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) |
|
ApproximateLease Term(Yrs) |
|
% Leased atAcquisition |
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 |
|
GrossDispositionPrice($000) |
|
Annualized
NetIncome(1)($000) |
|
AnnualizedNOI(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) |
|
# ofBuildings |
|
Market |
|
EstimatedSq. Ft. |
|
EstimatedProjectCost(1)($000) |
|
GAAPInvestment Balance as
of06/30/22($000) |
|
LXPAmountFunded as
of06/30/22($000)(2) |
|
EstimatedBuildingCompletionDate |
|
% Leasedas of06/30/22 |
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.DevelopableAcres |
|
GAAP InvestmentBalanceas
of06/30/22($000) |
|
LXP Amount Fundedas
of06/30/22($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.DevelopableAcres |
|
GAAP InvestmentBalanceas
of06/30/22($000) |
|
LXP Amount Fundedas
of06/30/22($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.
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 |
|
LeaseExpiration 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
RelationsLXP 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
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESCONDENSED 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
SUBSIDIARIESEARNINGS PER SHARE(Unaudited and in thousands,
except share and per share data)
|
Three Months EndedJune 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
SUBSIDIARIESADJUSTED 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
SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES
|
|
|
|
2022 EARNINGS
GUIDANCE |
|
|
|
|
Twelve Months EndedDecember 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.
LXP Industrial (NYSE:LXP)
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