VERIS RESIDENTIAL, INC. EDISON, N.J., July 22, 2015 /PRNewswire/ -- Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the second quarter 2015.
Recent highlights include:
-- Reported funds from operations for the quarter of $0.46 per diluted
share;
-- Reported net income of $0.40 per diluted share;
-- Sold a 203,000 square-foot office property for $80 million;
-- Sold its interest in a multi-family joint venture property for $6.4
million; and
-- Declared $0.15 per share quarterly common stock dividend.
FINANCIAL HIGHLIGHTS
Funds from operations (FFO) for the quarter ended June 30, 2015 amounted to $46.5 million, or $0.46 per share, as compared to $50.3 million, or $0.50 per share, for the quarter ended June 30, 2014. For the six months ended June 30, 2015, FFO equaled $89.6 million, or $0.89 per share, as compared to $80.5 million, or $0.81 per share, for the same period last year. For the quarter compared to last year, the decrease in FFO per share results primarily from lower NOI as a result of assets sold of $0.05 and lower revenue from decreased percent leased of $0.04, partially offset by increased net real estate tax appeal proceeds of $0.02, decreased acquisition related general and administrative costs of $0.02 and decreased interest expense of $0.01.
Net income available to common shareholders for the quarter ended June 30, 2015 amounted to $35.4 million, or $0.40 per share, as compared to $51.1 million, or $0.58 per share, for the quarter ended June 30, 2014. For the six months ended June 30, 2015, net income to common shareholders equaled $32.9 million, or $0.37 per share, as compared to $35.8 million, or $0.40 per share, for the same period last year.
All per share amounts presented above are on a diluted basis.
Total revenues for the second quarter 2015 were $148.6 million, as compared to $160.3 million for the second quarter 2014. For the six months ended June 30, 2015, total revenues amounted to $302.3 million, as compared to $329.9 million for the same period last year.
The Company had 89,195,529 shares of common stock, and 11,012,069 common operating partnership units outstanding as of June 30, 2015. The Company had a total of 100,207,598 common shares/common units outstanding at June 30, 2015.
Mitchell E. Rudin, chief executive officer, commented "We have been diligently assessing our operations and the opportunities available to us. While we are in the early stages of repositioning and reconstituting Mack-Cali, we are excited by the opportunities we see in the office assets and in the multi-family platform, both of which should begin to provide meaningful value as we commit additional resources to appropriately positioning each of the platforms. In addition, we look forward to enhancing our disclosure and sharing more of our plans in the coming weeks and months. We recognize that our initiatives will take time; however, we will endeavor to make these changes, thoughtfully and efficiently with an eye towards maximizing value for our shareholders."
RECENT TRANSACTIONS
In June, the Company sold its commercial office property located at 14 Sylvan Way, in Mack-Cali Business Campus, Parsippany, New Jersey, for approximately $80.0 million. The three-story, 203,506-square-foot class A office building is fully leased to Wyndham.
Also in June, the Company sold its interest in The Highlands at Morristown Station in Morristown, New Jersey, realizing net proceeds of approximately $6.4 million. Mack-Cali had acquired its 25 percent subordinated interest in the 217-unit community in October 2012 as part of the Roseland acquisition for approximately $2 million. The sale represents an approximately 3.0-times multiple on the 2012 acquisition price. Mack-Cali's Roseland subsidiary will continue to manage the property.
Michael J. DeMarco, president and chief operating officer, commented "We have begun the long process of identifying properties for sale and the properties with upside potential over the next six to eight quarters. Our sole focus is to close completely the gap that exists between our stock price and our NAV."
OPERATING HIGHLIGHTS
Mack-Cali's consolidated commercial in-service portfolio was 82.3 percent leased at June 30, 2015, as compared to 84.3 percent leased at March 31, 2015.
For the quarter ended June 30, 2015, the Company executed 138 leases at its consolidated in-service commercial portfolio totaling 1,377,100 square feet, consisting of 970,472 square feet of office space, 391,328 square feet of office/flex space and 15,300 square feet of industrial/warehouse space. Of these totals, 214,577 square feet were for new leases and 1,162,523 square feet were for lease renewals and other tenant retention transactions.
BALANCE SHEET/CAPITAL MARKETS
As of June 30, 2015, the Company had total indebtedness of approximately $2.0 billion, with a weighted average annual interest rate of 5.67 percent. The Company had a total market capitalization of $3.9 billion and a debt-to-undepreciated assets ratio of 36.3 percent at June 30, 2015. The Company had an interest coverage ratio of 2.7 times for the quarter ended June 30, 2015 and an interest coverage ratio of 2.7 times for the six months ended June 30, 2015.
