NEW YORK, July 30, 2021 /PRNewswire/ -- W. P. Carey
Inc. (NYSE: WPC) (W. P. Carey or the Company), a net lease real
estate investment trust, today reported its financial results for
the second quarter ended June 30, 2021.
Financial
Highlights
|
|
2021 Second
Quarter
|
Net income
attributable to W. P. Carey (millions)
|
$120.2
|
|
Diluted earnings
per share
|
$0.67
|
|
Net income from
Real Estate attributable to W. P. Carey (millions)
|
$114.7
|
|
Diluted earnings
per share from Real Estate
|
$0.64
|
|
|
|
AFFO
(millions)
|
$228.7
|
|
AFFO per diluted
share
|
$1.27
|
|
Real Estate
segment AFFO (millions)
|
$222.4
|
|
Real Estate
segment AFFO per diluted share
|
$1.23
|
|
- 2021 AFFO guidance range raised and narrowed to between
$4.94 and $5.02 per diluted share, including Real Estate
AFFO of between $4.82 and
$4.90 per diluted share
- Quarterly cash dividend raised to $1.05 per share, equivalent to an annualized
dividend rate of $4.20 per
share
Real Estate Portfolio
- Investment volume of $780.0
million for the second quarter, bringing total investment
volume for the first half of 2021 to $993.7
million
- Active capital investments and commitments of $174.4 million outstanding at quarter end,
including $122.0 million scheduled to
be completed during the second half of 2021
- Gross disposition proceeds of $86.0
million during the second quarter, bringing total
dispositions for the first half of 2021 to $99.7 million
- Overall collection rate of 99% for 2021 second quarter rent
due
- Portfolio occupancy of 98.0%
- Weighted-average lease term increased to 10.8 years
Balance Sheet and Capitalization
- Completed an underwritten public offering under which
approximately 6 million shares of common stock were sold through
forward sale agreements at a gross offering price of $75.30 per share
- During the second quarter the Company:
-
- Settled forward sale agreements for total net proceeds of
approximately $310 million
- Utilized its ATM program to raise approximately $162 million in net proceeds
MANAGEMENT COMMENTARY
"Our accelerated pace of deal closings during the second quarter
brought investment volume for the first half of the year to
$1 billion, driving AFFO growth and
putting us on a trajectory to generate record annual deal volume,"
said Jason Fox, Chief Executive
Officer of W. P. Carey. "Supported by an active deal pipeline and a
favorable cost of capital, we're confident in our ability to
maintain a strong pace of investments in the second half of the
year, as our raised guidance reflects. Over the long term, while we
remain focused on acquisitions as the primary driver of sustainable
growth, we believe we're uniquely positioned for inflation to
create additional growth, given the proportion of our portfolio
with rent escalations tied to CPI."
QUARTERLY FINANCIAL RESULTS
Revenues
- Total Company: Revenues, including reimbursable costs,
for the 2021 second quarter totaled $319.7
million, up 10.1% from $290.5
million for the 2020 second quarter.
- Real Estate: Real Estate revenues, including
reimbursable costs, for the 2021 second quarter were $314.8 million, up 11.0% from $283.6 million for the 2020 second quarter, due
primarily to higher lease revenues resulting from net acquisitions,
a stronger euro relative to the U.S. dollar, and the positive
impact on rent collections as businesses recover from the initial
effects of the COVID-19 pandemic. Lease termination and other
revenues increased primarily due to higher lease-related
settlements. Higher operating property revenues reflected increased
occupancy at the Company's remaining hotel operating property as
its business recovers from the impact of the COVID-19 pandemic.
- Investment Management: Investment Management revenues,
including reimbursable costs, for the 2021 second quarter were
$4.9 million, down 29.0% from
$6.9 million for the 2020 second
quarter, due primarily to lower asset management revenues and
reimbursable costs from affiliates resulting from the management
internalization by Carey Watermark Investors Incorporated (CWI 1)
and Carey Watermark Investors 2 Incorporated (CWI 2) completed
during the 2020 second quarter.
Net Income Attributable to W. P. Carey
- Net income attributable to W. P. Carey for the 2021 second
quarter was $120.2 million, up 14.2%
from $105.3 million for the 2020
second quarter. Net income from Real Estate attributable to W. P.
Carey was $114.7 million, which
increased due primarily to the impact of net acquisitions, a higher
aggregate gain on sale of real estate, the positive impact on rent
collections as businesses recover from the initial effects of the
COVID-19 pandemic and lower interest expense. Net income from
Investment Management attributable to W. P. Carey was $5.6 million, which decreased due primarily to a
non-cash net gain of $33.0 million
recognized within earnings from equity method investments during
the prior year period upon the redemption of special general
partner interests in CWI 1 and CWI 2 in connection with the
management internalization by CWI 1 and CWI 2, as well as the
cessation of Investment Management revenues previously earned from
CWI 1 and CWI 2.
Adjusted Funds from Operations (AFFO)
- AFFO for the 2021 second quarter was $1.27 per diluted share, up 11.4% from
$1.14 per diluted share for the 2020
second quarter. The Real Estate segment generated AFFO (Real Estate
AFFO) of $1.23 per diluted share,
primarily reflecting higher lease revenues resulting from net
investment activity, the positive impact on rent collections as
businesses recover from the initial effects of the COVID-19
pandemic, higher lease termination income and other revenues, and
lower interest expense.
