NEW YORK, NY -- (MARKET WIRE) -- 02/25/10 --
Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the fourth quarter and year ended
December 31, 2009.
QUARTERLY AND YEAR-END RESULTS
-- Cash flows from operating activities for the year ended December 31,
2009 increased to $74.5 million from $63.2 million for the prior year.
-- Adjusted cash flow from operating activities for the year ended December
31, 2009 increased to $93.9 million, compared to $89.4 million for 2008.
-- Total revenues net of reimbursed expenses for the fourth quarter of 2009
were $48.2 million, compared to $51.6 million for the fourth quarter of
2008. Total revenues net of reimbursed expenses for the year ended
December 31, 2009 were $187.2 million, compared to $197.4 million for
2008. Reimbursed expenses are excluded from total revenues because they
have no impact on net income.
-- Net income for the fourth quarter of 2009 was $23.0 million, compared
to $21.9 million for the same period in 2008. For the year ended
December 31, 2009, net income was $69.0 million, compared to
$78.0 million for 2008.
-- For the fourth quarter of 2009, funds from operations, as adjusted
(AFFO), were $33.7 million or $0.83 per diluted share, compared to
$33.8 million or $0.84 per diluted share for the same period in 2008.
AFFO for the year ended December 31, 2009 was $122.9 million or $3.09
per diluted share, compared to $124.5 million or $3.09 per diluted share
for 2008.
-- During 2009, we recorded impairment charges of $10.4 million. We
currently estimate that our affiliated CPA® REITs will record
impairment charges aggregating approximately $170.0 million during
2009, which reduced the amount of income we recognize from these
equity investments by approximately $11.5 million for the year. We
received approximately $14.2 million in cash distributions from our
equity ownership in the CPA® REITs for the year ended December 31,
2009.
-- Further information concerning AFFO and adjusted cash flow from
operating activities, non-GAAP supplemental performance metrics, is
presented in the accompanying tables.
INVESTMENT, FUNDRAISING AND FINANCING ACTIVITY
-- Investment volume, for our own portfolio and on behalf of the CPA®
REITs, for the year ended December 31, 2009 was $547.7 million,
compared to $457.0 million for 2008. International investments comprised
36% of our total investments during 2009, as compared to 46% during
2008, and we expect that international transactions will continue to
form a significant portion of the investments we structure.
-- In the fourth quarter, we closed four transactions on behalf of the
CPA® REITs: a $15.0 million sale leaseback with OBI Group, which is
our fourth transaction with this German DIY retailer; a $45.0 million
acquisition of US Oncology's corporate headquarters; a $33.0 million
acquisition of Mori Seiki's North American headquarters; and a
$51.0 million sale leaseback with Spanish food retailer Eroski, which
was the first tranche of a total $104.0 million transaction that we
completed in February 2010.
-- We continue to raise investor capital through our latest CPA® REIT
offering, CPA®:17 - Global, so that we may take advantage of
attractive investment opportunities that we believe are afforded by
the current market environment. To date, CPA®:17 - Global has raised
more than $850.0 million of its up-to $2.0 billion offering. Generally,
our month over month fundraising increased in 2009; we raised
$141.5 million in the fourth quarter, which represented an increase
of 98%, 41% and 14% over the first, second and third quarters of 2009,
respectively.
-- We have begun to see some improvements in the financing markets and
have been successful on refinancing maturing debt or obtaining financing
for new transactions. During 2009, W. P. Carey and our CPA® REITs
secured approximately $358.5 million in debt financings, including a
$120.0 million loan with the Bank of China, New York Branch for The
New York Times Company's Midtown Manhattan headquarters that was
purchased in March 2009.
ASSETS UNDER MANAGEMENT
-- W. P. Carey is the advisor to the CPA® REITs, which had real estate
assets of approximately $8.0 billion and total assets of approximately
$8.4 billion as of December 31, 2009.
-- As of December 31, 2009, the occupancy rate of our 14 million square
foot owned portfolio was approximately 94%. In addition, for the
92 million square feet owned by the CPA® REITs, the occupancy rate
was approximately 97%.
DISTRIBUTIONS
-- The Board of Directors raised the quarterly cash distribution to $0.502
per share for the fourth quarter of 2009, marking our 35th consecutive
distribution increase. In addition, as a result of an increase in our
2009 taxable income, the Board declared a special distribution of $0.30
per share in the fourth quarter. Both distributions were paid on January
15, 2010 to shareholders of record as of December 31, 2009.
