NEW YORK, Nov. 5, 2013 (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, 2013.
Third Quarter 2013 Highlights
- Generated Company Funds From Operations, as adjusted ("Company FFO, as adjusted"), of $56.1 million, or $0.25 per diluted common share.
- Executed 2.7 million square feet of new and extended leases, raising renewal rents by 4.3% and overall portfolio occupancy to 98.1%.
- Invested $46.5 million in current build-to-suit projects and other investments and entered into an agreement to fund a new build-to-suit project of $98.6 million.
- Produced $22.4 million of gross proceeds from dispositions.
Subsequent to Quarter End Highlights
- Increased our quarterly common share dividend by 10% to $0.165 per share for the quarter ended December 31, 2013.
- Acquired three land parcels in New York, New York which are net leased for a 99-year term for an aggregate $302.0 million and arranged, on a non-binding basis, to obtain a 13-year, $213.5 million non-recourse secured financing at a fixed interest rate of 4.66%.
- Agreed to lend $85.0 million for a build-to-suit construction project at a fixed interest rate of 9.0%.
- Issued 11.5 million common shares in a public offering raising gross proceeds of $126.3 million.
T. Wilson Eglin, President and Chief Executive Officer of Lexington, stated, "Our portfolio continues to perform well as evidenced by our robust leasing volume and high occupancy. We believe recent investment activity, together with year-to-date leasing progress and refinancing activity have created good visibility with respect to projected growth in funds from operations per share for the year ahead. These were important considerations in the Board's recent decision to increase our quarterly common share dividend by 10%."
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2013, total gross revenues were $97.9 million, compared with total gross revenues of $85.0 million for the quarter ended September 30, 2012. The increase is primarily due to property acquisitions.
Company FFO, As Adjusted
For the quarter ended September 30, 2013, Lexington generated Company FFO, as adjusted, of $56.1 million, or $0.25 per diluted share, compared to Company FFO, as adjusted, for the quarter ended September 30, 2012 of $45.5 million, or $0.25 per diluted share. The calculation of Company FFO, as adjusted, and a reconciliation to net income attributable to Lexington Realty Trust shareholders is included later in this press release.
Net Income Attributable to Common Shareholders
For the quarter ended September 30, 2013, net income attributable to common shareholders was $3.0 million, or $0.01 per diluted share, compared with net income attributable to common shareholders for the quarter ended September 30, 2012 of $169.0 million, or $0.96 per diluted share. The decrease in net income is primarily related to a $167.9 million gain on the acquisition of the remaining interest in Net Lease Strategic Assets Fund L.P. recognized in the quarter ended September 30, 2012.
Common Share/Unit Dividend/Distribution
Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2013 of $0.15 per common share/unit, which was paid on October 15, 2013 to common shareholders/unitholders of record as of September 30, 2013, and a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock ("Series C Preferred Shares"), which will be paid on November 15, 2013 to Series C Preferred Shareholders of record as of October 31, 2013.
Subsequent to quarter end, Lexington declared a regular quarterly dividend/distribution for the quarter ended December 31, 2013, of $0.165 per common share/unit, a 10% increase from the prior quarterly dividend of $0.15 per common share/unit. This dividend/distribution is payable on January 15, 2014, to common shareholders/unitholders of record as of December 31, 2013. This dividend/distribution equates to an annualized dividend level of $0.66 per common share/unit. In addition, Lexington declared a dividend of $0.8125 per share on its Series C Preferred Shares. The Series C Preferred Share dividend is payable on or about February 18, 2014 to Series C Preferred Shareholders of record as of January 31, 2014.
OPERATING ACTIVITIES
Leasing
During the third quarter of 2013, Lexington executed 11 new and extended leases for 2.7 million square feet and ended the quarter with overall portfolio occupancy of 98.1%.
Capital Recycling
Dispositions
During the third quarter of 2013, Lexington disposed of its interests in four properties to unrelated third parties for a gross sales price of $22.4 million.
