×

Lexington Realty Trust Reports Fourth Quarter 2016 Results

NEW YORK, March 01, 2017 (GLOBE NEWSWIRE) -- Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the fourth quarter and year ended December 31, 2016.

Fourth Quarter 2016 Highlights

  • Generated Net Income attributable to common shareholders of $14.4 million, or $0.06 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $59.7 million, or $0.24 per diluted common share.
  • Acquired two industrial properties for an aggregate cost of $97.5 million and completed three of the four buildings of the Lake Jackson, TX build-to-suit project at an estimated cost of $78.5 million.
  • Disposed of nine office properties for $87.1 million.
  • Invested $25.4 million in on-going build-to-suit projects.
  • Committed to acquire two industrial properties in 2017 for an aggregate cost of $71.7 million.
  • Completed 658,000 square feet of new leases and lease extensions with overall portfolio 96.0% leased at quarter end.

Full Year 2016 Highlights

  • Generated Net Income attributable to common shareholders of $89.1 million, or $0.37 per diluted common share.
  • Generated Adjusted Company FFO of $277.7 million, or $1.14 per diluted common share, inclusive of $0.03 per diluted common share related to the Westlake, Texas termination payment received and fully included as income in the second quarter of 2016.
  • Acquired/completed six consolidated properties and one nonconsolidated property for an aggregate initial basis of $390.1 million.
  • Disposed of 28 consolidated properties for gross proceeds of $663.0 million.
  • Completed 4.7 million square feet of new leases and lease extensions.
  • Retired $374.1 million of secured debt, which had a weighted-average fixed interest rate of 5.0% and a weighted-average term to maturity of 6.6 years and obtained $254.7 million of secured debt with a weighted-average fixed interest rate of 4.3% and a weighted-average term to maturity of 19.1 years.
  • Repaid all $177.0 million of borrowings outstanding under its $400.0 million unsecured revolving credit facility.
  • Repurchased 1.2 million common shares at an average price of $7.56 per share and issued 1.0 million common shares at an average price of $10.75 per share under its At-The-Market (“ATM”) offering program.

Subsequent Events

  • Disposed of six properties for aggregate gross proceeds of $88.9 million.
  • Acquired two industrial properties for an aggregate purchase price of $50.6 million.
  • Issued 1.6 million common shares at an average gross price of $10.89 per share under its ATM offering program.
  • Completed the last building at the Lake Jackson, Texas build-to-suit project.
  • Sold the tenant-in-common interest in the Oklahoma City, Oklahoma property for $6.3 million and collected $8.5 million in full satisfaction of the loan receivable owed from the other tenant-in-common.
  • Sold the Kennewick, Washington loan receivable for $80.4 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 “Positive fourth quarter activity rounded out a highly successful year for Lexington. Sales during the quarter brought total 2016 consolidated disposition volume to $663 million at GAAP and cash cap rates of 10.2% and 5.1%, respectively. We used the proceeds to complete $390 million of new investment activity at favorable spreads and to improve our balance sheet, which brought our leverage to 5.2x net debt to Adjusted EBITDA, its lowest level in recent years. Our investments were more focused in the industrial area during the quarter, and this represents a trend that is expected to continue in 2017.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2016, total gross revenues were $95.3 million, compared with total gross revenues of $106.6 million for the quarter ended December 31, 2015. The decrease was primarily attributable to 2016 property sales, particularly the sale of the New York City land investments, and lease expirations, partially offset by revenue generated from property acquisitions and new leases.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2016, net income attributable to common shareholders was $14.4 million, or $0.06 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2015 of $33.2 million, or $0.14 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2016, Lexington generated Adjusted Company FFO of $59.7 million, or $0.24 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2015 of $69.6 million, or $0.29 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2016, Lexington declared a regular quarterly common share dividend/distribution for the quarter ended December 31, 2016 of $0.175 per common share/unit, which was paid on January 17, 2017 to common shareholders/unitholders of record as of December 30, 2016. Lexington previously announced and declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred Shares”), which was paid on February 15, 2017 to Series C Preferred Shareholders of record as of January 31, 2017.

