8.20
NYSE : LXP
September 24, 2018 Minimum 20 minute delay.
Change
$(0.11) (1.32)%
Volume
1,279,955
Market Cap ($M)
1,967.18
Email page PDF view Print view Email Alert Social media sharing
Press Release

Lexington Realty Trust Reports Fourth Quarter 2017 Results

Company Release - 2/27/2018 6:00 AM ET

NEW YORK, Feb. 27, 2018 (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, 2017.

Fourth Quarter 2017 Highlights

  • Generated Net Income attributable to common shareholders of $29.2 million, or $0.12 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $63.1 million, or $0.26 per diluted common share.
  • Acquired four industrial properties for an aggregate cost of $140.0 million.
  • Formed a joint venture which acquired a 151-acre parcel of developable land to pursue industrial build-to-suit opportunities.
  • Disposed of eight properties for an aggregate of $47.9 million.
  • Completed one million square feet of new leases and lease extensions with portfolio 98.9% leased at quarter end.
  • Collected $49.1 million in full satisfaction of a loan to a joint venture.
  • Financed an office property generating initial gross proceeds of $45.4 million.
  • Repaid $40.0 million on the revolving credit facility and retired an aggregate of $18.4 million of secured debt.
  • Increased the quarterly common share/unit dividend/distribution to $0.1775 per common share/unit.

Full Year 2017 Highlights

  • Generated Net Income attributable to common shareholders of $79.1 million, or $0.33 diluted common share.
  • Generated Adjusted Company FFO of $238.6 million, or $0.97 per diluted common share.
  • Acquired/completed 15 consolidated properties and the last building of the Lake Jackson, Texas build-to-suit project for an aggregate initial basis of $727.6 million.
  • Disposed of 34 consolidated properties for gross proceeds of $241.7 million.
  • Sold a non-consolidated interest in an office property for $6.2 million.
  • Completed 3.8 million square feet of new leases and lease extensions.
  • Retired an aggregate of $63.4 million of secured debt with a weighted-average fixed interest rate of 6.0% and obtained $45.4 million of secured debt with a weighted-average fixed interest rate of 5.2%.
  • Amended the revolving credit facility, together with the related term loans, increasing the capacity by $200.0 million.
  • Collected an aggregate of $138.0 million in full satisfaction of three loan investments.
  • Issued 1.6 million common shares at an average gross price of $10.89 per share under its ATM offering program.

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 finished off the year strong with fourth quarter Adjusted Company FFO of $0.26 per diluted common share. During 2017, we raised $386 million by monetizing our loan portfolio and disposing of 34 properties while adding 15 properties to our portfolio for $728 million.  As a result, we have substantially upgraded the quality of our holdings, shrunk our office footprint and simplified our operations which we expect to lead to lower operating costs. Additionally, strong leasing volume, along with non-core assets sales, brought our overall portfolio to approximately 99% leased at year end.

The guidance we have initiated today in the range of $0.95 to $0.98 per share suggests that our operating results in 2018 will be comparable to 2017 even as we anticipate lengthening our average debt maturity, providing concessions on early lease extensions and continuing with our capital recycling activities.  We intend to use proceeds from financings and dispositions to reinvest into industrial acquisitions and build-to-suit opportunities and to pay down debt.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2017, total gross revenues were $102.2 million, compared with total gross revenues of $95.3 million for the quarter ended December 31, 2016. The increase was primarily attributable to revenue generated from property acquisitions and new leases, partially offset by 2017 property sales and lease expirations.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2017, net income attributable to common shareholders was $29.2 million, or $0.12 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2016 of $14.4 million, or $0.06 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2017, Lexington generated Adjusted Company FFO of $63.1 million, or $0.26 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2016 of $59.7 million, or $0.24 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2017, 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 was paid 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 was paid February 15, 2018 to Series C Preferred Shareholders of record as of January 31, 2018.

Transaction Activity

ACQUISITIONS
Primary Tenant (Guarantor) Location Sq. Ft.
(Approx.)
 Property Type Initial Basis
($000)
 Approximate
Lease Term
(Yrs)
Caterpillar, Inc. Lafayette, IN 309,000  Industrial $17,450  7
Undisclosed(1) Romulus, MI 500,000  Industrial 38,893  15
Lipari Foods Operating Company, LLC Warren, MI 260,000  Industrial 46,955  15
Undisclosed(1) Winchester, VA 400,000  Industrial 36,700  14
    1,469,000    $139,998   
  1. Tenant is a domestic subsidiary of an international automaker.

