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, 2018.
Fourth Quarter 2018 Highlights
- Generated Net Income
attributable to common shareholders of $23.8 million, or $0.10 per
diluted common share.
- Generated Adjusted Company
Funds From Operations available to all equityholders and
unitholders - diluted (“Adjusted Company FFO”) of $53.7 million, or
$0.22 per diluted common share.
- Acquired two industrial
properties for an aggregate cost of $107.7 million.
- Disposed of nine
non-industrial properties for an aggregate gross sale price of
$93.3 million.
- Repurchased and retired 4.0
million common shares at an average price of $8.07 per share and
increased repurchase authorization by 10.0 million common
shares.
- Repaid remaining 2020 term
loan balance of $149.0 million.
- Completed 452,000 square
feet of new leases and lease extensions.
Full Year 2018 Highlights
- Generated Net Income
attributable to common shareholders of $220.8 million, or $0.93 per
diluted common share.
- Generated Adjusted Company
FFO of $236.3 million, or $0.96 per diluted common
share.
- Increased total gross book
value and total rental revenue attributable to industrial assets
from 49.3% and 44.3%, respectively, to 71.1% and 65.4%,
respectively.
- Acquired eight industrial
properties for an aggregate cost of $315.6 million.
- Disposed of 21 office
assets to a newly-formed joint venture for an aggregate gross
disposition price of $725.8 million and acquired a 20% interest in
the joint venture for an aggregate cost of $53.7
million.
- Disposed of 25 additional
consolidated properties for an aggregate gross sale price of $335.3
million.
- Repurchased and retired 5.9
million common shares at an average price of $8.05 per
share.
- Repaid $160.0 million, net
under its unsecured revolving credit facility and fully repaid its
$300 million 2020 term loan.
- Retired an aggregate of
$118.0 million in property non-recourse mortgage debt, including
debt encumbering assets sold to the joint venture
above.
- Completed 1.9 million
square feet of new leases and lease extensions.
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 “Through our
targeted disposition and investment efforts in 2018, we increased
our industrial exposure to 71% of our total gross book value at
year end compared to 49% at year-end 2017. We were very
active in our share buyback plan during the fourth quarter,
bringing our total 2018 share repurchases to almost six million
shares at an average price of $8.05 per share.
“We remain focused on transitioning to a
single-tenant net-leased industrial REIT, and our disposition plan
contemplates the sale of primarily office and other non-core assets
with this objective in mind. Proceeds from sales, available cash,
and low leverage will provide further capital to fund industrial
purchases and build-to-suit opportunities.
“In connection with the repositioning of our
portfolio and growth plans going forward, last year we announced
that in 2019 we would revise our distribution policy in order to
retain and reinvest as much of our cash flow as possible. We
believe this is a prudent course which will enhance our earnings
growth and net asset value per share over time. Accordingly, we
announced today a new annualized dividend rate of $0.41 per common
share.”
FINANCIAL RESULTS
Revenues
For the quarter ended December 31, 2018,
total gross revenues were $87.3 million, compared with total gross
revenues of $102.2 million for the quarter ended December 31,
2017. The decrease was primarily attributable to a decrease in
revenue due to property sales, partially offset by 2018 and 2017
property acquisitions.
Net Income Attributable to Common
Shareholders
For the quarter ended December 31, 2018,
net income attributable to common shareholders was $23.8 million,
or $0.10 per diluted share, compared with net income attributable
to common shareholders for the quarter ended December 31, 2017
of $29.2 million, or $0.12 per diluted share.
Adjusted Company FFO
For the quarter ended December 31, 2018,
Lexington generated Adjusted Company FFO of $53.7 million, or $0.22
per diluted share, compared to Adjusted Company FFO for the quarter
ended December 31, 2017 of $63.1 million, or $0.26 per diluted
share.
Dividends/Distributions
As previously announced, during the fourth
quarter of 2018, Lexington declared its quarterly common share/unit
dividend/distribution for the quarter ended December 31, 2018
of $0.1775 per common share/unit, which was paid on January 15,
2019 to common shareholders/unitholders of record as of
December 31, 2018. 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, 2018, which was paid February 15, 2019 to Series
C Preferred shareholders of record as of January 31, 2019.