Gordon DuGan, President and CEO of W. P. Carey, said, "During 2009, we were
able to raise funds, structure attractive investments, finance
acquisitions, refinance maturing debt and effectively manage our existing
property portfolios. Consequently, despite the many challenges that
continued to impact the markets and our tenants, we succeeded in generating
stable cash flow and in turn, continued to pay out increasing distributions
to our investors.
"We are excited for the opportunities 2010 holds; with CPA®:17 funds
raised now exceeding $850.0 million, we continue to see strong investor
preference for long term income producing investments, and as a result, we
feel we are well positioned to maintain our role as a leading provider of
long term capital to creditworthy corporations and property owners
worldwide."
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register.
Time: Thursday, February 25, 2010 at 1:00 PM (ET)
Call-in Number: 800-860-2442
(International) +1-412-858-4600
Webcast: www.wpcarey.com/earnings
Podcast: www.wpcarey.com/podcast
Available after 4:00 PM (ET)
Replay Number: 877-344-7529
(International) +1-412-317-0088
Replay Passcode: 437628#
Replay Available until March 11, 2010 at midnight ET.
W. P. Carey & Co. LLC
W. P. Carey & Co. LLC (NYSE: WPC) is an investment management company that
provides long term sale leaseback and build to suit financing for companies
worldwide and manages a global investment portfolio approaching $10
billion. Through its CPA® series of income-generating, non-traded REITs,
W. P. Carey helps 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 275
long-term corporate obligors spanning 28 industries and 15 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
(in thousands, except share and per share amounts)
Years ended December 31,
----------------------------------
2009 2008 2007
---------- ---------- ----------
Revenues
Asset management revenue $ 76,621 $ 80,714 $ 83,051
Structuring revenue 23,273 20,236 78,175
Wholesaling revenue 6,550 5,129 27
Reimbursed costs from affiliates 48,715 41,179 13,782
Lease revenues 65,493 70,696 70,207
Other real estate income 15,224 20,670 12,714
---------- ---------- ----------
235,876 238,624 257,956
---------- ---------- ----------
Operating Expenses
General and administrative (62,615) (62,590) (61,846)
Reimbursable costs (48,715) (41,179) (13,782)
Depreciation and amortization (23,624) (24,428) (24,247)
Property expenses (8,128) (7,259) (5,908)
Other real estate expenses (7,308) (8,196) (7,690)
Impairment charges (9,525) (473) (420)
Provision for settlement - - (29,979)
---------- ---------- ----------
(159,915) (144,125) (143,872)
---------- ---------- ----------
Other Income and Expenses
Other interest income 1,714 2,884 6,842
Income from equity investments in
real estate and CPA®
REITs 13,425 14,198 18,357
Gain on sale of investment in direct
financing lease - 1,103 -
Other income and (expenses) 7,317 1,444 3,114
Interest expense (15,189) (18,858) (20,266)
---------- ---------- ----------
7,267 771 8,047
---------- ---------- ----------
Income from continuing operations
before income taxes 83,228 95,270 122,131
Provision for income taxes (22,793) (23,521) (51,739)
---------- ---------- ----------
Income from continuing operations 60,435 71,749 70,392
---------- ---------- ----------
Discontinued Operations
Income from operations of discontinued
properties 3,331 7,394 5,825
Gains on sale of real estate, net 7,701 - 15,486
Impairment charges (899) (538) (2,914)
---------- ---------- ----------
Income from discontinued operations 10,133 6,856 18,397
---------- ---------- ----------
Net Income 70,568 78,605 88,789
Add: Net loss (income) attributable to
noncontrolling interests 713 950 (4,781)
Less: Net income attributable to
redeemable noncontrolling interests (2,258) (1,508) (4,756)
---------- ---------- ----------
Net Income Attributable to W. P. Carey
Members $ 69,023 $ 78,047 $ 79,252
========== ========== ==========
Basic Earnings Per Share
Income from continuing operations
attributable to W. P. Carey members $ 1.48 $ 1.82 $ 1.74
Income from discontinued operations
