W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — W. P. Carey & — Merger or Acquisition (September 2012)
39 slides from W. P. Carey Inc. Reit's merger presentation, Sep 18, 2012
Slide 1: Investing for the Long Run
Exhibit 99.1 Investing for the Long Run TM September 2012
Slide 2: Disclosures
Disclosures 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 Lit
Slide 3: Investment Highlights
Investment Highlights • Largest owner/manager of triple net lease assets • Superior credit and real estate underwriting platform leveraged across various industries and property types • Stable cash flows from long-term leases to creditworthy tenants • Solid stream of fee income from $7.5 billion of
Slide 4: Background: W. P. Carey & Co. LLC
Background : W. P. Carey & Co. LLC • Founded in 1973 and publicly listed since 1998, W. P. Carey is a leading global real estate firm specializing in sale-leaseback investments of corporate-owned real estate worldwide • The Company’s REIT conversion will expand its owned real estate asset base and p
Slide 5: Our Post-Merger Business Model
Our Post-Merger Business Model Owns Manages Diversified Net Lease Portfolio CPA ® REITs and CWI • Owns $5 billion of net-leased real • Manages $7.5 billion of net-leased real estate (1) estate • Generates approximately 83% of its • Generates approximately 17% of its revenue through rental income fro
Slide 6: Investment Strategy
Investment Strategy • Generate attractive risk-adjusted returns by identifying growing companies with real estate assets globally • Create upside through lease escalations, credit improvements and real estate appreciation • Protect downside by combining credit and real estate underwriting with sophi
Slide 7: Sale-Leaseback Process
Sale-Leaseback Process • Alternative form of financing • Company sells its real estate for cash and enters into long-term lease • Long-term leases translate into steady cash flow Investing for the Long Run™| 7
Slide 8: REIT Conversion: The Next Chapter
REIT Conversion: The Next Chapter Combined Portfolio by Property Type (3) Combined company market capitalization of approximately $5 billion High-quality portfolio of premium assets • 429 properties • 39.1 million square feet (1) • High-quality tenant base • 97.6% occupancy (2) Combined Portfolio by
Slide 9: Geographically Diversified Portfolio
Geographically Diversified Portfolio Investing for the Long Run™| 9
Slide 10: Major Tenants – Established Corporate Credits
Major Tenants – Established Corporate Credits Annualized % of Top 10 Tenants – Combined Company Rent ($’000) Total Leading German Do-It-Yourself (DIY) retailer with a broad footprint across Germany and Austria $24,813 8.2% North America’s largest DIY moving and storage operator with nearly 16,000 lo
Slide 11: Stable Cash Flows from Long-Term Leases
Stable Cash Flows from Long-Term Leases Lease Maturity Schedule (Combined Company) • Average lease term of 8.9 years • Low near-term rollover: 9.5% through 2014 Investing for the Long Run™| 11
Slide 12: Internal Growth from Built-In Rent Increases
Internal Growth from Built-In Rent Increases Built-In Contractual Rent Increases (Combined Company) (1) • 99% of leases include either fixed or CPI-based rent increases or percentage rent (1) Based on annualized base rents and exchange rates as of June 30, 2012. Investing for the Long Run™| 12
Slide 13: Financial Results
Financial Results
Slide 14: Financial Highlights
Financial Highlights • Broad access to equity capital – Public – REIT conversion will likely increase liquidity and access to public capital – Private – W. P. Carey has raised $2.3 billion via CPA ®:17-Global, its latest non- traded CPA ® REIT offering (1) • Conservative capital structure – Net Debt
Slide 15: Combined Company Supports Continued Dividend Growth
Combined Company Supports Continued Dividend Growth Consistent Historical Growth Pro Forma Dividend Well Covered • W. P. Carey has increased its dividend every • Payout ratio of 68%, based on results through year since going public in 1998 June 30, 2012 and current dividend of $2.27 per share • Tran
Slide 16: Dividend is Well-Covered
Dividend is Well-Covered Funds from Operations Coverage (1) Payout Ratio 63% 51% 71% 55% 56% 63% 65% 62% 46% Note: Past performance does not guarantee future results. (1) Does not include special dividends. Investing for the Long Run™| 16
Slide 17: Five-Year Total Return Comparison
Five-Year Total Return Comparison Returns have outpaced major indices, including the S&P 500 and the FTSE NAREIT Equity REIT Index Five-Year Total Return Comparison Note: Past performance does not guarantee future results. Source: SNL Financial LC, Charlottesville, VA, 2012, www.snl.com Investing fo
Slide 18: CPA Program Performance
CPA® Program Performance Total Return as Average Annual Program Program Life % of Original IRR Total Return Investment CPA ®:1 1979-1998 237% 7.2% 7.0% CPA ®:2 1980-1998 369% 14.9% 13.2% CPA ®:3 1981-1998 408% 18.8% 15.1% CPA ®:4 1983-1998 310% 13.9% 12.2% CPA ®:5 1984-1998 210% 7.7% 8.6% CPA ®:6 19
Slide 19: Fees Earned from Asset Management
Fees Earned from Asset Management WPC earns contractual fees as Advisor to the CPA ® REITs and CWI Acquisition Fee (1) 4.5% Asset Management Fee (2) 0.5% per annum Cash flow participation (3) 10% Back-end participation 15% of gain 1) We generally receive structuring revenue of up to an average of 4.
