W. P. Carey Announces Record Third Quarter Financial Results

Earnings Increase 143% Following the Liquidation of Affiliated REIT

October 26, 2004

WEBCAST • WPC 3rd Quarter 2004 Financials (PDF)

NEW YORK, NY, October 26, 2004 – Investment firm W. P. Carey  & Co. LLC (NYSE: WPC) today reported financial results for the three and nine-month periods ended September 30, 2004.

W. P. Carey’s financial results for the three and nine-month periods were positively impacted by the liquidation of its managed affiliated real estate investment trust (REIT), Carey Institutional Properties (CIP^®).  As a result of this liquidity event, W. P. Carey earned $21.6 million, net of taxes, from disposition and incentive fees.

Quarterly and Nine-Month Results

• Earnings per share (EPS) for the three-month period increased 143% to $0.90, up from  $0.37 for the same period in 2003.  EPS for the nine-month period were $1.59, as compared to $1.17 for the similar period last year. 
• Net Income for the three-month period increased to $35.2 million, as compared to $14.0 million for the same period in 2003.  For the nine-month period, net income was $61.7 million as compared to $44.3 million for the same period a year ago.  Included in net income for the three-month period are charges for asset impairments of $7.5 million, primarily related to an investment in Michigan.  For the nine-month period total impairment charges were $15.4 million. 
• Funds from Operations (FFO) for the three-month period increased 117% to $1.54 per diluted share, or $60.0 million, as compared to $0.71 per diluted share, or $27.3 million, for the comparable period in 2003.  FFO for the nine-month period increased to $2.95 per diluted share, or $114.5 million, up from $2.07 per diluted share, or $78.0 million for the similar period a year ago. 
• Total revenue for the three-month period increased 130% to $99.3 million, up from $43.2 million for the same period a year ago.  For the nine-month period, total revenue was $189.8 million, as compared to $123.2 million for the comparable period in 2003.
• Cash Flows from Operating Activities for the nine-month period in 2004 increased to $108.0 million, up from $44.0 million during the same period in 2003.  The unaudited Consolidated Statements of Cash Flows are attached to this press release.
• The Company, on behalf of its CPA^® series of REITs, completed $335 million in investments during the third quarter, as compared to $211 million during the same period in 2003.  For the nine-month period, the Company completed $829 million in investments, as compared to $542 million during the same period last year.  This nine-month total exceeds the total investment volume of $725 million completed in 2003.
• On September 1, two of the Company’s affiliated REITs, CIP^® and Corporate Property Associates 15 (CPA^®:15), merged.  The merger was the eleventh successful liquidation of a W. P. Carey fund since 1998.  Initial investors experienced an average annual return of 11.2%.  Immediately prior to the merger, W. P. Carey acquired interests in 17 properties from CIP® for approximately $142 million, which includes the assumption of approximately $28 million of debt.  These properties, totaling 2.4 million square feet, consist of office, industrial, retail and warehouse facilities located in nine states.
• In September, the Board of Directors raised the cash dividend to $.44 per common share.  This reflects the fourteenth consecutive quarterly increase.  The dividend was paid on October 15, 2004 to shareholders of record on September 30, 2004.  Dividends have increased every year since 1998 when the company went public.

Gordon DuGan, President of W. P. Carey & Co. LLC, said, “We are very pleased with our results across all measures for the third quarter and the nine-month period.  We experienced the benefit of realizing the back-end incentive and disposition fee income from the liquidation of our eleventh fund, CIP^®, as well as a strong quarter from our other operating activities.  Our investment volume on behalf of our managed entities was strong for the third quarter and nine-month period as well, exceeding $800 million for the first nine months.  We should note that this level of earnings, including the incentive and disposition fees, is higher than we have experienced and is not likely repeatable each year.

“We continue to uncover opportunities by differentiating ourselves in the marketplace through our ability to understand complex financial situations, by developing strong, long-standing relationships and by completing transactions on time and as proposed.  At the same time, we remain cautious about the excess liquidity in the real estate and corporate finance markets, as we see them.  In the face of this competitive environment, we will continue to be disciplined and seek attractive opportunities for our shareholders and CPA^® fund investors alike.”

Conference Call & Webcast

Please call at least 10 minutes prior to register for call. 

Time:    Tuesday, October 26, 11:00 AM EDT.

Call-in number:  1-800-946-0774     (International) 719-457-2648

Webcast:  ARCHIVED

Replay:   Available after 1:00 PM. Call 1-888-203-1112  
(International) 719-457-0820 with the access code 814264. 

Founded in 1973, W. P. Carey & Co. LLC is a global investment firm concerned with assisting corporations with various forms of long-term financing.  With $3.5 billion in equity capital, it is best known as a leading provider of net lease financing for corporate properties worldwide.

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.