Note: Further information concerning AFFO and Real Estate
AFFO, which are both non-GAAP supplemental performance metrics, is
presented in the accompanying tables and related notes.
Dividend
- As previously announced, on June 17,
2021 the Company's Board of Directors declared a quarterly
cash dividend of $1.05 per share,
equivalent to an annualized dividend rate of $4.20 per share. The dividend was paid on
July 15, 2021 to stockholders of
record as of June 30, 2021.
AFFO GUIDANCE
- The Company has raised and narrowed its guidance range for the
2021 full year and currently expects to report total AFFO of
between $4.94 and $5.02 per diluted share, including Real Estate
AFFO of between $4.82 and
$4.90 per diluted share, due
primarily to the positive impact on rent collections as businesses
recover from the initial effects of the COVID-19 pandemic and
increased expectations for full year investment volume, and is
based on the following key assumptions:
(i) investments for the Company's Real Estate
portfolio of between $1.5 billion and
$2.0 billion, which has been revised
higher;
(ii) dispositions from the Company's Real Estate portfolio
of between $150 million and
$250 million, which has been revised
lower; and
(iii) total general and administrative expenses of between
$82 million and $84 million, which has been revised higher.
Note: The Company does not provide guidance on net income.
The Company only provides guidance on total AFFO (and Real Estate
AFFO) and does not provide a reconciliation of this forward-looking
non-GAAP guidance to net income due to the inherent difficulty in
quantifying certain items necessary to provide such reconciliation
as a result of their unknown effect, timing and potential
significance. Examples of such items include impairments of assets,
gains and losses from sales of assets, and depreciation and
amortization from new acquisitions.
REAL ESTATE
Investments
- During the 2021 second quarter, the Company completed
investments totaling $780.0 million,
comprising 11 acquisitions totaling $687.9
million, the completion of one capital investment at a cost
of $7.2 million and the $84.9 million initial funding of a construction
loan, bringing total investment volume for the six months ended
June 30, 2021 to $993.7 million.
- As of June 30, 2021, the Company
had six capital investments and commitments outstanding for an
expected total investment of approximately $174.4 million, of which three investments and
commitments totaling $122.0 million
are currently scheduled to be completed during 2021.
Dividends Received
- During the 2021 second quarter, the Company received a
$3.3 million cash dividend from its
investment in preferred shares of Watermark Lodging Trust, the
surviving entity from the CWI lodging funds it previously managed,
reflecting amounts due for the prior four quarters.
Dispositions
- During the 2021 second quarter, the Company disposed of ten
properties for gross proceeds of $86.0
million, bringing total disposition proceeds for the six
months ended June 30, 2021 to
$99.7 million.
COVID-19 Update on Rent Collections
- The Company received 99% of contractual base rent that was due
in the 2021 second quarter.
Composition
- As of June 30, 2021, the Company's net lease portfolio
consisted of 1,266 properties, comprising 150 million square
feet leased to 356 tenants, with a weighted-average lease term
of 10.8 years and an occupancy rate of 98.0%. In addition, the
Company owned 19 self-storage operating properties and one hotel
operating property, totaling approximately 1.4 million square
feet.
BALANCE SHEET AND CAPITALIZATION
"At-The-Market" (ATM) Program
- During the 2021 second quarter, the Company issued 2,205,509
shares of common stock under its ATM program at a weighted-average
price of $74.56 per share, for net
proceeds of approximately $162
million.
- This activity brought issuances under the Company's ATM program
during the six months ended June 30,
2021 to 4,225,624 shares of common stock at a
weighted-average price of $72.50 per
share, for net proceeds of approximately $303 million.
Forward Equity Offerings
- As previously announced, on June 7,
2021, the Company completed an underwritten public offering
of an aggregate of 6,037,500 shares of common stock under forward
sale agreements (which included the full exercise of the
underwriters' option to purchase additional shares) at a gross
offering price of $75.30 per share,
which was sold on a forward basis at an initial forward sale price
of $74.51 per share, for gross
proceeds of approximately $455
million.
- During the 2021 second quarter, the Company settled a total of
4,523,209 shares of common stock under equity forward agreements
for total net proceeds of approximately $310
million, issuing the remaining 2,510,709 shares available
under the forward sale agreements entered into during the 2020
second quarter, for net proceeds of approximately $160 million, and 2,012,500 shares available
under the forward sale agreements entered into during the 2021
second quarter, for net proceeds of approximately $150 million.
- As of June 30, 2021, the Company
had the ability to settle a remaining 4,025,000 shares under the
2021 forward sale agreements by December 7,
2022, for anticipated net proceeds of approximately
$296 million.
*
* *
* *
Supplemental Information
The Company has provided supplemental unaudited financial and
operating information regarding the 2021 second quarter and
certain prior quarters, including a description of non-GAAP
financial measures and reconciliations to GAAP measures, in a
Current Report on Form 8-K filed with the Securities and Exchange
Commission (SEC) on July 30, 2021, and made available on the
Company's website at ir.wpcarey.com/investor-relations.
*
*
* * *
Live Conference Call and Audio Webcast Scheduled for
10:00 a.m. Eastern Time
Please dial in at least 10 minutes prior to the start
time.