Today, Lexington declared its quarterly common
share/unit dividend/distribution for the quarter ended March 31,
2019 in the amount of $0.1025 per common share/unit, which will be
paid on April 15, 2019 to common shareholders/unitholders of record
as of March 29, 2019. Lexington previously declared a dividend of
$0.8125 per share on its Series C Preferred for the quarter ended
March 31, 2019, which will be paid on May 15, 2019, to Series C
Preferred shareholders of record as of April 30, 2019.
TRANSACTIONS
|
ACQUISITION TRANSACTIONS |
| Primary Tenant(1) |
|
Location |
|
Sq. Ft. (Approx.) |
|
Property Type |
|
Initial Basis ($000) |
|
Approximate Lease Term (Yrs) |
| Blue Buffalo |
|
Goodyear, AZ |
|
540,349 |
|
|
Industrial |
|
$ |
41,372 |
|
|
7 |
| Philip
Morris |
|
Chester, VA |
|
1,034,470 |
|
|
Industrial |
|
66,311 |
|
|
12 |
|
|
|
|
|
1,574,819 |
|
|
|
|
$ |
107,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- In addition, Lexington acquired a
57-acre parcel of land from a non-consolidated joint venture and
leased the parcel to a tenant to develop an industrial
property.
Including fourth quarter acquisition activity,
consolidated 2018 acquisition activity totaled $315.6 million at
average GAAP and cash capitalization rates of 6.5% and 5.3%,
respectively.
|
PROPERTY DISPOSITIONS |
|
|
| Primary Tenant |
|
Location |
|
PropertyType |
|
Gross Disposition
Price($000) |
|
AnnualizedNet Income
(Loss)(1)($000) |
|
Annualized NOI(1) ($000) |
|
Month of Disposition |
|
%Leased |
| Oregon Research
Institute |
|
Eugene, OR |
|
Office |
|
$ |
16,000 |
|
|
$ |
2,098 |
|
|
$ |
1,832 |
|
|
October |
|
100 |
% |
| Alstom
Power |
|
Knoxville, TN |
|
Office |
|
16,000 |
|
|
1,262 |
|
|
1,249 |
|
|
November |
|
100 |
% |
|
Vacant |
|
Manteca, CA |
|
Other |
|
2,700 |
|
|
967 |
|
|
381 |
|
|
November |
|
0 |
% |
|
Delhaize |
|
Jefferson, NC |
|
Other |
|
1,550 |
|
|
156 |
|
|
160 |
|
|
December |
|
100 |
% |
|
Vacant |
|
Wallingford, CT |
|
Office |
|
1,050 |
|
|
(222 |
) |
|
(179 |
) |
|
December |
|
0 |
% |
|
Vacant |
|
Florence, SC |
|
Office |
|
1,838 |
|
|
(320 |
) |
|
325 |
|
|
December |
|
0 |
% |
| Kingsport
Power |
|
Kingsport, TN |
|
Office |
|
3,400 |
|
|
287 |
|
|
310 |
|
|
December |
|
100 |
% |
| Federal
Express |
|
Memphis, TN |
|
Office |
|
50,800 |
|
|
6,844 |
|
|
7,101 |
|
|
December |
|
100 |
% |
|
|
|
|
|
|
|
$ |
93,338 |
|
|
$ |
11,072 |
|
|
$ |
11,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Quarterly period prior to sale,
excluding impairment charges and accelerated below-market lease
intangible accretion, annualized.
In addition, a vacant retail property in San
Diego, California was transferred to its ground owner and Lexington
received $4.3 million from the sale of a six-property
non-consolidated office portfolio.
Including fourth quarter disposition activity,
consolidated 2018 property disposition volume totaled $1.1 billion
at average GAAP and cash capitalization rates of 8.9% and 8.4%,
respectively.
As a result of 2018 transactions, Lexington's
total gross book value attributable to industrial assets accounts
for 71.1% of total consolidated real estate gross book value at
December 31, 2018 compared to 49.3% at December 31, 2017. Rental
revenue attributable to industrial assets increased to 65.4% of
total consolidated rental revenue as of December 31, 2018 from
44.3% as of December 31, 2017.