attributable to W. P. Carey members 0.26 0.18 0.34
---------- ---------- ----------
Net income attributable to W. P. Carey
members $ 1.74 $ 2.00 $ 2.08
========== ========== ==========
Diluted Earnings Per Share
Income from continuing operations
attributable to W. P. Carey members $ 1.49 $ 1.80 $ 1.71
Income from discontinued operations
attributable to W. P. Carey members 0.25 0.17 0.34
---------- ---------- ----------
Net income attributable to W. P. Carey
members $ 1.74 $ 1.97 $ 2.05
========== ========== ==========
Weighted Average Shares Outstanding
Basic 39,019,709 39,202,520 38,113,857
========== ========== ==========
Diluted 39,712,735 40,221,112 39,868,208
========== ========== ==========
Amounts Attributable to W. P. Carey
Members
Income from continuing operations, net
of tax $ 58,890 $ 71,191 $ 66,249
Income from discontinued operations,
net of tax 10,133 6,856 13,003
---------- ---------- ----------
Net income $ 69,023 $ 78,047 $ 79,252
========== ========== ==========
W. P. CAREY & CO. LLC
Consolidated Statements of Cash Flows
(in thousands)
Years ended December 31,
----------------------------
2009 2008 2007
-------- -------- --------
Cash Flows -- Operating Activities
Net income $ 70,568 $ 78,605 $ 88,789
Adjustments to net income:
Depreciation and amortization including
intangible assets and deferred financing
costs 24,476 27,197 27,321
(Income) loss from equity investments in
real estate and CPA® REITs in excess of
distributions received (2,258) 1,866 (2,296)
Straight-line rent adjustments 2,223 2,227 2,972
Gains on sale of real estate and investment
in direct financing lease (7,701) (1,103) (15,827)
Gain on lease termination - (4,998) -
Gain on extinguishment of debt (6,991) - -
Allocation of earnings to profit sharing
interest 3,900 - -
Management income received in shares of
affiliates (31,721) (40,717) (55,535)
Unrealized (gain) loss on foreign currency
transactions, warrants and securities (174) 2,656 (1,659)
Realized gain on foreign currency
transactions and other (257) (2,250) (1,332)
Impairment charges 10,424 1,011 3,334
Stock-based compensation expense 9,336 7,278 5,551
Decrease in deferred acquisition revenue
receivable 25,068 48,266 16,164
Increase in structuring revenue receivable (11,672) (10,512) (55,897)
(Decrease) increase in income taxes, net (9,276) (8,079) 1,796
(Decrease) increase in settlement provision - (29,979) 29,979
Net changes in other operating assets and
liabilities (1,401) (8,221) 4,111
-------- -------- --------
Net cash provided by operating activities 74,544 63,247 47,471
-------- -------- --------
Cash Flows -- Investing Activities
Distributions received from equity
investments in real estate and CPA® REITs
in excess of equity income 39,102 19,852 17,441
Capital contributions made to equity
investments in real estate (2,872) (1,769) (3,596)
Purchases of real estate and equity
investments in real estate (39,632) (201) (80,491)
Capital expenditures (7,775) (14,051) (15,987)
Proceeds from sales of real estate, net
investment in direct financing lease and
securities 43,487 5,062 42,214
Proceeds from transfer of profit sharing
interest 21,928 - -
Funds placed in escrow in connection with
the sale of property (36,132) - (19,515)
Funds released from escrow in connection
with the sale of property - 636 19,410
Loans to affiliates - - (8,676)
Proceeds from repayment of loans to
affiliates - - 8,676
VAT refunded on purchase of real estate - 3,189 -
Payment of deferred acquisition revenue to
affiliate - (120) (524)
-------- -------- --------
Net cash provided by (used in) investing
activities 18,106 12,598 (41,048)
-------- -------- --------
Cash Flows -- Financing Activities
Distributions paid (78,618) (87,700) (71,608)
Contributions from noncontrolling interests 2,947 2,582 1,703
Distributions to noncontrolling interests (5,505) (5,607) (8,168)
Purchase of noncontrolling interests (15,380) - -
Distributions to profit sharing interest (5,645) - -
Scheduled payments of mortgage principal (9,534) (9,678) (16,072)
Proceeds from credit facilities 150,500 129,300 182,781
Prepayments of credit facilities (148,518) (111,572) (102,000)
