NEW YORK, NY -- (MARKET WIRE) -- 08/05/10 --
Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the second quarter ended June 30,
2010.
QUARTERLY AND SIX-MONTH RESULTS
- Funds from operations -- as adjusted (AFFO) for the second quarter of
2010 increased compared to the second quarter of 2009: $38.9 million or
$0.98 per diluted share compared to $30.1 million or $0.75 per diluted
share, respectively. AFFO for the six months ended June 30, 2010 was $67
million or $1.69 per diluted share, compared to $59 million or $1.48 per
diluted share for the comparable period in 2009.
- Cash flow from operating activities for the six months ended June 30,
2010 was $36.3 million compared to $34.7 million for the prior year period,
while adjusted cash flow from operating activities was $48.2 million in the
current year period compared to $50 million in the same period last year.
- Total revenues net of reimbursed expenses for the second quarter of
2010 increased to $55 million from $42.1 million for the second quarter of
2009. Total revenues net of reimbursed expenses for the six months ended
June 30, 2010 were $102.6 million, compared to $92.3 million for the
comparable period in 2009. Reimbursed expenses are excluded from total
revenues because they have no impact on net income.
- Net Income for the second quarter of 2010 was $23.4 million, compared
to $15 million for the same period in 2009. For the six months ended June
30, 2010, net income was $37.8 million, compared to $32.7 million for the
comparable period in 2009. Results from operations in our investment
management segment were significantly higher in the current year periods
primarily due to a higher volume of investments structured on behalf of the
CPA® REITs and lower impairment charges recognized by the CPA® REITs in
the current year periods.
- For the six months ended June 30, 2010, we received approximately $8
million in cash distributions from our equity ownership in the CPA®
REITs.
- Further information concerning AFFO and adjusted cash flow from
operating activities -- non-GAAP supplemental performance metrics -- is
presented in the accompanying tables and related notes.
INVESTMENT AND FUNDRAISING ACTIVITY
- We structured 11 investments totaling $440 million for the six months
ended June 30, 2010 on behalf of the CPA® REITs, compared to two
investments totaling $234 million for the comparable period in 2009.
- Transactions in the second quarter of 2010 on behalf of the CPA®
REITs included: a $101 million transaction with Agrokor, the largest
private company and food retailer in Croatia; a $57 million acquisition of
JPMorgan Chase'sTampa office facility; and a $43 million build-to-suit
financing transaction with Sun Products Corporation.
- We continue to raise investor capital through our latest 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 $1.1 billion
of its up-to $2 billion offering.
ASSETS UNDER MANAGEMENT
- W. P. Carey is the advisor to the CPA® REITs, which had real estate
assets of $8.2 billion and total assets of $8.6 billion as of June 30,
2010.
- As of June 30, 2010, the occupancy rate of W. P. Carey's 14 million
square foot owned portfolio was approximately 92%. In addition, for the 95
million square feet owned by the CPA® REITs, the occupancy rate was
approximately 98%.
DISTRIBUTIONS
- The Board of Directors raised the quarterly cash distribution to $0.506
per share for the second quarter of 2010. The distribution -- our 37th
consecutive quarterly increase -- was paid on July 15, 2010 to shareholders
of record as of June 30, 2010.
Trevor Bond, interim Chief Executive Officer, said, "The continued strength
of our capital raising activities and our ability to source, negotiate,
finance and close long-term, income-generating acquisitions has provided
the basis for solid financial results during the first six months of 2010.
Being on the ground in Europe as well as the U.S. has enabled us to access
a diverse set of opportunities that are consistent with our established
investment parameters. Consequently, our ability to grow assets under
management has favorably impacted funds from operations -- as adjusted, a
primary metric in determining distributions."
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register.
Time: Thursday, August 5, 2010 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
Available after 2:00 PM (ET)
Replay Number: 877-344-7529
(International) +1-412-317-0088
Replay Passcode: 442766#
Replay Available until August 20, 2010 at 9:00 AM (ET).
