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NEWS RELEASE

For Immediate Release
 
 
Contact: 
 
 
 
Barry Lefkowitz   
Executive Vice President  
 and Chief Financial Officer  
(732) 590-1000   
Ilene Jablonski
Senior Director, Marketing
 and Public Relations
(732) 590-1000
 
                                                                           


MACK-CALI REALTY CORPORATION
ANNOUNCES SECOND QUARTER RESULTS


Edison, New Jersey—July 29, 2010—Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the second quarter 2010.

Recent highlights include:

-  
Reported funds from operations of $0.71 per diluted share;

-  
Reported net income of $0.24 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 June 30, 2010 amounted to $66.1 million, or $0.71 per share.  For the six months ended June 30, 2010, FFO available to common shareholders equaled $132.6 million, or $1.43 per share.

Net income available to common shareholders for the second quarter 2010 equaled $18.7 million, or $0.24 per share.  For the six months ended June 30, 2010, net income available to common shareholders amounted to $33.2 million, or $0.42 per share.

Total revenues for the second quarter 2010 were $202.8 million.  For the six months ended June 30, 2010, total revenues amounted to $397.4 million.

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

The Company had 79,398,646 shares of common stock, 10,000 shares of 8 percent Series C cumulative redeemable perpetual preferred stock ($25,000 liquidation value per share), and 13,099,906 common operating partnership units outstanding as of June 30, 2010. The Company had a total of 92,498,552 common shares/common units outstanding at June 30, 2010.

As of June 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 37.8 percent at June 30, 2010. The Company had an interest coverage ratio of 2.8 times for the quarter ended June 30, 2010.

"Market fundamentals remain under considerable pressure given the lack of meaningful job growth or corporate expansion. Notwithstanding these challenges, we have been successful in maintaining a high portfolio occupancy rate of 88.9 percent, including completing several major lease transactions that enhance the stability of our cash flows," commented Mitchell E. Hersh, president and chief executive officer.


DIVIDENDS

In May, 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 second quarter 2010, which was paid on July 9, 2010 to shareholders of record as of July 6, 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 April 15, 2010 through July 14, 2010.  The dividend was paid on July 15, 2010 to shareholders of record as of July 6, 2010.


LEASING INFORMATION

Mack-Cali’s consolidated in-service portfolio was 88.9 percent leased at June 30, 2010, as compared to 88.8 percent leased at March 31, 2010.

For the quarter ended June 30, 2010, the Company executed 141 leases at its consolidated in-service portfolio totaling 1,305,847 square feet, consisting of 1,020,537 square feet of office space, 269,710 square feet of office/flex space, 8,000 square feet of retail space and 7,600 square feet of industrial space.  Of these totals, 402,544 square feet were for new leases and 903,303 square feet were for lease renewals and other tenant retention transactions.

Highlights of the quarter’s leasing transactions include:

NORTHERN NEW JERSEY:

-
National Union Fire Insurance Company of Pittsburgh, PA (NUFIC), a subsidiary of the American International Group, Inc. (AIG), signed a five-year four-month lease renewal for 271,533 square feet at 101 Hudson Street in Jersey City.

-
Also at 101 Hudson Street, accounting firm PricewaterhouseCoopers LLP, signed a five-year renewal for 44,944 square feet. The 1,246,283 square-foot office building is 97.4 percent leased.

-  
Hanul Corporation, a third party shipping and return goods management company, signed a new five-year four-month lease for 96,000 square feet at Mack-Cali Airport, located at 200 Riser Road in Little Ferry.  The 286,628 square-foot office building is 100 percent leased.

-
Coram Alternate Site Services, Inc., a provider of home health care, signed a five-year nine-month renewal for 26,125 square feet at 11 Commerce Way in Totowa.  The 47,025 square-foot office/flex building, located in Mack-Cali Commercenter, is 100 percent leased.

-
New Cingular Wireless PCS LLC, signed a five-year renewal for 27,766 square feet at 120 West Passaic Street in Rochelle Park.  The 52,000 square-foot office building is 99.6 percent leased.
 
 
 
 
 
 

 
-
Malcolm Pirnie Inc., an environmental engineering consulting firm, signed a seven-year two-month renewal for 26,114 square feet at 17-17 Route 208 North in Fair Lawn.  The 143,000 square-foot office building is 100 percent leased.

