W. P. Carey Announces Second Quarter Financial Results

SOURCE:

W. P. Carey & Co. LLC

2008-08-07 08:15:00

W. P. Carey Announces Second Quarter Financial Results

NEW YORK, NY–(EMWNews – August 7, 2008) – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today reported financial results for the second quarter ended June 30,

2008. The Company noted that results of operations for the same period in

2007 had benefitted from the recognition of previously deferred revenue

totaling $45.9 million as a result of CPA®:16 – Global meeting its

performance hurdle in June 2007, which contributed $21.6 million to net

income.

QUARTERLY AND SIX-MONTH RESULTS


--  Total revenues net of reimbursed costs for the three and six months

    ended June 30, 2008 were $47.4 million and $94.4 million, respectively.

    Total revenues were $105.8 million and $147 million for the comparable

    periods in 2007, each of which included the $45.9 million in revenues from

    the hurdle. Reimbursed costs are excluded from total revenues because they

    have no impact on net income.

--  Net income for the three and six months ended June 30, 2008 was $19.8

    million and $36.9 million, respectively. Net income was $42 million and

    $52.8 million for the comparable periods in 2007, each of which reflected

    the $21.6 million of net income attributed to the hurdle.

--  Diluted earnings per share (EPS) for the second quarter of 2008 was

    $0.50, as compared to $1.10 for the same period in 2007. Diluted EPS for

    the six months ended June 30, 2008 was $0.93, compared to $1.37 for the

    same period in 2007.

--  Funds from operations (FFO) for the second quarter of 2008, as per the

    attached table, was $35.5 million or $0.88 per diluted share, as compared

    to $79.6 million or $1.99 per diluted share for the comparable period in

    2007. FFO for the six months ended June 30, 2008 was $57.1 million, or

    $1.42 per diluted share, as compared to $98.1 million or $2.46 per diluted

    share for the comparable period in 2007.

--  Cash flows from operating activities for the six months ended June 30,

    2008 were $27.2 million, as compared to $11.6 million in the prior year

    period.

--  The Board of Directors raised the quarterly cash distribution to

    $0.487 per share for the second quarter, which was paid on July 15, 2008 to

    shareholders of record as of June 30, 2008.

    

SUPPLEMENTAL PERFORMANCE METRICS


--  Earnings before interest, taxes, depreciation and amortization

    (EBITDA) from our investment management segment totaled $15.8 million this

    quarter or $0.39 per diluted share, compared to EBITDA in the second

    quarter of 2007 of $63.5 million or $1.59 per diluted share. For the six

    months ended June 30, 2008, EBITDA from this segment was $30.5 million, or

    $0.76 per diluted share, compared to $75.1 million, or $1.88 per diluted

    share, for the comparable period in 2007.

--  FFO from our real estate ownership segment in the second quarter of

    2008 was $20.9 million or $0.52 per diluted share, compared to $17 million

    or $0.43 per diluted share in the second quarter of 2007. For the six

    months ended June 30, 2008, FFO from this segment was $37 million, or $0.92

    per diluted share, compared to $31.7 million, or $0.80 per diluted share,

    for the comparable period in 2007.

--  For the six months ended June 30, 2008, adjusted cash flow from

    operations totaled $53.8 million, as compared to $54.9 million for the

    comparable period in 2007.

--  Further information concerning these non-GAAP supplemental performance

    metrics is presented in the accompanying tables.

    

INVESTMENT AND FUNDRAISING ACTIVITY


--  Through June 30, 2008, we have structured investments totaling $145

    million, 51% of which were international. For the comparable period in

    2007, investment volume was $660 million and included the $446 million

    Hellweg Die Profi-Baumärkte GmbH & Co. KG investment.

--  CPA®:17 - Global began fundraising this year.  Through August 5,

    2008, we have raised more than $200 million on CPA®:17 - Global's behalf.

    

GROWTH IN ASSETS UNDER MANAGEMENT


--  W. P. Carey is the advisor to the CPA® REITs, which had assets

    valued at approximately $8.6 billion as of June 30, 2008 -- an 8% increase

    as compared to June 30, 2007.

--  Since 2001, the Company's assets under management on behalf of the

    CPA® REITs have more than tripled.

--  As of June 30, 2008, the occupancy rate of our 18 million square foot

    owned portfolio was approximately 95%. In addition, for the 89 million

    square feet owned by the CPA® REITs, the occupancy rate was more than

    99%.

