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August 22, 2017 Minimum 20 minute delay.
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Press Release

Lexington Realty Trust Reports Second Quarter 2017 Results

Company Release - 8/8/2017 6:00 AM ET

NEW YORK, Aug. 08, 2017 (GLOBE NEWSWIRE) -- Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

  • Generated Net Income attributable to common shareholders of $5.5 million, or $0.02 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $57.0 million, or $0.23 per diluted common share.
  • Acquired three industrial properties for an aggregated cost of $104.2 million and completed the Charlotte, NC build-to-suit project for $61.3 million.
  • Committed to acquire an industrial property in Romulus, MI for $39.3 million.
  • Invested $9.3 million in an on-going build-to-suit project.
  • Sold six properties for $59.1 million.
  • Retired $19.8 million of secured debt.
  • Completed 1.4 million square feet of new leases and lease extensions with overall portfolio 98.1% leased at quarter end.

Subsequent Events

  • Disposed of a retail property in Lexington, NC and a vacant office property in Rock Hill, SC for an aggregate $7.7 million.
  • Acquired an industrial property in McDonough, GA for $66.7 million, which is net leased for 10.5 years.
  • Extended the 2018 lease maturities on an industrial property in Columbus, OH and an industrial property in Marshall, MI aggregating 1.0 million square feet.
  • Borrowed $70.0 million under its unsecured revolving credit facility.

Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.

T. Wilson Eglin, Chief Executive Officer and President of Lexington Realty Trust, commented, “During the second quarter, we continued to execute on our business plan by addressing lease rollover, selling under-performing and non-core properties, completing build-to-suit projects and acquiring high-quality industrial properties.  Acquisition and build-to-suit completions of $166 million exceeded sales volume of $59 million for the quarter, and our industrial investment pipeline remains promising. After strong leasing volume of 1.4 million square feet, our portfolio was 98.1% leased at quarter end. In the second half of the year, we will continue to focus on adding high quality industrial properties to our portfolio while further simplifying our holdings through asset sales, primarily in the office area.”

FINANCIAL RESULTS

Revenues

For the quarter ended June 30, 2017, total gross revenues were $95.7 million, compared with total gross revenues of $116.9 million for the quarter ended June 30, 2016. The decrease was primarily attributable to 2017 and 2016 property sales, particularly the sale of the New York City land investments in 2016, a lease termination payment received in 2016 and lease expirations, partially offset by revenue generated from property acquisitions and new leases.

Net Income Attributable to Common Shareholders

For the quarter ended June 30, 2017, net income attributable to common shareholders was $5.5 million, or $0.02 per diluted share, compared with net income attributable to common shareholders for the quarter ended June 30, 2016 of $53.9 million, or $0.23 per diluted share.

Adjusted Company FFO

For the quarter ended June 30, 2017, Lexington generated Adjusted Company FFO of $57.0 million, or $0.23 per diluted share, compared to Adjusted Company FFO for the quarter ended June 30, 2016 of $79.1 million, or $0.32 per diluted share. The decrease was primarily attributable to the items discussed above under "Revenues".

Dividends/Distributions

As previously announced, during the second quarter of 2017, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended June 30, 2017 of $ 0.175 per common share/unit, which was paid on July 17, 2017 to common shareholders/unitholders of record as of June 30, 2017. Lexington also declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock, which is expected to be paid on August 15, 2017 to Series C Preferred Shareholders of record as of July 31, 2017.

TRANSACTION ACTIVITY

ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Tenant Location Sq. Ft. Property
Type
 Initial Basis ($000) Approximate
Lease
Term (Yrs)
AvidXchange, Inc. Charlotte, NC 201,000  Office $61,339  15
General Electric Company(1) Cleveland, TN 851,000  Industrial 34,400  7
O'Neal Metals (Texas), L.P. Grand Prairie, TX 215,000  Industrial 24,317  20
Carrier Corporation San Antonio, TX 849,000  Industrial 45,507  10
    2,116,000    $165,563   
              
(1) Initial Basis excludes an $850 thousand future tenant allowance, which was credited at closing.
              

The above were acquired/completed at aggregate weighted-average GAAP and cash capitalization rates of 8.1% and 7.2%, respectively.

ON-GOING BUILD-TO-SUIT PROJECT      
Location Sq. Ft. Property
Type
 Maximum
Commitment/
Estimated
Completion Cost

($000)
 GAAP
Investment
Balance as of

6/30/2017
($000)
 Estimated
Acquisition/
Completion Date
 Estimated
Initial
GAAP
Yield
 Estimated
Initial
Cash
Yield
 Approximate
Lease Term

(Yrs)
Opelika, AL 165,000 Industrial $37,370  $29,442  3Q 17 8.9% 7.0% 25
                       


FORWARD PURCHASE COMMITMENTS      
Location Sq. Ft. Property
Type
 Maximum
Acquisition Cost

($000)
 Estimated
Acquisition
Date
 Estimated
Initial GAAP
Yield
 Estimated
Initial Cash
Yield
 Approximate
Lease Term
(Yrs)
Warren, MI(1) 260,000  Industrial $47,000  3Q 17 8.3% 7.3% 15
Romulus, MI 500,000  Industrial 39,330  3Q 17 6.5% 6.1% 15
  760,000    $86,330    7.5% 6.7%  
                    
(1) A $4.6 million letter of credit secures the obligation to purchase this property.
                    


