SOURCE: W. P. Carey & Co. LLC

W. P. Carey & Co. LLC

February 24, 2011 09:00 ET

W. P. Carey Announces Fourth Quarter and Year-End 2010 Financial Results

NEW YORK, NY--(Marketwire - February 24, 2011) - Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the fourth quarter and year-ended December 31, 2010.

QUARTERLY AND YEAR-END RESULTS

--  Funds from operations -- as adjusted (AFFO) for the fourth quarter of
    2010 was $36.3 million or $0.90 per diluted share, compared to $33.7
    million or $0.83 per diluted share for the fourth quarter of 2009.
    AFFO for the year ended December 31, 2010 was $130.9 million or $3.27
    per diluted share, compared to $122.9 million or $3.09 per diluted
    share for 2009.
--  Cash flow from operating activities for the year ended December 31, 
    2010 was $86.4 million, compared to $74.5 million for 2009, while
    adjusted cash flow from operating activities was $88.6 million for
    2010, compared to $93.9 million for 2009.
--  Total revenues net of reimbursed expenses for the fourth quarter of
    2010 were $68.3 million, compared to $48.5 million for the fourth
    quarter of 2009.  Total revenues net of reimbursed expenses for the
    year ended December 31, 2010 were $213.9 million, compared to $184.8
    million in 2009.  Reimbursed expenses are excluded from total revenues
    because they have no impact on net income.
--  Net Income for the fourth quarter of 2010 was $19.8 million, compared
    to $23 million for the same period in 2009.  For the year ended
    December 31, 2010, net income was $74 million, compared to $69 million
    for 2009. Results from operations in our investment management segment
    were significantly higher in 2010, primarily due to a higher volume of
    investments structured on behalf of the CPA® REITs and lower
    impairment charges recognized by the CPA® REITs.
--  For the year ended December 31, 2010, we received approximately $16.6
    million in cash distributions from our equity ownership in the CPA®
    REITs.
--  Further information concerning AFFO and adjusted cash flow from
    operating activities -- non-GAAP supplemental performance metrics -- is
    presented in the accompanying tables and related notes.

INVESTMENT ACTIVITY

--  Investment volume for the year ended December 31, 2010 on behalf of the
    CPA® REITs and for our own portfolio totaled approximately $1.1
    billion, or double last year's volume of approximately $548 million.
    International investments comprised 43% of total investments during
    2010, compared to 36% in 2009, and we expect that international
    transactions will continue to form a significant portion of the
    investments we structure.
--  We closed approximately $593 million in investments on behalf of the
    CPA® REITs in the fourth quarter of 2010. These investments involved
    forty-seven facilities containing approximately five million square
    feet in the U.S., Canada, Croatia, China and Spain.

FUNDRAISING ACTIVITY

--  We continue to raise investor capital through our latest CPA® REIT
    offering, CPA®:17 -- Global, so that we may take advantage of
    attractive investment opportunities that we believe are afforded by the
    current market environment. To date, CPA®:17 -- Global has raised
    more than $1.4 billion in its initial offering.  CPA®:17 -- Global
    has filed a registration statement with the SEC for a follow-on
    offering of up to an additional $1 billion of common stock.
--  Carey Watermark Investors commenced its initial public offering of up
    to $1 billion of common stock, the proceeds of which will be used to
    acquire interests in lodging and lodging-related properties.

ASSETS UNDER MANAGEMENT

--  W. P. Carey is the advisor to the CPA® REITs, which had real estate
    assets of $8.5 billion and total assets of $8.8 billion as of December
    31, 2010.
--  As of December 31, 2010, the occupancy rate of W. P. Carey's 14 million
    square foot owned portfolio was approximately 89%.  In addition, for
    the 99 million square feet owned by the CPA® REITs, the average
    occupancy rate was approximately 97%.

