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8-K - 8-K - W. P. Carey Inc.a13-17927_28k.htm

Exhibit 99.1

Filed pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule14a-12 under the Securities Exchange Act of 1934, as amended

Filing Person: W. P. Carey Inc.

Subject Company: Corporate Property Associates 16 – Global Incorporated

Commission File No.: 001-32162

 

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W. P. CAREY INC.

Supplemental Unaudited Operating and Financial Data

 

As of June 30, 2013

 

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Important Disclosures About this Supplemental Package

 

As used in this supplemental package, the terms “W. P. Carey,” “WPC” “the Company,” “we,” “us” and “our” include W. P. Carey Inc., its consolidated subsidiaries, and predecessors, unless otherwise indicated. “WPC LLC” means W. P. Carey & Co. LLC, our predecessor company. The “CPA®:15 Merger” means our merger with Corporate Property Associates 15 Incorporated (“CPA®:15”) on September 28, 2012. “CPA® REITs” means CPA®:15, Corporate Property Associates 16 – Global Incorporated (“CPA®:16 – Global”), and Corporate Property Associates 17 – Global Incorporated (“CPA®:17 – Global”). The “Managed REITs” means the CPA® REITs and Carey Watermark Investors Incorporated (“CWI”). “W. P. Carey Group” means W. P. Carey, together with the Managed REITs.

 

Important Note Regarding Non-GAAP Financial Measures

 

This supplemental package includes certain “non-GAAP” supplemental metrics that are not defined by generally accepted accounting principles (“GAAP”), including earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, funds from operations (“FFO”), funds from operations - as adjusted (“AFFO”), pro rata net operating income (“NOI”), pro rata debt, total adjusted real estate revenue, total adjusted general and administrative expense (“Adjusted G&A”) and adjusted revenue. A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures are provided on page 42 within this supplemental package. FFO is non-GAAP measure defined by the National Association of Real Estate Investments Trusts (“NAREIT”).

 

Cautionary Statement Concerning Forward-Looking Statements:

 

Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Federal securities laws. The forward-looking statements include, among other things, statements regarding the intent, belief or expectations of W. P. Carey and can be identified by the use of words such as “may,” “will,” “should,” “would,” “assume,” “outlook,” “seek,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast” and other comparable terms. These statements are based on the current expectations of the management of W. P. Carey.  It is important to note that W. P. Carey’s actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of W. P. Carey. Discussions of some of these other important factors and assumptions are contained in W. P. Carey’s filings and the filings of its predecessor W. P. Carey & Co. LLC with the Securities and Exchange Commission (“SEC”) and are available at the SEC’s website at http://www.sec.gov, including the Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC on February 26, 2013.  In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Except as required under the Federal securities laws and the rules and regulations of the SEC, W. P. Carey does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events.

 


 

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Earnings Release and Supplemental
Financial Information

 

 

Unaudited, Second Quarter 2013

August 6, 2013

 


 

W. P. CAREY INC.

Supplemental Unaudited Operating and Financial Data

As of June 30, 2013

 

 

 

 

 

Overview

 

Press Release

1

 

 

Highlights

 

Company Overview

5

Financial and Operational Statistics

6

 

 

Financial Information

 

Consolidated Balance Sheets

7

Consolidated Statements of Income

8

Reconciliation of Net Income to Funds from Operations – as Adjusted (AFFO)

9

Reconciliation of Consolidated Statement of Income to AFFO - Current Quarter

11

Reconciliation of Consolidated Statement of Income to AFFO - Year-to-Date

13

Reconciliation of GAAP Net Income to Adjusted EBITDA

15

Adjusted Revenue Analysis

16

Total Adjusted Real Estate Revenue – W. P. Carey Group

18

Adjusted G&A

19

Business Segment and Financial Information

20

Pro Rata NOI

21

 

 

Debt and Other Information

 

Portfolio Debt Overview

22

Detailed Debt Summary

24

Selected Data for the Managed REITs

27

Joint Venture Information

28

 

 

WPC Portfolio Information

 

Portfolio Information – Diversification by Rent and Historical Occupancy

29

Portfolio Information – Diversification by Property Type

30

Portfolio Information – Diversification by Tenant Industry

31

Portfolio Information – Diversification by Geography

32

Portfolio Information – Lease Maturities

33

 

 

2013 Investment Activity

 

Owned Portfolio – Acquisitions and Dispositions

34

Managed REITs – Acquisitions

35

Managed REITs – Dispositions

37

 

 

Tenants by Annualized Contractual Minimum Base Rent

38

 

 

Terms and Definitions

42

 


 

Press Release

 

W. P. Carey Announces Second Quarter 2013 Financial Results

 

 

 

New York, NY – August 6, 2013 – W. P. Carey Inc. (NYSE: WPC), a real estate investment trust (“REIT”), today reported financial results for the second quarter ended June 30, 2013.

 

During the second quarter of 2013, the Company:

 

·                  Reported Funds from operations—as adjusted (“AFFO”) of $1.05 per diluted share

 

·                  Acquired three properties for approximately $113 million

 

·                  Structured $305 million of investments on behalf of the Managed REITs

 

·                  Raised its annualized dividend rate to $3.36 per share, WPC’s 49th consecutive quarterly increase

 

Subsequent to the second quarter, the Company:

 

·                  Announced a merger agreement with Corporate Property Associates 16 – Global Incorporated (“CPA®:16 – Global”)

 

·                  Structured $196 million of investments on behalf of the Managed REITs through August 1, 2013

 

·                  Entered into a new unsecured term loan agreement of $300 million and used the proceeds primarily to repay the $250 million outstanding on its existing Revolving Credit Facility on July 31, 2013

 

QUARTERLY RESULTS

 

·                  AFFO for the second quarter of 2013 was $72.6 million or $1.05 per diluted share, compared to $27.8 million or $0.68 per diluted share for the second quarter of 2012. AFFO for the six months ended June 30, 2013 was $144.9 million or $2.07 per diluted share, compared to $67.9 million or $1.66 per diluted share for the comparable period in 2012. The increased AFFO in the three and six months ended June 30, 2013 as compared to the same periods in 2012 was primarily due to income from the properties we acquired in our merger with CPA®:15 on September 28, 2012 (the “CPA®:15 Merger”) partially offset by the cessation of asset management revenue received from CPA®:15 after the CPA®:15 Merger was completed. Per share data for the 2013 periods also reflects the issuance of 28.2 million shares in connection with the CPA®:15 Merger to the stockholders of CPA®:15. Further information concerning AFFO, a non-GAAP supplemental performance metric, is presented in the accompanying tables and related notes.

 

·                  Total revenues net of reimbursed expenses for the second quarter of 2013 were $103.6 million, compared to $46.6 million for the second quarter of 2012. Total revenues net of reimbursed expenses for the six months ended June 30, 2013 were $204.1 million, compared to $96.2 million for the comparable period in 2012. Reimbursed expenses are excluded from total revenues because they have no impact on net income.

 

·                  Net Income for the second quarter of 2013 was $43.2 million, compared to $31.8 million for the same period in 2012. Net Income for the six months ended June 30, 2013 was $57.3 million, compared to $44.1 million for the prior year period.

 

·                  For the quarter ended June 30, 2013, we received approximately $15.6 million in cash distributions from our equity ownership in the CPA® REITs including $8.7 million in Available Cash distributions related to our special general partnership interests in the CPA® REITs.

 

Proposed Merger with CPA®:16 – GLOBAL

 

·                  On July 25, 2013, we announced that our Board of Directors and the Board of Directors of our publicly held, non-traded REIT affiliate CPA®:16 – Global, had each unanimously approved a merger agreement pursuant to which CPA®:16 – Global will merge with and into a subsidiary of W. P. Carey in a transaction valued at approximately $4.0 billion, including debt.

 

 

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Press Release

(Continued)

 

·                  Following the proposed merger, the combined company is expected to have an equity market capitalization of approximately $6.5 billion and a total enterprise value of approximately $10.1 billion. The combined portfolio will consist of more than 700 properties with 86 million square feet of corporate real estate leased to 231 companies around the world.

 

·                  The proposed merger is subject to SEC review and the approvals of the stockholders of each of W. P. Carey and CPA®:16 – Global. CPA®:16 – Global has a 30-day go-shop period. We currently expect that the closing will occur in the first quarter of 2014, although there can be no assurance that the transaction will close at such time, if at all.

 

W. P. CAREY OWNED PORTFOLIO UPDATE

 

·                  In April 2013, W. P. Carey acquired the main European distribution center of the Tommy Hilfiger Group for approximately €27 million ($35 million). The 473,437 square foot facility is located in Venlo, Netherlands and is subject to an existing net lease with Tommy Hilfiger Europe B.V., which has been owned since 2010 by PVH Corp, one of the world’s largest apparel companies.

 

·                  In June 2013, W. P. Carey acquired the research and development (“R&D”) and class-A office facilities of Cargotec Corporation for approximately €40 million ($52 million). The 183,567 square foot facility is located in Tampere, Finland and is subject to a 20-year net lease with Cargotec. Cargotec is a Finnish public company that develops and manufactures cargo-handling machinery for ships, ports, terminals and local distribution. It operates in 120 countries, employs approximately 10,000 personnel globally and generated more than €3.3 billion ($4.3 billion) in revenues in 2012.

 

·                  In June 2013, W. P. Carey acquired the corporate headquarters of the Arbella Insurance Group for approximately $26 million. Located in Quincy, Massachusetts, the 132,160 square foot office facility is subject to an existing 14-year net lease with the company.

 

·                  During the second quarter of 2013, W. P. Carey disposed of four properties for total proceeds of $38 million.

 

·                  The W. P. Carey owned portfolio currently consists of 423 leased properties comprising 39.5 million square feet leased to approximately 123 corporate tenants. The average lease term of the portfolio is 8.8 years and the occupancy rate is approximately 98.9%.

 

W. P. CAREY MANAGED PORTFOLIO UPDATE

 

·                  W. P. Carey is the advisor to the CPA® REITs and Carey Watermark Investors Incorporated (“CWI”), which had aggregate real estate assets of $6.4 billion, cash of approximately $0.8 billion and total assets of $8.8 billion as of June 30, 2013. The average occupancy rate for the 77.3 million square feet owned by the CPA® REITs was approximately 98.8%.

 

CPA®:17 – GLOBAL ACTIVITY

 

·                  During the second quarter of 2013, we structured $113 million of new investments on behalf of CPA®:17 – Global, including two self-storage transactions totaling $87 million.

 

·                  In July 2013, we completed two sale-leaseback transactions totaling €95 million ($123 million) on behalf of CPA®:17 – Global, including an H&M Hennes & Mauritz AB logistics facility in Poznan, Poland for €64 million ($83 million) and the new European R&D center for Royal FreislandCampina NV in Wageningen, the Netherlands for €31 million ($40 million).

 

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Press Release

(Continued)

 

 

CPA®:18 – GLOBAL ACTIVITY

 

·                  In May 2013, we announced that the registration statement for CPA®:18 – Global had been declared effective by the Securities and Exchange Commission (“SEC”) and that CPA®:18 - Global had commenced a capital raise of up to $1 billion.

 

CAREY WATERMARK INVESTORS ACTIVITY

 

·                  From the beginning of its initial public offering through June 30, 2013, CWI, our lodging-focused non-traded REIT offering, has raised approximately $366 million.

 

·                  During the second quarter of 2013, CWI invested in two hotels for a total of approximately $198 million. Investments included the 247-room Hutton Hotel in Nashville, TN for a total investment of $77 million, which includes $4 million of planned capital improvements, and the 226-room Holiday Inn® Manhattan 6th Avenue for a total investment of $121 million, which includes $8 million of planned capital improvements.

 

·                  In July 2013, CWI acquired a joint venture interest in the 226-room Fairmont Sonoma Mission Inn & Spa from Fairmont Hotels & Resorts. CWI’s interest in the joint venture, which represents a total investment of $97 million, is 75% percent while Fairmont will retain a 25% ownership interest. Also in July 2013, CWI sold its 49% interest in a joint venture owning two hotels located in Long Beach, CA for approximately $23 million.

 

DIVIDENDS

 

·                  The W. P. Carey Board of Directors raised the quarterly cash dividend to $0.84 per share for the second quarter of 2013. This represents a 2.4% increase from the first quarter of 2013 and a 48% increase over the second quarter of 2012. The dividend—our 49th consecutive quarterly increase—was paid on July 15, 2013 to stockholders of record as of July 1, 2013.

 

W. P. Carey President and CEO Trevor Bond, noted, “We are very pleased with both our second quarter results and the announcement of our proposed merger with CPA®:16 – Global, another milestone transaction which will significantly increase our real estate assets under ownership and reinforce our status as a leading global net-lease REIT. As we have for four decades, we will continue to focus on our strategy of disciplined investing in order to generate stable and growing cash flows and dividend income for our investors.”

 

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Press Release

(Continued)

 

 

Conference Call and Audio Webcast Scheduled for 11:00 AM (ET)

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

Time: Tuesday, August 6, 2013 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: 10031287

Replay available until September 22, 2013 at 9:00 AM (ET).

 

W. P. Carey Inc.
Celebrating its 40th anniversary, W. P. Carey Inc. is a publicly traded REIT (NYSE: WPC) that provides long-term sale-leaseback and build-to-suit financing for companies worldwide and owns and manages an investment portfolio totaling approximately $15.4 billion. The largest owner/manager of net lease assets, WPC’s corporate finance-focused credit and real estate underwriting process is a constant that has been successfully leveraged across a wide variety of industries and property types. Its portfolio of long-term leases with creditworthy tenants has an established history of generating stable cash flows that have enabled the Company to deliver consistent dividend income to investors for nearly four decades. www.wpcarey.com

 

This press release contains forward-looking statements within the meaning of the Federal securities laws. Examples of such forward-looking statements include, but are not limited to, the statements made by Mr. Bond. A number of factors could cause W. P. Carey’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 W. P. Carey, reference is made to W. P. Carey’s filings with the Securities and Exchange Commission.

 

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Company Overview

 

 

Key Company Contacts

 

Executive Offices

Trevor P. Bond

President, Chief Executive Officer and Director

50 Rockefeller Plaza

Catherine D. Rice

Chief Financial Officer and Managing Director

New York, NY 10020

Thomas E. Zacharias

Chief Operating Officer and Managing Director

Tel: 1-800-WPCAREY or (212) 492-1100

Kristin A. Brown

Vice President, Investor Relations

Fax: (212) 492-8922

 

 

Web Site Address: www.wpcarey.com

Banks

 

 

Bank of America, N.A.

Administrative and Documentation Agent

 

The Bank of New York Mellon

Syndication Agent

 

JPMorgan Chase Bank, N.A.

Syndication Agent

 

PNC Bank, N.A.

Syndication Agent

 

Wells Fargo Bank, N.A.

Syndication Agent

 

RBS Citizens, N.A.

Syndication Agent

 

Regions Bank

Syndication Agent

 

U.S. Bank N.A.

Syndication Agent

 

Fifth Third Bank

Syndication Agent

 

Comerica Bank

Syndication Agent

 

 

 

 

Analyst Coverage

 

 

Daniel P. Donlan

Ladenburg Thalmann & Co., Inc.

 

Sheila McGrath

Evercore Partners Inc.

