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W. P. Carey Announces Second Quarter Financial Results

Aug 7, 2012

NEW YORK, NY -- (Marketwire) -- 08/07/12 -- Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the second quarter ended June 30, 2012.

QUARTERLY RESULTS

  • Funds from operations -- as adjusted (AFFO) for the second quarter of 2012 decreased compared to the second quarter of 2011, to $27.8 million or $0.68 per diluted share from $73.0 million or $1.82 per diluted share, respectively. AFFO for the six months ended June 30, 2012 was $67.9 million or $1.66 per diluted share, compared to $112.2 million or $2.79 per diluted share for the comparable period in 2011. The higher levels in the 2011 periods were due to revenues earned from the merger of two of our managed CPA® REITS in May 2011 as discussed further below.
  • Cash flow from operating activities for the six months ended June 30, 2012 was $11.8 million compared to $48.6 million for the prior year period, while adjusted cash flow from operating activities was $58.3 million for the six months ended June 30, 2012 compared to $55.9 million for the prior year period.
  • Total revenues net of reimbursed expenses for the second quarter of 2012 was $47.5 million compared to $99.7 million for the second quarter of 2011. Total revenues net of reimbursed expenses for the six months ended June 30, 2012 decreased to $98.2 million compared to $157.9 million for the prior year period. Reimbursed expenses are excluded from total revenues because they have no impact on net income.
  • Total adjusted revenue, or revenue on a pro-rata basis, for the six months ended June 30, 2012 increased to $157.1 million compared to $149.0 million for the prior year period.
  • Net Income for the second quarter of 2012 was $31.8 million, compared to $81.4 million for the same period in 2011. For the six months ended June 30, 2012, net income was $44.1 million compared to $104.8 million for the comparable period in 2011.
  • We received approximately $8.3 million in cash distributions from our equity ownership in the CPA® REITs for the quarter ended June 30, 2012.
  • Further information concerning AFFO, adjusted cash flow from operating activities and total adjusted revenue -- non-GAAP supplemental performance metrics -- is presented in the accompanying tables.

PROPOSED CONVERSION TO REIT AND MERGER WITH CPA®:15

  • On February 21, 2012, we announced that our Board of Directors had approved our conversion to a real estate investment trust ("REIT") and that our Board of Directors and the Board of Directors of our publicly held, non-traded REIT affiliate Corporate Property Associates 15 Incorporated ("CPA®:15") had unanimously approved a definitive merger agreement pursuant to which W. P. Carey and CPA®:15 will merge immediately following the REIT conversion.
  • On July 30, 2012 the Securities and Exchange Commission declared effective the Registration Statement on Form S-4 related to the proposed REIT conversion and merger. The conversion to a REIT is subject to the approval of W. P. Carey shareholders and the merger with CPA®:15 is subject to approval of both the shareholders of W. P. Carey and the stockholders of CPA®:15. The special meetings for each company are expected to take place on September 13, 2012. Additionally, as previously disclosed, on July 23, 2012 the Company entered into a voting agreement with the Estate of William Polk Carey and W. P. Carey & Co., Inc., a wholly-owned corporation of the Estate, pursuant to which they have agreed to vote their shares in favor of the approval of the REIT conversion and the merger with CPA®:15. These transactions are also subject to customary closing conditions.
  • If the proposed merger is approved and the other closing conditions are satisfied, we currently expect that the closing will occur in the third quarter of 2012, although there can be no assurance of such timing.

CPA®:17 - GLOBAL ACTIVITY

  • CPA®:17 - Global's follow-on offering was declared effective by the SEC in April 2011, which ended its initial public offering. We have raised more than $2.3 billion on behalf of CPA®:17 - Global since beginning fundraising in December 2007. The follow-on offering is for up to an additional $1 billion of CPA®:17 - Global's common stock.
  • Investment volume for CPA®:17 - Global in the second quarter of 2012 was approximately $70.5 million.
  • In the second quarter of 2012, we acquired five self storage facilities, comprising a total of approximately 385,000 square feet and located in Louisiana, Mississippi and Alabama. The total purchase price was approximately $17 million.
  • In addition, we provided approximately $18 million of build-to-suit financing to Sabre Industries, Inc. for the construction of an approximately 300,000 square foot industrial facility in Sioux City, Iowa. Upon completion, the facility will be leased on a long term, triple-net basis to Sabre Communications Corporation.

CAREY WATERMARK INVESTORS ACTIVITY

  • From the beginning of its initial public offering, Carey Watermark Investors ("CWI"), our lodging-focused non-traded REIT offering, has raised $84.0 million.
  • In the second quarter of 2012, CWI completed two investments: the Hampton Inn Boston/Braintree and the Hilton Garden Inn New Orleans French Quarter/CBD.
  • In July of 2012, CWI completed an investment in Lake Arrowhead Resort & Spa located in Lake Arrowhead, California.

ASSET MANAGEMENT ACTIVITY

  • As of June 30, 2012, W. P. Carey and our CPA® REITs secured approximately $220 million in debt financings. Approximately $77 million represented refinancing of maturing debt on thirteen properties; interest rates on these refinancings averaged more than 240 basis points below the rates on original financings. Approximately $143 million represented financing of new acquisitions or properties that had initially been acquired on an all equity basis.

ASSETS UNDER OWNERSHIP AND MANAGEMENT AS OF JUNE 30, 2012

  • W. P. Carey is the advisor to the CPA® REITs and CWI, which had aggregate real estate assets of $9.5 billion and total assets of $10.2 billion.
  • The occupancy rate of W. P. Carey's 11 million square foot owned portfolio was approximately 94%. In addition, for the 106 million square feet owned by the CPA® REITs, the average occupancy rate was approximately 99%.
  • The W. P. Carey Group's assets under ownership and management total approximately $12.7 billion.