-
PBF Holding Company, LLC, a petroleum refinery operator, signed a five-year two-month new lease for 15,620 square feet at One Sylvan Way in Parsippany.  Located in the Mack-Cali Business Campus, the 150,557 square-foot office building is 60.3 percent leased.

CENTRAL NEW JERSEY:

-
Cellco Partnership, dba Verizon Wireless, signed a five-year renewal for 63,213 square feet at 51 Imclone Drive in Branchburg, where it occupies the full building.

 -
Meridian Health Realty Corporation, a subsidiary of healthcare provider Meridian Health, signed an eight-year renewal for 46,362 square feet at 1350 Campus Parkway, Wall Township. The 79,747 square-foot office building, located in Monmouth Shores Corporate Park, is 99.9 percent leased.

 -
Allstate Insurance Company signed two renewal transactions totaling 53,417 square feet, including a seven-year three-month renewal for 35,973 square feet at 1325 Campus Parkway, located at Monmouth Shores Corporate Park in Wall Township, where it occupies the entire building.  Allstate also signed a seven-year three-month renewal for 13,538 square feet and an eight-year one-month expansion for 3,906 square at 65 Jackson Drive in Cranford.  The 82,778 square-foot office building, located in Cranford Business Park, is 100 percent leased. In addition to the Central New Jersey transactions, Allstate also renewed 4,456 square feet for three years at 61 South Paramus Road in Paramus, New Jersey and 4,014 square feet at 6411 Ivy Lane in Greenbelt, Maryland for five years and four months.

WESTCHESTER COUNTY, NEW YORK:

 -
 Reliance Standard Life Insurance Company signed a transaction totaling 19,401 square feet, representing a three-year four-month renewal of 16,302 square feet and a five-year expansion of 3,099 square feet at 7 Skyline Drive in Hawthorne.  The 109,000 square-foot office building, located in Mid-Westchester Executive Park, is 100 percent leased.

 -
Also in Mid-Westchester Executive Park, UTC Fire & Security Corporation, a fire safety and security solutions provider, signed a new seven-year lease for 15,246 square feet at 6 Skyline Drive in Hawthorne.  The 44,155 square-foot office/flex building is 100 percent leased.

SUBURBAN PHILADELPHIA:

  -
Medical staffing provider, Bayada Nurses Inc., signed a new six-year seven-month lease for 16,215 square feet at 5 Terri Lane in Burlington Township, NJ.  The 74,555 square-foot office/flex building, located in Bromley Commons business park, is 100 percent leased.

Included in the Company’s Supplemental Operating and Financial Data for the second 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/2nd.quarter.sp.10.pdf



 
 
 


ADDITIONAL INFORMATION

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

 
Full Year
 
2010 Range
Net income available to common shareholders
$0.68 - $0.78
Add: Real estate-related depreciation and amortization
2.10
Deduct: Gain on disposition of rental property (0.05)
Funds from operations available to common shareholders
$2.73 - $2.83

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, July 29, 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=3213261
 
The live conference call is also accessible by calling (913) 312-4373 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 July 29, 2010 through August 5, 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 1324646.

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

Second Quarter 2010 Form 10-Q:
http://www.mack-cali.com/file-uploads/2nd.quarter.10q.10.pdf

Second Quarter 2010 Supplemental Operating and Financial Data:
http://www.mack-cali.com/file-uploads/2nd.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
June 30,
    
Six Months Ended
June 30,
  
Revenues
  
2010
    
2009
    
2010
    
2009
  
Base rents
   $ 149,692     $ 152,891     $ 302,385     $ 301,022  
Escalations and recoveries from tenants
     25,837       24,623       51,956       52,390  
Construction services
     22,357       4,794       33,219       8,705  
Real estate services
     1,669       2,116       3,646       4,642  
Other income
     3,230       3,399       6,162       6,350  
Total revenues
     202,785       187,823       397,368       373,109  
                                 
Expenses
                                
Real estate taxes
     25,912       23,293       48,073       46,565  
Utilities
     16,409       15,956       36,235       36,653  
Operating services
     28,073       26,619       56,754       54,261  
Direct construction costs
     21,411       4,296       31,704       8,010  
General and administrative
     8,658       10,651       17,072       20,708  
Depreciation and amortization
     47,474       49,240       95,964       97,083  
Total expenses
     147,937       130,055       285,802       263,280  
Operating income
     54,848       57,768       111,566       109,829  
                                 
