SOURCE: W. P. Carey & Co. LLC

W. P. Carey & Co. LLC

February 26, 2009 09:15 ET

W. P. Carey Announces Fourth Quarter and Year-End 2008 Financial Results

NEW YORK, NY--(Marketwire - February 26, 2009) - Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the fourth quarter and year ended December 31, 2008. The Company reported increases of 33 percent and six percent in cash flow from operations and adjusted cash flow from operating activities, respectively, for 2008, while net income was essentially unchanged.

Commenting on the Company's results, Wm. Polk Carey, Founder and Chairman, stated, "In determining distributions to shareholders, the Company's Board of Directors views adjusted cash flow from operating activities as a critical metric. Consequently, we are pleased to report an increase in this metric over the prior year. Combined with the continued strength of our balance sheet, this increase is a testament to the established investment and asset management processes that are at the core of our disciplined risk management approach and long term investment philosophy."

QUARTERLY AND YEAR-END RESULTS

--  Total revenues net of reimbursed expenses for the fourth quarter of
    2008 were $52.9 million, compared to $51.2 million for the fourth quarter
    of 2007.  Total revenues net of reimbursed expenses for 2008 were $202.7
    million, compared to $249.4 million for 2007.  Reimbursed expenses are
    excluded from total revenues because they have no impact on net income.
--  Net income for the fourth quarter of 2008 was $21.9 million, compared
    to $6 million for the fourth quarter of 2007. Net income for 2008 was $78
    million, compared to $79.3 million in 2007.
--  Funds from operations (FFO) for the fourth quarter of 2008, as per the
    attached table, were $33.8 million or $0.84 per diluted share, compared to
    $2.9 million or $0.07 per diluted share for the comparable period in 2007.
    FFO for 2008 was $124.5 million or $3.09 per diluted share, compared to
    $133.3 million or $3.34 per diluted share for 2007.
    

SUPPLEMENTAL PERFORMANCE METRICS

--  For the year ended December 31, 2008, adjusted cash flow from
    operating activities increased 6% to $89.4 million from $84.2 million in
    2007.
--  FFO from our real estate ownership segment in the fourth quarter of
    2008 increased to $22.4 million or $0.56 per diluted share, compared to
    $17.2 million or $0.43 per diluted share in the fourth quarter of 2007.
    For 2008, FFO from this segment increased to $75.3 million or $1.87 per
    diluted share from $64.1 million or $1.61 per diluted share during 2007.
--  Earnings before interest, taxes, depreciation and amortization
    (EBITDA) from our investment management segment totaled $13.1 million this
    quarter or $0.32 per diluted share, compared with EBITDA in the fourth
    quarter of 2007 of $(3.9) million or $(0.10) per diluted share.  EBITDA for
    this segment in 2008 was $61.8 million or $1.54 per diluted share, compared
    to $91.1 million or $2.29 per share diluted for 2007.
--  Further information concerning these non-GAAP supplemental performance
    metrics is presented in the accompanying tables.  These supplemental
    metrics have been adjusted on the accompanying comparability table to show
    how those measures would compare period-to-period after adjustment for
    certain events that affected 2007 and 2006 results.
    

ASSETS UNDER MANAGEMENT

--  As of December 31, 2008, the occupancy rate of our 17 million square
    foot owned portfolio was approximately 94%.  In addition, for the 92
    million square feet owned by the CPA® REITs, the occupancy rate was
    approximately 99%.
--  In July 2008, we opened an office in Amsterdam to establish a European
    base for the management of the CPA®  REITs' growing portfolio of
    international assets.
    

INVESTMENT AND FUNDRAISING ACTIVITY

--  In 2008, we structured investments on behalf of our CPA® REITs
    totaling approximately $457 million, as compared to $1.1 billion in 2007,
    which included the $446 million Hellweg Die Profi-Baumärkte GmbH & Co. KG
    investment.  Approximately 46% of the 2008 investments were international
    transactions.
--  Through February 23, 2009, we have raised approximately $380 million
    for CPA®:17 - Global's initial public offering.
    

DISTRIBUTIONS AND SHARE REPURCHASE

--  The Board of Directors has raised the quarterly cash distribution to
    $0.496 per share for the first quarter of 2009.  The distribution is
    payable on April 15, 2009 to shareholders of record as of March 31, 2009.
    This is our 32nd consecutive quarterly dividend increase.
--  In December 2008, our Board approved a share repurchase program of up
    to $10 million of our outstanding stock from December 16, 2008 through
    March 4, 2009, or the date the maximum is reached, if earlier.  Through
    December 31, 2008, we repurchased shares totaling $2 million under this
    program.
    

