Press Release

Mack-Cali Realty Corporation Announces Second Quarter Results

Company Release - 7/29/2010 8:17 AM ET

EDISON, N.J., July 29 /PRNewswire-FirstCall/ -- 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




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

Contact: Barry Lefkowitz, Executive Vice President and Chief Financial Officer, +1-732-590-1000, Ilene Jablonski, Senior Director, Marketing and Public Relations, +1-732-590-1000