Investment Activity
Build-to-Suit Projects – Third Quarter Updates
Lexington entered into a build-to-suit arrangement to acquire and construct a 279,000 square foot, 16-floor office building and a parking garage in Richmond, Virginia. The maximum construction loan amount is $98.6 million and the purchase price is currently $94.4 million (8.0% initial cap rate). Upon completion of construction, a 15-year net lease with a single tenant for approximately 78% of the office building will commence. The balance of the office building is subject to a master lease with the developer, which has a term of two years from the completion of construction and provides the developer with the opportunity to re-lease such space in exchange for an increase in the purchase price equal to the initial annual rent divided by 14.72%.
In addition, Lexington continues to fund the construction of, and/or is under contract to acquire, the previously announced build-to-suit projects in (1) Rantoul, Illinois (8.0% initial cap rate), (2) Bingen, Washington (10.7% initial cap rate), (3) Las Vegas, Nevada (7.3% initial cap rate) and (4) Albany, Georgia (9.0% initial cap rate). The aggregate estimated cost of these five build-to-suit projects is approximately $197.2 million of which approximately $60.0 million was invested as of September 30, 2013. In addition, Lexington is committed to acquire upon its completion a property in Omaha, Nebraska for $39.1 million (7.1% initial cap rate). Lexington can give no assurance that any of the build-to-suit projects or other potential investments that are under commitment or contract or in process will be completed.
Joint Venture Investments – Third Quarter Updates
Lexington acquired the remaining interest in its Long Island City, New York industrial property that it did not already own for $8.9 million.
Lexington invested $5.0 million in a joint venture, which acquired the fee interest and the related office building improvements of a property in Baltimore, Maryland. Beginning in October 2015, Lexington has the right to require the redemption of its interest in the joint venture in exchange for a distribution of the fee interest, which is currently leased for a 99-year term to the joint venture.
Subsequent to Quarter End Investments
Lexington acquired a portfolio of three parcels of land in New York, New York consisting of an aggregate of 0.6 acres, which are net leased to tenants under non-cancellable 99-year leases. The aggregate purchase price was $302.0 million. The improvements on these parcels are owned by the tenants under Lexington leases and currently consist of three high-rise hotels built in 2010, which contain an aggregate of approximately 480,000 square feet, 103 floors and 1,179 guest rooms. The hotels are known as the DoubleTree by Hilton Hotel New York City - Financial District, the Sheraton Tribeca New York Hotel and the Element New York Times Square West. The aggregate initial annual rent under the leases is approximately $14.9 million, which represents approximately 4.93% of the aggregate purchase price. The rent under each lease increases by a minimum of 2.0% each year with further annual increases, not to exceed 3.0% per annum in the aggregate, at specified intervals based on the increase in the Consumer Price Index, or CPI. The total aggregate minimum rent (excluding any additional CPI increases) under the leases over the 99-year lease terms is approximately $4.5 billion. Each tenant has a purchase option that can be exercised at the end of the 25th, 50th and 75th lease year at a price that is equal to the greater of (1) the original purchase price plus a 7.5% return (inclusive of rent payments) for the holding period (compounded monthly) and (2) a specified floor price, which in each case is in excess of the allocated purchase price, and is $305.0 million in the aggregate.
Lexington agreed to lend up to $85.0 million for the construction of an approximately 168,000 square foot hospital in Kennewick, Washington. Upon completion of construction, a 30-year lease between the borrower/landowner and the public hospital district will commence, which lease requires the public hospital district to purchase the hospital from the borrower/landowner on May 1, 2022 for $110.0 million. The financing (1) provides for accrued interest on the outstanding balance at a rate of 6.5% (compounded monthly) until substantial completion, (2) requires regular payments of interest only at an annual rate of 8.75% after substantial completion, (3) accrues interest at 9.0% after substantial completion and (4) matures on May 1, 2022 when an estimated balloon payment of approximately $87.5 million is due.
Lexington acquired a property in Danville, Virginia for approximately $4.7 million (5.5% initial cap rate). The property is net leased for a current term expiring January 2029, with 11 five-year tenant renewal options.
