EX-99.1 2 a13-5870_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

 

W. P. CAREY INC.

Supplemental Unaudited Operating and Financial Data

 

As of December 31, 2012

 

GRAPHIC

 

Important Disclosures About this Supplemental Package

 

As used in this supplemental package, the terms “W. P. Carey,” “WPC” “the Company,” “we,” “us” and “our” include W. P. Carey Inc., its consolidated subsidiaries, and predecessors, unless otherwise indicated. “WPC LLC” means W. P. Carey & Co. LLC, our predecessor company. The “Merger” means our merger with Corporate Property Associates 15 Incorporated (“CPA®:15”) on September 28, 2012. “GAAP” means generally accepted accounting principles in the United States (“U.S.”). “CPA® REITs” means CPA®:15, Corporate Property Associates 16 – Global Incorporated (“CPA®:16 – Global”), and Corporate Property Associates 17 – Global Incorporated (“CPA®:17 – Global”). The “Managed REITs” means the CPA® REITs and Carey Watermark Investors Incorporated (“CWI”). Corporate Property Associates 14 Incorporated (“CPA®:14”) was one of the CPA® REITs until its merger with a subsidiary of CPA®:16 – Global on May 2, 2011 (the “CPA®:14/16 Merger”).

 

Important Note Regarding Non-GAAP Financial Measures

 

This supplemental package includes certain supplemental metrics that are not defined by GAAP (“non-GAAP”), including earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, funds from operations - as adjusted (“AFFO”), and total adjusted revenue. A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures are provided in this supplemental package.

 


 

W. P. CAREY INC.

Supplemental Unaudited Operating and Financial Data

As of December 31, 2012

 

 

Highlights

 

 

Company Overview

 

1

Financial and Operational Statistics

 

2

 

 

 

Financial Information

 

 

Consolidated Balance Sheets

 

3

Consolidated Statements of Income

 

4

Reconciliation of Net Income to Funds from Operations - as Adjusted (AFFO)

 

5

Reconciliation of GAAP Net Income to AFFO - Three Months Ended December 31, 2012

 

8

Reconciliation of GAAP Net Income to AFFO - Year Ended December 31, 2012

 

10

Reconciliation of Net Income to EBITDA - as Adjusted

 

12

Adjusted Revenue Analysis

 

14

Total Adjusted Revenue - W. P. Carey Group

 

16

Adjusted General and Administrative

 

18

Business Segment and Financial Information

 

19

Lease Revenues and Property Expenses

 

20

 

 

 

Capitalization

 

 

Portfolio Debt Overview

 

21

Detailed Debt Summary

 

22

Selected Data for the Managed REITs

 

25

Joint Venture Information

 

26

 

 

 

WPC Inc. Portfolio Information

 

 

Owned Portfolio Analysis - Diversification by Rent and Historical Occupancy

 

27

Owned Portfolio Analysis - Diversification by Property Type

 

28

Owned Portfolio Analysis - Diversification by Tenant Industry

 

29

Owned Portfolio Analysis - Diversification by Geography

 

30

Owned Portfolio Analysis - Lease Maturities

 

31

 

 

 

2012 Investment Activity

 

 

Owned Portfolio - Investments and Dispositions

 

32

Managed REITs - Acquisitions

 

33

Managed REITs - Dispositions

 

35

 

 

 

Tenants by Annualized Contractual Minimum Base Rent

 

36

 


 

W. P. CAREY INC.

 

Company Overview

 

December 31, 2012

 

Key Company Contacts

 

 

 

Executive Offices

Trevor P. Bond

 

President, Chief Executive Officer and Director

 

50 Rockefeller Plaza

Mark J. DeCesaris

 

Chief Financial Officer

 

New York, NY 10020

Thomas E. Zacharias

 

Managing Director, Chief Operating Officer

 

Tel: 1-800-WPCAREY or (212) 492-1100

Catherine D. Rice

 

Managing Director

 

Fax: (212) 492-8922

Susan C. Hyde

 

Managing Director, Director of Investor Relations

 

Web Site Address: www.wpcarey.com

Kristin A. Brown

 

Vice President, Investor Relations

 

 

 

 

 

 

 

Banks

 

 

 

 

Bank of America, N.A.

 

Administrative and Documentation Agent

 

 

The Bank of New York Mellon

 

Syndication Agent

 

 

JPMorgan Chase Bank, N.A.

 

Syndication Agent

 

 

PNC Bank, N.A.

