10.58
NYSE : LXP
November 21, 2017 Minimum 20 minute delay.
Change
$0.09 0.86%
Volume
881,487
Market Cap ($M)
2,546.10
Email page PDF view Print view Email Alert Social media sharing
Press Release

Lexington Realty Trust Reports Third Quarter 2017 Results and Announces Dividend Increase

Company Release - 11/7/2017 6:00 AM ET

NEW YORK, Nov. 07, 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 third quarter ended September 30, 2017.

Third Quarter 2017 Highlights

  • Generated Net Income attributable to common shareholders of $3.9 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 $60.7 million, or $0.25 per diluted common share.
  • Acquired four industrial properties for an aggregated cost of $266.1 million and completed the Opelika, AL industrial build-to-suit project for $37.3 million.
  • Disposed of 12 properties for $42.0 million.
  • Amended the revolving credit facility, together with the related term loans, increasing the capacity by $200.0 million.
  • Retired $25.2 million of secured debt.
  • Completed 1.2 million square feet of new leases and lease extensions with portfolio 97.9% leased at quarter end.

Subsequent Events

  • Increased the quarterly common share/unit dividend/distribution to $0.1775 per common share/unit.
  • Acquired an industrial property in Lafayette, IN for $17.5 million.
  • Disposed of four properties for $28.2 million.
  • Completed 700,000 square feet of new and extended leases.

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, “We are very pleased with our third quarter results, the continued success of our business plan execution, and today’s announcement on the dividend increase. During the quarter and subsequently, we acquired or completed over $320 million of industrial properties, sold approximately $70 million of non-core assets, and leased over 1.9 million square feet. The quality of our portfolio has significantly improved through our sustained efforts. Our portfolio has an increasing percentage of rents from industrial properties, is younger, has a longer weighted-average lease term, and has less near-term lease rollover.”

FINANCIAL RESULTS

Revenues

For the quarter ended September 30, 2017, total gross revenues were $97.7 million, compared with total gross revenues of $106.0 million for the quarter ended September 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, and lease expirations, partially offset by revenue generated from property acquisitions and new leases.

Net Income Attributable to Common Shareholders

For the quarter ended September 30, 2017, net income attributable to common shareholders was $3.9 million, or $0.02 per diluted share, compared with net loss attributable to common shareholders for the quarter ended September 30, 2016 of $27.0 million, or $0.12 per diluted share.

Adjusted Company FFO

For the quarter ended September 30, 2017, Lexington generated Adjusted Company FFO of $60.7 million, or $0.25 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2016 of $67.2 million, or $0.28 per diluted share. The decrease was primarily attributable to the items discussed above under “Revenues”.

Dividends/Distributions

As previously announced, during the third quarter of 2017, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2017 of $ 0.175 per common share/unit, which was paid on October 16, 2017 to common shareholders/unitholders of record as of September 29, 2017. Lexington also declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”), which is expected to be paid on November 15, 2017 to Series C Preferred Shareholders of record as of October 31, 2017.

Subsequent to quarter end, Lexington increased its quarterly common share/unit dividend/distribution to $0.1775 per common share/unit, which equates to an annualized dividend of $0.71 per common share/unit. The declared quarterly dividend/distribution will be payable on January 16, 2018 to common shareholders/unitholders of record as of December 29, 2017. In addition, Lexington declared a dividend of $0.8125 per share on its Series C Preferred, which is expected to be paid February 15, 2018 to Series C Preferred Shareholders of record as of January 31, 2018.

TRANSACTION ACTIVITY

ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Tenant (Guarantor) Location Sq. Ft. Property
Type
 Initial Basis ($000) Approximate
Lease
Term (Yrs)
Golden State Foods Corp. (Golden State Enterprises, Inc.) Opelika, AL 165,000  Industrial $37,269  25
Georgia Pacific Consumer Products LP (Georgia-Pacific LLC)(1) McDonough, GA 1,121,000  Industrial 66,700  10
McCormick & Company, Inc.(2) Byhalia, MS 616,000  Industrial 36,590  10
Kellogg Sales Company (Kellogg Company) Jackson, TN 1,062,000  Industrial 57,920  10
Nissan North America, Inc. Smyrna, TN 1,505,000  Industrial 104,890  10
    4,469,000    $303,369   
              
(1) Square footage includes a 220,000 square foot expansion that is expected to be completed in 2018.
(2) Initial Basis excludes a $133 thousand future tenant improvement allowance and $767 thousand of rent abatements, which were credited at closing.
 