Proceeds from mortgage financing 42,495 10,137 6,602
Prepayments of mortgage principal (13,974) - (13,090)
Proceeds from loans from affiliates 1,625 - 7,569
Repayment of loans from affiliates (1,770) (7,569) -
Funds placed in escrow in connection with
financing - (400) -
Payment of financing costs, net of deposits
refunded (862) (375) (1,350)
Proceeds from issuance of shares 1,507 23,350 20,682
Windfall tax benefits associated with
stock-based compensation awards 143 2,156 1,939
Repurchase and retirement of shares (10,686) (15,413) (25,525)
-------- -------- --------
Net cash used in financing activities (91,275) (70,789) (16,537)
-------- -------- --------
Change in Cash and Cash Equivalents During
the Year
Effect of exchange rate changes on cash 276 (394) 143
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents 1,651 4,662 (9,971)
Cash and cash equivalents, beginning of year 16,799 12,137 22,108
-------- -------- --------
Cash and cash equivalents, end of year $ 18,450 $ 16,799 $ 12,137
======== ======== ========
W. P. CAREY & CO. LLC
Financial Highlights (Unaudited)
(in thousands, except share and 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 ended Years ended
December 31, December 31,
----------------------------- ------------------------------
2009 2008 2007 2009 2008 2007
--------- --------- -------- -------- --------- ---------
EBITDA
Investment
management $ 18,892 $ 13,079 $ (3,906) $ 54,179 $ 61,805 $ 91,145
Real estate
ownership 20,883 23,238 31,123 77,674 84,408 88,228
--------- --------- -------- -------- --------- ---------
Total $ 39,775 $ 36,317 $ 27,217 $131,853 $ 146,213 $ 179,373
========= ========= ======== ======== ========= =========
AFFO
Investment
management $ 16,802 $ 11,415 $(14,281) $ 55,550 $ 49,119 $ 69,169
Real estate
ownership 16,871 22,412 17,192 67,326 75,331 64,097
--------- --------- -------- -------- --------- ---------
Total $ 33,673 $ 33,827 $ 2,911 $122,876 $ 124,450 $ 133,266
========= ========= ======== ======== ========= =========
EBITDA Per
Share
(Diluted)
Investment
management $ 0.47 $ 0.32 $ (0.10) $ 1.36 $ 1.54 $ 2.29
Real estate
ownership 0.52 0.58 0.78 1.96 2.10 2.21
--------- --------- -------- -------- --------- ---------
Total $ 0.99 $ 0.90 $ 0.68 $ 3.32 $ 3.64 $ 4.50
========= ========= ======== ======== ========= =========
AFFO Per
Share
(Diluted)
Investment
management $ 0.41 $ 0.28 $ (0.36) $ 1.39 $ 1.22 $ 1.73
Real estate
ownership 0.42 0.56 0.43 1.70 1.87 1.61
--------- --------- -------- -------- --------- ---------
Total $ 0.83 $ 0.84 $ 0.07 $ 3.09 $ 3.09 $ 3.34
========= ========= ======== ======== ========= =========
Adjusted Cash
Flow From
Operating
Activities
Adjusted cash
flow $ 93,880 $ 89,385 $ 84,241
======== ========= =========
Adjusted cash
flow per
share
(diluted) $ 2.36 $ 2.22 $ 2.11
======== ========= =========
Distributions
declared per
share $ 1.996 $ 1.955 $ 1.878
======== ========= =========
Payout ratio
(distributions
per share/adjusted
cash flow per
share) 85% 88% 89%
======== ========= =========
W. P. CAREY & CO. LLC
Financial Results - Adjusted for Comparability (Unaudited)
(in thousands, except share and per share amounts)
Three months ended December 31,
-----------------------------------
2009 2008 2007
----------- ----------- -----------
Net Income
Net income $ 22,986 $ 21,900 $ 6,013
=========== =========== ===========
Net income per share (diluted) $ 0.59 $ 0.56 $ 0.15
=========== =========== ===========
Items that affect comparability:
SEC Settlement (a) - - 21,012
CPA®:16 - Global performance
adjustment, net (b) - - -
Out-of-period adjustment (c) - - -
----------- ----------- -----------
- - 21,012
----------- ----------- -----------
Net income - adjusted for comparability $ 22,986 $ 21,900 $ 27,025
=========== =========== ===========
Net income per share (diluted) -
adjusted for comparability $ 0.59 $ 0.56 $ 0.68
=========== =========== ===========
EBITDA
EBITDA $ 39,775 $ 36,317 $ 27,217
=========== =========== ===========
EBITDA per share (diluted) $ 0.99 $ 0.90 $ 0.68
=========== =========== ===========
Items that affect comparability:
SEC Settlement (a) - - 29,979
