LXP INDUSTRIAL TRUST Introduction
When we use the terms the "Company," the "Trust," "LXP," "we," "our," and "us," we refer collectively toLXP Industrial Trust and its consolidated subsidiaries. All of the Company's interests are held, and all of the property operating activities are conducted through special purposes entities, which we refer to as property owner subsidiaries or lender subsidiaries and are separate and distinct legal entities, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. References herein to ''this Quarterly Report" are to this Quarterly Report on Form 10-Q for the three and six months endedJune 30, 2022 . The results of operations contained herein for the three and six months endedJune 30, 2022 and 2021 are not necessarily indicative of the results that may be expected for a full year.
When we use the term "REIT," we mean real estate investment trust. All
references to 2022 and 2021, refer to the periods ending
When we use the term "GAAP," we mean
When we use the term "common shares," we mean our shares of beneficial interest par value$0.0001 , classified as common stock. When we use the term "Series C Preferred Shares," we mean our beneficial interest classified as 6.50% Series C Cumulative Convertible Preferred Stock.
When we use the term "base rent," we mean GAAP rental revenue and ancillary income, excluding billed tenant reimbursements and lease termination income.
The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations ofLXP Industrial Trust for the three and six months endedJune 30, 2022 and 2021, and significant factors that could affect its prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited condensed consolidated financial statements of the Company included herein and notes thereto and with the consolidated financial statements and notes thereto included in the Company's most recent Annual Report on Form 10-K, which was filed with theSecurities and Exchange Commission , orSEC , onFebruary 24, 2022 , which we refer to as the Annual Report. Historical results may not be indicative of future performance. Forward-Looking Statements. This Quarterly Report, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our 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" or similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. In particular, among the factors that could cause actual results, performances or achievements to differ materially from current expectations, strategies or plans include, among others, those risks discussed below in "Management's Discussion and Analysis of Financial Condition and Results of Operations," and under the headings "Risk Factors" in this Quarterly Report and under "Risk Factors" in Part I, Item A and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report and other periodic reports filed by the Company with theSEC . Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.
Overview
As of
SinceDecember 31, 2015 throughJune 30, 2022 , we transitioned our portfolio from approximately 16% warehouse/distribution assets to approximately 99% warehouse/distribution assets. As ofJune 30, 2022 , our portfolio consisted of 110 warehouse/distribution facilities and 11 other properties. 25
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OnFebruary 8, 2022 , we announced that ourBoard of Trustees initiated a review of our strategic alternatives. OnApril 8, 2022 , we announced that ourBoard of Trustees suspended the review of strategic alternatives.
Second Quarter 2022 Transaction Summary.
The following summarizes our significant transactions during the three months
ended
Leasing Activity: During the second quarter of 2022, we entered into new leases and lease extensions encompassing 0.9 million square feet. The average fixed rent on these extended leases was$4.75 per square foot compared to the average fixed rent on these leases before extension of$4.00 per square foot. The weighted-average cost of tenant improvements and lease commissions was$1.24 per square foot for extended leases and$5.22 per square foot for new first generation leases.
Investments:
•Acquired an industrial property in the
•Commenced development of two warehouse/distribution facilities in the
•Invested
•Disposed of our interest in two industrial warehouse/distribution properties
and one office property for an aggregate gross sales price of
•NNN Office JV L.P. disposed of an office property for a gross sales price of$149.1 million and satisfied$57.5 million of non-recourse debt. We own 20% of the joint venture and we received aggregate proceeds of$16.6 million .
Debt:
•Borrowed
Equity:
•Repurchased and retired 6.1 million common shares for an aggregate
weighted-average cost of
Acquisition Activity:
During the six months endedJune 30, 2022 , we acquired the following warehouse/distribution assets, inclusive of the acquisition referenced above: Initial Capitalized Cost Approximate Lease Term % Leased at Market Square Feet (millions) Date Acquired (years) Acquisition Cincinnati/Dayton, OH(1) 232,500 $ 23.4 February 2022 N/A - % Cincinnati/Dayton, OH 544,320 48.7 February 2022 10 100 % Phoenix, AZ 268,872 59.1 April 2022 15 100 % 1,045,692 $ 131.2
(1) Subsequent to acquisition, property was fully leased for approximately nine years.
