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Press Release

Lexington Realty Trust Reports Fourth Quarter 2016 Results

Company Release - 3/1/2017 6:00 AM ET

NEW YORK, March 01, 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 fourth quarter and year ended December 31, 2016.

Fourth Quarter 2016 Highlights

  • Generated Net Income attributable to common shareholders of $14.4 million, or $0.06 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $59.7 million, or $0.24 per diluted common share.
  • Acquired two industrial properties for an aggregate cost of $97.5 million and completed three of the four buildings of the Lake Jackson, TX build-to-suit project at an estimated cost of $78.5 million.
  • Disposed of nine office properties for $87.1 million.
  • Invested $25.4 million in on-going build-to-suit projects.
  • Committed to acquire two industrial properties in 2017 for an aggregate cost of $71.7 million.
  • Completed 658,000 square feet of new leases and lease extensions with overall portfolio 96.0% leased at quarter end.

Full Year 2016 Highlights

  • Generated Net Income attributable to common shareholders of $89.1 million, or $0.37 per diluted common share.
  • Generated Adjusted Company FFO of $277.7 million, or $1.14 per diluted common share, inclusive of $0.03 per diluted common share related to the Westlake, Texas termination payment received and fully included as income in the second quarter of 2016.
  • Acquired/completed six consolidated properties and one nonconsolidated property for an aggregate initial basis of $390.1 million.
  • Disposed of 28 consolidated properties for gross proceeds of $663.0 million.
  • Completed 4.7 million square feet of new leases and lease extensions.
  • Retired $374.1 million of secured debt, which had a weighted-average fixed interest rate of 5.0% and a weighted-average term to maturity of 6.6 years and obtained $254.7 million of secured debt with a weighted-average fixed interest rate of 4.3% and a weighted-average term to maturity of 19.1 years.
  • Repaid all $177.0 million of borrowings outstanding under its $400.0 million unsecured revolving credit facility.
  • Repurchased 1.2 million common shares at an average price of $7.56 per share and issued 1.0 million common shares at an average price of $10.75 per share under its At-The-Market (“ATM”) offering program.

Subsequent Events

  • Disposed of six properties for aggregate gross proceeds of $88.9 million.
  • Acquired two industrial properties for an aggregate purchase price of $50.6 million.
  • Issued 1.6 million common shares at an average gross price of $10.89 per share under its ATM offering program.
  • Completed the last building at the Lake Jackson, Texas build-to-suit project.
  • Sold the tenant-in-common interest in the Oklahoma City, Oklahoma property for $6.3 million and collected $8.5 million in full satisfaction of the loan receivable owed from the other tenant-in-common.
  • Sold the Kennewick, Washington loan receivable for $80.4 million.

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 “Positive fourth quarter activity rounded out a highly successful year for Lexington. Sales during the quarter brought total 2016 consolidated disposition volume to $663 million at GAAP and cash cap rates of 10.2% and 5.1%, respectively. We used the proceeds to complete $390 million of new investment activity at favorable spreads and to improve our balance sheet, which brought our leverage to 5.2x net debt to Adjusted EBITDA, its lowest level in recent years. Our investments were more focused in the industrial area during the quarter, and this represents a trend that is expected to continue in 2017.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2016, total gross revenues were $95.3 million, compared with total gross revenues of $106.6  million for the quarter ended December 31, 2015. The decrease was primarily attributable to 2016 property sales, particularly the sale of the New York City land investments, and lease expirations, partially offset by revenue generated from property acquisitions and new leases.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2016, net income attributable to common shareholders was $14.4 million, or $0.06 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2015 of $33.2 million, or $0.14 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2016, Lexington generated Adjusted Company FFO of $59.7 million, or $0.24 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2015 of $69.6 million, or $0.29 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2016, Lexington declared a regular quarterly common share dividend/distribution for the quarter ended December 31, 2016 of $0.175 per common share/unit, which was paid on January 17, 2017 to common shareholders/unitholders of record as of December 30, 2016. Lexington previously announced and declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred Shares”), which was paid on February 15, 2017 to Series C Preferred Shareholders of record as of January 31, 2017.