DISTRIBUTIONS

  • The Board of Directors raised the quarterly cash distribution to $0.567 per share for the second quarter of 2012. The distribution -- our 45th consecutive quarterly increase -- was paid on July 16, 2012 to shareholders of record as of July 2, 2012.

Commenting on the Company's quarterly results, Trevor Bond, President and Chief Executive Officer, noted, "Last year's liquidation of CPA®:14 skewed our first half 2011 results such that a comparison with the same period in 2012 is less meaningful. For example, we recognized $52.5 million in termination and subordination disposition revenues in the second quarter of 2011 in connection with that liquidation, which took place via a merger of CPA®:14 and CPA®:16 - Global. This impacted AFFO by $1.01 per diluted share for the first half of 2011. Without that transaction, the core business would have generated AFFO of $1.78 per share during the first six months of 2011 as compared to $1.66 per share during the same period in 2012. Most of the remaining difference in AFFO is due to lower structuring revenues resulting from lower deal volume for the first half of this year. Deal volume has historically been a more widely variable source of revenues as compared to rental income and asset management fees. As a result of recent acquisitions, structuring revenues have decreased as a percentage of total revenues. Our proposed merger with CPA®:15 will further improve the stability of our revenues by shifting the revenue mix significantly in favor of rental income from owned assets. Dividend growth and coverage remains our paramount goal, and the increase in Adjusted Cash Flow from Operations year to date demonstrates our continued ability to cover the dividend notwithstanding periodic swings in investment volume."

CONFERENCE CALL & WEBCAST

Please call at least 10 minutes prior to call to register.

Time: Tuesday, August 7, 2012 at 11:00 AM (ET)

Call-in Number: 800-860-2442
(International) +1-412-858-4600

Webcast: www.wpcarey.com/earnings

Podcast: www.wpcarey.com/podcast
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Replay Passcode: 10016503
Replay Available until August 22, 2012 at 9:00 AM (ET).

W. P. Carey & Co. LLC
W. P. Carey & Co. LLC (NYSE: WPC) is an investment company that provides long term sale leaseback and build to suit financing for companies worldwide and manages a global investment portfolio of approximately $12.7 billion. Publicly traded on the New York Stock Exchange, W. P. Carey and its CPA® series of non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group's investments are highly diversified, comprising contractual agreements with approximately 284 long term corporate tenants spanning 28 industries and 18 countries.http://www.wpcarey.com

Individuals interested in receiving future updates on W. P. Carey via e-mail can register at www.wpcarey.com/alerts.

This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the Company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the Company, reference is made to the Company's filings with the Securities and Exchange Commission.

 

                          W. P. CAREY & CO. LLC

               Consolidated Statements of Income (Unaudited)
             (in thousands, except share and per share amounts)

                            Three Months Ended         Six Months Ended
                                 June 30,                   June 30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
Revenues
  Asset management
   revenue               $    15,636  $    16,619  $    31,238  $    36,439
  Structuring revenue          3,622        5,735       11,260       21,680
  Incentive, termination
   and subordinated
   disposition revenue             -       52,515            -       52,515
  Wholesaling revenue          4,080        2,922        7,867        6,202
  Reimbursed costs from
   affiliates                 20,484       17,059       39,221       34,778
  Lease revenues              17,228       16,217       34,859       30,089
  Other real estate
   income                      6,992        5,709       12,984       10,992
                         -----------  -----------  -----------  -----------
                              68,042      116,776      137,429      192,695
                         -----------  -----------  -----------  -----------
Operating Expenses
  General and
   administrative            (26,582)     (24,585)     (53,491)     (45,908)
  Reimbursable costs         (20,484)     (17,059)     (39,221)     (34,778)
  Depreciation and
   amortization               (6,733)      (5,891)     (13,528)     (10,501)
  Property expenses           (3,404)      (2,819)      (5,989)      (5,708)
  Other real estate
   expenses                   (2,431)      (2,942)      (4,930)      (5,499)
  Impairment charges          (1,003)           -       (3,660)           -
                         -----------  -----------  -----------  -----------
                             (60,637)     (53,296)    (120,819)    (102,394)
                         -----------  -----------  -----------  -----------
Other Income and
Expenses
  Other interest income          155          560          658        1,235
  Income from equity
   investments in real
   estate and the REITs       28,345       15,072       42,331       21,288
  Gain on change in
   control of interests            -       27,859            -       27,859
  Other income and
   (expenses)                  1,218        4,758        1,524        5,239
  Interest expense            (7,246)      (5,355)     (14,591)      (9,671)
                         -----------  -----------  -----------  -----------
                              22,472       42,894       29,922       45,950
                         -----------  -----------  -----------  -----------
  Income from continuing
   operations before
   income taxes               29,877      106,374       46,532      136,251
  Benefit from
   (provision for)
   income taxes                1,882      (25,030)         187      (32,597)
                         -----------  -----------  -----------  -----------
  Income from continuing
   operations                 31,759       81,344       46,719      103,654
                         -----------  -----------  -----------  -----------
Discontinued Operations
  (Loss) income from
   operations of
   discontinued
   properties                   (231)        (122)        (273)         403
  Gain on
   deconsolidation of a
   subsidiary                      -            -            -            -
  (Loss) gain on sale of
   real estate                  (298)        (121)        (479)         660
  Impairment charges               -          (41)      (3,068)         (41)
                         -----------  -----------  -----------  -----------
  (Loss) income from
   discontinued
   operations                   (529)        (284)      (3,820)       1,022
                         -----------  -----------  -----------  -----------
Net Income                    31,230       81,060       42,899      104,676
  Add: Net loss
   attributable to
   noncontrolling
   interests                     480          384        1,058          714
  Less: Net loss
   (income) attributable
   to redeemable
   noncontrolling
   interests                      67           (1)         110         (604)
                         -----------  -----------  -----------  -----------
Net Income Attributable
to W. P. Carey Members  $    31,777  $    81,443  $    44,067  $   104,786
                         ===========  ===========  ===========  ===========
Basic Earnings Per Share
  Income from continuing
   operations
   attributable to W. P.
   Carey members         $      0.78  $      2.03  $      1.17  $      2.57
  (Loss) income from
   discontinued
   operations
   attributable to W. P.
   Carey members               (0.01)       (0.01)       (0.09)        0.03
                         -----------  -----------  -----------  -----------
  Net income
   attributable to W. P.
   Carey members         $      0.78  $      2.02  $      1.08  $      2.60
                         ===========  ===========  ===========  ===========
Diluted Earnings Per
Share
  Income from continuing
   operations
   attributable to W. P.
   Carey members         $      0.78  $      2.00  $      1.15  $      2.55
  (Loss) income from
   discontinued
   operations
   attributable to W. P.
   Carey members               (0.01)       (0.01)       (0.09)        0.03
                         -----------  -----------  -----------  -----------
  Net income
   attributable to W. P.
   Carey members         $      0.77  $      1.99  $      1.06  $      2.58
                         ===========  ===========  ===========  ===========

