Exhibit 99.1
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Curt Ritter - 212-492-8989 Susan Hyde - 212-492-1151
critter@wpcarey.com shyde@wpcarey.com
Media Kit: www.wpcarey.com/MediaKit
W. P. CAREY ANNOUNCES RECORD THIRD QUARTER FINANCIAL RESULTS
EARNINGS INCREASE 143% FOLLOWING THE LIQUIDATION OF AFFILIATED REIT
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(R)). 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(R) 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(R) and
Corporate Property Associates 15 (CPA(R):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(R)
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(R), 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(R) 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: www.wpcarey.com
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.
(TABLES FOLLOW)
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.
###
W. P. CAREY & CO. LLC
CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS (Unaudited)
(in thousands)
Nine Months Ended September 30,
-------------------------------
2004 2003
---- ----
Cash flows from operating activities:
Net income $ 61,727 $ 44,294
Adjustments to reconcile net income to net cash
provided by continuing operating activities:
Income from discontinued operations, including gain on sale 3,693 965
Depreciation and amortization of intangible assets and deferred financing costs 13,864 13,938
Unrealized loss on foreign currency transactions (144) (133)
Minority interest in income 1,340 69
Straight-line rent adjustments and amortization of deferred income 944 569
Equity income in excess of distributions (457) (13)
Management income received in shares of affiliates (15,243) (13,669)
Costs paid by issuance of shares 124 160
Amortization of unearned compensation 2,947 2,662
Impairment charges and loan losses 12,098 272
Tax expense - share incentive plans 2,906 2,470
Deferred income tax provision 8,933 8,522
Increase in accrued taxes payable 20,901 4,456
Increase in structuring fees receivable (14,780) (11,365)
Deferred acquisition fees received 5,978 1,495
Net change in other operating assets and liabilities 1,134 (12,116)
--------- ---------
Net cash provided by continuing operations 105,965 42,576
Net cash provided by discontinued operations 1,995 1,433
--------- ---------
Net cash provided by operating activities 107,960 44,009
--------- ---------
Cash flows from investing activities
Distributions received from equity investments in excess of equity income 5,852 2,177
Contributions to equity investments -- (1,496)
Capital distributions from equity investments -- 6,582
Purchases of equity investments (115,522) --
Proceeds from sale of property and investments 4,430 20,422
Release of funds from escrow in connection with the sale of a property 7,185 --
Cash acquired on acquisition of subsidiary -- 1,300
Additional capital expenditures (1,498) (1,666)
Payment of deferred acquisition fees to affiliate (524) (524)
--------- ---------
Net cash (used in) provided by investing activities (100,077) 26,795
--------- ---------
Cash flows from financing activities:
Proceeds from credit facility 135,000 54,000
Prepayments of credit facility (77,000) (75,000)
Payments of mortgage principal (6,882) (6,448)
Prepayments of mortgage principal and note payable (9,962) (7,131)
Payment of financing costs (1,262) --
Distributions to minority interests (1,101) --
Dividends paid (48,614) (47,060)
Proceeds from issuance of shares 3,662 6,463
Retirement of shares (2,543) --
--------- ---------
Net cash used in financing activities (8,702) (75,176)
--------- ---------
Effect of exchange rate changes on cash (386) 115
--------- ---------
Net decrease in cash and cash equivalents (1,205) (4,257)
Cash and cash equivalents, beginning of period 24,359 21,304
--------- ---------
Cash and cash equivalents, end of period $ 23,154 $ 17,047
========= =========
W.P. CAREY & CO. LLC
FUNDS FROM OPERATIONS
(in thousands except per share amounts)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
2004 2003 2004 2003
-------- -------- --------- --------
Net income $ 35,154 $ 14,047 $ 61,727 $ 44,294
Gain on sale of real estate (12) (393) (12) (547)
Funds from operations of equity investees in excess
of equity income 1,815 1,034 4,909 3,005
Charge on extinguishment of debt -- 350 -- 350
Depreciation, amortization, deferred taxes,
stock compensation and other noncash charges 15,381 10,914 31,981 27,864
Funds from operations applicable to minority
investees in excess of minority income (184) (14) (468) (156)
Straight-line rents 330 273 931 629
Impairment charges and loan losses 7,500 1,110 15,400 2,540
-------- -------- --------- --------
Funds from operations $ 59,984 $ 27,321 $ 114,468 $ 77,979
======== ======== ========= ========
FUNDS FROM OPERATIONS PER SHARE -
BASIC $ 1.60 $ 0.75 $ 3.06 $ 2.14
======== ======== ======== ========
DILUTED $ 1.54 $ 0.71 $ 2.95 $ 2.07
======== ======== ======== ========
Funds from operations is calculated as net income, excluding gains (or losses)
from debt extinguishment and sales of property, plus certain noncash items
(primarily real estate depreciation, amortization of intangible assets,
impairments, stock compensation and deferred taxes) and after adjustments for
unconsolidated partnerships and joint ventures. The Company's calculation of
funds from operations may differ from the calculation of similarly named
measures by other companies and may not be comparable to such measures. Funds
from operations is a supplemental measure of performance and does not represent
net income or cash flows generated from operating activities in accordance with
generally accepted accounting principles. It should not be considered an
alternative to net income, as an indication of the Company's operating
performance or to cash flows as a measure of liquidity or an indicator of the
Company's ability to fund its cash needs.