Date/Time: Friday, July 30, 2021 at
10:00 a.m. Eastern Time
Call-in Number: 1 (877) 465-1289 (U.S.) or +1 (201) 689-8762
(international)
Live Audio Webcast and Replay:
www.wpcarey.com/earnings
*
* *
* *
W. P. Carey Inc.
W. P. Carey ranks among the largest net lease REITs with an
enterprise value of approximately $21
billion and a diversified portfolio of
operationally-critical commercial real estate that includes 1,266
net lease properties covering approximately 150 million square feet
as of June 30, 2021. For nearly five decades, the company has
invested in high-quality single-tenant industrial, warehouse,
office, retail and self-storage properties subject to long-term net
leases with built-in rent escalators. Its portfolio is located
primarily in the U.S. and Northern and Western Europe and is well-diversified by
tenant, property type, geographic location and tenant
industry.
www.wpcarey.com
*
* *
* *
Cautionary Statement Concerning Forward-Looking Statements
and COVID-19 Update on Rent Collections
Certain of the matters discussed in this communication
constitute forward-looking statements within the meaning of the
Securities Act of 1933 and the Exchange Act of 1934, both as
amended by the Private Securities Litigation Reform Act of
1995. The forward-looking statements include, among other
things, statements regarding the intent, belief or expectations of
W. P. Carey and can be identified by the use of words
such as "may," "will," "should," "would," "assume," "outlook,"
"seek," "plan," "believe," "expect," "anticipate," "intend,"
"estimate," "forecast" and other comparable terms. These
forward-looking statements include, but are not limited to,
statements made by Mr. Fox regarding our annual deal volume and
pace of investments, as well as the potential impact for inflation
to create additional growth over the long term. These statements
are based on the current expectations of our management and it is
important to note that our actual results could be materially
different from those projected in such forward-looking statements.
There are a number of risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements. Other unknown or unpredictable risks or
uncertainties, like the risks related to the effects of pandemics
and global outbreaks of contagious diseases or the fear of such
outbreaks (such as the current COVID-19 pandemic) and those
additional risk factors discussed in reports that we have filed
with the SEC could also have material adverse effects on our future
results, performance or achievements. Discussions of some of these
other important factors and assumptions are contained in
W. P. Carey's filings with the SEC and are available at
the SEC's website at http://www.sec.gov, including Part I,
Item 1A. Risk Factors in W. P. Carey's Annual
Report on Form 10-K for the year ended December 31, 2020.
In light of these risks, uncertainties, assumptions and factors,
the forward-looking events discussed in this communication may not
occur. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
communication, unless noted otherwise. Except as required
under the federal securities laws and the rules and regulations of
the SEC, W. P. Carey does not undertake any obligation to
release publicly any revisions to the forward-looking statements to
reflect events or circumstances after the date of this
communication or to reflect the occurrence of unanticipated
events.
In addition, given the significant uncertainty regarding the
duration and severity of the impact of the COVID-19 pandemic, the
Company is unable to predict its tenants' continued ability to pay
rent. Therefore, information provided regarding historical rent
collections should not serve as an indication of expected future
rent collections.
*
* *
* *
W. P. CAREY
INC.
|
Consolidated
Balance Sheets (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Investments in real
estate:
|
|
|
|
Land, buildings and
improvements (a)
|
$
|
11,621,204
|
|
|
$
|
10,939,619
|
|
Net investments in
direct financing leases
|
657,360
|
|
|
711,974
|
|
In-place lease
intangible assets and other
|
2,405,433
|
|
|
2,301,174
|
|
Above-market rent
intangible assets
|
868,970
|
|
|
881,159
|
|
Investments in real
estate
|
15,552,967
|
|
|
14,833,926
|
|
Accumulated
depreciation and amortization (b)
|
(2,699,085)
|
|
|
(2,490,087)
|
|
Assets held for sale,
net (c)
|
5,682
|
|
|
18,590
|
|
Net investments in
real estate
|
12,859,564
|
|
|
12,362,429
|
|
Equity method
investments (d)
|
351,865
|
|
|
283,446
|
|
Cash and cash
equivalents
|
164,515
|
|
|
248,662
|
|
Due from
affiliates
|
17,003
|
|
|
26,257
|
|
Other assets,
net
|
931,924
|
|
|
876,024
|
|
Goodwill
|
907,295
|
|
|
910,818
|
|
Total
assets
|
$
|
15,232,166
|
|
|
$
|
14,707,636
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Debt:
|
|
|
|
Senior unsecured
notes, net
|
$
|
5,493,556
|
|
|
$
|
5,146,192
|
|
Unsecured term loans,
net
|
321,392
|
|
|
321,971
|
|
Unsecured revolving
credit facility
|
276,121
|
|
|
82,281
|
|
Non-recourse
mortgages, net
|
724,778
|
|
|
1,145,554
|
|
Debt, net
|
6,815,847
|
|
|
6,695,998
|
|
Accounts payable,
accrued expenses and other liabilities
|
571,049
|
|
|
603,663
|
|
Below-market rent and
other intangible liabilities, net
|
197,067
|
|
|
197,248
|
|
Deferred income
taxes
|
151,112
|
|
|
145,844
|
|
Dividends
payable
|
196,324
|
|
|
186,514
|
|
Total
liabilities
|
7,931,399
|
|
|
7,829,267
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 50,000,000 shares authorized; none
issued
|
—
|
|
|
—
|
|
Common stock, $0.001
par value, 450,000,000 shares authorized; 184,253,151 and
175,401,757 shares,
respectively, issued and outstanding
|
184
|
|
|
175
|
|
Additional paid-in
capital
|
9,542,171
|
|
|
8,925,365
|
|
Distributions in
excess of accumulated earnings
|
(2,063,109)
|
|
|
(1,850,935)
|
|
Deferred compensation
obligation
|
49,815
|
|
|
42,014
|
|
Accumulated other
comprehensive loss
|
(229,960)
|
|
|
(239,906)
|
|
Total stockholders'
equity
|
7,299,101
|
|
|
6,876,713
|
|
Noncontrolling
interests
|
1,666
|
|
|
1,656
|
|
Total
equity
|
7,300,767
|
|
|
6,878,369
|
|
Total liabilities
and equity
|
$
|
15,232,166
|
|
|
$
|
14,707,636
|
|
|
________
|
(a)
|
Includes $83.6
million and $83.5 million of amounts attributable to operating
properties as of June 30, 2021 and December 31, 2020,
respectively.
