Lexington Realty Trust Reports Fourth Quarter 2019 Results

| Quelle: Lexington Realty Trust Lexington Realty Trust

NEW YORK, Feb. 20, 2020 (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 fourth quarter and year ended December 31, 2019.

Fourth Quarter 2019 Highlights

  • Generated Net Income attributable to common shareholders of $83.6 million, or $0.33 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $52.4 million, or $0.20 per diluted common share.
  • Raised net proceeds of approximately $71.0 million by issuing approximately 6.6 million common shares through the ATM program.
  • Disposed of 10 properties for an aggregate gross sale price of $172.7 million.
  • Acquired six industrial properties for an aggregate cost of $264.1 million.
  • Invested an aggregate of approximately $15.0 million in three new industrial development projects.
  • Completed 2.2 million square feet of new leases and lease extensions.
  • Declared a quarterly common share/unit dividend/distribution of $0.105 per share/unit, an increase of 2.4%.
  • Increased industrial portfolio to 81.5% of gross real estate assets.

Full Year 2019 Highlights

  • Generated Net Income attributable to common shareholders of $273.2 million, or $1.15 per diluted common share.
  • Generated Adjusted Company FFO of $196.6 million, or $0.80 per diluted common share.
  • Disposed of 22 properties for an aggregate gross sale price of $621.6 million.
  • Acquired 17 industrial properties for an aggregate cost of $703.8 million.
  • Invested an aggregate of $18.5 million in industrial development projects.
  • Increased total gross book value attributable to industrial assets from 71.2% to 81.5%.
  • Satisfied $199.2 million of secured debt at a weighted-average interest rate of 4.4%.
  • Extended the maturity of the revolving credit facility to 2023 and 2021 term loan to 2025, lowered the applicable margin rate and increased the commitment on the revolving credit facility, and swapped the LIBOR portion of the term loan interest rate to obtain a current fixed interest rate of 2.732% per annum.
  • Completed 6.4 million square feet of new leases and lease extensions, raising renewal Base Rents by 7.5%.

Subsequent Events

  • Acquired four industrial properties for an aggregate gross cost of approximately $195.0 million.

Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.

T. Wilson Eglin, Chief Executive Officer and President of Lexington Realty Trust, commented “Our excellent fourth quarter execution raised overall 2019 investment activity to more than $700 million of high-quality industrial assets. Further, property sales exceeded $620 million, and leasing volume was approximately six million square feet. Adding to our growth opportunities, we invested approximately $15 million during the quarter in three new development projects. We were also active on the capital markets front during the quarter, raising net proceeds of $71 million through our ATM program.

We continue to focus on becoming a single-tenant industrial REIT, having made tremendous progress thus far in repositioning our portfolio. At year-end, our industrial exposure represented nearly 82% of gross book value, and we are well-positioned to grow our industrial portfolio to 90% or more of gross book value by year-end 2020. As a result of all of these positive developments, we announced early in the fourth quarter an increase in our annualized dividend to $0.42 per share, with the intent of raising it steadily each year moving forward, subject to Board approval.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2019, total gross revenues were $83.0 million, compared with total gross revenues of $88.2 million for the quarter ended December 31, 2018. The decrease was primarily attributable to a decrease in revenue due to property sales, partially offset by 2019 and 2018 property acquisitions.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2019, net income attributable to common shareholders was $83.6 million, or $0.33 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2018 of $23.8 million, or $0.10 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2019, Lexington generated Adjusted Company FFO of $52.4 million, or $0.20 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2018 of $53.7 million, or $0.22 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2019, Lexington declared its quarterly common share/unit dividend/distribution for the quarter ended December 31, 2019 of $0.105 per common share/unit, an increase of 2.4%, which was paid on January 15, 2020 to common shareholders/unitholders of record as of December 31, 2019. Lexington previously declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ended December 31, 2019, which was paid February 18, 2020 to Series C Preferred shareholders of record as of January 31, 2020.

TRANSACTIONS

ACQUISITION TRANSACTIONS
Property Type Market Sq. Ft. Initial Basis
($000)		 Approximate
Lease Term
(Yrs)
Industrial - warehouse/distribution Greenville/Spartanburg, SC 196,000  $16,817  5
Industrial - warehouse/distribution Greenville/Spartanburg, SC 177,320  15,583  6
Industrial - warehouse/distribution Phoenix, AZ 186,336  21,020  7
Industrial - warehouse/distribution Phoenix, AZ 801,424  67,079  11
Industrial - warehouse/distribution Chicago, IL 1,034,200  49,348  10
Industrial - warehouse/distribution Greenville/Spartanburg, SC 1,318,680  94,233  15
    3,713,960  $264,080   

Including fourth quarter acquisition activity, consolidated 2019 acquisition activity totaled $703.8 million at aggregate weighted-average GAAP and cash capitalization rates of 5.8% and 5.4%, respectively.

