~~1-12386 (Lexington Realty Trust)~~LXP INDUSTRIAL TRUST



Maryland ~~(Lexington Realty Trust)~~		13-3717318 ~~(Lexington Realty Trust)~~
~~Delaware (Lepercq Corporate Income Fund L.P.)~~		~~13-3779859 (Lepercq Corporate Income Fund L.P.)~~
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)
~~One Penn Plaza, Suite 4015, New York, NY 10119-4015~~ ~~(Address of principal executive offices) (zip code)~~
~~(212) 692-7200~~ ~~(Registrant's telephone number, including area code)~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth

~~Lexington Realty Trust:~~

company

~~Large accelerated filer~~ x

~~Accelerated filer~~ ¨

~~Non-accelerated filer~~ ¨

~~Smaller reporting company~~ ¨

~~Emerging growth~~

~~(Do not check if a smaller reporting company)~~

~~company~~ ¨

~~Lepercq Corporate Income Fund L.P.:~~

~~Large accelerated filer~~ ¨

~~Accelerated filer~~ ¨

~~Non-accelerated filer~~ x

~~Smaller reporting company~~ ¨

~~Emerging growth~~

~~(Do not check if a smaller reporting company)~~

~~company~~ ¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



~~Lexington Realty Trust~~	~~Yes~~ ¨ No x
~~Lepercq Corporate Income Fund L.P.~~	~~Yes~~ ¨ No x

Indicate the number of shares outstanding of each of ~~Lexington Realty Trust's~~the registrant's classes of common stock, as of the latest practicable date: ~~240,652,170~~275,723,255 common shares of beneficial interest, par value $0.0001 per share, as of November ~~3, 2017.~~

~~EXPLANATORY NOTE~~

This report combines the Quarterly Reports on Form 10-Q for the period ended September 30, 2017, which we refer to as this Quarterly Report, of (1) Lexington Realty Trust, which we refer to as the Company or the Trust, and subsidiaries and (2) Lepercq Corporate Income Fund L.P., which we refer to as the Partnership or LCIF, and subsidiaries. Unless stated otherwise or the context otherwise requires, (1) “we,” “our,” and “us” refer collectively to the Company and its consolidated subsidiaries, including LCIF and its consolidated subsidiaries, and (2) LCIF or the Partnership refers to LCIF and its consolidated subsidiaries. All of the Company's and LCIF's interests in properties are held, and all property operating activities are conducted, through special purpose entities, which we refer to as property owner subsidiaries or lender subsidiaries, which are separate and distinct legal entities, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes.

The Company is the sole equity owner of (1) Lex GP-1 Trust, or Lex GP, a Delaware statutory trust, and (2) Lex LP-1 Trust, or Lex LP, a Delaware statutory trust. The Company, through Lex GP and Lex LP, holds, as of September 30, 2017, approximately 96% of LCIF's outstanding units of limited partner interest, which we refer to as OP units. The remaining OP units are beneficially owned by E. Robert Roskind, Chairman of the Trust, and certain non-affiliated investors. As the sole equity owner of LCIF’s general partner, the Company has the ability to control all of LCIF’s day-to-day operations subject to the terms of LCIF’s partnership agreement.

OP units not owned by LXP are accounted for as partners’ capital in LCIF’s unaudited condensed consolidated financial statements and as noncontrolling interests in the Trust’s unaudited condensed consolidated financial statements.

We believe it is important to understand the differences between the Trust and LCIF in the context of how the Trust and LCIF operate as an interrelated, consolidated company. The Trust’s and LCIF’s businesses are substantially the same, except that LCIF is dependent on the Trust for management of LCIF’s operations and future investments as LCIF does not have any employees, executive officers or a board of directors.

The Trust also invests in assets and conducts business directly and through other subsidiaries. The Trust allocates investments to itself and its other subsidiaries or LCIF as it deems appropriate and in accordance with certain obligations under LCIF’s partnership agreement with respect to allocations of non-recourse liabilities. The Trust and LCIF are co-borrowers under the Trust’s unsecured revolving credit facility and unsecured term loans. LCIF is a guarantor of the Trust’s publicly-traded debt securities.

~~We believe combining the quarterly reports on Form 10-Q of the Trust and LCIF into this single report results in the following benefits:~~

~~combined reports better reflect how management and the analyst community view the business as a single operating unit;~~

~~combined reports enhance investors’ understanding of the Trust and LCIF by enabling them to view the business as a whole and in the same manner as management;~~

~~combined reports are more efficient for the Trust and LCIF and result in savings in time, effort and expense; and~~

~~combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.~~

To help investors understand the significant differences between the Trust and LCIF, this Quarterly Report separately presents the following for each of the Trust and LCIF: (1) the unaudited condensed consolidated financial statements and the notes thereto, (2) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, (3) Part I, Item 4. Controls and Procedures, and (4) Exhibit 31 and Exhibit 32 certifications.

TABLE OF CONTENTS



PART I. — FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
~~Lexington Realty Trust~~
Condensed Consolidated Balance Sheets		43
Condensed Consolidated Statements of Operations			54
Condensed Consolidated Statements of Comprehensive Income (Loss)			65
Condensed Consolidated Statements of Changes in Equity			76
Condensed Consolidated Statements of Cash Flows			87
Notes to Condensed Consolidated Financial Statements			98
~~Lepercq Corporate Income Fund L.P.~~
~~Condensed Consolidated Balance Sheets~~	25
~~Condensed Consolidated Statements of Operations~~	26
~~Condensed Consolidated Statements of Changes in Partners' Capital~~	27
~~Condensed Consolidated Statements of Cash Flows~~	28
~~Notes to Condensed Consolidated Financial Statements~~	29
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3725
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			4937
ITEM 4. Controls and Procedures			4937
PART II — OTHER INFORMATION
ITEM 1. Legal Proceedings			5238
ITEM 1A. Risk Factors			5238
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			5239
ITEM 3. Defaults Upon Senior Securities			5339
ITEM 4. Mine Safety Disclosures			5339
ITEM 5. Other Information			5339
ITEM 6. Exhibits			5440
SIGNATURES			5643

WHERE YOU CAN FIND MORE INFORMATION:

We file and furnish annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission, which we refer to as the SEC. You may read and copy any materials that we file or furnish with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We file and furnish information electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file or furnish electronically with the SEC. The address of the SEC's Internet site is http://www.sec.gov. We also maintain a web site at http://www.lxp.com through which you can obtain copies of documents that we file or furnish with the SEC. The contents of that web site are not incorporated by reference in or otherwise a part of this Quarterly Report on Form 10-Q or any other document that we file or furnish with the SEC.

Table of Contents

PART I. - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share and per share data)


	September 30, 2022		December 31, 2021

Assets:
Real estate, at cost	$	3,642,114	$	3,583,978
Real estate - intangible assets	332,646		341,403
Land held for development	108,379		104,160
Investments in real estate under construction	368,483		161,165
Real estate, gross	4,451,622		4,190,706
Less: accumulated depreciation and amortization	747,535		655,740
Real estate, net	3,704,087		3,534,966
Assets held for sale	73,761		82,586
Right-of-use assets, net	24,994		27,966
Cash and cash equivalents	29,407		190,926
Restricted cash	113		101
Investments in non-consolidated entities	55,415		74,559
Deferred expenses, net	25,564		18,861

Rent receivable – current	2,426		3,526
Rent receivable – deferred	69,419		63,283

Other assets	26,062		8,784
Total assets	$	4,011,248	$	4,005,558

Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	74,891	$	83,092
Revolving credit facility borrowings	130,000		—
Term loan payable, net	298,834		298,446
Senior notes payable, net	988,954		987,931
Trust preferred securities, net	127,669		127,595
Dividends payable	34,778		37,425
Liabilities held for sale	2,815		3,468
Operating lease liabilities	26,062		29,094
Accounts payable and other liabilities	88,028		77,607
Accrued interest payable	10,278		8,481
Deferred revenue - including below-market leases, net	11,734		14,474
Prepaid rent	14,693		14,717
Total liabilities	1,808,736		1,682,330

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 outstanding	94,016		94,016
Common shares, par value $0.0001 per share; authorized 600,000,000 shares, 276,100,331 and 283,752,726 shares issued and outstanding in 2022 and 2021, respectively	28		28
Additional paid-in-capital	3,134,739		3,252,506
Accumulated distributions in excess of net income	(1,079,407)		(1,049,434)
Accumulated other comprehensive income (loss)	17,768		(6,258)
Total shareholders’ equity	2,167,144		2,290,858
Noncontrolling interests	35,368		32,370
Total equity	2,202,512		2,323,228
Total liabilities and equity	$	4,011,248	$	4,005,558

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Content

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except share and per share data)

September 30, 2017 December 31, 2016
Assets:
Real estate, at cost $ 3,837,705
$ 3,533,172
Real estate - intangible assets 595,904
597,294
Investments in real estate under construction —
106,652
4,433,609
4,237,118
Less: accumulated depreciation and amortization 1,200,814
1,208,792
Real estate, net 3,232,795
3,028,326
Assets held for sale 8,638
23,808
Cash and cash equivalents 140,545
86,637
Restricted cash 34,946
31,142
Investment in and advances to non-consolidated entities 60,683
67,125
Deferred expenses, net 32,426
33,360
Loans receivable, net —
94,210
Rent receivable – current 6,388
7,516
Rent receivable – deferred 46,611
31,455
Other assets 32,124
37,888
Total assets $ 3,595,156
$ 3,441,467

Liabilities and Equity:

Liabilities:

Mortgages and notes payable, net $ 670,345
$ 738,047
Revolving credit facility borrowings 200,000
—
Term loans payable, net 596,369
501,093
Senior notes payable, net 494,989
494,362
Trust preferred securities, net 127,171
127,096
Dividends payable 48,494
47,264
Liabilities held for sale 442
191
Accounts payable and other liabilities 36,728
59,601
Accrued interest payable 11,683
6,704
Deferred revenue - including below market leases, net 34,069
39,895
Prepaid rent 15,371
14,723
Total liabilities 2,235,661
2,028,976

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 outstanding 94,016
94,016
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 240,643,775 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively 24
24
Additional paid-in-capital 2,824,379
2,800,736
Accumulated distributions in excess of net income (1,576,459 ) (1,500,966 )
Accumulated other comprehensive income (loss) 510
(1,033 )
Total shareholders’ equity 1,342,470
1,392,777
Noncontrolling interests 17,025
19,714
Total equity 1,359,495
1,412,491
Total liabilities and equity $ 3,595,156
$ 3,441,467


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Gross revenues:
Rental revenue	$	78,274	$	82,353	$	234,749	$	254,570
Other revenue	1,814		1,064		5,392		2,945
Total gross revenues	80,088		83,417		240,141		257,515
Expense applicable to revenues:
Depreciation and amortization	(44,946)		(45,359)		(134,645)		(130,579)
Property operating	(13,961)		(11,406)		(42,279)		(33,966)
General and administrative	(9,060)		(8,363)		(29,093)		(24,695)
Non-operating income	242		472		353		953
Interest and amortization expense	(11,255)		(12,210)		(32,758)		(35,170)
Debt satisfaction losses, net	(119)		(13,222)		(119)		(13,222)
Impairment charges	(628)		(2,048)		(2,457)		(2,048)
Gains on sales of properties	24,841		16,122		52,951		104,767
Selling profit from sales-type lease	—		—		9,314		—
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities	25,202		7,403		61,408		123,555
Provision for income taxes	(271)		(270)		(951)		(986)
Equity in earnings (losses) of non-consolidated entities	(1,340)		(75)		15,580		(249)








Net income	23,591		7,058		76,037		122,320
Less net income attributable to noncontrolling interests	(201)		(420)		(727)		(1,962)
Net income attributable to LXP Industrial Trust shareholders	23,390		6,638		75,310		120,358
Dividends attributable to preferred shares – Series C	(1,573)		(1,573)		(4,718)		(4,718)
Allocation to participating securities	(41)		(37)		(151)		(170)
Net income attributable to common shareholders	$	21,776	$	5,028	$	70,441	$	115,470

Net income attributable to common shareholders - per common share basic	$	0.08	$	0.02	$	0.25	$	0.42


Weighted-average common shares outstanding – basic	277,535,717		278,124,204		281,559,058		276,379,718

Net income attributable to common shareholders - per common share diluted	$	0.08	$	0.02	$	0.25	$	0.41


Weighted-average common shares outstanding – diluted	278,521,946		282,048,458		284,609,950		278,581,849

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited and in thousands, except share and per share data)~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Gross revenues:
Rental $ 89,704
$ 98,602
$ 265,923
$ 310,804
Tenant reimbursements 7,985
7,379
23,549
23,366
Total gross revenues 97,689
105,981
289,472
334,170
Expense applicable to revenues:

Depreciation and amortization (43,495 ) (40,288 ) (128,706 ) (124,687 )
Property operating (11,694 ) (11,472 ) (36,784 ) (34,843 )
General and administrative (7,963 ) (7,510 ) (25,561 ) (23,032 )
Litigation reserve (2,050 ) —
(2,050 ) —
Non-operating income 1,005
3,080
4,997
9,500
Interest and amortization expense (18,887 ) (23,001 ) (57,828 ) (68,573 )
Debt satisfaction gains (charges), net 2,424
2,538
2,378
(818 )
Impairment charges and loan loss (21,986 ) (72,890 ) (43,577 ) (75,904 )
Gains on sales of properties 10,645
16,072
55,078
58,413
Income (loss) before provision for income taxes and equity in earnings (losses) of non-consolidated entities 5,688
(27,490 ) 57,419
74,226
Provision for income taxes (375 ) (462 ) (1,174 ) (1,099 )
Equity in earnings (losses) of non-consolidated entities 283
340
(1,064 ) 6,394
Net income (loss) 5,596
(27,612 ) 55,181
79,521
Less net (income) loss attributable to noncontrolling interests (55 ) 2,260
(448 ) 102
Net income (loss) attributable to Lexington Realty Trust shareholders 5,541
(25,352 ) 54,733
79,623
Dividends attributable to preferred shares – Series C (1,573 ) (1,573 ) (4,718 ) (4,718 )
Allocation to participating securities (52 ) (50 ) (183 ) (187 )
Net income (loss) attributable to common shareholders $ 3,916
$ (26,975 ) $ 49,832
$ 74,718

Net income (loss) attributable to common shareholders - per common share basic $ 0.02
$ (0.12 ) $ 0.21
$ 0.32
Weighted-average common shares outstanding – basic 237,989,098
234,207,396
237,632,572
233,151,600

Net income (loss) attributable to common shareholders - per common share diluted $ 0.02
$ (0.12 ) $ 0.21
$ 0.31
Weighted-average common shares outstanding – diluted 241,702,715
234,207,396
241,442,227
237,215,883

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited and in thousands)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Net income (loss) $ 5,596
$ (27,612 ) $ 55,181
$ 79,521
Other comprehensive income (loss):

Change in unrealized gain (loss) on interest rate swaps, net 67
2,637
1,543
(2,944 )
Other comprehensive income (loss) 67
2,637
1,543
(2,944 )
Comprehensive income (loss) 5,663
(24,975 ) 56,724
76,577
Comprehensive (income) loss attributable to noncontrolling interests (55 ) 2,260
(448 ) 102
Comprehensive income (loss) attributable to Lexington Realty Trust shareholders $ 5,608
$ (22,715 ) $ 56,276
$ 76,679


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	23,591	$	7,058	$	76,037	$	122,320
Other comprehensive income:

Change in unrealized income on interest rate swaps, net	7,028		1,150		22,844		7,072
Company's share of other comprehensive income of non-consolidated entities	1,182		—		1,182		—
Other comprehensive income	8,210		1,150		24,026		7,072
Comprehensive income	31,801		8,208		100,063		129,392
Comprehensive income attributable to noncontrolling interests	(201)		(420)		(727)		(1,962)
Comprehensive income attributable to LXP Industrial Trust shareholders	$	31,600	$	7,788	$	99,336	$	127,430

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited and in ~~thousands)~~thousands, except share and per share data)


Three Months Ended September 30, 2022			LXP Industrial Trust Shareholders
	Total		Number of Preferred Shares	Preferred Shares		Number of Common Shares	Common Shares		Additional Paid-in-Capital		Accumulated Distributions in Excess of Net Income		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interests
Balance June 30, 2022	$	2,259,650	1,935,400	$	94,016	281,670,437	$	28	$	3,189,713	$	(1,068,408)	$	9,558	$	34,743
Issuance of partnership interest in real estate	663		—	—		—	—		—		—		—		663
Redemption of noncontrolling OP units for common shares	—		—	—		13,146	—		68		—		—		(68)
Issuance of common shares and deferred compensation amortization, net	1,916		—	—		22,516	—		1,916		—		—		—
Repurchase of common shares	(56,958)		—	—		(5,604,048)	—		(56,958)		—		—		—

Forfeiture of employee common shares	1		—	—		(1,720)	—		—		1		—		—
Dividends/distributions ($0.12 per common share)	(34,561)		—	—		—	—		—		(34,390)		—		(171)
Net income	23,591		—	—		—	—		—		23,390		—		201
Other comprehensive income	7,028		—	—		—	—		—		—		7,028		—

Company's share of other comprehensive income of non-consolidated entities	1,182		—	—		—	—		—		—		1,182		—
Balance September 30, 2022	$	2,202,512	1,935,400	$	94,016	276,100,331	$	28	$	3,134,739	$	(1,079,407)	$	17,768	$	35,368


Three Months Ended September 30, 2021

Balance June 30, 2021	$	2,051,369	1,935,400	$	94,016	277,660,102	$	28	$	3,195,040	$	(1,250,735)	$	(12,041)	$	25,061
Issuance of partnership interest in real estate	5,965		—	—		—	—		—		—		—		5,965
Redemption of noncontrolling OP units for common shares	—		—	—		38,790	—		202		—		—		(202)
Redemption of noncontrolling OP units for real estate	(22,305)		—	—		—	—		(12,919)		—		—		(9,386)
Issuance of common shares and deferred compensation amortization, net	57,527		—	—		4,939,815	—		57,527		—		—		—



Dividends/distributions ($0.1075 per common share)	(32,402)		—	—		—	—		—		(32,037)		—		(365)
Net income	7,058		—	—		—	—		—		6,638		—		420
Other comprehensive income	1,150		—	—		—	—		—		—		1,150		—

Balance September 30, 2021	$	2,068,362	1,935,400	$	94,016	282,638,707	$	28	$	3,239,850	$	(1,276,134)	$	(10,891)	$	21,493

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited and in thousands, except share and per share data)


Nine Months Ended September 30, 2022			LXP Industrial Trust Shareholders
	Total		Number of Preferred Shares	Preferred Shares		Number of Common Shares	Common Shares		Additional Paid-in-Capital		Accumulated Distributions in Excess of Net Income		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interests
Balance December 31, 2021	$	2,323,228	1,935,400	$	94,016	283,752,726	$	28	$	3,252,506	$	(1,049,434)	(6,258)		32,370
Issuance of partnership interest in real estate	6,444		—	—		—	—		—		—		—		6,444
Redemption of noncontrolling OP units for common shares	—		—	—		33,378	—		177		—		—		(177)
Purchase of noncontrolling interest in consolidated joint venture	(27,958)		—	—		—	—		(25,058)		—		—		(2,900)
Issuance of common shares and deferred compensation amortization, net	44,075		—	—		4,557,892	1		44,074		—		—		—
Repurchase of common shares	(130,676)		—	—		(11,702,074)	(1)		(130,675)		—		—		—
Repurchase of common shares to settle tax obligations	(6,285)		—	—		(410,958)	—		(6,285)		—		—		—

Forfeiture of employee common shares	9		—	—		(130,633)	—		—		9		—		—
Dividends/distributions ($0.36 per common share)	(106,388)		—	—		—	—		—		(105,292)		—		(1,096)
Net income	76,037		—	—		—	—		—		75,310		—		727
Other comprehensive income	22,844		—	—		—	—		—		—		22,844		—
Company's share of other comprehensive income of non-consolidated entities	1,182		—	—		—	—		—		—		1,182		—

