W. P. Carey Announces Third Quarter Financial Results

Thu Nov 8, 2012 9:21am EST

* Reuters is not responsible for the content in this press release.

  NEW YORK, NY, Nov 08 (Marketwire) -- 
W. P. Carey Inc. (NYSE: WPC), a real estate investment trust ("REIT"),
today reported financial results for the third quarter ended September
30, 2012. Results do not fully reflect the impact of the merger with its
affiliate, Corporate Property Associates 15 Incorporated ("CPA(R):15"),
which closed on September 28, 2012. Results for the combined companies
can be accessed at http://ir.wpcarey.com/Cache/c15118855.html.

    QUARTERLY RESULTS


--  Funds from operations -- as adjusted (AFFO) for the third quarter of
    2012 decreased compared to the third quarter of 2011, to $33.9 million
    or $0.82 per diluted share from $41.6 million or $1.03 per diluted
    share, respectively. AFFO for the nine months ended September 30, 2012
    was $101.8 million or $2.48 per diluted share, compared to $153.6
    million or $3.80 per diluted share for the comparable period in 2011.
    The higher levels in the 2011 periods were primarily due to $52.5
    million of revenues earned from the merger of two of our managed
    CPA(R) REITS in May 2011.
--  Cash flow from operating activities for the nine months ended
    September 30, 2012 was $31.7 million compared to $62.7 million for the
    prior year period.
--  Total revenues net of reimbursed expenses for the third quarter of
    2012 was $51.2 million compared to $62.0 million for the third quarter
    of 2011. Total revenues net of reimbursed expenses for the nine months
    ended September 30, 2012 was $148.9 million compared to $219.4 million
    for the prior year period. Reimbursed expenses are excluded from total
    revenues because they have no impact on net income.
--  Total adjusted revenue, or revenue on a pro-rata basis, for the nine
    months ended September 30, 2012 was $233.5 million compared to $243.9
    million for the prior year period.
--  Net income attributable to W. P. Carey common stockholders for the
    third quarter of 2012 was $2.6 million, compared to $25.2 million for
    the same period in 2011. For the nine months ended September 30, 2012,
    net income was $46.7 million compared to $130.0 million for the
    comparable period in 2011.
--  We received approximately $8.5 million in cash distributions from our
    equity ownership in the CPA(R) REITs for the quarter ended
    September 30, 2012 compared with $6.1 million for the comparable
    period in 2011.
--  Further information concerning AFFO and total adjusted revenue --
    non-GAAP supplemental performance metrics -- is presented in the
    accompanying tables.

    

Commenting on the Company's quarterly results, Trevor Bond,
President and Chief Executive Officer, noted, "The merger and REIT
conversion were the strategic highlights of our third quarter and
positively impacted the liquidity in our stock and interest from
institutional and individual investors as expected. From a results
perspective, underscoring the cyclicality of the incentive fees we earn
through fund liquidations and the structuring revenues we earn through
new investments, our headline numbers are off from last year, primarily
because we earned a $52 million fee in 2011 following the merger of
CPA(R):14 and CPA(R):16 - Global and because investment volume has been
lighter so far this year compared to the same period last year. That
said, the pipeline going into the fourth quarter is strong, although we
know that we can't count on a deal until it's closed, of course. More
importantly, the figures by which we measure the performance of our core
business, which are set forth in the supplemental information package
that we filed today, demonstrate continued stability and remain in line
with growth expectations, especially when one looks at the pro forma
year-to-date performance of the combined companies. We look forward to
breaking those numbers down in more detail for our investors on today's
earnings call."

    CONVERSION TO REIT AND MERGER WITH CPA(R):15 


--  W. P. Carey's conversion to a REIT and merger with CPA(R):15 closed
    on September 28, 2012 and W. P. Carey Inc. commenced trading on the
    New York Stock Exchange as a REIT effective October 1, 2012.
--  As a result of our conversion to REIT status, W. P. Carey was
    immediately eligible for inclusion in the FTSE NAREIT All REITs index
    and was added to the MSCI US REIT and MSCI Mid Cap 450 Indices on
    October 15, 2012.
--  Unaudited combined company AFFO for the nine months ended September
    30, 2012 would have been $2.78 per share.

    

W. P. CAREY OWNED PORTFOLIO UPDATE


--  In the third quarter of 2012, W. P. Carey acquired five retail stores
    leased to Walgreen Co. The properties, comprising a total of
    approximately 74,000 square feet, are located in Virginia Beach,
    Virginia; Florence, Alabama; Snellville, Georgia; Concord, North
    Carolina; and Rockport, Texas. The purchase price was approximately
    $25 million.
--  During the third quarter, W. P. Carey secured approximately $42
    million represented refinancing of maturing debt on three properties;
    interest rates on these re-financings averaged more than 190 basis
    points below the rates on existing financings. Additionally, financing
    of properties used primarily to acquire a joint venture interest from
    an unrelated third party was $140 million.
--  The W. P. Carey owned portfolio currently consists of 430 properties
    comprising 39 million square feet leased to more than 130 corporate
    tenants. The average lease term of the portfolio has increased to 9.1
    years and the occupancy rate is approximately 98.4%.

