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Section 1: 8-K (8-K)

Document


 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 3, 2019
397791177_wpchighreslogoa19.jpg
W. P. Carey Inc.
(Exact Name of Registrant as Specified in its Charter)

Maryland
001-13779
45-4549771
(State of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
50 Rockefeller Plaza, New York, NY
 
10020
(Address of principal executive offices)
 
(Zip Code)
 

Registrant’s telephone number, including area code: (212) 492-1100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

The registrant’s shares of common stock are listed on the New York Stock Exchange under the ticker symbol “WPC.”

 





Item 2.02 Results of Operations and Financial Condition.

On May 3, 2019, W. P. Carey Inc. (together with its predecessors, the “Company”) issued an earnings release announcing its financial results for the quarter ended March 31, 2019. A copy of the earnings release is attached as Exhibit 99.1.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 7.01 Regulation FD Disclosure.

On May 3, 2019, the Company made available certain unaudited supplemental financial information at March 31, 2019. A copy of this supplemental information is attached as Exhibit 99.2.

The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.
 
Description
99.1
 
 
 
 
99.2
 






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
 
W. P. Carey Inc.
 
 
 
 
Date:
May 3, 2019
By:
/s/ ToniAnn Sanzone
 
 
 
ToniAnn Sanzone
 
 
 
Chief Financial Officer


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

FOR IMMEDIATE RELEASE

Institutional Investors:
Peter Sands
W. P. Carey Inc.
212-492-1110
[email protected]

Individual Investors:
W. P. Carey Inc.
212-492-8920
[email protected]

Press Contact:
Guy Lawrence
Ross & Lawrence
212-308-3333
[email protected]

W. P. Carey Inc. Announces First Quarter 2019 Financial Results


New York, NY – May 3, 2019 – 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 first quarter ended March 31, 2019.

Total Company
Net income attributable to W. P. Carey of $68.5 million, or $0.41 per diluted share
AFFO of $201.8 million, or $1.21 per diluted share
Quarterly cash dividend raised to $1.032 per share, equivalent to an annualized dividend rate of $4.128 per share
Affirm 2019 AFFO guidance range of $4.95 to $5.15 per diluted share, including Real Estate AFFO of between $4.70 and $4.90 per diluted share

Business Segments

Real Estate
Segment net income attributable to W. P. Carey of $53.4 million
Segment AFFO of $188.3 million, or $1.13 per diluted share
Investment volume of $239.6 million
Active capital investment projects totaling $196.5 million at quarter end, including $103.3 million expected to be completed in 2019
Gross disposition proceeds of $5.0 million
Portfolio occupancy of 98.2%
Weighted-average lease term of 10.2 years

Investment Management
Segment net income attributable to W. P. Carey of $15.1 million
Segment AFFO of $13.4 million, or $0.08 per diluted share


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 1


Balance Sheet and Capitalization
Utilized ATM program to raise $303.8 million in net proceeds during the first quarter and, in addition, approximately $59 million subsequent to quarter end
Prepaid mortgage debt totaling $199.6 million during the first quarter and an additional $185.0 million subsequent to quarter end


MANAGEMENT COMMENTARY

“We are pleased with our first quarter investment volume — comprising both external acquisitions and follow-on deals with existing tenants — executed at attractive spreads to our cost of capital,” said Jason Fox, Chief Executive Officer of W. P. Carey. “We also utilized our ATM program to efficiently raise equity capital, primarily using the proceeds to fund acquisitions and prepay mortgage debt, thereby expanding our unencumbered pool of assets and reducing leverage. And we’re well positioned with ample liquidity to execute on our pipeline of new transactions, which is building nicely given the breadth of our opportunity set and geographic reach.”


QUARTERLY FINANCIAL RESULTS

Revenues

Total Company: Revenues, including reimbursable costs, for the 2019 first quarter totaled $298.3 million, up 47.8% from $201.8 million for the 2018 first quarter.

Real Estate: Real Estate revenues, including reimbursable costs, for the 2019 first quarter were $282.2 million, up 58.9% from $177.6 million for the 2018 first quarter, due primarily to additional lease revenues from properties acquired in the Company’s merger with CPA:17 on October 31, 2018 (the CPA:17 Merger).

Note: While it has no impact on net income or AFFO, in accordance with Accounting Standards Update 2016-02, Leases (Topic 842), which the Company has adopted effective as of January 1, 2019, operating expenses reimbursed by tenants are included within lease revenues on the consolidated statements of income (for both current and prior year periods). Previously the Company presented revenues excluding reimbursable costs.

Investment Management: Investment Management revenues, including reimbursable costs, for the 2019 first quarter were $16.1 million, down 33.5% from $24.2 million for the 2018 first quarter, due primarily to the cessation of asset management revenue previously earned from CPA:17.

Net Income Attributable to W. P. Carey

Net income attributable to W. P. Carey for the 2019 first quarter was $68.5 million, up 4.9% from $65.3 million for the 2018 first quarter. Net income from Real Estate attributable to W. P. Carey increased, due primarily to properties acquired in the CPA:17 Merger and net acquisitions. The increase in revenues from properties acquired in the CPA:17 Merger and acquisitions was partly offset by corresponding increases in depreciation and amortization, interest expense and property expenses. Net income from Investment Management attributable to W. P. Carey decreased, due primarily to the cessation of Investment Management revenues and distributions previously earned from CPA:17, partly offset by a one-time tax benefit recognized during the 2019 first quarter.

Adjusted Funds from Operations (AFFO)

AFFO for the 2019 first quarter was $1.21 per diluted share, down 5.5% from $1.28 per diluted share for the 2018 first quarter. AFFO from the Company’s Real Estate segment (Real Estate AFFO) increased, due primarily to the accretive impact of both properties acquired in the CPA:17 Merger and net acquisitions. AFFO from the Company’s Investment Management segment declined, due primarily to the cessation of Investment Management revenues and distributions previously earned from CPA:17.