PROPERTY DISPOSITIONS  
Primary Tenant Location Property Type Gross
Disposition

Price
($000)
 Annualized
Net Income(1)
($000)
 Annualized
NOI(1)
($000)
 Month of
Disposition
 %
Leased
Silver Spring Foods, Inc. Eau Claire, WI Industrial $13,647  $1,002  $1,070  April 100%
Vacant Southfield, MI Multi-Tenant - Office 3,461  (3,323) (956) May 0%
BJC Health System Bridgeton, MO Multi-Tenant - Office 1,100  (139) (2) May 50%
Marketlink, Inc. Des Moines, IA Industrial 15,592  381  2,676  May 6%
Kmart Corporation Lorain, OH Other 6,300  407  71  May 100%
Hollingsworth Logistics Group, L.L.C. Temperance, MI Multi-Tenant - Industrial 19,000  (55) 258  May 52%
      $59,100  $(1,727) $3,117     
                     
(1)  Quarterly period prior to sale annualized.
                     

These sales resulted in aggregate gains of $10.2 million and aggregate impairment charges of $3.6 million.

LEASING

During the second quarter of 2017, Lexington executed the following new and extended leases:

  LEASE EXTENSIONS    
            
  Location Primary Tenant(1) Prior
Term
 Lease
Expiration Date
 Sq. Ft.
  Office/Multi-Tenant        
1 CentennialCO Arrow Electronics, Inc. 09/2017 03/2033 128,500 
2 HerndonVA United States of America 05/2018 05/2022 159,644 
3 KingsportTN Kingsport Power Company 06/2018 06/2023 42,770 
4-6 Honolulu/IndianapolisHI/IN N/A 2017-2018 2018-2020 4,472 
6 Total office lease extensions      335,386 
            
  Industrial / Multi-Tenant        
1 ShelbyNC Clearwater Paper Corporation 05/2031 05/2036 673,518 
2 AntiochTN Evergreen Presbyterian Ministries 04/2017 04/2024 11,238 
3 HendersonNC Staples, Inc. 06/2018 12/2018 196,946 
3 Total industrial lease extensions       881,702 
            
  Other        
1 ParisTN The Kroger Co. 07/2018 07/2023 31,170 
1 Total other lease extensions       31,170 
            
10 Total lease extensions       1,248,258 
            


  NEW LEASES       
          
  Location   Lease
Expiration Date
 Sq. Ft.
  Office/Multi-Tenant      
1 HoustonTX Saipem America, Inc. 10/2017 27,213 
1 Total new office leases     27,213 
          
  Industrial/Multi-Tenant      
1 Temperance(2)MI Hollingsworth Logistics Group L.L.C. 11/2021 112,549 
1 Total new industrial leases     112,549 
          
2 Total new leases     139,762 
12 TOTAL NEW AND EXTENDED LEASES     1,388,020 
          
(1)  Leases greater than 10,000 square feet.
(2)  Property subsequently sold.
          

As of June 30, 2017, Lexington's portfolio was 98.1% leased, excluding any property subject to a mortgage loan in default.

BALANCE SHEET/CAPITAL MARKETS

In the second quarter of 2017, Lexington satisfied an aggregate $19.8 million of nonrecourse mortgage debt.

2017 EARNINGS GUIDANCE

Lexington now estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2017 will be within an expected range of $0.65 to $0.69. Lexington is reaffirming that its Adjusted Company FFO for the year ended December 31, 2017 will be within an expected range of $0.94 to $0.98 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

SECOND QUARTER 2017 CONFERENCE CALL

Lexington will host a conference call today, August 8, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended June 30, 2017. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through November 8, 2017, at 1-877-344-7529 (U.S.), 1-412-317-0088 (International) or 1-855-669-9658 (Canada), pin code for all replay numbers is 10110777. 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 (NYSE:LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions. For more information, including Lexington's Quarterly Supplemental Information package, or to follow Lexington on social media, visit www.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, (2) Lexington's ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2017, (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, and all property operating activities are conducted, through special purpose entities, which are separate and distinct legal entities that maintain separate books and records, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

Non-GAAP Financial Measures - Definitions

Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.

Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington's financial performance or cash flow from operating, investing or financing activities or liquidity.