    

ASSET MANAGEMENT UPDATE 


--  W. P. Carey is the advisor to the CPA(R) REITs and CWI, which had
    aggregate real estate assets of $7.3 billion and total assets of $7.8
    billion as of September 30, 2012.
--  The average occupancy rate for the 81 million square feet owned by the
    CPA(R) REITs was approximately 97.9%.
--  The W. P. Carey Group's assets under ownership and management total
    approximately $13.3 billion as of September 30, 2012.

    

CPA(R):17 - GLOBAL ACTIVITY


--  We have raised more than $2.6 billion on behalf of CPA(R):17 -
    Global since beginning fundraising in December 2007.
--  Investment volume for CPA(R):17 - Global in the third quarter of
    2012 was approximately $173.7 million. This includes acquisitions of
    an automotive dealership portfolio of $66 million, an industrial
    headquarters facility located in Avon, Ohio leased to Bearing
    Technologies, LLC, two for-profit education facilities located in
    Savannah, Georgia and Montgomery, Alabama, and a corporate
    headquarters building in Warrenville, Illinois, as well as financing
    for the construction of an industrial warehouse located in Zary,
    Poland.

    

CAREY WATERMARK INVESTORS ACTIVITY


--  From the beginning of its initial public offering through November 6,
    2012, we have raised approximately $130 million on behalf of Carey
    Watermark Investors ("CWI"), our lodging-focused non-traded REIT
    offering and invested approximately $128 million.

    DISTRIBUTIONS

--  Our Board of Directors raised the quarterly cash distribution to
    $0.650 per share for the third quarter of 2012. The distribution --
    our 46th consecutive quarterly increase -- represented a 15% increase
    and was paid on October 16, 2012 to shareholders of record as of
    October 2, 2012.

    

CONFERENCE CALL & WEBCAST
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 Time: Thursday, November 8, 2012 at 11:00 AM (ET)

Call-in Number: 800-860-2442
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 Webcast:
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    W. P. Carey Inc. 

    W. P. Carey Inc. is a publicly traded REIT (NYSE: WPC) that provides
long-term sale-leaseback and build-to-suit financing for companies
worldwide and manages an investment portfolio of approximately $13.3
billion. W. P. Carey Inc. is the successor to W. P. Carey & Co. LLC,
which had its origins in 1973. The largest owner/manager of net lease
assets, WPC's 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. Our portfolio of
long-term leases with creditworthy tenants has an established history of
generating stable cash flows that have enabled the Company to deliver
consistent and rising dividend income to investors for nearly four
decades. www.wpcarey.com 

    Individuals interested in receiving future updates on W. P. Carey via
e-mail can register at www.wpcarey.com/alerts.

    This press release contains forward-looking statements within the meaning
of the Federal securities laws. Examples of such forward-looking
statements include, but are not limited to, the statements made by Mr.
Bond. A number of factors could cause the Company's actual results,
performance or achievement to differ materially from those anticipated.
Among those risks, trends and uncertainties are the general economic
climate; the supply of and demand for office and industrial properties;
interest rate levels; the availability of financing; and other risks
associated with the acquisition and ownership of properties, including
risks that the tenants will not pay rent, or that costs may be greater
than anticipated. For further information on factors that could impact
the Company, reference is made to the Company's filings with the
Securities and Exchange Commission.

                              W. P. CAREY INC.

               CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
             (in thousands, except share and per share amounts)

                            Three Months Ended         Nine Months Ended
                               September 30,             September 30,
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011
                         -----------  -----------  -----------  ----------- 
Revenues
  Asset management
   revenue               $    15,850  $    14,840  $    47,088  $    51,279 
  Structuring revenue          8,316       21,221       19,576       42,901 
  Incentive, termination
   and subordinated
   disposition revenue             -            -            -       52,515 
  Wholesaling revenue          4,012        2,586       11,878        8,788 
  Reimbursed costs from
   affiliates                 19,879       14,707       59,100       49,485 
  Lease revenues              16,714       17,001       51,265       46,682 
  Other real estate
   income                      6,265        6,303       19,089       17,212 
                         -----------  -----------  -----------  ----------- 
                              71,036       76,658      207,996      268,862 
                         -----------  -----------  -----------  ----------- 
Operating Expenses
  General and
   administrative            (54,826)     (25,187)    (108,317)     (71,095)
  Reimbursable costs         (19,879)     (14,707)     (59,100)     (49,485)
  Depreciation and
   amortization               (6,571)      (6,323)     (19,928)     (16,552)
  Property expenses           (2,426)      (3,231)      (7,863)      (8,547)
  Other real estate
   expenses                   (2,600)      (2,725)      (7,530)      (8,224)
  Impairment charges          (5,535)           -       (5,535)           - 
                         -----------  -----------  -----------  ----------- 
                             (91,837)     (52,173)    (208,273)    (153,903)
                         -----------  -----------  -----------  ----------- 
Other Income and
 Expenses
  Other interest income          252          323          910        1,558 
  Income from equity
   investments in real
   estate and the REITs       10,477       16,068       52,808       37,356 
  Gain on change in
   control of interests       20,794            -       20,794       27,859 
  Other income and
   (expenses)                    502         (294)       2,026        4,945 
  Interest expense            (7,868)      (5,989)     (22,459)     (15,660)
                         -----------  -----------  -----------  ----------- 
                              24,157       10,108       54,079       56,058 
                         -----------  -----------  -----------  ----------- 
  Income from continuing
   operations before
   income taxes                3,356       34,593       53,802      171,017 
  Provision for income
   taxes                        (379)      (5,929)        (192)     (38,526)
                         -----------  -----------  -----------  ----------- 
  Income from continuing
   operations                  2,977       28,664       53,610      132,491 
                         -----------  -----------  -----------  ----------- 
Discontinued Operations
  (Loss) income from
   operations of
   discontinued
   properties                   (342)         916         (870)       1,146 
  (Loss) gain on sale of
   real estate                  (409)         612         (888)       1,272 
  Impairment charges               -       (4,934)      (6,727)      (4,975)
                         -----------  -----------  -----------  ----------- 
  Loss from discontinued
   operations, net of
   tax                          (751)      (3,406)      (8,485)      (2,557)
                         -----------  -----------  -----------  ----------- 
Net Income                     2,226       25,258       45,125      129,934 
  Add: Net loss
   attributable to
   noncontrolling
   interests                     325          581        1,383        1,295 
  Less: Net loss
   (income) attributable
   to redeemable
   noncontrolling
   interest                       37         (637)         146       (1,241)
                         -----------  -----------  -----------  ----------- 
Net Income Attributable
 to W. P. Carey Common
 Stockholders            $     2,588  $    25,202  $    46,654  $   129,988 
                         ===========  ===========  ===========  =========== 

