NEW YORK, May 9, 2017
/PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC)
(W. P. Carey or the Company), an
internally-managed net lease real estate investment trust, today
reported its financial results for the first quarter ended
March 31, 2017.
Total Company
- Net income attributable to W. P.
Carey of $57.5 million, or
$0.53 per diluted share
- AFFO of $134.2 million, or
$1.25 per diluted share
- Affirm 2017 AFFO guidance range of $5.10 to $5.30 per diluted share
- Quarterly cash dividend raised to $0.9950 per share, equivalent to an annualized
dividend rate of $3.98 per
share
Business Segments
Owned Real Estate
- Segment net income attributable to W. P. Carey of $51.1
million
- Segment AFFO of $125.9
million, or $1.17 per diluted
share
- Substantially completed expansion projects totaling
$37.3 million during and subsequent
to the 2017 first quarter
- Gross disposition proceeds totaling $52.8 million
- Portfolio occupancy of 99.1%
Investment Management
- Segment net income attributable to W. P. Carey of $6.4
million
- Segment AFFO of $8.3 million,
or $0.08 per diluted share
- Assets under management of $13.0
billion
Balance Sheet &
Capitalization
- Issued €500 million of 2.250% Senior Unsecured Notes due
2024
- Amended and restated existing unsecured credit facility
increasing capacity to $1.85
billion
MANAGEMENT COMMENTARY
"For the 2017 first quarter, we generated AFFO per diluted share
of $1.25, which reflects a number of
the proactive steps we took over the last year, including planned
real estate dispositions, financing activities that lowered our
overall cost of debt and our focus on operational efficiency," said
Mark J. DeCesaris, Chief Executive
Officer of W. P. Carey. "We also
raised our quarterly cash dividend to 99.5
cents per share, while maintaining a conservative payout
ratio. As has been the case since we converted to a REIT in 2012,
the vast majority of the earnings that support our dividend were
generated through our core competency of net lease investing for
our Owned Real Estate portfolio."
QUARTERLY FINANCIAL RESULTS
Revenues
- Total Company: Revenues excluding reimbursable costs
(net revenues) for the 2017 first quarter totaled $188.1 million, down 23.0% from $244.2 million for the 2016 first quarter, due
primarily to lower net revenues from Owned Real Estate.
- Owned Real Estate: Owned Real Estate revenues excluding
reimbursable tenant costs (net revenues from Owned Real Estate) for
the 2017 first quarter were $163.5
million, down 23.8% from $214.7
million for the 2016 first quarter, due primarily to
$32.2 million of lease termination
income recognized during the prior-year period related to a
property sold during that period and lower lease revenues resulting
from planned dispositions, partly offset by lease revenues from
properties acquired during 2016.
- Investment Management: Investment Management revenues
excluding reimbursable costs (net revenues from Investment
Management) for the 2017 first quarter were $24.6 million, down 16.6% from $29.5 million for the 2016 first quarter, due
primarily to lower structuring revenues resulting from lower
investment activity on behalf of the Managed Programs, partly
offset by higher asset management fees as a result of growth in
assets under management.
Net Income Attributable to W. P.
Carey
- Net income attributable to W. P.
Carey for the 2017 first quarter was $57.5 million, up 0.2% compared to $57.4 million for the 2016 first quarter, due
primarily to lower depreciation and amortization resulting from
planned dispositions, restructuring and other compensation expenses
recognized during the prior-year period, an allowance for credit
losses recorded during the prior-year period, lower interest
expense and expenses related to our formal strategic review (which
was completed in May 2016) recognized
during the prior-year period, partly offset by lower net
revenues.
Adjusted Funds from Operations (AFFO)
- AFFO for the 2017 first quarter was $1.25 per diluted share, down 4.6% from
$1.31 per diluted share for the 2016
first quarter, due primarily to (i) lower structuring revenues;
(ii) lease termination income recognized during the prior-year
period related to a property sold during that period; and (iii)
lower lease revenues resulting from planned dispositions. These
factors were partly offset by (i) lower interest expense, due
primarily to a lower weighted-average interest rate on the
Company's debt; (ii) lower general and administrative expenses; and
(iii) higher asset management fees.
- Note: Further information concerning AFFO, a non-GAAP
supplemental performance metric, is presented in the accompanying
tables and related notes.