PROPOSED MERGER OF CPA®:14 AND CPA®:16 -- GLOBAL

--  As previously disclosed, on December 13, 2010 two of the CPA® REITs
    we manage, CPA®:14 and CPA®:16 -- Global, entered into a definitive
    agreement pursuant to which CPA®:14 will merge with and into a
    subsidiary of CPA®:16 -- Global, subject to shareholder approval and
    other closing conditions.  If the merger is approved and the other
    closing conditions are satisfied, we currently expect that the closing
    will occur in the second quarter of 2011, although there can be no
    assurance of such timing.

DISTRIBUTIONS

--  The Board of Directors raised the quarterly cash distribution to $0.510
    per share for the fourth quarter of 2010.  The distribution -- our 39th
    consecutive quarterly increase -- was paid on January 14, 2011 to
    shareholders of record as of December 31, 2010.

Commenting on the 2010 results, W. P. Carey President and CEO, Trevor Bond noted, "With more than $1 billion in transactions completed and record fundraising of nearly $600 million, 2010 was one of our most successful years. These acquisitions have added to the geographic and industry diversity of our portfolios, and we believe we can build on this momentum in 2011. Although we're seeing new competitors entering the net lease market, we believe that our leading position in the sector combined with our seasoned acquisitions, asset management and capital-raising teams will allow us to source and execute on opportunities and maintain the risk-return profile that has been the hallmark of our CPA® programs. As global economics improve, we believe the demand for long-term capital to fund corporate growth and expansion will continue and that we are well positioned to grow and expand our own business in this environment."

CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register.

Time: Thursday, February 24, 2011 at 11:00 AM (ET)

Call-in Number: 800-860-2442
(International) +1-412-858-4600

Webcast: www.wpcarey.com/earnings

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

Replay Number: 877-344-7529
(International) +1-412-317-0088

Replay Passcode: 448255#
Replay Available until March 11, 2011 at 9:00 AM (ET).

W. P. Carey & Co. LLC

W. P. Carey & Co. LLC (NYSE: WPC) is an investment management company that provides long-term financing to companies worldwide via sale leaseback and build to suit transactions and manages a global investment portfolio of approximately $10.5 billion. Through its CPA® series of income-generating, non-traded REITs, W. P. Carey helps 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 275 long-term corporate obligors spanning 28 industries and 17 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,
                                        ----------------------------------
                                           2010        2009        2008
                                        ----------  ----------  ----------
Revenues
Asset management revenue                $   76,246  $   76,621  $   80,714
Structuring revenue                         44,525      23,273      20,236
Wholesaling revenue                         11,096       7,691       5,208
Reimbursed costs from affiliates            60,023      47,534      41,100
Lease revenues                              63,450      62,324      66,784
Other real estate income                    18,570      14,907      20,658
                                        ----------  ----------  ----------
                                           273,910     232,350     234,700
                                        ----------  ----------  ----------
Operating Expenses
General and administrative                 (73,429)    (63,819)    (62,669)
Reimbursable costs                         (60,023)    (47,534)    (41,100)
Depreciation and amortization              (23,969)    (22,438)    (23,082)
Property expenses                          (10,888)     (7,113)     (6,496)
Other real estate expenses                  (8,121)     (7,308)     (8,196)
Impairment charges                          (9,512)     (3,516)       (473)
                                        ----------  ----------  ----------
                                          (185,942)   (151,728)   (142,016)