Basic Earnings Per Share
  Income from continuing
   operations
   attributable to W. P.
   Carey common
   stockholders          $      0.08  $      0.70  $      1.35  $      3.28 
  Loss from discontinued
   operations
   attributable to W. P.
   Carey common
   stockholders                (0.02)       (0.08)       (0.21)       (0.06)
                         -----------  -----------  -----------  ----------- 
  Net income
   attributable to W. P.
   Carey common
   stockholders          $      0.06  $      0.62  $      1.14  $      3.22 
                         ===========  ===========  ===========  =========== 

Diluted Earnings Per
 Share
  Income from continuing
   operations
   attributable to W. P.
   Carey common
   stockholders          $      0.08  $      0.70  $      1.33  $      3.25 
  Loss from discontinued
   operations
   attributable to W. P.
   Carey common
   stockholders                (0.02)       (0.08)       (0.21)       (0.06)
                         -----------  -----------  -----------  ----------- 
  Net income
   attributable to W. P.
   Carey common
   stockholders          $      0.06  $      0.62  $      1.12  $      3.19 
                         ===========  ===========  ===========  =========== 

Weighted Average Shares
 Outstanding
  Basic                   40,366,298   39,861,064   40,398,433   39,794,506 
                         ===========  ===========  ===========  =========== 
  Diluted                 41,127,404   40,404,520   41,029,578   40,424,316 
                         ===========  ===========  ===========  =========== 

Amounts Attributable to
 W. P. Carey Common
 Stockholders
  Income from continuing
   operations, net of
   tax                   $     3,339  $    28,608  $    55,139  $   132,545 
  Loss from discontinued
   operations, net of
   tax                          (751)      (3,406)      (8,485)      (2,557)
                         -----------  -----------  -----------  ----------- 
  Net income             $     2,588  $    25,202  $    46,654  $   129,988 
                         ===========  ===========  ===========  =========== 

Distributions Declared
 Per Common Share        $     0.650  $     0.560  $     1.782  $     1.622 
                         ===========  ===========  ===========  =========== 

                              W. P. CAREY INC.

             CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                               (in thousands)

                                                      Nine Months Ended
                                                        September 30,
                                                 -------------------------- 
                                                     2012          2011
                                                 ------------  ------------ 
Cash Flows - Operating Activities
Net income                                       $     45,125  $    129,934 
Adjustments to net income:
  Depreciation and amortization, including
   intangible assets and deferred financing
   costs                                               22,532        20,160 
  Income from equity investments in real estate
   and the REITs in excess of distributions
   received                                           (18,557)         (835)
  Straight-line rent and financing lease
   adjustments                                         (2,229)       (2,039)
  Amortization of deferred revenue                     (7,077)       (3,932)
  Gain on deconsolidation of a subsidiary                   -        (1,008)
  Gain on sale of real estate                          (1,564)         (264)
  Unrealized gain on foreign currency
   transactions and others                                (17)          (79)
  Realized loss (gain) on foreign currency
   transactions and others                                594        (1,134)
  Management and disposition income received in
   shares of affiliates                               (21,272)      (62,493)
  Gain on conversion of shares                            (15)       (3,834)
  Gain on change in control of interests              (20,794)      (27,859)
  Impairment charges                                   12,262         4,975 
  Stock-based compensation expense                     19,560        13,026 
  Deferred acquisition revenue received                17,017        18,128 
  Increase in structuring revenue receivable           (8,502)      (17,732)
  (Decrease) increase in income taxes, net            (14,885)        5,907 
  Net changes in other operating assets and
   liabilities                                          9,561        (8,269)
                                                 ------------  ------------ 
Net cash provided by operating activities              31,739        62,652 
                                                 ------------  ------------ 