LEASING
During the fourth quarter of 2018, Lexington
executed the following new and extended leases:
| |
|
LEASE EXTENSIONS |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Location |
|
Primary Tenant(1) |
Prior Term |
|
LeaseExpiration Date |
|
Sq. Ft. |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Industrial |
|
|
|
|
|
|
|
|
| 1 |
|
Carrollton |
TX |
|
Teasdale |
|
03/2025 |
|
12/2033 |
|
298,653 |
|
|
1 |
|
Total
industrial lease extensions |
|
|
|
|
|
|
|
|
298,653 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Office |
|
|
|
|
|
|
|
|
| 1 |
|
Knoxville |
TN |
|
CaremarkPCS |
|
05/2020 |
|
05/2027 |
|
59,748 |
|
|
2 |
|
Indianapolis |
IN |
|
N/A |
|
02/2019 |
|
05/2019 |
|
3,764 |
|
|
2 |
|
Total office lease extensions |
|
|
|
|
|
|
|
63,512 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
Total lease extensions |
|
|
|
|
|
|
|
362,165 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
NEW
LEASES |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Location |
|
|
|
|
|
Lease Expiration Date |
|
Sq. Ft. |
| |
|
Office/Multi-Tenant |
|
|
|
|
|
|
|
|
| 1 |
|
Phoenix |
AZ |
|
Argosy
Education |
|
|
|
05/2024 |
|
27,470 |
|
| 2 |
|
Farmers Branch |
TX |
|
N/A |
|
|
|
04/2024 |
|
2,937 |
|
|
3 |
|
Orlando |
FL |
|
CardWorks
Servicing |
|
|
|
09/2029 |
|
59,927 |
|
|
3 |
|
Total new office leases |
|
|
|
|
|
|
|
90,334 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
TOTAL NEW AND EXTENDED LEASES |
|
|
|
|
|
|
|
452,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Leases greater than 10,000 square feet.
As of December 31, 2018, Lexington's
portfolio was 95.1% leased.
BALANCE SHEET/CAPITAL
MARKETS
During the fourth quarter, Lexington fully
repaid the remaining $149.0 million outstanding on its 2020 term
loan and satisfied $7.9 million of non-recourse debt.
Also in the fourth quarter, Lexington's Board of
Trustees increased the amount of common shares available for
repurchase under its repurchase authorization initially announced
on July 2, 2015 by 10.0 million common shares. Lexington
repurchased and retired 3,979,597 common shares at an average price
of $8.07 per share, bringing the total 2018 repurchases to
5,851,252 common shares at an average price of $8.05 per share.
Subsequent to December 31, 2018, Lexington repurchased and retired
441,581 common shares at an average price of $8.13 per share. As of
February 27, 2019, there were 10,306,255 common shares available
for repurchase.
Subsequent to December 31, 2018, Lexington
replaced its revolving credit facility and the 2021 term loan with
a new revolving credit facility and the continuation of the 2021
term loan, which extended the maturity of the revolving credit
facility to February 2023 and reduced the applicable margin rates
on the revolving credit facility and 2021 term loan.
2019 EARNINGS GUIDANCE
Lexington 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 $1.36 to $1.40. Lexington estimates that its Adjusted Company
FFO for the year ended December 31, 2019 will be within an expected
range of $0.75 to $0.79 per diluted common share. This guidance is
forward looking, excludes the impact of certain items and is based
on current expectations.
FOURTH QUARTER 2018 CONFERENCE CALL
Lexington will host a conference call today
February 27, 2019, at 8:30 a.m. Eastern Time, to discuss its
results for the quarter ended December 31, 2018. Interested
parties may participate in this conference call by dialing
1-844-825-9783 (U.S.), 1-412-317-5163 (International) or
1-855-669-9657 (Canada). A replay of the call will be available
through May 27, 2019, 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 10128738. 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
RelationsLexington Realty TrustPhone: (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, including dividend declarations to
achieve a $0.41 per share annualized dividend, (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 REIT, (5)
changes in general business and economic conditions, including the
impact of any legislation, (6) competition, (7) increases in real
estate construction costs, (8) changes in interest rates, (9)
changes in accessibility of debt and equity capital markets, and
(10) future impairment charges. Copies of the periodic reports
Lexington has filed with the Securities and Exchange Commission are
available on Lexington's web site at www.lxp.com. Forward-looking
statements, which are based on certain assumptions and describe
Lexington's future plans, strategies and expectations, are
generally identifiable by use of the words “believes,” “expects,”
“intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,”
“predicts,” “will,” “will likely result,” “is optimistic,” “goal,”
“objective” or similar expressions. Except as required by law,
Lexington undertakes no obligation to publicly release the results
of any revisions to those forward-looking statements which may be
made to reflect events or circumstances after the occurrence of
unanticipated events. Accordingly, there is no assurance that
Lexington's expectations will be realized.
