Mack-Cali Realty Corp. releases first quarter results

Real Estate Weekly, May 21, 2003

Mack-Cali Realty Corporation reported its results for the first quarter 2003. Highlights of the quarter include:

* FFO per diluted share of $0.92 and net income per diluted share of $0.52.

* Mack-Cali added to S&P's MidCap 400 Index.

* Sold office property in Texas for $5.8 million.

* Issued $25 million in eight-percent perpetual preferred stock.

* Exchanged $25 million in senior unsecured notes for notes with extended term and lower interest rate.

* Declared $0.63 per share quarterly dividend.

Funds from operations (FFO), after adjustment for straight-lining of rents, for the quarter ended March 31 amounted to $65.6 million, or $0.92 per share, versus $65.9 million, or $0.92 per share, for the quarter ended March 31, 2002. For the first quarter 2003, the company's dividend payout ratio on FFO was 68.6%, as compared to 67.3% for the same period last year.

Net income for the first quarter 2003 equaled $30 million, or $0.52 per share, versus $40.6 million, or $0.70 per share, for the same quarter last year, a per share decrease of 25.7%.

Cash available for distribution (CAD) for the first quarter 2003 equaled $55.6 million versus $57 million for the same quarter last year. For the first quarter 2003, the company's dividend payout ratio on CAD was 80.9%, as compared to 77.7% for the same period last year.

Total revenues for the first quarter 2003 increased 3.9% to $148.3 million as compared to $142.7 million for the same quarter last year.

All per share amounts presented above are on a diluted basis; basic per share information is included in the financial tables accompanying this press release.

The company had 57,592,309 shares of common stock, 7,811,830 common operating partnership units and 215,894 $1,000-face-value preferred operating partnership units outstanding as of quarter end. The outstanding preferred units are convertible into 6,230,707 common operating partnership units. Assuming conversion of all preferred units into common units, the Company had a total of 71,634,846 shares/common units Outstanding at March 31.

As of March 31, the company had total indebtedness of approximately $1.8 billion, with a weighted average annual interest rate of 6.87%. Mack-Cali had a total market capitalization of $4 billion and a debt-to-undepreciated assets ratio of 41%. at March 31. The company had an interest coverage ratio of 3.23 times for the quarter ended March 31.

Mitchell E. Hersh, chief executive officer, commented, "While the nation's economic climate continues, to be difficult, we're pleased that in the quarter we were able to sustain strong occupancies with over a million SF of leasing transactions, maintain a sound financial position, and make progress in exiting non-strategic markets."

The following is a summary of the company's recent activity:

At the close of trading on March 20, the company's stock was added to the Standard & Poor's MidCap 400 Index. The S&P MidCap 400 Index measures the performance of the mid-size company segment of the U.S. market, and is used by over 95% of U.S. managers and pension plan sponsors. More than $25 billion is indexed to the S&P MidCap 400.

In March, the company sold 1770 St. James Place, a 103,689-SF office building located in Houston, Harris County, Texas, for approximately $5.8 million. Additionally, in April, Stadium Gateway, a 273,194-SF class-A office building in Anaheim, California, was sold for approximately $52.5 million.

A joint venture of the Company and Highridge Partners held a 65% interest in the property.

In March, the company completed three transactions with the Teachers Insurance and Annuity Association (TIAA), as follows:

* Issued one million eight-percent cumulative perpetual preferred depository shares with a liquidation value of $25 per depository share for a total of $25 million. The shares are callable at par after five years.

* Repurchased $25 million in existing 7.18% senior unsecured notes, due to mature on Dec. 31 for $26.1 million.

* Exchanged $25 million in existing 7.18% senior unsecured notes, due to mature on Dec. 31 for $26.1 million in 5.82% senior unsecured notes that mature on March 15, 2013.