NEW YORK, Feb. 20, 2014 (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 ended December 31, 2013.
Fourth Quarter 2013 Highlights
- 12% increase in Funds From Operations, as adjusted ("Company FFO, as adjusted"), to $0.28 per diluted common share.
- Increased quarterly common share dividend by 10% to $0.165 per share.
- Closed property acquisitions of $405.9 million.
- Invested $19.9 million in current build-to-suit projects and entered into an agreement to acquire an industrial property upon completion for $12.8 million.
- Agreed to lend $85.0 million for a build-to-suit construction project.
- Executed 0.5 million square feet of new and extended leases with overall portfolio 97.6% leased.
- Sold properties for an aggregate disposition price of $46.8 million.
T. Wilson Eglin, President and Chief Executive Officer of Lexington, stated, "The successful execution of our business plan in 2013 has positioned us for strong growth in funds from operations per share in 2014. This growth will be driven by the $717.6 million of investments made in 2013 and our ongoing commitment to lowering our cost of capital which resulted in the Company reducing its financing costs to 4.7% while extending its weighted-average debt maturity to 7.0 years. With a deep pipeline of additional investment opportunities, a flexible balance sheet with substantial credit line capacity and numerous capital recycling opportunities, we believe Lexington is well positioned to create additional shareholder value."
FINANCIAL RESULTS
Revenues
For the quarter ended December 31, 2013, total gross revenues were $109.6 million, compared with total gross revenues of $92.1 million for the quarter ended December 31, 2012. The increase is primarily due to property acquisitions.
Company FFO, As Adjusted
For the quarter ended December 31, 2013, Lexington generated Company FFO, as adjusted, of $65.7 million, or $0.28 per diluted share, compared to Company FFO, as adjusted, for the quarter ended December 31, 2012 of $48.2 million, or $0.25 per diluted share. The calculation of Company FFO, as adjusted, and a reconciliation to net income (loss) attributable to Lexington Realty Trust shareholders is included later in this press release.
Dividends/Distributions
Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended December 31, 2013 of $0.165 per common share/unit, which was paid on January 15, 2014 to common shareholders/unitholders of record as of December 31, 2013, and a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock ("Series C Preferred Shares"), which was paid on February 18, 2014 to Series C Preferred Shareholders of record as of January 31, 2014.
Net Loss Attributable to Common Shareholders
For the quarter ended December 31, 2013, net loss attributable to common shareholders was $(8.9) million, or $(0.04) per diluted share, compared with a net loss attributable to common shareholders for the quarter ended December 31, 2012 of $(7.0) million, or $(0.04) per diluted share.
OPERATING ACTIVITIES
Investment Activity
| Acquisitions and Completed Build-to-Suit Transactions | |||||||
| Initial | |||||||
| Initial | Annualized | Initial | Estimated | ||||
| Property | Basis | Cash Rent | Cash | GAAP | Lease | ||
| Tenant | Location | Type | ($000) | ($000) | Yield | Yield | Expiration |
| Various - 3 properties | New York, NY | Land | $ 302,000 | $ 14,883 | 4.9% | 15.2% | 10/2112 |
| Home Depot USA, Inc. | Danville, VA | Land | 4,727 | 260 | 5.5% | 4.6% | 01/2029 |
| BluePearl Holdings, LLC1 | Various | Office | 39,456 | 2,716 | 6.9% | 8.2% | 10/2033 |
| BluePearl Holdings, LLC2 | Various | Office | 13,144 | 891 | 6.8% | 6.8% | 12/2033 |
| Gander Mountain Company | Albany, GA | Retail | 7,412 | 671 | 9.1% | 10.0% | 11/2028 |
| The Gavilon Group, LLC | Omaha, NE | Office | 39,125 | 2,770 | 7.1% | 8.5% | 11/2033 |
| $ 405,864 | $ 22,191 | 5.5% | 13.4% | ||||
| (1) Lexington has a 15% interest in these six properties. |
| (2) Lexington has a 100% interest in these four properties. |
These acquisitions brought 2013 property acquisition volume to $590.4 million.