Other (Expense) Income
                                
Interest expense
     (37,335 )     (33,205 )     (76,406 )     (65,701 )
Interest and other investment income
     18       187       39       383  
Equity in earnings (loss) of unconsolidated joint ventures
     260       (1,922 )     (262 )     (7,036 )
Gain on reduction of other obligations
     --       1,693       --       1,693  
Total other (expense) income
     (37,057 )     (33,247 )     (76,629 )     (70,661 )
Income from continuing operations
     17,791       24,521       34,937       39,168  
Discontinued Operations:
                                
Income from discontinued operations
     11       104       242       54  
Realized gains (losses) and unrealized losses on disposition of rental property, net
     4,447       --       4,447       --  
Total discontinued operations, net
     4,458       104       4,689       54  
Net income
     22,249       24,625       39,626       39,222  
Noncontrolling interest in consolidated joint ventures
     86       135       173       767  
Noncontrolling interest in Operating Partnership
     (2,475 )     (3,869 )     (4,897 )     (6,506 )
Noncontrolling interest in discontinued operations
     (635 )     (17 )     (668 )     (8 )
Preferred stock dividends
     (500 )     (500 )     (1,000 )     (1,000 )
Net income available to common shareholders
   $ 18,725     $ 20,374     $ 33,234     $ 32,475  
                                 
PER SHARE DATA:
                                
 
Basic earnings per common share
   $ 0.24     $ 0.28     $ 0.42     $ 0.46  
                                 
Diluted earnings per common share
   $ 0.24     $ 0.28     $ 0.42     $ 0.46  
                                 
Basic weighted average shares outstanding
     79,203       73,903       79,089       70,214  
                                 
Diluted weighted average shares outstanding
     92,489       88,000       92,482       84,480  


 
 
 


 

Mack-Cali Realty Corporation
Statements of Funds from Operations
(in thousands, except per share/unit amounts) (unaudited)
 
   
Quarter Ended
June 30,
    
Six Months Ended
June 30,
  
   
2010
    
2009
    
2010
    
2009
  
Net income available to common shareholders
   $ 18,725     $ 20,374     $ 33,234     $ 32,475  
Add: Noncontrolling interest in Operating Partnership
     2,475       3,869       4,897       6,506  
Noncontrolling interest in discontinued operations
     635       17       668       8  
Real estate-related depreciation and amortization on continuing operations (1)
     48,373       51,741       97,844       104,673  
Real estate-related depreciation and amortization on discontinuing operations
     302       475       409       905  
Deduct: Discontinued operations-Realized (gains) losses and unrealized losses on disposition of rental property
     (4,447 )     --       (4,447 )     --  
 
Funds from operations available to common shareholders (2)
   $ 66,063     $ 76,476     $ 132,605     $ 144,567  
                                 
Diluted weighted average shares/units outstanding (3)
     92,489       88,000       92,482       84,480  
                                 
Funds from operations per share/unit – diluted
   $ 0.71     $ 0.87     $ 1.43     $ 1.71  
                                 
Dividends declared per common share
   $ 0.45     $ 0.45     $ 0.90     $ 0.90  
                                 
Dividend payout ratio:
                                
Funds from operations-diluted
     63.00 %     51.78 %     62.77 %     52.59 %
                                 
Supplemental Information:
                                
Non-incremental revenue generating capital expenditures:
                                
Building improvements
   $ 2,127     $ 2,005     $ 4,113     $ 3,614  
Tenant improvements and leasing commissions
   $ 10,584     $ 8,098     $ 18,552     $ 16,123  
Straight-line rent adjustments (4)
   $ 1,028     $ 1,888     $ 3,316     $ 3,275  
Amortization of (above)/below market lease intangibles, net (5)
   $ 377     $ 1,545     $ 984     $ 3,654  
Gain on reduction of other obligations
     --     $ 1,693       --     $ 1,693  
Impairment charge included in equity in earnings (loss) (6)
     --       --       --     $ 4,010  
   