 

Syndication Agent

 

 

 

 

Stock Data (NYSE: WPC)

 

 

 

Fourth Quarter
2012

 

 

 

Third Quarter
2012

 

 

 

Second Quarter
2012

 

 

 

First Quarter
2012

 

 

 

Fourth Quarter
2011

 

High Price

 

 

 

$

54.70

 

 

 

$

53.85

 

 

 

$

48.39

 

 

 

$

49.70

 

 

 

$

44.71

 

Low Price

 

 

 

45.94

 

 

 

43.25

 

 

 

39.66

 

 

 

41.28

 

 

 

34.50

 

Closing Price

 

 

 

52.15

 

 

 

49.00

 

 

 

46.03

 

 

 

46.52

 

 

 

40.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per share - annualized

 

 

 

$

2.64

 

 

 

$

2.60

 

 

 

$

2.27

 

 

 

$

2.26

 

 

 

$

2.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution yield
(annualized distribution / closing stock price)

 

 

 

5.06%

 

 

 

5.31%

 

 

 

4.93%

 

 

 

4.86%

 

 

 

5.50%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding at quarter end

 

 

 

68,901,933

 

 

 

68,566,888

 

 

 

40,358,186

 

 

 

40,312,460

 

 

 

39,729,018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market value of outstanding shares at quarter end
(in thousands)

 

 

 

$

3,593,236

 

 

 

$

3,359,778

 

 

 

$

1,857,687

 

 

 

$

1,875,336

 

 

 

$

1,626,506

 

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 1

 


 

W. P. CAREY INC.

 

Financial and Operational Statistics (Unaudited)

 

As of and for the Year Ended December 31, 2012

 

Market Capitalization

 

WPC

 

Shares Outstanding

 

68,901,933

 

Stock Price at end of Period

 

$

52.15

 

Market Capitalization (Equity Capitalization) ($’000)

 

$

3,593,236

 

Total Capitalization ($’000) (a)

 

$

5,561,633

 

Enterprise Value ($’000) (b)

 

$

5,437,729

 

High Stock Close Price

 

$

54.70

 

Low Stock Close Price

 

$

41.65

 

 

 

 

 

Financial Ratios

 

 

 

Debt to Total Capitalization

 

35.4%

 

Net Debt to Total Capitalization (c)

 

33.2%

 

Net Debt to Enterprise Value (c)

 

33.9%

 

Pro Rata Adjusted EBITDA ($’000) (d)

 

$

274,749

 

Net Debt to Pro Rata Adjusted EBITDA (c)

 

6.71

 

Total Debt to Gross Assets (e)

 

44.6%

 

Unsecured Debt to Gross Assets

 

5.7%

 

Interest Coverage (f)

 

5.38

 

Adjusted G&A/W. P. Carey Group Revenues (g)

 

6.8%

 

Dividend (h)

 

$

2.64

 

Dividend Payout (i)

 

70.2%

 

Weighted-Average Cost of Total Debt

 

4.8%

 

 

Property Information

 

CPA®:16 - Global

 

 

 

CPA®:17 - Global

 

 

 

WPC

 

Number of Properties (j)

 

500

 

 

 

394

 

 

 

423

 

Number of Tenants

 

146

 

 

 

81

 

 

 

124

 

Total Square Feet (millions)

 

47.3

 

 

 

36.0

 

 

 

38.5

 

Occupancy

 

96.9%

 

 

 

100.0%

 

 

 

98.7%

 

Weighted-Average Lease Term (years)

 

10.3

 

 

 

15.8

 

 

 

8.9

 

Percent of Investment Grade Tenants (k)

 

15.6%

 

 

 

22.7%

 

 

 

33.8%

 

 

 

 

 

 

(a)

Represents market capitalization plus total debt.

(b)

Represents total capitalization less cash.

(c)

Net debt represents total debt less cash.

(d)

Pro Rata Adjusted EBITDA includes nine months of pre-Merger results for WPC only and three months of post-Merger results.

(e)

Gross assets represent total assets, excluding goodwill, before accumulated depreciation.

(f)

Computed by dividing Pro Rata Adjusted EBITDA by pro rata interest expense.

(g)

Adjusted G&A represents general and administrative expenses excluding Merger-related costs, wholesaling related expenses and stock-based compensation expense. It includes nine months of the pre-Merger G&A and three months of the post-Merger G&A. W. P. Carey Group Revenues represents total pro rata real estate revenues for WPC and the Managed REITs, including CWI, as presented on page 16.

(h)

Represents the annualized dividend per share based on the declared fourth quarter distribution.

(i)

Computed by dividing annualized dividend per share by full year AFFO per share.

(j)

Property count for WPC excludes all operating properties.

(k)

Investment grade tenants are defined as having a BBB- rating or above. Percentage of portfolio is calculated based on annualized contractual minimum base rent.

