Mack-Cali Realty Corporation Announces Third Quarter Results

EDISON, N.J., Oct. 28 /PRNewswire-FirstCall/ -- Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the third quarter 2010.

Recent highlights include:

    --  Reported funds from operations of $0.69 per diluted share;
    --  Reported net income of $0.16 per diluted share; 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 September 30, 2010 amounted to $64.3 million, or $0.69 per share.  For the nine months ended September 30, 2010, FFO available to common shareholders equaled $197.1 million, or $2.12 per share.

Net income available to common shareholders for the third quarter 2010 equaled $13.0 million, or $0.16 per share. For the nine months ended September 30, 2010, net income available to common shareholders amounted to $46.3 million, or $0.58 per share.

Total revenues for the third quarter 2010 were $198.0 million.  For the nine months ended September 30, 2010, total revenues amounted to $595.3 million.

All per share amounts presented above are on a diluted basis.

The Company had 79,528,151 shares of common stock, 10,000 shares of 8 percent Series C cumulative redeemable perpetual preferred stock ($25,000 liquidation value per share), and 13,007,668 common operating partnership units outstanding as of September 30, 2010. The Company had a total of 92,535,819 common shares/common units outstanding at September 30, 2010.

As of September 30, 2010, the Company had total indebtedness of approximately $2.2 billion, with a weighted average annual interest rate of 6.81 percent.

The Company had a debt-to-undepreciated assets ratio of 38.0 percent at September 30, 2010. The Company had an interest coverage ratio of 2.7 times for the quarter ended September 30, 2010.

"While fundamentals are still under considerable pressure, we've been successful in increasing our occupancy rate, ending the third quarter at 89 percent, up slightly from last quarter. This success is based on our ongoing commitment to offering a superior product, strong sponsorship, and an unmatched tenant-first philosophy," commented Mitchell E. Hersh, president and chief executive officer.

DIVIDENDS

In September, 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 third quarter 2010, which was paid on October 8, 2010 to shareholders of record as of October 5, 2010.

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 July 15, 2010 through October 14, 2010.  The dividend was paid on October 15, 2010 to shareholders of record as of October 5, 2010.

LEASING INFORMATION

Mack-Cali's consolidated in-service portfolio was 89.0 percent leased at September 30, 2010, as compared to 88.9 percent leased at June 30, 2010.  

For the quarter ended September 30, 2010, the Company executed 147 leases at its consolidated in-service portfolio totaling 1,107,567 square feet, consisting of 896,349 square feet of office space and 211,218 square feet of office/flex space.  Of these totals, 319,659 square feet were for new leases and 787,908 square feet were for lease renewals and other tenant retention transactions.  

Highlights of the quarter's leasing transactions include:

NORTHERN NEW JERSEY:

    --  TD Ameritrade Services Company Inc., an online brokerage firm, signed
        transactions totaling 188,776 square feet consisting of a five-year and
        four-month renewal for 184,222 square feet and a nine-year and
        seven-month expansion for 4,554 square feet at Harborside Financial
        Center Plaza 4A in Jersey City. Plaza 4A is a 207,670 square-foot office
        building which is 100 percent leased.
    --  The Bank of Tokyo-Mitsubishi UFJ, Ltd., a subsidiary of Mitsubishi UFJ
        Financial Group, signed a nine-year expansion for 24,607 square feet at
        Harborside Financial Center Plaza 3 in Jersey City.
    --  Also at Harborside Financial Center Plaza 3, Frenkel & Company Inc.,
        international insurance brokers, signed a new 11-year lease for 23,516
        square feet. The 725,600 square-foot office building is 95.5 percent
        leased.
    --  FTI SMG LLC, a global consulting firm, signed transactions totaling
        25,398 square feet consisting of a five-year renewal for 22,071 square
        feet and a four-year and nine-month expansion for 3,327 square feet at
        101 Eisenhower Parkway in Roseland. The 237,000 square-foot office
        building, located in Eisenhower/280 Corporate Center, is 91.4 percent
        leased.
    --  Regulus Group LLC, payment processing and service provider, signed a
        two-year renewal for 21,500 square feet at 365 West Passaic Street in
        Rochelle Park. The 212,578 square-foot office building is 100 percent
        leased.
    --  Atlas Copco North America LLC, a manufacturer of mining equipment and
        compressors, signed a new eight-year and two-month lease for 17,620
        square feet at 7 Campus Drive in Parsippany.
    --  Also at 7 Campus Drive, Ohaus Corporation, a designer, developer and
        marketer of scales and balances, signed a new five-year and six-month
        lease for 16,383 square feet. The 154,395 square-foot office building,
        located in the Mack-Cali Business Campus, is 77.4 percent leased.


