W. P. Carey Announces Fourth Quarter and Year-End 2006 Financial Results
W. P. Carey Fourth Quarter 2006 Financial Results
NEW YORK – February 23, 2007 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the fourth quarter and year ended December 31, 2006.
W. P. Carey reported net income and diluted earnings per share of $86 million and $2.22 for the year ended 2006, up 78% over the prior year’s results.
QUARTERLY AND YEAR-END RESULTS
• Total revenues net of reimbursed expenses for the fourth quarter of 2006 were $88.1 million, compared to 2005’s fourth quarter revenues of $35.4 million. Total revenues net of reimbursed expenses for 2006 were $209.6 million, compared to $158.8 million for 2005. This substantial increase in revenues is due primarily to $46 million in revenues the Company earned as a result of the CPA® :12/CPA® :14 merger. Reimbursed expenses are excluded from total revenues because they have no impact on net income.
• Net income for the fourth quarter of 2006 was $43.6 million, compared to $11.5 million in 2005. For 2006, net income was $86.3 million, a 78% increase from $48.6 million in 2005. This increase was primarily due to the merger, gains on sale of investments, lower impairment charges, and lower general and administrative costs.
• Diluted earnings per share (EPS) for the fourth quarter were $1.12, as compared to $0.30 for 2005. Diluted EPS for 2006 were $2.22 versus $1.25 for 2005.
• Funds from Operations (FFO) for the fourth quarter of 2006 was $54.9 million, compared to $24.2 million for the fourth quarter of 2005. For 2006, FFO was $128.5 million, compared to $98.6 million in 2005. This increase was due primarily to the merger.
• Cash flows from operating activities for 2006 were $119.9 million, as compared to $52.7 million during 2005.
INVESTMENT ACTIVITY
• For the fourth quarter of 2006, the Company structured 12 investments on behalf of its managed CPA® REITs totaling $269 million, as compared to $85 million during the fourth quarter of 2005.
• For 2006, the Company structured 25 investments on behalf of the CPA® REITs totaling approximately $720 million, as compared to $865 million in 2005. Of the total investments in 2006, four were build-to-suit projects with combined estimated construction costs of $103 million. In 2006, approximately 76% of investments were made on behalf of CPA® :16 – Global and approximately 48% were international transactions.
DISPOSITIONS
• In 2006, the Company sold five domestic properties for combined net proceeds of approximately $32 million for a net GAAP gain of $3.4 million. In addition, the Company sold 11 properties on behalf of its CPA® REITs for net proceeds of approximately $397 million, representing a net GAAP gain of approximately $100 million.
MERGER
• On December 1, 2006, two of the CPA® REITs that the Company manages, CPA®:12 and CPA®:14, merged, with CPA® :14 being the surviving company. The merger represents the twelfth successful liquidation of a W. P. Carey fund since 1998. In connection with the liquidation, the Company acquired 37 properties from CPA® :12 for approximately $126 million, which includes the assumption of debt. These properties, totaling approximately 1.7 million square feet, consist primarily of office, industrial, retail and warehouse facilities located in the United States and France. The lease terms of these properties expire before 2013. Included in the gains on sale of investments for 2006 is approximately $6.5 million of gain recognized on both the sale and exchange of shares that the Company held in CPA® :12.
CAREY STORAGE
• In November 2006, the Company formed a subsidiary focused on investing in the U.S. self-storage industry. This subsidiary acquired six properties for $24.8 million in the fourth quarter of 2006.
CPA® :16 – GLOBAL OFFERING
• In December 2006, CPA® :16 – Global completed its second public offering, raising $550 million since March 2006 and bringing the total offerings of the fund to $1.1 billion.
GROWTH IN ASSETS UNDER MANAGEMENT
The Company is the advisor to the CPA® REITs, which had assets valued at approximately $7 billion on December 31, 2006 – an 8.2% increase as compared to December 31, 2005.
• Since 2000, the Company's assets under management on behalf of the CPA® REITs have more than tripled, reflecting an annual compound growth rate of 26%.
• As of December 31, 2006, the occupancy rate of the Company’s 18 million square foot owned portfolio was approximately 96%. In addition, the occupancy rate of the W. P. Carey Group's entire 97 million square foot portfolio – which includes both the CPA® REITs and directly-owned assets – was approximately 99%.
“2006 was a very successful year for W. P. Carey,” President and Chief Executive Officer, Gordon F. DuGan, commented. “We merged two well-performing Corporate Property Associates REITs – our 12th successful liquidation and the most of any similar sponsor that I’m aware of – and we continued to expand our portfolio of managed properties, tripling them since 2000. Investment volume in the fourth quarter was strong and we were pleased with the overall volume for the year. Our growth areas continue to be our international investments and, more recently, our self-storage initiative. Our ability to stay at the forefront of the real estate investment sector, backed by a strong cash flow and one of the strongest balance sheets in the industry, demonstrates the inherent strength of our business. We are very well positioned for the future and are looking forward to another successful year in 2007.”
UPCOMING EVENTS
• Mark DeCesaris, Managing Director of W. P. Carey, will be speaking at The New York Society of Security Analysts on Thursday, March 1, 2007 at 10:40 AM.
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to register for call.
Time: Friday, February 23, 2007 11:00 AM (ET)
Call-in number: 1-877-407-0782
(International) +201-689-8567
Webcast: www.wpcarey.com/earnings
Podcast: www.wpcarey.com/podcast
Available after 2:00 PM (ET)
Replay: Available after 1:00 PM through March 2, 2007 at midnight ET.
Call 1-877-660-6853
(International) +201-612-7415
Replay Access codes: Account# 286 and Conference ID# 229243. Please note that both access codes are required for playback.
W. P. CAREY & CO. LLC
Founded in 1973, W. P. Carey & Co. LLC is a leading global real estate investment firm. The Company provides asset management services to its CPA® series of income generating real estate funds. With approximately $5 billion in equity capital, the W. P. Carey Group is one of the largest providers of net lease financing for corporations worldwide. The Group owns approximately 800 commercial and industrial properties in 13 countries, representing approximately 97 million square feet, valued at approximately $8.5 billion. 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.
