W. P. Carey Inc. Announces Fourth Quarter and Full Year 2015 Financial Results

NEW YORK, Feb. 25, 2016 /PRNewswire/ -- W. P. Carey Inc. WPC (W. P. Carey or the Company), a global net lease real estate investment trust, today reported its financial results for the fourth quarter and full year ended December 31, 2015.

Financial Update

• Fourth quarter net revenues of $232.4 million, comprised of net revenues from real estate ownership of $192.2 million and net revenues from the Managed Programs of $40.2 million
      
• 2015 net revenues of $859.7 million, comprised of net revenues from real estate ownership of $712.6 million and net revenues from the Managed Programs of $147.1 million
       
• Fourth quarter AFFO of $135.6 million, equivalent to $1.27 per diluted share
     
• 2015 AFFO of $531.2 million, equivalent to $4.99 per diluted share
     
• Quarterly dividend raised to $0.9646 per share, equivalent to an annualized dividend rate of $3.86 per share

Business Update

Owned Real Estate

• Completed three acquisitions totaling $145.4 million during the fourth quarter, bringing total investment volume for 2015 to $688.7 million
       
• Disposed of two properties for total proceeds of $6.7 million during the fourth quarter, bringing total dispositions for 2015 to $38.5 million
     
• Net lease portfolio occupancy of 98.8%

Investment Management

• Structured $636.9 million of investments on behalf of the Managed REITs during the fourth quarter, bringing the total for 2015 to $2.5 billion
       
• Investor capital inflows into the Managed Programs of $156.6 million during the fourth quarter, bringing the total for 2015 to $349.4 million
       
• Assets under management of $11.0 billion

Strategic

• Continuing to review a range of strategic alternatives, advised by J.P. Morgan Securities LLC

 

MANAGEMENT COMMENTARY

"For the 2015 full year, we generated AFFO of $4.99 per diluted share, up 3.7% from 2014, reflecting the growth in both our owned real estate portfolio and assets under management within our investment management business," said Mark J. DeCesaris, Chief Executive Officer of W. P. Carey. "This translated into total dividends declared during 2015 of $3.83, an increase of 3.8% over the prior year. We maintained strong dividend coverage and look to the stability of our dividend as a key metric in evaluating the Company's performance."

 

QUARTERLY FINANCIAL RESULTS

Revenues

• Total Company: Revenues excluding reimbursable costs (net revenues) for the 2015 fourth quarter totaled $232.4 million, up 11.6% from $208.2 million for the 2014 fourth quarter, due primarily to higher net revenues from real estate ownership.
     
• Real Estate Ownership: Real estate revenues excluding reimbursable tenant costs (net revenues from real estate ownership) for the 2015 fourth quarter were $192.2 million, up 19.5% from $160.8 million for the 2014 fourth quarter, due primarily to additional lease revenues from property acquisitions as well as higher lease termination income, a substantial amount of which related to one lease.
     
• Investment Management: Revenues from the Managed Programs excluding reimbursable costs (net revenues from the Managed Programs) for the 2015 fourth quarter were $40.2 million, down 15.2% from $47.4 million for the 2014 fourth quarter, due primarily to lower dealer manager fees and lower structuring revenues, which more than offset higher asset management revenue.

Adjusted Funds from Operations (AFFO)

• AFFO for the 2015 fourth quarter was $1.27 per diluted share, up 6.7% compared to $1.19 per diluted share for the 2014 fourth quarter. The increase was due primarily to (i) higher asset management fees and distributions of available cash from the Company's interests in the operating partnerships of the Managed REITs, driven by growth in assets under management within the Company's investment management business; and (ii) the positive net impact of properties acquired for the Company's owned real estate portfolio. These factors were partly offset by (i) lower structuring revenues, net of associated costs, as a result of lower investment volume on behalf of the Managed REITs; and (ii) the impact of a stronger U.S. dollar, principally relative to the euro, net of realized hedging gains.
     
