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, 2016, 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) (dollars per share):



	Distributions Paid
	During the Years Ended December 31,
	2016		2015		2014
Ordinary income	$	3.3075	$	3.5497	$	3.6566
Return of capital	0.5963		0.2618		0.0584
Total distributions paid	$	3.9038	$	3.8115	$	3.7150

During the fourth quarter of 2016, we declared a quarterly distribution of $0.9900 per share, which was paid on January 13, 2017 to stockholders of record on December 30, 2016, in the amount of $107.1 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,
	2016			2015			2014
Net income attributable to W. P. Carey	$	267,747		$	172,258		$	239,826
Allocation of distribution equivalents paid on nonvested RSUs and RSAs in excess of income	(886		)	(579		)	(1,007		)
Net income – basic	266,861			171,679			238,819
Income effect of dilutive securities, net of taxes	—			—			(77		)
Net income – diluted	$	266,861		$	171,679		$	238,742

Weighted-average shares outstanding – basic	106,743,012			105,675,692			98,764,164
Effect of dilutive securities	330,191			831,960			1,063,192
Weighted-average shares outstanding – diluted	107,073,203			106,507,652			99,827,356

For the years ended December 31, 2016, 2015, and 2014, there were no potentially dilutive securities excluded from the computation of diluted earnings per share.

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. During the year ended December 31, 2016, we issued 1,249,836 shares of our common stock under the ATM program at a weighted-average price of $68.52 per share for net proceeds of $84.4 million. In addition, we paid $0.3 million of professional fees during 2016 related to the ATM program. As of December 31, 2016, $314.4 million remained available for issuance under our 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, because, pursuant to a put option held by the third party, we had an obligation to redeem the interest at fair value, subject to certain conditions. This obligation was 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 were 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. In March 2016, we issued 217,011 shares of our common stock to the holder of the redeemable noncontrolling interest, which had a value of $13.4 million at the date of issuance pursuant to a formula set forth in the put agreement. Through the date of this Report, the third party has not formally transferred his interests in WPCI to us pursuant to the put agreement because of a dispute regarding any amounts that may still be owed to him.

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



	Years Ended December 31,
	2016			2015		2014
Beginning balance	$	14,944		$	6,071	$	7,436
Distributions	(13,418		)	—		(926		)
Redemption value adjustment	(561		)	8,873		(306		)
Net income	—			—		(142		)
Change in other comprehensive income	—			—		9
Ending balance	$	965		$	14,944	$	6,071

Transfers to Noncontrolling Interests

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



	Years Ended December 31,
	2016		2015		2014
Net income attributable to W. P. Carey	$	267,747	$	172,258	$	239,826
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	$	267,747	$	172,258	$	198,452

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The following tables present a reconciliation of changes in Accumulated other comprehensive income (loss) 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, 2014	$	(7,488	)	$	22,793		$	31		$	15,336
Other comprehensive 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 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 loss before reclassifications	29,391			(125,447		)	15			(96,041		)
Amounts reclassified from accumulated other comprehensive 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	24,053			(125,447		)	15			(101,379		)
Net current period other comprehensive loss attributable to noncontrolling interests	—			4,647			—			4,647
Balance at December 31, 2015	37,650			(209,977		)	36			(172,291		)
Other comprehensive loss before reclassifications	16,582			(92,434		)	(126		)	(75,978		)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	2,106			—			—			2,106
Other income and (expenses)	(9,410		)	—			—			(9,410		)
Total	(7,304		)	—			—			(7,304		)
Net current period other comprehensive loss	9,278			(92,434		)	(126		)	(83,282		)
Net current period other comprehensive loss attributable to noncontrolling interests	7			1,081			—			1,088
Balance at December 31, 2016	$	46,935		$	(301,330	)	$	(90	)	$	(254,485	)