W. P. Carey & Co. LLC
W. P. Carey & Co. LLC (NYSE: WPC) is an investment management company that
provides long-term financing to companies worldwide via sale leaseback and
build to suit transactions and manages a global investment portfolio of
approximately $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
16 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,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Revenues
Asset management revenue $ 19,080 $ 19,227 $ 37,900 $ 38,335
Structuring revenue 13,102 365 19,936 10,774
Wholesaling revenue 2,230 1,597 4,333 2,690
Reimbursed costs from
affiliates 15,354 11,115 30,402 20,111
Lease revenues 15,833 16,374 31,844 32,745
Other real estate income 4,797 4,557 8,572 7,770
---------- ---------- ---------- ----------
70,396 53,235 132,987 112,425
---------- ---------- ---------- ----------
Operating Expenses
General and administrative (18,131) (14,334) (35,732) (33,433)
Reimbursable costs (15,354) (11,115) (30,402) (20,111)
Depreciation and
amortization (5,815) (6,574) (11,991) (11,694)
Property expenses (2,379) (1,921) (4,628) (3,371)
Other real estate expenses (1,773) (1,707) (3,588) (3,838)
Impairment charges - (900) (2,268) (900)
---------- ---------- ---------- ----------
(43,452) (36,551) (88,609) (73,347)
---------- ---------- ---------- ----------
Other Income and Expenses
Other interest income 336 416 609 823
Income from equity
investments in real
estate and CPA® REITs 7,638 4,875 16,780 6,262
Other income and
(expenses) 42 127 (622) 3,281
Interest expense (3,765) (3,805) (7,476) (8,000)
---------- ---------- ---------- ----------
4,251 1,613 9,291 2,366
---------- ---------- ---------- ----------
Income from continuing
operations before income
taxes 31,195 18,297 53,669 41,444
Provision for income taxes (6,751) (3,720) (10,863) (9,920)
---------- ---------- ---------- ----------
Income from continuing
operations 24,444 14,577 42,806 31,524
---------- ---------- ---------- ----------
Discontinued Operations
Income from operations of
discontinued properties 206 1,202 626 2,164
Gain on sale of real
estate 56 478 460 343
Impairment charges (985) (1,380) (5,869) (1,380)
---------- ---------- ---------- ----------
(Loss) income from
discontinued operations (723) 300 (4,783) 1,127
---------- ---------- ---------- ----------
Net Income 23,721 14,877 38,023 32,651
Add: Net loss attributable
to noncontrolling
interests 128 203 414 373
Less: Net income
attributable to
redeemable noncontrolling
interests (417) (103) (592) (338)
---------- ---------- ---------- ----------
Net Income Attributable to
W. P. Carey Members $ 23,432 $ 14,977 $ 37,845 $ 32,686
========== ========== ========== ==========
Basic Earnings Per Share
Income from continuing
operations attributable
to W. P. Carey members $ 0.62 $ 0.36 $ 1.08 $ 0.79
(Loss) income from
discontinued operations
attributable to W. P.
Carey members (0.03) 0.01 (0.12) 0.03
---------- ---------- ---------- ----------
Net income attributable to
W. P. Carey members $ 0.59 $ 0.37 $ 0.96 $ 0.82
========== ========== ========== ==========
Diluted Earnings Per Share
Income from continuing
operations attributable
to W. P. Carey members $ 0.62 $ 0.36 $ 1.06 $ 0.78
(Loss) income from
discontinued operations
attributable to W. P.
Carey members (0.03) 0.01 (0.12) 0.03
---------- ---------- ---------- ----------
Net income attributable to
W. P. Carey members $ 0.59 $ 0.37 $ 0.94 $ 0.81
========== ========== ========== ==========
Weighted Average Shares
Outstanding
Basic 39,081,064 39,350,684 39,116,126 39,067,391
========== ========== ========== ==========
Diluted 39,510,231 40,065,495 39,567,583 39,780,708
========== ========== ========== ==========
Amounts Attributable to W.
