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Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended December 31,
1998 1997
-----------------------------------------------------------------------------------------
Base rents $115,775 $60,887
Escalations & recoveries 15,084 8,666
Parking and other 3,210 1,665
Interest income 236 3,277
Equity in earnings of
unconsolidated joint ventures 636 -
Total revenues 134,941 74,495
Real estate taxes 12,882 7,478
Utilities 9,723 5,245
Operating services 18,839 9,857
General and administrative 6,864 5,260
Depreciation and amortization 22,379 11,194
Interest expense 23,896 10,680
Total expenses 94,583 49,714
Income from operations before
minority interest 40,358 24,781
Minority interest (1) (9,050) (2,971)
Income from operations 31,308 21,810
Minority interest - beneficial
conversion charge -- (26,801)
Non-recurring merger-related
charges (2) -- (42,463)
Net income(loss) $31,308 $(47,454)
PER SHARE DATA:
Income from operations - basic $0.55 $0.46
Net income(loss)- basic $0.55 $(1.00)
Income from operations - diluted $0.55 $0.45
Net income(loss)- diluted $0.55 $(1.00)
Dividends declared $0.55 $0.50
Basic weighted average common
shares outstanding 57,173 47,566
Diluted weighted average common
shares outstanding 66,265 53,073
(1) Excludes effect of beneficial conversion charge in 1997 which is deducted
below and minority interest's share of non-recurring merger related
charges.
(2) Net of minority interest's share in 1997 of $4,056.
Mack-Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share/unit amounts)
Quarter Ended
December 31,
1998 1997
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Income from operations before
minority interest and
extraordinary item $40,358 $24,781
Add: Real estate depreciation
and amortization(1) 22,319 11,007
Deduct: Adj. to rental income for
straight-lining of rents(1) (3,984) (1,820)
Funds from operations(2) after adj.
for straight-lining of rents $58,693 $33,968
Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (1,371) (422)
Tenant improvements and leasing
commissions (4,403) (3,408)
Cash available for distribution $52,919 $30,138
Basic weighted average shares/units
outstanding (3) 65,987 52,111
Diluted weighted average shares/units
outstanding(4) 73,487 54,438
Per Share/Unit - Basic(5):
Funds from operations $0.83 $0.63
Cash available for distribution $0.74 $0.56
Per Share/Unit - Diluted:
Funds from operations $0.80 $0.62
Cash available for distribution $0.72 $0.55
Dividend per common share $0.55 $0.50
Dividend payout ratios:
Funds from operations-diluted 68.86% 80.13%
Cash available for distribution-diluted 76.38% 90.31%
(1) Includes FFO adjustments in 1998 related to Company's investments
in unconsolidated joint ventures.
(2) Funds from operations for both periods are calculated in accordance
with the National Association of Real Estate Investment Trusts
(NAREIT)definition, as published in March 1995.
(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.
(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible
preferred units, options and warrants).
(5) 1998 amount calculated after deduction for distributions to preferred unit
holders of $4,223.
Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Year Ended December 31,
1998 1997
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Base rents $427,528 $206,215
Escalations & recoveries 51,981 31,130
Parking and other 10,712 6,910
Interest income 2,423 5,546
Equity in earnings of
unconsolidated joint ventures 1,055 --
Total revenues 493,699 249,801
Real estate taxes 48,297 25,992
Utilities 38,440 18,246
Operating services 62,967 30,912
General and administrative 25,572 15,862
Depreciation and amortization 78,916 36,825
Interest expense 88,043 39,078
Total expenses 342,235 166,915
Income from operations before
minority interest 151,464 82,886
Minority interest (1) (32,513) (8,965)
Income from operations 118,951 73,921
Minority interest - beneficial
conversion charge -- (26,801)
Non-recurring merger-related
charges (2) -- (42,132)
Extraordinary item-loss on early
retirement of debt(3) (2,373) (3,583)
Net income $116,578 $1,405
PER SHARE DATA:
Income from operations - basic $2.13 $1.88
Net income - basic $2.09 $0.04
Income from operations - diluted $2.11 $1.86
Net income - diluted $2.07 $0.04
Dividends declared $2.10 $1.90
Basic weighted average common
shares outstanding 55,840 39,266
Diluted weighted average common
shares outstanding 63,893 44,156
(1) Excludes effect of beneficial conversion charge in 1997 which is deducted
below and minority interest's share of non-recurring merger- related
charges, gain on sale of rental property and extraordinary items.