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 2

 


 

W. P. CAREY INC.

Consolidated Balance Sheets (Unaudited)

 

(in thousands, except share and per share amounts)

 

 

 

 

December 31, 2012

 

 

 

December 31, 2011

 

Assets

 

 

 

 

 

 

 

Investments in real estate:

 

 

 

 

 

 

 

Real estate, at cost

 

$

2,331,613

 

 

 

$

646,482

 

Operating real estate, at cost

 

99,703

 

 

 

109,875

 

Accumulated depreciation

 

(136,068

)

 

 

(135,175

)

Net investments in properties

 

2,295,248

 

 

 

621,182

 

Real estate under construction

 

2,875

 

 

 

-    

 

Net investments in direct financing leases

 

376,005

 

 

 

58,000

 

Assets held for sale

 

1,445

 

 

 

-    

 

Equity investments in real estate and the REITs

 

565,626

 

 

 

538,749

 

Net investments in real estate

 

3,241,199

 

 

 

1,217,931

 

Cash

 

123,904

 

 

 

29,297

 

Due from affiliates

 

36,002

 

 

 

38,369

 

Goodwill

 

329,132

 

 

 

63,607

 

In-place lease, net

 

447,278

 

 

 

44,578

 

Above-market rent, net

 

279,885

 

 

 

4,822

 

Other intangible assets, net

 

10,200

 

 

 

12,950

 

Other assets, net

 

141,442

 

 

 

51,069

 

Total assets

 

$

4,609,042

 

 

 

$

1,462,623

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Non-recourse debt

 

$

1,715,397

 

 

 

$

356,209

 

Senior credit facility

 

253,000

 

 

 

233,160

 

Accounts payable, accrued expenses and other liabilities

 

265,132

 

 

 

82,055

 

Income taxes, net

 

24,959

 

 

 

44,783

 

Distributions payable

 

45,700

 

 

 

22,314

 

Total liabilities

 

2,304,188

 

 

 

738,521

 

Redeemable noncontrolling interest

 

7,531

 

 

 

7,700

 

Redeemable securities - related party

 

40,000

 

 

 

-    

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

W. P. Carey stockholders’ equity:

 

 

 

 

 

 

 

Common stock of W. P. Carey Inc.

 

69

 

 

 

-    

 

Additional paid-in-capital

 

2,175,820

 

 

 

779,071

 

Distributions in excess of accumulated earnings

 

(172,182

)

 

 

(95,046

)

Deferred compensation obligation

 

8,358

 

 

 

7,063

 

Accumulated other comprehensive loss

 

(4,649

)

 

 

(8,507

)

Less: treasury stock, at cost

 

(20,270

)

 

 

-    

 

Total W. P. Carey stockholders’ equity

 

1,987,146

 

 

 

682,581

 

Noncontrolling interests

 

270,177

 

 

 

33,821

 

Total equity

 

2,257,323

 

 

 

716,402

 

Total liabilities and equity

 

4,609,042

 

 

 

1,462,623

 

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 3

 


 

W. P. CAREY INC.

 

Consolidated Statements of Income (Unaudited)

 

(in thousands, except share and per share amounts)

 

 

 

Years Ended December 31,

 

 

 

2012

 

 

 

2011

 

 

 

2010

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Lease revenues

 

$

124,503

 

 

 

$

62,638

 

 

 

$

51,482

 

Asset management revenue from affiliates

 

56,666

 

 

 

66,808

 

 

 

76,246

 

Structuring revenue from affiliates

 

48,355

 

 

 

46,831

 

 

 

44,525

 

Incentive, termination and subordinated disposition revenue from affiliates

 

-    

 

 

 

52,515

 

 

 

-    

 

Wholesaling revenue

 

19,914

 

 

 

11,664

 

 

 

11,096

 

Reimbursed costs from affiliates

 

98,245

 

 

 

64,829

 

 

 

60,023

 

Other real estate income

 

26,312

 

 

 

22,499

 

 

 

17,273

 

 

 

373,995

 

 

 

327,784

 

 

 

260,645

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(144,809

)

 

 

(93,733

)

 

 

(73,427

)

Reimbursable costs

 

(98,245

)

 

 

(64,829

)

 

 

(60,023

)

Depreciation and amortization

 

(48,790

)

 

 

(24,347

)

 

 

(18,309

)

Property expenses

 

(13,041

)

 

 

(10,145

)

 

 

(8,009

)

Other real estate expenses

 

(9,850

)

 

 

(10,784

)

 

 

(8,121

)

Impairment charges

 

(10,467

)

 

 

1,365

 

 

 

(1,140

)

 

 

(325,202

)

 

 

(202,473

)

 

 

(169,029

)

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

1,396

 

 

 

2,001

 

 

 

1,269

 

Income from equity investments in real estate and the Managed REITs (a)

 

62,392

 

 

 

51,228

 

 

 

30,992

 

Gain on change in control of interests

 

20,744

 

 

 

27,859

 

 

 

781

 

Other income and (expenses)

 

3,402

 

 

 

4,578

 

 

 

627

 

Interest expense

 

(50,573

)

 

 

(21,770

)

 

 

(15,636

)

 

 

37,361

 

 

 

63,896

 

 

 

18,033

 

Income from continuing operations before income taxes

 

86,154

 

 

 

189,207

 

 

 

109,649

 

