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TheStreet Open House

CapLease Announces Third Quarter 2012 Results

The Company’s leverage ratios, which are among the financial metrics used by management to review and analyze CapLease’s debt, are also non-GAAP financial measures. Leverage ratios are a widely used financial measure by the real estate investment community, especially for REITs. We measure our leverage ratios by dividing total debt by total assets, as adjusted. We measure total assets, as adjusted, at historical cost before depreciation and amortization on owned properties. Therefore, our leverage ratios do not account for any fluctuations in value, up or down, that may have occurred since we acquired our owned properties. Other companies including other REITs may compute leverage ratios in a different manner and, therefore, our leverage ratios may not be comparable to similarly titled measures reported by other companies.

Forward-Looking and Cautionary Statements:

This press release contains projections of future results and other forward-looking statements that involve a number of trends, risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following important factors could cause actual results to differ materially from those projected in such forward-looking statements.

  • payment defaults on one or more of our asset investments;
  • increases in our financing costs (including as a result of LIBOR rate increases), our general and administrative costs and/or our property expenses; and
  • our failure to comply with our debt obligations.

Developments in any of those areas could cause actual results to differ materially from results that have been or may be projected. For a more detailed discussion of the trends, risks and uncertainties that may affect our operating and financial results and our ability to achieve the financial objectives discussed in this press release, readers should review the Company’s most recent Annual Report on Form 10-K, including the section entitled “Risk Factors,” and the Company’s other periodic filings with the SEC. Copies of these documents are available on our web site at www.caplease.com and on the SEC’s website at www.sec.gov. We caution that the foregoing list of important factors is not complete and we do not undertake to update any forward-looking statement.

About the Company:

CapLease, Inc. is a real estate investment trust, or REIT, that primarily owns and manages a diversified portfolio of single tenant commercial real estate properties subject to long-term leases to high credit quality tenants.

CapLease, Inc. and Subsidiaries
Consolidated Statements of Operations
For the three and nine months ended September 30, 2012 and September 30, 2011
(Unaudited)
   
For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

(Amounts in thousands, except per share amounts)   2012   2011   2012   2011
Revenues:    
Rental revenue $ 35,137 $ 32,362 $ 101,815 $ 95,302
Interest income from loans and securities 1,921 4,774 6,026 17,386
Tenant reimbursements 4,552 3,574 11,939 10,072
Other revenue     182       156       693       601  
Total revenues     41,792       40,866       120,473       123,361  
Expenses:
Interest expense 16,723 19,147 50,666 59,197
Property expenses 7,209 6,600 20,242 19,174
General and administrative expenses 2,754 2,558 8,604 8,050
General and administrative expenses-stock based compensation 830 796 2,441 2,264
Depreciation and amortization expense on real property 12,166 11,676 35,878 34,538
Other expenses     930       38       962       167  
Total expenses     40,612       40,815       118,793       123,390  
Other gains (losses):
Gain on investments, net 300 3,861 1,009 648
Gain (loss) on extinguishment of debt, net           (3,698 )     11,012       (3,698 )
Total other gains (losses)     300       163       12,021       (3,050 )
Income (loss) from continuing operations 1,480 214 13,701 (3,079 )
Discontinued operations:
Loss from discontinued operations (6 ) (727 ) (1,372 ) (2,188 )
Gain (loss) on investments 1,426 (15,229 ) 1,426
Provision for loss on property investment           (14,119 )           (14,119 )
Total discontinued operations     (6 )     (13,420 )     (16,601 )     (14,881 )
Net income (loss) before non-controlling interest in consolidated subsidiaries 1,474 (13,206 ) (2,900 ) (17,960 )
Non-controlling interest in consolidated subsidiaries     5       36       23       55  
Net income (loss) 1,479 (13,170 ) (2,877 ) (17,905 )
Dividends allocable to preferred shares     (2,731 )     (1,627 )     (6,812 )     (4,882 )
Net loss allocable to common stockholders   $ (1,252 )   $ (14,797 )   $ (9,689 )   $ (22,787 )
 
Income (loss) per common share, basic and diluted:
Income (loss) from continuing operations $ (0.02 ) $ (0.02 ) $ 0.10 $ (0.12 )
Loss from discontinued operations   $     $ (0.20 )   $ (0.25 )   $ (0.23 )
Net loss per common share, basic and diluted $ (0.02 ) $ (0.22 ) $ (0.15 ) $ (0.35 )
Weighted average number of common shares outstanding, basic and diluted 66,767 67,615 66,616 64,238
Dividends declared per common share $ 0.070 $ 0.065 $ 0.20 $ 0.195
Dividends declared per preferred A share $ 0.508 $ 0.508 $ 1.523 $ 1.523
Dividends declared per preferred B share $ 0.523 $ $ 1.024 $
 

