UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
x | Soliciting Material Pursuant to §240.14a-12 |
CARRAMERICA REALTY CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials: |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
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 2006 FINANCIAL RESULTS
Washington D.C. May 1, 2006 CarrAmerica Realty Corporation (NYSE:CRE) today reported first quarter 2006 diluted earnings per share of $0.23 on net income of $17.5 million, compared to diluted earnings per share of $1.54 on net income of $95.0 million for the first quarter of 2005. First quarter 2005 net income included gains from the disposition of real estate of $88.1 million ($1.46 per diluted share) compared to gains from the disposition of properties in the first quarter of 2006 of $17.6 million ($0.30 per diluted share).
For the first quarter of 2006, diluted funds from operations available to common shareholders (Diluted FFO) were $35.9 million or $0.61 per share compared to $41.4 million or $0.69 per share for the first quarter of 2005. The gains associated with the disposition of real estate had no impact on reported Diluted FFO or Diluted FFO per share.
Included in our operating results for the first quarter of 2006 are $1.7 million of transaction costs for the merger transaction described below.
Proposed Merger with an Affiliate of The Blackstone Group
On March 5, 2006, CarrAmerica, along with its subsidiaries, CarrAmerica Realty Operating Partnership, L.P., a Delaware limited partnership (the Operating Partnership), Carr Realty Holdings, L.P., a Delaware limited partnership (CRH), and CarrAmerica Realty, L.P., a Delaware limited partnership (CAR), entered into an Agreement and Plan of Merger with certain affiliates of The Blackstone Group (Blackstone) pursuant to which two of the affiliates of Blackstone will merge with and into CRH and CAR, respectively, and CarrAmerica will merge with and into another affiliate of Blackstone. In the CarrAmerica merger, holders of CarrAmericas common stock (other than CarrAmerica, its subsidiaries and the Blackstone affiliate with
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CarrAmerica Release of May 1, 2006
Page Two
which CarrAmerica would merge) will receive $44.75 in cash, without interest, for each share of common stock issued and outstanding immediately prior to the effective time of the merger, and holders of CarrAmericas 7.5% Series E cumulative redeemable preferred stock will receive one share of 7.5% Series E cumulative redeemable preferred stock of the surviving corporation of the CarrAmerica merger on substantially the same terms as CarrAmericas existing Series E preferred stock, for each share of Series E preferred stock issued and outstanding immediately prior to the effective time of the merger. As promptly as practicable following the merger effective time, the surviving corporation will be liquidated into Nantucket Parent LLC, a Blackstone affiliate. In the liquidation, shares of the surviving corporations Series E preferred stock will be canceled and the holders thereof will receive a cash distribution from the surviving corporation of $25.00 per share plus any accrued and unpaid dividends.
In addition, in connection with the mergers of CRH and CAR, limited partners of those partnerships will receive $44.75 in cash, without interest, for each unit of partnership interest that they own in CRH or CAR, or in lieu of such cash consideration, limited partners that satisfy certain criteria may elect to receive newly issued 6% Class A preferred units in the applicable surviving partnership on a one-for-one basis.
The consummation of the mergers is subject to customary closing conditions including, among other things, the approval of the CarrAmerica merger by the affirmative vote of holders of at least two-thirds of CarrAmericas outstanding common stock. The closing of the mergers is not subject to a financing condition.
Portfolio Report
Occupancy for consolidated stabilized properties was 90.5% at March 31, 2006, up from 89.4% at December 31, 2005 and up from 88.6% at March 31, 2005. Same store property operating income for the first quarter of 2006 decreased 2.7% on a GAAP basis over the same period in 2005 due primarily to higher property operating expenses. The average occupancy rate for same store properties was 89.8% in the first quarter, compared to 87.7% for the first quarter 2005.
For the first quarter, rental rates decreased 5.0% on average on the leases executed during the quarter compared to expiring leases. The Company leased 648,000 square feet of office space in the first quarter of 2006.
Acquisitions
In the first quarter of 2006, CarrAmerica acquired 7000 West Lantana, comprised of two office buildings totaling 133,817 square feet in Austin, Texas, for $22.3 million. The property is 100% leased and is expected to provide a year one GAAP yield of 8.8%.
Also in the first quarter, CarrAmerica closed on the acquisition of the Casey Family Building, a 77,759-square-foot office building, and adjacent land parcels expected to support the additional development of approximately 600,000 square feet of office and retail space in Seattle, Washington, for $52.0 million.
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CarrAmerica Release of May 1, 2006
Page Three
The Casey Family building, which was acquired for $22.0 million, is 100% leased, and is expected to provide a year one GAAP and stabilized GAAP return of approximately 7.6%. The development of the adjacent land parcels is expected to occur over a three to five year period, and to provide a stabilized GAAP return approximately 100-200 basis points higher than that of the Casey Family Building.
Also in the first quarter, CarrAmerica closed on the acquisition of 3553 North First Street in San Jose, California, an 85,585-square-foot office building, for $10.3 million. The property is expected to provide a year one GAAP return of approximately 2.2%, and a stabilized GAAP return of approximately 9.3%. These expected returns reflect a four-month leaseback to NetIQ and CarrAmericas estimates as to the leasing of the building thereafter.
In early April, a joint venture in which CarrAmerica is a 20% partner acquired Sherry Lane Place, a 286,426 square foot, 20-story, Class A office tower in the Preston Center submarket of Dallas, Texas for $62.5 million. CarrAmerica expects to receive a year one unleveraged GAAP return on its investment of 7.1%.
Dispositions
In the first quarter of 2006, CarrAmerica sold a 258,058 square foot building in Reston, Virginia for $51.9 million and recognized a gain of approximately $17.5 million. The building was approximately 17% leased at the time of sale.
Development
During the first quarter, CarrAmerica commenced construction of a 79,000 square foot office building in Salt Lake City. Total project costs are expected to be $11.8 million and the project is expected to produce a year one stabilized GAAP return of 9.3%.
Also during the first quarter, CarrAmerica commenced construction on a 40,000 square foot office building in San Diego, California. Total project costs are expected to be $14.5 million and a year one GAAP return of 9.3%.
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 May 19, 2006. CarrAmericas common stock will begin trading ex-dividend on May 17, 2006 and the dividend will be paid on May 31, 2006. The company also declared a dividend on its Series E preferred stock. The Series E Cumulative Redeemable preferred stock dividend is $.46875 per share. The Series E preferred stock dividends are payable to shareholders of record as of the close of business on May 19, 2006. The preferred stock will begin trading ex-dividend on May 17, 2006 and the dividends will be paid on May 31, 2006. Under the terms of the merger agreement, pending the merger, CarrAmerica may not declare or pay any additional common stock dividends in the future without the prior written approval of Nantucket Parent LLC, an affiliate of The Blackstone Group.
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CarrAmerica Release of May 1, 2006
Page Four
Solely for purposes of satisfying U.S. federal income tax withholding obligations under section 1.1445-8 of the federal income tax regulations with respect to payments to certain affected non-U.S. stockholders, the Company will characterize a portion of each of the first quarter dividends described above paid to certain affected non-U.S. stockholders as a capital gain dividend to reflect the taxable composition of its aggregate dividend payment to stockholders in 2005.
Accordingly, the Company will characterize as a capital gain dividend $0.357016 per share of the dividend for its common stock and $0.334702 per share of the dividend for its Series E preferred stock. This characterization is relevant only for purposes of withholding on payments to certain affected foreign stockholders and has no effects on U.S. stockholders.
A copy of supplemental material on the companys first quarter operations is available on the companys web site, www.carramerica.com, or by request from:
Stephen Walsh
CarrAmerica Realty Corporation
1850 K Street, NW, Suite 500
Washington, D.C. 20006
(Telephone) 202-729-1764
E-mail: stephen.walsh@carramerica.com
CarrAmerica is not providing earnings guidance for the second quarter nor is it hosting a conference call to discuss its first quarter results due to its proposed merger with and into an affiliate of The Blackstone Group.
Additional Information About the Merger and Where to Find It
This communication is being made in respect of the proposed merger transaction involving CarrAmerica and affiliates of The Blackstone Group. In connection with the transaction, CarrAmerica will file a definitive proxy statement with the SEC. Stockholders are urged to read the definitive proxy statement carefully and in its entirety when it becomes available because it will contain important information about the proposed transaction.
The final proxy statement will be mailed to CarrAmerica stockholders. In addition, the proxy statement and other documents will be available free of charge at the SECs Internet Web site, www.sec.gov. When available, the definitive proxy statement and other pertinent documents also may be obtained for free at CarrAmericas Web site, www.carramerica.com, or by contacting Stephen Walsh, Senior Vice President, CarrAmerica, telephone (202) 729-1764.
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CarrAmerica Release of May 1, 2006
Page Five
CarrAmerica and its directors and officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect to the proposed transactions. Information regarding CarrAmericas directors and executive officers is detailed in its proxy statements and annual reports on Form 10-K, previously filed with the SEC, and the definitive proxy statement relating to the proposed transactions, when it becomes available.
About CarrAmerica
CarrAmerica owns, develops and operates office properties in 12 markets throughout the United States. The company has become one of Americas 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. Currently, CarrAmerica and its affiliates own, directly or through joint ventures, interests in a portfolio of 287 operating office properties, totaling approximately 26.4 million square feet. CarrAmericas markets include 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 Diluted FFO and earnings per share and certain other statements in this release, including managements expectations about, among other things, operating performance and financial conditions, 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: the satisfaction of the conditions to consummate the proposed mergers with affiliates of The Blackstone Group, including the receipt of the required stockholder approval; the actual terms of certain financings that will be obtained for the proposed mergers; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of the legal proceedings that have been instituted against CarrAmerica following the announcement of the proposed mergers; the failure of the proposed mergers to close for any other reason; the amount of the costs, fees, expenses and charges related to the proposed mergers; the substantial indebtedness following consummation of the proposed mergers; national and local economic, business and real estate conditions that will, among other things, affect demand for office space, the extent, strength and duration of any economic recovery, including the effect on demand for office space and the creation of new office development, availability and creditworthiness of tenants, the level of lease rents, and the availability of financing for both tenants and us; adverse changes in real estate markets, including, among other things, the extent of tenant bankruptcies, financial difficulties and defaults, the extent of future demand for office space in our core markets and barriers to
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CarrAmerica Release of May 1, 2006
Page Six
entry into markets which we may seek to enter in the future, the extent of the decreases in rental rates, our ability to identify and consummate attractive acquisitions on favorable terms, our ability to consummate any planned dispositions in a timely manner on acceptable terms, and changes in operating costs, including real estate taxes, utilities, insurance and security costs; actions, strategies and performance of affiliates that we may not control or companies in which we have made investments; ability to obtain insurance at a reasonable cost; ability to maintain our status as a REIT for federal and state income tax purposes; ability to raise capital; effect of any terrorist activity or other heightened geopolitical crisis; governmental actions and initiatives; and environmental/safety requirements. For a further discussion of these and other factors that could impact the companys 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 companys Annual Report or Form 10-K for the fiscal year ended December 31, 2005.
