EX-99.2 3 wpc2017q48-ksupplementalex.htm EXHIBIT 99.2 Exhibit
Exhibit 99.2

W. P. Carey Inc.
Supplemental Information
Fourth Quarter 2017








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Important Disclosures About This Supplemental Package

As used in this supplemental package, the terms “W. P. Carey,” “WPC®,” “we,” “us” and “our” include W. P. Carey Inc., its consolidated subsidiaries and its predecessors, unless otherwise indicated. “CPA® REITs” means Corporate Property Associates 17 – Global Incorporated, or CPA:17 – Global, and Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global. “CWI® REITs” means Carey Watermark Investors Incorporated, or CWI 1, and Carey Watermark Investors 2 Incorporated, or CWI 2. “Managed REITs” means the CPA REITs and the CWI REITs. “Managed Programs” means the Managed REITs and Carey European Student Housing Fund I, L.P., or CESH I. “CCIF” means Carey Credit Income Fund (now known as Guggenheim Credit Income Fund), which was included in the Managed Programs prior to our resignation as its advisor during the third quarter of 2017. “U.S.” means United States. “AUM” means assets under management.

Important Note Regarding Non-GAAP Financial Measures

This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including funds from operations, or FFO; adjusted funds from operations, or AFFO; earnings before interest, taxes, depreciation and amortization, or EBITDA; adjusted EBITDA; pro rata cash net operating income, or pro rata cash NOI; and normalized pro rata cash NOI. A description of these non-GAAP financial measures and reconciliations to their most directly comparable GAAP measures, as well as a description of other metrics presented, are provided within the Appendix to this supplemental package. FFO is a non-GAAP measure defined by the National Association of Real Estate Investments Trusts, Inc., or NAREIT, an industry trade group.

Amounts may not sum to totals due to rounding.

W. P. Carey Inc.
Supplemental Information – Fourth Quarter 2017
Table of Contents
Overview
 
 
 
Financial Results
 
Statements of Income – Last Five Quarters
 
FFO and AFFO – Last Five Quarters
 
 
 
Balance Sheets and Capitalization
 
 
 
Owned Real Estate
 
Investment Activity
 
 
 
Investment Management
 
 
 
Appendix
 
Adjusted EBITDA – Last Five Quarters
 


W. P. Carey Inc.
Overview – Fourth Quarter 2017
Summary Metrics
As of or for the three months ended December 31, 2017.
Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment
 
 
 
 
 
 
 
Owned
Real Estate
 
Investment Management
 
Total
Revenues, excluding reimbursable costs – consolidated ($'000)
 
$
162,251

 
$
23,071

 
$
185,322

Net income attributable to W. P. Carey ($'000)
 
54,149

 
21,060

 
75,209

Net income attributable to W. P. Carey per diluted share
 
0.50

 
0.19

 
0.69

Normalized pro rata cash NOI from real estate ($'000) (a) (b)
 
165,931

 
N/A

 
165,931

Adjusted EBITDA ($'000) (a) (b)
 
157,744

 
32,160

 
189,904

AFFO attributable to W. P. Carey ($'000) (a) (b)
 
111,336

 
30,726

 
142,062

AFFO attributable to W. P. Carey per diluted share (a) (b)
 
1.03

 
0.28

 
1.31

 
 
 
 
 
 
 
 
 
 
Distributions declared per share – fourth quarter
 
 
 
 
 
1.01

Distributions declared per share – fourth quarter annualized
 
 
 
 
 
4.04

Dividend yield – annualized, based on quarter end share price of $68.90
 
 
 
 
 
5.9
%
Dividend payout ratio – for the year ended December 31, 2017 (c)
 
 
 
 
 
75.7
%
 
 
 
 
 
 
 
 
 
 
Balance Sheet and Capitalization
 
 
 
 
 
 
 
 
 
Equity market capitalization – based on quarter end share price of $68.90 ($'000)
 
 
 
 
 
$
7,366,968

Pro rata net debt ($'000) (d)
 
 
 
 
 
 
 
 
4,150,197

Enterprise value ($'000)
 
 
 
 
 
 
 
 
11,517,165

 
 
 
 
 
 
 
 
 
 
Total capitalization ($'000) (e)
 
 
 
 
 
 
 
 
11,679,477

 
 
 
 
 
 
 
 
 
 
Total consolidated debt ($'000)
 
 
 
 
 
 
 
 
4,265,267

Gross assets ($'000) (f)
 
 
 
 
 
 
 
 
8,861,364

Liquidity ($'000) (g)
 
 
 
 
 
 
 
 
1,445,435

 
 
 
 
 
 
 
 
 
 
Pro rata net debt to enterprise value (b)
 
 
 
 
 
 
 
 
36.0
%
Pro rata net debt to adjusted EBITDA (annualized) (a) (b)
 
 
 
 
 
5.5x

Total consolidated debt to gross assets
 
 
 
 
 
 
 
 
48.1
%
 
 
 
 
 
 
 
 
 
 
Weighted-average interest rate (b)
 
 
 
 
 
 
 
 
3.4
%
Weighted-average debt maturity (years) (b)
 
 
 
 
 
 
 
 
5.4

 
 
 
 
 
 
 
 
 
 
Moody's Investors Service – corporate rating
 
 
 
 
 
 
 
 
Baa2 (stable)

Standard & Poor's Ratings Services – issuer rating
 
 
 
 
 
 
 
 
BBB (stable)

 
 
 
 
 
 
 
 
 
 
Owned Real Estate Portfolio (Pro Rata)
 
 
 
 
 
 
 
 
 
Number of net-leased properties
 
 
 
 
 
 
 
 
887

Number of operating properties
 
 
 
 
 
 
 
 
2

Number of tenants – net-leased properties
 
 
 
 
 
 
 
 
210

 
 
 
 
 
 
 
 
 
 
ABR from Investment Grade tenants as a % of total ABR – net-leased properties (h)
 
 
 
 
 
27.2
%
 
 
 
 
 
 
 
 
 
 
Net-leased properties – square footage (millions)
 
 
 
 
 
 
 
 
84.9

 
 
 
 
 
 
 
 
 
 
Occupancy – net-leased properties
 
 
 
 
 
 
 
 
99.8
%
Weighted-average lease term (years)
 
 
 
 
 
 
 
 
9.6

 
 
 
 
 
 
 
 
 
 
Acquisitions and completed capital projects – fourth quarter ($'000)
 
 
 
$
32,267

Dispositions – fourth quarter ($'000)
 
 
 
 
 
 
 
 
59,067

 
 
 
 
 
 
 
 
 
 
Managed Programs
CPA:17 – Global
 
CPA:18 – Global
 
CWI REITs
 
CESH I
 
Total
AUM ($'000) (i)
$
5,702,445

 
$
2,387,349

 
$
4,880,132

 
$
155,126

 
$
13,125,052

Acquisitions – fourth quarter ($'000)
52,571

 
94,586

 
—

 
—

 
147,157

Dispositions – fourth quarter ($'000)
—

 
64,847

 
85,500

 
—

 
150,347

________

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Investing for the long runTM | 1

W. P. Carey Inc.
Overview – Fourth Quarter 2017

(a)
Normalized pro rata cash NOI, Adjusted EBITDA and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how certain non-GAAP measures are calculated.
(b)
Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.
(c)
Represents distributions declared per share divided by AFFO per diluted share on a year-to-date basis.
(d)
Represents total pro rata debt outstanding less consolidated cash and cash equivalents. See the Terms and Definitions section in the Appendix for a description of pro rata.
(e)
Represents equity market capitalization plus total pro rata debt outstanding. See the Terms and Definitions section in the Appendix for a description of pro rata.
(f)
Gross assets represent consolidated total assets before accumulated depreciation on buildings and improvements. Gross assets are net of accumulated amortization on in-place lease and other intangible assets of $423.5 million and above-market rent intangible assets of $276.1 million.
(g)
Represents availability on our Senior Unsecured Credit Facility plus consolidated cash and cash equivalents.
(h)
Percentage of portfolio is based on ABR, as of December 31, 2017. Includes tenants or guarantors with investment grade ratings (19.2%) and subsidiaries of non-guarantor parent companies with investment grade ratings (8.0%). Investment grade refers to an entity with a rating of BBB- or higher from Standard & Poor’s Ratings Services or Baa3 or higher from Moody’s Investors Service. See the Terms and Definitions section in the Appendix for a description of ABR.
(i)
Represents estimated value of real estate assets plus cash and cash equivalents, less distributions payable for the Managed REITs and fair value of investments plus cash for CESH I.


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Investing for the long runTM | 2

W. P. Carey Inc.
Overview – Fourth Quarter 2017
Components of Net Asset Value
Dollars in thousands, except per share amounts.
Owned Real Estate
 
 
Three Months Ended
Dec. 31, 2017
 
Annualized
Normalized pro rata cash NOI (a) (b)
 
 
$
165,931

 
$
663,724

 
 
 
 
 
 
Investment Management
 
 
Three Months Ended
Dec. 31, 2017
 
Twelve Months Ended
Dec. 31, 2017
Adjusted EBITDA (a) (b) (c)
 
 
$
32,160

 
$
118,657

Selected Components of Adjusted EBITDA:
 
 
 
 
 
Asset management revenue (d)
 
 
16,854

 
70,125

Structuring revenue (d)
 
 
6,217

 
34,198

Operating partnership interests in real estate cash flow of Managed REITs (c) (e)
 
12,564

 
45,101

Back-end fees and interests associated with the Managed Programs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet – Selected Information (Consolidated Unless Otherwise Stated)
 
As of Dec. 31, 2017
Assets
 
 
 
 
 
Book value of real estate excluded from NOI (f)
 
 
 
 
$
40,560

Cash and cash equivalents
 
 
 
 
162,312

Due from affiliates
 
 
 
 
105,308

Other assets, net:
 
 
 
 
 
Straight-line rent adjustments
 
 
 
 
$
71,955

Restricted cash, including escrow
 
 
 
 
47,364

Deferred charges
 
 
 
 
44,370

Investment in CCIF (g)
 
 
 
 
23,329

Securities and derivatives
 
 
 
 
22,186

Accounts receivable
 
 
 
 
17,770

Other intangible assets, net
 
 
 
 
14,361

Taxes receivable
 
 
 
 
11,137

Note receivable
 
 
 
 
9,971

Prepaid expenses
 
 
 
 
8,137

Leasehold improvements, furniture and fixtures
 
 
 
3,859

Other
 
 
 
 
211

Total other assets, net
 
 
 
 
$
274,650

 
 
 
 
 
 
Liabilities
 
 
 
 
 
Total pro rata debt outstanding (b)
 
 
 
 
$
4,312,509

Distributions payable
 
 
 
 
109,766

Deferred income taxes
 
 
 
 
67,009

Accounts payable, accrued expenses and other liabilities:
 
 
 
 
 
Accounts payable and accrued expenses
 
 
 
 
$
101,615

Prepaid and deferred rents
 
 
 
 
79,483

Tenant security deposits
 
 
 
 
29,050

Accrued taxes payable
 
 
 
 
28,861

Securities and derivatives
 
 
 
 
7,913

Straight-line rent adjustments
 
 
 
 
2,230

Other
 
 
 
 
13,901

Total accounts payable, accrued expenses and other liabilities
 
 
 
 
$
263,053


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Investing for the long runTM | 3

W. P. Carey Inc.
Overview – Fourth Quarter 2017
Other
Number of Shares / Units Owned
 
NAV / Offering Price Per Share
 
Implied Value
 
A
 
B
 
A x B
Ownership in Managed Programs: (h)
 
 
 
 


CPA:17 – Global (4.2% ownership)
14,647,412

 
$
10.11

(i) 
$
148,085

CPA:18 – Global (2.5% ownership)
3,616,657

 
8.36

(j) 
30,235

CWI 1 (2.1% ownership)
2,920,268

 
10.80

(k) 
31,539

CWI 2 (1.8% ownership)
1,560,648

 
10.74

(l) 
16,761

CESH I (2.4% ownership)
3,492

 
1,000.00

(m) 
3,492

 
 
 
 
 
$
230,112

________
(a)
Normalized pro rata cash NOI and Adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how they are calculated.
(b)
Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.
(c)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.
(d)
Amounts are gross of fees paid to the respective subadvisors of CWI 1, CWI 2, CPA:18 – Global (for multi-family properties) and CCIF (prior to our resignation as the advisor to CCIF in the third quarter of 2017).
(e)
We are entitled to receive distributions of our share of earnings up to 10% of the Available Cash of each of the Managed REITs, as defined in their respective operating partnership agreements. Pursuant to the terms of their subadvisory agreements, however, 20% of the distributions of Available Cash we receive from CWI 1 and 25% of the distributions of Available Cash we receive from CWI 2 are paid to their respective subadvisors. Amounts for CWI 1 and CWI 2 are net of fees paid to their respective subadvisors.
(f)
Represents the value of real estate not included in net operating income, such as vacant assets and in-progress build-to-suit properties.
(g)
In August 2017, we resigned as the advisor to CCIF, effective as of September 11, 2017. As such, we reclassified our investment in CCIF from Equity investments in the Managed Programs and real estate to Other assets, net in our consolidated balance sheets, since we no longer share decision-making responsibilities with the third-party investment partner.
(h)
Separate from operating partnership interests and our interests in unconsolidated real estate joint ventures with our affiliate, CPA:17 – Global.
(i)
The estimated net asset value per share, or NAV, for CPA:17 – Global was determined as of December 31, 2016. We calculated CPA:17 – Global’s NAV by relying in part on an estimate of the fair market value of CPA:17 – Global’s real estate portfolio and debt provided by third parties, adjusted to give effect to the estimated fair value of mortgage loans encumbering its assets (also provided by a third party) as well as other adjustments.
(j)
We own shares of CPA:18 – Global’s Class A common stock. The quarterly NAV for CPA:18 – Global’s Class A common stock was determined as of September 30, 2017. We calculated the quarterly NAV for CPA:18 – Global’s Class A common stock by relying in part on an estimate of the fair market value of approximately 25% of CPA:18 – Global’s real estate portfolio and debt provided by third parties, adjusted to give effect to the estimated fair value of mortgage loans encumbering its assets (also provided by a third party), as well as other adjustments.
(k)
The NAV for CWI 1 was based on shares of common stock outstanding at December 31, 2016. We calculated CWI 1’s NAV relying in part on appraisals of the fair market value of CWI 1’s real estate portfolio and mortgage debt provided by third parties. The net amount was then adjusted for estimated disposition costs (including estimates of expenses, commissions and fees payable to us) and CWI 1’s other net assets and liabilities at the same date.
(l)
We own shares of CWI 2’s Class A common stock. The NAV for CWI 2’s Class A common stock was determined as of December 31, 2016. We calculated the NAV for CWI 2’s Class A common stock by relying in part on an appraisal of the fair market value of CWI 2’s real estate portfolio and estimates of the fair market value of CWI 2’s mortgage debt at December 31, 2016. The net amount was then adjusted for other net assets and liabilities and our interest in disposition proceeds at December 31, 2016.
(m)
We own limited partnership units of CESH I at its private placement price of $1,000 per share; a NAV for CESH I has not yet been calculated.

