NEW YORK, Nov. 06, 2019 (GLOBE NEWSWIRE) -- Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant industrial real estate investments, today announced results for the third quarter ended September 30, 2019.
Third Quarter 2019 Highlights
- Recorded Net Income attributable to common shareholders of $141.6 million, or $0.59 per diluted common share.
- Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $48.7 million, or $0.20 per diluted common share.
- Acquired three industrial properties for an aggregate cost of $179.8 million.
- Disposed of six properties for an aggregate gross sales price of $328.6 million.
- Satisfied $161.8 million of secured debt at a weighted-average interest rate of 4.1%.
- Raised net proceeds of $131.8 million by issuing approximately 13.0 million common shares in an underwritten public offering and through the ATM program.
- Extended the maturity of the $300.0 million term loan to January 2025 and swapped the LIBOR portion of the interest rate to obtain a current fixed rate of 2.732% per annum.
- Completed 1.6 million square feet of new leases and lease extensions, raising industrial renewal rents by 5%.
- Increased industrial portfolio to 78% of gross real estate assets.
Subsequent Events
- Acquired three industrial assets for an aggregate cost of approximately $53.4 million.
- Sold three non-core properties for an aggregate gross sales price of $13.8 million.
- Declared a quarterly common share/unit dividend/distribution of $0.105 per share/unit, an increase of 2.4%.
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, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, “Our third quarter results were strong as we continued to successfully execute on our business plan. The dividend increase announced today reflects the progress and sustained momentum on both the acquisition and disposition front. Robust transaction volume during the quarter resulted in year-to-date investment activity of nearly $500 million and disposition activity of $463 million, including $244 million from our Richland, Washington property which we acquired in 2015 for $152 million. Our disposition program has been a huge success thus far and has provided well-priced capital to invest into industrial properties in support of our portfolio repositioning objectives. Industrial exposure represented 78% of gross book value at quarter-end, and we expect this to increase over the balance of the year.”
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2019, total gross revenues were $81.6 million, compared with total gross revenues of $100.3 million for the quarter ended September 30, 2018. The decrease was primarily attributable to property sales and lease expirations, partially offset by revenue generated from property acquisitions and new leases.
Net Income Attributable to Common Shareholders
For the quarter ended September 30, 2019, net income attributable to common shareholders was $141.6 million, or $0.59 per diluted share, compared with a net income attributable to common shareholders for the quarter ended September 30, 2018 of $216.2 million, or $0.90 per diluted share.
Adjusted Company FFO
For the quarter ended September 30, 2019, Lexington generated Adjusted Company FFO of $48.7 million, or $0.20 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2018 of $58.2 million, or $0.24 per diluted share.
Dividends/Distributions
As previously announced, during the third quarter of 2019, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2019 of $0.1025 per common share/unit, which was paid on October 15, 2019 to common shareholders/unitholders of record as of September 30, 2019. Lexington also declared a cash dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ended September 30, 2019, which is expected to be paid on November 15, 2019 to Series C Preferred Shareholders of record as of October 31, 2019.
Today, Lexington announced that it declared a regular quarterly common share/unit dividend/distribution for the quarter ending December 31, 2019 of $0.105 per common share/unit payable on January 15, 2020 to common shareholders/unitholders of record as of December 31, 2019. This represents an increase of 2.4% from the previous quarterly per common share/unit dividend/distribution and equates to an annualized increase of $0.01 per common share/unit and an annualized dividend/distribution of $0.42 per common share/unit, subject to and assuming future declarations.
Lexington also announced that it declared a cash dividend of $0.8125 per share of Series C Preferred for the quarter ending December 31, 2019, which is expected to be paid on February 18, 2020 to Series C Preferred Shareholders of record as of January 31, 2020.
TRANSACTION ACTIVITY
| ACQUISITION TRANSACTIONS | |||||||||||
| Property Type | Market | Sq. Ft. | Initial Basis ($000) | Approximate Lease Term (Yrs) | |||||||
| Industrial | Cincinnati, OH | 143,664 | $ | 13,762 | 4 | ||||||
| Industrial | Cincinnati, OH | 1,299,492 | 100,288 | 11 | |||||||
| Industrial | Cincinnati, OH | 994,013 | 65,763 | 8 | |||||||
| 2,437,169 | $ | 179,813 | |||||||||
The above properties were acquired at aggregate weighted-average GAAP and cash capitalization rates of 5.7% and 5.0%, respectively.
