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25-02-2012, 05:29 PM
I think W.P. Carey 2010 Chairman's Letter to Shareholders makes an interesting read.
Dear Fellow Shareholders
I founded W. P. Carey 38 years ago with a focus on creating investment opportunities that work in good times and in bad. We have stood resolute in following the same, conservative approach to risk management ever since, and that
has enabled us to weather and actually become stronger during storms that have thrown others off course.
As a fellow investor, I am sure you have come to know that our focus on generating cash flow has enabled us to increase the distributions we pay each quarter.
I hope you are as pleased as I am that W. P. Carey has again increased its quarterly cash distribution, this time to $0.512 per share for the quarter ended March 31, 2011, marking the Company’s 40th consecutive quarterly distribution increase.
That is a decade of consistently rising income: 40 quarters, 40 increases. I am particularly proud that we were able to produce these increases during one
of the most volatile economic periods in American history.
I believe that the best and most accurate metric for evaluating an investment in W.P. Carey is cumulative total shareholder returns, and for that I turn your attention to the five-year chart on the prior page. The chart shows that $100 invested on December 31,2005, with dividends reinvested, would have appreciated in five years to $177 if the money had been put in W. P. Carey & Co. common stock, compared with $116 for the FTSE NAREIT Equity REITs Index and $112 for the S&P 500 Index. Those returns equate to a 3.2% average annual increase for the NAREIT Index, 2.4% for the S&P and 15.5% for W. P. Carey.
These returns demonstrate our success in fulfilling our most important corporate mission: Investing for the Long Run. Our aim is to help our investors build
and maintain their lifestyles, and have the resources they need to meet their obligations and achieve their dreams, without constant worry about from where the
income to fund them will come.
The measurement that I watch most closely for an accurate picture of our performance is funds from operations—as adjusted (AFFO), and I am pleased to
report good progress last year. AFFO for 2010 was $130.9 million, or $3.27 per diluted share, compared with $122.9 million, or $3.09 per diluted share, for 2009. During 2010, W. P. Carey completed more than $1 billion in transactions and achieved record fundraising of nearly $600 million. I am enthusiastic about our progress in 2010, and the running start it gave us to 2011.
I am proud of our extraordinary group of officers and employees who have made all this happen. Each one believes in our philosophy of Investing for the Long Run,
and I have full confidence in their continuing success in delivering on our two primary objectives: to provide quality companies with capital to run their businesses and to create investment products that work in good times and bad.
Critical to our progress has been our constant focus on risk management, and here, diversification is key. In 2010, we structured investments on our own behalf, as
well as those of our CPA®-managed programs, totaling approximately $1.1 billion, almost double last year’s volume of $548 million. We also entered into several new
markets, including Spain, Croatia and China. At year-end 2010, the W. P. Carey group—which includes our managed funds—had more than 280 tenant obligors from across a broad spectrum of industries, who lease from us more than 950 properties in 42 states and 17 countries. With this type of diversification, I believe we are well positioned for the future.
I am often asked about the secrets of W. P. Carey’s success. This is my answer:
1. I am not on the Investment Committee. What I really mean is that management is not on the Investment Committee. That’s because management’s incentive is
to make profits, while the role of the Investment Committee is to ensure sound long-term investments. The Investment Committee is independent, and generally
no deal gets done without the Committee’s approval. The Committee ensures that we are properly diversified, our lessees are creditworthy, and the properties we purchase are critical to those lessees.
The members of the Investment Committee are an amazing group of talented people who are exceptionally well qualified to do the critical work we require: evaluating our proposed transactions and the long-term creditworthiness of our
proposed lessees. They come from the seniormost positions in top insurance company bond departments, from leading European corporations and banks, and from the most highly regarded universities. Their achievements, credentials and degrees are far too numerous to cite here, so I will simply say that I cannot envision a better-qualified—or better-performing—team to make the tough calls. The independent Investment Committee is W. P. Carey’s secret weapon.
2. Our Board of Directors is committed to doing the best job imaginable for the shareholders of W. P. Carey. We benefit greatly from their collective insight and
guidance, and I thank them for their fine work. A highlight of the year was the election of Ben Griswold as Lead Director. Ben is Partner and Chairman of Brown Advisory and former Senior Chairman of Deutsche Bank Securities Inc., and a person of great intellect and judgment.