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Investing for the long runTM | 4



W. P. Carey Inc.
Financial Results
Fourth Quarter 2017





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Investing for the long runTM | 5

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
Consolidated Statements of Income – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Revenues
 
 
 
 
 
 
 
 
 
Owned Real Estate:
 
 
 
 
 
 
 
 
 
Lease revenues
$
154,826

 
$
161,511

 
$
158,255

 
$
155,781

 
$
157,105

Operating property revenues
6,910

 
8,449

 
8,223

 
6,980

 
7,071

Reimbursable tenant costs
5,584

 
5,397

 
5,322

 
5,221

 
6,201

Lease termination income and other
515

 
1,227

 
2,247

 
760

 
1,093

 
167,835

 
176,584

 
174,047

 
168,742

 
171,470

Investment Management:
 
 
 
 
 
 
 
 
 
Asset management revenue
16,854

 
17,938

 
17,966

 
17,367

 
16,375

Structuring revenue
6,217

 
9,817

 
14,330

 
3,834

 
16,338

Reimbursable costs from affiliates
6,055

 
6,211

 
13,479

 
25,700

 
20,061

Dealer manager fees
—

 
105

 
1,000

 
3,325

 
2,623

Other advisory revenue
—

 
99

 
706

 
91

 
1,913

 
29,126

 
34,170

 
47,481

 
50,317

 
57,310

 
196,961

 
210,754

 
221,528

 
219,059

 
228,780

Operating Expenses
 
 
 
 
 
 
 
 
 
Depreciation and amortization
64,015

 
64,040

 
62,849

 
62,430

 
62,675

General and administrative
17,702

 
17,236

 
17,529

 
18,424

 
24,230

Reimbursable tenant and affiliate costs
11,639

 
11,608

 
18,801

 
30,921

 
26,262

Property expenses, excluding reimbursable tenant costs
9,560

 
10,556

 
10,530

 
10,110

 
10,956

Stock-based compensation expense
4,268

 
4,635

 
3,104

 
6,910

 
3,051

Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Subadvisor fees (a)
2,002

 
5,206

 
3,672

 
2,720

 
4,131

Other expenses (b)
(533
)
 
65

 
1,000

 
73

 
18

Restructuring and other compensation (c)
289

 
1,356

 
7,718

 
—

 
—

Dealer manager fees and expenses
—

 
462

 
2,788

 
3,294

 
3,808

 
111,711

 
115,164

 
127,991

 
134,882

 
144,564

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Interest expense
(40,401
)
 
(41,182
)
 
(42,235
)
 
(41,957
)
 
(43,913
)
Equity in earnings of equity method investments in the Managed Programs and real estate
16,930

 
16,318

 
15,728

 
15,774

 
16,476

Other income and (expenses)
1,356

 
(4,569
)
 
(916
)
 
516

 
(3,731
)
 
(22,115
)
 
(29,433
)
 
(27,423
)
 
(25,667
)
 
(31,168
)
Income before income taxes and gain on sale of real estate
63,135

 
66,157

 
66,114

 
58,510

 
53,048

Benefit from (provision for) income taxes
192

 
(1,760
)
 
(2,448
)
 
1,305

 
(7,826
)
Income before gain on sale of real estate
63,327

 
64,397

 
63,666

 
59,815

 
45,222

Gain on sale of real estate, net of tax
11,146

 
19,257

 
3,465

 
10

 
3,248

Net Income
74,473

 
83,654

 
67,131

 
59,825

 
48,470

Net loss (income) attributable to noncontrolling interests
736

 
(3,376
)
 
(2,813
)
 
(2,341
)
 
(766
)
Net Income Attributable to W. P. Carey
$
75,209

 
$
80,278

 
$
64,318

 
$
57,484

 
$
47,704

 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
$
0.69

 
$
0.74

 
$
0.60

 
$
0.53

 
$
0.44

Diluted Earnings Per Share
$
0.69

 
$
0.74

 
$
0.59

 
$
0.53

 
$
0.44

Weighted-Average Shares Outstanding
 
 
 
 
 
 
 
 
 
Basic
108,041,556

 
108,019,292

 
107,668,218

 
107,562,484

 
107,487,181

Diluted
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
The subadvisors for CWI 1, CWI 2 and CPA:18 – Global earn a percentage of gross fees recorded, which we account for as an expense and which are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees. Pursuant to the terms of the subadvisory agreement we had with the subadvisor in connection with CCIF (prior to our resignation as the advisor to CCIF in the third quarter of 2017), we paid a subadvisory fee equal to 50% of the asset management fees and organization and offering costs paid to us by CCIF.
(b)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.
(c)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.

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Investing for the long runTM | 6

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
Statements of Income, Owned Real Estate – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Revenues
 
 
 
 
 
 
 
 
 
Lease revenues
$
154,826

 
$
161,511

 
$
158,255

 
$
155,781

 
$
157,105

Operating property revenues
6,910

 
8,449

 
8,223

 
6,980

 
7,071

Reimbursable tenant costs
5,584

 
5,397

 
5,322

 
5,221

 
6,201

Lease termination income and other
515

 
1,227

 
2,247

 
760

 
1,093

 
167,835

 
176,584

 
174,047

 
168,742

 
171,470

Operating Expenses
 
 
 
 
 
 
 
 
 
Depreciation and amortization
62,951

 
62,970

 
61,989

 
61,522

 
61,717

General and administrative
11,691

 
11,234

 
7,803

 
8,274

 
8,938

Property expenses, excluding reimbursable tenant costs
9,560

 
10,556

 
10,530

 
10,110

 
10,956

Reimbursable tenant costs
5,584

 
5,397

 
5,322

 
5,221

 
6,201

Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Stock-based compensation expense
2,227

 
1,880

 
899

 
1,954

 
908

Other expenses (a)
(533
)
 
65

 
1,000

 
73

 
18

 
94,249

 
92,102

 
87,543

 
87,154

 
98,171

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Interest expense
(40,401
)
 
(41,182
)
 
(42,235
)
 
(41,957
)
 
(43,913
)
Equity in earnings of equity method investments in real estate (b)
3,535

 
3,740

 
3,721

 
2,072

 
3,343

Other income and (expenses)
594

 
(4,918
)
 
(1,371
)
 
40

 
(4,016
)
 
(36,272
)
 
(42,360
)
 
(39,885
)
 
(39,845
)
 
(44,586
)
Income before income taxes and gain on sale of real estate
37,314

 
42,122

 
46,619

 
41,743

 
28,713

Benefit from (provision for) income taxes
4,953

 
(1,511
)
 
(3,731
)
 
(1,454
)
 
(3,374
)
Income before gain on sale of real estate
42,267

 
40,611

 
42,888

 
40,289

 
25,339

Gain on sale of real estate, net of tax
11,146

 
19,257

 
3,465

 
10

 
3,248

Net Income from Owned Real Estate
53,413

 
59,868

 
46,353

 
40,299

 
28,587

Net loss (income) attributable to noncontrolling interests
736

 
(3,376
)
 
(2,813
)
 
(2,341
)
 
(766
)
Net Income from Owned Real Estate Attributable to
   W. P. Carey (b)
$
54,149

 
$
56,492

 
$
43,540

 
$
37,958

 
$
27,821

 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share (b)
$
0.50

 
$
0.52

 
$
0.41

 
$
0.35

 
$
0.26

Diluted Earnings Per Share (b)
$
0.50

 
$
0.52

 
$
0.40

 
$
0.35

 
$
0.26

Weighted-Average Shares Outstanding
 
 
 
 
 
 
 
 
 
Basic
108,041,556

 
108,019,292

 
107,668,218

 
107,562,484

 
107,487,181

Diluted
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.
(b)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 7

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
Statements of Income, Investment Management – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Revenues
 
 
 
 
 
 
 
 
 
Asset management revenue
$
16,854

 
$
17,938

 
$
17,966

 
$
17,367

 
$
16,375

Structuring revenue
6,217

 
9,817

 
14,330

 
3,834

 
16,338

Reimbursable costs from affiliates
6,055

 
6,211

 
13,479

 
25,700

 
20,061

Dealer manager fees
—

 
105

 
1,000

 
3,325

 
2,623

Other advisory revenue
—

 
99

 
706

 
91

 
1,913

 
29,126

 
34,170

 
47,481

 
50,317

 
57,310

Operating Expenses
 
 
 
 
 
 
 
 
 
Reimbursable costs from affiliates
6,055

 
6,211

 
13,479

 
25,700

 
20,061

General and administrative
6,011

 
6,002

 
9,726

 
10,150

 
15,292

Stock-based compensation expense
2,041

 
2,755

 
2,205

 
4,956

 
2,143

Subadvisor fees (a)
2,002

 
5,206

 
3,672

 
2,720

 
4,131

Depreciation and amortization
1,064

 
1,070

 
860

 
908

 
958

Restructuring and other compensation (b)
289

 
1,356

 
7,718

 
—

 
—

Dealer manager fees and expenses
—

 
462

 
2,788

 
3,294

 
3,808

 
17,462

 
23,062

 
40,448

 
47,728

 
46,393

Other Income and Expenses
 
 
 
 
 
 
 
 
 
Equity in earnings of equity method investments in the Managed Programs (c)
13,395

 
12,578

 
12,007

 
13,702

 
13,133

Other income and (expenses)
762

 
349

 
455

 
476

 
285

 
14,157

 
12,927

 
12,462

 
14,178

 
13,418

Income before income taxes
25,821

 
24,035

 
19,495

 
16,767

 
24,335

(Provision for) benefit from income taxes
(4,761
)
 
(249
)
 
1,283

 
2,759

 
(4,452
)
Net Income from Investment Management Attributable to
   W. P. Carey (c)
$
21,060

 
$
23,786

 
$
20,778

 
$
19,526

 
$
19,883

 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share (c)
$
0.19

 
$
0.22

 
$
0.19

 
$
0.18

 
$
0.18

Diluted Earnings Per Share (c)
$
0.19

 
$
0.22

 
$
0.19

 
$
0.18

 
$
0.18

Weighted-Average Shares Outstanding
 
 
 
 
 
 
 
 
 
Basic
108,041,556

 
108,019,292

 
107,668,218

 
107,562,484

 
107,487,181

Diluted
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
The subadvisors for CWI 1, CWI 2 and CPA:18 – Global earn a percentage of gross fees recorded, which we account for as an expense and which are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees. Pursuant to the terms of the subadvisory agreement we had with the subadvisor in connection with CCIF (prior to our resignation as the advisor to CCIF in the third quarter of 2017), we paid a subadvisory fee equal to 50% of the asset management fees and organization and offering costs paid to us by CCIF.
(b)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.
(c)
In connection with our previously announced decision to exit non-traded retail fundraising activities, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.



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Investing for the long runTM | 8

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
FFO and AFFO, Consolidated – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income attributable to W. P. Carey
$
75,209

 
$
80,278

 
$
64,318

 
$
57,484

 
$
47,704

Adjustments:
 
 
 
 
 
 
 
 
 
Depreciation and amortization of real property
62,603

 
62,621

 
61,636

 
61,182

 
61,373

Gain on sale of real estate, net
(11,146
)
 
(19,257
)
 
(3,465
)
 
(10
)
 
(3,248
)
Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Proportionate share of adjustments for noncontrolling interests
(2,696
)
 
(2,692
)
 
(2,562
)
 
(2,541
)
 
(3,184
)
Proportionate share of adjustments to equity in net income of partially owned entities
877

 
866

 
833

 
2,717

 
1,059

Total adjustments
52,407

 
41,538

 
56,442

 
61,348

 
65,433

FFO (as defined by NAREIT) Attributable to W. P. Carey (a)
127,616

 
121,816

 
120,760

 
118,832

 
113,137

Adjustments:
 
 
 
 
 
 
 
 
 
Above- and below-market rent intangible lease amortization, net (b)
17,922

 
12,459

 
12,323

 
12,491

 
12,653

Tax benefit – deferred
(10,497
)
 
(1,234
)
 
(1,382
)
 
(5,551
)
 
(2,433
)
Stock-based compensation
4,268

 
4,635

 
3,104

 
6,910

 
3,051

Other amortization and non-cash items (c)
2,198

 
6,208

 
6,693

 
2,094

 
5,584

Amortization of deferred financing costs
2,043

 
2,184

 
2,542

 
1,400

 
926

Straight-line and other rent adjustments
(2,002
)
 
(3,212
)
 
(2,965
)
 
(3,500
)
 
(4,953
)
Other expenses (d)
(533
)
 
65

 
1,000

 
73

 
18

Realized (gains) losses on foreign currency
(472
)
 
(449
)
 
(378
)
 
403

 
1,102

Restructuring and other compensation (e)
289

 
1,356

 
7,718

 
—

 
—

(Gain) loss on extinguishment of debt
(81
)
 
1,566

 
(2,443
)
 
912

 
224

Proportionate share of adjustments to equity in net income of partially owned entities
2,884

 
3,064

 
1,978

 
550

 
2,810

Proportionate share of adjustments for noncontrolling interests
(1,573
)
 
(216
)
 
(513
)
 
(376
)
 
(595
)
Total adjustments
14,446

 
26,426

 
27,677

 
15,406

 
18,387

AFFO Attributable to W. P. Carey (a)
$
142,062

 
$
148,242

 
$
148,437

 
$
134,238

 
$
131,524

 
 
 
 
 
 
 
 
 
 
Summary
 
 
 
 
 
 
 
 
 
FFO (as defined by NAREIT) attributable to W. P. Carey (a)
$
127,616

 
$
121,816

 
$
120,760

 
$
118,832

 
$
113,137

FFO (as defined by NAREIT) attributable to W. P. Carey
   per diluted share (a)
$
1.18

 
$
1.13

 
$
1.12

 
$
1.10

 
$
1.05

AFFO attributable to W. P. Carey (a)
$
142,062

 
$
148,242

 
$
148,437

 
$
134,238

 
$
131,524

AFFO attributable to W. P. Carey per diluted share (a)
$
1.31

 
$
1.37

 
$
1.38

 
$
1.25

 
$
1.22

Diluted weighted-average shares outstanding
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.
(b)
Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to accelerated amortization of an above-market rent intangible in connection with a lease restructuring.
(c)
Represents primarily unrealized gains and losses from foreign exchange and derivatives.
(d)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.
(e)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.


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Investing for the long runTM | 9

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
FFO and AFFO, Owned Real Estate – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income from Owned Real Estate attributable to W. P. Carey (a)
$
54,149

 
$
56,492

 
$
43,540

 
$
37,958

 
$
27,821

Adjustments:
 
 
 
 
 
 
 
 
 
Depreciation and amortization of real property
62,603

 
62,621

 
61,636

 
61,182

 
61,373

Gain on sale of real estate, net
(11,146
)
 
(19,257
)
 
(3,465
)
 
(10
)
 
(3,248
)
Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Proportionate share of adjustments for noncontrolling interests
(2,696
)
 
(2,692
)
 
(2,562
)
 
(2,541
)
 
(3,184
)
Proportionate share of adjustments to equity in net income of partially owned entities
877

 
866

 
833

 
2,717

 
1,059

Total adjustments
52,407

 
41,538

 
56,442

 
61,348

 
65,433

FFO (as defined by NAREIT) Attributable to W. P. Carey – Owned Real Estate (a) (b)
106,556

 
98,030

 
99,982

 
99,306

 
93,254

Adjustments:
 
 
 
 
 
 
 
 
 
Above- and below-market rent intangible lease amortization, net (c)
17,922

 
12,459

 
12,323

 
12,491

 
12,653

Tax (benefit) expense – deferred
(15,047
)
 
(2,694
)
 
33

 
(2,460
)
 
2,273

Other amortization and non-cash items (d)
2,260

 
6,808

 
7,038

 
2,009

 
5,698

Stock-based compensation
2,227

 
1,880

 
899

 
1,954

 
908

Amortization of deferred financing costs
2,043

 
2,184

 
2,542

 
1,400

 
926

Straight-line and other rent adjustments
(2,002
)
 
(3,212
)
 
(2,965
)
 
(3,500
)
 
(4,953
)
Other expenses (e)
(533
)
 
65

 
1,000

 
73

 
18

Realized (gains) losses on foreign currency
(477
)
 
(454
)
 
(382
)
 
395

 
1,136

(Gain) loss on extinguishment of debt
(81
)
 
1,566

 
(2,443
)
 
912

 
224

Proportionate share of adjustments to equity in net income of partially owned entities (a)
41

 
(79
)
 
(92
)
 
(434
)
 
(189
)
Proportionate share of adjustments for noncontrolling interests
(1,573
)
 
(216
)
 
(513
)
 
(376
)
 
(595
)
Total adjustments
4,780

 
18,307

 
17,440

 
12,464

 
18,099

AFFO Attributable to W. P. Carey – Owned Real Estate (a) (b)
$
111,336

 
$
116,337

 
$
117,422

 
$
111,770

 
$
111,353

 
 
 
 
 
 
 
 
 
 
Summary
 
 
 
 
 
 
 
 
 
FFO (as defined by NAREIT) attributable to W. P. Carey – Owned Real Estate (a) (b)
$
106,556

 
$
98,030

 
$
99,982

 
$
99,306

 
$
93,254

FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share – Owned Real Estate (a) (b)
$
0.99

 
$
0.91

 
$
0.93

 
$
0.92

 
$
0.87

AFFO attributable to W. P. Carey – Owned Real Estate (a) (b)
$
111,336

 
$
116,337

 
$
117,422

 
$
111,770

 
$
111,353

AFFO attributable to W. P. Carey per diluted share – Owned Real Estate (a) (b)
$
1.03

 
$
1.07

 
$
1.09

 
$
1.04

 
$
1.03

Diluted weighted-average shares outstanding
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.
(b)
FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.
(c)
Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to accelerated amortization of an above-market rent intangible in connection with a lease restructuring.
(d)
Represents primarily unrealized gains and losses from foreign exchange and derivatives.
(e)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.

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Investing for the long runTM | 10

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
FFO and AFFO, Investment Management – Last Five Quarters
In thousands, except share and per share amounts.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income from Investment Management attributable to
   W. P. Carey (a)
$
21,060

 
$
23,786

 
$
20,778

 
$
19,526

 
$
19,883

FFO (as defined by NAREIT) Attributable to W. P. Carey – Investment Management (a) (b)
21,060

 
23,786

 
20,778

 
19,526

 
19,883

Adjustments:
 
 
 
 
 
 
 
 
 
Tax expense (benefit) – deferred
4,550

 
1,460

 
(1,415
)
 
(3,091
)
 
(4,706
)
Stock-based compensation
2,041

 
2,755

 
2,205

 
4,956

 
2,143

Restructuring and other compensation (c)
289

 
1,356

 
7,718

 
—

 
—

Other amortization and non-cash items (d)
(62
)
 
(600
)
 
(345
)
 
85

 
(114
)
Realized losses (gains) on foreign currency
5

 
5

 
4

 
8

 
(34
)
Proportionate share of adjustments to equity in net income of partially owned entities (a)
2,843

 
3,143

 
2,070

 
984

 
2,999

Total adjustments
9,666

 
8,119

 
10,237

 
2,942

 
288

AFFO Attributable to W. P. Carey – Investment Management (a) (b)
$
30,726

 
$
31,905

 
$
31,015

 
$
22,468

 
$
20,171

 
 
 
 
 
 
 
 
 
 
Summary
 
 
 
 
 
 
 
 
 
FFO (as defined by NAREIT) attributable to W. P. Carey – Investment Management (a) (b)
$
21,060

 
$
23,786

 
$
20,778

 
$
19,526

 
$
19,883

FFO (as defined by NAREIT) attributable to W. P. Carey
   per diluted share – Investment Management (a) (b)
$
0.19

 
$
0.22

 
$
0.19

 
$
0.18

 
$
0.18

AFFO attributable to W. P. Carey – Investment Management (a) (b)
$
30,726

 
$
31,905

 
$
31,015

 
$
22,468

 
$
20,171

AFFO attributable to W. P. Carey per diluted share – Investment Management (a) (b)
$
0.28

 
$
0.30

 
$
0.29

 
$
0.21

 
$
0.19

Diluted weighted-average shares outstanding
108,208,918

 
108,143,694

 
107,783,204

 
107,764,279

 
107,715,965

________
(a)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.
(b)
FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.
(c)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our previously announced exit from non-traded retail fundraising activities.
(d)
Represents primarily unrealized gains and losses from foreign exchange.