CPA®:16 - Global performance
adjustment, net (b) - - -
----------- ----------- -----------
- - 29,979
----------- ----------- -----------
EBITDA - adjusted for comparability $ 39,775 $ 36,317 $ 57,196
=========== =========== ===========
EBITDA per share (diluted) - adjusted
for comparability $ 0.99 $ 0.90 $ 1.44
=========== =========== ===========
AFFO
AFFO $ 33,673 $ 33,827 $ 2,911
=========== =========== ===========
AFFO per share (diluted) $ 0.83 $ 0.84 $ 0.07
=========== =========== ===========
Items that affect comparability:
SEC Settlement (a) - - 21,012
CPA®:16 - Global performance
adjustment, net (b) - - -
----------- ----------- -----------
- - 21,012
----------- ----------- -----------
AFFO - adjusted for comparability $ 33,673 $ 33,827 $ 23,923
=========== =========== ===========
AFFO per share (diluted) - adjusted for
comparability $ 0.83 $ 0.84 $ 0.60
=========== =========== ===========
Diluted weighted average shares
outstanding 40,390,393 40,466,930 39,815,933
=========== =========== ===========
Years ended December 31,
-----------------------------------
2009 2008 2007
----------- ----------- ----------
Net Income
Net income $ 69,023 $ 78,047 $ 79,252
=========== =========== ==========
Net income per share (diluted) $ 1.74 $ 1.97 $ 2.05
=========== =========== ==========
Items that affect comparability:
SEC Settlement (a) - - 21,012
CPA®:16 - Global performance
adjustment, net (b) - - (21,600)
Out-of-period adjustment (c) - - (3,500)
----------- ----------- ----------
- - (4,088)
----------- ----------- ----------
Net income - adjusted for comparability $ 69,023 $ 78,047 $ 75,164
=========== =========== ==========
Net income per share (diluted) -
adjusted for comparability $ 1.74 $ 1.97 $ 1.95
=========== =========== ==========
EBITDA
EBITDA $ 131,853 $ 146,213 $ 179,373
=========== =========== ==========
EBITDA per share (diluted) $ 3.32 $ 3.64 $ 4.50
=========== =========== ==========
Items that affect comparability:
SEC Settlement (a) - - 29,979
CPA®:16 - Global performance
adjustment, net (b) - - (39,300)
----------- ----------- ----------
- - (9,321)
----------- ----------- ----------
EBITDA - adjusted for comparability $ 131,853 $ 146,213 $ 170,052
=========== =========== ==========
EBITDA per share (diluted) - adjusted
for comparability $ 3.32 $ 3.64 $ 4.27
=========== =========== ==========
AFFO
AFFO $ 122,876 $ 124,450 $ 133,266
=========== =========== ==========
AFFO per share (diluted) $ 3.09 $ 3.09 $ 3.34
=========== =========== ==========
Items that affect comparability:
SEC Settlement (a) - - 21,012
CPA®:16 - Global performance
adjustment, net (b) - - (42,300)
----------- ----------- ----------
- - (21,288)
----------- ----------- ----------
AFFO - adjusted for comparability $ 122,876 $ 124,450 $ 111,978
=========== =========== ==========
AFFO per share (diluted) - adjusted for
comparability $ 3.09 $ 3.09 $ 2.81
=========== =========== ==========
Diluted weighted average shares
outstanding 39,712,735 40,221,112 39,868,208
=========== =========== ==========
Non-GAAP Financial Disclosure
The above table presents each of net income, EBITDA and AFFO adjusted for
items that affect comparability. As further described in the following
tables, we believe that these adjusted supplemental measures are useful to
investors and analysts for comparing our current financial performance with
prior periods, although they do not represent net income or cash flow from
operating activities that is computed in accordance with GAAP. Accordingly,
net income, EBITDA and AFFO adjusted for items that affect comparability
should not be considered an alternative for net income or cash flow from
operating activities as an indicator of our financial performance. Net
income, EBITDA and AFFO adjusted for items that affect comparability may
not be comparable to similarly titled measures of other companies. A
description of EBITDA and AFFO and reconciliations to the most directly
comparable GAAP measures are provided on the respective pages of this
earnings release.
(a) Includes a $30.0 million reserve taken in the fourth quarter of 2007
in connection with an SEC settlement.