Transaction Activity

ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Primary Tenant
(Guarantor)
 Location Sq. Ft. Property
Type
 Initial
Basis
($000)
 Estimated
Annual
GAAP
Rent
($000)
 Initial
Annualized
Cash Rent
($000)
 Estimated
GAAP
Yield
 Initial
Cash
Yield
 Approximate
Lease

Term
(Yrs)
Aryzta, LLC (Aryzta AG) Romeoville, IL 188,000  Industrial $52,700  $3,544  $3,301  6.7% 6.3% 15
Amazon.com.dedc, LLC (Amazon.com Inc.) Edwardsville, IL 770,000  Industrial 44,800  2,682  2,501  6.0% 5.6% 10
The Dow Chemical Company(1) Lake Jackson, TX 389,000  Office 78,484  8,673  7,108  9.5% 7.7% 20
    1,347,000    $175,984  $14,899  $12,910  7.8% 6.7%  
                            
1. Three of four buildings completed in Q4 2016. Estimated GAAP and cash yields reflect estimated costs of completion of final building and developer partner payout of all four buildings, as set forth in the table immediately below.


ON-GOING BUILD-TO-SUIT PROJECTS  
Location Sq. Ft. Property
Type
 Maximum
Commitment/Estimated
Completion Cost
($000)
 GAAP Investment
Balance as of 
12/31/2016 ($000)(1)
 Estimated
Completion
Date
 Approximate
Lease
Term
(Yrs)
Lake Jackson, TX(2) 275,000  Office $78,447  $55,960  1Q 17 20
Charlotte, NC 201,000  Office 62,445  40,443  2Q 17 15
Opelika, AL 165,000  Industrial 37,000  10,249  2Q 17 25
  641,000    $177,892  $106,652     
                  
1. During the quarter, Lexington funded $25.4 million of the projected costs of the above projects, including the completed Lake Jackson buildings.
2. Total project is 664,000 square feet. 389,000 square feet completed in Q4 2016 as set forth in the table above.


FORWARD PURCHASE COMMITMENTS
Location Sq. Ft. Property
Type
 Maximum
Acquisition Cost
($000)
 Estimated
Acquisition
Date
 Estimated
GAAP

Yield
 Estimated
Initial
Cash Yield
 Approximate
Lease
Term
(Yrs)
Grand Prairie, TX 215,000  Industrial $24,725  2Q 17 7.6% 6.2% 20
Warren, MI(1) 260,000  Industrial 47,000  3Q 17 8.3% 7.3% 15
  475,000    $71,725    8.0% 6.9%  
                    
1. Lexington provided a $4.6 million letter of credit to secure its obligation to purchase this property.


PROPERTY DISPOSITIONS
Primary Tenant Location Property
Type
 Gross
Disposition
Price ($000)
 Annualized Net
Income(1)(2)
($000)
 Annualized
NOI(1) ($000)
 Month of
Disposition
Vacant Canonsburg, PA Office $8,250  $(330) $(330) October
Avnet, Inc. Phoenix, AZ Office 32,000  1,276  1,949  October
Bank of America, National Association Los Angeles, CA Office 19,200  1,014  1,107  November
BluePearl Holdings, LLC(3) Tampa, FL/Houston TX Office 15,177  566  946  November
Nextel of Texas, Inc.(4) Temple, TX Office 7,463  (366) 800  December
Vacant Westmont, IL Office 5,000  (682) (635) December
      $87,090  $1,478  $3,837   
                   
1. Quarterly period prior to sale annualized.
2. Excludes impairment charges recognized.
3. Includes four properties.
4. Conveyed to lender in a foreclosure sale.
 

LOAN INVESTMENTS

Lexington collected an aggregate $1.6 million in full satisfaction of three loan investments secured by portfolios of single-tenant retail properties.