| On-going Build-to-Suit Projects | ||||||
| Maximum | GAAP Investment | |||||
| Lease | Commitment/Estimated | Balance as of | Estimated | |||
| Property | Term | Completion Cost | 12/31/2013 | Completion | ||
| Location | Sq. Ft | Type | (Years) | ($000) | ($000) | Date |
| Rantoul, IL1 | 813,000 | Industrial | 20 | $ 42,587 | $ 37,437 | 1Q 14 |
| Bingen, WA | 124,000 | Industrial | 12 | 18,898 | 6,186 | 2Q 14 |
| Las Vegas, NV | 180,000 | Industrial | 20 | 29,585 | 14,457 | 3Q 14 |
| Richmond, VA | 279,000 | Office | 15 | 98,644 | 15,632 | 3Q 15 |
| 1,396,000 | $ 189,714 | $ 73,712 | ||||
| (1) Completed and acquired in January 2014. |
| Loan Investment | ||||||
| Estimated Loan | Funded as of | |||||
| Property | Amount | 12/31/13 | Interest | Maturity | ||
| Tenant | Location | Type | ($000) | ($000) | Rate | Date |
| The Kennewick Public Hospital District | Kennewick, WA | Hospital | $ 85,000 | $ 35,376 | 9% | May 2022 |
| Acquisitions Subsequent to December 31, 2013 | ||||||
| Estimated | ||||||
| Property | Initial Basis | Initial Cash | GAAP | Lease | ||
| Tenant | Location | Type | ($000) | Yield | Yield | Expiration |
| Encana Oil & Gas (USA), Inc. | Parachute, CO | Office | $ 13,928 | 7.3% | 9.2% | 10/2032 |
| $ 13,928 | 7.3% | 9.2% | ||||
| Forward Commitments | ||||||
| Estimated | Estimated | Estimated | Estimated | Lease | ||
| Property | Acquisition Cost | Completion | Initial | GAAP | Term | |
| Location | Type | ($000) | Date | Cash Yield | Yield | (Years) |
| Lewisburg, TN | Industrial | $ 12,767 | 2Q 14 | 8.6% | 9.3% | 12 |
| Auburn Hills, MI1 | Office | 40,025 | 1Q 15 | 7.9% | 9.0% | 14 |
| $ 52,792 | 8.1% | 9.1% | ||||
| (1) Forward commitment entered into subsequent to December 31, 2013. | ||||||
Capital Recycling
| Dispositions | |||||
| Gross Sale | Annualized | ||||
| Price | NOI | Month of | |||
| Tenant | Location | Property Type | ($000) | ($000) | Disposition |
| Moran Foods, Inc. | Port Orchard, WA | Retail | $ 100 | $ 52 | Oct-13 |
| Toys-R-Us, Inc. | Lynnwood, WA | Retail | 1,436 | 140 | Nov-13 |
| Toys-R-Us, Inc. | Clackamas, OR | Retail | 479 | 49 | Nov-13 |
| Various | Hebron, KY | Multi-office | 4,400 | 228 | Dec-13 |
| Various - 2 properties | Atlanta, GA | Office | 40,356 | 1,081 | Dec-13 |
| $ 46,771 | $ 1,550 | ||||
These dispositions brought total 2013 disposition volume to $167.3 million.
Leasing
During the fourth quarter of 2013, Lexington executed 14 new and extended leases for 0.5 million square feet and ended the quarter with its overall portfolio 97.6% leased.
