10-Q 1 e10-q.txt LEXINGTON CORPORATE PROPERTIES TRUST 1 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, 2000 [ ] 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 the number of shares outstanding of each of the registrant's classes of common shares, as of the latest practicable date: 17,136,766 common shares, par value $.0001 per share on August 11, 2000. 2 PART 1. - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2000 (Unaudited) and December 31, 1999 (in thousands, except share and per share data)
June 30, December 31, ASSETS: 2000 1999 -------- -------- Real estate, at cost $682,589 $688,926 Less: accumulated depreciation and amortization 89,709 82,334 -------- ------- 592,880 606,592 Cash and cash equivalents 3,128 8,837 Restricted cash 2,231 2,470 Investment in and advances to joint ventures 20,210 11,523 Other assets, net 36,828 27,059 -------- ------- $655,277 $656,481 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY: Mortgages and notes payable $304,131 $299,360 Credit facility 66,421 70,921 Subordinated notes payable, including accrued interest 1,973 1,973 Origination fees payable, including accrued interest 6,701 6,781 Accounts payable and other liabilities 6,475 6,168 -------- ------- 385,701 385,203 Minority interests 65,890 66,303 -------- ------- 451,591 451,506 -------- ------- Preferred shares, par value $0.0001 per share; authorized 10,000,000 shares. Class A Senior Cumulative Convertible Preferred, liquidation preference $25,000; 2,000,000 shares issued and outstanding 24,369 24,369 -------- ------- Common shares, par value $0.0001 per share; 287,888 shares issued and outstanding, liquidation preference $3,886 3,809 3,809 -------- ------- Shareholders' equity: Common shares, par value $0.0001 per share, authorized 40,000,000 shares, 16,793,155 and 16,905,285 shares issued and outstanding in 2000 and 1999, respectively 2 2 Additional paid-in-capital 239,198 240,339 Deferred compensation, net (1,197) (701) Accumulated distributions in excess of net income (60,506) (60,852) -------- ------- 177,497 178,788 Less: notes receivable from officers/ shareholders (1,989) (1,991) -------- ------- Total shareholders' equity 175,508 176,797 -------- ------- $655,277 $656,481 ======= =======
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 INCOME Three and six months ended June 30, 2000 and 1999 (Unaudited and in thousands, except per share data)
Three months ended Six months ended June 30, June 30, 2000 1999 2000 1999 --------- --------- --------- -------- Revenues: Rental $ 19,298 $ 18,673 $ 38,318 $ 37,535 Equity in earnings of joint ventures 231 -- 633 -- Interest and other 504 277 692 576 --------- --------- --------- -------- 20,033 18,950 39,643 38,111 --------- --------- --------- -------- Expenses: Interest 7,221 6,991 14,655 14,132 Depreciation and amortization of real estate 4,367 4,461 8,793 8,900 Amortization of deferred expenses 380 242 673 485 General and administrative 1,312 1,186 2,598 2,196 Property operating 399 452 768 915 --------- --------- --------- -------- 13,679 13,332 27,487 26,628 --------- --------- --------- -------- Income before gain on sale of properties and minority interests 6,354 5,618 12,156 11,483 Gain on sale of properties 2,662 698 2,662 698 --------- --------- --------- -------- Income before minority interests 9,016 6,316 14,818 12,181 Minority interests 1,670 1,447 3,001 2,949 --------- --------- --------- -------- Net income $ 7,346 $ 4,869 $ 11,817 $ 9,232 ========= ========= ========= ======== Net income per common share: Basic $ 0.40 $ 0.25 $ 0.63 $ 0.47 Diluted $ 0.36 $ 0.24 $ 0.59 $ 0.47
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30, 2000 and 1999 (Unaudited and in thousands, except share data)
2000 1999 -------- -------- Net cash provided by operating activities $ 19,869 $ 18,525 -------- -------- Cash flows from investing activities: Acquisitions of real estate, net (27,077) (7,638) Investment in and advances to joint ventures (6,005) - Real estate deposits (5,547) - Proceeds from sale of real estate, net 16,335 5,398 -------- -------- Net cash used in investing activities (22,294) (2,240) -------- -------- Cash flows from financing activities: Proceeds of mortgages and notes payable 36,800 18,400 Dividends to common and preferred shareholders (11,471) (11,514) Principal payments on debt, excluding normal amortization (13,093) (5,513) Principal amortization payments (5,476) (4,902) Change in credit facility borrowing, net (4,500) (9,799) Cash distributions to minority partners (3,113) (3,298) Proceeds from the issuance of common shares, net 539 427 Repurchase of common shares (3,211) (2,483) Other financing activities, net 241 (372) -------- -------- Net cash used in financing activities (3,284) (19,054) -------- -------- Change in cash and cash equivalents (5,709) (2,769) Cash and cash equivalents, at beginning of period 8,837 11,084 -------- -------- Cash and cash equivalents, at end of period $ 3,128 $ 8,315 ======== ========