Cash Flows - Investing Activities
  Cash paid to shareholders of CPA(R):15 in
   connection with the Merger                        (152,356)            - 
  Cash acquired in connection with the Merger         178,945             - 
  Distributions received from equity investments
   in real estate and the REITs in excess of
   equity income                                       27,241        13,870 
  Capital contributions to equity investments            (377)       (2,297)
  Purchase of interests in CPA(R):16 - Global                 -      (121,315)
  Purchases of real estate and equity
   investments in real estate                          (2,679)      (24,323)
  VAT refunded in connection with acquisitions
   of real estate                                           -         5,035 
  Capital expenditures                                 (2,930)       (6,731)
  Cash acquired on acquisition of subsidiaries              -            57 
  Proceeds from sale of real estate                    32,586        10,998 
  Proceeds from sale of securities                        314           777 
  Funding of short-term loans to affiliates                 -       (96,000)
  Proceeds from repayment of short-term loans to
   affiliates                                               -        95,000 
  Funds placed in escrow                              (11,716)       (5,282)
  Funds released from escrow                           13,540         2,326 
                                                 ------------  ------------ 
Net cash provided by (used in) investing
 activities                                            82,568      (127,885)
                                                 ------------  ------------ 

Cash Flows - Financing Activities
  Distributions paid                                  (69,180)      (63,060)
  Contributions from noncontrolling interests           2,319         2,341 
  Distributions paid to noncontrolling interests       (1,866)       (5,310)
  Purchase of noncontrolling interest                       -        (7,502)
  Purchase of treasury stock from related party       (25,000)            - 
  Scheduled payments of mortgage principal            (12,455)      (22,893)
  Proceeds from mortgage financing                      1,250        20,848 
  Proceeds from senior credit facility                215,000       251,410 
  Repayments of senior credit facility                (30,000)     (140,000)
  Payment of financing costs                           (1,687)       (1,562)
  Proceeds from issuance of shares                      5,964         1,034 
  Windfall tax benefit associated with stock-
   based compensation awards                            8,865         2,051 
                                                 ------------  ------------ 
Net cash provided by financing activities              93,210        37,357 
                                                 ------------  ------------ 

Change in Cash and Cash Equivalents During the
 Period
    Effect of exchange rate changes on cash               (70)          278 
                                                 ------------  ------------ 
    Net increase (decrease) in cash and cash
     equivalents                                      207,447       (27,598)
  Cash and cash equivalents, beginning of period       29,297        64,693 
                                                 ------------  ------------ 
  Cash and cash equivalents, end of period       $    236,744  $     37,095 
                                                 ============  ============ 

                              W. P. CAREY INC.

                      Financial Highlights (Unaudited)
                  (in thousands, except per share amounts)


    
These financial highlights include non-GAAP financial measures,
including earnings before interest, taxes, depreciation and amortization
("EBITDA") and funds from operations -- as adjusted ("AFFO"). A
description of these non-GAAP financial measures and reconciliations to
the most directly comparable GAAP measures is provided on the following
pages.

                                Three Months Ended       Nine Months Ended
                                   September 30,           September 30,
                              ----------------------  ----------------------
                                 2012        2011        2012        2011
                              ----------  ----------  ----------  ----------
EBITDA (a)
Investment management         $    1,465  $   15,006  $    7,928  $   90,074
Real estate ownership             16,132      29,646      82,282     114,644
                              ----------  ----------  ----------  ----------
Total                         $   17,597  $   44,652  $   90,210  $  204,718
                              ==========  ==========  ==========  ==========

AFFO (a)
Investment management         $   (4,513) $   14,065  $    6,257  $   79,084
Real estate ownership             38,432      27,485      95,553      74,559
                              ----------  ----------  ----------  ----------
Total                         $   33,919  $   41,550  $  101,810  $  153,643
                              ==========  ==========  ==========  ==========

EBITDA Per Share (Diluted)
 (a)
Investment management         $     0.04  $     0.37  $     0.19  $     2.23
Real estate ownership               0.39        0.73        2.01        2.83
                              ----------  ----------  ----------  ----------
Total                         $     0.43  $     1.10  $     2.20  $     5.06
                              ==========  ==========  ==========  ==========

AFFO Per Share (Diluted) (a)
Investment management         $    (0.11) $     0.35  $     0.15  $     1.96
Real estate ownership               0.93        0.68        2.33        1.84
                              ----------  ----------  ----------  ----------
Total                         $     0.82  $     1.03  $     2.48  $     3.80
                              ==========  ==========  ==========  ==========

Distributions declared                                $   92,856  $   42,561
                                                      ==========  ==========


    __________

 (a) Effective April 1, 2012, we include cash distributions and deferred
     revenue received and earned from the operating partnerships of CPA(R):16 
     - Global, CPA(R):17 - Global and CWI in our Real Estate Ownership
     segment. Results of operations for the prior year periods have been
     reclassified to conform to the current period presentation.
     Additionally, during the third quarter of 2011, CPA(R):16 - Global
     finalized its assessment of the fair values of the assets acquired and 
     liabilities assumed in connection with the CPA(R):14/16 merger and made
     certain adjustments during that quarter. Our proportionate share of the
     adjustments before income taxes was approximately $2.6 million. In
     accordance with current accounting guidance, we have retrospectively
     adjusted our results of operations in our Real Estate Ownership segment
     for the three and nine months ended September 30, 2011 to include such 
     adjustments.