P. Carey Members
Income from continuing
operations, net of tax $ 24,155 $ 14,677 $ 42,628 $ 31,559
(Loss) income from
discontinued operations,
net of tax (723) 300 (4,783) 1,127
---------- ---------- ---------- ----------
Net income $ 23,432 $ 14,977 $ 37,845 $ 32,686
========== ========== ========== ==========
Distributions Declared Per
Share $ 0.506 $ 0.498 $ 1.010 $ 0.994
========== ========== ========== ==========
W. P. CAREY & CO. LLC
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six months ended
June 30,
------------------
2010 2009
-------- --------
Cash Flows -- Operating Activities
Net income $ 38,023 $ 32,651
Adjustments to net income:
Depreciation and amortization including intangible
assets and deferred financing costs 12,377 12,757
Income from equity investments in real estate and
CPA® REITs in excess of distributions received (5,942) (3,157)
Straight-line rent and financing lease adjustments 429 967
Gain on sale of real estate (460) (343)
Gain on extinguishment of debt - (6,991)
Allocation of (loss) earnings to profit sharing
interest (373) 3,875
Management income received in shares of affiliates (17,344) (15,414)
Unrealized loss (gain) on foreign currency
transactions and others 860 (39)
Realized loss (gain) on foreign currency transactions
and others 143 (126)
Impairment charges 8,137 2,280
Stock-based compensation expense 4,936 5,260
Deferred acquisition revenue received 17,048 22,877
Increase in structuring revenue receivable (9,352) (5,416)
Decrease in income taxes, net (6,116) (8,454)
Net changes in other operating assets and liabilities (6,075) (6,044)
-------- --------
Net cash provided by operating activities 36,291 34,683
-------- --------
Cash Flows -- Investing Activities
Distributions received from equity investments in real
estate and CPA® REITs in excess of equity income 7,762 7,606
Purchases of real estate and equity investments in
real estate (74,904) (39,677)
VAT paid in connection with acquisition of real estate (4,222) -
Capital expenditures (1,652) (6,929)
Proceeds from sale of real estate 9,200 3,835
Funds released from escrow in connection with the sale
of property 36,132 -
Proceeds from transfer of profit sharing interest - 21,928
-------- --------
Net cash used in investing activities (27,684) (13,237)
-------- --------
Cash Flows -- Financing Activities
Distributions paid (52,490) (39,060)
Contributions from noncontrolling interests 11,180 1,583
Distributions to noncontrolling interests (1,444) (3,474)
Distributions to profit sharing interest (693) (3,434)
Scheduled payments of mortgage principal (10,322) (5,241)
Prepayments of mortgage principal - (11,918)
Proceeds from mortgage financing 6,315 39,000
Proceeds from line of credit 83,250 88,500
Prepayments of line of credit (22,500) (72,018)
Proceeds from loans from affiliates - 1,624
Payment of financing costs (301) (806)
Proceeds from issuance of shares 799 874
Windfall tax (provision) benefits associated with
stock-based compensation awards (159) 242
Repurchase and retirement of shares - (10,686)
-------- --------
Net cash provided by (used in) financing activities 13,635 (14,814)
-------- --------
Change in Cash and Cash Equivalents During the Period
Effect of exchange rate changes on cash (1,243) 38
-------- --------
Net increase in cash and cash equivalents 20,999 6,670
Cash and cash equivalents, beginning of period 18,450 16,799
-------- --------
Cash and cash equivalents, end of period $ 39,449 $ 23,469
======== ========
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 ended Six months ended
June 30, June 30,
------------------- ------------------
2010 2009 2010 2009
--------- --------- -------- --------
EBITDA
Investment management $ 22,273 $ 10,430 $ 37,172 $ 23,498
Real estate ownership 17,637 19,365 31,450 40,257
--------- --------- -------- --------
Total $ 39,910 $ 29,795 $ 68,622 $ 63,755
========= ========= ======== ========
AFFO
Investment management $ 22,670 $ 11,627 $ 34,759 $ 25,960
Real estate ownership 16,250 18,486 32,227 33,010
--------- --------- -------- --------
Total $ 38,920 $ 30,113 $ 66,986 $ 58,970
========= ========= ======== ========
EBITDA Per Share (Diluted)
Investment management $ 0.56 $ 0.26 $ 0.94 $ 0.59
Real estate ownership 0.45 0.48 0.79 1.01
--------- --------- -------- --------
Total $ 1.01 $ 0.74 $ 1.73 $ 1.60
========= ========= ======== ========
AFFO Per Share (Diluted)
Investment management $ 0.57 $ 0.29 $ 0.88 $ 0.65
Real estate ownership 0.41 0.46 0.81 0.83
--------- --------- -------- --------
Total $ 0.98 $ 0.75 $ 1.69 $ 1.48
========= ========= ======== ========
Adjusted Cash Flow From Operating
Activities
Adjusted cash flow $ 48,193 $ 50,019
======== ========
Adjusted cash flow per share
(diluted) $ 1.22 $ 1.26
======== ========
Distributions declared per share $ 1.010 $ 0.994
======== ========
Payout ratio (distributions per
share/adjusted cash flow per
share) 83% 79%
======== ========
W. P. CAREY & CO. LLC