|
(b)
|
Includes $1.3
billion and $1.2 billion of accumulated depreciation on buildings
and improvements as of June 30, 2021 and December 31,
2020, respectively, and $1.4 billion and $1.3 billion of
accumulated amortization on lease intangibles as of June 30,
2021 and December 31, 2020, respectively.
|
(c)
|
At June 30,
2021, we had one property classified as Assets held for sale, net,
which was sold in July 2021. At December 31, 2020, we had
four properties classified as Assets held for sale, net, all of
which were sold in 2021.
|
(d)
|
Our equity method
investments in real estate totaled $289.9 million and $226.9
million as of June 30, 2021 and December 31, 2020,
respectively. Our equity method investments in the Managed Programs
totaled $61.9 million and $56.6 million as of June 30, 2021
and December 31, 2020, respectively.
|
W. P. CAREY
INC.
|
Quarterly
Consolidated Statements of Income (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
Revenues
|
|
|
|
|
|
Real
Estate:
|
|
|
|
|
|
Lease
revenues
|
$
|
305,310
|
|
|
$
|
301,765
|
|
|
$
|
280,303
|
|
Lease
termination income and other
|
6,235
|
|
|
2,227
|
|
|
1,917
|
|
Operating
property revenues
|
3,245
|
|
|
2,179
|
|
|
1,427
|
|
|
314,790
|
|
|
306,171
|
|
|
283,647
|
|
Investment
Management:
|
|
|
|
|
|
Asset
management and other revenue
|
3,966
|
|
|
3,954
|
|
|
4,472
|
|
Reimbursable
costs from affiliates
|
968
|
|
|
1,041
|
|
|
2,411
|
|
|
4,934
|
|
|
4,995
|
|
|
6,883
|
|
|
319,724
|
|
|
311,166
|
|
|
290,530
|
|
Operating
Expenses
|
|
|
|
|
|
Depreciation and
amortization
|
114,348
|
|
|
110,322
|
|
|
107,477
|
|
General and
administrative
|
20,464
|
|
|
22,083
|
|
|
17,472
|
|
Reimbursable tenant
costs
|
15,092
|
|
|
15,758
|
|
|
13,796
|
|
Property expenses,
excluding reimbursable tenant costs
|
11,815
|
|
|
10,883
|
|
|
11,651
|
|
Stock-based
compensation expense
|
9,048
|
|
|
5,381
|
|
|
2,918
|
|
Merger and other
expenses
|
(2,599)
|
|
|
(476)
|
|
|
1,074
|
|
Operating property
expenses
|
2,049
|
|
|
1,911
|
|
|
1,388
|
|
Reimbursable costs
from affiliates
|
968
|
|
|
1,041
|
|
|
2,411
|
|
Subadvisor
fees
|
—
|
|
|
—
|
|
|
192
|
|
|
171,185
|
|
|
166,903
|
|
|
158,379
|
|
Other Income and
Expenses
|
|
|
|
|
|
Interest
expense
|
(49,252)
|
|
|
(51,640)
|
|
|
(52,182)
|
|
Gain on sale of real
estate, net
|
19,840
|
|
|
9,372
|
|
|
—
|
|
Other gains and
(losses) (a)
|
7,545
|
|
|
(41,188)
|
|
|
4,259
|
|
Non-operating income
(b)
|
3,065
|
|
|
6,356
|
|
|
4,588
|
|
(Losses) earnings from
equity method investments (c)
|
(156)
|
|
|
(9,733)
|
|
|
33,983
|
|
|
(18,958)
|
|
|
(86,833)
|
|
|
(9,352)
|
|
Income before income
taxes
|
129,581
|
|
|
57,430
|
|
|
122,799
|
|
Provision for income
taxes
|
(9,298)
|
|
|
(5,789)
|
|
|
(7,595)
|
|
Net
Income
|
120,283
|
|
|
51,641
|
|
|
115,204
|
|
Net income
attributable to noncontrolling interests (c)
|
(38)
|
|
|
(7)
|
|
|
(9,904)
|
|
Net Income
Attributable to W. P. Carey
|
$
|
120,245
|
|
|
$
|
51,634
|
|
|
$
|
105,300
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
0.67
|
|
|
$
|
0.29
|
|
|
$
|
0.61
|
|
Diluted Earnings
Per Share
|
$
|
0.67
|
|
|
$
|
0.29
|
|
|
$
|
0.61
|
|
Weighted-Average
Shares Outstanding
|
|
|
|
|
|
Basic
|
180,099,370
|
|
|
176,640,861
|
|
|
173,401,749
|
|
Diluted
|
180,668,732
|
|
|
176,965,510
|
|
|
173,472,755
|
|
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
|
1.050
|
|
|
$
|
1.048
|
|
|
$
|
1.042
|
|
W. P. CAREY
INC.
