-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M9QQ5L+ExJ1UHTUjoCFzNt9hP7Vjo03I9tcmI2u5DMp4oSWU2kTSpz32/yJ/Pm5e 7ggownRetTgKeYL0TvH2lg== 0001116679-06-001840.txt : 20060801 0001116679-06-001840.hdr.sgml : 20060801 20060731183339 ACCESSION NUMBER: 0001116679-06-001840 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060801 DATE AS OF CHANGE: 20060731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXINGTON CORPORATE PROPERTIES TRUST CENTRAL INDEX KEY: 0000910108 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 133717318 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12386 FILM NUMBER: 06992273 BUSINESS ADDRESS: STREET 1: 355 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126927260 MAIL ADDRESS: STREET 1: 355 LEXINGTON AVE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: LEXINGTON CORPORATE PROPERTIES INC DATE OF NAME CHANGE: 19930816 8-K 1 lex8k-080106.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Date of report (Date of earliest event reported) July 27, 2006                                                                        

 

Lexington Corporate Properties Trust

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

 

1-12386

13-3717318

(Commission File Number)

(IRS Employer Identification No.)

 

One Penn Plaza, Suite 4015

 

New York, New York

10119-4015

(Address of Principal Executive Offices)

(Zip Code)

 

(212) 692-7200

(Registrant’s Telephone Number, Including Area Code)

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

ý

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


 

Item 2.02.

Results of Operations and Financial Conditions.

 

On July 27, 2006, Lexington Corporate Properties Trust (the “Trust”) issued a press release announcing its financial results for the quarter and six months ended June 30, 2006 (the “Press Release”). A copy of the Press Release is furnished herewith as Exhibit 99.1.

 

The information furnished pursuant to this “Item 2.02 Results of Operations and Financial Condition,” including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Trust under the Securities Act of 1933, as amended (the “Act”), or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 7.01.

Regulation FD Disclosure.

 

On July 27, 2006, the Trust made available supplemental information (the “Supplemental Reporting Package”) concerning its operations and portfolio for the quarter and six months ended June 30, 2006. A copy of this supplemental information is furnished herewith as Exhibit 99.2.

 

Also on July 27, 2006, the management of the Trust discussed the financial results and the Trust’s business plan, including the previously announced merger with Newkirk Realty Trust, Inc., on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.3.

 

The information furnished pursuant to this “Item 7.01 Regulation FD Disclosure,” including Exhibits 99.2 and 99.3, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Trust under the Act or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

 

(a)

Not applicable

 

(b)

Not applicable

 

(c)

Exhibits

 

99.1

Press Release issued July 27, 2006.

99.2

Supplemental Reporting Package for the quarter and six months ended
June 30, 2006.

99.3

Transcript of conference call held on July 27, 2006.

 

 

 


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 hereunto duly authorized.

Lexington Corporate Properties Trust

 

 

Date: August 1, 2006

By:

/s/ Patrick Carroll                                

 

Patrick Carroll

 

 

Chief Financial Officer

 

 

 

 

 


Exhibit Index

 

99.1

Press Release issued July 27, 2006.

99.2

Supplemental Reporting Package for the quarter and six months ended June 30, 2006.

99.3

Transcript of conference call held on July 27, 2006.

 

 