Supplemental disclosure of non-cash investing and financing activities: During 2000 and 1999, the Company issued 73,800 and 69,850 common shares, respectively, to certain employees and trustees resulting in $664 and $877, respectively, of deferred compensation. These common shares vest ratably over a 2 to 5 year period. During 2000 and 1999, holders of an aggregate of 68,759 and 117,876 partnership units, respectively, redeemed such units for common shares of the Company. This redemption resulted in an increase in shareholders' equity and a corresponding decrease in minority interests of $830 and $1,554, respectively. During 2000, 83,400 partnership units were issued to acquire two real estate asset management contracts valued at $585. During 2000, the Company sold a property and received a $3,067 note which bears interest at 10%. The note subsequently was repaid. During 2000, the Company purchased a property and issued a $3,488 promissory note to the seller. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 (Unaudited and in thousands, except share and 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. The real properties owned by the Company are subject to triple net leases to corporate tenants. The Company was organized in 1993 to combine and continue to expand the business of two affiliated limited partnerships. As of June 30, 2000 the Company had ownership interests in sixty-seven properties and managed an additional twenty-five properties. The Company has qualified as a REIT under the Internal Revenue Code of 1986, as amended. A REIT is generally not subject to Federal income tax on that portion of its real estate investment trust taxable income, which is distributed to its shareholders, provided that at least 95% of taxable income is distributed. Accordingly, no provision for Federal income taxes has been made. The unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the results for the interim periods. For a more complete understanding of the Company's operations and financial position, reference is made to the financial statements previously filed with the Securities and Exchange Commission with the Company's Annual Report on Form 10-K for the year ended December 31, 1999. (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 consolidated subsidiaries, including Lepercq Corporate Income Fund L.P. ("LCIF") and Lepercq Corporate Income Fund II L.P. ("LCIF II"). The Company is the sole general partner and majority limited partner of LCIF and LCIF II. Earnings Per Share. Basic net income per share is computed by dividing net income reduced by preferred dividends 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 the Company's other dilutive securities. The Company's preferred shares are excluded from the six months ended June 30, 2000 computations since they are anti-dilutive. The preferred shares and exchangeable redeemable secured notes are excluded from all 1999 computations since they are anti-dilutive. 6 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, 2000 and 1999.
Three months ended Six months ended June 30, June 30, 2000 1999 2000 1999 ----------- ----------- ----------- ----------- BASIC Net income $ 7,346 $ 4,869 $ 11,817 $ 9,232 Less preferred dividends 630 630 1,260 1,260 ----------- ----------- ----------- ----------- Net income attributed to common shareholders $ 6,716 $ 4,239 $ 10,557 $ 7,972 =========== =========== =========== =========== Weighted average number of common shares outstanding 16,838,967 16,965,118 16,881,301 17,003,654 =========== =========== =========== =========== Net income per common share - basic: $ 0.40 $ 0.25 $ 0.63 $ 0.47 =========== =========== =========== =========== DILUTED Net income attributed to common shareholders $ 6,716 $ 4,239 $ 10,557 $ 7,972 Add incremental income attributed to assumed conversion of dilutive securities 2,752 1,397 3,908 2,843 ----------- ----------- ----------- ----------- Net income attributed to common shareholders $ 9,468 $ 5,636 $ 14,465 $ 10,815 =========== =========== =========== =========== Weighted average number of common shares used in calculation of basic earnings per share 16,838,967 16,965,118 16,881,301 17,003,654 Add incremental shares representing: Shares issuable upon exercise of employee stock options 79,998 14,280 72,604 18,602 Shares issuable upon conversion of dilutive securities 9,680,911 6,148,875 7,651,085 6,169,354 ----------- ----------- ----------- ----------- Weighted average number of shares used in calculation of diluted earnings per common share 26,599,876 23,128,273 24,604,990 23,191,610 =========== =========== =========== =========== Net income per common share - diluted: $ 0.36 $ 0.24 $ 0.59 $ 0.47 =========== =========== =========== ===========