                              W. P. CAREY INC.

             Reconciliation of Net Income to EBITDA (Unaudited)
             (in thousands, except share and per share amounts)

                             Three Months Ended         Nine Months Ended
                                September 30,             September 30,
                          ------------------------  ------------------------
                              2012         2011         2012         2011
                          -----------  -----------  -----------  -----------
Investment Management
Net income from
 investment management
 attributable to W. P.
 Carey stockholders(a)    $       661  $     9,112  $     7,266  $    49,075
Adjustments:
  (Benefit from)
   provision for income
   taxes                         (133)       5,075       (2,155)      38,511
  Depreciation and
   amortization                   937          819        2,817        2,488
                          -----------  -----------  -----------  -----------
  EBITDA - investment
   management             $     1,465  $    15,006  $     7,928  $    90,074
                          ===========  ===========  ===========  ===========
  EBITDA per share
   (diluted)              $      0.04  $      0.37  $      0.19  $      2.23
                          ===========  ===========  ===========  ===========

Real Estate Ownership
Net income from real
 estate ownership
 attributable to W. P.
 Carey stockholders(a)    $     1,927  $    16,090  $    39,388  $    80,913
 Adjustments:
  Interest expense              7,868        5,989       22,459       15,660
  Provision for income
   taxes                          512          854        2,347           15
  Depreciation and
   amortization                 5,634        5,504       17,111       14,064
  Reconciling items
   attributable to
   discontinued
   operations                     191        1,209          977        3,992
                          -----------  -----------  -----------  -----------
EBITDA - real estate
 ownership                $    16,132  $    29,646  $    82,282  $   114,644
                          ===========  ===========  ===========  ===========
EBITDA per share
 (diluted)                $      0.39  $      0.73  $      2.01  $      2.83
                          ===========  ===========  ===========  ===========

Total Company
EBITDA                    $    17,597  $    44,652  $    90,210  $   204,718
                          ===========  ===========  ===========  ===========
EBITDA per share
 (diluted)                $      0.43  $      1.10  $      2.20  $      5.06
                          ===========  ===========  ===========  ===========
Diluted weighted average
 shares outstanding        41,127,404   40,404,520   41,029,578   40,424,316
                          ===========  ===========  ===========  ===========


    __________

 (a) Effective April 1, 2012, we include cash distributions and deferred
     revenue received and earned from the operating partnerships of CPA(R):16 
     - Global, CPA(R):17 - Global and CWI in our Real Estate Ownership
     segment. Results of operations for the prior year periods have been
     reclassified to conform to the current period presentation.
     Additionally, during the third quarter of 2011, CPA(R):16 - Global
     finalized its assessment of the fair values of the assets acquired and 
     liabilities assumed in connection with the CPA(R):14/16 merger and made
     certain adjustments during that quarter. Our proportionate share of the
     adjustments before income taxes was approximately $2.6 million. In
     accordance with current accounting guidance, we have retrospectively
     adjusted our results of operations in our Real Estate Ownership segment
     for the three and nine months ended September 30, 2011 to include such 
     adjustments.


    
Non-GAAP Financial Disclosure

    EBITDA as disclosed represents earnings before interest, taxes,
depreciation and amortization. We believe that EBITDA is a useful
supplemental measure to investors and analysts for assessing the
performance of our business segments, although it does not represent net
income that is computed in accordance with GAAP, because it removes the
impact of our capital structure and asset base from our operating results
and because it is helpful when comparing our operating performance to
that of companies in our industry without regard to such items, which can
vary substantially from company to company. Accordingly, EBITDA should
not be considered as an alternative to net income as an indicator of our
financial performance. EBITDA may not be comparable to similarly titled
measures of other companies. Therefore, we use EBITDA as one measure of
our operating performance when we formulate corporate goals, evaluate the
effectiveness of our strategies, and determine executive compensation. 

                              W. P. CAREY INC.

Reconciliation of Net Income to Funds From Operations -- as adjusted (AFFO) 
                                 (Unaudited)
             (in thousands, except share and per share amounts)

                            Three Months Ended         Nine Months Ended
                               September 30,             September 30,
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011
                         -----------  -----------  -----------  ----------- 
Investment Management
Net Income from
 investment management
 attributable to W. P.
 Carey stockholders (a)  $       661  $     9,112  $     7,266  $    49,075 
                         -----------  -----------  -----------  ----------- 
FFO - as defined by
 NAREIT                          661        9,112        7,266       49,075 
                         -----------  -----------  -----------  ----------- 
  Adjustments:
    Amortization and
     other non-cash
     charges                     247       (1,263)         735        3,021 
    Stock based
     compensation              9,461        4,340       18,813       12,869 
    Deferred tax expense     (15,207)       1,876      (21,430)      14,119 
    Realized losses
     (gains) on foreign
     currency,
     derivatives and
     other                        17            -           (6)           - 
    Amortization of
     deferred financing
     costs                       308            -          879            - 
                         -----------  -----------  -----------  ----------- 
      Total adjustments       (5,174)       4,953       (1,009)      30,009 
                         -----------  -----------  -----------  ----------- 
AFFO - Investment
 Management              $    (4,513) $    14,065  $     6,257  $    79,084 
                         ===========  ===========  ===========  =========== 

