Lexington Realty Trust ("Lexington") (NYSE:LXP), a real estate
investment trust focused on single-tenant real estate investments,
today announced results for the fourth quarter ended December 31,
2014.
Fourth Quarter 2014 Highlights
- Generated Company Funds From Operations ("Company FFO")
of $66.3 million, or $0.27 per diluted common share.
- Acquired three properties for $70.4
million.
- Invested $24.5 million in on-going build-to-suit
projects and loan investments.
- Generated gross disposition proceeds of $167.2 million
from the sale of four office buildings.
- Received $32.8 million from maturing loan
investment.
- Retired $59.0 million of debt.
- Completed 1.9 million square feet of new leases and
lease extensions, raising cash and GAAP renewal rents by
4.6%.
T. Wilson Eglin, President and Chief Executive Officer of
Lexington, stated "The execution of our stated strategies in 2014
has resulted in a strong balance sheet with a large cash position,
which we believe positions us to capitalize on growth opportunities
in 2015. We are already committed to fund approximately $325
million in growth initiatives this year. We believe our pipeline
remains strong with additional opportunities for growth as the year
progresses. We also expect to continue to take advantage of
refinancing opportunities in 2015, to reduce interest expense and
extend our debt maturities."
FINANCIAL RESULTS
Revenues
For the quarter ended December 31, 2014, total gross revenues
were $108.0 million, compared with total gross revenues of $100.5
million for the quarter ended December 31, 2013. The increase is
primarily due to property acquisitions.
Company FFO
For the quarter ended December 31, 2014, Lexington generated
Company FFO of $66.3 million, or $0.27 per diluted share, compared
to Company FFO for the quarter ended December 31, 2013 of $65.7
million, or $0.28 per diluted share. The calculation of Company FFO
and a reconciliation to net income (loss) attributable to common
shareholders is included later in this press release.
Dividends/Distributions
Lexington declared a regular quarterly common share/unit
dividend/distribution for the quarter ended December 31, 2014 of
$0.17 per common share/unit, which was paid on January 15, 2015 to
common shareholders/unitholders of record as of December 31, 2014,
and a dividend of $0.8125 per share on its Series C Cumulative
Convertible Preferred Stock ("Series C Preferred Shares"), which
was paid on February 17, 2015 to Series C Preferred Shareholders of
record as of January 30, 2015.
Net Income (Loss) Attributable to Common
Shareholders
For the quarter ended December 31, 2014, net income attributable
to common shareholders was $35.7 million, or $0.15 per diluted
share, compared with net loss attributable to common shareholders
for the quarter ended December 31, 2013 of $(8.9) million, or
$(0.04) per diluted share.
OPERATING ACTIVITIES
Investment
Activity |
|
Acquisitions |
|
Tenant/Guarantor |
Location |
Property
Type |
Initial Basis
($000) |
Initial Annualized Cash Rent
($000) |
Initial Cash
Yield |
Estimated
GAAP Yield |
Lease Term
(Yrs) |
ZE-45 Ground Tenant LLC |
New York, NY |
Land |
$ 30,426 |
$ 1,500 |
4.9% |
15.2% |
99 |
HealthSouth Corp. |
Vineland, NJ |
Rehab Hospital |
19,100 |
1,113 |
5.8% |
5.8%(1) |
28 |
International Automotive Components Group
North America |
Anniston, AL |
Industrial |
20,907 |
1,572 |
7.5% |
8.3% |
15 |
|
|
|
$ 70,433 |
$ 4,185 |
5.9% |
10.6% |
|
1. Lease contains annual
CPI increases. |
|
|
|
|
|
|
|
On-going Build-to-Suit
Projects |
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
Sq.