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 financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. Reclassifications. Certain amounts included in the 1999 financial statements have been reclassified to conform with the 2000 presentation. (3) Investments in Real Estate During the six months ended June 30, 2000: (i) The Company purchased a property in Hampton, Virginia leased to Nextel Communications of the Mid-Atlantic, Inc. for $6,700. The lease, which expires January 2010, provides for annual revenues of $719. (ii) The Company purchased a property in Phoenix, Arizona leased to Avnet, Inc. for $23,250. The lease, which expires October 2007, provides for annual revenues of $2,470. The Company sold three properties which are located in Houston, Texas (leased to Toys R Us), Plymouth, Michigan (leased to Johnson Controls, Inc.) and Henderson, North Carolina (leased to Corporate Express Office Products, Inc.) for an aggregate selling price of $19,600. In addition, the Company contributed its property in Herndon, Virginia (leased to NEC America, Inc.) to its joint venture with an institutional partner. The Company realized $4,600 in proceeds for the 7 contribution. The Plymouth and Henderson properties were sold to an affiliate of a Co-Chief Executive Officer of the Company. The Company received a $3,067, 10% note in connection with the Henderson sale. In July 2000, the note was repaid in full. The following unaudited pro forma operating information for the six months ended June 30, 2000 and 1999 has been prepared as if the 2000 and 1999 acquisitions and dispositions had been consummated as of January 1, 1999. The information does not purport to be indicative of what the operating results of the Company would have been had the acquisitions and dispositions been consummated on that date or to be indicative of operating results which can be expected for future periods. The unaudited pro forma amounts are as follows:
Pro forma Six months ended June 30, 2000 1999 ---- ---- Revenues $39,995 $37,948 Net income $ 9,145 $ 8,150 Net income per common share: Basic $ 0.47 $ 0.41 Diluted $ 0.47 $ 0.40
(4) Investments in Joint Ventures The Company's joint venture with an institutional partner has acquired three properties in 2000, including one purchased from the Company, for $70,910, of which $46,021 was funded through non-recourse mortgages which mature in 2010 ($28,221) and 2012 ($17,800) and have a weighted average interest rate of 8.03%. The leases, which expire in August 2009, October 2009 and April 2011, provide for annual rental revenues of approximately $8,083. (5) Minority Interests In conjunction with several of the Company's acquisitions, sellers were given interests in LCIF or LCIF II 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 May 2006. During 2000, LCIF issued 83,400 partnership units to an affiliate of a Co-Chief Executive Officer of the Company to acquire two property management contracts. This resulted in an increase to minority interest of $585. The total number of limited partnership units of LCIF and LCIF II outstanding is 5,774,601. These units, subject to certain adjustments through the date of redemption, require distributions per unit in varying amounts up to $1.24 per annum and have a current average distribution of $1.12 per annum. Minority interests in the accompanying consolidated financial statements include the interests in such partnerships held by parties other than the Company. (6) Mortgages and Notes Payable During the six months ended June 30, 2000 the Company obtained the following non-recourse mortgages: (i) $17,000 mortgage bearing interest at 8.10% secured by its Richmond, Virginia property. The mortgage, which matures February 2010, provides for annual principal and interest payments of approximately $1,510 and a balloon payment at maturity of $15,237. (ii) $4,600 mortgage bearing interest at 8.26% secured by its Hampton, Virginia property. The mortgage, which matures April 2010, provides for annual principal and interest payments of approximately $415 and a balloon payment at maturity of $4,139. (iii) $15,200 mortgage bearing interest at 7.89% secured by its Phoenix, Arizona property. The mortgage, which matures June 2008, provides for annual principal and interest payments of approximately $1,434 and a balloon payment at maturity of $12,713. 8 In addition, the Company obtained seller financing of $3,488 relating to the purchase of the Phoenix, Arizona property. This financing, which matures May 2010, provides for interest only payments of 7.5% through May 2003 and 8% thereafter. (7) Acquisition of Management Contracts During 2000, LCIF acquired through the issuance of 83,400 partnership units, two property management contracts valued at $585. The contracts provide for annual property management fees equal to 1% (estimated to be $150) of rental revenue of two publicly registered partnerships which own single tenant, net lease office, industrial and retail properties. The contracts were acquired from an affiliate of a Co-Chief Executive Officer of the Company. Also an affiliate of the Co-Chief Executive Officer is the general partner of the publicly registered partnerships. The independent members of the Board of Trustees approved this transaction. (8) Subsequent Events The Company declared a $0.31 and $0.3255 dividend on its common and preferred shares, respectively, for shareholders of record on July 31, 2000, payable August 14, 2000. The Company repaid $9,500 of its outstanding credit line borrowings. The Company obtained a $8,500 non-recourse mortgage bearing interest at 190 basis points over 90 day LIBOR (currently at 8.65%) secured by its Marlborough property, which matures August 2005. The Company's note receivable of $3,067 relating to the sale of the Henderson property was repaid in full. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousand, except per share amounts) Forward-Looking Statements When used in this Form 10-Q Report, the words "believes," "expects," "estimates" and similar expressions are 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 failure to continue to qualify as a real estate investment trust, general business and economic conditions, competition, increases in real estate construction costs, change in interest rates, 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 under the Internal Revenue Code of 1986, acquires and manages net-leased commercial properties. As of June 30, 2000, the Company owned sixty-seven real estate properties or interests therein (the "Properties) and managed an additional twenty-five properties. Liquidity and Capital Resources Real Estate Assets. As of June 30, 2000, the Company's real estate assets were located in twenty-nine states and contained an aggregate of approximately 11.6 million square feet of net rentable space. The Properties are subject to tenant 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. All of the Company's Properties are currently leased. During the six months ended June 30, 2000, the Company acquired two properties for $29,950 at an unleveraged average annual yield of 10.65% and sold three properties for $19,600. The Company's principal sources of liquidity are revenue generated from the Properties, asset and acquisition fees generated from joint venture investments and third party management contracts, interest on cash balances, amounts available under its 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, 2000, the leases on the Properties generated approximately $38,318 in revenue compared to $37,535 during the same period in 1999. Dividends. The Company has made quarterly distributions since October 1986 without interruption. The Company paid a dividend of $.27 per share to common shareholders in respect of each of the calendar quarters of 1995 and the first quarter of 1996; $.28 per share in respect of the second and third quarters of 1996; $.29 per share in respect of the fourth quarter of 1996, each of the calendar quarters of 1997 and the first and second quarters of 1998; $0.30 per share in respect of the third and fourth quarters of 1998, each of the calendar quarters of 1999 and the first quarter of 2000. The Company declared a dividend in respect of the second quarter of 2000, in the amount of $.31 per share to shareholders of record as of July 31, 2000 to be paid on August 14, 2000. The Company's annualized dividend rate is currently $1.24 per share. 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 shares of the Company 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, 2000: 10
Current Total Redeemable Annualized Annualized for Shares of Number Per Unit Distribution Common Shares as of: of Units Distribution ($000) -------------------- ----------- ------------ ------------ At any time 3,912,352 $ 1.24 $ 4,851 At any time 1,271,073 1.08 1,373 At any time 133,050 1.12 149 June 2002 83,400 1.24 103 January 2003 17,901 - - March 2004 43,734 0.27 12 March 2004 27,314 - - November 2004 29,976 - - March 2005 29,384 - - January 2006 187,163 - - February 2006 29,886 - - May 2006 9,368 0.29 3 --------- ---- ------ Total 5,774,601 $ 1.12 $ 6,491 ========= ==== ======
Financing Revolving Credit Facility. As of June 30, 2000, the amount outstanding on the Company's credit facility was $66,421, bore interest at 7.67% per annum and had $9,131 available for additional borrowings. Debt Service Requirements. The Company's principal liquidity needs are the payment of interest and principal on outstanding mortgage debt. As of June 30, 2000, a total of forty-eight properties were subject to outstanding mortgages, which had an aggregate principal amount of $304,131. The weighted average interest rate on the Company's mortgages and notes payable, including line of credit borrowings, on such date was approximately 7.76%. Lease Obligations. Since the Company's tenants bear all or substantially all of the cost of property maintenance and capital improvements, the Company does not anticipate significant needs for cash for property maintenance or repairs. The Company generally funds property expansions with additional secured borrowings, the repayment of which is funded out of rental increases under the leases covering the expanded properties. Results of Operations ($000)
Three months ended Six months ended June 30, June 30, Increase Increase Selected Income Statement Data 2000 1999 (Decrease) 2000 1999 (Decrease) ------- ------- ---------- ------- ------- ---------- Total revenues $20,033 $18,950 $ 1,083 $39,643 $38,111 $ 1,532 Rental 19,298 18,673 625 38,318 37,535 783 Equity in earnings from joint ventures 231 -- 231 633 -- 633 Interest and other 504 277 227 692 576 116 Total expenses 13,679 13,332 347 27,487 26,628 859 Interest 7,221 6,991 230 14,655 14,132 523 Depreciation & amortization of real estate 4,367 4,461 (94) 8,793 8,900 (107) General & administrative 1,312 1,186 126 2,598 2,196 402 Property operating 399 452 (53) 768 915 (147) Net Income 7,346 4,869 2,477 11,817 9,232 2,585
