Lexington Realty Trust ("Lexington") (NYSE:LXP), a real estate
investment trust focused on single-tenant real estate investments,
today announced results for the third quarter ended
September 30, 2015.
Third Quarter 2015 Highlights
- Generated Company Funds From Operations ("Company FFO")
of $66.9 million, or $0.27 per diluted common share.
- Disposed of three properties for gross disposition
proceeds of $135.7 million.
- Invested $25.5 million in on-going build-to-suit
projects.
- Completed an industrial build-to-suit property for
$22.1 million.
- Leased approximately 800,000 square feet with overall
portfolio 96.5% leased.
- Retired $55.0 million of secured debt.
- Refinanced credit facility and term loans extending the
maturities by two years and reducing interest rates by 15 to 65
basis points.
- Announced a 10.0 million common share repurchase
authorization and repurchased 1.6 million common shares, at an
average price of $8.34 per share, as of the date of this press
release.
T. Wilson Eglin, President and Chief Executive
Officer of Lexington, stated, "We are raising our Company FFO
guidance for 2015 as a result of strong execution in all aspects of
our business. During the third quarter, same-store rent increased
2.8%, reflecting that approximately 80% of our revenue now comes
from leases with escalating rents. In the fourth quarter, we expect
to close on two substantial build-to-suit projects that are
estimated to contribute approximately $22.5 million to revenue next
year."
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2015,
total gross revenues were $105.4 million, a 1.1% decrease compared
with total gross revenues of $106.6 million for the quarter ended
September 30, 2014. The decrease is primarily due to 2015
property sales and lease expirations, partially offset by revenue
generated from property acquisitions and new leases signed.
Company FFO
For the quarter ended September 30, 2015,
Lexington generated Company FFO of $66.9 million, or $0.27 per
diluted share, compared to Company FFO for the quarter ended
September 30, 2014 of $68.7 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
September 30, 2015 of $0.17 per common share/unit, which was
paid on October 15, 2015 to common shareholders/unitholders of
record as of September 30, 2015. Lexington also declared two
dividends of $0.8125 per share each on its Series C Cumulative
Convertible Preferred Stock ("Series C Preferred Shares"), which
will be paid on November 16, 2015 and February 16, 2016 to Series C
Preferred Shareholders of record as of October 30, 2015 and January
29, 2016, respectively.
Net Income (Loss) Attributable to Common
Shareholders
For the quarter ended September 30, 2015,
net loss attributable to common shareholders was $(7.6) million, or
$(0.03) per diluted share, compared with net income attributable to
common shareholders for the quarter ended September 30, 2014
of $38.7 million, or $0.17 per diluted share.
OPERATING ACTIVITIES
Investment Activity
During the quarter, Lexington completed the
following build-to-suit project, which is subject to a lease having
a term in excess of ten years (an "LTL").
Acquisition |
|
|
Tenant |
|
Location |
|
PropertyType |
|
InitialBasis($000) |
|
InitialAnnualizedCash
Rent($000) |
|
InitialCashYield |
|
GAAPYield |
|
LeaseTerm (Yrs) |
Stella & Chewy's
LLC |
|
Oak
Creek, WI |
|
LTL -
Industrial |
|
$ |
22,139 |
|
|
$ |
1,865 |
|
|
|
8.4 |
% |
|
|
9.5 |
% |
|
20 |
In addition, Lexington acquired a consolidated
joint venture partner's interest in an office property in
Philadelphia, Pennsylvania for $4.0 million, raising Lexington's
ownership in the office property from 87.5% to 100.0%.