 EX-99 2 ex99-1.txt EXHIBIT 99.1: PRESS RELEAS 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 MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 1 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. MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 2 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. MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 3 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 4 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
MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 5 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. MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 6 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 ============ ============ ============ ============
MORE LEXINGTON CORPORATE PROPERTIES TRUST ADD 7 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 ============ ============ ============ ============
### EX-99 3 ex99-2.txt EXHIBIT 99.2: SUPPLEMENTAL REPORTING PACKAGE Exhibit 99.2 LEXINGTON CORPORATE PROPERTIES TRUST SUPPLEMENTAL REPORTING PACKAGE For the six months ended June 30, 2006 Table of Contents Income Statements.............................................. 1 Balance Sheets................................................. 2 Combined Joint Venture Income Statement........................ 3 Second Quarter Transaction Summary............................. 4 First Quarter Transaction Summary ............................. 5 Property Holdings.............................................. 6 Properties by Location......................................... 17 Lease Rollover Schedules....................................... 18 Mortgages and Notes Payable.................................... 20 Revenue by Tenant Industry..................................... 26 Revenue by MSA................................................. 27 Other Revenue Data............................................. 29 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 (1,173) (1,468) (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
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. 2 LEXINGTON CORPORATE PROPERTIES TRUST JOINT VENTURE PROPORTIONATE SHARE COMBINED CONDENSED STATEMENT OF INCOME (dollars in thousands) Three Months Ended Six Months Ended June 30, 2006 June 30, 2006 ------------- ------------- Gross revenues $ 11,622 $ 24,417 ------ ------ Depreciation and amortization (5,397) (10,695) Interest and amortization (4,617) (9,109) Other income and expenses, net (1,058) (3,085) Expenses (11,072) (22,889) Net income $ 550 $ 1,528 === ===== 3 LEXINGTON CORPORATE PROPERTIES TRUST 2006 Second Quarter Transaction Summary ($000's)
Acquisitions Average Current Annual Average Annual Current Property Capitalized GAAP GAAP Cash Cash Lease Tenants/Guarantors Location Type Costs Rent, net Yield Rent, net Yield Term - ------------------ -------- ---- ----- --------- ----- --------- ----- ---- Haggar Clothing Corporation (1) Dallas, TX Office $28,340 $2,272 8.0% $2,083 7.4% 04-16 American Golf Corporation (2) Oklahoma Specialty 5,294 475 9.0 475 9.0 12-17 City, OK Montgomery County Management LLC (2) Houston , TX Office 10,010 807 8.1 718 7.2 10-19 Corning, Inc. (1) Erwin, NY Industrial 13,399 1,084 8.1 1,084 8.1 07-16 Bay Valley Foods, LLC (2) Plymouth, IN Industrial 8,984 802 8.9 763 8.5 06-15 ----- ------ --- ----- --- $66,027 $5,440 8.2% $5,123 7.8% ====== ===== ==== ===== ==== Dispositions Property Tenants/Guarantors Location Type Net Sale Price Net Book Value - ------------------ -------- ---- -------------- -------------- Associated Grocers of Florida, Inc. Ocala, FL Industrial $28,972 $18,694 Physical Fitness Center of Philadelphia, Voorhees, NJ Retail 5,950 3,238 Inc. (Bally Total Fitness Corp.) Stone Container Corporation Columbia, SC Industrial 5,628 4,607 Vacant(4) Phoenix, AZ Office 4,284 4,011 Vacant(3) Milpitas, CA Office -- -- -------- -------- $44,834 $ 30,550 ====== ====== New Leases Property Previous Extended Rent Per Tenants/Guarantors Location Type Term Term Annum Square Feet - ------------------ -------- ---- ---- ---- ----- ----------- FTJ FundChoice, LLC Hebron, KY Office -- 09-12 $ 52 9,164 WM Wright Co. (1) Antioch, TN Industrial -- 03-21 1,016 338,700 New Financings Tenants/Guarantors Location Amount Rate Maturity Date - ------------------ -------- ------ ---- ------------- Montgomery County Management LLC (2) Houston, TX $7,500 6.51% 11/19 Haggar Clothing Corporation (1) Dallas, TX 18,363 6.10% 07/16 Oce Printing Systems USA, Inc. Boca Raton, FL 20,400 6.47% 02/20 ------ ----- $46,263 6.33% Mortgage Investment Borrower Location Face Rate Effective Rate Invested Amount Face Amount - -------- -------- --------- -------------- --------------- ----------- Northwestern Holding Corp. Southfield, MI 4.55% 7.50% $11,151 $13,027 Bankruptcy Claim Receipts Tenants Location Claim Proceeds - ------- -------- -------------- Dana Corporation (1) Antioch, TN $ 5,680 Dana Corporation Farmington Hills, MI 5,376 ----- $11,056
(1) The Company has a 30% interest in this property. (2) The Company has a 32.3% interest in this property. (3) The Company completed a foreclosure with lender resulting in a $6,289 gain. (4) The Company sold a sub-divided portion of the property, remaining parcel under contract for sale. 4 LEXINGTON CORPORATE PROPERTIES TRUST 2006 First Quarter Transaction Summary ($000's)
Acquisitions Average Current Annual Average Annual Current Property Capitalized GAAP GAAP Cash Cash Lease Tenants/Guarantors Location Type Costs Rent, net Yield Rent, net Yield Term - ------------------ -------- ---- ----- --------- ----- --------- ----- ---- AS Watson(1) Renswoude, The Netherlands Office $ 39,291 $ 2,294 5.8% $ 2,851 7.3% 12-11 & 06-18 Dana Corporation(2) Crossville, TN Industrial 4,776 460 9.6 460 9.6 08-16 --------- -------- --- ------- --- $ 44,067 $ 2,754 6.2% $ 3,311 7.5% ========= ======== ===== ======= ===== Dispositions Property Tenants/Guarantors Location Type Net Sale Price Net Book Value - ------------------ -------- ---- -------------- -------------- The Dial Corporation Scottsdale, AZ Office $ 22,563 $ 22,314 Bally Total Fitness Corp. Countryside, IL Retail 5,698 3,293 --------- --------- $ 28,261 $ 25,607 ========= ========= New Leases Property Previous Extended Rent Per Tenants/Guarantors Location Type Term Term Annum Square Feet - ------------------ -------- ---- ---- ---- ----- ----------- The Visiting Nurse Association of Texas Dallas, TX Office -- Jun-16 $ 615 48,027 New Financings Tenants/Guarantors Location Amount Rate Maturity Date - ------------------ -------- ------ ---- ------------- Harbor Freight Tools USA, Inc. Dillon, SC $ 23,750 5.97% Feb-22 (i) Structure, LLC (Infocrossing, Inc.)(2) Omaha, NE 9,000 5.61 Apr-16 (i) Structure, LLC (Infocrossing, Inc.)(2) Tempe, AZ 8,500 5.61 Apr-16 AS Watson(1) Renswoude, The 33,136 5.31 Apr-11 Netherlands -------- ---- $ 74,386 5.59% ======== =====
(1) Lexington has a 90% interest in this property. (2) Lexington has a 32.3% interest in this property. 5 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
------------------------------ ---------------------------- ------------- -------------- -------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage ------------------------------ ---------------------------- ------------- -------------- -------------- Office ------ 295 Chipeta Way Northwest Pipeline Corp. $ 3,161 $ 3,161 295,000 Salt Lake City, UT 10001 Richmond Avenue Baker Hughes, Inc. 2,781 3,688 554,385 Houston, TX 6303 Barfield Road & 859 Internet Security Systems, 3,141 3,028 289,000 Mount Vernon Hwy. Inc. Atlanta, GA 1701 Market Street Morgan Lewis & Bockius 2,423 2,428 322,317 Philadelphia, PA LLP(1)(3) 3480 Stateview Blvd. Wells Fargo Bank N.A. 1,602 1,725 169,218 Fort Mill, SC 33 Commercial Street Invensys Systems, Inc. 1,653 1,653 164,689 Foxboro, MA (Siebe, Inc.) 3476 Stateview Boulevard Wells Fargo Home 1,440 1,511 169,083 Fort Mill, SC Mortgage, Inc. 9950 Mayland Drive Circuit City Stores, Inc. 1,430 1,396 288,562 Richmond, VA 1415 Wyckoff Road New Jersey Natural Gas Co. 1,462 1,462 157,511 Wall Township, NJ 2750 Monroe Boulevard Quest Diagnostics, Inc. 1,248 1,277 109,281 Valley Forge, PA 700 Oakmont Lane North American Van Lines, Inc. 1,216 1,285 269,715 Westmont, IL (SIRVA, Inc.) 70 Mechanic Street Invensys Systems, Inc. 1,465 1,281 251,914 Foxboro, MA (Siebe, Inc.) 13651 McLearen Road Boeing North American 1,366 1,233 159,664 Herndon, VA Services, Inc. (The Boeing Company) 1311 Broadfield Blvd. Transocean, Inc. 1,142 1,138 103,260 Houston, TX Newpark Resources, Inc. 565 568 52,731 601 & 701 Experian Pkwy. TRW Inc. (Experian 1,861 1,687 292,700 Dallas, TX Information Solutions, Inc.) 2211 South 47th Street Avnet, Inc. 1,103 1,130 176,402 Phoenix, AZ 5600 Broken Sound Blvd Oce Printing Systems USA, 1,006 1,123 143,290 Boca Raton, FL Inc. 4200 RCA Boulevard The Wackenhut Corp. 1,090 1,084 114,518 Palm Beach Gardens, FL 701 Brookfield Parkway Verizon Wireless 1,004 1,033 192,884 Greenville, SC 19019 No. 59th Avenue Honeywell, Inc. 1,001 990 252,300 Glendale, AZ
6 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
-------------------------------- ---------------------------- -------------- ------------- --------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage -------------------------------- ---------------------------- -------------- ------------- --------------- 4201 Marsh Lane Carlson Restaurants 934 988 130,000 Carrollton, TX Worldwide, Inc. 12645 W. Airport Road Baker Hughes, Inc. 878 971 165,836 Sugar Land, TX 26210 and 26220 Enterprise Apria Healthcare Group, 874 896 100,012 Court Inc. Lake Forest, CA 10475 Crosspoint Blvd. John Wiley & Sons, Inc. 1,198 1,198 141,047 Fishers, IN 2210 Enterprise Drive Washington Mutual Home 875 849 177,747 Florence, SC Loan, Inc. 27404 Drake Road Vacant (4) 971 908 111,454 Farmington Hills, MI 200 Executive Blvd. S Hartford Fire Insurance 840 812 153,364 Southington, CT Co. 810-820 Gears Road IKON Office Solutions, 1,114 1,126 157,790 Houston, TX Inc. 1600 Eberhardt Road Nextel of Texas 750 779 108,800 Temple, TX 2999 SW 6th St. Voice Stream PCS I LLC 668 776 77,484 Redmond, OR (T-Mobile USA, Inc.) 160 Clairemont Avenue Allied Holdings, Inc. 839 765 112,248 Decatur, GA 27016 Media Center Drive Playboy Enterprises, Inc. 670 629 63,049 Los Angeles, CA Sony Electronics, Inc. 131 136 20,203 2800 Waterford Lake Dr. Alstom Power, Inc. 893 1,007 99,057 Richmond, VA 26555 Northwestern Highway Federal-Mogul Corporation 579 709 187,163 Southfield, MI 10419 North 30th Street Time Customer Service, Inc. 736 705 132,981 Tampa, FL (Time, Inc.) 250 Rittenhouse Circle Jones Apparel Group 633 693 255,019 Bristol, PA USA, Inc. (Jones Apparel Group, Inc.) 8555 South River Pkwy. ASM Lithography Holding 1,065 921 95,133 Tempe, AZ NV 400 Butler Farm Road Nextel Communications of 658 651 100,632 Hampton, VA the Mid-Atlantic, Inc. (Nextel Finance Company) 16676 Northchase Dr. Kerr-McGee Corporation 775 813 101,111 Houston, TX 6200 Northwest Pkwy. PacifiCare Health Systems, 820 810 142,500 San Antonio, TX Inc.
7 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
------------------------------ ----------------------------- ---------------- ------------- ---------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage ------------------------------ ----------------------------- ---------------- ------------- ---------------- 5757 Decatur Blvd. Allstate Insurance Co. 623 774 84,200 Indianapolis, IN Holladay Property Services 37 37 5,756 4000 Johns Creek Pkwy. Kraft Foods N.A., Inc. 669 693 73,264 Atlanta, GA PerkinElmer Instruments 105 116 13,955 LLC 6455 State Hwy 303 NE Nextel West Corporation 499 556 60,200 Bremerton, WA 270 Billerica Road Cadence Design Systems 507 533 100,000 Chelmsford, MA 2550 Interstate Dr. AT&T Wireless Services, 715 724 81,859 Harrisburg, PA Inc. 180 Rittenhouse Circle Jones Apparel Group 472 485 96,000 Bristol, PA USA, Inc. (Jones Apparel Group, Inc.) 2529 West Thorns Drive Baker Hughes, Inc. 348 423 65,500 Houston, TX 12000 Tech Center Drive Kelsey-Hayes Company 387 412 80,230 Livonia, MI 2401 Cherahala Boulevard Advance PCS, Inc. 393 411 59,748 Knoxville, TN 1275 NW 128th Street Principal Life Insurance 400 387 61,180 Clive, IA Company 13430 N. Black Canyon Freeway Bull HN Information 392 418 69,492 Phoenix, AZ Systems, Inc. Associated Billing - 128 17,767 Services, LLC VACANT - - 49,799 12600 Gateway Blvd. Gartner, Inc. 498 526 62,400 Fort Meyers, FL 421 Butler Farm Road Nextel Communications of 369 360 56,515 Hampton, VA the Mid-Atlantic, Inc. (Nextel Finance Company) 3940 South Teller St. Travelers Express, Inc. 545 433 68,165 Lakewood, CO 100 Barnes Road Minnesota Mining and 291 303 44,400 Wallingford, CT Manufacturing Company 1440 East 15th Street Cox Communications, Inc. 232 228 28,591 Tucson, AZ 250 Turnpike Road Honeywell Consumer 229 229 57,698 Southborough, MA Products 11555 University Blvd. Kelsey-Seybold Clinic 557 615 72,683 Sugarland, TX (St. Luke's Episcopal Health System) Nijborg 15 & 17, 3927 DA AS Watson (Health & Beauty 1,226 963 122,450 Renswoude, The Netherlands Continental Europe)(2)
8 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