Lexington formed a joint venture, in which it has a 15% interest, to acquire a portfolio of veterinary hospitals for $39.5 million (6.9% initial cap rate), which are net leased for a 20-year term. The acquisition was partially funded by a $18.8 million, non-recourse mortgage loan with a fixed interest rate of 4.01% and maturity of November 2018.
CAPITAL MARKETS
Capital Activities and Balance Sheet Update
During the third quarter of 2013, Lexington repaid $8.6 million of secured debt which had an interest rate of 5.3%.
Lexington converted approximately $12.2 million original principal amount of 6.00% Convertible Guaranteed Notes due 2030 for 1.8 million common shares and a cash payment of $0.6 million, reducing the outstanding balance of this issuance to $29.0 million.
During the third quarter of 2013, Lexington borrowed $67.0 million on its unsecured revolving credit facility.
Subsequent to quarter end, Lexington:
- borrowed $216.0 million, net, under its unsecured revolving credit facility;
- issued 11.5 million common shares raising gross proceeds of $126.3 million, after underwriting discounts and commissions; and
- entered into a nonbinding term sheet with a life insurance company and locked rate for a $213.5 million non-recourse secured financing, which is expected to bear interest at a fixed-rate of 4.66% and mature in 13 years. This financing is subject to documentation and certain conditions, including lender due diligence and approval and Lexington gives no assurance that it will be consummated or expectations of the final terms.
2013 EARNINGS GUIDANCE
Lexington affirms its estimate of Company FFO, as adjusted, within an expected range of $1.01 to $1.04 per diluted share for the year ended December 31, 2013. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
THIRD QUARTER 2013 CONFERENCE CALL
Lexington will host a conference call today, Tuesday, November 5, 2013, at 11:00 a.m. Eastern Time, to discuss its results for the quarter ended September 30, 2013. Interested parties may participate in this conference call by dialing (888) 280-4443 or (719) 457-2657. A replay of the call will be available through November 19, 2013, at (877) 870-5176 or (858) 384-5517, pin: 9218025. A live webcast of the conference call will be available at www.lxp.com within the Investor Relations section.
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that owns a diversified portfolio of equity and debt interests in single-tenant commercial properties and land. Lexington seeks to expand its portfolio through acquisitions, sale-leaseback transactions, build-to-suit arrangements and other transactions. A majority of these properties and all land interests are subject to net or similar leases, where the tenant bears all or substantially all of the operating costs, including cost increases, for real estate taxes, utilities, insurance and ordinary repairs. Lexington also provides investment advisory and asset management services to investors in the single-tenant area. Lexington common shares are traded on the New York Stock Exchange under the symbol "LXP". Additional information about Lexington is available on-line at www.lxp.com or by contacting Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention: Investor Relations.
This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington's control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in Lexington's periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the authorization by Lexington's Board of Trustees of future dividend declarations, including those necessary to achieve an annualized dividend level of $0.66 per common share/unit, (2) Lexington's ability to achieve its estimate of Company FFO, as adjusted, for the year ending December 31, 2013, (3) the successful consummation of any lease, acquisition, build-to-suit, financing or other transaction, (4) the failure to continue to qualify as a real estate investment trust, (5) changes in general business and economic conditions, including the impact of any legislation, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, (9) changes in accessibility of debt and equity capital markets, and (10) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington's web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington's future plans, strategies and expectations, are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "estimates," "projects", "may," "plans," "predicts," "will," "will likely result," "is optimistic," "goal," "objective" or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.
References to Lexington refer to Lexington Realty Trust and its consolidated subsidiaries. All interests in properties and loans are held through special purpose entities, which are separate and distinct legal entities, some of which are consolidated for financial statement purposes and/or disregarded for income tax purposes.