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.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 2


Dividend

As previously announced, on March 14, 2019 the Company’s Board of Directors declared a quarterly cash dividend of $1.032 per share, equivalent to an annualized dividend rate of $4.128 per share. The dividend was paid on April 15, 2019 to stockholders of record as of March 29, 2019.


AFFO GUIDANCE

For the 2019 full year, the Company affirms that it expects to report total AFFO of between $4.95 and $5.15 per diluted share, including Real Estate AFFO of between $4.70 and $4.90 per diluted share, based on the following key assumptions:

(i)
investments for the Company’s Real Estate portfolio of between $750 million and $1.25 billion;

(ii)
dispositions from the Company’s Real Estate portfolio of between $500 million and $700 million; and

(iii)
total general and administrative expenses of between $75 million and $80 million.

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.


BALANCE SHEET AND CAPITALIZATION

“At-The-Market” (ATM) Program

During the 2019 first quarter, the Company issued 4,053,623 shares of common stock under its ATM program at a weighted-average price of $76.17 per share, for net proceeds of $303.8 million.

Subsequent to the 2019 first quarter, the Company issued 760,169 shares of common stock under its ATM program at a weighted-average price of $78.27 per share, for net proceeds of approximately $59 million.

Mortgage / Secured Debt Prepayment

During the 2019 first quarter, the Company prepaid mortgage debt totaling $199.6 million, with a weighted-average interest rate of approximately 5.0%.

Subsequent to the 2019 first quarter, the Company prepaid mortgage debt totaling $185.0 million, with a weighted-average interest rate of approximately 5.0%.


REAL ESTATE

Investments

During the 2019 first quarter, the Company completed investments totaling $239.6 million, consisting of five acquisitions for $188.0 million in aggregate and two completed capital investment projects at a total cost of $51.6 million, including transaction-related costs.

As of March 31, 2019, the Company had eight capital investment projects outstanding for an expected total investment of approximately $196.5 million, of which five projects totaling $103.3 million are currently expected to be completed during 2019.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 3


Dispositions

During the 2019 first quarter, the Company disposed of one property for gross proceeds of $5.0 million.

Composition

As of March 31, 2019, the Company’s net lease portfolio consisted of 1,168 properties, comprising 133.5 million square feet leased to 310 tenants, with a weighted-average lease term of 10.2 years and an occupancy rate of 98.2%. In addition, the Company owned 46 self-storage and two hotel operating properties, totaling approximately 3.4 million square feet.


INVESTMENT MANAGEMENT

W. P. Carey is the advisor to CPA:18 – Global (CPA:18), Carey Watermark Investors Incorporated (CWI 1) and Carey Watermark Investors 2 Incorporated (CWI 2, and together with CWI 1, the CWI REITs, and together with CPA:18, the Managed REITs), and Carey European Student Housing Fund I, L.P. (CESH, and together with the Managed REITs, the Managed Programs). As of March 31, 2019, the Managed Programs had total assets under management of approximately $7.6 billion.


* * * * *


Supplemental Information

The Company has provided supplemental unaudited financial and operating information regarding the 2019 first 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 May 3, 2019.


* * * * *


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, May 3, 2019 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. 3/31/2019 Earnings Release 8-K – 4


W. P. Carey Inc.

W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $19 billion and a diversified portfolio of operationally-critical commercial real estate that includes 1,168 net lease properties covering approximately 134 million square feet. For over four decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term 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

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 with regard to our liquidity, investment pipeline and opportunities. 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 Part I, Item 1A. Risk Factors in W. P. Carey’s Annual Report on Form 10-K for the year ended December 31, 2018. 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. 3/31/2019 Earnings Release 8-K – 5


W. P. CAREY INC.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
 
March 31, 2019
 
December 31, 2018
Assets
 
 
 
Investments in real estate:
 
 
 
Land, buildings and improvements (a)
$
9,396,426

 
$
9,251,396

Net investments in direct financing leases
1,279,122

 
1,306,215

In-place lease intangible assets and other
2,101,473

 
2,009,628

Above-market rent intangible assets
922,427

 
925,797

Investments in real estate
13,699,448

 
13,493,036

Accumulated depreciation and amortization (b)
(1,681,942
)
 
(1,564,182
)
Net investments in real estate
12,017,506

 
11,928,854

Equity investments in the Managed Programs and real estate (c)
320,066

 
329,248

Cash and cash equivalents
243,325

 
217,644

Due from affiliates
71,477

 
74,842

Other assets, net
584,855

 
711,507

Goodwill
918,673

 
920,944

Total assets
$
14,155,902

 
$
14,183,039

 
 
 
 
Liabilities and Equity
 
 
 
Debt:
 
 
 
Senior unsecured notes, net
$
3,513,268

 
$
3,554,470

Unsecured revolving credit facility
106,899

 
91,563

Non-recourse mortgages, net
2,503,321

 
2,732,658

Debt, net
6,123,488

 
6,378,691

Accounts payable, accrued expenses and other liabilities
452,920

 
403,896

Below-market rent and other intangible liabilities, net
217,506

 
225,128

Deferred income taxes
167,294

 
173,115

Dividends payable
176,965

 
172,154

Total liabilities
7,138,173

 
7,352,984

 
 
 
 
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued

 

Common stock, $0.001 par value, 450,000,000 shares authorized; 169,636,526 and 165,279,642 shares, respectively, issued and outstanding
170

 
165

Additional paid-in capital
8,483,301

 
8,187,335

Distributions in excess of accumulated earnings
(1,256,754
)
 
(1,143,992
)
Deferred compensation obligation
37,263

 
35,766

Accumulated other comprehensive loss
(252,683
)
 