Balance September 30, 2022	2,202,512		1,935,400	$	94,016	276,100,331	$	28	$	3,134,739	$	(1,079,407)	$	17,768	$	35,368


Nine Months Ended September 30, 2021

Balance December 31, 2020	$	1,991,137	1,935,400	$	94,016	277,152,450	$	28	$	3,196,315	$	(1,301,726)	$	(17,963)	$	20,467
Issuance of partnership interest in real estate	11,050		—	—		—	—		—		—		—		11,050
Redemption of noncontrolling OP units for common shares	—		—	—		129,397	—		670		—		—		(670)
Redemption of noncontrolling OP units for real estate	(22,305)		—	—		—	—		(12,919)		—		—		(9,386)
Issuance of common shares and deferred compensation amortization, net	60,469		—	—		5,866,762	—		60,469		—		—		—

Repurchase of common shares to settle tax obligations	(5,120)		—	—		(499,638)	—		(5,120)		—		—		—
Forfeiture of employee common shares	2		—	—		(10,264)	—		—		2		—		—
Dividends/distributions ($0.3225 per common share)	(96,263)		—	—		—	—		—		(94,768)		—		(1,495)
Net income	122,320		—	—		—	—		—		120,358		—		1,962
Other comprehensive income	7,072		—	—		—	—		—		—		7,072		—
Reallocation of noncontrolling interests	—		—	—		—	—		435		—		—		(435)
Balance September 30, 2021	$	2,068,362	1,935,400	$	94,016	282,638,707	$	28	$	3,239,850	$	(1,276,134)	$	(10,891)	$	21,493

Nine Months ended September 30, 2017 Lexington Realty Trust Shareholders
Total Preferred Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests
Balance December 31, 2016 $ 1,412,491
$ 94,016
$ 24
$ 2,800,736
$ (1,500,966 ) $ (1,033 ) $ 19,714
Redemption of noncontrolling OP units for common shares —
—
—
574
—
—
(574 )
Issuance of common shares and deferred compensation amortization, net 23,069
—
—
23,069
—
—
—
Dividends/distributions (132,789 ) —
—
—
(130,226 ) —
(2,563 )
Net income 55,181
—
—
—
54,733
—
448
Other comprehensive income 1,543
—
—
—
—
1,543
—
Balance September 30, 2017 $ 1,359,495
$ 94,016
$ 24
$ 2,824,379
$ (1,576,459 ) $ 510
$ 17,025

Nine Months ended September 30, 2016 Lexington Realty Trust Shareholders
Total Preferred Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests
Balance December 31, 2015 $ 1,462,531
$ 94,016
$ 23
$ 2,776,837
$ (1,428,908 ) $ (1,939 ) $ 22,502
Issuance of common shares upon conversion of convertible notes 12,027
—
—
12,027
—
—
—
Repurchase of common shares (8,973 ) —
—
(8,973 ) —
—
—
Redemption of noncontrolling OP units for common shares —
—
—
31
—
—
(31 )
Issuance of common shares and deferred compensation amortization, net 9,045
—
1
9,044
—
—
—
Dividends/distributions (128,319 ) —
—
—
(125,791 ) —
(2,528 )
Net income (loss) 79,521
—
—
—
79,623
—
(102 )
Other comprehensive loss (2,944 ) —
—
—
—
(2,944 ) —
Balance September 30, 2016 $ 1,422,888
$ 94,016
$ 24
$ 2,788,966
$ (1,475,076 ) $ (4,883 ) $ 19,841
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)


	Nine Months Ended September 30,
	2022		2021
Net cash provided by operating activities:	$	154,113	$	167,405
Cash flows from investing activities:
Acquisition of real estate, including intangible assets	(132,026)		(392,586)
Investment in real estate under construction	(209,862)		(119,885)
Capital expenditures	(25,593)		(9,371)
Net proceeds from sale of properties	145,906		181,242
Investments in loans receivable	—		(1,497)
Principal payments on loans receivable	20		—
Investments in non-consolidated entities	(307)		(975)
Distributions from non-consolidated entities in excess of accumulated earnings	19,250		6,170
Deferred leasing costs	(4,017)		(5,546)
Change in real estate deposits, net	(1,524)		(1,658)
Net cash used in investing activities	(208,153)		(344,106)
Cash flows from financing activities:
Dividends to common and preferred shareholders	(107,939)		(95,885)
Proceeds from mortgage loans	—		11,610
Principal amortization payments	(8,416)		(10,571)
Principal payments on debt, excluding normal amortization	—		(10,567)
Revolving credit facility borrowings	210,000		215,000
Revolving credit facility payments	(80,000)		(215,000)
Proceeds from issuance of senior notes	—		399,032
Repurchase of senior notes	—		(188,756)
Deferred financing costs	(3,626)		(3,977)
Payments for early extinguishment of debt	—		(12,217)
Cash contributions from noncontrolling interests	6,444		10,560
Cash distributions to noncontrolling interests	(1,096)		(1,495)
Repurchases to settle tax obligations	(6,285)		(5,120)
Purchase of noncontrolling interest	(27,958)		—





Issuance of common shares, net	38,436		55,116
Repurchase of common shares	(127,027)		—

Net cash (used in) provided by financing activities	(107,467)		147,730
Change in cash, cash equivalents and restricted cash	(161,507)		(28,971)

Cash, cash equivalents and restricted cash, at beginning of period	191,027		179,421
Cash, cash equivalents and restricted cash, at end of period	$	29,520	$	150,450

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period	$	190,926	$	178,795
Restricted cash at beginning of period	101		626
Cash, cash equivalents and restricted cash at beginning of period	$	191,027	$	179,421

Cash and cash equivalents at end of period	$	29,407	$	150,077
Restricted cash at end of period	113		373
Cash, cash equivalents and restricted cash at end of period	$	29,520	$	150,450

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited and in thousands)~~

Nine Months ended September 30,
2017 2016
Net cash provided by operating activities: $ 172,581
$ 180,583
Cash flows from investing activities:

Acquisition of real estate, including intangible assets (418,574 ) (70,297 )
Investment in real estate under construction (81,364 ) (105,548 )
Capital expenditures (13,367 ) (3,267 )
Net proceeds from sale of properties 186,499
293,634
Net proceeds from sale of non-consolidated investment 6,127
—
Principal payments received on loans receivable 89,908
214
Investments in and advances to non-consolidated entities (4,068 ) (33,554 )
Distributions from non-consolidated entities in excess of accumulated earnings 477
7,299
Increase in deferred leasing costs (5,284 ) (6,165 )
Change in restricted cash (5,843 ) (32,450 )
Change in real estate deposits, net 10,938
(20,566 )
Net cash provided by (used in) investing activities (234,551 ) 29,300
Cash flows from financing activities:

Dividends to common and preferred shareholders (128,996 ) (123,287 )
Principal amortization payments (23,243 ) (20,887 )
Principal payments on debt, excluding normal amortization (41,488 ) (103,473 )
Retirement of convertible notes —
(672 )
Proceeds from term loans 95,000
—
Change in revolving credit facility borrowings, net 200,000
(177,000 )
Payment of developer liabilities —
(4,016 )
Change in deferred financing costs (1,252 ) (1,841 )
Proceeds of mortgages and notes payable —
254,650
Change in restricted cash 1,572
—
Cash distributions to noncontrolling interests (2,563 ) (2,528 )
Issuance of common shares, net 16,848
2,686
Repurchase of common shares —
(8,973 )
Net cash provided by (used in) financing activities 115,878
(185,341 )
Change in cash and cash equivalents 53,908
24,542
Cash and cash equivalents, at beginning of period 86,637
93,249
Cash and cash equivalents, at end of period $ 140,545
$ 117,791

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(1) The Company and Financial Statement Presentation

~~Lexington Realty~~LXP Industrial Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a ~~diversified~~ portfolio of equity ~~and, from time to time, debt~~ investments infocused on single-tenant ~~commercial~~industrial properties.

As of September 30, ~~2017,~~2022, the Company had ownership interests in approximately ~~180~~118 consolidated real estate properties, located in 3821 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.

~~As of September 30, 2017, the~~The Company ~~operated in a manner intended to enable~~believes it ~~to continue to qualify~~has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities ~~historically prohibited for REITs~~from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities.

The Company conducts its operations ~~either directly or~~ indirectly through (1) property owner ~~subsidiaries and lender~~ subsidiaries, which are single purpose entities, (2) an operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests, (3) a wholly-owned TRS, Lexington Realty Advisors, Inc. (“LRA”), and ~~(4) investments in~~(3) joint ventures. ~~References to “OP units” refer to units of limited partner interests in LCIF.~~ Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary 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 property owner subsidiary or any other 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 or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, ~~2017~~2022 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair ~~statement~~presentation of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed with the SEC on ~~March 1, 2017~~February 24, 2022 (“Annual Report”).

Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.

Table of Contents

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

As of September 30, 2022, the Company had interests in seven consolidated joint ventures with developers, consisting of five ongoing development projects and two land joint ventures with ownership interests ranging from 80% to 95.5%. Each joint venture owns land parcels with the intention of developing industrial properties. The Company determined that the joint ventures are variable interest entities in accordance with the applicable accounting guidance. The Company concluded that it ~~was~~is the primary beneficiary in each of the joint ventures and as such, the joint ventures' operations are consolidated in the Company’s financial statements.

In addition, the Company is the primary beneficiary of certain other VIEs as it has a controlling financial interest in these ~~entities, including LCIF, in which the Company has an approximate 96% interest. See the unaudited condensed consolidated financial statements of LCIF included within this Quarterly Report.~~

~~The Company has a joint venture limited partnership with a developer which~~entities. Lepercq Corporate Income Fund L.P. ("LCIF") is a consolidated ~~VIE. In January 2017,~~VIE and the ~~joint venture completed the development of an office campus in Lake Jackson, Texas. The~~ Company, currently has a 100% interest in the joint venture; however, the developer has certain protective rights, and, upon project close-out, the developer will be credited with a notional capital account for a profit interest and certain cost savings. Asas of September 30, ~~2017, the joint venture~~2022, had ~~$144,169 in real estate, net.~~an approximate 99% ownership interest.

The assets of each VIE are only available to satisfy such VIE's respective liabilities. ~~As of September 30, 2017, the VIEs' mortgages and notes payable are non-recourse to the Company.~~ Below is a summary of selected financial data of the consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:


	September 30, 2022		December 31, 2021
Real estate, net	$	985,808	$	810,087
Total assets	$	1,038,913	$	952,611

Total liabilities	$	58,796	$	47,011

September 30, 2017 December 31, 2016
Real estate, net $ 790,185
$ 778,265
Total assets $ 898,620
$ 899,801
Mortgages and notes payable, net $ 360,426
$ 364,099
Total liabilities $ 371,000
$ 395,332
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles).

Revenue Recognition. The Company recognizes lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a consumer price index with no floor. The Company evaluates the collectability of its rental payments and recognizes revenue on a cash basis when the Company believes it is no longer probable that it will receive substantially all of the remaining lease payments. Renewal options in leases are excluded from the calculation of straight-line rent if the renewals are not reasonably certain. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.

Use of Estimates. Management has made a number of significant estimates and assumptions ~~to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, those~~ relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and ~~expenses.~~expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other ~~factors.~~factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of current and deferred accounts receivable ~~the~~and, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs

Table of Contents

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

and which entities should be consolidated, the determination of impairment of long-lived assets ~~loans receivable~~ and equity method investments, ~~the~~ valuation of derivative financial instruments, ~~the~~ valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

Restricted Cash. Restricted cash is comprised primarily of cash balances held by lenders.

Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ~~(“FASB”~~("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ~~as amended (“~~("Topic ~~820”~~820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

~~Acquisition, Development and Construction Arrangements~~. The Company evaluates loans receivable where the Company participates in residual profits through loan provisions or other contracts to ascertain whether the Company has the same risks and rewards as an owner or a joint venture partner. Where the Company concludes that such arrangements are more appropriately treated as an investment in real estate, the Company reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Company capitalizes interest during the construction period. In arrangements where the Company engages a developer to construct a property or provides funds to a tenant to develop a property, the Company will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

~~Revision to Previously Issued Financial Statements.~~ During the quarter ended December 31, 2016, the Company corrected an immaterial error in the treatment of a lease termination payment received in the quarter ended June 30, 2016 in the amount of $7,685. The lease termination payment was originally amortized over the life of the new tenant lease that necessitated the lease termination. As corrected, the payment was fully recognized in the Company's total gross revenues in the quarter ended June 30, 2016.

The Company concluded that the error noted above was not material to any historical periods presented. However, in order to correctly present the treatment of the lease termination payment, management elected to revise previously issued financial statements in the Company's next subsequent periodic filing that included such financial statements. The following table shows the affected line items within the Company's unaudited condensed consolidated financial statements:

Three Months ended September 30, 2016
As Originally Reported Correction As Adjusted
Total gross revenues $ 106,331
$ (350 ) $ 105,981
Net loss $ (27,262 ) $ (350 ) $ (27,612 )
Net loss attributable to common shareholders $ (26,653 ) $ (322 ) $ (26,975 )
Net loss attributable to common shareholders - basic per share $ (0.11 ) $ (0.01 ) $ (0.12 )
Net loss attributable to common shareholders - diluted per share $ (0.11 ) $ (0.01 ) $ (0.12 )

Nine Months ended September 30, 2016
As Originally Reported Correction As Adjusted
Total gross revenues $ 327,524
$ 6,646
$ 334,170
Net income $ 72,875
$ 6,646
$ 79,521
Net income attributable to common shareholders $ 68,310
$ 6,408
$ 74,718
Net income attributable to common shareholders - basic per share $ 0.29
$ 0.03
$ 0.32
Net income attributable to common shareholders - diluted per share $ 0.28
$ 0.03
$ 0.31

~~Recently Issued Accounting Guidance.~~ In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Company’s revenue-producing contracts are primarily leases that are not within the scope of this standard as leases are excluded from ASU 2014-09. The Company expects that it may be impacted in its recognition of non-lease revenue, non-lease components of revenue from lease agreements (upon adoption of ASU 2016-02) and the timing of its recognition of real estate sale transactions. Under ASU 2014-09, revenue recognition for real estate sales is largely based on the transfer of control and the buyer having the ability to direct the use of, or obtain substantially all of the remaining benefit from, the asset (which generally will occur on the closing date); the factor of continuing involvement is no longer a specific consideration for the timing of recognition. As a result, the Company generally expects that the new guidance may result in transactions qualifying as sales of real estate at an earlier date than under current accounting guidance. The Company is finalizing its evaluation of the impact of the standard but currently believes the impact would be limited to the timing and income statement presentation of revenue and not the total amount of revenue recognized over time. The

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

Company will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective approach. As the majority of the Company’s revenue is from rental income related to leases, the Company does not expect the ASU to have a material impact on the consolidated financial statements upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date that have lease terms of more than 12 months and amends certain lessor guidance. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for the Company's future obligations under its ground lease arrangements for which the Company is the lessee. From a lessor perspective, the Company expects that it will be required to bifurcate lease agreements to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be primarily recognized on a straight-line basis over the lease term and certain non-lease components will be accounted for under the new revenue recognition guidance in ASU 2014-09 (upon adoption of ASU 2016-02). Additionally, the new ASU will require that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; with early adoption permitted. The Company continues to evaluate the impact of the adoption of the new guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation-Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this new guidance on January 1, 2017. This new guidance did not have a material impact on the Company's consolidated financial statements. The Company has made an accounting policy election to account for share-based award forfeitures in compensation costs when they occur.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years; however early adoption is permitted. The Company does not believe this guidance will have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Company's consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Company's consolidated statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for those acquisitions that are not businesses will be capitalized rather than expensed.

In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU requires the Company to measure at fair value any retained interest in a partial sale of real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. The Company will adopt ASU 2017-05 effective January 1, 2018, along with the adoption of ASU 2014-09, and it is not expected to have a material impact on its consolidated financial statements.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

In August 2017, the FASB issued ASU-2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Topic 815. The ASU is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company.

~~The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2017 and 2016:~~

Three Months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
BASIC
Net income (loss) attributable to common shareholders $ 3,916
$ (26,975 ) $ 49,832
$ 74,718
Weighted-average number of common shares outstanding - basic 237,989,098
234,207,396
237,632,572
233,151,600

Net income (loss) attributable to common shareholders - per common share basic $ 0.02
$ (0.12 ) $ 0.21
$ 0.32

DILUTED
Net income (loss) attributable to common shareholders - basic $ 3,916
$ (26,975 ) $ 49,832
$ 74,718
Impact of assumed conversions (173 ) —
(192 ) (845 )
Net income (loss) attributable to common shareholders $ 3,743
$ (26,975 ) $ 49,640
$ 73,873

Weighted-average common shares outstanding - basic 237,989,098
234,207,396
237,632,572
233,151,600
Effect of dilutive securities:
Share options 66,748
—
95,788
246,166
OP Units 3,646,869
—
3,713,867
3,818,117
Weighted-average common shares outstanding - diluted 241,702,715
234,207,396
241,442,227
237,215,883

Net income (loss) attributable to common shareholders - per common share diluted $ 0.02
$ (0.12 ) $ 0.21
$ 0.31

For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

~~The Company completed the following acquisition and build-to-suit transactions during the nine months ended September 30, 2017:~~

Property Type Location Acquisition Date
Initial
Cost
Basis
Lease Expiration Land and Land Estate Building and Improvements Lease in-place Value Intangible Below Market Lease Intangible
Office
Lake Jackson, TX⁽¹⁾
January 2017 $ 70,401
10/2036 $ 3,078
$ 67,323
$ —
$ —
Industrial New Century, KS February 2017 12,056
01/2027 —
13,198
1,648
(2,790 )
Industrial Lebanon, IN February 2017 36,194
01/2024 2,100
29,443
4,651
—
Office Charlotte, NC April 2017 61,339
04/2032 3,771
47,064
10,504
—
Industrial Cleveland, TN May 2017 34,400
03/2024 1,871
29,743
2,786
—
Industrial Grand Prairie, TX June 2017 24,317
03/2037 3,166
17,985
3,166
—
Industrial San Antonio, TX June 2017 45,507
04/2027 1,311
36,644
7,552
—
Industrial Opelika, AL July 2017 37,269
05/2042 134
33,183
3,952
—
Industrial McDonough, GA August 2017 66,700
01/2028 5,441
52,762
8,497
—
Industrial Byhalia, MS September 2017 36,590
09/2027 1,751
31,236
3,603
—
Industrial Jackson, TN September 2017 57,920
10/2027 1,454
49,026
7,440
—
Industrial Smyrna, TN September 2017 104,890
04/2027 1,793
93,940
9,157
—
$ 587,583
$ 25,870
$ 501,547
$ 62,956
$ (2,790 )

The Company recognized aggregate transaction costs of $1,100 and $329 for the nine months ended September 30, 2017 and 2016, respectively, which are included as property operating expenses within the Company's unaudited condensed consolidated statements of operations.

From time to time, the Company is engaged in various forms of build-to-suit development activities. The Company, through lender subsidiaries and property owner subsidiaries, may enter into the following acquisition, development and construction arrangements: (1) lend funds to construct a build-to-suit project subject to a single-tenant lease with an agreement to purchase the property upon completion of construction and commencement of the single-tenant lease, (2) hire a developer to construct a built-to-suit project on owned property leased to a single tenant, (3) fund the construction of a build-to-suit project on owned property pursuant to the terms of a single-tenant lease or (4) enter into a purchase and sale agreement with a developer to acquire a single-tenant build-to-suit property upon completion of construction and commencement of a single-tenant lease. As of September 30, 2017, the Company had no development arrangements outstanding. As of December 31, 2016, the Company's aggregate investment in development arrangements was $106,652, which included $3,442 of capitalized interest and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

~~As of September 30, 2017, the Company had the following forward purchase commitments:~~

Location Square Feet (000's) Property Type Maximum Acquisition Cost Estimated Acquisition Date Approximate Lease Term (Yrs)
Warren, MI⁽¹⁾
260
Industrial $ 47,000
4Q 17 15
Romulus, MI 500
Industrial 39,330
4Q 17 15
Lafayette, IN 309
Industrial 17,450
4Q 17 7
1,069
$ 103,780

~~(1) A $4,600 letter of credit secures the Company's obligation to purchase the property.~~

~~The Company can give no assurances that any of these forward purchase commitments will be consummated or, if consummated, will perform to the Company's expectations.~~

During the nine months ended September 30, 2017, the Company disposed of its interests in various properties for an aggregate gross sale price of $190,368 and conveyed a vacant office property, along with its escrow deposits, in satisfaction of a $3,496 non-recourse mortgage loan. During the nine months ended September 30, 2016, the Company disposed of its interests in various properties, including land investments, for an aggregate gross sale price of $561,817 and conveyed a vacant office property, along with its escrow deposits, in satisfaction of a $14,118 non-recourse mortgage loan; however, the lender brought a claim under the related non-recourse carve out guaranty (see note 13).

