Mack-Cali Realty Corporation Announces First Quarter Results
EDISON, N.J., April 28, 2011 /PRNewswire/ -- Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the first quarter 2011.
Recent highlights include:
-- Reported funds from operations of $0.70 per diluted share;
-- Reported net income of $0.19 per diluted share;
-- Completed a public offering of 7.2 million shares of common stock; and
-- Declared $0.45 per share quarterly cash common stock dividend.
FINANCIAL HIGHLIGHTS
Funds from operations (FFO) available to common shareholders for the quarter ended March 31, 2011 amounted to $67.3 million, or $0.70 per share.
Net income available to common shareholders for the first quarter 2011 equaled $15.7 million, or $0.19 per share. Total revenues for the first quarter 2011 were $186.3 million.
All per share amounts presented above are on a diluted basis.
The Company had 86,933,001 shares of common stock, 10,000 shares of 8 percent Series C cumulative redeemable perpetual preferred stock ($25,000 liquidation value per share), and 12,878,404 common operating partnership units outstanding as of March 31, 2011. The Company had a total of 99,811,405 common shares/common units outstanding at March 31, 2011.
As of March 31, 2011, the Company had total indebtedness of approximately $1.9 billion, with a weighted average annual interest rate of 6.55 percent.
The Company had a debt-to-undepreciated assets ratio of 33.4 percent at March 31, 2011. The Company had an interest coverage ratio of 3.2 times for the quarter ended March 31, 2011.
"While we anticipated a particularly challenging quarter due to scheduled lease expirations, we saw solid leasing activity and are hopeful this will continue. In the first quarter, we also took advantage of the improving capital markets environment and completed the sale of 7.2 million shares of common stock, netting us proceeds of $227 million. This successful execution enhanced our financial flexibility," commented Mitchell E. Hersh, president and chief executive officer.
FINANCING TRANSACTION
On February 18, 2011, the Company completed a public offering of 7,187,500 shares of common stock and used the net proceeds, which totaled approximately $227.4 million (after offering costs) primarily to repay borrowings under its unsecured revolving credit facility.
DIVIDENDS
In March, the Company's Board of Directors declared a cash dividend of $0.45 per common share (indicating an annual rate of $1.80 per common share) for the first quarter 2011, which was paid on April 15, 2011 to shareholders of record as of April 5, 2011.
The Board also declared a cash dividend on the Company's 8 percent Series C cumulative redeemable perpetual preferred stock ($25 liquidation value per depositary share, each representing 1/100th of a share of preferred stock) equal to $0.50 per depositary share for the period January 15, 2011 through April 14, 2011. The dividend was paid on April 15, 2011 to shareholders of record as of April 5, 2011.
LEASING INFORMATION
Mack-Cali's consolidated in-service portfolio was 88.2 percent leased at March 31, 2011, as compared to 89.1 percent leased at December 31, 2010.
For the quarter ended March 31, 2011, the Company executed 148 leases at its consolidated in-service portfolio totaling 1,128,595 square feet, consisting of 882,130 square feet of office space and 246,465 square feet of office/flex space. Of these totals, 247,784 square feet were for new leases and 880,811 square feet were for lease renewals and other tenant retention transactions.
Highlights of the quarter's leasing transactions include:
NORTHERN NEW JERSEY:
-- The Bank of Tokyo-Mitsubishi UFJ, Ltd., a subsidiary of Mitsubishi UFJ
Financial Group, signed a renewal for 137,076 square feet at Harborside
Financial Center Plaza 3 in Jersey City. The 725,600 square-foot office
building is 95.6 percent leased.
-- Jefferies & Company Inc., an investment bank and operating subsidiary of
Jefferies Group, Inc., signed a new lease for 62,763 square feet at 101
Hudson Street in Jersey City. Jefferies also extended the term of 55,560
square feet at Harborside Financial Center Plaza 3. 101 Hudson Street is
a 1,246,283 square-foot office building that is 87.2 percent leased.
-- Movado Group Inc., one of the world's premier watchmakers, signed a
renewal for 90,050 square feet at Mack-Cali Centre II, located at 650
From Road in Paramus. The 348,510 square-foot office building is 80.5
percent leased.
-- Fiserv Solutions Inc., an information technology provider, signed a
renewal for the entire 75,000 square-foot office building at 250 Johnson
Road in Morris Plains.
