(UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from _________________ to ________________
Commission File Number 1-12386
LEXINGTON CORPORATE PROPERTIES TRUST
------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 13-3717318
------------------------------ ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
355 Lexington Avenue
New York, NY 10017
------------------------------ -----------
(Address of principal executive offices) (Zip code)
(212) 692-7260
-----------------------------------------
(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 x . No .
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Act)
Yes x . No .
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common shares, as of the latest practicable date: 35,129,874 common shares,
par value $.0001 per share on August 12, 2003.
PART 1. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2003 (Unaudited) and December 31, 2002
(in thousands, except share and per share data)
June 30, December 31,
2003 2002
----------- ---------
ASSETS:
Real estate, at cost $ 972,014 $ 913,370
Less: accumulated depreciation and amortization 148,659 134,220
----------- ---------
823,355 779,150
Cash and cash equivalents 71,564 12,097
Investment in non-consolidated entities 56,645 54,261
Deferred expenses, net 7,305 8,168
Rent receivable - current -- 3,535
Rent receivable - deferred 22,518 20,115
Other assets, net 19,711 25,145
----------- ---------
$ 1,001,098 $ 902,471
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Mortgages and notes payable $ 444,897 $ 460,517
Credit facility borrowings -- 31,000
Origination fees payable, including accrued interest 6,522 6,565
Accounts payable and other liabilities 8,959 10,758
Prepaid rent 3,356 --
----------- ---------
463,734 508,840
Minority interest 54,240 56,846
----------- ---------
517,974 565,686
----------- ---------
Commitments and contingencies (note 10)
Common shares, par value $0.0001 per share, 287,888 shares issued
and outstanding, liquidation preference $3,886 3,809 3,809
----------- ---------
Shareholders' equity:
Preferred shares, par value $0.0001 per share; authorized 10,000,000 shares,
Class B Cumulative Redeemable Preferred, liquidation preference
$79,000, 3,160,000 shares issued and outstanding in 2003 76,315 --
Common shares, par value $0.0001 per share; authorized 80,000,000
shares, 34,798,246 and 29,742,160 shares issued and outstanding in 2003 and
2002, respectively 3 3
Additional paid-in-capital 496,627 414,989
Deferred compensation, net (6,673) (1,766)
Accumulated distributions in excess of net income (86,957) (77,777)
----------- ---------
479,315 335,449
Less: notes receivable from officers/shareholders -- (2,473)
----------- ---------
479,315 332,976
----------- ---------
$ 1,001,098 $ 902,471
=========== =========
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
2
LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three and six months ended June 30, 2003 and 2002
(Unaudited and in thousands, except share and per share data)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues:
Rental $ 27,266 $ 22,646 $ 54,022 $ 45,087
Equity in earnings of non-consolidated entities 1,312 937 2,575 2,363
Advisory fees 269 -- 680 --
Interest and other 293 608 650 1,000
------------ ------------ ------------ ------------
29,140 24,191 57,927 48,450
------------ ------------ ------------ ------------
Expenses:
Interest 9,306 8,050 18,652 16,270
Debt satisfaction charges 7,685 -- 7,685 --
Depreciation and amortization of real estate 6,840 5,124 13,153 10,185
General and administrative 2,448 1,191 4,751 2,763
Property operating 744 452 1,655 1,248
Amortization of deferred expenses 513 459 1,044 944
------------ ------------ ------------ ------------
27,536 15,276 46,940 31,410
------------ ------------ ------------ ------------
Income from continuing operations before minority
interests 1,604 8,915 10,987 17,040
Minority interests 98 (1,493) (1,186) (2,748)
------------ ------------ ------------ ------------
Income from continuing operations 1,702 7,422 9,801 14,292
------------ ------------ ------------ ------------
Discontinued operations:
Income from discontinued operations 97 180 302 532
Gains on sales of properties 684 277 1,143 1,016
------------ ------------ ------------ ------------
Total discontinued operations 781 457 1,445 1,548
------------ ------------ ------------ ------------
Net income $ 2,483 $ 7,879 $ 11,246 $ 15,840
Dividends attributable to preferred shares - Series A -- -- -- (693)
Dividends attributable to preferred shares - Series B (212) -- (212) --
------------ ------------ ------------ ------------
Net income allocable to common shareholders $ 2,271 $ 7,879 $ 11,034 $ 15,147
============ ============ ============ ============
Income per common share-basic:
Income from continuing operations $ 0.05 $ 0.28 $ 0.30 $ 0.53
Income from discontinued operations 0.02 0.02 0.05 0.06
------------ ------------ ------------ ------------
Net income $ 0.07 $ 0.30 $ 0.35 $ 0.59
============ ============ ============ ============
Weighted average common shares outstanding -
basic 32,920,546 26,584,426 31,460,135 25,552,478
============ ============ ============ ============
Income per common share-diluted:
Income from continuing operations $ 0.04 $ 0.27 $ 0.29 $ 0.52
Income from discontinued operations 0.02 0.02 0.04 0.06
------------ ------------ ------------ ------------
Net income $ 0.06 $ 0.29 $ 0.33 $ 0.58
============ ============ ============ ============
Weighted average common shares outstanding -
diluted 38,333,046 27,108,371 36,872,837 31,120,910
============ ============ ============ ============
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
3
LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 2003 and 2002
(Unaudited and in thousands)
2003 2002
--------- --------
Net cash provided by operating activities $ 29,177 $ 26,330
--------- --------
Cash flows from investing activities:
Additions to real estate assets (24,690) (17,518)
Proceeds from sale of real estate, net 7,807 18,831
Real estate deposits (4,273) (1,266)
Investment in and advances to non-consolidated entities, net (2,994) --
--------- --------
Net cash (used in) provided by investing activities (24,150) 47
--------- --------
Cash flows from financing activities:
Dividends to common and preferred shareholders (20,426) (17,713)
Dividend reinvestment plan proceeds 3,034 2,102
Change in credit facility borrowings, net (31,000) (10,000)
Principal amortization payments (8,240) (7,013)
Principal payments on debt, excluding normal amortization (78,084) --
Proceeds of mortgages and notes payable 40,655 11,000
Increase in deferred costs (534) (372)
Cash distributions to minority partners (3,506) (3,202)
Proceeds from the sale of common and preferred shares, net 150,364 702
Increase in escrow deposits (1,131) (561)
Change in restricted cash 1,919 (78)
Origination fee amortization payments (189) (217)
--------- --------
Net cash provided by (used in) financing activities 52,862 (25,352)
--------- --------
Cash attributable to newly consolidated entity 1,578 --
--------- --------
Change in cash and cash equivalents 59,467 1,025
Cash and cash equivalents, at beginning of period 12,097 13,863
--------- --------
Cash and cash equivalents, at end of period $ 71,564 $ 14,888
========= ========
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
4
LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
(Unaudited and dollars in thousands, except per share data)
(1) The Company
Lexington Corporate Properties Trust (the "Company") is a self-managed and
self-administered real estate investment trust ("REIT") that acquires,
owns and manages a geographically diversified portfolio of net leased
office, industrial and retail properties. As June 30, 2003, the Company
had an ownership interest in 102 properties and managed an additional 2
properties. The real properties owned by the Company are generally subject
to triple net leases to corporate tenants. Of the Company's 102
properties, four provide for operating expense stops, one is a modified
gross lease and one requires the Company to be responsible for real estate
taxes in 2003 and the tenant to be responsible thereafter.
