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LXP Industrial Trust Reports Second Quarter 2022 Results

·25 min read
LXP Industrial Trust
LXP Industrial Trust

NEW YORK, Aug. 04, 2022 (GLOBE NEWSWIRE) -- LXP Industrial Trust (“LXP”) (NYSE:LXP), a real estate investment trust focused on single-tenant warehouse/distribution real estate investments, today announced results for the quarter ended June 30, 2022.

Second Quarter 2022 Highlights

  • Recorded Net Income attributable to common shareholders of $39.7 million, or $0.14 per diluted common share.

  • Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $48.9 million, or $0.17 per diluted common share.

  • Completed 0.9 million square feet of new leases and lease extensions, raising industrial Base and Cash Base Rents by 21.3% and 18.7%, respectively.

  • Acquired a warehouse/distribution facility for a cost of $59.1 million.

  • Acquired an aggregate of 60 acres of developable land in the Atlanta, Georgia and Indianapolis, Indiana markets for an aggregate investment of $2.6 million.

  • Commenced development of two warehouse/distribution facilities in the Central Florida market.

  • Invested an aggregate of $52.6 million in six ongoing development projects.

  • Repurchased and retired 6.1 million common shares for an average price of $11.45 per share.

  • Disposed of three properties for an aggregate gross sale price of $55.1 million.

Subsequent Events

  • Repurchased and retired 1.8 million common shares at an average price of $10.65 per share. Increased the repurchase authorization by 10.0 million shares.

  • Amended unsecured credit facility extending the maturity of the revolving credit portion to July 2026.

  • Disposed of three properties for an aggregate gross sales price of $92.0 million.

  • Completed 0.3 million square feet of new leases and lease extensions, raising industrial Base and Cash Rents by 47.0% and 40.7%, respectively.

T. Wilson Eglin, Chairman and Chief Executive Officer of LXP, commented, “Our second quarter results were strong as our industrial portfolio continues to perform well with high occupancy and positive leasing outcomes. Industrial cash rents for extended leases increased 19% on approximately half a million square feet of leasing volume and industrial same store NOI grew 5.8% during the quarter. Our compelling mark-to-market opportunity on industrial leases rolling through 2028, combined with the execution of leases with rental escalations on average of 3% or higher, continue to strengthen our long-term internal growth profile.”

FINANCIAL RESULTS

Revenues

For the quarter ended June 30, 2022, total gross revenues were $79.8 million, compared with total gross revenues of $81.5 million for the quarter ended June 30, 2021. The decrease is primarily attributable to property sales, including the recapitalization of our special purpose industrial portfolio now owned in a non-consolidated joint venture, which was partially offset by acquisitions.

Net Income Attributable to Common Shareholders

For the quarter ended June 30, 2022, net income attributable to common shareholders was $39.7 million, or $0.14 per diluted share, compared with net income attributable to common shareholders for the quarter ended June 30, 2021 of $71.0 million, or $0.26 per diluted share.

Adjusted Company FFO

For the quarter ended June 30, 2022, LXP generated Adjusted Company FFO of $48.9 million, or $0.17 per diluted share, compared to Adjusted Company FFO for the quarter ended June 30, 2021 of $52.2 million, or $0.18 per diluted share.

Dividends/Distributions

As previously announced, LXP declared a regular quarterly common share/unit dividend/distribution for the quarter ending June 30, 2022 of $0.12 per common share/unit which was paid on July 15, 2022 to common shareholders/unitholders of record as of June 30, 2022.

LXP also announced that it declared a cash dividend of $0.8125 per share of Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ending June 30, 2022, which is expected to be paid on August 15, 2022 to Series C Preferred shareholders of record as of July 29, 2022.

TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS(1)

 

 

Property Type

 

Market

 

Sq. Ft.

 

Initial Basis
($000)

 

Approximate
Lease Term
(Yrs)

 

% Leased at
Acquisition

Warehouse/distribution

 

Phoenix, AZ

 

268,872

 

$

59,140

 

15.0

 

100%

1.   In addition, an aggregate of 60 acres of developable land in the Atlanta, Georgia and Indianapolis, Indiana markets were acquired for an aggregate investment of $2.6 million.

Year to date total 2022 acquisition activity was $131.2 million at aggregate weighted-average GAAP and Cash stabilized capitalization rates of 4.5% and 4.0%, respectively.