------------------------------ ------------------------ ----------------- ------------- ---------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage ------------------------------ ------------------------ ----------------- ------------- ---------------- 2300 Litton Lane AGC Automotive Americas 102 111 21,542 Hebron, KY Company FTJ FundChoice, LLC - 4 9,164 VACANT - - 49,714 1600 Viceroy Drive The Visiting Nurse 22 180 48,027 Dallas, TX Association of Texas VACANT - - 201,425 3615 North 27th Avenue VACANT(5) - - 57,988 Phoenix, AZ ------------------------ ----------------- ------------- ---------------- Subtotal $ 59,679 $ 61,072 8,980,766 ------------------------ ----------------- ------------- ---------------- Industrial ---------- 541 Perkins Jones Road Kmart Corp. $ 4,680 $ 4,466 1,462,642 Warren, OH 19500 Bulverde Road Harcourt Brace 1,590 1,715 559,258 San Antonio, TX 2425 Highway 77 North James Hardie Building 1,700 1,700 425,816 Waxahachie, TX Products, Inc. (James Hardie Industries NV) 3501 West Avenue H Michaels Stores, Inc. 1,619 1,652 762,775 Lancaster, CA 9110 Grogans Mill Road Baker Hughes, Inc. 1,400 1,533 275,750 Houston, TX 159 Farley Drive Harbor Freight Tools 1,378 1,517 1,010,859 Dillon, SC USA, Inc. (Central Purchasing, Inc.) 590 Ecology Lane Owens Corning 1,093 1,093 420,597 Chester, SC 6345 Brackbill Boulevard Exel Logistics, Inc. 1,018 926 507,000 Mechanicsburg, PA (NFC plc) 3820 Micro Drive Ingram Micro Inc. 1,018 1,136 701,819 Memphis, TN 431 Smith Lane Kirkland's, Inc. 716 716 771,120 Jackson, TN 750 N. Black Branch Road Dana Corporation 1,419 1,419 539,592 Elizabethtown, KY 6938 Elm Valley Dr. Dana Corporation 921 921 150,945 Kalamazoo, MI 4425 Purks Road Lear Technologies LLC 702 683 183,717 Auburn Hills, MI (Lear Corporation) (General Motors Corp.)
9 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
------------------------------ ------------------------ ----------------- ------------- --------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage ------------------------------ ------------------------ ----------------- ------------- --------------- 6 Doughten Road Exel Logistics, Inc. 743 674 330,000 New Kingston, PA (NFC plc) 6500 Adelaide Court Anda Pharmaceuticals, 630 603 354,676 Groveport, OH Inc. (Andrx Corporation) 7500 Chavenelle Road The McGraw-Hill 545 582 330,988 Dubuque, IA Companies, Inc. 12025 Tech Center Drive Kelsey-Hayes Company 533 569 100,000 Livonia, MI 250 Swathmore Avenue Steelcase, Inc. 517 543 244,851 High Point, NC Moody Commuter & Tech Park TNT Logistics North 527 527 595,346 Moody, AL America, Inc. (TPG N.V.) 3102 Queen Palm Drive Time Customer Service, 513 505 229,605 Tampa, FL Inc. (Time, Inc.) 2280 Northeast Drive Ryder Integrated 499 502 276,480 Waterloo, IA Logistics, Inc. (Ryder Systems, Inc.) 245 Salem Church Road Exel Logistics, Inc. 551 487 252,000 Mechanicsburg, PA (NFC plc) 200 Arrowhead Drive Owens Corning 514 492 400,522 Hebron, OH 3600 Southgate Drive Sygma Network, Inc. 467 467 149,500 Danville, IL 46600 Port Street Johnson Controls, Inc. 482 482 134,160 Plymouth, MI 1133 Poplar Creek Road Corporate Express Office 395 405 196,946 Henderson, NC Products, Inc. (Buhrmann, N.V.) 301 Bill Byran Road Dana Corporation 726 726 410,844 Hopkinsville, KY 450 Stern Street Johnson Controls, Inc. 365 365 111,160 Oberlin, OH 10000 Business Boulevard Dana Corporation 673 673 336,350 Dry Ridge, KY 7670 Hacks Cross Road Dana Corporation 422 402 268,100 Olive Branch, MS 34 East Main Street Exel Logistics, Inc. 360 327 179,200 New Kingston, PA (NFC plc) 191 Arrowhead Drive Owens Corning 329 313 250,410 Hebron, OH 904 Industrial Road Tenneco Automotive 295 300 195,640 Marshall, MI Operating Company, Inc. (Tenneco Automotive, Inc.)
10 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
--------------------------- ---------------------------- ---------------- --------------- -------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage --------------------------- ---------------------------- ---------------- --------------- -------------- 109 Stevens Street Unisource Worldwide, Inc. 294 294 168,800 Jacksonville, FL 1901 49th Avenue Owens Corning 277 277 18,620 Minneapolis, MN 7150 Exchequer Drive Corporate Express Office 219 220 79,086 Baton Rouge, LA Products, Inc. (Buhrmann, N.V.) 4010 Airpark Drive Dana Corporation 428 428 251,041 Owensboro, KY 324 Industrial Park Road SKF USA, Inc. 198 198 72,868 Franklin, NC 187 Spicer Drive Dana Corporation 177 170 148,000 Gordonsville, TN 730 N. Black Branch Road Dana Corporation 268 268 167,770 Elizabethtown, KY 3350 Miac Cove Road Mimeo.com, Inc. 134 185 107,000 Memphis, TN VACANT - - 34,359 300 McCormick Road Ameritech Services, Inc. 63 78 20,000 Columbus, OH 1601 Pratt Avenue Joseph Campbell Company 70 71 58,300 Marshall, MI 477 Distribution Pkwy. Federal Express Corporation 40 134 120,000 Colliersville, TN ---------------------------- ---------------- --------------- -------------- Subtotal $ 31,508 $ 31,744 14,364,512 ---------------------------- ---------------- --------------- -------------- Retail ------ 2655 Shasta Way Fred Meyer, Inc. $ 505 $ 505 178,204 Klamath Falls, OR Fort Street Mall, King Liberty House, Inc. 495 486 85,610 Street Honolulu, HI 150 N.E. 20th Street Fred Meyer, Inc. 530 530 118,179 Newport, OR 35400 Cowan Road Sam's Real Estate 376 376 102,826 Westland, MI Business Trust 4733 Hills & Dales Road Scandinavian Health Spa, 373 343 37,214 Canton, OH Inc. (Bally Total Fitness Corp.) 4831 Whipple Avenue, N.W. Best Buy Co., Inc. 233 233 46,350 Canton, OH
11 Lexington Corporate Properties Trust Supplemental Reporting Package Property Holdings 6/30/06
--------------------------- ---------------------------- ---------------- --------------- -------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square Property Location Tenant (Guarantor) ($000) ($000) Footage --------------------------- ---------------------------- ---------------- --------------- -------------- 3711 Gateway Drive Kohl's Dept. Stores, Inc. 234 231 76,164 Eau Claire, WI 399 Peach Wood Centre Dr. Best Buy Co., Inc. 198 198 45,800 Spartanburg, SC 12535 S.E. 82nd Avenue Toys "R" Us, Inc. 205 171 42,842 Clackamas, OR 24100 Laguna Hills Mall Federated Department 177 175 160,000 Laguna Hills, CA Stores, Inc. 18601 Alderwood Mall Toys "R" Us, Inc. 189 149 43,105 Boulevard Lynwood, WA 6910 S. Memorial Highway Toys "R" Us, Inc. 173 136 43,123 Tulsa, OK 9580 Livingston Road GFS Realty, Inc. 102 137 107,337 Oxon Hill, MD (Giant Food, Inc.) 121 South Center Street Greyhound Lines, Inc. 108 108 17,000 Stockton, CA 2401 Wooton Parkway GFS Realty, Inc. 57 76 51,682 Rockville, MD (Giant Food, Inc.) ---------------------------- ---------------- --------------- -------------- Subtotal $ 3,955 $ 3,854 1,155,436 ---------------------------- ---------------- --------------- -------------- ---------------------------- ---------------- --------------- -------------- Grand Total $ 95,142 $ 96,670 24,500,714 ---------------------------- ---------------- --------------- --------------
(1) Company has an 80.5% economic interest in this property. (2) Company has a 90.0% economic interest in this property. (3) Includes 13,268 square feet of retail space of which 2,842 is vacant. (4) Tenant rejected lease in bankruptcy and property is vacant as of June 30, 2006. GAAP rent does not reflect accelerated amortization of $2,349. (5) Company sold a portion of property in the second quarter 2006. 12 Lexington Corporate Properties Trust Supplemental Reporting Package Joint Venture Property Holdings 6/30/06
--------------------------- ---------------------------- ----------------- -------------- -------------- ------------ YTD YTD Base Cash Base GAAP Revenue Revenue Square LXP Property Location Tenant (Guarantor) ($000) ($000) Footage Ownership --------------------------- ---------------------------- ----------------- -------------- -------------- ------------ Office ------ 389-399 Interpace Highway Aventis Pharmaceuticals, $ 4,613 $ 4,350 340,240 33.33% Morris Corporate Center IV Inc (Pharma Holdings GmbH) Parsippany, NJ 17 Technology Circle Blue Cross Blue Shield 3,688 3,465 456,304 40.00% Columbia, SC of South Carolina Inc. 275 South Valencia Ave. Bank of America NT & SA 3,787 4,553 637,503 25.00% Los Angeles, CA 100 Wood Hollow Drive Greenpoint Mortgage 2,281 2,432 124,600 30.00% Novato, CA Funding, Inc. 6555 Sierra Drive True North Communications 2,231 2,125 247,254 33.33% Irving, TX Inc. 101 East Erie Building Foote, Cone & Belding 1,997 1,997 203,376 30.00% Chicago, IL (Interpublic Group of Companies, Inc.) Higgins Development 58 60 19,089 Partners Lexington Corporate 18 19 2,100 Properties Trust 5200 Metcalf Avenue Employers Reinsurance 2,038 2,038 320,198 25.00% Overland Park, KS Corporation 27027 Tourney Road Specialty Laboratories, 1,781 1,781 187,262 30.00% Santa Clarita, CA Inc. 8900 Freeport Pkwy. Nissan Motor Acceptance 2,239 2,405 268,445 30.00% Irving, TX Corporation/ (Nissan North America, Inc.) 15375 Memorial Drive Vastar Resources, Inc. 1,718 1,718 327,325 33.33% Houston, TX 10300 Kincaid Drive Bank One Indiana, N.A. 1,691 1,644 193,000 33.33% Fishers, IN 10300 Town Park Drive Veritas DGC, Inc. 1,557 1,624 218,641 30.00% Houston, TX 600 International Parkway First USA Management 1,489 1,460 125,155 33.33% Lake Mary, FL Services, Inc. 550 International Parkway First USA Management 1,439 1,410 125,920 33.33% Lake Mary, FL Services, Inc. 10940 White Rock Road Progressive Casualty 1,370 1,402 158,582 30.00% 10929 Disk Drive Insurance Rancho Cordova, CA Company 2000 Eastman Drive Structural Dynamic 1,405 1,395 212,836 33.33% Milford, OH Research Corp. 3701 Corporate Drive Motorola, Inc. 1,357 1,357 119,829 33.33% Farmington Hills, MI 2050 Roanoke Road Chrysler Financial Company 1,595 1,770 130,290 30.00% Westlake, TX LLC
13 Lexington Corporate Properties Trust Supplemental Reporting Package Joint Venture Property Holdings 6/30/06
---------------------------- --------------------------- ----------------- -------------- -------------- --------------- YTD YTD Base Cash Base GAAP Revenue Revenue Square LXP Property Location Tenant (Guarantor) ($000) ($000) Footage Ownership ---------------------------- --------------------------- ----------------- -------------- -------------- --------------- 1401 & 1501 Nolan Ryan Siemens Dematic Postal 1,192 1,267 236,547 25.00% Parkway Automation, L.P. Arlington, TX 9201 East Dry Creek Road The Shaw Group, Inc. 1,036 1,253 128,500 30.00% Centennial, CO 110, 120 & 130 E. Shore Capital One Services, Inc. 1,413 1,445 225,220 30.00% Dr. Richmond, VA 1475 Dunwoody Drive ING USA Annuity and Life 1,031 1,019 125,000 30.00% West Chester, PA Insurance Company 13775 McLearen Road Equant N.V. 924 1,006 125,293 30.00% Herndon, VA 70 Valley Stream Parkway IKON Office Solutions, Inc. 962 997 106,855 30.00% Malvern, PA 5150 220th Avenue Spacelabs Medical, Inc 962 974 106,944 25.00% Issaquah, WA (OSI Systems, Inc.) 9201 Stateline Employers Reinsurance 958 958 166,641 25.00% Kansas City, MO Corporation 22011 SE 51st Street Spacelabs Medical, Inc 878 834 95,600 25.00% Issaquah, WA (OSI Systems, Inc.) 1110 Bayfield Drive Honeywell International, 818 819 166,575 33.33% Colorado Springs, CO Inc. 3601 Converse Drive Verizon Wireless 766 812 160,500 25.00% Wilmington, NC 275 Technology Drive ANSYS, Inc. 620 677 107,872 30.00% Canonsburg, PA Renner Blvd. Voicestream PCS II 598 676 77,484 25.00% Lenexa, KS Corporation (T-Mobile USA, Inc.) East Goldstone Drive Voicestream PCS II 584 660 77,484 25.00% Meridian, ID Corporation (T-Mobile USA, Inc.) 1409 Centerpoint Blvd. Alstom Power, Inc. 717 817 84,404 32.30% Knoxville, TN 3201 Quail Springs Pkwy. AT& T Wireless Services, Inc. 673 683 103,500 40.00% Oklahoma City, OK Jordan Associates, Inc. 166 166 25,000 200 Lucent Lane Lucent Technologies, Inc. 1,013 822 124,944 30.00% Raleigh, NC 4455 American Way Bell South Mobility, Inc. 517 545 70,100 30.00% Baton Rouge, LA 3711 San Gabriel Voice Stream PCS II LLC 450 492 75,016 30.00% Mission, TX (T-Mobile USA, Inc.)
14 Lexington Corporate Properties Trust Supplemental Reporting Package Joint Venture Property Holdings 6/30/06
------------------------- ---------------------------- ---------------- --------------- -------------- -------------- YTD Base Cash YTD Revenue Base GAAP Square LXP Property Location Tenant (Guarantor) ($000) Revenue ($000) Footage Ownership ------------------------- ---------------------------- ---------------- --------------- -------------- -------------- 4848 129th East Ave. Metris Companies, Inc. 653 653 101,100 32.30% Tulsa, OK 2310 Village Square AmeriCredit Corporation 722 610 85,000 32.30% Pkwy. Jacksonville, FL 4001 International Pkwy. Accor S.A. 1,492 1,616 138,443 25.00% Carrollton, TX (Motel 6 Operating L.P.) 350 Rhode Island Street California Culinary 1,246 1,197 103,838 30.00% San Francisco, CA Academy, LLC (Career Education Corp.) Starbucks Coffee Company 34 37 1,500 (Retail) VACANT - - 20,006 2500 Patrick Henry Pkwy. Georgia Power Company 705 756 111,911 25.00% McDonough, GA First Park Drive Omnipoint Holdings, Inc. 592 683 78,610 25.00% Oakland, ME (T-Mobile USA, Inc.) 11707 Miracle Hills (i) Structure, LLC 583 583 86,800 32.30% Drive (Infocrossing, Omaha, NE Inc.) 2005 East Technology (i) Structure, LLC 564 564 60,000 32.30% Circle (Infocrossing, Tempe, AZ Inc.) 511 Luna Road Haggar Clothing Company 409 448 180,507 30.00% Dallas, TX (Texas Clothing Holding Corp.) (Haggar Corporation) 26410 McDonald Road Montgomery County 77 87 41,000 32.30% Houston, TX Management LLC ---------------------------- ---------------- --------------- -------------- Subtotal Office $ 61,707 $ 63,161 7,816,143 ---------------------------- ---------------- --------------- -------------- Industrial ---------- 101 Michelin Drive TNT Logistics North $ 1,551 $ 1,614 1,164,000 33.33% Laurens, SC America, Inc. (TPG N.V.) Philipp Parkway L'Oreal USA, Inc. 1,145 1,259 649,250 25.00% Streetsboro, OH 7111 Crabb Road TNT Logistics North 1,039 1,081 752,000 33.33% Temperance, MI America, Inc. (TPG N.V.) 6050 Dana Way Vacant(1) 611 535 338,700 30.00% Antioch, TN W.M Wright Company 254 254 338,700 3600 Army Post Rd. EDS Information Services 1,319 1,428 405,000 30.00% Des Moines, IA LLC (Electronic Data Systems Corporation) 2400 West Haven Avenue Michaels Stores Procurement 992 992 693,185 30.00% New Lenox, IL Company, Inc. (Michaels Stores, Inc.)
15 Lexington Corporate Properties Trust Supplemental Reporting Package Joint Venture Property Holdings 6/30/06