| PROPERTY DISPOSITIONS(1) | |||||||||||||||||||||
| Primary Tenant | Location | Property Type | Gross Disposition Price ($000) | Annualized Net Income(2) ($000) | Annualized NOI(2) ($000) | Month of Disposition | % Leased | ||||||||||||||
| T-Mobile USA | Meridian, ID | Office | $ | 16,322 | $ | 531 | $ | 1,507 | August | 100.0 | % | ||||||||||
| Vacant | Albany, GA | Other | 1,500 | (114 | ) | (111 | ) | August | 0.0 | % | |||||||||||
| United States of America | Lenexa, KS | Office | 53,300 | 2,010 | 3,341 | August | 100.0 | % | |||||||||||||
| Consumer Cellular | Redmond, OR | Office | 12,100 | 37 | (511 | ) | September | 100.0 | % | ||||||||||||
| Kroger | Paris, TN | Other | 1,350 | 135 | 156 | September | 100.0 | % | |||||||||||||
| Preferred Freezer | Richland, WA | Industrial | 244,000 | 5,171 | 11,283 | September | 100.0 | % | |||||||||||||
| $ | 328,572 | $ | 7,770 | $ | 15,665 | ||||||||||||||||
(1) In addition, a joint venture, in which Lexington has a 20% interest, disposed of three office properties for $108.4 million and satisfied $71.5 million of non-recourse debt.
(2) Quarterly period prior to sale, annualized.
| LEASING | ||||||||||||
| LEASE EXTENSIONS | ||||||||||||
| Location | Primary Tenant(1) | Prior Term | Lease Expiration Date | Sq. Ft. | ||||||||
| Industrial | ||||||||||||
| 1 | Antioch | TN | Christie Lites | 06/2020 | 06/2025 | 50,400 | ||||||
| 2 | Laurens | SC | Michelin | 01/2020 | 03/2020 | 1,164,000 | ||||||
| 2 | Total industrial lease extensions | 1,214,400 | ||||||||||
| Office | ||||||||||||
| 1 | Philadelphia | PA | Morgan Lewis | 01/2021 | 01/2024 | 289,432 | ||||||
| 2 | Mission | TX | T-Mobile West | 06/2020 | 06/2025 | 75,016 | ||||||
| 2 | Total office lease extensions | 364,448 | ||||||||||
| 4 | Total lease extensions | 1,578,848 | ||||||||||
| NEW LEASES | ||||||||||||
| Location | Lease Expiration Date | Sq. Ft. | ||||||||||
| Office | ||||||||||||
| 1 | Indianapolis | IN | Stanley Black & Decker | 10/2020 | 15,032 | |||||||
| 1 | Total office leases | 15,032 | ||||||||||
| 5 | TOTAL NEW AND EXTENDED LEASES | 1,593,880 | ||||||||||
(1) Leases greater than 10,000 square feet.
As of September 30, 2019, Lexington's portfolio was 97.4% leased.
BALANCE SHEET/CAPITAL MARKETS
During the third quarter of 2019, Lexington issued 10.0 million common shares through an underwritten equity offering raising net proceeds of approximately $100.7 million. In addition, Lexington issued approximately 3.0 million common shares under its ATM program raising net proceeds of $31.1 million.
In the third quarter of 2019, Lexington satisfied $161.8 million of consolidated non-recourse debt, including debt encumbering assets sold. Subsequent to September 30, 2019, Lexington satisfied an aggregate of $15.7 million of consolidated non-recourse debt.
In July 2019, Lexington extended the maturity of its $300.0 million term loan from January 2021 to January 2025. In addition, Lexington swapped the LIBOR portion of the interest rate to obtain a current fixed rate of 2.732% per annum.
During the third quarter of 2019, Lexington repaid all amounts outstanding under its unsecured revolving credit facility.
2019 EARNINGS GUIDANCE
Lexington now estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2019 will be within an expected range of $1.22 to $1.25.
Additionally, Lexington is tightening its Adjusted Company FFO guidance range for the year ended December 31, 2019 from $0.76 to $0.80 per diluted common share to $0.77 to $0.80 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
THIRD QUARTER 2019 CONFERENCE CALL
Lexington will host a conference call today, November 6, 2019, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 30, 2019. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through February 6, 2020, 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 10136168. A link to a live webcast of the conference call is 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 industrial 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, 2019, (3) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (4) the failure to continue to qualify as a real estate investment trust, (5) changes in general business and economic conditions, including the impact of any legislation, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, (9) changes in accessibility of debt and equity capital markets, and (10) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington's web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington's future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.
References to Lexington refer to Lexington Realty Trust and its consolidated subsidiaries. All interests in properties and loans are held, and all property operating activities are conducted, through special purpose entities, which are separate and distinct legal entities that maintain separate books and records, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's (or its general partner's, member's or managing member's) creditors.
