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TheStreet Open House

Lexington Realty Trust Reports Fourth Quarter 2012 Results

FOURTH QUARTER 2012 CONFERENCE CALL

Lexington will host a conference call today, Thursday, February 21, 2013, at 11:00 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 2012. Interested parties may participate in this conference call by dialing (888) 215-6917 or (913) 312-1383. A replay of the call will be available through March 7, 2013, at (877) 870-5176 or (858) 384-5517, pin: 5345505. A live webcast of the conference call will be available at www.lxp.com within the Investor Relations section.

ABOUT LEXINGTON REALTY TRUST

Lexington Realty Trust is a self-managed and self-administered real estate investment trust that invests in, owns, finances and manages predominantly single-tenant office, industrial and retail properties leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the single-tenant area. Lexington common shares are traded on the New York Stock Exchange under the symbol "LXP". Additional information about Lexington is available on-line at www.lxp.com or by contacting Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention: Investor Relations.

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 estimate of Company FFO, as adjusted, for the year ended December 31, 2013, (3) the consummation of built-to-suit transactions, (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 new 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" 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 through special purpose entities, which are separate and distinct legal entities, but consolidated for financial statement purposes and/or disregarded for income tax purposes.

 
 
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,
  2012 2011 2012 2011
Gross revenues:        
Rental $ 87,345 $ 71,563 $ 313,081 $ 280,410
Advisory and incentive fees 421 262 1,806 2,012
Tenant reimbursements 7,767 7,745 29,992 31,404
Total gross revenues 95,533 79,570 344,879 313,826
         
Expense applicable to revenues:        
Depreciation and amortization (46,069) (38,855) (161,876) (156,358)
Property operating (16,277) (13,720) (60,213) (58,229)
General and administrative (6,576) (6,146) (23,956) (22,200)
Non-operating income 1,225 3,912 6,888 13,020
Interest and amortization expense (25,397) (26,286) (98,803) (106,478)
Debt satisfaction gains (charges), net (7,841) 42 (9,480) 45
Change in value of forward equity commitment 6,348 2,030
Gain on acquisition 167,864
Litigation reserve (2,775)
Impairment charges (4,262) (35,946)
Income (loss) before benefit (provision) for income taxes, equity in earnings of non-consolidated entities and discontinued operations (5,402) 4,865 158,266 (50,290)
Benefit (provision) for income taxes (141) (215) (941) 845
Equity in earnings of non-consolidated entities 62 9,688 21,531 30,334
Income (loss) from continuing operations (5,481) 14,338 178,856 (19,111)
         
Discontinued operations:        
Income (loss) from discontinued operations 212 1,011 (1,463) 4,955
Provision for income taxes (97) (22) (161) (76)
Debt satisfaction charges, net (717) (3) (178) (606)
Gains on sales of properties 4,345 1,306 13,291 6,557
Impairment charges (17) (2,614) (5,707) (81,497)
Total discontinued operations 3,726 (322) 5,782 (70,667)
Net income (loss) (1,755) 14,016 184,638 (89,778)
Less net (income) loss attributable to noncontrolling interests (592) (989) (4,322) 10,194
Net income (loss) attributable to Lexington Realty Trust shareholders (2,347) 13,027 180,316 (79,584)
Dividends attributable to preferred shares - Series B (1,379) (2,298) (6,149)
Dividends attributable to preferred shares - Series C (1,572) (1,600) (6,290) (6,655)
Dividends attributable to preferred shares - Series D (2,926) (2,926) (11,703) (11,703)
Allocation to participating securities (194) (141) (1,059) (368)
Deemed dividend - Series B (95) (2,346) (95)
Redemption discount - Series C 618 229 833
Net income (loss) attributable to common shareholders $ (7,039) $ 7,504 $ 156,849 $ (103,721)
Income (loss) per common share - basic:        
Income (loss) from continuing operations $ (0.06) $ 0.05 $ 0.96 $ (0.29)
Income (loss) from discontinued operations 0.02 0.03 (0.39)
Net income (loss) attributable to common shareholders $ (0.04) $ 0.05 $ 0.99 $ (0.68)
           
Weighted-average common shares outstanding - basic: 172,646,759 154,838,153 159,109,424 152,473,336
         
Income (loss) per common share - diluted:        
Income (loss) from continuing operations $ (0.06) $ 0.05 $ 0.91 $ (0.29)
Income (loss) from discontinued operations 0.02 0.02 (0.39)
Net income (loss) attributable to common shareholders $ (0.04) $ 0.05 $ 0.93 $ (0.68)
           
Weighted-average common shares outstanding - diluted 172,646,759 154,942,637 179,659,826 152,473,336
           