During the nine months ended September 30, 2017 and 2016, the Company recognized aggregate gains on sales of properties of $55,078 and $58,413, respectively. In addition, during the nine months ended September 30, 2017 and 2016, the Company recognized debt satisfaction gains (charges), net of $2,381 and $(381), respectively, relating to properties disposed of, including conveyed properties.

~~As of September 30, 2017 and December 31, 2016, the Company had one property and two properties, respectively, classified as held for sale.~~

~~Assets and liabilities of held for sale properties as of September 30, 2017 and December 31, 2016 consisted of the following:~~

September 30, 2017 December 31, 2016
Assets:
Real estate, at cost $ 8,607
$ 25,957
Real estate, intangible assets —
7,789
Accumulated depreciation and amortization —
(13,346 )
Rent receivable - current 11
—
Rent receivable - deferred —
1,715
Other assets 20
1,693
$ 8,638
$ 23,808

Liabilities:
Other $ 442
$ 191
$ 442
$ 191

The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability and the potential sale or transfer of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. During the nine months ended September 30, 2017 and 2016, the Company recognized aggregate impairment charges of $38,283 and $75,904, respectively, on properties disposed of and properties held for use.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

As of September 30, 2017, all of the Company's loans receivable were fully satisfied. As of December 31, 2016, the Company's loans receivable were comprised primarily of mortgage loans on real estate.

~~The following is a summary of the Company's loans receivable as of December 31, 2016:~~

Loan carrying-value⁽¹⁾

Loan 12/31/2016 Interest Rate Maturity Date
Kennewick, WA⁽²⁾
$ 85,709
9.00 % 05/2022
Oklahoma City, OK⁽³⁾
8,501
11.50 % 03/2016
$ 94,210

~~In June 2015, the Company loaned a tenant-in-common~~ ~~$8,420~~. The loan was secured by the tenant-in-common's interest in an office property, in which the Company had a 40% tenant-in-common interest. The loan was satisfied in full in February 2017. The Company incurred professional fees of $376 to collect this loan. Such fees are included in general and administrative expenses on the Company's unaudited condensed consolidated statements of operations for the nine months ended September 30, 2017.

~~(6)~~ ~~Fair Value Measurements~~

The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall:

Balance Fair Value Measurements Using
Description September 30, 2017 (Level 1) (Level 2) (Level 3)
Interest rate swap assets $ 510
$ —
$ 510
$ —
Impaired real estate assets* $ 20,264
$ —
$ —
$ 20,264

Balance Fair Value Measurements Using
Description December 31, 2016 (Level 1) (Level 2) (Level 3)
Interest rate swap assets $ 44
$ —
$ 44
$ —
Impaired real estate assets* $ 15,801
$ —
$ —
$ 15,801
Interest rate swap liabilities $ (1,077 ) $ —
$ (1,077 ) $ —

*Represents a non-recurring fair value measurement, including assets held for sale. Fair value as of the date of impairment.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

~~The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments as of September 30, 2017 and December 31, 2016.~~

As of September 30, 2017 As of December 31, 2016

Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
Assets
Loans Receivable $ —
$ —
$ 94,210
$ 94,911

Liabilities

Debt $ 2,088,874
$ 2,058,863
$ 1,860,598
$ 1,814,824

The majority of the inputs used to value the Company's interest rate swaps fall within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilizes Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2017 and December 31, 2016, the Company determined that the credit valuation adjustment relative to the overall fair value of the interest rate swaps was not significant. As a result, the interest rate swaps have been classified in Level 2 of the fair value hierarchy.

The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as ~~broker opinions of value,~~recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Company ~~under estimates~~under-estimates forecasted cash ~~outflows~~out flows (tenant improvements, lease commissions and operating costs) or ~~over estimates~~over-estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

Cost Capitalization. The Company capitalizes interest and direct and indirect project costs associated with the initial construction of a property up to the time the property is substantially complete and ready for its intended use within investments in real estate under construction in the unaudited condensed consolidated balance sheets. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once construction has been completed on a vacant space, project costs are no longer capitalized.

Recently Issued Accounting Guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.

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LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

On July 5, 2022, the Company transitioned its benchmark interest rate for its term loan from LIBOR to the Secured Overnight Financing Rate, or SOFR. The Company adopted ASU 2020-04 and the adoption of this standard did not have an impact on the Company's unaudited condensed consolidated financial statements.

(2)Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
BASIC


Net income attributable to common shareholders	$	21,776	$	5,028	$	70,441	$	115,470
Weighted-average number of common shares outstanding - basic	277,535,717		278,124,204		281,559,058		276,379,718

Net income attributable to common shareholders - per common share basic	$	0.08	$	0.02	$	0.25	$	0.42

DILUTED
Net income attributable to common shareholders - basic	$	21,776	$	5,028	$	70,441	$	115,470


Impact of assumed conversions	11		—		147		—
Net income attributable to common shareholders	$	21,787	$	5,028	$	70,588	$	115,470

Weighted-average common shares outstanding - basic	277,535,717		278,124,204		281,559,058		276,379,718
Effect of dilutive securities:
Shares issuable under forward sales agreements	—		2,765,030		1,699,789		1,290,968
Unvested share-based payment awards	139,371		1,159,224		491,877		911,163


Operating partnership units	846,858		—		859,226		—

Weighted-average common shares outstanding - diluted	278,521,946		282,048,458		284,609,950		278,581,849


Net income attributable to common shareholders - per common share diluted	$	0.08	$	0.02	$	0.25	$	0.41

Table of Contents

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(3)Investments in Real Estate

The Company acquired the following warehouse/distribution facilities during the nine months ended September 30, 2022(1):


Market	Acquisition Date	Initial Cost Basis		Primary Lease Expiration at Acquisition Date	Land		Building and Improvements		Lease in-place Intangible
Cincinnati/Dayton, OH(2)	February 2022	$	23,382	N/A	$	2,010	$	21,372	$	—
Cincinnati/Dayton, OH	February 2022	48,660		04/2032	4,197		40,944		3,519
Phoenix, AZ	April 2022	59,140		05/2037	5,366		50,281		3,493


		$	131,182		$	11,573	$	112,597	$	7,012

(1) A land parcel located in Hebron, OH was also purchased for $747.

(2) Subsequent to acquisition, property was fully leased for approximately nine years.

In 2022, the Company purchased the remaining 13% of equity owned by a noncontrolling interest in the Fairburn, Georgia warehouse/distribution facility for $27,958. As the Company previously consolidated its interest in the joint venture which owned the property, the acquisition of the noncontrolling ownership interest was recorded as an equity transaction with the difference between the purchase price and carrying balance of $25,058 recorded as a reduction in additional paid-in-capital.

As of September 30, 2022, the details of the warehouse/distribution real estate under construction are as follows (in $000's, except square feet):


Project (% owned)	# of Buildings	Market	Estimated Sq. Ft.	Estimated Project Cost(1)		GAAP Investment Balance as of 9/30/2022		LXP Amount Funded as of 9/30/2022(2)		Estimated Building Completion Date	% Leased as of 9/30/2022
The Cubes at Etna East (95%)(3)	1	Columbus, OH	1,074,840	$	72,100	$	59,713	$	53,095	3Q 2022	—	%
Ocala (80%)	1	Central Florida	1,085,280	83,100		66,556		54,866		4Q 2022	—	%
Mt. Comfort (80%)	1	Indianapolis, IN	1,053,360	65,500		48,354		38,278		4Q 2022	—	%
Smith Farms (90%)(4)	3	Greenville-Spartanburg, SC	2,194,820	170,400		123,582		97,906		4Q 2022 - 2Q 2023	36	%
Cotton 303 (93%)(5)	2	Phoenix, AZ	880,678	84,200		56,554		49,000		1Q 2023	45	%
South Shore (100%)	2	Central Florida	270,885	40,500		13,724		10,435		2Q 2023	—	%
				$	515,800	$	368,483	$	303,580

(1) Estimated project cost includes estimated tenant improvements and leasing costs and excludes potential developer partner promote, if any.

(2) Excludes noncontrolling interests' share.

(3) Base building achieved substantial completion on September 30, 2022. Property not in service as of September 30, 2022.

(4) Pre-leased 797,936 square foot facility subject to a 12-year lease commencing upon substantial completion of the facility.

(5) Pre-leased 392,278 square foot facility subject to a 10-year lease commencing upon substantial completion of the facility.

As of September 30, 2022, the Company's aggregate investment in the development arrangements was $368,483, which included capitalized interest of $4,888 for the nine months ended September 30, 2022 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheet. For the nine months ended September 30, 2021, capitalized interest for development arrangements was $1,806.

Table of Contents

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

As of September 30, 2022, the details of the land held for development are as follows (in $000's, except acres):


Project (% owned)	Market	Approx. Developable Acres	GAAP Investment Balance as of 9/30/2022		LXP Amount Funded as of 9/30/2022 (1)
Consolidated:
Reems & Olive (95.5%)	Phoenix, AZ	420	$	101,412	$	96,961
Mt. Comfort Phase II (80%)	Indianapolis, IN	116	5,236		4,165
ATL Fairburn JV (100%)	Atlanta, GA	14	$	1,731	$	1,728
		550	$	108,379	$	102,854

(1) Excludes noncontrolling interests' share.

(4)Dispositions and Impairment

During the nine months ended September 30, 2022 and 2021, the Company disposed of its interests in various properties for an aggregate gross disposition price of $147,345 and $218,796, respectively, and recognized aggregate gains on sales of properties of $52,951 and $104,767, respectively.

Included in the 2021 dispositions are three non-industrial properties with an aggregate disposition price of $35,369, which was satisfied through (i) the redemption of 1,598,906 operating partnership units ("OP units"), (ii) the assumption of $11,610 of third party mortgage financing that encumbered two of the properties and (iii) $1,497 of seller financing. The seller financing note receivable has a fixed interest rate of 6.0% per annum and matures on August 1, 2025. There are no past due payments outstanding related to the seller financing as of September 30, 2022 and 2021.

The Company had six and eight properties classified as held for sale at September 30, 2022 and December 31, 2021, respectively. Assets and liabilities of the held for sale properties consisted of the following:


	September 30, 2022		December 31, 2021
Assets:
Real estate, at cost	$	159,963	$	170,117
Real estate, intangible assets	8,572		9,454
Accumulated depreciation and amortization	(97,251)		(99,659)
Deferred expenses, net	1,629		1,759
Other	848		915
	$	73,761	$	82,586

Liabilities:
Accounts payable and liabilities	$	1,630	$	1,908
Deferred revenue	362		483
Prepaid rent	823		1,077
	$	2,815	$	3,468

The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered. During the nine months ended September 30, 2022, the Company recognized an impairment charge on real estate of $2,457 due to vacancy at the property. During the nine months ended September 30, 2021, the Company recognized impairment charges on real estate of $2,048 related to a vacant office property.

Table of Contents

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(5)Fair Value Measurements

The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2022 and December 31, 2021, aggregated by the level in the fair ~~values~~value hierarchy within which those measurements fall:


	Balance		Fair Value Measurements Using
Description	September 30, 2022		(Level 1)		(Level 2)		(Level 3)
Interest rate swap assets	$	16,586	$	—	$	16,586	$	—
Impaired real estate assets(1)	$	1,056	$	—	$	1,056	$	—


	Balance		Fair Value Measurements Using
Description	December 31, 2021		(Level 1)		(Level 2)		(Level 3)
Interest rate swap liabilities	$	(6,258)	$	—	$	(6,258)	$	—
Impaired real estate assets(2)	$	12,735	$	—	$	—	$	12,735

(1) Represents non-recurring fair value measurement. The fair value is calculated as of ~~its loans receivable utilizing~~the impairment date. $1,056 was based on an observable contract and the Company determined that the fair value of the property falls within Level ~~3 inputs by using~~2 of the fair value reporting hierarchy.

(2) Represents non-recurring fair value measurement. The Company measured a $12,735 fair value of real estate assets based on a discounted cash flow analysis ~~consisting of scheduled cash flows and~~using a discount rate ranging from8.0% to 10.0% and a residual capitalization rate ranging from 7.5% to 8.0%. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy.

The majority of the inputs used to value the Company's interest rate swaps fell within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilized Level 3 inputs, such as estimates of current credit spreads to ~~approximate those~~evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2022 and December 31, 2021, the Company determined that ~~a willing buyer and seller might use and/or~~ the ~~estimated~~credit valuation adjustment relative to the overall fair value of the ~~underlying collateral.~~interest rate swaps was not significant. As a result, the interest rate swaps were classified in Level 2 of the fair value hierarchy.

The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2022 and December 31, 2021:


	As of September 30, 2022				As of December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value



Liabilities
Debt	$	1,620,348	$	1,399,498	$	1,497,064	$	1,491,868

The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates, except for the Company's senior notes payable. The Company determines the fair value of its senior notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low.

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

Table of Contents

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(6)Investments in Non-Consolidated Entities

AsBelow is a schedule of ~~September 30,~~the Company's investments in non-consolidated entities:


		Percentage Ownership at	Investment Balance as of
Investment		September 30, 2022	September 30, 2022		December 31, 2021
NNN MFG Cold JV L.P. ("MFG Cold JV")	(1)	20%	$	27,890	$	30,752
NNN Office JV L.P. ("NNN JV")	(2)	20%	8,836		24,112
Etna Park 70 LLC	(3)	90%	12,959		12,874
Etna Park East LLC	(4)	90%	2,124		2,797
BSH Lessee L.P.	(5)	25%	3,606		4,024
			$	55,415	$	74,559

(1) MFG Cold JV is a joint venture formed in 2021 that owns special purpose industrial properties formerly owned by the Company.

(2) NNN JV is a joint venture formed in 2018 that owns office properties formerly owned by the Company.

(3) Joint venture formed in 2017 with a developer entity to acquire a parcel of land. The Company determined that it is not the primary beneficiary.

(4) Joint venture formed in 2019 with a developer entity to acquire a parcel of land. The Company ~~had ownership interests ranging from 15% to 25% in certain non-consolidated entities,~~determined that it is not the primary beneficiary.

(5) A joint venture investment, which ~~primarily own~~owns a single-tenant, net-leased assets. The acquisitions of these assets by the non-consolidated entities were partially funded through non-recourse mortgage debt with an aggregate balance of $46,661 at September 30, 2017 (the Company's proportionate share was $8,395).

In February 2017, the Company sold its 40% tenant-in-common interest in its Oklahoma City, Oklahoma office property for $6,198. In January 2016, the Company received $6,681 in connection with the sale of a non-consolidated office property in Russellville, Arkansas. The Company recognized gains of $1,452 and $5,378, respectively, in connection with these sales, which are included in equity in earnings of non-consolidated entities.asset.

During the nine months ended September 30, ~~2017,~~2022, NNN JV sold three assets and recognized aggregate gains of $114,481 and the Company recognized its share of the aggregate gains on the transactions of $22,896 within equity in earnings (losses) of non-consolidated entities in its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received net proceeds of $141,050 after the satisfaction of an ~~impairment charge~~aggregate of ~~$3,512 on~~$166,450 of its ~~investment in a retail property in Palm Beach Gardens, Florida due~~non-recourse mortgage indebtedness. NNN JV distributed $28,147 of net proceeds to the ~~bankruptcy~~Company as a result of ~~its tenant. This impairment charge reduced~~ the ~~Company's investment balance to zero.~~property sales.

In November 2014, the Company formed a joint venture to construct a private school in Houston, Texas. As of September 30, 2017, the Company had a 25% equity interest in the joint venture. The joint venture completed the project during 2016 for a total construction cost of $79,964. The Company was contractually obligated to provide construction financing to the joint venture up to $56,686. As of September 30, 2017, the Company's loan balance, net of origination costs, of $48,771 was included in investment in and advances to non-consolidated entities.

The Company had the following mortgages and notes payable outstanding as of September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:

Interest rates, including imputed rates on mortgages and notes payable, ranged from ~~2.2%~~3.5% to ~~7.8%~~4.3%, at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 and all mortgages and notes payables mature between ~~2017~~2023 and ~~2036~~2031 as of September 30, ~~2017.~~2022. The weighted-average interest rate was ~~4.6%~~approximately 4.0% at September 30, ~~2017~~2022 and December 31, ~~2016.~~2021.

On July 12, 2021, LCIF encumbered two of its properties with mortgage debt in the amount of $11,610. Subsequently, on July 12, 2021, certain operating partnership unitholders assumed the mortgages upon purchasing the properties. See Note 4, Dispositions and Impairment.

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LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

The Company had the following senior notes outstanding as of September 30, ~~2017~~2022 and December 31, ~~2016:~~2021:

Issue Date September 30, 2017 December 31, 2016 Interest Rate Maturity Date Issue Price
May 2014 $ 250,000
$ 250,000
4.40 % June 2024 99.883 %
June 2013 250,000
250,000
4.25 % June 2023 99.026 %
500,000
500,000

Unamortized discount (1,576 ) (1,780 )
Unamortized debt issuance cost (3,435 ) (3,858 )
$ 494,989
$ 494,362


Issue Date	September 30, 2022		December 31, 2021		Interest Rate		Maturity Date	Issue Price
August 2021	$	400,000	$	400,000	2.375	%	October 2031	99.758	%
August 2020	400,000		400,000		2.70	%	September 2030	99.233	%
May 2014	198,932		198,932		4.40	%	June 2024	99.883	%
	998,932		998,932
Unamortized debt discount	(3,335)		(3,655)
Unamortized debt issuance costs	(6,643)		(7,346)
Senior notes payable, net	$	988,954	$	987,931

Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a make-whole premium.

In August 2021, the Company issued $400,000 aggregate principal amount of 2.375% Senior Notes due 2031 (“2031 Senior Notes”) at an issuance price of 99.758% of the principal amount. The Company issued the 2031 Senior Notes at an initial discount of $968 which is being recognized as additional interest expense over the term of the 2031 Senior Notes.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

During the three months ended September 30, ~~2017~~2021, the Company used a portion of the net proceeds from the offering of the 2031 Senior Notes to redeem the $188,756 aggregate principal balance of its outstanding 4.25% Senior Notes due 2023 ("2023 Senior Notes"). The consideration paid included the make-whole premium of $12,191 and ~~2016~~$2,028 of accrued and unpaid interest. The Company recognized a $12,948 debt satisfaction loss related to the aggregate redemptions.

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

~~In September 2017, the Company's $905,000~~The Company has an unsecured credit agreement with KeyBank National Association, as ~~agent, was amended to, among other things, increase the overall facility to $1,105,000. With lender approval, the Company can increase the size~~agent. The maturity dates and interest rates as of ~~the amended facility to an aggregate of $2,010,000. A summary of the significant terms~~September 30, 2022, are as follows:



		Maturity Date	Current Interest Rate
$~~505,000~~600,000 Revolving Credit Facility⁽¹⁾		~~August 2019~~July 2026	~~LIBOR~~SOFR + ~~1.00%~~0.85%
$300,000 Term Loan^(1)(2)(4)		~~August 2020~~January 2025	~~LIBOR~~Term SOFR + ~~1.10%~~
~~$300,000 Term Loan~~⁽³⁾⁽⁴⁾	~~January 2021~~	~~LIBOR + 1.10%~~1.00%

(1) In July 2022, the Company amended its revolving credit facility and the 2025 term loan with a new revolving credit facility and the continuation of the 2025 term loan (the "2022 Credit Agreement"). The 2022 Credit Agreement, among other things: (i) extended the maturity date of the revolving portion from February 2023 to July 2026, with two six-month extension options, subject to certain conditions, (ii) reduced the applicable margin for the revolving portion of the credit facility by five basis points to a range from 0.725% to 1.40%, and allows for further reductions upon the achievement of to-be-determined sustainability metrics, (iii) amended the debt covenants by reducing the capitalization rate for determining asset value and (iv) transitioned the facility to SOFR. Simultaneously, the Company converted its interest rate swap agreements to Term SOFR, which resulted in a new fixed interest rate of 2.722% on the Company's 2025 term loan. At September 30, 2022, the Company had $130,000 borrowings outstanding and availability of $470,000, subject to covenant compliance. The Company recognized $119 of debt satisfaction losses in connection with the transaction.