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited and in thousands, except share and per share data) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Gross revenues: | ||||
| Rental | $ 90,173 | $ 77,455 | $ 268,215 | $ 220,011 |
| Advisory and incentive fees | 98 | 297 | 426 | 1,385 |
| Tenant reimbursements | 7,675 | 7,206 | 23,425 | 21,486 |
| Total gross revenues | 97,946 | 84,958 | 292,066 | 242,882 |
| Expense applicable to revenues: | ||||
| Depreciation and amortization | (44,523) | (39,012) | (133,747) | (112,980) |
| Property operating | (15,888) | (14,595) | (47,082) | (41,769) |
| General and administrative | (6,358) | (5,810) | (20,116) | (17,368) |
| Non-operating income | 2,152 | 1,356 | 5,487 | 5,601 |
| Interest and amortization expense | (22,879) | (24,140) | (69,585) | (71,401) |
| Debt satisfaction gains (charges), net | (2,968) | 12 | (25,397) | (1,639) |
| Gain on acquisition | — | 167,864 | — | 167,864 |
| Litigation reserve | — | 25 | — | (2,775) |
| Impairment charges | — | (4,262) | (2,413) | (4,262) |
| Income (loss) before provision for income taxes, equity in earnings (losses) of non-consolidated entities and discontinued operations | 7,482 | 166,396 | (787) | 164,153 |
| Provision for income taxes | (2,447) | (294) | (3,005) | (799) |
| Equity in earnings (losses) of non-consolidated entities | (737) | 3,799 | (397) | 21,469 |
| Income (loss) from continuing operations | 4,298 | 169,901 | (4,189) | 184,823 |
| Discontinued operations: | ||||
| Income (loss) from discontinued operations | 311 | 355 | 2,646 | (2,159) |
| Provision for income taxes | (779) | (54) | (1,946) | (66) |
| Debt satisfaction gains (charges), net | (2) | (1,189) | 8,955 | 539 |
| Gains on sales of properties | 2,129 | 6,276 | 14,935 | 8,946 |
| Impairment charges | (802) | — | (9,537) | (5,690) |
| Total discontinued operations | 857 | 5,388 | 15,053 | 1,570 |
| Net income | 5,155 | 175,289 | 10,864 | 186,393 |
| Less net income attributable to noncontrolling interests | (460) | (748) | (2,057) | (3,730) |
| Net income attributable to Lexington Realty Trust shareholders | 4,695 | 174,541 | 8,807 | 182,663 |
| Dividends attributable to preferred shares - Series B | — | — | — | (2,298) |
| Dividends attributable to preferred shares - Series C | (1,573) | (1,573) | (4,718) | (4,718) |
| Dividends attributable to preferred shares - Series D | — | (2,926) | (3,543) | (8,777) |
| Allocation to participating securities | (144) | (1,092) | (482) | (1,179) |
| Deemed dividend - Series B | — | — | — | (2,346) |
| Redemption discount - Series C | — | — | — | 229 |
| Deemed dividend - Series D | — | — | (5,230) | — |
| Net income (loss) attributable to common shareholders | $ 2,978 | $ 168,950 | $ (5,166) | $ 163,574 |
| Income (loss) per common share - basic: | ||||
| Income (loss) from continuing operations | $ 0.01 | $ 1.05 | $ (0.10) | $ 1.06 |
| Income from discontinued operations | — | 0.04 | 0.07 | — |
| Net income (loss) attributable to common shareholders | $ 0.01 | $ 1.09 | $ (0.03) | $ 1.06 |
| Weighted-average common shares outstanding - basic: | 213,649,374 | 154,980,137 | 204,923,085 | 154,564,041 |
| Income (loss) per common share - diluted: | ||||
| Income (loss) from continuing operations | $ 0.01 | $ 0.93 | $ (0.10) | $ 0.98 |
| Income (loss) from discontinued operations | — | 0.03 | 0.07 | — |
| Net income (loss) attributable to common shareholders | $ 0.01 | $ 0.96 | $ (0.03) | $ 0.98 |
| Weighted-average common shares outstanding - diluted | 214,406,065 | 180,855,164 | 204,923,085 | 180,449,070 |
| Amounts attributable to common shareholders: | ||||
| Income (loss) from continuing operations | $ 2,069 | $ 163,481 | $ (19,769) | $ 163,552 |