WESTCHESTER COUNTY, NEW YORK:

    --  Optical Distributor Group LLC, a contact lens distributor, signed
        transactions totaling 63,017 square feet consisting of a 10-year renewal
        for 40,615 square feet and a 13-year expansion for 22,402 square feet at
        4 Skyline Drive in Hawthorne. The 80,600 square-foot office/flex
        building, located in Mid-Westchester Executive Park, is 100 percent
        leased.
    --  Nextel of New York Inc., a wireless communication supplier, signed a
        one-year renewal for 30,292 square feet at 565 Taxter Road in Elmsford.
        The 170,554 square-foot office building, located in Taxter Corporate
        Park, is 92.9 percent leased.
    --  E & B Giftware LLC, a designer and marketer of niche accessories for the
        fitness, gift and travel markets, signed a three-year renewal for 28,430
        square feet at 4 Executive Plaza in Yonkers. The 80,000 square-foot
        office/flex building, located in South Westchester Executive Park, is
        100 percent leased.


MANHATTAN, NEW YORK:

    --  International AIDS Vaccine Initiative Inc., a global not-for-profit
        agency, signed a new 15-year and two-month lease for 37,404 square feet
        at 125 Broad Street. Mack-Cali's ownership interests of 524,476
        square-feet in the building are 51.5 percent leased.


CONNECTICUT:

    --  Flag Capital Management LLC, venture capital managers, signed a
        five-year and five-month renewal for 18,485 square feet at 1266 East
        Main Street in Stamford. The 179,260 square foot office building is 88.8
        percent leased.


SUBURBAN PHILADELPHIA:

    --  Turner Investment Partners Inc., an investment management firm, signed a
        five-year and three-month renewal for 39,644 square feet at 1205
        Westlakes Drive in Berwyn. The 130,265 square-foot office building,
        located in Westlakes Office Park, is 87.6 percent leased.
    --  Also in Westlakes Office Park, PNC Bank National Association signed a
        five-year and five-month renewal for 23,337 square feet at 1000
        Westlakes Drive. The 60,696 square-foot office building is 92.2 percent
        leased.


WASHINGTON, DC/MARYLAND:

    --  RFE/RL, Inc., also known as Radio Free Europe/Radio Liberty, signed a
        12-year renewal for 26,856 square feet at 1201 Connecticut Avenue, NW in
        Washington, DC. The 169,549 square-foot office building is 100 percent
        leased.


Included in the Company's Supplemental Operating and Financial Data for the third quarter 2010 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/3rd.quarter.sp.10.pdf

ADDITIONAL INFORMATION

The Company expressed comfort with net income and FFO per diluted share for the full year 2010 and 2011, as follows:




                                               Full Year     Full Year

                                               2010 Range    2011 Range

Net income available to common shareholders    $0.71 - $0.75 $0.60 - $0.80

Add: Real estate-related depreciation and
amortization                                   2.12          2.15

Deduct: Gain on disposition of rental property (0.05)        --

Funds from operations available to common
shareholders                                   $2.78 - $2.82 $2.75 - $2.95







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, October 28, 2010 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=3390020

The live conference call is also accessible by calling (913) 312-1516 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 October 28, 2010 through November 4, 2010.

A replay of the call will also be accessible during the same time period by calling (719) 457-0820 and using the pass code 6497782.

Copies of Mack-Cali's Form 10-Q and Supplemental Operating and Financial Data are available on Mack-Cali's website, as follows:

Third Quarter 2010 Form 10-Q:

http://www.mack-cali.com/file-uploads/3rd.quarter.10q.10.pdf

Third Quarter 2010 Supplemental Operating and Financial Data:

http://www.mack-cali.com/file-uploads/3rd.quarter.sp.10.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 287 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 32.9 million square feet. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of approximately 2,100 tenants.

Additional information on Mack-Cali Realty Corporation is available on the Company's website at http://www.mack-cali.com.