(254,996
)
Total stockholders’ equity
7,011,297

 
6,824,278

Noncontrolling interests
6,432

 
5,777

Total equity
7,017,729

 
6,830,055

Total liabilities and equity
$
14,155,902

 
$
14,183,039

________
(a)
Includes $472.3 million and $470.7 million of amounts attributable to operating properties as of March 31, 2019 and December 31, 2018, respectively.
(b)
Includes $790.3 million and $734.8 million of accumulated depreciation on buildings and improvements as of March 31, 2019 and December 31, 2018, respectively, and $891.7 million and $829.4 million of accumulated amortization on lease intangibles as of March 31, 2019 and December 31, 2018, respectively.
(c)
Our equity investments in real estate joint ventures totaled $206.4 million and $221.7 million as of March 31, 2019 and December 31, 2018, respectively. Our equity investments in the Managed Programs totaled $113.7 million and $107.6 million as of March 31, 2019 and December 31, 2018, respectively.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 6


W. P. CAREY INC.
Quarterly Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share amounts)
 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Revenues
 
 
 
 
 
Real Estate:
 
 
 
 
 
Lease revenues
$
262,939

 
$
233,632

 
$
169,432

Operating property revenues
15,996

 
11,707

 
7,218

Lease termination income and other
3,270

 
2,952

 
942

 
282,205

 
248,291

 
177,592

Investment Management:
 
 
 
 
 
Asset management revenue
9,732

 
11,954

 
16,985

Reimbursable costs from affiliates
3,868

 
5,042

 
5,304

Structuring and other advisory revenue
2,518

 
8,108

 
1,929

 
16,118

 
25,104

 
24,218

 
298,323

 
273,395

 
201,810

Operating Expenses
 

 
 
 
 

Depreciation and amortization
112,379

 
93,321

 
65,957

General and administrative
21,285

 
17,449

 
18,583

Reimbursable tenant costs
13,171

 
10,145

 
6,219

Operating property expenses
10,594

 
7,844

 
5,670

Property expenses, excluding reimbursable tenant costs
9,912

 
8,319

 
4,229

Stock-based compensation expense
4,165

 
3,902

 
8,219

Reimbursable costs from affiliates
3,868

 
5,042

 
5,304

Subadvisor fees (a)
2,202

 
2,226

 
2,032

Merger and other expenses (b)
146

 
37,098

 
(37
)
Impairment charges

 

 
4,790

 
177,722

 
185,346

 
120,966

Other Income and Expenses
 

 
 
 
 

Interest expense
(61,313
)
 
(57,250
)
 
(38,074
)
Equity in earnings of equity method investments in the Managed Programs
   and real estate
5,491

 
15,268

 
15,325

Other gains and (losses)
955

 
13,215

 
(2,763
)
Gain on sale of real estate, net
933

 
99,618

 
6,732

Gain on change in control of interests (c)

 
47,814

 

 
(53,934
)
 
118,665

 
(18,780
)
Income before income taxes
66,667

 
206,714

 
62,064

Benefit from (provision for) income taxes
2,129

 
(11,436
)
 
6,002

Net Income
68,796

 
195,278

 
68,066

Net income attributable to noncontrolling interests
(302
)
 
(2,015
)
 
(2,792
)
Net Income Attributable to W. P. Carey
$
68,494

 
$
193,263

 
$
65,274

 
 
 
 
 
 
Basic Earnings Per Share
$
0.41

 
$
1.33

 
$
0.60

Diluted Earnings Per Share
$
0.41

 
$
1.33

 
$
0.60

Weighted-Average Shares Outstanding
 

 
 
 
 

Basic
167,234,121

 
145,480,858

 
108,057,940

Diluted
167,434,740

 
145,716,583

 
108,211,936

 
 
 
 
 
 
Dividends Declared Per Share
$
1.032

 
$
1.030

 
$
1.015

__________
(a)
The subadvisors for CWI 1, CWI 2 and CPA:18 (for multi-family properties) earn a percentage of gross fees recorded, which we account for as an expense and are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees. During 2018, CPA:18 sold five of its six multi-family properties (it sold the remaining multi-family property in January 2019 and we terminated the related subadvisory agreement). Refer to the Managed Programs Fee Summary section in Exhibit 99.2 of the Current Report on Form 8-K filed on May 3, 2019 for further information.
(b)
Amount for the three months ended December 31, 2018 is primarily comprised of costs incurred in connection with the CPA:17 Merger.
(c)
Amount for the three months ended December 31, 2018 includes a gain of $18.8 million recognized on the purchase of the remaining interests in six investments from CPA:17 in the CPA:17 Merger, which we had previously accounted for under the equity method. Amount for the three months ended December 31, 2018 also includes a gain of $29.0 million recognized on our previously held interest in shares of CPA:17 common stock in connection with the CPA:17 Merger.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 7


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, 2019
 
December 31, 2018
 
March 31, 2018
Net income attributable to W. P. Carey
$
68,494

 
$
193,263

 
$
65,274

Adjustments:
 
 
 
 
 
Depreciation and amortization of real property
111,103

 
92,018

 
64,580

Gain on sale of real estate, net
(933
)
 
(99,618
)
 
(6,732
)
Gain on change in control of interests (a)

 
(47,814
)
 

Impairment charges

 

 
4,790

Proportionate share of adjustments to equity in net income of partially owned entities
4,424

 
3,225

 
1,252

Proportionate share of adjustments for noncontrolling interests
(30
)
 
(762
)
 
(2,782
)
Total adjustments
114,564

 
(52,951
)
 
61,108

FFO (as defined by NAREIT) Attributable to W. P. Carey (b)
183,058

 
140,312

 
126,382

Adjustments:
 
 
 
 
 
Above- and below-market rent intangible lease amortization, net
15,927

 
14,985

 
11,802

Straight-line and other rent adjustments
(6,258
)
 
(6,096
)
 
(2,296
)
Tax (benefit) expense – deferred and other (c)
(4,928
)
 