 

 

Stock Data (NYSE: WPC)

 

Second Quarter
2013

 

 

First Quarter
2013

 

 

Fourth Quarter
2012

 

 

Third Quarter
2012

 

 

Second Quarter
2012

 

High Price

$

78.58

 

$

68.45

 

$

54.70

 

$

53.85

 

$

48.39

 

Low Price

 

63.66

 

 

51.89

 

 

45.94

 

 

43.25

 

 

39.66

 

Closing Price

 

66.17

 

 

67.40

 

 

52.15

 

 

49.00

 

 

46.03

 

Distributions declared per share - annualized

$

3.36

 

$

3.28

 

$

2.64

 

$

2.60

 

$

2.27

 

Distribution yield

(annualized distribution / closing stock price)

 

5.08%

 

 

4.87%

 

 

5.06%

 

 

5.31%

 

 

4.93%

 

Shares outstanding at quarter end

 

68,217,189

 

 

68,762,259

 

 

68,485,525

 

 

68,566,888

 

 

40,358,186

 

Market value of outstanding shares at quarter end ($’000)

$

4,513,931

 

$

4,634,576

 

$

3,571,520

 

$

3,359,778

 

$

1,857,687

 

 

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Financial and Operational Statistics (Unaudited)

 

As of and for the Six Months Ended June 30, 2013

Market Capitalization

 

WPC

Shares outstanding

 

68,217,189

Stock price at end of period

 

$

66.17

Market capitalization (equity capitalization) ($’000)

 

$

4,513,931

Total capitalization ($’000) (a)

 

$

6,520,596

Enterprise value ($’000)(b)

 

$

6,457,831

High stock close price

 

$

78.58

Low stock close price

 

$

63.66

Financial Ratios

 

WPC

Debt to total capitalization

 

30.8%

Net debt to total capitalization (c)

 

29.8%

Net debt to enterprise value (c)

 

30.1%

Adjusted EBITDA ($’000)(d)

 

$

390,958

Net debt to adjusted EBITDA (c)

 

5.0

Total debt to gross assets (e)

 

44.9%

Unsecured debt to gross assets

 

8.6%

Interest coverage (f)

 

3.64

Adjusted G&A / Total Adjusted Real Estate Revenue (g)

 

7.4%

Dividend (h)

 

$

3.36

Dividend payout (i)

 

81.0%

Weighted-average cost of debt

 

4.6%

Property Information

 

CPA®:16 - Global

 

CPA®:17 - Global

 

WPC

Number of properties(j)

 

488

 

340

 

423

Number of tenants (j)

 

141

 

87

 

123

Total square feet (millions) (k)

 

45.9

 

32.0

 

39.5

Occupancy

 

97.9%

 

100.0%

 

98.9%

Weighted-average lease term (years)

 

9.9

 

15.6

 

8.8

Percent of investment grade tenants (l)

 

13.0%

 

21.0%

 

30.1%

 

 

 

 

 

 

(a)

 

Represents market capitalization plus total pro rata debt. Pro rata debt is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

 

 

(b)

 

Represents total capitalization less cash.

 

 

 

(c)

 

Net debt represents pro rata debt less cash. Pro rata debt is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

 

 

(d)

 

Adjusted EBITDA reflects the annualized six months ended June 30, 2013. Adjusted EBITDA is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

 

 

(e)

 

Gross assets represent total assets, excluding goodwill, before accumulated depreciation.

 

 

 

(f)

 

Computed by dividing Adjusted EBITDA by interest expense.

 

 

 

(g)

 

Adjusted G&A represents general and administrative expenses excluding CPA®:15 Merger-related costs, dealer manager fee-related expenses and stock-based compensation expense. Total Adjusted Real Estate Revenue represents total pro rata real estate revenues for WPC and the Managed REITs, as presented on page 18. Adjusted G&A and Total Adjusted Real Estate Revenue are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

 

 

(h)

 

Represents the annualized dividend per share based on the declared second quarter distribution. The annualized rate is not guaranteed.

 

 

 

(i)

 

Computed by dividing annualized dividend per share by annualized AFFO per share.

 

 

 

(j)

 

Property and tenant count excludes all operating properties.

 

 

 

(k)

 

Total square footage excludes all operating properties.

 

 

 

(l)

 

Investment grade tenants are defined as having a BBB- rating or above. Percentage of portfolio is calculated based on annualized contractual minimum base rent.

 

 

 

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Consolidated Balance Sheets

 

(in thousands) (unaudited)

 

 

 

 

June 30, 2013

 

 

December 31, 2012

 

Assets

 

 

 

 

 

 

 

Investments in real estate:

 

 

 

 

 

 

 

Real estate, at cost

 

$

2,450,868

 

$

2,334,488

 

Operating real estate, at cost

 

 

98,756

 

 

99,703

 

Accumulated depreciation

 

 

(165,009)

 

 

(136,068)

 

Net investments in properties

 

 

2,384,615

 

 

2,298,123

 

Net investments in direct financing leases

 

 

360,701

 

 

376,005

 

Assets held for sale

 

 

21,256

 

 

1,445

 

Equity investments in real estate and the Managed REITs

 

 

559,361

 

 

565,626

 

Net investments in real estate

 

 

3,325,933

 

 

3,241,199

 

Cash

 

 

62,765

 

 

123,904

 

Due from affiliates

 

 

28,670

 

 

36,002

 

Goodwill

 

 

328,011

 

 

329,132

 

In-place lease, net

 

 

465,931

 

 

447,278

 

Above-market rent, net

 

 

269,355

 

 

279,885

 

Other intangible assets, net

 

 

12,256

 

 

10,200

 

Other assets, net

 

 

142,439

 

 

141,442

 

Total Assets

 

  $

4,635,360

 

  $

4,609,042

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Non-recourse debt

 

$

1,686,155

 

$

1,715,397

 

Senior credit facility

 

 

385,000

 

 

253,000

 

Accounts payable, accrued expenses and other liabilities

 

 

272,595

 

 

265,132

 

Income taxes, net

 

 

13,458

 

 

24,959

 

Distributions payable

 

 

58,036

 

 

45,700

 

Total liabilities

 

 

2,415,244

 

 

2,304,188

 

Redeemable noncontrolling interest

 

 

7,082

 

 

7,531

 

Redeemable securities - related party

 

 

-

 

 

40,000

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

W. P. Carey stockholders equity:

 

 

 

 

 

 

 

Common stock

 

 

69

 

 

69

 

Additional paid-in capital

 

 

2,234,450

 

 

2,175,820

 

Distributions in excess of accumulated earnings

 

 

(233,107)

 

 

(172,182)

 

Deferred compensation obligation

 

 

13,411

 

 

8,358

 

Accumulated other comprehensive loss

 

 

(2,984)

 

 

(4,649)

 

Less: treasury stock, at cost

 

 

(60,270)

 

 

(20,270)

 

Total W. P. Carey stockholders’ equity

 

 

1,951,569

 

 

1,987,146

 

Noncontrolling interests

 

 

261,465

 

 

270,177

 

Total equity

 

 

2,213,034

 

 

2,257,323

 

Total Liabilities and Equity

 

  $

4,635,360

 

  $

4,609,042

 

 

 

 

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Consolidated Statements of Income

 

(in thousands, except share and per share amounts) (unaudited)

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2013

 

 

2012

 

 

2013

 

 

2012

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease revenues

 

 

$

75,910

 

 

  $

16,467

 

 

$

150,341

 

 

  $

33,226

Asset management revenue from affiliates

 

 

10,355

 

 

15,636

 

 

20,369

 

 

31,238

Structuring revenue from affiliates

 

 

6,422

 

 

3,622

 

 

12,764

 

 

11,260

Dealer manager fees

 

 

2,320

 

 

4,080

 

 

3,542

 

 

7,867

Reimbursed costs from affiliates

 

 

15,467

 

 

20,484

 

 

27,435

 

 

39,221

Other real estate income

 

 

8,582

 

 

6,810

 

 

17,110

 

 

12,569

 

 

 

119,056

 

 

67,099

 

 

231,561

 

 

135,381

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

30,250

 

 

26,581

 

 

59,223

 

 

53,491

Reimbursable costs

 

 

15,467

 

 

20,484

 

 

27,435

 

 

39,221

Depreciation and amortization

 

 

30,927

 

 

6,424

 

 

61,454

 

 

12,881

Property expenses

 

 

5,531

 

 

3,025

 

 

10,602

 

 

5,055

Other real estate expenses

 

 

2,782

 

 

2,431

 

 

5,515

 

 

4,930

Impairment charges

 

 

-

 

 

-

 

 

1,071

 

 

-

 

 

 

84,957

 

 

58,945

 

 

165,300

 

 

115,578

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

 

316

 

 

155

 

 

686

 

 

658

Net income from equity investments in real estate and the Managed REITs (a)

 

 

32,541

 

 

28,345

 

 

43,197

 

 

42,331

Other income and (expenses)

 

 

1,877

 

 

1,216

 

 

2,969

 

 

1,524

Interest expense

 

 

(26,912)

 

 

(7,128)

 

 

(53,706)

 

 

(14,408)

 

 

 

7,822

 

 

22,588

 

 

(6,854)

 

 

30,105

Income from continuing operations before income taxes

 

 

41,921

 

 

30,742

 

 

59,407

 

 

49,908

Benefit from income taxes

 

 

1,122

 

 

1,882

 

 

2,355

 

 

187

Income from continuing operations

 

 

43,043

 

 

32,624

 

 

61,762

 

 

50,095

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations of discontinued properties

 

 

3,118

 

 

(93)

 

 

3,306

 

 

11

Gain (loss) on sale of real estate

 

 

1,313

 

 

(298)

 

 

382

 

 

(479)

Gain on extinguishment of debt

 

 

13

 

 

-

 

 

84

 

 

-

Impairment charges

 

 

(1,671)

 

 

(1,003)

 

 

(3,879)

 

 

(6,728)

Income (loss) from discontinued operations, net of tax

 

 

2,773

 

 

(1,394)

 

 

(107)

 

 

(7,196)

Net Income

 

 

45,816

 

 

31,230

 

 

61,655

 

 

42,899

Net (income) loss attributable to noncontrolling interests

 

 

(2,692)

 

 

480

 

 

(4,400)

 

 

1,058

Add: Net loss attributable to redeemable noncontrolling interest

 

 

43

 

 

67

 

 

93

 

 

110

Net Income Attributable to W. P. Carey

 

 

$

43,167

 

 

  $

31,777

 

 

$

57,348

 

 

  $

44,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to W. P. Carey

 

 

$

0.59

 

 

  $

0.82

 

 

$

0.83

 

 

  $

1.26

Income (loss) from discontinued operations attributable to W. P. Carey

 

 

0.04

 

 

(0.04)

 

 

-

 

 

(0.18)

Net Income Attributable to W. P. Carey

 

 

$

0.63

 

 

  $

0.78

 

 

$

0.83

 

 

  $

1.08

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to W. P. Carey

 

 

$

0.58

 

 

  $

0.80

 

 

$

0.82

 

 

  $

1.23

Income (loss) from discontinued operations attributable to W. P. Carey

 

 

0.04

 

 

(0.03)

 

 

(0.01)

 

 

(0.17)

Net Income Attributable to W. P. Carey

 

 

$

0.62

 

 

  $

0.77

 

 

$

0.81

 

 

  $

1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

68,406,771

 

 

40,047,220

 

 

68,776,108

 

 

40,218,677

Diluted

 

 

69,493,902

 

 

40,757,055

 

 

69,870,849

 

 

40,828,646

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts Attributable to W. P. Carey

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

 

$

40,419

 

 

  $

33,171

 

 

$

57,506

 

 

  $

51,263

Income (loss) from discontinued operations, net of tax

 

 

2,748

 

 

(1,394)

 

 

(158)

 

 

(7,196)

Net Income Attributable to W. P. Carey

 

 

$

43,167

 

 

  $

31,777

 

 

$

57,348

 

 

  $

44,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions Declared Per Share

 

 

$

0.840

 

 

  $

0.567

 

 

$

1.660

 

 

  $

1.132

 

 

 

 

(a)          Net income from equity investments in real estate and the Managed REITs for the six months ended June 30, 2013, includes net income from our equity investments in real estate of $26.8 million, income from our ownership in the Managed REITs of $1.1 million and income from our special general partnership interests in the Managed REITs of less than $15.3 million.

 

 

 

GRAPHIC

Investing for the long runTM | 8

 

 


 

Reconciliation of Net Income to Funds from Operations – As Adjusted (AFFO)

 

(in thousands, except share and per share amounts) (unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

Real Estate Ownership

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

 

June 30, 2013

 

June 30, 2012

Net income from real estate ownership attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. P. Carey

 

  $

43,107

 

  $

16,692

 

  $

5,507

 

  $

1,927

 

  $

28,367

 

 

  $

59,799

 

  $

37,460

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization of real property

 

30,170

 

29,687

 

28,652

 

5,510

 

5,673

 

 

59,857

 

11,820

Impairment charges

 

1,671

 

3,279

 

10,700

 

5,534

 

1,003

 

 

4,950

 

6,728

(Gain) loss on sale of real estate

 

(981)

 

931

 

4,240

 

(59)

 

(1,686)

 

 

(50)

 

(1,505)

Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO (a)

 

(16,304)

 

3,154

 

3,211

 

888

 

(14,827)

 

 

(13,150)

 

(13,787)

Proportionate share of adjustments for noncontrolling interests to arrive at FFO

 

(4,247)

 

(4,267)

 

(4,236)

 

(400)

 

(434)

 

 

(8,514)

 

(868)

Total adjustments:

 

10,309

 

32,784

 

42,567

 

11,473

 

(10,271)

 

 

43,093

 

2,388

FFO (as defined by NAREIT) - Real Estate Ownership (b)

 

53,416

 

49,476

 

48,074

 

13,400

 

18,096

 

 

102,892

 

39,848

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on change in control of interest (c)

 

-

 

-

 

60

 

(20,794)

 

-

 

 

-

 

-

(Gain) loss on extinguishment of debt

 

(141)

 

74

 

10

 

-

 

-

 

 

(67)

 

-

Other gains, net

 

-

 

(270)

 

(12)

 

-

 

-

 

 

(270)

 

-

Other depreciation, amortization and non-cash charges

 

(515)

 

800

 

(1,556)

 

(130)

 

235

 

 

285

 

24

Stock based compensation

 

911

 

174

 

211

 

-

 

-

 

 

1,085

 

-

Deferred tax expense

 

(21)

 

(1,025)

 

(644)

 

(917)

 

(532)

 

 

(1,046)

 

(1,184)

Acquisition expense

 

2,909

 

-

 

-

 

-

 

-

 

 

2,909

 

-

Realized losses on foreign currency, derivatives, and other

 

102

 

52

 

171

 

115

 

542

 

 

154

 

542

Amortization of deferred financing costs

 

549

 

511

 

468

 

509

 

402

 

 

1,060

 

866

Straight-line and other rent adjustments

 

(2,277)

 

(2,169)

 

(2,248)

 

(200)

 

(883)

 

 

(4,446)

 

(1,998)

Above- and below -market rent intangible lease amortization, net

 

7,237

 

7,256

 

7,534

 

51

 

111

 

 

14,493

 

111

CPA®:15 Merger expenses (d)

 

218

 

111

 

1,049

 

35,570

 

2,616

 

 

329

 

4,719

Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at AFFO

 

279

 

278

 

123

 

(25)

 

(366)

 

 

557

 

(779)

AFFO adjustment for interests in CPA® REITs

 

10,718

 

9,249

 

11,971

 

10,650

 

7,687

 

 

19,967

 

14,613

Proportionate share of adjustments for noncontrolling interests to arrive at AFFO

 

(1,083)

 

(1,561)

 

(506)

 

(141)

 

(25)

 

 

(2,644)

 

(45)

Total adjustments:

 

18,886

 

13,480

 

16,631

 

24,688

 

9,787

 

 

32,366

 

16,869

AFFO - Real Estate Ownership (b)

 

  $

72,302

 

  $

62,956

 

  $

64,705

 

  $

38,088

 

  $

27,883

 

 

  $

135,258

 

  $

56,717

Investment Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) from investment management attributable to
W. P. Carey

 

  $

60

 

  $

(2,511)

 

  $

9,971

 

  $

661

 

  $

3,410

 

 

  $

(2,451)

 

  $

6,607

FFO (as defined by NAREIT) - Investment Management (b)

 

60

 

(2,511)

 

9,971

 

661

 

3,410

 

 

(2,451)

 

6,607

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other depreciation, amortization and non-cash charges

 

253

 

262

 

226

 

247

 

229

 

 

515

 

488

Stock based compensation

 

7,518

 

8,975

 

6,281

 

9,805

 

4,495

 

 

16,493

 

9,755

Deferred tax expense

 

(7,815)

 

2,253

 

(2,625)

 

(15,207)

 

(8,459)

 

 

(5,562)

 

(6,223)

Realized losses (gains) on foreign currency, derivatives, and other

 

2

 

2

 

(55)

 

17

 

(23)

 

 

4

 

(23)

Amortization of deferred financing costs

 

318

 

318

 

318

 

308

 

286

 

 

636

 

571

Total adjustments:

 

276

 

11,810

 

4,145

 

(4,830)

 

(3,472)

 

 

12,086

 

4,568

AFFO - Investment Management (b)

 

  $

336

 

  $

9,299

 

  $

14,116

 

  $

(4,169)

 

  $

(62)

 

 

  $

9,635

 

  $

11,175

Total Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO (as defined by NAREIT) (b)

 

  $

53,476

 

  $

46,965

 

  $

58,045

 

  $

14,061

 

  $

21,506

 

 

  $

100,441

 

  $

46,455

FFO (as defined by NAREIT) per diluted share (b)

 

  $

0.77

 

  $

0.67

 

  $

0.84

 

  $

0.34

 

  $

0.53

 

 

  $

1.44

 

  $

1.14

AFFO (b)

 

  $

72,638

 

  $

72,255

 

  $

78,821

 

  $

33,919

 

  $

27,821

 

 

  $

144,893

 

  $

67,892

AFFO per diluted share (b)

 

  $

1.05

 

  $

1.03

 

  $

1.13

 

  $

0.82

 

  $

0.68

 

 

  $

2.07

 

  $

1.66

Diluted weighted average shares outstanding

 

69,493,902

 

69,975,293

 

69,505,871

 

41,127,404

 

40,757,055

 

 

69,870,849

 

40,828,646

 

 

 

GRAPHIC

Investing for the long runTM | 9

 

 


 

Reconciliation of Net Income to Funds from Operations - As Adjusted (AFFO) - Notes

(Continued)

 

 

 

 

(a)     Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO for the three months ended June 30, 2013 includes a $19.5 million gain on sale of our equity investments in U.S. Airways. During the three months ended June 30, 2012 we had a $15.1 million gain on sale of our equity investments in Médica.