-END OF PART ONE
CARRAMERICA REALTY CORPORATION
Consolidated Balance Sheets
(In thousands)
|
March 31, 2006 |
December 31, 2005 |
||||||
Assets |
||||||||
Rental property: |
||||||||
Land |
$ | 779,377 | $ | 761,901 | ||||
Buildings |
2,079,634 | 2,041,465 | ||||||
Tenant improvements |
489,414 | 469,633 | ||||||
Furniture, fixtures and equipment |
51,861 | 49,007 | ||||||
3,400,286 | 3,322,006 | |||||||
Less: Accumulated depreciation |
(787,217 | ) | (755,647 | ) | ||||
Net rental property |
2,613,069 | 2,566,359 | ||||||
Land held for future development or sale |
56,183 | 40,141 | ||||||
Construction in progress |
19,188 | 3,681 | ||||||
Assets held for sale |
| 33,840 | ||||||
Cash and cash equivalents |
| 15,811 | ||||||
Restricted deposits |
2,717 | 4,472 | ||||||
Accounts and notes receivable, net |
59,862 | 61,358 | ||||||
Investments in unconsolidated entities |
128,869 | 130,384 | ||||||
Accrued straight-line rents |
95,223 | 88,162 | ||||||
Tenant leasing costs, net |
64,164 | 60,922 | ||||||
Intangible assets, net |
129,562 | 124,554 | ||||||
Prepaid expenses and other assets |
19,993 | 22,488 | ||||||
$ | 3,188,830 | $ | 3,152,172 | |||||
Liabilities and Stockholders Equity |
||||||||
Liabilities: |
||||||||
Mortgages and notes payable, net |
$ | 1,929,895 | $ | 1,875,706 | ||||
Accounts payable and accrued expenses |
97,751 | 110,953 | ||||||
Rent received in advance and security deposits |
38,967 | 32,534 | ||||||
2,066,613 | 2,019,193 | |||||||
Minority interest |
58,692 | 58,470 | ||||||
Stockholders equity: |
||||||||
Preferred stock |
201,250 | 201,250 | ||||||
Common stock |
590 | 587 | ||||||
Additional paid-in capital |
1,157,741 | 1,153,045 | ||||||
Cumulative dividends in excess of net income |
(296,431 | ) | (280,708 | ) | ||||
Accumulated other comprehensive income |
375 | 335 | ||||||
1,063,525 | 1,074,509 | |||||||
Commitments and contingencies |
||||||||
$ | 3,188,830 | $ | 3,152,172 | |||||
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CARRAMERICA REALTY CORPORATION
Consolidated Statements of Operations
Three Months Ended March 31, |
||||||||
(In thousands, except per share amounts) | 2006 | 2005 | ||||||
(Unaudited) | ||||||||
Revenues: |
||||||||
Rental income (1): |
||||||||
Minimum base rent |
$ | 98,248 | $ | 96,922 | ||||
Recoveries from tenants |
15,910 | 14,739 | ||||||
Parking and other tenant charges |
3,122 | 3,580 | ||||||
Total rental revenue |
117,280 | 115,241 | ||||||
Real estate service revenue |
5,864 | 5,573 | ||||||
Total operating revenues |
123,144 | 120,814 | ||||||
Operating expenses: |
||||||||
Property expenses: |
||||||||
Operating expenses |
31,585 | 29,189 | ||||||
Real estate taxes |
10,639 | 10,685 | ||||||
General and administrative |
12,690 | 10,749 | ||||||
Depreciation and amortization |
37,101 | 32,517 | ||||||
Total operating expenses |
92,015 | 83,140 | ||||||
Real estate operating income |
31,129 | 37,674 | ||||||
Other (expense) income: |
||||||||
Interest expense |
(30,669 | ) | (29,199 | ) | ||||
Equity in earnings of unconsolidated entities |
1,132 | 1,070 | ||||||
Interest and other income |
1,877 | 1,450 | ||||||
Net other expense |
(27,660 | ) | (26,679 | ) | ||||
Income from continuing operations before income taxes, minority interest, impairment losses on real estates and gain on sale of properties |
3,469 | 10,995 | ||||||
Income taxes |
(546 | ) | (172 | ) | ||||
Minority interest |
(3,019 | ) | (1,791 | ) | ||||
Gain on sale of properties |
17,584 | 88,094 | ||||||
Income from continuing operations |
17,488 | 97,126 | ||||||
Discontinued operations - Net operations of sold properties |
| (2,084 | ) | |||||
Net income |
17,488 | 95,042 | ||||||
Less: Dividends on preferred and restricted stock |
(4,069 | ) | (4,031 | ) | ||||
Net income available to common shareholders |
$ | 13,419 | $ | 91,011 | ||||
Basic net income per share: |
||||||||
Continuing operations |
$ | 0.23 | $ | 1.71 | ||||
Discontinued operations |
| (0.04 | ) | |||||
Net income |
$ | 0.23 | $ | 1.67 | ||||
Diluted net income per share: |
||||||||
Continuing operations |
$ | 0.23 | $ | 1.58 | ||||
Discontinued operations |
| (0.04 | ) | |||||
Net income |
$ | 0.23 | $ | 1.54 | ||||
NOTE: (1) Rental income includes $7,104 and $2,487 of accrued straight line rents for the three months ended Mar. 31, 2006 and 2005, respectively.
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CARRAMERICA REALTY CORPORATION
Consolidated Statements of Cash Flow
Three Months Ended March 31, |
||||||||
(In thousands) | 2006 | 2005 | ||||||
Cash flow from operating activities: |
||||||||
Net income |
$ | 17,488 | $ | 95,042 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
37,101 | 34,961 | ||||||
Minority interest |
3,019 | 1,791 | ||||||
Equity in earnings of unconsolidated entities |
(1,132 | ) | (1,070 | ) | ||||
Operating distributions from unconsolidated entities |
2,322 | 825 | ||||||
Gain on sale of properties |
(17,584 | ) | (88,094 | ) | ||||
Impairment losses on real estate |
| 4,000 | ||||||
Lease intangibles amortization |
3,168 | 2,009 | ||||||
Amortization of deferred financing costs |
1,070 | 1,003 | ||||||
Provision for (recovery of) uncollectible accounts |
195 | (69 | ) | |||||
Stock based compensation |
1,804 | 1,305 | ||||||
Other |
(542 | ) | 622 | |||||
Change in assets and liabilities: |
||||||||
Decrease in accounts receivable |
3,884 | 5,214 | ||||||
Increase in accrued straight-line rents |
(6,943 | ) | (3,015 | ) | ||||
Additions to tenant leasing costs |
(4,901 | ) | (4,271 | ) | ||||
Increase in intangible assets |
(6,788 | ) | | |||||
Increase in prepaid expenses and other assets |
(276 | ) | (2,666 | ) | ||||
Decrease in accounts payable and accrued expenses |
(16,540 | ) | (24,781 | ) | ||||
Increase (decrease) in rent received in advance and security deposits |
6,004 | (5,878 | ) | |||||
Total adjustments |
3,861 | (78,114 | ) | |||||
Net cash provided by operating activities |
21,349 | 16,928 | ||||||
Cash flows from investing activities: |
||||||||
Rental property additions |
(3,963 | ) | (1,859 | ) | ||||
Additions to tenant improvements |
(15,445 | ) | (6,063 | ) | ||||
Additions to construction in progress |
(1,440 | ) | (134 | ) | ||||
Rental property and land acquisitions |
(77,200 | ) | | |||||
Issuance of notes receivable |
(2,860 | ) | (6,540 | ) | ||||
Payments on notes receivable |
395 | 419 | ||||||
Distributions from unconsolidated entities |
15,475 | 945 | ||||||
Investments in unconsolidated entities |
(14,947 | ) | (3,119 | ) | ||||
Acquisition of minority interest |
(157 | ) | (3,831 | ) | ||||
Decrease (increase) in restricted deposits |
1,896 | (655 | ) | |||||
Proceeds from sale of residential property |
| 930 | ||||||
Proceeds from sales of properties |
51,336 | 191,940 | ||||||
Net cash (used in) provided by investing activities |
(46,910 | ) | 172,033 | |||||
Cash flows from financing activities: |
||||||||
Exercises of stock options |
3,067 | 2,129 | ||||||
Repayment of unsecured notes |
| (100,000 | ) | |||||
Net borrowings on unsecured credit facility |
44,000 | 93,000 | ||||||
Net repayments of mortgages and notes payable |
(1,478 | ) | (1,497 | ) | ||||
Dividends and distributions to minority interests |
(35,839 | ) | (34,092 | ) | ||||
Net cash provided by (used in) financing activities |
9,750 | (40,460 | ) | |||||
(Decrease) increase in cash and cash equivalents |
(15,811 | ) | 148,501 | |||||
Cash and cash equivalents, beginning of the period |
15,811 | 4,735 | ||||||
Cash and cash equivalents, end of the period |
$ | | $ | 153,236 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest (net of capitalized interest of $651 for the three months ended March 31, 2006) |
$ | 35,680 | $ | 40,376 | ||||
Income tax payments |
$ | 4,824 | $ | 184 | ||||
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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 widely used measures of operating performance for equity REITs, they do not represent net income calculated in accordance with GAAP. As such, they should not be considered an alternative to net income as an indication of our operating performance. In addition, FFO or FAD does not represent cash generated from operating activities in accordance with GAAP, nor do they 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 are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (computed in accordance GAAP), excluding gains (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 because they exclude 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. FAD deducts various capital items and non-cash revenue from diluted FFO available to common shareholders. Our management believes, however, that FFO and FAD, by excluding such items, which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates, can help compare the operating performance of a companys real estate between periods or as compared to different companies. Our FFO or FAD may not be comparable to FFO or FAD reported by other REITs. These REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than us. They may include or exclude items which we include or exclude from FAD.