The above properties were acquired/completed at aggregate weighted-average estimated GAAP and cash capitalization rates of 6.6% and 5.7%, respectively.

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  4Q 17 8.3% 7.3% 15
Romulus, MI 500,000  Industrial 39,330  4Q 17 6.5% 6.1% 15
Lafayette, IN 309,000  Industrial 17,450  4Q 17 7.0% 6.9% 7
  1,069,000    $103,780    7.4% 6.8%  
 
(1)   A $4.6 million letter of credit secures the obligation to purchase this property.
 


PROPERTY DISPOSITIONS(1)  
Primary Tenant (Guarantor) Location Property Type Gross
Disposition

Price
($000)
 Annualized
Net Income(2)
($000)
 Annualized
NOI(2)
($000)
 Month of
Disposition
 %
Leased
Food Lion, LLC/Delhaize America, Inc. Lexington, NC Other $1,412  $102  $138  July 100%
Vacant Rock Hill, SC Multi-Tenant - Office 6,250  (407) (388) July 0%
Bank of America, N.A. (Bank of America Corporation)(3) Various, GA Other 7,050  593  841  August 100%
Vacant(4) Memphis, TN Multi-Tenant - Office
 3,496  (533) (60) August 0%
3D Systems Corporation Rock Hill, SC Office 8,600  286  703  September 100%
Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.) Tempe, AZ Office 15,200  553  981  September 100%
      $42,008  $594  $2,215     
                     
(1)  In addition to the dispositions in the table, Lexington disposed of its Port Chester, NY property by its property owner subsidiary abandoning its leasehold interest in September 2017.
(2)  Quarterly period prior to sale, excluding impairment charges, annualized.
(3)  Seven properties.
(4)  Conveyed to lender in a foreclosure sale.
 


These dispositions resulted in aggregate gains on sales of $10.6 million and aggregate impairment charges of $5.2 million.


LEASING

During the third 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 RockawayNJ Atlantic Health System, Inc. 12/2027 12/2029 92,326 
2 Baton RougeLA New Cingular Wireless PCS, LLC 10/2017 10/2022 70,100 
3-7 HonoluluHI N/A 2017 2018-2021 6,196 
7 Total office lease extensions      168,622 
            
  Industrial        
1 ColumbusOH ODW Logistics, Inc. 06/2018 06/2020 772,450 
2 MarshallMI Tenneco Automotive Operating Company, Inc. 09/2018 09/2028 246,508 
2 Total industrial lease extensions       1,018,958 
            
9 Total lease extensions       1,187,580 
            


  NEW LEASES         
            
  Location     Lease Expiration Date Sq. Ft.
  Office/Multi-Tenant        
1-3 HonoluluHI N/A   2018-2020 952 
3 Total new office leases       952 
            
3 Total new leases       952 
            
 12  TOTAL NEW AND EXTENDED LEASES        1,188,532 
             
(1)  Leases greater than 10,000 square feet.
 

As of September 30, 2017, Lexington's portfolio was 97.9% leased, excluding any property subject to a mortgage loan in default.

BALANCE SHEET/CAPITAL MARKETS

In the third quarter of 2017, Lexington satisfied an aggregate $25.2 million of nonrecourse mortgage debt.

Additionally, in September 2017, Lexington amended its credit facility. The amendment, among other things, (a) increased the amount of the revolving credit line capacity by an aggregate of $105 million for an aggregate capacity of $505 million; (b) obligated the term loan lenders to make additional term loans in the aggregate amount of $95 million, consisting of a $50 million increase in the term loan due in 2020, for an aggregate outstanding amount of $300 million, and a $45 million increase in the term loan due in 2021, for an aggregate outstanding amount of $300 million; and (c) with lender approval, increases the maximum overall capacity of the facility to an aggregate of $2.01 billion.

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 $0.35 to $0.37. Lexington is narrowing its Adjusted Company FFO for the year ended December 31, 2017 to be within an expected range of $0.95 to $0.97 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

THIRD QUARTER 2017 CONFERENCE CALL

Lexington will host a conference call today, November 7, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 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 February 7, 2018, 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 10113450. 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.

