WEBCAST • WPC Third Quarter Financial Results
NEW YORK, NY, November 1, 2005 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the three and nine-month periods ended September 30, 2005.
W. P. Carey’s financial results for the three and nine-month periods of 2005 were lower than in the comparable periods of 2004, primarily as a result of fees earned from the merger of two of its managed affiliated real estate investment trusts (REITs) in 2004. In September 2004, W. P. Carey liquidated its managed affiliated REIT, Carey Institutional Properties, Incorporated (CIP®), through a merger with Corporate Property Associates 15, Incorporated (CPA®:15), which resulted in additional revenue of $42.1 million from incentive and subordinated disposition fees, additional revenue of $11.5 million in structuring fees and resulting increases in W. P. Carey’s net income, earnings per share, earnings from continuing operations, revenues, funds from operations and cash flows from operating activities. In addition, prior to the merger, W.P. Carey acquired approximately $142 million of net leased properties from CIP®, income from which is reflected in the 2005 results.
QUARTERLY AND NINE-MONTH RESULTS
- Net income for the three-month period was $14.3 million, as compared to $35.2 million during the similar period in 2004. Net income for the nine-month period was $37.1 million, as compared to $61.7 million during the similar period in 2004.
- Diluted earnings per share (EPS) for the three-month period were $0.37, as compared to $0.90 during the same period in 2004. Diluted EPS for the nine-month period were $0.95, versus $1.59 for the same period in 2004.
- Earnings from continuing operations for the three-month period were $13.7 million, as compared to $39.4 million during the same period in 2004. For the nine-month period earnings from continuing operations were $41.4 million, as compared to $69.0 million for the similar period in 2004.
- Total revenues for the three-month period were $40.2 million, as compared to $96.0 million for the same period in 2004. Total revenues for the nine-month period were $126.7 million, as compared to $179.7 million during the similar period in 2004. Excluding incentive, subordinated disposition and structuring fees of $53.6 million received in the CIP®-CPA®:15 merger, revenues would have been $42.4 million and $126.1 million for the similar periods in 2004.
- Funds from Operations (FFO), as per the attached schedule, which are calculated consistently with the Company’s prior FFO reporting, for the three-month period were $0.66 per diluted share, or $25.6 million, as compared to $1.54 per diluted share, or $60.0 million for the comparable period in 2004. FFO for the nine-month period were $1.90 per diluted share, or $74.3 million, as compared to $2.95 per diluted share, or $114.5 million for the similar period a year ago.
- Cash Flows from Operating Activities for the nine-month period were $45.3 million, as compared to $108 million during the similar period in 2004.
- For the third quarter of 2005, total investments made by the Company on behalf of its Corporate Property Associates funds were $153 million, as compared to $335 million during the third quarter of 2004. For the third quarter of 2005 international transactions accounted for $125 million of the total investment volume, as compared to $201 million during the same period in 2004. Total investments for the first nine months of 2005 were $780 million, as compared to $823 million for the comparable period in 2004. For the first nine months of 2005, international investments accounted for $426 million of this volume, as compared to $254 million for the similar period in 2004.
- The Board of Directors raised the cash dividend to $.448 per common share, from $.446 per common share, which was paid on October 15, 2005 to shareholders of record on September 30, 2005.
Gordon F. DuGan, President and Chief Executive Officer of W. P. Carey & Co. LLC, said, “The effects of the merger of our affiliate Carey Institutional Properties with Corporate Property Associates 15 in September 2004, make comparison of our quarterly and nine-month results for 2005 and 2004 challenging. Nonetheless, it is worth noting that, excluding the fees received in that merger, revenues for the third quarter and first nine months of 2005 remained at similar levels to those for 2004. This reflects in part the growth in asset management fees, which increased to $13.4 million in the third quarter of 2005 from $11.9 million in the year earlier period and which for the first nine months of 2005 increased to $38.9 million from $33.9 million for the comparable period of 2004. These increases reflect the significant growth in assets under management from approximately $5.2 billion in September 2004 to approximately $6 billion at the end of the third quarter of 2005.
“In addition, a significant amount of structuring and asset management fees from our affiliate, CPA®16-Global, continues to be deferred. These deferred fees, which total $19.5 million to date, will generally not become payable until CPA®:16-Global achieves a cumulative non-compounded distribution return of 6.0%. While CPA®:16–Global is currently paying a 6.0% return, at present we estimate that achieving a cumulative 6.0% return is not likely to take place before late 2006.
“We also continue to look for opportunities to take advantage of current market conditions in a number of areas. For example, this past month we were able to place financing on several of our properties at a weighted average rate of 5.13%, for an average term of 9.2 years and used the proceeds of $45.9 million to pay down short-term debt. We anticipate adding a further $10.75 million of similar long-term debt financing in the near future.
“Despite an increasingly competitive net lease market, our name brand, our flexibility and speed with which we are able to complete sale-leaseback transactions throughout the world remain our hallmark. We are pleased with the growth of our international investments and believe our continued success lies in our ability to balance attractive yield investments for our shareholders, while providing companies around the world with long-term financing solutions.”
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to register for call.
Time: Tuesday, November 1, 2005 11:00 am (ET)
Call-in number: 1-800- 361-0912
(International) (913) 981-5559
Webcast: ARCHIVED
Replay: Available after 1:00 PM. Call 1-888-203-1112
(International) 719-457-0820 with Access Code 8954603
W. P. CAREY & CO. LLC
Founded in 1973, W. P. Carey & Co. LLC is a global investment firm concerned with assisting corporations with various forms of long-term financing. The Company also provides asset management services to the Corporate Property Associates (CPA®) series of income generating real estate funds. With $3.5 billion in equity capital, the W. P. Carey Group is one of the leading providers of net lease financing for corporate properties worldwide. The Group owns more than 680 commercial and industrial properties in 12 countries, representing over 95 million square feet, valued at more than $7.4 billion. 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 commercial 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.