(1) 
Includes the Company’s share from unconsolidated joint ventures of $1,242 and $2,605 for the quarter ended June 30, 2010 and 2009, respectively, and $2,348 and $7,776 for the six months ended June 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 (13,155 shares and 14,097 shares for the quarter ended quarter ended June 30, 2010 and 2009, respectively, and 13,259 and 14,266 for the six months ended June 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 $12 and $64 for the quarter ended June 30, 2010 and 2009, respectively, and $37 and $223 for the six months ended June 30, 2010 and 2009, respectively.
(5)
 Includes the Company’s share from unconsolidated joint ventures of $9 and $135 for the quarter ended quarter ended June 30, 2010 and 2009, respectively, and $17 and $574 for the six months ended June 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
June 30,
    
Six Months Ended
June 30,
  
   
2010
    
2009
    
2010
    
2009
  
Net income available to common shareholders
   $ 0.24     $ 0.28     $ 0.42     $ 0.46  
Add: Real estate-related depreciation and amortization on continuing operations (1)
     0.52       0.59       1.06       1.24  
Real estate-related depreciation and amortization on discontinued operations
     --       0.01       --       0.01  
Deduct: Realized (gains) losses and unrealized losses on disposition of rental property
     (0.05 )     --       (0.05 )     --  
Noncontrolling interest / rounding adjustment
     --       (0.01 )     --       --  
 
Funds from operations available to common shareholders (2)
   $ 0.71     $ 0.87     $ 1.43     $ 1.71  
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 )     --       (0.02 )
 
FFO Excluding Items
   $ 0.71     $ 0.85     $ 1.43     $ 1.73  
                                 
Dividend payout ratio for FFO Excluding Items
     63.00 %     52.95 %     62.77 %     51.97 %
                                 
Diluted weighted average shares/units outstanding (3)
     92,489       88,000       92,482       84,480  
   
(1)
Includes the Company’s share from unconsolidated joint ventures of $0.01 and $0.03 for the quarter ended June 30, 2010 and 2009, respectively, and $0.03 and $0.09 for the six months ended June 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 (13,155 shares and 14,097 shares for the quarter ended June 30, 2010 and 2009, respectively, and 13,259 shares and 14,266 for the six months ended June 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)
     
     
   
June 30,
    
December 31,
   
2010
    
2009
Assets:
          
Rental property
          
Land and leasehold interests
   $ 770,239     $ 771,794  
Buildings and improvements
     3,949,892       3,948,509  
Tenant improvements
     448,799       456,547  
Furniture, fixtures and equipment
     9,316       9,358  
      5,178,246       5,186,208  
Less-accumulated deprec. & amort.
     (1,207,917 )     (1,153,223 )
Net investment in rental property
     3,970,329       4,032,985  
Cash and cash equivalents
     140,990       291,059  
Investments in unconsolidated joint ventures
     35,998       35,680  
Unbilled rents receivable, net
     122,601       119,469  
Deferred charges and other assets, net
     216,809       213,674  
Restricted cash
     19,320       20,681  
Accounts receivable, net
     11,623       8,089  
                   
Total assets
   $ 4,517,670     $ 4,721,637  
                   
Liabilities and Equity:
                  
Senior unsecured notes
   $ 1,432,944     $ 1,582,434  
Mortgages, loans payable and other obligations
     733,874       755,003  
Dividends and distributions payable
     42,124       42,109  
Accounts payable, accrued expenses and other liabilities
     121,404       106,878  
Rents received in advance and security deposits
     50,787       54,693  
Accrued interest payable
     35,735       37,330  
Total liabilities
     2,416,868       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,
                  
 79,398,646 and 78,969,752 shares outstanding
     793       789  
Additional paid-in capital
     2,286,633       2,275,716  
Dividends in excess of net earnings
     (508,221 )     (470,047 )
Total Mack-Cali Realty Corporation stockholders’ equity
     1,804,205       1,831,458  
                   
Noncontrolling interests in subsidiaries:
                  
Operating Partnership
     293,549       308,703  
Consolidated joint ventures
     3,048       3,029  
Total noncontrolling interests in subsidiaries
     296,597       311,732  
                   
Total equity
     2,100,802       2,143,190  
                   
Total liabilities and equity
   $ 4,517,670     $ 4,721,637