W. P. Carey Announces Third Quarter Financial Results
W. P. Carey Q3 2009 Financials
CORRECTION (NOVEMBER 6, 2009)
While preparing our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, we determined that there was an error in our earnings release dated November 5, 2009 regarding the calculation of the provision for income taxes for the third quarter of 2009. As a result, the provision for income taxes for both the three and nine months ended September 30, 2009 was overstated by $0.5 million, and consequently our net income for each of those periods was understated by the same amount.
To mitigate any confusion from this correction, a copy of our November 5, 2009 earnings release, revised to reflect the above correction, is set forth below.
New York, NY – November 5, 2009 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the third quarter ended September 30, 2009.
QUARTERLY AND NINE-MONTH RESULTS
- Cash flows from operating activities for the nine months ended September 30, 2009 increased to $49.4 million from $47.5 million for the prior year period.
- Adjusted cash flow from operating activities for the nine months ended September 30, 2009 was $71.3 million, compared to $70.1 million for the comparable period in 2008.
- Total revenues net of reimbursed expenses for the third quarter of 2009 were $47.7 million, compared to $55.2 million for the third quarter of 2008. Total revenues net of reimbursed expenses for the nine months ended September 30, 2009 were $142.5 million, compared to $149.4 million for the comparable period in 2008. Reimbursed expenses are excluded from total revenues because they have no impact on net income.
- Net income for the third quarter of 2009 was $13.4 million, compared to $19.2 million for the same period in 2008. For the nine months ended September 30, 2009, net income was $46.0 million, compared to $56.1 million for the comparable period in 2008.
- Funds from operations (FFO) for the third quarter of 2009 were $30.2 million or $0.75 per diluted share, compared to $33.5 million or $0.83 per diluted share for the comparable period in 2008. FFO for the nine months ended September 30, 2009 was $89.2 million or $2.24 per diluted share, compared to $90.6 million or $2.25 per diluted share for the comparable period in 2008.
- We incurred impairment charges of $2.4 million for the third quarter of 2009 and $4.7 million for the nine months ended September 30, 2009 and our CPA® REITs incurred impairment charges of $54.1 million for the quarter and $108.7 million for the nine months. This reduced the amount of income we recognize from these equity investments by approximately $3.6 million for the third quarter and $6.4 million for the nine-month period. We received approximately $10.5 million in cash distributions from our equity ownership in the CPA® REITs for the nine months ended September 30, 2009.
- Further information concerning FFO and adjusted cash flow from operating activities, non-GAAP supplemental performance metrics, is presented in the accompanying tables.
INVESTMENT, FUNDRAISING AND FINANCING ACTIVITY
- Investment volume, for our own portfolio and on behalf of the CPA® REITs, for the nine months ended September 30, 2009 was $395.4 million, compared to $404.0 million for the comparable period in 2008.
- In the third quarter, we closed two international transactions on behalf of the REITs—a $93.6 million sale-leaseback with UK retailer Tesco plc, our first Hungarian transaction, and a $27.5 million build-to-suit transaction with UK public transport provider National Express for their main coach terminal and headquarters building.
- 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. Through October 31, 2009, CPA®:17 – Global has raised more than $685 million of its up-to $2 billion offering. For the third quarter of 2009, we raised $124.6 million, compared to $100.3 million in the second quarter and $71.5 million in the first quarter of this year.
- Since the beginning of the credit crunch in September 2008, W. P. Carey and our CPA® REITs have secured more than $390 million in debt financings, including a $120 million loan with the Bank of China, New York Branch for The New York Times Company’s Midtown Manhattan headquarters that was purchased in March 2009.
ASSETS UNDER MANAGEMENT
- W. P. Carey is the advisor to the CPA® REITs, which had real estate assets of $7.9 billion and total assets of $8.4 billion as of September 30, 2009.
- As of September 30, 2009, the occupancy rate of our 16.7 million square foot owned portfolio was approximately 95%. In addition, for the 92.7 million square feet owned by the CPA® REITs, the occupancy rate was approximately 97%.
DISTRIBUTIONS
- The Board of Directors raised the quarterly cash distribution to $0.50 per share for the third quarter of 2009. The distribution was paid on October 15, 2009 to shareholders of record as of September 30, 2009. This was our 34th consecutive quarterly dividend increase.
- Over the past 36 years, W. P. Carey and the CPA® programs have paid more than $3 billion to investors over 800 cash distributions.
Gordon DuGan, President and CEO of W. P. Carey, said, “While our FFO for the quarter is down due to lower investment volume for the quarter, our adjusted cash flow year-to-date is up. Our fundraising for CPA®:17 – Global continued to increase in the third quarter and we are seeing a healthy investment pipeline today. We believe our fundraising efforts provide us the investment capital needed for future acquisitions, which will allow us to continue to grow our assets under management.”
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register.
Time: Thursday, November 5, 2009 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: 434585#
Replay Available until November 19, 2009 at midnight ET.
W. P. Carey & Co. LLC
W. P. Carey & Co. LLC is an investment firm that provides long-term sale-leaseback and build-to-suit financing for companies worldwide and manages a global investment portfolio approaching $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. The W. P. Carey Group’s investments are highly diversified, comprising contractual agreements with approximately 300 long-term corporate obligors spanning 28 industries and 15 countries. http://www.wpcarey.com
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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.