Ft. |
Property
Type |
Lease Term
(Years) |
Maximum
Commitment/Estimated Completion Cost ($000) |
GAAP Investment Balance as of
12/31/2014 ($000) |
Estimated
Completion Date |
Oak Creek, WI |
164,000 |
Industrial |
20 |
$ 22,609 |
$ 11,860 |
2Q 15 |
Thomson, GA |
208,000 |
Industrial |
15 |
10,245 |
3,428 |
2Q 15 |
Richmond, VA |
330,000 |
Office |
15 |
110,137 |
62,225 |
3Q 15 |
Lake Jackson, TX |
664,000 |
Office/R&D |
20 |
166,164 |
28,225 |
4Q 16 |
Houston, TX(1) |
274,000 |
Private School |
20 |
86,491 |
11,795 |
3Q 16 |
|
1,640,000 |
|
|
$ 395,646 |
$ 117,533 |
|
1. Lexington has a 25%
interest as of December 31, 2014. Lexington may provide
construction financing up to $56.7 million to the joint
venture. |
|
|
|
|
|
|
|
Forward Commitments |
|
|
|
|
|
|
Location |
Property
Type |
Estimated Acquisition Cost
($000) |
Estimated Completion
Date |
Estimated Initial Cash
Yield |
Estimated GAAP
Yield |
Lease Term
(Years) |
Auburn Hills, MI |
Office |
$ 40,025 |
1Q 15 |
7.9% |
9.0% |
14 |
Richland, WA |
Industrial |
155,000 |
4Q 15 |
7.1% |
8.6% |
20 |
|
|
$ 195,025 |
|
7.3% |
8.7% |
|
Capital
Recycling |
|
|
|
|
|
|
Property
Dispositions |
|
Tenant |
Location |
Property
Type |
Gross Disposition Price
($000) |
Annualized NOI
($000) |
Month of
Disposition |
Bank of America, National Association |
Brea, CA |
Office |
$ 110,000 |
$ 8,096 |
Nov-14 |
Vacant(1) |
Chicago, IL |
Office |
34,150 |
— |
Nov-14 |
Canal Insurance Company |
Greenville, SC |
Office |
11,550 |
991 |
Dec-14 |
Vacant(2) |
Houston, TX |
Office |
11,486 |
— |
Dec-14 |
|
|
|
$ 167,186 |
$ 9,087 |
|
1. $29.9 million secured
debt satisfied at closing. |
2. Purchaser assumed an
$11.5 million secured debt. |
Loan Investments
Lexington collected $32.8 million in full satisfaction of the
Norwalk, Connecticut loan investment.
Balance Sheet
During the fourth quarter of 2014, Lexington satisfied $50.5
million of secured debt, which had a weighted-average interest rate
of 5.5%, including the $41.4 million of aggregate secured debt
encumbering properties which were disposed.
In December 2014, holders converted approximately $8.6 million
original principal amount 6.00% Convertible Guaranteed Notes due
2030 ("6.00% Notes") for 1,280,439 common shares and a cash payment
of $171 thousand plus accrued interest, reducing the outstanding
balance of this note issuance to $16.2 million at December 31,
2014. All common shares that are issuable upon conversion of the
6.00% Notes are treated as outstanding for diluted Company FFO
calculations.
During the fourth quarter of 2014, Lexington locked rate on the
following secured loans:
|
|
|
|
|
|
Tenant/Guarantor |
Location |
Property
Type |
Amount ($000) |
Fixed
Rate |
Term
(approx.) |
ZE-45 Ground Tenant LLC(1) |
New York, NY |
Land |
$ 29,193 |
4.1% |
10 years |
Federal Express Corporation(2) |
Long Island City, NY |
Industrial |
51,650 |
3.5% |
13 years |
|
|
|
$ 80,843 |
3.7% |
|
1. Loan closed in first
quarter of 2015. |
2. No assurances can be
given that the loan will be funded on these terms or at all. |
|
Leasing |
During the fourth quarter of
2014, Lexington executed the following new and extended
leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
LEASE EXTENSIONS |
|
|
|
|
|
|
|
|
|
|
|
Location |
|
Prior Term |
Lease Expiration
Date |
Sq. Ft. |
|
|
|
|
|
|
|
Office/Multi-Tenant |
|
|
|
|
|
|
|
|
|
|
1 |
Little Rock |
AR |
10/2015 |
10/2020 |
36,311 |
2 |
Pine Bluff |
AR |
10/2015 |
10/2017 |
27,189 |
3 |
Phoenix |
AZ |
11/2016 |
11/2021 |
6,982 |
3 |
Total office lease
extensions |
|
|
|
70,482 |
|
|
|
|
|
|
|
Industrial/Multi-Tenant |
|
|
|
|
|
|
|
|
|
|
1 |
Moody |
AL |
12/2017 |
12/2019 |
595,346 |
2 |
Laurens |
SC |
01/2017 |
01/2020 |
1,164,000 |
3 |
Antioch |
TN |
12/2014 |
12/2015 |
60,000 |
3 |
Total industrial lease
extensions |
|
|
|
1,819,346 |
|
|
|
|
|
|
6 |
Total lease
extensions |
|
|
|
1,889,828 |
|
|
|
|
|
|
|
NEW LEASES |
|
|
|
|
|
|
|
|
|
|
|
Location |
|
|
Lease Expiration
Date |
Sq. Ft. |
|
|
|
|
|
|
2 |
Palm Beach Gardens |
FL |
|
2016-2022 |
20,067 |
3 |
Various |
|
|
2015-2025 |
5,067 |
5 |
Total new leases |
|
|
|
25,134 |
|
|
|
|
|
|
11 |
TOTAL NEW AND EXTENDED
LEASES |
|
|
|
1,914,962 |
2015 EARNINGS GUIDANCE
Lexington estimates that its Company FFO guidance will be an
expected range of $1.00 to $1.05 per diluted share for the year
ended December 31, 2015. This guidance is forward looking, excludes
the impact of certain items and is based on current
expectations.
