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Lexington Realty Trust Reports Fourth Quarter 2020 Results

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February 18, 2021 6:00 AM EST

NEW YORK, Feb. 18, 2021 (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, 2020.

Fourth Quarter 2020 Highlights

  • Generated Net Income attributable to common shareholders of $102.7 million, or $0.37 per diluted common share.
  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $55.0 million, or $0.19 per diluted common share.
  • Collected 99.8% of Cash Base Rents due during the fourth quarter.
  • Disposed of eight properties for an aggregate gross disposition price of $292.3 million.
  • Acquired four warehouse/distribution properties for an aggregate cost of $182.0 million.
  • Invested an aggregate of $33.8 million in development projects.
  • Increased industrial portfolio to 90.8% of gross real estate assets, excluding held for sale assets.
  • Completed 1.7 million square feet of lease extensions.
  • Fully leased the 320,190 square foot warehouse/distribution speculative development project located in Rickenbacker, Ohio.
  • Declared a quarterly common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%.
  • Satisfied $197.1 million of secured debt with a weighted-average interest rate of 4.3%.

Full Year 2020 Highlights

  • Generated Net Income attributable to common shareholders of $176.8 million, or $0.66 per diluted common share.
  • Generated Adjusted Company FFO of $209.5 million, or $0.76 per diluted common share.
  • Collected 99.8% of Cash Base Rents.
  • Disposed of 16 properties for an aggregate gross disposition price of $432.8 million.
  • Acquired 16 warehouse/distribution properties for an aggregate cost of $611.8 million.
  • Invested an aggregate of $60.2 million in development projects.
  • Completed 5.2 million square feet of new leases and lease extensions, raising industrial renewal Cash Base Rents by 17.5%.
  • Raised net proceeds of approximately $225.0 million through an underwritten equity offering and the ATM program.
  • Repurchased 1.3 million common shares at an average price of $8.28 per share.
  • Issued $400.0 million aggregate principal amount of 2.70% Senior Notes due 2030 at an issuance price of 99.233% of the principal amount.
  • Satisfied $236.0 million of secured debt with a weighted-average interest rate of 4.5%.
  • Repurchased $61.2 million and $51.1 million aggregate principal amount of outstanding 4.25% Senior Notes due 2023 and 4.40% Senior Notes due 2024, respectively.

Subsequent Events

  • Acquired three warehouse/distribution properties for an aggregate gross cost of approximately $50.8 million.
  • Disposed of two office properties for an aggregate gross disposition price of $20.2 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, Chairman, Chief Executive Officer and President of Lexington, commented “Our fourth quarter results were strong, and we are pleased with 2020 execution in all areas of our business. We remained active on both the acquisition and disposition front during the quarter and our industrial exposure reached 91% of our overall gross real estate assets at year-end. In 2020, we added 6.6 million square feet of high-quality warehouse/distribution product to our industrial portfolio and made progress adding to our development pipeline. Consistent rental collections of over 99% were achieved throughout the year, and industrial renewal rents grew over 3% in the fourth quarter and 17.5% overall in 2020. We are well-positioned heading into 2021 with leverage low at 4.8x Net Debt to Adjusted EBITDA, ample cash on the balance sheet, and a healthy investment pipeline.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2020, total gross revenues were $83.3 million, compared with total gross revenues of $83.0 million for the quarter ended December 31, 2019. The increase was primarily attributable to an increase in rental revenue due to property acquisitions, partially offset by a decrease in rental revenue due to property sales.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2020, net income attributable to common shareholders was $102.7 million, or $0.37 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2019 of $83.6 million, or $0.33 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2020, Lexington generated Adjusted Company FFO of $55.0 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2019 of $52.4 million, or $0.20 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2020, Lexington declared its quarterly common share/unit dividend/distribution for the quarter ended December 31, 2020 of $0.1075 per common share/unit which was paid on January 15, 2021 to common shareholders/unitholders of record as of December 31, 2020. 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, 2020, which was paid February 16, 2021 to Series C Preferred shareholders of record as of January 31, 2021.

TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS
Property Type Market Sq. Ft. Initial Basis ($000) Approximate Lease Term (Yrs)
Industrial - warehouse/distribution Phoenix, AZ 201,784  $87,820  12
Industrial - warehouse/distribution Dallas, TX 500,556  44,030  4
Industrial - warehouse/distribution Greenville/Spartanburg, SC 213,200  18,595  10
Industrial - warehouse/distribution Dallas, TX 468,300  31,556  9
    1,383,840  $182,001   

Including fourth quarter acquisition activity, consolidated 2020 acquisition activity totaled $611.8 million at aggregate weighted-average GAAP and Cash capitalization rates of 5.4% and 5.0%, respectively.

