GlobeNewswire Inc | Nov 5, 2020 06:00AM EST

November 05, 2020

NEW YORK, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Lexington Realty Trust (Lexington) (NYSE:LXP), a real estate investment trust focused on single-tenant industrial real estate investments, today announced results for the third quarter ended September30, 2020.

Third Quarter 2020 Highlights

-- Recorded Net Income attributable to common shareholders of $40.3 million, or $0.15 per diluted common share. -- Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (Adjusted Company FFO) of $53.8 million, or $0.19 per diluted common share. -- Collected 99.9% of Cash Base Rents due during the third quarter. -- Acquired two industrial properties for an aggregate cost of $70.1 million. -- Disposed of three properties for an aggregate gross disposition price of $66.5 million. -- Increased industrial portfolio to 88.5% of gross book value of real estate assets, excluding held for sale assets. -- Issued $400.0 million aggregate principal amount of 2.70% Senior Notes due 2030 at an issuance price of 99.233% of the principal amount. -- Repurchased $61.2 million and $51.1 million aggregate principal amount of outstanding 4.25% Senior Notes due 2023 and 4.40% Senior Notes due 2024, respectively. -- Repaid the full outstanding balance of $40.0 million on the revolving credit facility. -- Raised net proceeds of approximately $6.7 million through the ATM program. -- Entered into forward sales transactions through the ATM program for 3.9 million common shares at an initial weighted-average price of $11.23 per common share. -- Completed 1.3 million square feet of new leases and lease extensions.

Subsequent Events

-- Disposed of three properties for an aggregate gross disposition price of $39.6 million. -- Entered into an agreement to fund a build-to-suit industrial property in the Phoenix, Arizona market for an estimated cost of $72.0 million, which will be subject to a 15-year net lease. -- Declared quarterly common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%.

Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.

T. Wilson Eglin, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, Our operations continued to produce strong results in the third quarter. We collected nearly 100% of Cash Base Rent and increased our percentage leased to 98.9%. To-date, we have added $429.8 million of high-quality industrial assets to our portfolio. We have made significant progress toward our goal of transitioning to a 100% industrial REIT, with industrial exposure representing 88.5% of total gross real estate assets, excluding held-for-sale assets, at quarter end. Given our strong results and continued progress, we are increasing our annualized common share dividend by 2.4% to $0.43 per common share."

FINANCIAL RESULTS

Revenues

For the quarter ended September30, 2020, total gross revenues were $84.5 million, compared with total gross revenues of $81.6 million for the quarter ended September30, 2019. The increase is primarily attributable to acquisitions, partially offset by property sales and a decrease in fee income.

Net Income Attributable to Common Shareholders

For the quarter ended September30, 2020, net income attributable to common shareholders was $40.3 million, or $0.15 per diluted share, compared with net income attributable to common shareholders for the quarter ended September30, 2019 of $141.6 million, or $0.59 per diluted share.

Adjusted Company FFO

For the quarter ended September30, 2020, Lexington generated Adjusted Company FFO of $53.8 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended September30, 2019 of $48.7 million, or $0.20 per diluted share.

Dividends/Distributions

As previously announced, during the third quarter of 2020, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September30, 2020 of $0.1050 per common share/unit, which was paid on October 15, 2020 to common shareholders/unitholders of record as of September30, 2020. Lexington also declared a cash dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (Series C Preferred) for the quarter ended September30, 2020, which is expected to be paid on November 16, 2020 to Series C Preferred Shareholders of record as of October 30, 2020.

Today, Lexington announced that it declared a regular quarterly common share/unit dividend/distribution for the quarter ending December 31, 2020 of $0.1075 per common share/unit payable on January 15, 2021 to common shareholders/unitholders of record as of December 31, 2020. This represents an increase of 2.4% from the previous quarterly per common share/unit dividend/distribution and equates to an annualized increase of $0.01 per common share/unit and an annualized dividend/distribution of $0.43 per common share/unit, subject to and assuming future declarations.

