NEW
YORK, July 28, 2023 /PRNewswire/ -- W. P.
Carey Inc. (NYSE: WPC) (W. P. Carey or the Company), a net lease
real estate investment trust, today reported its financial results
for the second quarter ended June 30, 2023.
Financial Highlights
|
2023 Second
Quarter
|
Net income
attributable to W. P. Carey (millions)
|
$144.6
|
Diluted earnings per
share
|
$0.67
|
|
|
AFFO
(millions)
|
$293.3
|
AFFO per diluted
share
|
$1.36
|
- 2023 AFFO guidance range narrowed to between $5.32 and $5.38 per
diluted share, based on anticipated full year investment volume of
between $1.75 billion and
$2.25 billion
- Quarterly cash dividend raised to $1.069 per share, equivalent to an annualized
dividend rate of $4.276 per
share
Real Estate Portfolio
- Investment volume of $938.5
million completed year to date, including $760.7 million during the second quarter
- Gross disposition proceeds of $5.5
million during the second quarter, bringing total
disposition proceeds for the first half of 2023 to $48.2 million
- Contractual same-store rent growth of 4.3%
Balance Sheet and Capitalization
- As previously announced, the Company entered into a new
three-year €500 million unsecured term loan and executed an
interest rate swap fixing the interest rate at 4.34% per annum
through the end of 2024
- Approximately $384 million in
anticipated net proceeds currently available for settlement
pursuant to forward sale agreements
MANAGEMENT COMMENTARY
"Our performance over the first half of the year continued to be
driven by the strength of our investment activity — completing
close to $1 billion of investments —
and contractual same-store rent growth that remained over 4%," said
Jason Fox, Chief Executive Officer
of W. P. Carey. "We expect further deal momentum over the
second half of the year, given the competitiveness of
sale-leasebacks as an alternative source of financing and the
investment spreads we're achieving. We're also confident in our
ability to fund our investments and other capital needs without
having to raise additional capital this year, something we view as
a distinct competitive advantage in the current environment.
Furthermore, we expect rent growth to remain elevated, reflecting
the lagged impact of CPI on rents, as well as higher fixed
increases."
QUARTERLY FINANCIAL RESULTS
Revenues
- Total Company: Revenues, including reimbursable costs,
for the 2023 second quarter totaled $452.6
million, up 31.4% from $344.4
million for the 2022 second quarter.
- Real Estate: Real Estate revenues, including
reimbursable costs, for the 2023 second quarter were $452.2 million, up 33.1% from $339.8 million for the 2022 second quarter.
-
- Lease revenues increased primarily as a result of net
investment activity, net lease properties acquired in the CPA:18
Merger and rent escalations.
- Operating property revenues increased primarily as a result of
the self-storage and other operating properties acquired in the
CPA:18 Merger, as well as the conversion of 12 hotel properties
from net lease to operating during the 2023 first quarter.
- Income from finance leases and loans receivable increased
primarily as a result of the reclassification of lease revenues
after receiving notice during the 2023 first quarter from a related
party of U-Haul of its intention to exercise its repurchase option
on a portfolio of 78 net leased self-storage properties. The
reclassification had no impact on total Real Estate revenues.
Net Income Attributable to W. P. Carey
- Net income attributable to W. P. Carey for the 2023 second
quarter was $144.6 million, up 13.2%
from $127.7 million for the 2022
second quarter. Net income from Real Estate attributable to W. P.
Carey was $144.7 million, which
increased due primarily to the impact of net investment activity
(including properties acquired in the CPA:18 Merger) and rent
escalations, partly offset by a lower gain on sale of real estate
and higher interest expense. Net loss from Investment Management
attributable to W. P. Carey was less than $0.1 million, which decreased due primarily to
the cessation of Investment Management revenues and distributions
as a result of the CPA:18 Merger.