DISPOSITIONS

Location

 

Property Type

 

Gross
Disposition
Price
($000)

 

Annualized Net
Income
(1)
($000)

 

Annualized
NOI(1)
($000)

 

Month of Disposition

 

% Leased

Tucson, AZ

 

Office

 

$

7,784

 

$

462

 

$

571

 

April

 

100%

Shreveport, LA

 

Industrial

 

 

21,442

 

 

951

 

 

1,401

 

April

 

100%

Shreveport, LA

 

Industrial

 

 

25,880

 

 

1,110

 

 

1,728

 

April

 

100%

 

 

 

 

$

55,106

 

$

2,523

 

$

3,700

 

 

 

 

1.   Generally, quarterly period prior to sale, annualized.

The above properties were sold at aggregated weighted-average GAAP and Cash capitalization rates of 6.2% and 6.7%, respectively.

DEVELOPMENT PROJECTS

 

 

 

 

Project (% owned)

 

# of
Buildings

 

Market

 

Estimated
Sq. Ft.

 

Estimated
Project
Cost
(1)
($000)

 

GAAP
Investment Balance

as of
06/30/22

($000)

 

LXP
Amount
Funded as of
06/30/22
($000)
(2)

 

Estimated
Building
Completion
Date

 

% Leased
as of
06/30/22

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Cubes at Etna East (95%)

 

1

 

Columbus, OH

 

1,074,840

 

$

72,100

 

$

52,136

 

$

44,449

 

3Q 2022

 

—%

Ocala (80%)

 

1

 

Central Florida

 

1,085,280

 

 

83,100

 

 

60,483

 

 

49,711

 

4Q 2022

 

—%

Cotton 303 (93%)(3)

 

2

 

Phoenix, AZ

 

880,678

 

 

84,200

 

 

47,798

 

 

39,150

 

4Q 2022

 

45%

Mt. Comfort (80%)

 

1

 

Indianapolis, IN

 

1,053,360

 

 

65,500

 

 

38,598

 

 

29,581

 

4Q 2022

 

—%

Smith Farms (90%)(4)

 

3

 

Greenville-
Spartanburg, SC

 

2,194,820

 

 

170,400

 

 

85,704

 

 

60,704

 

4Q 2022 -
 2Q 2023

 

36%

South Shore (100%)

 

2

 

Central Florida

 

270,885

 

 

40,500

 

 

9,680

 

 

9,367

 

2Q 2023

 

—%

 

 

 

 

 

 

 

 

$

515,800

 

$

294,399

 

$

232,962

 

 

 

 

1.   Estimated project cost includes estimated tenant improvements and leasing costs and excludes potential developer partner promote, if any.
2.   Excludes noncontrolling interests' share.
3.   Pre-leased 392,278 square foot facility subject to a 10-year lease commencing upon substantial completion of the facility.
4.   Pre-leased one 797,936 square foot facility subject to a 12-year lease commencing upon substantial completion of the facility.


LAND HELD FOR DEVELOPMENT

Project (% owned)

 

Market

 

Approx.
Developable
Acres

 

GAAP Investment
Balance
as of
06/30/22
($000)

 

LXP Amount Funded
as of
06/30/22
($000)(1)

Consolidated:

 

 

 

 

 

 

 

 

Reems & Olive (95.5%)

 

Phoenix, AZ

 

420

 

$

101,227

 

$

96,788

Mt. Comfort Phase II (80%)

 

Indianapolis, IN

 

116

 

 

5,076

 

 

4,033

ATL Fairburn JV (100%)

 

Atlanta, GA

 

14

 

 

1,729

 

 

1,727

 

 

 

 

550

 

$

108,032

 

$

102,548


Project (% owned)

 

Market

 

Approx.
Developable
Acres

 

GAAP Investment
Balance
as of
06/30/22
($000)

 

LXP Amount Funded
as of
06/30/22
($000)(1)

Non-consolidated:

 

 

 

 

 

 

 

 

ETNA Park 70 (90%)

 

Columbus, OH

 

66

 

$

12,931

 

$

13,468

ETNA Park 70 East (90%)

 

Columbus, OH

 

21

 

 

2,116

 

 

2,228

 

 

 

 

87

 

$

15,047

 

$

15,696

1.   Excludes noncontrolling interests' share.

 

 

LEASES

During the second quarter of 2022, LXP executed the following new leases and extensions:


 

 

NEW LEASES - FIRST GENERATION(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

Lease
Expiration Date

 

Sq. Ft.

