Segment Reporting

We evaluate our results from operations through our two major business segments: Owned Real Estate and Investment Management. As a result of our decision to exit non-traded retail fundraising activities as of June 30, 2017 (Note 1), we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include equity in earnings of equity method investments in the Managed Programs in our Investment Management segment. Earnings from our investment in GCIF continue to be included in our Investment Management segment. Results of operations by segment for prior periods have been reclassified to conform to the current period presentation. The following tables present a summary of comparative results and assets for these business segments (in thousands):

Owned Real Estate



	Three Months Ended March 31,
	2018			2017
Revenues
Lease revenues	$	163,213		$	155,781
Operating property revenues ^(a)	7,218			6,980
Reimbursable tenant costs	6,219			5,221
Lease termination income and other	942			760
	177,592			168,742

Operating Expenses
Depreciation and amortization	64,920			61,522
General and administrative	12,065			8,274
Property expenses, excluding reimbursable tenant costs	9,899			10,110
Reimbursable tenant costs	6,219			5,221
Impairment charges	4,790			—
Stock-based compensation expense	4,306			1,954
Other expenses	(37		)	73
	102,162			87,154
Other Income and Expenses
Interest expense	(38,074		)	(41,957		)
Equity in earnings of equity method investments in real estate	3,358			2,072
Other gains and (losses)	(2,887		)	40
	(37,603		)	(39,845		)
Income before income taxes and gain on sale of real estate	37,827			41,743
Benefit from (provision for) income taxes	3,533			(1,454		)
Income before gain on sale of real estate	41,360			40,289
Gain on sale of real estate, net of tax	6,732			10
Net Income from Owned Real Estate	48,092			40,299
Net income attributable to noncontrolling interests	(2,792		)	(2,341		)
Net Income from Owned Real Estate Attributable to W. P. Carey	$	45,300		$	37,958

__________


(a)	Operating property revenues for the three months ended March 31, 2018 and 2017 are comprised of (i) $3.9 million and $3.8 million, respectively, generated from a hotel in Memphis, Tennessee, and (ii) $3.3 million and $3.2 million, respectively, generated from a hotel in Bloomington, Minnesota. The hotel in Memphis, Tennessee, was sold in April 2018 (Note 16).

Investment Management



	Three Months Ended March 31,
	2018		2017
Revenues
Asset management revenue	$	16,985	$	17,367
Reimbursable costs from affiliates	5,304		25,700
Structuring revenue	1,739		3,834
Other advisory revenue	190		91
Dealer manager fees	—		3,325
	24,218		50,317
Operating Expenses
General and administrative	6,518		10,150
Reimbursable costs from affiliates	5,304		25,700
Stock-based compensation expense	3,913		4,956
Subadvisor fees	2,032		2,720
Depreciation and amortization	1,037		908
Dealer manager fees and expenses	—		3,294
	18,804		47,728
Other Income and Expenses
Equity in earnings of equity method investments in the Managed Programs	11,967		13,702
Other gains and (losses)	124		476
	12,091		14,178
Income before income taxes	17,505		16,767
Benefit from income taxes	2,469		2,759
Net Income from Investment Management Attributable to W. P. Carey	$	19,974	$	19,526

Total Company



	Three Months Ended March 31,
	2018			2017
Revenues	$	201,810		$	219,059
Operating expenses	120,966			134,882
Other gains and (losses)	(25,512		)	(25,667		)
Gain on sale of real estate, net of tax	6,732			10
Benefit from income taxes	6,002			1,305
Net income attributable to noncontrolling interests	(2,792		)	(2,341		)
Net income attributable to W. P. Carey	$	65,274		$	57,484



	Total Assets at
	March 31, 2018		December 31, 2017
Owned Real Estate	$	7,910,688	$	7,885,751
Investment Management	377,183		345,651
Total Company	$	8,287,871	$	8,231,402