                                        ----------  ----------  ----------
Other Income and Expenses
Other interest income                        1,268       1,713       2,883
Income from equity investments in real
 estate and CPA(R) REITs                    30,992      13,425      14,198
Gain on sale of investment in direct
 financing lease                                 -           -       1,103
Other income and (expenses)                  1,407       7,357       1,444
Interest expense                           (16,234)    (14,979)    (18,598)
                                        ----------  ----------  ----------
                                            17,433       7,516       1,030
                                        ----------  ----------  ----------
Income from continuing operations
 before income taxes                       105,401      88,138      93,714
Provision for income taxes                 (25,822)    (22,793)    (23,521)
                                        ----------  ----------  ----------
Income from continuing operations           79,579      65,345      70,193
                                        ----------  ----------  ----------
Discontinued Operations
Income from operations of discontinued
 properties                                    781       4,430       8,950
Gains on sale of real estate, net              460       7,701           -
Impairment charges                          (5,869)     (6,908)       (538)
                                        ----------  ----------  ----------
(Loss) income from discontinued
 operations                                 (4,628)      5,223       8,412
                                        ----------  ----------  ----------
Net Income                                  74,951      70,568      78,605
Add: Net loss attributable to
 noncontrolling interests                      314         713         950
Less: Net income attributable to
 redeemable noncontrolling interests        (1,293)     (2,258)     (1,508)
                                        ----------  ----------  ----------
Net Income Attributable to W. P. Carey
 Members                                $   73,972  $   69,023  $   78,047
                                        ==========  ==========  ==========
Basic Earnings Per Share
Income from continuing operations
 attributable to W. P. Carey members    $     1.98  $     1.61  $     1.77
(Loss) income from discontinued
 operations attributable to W. P. Carey
 members                                     (0.12)       0.13        0.21
                                        ----------  ----------  ----------
Net income attributable to W. P. Carey
 members                                $     1.86  $     1.74  $     1.98
                                        ==========  ==========  ==========
Diluted Earnings Per Share
Income from continuing operations
 attributable to W. P. Carey members    $     1.98  $     1.61  $     1.74
(Loss) income from discontinued
 operations attributable to W. P. Carey
 members                                     (0.12)       0.13        0.21
                                        ----------  ----------  ----------
Net income attributable to W. P. Carey
 members                                $     1.86  $     1.74  $     1.95
                                        ==========  ==========  ==========
Weighted Average Shares Outstanding
Basic                                   39,514,746  39,019,709  39,202,520
                                        ==========  ==========  ==========
Diluted                                 40,007,894  39,712,735  40,221,112
                                        ==========  ==========  ==========
Amounts Attributable to W. P. Carey
 Members
Income from continuing operations, net
 of tax                                 $   78,600  $   63,800  $   69,635
(Loss) income from discontinued
 operations, net of tax                     (4,628)      5,223       8,412
                                        ----------  ----------  ----------
Net income                              $   73,972  $   69,023  $   78,047
                                        ==========  ==========  ==========