(b)     FFO and AFFO are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

(c)     Gain on change in control of interests for the three months ended September 30, 2012 represents a gain of $14.6 million recognized on our previously-held interest in shares of CPA®:15 common stock, and a gain of $6.1 million recognized on the purchase of the remaining interests in five investments from CPA®:15, which we had previously accounted for under the equity method.  We recognized a gain of $20.7 million to adjust the carrying value of our existing interests in these investments to their estimated fair values in connection with the CPA®:15 Merger.

(d)     For the three months ended September 30, 2012, includes current tax expense of $9.7 million relating to the conversion of CPA®:15 shares held by us before the CPA®:15 Merger.

 

 

 

GRAPHIC

Investing for the long runTM | 10

 

 


 

Reconciliation of Consolidated Statement of Income to AFFO – Current Quarter

 

(in thousands) (unaudited)

 

 

 

Three Months Ended June 30, 2013

 

 

GAAP - Basis (a)

 

Add: Equity
Investments
 (b)

 

Less: Noncontrolling
Interests
 (c)

 

WPC’s
Pro Rata Share
 (d)

 

AFFO
Adjustments

 

AFFO

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Total lease revenues (e)

 

  $

75,910

 

  $

9,294

 

  $

(9,720)

 

  $

75,484

 

  $

4,215

  (f)

  $

79,699

Asset management revenue from affiliates

 

10,355

 

-

 

(152)

 

10,203

 

-

 

10,203

Structuring revenue from affiliates

 

6,422

 

-

 

-

 

6,422

 

-

 

6,422

Dealer manager fees

 

2,320

 

-

 

-

 

2,320

 

-

 

2,320

Reimbursed costs from affiliates

 

15,467

 

-

 

(3)

 

15,464

 

-

 

15,464

Other real estate income:

 

 

 

 

 

 

 

 

 

 

 

 

Self-storage revenues

 

3,553

 

-

 

(2,127)

 

1,426

 

-

 

1,426

Hotel revenues

 

1,170

 

-

 

-

 

1,170

 

-

 

1,170

Pass-through income

 

3,555

 

195

 

(418)

 

3,332

 

-

 

3,332

Other property and tenant income

 

304

 

84

 

-

 

388

 

-

 

388

Total other real estate income

 

8,582

 

279

 

(2,545)

 

6,316

 

-

 

6,316

Total Revenues

 

119,056

 

9,573

 

(12,420)

 

116,209

 

4,215

 

120,424

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

30,250

 

32

 

(229)

 

30,053

 

(11,528)

 

18,525

Reimbursable costs

 

15,467

 

-

 

-

 

15,467

 

-

 

15,467

Depreciation and amortization

 

30,927

 

3,095

 

(4,253)

 

29,769

 

(29,127)

 

642

Property expenses

 

5,531

 

43

 

(608)

 

4,966

 

-

 

4,966

Other real estate expenses

 

2,782

 

-

 

(1,026)

 

1,756

 

-

 

1,756

Impairment charges

 

-

 

-

 

-

 

-

 

-

 

-

Total Operating Expenses

 

84,957

 

3,170

 

(6,116)

 

82,011

 

(40,655)

 

41,356

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

316

 

198

 

(30)

 

484

 

-

 

484

Net income from equity investments in real estate and the Managed REITs:

 

 

 

 

 

 

 

 

 

 

 

 

Joint ventures (g)

 

23,523

 

(23,523)

 

-

 

-

 

-

 

-

Income related to our ownership in the Managed REITs

 

1,062

 

-

 

-

 

1,062

 

9,997

 

11,059

Income related to our general partnership interests

 

7,956

 

-

 

-

 

7,956

 

721

 

8,677

Total net income from equity investments in real estate and the Managed REITs

 

32,541

 

(23,523)

 

-

 

9,018

 

10,718

 

19,736

Other income and (expenses)

 

1,877

 

20,732

 

(1,458)

 

21,151

 

(20,649)

 

502

Interest expense

 

(26,912)

 

(3,255)

 

4,790

 

(25,377)

 

1,788

 

(23,589)

Total Other Income and Expenses

 

7,822

 

(5,848)

 

3,302

 

5,276

 

(8,143)

 

(2,867)

Income from Continuing Operations before Income Taxes

 

41,921

 

555

 

(3,002)

 

39,474

 

36,727

 

76,201

Benefit from(provision for) income taxes

 

1,122

 

(555)

 

353

 

920

 

(7,831)

 

(6,911)

Income from Continuing Operations

 

43,043

 

-

 

(2,649)

 

40,394

 

28,896

 

69,290

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations of discontinued properties

 

3,118

 

-

 

-

 

3,118

 

230

  (h)

3,348

Gain on the sale of real estate

 

1,313

 

-

 

-

 

1,313

 

(1,313)

 

-

Gain on extinguishment of debt

 

13

 

-

 

-

 

13

 

(13)

 

-

Impairment charges

 

(1,671)

 

-

 

-

 

(1,671)

 

1,671

 

-

Loss from Discontinued Operations, Net of Taxes

 

2,773

 

-

 

-

 

2,773

 

575

 

3,348

Net Income

 

45,816

 

-

 

(2,649)

 

43,167

 

29,471

 

72,638

Net (income) attributable to noncontrolling interests

 

(2,692)

 

-

 

2,692

 

-

 

-

 

-

Net loss attributable to redeemable noncontrolling interests

 

43

 

-

 

(43)

 

-

 

-

 

-

Income / AFFO Attributable to W. P. Carey

 

  $

43,167

 

  $

-

 

  $

-

 

  $

43,167

 

  $

29,471

 

  $

72,638

 

 

 

GRAPHIC

Investing for the long runTM | 11

 

 

 


 

Reconciliation of Consolidated Statement of Income to AFFO – Current Quarter

(Continued)

(in thousands) (unaudited)

 

 

The following table presents the components of our General and Administrative Expenses:

 

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

GAAP - Basis (a)

 

Add: Equity
Investments (b)

 

Less: Noncontrolling
Interests (c)

 

WPC's
Pro Rata Share (d)

 

AFFO
Adjustments

 

AFFO

General and Administrative

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 $

21,993

 

 $

-

 

 $

(154)

 

 $

21,839

 

 $

(8,401)

  (i)

 $

13,438

Business development expenses

 

4,771

 

6

 

(1)

 

4,776

 

(3,127)

  (j)

1,649

Organization and offering expenses

 

3,163

 

-

 

-

 

3,163

 

-

 

3,163

General and administrative professional fees

 

2,106

 

26

 

(56)

 

2,076

 

-

 

2,076

Reimbursable expenses

 

(4,375)

 

-

 

-

 

(4,375)

 

-

 

(4,375)

Office expenses

 

2,176

 

-

 

(18)

 

2,158

 

-

 

2,158

Other general and administrative

 

416

 

-

 

-

 

416

 

-

 

416

Total General and Administrative

 

 $

30,250

 

 $

32

 

 $

(229)

 

 $

30,053

 

 $

(11,528)

 

 $

18,525

 

The following table presents the components of Other Income and (Expenses):

 

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

GAAP - Basis (a)

 

Add: Equity
Investments (b)

 

Less: Noncontrolling
Interests (c)

 

WPC's
Pro Rata Share (d)

 

AFFO
Adjustments

 

AFFO

Other Income and (Expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of real estate

 

 $

(332)

 

 $

19,461

 

 $

-

 

 $

19,129

 

 $

(19,129)

 

 $

-

Gain (loss) on foreign currency

 

365

 

-

 

(255)

 

110

 

(110)

 

-

Gain (loss) on derivatives

 

1,691

 

-

 

(436)

 

1,255

 

(1,255)

 

-

Gain (loss) on extinguishment of debt

 

128

 

-

 

-

 

128

 

(128)

 

-

Other gain (loss) (k)

 

25

 

1,271

 

(767)

 

529

 

(27)

 

502

Total Other Income and (Expenses)

 

 $

1,877

 

 $

20,732

 

 $

(1,458)

 

 $

21,151

 

 $

(20,649)

 

 $

502

 

 

 

 

 

 

 

(a)          Consolidated amounts shown represent WPC’s Consolidated Statement of Income for the three months ended June 30, 2013.

(b)          Represents the break-out by line item of amounts recorded in net income from equity investments in real estate and the Managed REITs – Joint ventures.

(c)         Represents the break-out by line item of amounts recorded in noncontrolling interest and redeemable noncontrolling interest.

(d)         Represents our share in fully-owned entities and co-owned entities. Pro rata basis amounts are non-GAAP measures. See the Terms and Conditions section that begins on page 42 for a description of our non-GAAP measures.

(e)          Lease revenues on a pro rata basis in this schedule reflect only revenues from continuing operations. Lease revenues from discontinued operations for the three months ended June 30, 2013 were $0.8 million.

(f)             Represents adjustments for straight line and above/below market lease intangible amortization.

(g)         To calculate the pro rata amounts, equity investments under joint ventures have been reclassified to allocate their impact on each line item.

(h)         Represents depreciation and amortization related to discontinued operations.

(i)             Represents add-back of stock-based compensation expense, less the pro rata share attributable to noncontrolling interests.

(j)             Represents WPC acquisition expenses and CPA®:15 Merger expenses included in general and administrative expense.

(k)          Represents income in equity investments and noncontrolling interests that could not be broken-out by line item.

 

 

 

GRAPHIC

Investing for the long runTM | 12

 

 


 

Reconciliation of Consolidated Statement of Income to AFFO – Year-to-Date

 

(in thousands) (unaudited)

 

 

 

Six Months Ended June 30, 2013

 

 

GAAP - Basis (a)

 

Add: Equity
Investments 
(b)

 

Less: Noncontrolling
Interests 
(c)

 

WPC’s
Pro Rata Share 
(d)

 

AFFO
Adjustments

 

AFFO

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Total lease revenues (e)

 

$

150,341

 

$

19,728

 

$

(20,449)

 

$

149,620

 

$

8,572

 (f)

$

158,192

Asset management revenue from affiliates

 

20,369

 

-

 

(303)

 

20,066

 

-

 

20,066

Structuring revenue from affiliates

 

12,764

 

-

 

-

 

12,764

 

-

 

12,764

Dealer manager fees

 

3,542

 

-

 

-

 

3,542

 

-

 

3,542

Reimbursed costs from affiliates

 

27,435

 

-

 

(107)

 

27,328

 

-

 

27,328

Other real estate income:

 

 

 

 

 

 

 

 

 

 

 

 

Self-storage revenues

 

6,942

 

-

 

(4,152)

 

2,790

 

-

 

2,790

Hotel revenues

 

2,070

 

-

 

-

 

2,070

 

-

 

2,070

Pass-through income

 

7,385

 

388

 

(896)

 

6,877

 

-

 

6,877

Other property and tenant income

 

713

 

112

 

(11)

 

814

 

-

 

814

Total other real estate income

 

17,110

 

500

 

(5,059)

 

12,551

 

-

 

12,551

Total Revenues

 

231,561

 

20,228

 

(25,918)

 

225,871

 

8,572

 

234,443

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

59,223

 

46

 

(1,194)

 

58,075

 

(20,752)

 

37,323

Reimbursable costs

 

27,435

 

-

 

2

 

27,437

 

-

 

27,437

Depreciation and amortization

 

61,454

 

6,294

 

(8,526)

 

59,222

 

(57,590)

 

1,632

Property expenses

 

10,602

 

505

 

(1,387)

 

9,720

 

-

 

9,720

Other real estate expenses

 

5,515

 

-

 

(2,033)

 

3,482

 

-

 

3,482

Impairment charges

 

1,071

 

-

 

-

 

1,071

 

(1,071)

 

-

Total Operating Expenses

 

165,300

 

6,845

 

(13,138)

 

159,007

 

(79,413)

 

79,594

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Other interest income

 

686

 

394

 

(69)

 

1,011

 

-

 

1,011

Net income from equity investments in real estate and the Managed REITs:

 

 

 

 

 

 

 

 

 

 

 

 

Joint ventures (g)

 

26,827

 

(26,827)

 

-

 

-

 

-

 

-

Income related to our ownership in the Managed REITs

 

1,084

 

-

 

-

 

1,084

 

18,685

 

19,769

Income related to our general partnership interests

 

15,286

 

-

 

-

 

15,286

 

1,282

 

16,568

Total net income from equity investments in real estate and the Managed REITs

 

43,197

 

(26,827)

 

-

 

16,370

 

19,967

 

36,337

Other income and (expenses)

 

2,969

 

20,576

 

(1,621)

 

21,924

 

(21,536)

 

388

Interest expense

 

(53,706)

 

(6,489)

 

9,565

 

(50,630)

 

3,693

 

(46,937)

Total Other Income and Expenses

 

(6,854)

 

(12,346)

 

7,875

 

(11,325)

 

2,124

 

(9,201)

Income from Continuing Operations before Income Taxes

 

59,407

 

1,037

 

(4,905)

 

55,539

 

90,109

 

145,648

Benefit from (provision for) income taxes

 

2,355

 

(1,037)

 

598

 

1,916

 

(6,597)

 

(4,681)

Income from Continuing Operations

 

61,762

 

-

 

(4,307)

 

57,455

 

83,512

 

140,967

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations of discontinued properties

 

3,306

 

-

 

-

 

3,306

 

620

 (h)

3,926

Gain on the sale of real estate

 

382

 

-

 

-

 

382

 

(382)

 

-

Gain on extinguishment of debt

 

84

 

-

 

-

 

84

 

(84)

 

-

Impairment charges

 

(3,879)

 

-

 

-

 

(3,879)

 

3,879

 

-

(Loss) income from Discontinued Operations, Net of Taxes

 

(107)

 

-

 

-

 

(107)

 

4,033

 

3,926

Net Income

 

61,655

 

-

 

(4,307)

 

57,348

 

87,545

 

144,893

Net income attributable to noncontrolling interests

 

(4,400)

 

-

 

4,400

 

-

 

-

 

-

Net loss attributable to redeemable noncontrolling interests

 

93

 

-

 

(93)

 

-

 

-

 

-

Income / AFFO Attributable to W. P. Carey

 

$

57,348

 

$

-

 

$

-

 

$

57,348

 

$

87,545

 

$

144,893

 

GRAPHIC

Investing for the long runTM | 13

 


 

Reconciliation of Consolidated Statement of Income to AFFO – Year-to-Date

(Continued)

(in thousands) (unaudited)

 

 

The following table presents the components of our General and Administrative Expenses:

 

Six Months Ended June 30, 2013

 

 

GAAP - Basis (a)

 

Add: Equity
Investments 
(b)

 

Less: Noncontrolling
Interests 
(c)

 

WPC’s
Pro Rata Share 
(d)

 

AFFO
Adjustments

 

AFFO

General and Administrative

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

  $

47,968

 

$

-

 

$

(281)

 

$

47,687

 

$

(17,514)

  (i)

  $

30,173

Business development expenses

 

6,526

 

6

 

(25)

 

6,507

 

(3,238)

  (j)

3,269

Organization and offering expenses

 

5,126

 

-

 

-

 

5,126

 

-

 

5,126

General and administrative professional fees

 

5,232

 

40

 

(154)

 

5,118

 

-

 

5,118

Reimbursable expenses

 

(10,480)

 

-

 

-

 

(10,480)

 

-

 

(10,480)

Office expenses

 

4,018

 

-

 

(732)

 

3,286

 

-

 

3,286

Other general and administrative

 

833

 

-

 

(2)

 

831

 

-

 

831

Total General and Administrative

 

  $

59,223

 

$

46

 

$

(1,194)

 

$

58,075

 

$

(20,752)

 

  $

37,323

 

The following table presents the components of Other Income and (Expenses):

 

Six Months Ended June 30, 2013

 

 

GAAP - Basis (a)

 

Add: Equity
Investments 
(b)

 

Less: Noncontrolling
Interests 
(c)

 

WPC’s
Pro Rata Share 
(d)

 

AFFO
Adjustments

 

AFFO

Other Income and (Expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of real estate

 

  $

(332)

 

$

19,461

 

$

-

 

$

19,129

 

$

(19,129)

 

  $

-

Gain (loss) on foreign currency

 

(731)

 

-

 

(2)

 

(733)

 

733

 

-

Gain (loss) on derivatives

 

3,713

 

-

 

(860)

 

2,853

 

(2,853)

 

-

Gain (loss) on extinguishment of debt

 

(17)

 

-

 

(2)

 

(19)

 

19

 

-

Other gain (loss) (k)

 

336

 

1,115

 

(757)

 

694

 

(306)

 

388

Total Other Income and (Expenses)

 

  $

2,969

 

$

20,576

 

$

(1,621)

 

$

21,924

 

$

(21,536)

 

  $

388

 

 

 

 

 

(a)

Consolidated amounts shown represent WPC’s Consolidated Statement of Income for the six months ended June 30, 2013.