3. Our management is exceptional. Trevor Bond, who was elected CEO in 2010, is not only highly capable but also a natural leader—a person who is easy to follow and
hard not to like. Trevor, with both his experience before joining us and his tenure on the Board of our managed programs and on the Investment Committee, is a bright,
energetic and dedicated leader for our firm. I am thrilled to have him at the helm.
4. I learned long ago that no one can excel at everything, and I resolved to surround myself with people who are smarter than I. As a result, we have an extraordinarily talented team. We are committed to making our company a place where great people want to stay and to constantly recruiting new talent to keep
our bench deep and all of us on our toes.
Financial analysts have told me that in evaluations of our company, their biggest challenge is finding comparable organizations—in fact we are unique. No
other company has the same business mix or approach. In the truest sense, our competition is any organization that supplies capital or provides investment opportunities. These providers offer a very broad spectrum of choice. And choice is
good for the economy and good for the client. At W. P. Carey, we recognize we must work to earn the loyalty of our tenants—some of them among the world’s largest
companies—by demonstrating that we excel at what we do, we are there for them in all kinds of economic conditions, and we engage only in deals that we believe to be in their best interests.
We are committed to making our nation and the global economy stronger. By its nature, our work promotes jobs and prosperity. The primary purpose of sale-leaseback financing is to provide companies more capital to invest in growing
their own businesses, performing R&D to facilitate future growth, and delivering improved returns to their shareholders.
In my own personal investing, I look for opportunities that provide steady income through good times and bad, safety, growth potential and inflation protection. We strive to achieve those same characteristics at W. P. Carey, and I hope you will agree our success record is both long and strong.
Three mottoes govern my outlook and my actions, and they have served me well. I hope you find they serve you, the shareholders of W. P. Carey, equally well.
Investing for the Long Run.
Doing Good While Doing Well.
Faites l’amour, pas la guerre.
That last one is the most recent addition, and it applies as much to my business view as to my world view. Quite simply, I am in love with our investors. I care deeply about all of our stakeholders—our lessees, our employees, our Board—but first, always first, come the investors.
Affectionately,
Wm. Polk Carey
Chairman
Vested on W.P. Carey
Dear Fellow Shareholders
I founded W. P. Carey 38 years ago with a focus on creating investment opportunities that work in good times and in bad. We have stood resolute in following the same, conservative approach to risk management ever since, and that
has enabled us to weather and actually become stronger during storms that have thrown others off course.
As a fellow investor, I am sure you have come to know that our focus on generating cash flow has enabled us to increase the distributions we pay each quarter.
I hope you are as pleased as I am that W. P. Carey has again increased its quarterly cash distribution, this time to $0.512 per share for the quarter ended March 31, 2011, marking the Company’s 40th consecutive quarterly distribution increase.
That is a decade of consistently rising income: 40 quarters, 40 increases. I am particularly proud that we were able to produce these increases during one
of the most volatile economic periods in American history.
I believe that the best and most accurate metric for evaluating an investment in W.P. Carey is cumulative total shareholder returns, and for that I turn your attention to the five-year chart on the prior page. The chart shows that $100 invested on December 31,2005, with dividends reinvested, would have appreciated in five years to $177 if the money had been put in W. P. Carey & Co. common stock, compared with $116 for the FTSE NAREIT Equity REITs Index and $112 for the S&P 500 Index. Those returns equate to a 3.2% average annual increase for the NAREIT Index, 2.4% for the S&P and 15.5% for W. P. Carey.
These returns demonstrate our success in fulfilling our most important corporate mission: Investing for the Long Run. Our aim is to help our investors build
and maintain their lifestyles, and have the resources they need to meet their obligations and achieve their dreams, without constant worry about from where the
income to fund them will come.
The measurement that I watch most closely for an accurate picture of our performance is funds from operations—as adjusted (AFFO), and I am pleased to
report good progress last year. AFFO for 2010 was $130.9 million, or $3.27 per diluted share, compared with $122.9 million, or $3.09 per diluted share, for 2009. During 2010, W. P. Carey completed more than $1 billion in transactions and achieved record fundraising of nearly $600 million. I am enthusiastic about our progress in 2010, and the running start it gave us to 2011.