UPCOMING EVENTS

--  Gordon F. DuGan, President and CEO, will participate as a panelist in
    the "Town Hall Meeting: The Net Lease Market Today & Tomorrow" at the 7th
    annual RealShare Net Lease conference.  The event will be held on April 29,
    2009 at the Marriott Marquis in New York.
    

CONFERENCE CALL & WEBCAST

Please call at least 10 minutes prior to call to register.

Date: Thursday, February 26, 2009, 11:00 AM (ET)

Call-in Number: 1-877-407-0782
(International) +1-201-689-8567

Webcast: www.wpcarey.com/earnings

Podcast: www.wpcarey.com/podcast
Available after 2:00 PM (ET)

Replay Number: 1-877-660-6853
(International) +1-201-612-7415

Replay Access Codes: Account # 286 and Conference ID # 311396.  Please note
that both access codes are required for playback.  Replay Available until
March 12, 2009 at midnight ET.

W. P. Carey & Co. LLC

W. P. Carey & Co. LLC is an investment management company that provides long-term sale-leaseback and build-to-suit financing for companies worldwide and manages a global investment portfolio worth approximately $10 billion. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA® series of income-generating, non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group's investments are highly diversified, comprising contractual agreements with approximately 300 long-term corporate obligors spanning 28 industries and 14 countries. http://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. 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 & CO. LLC
                    CONSOLIDATED STATEMENTS OF INCOME
          (in thousands, except share and per share amounts)

                                             Years ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------  ----------
Revenues
Asset management revenue                $   80,714  $   83,051  $   57,633
Structuring revenue                         20,236      78,175      22,506
Incentive, termination and subordinated
 disposition revenue from mergers                -           -      46,018
Wholesaling revenue                          5,129          27           -
Reimbursed costs from affiliates            41,179      13,782      63,630
Lease revenues                              75,932      75,403      69,197
Other real estate income                    20,683      12,718       8,503
                                        ----------  ----------  ----------
                                           243,873     263,156     267,487
                                        ----------  ----------  ----------

Operating Expenses
General and administrative                 (62,590)    (61,848)    (41,376)
Provision for settlement                         -     (29,979)          -
Reimbursable costs                         (41,179)    (13,782)    (63,630)
Depreciation and amortization              (25,664)    (25,543)    (25,137)
Property expenses                           (7,620)     (6,245)     (5,984)
Impairment charges                          (1,011)     (1,017)     (1,147)
Other real estate expenses                  (8,196)     (7,690)     (5,881)
                                        ----------  ----------  ----------
                                          (146,260)   (146,104)   (143,155)
                                        ----------  ----------  ----------
Other Income and Expenses
Other interest income                        2,884       6,842       3,305
Income from equity investments in real
 estate and CPA(R) REITs                    14,198      18,357       7,608
Minority interest in income                   (558)     (4,143)       (275)
Gain on sale of investment in direct
 financing lease                             1,103           -           -
Gain on sale of securities, foreign
 currency transactions and other, net        1,444       3,114      12,969
Interest expense                           (19,289)    (20,880)    (17,016)
                                        ----------  ----------  ----------
                                              (218)      3,290       6,591
                                        ----------  ----------  ----------
Income from continuing operations
 before income taxes                        97,395     120,342     130,923
Provision for income taxes                 (23,521)    (51,739)    (45,356)
                                        ----------  ----------  ----------
Income from continuing operations           73,874      68,603      85,567
                                        ----------  ----------  ----------
Discontinued Operations
Income from operations of discontinued
 properties                                  4,173       2,874       1,178
Gains on sale of real estate, net                -      15,486       3,452
Impairment charges                               -      (2,317)     (3,357)
Minority interest in income                      -      (5,394)       (537)
                                        ----------  ----------  ----------
Income from discontinued operations          4,173      10,649         736
                                        ----------  ----------  ----------
Net Income                              $   78,047  $   79,252  $   86,303
                                        ==========  ==========  ==========
Basic Earnings Per Share
Income from continuing operations       $     1.88  $     1.80  $     2.27
Income from discontinued operations           0.11        0.28        0.02
                                        ----------  ----------  ----------
Net income                              $     1.99  $     2.08  $     2.29
                                        ==========  ==========  ==========
Diluted Earnings Per Share
Income from continuing operations       $     1.86  $     1.78  $     2.20
Income from discontinued operations           0.10        0.27        0.02
                                        ----------  ----------  ----------
Net income                              $     1.96  $     2.05  $     2.22
                                        ==========  ==========  ==========
Weighted Average Shares Outstanding
Basic                                   39,202,520  38,113,857  37,668,920
                                        ==========  ==========  ==========
Diluted                                 40,221,112  39,868,208  39,093,897
                                        ==========  ==========  ==========