FOURTH QUARTER 2014 CONFERENCE
CALL
Lexington will host a conference call today, Thursday, February
19, 2015, at 11:00 a.m. Eastern Time, to discuss its results for
the quarter ended December 31, 2014. Interested parties may
participate in this conference call by dialing 877-407-0789 or
201-689-8562. A replay of the call will be available through March
5, 2015, at 877-870-5176 or 858-384-5517, pin: 13599968. A live
webcast of the conference call will be available at www.lxp.com
within the Investors section.
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that
owns a diversified portfolio of equity and debt interests in
single-tenant commercial properties and land. Lexington seeks to
expand its portfolio through acquisitions, sale-leaseback
transactions, build-to-suit arrangements and other transactions. A
majority of these properties and all land interests are subject to
net or similar leases, where the tenant bears all or substantially
all of the operating costs, including cost increases, for real
estate taxes, utilities, insurance and ordinary repairs. Lexington
also provides investment advisory and asset management services to
investors in the single-tenant area. Lexington common shares are
traded on the New York Stock Exchange under the symbol
"LXP". Additional information about Lexington is available
on-line at www.lxp.com or by contacting Lexington Realty Trust, One
Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention:
Investor Relations.
This release contains certain forward-looking statements which
involve known and unknown risks, uncertainties or other factors not
under Lexington's control which may cause actual results,
performance or achievements of Lexington to be materially different
from the results, performance, or other expectations implied by
these forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to,
those discussed under the headings "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Risk Factors" in Lexington's periodic reports filed with the
Securities and Exchange Commission, including risks related to: (1)
the authorization by Lexington's Board of Trustees of future
dividend declarations, including those necessary to achieve an
annualized dividend level of $0.68 per common share/unit, (2)
Lexington's ability to achieve its estimate of Company FFO for the
year ending December 31, 2015, (3) the successful consummation of
any lease, acquisition, build-to-suit, financing or other
transaction, (4) the failure to continue to qualify as a real
estate investment trust, (5) changes in general business and
economic conditions, including the impact of any legislation, (6)
competition, (7) increases in real estate construction costs, (8)
changes in interest rates, (9) changes in accessibility of debt and
equity capital markets, and (10) future impairment charges. Copies
of the periodic reports Lexington files with the Securities and
Exchange Commission are available on Lexington's web site at
www.lxp.com. Forward-looking statements, which are based on certain
assumptions and describe Lexington's future plans, strategies and
expectations, are generally identifiable by use of the words
"believes," "expects," "intends," "anticipates," "estimates,"
"projects", "may," "plans," "predicts," "will," "will likely
result," "is optimistic," "goal," "objective" or similar
expressions. Except as required by law, Lexington undertakes no
obligation to publicly release the results of any revisions to
those forward-looking statements which may be made to reflect
events or circumstances after the occurrence of unanticipated
events. Accordingly, there is no assurance that Lexington's
expectations will be realized.
References to Lexington refer to Lexington Realty Trust and its
consolidated subsidiaries. All interests in properties and loans
are held through special purpose entities, which are separate and
distinct legal entities, some of which are consolidated for
financial statement purposes and/or disregarded for income tax
purposes.