The information in this press release must be read in conjunction with, and is modified in its entirety by, the Quarterly 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       Nine Months Ended
                                        September 30,       September 30,

Revenues                                2010      2009      2010      2009

Base rents                              $ 150,064 $ 154,337 $ 452,449 $ 455,359

Escalations and recoveries from tenants 26,420    24,717    78,376    77,107

Construction services                   16,475    7,761     49,694    16,466

Real estate services                    2,014     1,808     5,660     6,450

Other income                            2,983     3,524     9,145     9,874

Total revenues                          197,956   192,147   595,324   565,256



Expenses

Real estate taxes                       24,913    23,450    72,986    70,015

Utilities                               20,831    17,951    57,066    54,604

Operating services                      27,345    24,588    84,099    78,849

Direct construction costs               15,884    7,337     47,588    15,347

General and administrative              8,992     9,816     26,064    30,524

Depreciation and amortization           47,978    51,377    143,942   148,460

Total expenses                          145,943   134,519   431,745   397,799

Operating income                        52,013    57,628    163,579   167,457



Other (Expense) Income

Interest expense                        (36,941)  (35,744)  (113,347) (101,445)

Interest and other investment income    34        166       73        549

Equity in earnings (loss) of
unconsolidated joint ventures           475       635       213       (6,401)

Gain on reduction of other obligations  --        --        --        1,693

Total other (expense) income            (36,432)  (34,943)  (113,061) (105,604)

Income from continuing operations       15,581    22,685    50,518    61,853

Discontinued Operations:

Income from discontinued operations     --        104       242       158

Realized gains (losses) and unrealized
losses on disposition of rental
property, net                           --        --        4,447     --

Total discontinued operations, net      --        104       4,689     158

Net income                              15,581    22,789    55,207    62,011

Noncontrolling interest in consolidated
joint ventures                          108       213       281       980

Noncontrolling interest in Operating
Partnership                             (2,150)   (3,399)   (7,047)   (9,905)

Noncontrolling interest in discontinued
operations                              --        (16)      (668)     (24)

Preferred stock dividends               (500)     (500)     (1,500)   (1,500)

Net income available to common
shareholders                            $ 13,039  $ 19,087  $ 46,273  $ 51,562



PER SHARE DATA:



Basic earnings per common share         $ 0.16    $ 0.24    $ 0.58    $ 0.71



Diluted earnings per common share       $ 0.16    $ 0.24    $ 0.58    $ 0.71



Basic weighted average shares
outstanding                             79,304    78,151    79,161    72,889



Diluted weighted average shares
outstanding                             92,464    92,245    92,467    87,106










Mack-Cali Realty Corporation

Statements of Funds from Operations

(in thousands, except per share/unit amounts) (unaudited)



                                          Quarter Ended     Nine Months Ended
                                          September 30,     September 30,

                                          2010     2009     2010      2009

Net income available to common
shareholders                              $ 13,039 $ 19,087 $ 46,273  $ 51,562

Add: Noncontrolling interest in Operating
Partnership                               2,150    3,399    7,047     9,905

Noncontrolling interest in discontinued
operations                                --       16       668       24

Real estate-related depreciation and
amortization on continuing operations (1) 49,062   52,046   147,124   156,719

Real estate-related depreciation and
amortization on discontinuing operations  --       453      409       1,358

Deduct: Discontinued operations-Realized
(gains) losses and unrealized losses on
disposition of rental property            --       --       (4,447)   --



Funds from operations available to common
shareholders(2)                           $ 64,251 $ 75,001 $ 197,074 $ 219,568



Diluted weighted average shares/units
outstanding (3)                           92,464   92,245   92,467    87,106



Funds from operations per share/unit –
diluted                                   $ 0.69   $ 0.81   $ 2.12    $ 2.52



Dividends declared per common share       $ 0.45   $ 0.45   $ 1.35    $ 1.35



Dividend payout ratio:

Funds from operations-diluted             64.76%   55.34%   63.34%    53.56%



Supplemental Information:

Non-incremental revenue generating
capital expenditures:

Building improvements                     $ 3,855  $ 2,267  $ 7,968   $ 5,881

Tenant improvements and leasing
commissions                               $ 9,770  $ 20,502 $ 28,322  $ 36,625

Straight-line rent adjustments (4)        $ 2,069  $ 1,829  $ 5,385   $ 5,104

Amortization of (above)/below market
lease intangibles, net (5)                $ 293    $ 1,170  $ 1,277   $ 4,824

Gain on reduction of other obligations    --       --       --        $ 1,693

Impairment charge included in equity in
earnings (loss) (6)                       --       --       --        $ 4,010



(1) Includes the Company's share from unconsolidated joint ventures of $1,214
and $1,004 for the quarter ended September 30, 2010 and 2009, respectively, and
$3,562 and $8,780 for the nine months ended September 30, 2010 and 2009,
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 (13,073
shares and 13,982 shares for the quarter ended quarter ended September 30, 2010
and 2009, respectively, and 13,197 and 14,170 for the nine months ended
September 30, 2010 and 2009, respectively), plus dilutive Common Stock
Equivalents (i.e. stock options).