The increase in rental revenues were primarily due to the growth of the portfolio. The formation of real estate joint ventures in the third and fourth quarter of 1999 is responsible for the increase in the equity in earnings from joint ventures. The increase in interest and other income relates primarily to interest income earned on notes receivable from two property sales coupled with increase rates 11 on overnight investments of available cash. The increase in interest expense is due to the growth of the Company's portfolio which is partially funded through increased leverage along with an increase in the average borrowing rate. The increase in general and administrative expenses is primarily due to the addition of personnel in the second half of 1999 to support the growth of the Company's advisory business, coupled with the commencement of the amortization of the Company's accounting software systems and increased professional fees. The reduction in property operating expense is the result of the portfolio being 100% occupied in 2000 compared with one vacancy in 1999. Funds From Operations Management believes that Funds From Operations enhances an investor's understanding of the Company's financial condition, results of operations and cash flows and believes it is an appropriate performance measure for an equity REIT which provides an indication of a REIT's ability to make cash distributions. Funds From Operations is defined 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's method of calculating Funds From Operations excludes other non-recurring revenue and expense items and may be different from methods used by other REITs and, accordingly, is not comparable to such other REITs. Funds From Operations 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 GAAP, or as a measure of liquidity to other consolidated income or cash flow statement data as determined in accordance with GAAP. The following table reflects the calculation of the Company's Funds From Operations and cash flow activities for the three and six months ended June 30, 2000 and 1999 ($000).
Three months ended Six months ended June 30, June 30, 2000 1999 2000 1999 ---- ---- ---- ---- Net income $ 7,346 $ 4,869 $ 11,817 $ 9,232 Adjustments: Depreciation and amortization of real estate 4,367 4,461 8,793 8,900 Gain on sale of properties (2,662) (698) (2,662) (698) Minority interest's share of net income 1,622 1,397 2,908 2,843 Amortization of lease costs 134 -- 167 -- Deemed conversion of notes payable 500 -- 582 -- Joint venture adjustment 448 -- 845 -- ------------ ----------- ------------ ------------ Funds From Operations $ 11,755 $ 10,029 $ 22,450 $ 20,277 ============ =========== ============ ============ Cash flows from operating activities $ 10,989 $ 9,302 $ 19,869 $ 18,525 Cash flows from investing activities (8,159) 5,280 (22,294) (2,240) Cash flows from financing activities (353) (13,293) (3,284) (19,054)
The Company's aggregate dividends paid to shareholders and distributions paid to unit holders amounted to 70.1% and 74.1% of the Company's Funds From Operations for the six months ended June 30, 2000 and 1999, respectively. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's exposure to market risk relates to its variable rate unsecured credit facility. As of June 30, 2000 and 1999, the Company's variable rate indebtedness represented 17.8% and 11.7%, respectively, of total long-term indebtedness. During the three and six months ended June 30, 2000 and 1999, this variable rate indebtedness had a weighted average interest rate of 7.68% and 7.60% and 6.62% and 6.33%, respectively. Had the weighted average interest rate been 100 basis points higher the Company's net income would have been reduced by $175 and $352 and $124 and $242 for the three and six months ended June 30, 2000 and 1999, respectively. 12 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings - not applicable. ITEM 2. Changes in Securities - not applicable. ITEM 3. Defaults under the 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 24, 2000, the following action was taken: The shareholders elected the seven individuals nominated to serve as trustees of the Company until the 2001 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 seven individuals elected, and the number of votes cast for, or withheld, with respect to each of them, follows:
For Withheld --- -------- E. Robert Roskind 15,634,324 657,799 Richard J. Rouse 15,636,523 655,600 T. Wilson Eglin 15,788,084 504,039 Carl D. Glickman 15,868,066 424,057 Kevin W. Lynch 16,034,743 257,380 John D. McGurk 15,888,593 403,530 Seth M. Zachary 15,852,648 439,475
ITEM 5. Other Information - not applicable. ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits -
Exhibit No. Exhibit ----------- ------- 27 Financial Data Schedule as of and for the six months ended June 30, 2000
(b) Reports on Form 8-K filed during the quarter ended June 30, 2000. None. 13 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 14, 2000 By:/S/E.Robert Roskind ------------------------- ----------------------------------- E. Robert Roskind Chairman and Co-Chief Executive Officer Date: August 14, 2000 By:/S/Patrick Carroll ------------------------- ----------------------------------- Patrick Carroll Chief Financial Officer and Treasurer