6,288

 
(12,155
)
Stock-based compensation
4,165

 
3,902

 
8,219

Other amortization and non-cash items (d)
4,126

 
(10,206
)
 
5,146

Amortization of deferred financing costs
2,724

 
2,572

 
(194
)
Loss on extinguishment of debt
1,275

 
1,744

 
1,609

Merger and other expenses (e)
146

 
37,098

 
(37
)
Realized losses (gains) on foreign currency
96

 
(71
)
 
(1,515
)
Proportionate share of adjustments to equity in net income of partially owned entities
1,461

 
3,192

 
1,752

Proportionate share of adjustments for noncontrolling interests
(25
)
 
140

 
(343
)
Total adjustments
18,709

 
53,548

 
11,988

AFFO Attributable to W. P. Carey (b)
$
201,767

 
$
193,860

 
$
138,370

 
 
 
 
 
 
Summary
 
 
 
 
 
FFO (as defined by NAREIT) attributable to W. P. Carey (b)
$
183,058

 
$
140,312

 
$
126,382

FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share (b)
$
1.09

 
$
0.96

 
$
1.16

AFFO attributable to W. P. Carey (b)
$
201,767

 
$
193,860

 
$
138,370

AFFO attributable to W. P. Carey per diluted share (b)
$
1.21

 
$
1.33

 
$
1.28

Diluted weighted-average shares outstanding
167,434,740

 
145,716,583

 
108,211,936


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 8


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
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Net income from Real Estate attributable to W. P. Carey
$
53,408

 
$
151,611

 
$
45,300

Adjustments:
 
 
 
 
 
Depreciation and amortization of real property
111,103

 
92,018

 
64,580

Gain on sale of real estate, net
(933
)
 
(99,618
)
 
(6,732
)
Gain on change in control of interests (a)

 
(18,792
)
 

Impairment charges

 

 
4,790

Proportionate share of adjustments to equity in net income of partially owned entities
4,424

 
3,225

 
1,252

Proportionate share of adjustments for noncontrolling interests
(30
)
 
(762
)
 
(2,782
)
Total adjustments
114,564

 
(23,929
)
 
61,108

FFO (as defined by NAREIT) Attributable to W. P. Carey – Real Estate (b)
167,972

 
127,682

 
106,408

Adjustments:
 
 
 
 
 
Above- and below-market rent intangible lease amortization, net
15,927

 
14,985

 
11,802

Straight-line and other rent adjustments
(6,258
)
 
(6,096
)
 
(2,296
)
Other amortization and non-cash items (d)
3,036

 
(12,692
)
 
4,826

Stock-based compensation
2,800

 
2,774

 
4,306

Amortization of deferred financing costs
2,724

 
2,572

 
(194
)
Loss on extinguishment of debt
1,275

 
1,744

 
1,609

Tax expense (benefit) – deferred and other
490

 
(3,949
)
 
(9,518
)
Merger and other expenses (e)
146

 
37,098

 
(37
)
Realized losses (gains) on foreign currency
120

 
(61
)
 
(1,558
)
Proportionate share of adjustments to equity in net income of partially owned entities
115

 
(260
)
 
(71
)
Proportionate share of adjustments for noncontrolling interests
(25
)
 
140

 
(343
)
Total adjustments
20,350

 
36,255

 
8,526

AFFO Attributable to W. P. Carey – Real Estate (b)
$
188,322

 
$
163,937

 
$
114,934

 
 
 
 
 
 
Summary
 
 
 
 
 
FFO (as defined by NAREIT) attributable to W. P. Carey – Real Estate (b)
$
167,972

 
$
127,682

 
$
106,408

FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share – Real Estate (b)
$
1.00

 
$
0.87

 
$
0.98

AFFO attributable to W. P. Carey – Real Estate (b)
$
188,322

 
$
163,937

 
$
114,934

AFFO attributable to W. P. Carey per diluted share – Real Estate (b)
$
1.13

 
$
1.12

 
$
1.06

Diluted weighted-average shares outstanding
167,434,740

 
145,716,583

 
108,211,936

__________
(a)
AFFO and Real Estate AFFO amounts for the three months ended December 31, 2018 include a gain recognized on the purchase of the remaining interests in six investments from CPA:17 in the CPA:17 Merger, which we had previously accounted for under the equity method. AFFO amount for the three months ended December 31, 2018 includes a gain recognized on our previously held interest in shares of CPA:17 common stock in connection with the CPA:17 Merger.
(b)
FFO and AFFO are non-GAAP measures. See below for a description of FFO and AFFO.
(c)
Amount for the three months ended March 31, 2019 includes a current tax benefit and amount for the three months ended December 31, 2018 includes a current tax expense, both of which are excluded from AFFO as they were incurred as a result of the CPA:17 Merger.
(d)
Primarily represents unrealized gains and losses from foreign currency exchange movements and derivatives.
(e)
Amount for the three months ended December 31, 2018 is primarily comprised of costs incurred in connection with the CPA:17 Merger.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 9


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. (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. 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-based compensation, non-cash environmental accretion expense 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, restructuring and related compensation expenses 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 which 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.


W. P. Carey Inc. 3/31/2019 Earnings Release 8-K – 10
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
Exhibit 99.2

W. P. Carey Inc.
Supplemental Information
First Quarter 2019


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Important Disclosures About This Supplemental Package

As used in this supplemental package, the terms “W. P. Carey,” “WPC,” “we,” “us” and “our” include W. P. Carey Inc., its consolidated subsidiaries and its predecessors, unless otherwise indicated. “REIT” means real estate investment trust. “CPA:17 – Global” means Corporate Property Associates 17 – Global Incorporated. “CPA:18 – Global” means Corporate Property Associates 18 – Global Incorporated. “CWI REITs” means Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”). “Managed REITs” means CPA:18 – Global and the CWI REITs. “Managed Programs” means the Managed REITs and Carey European Student Housing Fund I, L.P. (“CESH”). “CPA:17 Merger” means our merger with CPA:17 – Global, which was completed on October 31, 2018. CPA:17 – Global was included in the Managed REITs prior to the CPA:17 Merger. “U.S.” means United States. “AUM” means assets under management. “ABR” means contractual minimum annualized base rent. “SEC” means Securities and Exchange Commission.