Non-GAAP Financial Measures - Definitions
Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.
Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington's financial performance or cash flow from operating, investing or financing activities or liquidity.
Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“REITs”), Lexington believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity.
Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.
The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.
Lexington presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into Lexington’s common shares, are converted at the beginning of the period. Lexington also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington's real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.
GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.
Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Gross revenues: | |||||||||||||||
| Rental revenue | $ | 80,325 | $ | 99,958 | $ | 239,058 | $ | 308,088 | |||||||
| Other revenue | 1,225 | 337 | 3,875 | 701 | |||||||||||
| Total gross revenues | 81,550 | 100,295 | 242,933 | 308,789 | |||||||||||
| Expense applicable to revenues: | |||||||||||||||
| Depreciation and amortization | (37,211 | ) | (37,716 | ) | (111,617 | ) | (129,693 | ) | |||||||
| Property operating | (10,611 | ) | (10,678 | ) | (30,966 | ) | (33,061 | ) | |||||||
| General and administrative | (7,791 | ) | (7,482 | ) | (23,652 | ) | (23,899 | ) | |||||||
| Non-operating income | 532 | 429 | 1,927 | 965 | |||||||||||
| Interest and amortization expense | (16,481 | ) | (21,159 | ) | (50,715 | ) | (63,224 | ) | |||||||
| Debt satisfaction charges, net | (4,424 | ) | (2,228 | ) | (4,527 | ) | (2,228 | ) | |||||||
| Impairment charges | (673 | ) | (2,542 | ) | (2,355 | ) | (90,860 | ) | |||||||
| Gains on sales of properties | 140,461 | 202,371 | 176,662 | 239,577 | |||||||||||
| Income before provision for income taxes and equity in earnings of non-consolidated entities | 145,352 | 221,290 | 197,690 | 206,366 | |||||||||||
| Provision for income taxes | (241 | ) | (444 | ) | (1,108 | ) | (1,326 | ) | |||||||
| Equity in earnings of non-consolidated entities | 2,710 | 4 | 3,288 | 192 | |||||||||||
| Net income | 147,821 | 220,850 | 199,870 | 205,232 | |||||||||||
| Less net income attributable to noncontrolling interests | (4,502 | ) | (2,834 | ) | (5,191 | ) | (3,225 | ) | |||||||
| Net income attributable to Lexington Realty Trust shareholders | 143,319 | 218,016 | 194,679 | 202,007 | |||||||||||
| Dividends attributable to preferred shares – Series C | (1,573 | ) | (1,573 | ) | (4,718 | ) | (4,718 | ) | |||||||
| Allocation to participating securities | (186 | ) | (253 | ) | (304 | ) | (279 | ) | |||||||
| Net income attributable to common shareholders | $ | 141,560 | $ | 216,190 | $ | 189,657 | $ | 197,010 | |||||||
| Net income attributable to common shareholders - per common share basic | $ | 0.60 | $ | 0.91 | $ | 0.81 | $ | 0.83 | |||||||
| Weighted-average common shares outstanding – basic | 236,285,216 | 237,354,669 | 233,833,340 | 237,577,198 | |||||||||||
| Net income attributable to common shareholders - per common share diluted | $ | 0.59 | $ | 0.90 | $ | 0.81 | $ | 0.83 | |||||||
| Weighted-average common shares outstanding – diluted | 241,355,289 | 246,058,298 | 234,011,643 | 241,660,588 | |||||||||||
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| September 30, 2019 | December 31, 2018 | ||||||
| (unaudited) | |||||||
| Assets: | |||||||
| Real estate, at cost | $ | 3,178,870 | $ | 3,090,134 | |||
| Real estate - intangible assets | 401,609 | 419,612 | |||||
| Real estate, gross | 3,580,479 | 3,509,746 | |||||
| Less: accumulated depreciation and amortization | 928,886 | 954,087 | |||||
| Real estate, net | 2,651,593 | 2,555,659 | |||||
| Assets held for sale | 58,031 | 63,868 | |||||
| Operating lease right-of-use assets, net | 39,056 | — | |||||
| Cash and cash equivalents | 126,058 | 168,750 | |||||
| Restricted cash | 7,692 | 8,497 | |||||
| Investment in non-consolidated entities | 53,796 | 66,183 | |||||