I am proud of our extraordinary group of officers and employees who have made all this happen. Each one believes in our philosophy of Investing for the Long Run,
and I have full confidence in their continuing success in delivering on our two primary objectives: to provide quality companies with capital to run their businesses and to create investment products that work in good times and bad.
Critical to our progress has been our constant focus on risk management, and here, diversification is key. In 2010, we structured investments on our own behalf, as
well as those of our CPA®-managed programs, totaling approximately $1.1 billion, almost double last year’s volume of $548 million. We also entered into several new
markets, including Spain, Croatia and China. At year-end 2010, the W. P. Carey group—which includes our managed funds—had more than 280 tenant obligors from across a broad spectrum of industries, who lease from us more than 950 properties in 42 states and 17 countries. With this type of diversification, I believe we are well positioned for the future.
I am often asked about the secrets of W. P. Carey’s success. This is my answer:
1. I am not on the Investment Committee. What I really mean is that management is not on the Investment Committee. That’s because management’s incentive is
to make profits, while the role of the Investment Committee is to ensure sound long-term investments. The Investment Committee is independent, and generally
no deal gets done without the Committee’s approval. The Committee ensures that we are properly diversified, our lessees are creditworthy, and the properties we purchase are critical to those lessees.
The members of the Investment Committee are an amazing group of talented people who are exceptionally well qualified to do the critical work we require: evaluating our proposed transactions and the long-term creditworthiness of our
proposed lessees. They come from the seniormost positions in top insurance company bond departments, from leading European corporations and banks, and from the most highly regarded universities. Their achievements, credentials and degrees are far too numerous to cite here, so I will simply say that I cannot envision a better-qualified—or better-performing—team to make the tough calls. The independent Investment Committee is W. P. Carey’s secret weapon.
2. Our Board of Directors is committed to doing the best job imaginable for the shareholders of W. P. Carey. We benefit greatly from their collective insight and
guidance, and I thank them for their fine work. A highlight of the year was the election of Ben Griswold as Lead Director. Ben is Partner and Chairman of Brown Advisory and former Senior Chairman of Deutsche Bank Securities Inc., and a person of great intellect and judgment.
3. Our management is exceptional. Trevor Bond, who was elected CEO in 2010, is not only highly capable but also a natural leader—a person who is easy to follow and
hard not to like. Trevor, with both his experience before joining us and his tenure on the Board of our managed programs and on the Investment Committee, is a bright,
energetic and dedicated leader for our firm. I am thrilled to have him at the helm.
4. I learned long ago that no one can excel at everything, and I resolved to surround myself with people who are smarter than I. As a result, we have an extraordinarily talented team. We are committed to making our company a place where great people want to stay and to constantly recruiting new talent to keep
our bench deep and all of us on our toes.
Financial analysts have told me that in evaluations of our company, their biggest challenge is finding comparable organizations—in fact we are unique. No
other company has the same business mix or approach. In the truest sense, our competition is any organization that supplies capital or provides investment opportunities. These providers offer a very broad spectrum of choice. And choice is
good for the economy and good for the client. At W. P. Carey, we recognize we must work to earn the loyalty of our tenants—some of them among the world’s largest
companies—by demonstrating that we excel at what we do, we are there for them in all kinds of economic conditions, and we engage only in deals that we believe to be in their best interests.
We are committed to making our nation and the global economy stronger. By its nature, our work promotes jobs and prosperity. The primary purpose of sale-leaseback financing is to provide companies more capital to invest in growing
their own businesses, performing R&D to facilitate future growth, and delivering improved returns to their shareholders.
In my own personal investing, I look for opportunities that provide steady income through good times and bad, safety, growth potential and inflation protection. We strive to achieve those same characteristics at W. P. Carey, and I hope you will agree our success record is both long and strong.
Three mottoes govern my outlook and my actions, and they have served me well. I hope you find they serve you, the shareholders of W. P. Carey, equally well.
Investing for the Long Run.
Doing Good While Doing Well.
Faites l’amour, pas la guerre.
That last one is the most recent addition, and it applies as much to my business view as to my world view. Quite simply, I am in love with our investors. I care deeply about all of our stakeholders—our lessees, our employees, our Board—but first, always first, come the investors.
Affectionately,
Wm. Polk Carey
Chairman
Vested on W.P. Carey
Specuvestor: Asset - Business - Structure.