The Company believes it has qualified as a REIT under the Internal Revenue
Code of 1986, as amended. 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 which it was
previously precluded from 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 under the Code. As such, the
Company will be subject to federal income taxes on the income from these
activities.
The unaudited financial statements reflect all adjustments, which are, in
the opinion of management, necessary to present a fair statement of the
financial condition and results of operations for the interim periods. For
a more complete understanding of the Company's operations and financial
position, reference is made to the financial statements (including the
notes thereto) previously filed with the Securities and Exchange
Commission with the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.
(2) Summary of Significant Accounting Policies
Basis of Presentation and Consolidation. The Company's consolidated
financial statements are prepared on the accrual basis of accounting. The
financial statements reflect the accounts of the Company and its
controlled subsidiaries, including Lepercq Corporate Income Fund L.P.
("LCIF"), Lepercq Corporate Income Fund II L.P. ("LCIF II"), Net 3
Acquisition L.P. ("Net 3") and Lexington Realty Advisors, Inc. ("LRA").
The Company is the sole unitholder of each of the general partner and the
majority limited partner of LCIF, LCIF II and Net 3. Effective January 1,
2003, the Company converted its non-voting interest in LRA to a 99% voting
interest.
Earnings Per Share. Basic net income per share is computed by dividing net
income reduced by preferred dividends, if applicable, by the weighted
average number of common shares outstanding during the period. Diluted net
income per share amounts are similarly computed but include the effect,
when dilutive, of in-the-money common share options and operating
partnership units.
Recently Issued Accounting Standards. The Company's adoption of SFAS No.
146, which requires that exit or disposal costs be recorded when incurred
and be measured at fair value, had no impact on the Company's consolidated
financial position or results of operations. The adoption of SFAS No. 145,
which rescinds SFAS No. 4, which required all gains and losses on
extinguishment of debt to be classified as an extraordinary item, required
the Company to record debt satisfaction charges and the write-off of
unamortized financing costs as a charge from continuing operations instead
of an extraordinary item. The Company's adoption of FASB Interpretation
No. 45, which elaborates on the disclosures to be made by a guarantor in
its financial statements about its obligations, had no impact on the
Company's financial position or results of operations. FASB Interpretation
No. 46 "Consolidation of Variable Interest Entities" is required for all
variable interest entities created after January 31, 2003 and all existing
entities beginning July 1, 2003. FIN 46 requires that companies that
absorb the majority of another entity's expected losses, receive a
majority of its expected residual returns, or both, as a result of holding
variable interests, which are ownership, contractual, or other economic
interests in an entity, consolidate the variable interest entity. The
Company believes the adoption of FIN 46 will not have a material impact of
its financial position or results of operations. The adoption of SFAS No.
148 "Accounting for Stock-Based Compensation - Transition and Disclosure
and Amendment of
5
FASB Statement No. 123" requires the Company to disclose in both annual
and interim financial statements the method of accounting for stock-based
employee compensation and the effect of the method used on reported
results. The Company has elected to continue to account for its option
plan under the recognition provision of Accounting Principles Board
Opinion No. 25 "Accounting for Stock Issued to Employees." Accordingly, no
compensation cost has been recognized with regard to options granted in
the condensed consolidated statements of income.