    

AMSTERDAM OFFICE OPEN


--  In July 2008, we opened an office in Amsterdam to establish a European

    base for the management of our CPA® REITs' growing portfolio of

    international assets. Our European assets under management currently span

    nine countries and are approaching $3 billion.

    

“Obviously, a period-to-period comparison is made difficult by the

significant revenue recognized in 2007 when CPA®:16 – Global met its

hurdle return,” said Gordon F. DuGan, President and Chief Executive

Officer. “However, on a comparable basis, we are pleased with our

performance as reflected in our adjusted cash flow from operations. This

solid performance was all the more significant because of the drop in

investment volume we experienced in the second quarter, which reflected

both unusually high investment volume in the second quarter of last year

and an unusually low investment volume of $88 million for the second

quarter of this year. We are already seeing a pickup in investment volume,

and have closed investments of $127 million thus far this quarter. In

addition, we continue to benefit from strong occupancies across our

portfolios, a terrific balance sheet and an ability to grow our business

without reliance on the public capital markets. In times of tighter credit

markets, we believe there are attractive investment opportunities for

sale-leaseback investors and we are very well-positioned today to take

advantage of them.”

UPCOMING EVENTS


--  Gordon F. DuGan will be speaking on the "Structure for Stability"

    panel at the BMO Capital Markets 2008 North American Real Estate Conference

    in Chicago on September 11, 2008.

--  Benjamin P. Harris will be speaking on the "Investment & the Capital

    Connection" panel at the CPN Net Lease Summit in New York on September 22,

    2008.

    

CONFERENCE CALL & WEBCAST

Please call at least 10 minutes prior to call to register


Time: Thursday, August 7, 2008 at 11:00 AM (ET)



Call-in Number: 1-877-407-0782

(International) +1-201-689-8567



Webcast: www.wpcarey.com/earnings



Podcast: www.wpcarey.com/podcast

Available after 2:00 PM (ET)



Replay Number: 1-877-660-6853

(International) +1-201-612-7415



Replay Access Codes: Account # 286 and Conference ID # 291647. Please note

that both access codes are required for playback. Replay Available until

August 22, 2008 at midnight ET.



W. P. Carey & Co. LLC

W. P. Carey & Co. LLC provides long-term sale-leaseback and build-to-suit

financing for companies worldwide and manages a global investment portfolio

worth more than $10 billion. Publicly traded on the New York Stock

Exchange (WPC), W. P. Carey and its CPA® series of income-generating,

non-traded REITs help companies and private equity firms release capital

tied up in real estate assets. Now in our 35th year, the W. P. Carey

Group’s real estate holdings are highly diversified, comprised of more than

850 commercial and industrial assets spanning 28 industries and 14

countries. www.wpcarey.com

Individuals interested in receiving future updates on W. P. Carey via

e-mail can register at www.wpcarey.com/alerts.

This press release contains forward-looking statements within the meaning

of the Federal securities laws. A number of factors could cause the

Company’s actual results, performance or achievement to differ materially

from those anticipated. Among those risks, trends and uncertainties are

the general economic climate; the supply of and demand for office and

industrial properties; interest rate levels; the availability of financing;

and other risks associated with the acquisition and ownership of

properties, including risks that the tenants will not pay rent, or that

costs may be greater than anticipated. For further information on factors

that could impact the Company, reference is made to the Company’s filings

with the Securities and Exchange Commission.


                        W. P. CAREY & CO. LLC



              CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

            (in thousands, except share and per share amounts)



                              Three months ended       Six months ended

                                   June 30,               June 30,

                            ----------------------  ----------------------

                               2008        2007        2008        2007

                            ----------  ----------  ----------  ----------

Revenues

Asset management revenue    $   20,039  $   30,204  $   40,165  $   45,238

Structuring revenue              3,169      53,448       6,585      58,031

Wholesaling revenue              1,488           -       2,628           -

Reimbursed costs from

 affiliates                     11,080       3,244      21,446       6,719

Lease revenues                  19,422      19,031      38,624      37,618

Other real estate income         3,305       3,113       6,427       6,115

                            ----------  ----------  ----------  ----------

                                58,503     109,040     115,875     153,721

                            ----------  ----------  ----------  ----------

Operating Expenses

General and administrative     (15,816)    (23,133)    (31,229)    (35,301)

Reimbursable costs             (11,080)     (3,244)    (21,446)     (6,719)

Depreciation and

 amortization                   (6,279)     (6,737)    (12,370)    (13,472)