Provision for income taxes

 

(6,783

)

 

 

(37,214

)

 

 

(25,814

)

Income from continuing operations

 

79,371

 

 

 

151,993

 

 

 

83,835

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

Income from operations of discontinued properties

 

922

 

 

 

1,366

 

 

 

4,897

 

Gain on deconsolidation of subsidiary

 

-    

 

 

 

1,008

 

 

 

-    

 

(Loss) gain on sale of real estate

 

(5,019

)

 

 

(3,391

)

 

 

460

 

Impairment charges

 

(12,495

)

 

 

(11,838

)

 

 

(14,241

)

Loss from discontinued operations, net of tax

 

(16,592

)

 

 

(12,855

)

 

 

(8,884

)

Net Income

 

62,779

 

 

 

139,138

 

 

 

74,951

 

Net (income) loss attributable to noncontrolling interests

 

(607

)

 

 

1,864

 

 

 

314

 

Less: Net income attributable to redeemable noncontrolling interests

 

(40

)

 

 

(1,923

)

 

 

(1,293

)

Net Income Attributable to W. P. Carey

 

$

62,132

 

 

 

$

139,079

 

 

 

$

73,972

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to W. P. Carey

 

$

1.65

 

 

 

$

3.76

 

 

 

$

2.08

 

Loss from discontinued operations attributable to W. P. Carey

 

(0.35

)

 

 

(0.32

)

 

 

(0.22

)

Net income attributable to W. P. Carey

 

$

1.30

 

 

 

$

3.44

 

 

 

$

1.86

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to W. P. Carey

 

$

1.62

 

 

 

$

3.74

 

 

 

$

2.08

 

Loss from discontinued operations attributable to W. P. Carey

 

(0.34

)

 

 

(0.32

)

 

 

(0.22

)

Net income attributable to W. P. Carey

 

$

1.28

 

 

 

$

3.42

 

 

 

$

1.86

 

Weighted Average Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

47,389,460

 

 

 

39,819,475

 

 

 

39,514,746

 

Diluted

 

48,078,474

 

 

 

40,098,095

 

 

 

40,007,894

 

Amounts Attributable to W. P. Carey

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

$

78,724

 

 

 

$

151,934

 

 

 

$

82,856

 

Loss from discontinued operations, net of tax

 

(16,592

)

 

 

(12,855

)

 

 

(8,884

)

Net income

 

$

62,132

 

 

 

$

139,079

 

 

 

$

73,972

 

 

 

 

 

 

(a)

Income from equity investments in real estate and the Managed REITs includes income from our equity investments in real estate of $28.3 million, income from our ownership in the Managed REITs of $5.5 million and income from our GP interest in the Managed REITs of $28.6 million.

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 4

 

 


 

W. P. CAREY INC.

Reconciliation of Net Income to Funds from Operations – as Adjusted (AFFO) (Unaudited)

(in thousands, except share and per share amounts)

 

 

 

 

 

Three Months Ended December 31,

 

 

 

Years Ended December 31,

 

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

March 31, 2012

 

2012

 

2011

Real Estate Ownership

 

 

 

 

 

 

 

 

 

 

 

 

Net income from real estate ownership attributable to W. P. Carey(a)

 

$

5,507

 

$

1,927

 

$

28,367

 

$

9,094

 

$

44,895

 

$

86,280

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of real property

 

28,652

 

5,510

 

5,673

 

6,147

 

45,982

 

25,324

Impairment charges

 

10,700

 

5,534

 

1,003

 

5,725

 

22,962

 

10,473

Loss (gain) on sale of real estate, net

 

4,240

 

(59)

 

(1,686)

 

181

 

2,676

 

3,391

Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of real property

 

3,210

 

707

 

730

 

898

 

5,545

 

5,257

Impairment charges

 

-

 

-

 

-

 

-

 

-

 

1,090

Loss (gain) on sale of real estate, net

 

1

 

181

 

(15,557)

 

142

 

(15,233)

 

34

Proportionate share of adjustments for noncontrolling interests to arrive at FFO

 

(4,236)

 

(400)

 

(434)

 

(434)

 

(5,504)

 

(1,984)

Total adjustments:

 

42,567

 

11,473

 

(10,271)

 

12,659

 

56,428

 

43,585

FFO - as defined by NAREIT

 

48,074

 

13,400

 

18,096

 

21,753

 

101,323

 

129,865

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on change in control of interests(b)(c)

 

60

 

(20,794)

 

-

 

-

 

(20,734)

 

(27,859)

Gain on deconsolidation of a subsidiary

 

-

 

-

 

-

 

-

 

-

 

(1,008)

Other gains, net

 

(2)

 

-

 

-

 

-

 

(2)

 

25

Other depreciation, amortization and non-cash charges

 

(1,556)

 

(130)

 

235

 

(211)

 

(1,662)

 

176

Stock based compensation

 

211

 

-

 