References to Lexington refer to Lexington
Realty Trust and its consolidated subsidiaries. All interests in
properties and loans are held, and all property operating
activities are conducted, through special purpose entities, which
are separate and distinct legal entities that maintain separate
books and records, but in some instances are consolidated for
financial statement purposes and/or disregarded for income tax
purposes. The assets and credit of each special purpose entity with
a property subject to a mortgage loan are not available to
creditors to satisfy the debt or other obligations of any other
person, including any other special purpose entity or affiliate.
Consolidated entities that are not property owner subsidiaries do
not directly own any of the assets of a property owner subsidiary
(or the general partner, member of managing member of such property
owner subsidiary), but merely hold partnership, membership or
beneficial interests therein which interests are subordinate to the
claims of the property owner subsidiary's (or its general
partner's, member's or managing member's) creditors.
Non-GAAP Financial Measures -
Definitions
Lexington has used non-GAAP financial measures
as defined by the Securities and Exchange Commission Regulation G
in this Quarterly Earnings Press Release and in other public
disclosures.
Lexington believes that the measures defined
below are helpful to investors in measuring our performance or that
of an individual investment. Since these measures exclude certain
items which are included in their respective most comparable
measures under generally accepted accounting principles (“GAAP”),
reliance on the measures has limitations; management compensates
for these limitations by using the measures simply as supplemental
measures that are weighed in balance with other GAAP measures.
These measures are not necessarily indications of our cash flow
available to fund cash needs. Additionally, they should not be used
as an alternative to the respective most comparable GAAP measures
when evaluating Lexington's financial performance or cash flow from
operating, investing or financing activities or liquidity.
Cash Rent: Cash Rent is calculated by making
adjustments to GAAP rent to remove the impact of GAAP required
adjustments to rental income such as adjustments for straight-line
rents relating to free rent periods and contractual rent increases.
Cash Rent excludes lease termination income. Lexington believes
Cash Rent provides a meaningful indication of an investment's
ability to fund cash needs.
Company Funds Available for Distribution
(“FAD”): FAD is calculated by making adjustments to Adjusted
Company FFO (see below) for (1) straight-line rent adjustments, (2)
lease incentive amortization, (3) amortization of above/below
market leases, (4) lease termination payments, net, (5) non-cash
interest, net, (6) non-cash charges, net, (7) cash paid for tenant
improvements, and (8) cash paid for lease costs. Although FAD may
not be comparable to that of other real estate investment trusts
(“REITs”), Lexington believes it provides a meaningful indication
of its ability to fund cash needs. FAD is a non-GAAP financial
measure and should not be viewed as an alternative measurement of
operating performance to net income, as an alternative to net cash
flows from operating activities or as a measure of liquidity.
Funds from Operations (“FFO”) and Adjusted
Company FFO: Lexington believes that Funds from Operations, or FFO,
which is a non-GAAP measure, is a widely recognized and appropriate
measure of the performance of an equity REIT. Lexington believes
FFO is frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs, many of which
present FFO when reporting their results. FFO is intended to
exclude GAAP historical cost depreciation and amortization of real
estate and related assets, which assumes that the value of real
estate diminishes ratably over time. Historically, however, real
estate values have risen or fallen with market conditions. As a
result, FFO provides a performance measure that, when compared year
over year, reflects the impact to operations from trends in
occupancy rates, rental rates, operating costs, development
activities, interest costs and other matters without the inclusion
of depreciation and amortization, providing perspective that may
not necessarily be apparent from net income.
The National Association of Real Estate
Investment Trusts, or NAREIT, defines FFO as “net income
(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 estimated and are not presented or
intended to be viewed as a liquidity or performance measure that
present a numerical measure of Lexington's historical or future
financial performance, financial position or cash flows. The yield
or capitalization rate is calculated by dividing the annualized NOI
(as defined below, except GAAP rent adjustments are added back to
rental income to calculate GAAP yield or capitalization rate) the
investment is expected to generate (or has generated) divided by
the acquisition/completion cost (or sale) price.