Transaction Activity

ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Primary Tenant
(Guarantor)
Location Sq. Ft. Property
Type
Initial
Basis
($000)
Estimated
Annual
GAAP
Rent
($000)
Initial
Annualized
Cash Rent
($000)
Estimated
GAAP
Yield
Initial
Cash
Yield
Approximate
Lease

Term
(Yrs)
Aryzta, LLC (Aryzta AG) Romeoville, IL 188,000 Industrial $52,700 $3,544 $3,301 6.7% 6.3% 15
Amazon.com.dedc, LLC (Amazon.com Inc.) Edwardsville, IL 770,000 Industrial 44,800 2,682 2,501 6.0% 5.6% 10
The Dow Chemical Company(1) Lake Jackson, TX 389,000 Office 78,484 8,673 7,108 9.5% 7.7% 20
1,347,000 $175,984 $14,899 $12,910 7.8% 6.7%
1. Three of four buildings completed in Q4 2016. Estimated GAAP and cash yields reflect estimated costs of completion of final building and developer partner payout of all four buildings, as set forth in the table immediately below.


ON-GOING BUILD-TO-SUIT PROJECTS
Location Sq. Ft. Property
Type
Maximum
Commitment/Estimated
Completion Cost
($000)
GAAP Investment
Balance as of
12/31/2016 ($000)(1)
Estimated
Completion
Date
Approximate
Lease
Term
(Yrs)
Lake Jackson, TX(2) 275,000 Office $78,447 $55,960 1Q 17 20
Charlotte, NC 201,000 Office 62,445 40,443 2Q 17 15
Opelika, AL 165,000 Industrial 37,000 10,249 2Q 17 25
641,000 $177,892 $106,652
1. During the quarter, Lexington funded $25.4 million of the projected costs of the above projects, including the completed Lake Jackson buildings.
2. Total project is 664,000 square feet. 389,000 square feet completed in Q4 2016 as set forth in the table above.


FORWARD PURCHASE COMMITMENTS
Location Sq. Ft. Property
Type
Maximum
Acquisition Cost
($000)
Estimated
Acquisition
Date
Estimated
GAAP

Yield
Estimated
Initial
Cash Yield
Approximate
Lease
Term
(Yrs)
Grand Prairie, TX 215,000 Industrial $24,725 2Q 17 7.6% 6.2% 20
Warren, MI(1) 260,000 Industrial 47,000 3Q 17 8.3% 7.3% 15
475,000 $71,725 8.0% 6.9%
1. Lexington provided a $4.6 million letter of credit to secure its obligation to purchase this property.


PROPERTY DISPOSITIONS
Primary Tenant Location Property
Type
Gross
Disposition
Price ($000)
Annualized Net
Income(1)(2)
($000)
Annualized
NOI(1) ($000)
Month of
Disposition
Vacant Canonsburg, PA Office $8,250 $(330) $(330) October
Avnet, Inc. Phoenix, AZ Office 32,000 1,276 1,949 October
Bank of America, National Association Los Angeles, CA Office 19,200 1,014 1,107 November
BluePearl Holdings, LLC(3) Tampa, FL/Houston TX Office 15,177 566 946 November
Nextel of Texas, Inc.(4) Temple, TX Office 7,463 (366) 800 December
Vacant Westmont, IL Office 5,000 (682) (635) December
$87,090 $1,478 $3,837
1. Quarterly period prior to sale annualized.
2. Excludes impairment charges recognized.
3. Includes four properties.
4. Conveyed to lender in a foreclosure sale.

LOAN INVESTMENTS

Lexington collected an aggregate $1.6 million in full satisfaction of three loan investments secured by portfolios of single-tenant retail properties.