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


                                             Years ended December 31,
                                        ----------------------------------
                                           2010        2009        2008
                                        ----------  ----------  ----------
Cash Flows -- Operating Activities
Net income                              $   74,951  $   70,568  $   78,605
Adjustments to net income:
  Depreciation and amortization
   including intangible assets and
   deferred financing costs                 24,443      24,476      27,197
  (Income) loss from equity investments
   in real estate and CPA® REITs in
   excess of distributions received         (4,920)     (2,258)      1,866
  Straight-line rent and financing lease
   adjustments                                 286       2,223       2,227
  Gain on sale of real estate and
   investment in direct financing lease       (460)     (7,701)     (1,103)
  Gain on extinguishment of debt                 -      (6,991)          -
  Gain on lease termination                      -           -      (4,998)
  Allocation of (loss) earnings to
   profit-sharing interest                    (781)      3,900           -
  Management income received in shares
   of affiliates                           (35,235)    (31,721)    (40,717)
  Unrealized loss (gain) on foreign
   currency transactions and others            300        (174)      2,656
  Realized gain on foreign currency
   transactions and others                    (731)       (257)     (2,250)
  Impairment charges                        15,381      10,424       1,011
  Stock-based compensation expense           7,082       9,336       7,278
  Deferred acquisition revenue received     21,204      25,068      48,266
  Increase in structuring revenue
   receivable                              (20,237)    (11,672)    (10,512)
  Decrease in income taxes, net             (1,288)     (9,276)     (8,079)
  Decrease in settlement provision               -           -     (29,979)
  Net changes in other operating assets
   and liabilities                           6,422      (1,401)     (8,221)
                                        ----------  ----------  ----------
Net cash provided by operating
 activities                                 86,417      74,544      63,247
                                        ----------  ----------  ----------
Cash Flows -- Investing Activities
  Distributions received from equity
   investments in real estate and CPA®
   REITs in excess of equity income         18,758      39,102      19,852
  Capital contributions to equity
   investments                                   -      (2,872)     (1,769)
  Purchases of real estate and equity
   investments in real estate              (96,884)    (39,632)       (201)
  VAT paid in connection with
   acquisition of real estate               (4,222)          -           -
  VAT refunded in connection with
   acquisition of real estate                    -           -       3,189
  Capital expenditures                      (5,135)     (7,775)    (14,051)
  Proceeds from sale of real estate, net
   investment in direct financing lease
   and securities                           14,591      43,487       5,062
  Funds placed in escrow in connection
   with the sale of property                (1,571)    (36,132)          -
  Funds released from escrow in
   connection with the sale of property     36,620           -         636
  Proceeds from transfer of
   profit-sharing interest                       -      21,928           -
  Payment of deferred acquisition
   revenue to affiliate                          -           -        (120)
                                        ----------  ----------  ----------
Net cash (used in) provided by
 investing activities                      (37,843)     18,106      12,598
                                        ----------  ----------  ----------
Cash Flows -- Financing Activities
  Distributions paid                       (92,591)    (78,618)    (87,700)
  Contributions from noncontrolling
   interests                                14,261       2,947       2,582
  Distributions to noncontrolling
   interests                                (4,360)     (5,505)     (5,607)
  Contributions from profit-sharing
   interest                                  3,694           -           -
  Distributions to profit-sharing
   interest                                   (693)     (5,645)          -
  Purchase of noncontrolling interest            -     (15,380)          -
  Scheduled payments of non-recourse
   debt                                    (14,324)     (9,534)     (9,678)
  Prepayments of non-recourse debt               -     (13,974)          -
  Proceeds from non-recourse debt
   financing                                56,841      42,495      10,137
  Proceeds from line of credit              83,250     150,500     129,300
  Prepayments of line of credit            (52,500)   (148,518)   (111,572)
  Proceeds from loans from affiliates            -       1,625           -
  Repayments of loans from affiliates            -      (1,770)     (7,569)
  Payment of financing costs                (1,204)       (862)       (375)
  Funds placed in escrow in connection
   with financing                                -           -        (400)
  Proceeds from issuance of shares           3,724       1,507      23,350
  Windfall tax benefits associated with
   stock-based compensation awards           2,354         143       2,156
  Repurchase and retirement of shares            -     (10,686)    (15,413)
                                        ----------  ----------  ----------
Net cash used in financing activities       (1,548)    (91,275)    (70,789)
                                        ----------  ----------  ----------
Change in Cash and Cash Equivalents
  During the Year
    Effect of exchange rate changes on
     cash                                     (783)        276        (394)
                                        ----------  ----------  ----------
    Net increase in cash and cash
     equivalents                            46,243       1,651       4,662
  Cash and cash equivalents, beginning
   of year                                  18,450      16,799      12,137
                                        ----------  ----------  ----------
  Cash and cash equivalents, end of
   year                                 $   64,693  $   18,450  $   16,799
                                        ==========  ==========  ==========


                          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 -- as adjusted ("AFFO") 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,
                -------------------------- -------------------------------
                  2010     2009     2008     2010       2009       2008
                -------- -------- -------- ---------  ---------  ---------
EBITDA
Investment
 management     $ 31,055 $ 18,892 $ 13,079 $  80,366  $  54,179  $  61,805
Real estate
 ownership        10,679   20,883   23,238    60,123     77,674     84,408
                -------- -------- -------- ---------  ---------  ---------
Total           $ 41,734 $ 39,775 $ 36,317 $ 140,489  $ 131,853  $ 146,213
                ======== ======== ======== =========  =========  =========

AFFO
Investment
 management     $ 23,511 $ 16,802 $ 11,415 $  68,663  $  55,550  $  49,119
Real estate
 ownership        12,766   16,871   22,412    62,207     67,326     75,331
                -------- -------- -------- ---------  ---------  ---------
Total           $ 36,277 $ 33,673 $ 33,827 $ 130,870  $ 122,876  $ 124,450
                ======== ======== ======== =========  =========  =========