DIVIDENDS
In June, the Company's Board of Directors declared a cash dividend of $0.15 per common share (indicating an annual rate of $0.60 per common share) for the second quarter 2015, which was paid on July 14, 2015 to shareholders of record as of July 6, 2015.
GUIDANCE/OUTLOOK
The Company expressed comfort with net income and FFO per diluted share for the full year 2015, as follows:
Full Year
2015 Range
----------
Net income available to common
shareholders $0.22 - $0.32
Add: Real estate-related
depreciation and amortization 1.88
Deduct: Realized (gains) losses and
unrealized losses on disposition of
rental property, net (0.34)
Gain on sale of investment in
unconsolidated joint ventures (0.06)
------------------------------ -----
Funds from operations $1.70 - $1.80
===================== ===== === =====
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.
CONFERENCE CALL/SUPPLEMENTAL INFORMATION
An earnings conference call with management is scheduled for today, July 22, 2015 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=5196679
The live conference call is also accessible by calling (719) 325-2448 and requesting the Mack-Cali conference call.
The conference call will be rebroadcast on Mack-Cali's website at https://www.mack-cali.com/investors/events beginning at 2:00 p.m. Eastern Time on July 22, 2015 through July 29, 2015.
A replay of the call will also be accessible during the same time period by calling (719) 457-0820 and using the pass code 7712551.
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 2015 Form 10-Q:
https://www.mack-cali.com/media/765181/2ndquarter10q15.pdf
Second Quarter 2015 Supplemental Operating and Financial Data:
https://www.mack-cali.com/media/765184/2ndquartersp15.pdf
Second Quarter 2015 Supplemental Operating and Financial Data for Roseland Residential Platform:
https://www.mack-cali.com/media/765279/2ndquartersp15Roseland.pdf
In addition, these items are available upon request from:
Mack-Cali Investor Relations Department - Deidre Crockett
343 Thornall Street, Edison, New Jersey 08837-2206
(732) 590-1025
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 operates two highly successful platforms, the Mack-Cali office division and the Roseland apartment subsidiary. Roseland is a premier real estate development and management company with a highly acclaimed reputation for creating exceptional residential communities in some of the most desirable settings across the Northeast. From elegant townhomes and brownstones to upscale rentals and vibrant mixed-use communities, Roseland's extraordinary portfolio of multi-family real estate properties represents the very best in quality, design excellence, and luxury living.
Additional information on Mack-Cali Realty Corporation and the commercial real estate properties and multi-family residential communities available for lease can be found 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 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," "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 Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts) (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
REVENUES 2015 2014 2015 2014
-------- ---- ---- ---- ----
Base rents $121,246 $133,210 245,039 $267,261
Escalations and recoveries from
tenants 15,842 16,996 34,241 42,564
Real estate services 7,401 7,009 15,045 13,701
Parking income 2,850 2,236 5,392 4,350
Other income 1,228 849 2,565 2,020
------------ ----- --- ----- -----
Total revenues 148,567 160,300 302,282 329,896
-------------- ------- ------- ------- -------
EXPENSES
--------
Real estate taxes 21,410 23,375 43,862 47,726
Utilities 13,399 14,573 30,974 42,854
Operating services 25,844 27,840 54,072 57,062
Real estate services expenses 6,208 6,571 12,847 13,280
General and administrative 11,988 13,673 22,999 36,554
Depreciation and amortization 42,365 44,711 83,167 89,696
----------------------------- ------ ------ ------ ------
Total expenses 121,214 130,743 247,921 287,172
-------------- ------- ------- ------- -------
Operating income 27,353 29,557 54,361 42,724
OTHER (EXPENSE) INCOME
----------------------
Interest expense (26,773) (28,159) (53,988) (58,105)
Interest and other investment
income 291 922 558 1,308
Equity in earnings (loss) of
unconsolidated joint ventures (2,329) 443 (5,858) (792)
Realized gains (losses) on
disposition of rental property,
net 34,399 54,584 34,543 54,584
Gain on sale of investment in
unconsolidated joint ventures 6,448 - 6,448 -
------------------------------ ----- --- ----- ---
