Exhibit 99.1
[FINANCIAL RELATIONS BOARD NEWS LOGO]
RE: LEXINGTON CORPORATE PROPERTIES TRUST
ONE PENN PLAZA
SUITE 4015
NEW YORK, NY 10119
FOR FURTHER INFORMATION:
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Patrick Carroll Claire Koeneman Tim Grace
Chief Financial Officer Analyst Inquiries Media Inquiries
(212) 692-7200 (312) 640-6745 (312) 640-6667
FOR IMMEDIATE RELEASE
THURSDAY JULY 27, 2006
LEXINGTON CORPORATE PROPERTIES TRUST ANNOUNCES
SECOND QUARTER RESULTS
New York, NY - July 27, 2006 - Lexington Corporate Properties Trust (NYSE:LXP)
("Lexington"), a real estate investment trust, today announced results for its
second quarter ended June 30, 2006.
Second Quarter Highlights
- -------------------------
o Acquired 5 properties for $66.0 million, all in non-consolidated
entities;
o Sold 4 properties resulting in an aggregate net gain of $13.7 million;
o Entered into 2 new leases on portfolio properties;
o Obtained $46.3 million of non-recourse mortgage financings (including
$25.9 million in non-consolidated entities) secured by 3 properties at
a weighted average fixed interest rate of 6.3%;
o Invested $11.2 million in a $13.0 million face mortgage at an
effective yield of 7.5%;
o Received $7.1 million, (including $1.7 million from non-consolidated
entities) from sale of Dana Corporation bankruptcy claims; and
o Completed foreclosure of Milpitas property resulting in a $6.3 million
gain.
Quarterly Results
Lexington reports funds from operations for all periods to include the dilutive
effect of the deemed conversion of all operating partnership units and the
Company's Series C preferred shares. Accordingly, the Company's funds from
operations were $38.2 million, or $0.60 per diluted share/unit, for the second
quarter of 2006, after $7.1 million in aggregate debt satisfaction gains,
including minority interests' share ($0.11 per diluted share/unit), $5.4 million
in aggregate impairment charges and the accelerated amortization of above market
leases, including non-consolidated entities ($0.09 per diluted share/unit)
relating to 2 properties formerly leased to Dana Corporation and $6.9 million in
aggregate gains realized on sale of Dana Corporation bankruptcy claims,
including non-consolidated
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entities ($0.11 per diluted share/unit), compared to $34.0 million, or $0.57 per
diluted share/unit, after $4.6 million in debt satisfaction gains, net ($0.08
per diluted share/unit) and $0.6 million ($0.01 per diluted share/unit) in
impairment charges, for the second quarter of 2005. The aggregate impact of
these items was an increase of $8.6 million ($0.13 per diluted share/unit) in
the second quarter of 2006 and an increase of $4.0 million ($0.07 per diluted
share/unit) in the second quarter of 2005 in reported Company funds from
operations.
Rental revenues for the quarter totaled $46.4 million, which is net of the
accelerated amortization of an above market lease relating to a property
formerly leased to Dana Corporation ($2.3 million), compared to rental revenues
of $44.3 million for the same period last year. Net income allocable to common
shareholders was $21.4 million in the second quarter of 2006, including $13.7
million of gains on sales, $6.2 million in debt satisfaction gains, net, $5.4
million of impairment charges and the accelerated amortization of above market
leases (including non-consolidated entities) and $6.9 million in aggregate gains
realized on sale of bankruptcy claims (including non-consolidated entities),
compared to $11.8 million, which included $4.3 million of gains on sale, $4.6
million in debt satisfaction gains, net and $0.6 million of impairment charges,
for the same period last year.
Six Month Results
For the six months ended June 30, 2006, the Company's funds from operations were
$66.8 million, or $1.05 per diluted share/unit, after $6.1 million in aggregate
debt satisfaction gains, including minority interests' share ($0.10 per diluted
share/unit), $5.4 million in aggregate impairment charges and the accelerated
amortization of above market leases, including non-consolidated entities ($0.09
per diluted share/unit), relating to two properties formerly leased to Dana
Corporation and $6.9 million in aggregate gains realized on sale of Dana
Corporation bankruptcy claims, including non-consolidated entities ($0.11 per
diluted share/unit), compared to $57.1 million, or $0.96 per diluted share/unit,
after $0.6 million in impairment charges ($0.01 per diluted share/unit) and $4.6
million in debt satisfaction gains, net ($0.08 per diluted share/unit) for the
same period last year. The aggregate impact of these items was an increase of
$7.6 million ($0.12 per diluted share/unit) for the six months ended June 30,
2006 and an increase of $4.0 million ($0.07 per diluted share/unit) for the six
months ended June 30, 2005 in reported Company funds from operations. Rental
revenues for the six months ended June 30, 2006 totaled $94.9 million, which is
net of the accelerated amortization of an above market lease relating to a
property formerly leased to Dana Corporation ($2.3 million), compared to rental
revenues of $79.1 million for the same period last year. Net income allocable to
common shareholders for the six months ended June 30, 2006 was $23.4 million,
which includes $16.1 million of gains on sales, $5.2 million in debt
satisfaction gains, net, $6.9 million in aggregate gains realized on sale of
bankruptcy claims, including non-consolidated entities and $5.4 million of
impairment charges and the accelerated amortization of above market leases,
including non-consolidated entities compared to $17.3 million, which includes
$0.6 million in impairment charges, $4.6 million in debt satisfaction gains, net
and $5.1 million of gains on sale, for the same period last year.