Adjusted Funds from Operations (AFFO)
- AFFO for the 2023 second quarter was $1.36 per diluted share, up 3.8% from
$1.31 per diluted share for the 2022
second quarter, driven by the Company's Real Estate segment, which
generated AFFO of $1.36 per diluted
share, up 7.1% from $1.27 per diluted
share for the 2022 second quarter, primarily reflecting the impact
of net investment activity, rent escalations and the accretive
impact of the CPA:18 Merger, partly offset by higher interest
expense. AFFO for the 2023 second quarter also included certain
non-recurring items that largely offset one another but resulted in
lower non-reimbursed property expenses (due to the reversal of
certain property tax accruals) and higher provision for income
taxes (due to the settlement a tax audit on a portfolio of
properties in Europe). AFFO from
the Company's Investment Management segment declined due primarily
to the cessation of Investment Management revenues and
distributions as a result of the CPA:18 Merger.
Note: Further information concerning AFFO and Real Estate
AFFO, which are both non-GAAP supplemental performance metrics, is
presented in the accompanying tables and related notes.
Dividend
- On June 15, 2023, the Company
reported that its Board of Directors increased its quarterly cash
dividend to $1.069 per share,
equivalent to an annualized dividend rate of $4.28 per share. The dividend was paid on
July 14, 2023 to shareholders of
record as of June 30, 2023.
AFFO GUIDANCE
- For the 2023 full year, the Company has narrowed its guidance
range for total AFFO to between $5.32
and $5.38 per diluted share based on
the following key assumptions:
(i) investment volume of between $1.75
billion and $2.25 billion,
which is unchanged;
(ii) disposition volume of between $300 million and $400
million, which is unchanged; and
(iii) total general and administrative expenses of between
$97 million and $100 million, which is unchanged.
Note: The Company does not provide guidance on net income.
The Company only provides guidance on total AFFO and does not
provide a reconciliation of this forward-looking non-GAAP guidance
to net income due to the inherent difficulty in quantifying certain
items necessary to provide such reconciliation as a result of their
unknown effect, timing and potential significance. Examples of such
items include impairments of assets, gains and losses from sales of
assets, and depreciation and amortization from new
acquisitions.
REAL ESTATE
Investments
- Year to date, the Company completed investments totaling
$938.5 million, including
$760.7 million during the 2023 second
quarter.
- The Company currently has four capital investments and
commitments totaling $51.4 million
and construction loan funding of $45.0
million scheduled to be completed during the second half of
2023, for an aggregate total of $96.4
million.
Dispositions
- During the 2023 second quarter, the Company disposed of three
properties for gross proceeds of $5.5
million, bringing total disposition proceeds for the six
months ended June 30, 2023 to
$48.2 million.
Contractual Same-Store Rent Growth
- The Company's net lease portfolio generated contractual
same-store rent growth of 4.3% on a constant currency basis.
Composition
- As of June 30, 2023, the
Company's net lease portfolio consisted of 1,475 properties,
comprising 180 million square feet leased to 398 tenants, with a
weighted-average lease term of 11.2 years and an occupancy rate of
99.0%. In addition, the Company owned 85 self-storage operating
properties, 13 hotel operating properties and two student housing
operating properties, totaling approximately 7.8 million square
feet.
BALANCE SHEET AND CAPITALIZATION
Forward Equity
- As of June 30, 2023, the Company
had an aggregate of $384 million in
anticipated net proceeds available for settlement pursuant to
forward sale agreements.
Unsecured Term Loan
- As previously announced, on April 24,
2023, the Company entered into a new €500 million unsecured
term loan maturing on April 24, 2026
(the Term Loan), with a syndicate of 10 participating banks. The
Term Loan was drawn in full at closing and includes an accordion
feature enabling the aggregate amount to be increased up to €250
million (for a Term Loan totaling up to €750 million) subject to
approvals and the satisfaction of certain conditions. Proceeds from
the Term Loan were used for the repayment of debt, including
amounts outstanding on the Company's unsecured revolving credit
facility.
- The borrowing rate pursuant to the credit agreement is 85 basis
points over EURIBOR. In conjunction with the closing, W. P. Carey
executed a variable-to-fixed interest rate swap fixing the interest
rate at 4.34% through the end of 2024.
*
* *
* *
Supplemental Information
The Company has provided supplemental unaudited financial and
operating information regarding the 2023 second quarter and
certain prior quarters, including a description of non-GAAP
financial measures and reconciliations to GAAP measures, in a
Current Report on Form 8-K filed with the Securities and Exchange
Commission (SEC) on July 28, 2023, and made available on the
Company's website at ir.wpcarey.com/investor-relations.