|
Year-to-Date
Consolidated Statements of Income (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
Real
Estate:
|
|
|
|
Lease
revenues
|
$
|
607,075
|
|
|
$
|
562,413
|
|
Lease
termination income and other
|
8,462
|
|
|
8,426
|
|
Operating
property revenues
|
5,424
|
|
|
7,394
|
|
|
620,961
|
|
|
578,233
|
|
Investment
Management:
|
|
|
|
Asset
management and other revenue
|
7,920
|
|
|
14,855
|
|
Reimbursable
costs from affiliates
|
2,009
|
|
|
6,441
|
|
|
9,929
|
|
|
21,296
|
|
|
630,890
|
|
|
599,529
|
|
Operating
Expenses
|
|
|
|
Depreciation and
amortization
|
224,670
|
|
|
223,671
|
|
General and
administrative
|
42,547
|
|
|
38,217
|
|
Reimbursable tenant
costs
|
30,850
|
|
|
26,971
|
|
Property expenses,
excluding reimbursable tenant costs
|
22,698
|
|
|
21,726
|
|
Stock-based
compensation expense
|
14,429
|
|
|
5,579
|
|
Operating property
expenses
|
3,960
|
|
|
6,611
|
|
Merger and other
expenses
|
(3,075)
|
|
|
1,261
|
|
Reimbursable costs
from affiliates
|
2,009
|
|
|
6,441
|
|
Impairment
charges
|
—
|
|
|
19,420
|
|
Subadvisor
fees
|
—
|
|
|
1,469
|
|
|
338,088
|
|
|
351,366
|
|
Other Income and
Expenses
|
|
|
|
Interest
expense
|
(100,892)
|
|
|
(104,722)
|
|
Other gains and
(losses)
|
(33,643)
|
|
|
(5,556)
|
|
Gain on sale of real
estate, net
|
29,212
|
|
|
11,751
|
|
Losses from equity
method investments (c)
|
(9,889)
|
|
|
(11,807)
|
|
Non-operating
income
|
9,421
|
|
|
9,980
|
|
|
(105,791)
|
|
|
(100,354)
|
|
Income before income
taxes
|
187,011
|
|
|
147,809
|
|
(Provision for)
benefit from income taxes
|
(15,087)
|
|
|
34,097
|
|
Net
Income
|
171,924
|
|
|
181,906
|
|
Net income
attributable to noncontrolling interests (c)
|
(45)
|
|
|
(10,516)
|
|
Net Income
Attributable to W. P. Carey
|
$
|
171,879
|
|
|
$
|
171,390
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
0.96
|
|
|
$
|
0.99
|
|
Diluted Earnings
Per Share
|
$
|
0.96
|
|
|
$
|
0.99
|
|
Weighted-Average
Shares Outstanding
|
|
|
|
Basic
|
178,379,654
|
|
|
173,325,493
|
|
Diluted
|
178,902,259
|
|
|
173,514,894
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
|
2.098
|
|
|
$
|
2.082
|
|
|
__________
|
(a)
|
Amount for the
three months ended June 30, 2021 is primarily comprised of a net
release of our allowance for credit losses reserve of $4.9 million,
net gain on foreign currency transactions of $3.3 million and
unrealized loss on derivatives of $(0.5) million. Amount for the
three months ended March 31, 2021 includes a loss on extinguishment
of debt of $(59.9) million (of which $(31.7) million mainly
comprised fees for the prepayment of certain non-recourse mortgage
loans and $(28.2) million mainly comprised a "make-whole" amount
paid in connection with the redemption of €500 million of 2.0%
Senior Unsecured Notes due 2023 in March 2021).
|
(b)
|
Amount for the
three months ended June 30, 2021 is comprised of a cash dividend of
$3.3 million from our investment in preferred shares of Watermark
Lodging Trust, realized losses on foreign currency exchange
derivatives of $(0.2) million and interest income on deposits and
loans to affiliates of less than $0.1 million.
|
(c)
|
Amount for the
three months ended March 31, 2021 includes a non-cash
other-than-temporary impairment charge of $6.8 million recognized
on an equity method investment in real estate. Amounts for the
three and six months ended June 30, 2020 include a non-cash net
gain of $33.0 million (inclusive of $9.9 million attributable to
the redemption of a noncontrolling interest that the former
subadvisors for CWI 1 and CWI 2 held in the special general partner
interests) recognized in connection with consideration received at
closing of the CWI 1 and CWI 2 merger. Amount for the six months
ended June 30, 2020 includes non-cash other-than-temporary
impairment charges totaling $47.1 million recognized on our former
equity method investments in CWI 1 and CWI 2.
|
W. P. CAREY
INC.