Net Operating Income (“NOI”): NOI is a measure
of operating performance used to evaluate the individual
performance of an investment. This measure is not presented or
intended to be viewed as a liquidity or performance measure that
presents a numerical measure of Lexington's historical or future
financial performance, financial position or cash flows. Lexington
defines NOI as operating revenues (rental income (less GAAP rent
adjustments and lease termination income), tenant reimbursements
and other property income) less property operating expenses. Other
REITs may use different methodologies for calculating NOI, and
accordingly, Lexington's NOI may not be comparable to other
companies. Because NOI excludes general and administrative
expenses, interest expense, depreciation and amortization,
acquisition-related expenses, other nonproperty income and losses,
and gains and losses from property dispositions, it provides a
performance measure that, when compared year over year, reflects
the revenues and expenses directly associated with owning and
operating commercial real estate and the impact to operations from
trends in occupancy rates, rental rates, and operating costs,
providing a perspective on operations not immediately apparent from
net income. Lexington believes that net income is the most directly
comparable GAAP measure to NOI.
| LEXINGTON REALTY TRUST AND CONSOLIDATED
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited and in thousands, except share and
per share data) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three months ended December 31, |
|
Twelve months ended December 31, |
| |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
| Gross revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental |
$ |
80,745 |
|
|
$ |
93,909 |
|
|
$ |
364,731 |
|
|
$ |
359,832 |
|
| Tenant
reimbursements |
6,506 |
|
|
8,260 |
|
|
30,608 |
|
|
31,809 |
|
| Total
gross revenues |
87,251 |
|
|
102,169 |
|
|
395,339 |
|
|
391,641 |
|
| Expense applicable to
revenues: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
(38,498 |
) |
|
(45,262 |
) |
|
(168,191 |
) |
|
(173,968 |
) |
| Property
operating |
(9,614 |
) |
|
(12,410 |
) |
|
(42,675 |
) |
|
(49,194 |
) |
| General and
administrative |
(7,763 |
) |
|
(8,597 |
) |
|
(31,662 |
) |
|
(34,158 |
) |
| Litigation
settlement |
— |
|
|
— |
|
|
— |
|
|
(2,050 |
) |
| Non-operating
income |
1,825 |
|
|
5,381 |
|
|
3,491 |
|
|
10,378 |
|
| Interest and
amortization expense |
(16,656 |
) |
|
(20,055 |
) |
|
(79,880 |
) |
|
(77,883 |
) |
| Debt satisfaction gains
(charges), net |
(368 |
) |
|
3,818 |
|
|
(2,596 |
) |
|
6,196 |
|
| Impairment charges and
loan losses |
(4,953 |
) |
|
(1,419 |
) |
|
(95,813 |
) |
|
(44,996 |
) |
| Gains on sales of
properties |
13,336 |
|
|
8,350 |
|
|
252,913 |
|
|
63,428 |
|
| Income before provision
for income taxes and equity in earnings (losses) of
non-consolidated entities |
24,560 |
|
|
31,975 |
|
|
230,926 |
|
|
89,394 |
|
| Provision for income
taxes |
(402 |
) |
|
(743 |
) |
|
(1,728 |
) |
|
(1,917 |
) |
| Equity in earnings
(losses) of non-consolidated entities |
1,516 |
|
|
216 |
|
|
1,708 |
|
|
(848 |
) |
| Net income |
25,674 |
|
|
31,448 |
|
|
230,906 |
|
|
86,629 |
|
| Less net
income attributable to noncontrolling interests |
(266 |
) |
|
(598 |
) |
|
(3,491 |
) |
|
(1,046 |
) |
| Net income attributable
to Lexington Realty Trust shareholders |
25,408 |
|
|
30,850 |
|
|
227,415 |
|
|
85,583 |
|
| Dividends attributable