(2) Net of minority interest's share in 1997 of $4,387.
(3) Net of minority interest's share of extraordinary item of $297 in 1998 and
$402 in 1997.
Mack-Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share/unit amounts)
Year Ended
December 31,
1998 1997
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Income from operations before
minority interest & extraordinary item $151,464 $82,886
Add: Real estate depreciation
and amortization(1) 79,169 36,599
Deduct: Adj. to rental income for
straight-lining of rents(1) (13,684) (7,733)
Funds from operations(2) after adj.
for straight-lining of rents $216,949 $111,752
Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (3,075) (1,544)
Tenant improvements and leasing
commissions (19,192) (6,746)
Cash available for distribution $194,682 $103,462
Basic weighted average shares/units
outstanding (3) 63,438 43,356
Diluted weighted average shares/units
outstanding(4) 70,867 44,351
Per Share/Unit - Basic(5):
Funds from operations $3.16 $2.56
Cash available for distribution $2.81 $2.37
Per Share/Unit - Diluted:
Funds from operations $3.06 $2.52
Cash available for distribution $2.75 $2.33
Dividend per common share $2.10 $1.90
Dividend payout ratios:
Funds from operations-diluted 68.60% 75.41%
Cash available for distribution-diluted 76.44% 81.45%
(1) Includes FFO adjustments in 1998 related to Company's investments in
unconsolidated joint ventures.
(2) Funds from operations for both periods are calculated in accordance with
the National Association of Real Estate Investment Trusts (NAREIT)
definition, as published in March 1995.
(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.
(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible
preferred units, options and warrants).
(5) 1998 amount calculated after deduction of distributions to preferred unit
holders of $16,313.
Mack-Cali Realty Corporation
Consolidated Balance Sheets
(in thousands, except share amounts)
December 31,
ASSETS: 1998 1997
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Rental property
Land and leasehold interests $510,534 $374,242
Buildings and improvements 2,887,115 2,206,462
Tenant improvements 64,464 44,596
Furniture, fixtures and equipment 5,686 4,316
3,467,799 2,629,616
Less-accumulated depreciation
and amortization (177,934) (103,133)
Total rental property 3,289,865 2,526,483
Cash and cash equivalents 5,809 2,704
Investments in unconsolidated
joint ventures 66,508 --
Unbilled rents receivable 41,038 27,438
Deferred charges and other assets, net 39,020 18,989
Restricted cash 6,026 6,844
Accounts receivables 3,928 3,736
Mortgage note receivable -- 7,250
Total assets $3,452,194 $2,593,444
LIABILITIES AND STOCKHOLDER'S EQUITY:
Mortgages and loans payable $1,420,931 $972,650
Dividends and distributions payable 40,564 28,089
Accounts payable and accrued expenses 33,253 31,136
Rents received in advance and
security deposits 29,980 21,395
Accrued interest payable 2,246 3,489
Total liabilities 1,526,974 1,056,759
Minority interest of unitholders
in Operating Partnership 501,313 379,245
Commitments and contingencies
stockholder's equity:
Preferred stock, 5,000,000 shares
authorized, none issued -- --
Common stock, $0.01 par value, 190,000,000
shares authorized, 57,266,137 and
49,856,289 shares outstanding 573 499
Additional paid-in capital 1,514,648 1,244,883
Dividends in excess of net earnings (91,314) (87,942)
Total stockholder's equity 1,423,907 1,157,440
Total liabilities and
stockholder's equity $3,452,194 $2,593,444
Mack-Cali Realty Corporation
Leasing Statistics
For The Quarter Ended December 31, 1998
WHOLLY-OWNED PORTFOLIO
SUMMARY OF SPACE LEASED DURING PERIOD
IN-SERVICE PROPERTIES:
Square feet leased at September 30, 1998 25,693,568