DEVELOPMENT PROJECTS
Project (% owned) Market Property Type Estimated
Sq. Ft.		 Estimated
Project
Cost
($000)		 GAAP
Investment
Balance as of
12/31/2019
($000)(1)		 Lexington
Amount
Funded as of
12/31/2019
($000)		 Estimated
Completion
Date
               
Consolidated:              
Fairburn (90%) Atlanta, GA Industrial 910,000  $53,812  $10,088  $7,687  4Q 20
Rickenbacker (100%) Columbus, OH Industrial 320,000  20,300  3,225  2,805  1Q 21
        $74,112  $13,313  $10,492   
               
Non-consolidated:              
ETNA Park 70 (90%)(2) Columbus, OH Industrial TBD TBD $8,352  $8,644  TBD
ETNA Park 70 East (90%)(2) Columbus, OH Industrial TBD TBD 4,310  4,351  TBD
          $12,662  $12,995   

1. GAAP  investment balance is in real estate under construction for consolidated projects and in investments in non-consolidated entities for non-consolidated projects.

2. Plans and specifications for completion have not been completed and the estimated square footage, project cost and completion date cannot be determined.

PROPERTY DISPOSITIONS  
Primary Tenant Location Property
Type		 Gross
Disposition
Price
($000)		 Annualized
Net Income
(Loss)(1)
($000)		 Annualized
NOI(1)
($000)		 Month of
Disposition		 %
Leased
Home Depot Danville, VA Other $4,650  $205  $276  October 100%
Vacant Watertown, NY Other 500  (240) (244) October 0%
Multi-Tenant Indianapolis, IN Office 8,640  1,212  1,665  November 21%
Multi-Tenant Farmers Branch, TX Office 30,874  844  1,777  November 88%
Vacant Fairlea, WV Other 390  (85) (86) November 0%
Faurecia Auburn Hills, MI Office 48,363  1,695  3,361  December 100%
Multi-Tenant Houston, TX Office 20,041  (613) (477) December 66%
Cummins Columbus, IN Office 46,915  2,413  4,868  December 100%
Mimeo Memphis, TN Industrial 4,050  398  459  December 77%
Alstom Power Midlothian, VA Office 8,300  1,654  1,881  December 100%
      $172,723  $7,483  $13,480     

1. Generally, quarterly period prior to sale annualized, excluding impairment charges.

Including fourth quarter disposition activity, consolidated 2019 property disposition volume totaled $621.6 million at aggregate weighted-average GAAP and cash capitalization rates of 6.4% and 5.6%, respectively.

LEASING

During the fourth quarter of 2019, Lexington executed the following new and extended leases:

  LEASE EXTENSIONS    
            
  Location Primary Tenant(1)Prior Term Lease
Expiration Date		 Sq. Ft.
           
  Industrial        
1 AntiochTN Wirtgen 12/2019 12/2021 73,500 
2 LaurensSC Michelin 03/2020 01/2021 1,164,000 
3 AustellGA Mars Wrigley 05/2020 05/2025 604,852 
3 Total industrial lease extensions      1,842,352 
            
            
  NEW LEASES         
            
  Location     Lease Expiration Date Sq. Ft.
  Industrial        
1 TampaFL RC Moore   02/2023 229,605 
1 Total industrial new leases       229,605 
            
  Office        
1 PhoenixAZ Valor IT   07/2025 10,785 
2 LenexaKS Quest Diagnostics   06/2030 77,484 
2 Total office new leases       88,269 
            
3 Total new leases        317,874 
            
6 TOTAL NEW AND EXTENDED LEASES       2,160,226 

1. Leases greater than 10,000 square feet.

As of December 31, 2019, Lexington's portfolio was 97.0% leased.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter of 2019, Lexington issued approximately 6.6 million common shares under its ATM program raising net proceeds of approximately $71.0 million.

In the fourth quarter of 2019, Lexington satisfied $22.0  million of non-recourse debt. In addition, Lexington assumed $41.9 million of non-recourse debt in connection with the acquisition of a property in the Phoenix, Arizona market. The non-recourse debt has a fixed interest rate of 4.29% and matures in 2031.

As of December 31, 2019, Lexington did not have an outstanding balance under its unsecured revolving credit facility.