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Investing for the long runTM | 11

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
Elements of Pro Rata Statement of Income and AFFO Adjustments
In thousands. For the three months ended December 31, 2017.

We believe that the table below is useful for investors to help them better understand our business by illustrating the impact of each of our AFFO adjustments on our GAAP statement of income line items. This presentation is not an alternative to the GAAP statement of income, nor is AFFO an alternative to net income as determined by GAAP.
 
Equity
Investments (a)
 
Noncontrolling
Interests (b)
 
AFFO
Adjustments
 
Revenues
 
 
 
 
 
 
Owned Real Estate:
 
 
 
 
 
 
Lease revenues
$
4,833

 
$
(3,883
)
 
$
13,122

(c) 
Operating property revenues:
 
 
 
 
 
 
Hotel revenues
—

 
—

 
—

 
Reimbursable tenant costs
24

 
(123
)
 
(93
)
 
Lease termination income and other
—

 
(12
)
 
(14
)
 
 

 

 

 
Investment Management:
 
 
 
 
 
 
Asset management revenue
—

 
—

 
—

 
Structuring revenue
—

 
—

 
—

 
Reimbursable costs from affiliates
—

 
—

 
—

 
 

 

 

 
Operating Expenses
 
 
 
 
 
 
Depreciation and amortization
363

 
(2,703
)
 
(60,293
)
(d) 
General and administrative
—

 
(6
)
 
—

 
Reimbursable tenant and affiliate costs
23

 
(125
)
 
(90
)
 
Property expenses, excluding reimbursable tenant costs:
 
 
 
 
 
Hotel expenses
—

 
—

 
—

 
Non-reimbursable property expenses
24

 
(51
)
 
22

(e) 
Stock-based compensation expense
—

 
—

 
(4,268
)
(e) 
Impairment charges
—

 
—

 
(2,769
)
(e) 
Subadvisor fees (f)
—

 
—

 
—

 
Other expenses
—

 
—

 
533

 
Restructuring and other compensation
—

 
—

 
(289
)
(g) 
 

 

 

 
Other Income and Expenses
 
 
 
 
 
 
Interest expense
(531
)
 
295

 
1,876

(h) 
Equity in earnings of equity method investments in the Managed Programs and real estate:
 
 
 
 
 
 
Income related to our general partnership interests in the Managed REITs (i)
—

 
(343
)
 
—

 
Joint ventures
(3,766
)
 
(1
)
 
514

(j) 
Income related to our ownership in the Managed Programs
—

 
—

 
2,843

(k) 
Other income and (expenses)
(1
)
 
91

 
1,873

(l) 
 

 

 

 
Benefit from income taxes

(149
)
 
1,827

 
(9,276
)
(m) 
Gain on sale of real estate, net of tax
—

 
—

 
(11,146
)
 
Net loss attributable to noncontrolling interests

—

 
(736
)
 
—

 
________
(a)
Represents the break-out by line item of amounts recorded in Equity in earnings of equity method investments in the Managed Programs and real estate.
(b)
Represents the break-out by line item of amounts recorded in Net income attributable to noncontrolling interests.
(c)
For the three months ended December 31, 2017, represents the reversal of amortization of above- or below-market lease intangibles of $15.4 million (including $5.7 million related to accelerated amortization of an above-market rent intangible in connection with a lease restructuring) and the elimination of non-cash amounts related to straight-line rent and other of $2.3 million.
(d)
Adjustment is a non-cash adjustment excluding corporate depreciation and amortization.
(e)
Adjustment to exclude a non-cash item.
(f)
The subadvisors for CWI 1, CWI 2 and CPA:18 – Global earn a percentage of gross fees recorded, which we account for as an expense and which are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees.

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Investing for the long runTM | 12

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017

(g)
Adjustment to exclude restructuring expenses resulting from our exit from non-traded retail fundraising activities.
(h)
Represents the elimination of non-cash components of interest expense, such as deferred financing costs, debt premiums and discounts.
(i)
Amount includes 100% of CWI 2 general operating partnership distribution, including $0.4 million paid to subadvisors.
(j)
Adjustments to include our pro rata share of AFFO adjustments from equity investments.
(k)
Represents Adjusted MFFO from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs. Adjusted MFFO is defined as MFFO adjusted for deferred taxes and excluding the adjustment for realized gains and losses on hedges.
(l)
Represents eliminations of gains (losses) related to the extinguishment of debt, foreign currency, unrealized gains (losses) on derivatives and other items.
(m)
Represents primarily the elimination of deferred taxes.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 13

W. P. Carey Inc.
Financial Results – Fourth Quarter 2017
Capital Expenditures
In thousands. For the three months ended December 31, 2017.
Tenant Improvements and Leasing Costs
 
Tenant improvements
$
644

Leasing costs
1,731

Tenant Improvements and Leasing Costs
2,375

 
 
Maintenance Capital Expenditures
 
Operating properties
964

Net-lease properties
613

Maintenance Capital Expenditures
1,577

 
 
Total: Tenant Improvements and Leasing Costs, and Maintenance Capital Expenditures
$
3,952






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Investing for the long runTM | 14



W. P. Carey Inc.
Balance Sheets and Capitalization
Fourth Quarter 2017





wpc8ksupplementaldividera13.jpg



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Investing for the long runTM | 15

W. P. Carey Inc.
Balance Sheets and Capitalization – Fourth Quarter 2017
Consolidated Balance Sheets
In thousands, except share and per share amounts.
 
Dec. 31,
 
2017
 
2016
Assets
 
 
 
Investments in real estate:
 
 
 
Land, buildings and improvements (a)
$
5,457,265

 
$
5,285,837

Net investments in direct financing leases
721,607

 
684,059

In-place lease and other intangible assets
1,213,976

 
1,172,238

Above-market rent intangible assets
640,480

 
632,383

Assets held for sale
—

 
26,247

Investments in real estate
8,033,328

 
7,800,764

Accumulated depreciation and amortization (b)
(1,329,613
)
 
(1,018,864
)
Net investments in real estate
6,703,715

 
6,781,900

Equity investments in the Managed Programs and real estate (c)
341,457

 
298,893

Cash and cash equivalents
162,312

 
155,482

Due from affiliates
105,308

 
299,610

Other assets, net
274,650

 
282,149

Goodwill
643,960

 
635,920

Total assets
$
8,231,402

 
$
8,453,954

 
 
 
 
Liabilities and Equity
 
 
 
Debt:
 
 
 
Unsecured senior notes, net
$
2,474,661

 
$
1,807,200

Unsecured term loans, net
388,354

 
249,978

Unsecured revolving credit facility
216,775

 
676,715

Non-recourse mortgages, net
1,185,477

 
1,706,921

Debt, net
4,265,267

 
4,440,814

Accounts payable, accrued expenses and other liabilities
263,053

 
266,917

Below-market rent and other intangible liabilities, net
113,957

 
122,203

Deferred income taxes
67,009

 
90,825

Distributions payable
109,766

 
107,090

Total liabilities
4,819,052

 
5,027,849

Redeemable noncontrolling interest
965

 
965

 
 
 
 
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued
—

 
—

Common stock, $0.001 par value, 450,000,000 shares authorized; 106,922,616 and 106,294,162 shares, respectively, issued and outstanding
107

 
106

Additional paid-in capital
4,433,573

 
4,399,961

Distributions in excess of accumulated earnings
(1,052,064
)
 
(894,137
)
Deferred compensation obligation
46,656

 
50,222

Accumulated other comprehensive loss
(236,011
)
 
(254,485
)
Total stockholders' equity
3,192,261

 
3,301,667

Noncontrolling interests
219,124

 
123,473

Total equity
3,411,385

 
3,425,140

Total liabilities and equity
$
8,231,402

 
$
8,453,954

________
(a)
Includes $83.0 million and $81.7 million of amounts attributable to operating properties as of December 31, 2017 and 2016, respectively.
(b)
Includes $630.0 million and $484.4 million of accumulated depreciation on buildings and improvements as of December 31, 2017 and 2016, respectively, and $699.7 million and $534.4 million of accumulated amortization on lease intangibles as of December 31, 2017 and 2016, respectively.
(c)
Our equity investments in the Managed Programs totaled $201.4 million and $160.8 million as of December 31, 2017 and 2016, respectively. Our equity investments in real estate joint ventures totaled $140.0 million and $138.1 million as of December 31, 2017 and 2016, respectively.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 16

W. P. Carey Inc.
Balance Sheets and Capitalization – Fourth Quarter 2017
Capitalization
In thousands, except share and per share amounts. As of December 31, 2017.
Description
 
Shares
 
Share Price
 
Market Value
Equity
 
 
 
 
 
 
 
Common equity
 
 
 
106,922,616

 
$
68.90

 
$
7,366,968

Preferred equity
 
 
 
 
 
 
 
—

Total Equity Market Capitalization
 
 
 
 
 
7,366,968

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding Balance (a)
Pro Rata Debt
 
 
 
 
 
 
 
Non-recourse mortgages
 
 
 
 
 
 
 
1,206,661

Unsecured revolving credit facility
 
 
 
 
 
 
216,775

Unsecured term loans
 
 
 
 
 
 
389,773

Unsecured senior notes:
 
 
 
 
 
 
 
Due January 20, 2023
 
 
 
 
 
599,650

Due April 1, 2024
 
 
 
 
 
500,000

Due July 19, 2024
 
 
 
 
 
599,650

Due February 1, 2025
 
 
 
 
 
450,000

Due October 1, 2026
 
 
 
 
 
350,000

Total Pro Rata Debt
 
 
 
 
 
4,312,509

 
 
 
 
 
 
 
 
 
Total Capitalization
 
 
 
 
 
$
11,679,477

________
(a)
Excludes unamortized deferred financing costs totaling $16.2 million and unamortized discount, net totaling $13.2 million as of December 31, 2017.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 17

W. P. Carey Inc.
Balance Sheets and Capitalization – Fourth Quarter 2017
Debt Overview
Dollars in thousands. Pro rata. As of December 31, 2017.
 
USD-Denominated
 
EUR-Denominated
 
GBP-Denominated
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding Balance
 
 
 
 
 
Out-standing Balance
(in USD)
 
Weigh-ted
-Avg. Interest
Rate
 
Out-standing Balance
(in USD)
 
Weigh-ted
-Avg. Interest
Rate
 
Out-standing Balance
(in USD)
 
Weigh-ted
Avg. Interest
Rate
 
Amount (a) (b)
(in USD)
 
%
of Total
 
Weigh-ted
-Avg. Interest
Rate
 
Weigh-ted
-Avg. Maturity (Years)
Non-Recourse Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed
$
774,308

 
5.7
%
 
$
122,412

 
4.4
%
 
$
10,739

 
5.6
%
 
$
907,459

 
21.1
%
 
5.5
%
 
4.5

Variable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Floating
45,492

 
3.2
%
 
119,146

 
0.9
%
 
—

 
—
%
 
164,638

 
3.8
%
 
1.6
%
 
0.8

Swapped
106,865

 
5.0
%
 
9,033

 
6.2
%
 
—

 
—
%
 
115,898

 
2.7
%
 
5.1
%
 
2.7

Capped
—

 
—
%
 
18,666

 
3.3
%
 
—

 
—
%
 
18,666

 
0.4
%
 
3.3
%
 
3.6

Total Pro Rata Non-Recourse Debt
926,665

 
5.5
%
 
269,257

 
2.8
%
 
10,739

 
5.6
%
 
1,206,661

 
28.0
%
 
4.9
%
 
3.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recourse Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed – Unsecured senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Due January 20, 2023
—

 
—
%
 
599,650

 
2.0
%
 
—

 
—
%
 
599,650

 
13.9
%
 
2.0
%
 
5.1

Due April 1, 2024
500,000

 
4.6
%
 
—

 
—
%
 
—

 
—
%
 
500,000

 
11.6
%
 
4.6
%
 
6.3

Due July 19, 2024
—

 
—
%
 
599,650

 
2.3
%
 
—

 
—
%
 
599,650

 
13.9
%
 
2.3
%
 
6.6

Due February 1, 2025
450,000

 
4.0
%
 
—

 
—
%
 
—

 
—
%
 
450,000

 
10.5
%
 
4.0
%
 
8.8

Due October 1, 2026
350,000

 
4.3
%
 
—

 
—
%
 
—

 
—
%
 
350,000

 
8.1
%
 
4.3
%
 
7.1

Total Unsecured Senior Notes
1,300,000

 
4.3
%
 
1,199,300

 
2.1
%
 
—

 
—
%
 
2,499,300

 
58.0
%
 
3.3
%
 
6.6

Variable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured revolving credit facility (due February 22, 2021) (c)
105,000

 
2.5
%
 
111,775

 
1.0
%
 
—

 
—
%
 
216,775

 
5.0
%
 
1.7
%
 
3.1

Unsecured term loans (due February 22, 2022) (d)
—

 
—
%
 
389,773

 
1.1
%
 
—

 
—
%
 
389,773

 
9.0
%
 
1.1
%
 
4.1

Total Recourse Debt
1,405,000

 
4.2
%
 
1,700,848

 
1.8
%
 
—

 
 
 
3,105,848

 
72.0
%
 
2.9
%
 
5.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Pro Rata Debt Outstanding
$
2,331,665

 
 
 
$
1,970,105

 
 
 
$
10,739

 
 
 
$
4,312,509

 
100.0
%
 
3.4
%
 
5.4

________
(a)
Debt data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.
(b)
Excludes unamortized deferred financing costs totaling $16.2 million and unamortized discount, net totaling $13.2 million as of December 31, 2017.
(c)
Based on the applicable currency, we incurred interest at the London Interbank Offered Rate (LIBOR) or Euro Interbank Offered Rate (EURIBOR) plus 1.00% on our Unsecured revolving credit facility. Availability under our Unsecured revolving credit facility was $1.3 billion as of December 31, 2017.
(d)
We incurred interest at the EURIBOR plus 1.10% on our Unsecured term loans.

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Investing for the long runTM | 18

W. P. Carey Inc.
Balance Sheets and Capitalization – Fourth Quarter 2017
Debt Maturity
Dollars in thousands. Pro rata. As of December 31, 2017.
 
 
Real Estate
 
Debt
 
 
Number of Properties (a)
 
 
 
Weighted-
Average
Interest Rate
 
 
 
Total Outstanding Balance (b) (c)
 
Percent of Total Outstanding Balance
Year of Maturity
 
 
ABR (a)
 
 
Balloon
 
 
Non-Recourse Debt
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
29

 
$
31,494

 
3.1
%
 
$
198,022

 
$
199,933

 
4.6
%
2019
 
11

 
17,374

 
6.1
%
 
51,450

 
57,208

 
1.3
%
2020
 
22

 
47,412

 
4.8
%
 
222,837

 
252,259

 
5.9
%
2021
 
14

 
25,672

 
5.5
%
 
107,587

 
124,504

 
2.9
%
2022
 
30

 
43,092

 
5.1
%
 
202,421

 
238,335

 
5.5
%
2023
 
25

 
36,362

 
5.2
%
 
91,087

 
135,076

 
3.1
%
2024
 
22

 
20,760

 
5.9
%
 
3,444

 
56,248

 
1.3
%
2025
 
13

 
14,619

 
4.8
%
 
54,052

 
88,962

 
2.1
%
2026
 
7

 
10,086

 
6.6
%
 
18,992

 
43,355

 
1.0
%
2027
 
1

 
2,423

 
5.8
%
 
—

 
10,781

 
0.3
%
Total Pro Rata Non-Recourse Debt
 
174

 
$
249,294

 
4.9
%
 
$
949,892

 
1,206,661

 
28.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Recourse Debt
 
 
 
 
 
 
 
 
 
 
 
 
Fixed – Unsecured senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
Due January 20, 2023
 
2.0
%
 
 
 
599,650

 
 
Due April 1, 2024
 
4.6
%
 
 
 
500,000

 
 
Due July 19, 2024
 
2.3
%
 
 
 
599,650

 
 
Due February 1, 2025
 
4.0
%
 
 
 
450,000

 
 
Due October 1, 2026
 
4.3
%
 
 
 
350,000

 
 
Total Unsecured Senior Notes
 
3.3
%
 
 
 
2,499,300

 
58.0
%
Variable:

 
 
 
 
 
 
 
 
 
 
 
 
Unsecured revolving credit facility (due February 22, 2021) (d)
 
1.7
%
 
 
 
216,775

 
5.0
%
Unsecured term loans (due February 22, 2022) (e)
 
1.1
%
 
 
 
389,773

 
9.0
%
Total Recourse Debt
 
2.9
%
 
 
 
3,105,848

 
72.0
%
 
 
 
 
 
 
 
 
 
Total Pro Rata Debt Outstanding
 
3.4
%
 
 
 
$
4,312,509

 
100.0
%
________
(a)
Represents the number of properties and ABR associated with the debt that is maturing in each respective year.
(b)
Debt maturity data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata. Total outstanding balance includes balloon payments and scheduled amortization for our non-recourse debt.
(c)
Excludes unamortized deferred financing costs totaling $16.2 million and unamortized discount, net totaling $13.2 million as of December 31, 2017.
(d)
Based on the applicable currency, we incurred interest at LIBOR or EURIBOR plus 1.00% on our Unsecured revolving credit facility. Availability under our Unsecured revolving credit facility was $1.3 billion as of December 31, 2017.
(e)
We incurred interest at EURIBOR plus 1.10% on our Unsecured term loans.