Weighted Average Shares
Outstanding
  Basic                   40,047,220   39,782,796   40,218,677   39,760,676
                         ===========  ===========  ===========  ===========
  Diluted                 40,757,055   40,243,548   40,828,646   40,192,418
                         ===========  ===========  ===========  ===========

Amounts Attributable to
W. P. Carey Members
  Income from continuing
   operations, net of
   tax                   $    32,306  $    81,727  $    47,887  $   103,764
  (Loss) income from
   discontinued
   operations, net of
   tax                          (529)        (284)      (3,820)       1,022
                         -----------  -----------  -----------  -----------
  Net income             $    31,777  $    81,443  $    44,067  $   104,786
                         ===========  ===========  ===========  ===========

Distributions Declared
Per Share               $     0.567  $     0.550  $     1.132  $     1.062
                         ===========  ===========  ===========  ===========

                           W. P. CAREY & CO. LLC

             Consolidated Statements of Cash Flows (Unaudited)
                               (in thousands)

                                                  Six Months Ended June 30,
                                                 --------------------------
                                                     2012          2011
                                                 ------------  ------------
Cash Flows - Operating Activities
Net income                                       $     42,899  $    104,676
Adjustments to net income:
  Depreciation and amortization including
   intangible assets and deferred financing
   costs                                               15,054        12,782
  Income from equity investments in real estate
   and the REITs in excess of distributions
   received                                           (17,013)          223
  Straight-line rent and financing lease
   adjustments                                         (2,016)       (1,386)
  Amortization of deferred revenue                     (4,718)       (1,573)
  Gain on deconsolidation of a subsidiary                   -
  Gain on sale of real estate                          (1,505)         (660)
  Unrealized loss (gain) on foreign currency
   transactions and others                                 23          (371)
  Realized loss (gain) on foreign currency
   transactions and others                                535        (1,188)
  Allocation of loss to profit-sharing interest             -             -
  Management income received in shares of
   affiliates                                         (14,005)      (52,142)
  Gain on conversion of shares                              -        (3,806)
  Gain on change in control of interests                    -       (27,859)
  Impairment charges                                    6,728            41
  Stock-based compensation expense                      9,755         8,628
  Deferred acquisition revenue received                13,322        15,462
  Increase in structuring revenue receivable           (4,906)       (9,222)
  (Decrease) increase in income taxes, net            (12,206)       16,532
  Net changes in other operating assets and
   liabilities                                        (20,142)      (11,543)
                                                 ------------  ------------
Net cash provided by operating activities              11,805        48,594
                                                 ------------  ------------

Cash Flows - Investing Activities
  Distributions received from equity investments
   in real estate and the REITs in excess of
   equity income                                       15,909        11,891
  Capital contributions to equity investments            (180)       (2,297)
  Purchase of interests in CPA®:16 - Global                 -      (121,315)
  Purchases of real estate and equity
   investments in real estate                               -       (24,323)
  VAT paid in connection with acquisition of
   real estate                                              -             -
  VAT refunded in connection with acquisition of
   real estate                                              -             -
  Capital expenditures                                 (1,812)       (1,375)
  Cash acquired on acquisition of subsidiaries              -            57
  Proceeds from sale of real estate                    25,195        10,643
  Proceeds from sale of securities                        198           777
  Funding of short-term loans to affiliates                 -       (94,000)
  Proceeds from repayment of short-term loans to
   affiliates                                               -        94,000
  Funds placed in escrow                               (5,577)       (3,899)
  Funds released from escrow                            7,647         2,030
                                                 ------------  ------------
Net cash used in investing activities                  41,380      (127,811)
                                                 ------------  ------------

Cash Flows - Financing Activities
  Distributions paid                                  (46,013)      (40,849)
  Contributions from noncontrolling interests           1,480         1,459
  Distributions to noncontrolling interests            (1,165)       (2,822)
  Contributions from profit-sharing interest                -             -
  Distributions to profit sharing interest                  -             -
  Purchase of noncontrolling interest                       -        (7,502)
  Scheduled payments of mortgage principal            (10,262)       (9,897)
  Proceeds from mortgage financing                      1,250         7,438
  Proceeds from line of credit                         15,000       231,410
  Prepayments of line of credit                       (15,000)     (140,000)
  Payment of financing costs                             (123)         (831)
  Proceeds from issuance of shares                      5,692         1,018
  Payment of tax withholding liabiliaty related
   to tock-based compensation awards                        -             -
  Windfall tax benefit associated with stock-
   based compensation awards                            6,607           872
                                                 ------------  ------------
Net cash provided by financing activities             (42,534)       40,296
                                                 ------------  ------------

