-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TzGhd0COAn4wv/PUd/41KgEWBt4BO6b+Y+R6vaTK1HlOx91agw1giumDHbl/NSr0 DMrG1DTHiYY3hmK7Lxbbng== 0000898822-06-001160.txt : 20061103 0000898822-06-001160.hdr.sgml : 20061103 20061103164850 ACCESSION NUMBER: 0000898822-06-001160 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061103 DATE AS OF CHANGE: 20061103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RECKSON ASSOCIATES REALTY CORP CENTRAL INDEX KEY: 0000930548 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 113233650 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13762 FILM NUMBER: 061187445 BUSINESS ADDRESS: STREET 1: 625 RECKSON PLAZA CITY: UNIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 516 506-6000 MAIL ADDRESS: STREET 1: 625 RECKSON PLAZA CITY: UNIONDALE STATE: NY ZIP: 11556 8-K 1 reckson8kcover.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): NOVEMBER 2, 2006 RECKSON ASSOCIATES REALTY CORP. AND RECKSON OPERATING PARTNERSHIP, L.P. (Exact Name of Registrant as Specified in its Charter) RECKSON ASSOCIATES REALTY RECKSON ASSOCIATES REALTY CORP. - CORP. - MARYLAND 11-3233650 RECKSON OPERATING PARTNERSHIP, RECKSON OPERATING PARTNERSHIP, L.P. - L.P. - DELAWARE 1-13762 11-3233647 (State or other jurisdiction (Commission File (IRS Employer Identification of incorporation) Number) Number) 625 RECKSON PLAZA UNIONDALE, NEW YORK 11556 (Address of principal executive offices) 516-506-6000 -------------------------------------------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On November 2, 2006, Reckson Associates Realty Corp. (the "Company") issued a press release announcing its consolidated financial results for the third quarter ended September 30, 2006. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" with the Securities and Exchange Commission for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any registration statement filed by the Company or Reckson Operating Partnership, L.P. under the Securities Act of 1933, as amended. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS EXHIBIT NO. DESCRIPTION 99.1 Reckson Associates Realty Corp. Earnings Press Release, dated November 2, 2006 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized. RECKSON ASSOCIATES REALTY CORP. By: /s/ Michael Maturo --------------------------------- Name: Michael Maturo Title: President, Chief Financial Officer and Treasurer RECKSON OPERATING PARTNERSHIP, L.P. By: Reckson Associates Realty Corp., its General Partner By: /s/ Michael Maturo --------------------------------- Name: Michael Maturo Title: President, Chief Financial Officer and Treasurer Date: November 3, 2006 EXHIBIT INDEX EXHIBIT DESCRIPTION NUMBER 99.1 Reckson Associates Realty Corp. Earnings Press Release, dated November 2, 2006 EX-99.1 2 pressrelease.txt EXHIBIT 99.1 PRESS RELEASE RECKSON ASSOCIATES REALTY CORP. 625 RECKSON PLAZA UNIONDALE, NY 11556 (516) 506-6000 (PHONE) (516) 506-6800 (FACSIMILE) CONTACT: SCOTT RECHLER, CEO MICHAEL MATURO, PRESIDENT AND CFO - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE RECKSON ANNOUNCES THIRD QUARTER 2006 RESULTS (UNIONDALE, NEW YORK, NOVEMBER 2, 2006) - RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) today reported diluted funds from operations (FFO) of $40.5 million, or $0.47 per share for the third quarter of 2006 including approximately $2.1 million, or $0.03 per share charge recognized in connection with Reckson's long-term incentive compensation plan. When adjusted for the charge the Company reported diluted FFO of $42.6 million, or $0.50 per share for the third quarter of 2006. This compares to diluted FFO of $51.7 million, or $0.61 per share for the third quarter of 2005. Reckson reported net income of $9.3 million, or diluted earnings per share (EPS) of $0.11 for the third quarter of 2006 including $2.1 million charge for