EX-99 2 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 [FINANCIAL RELATIONS BOARD LOGO] [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 FEBRUARY 16, 2006 LEXINGTON CORPORATE PROPERTIES TRUST ANNOUNCES FOURTH QUARTER AND TWELVE MONTH RESULTS New York, NY - February 16, 2006 - Lexington Corporate Properties Trust (NYSE:LXP) ("Lexington"), a real estate investment trust, today announced results for its fourth quarter and twelve months ended December 31, 2005. 2005 Significant Events ----------------------- o 6.3% increase in Funds From Operations ("FFO") per share; o Acquired 43 properties (18 in joint ventures) for $1.1 billion at an average GAAP cap rate of 8.1%; o Sold eight properties, including one in a joint venture, realizing $13.3 million in gains; o Obtained an aggregate $840.3 million of non-recourse mortgage financings, including $403.2 million in joint ventures, secured by 50 properties at a weighted-average fixed interest rate of 5.20%; o Extended/entered into new leases on 14 properties; o Recognized $13.0 million in aggregate impairment charges; o Formed Lexington Strategic Asset Corp., raising $61.7 million in cash and contributed four properties, including mortgages, for a 32.3% interest; o Invested $22.9 million to acquire a $30 million subordinated interest in $68.4 million of mortgage debt; and o Increased dividend per share in January, 2006 for the 13th consecutive year. Quarterly Results FFO were $16.8 million, or $0.27 per diluted common share/unit, net of $12.1 million in impairment charges and $0.9 million in debt satisfaction charges, which inclusive of charges aggregated $0.21 per diluted common share/unit, for the fourth quarter of 2005. This compares to $18.5 million, or $0.34 per diluted common share/unit, after the impact of $3.6 million in impairment charges and $2.9 million in charges due to a tenant bankruptcy, which inclusive of charges aggregated $0.12 per diluted common share/unit, for the fourth quarter of 2004. MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 1 Rental revenues from continuing operations for the quarter totaled $49.0 million, compared to rental revenues of $34.7 million for the same period last year. Net loss allocable to common shareholders was $5.9 million in the fourth quarter of 2005, or $(0.11) per diluted common share/unit, after the impact of $4.9 million in gains on sale of properties, $12.1 million in impairment charges and $0.9 million in debt satisfaction charges. This compares to net income allocable to common shareholders of $4.9 million, or $0.09 per diluted common share/unit, after $1.4 million in gains on sales of properties, $3.6 million in impairment charges and $2.9 million in charges due to a tenant bankruptcy for the same period last year. Net loss allocable to common shareholders in 2005 has also been impacted by the convertible preferred share offering completed by Lexington in the fourth quarter of 2004 and first quarter of 2005. The property that the Company recognized the $12.1 million impairment charge for is subject to an $11.9 million non-recourse mortgage. The Company has notified the lender of its intent to effect a deed-in-lieu to satisfy this mortgage. Upon completion of the deed-in-lieu the Company will recognize a gain for the difference between the mortgage balance and the carrying value of the property. Currently that gain approximates $5.9 million. Twelve Month Results For the twelve months ended December 31, 2005, FFO were $104.2 million, or $1.70 per diluted common share/unit, after $3.0 million in net debt satisfaction gains including $0.7 million in a debt satisfaction loss recognized by a joint venture and $13.0 million in impairment charges, which inclusive of such gains and charges aggregated $0.16 per diluted common share/unit, compared to $83.6 million, or $1.60 per diluted common share/unit, after $6.7 million in aggregate impairment charges and $2.9 million in charges due to a tenant bankruptcy, which inclusive of charges aggregated $0.19 per diluted common share/unit, for the same period last year. Rental revenues from continuing operations for the twelve months ended December 31, 2005, totaled $180.9 million, compared to rental revenues of $133.1 million for the same period last year. Net income allocable to common shareholders for the twelve months ended December 31, 2005, was $16.3 million, or $0.33 per diluted common share/unit, after $13.3 million of gains on sales of properties, including a joint venture sale, and the net debt satisfaction gains and net impairment charges discussed above, compared to $37.9 million, or $0.80 per diluted common share/unit, after the impairment charges and tenant bankruptcy discussed above and $5.5 million of gains on sales of properties, for the same period last year. Net income allocable to common shareholders in 2005 has also been impacted by the convertible preferred share offering completed by Lexington in the fourth quarter of 2004 and first quarter of 2005. Comments From Management T. Wilson Eglin, Chief Executive Officer, said, "Operating results for the fourth quarter of 2005 improved considerably compared to the prior year. Funds from operations per share excluding one-time items were $0.48 per share - the midpoint of our guidance - compared to $0.46 per share in the fourth quarter of 2004, an increase of about 5%. The stronger operating results were primarily a result of acquisition activity, which totaled $1.1 billion in 2005. In November, we signed our 14th lease of 2005 and were pleased to finish the year with 98.3% occupancy. Demand for income-producing properties such as those in our portfolio continues to be exceptionally strong. While this has made it difficult to acquire properties that meet our yield parameters, it also means that we have opportunities to sell properties on advantageous terms as evidenced by total gains of $13.3 million in 2005. In the MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 2 first quarter of 2006, we believe acquisition volume will be modest. Nevertheless, we anticipate that funds from operations will be $0.47-$0.49 per share before the impact of debt satisfaction items." 