EBITDA Per
 Share
 (Diluted)
Investment
 management     $   0.77 $   0.47 $   0.32 $    2.01  $    1.36  $    1.54
Real estate
 ownership          0.27     0.52     0.58      1.50       1.96       2.10
                -------- -------- -------- ---------  ---------  ---------
Total           $   1.04 $   0.99 $   0.90 $    3.51  $    3.32  $    3.64
                ======== ======== ======== =========  =========  =========

AFFO Per Share
 (Diluted)
Investment
 management     $   0.58 $   0.41 $   0.28 $    1.72  $    1.39  $    1.22
Real estate
 ownership          0.32     0.42     0.56      1.55       1.70       1.87
                -------- -------- -------- ---------  ---------  ---------
Total           $   0.90 $   0.83 $   0.84 $    3.27  $    3.09  $    3.09
                ======== ======== ======== =========  =========  =========

Adjusted Cash
 Flow From
 Operating
 Activities
Adjusted cash
 flow                                      $  88,634  $  93,880  $  89,385
                                           =========  =========  =========
Adjusted cash
 flow per share
 (diluted)                                 $    2.22  $    2.36  $    2.22
                                           =========  =========  =========

Distributions
 declared per
 share                                     $   2.028  $   1.996  $   1.955
                                           =========  =========  =========
Payout ratio
 (distributions
 per
 share/adjusted
 cash flow per
 share)                                           91%        85%        88%


                          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,
                                        -----------------------------------
                                           2010        2009        2008
                                        ----------- ----------- -----------
Investment Management
Net income from investment management
 attributable to W. P. Carey members    $    18,751 $    11,616 $     9,603
Adjustments:
  Provision for income taxes                 11,141       6,227       2,246
  Depreciation and amortization               1,163       1,049       1,230
                                        ----------- ----------- -----------
EBITDA - investment management          $    31,055 $    18,892 $    13,079
                                        =========== =========== ===========
EBITDA per share (diluted)              $      0.77 $      0.47 $      0.32
                                        =========== =========== ===========

Real Estate Ownership
Net income from real estate ownership
 attributable to W. P. Carey members    $     1,030 $    11,370 $    12,297
Adjustments:
  Interest expense                            4,460       3,734       4,019
  Provision for income taxes                    441         628         870
  Depreciation and amortization               4,748       4,594       3,392
  Reconciling items attributable to
   discontinued operations                        -         557       2,660
                                        ----------- ----------- -----------
EBITDA - real estate ownership          $    10,679 $    20,883 $    23,238
                                        =========== =========== ===========
EBITDA per share (diluted)              $      0.27 $      0.52 $      0.58
                                        =========== =========== ===========

Total Company
EBITDA                                  $    41,734 $    39,775 $    36,317
                                        =========== =========== ===========
EBITDA per share (diluted)              $      1.04 $      0.99 $      0.90
                                        =========== =========== ===========
Diluted weighted average shares
 outstanding                             40,104,715  40,390,393  40,466,930
                                        =========== =========== ===========


                                             Years ended December 31,
                                        -----------------------------------
                                           2010        2009        2008
                                        ----------- ----------- -----------
Investment Management
Net income from investment management
 attributable to W. P. Carey members    $    50,662 $    29,334 $    34,858
Adjustments:
  Provision for income taxes                 25,052      21,038      22,432
  Depreciation and amortization               4,652       3,807       4,515
                                        ----------- ----------- -----------
EBITDA - investment management          $    80,366 $    54,179 $    61,805
                                        =========== =========== ===========
EBITDA per share (diluted)              $      2.01 $      1.36 $      1.54
                                        =========== =========== ===========

Real Estate Ownership
Net income from real estate ownership
 attributable to W. P. Carey members    $    23,310 $    39,689 $    43,189
Adjustments:
  Interest expense                           16,234      14,979      18,598
  Provision for income taxes                    770       1,755       1,089
  Depreciation and amortization              19,317      18,631      18,567
  Reconciling items attributable to
   discontinued operations                      492       2,620       2,965
                                        ----------- ----------- -----------
EBITDA - real estate ownership          $    60,123 $    77,674 $    84,408
                                        =========== =========== ===========
EBITDA per share (diluted)              $      1.50 $      1.96 $      2.10
                                        =========== =========== ===========