Dividend
- As previously announced, on March 16,
2017, the Company's Board of Directors declared a quarterly
cash dividend of $0.9950 per share,
equivalent to an annualized dividend rate of $3.98 per share. The dividend was paid on
April 17, 2017 to stockholders of
record as of March 31, 2017.
AFFO GUIDANCE
- For the 2017 full year, the Company affirms that it expects to
report AFFO of between $5.10 and
$5.30 per diluted share, based on the following key
assumptions:
(i) acquisitions for the Company's Owned Real Estate
portfolio of between $450 million and $650
million;
(ii) dispositions from the Company's Owned Real Estate
portfolio of between $350 million and $550
million;
(iii) acquisitions on behalf of the CPA® REITs of
between $300 million and $500
million; and
(iv) acquisitions on behalf of other Managed Programs of
between $400 million and $700
million.
BALANCE SHEET AND CAPITALIZATION
Euro-Denominated Bond Issuance
- As previously announced, on January 19,
2017, the Company completed an underwritten public offering
of €500 million aggregate principal amount of 2.250% Senior Notes
due July 19, 2024, issued by its
wholly owned subsidiary, WPC Eurobond B.V., and guaranteed by W. P.
Carey Inc. The Company used the net proceeds from this offering to
reduce amounts outstanding under its senior unsecured credit
facility.
Senior Unsecured Credit Facility
- As previously announced, on February 22,
2017, the Company amended and restated its senior unsecured
credit facility, increasing the capacity under the facility to
$1.85 billion. The facility is
comprised of a $1.5 billion revolving
line of credit maturing in four years with two six-month extension
options, a €236.3 million ($250.0
million equivalent) term loan maturing in five years and a
$100.0 million delayed draw term loan
also maturing in five years. The delayed draw term loan may be
drawn within one year and allows for borrowings in U.S. dollars,
euros or British pounds sterling.
OWNED REAL ESTATE
Investments
- During the 2017 first quarter, the Company fully funded and
completed one expansion project at a cost of $3.3 million. Subsequent to quarter end,
construction was substantially completed on two further expansion
projects for an additional expected investment of $34.0 million.
Dispositions
- During the 2017 first quarter, the Company disposed of three
properties and a parcel of vacant land from its Owned Real Estate
portfolio for total gross proceeds of $52.8
million, before transaction-related costs and fees.
Composition
- As of March 31, 2017, the
Company's Owned Real Estate portfolio consisted of 900 net lease
properties, comprising 86.6 million square feet leased to 214
tenants, and two hotel operating properties. As of that date, the
weighted-average lease term of the net lease portfolio was 9.6
years and the occupancy rate was 99.1%.
INVESTMENT MANAGEMENT
- W. P. Carey is the advisor to
CPA®:17 – Global and CPA®:18 – Global (the
CPA® REITs), Carey Watermark Investors Incorporated (CWI
1) and Carey Watermark Investors 2 Incorporated (CWI 2) (the CWI
REITs, and together with the CPA® REITs, the Managed
REITs), Carey Credit Income Fund (CCIF) and Carey European Student
Housing Fund I, L.P. (CESH I, and together with the Managed REITs
and CCIF, the Managed Programs).
Acquisitions
- During the 2017 first quarter, the Company structured new
investments totaling $111.0 million
on behalf of the Managed Programs, including transaction-related
costs and fees.
Assets Under Management
- As of March 31, 2017, the Managed Programs had total
assets under management of approximately $13.0 billion, up 12.1% from $11.6 billion as of March 31, 2016.
Net Investor Capital Inflows
- During the 2017 first quarter, investor capital inflows for the
Managed Programs, including Distribution Reinvestment Plan
proceeds, net of redemptions, totaled $302.5
million, primarily into CWI 2.
*
* *
* *
Supplemental Information
The Company has provided supplemental unaudited financial and
operating information regarding the 2017 first quarter, 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 May 9, 2017.
*
* *
* *
Live Conference Call and Audio Webcast Scheduled for
10:00 a.m. Eastern
Time
Please call to register at least 10 minutes
prior to the start time.
Date/Time: Tuesday, May 9, 2017 at 10:00 a.m. Eastern Time
Call-in Number: 1-877-465-1289 (US) or +1-201-689-8762
(international)
Audio Webcast: www.wpcarey.com/earnings
Audio Webcast Replay
An audio replay of the call will be available
at www.wpcarey.com/earnings.