Common share options granted generally vest ratably over a four-year term
and expire five years from the date of grant. The following table
illustrates the effect on net income and earnings per share if the fair
value based method had been applied to all outstanding stock awards in
each period:
Three Months Ended June 30,
2003 2002
------ ------
Net income allocable to common shareholders,
as reported $2,271 $7,879
Add: Stock based employee compensation
expense included in reported net income -- --
Deduct: Total stock based employee
compensation expense determined under fair
value based method for all awards 127 239
------ ------
Pro forma net income - basic $2,144 $7,640
====== ======
Net income per share - basic
Basic - as reported $ 0.07 $ 0.30
====== ======
Basic - pro forma $ 0.07 $ 0.29
====== ======
Net income allocable to common shareholders
for diluted earnings per share $2,139 $7,879
Add: Stock based employee compensation
expense included in reported net income -- --
Deduct: Total stock based employee
compensation expense determined under fair
value based method for all awards 127 239
------ ------
Pro forma net income - diluted $2,012 $7,640
====== ======
Net income per share - diluted
Diluted - as reported $ 0.06 $ 0.29
====== ======
Diluted - pro forma $ 0.05 $ 0.28
====== ======
6
Six Months Ended June 30,
2003 2002
------- -------
Net income allocable to common shareholders,
as reported $11,034 $15,147
Add: Stock based employee compensation
expense included in reported net income -- --
Deduct: Total stock based employee
compensation expense determined under fair
value based method for all awards 255 497
------- -------
Pro forma net income - basic $10,779 $14,650
======= =======
Net income per share - basic
Basic - as reported $ 0.35 $ 0.59
======= =======
Basic - pro forma $ 0.34 $ 0.57
======= =======
Net income allocable to common shareholders
for diluted earnings per share $12,247 $17,950
Add: Stock based employee compensation
expense included in reported net income -- --
Deduct: Total stock based employee
compensation expense determined under fair
value based method for all awards 255 497
------- -------
Pro forma net income - diluted $11,992 $17,453
======= =======
Net income per share - diluted
Diluted - as reported $ 0.33 $ 0.58
======= =======
Diluted - pro forma $ 0.33 $ 0.56
======= =======
Use of Estimates. Management has made a number of estimates and
assumptions relating to the reporting of assets and liabilities, the
disclosure of contingent assets and liabilities and the reported amounts
of revenues and expenses to prepare these consolidated financial
statements in conformity with generally accepted accounting principles.
The most significant estimates made include the recoverability of accounts
receivable (primarily related to straight-line rents) and the useful lives
of assets. Actual results could differ from those estimates.
Reclassification. Certain amounts included in 2002 financial statements
have been reclassified to conform with the 2003 presentation.
7
(3) 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
six months ended June 30, 2003 and 2002:
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
------------ ----------- ------------ ------------
BASIC
Income from continuing operations $ 1,702 $ 7,422 $ 9,801 $ 14,292
Less preferred dividends (212) -- (212) (693)
------------ ----------- ------------ ------------
Income allocable to common shareholders from
continuing operations 1,490 7,422 9,589 13,599
Total income from discontinued operations 781 457 1,445 1,548
------------ ----------- ------------ ------------
Net income allocable to common shareholders $ 2,271 $ 7,879 $ 11,034 $ 15,147
============ =========== ============ ============
Weighted average number of common shares
outstanding 32,920,546 26,584,426 31,460,135 25,552,478
============ =========== ============ ============
Income per common share - basic:
Income from continuing operations $ 0.05 $ 0.28 $ 0.30 $ 0.53
Income from discontinued operations 0.02 0.02 0.05 0.06
------------ ----------- ------------ ------------
Net income $ 0.07 $ 0.30 $ 0.35 $ 0.59
============ =========== ============ ============
DILUTED
Income allocable to common shareholders from
continuing operations - basic $ 1,490 $ 7,422 $ 9,589 $ 13,599
Incremental income (loss) attributed to assumed
conversion of dilutive securities (138) -- 1,098 2,665
------------ ----------- ------------ ------------
Income allocable to common shareholders from
continuing operations - diluted 1,352 7,422 10,687 16,264
Total income from discontinued operations - diluted 787 457 1,560 1,686
------------ ----------- ------------ ------------
Net income allocable to common shareholders -
diluted $ 2,139 $ 7,879 $ 12,247 $ 17,950
============ =========== ============ ============
Weighted average number of common shares used in
calculation of basic earnings per share 32,920,546 26,584,426 31,460,135 25,552,478
Add incremental shares representing:
Shares issuable upon exercise of employee share
options 199,986 304,165 181,690 276,020
Shares issuable upon conversion of dilutive
securities 5,212,514 219,780 5,231,012 5,292,412
------------ ----------- ------------ ------------
Weighted average number of shares used in
calculation of diluted earnings per common share
38,333,046 27,108,371 36,872,837 31,120,910
============ =========== ============ ============
Income per common share-diluted:
Income from continuing operations $ 0.04 $ 0.27 $ 0.29 $ 0.52
Income from discontinued operations 0.02 0.02 0.04 0.06
------------ ----------- ------------ ------------
Net income $ 0.06 $ 0.29 $ 0.33 $ 0.58
============ =========== ============ ============
8
(4) Investments in Real Estate
In February 2003, the Company acquired a property in Boca Raton, Florida
net leased to OCE Printing Systems USA, Inc. for a purchase price of
$23,500. The lease, which expires in February 2020 provides for annual
rental revenues of $2,245. The purchase price was partially funded through
a $15,275 interest only, non-recourse mortgage note which bears interest
at 5.25%, provides for annual debt service of $802 and matures March 2008
when a balloon payment of $15,275 is due.
(5) Discontinued Operations
In accordance with SFAS No. 144, the operating results of properties sold
or held for sale are classified as discontinued operations. During the six
months ended June 30, 2003, the Company sold its properties in
Bakersfield, California, in which the Company had a 64% ownership
interest, Tempe, Arizona and Alberta, Canada for aggregate net proceeds of
$7,807, which resulted in a gain of $1,143.
The following presents the operating results for the properties sold and
one property held for sale (having a net book value of $1,897 and included
in other assets) for the applicable periods:
Three Months Ended
June 30,
2003 2002
---- ----
Revenues $121 $295
Pre-tax income, including gains on sale $942 $457
Six Months Ended
June 30,
2003 2002
------ ------
Revenues $ 416 $ 849
Pre-tax income, including gains on sale $1,606 $1,548
(6) Investment in Non-Consolidated Entities
The Company has investments in three non-consolidated entities. The
entities are Lexington Acquiport Company, LLC ("LAC"), Lexington Florence
LLC ("Florence") and Lexington Columbia LLC ("Columbia").