-- Leo Pharma Inc., a global pharmaceutical company, signed transactions
totaling 29,134 square feet including a renewal for 12,654 square feet
and an expansion for 16,480 square feet at One Sylvan Way in Parsippany.
The 150,557 square-foot office building, located in Mack-Cali Business
Campus, is 85.1 percent leased.
-- Universal Hospital Services, Inc., a medical equipment management
solutions provider, signed a renewal for 21,245 square feet at 1 Center
Court in Totowa. The 38,961 square-foot office/flex building, located in
Mack-Cali Commercenter, is 100 percent leased.
CENTRAL NEW JERSEY:
-- Lomurro, Davison, Eastman & Munoz, P.A., a law firm, signed a renewal
for 26,827 square feet at 100 Willowbrook Road in Freehold. The 60,557
square-foot office building, located in Monmouth Executive Center, is
64.2 percent leased.
-- The Travelers Indemnity Co., an insurance company, signed a renewal for
24,450 square feet at 343 Thornall Street in Edison. The 195,709
square-foot office building is 94.8 percent leased.
WESTCHESTER COUNTY, NEW YORK:
-- Quintiles, Inc., a pharmaceutical services organization, signed a
renewal for 18,620 square feet at 8 Skyline Drive in Hawthorne. The
50,000 square-foot office/flex building, located in Mid-Westchester
Executive Park, is 98.7 percent leased.
MANHATTAN, NEW YORK:
-- Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, a law firm, signed a
new lease for 37,404 square feet at 125 Broad Street in Manhattan.
Mack-Cali's ownership interests in the building of 524,476 square-feet
are 65.8 percent leased.
SUBURBAN PHILADELPHIA:
-- Merchant Services, Inc., a credit card processing company, signed
transactions totaling 24,000 square feet at 102 Commerce Drive in
Moorestown, New Jersey including a renewal for 19,200 square feet and an
expansion of 4,800 square feet. The 38,400 square-foot office/flex
building, located in Moorestown West Corporate Center, is 100 percent
leased.
Included in the Company's Supplemental Operating and Financial Data for the first quarter 2011 are schedules highlighting the leasing statistics for both the Company's consolidated and joint venture properties.
The supplemental information is available on Mack-Cali's website, as follows:
http://www.mack-cali.com/file-uploads/1st.quarter.sp.11.pdf
ADDITIONAL INFORMATION
The Company expressed comfort with net income and FFO per diluted share for the full year 2011, as follows:
Full Year
2011 Range
Net income available to common shareholders $0.61 - $0.81
Add: Real estate-related depreciation and amortization 2.00
Funds from operations available to common shareholders $2.61 - $2.81
These estimates reflect management's view of current market conditions and certain assumptions with regard to rental rates, occupancy levels and other assumptions/projections. Actual results could differ from these estimates.
An earnings conference call with management is scheduled for today, April 28, 2011 at 10:00 a.m. Eastern Time, which will be broadcast live via the Internet at:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=96021&eventID=3943010
The live conference call is also accessible by calling (913) 312-0976 and requesting the Mack-Cali conference call.
The conference call will be rebroadcast on Mack-Cali's website at http://www.mack-cali.com beginning at 2:00 p.m. Eastern Time on April 28, 2011 through May 5, 2011.
A replay of the call will also be accessible during the same time period by calling (719) 457-0820 and using the pass code 6213199.
Copies of Mack-Cali's Form 10-Q and Supplemental Operating and Financial Data are available on Mack-Cali's website, as follows:
First Quarter 2011 Form 10-Q:
http://www.mack-cali.com/file-uploads/1st.quarter.10q.11.pdf
First Quarter 2011 Supplemental Operating and Financial Data:
http://www.mack-cali.com/file-uploads/1st.quarter.sp.11.pdf
In addition, these items are available upon request from:
Mack-Cali Investor Relations Department
343 Thornall Street, Edison, New Jersey 08837-2206
(732) 590-1000 ext. 1143
INFORMATION ABOUT FFO
Funds from operations ("FFO") is defined as net income (loss) before minority interest of unitholders, computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from extraordinary items and sales of depreciable rental property (which the Company believes includes unrealized losses on properties held for sale), plus real estate-related depreciation and amortization. The Company believes that FFO per share is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that by excluding the effect of depreciation and gains (or losses) from sales of properties (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO per share can facilitate comparison of operating performance between equity REITs. FFO per share should not be considered as an alternative to net income per share as an indication of the Company's performance or to cash flows as a measure of liquidity. FFO per share presented herein is not necessarily comparable to FFO per share presented by other real estate companies due to the fact that not all real estate companies use the same definition. However, the Company's FFO per share is comparable to the FFO per share of real estate companies that use the current definition of the National Association of Real Estate Investment Trusts ("NAREIT"). A reconciliation of net income per share to FFO per share is included in the financial tables accompanying this press release.