                         W. P. CAREY & CO. LLC
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (in thousands)



                                                Years ended December 31,
                                              ----------------------------
                                                2008      2007      2006
                                              --------  --------  --------
Cash Flows -- Operating Activities
Net income                                    $ 78,047  $ 79,252  $ 86,303
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Depreciation and amortization including
   intangible assets and deferred financing
   costs                                        27,197    27,321    27,207
   Loss (income) from equity investments in
    real estate and CPA® REITs in excess of
    distributions received                       1,866    (2,296)     (160)
  Gains on sale of direct financing lease       (1,103)        -         -
  Gain on lease termination                     (4,998)        -         -
  Gains on sale of real estate and
   investments, net                                  -   (15,827)  (14,774)
  Minority interest in income                      558     9,537       812
  Straight-line rent adjustments                 2,227     2,972     3,152
  Management income received in shares of
   affiliates                                  (40,717)  (55,535)  (31,020)
  Unrealized loss (gain) on foreign currency
   transactions, warrants and securities         2,656    (1,659)   (1,128)
  Realized gain on foreign currency
   transactions, warrants and securities        (2,250)   (1,332)     (488)
  Impairment charges                             1,011     3,334     4,504
  Stock-based compensation expense               7,278     5,551     3,453
  Decrease in deferred acquisition revenue
   received                                     48,266    16,164    12,543
  Increase in structuring revenue receivable   (10,512)  (55,897)   (3,459)
  (Decrease) increase in income taxes, net      (8,079)    1,796    24,311
  (Decrease) increase in settlement provision  (29,979)   29,979         -
  Net changes in other operating assets and
   liabilities                                  (8,221)    4,111     8,684
                                              --------  --------  --------
Net cash provided by operating activities       63,247    47,471   119,940
                                              --------  --------  --------

Cash Flows -- Investing Activities
  Distributions received from equity
   investments in real estate and CPA® REITs
   in excess of equity income                   19,852    17,441    13,286
  Capital contributions made to equity
   investments in real estate                   (1,769)   (3,596)        -
  Purchases of real estate and equity
   investments in real estate                     (201)  (80,491) (102,199)
  Capital expenditures                         (14,051)  (15,987)   (4,937)
  Loans to affiliates                                -    (8,676) (108,000)
  Proceeds from repayment of loans to
   affiliates                                        -     8,676   108,000
  VAT refunded on purchase of real estate        3,189         -         -
  Proceeds from sales of real estate, net
   investment in direct financing lease and
   securities                                    5,062    42,214    50,053
  Funds placed in escrow in connection with
   the sale of property                              -   (19,515)  (10,374)
  Funds released from escrow in connection
   with the sale of property                       636    19,410    10,134
  Payment of deferred acquisition revenue to
   affiliate                                      (120)     (524)     (524)
                                              --------  --------  --------
Net cash provided by (used in) investing
 activities                                     12,598   (41,048)  (44,561)
                                              --------  --------  --------

Cash Flows -- Financing Activities
  Distributions paid                           (87,700)  (71,608)  (68,615)
  Contributions from minority interests          2,582     1,703     2,345
  Distributions to minority interests           (5,607)   (8,168)   (6,226)
  Scheduled payments of mortgage principal      (9,678)  (16,072)  (11,742)
  Proceeds from mortgages and credit
   facilities                                  139,437   189,383   174,501
  Prepayments of mortgage principal and credit
   facilities                                 (111,572) (115,090) (166,660)
  Proceeds from loans from affiliates                -     7,569         -
  Repayment of loan from affiliates             (7,569)        -         -
  Funds placed in escrow in connection with
   financing                                      (400)        -         -
  Release of funds from escrow in connection
   with the financing of properties                  -         -     4,031
  Payment of financing costs                      (375)   (1,350)   (1,601)
  Proceeds from issuance of shares              23,350    20,682     8,660
  Windfall tax benefits associated with
   stock-based compensation awards               2,156     1,939       626
  Repurchase and retirement of shares          (15,413)  (25,525)   (1,937)
                                              --------  --------  --------
Net cash used in financing activities          (70,789)  (16,537)  (66,618)
                                              --------  --------  --------

Change in Cash and Cash Equivalents During
 the Year
    Effect of exchange rate changes on cash       (394)      143       333
                                              --------  --------  --------
    Net increase (decrease) in cash and cash
     equivalents                                 4,662    (9,971)    9,094
  Cash and cash equivalents, beginning of
   year                                         12,137    22,108    13,014
                                              --------  --------  --------
  Cash and cash equivalents, end of year      $ 16,799  $ 12,137  $ 22,108
                                              ========  ========  ========