LEXINGTON REALTY TRUST
AND CONSOLIDATED SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Unaudited and in thousands,
except share and per share data) |
|
|
|
|
|
|
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2014 |
2013 |
2014 |
2013 |
Gross revenues: |
|
|
|
|
Rental |
$ 99,610 |
$ 93,403 |
$ 392,480 |
$ 335,721 |
Advisory and incentive
fees |
171 |
429 |
554 |
855 |
Tenant reimbursements |
8,173 |
6,626 |
31,338 |
25,334 |
Total gross revenues |
107,954 |
100,458 |
424,372 |
361,910 |
Expense applicable to revenues: |
|
|
|
|
Depreciation and
amortization |
(40,105) |
(40,138) |
(154,837) |
(157,901) |
Property operating |
(17,039) |
(14,409) |
(63,673) |
(54,757) |
General and administrative |
(7,221) |
(8,696) |
(28,255) |
(28,426) |
Non-operating income |
3,965 |
2,828 |
13,951 |
8,305 |
Interest and amortization expense |
(23,847) |
(22,068) |
(97,303) |
(85,892) |
Gain on sales of financial assets |
855 |
— |
855 |
— |
Debt satisfaction charges, net |
(1,505) |
— |
(9,452) |
(25,347) |
Impairment charges and loan loss |
(18,469) |
(33,166) |
(37,333) |
(35,579) |
Income (loss) before provision for income
taxes, equity in earnings (losses) of non-consolidated entities and
discontinued operations |
4,588 |
(15,191) |
48,325 |
(17,687) |
Provision for income taxes |
(162) |
(236) |
(1,109) |
(3,177) |
Equity in earnings (losses) of
non-consolidated entities |
380 |
240 |
626 |
(157) |
Income (loss) from continuing
operations |
4,806 |
(15,187) |
47,842 |
(21,021) |
Discontinued operations: |
|
|
|
|
Income from discontinued
operations |
651 |
1,840 |
6,252 |
6,244 |
Benefit (provision) for income
taxes |
(8) |
192 |
(59) |
(1,817) |
Debt satisfaction gains
(charges), net |
(14) |
— |
(312) |
8,905 |
Gains on sales of
properties |
35,455 |
9,537 |
57,507 |
24,472 |
Impairment charges |
(2,705) |
(3,383) |
(13,767) |
(12,920) |
Total discontinued
operations |
33,379 |
8,186 |
49,621 |
24,884 |
Net income (loss) |
38,185 |
(7,001) |
97,463 |
3,863 |
Less net income attributable to
noncontrolling interests |
(822) |
(176) |
(4,359) |
(2,233) |
Net income (loss) attributable to Lexington
Realty Trust shareholders |
37,363 |
(7,177) |
93,104 |
1,630 |
Dividends attributable to preferred shares –
Series C |
(1,572) |
(1,572) |
(6,290) |
(6,290) |
Dividends attributable to preferred shares –
Series D |
— |
— |
— |
(3,543) |
Allocation to participating securities |
(91) |
(174) |
(490) |
(656) |
Deemed dividend – Series D |
— |
— |
— |
(5,230) |
Net income (loss) attributable to common
shareholders |
$ 35,700 |
$ (8,923) |
$ 86,324 |
$ (14,089) |
Income (loss) per common share – basic: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.01 |
$ (0.08) |
$ 0.17 |
$ (0.18) |
Income from discontinued
operations |
0.14 |
0.04 |
0.21 |
0.11 |
Net income (loss) attributable
to common shareholders |
$ 0.15 |
$ (0.04) |
$ 0.38 |
$ (0.07) |
Weighted-average common shares outstanding –
basic |
230,830,905 |
224,260,756 |
228,966,253 |
209,797,238 |
Income (loss) per common share –
diluted: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.01 |
$ (0.08) |
$ 0.17 |
$ (0.18) |
Income from discontinued
operations |
0.14 |
0.04 |
0.21 |
0.11 |
Net income (loss) attributable
to common shareholders |
$ 0.15 |
$ (0.04) |
$ 0.38 |
$ (0.07) |
Weighted-average common shares outstanding –
diluted |
231,239,828 |
224,260,756 |
229,436,708 |
209,797,238 |
Amounts attributable to common
shareholders: |
|
|
|
|
Income (loss) from continuing
operations |
$ 2,322 |
$ (17,198) |
$ 37,652 |
$ (38,506) |
