Results
LXP Industrial Trust
02/27/2008 | Press release | Archived content
Lexington Realty Trust Reports Fourth Quarter 2007 Results
NEW YORK, Feb. 27 /PRNewswire-FirstCall/ -- Lexington Realty Trust ("Lexington") (NYSE: LXP), a real estate investment trust (REIT) focused on single-tenant real estate investments, today announced results for the fourth quarter and year ended December 31, 2007. All per share amounts are on a diluted basis. (1)
(Logo: http://www.newscom.com/cgi-bin/prnh/20070205/LAM022LOGO)
Fourth Quarter 2007 Highlights
-- Total gross revenues of $122.3 million
-- Company Funds From Operations ("Company FFO") of $21.3 million or
$0.20 per share(2)
-- 19 new and renewal leases executed, totaling 1.9 million square feet
-- $243.8 million in real estate dispositions
-- Formed new co-investment program, raising $121.7 million in cash
-- 2.6 million common shares/units repurchased at an average price of
$17.72 per share/unit
-- $2.475 common share/unit dividend/distribution declared, including
$2.10 special common share/unit dividend/distribution.
(1) Including common shares issuable upon the redemption of all
operating partnership units and conversion of all Series C
Cumulative Convertible Preferred shares.
(2) See the last page of this press release for a reconciliation of GAAP
net income to Company FFO and an explanation of the calculation of
Company FFO.
COMMENTS FROM MANAGEMENT
T. Wilson Eglin, President and Chief Executive Officer of Lexington stated, "We are pleased with our accomplishments in the fourth quarter. Pursuant to our Strategic Restructuring Plan, we sold $243.8 million of properties, bringing total disposition volume for the year to $473.0 million, and closed $408.5 million into our specialty property co-investment program. In addition, we continued to do well on the leasing front with 19 leases signed or extended, bringing our total for the year to 108 leases signed or extended, totaling 5.9 million square feet, and ended the quarter at 96% occupancy."
Patrick Carroll, Chief Financial Officer, commented, "Funds from operations for the fourth quarter were impacted by impairment charges totaling $22.7 million related to three vacant properties formerly leased to tenants in the automotive industry and several bond investments in the Concord joint venture, debt prepayment costs of $5.5 million relating to property sales that generated $70.9 million in gains, formation costs of $2.3 million relating to our new co-investment program and $5.9 million of lease termination and promoted interest payments received. Together, these items reduced Company FFO by about $0.23 per share. Adjusted for these and similar items in previous quarters, Company FFO was $1.83 per common share in 2007."
Mr. Eglin added, "Lexington ended the year with $412.1 million of cash, a portion of which was used to pay a special distribution of $2.10 per common share/unit in January, 2008. Including share repurchases, we have directly and indirectly returned over $400 million to our shareholders since January 1, 2007. We believe we continue to have substantial liquidity and financial flexibility, which enables us to act on favorable investment opportunities as they arise."
FINANCIAL RESULTS
Revenue
For the quarter ended December 31, 2007, revenues increased 145.0% to $122.3 million, compared with revenues of $49.9 million for the quarter ended December 31, 2006. For the year ended December 31, 2007, revenues increased 131.3% to $431.7 million, compared with revenues of $186.7 million for the year ended December 31, 2006. The increases were primarily a result of the December 31, 2006 merger with Newkirk Realty Trust, Inc. and the second quarter 2007 acquisition of 48 properties, which Lexington had previously held in four co-investment programs.
Net Income Allocable to Common Shareholders
For the quarter ended December 31, 2007, net income allocable to common shareholders was $24.2 million, compared to the quarter ended December 31, 2006, which had a loss of $10.4 million. On a per share basis, net income allocable to common shareholders for the quarter ended December 31, 2007 was $0.39, compared with a loss of $0.20 for the comparable period last year. For the year ended December 31, 2007, net income allocable to common shareholders was $50.1 million, or $0.77 per share, as compared to a loss of $8.7 million, or $(0.17) per share, for the same period in 2006.
Company Funds From Operations Applicable to Common Shareholders
For the quarter ended December 31, 2007, Company FFO was $21.3 million, compared with Company FFO for the quarter ended December 31, 2006 of $15.1 million. On a per share basis, Company FFO was $0.20 for the quarter ended December 31, 2007, compared with $0.24 for the same period in 2006. For the year ended December 31, 2007, Company FFO was $180.2 million or $1.63 per share, as compared with $81.6 million or $1.28 per share for the same period in 2006.
