–

Reported AFFO of $1.13 per diluted share for the fourth quarter and $3.76 per diluted share for the year ended December 31, 2012

–

Completed merger with CPA®:15 and commenced trading as a REIT on October 1, 2012

–

Structured $618 million of investments on behalf of CPA®:17 – Global in the fourth quarter and $1.0 billion for the full year

–

Increased assets under ownership and management by 17% to $14.1 billion for the full year

–

Raised annualized dividend rate to $2.64 per share in the fourth quarter, an increase of 17% versus the fourth quarter of 2011 and WPC’s 47th consecutive quarterly increase

–

Generated a total shareholder return of approximately 34% for the year ended December 31, 2012

·

Funds from operations—as adjusted (AFFO) for the fourth quarter of 2012 was $78.8 million or $1.13 per diluted share, compared to $35.2 million or $0.88 per diluted share for the fourth quarter of 2011. AFFO for the year ended December 31, 2012 was $180.6 million or $3.76 per diluted share, compared to $188.9 million or $4.71 per diluted share for 2011. The year-over-year decrease was due to non-recurring fee revenue we earned from the merger of two of our managed CPA® REITs in May 2011. Per share data for the 2012 periods reflects the issuance of 28.2 million shares in connection with our merger with CPA®:15.

·

Cash flow from operating activities for the year ended December 31, 2012 was $80.6 million, compared to $80.1 million for 2011.

·

Total revenues net of reimbursed expenses for the fourth quarter of 2012 were $128.9 million, compared to $45.6 million for the fourth quarter of 2011. Total revenues net of reimbursed expenses for the year ended December 31, 2012 were $275.8 million, compared to $263.0 million in 2011. Reimbursed expenses are excluded from total revenues because they have no impact on net income.

·

Net Income for the fourth quarter of 2012 was $15.5 million, compared to $9.1 million for the same period in 2011. For the year ended December 31, 2012, net income was $62.1 million, compared to $139.1 million for 2011.

·

For the year ended December 31, 2012, we received approximately $31.5 million in cash distributions from our equity ownership in the CPA® REITs. We also received $30 million in cash distributions for our special general partnership interest in the CPA® REITs.

·

Further information concerning AFFO, a non-GAAP supplemental performance metric, is presented in the accompanying tables and related notes.

W. P. Carey Inc. 2012 Earnings Release 8-K — 1

·

W. P. Carey’s conversion to a REIT and merger with CPA®:15 closed on September 28, 2012 and W. P. Carey Inc. commenced trading on the New York Stock Exchange as a REIT on October 1, 2012.

·

These transactions are part of a larger transformation to implement our overall business strategy of expanding real estate assets under ownership, which in turn is expected to provide a platform for future growth.

·

Through our merger with CPA®:15, we acquired a portfolio of 305 diversified net lease assets for $2.6 billion.

·

During the year we completed acquisitions totaling approximately $152 million, including the remaining interest in an existing portfolio of 12 Marriott Courtyard hotels and five Walgreens retail stores.

·

In January 2013, W. P. Carey completed a sale-leaseback with Kraft Foods Group for their Northfield, Illinois campus. The 679,000 square foot facility is home to Kraft’s corporate headquarters.

·

The W. P. Carey owned portfolio currently consists of 423 properties comprising 38.5 million square feet leased to more than 120 corporate tenants. The average lease term of the portfolio is 8.9 years and the occupancy rate is approximately 98.7%.

·

W. P. Carey is the advisor to the CPA® REITs and CWI, which had aggregate real estate assets of $7.9 billion, cash of approximately $750 million and total assets of $8.5 billion as of December 31, 2012.

·

The average occupancy rate for the 83 million square feet owned by the CPA® REITs was approximately 98.2%.

CPA®:17 – GLOBAL ACTIVITY

·

In December 2012, CPA®:17 – Global closed to new investments, having raised $2.9 billion since its initial public offering, which commenced in 2007.

·

Investment volume for CPA®:17 – Global in the fourth quarter of 2012 was approximately $618 million and $1.0 billion for the year.

·

We completed our first transaction in Japan through a $47 million acquisition of assets leased to Wanbishi Archives Co., Ltd., the largest information/document management company in Japan.