Income from discontinued
operations |
33,378 |
8,275 |
48,672 |
24,417 |
Net income (loss) attributable
to common shareholders |
$ 35,700 |
$ (8,923) |
$ 86,324 |
$ (14,089) |
|
|
LEXINGTON REALTY TRUST
AND CONSOLIDATED SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
As of December
31, |
(Unaudited and in thousands,
except share and per share data) |
|
|
|
|
2014 |
2013 |
Assets: |
|
|
Real estate, at cost |
$ 3,671,560 |
$ 3,812,294 |
Real estate - intangible assets |
705,566 |
762,157 |
Investments in real estate under
construction |
106,238 |
74,350 |
|
4,483,364 |
4,648,801 |
Less: accumulated depreciation and
amortization |
1,196,114 |
1,223,381 |
Real estate, net |
3,287,250 |
3,425,420 |
Assets held for sale |
3,379 |
— |
Cash and cash equivalents |
191,077 |
77,261 |
Restricted cash |
17,379 |
19,953 |
Investment in and advances to
non-consolidated entities |
19,402 |
18,442 |
Deferred expenses, net |
65,860 |
66,827 |
Loans receivable, net |
105,635 |
99,443 |
Rent receivable – current |
6,311 |
10,087 |
Rent receivable – deferred |
61,372 |
19,473 |
Other assets |
20,229 |
35,375 |
Total assets |
$ 3,777,894 |
$ 3,772,281 |
|
|
|
Liabilities and Equity: |
|
|
Liabilities: |
|
|
Mortgages and notes payable |
$ 945,216 |
$ 1,197,489 |
Credit facility borrowings |
— |
48,000 |
Term loans payable |
505,000 |
406,000 |
Senior notes payable |
497,675 |
247,707 |
Convertible notes payable |
15,664 |
27,491 |
Trust preferred securities |
129,120 |
129,120 |
Dividends payable |
42,864 |
40,018 |
Liabilities held for sale |
2,843 |
— |
Accounts payable and other liabilities |
37,740 |
39,642 |
Accrued interest payable |
8,301 |
9,627 |
Deferred revenue - including below market
leases, net |
68,215 |
69,667 |
Prepaid rent |
16,336 |
18,037 |
Total liabilities |
2,268,974 |
2,232,798 |
|
|
|
Commitments and contingencies |
|
|
Equity: |
|
|
Preferred shares, par value $0.0001 per
share; authorized 100,000,000 shares: |
|
|
Series C Cumulative Convertible
Preferred, liquidation preference $96,770; 1,935,400 shares issued
and outstanding |
94,016 |
94,016 |
Common shares, par value $0.0001 per share;
authorized 400,000,000 shares, 233,278,037 and 228,663,022 shares
issued and outstanding in 2014 and 2013, respectively |
23 |
23 |
Additional paid-in-capital |
2,763,374 |
2,717,787 |
Accumulated distributions in excess of net
income |
(1,372,051) |
(1,300,527) |
Accumulated other comprehensive income |
404 |
4,439 |
Total shareholders' equity |
1,485,766 |
1,515,738 |
Noncontrolling interests |
23,154 |
23,745 |
Total equity |
1,508,920 |
1,539,483 |
Total liabilities and equity |
$ 3,777,894 |
$ 3,772,281 |
|
LEXINGTON REALTY TRUST
AND CONSOLIDATED SUBSIDIARIES |
EARNINGS PER
SHARE |
(Unaudited and in thousands,
except share and per share data) |
|
|
|
|
|
|
Three Months Ended |
Twelve Months Ended |
|
December 31, |
December 31, |
|
2014 |
2013 |
2014 |
2013 |
EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
Income (loss) from continuing operations
attributable to common shareholders |
$ 2,322 |
$ (17,198) |
$ 37,652 |
$ (38,506) |
Income from discontinued operations
attributable to common shareholders |
33,378 |
8,275 |
48,672 |
24,417 |
Net income (loss) attributable to common
shareholders |
$ 35,700 |
$ (8,923) |
$ 86,324 |
$ (14,089) |
|
|
|
|
|
Weighted-average number of common shares
outstanding |
230,830,905 |
224,260,756 |
228,966,253 |
209,797,238 |
|
|
|
|
|
Income (loss) per common share: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.01 |
$ (0.08) |
$ 0.17 |