Lexington also announced that it declared a cash dividend of $0.8125 per share of Series C Preferred for the quarter ending December 31, 2020, which is expected to be paid on February 16, 2021 to shareholders of record as of January 29, 2021.

TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS Initial ApproximateProperty Type Market Sq. Ft. Basis Lease Term ($000) (Yrs)Industrial-Warehouse DC//distribution Baltimore, 324,535 $ 29,143 4 MDIndustrial-Warehouse Savannah, 419,667 40,908 6/distribution GA 744,202 $ 70,051

The above properties were acquired at aggregate weighted-average GAAP and Cash capitalization rates of 5.7% and 5.3%, respectively. Year to date total 2020 acquisition activity was $429.8 million at aggregate weighted-average GAAP and Cash capitalization rates of 5.5% and 5.1%, respectively.

DEVELOPMENT PROJECTS GAAP Lexington Estimated Investment Amount EstimatedProject (% owned) Market Property Estimated Project Balance as Funded as Completion Type Sq. Ft. Cost ($000) of 9/30/ of 9/30/ Date 2020 ($000) 2020 ($000) ^(1)Consolidated: Fairburn (90%) Atlanta, Industrial 910,000 $ 53,812 $ 30,638 $ 22,543 1Q 2021 GARickenbacker Columbus, Industrial 320,000 20,300 11,310 8,233 4Q 2020(100%) OH $ 74,112 $ 41,948 $ 30,776 Non-consolidated: ETNA Park 70 Columbus, Industrial TBD TBD $ 11,352 $ 11,714 TBD(90%)^(2) OHETNA Park 70 East Columbus, Industrial TBD TBD 7,391 7,431 TBD(90%)^(2) OH $ 18,743 $ 19,145

-- GAAP investment balance is in real estate under construction for consolidated projects and investments in non-consolidated entities for non-consolidated projects. -- Plans and specifications have not been completed and the estimated square footage, project cost and completion date cannot be determined.

PROPERTY DISPOSITIONS Gross AnnualizedPrimary Location Property Disposition Annualized Net NOI^(1) Month of %Tenant Type Price Income^(1) ($000) ($000) Disposition Leased ($000)Quest Lenexa, Office $ 14,351 $ 883 $ (4 ) July 100 %Diagnostics KSWal-Mart Moody, Industrial 20,046 386 478 July 26 % ALVacant^(2) Overland Office 32,112 (3,269 ) (998 ) July 0 % Park, KS $ 66,509 $ (2,000 ) $ (524 )

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

2. Sold in a foreclosure sale. Disposition price reflects non-recourse debt balance.

As of September 30, 2020, total consolidated property disposition volume was $140.6 million at weighted-average GAAP and Cash capitalization rates of 4.3% and 3.8%, respectively.

LEASING LEASE EXTENSIONS Primary Prior Lease Location Tenant/ Term Expiration Sq. Ft. Guarantor^(1) Date Industrial 1 Hebron OH Owens Corning 12/ 03/2022 250,410 20212 Hebron OH Owens Corning 12/ 03/2022 400,522 20213 Orlando FL Walgreen Co. 03/ 03/2026 205,016 20213 Total industrial 855,948 lease extensions

NEW LEASES Primary Tenant/ Lease Location Guarantor^(1) Expiration Sq. Ft. Date Industrial/ Multi-tenant1 Chillicothe OH Ernie Green 12/2021 42,264 Industries2 Chillicothe OH Pegasus 06/2026 276,112 Industries3 Henderson NC Select Tissue 02/2034 147,448 Total industrial/3 multi-tenant 465,824 leases 3 Total New Leases 465,824 6 TOTAL NEW AND 1,321,772 EXTENDED LEASES

(1) Leases greater than 10,000 square feet.

As of September30, 2020, Lexington's portfolio was 98.9% leased.

BALANCE SHEET/CAPITAL MARKETS

During the third quarter of 2020, Lexington issued $400.0 million aggregate principal amount of 2.70% Senior Notes due in 2030 at 99.233% of the principal amount. Lexington used a portion of the proceeds to repurchase $61.2 million and $51.1 million aggregate principal amount of outstanding 4.25% Senior Notes due 2023 and 4.40% Senior Notes due 2024, respectively.