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Investing for the long runTM | 19

W. P. Carey Inc.
Balance Sheets and Capitalization – Fourth Quarter 2017
Unsecured Senior Notes
As of December 31, 2017.

Ratings
 
 
Issuer / Corporate
 
Unsecured Senior Notes
Ratings Agency
 
Rating
 
Outlook
 
Rating
 
Outlook
Moody's
 
Baa2
 
Stable
 
Baa2
 
Stable
Standard & Poor's
 
BBB
 
Stable
 
BBB
 
Stable

Unsecured Senior Note Covenants

The following is a summary of the key financial covenants for the Unsecured Senior Notes, along with our estimated calculations of our compliance with those covenants at the end of the period presented. These ratios are not measures of our liquidity or performance and serve only to demonstrate our ability to incur additional debt, as permitted by the covenants for the Unsecured Senior Notes.
Covenant
 
Metric
 
Required
 
As of
Dec. 31, 2017
Limitation on the incurrence of debt
 
"Total Debt" /
"Total Assets"
 
≤ 60%
 
45.3%
Limitation on the incurrence of secured debt
 
"Secured Debt" /
"Total Assets"
 
≤ 40%
 
12.5%
Limitation on the incurrence of debt based on consolidated EBITDA to annual debt service charge
 
"Consolidated EBITDA" /
"Annual Debt Service Charge"
 
≥ 1.5x
 
5.0x
Maintenance of unencumbered asset value
 
"Unencumbered Assets" / "Total Unsecured Debt"
 
≥ 150%
 
192.1%


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 20



W. P. Carey Inc.
Owned Real Estate
Fourth Quarter 2017





wpc8ksupplementaldividera13.jpg

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 21

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Investment Activity – Capital Investment Projects (a)
Dollars in thousands. Pro rata.
 
 
 
 
Primary Transaction Type
 
Property Type
 
Estimated Completion
 
Estimated New Square Footage
 
Lease Term (Years)
 
Funded During Three Months Ended Dec. 31, 2017
 
Total Funded Through Dec. 31, 2017
 
Maximum Commitment
Tenant
 
Location
 
 
 
 
 
 
 
 
Remaining
 
Total
Nord Anglia Education, Inc. (b)
 
Houston, TX
 
Build-to-Suit
 
Education Facility
 
Q1 2018
 
53,000

 
25

 
$
7,299

 
$
16,394

 
$
4,790

 
$
21,530

Schlage Lock Company LLC (c)
 
Zawiercie, Poland
 
Build-to-Suit
 
Industrial
 
Q2 2018
 
154,550

 
20

 
3,591

 
4,062

 
6,824

 
10,886

Hellweg Die Profi-Baumärkte GmbH & Co. KG (c) (d)
 
Germany
 
Renovation
 
Retail
 
Q2 2018
 
N/A

 
19

 
969

 
969

 
7,634

 
8,603

Griffith Foods Group Inc.
 
Chicago, IL
 
Renovation
 
Industrial
 
Q2 2018
 
N/A

 
20

 
—

 
—

 
3,507

 
3,507

Ontex
BVBA (c)
 
Radomsko, Poland
 
Build-to-Suit
 
Industrial
 
Q3 2018
 
280,897

 
15

 
1,781

 
1,781

 
13,872

 
15,653

Nord Anglia Education, Inc. (b)
 
Windermere, FL
 
Build-to-Suit
 
Education Facility
 
Q3 2018
 
38,000

 
25

 
2,072

 
3,476

 
11,920

 
15,442

Nord Anglia Education, Inc. (b)
 
Coconut Creek, FL
 
Build-to-Suit
 
Education Facility
 
Q3 2018
 
130,000

 
25

 
8,979

 
8,979

 
15,742

 
24,810

Astellas US Holding, Inc.
 
Westborough, MA
 
Redevelopment
 
Laboratory
 
Q3 2019
 
N/A

 
18

 
—

 
—

 
47,655

 
47,655

Total
 
 
 
 
 
 
 
 
 
656,447

 
 
 
$
24,691

 
$
35,661

 
$
111,944

 
$
148,086

________
(a)
This schedule includes future estimates for which we can give no assurance as to timing or amounts. Completed capital projects are included in the Investment Activity – Acquisitions and Completed Capital Projects section. Funding amounts exclude capitalized construction interest.
(b)
Interest earned on the funding for these properties is excluded from the remaining commitments.
(c)
Commitment amounts are based on the foreign exchange rate of the euro at period end.
(d)
This project relates to a jointly owned investment that we consolidate, and in which our affiliate, CPA:17 – Global, has a 36.52% equity interest. Funding and commitment amounts are presented on a pro rata basis. On a consolidated basis, (i) both the amount funded during the three months ended December 31, 2017 and total amount funded through December 31, 2017 was $1.5 million, (ii) the remaining commitment was $12.1 million and (iii) the total maximum commitment was $13.6 million.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 22

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Investment Activity – Acquisitions and Completed Capital Projects
Dollars in thousands. Pro rata. For the year ended December 31, 2017.
 
 
 
 
Gross Investment Amount
 
Closing Date / Asset Completion Date
 
Property
Type(s)
 
Gross Square Footage
Tenant / Lease Guarantor
 
Property Location(s)
 
 
 
 
Acquisitions
 
 
 
 
 
 
 
 
 
 
1Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
 
 
 
 
Griffith Foods Group Inc. (a)
 
Chicago, IL
 
$
6,000

 
Jun-17
 
Industrial
 
84,174

2Q17 Total
 
 
 
6,000

 
 
 
 
 
84,174

 
 
 
 


 
 
 
 
 


3Q17 (N/A)
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q17
 
 
 


 
 
 
 
 
 
Veritas Technologies LLC
 
Roseville, MN
 
25,846

 
Nov-17
 
Office
 
136,125

4Q17 Total
 
 
 
25,846

 
 
 
 
 
136,125

 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total
 
 
 
31,846

 
 
 
 
 
220,299

 
 
 
 
 
 
 
 
 
 
 
Completed Capital Projects
 
 
 
 
 
 
1Q17
 
 
 
 
 
 
 
 
 
 
Carl Leipold GmbH
 
Windsor, CT
 
3,302

 
Mar-17
 
Industrial
 
22,704

1Q17 Total
 
 
 
3,302

 
 
 
 
 
22,704

 
 
 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
 
 
 
 
Nord Anglia Education, Inc.
 
Coconut Creek, FL
 
17,764

 
Apr-17
 
Education Facility
 
40,000

Inghams Enterprises Pty. Limited (b)
 
Monarto, Australia
 
15,082

 
May-17
 
Industrial
 
386,705

Gestamp Automocion, S.L.
 
McCalla, AL
 
21,476

 
May-17
 
Industrial
 
178,000

2Q17 Total
 
 
 
54,322

 
 
 
 
 
604,705

 
 
 
 
 
 
 
 
 
 
 
3Q17 (N/A)
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q17
 
 
 


 
 
 
 
 
 
Banco Santander, S.A. (b)
 
Mönchengladbach, Germany
 
6,421

 
Dec-17
 
Parking Garage
 
N/A

 
 
 
 
6,421

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total
 
 
 
64,045

 
 
 
 
 
627,409

 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions and Completed Capital Projects
 
$
95,891

 
 
 
 
 
847,708

________
(a)
We also committed to fund an additional $3.6 million of building improvements.
(b)
Amount reflects the applicable exchange rate on the date of the transaction.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 23

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Investment Activity – Dispositions
Dollars in thousands. Pro rata. For the year ended December 31, 2017.


Tenant / Lease Guarantor
 
Property Location(s)
 
Gross Sale Price
 
Closing Date
 
Property
Type(s)
 
Gross Square Footage
1Q17
 
 
 
 
 
 
 
 
 
 
Vacant (2 properties) (a) (b)
 
Espoo, Finland
 
$
28,122

 
Jan-17
 
Office
 
466,483

DuraFiber Technologies (a)
 
Bad Hersfeld, Germany
 
24,083

 
Jan-17
 
Industrial, Office, Warehouse
 
858,958

Vacant (a)
 
Doncaster, United Kingdom
 
626

 
Feb-17
 
Land
 
N/A

1Q17 Total
 
 
 
52,831

 
 
 
 
 
1,325,441

 
 
 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
 
 
 
 
Vacant
 
Houston, TX
 
1,375

 
May-17
 
Warehouse
 
25,125

Vacant
 
Glendale Heights, IL
 
2,125

 
May-17
 
Office
 
35,455

Bouygues Telecom and Grand-Est International Campus (a)                     
 
Illkirch-Graffenstaden, France
 
5,150

 
May-17
 
Office
 
72,163

Pendragon PLC (2 properties) (a) (c)                       
 
Doncaster and Newport, United Kingdom
 
11,478

 
Jun-17
 
Retail
 
34,429

2Q17 Total
 
 
 
20,128

 
 
 
 
 
167,172

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3Q17
 
 
 
 
 
 
 
 
 
 
Bestop, Inc. and Servtech, Inc. (d)
 
Louisville, CO
 
25,560

 
Jul-17
 
Industrial
 
403,871

IDS Group Ltd. (a)
 
Shah Alam, Malaysia
 
21,351

 
Aug-17
 
Industrial
 
374,751

Pendragon PLC (a) (c)
 
Cheltenham, United Kingdom
 
4,312

 
Aug-17
 
Retail
 
10,630

Vacant (a)
 
Leeds, United Kingdom
 
4,379

 
Aug-17
 
Industrial, Office
 
199,618

Moog, Inc.
 
Radford, VA
 
3,975

 
Sep-17
 
Industrial
 
68,631

3Q17 Total
 
 
 
59,577

 
 
 
 
 
1,057,501

 
 
 
 
 
 
 
 
 
 
 
4Q17
 
 
 
 
 
 
 
 
 
 
Vacant
 
Yakima, WA
 
400

 
Nov-17
 
Warehouse
 
11,165

Actuant Corporation (a)
 
Kahl, Germany
 
18,026

 
Dec-17
 
Industrial
 
305,692

Vacant
 
Citrus Heights, CA
 
4,000

 
Dec-17
 
Retail
 
89,760

IDS Group Ltd. (2 properties) (a)
 
Lam Luk Ka and Bang Pa-in, Thailand
 
36,641

 
Dec-17
 
Warehouse
 
772,822

4Q17 Total
 
 
 
59,067

 
 
 
 
 
1,179,439

 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total Dispositions
 
$
191,603

 
 
 
 
 
3,729,553

________
(a)
Amount reflects the applicable exchange rate on the date of the transaction.
(b)
In January 2017, we transferred ownership of these properties and the related non-recourse mortgage loan to the mortgage lender. Amount represents the carrying value of the mortgage loan on date of transfer, less cash held in escrow that was retained by the mortgage lender.
(c)
Following the disposition of three properties leased to Pendragon PLC during the year ended December 31, 2017, we still own a portfolio of 70 properties leased to that tenant.
(d)
This multi-tenant property had approximately 197,000 vacant square feet as of the date of disposition.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 24

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Joint Ventures
Dollars in thousands. As of December 31, 2017.
Joint Venture or JV
(Principal Tenant)
 
JV Partnership
 
Consolidated
 
Pro Rata (a)
 
Partner
 
WPC %
 
Debt Outstanding (b)
 
ABR
 
Debt Outstanding (c)
 
ABR
Unconsolidated Joint Ventures (Equity Method Investments) (d)
 
 
 
 
 
 
 
 
Wanbishi Archives Co. Ltd. (e)
 
CPA:17 – Global
 
3.00%
 
$
—

 
$
2,710

 
$
—

 
$
81

Jumbo Logistiek Vastgoed B.V. (e)
 
CPA:17 – Global
 
15.00%
 
76,518

 
14,742

 
11,478

 
2,211

ALSO Actebis GmbH (e)
 
CPA:17 – Global
 
30.00%
 
—

 
3,988

 
—

 
1,196

Wagon Automotive GmbH (e)
 
CPA:17 – Global
 
33.33%
 
—

 
3,448

 
—

 
1,149

Frontier Spinning Mills, Inc.
 
CPA:17 – Global
 
40.00%
 
—

 
5,237

 
—

 
2,095

The New York Times Company
 
CPA:17 – Global
 
45.00%
 
101,093

 
27,247

 
45,492

 
12,261

Total Unconsolidated Joint Ventures
 
 
 
177,611

 
57,372

 
56,970

 
18,993

 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Joint Ventures
 
 
 
 
 
 
 
 
 
 
 
Berry Global Inc. (f)
 
CPA:17 – Global
 
50.00%
 
23,396

 
7,426

 
11,698

 
3,713

Tesco Global Aruhazak Zrt. (e)
 
CPA:17 – Global
 
51.00%
 
36,599

 
6,932

 
18,665

 
3,535

Dick’s Sporting Goods, Inc. (f)
 
CPA:17 – Global
 
55.10%
 
18,936

 
3,559

 
10,434

 
1,961

Hellweg Die Profi-Baumärkte GmbH & Co. KG (e) (f)
 
CPA:17 – Global
 
63.48%
 
—

 
33,387

 
—

 
21,194

Eroski Sociedad Cooperativa (e)
 
CPA:17 – Global
 
70.00%
 
—

 
2,510

 
—

 
1,757

U-Haul Moving Partners, Inc. and Mercury Partners, LP
 
CPA:17 – Global
 
88.46%
 
—

 
36,008

 
—

 
31,853

McCoy-Rockford, Inc.
 
Third party
 
90.00%
 
3,433

 
857

 
3,089

 
771

Total Consolidated Joint Ventures
 
 
 
82,364

 
90,679

 
43,886

 
64,784

Total Unconsolidated and Consolidated Joint Ventures
 
$
259,975

 
$
148,051

 
$
100,856

 
$
83,777

________
(a)
See the Terms and Definitions section in the Appendix for a description of pro rata.
(b)
Excludes unamortized deferred financing costs totaling $0.7 million and unamortized premium, net totaling $0.3 million as of December 31, 2017.
(c)
Excludes unamortized deferred financing costs totaling $0.2 million and unamortized premium, net totaling $0.1 million as of December 31, 2017.
(d)
Excludes a preferred equity position in a jointly owned investment, Beach House JV, LLC, which did not have debt outstanding or ABR as of December 31, 2017.
(e)
Amounts are based on the applicable exchange rate at the end of the period.
(f)
Excludes certain properties leased to the tenants that we consolidate and in which we have a 100% ownership interest.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 25

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Top Ten Tenants
Dollars in thousands. Pro rata. As of December 31, 2017.
Tenant / Lease Guarantor
 
Property Type
 
Tenant Industry
 
Location
 
Number of Properties
 
ABR
 
ABR Percent
 
Weighted-Average Lease Term (Years)
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)
 
Retail
 
Retail Stores
 
Germany
 
53

 
$
36,375

 
5.3
%
 
16.2

U-Haul Moving Partners Inc. and Mercury Partners, LP
 
Self Storage
 
Cargo Transportation, Consumer Services
 
United States
 
78

 
31,853

 
4.7
%
 
6.3

State of Andalucia (a)
 
Office
 
Sovereign and Public Finance
 
Spain
 
70

 
29,163

 
4.3
%
 
17.0

Pendragon PLC (a)
 
Retail
 
Retail Stores, Consumer Services
 
United Kingdom
 
70

 
22,266

 
3.3
%
 
12.3

Marriott Corporation
 
Hotel
 
Hotel, Gaming and Leisure
 
United States
 
18

 
20,065

 
2.9
%
 
5.9

Forterra Building Products (a) (b)
 
Industrial
 
Construction and Building
 
United States and Canada
 
49

 
17,496

 
2.6
%
 
18.3

OBI Group (a)
 
Office, Retail
 
Retail Stores
 
Poland
 
18

 
16,565

 
2.4
%
 
6.4

True Value Company
 
Warehouse
 
Retail Stores
 
United States
 
7

 
15,680

 
2.3
%
 
5.0

UTI Holdings, Inc.
 