CAREY WATERMARK INVESTORS ACTIVITY

·

From the beginning of its initial public offering through February 22, 2013, our lodging-focused non-traded REIT offering has raised approximately $194 million.

·

During 2012 we invested in five hotels for a total of approximately $170 million.

DIVIDENDS

·

The W. P. Carey Board of Directors raised the quarterly cash dividend to $0.66 per share for the fourth quarter of 2012. The dividend—our 47th consecutive quarterly increase—was paid on January 15, 2013 to stockholders of record as of December 31, 2012. Over the course of the year, we increased our dividend by 17%, to an annualized rate of $2.64 per share.

W. P. Carey Inc. 2012 Earnings Release 8-K — 2

W. P. Carey Inc. 2012 Earnings Release 8-K — 3

Years Ended December 31,

2012

2011

2010

Revenues

Lease revenues:

Rental income

 $

 108,707

 $

 52,360

 $

 41,940

Interest income from direct financing leases

15,796

10,278

9,542

Total lease revenues

124,503

62,638

51,482

Asset management revenue from affiliates

56,666

66,808

76,246

Structuring revenue from affiliates

48,355

46,831

44,525

Incentive, termination and subordinated disposition revenue from affiliates

-

52,515

-

Wholesaling revenue

19,914

11,664

11,096

Reimbursed costs from affiliates

98,245

64,829

60,023

Other real estate income

26,312

22,499

17,273

373,995

327,784

260,645

Operating Expenses

General and administrative

(144,809)

(93,733)

(73,427)

Reimbursable costs

(98,245)

(64,829)

(60,023)

Depreciation and amortization

(48,790)

(24,347)

(18,309)

Property expenses

(13,041)

(10,145)

(8,009)

Other real estate expenses

(9,850)

(10,784)

(8,121)

Impairment charges

(10,467)

1,365

(1,140)

(325,202)

(202,473)

(169,029)

Other Income and Expenses

Other interest income

1,396

2,001

1,269

Income from equity investments in real estate and the Managed REITs

62,392

51,228

30,992

Gain on change in control of interests

20,744

27,859

781

Other income and (expenses)

3,402

4,578

627

Interest expense

(50,573)

(21,770)

(15,636)

37,361

63,896

18,033

Income from continuing operations before income taxes

86,154

189,207

109,649

Provision for income taxes

(6,783)

(37,214)

(25,814)

Income from continuing operations

79,371

151,993

83,835

Discontinued Operations

Income from operations of discontinued properties

922

1,366

4,897

Gain on deconsolidation of a subsidiary

-

1,008

-

(Loss) gain on sale of real estate

(5,019)

(3,391)

460

Impairment charges

(12,495)

(11,838)

(14,241)

Loss from discontinued operations, net of tax

(16,592)

(12,855)

(8,884)

Net Income

62,779

139,138

74,951

Net (income) loss attributable to noncontrolling interests

(607)

1,864

314

Less: Net income attributable to redeemable noncontrolling interest

(40)

(1,923)

(1,293)

Net Income Attributable to W. P. Carey

 $

 62,132

 $

139,079

 $

 73,972

Basic Earnings Per Share

Income from continuing operations attributable to W. P. Carey

 $

 1.65

 $

3.76

 $

 2.08

Loss from discontinued operations attributable to W. P. Carey

(0.35)

(0.32)

(0.22)

Net income attributable to W. P. Carey

 $

 1.30

 $

3.44

 $

 1.86

Diluted Earnings Per Share

Income from continuing operations attributable to W. P. Carey

 $

 1.62

 $

3.74

 $

 2.08

Loss from discontinued operations attributable to W. P. Carey

(0.34)

(0.32)

(0.22)

Net income attributable to W. P. Carey

 $

 1.28

 $

3.42

 $

 1.86

Weighted Average Shares Outstanding

Basic

47,389,460

39,819,475

39,514,746

Diluted

48,078,474

40,098,095

40,007,894

Amounts Attributable to W. P. Carey

Income from continuing operations, net of tax

 $

 78,724

 $

151,934

 $

 82,856

Loss from discontinued operations, net of tax

(16,592)

(12,855)

(8,884)

Net income attributable to W. P. Carey

 $

 62,132

 $

139,079

 $

 73,972

Years Ended December 31,

2012

2011

2010

Cash Flows — Operating Activities

Net income

$

 62,779

$

 139,138

$

 74,951

Adjustments to net income:

Depreciation and amortization, including intangible assets and deferred financing costs

55,114

29,616

24,443

(Income) loss from equity investments in real estate and the Managed REITs in excess of distributions received

(17,271)

310

(4,920)

Straight-line rent, financing lease adjustments and amortization of rent-related intangibles

2,831

(3,698)

286

Amortization of deferred revenue

(9,436)

(6,291)

-

Gain on deconsolidation of a subsidiary

-

(1,008)

-

Loss (gain) on sale of real estate

2,773

3,391

(460)

Unrealized (gain) loss on foreign currency transactions and others

(1,861)

138

300

Realized loss (gain) on foreign currency transactions and others

610

(965)

(731)

Allocation of loss to profit-sharing interest

-

-

(781)

Management and disposition income received in shares of Managed REITs

(28,477)

(73,936)

(35,235)

Gain on conversion of shares

(15)

(3,806)

-

Gain on change in control of interests

(20,794)

(27,859)

-

Impairment charges

22,962

10,473

15,381

Stock-based compensation expense

26,038

17,716

7,082

Deferred acquisition revenue received

21,059

21,546

21,204

Increase in structuring revenue receivable

(20,304)

(19,537)

(20,237)

(Decrease) increase in income taxes, net

(18,277)

244

(1,288)

Net changes in other operating assets and liabilities

2,912

(5,356)

6,422

Net Cash Provided by Operating Activities

80,643

80,116

86,417

Cash Flows — Investing Activities

Cash paid to stockholders of CPA®:15 in the Merger

(152,356)

-

-

Cash acquired in connection with the Merger

178,945

-

-

Distributions received from equity investments in real estate and the Managed REITs in excess of equity income

46,294

20,807

18,758

Capital contributions to equity investments

(726)

(2,297)

-

Purchase of interests in CPA®:16 — Global

-

(121,315)

-

Purchases of real estate and equity investments in real estate

(3,944)

(24,315)

(96,884)

Value added taxes (“VAT”) paid in connection with acquisition of real estate

-

-

(4,222)

VAT refunded in connection with acquisitions of real estate

-

5,035

-

Capital expenditures

(6,204)

(13,239)

(5,135)

Cash acquired on acquisition of subsidiaries

-

57

-

Proceeds from sale of real estate

73,204

12,516

14,591

Proceeds from sale of securities

372

818

-

Funding of short-term loans to affiliates

-

(96,000)

-

Proceeds from repayment of short-term loans to affiliates

-

96,000

-

Funds placed in escrow

(46,951)

(6,735)

(1,571)

Funds released from escrow

37,832

2,584

36,620

Net Cash Provided by (Used in) Investing Activities

126,466

(126,084)

(37,843)

Cash Flows — Financing Activities

Distributions paid

(113,867)

(85,814)

(92,591)

Contributions from noncontrolling interests

3,291

3,223

14,261

Distributions paid to noncontrolling interests

(7,314)

(7,258)

(4,360)

Contributions from profit-sharing interest

-

-

3,694

Distributions to profit-sharing interest

-

-

(693)

Purchase of noncontrolling interest

-

(7,502)

-

Purchase of treasury stock from related party

(45,270)

-

-

Scheduled payments of mortgage principal

(54,964)

(25,327)

(14,324)

Proceeds from mortgage financing

23,750

45,491

56,841

Proceeds from senior credit facility

300,000

251,410

83,250

Repayments of senior credit facility

(280,160)

(160,000)

(52,500)

Payment of financing costs

(2,557)

(7,778)

(1,204)

Funds placed in escrow

1,970

-

-

Proceeds from issuance of shares

51,644

1,488

3,724

Windfall tax benefit associated with stock-based compensation awards

10,185

2,569

2,354

Net Cash (Used in) Provided by Financing Activities

(113,292)

10,502

(1,548)

Change in Cash and Cash Equivalents During the Year

Effect of exchange rate changes on cash

790

70

(783)

Net increase (decrease) in cash and cash equivalents

94,607

(35,396)

46,243

Cash and cash equivalents, beginning of year

29,297

64,693

18,450

Cash and cash equivalents, end of year

$

 123,904

$

 29,297

$

 64,693

Three Months Ended December 31,

Years Ended December 31,

2012

2011

2012

2011

EBITDA (a)