------------------------- ---------------------------- ---------------- --------------- -------------- -------------- YTD Base Cash YTD Revenue Base GAAP Square LXP Property Location Tenant (Guarantor) ($000) Revenue ($000) Footage Ownership ------------------------- ---------------------------- ---------------- --------------- -------------- -------------- 43955 Plymouth Oaks Tower Automotive Products 943 943 290,133 30.00% Boulevard Company Plymouth, MI (Tower Automotive, Inc.) 121 Technology Drive Heidelberg Web Systems, 1,011 925 500,500 33.33% Durham, NH Inc. 3225 Meridian Parkway Hagemeyer Foods, Inc. 741 804 201,845 30.00% Weston, FL 291 Park Center Drive Kraft Foods North 726 757 344,700 33.33% Winchester, VA America, Inc. 1109 Commerce Linens-n-Things, Inc. 629 626 262,644 30.00% Boulevard Logan Township, NJ 3245 Meridian Parkway Circuit City Stores, Inc. 524 584 230,600 30.00% Weston, FL 359 Gateway Drive TI Group Automotive 600 600 133,221 32.30% Livonia, GA Systems, LLC 900 Industrial Boulevard Dana Corporation 209 209 172,800 32.30% Crossville, TN 736 Addison Road Corning, Inc. 95 95 408,000 30.00% Erwin, NY 2935 Van Vactor Way Bay Valley Foods, LLC 6 7 300,500 32.30% Plymouth, IN ---------------------------- ---------------- --------------- -------------- Subtotal Industrial $ 12,395 $ 12,713 7,185,778 ---------------------------- ---------------- --------------- -------------- Retail/ Other ------------- 12080 Carmel Mountain Kmart Corporation $ 88 $ 490 107,210 30.00% Road San Diego, CA 5350 Leavitt Road Kmart Corporation 195 364 193,193 30.00% Lorain, OH 255 Northgate Drive Kmart Corporation 137 257 107,489 30.00% Manteca, CA 21082 Pioneer Plaza Kmart Corporation 130 242 120,727 30.00% Drive Watertown, NY 97 Seneca Trail Kmart Corporation 91 155 90,933 30.00% Fairlea, WV 1150 West Carl Sandburg Kmart Corporation 77 144 94,970 30.00% Drive Galesburg, IL 11411 N. Kelly Avenue American Golf Corporation 57 57 13,924 32.30% Oklahoma City, OK ---------------------------- ---------------- --------------- -------------- Subtotal Retail/ Other $ 775 $ 1,709 728,446 ---------------------------- ---------------- --------------- -------------- ---------------------------- ---------------- --------------- -------------- Grand Total $ 74,877 $ 77,583 15,730,367 ---------------------------- ---------------- --------------- --------------
(1) Original tenant rejected the lease in bankruptcy. GAAP rent does not reflect accelerated amortization of $4,704. 16 Lexington Corporate Properties Trust Supplemental Reporting Package Properties by Location 6/30/06
Historical 6-Month Ended June 30, 2006(1) Number ---------------------- No. of of Percent Square Base Rent Percent of Locations Location Properties(3) Leased(4) Feet(2) ($000's) Base Rent ------------- ------------------ ------------ ------------ ------------ ----------------------------- 1 Texas 25 96.2% 5,321,040 $ 22,786 18.7% 2 South Carolina 10 100.0 3,806,492 10,063 8.3 3 Pennsylvania 12 99.9 2,472,403 8,829 7.2 4 Ohio 11 100.0 3,738,253 7,782 6.4 5 California 13 99.2 2,571,029 7,013 5.8 6 Michigan 13 95.5 2,466,397 6,527 5.4 7 Florida 12 100.0 1,620,114 6,402 5.3 8 Virginia 8 100.0 1,399,643 5,625 4.6 9 Georgia 5 100.0 733,599 4,985 4.1 10 Arizona 8 86.7 807,472 4,496 3.7 11 Massachusetts 4 100.0 574,301 3,696 3.0 12 Kentucky 6 97.2 1,786,017 3,629 3.0 13 Tennessee 9 87.0 2,876,650 3,320 2.7 14 New Jersey 4 100.0 760,395 3,258 2.7 15 Utah 1 100.0 295,000 3,161 2.6 16 Illinois 6 100.0 1,431,935 2,814 2.3 17 Indiana 4 100.0 724,503 2,559 2.1 18 Oregon 4 100.0 416,709 1,982 1.6 19 Iowa 4 100.0 1,073,648 1,899 1.6 20 North Carolina 5 100.0 800,109 1,596 1.3 21 Washington 4 100.0 305,849 1,157 0.9 22 Connecticut 2 100.0 197,764 1,115 0.9 23 Colorado 3 100.0 363,240 1,082 0.9 24 The Netherlands 1 100.0 122,450 963 0.8 25 Oklahoma 4 100.0 286,647 705 0.6 26 Kansas 2 100.0 397,682 679 0.6 27 Alabama 1 100.0 595,346 527 0.4 28 Hawaii 1 100.0 85,610 486 0.4 29 Mississippi 1 100.0 268,100 402 0.3 30 Louisiana 2 100.0 149,186 384 0.3 31 New Hampshire 1 100.0 500,500 308 0.2 32 Minnesota 1 100.0 18,620 277 0.2 33 Missouri 1 100.0 166,641 240 0.2 34 Wisconsin 1 100.0 76,164 231 0.2 35 Maryland 2 100.0 159,019 213 0.2 36 Nebraska 1 100.0 86,800 188 0.2 37 Maine 1 100.0 78,610 171 0.1 38 Idaho 1 100.0 77,484 165 0.1 39 New York 2 100.0 528,727 101 0.1 40 West Virginia 1 100.0 90,933 44 -- ------------------ ------------ ------------ ------------ -------------- -------------- Total 197 97.8% 40,231,081 $ 121,860 100.00% ------------------ ------------ ------------ ------------ -------------- --------------
(1) Includes proportionate share of joint venture investments and rental revenue recognized from properties sold through date of sale. (2) Includes properties owned as of June 30, 2006. (3) Includes properties owned during the six months ended June 30, 2006. (4) As of June 30, 2006. 17 Lexington Corporate Properties Trust Supplemental Reporting Package Lease Rollover Schedule by Property Type - Cash Basis 6/30/06
Office Industrial Retail - --------- ------------ ------------- ------------ ------------ -------------- ------------- ------------ -------------- ------------ Square Cash Rental Net Rent Square Cash Rental Net Rent Square Cash Rental Net Rent Year Footage Revenue(1) PSF Footage Revenue(1) PSF Footage Revenue(1) PSF - --------- ------------ ------------- ------------ ------------ -------------- ------------- ------------ -------------- ------------ 2006 270,700 $ 2,386 $ 8.82 938,237 $ 5,097 $ 5.43 -- $ -- $ -- 2007 186,504 2,024 14.11 1,920,942 10,802 5.62 -- -- -- 2008 444,270 6,240 14.49 -- -- -- 215,418 1,788 8.30 2009 1,837,317 17,924 16.21 831,966 2,015 3.40 205,436 1,943 9.46 2010 2,135,992 17,670 13.91 675,655 2,436 3.61 -- -- -- 2011 1,002,689 10,757 20.63 1,046,519 536 4.67 247,249 1,659 6.71 2012 1,869,411 18,340 12.66 3,951,134 8,671 4.35 -- -- -- 2013 1,659,473 21,097 15.80 79,086 483 6.11 -- -- -- 2014 1,864,411 18,140 15.68 965,160 3,522 3.65 267,337 496 1.85 2015 2,267,937 20,952 14.17 764,370 4,504 6.64 76,164 469 6.15 2016 738, 176 6,981 16.65 1,408,158 5,091 4.38 -- -- -- 2017 128,500 694 17.99 806,439 2,754 4.32 51,682 115 2.23 2018 556,288 5,446 15.43 -- -- -- 806,672 1,175 2.37 2019 543,931 4,203 19.51 2,183,145 5,519 3.50 -- -- -- 2020 294,583 4,238 18.36 666,037 4,184 7.51 -- -- -- 2021 157,511 4,234 26.88 1,620,504 6,106 4.21 -- -- -- 2022 -- -- -- -- -- -- -- -- -- 2023 -- -- -- -- -- -- -- -- -- 2024 187,262 1,069 19.02 693,185 568 2.73 -- -- -- 2025 146,800 734 15.63 2,126,194 9,566 3.20 -- -- -- 2026 -- -- -- 500,500 427 2.56 -- -- -- Weighted Average $ 15.73 $ 4.40 $ 4.48 ======= ======= ========
(1) Includes proportionate share of joint venture investments. 18 Lexington Corporate Properties Trust Supplemental Reporting Package Lease Rollover Schedule - GAAP Basis 6/30/06 ($000's)
Percentage of Total Total Number of Annualized Base Annualized Year Leases Expiring Rent (1) Base Rent - ------------------------- ------------------------ --------------------------- ---------------------------- 2006 - remaining 8 $ 5,780 2.4% 2007 7 12,293 5.1 2008 7 7,509 3.1 2009 17 22,449 9.4 2010 19 19,274 8.1 2011 15 15,758 6.6 2012 22 25,080 10.5 2013 14 21,071 8.8 2014 19 22,485 9.4 2015 20 27,748 11.6 2016 13 11,149 4.7 2017 6 3,668 1.5 2018 11 7,404 3.1 2019 9 8,984 3.8 2020 6 7,974 3.3 2021 5 8,087 3.4 2022 -- -- -- 2023 -- -- -- 2024 2 1,665 0.7 2025 8 9,893 4.2 2026 1 617 0.3 ------------------------ --------------------------- ---------------------------- Total 209 $ 238,888 100.0% ======================== =========================== ============================
(1) Includes proportionate share of joint venture investments. 19 Lexington Corporate Properties Trust Supplemental Reporting Package Mortgages and Notes Payable 6/30/06 ($000's)
- --------------------------------- ------------------ -------------- ------------- ---------------- -------------------- Current Estimated Debt Annual Balloon Property - Fixed Rate Balance Interest Rate Maturity Debt Service(d) Payment - --------------------------------- ------------------ -------------- ------------- ---------------- -------------------- Warren, OH(b) $ 8,629 7.000% Oct-07 $ 6,160 $ -- Bristol, PA 9,452 7.400 Feb-08 831 9,262 Decatur, GA 6,346 6.720 Jun-08 579 6,049 Phoenix, AZ 13,373 7.890 Jun-08 1,434 12,591 Palm Beach Gardens, FL 10,864 7.010 Jun-08 970 10,418 Canton, OH 3,129 7.150 Aug-08 313 2,936 Spartanburg, SC 2,599 7.150 Aug-08 260 2,438 Florence, SC 8,956 7.500 Feb-09 869 8,443 Canton, OH 910 9.490 Feb-09 388 -- Baton Rouge, LA 1,711 7.375 Mar-09 208 1,478 Livonia, MI 10,684 7.800 Apr-09 992 10,236 Bristol, PA 5,692 7.250 Apr-09 571 5,228 Henderson, NC(a) 4,170 7.390 May-09 417 3,854 Westland, MI 1,873 10.500 Sep-09 683 -- Salt Lake City, UT 8,284 7.610 Oct-09 2,901 -- High Point, NC 8,480 5.750 Oct-09 695 7,741 Richmond, VA 16,050 8.100 Feb-10 1,511 15,257 Hampton, VA 7,105 8.270 Apr-10 677 6,758 Hampton, VA 4,362 8.260 Apr-10 415 4,144 Tampa, FL 8,095 6.930 Aug-10 674 7,603 Tampa, FL 5,854 6.880 Aug-10 485 5,495 Herndon, VA 18,358 8.180 Dec-10 1,723 17,301 Tucson, AZ 2,330 7.500 Jan-11 226 2,076 Valley Forge, PA 12,440 7.120 Feb-11 1,166 10,927 Renswoude, NA(f) 34,453 5.305 Apr-11 2,502 30,928 Glendale, AZ 14,365 7.400 Apr-11 1,258 13,365 Dallas, TX 30,582 5.126 May-11 1,589 30,582 Farmington Hills, MI 20,505 5.126 May-11 1,343 19,020 Wallingford, CT 3,445 4.926 May-11 221 3,187 Auburn Hills, MI 6,838 7.010 Jun-11 637 5,918 Plymouth, MI 4,553 7.960 Jul-11 463 3,949 Newport, OR 6,708 5.030 Aug-11 470 5,980 Greenville, SC 13,305 4.415 Jan-12 841 11,806 New Kingston, PA 6,969 7.790 Jan-12 678 6,101 Mechanicsburg, PA 5,144 7.780 Jan-12 500 4,503 New Kingston, PA 3,320 7.780 Jan-12 323 2,906 Lake Forest, CA 10,547 7.260 Feb-12 901 9,708 Memphis, TN 17,789 5.247 May-12 1,181 16,222 Lakewood, CO 8,675 5.097 May-12 445 7,890 Groveport, OH 7,601 6.030 Oct-12 563 6,860 San Antonio, TX 29,368 6.080 Oct-12 2,260 26,025 Foxboro, MA(b) 17,443 6.000 Jan-13 4,264 -- Fort Mill, SC 11,166 6.000 Jan-13 839 9,904 Waterloo, IA 6,063 5.610 Feb-13 671 3,505 Atlanta, GA 45,141 5.268 May-13 3,004 40,356 Houston, TX 17,621 5.218 May-13 1,166 15,737 Southington, CT 13,749 5.018 May-13 890 12,228 Tempe, AZ 13,618 5.148 May-13 894 12,144 Indianapolis, IN 9,617 5.168 May-13 633 8,580 Fort Meyers, FL 8,912 5.268 May-13 476 8,550 Chelmsford, MA 7,001 5.118 May-13 458 6,231 Lancaster, CA (first) 10,216 7.020 Sep-13 900 8,637 Lancaster, CA (second) 8,613 5.920 Sep-13 642 7,518 Knoxville, TN 5,128 5.950 Sep-13 381 4,496
20 Lexington Corporate Properties Trust Supplemental Reporting Package Mortgages and Notes Payable 6/30/06 ($000's)
- --------------------------------- ------------------ -------------- ------------- ---------------- -------------------- Current Estimated Debt Annual Balloon Property - Fixed Rate Balance Interest Rate Maturity Debt Service(d) Payment - --------------------------------- ------------------ -------------- ------------- ---------------- -------------------- Foxboro, MA(b) 22,174 6.000 Jan-14 4,916 -- Moody, AL 7,424 4.978 Jan-14 493 6,350 Mechanicsburg, PA 13,270 5.730 Mar-14 1,045 10,538 Redmond, OR 9,820 5.616 Apr-14 697 8,484 Clive, IA 5,907 5.139 May-14 387 5,151 Fort Mill, SC 20,300 5.373 May-14 1,106 18,311 Philadelphia, PA(e) 49,000 5.060 Jul-14 2,514 43,547 Jackson, TN 10,152 5.930 Jul-14 743 8,820 Eau Claire, WI 1,846 8.000 Jul-14 313 -- Carrollton, TX 14,241 5.530 Jan-15 993 12,022 Franklin, NC 1,666 8.500 Mar-15 271 -- Kalamazoo, MI 17,588 5.411 May-15 1,189 15,087 Houston, TX 16,940 5.160 May-15 1,114 14,408 Houston, TX 13,226 5.210 May-15 874 11,265 Fishers, IN 13,153 5.160 May-15 865 11,188 San Antonio, TX 13,044 5.340 May-15 875 11,149 Los Angeles, CA 11,475 5.110 May-15 750 9,760 Atlanta, GA 11,325 5.260 May-15 604 10,502 Richmond, VA 10,586 5.310 May-15 708 9,055 Harrisburg, PA 9,159 5.110 May-15 599 7,780 Elizabethtown, KY(g) 16,500 4.990 Jul-15 1,075 13,838 Hopkinsville, KY(g) 9,667 4.990 Jul-15 630 8,108 Dry Ridge, KY(g) 7,816 4.990 Jul-15 509 6,555 Owensboro, KY(g) 6,989 4.990 Jul-15 455 5,862 Elizabethtown, KY(g) 3,108 4.990 Jul-15 203 2,607 Southborough, MA 1,829 7.500 Sep-15 275 -- Houston, TX(b) 64,735 6.250 Sep-15 6,428 18,318 Houston, TX(b) 26,130 6.250 Sep-15 2,151 6,985 Sugar Land, TX(b) 16,961 6.250 Sep-15 1,647 6,286 Houston, TX(b) 7,423 6.250 Sep-15 668 2,222 Temple, TX 8,939 6.090 Jan-16 668 7,446 Danville, IL 6,354 9.000 Jan-16 692 4,578 Bremerton, WA 6,607 6.090 Apr-16 494 5,465 Dubuque, IA 10,815 5.402 Jun-17 733 8,725 Westmont, IL 15,366 6.210 Mar-18 1,292 9,662 Boca Raton, FL 20,400 6.470 Feb-20 1,338 18,383 Houston, TX 9,946 5.640 Dec-20 692 7,018 Wall Township, NJ(b) 29,675 6.250 Jan-21 2,013 -- Dillon, SC 23,576 5.974 Feb-22 1,832 13,269 Chester, SC 13,642 5.380 Aug-25 1,144 362 ---------- ----- -------- -------- $ 1,156,975 5.986% $ 102,536 $ 852,177 ---------- ------ -------- -------- Corporate - --------- Credit Facility (C) $ -- -- June-08 $ -- $ -- ---------- ------ -------- -------- Total $ 1,156,975 5.986% $ 102,536 $ 852,177 ========== ====== ======== =======
21 Lexington Corporate Properties Trust Supplemental Reporting Package Mortgages Payable 6/30/06 (000's) (a) Included in discontinued operations. (b) Debt balances based upon imputed interest rates. (c) Floating rate debt 30/60/90 day LIBOR plus 120 to 170 bps. (d) Remaining payments for debt with less than 12 months to maturity. (e) The Company has an 80.5% interest in the property securing the mortgage. (f) The Company has a 90.0% interest in the property securing the mortgage. (g) Debt balances are net of mortgage investment made by the Company. 22 Lexington Corporate Properties Trust Supplemental Reporting Package Mortgages Payable 6/30/06 (000's)