Leasing Activity

During the fourth quarter of 2016, 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 San AntonioTX United Healthcare Services, Inc. 11/2017 11/2024 142,500 
2-3 VariousHI/PA N/A 2016-2017 2019-2020 1,521 
3 Total office lease extensions      144,021 
            
  Industrial/Multi-Tenant        
1 PlymouthIN Bay Valley Foods, LLC 12/2016 12/2018 300,500 
2 AntiochTN Wirtgen America, Inc. 12/2016 12/2019 73,500 
2 Total industrial/multi-tenant lease extensions       374,000 
            
  Other        
1 ChattanoogaTN BI-LO LLC/K-VA-T Food Stores, Inc. 06/2017 06/2019 42,130 
1 Total other lease extensions       42,130 
            
6 Total lease extensions       560,151 
            
  NEW LEASES         
            
  Location     Lease
Expiration Date
 Sq. Ft.
  Office/Multi-Tenant        
1 Farmers BranchTX Brain Synergy Institute, LLC d/b/a Cerebrum Health Centers   09/2024 12,707 
2 RichmondVA N/A   02/2027 8,503 
3 HamptonVA Wisconsin Physicians Service Insurance Corporation(2)   08/2023 71,073 
4-9 Honolulu/Farmers BranchHI/TX N/A   2017-2022 5,436 
9 Total new office leases       97,719 
            
9 Total new leases       97,719 
            
15 TOTAL NEW AND EXTENDED LEASES       657,870 
            
1. Leases greater than 10,000 square feet. 
2. Lease commences January 1, 2020 following expiration of existing tenant's lease. 

As of December 31, 2016, Lexington's portfolio was 96.0% leased, excluding any property subject to a mortgage in default.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter of 2016, Lexington issued 976,109 common shares at an average price of $10.75 per share under its ATM offering program.

During the fourth quarter of 2016, Lexington satisfied $14.0 million of secured debt with a weighted-average interest rate of 5.2%.

2017 EARNINGS GUIDANCE

Lexington 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 $0.64 to $0.67. Lexington estimates 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.

FOURTH QUARTER 2016 CONFERENCE CALL

Lexington will host a conference call today, Wednesday, March 1, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 2016. 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 June 1, 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 10100256. 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 and debt 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 and its subsidiaries 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, but not limited to, 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 on the terms described herein or at all, (4) the failure to continue to qualify as a REIT, (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 has filed 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 revise those forward-looking statements 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. The assets and credit of each special purpose entity with a property subject to a mortgage loan (a “property owner subsidiary”) are not available to creditors to satisfy the debt or 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 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 Press 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 rent 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) 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 that of 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 December 31, Twelve months ended December 31,
 2016 2015 2016 2015
Gross revenues:       
Rental$87,261  $98,934  $398,065  $399,485 
Tenant reimbursements8,065  7,692  31,431  31,354 
Total gross revenues95,326  106,626  429,496  430,839 
Expense applicable to revenues:       
Depreciation and amortization(41,361) (41,403) (166,048) (163,198)
Property operating(12,512) (14,055) (47,355) (59,655)
General and administrative(8,072) (6,750) (31,104) (29,276)
Non-operating income3,543  3,216  13,043  11,429 
Interest and amortization expense(19,459) (21,466) (88,032) (89,739)
Debt satisfaction gains (charges), net(157) 11,397  (975) 25,150 
Impairment charges(24,332) (2,762) (100,236) (36,832)
Gains on sales of properties23,097    81,510  23,307 
Income before provision for income taxes, equity in earnings of non-consolidated entities and discontinued operations16,073  34,803  90,299  112,025 
Provision for income taxes(340) (104) (1,439) (568)
Equity in earnings of non-consolidated entities1,196  814  7,590  1,752 
Income from continuing operations16,929  35,513  96,450  113,209 
Discontinued operations:       
Income from discontinued operations      109 
Provision for income taxes      (4)
Gains on sales of properties      1,577 
Total discontinued operations      1,682 
Net income16,929  35,513  96,450  114,891 
Less net income attributable to noncontrolling interests(928) (663) (826) (3,188)
Net income attributable to Lexington Realty Trust shareholders16,001  34,850  95,624  111,703 
Dividends attributable to preferred shares – Series C(1,572) (1,572) (6,290) (6,290)
Allocation to participating securities(38) (49) (225) (313)
Net income attributable to common shareholders$14,391  $33,229  $89,109  $105,100 
Income per common share – basic:       
Income from continuing operations$0.06  $0.14  $0.38  $0.44 
Income from discontinued operations      0.01 
Net income attributable to common shareholders$0.06  $0.14  $0.38  $0.45 
Weighted-average common shares outstanding – basic235,066,967  233,448,100  233,633,058  233,455,056 
Income per common share – diluted:       
Income from continuing operations$0.06  $0.14  $0.37  $0.44 
Income from discontinued operations      0.01 
Net income attributable to common shareholders$0.06  $0.14  $0.37  $0.45 
Weighted-average common shares outstanding – diluted235,204,568  239,411,055  237,679,031  233,751,775 
Amounts attributable to common shareholders:       
Income from continuing operations$14,391  $33,229  $89,109  $103,418 
Income from discontinued operations      1,682 
Net income attributable to common shareholders$14,391  $33,229  $89,109  $105,100 
                


