Mack-Cali Realty Corporation Announces Fourth Quarter Results
02/14/2008 Category: Earnings
EDISON, NEW JERSEY — February 14, 2008 — Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the fourth quarter 2007.
Recent highlights include:
- Reported net income per diluted share of $0.24;
- Reported funds from operations per diluted share of $0.89; and
- Declared $0.64 per share quarterly common stock dividend.
Net income available to common shareholders for the fourth quarter 2007 equaled $15.8 million, or $0.24 per share, versus $67.4 million, or $1.07 per share, for the same quarter last year. For the year ended December 31, 2007, net income available to common shareholders equaled $108.5 million, or $1.61 per share, versus $142.7 million, or $2.28 per share, for the same period last year.
Funds from operations (FFO) available to common shareholders for the quarter ended December 31, 2007 amounted to $73.0 million, or $0.89 per share, versus $68.2 million, or $0.87 per share, for the quarter ended December 31, 2006. For the year ended December 31, 2007, FFO available to common shareholders amounted to $293.9 million, or $3.56 per share, versus $290.5 million, or $3.73 per share, for the same period last year.
Total revenues for the fourth quarter 2007 increased 2.9 percent to $201.7 million as compared to $196.1 million for the same quarter last year. For the year ended December 31, 2007, total revenues amounted to $808.4 million, an increase of 10.4 percent over total revenues of $732.0 million, for the same period last year.
All per share amounts presented above are on a diluted basis.
The Company had 65,558,073 shares of common stock, 10,000 shares of 8 percent Series C cumulative redeemable perpetual preferred stock ($25,000 liquidation value per share), and 14,985,538 common operating partnership units outstanding as of December 31, 2007. The Company had a total of 80,543,611 common shares/common units outstanding at December 31, 2007.
As of December 31, 2007, the Company had total indebtedness of approximately $2.2 billion, with a weighted average annual interest rate of 6.08 percent. The Company had a total market capitalization of $5.0 billion and a debt-to-undepreciated assets ratio of 40.2 percent at December 31, 2007. The Company had an interest coverage ratio of 3.3 times for the quarter ended December 31, 2007.
Mitchell E. Hersh, president and chief executive officer, commented, "Our fourth quarter was marked by solid leasing activity and improved occupancies. While it is widely held that the nation's economy is slowing and the capital markets are constrained, we enter this period of uncertainty with an extremely well leased portfolio with high caliber tenants, minimal 2008 lease expirations and a strong balance sheet. The combination of these factors will allow Mack-Cali to operate efficiently as well as be opportunistic going forward."
In December, the Company's Board of Directors declared a cash dividend of $0.64 per common share (indicating an annual rate of $2.56 per common share) for the fourth quarter 2007, which was paid on January 14, 2008 to shareholders of record as of January 4, 2008.
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 October 15, 2007 through January 14, 2008. The dividend was paid on January 15, 2008 to shareholders of record as of January 4, 2008.
Mack-Cali's consolidated in-service portfolio was 92.7 percent leased at December 31, 2007, as compared to 92.2 percent at September 31, 2007 and 92.0 percent at December 31, 2006.
For the quarter ended December 31, 2007, the Company executed 137 leases totaling 1,118,154 square feet, consisting of 890,428 square feet of office space and 227,726 square feet of office/flex space. Of these totals, 248,124 square feet were for new leases and 870,030 square feet were for lease renewals and other tenant retention transactions.
For the year ended December 31, 2007, the Company executed 519 leases totaling 4,262,349 square feet, consisting of 2,989,749 square feet of office space, 1,166,483 square feet of office/flex space and 106,117 square feet of industrial/warehouse space. Of these totals, 1,339,913 square feet were for new leases and 2,922,436 square feet were for lease renewals and other tenant retention transactions.
Highlights of the quarter's leasing transactions include:
IN NORTHERN NEW JERSEY:
- An international financial institution signed a 137,076 square-foot transaction extending their lease for 10 years and two months at Harborside Financial Center, Plaza 3, in Jersey City. Plaza 3 is a 725,600 square-foot office building on the Jersey City waterfront and is 99.1 percent leased.