2020 EARNINGS GUIDANCE

Lexington estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2020 will be within an expected range of $0.95 to $0.98. Lexington estimates that its Adjusted Company FFO for the year ended December 31, 2020 will be within an expected range of $0.74 to $0.77 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

FOURTH QUARTER 2019 CONFERENCE CALL

Lexington will host a conference call today February 20, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 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 May 20, 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 10138613. 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) focused on single-tenant industrial real estate investments across the United States. Lexington seeks to expand its industrial portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects 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, 2020, (3) the successful consummation of any lease, acquisition, build-to-suit, development project, 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 December 31, Twelve months ended December 31,
 2019 2018 2019 2018
Gross revenues:               
Rental revenue$81,564  $87,251  $320,622  $395,339 
Other revenue1,472  932  5,347  1,632 
Total gross revenues83,036  88,183  325,969  396,971 
Expense applicable to revenues:       
Depreciation and amortization(35,977) (38,498) (147,594) (168,191)
Property operating(11,052) (9,614) (42,018) (42,675)
General and administrative(7,133) (7,763) (30,785) (31,662)
Non-operating income335  893  2,262  1,859 
Interest and amortization expense(14,380) (16,656) (65,095) (79,880)
Debt satisfaction gains (charges), net10  (368) (4,517) (2,596)
Impairment charges(2,974) (4,953) (5,329) (95,813)
Gains on sales of properties74,227  13,336  250,889  252,913 
Income before provision for income taxes and  equity in earnings (losses) of non-consolidated entities86,092  24,560  283,782  230,926 
Provision for income taxes(271) (402) (1,379) (1,728)
Equity in earnings (losses) of non-consolidated entities(398) 1,516  2,890  1,708 
Net income85,423  25,674  285,293  230,906 
Less net income attributable to noncontrolling interests(192) (266) (5,383) (3,491)
Net income attributable to Lexington Realty Trust shareholders85,231  25,408  279,910  227,415 
Dividends attributable to preferred shares – Series C(1,572) (1,572) (6,290) (6,290)
Allocation to participating securities(85) (40) (395) (287)
Net income attributable to common shareholders$83,574  $23,796  $273,225  $220,838 
Net income attributable to common shareholders – per common share basic$0.34  $0.10  $1.15  $0.93 
Weighted-average common shares outstanding – basic248,943,975  233,963,608  237,642,048  236,666,375 
Net income attributable to common shareholders – per common share diluted$0.33  $0.10  $1.15  $0.93 
Weighted-average common shares outstanding – diluted252,939,590  238,292,912  237,934,515  240,810,990 

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

 2019 2018
Assets:(unaudited)  
Real estate, at cost$3,320,574  $3,090,134 
Real estate - intangible assets409,756  419,612 
Investments in real estate under construction13,313  — 
Real estate, gross3,743,643  3,509,746 
Less: accumulated depreciation and amortization887,629  954,087 
Real estate, net2,856,014  2,555,659 
Assets held for sale—  63,868 
Operating lease right-of-use assets, net38,133  — 
Cash and cash equivalents122,666  168,750 
Restricted cash6,644  8,497 
Investments in non-consolidated entities57,168  66,183 
Deferred expenses, net18,404  15,937 
Rent receivable – current3,229  3,475 
Rent receivable – deferred66,294  58,692 
Other assets11,708  12,779 
Total assets$3,180,260  $2,953,840 
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$390,272  $570,420 
Term loans payable, net297,439  298,733 
Senior notes payable, net496,870  496,034 
Trust preferred securities, net127,396  127,296 
Dividends payable32,432  48,774 
Liabilities held for sale—  386 
Operating lease liabilities39,442  — 
Accounts payable and other liabilities29,925  30,790 
Accrued interest payable7,897  4,523 
Deferred revenue - including below market leases, net20,350  20,531 
Prepaid rent13,518  9,675 
Total liabilities1,455,541  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 outstanding94,016  94,016 
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 254,770,719 and 235,008,554 shares issued and outstanding in 2019 and 2018, respectively25  24 
Additional paid-in-capital2,976,670  2,772,855 
Accumulated distributions in excess of net income(1,363,676) (1,537,100)
Accumulated other comprehensive income (loss)(1,928) 76 
Total shareholders’ equity1,705,107  1,329,871 
Noncontrolling interests19,612  16,807 
Total equity1,724,719  1,346,678 
Total liabilities and equity$3,180,260  $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
December 31,		 Twelve Months Ended
December 31,
  2019 2018 2019 2018 
EARNINGS PER SHARE:        
         
Basic:        
Net income attributable to common shareholders $83,574  $23,796  $273,225  $220,838 
         
Weighted-average common shares outstanding - basic 248,943,975  233,963,608  237,642,048  236,666,375 
         