(2) The aggregate unamortized debt issuance costs for the term loan was $1,166 and $1,554 as of September 30, 2022 and December 31, 2021, respectively.

The Company was ~~in compliance~~compliant with all applicable financial covenants contained in its ~~corporate level~~corporate-level debt agreements at September 30, ~~2017.~~2022.

During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option ~~bore interest at a fixed rate of 6.804% through April 2017~~ and bear interest at a variable rate of ~~three month~~three-month LIBOR plus 170 basis points ~~thereafter~~ through maturity. The interest rate at September 30, ~~2017~~2022 was ~~3.011%~~4.482%. As of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, there was $129,120 original principal amount of Trust Preferred Securities outstanding and ~~$1,949~~$1,451 and ~~$2,024,~~$1,525, respectively, of unamortized debt issuance costs.

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~~During~~

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

Capitalized interest recorded during the nine months ended September 30, ~~2017~~2022 and ~~2016, the Company incurred debt satisfaction charges, net of $3~~2021 was $4,927 and ~~$437, respectively, on the retirement of various debt instruments, other than those disclosed elsewhere in the Company's condensed consolidated financial statements.~~$2,124, respectively.

(8) Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings.

Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its ~~variable-rate~~variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~

The ~~effective portion of~~ changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ~~ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The~~ Company did not incur any ineffectiveness during the nine months ended September 30, ~~2017~~2022 and ~~2016.~~2021.

~~The~~During July 2022, the Company ~~has designated the interest-rate~~transitioned its four interest rate swap agreements with its counterparties to a benchmark rate of Term SOFR. The swaps were designated as cash flow hedges of the risk ofin variability attributable to changes in the ~~LIBOR~~Term SOFR swap ~~rate~~rates on ~~$505,000 of LIBOR-indexed variable-rate~~its $300,000 SOFR-indexed variable rate unsecured term ~~loans.~~loan. Accordingly, changes in ~~the~~ fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable.

~~Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on~~ The swaps expire coterminous with the maturity of the term ~~loans.~~loan in January 2025. During the next 12 months, the Company estimates that an additional ~~$297~~$7,543 will be reclassified as a decrease toin interest ~~expense.~~expense if the swaps remain outstanding.


Interest Rate Derivative	Number of Instruments	Notional
Interest Rate Swaps	4	$300,000

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LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:~~2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

Interest Rate Derivative Number of Instruments Notional
Interest Rate Swaps 10 $505,000

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance ~~sheets as of September 30, 2017 and December 31, 2016.~~sheets:

As of September 30, 2017 As of December 31, 2016
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as hedging instruments
Interest Rate Swap Asset Other Assets $ 510
Other Assets $ 44
Interest Rate Swap Liability Accounts Payable and Other Liabilities $ —
Accounts Payable and Other Liabilities $ (1,077 )

As of September 30, 2022

As of December 31, 2021

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments

Interest Rate Swaps

Other Assets

16,586

Other Liabilities

(6,258)

The ~~tables~~table below ~~present~~presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, ~~2017~~2022 and ~~2016.~~2021.


Derivatives in Cash Flow	Amount of Gain Recognized in OCI on Derivatives September 30,				Amount of Loss Reclassified from Accumulated OCI into Income(1) September 30,
Hedging Relationships	2022		2021		2022		2021
Interest Rate Swaps	$	21,316	$	3,381	$	1,528	$	3,691

Derivatives in Cash Flow Amount of Income (Loss) Recognized in OCI on Derivatives (Effective Portion) September 30,
Location of Loss
Reclassified from
Accumulated OCI into Income (Effective Portion)
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) September 30,
Hedging Relationships 2017 2016 2017 2016
Interest Rate Swaps $ 581
$ (6,035 ) Interest expense $ 962
$ 3,091
(1) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations.

Total interest expense presented in the unaudited condensed consolidated statements of operations, which includes the effects of cash flow hedges, was $32,758 and $35,170 for the nine months ended September 30, 2022 and 2021, respectively.

The Company's agreements with swap ~~derivative~~derivatives counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, ~~2017,~~2022, the Company had not posted any collateral related to the agreements.

(9) Lease Accounting

Lessor

The Company’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.

Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.

Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.

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~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.


~~(10)~~	~~Concentration of Risk~~

Certain tenants have been experiencing financial difficulties as a result of the current economic conditions. During the nine months ended September 30, 2022 and 2021, the Company wrote off an aggregate of $316 and $463, respectively, accounts receivable relating to certain tenants suffering from the current economic conditions.

The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the nine months ended September 30, 2022, the Company incurred $30 of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations. The Company incurred no costs that were not incremental to the execution of leases in 2021.

The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.

The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
Classification	2022		2021		2022		2021
Fixed	$	66,956	$	71,357	$	200,965	$	213,929
Variable(1)(2)	11,318		10,996		33,784		40,641
Total	$	78,274	$	82,353	$	234,749	$	254,570

(1) Primarily comprised of tenant reimbursements.

(2) Variable income contains termination income of $238 and $14,105 for the nine months ended September 30, 2022 and 2021, respectively. The 2021 termination income is primarily related to a tenant that terminated its lease at the Company's Durham, New Hampshire industrial property.

In May 2022, one of the Company's tenants exercised the purchase option for $28,000 in its operating lease with a sale date of July 2022. The purchase option was not reasonably certain to be exercised at lease inception, resulting in a modification of the operating lease. As a result of this modification to the lease, the Company re-evaluated the lease classification and classified the lease as a sales-type lease. The Company recorded $28,000 in Investment in a sales-type lease and derecognized $17,292 from Real estate, net, $619 from Deferred expenses and $775 from Rent receivable-deferred on its unaudited condensed consolidated balance sheet. The Company recognized $9,314 in Selling profit from sales-type leases in its unaudited condensed consolidated statements of operations for the nine months ended September 30, 2022. In July, the tenant completed the purchase of the property, resulting in the derecognition of the $28,000 investment in a sales-type lease.

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LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

Future fixed rental receipts for operating leases, assuming no new or re-negotiated leases as of September 30, 2022 were as follows:


Nine months ended September 30,	Total
2022 - remainder	$	64,707
2023	260,818
2024	233,959
2025	213,892
2026	193,909
2027	158,445
Thereafter	591,832
Total	$	1,717,562

The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases, unless such payments are reasonably certain to be received.

Lessee

The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2022. The leases have remaining lease terms of up to 38 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.

The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.

The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.

The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.

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LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

Supplemental information related to operating leases is as follows:


	Nine Months Ended
	September 30, 2022		September 30, 2021
Weighted-average remaining lease term
Operating leases (years)	9.4		11.3
Weighted-average discount rate
Operating leases	4.0	%	4.1	%

The components of lease expense for the nine months ended September 30, 2022 and 2021 were as follows:


Income Statement Classification	Fixed		Variable		Total
2022:
Property operating	$	2,657	$	—	$	2,657
General and administrative	1,144		81		1,225
Total	$	3,801	$	81	$	3,882

2021:
Property operating	$	2,734	$	2	$	2,736
General and administrative	1,037		24		1,061
Total	$	3,771	$	26	$	3,797

The Company recognized sublease income of $2,490 and $2,569 for the nine months ended September 30, 2022 and 2021, respectively.

The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2022:


	Operating Leases
2022 - remainder	$	1,198
2023	5,290
2024	5,199
2025	5,204
2026	4,174
2027	3,673
Thereafter	7,501
Total lease payments	$	32,239
Less: Imputed interest	(6,177)
Present value of operating lease liabilities	$	26,062

(10)Concentration of Risk

The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, no single tenant represented greater than 10% of rental revenues.

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.

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~~(11)~~	~~Equity~~

~~Shareholders' Equity.~~ ~~During the nine months ended~~

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017, the~~2022 and 2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(11)Equity

Shareholders' Equity:

At-The-Market Offering Program. The Company ~~issued 1,593,603 common shares under its~~maintains an At-The-Market offering program ~~and generated aggregate gross proceeds of $17,362. During the nine months ended September 30, 2016,~~("ATM program") under which the Company ~~issued 577,823~~can issue common shares, ~~under its direct share purchase plan, which includes its dividend reinvestment plan, raising net proceeds of $4,115.~~including through forward sales contracts.

During the nine months ended September 30, ~~2017 and 2016,~~2021, the Company ~~granted common~~sold 1,052,800 shares ~~to certain employees as follows:~~

Nine Months ended September 30,
2017 2016
Performance Shares⁽¹⁾

Shares granted:
Index - 1Q 106,706 404,466
Peer - 1Q 106,705 404,463
Index - 2Q 163,466 —
Peer - 2Q 163,463 —

Grant date fair value per share:⁽²⁾

Index - 1Q $6.82 $4.53
Peer - 1Q $6.34 $4.58
Index - 2Q $4.05 —
Peer - 2Q $4.27 —

Non-Vested Common Shares:⁽³⁾

Shares issued 237,560 225,090
Grant date fair value $2,551 $1,724

~~(1)~~

The shares vest based on the Company's total shareholder return growth after a three-year measurement period relative to an index and a group of Company peers. Dividends will not be paid on these grants until earned. Once the performance criteria are met and the actual number of shares earned is determined, such shares vest immediately. The 2Q shares were subject to shareholder approval, which was obtained in May 2017.


~~(2)~~	~~The fair value of grants was determined at the grant date using a Monte Carlo simulation model.~~


~~(3)~~	~~The shares vest ratably over a three-year service period.~~

~~In addition,~~under the ATM Program for net proceeds of $13,574. The Company did not sell shares under the ATM program during the nine months ended September 30, ~~2017 and 2016,~~2022.

During the nine months ended September 30, 2022, the Company issued ~~44,238~~3,649,023 common shares previously sold on a forward basis in the first quarter of 2021 on the maturity date of the contracts and ~~43,503,~~received $38,492 of net proceeds. During the nine months ended September 30, 2021, the Company settled 3,875,751 common shares previously sold on a forward basis on the maturity date of the contract and received $41,933 of net proceeds.

During 2021, the Company amended the terms of its ATM offering program, under which the Company may, from time to time, sell up to $350,000 of common shares over the term of the program. As of September 30, 2022, common shares with an aggregate value of $294,985 remain available for issuance under the ATM program.

Underwritten equity offerings. During 2021, the Company entered into forward sales contracts for the sale of 16,000,000 common shares at a public offering price of $12.11 per common share in an underwritten equity offering that have not yet settled. The forward sales contracts mature in December 2022, subject to the Company's rights to elect cash or net share settlement. As of September 30, 2022, the forward sales contracts had an aggregate settlement price of $182,141, which is subject to adjustment in accordance with the forward sales contracts.

Stock Based Compensation. During the nine months ended September 30, 2022 and 2021, the Company issued 47,505 and 38,803, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of ~~$463~~$616 and ~~$350,~~$437, respectively.

Share Repurchase Program. In ~~July 2015,~~August 2022, the Company's Board of Trustees authorized the repurchase of an additional up to 10,000,000 common ~~shares.~~shares under the Company's share repurchase program with no expiration date. During the nine months ended September 30, ~~2016, the Company repurchased 1,184,113~~2022, 11,702,074 common shares atwere repurchased and retired for an average price of ~~$7.56~~$10.84 per share. There were no common ~~share. No repurchases occurred~~shares repurchased during the nine months ended September 30, ~~2017.~~2021. As of September 30, 2022, 7,274,241 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were $3,649 of unsettled repurchases as of September 30, 2022.

Series C Preferred Stock. The Company had 1,935,400 shares of Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) outstanding at September 30, 2022. The shares have a dividend of $3.25 per share per annum and have a liquidation preference of $96,770. As of September 30, 2022, each share was convertible into 2.4339 common shares. This conversion ratio may increase over time if the Company's common share dividend exceeds certain quarterly thresholds.

If certain fundamental changes occur, holders may require the Company, in certain circumstances, to repurchase all or part of their shares of Series C Preferred. In addition, upon the occurrence of certain fundamental changes, the Company will, under certain circumstances, increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the shares of Series C Preferred becoming convertible into shares of the public acquiring or surviving company.

The Company may, at the Company's option, cause shares of Series C Preferred to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company's common shares equals or exceeds 125% of the then prevailing conversion price of the Series C Preferred.

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~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)

Holders of shares of Series C Preferred generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters and under certain other circumstances. Upon conversion, the Company may choose to deliver the conversion value to investors in cash, common shares, or a combination of cash and common shares.

A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:


	Nine Months Ended September 30,
	2022		2021
Balance at beginning of period	$	(6,258)	$	(17,963)
Other comprehensive income before reclassifications	22,469		3,381
Amounts of loss reclassified from accumulated other comprehensive income to interest expense	1,557		3,691
Balance at end of period	$	17,768	$	(10,891)

Nine Months ended September 30,
2017 2016
Balance at beginning of period $ (1,033 ) $ (1,939 )
Other comprehensive income (loss) before reclassifications 581
(6,035 )
Amounts of loss reclassified from accumulated other comprehensive income to interest expense 962
3,091
Balance at end of period $ 510
$ (4,883 )

Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued limited partner interests in LCIF (“OP ~~units~~units”) as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable at the holder's option for approximately 1.13 common shares, subject to future adjustments.

As of September 30, ~~2017,~~2022, there were approximately ~~3,225,000~~745,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference.


~~(12)~~	~~Related Party Transactions~~

~~In connection with efforts to procure non-recourse mezzanine financing from an affiliate~~The following discloses the effects of changes in the Company's ~~Chairman, pursuant to the terms of the EB-5 visa program administered by the United States Citizenship and Immigration Services (“USCIS”), for a joint venture~~ownership interests in ~~Houston, Texas, in which the Company has an investment, the Company executed a guaranty in favor of an affiliate of~~ its Chairman. The guaranty provided that the Company would reimburse investors providing the funds for such financing if the following occured: (1) the joint venture received such funds, (2) the USCIS denied the financing solely because the project was not permitted under the EB-5 visa program, and (3) the joint venture failed to return such funds. As of September 30, 2017, USCIS approved the project, and the guaranty terminated by its terms.noncontrolling interests:

In addition, in connection with efforts, on a non-binding basis, to procure non-recourse mezzanine financing from an affiliate of the Company's Chairman, pursuant to the terms of the EB-5 visa program administered by the USCIS, for an investment in Charlotte, North Carolina owned by LCIF, LCIF has agreed to reimburse the Chairman's affiliate up to approximately $107 for its expenses, but no expenses were reimbursed as of September 30, 2017.


	Net Income Attributable to Shareholders and Transfers from Noncontrolling Interests
	Nine Months Ended September 30,
	2022		2021
Net income attributable to LXP Industrial Trust shareholders	$	75,310	$	120,358
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for reallocation of noncontrolling interests	—		435
Increase in additional paid-in-capital for redemption of noncontrolling OP units	177		670
Change from net income attributable to shareholders and transfers from noncontrolling interests	$	75,487	$	121,463

(12)Related Party Transactions

There were no ~~other~~ related party transactions other than those disclosed elsewhere in ~~this Quarterly Report and the audited~~these unaudited condensed consolidated financial ~~statements in~~statements.

(13)Commitments and Contingencies

In addition to the ~~Annual Report.~~

commitments and contingencies disclosed elsewhere, the Company has the following commitments and contingencies.

Table of Contents

~~LEXINGTON REALTY~~LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2017~~2022 and ~~2016~~2021

(Unaudited and dollars in thousands, except share/unit and per share/unit data)


~~(13)~~	~~Commitments and Contingencies~~

~~In addition to the commitments and contingencies disclosed elsewhere, including in Note 12 above, and previously disclosed, the Company has the following commitments and contingencies.~~

The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.

As of September 30, 2022, the Company had six ongoing consolidated development projects and expects to incur approximately $56,400 and $113,300 in the remainder of 2022 and 2023, respectively, excluding noncontrolling interests' share, to substantially complete the construction of the projects. As of September 30, 2022, the Company has interests in various land parcels held for development. The Company is unable to estimate the timing of any required funding for the potential development projects on these parcels.

The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, ~~Lexington~~LXP will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion but, no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement.

From time to time, the Company is directly ~~and~~or indirectly involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations.

~~GSMSC II 2006-GG6 Bridgewater Hills Corporate Center, LLC v. Lexington Realty Trust (Supreme Court of the State of New York, County of New York-Index No. 653117/2015)~~

On September 16, 2015, GSMSC II 2006-GG6 Bridgewater Hills Corporate Center, LLC commenced an action as lender against the Company based on a limited guaranty of recourse obligations executed by a predecessor entity of the Company in connection with a mortgage loan secured by a property owner subsidiary's commercial property in Bridgewater, New Jersey. The property owner subsidiary defaulted due to non-payment after the sole tenant vacated at the end of the lease term. The lender claimed approximately $9,200 in order to satisfy the outstanding amount of the loan, plus interest, reasonable attorney’s fees and other costs and disbursements related thereto.

The lender claimed that the Company's limited guaranty was triggered due to the merger of Newkirk Realty Trust, Inc. and Lexington Corporate Properties Trust on December 31, 2006, arguing that it constituted an event of default because it was a transfer that was not permitted by the loan agreement. The limited guaranty provides that the guarantor's liability for the guaranteed obligations shall not exceed $10,000. The Company filed a motion to dismiss, which was generally denied. The parties conducted discovery consisting of document production. The Company recorded a $2,050 litigation reserve during the quarter ended September 30, 2017 relating to this litigation as the Company determined that a liability was "probable" (as defined by FASB ASC 450-20-20). A mediation was held on October 5, 2017, but a settlement was not reached that day. Following the mediation, a settlement agreement was executed that requires a $2,050 payment.

~~The lender also brought a foreclosure action against the property owner subsidiary. A foreclosure sale was held September 13, 2016 and the lender acquired the property for a nominal amount.~~

During the nine months ended September 30, 2017, the Company incurred $2,226 in legal costs relating to this litigation, which are included in general and administrative expense on the Company's unaudited condensed consolidated statement of operations.

~~Table of Contents~~

~~LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit and per share/unit data)~~


~~(14)~~	~~Supplemental Disclosure of Statement of Cash Flow Information~~

In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2017 and 2016, the Company paid $50,691 and $62,995, respectively, for interest and $1,687 and $1,163, respectively, for income taxes.

During the nine months ended September 30, 2016, the Company sold its interests in certain properties, which included the assumption by the buyers of such properties of $242,269 of the related non-recourse mortgage debt.