Market Capitalization
At December 31, 2007, Lexington's total market capitalization was approximately $4.9 billion, based on the New York Stock Exchange closing price of Lexington's common shares on December 31, 2007, and assuming the conversion of all operating partnership units to common shares, the liquidation preference of preferred shares, and the principal balance of total debt outstanding.
Dividend
In December, 2007, Lexington declared a regular quarterly cash dividend/distribution of $0.375 per common share/unit, and a special dividend/distribution of $2.10 per common share/unit which were paid on January 15, 2008, to common shareholders/unitholders of record as of December 31, 2007. On February 21, 2008, Lexington declared a regular quarterly cash dividend/distribution of $0.33 per common share/unit (equal to $1.32 per common share/unit on an annualized basis) which will be paid on April 15, 2008 to shareholders/unitholders of record on March 31, 2008.
Lexington also declared dividends of $0.503125 per Series B Cumulative Redeemable Preferred Share, $0.8125 per Series C Cumulative Convertible Preferred Share, and $0.471875 per Series D Cumulative Convertible Preferred Share. The Series B and Series C Preferred Share dividends are payable on May 15, 2008, to shareholders of record of the Series B and Series C Preferred Shares as of April 30, 2008. The Series D Preferred Share dividend is payable April 15, 2008, to shareholders of record of the Series D Preferred Shares as of March 31, 2008.
Share Repurchase Authorization
During the quarter ended December 31, 2007, Lexington's share repurchase authorization was increased by 5.0 million common shares/units and Lexington repurchased approximately 2.6 million common shares/units at an average price of $17.72 per share/unit. For the year ended December 31, 2007, Lexington repurchased approximately 9.8 million common shares/units at an average price of $19.83 per share/unit, reducing the number of shares/units outstanding to approximately 100.8 million.
2008 EARNINGS GUIDANCE
On February 21, 2008 Lexington announced that it expects Company FFO to be $1.56-$1.64 per share in 2008. This guidance is based on current expectations and is forward looking.
INVESTMENT & DISPOSITION ACTIVITY
Co-Investment Program
In December 2007, Lexington announced that its co-investment program with Inland American Real Estate Trust, Inc. closed on the acquisition of 30 primarily single-tenant net leased assets from Lexington and its subsidiaries for an aggregate purchase price of $408.5 million, including the assumption of non-recourse first mortgage financing secured by certain of the assets. The 30 properties contain an aggregate of approximately 3.5 million net rentable square feet, and are located in 23 states. A second closing of 13 properties for an aggregate purchase price of $335.0 million is expected to occur in 2008, with 11 properties expected to close on or before March 31, 2008 and the remaining two properties expected to close on or before June 30, 2008.
The acquisition of each of the remaining 13 assets by the co-investment program is subject to satisfaction of conditions precedent to closing, including obtaining lender consents, obtaining certain consents and waivers, the continuing financial solvency of the tenants, and certain other customary conditions. Accordingly, Lexington cannot provide any assurance that the acquisition by the co-investment program will be completed.
Acquisitions
For the quarter ended December 31, 2007, Lexington acquired one property for a capitalized cost of $13.7 million.
Dispositions
During the quarter ended December 31, 2007, Lexington sold 20 non-core properties under the disposition program of its previously announced Strategic Restructuring Plan for an aggregate price of $243.8 million.
LEASING ACTIVITY
At December 31, 2007, Lexington's portfolio was approximately 96% leased. For the quarter ended December 31, 2007, Lexington executed 19 leases for approximately 1.9 million square feet. Twelve new leases were executed, (nine office properties, two industrial properties and one retail property) encompassing 666,000 square feet. Seven lease renewals were executed (two office properties, four industrial properties and one retail property) encompassing approximately 1.2 million square feet.
FOURTH QUARTER 2007 CONFERENCE CALL
On Wednesday, February 27, 2008, at 11:00 a.m. Eastern Time, Lexington will host a conference call to discuss its results for the quarter ended December 31, 2007. Lexington's remarks will be followed by a question and answer period. Interested parties may participate in this conference call by dialing (877) 407-0781 or (201) 689-8568. A taped replay of the call will be available through March 27, 2008 at (877) 660-6853, Account 286, Conference ID 268025.