to preferred shares – Series C |
(1,572 |
) |
|
(1,572 |
) |
|
(6,290 |
) |
|
(6,290 |
) |
| Allocation to
participating securities |
(40 |
) |
|
(43 |
) |
|
(287 |
) |
|
(226 |
) |
| Net income attributable
to common shareholders |
$ |
23,796 |
|
|
$ |
29,235 |
|
|
$ |
220,838 |
|
|
$ |
79,067 |
|
| Net
income attributable to common shareholders – per common share
basic |
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.93 |
|
|
$ |
0.33 |
|
| Weighted-average common
shares outstanding – basic |
233,963,608 |
|
|
238,131,814 |
|
|
236,666,375 |
|
|
237,758,408 |
|
| Net
income attributable to common shareholders – per common share
diluted |
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.93 |
|
|
$ |
0.33 |
|
| Weighted-average common
shares outstanding – diluted |
238,292,912 |
|
|
241,821,194 |
|
|
240,810,990 |
|
|
241,537,837 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| LEXINGTON REALTY TRUST AND CONSOLIDATED
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETSAs of December 31,(Unaudited and in
thousands, except share and per share data) |
| |
|
|
|
|
|
|
|
| |
|
2018 |
|
|
|
2017 |
|
|
Assets: |
|
|
|
|
|
|
|
| Real estate, at
cost |
$ |
3,090,134 |
|
|
$ |
3,936,459 |
|
| Real estate -
intangible assets |
419,612 |
|
|
599,091 |
|
| |
3,509,746 |
|
|
4,535,550 |
|
| Less: accumulated
depreciation and amortization |
954,087 |
|
|
1,225,650 |
|
| Real
estate, net |
2,555,659 |
|
|
3,309,900 |
|
| Assets held for
sale |
63,868 |
|
|
2,827 |
|
| Cash and cash
equivalents |
168,750 |
|
|
107,762 |
|
| Restricted cash |
8,497 |
|
|
4,394 |
|
| Investment in and
advances to non-consolidated entities |
66,183 |
|
|
17,476 |
|
| Deferred expenses,
net |
15,937 |
|
|
31,693 |
|
| Rent receivable –
current |
3,475 |
|
|
5,450 |
|
| Rent receivable –
deferred |
58,692 |
|
|
52,769 |
|
| Other assets |
12,779 |
|
|
20,749 |
|
| Total assets |
$ |
2,953,840 |
|
|
$ |
3,553,020 |
|
| |
|
|
|
| Liabilities and
Equity: |
|
|
|
| Liabilities: |
|
|
|
| Mortgages and notes
payable, net |
$ |
570,420 |
|
|
$ |
689,810 |
|
| Revolving credit
facility borrowings |
— |
|
|
160,000 |
|
| Term loans payable,
net |
298,733 |
|
|
596,663 |
|
| Senior notes payable,
net |
496,034 |
|
|
495,198 |
|
| Trust preferred
securities, net |
127,296 |
|
|
127,196 |
|
| Dividends payable |
48,774 |
|
|
49,504 |
|
| Liabilities held for
sale |
386 |
|
|
— |
|
| Accounts payable and
other liabilities |
30,790 |
|
|
38,644 |
|
| Accrued interest
payable |
4,523 |
|
|
5,378 |
|
| Deferred revenue -
including below market leases, net |
20,531 |
|
|
33,182 |
|
| Prepaid rent |
9,675 |
|
|
16,610 |
|
| Total liabilities |
1,607,162 |
|
|
2,212,185 |
|
| |
|
|
|
| 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, 235,008,554
and 240,689,081 shares issued and outstanding in 2018 and 2017,
respectively |
24 |
|
|
24 |
|
| Additional
paid-in-capital |
2,772,855 |
|
|
2,818,520 |
|
| Accumulated
distributions in excess of net income |
(1,537,100 |
) |
|
(1,589,724 |
) |
| Accumulated other
comprehensive income |
76 |
|
|
1,065 |
|
| Total
shareholders’ equity |
1,329,871 |
|
|
1,323,901 |
|
| Noncontrolling
interests |
16,807 |
|
|
16,934 |
|
| Total
equity |
1,346,678 |
|
|
1,340,835 |
|
| Total liabilities and
equity |
$ |
2,953,840 |
|
|
$ |
3,553,020 |
|
| |
|
|
|
|
|
|
|
| LEXINGTON REALTY TRUST AND CONSOLIDATED
SUBSIDIARIESEARNINGS PER SHARE(Unaudited and in thousands,
except share and per share data) |
| |
|
|
|
|