~~(15)~~	~~Subsequent Events~~

~~Subsequent to September 30, 2017 and in addition to disclosures elsewhere in the unaudited condensed consolidated financial statements, the Company:~~

~~acquired an industrial property in Lafayette, Indiana for $17,450;~~

~~disposed of three properties to unrelated third parties for an aggregate gross sale price of $19,043; and~~

~~transferred an office property in Lisle, Illinois to its lender in full satisfaction of the related $9,120 non-recourse mortgage.~~

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~(Unaudited and in thousands)~~

September 30, 2017 December 31, 2016
Assets:
Real estate, at cost $ 761,733
$ 731,202
Real estate - intangible assets 114,134
104,761
Investment in real estate under construction —
40,443
875,867
876,406
Less: accumulated depreciation and amortization 234,456
236,930
Real estate, net 641,411
639,476
Cash and cash equivalents 66,887
52,031
Restricted cash 1,540
1,545
Investment in and advances to non-consolidated entities 5,738
5,526
Deferred expenses, net 6,543
5,070
Rent receivable - current 233
358
Rent receivable - deferred 20,616
17,449
Related party advances, net —
5,967
Other assets 2,713
1,182
Total assets $ 745,681
$ 728,604

Liabilities and Partners' Capital:
Liabilities:
Mortgages and notes payable, net $ 168,490
$ 169,212
Co-borrower debt 165,839
146,404
Related party advances, net 2,157
—
Accounts payable and other liabilities 5,197
3,559
Accrued interest payable 663
673
Deferred revenue - including below market leases, net 853
1,003
Distributions payable 14,742
16,916
Prepaid rent 3,015
3,214
Total liabilities 360,956
340,981

Commitments and contingencies

Partners' capital 384,725
387,623
Total liabilities and partners' capital $ 745,681
$ 728,604

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(Unaudited and in thousands, except unit data)~~

Three Months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Gross revenues:
Rental $ 19,126
$ 28,496
$ 55,125
$ 98,648
Tenant reimbursements 2,116
2,062
6,044
6,782
Total gross revenues 21,242
30,558
61,169
105,430
Expense applicable to revenues:
Depreciation and amortization (10,114 ) (7,793 ) (28,495 ) (25,402 )
Property operating (3,000 ) (3,371 ) (9,599 ) (11,079 )
General and administrative (1,727 ) (2,643 ) (5,019 ) (7,112 )
Non-operating income 3
44
235
299
Interest and amortization expense (4,099 ) (7,109 ) (11,438 ) (23,835 )
Debt satisfaction charges, net —
(5,773 ) —
(7,388 )
Impairment charges (6,802 ) (65,509 ) (12,061 ) (67,935 )
Gains on sales of properties —
—
—
16,029
Loss before provision for income taxes and equity in earnings of non-consolidated entities (4,497 ) (61,596 ) (5,208 ) (20,993 )
Provision for income taxes (4 ) (32 ) (30 ) (57 )
Equity in earnings of non-consolidated entities 79
49
338
252
Net loss $ (4,422 ) $ (61,579 ) $ (4,900 ) $ (20,798 )
Net loss per unit $ (0.05 ) $ (0.74 ) $ (0.06 ) $ (0.25 )
Weighted-average units outstanding 83,125,058
83,241,396
83,202,190
83,241,396

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL~~

~~(Unaudited and in thousands, except unit amounts)~~

Nine Months ended September 30, 2017 Units Partners' Capital
Balance December 31, 2016 83,241,396
$ 387,623
Changes in co-borrower debt allocation —
180,565
Redemption of OP units (2,675,785 ) (129,990 )
Distributions —
(48,573 )
Net loss —
(4,900 )
Balance September 30, 2017 80,565,611
$ 384,725

Nine Months ended September 30, 2016
Balance December 31, 2015 83,241,396
$ 461,657
Changes in co-borrower debt allocation —
(17,179 )
Distributions —
(49,900 )
Net loss —
(20,798 )
Balance September 30, 2016 83,241,396
$ 373,780

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited and in thousands)~~

Nine Months ended September 30,
2017 2016
Net cash provided by operating activities $ 32,685
$ 30,975
Cash flows from investing activities:
Acquisition of real estate, including intangible assets (24,317 ) —
Investments in real estate under construction (20,894 ) (23,390 )
Capital expenditures (3,925 ) (1,226 )
Net proceeds from the sale of properties 7,106
185,219
Investment in and advances to non-consolidated entities (1,067 ) (81 )
Distributions from non-consolidated entities in excess of accumulated earnings 855
425
Increase in deferred leasing costs (2,157 ) (997 )
Change in restricted cash 5
812
Real estate deposits (24 ) 1,932
Net cash provided by (used in) investing activities (44,418 ) 162,694
Cash flows from financing activities:
Distributions to partners (50,747 ) (50,200 )
Principal amortization payments (785 ) (1,053 )
Increase in deferred financing costs (13 ) (79 )
Principal payments on debt, excluding normal amortization —
(23,934 )
Co-borrower debt borrowings (payments) 200,000
(58,000 )
OP unit redemptions (129,990 ) —
Related party advances, net 8,124
553
Net cash provided by (used in) financing activities 26,589
(132,713 )
Change in cash and cash equivalents 14,856
60,956
Cash and cash equivalents, at beginning of period 52,031
19,130
Cash and cash equivalents, at end of period $ 66,887
$ 80,086

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

~~(1)~~ ~~The Partnership and Financial Statement Presentation~~

Lepercq Corporate Income Fund L.P. (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Partnership”) was organized in 1986 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly-owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of September 30, 2017, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned approximately 96% of the outstanding units of the Partnership.

As of September 30, 2017, the Partnership had ownership interests in 33 consolidated real estate properties, located in 21 states. The properties in which the Partnership has an interest are leased to tenants in various industries.

The assets and credit of each property owner subsidiary of the Partnership with a property subject to a mortgage loan are not available to creditors to satisfy the debt and the other obligations of any other person, including any other property owner subsidiary of the Partnership or any other 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 or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2017 have been prepared by the Partnership in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Partnership's audited consolidated financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017 (“Annual Report”).

~~Basis of Presentation and Consolidation.~~ The Partnership's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity (“VIE”). Entities that the Partnership does not control and entities that are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP.

~~Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period. There are no potential dilutive securities.~~

~~Unit Redemptions~~. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for shares of beneficial interests classified as common stock of Lexington, par value $0.0001 per share ("common shares"), on a one to approximately 1.13 basis, subject to future adjustments. These units are not mandatorily redeemable by the Partnership. As of September 30, 2017, Lexington's common shares had a closing price of $10.22 per share. The estimated fair value of these units was $37,117, assuming all outstanding limited partner units not held by Lexington were redeemed on such date.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

~~Allocation of Overhead Expenses~~. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership's partnership agreement. The allocation is based upon gross rental revenues.

~~Distributions; Allocations of Income and Loss~~. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $48,573 ($0.58 per weighted-average unit) and $49,900 ($0.60 per weighted-average unit) to its partners during the nine months ended September 30, 2017 and 2016, respectively.

~~Use of Estimates.~~ The Partnership has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

~~Fair Value Measurements.~~ The Partnership follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

~~Acquisition, Development and Construction Arrangements.~~ The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

~~Co-borrower Debt.~~ The Partnership is subject to ASC 405-40, which requires recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors.

~~Revision to Previously Issued Financial Statements.~~ During the quarter ended December 31, 2016, the Partnership corrected an immaterial error in the treatment of a lease termination payment received in the quarter of June 30, 2016 in the amount of $7,685. The lease termination payment was originally amortized over the life of the new tenant lease that necessitated the lease termination. As corrected, the payment was fully recognized in the Partnership's total gross revenues in the quarter ended June 30, 2016.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

The Partnership concluded that the error noted above was not material to any historical periods presented. However, in order to correctly present the treatment of the lease termination payment, management elected to revise previously issued financial statements in the Partnership's next subsequent periodic filing that included such financial statements. The following table shows the affected line items within the Partnership's unaudited condensed consolidated financial statements:

For the three months ended September 30, 2016
As Originally Reported Correction As Adjusted
Total gross revenues $ 30,908
$ (350 ) $ 30,558
Net loss $ (60,901 ) $ (678 ) $ (61,579 )
Net loss per unit $ (0.73 ) $ (0.01 ) $ (0.74 )

For the nine months ended September 30, 2016
As Originally Reported Correction As Adjusted
Total gross revenues $ 98,784
$ 6,646
$ 105,430
Net income (loss) $ (26,652 ) $ 5,854
$ (20,798 )
Net income (loss) per unit $ (0.32 ) $ 0.07
$ (0.25 )

~~Recently Issued Accounting Guidance.~~ In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Partnership’s revenue-producing contracts are primarily leases that are not within the scope of this standard as leases are excluded from ASU 2014-09. The Partnership expects that it may be impacted in its recognition of non-lease revenue, non-lease components of revenue from lease agreements (upon adoption of ASU 2016-02) and the timing of its recognition of real estate sale transactions. Under ASU 2014-09, revenue recognition for real estate sales is largely based on the transfer of control and the buyer having the ability to direct the use of, or obtain substantially all of the remaining benefit from, the asset (which generally will occur on the closing date); the factor of continuing involvement is no longer a specific consideration for the timing of recognition. As a result, the Partnership generally expects that the new guidance may result in transactions qualifying as sales of real estate at an earlier date than under current accounting guidance. The Partnership is finalizing its evaluation of the impact of the standard but currently believes the impact would be limited to the timing and income statement presentation of revenue and not the total amount of revenue recognized over time. The Partnership will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective approach. As the majority of the Partnership’s revenue is from rental income related to leases, the Partnership does not expect the ASU to have a material impact on the consolidated financial statements upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date that have lease terms of more than 12 months and amends certain lessor guidance. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for the Partnership's future obligations under its ground lease arrangements for which the Partnership is the lessee. From a lessor perspective, the Partnership expects that it will be required to bifurcate lease agreements to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be primarily recognized on a straight-line basis over the lease term and certain non-lease components will be accounted for under the new revenue recognition guidance in ASU 2014-09 (upon adoption of ASU 2016-02). Additionally, the new ASU will require that the Partnership capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; with early adoption permitted. The Partnership continues to evaluate the impact of the adoption of the new guidance on its consolidated financial statements.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years; however early adoption is permitted. The Partnership does not believe this guidance will have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Partnership's consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Partnership's consolidated statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Partnership expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for those acquisitions that are not businesses will be capitalized rather than expensed.

In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU requires the Partnership to measure at fair value any retained interest in a partial sale of real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. The Partnership will adopt ASU 2017-05 effective January 1, 2018, along with ASU 2014-09, and it is not expected to have a material impact on its consolidated financial statements.

~~(2)~~ ~~Investment in Real Estate and Real Estate Under Construction~~

~~The Partnership completed the following acquisitions and build-to-suit arrangements during the nine months ended September 30, 2017:~~

Property Type Location Acquisition Date
Initial
Cost
Basis
Lease Expiration Land and Land Estate Building and Improvements Lease in-place Value Intangible
Office Charlotte, NC April 2017 $ 61,339
04/2032 $ 3,771
$ 47,064
$ 10,504
Industrial Grand Prairie, TX June 2017 24,317
03/2037 3,166
17,985
3,166
$ 85,656
$ 6,937
$ 65,049
$ 13,670

During the nine months ended September 30, 2017, the Partnership disposed of its interest in two vacant office properties for an aggregate gross sale price of $7,591 and recognized aggregate impairment charges of $5,259. During the nine months ended September 30, 2016, the Partnership disposed of its interest in certain properties, including land investments, for an aggregate gross sale price of $445,565. The Partnership recognized aggregate gains on sales of properties of $16,029, aggregate impairment charges of $67,935 and aggregate debt satisfaction charges of $7,388 relating to properties disposed of during the nine months ended September 30, 2016. The aggregate impairment charges recorded during the nine months ended September 30, 2016, related primarily to the sale of the three land investments in New York, New York. The land investments were subject to 99-year leases with annual escalations, and the deferred rent receivable balance at the date of sale of $91,213 was written off.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

The Partnership assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability and the potential sale or transfer of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. During the nine months ended September 30, 2017, the Partnership recognized an impairment charge of $6,802 on a partially vacant office property.

~~(3)~~ ~~Investments in and Advances to Non-Consolidated Entities~~

~~In July 2014, the Partnership acquired a 1.0% interest in an office property in Philadelphia, Pennsylvania for $263. The Partnership accounts for this investment under the cost basis of accounting.~~

~~On September 1, 2012, the Partnership acquired a 2% equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) for cash of $189 and the issuance of 457,211 limited partner units to Lexington.~~

The Partnership's carrying value in NLS at September 30, 2017 and December 31, 2016 was $5,436 and $5,224, respectively. The Partnership recognized net income from NLS of $323 and $236 in equity in earnings from non-consolidated entities during the nine months ended September 30, 2017 and 2016, respectively. The Partnership contributed $1,067 and $81 to NLS during the nine months ended September 30, 2017 and 2016, respectively. In addition, the Partnership received distributions of $1,178 and $661 from NLS during the nine months ended September 30, 2017 and 2016, respectively.

~~(4)~~ ~~Fair Value Measurements~~

~~The following table presents the Partnership's assets measured at fair value as of September 30, 2017, aggregated by the level in the fair value hierarchy within which those measurements fall:~~

Balance Fair Value Measurements Using
Description September 30, 2017 (Level 1) (Level 2) (Level 3)
Impaired real estate assets* $ 2,090
$ —
$ —
$ 2,090

* Represents a non-recurring fair value measurement as of the date of impairment.

~~The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of September 30, 2017 and December 31, 2016:~~

As of September 30, 2017 As of December 31, 2016
Carrying Amount Fair Value Carrying Amount Fair Value
Liabilities
Debt $ 334,329
$ 333,181
$ 315,616
$ 314,509

The Partnership estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Partnership may estimate fair values using market information such as broker opinions of value, recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Partnership has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Partnership under-estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over-estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

~~The fair value of the Partnership's debt is primarily estimated utilizing Level 3 inputs by using an estimated discounted cash flow analysis, based upon estimates of market interest rates.~~

~~Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable~~. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

~~(5)~~ ~~Mortgages and Notes Payable and Co-Borrower Debt~~

~~The Partnership had the following mortgages and notes payable outstanding as of September 30, 2017 and December 31, 2016:~~

September 30, 2017 December 31, 2016
Mortgages and notes payable $ 169,173
$ 169,958
Unamortized debt issuance costs (683 ) (746 )
$ 168,490
$ 169,212

Interest rates, including imputed rates, ranged from 4.0% to 6.5% at September 30, 2017 and December 31, 2016, and the mortgages and notes payable mature between 2019 and 2026. The weighted-average interest rate at September 30, 2017 and December 31, 2016 was approximately 4.7%.

Lexington's, and the Partnership's as co-borrower, $905,000 unsecured credit agreement with KeyBank National Association, as agent, was amended in September 2017 to, among other things, increase the overall facility to $1,105,000. With lender approval, Lexington can increase the size of the amended facility to an aggregate $2,010,000. A summary of the significant terms are as follows:



	~~Maturity Date~~	~~Current~~ ~~Interest Rate~~
~~$505,000 Revolving Credit Facility~~⁽¹⁾	~~August 2019~~	~~LIBOR + 1.00%~~
~~$300,000 Term Loan~~⁽²⁾	~~August 2020~~	~~LIBOR + 1.10%~~
~~$300,000 Term Loan~~⁽³⁾	~~January 2021~~	~~LIBOR + 1.10%~~


~~(1)~~	Increased from $400,000. Maturity date can be extended to August 2020 at the Lexington's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At September 30, 2017, the revolving credit facility had $200,000 of borrowings outstanding, $4,600 of letters of credit and availability of $300,400 subject to covenant compliance.


~~(2)~~	Increased from $250,000. The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on $250,000 of outstanding LIBOR-based borrowings.


~~(3)~~	Increased from $255,000. The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on $255,000 of outstanding LIBOR-based borrowings.

~~Lexington was in compliance with all applicable financial covenants contained in its corporate level debt agreements at September 30, 2017.~~

In accordance with the guidance of ASC 405-40, the Partnership, as it is a co-borrower with Lexington, recognizes a proportion of the outstanding amounts of the above-mentioned term loans and revolving credit facility as co-borrower debt in the accompanying unaudited condensed consolidated balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. The Partnership's allocated co-borrower debt was $165,839 and $146,404 as of September 30, 2017 and December 31, 2016, respectively. Non-cash changes in co-borrower debt are recognized in partners’ capital in the accompanying unaudited condensed consolidated statements of changes in partners’ capital.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

~~(6)~~ ~~Concentration of Risk~~

Subject to the terms of the partnership agreement, the Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2017 and 2016, the following tenants represented greater than 10% of rental revenues:

2017 2016
Preferred Freezer Services of Richland, LLC 17.9 % N/A
SM Ascott LLC⁽¹⁾
N/A
13.1 %
Tribeca Ascott LLC⁽¹⁾
N/A
11.2 %
AL-Stone Ground Tenant LLC⁽¹⁾
N/A
10.2 %


~~(1)~~	The Partnership net leased these individual land parcels to the tenants under non-cancellable 99-year (original term) leases. The improvements on these parcels are owned by the tenants and consist of three high-rise hotels located in New York, NY. The Partnership sold these assets in September 2016.

~~Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.~~

~~(7)~~ ~~Related Party Transactions~~

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report.

~~The Partnership had outstanding net advances owed from (to) Lexington of $(2,157) and $5,967 as of September 30, 2017 and December 31, 2016, respectively. The advances are payable on demand.~~

Lexington earned distributions of $46,732 and $48,032 during the nine months ended September 30, 2017 and 2016, respectively. In September 2017, the Partnership redeemed 2,675,785 OP units owned by Lexington that were entitled to aggregate annual distributions of $3.25 per unit for $129,990.

The Partnership was allocated interest expense by Lexington, in accordance with the partnership agreement, relating to certain lending facilities of $5,913 and $9,605 for the nine months ended September 30, 2017 and 2016, respectively.

Lexington, on behalf of the General Partner, pays for certain general administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $4,911 and $7,262 for the nine months ended September 30, 2017 and 2016, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses of $515 and $580 for the nine months ended September 30, 2017 and 2016, respectively, for aggregate fees charged by the affiliate.

~~(8)~~ ~~Commitments and Contingencies~~

~~In addition to the commitments and contingencies disclosed elsewhere, the Partnership has the following commitments and contingencies.~~

The Partnership is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Partnership, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.

~~Table of Contents~~

~~LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~September 30, 2017 and 2016~~

~~(Unaudited and dollars in thousands, except share/unit data)~~

The Partnership and Lexington are parties to a funding agreement under which Lexington may be required to fund distributions made on account of OP units. Pursuant to the funding agreement, if the Partnership does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington is required to fund the shortfall. Payments under the agreement will be made in the form of loans to the Partnership and will bear interest at prevailing rates as determined by Lexington in its discretion, but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts had been advanced under this funding agreement.

In May 2014, the Partnership guaranteed $250,000 aggregate principal amount of 4.40% Senior Notes due 2024 (“2024 Senior Notes”) issued by Lexington at an issuance price of 99.883% of the principal amount and in June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“2023 Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount, collectively referred to as the Senior Notes. The Senior Notes are unsecured and pay interest semi-annually in arrears. Lexington may redeem the Senior Notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

From time to time, the Partnership is directly or indirectly involved in legal proceedings arising in the ordinary course of the Partnership's business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations.

~~(9)~~ (14)Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, the ~~Partnership~~Company paid ~~$11,527~~$33,430 and ~~$23,570,~~$35,515, respectively, for interest and ~~$121~~$1,218 and ~~$33,~~$1,273, respectively, for income taxes.

~~In 2016,~~During the ~~Partnership sold its interest~~nine months ended September 30, 2022 and 2021, the Company accrued additions for capital projects of $52,049 and $20,540, respectively.

During the nine months ended September 30, 2021, the Company exercised extension options on a lease that resulted in ~~certain land investments, which~~a non-cash increase of $438 to the related operating lease liability and right of use asset.

During the nine months ended September 30, 2021, LCIF disposed of three real estate assets. The consideration included the redemption of 1,598,906 OP Units valued at $22,305 and the assumption of the aggregate related non-recourse ~~mortgage~~ debt of ~~$242,269.~~$11,610.

During the nine months ended September 30, 2021, the acquisition of the interests in RR Ocala 44, LLC joint venture not already owned by the Company included a $489 non-cash increase to investments in real estate under construction and the noncontrolling interest because a member of the joint venture made a non-cash contribution of the land in exchange for its ownership interest in the joint venture.