 

 

Industrial

 

 

 

 

 

1

 

Goodyear (2)

AZ

 

 

02/2033

 

392,278

1

 

TOTAL NEW LEASES - FIRST GENERATION

 

 

 

           392,278


 

 

LEASE EXTENSIONS - SECOND GENERATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

Prior
Term

 

Lease
Expiration Date

 

Sq. Ft.

 

 

Industrial

 

 

 

 

 

 

 

1

 

Lafayette

IN

 

 

09/2024

 

09/2029

 

309,400

2

 

Olive Branch

MS

 

 

05/2023

 

05/2028

 

151,691

2

 

TOTAL EXTENDED LEASES - SECOND GENERATION

 

 

 

 

 

           461,091



1.   No prior leases. This tenant leased first generation space in the Cotton 303 development project.
2.   Lease expiration date is estimated.

As of June 30, 2022, LXP's stabilized industrial portfolio was 99.3% leased. A total of 0.9 million square feet of new and extended leases were entered into. Base and Cash Base Rents increased by 21.3% and 18.7%, respectively, for extended industrial leases.

BALANCE SHEET/CAPITAL MARKETS

During the second quarter of 2022, LXP repurchased and retired 6.1 million common shares for an average price of $11.45 per share. Subsequent to June 30, 2022, LXP repurchased and retired 1.8 million common shares for an average cost of $10.65 per share. As of June 30, 2022, LXP had an aggregate of $183.4 million under unsettled forward common share sales contracts, which are subject to adjustment in accordance with the forward sales contracts.

As of June 30, 2022, LXP ended the quarter with net debt to Adjusted EBITDA at 6.8x (or 6.1x including forward common share sales contracts). LXP's total consolidated debt was $1.6 billion at quarter end with 85% at fixed rates. The total consolidated debt had a weighted-average term to maturity of 6.5 years and a weighted-average interest rate of 2.9% as of June 30, 2022.

Subsequent to June 30, 2022, LXP replaced its unsecured revolving credit facility and 2025 term loan with a new unsecured revolving credit facility and the continuation of the 2025 term loan, which (i) extended the maturity date of the revolving portion from February 2023 to July 2026, with two six-month extension options, subject to certain conditions, (ii) reduced the applicable margin for the revolving portion by five basis points and allows for further reductions upon the achievement of to-be-determined sustainability metrics, and (iii) improved debt covenants by reducing the capitalization rate from 7.25% to 6.0% for determining asset value. The unsecured revolving credit facility and 2025 term loan were transitioned to SOFR.

2022 EARNINGS GUIDANCE

LXP now estimates that its net income attributable to common shareholders for the year ended December 31, 2022 will be within an expected range of $0.37 to $0.41 per diluted common share. LXP is also reaffirming that its Adjusted Company FFO for the year ended December 31, 2022, will be within an expected range of $0.64 and $0.68 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

SECOND QUARTER 2022 CONFERENCE CALL

LXP will host a conference call today, August 4, 2022, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended June 30, 2022. Interested parties may participate in this conference call by dialing 1-855-459-0167 or 1-973-528-0145 (U.S.). International: https://callcia.com/international-numbers/. Conference ID is 140668. A replay of the call will be available through November 4, 2022, at 1-800-332-6854 or 1-973-528-0005, pin code for all replay numbers is 140668. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

LXP Industrial Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) focused on single-tenant industrial real estate investments across the United States. LXP seeks to expand its industrial portfolio through acquisitions, build-to-suit transactions, sale-leaseback transactions, development projects and other transactions. For more information, including LXP's Quarterly Supplemental Information package, or to follow LXP on social media, visit www.lxp.com.

Contact:
Investor or Media Inquiries for LXP Industrial Trust:
Heather Gentry, Senior Vice President of Investor Relations
LXP Industrial Trust
Phone: (212) 692-7200 E-mail: hgentry@lxp.com

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under LXP's control which may cause actual results, performance or achievements of LXP to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in LXP's periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the potential adverse impact on LXP or its tenants from the novel coronavirus (COVID-19); (2) the authorization by LXP's Board of Trustees of future dividend declarations, (3) LXP's ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2022, (4) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (5) the failure to continue to qualify as a real estate investment trust, (6) changes in general business and economic conditions, including the impact of any legislation, (7) competition, (8) increases in real estate construction costs and construction schedule delays, (9) changes in interest rates, (10) changes in accessibility of debt and equity capital markets, and (11) future impairment charges. Copies of the periodic reports LXP files with the Securities and Exchange Commission are available on LXP's web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe LXP's future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, LXP 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 LXP's expectations will be realized.

