EDISON, N.J., Feb. 7, 2013 /PRNewswire/ -- Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the fourth quarter 2012.
Recent highlights include:
Funds from operations (FFO) available to common shareholders for the quarter ended December 31, 2012 amounted to $65.4 million, or $0.66 per share. For the year ended December 31, 2012, FFO available to common shareholders equaled $267.0 million, or $2.67 per share.
Net loss to common shareholders for the fourth quarter 2012 equaled $9.2 million, or $0.11 per share. The results for the fourth quarter include $25.4 million, or $0.25 per share, of losses, net, on disposition of rental property and impairments. For the year ended December 31, 2012, net income available to common shareholders amounted to $40.9 million, or $0.47 per share. The results for the year include $23.0 million, or $0.23 per share, of losses, net, on disposition of rental property and impairments.
Total revenues for the fourth quarter 2012 were $177.0 million. For the year ended December 31, 2012, total revenues amounted to $704.7 million.
All per share amounts presented above are on a diluted basis.
The Company had 87,536,292 shares of common stock, and 12,141,836 common operating partnership units outstanding as of December 31, 2012. The Company had a total of 99,678,128 common shares/common units outstanding at December 31, 2012.
As of December 31, 2012, the Company had total indebtedness of approximately $2.2 billion, with a weighted average annual interest rate of 5.86 percent.
The Company had a debt-to-undepreciated assets ratio of 36.7 percent at December 31, 2012. The Company had an interest coverage ratio of 3.2 times for the quarter ended December 31, 2012.
Mitchell E. Hersh, president and chief executive officer, commented, "In a watershed event for Mack-Cali, during the fourth quarter, we acquired Roseland Properties, a premier, best-in-class multi-family developer and manager in the Northeast. We are also very excited about our recently announced multi-family growth initiatives, which are a direct result of the Roseland deal. These activities reflect progress toward our strategic goal of diversification into the multi-family sector."
In October, the Company acquired the real estate development and management businesses of Roseland Partners, L.L.C., a premier multi-family residential community developer and operator in the Northeast, and Roseland's interests in six operating multi-family properties totaling 1,769 apartments, one condo-residential property totaling three units and four commercial properties totaling approximately 212,000 square feet, 13 in-process development projects, which include nine multi-family properties totaling 2,149 apartments, two garages totaling 1,591 parking spaces and two retail properties totaling approximately 35,400 square feet, and interests or options in land parcels which may support approximately 5,980 apartments, approximately 736,000 square feet of commercial space, and a 321-key hotel. The locations of the properties extend from New Jersey to Massachusetts. The majority of the properties are located in New Jersey, in particular, at its flagship development at Port Imperial in Weehawken and West New York, in addition to the Jersey City Waterfront and other urban in-fill and transit-oriented locations.
The Roseland business and real property interests were acquired for aggregate consideration of up to $134.6 million, subject to adjustment, including $115.0 million in cash at closing and an additional earn-out of up to $15.6 million in cash over the next three years, under certain conditions. During the three-year earn-out period, each of Roseland's principals, Marshall Tycher, Brad Klatt and Carl Goldberg, will serve as co-presidents of Roseland Management Services, L.P., a newly formed wholly owned subsidiary of Mack-Cali, pursuant to employment agreements executed at closing. Mitchell E. Hersh, President and Chief Executive Officer of Mack-Cali Realty Corporation, also assumed the role of Chairman and Chief Executive of Roseland Management Services, L.P.
The transaction was financed through a combination of cash on hand and borrowings under the Company's $600 million unsecured revolving credit facility.
In January, the Company acquired Alterra at Overlook Ridge IA in Metro Boston for approximately $61.3 million. The Company has also agreed to acquire Alterra at Overlook Ridge IB for approximately $88 million and expects an early April closing when the loan that currently encumbers the property opens for prepayment.
The luxury multi-family properties contain 722 rental units in the master planned community of Overlook Ridge in Revere and Malden, Massachusetts and is currently 97.2 percent leased. The properties are being acquired from a Prudential Insurance Company of America joint venture.
In December, the Company's Roseland subsidiary commenced construction of the following key multi-family communities in the Northeast:
Upon completion, Roseland will oversee the leasing and management responsibilities for the properties discussed above.