                          W. P. CAREY & CO. LLC
                     Financial Highlights (Unaudited)
            (in thousands, except share and per share amounts)

These financial highlights include non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), funds from operations ("FFO") and adjusted cash flow from operating activities. 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                Years ended
                      December 31,                  December 31,
              ---------------------------- -------------------------------
                2008      2007      2006     2008       2007       2006
              -------- ---------  -------- ---------  ---------  ---------
EBITDA
Investment
 management   $ 13,079 $  (3,906) $ 64,954 $  61,805  $  91,145  $ 105,683
Real estate
 ownership      23,238    31,123    20,784    84,408     88,228     70,619
              -------- ---------  -------- ---------  ---------  ---------
Total         $ 36,317 $  27,217  $ 85,738 $ 146,213  $ 179,373  $ 176,302
              ======== =========  ======== =========  =========  =========

FFO
Investment
 management   $ 11,415 $ (14,281) $ 40,236 $  49,119  $  69,169  $  70,008
Real estate
 ownership      22,412    17,192    14,647    75,331     64,097     58,529
              -------- ---------  -------- ---------  ---------  ---------
Total         $ 33,827 $   2,911  $ 54,883 $ 124,450  $ 133,266  $ 128,537
              ======== =========  ======== =========  =========  =========

EBITDA Per
 Share
 (Diluted)
Investment
 management   $   0.32 $   (0.10) $   1.65 $    1.54  $    2.29  $    2.70
Real estate
 ownership        0.58      0.78      0.53      2.10       2.21       1.81
              -------- ---------  -------- ---------  ---------  ---------
Total         $   0.90 $    0.68  $   2.18 $    3.64  $    4.50  $    4.51
              ======== =========  ======== =========  =========  =========

FFO Per Share
 (Diluted)
Investment
 management   $   0.28 $   (0.36) $   1.02 $    1.22  $    1.73  $    1.79
Real estate
 ownership        0.56      0.43      0.37      1.87       1.61       1.50
              -------- ---------  -------- ---------  ---------  ---------
Total         $   0.84 $    0.07  $   1.39 $    3.09  $    3.34  $    3.29
              ======== =========  ======== =========  =========  =========

Adjusted Cash
 Flow From
 Operating
 Activities
Adjusted cash
 flow                                      $  89,385  $  84,241  $  70,159
                                           =========  =========  =========
Adjusted cash
 flow per
 share
 (diluted)                                 $    2.22  $    2.11  $    1.79
                                           =========  =========  =========

Distributions
 declared per
 share                                     $   1.955  $   1.878  $   1.820
                                           =========  =========  =========
Payout ratio
 (distributions
 per share/
 adjusted
 cash flow per
 share)                                           88%        89%       102%
                                           =========  =========  =========




                       W. P. CAREY & CO. LLC
        Financial Results - Adjusted for Comparability (Unaudited)
            (in thousands, except share and per share amounts)


                                          Three months ended December 31,
                                        -----------------------------------
                                           2008        2007        2006
                                        ----------- ----------- ----------
Net Income
Net income - as reported                $    21,900 $     6,013 $   43,629
                                        =========== =========== ==========
Net income per share (diluted) - as
 reported                               $      0.55 $      0.15 $     1.12
                                        =========== =========== ==========
Items that affect comparability:
  SEC Settlement (a)                              -      21,012          -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -           -          -
  Out-of-period adjustment (c)                    -           -          -
  CPA (R) 12/14 Merger (d)                        -           -    (23,310)
                                        ----------- ----------- ----------
                                                  -      21,012    (23,310)
                                        ----------- ----------- ----------
Net income - adjusted for comparability $    21,900 $    27,025 $   20,319
                                        =========== =========== ==========
Net income per share (diluted) -
 adjusted for comparability             $      0.55 $      0.68 $     0.52
                                        =========== =========== ==========

EBITDA
EBITDA - as reported                    $    36,317 $    27,217 $   85,738
                                        =========== =========== ==========
EBITDA per share (diluted) - as
 reported                               $      0.90 $      0.68 $     2.18
                                        =========== =========== ==========
Items that affect comparability:
  SEC Settlement (a)                              -      29,979          -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -           -          -
  CPA (R) 12/14 Merger (d)                        -           -    (44,018)
                                        ----------- ----------- ----------
                                                  -      29,979    (44,018)
                                        ----------- ----------- ----------
EBITDA - adjusted for comparability     $    36,317 $    57,196 $   41,720
                                        =========== =========== ==========
EBITDA per share (diluted) - adjusted
 for comparability                      $      0.90 $      1.44 $     1.06
                                        =========== =========== ==========