$ (0.18) |
Income from discontinued
operations |
0.14 |
0.04 |
0.21 |
0.11 |
Net income (loss) attributable
to common shareholders |
$ 0.15 |
$ (0.04) |
$ 0.38 |
$ (0.07) |
|
|
|
|
|
Diluted: |
|
|
|
|
Income (loss) from continuing operations
attributable to common shareholders - basic |
$ 2,322 |
$ (17,198) |
$ 37,652 |
$ (38,506) |
Impact of assumed conversions: |
|
|
|
|
Share options |
— |
— |
— |
— |
Income (loss) from continuing operations
attributable to common shareholders |
2,322 |
(17,198) |
37,652 |
(38,506) |
Income from discontinued operations
attributable to common shareholders - basic |
33,378 |
8,275 |
48,672 |
24,417 |
Impact of assumed conversions: |
|
|
|
|
Share options |
— |
— |
— |
— |
Income from discontinued operations
attributable to common shareholders |
33,378 |
8,275 |
48,672 |
24,417 |
Net income (loss) attributable to common
shareholders |
$ 35,700 |
$ (8,923) |
$ 86,324 |
$ (14,089) |
|
|
|
|
|
Weighted-average common shares outstanding -
basic |
230,830,905 |
224,260,756 |
228,966,253 |
209,797,238 |
Effect of dilutive securities: |
|
|
|
|
Share options |
408,923 |
— |
470,455 |
— |
Weighted-average common shares
outstanding |
231,239,828 |
224,260,756 |
229,436,708 |
209,797,238 |
|
|
|
|
|
Income (loss) per common share: |
|
|
|
|
Income (loss) from continuing
operations |
$ 0.01 |
$ (0.08) |
$ 0.17 |
$ (0.18) |
Income from discontinued
operations |
0.14 |
0.04 |
0.21 |
0.11 |
Net income (loss) attributable
to common shareholders |
$ 0.15 |
$ (0.04) |
$ 0.38 |
$ (0.07) |
|
LEXINGTON REALTY TRUST
AND CONSOLIDATED SUBSIDIARIES |
COMPANY FUNDS FROM
OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION |
(Unaudited and in thousands,
except share and per share data) |
|
|
|
|
|
|
Three Months Ended |
Twelve Months Ended |
|
December 31, |
December 31, |
|
2014 |
2013 |
2014 |
2013 |
FUNDS FROM OPERATIONS:
(1) |
|
|
|
|
Basic and Diluted: |
|
|
|
|
Net income (loss) attributable to common
shareholders |
$ 35,700 |
$ (8,923) |
$ 86,324 |
$ (14,089) |
Adjustments: |
|
|
|
|
Depreciation and
amortization |
39,546 |
43,680 |
157,537 |
175,023 |
Impairment charges - real
estate, including nonconsolidated joint venture real estate |
18,673 |
22,610 |
49,529 |
35,485 |
Noncontrolling interests - OP
units |
434 |
(129) |
2,990 |
1,157 |
Amortization of leasing
commissions |
1,426 |
1,438 |
5,932 |
5,562 |
Joint venture and
noncontrolling interest adjustment |
335 |
589 |
2,068 |
2,264 |
Gains on sales of properties,
net of tax, including nonconsolidated joint venture real
estate |
(36,374) |
(10,430) |
(58,426) |
(21,755) |
FFO available to common shareholders
and unitholders - basic |
59,740 |
48,835 |
245,954 |
183,647 |
Preferred dividends |
1,572 |
1,572 |
6,290 |
11,520 |
Interest and amortization on
6.00% Convertible Notes |
472 |
579 |
2,090 |
3,113 |
Amount allocated to
participating securities |
91 |
174 |
490 |
656 |
FFO available to common shareholders
and unitholders - diluted |
61,875 |
51,160 |
254,824 |
198,936 |
Debt satisfaction charges,
net |
1,519 |
— |
9,764 |
16,442 |
Impairment loss - loan
receivable |
2,500 |
13,939 |
2,500 |
13,939 |
Other / Transaction costs |
368 |
565 |
1,882 |
795 |
Company FFO available to common
shareholders and unitholders - diluted |
66,262 |
65,664 |
268,970 |
230,112 |
|
|
|
|
|
FUNDS AVAILABLE FOR DISTRIBUTION:
(2) |
|
|
|
|
Adjustments: |
|
|
|
|
Straight-line rents |
(16,170) |
(14,795) |
(47,227) |
(24,076) |
Lease incentives |
386 |
313 |
1,490 |
1,345 |
Amortization of below/above
market leases |
233 |
73 |