(4) Includes the Company's share from unconsolidated joint ventures of $56 and
$31 for the quarter ended September 30, 2010 and 2009, respectively, and $93
and $254 for the nine months ended September 30, 2010 and 2009, respectively.

(5) Includes the Company's share from unconsolidated joint ventures of $9 and
$2 for the quarter ended September 30, 2010 and 2009, respectively, and $26 and
$575 for the nine months ended September 30, 2010 and 2009, respectively.

(6) Noncontrolling interest in consolidated joint ventures share of loss was
$587.










Mack-Cali Realty Corporation

Statements of Funds from Operations Per Diluted Share

and Funds from Operations Excluding Certain Non-Cash Items Per Diluted Share

(amounts are per diluted share, except share count in thousands) (unaudited)



                                               Quarter Ended Nine Months Ended

                                               September 30, September 30,

                                               2010   2009   2010   2009

Net income available to common shareholders    $ 0.16 $ 0.24 $ 0.58 $ 0.71

Add: Real estate-related depreciation and
amortization on continuing operations (1)      0.53   0.56   1.59   1.80

Real estate-related depreciation and
amortization on discontinued operations        --     --     --     0.02

Deduct: Realized (gains) losses and unrealized
losses on disposition of rental property       --     --     (0.05) --

Noncontrolling interest / rounding adjustment  --     0.01   --     (0.01)



Funds from operations available to common
shareholders (2)                               $ 0.69 $ 0.81 $ 2.12 $ 2.52

Add: Non-cash impairment charge from equity in
earnings (loss) in unconsolidated joint
ventures                                       --     --     --     0.04

Deduct: Non-cash gain from reduction of other
obligations                                    --     --     --     (0.02)



FFO Excluding Items                            $ 0.69 $ 0.81 $ 2.12 $ 2.54



Dividend payout ratio for FFO Excluding Items  64.76% 55.34% 63.34% 53.14%



Diluted weighted average shares/units
outstanding (3)                                92,464 92,245 92,467 87,106



(1) Includes the Company's share from unconsolidated joint ventures
of $0.01 and $0.01 for the quarter ended September 30, 2010 and
2009, respectively, and $0.04 and $0.10 for the nine months ended
September 30, 2010 and 2009, 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 (13,073 shares and 13,982 shares for the quarter
ended September 30, 2010 and 2009, respectively, and 13,197 shares
and 14,170 for the nine months ended September 30, 2010 and 2009,
respectively), plus dilutive Common Stock Equivalents (i.e. stock
options).










Mack-Cali Realty Corporation

Consolidated Balance Sheets

(in thousands, except share amounts) (unaudited)





                                                   September 30, December 31,

                                                   2010          2009

Assets:

Rental property

Land and leasehold interests                       $ 770,166     $ 771,794

Buildings and improvements                         3,958,379     3,948,509

Tenant improvements                                457,040       456,547

Furniture, fixtures and equipment                  9,380         9,358

                                                   5,194,965     5,186,208

Less-accumulated deprec. & amort.                  (1,247,577)   (1,153,223)

Net investment in rental property                  3,947,388     4,032,985

Cash and cash equivalents                          105,812       291,059

Investments in unconsolidated joint ventures       36,000        35,680

Unbilled rents receivable, net                     124,566       119,469

Deferred charges and other assets, net             212,679       213,674

Restricted cash                                    18,036        20,681

Accounts receivable, net                           14,691        8,089



Total assets                                       $ 4,459,172   $ 4,721,637



Liabilities and Equity:

Senior unsecured notes                             $ 1,433,191   $ 1,582,434

Mortgages, loans payable and other obligations     732,969       755,003

Dividends and distributions payable                42,141        42,109

Accounts payable, accrued expenses and other
liabilities                                        106,347       106,878

Rents received in advance and security deposits    49,713        54,693

Accrued interest payable                           18,901        37,330

Total liabilities                                  2,383,262     2,578,447

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,

79,528,151 and 78,969,752 shares outstanding       795           789

Additional paid-in capital                         2,290,315     2,275,716

Dividends in excess of net earnings                (530,970)     (470,047)

Total Mack-Cali Realty Corporation stockholders'
equity                                             1,785,140     1,831,458



Noncontrolling interests in subsidiaries:

Operating Partnership                              287,890       308,703

Consolidated joint ventures                        2,880         3,029

Total noncontrolling interests in subsidiaries     290,770       311,732



Total equity                                       2,075,910     2,143,190



Total liabilities and equity                       $ 4,459,172   $ 4,721,637










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