ABOUT THE COMPANY
Mack-Cali Realty Corporation is a fully integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, construction and other tenant-related services for its class A real estate portfolio. Mack-Cali owns or has interests in 277 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 32.2 million square feet. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of over 2,000 tenants.
Additional information on Mack-Cali Realty Corporation is available on the Company's website at www.mack-cali.com.
The information in this press release must be read in conjunction with, and is modified in its entirety by, the Annual Report on Form 10-Q (the "10-Q") filed by the Company for the same period with the Securities and Exchange Commission (the "SEC") and all of the Company's other public filings with the SEC (the "Public Filings"). In particular, the financial information contained herein is subject to and qualified by reference to the financial statements contained in the 10-Q, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the 10-Q and the Public Filings.
Statements made in this press release may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "should," "expect," "anticipate," "estimate," "continue," or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate, and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading "Disclosure Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Reports on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q, which are incorporated herein by reference. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts) (unaudited)
Quarter Ended
March 31,
Revenues 2011 2010
Base rents $ 149,423 $ 152,693
Escalations and recoveries from tenants 27,584 26,119
Construction services 3,799 10,862
Real estate services 1,232 1,977
Other income 4,292 2,932
Total revenues 186,330 194,583
Expenses
Real estate taxes 25,045 22,161
Utilities 20,105 19,826
Operating services 30,816 28,681
Direct construction costs 3,582 10,293
General and administrative 8,629 8,414
Depreciation and amortization 48,148 48,490
Total expenses 136,325 137,865
Operating income 50,005 56,718
Other (Expense) Income
Interest expense (31,339) (39,071)
Interest and other investment income 10 21
Equity in earnings (loss) of unconsolidated joint
ventures (101) (522)
Total other (expense) income (31,430) (39,572)
Income from continuing operations 18,575 17,146
Discontinued Operations:
Income (loss) from discontinued operations -- 231
Net income 18,575 17,377
Noncontrolling interest in consolidated joint ventures 110 87
Noncontrolling interest in Operating Partnership (2,456) (2,422)
Noncontrolling interest in discontinued operations -- (33)
Preferred stock dividends (500) (500)
Net income available to common shareholders $ 15,729 $ 14,509
PER SHARE DATA:
Basic earnings per common share $ 0.19 $ 0.18
Diluted earnings per common share $ 0.19 $ 0.18
Basic weighted average shares outstanding 82,948 78,973
Diluted weighted average shares outstanding 96,015 92,450
Mack-Cali Realty Corporation
Statements of Funds from Operations
(in thousands, except per share/unit amounts) (unaudited)
Quarter Ended
March 31,
2011 2010
Net income available to common shareholders $ 15,729 $ 14,509
Add: Noncontrolling interest in Operating Partnership 2,456 2,422
Noncontrolling interest in discontinued operations -- 33
Real estate-related depreciation and amortization on
continuing operations (1) 49,115 49,471
Real estate-related depreciation and amortization on
discontinued operations -- 107
Funds from operations available to common shareholders (2) $ 67,300 $ 66,542
Diluted weighted average shares/units outstanding (3) 96,015 92,450
Funds from operations per share/unit – diluted $ 0.70 $ 0.72
Dividends declared per common share $ 0.45 $ 0.45
Dividend payout ratio:
Funds from operations-diluted 64.20% 62.52%
Supplemental Information:
Non-incremental revenue generating capital expenditures:
Building improvements $ 3,594 $ 1,986
Tenant improvements and leasing commissions (4) $ 9,157 $ 7,968
Straight-line rent adjustments (5) $ 2,222 $ 2,288
Amortization of (above)/below market lease intangibles, net
(6) $ 209 $ 607
(1) Includes the Company's share from unconsolidated joint ventures of $1,085
and $1,106 for the quarter ended March 31, 2011
and 2010, respectively.