FFO
FFO - as reported                       $    33,827 $     2,911 $   54,883
                                        =========== =========== ==========
FFO per share (diluted) - as reported   $      0.84 $      0.07 $     1.39
                                        =========== =========== ==========
Items that affect comparability:
  SEC Settlement (a)                              -      21,012          -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -           -          -
  CPA (R) 12/14 Merger (d)                        -           -    (23,310)
                                        ----------- ----------- ----------
                                                  -      21,012    (23,310)
                                        ----------- ----------- ----------
FFO - adjusted for comparability        $    33,827 $    23,923 $   31,573
                                        =========== =========== ==========
FFO per share (diluted) - adjusted for
 comparability                          $      0.84 $      0.60 $     0.80
                                        =========== =========== ==========

Diluted weighted average shares
 outstanding                             40,466,930  39,815,933 39,414,532
                                        =========== =========== ==========


                                             Years ended December 31,
                                        -----------------------------------
                                           2008        2007        2006
                                        ----------- ----------  ----------
Net Income
Net income - as reported                $    78,047 $   79,252  $   86,303
                                        =========== ==========  ==========
Net income per share (diluted) - as
 reported                               $      1.96 $     2.05  $     2.22
                                        =========== ==========  ==========
Items that affect comparability:
  SEC Settlement (a)                              -     21,012           -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -    (21,600)          -
  Out-of-period adjustment (c)                    -     (3,500)          -
  CPA (R) 12/14 Merger (d)                        -          -     (23,310)
                                        ----------- ----------  ----------
                                                  -     (4,088)    (23,310)
                                        ----------- ----------  ----------
Net income - adjusted for comparability $    78,047 $   75,164  $   62,993
                                        =========== ==========  ==========
Net income per share (diluted) -
 adjusted for comparability             $      1.96 $     1.95  $     1.63
                                        =========== ==========  ==========

EBITDA
EBITDA - as reported                    $   146,213 $  179,373  $  176,302
                                        =========== ==========  ==========
EBITDA per share (diluted) - as
 reported                               $      3.64 $     4.50  $     4.51
                                        =========== ==========  ==========
Items that affect comparability:
  SEC Settlement (a)                              -     29,979           -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -    (39,300)          -
  CPA (R) 12/14 Merger (d)                        -          -     (44,018)
                                        ----------- ----------  ----------
                                                  -     (9,321)    (44,018)
                                        ----------- ----------  ----------
EBITDA - adjusted for comparability     $   146,213 $  170,052  $  132,284
                                        =========== ==========  ==========
EBITDA per share (diluted) - adjusted
 for comparability                      $      3.64 $     4.27  $     3.38
                                        =========== ==========  ==========

FFO
FFO - as reported                       $   124,450 $  133,266  $  128,537
                                        =========== ==========  ==========
FFO per share (diluted) - as reported   $      3.09 $     3.34  $     3.29
                                        =========== ==========  ==========
Items that affect comparability:
  SEC Settlement (a)                              -     21,012           -
  CPA ®: 16 - Global performance
   adjustment, net (b)                            -    (42,300)          -
  CPA (R) 12/14 Merger (d)                        -          -     (23,310)
                                        ----------- ----------  ----------
                                                  -    (21,288)    (23,310)
                                        ----------- ----------  ----------
FFO - adjusted for comparability        $   124,450 $  111,978  $  105,227
                                        =========== ==========  ==========
FFO per share (diluted) - adjusted for
 comparability                          $      3.09 $     2.81  $     2.69
                                        =========== ==========  ==========

Diluted weighted average shares
 outstanding                             40,221,112 39,868,208  39,093,897
                                        =========== ==========  ==========

Non-GAAP Financial Disclosure

The above table presents Net Income, EBITDA and FFO adjusted for items that affect comparability. We believe that these adjusted supplemental measures are useful for comparing our current financial performance with prior periods, although they do not represent net income that is computed in accordance with GAAP. Accordingly, Net Income, EBITDA and FFO adjusted for items that affect comparability should not be considered an alternative for Net Income as an indicator of our financial performance. Net Income, EBITDA and FFO adjusted for items that affect comparability may not be comparable to similarly titled measures of other companies. Net Income adjusted for items that affect comparability consists of net income in accordance with GAAP adjusted for amounts recognized on the achievement of CPA®:16 - Global's performance criterion, an out-of-period adjustment as well as amounts recognized on completion of the CPA®:12 and CPA®:14 merger transaction in December 2006 (the "CPA®:12/14 Merger"). A description of EBITDA and FFO and reconciliations to the most directly comparable GAAP measures are provided on the respective pages of this earnings release.