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 

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 estimates and 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 September 30, Nine months ended September 30,
 2017 2016 2017 2016
Gross revenues:       
Rental$89,704  $98,602  $265,923  $310,804 
Tenant reimbursements7,985  7,379  23,549  23,366 
Total gross revenues97,689  105,981  289,472  334,170 
Expense applicable to revenues:       
Depreciation and amortization(43,495) (40,288) (128,706) (124,687)
Property operating(11,694) (11,472) (36,784) (34,843)
General and administrative(7,963) (7,510) (25,561) (23,032)
Litigation reserve(2,050)   (2,050)  
Non-operating income1,005  3,080  4,997  9,500 
Interest and amortization expense(18,887) (23,001) (57,828) (68,573)
Debt satisfaction gains (charges), net2,424  2,538  2,378  (818)
Impairment charges and loan loss(21,986) (72,890) (43,577) (75,904)
Gains on sales of properties10,645  16,072  55,078  58,413 
Income (loss) before provision for income taxes and equity in earnings (losses) of non-consolidated entities5,688  (27,490) 57,419  74,226 
Provision for income taxes(375) (462) (1,174) (1,099)
Equity in earnings (losses) of non-consolidated entities283  340  (1,064) 6,394 
Net income (loss)5,596  (27,612) 55,181  79,521 
Less net (income) loss attributable to noncontrolling interests(55) 2,260  (448) 102 
Net income (loss) attributable to Lexington Realty Trust shareholders5,541  (25,352) 54,733  79,623 
Dividends attributable to preferred shares – Series C(1,573) (1,573) (4,718) (4,718)
Allocation to participating securities(52) (50) (183) (187)
Net income (loss) attributable to common shareholders$3,916  $(26,975) $49,832  $74,718 
        
Net income (loss) attributable to common shareholders - per common share basic$0.02  $(0.12) $0.21  $0.32 
Weighted-average common shares outstanding – basic237,989,098  234,207,396  237,632,572  233,151,600 
        
Net income (loss) attributable to common shareholders - per common share diluted$0.02  $(0.12) $0.21  $0.31 
Weighted-average common shares outstanding – diluted241,702,715  234,207,396  241,442,227  237,215,883 
            


 
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
    
 September 30, 2017 December 31, 2016
Assets:   
Real estate, at cost$3,837,705  $3,533,172 
Real estate - intangible assets595,904  597,294 
Investments in real estate under construction  106,652 
 4,433,609  4,237,118 
Less: accumulated depreciation and amortization1,200,814  1,208,792 
Real estate, net3,232,795  3,028,326 
Assets held for sale8,638  23,808 
Cash and cash equivalents140,545  86,637 
Restricted cash34,946  31,142 
Investment in and advances to non-consolidated entities60,683  67,125 
Deferred expenses, net32,426  33,360 
Loans receivable, net  94,210 
Rent receivable – current6,388  7,516 
Rent receivable – deferred46,611  31,455 
Other assets32,124  37,888 
Total assets$3,595,156  $3,441,467 
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$670,345  $738,047 
Revolving credit facility borrowings200,000   
Term loans payable, net596,369  501,093 
Senior notes payable, net494,989  494,362 
Trust preferred securities, net127,171  127,096 
Dividends payable48,494  47,264 
Liabilities held for sale442  191 
Accounts payable and other liabilities36,728  59,601 
Accrued interest payable11,683  6,704 
Deferred revenue - including below market leases, net34,069  39,895 
Prepaid rent15,371  14,723 
Total liabilities2,235,661  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, 240,643,775 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively24  24 
Additional paid-in-capital2,824,379  2,800,736 
Accumulated distributions in excess of net income(1,576,459) (1,500,966)
Accumulated other comprehensive income (loss)510  (1,033)
Total shareholders’ equity1,342,470  1,392,777 
Noncontrolling interests17,025  19,714 
Total equity1,359,495  1,412,491 
Total liabilities and equity$3,595,156  $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 Nine Months Ended
 

 
  September 30, September 30,
   2017 2016 2017 2016
EARNINGS PER SHARE:        
         
Basic:        
Net income (loss) attributable to common shareholders $3,916  $(26,975) $49,832  $74,718 
          
Weighted-average number of common shares outstanding - basic 237,989,098  234,207,396  237,632,572  233,151,600 
         
Net income (loss) attributable to common shareholders - per common share basic $0.02  $(0.12) $0.21  $0.32 
          
