used measure of operating performance for real estate companies. We provide FFO as a supplement to net income calculated in accordance with GAAP. Although FFO is a widely used measure of operating performance for equity REITs, FFO does not represent net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to cash flow from operating activities, determined in accordance with GAAP as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. We believe that FFO is helpful to investors as a measure of our performance because it 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. Our management believes, however, that FFO, by excluding such items, which can vary among owners of similar assets in similar condition based on historical cost accounting and useful life estimates, can help compare the operating performance of a company’s real estate between periods or as compared to different companies. Our FFO may not be comparable to FFO reported by other REITs.

 

Reconciliation of Diluted Funds from Operations per Share to Diluted Earnings per Share

 

     Quarter Ended
  
     9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Diluted net income per share

    $ 0.37     $ 0.24     $ 0.23     $ 0.34     $ 0.69  

Add: Depreciation and amortization

      0.60       0.62       0.64       0.67       0.60  

Less: Gain on sale of property

      —         (0.06 )     —         (0.10 )     (0.13 )

Minority interest adjustment

      0.04       0.07       0.05       0.04       —    

Gain on sale of discontinued operations

      (0.17 )     —         —         —         (0.36 )

Adjustment for share difference2

      (0.05 )     (0.06 )     (0.08 )     (0.08 )     —    
    
 
 
 
 

Diluted funds from operations per share1

    $ 0.79     $ 0.81     $ 0.84     $ 0.87     $ 0.80  
    
 
 
 
 
1 Funds from operations is defined as net income, excluding gains on sales of property, plus depreciation and amortization of assets and after adjustments for unconsolidated partnerships and joint venture. Diluted funds from operations is computed as FFO attributable to common shareholders adjusted 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. Diluted FFO per share may include operating partnership units in periods which operating partnership units are antidilutive for EPS purposes.

 

28

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Key Quarterly Financial Data—Reconciliation of Non-GAAP Financial Measures (con’t)

 

Reconciliation of EBITDA to Net Income

 

     Quarter Ended
  
(In thousands)    9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

EBITDA

    $ 76,180     $ 78,405     $ 80,123     $ 82,167     $ 81,630  

Add: Gain (loss) on sale of assets

      10,155       3,522       (277 )     5,270       26,129  

Less: Interest

      (25,880 )     (26,035 )     (25,873 )     (25,445 )     (24,456 )

Taxes

      (63 )     (120 )     (252 )     (57 )     (106 )

Depreciation and amortization

      (32,978 )     (33,549 )     (31,674 )     (34,082 )     (29,965 )

Impairment losses

      —         (2,701 )     —         (1,171 )     —    

Minority interest

      (2,616 )     (2,693 )     (3,076 )     (2,681 )     (5,113 )

essention investment impairment

      —         —         —         (500 )     —    

HQ lease guarantees

      (811 )     —         —         —         —    
    
 
 
 
 

Net income

    $ 23,987     $ 16,829     $ 18,971     $ 23,501     $ 48,119  
    
 
 
 
 

 

EBITDA is a non-GAAP financial measure and we believe it is helpful to investors due to the significance of our long-lived assets. This data should not be considered as an alternative to net income, operating profit, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP. In addition, we may calculate EBITDA differently from other companies and our EBITDA may not be comparable to similarly titled measures reported by other companies. Interest expense, depreciation and amortization, taxes, impairment losses, minority interests, net gain on sales of real estate and preferred dividends are not reflected in the presentation of EBITDA. We caution investors that these excluded items are significant components in understanding and assessing our financial performance.

 

Secured Property Net Operating Income/EBITDA

 

     Quarter Ended
  
(In thousands except ratio)    9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Secured Property NOI

    $ 17,770     $ 19,355     $ 19,243     $ 20,035     $ 25,556  

Total EBITDA

      76,180       78,405       80,123       82,167       81,630  

Secured Property NOI/Total EBITDA

      23.3 %     24.7 %     24.0 %     24.4 %     31.3 %

 

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.