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31,
(Unaudited and in thousands, except share and per share data)
 
 2016 2015
Assets:   
Real estate, at cost$3,533,172  $3,789,711 
Real estate - intangible assets597,294  692,778 
Investments in real estate under construction106,652  95,402 
 4,237,118  4,577,891 
Less: accumulated depreciation and amortization1,208,792  1,179,969 
Real estate, net3,028,326  3,397,922 
Assets held for sale23,808  24,425 
Cash and cash equivalents86,637  93,249 
Restricted cash31,142  10,637 
Investment in and advances to non-consolidated entities67,125  31,054 
Deferred expenses, net33,360  42,000 
Loans receivable, net94,210  95,871 
Rent receivable – current7,516  7,193 
Rent receivable – deferred31,455  87,547 
Other assets37,888  18,505 
Total assets$3,441,467  $3,808,403 
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$738,047  $872,643 
Revolving credit facility borrowings  177,000 
Term loans payable, net501,093  500,076 
Senior notes payable, net494,362  493,526 
Convertible notes payable, net  12,126 
Trust preferred securities, net127,096  126,996 
Dividends payable47,264  45,440 
Liabilities held for sale191  8,405 
Accounts payable and other liabilities59,601  41,479 
Accrued interest payable6,704  8,851 
Deferred revenue - including below market leases, net39,895  42,524 
Prepaid rent14,723  16,806 
Total liabilities2,028,976  2,345,872 
    
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, 238,037,177 and 234,575,225 shares issued and outstanding in 2016 and 2015, respectively24  23 
Additional paid-in-capital2,800,736  2,776,837 
Accumulated distributions in excess of net income(1,500,966) (1,428,908)
Accumulated other comprehensive loss(1,033) (1,939)
Total shareholders’ equity1,392,777  1,440,029 
Noncontrolling interests19,714  22,502 
Total equity1,412,491  1,462,531 
Total liabilities and equity$3,441,467  $3,808,403 
        


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
(Unaudited and in thousands, except share and per share data)
 
   Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2016 2015 2016 2015
EARNINGS PER SHARE:        
         
Basic:        
Income from continuing operations attributable to common shareholders$14,391 $33,229 $89,109 $103,418 
Income from discontinued operations attributable to common shareholders       1,682 
Net income attributable to common shareholders$14,391 $33,229 $89,109 $105,100 
          
Weighted-average number of common shares outstanding 235,066,967  233,448,100  233,633,058  233,455,056 
         
Income per common share:        
Income from continuing operations$0.06 $0.14 $0.38 $0.44 
Income from discontinued operations       0.01 
Net income attributable to common shareholders$0.06 $0.14 $0.38 $0.45 
          
Diluted:         
Income from continuing operations attributable to common shareholders - basic$14,391 $33,229 $89,109 $103,418 
Impact of assumed conversions   711  (159)  
Income from continuing operations attributable to common shareholders 14,391  33,940  88,950  103,418 
Income from discontinued operations attributable to common shareholders - basic       1,682 
Impact of assumed conversions        
Income from discontinued operations attributable to common shareholders       1,682 
Net income attributable to common shareholders$14,391 $33,940 $88,950 $105,100 
          