Amounts may not sum to totals due to rounding.

Important Note Regarding Non-GAAP Financial Measures

This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles (“GAAP”), including funds from operations (“FFO”); adjusted funds from operations (“AFFO”); earnings before interest, taxes, depreciation and amortization (“EBITDA”); adjusted EBITDA; pro rata cash net operating income (“pro rata cash NOI”); and normalized pro rata cash NOI. A description of these non-GAAP financial measures and reconciliations to their most directly comparable GAAP measures, as well as a description of other metrics presented, are provided within the Appendix to this supplemental package. FFO is a non-GAAP measure defined by the National Association of Real Estate Investments Trusts, Inc. (“NAREIT”), an industry trade group.




W. P. Carey Inc.
Supplemental Information – First Quarter 2019
Table of Contents
Overview
 
 
 
Financial Results
 
Statements of Income – Last Five Quarters
 
FFO and AFFO – Last Five Quarters
 
 
 
Balance Sheets and Capitalization
 
 
 
Real Estate
 
Investment Activity
 
 
 
Investment Management
 
 
 
Appendix
 
Adjusted EBITDA  Last Five Quarters
 



W. P. Carey Inc.
Overview – First Quarter 2019
Summary Metrics
As of or for the three months ended March 31, 2019.
Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment
 
 
 
 
 
 
 
Owned
Real Estate
 
Investment Management
 
Total
Revenues, including reimbursable costs – consolidated ($000s)
 
$
282,205

 
$
16,118

 
$
298,323

Net income attributable to W. P. Carey ($000s)
 
53,408

 
15,086

 
68,494

Net income attributable to W. P. Carey per diluted share
 
0.32

 
0.09

 
0.41

Normalized pro rata cash NOI from real estate ($000s) (a) (b)
 
265,289

 
N/A

 
265,289

Adjusted EBITDA ($000s) (a) (b)
 
253,202

 
12,374

 
265,576

AFFO attributable to W. P. Carey ($000s) (a) (b)
 
188,322

 
13,445

 
201,767

AFFO attributable to W. P. Carey per diluted share (a) (b)
 
1.13

 
0.08

 
1.21

 
 
 
 
 
 
 
 
 
 
Dividends declared per share – first quarter
 
 
 
 
 
1.032

Dividends declared per share – first quarter annualized
 
 
 
 
 
4.128

Dividend yield – annualized, based on quarter end share price of $78.33
 
 
 
 
 
5.3
%
Dividend payout ratio – for the three months ended March 31, 2019 (c)
 
 
 
 
 
85.3
%
 
 
 
 
 
 
 
 
 
 
Balance Sheet and Capitalization
 
 
 
 
 
 
 
 
 
Equity market capitalization – based on quarter end share price of $78.33 ($000s)
 
 
 
 
 
$
13,287,629

Pro rata net debt ($000s) (d)
 
 
 
 
 
 
 
 
6,131,918

Enterprise value ($000s)
 
 
 
 
 
 
 
 
19,419,547

 
 
 
 
 
 
 
 
 
 
Total consolidated debt ($000s)
 
 
 
 
 
 
 
 
6,123,488

Gross assets ($000s) (e)
 
 
 
 
 
 
 
 
14,946,192

Liquidity ($000s) (f)
 
 
 
 
 
 
 
 
1,636,426

 
 
 
 
 
 
 
 
 
 
Pro rata net debt to enterprise value (b)
 
 
 
 
 
 
 
 
31.6
%
Pro rata net debt to adjusted EBITDA (annualized) (a) (b)
 
 
 
 
 
5.8x

Total consolidated debt to gross assets
 
 
 
 
 
 
 
 
41.0
%
 
 
 
 
 
 
 
 
 
 
Weighted-average interest rate (b)
 
 
 
 
 
 
 
 
3.6
%
Weighted-average debt maturity (years) (b)
 
 
 
 
 
 
 
 
4.8

 
 
 
 
 
 
 
 
 
 
Moody's Investors Service – corporate rating
 
 
 
 
 
 
 
 
Baa2 (stable)

Standard & Poor's Ratings Services – issuer rating
 
 
 
 
 
 
 
 
BBB (stable)

 
 
 
 
 
 
 
 
 
 
Real Estate Portfolio (Pro Rata)
 
 
 
 
 
 
 
 
 
ABR ($’000) (g)
 
 
 
 
 
 
 
 
$
1,081,922

Number of net-leased properties
 
 
 
 
 
 
 
 
1,168

Number of operating properties (h)
 
 
 
 
 
 
 
 
48

Number of tenants – net-leased properties
 
 
 
 
 
 
 
 
310

 
 
 
 
 
 
 
 
 
 
ABR from investment grade tenants as a % of total ABR – net-leased properties (i)
 
 
 
 
 
28.6
%
 
 
 
 
 
 
 
 
 
 
Net-leased properties – square footage (millions)
 
 
 
 
 
 
 
 
133.5

 
 
 
 
 
 
 
 
 
 
Occupancy – net-leased properties
 
 
 
 
 
 
 
 
98.2
%
Weighted-average lease term (years)
 
 
 
 
 
 
 
 
10.2

 
 
 
 
 
 
 
 
 
 
Maximum commitment for capital investment projects expected to be completed during 2019 ($000s)
 
 
 
$
103,302

Acquisitions and completed capital investment projects – first quarter ($000s)
 
 
 
239,576

Dispositions – first quarter ($000s)
 
 
 
 
 
 
 
 
4,961

________
(a)
Normalized pro rata cash NOI, Adjusted EBITDA and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how certain non-GAAP measures are calculated.
(b)
Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.
(c)
Represents dividends declared per share divided by AFFO per diluted share on a year-to-date basis.
(d)
Represents total pro rata debt outstanding less consolidated cash and cash equivalents. See the Terms and Definitions section in the Appendix for a description of pro rata.
(e)
Gross assets represent consolidated total assets before accumulated depreciation on buildings and improvements. Gross assets are net of accumulated amortization on in-place lease intangible assets of $541.4 million and above-market rent intangible assets of $350.3 million.