(Unaudited and in thousands) | Three Months Ended March 31, |
|||||||
2006 | 2005 | |||||||
Net income |
$ | 17,488 | $ | 95,042 | ||||
Adjustments: Minority interest |
3,019 | 1,791 | ||||||
FFO allocable to the minority Unitholders |
(3,194 | ) | (3,357 | ) | ||||
Depreciation and amortization - Consolidated properties |
35,334 | 30,708 | ||||||
Depreciation and amortization - Unconsolidated properties |
4,415 | 3,576 | ||||||
Depreciation and amortization - Discontinued operations |
| 2,444 | ||||||
Amortization - Allowances for tenant owned improvements |
811 | | ||||||
Minority interests (non Unitholders) share of depreciation, amortization and net income |
(285 | ) | (285 | ) | ||||
(Gain) loss on sale of properties |
(17,584 | ) | (88,094 | ) | ||||
FFO as defined by NAREIT |
40,004 | 41,825 | ||||||
Less: Preferred dividends and dividends on unvested restricted stock |
(4,069 | ) | (3,780 | ) | ||||
FFO attributable to common shareholders |
35,935 | 38,045 | ||||||
FFO allocable to the minority Unitholders |
| 3,357 | ||||||
Diluted FFO available to common shareholders(1) |
$ | 35,935 | $ | 41,402 | ||||
Less: Lease commissions |
(4,908 | ) | (4,271 | ) | ||||
Tenant improvements, lease incentives and allowances for tenant owned improvements |
(25,193 | ) | (6,063 | ) | ||||
Building capital additions |
(3,954 | ) | (1,848 | ) | ||||
Lease intangible amortization(3) |
2,081 | 2,009 | ||||||
Impairment losses |
| 4,000 | ||||||
Straight line rent |
(7,104 | ) | (2,487 | ) | ||||
FFO allocable to the minority Unitholders |
3,194 | | ||||||
Funds available for distribution to common shareholders(2) |
$ | 51 | $ | 32,742 | ||||
1 | 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 | Adjustments to arrive at FAD do not include amounts associated with properties in unconsolidated entities. |
3 | Amortization associated with above/below market leases and lease incentives. |
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CARRAMERICA REALTY CORPORATION
Funds From Operations (cont)
(Unaudited and in thousands, except per share amounts) | Three Months Ended March 31, |
|||||||
2006 | 2005 | |||||||
Diluted net income per common share |
$ | 0.23 | $ | 1.54 | ||||
Add: Depreciation and amortization |
0.68 | 0.58 | ||||||
Gain on sale of properties |
(0.30 | ) | (1.46 | ) | ||||
Minority interest adjustment |
| 0.03 | ||||||
Adjustment for share difference |
| | ||||||
Diluted funds from operations available to common shareholders |
$ | 0.61 | $ | 0.69 | ||||
Weighted average common shares outstanding: |
||||||||
Diluted net income |
58,958 | 60,239 | ||||||
Diluted funds from operations |
58,958 | 60,239 |
-CONTINUED-
Carr America
Americas Workplace®
Supplemental Operating and Financial Data
For the Quarter Ended March 31, 2006
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 |
1 | |
Board of Directors / Executive Officers / Research Coverage |
2 | |
Regional Offices / Investor Relations / Information Requests |
3 | |
FINANCIAL HIGHLIGHTS |
||
Key Quarterly Financial Data |
4 | |
Same Store Results and Analysis |
5 | |
Financial Ratios |
6 | |
Share and Operating Partnership Unit Data |
7 | |
Debt Capitalization Summary |
8-9 | |
Corporate Investment Information |
10 | |
Unconsolidated Equity Investments |
11 | |
OPERATING ANALYSIS |
||
Current Summary of Operating Properties |
12-15 | |
Occupancy Summary and Lease Roll-over Schedule |
16-17 | |
Operating Portfolio Lease Economics |
18 | |
Top 25 Tenants by Rent |
19 | |
Current Development Activity by Market |
20 | |
Land Held for Future Development Schedule |
21 | |
Reconciliation of Financial Measures |
22-23 | |
Computation of Supplemental Measures |
24-25 |
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 Companys office properties are located in 12 markets across the United States.
CURRENT PORTFOLIO
(consolidated, stabilized; as of 3/31/06)
237 Properties
18.4 Million Square Feet
(consolidated/unconsolidated; as of 3/31/06)
287 Properties
26.4 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 | |
Moodys: |
Baa2 | |
Standard & Poors: |
BBB |
OCCUPANCY
(At March 31, 2006)
90.5% Consolidated Properties
90.8% Consolidated/Unconsolidated Properties
REGIONAL DISTRIBUTION
(consolidated; as of 3/31/06)
Based on POI* |
Based on Square Footage |
|||||
Pacific region |
53.83 | % | 55.51 | % | ||
Eastern region |
35.58 | % | 24.84 | % | ||
Central region |
6.06 | % | 11.35 | % | ||
Mountain region |
4.53 | % | 8.30 | % |
MARKETS
(consolidated; as of 3/31/06)
% of POI* | % of Sq. Ft. | |||||
Washington DC Metro |
35.58 | % | 24.84 | % | ||
San Francisco Bay Area |
29.56 | % | 28.37 | % | ||
Southern California |
15.76 | % | 14.61 | % | ||
Seattle/Portland |
8.51 | % | 12.53 | % | ||
Chicago |
3.19 | % | 6.64 | % | ||
Salt Lake City |
2.32 | % | 3.41 | % | ||
Denver |
2.21 | % | 4.89 | % | ||
Dallas |
1.79 | % | 2.54 | % | ||
Austin |
1.08 | % | 2.17 | % | ||
100.00 | % | 100.00 | % | |||
* | POI is Property Operating Income Property operating revenue less property operating expenses and real estate taxes. POI is the performance measure used to assess the results of our real estate property operations segment. We believe that the presentation of property operating income is helpful to investors as a measure of the operating performance of our office properties because it excludes items that do not relate to or are not indicative of operating performance of the properties (including interest, depreciation and amortization) and which can make periodic comparison of operating performance more difficult. |
BOARD OF DIRECTORS
Thomas A. Carr
Chairman of the Board and
Chief Executive Officer
CarrAmerica Realty Corporation
Bryce Blair
Chairman and Chief Executive Officer
AvalonBay Communities, Inc.
Andrew F. Brimmer
President
Brimmer & Company Inc
K. Dane Brooksher
Chairman of the Board
ProLogis
Joan Carter
President & COO
UM Holdings LTD
Patricia Diaz Dennis
Senior Vice President and Assistant General Counsel
SBC Services, Inc.
Philip L. Hawkins
President and Chief Operating Officer
CarrAmerica Realty Corporation
Robert E. Torray
Chairman
Robert E. Torray & Co., Inc.
Wesley S. Williams, Jr.
President and Co-Chairman
Lockhart Companies Inc.
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
Daniel Oppenheim
Bank of America Securities
(212) 847-5705
Ross Smotrich
Bear Stearns & Co.
(212) 272-8046
Louis Taylor
Deutsche Banc Alex. Brown
(212) 250-4912
Christopher Haley/Gregory Korondi
Wachovia Securities
(443)263-6773/(443) 263-6579
Carey Callaghan/Dennis Maloney
Goldman, Sachs & Co.
(212) 902-4351/(212) 902-1970
Jim Sullivan/Cedrik LaChance
Green Street Advisors
(949) 640-8780
Anthony Paolone
JPMorgan
(212) 622-6682
David Fick/John Guinee
Legg Mason Wood Walker, Incorporated
(410) 454-5018
David Harris
Lehman Brothers
(212) 526-5702
Steve Sakwa/Brian Legg
Merrill Lynch & Co.
(212) 449-0335/(212) 449-1433
Greg Whyte/David Cohen
Morgan Stanley Dean Witter
(212) 761-6331/(212) 761-8561
Jim Sullivan/Jamie Feldman
Prudential Securities
(212) 778-2515/ (212) 778-1724
Jonathan Litt/John Stewart
Salomon Smith Barney
(212) 816-0231/(212) 816-1685
(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. |
2
CORPORATE HEADQUARTERS
1850 K Street, NW
Suite 500
Washington, DC 20006
202-729-1700
REGIONAL OFFICES
Austin, Texas; Dallas, Texas; Denver Colorado; Salt Lake City, Utah
Jeffrey S. Pace, Managing Director
Chicago, Illinois
Gerald J. OMalley, Managing Director
Northern California
Christopher Peatross, Managing Director
Seattle/Portland
Clete Casper, Managing Director
Southern California
Malcolm ODonnell, Managing Director
Washington, D.C.
Phillip Thomas, Managing Director
STOCK EXCHANGE LISTINGS
New York Stock Exchange
COMMON STOCK TRADING SYMBOL
CRE
INVESTOR RELATIONS
CarrAmerica Realty Corporation
1850 K Street, NW
Washington, DC 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
Carr America
PLEASE VISIT OUR CORPORATE WEB SITE AT:
www.carramerica.com
3
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Key Quarterly Financial Data
($ and shares in thousands) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
Shares and Units: |
||||||||||||||||||||
Common Shares |
59,039 | 58,690 | 58,462 | 55,707 | 55,195 | |||||||||||||||
Outstanding Minority Units (a) |
5,106 | 5,117 | 5,169 | 5,185 | 5,214 | |||||||||||||||
Combined Shares and Minority Units (a) |
64,145 | 63,807 | 63,631 | 60,892 | 60,409 | |||||||||||||||
Weighted Average - Basic |
58,324 | 58,065 | 56,930 | 54,930 | 54,598 | |||||||||||||||
Weighted Average - Diluted |
58,958 | 58,481 | 57,534 | 55,466 | 60,239 | |||||||||||||||
Share Price: |
||||||||||||||||||||
At the End of the Period |
$ | 44.61 | $ | 34.63 | $ | 35.95 | $ | 36.18 | $ | 31.55 | ||||||||||
High During Period |
44.93 | 36.52 | 39.55 | 37.05 | 33.35 | |||||||||||||||
Low During Period |
34.46 | 31.22 | 34.48 | 30.75 | 30.00 | |||||||||||||||
Capitalization Summary: |
||||||||||||||||||||
Market Value of Common Equity (a,h) |
$ | 2,861,508 | $ | 2,209,636 | $ | 2,287,534 | $ | 2,203,073 | $ | 1,905,904 | ||||||||||
Preferred Equity |
201,250 | 201,250 | 201,250 | 201,250 | 201,250 | |||||||||||||||
Total Debt (f) |
1,942,936 | 1,888,527 | 1,912,964 | 1,793,230 | 1,943,660 | |||||||||||||||
Total Market Capitalization (g) |
5,005,694 | 4,299,413 | 4,401,748 | 4,197,553 | 4,050,814 | |||||||||||||||
Total Debt/Total Market Capitalization (g) |
38.8 | % | 43.9 | % | 43.5 | % | 42.7 | % | 48.0 | % | ||||||||||
