W. P. Carey Announces Third Quarter Financial Results

November 4, 2010

NEW YORK, NY -- (MARKET WIRE) -- 11/04/10 -- Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the third quarter ended September 30, 2010.

QUARTERLY AND NINE-MONTH RESULTS

  • Funds from operations -- as adjusted (AFFO) for the third quarter of 2010 was $27.6 million or $0.69 per diluted share compared to $30.2 million or $0.75 per diluted share for the third quarter of 2009. AFFO for the nine months ended September 30, 2010 was $94.6 million or $2.38 per diluted share, compared to $89.2 million or $2.24 per diluted share for the comparable period in 2009.
  • Cash flow from operating activities for the nine months ended September 30, 2010 was $52.3 million compared to $49.4 million for the prior year period, while adjusted cash flow from operating activities was $64.9 million in the current year period compared to $71.3 million in the same period last year.
  • Total revenues net of reimbursed expenses for the third quarter of 2010 were $43 million compared to $45.7 million for the third quarter of 2009. Total revenues net of reimbursed expenses for the nine months ended September 30, 2010 were $145.6 million, compared to $136.3 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 third quarter of 2010 was $16.3 million, compared to $13.4 million for the same period in 2009. For the nine months ended September 30, 2010, net income was $54.2 million compared to $46 million for the comparable period in 2009. Results from operations in our investment management segment were significantly higher for the nine months primarily due to a higher volume of investments structured on behalf of the CPA® REITs and lower impairment charges recognized by the CPA® REITs than for the comparable period in 2009.
  • For the nine months ended September 30, 2010, we received approximately $12.2 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

  • During the nine months ended September 30, 2010, we structured investments on behalf of the CPA® REITs totaling $452.9 million and entered into several investments for our own real estate portfolio totaling $75.3 million. Investment activity on behalf of the CPA® REITs for the first nine months represents an increase of $97.5 million over the prior year period.
  • 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 $1.2 billion in its initial offering. The initial CPA®:17 - Global offering was to have expired on November 2, 2010. However, on October 29, CPA®:17 - Global filed a registration statement for a second, follow-on offering, and as a result, CPA®:17 - Global can continue fundraising through its extended initial offering until the earlier of (1) the date on which the second offering is declared effective by the SEC or (2) May 2, 2011. The second offering will seek to raise up to an additional $1 billion.

W. P. CAREY LAUNCHES CAREY WATERMARK INVESTORS

  • Carey Watermark Investors (CWI), a publicly registered, non-traded corporation that intends to qualify as a REIT, has commenced fundraising its up-to $1 billion offering. Advised by our subsidiary, Carey Lodging Advisors, LLC, and subadvisor, CWA, LLC -- a subsidiary of Watermark Capital Partners, LLC -- CWI intends to use the proceeds from its offering primarily to act as a capital provider to the lodging industry by acquiring a diversified portfolio of lodging and lodging related properties.

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 $8.7 billion as of September 30, 2010.
  • As of September 30, 2010, the occupancy rate of W. P. Carey's 14 million square foot owned portfolio was approximately 91%. In addition, for the 95 million square feet owned by the CPA® REITs, the average occupancy rate was approximately 97%.

DISTRIBUTIONS

  • The Board of Directors raised the quarterly cash distribution to $0.508 per share for the third quarter of 2010. The distribution -- our 38th consecutive quarterly increase -- was paid on October 15, 2010 to shareholders of record as of September 30, 2010.

Trevor Bond, President and Chief Executive Officer, noted, "We are encouraged by our continuing ability to raise capital as well as our ability to source and secure investments that meet our established criteria. Year to date acquisition volume has increased as compared with the same period in 2009, and going forward we feel that we will be able to continue to take advantage of the investment opportunities we are seeing in both the U.S. and Europe. In what economists have predicted will be a continuing slow growth, low interest rate environment, we believe we are uniquely positioned as an alternative source of capital to companies that are well-managed and well-positioned but may lack access to capital from more traditional sources. Bottom line: we see our strategy of long-term investing serving us well with respect to securing attractive acquisitions, delivering consistent income to our investors and providing a solid financial platform for our tenants."

