Lexington Realty Trust Reports Third Quarter 2012 Results

Lexington Realty Trust Reports Third Quarter 2012 Results

NEW YORK, Nov. 6, 2012 (GLOBE NEWSWIRE) -- Lexington Realty Trust
("Lexington") (NYSE:LXP), a real estate investment trust focused on
single-tenant real estate investments, today announced results for the third
quarter ended September 30, 2012.

Third Quarter 2012 Highlights

  *Generated Company Funds From Operations, as adjusted ("Company FFO, as
    adjusted"), of $45.5 million or $0.25 per diluted common share.
  *Increased quarterly common share dividend by 20%.
  *Executed 17 new and extended leases, totaling 1.4 million square feet and
    ended the quarter with overall portfolio occupancy of 97.6%.
  *Raised $68.1 million of gross proceeds from dispositions.
  *Closed property acquisitions of $51.2 million and invested $20.2 million
    in on-going build-to-suit projects.
  *Acquired remaining interest in Net Lease Strategic Assets Fund ("NLS").
  *Entered into agreements to fund the construction of two build-to-suit
    projects for approximately $51.0 million.
  *Retired $75.1 million of secured debt which had a weighted-average fixed
    rate of 6.4%.

Subsequent to Quarter End Highlights

  *Issued 17.25 million common shares in a public offering, raising net
    proceeds of approximately $156.3 million.
  *Satisfied $93.0 million of credit facility borrowings and repaid $57.5
    million of indebtedness assumed in the acquisition of NLS.
  *Retired $15.9 million of secured debt, which had a weighted-average fixed
    rate of 5.8%.
  *Converted approximately $20.4 million original principal amount of 6.00%
    Convertible Guaranteed Notes to approximately 2.9 million common shares.
  *Expanded seven-year term loan facility by $40.0 million.
  *Executed 0.4 million square feet of new and extended leases.

T. Wilson Eglin, President and Chief Executive Officer of Lexington, stated,
"We reported another quarter of strong operating results supported by
successful leasing activity, favorable asset recycling, attractive external
growth opportunities and refinancing maturing debts on advantageous terms. The
execution of our business plan in each of these areas allowed us to increase
our quarterly common share dividend by 20% ahead of schedule andtighten our
guidance for Company FFO, as adjusted, for 2012 to an expected range of $0.96
- $0.98 per share. Subsequent to quarter end, we reduced our leverage by
approximately $147.0 million, further strengthening our balance sheet and
positioning the Company to continue to grow into next year."

                              FINANCIAL RESULTS

Revenues

For the quarter ended September 30, 2012, total gross revenues were $87.7
million, compared with total gross revenues of $79.8 million for the quarter
ended September 30, 2011. The increase is primarily due to property
acquisitions and an increase in occupancy.

Company FFO, As Adjusted

For the quarter ended September 30, 2012, the Company generated Company FFO,
as adjusted, of $45.5 million, or $0.25 per diluted share, compared to Company
FFO, as adjusted, for the quarter ended September 30, 2011 of $41.4 million,
or $0.23 per diluted share. The calculation of Company FFO, as adjusted, and a
reconciliation to net income (loss) is included later in this press release.

Net Income (Loss) Attributable to Common Shareholders

For the quarter ended September 30, 2012, net income attributable to common
shareholders was $169.0 million, or income of $0.96 per diluted share,
compared with net loss attributable to common shareholders for the quarter
ended September 30, 2011 of $(37.0) million, or a loss of $(0.24) per diluted
share. The increase in net income is primarily due to a $167.9 million gain
recognized in the acquisition of the remaining interest in NLS.

Net Lease Strategic Assets Fund

During the third quarter of 2012, Lexington acquired Inland American (Net
Lease) Sub, LLC's interest in NLS. As a result, Lexington now controls 100% of
NLS. At September 30, 2012, NLS had 40 properties totaling 5.5 million square
feet in 23 states, plus a 40% tenant-in-common interest in an office property.