Net leasing activity in 4th quarter 1998 115,058
Leased s.f. from 4th quarter 1998 acquisitions 40,000
Occupancy adjustment(1) (1,169)
Square feet leased at December 31, 1998 25,847,457
Percent leased at December 31, 1998 96.6%
Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 107,000
OFFICE SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
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New Leases:
First generation space 3 28,341 $21.00 5.0
Second generation space 48 164,588 $23.77 6.9
Total new leasing 51 192,929 $23.36
Renewals & extensions 86 403,429 $20.21 4.1
Other retained tenants 33 126,414 $23.63 5.3
Total leasing 170 722,772
Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total
Expend. committed-4th qtr $4,501,474 $2,973,185 $7,474,659
Rentable s.f. leased-4th qtr 694,431
Cap. ex. committed
per r.s.f. per year $1.04 $0.73 $1.77
(1) Represents the net change in the amount of space leased/expired since the
prior reporting period in excess of 100 percent of the gross rentable area
of certain properties in the portfolio.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs, net of estimated profit and overhead.
OFFICE/FLEX SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
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New Leases - Second
generation space 7 65,808 $12.81 10.3
Renewals & extensions 15 172,543 $14.33 4.2
Other retained tenants 3 13,240 $17.63 5.6
Total leasing 25 251,591
Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total
Expend. committed-4th qtr $481,569 $494,786 $976,355
Rentable s.f. leased-4th qtr 251,591
Cap. ex. committed
per r.s.f. per year $0.23 $0.37 $0.60
INDUSTRIAL/WAREHOUSE SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
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New Leases-Second
generation space 1 450 $16.00 1.0
Other retained tenants 2 8,800 $ 9.74 5.2
Total leasing 3 9,250
Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total
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Expend. committed-4th qtr $17,411 $8,536 $25,947
Rentable s.f. leased-4th qtr 9,250
Cap. ex. committed
per r.s.f. per year $0.35 $0.19 $0.53
(1) Equals Atriple net@ rent plus common area costs and real estate taxes.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs, net of estimated profit and overhead.
LEASE RENEWALS
Number of
Leases Rentable S.F.
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Leases expiring 190 868,555
Leases renewed & extended 101 575,972
Other retained tenants 38 148,454
Total leases retained 139 724,426
Percent retained 73.2% 83.4%
Future expirations renewed or
relet (included in totals above) 50 453,619
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JOINT VENTURE PORTFOLIO
SUMMARY OF SPACE LEASED DURING PERIOD
IN-SERVICE PROPERTIES:
Square feet leased at September 30, 1998 524,025
Net leasing activity in 4th quarter 1998 26,728
Leased s.f.- 4th quarter 1998 acquisitions 74,960
Square feet leased at December 31, 1998 625,713
Percent leased at December 31, 1998 82.3%
Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31,1998 601,300
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
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Leasing Activity:
Other retained tenants 1 26,728 $34.00 4.4
Capital Expenditures - Second Generation Space(1):
Tenant Leasing
Improvements(2) Commissions Total
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Expend. committed-4th qtr $534,560 $203,935 $738,495
Rentable s.f. leased-4th qtr 26,728
Cap. ex. committed
per r.s.f. per year $4.54 $1.73 $6.27
(1) Represents amounts committed, but not necessarily expended during period.
(2) Equals estimated workletter costs, net of estimated profit and overhead.