*
*
* * *
Live Conference Call and Audio Webcast Scheduled for 10:00
a.m. Eastern Time
Please dial in at least 10
minutes prior to the start time.
Date/Time: Friday, July 28, 2023 at 10:00 a.m. Eastern Time
Call-in Number: 1 (877) 465-1289 (U.S.) or +1 (201) 689-8762
(international)
Live Audio Webcast and Replay: www.wpcarey.com/earnings
*
* *
* *
W. P. Carey Inc.
Celebrating its 50th anniversary, W. P. Carey ranks among the
largest net lease REITs with an enterprise value of approximately
$23 billion and a well-diversified
portfolio of high-quality, operationally critical commercial real
estate, which includes 1,475 net lease properties covering
approximately 180 million square feet and a portfolio of 85
self-storage operating properties, as of June 30, 2023. With
offices in New York, London, Amsterdam and Dallas, the company remains focused on
investing primarily in single-tenant, industrial, warehouse and
retail properties located in the U.S. and Northern and Western Europe, under long-term net leases
with built-in rent escalations.
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 Securities 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," "will be," "goals," "believe,"
"project," "expect," "anticipate," "intend," "estimate"
"opportunities," "possibility," "strategy," "maintain" or the
negative version of these words and other comparable terms. These
forward-looking statements include, but are not limited to,
statements made by Mr. Jason Fox
regarding deal momentum and our ability to fund capital needs.
These statements are based on the current expectations of our
management, and it is important to note that our 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 risks or uncertainties, like the risks related to
inflation and increased interest rates, the effects of pandemics
and global outbreaks of contagious diseases (such as the COVID-19
pandemic) and domestic or geopolitical crises, such as terrorism,
military conflict (including the ongoing conflict between
Russia and Ukraine and the global response to it), war or
the perception that hostilities may be imminent, political
instability or civil unrest, or other conflict, and those
additional risk factors discussed in reports that we have filed
with the SEC, could also have material adverse effects on our
future results, performance or achievements. 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 Part I, Item 1A. Risk
Factors in W. P. Carey's Annual Report on Form 10-K for the fiscal
year ended December 31, 2022.
Investors 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.
Institutional Investors:
Peter
Sands
1 (212) 492-1110
institutionalir@wpcarey.com
Individual Investors:
W. P. Carey Inc.
1 (212) 492-8920
ir@wpcarey.com
Press Contact:
Anna
McGrath
1 (212) 492-1166
amcgrath@wpcarey.com
*
* *
* *
W. P. CAREY
INC.
Consolidated Balance
Sheets (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Investments in real
estate:
|
|
|
|
Land, buildings and
improvements — net lease and other
|
$
13,563,837
|
|
$
13,338,857
|
Land, buildings and
improvements — operating properties
|
1,334,501
|
|
1,095,892
|
Net investments in
finance leases and loans receivable
|
1,222,439
|
|
771,761
|
In-place lease
intangible assets and other
|
2,748,013
|
|
2,659,750
|
Above-market rent
intangible assets
|
806,619
|
|
833,751
|
Investments in real
estate
|
19,675,409
|
|
18,700,011
|
Accumulated
depreciation and amortization (a)
|
(3,378,385)
|
|
(3,269,057)
|
Assets held for sale,
net
|
43,002
|
|
57,944
|
Net investments in real
estate
|
16,340,026
|
|
15,488,898
|
Equity method
investments
|
340,285
|
|
327,502
|
Cash and cash
equivalents
|
204,103
|
|
167,996
|
Other assets,
net
|
1,154,945
|
|
1,080,227
|
Goodwill
|
1,036,966
|
|
1,037,412
|
Total
assets
|
$
19,076,325
|
|
$
18,102,035
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Debt:
|
|
|
|
Senior unsecured
notes, net
|
$
5,978,294
|
|
$
5,916,400
|