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Conference Call
Management will discuss the financial results and Lexington's business plan on a
conference call today at 2:00 p.m. Eastern time. The toll-free dial-in number is
800-240-2430. A replay of the conference call will be available through August
3, 2006. The toll-free telephone number for the replay is 800-405-2236, passcode
11065123. International callers can access the conference call by dialing
303-262-2140 and the replay by dialing 303-590-3000, passcode 11065123 (same
passcode). The conference call can also be accessed on the internet at
http://www.lxp.com.
Share Repurchase
Lexington announced its intention to repurchase common shares/units under its
previously announced two million common share/unit repurchase authorization,
from time to time for cash in open market transactions or in
privately-negotiated transactions in accordance with applicable federal
securities laws. The timing and amount of the repurchases will be determined by
Lexington's management based on their evaluation of market conditions, share
price and other factors. The share repurchase program may be suspended or
discontinued at any time.
About Lexington
Lexington Corporate Properties Trust is a real estate investment trust that owns
and manages office, industrial and retail properties net-leased to major
corporations throughout the United States and provides investment advisory and
asset management services to investors in the net lease area. Lexington
currently pays an annualized dividend of $1.46 per share. Additional information
about Lexington is available at www.lxp.com
Lexington believes that funds from operations ("FFO") enhances an investor's
understanding of Lexington's financial condition, results of operations and cash
flows. Lexington considers FFO a useful additional measure of performance for an
equity REIT because it facilitates an understanding of the operating performance
of its properties without giving effect to real estate depreciation and
amortization, which assumes that the value of real estate assets diminishes
predictably over time. Since real estate values have historically risen and
fallen with market conditions, Lexington believes that funds from operations
provides a more meaningful and accurate indication of its performance. FFO can
also facilitate a comparison of current operating performance among REITs. FFO
is defined in the April 2002 "White Paper" issued by the National Association of
Real Estate Investment Trusts, Inc. ("NAREIT") as "net income (or loss) computed
in accordance with generally accepted accounting principles ("GAAP"), excluding
gains (or losses) from sales of property, plus real estate depreciation and
amortization and after adjustments for unconsolidated partnerships and joint
ventures." Lexington includes in its calculation of FFO, which as included it
refers to as the "Company's funds from operations" or "Company FFO," the
dilutive effect of the deemed conversion of (1) its convertible operating
partnership units and (2) its Series C Cumulative Convertible Preferred Shares
issued in 2005 and 2004. Neither FFO nor Company FFO should 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 GAAP, or as a
measure of liquidity to other consolidated income or cash flow statement data as
determined in accordance with GAAP.
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This release contains certain forward-looking statements which involve known and
unknown risks, uncertainties or other factors not under Lexington's control
which may cause actual results, performance or achievements of Lexington to be
materially different from the results, performance, or other expectations
implied by these forward-looking statements. These factors include, but are not
limited to, (i) the failure to continue to qualify as a real estate investment
trust, (ii) changes in general business and economic conditions, (iii)
competition, (iv) increases in real estate construction costs, (v) changes in
interest rates, (vi) changes in accessibility of debt and equity capital
markets, and (vii) those other factors and risks detailed in Lexington's
periodic filings with the Securities and Exchange Commission. Forward-looking
statements, which are based on certain assumptions and describe the Company's
future plans, strategies and expectations, are generally identifiable by use of
the words "believes," "expects," "intends," "anticipates," "estimates,"
"projects" or similar expressions. Lexington undertakes no obligation to
publicly release the results of any revisions to those forward-looking
statements which may be made to reflect events or circumstances after the
occurrence of unanticipated events. Accordingly, there is no assurance that
Lexington's expectations will be realized.