Leasing Activity

During the fourth quarter of 2016, Lexington executed the following new and extended leases:

LEASE EXTENSIONS
Location Primary Tenant(1)Prior
Term
Lease
Expiration Date
Sq. Ft.
Office/Multi-Tenant
1 San AntonioTX United Healthcare Services, Inc. 11/2017 11/2024 142,500
2-3 VariousHI/PA N/A 2016-2017 2019-2020 1,521
3 Total office lease extensions 144,021
Industrial/Multi-Tenant
1 PlymouthIN Bay Valley Foods, LLC 12/2016 12/2018 300,500
2 AntiochTN Wirtgen America, Inc. 12/2016 12/2019 73,500
2 Total industrial/multi-tenant lease extensions 374,000
Other
1 ChattanoogaTN BI-LO LLC/K-VA-T Food Stores, Inc. 06/2017 06/2019 42,130
1 Total other lease extensions 42,130
6 Total lease extensions 560,151
NEW LEASES
Location Lease
Expiration Date
Sq. Ft.
Office/Multi-Tenant
1 Farmers BranchTX Brain Synergy Institute, LLC d/b/a Cerebrum Health Centers 09/2024 12,707
2 RichmondVA N/A 02/2027 8,503
3 HamptonVA Wisconsin Physicians Service Insurance Corporation(2) 08/2023 71,073
4-9 Honolulu/Farmers BranchHI/TX N/A 2017-2022 5,436
9 Total new office leases 97,719
9 Total new leases 97,719
15 TOTAL NEW AND EXTENDED LEASES 657,870
1. Leases greater than 10,000 square feet.
2. Lease commences January 1, 2020 following expiration of existing tenant's lease.

As of December 31, 2016, Lexington's portfolio was 96.0% leased, excluding any property subject to a mortgage in default.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter of 2016, Lexington issued 976,109 common shares at an average price of $10.75 per share under its ATM offering program.

During the fourth quarter of 2016, Lexington satisfied $14.0 million of secured debt with a weighted-average interest rate of 5.2%.

2017 EARNINGS GUIDANCE

Lexington estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2017 will be within an expected range of $0.64 to $0.67. Lexington estimates that its Adjusted Company FFO for the year ended December 31, 2017 will be within an expected range of $0.94 to $0.98 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

FOURTH QUARTER 2016 CONFERENCE CALL

Lexington will host a conference call today, Wednesday, March 1, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 2016. 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 June 1, 2017, 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 10100256. A live webcast of the conference call will be 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 and debt investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its 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.

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 and its subsidiaries 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, but not limited to, 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, 2017, (3) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction on the terms described herein or at all, (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 revise those forward-looking statements to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.

References to Lexington refer to Lexington Realty Trust and its consolidated subsidiaries. All interests in properties and loans are held through special purpose entities, which are separate and distinct legal entities, some of which are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan (a “property owner subsidiary”) 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 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 (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for non-consolidated partnerships and joint ventures.” NAREIT clarified its computation of FFO to exclude impairment charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

Lexington presents 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 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) 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 that of 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,
2016 2015 2016 2015
Gross revenues:
Rental$87,261 $98,934 $398,065 $399,485
Tenant reimbursements8,065 7,692 31,431 31,354
Total gross revenues95,326 106,626 429,496 430,839
Expense applicable to revenues:
Depreciation and amortization(41,361) (41,403) (166,048) (163,198)
Property operating(12,512) (14,055) (47,355) (59,655)
General and administrative(8,072) (6,750) (31,104) (29,276)
Non-operating income3,543 3,216 13,043 11,429
Interest and amortization expense(19,459) (21,466) (88,032) (89,739)
Debt satisfaction gains (charges), net(157) 11,397 (975) 25,150
Impairment charges(24,332) (2,762) (100,236) (36,832)
Gains on sales of properties23,097 81,510 23,307
Income before provision for income taxes, equity in earnings of non-consolidated entities and discontinued operations16,073 34,803 90,299 112,025
Provision for income taxes(340) (104) (1,439) (568)
Equity in earnings of non-consolidated entities1,196 814 7,590 1,752
Income from continuing operations16,929 35,513 96,450 113,209
Discontinued operations:
Income from discontinued operations 109
Provision for income taxes (4)
Gains on sales of properties 1,577
Total discontinued operations 1,682
Net income16,929 35,513 96,450 114,891
Less net income attributable to noncontrolling interests(928) (663) (826) (3,188)
Net income attributable to Lexington Realty Trust shareholders16,001 34,850 95,624 111,703
Dividends attributable to preferred shares – Series C(1,572) (1,572) (6,290) (6,290)
Allocation to participating securities(38) (49) (225) (313)
Net income attributable to common shareholders$14,391 $33,229 $89,109 $105,100
Income per common share – basic:
Income from continuing operations$0.06 $0.14 $0.38 $0.44
Income from discontinued operations 0.01
Net income attributable to common shareholders$0.06 $0.14 $0.38 $0.45
Weighted-average common shares outstanding – basic235,066,967 233,448,100 233,633,058 233,455,056
Income per common share – diluted:
Income from continuing operations$0.06 $0.14 $0.37 $0.44
Income from discontinued operations 0.01
Net income attributable to common shareholders$0.06 $0.14 $0.37 $0.45
Weighted-average common shares outstanding – diluted235,204,568 239,411,055 237,679,031 233,751,775
Amounts attributable to common shareholders:
Income from continuing operations$14,391 $33,229 $89,109 $103,418
Income from discontinued operations 1,682
Net income attributable to common shareholders$14,391 $33,229 $89,109 $105,100