Financial Information: |
||||||||||||||||||||
Total Assets |
$ | 3,188,830 | $ | 3,152,172 | $ | 3,161,280 | $ | 2,957,441 | $ | 3,107,489 | ||||||||||
Book Value of Real Estate Assets (before accumulated depreciation) |
3,352,180 | 3,280,427 | 3,212,264 | 3,141,818 | 3,147,841 | |||||||||||||||
Total Liabilities |
2,066,613 | 2,019,193 | 2,028,133 | 1,909,479 | 2,052,433 | |||||||||||||||
Total Minority Interest |
58,695 | 58,470 | 59,902 | 59,617 | 61,050 | |||||||||||||||
Total Shareholders Equity |
1,063,525 | 1,074,509 | 1,073,245 | 988,345 | 994,006 | |||||||||||||||
Total Operating Revenues |
123,144 | 123,946 | 114,281 | 113,588 | 120,814 | |||||||||||||||
Property Operating Income (i) |
75,056 | 75,550 | 69,832 | 70,703 | 75,367 | |||||||||||||||
Property Operating Income Percent of Revenue (i) |
64.0 | % | 65.1 | % | 64.0 | % | 65.2 | % | 65.4 | % | ||||||||||
EBITDA (e) |
71,239 | 76,497 | 71,493 | 72,605 | 77,371 | |||||||||||||||
Interest Coverage Ratio (b,e,g) |
2.3 | 2.6 | 2.5 | 2.6 | 2.6 | |||||||||||||||
Interest Coverage Ratio (c,e,g) |
2.3 | 2.6 | 2.5 | 2.6 | 2.6 | |||||||||||||||
Fixed Charge Coverage Ratio (b,e,g) |
2.0 | 2.2 | 2.1 | 2.2 | 2.2 | |||||||||||||||
Fixed Charge Coverage Ratio (c,e,g) |
2.0 | 2.2 | 2.1 | 2.2 | 2.2 | |||||||||||||||
Net income |
17,488 | 28,182 | 13,627 | 11,868 | 95,042 | |||||||||||||||
Diluted FFO available to common shareholders (d) |
35,935 | 39,357 | 40,096 | 42,271 | 41,402 | |||||||||||||||
Funds available for distribution to common shareholders coverage ratio (j) |
0.0 | (0.2 | ) | 0.6 | 1.0 | 1.1 | ||||||||||||||
Dividends Declared |
0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||
Net-Straight Line Revenue Adjustment |
7,104 | 7,082 | 3,817 | (331 | ) | 2,487 | ||||||||||||||
Consolidated Portfolio: |
||||||||||||||||||||
Buildings |
237 | 235 | 243 | 239 | 238 | |||||||||||||||
Total Square Footage (in thousands) |
18,407 | 18,366 | 18,687 | 18,608 | 18,686 | |||||||||||||||
Current Occupancy |
90.5 | % | 89.4 | % | 87.6 | % | 88.3 | % | 88.6 | % | ||||||||||
Consolidated and Unconsolidated Portfolio: |
||||||||||||||||||||
Buildings |
287 | 285 | 294 | 290 | 287 | |||||||||||||||
Total Square Footage (in thousands) |
26,376 | 26,296 | 27,040 | 26,966 | 26,226 | |||||||||||||||
Current Occupancy |
90.8 | % | 90.0 | % | 88.5 | % | 88.4 | % | 88.8 | % |
(a) | Minority partnership units are included in market value computation. |
(b) | Excluding capitalized interest. See page 25 for computation. |
(c) | Including capitalized interest. See page 25 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. In the first quarter 2006, minority units were antidilutive. See page 22 for a reconciliation of diluted FFO to net income. |
(e) | Excludes impairment charges and prepayment penalties on debt. See page 23 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 6 for definintion. |
(h) | Market value based on end of period stock price. |
(i) | Property operating income - Property operating revenue less property operating expenses and real estate taxes (see page 1). |
See page 25 for reconciliation to net income. |
(j) | See page 24 for reconciliation of funds available for distribution to net income, definition and computation of ratio. |
4
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Same Store Operating Property Results
Three Months Ended March 31, |
% Change |
||||||||||
(In thousands) | 2006 | 2005 | |||||||||
Real estate rental revenue |
$ | 108,525 | $ | 108,772 | -0.2 | % | |||||
Real estate operating expenses |
39,328 | 37,640 | 4.5 | % | |||||||
Total same store property operating income* |
$ | 69,197 | $ | 71,132 | -2.7 | % | |||||
Straight-line rent adjustment |
$ | 6,530 | $ | 2,996 | 118.0 | % | |||||
Average occupancy |
89.8 | % | 87.7 | % | |||||||
Same store square footage |
16,672,579 | ||||||||||
* | Property operating income is the performance measure used to assess the results of our real estate property segment. We believe that the presentation of property operating income is helpful to investors as a measure of the operating performance of our office properties because it excludes items that do not relate to or are not indicative of operating performance of the properties (including interest, depreciation and amortization) and which can make periodic comparison of operating performance more difficult. |
5
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Financial Ratios
Financial Position Ratios for Operations:
March 31, 2006 |
December 31, 2005 |
|||||
Total Debt/Total Capitalization (Book Value) (1) |
62.6 | % | 61.8 | % | ||
Total Debt/Total Capitalization (Market) (2) |
38.8 | % | 43.9 | % |
Operating Ratios for Operations:
Three Months Ended March 31, |
||||||
2006 | 2005 | |||||
Secured Property Operating Income/EBITDA (3) |
15.9 | % | 15.2 | % | ||
Interest Coverage (4) |
||||||
Including capitalized interest |
2.3 | 2.6 | ||||
Excluding capitalized interest |
2.3 | 2.6 | ||||
Fixed Charge Coverage (5) |
||||||
Including capitalized interest |
2.0 | 2.2 | ||||
Excluding capitalized interest |
2.0 | 2.2 | ||||
G&A as a % of Revenue (6) |
10.1 | % | 8.2 | % |
(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. The components of the calculation are presented in the following table: |
(In thousands) | 3/31/2006 | 12/31/2005 | ||||
Total debt |
$ | 1,942,936 | $ | 1,888,527 | ||
Stockholders equity |
1,063,525 | 1,074,509 | ||||
Minority interest |
58,692 | 58,470 | ||||
Rents received in advance and security deposits |
38,967 | 32,534 | ||||
Total capitalization (book value) |
$ | 3,104,120 | $ | 3,054,040 | ||
(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. See page 4 for components of calculation. |
(3) | See page 23 for a reconciliation of EBITDA to net income and the computation of these amounts. Secured property 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 and prepayment penalties on debt). See page 25 for calculation. |
(5) | Calculated as net income less interest expense (including or excluding capitalized interest and prepayment penalties on debt), 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 and prepayment penalties on debt). See page 25 for calculation. |
(6) | General and administrative expense divided by total revenue. |
(7) | We believe these ratios are helpful to investors enabling the investors to compare CarrAmerica against other companies or industry benchmarks. |
6
CARRAMERICA REALTY CORPORATION
AND SUBSIDIARIES
Share and Operating Partnership Data
The following table sets forth our common shares and dividend paying operating partnership units outstanding at March 31, 2006 and December 31, 2005, and our weighted average common shares and dividend paying operating units outstanding for the quarters ended March 31, 2006 and 2005.
(In thousands) | CarrAmerica Realty Corporation Common Shares Outstanding |
CarrAmerica Realty Corporation Restricted Common Shares Outstanding |
Dividend Paying Units Outstanding (a) | |||
Outstanding as of |
||||||
March 31, 2006 |
58,448 | 591 | 5,106 | |||
December 31, 2005 |
58,192 | 498 | 5,117 | |||
Weighted average for the three months ended March 31, |
||||||
2006 |
58,324 | 566 | 5,112 | |||
2005 |
54,598 | 449 | 5,223 |
Notes:
(a) | Operating partnership units are redeemable for cash or common shares, at our option, on a one-for-one basis. |
* | We have 8,050,000 shares of Series E Cumulative Redeemable Preferred stock outstanding as of March 31, 2006 which are not included in the table above. The quarterly dividend is $0.46875 per share. |
7
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Debt Capitalization Summary
Secured Mortgages Payable
($ in thousands) Description of Notes/ |
Property | Principal Outstanding |
Interest Rate |
Maturity Date |
2006 | 2007 | 2008 | 2009 | 2010 & Thereafter | ||||||||||||||||
Midland Loan Services |
Palomar Oaks | $ | 8,753 | 8.85 | % | 4/1/2009 | $ | 193 | $ | 278 | $ | 304 | $ | 7,978 | $ | | |||||||||
Northwest Mutual |
1255 23rd St. | 35,446 | 8.12 | % | 4/1/2009 | 534 | 778 | 842 | 33,292 | | |||||||||||||||
1730 Pennsylvania | |||||||||||||||||||||||||
International Square | |||||||||||||||||||||||||
Northwest Mutual |
1255 23rd St. | 170,010 | 8.12 | % | 4/1/2009 | 2,560 | 3,730 | 4,040 | 159,680 | | |||||||||||||||
1730 Pennsylvania | |||||||||||||||||||||||||
International Square | |||||||||||||||||||||||||
New York Life Insurance |
South Coast | 13,747 | 7.13 | % | 6/10/2009 | 235 | 335 | 359 | 12,818 | | |||||||||||||||
TransAmerica Life Insurance |
1775 Pennsylvania | 11,113 | 7.63 | % | 9/1/2009 | 133 | 188 | 203 | 10,589 | | |||||||||||||||
Teachers Insurance and Annuity |
7000 W. Lantana | 11,867 | 5.70 | % | 1/1/2015 | 158 | 249 | 264 | 279 | 10,917 | |||||||||||||||
$ | 250,936 | $ | 3,813 | $ | 5,558 | $ | 6,012 | $ | 224,636 | $ | 10,917 | ||||||||||||||
Notes Payable
Lender |
Security |
Principal Outstanding |
Interest Rate |
Maturity Date |
2006 | |||||||
EquiTrust Life Insurance Co. |
Letter of Credit | $ | 2,999 | 8.25 | % | 11/1/2006 | 2,999 |
8
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Debt Capitalization Summary - Continued
Senior Unsecured Notes
($ in thousands) | Principal Outstanding |
Interest Rate |
Maturity Date |
2006 | 2007 | 2008 | 2009 | 2010 | 2011 Thereafter | |||||||||||||||||
7.375% notes due 2007 |
$ | 125,000 | 7.375 | % | 7/1/2007 | $ | | $ | 125,000 | $ | | $ | | $ | | $ | | |||||||||