Financial Tables Follow
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LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---- ---- ---- ----
Gross revenues:
Rental $ 46,423 $ 44,297 $ 94,936 $ 79,145
Advisory fees 1,338 2,556 2,401 3,191
Tenant reimbursements 3,887 2,106 8,320 2,989
--------- --------- --------- ---------
Total gross revenues 51,648 48,959 105,657 85,325
Expense applicable to revenues:
Depreciation and amortization (20,351) (17,534) (40,592) (28,745)
Property operating (7,445) (4,916) (15,271) (7,550)
General and administrative (4,865) (4,661) (10,479) (9,006)
Non-operating income 5,911 207 6,706 890
Interest and amortization expense (17,801) (15,764) (35,446) (27,782)
Debt satisfaction gains, net 1,241 4,632 294 4,632
Impairment charges, net (1,121) -- (1,121) --
--------- --------- --------- ---------
Income before benefit (provision) for income taxes, minority
interests, equity in earnings of non-consolidated entities and
discontinued operations 7,217 10,923 9,748 17,764
Benefit (provision) for income taxes 82 29 155 (67)
Minority interests (1,468) (1,173) (1,710) (2,284)
Equity in earnings of non-consolidated entities 825 1,334 2,070 2,759
--------- --------- --------- ---------
Income from continuing operations 6,951 10,818 10,263 18,172
--------- --------- --------- ---------
Discontinued operations, net of minority interest and taxes:
Income (loss) from discontinued operations (137) 1,406 387 2,919
Debt satisfaction (charge) gain, net 4,976 -- 4,898 (54)
Impairment charge -- (592) -- (623)
Gains on sales of properties 13,730 4,317 16,050 5,061
--------- --------- --------- ---------
Total discontinued operations 18,569 5,131 21,335 7,303
--------- --------- --------- ---------
Net income 25,520 15,949 31,598 25,475
Dividends attributable to preferred shares - Series B (1,590) (1,590) (3,180) (3,180)
Dividends attributable to preferred shares - Series C (2,519) (2,519) (5,038) (5,038)
--------- --------- --------- ---------
Net income allocable to common shareholders $ 21,411 $ 11,840 $ 23,380 $ 17,257
========= ========= ========= =========
Company's funds from operations(1) $ 38,157 $ 34,031 $ 66,810 $ 57,141
========= ========= ========= =========
Per share/unit:
Basic net income $0.41 $0.24 $0.45 $0.35
Diluted net income $0.41 $0.22 $0.45 $0.33
Company's funds from operations(1)-basic $0.60 $0.57 $1.05 $0.96
Company's funds from operations(1)-diluted $0.60 $0.57 $1.05 $0.96
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LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
6/30/06 12/31/05
------- --------
Real estate, at cost $ 1,874,730 $ 1,883,115
Accumulated depreciation (255,332) (241,188)
Investment in joint ventures 186,391 191,146
Properties held for sale - discontinued operations 7,956 49,397
Intangible assets, net 133,046 128,775
Cash and cash equivalents 54,318 53,515
Deferred expenses, net 14,440 13,582
Rent receivable 6,052 7,673
Rent receivable - deferred 26,551 24,778
Other assets 92,845 49,439
--------- ---------
$ 2,140,997 $ 2,160,232
========= =========
Mortgages and notes payable $ 1,152,805 $ 1,139,971
Liabilities - discontinued operations 4,180 32,145
Other liabilities 36,331 35,434
Minority interests 60,347 61,372
Shareholders' equity 887,334 891,310
--------- ---------
$ 2,140,997 $ 2,160,232
========= =========
Common shares 53,015,485 52,155,855
Preferred shares - Series B 3,160,000 3,160,000
Preferred shares - Series C 3,100,000 3,100,000
Operating partnership units 5,622,694 5,720,071
(1) The Company believes that funds from operations ("FFO") enhances an
investor's understanding of Lexington's financial condition, results of
operations and cash flows. The Company considers FFO a useful additional
measure of performance for an equity REIT because it facilitates an
understanding of the operating performance of its properties without giving
effect to real estate depreciation and amortization, which assumes that the
value of real estate assets diminishes predictably over time. Since real
estate values have historically risen and fallen with market conditions,
Lexington believes that funds from operations provides a more meaningful
and accurate indication of its performance. FFO can also facilitate a
comparison of current operating performance among REITs. FFO is defined in
the April 2002 "White Paper" issued by the National Association of Real
Estate Investment Trusts, Inc. ("NAREIT") as "net income (or loss) computed
in accordance with generally accepted accounting principles ("GAAP"),
excluding gains (or losses) from sales of property, plus real estate
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures." The Company includes in its calculation
of FFO, which as included it refers to as the "Company's funds from
operations" or "Company FFO," the dilutive effect of the deemed conversion
of (1) its convertible operating partnership units and (2) its Series C
Cumulative Convertible Preferred Shares issued in 2005 and 2004. Neither
FFO nor Company FFO should 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 GAAP, or as a measure of
liquidity to other consolidated income or cash flow statement data as
determined in accordance with GAAP.