| Income from discontinued operations | 909 | 5,469 | 14,603 | 22 |
| Net income (loss) attributable to common shareholders | $ 2,978 | $ 168,950 | $ (5,166) | $ 163,574 |
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| September 30, 2013 (unaudited) and December 31, 2012 | ||
| (In thousands, except share and per share data) | ||
| 2013 | 2012 | |
| Assets: | ||
| Real estate, at cost | $ 3,597,145 | $ 3,564,466 |
| Real estate - intangible assets | 693,890 | 685,914 |
| Investments in real estate under construction | 57,561 | 65,122 |
| 4,348,596 | 4,315,502 | |
| Less: accumulated depreciation and amortization | 1,240,298 | 1,150,417 |
| 3,108,298 | 3,165,085 | |
| Cash and cash equivalents | 86,182 | 34,024 |
| Restricted cash | 25,182 | 26,741 |
| Investment in and advances to non-consolidated entities | 15,232 | 27,129 |
| Deferred expenses, net | 61,652 | 57,549 |
| Loans receivable, net | 93,228 | 72,540 |
| Rent receivable - current | 7,778 | 7,355 |
| Rent receivable - deferred | 4,388 | — |
| Other assets | 50,923 | 27,780 |
| Total assets | $ 3,452,863 | $ 3,418,203 |
| Liabilities and Equity: | ||
| Liabilities: | ||
| Mortgages and notes payable | $ 1,029,838 | $ 1,415,961 |
| Credit facility borrowings | 67,000 | — |
| Term loans payable | 319,000 | 255,000 |
| Senior notes payable | 247,646 | — |
| Convertible notes payable | 27,367 | 78,127 |
| Trust preferred securities | 129,120 | 129,120 |
| Dividends payable | 34,531 | 31,351 |
| Accounts payable and other liabilities | 42,102 | 70,367 |
| Accrued interest payable | 11,642 | 11,980 |
| Deferred revenue - including below market leases, net | 70,767 | 79,908 |
| Prepaid rent | 19,111 | 13,224 |
| Total liabilities | 1,998,124 | 2,085,038 |
| Commitments and contingencies | ||
| Equity: | ||
| Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares, | ||
| Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding | 94,016 | 94,016 |
| Series D Cumulative Redeemable Preferred, liquidation preference $155,000; 6,200,000 shares issued and outstanding in 2012 | — | 149,774 |
| Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 216,391,768 and 178,616,664 shares issued and outstanding in 2013 and 2012, respectively | 22 | 18 |
| Additional paid-in-capital | 2,587,748 | 2,212,949 |
| Accumulated distributions in excess of net income | (1,254,048) | (1,143,803) |
| Accumulated other comprehensive income (loss) | 2,299 | (6,224) |
| Total shareholders' equity | 1,430,037 | 1,306,730 |
| Noncontrolling interests | 24,702 | 26,435 |
| Total equity | 1,454,739 | 1,333,165 |
| Total liabilities and equity | $ 3,452,863 | $ 3,418,203 |
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||||
| EARNINGS PER SHARE | ||||
| (Unaudited and in thousands, except share and per share data) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| EARNINGS PER SHARE: | ||||
| Basic: | ||||
| Income (loss) from continuing operations attributable to common shareholders | $ 2,069 | $ 163,481 | $ (19,769) | $ 163,552 |
| Income from discontinued operations attributable to common shareholders | 909 | 5,469 | 14,603 | 22 |
| Net income (loss) attributable to common shareholders | $ 2,978 | $ 168,950 | $ (5,166) | $ 163,574 |
| Weighted-average number of common shares outstanding | 213,649,374 | 154,980,137 | 204,923,085 | 154,564,041 |
| Income (loss) per common share: | ||||
| Income (loss) from continuing operations | $ 0.01 | $ 1.05 | $ (0.10) | $ 1.06 |
| Income from discontinued operations | — | 0.04 | 0.07 | — |
| Net income (loss) attributable to common shareholders | $ 0.01 | $ 1.09 | $ (0.03) | $ 1.06 |
| Diluted: | ||||
| Income (loss) from continuing operations attributable to common shareholders - basic | $ 2,069 | $ 163,481 | $ (19,769) | $ 163,552 |