Capital Activities and Balance Sheet Update

During the third quarter of 2012, Lexington (1) borrowed an additional $9.0
million on its seven-year term loan and swapped the LIBOR rate on such
borrowings for a current fixed rate of 3.4% and (2) repaid $75.1 million in
secured debt, with a weighted-average interest rate of 6.4%, scheduled to
mature through 2015.

Subsequent to September 30, 2012, Lexington issued 17.25 million common shares
in a public offering, raising net proceeds of approximately $156.3 million.
The net proceeds were primarily used to satisfy $93.0 million of outstanding
debt on Lexington's secured credit facility and $57.5 million to satisfy a
portion of the debt assumed in the NLS acquisition. In addition, Lexington
exercised an accordion feature within its seven-year term loan facility
increasing the total facility under the term loan to $255.0 million, all of
which is currently outstanding.

Also, subsequent to September 30, 2012, Lexington issued 2.9 million common
shares upon conversion of $20.4 million original principal amount of 6.00%
Convertible Guaranteed Notes due 2030. In connection with the conversion,
Lexington made a cash payment of approximately $1.7 million plus accrued and
unpaid interest on the notes.

Common Share/Unit Dividend/Distribution

Lexington declared a regular quarterly dividend/distribution for the quarter
ended September 30, 2012 of $0.15 per common share/unit, which was paid on
October 15, 2012 to common shareholders/unitholders of record as of September
28, 2012. This represents a 20% increase over the previous
dividend/distribution.

                             OPERATING ACTIVITIES

Leasing

During the third quarter of 2012, Lexington executed 17 new and extended
leases for 1.4 million square feet and ended the quarter with overall
portfolio occupancy of 97.6%. The extended leases increased annual cash rents
from $11.0 million to $14.4 million.

Subsequent to quarter end, Lexington executed 0.4 million square feet of new
and extended leases.

Capital Recycling

Dispositions

During the third quarter of 2012, Lexington disposed of its interests in four
properties to unrelated parties for an aggregate gross sales price of $68.1
million.

Investment Activity

Build-to-Suit Projects

Lexington closed on the acquisition of the 99,000 square foot build-to-suit
office property in Saint Joseph, Missouri for a capitalized cost of $17.6
million (9.8% initial cap rate). The property is net-leased for a 15-year
term.

Lexington completed the 150,000 square foot build-to-suit office property in
Jessup, Pennsylvania for a capitalized cost of $24.9 million (9.4% initial cap
rate). The property is net-leased for a 15-year term.

Lexington completed the 52,000 square foot build-to-suit retail property in
Valdosta, Georgia for a project cost of approximately $8.7 million (9.3%
initial cap rate). The property is net-leased for a 15-year term.

Lexington entered into an $8.4 million build-to-suit commitment to construct a
52,000 square foot retail property in Opelika, Alabama, which will be
net-leased upon completion for a 15-year term (9.3% initial cap rate).

Lexington entered into a $42.6 million build-to-suit commitment to construct a
813,000 square foot industrial property in Rantoul, Illinois, which will be
net-leased upon completion for a 20-year term (8.0% initial cap rate).

In addition, Lexington continues to fund the construction of, or is under
contract to acquire, the previously announced build-to-suit projects in (1)
Denver, Colorado (8.6% initial cap rate), (2) Long Island City, New York (8.5%
initial cap rate) and (3) Eugene, Oregon (9.0% initial cap rate).

The aggregate estimated cost of these five on-going build-to-suit projects is
approximately $152.9 million of which $45.0 million was invested as of
September 30, 2012. Lexington can give no assurance that any of the
build-to-suit projects that are under contract or in process will be
completed.