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 800-218-8862. A replay of the conference call will be available through February 23, 2006. The toll-free telephone number for the replay is 800-405-2236, passcode 11050477. International callers can access the conference call by dialing 303-275-2170 and the replay by dialing 303-590-3000 (same passcode). The conference call can also be accessed on the internet at http://www.lxp.com. 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 common shares closed Wednesday, February 15, 2006 at $21.73 per share. Lexington 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 believes that FFO is an appropriate, but limited, measure of the performance of an equity REIT. 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." 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 GAAP, or as a measure of liquidity to other consolidated income or cash flow statement data as determined in accordance with GAAP. 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 MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 3 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data)
Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- Gross revenues: Rental $ 49,043 $ 34,714 $ 180,871 $ 133,050 Advisory fees 1,180 1,710 5,365 4,885 Tenant reimbursements 3,702 1,471 10,896 5,429 ---------- ---------- ---------- ---------- Total gross revenues 53,925 37,895 197,132 143,364 Expense applicable to revenues: Depreciation and amortization (20,909) (11,770) (70,906) (38,928) Property operating (7,537) (3,035) (23,494) (10,756) General and administrative (4,441) (3,878) (17,612) (13,877) Impairment loss (12,050) (3,584) (12,050) (3,584) Non-operating income 330 710 1,519 3,272 Interest and amortization expense (18,309) (11,839) (65,065) (44,857) Debt satisfaction (charges) gain, net (222) (56) 4,409 (56) Write-off - tenant bankruptcy - (2,884) - (2,884) ---------- ----------- ---------- ----------- (Loss) income before benefit (provision) for income taxes, minority interests, equity in earnings of non-consolidated entities and discontinued operations (9,213) 1,559 13,933 31,694 Benefit (provision) for income taxes 105 635 150 (1,181) Minority interests 963 377 (2,111) (2,414) Equity in earnings of non-consolidated entities 1,132 1,811 6,220 7,194 ---------- ---------- ---------- ---------- (Loss) income from continuing operations (7,013) 4,382 18,192 35,293 ----------- ---------- ---------- ---------- Discontinued operations, net of minority interest: Income from discontinued operations 1,041 1,273 4,479 6,830 Debt satisfaction charges (671) -- (725) -- Impairment charges (29) (16) (829) (2,791) Gains on sales of properties 4,922 1,410 11,578 5,475 ---------- ---------- ---------- ---------- Total discontinued operations 5,263 2,667 14,503 9,514 ---------- ---------- ---------- ---------- Net (loss) income (1,750) 7,049 32,695 44,807 Dividends attributable to preferred shares - Series B (1,590) (1,590) (6,360) (6,360) Dividends attributable to preferred shares - Series C (2,519) (585) (10,075) (585) ----------- ----------- ----------- ----------- Net (loss) income allocable to common shareholders $ (5,859) $ 4,874 $ 16,260 $ 37,862 =========== ========== ========== ========== Funds from operations(1) $ 16,796 $ 18,514 $ 104,150 $ 83,642 ========== ========== ========== ========== Per share/unit Basic net (loss) income $ (0.11) $ 0.10 $ 0.33 $ 0.81 Diluted net (loss) income $ (0.11) $ 0.09 $ 0.33 $ 0.80 Funds from operations(1)-basic $ 0.27 $ 0.34 $ 1.71 $ 1.60 Funds from operations(1)-diluted $ 0.27 $ 0.34 $ 1.70 $ 1.60
MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 4 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands)
12/31/05 12/31/04 -------- -------- Real estate, at cost $ 1,883,115 $ 1,407,872 Accumulated depreciation (241,188) (180,610) Investment in joint ventures 191,146 132,738 Properties held for sale - discontinued operations 49,397 13,216 Intangible assets, net 128,775 54,736 Cash and cash equivalents 53,515 146,957 Deferred expenses, net 13,582 7,860 Rent receivable 7,673 4,123 Rent receivable - deferred 24,778 23,923 Due from affiliates -- 45,800 Other assets 49,439 40,471 ------------- -------------- $ 2,160,232 $ 1,697,086 ============= ============== Mortgages and notes payable $ 1,139,971 $ 765,144 Liabilities - discontinued operations 32,145 1,688 Other liabilities 25,380 22,387 Prepaid rent 10,054 3,818 Minority interests 61,372 56,759 Shareholders' equity 891,310 847,290 ------------- -------------- $ 2,160,232 $ 1,697,086 ============= ============== Common shares 52,155,855 48,621,273 Preferred shares - Series B 3,160,000 3,160,000 Preferred shares - Series C 3,100,000 2,700,000 Operating partnership units 5,720,071 5,408,699 ------------- -------------- 64,135,926 59,889,972 ============= ==============