Development Activity: As ofJune 30, 2022 , we had six consolidated development projects in process with an aggregate estimated total cost of$515.8 million . We anticipate our remaining funding obligation to substantially complete the construction of these six projects, exclusive of our joint venture partners' share, to be approximately$239.2 million . However, the risks associated with development, including supply chain issues, could adversely impact our estimates. 26
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Critical Accounting Estimates
In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Below is a summary of the critical accounting estimates used in the preparation of our unaudited condensed consolidated financial statements. A summary of our significant accounting policies which are important to the portrayal of our financial condition and results of operations is set forth in (1) Note 2 to our audited consolidated financial statements, which are included in "Financial Statements and Supplementary Data" in Part II, Item 8 of the Annual Report and (2) Note 2 to our unaudited condensed consolidated financial statements contained in this Quarterly Report. Acquisition of Real Estate. Primarily all of our acquisitions of real estate assets and liabilities are accounted for as asset acquisitions. As such, the purchase prices of acquired tangible and intangible assets and liabilities are recorded and allocated at fair value on a relative basis. The recorded allocations of tangible assets are based on the "as-if-vacant" value using estimated cash flow projections of the properties acquired which incorporates discount, capitalization and interest rates as well as available comparable market information. Allocations of intangible assets includes management's estimates of current market rents and leasing costs. We use considerable judgement in our estimates of cash flow projections, discount, capitalization and interest rates, fair market lease rates, carrying costs during hypothetical expected lease-up periods and costs to execute similar leases. While our methodology for purchase price allocation did not change during the six months endedJune 30, 2022 , the real estate market is fluid and our assumptions are based on information currently available in the market at the time of acquisition. Significant increases or decreases in these key estimates, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being acquired. Revenue Recognition. We enter into agreements with tenants that convey the right to control the use of identified space at our properties in exchange for rental revenue. These agreements meet the criteria for recognition as leases under Accounting Standards Codification ("ASC") 842, Leases. We recognize lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. We commence revenue recognition when possession or control of the space is turned over to the tenant. We evaluate the collectability of our rental payments and recognize revenue on a cash basis when we believe it is no longer probable that we will receive substantially all of the remaining lease payments. Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant and other factors. Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our unaudited condensed consolidated statements of operations. Impairment of Real Estate. We record impairments of our real estate assets classified as held for use when triggering events dictate that an asset may be impaired. An impairment is recorded when the carrying amount of the asset exceeds the sum of its undiscounted future operating and residual cash flows. The impairment recorded is the difference between estimated fair value of the asset and the carrying amount. We record impairments of our real estate assets classified as held for sale at the lower of the carrying amount or estimated fair value using the estimated or contracted sales price less costs to sell. Any real estate assets recorded at fair value on a non-recurring basis as a result of our impairment analysis are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers' opinions of value and/or terms of definitive sales contracts. Additionally, the analysis includes considerable judgement in our estimates of hold periods, projected cash flows and discount and capitalization rates. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed. We will record an impairment charge related to our investments, including investments in non-consolidated entities, if we determine the fair value of the investments are less than their carrying value and such impairment is other-than-temporary. We evaluate whether events or changes in circumstances indicate that the carrying amount of our investments may not be recoverable. Our evaluation of changes in economic or operating conditions and whether an impairment is other-than-temporary may include developing estimates of fair value, forecasted cash flows or operating income before depreciation and amortization. We estimate undiscounted cash flows and fair value using observable and unobservable data such as operating income, hold periods, estimated capitalization and discount rates, or relevant market multiples, leasing prospects and local market information and whether certain impairments are other-than-temporary. 27
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Liquidity and Capital Resources