Investment management

 $

15,824

 $

1,141

 $

23,752

 $

91,234

Real estate ownership

64,603

22,487

146,885

137,106

Total

 $

80,427

 $

23,628

 $

170,637

 $

228,340

AFFO (a)

Investment management

 $

14,116

 $

7,002

 $

21,120

 $

86,105

Real estate ownership

64,705

28,207

159,511

102,748

Total

 $

78,821

 $

35,209

 $

180,631

 $

188,853

EBITDA Per Share (Diluted) (a)

Investment management

 $

0.23

 $

0.03

 $

0.49

 $

2.28

Real estate ownership

0.93

0.56

3.06

3.41

Total

 $

1.16

 $

0.59

 $

3.55

 $

5.69

AFFO Per Share (Diluted) (a)

Investment management

 $

0.20

 $

0.17

 $

0.44

 $

2.15

Real estate ownership

0.93

0.71

3.32

2.56

Total

 $

1.13

 $

0.88

 $

3.76

 $

4.71

Three Months Ended December 31,

Years Ended December 31,

2012

2011

2012

2011

Investment Management

Net income from investment management attributable to W.P. Carey (a)

$

9,971

$

3,705

$

17,237

$

52,799

Adjustments:

Provision for income taxes

4,926

(3,540)

2,771

34,971

Depreciation and amortization

927

976

3,744

3,464

EBITDA — investment management

$

15,824

$

1,141

$

23,752

$

91,234

EBITDA per share (diluted)

$

0.23

$

0.03

$

0.49

$

2.28

Real Estate Ownership

Net income from real estate ownership attributable to W. P. Carey (a)

$

5,507

$

5,386

$

44,895

$

86,280

Adjustments:

Interest expense

28,250

6,219

50,573

21,770

Provision for income taxes

1,665

2,227

4,012

2,243

Depreciation and amortization

28,587

7,352

45,046

20,883

Reconciling items attributable to discontinued operations

594

1,303

2,359

5,930

EBITDA — real estate ownership

$

64,603

$

22,487

$

146,885

$

137,106

EBITDA per share (diluted)

$

0.93

$

0.56

$

3.06

$

3.41

Total Company

EBITDA

$

80,427

$

23,628

$

170,637

$

228,340

EBITDA per share (diluted)

$

1.16

$

0.59

$

3.55

$

5.69

Diluted weighted average shares outstanding

69,505,871

40,152,444

48,078,474

40,098,095

Three Months Ended December 31,

Years Ended December 31,

2012

2011

2012

2011

Real Estate Ownership

Net income from real estate ownership attributable to - W. P. Carey (a)

 $

 5,507

 $

 5,386

 $

 44,895

 $

 86,280

Adjustments:

Depreciation and amortization of real property

28,652

8,415

45,982

25,324

Impairment charges

10,700

5,498

22,962

10,473

Loss on sale of real estate, net

4,240

3,655

2,676

3,391

Proportionate share of adjustments to equity in net income of - partially owned entities to arrive at FFO:

Depreciation and amortization of real property

3,210

1,208

5,545

5,257

Impairment charges

-

-

-

1,090

Loss (gain) on sale of real estate, net

1

-

(15,233)

34

Proportionate share of adjustments for noncontrolling interests to arrive at FFO

(4,236)

(508)

(5,504)

(1,984)

Total adjustments:

42,567

18,268

56,428

43,585

FFO - as defined by NAREIT

48,074

23,654

101,323

129,865

Adjustments:

Loss (gain) on change in control of interests (b)(c)

60

-

(20,734)

(27,859)

Gain on deconsolidation of a subsidiary

-

-

-

(1,008)

Other gains, net

(2)

(1,118)

(2)

25

Other depreciation, amortization and non-cash charges

(1,556)

3,398

(1,662)

176

Stock based compensation

211

57

211

220

Deferred tax expense

(644)

(2,602)

(2,745)

(3,184)

Realized losses on foreign currency, derivatives and other (d)

171

-

828

-

Amortization of deferred financing costs (d)

468

-

1,843

-

Straight-line and other rent adjustments

(2,248)

(1,804)

(4,446)

(4,255)