Lexington also funded $25.5 million of the projected costs of
the following projects:
On-going Build-to-Suit Projects |
Location |
|
Sq. Ft. |
|
Property Type |
|
Lease Term(Years) |
|
MaximumCommitment/EstimatedCompletion
Cost($000) |
|
GAAP InvestmentBalance as
of9/30/2015($000) |
|
Estimated Completion/Acquisition Date |
Richmond, VA |
|
330,000 |
|
|
LTL -
Office |
|
15 |
|
$ |
110,137 |
|
|
$ |
97,830 |
|
|
4Q
15 |
Anderson, SC |
|
1,325,000 |
|
|
LTL -
Industrial |
|
20 |
|
70,012 |
|
|
12,708 |
|
|
2Q
16 |
Lake Jackson, TX |
|
664,000 |
|
|
LTL -
Office |
|
20 |
|
166,164 |
|
|
45,008 |
|
|
4Q
16 |
Houston, TX(1) |
|
274,000 |
|
|
LTL -
Retail/Specialty |
|
20 |
|
86,491 |
|
|
28,602 |
|
|
3Q
16 |
|
|
2,593,000 |
|
|
|
|
|
|
$ |
432,804 |
|
|
$ |
184,148 |
|
|
|
- Lexington has a 25% interest as of September 30, 2015.
Lexington may provide construction financing up to $56.7 million to
the joint venture.
In addition, Lexington has committed to acquire
the following properties upon completion of construction:
Forward Commitments |
Location |
|
PropertyType |
|
Estimated Acquisition
Cost($000) |
|
Lease Term (Years) |
|
Estimated InitialCash
Yield |
|
Estimated
GAAPYield |
|
Estimated Acquisition Date |
Richland, WA |
|
LTL -
Industrial |
|
$ |
152,000 |
|
|
20 |
|
|
7.1 |
% |
|
|
8.6 |
% |
|
4Q
15 |
Detroit, MI |
|
LTL -
Industrial |
|
29,680 |
|
|
20 |
|
|
7.4 |
% |
|
|
7.4 |
% |
|
1Q
16 |
|
|
|
|
$ |
181,680 |
|
|
|
|
|
7.2 |
% |
|
|
8.4 |
% |
|
|
Capital Recycling
Property Dispositions |
Tenant |
|
Location |
|
Property Type |
|
Gross DispositionPrice
($000) |
|
AnnualizedNOI
($000) |
|
Month of Disposition |
Wagner Industries,
Inc. |
|
Jacksonville, FL |
|
Industrial |
|
$ |
1,850 |
|
|
$ |
313 |
|
|
July |
Lockheed Martin
Corporation |
|
Orlando, FL |
|
Office |
|
12,800 |
|
|
955 |
|
|
July |
Multi-tenant(1) |
|
Baltimore, MD |
|
Office |
|
121,000 |
|
|
8,318 |
|
|
August |
|
|
|
|
|
|
$ |
135,650 |
|
|
$ |
9,586 |
|
|
|
- $55.0 million non-recourse mortgage loan assumed at
closing.
Balance Sheet
On September 1, 2015, Lexington entered into a
new $905.0 million unsecured credit agreement, which replaced
Lexington's existing revolving credit facility and term loans. With
lender approval, Lexington can increase the size of the new
facility to an aggregate $1.8 billion. A summary of the significant
terms are as follows:
|
PriorMaturity Date |
|
NewMaturity Date |
|
PriorInterest Rate |
|
CurrentInterest Rate |
$400.0 Million
Revolving Credit Facility(1) |
02/2017 |
|
08/2019 |
|
L +
1.15% |
|
L +
1.00% |
$250.0 Million Term
Loan(2) |
02/2018 |
|
08/2020 |
|
L +
1.35% |
|
L +
1.10% |
$255.0 Million Term
Loan(3) |
01/2019 |
|
01/2021 |
|
L +
1.75% |
|
L +
1.10% |
1. Maturity date can be extended to
08/2020 at Lexington's option.2. Lexington
previously entered into aggregate interest rate swap agreements,
which fix the LIBOR component of this loan at 1.09% through
02/2018.3. Lexington previously entered
into aggregate interest rate swap agreements, which fix the LIBOR
component of this loan at 1.42% through 01/2019.
