================================================================================
W. P. CAREY REPORTS FIRST QUARTER 2005 RESULTS, MANAGEMENT CHANGES AND RESTATED
2004 RESULTS May 05, 2005
WEBCAST o WPC First Quarter Financial Results o TRANSCRIPT
NEW YORK, NY, May 5, 2005 - Investment firm W. P. Carey & Co. LLC (NYSE: WPC)
today reported financial results for the three-month period ended March 31,
2005.
QUARTERLY RESULTS
Diluted earnings per share (EPS) for the three-month period were $0.15, as
compared to $0.28 for the same period in 2004. Net income for the
three-month period was $5.8 million, as compared to $11.1 million for the
similar period in 2004. The declines in EPS and net income were
predominantly due to impairment charges of $9.7 million, reflecting
changes in estimated fair market values on three properties as reported in
the Company's Form 8-K filing of March 30, 2005.
Income from Continuing Operations was $14.5 million for the three-month
period as compared to $10.3 million during the same period in 2004. This
increase was due in large part to an increase in management and
performance fees from the Company's affiliates and an increase in rental
income during the quarter.
Total revenues for the three-month period increased to $44.0 million, as
compared to $33.7 million for the same period in 2004. This was due in
large part to an increase of $8.9 million in management income from
affiliates, as a result of an increase in investment activity during the
quarter, as well as an increase in rental income of approximately $2.7
million during the quarter.
Funds from Operations (FFO), as per the attached schedule, which is
calculated consistently with the Company's prior FFO reporting, increased
for the three-month period to $0.61 per diluted share, or $23.9 million,
as compared to $0.55 per diluted share, or $21.4 million for the
comparable period in 2004. This calculation excludes impairment charges.
Cash Flows from Operating Activities for the three-month period were $27.5
million, as compared to $15.6 million during the same period in 2004. This
increase was largely due to an increase in structuring fees, rental income
and the receipt of deferred structuring fees and interest during the
quarter.
During the first quarter 2005, the Company, on behalf of its CPA(R) series
of income generating real estate funds, completed $367 million in
investments, as compared to $68 million during the same period in 2004.
The Company sold three vacant buildings, totaling 260,000 square feet and
separately re-leased 200,000 square feet of vacant space.
The Board of Directors raised the cash dividend to $.444 per common share,
which was paid on April 15, 2005 to shareholders of record on March 31,
2005.
MANAGEMENT CHANGES
The Board of Directors announced the election of Gordon F. DuGan as Chief
Executive Officer, Thomas E. Zacharias as Chief Operating Officer and John
Miller as Co-Chief Investment Officer. In connection with an ongoing SEC
investigation of payments to broker-dealers, previously reported in the
Company's 10-K, the Board has accepted the resignation of John J. Park as Chief
Financial Officer and elected Claude Fernandez, who has been the Company's
Principal Accounting Officer, as Acting CFO. A search is underway for a new CFO.
Mr. Park will remain with the Company as Managing Director - Strategic Planning.
RESTATED 2004 RESULTS
The Company has determined that earnings for 2004 were understated by
approximately $2 million, or $0.05 per share, as a result of a clerical
error in the calculation of deferred taxes for the fourth quarter of 2004.
This error was identified earlier this week. The change will not affect
2004 Funds from Operations, as previously reported by the Company. The
Company expects to issue restated financial statements that will reflect
this increase in income, and is re-evaluating its control procedures for
the calculation of deferred taxes and assessing the impact of this on its
internal controls.
Gordon F. DuGan, President and Chief Executive Officer of W. P. Carey & Co. LLC,
said, "We were extremely active this quarter in completing $367 million in new
investments on behalf of our affiliates, as compared to $68 million in 2004. As
a result of these new investments, our owned and managed assets grew to more
than $7.1 billion. Our income from continuing operations increased
year-over-year to $14.5 million, from $10.3 million in 2004, due to an increase
in management income from our affiliates and an increase in rental revenue.
"On the other hand, impairments this quarter significantly reduced our net
income," Mr. DuGan continued. "In addition, our latest offering, CPA(R):16 -
Global, has been providing us with lower incremental revenue than our other
funds due to the fact that its performance threshold has not yet been achieved.
Furthermore, we continue to witness a very competitive real estate and corporate
finance environment, which has resulted in a large amount of capital seeking a
more limited set of opportunities, generally speaking.
"At the same time, the sale-leaseback market remains active and we continue to
compete based on our ability to complete complex transactions. As we continue
2005, we are pleased that W. P. Carey is conservatively capitalized with a
strong balance sheet containing a debt to total market capitalization ratio of
approximately 24 percent. We thank our investors and tenant companies for their
continued confidence and support and look forward to continuing our 32-year
tradition of success." Mr. DuGan concluded.
UPCOMING EVENT
The Board of Directors announced that the 2005 Annual Shareholder Meeting
will take place on Wednesday, June 8th at 2:00 PM at the Waldorf=Astoria
Hotel in New York City. All shareholders are invited to attend. In
addition, a live webcast of the event will be available on the Company's
website and will be archived on the website following the meeting.
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to register for call.
TIME: Thursday, May 5, 2:00 PM EDT
CALL-IN NUMBER: 1-800-310-6649
(International) 719-457-2693
WEBCAST: Click Here
REPLAY: Available after 4:00 PM. Call 1-888-203-1112
(International) 719-457-0820 with the access code 4427453
W. P. CAREY & CO. LLC
Founded in 1973, W. P. Carey & Co. is a leading global investment firm that has
long served as the pre-eminent provider of sale-leaseback financing to
corporations and private equity firms in the United States and Europe. It owns a
portfolio of net-leased real estate assets and provides asset management
services to the Corporate Property Associates (CPA(R)) series of
income-generating real estate investment funds. The Company currently owns or
manages more than 650 commercial and industrial properties worldwide,
representing approximately 90 million square feet and valued at approximately $7
billion.
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.
2