PART I — FINANCIAL INFORMATION Item 1. Financial Statements W. P. Carey Inc.'s unaudited consolidated financial statements for Q2 and H1 2025 and 2024 are presented, covering Balance Sheets, Income, Comprehensive Income, Equity, Cash Flows, and detailed notes Consolidated Balance Sheets Total assets increased to approximately $18.0 billion as of June 30, 2025, from $17.5 billion at year-end 2024, driven by net real estate investments, with total debt rising to $8.6 billion from $8.0 billion Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $17,998,197 | $17,535,024 | | Net investments in real estate | $15,340,146 | $14,580,475 | | Cash and cash equivalents | $244,831 | $640,373 | | Total Liabilities | $9,772,865 | $9,100,900 | | Debt, net | $8,635,985 | $8,039,002 | | Total Equity | $8,225,332 | $8,434,124 | Consolidated Statements of Income Q2 2025 total revenues increased to $430.8 million, but Net Income Attributable to W. P. Carey significantly decreased to $51.2 million (or $0.23 per diluted share) from $142.9 million (or $0.65 per diluted share), primarily due to higher other losses Q2 and H1 2025 vs 2024 Income Statement Highlights (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $430,777 | $389,672 | $840,635 | $779,470 | | Net Income Attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | Diluted Earnings Per Share | $0.23 | $0.65 | $0.80 | $1.37 | Consolidated Statements of Cash Flows For H1 2025, net cash from operating activities decreased significantly to $677.2 million from $1.26 billion in H1 2024, mainly due to lower proceeds from sales-type leases, with investing activities using $541.8 million and financing activities using $420.3 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $677,196 | $1,256,595 | | Net Cash Used in Investing Activities | ($541,846) | ($387,164) | | Net Cash Used in Financing Activities | ($420,252) | ($318,016) | | Net (decrease) increase in cash | ($264,552) | $537,699 | Notes to Consolidated Financial Statements The notes detail accounting policies and financial activities, covering business organization, real estate acquisitions and dispositions, finance receivables, debt structure, fair value measurements, and subsequent events - The company operates as a single reportable segment, investing in operationally-critical, single-tenant commercial real estate properties, primarily under long-term, triple-net leases34 - During the first six months of 2025, the company acquired 81 properties for total capitalized costs of $542.7 million6365 - In the first six months of 2025, the company sold 55 properties for net proceeds of $487.3 million, recognizing a net gain of $96.6 million182 - Subsequent to the quarter end, in July 2025, the company completed four acquisitions totaling $227.2 million and issued $400.0 million of 4.650% Senior Notes due 2030185186 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting significant developments, consolidated results, and a detailed portfolio overview, covering revenue and expense drivers, liquidity, capital resources, and non-GAAP AFFO reconciliation Significant Developments In H1 2025, the company actively managed capital and balance sheet, acquiring $800.6 million in investments, disposing of 55 properties for $487.3 million, repaying $450 million in senior notes, and refinancing a €500.0 million term loan - Key activities for the first six months of 2025 include: acquired ten investments totaling $800.6 million; disposed of 55 properties for net proceeds of $487.3 million; repaid $450 million of 4.000% Senior Notes due 2025 at maturity; and refinanced a €500.0 million term loan, extending maturity to April 2029195192196 Consolidated Results Total revenues increased in Q2 and H1 2025 due to net investment activity and rent escalations, but Net Income decreased significantly from non-cash unrealized losses, while Adjusted Funds from Operations (AFFO) increased, reflecting core operational growth Consolidated Results Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $430,777 | $389,672 | $840,635 | $779,470 | | Net income attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | AFFO attributable to W. P. Carey | $282,670 | $257,099 | $540,490 | $508,991 | - The decrease in Net Income was primarily due to non-cash unrealized losses on the company's investment in shares of Lineage, higher losses from foreign debt remeasurement, and a higher allowance for credit losses200 - The increase in AFFO was driven by the accretive impact of net investment activity, rent escalations, and leasing activity201 Portfolio Overview As of June 30, 2025, the portfolio comprised 1,600 net-leased and 72 operating properties, with 98.2% occupancy for net-leased assets, diversified