|
|
|
| |
Three Months EndedDecember 31, |
|
Twelve Months Ended December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
EARNINGS PER SHARE: |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
| Net income attributable
to common shareholders |
$ |
23,796 |
|
|
$ |
29,235 |
|
|
$ |
220,838 |
|
|
$ |
79,067 |
|
| |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic |
233,963,608 |
|
|
238,131,814 |
|
|
236,666,375 |
|
|
237,758,408 |
|
| |
|
|
|
|
|
|
|
| Net income attributable to common shareholders - per common
share basic |
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.93 |
|
|
$ |
0.33 |
|
| |
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
| Net income
attributable to common shareholders - basic |
$ |
23,796 |
|
|
$ |
29,235 |
|
|
$ |
220,838 |
|
|
$ |
79,067 |
|
| Impact of
assumed conversions |
21 |
|
|
338 |
|
|
2,528 |
|
|
147 |
|
| Income from
continuing operations attributable to common shareholders |
$ |
23,817 |
|
|
$ |
29,573 |
|
|
$ |
223,366 |
|
|
$ |
79,214 |
|
| |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic |
233,963,608 |
|
|
238,131,814 |
|
|
236,666,375 |
|
|
237,758,408 |
|
| Effect of
dilutive securities: |
|
|
|
|
|
|
|
| Unvested share-based payment awards and options |
723,120 |
|
|
57,731 |
|
|
528,495 |
|
|
86,285 |
|
| Operating Partnership Units |
3,606,184 |
|
|
3,631,649 |
|
|
3,616,120 |
|
|
3,693,144 |
|
|
Weighted-average common shares outstanding - diluted |
238,292,912 |
|
|
241,821,194 |
|
|
240,810,990 |
|
|
241,537,837 |
|
| |
|
|
|
|
|
|
|
| Net income attributable to common shareholders - per common
share diluted |
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.93 |
|
|
$ |
0.33 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LEXINGTON REALTY TRUST AND CONSOLIDATED
SUBSIDIARIESADJUSTED 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, |
| |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
FUNDS FROM OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income
attributable to common shareholders |
$ |
23,796 |
|
|
$ |
29,235 |
|
|
$ |
220,838 |
|
|
$ |
79,067 |
|
|
Adjustments: |
|
|
|
|
|
|
|
| Depreciation and amortization |
37,819 |
|
|
44,050 |
|
|
164,261 |
|
|
168,683 |
|
| Impairment charges - real estate, including non-consolidated
entities |
4,953 |
|
|
1,419 |
|
|
95,813 |
|
|
43,214 |
|
| Noncontrolling interests - OP units |
22 |
|
|
339 |
|
|
2,528 |
|
|
147 |
|
| Amortization of leasing commissions |
679 |
|
|
1,212 |
|
|
3,930 |
|
|
5,285 |
|
| Joint venture and noncontrolling interest adjustment |
2,567 |
|
|
257 |
|
|
4,063 |
|
|
1,121 |
|
| Gains on sales of properties, including non-consolidated
entities and net of tax |
(14,821 |
) |
|
(8,350 |
) |
|
(254,269 |
) |
|
(64,880 |
) |
| FFO
available to common shareholders and unitholders -
basic |
55,015 |
|
|
68,162 |
|
|
237,164 |
|
|
232,637 |
|
| Preferred dividends |
1,572 |
|
|
1,572 |
|
|
6,290 |
|
|
6,290 |
|
| Amount allocated to participating securities |
40 |
|
|
43 |
|
|
287 |
|
|
226 |
|
| FFO
available to all equityholders and unitholders -
diluted |
56,627 |
|
|
69,777 |
|
|
243,741 |
|
|
239,153 |
|
| Litigation reserve |
— |
|
|
— |
|
|
— |
|
|
2,050 |
|
| Debt satisfaction (gains) charges, net, including
non-consolidated entities |
368 |
|
|
(3,796 |
) |
|
2,596 |
|
|
(6,174 |
) |
| Impairment loss - loan receivable |
— |
|
|
— |
|
|
— |
|
|
5,294 |
|
| Unearned contingent acquisition consideration |
— |
|
|
(3,922 |
) |
|
— |
|
|