(b)

Represents the break-out by line item of amounts recorded in net income from equity investments in real estate and the Managed REITs – Joint ventures.

(c)

Represents the break-out by line item of amounts recorded in noncontrolling interest and redeemable noncontrolling interest.

(d)

Represents our share in fully-owned entities and co-owned entities. Pro rata basis amounts are non-GAAP measures. See the Terms and Conditions section that begins on page 42 for a description of our non-GAAP measures.

(e)

Lease revenues on a pro rata basis in this schedule reflect only revenues from continuing operations. Lease revenues from discontinued operations for the six months ended June 30, 2013 were $1.8 million.

(f)

Represents adjustments for straight line and above/below market lease intangible amortization.

(g)

To calculate the pro rata amounts, equity investments under joint ventures have been reclassified to allocate their impact on each line item.

(h)

Represents depreciation and amortization related to discontinued operations.

(i)

Represents add-back of stock-based compensation expense, less the pro rata share attributable to noncontrolling interests.

(j)

Represents WPC acquisition expenses and CPA®:15 Merger expenses included in general and administrative expense.

(k)

Represents income in equity investments and noncontrolling interests that could not be broken-out by line item.

 

 

 

GRAPHIC

Investing for the long runTM | 14

 


 

Reconciliation of GAAP Net Income to Adjusted EBITDA

 

(in thousands, except share and per share amounts) (unaudited)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

 

June 30, 2013

 

June 30, 2012

Net Income Attributable to W. P. Carey

 

 $

43,167

 

 $

14,181

 

 $

15,478

 

 $

2,588

 

 $

31,777

 

 

 $

57,348

 

 $

44,067

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

31,157

 

30,983

 

30,108

 

6,761

 

6,833

 

 

62,140

 

14,136

Interest expense

 

27,023

 

26,979

 

28,250

 

7,869

 

7,245

 

 

54,002

 

14,590

(Benefit from) provision for income taxes

 

(1,122)

 

(1,233)

 

6,591

 

379

 

(1,881)

 

 

(2,355)

 

(180)

EBITDA (a)

 

100,225

 

70,910

 

80,427

 

17,597

 

43,974

 

 

171,135

 

72,613

Proportionate share of adjustments from equity method investments (b)

 

16,060

 

17,011

 

14,831

 

9,103

 

19,394

 

 

33,071

 

34,496

Proportionate share of adjustments for noncontrolling interests (b)

 

(9,391)

 

(9,290)

 

(9,313)

 

928

 

(324)

 

 

(18,681)

 

(1,359)

 

 

106,894

 

78,631

 

85,945

 

27,628

 

63,044

 

 

185,525

 

105,750

Management Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges

 

1,671

 

3,279

 

10,700

 

5,535

 

1,003

 

 

4,950

 

6,726

(Gain) loss on sale of real estate

 

(981)

 

931

 

1,081

 

(59)

 

(1,686)

 

 

(50)

 

(1,505)

(Gain) loss on extinguishment of debt

 

(141)

 

74

 

10

 

-

 

-

 

 

(67)

 

-

Stock based compensation

 

8,429

 

9,149

 

6,492

 

9,805

 

4,495

 

 

17,578

 

9,755

CPA®:15 Merger expenses

 

218

 

111

 

1,049

 

25,895

 

2,617

 

 

329

 

4,719

Losses (gains) on investment due to CPA®:15 Merger

 

-

 

-

 

49

 

(20,794)

 

-

 

 

-

 

-

Realized and unrealized (gain) loss on foreign currency (net)

 

(365)

 

1,097

 

(1,106)

 

(46)

 

853

 

 

732

 

573

Realized and unrealized (gain) loss on derivatives (net)

 

(1,691)

 

(2,022)

 

(370)

 

49

 

(30)

 

 

(3,713)

 

(30)

Proportionate share of adjustments from equity method investments (c)

 

(14,611)

 

4,010

 

5,941

 

7,632

 

(17,513)

 

 

(10,601)

 

(16,570)

Proportionate share of adjustments for noncontrolling interests (c)

 

394

 

402

 

71

 

(176)

 

97

 

 

796

 

-

Total adjustments

 

(7,077)

 

17,031

 

23,917

 

27,841

 

(10,164)

 

 

9,954

 

3,668

Adjusted EBITDA (a)

 

 $

99,817

 

 $

95,662

 

$

109,862

 

 $

55,469

 

 $

52,880

 

 

 $

195,479

 

 $

109,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA per diluted share (a)

 

 $

1.44

 

 $

1.01

 

 $

1.16

 

 $

0.43

 

 $

1.08

 

 

 $

2.45

 

 $

1.78

Adjusted EBITDA per diluted share (a)

 

 $

1.44

 

 $

1.37

 

 $

1.58

 

 $

1.35

 

 $

1.30

 

 

 $

2.80

 

 $

2.68

Diluted weighted average shares outstanding

 

69,493,902

 

69,975,293

 

69,505,871

 

41,127,404

 

40,757,055

 

 

69,870,849

 

40,828,646

 

 

 

 

(a)          EBITDA and Adjusted EBITDA are non-GAAP measures. See the Terms and Definition section that begins on page 42 for a description of our non-GAAP measures.

 

(b)          Incorporates the pro rata share of depreciation, interest expense and tax provision adjustments for unconsolidated subsidiaries and joint ventures.

 

(c)          Incorporates the pro rata share of impairments, loss on the sale of real estate, stock-based compensation, CPA®:15 Merger-related adjustments as well as the losses (gains) related to foreign exchange and derivative positions for unconsolidated subsidiaries and joint ventures.

 

GRAPHIC

Investing for the long runTM | 15

 

 


 

Adjusted Revenue Analysis (Pro Rata-Basis)

 

(in thousands) (unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Revenue

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

 

June 30, 2013

 

June 30, 2012

Real Estate Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease revenue – as reported

 

 $ 

75,910

 

 $ 

74,431

 

 $ 

73,897

 

 $ 

16,141

 

 $ 

16,467

 

 

 $ 

150,341

 

 $ 

33,226

Lease revenue – discontinued operations

 

812

 

1,029

 

1,811

 

632

 

806

 

 

1,841

 

2,425

Total consolidated lease revenue

 

76,722

 

75,460

 

75,708

 

16,773

 

17,273

 

 

152,182

 

35,651

Add: Pro rata share of revenue from equity investments

 

9,751

 

9,976

 

9,910

 

5,313

 

5,738

 

 

19,727

 

12,150

Less: Pro rata share of revenue due to noncontrolling interests

 

(10,273)

 

(10,176)

 

(10,289)

 

(411)

 

(422)

 

 

(20,449)

 

(850)

Total pro rata net lease revenue

 

76,200

 

75,260

 

75,329

 

21,675

 

22,589

 

 

151,460

 

46,951

Add: Share of pro rata lease revenue – CPA® REITs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:15 (a)

 

-

 

-

 

-

 

4,234

 

4,206

 

 

-

 

8,492

CPA®:16 – Global

 

14,109

 

14,062

 

13,954

 

13,817

 

14,325

 

 

28,171

 

28,590

CPA®:17 – Global

 

1,190

 

1,058

 

883

 

809

 

732

 

 

2,248

 

1,378

Total share of pro rata lease revenue - CPA® REITs

 

15,299

 

15,120

 

14,837

 

18,860

 

19,263

 

 

30,419

 

38,460

Add: share of lease revenue from special general partnership interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:16 – Global operating partnership

 

3,830

 

3,614

 

3,825

 

3,685

 

3,598

 

 

7,444

 

7,879

CPA®:17 – Global operating partnership

 

4,847

 

4,277

 

4,395

 

3,667

 

3,865

 

 

9,124

 

6,558

Total share of lease revenue from special general partnership interest

 

8,677

 

7,891

 

8,220

 

7,352

 

7,463

 

 

16,568

 

14,437

Add: Other real estate income - as reported (b)

 

8,582

 

8,528

 

7,532

 

6,146

 

6,810

 

 

17,110

 

12,569

Less: Pro rata share of other real estate income to noncontrolling interests

 

(2,127)

 

(2,025)

 

(1,972)

 

(2,050)

 

(1,877)

 

 

(4,152)

 

(3,707)

Total Real Estate Revenue

 

106,631

 

104,774

 

103,946

 

51,983

 

54,248

 

 

211,405

 

108,710

Investment Management Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:15

 

-

 

-

 

-

 

6,126

 

6,144

 

 

-

 

12,419

CPA®:16 – Global

 

4,465

 

4,498

 

4,624

 

4,631

 

4,597

 

 

8,963

 

9,298

CPA®:17 – Global

 

5,311

 

5,111

 

4,696

 

4,906

 

4,765

 

 

10,422

 

9,318

CWI & Other

 

579

 

405

 

258

 

187

 

129

 

 

984

 

202

Asset management revenue - as reported

 

10,355

 

10,014

 

9,578

 

15,850

 

15,635

 

 

20,369

 

31,237

Structuring revenue - as reported (c)

 

6,422

 

6,342

 

28,779

 

8,316

 

3,622

 

 

12,764

 

11,260

Total Investment Management Revenue

 

16,777

 

16,356

 

38,357

 

24,166

 

19,257

 

 

33,133

 

42,497

Total Adjusted Revenue (d)

 

 $ 

123,408

 

 $ 

121,130

 

 $ 

142,303

 

 $ 

76,149

 

 $ 

73,505

 

 

 $ 

244,538

 

 $ 

151,207

 

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Investing for the long runTM | 16

 

 


 

Adjusted Revenue Analysis (Pro Rata-Basis) - Notes

(Continued)

 

 

 

 

 

(a)          Represents pro rata lease revenue from CPA®:15 through September 28, 2012, the date of the CPA®:15 Merger.

 

(b)          Other real estate income generally consists of revenue from Carey Storage Management LLC (“Carey Storage”), a subsidiary that invests in domestic self-storage properties, and Livho, Inc., a subsidiary that operates a hotel franchise. Other real estate income also includes lease termination payments and other non-rents related revenues from real estate ownership, and as a result, we expect Other real estate income to fluctuate period to period.

 

(c)          We earn structuring revenue on acquisitions structured on behalf of the Managed REITS and expect significant period-to-period variation in such revenue based on changes in investment volume. Investments structured on behalf of the Managed REITS totaled approximately $305 million, $193 million, $736 million, $202 million, and $96 million for the three months ended June 30, 2013, March 31, 2013, December 31, 2012, September 30, 2012, and June 30, 2012, respectively. For the six months ended June 30, 2013 and 2012, investments structured on behalf of the Managed REITs totaled approximately $498 million and $270 million, respectively.

 

(d)         Total adjusted revenue excludes reimbursements of costs received from the Managed REITs as they have no impact on net income. Also excluded are dealer manager fees earned in connection with the public offerings of CPA®:17 – Global’s (which terminated on January 31, 2013) and CWI, which are substantially offset by underwriting costs incurred in connection with the offerings. Adjusted revenue is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

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Investing for the long runTM | 17

 

 


 

Total Adjusted Real Estate Revenue – W. P. Carey Group

 

(in thousands) (unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

 

June 30, 2013

 

June 30, 2012

W. P. Carey Pro Rata Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W. P. Carey pro rata lease revenue

 

$

76,200

 

$

75,260

 

$

75,329

 

$

21,675

 

$

22,589

 

 

$

151,460

 

$

46,952

W. P. Carey other real estate income (a)

 

6,455

 

6,503

 

5,560

 

4,096

 

4,933

 

 

12,958

 

8,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA® REITs Pro Rata Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:15 pro rata lease revenue (b)

 

-

 

-

 

-

 

53,592

 

53,238

 

 

-

 

107,561

CPA®:15 other income (b)

 

-

 

-

 

-

 

2,120

 

1,361

 

 

-

 

8,133

CPA®:16 – Global pro rata lease revenue

 

76,058

 

76,176

 

76,129

 

75,707

 

78,797

 

 

152,234

 

157,913

CPA®:16 – Global other income

 

18,733

 

9,817

 

9,947

 

10,055

 

9,917

 

 

28,550

 

20,934

CPA®:17 – Global pro rata lease revenue

 

74,836

 

73,974

 

68,446

 

62,259

 

61,027

 

 

148,810

 

119,718

CPA®:17 – Global other income

 

20,468

 

19,062

 

26,681

 

11,869

 

12,650

 

 

39,530

 

24,713

CWI hotel revenue

 

20,834

 

11,296

 

6,256

 

5,868

 

846

 

 

32,130

 

846

CWI other income

 

350

 

132

 

266

 

928

 

-

 

 

482

 

417

Total Adjusted Real Estate Revenue (c)

 

$

293,934

 

$

272,220

 

$

268,614

 

$

248,169

 

$

245,358

 

 

$

566,154

 

$

496,049

 

 

 

 

(a)          Other real estate income generally consists of revenue from Carey Storage, a subsidiary that invests in domestic self-storage properties, and Livho, Inc., a subsidiary that operates a hotel franchise. Other real estate income also includes lease termination payments and other non-rent related revenues from real estate ownership, and as a result, we expect Other real estate income to fluctuate period to period.

 

(b)          For the three months ended September 30, 2012 represents pro rata lease revenue from CPA®:15 through September 28, 2012, the date of the CPA®:15 Merger.

 

(c)         Total Adjusted Real Estate Revenue is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM |18

 

 

 


 

Adjusted G&A

 

(in thousands, except percentages) (unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

June 30, 2012

 

 

June 30, 2013

 

June 30, 2012

General and administrative, as reported

 

 $

30,250

 

 $

28,973

 

 $

36,490

 

 $

54,828

 

 $

26,581

 

 

 $

59,223

 

 $

53,491

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:15 Merger-related expenses (a)

 

(218)

 

(111)

 

(1,049)

 

(25,895)

 

(2,617)

 

 

(329)

 

(4,719)

Dealer manager fee-related expenses (b)

 

(3,163)

 

(1,963)

 

(6,913)

 

(4,046)

 

(4,015)

 

 

(5,126)

 

(6,828)

Stock based compensation expense (c)

 

(8,429)

 

(9,149)

 

(6,492)

 

(9,805)

 

(4,495)

 

 

(17,578)

 

(9,755)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reimbursable expenses (d)

 

3,342

 

6,086

 

4,533

 

3,920

 

3,978

 

 

9,428

 

7,856

Adjusted G&A (e)

 

 $

21,782

 

 $

23,836

 

 $

26,569

 

 $

19,002

 

 $

19,432

 

 

 $

45,618

 

 $

40,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjusted Real Estate Revenue

 

 $

293,934

 

 $

272,220

 

 $

268,614

 

 $

248,169

 

 $

245,358

 

 

 $

566,154

 

 $

496,061

As a % of Total Adjusted Real Estate Revenue

 

7.4%

 

8.8%

 

9.9%

 

7.7%

 

7.9%

 

 

8.1%

 

8.1%

 

 

 

 

(a)          Represents expenses incurred in connection with the CPA®:15 Merger, which are excluded because they are considered to be non-core in nature.