CONFERENCE CALL & WEBCAST

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

Time: Thursday, November 4, 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: 445431#
Replay Available until November 19, 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      Nine months ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Revenues
  Asset management revenue  $   19,219  $   19,106  $   57,119  $   57,441
  Structuring revenue              708       5,476      20,644      16,250
  Wholesaling revenue            2,260       1,869       6,593       4,426
  Reimbursed costs from
   affiliates                   15,908      13,503      46,310      33,747
  Lease revenues                16,203      15,573      48,047      46,732
  Other real estate income       4,656       3,657      13,228      11,427
                            ----------  ----------  ----------  ----------
                                58,954      59,184     191,941     170,023
                            ----------  ----------  ----------  ----------

Operating Expenses
  General and
   administrative              (14,828)    (14,969)    (50,560)    (48,269)
  Reimbursable costs           (15,908)    (13,503)    (46,310)    (33,747)
  Depreciation and
   amortization                 (6,067)     (5,438)    (18,058)    (16,795)
  Property expenses             (3,220)     (1,903)     (7,848)     (5,247)
  Other real estate
   expenses                     (1,987)     (1,758)     (5,575)     (5,596)
  Impairment charges              (481)          -      (2,749)       (900)
                            ----------  ----------  ----------  ----------
                               (42,491)    (37,571)   (131,100)   (110,554)
                            ----------  ----------  ----------  ----------

Other Income and Expenses
  Other interest income            329         476         938       1,299
  Income from equity
   investments in real
   estate and CPA® REITs         6,066       2,923      22,846       9,866
  Other income and
   (expenses)                    1,184         251         562       3,532
  Interest expense              (4,298)     (3,786)    (11,774)    (11,245)
                            ----------  ----------  ----------  ----------
                                 3,281        (136)     12,572       3,452
                            ----------  ----------  ----------  ----------
  Income from continuing
   operations before
   income taxes                 19,744      21,477      73,413      62,921
  Provision for income
   taxes                        (3,377)     (6,018)    (14,240)    (15,938)
                            ----------  ----------  ----------  ----------
  Income from continuing
   operations                   16,367      15,459      59,173      46,983
                            ----------  ----------  ----------  ----------
Discontinued Operations
  Income from operations
   of discontinued
   properties                        4       1,115         630       3,279
  Gain on sale of real
   estate                            -           -         460         343
  Impairment charges                 -      (2,390)     (5,869)     (3,770)
                            ----------  ----------  ----------  ----------
  Income (loss) from
   discontinued operations           4      (1,275)     (4,779)       (148)
                            ----------  ----------  ----------  ----------
Net Income                       16,371      14,184      54,394      46,835
  Add: Net loss
   attributable to
   noncontrolling
   interests                        81         186         495         559
  Less: Net income
   attributable to
   redeemable
   noncontrolling
   interests                      (106)     (1,019)       (698)     (1,357)
                            ----------  ----------  ----------  ----------
Net Income Attributable to
 W. P. Carey Members        $   16,346  $   13,351  $   54,191  $   46,037
                            ==========  ==========  ==========  ==========
Basic Earnings Per Share
  Income from continuing
   operations attributable
   to W. P. Carey members   $     0.41  $     0.36  $     1.50  $     1.16
  Income (loss) from
   discontinued operations
   attributable to W. P.
   Carey members                     -       (0.03)      (0.12)      (0.01)
                            ----------  ----------  ----------  ----------
  Net income attributable
   to W. P. Carey members   $     0.41  $     0.33  $     1.38  $     1.15
                            ==========  ==========  ==========  ==========
Diluted Earnings Per Share
  Income from continuing
   operations attributable
   to W. P. Carey members   $     0.41  $     0.37  $     1.48  $     1.16
  Income (loss) from
   discontinued operations
   attributable to W. P.
   Carey members                     -       (0.03)      (0.12)      (0.01)
                            ----------  ----------  ----------  ----------
  Net income attributable
   to W. P. Carey members   $     0.41  $     0.34  $     1.36  $     1.15
                            ==========  ==========  ==========  ==========