Property expenses               (1,362)     (1,669)     (3,740)     (2,787)

Other real estate expenses      (2,146)     (1,301)     (4,215)     (3,825)

                            ----------  ----------  ----------  ----------

                               (36,683)    (36,084)    (73,000)    (62,104)

                            ----------  ----------  ----------  ----------

Other Income and Expenses

Other interest income              679       3,644       1,440       4,242

Income from equity

 investments in real estate

 and CPA(R) REITs                3,934       1,929       8,645       4,367

Minority interest in income       (304)     (3,129)       (393)     (3,406)

Gain on sale of securities,

 foreign currency

 transactions and other, net     1,848         169       4,659         355

Interest expense                (4,532)     (5,389)     (9,575)    (10,002)

                            ----------  ----------  ----------  ----------

                                 1,625      (2,776)      4,776      (4,444)

                            ----------  ----------  ----------  ----------

Income from continuing

 operations before income

 taxes                          23,445      70,180      47,651      87,173

Provision for income taxes      (7,422)    (31,038)    (14,566)    (37,417)

                            ----------  ----------  ----------  ----------

Income from continuing

 operations                     16,023      39,142      33,085      49,756

                            ----------  ----------  ----------  ----------

Discontinued Operations

Income from operations of

 discontinued properties         3,825       1,926       3,864       2,112

Gain on sale of real

 estate, net                         -         962           -         962

                            ----------  ----------  ----------  ----------

Income from discontinued

 operations                      3,825       2,888       3,864       3,074

                            ----------  ----------  ----------  ----------



Net Income                  $   19,848  $   42,030  $   36,949  $   52,830

                            ==========  ==========  ==========  ==========

Basic Earnings Per Share

Income from continuing

 operations                 $     0.41  $     1.02  $     0.85  $     1.31

Income from discontinued

 operations                       0.10        0.08        0.10        0.08

                            ----------  ----------  ----------  ----------

Net income                  $     0.51  $     1.10  $     0.95  $     1.39

                            ==========  ==========  ==========  ==========

Diluted Earnings Per Share

Income from continuing

 operations                 $     0.40  $     1.03  $     0.83  $     1.29

Income from discontinued

 operations                       0.10        0.07        0.10        0.08

                            ----------  ----------  ----------  ----------

Net income                  $     0.50  $     1.10  $     0.93  $     1.37

                            ==========  ==========  ==========  ==========

Weighted Average Shares

 Outstanding

Basic                       39,204,221  38,308,202  39,039,617  38,120,532

                            ==========  ==========  ==========  ==========

Diluted                     40,256,658  40,004,379  40,271,185  39,894,412

                            ==========  ==========  ==========  ==========



Distributions Declared Per

 Share                      $    0.487  $    0.467  $    0.969  $    0.929

                            ==========  ==========  ==========  ==========







                         W. P. CAREY & CO. LLC



            CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                              (in thousands)



                                                  Six months ended June 30,

                                                  ------------------------

                                                      2008         2007

                                                  -----------  -----------

Cash Flows -- Operating Activities

Net income                                        $    36,949  $    52,830

Adjustments to reconcile net income to net cash

 provided by operating activities:

   Depreciation and amortization including

    intangible assets and deferred financing

    costs                                              13,506       14,509

   Income from equity investments in real estate

    and CPA(R) REITs in excess of distributions

    received                                           (1,924)      (1,628)

   Gain on sale of real estate, net                         -         (962)

   Minority interest in income                            393        3,472

   Straight-line rent adjustments                       1,252        1,421

   Management income received in shares of

    affiliates                                        (20,053)     (31,728)

   Unrealized gain on foreign currency

    transactions, warrants and securities              (1,203)        (313)

   Realized gain on foreign currency transactions      (1,565)         (42)

   Stock-based compensation expense                     3,922        2,328

   (Increase) decrease in deferred acquisition

    revenue received                                   (3,538)      16,164

   Decrease (increase) in structuring revenue

    receivable                                         46,695      (44,956)

   (Decrease) increase in income taxes, net            (3,963)       2,802

   Decrease in settlement provision                   (29,979)           -

   Net changes in other operating assets and

    liabilities                                       (13,273)      (2,249)

                                                  -----------  -----------

Net cash provided by operating activities              27,219       11,648

                                                  -----------  -----------

Cash Flows -- Investing Activities

   Distributions received from equity investments

    in real estate and CPA(R) REITs in

    excess of equity income                             3,425       21,716

   Capital contributions to equity investments           (837)           -

   Purchases of real estate and equity

    investments in real estate                           (184)     (40,381)