(b) CPA®:16 - Global performance adjustment, net represents the net of
tax impact of previously deferred asset management revenue, structuring
revenue and interest income less deferred compensation costs recognized
during the second quarter of 2007 following the achievement of
CPA®:16 - Global's performance criterion. Adjustments to EBITDA and
AFFO eliminate the associated provision for income taxes and provision
for deferred income taxes, respectively.
(c) During the third quarter of 2007, we determined that a longer schedule
of depreciation/amortization of assets in certain of our equity method
investment holdings should appropriately be applied to reflect the
lives of the underlying assets rather than the expected holding period
of these investments. We concluded that these adjustments were not
material to any prior periods' consolidated financial statements. We
also concluded that the cumulative adjustment was not material to the
year ended December 31, 2007. As such, the cumulative effect was
recorded in the consolidated statements of income as a one-time
cumulative out-of-period adjustment in the third quarter of 2007. The
effect of this adjustment for the year ended December 31, 2007 was to
increase net income by approximately $3.5 million.
W. P. CAREY & CO. LLC
Reconciliation of Net Income to EBITDA (Unaudited)
(in thousands, except share and per share amounts)
Three months ended December 31,
----------------------------------
2009 2008 2007
----------- ----------- ----------
Investment Management
Net income from investment management
attributable to W. P. Carey members $ 11,616 $ 9,603 $ (12,366)
Adjustments:
Provision for income taxes 6,227 2,246 2,473
Depreciation and amortization 1,049 1,230 5,987
----------- ----------- ----------
EBITDA - investment management $ 18,892 $ 13,079 $ (3,906)
=========== =========== ==========
EBITDA per share (diluted) $ 0.47 $ 0.32 $ (0.10)
=========== =========== ==========
Real Estate Ownership
Net income from real estate ownership
attributable to W. P. Carey members $ 11,370 $ 12,297 $ 18,379
Adjustments:
Interest expense 3,589 4,279 4,995
Provision for income taxes 628 870 453
Depreciation and amortization 4,227 4,738 5,240
Reconciling items attributable to
discontinued operations 1,069 1,054 2,056
----------- ----------- ----------
EBITDA - real estate ownership $ 20,883 $ 23,238 $ 31,123
=========== =========== ==========
EBITDA per share (diluted) $ 0.52 $ 0.58 $ 0.78
=========== =========== ==========
Total Company
EBITDA $ 39,775 $ 36,317 $ 27,217
=========== =========== ==========
EBITDA per share (diluted) $ 0.99 $ 0.90 $ 0.68
=========== =========== ==========
Diluted weighted average shares
outstanding 40,390,393 40,466,930 39,815,933
=========== =========== ==========
Years ended December 31,
-----------------------------------
2009 2008 2007
----------- ----------- -----------
Investment Management
Net income from investment management
attributable to W. P. Carey members $ 29,334 $ 34,858 $ 36,808
Adjustments:
Provision for income taxes 21,038 22,432 50,158
Depreciation and amortization 3,807 4,515 4,179
----------- ----------- -----------
EBITDA - investment management $ 54,179 $ 61,805 $ 91,145
=========== =========== ===========
EBITDA per share (diluted) $ 1.36 $ 1.54 $ 2.29
=========== =========== ===========
Real Estate Ownership
Net income from real estate ownership
attributable to W. P. Carey members $ 39,689 $ 43,189 $ 42,444
Adjustments:
Interest expense 15,189 18,858 20,266
Provision for income taxes 1,755 1,089 1,581
Depreciation and amortization 19,817 19,913 20,068
Reconciling items attributable to
discontinued operations 1,224 1,359 3,869
----------- ----------- -----------
EBITDA - real estate ownership $ 77,674 $ 84,408 $ 88,228
=========== =========== ===========
EBITDA per share (diluted) $ 1.96 $ 2.10 $ 2.21
=========== =========== ===========
Total Company
EBITDA $ 131,853 $ 146,213 $ 179,373
=========== =========== ===========
EBITDA per share (diluted) $ 3.32 $ 3.64 $ 4.50
=========== =========== ===========
Diluted weighted average shares
outstanding 39,712,735 40,221,112 39,868,208
=========== =========== ===========
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 for 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 December 31,
----------------------------------
2009 2008 2007
---------- ---------- ----------
Investment Management
Net income from investment management
attributable to W. P. Carey members $ 11,616 $ 9,603 $ (12,366)
Amortization, deferred taxes and other
non-cash charges (3,370) (1,283) (2,466)
AFFO from equity investments 8,556 3,095 551