| Impact of assumed conversions: | ||||
| Share options | — | — | — | — |
| Operating Partnership Units | — | 538 | — | 1,266 |
| 6.00% Convertible Guaranteed Notes | — | 2,327 | — | 6,980 |
| Series C Preferred Shares | — | 1,573 | — | 4,489 |
| Income (loss) from continuing operations attributable to common shareholders | 2,069 | 167,919 | (19,769) | 176,287 |
| Income from discontinued operations attributable to common shareholders - basic | 909 | 5,469 | 14,603 | 22 |
| Impact of assumed conversions: | ||||
| Operating Partnership Units | — | (63) | — | (353) |
| Income (loss) from discontinued operations attributable to common shareholders | 909 | 5,406 | 14,603 | (331) |
| Net income (loss) attributable to common shareholders | $ 2,978 | $ 173,325 | $ (5,166) | $ 175,956 |
| Weighted-average common shares outstanding - basic | 213,649,374 | 154,980,137 | 204,923,085 | 154,564,041 |
| Effect of dilutive securities: | ||||
| Share options | 756,691 | 344,721 | — | 279,699 |
| Operating Partnership Units | — | 4,400,389 | — | 4,479,451 |
| 6.00% Convertible Guaranteed Notes | — | 16,419,347 | — | 16,412,836 |
| Series C Preferred Shares | — | 4,710,570 | — | 4,713,043 |
| Weighted-average common shares outstanding | 214,406,065 | 180,855,164 | 204,923,085 | 180,449,070 |
| Income (loss) per common share: | ||||
| Income (loss) from continuing operations | $ 0.01 | $ 0.93 | $ (0.10) | $ 0.98 |
| Income (loss) from discontinued operations | — | 0.03 | 0.07 | — |
| Net income (loss) attributable to common shareholders | $ 0.01 | $ 0.96 | $ (0.03) | $ 0.98 |
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||||
| REPORTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION | ||||
| (Unaudited and in thousands, except share and per share data) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| FUNDS FROM OPERATIONS: (1) | ||||
| Basic and Diluted: | ||||
| Net income attributable to Lexington Realty Trust shareholders | $ 4,695 | $ 174,541 | $ 8,807 | $ 182,663 |
| Adjustments: | ||||
| Depreciation and amortization | 43,227 | 39,190 | 131,343 | 118,809 |
| Impairment charges - real estate, including nonconsolidated joint venture real estate | 1,727 | 4,262 | 12,875 | 9,952 |
| Noncontrolling interests - OP units | 202 | 475 | 1,286 | 913 |
| Amortization of leasing commissions | 1,445 | 1,212 | 4,124 | 3,509 |
| Joint venture and noncontrolling interest adjustment | 554 | (911) | 1,675 | 15 |
| Preferred dividends - Series B & D | — | (2,926) | (3,543) | (11,075) |
| Gains on sales of properties, net of tax | 556 | (6,276) | (11,325) | (8,946) |
| Gain on sale - joint venture investment | — | — | — | (7,000) |
| Gain on acquisition | — | (167,864) | — | (167,864) |
| Interest and amortization on 6.00% Convertible Guaranteed Notes | 642 | 2,327 | 2,534 | 6,980 |
| Reported Company FFO | 53,048 | 44,030 | 147,776 | 127,956 |
| Debt satisfaction charges, net | 2,970 | 1,177 | 16,442 | 1,100 |
| Litigation reserve | — | (25) | — | 2,775 |
| Other | 35 | 276 | 230 | 598 |
| Company FFO, as adjusted | 56,053 | 45,458 | 164,448 | 132,429 |
| FUNDS AVAILABLE FOR DISTRIBUTION: (2) | ||||
| Adjustments: | ||||
| Straight-line rents | (6,361) | (3,565) | (9,281) | 408 |
| Lease incentives | 402 | 313 | 1,032 | 1,143 |
| Amortization of below/above market leases | 34 | (913) | (136) | (3,608) |
| Non-cash interest, net | (185) | (312) | (532) | (1,168) |
| Non-cash charges, net | 2,009 | 1,104 | 5,601 | 3,462 |
| Tenant improvements | (2,441) | (11,120) | (30,590) | (16,920) |
| Lease costs | (5,038) | (4,222) | (9,957) | (7,853) |
| Reported Company Funds Available for Distribution | $ 44,473 | $ 26,743 | $ 120,585 | $ 107,893 |
| Per Share Amounts | ||||
| Basic: | ||||