   Capital expenditures                                (6,455)      (7,361)

   VAT refunded on purchase of real estate              3,189            -

   Proceeds from sales of real estate                       -        6,014

   Funds placed in escrow in connection with the

    sale of property                                        -       (3,340)

   Funds released from escrow in connection with

    the sale of property                                  636            -

   Payment of deferred acquisition revenue to

    affiliate                                            (120)        (524)

                                                  -----------  -----------

Net cash used in investing activities                    (346)     (23,876)

                                                  -----------  -----------

Cash Flows -- Financing Activities

   Distributions paid                                 (48,668)     (35,202)

   Contributions from minority interests                1,320          688

   Distributions to minority interests                 (1,329)        (942)

   Scheduled payments of mortgage principal            (4,698)      (7,719)

   Proceeds from mortgages and credit facilities      101,937      118,617

   Prepayments of mortgage principal and credit

    facilities                                        (73,729)     (68,257)

   Repayment of loan from affiliates                   (7,569)           -

   Payment of financing costs                            (370)      (1,303)

   Proceeds from issuance of shares                    12,743        3,917

   Excess tax benefits associated with

    stock-based compensation awards                       608        1,335

   Repurchase and retirement of shares                 (5,134)      (2,038)

                                                  -----------  -----------

Net cash (used in) provided by financing

 activities                                           (24,889)       9,096

                                                  -----------  -----------

Change in Cash and Cash Equivalents During the

 Period

     Effect of exchange rate changes on cash              298           74

                                                  -----------  -----------

     Net increase (decrease) in cash and cash

      equivalents                                       2,282       (3,058)

   Cash and cash equivalents, beginning of period      12,137       22,108

                                                  -----------  -----------

   Cash and cash equivalents, end of period       $    14,419  $    19,050

                                                  ===========  ===========







                         W. P. CAREY & CO. LLC



                     FINANCIAL HIGHLIGHTS (UNAUDITED)

            (in thousands, except share and per share amounts)



These financial highlights include non-GAAP financial measures, including

earnings before interest, taxes, depreciation and amortization ("EBITDA"),

funds from operations ("FFO") and adjusted cash flow from operating

activities. A description of these non-GAAP financial measures and

reconciliations to the most directly comparable GAAP measures is provided

on the following pages.



                              Three months ended       Six months ended

                                   June 30,               June 30,

                            ----------------------  ----------------------

                               2008        2007        2008        2007

                            ----------- ----------- ----------  ----------

EBITDA

Investment management       $    15,774 $    63,517 $   30,519  $   75,090

Real estate ownership            22,307      22,318     42,941      39,756

                            ----------- ----------- ----------  ----------

Total                       $    38,081 $    85,835 $   73,460  $  114,846

                            =========== =========== ==========  ==========



FFO

Investment management       $    14,664 $    62,561 $   20,125  $   66,410

Real estate ownership            20,887      17,004     36,956      31,721

                            ----------- ----------- ----------  ----------

Total                       $    35,551 $    79,565 $   57,081  $   98,131

                            =========== =========== ==========  ==========



EBITDA Per Share (Diluted)

Investment management       $      0.39 $      1.59 $     0.76  $     1.88

Real estate ownership              0.56        0.56       1.06        1.00

                            ----------- ----------- ----------  ----------

Total                       $      0.95 $      2.15 $     1.82  $     2.88

                            =========== =========== ==========  ==========



FFO Per Share (Diluted)

Investment management       $      0.36 $      1.56 $     0.50  $     1.66

Real estate ownership              0.52        0.43       0.92        0.80

                            ----------- ----------- ----------  ----------

Total                       $      0.88 $      1.99 $     1.42  $     2.46

                            =========== =========== ==========  ==========



Adjusted Cash Flow From

 Operating Activities

Adjusted cash flow                                  $   53,789  $   54,946

                                                    ==========  ==========

Adjusted cash flow per

 share (diluted)                                    $     1.34  $     1.38

                                                    ==========  ==========



Distributions declared per

 share                                              $    0.969  $    0.929

                                                    ==========  ==========

Payout ratio (distributions

 per share/adjusted cash

 flow per share)                                            72%         67%

                                                    ==========  ==========









                            W. P. CAREY & CO. LLC



            RECONCILIATION OF NET INCOME TO EBITDA (UNAUDITED)