(a) Includes a $30 million reserve taken in the fourth quarter of 2007 in connection with an SEC settlement.

(b) CPA®:16 - Global performance adjustment, net represents the net of tax impact of previously deferred asset management revenue, structuring revenue and interest income less deferred compensation costs recognized during the second quarter of 2007 following the achievement of CPA®:16 - Global's performance criterion. Adjustments to EBITDA and FFO eliminate the associated provision for income taxes and provision for deferred income taxes, respectively.

(c) During the third quarter of 2007, we determined that a longer schedule of depreciation/amortization of assets in certain of our equity method investment holdings should appropriately be applied to reflect the lives of the underlying assets rather than the expected holding period of these investments. We concluded that these adjustments were not material to any prior periods' consolidated financial statements. We also concluded that the cumulative adjustment was not material to the year ended December 31, 2007. As such, the cumulative effect was recorded in the consolidated statements of income as a one-time cumulative out-of-period adjustment in the third quarter of 2007. The effect of this adjustment for the year ended December 31, 2007 was to increase net income by approximately $3.5 million.

(d) In December 2006, CPA®:12 and CPA®:14 completed the CPA®:12/14 Merger. In connection with providing this liquidity event for CPA®:12 shareholders, CPA®:12 paid us termination revenue of $25.4 million and subordinated disposition revenue of $24.4 million. Included in subordinated disposition revenue was $3.8 million payable by CPA®:12 related to properties we acquired from CPA®:12 that was not recognized as income for financial reporting purposes but reduced the cost of the properties we acquired from CPA®:12 prior to the CPA®:12/14 Merger. Net income recognized in connection with the CPA®:12/14 Merger in 2006 was $23.3 million, while merger costs and taxes totalled $2 million and $20.7 million, respectively.


                        W. P. CAREY & CO. LLC
            Reconciliation of Net Income to EBITDA (Unaudited)
            (in thousands, except share and per share amounts)


                                          Three months ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------  -----------
Investment Management
Net income (loss)                       $    9,603  $  (12,366) $    32,936
Adjustments:
  Provision for income taxes                 2,246       2,473       28,773
  Depreciation and amortization              1,230       5,987        3,245
                                        ----------  ----------  -----------
EBITDA - investment management          $   13,079  $   (3,906) $    64,954
                                        ==========  ==========  ===========
EBITDA per share (diluted)              $     0.32  $    (0.10) $      1.65
                                        ==========  ==========  ===========

Real Estate Ownership
Net income                              $   12,297  $   18,379  $    10,693
Adjustments:
  Interest expense                           4,710       5,609        3,692
  Provision for income taxes                   870         453          289
  Depreciation and amortization              5,669       6,536        4,787
  Reconciling items attributable to
   discontinued operations                    (308)        146        1,323
                                        ----------  ----------  -----------
EBITDA - real estate ownership          $   23,238  $   31,123  $    20,784
                                        ==========  ==========  ===========
EBITDA per share (diluted)              $     0.58  $     0.78  $      0.53
                                        ==========  ==========  ===========

Total Company
EBITDA                                  $   36,317  $   27,217  $    85,738
                                        ==========  ==========  ===========
EBITDA per share (diluted)              $     0.90  $     0.68  $      2.18
                                        ==========  ==========  ===========
Diluted weighted average shares
 outstanding                            40,466,930  39,815,933   39,414,532
                                        ==========  ==========  ===========



                                             Years ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------- -----------
Investment Management
Net income (loss)                       $   34,858  $    36,808 $    53,330
Adjustments:
  Provision for income taxes                22,432       50,158      44,710
  Depreciation and amortization              4,515        4,179       7,643
                                        ----------  ----------- -----------
EBITDA - investment management          $   61,805  $    91,145 $   105,683
                                        ==========  =========== ===========
EBITDA per share (diluted)              $     1.54  $      2.29 $      2.70
                                        ==========  =========== ===========

Real Estate Ownership
Net income                              $   43,189  $    42,444 $    32,973
Adjustments:
  Interest expense                          19,289       20,880      17,016
  Provision for income taxes                 1,089        1,581         646
  Depreciation and amortization             21,149       21,364      17,494
  Reconciling items attributable to
   discontinued operations                    (308)       1,959       2,490
                                        ----------  ----------- -----------
EBITDA - real estate ownership          $   84,408  $    88,228 $    70,619
                                        ==========  =========== ===========
EBITDA per share (diluted)              $     2.10  $      2.21 $      1.81
                                        ==========  =========== ===========