| LEASE EXTENSIONS | |||||
| Prior | Lease | ||||
| Location | Term | Expiration Date | Sq. Ft. | ||
| Office/ Multi-Tenant | |||||
| 1 | Johnson City | TN | 11/2013 | 11/2014 | 5,618 |
| 2 | Bridgeton | MO | 12/2013 | 12/2018 | 25,515 |
| 3 | McDonough | GA | 06/2015 | 06/2025 | 111,911 |
| 4 | Atlanta | GA | 12/2014 | 12/2019 | 6,260 |
| 5 | Atlanta | GA | 12/2014 | 12/2019 | 3,900 |
| 6 | Chamblee | GA | 12/2014 | 12/2019 | 4,565 |
| 7 | Cummings | GA | 12/2014 | 12/2019 | 14,208 |
| 8 | Forest Park | GA | 12/2014 | 12/2019 | 14,859 |
| 9 | Jonesboro | GA | 12/2014 | 12/2019 | 4,894 |
| 10 | Stone Mountain | GA | 12/2014 | 12/2019 | 5,704 |
| 11 | Lisle | IL | 11/2014 | 02/2018 | 7,535 |
| 11 | Total lease extensions | 204,969 | |||
| NEW LEASES | Lease | |||
| Location | Expiration Date | Sq. Ft. | ||
| Office/ Multi-Tenant | ||||
| 1 | Antioch | TN | 12/2014 | 60,000 |
| 2 | Pascagoula | MS | 10/2018 | 94,841 |
| 3 | Arlington | TX | 01/2025 | 111,409 |
| 3 | Total new leases | 266,250 | ||
| 14 | TOTAL NEW AND EXTENDED LEASES | 471,219 | ||
CAPITAL MARKETS
Capital Activities and Balance Sheet Update
During the fourth quarter of 2013, Lexington issued 11.5 million common shares raising gross proceeds of $126.3 million, after underwriting discounts and commissions.
In December 2013, Lexington obtained $213.5 million of non-recourse secured financing on the three New York, New York land parcels acquired in the fourth quarter of 2013. The debt bears interest at a fixed rate of 4.66% and matures in January 2027.
Lexington borrowed $87.0 million on its five-year unsecured term loan and swapped the LIBOR component of such borrowing for a current fixed interest rate of 2.64%. The proceeds from these 2013 financings were used to satisfy amounts outstanding on Lexington's $400.0 million unsecured revolving credit facility, resulting in $48.0 million of credit facility borrowings outstanding as of December 31, 2013.
Subsequent to December 31, 2013, Lexington borrowed the remaining $99.0 million available under its five-year unsecured term loan facility and swapped the LIBOR component of such borrowing for a current fixed interest rate of 2.51%.
2014 EARNINGS GUIDANCE
Lexington estimates that its Company FFO, as adjusted, guidance will be an expected range of $1.11 to $1.15 per diluted share for the year ended December 31, 2014. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
FOURTH QUARTER 2013 CONFERENCE CALL
Lexington will host a conference call today, Thursday, February 20, 2014, at 11:00 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 2013. Interested parties may participate in this conference call by dialing (888) 312-9852 or (719) 325-2478. A replay of the call will be available through March 6, 2014, at (877) 870-5176 or (858) 384-5517, pin: 8305525. 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, 2014, (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 | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Gross revenues: | ||||
| Rental | $ 101,100 | $ 84,196 | $ 366,591 | $ 299,956 |
| Advisory and incentive fees | 429 | 421 | 855 | 1,806 |
| Tenant reimbursements | 8,077 | 7,442 | 30,994 | 28,418 |
| Total gross revenues | 109,606 | 92,059 | 398,440 | 330,180 |
| Expense applicable to revenues: | ||||
| Depreciation and amortization | (44,231) | (43,614) | (174,272) | (152,296) |
| Property operating | (16,166) | (15,185) | (62,195) | (56,043) |
| General and administrative | (8,861) | (6,569) | (28,973) | (23,933) |
| Non-operating income | 3,029 | 1,224 | 8,515 | 6,825 |
| Interest and amortization expense | (23,247) | (23,951) | (91,271) | (93,677) |
| Debt satisfaction charges, net | — | (7,841) | (25,397) | (9,480) |
| Gain on acquisition | — | — | — | 167,864 |
| Litigation reserve | — | — | — | (2,775) |