Joint Venture Investments

During the quarter ended September 30, 2012, Lexington formed a joint venture
in which it has a minority ownership interest. The joint venture entered into
a contract to acquire a 120,000 square foot retail property in Palm Beach
Gardens, Florida for $29.8 million, which will be net-leased at closing for an
approximately 15-year term (9.6% cap rate). Lexington can give no assurances
that this acquisition will be consummated.

                            2012 EARNINGS GUIDANCE

Lexington tightened its estimate of Company FFO, as adjusted, to an expected
range of $0.96 to $0.98 per diluted share for the year ended December 31, 2012
from a range of $0.95 to $0.98 per diluted share. This guidance is forward
looking, excludes the impact of certain items and is based on current
expectations.

                      THIRD QUARTER 2012 CONFERENCE CALL

Lexington will host a conference call today, Tuesday, November 6, 2012, at
11:00 a.m. Eastern Time, to discuss its results for the quarter ended
September 30, 2012. Interested parties may participate in this conference call
by dialing 888-296-4174 or 719-325-2302. A replay of the call will be
available through November 20, 2012, at 877-870-5176 or 858-384-5517, pin:
6614681. A live webcast of the conference call will be available at
www.lxp.com within the Investor Relations section.

                         ABOUT LEXINGTON REALTY TRUST

Lexington Realty Trust is a real estate investment trust that owns, invests
in, 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 shares
are traded on the New York Stock Exchange under the symbol "LXP". Additional
information about Lexington is available on-line at www.lxp.com or by
contacting Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New
York 10119-4015, Attention: Investor Relations.

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. 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
Lexington's periodic reports filed with the Securities and Exchange
Commission, including risks related to: (1) the authorization by Lexington's
Board of Trustees of future dividend declarations, (2) Lexington's ability to
achieve its estimate of Company FFO, as adjusted, for the year ended December
31, 2012, (3) the consummation of the built-to-suit transactions, (4) the
failure to continue to qualify as a real estate investment trust, (5) changes
in general business and economic conditions, including the impact of the
current global financial and credit crisis, (6) competition, (7) increases in
real estate construction costs, (8) changes in interest rates, (9) changes in
accessibility of debt and equity capital markets, including with respect to
financings that Lexington is working on, or (10) future impairment charges.
Copies of the periodic reports Lexington files with the Securities and
Exchange Commission are available on Lexington's web site at www.lxp.com.
Forward-looking statements, which are based on certain assumptions and
describe Lexington's future plans, strategies and expectations, are generally
identifiable by use of the words "believes," "expects," "intends,"
"anticipates," "estimates," "projects", "is optimistic" 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.

References to Lexington refer to Lexington Realty Trust and its consolidated
subsidiaries. All interests in properties and loans are held through special
purpose entities, which are separate and distinct legal entities, but
consolidated for financial statement purposes and/or disregarded for income
tax purposes.

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
                                                              
                             Three Months Ended      Nine Months Ended
                              September 30,           September 30,
                             2012        2011        2012        2011
Gross revenues:                                                
Rental                        $79,915   $71,314   $226,293  $209,898
Advisory and incentive fees   297         303         1,385       1,750
Tenant reimbursements         7,443       8,219       22,379      23,660
Total gross revenues          87,655      79,836      250,057     235,308
                                                              
Expense applicable to                                          
revenues:
Depreciation and amortization (40,220)    (40,380)    (116,333)   (118,035)
Property operating            (15,446)    (15,215)    (44,415)    (44,554)
General and administrative    (5,810)     (5,080)     (17,381)    (16,055)
Non-operating income          1,383       3,369       5,688       9,108
Interest and amortization     (24,932)    (26,966)    (73,658)    (80,411)
expense
Debt satisfaction gains       12          (6)         (1,639)     3
(charges), net
Change in value of forward    —           (9,866)     —           (4,318)
equity commitment
Gain on acquisition           167,864     —           167,864     —
Litigation reserve            25          —           (2,775)     —
Impairment charges            (4,262)     (10,849)    (4,262)     (38,719)
Income (loss) before benefit
(provision) for income taxes,
equity in earnings of         166,269     (25,157)    163,146     (57,673)
non-consolidated entities and
discontinued operations
Benefit (provision) for       (296)       (263)       (803)       1,059
income taxes
Equity in earnings of         3,799       9,047       21,469      20,646
non-consolidated entities
Income (loss) from continuing 169,772     (16,373)    183,812     (35,968)
operations
                                                              