References to LXP refer to LXP Industrial Trust and its consolidated subsidiaries. All interests in properties and loans are held, and all property operating activities are conducted, through special purpose entities, which are separate and distinct legal entities that maintain separate books and records, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

Non-GAAP Financial Measures - Definitions

LXP has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.

LXP believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating LXP's financial performance or cash flow from operating, investing or financing activities or liquidity.

Adjusted EBITDA: Adjusted EBITDA represents EBITDA (earnings before interest, taxes, depreciation and amortization) modified to include other adjustments to GAAP net income for gains on sales of properties, impairment charges, debt satisfaction gains (losses), net, non-cash charges, net, straight-line adjustments, non-recurring charges and adjustments for pro-rata share of non-wholly owned entities. LXP's calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. LXP believes that net income is the most directly comparable GAAP measure to Adjusted EBITDA.

Base Rent: Base Rent is calculated by making adjustments to GAAP rental revenue to exclude billed tenant reimbursements and lease termination income and to include ancillary income. Base Rent excludes reserves/write-offs of deferred rent receivable, as applicable. LXP believes Base Rent provides a meaningful measure due to the net lease structure of leases in the portfolio.

Cash Base Rent: Cash Base Rent is calculated by making adjustments to GAAP rental revenue to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents related to free rent periods and contractual rent increases. Cash Base Rent excludes billed tenant reimbursements and lease termination income and includes ancillary income. LXP believes Cash Base Rent provides a meaningful indication of an investments ability to fund cash needs.

Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, (6) non-cash charges, net, (7) capitalized interest and internal costs, (8) cash paid for second generation tenant improvements, and (9) cash paid for second generation lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“REITs”), LXP believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity.

First Generation Costs: Represents cash spend for tenant improvements and leasing costs for in-service development projects and expenditures contemplated at acquisition for recently acquired properties. Because all companies do not calculate First Generation Costs the same way, LXP's presentation may not be comparable to similarly titled measures of other companies.

Funds from Operations (“FFO”) and Adjusted Company FFO: LXP believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. LXP believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

LXP presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into LXP's common shares, are converted at the beginning of the period. LXP also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of LXP's real estate portfolio. LXP believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of LXP's operating performance or as an alternative to cash flow as a measure of liquidity.

GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of LXP's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate, (or has generated) divided by the acquisition/completion cost, (or sale price). Stabilized yields assume 100% occupancy and the payment of estimated costs to achieve 100% occupancy including partner promotes, if any.

Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of LXP's historical or future financial performance, financial position or cash flows. LXP defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income, net), and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, LXP's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. LXP believes that net income is the most directly comparable GAAP measure to NOI.

Second Generation Costs: Represents cash spend for tenant improvements and leasing costs to maintain revenues at existing properties and are a component of the FAD calculation. LXP believes that second generation building improvements represent an investment in existing stabilized properties.

Stabilized Portfolio: All real estate properties other than acquired or developed properties that have not achieved 90% occupancy within one-year of acquisition or substantial completion.


LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Gross revenues:

 

 

 

 

 

 

 

Rental revenue

$

77,939

 

 

$

80,572

 

 

$

156,475

 

 

$

172,217

 

Other revenue

 

1,836

 

 

 

969

 

 

 

3,578

 

 

 

1,881

 

Total gross revenues

 

79,775

 

 

 

81,541

 

 

 

160,053

 

 

 

174,098

 

Expense applicable to revenues:

 

 

 

 

 

 

 

Depreciation and amortization

 

(45,193

)

 

 

(43,044

)

 

 

(89,699

)

 

 

(85,220

)

Property operating

 

(13,702

)

 

 

(11,626

)

 

 

(28,318

)

 

 

(22,560

)

General and administrative

 

(9,296

)

 

 

(7,912

)

 

 

(20,033

)

 

 

(16,332

)

Non-operating income

 