| Impairment charges and loan loss | (33,166) | — | (35,579) | (4,262) |
| Income (loss) before provision for income taxes, equity in earnings (losses) of non-consolidated entities and discontinued operations | (13,036) | (3,877) | (10,732) | 162,403 |
| Provision for income taxes | (254) | (141) | (3,259) | (940) |
| Equity in earnings (losses) of non-consolidated entities | 240 | 62 | (157) | 21,531 |
| Income (loss) from continuing operations | (13,050) | (3,956) | (14,148) | 182,994 |
| Discontinued operations: | ||||
| Loss from discontinued operations | (315) | (1,313) | (761) | (5,599) |
| Benefit (provision) for income taxes | 210 | (97) | (1,735) | (163) |
| Debt satisfaction gains (charges), net | — | (717) | 8,955 | (178) |
| Gains on sales of properties | 9,537 | 4,345 | 24,472 | 13,291 |
| Impairment charges | (3,383) | (17) | (12,920) | (5,707) |
| Total discontinued operations | 6,049 | 2,201 | 18,011 | 1,644 |
| Net income (loss) | (7,001) | (1,755) | 3,863 | 184,638 |
| Less net income attributable to noncontrolling interests | (176) | (592) | (2,233) | (4,322) |
| Net income (loss) attributable to Lexington Realty Trust shareholders | (7,177) | (2,347) | 1,630 | 180,316 |
| Dividends attributable to preferred shares - Series B | — | — | — | (2,298) |
| Dividends attributable to preferred shares - Series C | (1,572) | (1,572) | (6,290) | (6,290) |
| Dividends attributable to preferred shares - Series D | — | (2,926) | (3,543) | (11,703) |
| Allocation to participating securities | (174) | (194) | (656) | (1,087) |
| Deemed dividend - Series B | — | — | — | (2,346) |
| Redemption discount - Series C | — | — | — | 229 |
| Deemed dividend - Series D | — | — | (5,230) | — |
| Net income (loss) attributable to common shareholders | $ (8,923) | $ (7,039) | $ (14,089) | $ 156,821 |
| Income (loss) per common share - basic: | ||||
| Income (loss) from continuing operations | $ (0.07) | $ (0.05) | $ (0.15) | $ 0.99 |
| Income from discontinued operations | 0.03 | 0.01 | 0.08 | — |
| Net income (loss) attributable to common shareholders | $ (0.04) | $ (0.04) | $ (0.07) | $ 0.99 |
| Weighted-average common shares outstanding - basic: | 224,260,756 | 172,646,759 | 209,797,238 | 159,109,424 |
| Income (loss) per common share - diluted: | ||||
| Income (loss) from continuing operations | $ (0.07) | $ (0.05) | $ (0.15) | $ 0.93 |
| Income (loss) from discontinued operations | 0.03 | 0.01 | 0.08 | — |
| Net income (loss) attributable to common shareholders | $ (0.04) | $ (0.04) | $ (0.07) | $ 0.93 |
| Weighted-average common shares outstanding - diluted | 224,260,756 | 172,646,759 | 209,797,238 | 179,659,826 |
| Amounts attributable to common shareholders: | ||||
| Income (loss) from continuing operations | $ (15,093) | $ (9,248) | $ (31,777) | $ 156,709 |
| Income from discontinued operations | 6,170 | 2,209 | 17,688 | 112 |
| Net income (loss) attributable to common shareholders | $ (8,923) | $ (7,039) | $ (14,089) | $ 156,821 |
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| As of December 31, | ||
| (Unaudited and in thousands, except share and per share data) | ||
| 2013 | 2012 | |
| Assets: | ||
| Real estate, at cost | $ 3,812,294 | $ 3,564,466 |
| Real estate - intangible assets | 762,157 | 685,914 |
| Investments in real estate under construction | 74,350 | 65,122 |
| 4,648,801 | 4,315,502 | |
| Less: accumulated depreciation and amortization | 1,223,381 | 1,150,417 |
| Real estate, net | 3,425,420 | 3,165,085 |
| Cash and cash equivalents | 77,261 | 34,024 |
| Restricted cash | 19,953 | 26,741 |
| Investment in and advances to non-consolidated entities | 18,442 | 27,129 |
| Deferred expenses, net | 66,827 | 57,549 |
| Loans receivable, net | 99,443 | 72,540 |
| Rent receivable - current | 10,087 | 7,355 |