Real Estate Ownership
Net Income from real
 estate ownership
 attributable to W. P.
 Carey stockholders (a)  $     1,927  $    16,090  $    39,388  $    80,913 
  Adjustments:
    Depreciation and
     amortization of
     real property             5,510        6,194       17,330       16,909 
    Impairment charges         5,534        4,934       12,262        4,975 
    (Gain) loss on sale
     of real estate, net         (59)         396       (1,564)        (264)
    Proportionate share
     of adjustments to
     equity in net
     income of partially
     owned entities to
     arrive at FFO:
      Depreciation and
       amortization of
       real property             707        1,173        2,335        4,049 
      Impairment charges           -            -            -        1,090 
      Loss (gain) on
       sale of real
       estate, net               181            -      (15,234)          34 
    Proportionate share
     of adjustments for
     noncontrolling
     interests to arrive
     at FFO                     (400)      (1,157)      (1,268)      (1,477)
                         -----------  -----------  -----------  ----------- 
      Total adjustments       11,473       11,540       13,861       25,316 
                         -----------  -----------  -----------  ----------- 
FFO - as defined by
 NAREIT                       13,400       27,630       53,249      106,229 
                         -----------  -----------  -----------  ----------- 
  Adjustments:
    Gain on change in
     control of
     interests (b) (c)       (20,794)           -      (20,794)     (27,859)
    Gain on
     deconsolidation of
     a subsidiary                  -       (1,008)           -       (1,008)
    Other losses, net              -          135            -            - 
    Other depreciation,
     amortization and
     non-cash charges           (130)       2,717         (106)         (53)
    Stock based
     compensation                344           53          747          157 
    Deferred tax expense        (917)      (2,602)      (2,101)      (2,602)
    Realized losses on
     foreign currency,
     derivatives and
     other                       115            -          657            - 
    Amortization of
     deferred financing
     costs                       509            -        1,375            - 
    Straight-line and
     other rent
     adjustments                (200)      (1,014)      (2,198)      (2,451)
    Above-market rent
     intangible lease
     amortization, net            51            -          162            - 
    Merger expenses           35,570            -       40,289            - 
    Proportionate share
     of adjustments to
     equity in net
     income of partially
     owned entities to
     arrive at AFFO:
      Other
       depreciation,
       amortization and
       non-cash charges
      Straight-line and
       other rent
       adjustments               (25)        (463)        (801)      (1,227)
      Below-market rent
       intangible lease
       amortization, net           -            -           (3)           - 
      AFFO adjustments
       to equity
       earnings from
       equity
       investments            10,650        1,978       25,263        3,155 
    Proportionate share
     of adjustments for
     noncontrolling
     interests to arrive
     at AFFO                    (141)          59         (186)         218 
                         -----------  -----------  -----------  ----------- 
      Total adjustments       25,032         (145)      42,304      (31,670)
                         -----------  -----------  -----------  ----------- 
AFFO - Real Estate
 Ownership               $    38,432  $    27,485  $    95,553  $    74,559 
                         ===========  ===========  ===========  =========== 

Total Company
FFO - as defined by
 NAREIT                  $    14,061  $    36,742  $    60,515  $   155,304 
                         ===========  ===========  ===========  =========== 
FFO - as defined by
 NAREIT per share
 (diluted)               $      0.34  $      0.91  $      1.47  $      3.84 
                         ===========  ===========  ===========  =========== 
AFFO                     $    33,919  $    41,550  $   101,810  $   153,643 
                         ===========  ===========  ===========  =========== 
AFFO per share (diluted) $      0.82  $      1.03  $      2.48  $      3.80 
                         ===========  ===========  ===========  =========== 
Diluted weighted average
 shares outstanding       41,127,404   40,404,520   41,029,578   40,424,316 
                         ===========  ===========  ===========  =========== 


    __________

(a)  Effective April 1, 2012, we include cash distributions and deferred
     revenue received and earned from the operating partnerships of CPA(R):16 
     - Global, CPA(R):17 - Global and CWI in our Real Estate Ownership
     segment. Results of operations for the prior year periods have been
     reclassified to conform to the current period presentation.
     Additionally, during the third quarter of 2011, CPA(R):16 - Global
     finalized its assessment of the fair values of the assets acquired and 
     liabilities assumed in connection with the CPA(R):14/16 merger and made
     certain adjustments during that quarter. Our proportionate share of the
     adjustments before income taxes was approximately $2.6 million. In
     accordance with current accounting guidance, we have retrospectively
     adjusted our results of operations in our Real Estate Ownership segment
     for the three and nine months ended September 30, 2011 to include such 
     adjustments.
(b)  Gain on change in control of interests for the nine months ended
     September 30, 2011 represents gain recognized on purchase of the
     remaining interests in two investments from CPA(R):14, which we had
     previously accounted for under the equity method. In connection with
     purchasing these properties, we recognized a net gain of $27.9 million 
     during the nine months ended September 30, 2011 to adjust the carrying 
     value of our existing interests in these investments to their estimated
     fair values.
(c)  Gain on change in control of interests for the three and nine months
     ended September 30, 2012 represents a gain of $14.7 million recognized 
     on our previously held interest in shares of CPA(R):15 common stock, and 
     a gain of $6.1 million recognized on the purchase of the remaining
     interests in five investments from CPA(R):15, which we had previously
     accounted for under the equity method. We recognized a net gain of
     $20.8 million to adjust the carrying value of our existing interests in
     these investments to their estimated fair values.