| Reported Company FFO | $ 0.23 | $ 0.24 | $ 0.67 | $ 0.71 |
| Company FFO, as adjusted | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.73 |
| Company FAD | $ 0.20 | $ 0.15 | $ 0.55 | $ 0.60 |
| Diluted: | ||||
| Reported Company FFO | $ 0.23 | $ 0.24 | $ 0.67 | $ 0.71 |
| Company FFO, as adjusted | $ 0.25 | $ 0.25 | $ 0.74 | $ 0.73 |
| Company FAD | $ 0.19 | $ 0.15 | $ 0.55 | $ 0.60 |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| Basic: | 2013 | 2012 | 2013 | 2012 |
| Weighted-average common shares outstanding - EPS basic | 213,649,374 | 154,980,137 | 204,923,085 | 154,564,041 |
| 6.00% Convertible Guaranteed Notes | 4,684,069 | 16,419,347 | 6,029,067 | 16,412,836 |
| Non-vested share-based payment awards | 487,237 | 245,166 | 494,937 | 200,741 |
| Operating Partnership Units | 4,110,748 | 4,400,389 | 4,165,362 | 4,479,451 |
| Preferred Shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,713,043 |
| Weighted-average common shares outstanding - basic | 227,641,998 | 180,755,609 | 220,323,021 | 180,370,112 |
| Diluted: | ||||
| Weighted-average common shares outstanding - basic | 227,641,998 | 180,755,609 | 220,323,021 | 180,370,112 |
| Options - Incremental shares | 756,691 | 344,721 | 876,738 | 279,699 |
| Weighted-average common shares outstanding - diluted | 228,398,689 | 181,100,330 | 221,199,759 | 180,649,811 |
| 1 Lexington believes that Funds from Operations ("FFO"), which is not a measure under generally accepted accounting principles ("GAAP") is a widely recognized and appropriate measure of the performance of an equity REIT. Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income. | ||||
| The National Association of Real Estate Investment Trusts, Inc. ("NAREIT") defines FFO as "net income (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures." NAREIT clarified its computation of FFO to exclude impairment charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs. | ||||
| Lexington presents "Reported Company funds from operations" or "Reported Company FFO," which differs from FFO because it includes Lexington's operating partnership units, Lexington's 6.50% Series C Cumulative Convertible Preferred Shares, and Lexington's 6.00% Convertible Guaranteed Notes due 2030 because these securities are convertible, at the holder's option, into Lexington's common shares. Management believes this is appropriate and relevant to securities analysts, investors and other interested parties because Lexington presents Reported Company FFO on a company-wide basis as if all securities that are convertible, at the holder's option, into Lexington's common shares, are converted. Lexington also presents "Company funds from operations, as adjusted" or "Company FFO, as adjusted," which adjusts Reported Company FFO for certain items which Management believes are not indicative of the operating results of its real estate portfolio. Management believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate funds from operations in a similar fashion, Reported Company FFO and Company FFO, as adjusted, may not be comparable to similarly titled measures as reported by others. Reported Company FFO and Company FFO, as adjusted, should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity. | ||||
| 2 Reported Company Funds Available for Distribution ("FAD") is calculated by making adjustments to Company FFO, as adjusted, for (1) straight-line rent revenue, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) cash paid for tenant improvements, (5) cash paid for lease costs, (6) non-cash interest, net and (7) non-cash charges, net. Although FAD may not be comparable to that of other REITs, Lexington believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity. | ||||