Weighted Average Shares
 Outstanding
  Basic                     39,180,719  39,727,460  39,161,086  39,163,186
                            ==========  ==========  ==========  ==========
  Diluted                   39,717,931  40,368,946  39,774,122  39,770,196
                            ==========  ==========  ==========  ==========

Amounts Attributable to W.
 P. Carey Members
  Income from continuing
   operations, net of tax   $   16,342  $   14,626  $   58,970  $   46,185
  Income (loss) from
   discontinued
   operations, net of tax            4      (1,275)     (4,779)       (148)
                            ----------  ----------  ----------  ----------
  Net income                $   16,346  $   13,351  $   54,191  $   46,037
                            ==========  ==========  ==========  ==========
Distributions Declared Per
 Share                      $    0.508  $    0.500  $    1.518  $    1.494
                            ==========  ==========  ==========  ==========



                          W. P. CAREY & CO. LLC

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

                                                        Nine months ended
                                                          September 30,
                                                      --------------------
                                                        2010       2009
                                                      ---------  ---------
Cash Flows -- Operating Activities
Net income                                            $  54,394  $  46,835
Adjustments to net income:
  Depreciation and amortization including intangible
   assets and deferred financing costs                   18,496     18,385
  Income from equity investments in real estate and
   CPA® REITs in excess of distributions received        (5,373)    (4,303)
  Straight-line rent and financing lease adjustments        144      1,560
  Gain on sale of real estate                              (460)      (343)
  Gain on extinguishment of debt                              -     (6,991)
  Allocation of (loss) earnings to profit-sharing
   interest                                                (781)     3,976
  Management income received in shares of affiliates    (26,262)   (23,451)
  Unrealized loss (gain) on foreign currency
   transactions and others                                  143       (257)
  Realized loss (gain) on foreign currency
   transactions and others                                  176       (260)
  Impairment charges                                      8,618      4,670
  Stock-based compensation expense                        6,695      7,777
  Deferred acquisition revenue received                  19,248     23,109
  Increase in structuring revenue receivable             (9,900)    (8,196)
  Decrease in income taxes, net                          (9,076)   (11,137)
  Net changes in other operating assets and
   liabilities                                           (3,794)    (1,991)
                                                      ---------  ---------
Net cash provided by operating activities                52,268     49,383
                                                      ---------  ---------

Cash Flows -- Investing Activities
  Distributions received from equity investments in
   real estate and CPA® REITs in excess of equity
   income                                                 9,964     33,917
  Capital contributions to equity investments                 -     (3,709)
  Purchases of real estate and equity investments in
   real estate                                          (93,059)   (39,632)
  VAT paid in connection with acquisition of real
   estate                                                (4,222)         -
  Capital expenditures                                   (2,008)    (6,110)
  Proceeds from sale of real estate                      14,591      6,927
  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) provided by investing activities     (38,602)    13,321
                                                      ---------  ---------