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Investing for the long runTM | 1


W. P. Carey Inc.
Overview – First Quarter 2019

(f)
Represents availability on our Senior Unsecured Credit Facility plus consolidated cash and cash equivalents.
(g)
See the Terms and Definitions section in the Appendix for a description of ABR.
(h)
Comprised of 46 self-storage properties and two hotels.
(i)
Percentage of portfolio is based on ABR, as of March 31, 2019. Includes tenants or guarantors with investment grade ratings (20.2%) and subsidiaries of non-guarantor parent companies with investment grade ratings (8.4%). Investment grade refers to an entity with a rating of BBB- or higher from Standard & Poor’s Ratings Services or Baa3 or higher from Moody’s Investors Service. See the Terms and Definitions section in the Appendix for a description of ABR.

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Investing for the long runTM | 2


W. P. Carey Inc.
Overview – First Quarter 2019
Components of Net Asset Value
Dollars in thousands, except per share amounts.
Real Estate
 
 
Three Months Ended
Mar. 31, 2019
 
Annualized
Normalized pro rata cash NOI (a) (b)
 
 
$
265,289

 
$
1,061,156

 
 
 
 
 
 
Investment Management
 
 
 
 
 
Adjusted EBITDA (a) (b)
 
 
12,374

 
49,496

Selected Components of Adjusted EBITDA:
 
 
 
 
 
Asset management revenue (c)
 
 
9,732

 
38,928

Structuring and other advisory revenue (c)
 
 
2,518

 
N/A

Operating partnership interests in real estate cash flow of Managed REITs (d)
 
4,821

 
19,284

Back-end fees and interests associated with the Managed Programs
 
 
 
 
 
 
 
 
Balance Sheet – Selected Information (Consolidated Unless Otherwise Stated)
 
As of Mar. 31, 2019
Assets
 
 
 
 
 
Book value of real estate excluded from NOI (e)
 
 
 
 
$
270,250

Cash and cash equivalents
 
 
 
 
243,325

Due from affiliates
 
 
 
 
71,477

Other assets, net:
 
 
 
 
 
Investment in shares of a cold storage operator
 
 
 
 
$
113,330

Straight-line rent adjustments
 
 
 
 
102,344

Loans receivable
 
 
 
 
67,129

Restricted cash, including escrow
 
 
 
 
62,354

Accounts receivable
 
 
 
 
44,226

Deferred charges
 
 
 
 
40,772

Securities and derivatives
 
 
 
 
39,766

Taxes receivable
 
 
 
 
36,201

Investment in shares of Guggenheim Credit Income Fund
 
 
 
 
22,472

Prepaid expenses
 
 
 
 
13,403

Office lease right-of-use assets, net (f)
 
 
 
 
11,415

Other intangible assets, net
 
 
 
 
10,322

Deposits for construction
 
 
 
 
9,797

Deferred income taxes
 
 
 
 
6,492

Leasehold improvements, furniture and fixtures
 
 
 
2,252

Other
 
 
 
 
2,580

Total other assets, net
 
 
 
 
$
584,855

 
 
 
 
 
 
Liabilities
 
 
 
 
 
Total pro rata debt outstanding (b)
 
 
 
 
$
6,375,243

Dividends payable
 
 
 
 
176,965

Deferred income taxes
 
 
 
 
167,294

Accounts payable, accrued expenses and other liabilities:
 
 
 
 
 
Accounts payable and accrued expenses
 
 
 
 
$
148,253

Operating lease liabilities (f)
 
 
 
 
92,351

Prepaid and deferred rents
 
 
 
 
88,440

Accrued taxes payable
 
 
 
 
46,231

Tenant security deposits
 
 
 
 
37,147

Securities and derivatives
 
 
 
 
5,465

Other
 
 
 
 
35,033

Total accounts payable, accrued expenses and other liabilities
 
 
 
 
$
452,920


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Investing for the long runTM | 3


W. P. Carey Inc.
Overview – First Quarter 2019
Other
Ownership %
 
Number of Shares / Units Owned
 
NAV
 
Implied Value
 
 
 
A
 
B
 
A x B
Ownership in Managed Programs: (g)
 
 
 
 
 
 


CPA:18 – Global
3.6
%
 
5,259,524

 
$
8.73

(h) 
$
45,916

CWI 1
3.3
%
 
4,611,915

 
10.39

(h) 
47,918

CWI 2
3.0
%
 
2,769,907

 
11.41

(h) 
31,605

CESH
2.4
%
 
3,492

 
1,000.00

(i) 
3,492

 
 
 
 
 
 