Net income attributable to common shareholders - per common share basic $0.34  $0.10  $1.15  $0.93 
         
Diluted:        
Net income attributable to common shareholders - basic $83,574  $23,796  $273,225  $220,838 
Impact of assumed conversions (34) 21  —  2,528 
Income from continuing operations attributable to common shareholders $83,540  $23,817  $273,225  $223,366 
         
Weighted-average common shares outstanding - basic 248,943,975  233,963,608  237,642,048  236,666,375 
Effect of dilutive securities:        
Unvested share-based payment awards and options 639,178  723,120  292,467  528,495 
Operating Partnership Units 3,356,437  3,606,184  —  3,616,120 
Weighted-average common shares outstanding - diluted 252,939,590  238,292,912  237,934,515  240,810,990 
         
Net income attributable to common shareholders - per common share diluted $0.33  $0.10  $1.15  $0.93 


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
      
 Three Months Ended
December 31,		 Twelve Months Ended
December 31,
 2019 2018 2019 2018
FUNDS FROM OPERATIONS:       
Basic and Diluted:       
Net income attributable to common shareholders$83,574  $23,796  $273,225  $220,838 
Adjustments:       
 Depreciation and amortization35,323  37,819  144,792  164,261 
 Impairment charges - real estate2,974  4,953  5,329  95,813 
 Noncontrolling interests - OP units(34) 22  4,376  2,528 
 Amortization of leasing commissions654  679  2,802  3,930 
 Joint venture and noncontrolling interest adjustment2,249  2,567  9,449  4,063 
 Gains on sales of properties, including non-consolidated entities and net of tax(74,211) (14,821) (255,048) (254,269)
FFO available to common shareholders and unitholders - basic50,529  55,015  184,925  237,164 
 Preferred dividends1,572  1,572  6,290  6,290 
 Amount allocated to participating securities85  40  395  287 
FFO available to all equityholders and unitholders - diluted52,186  56,627  191,610  243,741 
 Debt satisfaction (gains) charges, net, including non-consolidated entities (9) 368  4,773  2,596 
 Other(1)202  (3,305) 202  (10,038)
Adjusted Company FFO available to all equityholders and unitholders - diluted52,379  53,690  196,585  236,299 
        
FUNDS AVAILABLE FOR DISTRIBUTION:       
Adjustments:       
 Straight-line rents(3,656) (4,722) (14,502) (20,968)
 Lease incentives293  227  1,191  1,686 
 Amortization of above/below market leases(269) (28) (443) 285 
 Lease termination payments, net25  (309) (1,095) (1,234)
 Non-cash interest, net563  854  2,709  4,209 
 Non-cash charges, net1,577  1,611  6,410  6,810 
 Tenant improvements(2,885) (1,608) (7,817) (8,271)
 Lease costs(3,743) (1,448) (14,367) (4,522)
 Joint venture and non-controlling interest adjustment(63) (449) (3,794) (505)
Company Funds Available for Distribution$44,221  $47,818  $164,877  $213,789 
         
Per Common Share and Unit Amounts       
Basic:       
 FFO$0.20  $0.23  $0.77  $0.99 
         
Diluted:       
 FFO$0.20  $0.23  $0.78  $0.99 
 Adjusted Company FFO$0.20  $0.22  $0.80  $0.96 
         
Weighted-Average Common Shares       
Basic:       
 Weighted-average common shares outstanding - basic EPS248,943,975  233,963,608  237,642,048  236,666,375 
 Operating partnership units(2)3,356,437  3,606,184  3,490,147  3,616,120 
 Weighted-average common shares outstanding - basic FFO252,300,412  237,569,792  241,132,195  240,282,495 
         
Diluted:       
 Weighted-average common shares outstanding - diluted EPS252,939,590  238,292,912  237,934,515  240,810,990 
 Unvested share-based payment awards36,516  —  22,813  — 
 Operating partnership units(1)—  —  3,490,147  — 
 Preferred shares - Series C4,710,570  4,710,570  4,710,570  4,710,570 
 Weighted-average common shares outstanding - diluted FFO257,686,676  243,003,482  246,158,045  245,521,560 

(1)   "Other" primarily consisted of transaction related costs in 2019 and 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
(UNAUDITED)
    
2020 EARNINGS GUIDANCE   
 Twelve Months Ended
December 31, 2020
 Range
Estimated:       
Net income attributable to common shareholders per diluted common share(1)$0.95  $0.98 
Depreciation and amortization0.62  0.62 
Impact of capital transactions(0.83) (0.83)
Estimated Adjusted Company FFO per diluted common share$0.74  $0.77 

(1)   Assumes all convertible securities are dilutive.