6.875% notes due 2008 |
100,000 | 6.875 | % | 3/1/2008 | | | 100,000 | | | | ||||||||||||||||
3.625% notes due 2009* |
225,000 | 3.625 | % | 4/1/2009 | | | | 225,000 | | | ||||||||||||||||
7.125% notes due 2012 |
400,000 | 7.125 | % | 1/15/2012 | | | | | | 400,000 | ||||||||||||||||
5.261% notes due 2007 |
50,000 | 5.261 | % | 11/30/2007 | | 50,000 | | | | | ||||||||||||||||
5.250% notes due 2007 |
175,000 | 5.250 | % | 11/30/2007 | | 175,000 | | | | | ||||||||||||||||
5.125% notes due 2011 |
200,000 | 5.125 | % | 9/1/2011 | | | | | | 200,000 | ||||||||||||||||
5.500% notes due 2010 |
250,000 | 5.500 | % | 12/15/2010 | | | | | 250,000 | | ||||||||||||||||
$ | 1,525,000 | $ | | $ | 350,000 | $ | 100,000 | $ | 225,000 | $ | 250,000 | $ | 600,000 | |||||||||||||
* | See hedging |
Hedging Instruments
($ in thousands) | Notional Amount |
Maturity Date |
Reset | Terms | ||||
Interest rate swap1 |
100,000 | 4/1/2009 | Arrears | 6ML+.2675% |
1 | Interest rate on $100M of 3.625% notes including effect of interest rate swap is 5.76% |
Unsecured Line of Credit
($ in thousands) Lender |
Available Commitment |
Interest Rate |
Maturity Date |
Amount Outstanding at Beginning of Year |
Advances | Repayments | Amount of Period |
Letters of Credit | |||||||||||||||
JPMorgan Chase Bank |
$ | 500,000 | L+.65 | % | 6/20/2007 | $ | 120,000 | $ | 118,000 | $ | 74,000 | $ | 164,000 | $ | 14,199 |
Bond Covenant Requirements |
Unsecured Credit Facility Covenant Requirements | |
Minimun Annual Service Charge > 1.50X |
Minimum Ratio of Annual EBITDA to Interest Expense > 2 to 1 | |
Maximum Total Indebtedness to Total Assets < 60% |
Minimum Ratio of Annual EBITDA to Fixed Charges of at Least 1.5 to 1 | |
Maximum Total Secured Debt to Total Assets < 40% |
Maximum Ratio of Aggregate Unsecured Debt to Tangible Fair Market | |
Minimum Total Unencumbered Assets to Unsecured Indebtedness > 150% |
Value of Unencumbered Assets > 60% | |
-As of March 31, 2006, we are in compliance with our bond covenants. |
Maximum Ratio of Total Debt to Tangible Fair Market | |
Value of Assets > 60% | ||
Maximum Ratio of Total Secured Debt to Tangible Fair Market | ||
Value of Assets > 30% | ||
-As of March 31, 2006, we are in compliance with our credit facility covenants. |
9
CARRAMERICA REALTY CORPORATION
AND SUBSIDIARIES
Investment Balances
($ in thousands) | Accounting Method |
Percentage Ownership |
Investment Balance as of March 31, 2006 | |||||
Carr Office Park LLC |
Equity | 35 | % | $ | 39,538 | |||
575 7th St. |
Equity | 30 | % | 7,527 | ||||
1919 Pennsylvania Assoc. |
Equity | 49 | % | 16,359 | ||||
1888 Century Plaza |
Equity | 35 | % | 14,863 | ||||
North Dallas Town Center |
Equity | 20 | % | 15,832 | ||||
Colonnade |
Equity | 20 | % | 9,544 | ||||
1201 F Street |
Equity | 35 | % | 20,191 | ||||
Custer Court |
Equity | 49 | % | 2,119 | ||||
Agilquest |
Cost | 19 | % | 1,659 | ||||
WCM JV |
Equity | 16 | % | 1,216 | ||||
300 W. Sixth Street (1) |
Equity | 20 | % | 21 | ||||
Pleasant Partners |
Equity | 20 | % | | ||||
10UCP |
Equity | 20 | % | | ||||
$ | 128,869 | |||||||
(1) | Sole asset was sold in October 2005. |
10
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Unconsolidated Equity Investments
As of and for the Three Months Ended March 31, 2006
($ in thousands) | 1888 Century |
Custer Court |
1201 F St. | Carr Office Park |
WCM JV | 1919 Penn Assoc. |
575 7th St. |
10 UCP |
North Dallas Town |
Pleasant Partners |
Colonnade | ||||||||||||||||||||||
Equity1 |
14,984 | 1,838 | 21,326 | 61,882 | 1,216 | 17,285 | 3,261 | (10,517 | ) | 15,768 | 19,745 | 9,565 | |||||||||||||||||||||
Loans payable2 |
28,284 | 5,140 | | 74,602 | | 38,191 | 35,415 | 51,600 | | 20,000 | 19,660 | ||||||||||||||||||||||
Percentage ownership |
35 | % | 49 | % | 35 | % | 35 | % | 16 | % | 49 | % | 30 | % | 20 | % | 20 | % | 20 | % | 20 | % | |||||||||||
Total revenue |
3,462 | 597 | 3,146 | 16,862 | 377 | 5,190 | 4,162 | 6,768 | 2,837 | 6,619 | 4,928 | ||||||||||||||||||||||
Expenses |
|||||||||||||||||||||||||||||||||
Operating expenses |
1,484 | 270 | 1,188 | 6,920 | 62 | 1,835 | 1,712 | 2,273 | 1,107 | 2,208 | 2,233 | ||||||||||||||||||||||
Interest expense |
1,059 | 158 | 640 | 3,690 | | 1,432 | 1,516 | 4,809 | | 1,544 | 1,224 | ||||||||||||||||||||||
Depreciation/amortization |
949 | 228 | 616 | 5,323 | 155 | 762 | 1,215 | 1,621 | 1,071 | 2,732 | 2,647 | ||||||||||||||||||||||
Total expenses |
3,492 | 656 | 2,444 | 15,933 | 217 | 4,029 | 4,443 | 8,703 | 2,178 | 6,484 | 6,104 | ||||||||||||||||||||||
Gain on sale3 |
| | | | | | 25 | | | | | ||||||||||||||||||||||
Net income |
(30 | ) | (59 | ) | 702 | 929 | 160 | 1,161 | (256 | ) | (1,935 | ) | 659 | 135 | (1,176 | ) | |||||||||||||||||
Equity in earnings |
(9 | ) | (32 | ) | 239 | 487 | 26 | 575 | (129 | ) | | 132 | 82 | (235 | ) | ||||||||||||||||||
1 | CarrAmericas share of the investees equity |
2 | CarrAmericas percentage of investee debt |
3 | CarrAmericas share of gain is recorded on the gain line of its income statement and not through equity in earnings. |
11
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Current Summary of Portfolio Operating Properties As Of March 31, 2006
Net Rentable Area in Square Feet(1) |
Percent Leased(2) |
Number of Buildings | |||||
Consolidated Properties |
|||||||
Downtown Washington, D.C.: |
|||||||
International Square |
1,016,406 | 93.7 | % | 3 | |||
900 19th Street |
101,296 | 100.0 | % | 1 | |||
2550 M Street |
192,393 | 100.0 | % | 1 | |||
1730 Pennsylvania Avenue |
229,174 | 96.5 | % | 1 | |||
1775 Pennsylvania Avenue |
143,857 | 98.6 | % | 1 | |||
Commercial National Bank Building |
200,266 | 99.1 | % | 1 | |||
1255 23rd Street |
304,721 | 97.0 | % | 1 | |||
1747 Pennsylvania Avenue |
151,846 | 100.0 | % | 1 | |||
1717 Pennsylvania Avenue |
184,446 | 100.0 | % | 1 | |||
Downtown Washington, D.C. |
2,524,405 | 96.6 | % | 11 | |||
Suburban Washington, D.C.: |
|||||||
Canal Center |
495,694 | 92.6 | % | 4 | |||
TransPotomac V Plaza |
97,634 | 89.2 | % | 1 | |||
One Rock Spring Plaza |
205,298 | 100.0 | % | 1 | |||
Reston Crossing |
327,788 | 100.0 | % | 2 | |||
Commonwealth Tower |
339,599 | 100.0 | % | 1 | |||
Park Place |
166,134 | 91.3 | % | 1 | |||
Tysons International |
416,340 | 71.2 | % | 2 | |||
Suburban Washington, D.C. |
2,048,487 | 91.1 | % | 12 | |||
Washington, D.C. Metro |
4,572,892 | 94.2 | % | 23 | |||
Southern California, |
|||||||
Los Angeles: |
|||||||
Warner Center |
344,196 | 92.6 | % | 12 | |||
Warner Premier |
61,210 | 93.0 | % | 1 | |||
Los Angeles |
405,406 | 92.6 | % | 13 | |||
Orange County |
|||||||
Scenic Business Park |
139,359 | 94.9 | % | 4 | |||
Harbor Corporate Park |
151,415 | 99.1 | % | 4 | |||
Von Karman |
104,375 | 100.0 | % | 1 | |||
Pacific Corporate Plaza |
124,196 | 100.0 | % | 3 | |||
South Coast Executive Center |
154,959 | 100.0 | % | 2 | |||
Bay Technology Center |
107,481 | 100.0 | % | 2 | |||
Orange County |
781,785 | 98.9 | % | 16 | |||
San Diego: |
|||||||
Del Mar Corporate Plaza |
124,345 | 100.0 | % | 2 | |||
Lightspan |
66,622 | 79.0 | % | 1 | |||
La Jolla Spectrum |
156,653 | 100.0 | % | 2 | |||
Palomar Oaks Technology Park |
170,705 | 99.4 | % | 6 | |||
Town Center Technology Park IV |
105,358 | 100.0 | % | 1 | |||
Torrey Pines Research Center |
81,816 | 100.0 | % | 1 | |||
Highlands Corporate Center |
203,086 | 79.8 | % | 5 | |||
Town Center Technology Park |
182,120 | 100.0 | % | 3 | |||
Carroll Vista |
107,579 | 100.0 | % | 3 | |||
Corporate Plaza II |
116,195 | 94.6 | % | 2 | |||
Chancellor Park |
187,990 | 93.2 | % | 2 | |||
San Diego |
1,502,469 | 95.0 | % | 28 | |||
Southern California |
2,689,660 | 95.8 | % | 57 |
12
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Current Summary of Portfolio Operating Properties As Of March 31, 2006
Net Rentable Area in Square Feet(1) |
Percent Leased(2) |
Number of Buildings | |||||
Northern California, |
|||||||
San Francisco Bay Area: |
|||||||
Bayshore Centre |
94,874 | 100.0 | % | 1 | |||
Rincon Centre |
201,178 | 53.9 | % | 3 | |||
Valley Centre II |
212,082 | 89.4 | % | 4 | |||
Valley Office Centre |
68,917 | 100.0 | % | 2 | |||
Valley Centre |
102,291 | 100.0 | % | 2 | |||
Rio Robles |
368,178 | 100.0 | % | 7 | |||
Baytech Business Park |
300,000 | 74.7 | % | 4 | |||
3571 North First Street |
116,459 | 0.0 | % | 1 | |||
Oakmead West |
425,981 | 85.0 | % | 7 | |||
Clarify Corporate Center |
258,048 | 100.0 | % | 4 | |||
Valley Technology Center |
460,590 | 98.3 | % | 7 | |||
Golden Gateway Commons |
276,190 | 76.5 | % | 3 | |||
Techmart Commerce Center |
262,278 | 96.4 | % | 1 | |||
Fremont Technology Park |
139,304 | 71.9 | % | 3 | |||
San Mateo Center |
207,882 | 85.2 | % | 3 | |||
Mountain View Gateway Center |
236,400 | 100.0 | % | 2 | |||
Sunnyvale Technology Center |
165,520 | 100.0 | % | 5 | |||
Stanford Research Park |
89,595 | 100.0 | % | 2 | |||
500 Forbes |
155,685 | 100.0 | % | 1 | |||
Corporate Technology Centre |
508,230 | 68.1 | % | 7 | |||
Mission Towers I |
281,178 | 100.0 | % | 1 | |||
Fairchild Drive |
131,561 | 100.0 | % | 2 | |||
2711 North First Street |
74,621 | 22.6 | % | 1 | |||
3553 North First Street |
85,585 | 100.0 | % | 1 | |||
San Francisco |
5,222,627 | 85.8 | % | 74 | |||
Portland, OR: |
|||||||
Sunset Corporate Park |
132,531 | 70.6 | % | 3 | |||
Rock Creek Corp Center |
142,662 | 100.0 | % | 3 | |||
Portland |
275,193 | 85.8 | % | 6 | |||