In March 2003, LAC acquired a property in Farmington Hills, Michigan, for
an aggregate purchase price of $32,650. The property is net leased to
Motorola, Inc. through December 2016 for annual rent of $3,106. The tenant
has the ability to terminate the lease as of December 2011 with 18 months
notice and a payment of approximately $6,600. The purchase was partially
funded through a $24,000 non-recourse mortgage note which bears interest
at 30-day LIBOR plus 3.00% and becomes prepayable without penalty in
August 2003. LAC has arranged, subject to certain conditions, for a
$21,420 fixed rate, non-recourse mortgage note to satisfy, along with an
additional equity contribution of $2,580, the current LIBOR-based note in
August 2003. The replacement note will bear interest at 5.42%, requires
annual debt service payments of $1,500 and will mature in August 2012 when
a balloon payment of $17,500 will be due.
The following is a summary of selected balance sheet data and income
statement data for the Company's non-consolidated entities:
JUNE 30, 2003
- -------------
LAC FLORENCE COLUMBIA
--- -------- --------
Real estate, net $315,646 $15,386 $47,459
Mortgages payable $203,043 $ 9,470 $24,509
Lexington's ownership percentage 33.33% 22.73% 40.00%
9
THREE MONTHS ENDED JUNE 30, 2003 AND 2002
- -----------------------------------------
LAC FLORENCE COLUMBIA
--- -------- --------
2003 2002 2003 2002 2003 2002
------ ------ ---- ---- ------ ------
Revenues $9,297 $7,268 $425 $427 $1,734 $1,734
Expenses 6,192 4,923 274 275 1,042 1,040
------ ------ ---- ---- ------ ------
Net income $3,105 $2,345 $151 $152 $ 692 $ 694
====== ====== ==== ==== ====== ======
SIX MONTHS ENDED JUNE 30, 2003 AND 2002
- ---------------------------------------
LAC FLORENCE COLUMBIA
--- -------- --------
2003 2002 2003 2002 2003 2002
------- ------- ---- ---- ------ ------
Revenues $17,936 $14,521 $850 $729 $3,470 $3,468
Expenses 11,890 9,837 547 478 2,067 2,087
------- ------- ---- ---- ------ ------
Net income $ 6,046 $ 4,684 $303 $251 $1,403 $1,381
======= ======= ==== ==== ====== ======
(7) Concentration of Risk
The Company seeks to reduce its operating and leasing risks through
diversification achieved by the geographic distribution of its properties,
tenant industry diversification, avoiding dependency on a single property
and the creditworthiness of its tenants. For the three months and six
months ended June 30, 2003 and 2002, no single tenant represented greater
than 10% of revenues.
Cash and cash equivalent balances may exceed insurable amounts. The
Company believes it mitigates risk by investing in or through major
financial institutions.
(8) Minority Interests
In conjunction with several of the Company's acquisitions, sellers were
given interests in LCIF, LCIF II, or Net 3 as a form of consideration. All
of such interests are redeemable at certain times for common shares on a
one-for-one basis at various dates through November 2006.
As of June 30, 2003, the total number of limited partnership units of
LCIF, LCIF II and Net 3 outstanding was 5,203,970. These units, subject to
certain adjustments through the date of redemption, currently have annual
distributions per unit in varying amounts from $0 to $1.34 per unit with a
weighted average distribution of $1.19 per unit.
(9) Related Party Transactions
In February 2003, three officers repaid recourse notes due the Company,
including accrued interest thereon, of $2,522 by delivering to the Company
156,189 common shares.
10
All related party transactions are approved by the independent members of
the Board of Trustees.
(10) Commitments and Contingencies
The Company, including its non-consolidated entities, is obligated under
certain tenant leases to fund the expansion of the underlying leased
properties.
The Company is involved in various legal actions occurring in the ordinary
course of business. In the opinion of management, the ultimate disposition
of these matters will not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.
(11) Supplemental Disclosure of Statement of Cash Flow Information
During 2003 and 2002, the Company paid $20,241 and $16,415, respectively,
for interest.
During 2003 and 2002, the Company issued 336,992 and 64,249 common shares,
respectively, to certain employees and trustees resulting in $5,391 and
$996 of deferred compensation, respectively. These common shares generally
vest ratably over 5 years. However, in certain situations the vesting is
cliff based after 5 years and in other cases vesting only occurs if
certain performance criteria are met.
During 2003, three officers repaid recourse notes due the Company,
including accrued interest thereon, of $2,522 by delivering to the Company
156,189 common shares.
During 2003 and 2002, holders of an aggregate of 53,395 and 48,584
partnership units redeemed such units for common shares of the Company.
These redemptions resulted in an increase in shareholders' equity and
corresponding decrease in minority interest of $682 and $585,
respectively.
During 2002, the Company sold a property to a newly formed joint venture
(Florence) for $4,414 in net proceeds and a deemed capital contribution of
$643.
(12) Shareholders' Equity
In May 2003, the Company sold 4,500,000 common shares at $16.44 per share
raising net proceeds of $73,775. In June 2003, the Company sold 3,160,000
Series B Cumulative Redeemable Preferred Shares for $25 per share raising
net proceeds of $76,315. Each preferred share is entitled to a preferred
dividend, when declared by the Board of Trustees, of $2.0125 per annum.
(13) Mortgage and Notes Payable
During the six months ended June 30, 2003 the Company repaid $78,084 in
mortgage indebtedness with a weighted average interest rate of 8.05% and
incurred $6,764 in prepayment premiums and wrote-off $921 in deferred
financing costs, as debt satisfaction costs.
(14) Subsequent Events
The following events occurred subsequent to June 30, 2003:
- The Company purchased an office property in Dubuque, Iowa for
$11,365 net leased to McGraw-Hill, Inc. through July 2017. The lease
provides for average annual rents of $1,164. The purchase price was
partially funded through a $7,400, 5 year non-recourse mortgage
which bears interest at 4.89%, provides for annual debt service of
$513 and requires a balloon payment at maturity of $6,588.