Education Facility
 
Consumer Services
 
United States
 
5

 
14,484

 
2.1
%
 
4.2

ABC Group Inc. (c)
 
Industrial, Office, Warehouse
 
Automotive
 
Canada, Mexico and United States
 
14

 
14,110

 
2.1
%
 
18.9

Total (d)
 
 
 
 
 
 
 
382

 
$
218,057

 
32.0
%
 
11.5

________
(a)
ABR amounts are subject to fluctuations in foreign currency exchange rates.
(b)
Of the 49 properties leased to Forterra Building Products, 44 are located in the United States and five are located in Canada.
(c)
Of the 14 properties leased to ABC Group Inc., six are located in Canada, four are located in Mexico and four are located in the United States, subject to three master leases all denominated in U.S. dollars.
(d)
See the Terms and Definitions section in the Appendix for a description of pro rata.


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 26

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Diversification by Property Type
In thousands, except percentages. Pro rata. As of December 31, 2017.
 
 
Total Net-Lease Portfolio
 
 
Unencumbered Net-Lease Portfolio (a)
Property Type
 
ABR
 
 ABR Percent
 
Square Footage (b)
 
Sq. ft. Percent
 
 
ABR
 
 ABR Percent
 
Square Footage (b)
 
Sq. ft. Percent
U.S.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Industrial
 
$
139,580

 
20.5
%
 
27,867

 
32.8
%
 
 
$
76,969

 
17.8
%
 
16,650

 
29.6
%
Office
 
105,566

 
15.5
%
 
6,419

 
7.6
%
 
 
44,597

 
10.3
%
 
3,095

 
5.5
%
Retail
 
28,051

 
4.1
%
 
2,121

 
2.5
%
 
 
15,974

 
3.7
%
 
1,260

 
2.3
%
Warehouse
 
74,641

 
11.0
%
 
14,859

 
17.5
%
 
 
38,206

 
8.9
%
 
7,779

 
13.8
%
Self Storage
 
31,853

 
4.7
%
 
3,535

 
4.2
%
 
 
31,853

 
7.4
%
 
3,535

 
6.3
%
Other (c)
 
68,638

 
10.1
%
 
4,344

 
5.1
%
 
 
31,498

 
7.3
%
 
1,872

 
3.3
%
U.S. Total
 
448,329

 
65.9
%
 
59,145

 
69.7
%
 
 
239,097

 
55.4
%
 
34,191

 
60.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Industrial
 
62,774

 
9.2
%
 
10,451

 
12.3
%
 
 
61,328

 
14.2
%
 
10,269

 
18.3
%
Office
 
64,718

 
9.5
%
 
4,715

 
5.5
%
 
 
51,241

 
11.9
%
 
4,119

 
7.3
%
Retail
 
84,493

 
12.4
%
 
7,569

 
8.9
%
 
 
68,095

 
15.8
%
 
5,762

 
10.3
%
Warehouse
 
20,358

 
3.0
%
 
3,019

 
3.6
%
 
 
11,617

 
2.7
%
 
1,867

 
3.3
%
Self Storage
 
—

 
—
%
 
—

 
—
%
 
 
—

 
—
%
 
—

 
—
%
Other
 
—

 
—
%
 
—

 
—
%
 
 
—

 
—
%
 
—

 
—
%
International Total
 
232,343

 
34.1
%
 
25,754

 
30.3
%
 
 
192,281

 
44.6
%
 
22,017

 
39.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Industrial
 
202,354

 
29.7
%
 
38,318

 
45.1
%
 
 
138,297

 
32.0
%
 
26,919

 
47.9
%
Office
 
170,284

 
25.0
%
 
11,134

 
13.1
%
 
 
95,838

 
22.2
%
 
7,214

 
12.8
%
Retail
 
112,544

 
16.5
%
 
9,690

 
11.4
%
 
 
84,069

 
19.5
%
 
7,022

 
12.6
%
Warehouse
 
94,999

 
14.0
%
 
17,878

 
21.1
%
 
 
49,823

 
11.6
%
 
9,646

 
17.1
%
Self Storage
 
31,853

 
4.7
%
 
3,535

 
4.2
%
 
 
31,853

 
7.4
%
 
3,535

 
6.3
%
Other (c)
 
68,638

 
10.1
%
 
4,344

 
5.1
%
 
 
31,498

 
7.3
%
 
1,872

 
3.3
%
Total (d)
 
$
680,672

 
100.0
%
 
84,899

 
100.0
%
 
 
$
431,378

 
100.0
%
 
56,208

 
100.0
%
________
(a)
Represents properties unencumbered by non-recourse mortgage debt.
(b)
Includes square footage for vacant properties.
(c)
Includes ABR from tenants with the following property types: education facility, hotel, theater, fitness facility and net-lease student housing.
(d)
See the Terms and Definitions section in the Appendix for a description of pro rata.


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 27

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Diversification by Tenant Industry
In thousands, except percentages. Pro rata. As of December 31, 2017.
 
 
Total Net-Lease Portfolio
 
 
Unencumbered Net-Lease Portfolio (a)
Industry Type
 
ABR
 
 ABR Percent
 
Square Footage
 
Sq. ft. Percent
 
 
ABR
 
 ABR Percent
 
Square Footage
 
Sq. ft. Percent
Retail Stores (b)
 
$
120,061

 
17.6
%
 
14,916

 
17.6
%
 
 
$
71,616

 
16.6
%
 
7,559

 
13.4
%
Consumer Services
 
71,640

 
10.5
%
 
5,604

 
6.6
%
 
 
54,733

 
12.7
%
 
4,345

 
7.7
%
Automotive
 
56,162

 
8.3
%
 
9,044

 
10.7
%
 
 
49,583

 
11.5
%
 
7,910

 
14.1
%
Sovereign and Public Finance
 
43,522

 
6.4
%
 
3,411

 
4.0
%
 
 
32,853

 
7.6
%
 
3,000

 
5.3
%
Construction and Building
 
37,093

 
5.4
%
 
8,142

 
9.6
%
 
 
25,384

 
5.9
%
 
6,170

 
11.0
%
Hotel, Gaming and Leisure
 
35,368

 
5.2
%
 
2,254

 
2.7
%
 
 
15,215

 
3.5
%
 
1,040

 
1.8
%
Beverage, Food and Tobacco
 
31,230

 
4.6
%
 
6,876

 
8.1
%
 
 
26,652

 
6.2
%
 
6,218

 
11.1
%
Cargo Transportation
 
29,063

 
4.3
%
 
3,860

 
4.5
%
 
 
22,606

 
5.2
%
 
3,423

 
6.1
%
Healthcare and Pharmaceuticals
 
28,329

 
4.2
%
 
2,048

 
2.4
%
 
 
14,413

 
3.3
%
 
1,119

 
2.0
%
High Tech Industries
 
28,264

 
4.2
%
 
2,490

 
2.9
%
 
 
18,603

 
4.3
%
 
1,533

 
2.7
%
Containers, Packaging and Glass
 
27,517

 
4.0
%
 
5,325

 
6.3
%
 
 
7,876

 
1.8
%
 
1,556

 
2.8
%
Media: Advertising, Printing and Publishing
 
24,153

 
3.5
%
 
1,588

 
1.9
%
 
 
5,787

 
1.4
%
 
655

 
1.2
%
Capital Equipment
 
22,720

 
3.3
%
 
3,731

 
4.4
%
 
 
16,721

 
3.9
%
 
2,494

 
4.4
%
Business Services
 
14,294

 
2.1
%
 
1,739

 
2.0
%
 
 
10,138

 
2.4
%
 
1,482

 
2.6
%
Grocery
 
11,515

 
1.7
%
 
1,228

 
1.5
%
 
 
4,979

 
1.2
%
 
388

 
0.7
%
Durable Consumer Goods
 
11,509

 
1.7
%
 
2,485

 
2.9
%
 
 
3,381

 
0.8
%
 
1,139

 
2.0
%
Wholesale
 
10,893

 
1.6
%
 
1,799

 
2.1
%
 
 
5,084

 
1.2
%
 
880

 
1.6
%
Aerospace and Defense
 
10,609

 
1.6
%
 
1,115

 
1.3
%
 
 
6,563

 
1.5
%
 
788

 
1.4
%
Banking
 
10,453

 
1.5
%
 
702

 
0.8
%
 
 
2,745

 
0.6
%
 
105

 
0.2
%
Chemicals, Plastics and Rubber
 
9,379

 
1.4
%
 
1,108

 
1.3
%
 
 
3,131

 
0.7
%
 
437

 
0.8
%
Metals and Mining
 
9,209

 
1.4
%
 
1,341

 
1.6
%
 
 
3,527

 
0.8
%
 
772

 
1.4
%
Non-Durable Consumer Goods
 
8,159

 
1.2
%
 
1,883

 
2.2
%
 
 
5,922

 
1.4
%
 
1,355

 
2.4
%
Oil and Gas
 
8,006

 
1.2
%
 
333

 
0.4
%
 
 
8,006

 
1.9
%
 
333

 
0.6
%
Telecommunications
 
7,068

 
1.0
%
 
418

 
0.5
%
 
 
3,215

 
0.7
%
 
167

 
0.3
%
Other (c)
 
14,456

 
2.1
%
 
1,459

 
1.7
%
 
 
12,645

 
2.9
%
 
1,340

 
2.4
%
Total (d)
 
$
680,672


100.0
%

84,899

 
100.0
%
 

$
431,378


100.0
%

56,208


100.0
%
________
(a)
Represents properties unencumbered by non-recourse mortgage debt.
(b)
Includes automotive dealerships.
(c)
Includes ABR from tenants in the following industries: insurance, electricity, media: broadcasting and subscription, forest products and paper and environmental industries. Also includes square footage for vacant properties.
(d)
See the Terms and Definitions section in the Appendix for a description of pro rata.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 28

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Diversification by Geography
In thousands, except percentages. Pro rata. As of December 31, 2017.
 
 
Total Net-Lease Portfolio
 
 
Unencumbered Net-Lease Portfolio (a)
Region
 
ABR
 
 ABR Percent
 
Square Footage (b)
 
Sq. ft. Percent
 
 
ABR
 
 ABR Percent
 
Square Footage (b)
 
Sq. ft. Percent
U.S.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
South
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Texas
 
$
56,704

 
8.3
%
 
8,192

 
9.6
%
 
 
$
31,847

 
7.4
%
 
5,240

 
9.3
%
Florida
 
29,419

 
4.3
%
 
2,657

 
3.1
%
 
 
26,273

 
6.1
%
 
2,401

 
4.3
%
Georgia
 
21,535

 
3.2
%
 
3,293

 
3.9
%
 
 
16,372

 
3.8
%
 
2,426

 
4.3
%
Tennessee
 
15,520

 
2.3
%
 
2,306

 
2.7
%
 
 
5,615

 
1.3
%
 
1,250

 
2.2
%
Other (c)
 
11,310

 
1.7
%
 
2,279

 
2.7
%
 
 
10,661

 
2.4
%
 
2,120

 
3.8
%
Total South
 
134,488

 
19.8
%
 
18,727

 
22.0
%
 
 
90,768

 
21.0
%
 
13,437

 
23.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
East
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North Carolina
 
19,856

 
2.9
%
 
4,518

 
5.3
%
 
 
13,056

 
3.0
%
 
3,238

 
5.8
%
Pennsylvania
 
18,880

 
2.8
%
 
2,525

 
3.0
%
 
 
10,270

 
2.4
%
 
1,583

 
2.8
%
New Jersey
 
18,768

 
2.8
%
 
1,097

 
1.3
%
 
 
8,330

 
1.9
%
 
601

 
1.1
%
New York
 
18,258

 
2.7
%
 
1,178

 
1.4
%
 
 
758

 
0.2
%
 
66

 
0.1
%
Massachusetts
 
15,481

 
2.3
%
 
1,390

 
1.6
%
 
 
11,239

 
2.6
%
 
1,163

 
2.1
%
Virginia
 
7,630

 
1.1
%
 
1,025

 
1.2
%
 
 
5,339

 
1.2
%
 
428

 
0.8
%
Connecticut
 
6,949

 
1.0
%
 
1,135

 
1.3
%
 
 
1,999

 
0.5
%
 
251

 
0.4
%
Other (c)
 
18,019

 
2.6
%
 
3,782

 
4.5
%
 
 
7,842

 
1.8
%
 
2,093

 
3.7
%
Total East
 
123,841

 
18.2
%
 
16,650

 
19.6
%
 
 
58,833

 
13.6
%
 
9,423

 
16.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
West
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
California
 
41,296

 
6.1
%
 
3,213

 
3.8
%
 
 
12,861

 
3.0
%
 
1,252

 
2.2
%
Arizona
 
26,860

 
3.9
%
 
3,049

 
3.6
%
 
 
8,417

 
2.0
%
 
685

 
1.2
%
Colorado
 
9,941

 
1.5
%
 
864

 
1.0
%
 
 
6,264

 
1.5
%
 
509

 
0.9
%
Other (c)
 
26,665

 
3.9
%
 
3,230

 
3.8
%
 
 
16,950

 
3.9
%
 
1,948

 
3.5
%
Total West
 
104,762

 
15.4
%
 
10,356

 
12.2
%
 
 
44,492

 
10.4
%
 
4,394

 
7.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Midwest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Illinois
 
21,839

 
3.2
%
 
3,295

 
3.9
%
 
 
8,118

 
1.9
%
 
1,727

 
3.1
%
Michigan
 
12,244

 
1.8
%
 
1,456

 
1.7
%
 
 
12,244

 
2.8
%
 
1,456

 
2.6
%
Indiana
 
9,331

 
1.4
%
 
1,418

 
1.7
%
 
 
3,205

 
0.7
%
 
433

 
0.8
%
Minnesota
 
8,896

 
1.3
%
 
947

 
1.1
%
 
 
6,202

 
1.4
%
 
551

 
1.0
%
Ohio
 
8,621

 
1.3
%
 
1,911

 
2.3
%
 
 
4,639

 
1.1
%
 
1,048

 
1.8
%
Other (c)
 
24,307

 
3.5
%
 
4,385

 
5.2
%
 
 
10,596

 
2.5
%
 
1,722

 
3.0
%
Total Midwest
 
85,238

 
12.5
%
 
13,412

 
15.9
%
 
 
45,004

 
10.4
%
 
6,937

 
12.3
%
U.S. Total
 
448,329

 
65.9
%
 
59,145

 
69.7
%
 
 
239,097

 
55.4
%
 
34,191

 
60.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Germany
 
58,860

 
8.6
%
 
5,967

 
7.0
%
 
 
55,348

 
12.8
%
 
5,755

 
10.2
%
United Kingdom
 
34,465

 
5.1
%
 
2,324

 
2.7
%
 
 
32,388

 
7.5
%
 
2,111

 
3.8
%
Spain
 
30,920

 
4.5
%
 
2,927

 
3.4
%
 
 
30,920

 
7.2
%
 
2,927

 
5.2
%
Poland
 
18,623

 
2.7
%
 
2,189

 
2.6
%
 
 
2,059

 
0.5
%
 
362

 
0.7
%
The Netherlands
 
15,654

 
2.3
%
 
2,233

 
2.6
%
 
 
12,369

 
2.9
%
 
1,792

 
3.2
%
France
 
14,772

 
2.2
%
 
1,266

 
1.5
%
 
 
6,552

 
1.5
%
 
1,025

 
1.8
%
Finland
 
13,237

 
1.9
%
 
1,121

 
1.3
%
 
 
11,946

 
2.8
%
 
949

 
1.7
%
Canada
 
12,807

 
1.9
%
 
2,196

 
2.6
%
 
 
12,807

 
3.0
%
 
2,196

 
3.9
%
Australia
 
12,786

 
1.9
%
 
3,272

 
3.9
%
 
 
12,786

 
2.9
%
 
3,272

 
5.8
%
Other (d)
 
20,219

 
3.0
%
 
2,259

 
2.7
%
 
 
15,106

 
3.5
%
 
1,628

 
2.9
%
International Total
 
232,343

 
34.1
%
 
25,754

 
30.3
%
 

192,281

 
44.6
%
 
22,017

 
39.2
%
Total (e)
 
$
680,672

 
100.0
%
 
84,899

 
100.0
%
 

$
431,378

 
100.0
%
 
56,208

 
100.0
%
________

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 29

W. P. Carey Inc.
Owned Real Estate Portfolio – Fourth Quarter 2017

(a)
Represents properties unencumbered by non-recourse mortgage debt.
(b)
Includes square footage for vacant properties.
(c)
Other properties within South include assets in Alabama, Louisiana, Arkansas, Mississippi and Oklahoma. Other properties within East include assets in Kentucky, South Carolina, Maryland, New Hampshire and West Virginia. Other properties within West include assets in Utah, Washington, Nevada, Oregon, New Mexico, Wyoming, Alaska and Montana. Other properties within Midwest include assets in Missouri, Kansas, Wisconsin, Nebraska, Iowa, South Dakota and North Dakota.
(d)
Includes assets in Norway, Hungary, Austria, Mexico, Sweden, Belgium and Japan.
(e)
See the Terms and Definitions section in the Appendix for a description of pro rata.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 30

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Contractual Rent Increases
In thousands, except percentages. Pro rata. As of December 31, 2017.
 