*
* *
* *
W. P. Carey Inc.
W. P. Carey Inc. is a leading internally-managed net lease REIT
that provides long-term sale-leaseback and build-to-suit financing
solutions primarily for companies in the U.S. and Europe. At March 31, 2017, the Company
had an enterprise value of approximately $10.7 billion. In addition to its owned portfolio
of diversified global real estate, W. P. Carey manages a
series of non-traded publicly-registered and private investment
programs with assets under management of approximately $13.0 billion. Its corporate finance-focused
credit and real estate underwriting process is a constant that has
been successfully leveraged across a wide variety of industries and
property types. Furthermore, its portfolio of long-term leases with
creditworthy tenants has an established history of generating
stable cash flows, enabling it to deliver consistent and rising
dividend income to investors for over four decades.
www.wpcarey.com
*
* *
* *
Cautionary Statement Concerning Forward-Looking
Statements:
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, the
statements made by Mr. DeCesaris, including statements regarding
our operational efficiencies and cost reductions; weighted-average
lease term and occupancy rate of our owned real estate and other
portfolio characteristics; growth in assets under management;
annualized dividends and payout ratio; disposition and capital
recycling plans, and the intended results thereof; investor capital
inflows, including our access to capital markets, as well as our
financing activities, cost of debt and interest expense levels;
adjusted funds from operations coverage and guidance, including
underlying assumptions, our revenue mix; and anticipated future
financial and operating performance and results, including
underlying assumptions and estimates of growth. These statements
are based on the current expectations of the management of
W. P. Carey. It is important to note that
W. P. Carey's 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 factors could also
have material adverse effects on future results, performance or
achievements of W. P. Carey. 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
Item 1A. Risk Factors in W. P. Carey's Annual
Report on Form 10-K for the year ended December 31, 2016.
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.
*
* *
* *
W. P. CAREY
INC.
|
|
Consolidated
Balance Sheets (Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Investments in real
estate:
|
|
|
|
Real estate, at
cost
|
$
|
5,209,837
|
|
|
$
|
5,204,126
|
|
Operating real
estate, at cost
|
81,783
|
|
|
81,711
|
|
Accumulated
depreciation
|
(521,835)
|
|
|
(484,437)
|
|
Net investments in
properties
|
4,769,785
|
|
|
4,801,400
|
|
Net investments in
direct financing leases
|
688,234
|
|
|
684,059
|
|
Assets held for
sale
|
14,764
|
|
|
26,247
|
|
Net investments in
real estate
|
5,472,783
|
|
|
5,511,706
|
|
Equity investments in
the Managed Programs and real estate
|
312,140
|
|
|
298,893
|
|
Cash and cash
equivalents
|
152,834
|
|
|
155,482
|
|
Due from
affiliates
|
106,113
|
|
|
299,610
|
|
In-place lease and
tenant relationship intangible assets (net of accumulated
amortization of $346.1 million and
$322.1 million,
respectively)
|
805,100
|
|
|
826,113
|
|
Goodwill
|
636,871
|
|
|
635,920
|
|
Above-market rent
intangible assets (net of accumulated amortization of $225.7
million and $210.9 million,
respectively)
|
407,480
|
|
|
421,456
|
|
Other assets,
net
|
304,507
|
|
|
304,774
|
|
Total
Assets
|
$
|
8,197,828
|
|
|
$
|
8,453,954
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Senior Unsecured
Notes, net
|
$
|
2,343,062
|
|
|
$
|
1,807,200
|
|
Non-recourse debt,
net
|
1,386,542
|
|
|
1,706,921
|
|
Senior Unsecured
Credit Facility - Term Loans, net
|
250,944
|
|
|
249,978
|
|
Senior Unsecured
Credit Facility - Revolver
|
192,804
|
|
|
676,715
|
|
Accounts payable,
accrued expenses and other liabilities
|
255,754
|
|
|
266,917
|
|
Below-market rent and
other intangible liabilities (net of accumulated amortization of
$43.3 million and
$40.6 million,
respectively)
|
119,914
|
|
|
122,203
|
|
Deferred income
taxes
|
83,375
|
|
|
90,825
|
|
Distributions
payable
|
107,816
|
|
|
107,090
|
|
Total
liabilities
|
4,740,211
|
|
|
5,027,849
|
|
Redeemable
noncontrolling interest
|
965
|
|
|
965
|
|
|
|
|
|
Equity:
|
|
|
|
W. P. Carey
stockholders' equity:
|
|
|
|
Preferred stock (none
issued)
|
—
|
|
|
—
|
|
Common
stock
|
107
|
|
|
106
|
|
Additional paid-in
capital
|
4,400,389
|
|
|
4,399,961
|
|
Distributions in
excess of accumulated earnings
|
(945,515)
|
|
|
(894,137)
|
|
Deferred compensation
obligation
|
47,266
|
|
|
50,222
|
|
Accumulated other
comprehensive loss
|
(246,234)
|
|
|
(254,485)
|
|
Total W. P. Carey
stockholders' equity
|
3,256,013
|
|
|
3,301,667
|
|
Noncontrolling
interests
|
200,639
|
|
|
123,473
|
|
Total
equity
|
3,456,652
|
|
|
3,425,140
|
|
Total Liabilities
and Equity
|
$
|
8,197,828
|
|
|
$
|
8,453,954
|
|
W. P. CAREY
INC.