 
$
128,931

________
(a)
Normalized pro rata cash NOI and Adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how they are calculated.
(b)
Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.
(c)
Amounts are gross of fees paid to the respective subadvisors of CWI 1, CWI 2 and CPA:18 Global (for multi-family properties). During 2018, CPA:18 – Global sold five of its six multi-family properties (it sold the remaining multi-family property in January 2019 and we terminated the related subadvisory agreement).
(d)
We are entitled to receive distributions of up to 10% of the Available Cash of each of the Managed REITs, as defined in their respective operating partnership agreements. Pursuant to the terms of their subadvisory agreements, however, 20% of the distributions of Available Cash we receive from CWI 1 and 25% of the distributions of Available Cash we receive from CWI 2 are paid to their respective subadvisors. Amounts for CWI 1 and CWI 2 are net of fees paid to their respective subadvisors.
(e)
Represents the value of real estate not included in net operating income, such as vacant assets, in-progress build-to-suit properties, and a common equity interest in a Las Vegas retail center.
(f)
We adopted Accounting Standards Update 2016-02, Leases (Topic 842) for our interim and annual periods beginning January 1, 2019, whereby the rights and obligations of lessees under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. As a result, we recognized $113.7 million of land lease right-of-use assets included in Investments in real estate, $11.4 million of office lease right-of-use assets in Other assets, net, and $92.4 million of corresponding operating lease liabilities for certain operating office and land lease arrangements in Accounts payable, accrued expenses and other liabilities as of March 31, 2019.
(g)
Separate from operating partnership interests in the Managed REITs and our interests in unconsolidated real estate joint ventures with our affiliate, CPA:18 Global.
(h)
We calculated the estimated net asset values per share (“NAVs”) by relying in part on an estimate of the fair market values of the respective real estate portfolios adjusted to give effect to mortgage loans, both provided by third parties, as well as other adjustments. Refer to the SEC filings of the Managed REITs for the calculation methodologies of the respective NAVs.
(i)
We own limited partnership units of CESH at its private placement price of $1,000 per unit; we do not intend to calculate a NAV for CESH.

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Investing for the long runTM | 4




W. P. Carey Inc.
Financial Results
First Quarter 2019












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Investing for the long runTM | 5


W. P. Carey Inc.
Financial Results – First Quarter 2019
Consolidated Statements of Income – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Mar. 31, 2019
 
Dec. 31, 2018
 
Sep. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
Revenues
 
 
 
 
 
 
 
 
 
Real Estate:
 
 
 
 
 
 
 
 
 
Lease revenues
$
262,939

 
$
233,632

 
$
173,067

 
$
168,367

 
$
169,432

Operating property revenues
15,996

 
11,707

 
4,282

 
4,865

 
7,218

Lease termination income and other
3,270

 
2,952

 
1,981

 
680

 
942

 
282,205

 
248,291

 
179,330

 
173,912

 
177,592

Investment Management:
 
 
 
 
 
 
 
 
 
Asset management revenue
9,732

 
11,954

 
17,349

 
17,268

 
16,985

Reimbursable costs from affiliates
3,868

 
5,042

 
6,042

 
5,537

 
5,304

Structuring and other advisory revenue
2,518

 
8,108

 
6,663

 
4,426

 
1,929

 
16,118

 
25,104

 
30,054

 
27,231

 
24,218

 
298,323

 
273,395

 
209,384

 
201,143

 
201,810

Operating Expenses
 
 
 
 
 
 
 
 
 
Depreciation and amortization
112,379

 
93,321

 
67,825

 
64,337

 
65,957

General and administrative
21,285

 
17,449

 
15,863

 
16,442

 
18,583

Reimbursable tenant costs
13,171

 
10,145

 
5,979

 
5,733

 
6,219

Operating property expenses
10,594

 
7,844

 
3,055

 
3,581

 
5,670

Property expenses, excluding reimbursable tenant costs
9,912

 
8,319

 
4,898

 
5,327

 
4,229

Stock-based compensation expense
4,165

 
3,902

 
2,475

 
3,698

 
8,219

Reimbursable costs from affiliates
3,868

 
5,042

 
6,042

 
5,537

 
5,304

Subadvisor fees (a)
2,202

 
2,226

 
3,127

 
1,855

 
2,032

Merger and other expenses (b)
146

 
37,098

 
1,673

 
2,692

 
(37
)
Impairment charges

 

 

 

 
4,790

 
177,722

 
185,346

 
110,937

 
109,202

 
120,966

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Interest expense
(61,313
)
 
(57,250
)
 
(41,740
)
 
(41,311
)
 
(38,074
)
Equity in earnings of equity method investments in the Managed Programs and real estate
5,491

 
15,268

 
18,363

 
12,558

 
15,325

Other gains and (losses)
955

 
13,215

 
8,875

 
10,586

 
(2,763
)
Gain on sale of real estate, net
933

 
99,618

 
343

 
11,912

 
6,732

Gain on change in control of interests (c)

 
47,814

 

 

 

 
(53,934
)
 
118,665

 
(14,159
)
 
(6,255
)
 
(18,780
)
Income before income taxes
66,667

 
206,714

 
84,288

 
85,686

 
62,064

Benefit from (provision for) income taxes
2,129

 
(11,436
)
 
(2,715
)
 
(6,262
)
 
6,002

Net Income
68,796

 
195,278

 
81,573

 
79,424

 
68,066

Net income attributable to noncontrolling interests
(302
)
 
(2,015
)
 
(4,225
)
 
(3,743
)
 
(2,792
)
Net Income Attributable to W. P. Carey
$
68,494

 
$
193,263

 
$
77,348

 
$
75,681

 
$
65,274

 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
$
0.41

 
$
1.33

 
$
0.71

 
$
0.70

 
$
0.60

Diluted Earnings Per Share
$
0.41

 
$
1.33

 
$
0.71

 
$
0.70

 
$
0.60

Weighted-Average Shares Outstanding
 
 
 
 
 
 
 
 
 
Basic
167,234,121

 
145,480,858

 
108,073,969

 
108,059,394

 
108,057,940

Diluted
167,434,740

 
145,716,583

 
108,283,666

 
108,234,934

 
108,211,936

 
 
 
 
 
 
 
 
 
 
Dividends Declared Per Share
$
1.032

 
$
1.030

 
$
1.025

 
$
1.020

 
$
1.015

________
(a)
The subadvisors for CWI 1, CWI 2 and CPA:18 Global (for multi-family properties) earn a percentage of gross fees recorded, which we account for as an expense and are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees. During 2018, CPA:18 – Global sold five of its six multi-family properties (it sold the remaining multi-family property in January 2019 and we terminated the related subadvisory agreement).
(b)
Amounts for the three months ended December 31, 2018, September 30, 2018 and June 30, 2018 are primarily comprised of costs incurred in connection with the CPA:17 Merger.
(c)
Amount for the three months ended December 31, 2018 includes a gain of $18.8 million recognized on the purchase of the remaining interests in six investments from CPA:17 – Global in the CPA:17 Merger, which we had previously accounted for under the equity method. Amount for the three months ended December 31, 2018 also includes a gain of $29.0 million recognized on our previously held interest in shares of CPA:17 – Global common stock in connection with the CPA:17 Merger.