In July 2015, Lexington announced a new 10.0 million common
share repurchase authorization (inclusive of all outstanding prior
authorizations). As of the date of this earnings release, 1,594,644
common shares have been repurchased at an average price of $8.34
per share.
In August 2015, approximately $0.4 million
original principal amount 6.00% Convertible Guaranteed Notes due
2030 ("6.00% Notes") were satisfied for cash, reducing the
outstanding balance of this note issuance to $12.4 million. All
common shares that are issuable upon conversion of the 6.00% Notes
are treated as outstanding for diluted Company FFO
calculations.
Leasing
During the third quarter of 2015, Lexington
executed the following new and extended leases:
|
|
LEASE EXTENSIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
Prior Term |
|
Lease Expiration Date |
|
Sq. Ft. |
|
|
|
|
|
|
|
|
|
|
|
|
Office/Multi-Tenant Office |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Rockaway, NJ |
|
|
06/2026 |
|
12/2027 |
|
60,258 |
|
2-4 |
|
Various
(AZ, HI) |
|
|
2015 |
|
2016-2021 |
|
34,758 |
|
4 |
|
Total office lease extensions |
|
|
|
|
|
95,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Erwin, NY |
|
|
11/2016 |
|
11/2026 |
|
408,000 |
|
2 |
|
Orlando,
FL |
|
|
03/2016 |
|
03/2021 |
|
205,016 |
|
2 |
|
Total industrial lease extensions |
|
|
|
|
|
613,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Tulsa, OK |
|
|
05/2016 |
|
05/2026 |
|
43,123 |
|
1 |
|
Total retail lease extensions |
|
|
|
|
|
43,123 |
|
|
|
|
|
|
|
|
|
|
|
7 |
|
Total lease extensions |
|
|
|
|
|
751,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW
LEASES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
|
|
Lease Expiration Date |
|
Sq. Ft. |
|
|
|
|
|
|
|
|
|
|
|
|
Office/Multi-Tenant Office |
|
|
|
|
|
|
1 |
|
Foxboro, MA |
|
|
|
|
02/2017 |
|
8,151 |
|
2 |
|
Rockaway,
NJ |
|
|
|
|
12/2027 |
|
32,068 |
|
2 |
|
Total new office leases |
|
|
|
|
|
40,219 |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Total new leases |
|
|
|
|
|
40,219 |
|
|
|
|
|
|
|
|
|
|
|
9 |
|
TOTAL NEW AND EXTENDED LEASES |
|
|
|
|
|
791,374 |
|
As of September 30, 2015, Lexington's
portfolio was 96.5% leased, excluding properties owned subject to
mortgages in default.
2015 EARNINGS GUIDANCE
Lexington raised its Company FFO guidance to an
expected range of $1.05 to $1.07 from $1.02 to $1.06 to 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.
THIRD QUARTER 2015 CONFERENCE
CALL
Lexington will host a conference call today,
Thursday, November 5, 2015, at 11:00 a.m. Eastern Time, to discuss
its results for the quarter ended September 30, 2015.
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 November 19, 2015, at 877-870-5176 or
858-384-5517, pin: 13622695. 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.