| Rent receivable - deferred | 19,473 | — |
| Other assets | 35,375 | 27,780 |
| Total assets | $ 3,772,281 | $ 3,418,203 |
| Liabilities and Equity: | ||
| Liabilities: | ||
| Mortgages and notes payable | $ 1,197,489 | $ 1,415,961 |
| Credit facility borrowings | 48,000 | — |
| Term loans payable | 406,000 | 255,000 |
| Senior notes payable | 247,707 | — |
| Convertible notes payable | 27,491 | 78,127 |
| Trust preferred securities | 129,120 | 129,120 |
| Dividends payable | 40,018 | 31,351 |
| Accounts payable and other liabilities | 39,642 | 70,367 |
| Accrued interest payable | 9,627 | 11,980 |
| Deferred revenue - including below market leases, net | 69,667 | 79,908 |
| Prepaid rent | 18,037 | 13,224 |
| Total liabilities | 2,232,798 | 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, 228,663,022 and 178,616,664 shares issued and outstanding in 2013 and 2012, respectively | 23 | 18 |
| Additional paid-in-capital | 2,717,787 | 2,212,949 |
| Accumulated distributions in excess of net income | (1,300,527) | (1,143,803) |
| Accumulated other comprehensive income (loss) | 4,439 | (6,224) |
| Total shareholders' equity | 1,515,738 | 1,306,730 |
| Noncontrolling interests | 23,745 | 26,435 |
| Total equity | 1,539,483 | 1,333,165 |
| Total liabilities and equity | $ 3,772,281 | $ 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 | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2013 | 2012 | 2013 | 2012 | |
| EARNINGS PER SHARE: | ||||
| Basic: | ||||
| Income (loss) from continuing operations attributable to common shareholders | $ (15,093) | $ (9,248) | $ (31,777) | $ 156,709 |
| Income from discontinued operations attributable to common shareholders | 6,170 | 2,209 | 17,688 | 112 |
| Net income (loss) attributable to common shareholders | $ (8,923) | $ (7,039) | $ (14,089) | $ 156,821 |
| Weighted-average number of common shares outstanding | 224,260,756 | 172,646,759 | 209,797,238 | 159,109,424 |
| Income (loss) per common share: | ||||
| Income (loss) from continuing operations | $ (0.07) | $ (0.05) | $ (0.15) | $ 0.99 |
| Income from discontinued operations | 0.03 | 0.01 | 0.08 | — |
| Net income (loss) attributable to common shareholders | $ (0.04) | $ (0.04) | $ (0.07) | $ 0.99 |
| Diluted: | ||||
| Income (loss) from continuing operations attributable to common shareholders - basic | $ (15,093) | $ (9,248) | $ (31,777) | $ 156,709 |
| Impact of assumed conversions: | ||||
| Share options | — | — | — | — |
| Operating Partnership Units | — | — | — | 1,585 |
| 6.00% Convertible Guaranteed Notes | — | — | — | 8,953 |
| Income (loss) from continuing operations attributable to common shareholders | (15,093) | (9,248) | (31,777) | 167,247 |
| Income from discontinued operations attributable to common shareholders - basic | 6,170 | 2,209 | 17,688 | 112 |
| Impact of assumed conversions: | ||||
| Operating Partnership Units | — | — | — | (392) |
| Income (loss) from discontinued operations attributable to common shareholders | 6,170 | 2,209 | 17,688 | (280) |
| Net income (loss) attributable to common shareholders | $ (8,923) | $ (7,039) | $ (14,089) | $ 166,967 |
| Weighted-average common shares outstanding - basic | 224,260,756 | 172,646,759 | 209,797,238 | 159,109,424 |
| Effect of dilutive securities: | ||||
| Share options | — | — | — | 306,449 |
| Operating Partnership Units | — | — | — | 4,438,708 |
| 6.00% Convertible Guaranteed Notes | — | — | — | 15,805,245 |
| Weighted-average common shares outstanding | 224,260,756 | 172,646,759 | 209,797,238 | 179,659,826 |
| Income (loss) per common share: | ||||
| Income (loss) from continuing operations | $ (0.07) | $ (0.05) | $ (0.15) | $ 0.93 |
| Income (loss) from discontinued operations | 0.03 | 0.01 | 0.08 | — |