79

 

 

 

4

 

 

 

111

 

 

 

481

 

Interest and amortization expense

 

(10,821

)

 

 

(11,474

)

 

 

(21,503

)

 

 

(22,960

)

Impairment charges

 

(1,829

)

 

 

 

 

 

(1,829

)

 

 

 

Gains on sales of properties

 

27,855

 

 

 

66,726

 

 

 

28,110

 

 

 

88,645

 

Selling profit from sales-type lease

 

9,314

 

 

 

 

 

 

9,314

 

 

 

 

Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities

 

36,182

 

 

 

74,215

 

 

 

36,206

 

 

 

116,152

 

Provision for income taxes

 

(263

)

 

 

(344

)

 

 

(680

)

 

 

(716

)

Equity in earnings (losses) of non-consolidated entities

 

5,619

 

 

 

(84

)

 

 

16,920

 

 

 

(174

)

Net income

 

41,538

 

 

 

73,787

 

 

 

52,446

 

 

 

115,262

 

Less net income attributable to noncontrolling interests

 

(240

)

 

 

(1,109

)

 

 

(526

)

 

 

(1,542

)

Net income attributable to LXP Industrial Trust shareholders

 

41,298

 

 

 

72,678

 

 

 

51,920

 

 

 

113,720

 

Dividends attributable to preferred shares – Series C

 

(1,573

)

 

 

(1,573

)

 

 

(3,145

)

 

 

(3,145

)

Allocation to participating securities

 

(58

)

 

 

(105

)

 

 

(110

)

 

 

(178

)

Net income attributable to common shareholders

$

39,667

 

 

$

71,000

 

 

$

48,665

 

 

$

110,397

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders - per common share basic

$

0.14

 

 

$

0.26

 

 

$

0.17

 

 

$

0.40

 

Weighted-average common shares outstanding – basic

 

283,568,078

 

 

 

275,568,868

 

 

 

283,604,072

 

 

 

275,493,019

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders - per common share diluted

$

0.14

 

 

$

0.26

 

 

$

0.17

 

 

$

0.40

 

Weighted-average common shares outstanding – diluted

 

285,436,441

 

 

 

277,466,056

 

 

 

287,687,397

 

 

 

276,834,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)

 

June 30, 2022

 

December 31, 2021

 

 

 

 

Assets:

 

 

 

Real estate, at cost

$

3,631,514

 

 

$

3,583,978

 

Real estate - intangible assets

 

332,646

 

 

 

341,403

 

Land held for development

 

108,032

 

 

 

104,160

 

Investments in real estate under construction

 

294,399

 

 

 

161,165

 

Real estate, gross

 

4,366,591

 

 

 

4,190,706

 

Less: accumulated depreciation and amortization

 

703,300

 

 

 

655,740

 

Real estate, net

 

3,663,291

 

 

 

3,534,966

 

Assets held for sale

 

114,546

 

 

 

82,586

 

Right-of-use assets, net

 

25,994

 

 

 

27,966

 

Cash and cash equivalents

 

49,817

 

 

 

190,926

 

Restricted cash

 

109

 

 

 

101

 

Investments in non-consolidated entities

 

59,132

 

 

 

74,559

 

Deferred expenses, net

 

22,627

 

 

 

18,861

 

Rent receivable – current

 

2,604

 

 

 

3,526

 

Rent receivable – deferred

 

67,404

 

 

 

63,283

 

Investment in a sales-type lease

 

28,013

 

 

 

 

Other assets

 

20,883

 

 

 

8,784

 

Total assets

$

4,054,420

 

 

$

4,005,558

 

 

 

 

 

Liabilities and Equity:

 

 

 

Liabilities:

 

 

 

Mortgages and notes payable, net

$

77,651

 

 

$

83,092

 

Revolving credit facility borrowings

 

120,000

 

 

 

 

Term loan payable, net

 

298,698

 

 

 

298,446

 

Senior notes payable, net

 

988,613

 

 

 

987,931

 

Trust preferred securities, net

 

127,644

 

 

 

127,595

 

Dividends payable

 

35,578

 

 

 

37,425

 

Liabilities held for sale

 

5,095

 

 

 

3,468

 

Operating lease liabilities

 

26,983

 

 

 

29,094

 

Accounts payable and other liabilities

 

81,787

 

 

 

77,607

 