(2) Funds from operations is calculated in accordance with the definition of
FFO of the National Association of Real Estate
Investment Trusts (NAREIT) definition. For further discussion, see "Information
About FFO" in this release.
(3) Calculated based on weighted average common shares outstanding, assuming
redemption of Operating Partnership common
units into common shares (12,952 shares and 13,365 shares for the quarter ended
quarter ended March 31, 2011 and 2010,
respectively), plus dilutive Common Stock Equivalents (i.e. stock options).
(4) Excludes expenditures for tenant spaces that haven't been owned for at
least a year or were vacant for more than a year.
(5) Includes the Company's share from unconsolidated joint ventures of $63 and
$25 for the quarter ended March 31, 2011 and
2010, respectively.
(6) Includes the Company's share from unconsolidated joint ventures of $0 and
$8 for the quarter ended March 31, 2011 and
2010, respectively.
Mack-Cali Realty Corporation
Statements of Funds from Operations Per Diluted Share
(amounts are per diluted share, except share count in thousands)
(unaudited)
Quarter Ended
March 31,
2011 2010
Net income available to common shareholders $ 0.19 $ 0.18
Add: Real estate-related depreciation and amortization on
continuing operations (1) 0.51 0.54
Funds from operations available to common shareholders (2) $ 0.70 $ 0.72
Diluted weighted average shares/units outstanding (3) 96,015 92,450
(1) Includes the Company's share from unconsolidated joint ventures of
$0.01 and $0.01 for the quarter ended March 31, 2011
and 2010, respectively.
(2) Funds from operations is calculated in accordance with the definition
of FFO of the National Association of Real Estate
Investment Trusts (NAREIT) definition. For further discussion , see
"Information About FFO" in this release.
(3) Calculated based on weighted average common shares outstanding,
assuming redemption of Operating Partnership
common units into common shares (12,952 shares and 13,365 shares for the
quarter ended March 31, 2011 and 2010,
respectively), plus dilutive Common Stock Equivalents (i.e. stock
options).
Mack-Cali Realty Corporation
Consolidated Balance Sheets
(in thousands, except share amounts) (unaudited)
March 31, December 31,
2011 2010
Assets:
Rental property
Land and leasehold interests $ 771,998 $ 771,960
Buildings and improvements 3,975,224 3,970,177
Tenant improvements 458,969 470,098
Furniture, fixtures and equipment 4,260 4,485
5,210,451 5,216,720
Less-accumulated deprec. & amort. (1,295,339) (1,278,985)
Net investment in rental property 3,915,112 3,937,735
Cash and cash equivalents 10,728 21,851
Investments in unconsolidated joint ventures 33,239 34,220
Unbilled rents receivable, net 128,708 126,917
Deferred charges and other assets, net 211,985 212,038
Restricted cash 19,824 17,310
Accounts receivable, net 10,994 12,395
Total assets $ 4,330,590 $ 4,362,466
Liabilities and Equity:
Senior unsecured notes $ 1,118,655 $ 1,118,451
Revolving credit facility 16,000 228,000
Mortgages, loans payable and other obligations 742,212 743,043
Dividends and distributions payable 45,415 42,176
Accounts payable, accrued expenses and other
liabilities 93,376 101,944
Rents received in advance and security deposits 53,302 57,877
Accrued interest payable 16,046 27,038
Total liabilities 2,085,006 2,318,529
Commitments and contingencies
Equity:
Mack-Cali Realty Corporation stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, 10,000
and 10,000 shares outstanding, at liquidation
preference 25,000 25,000
Common stock, $0.01 par value, 190,000,000 shares
authorized,
86,933,001 and 79,605,474 shares outstanding 869 796
Additional paid-in capital 2,514,720 2,292,641
Dividends in excess of net earnings (583,556) (560,165)
Total Mack-Cali Realty Corporation stockholders'
equity 1,957,033 1,758,272
Noncontrolling interests in subsidiaries:
Operating Partnership 286,215 283,219
Consolidated joint ventures 2,336 2,446
Total noncontrolling interests in subsidiaries 288,551 285,665
Total equity 2,245,584 2,043,937
Total liabilities and equity $ 4,330,590 $ 4,362,466
Contact: Barry Lefkowitz Ilene Jablonski Executive Vice President Senior Director, Marketing and Chief Financial Officer and Public Relations (732) 590-1000 (732) 590-1000
SOURCE Mack-Cali Realty Corporation
Released April 28, 2011