Unsecured term loans,
net
|
1,113,491
|
|
552,539
|
Unsecured revolving
credit facility
|
528,705
|
|
276,392
|
Non-recourse
mortgages, net
|
995,435
|
|
1,132,417
|
Debt, net
|
8,615,925
|
|
7,877,748
|
Accounts payable,
accrued expenses and other liabilities
|
643,830
|
|
623,843
|
Below-market rent and
other intangible liabilities, net
|
157,728
|
|
184,584
|
Deferred income
taxes
|
179,449
|
|
178,959
|
Dividends
payable
|
232,461
|
|
228,257
|
Total
liabilities
|
9,829,393
|
|
9,093,391
|
|
|
|
|
Preferred stock, $0.001
par value, 50,000,000 shares authorized; none issued
|
—
|
|
—
|
Common stock, $0.001
par value, 450,000,000 shares authorized; 213,901,170 and
210,620,949
shares, respectively, issued and
outstanding
|
214
|
|
211
|
Additional paid-in
capital
|
11,959,060
|
|
11,706,836
|
Distributions in excess
of accumulated earnings
|
(2,510,816)
|
|
(2,486,633)
|
Deferred compensation
obligation
|
62,046
|
|
57,012
|
Accumulated other
comprehensive loss
|
(279,931)
|
|
(283,780)
|
Total stockholders'
equity
|
9,230,573
|
|
8,993,646
|
Noncontrolling
interests
|
16,359
|
|
14,998
|
Total
equity
|
9,246,932
|
|
9,008,644
|
Total liabilities
and equity
|
$
19,076,325
|
|
$
18,102,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes $1.8
billion and $1.7 billion of accumulated depreciation on buildings
and improvements as of June 30, 2023 and December 31,
2022, respectively, and $1.6 billion of accumulated amortization on
lease intangibles as of both June 30, 2023 and
December 31, 2022.
|
W. P. CAREY
INC.
Quarterly
Consolidated Statements of Income (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
Revenues
|
|
|
|
|
|
Real
Estate:
|
|
|
|
|
|
Lease
revenues
|
$
369,124
|
|
$
352,336
|
|
$
314,354
|
Income from
finance leases and loans receivable
|
27,311
|
|
20,755
|
|
17,778
|
Operating
property revenues
|
50,676
|
|
40,886
|
|
5,064
|
Other
lease-related income
|
5,040
|
|
13,373
|
|
2,591
|
|
452,151
|
|
427,350
|
|
339,787
|
Investment
Management:
|
|
|
|
|
|
Asset
management revenue
|
303
|
|
339
|
|
3,467
|
Reimbursable
costs from affiliates
|
124
|
|
101
|
|
1,143
|
|
427
|
|
440
|
|
4,610
|
|
452,578
|
|
427,790
|
|
344,397
|
Operating
Expenses
|
|
|
|
|
|
Depreciation and
amortization
|
143,548
|
|
156,409
|
|
115,080
|
Operating property
expenses
|
26,919
|
|
21,249
|
|
3,191
|
General and
administrative
|
24,788
|
|
26,448
|
|
20,841
|
Reimbursable tenant
costs
|
20,523
|
|
21,976
|
|
16,704
|
Stock-based
compensation expense
|
8,995
|
|
7,766
|
|
9,758
|
Property expenses,
excluding reimbursable tenant costs
|
5,371
|
|
12,772
|
|
11,851
|
Merger and other
expenses
|
1,419
|
|
24
|
|
1,984
|
Reimbursable costs
from affiliates
|
124
|
|
101
|
|
1,143
|
Impairment charges —
real estate
|
—
|
|
—
|
|
6,206
|
|
231,687
|
|
246,745
|
|
186,758
|
Other Income and
Expenses
|
|
|
|
|
|
Interest
expense
|
(75,488)
|
|
(67,196)
|
|
(46,417)
|
Non-operating income
(a)
|
4,509
|
|
4,626
|
|
5,974
|
Earnings from equity
method investments
|
4,355
|
|
5,236
|
|
7,401
|
Gain on sale of real
estate, net (b)
|
1,808
|
|
177,749
|
|
31,119
|
Other gains and
(losses) (c)
|
(1,366)
|
|
8,100
|
|
(21,746)
|
|
(66,182)
|
|
128,515
|
|
(23,669)
|
Income before income
taxes
|
154,709
|
|
309,560
|
|
133,970
|
Provision for income
taxes
|
(10,129)
|
|
(15,119)
|
|
(6,252)
|
Net
Income
|
144,580
|
|
294,441
|
|
127,718
|
Net loss (income)
attributable to noncontrolling interests
|
40
|
|
(61)
|
|
(40)
|
Net Income
Attributable to W. P. Carey
|
$
144,620
|
|
$
294,380
|
|
$
127,678
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
$
0.67
|
|
$
1.39
|
|
$
0.66
|
Diluted Earnings Per
Share
|
$
0.67
|
|
$
1.39
|
|
$
0.66
|
Weighted-Average
Shares Outstanding
|
|
|
|
|
|
Basic
|
215,075,114
|
|
211,951,930
|
|
194,019,451
|
Diluted
|
215,184,485
|
|
212,345,047
|
|
194,763,695
|
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
1.069
|
|
$
1.067
|
|
$
1.059
|
W. P. CAREY
INC.