Discontinued operations:                                       
Income (loss) from            483         573         (1,152)     3,689
discontinued operations
Provision for income taxes    (53)        (15)        (62)        (53)
Debt satisfaction gains       (1,189)     —           539         (603)
(charges), net
Gains on sales of properties  6,276       182         8,946       5,251
Impairment charges            —           (15,211)    (5,690)     (76,110)
Total discontinued operations 5,517       (14,471)    2,581       (67,826)
Net income (loss)             175,289     (30,844)    186,393     (103,794)
Less net (income) loss
attributable to               (748)       (70)        (3,730)     11,183
noncontrolling interests
Net income (loss)
attributable to Lexington     174,541     (30,914)    182,663     (92,611)
Realty Trust shareholders
Dividends attributable to     —           (1,590)     (2,298)     (4,770)
preferred shares - Series B
Dividends attributable to     (1,573)     (1,675)     (4,718)     (5,055)
preferred shares - Series C
Dividends attributable to     (2,926)     (2,926)     (8,777)     (8,777)
preferred shares - Series D
Allocation to participating   (1,092)     (72)        (1,174)     (227)
securities
Deemed dividend - Series B    —           —           (2,346)     —
Redemption discount - Series  —           129         229         215
C
Net income (loss)
attributable to common        $168,950  $(37,048) $163,579  $ (111,225)
shareholders
Income (loss) per common                                       
share - basic:
Income (loss) from continuing $1.05     $(0.14)   $1.05     $(0.36)
operations
Income (loss) from            0.04        (0.10)      0.01        (0.37)
discontinued operations
Net income (loss)
attributable to common        $1.09     $(0.24)   $1.06     $(0.73)
shareholders
                                                              
Weighted-average common       154,980,137 157,205,530 154,564,041 151,676,401
shares outstanding - basic:
                                                              
Income (loss) per common                                       
share - diluted:
Income (loss) from continuing $0.93     $(0.14)   $0.97     $(0.36)
operations
Income (loss) from            0.03        (0.10)      0.01        (0.37)
discontinued operations
Net income (loss)
attributable to common        $0.96     $(0.24)   $0.98     $(0.73)
shareholders
                                                              
Weighted-average common       180,855,164 157,205,530 180,449,070 151,676,401
shares outstanding - diluted
                                                              
Amounts attributable to                                        
common shareholders:
Income (loss) from continuing $ 163,417   $ (22,448)  $ 162,893   $ (54,911)
operations
Income (loss) from            5,533       (14,600)    686         (56,314)
discontinued operations
Net income (loss)
attributable to common        $168,950  $(37,048) $163,579  $(111,225)
shareholders



LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2012 (unaudited) and December 31, 2011
(In thousands, except share and per share data)
                                                                
                                                    2012         2011
Assets:                                                          
Real estate, at cost                                 $ 3,511,146 $ 3,172,246
Investments in real estate under construction        41,676       34,529
Less: accumulated depreciation and amortization      711,132      638,368
                                                    2,841,690    2,568,407
Property held for sale - discontinued operations     8            —
Intangible assets, net                               278,710      178,569
Cash and cash equivalents                            72,424       63,711
Restricted cash                                      25,133       30,657
Investment in and advances to non-consolidated       8,698        39,330
entities
Deferred expenses, net                               51,587       43,966
Loans receivable, net                                72,786       66,619
Rent receivable                                      7,661        7,271
Other assets                                         27,835       28,290
Total assets                                         $ 3,386,532 $ 3,026,820
                                                                