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W.P. CAREY & CO. LLC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except share and per share amounts)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
Management income from affiliates $ 39,368 $ 26,197 $ 89,156 $ 69,168
Incentive and subordinated disposition fees 42,095 -- 42,095 --
Rental income 11,658 11,003 33,245 33,184
Interest income from direct financing leases 5,334 5,192 15,876 15,483
Other operating income 868 594 5,347 4,552
Revenue of other business operations (52) 166 4,060 766
------------ ------------ ------------ ------------
99,271 43,152 189,779 123,153
------------ ------------ ------------ ------------
Expenses:
Depreciation 2,799 2,647 8,223 7,780
Amortization 4,486 1,693 7,871 5,603
General and administrative 14,563 12,102 39,684 34,983
Property expenses 1,006 1,445 4,477 4,389
Operating expenses of other business operations 1,446 -- 4,761 --
Impairment charges and loan losses 6,500 -- 9,300 272
------------ ------------ ------------ ------------
30,800 17,887 74,316 53,027
------------ ------------ ------------ ------------
Income from continuing operations
before other interest income, minority
interest, equity income, gains,
interest expense and income taxes 68,471 25,265 115,463 70,126
Other interest income 828 654 2,221 1,861
Minority interest in (income) loss (1,175) 22 (1,340) (69)
Income from equity investments 1,254 1,099 3,885 3,171
Gain on sale of investments and
foreign currency transactions 163 97 569 593
Interest expense (3,664) (3,646) (10,632) (11,378)
------------ ------------ ------------ ------------
Income from continuing operations before
income taxes 65,877 23,491 110,166 64,304
Provision for income taxes (32,610) (8,717) (44,746) (19,045)
------------ ------------ ------------ ------------
Income from continuing operations 33,267 14,774 65,420 45,259
------------ ------------ ------------ ------------
Discontinued operations:
Income from operations of discontinued properties 2,875 280 2,395 1,318
Gain on the sale of real estate 12 393 12 547
Impairment charges on properties held for sale and
extinguishment of debt (1,000) (1,400) (6,100) (2,830)
------------ ------------ ------------ ------------
Income (loss) from discontinued operations 1,887 (727) (3,693) (965)
------------ ------------ ------------ ------------
Net income $ 35,154 $ 14,047 $ 61,727 $ 44,294
============ ============ ============ ============
Basic earnings per share:
Earnings from continuing operations $ 0.89 $ 0.40 $ 1.75 $ 1.24
Income (loss) from discontinued operations 0.05 (0.02) (0.10) (0.03)
------------ ------------ ------------ ------------
Basic earnings per share $ 0.94 $ 0.38 $ 1.65 $ 1.21
============ ============ ============ ============
Diluted earnings per share:
Earnings from continuing operations $ 0.85 $ 0.39 $ 1.69 $ 1.20
Income (loss) from discontinued operations 0.05 (0.02) (0.10) (0.03)
------------ ------------ ------------ ------------
Diluted earnings per share $ 0.90 $ 0.37 $ 1.59 $ 1.17
============ ============ ============ ============
Weighted average shares outstanding:
Basic 37,472,823 36,650,893 37,398,280 36,511,621
============ ============ ============ ============
Diluted 38,929,696 38,239,815 38,761,745 37,728,358
============ ============ ============ ============
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