| Deferred expenses, net | 16,195 | 15,937 | |||||
| Rent receivable – current | 2,336 | 3,475 | |||||
| Rent receivable – deferred | 64,593 | 58,692 | |||||
| Other assets | 15,238 | 12,779 | |||||
| Total assets | $ | 3,034,588 | $ | 2,953,840 | |||
| Liabilities and Equity: | |||||||
| Liabilities: | |||||||
| Mortgages and notes payable, net | $ | 374,543 | $ | 570,420 | |||
| Term loan payable, net | 297,313 | 298,733 | |||||
| Senior notes payable, net | 496,661 | 496,034 | |||||
| Trust preferred securities, net | 127,371 | 127,296 | |||||
| Dividends payable | 30,710 | 48,774 | |||||
| Liabilities held for sale | 5,297 | 386 | |||||
| Operating lease liabilities | 40,275 | — | |||||
| Accounts payable and other liabilities | 26,504 | 30,790 | |||||
| Accrued interest payable | 12,300 | 4,523 | |||||
| Deferred revenue - including below market leases, net | 21,050 | 20,531 | |||||
| Prepaid rent | 11,529 | 9,675 | |||||
| Total liabilities | 1,443,553 | 1,607,162 | |||||
| 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 | |||||
| Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 247,856,209 and 235,008,554 shares issued and outstanding in 2019 and 2018, respectively | 25 | 24 | |||||
| Additional paid-in-capital | 2,903,704 | 2,772,855 | |||||
| Accumulated distributions in excess of net income | (1,420,459 | ) | (1,537,100 | ) | |||
| Accumulated other comprehensive income (loss) | (5,549 | ) | 76 | ||||
| Total shareholders’ equity | 1,571,737 | 1,329,871 | |||||
| Noncontrolling interests | 19,298 | 16,807 | |||||
| Total equity | 1,591,035 | 1,346,678 | |||||
| Total liabilities and equity | $ | 3,034,588 | $ | 2,953,840 | |||
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES |
| EARNINGS PER SHARE |
| (Unaudited and in thousands, except share and per share data) |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| EARNINGS PER SHARE: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Net income attributable to common shareholders | $ | 141,560 | $ | 216,190 | $ | 189,657 | $ | 197,010 | ||||||||
| Weighted-average number of common shares outstanding - basic | 236,285,216 | 237,354,669 | 233,833,340 | 237,577,198 | ||||||||||||
| Net income attributable to common shareholders - per common share basic | $ | 0.60 | $ | 0.91 | $ | 0.81 | $ | 0.83 | ||||||||
| Diluted: | ||||||||||||||||
| Net income attributable to common shareholders - basic | $ | 141,560 | $ | 216,190 | $ | 189,657 | $ | 197,010 | ||||||||
| Impact of assumed conversions | 1,573 | 4,159 | — | 2,505 | ||||||||||||
| Net income attributable to common shareholders | $ | 143,133 | $ | 220,349 | $ | 189,657 | $ | 199,515 | ||||||||
| Weighted-average common shares outstanding - basic | 236,285,216 | 237,354,669 | 233,833,340 | 237,577,198 | ||||||||||||
| Effect of dilutive securities: | ||||||||||||||||
| Unvested share-based payment awards and options | 359,503 | 382,956 | 178,303 | 463,922 | ||||||||||||
| Preferred shares - Series C | 4,710,570 | 4,710,570 | — | — | ||||||||||||
| Operating partnership units | — | 3,610,103 | — | 3,619,468 | ||||||||||||
| Weighted-average common shares outstanding - diluted | 241,355,289 | 246,058,298 | 234,011,643 | 241,660,588 | ||||||||||||
| Net income attributable to common shareholders - per common share diluted | $ | 0.59 | $ | 0.90 | $ | 0.81 | $ | 0.83 | ||||||||
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | |||||||||||||||||
| ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION | |||||||||||||||||
| (Unaudited and in thousands, except share and per share data) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||
| FUNDS FROM OPERATIONS: | |||||||||||||||||
| Basic and Diluted: | |||||||||||||||||
| Net income attributable to common shareholders | $ | 141,560 | $ | 216,190 | $ | 189,657 | $ | 197,010 | |||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization | 36,537 | 37,063 | 109,469 | 126,442 | |||||||||||||
| Impairment charges - real estate | 673 | 2,542 | 2,355 | 90,860 | |||||||||||||