Change in Cash and Cash Equivalents During the
Period
    Effect of exchange rate changes on cash              (148)          689
                                                 ------------  ------------
    Net increase (decrease) in cash and cash
     equivalents                                       10,503       (38,232)
  Cash and cash equivalents, beginning of period       29,297        64,693
                                                 ------------  ------------
  Cash and cash equivalents, end of period       $     39,800  $     26,461
                                                 ============  ============

                            W. P. CAREY & CO. LLC

                      Financial Highlights (Unaudited)
                  (in thousands, except per share amounts)

These financial highlights include non-GAAP financial measures, including
earnings before interest, taxes, depreciation and amortization ("EBITDA"),
funds from operations - as adjusted ("AFFO") and adjusted cash flow from
operating activities. A description of these non-GAAP financial measures
and reconciliations to the most directly comparable GAAP measures is
provided on the following pages.
 

                                            Three Months    Six Months Ended
                                           Ended June 30,       June 30,
                                         ----------------- -----------------
                                           2012      2011    2012     2011
                                         --------  ------- -------- --------
EBITDA (a)
Investment management                    $    451  $55,524 $  4,371 $ 75,068
Real estate ownership                      43,524   63,669   68,243   84,997
                                         --------  ------- -------- --------
Total                                               119,19
                                         $ 43,975  $     3 $ 72,614 $160,065
                                         ========  ======= ======== ========

AFFO (a)
Investment management                    $   (271) $46,184 $ 10,771 $ 65,019
Real estate ownership                      28,092   26,860   57,121   47,167
                                         --------  ------- -------- --------
Total                                    $ 27,821  $73,044 $ 67,892 $112,186
                                         ========  ======= ======== ========

EBITDA Per Share (Diluted) (a)
Investment management                    $   0.01  $  1.38 $   0.11 $   1.87
Real estate ownership                        1.07     1.58     1.67     2.11
                                         --------  ------- -------- --------
Total                                    $   1.08  $  2.96 $   1.78 $   3.98
                                         ========  ======= ======== ========

AFFO Per Share (Diluted) (a)
Investment management                    $  (0.01) $  1.15 $   0.26 $   1.62
Real estate ownership                        0.69     0.67     1.40     1.17
                                         --------  ------- -------- --------
Total                                    $   0.68  $  1.82 $   1.66 $   2.79
                                         ========  ======= ======== ========

Adjusted Cash Flow From Operating
Activities
Adjusted cash flow                                         $ 58,323 $ 55,916
                                                           ======== ========

Distributions declared                                     $ 46,659 $ 42,561
                                                           ======== ========

(a) Effective April 1, 2012, we include cash distributions and deferred
revenue received and earned from the operating partnerships of CPA®:16 -
Global, CPA®:17 - Global and CWI in our Real Estate Ownership segment.
Results of operations for the prior year periods have been reclassified to
conform to the current period presentation. During the third quarter of
2011, CPA®:16 - Global finalized its assessment of the fair values of the
assets acquired and liabilities assumed in connection with the CPA®:14/16
merger and made certain adjustments during that quarter. Our proportionate
share of the adjustments before income taxes was approximately $2.6 million.
In accordance with current accounting guidance, we have retrospectively
adjusted our results of operations in our Real Estate Ownership segment for
the three and six months ended June 30, 2011 to include such adjustments.
 

                           W. P. CAREY & CO. LLC

             Reconciliation of Net Income to EBITDA (Unaudited)
             (in thousands, except share and per share amounts)

                            Three Months Ended June  Six Months Ended June
                                      30,                     30,
                            ----------------------- -----------------------
                                2012        2011        2012        2011
                            ----------- ----------- ----------- -----------
Investment Management
Net income from investment
management attributable to
W. P. Carey members (a)    $     2,153 $    28,601 $     4,513 $    39,963
Adjustments:
(Benefit from) provision for
income taxes                    (2,644)     26,056      (2,022)     33,436
Depreciation and
amortization                       942         867       1,880       1,669
                            ----------- ----------- ----------- -----------
EBITDA - investment
management                 $       451 $    55,524 $     4,371 $    75,068
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      0.01 $      1.38 $      0.11 $      1.87
                            =========== =========== =========== ===========

Real Estate Ownership
Net income from real estate
ownership attributable to
W. P. Carey members (a)    $    29,624 $    52,842 $    39,554 $    64,823
Adjustments:
Interest expense                  7,246       5,355      14,591       9,671
Provision for (benefit from)
income taxes                       762      (1,026)      1,835        (839)
Depreciation and
amortization                     5,791       5,024      11,648       8,832
Reconciling items
attributable to
discontinued operations            101       1,474         615       2,510
                            ----------- ----------- ----------- -----------
EBITDA - real estate
ownership                  $    43,524 $    63,669 $    68,243 $    84,997
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      1.07 $      1.58 $      1.67 $      2.11
                            =========== =========== =========== ===========

Total Company
EBITDA                      $    43,975 $   119,193 $    72,614 $   160,065
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      1.08 $      2.96 $      1.78 $      3.98
                            =========== =========== =========== ===========
Diluted weighted average
shares outstanding          40,757,055  40,243,548  40,828,646  40,192,418
                            =========== =========== =========== ===========

(a) Effective April 1, 2012, we include cash distributions and deferred
revenue received and earned from the operating partnerships of CPA®:16 -
Global, CPA®:17 - Global and CWI in our Real Estate Ownership segment.
Results of operations for the prior year periods have been reclassified to
conform to the current period presentation. During the third quarter of
2011, CPA®:16 - Global finalized its assessment of the fair values of the
assets acquired and liabilities assumed in connection with the CPA®:14/16
merger and made certain adjustments during that quarter. Our proportionate
share of the adjustments before income taxes was approximately $2.6
million. In accordance with current accounting guidance, we have
retrospectively adjusted our results of operations in our Real Estate
Ownership segment for the three and six months ended June 30, 2011 to
include such adjustments.