Accrued interest payable

 

7,947

 

 

 

8,481

 

Deferred revenue - including below market leases, net

 

12,195

 

 

 

14,474

 

Prepaid rent

 

12,579

 

 

 

14,717

 

Total liabilities

 

1,794,770

 

 

 

1,682,330

 

 

 

 

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:

 

 

 

Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding

 

94,016

 

 

 

94,016

 

Common shares, par value $0.0001 per share; authorized 600,000,000 shares,

 

 

 

281,670,437 and 283,752,726 shares issued and outstanding in 2022 and 2021, respectively

 

28

 

 

 

28

 

Additional paid-in-capital

 

3,189,713

 

 

 

3,252,506

 

Accumulated distributions in excess of net income

 

(1,068,408

)

 

 

(1,049,434

)

Accumulated other comprehensive income (loss)

 

9,558

 

 

 

(6,258

)

Total shareholders' equity

 

2,224,907

 

 

 

2,290,858

 

Noncontrolling interests

 

34,743

 

 

 

32,370

 

Total equity

 

2,259,650

 

 

 

2,323,228

 

Total liabilities and equity

$

4,054,420

 

 

$

4,005,558

 

 

 

 

 

 

 

 

 



LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
(Unaudited and in thousands, except share and per share data)

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2021

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

39,667

 

$

71,000

 

$

48,665

 

$

110,397

 

 

 

 

 

 

 

 

Weighted-average number of common shares outstanding - basic

 

283,568,078

 

 

275,568,868

 

 

283,604,072

 

 

275,493,019

 

 

 

 

 

 

 

 

Net income attributable to common shareholders - per common share basic

$

0.14

 

$

0.26

 

$

0.17

 

$

0.40

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

Net income attributable to common shareholders - basic

$

39,667

 

$

71,000

 

$

48,665

 

$

110,397

Impact of assumed conversions

 

47

 

 

 

 

136

 

 

Net income attributable to common shareholders

$

39,714

 

$

71,000

 

$

48,801

 

$

110,397

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding - basic

 

283,568,078

 

 

275,568,868

 

 

283,604,072

 

 

275,493,019

Effect of dilutive securities:

 

 

 

 

 

 

 

Shares issuable under forward sales agreements

 

750,944

 

 

1,098,031

 

 

2,549,683

 

 

553,937

Unvested share-based payment awards

 

257,371

 

 

799,157

 

 

668,130

 

 

787,133

Operating partnership units

 

860,048

 

 

 

 

865,512

 

 

Weighted-average common shares outstanding - diluted

 

285,436,441

 

 

277,466,056

 

 

287,687,397

 

 

276,834,089

 

 

 

 

 

 

 

 

Net income attributable to common shareholders - per common share diluted

$

0.14

 

$

0.26

 

$

0.17

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 


LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

FUNDS FROM OPERATIONS:

 

 

 

 

 

 

Basic and Diluted:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

39,667

 

 

$

71,000

 

 

$

48,665

 

 

$

110,397

 

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

44,523

 

 

 

42,312

 

 

 

88,373

 

 

 

83,790

 

 

Impairment charges - real estate, including our share of non-consolidated entities

 

6,043

 

 

 

 

 

 

6,043

 

 

 

 

 

Noncontrolling interests - OP units

 

47

 

 

 

912

 

 

 

136

 

 

 

1,151

 

 

Amortization of leasing commissions

 

670

 

 

 

732

 

 

 

1,326

 

 

 

1,430

 

 

Joint venture and noncontrolling interest adjustment

 

2,823

 

 

 

2,114

 

 

 

5,973

 

 

 

4,229

 

 

Gains on sales of properties, including our share of non-consolidated entities, net of tax

 

(39,435

)

 

 

(66,726

)

 

 

(50,961

)

 

 

(88,645

)

FFO available to common shareholders and unitholders - basic

 

54,338

 

 

 

50,344

 

 

 

99,555

 

 

 

112,352

 

 

Preferred dividends

 

1,573

 

 

 

1,573

 

 

 

3,145

 

 

 

3,145

 

 

Amount allocated to participating securities

 

58

 

 

 

105

 

 

 

110

 

 

 

178

 

FFO available to all equityholders and unitholders - diluted

 

55,969

 

 

 

52,022

 

 

 

102,810

 

 

 

115,675

 

 