 

(b)          Represents a reimbursement of dealer manager fee-related expenses, which substantially offsets Dealer manager fees. Dealer manager fees are not included in the calculation of Total Adjusted Real Estate Revenue; therefore, the offsetting expense is excluded from the calculation of Adjusted G&A expense.

 

(c)          Represents a non-cash expense, this is reflected in the diluted share count.

 

(d)         Effective January 1, 2013, we have included reimbursable expenses in the Adjusted G&A presentation. Results for the prior quarter periods have been adjusted to conform to the current period.

 

(e)          Adjusted G&A and Total Adjusted Real Estate Revenue are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM |19

 

 

 


 

Business Segment and Financial Information (Pro Rata-Basis)

 

(in thousands, except share, per share amounts, and percentages) (unaudited)

 

REAL ESTATE OWNERSHIP

 

Three Months Ended
June 30, 2013

 

Annualized

 

Pro Rata NOI (Includes JVs) (a) (b)

 

 

 

 

 

 

Pro Rata NOI

 

  $

78,306

 

  $

313,224

 

Special General Partnership Interest in Cash Flow (Managed REITs)

 

Six Months Ended
June 30, 2013

 

Annualized

 

CPA®:16 – Global operating partnership

 

  $

7,444

 

  $

14,888

 

CPA®:17 – Global operating partnership

 

9,124

 

18,248

 

Total

 

  $

16,568

 

  $

33,136

 

 

Other Real Estate Income

 

Revenues

 

Expenses

 

Three Months Ended
June 30, 2013

 

Annualized

 

Storage and hotel income

 

  $

2,596

 

  $

1,756

 

  $

840

 

  $

3,360

 

 

Managed REITs - Shares Owned(c)

 

Current
Annualized
Distribution

 

Distributions
Received by WPC
for the Six
Months Ended
June 30, 2013

 

Most Recent NAV / Offering
Price per Share 
(d)

 

Shares Owned

 

Total Value

 

CPA®:16 – Global (18.6% ownership)

 

6.7

%

  $

12,524

 

  $

8.70

 

38,060,964

 

  $

331,130

 

CPA®:17 – Global (1.6% ownership)

 

6.5

%

1,253

 

  $

10.00

 

4,947,932

 

49,479

 

CWI (0.4% ownership)

 

6.0

%

6

 

  $

10.00

 

153,303

 

1,533

 

Total

 

 

 

  $

13,783

 

 

 

43,162,199

 

  $

382,143

 

 

INVESTMENT MANAGEMENT (e)

 

Trailing Twelve Months Ended
June 30, 2013

 

Three Months Ended
June 30, 2013

 

Annualized

 

Asset management revenue

 

  $

45,797

 

  $

10,355

 

  $

41,420

 

Structuring revenue

 

49,858

 

6,422

 

25,688

 

Dealer manager fees

 

15,590

 

2,320

 

9,280

 

Total

 

  $

111,245

 

  $

19,097

 

  $

76,388

 

 

CONSOLIDATED BALANCE SHEET INFORMATION

 

 

 

 

 

 

 

Assets

 

 

 

 

Liabilities

 

 

 

 

Cash

 

  $

62,765

 

Pro rata debt (Includes JVs) (b)

 

  $

1,621,665

 

Due from affiliates

 

28,670

 

Line of Credit

 

385,000

 

Other assets, net

 

142,439

 

Accounts Payable

 

272,595

 

 

 

 

 

Income Taxes, net

 

13,458

 

 

 

 

 

Distributions Payable

 

58,036

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

68,217,189

 

 

 

 

 

 

 

 

 

(a)          Refer to schedule on the following page for a reconciliation from reported lease revenues and property expenses to pro rata lease revenues and pro rata non-reimbursable property expenses that includes our joint venture (“JV”) interests.

 

(b)          Pro rata NOI and pro rata debt are non-GAAP measures. See page 21 for the detailed reconciliation of Pro Rata NOI. See the Terms and Definitions section that begin on page 42 for a description of our non-GAAP measures.

 

(c)          Excludes investments in the operating partnerships of the Managed REITs. Excludes Corporate Property Associates18 – Global Incorporated, which was consolidated at June 30, 2013 prior to issuing its shares to investors.

 

(d)         The estimated net asset value per share (“NAV”) of CPA®:16 – Global is as of December 31, 2012. NAVs have not been determined for CPA®:17 – Global and CWI; therefore their offering prices have been presented in the table above.

 

(e)          Excludes the asset management revenue related to CPA®:15, which ceased upon the completion of the CPA®:15 Merger on September 28, 2012.

 

GRAPHIC

Investing for the long runTM | 20

 

 


 

Pro Rata NOI

 

(in thousands) (unaudited)

 

Reconciliation of Pro Rata NOI

 

Three Months Ended
June 30, 2013

 

Annualized

 

Pro Rata Lease Revenue

 

 

 

 

 

Total lease revenue – as reported

 

  $

75,910

 

  $

303,640

 

Total lease revenue – discontinued operations

 

812

 

3,248

 

Total consolidated lease revenue

 

76,722

 

306,888

 

Add: Pro rata share of revenue from equity investments

 

9,751

 

39,004

 

Less: Pro rata share of revenue due to noncontrolling interests

 

(10,273)

 

(41,092)

 

Total pro rata lease revenue (a)

 

76,200

 

304,800

 

Less: Straight line rent amortization

 

(2,215)

 

(8,860)

 

Less: Above - and below -market rent intangible lease amortization

 

6,208

 

24,832

 

Total Pro Rata Cash Lease Revenues

 

80,193

 

320,772

 

Pro Rata Non-Reimbursable Property Expenses:

 

 

 

 

 

Property expenses – as reported

 

5,531

 

22,124

 

Property expenses – discontinued operations

 

194

 

776

 

Total consolidated property expenses

 

5,725

 

22,900

 

Less: Reimbursable property expenses (b) 

 

(3,298)

 

(13,192)

 

Total non-reimbursable property expenses

 

2,427

 

9,708

 

Add: Pro rata share of non-reimbursable property expenses from equity investments

 

(147)

 

(588)

 

Less: Pro rata share of non-reimbursable property expenses due to noncontrolling interests

 

(393)

 

(1,572)

 

Total Pro Rata Non-Reimbursable Property Expenses

 

1,887

 

7,548

 

Pro Rata NOI (c)

 

  $

78,306

 

  $

313,224

 

 

 

 

 

(a)         Total pro rata lease revenues differ from the amount presented in the reconciliation of Consolidated Statement of Income to AFFO due to the inclusion of discontinued operations.

 

(b)          Reimbursable property expenses are substantially offset by revenues recorded in Other real estate income; therefore, these reimbursements are not included in lease revenue.

 

(c)          Pro rata NOI is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP financial measures.

 

GRAPHIC

Investing for the long runTM | 21

 

 


 

Portfolio Debt Overview (Pro Rata-Basis)

 

(in thousands, except percentages) (unaudited)

 

 

 

As of June 30, 2013

Portfolio Debt Maturity

Year of Maturity

 

Balloon Payments

 

Other Principal
Payments

 

Debt Maturity(a)

 

Remaining 2013

 

  $

31,577

 

  $

253

 

  $

31,830

 

2014  (b)

 

628,106

 

14,968

 

643,074

 

2015 

 

155,806

 

6,396

 

162,202

 

2016 

 

59,161

 

11,379

 

70,540

 

2017 

 

236,671

 

10,715

 

247,386

 

2018 

 

156,315

 

25,072

 

181,387

 

2019 

 

28,106

 

10,647

 

38,753

 

2020 

 

124,384

 

27,881

 

152,265

 

2021 

 

28,776

 

9,891

 

38,667

 

2022 

 

159,256

 

42,817

 

202,073

 

2023 

 

61,267

 

68,313

 

129,580

 

Thereafter

 

34,473

 

74,435

 

108,908

 

Total

 

  $

1,703,898

 

  $

302,767

 

  $

2,006,665

 

 

Debt Maturity Analysis (a)

 

 

 


(a)

Debt maturity data is presented on a pro rata basis. Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

 

(b)

Amount includes $385.0 million of outstanding recourse debt under the senior credit facility. On July 31, 2013, we entered into a new credit agreement with our existing lender for an unsecured term loan of up to $300.0 million (the “Term Loan Credit Agreement”), which we drew down in full primarily to repay the outstanding balance on our pre-existing revolving credit facility. The Term Loan Credit Agreement has substantially the same terms as the existing credit agreement.

 

GRAPHIC

Investing for the long runTM | 22

 

 


 

Portfolio Debt Overview (Pro Rata-Basis)

(Continued)

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

Fixed- and Variable-Rate Pro Rata Debt

 

Non-Recourse Debt

 

Total Outstanding
Balance

 

Percent of Total

 

Fixed

 

  $

1,270,461

 

63.3%

 

Variable – Swapped

 

217,029

 

10.8%

 

Variable – Capped

 

108,531

 

5.4%

 

Variable – Future Rate Reset

 

22,557

 

1.1%

 

Variable – Floating

 

3,087

 

0.2%

 

 

 

1,621,665

 

80.8%

 

Recourse Debt

 

 

 

 

 

Variable – Senior Credit Facility

 

385,000

 

19.2%

 

Total Debt Pro Rata Outstanding (a)

 

  $

2,006,665

 

100.0%

 

 

 

 

 

(a)          Pro rata debt is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP financial measures.

 

GRAPHIC

Investing for the long runTM | 23

 

 


 

Detailed Debt Summary (Pro Rata-Basis)

 

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

 

Detailed Debt Summary

 

 

Tenant/Lease Guarantor

 

Maturity Date

 

Interest Rate

 

Rate Type

 

Percent
Ownership

 

Pro Rata Outstanding
Balance 
(a)

 

EDS Customer Relationship Mgmt. Inc.

 

Jul-13

 

10.00

%

Fixed

 

100

%

$

292

 

Multiple Tenants

 

Jul-13

 

4.40

%

Variable – Swapped

 

65

%

13,441

 

AutoZone, Inc.

 

Aug-13

 

6.85

%

Fixed

 

100

%

78

 

AutoZone, Inc.

 

Aug-13

 

6.85

%

Fixed

 

100

%

8

 

Danka Office Imaging Company

 

Oct-13

 

6.71

%

Fixed

 

100

%

18,011

 

LTF Real Estate Company, Inc.

 

Jan-14

 

6.43

%

Fixed

 

100

%

21,721

 

U-Haul Moving Partners Inc. & Mercury Partners, LP

 

May-14

 

6.45

%

Fixed

 

58

%

87,150

 

Actuant Corporation

 

May-14

 

6.82

%

Fixed

 

50

%

5,062

 

TietoEnator Plc

 

Jul-14

 

5.16

%

Fixed

 

60

%

34,608

 

Northrop Grumman Systems Corporation & Overland Storage Inc.

 

Aug-14

 

6.18

%

Fixed

 

100

%

17,122

 

Plexus Corporation

 

Aug-14

 

7.25

%

Fixed

 

100

%

4,713

 

Carrefour France SAS

 

Dec-14

 

1.22

%

Variable – Capped

 

100

%

87,698

 

Sports Wholesale, Inc.

 

May-15

 

6.45

%

Variable – Swapped

 

100

%

4,356

 

Hellweg Die Profi-Baumärkte GmbH Und Co.

 

May-15

 

4.50

%

Fixed

 

75

%

64,368

 

Pohjola Non-Life Insurance Company LTD

 

May-15

 

4.59

%

Fixed

 

60

%

36,648

 

Wagon Automotive Nagold GmbH & Waldaschaff Automotive

 

Aug-15

 

6.64

%

Fixed

 

33

%

6,224

 

Lowes Home Improvement Warehouse

 

Sep-15

 

4.87

%

Fixed

 

100

%

8,132

 

Bouygues Telecom

 

Oct-15

 

3.07

%

Fixed

 

95

%

4,342

 

The American Bottling Company

 

Nov-15

 

5.13

%

Fixed

 

100

%

27,958

 

Tata Steel UK Limited

 

Nov-15

 

6.17

%

Fixed

 

100

%

10,174

 

Humco Holding Group, Inc.

 

Feb-16

 

4.75

%

Fixed

 

100

%

2,607

 

World Color Printing (USA) Corp.

 

May-16

 

5.30

%

Fixed

 

100

%

4,798

 

Fiserv, Inc.

 

Jun-16

 

6.18

%

Fixed

 

100

%

28,130

 

Various self-storage facilities

 

Jul-16

 

6.27

%

Variable – Future Rate Reset

 

40

%

5,833

 

Sprint Spectrum Realty Company, L. P.

 

Aug-16

 

4.85

%

Fixed

 

100

%

8,029

 

Del Monte Corporation

 

Aug-16

 

4.80

%

Fixed

 

50

%

5,359

 

Multiple Tenants

 

Oct-16

 

5.01

%

Fixed

 

75

%

9,244

 

Consolidated Systems, Inc.

 

Nov-16

 

5.87

%

Fixed

 

60

%

6,540

 

Hellweg Die Profi-Baumärkte GmbH & Co KG

 

Jan-17

 

5.49

%

Fixed

 

43

%

7,931

 

Hellweg Die Profi-Baumärkte GmbH & Co KG

 

Jan-17

 

5.49

%

Fixed

 

40

%

132,878

 

Hellweg Die Profi-Baumärkte GmbH Und Co.

 

Jan-17

 

6.74

%

Fixed

 

40

%

(11,814

)

SaarOTEC

 

Jan-17

 

5.32

%

Fixed

 

50

%

4,422

 

Rave Motion Pictures Baton Rouge LLC

 

Feb-17

 

5.60

%

Fixed

 

100

%

9,948

 

Qwest Communications, Inc.

 

Feb-17

 

4.50

%

Fixed

 

100

%

1,209

 

TSI Newton, LLC

 

May-17

 

5.59

%

Fixed

 

44

%

3,323

 

24 Hour Fitness USA, Inc.

 

Jun-17

 

5.50

%

Variable – Floating

 

100

%

3,087

 

Amylin Pharmaceuticals, Inc.

 

Jul-17

 

6.20

%

Fixed

 

100

%

33,398

 

Walgreens Co.

 

Jul-17

 

5.67

%

Fixed

 

100

%

22,000

 

 

GRAPHIC

Investing for the long runTM | 24

 

 


 

Detailed Debt Summary (Pro Rata-Basis)

(Continued)

(in thousands, except percentages) (unaudited)

 

 

As of June 30, 2013

 

Detailed Debt Summary

 

 

 

 

Tenant/Lease Guarantor

 

Maturity Date

 

Interest Rate

 

Rate Type

 

Percent
Ownership

 

Pro Rata Outstanding
Balance 
(a)

 

Arch Chemicals, Inc.

 

Oct-17

 

4.83

%

Fixed

 

100

%

7,620

 

Advanced Micro Devices

 

Sep-17

 

5.80

%

Fixed

 

33

%

18,170

 

PetSmart, Inc.

 

Nov-17

 

5.75

%

Fixed

 

100

%

2,566

 

The United States Playing Card Company & Alstom Power

 

Dec-17

 

4.02

%

Fixed

 

100

%

5,657

 

The United States Playing Card Company & Alstom Power

 

Dec-17

 

4.02

%

Fixed

 

100

%

6,205

 

Wanbishi Archives Co. Ltd.

 

Dec-17

 

2.00

%

Fixed

 

3

%

786

 

OBI Group

 

Mar-18

 

5.10

%

Variable – Swapped

 

75

%

108,550

 

The New York Times Company

 

Apr-18

 

2.78

%

Variable – Capped

 

18

%

20,832

 

MediMedia USA, Inc.

 

Apr-18

 

5.90

%

Fixed

 

100

%

10,669

 

OBI Group

 

Mar-18

 

5.48

%

Variable – Swapped

 

100

%

8,127

 

Kerr Corporation

 

Oct-18

 

7.23

%

Fixed

 

100

%

7,272

 

Omnicom Group, Inc.

 

Oct-18

 

6.77

%

Fixed

 

100

%

25,937

 

Various self-storage facilities

 

Feb-19

 

7.03

%

Variable – Future Rate Reset

 

40

%

12,337

 

Barnes & Noble, Inc.

 

Feb-19

 

3.70

%

Variable – Swapped

 

100

%

3,441

 

Orbital Sciences Corporation

 

Jul-19

 

7.75

%

Fixed

 

100

%

11,737

 

Universal Technical Inst. of CA, Inc.