the aforementioned compensation plan, as compared to $113.6 million, including $96.4 million related to gains on sales of depreciable real estate, or diluted EPS of $1.37 for the third quarter of 2005. The decrease in FFO includes dilution resulting from the timing of acquisition and disposition activity during 2005 and 2006. The majority of our acquisition activity occurred in early 2005 while we disposed of over $980 million of assets or interest in assets in the latter part of 2005 and early 2006. As a result of the competitive investment environment in the New York Tri-State markets during 2006, we were unable to effectively redeploy all of that capital. In addition, our third quarter 2005 included approximately $3.6 million of one-time transaction fees earned in connection with the origination and closing of Tranche I of the Australian LPT. Scott Rechler, Reckson's Chief Executive Officer, commented, "We weren't pleased but we weren't surprised that FFO dropped this quarter. These trends are consistent with some of the pressures that we have been seeing in the competitive market recently and consistent with the rationale for our pending transaction with SL Green." A reconciliation of net income to FFO is in the financial statements accompanying this press release. Net income is the GAAP measure the Company believes to be the most directly comparable to FFO. SUMMARY PORTFOLIO PERFORMANCE Occupancy Statistics: Same Property Overall QUARTER END QUARTER END 9/30/2006 6/30/2006 9/30/06(1) 6/30/06(1) 9/30/2005 --------- --------- ---------- ---------- --------- Total Occupancy: Stabilized Office 94.6% 94.0% 94.6% 94.0% 94.2% Stabilized Portfolio 93.5% 93.0% 93.5% 93.0% 93.0% Based on Pro Rata Ownership: Stabilized Office 93.9% 93.0% 93.9% 93.0% 93.0% Stabilized Portfolio 93.0% 92.2% 93.0% 91.8% 91.8% (1) Includes Reckson Platinum Mile portfolio acquired on December 29, 2005. Office same property net operating income (property operating revenues less property operating expenses) (NOI), on a pro rata ownership basis, before termination fees, for the third quarter of 2006 increased 2.3% (on a cash basis) and decreased (1.7)% (on a straight-line rent basis) compared to the third quarter of 2005. Excluding the effect of the 1185 Avenue of the Americas ground rent expense, office same property NOI, on a pro rata ownership basis, before termination fees, for the third quarter of 2006 increased 5.8% (on a cash basis) compared to the third quarter of 2005. Portfolio same property NOI, on a pro rata ownership basis, before termination fees, for the third quarter of 2006 increased 2.3% (on a cash basis) and decreased (1.6)% (on a straight-line rent basis) compared to the third quarter of 2005. Office same property NOI, on an overall basis, before termination fees, for the third quarter of 2006 increased 2.6% (on a cash basis) and decreased (1.2)% (on a straight-line rent basis) compared to the third quarter of 2005. Portfolio same property NOI, on an overall basis, before termination fees, for the third quarter of 2006 increased 2.6% (on a cash basis) and decreased (1.0)% (on a straight-line rent basis) compared to the third quarter of 2005. OTHER HIGHLIGHTS LEASING ACTIVITY - Executed 64 lease transactions encompassing 485,552 square feet, during the third quarter of 2006 - Rent performance on renewal and replacement space, on a consolidated basis, during the third quarter of 2006 increased 19.6% (on a straight-line rent basis) and 6.9% (on a cash basis) in the office portfolio - Office leasing transactions executed during the third quarter of 2006 resulted in a 45% renewal rate CORPORATE ACTIVITY - On August 3, 2006, Reckson and SL Green Realty Corp. (NYSE: SLG) announced that they entered into a definitive agreement pursuant to which SL Green will acquire Reckson. The transaction is expected