- The Company purchased an industrial property in Minneapolis,
Minnesota for $4,868 net leased to Owens Corning through June 2015.
The lease provides for average annual rents of $596. The property
was purchased entirely with available cash.
11
- The Company purchased an office property in Greenville, South
Carolina for $21,500 net leased to Verizon, Inc. through January
2012. The lease provides for average annual rents of $2,067. The
purchase price was partially funded through a $13,975, 8.4 year
non-recourse mortgage which bears interest at 4.415%, provides for
annual debt service of $841 and requires a balloon payment at
maturity of $11,806.
- The tenant in the Company's Hebron, Kentucky property, which lease
was scheduled to expire April 30, 2007, exercised its option to
terminate its lease on April 30, 2004. The tenant is required to pay
the Company $893, which represents one year rent, at such time.
- LAC obtained the permanent non-recourse mortgage on its Farmington
Hills, Michigan property which was discussed in footnote 6.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
When used in this Form 10-Q Report, the words "believes," "expects," "estimates"
and similar expressions are generally intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially. In particular, among the
factors that could cause actual results to differ materially are the failure to
continue to qualify as a real estate investment trust, changes in general
business and economic conditions, competition, increases in real estate
construction costs, changes in interest rates, changes in accessibility of debt
and equity capital markets and other risks inherent in the real estate business
including tenant defaults, potential liability relating to environmental matters
and illiquidity of real estate investments. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Company undertakes no obligation to publicly release the
results of 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.
General
The Company, which has elected to qualify as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended, acquires, owns and
manages net-leased commercial properties. The Company believes that it has
operated as a REIT since October 1993.
As of June 30, 2003, the Company owned, or had interests in, 102 real estate
properties and managed 1 additional properties.
Critical Accounting Policies
The Company's accompanying consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America, which require management to make estimates that affect the amounts
of revenues, expenses, assets and liabilities reported. The following are
critical accounting policies which are both very important to the portrayal of
the Company's financial condition and results and which require some of
management's most difficult, subjective and complex judgments. The accounting
for these matters involves the making of estimates based on current facts,
circumstances and assumptions which could change in a manner that would
materially affect management's future estimate with respect to such matters.
Accordingly, future reported financial conditions and results could differ
materially from financial conditions and results reported based on management's
current estimates.
Revenue Recognition. The Company recognizes revenue in accordance with Statement
of Financial Accounting Standards No. 13 "Accounting for Leases" (SFAS No.13).
SFAS No.13 requires that revenue be recognized 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.
Gains on sales of real estate are recognized pursuant to the provisions of SFAS
No. 66 "Accounting for Sales of Real Estate." The specific timing of the sale is
measured against various criteria in SFAS No. 66 related to the terms of the
transactions and any continuing involvement in the form of management or
financial assistance associated with the properties. If the sales criteria are
not met, the gain is deferred and the finance, installment or cost recovery
method, as appropriate, is applied until the sales criteria are met.
Accounts Receivable. The Company continuously monitors collections from its
tenants and would make a provision for estimated losses based upon historical
experience and any specific tenant collection issues that the Company has
identified.
Real Estate. The Company evaluates the carrying value of all real estate held to
determine if an impairment has occurred which would require the recognition of a
loss. The evaluation includes reviewing anticipated cash flows of the property,
based on current leases in place, coupled with an estimate of proceeds to be
realized upon sale. However, estimating future sale proceeds is highly
subjective and such estimates could differ materially from actual results.
13
Liquidity and Capital Resources
Real Estate Assets. As of June 30, 2003, the Company's real estate assets were
located in 30 states and contained an aggregate of approximately 19.6 million
square feet of net rentable space. The properties are generally subject to
triple net leases, which are generally characterized as leases in which the
tenant pays all or substantially all of the cost and cost increases for real
estate taxes, capital expenditures, insurance and ordinary maintenance of the
property. Of the Company's 102 properties, four provide for operating expense
stops, one is subject to a modified gross lease and one requires the Company to
be responsible for real estate taxes in 2003 and for the tenant to be
responsible thereafter. Approximately 99.2% of square feet is subject to a
lease.
During the six months ended June 30, 2003, the Company purchased two properties
(including one purchased by a non-consolidated entity) for $56.2 million and
sold three properties, for net cash proceeds of $7.8 million.
The Company's principal sources of liquidity are revenues generated from the
properties, interest on cash balances, amounts available under its unsecured
credit facility and amounts that may be raised through the sale of securities in
private or public offerings. For the six months ended June 30, 2003, the leases
on the consolidated properties generated $54.4 million in rental revenue,
including discontinued operations, compared to $45.9 million during the same
period in 2002.
Dividends. The Company has made quarterly distributions since October 1986
without interruption. The Company declared a common dividend of $0.335 per share
to common shareholders of record as of July 31, 2003, payable on August 14,
2003. The Company's annualized common dividend rate is currently $1.34 per
share. The Company also declared a pro-rata preferred dividend of $0.067083 per
share to preferred shareholders of record as of July 31, 2003, payable on August
15, 2003. The annual preferred dividend rate is $2.0125 per share.
In connection with its intention to continue to qualify as a REIT for Federal
income tax purposes, the Company expects to continue paying regular common and
preferred dividends to its shareholders. These dividends are expected to be paid
from operating cash flows which are expected to increase over time due to
property acquisitions and growth in rental revenues in the existing portfolio
and from other sources. Since cash used to pay dividends reduces amounts
available for capital investments, the Company generally intends to maintain a
conservative dividend payout ratio, reserving such amounts as it considers
necessary for the expansion of properties in its portfolio, debt reduction, the
acquisition of interest in new properties as suitable opportunities arise, and
such other factors as the Board of Trustees considers appropriate.