Cash Rent: Cash Rent is calculated by making adjustments to GAAP rent to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents relating to free rent periods and contractual rent increases. Cash Rent excludes lease termination income. Lexington believes Cash Rent provides a meaningful indication of an investment's ability to fund cash needs.

Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“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.

Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, 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, or 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 non-consolidated 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 and also presents FFO available to all equityholders 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 Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders  and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington's real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.

GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.

Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), tenant reimbursements and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
     
  Three months ended
June 30,
 Six months ended
June 30,
  2017 2016 2017 2016
Gross revenues:        
Rental $87,565  $108,982  $176,219  $212,202 
Tenant reimbursements 8,119  7,930  15,564  15,987 
Total gross revenues 95,684  116,912  191,783  228,189 
Expense applicable to revenues:        
Depreciation and amortization (42,320) (41,272) (85,211) (84,399)
Property operating (12,974) (11,293) (25,090) (23,371)
General and administrative (8,141) (7,747) (17,598) (15,522)
Non-operating income 1,371  3,553  3,992  6,420 
Interest and amortization expense (19,216) (22,679) (38,941) (45,572)
Debt satisfaction charges, net (46) (3,194) (46) (3,356)
Impairment charges and loan loss (13,599) (3,014) (21,591) (3,014)
Gains on sales of properties 10,240  25,326  44,433  42,341 
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities 10,999  56,592  51,731  101,716 
Provision for income taxes (377) (224) (799) (637)
Equity in earnings (losses) of non-consolidated entities (3,257) 312  (1,347) 6,054 
Net income 7,365  56,680  49,585  107,133 
Less net income attributable to noncontrolling interests (213) (1,148) (393) (2,158)
Net income attributable to Lexington Realty Trust shareholders 7,152  55,532  49,192  104,975 
Dividends attributable to preferred shares – Series C (1,573) (1,573) (3,145) (3,145)
Allocation to participating securities (60) (84) (131) (175)
Net income attributable to common shareholders $5,519  $53,875  $45,916  $101,655 
         
Net income attributable to common shareholders - per common share basic $0.02  $0.23  $0.19  $0.44 
Weighted-average common shares outstanding – basic 237,720,198  232,592,998  237,451,355  232,617,901 
         
Net income attributable to common shareholders - per common share diluted $0.02  $0.23  $0.19  $0.43 
Weighted-average common shares outstanding – diluted 241,531,313  235,227,199  241,310,529  235,151,256 
             


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
    
 June 30, 2017 December 31, 2016
Assets:   
Real estate, at cost$3,638,123  $3,533,172 
Real estate - intangible assets575,172  597,294 
Investments in real estate under construction29,442  106,652 
 4,242,737  4,237,118 
Less: accumulated depreciation and amortization1,185,911  1,208,792 
Real estate, net3,056,826  3,028,326 
Assets held for sale5,984  23,808 
Cash and cash equivalents93,279  86,637 
Restricted cash35,939  31,142 
Investment in and advances to non-consolidated entities61,771  67,125 
Deferred expenses, net32,873  33,360 
Loans receivable, net  94,210 
Rent receivable – current5,407  7,516 
Rent receivable – deferred41,789  31,455 
Other assets32,935  37,888 
Total assets$3,366,803  $3,441,467 
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$703,845  $738,047 
Term loans payable, net501,602  501,093 
Senior notes payable, net494,780  494,362 
Trust preferred securities, net127,146  127,096 
Dividends payable48,037  47,264 
Liabilities held for sale324  191 
Accounts payable and other liabilities33,901  59,601 
Accrued interest payable5,953  6,704 
Deferred revenue - including below market leases, net39,116  39,895 
Prepaid rent15,974  14,723 
Total liabilities1,970,678  2,028,976 
    
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 outstanding94,016  94,016 
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 240,612,821 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively24  24 
Additional paid-in-capital2,822,217  2,800,736 
Accumulated distributions in excess of net income(1,538,442) (1,500,966)
Accumulated other comprehensive income (loss)443  (1,033)
Total shareholders’ equity1,378,258  1,392,777 
Noncontrolling interests17,867  19,714 
Total equity1,396,125  1,412,491 
Total liabilities and equity$3,366,803  $3,441,467 
        


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
(Unaudited and in thousands, except share and per share data)
     
  Three Months Ended
June 30,
 Six Months Ended
June 30,
  2017 2016 2017 2016
EARNINGS PER SHARE:        
         
Basic:        
Net income attributable to common shareholders $5,519  $53,875  $45,916  $101,655 
         
Weighted-average number of common shares outstanding - basic 237,720,198  232,592,998  237,451,355  232,617,901 
         
Net income attributable to common shareholders - per common share basic $0.02  $0.23  $0.19  $0.44 
         