DEVELOPMENT PROJECTS  
Project (% owned) Market Estimated Sq. Ft. Estimated Project Cost ($000) GAAP Investment Balance as of 12/31/2020 ($000)(1) Lexington Amount Funded as of 12/31/2020 ($000) Estimated Completion DateApproximate Lease Term (Yrs)% Leased as of 12/31/2020
               
Consolidated:              
KeHE Distributors BTS (100%) Phoenix, AZ 468,182 $72,000  $19,609  $17,766  3Q 2115100%
Fairburn (90%)(2) Atlanta, GA 910,000 53,812  39,824  33,195  1Q 21TBD0%
Rickenbacker (100%) Columbus, OH 320,190 20,300  16,473  12,225  2Q 213100%
      $146,112  $75,906  $63,186     
               
Non-consolidated:             
ETNA Park 70 (90%)(3) Columbus, OH TBD TBD $12,514  $12,909  TBDTBD0%
ETNA Park 70 East (90%)(3) Columbus, OH TBD TBD 7,484  7,614  TBDTBD0%
        $19,998  $20,523     
  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. Estimated project cost excludes potential developer partner promote.
  3. Plans and specifications for completion have not been completed and the square footage, project cost and completion date cannot be estimated.
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
Vacant Thomson, GA Industrial $6,971  $—  $(278) October 0%
Vacant (2) Boca Raton, FL Office 18,413  (3,160) (749) October 0%
CardWorks Orlando, FL Office 14,250  763  1,019  October 100%
Dow Lake Jackson, TX Office 191,992  3,544  12,858  November 100%
TI Automotive Lavonia, GA Industrial 13,000  789  870  November 100%
Versum Tempe, AZ Office 22,000  593  1,347  December 100%
Kohl's (3) Pataskala, OH Industrial 10,645  956  444  December 100%
MAHLE Industries Olive Branch, MS Industrial 15,000  650  914  December 100%
      $292,271  $4,135  $16,425     
  1. Generally, quarterly period prior to sale annualized, excluding impairment charges.
  2. Sold in a foreclosure sale. Disposition price reflects non-recourse debt balance.
  3. Property acquired from ETNA Park 70 in 2018 for a cost basis of $3.6 million and ground leased to user. Tenant exercised purchase option in accordance with the lease.

Including fourth quarter disposition activity, consolidated 2020 property disposition volume totaled $432.8 million at aggregate weighted-average GAAP and Cash capitalization rates of 5.8% and 5.0%, respectively.

LEASING

During the fourth quarter of 2020, Lexington executed the following extensions:

  LEASE EXTENSIONS    
            
  Location Primary Tenant(1) Prior Term Lease Expiration Date Sq. Ft.
           
  Industrial        
1 LaurensSC Michelin 05/2021 11/2021 1,164,000
2 Dry RidgeKY Dana 06/2025 06/2031 336,350
2 Total industrial lease extensions      1,500,350 
            
  Office / Multi-tenant Office        
1 PhoenixAZ ATOS IT Solutions 03/2021 03/2026 28,576
2 HerndonVA United States of America 05/2022 05/2027 159,644
2 Total office lease extensions       188,220 
            
            
4 TOTAL EXTENDED LEASES       1,688,570 
  1. Leases greater than 10,000 square feet.

As of December 31, 2020, Lexington's portfolio was 98.3% leased.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter of 2020, Lexington satisfied an aggregate of $197.1 million of non-recourse debt with a weighted-average interest rate of 4.3%.

In the fourth quarter of 2020, Lexington entered into forward sales contracts for 1.1 million common shares under its At-the-Market offering program. As of December 31, 2020, the Company had forward sales contracts for 5.0 million common shares with a then settlement price of $55.1 million.

Lexington ended 2020 at 4.8x Net Debt to Adjusted EBITDA. Lexington's $600.0 million unsecured revolving credit facility remains fully available.