Amounts attributable to common shareholders:        
Income (loss) from continuing operations $ (10,750) $ 7,697 $ 152,808 $ (44,703)
Income (loss) from discontinued operations 3,711 (193) 4,041 (59,018)
Net income (loss) attributable to common shareholders $ (7,039) $ 7,504 $ 156,849 $ (103,721)

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
As of December 31,
     
  2012 2011
Assets:    
Real estate, at cost $ 3,564,466 $ 3,172,246
Real estate - intangible assets 685,914 546,918
Investments in real estate under construction 65,122 34,529
Less: accumulated depreciation and amortization 1,150,417 1,006,717
Real estate, net 3,165,085 2,746,976
Cash and cash equivalents 34,024 63,711
Restricted cash 26,741 30,657
Investment in and advances to non-consolidated entities 27,129 39,330
Deferred expenses, net 57,549 43,966
Loans receivable, net 72,540 66,619
Rent receivable 7,355 7,271
Other assets 27,780 28,290
Total assets $ 3,418,203 $ 3,026,820
     
Liabilities and Equity:    
Liabilities:    
Mortgages and notes payable $ 1,415,961 $ 1,366,004
Term loan payable 255,000
Exchangeable notes payable 62,102
Convertible notes payable 78,127 105,149
Trust preferred securities 129,120 129,120
Dividends payable 31,351 25,273
Accounts payable and other liabilities 70,367 53,058
Accrued interest payable 11,980 13,019
Deferred revenue - including below market leases, net 79,908 90,349
Prepaid rent 13,224 12,543
Total liabilities 2,085,038 1,856,617
     
Commitments and contingencies    
     
Equity:    
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares,    
Series B Cumulative Redeemable Preferred, liquidation preference $68,522; 2,740,874 shares issued and outstanding in 2011 66,193
Series C Cumulative Convertible Preferred, liquidation preference $96,770 and $98,510; 1,935,400 and 1,970,200 shares issued and outstanding in 2012 and 2011, respectively 94,016 95,706
Series D Cumulative Redeemable Preferred, liquidation preference $155,000; 6,200,000 shares issued and outstanding 149,774 149,774
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 178,616,664 and 154,938,351 shares issued and outstanding in 2012 and 2011, respectively 18 15
Additional paid-in-capital 2,212,949 2,010,850
Accumulated distributions in excess of net income (1,143,803) (1,212,630)
Accumulated other comprehensive income (loss) (6,224) 1,938
Total shareholders' equity 1,306,730 1,111,846
Noncontrolling interests 26,435 58,357
Total equity 1,333,165 1,170,203
Total liabilities and equity $ 3,418,203 $ 3,026,820

 

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,
  2012 2011 2012 2011
EARNINGS PER SHARE:        
         
Basic:        
Income (loss) from continuing operations attributable to common shareholders $ (10,750) $ 7,697 $ 152,808 $ (44,703)
Income (loss) from discontinued operations attributable to common shareholders 3,711 (193) 4,041 (59,018)
Net income (loss) attributable to common shareholders $ (7,039) $ 7,504 $ 156,849 $ (103,721)
         
Weighted-average number of common shares outstanding 172,646,759 154,838,153 159,109,424 152,473,336
         
Income (loss) per common share:        
Income (loss) from continuing operations $ (0.06) $ 0.05 $ 0.96 $ (0.29)
Income (loss) from discontinued operations 0.02 0.03 (0.39)
Net income (loss) attributable to common shareholders $ (0.04) $ 0.05 $ 0.99 $ (0.68)
         
Diluted:        
Income (loss) from continuing operations attributable to common shareholders $ (10,750) $ 7,697 $ 152,808 $ (44,703)
Impact of assumed conversions:        
Share options
Operating Partnership Units 1,371
6.00% Convertible Guaranteed Notes 8,953
Income (loss) from continuing operations attributable to common shareholders (10,750) 7,697 163,132 (44,703)
Income (loss) from discontinued operations attributable to common shareholders 3,711 (193) 4,041 (59,018)
Impact of assumed conversions:        
Operating Partnership Units (179)
Income (loss) from discontinued operations attributable to common shareholders 3,711 (193) 3,862 (59,018)
Net income (loss) attributable to common shareholders $ (7,039) $ 7,504 $ 166,994 $ (103,721)
         
Weighted-average common shares outstanding - basic 172,646,759 154,838,153 159,109,424 152,473,336
Effect of dilutive securities:        
Share options 104,484 306,449
Operating Partnership Units 4,438,708
6.00% Convertible Guaranteed Notes 15,805,245
Weighted-average common shares outstanding 172,646,759 154,942,637 179,659,826 152,473,336
         
Income (loss) per common share:        
Income (loss) from continuing operations $ (0.06) $ 0.05 $ 0.91 $ (0.29)
Income (loss) from discontinued operations 0.02 0.02 (0.39)
Net income (loss) attributable to common shareholders $ (0.04) $ 0.05 $ 0.93 $ (0.68)

 

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