Total Company
EBITDA                                  $  146,213  $   179,373 $   176,302
                                        ==========  =========== ===========
EBITDA per share (diluted)              $     3.64  $      4.50 $      4.51
                                        ==========  =========== ===========
Diluted weighted average shares
 outstanding                            40,221,112   39,868,208  39,093,897
                                        ==========  =========== ===========

Non-GAAP Financial Disclosure

EBITDA as disclosed represents earnings before interest, taxes, depreciation and amortization. We believe that EBITDA is a useful supplemental measure for assessing the performance of our business segments, although it does not represent net income that is computed in accordance with GAAP. Accordingly, EBITDA should not be considered an alternative for net income as an indicator of our financial performance. EBITDA may not be comparable to similarly titled measures of other companies.


                          W. P. CAREY & CO. LLC
  Reconciliation of Net Income to Funds From Operations (FFO) (Unaudited)
            (in thousands, except share and per share amounts)

                                          Three months ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------  ----------
Investment Management
Net income (loss)                       $    9,603  $  (12,366) $   32,936
Amortization, deferred taxes and other
 non-cash charges                           (1,283)     (2,466)      6,285
FFO from equity investments                  3,095         551       1,015
                                        ----------  ----------  ----------
FFO - investment management             $   11,415  $  (14,281) $   40,236
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     0.28  $    (0.36) $     1.02
                                        ==========  ==========  ==========

Real Estate Ownership
Net income                              $   12,297  $   18,379  $   10,693
Gain on sale of investment in direct
 financing lease                                 -           -           -
Gain on sale of real estate, net                 -     (14,865)     (3,637)
Depreciation, amortization and other
 non-cash charges                            7,594       4,929       4,692
Straight-line and other rent
 adjustments                                   172         964         809
Impairment charges                             473       1,017       1,147
FFO from equity investments                  2,039       1,662       1,141
Minority investees share of FFO               (163)      5,106        (198)
                                        ----------  ----------  ----------
FFO - real estate ownership             $   22,412  $   17,192  $   14,647
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     0.56  $     0.43  $     0.37
                                        ==========  ==========  ==========

Total Company
FFO                                     $   33,827  $    2,911  $   54,883
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     0.84  $     0.07  $     1.39
                                        ==========  ==========  ==========
Diluted weighted average shares
 outstanding                            40,466,930  39,815,933  39,414,532
                                        ==========  ==========  ==========



                                             Years ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------  ----------
Investment Management
Net income (loss)                       $   34,858  $   36,808  $   53,330
Amortization, deferred taxes and other
 non-cash charges                            2,494      30,194      11,728
FFO from equity investments                 11,767       2,167       4,950
                                        ----------  ----------  ----------
FFO - investment management             $   49,119  $   69,169  $   70,008
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     1.22  $     1.73  $     1.79
                                        ==========  ==========  ==========

Real Estate Ownership
Net income                              $   43,189  $   42,444  $   32,973
Gain on sale of investment in direct
 financing lease                            (1,103)          -           -
Gain on sale of real estate, net                 -     (15,827)     (3,452)
Depreciation, amortization and other
 non-cash charges                           23,308      20,272      17,294
Straight-line and other rent
 adjustments                                   887       3,080       3,152
Impairment charges                           1,011       3,334       4,504
FFO from equity investments                  8,718       6,312       4,852
Minority investees share of FFO               (679)      4,482        (794)
                                        ----------  ----------  ----------
FFO - real estate ownership             $   75,331  $   64,097  $   58,529
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     1.87  $     1.61  $     1.50
                                        ==========  ==========  ==========

Total Company
FFO                                     $  124,450  $  133,266  $  128,537
                                        ==========  ==========  ==========
FFO per share (diluted)                 $     3.09  $     3.34  $     3.29
                                        ==========  ==========  ==========
Diluted weighted average shares
 outstanding                            40,221,112  39,868,208  39,093,897
                                        ==========  ==========  ==========

Non-GAAP Financial Disclosure

Funds from operations (FFO) is a non-GAAP financial measure that is commonly used in evaluating real estate companies. Although the National Association of Real Estate Investment Trusts (NAREIT) has published a definition of FFO, real estate companies often modify this definition as they seek to provide financial measures that meaningfully reflect their operations. FFO should not be considered as an alternative to net income as an indication of a company's operating performance or to cash flow from operating activities as a measure of its liquidity. It should be used in conjunction with GAAP net income. FFO disclosed by other REITs may not be comparable to our FFO calculation.