- ------------------------------- -------------- ---------------- ------------- --------------- ----------------- ------------------ LXP Current Debt Proportionate Interest Estimated Annual Balloon Joint Venture Property Balance Share Rate Maturity Debt Service Payment - ------------------------------- -------------- ---------------- ------------- --------------- ----------------- ------------------ Santa Clarita, CA $ 28,200 $ 8,460 4.750 Oct-09 $ 1,340 $ 28,200 Columbia, SC 23,688 9,475 7.850 Oct-09 2,196 22,586 Houston, TX 20,096 6,692 7.580 Oct-09 2,032 18,229 Fishers, IN 14,342 4,776 8.190 Apr-10 1,499 12,960 Lorain, OH(1) 3,397 1,019 6.000 Jul-10 873 -- Manteca, CA(1) 2,400 720 6.000 Jul-10 617 -- Watertown, NY(1) 2,257 677 6.000 Jul-10 580 -- Fairlea, WV(1) 1,585 476 6.000 Jul-10 407 -- San Diego, CA(1) 1,530 459 6.000 Jul-10 393 -- Galesburg, IL(1) 1,347 404 6.000 Jul-10 346 -- Irving, TX 25,879 8,618 8.160 Oct-10 2,432 24,454 Lake Mary, FL 12,879 4,289 7.880 Oct-10 1,181 12,118 Lake Mary, FL 12,828 4,272 7.880 Oct-10 1,178 12,082 Parsippany, NJ 39,828 13,263 7.350 Mar-11 3,472 37,047 Novato, CA 22,078 6,623 5.750 Jul-11 1,600 20,307 Winchester, VA 10,468 3,486 7.330 Aug-11 908 9,675 Milford, OH 16,110 5,365 8.170 Feb-12 1,764 12,686 Des Moines, IA 22,761 6,828 5.147 May-12 1,188 22,153 Fort Worth, TX 19,601 5,880 5.097 May-12 1,280 17,823 Raleigh, NC 12,900 3,870 4.947 May-12 647 12,543 Farmington Hills, MI 20,432 6,810 5.420 Sep-12 1,500 17,724 Laurens, SC 16,769 5,589 6.000 Sep-12 1,396 14,022 Temperance, MI 11,241 3,747 6.000 Sep-12 936 9,400 Baton Rouge, LA 6,742 2,023 4.900 Oct-12 443 5,943 Plymouth, MI 12,152 3,646 6.220 Dec-12 1,026 10,026 Colorado Springs, CO 11,508 3,836 6.250 Dec-12 887 10,272 Centennial, CO 15,410 4,623 6.150 Feb-13 1,177 13,555 Los Angeles, CA 80,182 20,046 5.330 May-13 4,333 73,071 Dallas, TX 40,832 12,250 5.218 May-13 2,702 36,453 Malvern, PA 12,958 3,887 5.530 Jan-14 916 11,236 Arlington, TX 21,362 5,341 5.810 Feb-14 1,551 18,588 New Lenox, IL 17,400 5,220 5.510 Feb-14 972 17,400 Logan Township, NJ 7,690 2,307 4.760 Apr-14 371 6,784 Rancho Cordova, CA(1) 18,375 5,513 6.000 Sept-14 1,457 14,646 Weston, FL 10,633 3,190 5.420 Nov-14 733 9,066 Issaquah, WA 32,800 8,200 5.001 Dec-14 1,663 30,388 Canonsburg, PA 9,095 2,729 5.377 Dec-14 489 9,095 Chicago, IL 29,900 8,970 5.105 Jan-15 1,548 29,900 Herndon, VA 12,152 3,646 5.920 Apr-15 888 10,359 Richmond, VA 19,800 5,940 5.110 May-15 1,026 18,321 Oklahoma City, OK 14,749 5,900 5.240 May-15 784 13,673 Knoxville, TN 7,783 2,514 5.310 May-15 520 6,658 Tulsa, OK 7,671 2,478 5.060 May-15 499 6,517 Jacksonville, FL 5,798 1,873 5.110 May-15 379 4,927 McDonough, GA 12,675 3,169 5.212 Jun-15 670 11,349 Mission, TX 6,387 1,916 5.780 Jun-15 462 5,371 Carrollton, TX 20,800 5,200 5.274 Jul-15 1,112 18,677 Houston, TX 23,910 7,173 5.410 Oct-15 1,311 21,846 Omaha, NE 8,972 2,898 5.610 Apr-16 621 7,560 Tempe, AZ 8,474 2,737 5.610 Apr-16 586 7,140 Dallas, TX 18,363 5,509 6.100 Jul-16 1,136 18,363 Wilmington, NC 13,000 3,250 5.190 Mar-17 684 11,580 Weston, FL 7,346 2,204 5.520 Nov-17 512 5,758 Lorain, OH(1) 1,470 441 6.000 Jul-18 108 -- Manteca, CA(1) 1,039 312 6.000 Jul-18 77 -- Watertown, NY(1) 977 293 6.000 Jul-18 72 -- Fairlea, WV(1) 686 206 6.000 Jul-18 51 -- San Diego, CA(1) 662 199 6.000 Jul-18 49 -- Galesburg, IL(1) 583 175 6.000 Jul-18 43 -- Overland Park, KS 37,620 9,405 5.830 May-19 2,224 31,819
23 Lexington Corporate Properties Trust Supplemental Reporting Package Mortgages Payable 6/30/06 (000's)
- ------------------------------- -------------- ---------------- ------------- --------------- ----------------- ------------------ LXP Current Debt Proportionate Interest Estimated Annual Balloon Joint Venture Property Balance Share Rate Maturity Debt Service Payment - ------------------------------- -------------- ---------------- ------------- --------------- ----------------- ------------------ Kansas City, MO 17,950 4,488 5.830 May-19 1,061 15,182 West Chester, PA 10,405 3,122 6.750 Jul-19 1,204 -- Meridian, ID 10,224 2,556 6.010 Aug-19 753 7,658 Streetsboro, OH 20,200 5,050 5.285 Sept-19 1,082 16,338 Houston, TX 7,500 2,423 6.507 Nov-19 495 6,692 San Francisco, CA 22,080 6,624 5.580 Nov-19 1,249 18,002 Lenexa, KS 10,276 2,569 6.270 Dec-19 774 7,755 Oakland, ME 10,408 2,602 5.930 Oct-20 750 7,660 Livonia, GA 9,991 3,227 5.460 Dec-20 741 5,895 Durham, NH 19,182 6,393 6.730 Mar-21 1,309 -- Antioch, TN 14,077 4,223 7.940 Oct-21 1,580 774 -------- --------- ---------- --------- -------- $ 1,052,865 $ 314,294 5.946 % $ 74,845 $ 886,306 ========= ======== ========== ========= ========
1. Debt balances based upon imputed rates. 24 Lexington Corporate Properties Trust Supplemental Reporting Package Debt Maturity Schedule 6/30/06 ($000's)
Consolidated properties - ------------------------------------------------------------------------------------------------------------ Scheduled Balloon Balloon Weighted Amortization Payments Average Interest Rate ------------ -------- --------------------- 2006 - remaining $ 13,982 $ -- --% 2007 35,197 -- -- 2008 29,973 43,694 7.32 2009 31,592 36,980 7.16 2010 30,422 56,558 7.88 ------ --------- ----------- $141,166 $ 137,232 7.51% ======= ========= =========== Joint venture properties - LXP proportionate share - ------------------------------------------------------------------------------------------------------------ Scheduled Balloon Balloon Weighted Amortization Payments Average Interest Rate ------------ -------- --------------------- 2006 - remaining $ 2,135 $ -- -- 2007 4,078 -- -- 2008 4,493 -- -- 2009 5,170 23,570 6.67% 2010 5,103 20,538 8.06 --------- --------- ----------- $ 20,979 $ 44,108 7.31% ========= ========= ===========
25 Lexington Corporate Properties Trust Supplemental Reporting Package Revenue By Tenant Industry 6/30/06
- --------------------------------------------------------------- -------------------------------- Percentage of Historical Tenant Industry Annual Base Rent (1) - --------------------------------------------------------------- -------------------------------- Energy 13.4% Finance/Insurance 12.6 Technology 10.8 Automotive 9.6 Telecommunications 5.6 Healthcare 5.6 Transportation/Logistics 5.4 Retail-Department/ Discount Store 5.1 Consumer Products 4.8 Media/Advertising 4.2 Food 3.8 Construction Materials 3.7 Printing/Production 3.4 Retail-Specialty 2.8 Aerospace/Defense 2.2 Service 2.1 Retail-Electronics 1.6 Apparel 1.1 Security 0.9 Health/Fitness 0.5 Paper/Containers & Packaging 0.4 Real Estate 0.4 ------- 100.0%
(1) Includes proportionate share of joint venture investments and rental revenue recognized from properties sold through date of sale for the six months ended June 30, 2006. 26 Lexington Corporate Properties Trust Supplemental Reporting Package Revenue by MSA 6/30/06
Percent of Base Rent for the 6 Months Ended 6/30/06 - ------- -------------------------------------------------------------- ---------------------- 1 Houston-TX 9.8% 2 Dallas-Fort Worth-TX 6.1% 3 Philadelphia-Wilmington-PA 4.8% 4 Detroit-MI 4.3% 5 Los Angeles-Riverside-Orange County-CA 4.2% 6 Atlanta-GA 3.9% 7 Youngstown-Warren-OH 3.7% 8 Phoenix-Mesa-AZ 3.5% 9 Boston-MA 3.3% 10 Charlotte-NC 2.7% 11 Salt Lake City-UT 2.6% 12 Harrisburg-PA 2.6% 13 New York-Northern New Jersey 2.4% 14 Richmond-VA 2.3% 15 Indianapolis-IN 2.1% 16 San Antonio-TX 2.1% 17 Chicago-IL 1.9% 18 West Palm Beach-Boca Raton-FL 1.8% 19 Memphis-TN 1.5% 20 Washington-Baltimore-DC-MD 1.4% 21 Elizabethtown, KY 1.4% 22 Columbia-SC 1.3% 23 Dillon-SC 1.2% 24 Columbus-OH 1.2% 25 Kalamazoo-Battle Creek-MI 1.1% 26 Cincinnati-OH 1.0% 27 Greenville-Spartanburg-SC 1.0% 28 Tampa-St. Petersburg-FL 1.0% 29 Seattle-WA 1.0% 30 San Francisco-CA 0.9% 31 Chester-SC 0.9% 32 Norfolk-Virginia Beach-Newport News-VA 0.8% 33 Renswoude, Netherland 0.8% 34 Orlando-FL 0.8% 35 Kansas City-MO-KS 0.8% 36 Florence-SC 0.7% 37 Des Moines-IA 0.7% 38 Hartford-CT 0.7% 39 Denver-CO 0.7% 40 Cleveland-OH 0.6% 41 Killeen-Temple-TX 0.6% 42 Redmond-OR 0.6% 43 Clarksville-TN 0.6% 44 Jackson-TN 0.6% 45 Knoxville-TN 0.6% 46 Ocala-FL 0.5% 47 Dubuque-IA 0.5% 48 Canton-OH 0.5%
27 Lexington Corporate Properties Trust Supplemental Reporting Package Revenue by MSA 6/30/06
Percent of Base Rent for the 6 Months Ended 6/30/06 - ------- -------------------------------------------------------------- ---------------------- 49 Greensboro-Winston-Salem-NC 0.4% 50 Laurens-SC 0.4% 51 Newport-OR 0.4% 52 Birmingham-AL 0.4% 53 Fort Meyers-FL 0.4% 54 Klamath Falls-OR 0.4% 55 Waterloo-Cedar Falls-IA 0.4% 56 Jacksonville-FL 0.4% 57 Honolulu-HI 0.4% 58 Danville-IL 0.4% 59 Owensboro-KY 0.3% 60 Sacramento-CA 0.3% 61 Miami-Fort Lauderdale-FL 0.3% 62 Henderson-NC 0.3% 63 Baton Rouge-LA 0.3% 64 Oklahoma, OK 0.3% 65 Tulsa-OK 0.3% 66 New Haven-CT 0.2% 67 Minneapolis-St. Paul-MN 0.2% 68 Colorado Springs-CO 0.2% 69 Winchester-VA 0.2% 70 Raleigh-Durham-Chapel Hill-NC 0.2% 71 Nashville-TN 0.2% 72 Eau Claire-WI 0.2% 73 Tucson-AZ 0.2% 74 Pittsburgh-PA 0.2% 75 Wilmington-NC 0.2% 76 Franklin-NC 0.2% 77 Lavonia-GA 0.2% 78 Omaha-NE-IA 0.2% 79 Stockton-Lodi-CA 0.2% 80 Clackamas-OR 0.1% 81 Oakland-ME 0.1% 82 Gordonsville, TN 0.1% 83 Boise City, ID 0.1% 84 McAllen-Edinburg-Mission-TX 0.1% 85 San Diego-CA 0.1% 86 Watertown-NY 0.1% 87 Crossville, TN 0.1% 88 Lewisburg-WV 0.1% 89 Galesburg-IL 0.1% 90 Erwin, NY - 91 Plymouth, IN - - ------- -------------------------------------------------------------- ---------------------- Totals 100.00% - ------- -------------------------------------------------------------- ----------------------
28 Lexington Corporate Properties Trust Supplemental Reporting Package Other Revenue Data 6/30/06
Revenue by Property Type Percentage - ---------------------------------------------------- -------------------------------- Office 66.1% Industrial 29.9 Retail 4.0 ------- 100.0% ====== Revenue by Credit Rating(B) - --------------------------- Investment Grade 39.2% Non-Investment Grade 29.1 Unrated 31.7 ---- 100.00% ======
Percentage of Base Rent for the Number of 6 Months Ended Top 15 Tenants/Guarantors Properties(B) Property Type 6/30/06(A) - ---------------------------------------------------- ---------------- ---------------------------------- --------------------- Baker Hughes, Inc. 4 Office (3)/Industrial (1) 5.4% Dana Corporation(C) 9 Industrial 5.0 Kmart Corporation 7 Industrial(1)/Retail (6) 4.1 Wells Fargo Home Mortgage, Inc. 2 Office 2.7 Northwest Pipeline Corp. 1 Office 2.6 Internet Security Systems, Inc. 1 Office 2.5 Invensys Systems, Inc. (Siebe, Inc.) 2 Office 2.4 Exel Logistics, Inc.(NFC plc) 4 Industrial 2.0 Nextel Finance Company 4 Office 1.9 Morgan, Lewis & Bockius LLP 1 Office 1.8 Owens Corning 4 Industrial 1.8 Michaels Stores, Inc. 2 Industrial 1.6 Harcourt Brace 1 Industrial 1.4 James Hardie Building Products, Inc. 1 Industrial 1.4 (James Hardie Industries N.V.) TRW, Inc. (Experian Information Solutions, Inc.) 1 Office 1.4 - --- 44 38.0% == =====
(A) Includes proportionate share of joint venture investments and rental revenue recognized from properties sold through the date of sale. (B) As of June 30, 2006. (C) Tenant declared Chapter 11 bankruptcy in March 2006. EX-99 4 ex99-3.txt EXHIBIT 99.3: CONFERENCE CALL TRANSCRIPT Exhibit 99.3 - -------------------------------------------------------------------------------- Final Transcript - -------------------------------------------------------------------------------- Thomson StreetEvents - -------------------------------------------------------------------------------- Conference Call Transcript LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call Event Date/Time: Jul. 27. 2006 / 2:00PM ET - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 1 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- CORPORATE PARTICIPANTS Chris Ann Casaburri Lexington Corporate Properties Trust - IR Will Eglin Lexington Corporate Properties Trust - President, CEO Pat Carroll Lexington Corporate Properties Trust - CFO John Vander Swaag Lexington Corporate Properties Trust - EVP CONFERENCE CALL PARTICIPANTS John Guinee Stifel Nicolaus - Analyst Ken Avalos Raymond James - Analyst Philip Martin Canto Fitzgerald - Analyst Tony Paolone JP Morgan - Analyst PRESENTATION - -------------------------------------------------------------------------------- Operator Good day, ladies and gentlemen, and welcome to the Lexington Corporate Properties second quarter 2006 conference call. The press release and supplemental disclosure package were distributed this morning and will be furnished on form 8-K to provide to access to the widest possible audience. In the press release, and supplemental disclosure packages we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with regular G requirements. If you did not receive a copy these documents are available on our website at www.lxp.com in the investor relations section. Additional we will host a live webcast of today's call, which you can access in the same section. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions, Lexington can give no assurance that it's expectations will be attained. Factors and risks that could actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today's press release, and from time to time in Lexington's filings with the SEC. We do not undertake a duty to update any forward-looking statements. With us today from management include Will Eglin, CEO and President; Robert Roskind, Chairman, Dick Rouse, Vice Chairman and Chief Investment Officer; Patrick Carroll, Chief Financial Officer; John Vander Zwaag; Executive Vice President and other members of management. I would like to turn the call over to Will for his opening remarks. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Thanks, Chris. And welcome to all of you, thank you for attending our second quarter conference call. Earlier today Lexington announced funds from operations of $0.60 per share for the second quarter of 2006. We had a variety of one-time items that add about $0.13 to FFO per share and - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 2 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- is detailed in the press release. These items consist; one 7.1 million in debt satisfaction gains relating primarily to the foreclosure of our Milpitas, California mortgage and also the satisfaction of one of our mortgages at discount. Secondly, 5.4 million of charges relating to two lease rejections,on properties formally leased to Dana Corporation and 3. 