During the third quarter of 2020, Lexington issued 0.6 million common shares through its ATM program raising net proceeds of approximately $6.7 million. Also, the Company entered into forward sales transactions for 3.9 million common shares at an initial weighted-average price of $11.23 per common share, which is subject to adjustment in accordance to the forward sales contract.

During the third quarter, Lexington repaid $40.0 million on its unsecured revolving credit facility. As of the date of this earnings release, Lexington has $600 million of availability under its unsecured revolving credit facility, subject to covenant compliance.

2020 EARNINGS GUIDANCE

Lexington now estimates that its net income attributable to common shareholders for the year ended December 31, 2020 will be within an expected range of $0.62 to $0.64 per diluted common share.

Additionally, Lexington affirms its Adjusted Company FFO guidance for the year ended December 31, 2020 to be within a range of $0.74 to $0.76 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

THIRD QUARTER 2020 CONFERENCE CALL

Lexington will host a conference call today, November 5, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September30, 2020. Interested parties may participate in this conference call by dialing1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through February 5, 2021, at 1-877-344-7529 (U.S.), 1-412-317-0088 (International) or 1-855-669-9658 (Canada), pin code for all replay numbers is 10148898. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased industrial properties across the United States. Lexington seeks to expand its industrial portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions. For more information, including Lexington's Quarterly Supplemental Information package, or to follow Lexington on social media, visit www.lxp.com.

Contact:Investor or Media Inquiries for Lexington Realty Trust:Heather Gentry, Senior Vice President of Investor RelationsLexington Realty 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 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 potential adverse impact on Lexington or its tenants from the novel coronavirus (COVID-19); (2) the authorization by Lexington's Board of Trustees of future dividend declarations, (3) Lexington's ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2020, (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, (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 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, may, plans, predicts, will, will likely result, is optimistic, goal, objective or similar expressions. Except as required by law, 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, 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

Lexington 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.

Lexington 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 Lexington's financial performance or cash flow from operating, investing or financing activities or liquidity

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. Lexington 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, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (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.

Funds from Operations (FFO) and Adjusted Company FFO: Lexington 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. 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 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.

Lexington 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 Lexingtons common shares, are converted at the beginning of the period. Lexington 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 Lexington's real estate portfolio. Lexington 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 Lexingtons 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 Lexington'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.

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 Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington'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. Lexington believes that net income is the most directly comparable GAAP measure to NOI.

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited and in thousands, except share and per share data)

Three months ended September Nine months ended September 30, 30, 2020 2019 2020 2019Gross revenues: Rental revenue $ 83,592 $ 80,325 $ 243,421 $ 239,058 Other revenue 922 1,225 3,712 3,875 Total gross 84,514 81,550 247,133 242,933 revenuesExpenseapplicable to revenues:Depreciation and (40,555 ) (37,211 ) (120,869 ) (111,617 )amortizationProperty (11,343 ) (10,611 ) (31,895 ) (30,966 )operatingGeneral and (7,232 ) (7,791 ) (22,612 ) (23,652 )administrativeNon-operating 40 532 314 1,927 incomeInterest andamortization (13,649 ) (16,481 ) (42,610 ) (50,715 )expenseDebt satisfactiongains (charges), 17,557 (4,424 ) 18,950 (4,527 )netImpairment (6,175 ) (673 ) (7,792 ) (2,355 )chargesGains on sales of 20,878 140,461 41,876 176,662 propertiesIncome beforeprovision forincome taxes andequity in 44,035 145,352 82,495 197,690 earnings (losses)ofnon-consolidatedentitiesProvision for (286 ) (241 ) (1,361 ) (1,108 )income taxesEquity inearnings (losses)of (131 ) 2,710 35 3,288 non-consolidatedentitiesNet income 43,618 147,821 81,169 199,870 Less net incomeattributable to (1,714 ) (4,502 ) (2,245 ) (5,191 )noncontrollinginterestsNet incomeattributable toLexington Realty 41,904 143,319 78,924 194,679 TrustshareholdersDividendsattributable to (1,573 ) (1,573 ) (4,718 ) (4,718 )preferred shares? Series CAllocation toparticipating (46 ) (186 ) (118 ) (304 )securitiesNet incomeattributable to $ 40,285 $ 141,560 $ 74,088 $ 189,657 commonshareholders Net incomeattributable tocommon $ 0.15 $ 0.60 $ 0.28 $ 0.81 shareholders -per common sharebasicWeighted-averagecommon shares 274,696,046 236,285,216 264,211,668 233,833,340 outstanding ?basic Net incomeattributable tocommon $ 0.15 $ 0.59 $ 0.28 $ 0.81 shareholders -per common sharedilutedWeighted-averagecommon shares 276,022,762 241,355,289 265,446,221 234,011,643 outstanding ?diluted