2021 EARNINGS GUIDANCE

Lexington estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2021 will be within a range of $0.58 to $0.62. Lexington estimates that its Adjusted Company FFO for the year ended December 31, 2021 will be within an expected range of $0.72 to $0.76 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

FOURTH QUARTER 2020 CONFERENCE CALL

Lexington will host a conference call today February 18, 2021, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 2020. 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 18, 2021, 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 10151943. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

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. 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 Trust Phone: (212) 692-7200 E-mail: [email protected]

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, 2021, (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 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,
 2020 2019 2020 2019
Gross revenues:       
Rental revenue$82,390   $81,564   $325,811   $320,622  
Other revenue925   1,472   4,637   5,347  
Total gross revenues83,315   83,036   330,448   325,969  
Expense applicable to revenues:       
Depreciation and amortization(40,723)  (35,977)  (161,592)  (147,594) 
Property operating(10,019)  (11,052)  (41,914)  (42,018) 
General and administrative(7,759)  (7,133)  (30,371)  (30,785) 
Non-operating income429   335   743   2,262  
Interest and amortization expense(12,591)  (14,380)  (55,201)  (65,095) 
Debt satisfaction gains (charges), net2,502   10   21,452   (4,517) 
Impairment charges(6,668)  (2,974)  (14,460)  (5,329) 
Gains on sales of properties97,163   74,227   139,039   250,889  
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities105,649   86,092   188,144   283,782  
Provision for income taxes(223)  (271)  (1,584)  (1,379) 
Equity in earnings (losses) of non-consolidated entities(204)  (398)  (169)  2,890  
Net income105,222   85,423   186,391   285,293  
Less net income attributable to noncontrolling interests(844)  (192)  (3,089)  (5,383) 
Net income attributable to Lexington Realty Trust shareholders104,378   85,231   183,302   279,910  
Dividends attributable to preferred shares – Series C(1,572)  (1,572)  (6,290)  (6,290) 
Allocation to participating securities(94)  (85)  (224)  (395) 
Net income attributable to common shareholders$102,712   $83,574   $176,788   $273,225  
Net income attributable to common shareholders – per common share basic$0.37   $0.34   $0.66   $1.15  
Weighted-average common shares outstanding – basic274,965,603   248,943,975   266,914,843   237,642,048  
Net income attributable to common shareholders – per common share diluted$0.37   $0.33   $0.66   $1.15  
Weighted-average common shares outstanding – diluted284,076,532   252,939,590   268,182,552   237,934,515  

LEXINGTON REALTY TRUST AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETSAs of December 31,(In thousands, except share and per share data)

 2020 2019
Assets:(unaudited)  
Real estate, at cost$3,514,564   $3,320,574  
Real estate - intangible assets409,293   409,756  
Investments in real estate under construction75,906   13,313  
Real estate, gross3,999,763   3,743,643  
Less: accumulated depreciation and amortization884,465   887,629  
Real estate, net3,115,298   2,856,014  
Assets held for sale16,530   —  
Right-of-use assets, net31,423   38,133  
Cash and cash equivalents178,795   122,666  
Restricted cash626   6,644  
Investments in non-consolidated entities56,464   57,168  
Deferred expenses, net15,901   18,404  
Rent receivable - current2,899   3,229  
Rent receivable - deferred66,959   66,294  
Other assets8,331   11,708  
Total assets$3,493,226   $3,180,260  
    
Liabilities and Equity:   
Liabilities:   
Mortgages and notes payable, net$136,529   $390,272  
Term loan payable, net297,943   297,439  
Senior notes payable, net779,275   496,870  
Trust preferred securities, net127,495   127,396  
Dividends payable35,401   32,432  
Liabilities held for sale790   —  
Operating lease liabilities32,515   39,442  
Accounts payable and other liabilities55,208   29,925  
Accrued interest payable6,334   7,897  
Deferred revenue - including below market leases, net17,264   20,350  
Prepaid rent13,335   13,518  
Total liabilities1,502,089   1,455,541  
    
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 and 1,935,400 shares issued and outstanding94,016   94,016  
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 277,152,450 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively28   25  
Additional paid-in-capital3,196,315   2,976,670  
Accumulated distributions in excess of net income(1,301,726)  (1,363,676) 
Accumulated other comprehensive loss(17,963)  (1,928) 
Total shareholders’ equity1,970,670   1,705,107  
Noncontrolling interests20,467   19,612  
Total equity1,991,137   1,724,719  
Total liabilities and equity$3,493,226   $3,180,260  

LEXINGTON REALTY TRUST AND SUBSIDIARIES EARNINGS PER SHARE (Unaudited and in thousands, except share and per share data)

 Three Months Ended December 31, Twelve Months Ended December 31,
 2020 2019 2020 2019
EARNINGS PER SHARE:       
        
Basic:       
Net income attributable to common shareholders$102,712  $83,574   $176,788  $273,225 
        
Weighted-average common shares outstanding - basic274,965,603  248,943,975   266,914,843  237,642,048 
        
Net income attributable to common shareholders - per common share basic$0.37  $0.34   $0.66  $1.15 
        