Slide 20: Peer Analysis
Peer Analysis Price / AFFO (1) Dividend Yield (2) Weighted Average Lease Term (Yrs) Leverage (4) 3 1) Based on September 12, 2012 closing prices, pro forma AFFO of $3.72 for WPC and consensus estimates for peer group which includes NNN, O, EPR, and LXP. Source: SNL Financial 2) Based on September 12
Slide 21: Strong Pro Forma Balance Sheet
Strong Pro Forma Balance Sheet Combined Company Metrics Debt Maturity Schedule Combined Company Equity Market Capitalization $3.1 billion Total Debt $1.9 billion Total Capitalization $5.0 billion Selected Metrics Total Debt / Total Market Cap. 39% Net Debt / Total Market Cap. 34% (1) Pro Rata Adjust
Slide 22: The Transaction
The Transaction
Slide 23: Benefits of the Transaction
Benefits of the Transaction Benefits of the Merger Benefits of REIT Conversion Supports W. P. Carey’s overall strategy and Enhances W. P. Carey’s access to capital significantly grows W. P. Carey’s high-quality markets real estate asset base Creates better currency to pursue potential Substantially
Slide 24: Key Operational Metrics as of June 30, 2012
Key Operational Metrics as of June 30, 2012 LLC CPA ®: 15 WPC AFFO/MFFO ($m) (a) 135.8 115.1 256.7 Per share $3.33 $0.88 $3.72 Pro Rata Adjusted EBITDA ($m) (a) 219.2 187.0 391.4 Per share $5.37 $1.42 $5.67 Annualized Contractual Minimum 84.7 219.4 304.1 Base Rent ($m) Weighted Avg. Lease Term 6.4 9
Slide 25: Appendix
APPENDIX
Slide 26: Blue Cross and Blue Shield of Minnesota
Investment Strategy Blue Cross and Blue Shield of Minnesota Facility Type Six-building headquarters campus and two additional properties Purchase Price $169 million Location Minneapolis, Aurora and Virginia, MN • Blue Cross of Minnesota was chartered in 1933 as Minnesota's first health plan • Blue C
Slide 27: The New York Times Company
Investment Strategy The New York Times Company Facility Type Global Headquarters Purchase Price $234 million Location New York City • Constructed for approximately $500 million in 2007 • Purchased for $234 million - 40% of the appraised value of the asset • 15-year lease, initial cap rate of 10.75%,
Slide 28: C1000 B.V.
Investment Strategy C1000 B.V. Facility Type Portfolio of 6 logistics properties leased on a long-term triple net basis Purchase Price $208 million Location Netherlands • C1000 B.V. is a leading Dutch supermarket with 371 stores across the Netherlands • Portfolio of 6 logistics properties represents
Slide 29: Metro A.G.
Investment Strategy Metro A.G. Facility Type 20 cash and carry stores Purchase Price $396 million Location Throughout Italy • Lease is guaranteed by its German parent company, Metro A.G. • Metro A.G. is the world’s largest cash and carry operator and third largest retailer, with 2011 revenues totali
Slide 30: Case Study – New Lease: Google, Inc.