 
Total Net-Lease Portfolio
 
 
Unencumbered Net-Lease Portfolio (a)
Rent Adjustment Measure
 
ABR
 
 ABR Percent
 
Square Footage
 
Sq. ft. Percent
 
 
ABR
 
 ABR Percent
 
Square Footage
 
Sq. ft. Percent
(Uncapped) CPI
 
$
291,142

 
42.7
%
 
34,673

 
40.8
%
 
 
$
196,261

 
45.5
%
 
22,570

 
40.3
%
Fixed
 
182,772

 
26.9
%
 
25,297

 
29.8
%
 
 
111,416

 
25.8
%
 
16,718

 
29.7
%
CPI-based
 
173,268

 
25.5
%
 
22,364

 
26.3
%
 
 
110,611

 
25.6
%
 
15,745

 
28.0
%
Other (b)
 
26,755

 
3.9
%
 
1,837

 
2.2
%
 
 
10,655

 
2.5
%
 
801

 
1.4
%
None
 
6,735

 
1.0
%
 
588

 
0.7
%
 
 
2,435

 
0.6
%
 
234

 
0.4
%
Vacant
 
—

 
—
%
 
140

 
0.2
%
 
 
—

 
—
%
 
140

 
0.2
%
Total (c)
 
$
680,672

 
100.0
%
 
84,899

 
100.0
%
 
 
$
431,378

 
100.0
%
 
56,208

 
100.0
%
________
(a)
Represents properties unencumbered by non-recourse mortgage debt.
(b)
Represents leases attributable to percentage rent.
(c)
See the Terms and Definitions section in the Appendix for a description of pro rata.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 31

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Same Store Analysis
Dollars in thousands. Pro rata.

Same store portfolio includes leases that were continuously in place during the period from December 31, 2016 to December 31, 2017. Excludes leases for properties that were acquired, sold or vacated, or were subject to lease renewals, extensions or modifications at any time that affected ABR during that period. For purposes of comparability, ABR is presented on a constant currency basis using exchange rates as of December 31, 2017.
 
 
ABR
 
Percent
Property Type
 
As of
Dec. 31, 2017
 
As of
Dec. 31, 2016
 
Increase
 
Increase
Industrial
 
$
187,941

 
$
183,003

 
$
4,938

 
2.7
%
Office
 
159,720

 
158,206

 
1,514

 
1.0
%
Retail
 
95,413

 
94,126

 
1,287

 
1.4
%
Warehouse
 
93,776

 
91,509

 
2,267

 
2.5
%
Self Storage
 
31,853

 
31,853

 
—

 
—
%
Other (a)
 
59,253

 
58,671

 
582

 
1.0
%
Total
 
$
627,956

 
$
617,368

 
$
10,588

 
1.7
%
 
 
 
 
 
 
 
 
 
Rent Adjustment Measure
 
 
 
 
 
 
 
 
(Uncapped) CPI
 
$
267,044

 
$
263,955

 
$
3,089

 
1.2
%
Fixed
 
166,703

 
162,759

 
3,944

 
2.4
%
CPI-based
 
160,838

 
157,285

 
3,553

 
2.3
%
Other (b)
 
26,755

 
26,753

 
2

 
—
%
None
 
6,616

 
6,616

 
—

 
—
%
Total
 
$
627,956

 
$
617,368

 
$
10,588

 
1.7
%
 
 
 
 
 
 
 
 
 
Geography
 
 
 
 
 
 
 
 
U.S.
 
$
410,560

 
$
403,343

 
$
7,217

 
1.8
%
Europe
 
191,546

 
188,774

 
2,772

 
1.5
%
Other International (c)
 
25,850

 
25,251

 
599

 
2.4
%
Total
 
$
627,956

 
$
617,368

 
$
10,588

 
1.7
%
 
 
 
 
 
 
 
 
 
Same Store Portfolio Summary
 
 
 
 
 
 
 
 
Number of properties
 
842

 
 
 
 
 
 
Square footage (in thousands)
 
78,996

 
 
 
 
 
 
________
(a)
Includes ABR from tenants with the following property types: education facility, hotel, theater, fitness facility and net-lease student housing.
(b)
Represents leases attributable to percentage rent.
(c)
Includes assets in Canada, Australia, Mexico and Japan.


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 32

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Leasing Activity
For the three months ended December 31, 2017, except ABR. Pro rata.
Lease Renewals and Extensions
 
 
 
 
 
 
 
Expected Tenant Improvements ($’000s)
 
Leasing Commissions ($’000s)
 
Expected Capital Investments ($’000s)
 
 
 
 
 
 
 
 
ABR
 
 
 
 
 
Property Type
 
Square Feet
 
Number of Leases
 
Prior Lease ($’000s)
 
New Lease ($'000s) (a)
 
Releasing Spread
 
 
 
 
Incremental Lease Term
Industrial
 
554,930

 
2

 
$
3,091

 
$
2,373

 
(23.2
)%
 
$
525

 
$
722

 
$
—

 
11.8 years
Office
 
—

 
—

 
—

 
—

 
—
 %
 
—

 
—

 
—

 
N/A
Retail (b)
 
2,123,591

 
1

 
21,248

 
20,793

 
(2.1
)%
 
—

 
—

 
8,440

 
7 years
Warehouse
 
229,960

 
1

 
593

 
593

 
—
 %
 
—

 
—

 
—

 
3 years
Self Storage
 
—

 
—

 
—

 
—

 
—
 %
 
—

 
—

 
—

 
N/A
Other
 
—

 
—

 
—

 
—

 
—
 %
 
—

 
—

 
—

 
N/A
Total / Weighted Average (c)
 
2,908,481

 
4

 
$
24,932

 
$
23,759

 
(4.7
)%
 
$
525

 
$
722

 
$
8,440

 
7.6 years
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior Lease ABR (% of Total Portfolio)
 
3.7
%
 
 
 
 
 
 
 
 
 
 
 
 

New Leases
 
 
 
 
 
 
 
Expected Tenant Improvements ($’000s)
 
Leasing Commissions ($’000s)
 
Expected Capital Investments
($’000s)
 
 
 
 
 
 
 
 
ABR
 
 
 
 
 
Property Type
 
Square Feet
 
Number of Leases
 
New Lease ($'000s) (a)
 
 
 
 
New Lease Term
Industrial
 
—

 
—

 
$
—

 
$
—

 
$
—

 
$
—

 
N/A
Office (d)
 
259,980

 
2

 
8,490

 
—

 
5,162

 
47,655

 
18.5 years
Retail
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A
Warehouse
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A
Self Storage
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A
Other
 
—

 
—

 
—

 
—

 
—

 
—

 
N/A
Total / Weighted Average (e)
 
259,980

 
2

 
$
8,490

 
$
—

 
$
5,162

 
$
47,655

 
18.5 years
________
(a)
New Lease amounts are based on in-place rents at time of lease commencement and exclude any free rent periods.
(b)
Expected capital investment amount is based on the foreign exchange rate of the euro on the date that the lease extension was executed.
(c)
Weighted average refers to the incremental lease term.
(d)
Expected capital investments amount excludes $4.0 million related to a construction option that has not yet been exercised by a tenant.
(e)
Weighted average refers to the new lease term.


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 33

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Lease Expirations – Total Net-Lease Portfolio
In thousands, except percentages and number of leases. Pro rata. As of December 31, 2017.
Year of Lease Expiration (a)
 
Number of Leases Expiring
 
ABR
 
ABR
Percent
 
Square Footage
 
Sq. ft.
Percent
2018 (b)
 
4

 
$
9,394

 
1.4
%
 
912

 
1.1
%
2019
 
20

 
27,820

 
4.1
%
 
2,419

 
2.8
%
2020
 
24

 
33,439

 
4.9
%
 
3,343

 
3.9
%
2021
 
80

 
40,900

 
6.0
%
 
6,301

 
7.4
%
2022
 
41

 
70,270

 
10.3
%
 
9,451

 
11.1
%
2023
 
21

 
41,567

 
6.1
%
 
5,811

 
6.8
%
2024 (c)
 
43

 
96,171

 
14.1
%
 
11,592

 
13.7
%
2025
 
41

 
31,053

 
4.6
%
 
3,439

 
4.1
%
2026
 
19

 
19,020

 
2.8
%
 
3,159

 
3.7
%
2027
 
26

 
42,998

 
6.3
%
 
6,052

 
7.1
%
2028
 
11

 
22,312

 
3.3
%
 
2,551

 
3.0
%
2029
 
10

 
18,834

 
2.8
%
 
2,562

 
3.0
%
2030
 
10

 
30,007

 
4.4
%
 
2,680

 
3.2
%
2031
 
55

 
34,688

 
5.1
%
 
2,879

 
3.4
%
Thereafter (>2031)
 
45

 
162,199

 
23.8
%
 
21,608

 
25.5
%
Vacant
 
—

 
—

 
—
%
 
140

 
0.2
%
Total (d)
 
450

 
$
680,672

 
100.0
%
 
84,899

 
100.0
%

chart-ea920675695f50f7ab6.jpg
________
(a)
Assumes tenants do not exercise any renewal options.
(b)
One month-to-month lease with ABR of $0.1 million is included in 2018 ABR.
(c)
Includes ABR of $12.3 million from a tenant (The New York Times Company) that exercised its option in January 2018 to repurchase the property it is leasing from a jointly owned investment with our affiliate, CPA:17 – Global, in which we have a 45% equity interest and which is consolidated by CPA:17 – Global. The repurchase is expected to be completed in December 2019, but there can be no assurance that such repurchase will be completed.
(d)
See the Terms and Definitions section in the Appendix for a description of pro rata.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 34

W. P. Carey Inc.
Owned Real Estate – Fourth Quarter 2017
Lease Expirations – Unencumbered Net-Lease Portfolio
In thousands, except percentages and number of leases. Pro rata. As of December 31, 2017.
Year of Lease Expiration (a)
 
Number of Leases Expiring
 
ABR
 
ABR
Percent
 
Square Footage
 
Sq. ft.
Percent
2018 (b)
 
4

 
$
9,394

 
2.2
%
 
913

 
1.6
%
2019
 
12

 
6,931

 
1.6
%
 
1,020

 
1.8
%
2020
 
14

 
15,503

 
3.6
%
 
1,957

 
3.5
%
2021
 
70

 
22,789

 
5.3
%
 
4,180

 
7.5
%
2022
 
28

 
26,615

 
6.2
%
 
4,054

 
7.2
%
2023
 
14

 
13,169

 
3.0
%
 
2,470

 
4.4
%
2024
 
16

 
48,876

 
11.3
%
 
6,302

 
11.2
%
2025
 
32

 
18,113

 
4.2
%
 
1,533

 
2.7
%
2026
 
8

 
11,870

 
2.8
%
 
1,995

 
3.6
%
2027
 
20

 
29,446

 
6.8
%
 
3,794

 
6.7
%
2028
 
8

 
12,623

 
2.9
%
 
1,653

 
2.9
%
2029
 
10

 
18,834

 
4.4
%
 
2,562

 
4.6
%
2030
 
8

 
23,734

 
5.5
%
 
2,082

 
3.7
%
2031
 
54

 
33,817

 
7.8
%
 
2,832

 
5.1
%
Thereafter (>2031)
 
35

 
139,664

 
32.4
%
 
18,721

 
33.3
%
Vacant
 
—

 
—

 
—
%
 
140

 
0.2
%
Total (c) (d)
 
333

 
$
431,378

 
100.0
%
 
56,208

 
100.0
%

chart-b988d00be7c25954a44.jpg
________
(a)
Assumes tenants do not exercise any renewal options.
(b)
One month-to-month lease with ABR of $0.1 million is included in 2018 ABR.
(c)
See the Terms and Definitions section in the Appendix for a description of pro rata.
(d)
Represents properties unencumbered by non-recourse mortgage debt.

wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 35



W. P. Carey Inc.
Investment Management
Fourth Quarter 2017





wpc8ksupplementaldividera13.jpg


wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 36

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Selected Information – Managed Programs
Dollars and square footage in thousands. As of or for the three months ended December 31, 2017.
 
Managed Programs
 
CPA:17 – Global
 
CPA:18 – Global
 
CWI 1
 
CWI 2
 
CESH I
General
 
 
 
 
 
 
 
 
 
Year established
2007

 
2013

 
2010

 
2015

 
2016

AUM (a)
$
5,702,445

 
$
2,387,349

 
$
2,995,049

 
$
1,885,083

 
$
155,126

Net-lease AUM
4,964,413

 
1,454,063

 
N/A

 
N/A

 
N/A

Fundraising status (b)
Closed

 
Closed

 
Closed

 
Closed

 
Closed

 
 
 
 
 
 
 
 
 
 
Portfolio
 
 
 
 
 
 
 
 
 
Investment type
Net lease /
Diversified REIT

 
Net lease /
Diversified REIT

 
Lodging REIT

 
Lodging REIT

 
Student Housing

Number of net-leased properties
411

 
59

 
N/A

 
N/A

 
N/A

Number of operating properties
38

 
79

 
31

 
12

 
9

Number of tenants – net-leased properties (c)
116

 
98

 
N/A

 
N/A

 
N/A

Square footage (c)
47,039

 
16,873

 
6,568

 
3,656

 
N/A

Occupancy (d)
99.7
%
 
99.7
%
 
73.7
%
 
74.1
%
 
N/A

Acquisitions – fourth quarter
$
52,571

 
$
94,586

 
$
—

 
$
—

 
$
—

Dispositions – fourth quarter
—

 
64,847

 
85,500

 
—

 
—

 
 
 
 
 
 
 
 
 
 
Balance Sheet (Book Value)
 
 
 
 
 
 
 
 
 
Total assets
$
4,584,036

 
$
2,332,801

 
$
2,459,810

 
$
1,641,848

 
$
170,054

Total debt
1,951,390

 
1,275,448

 
1,489,550

 
831,329

 
13,381

Total debt / total assets
42.6
%
 
54.7
%
 
60.6
%
 
50.6
%
 
7.9
%
________
(a)
Represents estimated value of real estate assets plus cash and cash equivalents, less distributions payable for the Managed REITs and fair value of investments plus cash for CESH I.
(b)
In connection with our exit from non-traded retail fundraising activities, which we announced in June 2017, we ceased active fundraising for CWI 2 and CESH I, as of June 30, 2017. After we facilitated the orderly processing of remaining sales, CWI 2 and CESH I closed their offerings on July 31, 2017.
(c)
For CPA:17 – Global and CPA:18 – Global, excludes operating properties. For CESH I, the investments are build-to-suit projects, and gross square footage cannot be determined at this time.
(d)
Represents occupancy for net-leased properties for CPA:17 – Global and single-tenant net-leased properties for CPA:18 – Global. Represents occupancy for hotels owned by CWI 1 and CWI 2 for the three months ended December 31, 2017. Occupancy for CPA:17 – Global's 37 self-storage properties was 91.9% as of December 31, 2017. Occupancy for CPA:18 – Global's 69 self-storage properties and 10 multi-family properties was 89.2% and 90.9%, respectively, as of December 31, 2017. CPA:18 – Global’s multi-tenant net-leased properties had an occupancy rate of 92.4% and square footage of 0.5 million as of December 31, 2017.



wpclogoa01a01a25.jpg 
 
Investing for the long runTM | 37

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Managed Programs Fee Summary
Dollars in thousands. For the three months ended December 31, 2017, unless otherwise noted.
 