 

Nov-19

 

6.27

%

Fixed

 

100

%

11,238

 

24 Hour Fitness USA, Inc.

 

Jan-20

 

6.10

%

Fixed

 

100

%

3,054

 

C1000 Logistiek Vastgoed B.V.

 

Mar-20

 

3.75

%

Variable – Swapped

 

15

%

10,799

 

C1000 Logistiek Vastgoed B.V.

 

Mar-20

 

8.49

%

Variable – Swapped

 

15

%

2,894

 

Merit Medical Systems, Inc.

 

Apr-20

 

6.50

%

Fixed

 

100

%

12,945

 

JPMorgan Chase Bank, National Assoc.

 

Jul-20

 

5.47

%

Variable – Swapped

 

100

%

33,337

 

Prefecture de Police (Paris, France)

 

Aug-20

 

4.36

%

Fixed

 

50

%

36,050

 

Self-Storage Facility in Pensacola, FL

 

Nov-20

 

6.25

%

Variable – Future Rate Reset

 

100

%

1,782

 

Federal Express Corporation

 

Dec-20

 

5.48

%

Fixed

 

100

%

51,404

 

Universal Technical Inst. of Penn., Inc.

 

Jan-21

 

6.15

%

Fixed

 

100

%

12,864

 

SymphonyIRI Group, Inc.

 

Feb-21

 

5.96

%

Fixed

 

100

%

15,296

 

Datalogic Scanning, Inc.

 

Feb-21

 

5.80

%

Fixed

 

100

%

4,683

 

PetSmart, Inc.

 

Sep-21

 

6.50

%

Fixed

 

30

%

5,824

 

Integracolor, Ltd.

 

Mar-22

 

4.37

%

Variable – Swapped

 

100

%

6,811

 

24 Hour Fitness USA, Inc.

 

Apr-22

 

6.29

%

Fixed

 

100

%

3,976

 

Belgium Government

 

May-22

 

6.23

%

Fixed

 

100

%

10,681

 

EADS North America Defense Test  & Services

 

Jun-22

 

4.70

%

Fixed

 

100

%

8,395

 

Anthony’s Manufacturing Company

 

Jun-22

 

4.65

%

Fixed

 

100

%

6,938

 

Foster Wheeler Realty Services

 

Aug-22

 

3.89

%

Variable – Swapped

 

100

%

25,272

 

Marriott Courtyard

 

Oct-22

 

5.04

%

Fixed

 

100

%

140,000

 

Pactiv Corporation

 

Mar-23

 

6.32

%

Fixed

 

100

%

6,291

 

Benchmark Electronics Manufacturing, Inc.

 

Apr-23

 

6.36

%

Fixed

 

100

%

5,036

 

True Value Company

 

Jan-23

 

4.26

%

Fixed

 

50

%

16,099

 

 

GRAPHIC

Investing for the long runTM | 25

 

 


 

Detailed Debt Summary (Pro Rata-Basis)

(Continued)

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

 

Detailed Debt Summary

 

 

Tenant/Lease Guarantor

 

Maturity Date

 

Interest Rate

 

Rate Type

 

Percent
Ownership

 

Pro Rata Outstanding
Balance 
(a)

 

True Value Company

 

Feb-23

 

4.25

%

Fixed

 

50

%

14,887

 

Kraft Foods Group, Inc.

 

Feb-23

 

4.05

%

Fixed

 

100

%

36,500

 

Hologic, Inc.

 

May-23

 

6.40

%

Fixed

 

100

%

12,534

 

Galyan’s Trading Company

 

Sep-23

 

7.32

%

Fixed

 

100

%

10,868

 

Grande Communications Networks, Inc.

 

Sep-23

 

6.72

%

Fixed

 

100

%

5,149

 

Rexam Consumer Plastics, Inc.

 

Oct-23

 

6.30

%

Fixed

 

100

%

12,437

 

EDS Customer Relationship Mgmt. Inc.

 

Dec-23

 

6.20

%

Fixed

 

100

%

9,779

 

World Airways, Inc.

 

Jun-24

 

6.76

%

Fixed

 

100

%

3,856

 

Dick’s Sporting Goods

 

Oct-24

 

7.46

%

Fixed

 

100

%

4,086

 

Shaklee Corporation

 

Oct-24

 

5.54

%

Fixed

 

100

%

12,492

 

Berry Plastics Corporation

 

Nov-24

 

5.54

%

Fixed

 

100

%

14,726

 

Plumbmaster, Inc.

 

Nov-24

 

5.54

%

Fixed

 

100

%

4,376

 

Universal Technical Institute of Arizona

 

Dec-24

 

5.82

%

Fixed

 

100

%

12,955

 

24 Hour Fitness USA, Inc.

 

Jan-25

 

7.63

%

Variable – Future Rate Reset

 

100

%

2,605

 

The Talaria Company, LLC

 

Jun-25

 

6.26

%

Fixed

 

30

%

7,853

 

Google, Inc.

 

Nov-25

 

5.15

%

Fixed

 

100

%

23,801

 

Oriental Trading Company, inc.

 

Sep-26

 

6.56

%

Fixed

 

100

%

22,158

 

Total Non-Recourse Debt

 

 

 

 

 

 

 

 

 

 $

1,621,665

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Interest Rate - Non-Recourse Debt

 

 

 

5.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured - Senior Credit Facility

 

Dec-14

 

1.94

%

Variable – Floating

 

100

%

385,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Interest Rate - Total Debt

 

 

 

4.58

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Pro Rata Debt (b)

 

 

 

 

 

 

 

 

 

 $

2,006,665

 

 

 

 

 

(a)          Based upon applicable exchange rates at June 30, 2013.

 

(b)          Pro rata debt is a non-GAAP measure. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP financial measures.

 

GRAPHIC

Investing for the long runTM | 26

 

 


 

Selected Data for the Managed REITs

 

(in thousands, except share amounts, per share amounts and percentages) (unaudited)

 

As of June 30, 2013

 

Selected Data for the Managed REITs

 

 

 

Ownership

 

Shares
Outstanding

 

Most Recent
Offering
Price/NAV  
(a)

 

Current
Annualized
Distribution 
(b)

 

 

Distributions
Received by WPC

 

 

Asset Management
Revenue 
(c)

 

Structuring
Revenue 
(d)

 

Special
General Partnership
Distributions

 

CPA®:16 – Global

 

18.6%

 

205,142,603

$

8.70

 

6.7%

 

$

12,524

 

 

0.50%

 

4.5%

 

10.0%

 

CPA®:17 – Global

 

1.6%

 

311,933,180

 

10.00

 

6.5%

 

 

1,253

 

 

0.50%

 

4.5%

 

10.0%

 

CWI

 

0.4%

 

37,675,956

 

10.00

 

6.0%

 

 

6

 

 

0.50%

 

2.5%

 

10.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inception
Date

 

Square Feet

 

 

Total
Domestic
AUM

 

 

Total
International
AUM

 

Total
AUM

 

Total
Debt

 

CPA®:16 – Global

 

 

 

 

 

2003

 

45,893

 

$

2,496,391

 

$

1,050,131

 

 $

 3,546,522

 

 $

 1,703,289

 

CPA®:17 – Global

 

 

 

 

 

2007

 

32,018

 

 

2,423,596

 

 

1,582,297

 

4,005,893

 

1,729,088

 

CWI

 

 

 

 

 

2010

 

N/A

 

 

578,577

 

 

-

 

578,577

 

297,372

 

Total

 

 

 

 

 

 

 

77,911

 

$

5,498,564

 

$

2,632,428

 

 $

 8,130,992

 

 $

 3,729,749

 

 

 

 

 

(a)          WPC generally calculates the NAV for each of the Managed REITs, relying in part on an estimate of the fair market value of each of the Managed REITs’ real estate portfolio provided by a third party, adjusted to give effect to the estimated fair value of mortgages encumbering the Managed REITs’ assets as well as other adjustments. The NAVs are based on a number of variables, including individual tenant credits, lease terms, lending credit spreads, foreign currency exchange rates and tenant defaults, among others. The NAV of CPA®:16 – Global is as of December 31, 2012. NAVs have not been determined for CPA®:17 – Global and CWI.

 

(b)          The current annualized distribution rate is based on quarterly distribution rate for the second quarter of 2013 (rate is not guaranteed). For CWI, approximately 83% of its second quarter distribution was paid in cash, with the remaining 17% paid in shares of its common stock.

 

(c)          We generally earn asset management revenue of 0.5% per annum of average invested assets. For CPA®:17 – Global, we earn asset management revenue ranging from 0.5% per annum of average market value for long-term net leases and certain other types of real estate investments up to 1.75% per annum of the average equity value for certain types of securities. For 2013, we have elected to receive all base asset management revenue in shares of each of the Managed REITs common stock.

 

(d)         We generally receive structuring revenue of up to an average of 4.5% of the total cost of all investments made by each CPA® REIT. For certain types of non-long term net lease investments acquired on behalf of CPA®:17 – Global, structuring revenue may range from 0% to 1.75% of the equity invested plus the related structuring revenue. For CWI, we earn structuring revenue of 2.5% of the total investment cost of the properties acquired.

 

GRAPHIC

Investing for the long runTM | 27

 

 


 

Joint Venture Information

 

(in thousands, except percentages) (unaudited)

 

Joint Venture Information

 

Joint Venture or JV

 

WPC %
Interest

 

Remaining

 

Total JV

 

WPC
Pro Rata Share of Total JV
 (a)

(Principal Tenant)

 

in JV

 

Interest in JV

 

Assets

 

Liabilities

 

Equity

 

Assets

 

Liabilities

 

Equity

Actuant Corporation

 

50.00

%

CPA®:16 – Global - 50%

 

 $

15,639

 

$

10,852

 

$

4,787

 

$

7,827

 

$

5,431

 

$

2,396

Advanced Micro Devices, Inc.

 

67.00

%

CPA®:16 – Global - 33%

 

84,932

 

65,588

 

19,344

 

56,616

 

43,721

 

12,895

Builders FirstSource, Inc.

 

40.00

%

CPA®:16 – Global - 60%

 

9,991

 

423

 

9,568

 

3,996

 

169

 

3,827

C1000 Logistiek Vastgoed B.V.

 

15.00

%

CPA®:17 – Global - 85%

 

185,851

 

92,295

 

93,556

 

27,877

 

13,844

 

14,033

Consolidated Systems, Inc.

 

60.00

%

CPA®:16 – Global - 40%

 

16,120

 

11,139

 

4,981

 

9,672

 

6,683

 

2,989

Del Monte Corporation

 

50.00

%

CPA®:16 – Global - 50%

 

12,540

 

10,869

 

1,671

 

6,269

 

5,434

 

835

Eroski Sociedad Cooperativa

 

70.00

%

CPA®:17 – Global - 30%

 

30,505

 

162

 

30,343

 

21,354

 

114

 

21,240

Hellweg Die Profi-Baumärkte GmbH & Co. KG (Hellweg 1)

 

75.00

%

CPA®:16 – Global - 25%

 

177,376

 

93,401

 

83,975

 

133,032

 

70,050

 

62,982

Hellweg Die Profi-Baumärkte GmbH & Co. KG (Hellweg 2)

 

40.00

%

CPA®:16 – Global - 27%; CPA®:17 – Global -33%

 

393,965

 

339,681

 

54,284

 

158,277

 

134,928

 

23,349

PetSmart, Inc.

 

30.00

%

CPA®:16 – Global - 70%

 

21,464

 

19,624

 

1,840

 

6,439

 

5,887

 

552

Barth Europa Transporte e.K/MSR Technologies GmbH

 

67.00

%

CPA®:16 – Global - 33%

 

12,258

 

1,058

 

11,200

 

8,173

 

706

 

7,467

Arelis Broadcast, Veolia Transport, and Marchal Levage

 

65.00

%

CPA®:16 – Global - 35%

 

22,994

 

22,284

 

710

 

14,947

 

14,485

 

462

Multi-tenant property in Illkirch-Graffens, France

 

75.00

%

Third party - 25%

 

20,289

 

13,015

 

7,274

 

15,217

 

9,761

 

5,456

Multi-tenant property in Tours, France

 

95.00

%

Third party - 5%

 

11,781

 

7,814

 

3,967

 

11,192

 

7,423

 

3,769

The New York Times Company

 

18.00

%

CPA®:16 – Global - 27%; CPA®:17 – Global -55%

 

249,125

 

121,606

 

127,519

 

44,220

 

21,585

 

22,635

OBI A.G.

 

75.00

%

CPA®:16 – Global - 25%

 

153,672

 

146,338

 

7,334

 

115,255

 

109,754

 

5,501

Pohjola Non-Life Insurance Company

 

60.00

%

CPA®:16 – Global - 40%

 

86,513

 

74,788

 

11,725

 

51,908

 

44,873

 

7,035

Police Prefecture, French Government

 

50.00

%

CPA®:16 – Global - 50%

 

89,130

 

80,212

 

8,918

 

44,565

 

40,106

 

4,459

SaarOTEC

 

50.00

%

CPA®:16 – Global - 50%

 

6,012

 

9,170

 

(3,158

)

3,006

 

4,585

 

(1,579)

Schuler A.G.

 

67.00

%

CPA®:16 – Global - 33%

 

65,570

 

5,023

 

60,547

 

43,714

 

3,349

 

40,365

Carey Storage

 

37.00

%

Third parties - 63%

 

76,110

 

47,306

 

28,804

 

27,856

 

17,314

 

10,542

TietoEnator Plc

 

60.00

%

CPA®:16 – Global - 40%

 

79,869

 

61,400

 

18,469

 

47,922

 

36,840

 

11,082

The Talaria Company

 

30.00

%

CPA®:16 – Global - 70%

 

41,571

 

26,794

 

14,777

 

12,471

 

8,038

 

4,433

Town Sports International Holdings, Inc.

 

44.00

%

CPA®:16 – Global - 56%

 

7,070

 

7,415

 

(345

)

3,111

 

3,263

 

(152)

True Value Company

 

50.00

%

CPA®:16 – Global - 50%

 

115,759

 

64,129

 

51,630

 

57,879

 

32,064

 

25,815

U-Haul Moving Partners, Inc. and Mercury Partners, L.P.

 

57.00

%

CPA®:16 – Global - 31%; CPA®17 – Global - 12%

 

271,758

 

172,651

 

99,107

 

156,777

 

99,602

 

57,175

The Upper Deck Company

 

50.00

%

CPA®:16 – Global - 50%

 

21,777

 

5

 

21,772

 

10,889

 

3

 

10,886

Waldaschaff Automotive GmbH and Wagon Automotive Nagold GmbH

 

33.00

%

CPA®:17 – Global - 67%

 

42,367

 

20,045

 

22,322

 

14,121

 

6,681

 

7,440

Wanbishi Archives Co. Ltd

 

3.00

%

CPA®:17 – Global - 97%

 

45,784

 

28,728

 

17,056

 

1,374

 

862

 

512

 

 

 

 

 

 

 $

2,367,792

 

$

1,553,815

 

$

813,977

 

$

1,115,956

 

$

747,555

 

$

368,401

 

 

 

 

(a)          Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP financial measures.

 

 

 

GRAPHIC

Investing for the long runTM | 28

 

 

 


 

Portfolio Information – Diversification by Rent and Historical Occupancy

(Pro Rata-Basis)

(in thousands, except percentages) (unaudited)

 

 

As of June 30, 2013

 

Tenant / Lease Guarantor

 

Annualized Contractual
Minimum Base Rent

 

Percent

 

Hellweg Die Profi-Baumärkte GmbH Und Co. (a) 

 

$

26,379

 

8.2%

 

U-Haul Moving Partners Inc./Mercury Partners, LP

 

18,741

 

5.8%

 

Carrefour France SAS (a) 

 

16,294

 

5.0%

 

Marriott Corporation

 

16,100

 

5.0%

 

OBI Group (a) 

 

13,430

 

4.2%

 

UTI Holdings, Inc.

 

10,327

 

3.2%

 

Federal Express Corp.

 

7,574

 

2.3%

 

True Value Company

 

7,243

 

2.2%

 

Foster Wheeler

 

6,510

 

2.0%

 

Pohjola Non-Life Insurance Company LTD (a) 

 

5,524

 

1.7%

 

Total (b)

 

$

128,122

 

39.6%

 

 

 

 

 

 

 

Weighted-Average Lease Term for Portfolio

 

8.8

    years

 

 

 

Historical Occupancy (c)

 

 

 

 

(a)          Rent amounts are subject to fluctuations in foreign currency exchange rates.