Contact:Investor or Media Inquiries, T. Wilson Eglin,
CEOLexington Realty TrustPhone: (212) 692-7200 E-mail:
tweglin@lxp.com
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,
disposition, 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 September 30, |
|
Nine months ended September 30, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Gross revenues: |
|
|
|
|
|
|
|
Rental |
$ |
98,095 |
|
|
$ |
98,941 |
|
|
$ |
300,551 |
|
|
$ |
292,870 |
|
Tenant reimbursements |
7,343 |
|
|
7,631 |
|
|
23,662 |
|
|
23,165 |
|
Total gross revenues |
105,438 |
|
|
106,572 |
|
|
324,213 |
|
|
316,035 |
|
Expense applicable to
revenues: |
|
|
|
|
|
|
|
Depreciation and amortization |
(39,712 |
) |
|
(39,022 |
) |
|
(121,795 |
) |
|
(114,732 |
) |
Property operating |
(13,484 |
) |
|
(15,504 |
) |
|
(45,600 |
) |
|
(46,634 |
) |
General and
administrative |
(6,734 |
) |
|
(6,426 |
) |
|
(22,526 |
) |
|
(21,035 |
) |
Non-operating
income |
2,515 |
|
|
4,217 |
|
|
8,213 |
|
|
10,369 |
|
Interest and
amortization expense |
(21,931 |
) |
|
(24,321 |
) |
|
(68,273 |
) |
|
(73,456 |
) |
Debt satisfaction gains
(charges), net |
(398 |
) |
|
(455 |
) |
|
13,753 |
|
|
(7,946 |
) |
Impairment charges |
(32,818 |
) |
|
(2,464 |
) |
|
(34,070 |
) |
|
(18,864 |
) |
Gains on sales of
properties |
1,733 |
|
|
- |
|
|
23,307 |
|
|
- |
|
Income (loss) before
provision for income taxes, equity in earnings of non-consolidated
entities and discontinued operations |
(5,391 |
) |
|
22,597 |
|
|
77,222 |
|
|
43,737 |
|
Provision for income
taxes |
(75 |
) |
|
(72 |
) |
|
(464 |
) |
|
(947 |
) |
Equity in earnings of
non-consolidated entities |
266 |
|
|
173 |
|
|
938 |
|
|
246 |
|
Income (loss) from continuing
operations |
(5,200 |
) |
|
22,698 |
|
|
77,696 |
|
|
43,036 |
|
Discontinued
operations: |
|
|
|
|
|
|
|
Income from discontinued
operations |
- |
|
|
1,322 |
|
|
109 |
|
|
5,601 |
|
Provision for income taxes |
- |
|
|
(14 |
) |
|
(4 |
) |
|
(50 |
) |
Debt satisfaction charges, net |
- |
|
|
- |
|
|
- |
|
|
(299 |
) |
Gains on sales of properties |
- |
|
|
18,542 |
|
|
1,577 |
|
|
22,052 |
|
Impairment charges |
- |
|
|
(371 |
) |
|
- |
|
|
(11,062 |
) |
Total discontinued operations |
- |
|
|
19,479 |
|
|
1,682 |
|
|
16,242 |
|
Net income (loss) |
(5,200 |
) |
|
42,177 |
|
|
79,378 |
|
|
59,278 |
|
Less net income attributable to
noncontrolling interests |
(784 |
) |
|
(1,772 |
) |
|
(2,525 |
) |
|
(3,537 |
) |
Net income (loss)
attributable to Lexington Realty Trust shareholders |
(5,984 |
) |
|
40,405 |
|
|
76,853 |
|
|
55,741 |
|
Dividends attributable
to preferred shares - Series C |
(1,573 |
) |
|
(1,573 |
) |
|
(4,718 |
) |
|
(4,718 |
) |
Allocation to
participating securities |
(72 |
) |
|
(112 |
) |
|
(264 |
) |
|
(399 |
) |
Net income (loss)
attributable to common shareholders |
$ |
(7,629 |
) |
|
$ |
38,720 |
|
|
$ |
71,871 |
|
|
$ |
50,624 |
|
Income (loss) per
common share - basic: |
|
|
|
|
|
|
|
Income (loss) from continuing
operations |
$ |
(0.03 |
) |
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.15 |
|
Income from discontinued
operations |
- |
|
|
0.08 |
|
|
0.01 |
|
|
0.07 |
|
Net income (loss) attributable to