Cash dividends paid to common shareholders increased to $20.4 million in 2003
compared to $17.0 million in 2002
Although the Company receives the majority of its rental payments on a monthly
basis, it intends to continue paying dividends quarterly. Amounts accumulated in
advance of each quarterly distribution are invested by the Company in short-term
money market or other suitable instruments.
Kmart Corporation, the Company's largest tenant based upon rental revenues,
filed for Chapter 11 bankruptcy protection on January 22, 2002. Kmart emerged
from bankruptcy on May 6, 2003. On April 23, 2003, the bankruptcy court approved
an agreement between the Company and Kmart. Under the agreement, Kmart has
agreed to make monthly rent payments in advance rather than semi-annual payments
in arrears as provided for in the lease and the Company agreed to pay Kmart a
management fee of $0.5 million per annum.
The Company anticipates that cash flows from operations will continue to provide
adequate capital to fund its operating and administrative expenses, regular debt
service obligations and all dividend payments in accordance with REIT
requirements in both the short-term and long-term. In addition, the Company
anticipates that cash on hand, borrowings under its unsecured credit facility,
issuance of equity and debt, and other alternatives will be available to fund
the necessary capital required by the Company. Cash flows from operations were
$29.2 million and $26.3 million for the six months ended June 30, 2003 and 2002,
respectively. The June 30, 2003 cash flows from operations were negatively
impacted by $6.8 million in debt satisfaction charge payments.
Net cash (used in) provided by investing activities totaled $(24.2) million and
$0.1 million for the six months ended June 30, 2003 and 2002, respectively. Cash
used in investing activities during each period was primarily attributable to
the acquisition of real estate and the investment in joint ventures. Cash
provided by investing activities relates to the sale of properties. Therefore,
the fluctuation in investing activities relates primarily to the timing of
investments and dispositions.
Net cash provided by (used in) financing activities totaled $52.9 million and
$(25.4) million for the six months ended June 30, 2003 and 2002, respectively.
Cash provided by (used in) financing activities during each period was primarily
attributable to repayments under the Company's credit facility, dividends (net
of proceeds reinvested under the Company's dividend reinvestment plan),
distributions to limited partners and debt service payments. Cash provided by
financing activities relates primarily to proceeds from equity share offerings
and mortgage financings.
UPREIT Structure. The Company's UPREIT structure permits the Company to effect
acquisitions by issuing to a seller, as a form of consideration, interests in
partnerships controlled by the Company. All of such interests are redeemable at
certain times for common
14
shares on a one-for-one basis and all of such interests require the Company to
pay certain distributions to the holders of such interests. The Company accounts
for these interests in a manner similar to a minority interest holder. The
number of common shares that will be outstanding in the future should be
expected to increase, and minority interest expense should be expected to
decrease, from time to time, as such partnership interests are redeemed for
common shares. The table set forth below provides certain information with
respect to such partnership interests as of June 30, 2003, based on the current
$1.34 annual dividend.
Current Total Current
Total Annualized Annualized
Number Affiliate Per Unit Distribution
Redemption Date Of Units Units Distribution ($000)
- --------------- ----------- --------- ------------ ---------
At any time 3,463,614 1,401,159 $1.34 $4,641
At any time 1,254,152 120,374 1.08 1,354
At any time 114,059 52,144 1.12 128
December 2003 1,341 -- 1.34 2
March 2004 43,734 -- 0.27 12
March 2004 19,510 -- -- --
November 2004 24,552 2,856 -- --
March 2005 29,384 -- -- --
January 2006 171,168 416 -- --
February 2006 28,230 1,743 -- --
May 2006 9,368 -- 0.29 3
November 2006 44,858 44,858 1.34 60
--------- --------- ----- ------
5,203,970 1,623,550 $1.19 $6,200
========= ========= ===== ======
Financing
Revolving Credit Facility. The Company's $60.0 million unsecured credit facility
bears interest at LIBOR plus 150-250 basis points depending on the amount of
properties free and clear of mortgage debt. The credit facility contains
customary financial covenants including restrictions on the level of
indebtedness, amount of variable rate debt and net worth maintenance provisions.
As of June 30, 2003, the Company is in compliance with all covenants, there are
no outstanding borrowings on the facility, $55.8 million is available to be
borrowed and $4.2 million in letters of credit are outstanding.
Financing Transactions. During the six months ending June 30, 2003 the Company
completed the following financing transactions:
- Obtained a $15.3 million interest only non-recourse mortgage on its
Boca Raton, Florida property. The mortgage note bears interest at
5.25%, provides for annual debt service payments of $0.8 million and
matures in March 2008 when a balloon payment of $15.3 million is
due.
- Obtained a $24.0 million interest only non-recourse mortgage on its
Farmington Hills, Michigan property. The mortgage note bears
interest at 30-day LIBOR plus 3.00% and can be prepaid without
penalty in August 2003. The Company has arranged, subject to certain
conditions, for a non-recourse mortgage note to partially satisfy
the current outstanding mortgage in August 2003. The replacement
note will have a fixed interest rate of 5.42%, provide for annual
debt service of $1.5 million and will mature in August 2012 when a
balloon payment of $17.5 million will be due.
Debt Service Requirements. The Company's principal liquidity needs are the
payment of interest and principal on outstanding mortgage debt. As of June 30,
2003, a total of 53 of the Company's 89 consolidated properties were subject to
outstanding mortgages, which had an aggregate principal amount of $432.4
million. The weighted average interest rate on the Company's total consolidated
debt on such date was approximately 6.96%. The estimated scheduled principal
amortization payments for the remainder of 2003 and for 2004, 2005, 2006 and
2007 are $7.5 million, $15.3 million, $15.0 million, $15.4 million and $16.3
million, respectively. The estimated scheduled balloon payments for the
remainder of 2003 and for 2004, 2005, 2006 and 2007, including the interest
only, recourse note on the Company's Warren, Ohio property, are $0, $14.5
million, $16.5 million, $0, and $12.5 million, respectively.