 

(b)          Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

(c)          Pre- CPA®:15 Merger periods include pro forma combined occupancy rates for WPC and CPA®:15.

 

GRAPHIC

Investing for the long runTM | 29

 

 


 

Portfolio Information – Diversification by Property Type (Pro Rata-Basis)

 

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

Property Type

 

Square Footage

 

Percent

 

 

 

 

 

 

 

Industrial

 

12,660

 

32.0

%

 

 

 

 

 

 

Warehouse/Distribution

 

10,248

 

25.9

%

 

 

 

 

 

 

Office

 

5,919

 

15.0

%

 

 

 

 

 

 

Retail

 

4,856

 

12.3

%

 

 

 

 

 

 

Self Storage

 

3,354

 

8.5

%

 

 

 

 

 

 

Other Properties (a)

 

2,491

 

6.3

%

 

 

 

 

 

 

Total (b) (c)

 

39,528

 

100.0

%

 

 

 

 

 

 

 

Property Type

 

Annualized Contractual
Minimum Base Rent

 

Percent

 

 

Office

 

$

93,947

 

29.1

%

 

 

 

 

 

 

Industrial

 

69,967

 

21.6

%

 

 

 

 

 

 

Warehouse/Distribution

 

51,056

 

15.8

%

 

 

 

 

 

 

Retail

 

50,388

 

15.6

%

 

 

 

 

 

 

Other Properties (a)

 

39,075

 

12.1

%

 

 

 

 

 

 

Self Storage

 

18,741

 

5.8

%

 

 

 

 

 

 

Total (b) (c)

 

$

323,174

 

100.0

%

 

Portfolio Diversification by Property Type (b) (c)

(based on square footage)

Portfolio Diversification by Property Type (b) (c)

(based on annualized contractual minimum base rent)

 

 

 

 

(a)          Other properties include hospitality, education, health & fitness, theaters, and unoccupied land.

 

(b)          Excludes all operating properties.

 

(c)          Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM | 30

 

 


 

Portfolio Information – Diversification by Tenant Industry (Pro Rata-Basis)

 

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

 

Industry Type (a)

 

Square Footage

 

Percent

 

Annualized Contractual
Minimum Base Rent

 

Percent

 

Retail Trade

 

8,459

 

21.4%

 

  $

69,292

 

21.4%

 

Electronics

 

2,266

 

5.7%

 

27,272

 

8.4%

 

Business and Commercial Services

 

1,167

 

3.0%

 

25,840

 

8.0%

 

Healthcare, Education and Childcare

 

1,689

 

4.3%

 

20,739

 

6.4%

 

Hotels and Gaming

 

1,036

 

2.6%

 

16,100

 

5.0%

 

Beverages, Food, and Tobacco

 

2,357

 

6.0%

 

14,357

 

4.4%

 

Chemicals, Plastics, Rubber, and Glass

 

3,110

 

7.9%

 

14,338

 

4.4%

 

Media: Printing and Publishing

 

1,906

 

4.8%

 

12,873

 

4.0%

 

Telecommunications

 

922

 

2.3%

 

12,379

 

3.8%

 

Buildings and Real Estate

 

2,180

 

5.5%

 

12,182

 

3.8%

 

Leisure, Amusement, Entertainment

 

564

 

1.4%

 

10,757

 

3.3%

 

Machinery

 

1,196

 

3.0%

 

9,903

 

3.1%

 

Transportation - Cargo

 

624

 

1.6%

 

9,551

 

3.0%

 

Construction and Building

 

2,191

 

5.6%

 

8,978

 

2.8%

 

Automobile

 

2,091

 

5.3%

 

8,923

 

2.8%

 

Insurance

 

634

 

1.6%

 

7,408

 

2.3%

 

Transportation - Personal

 

1,199

 

3.0%

 

6,767

 

2.1%

 

Federal, State and Local Government

 

254

 

0.6%

 

6,281

 

1.9%

 

Aerospace and Defense

 

760

 

1.9%

 

5,076

 

1.6%

 

Consumer and Durable Goods

 

877

 

2.2%

 

5,050

 

1.6%

 

Other (b)

 

3,593

 

9.1%

 

19,108

 

5.9%

 

Vacancies

 

453

 

1.2%

 

-

 

0.0%

 

Total (c) (d)

 

39,528

 

100.0%

 

  $

323,174

 

100.0%

 

 

 

 

 

Portfolio Revenues – Contractual Increases (e) (f)

(based on annualized contractual minimum base rent)

 

(a)          Based on the Moody’s Classification System and information provided by the tenant.

(b)          Includes rent from tenants in the following industries: forest products and paper; grocery; banking; mining, metals, and primary metal industries; consumer non-durable goods; textiles, leather, and apparel; and multi-tenant properties.

(c)          Excludes all operating properties.

(d)         Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

(e)          Pro rata rents and applicable exchange rates as of June 30, 2013.

(f)             Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM | 31

 

 


 

Portfolio Information – Diversification by Geography (Pro Rata-Basis)

 

(in thousands, except percentages) (unaudited)

 

As of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Property
Type

 

Square Footage

 

Percent

 

 

 

Property
Type

 

Annualized Contractual
Minimum Base Rent

 

Percent

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

U.S.

 

 

 

 

South

 

10,238

 

25.9%

 

 

 

South

 

$

69,378

 

21.5%

West

 

6,713

 

17.0%

 

 

 

West

 

67,022

 

20.7%

Midwest

 

6,267

 

15.9%

 

 

 

East

 

49,346

 

15.3%

East

 

5,832

 

14.8%

 

 

 

Midwest

 

41,592

 

12.9%

U.S. Total

 

29,050

 

73.6%

 

 

 

U.S. Total

 

227,338

 

70.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

International

 

 

 

 

Germany

 

3,453

 

8.7%

 

 

 

Germany

 

34,396

 

10.6%

France

 

3,451

 

8.7%

 

 

 

France

 

23,357

 

7.2%

Finland

 

974

 

2.5%

 

 

 

Finland

 

14,583

 

4.5%

Other (a)

 

2,600

 

6.5%

 

 

 

Other (a)

 

23,500

 

7.3%

International Total

 

10,478

 

26.4%

 

 

 

International Total

 

95,836

 

29.6%

Total (b) (c)

 

39,528

 

100.0%

 

 

 

Total (b) (c)

 

$

323,174

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Diversification by Geography (b) (c)

(based on square footage)

Portfolio Diversification by Geography (b) (c)

(based on annualized contractual minimum base rent)

 

 

 

 

(a)          Includes assets in Belgium, Poland, the Netherlands, Spain, the United Kingdom and Japan.

 

(b)          Excludes all operating properties.

 

(c)          Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM | 32

 

 


 

Portfolio Information – Lease Maturities (Pro Rata-Basis)

 

(in thousands, except percentages and number of leases) (unaudited)

 

 

As of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Year of Lease Expiration (a)

 

Number of Leases
Expiring

 

Square Feet

 

As % of
Total Portfolio

 

Annualized Contractual
Minimum Base Rent

 

As % of
Total Portfolio

Remaining 2013 (b)

 

3

 

410

 

1.0%

 

$

2,559

 

0.8%

2014 

 

12

 

1,084

 

2.7%

 

10,107

 

3.1%

2015 

 

18

 

3,871

 

9.8%

 

29,683

 

9.2%

2016 

 

15

 

1,706

 

4.3%

 

15,982

 

4.9%

2017 

 

12

 

2,033

 

5.2%

 

11,367

 

3.5%

2018 

 

18

 

2,451

 

6.2%

 

22,766

 

7.0%

2019 

 

12

 

1,927

 

4.9%

 

26,778

 

8.3%

2020 

 

8

 

2,135

 

5.4%

 

11,809

 

3.7%

2021 

 

9

 

1,720

 

4.4%

 

11,664

 

3.6%

2022 

 

15

 

3,500

 

8.9%

 

25,391

 

7.9%

2023 

 

12

 

4,906

 

12.4%

 

40,934

 

12.7%

2024 

 

25

 

6,248

 

15.8%

 

46,477

 

14.4%

2025 

 

6

 

462

 

1.2%

 

6,005

 

1.9%

2026 

 

6

 

646

 

1.6%

 

3,356

 

1.0%

Thereafter

 

19

 

5,976

 

15.1%

 

58,296

 

18.0%

Vacant

 

-

 

453

 

1.1%

 

-

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

Total (c) (d)

 

190

 

39,528

 

100.0%

 

$

323,174

 

100.0%

 

 

 

 

 

(a)   Assumes tenant does not exercise renewal option.

(b)   Month-to-month properties are counted in 2013 revenue stream.

(c)   Excludes all operating properties.

(d)   Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM | 33

 

 


 

Investment Activity – Owned Portfolio – Acquisitions and Dispositions

 

(in thousands, except square footage) (unaudited)

 

 

For the Six Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions - Owned Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio(s)

 

Tenant/Lease Guarantor

 

Property Location(s)

 

Purchase Price(a)

 

Closing Date

 

Property Type(s)

 

Gross Square 
Footage

WPC

 

Kraft Foods Group, Inc.

 

Northfield, IL

 

 $

72,360

 

Jan-13

 

Office

 

679,109

WPC

 

Tommy Hilfiger Europe B.V.

 

Venlo, Netherlands

 

35,316

 

Apr-13

 

Warehouse/Distribution

 

473,611

WPC

 

Cargotec Corporation

 

Tampere, Finland

 

52,084

 

Jun-13

 

Industrial, Office

 

183,567

WPC

 

Arbella Capital Corporation

 

Quincy, MA

 

25,500

 

Jun-13

 

Office

 

132,160

Total Owned Portfolio Acquisitions

 

 

 

 

 

 $

185,260

 

 

 

 

 

1,468,447

 

Dispositions - Owned Portfolio

 

Portfolio(s)

 

Tenant/Lease Guarantor

 

Property Location(s)

 

Gross Sale Price

 

Date

 

Property Type(s)

 

Gross Square
Footage

WPC

 

Childtime Childcare, Inc.(b)

 

Naperville, IL

 

 $

1,445

 

Jan-13

 

Education

 

7,893

WPC

 

Garden Ridge, L.P.(b)

 

Oklahoma City, OK

 

9,790

 

Mar-13

 

Retail

 

141,585

WPC

 

US Airways Group, Inc.

 

Tempe, AZ

 

28,420

 

Jun-13

 

Office

 

167,890

WPC

 

Custom Food Products, LLC (b)

 

Owingsville, KY

 

5,500

 

Jun-13

 

Industrial

 

37,094

WPC

 

Anthony, Inc. and Anthony Holdings, Inc.

 

San Fernando, CA

 

3,122

 

Jun-13

 

Industrial

 

40,306

WPC

 

Broomfield Properties Corp.

 

Broomfield, CO

 

1,300

 

Jun-13

 

Office

 

41,281

Total Owned Portfolio Dispositions

 

 

 

 

 

 $

49,577

 

 

 

 

 

436,049

 

 

 

 

(a)          Includes capitalized transaction costs, where applicable. Amounts are based on the applicable exchange rate on the date of acquisition, where relevant.

 

(b)          Properties were acquired in the CPA®:15 Merger.

 

GRAPHIC

Investing for the long runTM | 34

 


 

Investment Activity – Managed REITs – Acquisitions

 

(in thousands, except square footage) (unaudited)

 

 

For the Six Months Ended June 30, 2013

Acquisitions - Leased Properties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase

 

 

 

 

 

Gross Square 

Portfolio(s)

 

Tenant/Lease Guarantor

 

Property Location(s)

 

Price (a)

 

Closing Date

 

Property Type(s)

 

Footage

 

 

 

 

 

 

 

 

 

 

 

 

 

CPA®:17 – Global

 

Penda Corporation

 

Portage, WI

 

$

10,871

 

Jan-13

 

Industrial

 

270,500

CPA®:17 – Global

 

Live Nation Entertainment, Inc.

 

Dallas, TX

 

15,700

 

Feb-13

 

Retail

 

61,876

CPA®:17 – Global

 

Harbor Freight Tools USA, Inc. (b)

 

Dillon, SC

 

39,004

 

Mar-13

 

Warehouse/Distribution

 

BTS

CPA®:17 – Global

 

GEMS Chicago, Inc.

 

Chicago, IL

 

18,188

 

Apr-13

 

Land

 

324,176

CPA®:17 – Global

 

Multi-Tenant

 

Northbrook, IL

 

7,934

 

May-13

 

Various

 

6,006

CPA®:16 – Global

 

Advanced Circuits, Inc.

 

Aurora, CO

 

4,869

 

May-13

 

Industrial

 

50,664

 

Total Acquisitions - Leased Properties

 

 

 

96,566

 

 

 

 

 

713,222

 

Acquisitions - Self Storage

 

 

 

 

 

 

 

 

 

 

 

 

Purchase

 

 

Portfolio(s)

 

Property Type

 

Property Location(s)

 

Price (a)

 

Closing Date

 

 

 

 

 

 

 

 

 

CPA®:17 – Global

 

Self-Storage Facility

 

Cathedral City, CA

 

2,755

 

Mar-13

CPA®:17 – Global

 

Self-Storage Facility

 

Hilo, HI

 

6,100

 

Jun-13

CPA®:17 – Global

 

Self-Storage Facility (Equity investment)

 

New York, NY

 

81,237

 

Jun-13

 

Total Acquisitions - Self-Storage Properties

 

 

 

90,092

 

 

 

Acquisitions - Hospitality

 

 

 

 

 

 

 

 

 

 

 

 

Purchase

 

 

Portfolio(s)

 

Property Type

 

Property Location(s)

 

Price(a)

 

Closing Date

 

 

 

 

 

 

 

 

 

 

CWI

 

Hospitality

 

Memphis, TN; Atlanta, GA;
Frisco, TX; Birmingham, AL;
Baton Rouge, LA

 

94,600

 

Feb-13

 

CWI

 

Hospitality

 

Pittsburgh, PA

 

29,900

 

Mar-13

 

CWI

 

Hospitality

 

Nashville, TN

 

73,600

 

May-13

 

CWI

 

Hospitality

 

New York, NY

 

113,000

 

Jun-13

 

 

 

 

 

 

 

 

 

Total Acquisitions - Hospitality Properties

 

 

 

311,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Acquisitions

 

 

 

$

497,758

 

 

 

 

GRAPHIC

Investing for the long runTM |  35

 

 


 

Investment Activity – Managed REITs – Acquisitions - Notes

(Continued)

 

 

 

 

(a)          Includes capitalized transaction costs, where applicable. For equity investments, the purchase price represents the REIT’s pro rata share of the jointly-owned investment estimated total asset value, excluding debt, plus capitalized transactions costs.

 

(b)          Acquisition includes a build-to-suit (“BTS”) transaction.  Purchase price represents total commitment for BTS funding. Gross square footage amounts cannot be determined at this time.

 

GRAPHIC

Investing for the long runTM |  36

 

 


 

Investment Activity – Managed REITs – Dispositions

 

(in thousands, except square footage) (unaudited)

 

For the Six Months Ended June 30, 2013

 

Portfolio(s)

 

Tenant/Lease Guarantor

 

Property Location(s)

 

Gross Sale
Price

 

Date

 

Property Type

 

Gross Square
Footage

CPA®:16 – Global

 

Vacant (formerly Barjan LLC)

 

Rock Island, IL

 

$

 7,410

 

Feb-13

 

Warehouse/Distribution

 

241,950

CPA®:16 – Global

 

Childtime Childcare, Inc.

 

Patchogue, NY

 

575

 

Mar-13

 

Education

 

7,894

CPA®:16 – Global

 

Vacant (formerly Metagenics, Inc.)

 

San Clemente, CA

 

11,263

 

Mar-13

 

Industrial

 

88,070

CPA®:16 – Global

 

Garden Ridge, L.P.

 

Tulsa, OK

 

9,810

 

Mar-13

 

Retail

 

141,659

CPA®:16 – Global

 

RR Donnelley & Sons Company

 

Waterloo, WI

 

-

 

Apr-13

 

Industrial, Office, Warehouse/Distribution

 

466,192

CPA®:16 – Global

 

Waddington North America, Inc.

 

Florence, KY

 

1,775

 

Jun-13

 

Industrial

 

166,849

CPA®:16 – Global

 

BA Kitchen Components Limited (a)

 

Doncaster, United Kingdom

 

1,527

 

Jun-13

 

Industrial

 

225,998

Total Dispositions

 

 

 

 

 

$

32,360

 

 

 

 

 

1,338,612

 

 

 

 

(a)          Disposition price reflects applicable foreign exchange rate.

