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 ============ ============ ============ ============
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