geographically and by property type, with 60.2% of ABR from the U.S. and industrial/warehouse as largest types Portfolio Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of net-leased properties | 1,600 | | Occupancy (net-leased) | 98.2% | | Weighted-average lease term | 12.1 years | | ABR (in thousands) | $1,469,552 | - The top ten tenants represent 19.4% of total ABR, with the largest tenant, Extra Space Storage, Inc., accounting for 2.7%206 Portfolio Diversification by Property Type (by ABR) | Property Type | ABR Percent | | :--- | :--- | | Industrial | 37.7% | | Warehouse | 26.2% | | Retail | 22.3% | | Other | 13.8% | Results of Operations Lease revenues increased from acquisitions and rent escalations, while 'Other Gains and (Losses)' shifted to a significant loss due to a $69.0 million non-cash unrealized equity investment loss and foreign currency movements, and interest expense rose slightly from higher debt balances - Lease revenues from existing net-leased properties increased by $18.6 million in Q2 2025 and $36.2 million in H1 2025 compared to the prior year, primarily due to contractual rent escalations and positive leasing activity221222 - Other gains and (losses) shifted from a $2.5 million gain in Q2 2024 to a $148.8 million loss in Q2 2025, mainly caused by a $69.0 million non-cash unrealized loss on the investment in Lineage Logistics and a $66.4 million loss on foreign currency exchange rate movements247 - Interest expense increased by $6.6 million for the first six months of 2025 compared to 2024, driven by higher outstanding debt balances, partially offset by lower rates on certain term loans248 Liquidity and Capital Resources The company maintains strong liquidity with $244.8 million cash, $1.3 billion available credit, and $135.2 million for 1031 exchanges as of June 30, 2025, with 89% fixed-rate debt; future cash needs are funded through operations, dispositions, and capital markets - As of June 30, 2025, the company's primary cash resources included: Cash and cash equivalents: $244.8 million; Funds for 1031 Exchange transactions: $135.2 million; Available capacity on Unsecured Revolving Credit Facility: ~$1.3 billion267 Debt Composition as of June 30, 2025 | Debt Type | Percent of Total Debt | Weighted-Average Interest Rate | | :--- | :--- | :--- | | Fixed rate | 89% | 3.0% | | Variable rate | 11% | 4.3% | | Total debt | 100% | 3.2% | - Net cash from operating activities decreased by $579.4 million in H1 2025 compared to H1 2024, mainly due to lower proceeds from sales of net investments in sales-type leases259 Supplemental Financial Measures This section defines and reconciles non-GAAP FFO and AFFO to GAAP Net Income, used by management to evaluate operating performance, with Q2 2025 AFFO at $282.7 million, an increase from Q2 2024 Reconciliation of Net Income to FFO and AFFO (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | FFO (as defined by NAREIT) | $124,824 | $259,038 | $344,227 | $523,775 | | AFFO attributable to W. P. Carey | $282,670 | $257,099 | $540,490 | $508,991 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages interest rate risk through fixed-rate debt and derivatives, and foreign currency risk from international investments via local currency financing and hedging instruments like foreign currency collars - A 1% change in annual interest rates would impact interest expense on unhedged variable-rate debt by $5.9 million for USD-denominated debt and $2.5 million for EUR-denominated debt292 - A 1% change in the EUR/USD exchange rate would cause a corresponding change of $2.2 million in the projected estimated cash flow from consolidated foreign operations over the next 12 months294 - The company uses foreign currency collars and local currency debt to hedge its exposure to foreign currency fluctuations294296 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable level of assurance as of June 30, 2025300 - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls301 PART II — OTHER INFORMATION Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including supplemental indentures for new debt offerings, Sarbanes-Oxley Act certifications by the CEO and CFO, and interactive data files in XBRL format - The report includes exhibits such as the Twelfth Supplemental Indenture for the 4.650% Senior Notes due 2030, certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL data files304 Signatures The report is duly signed and authorized by the company's Chief Financial Officer and Chief Accounting Officer as of July 30, 2025 - The Form 10-Q was signed on July 30, 2025, by ToniAnn Sanzone, Chief Financial Officer, and Brian Zander, Chief Accounting Officer307
W. P. Carey(WPC) - 2025 Q2 - Quarterly Report