NAREIT's definition of FFO adjusts GAAP net income to exclude depreciation and gains/losses from the sales of properties and adjusts for FFO applicable to unconsolidated partnerships and joint ventures. We calculate FFO in accordance with this definition and then 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, impairment charges on real estate and unrealized foreign currency exchange gains and losses. 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 that have no impact on cash flows.



                          W. P. CAREY & CO. LLC
         Adjusted Cash Flow from Operating Activities (Unaudited)
            (in thousands, except share and per share amounts)

                                             Years ended December 31,
                                        ----------------------------------
                                           2008        2007        2006
                                        ----------  ----------  ----------
Cash flow from operating activities -
 as reported                            $   63,247  $   47,471  $  119,940
Adjustments:
CPA®:16 - Global performance
 adjustment, net (a)                       (12,291)      9,425       2,091
Settlement payment (b)                      21,012           -           -
CPA®:12/14 Merger - revenue net of
 costs/taxes (c)                                 -           -     (23,310)
CPA®:12/14 Merger - payment of taxes
 (d)                                             -      20,708     (20,708)
Distributions received from equity
 investments in real estate in excess
 of equity income (e)                       10,868       6,769       4,809
Distributions paid to minority
 partners, net (f)                          (3,025)          -           -
Changes in working capital (d)               9,574        (132)    (12,663)
                                        ----------  ----------  ----------
Adjusted cash flow from operating
 activities                             $   89,385  $   84,241  $   70,159
                                        ==========  ==========  ==========
Adjusted cash flow per share (diluted)  $     2.22  $     2.11  $     1.79
                                        ==========  ==========  ==========

Distributions declared per share        $    1.955  $    1.878  $    1.820
                                        ==========  ==========  ==========
Payout ratio (distributions per
 share/adjusted cash flow per share)            88%         89%        102%
                                        ==========  ==========  ==========
Diluted weighted average shares
 outstanding                            40,221,112  39,868,208  39,093,897
                                        ==========  ==========  ==========

Non-GAAP Financial Disclosure

Adjusted cash flow from operating activities is a non-GAAP financial measure that represents cash flow from operating activities on a GAAP basis adjusted for certain timing differences and deferrals as described below. We believe that adjusted cash flow from operating activities is a useful supplemental measure for assessing the cash flow generated from our core operations and is used in evaluating distributions to shareholders. Adjusted cash flow from operating activities should not be considered as an alternative for cash flow from operating activities computed on a GAAP basis as a measure of our liquidity. Adjusted cash flow from operating activities may not be comparable to similarly titled measures of other companies.

(a) Amounts deferred in lieu of CPA®:16 - Global achieving its performance criterion, net of a 45% tax provision. In determining cash flow generated from our core operations, we believe it is more appropriate to normalize cash flow for the impact of CPA®:16 - Global achieving its performance criterion, rather than recognizing the entire deferred amount in the quarter in which the performance criterion, was met as this revenue was actually earned over a three year period.

(b) In March 2008, we entered into a settlement with the SEC with respect to all matters relating to their investigation. As a result, we paid $30 million in the first quarter of 2008, and recognized an offsetting $9 million tax benefit in the same period.

(c) Amounts represent termination and disposition revenue, net of costs and a 45% tax provision, earned in connection with the CPA®:12/14 Merger. This revenue is generally earned in connection with events that provide liquidity or alternatives to the CPA® REIT shareholders. In determining cash flow generated from our core operations, we believe it is more appropriate to normalize cash flow for the impact of the net revenue earned in connection with the CPA®:12/14 Merger.

(d) Timing differences arising from the payment of certain liabilities in a period other than that in which the expense is recognized in determining net income may distort the actual cash flow that our core operations generate. We adjust our GAAP cash flow from operations to record such amounts in the period in which the liability was actually incurred. We believe this is a fairer measure of determining our cash flow from core operations.

(e) We take a substantial portion of our asset management revenue in shares of the CPA® REIT funds. To the extent we receive distributions in excess of the equity income that we recognize, we include such amounts in our evaluation of cash flow from core operations.

(f) Represents minority partners' share of distributions made by ventures that we consolidate in our financial statements. This adjustment in the calculation of adjusted cash flow from operating activities was introduced during the fourth quarter of 2008 because we believe that it results in a more accurate presentation of this supplemental measure.

Contact Information

  • COMPANY CONTACT:
    Susan Hyde
    W. P. Carey & Co. LLC
    212-492-1151
    Email Contact

    PRESS CONTACT:
    Guy Lawrence
    Ross & Lawrence
    212-308-3333
    Email Contact