Cash Flows. We believe that cash flows from operations will continue to provide adequate capital to fund our operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with applicable REIT requirements in both the short-term and long-term, however, our cash flow from operations may be negatively affected in the near term if we experience tenant defaults as a result of the effects of the current economic condition. In addition, we anticipate that cash on hand, borrowings under our unsecured revolving credit facility, capital recycling proceeds, issuances of equity, mortgage proceeds and other debt, as well as other available alternatives, will provide the necessary capital required by our business. AtJune 30, 2022 , our property owner subsidiaries do not have mortgage maturities with balloon payments due until 2031. In addition, certain of our subsidiaries are obligated to fund the construction of our development projects and we sometimes guaranty these obligations. We believe our property owner subsidiaries have sufficient sources of liquidity to meet these obligations through future cash flows from operations, the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($49.8 million atJune 30, 2022 ), property sale proceeds, borrowing capacity under our unsecured revolving credit facility ($480.0 million atJune 30, 2022 , subject to covenant compliance), unsettled forward common share sale contracts, and future cash flows from operations. Cash flows from operations were$95.2 million for the six months endedJune 30, 2022 as compared to$108.7 million for the six months endedJune 30, 2021 . The decrease was primarily related to property sales and a decrease in termination fee income, partially offset by the impact of cash flow generated from acquiring properties. The underlying drivers that impact our working capital, and therefore cash flows from operations, are the timing of collection of rents, including reimbursements from tenants, payment of interest on mortgage debt and payment of operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. The collection and timing of tenant rents are closely monitored by management as part of our cash management program. Net cash used in investing activities totaled$217.1 million and$140.3 million during the six months endedJune 30, 2022 and 2021, respectively. Cash used in investing activities related primarily to acquisitions of real estate, investments in real estate under construction, capital expenditures, lease costs, investments in non-consolidated entities and changes in real estate deposits, net. Cash provided by investing activities primarily related to net proceeds received from the disposition of real estate and distributions from non-consolidated entities. Net cash provided by (used in) financing activities totaled($19.2) million and$50.4 million during the six months endedJune 30, 2022 and 2021, respectively. Cash provided by financing activities primarily related to the issuances of common shares and cash contributions from noncontrolling interests. Cash used in financing activities primarily related to the repurchase of common shares, purchase of a noncontrolling interest and dividend and debt service payments.
Common Share Issuances:
At-The-Market Offering Program. We maintain an At-The-Market offering program ("ATM program") under which the Company can issue common shares, including through forward sales contracts.
During the six months endedJune 30, 2022 , we settled 3.6 million common shares previously sold in 2021 on a forward basis on the maturity date of the contracts and received$38.5 million of net proceeds. There were no forward share settlements during the six months endedJune 30, 2021 . All forward sales contracts under our ATM program have been settled as ofJune 30, 2022 . InFebruary 2021 , we amended the terms of our ATM offering program, under which we may, from time to time, sell up to$350.0 million common shares over the term of the program. As ofJune 30, 2022 , common shares with an aggregate value of$295.0 million remain available for issuance under the ATM program. Underwritten Equity Offerings. InMay 2021 , we entered into forward sales contracts for the sale of 16,000,000 common shares at a public offering price of$12.11 per common share in an underwritten equity offering that have not yet settled. The forward sales contracts mature inDecember 2022 , subject to our right to elect cash or net share settlement. As ofJune 30, 2022 , the forward sales contracts had an aggregate settlement price of$183.4 million , which is subject to adjustment in accordance with the forward sales contracts. The volatility in the capital markets primarily resulting from the effects of the current economic conditions may negatively affect our ability to access the capital markets through our ATM program and other offerings. 28
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Share Repurchase Program. During 2015, ourBoard of Trustees authorized the repurchase of 10.0 million common shares and increased this authorization by 10.0 million common shares in 2018. The share repurchase program does not expire. During the six months endedJune 30, 2022 , we repurchased and retired approximately 6.1 million common shares at an average price of$11.45 per share. We did not repurchase any common shares during the six months endingJune 30, 2021 . Approximately 2.9 million common shares remained available for repurchase under the current authorization as ofJune 30, 2022 . We have continued to, and in the future may, repurchase our common shares in the context of our overall capital plan and to the extent we believe market volatility offers prudent investment opportunities based on our common share price versus net asset value per share.
Dividends. Dividends paid to our common and preferred shareholders were
We declared a quarterly dividend of
UPREIT Structure. As ofJune 30, 2022 , 0.8 million units of limited partner interests, or OP units, in our operating partnership, LCIF, were outstanding not including OP units held by us. Assuming all outstanding OP units not held by us were redeemed on such date, the estimated fair value of such OP units was$9.2 million based on our closing price of$10.74 per common share as ofJune 30, 2022 and a redemption factor of approximately 1.13 common shares per OP unit.