common shareholders |
$ |
(0.03 |
) |
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
0.22 |
|
Weighted-average common
shares outstanding - basic |
234,018,062 |
|
|
229,463,522 |
|
|
233,457,400 |
|
|
228,337,871 |
|
Income (loss) per
common share - diluted: |
|
|
|
|
|
|
|
Income (loss) from continuing
operations |
$ |
(0.03 |
) |
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.15 |
|
Income from discontinued
operations |
- |
|
|
0.08 |
|
|
0.01 |
|
|
0.07 |
|
Net income (loss) attributable to
common shareholders |
$ |
(0.03 |
) |
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
0.22 |
|
Weighted-average common
shares outstanding - diluted |
234,018,062 |
|
|
229,922,110 |
|
|
233,776,838 |
|
|
228,830,020 |
|
Amounts attributable to
common shareholders: |
|
|
|
|
|
|
|
Income (loss) from continuing
operations |
$ |
(7,629 |
) |
|
$ |
20,151 |
|
|
$ |
70,189 |
|
|
$ |
35,330 |
|
Income from discontinued
operations |
- |
|
|
18,569 |
|
|
1,682 |
|
|
15,294 |
|
Net income (loss) attributable to
common shareholders |
$ |
(7,629 |
) |
|
$ |
38,720 |
|
|
$ |
71,871 |
|
|
$ |
50,624 |
|
|
LEXINGTON REALTY
TRUST AND CONSOLIDATED SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Unaudited and in
thousands, except share and per share data) |
|
|
September 30, 2015 |
|
December 31, 2014 |
Assets: |
|
|
|
Real estate, at
cost |
$ |
3,586,435 |
|
|
$ |
3,671,560 |
|
Real estate -
intangible assets |
669,341 |
|
|
705,566 |
|
Investments in real
estate under construction |
155,546 |
|
|
106,238 |
|
|
4,411,322 |
|
|
4,483,364 |
|
Less: accumulated
depreciation and amortization |
1,153,841 |
|
|
1,196,114 |
|
Real estate, net |
3,257,481 |
|
|
3,287,250 |
|
Assets held for
sale |
- |
|
|
3,379 |
|
Cash and cash
equivalents |
86,269 |
|
|
191,077 |
|
Restricted cash |
12,327 |
|
|
17,379 |
|
Investment in and
advances to non-consolidated entities |
28,050 |
|
|
19,402 |
|
Deferred expenses,
net |
62,225 |
|
|
65,860 |
|
Loans receivable,
net |
95,806 |
|
|
105,635 |
|
Rent receivable -
current |
9,896 |
|
|
6,311 |
|
Rent receivable -
deferred |
78,957 |
|
|
61,372 |
|
Other assets |
21,614 |
|
|
20,229 |
|
Total assets |
$ |
3,652,625 |
|
|
$ |
3,777,894 |
|
|
|
|
|
Liabilities and
Equity: |
|
|
|
Liabilities: |
|
|
|
Mortgages and notes
payable |
$ |
804,238 |
|
|
$ |
945,216 |
|
Credit facility
borrowings |
73,000 |
|
|
- |
|
Term loans payable |
505,000 |
|
|
505,000 |
|
Senior notes
payable |
497,879 |
|
|
497,675 |
|
Convertible notes
payable |
12,128 |
|
|
15,664 |
|
Trust preferred
securities |
129,120 |
|
|
129,120 |
|
Dividends payable |
45,307 |
|
|
42,864 |
|
Liabilities held for
sale |
- |
|
|
2,843 |
|
Accounts payable and
other liabilities |
42,692 |
|
|
37,740 |
|
Accrued interest
payable |
14,679 |
|
|
8,301 |
|
Deferred revenue -
including below market leases, net |
43,521 |
|
|
68,215 |
|
Prepaid rent |
16,991 |
|
|
16,336 |
|
Total liabilities |
2,184,555 |
|
|
2,268,974 |
|
|
|
|
|
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, 235,179,131
and 233,278,037 shares issued and outstanding in 2015 and 2014,
respectively |
24 |
|
|
23 |
|
Additional
paid-in-capital |
2,779,836 |
|
|
2,763,374 |
|
Accumulated