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31,
(Unaudited and in thousands, except share and per share data)
2016 2015
Assets:
Real estate, at cost$3,533,172 $3,789,711
Real estate - intangible assets597,294 692,778
Investments in real estate under construction106,652 95,402
4,237,118 4,577,891
Less: accumulated depreciation and amortization1,208,792 1,179,969
Real estate, net3,028,326 3,397,922
Assets held for sale23,808 24,425
Cash and cash equivalents86,637 93,249
Restricted cash31,142 10,637
Investment in and advances to non-consolidated entities67,125 31,054
Deferred expenses, net33,360 42,000
Loans receivable, net94,210 95,871
Rent receivable – current7,516 7,193
Rent receivable – deferred31,455 87,547
Other assets37,888 18,505
Total assets$3,441,467 $3,808,403
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net$738,047 $872,643
Revolving credit facility borrowings 177,000
Term loans payable, net501,093 500,076
Senior notes payable, net494,362 493,526
Convertible notes payable, net 12,126
Trust preferred securities, net127,096 126,996
Dividends payable47,264 45,440
Liabilities held for sale191 8,405
Accounts payable and other liabilities59,601 41,479
Accrued interest payable6,704 8,851
Deferred revenue - including below market leases, net39,895 42,524
Prepaid rent14,723 16,806
Total liabilities2,028,976 2,345,872
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, 238,037,177 and 234,575,225 shares issued and outstanding in 2016 and 2015, respectively24 23
Additional paid-in-capital2,800,736 2,776,837
Accumulated distributions in excess of net income(1,500,966) (1,428,908)
Accumulated other comprehensive loss(1,033) (1,939)
Total shareholders’ equity1,392,777 1,440,029
Noncontrolling interests19,714 22,502
Total equity1,412,491 1,462,531
Total liabilities and equity$3,441,467 $3,808,403


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,
2016 2015 2016 2015
EARNINGS PER SHARE:
Basic:
Income from continuing operations attributable to common shareholders$14,391 $33,229 $89,109 $103,418
Income from discontinued operations attributable to common shareholders 1,682
Net income attributable to common shareholders$14,391 $33,229 $89,109 $105,100
Weighted-average number of common shares outstanding 235,066,967 233,448,100 233,633,058 233,455,056
Income per common share:
Income from continuing operations$0.06 $0.14 $0.38 $0.44
Income from discontinued operations 0.01
Net income attributable to common shareholders$0.06 $0.14 $0.38 $0.45
Diluted:
Income from continuing operations attributable to common shareholders - basic$14,391 $33,229 $89,109 $103,418
Impact of assumed conversions 711 (159)
Income from continuing operations attributable to common shareholders 14,391 33,940 88,950 103,418
Income from discontinued operations attributable to common shareholders - basic 1,682
Impact of assumed conversions
Income from discontinued operations attributable to common shareholders 1,682
Net income attributable to common shareholders$14,391 $33,940 $88,950 $105,100
Weighted-average common shares outstanding - basic 235,066,967 233,448,100 233,633,058 233,455,056
Effect of dilutive securities:
Share options 137,601 220,125 230,352 296,719
Operating Partnership Units 3,834,962 3,815,621
6.00% Convertible Guaranteed Notes 1,907,868
Weighted-average common shares outstanding - diluted 235,204,568 239,411,055 237,679,031 233,751,775
Income per common share:
Income from continuing operations$0.06 $0.14 $0.37 $0.44
Income from discontinued operations 0.01
Net income attributable to common shareholders$0.06 $0.14 $0.37 $0.45