Including fourth quarter acquisition activity, consolidated 2017 acquisition activity totaled $727.6 million at average GAAP and cash capitalization rates of 7.3% and 6.4%, respectively.

In December 2017, Lexington made an initial contribution of $5.8 million for a 90% interest in a newly-formed joint venture with a developer, which will pursue industrial build-to-suit opportunities. The joint venture acquired a parcel of developable land totaling 151 acres in a submarket of Columbus, Ohio.

PROPERTY DISPOSITIONS  
Primary Tenant Location Property Type Gross Disposition Price
($000)
 Annualized
Net Income(1)
($000)
 Annualized NOI(1) ($000) Month of Disposition %
Leased
National-Louis University(2) Lisle, IL Office $9,120  $222  $1,813  October 100%
Vacant High Point, NC Multi-Tenant Industrial 10,000  508  1,134  October 0%
Vacant Fisher, IN Multi-Tenant Office 9,000  (371) (371) October 0%
Vacant(3) Pine Bluff, AR Office 43  311  386  October 0%
Food Lion, LLC/Delhaize America, Inc. Staunton, VA Other 1,688  158  166  November 100%
Entergy Arkansas, Inc. Little Rock, AR Office 3,100  182  237  December 100%
Time Customer Service, Inc. Tampa, FL Office 13,700  722  1,128  December 100%
Toys "R" Us, Inc./Toys "R" Us-Delaware, Inc.(4) Tulsa, OK Other 1,233  3  106  December 100%
      $47,884  $1,735  $4,599     
  1. Quarterly period prior to sale, excluding impairment charges, annualized.
  2. Conveyed to lender in a foreclosure sale.
  3. Property was sold subject to a lease which expired October 31, 2017.
  4. Tenant has declared bankruptcy.

Including fourth quarter disposition activity, consolidated 2017 property disposition volume totaled $241.7 million at average GAAP and cash capitalization rates of 7.5% and 7.7%, respectively.

LOAN INVESTMENTS

Lexington collected $49.1 million in full satisfaction of a loan made to a joint venture that owns a property in Katy, Texas. The joint venture satisfied the loan with proceeds from a new third-party non-recourse mortgage financing in the original principal amount of $50.0 million, which bears interest at an annual rate of 5.1% and matures in December 2022.

Leasing Activity

During the fourth 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 HonoluluHI N/A MTM 09/2018 1,900 
1 Total office lease extensions
        1,900 
            
  Industrial        
1 StatesvilleNC Geodis Logistics LLC 12/2017 12/2020 639,800 
2 FranklinTN Essex Group, Inc. 12/2018 12/2023 289,330 
2 Total industrial lease extensions       929,130 
            
3 Total lease extensions       931,030 
            
  NEW LEASES         
            
  Location     Lease Expiration Date Sq. Ft.
  Office/Multi-Tenant        
1 Farmers BranchTX Home Point Financial Corporation   09/2025 64,788 
2 Farmers BranchTX BBVA Dallas Creation Center, Inc.   07/2028 33,028 
2 Total new office leases       97,816 
            
2 Total new leases       97,816 
            
5 TOTAL NEW AND EXTENDED LEASES       1,028,846 
  1. Leases greater than 10,000 square feet.

As of December 31, 2017, Lexington's portfolio was 98.9% leased.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter, Lexington obtained an aggregate of $45.4 million in non-recourse financing on an office property in Charlotte, North Carolina, consisting of a first mortgage loan and a mezzanine loan. The first mortgage loan in the original principal amount of $37.4 million has a 15-year term, bears interest at a fixed rate of 5.3% per annum and is interest only for the first 10 years. The mezzanine financing in the initial principal amount of $8.0 million has a five-year term, is interest only at a fixed rate of 5.0% per annum and may be increased to $12.0 million upon certain events.

Also, during the fourth quarter, Lexington repaid $40.0 million on its revolving credit facility and satisfied an aggregate of $18.4 million of non-recourse mortgage debt.