---------- ---------- ----------
AFFO - investment management $ 16,802 $ 11,415 $ (14,281)
========== ========== ==========
AFFO per share (diluted) $ 0.41 $ 0.28 $ (0.36)
========== ========== ==========
Real Estate Ownership
Net income from real estate ownership
attributable to W. P. Carey members $ 11,370 $ 12,297 $ 18,379
Gain on sale of direct financing lease - - -
Gain on sale of real estate, net (7,358) - (14,865)
Gain on extinguishment of debt, net (a) - - -
Depreciation, amortization and other
non-cash charges 4,976 7,594 4,929
Straight-line and other rent
adjustments 465 172 964
Impairment charges 5,754 473 1,017
AFFO from equity investments 1,818 2,039 1,662
Noncontrolling interests' share of AFFO (154) (163) 5,106
---------- ---------- ----------
AFFO - real estate ownership $ 16,871 $ 22,412 $ 17,192
========== ========== ==========
AFFO per share (diluted) $ 0.42 $ 0.56 $ 0.43
========== ========== ==========
Total Company
AFFO $ 33,673 $ 33,827 $ 2,911
========== ========== ==========
AFFO per share (diluted) $ 0.83 $ 0.84 $ 0.07
========== ========== ==========
Diluted weighted average shares
outstanding 40,390,393 40,466,930 39,815,933
========== ========== ==========
Years ended December 31,
----------------------------------
2009 2008 2007
---------- ---------- ----------
Investment Management
Net income from investment management
attributable to W. P. Carey members $ 29,334 $ 34,858 $ 36,808
Amortization, deferred taxes and other
non-cash charges 1,796 2,494 30,194
AFFO from equity investments 24,420 11,767 2,167
---------- ---------- ----------
AFFO - investment management $ 55,550 $ 49,119 $ 69,169
========== ========== ==========
AFFO per share (diluted) $ 1.39 $ 1.22 $ 1.73
========== ========== ==========
Real Estate Ownership
Net income from real estate ownership
attributable to W. P. Carey members $ 39,689 $ 43,189 $ 42,444
Gain on sale of direct financing lease - (1,103) -
Gain on sale of real estate, net (7,701) - (15,827)
Gain on extinguishment of debt, net (a) (2,796) - -
Depreciation, amortization and other
non-cash charges 19,513 23,308 20,272
Straight-line and other rent
adjustments 1,273 887 3,080
Impairment charges 10,424 1,011 3,334
AFFO from equity investments 7,505 8,718 6,312
Noncontrolling interests' share of AFFO (581) (679) 4,482
---------- ---------- ----------
AFFO - real estate ownership $ 67,326 $ 75,331 $ 64,097
========== ========== ==========
AFFO per share (diluted) $ 1.70 $ 1.87 $ 1.61
========== ========== ==========
Total Company
AFFO $ 122,876 $ 124,450 $ 133,266
========== ========== ==========
AFFO per share (diluted) $ 3.09 $ 3.09 $ 3.34
========== ========== ==========
Diluted weighted average shares
outstanding 39,712,735 40,221,112 39,868,208
========== ========== ==========
Non-GAAP Financial Disclosure
Funds from operations (FFO) is a non-GAAP financial measure that is
commonly used by investors and analysts in evaluating real estate
companies. Although the National Association of Real Estate Investment
Trusts (NAREIT) has published a definition of FFO, real estate companies
often modify this definition as they seek to provide financial measures
that meaningfully reflect their operations. FFO or funds from
operations - as adjusted (AFFO) should not be considered as an alternative
to net income as an indication of a company's operating performance or to
cash flow from operating activities as a measure of its liquidity and
should be used in conjunction with GAAP net income. FFO or AFFO disclosed
by other REITs may not be comparable to our AFFO calculation.
NAREIT's definition of FFO adjusts GAAP net income to exclude depreciation
and gains/losses from the sales of properties and adjusts for FFO
applicable to unconsolidated partnerships and joint ventures. We
calculate AFFO in accordance with this definition and then 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, impairment charges on real estate
and unrealized foreign currency exchange gains and losses. 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 that 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. As a result, we
believe that AFFO is a useful supplemental measure for investors to
consider because it will help them to better understand and measure the
performance of our business over time without the potentially distorting
impact of these short-term fluctuations.
(a) In January 2009, Carey Storage repaid, in full, the $35.0 million
outstanding balance on its secured credit facility for $28.0 million
and recognized a gain of $7.0 million on the repayment of this debt
at a discount, inclusive of the profit sharing interest of
$4.2 million.
