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OFFON

W. P. CAREY INC.

(WPC)
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W. P. CAREY INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

10/29/2021 | 04:13pm EST

Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also breaks down the financial results of our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations. Our Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 2020 Annual Report and subsequent reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Refer to Item 1 of the 2020 Annual Report for a description of our business.

Significant Developments

Issuance of Senior Unsecured Notes

On October 15, 2021, we completed an underwritten public offering of $350.0 million of 2.450% Senior Notes due 2032, at a price of 99.048% of par value, in our inaugural green bond offering. These 2.450% Senior Notes due 2032 have a 10.3-year term and are scheduled to mature on February 1, 2032. We intend to fully allocate an amount equal to the net proceeds from this offering to recently completed or future eligible green projects in the categories outlined in our green financing framework, which is designed to align with the International Capital Markets Association Green Bond Principles 2021 ( Note 16 ).

COVID-19

We continue to actively engage in discussions with our tenants regarding the impact of the COVID-19 pandemic on their business operations, liquidity, and financial position. Through the date of this Report, we received from tenants over 99.5% of contractual base rent that was due during the third quarter of 2021 (based on contractual minimum annualized base rent ("ABR") as of June 30, 2021). Given the ongoing uncertainty around the duration and severity of the impact of the COVID-19 pandemic, we are unable to predict the impact it will have on our tenants' continued ability to pay rent. Therefore, information provided in this Report regarding recent rent collections should not serve as an indication of expected future rent collections.

Financial Highlights

During the nine months ended September 30, 2021, we completed the following (as further described in the consolidated financial statements):

Real Estate

Investments


•We acquired 18 investments totaling $1.0 billion (  Note 4  ).
•We completed four construction projects at a cost totaling $88.2 million
(  Note 4  ).
•We entered into an agreement to fund a construction loan of approximately
$224.3 million for a retail complex in Las Vegas, Nevada. Through September 30,
2021, we funded $93.5 million (  Note 7  ).
•We committed to purchase a food production facility in Lawrence, Kansas, for
approximately $27.3 million upon completion of construction of the property,
which is expected to take place during the fourth quarter of 2021 (  Note 4  ).
•We committed to fund a build-to-suit project for a research center in
Wageningen, the Netherlands, for an aggregate amount of $29.1 million (based on
the exchange rate of the euro at September 30, 2021). We currently expect to
complete the project in the second quarter of 2022 (  Note 4  ).

Dispositions

•As part of our active capital recycling program, we disposed of 17 properties for total proceeds, net of selling costs, of $126.7 million ( Note 14 ).



                                                 W. P. Carey 9/30/2021 10-Q - 42

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

Financing and Capital Markets Transactions

•On February 25, 2021, we completed an underwritten public offering of $425.0 million of 2.250% Senior Notes due 2033, at a price of 98.722% of par value. These 2.250% Senior Notes due 2033 have a 12.1-year term and are scheduled to mature on April 1, 2033. We used the net proceeds from this offering to prepay a total of $427.5 million of non-recourse mortgage loans (including prepayment penalties totaling $31.8 million) ( Note 10 ). •On March 8, 2021, we completed an underwritten public offering of €525.0 million of 0.950% Senior Notes due 2030, at a price of 99.335% of par value, issued by our wholly owned finance subsidiary, WPC Eurobond B.V., and fully and unconditionally guaranteed by us. These 0.950% Senior Notes due 2030 have a 9.2-year term and are scheduled to mature on June 1, 2030. We used the net proceeds from this offering to redeem the €500.0 million of 2.0% Senior Notes due 2023, for which we paid a "make-whole" amount of $26.2 million (based on the exchange rate of the euro as of the date of redemption) ( Note 10 ). •On June 7, 2021, we offered 6,037,500 shares of common stock through our June 2021 Equity Forwards, for gross proceeds of approximately $454.6 million. In addition, on August 9, 2021, we offered 5,175,000 shares of common stock through our August 2021 Equity Forwards, for gross proceeds of approximately $403.7 million. During the nine months ended September 30, 2021, we settled portions of our Equity Forwards by delivering 6,535,709 shares of common stock to certain forward purchasers for net proceeds of $457.2 million. As of September 30, 2021, 7,187,500 shares remained outstanding under our Equity Forwards ( Note 12 ). •We issued 4,225,624 shares of our common stock under our ATM Program at a weighted-average price of $72.50 per share, for net proceeds of $302.5 million ( Note 12 ).


Investment Management

Assets Under Management

•As of September 30, 2021, we managed total assets of approximately $2.7 billion on behalf of CPA:18 - Global and CESH. We expect that the vast majority of our Investment Management earnings will continue to be generated from asset management fees and our ownership interests in CPA:18 - Global and CESH.

Dividends to Stockholders

We declared cash dividends totaling $3.150 per share during the nine months ended September 30, 2021, comprised of three quarterly dividends per share of $1.048, $1.050, and $1.052 ( Note 12 ).

© Edgar Online, source Glimpses

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