|
Quarterly
Reconciliation of Net Income to Adjusted Funds from Operations
(AFFO) (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
Net income
attributable to W. P. Carey
|
$
|
120,245
|
|
|
$
|
51,634
|
|
|
$
|
105,300
|
|
Adjustments:
|
|
|
|
|
|
Depreciation
and amortization of real property
|
112,997
|
|
|
109,204
|
|
|
106,264
|
|
Gain on sale of
real estate, net
|
(19,840)
|
|
|
(9,372)
|
|
|
—
|
|
Proportionate
share of adjustments to earnings from equity method
investments (a)
(b) (c)
|
3,434
|
|
|
10,306
|
|
|
(19,117)
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(4)
|
|
|
(4)
|
|
|
(588)
|
|
Total
adjustments
|
96,587
|
|
|
110,134
|
|
|
86,559
|
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey (e)
|
216,832
|
|
|
161,768
|
|
|
191,859
|
|
Adjustments:
|
|
|
|
|
|
Above- and
below-market rent intangible lease amortization, net
|
14,384
|
|
|
12,115
|
|
|
12,956
|
|
Straight-line
and other rent adjustments
|
(10,313)
|
|
|
(8,751)
|
|
|
(11,720)
|
|
Stock-based
compensation
|
9,048
|
|
|
5,381
|
|
|
2,918
|
|
Other (gains)
and losses (f)
|
(7,545)
|
|
|
41,188
|
|
|
(4,259)
|
|
Amortization of
deferred financing costs
|
3,447
|
|
|
3,413
|
|
|
2,993
|
|
Merger and
other expenses (g)
|
(2,599)
|
|
|
(476)
|
|
|
1,074
|
|
Other
amortization and non-cash items
|
563
|
|
|
29
|
|
|
488
|
|
Tax expense
(benefit) – deferred and other (h)
|
217
|
|
|
(3,387)
|
|
|
(229)
|
|
Proportionate
share of adjustments to earnings from equity method
investments (b)
|
4,650
|
|
|
5,211
|
|
|
1,251
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(8)
|
|
|
(5)
|
|
|
579
|
|
Total
adjustments
|
11,844
|
|
|
54,718
|
|
|
6,051
|
|
AFFO Attributable
to W. P. Carey (e)
|
$
|
228,676
|
|
|
$
|
216,486
|
|
|
$
|
197,910
|
|
|
|
|
|
|
|
Summary
|
|
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey (e)
|
$
|
216,832
|
|
|
$
|
161,768
|
|
|
$
|
191,859
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share
(e)
|
$
|
1.20
|
|
|
$
|
0.91
|
|
|
$
|
1.11
|
|
AFFO attributable to
W. P. Carey (e)
|
$
|
228,676
|
|
|
$
|
216,486
|
|
|
$
|
197,910
|
|
AFFO attributable to
W. P. Carey per diluted share (e)
|
$
|
1.27
|
|
|
$
|
1.22
|
|
|
$
|
1.14
|
|
Diluted
weighted-average shares outstanding
|
180,668,732
|
|
|
176,965,510
|
|
|
173,472,755
|
|
W. P. CAREY
INC.
|
Quarterly
Reconciliation of Net Income from Real Estate to Adjusted Funds
from Operations (AFFO) from Real Estate (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
Net income from Real
Estate attributable to W. P. Carey
|
$
|
114,687
|
|
|
$
|
44,587
|
|
|
$
|
81,825
|
|
Adjustments:
|
|
|
|
|
|
Depreciation
and amortization of real property
|
112,997
|
|
|
109,204
|
|
|
106,264
|
|
Gain on sale of
real estate, net
|
(19,840)
|
|
|
(9,372)
|
|
|
—
|
|
Proportionate
share of adjustments to earnings from equity method
investments (a) (b)
|
3,434
|
|
|
10,306
|
|
|
3,352
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(4)
|
|
|
(4)
|
|
|
(588)
|
|
Total
adjustments
|
96,587
|
|
|
110,134
|
|
|
109,028
|
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey – Real Estate
(e)
|
211,274
|
|
|
154,721
|
|
|
190,853
|
|
Adjustments:
|
|
|
|
|
|
Above- and
below-market rent intangible lease amortization, net
|
14,384
|
|
|
12,115
|
|
|
12,956
|
|
Straight-line
and other rent adjustments
|
(10,313)
|
|
|
(8,751)
|
|
|
(11,720)
|
|
Stock-based
compensation
|
9,048
|
|
|
5,381
|
|
|
2,918
|
|
Other (gains)
and losses (f)
|
(7,472)
|
|
|
42,189
|
|
|
(5,437)
|
|
Amortization of
deferred financing costs
|
3,447
|
|
|
3,413
|
|
|
2,993
|
|
Merger and
other expenses (g)
|
(2,599)
|
|
|
(491)
|
|
|
935
|
|
Other
amortization and non-cash items
|
563
|
|
|
29
|
|
|
488
|
|
Tax expense
(benefit) – deferred and other
|
208
|
|
|
(2,595)
|
|
|
(3,051)
|
|
Proportionate
share of adjustments to earnings from equity method
investments (b)
|
3,845
|
|
|
4,322
|
|
|
166
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(8)
|
|
|
(5)
|
|
|
579
|
|
Total
adjustments
|
11,103
|
|
|
55,607
|
|
|
827
|
|
AFFO Attributable
to W. P. Carey – Real Estate (e)
|
$
|
222,377
|
|
|
$
|
210,328
|
|
|
$
|
191,680
|
|
|
|
|
|
|
|
Summary
|
|
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey – Real Estate
(e)
|
$
|
211,274
|
|
|
$
|
154,721
|
|
|
$
|
190,853
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share –
Real Estate (e)
|
$
|
1.17
|
|
|
$
|
0.88
|
|
|
$
|
1.10
|
|
AFFO attributable to
W. P. Carey – Real Estate (e)
|
$
|
222,377
|
|
|
$
|
210,328
|
|
|
$
|
191,680
|
|
AFFO attributable to
W. P. Carey per diluted share – Real Estate
(e)
|
$
|
1.23
|
|
|
$
|
1.19
|
|
|
$
|
1.10
|
|
Diluted
weighted-average shares outstanding
|
180,668,732
|
|
|
176,965,510
|
|
|
173,472,755
|
|
W. P. CAREY
INC.