Cash Flows -- Financing Activities
  Distributions paid                                    (72,625)   (58,787)
  Contributions from noncontrolling interests            11,403      2,137
  Distributions to noncontrolling interests              (2,022)    (4,589)
  Contributions from profit-sharing interest              3,694          -
  Distributions to profit-sharing interest                 (693)    (5,372)
  Scheduled payments of mortgage principal              (12,218)    (7,527)
  Prepayments of mortgage principal                           -    (11,918)
  Proceeds from mortgage financing                       52,816     42,494
  Proceeds from line of credit                           83,250    116,500
  Prepayments of line of credit                         (52,500)  (125,518)
  Proceeds from loans from affiliates                         -      1,625
  Payment of financing costs                             (1,083)      (849)
  Proceeds from issuance of shares                        3,537      1,356
  Windfall tax benefits associated with stock-based
   compensation awards                                    1,226        275
  Repurchase and retirement of shares                         -    (10,686)
                                                      ---------  ---------
Net cash provided by (used in) financing activities      14,785    (60,859)
                                                      ---------  ---------

Change in Cash and Cash Equivalents During the Period
    Effect of exchange rate changes on cash                (651)       364
                                                      ---------  ---------
    Net increase in cash and cash equivalents            27,800      2,209
  Cash and cash equivalents, beginning of period         18,450     16,799
                                                      ---------  ---------
  Cash and cash equivalents, end of period            $  46,250  $  19,008
                                                      =========  =========



                          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      Nine months ended
                                September 30,           September 30,
                            ----------------------- ----------------------
                               2010        2009        2010        2009
                            ----------- ----------- ----------  ----------
EBITDA
Investment management       $    12,139 $    11,789 $   49,311  $   35,287
Real estate ownership            17,994      17,412     49,444      56,791
                            ----------- ----------- ----------  ----------
Total                       $    30,133 $    29,201 $   98,755  $   92,078
                            =========== =========== ==========  ==========

AFFO
Investment management       $    10,393 $    12,788 $   45,152  $   38,748
Real estate ownership            17,214      17,445     49,441      50,455
                            ----------- ----------- ----------  ----------
Total                       $    27,607 $    30,233 $   94,593  $   89,203
                            =========== =========== ==========  ==========

EBITDA Per Share (Diluted)
Investment management       $      0.31 $      0.29 $     1.24  $     0.89
Real estate ownership              0.45        0.43       1.24        1.43
                            ----------- ----------- ----------  ----------
Total                       $      0.76 $      0.72 $     2.48  $     2.32
                            =========== =========== ==========  ==========

AFFO Per Share (Diluted)
Investment management       $      0.26 $      0.32 $     1.14  $     0.97
Real estate ownership              0.43        0.43       1.24        1.27
                            ----------- ----------- ----------  ----------
Total                       $      0.69 $      0.75 $     2.38  $     2.24
                            =========== =========== ==========  ==========

Adjusted Cash Flow From
 Operating Activities
Adjusted cash flow                                  $   64,933  $   71,300
                                                    ==========  ==========
Adjusted cash flow per
 share (diluted)                                    $     1.63  $     1.79
                                                    ==========  ==========

Distributions declared per
 share                                              $    1.518  $    1.494
                                                    ==========  ==========
Payout ratio (distributions
 per share/adjusted cash
 flow per share)                                            93%         83%
                                                    ==========  ==========



                          W. P. CAREY & CO. LLC

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

                              Three months ended      Nine months ended
                                September 30,           September 30,
                            ----------------------- -----------------------
                               2010        2009        2010        2009
                            ----------- ----------- ----------- -----------
Investment Management
Net income from investment
 management attributable
 to W. P. Carey members     $     7,730 $     5,059 $    31,911 $    17,718
Adjustments:
Provision for income taxes        3,253       5,606      13,911      14,811
Depreciation and
 amortization                     1,156       1,124       3,489       2,758
                            ----------- ----------- ----------- -----------
EBITDA - investment
 management                 $    12,139 $    11,789 $    49,311 $    35,287
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      0.31 $      0.29 $      1.24 $      0.89
                            =========== =========== =========== ===========