|
Quarterly
Consolidated Statements of Income (Unaudited)
|
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
Revenues
|
|
|
|
|
|
Owned Real
Estate:
|
|
|
|
|
|
Lease
revenues
|
$
|
155,781
|
|
|
$
|
157,105
|
|
|
$
|
175,244
|
|
Operating
property revenues
|
6,980
|
|
|
7,071
|
|
|
6,902
|
|
Reimbursable
tenant costs
|
5,221
|
|
|
6,201
|
|
|
6,309
|
|
Lease
termination income and other (a)
|
760
|
|
|
1,093
|
|
|
32,541
|
|
|
168,742
|
|
|
171,470
|
|
|
220,996
|
|
Investment
Management:
|
|
|
|
|
|
Reimbursable
costs from affiliates
|
25,700
|
|
|
20,061
|
|
|
19,738
|
|
Asset
management revenue
|
17,367
|
|
|
16,375
|
|
|
14,613
|
|
Structuring
revenue
|
3,834
|
|
|
16,338
|
|
|
12,721
|
|
Dealer manager
fees
|
3,325
|
|
|
2,623
|
|
|
2,172
|
|
Other advisory
revenue
|
91
|
|
|
1,913
|
|
|
—
|
|
|
50,317
|
|
|
57,310
|
|
|
49,244
|
|
|
219,059
|
|
|
228,780
|
|
|
270,240
|
|
Operating
Expenses
|
|
|
|
|
|
Depreciation and
amortization
|
62,430
|
|
|
62,675
|
|
|
84,452
|
|
Reimbursable tenant
and affiliate costs
|
30,921
|
|
|
26,262
|
|
|
26,047
|
|
General and
administrative
|
18,424
|
|
|
24,230
|
|
|
21,438
|
|
Property expenses,
excluding reimbursable tenant costs
|
10,110
|
|
|
10,956
|
|
|
17,772
|
|
Stock-based
compensation expense
|
6,910
|
|
|
3,051
|
|
|
6,607
|
|
Dealer manager fees
and expenses
|
3,294
|
|
|
3,808
|
|
|
3,352
|
|
Subadvisor fees
(b)
|
2,720
|
|
|
4,131
|
|
|
3,293
|
|
Property acquisition
and other expenses (c)
|
73
|
|
|
18
|
|
|
5,566
|
|
Impairment
charges
|
—
|
|
|
9,433
|
|
|
—
|
|
Restructuring and
other compensation (d)
|
—
|
|
|
—
|
|
|
11,473
|
|
|
134,882
|
|
|
144,564
|
|
|
180,000
|
|
Other Income and
Expenses
|
|
|
|
|
|
Interest
expense
|
(41,957)
|
|
|
(43,913)
|
|
|
(48,395)
|
|
Equity in earnings of
equity method investments in the Managed Programs
and real estate
|
15,774
|
|
|
16,476
|
|
|
15,011
|
|
Other income and
(expenses)
|
516
|
|
|
(3,731)
|
|
|
3,871
|
|
|
(25,667)
|
|
|
(31,168)
|
|
|
(29,513)
|
|
Income before income
taxes and gain on sale of real estate
|
58,510
|
|
|
53,048
|
|
|
60,727
|
|
Benefit from
(provision for) income taxes
|
1,305
|
|
|
(7,826)
|
|
|
(525)
|
|
Income before gain on
sale of real estate
|
59,815
|
|
|
45,222
|
|
|
60,202
|
|
Gain on sale of real
estate, net of tax
|
10
|
|
|
3,248
|
|
|
662
|
|
Net
Income
|
59,825
|
|
|
48,470
|
|
|
60,864
|
|
Net income
attributable to noncontrolling interests
|
(2,341)
|
|
|
(766)
|
|
|
(3,425)
|
|
Net Income
Attributable to W. P. Carey
|
$
|
57,484
|
|
|
$
|
47,704
|
|
|
$
|
57,439
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
$
|
0.54
|
|
Diluted Earnings
Per Share
|
$
|
0.53
|
|
|
$
|
0.44
|
|
|
$
|
0.54
|
|
Weighted-Average
Shares Outstanding
|
|
|
|
|
|
Basic
|
107,562,484
|
|
|
107,487,181
|
|
|
105,939,161
|
|
Diluted
|
107,764,279
|
|
|
107,715,965
|
|
|
106,405,453
|
|
|
|
|
|
|
|
Distributions
Declared Per Share
|
$
|
0.9950
|
|
|
$
|
0.9900
|
|
|
$
|
0.9742
|
|
__________
|
(a)
|
Amount for the
three months ended March 31, 2016 includes $32.2 million of lease
termination income related to a property sold during that
period.