distributions in excess of net income |
(1,422,417 |
) |
|
(1,372,051 |
) |
Accumulated other
comprehensive income (loss) |
(6,216 |
) |
|
404 |
|
Total shareholders' equity |
1,445,243 |
|
|
1,485,766 |
|
Noncontrolling
interests |
22,827 |
|
|
23,154 |
|
Total equity |
1,468,070 |
|
|
1,508,920 |
|
Total liabilities and
equity |
$ |
3,652,625 |
|
|
$ |
3,777,894 |
|
|
LEXINGTON REALTY
TRUST AND CONSOLIDATED SUBSIDIARIES |
EARNINGS PER
SHARE |
(Unaudited and
in thousands, except share and per share data) |
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
EARNINGS PER
SHARE: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to common shareholders |
$ |
(7,629 |
) |
|
$ |
20,151 |
|
|
$ |
70,189 |
|
|
$ |
35,330 |
|
Income from
discontinued operations attributable to common shareholders |
- |
|
|
18,569 |
|
|
1,682 |
|
|
15,294 |
|
Net income (loss)
attributable to common shareholders |
$ |
(7,629 |
) |
|
$ |
38,720 |
|
|
$ |
71,871 |
|
|
$ |
50,624 |
|
Weighted-average number
of common shares outstanding |
234,018,062 |
|
|
229,463,522 |
|
|
233,457,400 |
|
|
228,337,871 |
|
Income (loss) per
common share: |
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
$ |
(0.03 |
) |
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.15 |
|
Income from
discontinued operations |
- |
|
|
0.08 |
|
|
0.01 |
|
|
0.07 |
|
Net income (loss)
attributable to common shareholders |
$ |
(0.03 |
) |
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to common shareholders -
basic |
$ |
(7,629 |
) |
|
$ |
20,151 |
|
|
$ |
70,189 |
|
|
$ |
35,330 |
|
Impact of assumed
conversions |
- |
|
|
- |
|
|
- |
|
|
- |
|
Income (loss) from
continuing operations attributable to common shareholders |
(7,629 |
) |
|
20,151 |
|
|
70,189 |
|
|
35,330 |
|
Income from
discontinued operations attributable to common shareholders -
basic |
- |
|
|
18,569 |
|
|
1,682 |
|
|
15,294 |
|
Impact of assumed
conversions |
- |
|
|
- |
|
|
- |
|
|
- |
|
Income from
discontinued operations attributable to common shareholders |
- |
|
|
18,569 |
|
|
1,682 |
|
|
15,294 |
|
Net income (loss)
attributable to common shareholders |
$ |
(7,629 |
) |
|
$ |
38,720 |
|
|
$ |
71,871 |
|
|
$ |
50,624 |
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding - basic |
234,018,062 |
|
|
229,463,522 |
|
|
233,457,400 |
|
|
228,337,871 |
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
Share options |
- |
|
|
458,588 |
|
|
319,438 |
|
|
492,149 |
|
Weighted-average common
shares outstanding |
234,018,062 |
|
|
229,922,110 |
|
|
233,776,838 |
|
|
228,830,020 |
|
|
|
|
|
|
|
|
|
Income (loss) per
common share: |
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
$ |
(0.03 |
) |
|
$ |
0.09 |
|
|
$ |
0.30 |
|
|
$ |
0.15 |
|
Income from
discontinued operations |
- |
|
|
0.08 |
|
|
0.01 |
|
|
0.07 |
|
Net income (loss)
attributable to common shareholders |
$ |
(0.03 |
) |
|
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
0.22 |
|
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 September 30, |
|
Nine Months Ended September 30, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
FUNDS FROM OPERATIONS: (1) |
|
|
Basic and Diluted: |
|
|
|
|
|
|
|
Net income