Total other (expense) income 12,036 27,790 (18,297) (3,005)
---------------------------- ------ ------ ------- ------
Net income 39,389 57,347 36,064 39,719
Noncontrolling interest in
consolidated joint ventures 373 290 863 612
Noncontrolling interest in
Operating Partnership (4,383) (6,514) (4,069) (4,506)
-------------------------- ------ ------ ------ ------
Net income available
to common
shareholders $35,379 51,123 32,858 $35,825
==================== ======= ====== ====== =======
Basic earnings per common share:
--------------------------------
Net income available
to common
shareholders $0.40 0.58 0.37 $0.40
==================== ===== ==== ==== =====
Diluted earnings per common
share:
---------------------------
Net income available
to common
shareholders $0.40 0.58 0.37 $0.40
==================== ===== ==== ==== =====
Basic weighted average shares
outstanding 89,244 88,691 89,218 88,491
----------------------------- ------ ------ ------ ------
Diluted weighted average shares
outstanding 100,314 100,023 100,313 99,964
------------------------------- ------- ------- ------- ------
Mack-Cali Realty Corporation
Statements of Funds from Operations
(in thousands, except per share/unit amounts) (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Net income available to
common shareholders $35,379 $51,123 $32,858 $35,825
Add (deduct): Noncontrolling
interest in Operating Partnership 4,383 6,514 4,069 4,506
Real estate-related depreciation
and amortization on continuing
operations (a) 47,634 47,291 93,665 94,739
Deduct: Realized (gains) losses
and unrealized losses on
disposition of rental property,
net (34,399) (54,584) (34,543) (54,584)
Gain on sale of investment in
unconsolidated joint ventures (6,448) - (6,448) -
------------------------------ ------ --- ------ ---
Funds from operations
available to common
shareholders (b) $46,549 $50,344 $89,601 $80,486
===================== ======= ======= ======= =======
Diluted weighted average shares/
units outstanding (c) 100,314 100,023 100,313 99,964
Funds from operations
per share/unit-
diluted $0.46 $0.50 $0.89 $0.81
Dividends declared per
common share $0.15 $0.15 $0.30 $0.45
Dividend payout ratio:
Funds from operations-diluted 32.33% 29.80% 33.59% 55.89%
Supplemental Information:
Non-incremental revenue
generating capital expenditures:
Building improvements $7,763 $2,784 $14,562 $5,253
Tenant improvements and
leasing commissions
(d) $6,188 $17,548 $11,409 $24,335
Straight-line rent
adjustments (e) $56 $1,110 $(83) $4,189
Amortization of
(above)/below market
lease intangibles, net
(f) $194 $314 $425 $582
Acquisition transaction costs (h) - $1,943 - $1,943
Net effect of unusual electricity
rate spikes (g) - - - $4,845
Executives severance costs (h) - - - $11,044
(a) Includes the Company's share from
unconsolidated joint ventures of
$5,512 and $2,658 for the three
months ended June 30, 2015 and 2014,
respectively, and $10,983 and $5,215
for the six months ended June 30,
2015 and 2014, respectively.
Excludes non-real estate-related
depreciation and amortization of
$243 and $78 for the three months
ended June 30, 2015 and 2014,
respectively, and $485 and $172 for
the six months ended June 30, 2015
and 2014, respectively.
(b) Funds from operations is calculated
in accordance with the definition of
FFO of the National Association of
Real Estate Investment Trusts
(NAREIT). See "Information About
FFO" in this release.
(c) Calculated based on weighted average
common shares outstanding, assuming
redemption of Operating Partnership
common units into common shares
(11,028 and 11,302 shares for the
three months ended June 30, 2015 and
2014, respectively, and 11,050 and
11,444 for the six months ended June
30, 2015 and 2014, respectively),
plus dilutive Common Stock
Equivalents (i.e. stock options).
(d) Excludes expenditures for tenant
spaces that have not been owned for
at least a year or were vacant for
more than a year.
(e) Includes the Company's share from
unconsolidated joint ventures of
$362 and $52 for the three months
ended June 30, 2015 and 2014,
respectively, and $538 and $0 for
the six months ended June 30, 2015
and 2014, respectively.
(f) Includes the Company's share from
unconsolidated joint ventures of
$114 and $124 for the three months
ended June 30, 2015 and 2014,
respectively, and $238 and $248 for
the six months ended June 30, 2015
and 2014, respectively.
(g) Approximately $10 million in
utilities expense, net of
approximately $5 million in
escalations and recoveries from
tenants related to such costs.
(h) Included in general and
administrative expense.