Reconciliation of Net Income to EBITDA (Unaudited)
(in thousands, except share and per share amounts)
Three months ended Six months ended
June 30, June 30,
---------------------- -----------------------
2010 2009 2010 2009
---------- ----------- ----------- -----------
Investment Management
Net income from investment
management attributable
to W. P. Carey members $ 14,331 $ 5,954 $ 24,181 $ 12,659
Adjustments:
Provision for income taxes 6,780 3,440 10,658 9,205
Depreciation and
amortization 1,162 1,036 2,333 1,634
---------- ----------- ----------- -----------
EBITDA - investment
management $ 22,273 $ 10,430 $ 37,172 $ 23,498
========== =========== =========== ===========
EBITDA per share (diluted) $ 0.56 $ 0.26 $ 0.94 $ 0.59
========== =========== =========== ===========
Real Estate Ownership
Net income from real estate
ownership attributable to
W. P. Carey members $ 9,101 $ 9,023 $ 13,664 $ 20,027
Adjustments:
Interest expense 3,765 3,805 7,476 8,000
Provision for income taxes (29) 280 205 715
Depreciation and
amortization 4,653 5,538 9,658 10,060
Reconciling items
attributable to
discontinued operations 147 719 447 1,455
---------- ----------- ----------- -----------
EBITDA - real estate
ownership $ 17,637 $ 19,365 $ 31,450 $ 40,257
========== =========== =========== ===========
EBITDA per share (diluted) $ 0.45 $ 0.48 $ 0.79 $ 1.01
========== =========== =========== ===========
Total Company
EBITDA $ 39,910 $ 29,795 $ 68,622 $ 63,755
========== =========== =========== ===========
EBITDA per share (diluted) $ 1.01 $ 0.74 $ 1.73 $ 1.60
========== =========== =========== ===========
Diluted weighted average
shares outstanding 39,510,231 40,065,495 39,567,583 39,780,708
========== =========== =========== ===========
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 Six months ended
June 30, June 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Investment Management
Net income from investment
management attributable
to W. P. Carey members $ 14,331 $ 5,954 $ 24,181 $ 12,659
Amortization, deferred
taxes and other non-cash
charges 3,095 2,607 4,373 3,919
AFFO from equity
investments 5,244 3,066 6,205 9,382
---------- ---------- ---------- ----------
AFFO - investment
management $ 22,670 $ 11,627 $ 34,759 $ 25,960
========== ========== ========== ==========
AFFO per share (diluted) $ 0.57 $ 0.29 $ 0.88 $ 0.65
========== ========== ========== ==========
Real Estate Ownership
Net income from real estate
ownership attributable to
W. P. Carey members $ 9,101 $ 9,023 $ 13,664 $ 20,027
Gain on sale of real
estate, net (56) (478) (460) (343)
Gain on extinguishment of
debt, net (a) - - - (2,796)
Depreciation, amortization
and other non-cash charges 4,887 5,174 10,705 10,348
Straight-line and other
rent adjustments 99 232 19 412
Impairment charges 985 2,280 8,137 2,280
AFFO from equity
investments 1,448 2,411 544 3,413
Noncontrolling interests'
share of AFFO (214) (156) (382) (331)
---------- ---------- ---------- ----------
AFFO - real estate
ownership $ 16,250 $ 18,486 $ 32,227 $ 33,010
========== ========== ========== ==========
AFFO per share (diluted) $ 0.41 $ 0.46 $ 0.81 $ 0.83
========== ========== ========== ==========
Total Company
AFFO $ 38,920 $ 30,113 $ 66,986 $ 58,970
========== ========== ========== ==========
AFFO per share (diluted) $ 0.98 $ 0.75 $ 1.69 $ 1.48
========== ========== ========== ==========
Diluted weighted average
shares outstanding 39,510,231 40,065,495 39,567,583 39,780,708
========== ========== ========== ==========
(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.
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 but
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.
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,
----------------------
2010 2009
---------- ----------
Cash flow from operating activities $ 36,291 $ 34,683
Adjustments:
Distributions received from equity investments in
real estate in excess of equity income (a) 4,004 9,040
(Distributions to) contributions received from
noncontrolling interests, net (b) (161) 252
Changes in working capital (c) 8,059 6,044
---------- ----------
Adjusted cash flow from operating activities $ 48,193 $ 50,019
========== ==========
Adjusted cash flow per share (diluted) $ 1.22 $ 1.26
========== ==========
Distributions declared per share $ 1.010 $ 0.994
========== ==========
Payout ratio (distributions per share/adjusted cash
flow per share) 83% 79%
========== ==========
Diluted weighted average shares outstanding 39,567,583 39,780,708
========== ==========
(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.
(c) Timing differences arising from the payment of certain liabilities and
the receipt of certain receivables in a period other than that in which
the item 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.
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 to 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.
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