| Noncontrolling interests - OP units | 4,244 | 2,586 | 4,410 | 2,506 | |||||||||||||
| Amortization of leasing commissions | 674 | 653 | 2,148 | 3,251 | |||||||||||||
| Joint venture and noncontrolling interest adjustment | 2,267 | 980 | 7,200 | 1,496 | |||||||||||||
| Gains on sales of properties, including non-consolidated entities and net of tax | (143,719 | ) | (202,242 | ) | (180,837 | ) | (239,448 | ) | |||||||||
| FFO available to common shareholders and unitholders - basic | 42,236 | 57,772 | 134,402 | 182,117 | |||||||||||||
| Preferred dividends | 1,573 | 1,573 | 4,718 | 4,718 | |||||||||||||
| Amount allocated to participating securities | 186 | 253 | 304 | 279 | |||||||||||||
| FFO available to all equityholders and unitholders - diluted | 43,995 | 59,598 | 139,424 | 187,114 | |||||||||||||
| Debt satisfaction charges, net, including non-consolidated entities | 4,679 | 2,228 | 4,782 | 2,228 | |||||||||||||
| Other(1) | — | (3,613 | ) | — | (6,733 | ) | |||||||||||
| Adjusted Company FFO available to all equityholders and unitholders - diluted | 48,674 | 58,213 | 144,206 | 182,609 | |||||||||||||
| FUNDS AVAILABLE FOR DISTRIBUTION: | |||||||||||||||||
| Adjustments: | |||||||||||||||||
| Straight-line adjustments | (4,161 | ) | (5,367 | ) | (10,846 | ) | (16,246 | ) | |||||||||
| Lease incentives | 318 | 404 | 898 | 1,459 | |||||||||||||
| Amortization of above/below market leases | (142 | ) | 89 | (174 | ) | 313 | |||||||||||
| Lease termination payments, net | (120 | ) | (308 | ) | (1,120 | ) | (925 | ) | |||||||||
| Non-cash interest, net | 567 | 1,031 | 2,146 | 3,355 | |||||||||||||
| Non-cash charges, net | 1,554 | 1,635 | 4,833 | 5,199 | |||||||||||||
| Tenant improvements | (1,380 | ) | (69 | ) | (4,932 | ) | (6,663 | ) | |||||||||
| Lease costs | (5,951 | ) | (1,273 | ) | (10,624 | ) | (3,074 | ) | |||||||||
| Joint venture and noncontrolling interest adjustment | (3,095 | ) | — | (3,731 | ) | — | |||||||||||
| Company Funds Available for Distribution | $ | 36,264 | $ | 54,355 | $ | 120,656 | $ | 166,027 | |||||||||
| Per Common Share and Unit Amounts | |||||||||||||||||
| Basic: | |||||||||||||||||
| FFO | $ | 0.18 | $ | 0.24 | $ | 0.57 | $ | 0.76 | |||||||||
| Diluted: | |||||||||||||||||
| FFO | $ | 0.18 | $ | 0.24 | $ | 0.58 | $ | 0.76 | |||||||||
| Adjusted Company FFO | $ | 0.20 | $ | 0.24 | $ | 0.60 | $ | 0.74 | |||||||||
| Basic: | |||||||||||||||||
| Weighted-average common shares outstanding - basic EPS | 236,285,216 | 237,354,669 | 233,833,340 | 237,577,198 | |||||||||||||
| Operating partnership units(2) | 3,520,643 | 3,610,103 | 3,535,207 | 3,619,468 | |||||||||||||
| Weighted-average common shares outstanding - basic FFO | 239,805,859 | 240,964,772 | 237,368,547 | 241,196,666 | |||||||||||||
| Diluted: | |||||||||||||||||
| Weighted-average common shares outstanding - diluted EPS | 241,355,289 | 246,058,298 | 234,011,643 | 241,660,588 | |||||||||||||
| Operating partnership units(2) | 3,520,643 | — | 3,535,207 | — | |||||||||||||
| Unvested share-based payment awards and options | 25,090 | — | 20,169 | — | |||||||||||||
| Preferred shares - Series C | — | — | 4,710,570 | 4,710,570 | |||||||||||||
| Weighted-average common shares outstanding - diluted FFO | 244,901,022 | 246,058,298 | 242,277,589 | 246,371,158 | |||||||||||||
(1) "Other" primarily consisted of the acceleration of below-market lease intangible accretion in 2018.
(2) Includes OP units other than OP units held by Lexington.
| LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES | |||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||
| 2019 EARNINGS GUIDANCE | |||||||
| Twelve Months Ended December 31, 2019 | |||||||
| Range | |||||||
| Estimated: | |||||||
| Net income attributable to common shareholders per diluted common share(1) | $ | 1.22 | $ | 1.25 | |||
| Depreciation and amortization | 0.62 | 0.62 | |||||
| Impact of capital transactions | (1.07 | ) | (1.07 | ) | |||
| Estimated Adjusted Company FFO per diluted common share | $ | 0.77 | $ | 0.80 | |||
(1) Assumes all convertible securities are dilutive.