|
Year-to-Date
Reconciliation of Net Income to Adjusted Funds from Operations
(AFFO) (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
Net income
attributable to W. P. Carey
|
$
|
171,879
|
|
|
$
|
171,390
|
|
Adjustments:
|
|
|
|
Depreciation
and amortization of real property
|
222,201
|
|
|
221,177
|
|
Gain on sale of
real estate, net
|
(29,212)
|
|
|
(11,751)
|
|
Impairment
charges
|
—
|
|
|
19,420
|
|
Proportionate
share of adjustments to earnings from equity method investments
(a) (b) (c) (i)
|
13,740
|
|
|
31,360
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(8)
|
|
|
(10)
|
|
Total
adjustments
|
206,721
|
|
|
260,196
|
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey (e)
|
378,600
|
|
|
431,586
|
|
Adjustments:
|
|
|
|
Other (gains)
and losses
|
33,643
|
|
|
5,556
|
|
Above- and
below-market rent intangible lease amortization, net
|
26,499
|
|
|
24,736
|
|
Straight-line
and other rent adjustments
|
(19,064)
|
|
|
(18,812)
|
|
Stock-based
compensation
|
14,429
|
|
|
5,579
|
|
Amortization of
deferred financing costs
|
6,860
|
|
|
6,082
|
|
Tax benefit –
deferred and other (h) (j) (k)
|
(3,170)
|
|
|
(48,152)
|
|
Merger and
other expenses (g)
|
(3,075)
|
|
|
1,261
|
|
Other
amortization and non-cash items
|
592
|
|
|
896
|
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
9,861
|
|
|
5,146
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(13)
|
|
|
572
|
|
Total
adjustments
|
66,562
|
|
|
(17,136)
|
|
AFFO Attributable
to W. P. Carey (e)
|
$
|
445,162
|
|
|
$
|
414,450
|
|
|
|
|
|
Summary
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey (e)
|
$
|
378,600
|
|
|
$
|
431,586
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share
(e)
|
$
|
2.12
|
|
|
$
|
2.49
|
|
AFFO attributable to
W. P. Carey (e)
|
$
|
445,162
|
|
|
$
|
414,450
|
|
AFFO attributable to
W. P. Carey per diluted share (e)
|
$
|
2.49
|
|
|
$
|
2.39
|
|
Diluted
weighted-average shares outstanding
|
178,902,259
|
|
|
173,514,894
|
|
W. P. CAREY
INC.
|
Year-to-Date
Reconciliation of Net Income from Real Estate to Adjusted Funds
from Operations (AFFO) from Real Estate (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
Net income from Real
Estate attributable to W. P. Carey
|
$
|
159,274
|
|
|
$
|
182,739
|
|
Adjustments:
|
|
|
|
Depreciation
and amortization of real property
|
222,201
|
|
|
221,177
|
|
Gain on sale of
real estate, net
|
(29,212)
|
|
|
(11,751)
|
|
Impairment
charges
|
—
|
|
|
19,420
|
|
Proportionate
share of adjustments to earnings from equity method investments
(a) (b)
|
13,740
|
|
|
6,717
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(8)
|
|
|
(10)
|
|
Total
adjustments
|
206,721
|
|
|
235,553
|
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey – Real Estate
(e)
|
365,995
|
|
|
418,292
|
|
Adjustments:
|
|
|
|
Other (gains)
and losses
|
34,717
|
|
|
5,536
|
|
Above- and
below-market rent intangible lease amortization, net
|
26,499
|
|
|
24,736
|
|
Straight-line
and other rent adjustments
|
(19,064)
|
|
|
(18,812)
|
|
Stock-based
compensation
|
14,429
|
|
|
4,888
|
|
Amortization of
deferred financing costs
|
6,860
|
|
|
6,082
|
|
Merger and
other expenses (g)
|
(3,090)
|
|
|
803
|
|
Tax benefit –
deferred and other (j)
|
(2,387)
|
|
|
(41,007)
|
|
Other
amortization and non-cash items
|
592
|
|
|
697
|
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
8,167
|
|
|
(108)
|
|
Proportionate
share of adjustments for noncontrolling interests
(d)
|
(13)
|
|
|
572
|
|
Total
adjustments
|
66,710
|
|
|
(16,613)
|
|
AFFO Attributable
to W. P. Carey – Real Estate (e)
|
$
|
432,705
|
|
|
$
|
401,679
|
|
|
|
|
|
Summary
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey – Real Estate
(e)
|
$
|
365,995
|
|
|
$
|
418,292
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share –
Real Estate (e)
|
$
|
2.05
|
|
|
$
|
2.41
|
|
AFFO attributable to
W. P. Carey – Real Estate (e)
|
$
|
432,705
|
|
|
$
|
401,679
|
|
AFFO attributable to
W. P. Carey per diluted share – Real Estate
(e)
|
$
|
2.42
|
|
|
$
|
2.31
|
|
Diluted
weighted-average shares outstanding
|
178,902,259
|
|
|
173,514,894
|
|
|
__________
|
(a)
|
Amounts for the
three months ended March 31, 2021 and six months ended June 30,
2021 include a non-cash other-than-temporary impairment charge of
$6.8 million recognized on an equity method investment in real
estate.