~~(10)~~

(15)Subsequent Events

Subsequent to September 30, ~~2017,~~2022, the ~~Partnership sold~~Company:

•leased approximately 100 acres of land in the Phoenix, Arizona market for 20 years;

•repurchased and retired 400,000 common shares for an average price of $9.10 per share; and

•borrowed $55,000 on its ~~interest in a vacant industrial property for $10,000.~~

revolving credit facility.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Introduction

When we use the terms “the Company,” “we,” “us” and “our,” we mean Lexington Realty Trust and all entities owned by us, including non-consolidated entities, except where it is clear that the term means only Lexington Realty Trust. When we use the terms the ~~“Partnership” or “LCIF”,~~“Company,” the “Trust,” “LXP,” “we,” “our,” and “us,” we ~~mean Lepercq Corporate Income Fund L.P.~~refer collectively to LXP Industrial Trust and its consolidated subsidiaries. All of the Company's interests are held, and all of the property operating activities are conducted through special purposes entities, ~~owned by it, including non-consolidated~~which we refer to as property owner subsidiaries or lender subsidiaries and are separate and distinct legal entities, ~~except where it is clear that the term means only LCIF.~~but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three and nine months ended September 30, ~~2017.~~2022. The results of operations contained herein for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 are not necessarily indicative of the results that may be expected for a full year.

When we use the term “REIT,” we mean real estate investment trust. All references to 2022 and 2021, refer to the periods ending September 30, 2022 and 2021, respectively and our fiscal year ended December 31, 2021.

When we use the term “GAAP,” we mean United States generally accepted accounting principles in effect from time to time.

When we use the term “common shares,” we mean our shares of beneficial interest par value $0.0001, classified as common stock. When we use the term “Series C Preferred Shares,” we mean our beneficial interest classified as 6.50% Series C Cumulative Convertible Preferred Stock.

When we use the term “base rent,” we mean GAAP rental revenue and ancillary income, excluding billed tenant reimbursements and lease termination income.

The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations of ~~Lexington Realty~~LXP Industrial Trust ~~and LCIF~~ for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~,2021, and significant factors that could affect ~~their~~its prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited condensed consolidated financial statements of the Company ~~and the Partnership~~ included herein and notes thereto and with the consolidated financial statements and notes thereto included in the Company's ~~and the Partnership's~~ most recent Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on ~~March 1, 2017,~~February 24, 2022, which we refer to as the Annual Report. Historical results may not be indicative of future performance.

Forward-Looking Statements. This Quarterly Report, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, ~~which we refer to as~~or the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our 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” or similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. In particular, among the factors that could cause actual results, performances or achievements to differ materially from current expectations, strategies or plans include, among others, ~~any~~those risks discussed below in ~~the respective~~ “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and under the headings “Risk Factors” in this Quarterly Report and under “Risk Factors” in Part I, Item A and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report and other periodic reports filed by the Company ~~or the Partnership~~ with the SEC. Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.

~~Lexington Realty Trust:~~

Overview

~~General. We are a Maryland real estate investment trust, or REIT, that owns a diversified portfolio of equity investments in single-tenant commercial properties.~~

As of September 30, ~~2017~~,2022, we had equity ownership interests in approximately ~~180~~118 consolidated real estate properties, located in 3821 states and containing an aggregate of approximately ~~47.9~~54.1 million square feet of space, approximately ~~97.9%~~99.1% of which was ~~leased, excluding properties subject to secured mortgage loans currently in default. The properties in which~~leased.

Since December 31, 2015 through September 30, 2022, we ~~have an interest are primarily net leased to tenants in various industries.~~

Our revenues and cash flows are generated predominantly from property rent receipts. As a result, growth in revenues and cash flows is directly correlated to our ability to (1) acquire income producing real estate investments and (2) re-lease properties that are vacant, or may become vacant, at favorable rental rates.

~~Our current business strategy is focused on enhancing our cash flow growth and stability, growing~~transitioned our portfolio ~~with attractive leased investments, reducing lease rollover risk~~from approximately 16% warehouse/distribution assets to approximately 99% warehouse/distribution assets. As of September 30, 2022, our portfolio consisted of 109 warehouse/distribution facilities and maintaining a strong and flexible balance sheet to allow us to act on opportunities as they arise. To that end, in 2017, we continued to be an active seller of non-core assets such as vacant properties and properties subject to short-term leases, and we have invested proceeds in predominantly industrial assets.

nine other properties.

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~~Leasing Activity. Re-leasing properties~~On February 8, 2022, we announced that ~~are currently vacant or as leases expire at favorable effective rates is one~~our Board of Trustees initiated a review of our ~~primary areas~~strategic alternatives. On April 8, 2022, we announced that our Board of focus for asset management. We strive to manage down our shorter-term leases and extend our weighted-average lease term on a cash basis, which was approximately 9.1 years at September 30, 2017 on a cash basis. Our weighted-average lease term at September 30, 2016 was 8.6 years on a cash basis.Trustees suspended the review of strategic alternatives.

During the third quarter of 2017, we entered into new leases and lease extensions encompassing approximately 1.2 million square feet. The average U.S. generally accepted accounting principles, or GAAP, base rent on these extended leases was $3.97 per square foot compared to the average GAAP base rent on these leases before extension of $3.74 per square foot. The weighted-average cost of tenant improvements and lease commissions was $2.07 per square foot for extended leases on a GAAP basis and there were no tenant improvements or lease commissions on new leases.

ThirdQuarter~~2017~~ 2022 Transaction Summary.

The following summarizes our significant transactions during the three months ended September 30, ~~2017.~~2022.

~~Investments:~~Leasing Activity:

~~Acquired four~~During the third quarter of 2022, we entered into new leases and lease extensions encompassing 0.3 million square feet. The average fixed rent on these extended leases was $7.57 per square foot compared to the average fixed rent on these leases before extension of $5.38 per square foot. The weighted-average cost of tenant improvements and lease commissions was $0.95 per square foot for extended leases and $2.26 per square foot for new first generation leases.

Investments:

•Invested $70.6 million in six ongoing development projects, which amount excludes our joint venture partners' share.

Capital Recycling:

•Disposed of our interest in an industrial warehouse/distribution property and two office/other properties for an aggregate ~~cost~~gross sales price of ~~$266.1~~$92.0 million. ~~The properties are net leased for an approximate 10-year term.~~

~~Completed the construction of the Opelika, Alabama industrial build-to-suit project for $37.3 million, which is net leased for a 25-year term.~~Debt:

~~Capital Recycling:~~

~~Disposed of our interests in various consolidated properties for approximately $42.0 million.~~

~~Debt:~~

•Amended our ~~unsecured credit agreement, increasing the borrowing capacity by $200.0 million consisting of a $105.0 million increase to the~~ revolving credit facility ~~a $50.0 million increase to~~and the 2025 term loan ~~maturing in 2020~~with a new revolving credit facility and ~~a $45.0 million increase to~~ the continuation of the 2025 term loan ~~maturing in 2021.~~

~~Satisfied an aggregate~~(the "2022 Credit Agreement"). The 2022 Credit Agreement, among other things: (i) extended the maturity date of ~~$25.2 million of non-recourse debt.~~

~~Acquisition and Development Activity.~~

~~Our acquisition and development activity~~the revolving portion from February 2023 to July 2026, with two six-month extension options, subject to certain conditions, (ii) reduced the applicable margin for the ~~past several years has consisted primarily~~revolving portion of ~~build-to-suit transactions whereby we (1) hire a developer, or provide funding~~the credit facility by five basis points to a ~~tenant,~~range from 0.725% to ~~develop~~1.40%, and allows for further reductions upon the achievement of to-be-determined sustainability metrics, (iii) amended the debt covenants by reducing the capitalization rate for determining asset value and (iv) transitioned the facility to SOFR. Simultaneously, we converted the interest rate swap agreements to Term SOFR, which resulted in a ~~property, or (2) provide capital to developers~~new fixed interest rate of 2.722% on the 2025 term loan.

•Borrowed $10.0 million, net, on our revolving credit facility.

Equity:

•Increased the availability under the repurchase program by 10.0 million shares.

•Repurchased and ~~commit to purchase the property upon completion. However, none~~retired 5.6 million common shares for an average price of ~~these transactions are done on a speculative basis without a committed tenant subject to a long-term lease.~~$10.16 per share.

Acquisition/Disposition Activity:

During the nine months ended September 30, ~~2017,~~2022, we ~~completed~~acquired the following warehouse/distribution assets:


Market	Square Feet	Initial Capitalized Cost (millions)		Date Acquired	Approximate Lease Term (years)	% Leased at Acquisition
Cincinnati/Dayton, OH(1)	232,500	$	23.4	February 2022	N/A	—	%
Cincinnati/Dayton, OH	544,320	48.7		February 2022	10	100	%
Phoenix, AZ	268,872	59.1		April 2022	15	100	%
	1,045,692	$	131.2

(1) Subsequent to acquisition, property was fully leased for approximately nine years.

Our acquisition activity for 2022 compared to our acquisition activity for 2021 has been, and ~~build-to-suit transactions:~~is expected to continue to be,

modest primarily due to current market conditions. In addition, we have been prioritizing development over acquisitions due to the increased yield that development generally provides. We continue to monitor the acquisition market, but price discovery has been occurring in most markets.

During the nine months ended September 30, 2022, we disposed of six properties, inclusive of the dispositions referenced above, for an aggregate gross disposition price of $147.3 million.

Location Property Type Square Feet (000's) Capitalized Cost (millions) Date Acquired Approximate Lease Term (Years)
Lake Jackson, TX⁽¹⁾
Office 275
$ 70.4
January 2017 20
Lebanon, IN Industrial 742
36.2
February 2017 7
New Century, KS Industrial 447
12.1
February 2017 10
Charlotte, NC Office 201
61.3
April 2017 15
Cleveland, TN Industrial 851
34.4
May 2017 7
Grand Prairie, TX Industrial 215
24.3
June 2017 20
San Antonio, TX Industrial 849
45.5
June 2017 10
Opelika, AL Industrial 165
37.3
July 2017 25
McDonough, GA⁽²⁾
Industrial 1,121
66.7
August 2017 10
Byhalia, MS Industrial 616
36.6
September 2017 10
Jackson, TN Industrial 1,062
57.9
September 2017 10
Smyrna, TN Industrial 1,505
104.9
September 2017 10
8,049
$ 587.6


~~(1)~~	~~Completed the construction of the final building of a four-building project. Capitalized cost excludes estimated developer partner payout of approximately $8.0 million.~~


~~(2)~~	~~Square footage includes a 220 thousand square foot expansion to be completed in 2018.~~

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Development Activity:

~~In addition, as~~As of September 30, ~~2017,~~2022, we had ~~the following forward purchase commitments:~~

Location Square Feet (000's) Property Type Maximum Acquisition Cost (millions) Estimated Acquisition Date Approximate Lease Term (Yrs)
Warren, MI⁽¹⁾
260
Industrial $ 47.0
4Q 17 15
Romulus, MI 500
Industrial 39.3
4Q 17 15
Lafayette, IN⁽²⁾
309
Industrial 17.5
4Q 17 7
1,069
$ 103.8

~~(1) A $4.6 million letter~~six consolidated development projects in process with an aggregate estimated total cost of ~~credit secures~~$515.8 million. We anticipate our remaining funding obligation to ~~purchase~~substantially complete the ~~property.~~construction and estimated tenant improvements and leasing costs of these six projects, exclusive of our joint venture partners' share, to be approximately $169.7 million. However, the risks associated with development, including supply chain issues, could adversely impact our estimates.

~~(2) We acquired the property in October 2017.~~

~~We can give no assurances that any unconsummated transactions described in this Quarterly Report will be consummated or, if consummated, will perform to our expectations.~~

Critical Accounting ~~Policies~~Estimates

~~Management's discussion~~In preparing the consolidated financial statements we have made estimates and ~~analysis~~assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Below is a summary of the critical accounting estimates used in the preparation of our unaudited condensed consolidated financial statements. A summary of our significant accounting policies which are important to the portrayal of our financial condition and results of operations is ~~based upon~~set forth in (1) Note 2 to our ~~unaudited condensed~~audited consolidated financial statements, which ~~have been prepared~~are included in ~~accordance with GAAP. In preparing our unaudited condensed consolidated financial statements~~“Financial Statements and Supplementary Data” in ~~accordance with GAAP and pursuant to the rules and regulations~~Part II, Item 8 of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates. Certain of our accounting policies are discussed under (1) Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report, (2) note 2 to our consolidated financial statements contained in our Annual Report and ~~(3) note 1~~(2) Note 2 to our unaudited condensed consolidated financial statements contained in this Quarterly Report.

Acquisition of Real Estate. Primarily all of our acquisitions of real estate assets and liabilities are accounted for as asset acquisitions. As such, the purchase prices of acquired tangible and intangible assets and liabilities are recorded and allocated at fair value on a relative basis. The recorded allocations of tangible assets are based on the “as-if-vacant” value using estimated cash flow projections of the properties acquired which incorporates discount, capitalization and interest rates as well as available comparable market information. Allocations of intangible assets includes management’s estimates of current market rents and leasing costs.

We ~~believe there have been no material changes~~use considerable judgement in our estimates of cash flow projections, discount, capitalization and interest rates, fair market lease rates, carrying costs during hypothetical expected lease-up periods and costs to execute similar leases. While our methodology for purchase price allocation did not change during the nine months ended September 30, 2022, the real estate market is fluid and our assumptions are based on information currently available in the market at the time of acquisition. Significant increases or decreases in these key estimates, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being acquired.

Revenue Recognition. We enter into agreements with tenants that convey the right to control the use of identified space at our properties in exchange for rental revenue. These agreements meet the criteria for recognition as leases under Accounting Standards Codification (“ASC”) 842, Leases. We recognize lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. We commence revenue recognition when possession or control of the space is turned over to the ~~items~~tenant.

We evaluate the collectability of our rental payments and recognize revenue on a cash basis when we believe it is no longer probable that we ~~disclosed as our critical accounting policies under Item 7, “Management's Discussion~~will receive substantially all of the remaining lease payments. Management exercises judgment in assessing collectability of tenant receivables and ~~Analysis~~considers payment history, current credit status, publicly available information about the financial condition of ~~Financial Condition~~the tenant and ~~Results~~other factors. Our assessment of ~~Operations”~~the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our ~~Annual Report.~~unaudited condensed consolidated statements of operations.

Impairment of Real Estate. We record impairments of our real estate assets classified as held for use when triggering events dictate that an asset may be impaired. An impairment is recorded when the carrying amount of the asset exceeds the sum of its undiscounted future operating and residual cash flows. The impairment recorded is the difference between estimated fair value of the asset and the carrying amount. We record impairments of our real estate assets classified as held for sale at the lower of the carrying amount or estimated fair value using the estimated or contracted sales price less costs to sell. Any real estate assets recorded at fair value on a non-recurring basis as a result of our impairment analysis are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or terms of definitive sales contracts. Additionally, the analysis includes considerable judgment in our estimates of hold periods, projected cash flows and discount and capitalization rates. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed.

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We will record an impairment charge related to our investments, including investments in non-consolidated entities, if we determine the fair value of the investments are less than their carrying value and such impairment is other-than-temporary. We evaluate whether events or changes in circumstances indicate that the carrying amount of our investments may not be recoverable. Our evaluation of changes in economic or operating conditions and whether an impairment is other-than-temporary may include developing estimates of fair value, forecasted cash flows or operating income before depreciation and amortization. We estimate undiscounted cash flows and fair value using observable and unobservable data such as operating income, hold periods, estimated capitalization and discount rates, or relevant market multiples, leasing prospects and local market information and whether certain impairments are other-than-temporary.

Liquidity and Capital Resources

Cash Flows. We believe that cash flows from operations will continue to provide adequate capital to fund our operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with applicable REIT requirements in both the short-term and ~~long-term.~~long-term, however, our cash flow from operations may be negatively affected in the near term if we experience tenant defaults as a result of the effects of the current economic condition. In addition, we anticipate that cash on hand, borrowings under our unsecured revolving credit facility, capital recycling proceeds, issuances of equity, mortgage proceeds and other debt, as well as other available alternatives, will provide the necessary capital required by our business.

At September 30, ~~2017~~,2022, our property owner subsidiaries do not have mortgage maturities with balloon payments due until 2031. In addition, certain of our subsidiaries are obligated to fund the construction of our development projects and we had $18.4 million and $6.6 million of property specific mortgage balloon debt due in 2017 and 2018, respectively. The 2017 non-recourse maturities aggregating $18.4 million were in maturity default at September 30, 2017.sometimes guaranty these obligations. We believe weour property owner subsidiaries have sufficient sources of liquidity to meet these obligations ~~we are required to meet~~ through future cash flows from operations, the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($~~140.5~~29.4 million at September 30, ~~2017)~~2022), property sale proceeds, borrowing capacity under our unsecured revolving credit facility ($~~300.4~~470.0 million at September 30, ~~2017)~~2022, subject to covenant compliance), ~~which expires in 2019, but can be extended by us to 2020,~~unsettled forward common share sale contracts, and future cash flows from operations.

The mortgages encumbering the properties in which we have an interest are generally non-recourse to us, such that in situations where we believe it is beneficial to satisfy a mortgage obligation by transferring title of the property to the lender, including through a foreclosure, we may do so.

Cash flows from operations were ~~$172.6~~$154.1 million for the nine months ended September 30, ~~2017~~2022 as compared to ~~$180.6~~$167.4 million for the nine months ended September 30, ~~2016.~~2021. The decrease was primarily related to property sales and a decrease in termination fee income, partially offset by the impact of ~~property sales and vacancies, a decrease in lease termination payments and an increase in payments of legal costs, offset by~~ cash ~~flows~~flow generated from ~~acquired~~acquiring properties. The underlying drivers that impact our working capital, and therefore cash flows from operations, are the timing of collection of rents, including reimbursements from tenants, payment of interest on mortgage debt and payment of operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. ~~Collection~~The collection and timing of tenant rents isare closely monitored by management as part of our cash management program.

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Net cash ~~provided by (used in)~~used in investing activities totaled ~~$(234.6)~~$208.2 million and ~~$29.3~~$344.1 million during the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. Cash used in investing activities related primarily to acquisitions of real estate, ~~and~~ investments in real estate under construction, capital expenditures, lease costs, ~~changes in restricted cash and~~ investments in ~~and advances to~~ non-consolidated ~~entities. Cash provided by investing activities related primarily to proceeds from the sale of properties, collection of loans receivable~~entities and changes in real estate deposits, net. Cash provided by investing activities primarily related to net proceeds received from the disposition of real estate and distributions from non-consolidated entities.

Net cash (used in) provided by ~~(used in)~~ financing activities totaled ~~$115.9~~$(107.5) million and ~~$(185.3)~~$147.7 million during the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. Cash used in financing activities in 2022 was primarily related to the repurchase of common shares, the purchase of a noncontrolling interest and dividend and debt service payments, offset by credit facility borrowings. Cash provided by financing activities in 2021 was primarily related ~~primarily~~ to ~~proceeds~~the issuance of ~~term loans and mortgages and notes payable, borrowings under our~~the 2031 Senior Notes, revolving credit facility borrowings, mortgage proceeds, issuances of common shares and cash contributions from noncontrolling interests, offset by the redemption of the 2023 Senior Notes, dividend and debt service payments.

Common Share Issuances:

At-The-Market Offering Program. We maintain an At-The-Market offering program ("ATM program") under which the Company can issue common shares, including through forward sales contracts.

During the nine months ended September 30, 2021, we sold 1.1 million shares under the ATM Program for net proceeds of $13.6 million. We did not sell shares under the ATM program during the nine months ended September 30, 2022.

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During the nine months ended September 30, 2022, we settled 3.6 million common shares previously sold in 2021 on a forward basis on the maturity date of the contracts and received $38.5 million of net proceeds. During the nine months ended September 30, 2021, we settled 3.9 million common shares previously sold on a forward basis on the maturity date of the contract and received $41.9 million of net proceeds. All forward sales contracts under our ATM program have been settled as of September 30, 2022.

In February 2021, we amended the terms of our ATM offering program, under which we may, from time to time, sell up to $350.0 million common shares over the term of the program. As of September 30, 2022, common shares with an aggregate value of $295.0 million remain available for issuance under the ATM program.

Underwritten Equity Offerings. In May 2021, we entered into forward sales contracts for the sale of 16,000,000 common shares at a public offering price of $12.11 per common share in an underwritten equity offering that have not yet settled. The forward sales contracts mature in December 2022, subject to our right to elect cash or net share settlement. As of September 30, 2022, the forward sales contracts had an aggregate settlement price of $182.1 million, which is subject to adjustment in accordance with the forward sales contracts.