    
Non-GAAP Financial Disclosure

    FFO is a non-GAAP measure defined by NAREIT. NAREIT defines FFO as net
income or loss (as computed in accordance with GAAP) excluding:
depreciation and amortization expense from real estate assets, impairment
charges on real estate, gains or losses from sales of depreciated real
estate assets and extraordinary items; however, FFO related to assets
held for sale, sold or otherwise transferred and included in the results
of discontinued operations are included. These adjustments also
incorporate the pro rata share of unconsolidated subsidiaries. FFO is
used by management, investors and analysts to facilitate meaningful
comparisons of operating performance between periods and among our peers.
Although NAREIT has published this definition of FFO, companies often
modify this definition as they seek to provide financial measures that
meaningfully reflect their distinctive operations.

    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 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. We refer to our modified
definition of FFO as AFFO. We exclude these items from GAAP net income as
they are not the primary drivers in our decision making process. 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, and we therefore 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 because 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.

                              W. P. CAREY INC.
             Total Adjusted Revenue (Pro rata Basis) (Unaudited)
                     (in thousands, except percentages)

                       Three Months Ended            Nine Months Ended
                         September 30,                 September 30,
                 ----------------------------- -----------------------------
                      2012         2011 (e)         2012         2011 (e)
                 -------------- -------------- -------------- --------------
                  Revenue    %   Revenue    %   Revenue    %   Revenue    % 
                 --------- ---- --------- ---- --------- ---- --------- ----
Asset management
 revenue         $  15,850  20% $  14,840  16% $  47,088  21% $  51,279  21%
Structuring
 revenue (a)         8,316  11%    21,221  24%    19,576   8%    42,901  18%
                 --------- ---- --------- ---- --------- ---- --------- ----
Investment
 management
 revenues           24,166  31%    36,061  40%    66,664  29%    94,180  39%
Real estate
 revenues           54,154  69%    54,576  60%   166,801  71%   149,734  61%
                 --------- ---- --------- ---- --------- ---- --------- ----
Total Adjusted
 Revenue         $  78,320 100% $  90,637 100% $ 233,465 100% $ 243,914 100%
                 ========= ==== ========= ==== ========= ==== ========= ====

Reconciliation
 of Total
 Adjusted
 Revenue
Total revenue -
 as reported     $  71,036      $  76,658      $ 207,996      $ 268,862
Less: Reimbursed
 costs from
 affiliates (b)   (19,879)       (14,707)       (59,100)       (49,485)
Less:
 Wholesaling
 revenue (b)       (4,012)        (2,586)       (11,878)        (8,788)
Less: Incentive,
 termination and
 subordinated
 disposition
 revenue (c)             -              -              -       (52,515)
Add: Lease
 revenues -
 discontinued
 operations             59            579          1,159          6,025
Add: Pro rata
 share of
 revenues from
 equity
 investments         5,313          6,689         17,463         21,668
Less: Pro rata
 share of
 revenues due to
 noncontrolling
 interests           (411)          (452)        (1,261)        (2,193)
Add: Pro rata
 share of
 revenues from
 CPA(R) REITs         18,862         19,976         57,297         52,072
Add: Total
 distributions
 of available
 cash - CPA(R)
 REITs               7,352          4,480         21,789          8,268
                 ---------      ---------      ---------      ---------
Total Adjusted
 Revenue         $  78,320      $  90,637      $ 233,465      $ 243,914
                 =========      =========      =========      =========

Reconciliation
 of Real Estate
 Revenues
Lease revenues -
 as reported     $  16,714      $  17,001      $  51,265      $  46,682
Lease revenues -
 discontinued
 operations             59            579          1,159          6,025
                 ---------      ---------      ---------      ---------
Total
 consolidated
 lease revenues     16,773         17,580         52,424         52,707
Add: Pro rata
 share of
 revenues from
 equity
 investments         5,313          6,689         17,463         21,668
Less: Pro rata
 share of
 revenues due to
 noncontrolling
 interests           (411)          (452)        (1,261)        (2,193)
                 ---------      ---------      ---------      ---------
Total pro rata
 net lease
 revenues           21,675         23,817         68,626         72,182
                 ---------      ---------      ---------      ---------
Add: Pro rata
 share of
 revenues from
 CPA(R) REITs:
  CPA(R):14                -              -              -          4,484
  CPA(R):15            4,234          4,652         12,731         13,178
  CPA(R):16 -
   Global           13,817         14,936         42,407         34,022
  CPA(R):17 -
   Global              811            388          2,159            388
                 ---------      ---------      ---------      ---------
  Total pro rata
   share of
   revenues from
   CPA(R) REITs       18,862         19,976         57,297         52,072
Add:
 Distributions
 of available
 cash - CPA(R)
 REITs
  CPA(R):16 -
   Global            3,685          2,499         11,564          2,499
  CPA(R):17 -
   Global            3,667          1,981         10,225          5,769
                 ---------      ---------      ---------      ---------
  Total
   distributions
   of available
   cash - CPA(R)
   REITs             7,352          4,480         21,789          8,268
Add: Other real
 estate income
 (d)                 6,265          6,303         19,089         17,212
                 ---------      ---------      ---------      ---------
Total Real
 Estate Revenues $  54,154      $  54,576      $ 166,801      $ 149,734
                 =========      =========      =========      =========