Diluted:         
Net income (loss) attributable to common shareholders - basic $3,916  $(26,975) $49,832  $74,718 
Impact of assumed conversions (173)   (192) (845)
Net income (loss) attributable to common shareholders $3,743  $(26,975) $49,640  $73,873 
          
Weighted-average common shares outstanding - basic 237,989,098  234,207,396  237,632,572  233,151,600 
Effect of dilutive securities:        
Share options 66,748    95,788  246,166 
Operating Partnership Units 3,646,869    3,713,867  3,818,117 
Weighted-average common shares outstanding - diluted 241,702,715  234,207,396  241,442,227  237,215,883 
          
Net income (loss) attributable to common shareholders - per common share diluted $0.02  $(0.12) 0.21  $0.31 
                


 
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
September 30,
 Nine Months Ended
September 30,
   2017 2016 2017 2016
FUNDS FROM OPERATIONS:      
Basic and Diluted:        
Net income (loss) attributable to common shareholders $3,916  $(26,975) $49,832  $74,718 
Adjustments:        
 Depreciation and amortization 42,015  38,642  124,633  119,523 
 Impairment charges - real estate, including non-consolidated entities 21,986  72,890  41,795  75,904 
 Noncontrolling interests - OP units (173) (2,507) (192) (845)
 Amortization of leasing commissions 1,480  1,646  4,073  5,164 
 Joint venture and noncontrolling interest adjustment 259  284  864  742 
 Gains on sales of properties, including non-consolidated entities (10,645) (16,072) (56,530) (63,791)
 Tax on sales of properties       50 
FFO available to common shareholders and unitholders - basic 58,838  67,908  164,475  211,465 
 Preferred dividends 1,573  1,573  4,718  4,718 
 Interest and amortization on 6.00% Convertible Guaranteed Notes   47    532 
 Amount allocated to participating securities 52  50  183  187 
FFO available to all equityholders and unitholders - diluted 60,463  69,578  169,376  216,902 
 Litigation reserve 2,050    2,050   
 Debt satisfaction (gains) charges, net (2,424) (2,538) (2,378) 818 
 Loan loss     5,294   
 Transaction costs 612  115  1,100  329 
Adjusted Company FFO available to all equityholders and unitholders - diluted 60,701  67,155  175,442  218,049 
         
FUNDS AVAILABLE FOR DISTRIBUTION:        
Adjustments:        
 Straight-line adjustments (4,002) (11,317) (12,552) (35,697)
 Lease incentives 515  414  1,456  1,256 
 Amortization of above/below market leases 320  572  1,180  1,527 
 Lease termination payments, net (142) (1,839) (437) (6,402)
 Non-cash interest, net 795  (512) 1,447  (1,526)
 Non-cash charges, net 2,066  2,296  6,199  6,906 
 Tenant improvements (4,072) (1,173) (10,067) (1,292)
 Lease costs (2,228) (1,458) (5,284) (6,165)
Company Funds Available for Distribution $53,953  $54,138  $157,384  $176,656 
          
Per Common Share and Unit Amounts        
Basic:        
 FFO $0.24  $0.29  $0.68  $0.89 
           
Diluted:        
 FFO $0.24  $0.29  $0.69  $0.89 
 Adjusted Company FFO $0.25  $0.28  $0.71  $0.89 
           
Basic:        
 Weighted-average common shares outstanding - basic EPS 237,989,098  234,207,396  237,632,572  233,151,600 
 Operating partnership units(1) 3,646,869  3,815,386  3,713,867  3,818,117 
 Weighted-average common shares outstanding - basic FFO 241,635,967  238,022,782  241,346,439  236,969,717 
           
Diluted:        
 Weighted-average common shares outstanding - diluted EPS 241,702,715  234,207,396  241,442,227  237,215,883 
 Operating partnership units(1)   3,815,386     
 6% Convertible Guaranteed Notes   508,912    1,439,456 
 Unvested share-based payment awards 655,228  570,260  650,348  478,329 
 Share Options   238,395     
 Preferred shares - Series C 4,710,570  4,710,570  4,710,570  4,710,570 
 Weighted-average common shares outstanding - diluted FFO 247,068,513  244,050,919  246,803,145  243,844,238 
              
 (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)$0.35  $0.37 
Depreciation and amortization0.70  0.70 
Impact of capital transactions(0.10) (0.10)
Estimated Adjusted Company FFO per diluted common share$0.95  $0.97 
  
(1)  Assumes all convertible securities are dilutive. 
  


Source: Lexington Realty Trust