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share and per share data)

September 30, December 31, 2020 2019 (unaudited) Assets: Real estate, at cost $ 3,439,314 $ 3,320,574 Real estate - intangible assets 413,208 409,756 Investments in real estate under construction 41,948 13,313 Real estate, gross 3,894,470 3,743,643 Less: accumulated depreciation and amortization 906,789 887,629 Real estate, net 2,987,681 2,856,014 Assets held for sale 159,210 ? Operating lease right-of-use assets, net 36,034 38,133 Cash and cash equivalents 287,920 122,666 Restricted cash 1,697 6,644 Investments in non-consolidated entities 56,489 57,168 Deferred expenses, net 16,428 18,404 Rent receivable ? current 2,310 3,229 Rent receivable ? deferred 66,383 66,294 Other assets 7,699 11,708 Total assets $ 3,621,851 $ 3,180,260 Liabilities and Equity: Liabilities: Mortgages and notes payable, net $ 157,723 $ 390,272 Term loan payable, net 297,817 297,439 Senior notes payable, net 778,943 496,870 Trust preferred securities, net 127,470 127,396 Dividends payable 34,463 32,432 Liabilities held for sale 179,052 ? Operating lease liabilities 37,338 39,442 Accounts payable and other liabilities 52,819 29,925 Accrued interest payable 9,083 7,897 Deferred revenue - including below market leases, 18,054 20,350 netPrepaid rent 14,740 13,518 Total liabilities 1,707,502 1,455,541 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 94,016 94,016 issued and outstandingCommon shares, par value $0.0001 per share; authorized 400,000,000 shares,276,941,239 and 254,770,719 shares issued and 28 25 outstanding in 2020 and 2019, respectivelyAdditional paid-in-capital 3,193,751 2,976,670 Accumulated distributions in excess of net income (1,374,748 ) (1,363,676 )Accumulated other comprehensive loss (19,687 ) (1,928 )Total shareholders? equity 1,893,360 1,705,107 Noncontrolling interests 20,989 19,612 Total equity 1,914,349 1,724,719 Total liabilities and equity $ 3,621,851 $ 3,180,260

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIESEARNINGS PER SHARE(Unaudited and in thousands, except share and per share data)

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019EARNINGS PER SHARE: Basic: Net incomeattributable to $ 40,285 $ 141,560 $ 74,088 $ 189,657 common shareholders Weighted-averagenumber of common 274,696,046 236,285,216 264,211,668 233,833,340 shares outstanding- basic Net incomeattributable tocommon shareholders $ 0.15 $ 0.60 $ 0.28 $ 0.81 - per common sharebasic Diluted: Net incomeattributable to $ 40,285 $ 141,560 $ 74,088 $ 189,657 common shareholders- basicImpact of assumed ? 1,573 ? ? conversionsNet incomeattributable to $ 40,285 $ 143,133 $ 74,088 $ 189,657 common shareholders Weighted-averagecommon shares 274,696,046 236,285,216 264,211,668 233,833,340 outstanding - basicEffect of dilutive securities:Unvestedshare-based payment 1,326,716 359,503 1,234,553 178,303 awards and optionsPreferred shares - ? 4,710,570 ? ? Series CWeighted-averagecommon shares 276,022,762 241,355,289 265,446,221 234,011,643 outstanding -diluted Net incomeattributable tocommon shareholders $ 0.15 $ 0.59 $ 0.28 $ 0.81 - per common sharediluted