to close in January 2007 and is subject to customary closing conditions, including approval by Reckson's stockholders. Reckson has called a special meeting of shareholders to be held at 10:30 a.m. local time on November 22, 2006 at 1350 Avenue of the Americas, New York, New York at which Reckson will seek shareholder approval of the merger agreement and the transactions contemplated thereby. Shareholders of record as of the close of business on October 13, 2006 will be entitled to vote at the special meeting. - Closed tranche III of the Australian listed property trust transaction with Reckson New York Property Trust (the Trust) (ASX: RNY), a Reckson-sponsored Australian listed property trust. In the tranche III closing, Reckson sold five suburban core plus properties containing approximately 623,000 square feet for approximately $111.8 million, including the assignment of approximately $63.3 million of mortgage debt. NON-GAAP FINANCIAL MEASURES FUNDS FROM OPERATIONS (FFO) The Company bel ieves that FFO is a widely recognized and appropriate measure of performance of an equity REIT. The Company presents FFO because it considers it an important supplemental measure of the Company's operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income. The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT). FFO is defined by NAREIT as net income or loss, excluding gains or losses from sales of depreciable properties plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs. FFO should not be considered as an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity. Since all companies and analysts do not calculate FFO in a similar fashion, the Company's calculation of FFO presented herein may not be comparable to similarly titled measures as reported by other companies. Reckson is a self-administered and self-managed real estate investment trust (REIT) specializing in the acquisition, leasing, financing, management and development of Class A office properties. Reckson is one of the largest publicly traded owners, managers and developers of Class A office properties in the New York Tri-State area and wholly owns, or has substantial interests in, a total of 101 properties comprised of approximately 20.2 million square feet. For additional information on Reckson, please visit the Company's web site at WWW.RECKSON.COM. FINANCIAL STATEMENTS ATTACHED The Supplemental Package outlining the Company's third quarter 2006 results will be available on the Company's web site at WWW.RECKSON.COM in the Investor Relations section, by e-mail to those on the Company's distribution list, as well as by mail or fax, upon request. To be added to the Company's e-mail distribution list or to receive a copy of the quarterly materials by mail or fax, please contact Susan McGuire, Senior Vice President Investor Relations, Reckson Associates Realty Corp., 625 Reckson Plaza, Uniondale, New York 11556, INVESTORRELATIONS@RECKSON.COM or (516) 506-6746. FORWARD-LOOKING STATEMENTS CERTAIN MATTERS DISCUSSED HEREIN, INCLUDING GUIDANCE CONCERNING THE COMPANY'S FUTURE PERFORMANCE, ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALTHOUGH THE COMPANY BELIEVES THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF RESULTS AND NO ASSURANCE CAN BE GIVEN THAT THE EXPECTED RESULTS WILL BE DELIVERED. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS, TRENDS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPECTED. AMONG THOSE RISKS, TRENDS AND UNCERTAINTIES ARE THE GENERAL ECONOMIC CLIMATE, INCLUDING THE CONDITIONS AFFECTING INDUSTRIES IN WHICH OUR PRINCIPAL TENANTS COMPETE; FINANCIAL CONDITION OF OUR TENANTS; CHANGES IN THE SUPPLY OF AND DEMAND FOR OFFICE PROPERTIES IN THE NEW YORK TRI-STATE AREA; CHANGES IN INTEREST RATE LEVELS; CHANGES IN THE COMPANY'S CREDIT RATINGS; CHANGES IN THE COMPANY'S COST OF AND ACCESS TO CAPITAL; DOWNTURNS IN RENTAL RATE LEVELS IN OUR MARKETS AND OUR ABILITY TO LEASE OR RE-LEASE SPACE IN A TIMELY MANNER AT CURRENT OR ANTICIPATED RENTAL RATE LEVELS; THE AVAILABILITY OF FINANCING TO US OR OUR TENANTS; CHANGES IN OPERATING COSTS, INCLUDING UTILITY, REAL ESTATE TAXES, SECURITY AND INSURANCE COSTS; REPAYMENT OF DEBT OWED TO THE COMPANY BY THIRD PARTIES; RISKS ASSOCIATED WITH JOINT VENTURES; LIABILITY FOR UNINSURED LOSSES OR ENVIRONMENTAL MATTERS; RISKS THAT THE COMPANY'S SHAREHOLDERS DO NOT APPROVE THE TRANSACTION WITH SL GREEN, THAT THE OTHER CLOSING CONDITIONS TO THE TRANSACTION WITH SL GREEN ARE NOT MET AND/OR THAT THE TRANSACTION WITH SL GREEN IS DELAYED OR NOT CONSUMMATED, AND OTHER RISKS ASSOCIATED WITH THE DEVELOPMENT AND ACQUISITION OF PROPERTIES, INCLUDING RISKS THAT DEVELOPMENT MAY NOT BE COMPLETED ON SCHEDULE, THAT THE TENANTS WILL NOT TAKE OCCUPANCY OR PAY RENT, OR THAT DEVELOPMENT OR OPERATING COSTS MAY BE GREATER THAN ANTICIPATED. FOR FURTHER INFORMATION ON FACTORS THAT COULD IMPACT RECKSON, REFERENCE IS MADE TO RECKSON'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. RECKSON UNDERTAKES NO RESPONSIBILITY TO UPDATE OR SUPPLEMENT INFORMATION CONTAINED IN THIS PRESS RELEASE. RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) September 30, December 31, 2006 2005 ------------- ------------ ASSETS: Commercial real estate properties, at cost: Land $ 430,822 $ 430,064 Buildings and improvements 2,931,330 2,823,020 Developments in progress: Land 126,861 123,761 Development costs 120,693 99,570 Furniture, fixtures, and equipment 13,583 12,738 ------------- ------------ 3,623,289 3,489,153 Less: accumulated depreciation (615,724) (532,152) Investments in real estate, net of accumulated ------------- ------------ depreciation 3,007,565 2,957,001 Properties and related assets held for sale, net of accumulated depreciation 68,249 194,297 Investments in real estate joint ventures 46,238 61,526 Investments in mortgage motes and notes receivable 201,128 174,612 Investments in affiliate loans and joint ventures 58,948 59,324 Cash and cash equivalents 16,372 17,468 Tenant receivables 17,831 20,196 Deferred rents receivable 152,376 138,990 Prepaid expenses and other assets 108,258 109,381 Deferred leasing and loan costs (net of accumulated amortization) 84,459 78,411 ------------- ------------ TOTAL ASSETS $3,761,424 $3,811,206 ------------- ------------ LIABILITIES: Mortgage notes payable $ 420,901 $ 541,382 Unsecured credit facility 205,000 419,000 Senior unsecured notes 1,255,059 980,085 Mortgage notes payable and other liabilities associated with properties held for sale 63,733 84,572 Accrued expenses and other liabilities 122,885 120,994 Deferred revenues and tenant security deposits 72,919 75,903 Dividends and distributions payable 36,583 36,398 ------------- ------------ TOTAL LIABILITIES 2,177,080 2,258,334 ------------- ------------ Minority partners' interests in consolidated partnerships 262,339 217,705 Preferred unit interest in the operating partnership 1,200 1,200 Limited partners' minority interest in the operating partnership 30,476 33,498 ------------- ------------ 294,015 252,403 ------------- ------------ Commitments and contingencies - - STOCKHOLDERS' EQUITY: Preferred Stock, $.01 par value, 25,000,000 shares authorized - - Common Stock, $.01 par value, 200,000,000 shares authorized 83,466,430 and 82,995,931 shares issued and outstanding, respectively 835 830 Accumulated other comprehensive income 2,102 1,819 Treasury Stock, 3,318,600 shares (68,492) (68,492) Retained earnings 36,823 56,868 Additional paid in capital 1,319,061 1,309,444 ------------- ------------ TOTAL STOCKHOLDERS' EQUITY 1,290,329 1,300,469 ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,761,424 $3,811,206 ============= ============ Total debt to market capitalization (a): 35.3% 40.1% ============= ============ - --------------- (a) Total debt includes the Company's pro rata share of consolidated and unconsolidated joint venture debt. RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ------------ Property Operating Revenues: Base rents $ 118,584 $ 122,693 $ 363,244 $ 353,151 Tenant escalations and reimbursements 22,310 21,055 60,613 56,157 ----------- ----------- ----------- ------------ Total property operating revenues 140,894 143,748 423,857 409,308 ----------- ----------- ----------- ------------ Property Operating Expenses: Operating expenses 41,002 35,687 109,807 96,806 Real estate taxes 25,525 22,653 73,929 65,493 ----------- ----------- ----------- ------------ Total property operating expenses 66,527 58,340 183,736 162,299 ----------- ----------- ----------- ------------ Net Operating Income 74,367 85,408 240,121 247,009 ----------- ----------- ----------- ------------ Gross Margin percentage 52.8% 59.4% 56.7% 60.3% ----------- ----------- ----------- ------------ Other Income: Gains on sale of real estate - 85,512 35,393 85,512 Interest income on mortgage notes and notes receivable 6,020 3,818 17,021 9,598 Interest, investment income and other 3,883 6,543 18,289 7,677 Equity in earnings of real estate joint ventures 678 248 2,889 482 ----------- ----------- ----------- ------------ Total other income 10,581 96,121 73,592 103,269 ----------- ----------- ----------- ------------ Other Expenses: Interest: Expense 27,531 31,982 82,736 82,807 Amortization of deferred financing costs 1,071 1,021 3,210 3,080 Depreciation and amortization 32,777 34,872 101,660 94,510 Marketing, general and administrative 9,551 8,136 28,508 24,372 Long-term incentive compensation expense 2,082 - 7,937 - ----------- ----------- ----------- ------------ Total other expenses 73,012 76,011 224,051 204,769 ----------- ----------- ----------- ------------ Income from continuing operations before minority interests and discontinued operations 11,936 105,518 89,662 145,509 Minority partners' interests in consolidated partnerships (3,120) (3,740) (11,066) (11,368) Limited partners' minority interest in the operating partnership (283) (3,298) (2,525) (4,615) ----------- ----------- ----------- ------------ Income before discontinued operations 8,533 98,480 76,071 129,526 Discontinued operations, net of minority interests: Gains on sales of real estate 741 13,615 10,027 13,790 Income from discontinued operations - 1,460 819 5,356 ----------- ----------- ----------- ------------ Net income $ 9,274 $ 113,555 $ 86,917 $ 148,672 =========== =========== =========== ============ Basic net income per weighted average common share: Common stock - income from continuing operations $ 0.10 $ 0.20 $ 0.50 $ 0.58 Gains on sales of real estate - 1.00 0.41 1.01 Discontinued operations 0.01 0.18 0.13 0.23 ----------- ----------- ----------- ------------ Basic net income per common share $ 0.11 $ 1.38 $ 1.04 $ 1.82 =========== =========== =========== ============ Basic weighted average common shares outstanding 83,353,000 82,545,000 83,212,000 81,848,000 =========== =========== =========== ============ Diluted net income per weighted average common share $ 0.11 $ 1.37 $ 1.04 $ 1.81 =========== =========== =========== ============ Diluted weighted average common shares outstanding 84,188,000 83,026,000 83,819,000 82,284,000 =========== =========== =========== ============ RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) FUNDS FROM OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ------------ Net income $ 9,274 $113,555 $ 86,917 $148,672 Add: Real estate depreciation and amortization 30,856 32,903 96,512 90,391 Minority partners' interests in consolidated partnerships 6,724 6,741 21,340 20,244 Limited partners' minority interest in the operating partnership 213 2,930 2,145 4,197 