Non-GAAP Financial Disclosure
EBITDA as disclosed represents earnings before interest, taxes,
depreciation and amortization. We believe that EBITDA is a useful
supplemental measure to investors and analysts for assessing the
performance of our business segments, although it does not represent net
income that is computed in accordance with GAAP, because it removes the
impact of our capital structure and asset base from our operating results
and because it is helpful when comparing our operating performance to that
of companies in our industry without regard to such items, which can vary
substantially from company to company. Accordingly, EBITDA should not be
considered as an alternative to net income as an indicator of our financial
performance. EBITDA may not be comparable to similarly titled measures of
other companies. Therefore, we use EBITDA as one measure of our operating
performance when we formulate corporate goals, evaluate the effectiveness
of our strategies, and determine executive compensation.

                            W. P. CAREY & CO. LLC

  Reconciliation of Net Income to Funds From Operations -as adjusted (AFFO)
                                  (Unaudited)
              (in thousands, except share and per share amounts)

                          Three Months Ended June    Six Months Ended June
                                    30,                       30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------   ----------

Investment Management
Net Income from
investment management
attributable to W. P.
Carey members (a)       $     2,153  $    28,601  $     4,513  $    39,963
                         -----------  -----------  -----------   ----------
FFO - as defined by
NAREIT (b)                    2,153       28,601        4,513       39,963
                         -----------  -----------  -----------   ----------
  Adjustments:
    Amortization, and
     other non-cash
     charges                  (3,944)      17,583        3,617       25,056
    Realized gains on
     foreign currency,
     derivatives and
     other                       (23)           -          (23)           -
    Amortization of
     deferred financing
     costs                       286            -          570            -
    Merger expenses            1,257            -        2,094            -
      Total adjustments       (2,424)      17,583        6,258       25,056
                         -----------  -----------  -----------   ----------
AFFO - Investment
Management              $      (271) $    46,184  $    10,771  $    65,019
                         ===========  ===========  ===========   ==========

Real Estate Ownership
Net Income from real
estate ownership
attributable to W. P.
Carey members (a)       $    29,624  $    52,842  $    39,554  $    64,823
  Adjustments:
  Depreciation and
   amortization of real
   property                    5,673        6,240       11,820       10,715
  Straight-line and
   other rent
   adjustments                     -            -            -            -
  Impairment charges           1,003           41        6,728           41
  (Gain) loss on sale of
   real estate, net           (1,686)         121       (1,505)        (660)
  Proportionate share of
   adjustments to equity
   in net income of
   partially owned
   entities to arrive at
   FFO:
    Depreciation and
     amortization of
     real property               730        1,328        1,628        2,876
    Impairment charges
     (b)                           -            -            -        1,090
    (Gain) loss on sale
     of real estate, net     (15,557)          34      (15,415)          34
  Proportionate share of
   adjustments for
   noncontrolling
   interests to arrive
   at FFO                       (434)        (123)        (868)        (319)
                         -----------  -----------  -----------  -----------
    Total adjustments        (10,271)       7,641        2,388       13,777
                         -----------  -----------  -----------  -----------
FFO - as defined by
NAREIT (b)                   19,353       60,483       41,942       78,600
                         -----------  -----------  -----------  -----------
  Adjustments:
    Gain on change in
     control of
     interests (c)                 -      (27,859)           -      (27,859)
    Gain on
     deconsolidation of
     a subsidiary                  -            -            -            -
    Other depreciation,
     amortization and
     non-cash charges            (88)      (2,167)        (757)      (2,802)
    Realized losses on
     foreign currency,
     derivatives and
     other                       542            -          542            -
    Amortization of
     deferred financing
     costs                       402            -          866            -
    Straight-line and
     other rent
     adjustments                (883)      (1,020)      (1,998)      (1,437)
    Above-market rent
     intangible lease
     amortization, net           111            -          111            -
    Merger expense             1,359            -        2,625            -
    Proportionate share
     of adjustments to
     equity in net
     income of partially
     owned entities to
     arrive at AFFO:               -            -            -            -
        Straight-line
         and other rent
         adjustments            (363)        (142)        (776)        (764)
        Below-market
         rent intangible
         lease
         amortization,
         net                      (3)           -           (3)           -
        AFFO adjustments
         to equity
         earnings from
         equity
         investments           7,687       (2,508)      14,613        1,270
    Proportionate share
     of adjustments for
     noncontrolling
     interests to arrive
     at AFFO                     (25)          73          (44)         159
                         -----------  -----------  -----------   ----------
        Total
         adjustments           8,739      (33,623)      15,179      (31,433)
                         -----------  -----------  -----------   ----------
AFFO - Real Estate
Ownership               $    28,092  $    26,860  $    57,121  $    47,167
                         ===========  ===========  ===========  ===========

Total Company
FFO - as defined by
NAREIT                  $    21,506  $    89,084  $    46,455  $   118,563
                         ===========  ===========  ===========  ===========
FFO - as defined by
NAREIT per share
(diluted)               $      0.53  $      2.21  $      1.14  $      2.95
                         ===========  ===========  ===========  ===========
AFFO                     $    27,821  $    73,044  $    67,892  $   112,186
                         ===========  ===========  ===========  ===========
AFFO per share (diluted) $      0.68  $      1.82  $      1.66  $      2.79
                         ===========  ===========  ===========  ===========
Diluted weighted average
shares outstanding       40,757,055   40,243,548   40,828,646   40,192,418
                         ===========  ===========  ===========  ===========

(a) Effective April 1, 2012, we include cash distributions and deferred
revenue received and earned from the operating partnerships of CPA®:16 -
Global, CPA®:17 - Global and CWI in our Real Estate Ownership segment.
Results of operations for the prior year periods have been reclassified to
conform to the current period presentation. During the third quarter of
2011, CPA®:16 - Global finalized its assessment of the fair values of the
assets acquired and liabilities assumed in connection with the CPA®:14/16
merger and made certain adjustments during that quarter. Our proportionate
share of the adjustments before income taxes was approximately $2.6
million. In accordance with current accounting guidance, we have
retrospectively adjusted our results of operations in our Real Estate
Ownership segment for the three and six months ended June 30, 2011 to
include such adjustments.