• Note: Further information concerning AFFO, a non-GAAP supplemental performance metric, is presented in the accompanying tables and related notes.

Dividend

• As previously announced, on December 10, 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.9646 per share, equivalent to an annualized dividend rate of $3.86 per share. The dividend was paid on January 15, 2016 to stockholders of record as of December 31, 2015.

 

FULL YEAR FINANCIAL RESULTS

Revenues

• Total Company: Revenues excluding reimbursable costs (net revenues) for the 2015 full year totaled $859.7 million, up 14.1% from $753.4 million for the 2014 full year, due primarily to higher net revenues from real estate ownership.
     
• Real Estate Ownership: Real estate revenues excluding reimbursable tenant costs (net revenues from real estate ownership) for the 2015 full year were $712.6 million, up 14.8% from $620.5 million for the 2014 full year, due primarily to additional lease revenues from acquisitions.
     
• Investment Management: Revenues from the Managed Programs excluding reimbursable costs (net revenues from the Managed Programs) for the 2015 full year were $147.1 million, up 10.7% from $132.9 million for the 2014 full year, due primarily to higher structuring and asset management revenues, which more than offset lower dealer manager fees.

AFFO

• AFFO for the 2015 full year was $4.99 per diluted share, up 3.7% compared to $4.81 per diluted share for the 2014 full year. The increase was due primarily to (i) the positive net impact of properties acquired for the Company's owned real estate portfolio; (ii) higher asset management fees and distributions of available cash from the Company's interests in the operating partnerships of the Managed REITs, driven by growth in assets under management within the Company's investment management business; and (iii) increased structuring revenues, net of associated costs, as a result of higher investment volume on behalf of the Managed REITs. These factors were partly offset by (i) the impact of a stronger U.S. dollar, principally relative to the euro, net of realized hedging gains; and (ii) higher general and administrative expenses, due primarily to the Company's implementation of a new accounting software system.

Dividend

• Dividends declared during 2015 totaled $3.83 per share, an increase of 3.8% compared to dividends declared during 2014 of $3.69 per share.

 

OWNED REAL ESTATE PORTFOLIO

Acquisitions

• During the 2015 fourth quarter, the Company completed three investments totaling $145.4 million, bringing total investment volume for the year ended December 31, 2015 to $688.7 million, including transaction-related costs and fees.

Dispositions

• During the 2015 fourth quarter, the Company disposed of two properties as part of its capital recycling program for a total of $6.7 million, bringing total dispositions for the year ended December 31, 2015 to $38.5 million, including transaction-related costs and fees.

Composition

• As of December 31, 2015, the Company's owned real estate portfolio consisted of 869 net lease properties, comprising 90.1 million square feet leased to 222 tenants and three operating properties. As of that date, the weighted-average lease term of the net lease portfolio was 9.0 years and the occupancy rate was 98.8%.

 

INVESTMENT MANAGEMENT

• W. P. Carey is the advisor to CPA^®:17 – Global and CPA^®:18 – Global (the CPA^® REITs), Carey Watermark Investors Incorporated (CWI 1) and Carey Watermark Investors 2 Incorporated (CWI 2) (the CWI REITs, and together with the CPA^® REITs, the Managed REITs) and Carey Credit Income Fund (CCIF) (together with the Managed REITs, the Managed Programs).

Acquisitions

• During the 2015 fourth quarter, the Company structured new investments totaling $636.9 million on behalf of the Managed REITs, bringing total acquisitions for the year ended December 31, 2015 to $2.5 billion, including transaction-related costs and fees.

Assets Under Management

• As of December 31, 2015, the Managed Programs had total assets under management of approximately $11.0 billion, up 4.8% from $10.5 billion as of September 30, 2015, and up 19.6% from $9.2 billion as of December 31, 2014.

Investor Capital Inflows

• During the 2015 fourth quarter, investor capital inflows for the Managed Programs totaled $156.6 million, due primarily to inflows into CWI 2, bringing total investor capital inflows for the year ended December 31, 2015 to $349.4 million.