In November, the Company sold its three office buildings at Moorestown Corporate Center totaling 222,258 square feet located at Strawbridge Drive in Moorestown, New Jersey for net sales proceeds of approximately $19.4 million, with a loss of approximately $0.1 million from the sale. The Company previously recognized a valuation allowance of $1.6 million on these properties at March 31, 2012.
In November, the Company completed the sale of $250 million face amount of 2.50 percent senior unsecured notes due December 15, 2017 with interest payable semi-annually in arrears. The net proceeds from the issuance of $246.4 million, after underwriting discount and offering expenses, were used primarily to repay outstanding borrowings under the Company's unsecured revolving credit facility.
In December, 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 fourth quarter 2012, which was paid on January 11, 2013 to shareholders of record as of January 4, 2013.
Mack-Cali's consolidated in-service portfolio was 87.2 percent leased at December 31, 2012, as compared to 87.5 percent leased at September 30, 2012.
For the quarter ended December 31, 2012, the Company executed 120 leases at its consolidated in-service portfolio totaling 1,147,218 square feet, consisting of 926,116 square feet of office space, 106,149 square feet of office/flex space and 114,953 square feet of industrial/warehouse space. Of these totals, 375,278 square feet were for new leases and 771,940 square feet were for lease renewals and other tenant retention transactions.
For the year ended December 31, 2012, the Company executed 546 leases at its consolidated in-service portfolio totaling 4,117,272 square feet, consisting of 2,926,587 square feet of office space, 998,529 square feet of office/flex space and 192,156 square feet of industrial/warehouse space. Of these totals, 1,377,898 square feet were for new leases and 2,739,374 square feet were for lease renewals and other tenant retention transactions.
Highlights of the quarter's leasing transactions include:
NORTHERN NEW JERSEY:
CENTRAL NEW JERSEY:
WESTCHESTER COUNTY, NEW YORK:
Included in the Company's Supplemental Operating and Financial Data for the fourth quarter 2012 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/4th.quarter.sp.12.pdf
The Company expressed comfort with net income and FFO per diluted share for the full year 2013, as follows:
Net income available to common shareholders
$0.32 - $0.52
Add: Real estate-related depreciation and amortization
Funds from operations available to common shareholders
$2.40 - $2.60
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 7, 2013 at 10:00 a.m. Eastern Time, which will be broadcast live via the Internet at:http://phoenix.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=96021&eventID=4900856
The live conference call is also accessible by calling (719) 325-2393 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 7, 2013 through February 14, 2013.
A replay of the call will also be accessible during the same time period by calling (719) 457-0820 and using the pass code 2794961.
Copies of Mack-Cali's Form 10-K and Supplemental Operating and Financial Data are available on Mack‑Cali's website, as follows:
2012 Form 10-K:http://www.mack-cali.com/file-uploads/10k.12.pdf
Fourth Quarter 2012 Supplemental Operating and Financial Data:http://www.mack-cali.com/file-uploads/4th.quarter.sp.12.pdf
In addition, these items are available upon request from:Mack-Cali Investor Relations Department343 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 noncontrolling interest of unitholders, computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from extraordinary items, sales of depreciable rental property, and impairments related to depreciable rental property, 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 as FFO per share excludes the effect of depreciation, gains (or losses) from sales of properties and impairments related to depreciable rental property (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 available to common shareholders 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 278 properties consisting of 271 office and office/flex properties totaling approximately 31.6 million square feet and seven multi-family rental properties containing over 2,000 residential units, all located in the Northeast. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of commercial and residential tenants.