Mack-Cali Realty Corporation
Statements of Funds from Operations per Diluted Share
(amounts are per diluted share, except share counts in thousands) (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Net income available to
common shareholders $0.40 $0.58 $0.37 $0.40
Add: Real estate-related depreciation
and amortization on continuing
operations (a) 0.47 0.47 0.93 0.95
Deduct: Realized (gains) losses and
unrealized losses on disposition of
rental property, net (0.34) (0.55) (0.34) (0.55)
Gain on sale of investment in
unconsolidated joint ventures (0.06) - (0.06) -
Noncontrolling interest/rounding
adjustment (0.01) - (0.01) 0.01
-------------------------------- ----- --- ----- ----
Funds from operations (b) $0.46 $0.50 $0.89 $0.81
======================== ===== ===== ===== =====
Add: Net effect of unusual electricity
rate spikes - - - $0.05
Executives severance costs - - - 0.11
Noncontrolling interests/rounding
adjustment - - - (0.01)
--------------------------------- --- --- --- -----
FFO excluding certain items $0.46 $0.50 $0.89 $0.96
=========================== ===== ===== ===== =====
Diluted weighted average shares/units
outstanding (c) 100,314 100,023 100,313 99,964
------------------------------------- ------- ------- ------- ------
(a) Includes the Company's share from
unconsolidated joint ventures of
$0.05 and $0.03 for the three months
ended June 30, 2015 and 2014,
respectively, and $0.11 and $0.05
for the six months ended June 30,
2015 and 2014, respectively.
(b) Funds from operations is calculated
in accordance with the definition of
FFO of the National Association of
Real Estate Investment Trusts
(NAREIT). See "Information About
FFO" in this release.
(c) Calculated based on weighted average
common shares outstanding, assuming
redemption of Operating Partnership
common units into common shares
(11,028 and 11,302 shares for the
three months ended June 30, 2015 and
2014, respectively, and 11,050 and
11,444 for the six months ended June
30, 2015 and 2014, respectively),
plus dilutive Common Stock
Equivalents (i.e. stock options).
Mack-Cali Realty Corporation
Consolidated Balance Sheets
(in thousands, except per share amounts) (unaudited)
June 30, December 31,
Assets 2015 2014
------ ---- ----
Rental property
Land
and
leasehold
interests $749,359 $760,855
Buildings and
improvements 3,751,805 3,753,300
Tenant
improvements 414,166 431,969
Furniture,
fixtures and
equipment 12,867 12,055
------------- ------ ------
4,928,197 4,958,179
Less -
accumulated
depreciation and
amortization (1,448,791) (1,414,305)
----------------- ---------- ----------
Net investment in
rental property 3,479,406 3,543,874
Cash and cash
equivalents 19,813 29,549
Investments in
unconsolidated
joint ventures 284,507 247,468
Unbilled rents
receivable, net 117,777 123,885
Deferred charges,
goodwill and
other assets,
net 197,773 204,650
Restricted cash 42,052 34,245
Accounts
receivable, net
of allowance for
doubtful
accounts
of $1,871 and
$2,584 12,137 8,576
------------- ------ -----
Total
assets $4,153,465 $4,192,247
======= ========== ==========
Liabilities and
Equity
---------------
Senior
unsecured
notes $1,268,293 $1,267,744
Mortgages, loans
payable and
other
obligations 766,526 820,910
Dividends and
distributions
payable 15,582 15,528
Accounts payable,
accrued expenses
and other
liabilities 134,089 126,971
Rents received in
advance and
security
deposits 49,093 52,146
Accrued interest
payable 30,659 26,937
---------------- ------ ------
Total liabilities 2,264,242 2,310,236
----------------- --------- ---------
Commitments and
contingencies
Equity:
Mack-Cali Realty
Corporation
stockholders'
equity:
Common stock,
$0.01 par value,
190,000,000
shares
authorized,
89,195,529 and
89,076,578
shares
outstanding 892 891
Additional paid-
in capital 2,562,507 2,560,183
Dividends in
excess of net
earnings (930,167) (936,293)
-------------- -------- --------
Total Mack-Cali
Realty
Corporation
stockholders'
equity 1,633,232 1,624,781
--------------- --------- ---------
Noncontrolling
interests in
subsidiaries:
Operating
Partnership 201,639 202,173
Consolidated
joint ventures 54,352 55,057
--------------- ------ ------
Total
noncontrolling
interests in
subsidiaries 255,991 257,230
--------------- ------- -------
Total equity 1,889,223 1,882,011
------------ --------- ---------
Total
liabilities
and
equity $4,153,465 $4,192,247
============ ========== ==========
Contact: Michael J. DeMarco Anthony Krug Deidre Crockett
President and Chief Financial Officer Investor Relations
Chief Operating Officer (732) 590-1030 (732) 590-1025
(732) 590-1589
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mack-cali-realty-corporation-announces-second-quarter-results-300116923.html
SOURCE Mack-Cali Realty Corporation