Mack-Cali Realty Corporation
Leasing Statistics
For The Year Ended December 31, 1998
WHOLLY-OWNED PORTFOLIO
SUMMARY OF SPACE LEASED DURING PERIOD
IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1997 21,045,625
Net leasing activity in 1998 252,337
Leased s.f. - 1998 acquisitions 4,566,659
Occupancy adjustment(1) (17,164)
Square feet leased at December 31, 1998 25,847,457
Percent leased at December 31, 1998 96.6%
Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 107,000
OFFICE SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
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New Leases:
First generation space 11 142,040 $20.29 5.0
Second generation space 224 881,488 $24.25 5.8
Total new leasing 235 1,023,528 $23.70
Renewals & extensions 275 1,498,610 $18.64 5.3
Other retained tenants 137 597,674 $22.18 6.0
Total leasing 647 3,119,812
Capital Expenditures - Second Generation Space(1):
Tenant Leasing
Improvements(2) Commissions Total
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Expend. committed $18,375,792 $11,620,969 $29,996,761
Rentable s.f. leased 2,977,772
Cap. ex. committed
per r.s.f. per year $0.98 $0.65 $1.63
(1) Represents amounts committed, but not necessarily expended during period.
(2) Equals estimated workletter costs, net of estimated profit and overhead.
OFFICE/FLEX SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
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New Leases:
First generation space 1 10,100 $13.08 5.0
Second generation space 29 211,403 $11.20 6.1
Total new leasing 30 221,503 $11.28
Renewals & extensions 64 562,940 $13.28 4.8
Other retained tenants 15 42,294 $15.65 4.7
Total leasing 109 826,737
Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total
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Expend. committed $1,475,911 $1,353,555 $2,829,466
Rentable s.f. leased 816,637
Cap. ex. committed
per r.s.f. per year $0.33 $0.35 $0.68
INDUSTRIAL/WAREHOUSE SPACE
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
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New Leases- Second
generation space 3 36,726 $ 9.51 5.7
Renewals & extensions 3 13,190 $10.18 3.9
Other retained tenants 5 35,859 $ 8.80 2.1
Total leasing 11 85,775
Capital Expenditures - Second Generation Space(2):
Tenant Leasing
Improvements(3) Commissions Total
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Expend. committed $75,597 $132,576 $208,173
Rentable s.f. leased 85,775
Cap. ex. committed
per r.s.f. per year $0.17 $0.33 $0.50
(1) Equals Atriple net@ rent plus common area costs and real estate taxes.
(2) Represents amounts committed, but not necessarily expended during period.
(3) Equals estimated workletter costs, net of estimated profit and overhead.
LEASE RENEWALS
Number of
Leases Rentable S.F.
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Leases expiring 788 3,853,754
Leases renewed & extended 342 2,074,740
Other retained tenants 158 675,827
Total leases retained 500 2,750,567
Percent retained 63.4% 71.4%
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JOINT VENTURE PORTFOLIO
SUMMARY OF SPACE LEASED DURING PERIOD
IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1997 --
Leased s.f. - 1998 acquisitions 492,073
Net leasing activity in 1998 133,640
Square feet leased at December 31, 1998 625,713
Percent leased at December 31, 1998 82.3%
Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 601,300
Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
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New Leases:
First generation space 1 15,350 $37.00 5.0
Second generation space 5 74,673 $29.39 5.2
Total new leasing 6 90,023 $30.69
Other retained tenants 2 53,456 $33.50 4.7
Total leasing 8 143,479
Capital Expenditures - Second Generation Space(1):
Tenant Leasing
Improvements(2) Commissions Total
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Expend. committed $1,888,130 $568,650 $2,456,780
Rentable s.f. leased 128,129
Cap. ex. committed
per r.s.f. per year $2.94 $0.88 $3.82
(1) Represents amounts committed, but not necessarily expended during period.
(2) Equals estimated workletter costs, net of estimated profit and overhead.
Executive Vice President and Chief Financial Officer
Mack-Cali Realty Corporation
T: 732.590.1000
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