Equity

Common Stock

Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. The following table presents distributions per share, declared and paid during the years ended December 31, 2015 and 2014, reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Internal Revenue Code Section 857(b)(3)(C) and Treasury Regulation § 1.857-6(e):



	Distributions Paid
	During the Years Ended December 31,
	2015		2014		2013
Ordinary income	$	3.5497	$	3.6566	$	3.1701
Return of capital	0.2618		0.0584		0.0099
Total distributions paid	$	3.8115	$	3.7150	$	3.1800

During the fourth quarter of 2015, we declared a quarterly distribution of $0.9646 per share, which was paid on January 15, 2016 to stockholders of record on December 31, 2015, in the amount of $102.7 million.

Earnings Per Share

Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Our nonvested RSUs and RSAs contain rights to receive non-forfeitable distribution equivalents or distributions, respectively, and therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes the income attributable to the nonvested RSUs and RSAs from the numerator and such nonvested shares in the denominator. The following table summarizes basic and diluted earnings (in thousands, except share amounts):



	Years Ended December 31,
	2015			2014			2013
Net income attributable to W. P. Carey	$	172,258		$	239,826		$	98,876
Allocation of distribution equivalents paid on nonvested RSUs and RSAs in excess of income	(579		)	(1,007		)	(743		)
Net income – basic	171,679			238,819			98,133
Income effect of dilutive securities, net of taxes	—			(77		)	187
Net income – diluted	$	171,679		$	238,742		$	98,320

Weighted-average shares outstanding – basic	105,675,692			98,764,164			68,691,046
Effect of dilutive securities	831,960			1,063,192			1,016,962
Weighted-average shares outstanding – diluted	106,507,652			99,827,356			69,708,008

Securities totaling 114,919 shares associated with the Redeemable noncontrolling interest were excluded from the earnings per share computation above as their effect would have been anti-dilutive for the year ended December 31, 2013. There were no such anti-dilutive securities for the years ended December 31, 2015 and 2014.

At-The-Market Equity Offering Program

On June 3, 2015, we filed a prospectus supplement with the SEC pursuant to which we may offer and sell shares of our common stock, up to an aggregate gross sales price of $400.0 million, through an “at-the-market,” or ATM, offering program with a consortium of banks acting as sales agents. We intend to use the net proceeds from any such ATM offering to reduce indebtedness, which may include amounts outstanding under our Revolver, to fund potential future acquisitions, and for general corporate purposes. Through December 31, 2015, we had not issued any shares pursuant to this ATM program.

Equity Offering

In September 2014, we completed a public offering of 4,600,000 shares of our common stock, $0.001 par value per share, at a price of $64.00 per share, or the Equity Offering, which includes the full exercise of the underwriters’ option to purchase an additional 600,000 shares of our common stock. The net proceeds of $282.2 million from the Equity Offering were intended to repay certain indebtedness, including amounts outstanding under our Senior Unsecured Credit Facility, to fund potential future acquisitions and for general corporate purposes. We utilized $225.8 million of the net proceeds from the Equity Offering to pay down a portion of the amount then outstanding under our Revolver.

Noncontrolling Interests

Redeemable Noncontrolling Interest

We account for the noncontrolling interest in WPCI held by a third party as a redeemable noncontrolling interest, as we have an obligation to redeem the interest at fair value, subject to certain conditions pursuant to a put option held by the third party. This obligation is required to be settled in shares of our common stock. On October 1, 2013, we received a notice from the holder of the noncontrolling interest in WPCI regarding the exercise of the put option, pursuant to which we are required to purchase the third party’s 7.7% interest in WPCI. Pursuant to the terms of the related put agreement, the value of that interest was determined based on a third-party valuation as of October 31, 2013, which is the end of the month that the put option was exercised. We cannot currently determine when the redemption will occur.

The following table presents a reconciliation of redeemable noncontrolling interest (in thousands):



	Years Ended December 31,
	2015		2014			2013
Beginning balance	$	6,071	$	7,436		$	7,531
Redemption value adjustment	8,873		(306		)	—
Net income	—		(142		)	353
Distributions	—		(926		)	(435		)
Change in other comprehensive income	—		9			(13		)
Ending balance	$	14,944	$	6,071		$	7,436

Transfers to Noncontrolling Interests

The following table presents a reconciliation of the effect of transfers in noncontrolling interest (in thousands):



	Years Ended December 31,
	2015		2014			2013
Net income attributable to W. P. Carey	$	172,258	$	239,826		$	98,876
Transfers to noncontrolling interest
Decrease in W. P. Carey’s additional paid-in capital for purchases of less-than-wholly-owned investments in connection with the CPA^®:16 Merger	—		(41,374		)	—
Net transfers to noncontrolling interest	—		(41,374		)	—
Change from net income attributable to W. P. Carey and transfers to noncontrolling interest	$	172,258	$	198,452		$	98,876

Reclassifications Out of Accumulated Other Comprehensive (Loss) Income

The following tables present a reconciliation of changes in Accumulated other comprehensive (loss) income by component for the periods presented (in thousands):



	Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Gains and Losses on Marketable Securities			Total
Balance at January 1, 2013	$	(7,508	)	$	2,828		$	31		$	(4,649	)
Other comprehensive income (loss) before reclassifications	(2,793		)	21,835			—			19,042
Amounts reclassified from accumulated other comprehensive income (loss) to:
Interest expense	1,745			—			—			1,745
Other income and (expenses)	537			—			—			537
Equity in earnings of equity method investments in the Managed Programs and real estate	531			—			—			531
Total	2,813			—			—			2,813
Net current period other comprehensive income (loss)	20			21,835			—			21,855
Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest	—			(1,870		)	—			(1,870		)
Balance at December 31, 2013	(7,488		)	22,793			$	31		$	15,336
Other comprehensive income (loss) before reclassifications	17,911			(117,938		)	(10		)	(100,037		)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Interest expense	2,691			—			—			2,691
Other income and (expenses)	103			—			—			103
Equity in earnings of equity method investments in the Managed Programs and real estate	380			—			—			380
Total	3,174			—			—			3,174
Net current period other comprehensive income (loss)	21,085			(117,938		)	(10		)	(96,863		)
Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest	—			5,968			—			5,968
Balance at December 31, 2014	13,597			(89,177		)	21			(75,559		)
Other comprehensive income (loss) before reclassifications	29,391			(125,447		)	15			(96,041		)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Interest expense	2,291			—			—			2,291
Other income and (expenses)	(7,629		)	—			—			(7,629		)
Total	(5,338		)	—			—			(5,338		)
Net current period other comprehensive (loss) income	24,053			(125,447		)	15			(101,379		)
Net current period other comprehensive gain attributable to noncontrolling interests	—			4,647			—			4,647
Balance at December 31, 2015	$	37,650		$	(209,977	)	$	36		$	(172,291	)