Seattle, WA: |
|||||||
Redmond Hilltop |
90,880 | 84.1 | % | 2 | |||
Canyon Park |
316,978 | 90.5 | % | 6 | |||
Willow Creek |
96,179 | 100.0 | % | 1 | |||
Willow Creek Corp. Center |
319,376 | 85.2 | % | 6 | |||
Canyon Park Commons |
176,846 | 100.0 | % | 3 | |||
Redmond East |
398,320 | 68.3 | % | 10 | |||
Canyon Park Commons |
95,290 | 100.0 | % | 1 | |||
North Creek Corporate Center |
94,048 | 95.0 | % | 3 | |||
West Willows Technology Center |
155,830 | 100.0 | % | 3 | |||
Plaza at North Creek |
193,302 | 92.0 | % | 1 | |||
Casey Family |
77,179 | 100.0 | % | 1 | |||
Dexter Avenue |
17,725 | 100.0 | % | 2 | |||
Seattle |
2,031,953 | 88.3 | % | 39 |
13
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Current Summary of Portfolio Operating Properties As Of March 31, 2006
Net Rentable Area in Square Feet(1) |
Percent Leased(2) |
Number of Buildings | |||||
Austin, TX: |
|||||||
City View Centre |
136,106 | 92.3 | % | 3 | |||
City View Centre |
128,716 | 100.0 | % | 1 | |||
7000 W. Lantana |
133,817 | 100.0 | % | 2 | |||
Austin |
398,639 | 97.4 | % | 6 | |||
Chicago, IL: |
|||||||
Butterfield Road |
364,971 | 80.8 | % | 2 | |||
The Crossings |
289,599 | 87.1 | % | 1 | |||
Parkway North I |
251,874 | 93.8 | % | 1 | |||
Bannockburn |
315,287 | 73.8 | % | 3 | |||
Chicago |
1,221,731 | 83.2 | % | 7 | |||
Dallas, TX: |
|||||||
Cedar Maple Plaza |
113,010 | 86.2 | % | 3 | |||
Tollway Plaza |
354,458 | 95.3 | % | 2 | |||
Dallas |
467,468 | 93.1 | % | 5 | |||
Denver, CO: |
|||||||
Harlequin Plaza |
319,069 | 81.7 | % | 2 | |||
Quebec Court I |
130,000 | 100.0 | % | 1 | |||
Quebec Court II |
157,294 | 100.0 | % | 1 | |||
Quebec Centre |
106,865 | 90.1 | % | 3 | |||
Dry Creek |
185,957 | 88.6 | % | 2 | |||
Denver |
899,185 | 90.0 | % | 9 | |||
Salt Lake City, UT: |
|||||||
Sorenson Research Park |
321,475 | 96.0 | % | 6 | |||
Wasatch Corporate Center |
227,889 | 98.3 | % | 4 | |||
Creekside |
78,000 | 100.0 | % | 1 | |||
Salt Lake City |
627,364 | 97.3 | % | 11 | |||
TOTAL CONSOLIDATED PROPERTIES: |
18,406,712 | 237 | |||||
WEIGHTED AVERAGE @ Mar. 31, 2006 |
90.5 | % |
14
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Current Summary of Portfolio Operating Properties As of March 31, 2006
Property |
Companys 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 | % | 240,399 | 99.4 | % | 1 | ||||
2025 M Street |
49 | % | 174,763 | 100.0 | % | 1 | ||||
1201 F Street |
35 | % | 221,889 | 100.0 | % | 1 | ||||
Bond Building |
15 | % | 162,182 | 100.0 | % | 1 | ||||
Terrell Place |
30 | % | 393,335 | 88.8 | % | 1 | ||||
Portland, OR: |
||||||||||
GM Call Center |
16 | % | 103,279 | 100.0 | % | 1 | ||||
Chicago |
||||||||||
Parkway |
35 | % | 745,277 | 96.6 | % | 6 | ||||
Dallas |
||||||||||
Royal Ridge |
35 | % | 505,282 | 99.5 | % | 4 | ||||
Custer Court |
49 | % | 120,800 | 94.4 | % | 1 | ||||
North Dallas Town Center |
20 | % | 391,251 | 98.7 | % | 3 | ||||
Colonnade |
20 | % | 977,850 | 85.4 | % | 3 | ||||
Austin |
||||||||||
Riata Corporate |
35 | % | 671,998 | 88.1 | % | 8 | ||||
Riata Crossing |
35 | % | 324,963 | 100.0 | % | 4 | ||||
Denver |
||||||||||
Panorama |
35 | % | 673,713 | 97.2 | % | 6 | ||||
San Francisco Bay Area |
||||||||||
CarrAmerica Corporate Center |
20 | % | 1,006,726 | 87.0 | % | 7 | ||||
Los Angeles |
||||||||||
10UCP |
20 | % | 771,277 | 93.9 | % | 1 | ||||
1888 Century Park East |
35 | % | 484,154 | 66.2 | % | 1 | ||||
TOTAL UNCONSOLIDATED PROPERTIES: |
7,969,138 | 50 | ||||||||
WEIGHTED AVERAGE @ Mar. 31, 2006 |
91.6 | % | ||||||||
ALL OPERATING PROPERTIES |
||||||||||
TOTAL: |
26,375,850 | 287 | ||||||||
WEIGHTED AVERAGE @ Mar. 31, 2006 |
90.8 | % |
(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, 2006. |
15
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Lease Rollover Schedule - Stabilized Properties
Market |
Square Feet |
As of Mar. 31, 2006 | Vacant Sq. Feet |
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 Thereafter | ||||||||||||||||||
Current Occupancy |
YTD Ave. Occupancy |
|||||||||||||||||||||||||||||||
Los Angeles |
405,406 | 92.6 | % | 93.6 | % | 29,850 | 110,916 | 64,726 | 37,349 | 30,617 | 31,437 | 29,092 | 52,787 | 11,514 | 7,118 | | | |||||||||||||||
Orange County |
781,785 | 98.9 | % | 99.0 | % | 8,406 | 30,877 | 146,181 | 278,650 | 170,361 | 60,540 | 86,770 | | | | | | |||||||||||||||
San Diego |
1,502,469 | 95.0 | % | 94.1 | % | 75,172 | 93,669 | 82,336 | 100,828 | 211,892 | 190,203 | 200,368 | 328,570 | 2,868 | 3,565 | 136,104 | 76,894 | |||||||||||||||
San Francisco Bay Area |
5,222,627 | 85.8 | % | 87.3 | % | 743,693 | 741,131 | 543,832 | 615,005 | 797,119 | 561,313 | 372,340 | 303,617 | 158,249 | 152,555 | 76,410 | 157,363 | |||||||||||||||
Seattle |
2,031,953 | 88.3 | % | 82.0 | % | 238,088 | 133,373 | 61,159 | 118,833 | 415,277 | 172,073 | 109,581 | 51,435 | 150,562 | 39,541 | 184,587 | 357,444 | |||||||||||||||
Portland |
275,192 | 85.8 | % | 85.8 | % | 39,005 | | 6,909 | | 13,756 | 184,304 | 20,535 | 10,683 | | | | | |||||||||||||||
Denver |
899,185 | 90.0 | % | 90.8 | % | 90,197 | 12,786 | 34,044 | 308,295 | 135,911 | 37,627 | 96,771 | 20,763 | 32,791 | | 130,000 | | |||||||||||||||
Salt Lake City |
627,364 | 97.3 | % | 97.1 | % | 16,782 | 10,210 | 52,286 | 159,754 | 163,692 | 111,217 | 52,315 | 42,873 | 18,235 | | | | |||||||||||||||
Chicago |
1,221,731 | 83.2 | % | 69.9 | % | 205,675 | 44,018 | 51,110 | 127,944 | 92,824 | 130,022 | 110,610 | 33,393 | 132,836 | 13,732 | 29,201 | 250,366 | |||||||||||||||
Austin |
398,639 | 97.4 | % | 96.6 | % | 10,492 | 36,169 | 51,210 | 20,321 | 135,568 | 7,455 | | | 8,708 | 128,716 | | | |||||||||||||||
Dallas |
467,468 | 93.1 | % | 92.4 | % | 32,072 | 9,773 | 46,045 | 132,816 | 122,443 | 65,312 | 39,788 | 4,464 | 10,398 | 4,357 | | | |||||||||||||||
Washington, D.C. |
||||||||||||||||||||||||||||||||
Downtown |
2,524,405 | 96.6 | % | 96.0 | % | 84,868 | 385,214 | 394,319 | 130,961 | 245,175 | 50,027 | 58,972 | 125,316 | 260,970 | 109,343 | 17,514 | 661,726 | |||||||||||||||
Suburban |
2,048,487 | 91.1 | % | 91.1 | % | 181,446 | 245,939 | 172,383 | 209,466 | 434,693 | 206,640 | 295,622 | 101,516 | 24,703 | 26,834 | 123,028 | 26,217 | |||||||||||||||
Total |
18,406,711 | 90.5 | % | 89.2 | % | 1,755,746 | 1,854,075 | 1,706,540 | 2,240,222 | 2,969,328 | 1,808,170 | 1,472,764 | 1,075,417 | 811,834 | 485,761 | 696,844 | 1,530,010 |
16
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Rent Rollover Schedule of Minimum Annualized Base Rent - Stabilized Properties
Market |
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 & Thereafter | ||||||||||||||||||||||
Los Angeles |
$ | 3,443,070 | $ | 1,676,539 | $ | 856,185 | $ | 750,167 | $ | 781,489 | $ | 551,124 | $ | 1,221,614 | $ | 274,942 | $ | 186,670 | $ | | $ | | |||||||||||
Orange County |
663,568 | 2,789,992 | 5,349,702 | 3,349,250 | 1,377,327 | 2,074,694 | | | | | | ||||||||||||||||||||||
San Diego |
2,460,035 | 1,930,648 | 3,185,908 | 6,717,445 | 4,927,010 | 4,853,911 | 7,138,789 | 113,223 | 142,122 | 4,220,788 | 3,768,742 | ||||||||||||||||||||||
San Francisco Bay Area |
15,249,362 | 14,164,691 | 10,397,657 | 15,747,770 | 9,912,144 | 11,385,385 | 6,643,393 | 3,906,918 | 2,095,749 | 2,680,818 | 7,457,379 | ||||||||||||||||||||||
Seattle |
1,635,719 | 791,072 | 1,846,324 | 6,855,316 | 2,320,841 | 1,515,752 | 644,281 | 2,195,046 | 455,711 | 3,295,171 | 5,629,548 | ||||||||||||||||||||||
Portland |
| 74,617 | | 126,985 | 3,292,449 | 399,794 | 148,286 | | | | | ||||||||||||||||||||||
Denver |
230,196 | 502,069 | 4,958,352 | 1,935,789 | 541,825 | 1,399,857 | 325,764 | 522,048 | | 2,014,756 | | ||||||||||||||||||||||
Salt Lake City |
121,189 | 824,181 | 2,498,555 | 1,797,094 | 1,729,043 | 622,871 | 777,078 | 285,276 | | | | ||||||||||||||||||||||
Chicago |
583,598 | 883,103 | 2,224,542 | 1,360,886 | 2,185,682 | 1,701,330 | 473,418 | 1,876,377 | 165,787 | 503,348 | 2,730,846 | ||||||||||||||||||||||
Austin |
669,162 | 1,017,795 | 361,359 | 2,297,539 | 146,434 | | | 159,591 | 1,651,542 | | | ||||||||||||||||||||||
Dallas |
214,660 | 965,210 | 3,259,327 | 2,539,857 | 1,440,899 | 928,694 | 100,660 | 241,100 | 125,532 | | | ||||||||||||||||||||||
Washington, D.C. |
|||||||||||||||||||||||||||||||||
Downtown |
11,925,937 | 14,414,566 | 4,575,663 | 9,202,921 | 2,144,332 | 2,294,687 | 5,146,143 | 11,879,825 | 4,175,720 | 811,744 | 30,717,614 | ||||||||||||||||||||||
Suburban |
8,123,859 | 5,434,611 | 6,438,622 | 9,873,901 | 6,521,726 | 9,393,150 | 3,301,839 | 845,501 | 857,865 | 3,972,636 | 1,066,927 | ||||||||||||||||||||||
Total |
$ | 45,320,355 | $ | 45,469,094 | $ | 45,952,196 | $ | 62,554,920 | $ | 37,321,201 | $ | 37,121,249 | $ | 25,921,265 | $ | 22,299,847 | $ | 9,856,698 | $ | 17,499,261 | $ | 51,371,056 |
17
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Operating Portfolio Lease Economics
1st Quarter 2006 | |||||||||||||||
Market |
Total Executed Sq. Feet |
New GAAP Rental Rate |
% Change in GAAP Rental Rate* |
Ave. Lease Term in Years |
Lease Commissions /Sq. Ft. |
Tenant Improvements and Allowances /Sq. Ft. |
Total TIs and LCs /Sq. Ft. | ||||||||
Austin |
2,701 | 22.13 | 11.26 | % | 2.00 | 0.89 | 2.00 | 2.89 | |||||||
Chicago |
105,180 | 19.03 | -21.48 | % | 9.04 | 10.46 | 37.11 | 47.57 | |||||||
Dallas |
23,595 | 25.32 | 2.58 | % | 5.16 | 1.61 | 9.53 | 11.14 | |||||||
Denver |
1,774 | 16.12 | -22.32 | % | 1.79 | 1.73 | 3.47 | 5.20 | |||||||
Los Angeles |