The volatility in the capital markets primarily resulting from the ~~issuance~~effects of the current economic conditions may negatively affect our ability to access the capital markets through our ATM program and other offerings.

Share Repurchase Program. During 2022, our Board of Trustees authorized the repurchase of an additional 10.0 million common ~~shares. Cash used~~shares under the Company's share repurchase program with no expiration date. During the nine months ended September 30, 2022, we repurchased and retired approximately 11.7 million common shares at an average price of $10.84 per share. We did not repurchase any common shares during the nine months ended September 30, 2021. Approximately 7.3 million common shares remained available for repurchase under the current authorization as of September 30, 2022. We have continued to, and in ~~financing activities was primarily attributable~~the future may, repurchase our common shares in the context of our overall capital plan and to ~~dividend and distribution payments, payment of developer liabilities, repayment of debt obligations and repurchases of~~the extent we believe market volatility offers prudent investment opportunities based on our common ~~shares.~~share price versus net asset value per share.

Dividends. Dividends paid to our common and preferred shareholders were ~~$129.0~~$107.9 million and ~~$123.3~~$95.9 million in the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively.

We declared a quarterly dividend of $0.12 per common share during the three months ended September 30, 2022, which is an increase from the $0.1075 per common share quarterly dividend declared during the three months ended September 30, 2021.

UPREIT Structure. As of September 30, ~~2017, 3.2~~2022, 0.7 million units of limited partner interests, or OP units, in our operating partnership, LCIF, were outstanding not including OP units held by us. Assuming all outstanding OP units not held by us were redeemed on such date, the estimated fair value of such OP units was ~~$37.1~~$7.7 million based on our closing price of ~~$10.22~~$9.16 per common share on as of September 30, ~~2017~~2022 and a redemption factor of approximately 1.13 common shares per OP unit.

Financings. The following senior notes were outstanding as of September 30, ~~2017~~:2022:


Issue Date	Face Amount ($000)		Interest Rate		Maturity Date	Issue Price
August 2021	$	400,000	2.375	%	October 2031	99.758	%
August 2020	400,000		2.70	%	September 2030	99.233	%
May 2014	198,932		4.40	%	June 2024	99.883	%
	$	998,932

Issue Date Face Amount ($000) Interest Rate Maturity Date Issue Price
May 2014 $ 250,000
4.40 % June 2024 99.883 %
June 2013 250,000
4.25 % June 2023 99.026 %
$ 500,000

~~The~~Each series of senior notes ~~are~~is unsecured and ~~pay~~requires payment of interest semi-annually in arrears. We may redeem the ~~senior~~ notes at our option at any time prior to maturity in whole or in part by paying the principal amount of the senior notes being redeemed plus a make-whole premium.

During September 2017, our $905.0 million unsecured credit agreement with KeyBank National Association, as agent, was amended to, among other things, increase the overall facility to $1.105 billion. With lender approval, we can increase the size

Table of ~~the amended facility to an aggregate $2.01 billion.~~ Contents

A summary of the ~~significant terms~~maturity dates and interest rates of our unsecured credit agreement, as of September 30, 2022, are as follows:



		Maturity Date	Current Interest Rate
$~~505.0~~600.0 Million Revolving Credit Facility⁽¹⁾		~~August 2019~~July 2026	~~LIBOR~~SOFR + ~~1.00%~~0.85%
$300.0 Million Term Loan⁽²⁾		~~August 2020~~January 2025	~~LIBOR~~Term SOFR + ~~1.10%~~
~~$300.0 Million Term Loan~~⁽³⁾	~~January 2021~~	~~LIBOR + 1.10%~~1.00%

~~(1)~~

Increased from $400.0 million. Maturity date can be extended to August 2020 at our option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At September 30, 2017, the unsecured revolving credit facility had $200 million of borrowings outstanding, $4.6 million of letters of credit, and availability of $300.4

(1) Maturity date of the revolving credit facility can be extended to July 2027 at our option. The interest rate ranges from SOFR plus 0.725% to 1.40%. At September 30, 2022, we had $130.0 million borrowings outstanding and availability of $470.0 million, subject to covenant compliance.


~~(2)~~	Increased from $250.0 million. The interest rate ranges from LIBOR plus 0.90% to 1.75%. We previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on $250.0 million of outstanding LIBOR-based borrowings.


~~(3)~~	Increased from $255.0 million. The interest rate ranges from LIBOR plus 0.90% to 1.75%. We previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on $255.0 million of outstanding LIBOR-based borrowings.

(2) The Term SOFR portion of the interest rate was swapped to obtain a current fixed rate of 2.722%.

As of September 30, ~~2017~~,2022, we were ~~in compliance~~compliant with all applicable financial covenants contained in our ~~corporate level~~corporate-level debt agreements.

Contractual Obligations

As of September 30, 2022, we had six ongoing consolidated development projects and expect to incur approximately $56.4 million and $113.3 million of costs in the remainder of 2022 and 2023, respectively, excluding noncontrolling interests' share, to substantially complete the construction of such projects and estimated tenant improvement and leasing costs. As of September 30, 2022, we had interests in various land parcels held for development. We are unable to estimate the timing of any required funding for potential development projects on these parcels.

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Results of Operations

Three months ended September 30, ~~2017~~2022 compared with three months ended September 30, ~~2016~~2021. The increase in net income attributable to common shareholders of ~~$30.9~~$16.7 million was primarily due to the items discussed below.

The decrease in total gross revenues of $3.3 million was primarily due to property sales, including the recapitalization of our special purpose industrial portfolio now owned by MFG Cold JV, which was partially offset by revenue from recently acquired properties and an increase in advisory fees during the three months ended September 30, ~~2017~~2022.

The increase in property operating expense of ~~$8.3~~$2.6 million was primarily due to an increase in operating expense responsibilities at certain properties.

The increase in general and administrative expenses of $0.7 million was primarily due to an increase in costs related to shareholder activism and trustee fees.

The decrease in interest and amortization expense of $1.0 million related primarily to a $1.4 million increase in capitalized interest related to increased development. The decrease was partially offset by increased interest rates on our variable-rate unsecured debt during the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

The decrease in debt satisfaction losses, net of $13.1 million was primarily related to the redemption of the 2023 Senior Notes in the third quarter of 2021.

The decrease in impairment charges of $1.4 million was related to the timing of impairment charges recognized on certain properties. The impairments in each period were primarily due to a potential sale, vacancy and lack of leasing prospects.

The increase in gains on sales of properties of $8.7 million was related to the timing of property dispositions.

The decrease in equity in earnings (losses) of non-consolidated entities of $1.3 million was primarily due to property sales and recognizing our share of impairment charges related to NNN JV in 2022 that resulted in a decrease in equity in earnings of $0.7 million. Additionally, we incurred $0.6 million of net losses from MFG Cold JV, which was formed subsequent to September 30, 2021.

Nine months ended September 30, 2022 compared with nine months ended September 30, 2021. The decrease in net income attributable to common shareholders of $45.0 million was primarily due to the items discussed below.

The decrease in total gross revenues of $17.4 million was primarily due to a decrease in rental revenue. Rental revenue decreased $8.9 million primarily due to a $17.9 million decrease in revenue from properties disposed of, primarily the New York City land investments, a $1.7 million decrease in termination income ~~and a $1.2~~of $13.9 million recognized during the nine months ended September 30, 2021. In addition, property sales, including the recapitalization of our special purpose industrial portfolio now owned by MFG Cold JV, contributed to the decrease, ~~in revenue from certain held properties due to changes in occupancy,~~which was partially offset by ~~2017~~revenue from recently acquired properties and ~~2016 property acquisitions rental revenue of $11.5 million.~~an increase in advisory fees.

The increase in depreciation and amortization expense of ~~$3.2~~$4.1 million was primarily due to ~~acquisitions~~acquisition activity.

The increase in property operating expense of $8.3 million was primarily due to an increase in operating expense responsibilities at certain properties.

The increase in general and administrative ~~expense~~expenses of ~~$0.5~~$4.4 million was primarily due to an increase of $2.6 million in ~~professional fees.~~

~~The $2.05 million litigation reserve recognized as of September 30, 2017, represents the probable settlement amount~~costs incurred related to the ~~litigation disclosed~~Board of Trustees' strategic alternatives review and costs related to shareholder activism. The remaining $1.8 million increase is primarily due to an increase in ~~note 13 to our consolidated financial statements.~~payroll expense, trustee fees, legal and other consulting costs.

The decrease in non-operating income of ~~$2.1~~$0.6 million was primarily due to ~~the collection~~funds received for land easements at two of ~~loans receivable.~~our properties in 2021 with no comparable income in 2022.

The decrease in interest and amortization expense of ~~$4.1~~$2.4 million related primarily to the satisfaction of ~~mortgage~~secured debt in ~~connection with property sales~~2021 and a $2.8 million increase in capitalized interest mostly related to increased development. The decrease was partially offset by an increase in ~~the~~ interest ~~rate~~expense related to increased unsecured debt outstanding and increased interest rates on our ~~$129.1 million of trust preferred securities.~~variable-rate unsecured debt during the nine months ended September 30, 2022 compared to the September 30, 2021.

The decrease in ~~impairment charges~~debt satisfaction losses, net of ~~$50.9~~$13.1 million was primarily related to the ~~timing~~redemption of ~~impairment charges recognized on properties primarily due to sales, vacancies and lack of leasing prospects. In 2016, a $65.5 million impairment charge was recognized on~~ the ~~sale of three of our New York, New York land investments.~~2023 Senior Notes during the nine months ended September 30, 2021.

The decrease in gains on sales of properties of ~~$5.4~~$51.8 million was related to the timing of ~~sales~~property dispositions.

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~~The change in net (income) loss attributable to noncontrolling interests of $2.3 million related primarily to a decrease in the net loss of LCIF in 2017 compared to 2016.~~

Any increase in net income in future periods will be closely tied to the level of acquisitions and dispositions and leasing activity. Without acquisitions and favorable leasing activity, the sources of growth in net income are limited to index-adjusted rents (such as the consumer price index), reduced interest expense on amortizing mortgages and debt refinancings and by controlling other variable overhead costs and, periodically, gains on sales of properties. However, there are many factors beyond management's control that could offset these items including, without limitation, increased interest rates, decreased occupancy rates, tenant monetary defaults, delayed acquisitions and the other risks described in our periodic reports filed with the SEC.

~~Ninemonths endedSeptember 30, 2017 compared with nine months ended September 30, 2016.The decrease in net income attributable to common shareholders of $24.9 million was primarily due to the items discussed below.~~

The decrease in total gross revenues during the nine months ended September 30, 2017 of $44.7 million was primarily attributable to a decrease in rental revenue. Rental revenue decreased $44.9 million primarily due to a $57.8 million decrease in revenue from properties disposed of, primarily the New York City land investments, a $12.5 million decrease in termination income and a $3.8 million decrease in revenue from certain held properties due to changes in occupancy, partially offset by 2017 and 2016 property acquisitions rental revenue of $28.4 million.

The increase in ~~depreciation and amortization expense~~selling profit from sales-type lease of ~~$4.0~~$9.3 million ~~was primarily~~is due to ~~acquisitions of certain properties.~~a tenant exercising its purchase option resulting in a change in lease classification from an operating lease to a sales-type lease in 2022 with no comparable transaction in 2021.

The increase in property operating expense of $1.9 million was primarily due to costs incurred on properties acquired in 2017 and 2016, costs incurred on vacant properties prior to sale and an increase in acquisition costs, offset in part by reduced operating costs associated with sold properties.

~~The increase in general and administrative expenses of $2.5 million related primarily to an increase in professional fees, primarily legal fees.~~

The $2.05 million litigation reserve recognized as of September 30, 2017, represents the probable settlement amount related to the litigation disclosed in note 13 to our consolidated financial statements.

~~The decrease in non-operating income of $4.5 million was due to the collection of loans receivable.~~

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The decrease in interest and amortization expense of $10.7 million related primarily to the satisfaction of mortgage debt in connection with property sales and a decrease in the interest rate on our $129.1 million of trust preferred securities.

~~The change in debt satisfaction gains (charges), net of $3.2 million was primarily due to the timing of debt satisfactions.~~

The decrease in impairment charges and loan loss of $32.3 million related primarily to the timing of impairment charges recognized on properties due to sales, vacancies and lack of leasing prospects and a $5.3 million loan loss recognized on the sale of our Kennewick, Washington loan receivable in 2017. In 2016, a $65.5 million impairment charge was recognized on the sale of three of our New York, New York land investments.

~~The decrease in gains on sales of properties of $3.3 million related to the timing of sales of properties.~~

~~The change~~ in equity in earnings (losses) of non-consolidated entities of ~~$7.5~~$15.8 million was primarily due to recognizing our share of gains on sale of three properties from NNN JV in 2022 in the amount of $22.9 million with no property sales at our non-consolidated entities in 2021. The increase was primarily offset by recognizing our share of impairment charges and losses on debt satisfaction related to NNN JV in 2022 in the amount of $4.8 million and $1.5 million, respectively.

The decrease in net income attributable to noncontrolling interests of $1.2 million was primarily attributable to a decrease in third-party OP unitholders and the timing of gains recognized on ~~the sale~~sales of ~~non-consolidated investments, partially offset~~properties by ~~an impairment charge recognized in 2017 on our investment in Palm Beach Gardens, Florida where the sole tenant filed for bankruptcy.~~

~~The change in net (income) loss attributable to noncontrolling interests of $0.6 million related primarily to a decrease in the net loss of LCIF in 2017 compared to 2016.~~LCIF.

Same-Store Results

Same-store net operating income, or NOI, which is a non-GAAP measure, represents the NOI for consolidated properties that were owned, stabilized and included in our portfolio for two comparable reporting ~~periods, excluding properties encumbered by mortgage loans in default and the revenue associated with the expansion of properties, as applicable.~~periods. We define NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination ~~income)~~income, net), ~~tenant reimbursements~~ and other property income) less property operating expenses. As same-store NOI excludes the change in NOI from acquired and disposed of ~~properties and certain other~~ properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating same-store NOI, and accordingly same-store NOI may not be comparable to other REITs. Management believes that same-store NOI is a useful supplemental measure of ~~the Company's~~our operating performance. However, same-store NOI should not be viewed as an alternative measure of ~~the Company's~~our financial performance since it does not reflect the operations of ~~the Company's~~our entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of ~~the Company's~~our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact ~~the Company's~~our results from operations. ~~Lexington believes~~We believe that net income is the most directly comparable GAAP measure to same-store NOI.

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The following presents our consolidated same-store NOI, for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 ($000's):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total cash base rent	$	55,508	$	52,858	$	158,298	$	152,005
Tenant reimbursements	10,063		8,283		27,291		24,736
Property operating expenses	(11,646)		(9,317)		(32,135)		(28,060)
Same-store NOI	$	53,925	$	51,824	$	153,454	$	148,681

2017 2016
Total cash base rent $ 218,871
$ 218,710
Tenant reimbursements 18,788
19,807
Property operating expenses (28,461 ) (28,388 )
Same-store NOI $ 209,198
$ 210,129

Our reported same-store NOI ~~decreased from 2016~~increased for the three and nine months of 2021 compared to ~~2017~~the three and nine months of 2022 by ~~0.4%. The decrease in same-store NOI between periods~~4.1% and 3.2%, respectively, primarily ~~related~~due to an increase in ~~vacancy in certain~~cash base rents. As of September 30, 2022 and 2021, our ~~office properties. Our~~ historical same-store square footage leased was ~~97.2% at September 30, 2017~~99.5% and ~~98.9% at September 30, 2016.~~99.9%, respectively.

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Below is a reconciliation of net income to same-store NOI for periods presented ($000's):


	Nine Months ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2017			2016				2022		2021		2022		2021
Net income	$	55,181		$	79,521		Net income	$	23,591	$	7,058	$	76,037	$	122,320

Interest and amortization expense	57,828			68,573			Interest and amortization expense	11,255		12,210		32,758		35,170
Provision for income taxes	1,174			1,099			Provision for income taxes	271		270		951		986
Depreciation and amortization	128,706			124,687			Depreciation and amortization	44,946		45,359		134,645		130,579
General and administrative	25,561			23,032			General and administrative	9,060		8,363		29,093		24,695
Litigation reserve	2,050			—
Transaction costs	1,100			329			Transaction costs	1		64		56		205
Non-operating income	(4,997		)	(9,500		)
Non-operating/advisory fee income							Non-operating/advisory fee income	(1,630)		(1,265)		(4,616)		(3,239)
Gains on sales of properties	(55,078		)	(58,413		)	Gains on sales of properties	(24,841)		(16,122)		(52,951)		(104,767)
Impairment charges and loan loss	43,577			75,904
Debt satisfaction (gains) charges, net	(2,378		)	818
Impairment charges							Impairment charges	628		2,048		2,457		2,048
Debt satisfaction (gains) losses, net							Debt satisfaction (gains) losses, net	119		13,222		119		13,222
Selling profit from sales-type lease							Selling profit from sales-type lease	—		—		(9,314)		—
Equity in (earnings) losses of non-consolidated entities	1,064			(6,394		)	Equity in (earnings) losses of non-consolidated entities	1,340		75		(15,580)		249
Lease termination income	(2,934		)	(15,390		)
Lease termination income, net							Lease termination income, net	(238)		(1,960)		(238)		(13,787)
Straight-line adjustments	(12,552		)	(35,697		)	Straight-line adjustments	(2,078)		(3,196)		(8,893)		(8,146)
Lease incentives	1,456			1,256			Lease incentives	128		192		391		605
Amortization of above/below market leases	1,180			1,527			Amortization of above/below market leases	(455)		(314)		(1,416)		(1,211)
Sales-type lease interest income							Sales-type lease interest income	13		—		—		—
NOI	240,938			251,352			NOI	62,110		66,004		183,499		198,929

Less NOI:							Less NOI:
Disposed of properties	(2,455		)	(36,441		)
Acquired properties	(27,047		)	(2,556		)
Properties in default	(2,238		)	(2,226		)
Acquisitions, development and dispositions							Acquisitions, development and dispositions	(8,185)		(14,180)		(30,045)		(50,248)

Same-Store NOI	$	209,198		$	210,129		Same-Store NOI	$	53,925	$	51,824	$	153,454	$	148,681

~~Table of Contents~~

Funds From Operations

We believe 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. We believe 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~~(calculated in accordance with ~~GAAP,~~GAAP), excluding ~~gains (or losses) from sales of property, plus real estate~~ depreciation and amortization related to real estate, gains and ~~after adjustments for non-consolidated partnerships~~losses from the sales of certain real estate assets, gains and ~~joint ventures.” NAREIT clarified its computation~~losses from change in control and impairment write-downs of ~~FFO~~certain real estate assets and investments in entities when the impairment is directly attributable to ~~exclude impairment charges on~~decreases in the value of depreciable real estate ~~owned directly or indirectly.~~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.

Table of Contents

We present FFO available to common shareholders and unitholders - basic and also present 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 our common shares, are converted at the beginning of the period. We also present 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 our real estate portfolio. We believe 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 our operating performance or as an alternative to cash flow as a measure of liquidity.

