W. P. Carey Announces Second Quarter Financial Results
W. P. Carey Q2 Financials
New York, NY – August 7, 2008 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the second quarter ended June 30, 2008. The Company noted that results of operations for the same period in 2007 had benefitted from the recognition of previously deferred revenue totaling $45.9 million as a result of CPA®:16 – Global meeting its performance hurdle in June 2007, which contributed $21.6 million to net income.
QUARTERLY AND SIX-MONTH RESULTS
- Total revenues net of reimbursed costs for the three and six months ended June 30, 2008 were $47.4 million and $94.4 million, respectively. Total revenues were $105.8 million and $147 million for the comparable periods in 2007, each of which included the $45.9 million in revenues from the hurdle. Reimbursed costs are excluded from total revenues because they have no impact on net income.
- Net income for the three and six months ended June 30, 2008 was $19.8 million and $36.9 million, respectively. Net income was $42 million and $52.8 million for the comparable periods in 2007, each of which reflected the $21.6 million of net income attributed to the hurdle.
- Diluted earnings per share (EPS) for the second quarter of 2008 was $0.50, as compared to $1.10 for the same period in 2007. Diluted EPS for the six months ended June 30, 2008 was $0.93, compared to $1.37 for the same period in 2007.
- Funds from operations (FFO) for the second quarter of 2008, as per the attached table, was $35.5 million or $0.88 per diluted share, as compared to $79.6 million or $1.99 per diluted share for the comparable period in 2007. FFO for the six months ended June 30, 2008 was $57.1 million, or $1.42 per diluted share, as compared to $98.1 million or $2.46 per diluted share for the comparable period in 2007.
- Cash flows from operating activities for the six months ended June 30, 2008 were $27.2 million, as compared to $11.6 million in the prior year period.
- The Board of Directors raised the quarterly cash distribution to $0.487 per share for the second quarter, which was paid on July 15, 2008 to shareholders of record as of June 30, 2008.
SUPPLEMENTAL PERFORMANCE METRICS
- Earnings before interest, taxes, depreciation and amortization (EBITDA) from our investment management segment totaled $15.8 million this quarter or $0.39 per diluted share, compared to EBITDA in the second quarter of 2007 of $63.5 million or $1.59 per diluted share. For the six months ended June 30, 2008, EBITDA from this segment was $30.5 million, or $0.76 per diluted share, compared to $75.1 million, or $1.88 per diluted share, for the comparable period in 2007.
- FFO from our real estate ownership segment in the second quarter of 2008 was $20.9 million or $0.52 per diluted share, compared to $17 million or $0.43 per diluted share in the second quarter of 2007. For the six months ended June 30, 2008, FFO from this segment was $37 million, or $0.92 per diluted share, compared to $31.7 million, or $0.80 per diluted share, for the comparable period in 2007.
- For the six months ended June 30, 2008, adjusted cash flow from operations totaled $53.8 million, as compared to $54.9 million for the comparable period in 2007.
- Further information concerning these non-GAAP supplemental performance metrics is presented in the accompanying tables.
INVESTMENT AND FUNDRAISING ACTIVITY
- Through June 30, 2008, we have structured investments totaling $145 million, 51% of which were international. For the comparable period in 2007, investment volume was $660 million and included the $446 million Hellweg Die Profi-Baumärkte GmbH & Co. KG investment.
- CPA®:17 – Global began fundraising this year. Through August 5, 2008, we have raised more than $200 million on CPA®:17 – Global’s behalf.
GROWTH IN ASSETS UNDER MANAGEMENT
- W. P. Carey is the advisor to the CPA® REITs, which had assets valued at approximately $8.6 billion as of June 30, 2008 – an 8% increase as compared to June 30, 2007.
- Since 2001, the Company's assets under management on behalf of the CPA® REITs have more than tripled.
- As of June 30, 2008, the occupancy rate of our 18 million square foot owned portfolio was approximately 95%. In addition, for the 89 million square feet owned by the CPA® REITs, the occupancy rate was more than 99%.
AMSTERDAM OFFICE OPEN
- In July 2008, we opened an office in Amsterdam to establish a European base for the management of our CPA® REITs’ growing portfolio of international assets. Our European assets under management currently span nine countries and are approaching $3 billion.
“Obviously, a period-to-period comparison is made difficult by the significant revenue recognized in 2007 when CPA®:16 – Global met its hurdle return,” said Gordon F. DuGan, President and Chief Executive Officer. “However, on a comparable basis, we are pleased with our performance as reflected in our adjusted cash flow from operations. This solid performance was all the more significant because of the drop in investment volume we experienced in the second quarter, which reflected both unusually high investment volume in the second quarter of last year and an unusually low investment volume of $88 million for the second quarter of this year. We are already seeing a pickup in investment volume, and have closed investments of $127 million thus far this quarter. In addition, we continue to benefit from strong occupancies across our portfolios, a terrific balance sheet and an ability to grow our business without reliance on the public capital markets. In times of tighter credit markets, we believe there are attractive investment opportunities for sale-leaseback investors and we are very well-positioned today to take advantage of them.”
UPCOMING EVENTS
- Gordon F. DuGan will be speaking on the “Structure for Stability” panel at the BMO Capital Markets 2008 North American Real Estate Conference in Chicago on September 11, 2008.
- Benjamin P. Harris will be speaking on the “Investment & the Capital Connection” panel at the CPN Net Lease Summit in New York on September 22, 2008.
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register
Time: Thursday, August 7, 2008 at 11:00 AM (ET)
Call-in Number: 1-877-407-0782
(International) +1-201-689-8567
Webcast: www.wpcarey.com/earnings
Podcast: www.wpcarey.com/podcast
Available after 2:00 PM (ET)
Replay Number: 1-877-660-6853
(International) +1-201-612-7415
Replay Access Codes: Account # 286 and Conference ID # 291647. Please note that both access codes are required for playback. Replay Available until August 22, 2008 at midnight ET.
W. P. Carey & Co. LLC
W. P. Carey & Co. LLC provides long-term sale-leaseback and build-to-suit financing for companies worldwide and manages a global investment portfolio worth more than $10 billion. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA® series of income-generating, non-traded REITs help companies and private equity firms release capital tied up in real estate assets. Now in our 35th year, the W. P. Carey Group’s real estate holdings are highly diversified, comprised of more than 850 commercial and industrial assets spanning 28 industries and 14 countries. 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.