 

     Quarter Ended
  
     9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Calculation of Diluted FFO Payout Ratio

                                         

Dividends per share

    $ 0.50     $ 0.50     $ 0.50     $ 0.50     $ 0.50  

FFO per diluted share

      0.79       0.81       0.84       0.87       0.80  

Diluted FFO Payout Ratio

      63.3 %     61.7 %     59.5 %     57.5 %     62.5 %

Calculation of EPS Payout Ratio

                                         

Dividends per share

    $ 0.50     $ 0.50     $ 0.50     $ 0.50     $ 0.50  

EPS per diluted share

      0.37       0.24       0.23       0.34       0.69  

EPS Payout Ratio

      135.1 %     208.3 %     217.4 %     147.1 %     72.5 %

 

As a real estate investment trust, the Company is required to payout 90% of its taxable income to shareholders.

 

Diluted FFO Payout Ratio is computed as dividends per share divided by diluted FFO per share. EPS Payout Ratio is computed as dividends per share divided by EPS.

 

Refer to table on page 28 for reconciliation of diluted FFO per share to EPS.

 

 

29

CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES

 

Key Quarterly Financial Data—Reconciliation of Non-GAAP Financial Measures (con’t)

 

Reconciliation of Property Net Operating Income to Net Income

 

     Quarter Ended
  
(In thousands)    9/30/03
     6/30/03
     3/31/03
     12/31/02
     9/30/02
  

Property net operating income

    $ 77,697     $ 79,218     $ 82,832     $ 84,992     $ 83,274  

Less: Interest expense

      (25,880 )     (26,035 )     (25,873 )     (25,445 )     (24,456 )

General and administrative

      (10,028 )     (10,657 )     (10,286 )     (12,305 )     (10,227 )

Depreciation and amortization

      (32,978 )     (33,549 )     (31,502 )     (33,892 )     (29,808 )

Income taxes

      (63 )     (120 )     (252 )     (57 )     (106 )

Minority interest

      (2,616 )     (2,693 )     (3,076 )     (2,681 )     (5,113 )

Add: Real estate service revenue

      6,518       7,478       5,555       7,363       5,560  

Gain (loss) on sale of assets and other provisions, net

      120       821       (277 )     4,099       7,042  

Other income

      865       1,951       1,425       1,267       1,852  

Discontinued operations

      10,352       415       425       160       20,101  
    
 
 
 
 

Net income

    $ 23,987     $ 16,829     $ 18,971     $ 23,501     $ 48,119  
    
 
 
 
 

 

Computation of Fixed Charge Coverage Ratio

 

     Quarter Ended
(In thousands, except for ratios)    9/30/03
    6/30/03
    3/31/03
    12/31/02
    9/30/02

Amortizing principal payments

    $ 3,853    $ 3,852    $ 3,881    $ 3,570    $ 3,735

Preferred stock dividends

      4,370      4,273      5,225      6,017      6,973

Interest expense

      25,880      26,035      25,873      25,445      24,456
    
  
  
  
  

Fixed charges including capitalized interest

      34,103      34,160      34,979      35,032      35,164

Less: Capitalized interest

      460      409      424      788      580
    
  
  
  
  

Fixed charges excluding capitalized interest

    $ 34,563    $ 34,569    $ 35,403    $ 35,820    $ 35,744
    
  
  
  
  

EBITDA

    $ 76,180    $ 78,405    $ 80,123    $ 82,167    $ 81,630
    
  
  
  
  

Fixed charge coverage including capitalized interest

      2.23      2.30      2.29      2.35      2.32

Fixed charge coverage excluding capitalized interest

      2.20      2.27      2.26      2.29      2.28

 

Computation of Interest Coverage Ratio

 

     Quarter Ended
(In thousands, except for ratios)    9/30/03
    6/30/03
    3/31/03
    12/31/02
    9/30/02

Interest expense

    $ 25,880    $ 26,035    $ 25,873    $ 25,445    $ 24,456

Less: Capitalized interest

      460      409      424      788      580
    
  
  
  
  

Interest expense excluding capitalized interest

    $ 26,340    $ 26,444    $ 26,297    $ 26,233    $ 25,036
    
  
  
  
  

EBITDA

    $ 76,180    $ 78,405    $ 80,123    $ 82,167    $ 81,630
    
  
  
  
  

Interest coverage including capitalized interest

      2.94      3.01      3.10      3.23      3.34

Interest coverage excluding capitalized interest

      2.89      2.96      3.05      3.13      3.26

 

30