Lease Obligations. Since the Company's tenants bear all or substantially all of
the cost of property operations, maintenance and repairs, the Company does not
anticipate significant needs for cash for these costs. For six of the
properties, the Company does have a level of property operating expense
responsibility. The Company generally funds property expansions with additional
secured
15
borrowings, the repayment of which is funded out of rental increases under the
leases covering the expanded properties. To the extent there is a vacancy in a
property, the Company would be obligated for all operating expenses, including
real estate taxes and insurance.
The Company's tenants pay the rental obligation on ground leases either directly
to the fee holder or to the Company as increased rent. The annual ground lease
rental payment obligation for each of the next five years is $0.9 million.
Results of Operations
Three months ended June 30, 2003 compared with June 30, 2002
Changes in the results of operations for the Company are primarily due to the
growth of its portfolio and costs associated with such growth. In addition,
Lexington Realty Advisors, Inc. ("LRA") has been consolidated effective January
1, 2003; previously it had been accounted for under the equity method. Of the
increase in total revenues in 2003 of $5.0 million, $4.6 million is attributable
to rental revenue which resulted from (i) the consolidation of LRA ($1.1
million), (ii) properties purchased in 2002 and owned for the entire quarter in
2003 ($2.4 million), (iii) the property purchased in 2003 ($0.6 million) and
(iv) the property expansion in 2002 ($0.5 million). The remaining $0.4 million
in revenue growth in 2003 was attributable to LRA advisory fees of $0.3 million
and an increase in earnings from investments in non-consolidated entities ($0.4
million) due to acquisitions by these entities offset by a $0.3 million decrease
in interest and other income. The increase in interest expense of $1.3 million
due to the growth of the Company's portfolio ($1.3 million) and consolidation of
LRA ($0.5 million) has been offset by interest savings resulting from scheduled
principal amortization payments, mortgage satisfactions and lower variable
interest rates. The Company's general and administrative expenses increased by
$1.3 million due primarily to the consolidation of LRA ($0.4 million), greater
deferred compensation expense amortization ($0.2 million), greater professional
service costs ($0.2 million), state income taxes ($0.1 million),
compliance/insurance costs ($0.1 million) and personnel costs ($0.1 million).
The increase in property operating expenses of $0.3 million is due primarily to
the Company incurring property level operating expenses for certain properties
in which the Company has operating expense responsibility ($0.5 million) offset
by a reduction in costs for the Warren, Ohio property due to the tenant's
emergence from bankruptcy. Debt satisfaction charges of $7.7 million were
incurred in 2003 due to the payoff of certain mortgages. Minority interest
expense decreased in 2003 due to the net reduction in earnings as described
above. Net income decreased in 2003 due to the net impact of items discussed
above.
The Company's non-consolidated entities had aggregate net income of $3.9 million
for the three months ended June 30, 2003 compared with $3.2 million in the
comparable period in 2002. The increase in net income is primarily attributable
to an increase in rental revenue of $2.0 million in 2003 attributable to the
acquisition of properties in March 2003 and August 2002. These revenue sources
were partially offset by an increase in (i) interest expense of $0.7 million in
2003 due to partially funding of acquisitions with the use of non-recourse
mortgage debt and (ii) depreciation expense of $0.5 million in 2003 due to more
depreciable assets owned. The financial information for non-consolidated
entities for 2002 does not include any financial information for LRA.
Six months ended June 30, 2003 compared with June 30, 2002
Changes in the results of operations for the Company are primarily due to the
growth of its portfolio and costs associated with such growth. In addition, LRA
has been consolidated effective January 1, 2003; previously it had been
accounted for under the equity method. Of the increase in total revenues in 2003
of $9.5 million, $8.9 million is attributable to rental revenue which resulted
from (i) the consolidation of LRA ($2.2 million), (ii) properties purchased in
2002 and owned for the entire period in 2003 ($5.1 million), (iii) the property
purchased in 2003 ($0.8 million); and (iv) property expansion in 2002 ($0.9
million). The remaining $0.5 million in revenue growth in 2003 was primarily
attributable to LRA advisory fees of $0.7 million and an increase ($0.2 million)
in earnings from non-consolidated entities offset by a $0.4 million decrease in
interest and other income. The increase in interest expense of $2.4 million due
to the growth of the Company's portfolio ($2.3 million) and consolidation of LRA
($1.1 million) has been partially offset by interest savings resulting from
scheduled principal amortization payments, mortgage satisfactions and lower
variable interest rates. The Company's general and administrative expenses
increased by $2.0 million due primarily to the consolidation of LRA ($0.8
million), greater deferred compensation expense amortization ($0.3 million),
greater professional services costs ($0.2 million), personnel costs ($0.3
million) and compliance costs ($0.3 million). The increase in property operating
expenses of $0.4 million is due primarily to incurring property level operating
expenses for properties in which the Company has operating expense
responsibility ($0.8 million) offset by the reduction in costs for the Warren,
Ohio property due to the tenant's emergence from bankruptcy. Debt satisfaction
charges of $7.7 million were incurred in 2003 due to the payoff of certain
mortgages. Minority interest expense decreased in 2003 due to the net reduction
in earnings as described above. Net income decreased in 2003 due to the positive
impact of items discussed above.
16
The Company's non-consolidated entities had aggregate net income of $7.8 million
for the six months ended June 30, 2003 compared with $6.3 million in the
comparable period in 2002. The increase in net income is primarily attributable
to an increase in rental revenue of $3.5 million in 2003 attributable to the
acquisition of properties in March 2003, August 2002, and the formation of a new
joint venture in 2002. These revenue sources were partially offset by an
increase in (i) interest expense of $1.1 million in 2003 due to partially
funding of acquisitions with the use of non-recourse mortgage debt and (ii)
depreciation expense of $0.8 million in 2003 due to more depreciable assets
owned. The financial information for non-consolidated entities for 2002 does not
include any financial information for LRA.