-

 

-

 

211

 

220

Deferred tax expense

 

(644)

 

(917)

 

(532)

 

(652)

 

(2,745)

 

(3,184)

Realized gains on foreign currency, derivatives and other(d)

 

171

 

115

 

542

 

-

 

828

 

-

Amortization of deferred financing costs(d)

 

468

 

509

 

402

 

464

 

1,843

 

-

Straight-line and other rent adjustments

 

(2,248)

 

(200)

 

(883)

 

(1,115)

 

(4,446)

 

(4,255)

Above/below market rent intangible lease amortization, net(d)

 

7,534

 

51

 

111

 

-

 

7,696

 

-

Merger expense(e)

 

1,049

 

35,570

 

2,616

 

2,103

 

41,338

 

-

Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO:

 

 

 

 

 

 

 

 

 

 

 

 

Other depreciation, amortization and non-cash charges

 

624

 

-

 

-

 

-

 

624

 

-

Straight-line and other rent adjustments

 

(667)

 

(25)

 

(363)

 

(413)

 

(1,468)

 

(1,641)

Above/below market rent intangible lease amortization, net

 

166

 

-

 

(3)

 

-

 

163

 

-

AFFO adjustment for interests in CPA® REITs

 

11,971

 

10,650

 

7,687

 

6,926

 

37,234

 

10,137

Proportionate share of adjustments for noncontrolling interests to arrive at AFFO

 

(506)

 

(141)

 

(25)

 

(20)

 

(692)

 

272

Total adjustments:

 

16,631

 

24,688

 

9,787

 

7,082

 

58,188

 

(27,117)

AFFO - Real Estate Ownership

 

$

64,705

 

$

38,088

 

$

27,883

 

$

28,835

 

$

159,511

 

$

102,748

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 5

 

 


 

Investment Management

 

 

 

 

 

 

 

 

 

 

 

 

Net income from investment management attributable to W. P. Carey(a)

 

$

9,971

 

$

661

 

$

3,410

 

$

3,195

 

$

17,237

 

$

52,799

FFO - as defined by NAREIT

 

9,971

 

661

 

3,410

 

3,195

 

17,237

 

52,799

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization, deferred taxes and non-cash charges

 

226

 

247

 

230

 

258

 

961

 

3,791

Stock based compensation

 

6,281

 

9,805

 

4,495

 

5,260

 

25,841

 

17,496

Deferred tax expense

 

(2,625)

 

(15,207)

 

(8,459)

 

2,236

 

(24,055)

 

12,019

Realized gains on foreign currency, derivatives and other(d)

 

(55)

 

17

 

(23)

 

-

 

(61)

 

-

Amortization of deferred financing costs(d)

 

318

 

308

 

286

 

285

 

1,197

 

-

Total Adjustments

 

4,145

 

(4,830)

 

(3,471)

 

8,039

 

3,883

 

33,306

AFFO - Investment Management

 

$

14,116

 

$

(4,169)

 

$

(61)

 

$

11,234

 

$

21,120

 

$

86,105

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

FFO - as defined by NAREIT

 

$

58,045

 

$

14,061

 

$

21,506

 

$

24,948

 

$

118,560

 

$

182,664

FFO - as defined by NAREIT per share (diluted)

 

$

0.84

 

$

0.34

 

$

0.53

 

$

0.62

 

$

2.47

 

$

4.56

AFFO

 

$

78,821

 

$

33,919

 

$

27,822

 

$

40,069

 

$

180,631

 

$

188,853

AFFO per share (diluted)

 

$

1.13

 

$

0.82

 

$

0.68

 

$

0.99

 

$

3.76

 

$

4.71

Diluted weighted average shares outstanding

 

69,505,871

 

41,127,404

 

40,757,055

 

40,487,652

 

48,078,474

 

40,098,095

 

 

 

 

 

(a)

Effective April 1, 2012, we include cash distributions and deferred revenue received and earned from the operating partnerships of CPA®:16 – Global, CPA®:17 – Global and CWI in our Real Estate Ownership segment. Results of operations for the prior year periods have been reclassified to conform to the current period presentation.

(b)

Gain on change in control of interests for the year ended December 31, 2011 represents gain recognized on purchase of the remaining interests in two investments from CPA®:14, which we had previously accounted for under the equity method. In connection with purchasing these properties, we recognized a net gain of $27.9 million during the year ended December 31, 2011 to adjust the carrying value of our existing interests in these investments to their estimated fair values.

(c)

Gain on change in control of interests for the three months ended September 30, 2012 and the year ended December 31, 2012 represents a gain of $14.6 million recognized on our previously held interest in shares of CPA®:15 common stock, and a gain of $6.1 million recognized on the purchase of the remaining interests in five investments from CPA®:15, which we had previously accounted for under the equity method. We recognized a gain of $20.7 million to adjust the carrying value of our existing interests in these investments to their estimated fair values.