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LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
AND COMPANY'S FUNDS FROM OPERATIONS PER SHARE
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---- ---- ---- ----
Earning Per Share
- -----------------
Basic
Income from continuing operations $ 6,951 $ 10,818 $ 10,263 $ 18,172
Less preferred dividends (4,109) (4,109) (8,218) (8,218)
------------ ------------ ------------ ------------
Income allocable to common shareholders from
continuing operations - basic 2,842 6,709 2,045 9,954
Total income from discontinued operations - basic 18,569 5,131 21,335 7,303
------------ ------------ ------------ ------------
Net income allocable to common shareholders - basic $ 21,411 $ 11,840 $ 23,380 $ 17,257
============ ============ ============ ============
Weighted average number of common shares outstanding 52,116,003 48,593,332 51,980,753 48,472,665
============ ============ ============ ============
Per share data:
Income from continuing operations $ 0.05 $ 0.14 $ 0.04 $ 0.20
Income from discontinued operations 0.36 0.10 0.41 0.15
------------ ------------ ------------ ------------
Net income - basic $ 0.41 $ 0.24 $ 0.45 $ 0.35
============ ============ ============ ============
Diluted
Income allocable to common shareholders from
continuing operations-basic $ 2,842 $ 6,709 $ 2,045 $ 9,954
Adjustments:
Incremental income attributed to assumed conversion of
dilutive securities -- 169 -- 743
------------ ------------ ------------ ------------
Income allocable to common shareholders from
continuing operations-diluted 2,842 6,878 2,045 10,697
Total income from discontinued operations - diluted 18,569 5,131 21,335 7,303
------------ ------------ ------------ ------------
Net income allocable to common shareholders - diluted $ 21,411 $ 12,009 $ 23,380 $ 18,000
============ ============ ============ ============
Weighted average number of shares used in calculation
of basic earnings per share 52,116,003 48,593,332 51,980,753 48,472,665
Add incremental shares representing:
Shares issuable upon exercises of employee share
options 20,570 80,928 25,972 77,748
Shares issuable upon conversion of dilutive
securities -- 5,308,392 -- 5,308,392
------------ ------------ ------------ ------------
Weighted average number of shares used in calculation of
diluted earnings per common share 52,136,573 53,982,652 52,006,725 53,858,805
============ ============ ============ ============
Per share data:
Income from continuing operations - diluted $ 0.05 $ 0.13 $ 0.04 $ 0.20
Income from discontinued operations - diluted 0.36 0.09 0.41 0.13
------------ ------------ ------------ ------------
Net income - diluted $ 0.41 $ 0.22 $ 0.45 $ 0.33
============ ============ ============ ============
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LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
AND COMPANY'S FUNDS FROM OPERATIONS PER SHARE
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---- ---- ---- ----
The Company's Funds From Operations
- -----------------------------------
Basic and Diluted
- -----------------
Net income allocable to common shareholders-basic $ 21,411 $ 11,840 $ 23,380 $ 17,257
Adjustments:
Depreciation and amortization 20,180 17,995 40,307 29,784
Minority interests-OP Units 2,000 1,394 2,688 2,251
Amortization of leasing commissions 171 129 310 253
Joint venture adjustment-depreciation 5,582 4,471 11,063 7,619
Preferred dividends-Series C 2,519 2,519 5,038 5,038
Gains on sale of properties (13,730) (4,317) (16,050) (5,061)
Taxes incurred on sale of property 24 -- 74 --
------------ ------------ ------------ ------------
Company's funds from operations $ 38,157 $ 34,031 $ 66,810 $ 57,141
============ ============ ============ ============
Basic
- -----
Weighted average shares outstanding-basic EPS 52,116,003 48,593,332 51,980,753 48,472,665
Operating partnership units 5,623,223 5,374,499 5,638,075 5,380,357
Preferred shares - Series C 5,779,330 5,779,330 5,779,330 5,779,330
------------ ------------ ------------ ------------
Weighted average shares outstanding-basic 63,518,556 59,747,161 63,398,158 59,632,352
============ ============ ============ ============
Company's funds from operations per share $ 0.60 $ 0.57 $ 1.05 $ 0.96
============ ============ ============ ============
Diluted
- -------
Weighted average shares outstanding-diluted EPS 52,136,573 53,982,652 52,006,725 53,858,805
Operating partnership units 5,623,223 5,374,499 5,638,075 5,380,357
Preferred shares - Series C 5,779,330 5,779,330 5,779,330 5,779,330
Non-dilutive convertible shares -- (5,308,392) -- (5,308,392)
------------ ------------ ------------ ------------
Adjusted weighted average shares outstanding-diluted 63,539,126 59,828,089 63,424,130 59,710,100
============ ============ ============ ============
Company's funds from operations per share $ 0.60 $ 0.57 $ 1.05 $ 0.96
============ ============ ============ ============
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