W. P. CAREY & CO. LLC
Adjusted Cash Flow from Operating Activities (Unaudited)
(in thousands, except share and per share amounts)
Years ended December 31,
----------------------------------
2009 2008 2007
---------- ---------- ----------
Cash flow from operating activities $ 74,544 $ 63,247 $ 47,471
Adjustments:
Distributions received from equity
investments in real estate in excess
of equity income (a) 18,503 10,868 6,769
Contributions paid to noncontrolling
interests, net (b) (568) (3,025) -
Changes in working capital (c) 1,401 9,574 (132)
Settlement payment (d) - 21,012 -
CPA®:16 - Global performance
adjustment, net (e) - (12,291) 9,425
CPA®:12/14 Merger -- payment of
taxes (c) - - 20,708
---------- ---------- ----------
Adjusted cash flow from operating
activities $ 93,880 $ 89,385 $ 84,241
========== ========== ==========
Adjusted cash flow per share (diluted) $ 2.36 $ 2.22 $ 2.11
========== ========== ==========
Distributions declared per share $ 1.996 $ 1.955 $ 1.878
========== ========== ==========
Payout ratio (distributions per
share/adjusted cash flow per share) 85% 88% 89%
========== ========== ==========
Diluted weighted average shares
outstanding 39,712,735 40,221,112 39,868,208
========== ========== ==========
Non-GAAP Financial Disclosure
Adjusted cash flow from operating activities refers to our cash provided
by operating activities, as determined in accordance with GAAP, adjusted
primarily to reflect timing differences between the period an expense is
incurred and paid, to add cash distributions that we receive from our
investments in unconsolidated real estate joint ventures in excess of our
equity investment in the joint ventures, and to subtract cash distributions
that we make to our noncontrolling partners in real estate joint ventures
that we consolidate. We hold a number of interests in real estate joint
ventures, and we believe that adjusting our GAAP cash provided by operating
activities to reflect these actual cash receipts and cash payments may give
investors a more accurate picture of our actual cash flow than GAAP cash
provided by operating activities alone and that it is a useful supplemental
measure for investors to consider. We also believe that adjusted cash flow
from operating activities is a useful supplemental measure for assessing
the cash flow generated from our core operations, and we use this measure
when evaluating distributions to shareholders and as one measure of our
operating performance when we determine executive compensation. Adjusted
cash flow from operating activities should not be considered as an
alternative for cash provided by operating activities computed on a GAAP
basis as a measure of our liquidity. Adjusted cash flow from operating
activities may not be comparable to similarly titled measures of other
companies.
(a) We take a substantial portion of our asset management revenue in shares
of the CPA® REIT funds. To the extent we receive distributions in
excess of the equity income that we recognize, we include such amounts
in our evaluation of cash flow from core operations.
(b) Represents noncontrolling interests' share of contributions/
distributions made by ventures that we consolidate in our financial
statements. This adjustment in the calculation of adjusted cash flow
from operating activities was introduced during the fourth quarter of
2008 because we believe that it results in a more accurate presentation
of this supplemental measure.
(c) Timing differences arising from the payment of certain liabilities in
a period other than that in which the expense is recognized in
determining net income may distort the actual cash flow that our core
operations generate. We adjust our GAAP cash flow from operating
activities to record such amounts in the period in which the liability
was actually incurred. We believe this is a fairer measure of
determining our cash flow from core operations.
(d) In March 2008, we entered into a settlement with the SEC with respect
to all matters relating to a previously disclosed investigation. In
connection with this settlement, we paid $30.0 million in the first
quarter of 2008 and recognized an offsetting $9.0 million tax benefit
in the same period.
(e) Amounts deferred in lieu of CPA®:16 - Global achieving its
performance criterion, net of a 45% tax provision. In determining cash
flow generated from our core operations, we believe it is more
appropriate to normalize cash flow for the impact of CPA®:16 - Global
achieving its performance criterion, rather than recognizing the entire
deferred amount in the quarter in which the performance criterion was
met (second quarter of 2007), as this revenue was actually earned over
a three-year period.
COMPANY CONTACT:
Kristina McMenamin
W. P. Carey & Co. LLC
212-492-8995
Email Contact
PRESS CONTACT:
Guy Lawrence
Ross & Lawrence
212-308-3333
Email Contact