*     *     *     *     *

Supplemental Information

The company has provided supplemental unaudited financial and operating information regarding the 2015 fourth quarter, including a description of non-GAAP financial measures and reconciliations to GAAP measures, in a Current Report on Form 8-K filed with the SEC on February 25, 2016.

*     *     *     *     *  

Live Conference Call and Audio Webcast Scheduled for 8:30 a.m. Eastern Time
Please call to register at least 10 minutes prior to the start time.

Date/Time: Thursday, February 25, 2016 at 8:30 a.m. Eastern Time
Call-in Number: 1-844-691-1119 (US) or +1-925-392-0263 (international)
Conference ID: 42183740
Audio Webcast: www.wpcarey.com/earnings

Audio Webcast Replay

An audio replay of the call will be available at www.wpcarey.com/earnings.

*     *     *     *     *  

W. P. Carey Inc.

W. P. Carey Inc. is a leading global net lease REIT that provides long-term sale-leaseback and build-to-suit financing solutions for companies worldwide. At December 31, 2015, the Company had an enterprise value of approximately $10.4 billion. In addition to its owned portfolio of diversified global real estate, W. P. Carey manages a series of non-traded publicly registered investment programs with assets under management of approximately $11.0 billion. Its 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. Furthermore, its portfolio of long-term leases with creditworthy tenants has an established history of generating stable cash flows, enabling it to deliver consistent and rising dividend income to investors for over four decades.
www.wpcarey.com   

Cautionary Statement Concerning Forward-Looking Statements:

Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, among other things, statements regarding the intent, belief, or expectations of W. P. Carey and can be identified by the use of words such as "may," "will," "should," "would," "assume," "outlook," "seek," "plan," "believe," "expect," "anticipate," "intend," "estimate," "forecast" and other comparable terms. These forward-looking statements include, but are not limited to, the statements made by Mr. DeCesaris, as well as statements regarding our review of strategic alternatives, annualized dividends, adjusted funds from operations coverage, capital recycling and intended results thereof, and anticipated future financial and operating performance and results, including underlying assumptions and estimates of growth. These statements are based on the current expectations of the management of W. P. Carey. It is important to note that W. P. Carey's actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of W. P. Carey. Discussions of some of these other important factors and assumptions are contained in W. P. Carey's filings with the SEC and are available at the SEC's website at http://www.sec.gov, including Item 1A. Risk Factors in W. P. Carey's Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on or about February 25, 2016. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication, unless noted otherwise. Except as required under the federal securities laws and the rules and regulations of the SEC, W. P. Carey does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events.

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Disclosure

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to nor a substitute for net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly-owned investments.  Adjustments for unconsolidated partnerships and jointly-owned investments are calculated to reflect FFO. Our FFO calculation complies with NAREIT's policy described above.

We modify the NAREIT computation of FFO to include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rents, stock 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 non-core income and expenses such as merger, property acquisition and other expenses which includes costs recorded related to the CPA^®:16 merger, the restructuring of Hellweg 2, the reversal of liabilities for German real estate transfer taxes that were previously recorded in connection with the CPA^®:15 merger, and expenses related to the review of a range of strategic alternatives. We also exclude realized gains/losses on foreign exchange transactions, other than those realized on the settlement of foreign currency derivatives, which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income 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, mergers and restructuring which are not part of our normal business operations. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.

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

Institutional Investors:
Peter Sands
W. P. Carey Inc.
212-492-1110
institutionalir@wpcarey.com

Individual Investors:
W. P. Carey Inc.
212-492-8920
ir@wpcarey.com

Press Contact:
Guy Lawrence
Ross & Lawrence
212-308-3333
gblawrence@rosslawpr.com

Logo - http://photos.prnewswire.com/prnh/20130604/NY25517LOGO-b  

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/w-p-carey-inc-announces-fourth-quarter-and-full-year-2015-financial-results-300226006.html

SOURCE W. P. Carey Inc.