1,136 |
(63) |
Non-cash interest, net |
1,294 |
(1,019) |
(2,892) |
(1,551) |
Non-cash charges, net |
2,141 |
1,973 |
8,704 |
7,574 |
Tenant improvements |
(5,435) |
(8,654) |
(11,395) |
(39,244) |
Lease costs |
(2,070) |
(2,103) |
(10,484) |
(12,060) |
Company Funds Available for
Distribution |
$ 46,641 |
$ 41,452 |
$ 208,302 |
$ 162,037 |
|
|
|
|
|
Per Common Share and Unit
Amounts |
|
|
|
|
Basic: |
|
|
|
|
FFO |
$ 0.25 |
$ 0.21 |
$ 1.06 |
$ 0.86 |
|
|
|
|
|
Diluted: |
|
|
|
|
FFO |
$ 0.25 |
$ 0.21 |
$ 1.05 |
$ 0.88 |
Company FFO |
$ 0.27 |
$ 0.28 |
$ 1.11 |
$ 1.02 |
Company FAD |
$ 0.19 |
$ 0.17 |
$ 0.86 |
$ 0.72 |
|
|
|
|
|
Weighted-Average Common Shares: |
|
|
|
|
Basic(1) |
234,688,921 |
228,352,995 |
232,838,280 |
213,944,169 |
Diluted |
243,398,807 |
238,064,088 |
241,967,017 |
225,444,512 |
(1) Includes OP Units. |
|
|
|
|
1 Lexington believes that Funds from Operations ("FFO"), which
is not a measure under generally accepted accounting principles
("GAAP"), is a widely recognized and appropriate measure of the
performance of an equity REIT. Lexington believes FFO 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 National Association of Real Estate Investment Trusts, Inc.
("NAREIT") defines FFO as "net income (or loss) computed in
accordance with GAAP, excluding gains (or losses) from sales of
property, plus real estate depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures."
NAREIT clarified its computation of FFO to exclude impairment
charges on depreciable real estate owned directly or indirectly.
FFO does not represent cash generated from operating activities in
accordance with GAAP and is not indicative of cash available to
fund cash needs.
Lexington presents FFO available to common shareholders and
unitholders - basic. Lexington also presents FFO available to
common shareholders and unitholders - diluted on a company-wide
basis as if all securities that are convertible, at the holder's
option, into Lexington's common shares, are converted. Lexington
also presents Company FFO which adjusts FFO for certain items which
Management believes are not indicative of the operating results of
its real estate portfolio. Management believes this is an
appropriate presentation as it is frequently requested by security
analysts, investors and other interested parties. Since others do
not calculate funds from operations in a similar fashion, Company
FFO may not be comparable to similarly titled measures as reported
by others. Company FFO should not be considered as an alternative
to net income as an indicator of our operating performance or as an
alternative to cash flow as a measure of liquidity.
2 Company Funds Available for Distribution ("FAD") is
calculated by making adjustments to Company FFO for (1)
straight-line rent revenue, (2) lease incentive amortization, (3)
amortization of above/below market leases, (4) cash paid for tenant
improvements, (5) cash paid for lease costs, (6) non-cash interest,
net and (7) non-cash charges, net. Although FAD may not be
comparable to that of other REITs, Lexington believes it provides a
meaningful indication of its ability to fund cash needs. FAD is a
non-GAAP financial measure and should not be viewed as an
alternative measurement of operating performance to net income, as
an alternative to net cash flows from operating activities or as a
measure of liquidity.
CONTACT: Investor or Media Inquiries, T. Wilson Eglin, CEO
Lexington Realty Trust
Phone: (212) 692-7200 E-mail: tweglin@lxp.com
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