Financings. The following senior notes were outstanding as of
Issue Date Face Amount ($000 ) Interest Rate Maturity Date Issue Price August 2021 $ 400,000 2.375 % October 2031 99.758 % August 2020 400,000 2.70 % September 2030 99.233 % May 2014 198,932 4.40 % June 2024 99.883 % $ 998,932
Each series of senior notes is unsecured and requires payment of interest semi-annually in arrears. We may redeem the notes at our option at any time prior to maturity in whole or in part by paying the principal amount of the Senior Notes being redeemed plus a make-whole premium.
A summary of the maturity dates and interest rates of our unsecured credit
agreement, as of
Current
Maturity Date Interest Rate
$600.0 Million Revolving Credit Facility(1) February 2023 LIBOR + 0.90%
$300.0 Million Term Loan(2) January 2025 LIBOR + 1.00%
(1) Maturity date of the revolving credit facility can be extended to February
2024 at our option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At
June 30, 2022 , we had $120.0 million borrowings outstanding and availability of
$480.0 million , subject to covenant compliance.
(2) The LIBOR portion of the interest rate was swapped to obtain a fixed rate of 2.732% per annum.
As of
Contractual Obligations
As ofJune 30, 2022 , we had six ongoing consolidated development projects and expect to incur approximately$143.9 million and$95.2 million of costs in the remainder of 2022 and 2023, respectively, excluding noncontrolling interests' share, to substantially complete the construction of such projects. As ofJune 30, 2022 , we had interests in various land parcels held for development. We are unable to estimate the timing of any required funding for potential development projects on these parcels. 29
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Results of Operations
Three months endedJune 30, 2022 compared with three months endedJune 30, 2021 . The decrease in net income attributable to common shareholders of$31.3 million was primarily due to the items discussed below. The decrease in total gross revenues of$1.8 million was primarily due to a decrease in termination income of$0.9 million recognized during the three months endedJune 30, 2021 . In addition, property sales, including the recapitalization of our special purpose industrial portfolio now owned in a non-consolidated joint venture, contributed to the decrease, which was partially offset by revenue from recently acquired properties and an increase in advisory fees.
The increase in depreciation and amortization expense of
The increase in property operating expense of
The increase in general and administrative expenses of$1.4 million was primarily due to an increase of$0.8 million in costs incurred related to theBoard of Trustees strategic alternatives review and consulting costs related to shareholder activism. The remaining$0.6 million increase is primarily payroll expense, trustee fees and business insurance. The decrease in interest and amortization expense of$0.7 million related primarily to a$1.0 million increase in capitalized interest related to increased development. The decrease was partially offset by$0.3 million increase in interest expense related to increased unsecured debt outstanding and increased interest rates on our variable-rate unsecured debt during the three months endedJune 30, 2022 compared to the three months endedJune 30, 2021 .
The increase in impairment charges of
The decrease in gains on sales of properties of
The increase in equity in earnings (losses) of non-consolidated entities of$5.7 million was primarily due to recognizing our share of gains on sale of one property from theNNN Office JV L.P. in 2022 in the amount of$11.6 million with no property sales at our non-consolidated entities in 2021. The increase was primarily offset by recognizing our share of impairment charges and losses on debt satisfaction related toNNN Office JV L.P. in 2022 in the amount of$4.2 million and$1.5 million , respectively. The increase in selling profit from sales-type lease of$9.3 million is due to a tenant exercising its purchase option resulting in a change in lease classification from an operating lease to a sales-type lease in 2022 with no comparable transaction in 2021.
The decrease in net income attributable to noncontrolling interests of
Six months endedJune 30, 2022 compared with six months endedJune 30, 2021 . The decrease in net income attributable to common shareholders of$61.7 million was primarily due to the items discussed below. The decrease in total gross revenues of$14.0 million was primarily due to a decrease in termination income of$11.8 million recognized during the six months endedJune 30, 2021 . In addition, property sales, including the recapitalization of our special purpose industrial portfolio now owned in a non-consolidated joint venture, contributed to the decrease, which was partially offset by revenue from recently acquired properties and an increase in advisory fees.