|
(b)
|
We earn investment
management revenue from CWI 1 and CWI 2 in our role as their
advisor. Pursuant to the terms of their subadvisory agreements,
however, 20% of the fees we receive from CWI 1 and 25% of the fees
we receive from CWI 2 are paid to their respective subadvisors. In
connection with the acquisitions of multi-family properties on
behalf of CPA®:18 – Global, we entered into agreements
with third-party advisors for the day-to-day management of the
properties for which we pay 30% of the initial acquisition fees and
100% of asset management fees paid to us by CPA®:18 –
Global. Pursuant to the terms of the subadvisory agreement we have
with the subadvisor in connection with CCIF, we pay a subadvisory
fee equal to 50% of the asset management fees and organization and
offering costs paid to us by CCIF.
|
(c)
|
Amount for the
three months ended March 31, 2016 includes expenses related to our
formal strategic review, which was completed in May 2016, of $5.5
million.
|
(d)
|
Amount represents
restructuring and other compensation-related expenses resulting
from a reduction in headcount and employee severance arrangements,
primarily in connection with the reduction in force that we
completed in March 2016.
|
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
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
Net income
attributable to W. P. Carey
|
$
|
57,484
|
|
|
$
|
47,704
|
|
|
$
|
57,439
|
|
Adjustments:
|
|
|
|
|
|
Depreciation
and amortization of real property
|
61,182
|
|
|
61,373
|
|
|
82,957
|
|
Gain on sale
of real estate, net
|
(10)
|
|
|
(3,248)
|
|
|
(662)
|
|
Impairment
charges
|
—
|
|
|
9,433
|
|
|
—
|
|
Proportionate
share of adjustments for noncontrolling interests to arrive at
FFO
|
(2,541)
|
|
|
(3,184)
|
|
|
(2,625)
|
|
Proportionate
share of adjustments to equity in net income of partially owned
entities to
arrive at FFO
|
2,717
|
|
|
1,059
|
|
|
1,309
|
|
Total
adjustments
|
61,348
|
|
|
65,433
|
|
|
80,979
|
|
FFO Attributable
to W. P. Carey (as defined by NAREIT) (a)
|
118,832
|
|
|
113,137
|
|
|
138,418
|
|
Adjustments:
|
|
|
|
|
|
Above- and
below-market rent intangible lease amortization, net
(b)
|
12,491
|
|
|
12,653
|
|
|
(1,818)
|
|
Stock-based
compensation
|
6,910
|
|
|
3,051
|
|
|
6,607
|
|
Tax benefit –
deferred
|
(5,551)
|
|
|
(2,433)
|
|
|
(2,988)
|
|
Straight-line
and other rent adjustments (c)
|
(3,500)
|
|
|
(4,953)
|
|
|
(26,912)
|
|
Other
amortization and non-cash items (d) (e)
|
2,094
|
|
|
5,584
|
|
|
(3,202)
|
|
Amortization
of deferred financing costs (e)
|
1,400
|
|
|
926
|
|
|
723
|
|
Loss on
extinguishment of debt
|
912
|
|
|
224
|
|
|
1,925
|
|
Realized
losses (gains) on foreign currency
|
403
|
|
|
1,102
|
|
|
(212)
|
|
Property
acquisition and other expenses (f)
|
73
|
|
|
18
|
|
|
5,566
|
|
Restructuring
and other compensation (g)
|
—
|
|
|
—
|
|
|
11,473
|
|
Allowance for
credit losses
|
—
|
|
|
—
|
|
|
7,064
|
|
Proportionate
share of adjustments to equity in net income of partially owned
entities to
arrive at AFFO
|
550
|
|
|
2,810
|
|
|
1,321
|
|
Proportionate
share of adjustments for noncontrolling interests to arrive at
AFFO
|
(376)
|
|
|
(595)
|
|
|
1,499
|
|
Total
adjustments
|
15,406
|
|
|
18,387
|
|
|
1,046
|
|
AFFO Attributable
to W. P. Carey (a)
|
$
|
134,238
|
|
|
$
|
131,524
|
|
|
$
|
139,464
|
|
|
|
|
|
|
|
Summary
|
|
|
|
|
|
FFO attributable to
W. P. Carey (as defined by NAREIT) (a)
|
$
|
118,832
|
|
|
$
|
113,137
|
|
|
$
|
138,418
|
|
FFO attributable to
W. P. Carey (as defined by NAREIT) per diluted share
(a)
|
$
|
1.10
|
|
|
$
|
1.05
|
|
|
$
|
1.30
|
|
AFFO attributable to
W. P. Carey (a)
|
$
|
134,238
|
|
|
$
|
131,524
|
|
|
$
|
139,464