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIESADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FORDISTRIBUTION(Unaudited and in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019FUNDS FROM OPERATIONS: Basic and Diluted: Net incomeattributable to $ 40,285 $ 141,560 $ 74,088 $ 189,657 commonshareholdersAdjustments: Depreciation and 39,858 36,537 118,605 109,469 amortization Impairment charges - real 6,175 673 7,792 2,355 estate Noncontrolling interests - OP 1,518 4,244 1,702 4,410 units Amortization of leasing 697 674 2,264 2,148 commissions Joint venture and noncontrolling 2,094 2,267 6,463 7,200 interest adjustment Gains on sales of properties, including (20,886 ) (143,719 ) (42,433 ) (180,837 ) non-consolidated entitiesFFO available tocommonshareholders and 69,741 42,236 168,481 134,402 unitholders -basic Preferred 1,573 1,573 4,718 4,718 dividends Amount allocated to participating 46 186 118 304 securitiesFFO available toall equityholders 71,360 43,995 173,317 139,424 and unitholders -diluted Transaction 1 ? 81 ? costs Debt satisfaction (gains) charges, (17,522 ) 4,679 (18,894 ) 4,782 net, including non-consolidated entitiesAdjusted CompanyFFO available toall equityholders 53,839 48,674 154,504 144,206 and unitholders -diluted FUNDS AVAILABLE FOR DISTRIBUTION:Adjustments: Straight-line (3,995 ) (4,161 ) (10,224 ) (10,846 ) adjustments Lease incentives 214 318 732 898 Amortization of above/below (435 ) (142 ) (1,110 ) (174 ) market leases Lease termination (211 ) (120 ) 70 (1,120 ) payments, net Non-cash 293 567 1,081 2,146 interest, net Non-cash 1,663 1,554 4,984 4,833 charges, net Tenant (2,332 ) (1,380 ) (9,453 ) (4,932 ) improvements Lease costs (550 ) (5,951 ) (4,969 ) (10,624 ) Joint venture and noncontrolling (146 ) (3,095 ) (330 ) (3,731 ) interest adjustmentCompany FundsAvailable for $ 48,340 $ 36,264 $ 135,285 $ 120,656 Distribution Per Common Share and Unit AmountsBasic: FFO $ 0.25 $ 0.18 $ 0.63 $ 0.57 Diluted: FFO $ 0.25 $ 0.18 $ 0.63 $ 0.58 Adjusted Company $ 0.19 $ 0.20 $ 0.57 $ 0.60 FFO Basic: Weighted-average common shares 274,696,046 236,285,216 264,211,668 233,833,340 outstanding - basic EPS Operating partnership 3,060,436 3,520,643 3,100,309 3,535,207 units^(1) Weighted-average common shares 277,756,482 239,805,859 267,311,977 237,368,547 outstanding - basic FFO Diluted: Weighted-average common shares 276,022,762 241,355,289 265,446,221 234,011,643 outstanding - diluted EPS Operating partnership 3,060,436 3,520,643 3,100,309 3,535,207 units^(1) Unvested share-based 19,261 25,090 19,813 20,169 payment awards Preferred shares 4,710,570 ? 4,710,570 4,710,570 - Series C Weighted-average common shares 283,813,029 244,901,022 273,276,913 242,277,589 outstanding - diluted FFO

(1) Includes OP units other than OP units held by Lexington.

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES 2020 EARNINGS GUIDANCE Twelve Months Ended December 31, 2020 RangeEstimated: Net income attributable to common shareholders per $ 0.62 $ 0.64 diluted common share^(1)Depreciation and amortization 0.62 0.62 Impact of capital transactions (0.50 ) (0.50 )Estimated Adjusted Company FFO per diluted common share $ 0.74 $ 0.76

(1) Assumes all convertible securities are dilutive.