            (in thousands, except share and per share amounts)





                              Three months ended       Six months ended

                                   June 30,               June 30,

                            ----------------------  -----------------------

                               2008        2007        2008        2007

                            ----------  ----------- ----------- -----------

Investment Management

Net income                  $    7,123  $    32,100 $    14,054 $    36,489

Adjustments:

  Provision for income

   taxes                         7,556       30,376      14,340      36,514

  Depreciation and

   amortization                  1,095        1,041       2,125       2,087

                            ----------  ----------- ----------- -----------

EBITDA - investment

 management                 $   15,774  $    63,517 $    30,519 $    75,090

                            ==========  =========== =========== ===========

EBITDA per share (diluted)  $     0.39  $      1.59 $      0.76 $      1.88

                            ==========  =========== =========== ===========



Real Estate Ownership

Net income                  $   12,725  $     9,930 $    22,895 $    16,341

Adjustments:

  Interest expense               4,532        5,389       9,575      10,002

  (Benefit from) provision

   for income taxes               (134)         662         226         903

  Depreciation and

  amortization                   5,184        5,696      10,245      11,385

  Reconciling items

   attributable to

   discontinued operations           -          641           -       1,125

                            ----------  ----------- ----------- -----------

EBITDA - real estate

 ownership                  $   22,307  $    22,318 $    42,941 $    39,756

                            ==========  =========== =========== ===========

EBITDA per share (diluted)  $     0.56  $      0.56 $      1.06 $      1.00

                            ==========  =========== =========== ===========



Total Company

EBITDA                      $   38,081  $    85,835 $    73,460 $   114,846

                            ==========  =========== =========== ===========

EBITDA per share (diluted)  $     0.95  $      2.15 $      1.82 $      2.88

                            ==========  =========== =========== ===========

Diluted weighted average

 shares outstanding         40,256,658   40,004,379  40,271,185  39,894,412

                            ==========  =========== =========== ===========



Non-GAAP Financial Disclosure

EBITDA as disclosed represents earnings before interest, taxes,

depreciation and amortization. We believe that EBITDA is a useful

supplemental measure for assessing the performance of our business

segments, although it does not represent net income that is computed in

accordance with GAAP. Accordingly, EBITDA should not be considered an

alternative for net income as an indicator of our financial performance.

EBITDA may not be comparable to similarly titled measures of other

companies.









                            W. P. CAREY & CO. LLC



  RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (FFO) (UNAUDITED)

            (in thousands, except share and per share amounts)





                              Three months ended       Six months ended

                                   June 30,               June 30,

                            ----------------------  ----------------------

                               2008        2007        2008        2007

                            ----------  ----------  ----------  ----------

Investment Management

Net income                  $    7,123  $   32,100  $   14,054  $   36,489

Amortization, deferred

 taxes and other non-cash

 charges                         4,041      28,261       1,487      25,546

FFO adjustment to earnings

 from equity investments         3,500       2,200       4,584       4,375

                            ----------  ----------  ----------  ----------

FFO -- investment

 management                 $   14,664  $   62,561  $   20,125  $   66,410

                            ==========  ==========  ==========  ==========

FFO per share (diluted)     $     0.36  $     1.56  $     0.50  $     1.66

                            ==========  ==========  ==========  ==========



Real Estate Ownership

Net income                  $   12,725  $    9,930  $   22,895  $   16,341

Gain on sale of real

 estate, net                         -        (962)          -        (962)

Depreciation, amortization

 and other non-cash charges      5,389       5,653       8,950      11,115

Straight-line and other

 rent adjustments                  659         623       1,328       1,456

FFO adjustment to earnings

 from equity investments         2,287       1,972       4,128       4,186

FFO adjustment to minority

 investees' share of

 earnings                         (173)       (212)       (345)       (415)