2018 EARNINGS GUIDANCE

Lexington estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2018 will be within an expected range of $0.76 to $0.79. Lexington estimates that its Adjusted Company FFO for the year ended December 31, 2018 will be within an expected range of $0.95 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 2017 CONFERENCE CALL

Lexington will host a conference call today, Tuesday, February 27, 2018, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 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 May 27, 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 10116720. 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, 2018, (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 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 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 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 (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 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 estimated 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 December 31, Twelve months ended December 31,
  2017  2016
  2017   2016 
Gross revenues:               
Rental$93,909  $87,261  $359,832  $398,065 
Tenant reimbursements8,260  8,065  31,809  31,431 
Total gross revenues102,169  95,326  391,641  429,496 
Expense applicable to revenues:       
Depreciation and amortization(45,262) (41,361) (173,968) (166,048)
Property operating(12,410) (12,512) (49,194) (47,355)
General and administrative(8,597) (8,072) (34,158) (31,104)
Litigation settlement    (2,050)  
Non-operating income5,381  3,543  10,378  13,043 
Interest and amortization expense(20,055) (19,459) (77,883) (88,032)
Debt satisfaction gains (charges), net3,818  (157) 6,196  (975)
Impairment charges and loan losses(1,419) (24,332) (44,996) (100,236)
Gains on sales of properties8,350  23,097  63,428  81,510 
Income before provision for income taxes and  equity in earnings (losses) of non-consolidated entities31,975  16,073  89,394  90,299 
Provision for income taxes(743) (340) (1,917) (1,439)
Equity in earnings (losses) of non-consolidated entities216  1,196  (848) 7,590 
Net income31,448  16,929  86,629  96,450 
Less net income attributable to noncontrolling interests(598) (928) (1,046) (826)
Net income attributable to Lexington Realty Trust shareholders30,850  16,001  85,583  95,624 
Dividends attributable to preferred shares – Series C(1,572) (1,572) (6,290) (6,290)
Allocation to participating securities(43) (38) (226) (225)
Net income attributable to common shareholders$29,235  $14,391  $79,067  $89,109 
Net income attributable to common shareholders – per common share basic$0.12  $0.06  $0.33  $0.38 
Weighted-average common shares outstanding – basic 238,131,814   235,066,967   237,758,408   233,633,058 
Net income attributable to common shareholders – per common share diluted$0.12  $0.06  $0.33  $0.37 
Weighted-average common shares outstanding – diluted 241,821,194   235,204,568   241,537,837   237,679,031 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31,
(Unaudited and in thousands, except share and per share data)

 2017 2016
Assets:  
Real estate, at cost$3,936,459  $3,533,172 
Real estate - intangible assets599,091  597,294 
Investments in real estate under construction  106,652 
 4,535,550  4,237,118 
Less: accumulated depreciation and amortization1,225,650  1,208,792 
Real estate, net3,309,900  3,028,326 
Assets held for sale2,827  23,808 
Cash and cash equivalents107,762  86,637 
Restricted cash4,394  31,142 
Investment in and advances to non-consolidated entities17,476  67,125 
Deferred expenses, net31,693  33,360 
Loans receivable, net  94,210 
Rent receivable – current5,450  7,516 
Rent receivable – deferred52,769  31,455 
Other assets20,749  37,888 
Total assets$3,553,020  $3,441,467 
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$689,810  $738,047 
Revolving credit facility borrowings160,000   
Term loans payable, net596,663  501,093 
Senior notes payable, net495,198  494,362 
Trust preferred securities, net127,196  127,096 
Dividends payable49,504  47,264 
Liabilities held for sale  191 
Accounts payable and other liabilities38,644  59,601 
Accrued interest payable5,378  6,704 
Deferred revenue - including below market leases, net33,182  39,895 
Prepaid rent16,610  14,723 
Total liabilities2,212,185  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, 240,689,081 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively24  24 
Additional paid-in-capital2,818,520  2,800,736 
Accumulated distributions in excess of net income(1,589,724) (1,500,966)
Accumulated other comprehensive income (loss)1,065  (1,033)
Total shareholders’ equity1,323,901  1,392,777 
Noncontrolling interests16,934  19,714 
Total equity1,340,835  1,412,491 
Total liabilities and equity$3,553,020  $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
December 31,
 Twelve Months Ended
December 31,
  2017 2016 2017 2016
EARNINGS PER SHARE:        
Basic:        
Net income attributable to common shareholders $29,235  $14,391  $79,067  $89,109 
          
Weighted-average number of common shares outstanding - basic 238,131,814  235,066,967  237,758,408  233,633,058 
         
Net income attributable to common shareholders - per common share basic $0.12  $0.06  $0.33  $0.38 
          
Diluted:         
Net income attributable to common shareholders - basic $29,235  $14,391  $79,067  $89,109 
Impact of assumed conversions 338    147  (159)
Income from continuing operations attributable to common shareholders $29,573  $14,391  $79,214  $88,950 
          