Year-to-Date
Consolidated Statements of Income (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
Real
Estate:
|
|
|
|
Lease
revenues
|
$
721,460
|
|
$
622,079
|
Income from
finance leases and loans receivable
|
48,066
|
|
36,157
|
Operating
property revenues
|
91,562
|
|
8,929
|
Other
lease-related income
|
18,413
|
|
16,713
|
|
879,501
|
|
683,878
|
Investment
Management:
|
|
|
|
Asset
management and other revenue
|
642
|
|
6,887
|
Reimbursable
costs from affiliates
|
225
|
|
2,070
|
|
867
|
|
8,957
|
|
880,368
|
|
692,835
|
Operating
Expenses
|
|
|
|
Depreciation and
amortization
|
299,957
|
|
230,473
|
General and
administrative
|
51,236
|
|
43,925
|
Operating property
expenses
|
48,168
|
|
5,978
|
Reimbursable tenant
costs
|
42,499
|
|
33,664
|
Property expenses,
excluding reimbursable tenant costs
|
18,143
|
|
25,630
|
Stock-based
compensation expense
|
16,761
|
|
17,591
|
Merger and other
expenses
|
1,443
|
|
(338)
|
Reimbursable costs
from affiliates
|
225
|
|
2,070
|
Impairment charges —
real estate
|
—
|
|
26,385
|
|
478,432
|
|
385,378
|
Other Income and
Expenses
|
|
|
|
Gain on sale of real
estate, net
|
179,557
|
|
42,367
|
Interest
expense
|
(142,684)
|
|
(92,470)
|
Earnings from equity
method investments
|
9,591
|
|
12,173
|
Non-operating
income
|
9,135
|
|
14,520
|
Other gains and
(losses)
|
6,734
|
|
13,999
|
|
62,333
|
|
(9,411)
|
Income before income
taxes
|
464,269
|
|
298,046
|
Provision for income
taxes
|
(25,248)
|
|
(13,335)
|
Net
Income
|
439,021
|
|
284,711
|
Net income
attributable to noncontrolling interests
|
(21)
|
|
(38)
|
Net Income
Attributable to W. P. Carey
|
$
439,000
|
|
$
284,673
|
|
|
|
|
Basic Earnings Per
Share
|
$
2.06
|
|
$
1.48
|
Diluted Earnings Per
Share
|
$
2.05
|
|
$
1.47
|
Weighted-Average
Shares Outstanding
|
|
|
|
Basic
|
213,522,150
|
|
192,971,256
|
Diluted
|
213,875,471
|
|
193,706,035
|
|
|
|
|
Dividends Declared
Per Share
|
$
2.136
|
|
$
2.116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount for the three
months ended June 30, 2023 is comprised of realized gains on
foreign currency exchange derivatives of $3.7 million and interest
income on deposits of $0.8 million.
|
(b)
|
Amount for the three
months ended March 31, 2023 includes a gain on sale of real estate
of $176.2 million recognized upon a related party of a tenant's
notice of its intention to repurchase a portfolio of 78 net-lease
self-storage properties and the reclassification of the investment
to net investments in sales-type leases totaling $451.4
million.
|
(c)
|
Amount for the three
months ended June 30, 2023 is primarily comprised of net losses on
foreign currency exchange rate movements of $(1.1)
million.
|
W. P. CAREY
INC.