| Net income (loss) attributable to common shareholders | $ (0.04) | $ (0.04) | $ (0.07) | $ 0.93 |
| 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 | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2013 | 2012 | 2013 | 2012 | |
| FUNDS FROM OPERATIONS: (1) | ||||
| Basic and Diluted: | ||||
| Net income (loss) attributable to Lexington Realty Trust shareholders | $ (7,177) | $ (2,347) | $ 1,630 | $ 180,316 |
| Adjustments: | ||||
| Depreciation and amortization | 43,680 | 45,081 | 175,023 | 163,890 |
| Impairment charges - real estate, including nonconsolidated joint venture real estate | 22,610 | 17 | 35,485 | 9,969 |
| Noncontrolling interests - OP units | (129) | 279 | 1,157 | 1,192 |
| Amortization of leasing commissions | 1,438 | 1,329 | 5,562 | 4,838 |
| Joint venture and noncontrolling interest adjustment | 589 | 545 | 2,264 | 560 |
| Preferred dividends - Series B & D | — | (2,926) | (3,543) | (14,001) |
| Gains on sales of properties, net of tax | (10,430) | (4,345) | (21,755) | (13,291) |
| Gain on sale - joint venture investment | — | — | — | (7,000) |
| Gain on acquisition | — | — | — | (167,864) |
| Interest and amortization on 6.00% Convertible Guaranteed Notes | 579 | 1,973 | 3,113 | 8,953 |
| Reported Company FFO | 51,160 | 39,606 | 198,936 | 167,562 |
| Debt satisfaction charges, net | — | 8,558 | 16,442 | 9,658 |
| Impairment loss - loan receivable | 13,939 | — | 13,939 | — |
| Litigation reserve | — | — | — | 2,775 |
| Other | 565 | 5 | 795 | 603 |
| Company FFO, as adjusted | 65,664 | 48,169 | 230,112 | 180,598 |
| FUNDS AVAILABLE FOR DISTRIBUTION: (2) | ||||
| Adjustments: | ||||
| Straight-line rents | (14,795) | (7,900) | (24,076) | (7,491) |
| Lease incentives | 313 | 323 | 1,345 | 1,466 |
| Amortization of below/above market leases | 73 | 57 | (63) | (3,551) |
| Non-cash interest, net | (1,019) | (132) | (1,551) | (1,300) |
| Non-cash charges, net | 1,973 | 1,103 | 7,574 | 4,565 |
| Tenant improvements | (8,654) | (8,856) | (39,244) | (25,776) |
| Lease costs | (2,103) | (5,185) | (12,060) | (13,038) |
| Reported Company Funds Available for Distribution | $ 41,452 | $ 27,579 | $ 162,037 | $ 135,473 |
| Per Share Amounts | ||||
| Basic: | ||||
| Reported Company FFO | $ 0.22 | $ 0.20 | $ 0.89 | $ 0.91 |
| Company FFO, as adjusted | $ 0.28 | $ 0.25 | $ 1.02 | $ 0.98 |
| Company FAD | $ 0.17 | $ 0.14 | $ 0.72 | $ 0.74 |
| Diluted: | ||||
| Reported Company FFO | $ 0.21 | $ 0.20 | $ 0.88 | $ 0.91 |
| Company FFO, as adjusted | $ 0.28 | $ 0.25 | $ 1.02 | $ 0.98 |
| Company FAD | $ 0.17 | $ 0.14 | $ 0.72 | $ 0.73 |
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | ||||
| REPORTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION (CONTINUED) | ||||
| (Unaudited and in thousands, except share and per share data) | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| Basic: | 2013 | 2012 | 2013 | 2012 |
| Weighted-average common shares outstanding - EPS basic | 224,260,756 | 172,646,759 | 209,797,238 | 159,109,424 |
| 6.00% Convertible Guaranteed Notes | 4,239,679 | 13,995,678 | 5,578,043 | 15,805,245 |
| Non-vested share-based payment awards | 154,792 | 308,854 | 404,768 | 244,366 |
| Operating Partnership Units | 4,092,239 | 4,317,367 | 4,146,931 | 4,438,708 |
| Preferred Shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,712,421 |
| Weighted-average common shares outstanding - basic | 237,458,036 | 195,979,228 | 224,637,550 | 184,310,164 |
| Diluted: | ||||
| Weighted-average common shares outstanding - basic | 237,458,036 | 195,979,228 | 224,637,550 | 184,310,164 |
| Options - Incremental shares | 606,852 | 432,356 | 806,962 | 306,449 |
| Weighted-average common shares outstanding - diluted | 238,064,888 | 196,411,584 | 225,444,512 | 184,616,613 |
| 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. |