(d)

These adjustments were not significant prior to the Merger; therefore, they were not included in the calculation of AFFO in 2011.

(e)

For the three months ended September 30, 2012 and year ended December 31, 2012, includes current tax expense of $9.7 million relating to the conversion of CPA®:15 shares held by us before the Merger.

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 6

 

 


 

Non-GAAP Financial Disclosure – AFFO

 

Funds from Operations (“FFO”) is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income or loss (as computed in accordance with GAAP) excluding: depreciation and amortization expense from real estate assets, impairment charges on real estate, gains or losses from sales of depreciated real estate assets and extraordinary items; however, FFO related to assets held for sale, sold or otherwise transferred and included in the results of discontinued operations are included. These adjustments also incorporate the pro rata share of unconsolidated subsidiaries. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers. Although NAREIT has published this definition of FFO, companies often modify this definition as they seek to provide financial measures that meaningfully reflect their distinctive operations.

 

We modify the NAREIT computation of FFO to include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of intangibles, deferred income tax benefits and expenses, straight-line rents, stock compensation, gains or losses from extinguishment of debt and deconsolidation of subsidiaries and unrealized foreign currency exchange gains and losses. Additionally, we exclude expenses related to the Merger which are considered non-recurring and realized gain/losses on foreign exchange and derivatives which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income as they are not the primary drivers in our decision making process. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows, and we therefore use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.

 

We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 7

 

 


 

W. P. CAREY INC.

 

Reconciliation of GAAP Net Income to AFFO (Unaudited)

(in thousands)

 

 

 

Three Months Ended December 31, 2012

 

 

GAAP (a)

 

Add: Equity
Investments 
(b)

 

Less: Non-
Controlling
Interests 
(c)

 

WPC’s
Pro Rata
Share 
(d)

 

AFFO
Adjustments

 

AFFO

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenues (e)

 

$

74,970

 

$

10,473

 

$

(10,852)

 

$

74,591

 

$

3,993 (f)

 

$

78,584

Asset management revenue

 

9,578

 

-

 

(149)

 

9,429

 

-

 

9,429

Structuring revenue

 

28,779

 

-

 

(333)

 

28,446

 

-

 

28,446

Wholesaling revenue

 

8,036

 

-

 

-

 

8,036

 

-

 

8,036

Reimbursed costs from affiliates

 

39,146

 

-

 

(120)

 

39,026

 

-

 

39,026

Other real estate income

 

7,549

 

320

 

(2,379)

 

5,490

 

-

 

5,490

Self storage revenues

 

3,301

 

-

 

(1,972)

 

1,329

 

-

 

1,329

Hotel revenues

 

1,028

 

-

 

-

 

1,028

 

-

 

1,028

Reimbursed property expenses

 

3,068

 

168

 

(396)

 

2,840

 

-

 

2,840

Other property and tenant income

 

152

 

152

 

(11)

 

293

 

-

 

293

Total Revenues

 

168,058

 

10,793

 

(13,833)

 

165,018

 

3,993

 

169,011

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(36,490)

 

(101)

 

969

 

(35,622)

 

7,508

 

(28,114)

Reimbursable costs

 

(39,146)

 

-

 

5

 

(39,141)

 

-

 

(39,141)

Depreciation and amortization

 

(29,514)

 

(3,363)

 

4,244

 

(28,633)

 

27,283

 

(1,350)

Property expenses

 

(5,677)

 

(479)

 

848

 

(5,308)

 

-

 

(5,308)

Other real estate expenses

 

(2,321)

 

-

 

923

 

(1,398)

 

-

 

(1,398)

Impairment charges

 

(10,467)

 

-

 

-

 

(10,467)

 

10,467

 

-

Total Operating Expenses

 

(123,615)

 

(3,943)

 

6,989

 

(120,569)

 

45,258

 

(75,311)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

486

 

193

 

(158)

 

521

 

-

 

521

Income from equity investments in real estate and the Managed REITs

 

9,583

 

(3,549)

 

-

 

6,034

 

11,971

 

18,005

Joint ventures (g)

 

3,549

 

(3,549)

 

-

 

-

 

-

 

-

Income related to our ownership in the Managed REITs

 

(175)

 

-

 

-

 

(175)

 

9,960

 

9,785

Income related to our GPs - CPA 16 LLC and CPA 17 Ops

 

6,209

 

-

 

-

 

6,209

 

2,011

 

8,220

Gain on change of control of interests

 

(49)

 

-

 

-

 

(49)

 

49

 

-

Other (income) and expenses

 

1,376

 

(117)

 

(246)

 

1,013

 

(405)

 

608

Interest expense

 

(28,250)

 

(2,997)

 

4,944

 

(26,303)

 

786

 

(25,517)

Total Other Income and Expenses

 

(16,854)

 

(6,470)

 

4,540

 

(18,784)

 

12,401

 