4434

Table of Contents

The following presents a reconciliation of net income ~~(loss)~~ attributable to common shareholders to FFO available to common shareholders and unitholders and Adjusted Company FFO available to all equityholders and unitholders for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 (unaudited and dollars in thousands, except share and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders	$	21,776	$	5,028	$	70,441	$	115,470
Adjustments:
Depreciation and amortization	44,227		44,652		132,600		128,442
Impairment charges - real estate, including our share of non-consolidated entities	1,256		2,048		7,299		2,048
Noncontrolling interests - OP units	11		240		147		1,391
Amortization of leasing commissions	719		707		2,045		2,137
Joint venture and noncontrolling interest adjustment	2,612		2,115		8,585		6,344
Gains on sales of properties, including our share of non-consolidated entities, net of tax	(24,842)		(16,122)		(75,803)		(104,767)
FFO available to common shareholders and unitholders - basic	45,759		38,668		145,314		151,065
Preferred dividends	1,573		1,573		4,718		4,718
Amount allocated to participating securities	41		37		151		170
FFO available to all equityholders and unitholders - diluted	47,373		40,278		150,183		155,953

Selling profit from sales-type lease(1)	—		—		(9,314)		—
Non-recurring costs(2)	640		64		2,629		205
Debt satisfaction losses, net, including our share of non-consolidated entities	119		13,222		1,614		13,222
Adjusted Company FFO available to all equityholders and unitholders - diluted	$	48,132	$	53,564	$	145,112	$	169,380

Three Months ended September 30, Nine Months ended September 30,
2017 2016 2017 2016
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income (loss) attributable to common shareholders $ 3,916
$ (26,975 ) $ 49,832
$ 74,718
Adjustments:

Depreciation and amortization 42,015
38,642
124,633
119,523
Impairment charges - real estate, including non-consolidated entities 21,986
72,890
41,795
75,904
Noncontrolling interests - OP units (173 ) (2,507 ) (192 ) (845 )
Amortization of leasing commissions 1,480
1,646
4,073
5,164
Joint venture and noncontrolling interest adjustment 259
284
864
742
Gains on sales of properties, including non-consolidated entities (10,645 ) (16,072 ) (56,530 ) (63,791 )
Tax on sales of properties —
—
—
50
FFO available to common shareholders and unitholders - basic 58,838
67,908
164,475
211,465
Preferred dividends 1,573
1,573
4,718
4,718
Interest and amortization on 6.00% Convertible Guaranteed Notes —
47
—
532
Amount allocated to participating securities 52
50
183
187
FFO available to all equityholders and unitholders - diluted 60,463
69,578
169,376
216,902
Litigation reserve 2,050
—
2,050
—
Debt satisfaction (gains) charges, net (2,424 ) (2,538 ) (2,378 ) 818
Loan loss —
—
5,294
—
Transaction costs 612
115
1,100
329
Adjusted Company FFO available to all equityholders and unitholders - diluted $ 60,701
$ 67,155
$ 175,442
$ 218,049


Per Common Share and Unit Amounts
Basic:
FFO	$	0.16	$	0.14	$	0.51	$	0.54


Diluted:
FFO	$	0.17	$	0.14	$	0.52	$	0.55
Adjusted Company FFO	$	0.17	$	0.19	$	0.50	$	0.59

Per Common Share and Unit Amounts
Basic:
FFO $ 0.24
$ 0.29
$ 0.68
$ 0.89

Diluted:
FFO $ 0.24
$ 0.29
$ 0.69
$ 0.89
Adjusted Company FFO $ 0.25
$ 0.28
$ 0.71
$ 0.89


		Three Months ended September 30,		Nine Months ended September 30,
		2017	2016	2017	2016
Weighted-Average Common Shares:	Weighted-Average Common Shares:					Weighted-Average Common Shares:
Basic:	Basic:					Basic:
Weighted-average common shares outstanding - basic EPS	Weighted-average common shares outstanding - basic EPS	237,989,098	234,207,396	237,632,572	233,151,600	Weighted-average common shares outstanding - basic EPS	277,535,717	278,124,204	281,559,058	276,379,718
Operating partnership units⁽¹⁾		3,646,869	3,815,386	3,713,867	3,818,117
Operating partnership units(3)						Operating partnership units(3)	846,858	1,161,757	859,226	2,263,105
Weighted-average common shares outstanding - basic FFO	Weighted-average common shares outstanding - basic FFO	241,635,967	238,022,782	241,346,439	236,969,717	Weighted-average common shares outstanding - basic FFO	278,382,575	279,285,961	282,418,284	278,642,823

Diluted:	Diluted:					Diluted:
Weighted-average common shares outstanding - diluted EPS	Weighted-average common shares outstanding - diluted EPS	241,702,715	234,207,396	241,442,227	237,215,883	Weighted-average common shares outstanding - diluted EPS	278,521,946	282,048,458	284,609,950	278,581,849
Operating partnership units⁽¹⁾		—	3,815,386	—	—
6.00% Convertible Guaranteed Notes		—	508,912	—	1,439,456
Operating partnership units(3)						Operating partnership units(3)	—	1,161,757	—	2,263,105
Unvested share-based payment awards	Unvested share-based payment awards	655,228	570,260	650,348	478,329	Unvested share-based payment awards	—	53,320	23,175	35,645
Share options		—	238,395	—	—
Preferred shares - Series C	Preferred shares - Series C	4,710,570	4,710,570	4,710,570	4,710,570	Preferred shares - Series C	4,710,570	4,710,570	4,710,570	4,710,570
Weighted-average common shares outstanding - diluted FFO	Weighted-average common shares outstanding - diluted FFO	247,068,513	244,050,919	246,803,145	243,844,238	Weighted-average common shares outstanding - diluted FFO	283,232,516	287,974,105	289,343,695	285,591,169

entities with respect to $608.7 million of such non-recourse debt. We believe the likelihood of making any payments under such guaranties is remote and we generally have an agreement from each partner to reimburse us for its proportionate share of any liability related to a guarantee trigger unless such trigger is caused solely by us.

~~Lepercq Corporate Income Fund L.P.:~~


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock	LXP	New York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share	LXPPRC	New York Stock Exchange



x☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



o☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



~~Lexington Realty Trust~~	~~Yes~~ x No ¨
~~Lepercq Corporate Income Fund L.P.~~	~~Yes~~ x No ¨



	September 30, 2017			December 31, 2016
Assets:
Real estate, at cost	$	3,837,705		$	3,533,172
Real estate - intangible assets	595,904			597,294
Investments in real estate under construction	—			106,652
	4,433,609			4,237,118
Less: accumulated depreciation and amortization	1,200,814			1,208,792
Real estate, net	3,232,795			3,028,326
Assets held for sale	8,638			23,808
Cash and cash equivalents	140,545			86,637
Restricted cash	34,946			31,142
Investment in and advances to non-consolidated entities	60,683			67,125
Deferred expenses, net	32,426			33,360
Loans receivable, net	—			94,210
Rent receivable – current	6,388			7,516
Rent receivable – deferred	46,611			31,455
Other assets	32,124			37,888
Total assets	$	3,595,156		$	3,441,467

Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	670,345		$	738,047
Revolving credit facility borrowings	200,000			—
Term loans payable, net	596,369			501,093
Senior notes payable, net	494,989			494,362
Trust preferred securities, net	127,171			127,096
Dividends payable	48,494			47,264
Liabilities held for sale	442			191
Accounts payable and other liabilities	36,728			59,601
Accrued interest payable	11,683			6,704
Deferred revenue - including below market leases, net	34,069			39,895
Prepaid rent	15,371			14,723
Total liabilities	2,235,661			2,028,976

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 outstanding	94,016			94,016
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 240,643,775 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively	24			24
Additional paid-in-capital	2,824,379			2,800,736
Accumulated distributions in excess of net income	(1,576,459		)	(1,500,966		)
Accumulated other comprehensive income (loss)	510			(1,033		)
Total shareholders’ equity	1,342,470			1,392,777
Noncontrolling interests	17,025			19,714
Total equity	1,359,495			1,412,491
Total liabilities and equity	$	3,595,156		$	3,441,467



Nine Months ended September 30, 2017				Lexington Realty Trust Shareholders
	Total			Preferred Shares		Common Shares		Additional Paid-in-Capital		Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
Balance December 31, 2016	$	1,412,491		$	94,016	$	24	$	2,800,736	$	(1,500,966	)	$	(1,033	)	$	19,714
Redemption of noncontrolling OP units for common shares	—			—		—		574		—			—			(574		)
Issuance of common shares and deferred compensation amortization, net	23,069			—		—		23,069		—			—			—
Dividends/distributions	(132,789		)	—		—		—		(130,226		)	—			(2,563		)
Net income	55,181			—		—		—		54,733			—			448
Other comprehensive income	1,543			—		—		—		—			1,543			—
Balance September 30, 2017	$	1,359,495		$	94,016	$	24	$	2,824,379	$	(1,576,459	)	$	510		$	17,025



Nine Months ended September 30, 2016				Lexington Realty Trust Shareholders
	Total			Preferred Shares		Common Shares		Additional Paid-in-Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
Balance December 31, 2015	$	1,462,531		$	94,016	$	23	$	2,776,837		$	(1,428,908	)	$	(1,939	)	$	22,502
Issuance of common shares upon conversion of convertible notes	12,027			—		—		12,027			—			—			—
Repurchase of common shares	(8,973		)	—		—		(8,973		)	—			—			—
Redemption of noncontrolling OP units for common shares	—			—		—		31			—			—			(31		)
Issuance of common shares and deferred compensation amortization, net	9,045			—		1		9,044			—			—			—
Dividends/distributions	(128,319		)	—		—		—			(125,791		)	—			(2,528		)
Net income (loss)	79,521			—		—		—			79,623			—			(102		)
Other comprehensive loss	(2,944		)	—		—		—			—			(2,944		)	—
Balance September 30, 2016	$	1,422,888		$	94,016	$	24	$	2,788,966		$	(1,475,076	)	$	(4,883	)	$	19,841



Three Months ended September 30, 2016
	As Originally Reported			Correction			As Adjusted
Total gross revenues	$	106,331		$	(350	)	$	105,981
Net loss	$	(27,262	)	$	(350	)	$	(27,612	)
Net loss attributable to common shareholders	$	(26,653	)	$	(322	)	$	(26,975	)
Net loss attributable to common shareholders - basic per share	$	(0.11	)	$	(0.01	)	$	(0.12	)
Net loss attributable to common shareholders - diluted per share	$	(0.11	)	$	(0.01	)	$	(0.12	)


~~(3)~~	~~Investments in Real Estate and Real Estate Under Construction~~



Property Type	Location	Acquisition Date	Initial Cost Basis		Lease Expiration	Land and Land Estate		Building and Improvements		Lease in-place Value Intangible		Below Market Lease Intangible
Office	Lake Jackson, TX⁽¹⁾	January 2017	$	70,401	10/2036	$	3,078	$	67,323	$	—	$	—
Industrial	New Century, KS	February 2017	12,056		01/2027	—		13,198		1,648		(2,790		)
Industrial	Lebanon, IN	February 2017	36,194		01/2024	2,100		29,443		4,651		—
Office	Charlotte, NC	April 2017	61,339		04/2032	3,771		47,064		10,504		—
Industrial	Cleveland, TN	May 2017	34,400		03/2024	1,871		29,743		2,786		—
Industrial	Grand Prairie, TX	June 2017	24,317		03/2037	3,166		17,985		3,166		—
Industrial	San Antonio, TX	June 2017	45,507		04/2027	1,311		36,644		7,552		—
Industrial	Opelika, AL	July 2017	37,269		05/2042	134		33,183		3,952		—
Industrial	McDonough, GA	August 2017	66,700		01/2028	5,441		52,762		8,497		—
Industrial	Byhalia, MS	September 2017	36,590		09/2027	1,751		31,236		3,603		—
Industrial	Jackson, TN	September 2017	57,920		10/2027	1,454		49,026		7,440		—
Industrial	Smyrna, TN	September 2017	104,890		04/2027	1,793		93,940		9,157		—
			$	587,583		$	25,870	$	501,547	$	62,956	$	(2,790	)



Location	Square Feet (000's)	Property Type	Maximum Acquisition Cost		Estimated Acquisition Date	Approximate Lease Term (Yrs)
Warren, MI⁽¹⁾	260	Industrial	$	47,000	4Q 17	15
Romulus, MI	500	Industrial	39,330		4Q 17	15
Lafayette, IN	309	Industrial	17,450		4Q 17	7
	1,069		$	103,780


~~(5)~~	~~Loans Receivable~~



	Loan carrying-value⁽¹⁾
Loan		12/31/2016		Interest Rate		Maturity Date
Kennewick, WA⁽²⁾		$	85,709	9.00	%	05/2022
Oklahoma City, OK⁽³⁾		8,501		11.50	%	03/2016
		$	94,210


~~(1)~~	~~Loan carrying value includes accrued interest and is net of origination costs, if any.~~


~~(2)~~	Loan provided for a current pay rate of 8.75%, an accrual rate of 9.0% and a balloon of $87,245 at maturity. During the nine months ended September 30, 2017, the loan was assigned to a third party for 94% of its principal balance. The Company recognized a $5,294 loan loss on the transaction.



	As of September 30, 2017				As of December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Loans Receivable	$	—	$	—	$	94,210	$	94,911

Liabilities
Debt	$	2,088,874	$	2,058,863	$	1,860,598	$	1,814,824


~~(7)~~	~~Investment in and Advances to Non-Consolidated Entities~~


~~(4)~~	~~The aggregate unamortized debt issuance costs for the term loans were $3,631 and $3,907 as of September 30, 2017 and December 31, 2016, respectively.~~



Derivatives in Cash Flow	Amount of Income (Loss) Recognized in OCI on Derivatives (Effective Portion) September 30,					Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) September 30,
Hedging Relationships	2017		2016				2017		2016
Interest Rate Swaps	$	581	$	(6,035	)	Interest expense	$	962	$	3,091



Nine Months ended September 30, 2017	Units		Partners' Capital
Balance December 31, 2016	83,241,396		$	387,623
Changes in co-borrower debt allocation	—		180,565
Redemption of OP units	(2,675,785	)	(129,990		)
Distributions	—		(48,573		)
Net loss	—		(4,900		)
Balance September 30, 2017	80,565,611		$	384,725

Nine Months ended September 30, 2016
Balance December 31, 2015	83,241,396		$	461,657
Changes in co-borrower debt allocation	—		(17,179		)
Distributions	—		(49,900		)
Net loss	—		(20,798		)
Balance September 30, 2016	83,241,396		$	373,780



	As of September 30, 2017				As of December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Liabilities
Debt	$	334,329	$	333,181	$	315,616	$	314,509



	September 30, 2017			December 31, 2016
Mortgages and notes payable	$	169,173		$	169,958
Unamortized debt issuance costs	(683		)	(746		)
	$	168,490		$	169,212



	2017		2016
Preferred Freezer Services of Richland, LLC	17.9	%	N/A
SM Ascott LLC⁽¹⁾	N/A		13.1	%
Tribeca Ascott LLC⁽¹⁾	N/A		11.2	%
AL-Stone Ground Tenant LLC⁽¹⁾	N/A		10.2	%



Per Common Share and Unit Amounts
Basic:
FFO	$	0.24	$	0.29	$	0.68	$	0.89

Diluted:
FFO	$	0.24	$	0.29	$	0.69	$	0.89
Adjusted Company FFO	$	0.25	$	0.28	$	0.71	$	0.89


~~ITEM 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~


Period	(a) Total Number of Shares/Units Purchased	(b) Average Price Paid for Share/Unit		(c) Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs (1)
July 1 - 31, 2022	1,800,000	$	10.65	1,800,000	1,078,289
August 1 - 31, 2022	615,641	$	10.59	615,641	10,462,648
September 1 - 30, 2022(2)	3,188,407	$	9.80	3,188,407	7,274,241
Third quarter 2022	5,604,048	$	10.16	5,604,048	7,274,241


~~(1)~~	~~Share repurchase authorization announced on July 2, 2015, which has no expiration date.~~


~~ITEM 3.~~	~~Defaults Upon Senior Securities - not applicable.~~



Exhibit No.				Description

3.1			—	Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December 31, 2006 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 8, 2007 (the “01/08/07 8-K”))(1)
3.2			—	Articles Supplementary Relating to the Reclassification of 8.05% Series B Cumulative Redeemable Preferred Stock, par value $0.0001 per share, and 7.55% Series D Cumulative Redeemable Preferred Stock, par value $0.0001 per share (filed as Exhibit 3.4 to the Company's Current Report on Form 8-K filed November 21, 2013)(1)
3.3			—	Articles of Amendment to the Amended and Restated Declaration of Trust, dated as of December 14, 2021 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 16, 2021)(1)
3.4			—	Articles of Amendment to the Amended and Restated Declaration of Trust, dated as of May 26, 2022 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 27, 2022)(1)
3.5			—	Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1)
~~3.4~~3.6			—	~~First Amendment to~~ Second Amended and Restated By-laws of the Company ~~(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009)(1)~~ (2)
~~3.5~~3.7			__—	~~Second Amendment to Amended and Restated By-Laws of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 3, 2017) (1)~~
~~3.6~~	—	Agreement and Plan of Merger dated as of December 23, 2013, by and among Lepercq Corporate Income Fund L.P. (“LCIF”) and Lepercq Corporate Income Fund II L.P. (“LCIF II”) (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 24, 2013)(1)
~~3.7~~	—	Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013 (filed as Exhibit 3.25 to the Company's Annual Report on Form 10-K filed February 26, 2014)(1)
3.8			—	First Amendment to Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of July 12, 2021 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed July 16, 2021)(1)
4.1			—	Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2006)~~2021)(1)
4.2			—	Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the Company's Registration Statement on Form 8A filed December 8, 2004)(1)
4.3			—	Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1)
4.4			—	Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 27, 2007 (the “03/27/2007 8-K”))(1)
4.5			—	Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1)
4.6			—	Fourth Supplemental Indenture, dated as of December 31, 2008, among the Company, the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 2, 2009)(1)
4.7			—	Fifth Supplemental Indenture, dated as of June 9, 2009, among the Company (as successor to the MLP), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 15, 2009)(1)
4.8			—	Sixth Supplemental Indenture, dated as of January 26, 2010 among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1)
4.9			—	Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 3, 2012)(1)


4.10	—	Eighth Supplemental Indenture, dated as of February 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 13, 2013 (the “02/13/13 8-K”))(1)
4.11	—	Ninth Supplemental Indenture, dated as of May 6, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 8, 2013)(1)
4.12	—	Tenth Supplemental Indenture, dated as of June 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K filed on June 13, 2013 ~~(“06/~~(the “06/13/13 8-K”))(1)
4.13	—	Tenth Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 3, 2013 (the “10/03/2013 8-K”))(1)



4.14			—	Indenture, dated as of June 10, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the 06/13/2013 8-K))(1)
4.15			—	First Supplemental Indenture, dated as of September 30, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to the 10/03/2013 8-K)(1)
4.16			—	Indenture dated as of May 9, 2014, among the Company, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014)(1)
4.17			—	First Supplemental Indenture, dated as of May 20, 2014, among the Company, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 20, 2014)(1)
~~10.1~~4.18			—	~~First Amendment to Credit Agreement and Agreement Regarding Revolving Loan Commitment and Term Loan Increases,~~Second Supplemental Indenture, dated as of ~~September 29, 2017,~~August 28, 2020, among the Company and ~~LCIF, as borrowers, KeyBank~~U.S. Bank National Association, as ~~agent, and each of the lenders signatory thereto~~trustee (filed as Exhibit ~~10.1~~4.1 to the Company's Current Report on Form 8-K filed ~~October 2, 2017)~~August 28, 2020)(1)
4.19			—	Third Supplemental Indenture, dated as of August 30, 2021, among the Company and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed August 30, 2021)(1)
10.1			—	Second Amended and Restated Credit Agreement, dated as of July 5, 2022, among the Company, as borrower, each of the financial institutions initially a signatory thereto together with their assignees pursuant to Section 12.5 therein, and KeyBank National Association, as agent(filed as Exhibit 10.1 to the Company 's Current Report on Form 8-K filed on July 11, 2022 )(1)
31.1			—	Certification pursuant to ~~rule~~Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)
31.2			—	Certification pursuant to ~~rule~~Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)
~~31.3~~32.1			—	~~Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)~~
~~31.4~~	—	~~Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)~~
~~32.1~~	—	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3)
32.2			—	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3)
~~32.3~~ 101.INS			—	~~Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3)~~
~~32.4~~	—	~~Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3)~~
~~101.INS~~	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (2, 5)
101.SCH			—	Inline XBRL Taxonomy Extension Schema (2, 5)
101.CAL			—	Inline XBRL Taxonomy Extension Calculation Linkbase (2, 5)
101.DEF			—	Inline XBRL Taxonomy Extension Definition Linkbase Document (2, 5)
101.LAB			—	Inline XBRL Taxonomy Extension Label Linkbase Document (2, 5)
101.PRE			—	Inline XBRL Taxonomy Extension Presentation Linkbase Document (2, 5)


~~(4)~~	~~Management contract or compensatory plan or arrangement.~~