Liabilities and Equity:                                          
Liabilities:                                                     
Mortgages and notes payable                          $ 1,450,457 $ 1,366,004
Credit facility borrowings                           93,000       —
Term loan payable                                    215,000      —
Exchangeable notes payable                           —            62,102
Convertible notes payable                            106,602      105,149
Trust preferred securities                           129,120      129,120
Dividends payable                                    27,956       25,273
Liabilities - discontinued operations                397          —
Accounts payable and other liabilities               74,003       53,058
Accrued interest payable                             9,728        13,019
Deferred revenue - including below market leases,    89,805       90,349
net
Prepaid rent                                         15,309       12,543
Total liabilities                                    2,211,377    1,856,617
Commitments and contingencies                                    
                                                                
Equity:                                                          
Preferred shares, par value $0.0001 per share;                   
authorized 100,000,000 shares,
Series B Cumulative Redeemable Preferred,
liquidation preference $68,522; 2,740,874 shares     —            66,193
issued and outstanding in 2011
Series C Cumulative Convertible Preferred,
liquidation preference $96,770 and $98,510;          94,016       95,706
1,935,400 and 1,970,200 shares issued and
outstanding in 2012 and 2011, respectively
Series D Cumulative Redeemable Preferred,
liquidation preference $155,000; 6,200,000 shares    149,774      149,774
issued and outstanding
Common shares, par value $0.0001 per share;
authorized 400,000,000 shares, 156,136,051 and       16           15
154,938,351 shares issued and outstanding in 2012
and 2011, respectively
Additional paid-in-capital                           2,020,858    2,010,850
Accumulated distributions in excess of net income    (1,110,166)  (1,212,630)
Accumulated other comprehensive income (loss)        (6,393)      1,938
Total shareholders' equity                           1,148,105    1,111,846
Noncontrolling interests                             27,050       58,357
Total equity                                         1,175,155    1,170,203
Total liabilities and equity                         $ 3,386,532 $ 3,026,820


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
(Unaudited and in thousands, except share and per share data)
                                                              
                             Three Months Ended     Nine Months Ended
                              September 30,           September 30,
                             2012        2011        2012        2011
EARNINGS PER SHARE:                                            
                                                              
Basic:                                                         
Income (loss) from continuing
operations attributable to    $163,417  $(22,448) $162,893  $(54,911)
common shareholders
Income (loss) from
discontinued operations       5,533       (14,600)    686         (56,314)
attributable to common
shareholders
Net income (loss)
attributable to common        $168,950  $(37,048) $163,579  $(111,225)
shareholders
                                                              
Weighted-average number of    154,980,137 157,205,530 154,564,041 151,676,401
common shares outstanding
                                                              
Income (loss) per common                                       
share:
Income (loss) from continuing $1.05     $(0.14)   $1.05     $(0.36)
operations
Income (loss) from            0.04        (0.10)      0.01        (0.37)
discontinued operations
Net income (loss)
attributable to common        $1.09     $(0.24)   $1.06     $(0.73)
shareholders
                                                              
Diluted:                                                       
Income (loss) from continuing
operations attributable to    $163,417  $(22,448) $162,893  $(54,911)
common shareholders
Impact of assumed                                              
conversions:
Share options                 —           —           —           —
Operating Partnership Units   475         —           913         —
6.00% Convertible Guaranteed  2,327       —           6,980       —
Notes
Series C Preferred shares     1,573       —           4,489       —
Income (loss) from continuing
operations attributable to    167,792     (22,448)    175,275     (54,911)
common shareholders
Income (loss) from
discontinued operations       5,533       (14,600)    686         (56,314)
attributable to common
shareholders
Net income (loss)
attributable to common        $173,325  $(37,048) $175,961  $(111,225)
shareholders
                                                              