Case Study – New Lease Google, Inc. Venice, CA Background • Acquirer: WPC • Initial Acquisition: 1994 • Square Feet: 67,682 • Original Tenant: Omnicom Group • Omnicom Lease Expiration: 9/2010 • Annual Rent: $1.2M ($17.64 PSF) Opportunity Outcome • Landmark Frank Gehry Designed •Worked With Adjacent
Slide 31: Case Study – Opportunistic Disposition: Best Buy
Case Study – Opportunistic Disposition Best Buy Co. Inc. National Big Box Portfolio Background • Acquirer: CPA ®:14 (37%) & CPA ®:15 (63%) • Initial Acquisition: 1993 • Acquisition Cost: $46M • Square Feet: 452,348 (12 stores) • Annual Rent: $4.2M ($17.64 PSF) • Remaining Lease Term: 6.5 years Oppor
Slide 32: Case Study – Opportunistic Disposition: Médica France
Case Study – Opportunistic Disposition Médica France, S.A. Nursing Homes in France Background • Acquirer: WPC (46%) & CPA ®:15 (54%) • Initial Acquisition: 2002 • Acquisition Cost: $43.5M • Square Feet: 336,923 (6 nursing homes) • Annual Rent: $6.2M ($18.40 PSF) • Remaining Lease Term: 9.5 years Opp
Slide 33: Case Study – Strategic Disposition: Shoprite
Case Study – Strategic Disposition Shoprite Supermarkets Hudson Valley Area of NY Background • Acquirer: CPA ®:14 (44%) & CPA ®:15 (66%) • Initial Acquisition: 1992, 1993 • Acquisition Cost: $20.1M • Square Feet: 196,590 (3 grocery stores) • Annual Rent: $3.3M ($16.91 PSF) • Remaining Lease Term: ~1
Slide 34: Case Study – Early Lease Extension: Dr. Pepper Snapple
Case Study – Early Lease Extension Dr. Pepper Snapple Group Houston & Irving, TX Background • Acquirer: WPC • Initial Acquisition: 1989 • Acquisition Price: $28.4M • Original SF: 721,947 (2 Bottling Plants) • Current Expanded SF: 1.27 MSF • Annual Rent: $5.0M ($3.52 PSF) • Remaining Lease Term: 2 ye
Slide 35: W. P. Carey Inc. Consolidated AFFO
W. P. Carey Inc. Consolidated AFFO AFFO Accretion / (Dilution) Per Share Buildup W. P. Carey Inc. Consolidated AFFO 30-Jun-12 W. P. Carey Inc. Shares LLC 2012 Wtd Avg. Standalone Shares (per 10Q) (a) 40,828,646 CPA ® :15 2012 Wtd Avg. Standalone Shares (per 10Q) (b) 131,657,978 Exchange Ratio 0.2326
Slide 36: Consolidated AFFO: Footnotes
W. P. Carey Inc. Consolidated AFFO: Footnotes a) Per W. P. Carey’s Form 10-Q for the period ended June 30, 2012. b) Per CPA ®:15’s Form 10-Q for the period ended June 30, 2012. c) For a reconciliation of W. P. Carey’s Net Income for the six months ended June 30, 2012 to Funds from Operations – as Ad
Slide 37: W. P. Carey Inc. Consolidated EBITDA
W. P. Carey Inc. Consolidated EBITDA EBITDA Per Share W. P. Carey Inc. Pro Rata Adjusted EBITDA YTD Jun-12 $ / Share Cumulative YTD Jun-12 Annualized $'000, except per share data $ Amount Impact Acc / (Dil) EBITDA / Share EBITDA / Share W. P. Carey Inc. Adjusted EBITDA Calculation (a) Standalone LLC
Slide 38: Consolidated EBITDA: Footnotes
W. P. Carey Inc. Consolidated EBITDA: Footnotes a) Per W. P. Carey’s Form 8-K disclosing Supplemental Unaudited Operating and Financial Data for the period ended June 30, 2012. b) Incorporates the pro rata share of depreciation, amortization, interest and tax provision adjustments for unconsolidated
Slide 39: Consolidated EBITDA: Footnotes
W. P. Carey Inc. Consolidated EBITDA: Footnotes $'000 YTD Jun-12 Prorata Adjusted EBITDA Calculation (a) Net incomeattributable to CPA® :15 shareholders 54,458 Adjustments: Depreciation and amortization 25,054 Interest expense 37,093 Provision for Income Taxes 2,059 CPA® :15 EBITDA 118,664 (b) Propo
W. P. Carey & — Merger or Acquisition (September 2012) on 6ix