(loss) attributable to common shareholders |
$ |
(7,629 |
) |
|
$ |
38,720 |
|
|
$ |
71,871 |
|
|
$ |
50,624 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
38,547 |
|
|
39,030 |
|
|
117,936 |
|
|
117,991 |
|
|
Impairment charges - real estate,
including non-consolidated entities |
32,818 |
|
|
3,115 |
|
|
34,070 |
|
|
30,856 |
|
|
Noncontrolling interests - OP
units |
452 |
|
|
1,442 |
|
|
1,542 |
|
|
2,556 |
|
|
Amortization of leasing
commissions |
1,166 |
|
|
1,580 |
|
|
3,859 |
|
|
4,506 |
|
|
Joint venture and noncontrolling
interest adjustment |
577 |
|
|
495 |
|
|
1,335 |
|
|
1,733 |
|
|
Gains on sales of properties |
(1,733 |
) |
|
(18,542 |
) |
|
(24,884 |
) |
|
(22,052 |
) |
FFO
available to common shareholders and unitholders -
basic |
64,198 |
|
|
65,840 |
|
|
205,729 |
|
|
186,214 |
|
|
Preferred dividends |
1,573 |
|
|
1,573 |
|
|
4,718 |
|
|
4,718 |
|
|
Interest and amortization on 6.00%
Convertible Guaranteed Notes |
252 |
|
|
508 |
|
|
795 |
|
|
1,618 |
|
|
Amount allocated to participating
securities |
72 |
|
|
112 |
|
|
264 |
|
|
399 |
|
FFO
available to common shareholders and unitholders -
diluted |
66,095 |
|
|
68,033 |
|
|
211,506 |
|
|
192,949 |
|
|
Debt satisfaction (gains) charges,
net, including non-consolidated entities |
398 |
|
|
455 |
|
|
(13,689 |
) |
|
8,245 |
|
|
Other / Transaction costs |
405 |
|
|
257 |
|
|
579 |
|
|
1,514 |
|
Company FFO available to common shareholders and
unitholders - diluted |
66,898 |
|
|
68,745 |
|
|
198,396 |
|
|
202,708 |
|
|
|
|
|
|
|
|
|
FUNDS AVAILABLE FOR DISTRIBUTION: (2) |
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Straight-line rents |
(12,899 |
) |
|
(13,478 |
) |
|
(35,242 |
) |
|
(31,057 |
) |
|
Lease incentives |
212 |
|
|
250 |
|
|
1,157 |
|
|
1,104 |
|
|
Amortization of below/above market
leases |
287 |
|
|
184 |
|
|
(157 |
) |
|
903 |
|
|
Non-cash interest, net |
(598 |
) |
|
(1,824 |
) |
|
520 |
|
|
(4,186 |
) |
|
Non-cash charges, net |
2,205 |
|
|
2,114 |
|
|
6,608 |
|
|
6,563 |
|
|
Tenant improvements |
(10,562 |
) |
|
(1,961 |
) |
|
(13,184 |
) |
|
(5,960 |
) |
|
Lease costs |
(1,066 |
) |
|
(1,895 |
) |
|
(4,242 |
) |
|
(8,414 |
) |
Company Funds Available for Distribution |
$ |
44,477 |
|
|
$ |
52,135 |
|
|
$ |
153,856 |
|
|
$ |
161,661 |
|
|
|
|
|
|
|
|
|
|
Per
Common Share and Unit Amounts |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
FFO |
$ |
0.27 |
|
|
$ |
0.28 |
|
|
$ |
0.87 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
FFO |
$ |
0.27 |
|
|
$ |
0.28 |
|
|
$ |
0.87 |
|
|
$ |
0.80 |
|
|
Company FFO |
$ |
0.27 |
|
|
$ |
0.28 |
|
|
$ |
0.81 |
|
|
$ |
0.84 |
|
|
Company FAD |
$ |
0.18 |
|
|
$ |
0.22 |
|
|
$ |
0.63 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
Weighted-Average Common Shares: |
|
|
|
|
|
|
|
|
Basic(3) |
237,871,036 |
|
|
233,334,560 |
|
|
237,310,374 |
|
|
232,214,620 |
|
|
Diluted |
244,714,549 |
|
|
242,373,712 |
|
|
244,432,218 |
|
|
241,487,119 |
|
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
at the beginning of the period. 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.
3 Includes OP units other than OP units held by
us.
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