Less: Amounts distributable to minority partners in consolidated partnerships 6,534 5,600 19,739 16,804 Gains on sales of depreciable real estate - 98,861 44,669 98,861 ----------- ----------- ----------- ------------ Basic and Diluted Funds From Operations ("FFO") $ 40,533 $ 51,668 $142,506 $147,839 =========== =========== =========== ============ Diluted FFO calculations: Weighted average common shares outstanding 83,353 82,545 83,212 81,848 Weighted average units of limited partnership interest outstanding 1,881 2,083 1,971 2,623 ----------- ----------- ----------- ------------ Basic weighted average common shares and units outstanding 85,234 84,628 85,183 84,471 Adjustments for dilutive FFO weighted average shares and units outstanding: Common stock equivalents 835 481 607 436 Limited partners' preferred interest 41 41 41 41 ----------- ----------- ----------- ------------ Total diluted weighted average shares and units outstanding 86,110 85,150 85,831 84,948 =========== =========== =========== ============ Diluted FFO per weighted average share or unit $ 0.47 $ 0.61 $ 1.66 $ 1.74 Diluted weighted average dividends per share $ 0.42 $ 0.42 $ 1.27 $ 1.27 Diluted FFO payout ratio 90.2% 70.0% 76.8% 73.2% FFO Data excluding non recurring charges: Diluted FFO per weighted average share or unit $ 0.50 $ 0.61 $ 1.75 $ 1.74 Diluted weighted average dividends per share $ 0.42 $ 0.42 $ 1.27 $ 1.27 Diluted FFO payout ratio 85.6% 70.0% 72.7% 73.2% - -------------------------------------------------------------------------------- RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) CASH AVAILABLE FOR DISTRIBUTION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ------------ Basic Funds From Operations $ 40,533 $ 51,668 $142,506 $147,839 Less: Straight line rents and other FAS 141 non-cash rent adjustments 7,717 10,020 21,650 29,938 Committed non-incremental capitalized tenant improvements and leasing costs (a) 12,224 6,653 34,328 25,694 Actual non-incremental capitalized improvements 3,817 2,399 9,236 7,473 Add: Amortization of equity grants (b) 4,806 1,834 14,786 5,190 ----------- ----------- ----------- ------------ Basic and Diluted Cash Available for Distribution ("CAD") $ 21,581 $ 34,430 $ 92,078 $ 89,924 =========== =========== =========== ============ Diluted CAD calculations: Weighted average common shares outstanding 83,353 82,545 83,212 81,848 Weighted average units of limited partnership interest outstanding 1,881 2,083 1,971 2,623 ----------- ----------- ----------- ------------ Basic weighted average common shares and units outstanding 85,234 84,628 85,183 84,471 Adjustments for dilutive CAD weighted average shares and units outstanding: Common stock equivalents 835 481 607 436 Limited partners' preferred interest 41 41 41 41 ----------- ----------- ----------- ------------ Total diluted weighted average shares and units outstanding 86,110 85,150 85,831 84,948 =========== =========== =========== ============ Diluted CAD per weighted average share or unit $ 0.25 $ 0.40 $ 1.07 $ 1.06 Diluted weighted average dividends per share $ 0.42 $ 0.42 $ 1.27 $ 1.27 Diluted CAD payout ratio (a) 169.5% 105.1% 118.8% 120.4% - -------------------------------------------------------------------------------- (a) CAD for the quarterly period ended September 30, 2006 includes tenant improvements and leasing costs of $4.9 million and $1.2 million, respectively for a 141,000 square foot lease to Quest Diagnostics at 3 Giralda Farms, Madison, NJ. During the quarterly period ended June 30, 2006 we received a $10.0 million termination fee from Diatchi for these and other tenant related costs. (b) - Includes charges of $2.1 million and $7.9 million related to a long-term incentive compensation plan for the three & nine month periods ended September 30, 2006 -----END PRIVACY-ENHANCED MESSAGE-----