(6,383)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations before Income Taxes

 

27,589

 

380

 

(2,304)

 

25,665

 

61,652

 

87,317

Provision for income taxes

 

(6,591)

 

(380)

 

127

 

(6,844)

 

(3,267)

 

(10,111)

Income from Continuing Operations

 

20,998

 

-

 

(2,177)

 

18,821

 

58,385

 

77,206

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations of discontinued properties

 

1,021

 

-

 

-

 

1,021

 

594 (h)

 

1,615

Loss on the sale of real estate

 

(4,131)

 

-

 

-

 

(4,131)

 

4,131

 

-

Impairment charges

 

(233)

 

-

 

-

 

(233)

 

233

 

-

Loss from Discontinued Operations, Net of Taxes

 

(3,343)

 

-

 

-

 

(3,343)

 

4,958

 

1,615

Net Income

 

17,655

 

-

 

(2,177)

 

15,478

 

63,343

 

78,821

Net loss attributable to noncontrolling interests

 

(1,990)

 

-

 

1,990

 

-

 

-

 

-

Net Loss attributable to redeemable noncontrolling interests

 

(187)

 

-

 

187

 

-

 

-

 

-

Income / AFFO Attributable to W. P. Carey

 

$

15,478

 

$

-

 

$

-

 

$

15,478

 

$

63,343

 

$

78,821

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 8

 


 

The following table presents the components of our General and Administrative Expenses

 

 

 

Three Months Ended December 31, 2012

 

 

GAAP (a)

 

Add: Equity
Investments 
(b)

 

Less: Non-
Controlling
Interests 
(c)

 

WPC’s
Pro Rata
Share 
(d)

 

AFFO
Adjustments

 

AFFO

General and Administrative

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

$

(26,458)

 

$

-

 

$

156

 

$

(26,302)

 

$

6,459 (i)

 

$

(19,843)

Business development expenses

 

(2,808)

 

(100)

 

20

 

(2,888)

 

1,049 (j)

 

(1,839)

Wholesaling related expenses

 

(6,913)

 

-

 

-

 

(6,913)

 

-

 

(6,913)

General and administrative professional fees

 

(2,822)

 

(1)

 

75

 

(2,748)

 

-

 

(2,748)

Reimbursable expenses from Managed REITs

 

4,533

 

-

 

-

 

4,533

 

-

 

4,533

Office expenses

 

(1,691)

 

-

 

716

 

(975)

 

-

 

(975)

Other general and administrative

 

(331)

 

-

 

2

 

(329)

 

-

 

(329)

Total General and Administrative

 

$

(36,490)

 

$

(101)

 

$

969

 

$

(35,622)

 

$

7,508

 

$

(28,114)

 

The following table presents the components of our Other Income and (Expenses)

 

 

 

Three Months Ended December 31, 2012

 

 

GAAP (a)

 

Add: Equity
Investments 
(b)

 

Less: Non-
Controlling
Interests 
(c)

 

WPC’s
Pro Rata
Share 
(d)

 

AFFO
Adjustments

 

AFFO

Other Income and (Expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Gain/Losses real estate

 

$

(109)

 

-

 

-

 

(109)

 

109

 

-

Gain/Losses foreign currency

 

1,106

 

(1)

 

(215)

 

890

 

(266)

 

624

Gain/Losses derivatives

 

370

 

-

 

(110)

 

260

 

(259)

 

1

Gain/Losses extinguishment

 

(10)

 

7

 

-

 

(3)

 

3

 

-

Other gain/losses

 

19

 

(123)

 

79

 

(25)

 

8

 

(17)

Total Other Income and (Expenses)

 

$

1,376

 

$

(117)

 

$

(246)

 

$

1,013

 

$

(405)

 

$

608

 

 

 

 

(a)

Consolidated amounts shown represent WPC’s income statement for the three months ended December 31, 2012.

(b)

Represents the break-out by line item of amounts recorded in Income from equity investments in real estate and the Managed REITs – Joint ventures.

(c)

Represents the break-out by line item of amounts recorded in Non-controlling interest and Redeemable non-controlling interest.

(d)

Represents our share in fully owned entities and co-owned entities.

(e)

Lease Revenues on a Pro Rata basis in this schedule reflect only revenues from Continuing Operations. Lease Revenues for Discontinued Operations for the three months ended December 31, 2012 were $0.7 million.

(f)

Represents adjustments for straight line and above/below market lease intangible amortization.

(g)

To calculate the Pro Rata Income Statement, Equity Investments under Joint Ventures have been re-classed to allocate their impact on each line item.

(h)

Represents Depreciation and Amortization related to Discontinued Operations.

(i)

Represents add-back of Stock Based Compensation Expense, less the share attributable to Non-controlling interests.

(j)

Represents Merger expenses included in G&A.