(3,922 |
) |
| Other(1) |
(3,305 |
) |
|
1,071 |
|
|
(10,038 |
) |
|
2,171 |
|
|
Adjusted Company FFO available to all equityholders and
unitholders - diluted |
53,690 |
|
|
63,130 |
|
|
236,299 |
|
|
238,572 |
|
| |
|
|
|
|
|
|
|
|
FUNDS AVAILABLE FOR DISTRIBUTION: |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
| Straight-line rents |
(4,722 |
) |
|
(7,232 |
) |
|
(20,968 |
) |
|
(19,784 |
) |
| Lease incentives |
227 |
|
|
513 |
|
|
1,686 |
|
|
1,969 |
|
| Amortization of above/below market leases |
(28 |
) |
|
364 |
|
|
285 |
|
|
1,544 |
|
| Lease termination payments, net |
(309 |
) |
|
(253 |
) |
|
(1,234 |
) |
|
(690 |
) |
| Non-cash interest, net |
854 |
|
|
1,018 |
|
|
4,209 |
|
|
2,465 |
|
| Non-cash charges, net |
1,611 |
|
|
2,119 |
|
|
6,810 |
|
|
8,318 |
|
| Tenant improvements |
(1,608 |
) |
|
(1,136 |
) |
|
(8,271 |
) |
|
(11,203 |
) |
| Lease costs |
(1,448 |
) |
|
(1,242 |
) |
|
(4,522 |
) |
|
(6,526 |
) |
| Joint venture and non-controlling interest adjustment |
(449 |
) |
|
— |
|
|
(505 |
) |
|
— |
|
|
Company Funds Available for Distribution |
$ |
47,818 |
|
|
$ |
57,281 |
|
|
$ |
213,789 |
|
|
$ |
214,665 |
|
| |
|
|
|
|
|
|
|
| Per
Common Share and Unit Amounts |
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
| FFO |
$ |
0.23 |
|
|
$ |
0.28 |
|
|
$ |
0.99 |
|
|
$ |
0.96 |
|
|
Diluted: |
|
|
|
|
|
|
|
| FFO |
$ |
0.23 |
|
|
$ |
0.28 |
|
|
$ |
0.99 |
|
|
$ |
0.97 |
|
| Adjusted
Company FFO |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.96 |
|
|
$ |
0.97 |
|
| |
|
|
|
|
|
|
|
|
Weighted-Average Common Shares |
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
| Weighted-average common shares outstanding - basic EPS |
233,963,608 |
|
|
238,131,814 |
|
|
236,666,375 |
|
|
237,758,408 |
|
| Operating partnership units(2) |
3,606,184 |
|
|
3,631,649 |
|
|
3,616,120 |
|
|
3,693,144 |
|
| Weighted-average common shares outstanding - basic FFO |
237,569,792 |
|
|
241,763,463 |
|
|
240,282,495 |
|
|
241,451,552 |
|
| |
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
| Weighted-average common shares outstanding - diluted EPS |
238,292,912 |
|
|
241,821,194 |
|
|
240,810,990 |
|
|
241,537,837 |
|
| Unvested share-based payment awards |
— |
|
|
713,351 |
|
|
— |
|
|
666,127 |
|
| Preferred shares - Series C |
4,710,570 |
|
|
4,710,570 |
|
|
4,710,570 |
|
|
4,710,570 |
|
| Weighted-average common shares outstanding - diluted FFO |
243,003,482 |
|
|
247,245,115 |
|
|
245,521,560 |
|
|
246,914,534 |
|
|
|
| (1)
"Other" primarily consisted of the acceleration of below-market
lease intangible accretion in 2018 and transaction related costs in
2017 and 2016.(2) Includes OP units other than OP units held
by Lexington. |
|
|
| LEXINGTON REALTY TRUST AND CONSOLIDATED
SUBSIDIARIESRECONCILIATION OF NON-GAAP
MEASURES(UNAUDITED) |
| |
|
|
2019 EARNINGS GUIDANCE |
|
| |
Twelve Months EndedDecember 31, 2019 |
| |
Range |
| Estimated: |
|
|
|
|
|
|
|
| Net income
attributable to common shareholders per diluted common
share(1) |
$ |
1.36 |
|
|
$ |
1.40 |
|
| Depreciation and amortization |
0.56 |
|
|
0.56 |
|
| Impact of capital transactions |
(1.17 |
) |
|
(1.17 |
) |
| Estimated
Adjusted Company FFO per diluted common share |
$ |
0.75 |
|
|
$ |
0.79 |
|
|
|
| (1)
Assumes all convertible securities are dilutive. |
|
|
LXP Industrial (NYSE:LXP)
Historical Stock Chart
From Mar 2024 to Apr 2024
LXP Industrial (NYSE:LXP)
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From Apr 2023 to Apr 2024