Weighted-average common       154,980,137 157,205,530 154,564,041 151,676,401
shares outstanding - basic
Effect of dilutive                                             
securities:
Share options                 344,721     —           279,699     —
Operating Partnership Units   4,400,389   —           4,479,451   —
6.00% Convertible Guaranteed  16,419,347  —           16,412,836  —
Notes
Series C Preferred shares     4,710,570   —           4,713,043   —
Weighted-average common       180,855,164 157,205,530 180,449,070 151,676,401
shares outstanding
                                                              
Income (loss) per common                                       
share:
Income (loss) from continuing $0.93     $(0.14)   $0.97     $(0.36)
operations
Income (loss) from            0.03        (0.10)      0.01        (0.37)
discontinued operations
Net income (loss)
attributable to common        $0.96     $(0.24)   $0.98     $(0.73)
shareholders



LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
REPORTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
                                                               
                                Three Months Ended     Nine Months Ended
                                 September 30,          September 30,
                                2012       2011        2012       2011
FUNDS FROM OPERATIONS: ^(1)                                     
Basic and Diluted:                                              
Net income (loss) attributable
to Lexington Realty Trust        $174,541 $(30,914) $182,663 $(92,611)
shareholders
Adjustments:                                                    
Depreciation and amortization    39,190     41,279      118,809    120,797
Impairment charges - real estate 4,262      26,060      9,952      114,829
Impairment charges - joint       —          3,252       —          4,811
venture
Noncontrolling interests - OP    475        643         913        (315)
units
Amortization of leasing          1,212      975         3,509      2,848
commissions
Joint venture and noncontrolling (911)      (6,289)     15         (20,270)
interest adjustment
Preferred dividends - Series B & (2,926)    (4,516)     (11,075)   (13,547)
D
Gains on sales of properties     (6,276)    (182)       (8,946)    (5,251)
Gain on sale - joint venture     —          —           (7,000)    —
investment
Gain on acquisition              (167,864)  —           (167,864)  —
Interest and amortization on
6.00% Convertible Guaranteed     2,327      2,327       6,980      6,980
Notes
Reported Company FFO             44,030     32,635      127,956    118,271
Debt satisfaction charges, net   1,177      6           1,100      600
Forward equity commitment        —          9,866       —          4,318
Litigation reserve               (25)       —           2,775      —
Gains on loan sales - joint      —          (1,927)     —          (1,927)
venture
Other                            276        860         598        3,110
Company FFO, as adjusted         45,458     41,440      132,429    124,372
                                                               
FUNDS AVAILABLE FOR                                             
DISTRIBUTION: ^(2)
Adjustments:                                                    
Straight-line rents              (3,565)    (320)       408        2,673
Lease incentives                 313        521         1,143      1,568
Amortization of below/above      (913)      (937)       (3,608)    (2,215)
market leases
Non-cash interest, net           (312)      239         (1,168)    590
Non-cash general and             1,104      1,012       3,462      2,963
administrative expenses
Tenant improvements              (11,120)   (4,778)     (16,920)   (9,533)
Lease costs                      (4,222)    (1,753)     (7,853)    (10,999)
Reported Company Funds Available $26,743  $35,424   $107,893 $109,419
for Distribution
                                                               
Per Share Amounts                                               
Basic:                                                          
Reported Company FFO             $0.24    $0.18     $0.71    $0.66
Company FFO, as adjusted         $0.25    $0.23     $0.73    $0.71
Company FAD                      $0.15    $0.20     $0.60    $0.63
                                                               
Diluted:                                                        
Reported Company FFO             $0.24    $0.18     $0.71    $0.66
Company FFO, as adjusted         $0.25    $0.23     $0.73    $0.71
Company FAD                      $0.15    $0.20     $0.60    $0.63


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
REPORTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION
(CONTINUED)
(Unaudited and in thousands, except share and per share data)
                                                               