Real Estate Ownership
Net income from real estate
 ownership attributable to
   W. P. Carey members      $     8,616 $     8,292 $    22,280 $    28,319
Adjustments:
Interest expense                  4,298       3,786      11,774      11,245
Provision for income taxes          124         412         329       1,127
Depreciation and
 amortization                     4,911       4,314      14,569      14,037
Reconciling items
 attributable to
 discontinued operations             45         608         492       2,063
                            ----------- ----------- ----------- -----------
EBITDA - real estate
 ownership                  $    17,994 $    17,412 $    49,444 $    56,791
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      0.45 $      0.43 $      1.24 $      1.43
                            =========== =========== =========== ===========

Total Company
EBITDA                      $    30,133 $    29,201 $    98,755 $    92,078
                            =========== =========== =========== ===========
EBITDA per share (diluted)  $      0.76 $      0.72 $      2.48 $      2.32
                            =========== =========== =========== ===========
Diluted weighted average
 shares outstanding          39,717,931  40,368,946  39,774,122  39,770,196
                            =========== =========== =========== ===========

 

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      Nine months ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------
Investment Management
Net income from investment
 management attributable
 to W. P. Carey members     $    7,730  $    5,059  $   31,911  $   17,718
Amortization, deferred
 taxes and other non-cash
 charges                           657       1,247       5,030       5,166
AFFO from equity
 investments                     2,006       6,482       8,211      15,864
                            ----------  ----------  ----------  ----------
AFFO - investment
 management                 $   10,393  $   12,788  $   45,152  $   38,748
                            ==========  ==========  ==========  ==========
AFFO per share (diluted)    $     0.26  $     0.32  $     1.14  $     0.97
                            ==========  ==========  ==========  ==========

Real Estate Ownership
Net income from real estate
 ownership attributable to
 W. P. Carey members        $    8,616  $    8,292  $   22,280  $   28,319
Gain on sale of real
 estate, net                         -           -        (460)       (343)
Gain on extinguishment of
 debt, net (a)                       -           -           -      (2,796)
Depreciation, amortization
 and other non-cash charges      4,005       4,189      14,710      14,537
Straight-line and other
 rent adjustments                  148         396         167         808
Impairment charges                 481       2,390       8,618       4,670
AFFO from equity
 investments                     4,036       2,274       4,580       5,687
Noncontrolling interests'
 share of AFFO                     (72)        (96)       (454)       (427)
                            ----------  ----------  ----------  ----------
AFFO - real estate
 ownership                  $   17,214  $   17,445  $   49,441  $   50,455
                            ==========  ==========  ==========  ==========
AFFO per share (diluted)    $     0.43  $     0.43  $     1.24  $     1.27
                            ==========  ==========  ==========  ==========

Total Company
AFFO                        $   27,607  $   30,233  $   94,593  $   89,203
                            ==========  ==========  ==========  ==========
AFFO per share (diluted)    $     0.69  $     0.75  $     2.38  $     2.24
                            ==========  ==========  ==========  ==========
Diluted weighted average
 shares outstanding         39,717,931  40,368,946  39,774,122  39,770,196
                            ==========  ==========  ==========  ==========

 

(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)

                                                      Nine months ended
                                                        September 30,
                                                    ----------------------
                                                       2010        2009
                                                    ----------  ----------
Cash flow from operating activities                 $   52,268  $   49,383
Adjustments:
Distributions received from equity investments in
 real estate in excess of equity income (a)              6,046      15,285
Distributions paid to noncontrolling interests, net
 (b)                                                      (213)       (382)
Changes in working capital (c)                           6,832       7,014
                                                    ----------  ----------
Adjusted cash flow from operating activities        $   64,933  $   71,300
                                                    ==========  ==========
Adjusted cash flow per share (diluted)              $     1.63  $     1.79
                                                    ==========  ==========

Distributions declared per share                    $    1.518  $    1.494
                                                    ==========  ==========
Payout ratio (distributions per share/adjusted cash
 flow per share)                                            93%         83%
                                                    ==========  ==========

Diluted weighted average shares outstanding         39,774,122  39,770,196
                                                    ==========  ==========

 

(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 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