A live web cast (listen-only mode) of the conference call will be available at http://www.lxp.com within the Investor Relations section. An online replay will also be available through February 27, 2009.
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that owns, invests in, and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area. Lexington shares are traded on the New York Stock Exchange under the symbol "LXP". Additional information about Lexington is available on-line at http://www.lxp.com or by contacting Lexington Realty Trust, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015.
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 SEC, including risks related to: (1) the failure to successfully complete the strategic restructuring plan, (2) the failure to complete the sale of the remaining 13 assets to the newly formed co-investment program described above, (3) the failure to integrate our operations and properties with those of Newkirk Realty Trust, (4) the failure to continue to qualify as a real estate investment trust, (5) changes in general business and economic conditions, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, or (9) changes in accessibility of debt and equity capital markets. Copies of periodic reports Lexington files with the SEC are available on Lexington's website at http://www.lxp.com. In addition all dividend declarations are subject to the approval of Lexington's Board of Trustees. 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" or similar expressions. 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.
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Twelve months ended December 31, 2007 and 2006
(Unaudited and in thousands, except share and per share data)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Gross revenues:
Rental $110,710 $44,142 $385,898 $165,275
Advisory and
incentive fees 1,384 1,027 13,567 4,555
Tenant
reimbursements 10,168 4,732 32,282 16,863
Total gross
revenues 122,262 49,901 431,747 186,693
Expense applicable to
revenues:
Depreciation and
amortization (67,113) (20,296) (236,044) (75,849)
Property operating (18,448) (8,731) (61,095) (30,947)
General and
administrative (10,692) (19,667) (39,389) (35,514)
Non-operating income 3,219 1,244 10,726 8,913
Interest and
amortization expense (48,494) (17,440) (163,628) (65,097)
Debt satisfaction
gains (charges) (1,209) 7,443 (1,209) 7,228
Impairment loss (15,500) (6,100) (15,500) (7,221)
Income (loss) before
benefit (provision)
for income taxes,
minority interests,
equity in earnings of
non-consolidated
entities, gains on
sale of properties -
affiliates and
discontinued
operations (35,975) (13,646) (74,392) (11,794)
Benefit (provision)
for income taxes (745) 261 (3,374) 238
Minority interests
share of (income)
loss 6,796 (115) 2,652 (601)
Equity in earnings of
non-consolidated
entities 522 1,115 46,467 4,248
Gains on sale of
properties-affiliates 17,864 -- 17,864 --
Income (loss) from
continuing operations (11,538) (12,385) (10,783) (7,909)
Discontinued operations:
Income from
discontinued
operations 4,002 4,129 29,561 14,459
(Provision) benefit
for income taxes (687) -- (3,327) (73)
Debt satisfaction
(charges) gains (4,265) (1,287) (7,950) 4,492
Gains on sales of
properties 53,070 4,029 92,878 22,866
Impairment charges (1,670) -- (1,670) (28,209)
Minority interests
share of (income)
loss (7,678) (735) (21,858) 2,127
Total discontinued
operations 42,772 6,136 87,634 15,662
Net income (loss) 31,234 (6,249) 76,851 7,753
Dividends attributable
to preferred shares -
Series B (1,590) (1,590) (6,360) (6,360)
Dividends attributable
to preferred shares -
Series C (2,519) (2,519) (10,075) (10,075)
Dividends attributable
to preferred shares -
Series D (2,926) -- (10,298) --
Net income (loss)
allocable to common
shareholders $24,199 $(10,358) $50,118 $(8,682)
Income(loss) per common
share - basic:
Income (loss) from
continuing
operations,
after preferred
dividends $(0.30) $(0.31) $(0.58) $(0.47)
Income (loss) from
discontinued
operations 0.69 0.11 1.35 0.30
Net income (loss)
allocable
to common
shareholders $0.39 $(0.20) $0.77 $(0.17)
Weighted average
common shares
outstanding -
basic 62,461,438 52,407,057 64,910,123 52,163,569
Income(loss) per
common share -