6.9 million of gains realized from selling our bankruptcy claims relating to such lease rejection for $7.1 million or about $0.75 on the dollar, which we view as a very high recovery rate for a bankruptcy claim. Adjusted for these items FFO per share was $0.47 about the same as in first quarter of 2006 and in line with your expectations. The dividend [past] ratio for the quarter was 77.6%. In the second quarter, we acquired 5 properties for an aggregate price of 66 million and a GAAP cap rate of 8.2% after acquisition volume in the first quarter of 44.1 million. Also during the quarter we invested 11.1 million to purchase a mortgage note on a property we do not own but which is leased to one of our current tenants and we also invested $9 million to satisfy one of our own mortgages which resulted in a gain. We also obtained approximately 46.2 million of non-recourse mortgage financing at a weighted average fixed rate of approximately 6.3%. Three of the properties were acquired by Lexington strategic asset Corp., which brings the LSAC portfolio to about 111 million. The main thing we talked about last quarter was the competitive state of the acquisition market and the acquisition market continues to be competitive with low cap rates and narrow spreads but we are seeing some slightly more attractive cap rates on the properties targeted to LSAC, relative to last quarter and we did have more volume in second quarter than we had in first. We have also been able to take advantage of disposition opportunities. We sold 4 properties during the quarter for approximately $44.8 million which generated gains of approximately $13.7 million. One of the properties sold was part of the site of the former Bank One operation facility in Phoenix, which has been vacant for sometime and has been a drag on operating results due to the carry cost. John Vander Zwaag will go into detail on the leasing front, we continue to make good progress on leases this year we had our first tenant in our vacant Dallas, Texas property. We put our second tenant in place in Hebron, Kentucky property and we also signed a new lease with a tenant at the Antioch, Tennessee property which was formerly leased to Dana. That tenant was formally a subtenant there. I would like to turn the call over to Pat Carroll our CFO to discuss our financial results and balance sheet. - -------------------------------------------------------------------------------- Pat Carroll - Lexington Corporate Properties Trust - CFO Thanks, Will. First, looking at the income statement, during the quarter the company's gross revenues of $51.6 million, fee income was approximately $1.3 million compared to $2.6 million in the same quarter this last year. This decrease relates primarily to LSAC acquisition we made in the second quarter of 2005. Fee income for this quarter was comprised of about $230,000 in acquisition fees and the remainder about $1.1 million in asset management fee. Quarterly G&A was relatively flat quarter-to-quarter. As Will mentioned earlier there were a few unusual items reflected in the P&L for the quarter. What I would like to do now is go through them in a little more detail and tell you where they are, in the income statement. 7.1 million in aggregate debt satisfaction gains related primarily to, as Will said the foreclosure of the Milpitas property and the repayment at a discount to mortgage on our federal mobile property in Michigan. 5.4 million in impairment charges in the accelerated amortization above market leases, related to the 2 properties formally released to Dana Corporation. Of that 5.4 million, 2.3 million is reflected on the income statement as reduction of rental revenue. 1.1 million is an impairment which is right on the face of the income statement and 2 million is reflected in the line item called equity and earnings from joint ventures. 6.9 million in aggregate gains realized on the sale of the Dana corporation bankruptcy claims, 5.3 of that amount including in the income statement in non-operating income and 1.6 million is in the JV line as the claim was sold by one of our joint ventures. Interest coverage for the quarter was about 2.3 times. Now turning to the balance sheet, we believe the balance sheet continues to be in good shape at quarter end we had about 1.2 billion of debt outstanding including debt on properties held for sale which had a weighted average interest rate of about 6% and all of our debt as of June 30th is fixed rate. Our mortgage debt amortized over time by about $305 million so our balance sheet does significantly deleverage. We had about 54.3 million of cash at quarter end and no borrowings outstanding on our $200 million line of credit. Although we did have about 32 million in letters of credit outstanding a majority of which relates to a future acquisition which we have under contract. Cash balances due to property sales, mortgage refinancing about 9 million is related to cash balances related to prepaid rents to rents we collected in advance. Balance sheet debt was about 44% of total capitalization and we are comfortable operating the company within a rage of 45 to 50, 14 million of debt is expected to amortize over the rest of this year. - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 3 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- Looking at more detail at the balance sheet included in the intangible line item is the allocation of the purchase price of properties to in-place leases, customer relationships and above or below market leases in accordance with FASB141. The impact of above or below market lease have an FFO was approximately a net negative of $400,000 for the quarter. Included in properties held for sale is the cost of 2 properties, 1, in Henderson, North Carolina and 1, in Phoenix, Arizona, which meet the definition of held for sale in accordance with FASB 144. Turning now to the other assets line item, the main components of others assets are loan escrows of about $20.7 million. Also new for the quarter is including other assets is investment in [breach] securities. At June end we had about $4.2 million invested in AFR currently about 508,000 shares of AFR with a price of about-- our average cost is about $9.89. Continuing other assets, there's construction in progress about 15.4 million, real estate deposits of about 5.3 million, notes receivable of about 33.8 million, 14 million of which relates to notes we took back on sales of properties, 8 million relates to an advance we made to one of our joint ventures and 11 million relates to the mortgage investment Will previously mentioned and finally, the last significant component of other assets is prepaid and deferred tax-- deferred tax assets of about $4.8 million. Liabilities from discontinued operations on the mortgages and those properties that are classified as held for sale and significant components of other liabilities are accrued interest of 5.9 million, deferred revenue of about 6.1 million and most of that is below market leases payables on construction in progress of about 6.9 million, a subordinated notes payable is about 2.9 million and the prepaid rent I mentioned earlier of about $9 million. Now, I would like for John Vander Zwaag the Executive Vice President and the Head of our Portfolio Management to discuss our capital recycling plan and leasing activities. John? - -------------------------------------------------------------------------------- John Vander Swaag - Lexington Corporate Properties Trust - EVP We feel very good about the progress we have made on the portfolio this year. We entered 2006 with vacancy or substantial vacancy of 4 properties. Those 4 properties were I-17 Center, Phoenix, approximately 180,000 square feet in 3 buildings. 1301 California Circle in Milpitas, California. Approximately, 100,000 square feet. Airport Center West in Hepburn, Kentucky, approximately, 80,000 square feet and 1600 Viceroy in Dallas, Texas, approximately, 250,000 [inaudible] [inaudible] Strides in addressing the challenges of each of these properties, I-17 Center has been on our list of properties targeted for sale. Last year we acquired adjacent land parcel that allowed us to enter into agreements to split the property and sell it in separate transactions to corporate users. The first of these sales closed in June on the 3 story approximately 100,000 square foot building and the approximately 20,000 square foot vault building at a price of 4.6 million and the sale of the remaining 60,000 square foot building at a price of 3 million is expected to occur in August. 1301 California Circle has been substantially vacant for years, several years, languishing in a difficult Silicon Valley leasing market. After working diligently to retenant the building over this time, we reached an agreement with our lender to allow them to foreclose on the property . The property was sold in foreclosure in June. This was effectively the sale of the property for the mortgage balance of approximately, 11.8 million versus a market value of approximately 6.25 million and as its an example of benefits of our strategy of utilizing non-recourse mortgage financing. We continue to make strides on retenating Airport Center West. This quarter we entered into a lease for approximately 9,000 square feet bring occupancy to approximately, 40%. In spite of, somewhat soft leasing conditions in this market, we are getting traffic on the remaining space in the building. In addition, we have developed a plan to add an additional 70 to 100,000 square feet of office or industrial space to this site and are beginning to process of marketing this on a build to suit basis. We are very pleased with the leasing activity at 1600 Viceroy in Dallas. Last quarter we announced our first lease in this vacant building of 48,000 square feet for a term of 10-years, rent commenced on this lease in June. This quarter we've reached a non-binding agreement on a 12-year lease for 100,000 square feet and we are working through the documentation process which would provide for a lease commencement date of January 1. This lease will bring us to 60% occupancy at this property. We also have a site currently devoted to surface parking for the building on which we can pursue development in the future. We currently have 5 tenants operating in bankruptcy. Dana continues to meet their post petition obligations on 9 of the 11 leases we had with them at the time they entered bankruptcy. We believe there's a high probability that each of these 9 leases will be affirmed. The leases in Antioch, Tennessee, which is the suburban national market and Farmington Hills, Michigan have been rejected. In Antioch we entered into a 15 year lease for 50% of the 665,000 square foot building with a previous subtenant the balance of the space is being actively marketed and we feel good about the leasing prospects for the space. As mentioned previously we sold our bankruptcy claim with respect to the Antioch lease obligation for a little over 5.6 million and these funds are being reserved for tenant improvements and leasing commissions. - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 4 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- In Farmington Hills, we have a more challenging property in terms of the the difficult market conditions in Detroit and the special purchase nature of some of the building improvements, specifically the lab space. We are in the process of evaluating the market for the building and possible physical changes to enhance it's marketability. We are engaging an agent to market the building and have had several inquiries from users regarding portions of the building. Ultimately, though, we think the property is best suited to a single user, and we will explore this alternative fully before considering a more costly multi-tenant solution. As with the Antioch claim, we have sold the bankruptcy claim with respect to the [inaudible] for 5.375 million and these funds are reserved for tenant improvements and leasing commissions. Our lease with Allied holdings on our office building in Decanter, Georgia has been affirmed this lease runs through December 2007. In the course of affirming the lease Allied also fulfilled their responsible for payment of the replacement of the roof at a cost of approximately $160,000 which we had commenced during the post petition period. Lexington will be making some discretionary capital improvements to the 112,000 square foot building prior to the expiration of the Allied lease with the expectation that we will be able to recapture greater rents in this tight submarket of Atlanta. We are also continuing our evaluation of property to construct additional improvements at this site. Our lease with Federal-Mogul on their headquarters in Southfield, Michigan was affirmed prior to our acquisition of this property. Federal-Mogul continues to fully utilize this building and an attached building, which is owned by another party. In June, we purchased the mortgages on our building and the attached building at substantial discounts to their face values. We retired the mortgage on our building and will remain as the first mortgage lean holder on the attached building. Owens Corning seems poised to emerge from bankruptcy this year. They have previously affirmed their lease on our Chester, South Carolina property, which we expanded for them and extended to a 20-year lease. They also have leased 2 distribution buildings from us in Hebron, Ohio, which is the [Columbus] market. The larger of these 2 buildings is approximately 400,000 square feet and leased through May of 2009. We expect this lease to be affirmed. The smaller building is approximately 250,000 square feet leased through February 2010. We expect Owens Corning to reject this lease before emerging from bankruptcy. Power Automotive leases an industrial building in Plymouth, Michigan, which continues to operate at a high utilization rate. We own a 30% interest in this property. The tenant is making