Total Company
EBITDA                                  $   140,489 $   131,853 $   146,213
                                        =========== =========== ===========
EBITDA per share (diluted)              $      3.51 $      3.32 $      3.64
                                        =========== =========== ===========
Diluted weighted average shares
 outstanding                             40,007,894  39,712,735  40,221,112
                                        =========== =========== ===========

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


                                          Three months ended December 31,
                                        ----------------------------------
                                           2010        2009        2008
                                        ----------  ----------  ----------
Investment Management
Net income from investment management
 attributable to W. P. Carey members    $   18,751  $   11,616  $    9,603
Amortization, deferred taxes and other
 non-cash charges                            2,275      (3,370)     (1,283)
AFFO from equity investments                 2,485       8,556       3,095
                                        ----------  ----------  ----------
AFFO -- investment management           $   23,511  $   16,802  $   11,415
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     0.58  $     0.41  $     0.28
                                        ==========  ==========  ==========

Real Estate Ownership
Net income from real estate ownership
 attributable to W. P. Carey members    $    1,030  $   11,370  $   12,297
Gain on sale of direct financing lease           -           -           -
Gain on sale of real estate, net                 -      (7,358)          -
Gain on extinguishment of debt, net (a)          -           -           -
Other gains (losses), net                     (755)          -           -
Depreciation, amortization and other
 non-cash charges                            4,739       4,976       7,594
Straight-line and other rent
 adjustments                                   128         465         172
Impairment charges                           6,763       5,754         473
AFFO from equity investments                 1,018       1,818       2,039
Noncontrolling interests' share of AFFO       (157)       (154)       (163)
                                        ----------  ----------  ----------
AFFO -- real estate ownership           $   12,766  $   16,871  $   22,412
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     0.32  $     0.42  $     0.56
                                        ==========  ==========  ==========

Total Company
AFFO                                    $   36,277  $   33,673  $   33,827
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     0.90  $     0.83  $     0.84
                                        ==========  ==========  ==========
Diluted weighted average shares
 outstanding                            40,104,715  40,390,393  40,466,930
                                        ==========  ==========  ==========



                                             Years ended December 31,
                                        ----------------------------------
                                           2010        2009        2008
                                        ----------  ----------  ----------
Investment Management
Net income from investment management
 attributable to W. P. Carey members    $   50,662  $   29,334  $   34,858
Amortization, deferred taxes and other
 non-cash charges                            7,305       1,796       2,494
AFFO from equity investments                10,696      24,420      11,767
                                        ----------  ----------  ----------
AFFO -- investment management           $   68,663  $   55,550  $   49,119
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     1.72  $     1.39  $     1.22
                                        ==========  ==========  ==========

Real Estate Ownership
Net income from real estate ownership
 attributable to W. P. Carey members    $   23,310  $   39,689  $   43,189
Gain on sale of direct financing lease           -           -      (1,103)
Gain on sale of real estate, net              (460)     (7,701)          -
Gain on extinguishment of debt, net (a)          -      (2,796)          -
Other gains (losses), net                     (755)          -           -
Depreciation, amortization and other
 non-cash charges                           19,449      19,513      23,308
Straight-line and other rent
 adjustments                                   295       1,273         887
Impairment charges                          15,381      10,424       1,011
AFFO from equity investments                 5,598       7,505       8,718
Noncontrolling interests' share of AFFO       (611)       (581)       (679)
                                        ----------  ----------  ----------
AFFO -- real estate ownership           $   62,207  $   67,326  $   75,331
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     1.55  $     1.70  $     1.87
                                        ==========  ==========  ==========

Total Company
AFFO                                    $  130,870  $  122,876  $  124,450
                                        ==========  ==========  ==========
AFFO per share (diluted)                $     3.27  $     3.09  $     3.09
                                        ==========  ==========  ==========
Diluted weighted average shares
 outstanding                            40,007,894  39,712,735  40,221,112
                                        ==========  ==========  ==========

(a) In January 2009, Carey Storage repaid, in full, the $35.0 million outstanding balance on its secured credit facility for $28.0 million and recognized a gain of $7.0 million on the repayment of this debt at a discount, inclusive of the profit sharing interest of $4.2 million.