                            ----------  ----------  ----------  ----------

FFO -- real estate

 ownership                  $   20,887  $   17,004  $   36,956  $   31,721

                            ==========  ==========  ==========  ==========

FFO per share (diluted)     $     0.52  $     0.43  $     0.92  $     0.80

                            ==========  ==========  ==========  ==========



Total Company

FFO                         $   35,551  $   79,565  $   57,081  $   98,131

                            ==========  ==========  ==========  ==========

FFO per share (diluted)     $     0.88  $     1.99  $     1.42  $     2.46

                            ==========  ==========  ==========  ==========

Diluted weighted average

 shares outstanding         40,256,658  40,004,379  40,271,185  39,894,412

                            ==========  ==========  ==========  ==========



Non-GAAP Financial Disclosure

Funds from operations (FFO) is a non-GAAP financial measure that is

commonly used in evaluating real estate companies. Although the National

Association of Real Estate Investment Trusts (NAREIT) has published a

definition of FFO, real estate companies often modify this definition as

they seek to provide financial measures that meaningfully reflect their

operations. FFO should not be considered as an alternative to net income

as an indication of a company's operating performance or to cash flow from

operating activities as a measure of its liquidity. It should be used in

conjunction with GAAP net income. FFO disclosed by other REITs may not

be comparable to our FFO calculation.



NAREIT's definition of FFO adjusts GAAP net income to exclude depreciation

and gains/losses from the sales of properties and adjusts for FFO

applicable to unconsolidated partnerships and joint ventures. We

calculate FFO in accordance with this definition and then include other

adjustments to GAAP net income to adjust for certain non-cash charges

such as amortization of intangibles, deferred income tax benefits and

expenses, straight-line rents, stock compensation, impairment charges on

real estate and unrealized foreign currency exchange gains and losses.

We exclude these items from GAAP net income as they are not the primary

drivers in our decision making process. Our assessment of our operations

is focused on long term sustainability and not on such non-cash items

which may cause short-term fluctuations in net income but that have no

impact on cash flows.









                          W. P. CAREY & CO. LLC



         ADJUSTED CASH FLOW FROM OPERATING ACTIVITIES (UNAUDITED)

            (in thousands, except share and per share amounts)





                                                  Six months ended June 30,

                                                  ------------------------

                                                      2008         2007

                                                  -----------  -----------

Cash flow from operating activities -- as

 reported                                         $    27,219  $    11,648

Adjustments:

CPA(R):16 - Global performance adjustment, net

 (a)                                                  (12,291)      17,763

Settlement payment (b)                                 21,012            -

CPA(R):12/14 Merger -- payment of taxes (c)                 -       20,708

Distributions received from equity investments in

 real estate in excess of equity income (d)             3,223        5,435

Changes in working capital (c)                         14,626         (608)

                                                  -----------  -----------

Adjusted cash flow from operating activities      $    53,789  $    54,946

                                                  ===========  ===========

Adjusted cash flow per share (diluted)            $      1.34  $      1.38

                                                  ===========  ===========



Distributions declared per share                  $     0.969  $     0.929

                                                  ===========  ===========

Payout ratio (distributions per share/adjusted

 cash flow per share)                                      72%          67%

Diluted weighted average shares outstanding        40,271,185   39,894,412

                                                  ===========  ===========



Non-GAAP Financial Disclosure

Adjusted cash flow from operating activities is a non-GAAP financial

measure that represents cash flow from operating activities on a GAAP

basis adjusted for certain timing differences and deferrals as described

below. We believe that adjusted cash flow from operating activities is a

useful supplemental measure for assessing the cash flow generated from our

core operations and is used in evaluating distributions to shareholders.

Adjusted cash flow from operating activities should not be considered as

an alternative for cash flow from operating activities computed on a GAAP

basis as a measure of our liquidity. Adjusted cash flow from operating

activities may not be comparable to similarly titled measures of other

companies.



(a) Amounts (paid)/deferred in lieu of CPA®:16 - Global achieving its

performance criterion, net of a 45% tax provision. In determining cash flow

generated from our core operations, we believe it is more appropriate to

normalize cash flow for the impact of CPA®:16 - Global achieving its

performance criterion, rather than recognizing the entire deferred amount

in the quarter in which the performance criterion was met as this revenue

was actually earned over a three year period.



(b) In March 2008, we entered into a settlement with the SEC with respect

to all matters relating to their investigation. As a result, we paid

$29,979 in the first quarter of 2008, and recognized an offsetting

$8,967 tax benefit in the same period.



(c) Timing differences arising from the payment of certain liabilities

in a period other than that in which the expense is recognized in

determining net income may distort the actual cash flow that our core

operations generate. We adjust our GAAP cash flow from operations to

record such amounts in the period in which the liability was actually

incurred. We believe this is a fairer measure of determining our cash flow

from core operations.



(d) We take a substantial portion of our asset management revenue in

shares of the CPA® REIT funds. To the extent we receive distributions

in excess of the equity income that we recognize, we include such

amounts in our evaluation of cash flow from core operations.

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

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

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