31,564 | 28.17 | -2.14 | % | 5.14 | 7.53 | 26.49 | 34.02 | |||||||
Orange County |
6,391 | 28.95 | 7.62 | % | 30.00 | | | | |||||||
Portland |
| | | | | | | ||||||||
Salt Lake City |
13,327 | 18.06 | 12.45 | % | 1.77 | 0.44 | 1.93 | 2.37 | |||||||
San Diego |
111,136 | 28.64 | 10.79 | % | 4.09 | 4.24 | 11.31 | 15.55 | |||||||
San Francisco Bay |
101,580 | 25.33 | -27.95 | % | 5.46 | 8.27 | 26.99 | 35.26 | |||||||
Seattle |
159,500 | 19.18 | -2.28 | % | 5.52 | 6.18 | 17.48 | 23.66 | |||||||
Washington, D.C. |
|||||||||||||||
Suburban |
32,021 | 33.33 | 1.18 | % | 4.27 | 2.87 | 10.72 | 13.59 | |||||||
Downtown |
59,386 | 43.96 | 13.46 | % | 6.94 | 5.67 | 33.28 | 38.95 | |||||||
Total |
648,155 | 28.08 | -4.99 | % | 5.66 | 6.35 | 21.77 | 28.12 | |||||||
1st Quarter 2005 | |||||||||||||||
Market |
Total Executed Sq. Feet |
New GAAP Rental Rate |
% Change in GAAP Rental Rate* |
Ave. Lease Term in Years |
Lease Commissions /Sq. Ft. |
Tenant Improvements and Allowances /Sq. Ft. |
Total TIs and LCs /Sq. Ft. | ||||||||
Austin |
| | | | | | | ||||||||
Chicago |
43,610 | 20.10 | -17.06 | % | 6.47 | 7.76 | 28.06 | 35.82 | |||||||
Dallas |
20,019 | 21.31 | -5.07 | % | 4.02 | 3.62 | 10.14 | 13.76 | |||||||
Denver |
31,073 | 15.56 | -24.70 | % | 6.40 | 6.71 | 17.76 | 24.47 | |||||||
Los Angeles |
| | | | | | | ||||||||
Orange County |
| | | | | | | ||||||||
Portland |
| | | | | | | ||||||||
Salt Lake City |
42,396 | 17.20 | -7.70 | % | 5.19 | 3.17 | 10.83 | 14.00 | |||||||
San Diego |
88,566 | 26.98 | 22.30 | % | 8.41 | 7.00 | 20.81 | 27.81 | |||||||
San Francisco Bay |
178,495 | 16.94 | -34.29 | % | 4.39 | 2.76 | 8.37 | 11.13 | |||||||
Seattle |
6,888 | 20.90 | -13.81 | % | 5.37 | 3.04 | 23.04 | 26.08 | |||||||
Washington, D.C. |
|||||||||||||||
Suburban |
67,455 | 32.85 | 7.63 | % | 6.02 | 4.02 | 17.51 | 21.53 | |||||||
Downtown |
23,605 | 43.68 | 2.55 | % | 7.92 | 9.99 | 44.07 | 54.06 | |||||||
Total |
502,107 | 22.67 | -11.65 | % | 5.85 | 4.77 | 16.24 | 21.01 |
* | Percent change in GAAP rental rates excludes leases for space vacant greater than one year. |
18
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 |
|||||
Dickstein Shapiro Morin & Oshinsky LLP |
4.63 | % | 394,775 | 2.14 | % | |||
Patton Boggs, L.L.P. |
2.27 | % | 190,975 | 1.04 | % | |||
Sun Microsystems, Inc. |
2.01 | % | 270,427 | 1.47 | % | |||
Nortel Networks, Inc. |
1.97 | % | 258,048 | 1.40 | % | |||
Cell Genesys, Inc. |
1.87 | % | 155,685 | 0.85 | % | |||
Nextel Communications, Inc. |
1.82 | % | 359,906 | 1.96 | % | |||
Lattice Semiconductor Corp. |
1.53 | % | 216,650 | 1.18 | % | |||
Gateway, Inc. |
1.51 | % | 287,478 | 1.56 | % | |||
Merrill Lynch |
1.35 | % | 124,152 | 0.67 | % | |||
Citicorp |
1.31 | % | 146,148 | 0.79 | % | |||
Skadden, Arps, Slate, Meagher & Flom LLP |
1.31 | % | 112,253 | 0.61 | % | |||
King & Spalding |
1.25 | % | 107,471 | 0.58 | % | |||
American Chemistry Council |
1.19 | % | 144,875 | 0.79 | % | |||
Time Warner Communications |
1.08 | % | 230,842 | 1.25 | % | |||
MCI |
1.04 | % | 105,206 | 0.57 | % | |||
The Scripps Research Institute |
0.95 | % | 76,894 | 0.42 | % | |||
KPMG, L.L.P. |
0.89 | % | 135,558 | 0.74 | % | |||
Nokia IP, Inc. |
0.87 | % | 131,561 | 0.71 | % | |||
TSMC North America, Inc. |
0.77 | % | 110,590 | 0.60 | % | |||
Chronicle of Higher Education, Inc. |
0.73 | % | 76,382 | 0.41 | % | |||
Metabasis Therapeutics, Inc. |
0.73 | % | 81,816 | 0.44 | % | |||
Federal Deposit Insurance Corporation |
0.73 | % | 88,740 | 0.48 | % | |||
PMC-Sierra, Inc. |
0.73 | % | 108,242 | 0.59 | % | |||
New Cingular Wireless |
0.72 | % | 155,830 | 0.85 | % | |||
Torrey Mesa Research Institute |
0.69 | % | 79,759 | 0.43 | % | |||
33.95 | % | 4,150,263 | 22.53 | % | ||||
19
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Current Development Activity by Market
Under Construction @ 3/31/06 |
% Ownership |
Square Feet |
Start Date |
Estimated Completion Date |
Estimated Stabilization Date |
In Place Dev Costs ($000) |
Estimated to Complete |
Total Projected Investment ($000) |
Estimated Stabilized Return |
% Currently Leased or Committed |
|||||||||||||
Salt Lake |
|||||||||||||||||||||||
Wasatch 16 |
100 | % | 79,469 | 1Q06 | 1Q07 | 1Q08 | 1,938 | 9,872 | 11,810 | 9.3 | % | 0.0 | % | ||||||||||
San Diego |
|||||||||||||||||||||||
La Jolla SR |
100 | % | 40,000 | 1Q06 | 4Q06 | 4Q07 | 3,723 | 10,753 | 14,476 | 9.3 | % | 0.0 | % | ||||||||||
Dallas |
|||||||||||||||||||||||
Legacy Town Center III |
20 | % | 154,134 | 2Q05 | 2Q06 | 2Q07 | 12,097 | 13,006 | 25,103 | 9.3 | % | 0.0 | % |
20
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Land Held for Future Development
Wholly Owned Land |
Market | Acres | Buildable Office Square Feet | |||
Canyon Pointe A-B |
Seattle, WA | 10 | 173,760 | |||
Canyon Park 5 |
Seattle, WA | 4 | 64,320 | |||
Sunset Corporate |
Portland, OR | 12 | 124,800 | |||
Westlake |
Seattle, WA | 4 | 705,000 | |||
Dry Creek Corporate Center |
Denver, CO | 60 | 748,000 | |||
Sorenson Research Park XI |
Salt Lake City, UT | 6 | 80,238 | |||
Creekside 2 |
Salt Lake City, UT | 6 | 78,000 | |||
Tollway Plaza III |
Dallas, TX | 4 | 134,400 | |||
Royal Ridge IV & V |
Dallas, TX | 29 | 417,000 | |||
Total Wholly Owned Land |
135 | 2,525,518 | ||||
Partially Owned Land |
||||||
Panorama IV |
Denver, CO | 7 | 136,850 | |||
Panorama VII |
Denver, CO | 6 | 100,000 | |||
Panorama IX |
Denver, CO | 6 | 125,490 | |||
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 | 11 | 197,998 | |||
Royal Ridge Bldg 8 |
Dallas, TX | 6 | 132,709 | |||
Total Partially Owned Land |
64 | 1,134,681 | ||||
Total All Land Held for Future Development |
199 | 3,660,199 | ||||
21
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Key Quarterly Financial Data - Reconciliation of Financial Measures
Reconciliation of Diluted Funds from Operations to Net Income
Quarter Ended | ||||||||||||||||||||
(In thousands) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
Net income |
$ | 17,488 | $ | 28,182 | $ | 13,627 | $ | 11,868 | $ | 95,042 | ||||||||||
Depreciation and amortization |
40,560 | 39,726 | 38,545 | 37,169 | 36,728 | |||||||||||||||
Minority interest |
(460 | ) | 2,415 | 3,140 | 1,714 | 1,506 | ||||||||||||||
Gain on sales of properties |
(17,584 | ) | (26,939 | ) | (11,196 | ) | (4,436 | ) | (88,094 | ) | ||||||||||
Preferred stock dividends and dividends on unvested restricted stock |
(4,069 | ) | (4,027 | ) | (4,020 | ) | (4,044 | ) | (3,780 | ) | ||||||||||
Diluted funds from operations(1) |
$ | 35,935 | $ | 39,357 | $ | 40,096 | $ | 42,271 | $ | 41,402 | ||||||||||
(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 gain 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 companys 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 | ||||||||||||||||||||
3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | ||||||||||||||||
Net income |
$ | 0.23 | $ | 0.41 | $ | 0.17 | $ | 0.14 | $ | 1.54 | ||||||||||
Add: Depreciation and amortization |
0.68 | 0.62 | 0.61 | 0.61 | 0.58 | |||||||||||||||
Less: Gain on sale of property |
(0.30 | ) | (0.42 | ) | (0.18 | ) | (0.07 | ) | (1.46 | ) | ||||||||||
Minority interest adjustment |
| 0.04 | 0.05 | 0.03 | 0.03 | |||||||||||||||
Adjustment for share difference(2) |
| (0.03 | ) | (0.01 | ) | (0.02 | ) | | ||||||||||||
Diluted funds from operations(1) |
$ | 0.61 | $ | 0.62 | $ | 0.64 | $ | 0.69 | $ | 0.69 | ||||||||||
(1) | Fund from operating 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 ventures. 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. |
22
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Key Quarterly Financial Data - Reconciliation of Financial Measures (cont)
Reconciliation of EBITDA to Net Income
Quarter Ended | ||||||||||||||||||||
(In thousands) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
EBITDA(1) |
$ | 71,239 | $ | 76,497 | $ | 71,493 | $ | 72,605 | $ | 77,371 | ||||||||||
Add: Gain (loss) on sale of assets |
17,584 | 26,939 | 11,196 | 4,436 | 88,094 | |||||||||||||||
Less: Interest |
(30,669 | ) | (30,997 | ) | (29,100 | ) | (28,147 | ) | (29,499 | ) | ||||||||||
Taxes |
(546 | ) | 103 | (428 | ) | (130 | ) | (172 | ) | |||||||||||
Depreciation/amortization |
||||||||||||||||||||
- Continuing operations |
(37,101 | ) | (35,514 | ) | (33,433 | ) | (32,459 | ) | (32,518 | ) | ||||||||||
- Discontinued operations |
| (737 | ) | (2,057 | ) | (2,250 | ) | (2,443 | ) | |||||||||||
Impairment losses |
| (5,500 | ) | (648 | ) | (210 | ) | (4,000 | ) | |||||||||||
Minority interest |
(3,019 | ) | (2,609 | ) | (3,396 | ) | (1,977 | ) | (1,791 | ) | ||||||||||
Net income |
$ | 17,488 | $ | 28,182 | $ | 13,627 | $ | 11,868 | $ | 95,042 | ||||||||||
(1) | EBITDA is a non-GAAP financial measure and we believe it is helpful to investors due to the significance of our long-lived assets and their associated significant depreciation expense. 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 Operating Income/EBITDA
Quarter Ended | ||||||||||||||||||||
(In thousands, except ratio) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
Secured Property Operating Income |
$ | 11,337 | $ | 11,115 | $ | 9,277 | $ | 11,684 | $ | 11,751 | ||||||||||
Total EBITDA |
71,239 | 76,497 | 71,493 | 72,605 | 77,371 | |||||||||||||||
Secured Property NOI/Total EBITDA |
15.9 | % | 14.5 | % | 13.0 | % | 16.1 | % | 15.2 | % |
Secured property operating income is computed as rental revenues 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.