Quarterly
Reconciliation of Net Income to Adjusted Funds from Operations
(AFFO) (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
Net income attributable
to W. P. Carey
|
$
144,620
|
|
$
294,380
|
|
$
127,678
|
Adjustments:
|
|
|
|
|
|
Depreciation
and amortization of real property
|
142,932
|
|
155,868
|
|
114,333
|
Gain on sale of
real estate, net (a)
|
(1,808)
|
|
(177,749)
|
|
(31,119)
|
Impairment
charges — real estate
|
—
|
|
—
|
|
6,206
|
Proportionate
share of adjustments to earnings from equity method
investments (b)
|
2,883
|
|
2,606
|
|
2,934
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(268)
|
|
(299)
|
|
(4)
|
Total
adjustments
|
143,739
|
|
(19,574)
|
|
92,350
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey (d)
|
288,359
|
|
274,806
|
|
220,028
|
Adjustments:
|
|
|
|
|
|
Straight-line
and other leasing and financing adjustments
|
(19,086)
|
|
(15,050)
|
|
(14,492)
|
Stock-based
compensation
|
8,995
|
|
7,766
|
|
9,758
|
Above- and
below-market rent intangible lease amortization, net
|
8,824
|
|
10,861
|
|
10,548
|
Amortization of
deferred financing costs
|
5,904
|
|
4,940
|
|
3,147
|
Tax (benefit)
expense – deferred and other
|
(2,723)
|
|
4,366
|
|
(355)
|
Merger and
other expenses
|
1,419
|
|
24
|
|
1,984
|
Other (gains)
and losses (e)
|
1,366
|
|
(8,100)
|
|
21,746
|
Other
amortization and non-cash items
|
527
|
|
472
|
|
530
|
Proportionate
share of adjustments to earnings from equity method
investments (a)
|
(255)
|
|
(926)
|
|
1,486
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(24)
|
|
60
|
|
(6)
|
Total
adjustments
|
4,947
|
|
4,413
|
|
34,346
|
AFFO Attributable to
W. P. Carey (d)
|
$
293,306
|
|
$
279,219
|
|
$
254,374
|
|
|
|
|
|
|
Summary
|
|
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey (d)
|
$
288,359
|
|
$
274,806
|
|
$
220,028
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share
(d)
|
$
1.34
|
|
$
1.29
|
|
$
1.13
|
AFFO attributable to W.
P. Carey (d)
|
$
293,306
|
|
$
279,219
|
|
$
254,374
|
AFFO attributable to W.
P. Carey per diluted share (d)
|
$
1.36
|
|
$
1.31
|
|
$
1.31
|
Diluted
weighted-average shares outstanding
|
215,184,485
|
|
212,345,047
|
|
194,763,695
|
W. P. CAREY
INC.
Quarterly
Reconciliation of Net Income from Real Estate to Adjusted Funds
from Operations (AFFO) from Real Estate (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Three Months
Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
Net income from Real
Estate attributable to W. P. Carey
|
$
144,686
|
|
$
293,231
|
|
$
123,228
|
Adjustments:
|
|
|
|
|
|
Depreciation
and amortization of real property
|
142,932
|
|
155,868
|
|
114,333
|
Gain on sale of
real estate, net (a)
|
(1,808)
|
|
(177,749)
|
|
(31,119)
|
Impairment
charges — real estate
|
—
|
|
—
|
|
6,206
|
Proportionate
share of adjustments to earnings from equity method
investments (b)
|
2,883
|
|
2,606
|
|
2,934
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(268)
|
|
(299)
|
|
(4)
|
Total
adjustments
|
143,739
|
|
(19,574)
|
|
92,350
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey – Real Estate
(d)
|
288,425
|
|
273,657
|
|
215,578
|
Adjustments:
|
|
|
|
|
|
Straight-line
and other leasing and financing adjustments
|
(19,086)
|
|
(15,050)
|
|
(14,492)
|
Stock-based
compensation
|
8,995
|
|
7,766
|
|
9,758
|
Above- and
below-market rent intangible lease amortization, net
|
8,824
|
|
10,861
|
|
10,548
|
Amortization of
deferred financing costs
|
5,904
|
|
4,940
|
|
3,147
|
Tax (benefit)
expense – deferred and other
|
(2,723)
|
|
4,366
|
|
(324)
|
Merger and
other expenses
|
1,419
|
|
24
|
|
1,984
|
Other (gains)
and losses (e)
|
890
|
|
(7,586)
|
|
20,155
|
Other
amortization and non-cash items
|
527
|
|
472
|
|
530
|
Proportionate
share of adjustments to earnings from equity method
investments (b)
|
(255)
|
|
(926)
|
|
368
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(24)
|
|
60
|
|
(6)
|
Total
adjustments
|
4,471
|
|
4,927
|
|
31,668
|
AFFO Attributable to
W. P. Carey – Real Estate (d)
|
$
292,896
|
|
$
278,584
|
|
$
247,246
|
|
|
|
|
|
|
Summary
|
|
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey – Real Estate
(d)
|
$
288,425
|
|
$
273,657
|
|
$
215,578
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share
–
Real Estate (d)
|
$
1.34
|
|
$
1.29
|
|
$
1.11
|
AFFO attributable to W.