|
(b)
|
Equity income,
including amounts that are not typically recognized for FFO and
AFFO, is recognized within Earnings from equity method investments
on the consolidated statements of income. This represents
adjustments to equity income to reflect FFO and AFFO on a pro rata
basis.
|
(c)
|
Amounts for the
three and six months ended June 30, 2020 include a non-cash net
gain of $33.0 million (inclusive of $9.9 million attributable to
the redemption of a noncontrolling interest that the former
subadvisors for CWI 1 and CWI 2 held in the special general partner
interests) recognized in connection with consideration received at
closing of the CWI 1 and CWI 2 merger.
|
(d)
|
Adjustments
disclosed elsewhere in this reconciliation are on a consolidated
basis. This adjustment reflects our FFO or AFFO on a pro rata
basis.
|
(e)
|
FFO and AFFO are
non-GAAP measures. See below for a description of FFO and
AFFO.
|
(f)
|
Adjustment amounts
for the three months ended June 30, 2021 are primarily comprised of
a net release of our allowance for credit losses reserve of $4.9
million, net gain on foreign currency transactions of $3.3 million
and unrealized loss on derivatives of $(0.5)
million.
|
(g)
|
Amounts for the
three and six months ended June 30, 2021 are primarily comprised of
reversals of estimated liabilities for German real estate transfer
taxes that were previously recorded in connection with business
combinations in prior years.
|
(h)
|
Amounts for the
three and six months ended June 30, 2020 include one-time taxes
incurred upon the recognition of taxable income associated with the
accelerated vesting of shares (previously issued by CWI 1 and CWI 2
to us for asset management services performed) in connection with
the CWI 1 and CWI 2 merger.
|
(i)
|
Amount for the six
months ended June 30, 2020 includes non-cash other-than-temporary
impairment charges totaling $47.1 million recognized on our former
equity method investments in CWI 1 and CWI 2.
|
(j)
|
Amount for the six
months ended June 30, 2020 includes a non-cash deferred tax benefit
of $37.2 million as a result of the release of a deferred tax
liability relating to our investment in shares of Lineage
Logistics, which converted to a REIT during that period and is
therefore no longer subject to federal and state income
taxes.
|
(k)
|
Amount for the six
months ended June 30, 2020 includes a one-time tax benefit of $6.0
million as a result of carrying back certain net operating losses
in accordance with the CARES Act, which was enacted on March 27,
2020.
|
Non-GAAP Financial Disclosure
Funds from Operations (FFO) and Adjusted Funds from
Operations (AFFO)
Due to certain unique operating characteristics of real
estate companies, as discussed below, the National Association of
Real Estate Investment Trusts, Inc. (NAREIT), an industry
trade group, has promulgated a non-GAAP measure known as FFO, which
we believe to be an appropriate supplemental measure, when used in
addition to and in conjunction with results presented in accordance
with GAAP, to reflect the operating performance of a REIT. The use
of FFO is recommended by the REIT industry as a supplemental
non-GAAP measure. FFO is not equivalent to, nor a substitute for,
net income or loss as determined under GAAP.
We define FFO, a non-GAAP measure, consistent with the
standards established by the White Paper on FFO approved by the
Board of Governors of NAREIT, as restated in December 2018.
The White Paper defines FFO as net income or loss computed in
accordance with GAAP, excluding gains or losses from sales of
property, impairment charges on real estate, gains or losses on
changes in control of interests in real estate and depreciation and
amortization from real estate assets; and after adjustments for
unconsolidated partnerships and jointly owned investments.
Adjustments for unconsolidated partnerships and jointly owned
investments are calculated to reflect FFO.
We also modify the NAREIT computation of FFO to adjust GAAP
net income for certain non-cash charges, such as amortization of
real estate-related intangibles, deferred income tax benefits and
expenses, straight-line rent and related reserves, other non-cash
rent adjustments, non-cash allowance for credit losses on loans
receivable and direct financing leases, stock-based compensation,
non-cash environmental accretion expense, amortization of discounts
and premiums on debt and amortization of deferred financing costs.
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. Additionally, we exclude non-core income and expenses, such
as gains or losses from extinguishment of debt and merger and
acquisition expenses. We also exclude realized and unrealized
gains/losses on foreign currency exchange transactions (other than
those realized on the settlement of foreign currency 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 to arrive at AFFO as they are not
the primary drivers in our decision-making process and excluding
these items provides investors a view of our portfolio performance
over time and makes it more comparable to other REITs that are
currently not engaged in acquisitions, mergers and restructuring,
which are not part of our normal business operations. AFFO also
reflects adjustments for unconsolidated partnerships and jointly
owned investments. We 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 as we believe 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 income computed under GAAP, or as
alternatives to net cash provided by operating activities computed
under GAAP, or as indicators of our ability to fund our cash
needs.
Institutional Investors:
Peter Sands
1 (212) 492-1110
institutionalir@wpcarey.com
Individual Investors:
W. P. Carey Inc.
1 (212) 492-8920
ir@wpcarey.com
Press Contact:
Anna
McGrath
1 (212) 492-1166
amcgrath@wpcarey.com
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SOURCE W. P. Carey Inc.