(b) The SEC Staff has recently advised that they take no position on the
inclusion or exclusion of impairment write-downs in arriving at Funds From
Operations ("FFO"). Since 2003, the National Association of Real Estate
Investment Trusts ("NAREIT") has taken the position that the exclusion of
impairment charges is consistent with its definition of FFO. Accordingly,
we have revised our computation of FFO to exclude impairment charges, if
any, in arriving at FFO for all periods presented.

(c) Represents gain recognized on purchase of the remaining interests in
two investments from CPA®:14, which we had previously accounted for under
the equity method. In connection with purchasing these properties, we
recognized a net gain of $27.9 million during the three and six months
ended June 30, 2011 to adjust the carrying value of our existing interests
in these investments to their estimated fair values.

Non-GAAP Financial Disclosure
Funds from operations (FFO) is a non-GAAP defined by NAREIT. NAREIT defines
FFO as net income or loss (as computed in accordance with GAAP) excluding:
depreciation and amortization expense from real estate assets, impairment
charges on real estate, gains or losses from sales of depreciated real
estate assets and extraordinary items; however FFO related to assets held
for sale, sold or otherwise transferred and included in the results of
discontinued operations are included. These adjustments also incorporate
the pro rata share of unconsolidated subsidiaries. FFO is used by
management, investors and analysts to facilitate meaningful comparisons of
operating performance between periods and among our peers. Although NAREIT
has published this definition of FFO, companies often modify this
definition as they seek to provide financial measures that meaningfully
reflect their distinctive operations.

We modify the NAREIT computation of FFO to include other adjustments to
GAAP net income to adjust for certain non-cash charges such as amortization
of intangibles, deferred income tax benefits and expenses, straight-line
rents, stock compensation, gains or losses from extinguishment of debt and
deconsolidation of subsidiaries and unrealized foreign currency exchange
gains and losses. We refer to our modified definition of FFO as AFFO. We
exclude these items from GAAP net income as they are not the primary
drivers in our decision making process. Our assessment of our operations is
focused on long-term sustainability and not on such non-cash items, which
may cause short-term fluctuations in net income but have no impact on cash
flows, and we therefore use AFFO as one measure of our operating
performance when we formulate corporate goals, evaluate the effectiveness
of our strategies, and determine executive compensation.

We believe that AFFO is a useful supplemental measure for investors to
consider because it will help them to better assess the sustainability of
our operating performance without potentially distorting the impact of
these short-term fluctuations. However, there are limits on the usefulness
of AFFO to investors. For example, impairment charges and unrealized
foreign currency losses that we exclude may become actual realized losses
upon the ultimate disposition of the properties in the form of lower cash
proceeds or other considerations.

                           W. P. CAREY & CO. LLC

          Adjusted Cash Flow from Operating Activities (Unaudited)
             (in thousands, except share and per share amounts)

                                                  Six Months Ended June 30,
                                                 --------------------------
                                                     2012          2011
                                                 ------------  ------------

Summarized cash flow information:
   Net cash provided by operating activities     $     11,805  $     48,594
                                                 ============  ============
   Net cash provided by (used in) investing
    activities                                   $     41,380  $   (127,811)
                                                 ============  ============
   Net cash (used in) provided by financing
    activities                                   $    (42,534) $     40,296
                                                 ============  ============

Reconciliation of adjusted cash flow from
operating activities:
   Cash flow provided by operating activities:   $     11,805  $     48,594
   Adjustments related to equity method
    investments:
   Add: Distributions received from equity
    investments in real estate in excess of
    equity income                                      15,909        11,891
   Less: Distributions received from equity
    investments in real estate in excess of
    equity income - attributable to financing
    activities                                              -        (2,115)
                                                 ------------  ------------
   Distributions received from equity
    investments in excess of equity income -
    attributable to operating activities (a)     $     15,909  $      9,776
                                                 ------------  ------------
   Adjustments related to non-controlling
    interests:
   Less: Distributions (paid to) net of
    contributions received from non-controlling
    interests                                             315        (1,363)
   Add: Distributions paid to (received from)
    non-controlling interests, net not
    attributable to operating activities                    -         1,300
                                                 ------------  ------------
   Distributions received from (paid to)
    noncontrolling interests - attributable to
    operating activities (b)                              315           (63)
                                                 ------------  ------------
   Adjustments related to changes in working
    capital: (c)
   Net changes in other assets and liabilities         20,142        11,543
   Net prepayment of income taxes at end of
    period                                             10,152         9,500
                                                 ------------  ------------
                                                       30,294        21,043
                                                 ------------  ------------
   CPA®:14/16 Merger - revenue net of taxes on
    special distribution                                    -       (23,434)
                                                 ------------  ------------

   Adjusted cash flow from operating activities
    (inclusive of Merger costs totaling $4.7
    million in 2012) (c)                         $     58,323  $     55,916
                                                 ============  ============

   Distributions declared                        $     46,659  $     42,561
                                                 ============  ============

(a) Cash flow provided by operating activities on a GAAP basis does not
include distributions that we receive from equity investments in excess of
our equity income. All such excess distributions, including our share of
distributions of property-level cash flows in excess of operating income,
are reported as cash flows provided by investing activities in our
statement of cash flows. In calculating adjusted cash flow from operating
activities, we make an adjustment to our reported cash flow provided by
operating activities to add such distributions to the extent they relate to
our pro rata share of property-level operating income, after deducting any
portion of such distributions attributable to the financing or investment
activities of the underlying jointly-owned investment.