    __________

(a)  We earn structuring revenue on acquisitions structured on behalf of the
     CPA(R) REITS and CWI that we manage and expect significant period-to-
     period variation in such revenue based on changes in investment volume.
     Investments structured on behalf of the CPA(R) REITS and CWI totaled
     approximately $198.3 million and $498.0 million for the three months
     ended September 30, 2012 and 2011, respectively, and approximately
     $468.3 million and $1.1 billion for the nine months ended September 30,
     2012 and 2011, respectively.
(b)  Total adjusted revenue excludes reimbursements of costs received from
     the affiliated CPA(R) REITs and CWI as they have no impact on net income.
     Also excluded is wholesaling revenue earned in connection with CPA(R):17 
     - Global's and CWI's public offerings, which is substantially offset by
     underwriting costs incurred in connection with the offerings.
(c)  In connection with providing a liquidity event for CPA(R):14
     shareholders, in May 2011, we earned termination revenue of $31.2
     million and subordinated disposition revenue of $21.3 million, which we
     received in shares of CPA(R):14 and cash, respectively. These CPA(R):14
     shares were subsequently converted to shares of CPA(R):16 - Global in
     connection with the CPA(R):14/16 merger.
(d)  Other real estate income generally consists of revenue from Carey
     Storage Management LLC, a subsidiary that invests in domestic self-
     storage properties and Livho, Inc., a subsidiary that operates a hotel 
     franchise. Other real estate income also includes lease termination
     payments and other non-rent related revenues from real estate
     ownership, and as a result, we expect Other real estate income to
     fluctuate period to period.
(e)  Amounts presented for prior year periods do not reflect adjustments to 
     prior period amounts for assets reclassified as held for sale or sold
     in the current period and reflected as discontinued operations.

                              W. P. CAREY INC.
      Selected Investment Management Fees and Distributions (Unaudited)
                               (in thousands)

                                  Three Months Ended September 30, 2012
                            ------------------------------------------------
                            Asset Management Revenue
                            ------------------------
                            Base Asset               Distributions
                            Management  Performance   of Available
                              Revenue     Revenue         Cash       Total
                            ---------- ------------- ------------- ---------
CPA(R):15                     $    3,063 $       3,063 $           - $   6,126
CPA(R):16 - Global                 4,631             -         3,685     8,316
CPA(R):17 - Global                 4,906             -         3,667     8,573
CWI/Other                          187             -             -       187
                            ---------- ------------- ------------- ---------
Total                       $   12,787 $       3,063 $       7,352 $  23,202
                            ========== ============= ============= =========

                                  Three Months Ended September 30, 2011
                            ------------------------------------------------
                            Asset Management Revenue
                            ------------------------
                            Base Asset               Distributions
                            Management  Performance   of Available
                              Revenue     Revenue         Cash       Total
                            ---------- ------------- ------------- ---------
Total                       $   11,581 $       3,259 $       4,480 $  19,320
                            ========== ============= ============= =========

                              W. P. CAREY INC.
      Selected Investment Management Fees and Distributions (Unaudited)
                               (in thousands)

                                  Nine Months Ended September 30, 2012
                            ------------------------------------------------
                            Asset Management Revenue
                            ------------------------
                            Base Asset               Distributions
                            Management  Performance   of Available
                              Revenue     Revenue         Cash       Total
                            ---------- ------------- ------------- ---------
CPA(R):15                     $    9,272 $       9,272 $           - $  18,544
CPA(R):16 - Global                13,929             -        11,564    25,493
CPA(R):17 - Global                14,224             -        10,225    24,449
CWI/Other                          391             -             -       391
                            ---------- ------------- ------------- ---------
Total                       $   37,816 $       9,272 $      21,789 $  68,877
                            ========== ============= ============= =========

                                  Nine Months Ended September 30, 2011
                            ------------------------------------------------
                            Asset Management Revenue
                            ------------------------
                            Base Asset               Distributions
                            Management  Performance   of Available
                              Revenue     Revenue         Cash       Total
                            ---------- ------------- ------------- ---------
Total                       $   34,459 $      16,820 $       8,268 $  59,547
                            ========== ============= ============= =========


    


COMPANY CONTACT:
Cheryl Sanclemente
W. P. Carey Inc. 
212-492-8995
csanclemente@wpcarey.com

PRESS CONTACT:
Guy Lawrence
Ross & Lawrence
212-308-3333
gblawrence@rosslawpr.com 

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