P. Carey – Real Estate (d)
|
$
292,896
|
|
$
278,584
|
|
$
247,246
|
AFFO attributable to W.
P. Carey per diluted share – Real Estate (d)
|
$
1.36
|
|
$
1.31
|
|
$
1.27
|
Diluted
weighted-average shares outstanding
|
215,184,485
|
|
212,345,047
|
|
194,763,695
|
W. P. CAREY
INC.
Year-to-Date
Reconciliation of Net Income to Adjusted Funds from Operations
(AFFO) (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
Net income attributable
to W. P. Carey
|
$
439,000
|
|
$
284,673
|
Adjustments:
|
|
|
|
Depreciation
and amortization of real property
|
298,800
|
|
228,979
|
Gain on sale of
real estate, net
|
(179,557)
|
|
(42,367)
|
Impairment
charges — real estate
|
—
|
|
26,385
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
5,489
|
|
10,617
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(567)
|
|
(8)
|
Total
adjustments
|
124,165
|
|
223,606
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey (d)
|
563,165
|
|
508,279
|
Adjustments:
|
|
|
|
Straight-line
and other leasing and financing adjustments
|
(34,136)
|
|
(25,339)
|
Above- and
below-market rent intangible lease amortization, net
|
19,685
|
|
21,552
|
Stock-based
compensation
|
16,761
|
|
17,591
|
Amortization of
deferred financing costs
|
10,844
|
|
6,275
|
Other (gains)
and losses
|
(6,734)
|
|
(13,999)
|
Tax expense
(benefit) – deferred and other
|
1,643
|
|
(1,597)
|
Merger and
other expenses
|
1,443
|
|
(338)
|
Other
amortization and non-cash items
|
999
|
|
1,082
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
(1,181)
|
|
(295)
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
36
|
|
(11)
|
Total
adjustments
|
9,360
|
|
4,921
|
AFFO Attributable to
W. P. Carey (d)
|
$
572,525
|
|
$
513,200
|
|
|
|
|
Summary
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey (d)
|
$
563,165
|
|
$
508,279
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share
(d)
|
$
2.63
|
|
$
2.62
|
AFFO attributable to W.
P. Carey (d)
|
$
572,525
|
|
$
513,200
|
AFFO attributable to W.
P. Carey per diluted share (d)
|
$
2.68
|
|
$
2.65
|
Diluted
weighted-average shares outstanding
|
213,875,471
|
|
193,706,035
|
W. P. CAREY
INC.