Managed Programs
 
 
 
CPA:17 – Global
 
CPA:18 – Global
 
CWI 1
 
CWI 2
 
CESH I (a)
 
Total
Year established
2007
 
2013
 
2010
 
2015
 
2016
 
 
Fundraising status
Closed
 
Closed
 
Closed
 
Closed
 
Closed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.
Structuring Fees
 
 
 
 
 
 
 
 
 
 
 
Structuring fee, gross (% of total aggregate cost)
4.50% (b)
 
4.50% (b)
 
2.50%
 
2.50%
 
2.00%
 
 
Net of subadvisor fees (c)
4.50%
 
4.50%
 
2.00%
 
1.875%
 
2.00%
 
 
Gross acquisition volume – fourth quarter
$
52,571

 
$
94,586

 
$
—

 
$
—

 
$
—

 
$
147,157

Structuring revenue – fourth quarter (d)
$
2,255

 
$
3,682

 
$
280

 
$
—

 
$
—

 
$
6,217

 
 
 
 
 
 
 
 
 
 
 
 
2. Asset Management Fees
 
 
 
 
 
 
 
 
 
 
 
Asset management fee, gross (% of average AUM, per annum)
0.50% (e)
 
0.50% (e)
 
0.50% (e)
 
0.55% (e)
 
1.00% (f)
 
 
Net of subadvisor fees (c)
0.50%
 
0.50%
 
0.40%
 
0.41%
 
1.00%
 
 
AUM – current quarter
$
5,702,445

 
$
2,387,349

 
$
2,995,049

 
$
1,885,083

 
$
155,126

 
$
13,125,052

AUM – prior quarter
$
5,765,101

 
$
2,376,029

 
$
3,065,423

 
$
1,883,716

 
$
154,554

 
$
13,244,823

Average AUM
$
5,733,773


$
2,381,689


$
3,030,236


$
1,884,400


$
154,840

 
$
13,184,938

Asset management revenue - fourth quarter (g)
$
7,337

 
$
2,916

 
$
3,722

 
$
2,513

 
$
356

 
$
16,854

 
 
 
 
 
 
 
 
 
 
 
 
3. Operating Partnership Interests (h)
 
 
 
 
 
 
 
 
 
 
 
Operating partnership interests, gross
   (% of Available Cash)
10.00%
 
10.00%
 
10.00%
 
10.00%
 
N/A
 
 
Net of subadvisor fees (c)
10.00%
 
10.00%
 
8.00%
 
7.50%
 
N/A
 
 
Equity in earnings of equity method investments in the Managed Programs and real estate (profits interest) – fourth quarter (i)
$
7,435

 
$
2,593

 
$
1,373

 
$
1,163

 
N/A
 
$
12,564

________
(a)
In addition to the fees shown, we may also receive distributions from CESH I upon liquidation of the fund in an amount potentially equal to 20% of available cash after the limited partners have received certain cumulative distributions.
(b)
Comprised of an initial acquisition fee (generally 2.50% of the total aggregate cost of net-leased properties) paid when the transaction is completed and a subordinated acquisition fee (generally 2.00% of the total aggregate cost of net-leased properties) paid in annual installments over three years, provided certain performance criterion are met. The acquisition fee for other properties is generally 1.75% of the total aggregate cost.
(c)
We earn investment management revenue from CWI 1 and CWI 2 in our role as their advisor. Pursuant to the terms of their subadvisory agreements, however, 20% of the fees we receive from CWI 1 and 25% of the fees we receive from CWI 2 are paid to their respective subadvisors. In connection with the acquisitions of multi-family properties on behalf of CPA:18 – Global, we entered into agreements with third-party advisors for the day-to-day management of the properties for which we pay 100% of asset management fees paid to us by CPA:18 – Global.
(d)
Amounts for CWI 1 and CWI 2 are gross of fees paid to their respective subadvisors. Amount for CWI 1 is related to a mortgage loan refinancing.
(e)
Based on average market value of assets. Under the terms of the respective advisory agreements of the Managed REITs, we may elect to receive cash or shares of CWI 1 and CWI 2’s stock for asset management fees due, while the CPA REITs have an option to pay asset management fees in cash or shares upon our recommendation. Asset management fees are recorded in Asset management revenue in our consolidated financial statements.
(f)
Based on gross assets at fair value.
(g)
Total asset management revenue includes less than $0.1 million representing revenue received from CCIF. CCIF was included in the Managed Programs prior to our resignation as its advisor during the third quarter of 2017. Asset management revenues for CWI 1 and CWI 2 are gross of fees paid to their respective subadvisors.
(h)
Available Cash means cash generated by operating partnership operations and investments, excluding cash from sales and refinancings, after the payment of debt service and other operating expenses, but before distributions to partners. Amounts are recorded in Equity in earnings of equity method investments in the Managed Programs and real estate in our consolidated financial statements.
(i)
Amounts for CWI 1 and CWI 2 are net of fees paid to their respective subadvisors.


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Investing for the long runTM | 38

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Investment Activity – Managed Programs
Dollars in thousands. Pro rata. For the year ended December 31, 2017.
Acquisitions – Net-Leased Properties
 
 
 
Gross Investment Amount
 
 
 
 
 
Gross Square Footage
Portfolio(s)
 
Tenant / Lease Guarantor
 
Property Location(s)
 
 
Closing Date
 
Property
Type(s)
 
1Q17
 
 
 
 
 
 
 
 
 
 
 
 
CPA:17 – Global
 
Angus Chemical
 
Buffalo Grove, IL
 
$
11,463

 
Feb-17
 
Office
 
62,201

CPA:18 – Global (90%)
 
Board of Regents, State of Iowa
 
Iowa City, IA
 
7,342

 
Mar-17
 
Warehouse
 
140,917

1Q17 Total
 
 
 
 
 
18,805

 
 
 
 
 
203,118

 
 
 
 
 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
 
 
 
 
 
 
CPA:17 – Global (70%)
 
Kesko Senukai (19 properties) (a)
 
Various, Lithuania (12 properties); Latvia (4 properties); and Estonia (3 properties)
 
141,480

 
May-17
 
Retail, Warehouse
 
1,585,879

2Q17 Total
 
 
 
 
 
141,480

 
 
 
 
 
1,585,879

 
 
 
 
 
 
 
 
 
 
 
 
 
3Q17
 
 
 
 
 
 
 
 
 
 
 
 
CPA:17 – Global
 
Syncreon Logistics Polska (a) (b)
 
Zary, Poland
 
5,866

 
Jul-17
 
Warehouse, Office
 
BTS

3Q17 Total
 
 
 
 
 
5,866

 
 
 
 
 
BTS

 
 
 
 
 
 
 
 
 
 
 
 
 
4Q17
 
 
 
 
 
 
 
 
 
 
 
 
CPA:17 – Global
 
Harbor Freight Tools USA, Inc. (b)
 
Dillon, SC
 
47,120

 
Oct-17
 
Warehouse
 
BTS

CPA:17 – Global
 
Greenyard Foods NV (a) (b)
 
Zabia Wola, Poland
 
5,451

 
Dec-17
 
Warehouse
 
BTS

4Q17 Total
 
 
 
 
 
52,571

 
 
 
 
 
BTS

 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions – Net-Leased Properties
 
218,722

 
 
 
 
 
1,788,997

Acquisitions – Self-Storage
 
 
 
Gross Investment Amount
 
 
Portfolio(s)
 
Property Location(s)
 
 
Closing Date
1Q17
 
 
 
 
 
 
CPA:18 – Global (a) (b)
 
Toronto, Canada
 
17,634

 
Jan-17
1Q17 Total
 
 
 
17,634

 
 
 
 
 
 
 
 
 
2Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions – Self-Storage Properties
 
17,634

 
 

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Investing for the long runTM | 39

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Investment Activity – Managed Programs (continued)
Dollars in thousands. Pro rata. For the year ended December 31, 2017.
Acquisitions – Student Housing
 
 
 
Gross Investment Amount
 
 
Portfolio(s)
 
Property Location(s)
 
 
Closing Date
1Q17
 
 
 
 
 
 
CPA:18 – Global (97%) (a) (b)
 
Portsmouth, United Kingdom
 
1,273

 
Jan-17
CPA:18 – Global (94.5%) (a) (b)
 
Cardiff, United Kingdom
 
29,932

 
Jan-17
CESH I (a) (b)
 
Madrid, Spain
 
16,045

 
Feb-17
CESH I (a) (b)
 
Lisbon, Portugal
 
27,276

 
Mar-17
1Q17 Total
 
 
 
74,526

 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
CESH I (a) (b)
 
Norwich, United Kingdom
 
79,141

 
Apr-17
CESH I (a) (b)
 
Madrid, Spain
 
70,261

 
May-17
CESH I (a) (b)
 
Porto, Portugal
 
39,403

 
May-17
2Q17 Total
 
 
 
188,805

 
 
 
 
 
 
 
 
 
3Q17
 
 
 
 
 
 
CPA:18 – Global (94.5%) (a) (b)
 
Cardiff, United Kingdom
 
2,382

 
Sep-17
CESH I (a) (b)
 
Granada, Spain
 
27,022

 
Sep-17
CESH I (a) (b)
 
Madrid, Spain
 
28,541

 
Sep-17
CPA:18 – Global (a) (b)
 
Reading, United Kingdom
 
7,623

 
Sep-17
3Q17 Total
 
 
 
65,568

 
 
 
 
 
 
 
 
 
4Q17
 
 
 
 
 
 
CPA:18 – Global (a) (b)
 
Malaga, Spain
 
43,990

 
Oct-17
CPA:18 – Global (97%) (a) (b)
 
Swansea, United Kingdom
 
50,596

 
Nov-17
 
 
 
 
94,586

 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions – Student Housing
 
 
 
423,485

 
 
Acquisitions – Hotels
 
 
 
Gross Investment Amount
 
 
Portfolio(s)
 
Property Location(s)
 
 
Closing Date
1Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
CWI 2 (c)
 
Charlotte, NC
 
175,705

 
Jun-17
2Q17 Total
 
 
 
175,705

 
 
 
 
 
 
 
 
 
3Q17
 
 
 


 
 
CWI 2 (60%); CWI 1 (40%)
 
Santa Barbara, CA
 
412,991

 
Sep-17
3Q17 Total
 
 
 
412,991

 
 
 
 
 
 
 
 
 
4Q17 (N/A)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions – Hotels
 
588,696

 
 
 
 
 
 
 
 
 
Year-to-Date Total Acquisitions
 
 
 
$
1,248,537

 
 

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Investing for the long runTM | 40

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Investment Activity – Managed Programs (continued)
Dollars in thousands. Pro rata. For the year ended December 31, 2017.
Dispositions
 
 
 
 
 
 
Portfolio(s)
 
Property Location(s)
 
Gross Sale Price
 
Closing Date
1Q17
 
 
 
 
 
 
CPA:17 – Global (land sale) (a)
 
Luton, United Kingdom
 
$
314

 
Jan-17
CWI 1 (3 properties)
 
Birmingham, AL; Baton Rouge, LA; and Frisco, TX
 
33,000

 
Feb-17
CPA:17 – Global
 
Houston, TX
 
15,500

 
Mar-17
CPA:17 – Global
 
Orlando, FL
 
117,500

 
Mar-17
1Q17 Total
 
 
 
166,314

 
 
 
 
 
 
 
 
 
2Q17
 
 
 
 
 
 
CWI 1
 
Braintree, MA
 
19,000

 
May-17
CPA:17 – Global (2 properties)
 
Lima and Miamisburg, OH
 
5,029

 
Jun-17
CPA:17 – Global (a)
 
Pordenone, Italy
 
8,277

 
Jun-17
2Q17 Total
 
 
 
32,306

 
 
 
 
 
 
 
 
 
3Q17 (N/A)
 
 
 


 
 
 
 
 
 
 
 
 
4Q17
 
 
 
 
 
 
CPA:18 – Global (a)
 
Reading, United Kingdom
 
64,847

 
Oct-17
CWI 1 (57%) (d)
 
Atlanta, GA
 
85,500

 
Oct-17
4Q17 Total
 
 
 
150,347

 
 
 
 
 
 
 
 
 
Year-to-Date Total Dispositions
 
 
 
$
348,967

 
 
________
(a)
Amount reflects the applicable exchange rate on the date of the transaction.
(b)
Acquisition includes a build-to-suit transaction. Purchase price represents total commitment for build-to-suit funding or an increase in funding commitment. Gross square footage cannot be determined at this time.
(c)
Purchase price includes acquisition-related costs and fees, which were expensed.
(d)
CWI 1 had a 57% equity interest in the jointly owned investment that sold this hotel for a total gross sale price of $85.5 million.



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Investing for the long runTM | 41

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Summary of Future Liquidity Strategies for Managed Programs
As of December 31, 2017.

Liquidity events for the Managed REITs must be approved by each Managed REIT’s board of the directors. A liquidity transaction could include sales of assets, either on a portfolio basis or individually, a listing of each Managed REIT’s shares on a national securities exchange, a merger or another transaction approved by the respective board of directors. Market conditions and other factors could cause the delay of a liquidity transaction or the commencement of liquidation. Even if a Managed REIT’s board of directors decides to liquidate, the Managed REIT is under no obligation to conclude a liquidation within a set time because the precise timing of the sale of assets will depend on the then-prevailing real estate and financial markets, the economic conditions of the areas in which properties are located and the federal income tax consequences to the Managed REIT’s stockholders.
 
Liquidation Period
 
CPA:17 – Global
 
CPA:18 – Global
 
CWI 1
 
CWI 2
 
CESH I
Disclosure
“During the quarter ended September 30, 2017, our board of directors formed a special committee of independent directors to begin the process of evaluating possible liquidity alternatives for our shareholders. There can be no assurance as to the form or timing of any liquidity alternative or that any alternative will be pursued at all. We do not intend to discuss the evaluation process unless and until a particular alternative is selected.”

Source: Form 10-Q dated November 8, 2017. Page 37.
 
“We currently intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) beginning in April 2022, which is seven years following the closing of our initial public offering.”

Source: Form 10-Q dated November 13, 2017. Page 53.

 
“We intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets or another similar transaction) not later than six years following the conclusion of our initial public offering, which occurred on September 15, 2013. Thus, we intend to have a limited life.”

Source: Form 10-Q dated November 13, 2017. Page 40.

 
“We intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets or another similar transaction) not later than six years following the conclusion of our initial public offering, which occurred in July 2017. Thus, we intend to have a limited life.”

Source: Form 10-Q dated November 13, 2017. Page 39.
 
CESH I does not have a fixed term, however, W. P. Carey expects to start seeking disposition of its properties five years after CESH I raised its minimum offering amount, which occurred in July 2016.




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Investing for the long runTM | 42

W. P. Carey Inc.
Investment Management – Fourth Quarter 2017
Summary of Back-End Fees for / Interests in the Managed Programs

The overview below is intended to provide a summary of current disclosures regarding various back-end fees and interests that we may be entitled to upon each Managed Program’s liquidity event. Such liquidity events are at the discretion of each Managed REIT’s board of directors and there is no assurance that any of the fees or interests described below will be realized. Please refer to each Managed REIT’s filings with the Securities and Exchange Commission for complete descriptions of each REIT’s liquidity strategy.
 
Back-End Fees and Interests
 
CPA:17 – Global
 
CPA:18 – Global
 
CWI 1
 
CWI 2
 
CESH I
Disposition Fees
Net leased properties — equal to the lesser of (i) 50% of the brokerage commission paid or (ii) 3% of the contract sales price of a property.

Investments in B Notes, C Notes, mortgage-backed securities and real estate-related loans — 1% of the average equity value.
 
Investments other than those described below — equal to the lesser of (i) 50% of the brokerage commission paid or (ii) 3% of the contract sales price of a property.

Readily marketable real estate securities — none.
 
Equal to the lesser of: (i) 50% of the competitive real estate commission and (ii) 1.5% of the contract sales price of a property.
 
Equal to the lesser of: (i) 50% of the competitive real estate commission and (ii) 1.5% of the contract sales price of a property.
 
N/A
Interest in Disposition Proceeds
Special general partner interest entitled to receive distributions of up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership, through certain liquidity events or distributions, plus the 6% preferred return rate.
 
Special general partner interest entitled to receive distributions of up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership, through certain liquidity events or distributions, plus the 6% preferred return rate.
 
Special general partner interest receives up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership (through certain liquidity transactions or distributions) plus the six percent preferred return rate. A listing will not trigger the payment of this distribution.
 
Special general partner interest receives up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership (through certain liquidity transactions or distributions) plus the six percent preferred return rate. A listing will not trigger the payment of this distribution.
 
Available Cash (as defined in In “Principal Terms”), subject to any other limitations provided for herein, will be initially apportioned among the Limited Partners in proportion to their respective capital contributions and the General Partner as provided in connection with its Carried Interest and distributed. (a)

Purchase of Special GP Interest
Lesser of (i) 5.0x the distributions of the last completed fiscal year and (ii) the discounted value of expected future distributions from point of valuation to April 2021, using a discount rate used by the independent third-party valuation firm to determine the most recent appraisal.
 
Lesser of (i) 5.0x the distributions of the last completed fiscal year and (ii) the discounted value of expected future distributions from point of valuation to March 2025 using a discount rate used by the independent third-party valuation firm to determine the most recent appraisal.
 
Fair market value as determined by Appraisal.
 
Fair market value as determined by Appraisal.
 
N/A
Distribution Related to Ownership of Shares
4.2% ownership as of 12/31/2017
 
2.5% ownership as of 12/31/2017
 
2.1% ownership as of 12/31/2017
 
1.8% ownership as of 12/31/2017
 
2.4% ownership as of 12/31/2017
________
(a)
Order of distributions are as follows: (1) First, to a Limited Partner until it has received an amount equal to its total capital contributions or deemed capital contribution with respect to the Advisor Units in the case of the Advisor (or a wholly owned subsidiary of the Advisor); (2) Second, to a Limited Partner until such Limited Partner has received a cumulative, non-compounding, annual 10% return on its unreturned capital contributions (the “Preferred Return”); (3) Third, to the General Partner until the General Partner has received 20% of the aggregate amounts distributed pursuant to clause (2) and this clause (3); (4) Thereafter, 80% to such Limited Partner and 20% to the General Partner (together with the amounts received under clause (3), the General Partner’s “Carried Interest”). The Advisor’s capital contribution for purposes of the Partnership Agreement will be deemed to be the value of the Advisor Units upon their issuance.


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Investing for the long runTM | 43



W. P. Carey Inc.
Appendix
Fourth Quarter 2017





wpc8ksupplementaldividera13.jpg

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Investing for the long runTM | 44

W. P. Carey Inc.
Appendix – Fourth Quarter 2017
Normalized Pro Rata Cash Net Operating Income (NOI)
In thousands. From real estate.