The increase in depreciation and amortization expense of
The increase in property operating expense of
The increase in general and administrative expenses of$3.7 million was primarily due to an increase of$1.9 million in costs incurred related to theBoard of Trustees' strategic alternatives review and consulting costs related to shareholder activism. The remaining$1.2 million increase is primarily payroll expense.
The decrease in interest and amortization expense of
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The increase in impairment charges of
The decrease in gains on sales of properties of
The increase in equity in earnings (losses) of non-consolidated entities of$17.1 million was primarily due to recognizing our share of gains on sale of three properties from theNNN Office JV L.P. in 2022 in the amount of$22.9 million with no property sales at our non-consolidated entities in 2021. The increase was primarily offset by recognizing our share of impairment charges and losses on debt satisfaction related to theNNN Office JV L.P. in 2022 in the amount of$4.2 million and$1.5 million , respectively. The increase in selling profit from sales-type lease of$9.3 million is due to a tenant in our industrial portfolio exercising its purchase option resulting in a change in lease classification from an operating lease to a sales-type lease in 2022 with no comparable transaction in 2021.
The decrease in net income attributable to noncontrolling interests of
Same-Store Results
Same-store net operating income, or NOI, which is a non-GAAP measure, represents the NOI for consolidated properties that were owned, stabilized and included in our portfolio for two comparable reporting periods. We define NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income, net), and other property income) less property operating expenses. As same-store NOI excludes the change in NOI from acquired and disposed of properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating same-store NOI, and accordingly same-store NOI may not be comparable to other REITs. Management believes that same-store NOI is a useful supplemental measure of our operating performance. However, same-store NOI should not be viewed as an alternative measure of our financial performance since it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. We believe that net income is the most directly comparable GAAP measure to same-store NOI.
The following presents our consolidated same-store NOI, for the three and six
months ended
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Total cash base rent $ 54,637 $
52,640
9,141 8,940 18,599 17,647
Property operating expenses (10,755) (10,178) (21,978) (19,899)
Same-store NOI $ 53,023 $ 51,402 $ 104,329 $ 101,513
Our reported same-store NOI increased for the three and six months of 2021
compared to the three and six months of 2022 by 3.2% and 2.8%, respectively,
primarily due to an increase in occupancy and cash base rents. As of June 30,
2022 and 2021, our historical same-store square footage leased was 99.3% and
98.5%, respectively.
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Below is a reconciliation of net income to same-store NOI for periods presented ($000 's): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income$ 41,538 $ 73,787 $ 52,446 $ 115,262 Interest and amortization expense 10,821 11,474 21,503 22,960 Provision for income taxes 263 344 680 716 Depreciation and amortization 45,193 43,044 89,699 85,220 General and administrative 9,296 7,912 20,033 16,332 Transaction costs (34) 130 55 141 Non-operating/advisory fee income (1,503) (744) (2,986) (1,974) Gains on sales of properties (27,855) (66,726) (28,110) (88,645) Impairment charges 1,829 - 1,829 - Selling profit from sales-type lease (9,314) - (9,314) - Equity in (earnings) losses of non-consolidated entities (5,619) 84 (16,920) 174 Lease termination income, net - (886) - (11,827) 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) Sales-type lease interest income (13) - (13) - NOI 60,937 65,246 121,389 132,925 Less NOI: Acquisitions, development and dispositions (7,914) (13,844) (17,060) (31,412) Same-Store NOI$ 53,023 $ 51,402 $ 104,329 $ 101,513 Funds From Operations We believe 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. We believe 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 the 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. 32
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We present FFO available to common shareholders and unitholders - basic and also
present 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 our common shares, are converted at the beginning of the period. We
also present 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 our real estate portfolio. We believe 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 our operating performance or as an
alternative to cash flow as a measure of liquidity.
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The following presents a reconciliation of net income attributable to common
shareholders to FFO available to common shareholders and unitholders and
Adjusted Company FFO available to all equityholders and unitholders for the
three and six months ended
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