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Investing for the long runTM | 6


W. P. Carey Inc.
Financial Results – First Quarter 2019
Statements of Income, Real Estate – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Mar. 31, 2019
 
Dec. 31, 2018
 
Sep. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
Revenues
 
 
 
 
 
 
 
 
 
Lease revenues
$
262,939

 
$
233,632

 
$
173,067

 
$
168,367

 
$
169,432

Operating property revenues
15,996

 
11,707

 
4,282

 
4,865

 
7,218

Lease termination income and other
3,270

 
2,952

 
1,981

 
680

 
942

 
282,205

 
248,291

 
179,330

 
173,912

 
177,592

Operating Expenses
 
 
 
 
 
 
 
 
 
Depreciation and amortization
111,413

 
92,330

 
66,837

 
63,374

 
64,920

General and administrative
15,188

 
13,197

 
11,349

 
10,599

 
12,065

Reimbursable tenant costs
13,171

 
10,145

 
5,979

 
5,733

 
6,219

Operating property expenses
10,594

 
7,844

 
3,055

 
3,581

 
5,670

Property expenses, excluding reimbursable tenant costs
9,912

 
8,319

 
4,898

 
5,327

 
4,229

Stock-based compensation expense
2,800

 
2,774

 
1,380

 
1,990

 
4,306

Merger and other expenses (a)
146

 
37,098

 
1,673

 
2,692

 
(37
)
Impairment charges

 

 

 

 
4,790

 
163,224

 
171,707

 
95,171

 
93,296

 
102,162

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Interest expense
(61,313
)
 
(57,250
)
 
(41,740
)
 
(41,311
)
 
(38,074
)
Other gains and (losses)
970

 
15,075

 
8,197

 
9,630

 
(2,887
)
Gain on sale of real estate, net
933

 
99,618

 
343

 
11,912

 
6,732

Equity in (losses) earnings of equity method investments in real estate
(78
)
 
1,755

 
4,699

 
3,529

 
3,358

Gain on change in control of interests (b)

 
18,792

 

 

 

 
(59,488
)
 
77,990

 
(28,501
)
 
(16,240
)
 
(30,871
)
Income before income taxes
59,493

 
154,574

 
55,658

 
64,376

 
44,559

(Provision for) benefit from income taxes
(6,159
)
 
(948
)
 
(424
)
 
(1,317
)
 
3,533

Net Income from Real Estate
53,334


153,626


55,234


63,059


48,092

Net loss (income) attributable to noncontrolling interests
74


(2,015
)

(4,225
)

(3,743
)

(2,792
)
Net Income from Real Estate Attributable to W. P. Carey
$
53,408

 
$
151,611

 
$
51,009

 
$
59,316

 
$
45,300

 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
$
0.32

 
$
1.04

 
$
0.47

 
$
0.55

 
$
0.42

Diluted Earnings Per Share
$
0.32

 
$
1.04

 
$
0.47

 
$
0.55

 
$
0.42

Weighted-Average Shares Outstanding
 
 
 
 
 
 
 
 
 
Basic
167,234,121

 
145,480,858

 
108,073,969

 
108,059,394

 
108,057,940

Diluted
167,434,740

 
145,716,583

 
108,283,666

 
108,234,934

 
108,211,936

________
(a)
Amounts for the three months ended December 31, 2018, September 30, 2018 and June 30, 2018 are primarily comprised of costs incurred in connection with the CPA:17 Merger.
(b)
Amount for the three months ended December 31, 2018 represents a gain recognized on the purchase of the remaining interests in six investments from CPA:17 – Global in the CPA:17 Merger, which we had previously accounted for under the equity method.

397791177_wpclogoa01a01a30.jpg 
 
Investing for the long runTM | 7


W. P. Carey Inc.
Financial Results – First Quarter 2019
Statements of Income, Investment Management – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Mar. 31, 2019
 
Dec. 31, 2018
 
Sep. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
Revenues
 
 
 
 
 
 
 
 
 
Asset management revenue
$
9,732

 
$
11,954

 
$
17,349

 
$
17,268

 
$
16,985

Reimbursable costs from affiliates
3,868

 
5,042

 
6,042

 
5,537

 
5,304

Structuring and other advisory revenue
2,518

 
8,108

 
6,663

 
4,426

 
1,929

 
16,118

 
25,104

 
30,054

 
27,231

 
24,218

Operating Expenses
 
 
 
 
 
 
 
 
 
General and administrative
6,097

 
4,252

 
4,514

 
5,843

 
6,518

Reimbursable costs from affiliates
3,868

 
5,042

 
6,042

 
5,537

 
5,304

Subadvisor fees (a)
2,202

 
2,226

 
3,127

 
1,855

 
2,032

Stock-based compensation expense
1,365

 
1,128

 
1,095

 
1,708

 
3,913

Depreciation and amortization
966

 
991

 
988

 
963

 
1,037

 
14,498

 
13,639

 
15,766

 
15,906

 
18,804

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Equity in earnings of equity method investments in the Managed Programs
5,569

 
13,513

 
13,664

 
9,029

 
11,967

Other gains and (losses)
(15
)
 
(1,860
)
 
678

 
956

 
124

Gain on change in control of interests (b)

 
29,022

 

 

 

 
5,554

 
40,675

 
14,342

 
9,985

 
12,091

Income before income taxes
7,174