W. P. Carey Inc. Files Q2 2024 10-Q

Ticker: WPC · Form: 10-Q · Filed: 2024-07-31T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, real-estate, REIT

TL;DR

WPC Q2 10-Q is in. Check financials for REIT performance.

AI Summary

W. P. Carey Inc. filed its 10-Q for the period ending June 30, 2024. The company, a Real Estate Investment Trust, reported financial results for the second quarter and the first half of the year. Key financial data and operational details for their real estate portfolio are detailed in this filing.

Why It Matters

This filing provides investors with the latest financial performance and operational status of W. P. Carey Inc., a significant player in the real estate investment trust sector.

Risk Assessment

Risk Level: medium — Real estate investment trusts are subject to market fluctuations and interest rate sensitivity, which can impact performance.

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is the quarter ended June 30, 2024.

What is the company's Central Index Key (CIK)?

The Central Index Key for W. P. Carey Inc. is 0001025378.

When was this 10-Q filed with the SEC?

This 10-Q was filed on July 31, 2024.

What is the Standard Industrial Classification (SIC) code for W. P. Carey Inc.?

The SIC code for W. P. Carey Inc. is 6798, which corresponds to Real Estate Investment Trusts.

What is the company's primary business address?

The company's business address is One Manhattan West, 395 9th Avenue, 58th Floor, New York, NY 10001.

Filing Stats: 4,584 words · 18 min read · ~15 pages · Grade level 14.6 · Accepted 2024-07-31 16:06:08

Key Financial Figures

Filing Documents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets as of June 30 , 2024 and December 31, 2023 3 Consolidated Statements of Income for the Three and Six Months Ended June 30 , 2024 and 2023 4 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30 , 2024 and 2023 5 Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2024 and 2023 6 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 36

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 56

Controls and Procedures

Item 4. Controls and Procedures 58

— OTHER INFORMATION

PART II — OTHER INFORMATION

Exhibits

Item 6. Exhibits 59

Signatures

Signatures 60 W. P. Carey 6/30/2024 10-Q – 1

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report on Form 10-Q (this "Report"), including Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of Part I of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. These forward-looking statements include, but are not limited to, statements regarding: the NLOP Spin-Off (as defined herein); our expectations surrounding the impact of the broader macroeconomic environment and the ability of tenants to pay rent; our financial condition, liquidity, results of operations, and prospects; our future capital expenditure and leverage levels, debt service obligations, and plans to fund our liquidity needs; prospective statements regarding our access to the capital markets, including our "at-the-market" program ("ATM Program"); statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust ("REIT"); and the impact of recently issued accounting pronouncements and other regulatory activity. These statements are based on the current expectations of our management. 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 these forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to fluctuating interest rates, the impact of inflation on our tenants and us, the effects of pandemics and global outbreaks of contagious diseases, and domestic or geopolitical crises, such as terrorism, military conflict, war or

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. W. P. CAREY INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) June 30, 2024 December 31, 2023 Assets Investments in real estate: Land, buildings and improvements — net lease and other $ 12,341,979 $ 12,095,458 Land, buildings and improvements — operating properties 1,238,340 1,256,249 Net investments in finance leases and loans receivable 667,667 1,514,923 In-place lease intangible assets and other 2,256,793 2,308,853 Above-market rent intangible assets 676,666 706,773 Investments in real estate 17,181,445 17,882,256 Accumulated depreciation and amortization ( 3,096,516 ) ( 3,005,479 ) Assets held for sale, net 7,743 37,122 Net investments in real estate 14,092,672 14,913,899 Equity method investments 356,220 354,261 Cash and cash equivalents 1,085,967 633,860 Other assets, net 1,261,222 1,096,474 Goodwill 973,204 978,289 Total assets (a) $ 17,769,285 $ 17,976,783 Liabilities and Equity Debt: Senior unsecured notes, net $ 6,519,887 $ 6,035,686 Unsecured term loans, net 1,100,356 1,125,564 Unsecured revolving credit facility 15,005 403,785 Non-recourse mortgages, net 467,200 579,147 Debt, net 8,102,448 8,144,182 Accounts payable, accrued expenses and other liabilities 548,397 615,750 Below-market rent intangible liabilities, net 128,710 136,872 Deferred income taxes 155,716 180,650 Dividends payable 194,515 192,332 Total liabilities (a) 9,129,786 9,269,786 Commitments and contingencies ( Note 11 ) Preferred stock, $ 0.001 par value, 50,000,000 shares authorized; none issued — — Common stock, $ 0.001 par value, 450,000,000 shares authorized; 218,831,869 and 218,671,874 shares, respectively, issued and outstanding 219 219 Additional paid-in capital 11,782,157 11,784,461 Distributions in excess of accumulated earnings ( 2,975,236 ) ( 2,891,424 ) Deferred compensation obligation 78,379 62,046 Accumulated other comprehensive loss ( 252,640 ) ( 254,867

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Business and Organization W. P. Carey Inc. ("W. P. Carey") is a REIT that, together with our consolidated subsidiaries, invests primarily in operationally-critical, single-tenant commercial real estate properties located in the United States and Northern and Western Europe that are leased on a long-term basis. We earn revenue principally by leasing the properties we own to companies on a triple-net lease basis, which generally requires each tenant to pay the costs associated with operating and maintaining the property. Founded in 1973, our shares of common stock are listed on the New York Stock Exchange under the symbol "WPC." We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. As a REIT, we are not subject to federal income taxes on income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We also own real property in jurisdictions outside the United States through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. In September 2023, we announced a plan to exit the office assets within our portfolio by (i) spinning off 59 office properties into Net Lease Office Properties ("NLOP"), so that it became a separate publicly-traded real estate investment trust (the "Spin-Off"), and (ii) implementing an asset sale program to dispose of certain office properties retained by us (the "Office Sale Program"), which is substantially completed. On November 1, 2023, we completed the Spin-Off, contributing 59 office properties to NLOP. Following the closing of the Spin-Off, NLOP operates as a separate publicly-traded REIT, which we externally manage pursuant to certain advisory agreements (the "NLOP Advisory Agreements

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 2. Basis of Presentation Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a complete statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States ("GAAP"). In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair presentation of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2023, which are included in the 2023 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. When we obtain an economic interest in an entit

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) At June 30, 2024 and December 31, 2023, our five and six unconsolidated VIEs, respectively, included our interests in (i) three unconsolidated real esta

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