Above/below market rent intangible lease amortization, net (d)

7,534

-

7,696

-

Merger expense (e)

1,049

-

41,338

-

Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO:

Other depreciation, amortization and non-cash charges

624

-

624

-

Straight-line and other rent adjustments

(667)

(414)

(1,468)

(1,641)

Above/below market rent intangible lease amortization, net

166

-

163

-

AFFO adjustment for interests in CPA® REITs

11,971

6,982

37,234

10,137

Proportionate share of adjustments for noncontrolling interests to arrive at AFFO

(506)

54

(692)

272

Total adjustments:

16,631

4,553

58,188

(27,117)

AFFO - Real Estate Ownership

 $

 64,705

 $

 28,207

 $

 159,511

 $

 102,748

Investment Management

Net income from investment management attributable to W. P. Carey (a)

 $

 9,971

 $

 3,705

 $

 17,237

 $

 52,799

FFO - as defined by NAREIT

9,971

3,705

17,237

52,799

Adjustments:

Amortization, deferred taxes and non-cash charges

226

(1,256)

961

3,791

Stock based compensation

6,281

4,633

25,841

17,496

Deferred tax expense

(2,625)

(80)

(24,055)

12,019

Realized gains on foreign currency, derivatives and other (d)

(55)

-

(61)

-

Amortization of deferred financing costs (d)

318

-

1,197

-

Total Adjustments

4,145

3,297

3,883

33,306

AFFO - Investment Management

 $

 14,116

 $

 7,002

 $

 21,120

 $

 86,105

Total Company

FFO - as defined by NAREIT

 $

 58,045

 $

 27,539

 $

 118,560

 $

 182,664

FFO - as defined by NAREIT per share (diluted)

 $

 0.84

 $

 0.68

 $

 2.47

 $

 4.56

AFFO

 $

 78,821

 $

 35,209

 $

 180,631

 $

 188,853

AFFO per share (diluted)

 $

 1.13

 $

 0.88

 $

 3.76

 $

 4.71

Diluted weighted average shares outstanding

69,505,871

40,152,444

48,078,474

40,098,095

Three Months Ended December 31,

Years Ended December 31,

2012

2011

2012

2011

Asset management revenue

 $

 9,578

 $

 15,530

 $

 56,666

 $

 66,808

Structuring revenue (a)

28,779

3,930

48,355

46,831

Investment management revenue

38,357

19,460

105,021

113,639

Real estate revenue

103,965

56,582

264,707

197,339

Total Adjusted Revenue

 $

 142,322

 $

 76,042

 $

 369,728

 $

 310,978

Reconciliation of Total Adjusted Revenue

Total revenue — as reported

 $

 168,058

 $

 60,971

 $

 373,995

 $

 327,784

Less: Incentive, termination and subordinated disposition revenue (b)

-

-

-

(52,515)

Less: Wholesaling revenue (c)

(8,036)

(2,876)

(19,914)

(11,664)

Less: Reimbursed costs from affiliates (c)

(39,146)

(15,345)

(98,245)

(64,829)

Add: Lease revenue – discontinued operations

738

1,908

3,630

9,452

Add: Pro rata share of revenue from equity investments

9,911

6,601

27,374

28,269

Less: Pro rata share of revenue due to noncontrolling interests

(10,289)

(436)

(11,550)

(2,629)

Add: Pro rata share of revenue from CPA® REITs

14,838

19,793

72,158

68,833

Add: Total distributions of available cash - GP interest

8,220

7,267

30,009

15,535

Less: Pro rata share of other real estate income to noncontrolling interests

(1,972)

(1,841)

(7,729)

(7,258)

Total Adjusted Revenue

 $

 142,322

 $

 76,042

 $

 369,728

 $

 310,978

Reconciliation of Real Estate Revenue

Lease revenue – as reported

 $

 74,970

 $

 17,474

 $

 124,503

 $

 62,638

Lease revenue – discontinued operations

738

1,908

3,630

9,452

Total consolidated lease revenue

75,708

19,382

128,133

72,090

Add: Pro rata share of revenue from equity investments

9,911

6,601

27,374

28,269

Less: Pro rata share of revenue due to noncontrolling interests

(10,289)

(436)

(11,550)

(2,629)

Total pro rata net lease revenue