1 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. 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." 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 GAAP, or as a measure of liquidity to other consolidated income or cash flow statement data as determined in accordance with GAAP. MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 5 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES EARNINGS PER SHARE AND FUNDS FROM OPERATIONS PER SHARE (dollars in thousands, except per share data)
Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- Earning Per Share ----------------- Basic (Loss) income from continuing operations $ (7,013) $ 4,382 $ 18,192 $ 35,293 Less preferred dividends (4,109) (2,175) (16,435) (6,945) --------------- --------------- --------------- -------------- (Loss) income allocable to common shareholders from continuing operations - basic (11,122) 2,207 1,757 28,348 Total income from discontinued operations - basic 5,263 2,667 14,503 9,514 --------------- --------------- --------------- -------------- Net (loss) income allocable to common shareholders - basic $ (5,859) $ 4,874 $ 16,260 $ 37,862 =============== ============== ============== ============== Weighted average number of common shares outstanding 51,516,136 48,092,092 49,835,773 46,551,328 =============== ============== ============== ============== Per share data: (Loss) income from continuing operations $ (0.21) $ 0.05 $ 0.04 $ 0.61 Income from discontinued operations 0.10 0.05 0.29 0.20 --------------- --------------- --------------- -------------- Net (loss) income $ (0.11) $ 0.10 $ 0.33 $ 0.81 =============== ============== ============== ============== Diluted (Loss) income allocable to common shareholders from continuing operations-basic $ (11,122) $ 2,207 $ 1,757 $ 28,348 Adjustments: Incremental (loss) income attributed to assumed conversion of dilutive securities -- (377) -- 2,416 --------------- --------------- --------------- -------------- (Loss) income allocable to common shareholders from continuing operations-diluted (11,122) 1,830 1,757 30,764 Total income from discontinued operations - diluted 5, 263 3,224 14,503 10,851 --------------- --------------- --------------- -------------- Net (loss) income allocable to common shareholders - diluted $ (5,859) $ 5,054 $ 16,260 $ 41,615 =============== ============== ============== ============== Weighted average number of shares used in calculation of basic earnings per share 51,516,136 48,092,092 49,835,773 46,551,328 Add incremental shares representing: Shares issuable upon exercises of employee share options -- 126,179 66,876 131,415 Shares issuable upon conversion of dilutive interests -- 5,390,583 -- 5,366,166 --------------- --------------- --------------- -------------- Weighted average number of shares used in calculation of diluted earnings per common share 51,516,136 53,608,854 49,902,649 52,048,909 =============== ============== ============== ============== Per share data: (Loss) income from continuing operations - diluted $ (0.21) $ 0.03 $ 0.04 $ 0.59 Income from discontinued operations - diluted 0.10 0.06 0.29 0.21 --------------- --------------- --------------- -------------- Net (loss) income - diluted $ (0.11) $ 0.09 $ 0.33 $ 0.80 =============== ============== ============== ==============
MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 6 LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES EARNINGS PER SHARE AND FUNDS FROM OPERATIONS PER SHARE (dollars in thousands, except per share data)
Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- Funds From Operations --------------------- Basic and Diluted ----------------- Net (loss) income allocable to common share- holders - basic $ (5,859) $ 4,874 $ 16,260 $ 37,862 Adjustments: Depreciation and amortization 20,793 12,020 71,044 39,894 Minority interests-OP Units (1,145) (311) 1,910 2,570 Amortization of leasing commissions 152 98 547 647 Joint venture adjustment-depreciation 5,258 2,658 17,632 7,559 Preferred dividends-Series C 2,519 585 10,075 585 Gains on sale of properties (4,922) (1,410) (11,578) (5,475) Gains on sale of properties - Joint Venture -- -- (1,740) -- ------------- ------------- ------------- ------------- Funds from operations $ 16,796 $ 18,514 $ 104,150 $ 83,642 ============= ============= ============= ============= Basic ----- Weighted average shares outstanding-basic EPS 51,516,136 48,092,092 49,835,773 46,551,328 Operating partnership units 5,599,763 5,390,583 5,433,955 5,366,166 Preferred shares - Series C 5,779,330 1,313,116 5,779,330 330,073 ------------- ------------- ------------- ------------- Weighted average shares outstanding-basic FFO 62,895,229 54,795,791 61,049,058 52,247,567 ============= ============= ============= ============= FFO per share $ 0.27 $ 0.34 $ 1.71 $ 1.60 ============= ============= ============= ============= Diluted ------- Weighted average shares outstanding-diluted EPS 51,516,136 53,608,854 49,902,649 52,048,909 Common share options 43,117 -- -- -- Operating partnership units 5,599,763 -- 5,433,955 -- Preferred shares - Series C 5,779,330 1,313,116 5,779,330 330,073 ------------- ------------- ------------- ------------- Weighted average shares outstanding-diluted FFO 62,938,346 54,921,970 61,115,934 52,378,982 ============= ============= ============= ============= FFO per share $ 0.27 $ 0.34 $ 1.70 $ 1.60 ============= ============= ============= =============
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