Weighted-average common shares outstanding - basic 235,066,967  233,448,100  233,633,058  233,455,056 
Effect of dilutive securities:        
Share options 137,601  220,125  230,352  296,719 
Operating Partnership Units   3,834,962  3,815,621   
6.00% Convertible Guaranteed Notes   1,907,868     
Weighted-average common shares outstanding - diluted 235,204,568  239,411,055  237,679,031  233,751,775 
          
Income per common share:        
Income from continuing operations$0.06 $0.14 $0.37 $0.44 
Income from discontinued operations       0.01 
Net income attributable to common shareholders$0.06 $0.14 $0.37 $0.45 
             


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
        
   Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2016 2015 2016 2015
FUNDS FROM OPERATIONS:      
Basic and Diluted:        
Net income attributable to common shareholders $14,391  $33,229  $89,109  $105,100 
Adjustments:        
 Depreciation and amortization 39,840  39,708  159,363  157,644 
 Impairment charges - real estate 24,332  2,762  100,236  36,832 
 Noncontrolling interests - OP units 686  457  (159) 1,999 
 Amortization of leasing commissions 1,520  1,695  6,684  5,554 
 Joint venture and noncontrolling interest adjustment 369  453  1,111  1,788 
 Gains on sales of properties, including non-consolidated entities (23,729) (487) (87,520) (25,371)
 Tax on sales of properties 2    52   
FFO available to common shareholders and unitholders - basic 57,411  77,817  268,876  283,546 
 Preferred dividends 1,572  1,572  6,290  6,290 
 Interest and amortization on 6.00% Convertible Notes   253  532  1,048 
 Amount allocated to participating securities 38  49  225  313 
FFO available to all equityholders and unitholders - diluted 59,021  79,691  275,923  291,197 
 Debt satisfaction (gains) charges, net, including non-consolidated entities 157  (11,397) 975  (25,086)
 Transaction costs/Other 508  1,285  837  1,864 
Adjusted Company FFO available to all equityholders and unitholders - diluted 59,686  69,579  277,735  267,975 
         
FUNDS AVAILABLE FOR DISTRIBUTION:        
Adjustments:        
 Straight-line rents (2,051) (12,460) (37,748) (47,702)
 Lease incentives 417  387  1,673  1,544 
 Amortization of above/below market leases 530  418  2,057  261 
 Lease termination payments, net (1,814) 2,420  (8,216) 3,086 
 Non-cash interest, net (387) (638) (1,913) (118)
 Non-cash charges, net 2,092  2,213  8,998  8,821 
 Tenant improvements (665) (7,242) (1,957) (20,426)
 Lease costs (393) (2,439) (6,558) (6,681)
Company Funds Available for Distribution $57,415  $52,238  $234,071  $206,760 
          
Per Common Share and Unit Amounts        
Basic:        
 FFO $0.24  $0.33  $1.13  $1.19 
           
Diluted:        
 FFO $0.24  $0.33  $1.13  $1.19 
 Adjusted Company FFO $0.24  $0.29  $1.14  $1.10 
           
Weighted-Average Common Shares        
Basic:        
 Weighted-average common shares outstanding - basic EPS 235,066,967  233,448,100  233,633,058  233,455,056 
 Operating partnership units(1) 3,808,185  3,834,962  3,815,621  3,848,434 
 Weighted-average common shares outstanding - basic FFO 238,875,152  237,283,062  237,448,679  237,303,490 
           
Diluted:        
 Weighted-average common shares outstanding - diluted EPS 235,204,568  239,411,055  237,679,031  233,751,775 
 Unvested share-based payment awards 674,053    549,049  3,326 
 6.00% Convertible Guaranteed Notes     1,077,626  2,041,629 
 Operating partnership units(1) 3,808,185      3,848,434 
 Preferred shares - Series C 4,710,570  4,710,570  4,710,570  4,710,570 
 Weighted-average common shares outstanding - diluted FFO 244,397,376  244,121,625  244,016,276  244,355,734 
              
(1) Includes OP units other than OP units held by Lexington. 


 
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)$0.64  $0.67 
Depreciation and amortization0.67  0.68 
Impact of capital transactions(0.37) (0.37)
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