CapLease, Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
   
(Amounts in thousands, except share and per share amounts)   As Of

September 30,

2012

  As Of

December 31,

2011

Assets
Real estate investments, net $ 1,457,284 $ 1,401,526
Loans held for investment, net 28,569 33,139
Commercial mortgage-backed securities 59,904 59,435
Cash and cash equivalents 40,192 71,160
Other assets     89,018       76,363  
Total Assets   $ 1,674,967     $ 1,641,623  
Liabilities and Equity
Mortgages on real estate investments $ 986,629 $ 972,924
Credit agreements 48,097 70,668
Secured term loan 76,100 88,142
Convertible senior notes 35,007 34,522
Other long-term debt     30,930       30,930  
Total Debt Obligations     1,176,763       1,197,186  
Intangible liabilities on real estate investments 33,579 35,219
Accounts payable and other liabilities 28,055 17,371
Dividends and distributions payable     7,532       5,946  
Total Liabilities     1,245,929       1,255,722  
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
Series A cumulative redeemable preferred, liquidation preference $25.00 per share, 3,401,107 and 3,204,900 shares issued and outstanding, respectively 78,649 73,880
Series B cumulative redeemable preferred, liquidation preference $25.00 per share, 2,140,913 and 0 shares issued and outstanding, respectively 51,800
Common stock, $0.01 par value, 500,000,000 shares authorized, 66,766,965 and 66,275,535 shares issued and outstanding, respectively 668 663
Additional paid in capital 300,522 321,303
Accumulated other comprehensive loss     (3,653 )     (11,051 )
Total Stockholders' Equity     427,986       384,795  
Non-controlling interest in consolidated subsidiaries     1,052       1,106  
Total Equity     429,038       385,901  
Total Liabilities and Equity   $ 1,674,967     $ 1,641,623  
 

CapLease, Inc. and Subsidiaries
Reconciliation of Net Loss to Funds from Operations and Cash Available for Distribution (unaudited)
For the three and nine months ended September 30, 2012 and September 30, 2011
   
For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

(Amounts in thousands, except per share amounts)   2012   2011   2012   2011
Net loss allocable to common stockholders $ (1,252 )   $ (14,797 ) $ (9,689 )   $ (22,787 )
Add (deduct):
Non-controlling interest in consolidated subsidiaries (5 ) (36 ) (23 ) (55 )
Depreciation and amortization expense on real property 12,166 11,676 35,878 34,538
Depreciation and amortization expense on discontinued operations 930 653 2,815
(Gain) loss on property sales on discontinued operations (1,426 ) 15,229 (1,426 )
Provision for loss on property investment on discontinued operations           14,119             14,119  
Funds from operations     10,909       10,466       42,048       27,204  
Add (deduct):
Straight-lining of rents 3,210 (3,038 ) 11,261 3,271
General and administrative expenses-stock based compensation 830 796 2,441 2,264
Amortization of above and below market leases (227 ) 420 (612 ) 1,258
Non-cash interest income and expenses 131 299 852 1,048
Routine capital expenditures on real estate investments (476 ) (138 ) (1,007 ) (1,473 )
Gain on investments other than real property, net (300 ) (3,861 ) (1,009 ) (648 )
Loss (gain) on extinguishment of debt, net           3,698       (11,012 )     3,698  
Cash available for distribution   $ 14,077     $ 8,642     $ 42,962     $ 36,622  
 

Weighted average number of common shares outstanding, basic and diluted

66,767 67,615 66,616 64,238
Weighted average number of OP units outstanding     156       156       156       156  
Weighted average number of common shares and OP units outstanding, diluted     66,923       67,771       66,772       64,394  
 
Net loss per common share, basic and diluted $ (0.02 ) $ (0.22 ) $ (0.15 ) $ (0.35 )
Funds from operations per share $ 0.16 $ 0.15 $ 0.63 $ 0.42
Cash available for distribution per share $ 0.21 $ 0.13 $ 0.64 $ 0.57
 

CapLease, Inc. and Subsidiaries
Overall Company Leverage (unaudited)
As of September 30, 2012 and December 31, 2011
     
Sep 30, 2012   Dec 31, 2011
Debt unaudited
Mortgages on real estate investments $ 986,629 $ 972,924
Credit agreements 48,097 70,668
Secured term loan 76,100 88,142
Convertible senior notes 35,007 34,522
  Other long-term debt     30,930       30,930  
Total Debt $ 1,176,763     $ 1,197,186  
 
Assets
Total assets $ 1,674,967 $ 1,641,623
Accumulated depreciation and amortization on owned properties 285,718 268,209
Intangible liabilities on real estate investments (33,579 ) (35,219 )
Prepaid expenses and deposits (1,899 ) (1,381 )
Accrued rental income (34,575 ) (41,387 )
Deferred rental income 4,451 2
Debt issuance costs, net (5,865 ) (3,889 )
  Other     (471 )     (712 )
Total Assets, as adjusted $ 1,888,747     $ 1,827,247  
 
Leverage (Total Debt/Total Assets, as adjusted) 62 % 66 %
 
CapLease, Inc. and Subsidiaries
Leverage by Segment (unaudited)
As of September 30, 2012
           
Mortgage Secured Term Credit Agreement
(in thousands) Debt Loan Debt Debt Total Debt Investment (1) Leverage
Owned Properties $ 986,629 $ 19,141 $ 45,594 $ 1,051,364 $ 1,757,331 60%
Debt Investments 56,959 2,503 59,462 89,035 67%
 




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