diluted:
Income (loss)
from
continuing
operations,
after preferred
dividends $ (0.30) $ (0.31) $ (0.58) $ (0.47)
Income (loss)
from
discontinued
operations 0.69 0.11 1.35 0.30
Net income (loss)
allocable to
common
shareholders $0.39 $(0.20) $0.77 $(0.17)
Weighted average
common shares
outstanding -
diluted 62,461,438 52,407,057 64,910,123 52,163,569
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2007 (Unaudited) and December 31, 2006
(In thousands, except share and per share data)
2007 2006
Assets:
Real estate, at cost $4,095,278 $3,747,156
Less: accumulated depreciation 379,831 276,129
3,715,447 3,471,027
Properties held for sale - discontinued
operations 150,907 69,612
Intangible assets 516,698 468,244
Investment in and advances to non-consolidated
entities 226,476 247,045
Cash and cash equivalents 412,106 97,547
Investment in marketable equity securities 2,609 32,036
Deferred expenses 42,040 16,084
Rent receivable - current 25,289 43,283
Rent receivable - deferred 15,303 29,410
Notes receivable 69,775 50,534
Other assets, net 88,513 100,035
$5,265,163 $4,624,857
Liabilities and Shareholders' Equity
Liabilities:
Mortgages and notes payable $2,312,422 $2,126,810
Exchangable notes payable 450,000 --
Trust notes payable 200,000 --
Contract rights payable 13,444 12,231
Liabilities - discontinued operations 119,093 6,064
Accounts payable and other liabilities 49,442 25,877
Accrued interest payable 23,507 10,818
Dividends payable 158,168 44,948
Prepaid rent 16,764 10,109
Deferred revenue 217,389 362,815
3,560,229 2,599,672
Minority interests 765,863 902,741
4,326,092 3,502,413
Commitments and contingencies
Shareholders' equity:
Preferred shares, par value $0.0001 per
share; authorized 100,000,000 shares;
Series B Cumulative Redeemable Preferred,
liquidation preference, $79,000, 3,160,000
shares issued and outstanding 76,315 76,315
Series C Cumulative Convertible Preferred,
liquidation preference $155,000; 3,100,000
shares issued and outstanding 150,589 150,589
Series D Cumulative Convertible Preferred,
liquidation preference $155,000; 6,200,000
shares issued and outstanding in 2007 149,774 --
Special Voting Preferred Share, par value
$0.0001 per share; authorized and issued 1
share in 2007 and 2006 -- --
Common shares, par value $0.0001 per share,
authorized 400,000,000 shares, 61,064,334
and 69,051,781 shares issued and outstanding
in 2007 and 2006, respectively 6 7
Additional paid-in-capital 1,033,332 1,188,900
Accumulated distributions in excess of net
income (468,167) (294,640)
Accumulated other comprehensive income
(loss) (2,778) 1,273
Total shareholders' equity 939,071 1,122,444
$5,265,163 $4,624,857
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE AND FUNDS FROM OPERATIONS PER SHARE
(In thousands, except share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
EARNINGS PER SHARE:
Basic:
Income (loss) from
continuing
operations $(11,538) $(12,385) $(10,783) $(7,909)
Less preferred
dividends (7,035) (4,109) (26,733) (16,435)
Income (loss)
allocable to
common shareholders
from continuing
operations (18,573) (16,494) (37,516) (24,344)
Total income (loss)
from discontinued
operations 42,772 6,136 87,634 15,662
Net income (loss)
allocable to common
shareholders $24,199 $(10,358) $50,118 $(8,682)
Weighted average
number of common
shares
outstanding 62,461,438 52,407,057 64,910,123 52,163,569
Income (loss) per
common share -
basic:
Income (loss) from
continuing
operations $(0.30) $(0.31) $(0.58) $(0.47)
Income (loss) from
discontinued
operations 0.69 0.11 1.35 0.30
Net income (loss) $0.39 $(0.20) $0.77 $(0.17)
Diluted:
Income (loss)
allocable
to common
shareholders
from continuing
operations $(18,573) $(16,494) $(37,516) $(24,344)
Incremental income
attributed to
assumed
conversion of
dilutive
securities -- -- -- --
Income (loss)
allocable
to common
shareholders
from continuing
operations (18,573) (16,494) (37,516) (24,344)
Total income (loss)
from discontinued
operations 42,772 6,136 87,634 15,662
Net income (loss)
allocable to common
shareholders $24,199 $(10,358) $50,118 $(8,682)
Weighted average
number of common
shares used in
calculation of
basic
earnings per
share 62,461,438 52,407,057 64,910,123 52,163,569
Add incremental
shares
representing:
Shares issuable
upon exercise
of employee
share
options -- -- -- --
Shares issuable
upon
conversion of
dilutive
securities -- -- -- --
Weighted average
number of shares
used in
calculation
of diluted
earnings per
common share 62,461,438 52,407,057 64,910,123 52,163,569
Income per common
share - diluted:
Income (loss) from
continuing
operations $(0.30) $(0.31) $(0.58) $(0.47)
Income (loss) from
discontinued
operations 0.69 0.11 1.35 0.30
Net income (loss) $0.39 $(0.20) $0.77 $ (0.17)
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE AND FUNDS FROM OPERATIONS PER SHARE (Continued)
(In thousands, except share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
The Company's Funds
from Operations: (1)
Basic and Diluted:
Net income (loss)
allocable to common
shareholders $24,199 $(10,358) $50,118 $(8,682)
Adjustments:
Depreciation and
amortization 67,387 21,502 247,611 82,228
Minority interests -
OP units (320) 985 14,547 (1,040)
Amortization of
leasing
commissions 370 242 1,252 721
Joint venture and
minority interest
adjustment (1,056) 4,199 642 21,047
Preferred
dividends -
Series C 2,519 2,519 10,075 10,075
Gains on sale of
properties (70,934) (4,029) (110,742) (22,866)
Taxes incurred on
sale of properties 673 -- 2,422 74
Gains on sale of
joint venture
properties (1,558) -- (35,722) --
Company's funds from
operations $21,280 $15,060 $180,203 $81,557
Basic:
Weighted average
shares
outstanding -
basic EPS 62,461,438 52,407,057 64,910,123 52,163,569
Operating
partnership
units 39,748,268 5,622,950 40,057,955 5,630,166
Preferred shares -
Series C 5,779,330 5,779,330 5,779,330 5,779,330
Weighted average
shares
outstanding -
basic 107,989,036 63,809,337 110,747,408 63,573,065
Company's funds
from operations
per share $0.20 $0.24 $1.63 $1.28
Diluted:
Weighted average
shares
outstanding -
diluted EPS 62,461,438 52,407,057 64,910,123 52,163,569
Operating
partnership
units 39,748,268 5,622,950 40,057,955 5,630,166
Preferred
shares -
Series C 5,779,330 5,779,330 5,779,330 5,779,330
Other -- 20,159 367 22,136
Adjusted weighted
average shares
outstanding -
diluted 107,989,036 63,829,496 110,747,775 63,595,201
Company's funds
from operations
per share $0.20 $0.24 $1.63 $1.28
(1)Lexington believes that Funds from Operations ("FFO") is a widely
recognized and appropriate measure of the performance of an equity
REIT. Lexington presents FFO because it considers FFO an important
supplemental measure of Lexington's operating performance. 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
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.
Lexington computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT").
FFO is defined by NAREIT 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 unconsolidated partnerships and joint ventures." FFO
does not represent cash generated from operating activities in
accordance with GAAP and is not indicative of cash available to fund
cash needs. FFO should not be considered as an alternative to net
income as an indicator of our operating performance or as an
alternative to cash flow as a measure of liquidity.
Lexington includes in its calculation of FFO, which Lexington refers to
as the "Company's funds from operations" or "Company FFO," Lexington's
operating partnership units and Lexington's Series C Cumulative
Convertible Preferred Shares because these securities are convertible,
at the holder's option, into Lexington's common shares, and also
incentive fees earned from joint ventures. Management believes this is
appropriate and relevant to securities analysts, investors and other
interested parties because Lexington presents Company FFO on a company-
wide basis as if all securities that are convertible, at the holder's
option, into Lexington's common shares, are converted. Since others do
not calculate FFO in a similar fashion, Company FFO may not be
comparable to similarly titled measures as reported by others.
SOURCE Lexington Realty Trust
Contact: T. Wilson Eglin, Chief Executive Officer of Lexington Realty Trust, +1-212-692-7200, [email protected]
LXP Industrial Trust published this content on February 27, 2008, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on December 19, 2025 at 09:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]