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 9

 


 

W. P. CAREY INC.

 

Reconciliation of GAAP Net Income to AFFO (Unaudited)

(in thousands)

 

 

 

 

Year Ended December 31, 2012

 

 

GAAP
Reported 
(a)

 

Add: Equity
Investments
(b)

 

Less: Non-
Controlling
Interests 
(c)

 

WPC’s
Pro Rata
Share 
(d)

 

AFFO
Adjustments

 

AFFO

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenues (e)

 

$

124,503

 

$

27,935

 

$

(12,113)

 

$

140,325

 

$

1,290

(f)

$

141,615

Asset management revenue

 

56,666

 

-

 

(854)

 

55,812

 

-

 

55,812

Structuring revenue

 

48,355

 

-

 

(446)

 

47,909

 

-

 

47,909

Wholesaling revenue

 

19,914

 

-

 

-

 

19,914

 

-

 

19,914

Reimbursed costs from affiliates

 

98,245

 

-

 

(510)

 

97,735

 

-

 

97,735

Other real estate income

 

26,312

 

1,052

 

(8,320)

 

19,044

 

-

 

19,044

Self storage revenue

 

12,951

 

-

 

(7,729)

 

5,222

 

-

 

5,222

Hotel revenues

 

3,766

 

-

 

-

 

3,766

 

-

 

3,766

Reimbursed property expenses

 

8,146

 

892

 

(582)

 

8,456

 

-

 

8,456

Other property and tenant income

 

1,449

 

160

 

(9)

 

1,600

 

-

 

1,600

Total Revenues

 

373,995

 

28,987

 

(22,243)

 

380,739

 

1,290

 

382,029

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(144,809)

 

(118)

 

4,822

 

(140,105)

 

57,381

 

(82,724)

Reimbursable costs

 

(98,245)

 

-

 

26

 

(98,219)

 

-

 

(98,219)

Depreciation and amortization

 

(48,790)

 

(5,704)

 

5,525

 

(48,969)

 

44,919

 

(4,050)

Property expenses

 

(13,041)

 

(1,574)

 

1,115

 

(13,500)

 

-

 

(13,500)

Other real estate expenses

 

(9,850)

 

-

 

3,672

 

(6,178)

 

-

 

(6,178)

Impairment charges

 

(10,467)

 

-

 

-

 

(10,467)

 

10,467

 

-

Total Operating Expenses

 

(325,202)

 

(7,396)

 

15,160

 

(317,438)

 

112,767

 

(204,671)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

1,396

 

260

 

(152)

 

1,504

 

-

 

1,504

Income from equity investments in real estate and the Managed REITs

 

62,392

 

(28,292)

 

-

 

34,100

 

37,234

 

71,334

Joint ventures (g)

 

28,292

 

(28,292)

 

-

 

-

 

-

 

-

Income related to our ownership in the Managed REITs

 

5,508

 

-

 

-

 

5,508

 

35,816

 

41,324

Income related to our GPs - CPA 16 LLC and CPA 17 Ops

 

28,592

 

-

 

-

 

28,592

 

1,418

 

30,010

Gain on change of control of interests

 

20,744

 

-

 

-

 

20,744

 

(20,744)

(h)

-

Other (income) and expenses

 

3,402

 

14,777

 

(371)

 

17,808

 

(17,631)

 

177

Interest expense

 

(50,573)

 

(7,104)

 

6,570

 

(51,107)

 

2,957

(i)

(48,150)

Total Other Income and Expenses

 

37,361

 

(20,359)

 

6,047

 

23,049

 

1,816

 

24,865

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations before Income Taxes

 

86,154

 

1,232

 

(1,036)

 

86,350

 

115,873

 

202,223

Provision for income taxes

 

(6,783)

 

(1,232)

 

389

 

(7,626)

 

(17,104)

(j)

(24,730)

Income from Continuing Operations

 

79,371

 

-

 

(647)

 

78,724

 

98,769

 

177,493

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations of discontinued properties

 

922

 

-

 

-

 

922

 

2,216

(k)

3,138

Loss on the sale of real estate

 

(5,019)

 

-

 

-

 

(5,019)

 

5,019

 

-

Impairment charges

 

(12,495)

 

-

 

-

 

(12,495)

 

12,495

 

-

Loss from Discontinued Operations, Net of Taxes

 

(16,592)

 

-

 

-

 

(16,592)

 

19,730

 

3,138

Net Income

 

62,779

 

-

 

(647)

 

62,132

 

118,499

 

180,631

Net loss attributable to noncontrolling interests

 

(607)

 

-

 

607

 

-

 

-

 

-

Net Loss attributable to redeemable noncontrolling interests

 

(40)

 

-

 

40

 

-

 

-

 

-

Income / AFFO Attributable to W. P. Carey

 

$

62,132

 

$

-

 

$

-

 

$

62,132

 

$

118,499

 

$

180,631

 

W. P. Carey Inc. 12/31/2012 Supplemental 8-K — 10