- National Union Fire Insurance Company of Pittsburgh, PA, a subsidiary of the American International Group, Inc. (AIG), signed expansions totaling 77,050 square feet at 101 Hudson Street in Jersey City. The expansion space is comprised of 53,372 square feet for four years and seven months and 23,678 square feet for five years. 101 Hudson Street is a 1,246,283 square-foot, 99.2 percent-leased office building on the Jersey City waterfront.
- Financial services firm Citigroup Global Markets, Inc. signed a transaction to remain at 140 East Ridgewood Avenue in Paramus for 10 years and five months. The 22,782 square-foot deal relocates a portion of Citigroup's space within the building and expands their presence by 3,118 square feet. 140 E. Ridgewood is a 239,680 square-foot office building and is 98.4 percent leased.
- Orloff, Lowenbach, Stifelman & Siegel, P.A., a law firm, signed a five-year renewal for 20,228 square feet at 101 Eisenhower Parkway in Roseland. The 237,000 square-foot office building, located in Eisenhower/280 Corporate Center, is 95.8 percent leased.
IN CENTRAL NEW JERSEY:
- Greater New York Mutual Insurance Company signed a 10-year renewal of its lease for the entire 40,000 square foot office building located at 377 Summerhill Road in East Brunswick.
- Accounting firm WithumSmith+Brown signed a transaction totaling 33,432 square feet at 5 Vaughn Drive in Princeton, representing an eight-year expansion of 6,235 square feet and two-year extension of 27,197 square feet. 5 Vaughn Drive is a 98,500 square foot office building and is 100 percent leased.
IN WESTCHESTER COUNTY, NEW YORK:
- Xand Corporation, a provider of data center infrastructure and business continuity solutions, leased a total of 89,710 square feet at Mid-Westchester Executive Park in Hawthorne. The transactions consisted of a three-year extension of 46,078 square feet, representing the entire office/flex building located at 11 Skyline Drive, and a new, 10-year and nine month lease for 43,632 square feet at 17 Skyline Drive. 17 Skyline Drive is an 85,000 square-foot office building and is 100 percent leased.
- Montefiore Medical Center renewed its lease of 26,742 square feet at 3 Executive Boulevard in Yonkers for 10 years. The 58,000 square foot office building is 100 percent leased.
- Cablevision Lightpath, Inc., a subsidiary of Cablevision Systems Corporation, signed a five-year and three-month renewal of its lease for 11,400 square feet at 565 Taxter Road. The 170,554 square-foot office building is located in the Taxter Corporate Park in Elmsford and is 98.8 percent leased.
IN ROCKLAND COUNTY, NEW YORK:
- Allstate Insurance Company renewed its lease of 29,005 square feet at 400 Rella Boulevard for five years. The 180,000 square-foot office building is located in Suffern and is 91.4 percent leased.
IN SUBURBAN PHILADELPHIA:
- Cort Business Services Corporation, a subsidiary of Berkshire Hathaway, renewed its lease of 46,880 square feet at 31 Twosome Drive in Moorestown, New Jersey for five years. 31 Twosome Drive, a 84,200 square-foot office/flex building located in the Moorestown West Corporate Center, is 100 percent leased.
- Beverage producer Tropicana Products, Inc. signed a seven-year transaction totaling 26,580 square feet, representing a renewal of 19,525 square feet and expansion of 7,055 square feet, at 915 N. Lenola Road. The 52,488 square-foot office flex building is located in the Moorestown West Corporate Center and is 100 percent leased.
Included in the Company's Supplemental Operating and Financial Data for the fourth quarter 2007 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:
The Company expressed comfort with net income and FFO per diluted share for the full year 2008, as follows:
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, February 14, 2008 at 11:00 a.m. Eastern Time, which will be broadcast live via the Internet at:
The live conference call is also accessible by calling 913.312.1390 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 February 14, 2008 through February 21, 2008.
A replay of the call will also be accessible during the same time period by calling 719.457.0820 and using the pass code 1584951.
Copies of Mack-Cali's Form 10-K and Supplemental Operating and Financial Data are available on Mack-Cali's website, as follows:
2007 Form 10-K:
Fourth Quarter 2007 Supplemental Operating and Financial Data:
In addition, these items are available upon request from:
Mack-Cali Investor Relations Dept.
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 294 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 33.7 million square feet. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of approximately 2,200 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 Annual Report on Form 10-K (the "10-K") 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-K, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the 10-K 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.