Selling profit from sales-type lease(1)

 

(9,314

)

 

 

 

 

 

(9,314

)

 

 

 

 

Non-recurring costs(2)

 

719

 

 

 

130

 

 

 

1,989

 

 

 

141

 

 

Debt satisfaction losses including our share of non-consolidated entities

 

1,495

 

 

 

 

 

 

1,495

 

 

 

 

Adjusted Company FFO available to all equityholders and unitholders - diluted

 

48,869

 

 

 

52,152

 

 

 

96,980

 

 

 

115,816

 

 

 

 

 

 

 

 

 

FUNDS AVAILABLE FOR DISTRIBUTION:

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

Straight-line adjustments

 

(3,313

)

 

 

(2,930

)

 

 

(6,815

)

 

 

(4,950

)

 

Lease incentives

 

129

 

 

 

194

 

 

 

263

 

 

 

413

 

 

Amortization of above/below market leases

 

(481

)

 

 

(437

)

 

 

(961

)

 

 

(897

)

 

Lease termination payments, net

 

 

 

 

(661

)

 

 

 

 

 

1,543

 

 

Non-cash interest

 

820

 

 

 

819

 

 

 

1,639

 

 

 

1,637

 

 

Non-cash charges, net

 

1,598

 

 

 

1,811

 

 

 

3,696

 

 

 

3,575

 

 

Capitalized interest and internal costs

 

(1,885

)

 

 

(705

)

 

 

(3,051

)

 

 

(1,396

)

 

Second generation tenant improvements

 

(285

)

 

 

(716

)

 

 

(4,517

)

 

 

(735

)

 

Second generation lease costs

 

(617

)

 

 

(822

)

 

 

(758

)

 

 

(3,054

)

 

Joint venture and noncontrolling interest adjustment

 

130

 

 

 

46

 

 

 

(219

)

 

 

(127

)

Company Funds Available for Distribution

$

44,965

 

 

$

48,751

 

 

$

86,257

 

 

$

111,825

 

 

 

 

 

 

 

 

 

 

Per Common Share and Unit Amounts

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

FFO

$

0.19

 

 

$

0.18

 

 

$

0.35

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

FFO

$

0.19

 

 

$

0.18

 

 

$

0.35

 

 

$

0.41

 

 

Adjusted Company FFO

$

0.17

 

 

$

0.18

 

 

$

0.33

 

 

$

0.41

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding - basic EPS

 

283,568,078

 

 

 

275,568,868

 

 

 

283,604,072

 

 

 

275,493,019

 

 

Operating partnership units(3)

 

860,048

 

 

 

2,793,718

 

 

 

865,512

 

 

 

2,822,907

 

 

Weighted-average common shares outstanding - basic FFO

 

284,428,126

 

 

 

278,362,586

 

 

 

284,469,584

 

 

 

278,315,926

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding - diluted EPS

 

285,436,441

 

 

 

277,466,056

 

 

 

287,687,397

 

 

 

276,834,089

 

 

Operating partnership units(3)

 

 

 

 

2,793,718

 

 

 

 

 

 

2,822,907

 

 

Unvested share-based payment awards

 

10,140

 

 

 

44,489

 

 

 

34,762

 

 

 

26,808

 

 

Preferred shares - Series C

 

4,710,570

 

 

 

4,710,570

 

 

 

4,710,570

 

 

 

4,710,570

 

 

Weighted-average common shares outstanding - diluted FFO

 

290,157,151

 

 

 

285,014,833

 

 

 

292,432,729

 

 

 

284,394,374

 

(1)   Gain recognized upon exercise of the tenant's purchase option in the lease.
(2)   Includes transaction, strategic alternatives and costs related to shareholder activism.
(3)   Includes all OP units other than OP units held by us.


LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES

 

 

 

 

2022 EARNINGS GUIDANCE

 

 

 

 

Twelve Months Ended
December 31, 2022

 

Range

Estimated:

 

 

 

Net income attributable to common shareholders per diluted common share(1)

$

0.37

 

 

$

0.41

 

Depreciation and amortization

 

0.66

 

 

 

0.66

 

Impact of capital transactions

 

(0.39

)

 

 

(0.39

)

Estimated Adjusted Company FFO per diluted common share

$

0.64

 

 

$

0.68

 

(1)   Assumes all convertible securities are dilutive.