Non-GAAP Financial Disclosure

Funds from operations (FFO) is a non-GAAP financial measure that is commonly used by investors and analysts 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 or funds from operations - as adjusted (AFFO) 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 but should be used in conjunction with GAAP net income. FFO or AFFO disclosed by other REITs may not be comparable to our AFFO 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 AFFO 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, 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. As a result, we believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better understand and measure the performance of our business over time without the potentially distorting impact of these short-term fluctuations.

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


                                             Years ended December 31,
                                        ----------------------------------
                                           2010        2009        2008
                                        ----------  ----------  ----------
Cash flow from operating activities     $   86,417  $   74,544  $   63,247
Adjustments:
Distributions received from equity
 investments in real estate in excess
 of equity income (a)                        9,253      18,503      10,868
Distributions paid to noncontrolling
 interests, net (b)                           (614)       (568)     (3,025)
Changes in working capital (c)              (6,422)      1,401       9,574
Settlement payment (d)                           -           -      21,012
CPA®:16 -- Global performance
 adjustment, net (e)                             -           -     (12,291)
                                        ----------  ----------  ----------
Adjusted cash flow from operating
 activities                             $   88,634  $   93,880  $   89,385
                                        ==========  ==========  ==========
Adjusted cash flow per share (diluted)  $     2.22  $     2.36  $     2.22
                                        ==========  ==========  ==========

Distributions declared per share        $    2.028  $    1.996  $    1.955
                                        ==========  ==========  ==========
Payout ratio (distributions per
 share/adjusted cash flow per share)            91%         85%         88%
Diluted weighted average shares
 outstanding                            40,007,894  39,712,735  40,221,112
                                        ==========  ==========  ==========

(a) 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.

(b) Represents noncontrolling interests' share of distributions made by ventures that we consolidate in our financial statements.

(c) Timing differences arising from the payment of certain liabilities and the receipt of certain receivables in a period other than that in which the item is recognized in determining net income may distort the actual cash flow that our core operations generate. We adjust our GAAP cash flow from operating activities to record such amounts in the period in which the item was actually recognized.

(d) In March 2008, we entered into a settlement with the SEC with respect to all matters relating to a previously disclosed investigation. In connection with this settlement, we paid $30.0 million in the first quarter of 2008 and recognized an offsetting $9.0 million tax benefit in the same period.

(e) 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 (second quarter of 2007), as this revenue was actually earned over a three-year period.

Non-GAAP Financial Disclosure

Adjusted cash flow from operating activities refers to our cash provided by operating activities, as determined in accordance with GAAP, adjusted primarily to reflect timing differences between the period an expense is incurred and paid, to add cash distributions that we receive from our investments in unconsolidated real estate joint ventures in excess of our equity investment in the joint ventures, and to subtract cash distributions that we make to our noncontrolling partners in real estate joint ventures that we consolidate. We hold a number of interests in real estate joint ventures, and we believe that adjusting our GAAP cash provided by operating activities to reflect these actual cash receipts and cash payments may give investors a more accurate picture of our actual cash flow than GAAP cash provided by operating activities alone and that it is a useful supplemental measure for investors to consider. We also believe that adjusted cash flow from operating activities is a useful supplemental measure for assessing the cash flow generated from our core operations, and we use this measure when evaluating distributions to shareholders and as one measure of our operating performance when we determine executive compensation. Adjusted cash flow from operating activities should not be considered as an alternative to cash provided by 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.

Contact Information

  • COMPANY CONTACT:
    Kristina McMenamin
    W. P. Carey & Co. LLC
    212-492-8995
    Email Contact

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