W. P. Carey Announces Third Quarter Financial Results

Group Investment Volume Surpasses $1 Billion

November 01, 2007

W. P. Carey Q3 Financials

New York, NY – November 1, 2007 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the third quarter and nine months ended September 30, 2007. 

Assets under management at the end of the third quarter were valued at approximately $8 billion – an increase of approximately $1.2 billion or 18% from the third quarter of 2006.  Since 2001, our assets under management have had an annual compound growth rate of 24%.

QUARTERLY AND NINE-MONTH RESULTS

• Total revenues net of reimbursed expenses for the third quarter of 2007 were $52.4 million, compared to $38.5 million for the third quarter of 2006.  Total revenues net of reimbursed expenses for the nine months increased 67% to $201.4 million, as compared to $120.5 million for the third quarter of 2006.  Reimbursed expenses are excluded from total revenues because they have no impact on net income.
• Net income for the third quarter of 2007 increased to $20.4 million, as compared to $14.3 million for the same period in 2006.  Net income for the nine months increased 72% to $73.2 million, as compared to $42.7 million in 2006. 
• Diluted earnings per share (EPS) for the third quarter of 2007 increased to $0.53, as compared to $0.37 for the same period in 2006.  Diluted EPS for the nine months increased 73% to $1.90, as compared to $1.10 for the same period in 2006.
• Funds from operations (FFO) for the third quarter of 2007, as per the attached table, increased to $0.81 per diluted share, or $32.2 million, as compared to $0.59 per diluted share, or $23.3 million, for the comparable period in 2006.  FFO for the nine months increased 77% to $130.4 million, or $3.28 per diluted share, as compared to $73.7 million, or $1.88 per diluted share for the comparable period in 2006.
• Cash flows from operating activities for the nine months decreased to $24.9 million, as compared to $48.9 million for 2006, primarily as a result of payment in 2007 of taxes totaling $21 million on revenue earned in the fourth quarter of 2006 in connection with the CPA®:12/CPA®:14 merger.

OUT OF PERIOD ADJUSTMENT

• 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. That determination resulted in a one-time cumulative out of period adjustment in the third quarter of 2007. The effect of this adjustment was to increase Income from continuing operations before income taxes for the third quarter of 2007 by approximately $5.7 million and Net income by approximately $4.8 million. There was no associated net impact on our Cash flow from operations or on our supplemental business metrics including EBITDA, FFO, and Adjusted cash flow from operations.

SUPPLEMENTAL PERFORMANCE METRICS

• Earnings before interest, taxes, depreciation and amortization (EBITDA) from our investment management segment totaled $0.50 per diluted share, or $20 million this quarter, an increase over EBITDA of $0.35 per diluted share, or $14 million, in the third quarter of 2006.  For the nine months, EBITDA from this segment increased 133% to $95.1 million, or $2.39 per diluted share, from $40.7 million, or $1.04 per diluted share for the comparable period in 2006.
• FFO from our real estate ownership segment in the third quarter of 2007 increased to $0.38 per diluted share, or $15.2 million, from $0.34 per diluted share, or $13.4 million in the third quarter of 2006.  For the nine months, FFO from this segment increased 7% to $46.9 million, or $1.18 per diluted share, from $43.9 million, or $1.12 per diluted share for the comparable period in 2006.
• For the nine months ended September 30, 2007, adjusted cash flow from operations totaled $68.1 million, as compared to $59.1 million for the previous period.
• Further information concerning these non-GAAP supplemental performance metrics is presented in the accompanying tables.

DISTRIBUTIONS AND SHARE REPURCHASE

• The Board of Directors raised the quarterly cash distribution to $0.472 per share for the third quarter, which was paid on October 15, 2007 to shareholders of record as of September 28, 2007.
• The Board approved the repurchase of an additional $20 million of common stock under our share repurchase program.  The Board also approved an extension of this program from December 31, 2007 to March 31, 2008.  We are now authorized to repurchase up to $40 million of our common stock in the open market through March 31, 2008 as conditions warrant.

RESTRUCTURING PLAN COMPLETE

• W. P. Carey has completed its restructuring plan which was designed to simplify tax reporting for existing and new shareholders and ultimately broaden our potential investor base.  For investors who initially purchase shares on or after October 1, 2007, the Schedule K-1 received for the 2007 tax year will reflect the revised structure, which is intended to eliminate UBTI (unrelated business taxable income) and shareholder filing of state and local tax returns.

INVESTMENT ACTIVITY

• In the third quarter of 2007, we structured investments totaling approximately $214 million on behalf of our CPA^® series of funds.  Approximately 53% of these transactions were international.  We structured investments totaling approximately $950 million on behalf of our CPA^® REITs through the end of September.
• For the nine months ended September 30, 2007, the W. P. Carey Group’s total investment volume was approximately $1 billion.

“We are very pleased with our strong third quarter and year-to-date results and the fact that our Group’s investment volume has reached $1 billion,” said President and Chief Executive Officer, Gordon F. DuGan.  “We see opportunity in the slow down of the debt markets; as traditional forms of financing are harder to come by, we believe sale-leasebacks will continue to be an attractive source of financing.  As we move forward to the end of 2007 and into 2008, we continue to be very well-positioned with a solid balance sheet, good cash flows and in a strong financial position.”  

CONFERENCE CALL & WEBCAST

Please call at least 10 minutes prior to call to register

Time: Thursday, November 1, 2007 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 # 254758.  Please note that both access codes are required for playback.  Replay available until November 15, 2007 at midnight ET.

W. P. Carey & Co. LLC
Founded in 1973, W. P. Carey & Co. LLC is a leading global provider of long-term net lease financing for companies worldwide.  With approximately $9.7 billion in assets and over $5 billion in equity capital, the Company and its CPA^® series of income generating real estate funds specialize in helping companies and private equity firms realize the capital tied up in their real estate assets.  The W. P. Carey Group owns more than 850 commercial and industrial properties in 14 countries, representing approximately 100 million square feet.  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.