23
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Key Quarterly Financial Data - Computation of Supplemental Measures
Reconciliation of Funds Available for Distribution to Net Income
Quarter Ended | ||||||||||||||||||||
(In thousands, except ratio) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
Net income |
$ | 17,488 | $ | 28,182 | $ | 13,627 | $ | 11,868 | $ | 95,042 | ||||||||||
Depreciation and amortization |
40,560 | 39,726 | 38,545 | 37,169 | 36,728 | |||||||||||||||
Minority interest |
(460 | ) | 2,415 | 3,140 | 1,714 | 1,506 | ||||||||||||||
Gain on sale of property |
(17,584 | ) | (26,939 | ) | (11,196 | ) | (4,436 | ) | (88,094 | ) | ||||||||||
Preferred stock dividends and dividends on unvested restricted stock |
(4,069 | ) | (4,027 | ) | (4,020 | ) | (4,044 | ) | (3,780 | ) | ||||||||||
Diluted funds from operations(1) |
35,935 | 39,357 | 40,096 | 42,271 | 41,402 | |||||||||||||||
Less: Lease commissions |
(4,908 | ) | (4,088 | ) | (5,636 | ) | (3,012 | ) | (4,271 | ) | ||||||||||
Lease incentives/Allowances for tenant owned improvements/ Tenant improvement |
(25,193 | ) | (37,997 | ) | (11,822 | ) | (10,215 | ) | (6,063 | ) | ||||||||||
Building capital additions |
(3,954 | ) | (5,968 | ) | (3,689 | ) | (2,102 | ) | (1,848 | ) | ||||||||||
Lease intangible amortization(3) |
2,081 | 2,453 | 2,655 | 2,011 | 2,009 | |||||||||||||||
Straight line rent |
(7,104 | ) | (7,082 | ) | (3,817 | ) | 331 | (2,487 | ) | |||||||||||
Impairment losses |
| 5,500 | 649 | 210 | 4,000 | |||||||||||||||
Antidilutive FFO allocable to minority Unitholders |
3,194 | | | | | |||||||||||||||
Funds available for distribution to common shareholders(1) |
$ | 51 | $ | (7,825 | ) | $ | 18,436 | $ | 29,494 | $ | 32,742 | |||||||||
Common dividends and distributions(2) |
$ | 32,028 | $ | 31,895 | $ | 32,241 | $ | 30,492 | $ | 30,276 | ||||||||||
Funds available for distribution to common shareholders coverage ratio |
0.0 | (0.2 | ) | 0.6 | 1.0 | 1.1 | ||||||||||||||
(1) | FFO and FAD are widely used measures of operating performance for real estate companies. We provide FFO and FAD as supplements to net income calculated in accordance with GAAP. Although FFO and FAD are widely used measures of operating performance for equity REITs, FFO and FAD do not represent net income calculated in accordance with GAAP. As such, they should not be considered an alternative to net income as an indication of our operating performance. In addition, FFO and FAD do not represent cash generated from operating activities in accordance with GAAP, nor do they 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 are they indicative of funds available to fund our cash needs, including our ability to make cash distributions. We believe that FFO and FAD are helpful to investors as measures 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 and FAD, 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 companys real estate between periods or as compared to different companies. Our FFO and FAD may not be comparable to FFO and FAD reported by other REITs. |
(2) | Common dividends and distributions include distributions to minority unitholders. For the quarter ended 3/31/06, minority units were antidilutive for the computation of Diluted FFO and FFO allocable to minority unitholders reduces Diluted FFO. FFO allocable to minority unitholders is added back for the computation of the FAD coverage ratio as the minority distributions are included in the calculation. |
(3) | Amortization associated with above/below market leases and lease incentives. |
24
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Key Quarterly Financial Data - Computation of Supplemental Measures (cont)
Reconciliation of Property Operating Income to Net Income
Quarter Ended | ||||||||||||||||||||
(In thousands) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||||||
Property operating income |
$ | 75,056 | $ | 75,550 | $ | 69,832 | $ | 70,703 | $ | 75,367 | ||||||||||
Less: Interest expense |
(30,669 | ) | (30,997 | ) | (29,100 | ) | (28,147 | ) | (29,499 | ) | ||||||||||
General and administrative expense |
(12,690 | ) | (10,829 | ) | (10,121 | ) | (10,179 | ) | (10,749 | ) | ||||||||||
Depreciation and amortization |
(37,101 | ) | (35,514 | ) | (33,433 | ) | (32,459 | ) | (32,517 | ) | ||||||||||
Income taxes |
(546 | ) | 103 | (428 | ) | (130 | ) | (172 | ) | |||||||||||
Minority interest |
(3,019 | ) | (2,609 | ) | (3,396 | ) | (1,977 | ) | (1,791 | ) | ||||||||||
Add: Real estate service revenue |
5,864 | 7,813 | 5,128 | 5,222 | 5,573 | |||||||||||||||
Gain (loss) on sale of properties and impairment losses |
17,584 | 4,038 | 29 | 663 | 88,094 | |||||||||||||||
Other income |
3,009 | 2,868 | 2,718 | 2,534 | 2,520 | |||||||||||||||
Discontinued operations |
| 17,759 | 12,398 | 5,638 | (1,784 | ) | ||||||||||||||
Net income |
$ | 17,488 | $ | 28,182 | $ | 13,627 | $ | 11,868 | $ | 95,042 | ||||||||||
* | Property operating income is the performance measure used to assess the results of our real estate property segment. Although property operating income is a widely used measure of operating performance for equity REITs, property operating income 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. We believe that the presentation of property operating income is helpful to investors as a measure of the operating performance of our office properties because it excludes items that do not relate to or are not indicative of operating performance of the properties (including interest and depreciation and amortization) and which can make periodic comparison of operating performance more difficult. |
Computation of Fixed Charge Coverage Ratio
Quarter Ended | ||||||||||||||||
(In thousands, except ratios) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||
Amortizing principal payments |
$ | 1,263 | $ | 1,230 | $ | 1,186 | $ | 1,162 | $ | 1,497 | ||||||
Preferred stock dividends |
3,774 | 3,773 | 3,773 | 3,774 | 3,774 | |||||||||||
Prepayment penalties on debt |
| (1,196 | ) | | | | ||||||||||
Interest expense |
30,669 | 30,997 | 29,100 | 28,147 | 29,499 | |||||||||||
Fixed changes excluding capitalized interest |
35,706 | 34,804 | 34,059 | 33,083 | 34,770 | |||||||||||
Add: Capitalized interest |
651 | 76 | | | | |||||||||||
Fixed charges including capitalized interest |
$ | 36,357 | $ | 34,880 | $ | 34,059 | $ | 33,083 | $ | 34,770 | ||||||
EBITDA |
$ | 71,239 | $ | 76,497 | $ | 71,493 | $ | 72,605 | $ | 77,371 | ||||||
Fixed charge coverage excluding capitalized interest |
2.0 | 2.2 | 2.1 | 2.2 | 2.2 | |||||||||||
Fixed charge coverage including capitalized interest |
2.0 | 2.2 | 2.1 | 2.2 | 2.2 | |||||||||||
Computation of Interest Coverage Ratio | ||||||||||||||||
Quarter Ended | ||||||||||||||||
(In thousands, except ratios) | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | |||||||||||
Interest expense |
$ | 30,669 | $ | 30,997 | $ | 29,100 | $ | 28,147 | $ | 29,499 | ||||||
Prepayment penalties on debt |
| (1,196 | ) | | | | ||||||||||
Fixed changes excluding capitalized interest |
30,669 | 29,801 | 29,100 | 28,147 | 29,499 | |||||||||||
Add: Capitalized interest |
651 | 76 | | | | |||||||||||
Fixed charges including capitalized interest |
$ | 31,320 | $ | 29,877 | $ | 29,100 | $ | 28,147 | $ | 29,499 | ||||||
EBITDA |
$ | 71,239 | $ | 76,497 | $ | 71,493 | $ | 72,605 | $ | 77,371 | ||||||
Interest coverage excluding capitalized interest |
2.3 | 2.6 | 2.5 | 2.6 | 2.6 | |||||||||||
Interest coverage including capitalized interest |
2.3 | 2.6 | 2.5 | 2.6 | 2.6 |
25