Diluted:       
Net income attributable to common shareholders - basic$102,712  $83,574   $176,788  $273,225 
Impact of assumed conversions2,218  (34)  —  — 
Net income attributable to common shareholders$104,930  $83,540   $176,788  $273,225 
        
Weighted-average common shares outstanding - basic274,965,603  248,943,975   266,914,843  237,642,048 
Effect of dilutive securities:       
Unvested share-based payment awards and options1,367,634  639,178   1,267,709  292,467 
Operating Partnership Units3,032,725  3,356,437   —  — 
Preferred shares - Series C4,710,570  —   —  — 
Weighted-average common shares outstanding - diluted284,076,532  252,939,590   268,182,552  237,934,515 
        
Net income attributable to common shareholders - per common share diluted$0.37  $0.33   $0.66  $1.15 

LEXINGTON REALTY TRUST AND 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,
 2020 2019 2020 2019
FUNDS FROM OPERATIONS:      
Basic and Diluted:       
Net income attributable to common shareholders$102,712   $83,574   $176,788   $273,225  
Adjustments:       
 Depreciation and amortization40,050   35,323   158,655   144,792  
 Impairment charges - real estate6,668   2,974   14,460   5,329  
 Noncontrolling interests - OP units645   (34)  2,347   4,376  
 Amortization of leasing commissions673   654   2,937   2,802  
 Joint venture and noncontrolling interest adjustment2,115   2,249   8,578   9,449  
 Gains on sales of properties, including non-consolidated entities and net of tax(97,163)  (74,211)  (139,596)  (255,048) 
FFO available to common shareholders and unitholders - basic55,700   50,529   224,169   184,925  
 Preferred dividends1,572   1,572   6,290   6,290  
 Amount allocated to participating securities94   85   224   395  
FFO available to all equityholders and unitholders - diluted57,366   52,186   230,683   191,610  
 Debt satisfaction (gains) charges, net, including non-consolidated entities(2,502)  (9)  (21,396)  4,773  
 Transaction costs174   202   255   202  
Adjusted Company FFO available to all equityholders and unitholders - diluted55,038   52,379   209,542   196,585  
        
FUNDS AVAILABLE FOR DISTRIBUTION:       
Adjustments:       
 Straight-line adjustments(3,430)  (3,656)  (13,654)  (14,502) 
 Lease incentives189   293   921   1,191  
 Amortization of above/below market leases(470)  (269)  (1,580)  (443) 
 Lease termination payments, net(70)  25   —   (1,095) 
 Non-cash interest, net195   563   1,276   2,709  
 Non-cash charges, net1,690   1,577   6,674   6,410  
 Tenant improvements(291)  (2,885)  (9,744)  (7,817) 
 Lease costs(50)  (3,743)  (5,019)  (14,367) 
 Joint venture and non-controlling interest adjustment11   (63)  (319)  (3,794) 
Company Funds Available for Distribution$52,812   $44,221   $188,097   $164,877  
         
Per Common Share and Unit Amounts       
Basic:       
 FFO$0.20   $0.20   $0.83   $0.77  
         
Diluted:       
 FFO$0.20   $0.20   $0.84   $0.78  
 Adjusted Company FFO$0.19   $0.20   $0.76   $0.80  
         
Weighted-Average Common Shares       
Basic:       
 Weighted-average common shares outstanding - basic EPS274,965,603   248,943,975   266,914,843   237,642,048  
 Operating partnership units(1)3,032,725   3,356,437   3,083,320   3,490,147  
 Weighted-average common shares outstanding - basic FFO277,998,328   252,300,412   269,998,163   241,132,195  
         
Diluted:       
 Weighted-average common shares outstanding - diluted EPS284,076,532   252,939,590   268,182,552   237,934,515  
 Unvested share-based payment awards9,384   36,516   17,180   22,813  
 Operating partnership units(1)—   —   3,083,320   3,490,147  
 Preferred shares - Series C—   4,710,570   4,710,570   4,710,570  
 Weighted-average common shares outstanding - diluted FFO284,085,916   257,686,676   275,993,622   246,158,045  

(1)        Includes OP units other than OP units held by Lexington.

LEXINGTON REALTY TRUST AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
    
2021 EARNINGS GUIDANCE   
 Twelve Months EndedDecember 31, 2021
 Range
Estimated:   
Net income attributable to common shareholders per diluted common share(1)$0.58   $0.62  
Depreciation and amortization0.60   0.60  
Impact of capital transactions(0.46)  (0.46) 
Estimated Adjusted Company FFO per diluted common share$0.72   $0.76  

(1)        Assumes all convertible securities are dilutive.

 

Source: Lexington Realty Trust

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