W. P. Carey & Co. LLC Reports Second Quarter 2000 Results
FFO Per Share Increases 8%
NEW YORK, NY – August 14, 2000 – W. P. Carey & Co. LLC (NYSE:WPC), formerly Carey Diversified LLC (NYSE: CDC), today reported Funds From Operations (FFO) for the three months ended June 30, 2000 of $14.3 million or $0.56 per share (basic and diluted), compared to $13.2 million or $0.52 per share in the second quarter of 1999, an increase of 8%.
FFO for the six months ended June 30, 2000 increased 5% to $27.3 million or $1.06 per diluted share, compared to $26 million or $1.02 per share, for the first six months last year. FFO is the most commonly accepted and reported measure of operating performance for a real estate investment company.
SECOND QUARTER HIGHLIGHTS
- At the annual meeting of shareholders held on June 28, 2000, Carey Diversified LLC shareholders approved the merger of Carey Diversified and W. P. Carey & Co. LLC Carey Diversified issued 8,000,000 shares to acquire the net-lease advisory business of W. P. Carey & Co. LLC The newly merged company is listed on both the New York Stock Exchange (NYSE: WPC) and the Pacific Stock Exchange (PCX: WPC).
- The Board of Directors of W. P. Carey declared a quarterly cash dividend of $0.4225 per common share (on an annualized basis, $1.69 per share), the second quarterly dividend this year at this rate. The dividend was paid on July 15, 2000 to shareholders of record on June 30, 2000.
- W. P. Carey completed a $53.8 million sale-leaseback transaction for five facilities operated by Galyan's Trading Company, Inc. on behalf of Corporate Property Associates 14 (CPA®:14) and Corporate Property Associates 12 (CPA®:12). CPA®:14 and CPA®:12, are real estate investment trusts (REITs) managed by W. P. Carey.
- W. P. Carey structured a $8.6 million sale-leaseback including financing for an expansion of a 121,000 square foot distribution facility owned by Langeveld International on behalf of CPA®:14.
MERGER BENEFITS
The newly renamed W. P. Carey & Co. LLC is a fully integrated investment company and the nation's preeminent net-lease firm. The advisory operations acquired in the merger contributed $1.9 million of net operating income to the Company's earnings in the second quarter. Going forward management expects the combined company's earnings to increase due to the historically high growth rate of the advisory business, enhanced diversification of revenue sources and the elimination of fees paid to an external advisor.
QUARTERLY RESULTS
Total revenues in the second quarter of 2000 increased 21.5% to $26.6 million from $21.9 million for the same period a year ago. The increase in revenues resulted primarily from rent increases in the Company's portfolio of net-leased properties and fees paid to W. P. Carey for advisory services rendered to the Corporate Property Associates (CPA®) series of REITs.
In accordance with generally accepted accounting principles (GAAP), the acquisition of the Company's management contract at the close of the merger was accounted for as a contract termination. The contract's fair value of $38 million was expensed as a one-time non-cash charge, resulting in a book loss for the quarter of $30 million compared to net income of $9.6 million for the second quarter of 1999.
ON TARGET WITH GOALS
Commenting on the Company's performance, Wm. Polk Carey, Chairman of W. P. Carey, said "We are pleased with the results of the second quarter and look forward to future benefits from the merger of W. P. Carey and Carey Diversified. Increases in FFO resulting from the addition of management fees paid for services provided to the CPA® REITs, coupled with the steady revenue stream produced by a highly diversified portfolio of net-leased properties, should create for our shareholders a "best of both worlds" scenario – rising dividends and prudent investment growth. We believe that good things are in store for the newly combined company."
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing using the corporate net-lease, or sale-leaseback structure. The firm, including affiliates, is the leading lessor of net-leased corporate real estate in the nation. W. P. Carey, the world's largest publicly traded Limited Liability Company, owns and manages over 38 million square feet of property in the U.S. and Europe. Additional information aboutW. P. Carey is available on the company's website: www.wpcarey.com
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.