(b) Cash flow provided by operating activities on a GAAP basis does not
include contributions that we receive from noncontrolling interests and
distributions that we pay to noncontrolling interests in our consolidated
jointly-owned investments. All such contributions and distributions,
including contributions to and distributions of property-level operating
cash flows, are reported as cash flows used in or provided by financing
activities in our statement of cash flows. In calculating adjusted cash
flow from operating activities, we make adjustments to our reported cash
flow provided by operating activities to add contributions received from
noncontrolling interests and subtract distributions paid to noncontrolling
interests to the extent these contributions or distributions relate to
operating activities of the underlying property jointly-owned investments.

(c) Cash flow provided by operating activities on a GAAP basis includes
adjustments to reflect the impact of the "net changes in other operating
assets and liabilities" as well as the change in income taxes, net. We make
adjustments to cash flow provided by operating activities to incorporate
changes between reporting periods in other assets and liabilities,
including accrued and prepaid income taxes, as we believe that these
adjustments better reflect cash generated from core operations.

(d) Amount represents subordinated disposition revenue of $21.3 million
earned in connection with the CPA®:14/16 merger and taxes of $2.2 million
on a special distribution made in connection with the CPA®:14/16 merger. We
make an adjustment to deduct this revenue because it is generally earned in
connection with one-time liquidity events as opposed to cash flow generated
from our core operations.

(e) Adjusted cash flow from operating activities for the six months ended
June 30, 2012 includes a reduction of $4.7 million as a result of charges
incurred in connection with the Merger with CPA®:15. Management does not
consider these costs to be an ongoing cash outflow when evaluating cash
flow generated from our core operations using this supplemental financial
measure.

Non-GAAP Financial Disclosure
Adjusted cash flow from operating activities refers to our cash provided by
operating activities, as computed in accordance with GAAP, adjusted, where
applicable, primarily to: add cash distributions of property-level
operating cash flows that we receive from our investments in unconsolidated
real estate jointly-owned investments in excess of our equity income;
subtract cash distributions of property-level operating cash flows that we
make to our noncontrolling partners in real estate jointly-owned
investments that we consolidate net of such partners' contributions to our
share of property-level operating cash flows; and eliminate changes in
working capital. We hold a number of interests in real estate jointly-owned
investments, and we believe that adjusting our GAAP cash provided by
operating activities to reflect these actual cash receipts and cash
payments that are attributable to the property-level operating cash flows
of the underlying jointly-owned investments, as well as eliminating the
effect of timing differences between the payment of certain liabilities and
the receipt of certain receivables in a period other than that in which the
item is recognized, may give investors additional information about our
actual cash flow that is not incorporated in cash flow from operating
activities as defined by GAAP. The jointly-owned investments are property-
owning entities and their activities are generally limited to receiving
rental income, financing the property and ultimately disposing of the
property. Distributions are contributions related to these activities are
based on the ownership percentages of the partners in each jointly-owned
investment. In accordance with each jointly-owned investment's operating
agreement, the jointly-owned investment partners generally participate in
the investment's operating cash flow, debt financing and proceeds from
property distributions. Distributions of cash to the jointly-owned
investment partners are typically made on a monthly basis.

We believe that adjusted cash flow from operating activities is a useful
supplemental measure for assessing the cash flow generated from our core
operations as it gives investors important information about our liquidity
that is not provided within cash flow from operating activities as defined
by GAAP, and we use this measure when evaluating distributions to
shareholders. Adjusted cash flow from operating activities should not be
considered as an alternative to cash provided by operating activities
computed on a GAAP basis as a measure of our liquidity.

                           W. P. CAREY & CO. LLC
                  Total Adjusted Revenue (Pro rata Basis)
                               (in thousands)

                                                Six Months Ended September
                 Three Months Ended June 30,               30,
                ----------------------------  -----------------------------
                     2012         2011 (e)         2012          2011 (e)
                -------------  -------------  --------------  -------------
                 Revenue   %    Revenue   %    Revenue    %    Revenue   %
                --------  ---  --------  ---  ---------  ---  --------  ---

Asset
management
revenue        $ 15,636   20% $ 16,619   23% $  31,238   20% $ 36,439   24%
Structuring
revenue (a)       3,622    5%    5,735    8%    11,260    7%   21,680   15%
                --------  ---  --------  ---  ---------  ---  --------  ---
Investment
Management
Revenues         19,258   25%   22,354   31%    42,498   27%   58,119   39%
                --------  ---  --------  ---  ---------  ---  --------  ---

Real estate
revenues         57,205   75%   50,078   69%   114,586   73%   90,872   61%
                --------  ---  --------  ---  ---------  ---  --------  ---
Total Adjusted
Revenue        $ 76,463  100% $ 72,432  100% $ 157,084  100% $148,991  100%
                ========  ===  ========  ===  =========  ===  ========  ===

Reconciliation
of Total
Adjusted
Revenue
Total revenue -
as reported    $ 68,042       $116,776       $ 137,429       $192,695
Less:
Reimbursed
costs from
affiliates (b)  (20,484)       (17,059)        (39,221)       (34,778)
Less:
Wholesaling
revenue (b)      (4,080)        (2,922)         (7,867)        (6,202)
Less:
Incentive,
termination
and
subordinated
disposition
revenue (c)           -        (52,515)              -        (52,515)
Lease revenues
- discontinued
operations           45          1,622             793          3,430
Add: Pro rata
share of
revenues from
equity
investments       5,738          7,129          12,150         14,980
Less: Pro rata
share of
revenues due
to
noncontrolling
interests          (422)          (666)           (850)        (1,741)
Add: Share of
pro rata
revenues -
CPA®REITs        20,161         18,094          40,213         29,334
Add: Cash
distributions
- CPA®REITs       7,463          1,973          14,437          3,788
                --------       --------       ---------       --------
Total Adjusted
Revenue        $ 76,463       $ 72,432       $ 157,084       $148,991
                ========       ========       =========       ========