Weighted-average common shares outstanding - basic 238,131,814  235,066,967  237,758,408  233,633,058 
Effect of dilutive securities:        
Share options 57,731  137,601  86,285  230,352 
Operating Partnership Units 3,631,649    3,693,144  3,815,621 
Weighted-average common shares outstanding - diluted 241,821,194  235,204,568  241,537,837  237,679,031 
          
Net income attributable to common shareholders - per common share diluted $0.12  $0.06  $0.33  $0.37 


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,
  2017 2016 2017 2016
FUNDS FROM OPERATIONS:        
Basic and Diluted:        
Net income attributable to common shareholders $29,235  $14,391  $79,067  $89,109 
Adjustments:        
 Depreciation and amortization 44,050  39,840  168,683  159,363 
 Impairment charges - real estate, including non-consolidated entities 1,419  24,332  43,214  100,236 
 Noncontrolling interests - OP units 339  686  147  (159)
 Amortization of leasing commissions 1,212  1,520  5,285  6,684 
 Joint venture and noncontrolling interest adjustment 257  369  1,121  1,111 
 Gains on sales of properties, including non-consolidated entities (8,350) (23,729) (64,880) (87,520)
 Tax on sales of properties   2    52 
FFO available to common shareholders and unitholders - basic 68,162  57,411  232,637  268,876 
 Preferred dividends 1,572  1,572  6,290  6,290 
 Interest and amortization on 6.00% Convertible Notes       532 
 Amount allocated to participating securities 43  38  226  225 
FFO available to all equityholders and unitholders - diluted 69,777  59,021  239,153  275,923 
 Litigation reserve     2,050   
 Debt satisfaction (gains) charges, net, including non-consolidated entities  (3,796) 157  (6,174) 975 
 Impairment loss - loan receivable     5,294   
 Unearned contingent acquisition consideration (3,922)   (3,922)  
 Transaction costs 1,071  508  2,171  837 
Adjusted Company FFO available to all equityholders and unitholders - diluted 63,130  59,686  238,572  277,735 
         
FUNDS AVAILABLE FOR DISTRIBUTION:        
Adjustments:        
 Straight-line rents (7,232) (2,051) (19,784) (37,748)
 Lease incentives 513  417  1,969  1,673 
 Amortization of above/below market leases 364  530  1,544  2,057 
 Lease termination payments, net (253) (1,814) (690) (8,216)
 Non-cash interest, net 1,018  (387) 2,465  (1,913)
 Non-cash charges, net 2,119  2,092  8,318  8,998 
 Tenant improvements (1,136) (665) (11,203) (1,957)
 Lease costs (1,242) (393) (6,526) (6,558)
Company Funds Available for Distribution $57,281  $57,415  $214,665  $234,071 
          
Per Common Share and Unit Amounts        
Basic:        
 FFO $0.28  $0.24  $0.96  $1.13 
Diluted:        
 FFO $0.28  $0.24  $0.97  $1.13 
 Adjusted Company FFO $0.26  $0.24  $0.97  $1.14 
           
Weighted-Average Common Shares        
Basic:        
 Weighted-average common shares outstanding - basic EPS 238,131,814  235,066,967  237,758,408  233,633,058 
 Operating partnership units(1) 3,631,649  3,808,185  3,693,144  3,815,621 
 Weighted-average common shares outstanding - basic FFO 241,763,463  238,875,152  241,451,552  237,448,679 
           
Diluted:        
 Weighted-average common shares outstanding - diluted EPS 241,821,194  235,204,568  241,537,837  237,679,031 
 Unvested share-based payment awards 713,351  674,053  666,127  549,049 
 6.00% Convertible Guaranteed Notes       1,077,626 
 Operating partnership units(1)   3,808,185     
 Preferred shares - Series C 4,710,570  4,710,570  4,710,570  4,710,570 
 Weighted-average common shares outstanding - diluted FFO 247,245,115  244,397,376  246,914,534  244,016,276 

(1)   Includes OP units other than OP units held by Lexington.

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
2018 EARNINGS GUIDANCE   
 Twelve Months Ended
December 31, 2018
Estimated:Range
Net income attributable to common shareholders per diluted common share(1)$0.76  $0.79 
Depreciation and amortization0.68  0.68 
Impact of capital transactions(0.49) (0.49)
Estimated Adjusted Company FFO per diluted common share$0.95  $0.98 

(1)   Assumes all convertible securities are dilutive.

 

Source: Lexington Realty Trust