|
|
AFFO attributable to
W. P. Carey per diluted share (a)
|
$
|
1.25
|
|
|
$
|
1.22
|
|
|
$
|
1.31
|
|
Diluted
weighted-average shares outstanding
|
107,764,279
|
|
|
107,715,965
|
|
|
106,405,453
|
|
_________
|
(a)
|
FFO and AFFO are
non-GAAP measures. See below for a description of FFO and
AFFO.
|
(b)
|
Amount for the
three months ended March 31, 2016 includes an adjustment of $15.6
million due to the acceleration of a below-market lease from a
tenant of a domestic property that was sold during that
period.
|
(c)
|
Amount for the
three months ended March 31, 2016 includes an adjustment to exclude
$27.2 million of the $32.2 million of lease termination income
recognized in connection with a domestic property that was sold
during that period, as such amount was determined to be non-core
income. Amount for the three months ended March 31, 2016 also
reflects an adjustment to include $1.8 million of lease termination
income received in December 2015 that represented core income for
the three months ended March 31, 2016.
|
(d)
|
Represents
primarily unrealized gains and losses from foreign exchange and
derivatives.
|
(e)
|
Effective July 1,
2016, the amortization of debt premiums and discounts, which was
previously included in Other amortization and non-cash items, is
included in Amortization of deferred financing costs. Prior periods
are retrospectively adjusted to reflect this change. Amortization
of debt premiums and discounts for the three months ended March 31,
2016 was $0.6 million.
|
(f)
|
Amount for the
three months ended March 31, 2016 includes expenses related to our
formal strategic review, which was completed in May 2016, of $5.5
million.
|
(g)
|
Amount represents
restructuring and other compensation-related expenses resulting
from a reduction in headcount and employee severance arrangements,
primarily in connection with the reduction in force that we
completed in March 2016.
|
Non-GAAP Financial Disclosure
Due to certain unique operating characteristics of real
estate companies, as discussed below, the National Association of
Real Estate Investment Trusts, Inc., or 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 revised in February 2004. 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, 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. Our FFO calculation
complies with NAREIT's policy described above.
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 real estate-related 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. 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 property acquisition and other expenses (which
includes expenses related to the formal strategic review that we
completed in May 2016), certain lease
termination income, and expenses related to restructuring and other
compensation-related expenses resulting from a reduction in
headcount and employee severance arrangements during the three
months ended March 31, 2016. We also
exclude realized gains/losses on foreign 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
which are currently not engaged in acquisitions, mergers and
restructuring which are not part of our normal business operations.
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 earnings computed under GAAP or as
alternatives to cash from operating activities computed under GAAP
or as indicators of our ability to fund our cash needs.
Institutional Investors:
Peter
Sands
W. P. Carey Inc.
212-492-1110
institutionalir@wpcarey.com
Individual Investors:
W. P. Carey Inc.
212-492-8920
ir@wpcarey.com
Press Contact:
Guy
Lawrence
Ross & Lawrence
212-308-3333
gblawrence@rosslawpr.com
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SOURCE W. P. Carey Inc.