Year-to-Date
Reconciliation of Net Income from Real Estate to Adjusted Funds
from Operations (AFFO) from Real Estate (Unaudited)
(in thousands,
except share and per share amounts)
|
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
Net income from Real
Estate attributable to W. P. Carey
|
$
437,917
|
|
$
270,086
|
Adjustments:
|
|
|
|
Depreciation
and amortization of real property
|
298,800
|
|
228,979
|
Gain on sale of
real estate, net
|
(179,557)
|
|
(42,367)
|
Impairment
charges — real estate
|
—
|
|
26,385
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
5,489
|
|
10,617
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
(567)
|
|
(8)
|
Total
adjustments
|
124,165
|
|
223,606
|
FFO (as defined by
NAREIT) Attributable to W. P. Carey – Real Estate
(d)
|
562,082
|
|
493,692
|
Adjustments:
|
|
|
|
Straight-line
and other leasing and financing adjustments
|
(34,136)
|
|
(25,339)
|
Above- and
below-market rent intangible lease amortization, net
|
19,685
|
|
21,552
|
Stock-based
compensation
|
16,761
|
|
17,591
|
Amortization of
deferred financing costs
|
10,844
|
|
6,275
|
Other (gains)
and losses
|
(6,696)
|
|
(14,263)
|
Tax benefit –
deferred and other
|
1,643
|
|
(1,513)
|
Merger and
other expenses
|
1,443
|
|
(341)
|
Other
amortization and non-cash items
|
999
|
|
1,082
|
Proportionate
share of adjustments to earnings from equity method investments
(b)
|
(1,181)
|
|
535
|
Proportionate
share of adjustments for noncontrolling interests
(c)
|
36
|
|
(11)
|
Total
adjustments
|
9,398
|
|
5,568
|
AFFO Attributable to
W. P. Carey – Real Estate (d)
|
$
571,480
|
|
$
499,260
|
|
|
|
|
Summary
|
|
|
|
FFO (as defined by
NAREIT) attributable to W. P. Carey – Real Estate
(d)
|
$
562,082
|
|
$
493,692
|
FFO (as defined by
NAREIT) attributable to W. P. Carey per diluted share –
Real Estate (d)
|
$
2.63
|
|
$
2.55
|
AFFO attributable to W.
P. Carey – Real Estate (d)
|
$
571,480
|
|
$
499,260
|
AFFO attributable to W.
P. Carey per diluted share – Real Estate (d)
|
$
2.67
|
|
$
2.58
|
Diluted
weighted-average shares outstanding
|
213,875,471
|
|
193,706,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount for the three
months ended March 31, 2023 includes a gain on sale of real estate
of $176.2 million recognized upon a related party of a tenant's
notice of its intention to repurchase a portfolio of 78 net-lease
self-storage properties and the reclassification of the investment
to net investments in sales-type leases totaling $451.4
million.
|
(b)
|
Equity income,
including amounts that are not typically recognized for FFO and
AFFO, is recognized within Earnings from equity method investments
on the consolidated statements of income. This represents
adjustments to equity income to reflect FFO and AFFO on a pro rata
basis.
|
(c)
|
Adjustments
disclosed elsewhere in this reconciliation are on a consolidated
basis. This adjustment reflects our FFO or AFFO on a pro rata
basis.
|
(d)
|
FFO and AFFO are
non-GAAP measures. See below for a description of FFO and
AFFO.
|
(e)
|
AFFO and Real Estate
AFFO adjustment amounts for the three months ended June 30, 2023
are primarily comprised of net losses on foreign currency exchange
rate movements of $(1.1) million.
|
Non-GAAP Financial Disclosure
Funds from Operations (FFO) and Adjusted Funds from
Operations (AFFO)
Due to certain unique operating characteristics of real
estate companies, as discussed below, the National Association of
Real Estate Investment Trusts (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 restated in December 2018.
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 or other assets
incidental to the company's main business, gains or losses on
changes in control of interests in 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.
We also modify the NAREIT computation of FFO to adjust GAAP
net income for certain non-cash charges, such as amortization of
real estate-related intangibles, deferred income tax benefits and
expenses, straight-line rent and related reserves, other non-cash
rent adjustments, non-cash allowance for credit losses on loans
receivable and finance leases, stock-based compensation, non-cash
environmental accretion expense, amortization of discounts and
premiums on debt and amortization of deferred financing costs. 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
gains or losses from extinguishment of debt and merger and
acquisition expenses. We also exclude realized and unrealized
gains/losses on foreign currency exchange rate movements (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 to arrive at AFFO as they
are not the primary drivers in our decision-making process and
excluding these items provides investors a view of our portfolio
performance over time and makes it more comparable to other REITs
that are currently not engaged in acquisitions, mergers and
restructuring, which are not part of our normal business
operations. AFFO also reflects adjustments for unconsolidated
partnerships and jointly owned investments. 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 income computed under GAAP, or as
alternatives to net cash provided by operating activities computed
under GAAP, or as indicators of our ability to fund our cash
needs.
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SOURCE W. P. Carey Inc.