 

 

 

GRAPHIC

Investing for the long runTM | 37

 

 


 

Tenants by Annualized Contractual Minimum Base Rent (Pro Rata-Basis)

 

(in thousands, except number of locations and percentages) (unaudited)

 

As of June 30, 2013

 

Tenant

Location(s)

Number
of
Locations

Square
Feet

Annualized
Rent

Annualized
Rent as a
% of Total

Increase
Factor

Property Type

Industry

Hellweg Die Profi-Baumärkte GmbH Und Co. KG

Germany

53

2,308

$

26,379

8.2%

CPI

Retail

Retail Stores

U-Haul Moving Partners Inc/Mercury Partners, LP

AL; AZ; CO; FL; GA; IL; IN; KS; LA; MA; MD; MN; MO; MS; NC; NJ; NM; NV; NY; OH; OK; TN; TX; VA

78

2,180

18,741

5.8%

CPI

Self-Storage

Buildings and Real Estate

Carrefour France, SAS

France

8

2,940

16,294

5.0%

CPI; FIXED

Warehouse/Distribution

Retail Stores

Marriott Corporation

CA; FL; IL; IN; KY; MD; NJ; NM; WA

12

1,036

16,100

5.0%

OTHER

Other Properties

Hotels and Gaming

OBI Group

Poland

18

1,399

13,430

4.2%

CPI

Office; Retail

Retail Stores

UTI Holdings, Inc.

Glendale Heights, IL (2); Rancho Cucamonga, CA; Exton, PA; Avondale, AZ

5

807

10,327

3.2%

CPI

Other Properties

Healthcare, Education and Childcare

Federal Express Corporation

College Station, TX; Collierville, TN; Corpus Christi, TX

3

433

7,574

2.3%

CPI; FIXED

Office; Warehouse/Distribution

Transportation - Cargo

True Value Company

Corsicana, TX; Fogelsville, PA; Jonesboro, GA; Kansas City, MO; Kingman, AZ; Springfield, OR; Woodland, CA

7

1,814

7,243

2.2%

FIXED

Industrial; Warehouse/Distribution

Construction and Building

Foster Wheeler Realty Services

Clinton, NJ

1

292

6,511

2.0%

CPI

Office

Business and Commercial Services

Pohjola Non-Life Insurance Company LTD

Finland

1

511

5,524

1.7%

CPI

Office

Insurance

Fiserv, Inc.

Norcross, GA

1

221

5,472

1.7%

CPI; FIXED

Land; Office

Business and Commercial Services

Tieto OYJ

Finland

2

280

5,226

1.6%

CPI

Office

Electronics

Kraft Foods Group, Inc.

Northfield, IL

1

679

5,000

1.6%

NONE

Office

Beverages, Food, and Tobacco

LTF Real Estate Company, Inc.

Canton, MI; Rochester Hills, MI

2

279

4,672

1.5%

FIXED

Other Properties

Leisure, Amusement, Entertainment

Schuler AG

Germany

1

498

4,654

1.4%

CPI

Industrial

Machinery

The New York Times Company

New York, NY

1

126

4,557

1.4%

FIXED

Office

Media: Printing and Publishing

 

GRAPHIC

Investing for the long runTM | 38

 

 

 


 

Tenants by Annualized Contractual Minimum Base Rent (Pro Rata Basis)

(Continued)

(in thousands, except number of locations and percentages) (unaudited)

 

As of June 30, 2013

 

Tenant

Location(s)

Number
of
Locations

Square
Feet

Annualized
Rent

Annualized
Rent as a
% of Total

Increase
Factor

Property Type

Industry

Dr. Pepper Snapple Group, Inc.

Houston, TX; Irving, TX

2

722

4,464

1.4%

CPI

Industrial

Beverages, Food, and Tobacco

Prefecture de Police

France

1

121

4,411

1.4%

CPI

Office

Federal, State and Local Government

Omnicom Group, Inc.

Playa Vista, CA

1

120

4,346

1.3%

CPI

Office

Business and Commercial Services

Oriental Trading Company, inc.

La Vista, NE

1

736

4,215

1.3%

CPI

Warehouse/Distribution

Consumer and Durable Goods

HP Enterprise Services, LLC

Louisville, CO

1

404

4,185

1.3%

CPI

Industrial

Telecommunications

JPMorgan Chase Bank, National Assoc.

Fort Worth, TX

1

384

4,000

1.2%

CPI

Office

Banking

24 Hour Fitness USA, Inc.

Austin, TX; Bedford, TX; Englewood, CO; Memphis, TN

4

181

3,994

1.2%

CPI; FIXED

Other Properties

Leisure, Amusement, Entertainment

Berry Plastics Corporation

Alsip, IL; Solvay, NY; Tolleson, AZ

4

941

3,993

1.2%

CPI

Industrial

Chemicals, Plastics, Rubber, and Glass

Advanced Micro Devices

Sunnyvale, CA

1

121

3,981

1.2%

CPI

Industrial

Electronics

Amylin Pharmaceuticals, Inc.

San Diego, CA

2

144

3,844

1.2%

FIXED

Office

Business and Commercial Services

Cargotec Finland OY

Finland

1

184

3,832

1.2%

CPI

Industrial; Office

Machinery

Hologic, Inc.

Bedford, MA; Danbury, CT

2

269

3,816

1.2%

CPI

Industrial

Electronics

Konica Minolta Business Solutions U.S.A., Inc.

St. Petersburg, FL

2

338

3,815

1.2%

CPI

Office

Electronics

Dick’s Sporting Goods, Inc.

Buffalo, NY; Freehold, NJ; Greenwood, IN (2)

4

341

3,378

1.1%

CPI

Retail

Retail Stores

Orbital Sciences Corporation

Chandler, AZ

1

355

3,307

1.0%

CPI

Industrial

Aerospace and Defense

Rexam Healthcare Packaging Inc.

Buffalo Grove, IL; Excelsior Springs, MO; North Versailles, PA; St. Petersburg, FL; West Lafayette, IN

5

616

3,243

1.0%

CPI

Industrial

Chemicals, Plastics, Rubber, and Glass

Shaklee Corporation

Pleasanton, CA

1

112

3,101

1.0%

FIXED

Office

Healthcare, Education and Childcare

MBM-Beef

Lewisville, TX; Orlando, FL; Rocky Mount, NC

4

556

3,077

1.0%

FIXED

Warehouse/Distribution

Beverages, Food, and Tobacco

 

GRAPHIC

Investing for the long runTM | 39

 

 

 


 

Tenants by Annualized Contractual Minimum Base Rent (Pro Rata Basis)

(Continued)

(in thousands, except number of locations and percentages) (unaudited)

 

As of June 30, 2013

 

Tenant

Location(s)

Number
of
Locations

Square
Feet

Annualized
Rent

Annualized
Rent as a
% of Total

Increase
Factor

Property Type

Industry

Tommy Hilfiger Europe B.V.

Netherlands

2

474

2,982

0.9%

CPI

Warehouse/Distribution

Textiles, Leather, and Apparel

Tower Automotive Operations USA I, LLC

Auburn, IN; Bluffton, OH; Milan, TN

3

844

2,919

0.9%

CPI

Industrial

Automobile

MediMedia USA, Inc.

Lower Makefield, PA

1

107

2,574

0.8%

FIXED

Office

Media: Printing and Publishing

SymphonyIRI Group, Inc.

Chicago, IL

1

160

2,520

0.8%

CPI

Office

Business and Commercial Services

C1000 Logistiek Vastgoed B.V.

Netherlands

6

307

2,314

0.7%

CPI

Warehouse/Distribution

Grocery

AutoZone, Inc.

AL; FL; GA; IL; LA; MO; NC; NM; SC; TN; TX

54

302

2,219

0.7%

FIXED;
NONE

Retail

Retail Stores

Google Inc.

Venice, CA

1

68

2,116

0.7%

FIXED

Office

Telecommunications

Sybron Dental Specialties, Inc.

Glendora, CA; Romulus, MI;

2

245

2,009

0.6%

CPI

Office; Industrial

Healthcare, Education and Childcare

Gestamp Alabama LLC

McCalla, AL

1

390

1,961

0.6%

CPI

Industrial

Automobile

Unisource Worldwide, Inc.

Anchorage, AK; Commerce, CA

2

456

1,926

0.6%

FIXED

Warehouse/Distribution

Forest Products and Paper

Overland Storage Inc

San Diego, CA

1

91

1,924

0.6%

FIXED

Office

Electronics

Arbella Service Company, Inc.

Quincy, MA

1

123

1,883

0.6%

FIXED

Office

Insurance

Merit Medical Systems, Inc.

South Jordan, UT

1

193

1,877

0.6%

CPI

Industrial

Healthcare, Education and Childcare

Grande Communications Networks, Inc.

Corpus Christi, TX; Odessa, TX; San Marcos, TX; Waco, TX

5

134

1,867

0.6%

CPI

Office

Telecommunications

World Color Printing (USA) Corp.

Doraville, GA

1

433

1,800

0.6%

CPI

Industrial

Media: Printing and Publishing

Pactiv Corporation

Mooresville, NC

1

385

1,800

0.6%

CPI

Industrial

Chemicals, Plastics, Rubber, and Glass

BE Aerospace, Inc.

Lenexa, KS; Winston-Salem, NC

2

404

1,769

0.6%

FIXED

Industrial; Office; Warehouse/Distribution

Aerospace and Defense

Del Monte Corporation

Mendota, IL; Plover, WI; Toppenish, WA; Yakima, WA

4

368

1,763

0.5%

CPI

Warehouse/Distribution

Beverages, Food, and Tobacco

EADS North America, Inc.

Irvine, CA

1

99

1,755

0.5%

FIXED

Office

Electronics

Eroski Sociedad Cooperativa

Spain

1

138

1,745

0.5%

CPI

Warehouse/Distribution

Grocery

 

GRAPHIC

Investing for the long runTM | 40

 

 

 


 

Tenants by Annualized Contractual Minimum Base Rent (Pro Rata Basis)

(Continued)

(in thousands, except number of locations and percentages) (unaudited)

 

As of June 30, 2013

 

Tenant

Location(s)

Number
of
Locations

Square
Feet

Annualized
Rent

Annualized
Rent as a
% of Total

Increase
Factor

Property Type

Industry

Walgreens Co.

Concord, NC; Florence, AL; Rockport, TX; Snellville, GA; Virginia Beach, VA

5

74

1,741

0.5%

NONE

Retail

Retail Stores

Kerr Corporation (CPA:15)

Bowling Green, KY; Jackson, TN

2

368

1,736

0.5%

FIXED

Industrial

Chemicals, Plastics, Rubber, and Glass

Childtime Childcare, Inc.

AZ; CA; MI; TX

12

84

1,731

0.5%

CPI

Other Properties

Healthcare, Education and Childcare

Plexus Corp.

Neenah, WI

1

179

1,699

0.5%

CPI

Industrial

Electronics

The United States Playing Card Company

Erlanger, KY

1

770

1,688

0.5%

FIXED

Warehouse/Distribution

Media: Printing and Publishing

Belgium Government

Belgium

1

122

1,636

0.5%

CPI

Office

Federal, State and Local Government

IntegraColor, Ltd.

Mesquite, TX

1

359

1,625

0.5%

CPI

Warehouse/Distribution

Media: Printing and Publishing

Others

 

76

8,950

42,889

13.3%

 

 

 

Vacant(a)

 

1

453

-

0.0%

 

 

 

Total(b) (c)

 

423

 

39,528

 

$

323,174

 

100.0%

 

 

 

 

 

 

 

(a)          Number of locations includes properties that are partially vacant.

 

(b)          Excludes all operating properties.

 

(c)         Pro rata amounts are non-GAAP measures. See the Terms and Definitions section that begins on page 42 for a description of our non-GAAP measures.

 

GRAPHIC

Investing for the long runTM | 41

 

 

 


 

Terms and Definitions

 

Non-GAAP Financial Disclosures

 

AFFO

 

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

 

We modify the NAREIT computation of FFO to include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of intangibles, deferred income tax benefits and expenses, straight-line rents, stock compensation, gains or losses from extinguishment of debt and deconsolidation of subsidiaries and unrealized foreign currency exchange gains and losses. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude expenses related to the CPA®:15 Merger and realized gain/losses on foreign exchange and derivatives which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income as they are not the primary drivers in our decision making process and excluding those items provides investors a view of our portfolio performance over time and make it more comparable to other REITs which are currently not engaged in acquisitions and mergers. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.

 

We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

 

Adjusted EBITDA

 

We believe that earnings before interest, taxes, depreciation and amortization (“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.  Adjusted EBITDA as disclosed represents EBITDA, modified to include other adjustments to GAAP net income for certain non-cash charges such as impairments and stock compensation.  Additionally, we exclude merger expenses related to the CPA®:15 Merger and the proposed merger with CPA®:16 – Global which are considered non-recurring and gain/losses in real estate, foreign exchange and derivatives which are not considered fundamental attributes of our business plans and do not affect our overall long-term operating performance.  We exclude these items from Adjusted EBITDA as they are not the primary drivers in our decision making process.  Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short term fluctuations in net income but have no impact on cash flows.  We believe that Adjusted 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. Accordingly, Adjusted EBITDA should not be considered as an alternative to net income or as an indicator of our financial performance. EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Therefore, we use EBITDA and Adjusted EBITDA as two of the measures of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.  Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

 

Adjusted Revenue

 

Adjusted revenue is a non-GAAP financial measure that represents revenues on a GAAP basis adjusted for our pro rata share of revenues from equity investments as well as the pro rata share of revenues due to noncontrolling interests. We believe that adjusted revenue is useful to investors and analysts as a supplemental measure of revenues from our core operations, and we use it to evaluate the stability of our underlying revenue streams. Adjusted revenue should not be considered as an alternative to revenues computed on a GAAP basis as a measure of our profitability. Adjusted revenue may not be comparable to similarly titled measures of other companies.

 

 

 

GRAPHIC

Investing for the long runTM | 42

 

 


 

Terms and Definitions

(Continued)

 

Adjusted G&A

 

Total Adjusted G&A is a non-GAAP financial measure that represents WPC’s general and administrative expense on a GAAP basis adjusted for both non-recurring items including merger costs and recurring items including Dealer manager fee-related expense and non-cash stock compensation expense. We believe that Adjusted G&A is useful to investors and analysts as a supplemental measure of expenses related to Total Adjusted Real Estate Revenue, and we use it to evaluate the profitability of our overall operations. Total Adjusted G&A should not be considered as an alternative to general and administrative expense computed on a GAAP basis as a measure of our profitability. Adjusted G&A may not be comparable to similarly titled measures of other companies.

 

Pro Rata Amounts

 

This supplemental package contains certain measures prepared under the pro rata consolidation method, which is not in accordance with GAAP. We refer to these non-GAAP measures as pro rata measures. We believe that these pro rata measures, including primarily “pro rata debt” and “pro rata NOI,” are useful to investors as they provide supplemental information on the nature and performance of our investments that is not easily discernible in the equivalent GAAP measures. Consistent with industry practice and as a means of procuring opportunities and sharing risk, we have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. Under the full consolidation method required under GAAP, we report 100% of the assets, liabilities, revenues and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%. Also, under GAAP, for all other jointly-owned investments, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we generally present our proportionate share, based on our economic ownership of these jointly-owned investments, of the assets, liabilities, revenues and expenses of those investments, as we use this information to evaluate our financial performance without including any ownership of the other investors. Our non-GAAP measures are not intended to be performance measures that should be regarded as alternatives to or more meaningful than, our GAAP measures.

 

Total Adjusted Real Estate Revenue

 

Total Adjusted Real Estate Revenue represents WPC and the Managed REITs, as well as Corporate Property Associates 14 Incorporated (“CPA®:14”) prior to the CPA®:14 merger with CPA®:16 – Global in 2011. We believe that presenting Total Adjusted Real Estate Revenue is useful to investors and analysts as a supplemental measure of our Real Estate segment in relation to the aggregate amount of revenues that we manage. We use this non-GAAP measure because it allows for the evaluation of revenue stability of our owned and managed investment portfolios. Total Adjusted Real Estate Revenue should not be considered as an alternative to revenues computed on a GAAP basis or as a measure of our profitability. Total Adjusted Real Estate Revenue may not be comparable to similarly titled measures of other companies.

 

 

 

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Investing for the long runTM | 43