                              Three Months Ended      Nine Months Ended
                               September 30,           September 30,
Basic:                         2012        2011        2012        2011
Weighted-average common shares 154,980,137 157,205,530 154,564,041 151,676,401
outstanding - EPS basic
6.00% Convertible Guaranteed   16,419,347  16,230,905  16,412,836  16,230,905
Notes
Non-vested share-based payment 245,166     112,473     200,741     118,572
awards
Operating Partnership Units    4,400,389   4,618,948   4,479,451   4,779,896
Preferred Shares - Series C    4,710,570   5,044,564   4,713,043   5,066,264
Weighted-average common shares
outstanding - Reported Company 180,755,609 183,212,420 180,370,112 177,872,038
FFO basic
Adjustments:                                                    
Forward equity commitment      —           (3,533,848) —           (3,468,421)
settlement
Weighted-average common shares
outstanding - Company FFO, as  180,755,609 179,678,572 180,370,112 174,403,617
adjusted & FAD
                                                               
Diluted:                                                        
Weighted-average common shares
outstanding - Reported Company 180,755,609 183,212,420 180,370,112 177,872,038
FFO basic
Options - Incremental shares   344,721     116,970     279,699     269,396
Weighted-average common shares
outstanding - Reported Company 181,100,330 183,329,390 180,649,811 178,141,434
FFO diluted
Adjustments:                                                    
Forward equity commitment      —           (3,533,848) —           (3,468,421)
settlement
Weighted-average common shares
outstanding - Company FFO, as  181,100,330 179,795,542 180,649,811 174,673,013
adjusted & FAD

^1 Lexington believes that Funds from Operations ("FFO") is a widely
recognized and appropriate measure of the performance of an equity REIT.
Lexington 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 generally
accepted accounting principles ("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, Inc. ("NAREIT")
defines FFO as "net income (or loss) computed in accordance with GAAP,
excluding gains (or losses) from sales of property, plus real estate
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures." NAREIT recently clarified its computation of
FFO to exclude impairment charges on depreciable real estate owned directly or
indirectly. FFO does not represent cash generated from operating activities in
accordance with GAAP and is not indicative of cash available to fund cash
needs.

Lexington presents "Reported Company funds from operations" or "Reported
Company FFO," which differs from FFO because it includes Lexington's operating
partnership units, Lexington's 6.50% Series C Cumulative Convertible Preferred
Shares, and Lexington's 6.00% Convertible Guaranteed Notes because these
securities are convertible, at the holder's option, into Lexington's common
shares. Management believes this is appropriate and relevant to securities
analysts, investors and other interested parties because Lexington presents
Reported Company FFO on a company-wide basis as if all securities that are
convertible, at the holder's option, into Lexington's common shares, are
converted. Lexington also presents "Company funds from operations, as
adjusted" or "Company FFO, as adjusted," which adjusts Reported Company FFO
for certain items which Management believes are not indicative of the
operating results of its real estate portfolio. Management believes this is an
appropriate presentation as it is frequently requested by security analysts,
investors and other interested parties. Since others do not calculate funds
from operations in a similar fashion, Reported Company FFO and Company FFO, as
adjusted, may not be comparable to similarly titled measures as reported by
others. Reported Company FFO and Company FFO, as adjusted, should not be
considered as an alternative to net income as an indicator of our operating
performance or as an alternative to cash flow as a measure of liquidity.

^2Reported Company Funds Available for Distribution ("FAD") is calculated by
making adjustments to Company FFO, as adjusted, for (1) straight-line rent
revenue, (2) lease incentive amortization, (3) amortization of above/below
market leases, (4) cash paid for tenant improvements, (5) cash paid for lease
costs, (6) non-cash general and administrative expenses, and (7) non-cash
interest, net. Although FAD may not be comparable to that of other REITs,
Lexington 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.

CONTACT: Investor or Media Inquiries, T. Wilson Eglin, CEO
         Lexington Realty Trust
         Phone: (212) 692-7200 E-mail: tweglin@lxp.com