significant capital expenditures to expand their production capacity at this site and we expect that the lease will be affirmed. Looking at our lease expirations for 2006 and 2007, we have 3 buildings where tenants have vacated or substantially reduced their operations. On lease with Lear on a 183,000 square foot industrial building in Auburn Hills, Michigan expires this month. We are marketing the property for leases and manufacturing facility, which is its highest and best use. We have some users looking at the building but nothing seems eminent. We have a 179,000 square foot warehouse in Harrisburg, Pennsylvania with a lease to Exel logistics that expires in November of this year. Exel is utilizing the space for overflow requirements in this market. We do not expect them to renew but we are optimistic about the prospects for leasing this building to another user. We have a 68,000 square foot office building held in a joint venture in the Richmond, Virginia market which was occupied by Capital One with a lease guarantee from Highwood properties that expires in November 2007. We have only recently begun marketing this 3-story building for lease on a multi-tenant basis, and we have a proposal out for full-floor lease and we are seeing good activity in this market. As for our other 2006 renewals, our lease on an office and R&D facility in Glendale, Arizona with Honeywell expired this month. HoneyWell is continuing to operate under the terms of this lease while we document a 5-year extension, which provides for a rent increase of approximately 20%. We are also beginning the process of releasing 6.5 of the 14 acres of excess land from the lease, which we will either sell or develop. The balance of the excess land is required to remain subject to the lease to meet the security requirements of the U.S. government related to the work performed by Honeywell at this location. We have a 330,000 square foot warehouse in the Harrisburg area leased to Exel Logistics which expires in November. We were talking to them about an extension on this lease while they seek to extend the contract that they service in this building. In the meantime, we have engaged a leasing agent to market the building to make sure we are fully in the market in case we are unable retain Exel. We also have a small lease on approximately 18,400 square feet at our West Palm Beach, Florida office property. - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 5 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- We've proposed a 5-year extension of this lease to the existing tenants at a rent increase of approximately 20%. Finally, for 2006, we have 2 leases with Johnson controls that expire in December, 1, is a 111,000 square foot industrial building in Overland, Ohio and the other is a 134,000 square foot industrial building in Plymouth, Michigan. We have very little clarity from Johnson controls with respect to their plans for these buildings and their renewal notice is opened through September. We are in the process of engaging brokers to market these properties, with respect to 2007 renewals, we have a 252,000 square foot warehouse leased to Exel through November 2007 in the Harrisburg market. We have agreed to 5-year extension of this lease subject to Excel's formal approval process. We have 148,000 square foot industrial building leased to Dana through August 2007in Gordonsville, Tennessee, where we are optimistic about a lease affirmation followed by an extension. The lease on our large K-mart distribution center in Warren, Ohio, expires in September 2007. We are in the appraisal process for determine the value of their purchase option for the property as the tenant as requested. As we discussed previously our lease with Allied holdings on 112,000 square foot office building in Decanter expires in December 2007. We're beginning discussions with Allied regarding a new lease on 50% of the building. The building is already 25% occupied by subtenant who we expect to retain beyond the expiration of the Allied lease. A couple of these subtenant have recently approached us about expansions and lease extensions and we like this leasing market. Over the past couple of quarters in our calls, we have talked about disposition plans. Year-to-date we have sold 6 properties for approximately 74.75 million. We have 1 property under contract for 3 million and 1 joint venture property [other intent] for $1.5 million over an existing mortgage balance of approximately 1.75 million, which will be assumed by the purchaser. We are actively marketing 1 wholly owned property and 1 joint venture property . Several of the properties that we intended to market as of the last quarterly call have been withheld from the market while we consider positive changes in tenant requirements and local market conditions that might cause us to prefer to continue to holds the properties for the foreseeable future. Therefore, we think a reasonable expectation for full years sales to be 10 to 12 properties at a combined value of 90 to 100 million in growth related matters other than those we discussed so far we are in the planning stages of an expansion of our refrigerated warehouse facility in Danville, Illinois. We decided to retain the excess land in our Kerry, North Carolina property and had preliminary discussions with Investment grade tenant regarding a 100,000, to 150,000 office build to suit at this location. We are in preliminary [distages] of discussing expansions with tenants at 3 other locations. In summary, we continue to operate at high space utilization rates. We're currently about 97.5% leased and assuming no positive developments in the portfolio, we will probably begin 2007 at approximately 96.5% leased. Now, I will turn it back over to Will. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Thanks, John. Overall, It was a good quarter for Lexington but one that reflects the impact of vacancy and rent roll down since the second quarter of last year and also the impact of slower acquisition growth, although our investment volume did increase relative to first quarter. Our balance sheet remains in good shape and we clearly have the financial flexibility to continue to execute our business plan over the balance of the year. Although, we believe the leasing environment is improving we still expect to lower rents on 2006 expirations with the one exception being the Honeywell building in Glendale and we continue to have leasing challenges especially in the automotive sector with Dana, Leer, and perhaps Johnson controls. Before turning to the Q&A, I want to make a few additional comments about the proposed Newkirk merger which we announced Monday, earlier this week. There has been a fair amount of commentary about the value of the portfolio since then. Based on the enterprise value when the transaction was announced, Newkirk portfolio is being valued by the market at a value of about $100 per square foot. We view this as a very attractive basis relative to replacement costs and I don't believe that when we look back on this transaction in the future that will we will ever regret combining this portfolio with ours at this valuation. Basically it equates to a cap rate in the low double-digits that would decline overtime to somewhere in the low to mid-7s, depending on how we do on lease roll over. I would note that many of these types of assets are valued by investors at sub 7% cap rates, due to the predictability of the income stream that results when lease renewals are at less than market levels and we note that the recent Albertson's portfolio that was sold by Newkirk recently was sold at a cap rate of about 6.5%. So I think there's a built in capital recycling opportunity in this portfolio that will have a positive impact on cash flows over time. Newkirk since their IPO has been doing a great job executing this strategy already, in addition, to reworking many of their existing leases on variable terms. There's also been quite a bit of commentary about Newkirks, above market rents and rent roll-down and the impact on FFO going-forward and the 2007 - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 6 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- guidance that we gave on our Monday conference call about the merger of $1.75 to $1.85, per share in 2007, basically takes out the above-market lease component of the transaction, and we note the top-end of our new 2007 guidance-range is just a few cents less than our second quarter 2006 annualized number of $1.88. The result of the future roll-down will not impact FFO, it's being taken into account now, so we'll have a very steady and stable earnings with which to grow on, and although those rents aren't going to be recognized in FFO, the cash flows are valuable and shouldn't be ignored even though they are being ignored under GAAP. When we look at Newkirk we think there's 3 reasons why the market as had difficulty fully-valuing the Newkirk portfolio in the context of being a public company, 1, is it's externally advised structure. 2, is it's characteristics of declining funds from operations, and 3, is the issue of dividend sustainability at its current level. The merger we are Lexington removes each of the impediments to achieving a full valuation of this portfolio in the public company context. Number 1, we're doing away this the advisory agreement. 2, we're recognizing the impact of renewals now, and 3, the dividend is being cut to a level that has ample coverage. So that will free up a lot of very positive cash flow. We at Newkirk have a shared vision of creating a company far greater than the one either one of us could achieve alone and we look forward to the challenge and opportunity associated with implementing that business plan. We also look forward to following our proxy materials and meeting with your shareholders to explain in detail the merits of the transaction. We believe that the near term market reaction to the transaction doesn't reflect in our view of the potential its combined companies to have to grow and creat shareholder value, and we note that we have a 2 million share stock repurchase plan authorization, and we would expect to be active in the market at today's price. Lastly, there seems to be some concern in the market that Lexington Management has not been accessible to discuss the transaction. Let me reiterate what I often say which is that if you have any questions about Lexington or any aspect of our business, including the Newkirk transaction, please feel free to call me directly my phone number is 212-692-7242. We would be delighted to talk directly with anybody who has any questions, and as I said we are in the process of preparing detail proxy material about the transaction. We look forward to getting it in the hands of our shareholders and meeting directly to explain the transaction including the benefits that we expect to achieve over time. With that operator we will turn it back to you for question and answer session. QUESTION AND ANSWER - -------------------------------------------------------------------------------- Operator [OPERATOR INSTRUCTIONS] Our first question comes from John Guinee with Stifel Nicolaus. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst Well Will, congratulation because what you did in the last 5 minutes is articulate the transaction about 100 times better than was done on Monday. Very, very nice job. Can you talk through-- just so everyone understands-- sort of the 4 or 5 hot buttons when you evaluated the cash flows of LXP and combined them with the cash flows of Newkirk? I mean my sense is what you did was you ran it out 5 or 10 years and the additive was better than the LXP going forwarded. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO You are absolutely right, John. And there are lots of aspects to that one thing is in the Newkirk portfolio you have very high credit quality and you have a fairly large portfolio of free and clear assets so if we do and in many cases it would be sort of the worse-case from a cash flow standpoint where you get renewals exercises specified rents that are low, but given the securities of those income streams they can be sold out to investors at very, very low cap rates, and we can take that capital then and reinvest it in something different and on a levered basis to enhance our ROE at that moment in time. That's certainly one aspect. The added balance sheet flexibility that the combined companies have to continue to grow. The fact that the Newkirk assets by and enlarge are in better markets than the Lexington portfolio. So it's a different portfolio. It is characterized by having those renewal rents at specified levels, but that can lead to just very, very certain cash flows that can be sold off to investors that want that kind of characteristic. So when we looked at our model, and believe me first and foremost in our mind was will we if we look 3, 4, 5 years out will we have greater funds from operations per share and cash flow to distribute to shareholders. I mean, that's ultimately, the most important question to us. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 7 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- Good. Well done. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO And I apologize if we didn't do a good job of doing that on Monday, but you know, it's not every day we announce a very, very significant merger transaction like this, so-- - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst Let's just say the last 5 minutes was much better than the hour on Monday. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Thanks, John. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst Well done. - -------------------------------------------------------------------------------- Operator Our next question comes from Ken Avalos with Raymond James please go ahead. - -------------------------------------------------------------------------------- Ken Avalos - Raymond James - Analyst Thanks, guys and we echo-those comments that was very helpful those comments at the end. Can you help me understand, John hit the key question from our perspective, but help me understand when you say your cash flows will be better 3, 4, 5 years out and maybe give us some examples of some of the leases that Newkirk has worked on in the past couple of quarters and help us understand some of the terms that you think you can -- some of the terms that you'll target on blending and extending or whatever it is you are going to do to work on those roll-downs, coming up in the next few years here, Thanks. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO One thing that I would point you to is Newkirk has put out a pretty detailed press release, sort of recap-- recasting the activity that they have completed recently. But inherent in a portfolio like this, where you have high rents now and future rents that may go down is an opportunity, to have discussions directly with tenants to, flatten that out and work with tenants. Maybe they will want to have capital invested in the building in connection with recasting a lease like that. So I think there will be-- and it's been a portfolio that's been very actively worked since it's IPO and I think you are going to see those characteristics going forward, and I also think it's a very, very [traconiun] assumption to assume that every renewal gets exercised just because it maybe viewed as below market that may very well be the case with respect to retail properties but our experience has been with single tenant office buildings that those companies don't necessarily want to stay in the real estate business just if they think they can work an asset and spend money to retenant just to make a couple dollar spread. Given the fact that the portfolio is largely office in nature, I think there's much more an opportunity on the back end to work it, relative to what people are giving us credit for at least right at this moment. - -------------------------------------------------------------------------------- Ken Avalos - Raymond James - Analyst Do you have any sense as to when you are going to try to get the merger proxy done or out? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 8 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- We are working on it right now, and we're targeting the middle of August. - -------------------------------------------------------------------------------- Ken Avalos - Raymond James - Analyst Thanks. - -------------------------------------------------------------------------------- Operator Our next question comes from Philip Martin with Cantor Fitzgerald, please go ahead. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Good afternoon, everybody. A couple things, first of all, with your rent roll downs in the Lexington portfolio, or rents in general, when do you expect those to start to trend positive. As you start-- it sounds like '06 still rolling done but as you look into '07, knowing the markets, knowing the leases, knowing the assets, do you expect that to start trending up at some point in '07 or flat or still down? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Well it's all asset specific to some extent. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Yes. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO And obviously depends what you are rolling off of, but in general I think that we're kind of approaching that water mark in many markets already, and I think-- so I think that over the course of the next 18, 24 months, we're expecting particularly in some of these office markets to see some -- start to see some trending towards the positive. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst And my sense is you're declining are declining at a lower rate? On the rent roll downs. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Yes, we have fewer and fewer of those. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Exactly. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO But portfolio mature as we get into more and more market rate options where options exist. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 9 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- Okay then with some of the leasing challenges that you have here with the Johnson Controls, with Lear, et cetera, does it make sense-- you have a nice vehicle now in Lexington Strategic, does it make sense to put some of those assets into Lexington Strategic because they are possibly viewed as more opportunistic, more challenging for the read, per se? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO No, we view Lexington Strategic is really a separate platform we don't want to have intercompany dealings with respect to valuing assets that might go back and forth. Believe me the Lexington-- the mother ship, if you will, is fully capable of releasing and managing the buildings as they come off lease. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Okay. Good and then with respect to Newkirk, when you look at the Newkirk portfolio, can you talk a little bit about the, again going back to this-- you expect cash flow to be better, funds from operation to be hire, slash better 3 to 5 years out, could you talk about potential asset sales that you might expect in '07, '08, to possibly deal with some of the rent roll-down issues or challenges and than secondarily can you talk about opportunities within that portfolio in terms of expansion or under utilized land it's my sense that you have kind of a high grade problem and you touched on it here-- is that you have a high quality credit base, where you are probably going to get 80% renewal rates but you are dealing with rent roll downs. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Philip, there are opportunities we have spent a fair amount of work-- a lot of work going around and looking at these properties and visiting with tenants. I can't be specific about what we think are actual opportunities as it relates to what we might, look at disposing. I would just point out that the Newkirk team has been executing already. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Uh-huh. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO On an quite an aggressive disposition and recycling program. The one thing I would say and I think this will be a clear advantage is, now we have a very large portfolio of high quality single tenant real estate. Some of it, yes, is characterized by rents higher now than they will be in a few years, but as we work through and extend leases, we're going to be able to take this portfolio and design, perhaps, specific joint venture portfolios to add additional institutional capital to our company, and I think that being able to maximize value in that way by having different opportunities to sort of tranche out our portfolio and create programs with institutions, I think that's also going to be an embedded, part of the transaction that's going to create, cash flow and shareholder value over time. - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Okay. Okay. That's-- that's helpful. Well very last question is-- I know on Monday you had mentioned, Newkirk has estimated they rent roll-down issue at 100 million. You were at 150. Could you just briefly describe where the difference is? Where-- were in your assumptions. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO We just, when we were calculating our sort of new FFO for New-co. We went out and looked at what we think to really be the kind of conservative case out there and it is market or there are cases where it's below market, but like I said, there's no way that actuarially every below market renewal gets exercises in that portfolio. Okay, so there's no expected positive from that built in to, the guidance in terms of FFO. And like I said, if those renewals were to get exercised we would look then to trade out of those properties to 10-31 investors and redeploy capital into something that was more attractive from a yield standpoint. - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 10 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Philip Martin - Canto Fitzgerald - Analyst Okay. That's helpful. And it expands your obviously capital sources so-- okay. Fair enough. Thank you, again. - -------------------------------------------------------------------------------- Operator Our next question come is a follow-up question from John Guinee with Stifel Nicolaus. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst Please go ahead. Pardon me. John can you please press star 1 again. Please go ahead with your question. Oh. It looks to me like when you did when you bout the Newkirk portfolio is you effectively reduced the dividend paid to Newkirk shareholders from a $1.60 on a $16 share price to A $1.50 dividend on a $20 share price. Is that a fair way to look at it? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Yes, I mean I guess the steps are on a per Newkirk share today it's 1.60 to 1.20 and then grossed up for the exchange ratio that's where you get back to the 1.50 our indicated dividend level post. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst Okay. So the dividend yield for the Newkirk shareholders basically went from 10 to 7.5%? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Yes. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst And so essentially what you did was you reunderwrote their IPO and told the shareholders the 10% dividend wasn't sustainable. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO We didn't-- that's not what we did. But as a result of the transaction, the effect would be to reduce that dividend; that's correct. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst How do you anticipate the Newkirk shareholders reacting and the overall overhang on Newkirk shares given that they obviously just went from a 10 to a 7.5. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO It's really a question for Newkirk, but our sense has been that the shareholder base there is more concentrated than ours, and generally has a long-term view about how best to create value. And I think there was an assumption in the transaction that there was a lot of work to do in the Newkirk portfolio to build up cash flow to a sustainable level. And I think that was-- that's been reflected in the trading price. - -------------------------------------------------------------------------------- John Guinee - Stifel Nicolaus - Analyst - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 11 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- Right. Okay. Thanks. - -------------------------------------------------------------------------------- Operator Ladies and gentlemen, if there are any additional questions please press the star followed by 1 at this time. As a reminder if you are using speaker equipment you may need to lift the handset before pressing the numbers. Our next question comes from Tony Paolone with J.P. Morgan, please go ahead. - -------------------------------------------------------------------------------- Tony Paolone - JP Morgan - Analyst Thanks. With respect to your stock buyback are there any restrictions or impediments given the merger to buying it back near term? - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO There's no per se restrictions, but the 10B18 safe harbor is technically isn't available us to. But any purchases we would make would be made in accordance with the securities laws. - -------------------------------------------------------------------------------- Tony Paolone - JP Morgan - Analyst Just so I understand-- because I'm not familiar with those. You are not locked up or anything like that until the merger closed you could actually be any market buying back stock under the normal ruling you would have in the merger wasn't there. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Right. There's just one safe harbor that wouldn't be available to us, but otherwise we could buy back our stock similar to as if this wasn't going on. - -------------------------------------------------------------------------------- Tony Paolone - JP Morgan - Analyst Okay. - -------------------------------------------------------------------------------- Operator Management, at this time, there are no further questions. - -------------------------------------------------------------------------------- Will Eglin - Lexington Corporate Properties Trust - President, CEO Well, once again thanks to all of you for tuning into the call and again, like I said we will look forward to completing our proxy material with respect to Newkirk and being out on the road meeting with your shareholders. Thank you. - -------------------------------------------------------------------------------- Operator Ladies and gentlemen, this concludes today's teleconference. You may now disconnect. - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 12 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. FINAL TRANSCRIPT - -------------------------------------------------------------------------------- Jul. 27. 2006 / 2:00PM ET, LXP - Q2 2006 Lexington Corporate Properties Trust Earnings Conference Call - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DISCLAIMER Thomson Financial reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes. In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies mayindicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON FINANCIAL OR THE APPLICABLE COMPANY OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. (C) 2005, Thomson StreetEvents All Rights Reserved. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Thomson StreetEvents www.streetevents.com Contact Us 13 -------------------- ---------- - -------------------------------------------------------------------------------- (C) 2006 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial. -----END PRIVACY-ENHANCED MESSAGE-----