New York, NY – August 1, 2007 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the second quarter and six-month period ended June 30, 2007. Revenues, net income and funds from operations (FFO) for the second quarter were significantly higher than the same quarter in 2006 and all were positively impacted by a substantial increase in investment volume and CPA®:16 – Global meeting its performance hurdle in June.
Assets under management at the end of the second quarter were valued at $8 billion – an increase of approximately $1.4 billion or 20% from the second quarter of 2006. Since 2001, the Company’s assets under management have had an annual compound growth rate of 25%. Contributing to this growth was investment volume, which reached a six-month record of $660 million through June 2007. Total investment volume for the full year 2006 was $720 million.
In connection with CPA®:16 – Global meeting its performance hurdle, the Company recognized $45.9 million in previously deferred revenues. Net income for the second quarter was also positively affected by $21.6 million with the achievement of the hurdle.
QUARTERLY AND SIX-MONTH RESULTS
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Total revenues net of reimbursed expenses for the second quarter of 2007 were $106.9 million, compared to 2006’s second quarter revenues of $37.6 million. Total revenues net of reimbursed expenses for the six-month period were $149.3 million, compared to $82.4 million for 2006. Reimbursed expenses are excluded from total revenues because they have no impact on net income.
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Net income for the second quarter of 2007 increased to $42 million, as compared to $17.3 million for the same period in 2006. Net income for the six-month period increased 86% to $52.8 million, as compared to $28.4 million in 2006.
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Diluted earnings per share (EPS) for the second quarter of 2007 were $1.10 as compared to $0.44 for the same period in 2006. Diluted EPS for the six-month period increased 88% to $1.37 as compared to $0.73 for the same period in 2006.
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FFO for the second quarter of 2007 was $1.99 per diluted share, or $79.6 million, as compared to $0.73 per diluted share, or $28.6 million, for the comparable period in 2006. FFO for the six-month period increased 95% to $98.1 million, or $2.46 per diluted share, as compared to $50.4 million, or $1.30 per diluted share, for the comparable period in 2006.
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Cash flows from operating activities for the six-month period decreased to $11.6 million, as compared to $35.6 million for the comparable period in 2006 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.
SUPPLEMENTAL PERFORMANCE METRICS
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Earnings before interest, taxes, depreciation and amortization (EBITDA) from our investment management segment totaled $63.5 million this quarter, an increase over EBITDA of $10.8 million in the second quarter of 2006. Year-to-date, EBITDA increased 183% to $75.1 million from $26.6 million.
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FFO from our real estate ownership segment in the second quarter of 2007 decreased to $17 million from $18 million. Year-to-date, FFO from this segment increased 3% to $31.7 million from $30.7 million.
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For the six-month period ended June 30, 2007, adjusted cash flow from operations totaled $54.9 million, as compared to $46.2 million for the previous year.
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Further information concerning these non-GAAP supplemental performance metrics is presented in the accompanying tables.
DISTRIBUTIONS AND SHARE REPURCHASE
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The Board of Directors raised the quarterly cash distribution to $0.467 per share – our 25th consecutive dividend increase – which was paid on July 16, 2007 to shareholders on record as of June 29, 2007.
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In addition, our Board approved a share repurchase program authorizing the repurchase of up to $20 million of our outstanding shares in the open market through December 31, 2007.
INVESTMENT ACTIVITY
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In the second quarter of 2007, we structured investments totaling approximately $493 million on behalf of our CPA® series of funds. Substantially all of these investments were international transactions.
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Our investment volume reached a record $660 million through the end of June, almost doubling the previous year’s six-month total of $338 million.
“We are very pleased with our strong second quarter and year-to-date results,” said President and Chief Executive Officer, Gordon F. DuGan. “These results show how the growth of our investment management business can result in strong bottom-line results. Our investment volume has been very strong for the first six months of this year and we continue to have a sound pipeline of investment opportunities. Additionally, we think that a tightening of the credit markets could potentially create a more attractive investment environment as our sale-leaseback business competes with other forms of capital for our corporate clients. As we move forward to the second half of 2007, we do so with a very strong balance sheet and in a terrific financial position.”
UPCOMING EVENTS
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Benjamin P. Harris, Head of Domestic Investments, will be speaking at The Deal’s 2007 Innovative Deal Financing Conference on Tuesday, September 25, 2007 at the Harvard Club in New York City.
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register
Time: Wednesday, August 1, 2007 at 11:00 AM (ET)
Call-in Number: 1-877-407-8031
(International) +1-201-689-8031
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 # 248308. Please note that both access codes are required for playback. Replay available until August 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 over $9.7 billion in assets and $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.
W. P. Carey & Co. LLC
50 Rockefeller Plaza
New York, NY 10020
www.wpcarey.com