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,
2016 2015 2016 2015
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders $14,391 $33,229 $89,109 $105,100
Adjustments:
Depreciation and amortization 39,840 39,708 159,363 157,644
Impairment charges - real estate 24,332 2,762 100,236 36,832
Noncontrolling interests - OP units 686 457 (159) 1,999
Amortization of leasing commissions 1,520 1,695 6,684 5,554
Joint venture and noncontrolling interest adjustment 369 453 1,111 1,788
Gains on sales of properties, including non-consolidated entities (23,729) (487) (87,520) (25,371)
Tax on sales of properties 2 52
FFO available to common shareholders and unitholders - basic 57,411 77,817 268,876 283,546
Preferred dividends 1,572 1,572 6,290 6,290
Interest and amortization on 6.00% Convertible Notes 253 532 1,048
Amount allocated to participating securities 38 49 225 313
FFO available to all equityholders and unitholders - diluted 59,021 79,691 275,923 291,197
Debt satisfaction (gains) charges, net, including non-consolidated entities 157 (11,397) 975 (25,086)
Transaction costs/Other 508 1,285 837 1,864
Adjusted Company FFO available to all equityholders and unitholders - diluted 59,686 69,579 277,735 267,975
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line rents (2,051) (12,460) (37,748) (47,702)
Lease incentives 417 387 1,673 1,544
Amortization of above/below market leases 530 418 2,057 261
Lease termination payments, net (1,814) 2,420 (8,216) 3,086
Non-cash interest, net (387) (638) (1,913) (118)
Non-cash charges, net 2,092 2,213 8,998 8,821
Tenant improvements (665) (7,242) (1,957) (20,426)
Lease costs (393) (2,439) (6,558) (6,681)
Company Funds Available for Distribution $57,415 $52,238 $234,071 $206,760
Per Common Share and Unit Amounts
Basic:
FFO $0.24 $0.33 $1.13 $1.19
Diluted:
FFO $0.24 $0.33 $1.13 $1.19
Adjusted Company FFO $0.24 $0.29 $1.14 $1.10
Weighted-Average Common Shares
Basic:
Weighted-average common shares outstanding - basic EPS 235,066,967 233,448,100 233,633,058 233,455,056
Operating partnership units(1) 3,808,185 3,834,962 3,815,621 3,848,434
Weighted-average common shares outstanding - basic FFO 238,875,152 237,283,062 237,448,679 237,303,490
Diluted:
Weighted-average common shares outstanding - diluted EPS 235,204,568 239,411,055 237,679,031 233,751,775
Unvested share-based payment awards 674,053 549,049 3,326
6.00% Convertible Guaranteed Notes 1,077,626 2,041,629
Operating partnership units(1) 3,808,185 3,848,434
Preferred shares - Series C 4,710,570 4,710,570 4,710,570 4,710,570
Weighted-average common shares outstanding - diluted FFO 244,397,376 244,121,625 244,016,276 244,355,734
(1) Includes OP units other than OP units held by Lexington.


RECONCILIATION OF NON-GAAP MEASURES
2017 EARNINGS GUIDANCE
Twelve Months Ended
December 31, 2017
Range
Estimated:
Net income attributable to common shareholders per diluted common share(1)$0.64 $0.67
Depreciation and amortization0.67 0.68
Impact of capital transactions(0.37) (0.37)
Estimated Adjusted Company FFO per diluted common share$0.94 $0.98
(1) Assumes all convertible securities are dilutive.



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

Source:Lexington Realty Trust

More From Press Releases