Diluted:        
Net income attributable to common shareholders - basic $5,519  $53,875  $45,916  $101,655 
Impact of assumed conversions   315  (19) 628 
Net income attributable to common shareholders $5,519  $54,190  $45,897  $102,283 
         
Weighted-average common shares outstanding - basic 237,720,198  232,592,998  237,451,355  232,617,901 
Effect of dilutive securities:        
Share options 86,653  273,920  111,252  204,783 
6.00% Convertible Guaranteed Notes   1,878,445    1,909,841 
Operating Partnership Units 3,724,462    3,747,922   
Non-vested common shares   481,836    418,731 
Weighted-average common shares outstanding - diluted 241,531,313  235,227,199  241,310,529  235,151,256 
         
Net income attributable to common shareholders - per common share diluted $0.02  $0.23  0.19  $0.43 
                


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
          
  Three Months Ended
June 30,
 Six Months Ended
June 30,
  2017 2016 2017 2016
FUNDS FROM OPERATIONS:      
Basic and Diluted:        
Net income attributable to common shareholders $5,519  $53,875  $45,916  $101,655 
Adjustments:        
 Depreciation and amortization 41,076  39,688  82,618  80,881 
 Impairment charges - real estate, including non-consolidated entities 17,111  3,014  19,809  3,014 
 Noncontrolling interests - OP units   927  (19) 1,662 
 Amortization of leasing commissions 1,244  1,584  2,593  3,518 
 Joint venture and noncontrolling interest adjustment 265  222  605  458 
 Gains on sales of properties, including non-consolidated entities (10,240) (25,326) (45,885) (47,719)
 Tax on sales of properties       50 
FFO available to common shareholders and unitholders - basic 54,975  73,984  105,637  143,519 
 Preferred dividends 1,573  1,573  3,145  3,145 
 Interest and amortization on 6.00% Convertible Guaranteed Notes   233    485 
 Amount allocated to participating securities 60  84  131  175 
FFO available to all equityholders and unitholders - diluted 56,608  75,874  108,913  147,324 
 Debt satisfaction charges, net 46  3,194  46  3,356 
 Loan loss     5,294   
 Transaction costs 302  68  488  214 
Adjusted Company FFO available to all equityholders and unitholders - diluted 56,956  79,136  114,741  150,894 
         
FUNDS AVAILABLE FOR DISTRIBUTION:        
Adjustments:        
 Straight-line adjustments (5,641) (13,241) (8,550) (24,380)
 Lease incentives 510  419  941  842 
 Amortization of above/below market leases 346  499  860  955 
 Lease termination payments, net (530) (2,152) (295) (4,563)
 Non-cash interest, net 497  (632) 652  (1,014)
 Non-cash charges, net 1,987  2,403  4,133  4,610 
 Tenant improvements (4,233) 601  (5,995) (119)
 Lease costs (1,385) (3,477) (3,056) (4,707)
Company Funds Available for Distribution $48,507  $63,556  $103,431  $122,518 
          
Per Common Share and Unit Amounts        
Basic:        
 FFO $0.23  $0.31  $0.44  $0.61 
          
Diluted:        
 FFO $0.23  $0.31  $0.44  $0.60 
 Adjusted Company FFO $0.23  $0.32  $0.47  $0.62 
          
Basic:        
 Weighted-average common shares outstanding - basic EPS 237,720,198  232,592,998  237,451,355  232,617,901 
 Operating partnership units(1) 3,724,462  3,818,805  3,747,922  3,819,498 
 Weighted-average common shares outstanding - basic FFO 241,444,660  236,411,803  241,199,277  236,437,399 
          
Diluted:        
 Weighted-average common shares outstanding - diluted EPS 241,531,313  235,227,199  241,310,529  235,151,256 
 Operating partnership units(1)   3,818,805    3,819,498 
 Unvested share-based payment awards 606,934    648,810   
 Preferred shares - Series C 4,710,570  4,710,570  4,710,570  4,710,570 
 Weighted-average common shares outstanding - diluted FFO 246,848,817  243,756,574  246,669,909  243,681,324 
              
(1)  Includes OP units other than OP units held by Lexington.
              


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
     
2017 EARNINGS GUIDANCE    
  Twelve Months Ended
December 31, 2017
  Range
Estimated:    
Net income attributable to common shareholders per diluted common share(1) $0.65  $0.69 
Depreciation and amortization 0.70  0.70 
Impact of capital transactions (0.41) (0.41)
Estimated Adjusted Company FFO per diluted common share $0.94  $0.98 
         
(1)  Assumes all convertible securities are dilutive.
         
Contact:
Investor or Media Inquiries for Lexington Realty Trust:
Heather Gentry, Senior Vice President of Investor Relations
Lexington Realty Trust
Phone: (212) 692-7200 E-mail: hgentry@lxp.com

Source: Lexington Realty Trust