The increase in net income in future periods will be closely tied to the level
of acquisitions made by the Company. Without acquisitions, which in addition to
generating rental revenue, generate acquisition, debt placement and asset
management fees from co-investment programs, the sources of growth in net income
are limited to index adjusted rents (7 leases), percentage rents (3 leases),
reduced interest expense on amortizing mortgages and by controlling other
variable overhead costs. However, there are many factors beyond management's
control that could offset these items including, without limitation, increased
interest rates of variable rate debt ($46.7 million as of June 30, 2003 at a
weighted average interest rate of 4.16%), tenant monetary defaults and vacancies
at the properties.
Funds From Operations
The Company believes that Funds From Operations ("FFO") enhances an investor's
understanding of the Company's financial condition, results of operations and
cash flows. The Company believes that FFO is an appropriate, but limited,
measure of the performance of an equity REIT, and that it can be one measure of
a REIT's ability to make cash distributions. FFO is defined in the April 2002
"White Paper", issued by the National Association of Real Estate Investment
Trusts, Inc. ("NAREIT") as "net income (computed in accordance with generally
accepted accounting principles), excluding gains (or losses) from sales of
property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds from
operations on the same basis." FFO should not be considered an alternative to
net income as an indicator of operating performance or to cash flows from
operating activities as determined in accordance with generally accepted
accounting principles, or as a measure of liquidity to other consolidated income
or cash flow statement data as determined in accordance with generally accepted
accounting principles.
The following table reconciles net income allocable to common shareholders to
the Company's Funds From Operations for the six months ended June 30, 2003 and
2002 ($000's):
2003 2002
-------- --------
Net income allocable to common shareholders $ 11,034 $ 15,147
Adjustments:
Depreciation and amortization of real estate 13,221 10,375
Minority interest's share of net income 1,101 2,686
Amortization of leasing commissions 400 348
Gains on sale of properties (1,143) (1,016)
Joint venture adjustment 1,889 2,226
Preferred dividends - Series A -- 693
-------- --------
Funds From Operations $ 26,502 $ 30,459
======== ========
Cash flows from operating activities $ 29,177 $ 26,330
Cash flows from investing activities $(24,150) $ 47
Cash flows from financing activities $ 52,862 $(25,352)
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK ($000's)
The Company's exposure to market risk relates to its variable rate debt. As of
June 30, 2003 and 2002, the Company's variable rate indebtedness represented
10.5% and 10.8% of total long-term indebtedness, respectively. During the three
months ended June 30, 2003 and 2002, this variable rate indebtedness had a
weighted average interest rate of 4.26% and 4.64%, respectively, and for the six
months ended June 30, 2003 and 2002 the variable rate indebtedness had a
weighted average interest rate of 4.13% and 4.53%, respectively. Had the
weighted average interest rate been 100 basis points higher, the Company's net
income for the three months
17
ended June 30, 2003 and 2002 would have been reduced by approximately $130 and
$144, respectively and for the six months ended June 30, 2003 and 2002 net
income would have been reduced by $300 and $284, respectively.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
(a) Disclosure Controls and Procedures. The Company's management, with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company's disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended) as of the end of the period
covered by this report. Based on such evaluation, the Company's Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of such
period, the Company's disclosure controls and procedures are effective.
Internal Control Over Financial Reporting
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Company's internal control over financial reporting during the fiscal
quarter to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
18
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings - not applicable.
ITEM 2. Changes in Securities and Use of Proceeds - not applicable.
ITEM 3. Defaults Upon Senior Securities - not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders.
At the Company's Annual Meeting of Shareholders held on May 21, 2003,
the following action was taken:
The shareholders elected the eight individuals nominated to serve as
trustees of the Company until the 2004 Annual Meeting, as set forth in
Proposal No. 1 in the Company's Notice of Annual Meeting of
Shareholders and Proxy Statement for the Annual Meeting. The eight
individuals elected, and the number of votes cast for, or withheld,
with respect to each of them, follows:
For Withheld
--- --------
E. Robert Roskind 26,521,129 366,317
Richard J. Rouse 26,527,971 359,475
T. Wilson Eglin 26,523,929 363,517
Geoffrey Dohrmann 26,679,043 208,403
Carl D. Glickman 26,653,408 234,038
Kevin W. Lynch 26,673,014 214,432
Jack A. Shaffer 26,649,089 238,357
Seth M. Zachary 23,532,044 3,355,402
ITEM 5. Other Information - not applicable.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
31.1 Certification of Chief Executive Officer 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 (filed herewith)
31.2 Certification of Chief Financial Officer 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 (filed herewith)
32.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (filed herewith)
32.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (filed herewith)
(b) Reports on Form 8-K filed during the quarter ended June 30,
2003.
Form 8-K dated April 23, 2003, filed April 28,
2003. Included Press Release for first quarter
earnings release.
Form 8-K dated April 29, 2003, filed May 6, 2003.
Included the Underwriting Agreement for the
Common Share Offering.
Form 8-K dated June 10, 2003, filed June 11, 2003.
Included the Underwriting Agreement for the
Preferred Share Offering.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Lexington Corporate Properties Trust
Date: August 13, 2003 By: /s/ T. Wilson Eglin
----------------- ---------------------------------------
T. Wilson Eglin
Chief Executive Officer, President and
Chief Operating Officer
Date: August 13, 2003 By: /s/ Patrick Carroll
--------------- ---------------------------------------
Patrick Carroll
Chief Financial Officer, Executive
Vice President and Treasurer
20