Three Months Ended
Dec. 31, 2017
Consolidated Lease Revenues

Total lease revenues – as reported
$
154,826

Less: Consolidated Non-Reimbursable Property Expenses

Non-reimbursable property expenses – as reported
3,993


150,833



Plus: NOI from Operating Properties

Hotel revenues
6,910

Hotel expenses
(5,567
)
 
1,343

 
 

152,176



Adjustments for Pro Rata Ownership of Real Estate Joint Ventures:

Add: Pro rata share of NOI from equity investments
4,810

Less: Pro rata share of NOI attributable to noncontrolling interests
(3,832
)

978




153,154



Adjustments for Pro Rata Non-Cash Items:

Add: Above- and below-market rent intangible lease amortization
15,150

Less: Straight-line rent amortization
(2,028
)
Add: Other non-cash items
146


13,268



Pro Rata Cash NOI (a)
166,422



Adjustment to normalize for intra-period acquisitions, completed capital projects and dispositions (b)
(491
)


Normalized Pro Rata Cash NOI (a)
$
165,931


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Investing for the long runTM | 45

W. P. Carey Inc.
Appendix – Fourth Quarter 2017

The following table presents a reconciliation from Net income from Owned Real Estate attributable to W. P. Carey to Normalized pro rata cash NOI:
 
Three Months Ended
Dec. 31, 2017
Net Income from Owned Real Estate Attributable to W. P. Carey
 
Net income from Owned Real Estate attributable to W. P. Carey – as reported
$
54,149

Adjustments for Consolidated Operating Expenses
 
Add: Operating expenses – as reported
94,249

Less: Property expenses, excluding reimbursable tenant costs – as reported
(9,560
)
 
84,689

 
 
Adjustments for Other Consolidated Revenues and Expenses:
 
Less: Lease termination income and other
(515
)
Less: Reimbursable property expenses – as reported
(5,584
)
Add: Other income and (expenses)
36,272

Less: Benefit from income taxes
(4,953
)
Less: Gain on sale of real estate
(11,146
)
 
14,074

 
 
Other Adjustments:
 
Add: Above- and below-market rent intangible lease amortization
17,922

Less: Adjustments for pro rata ownership
(2,549
)
Less: Straight-line rent amortization
(2,002
)
Adjustment to normalize for intra-period acquisitions, completed capital projects and dispositions (b)
(491
)
Add: Property expenses, excluding reimbursable tenant costs, non-cash
139

 
13,019

 
 
Normalized Pro Rata Cash NOI (a)
$
165,931

________
(a)
Pro rata cash NOI and normalized pro rata cash NOI are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures and for details on how pro rata cash NOI and normalized pro rata cash NOI are calculated.
(b)
For properties acquired and capital projects completed during the three months ended December 31, 2017, the adjustment modifies our pro rata share of cash NOI for the partial period with an amount estimated to be equivalent to the additional pro rata share of cash NOI necessary to reflect ownership for the full quarter. For properties disposed of during the three months ended December 31, 2017, the adjustment eliminates our pro rata share of cash NOI for the period.

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Investing for the long runTM | 46

W. P. Carey Inc.
Appendix – Fourth Quarter 2017
Reconciliation of Net Income to Adjusted EBITDA, Consolidated – Last Five Quarters
In thousands.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income attributable to W. P. Carey
$
75,209

 
$
80,278

 
$
64,318

 
$
57,484

 
$
47,704

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Consolidated EBITDA
 
 
 
 
 
 
 
 
 
Depreciation and amortization
64,015

 
64,040

 
62,849

 
62,430

 
62,675

Interest expense
40,401

 
41,182

 
42,235

 
41,957

 
43,913

(Benefit from) provision for income taxes
(192
)
 
1,760

 
2,448

 
(1,305
)
 
7,826

EBITDA (a)
179,433

 
187,260

 
171,850

 
160,566

 
162,118

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Adjusted EBITDA
 
 
 
 
 
 
 
 
 
Adjustments for Non-Cash Items:
 
 
 
 
 
 
 
 
 
Above- and below-market rent intangible and straight-line rent adjustments (b) (c)
15,920

 
9,247

 
9,186

 
8,828

 
8,154

Stock-based compensation expense
4,268

 
4,635

 
3,104

 
6,910

 
3,051

Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Unrealized losses and other (d)
2,495

 
7,382

 
7,226

 
2,639

 
4,719

 
25,452

 
21,264

 
19,516

 
18,377

 
25,357

Adjustments for Non-Core Items: (e)
 
 
 
 
 
 
 
 
 
Gain on sale of real estate, net
(11,146
)
 
(19,257
)
 
(3,465
)
 
(10
)
 
(3,248
)
Other expenses (f)
(533
)
 
65

 
1,000

 
73

 
18

Restructuring and other compensation (g)
289

 
1,356

 
7,718

 
—

 
—

(Gain) loss on extinguishment of debt
(81
)
 
1,566

 
(2,443
)
 
912

 
224

Other
(595
)
 
(1,553
)
 
(536
)
 
253

 
736

 
(12,066
)
 
(17,823
)
 
2,274

 
1,228

 
(2,270
)
Adjustments for Pro Rata Ownership
 
 
 
 
 
 
 
 
 
Real Estate Joint Ventures: (h)
 
 
 
 
 
 
 
 
 
Add: Pro rata share of adjustments for equity investments
1,450

 
1,307

 
1,242

 
2,376

 
1,387

Less: Pro rata share of adjustments for amounts attributable to noncontrolling interests
(7,537
)
 
(3,490
)
 
(3,620
)
 
(3,941
)
 
(5,736
)
 
(6,087
)
 
(2,183
)
 
(2,378
)
 
(1,565
)
 
(4,349
)
Equity Investments in the Managed Programs: (i)
 
 
 
 
 
 
 
 
 
Add: Distributions received from equity investments in the Managed Programs
3,273

 
3,417

 
2,981

 
2,809

 
2,496

Less: Income from equity investments in the
    Managed Programs
(101
)
 
(531
)
 
(1,279
)
 
(1,674
)
 
(30
)
 
3,172

 
2,886

 
1,702

 
1,135

 
2,466

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA (a)
$
189,904

 
$
191,404

 
$
192,964

 
$
179,741

 
$
183,322

________
(a)
EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.
(b)
Straight-line rent adjustments relate to our net-leased properties subject to operating leases.
(c)
Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to accelerated amortization of an above-market rent intangible in connection with a lease restructuring.
(d)
Comprised of gains and losses on interest rate derivatives, gains and losses on foreign currency and straight-line rent adjustments for office rent expenses.
(e)
Comprised of items that we do not consider to be part of our core operating business plan or representative of our overall long-term operating performance, based on a number of factors, including the nature of the item and/or the frequency with which it occurs. We believe that these adjustments provide a more representative view of EBITDA from our core operating business and allow for more meaningful comparisons.
(f)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.
(g)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.
(h)
Adjustments to include our pro rata share of depreciation and amortization, interest expense, provision for income taxes, non-cash items and non-core items from joint ventures.
(i)
Adjustments to include cash distributions received from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs.

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Investing for the long runTM | 47

W. P. Carey Inc.
Appendix – Fourth Quarter 2017
Reconciliation of Net Income to Adjusted EBITDA, Owned Real Estate – Last Five Quarters
In thousands.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income from Owned Real Estate attributable to
   W. P. Carey (a)
$
54,149

 
$
56,492

 
$
43,540

 
$
37,958

 
$
27,821

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Consolidated EBITDA
 
 
 
 
 
 
 
 
 
Depreciation and amortization
62,951

 
62,970

 
61,989

 
61,522

 
61,717

Interest expense
40,401

 
41,182

 
42,235

 
41,957

 
43,913

(Benefit from) provision for income taxes
(4,953
)
 
1,511

 
3,731

 
1,454

 
3,374

EBITDA - Owned Real Estate (a) (b)
152,548

 
162,155

 
151,495

 
142,891

 
136,825

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Adjusted EBITDA
 
 
 
 
 
 
 
 
 
Adjustments for Non-Cash Items:
 
 
 
 
 
 
 
 
 
Above- and below-market rent intangible and straight-line rent adjustments (c) (d)
15,920

 
9,247

 
9,186

 
8,828

 
8,154

Unrealized losses and other (e)
2,715

 
8,014

 
7,685

 
2,566

 
4,581

Impairment charges
2,769

 
—

 
—

 
—

 
9,433

Stock-based compensation expense
2,227

 
1,880

 
899

 
1,954

 
908

 
23,631

 
19,141

 
17,770

 
13,348

 
23,076

Adjustments for Non-Core Items: (f)
 
 
 
 
 
 
 
 
 
Gain on sale of real estate, net
(11,146
)
 
(19,257
)
 
(3,465
)
 
(10
)
 
(3,248
)
Other expenses (g)
(533
)
 
65

 
1,000

 
73

 
18

(Gain) loss on extinguishment of debt
(81
)
 
1,566

 
(2,443
)
 
912

 
224

Other
(588
)
 
(1,535
)
 
(653
)
 
685

 
770

 
(12,348
)
 
(19,161
)
 
(5,561
)
 
1,660

 
(2,236
)
Adjustments for Pro Rata Ownership
 
 
 
 
 
 
 
 
 
Real Estate Joint Ventures: (h)
 
 
 
 
 
 
 
 
 
Add: Pro rata share of adjustments for equity investments
1,450

 
1,307

 
1,242

 
2,376

 
1,387

Less: Pro rata share of adjustments for amounts attributable to noncontrolling interests
(7,537
)
 
(3,490
)
 
(3,620
)
 
(3,941
)
 
(5,736
)
 
(6,087
)
 
(2,183
)
 
(2,378
)
 
(1,565
)
 
(4,349
)
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA - Owned Real Estate (a) (b)
$
157,744

 
$
159,952

 
$
161,326

 
$
156,334

 
$
153,316

________
(a)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.
(b)
EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.
(c)
Straight-line rent adjustments relate to our net-leased properties subject to operating leases.
(d)
Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to accelerated amortization of an above-market rent intangible in connection with a lease restructuring.
(e)
Comprised of gains and losses on interest rate derivatives and gains and losses on foreign currency.
(f)
Comprised of items that we do not consider to be part of our core operating business plan or representative of our overall long-term operating performance, based on a number of factors, including the nature of the item and/or the frequency with which it occurs. We believe that these adjustments provide a more representative view of EBITDA from our core operating business and allow for more meaningful comparisons.
(g)
Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.
(h)
Adjustments to include our pro rata share of depreciation and amortization, interest expense, provision for income taxes, non-cash items and non-core items from joint ventures.

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W. P. Carey Inc.
Appendix – Fourth Quarter 2017
Reconciliation of Net Income to Adjusted EBITDA, Investment Management – Last Five Quarters
In thousands.
 
Three Months Ended
 
Dec. 31, 2017
 
Sep. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
Net income from Investment Management attributable to
   W. P. Carey (a)
$
21,060

 
$
23,786

 
$
20,778

 
$
19,526

 
$
19,883

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Consolidated EBITDA
 
 
 
 
 
 
 
 
 
Depreciation and amortization
1,064

 
1,070

 
860

 
908

 
958

Provision for (benefit from) income taxes
4,761

 
249

 
(1,283
)
 
(2,759
)
 
4,452

EBITDA - Investment Management (a) (b)
26,885

 
25,105

 
20,355

 
17,675

 
25,293

 
 
 
 
 
 
 
 
 
 
Adjustments to Derive Adjusted EBITDA
 
 
 
 
 
 
 
 
 
Adjustments for Non-Cash Items:
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
2,041

 
2,755

 
2,205

 
4,956

 
2,143

Unrealized (gains) losses and other (c)
(220
)
 
(632
)
 
(459
)
 
73

 
138

 
1,821

 
2,123

 
1,746

 
5,029

 
2,281

Adjustments for Non-Core Items: (d)
 
 
 
 
 
 
 
 
 
Restructuring and other compensation (e)
289

 
1,356

 
7,718

 
—

 
—

Other
(7
)
 
(18
)
 
117

 
(432
)
 
(34
)
 
282

 
1,338

 
7,835

 
(432
)
 
(34
)
 
 
 
 
 
 
 
 
 
 
Adjustments for Pro Rata Ownership
 
 
 
 
 
 
 
 
 
Equity Investments in the Managed Programs: (f) (a)
 
 
 
 
 
 
 
 
 
Add: Distributions received from equity investments in the Managed Programs
3,273

 
3,417

 
2,981

 
2,809

 
2,496

Less: Income from equity investments in the Managed Programs
(101
)
 
(531
)
 
(1,279
)
 
(1,674
)
 
(30
)
 
3,172

 
2,886

 
1,702

 
1,135

 
2,466

 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA - Investment Management (a) (b)
$
32,160

 
$
31,452

 
$
31,638

 
$
23,407

 
$
30,006

________
(a)
In connection with our decision to exit non-traded retail fundraising activities, which we announced in June 2017, during the second quarter of 2017 we revised how we view and present our two business segments. As such, equity in earnings of equity method investments in the Managed Programs is now recognized within our Investment Management segment. Earnings from our investment in CCIF continue to be included in our Investment Management segment. Prior periods have been revised to reflect this change.
(b)
EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.
(c)
Comprised of gains and losses on foreign currency and straight-line rent adjustments for office rent expenses.
(d)
Comprised of items that we do not consider to be part of our core operating business plan or representative of our overall long-term operating performance, based on a number of factors, including the nature of the item and/or the frequency with which it occurs. We believe that these adjustments provide a more representative view of EBITDA from our core operating business and allow for more meaningful comparisons.
(e)
Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our previously announced exit from non-traded retail fundraising activities.
(f)
Adjustments to include cash distributions received from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs.


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W. P. Carey Inc.
Appendix – Fourth Quarter 2017
Terms and Definitions

Non-GAAP Financial Disclosures
AFFO
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to nor a substitute for net income or loss as determined under GAAP.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above.
We modify the NAREIT computation of FFO to include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rents, stock-based compensation, gains or losses from deconsolidation of subsidiaries and amortization of deferred financing costs. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses such as certain lease termination income, gains or losses from extinguishment of debt, restructuring and other compensation-related expenses resulting from a reduction in headcount and employee severance arrangements and other expenses (which includes expenses related to the formal strategic review that we completed in May 2016 and accruals for estimated one-time legal settlement expenses). We also exclude realized and unrealized gains/losses on foreign exchange transactions (other than those realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs which are currently not engaged in acquisitions, mergers and restructuring which are not part of our normal business operations. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies and determine executive compensation.
We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP or as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.
Pro Rata Cash NOI
Cash net operating income, or cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our net leased and operating properties. We define cash NOI as cash rents from our leased and operating properties less non-reimbursable property expenses. Cash NOI excludes amortization of intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We present cash NOI on a pro rata basis, referred to as pro rata cash NOI, to account for our share of income related to unconsolidated joint ventures and noncontrolling interests. We believe that pro rata cash NOI is a helpful measure that both investors and management can use to evaluate the financial performance of our leased and operating properties and it allows for comparison of our operating performance between periods and to other REITs. Pro rata cash NOI should not be considered as an alternative to net income as an indication of our financial performance or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present cash NOI and/or pro rata cash NOI, may not be directly comparable to the way other REITs present cash NOI.
Normalized Pro Rata Cash NOI
Normalized pro rata cash NOI is pro rata cash NOI as defined above adjusted primarily to exclude our pro rata share of cash NOI from properties disposed of during the most recent quarter and to include a full quarter of pro rata cash NOI related to properties acquired or capital projects completed during the period, as applicable. We believe this measure provides a helpful representation of our net operating income from our in-place leased and operating properties.

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W. P. Carey Inc.
Appendix – Fourth Quarter 2017

Adjusted EBITDA
We believe that EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of our business segments because (i) it removes the impact of our capital structure from our operating results and (ii) because it is helpful when comparing our operating performance to that of companies in our industry without regard to such items, which can vary substantially from company to company. Adjusted EBITDA as disclosed represents EBITDA, modified to include other adjustments to GAAP net income for certain non-cash charges, such as impairments, non-cash rent adjustments and unrealized gains and losses from our hedging activity. Additionally, we exclude gains and losses in real estate, which are not considered fundamental attributes of our business plans and do not affect our overall long-term operating performance. We exclude these items from adjusted EBITDA as they are not the primary drivers in our decision-making process. Our assessment of our operations is focused on long-term sustainability and not on such non-cash and non-core items, which may cause short-term fluctuations in net income but have no impact on cash flows. We believe that adjusted EBITDA is a useful supplemental measure to investors and analysts, although it does not represent net income that is computed in accordance with GAAP. Accordingly, adjusted EBITDA should not be considered as an alternative to net income or as an indicator of our financial performance. EBITDA and adjusted EBITDA as calculated by us may not be comparable to similarly titled measures of other companies.
Other Metrics
Pro Rata Metrics
This supplemental package contains certain metrics prepared under the pro rata consolidation method. We refer to these metrics as pro rata metrics. We have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. Under the full consolidation method, we report 100% of the assets, liabilities, revenues and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%. Also, for all other jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we present our proportionate share, based on our economic ownership of these jointly owned investments, of the assets, liabilities, revenues and expenses of those investments. Multiplying each of our jointly owned investments’ financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investments.
ABR
ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2017. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties and is presented on a pro rata basis.



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