Additional information on Mack-Cali Realty Corporation is available on the Company's website at 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," "potential," "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 CorporationConsolidated Statements of Operations(in thousands, except per share amounts) (unaudited)
Escalations and recoveries from tenants
Real estate services
Real estate taxes
Direct construction costs
General and administrative
Depreciation and amortization
Other (Expense) Income
Interest and other investment income
Equity in earnings of unconsolidated joint ventures
Loss from early extinguishment of debt
Total other (expense) income
Income from continuing operations
Income (loss) from discontinued operations
Realized gains (losses) and unrealized losses on disposition of rental property, net
Total discontinued operations, net
Net (loss) income
Noncontrolling interest in consolidated joint ventures
Noncontrolling interest in Operating Partnership
Noncontrolling interest in discontinued operations
Preferred stock dividends
Net (loss) income available to common shareholders
PER SHARE DATA:
Basic earnings per common share
Diluted earnings per common share
Basic weighted average shares outstanding
Diluted weighted average shares outstanding
Mack-Cali Realty Corporation
Statements of Funds from Operations
(in thousands, except per share/unit amounts) (unaudited)
Quarter EndedDecember 31,
Add (deduct): Noncontrolling interest in Operating Partnership
Real estate-related depreciation and amortization on continuing operations (1)
Real estate-related depreciation and amortization on discontinued operations
Discontinued operations: Realized (gains) losses and unrealized losses on disposition of rental property, net
Funds from operations available to common shareholders (2)
Diluted weighted average shares/units outstanding (3)
Funds from operations per share/unit – diluted
Dividends declared per common share
Dividend payout ratio:
Funds from operations-diluted
Non-incremental revenue generating capital expenditures:
Tenant improvements and leasing commissions (4)
Straight-line rent adjustments (5)
Amortization of (above)/below market lease intangibles, net
(1) Includes the Company's share from unconsolidated joint ventures of $2,560 and $1,064 for the quarters ended December 31, 2012 and 2011, respectively, and $5,524 and $4,278 for the years ended December 31, 2012 and 2011, respectively. Excludes non-real estate-related depreciation and amortization of $76 and $133 for the quarters ended December 31, 2012 and 2011, respectively, and $276 and $474 for the years ended December 31, 2012 and 2011, 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 (12,168 and 12,644 shares for the quarters ended December 31, 2012 and 2011, respectively, and 12,180 and 12,808 for the years ended December 31, 2012 and 2011, respectively), plus dilutive Common Stock Equivalents (i.e. stock options).
(4) Excludes expenditures for tenant spaces that have not been owned for at least a year or were vacant for more than a year.
(5) Includes the Company's share from unconsolidated joint ventures of $(13) and $45 for the quarters ended December 31, 2012 and 2011, respectively, and $37 and $199 for the years ended December 31, 2012 and 2011, respectively.
Statements of Funds from Operations Per Diluted Share
(amounts are per diluted share, except share count in thousands) (unaudited)
Year Ended December 31,
Add (deduct): Real estate-related depreciation and amortization on continuing operations (1)
Real estate –related depreciation and amortization on discontinued operations
Realized (gains) losses and unrealized losses on disposition of rental property, net
Noncontrolling interest/rounding adjustment
(1) Includes the Company's share from unconsolidated joint ventures of $0.02 and $0.01 for the quarters ended December 31, 2012 and 2011, respectively, and $0.05 and $0.04 for the years ended December 31, 2012 and 2011, respectively.
Consolidated Balance Sheets
(in thousands, except per share amounts)
Land and leasehold interests
Buildings and improvements
Furniture, fixtures and equipment
Less - accumulated deprec. & amort.
Rental property held for sale, net
Net investment in rental property
Cash and cash equivalents
Investments in unconsolidated joint ventures
Unbilled rents receivable, net
Deferred charges and other assets, net
Accounts receivable, net
Liabilities and Equity
Senior unsecured notes
Revolving credit facility
Mortgages, loans payable and other obligations
Dividends and distributions payable
Accounts payable, accrued expenses and other liabilities
Rents received in advance and security deposits
Accrued interest payable
Commitments and contingencies
Mack-Cali Realty Corporation stockholders' equity:
Common stock, $0.01 par value, 190,000,000 shares authorized,
87,536,292 and 87,799,479 shares outstanding
Additional paid-in capital
Dividends in excess of net earnings
Total Mack-Cali Realty Corporation stockholders' equity
Noncontrolling interests in subsidiaries:
Consolidated joint ventures
Total noncontrolling interests in subsidiaries
Total liabilities and equity
Executive Vice President
Vice President of Marketing
and Chief Financial Officer
Mack-Cali Realty Corporation
SOURCE Mack-Cali Realty Corporation