Reconciliation
of Real Estate
Revenues
Lease revenues
- as reported  $ 17,228       $ 16,217       $  34,859       $ 30,089
Lease revenues
- discontinued
operations           45          1,622             793          3,430
                --------       --------       ---------       --------
Total
consolidated
lease revenues   17,273         17,839          35,652         33,519
Add: Pro rata
share of
revenues from
equity
investments       5,738          7,129          12,150         14,980
Less: Pro rata
share of
revenues due
to
noncontrolling
interests          (422)          (666)           (850)        (1,741)
                --------       --------       ---------       --------
Total pro rata
net lease
revenues         22,589         24,302          46,952         46,758

Add: Share of
Pro Rata
Revenues -
CPA® REITs
  CPA®:14              -            860               -          4,484
  CPA®:15          3,947          4,152           7,978          8,040
  CPA®:16 -
   Global         15,514         12,734          30,919         16,226
  CPA®:17 -
   Global            700            348           1,316            584
                --------       --------       ---------       --------
Total share of
pro rata
revenues -
CPA® REITs       20,161         18,094          40,213         29,334
Add: Cash
Distributions
- CPA® REITs
  CPA®:16 -
   Global          3,598              -           7,879              -
  CPA®:17 -
   Global          3,865          1,973           6,558          3,788
                --------       --------       ---------       --------
Total share of
cash
distributions
- CPA® REITs      7,463          1,973          14,437          3,788
Add: Other real
estate income
(d)               6,992          5,709          12,984         10,992
                --------       --------       ---------       --------
Total Pro Rata
Net Lease
Revenues       $ 57,205       $ 50,078       $ 114,586       $ 90,872
                ========       ========       =========       ========

(a) We earn structuring revenue on acquisitions structured on behalf of the
CPA® REITS and CWI that we manage and expect significant period-to-period
variation in such revenue based on changes in investment volume.
Investments structured on behalf of the CPA® REITS and CWI totaled
approximately $98 million and $249 million for the three months ended June
30, 2012 and 2011, respectively, and $270 million and $594 million for the
six months ended June 30, 2012 and 2011, respectively

(b) Total adjusted revenue excludes reimbursements of costs received from
the affiliated CPA® REITS and CWI as they have no impact on net income.
Also excluded is wholesaling revenue earned in connection with CPA®:17 -
Global's and CWI's public offerings, which is substantially offset by
underwriting costs incurred in connection with the offering.

(c) In connection with providing a liquidity event for CPA®:14
shareholders, in May 2011, we earned termination revenue of $31.2 million
and subordinated disposition revenue of $21.3 million, which we received in
shares of CPA®:14 and cash, respectively. These CPA®:14 shares were
subsequently converted to shares of CPA®:16 - Global in connection with the
CPA®:14/16 merger.

(d) Other real estate income generally consists of revenue from Carey
Storage Management LLC, a subsidiary that invests in domestic self-storage
properties and Livho, Inc., a subsidiary that operates a hotel franchise.
Other real estate income also includes lease termination payments and other
non-rents related revenues from real estate ownership, and as a result, we
expect Other real estate income to fluctuate period to period.

(e) Amounts presented for prior year periods do not reflect adjustments to
prior period amounts for assets reclassified as held for sale or sold in
the current period and reflected as discontinued operations.

                            W. P. CAREY & CO. LLC

      Selected Investment Management Fees and Distributions (Unaudited)
                               (in thousands)

                            Asset Management Revenue
                            ------------------------
                             Base Asset               Distributions
                             Management  Performance  of Available
                               Revenue     Revenue        Cash        Total
                            ------------ ----------- -------------- --------
                                    Three Months Ended June 30, 2012
                            ------------------------------------------------
CPA®:15                            3,072           -              -    3,072
CPA®:16 - Global                   4,597       3,072          3,598   11,267
CPA®:17 - Global                   4,765           -          3,865    8,630
CWI/Other                            130           -              -      130
                            ------------ ----------- -------------- --------
Total                       $     12,564 $     3,072 $        7,463 $ 23,099
                            ============ =========== ============== ========

                                    Three Months Ended June 30, 2011
                            ------------------------------------------------
Total                       $     11,532 $     5,087 $        1,973 $ 18,592
                            ============ =========== ============== ========

                            Asset Management Revenue
                            ------------------------
                             Base Asset               Distributions
                             Management  Performance  of Available
                              Revenue      Revenue        Cash        Total
                            ----------- ------------ -------------- --------
                                     Six Months Ended June 30, 2012
                            ------------------------------------------------
CPA®:15                           6,210            -              -    6,210
CPA®:16 - Global                  9,298        6,209          7,879   23,386
CPA®:17 - Global                  9,318            -          6,558   15,876
CWI/Other                           203            -              -      203
                            ----------- ------------ -------------- --------
Total                       $    25,029 $      6,209 $       14,437 $ 45,675
                            =========== ============ ============== ========

                                      Six Months Ended June 30, 2011
                            ------------------------------------------------
Total                       $    22,878 $     13,561 $        3,788 $ 40,227
                            =========== ============ ============== ========

 

COMPANY CONTACT:
Cheryl Sanclemente
W. P. Carey & Co. LLC
212-492-8995
Email Contact

PRESS CONTACT:
Guy Lawrence
Ross & Lawrence
212-308-3333
Email Contact

 

Source: W. P. Carey & Co. LLC

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