We maintain several stock-based compensation plans, which are more fully described in the 2012 Annual Report. There have been no significant changes to the terms and conditions of any of our stock-based compensation plans or arrangements during 2013, other than as described below.

Total compensation expense net of forfeitures for our stock-based compensation plans was $7.9 million and $10.0 million for the three months ended September 30, 2013 and 2012, respectively, and $25.5 million and $19.7 million for the nine months ended September 30, 2013 and 2012, respectively, all of which was included in General and administrative expenses in the consolidated financial statements. Stock-based compensation expense during the three months and nine months ended September 30, 2013 as compared to the same periods in 2012 decreased by $4.0 million and increased by $1.7 million, respectively, as a result of an upward revision in the third quarter of 2012 and the first quarter of 2013 in the estimated payout of performance stock units (“PSUs”) that were granted during 2011 and 2012. Stock-based compensation expense also increased by $2.5 million and $3.7 million, respectively, due to changes in our forfeiture rate assumptions in the third quarter of 2012; and increased by $0.1 million and $1.2 million, respectively, because the new awards granted in 2013 have a higher grant date fair value than previously-issued awards.

Nonvested restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and PSUs at September 30, 2013 and changes during the nine months ended September 30, 2013 were as follows:


	RSA and RSU Awards			PSU Awards
		Weighted Average			Weighted Average
		Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value
Nonvested at January 1, 2013	594,194	$	37.15	999,513	$	34.55
Granted^{(a) (b)}	185,015		57.69	86,189		84.33
Vested^(c)	(233,098)		37.11	(324,161)		39.48
Forfeited	(26,503)		43.05	(30,108)		51.13
Adjustment^(d)	-		-	322,880		52.72
Nonvested at September 30, 2013^(e)	519,608	$	43.54	1,054,313	$	48.48

During the nine months ended September 30, 2013, 135,984 stock options were exercised with an aggregate intrinsic value of $4.8 million.

In July 2013, our stockholders approved an additional 2,300,000 shares of common stock to be available for issuance under the 2009 Share Incentive Plan.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Net income attributable to W. P. Carey	$	18,506	$	2,588	$	75,854	$	46,654
Allocation of distribution equivalents paid on unvested RSUs and RSAs in excess of net income		(139)		(23)		(570)		(413)
Net income – basic		18,367		2,565		75,284		46,241
Income effect of dilutive securities, net of taxes		128		(20)		77		(82)
Net income – diluted	$	18,495	$	2,545	$	75,361	$	46,159

Weighted average shares outstanding – basic		68,397,176		40,366,298		68,719,264		40,398,433
Effect of dilutive securities		1,003,649		761,106		1,127,056		631,145
Weighted average shares outstanding – diluted		69,400,825		41,127,404		69,846,320		41,029,578

Securities totaling 105,920 shares associated with the Redeemable noncontrolling interest were excluded from the earnings per share computations above as their effect would have been anti-dilutive for the three months ended September 30, 2013.There were no such anti-dilutive securities for the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012.

We account for the noncontrolling interest in WPCI held by a third party as a redeemable noncontrolling interest, as we have an obligation to repurchase the interest at fair value, subject to certain conditions. This obligation is required to be settled in shares of our common stock. The third-party interest is reflected at estimated redemption value for all periods presented. On October 1, 2013, we received a notice from the holder of the noncontrolling interest in WPCI regarding the exercise of the put option, pursuant to which we are required to purchase the third-party's 7.7% interest in WPCI. Pursuant to the terms of the related put agreement, the purchase price is to be determined based on a third-party valuation as of October 31, 2013, which is the end of the month that the put option was exercised. The agreement also requires that we and the noncontrolling interest holder agree on both the valuation firm and the valuation methodology. We cannot currently estimate when the redemption will occur.

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


	Nine Months Ended September 30,
	2013		2012
Balance - beginning of period	$	7,531	$	7,700
Redemption value adjustment		-		79
Net income (loss)		139		(146)
Distributions		(354)		(1,014)
Change in other comprehensive income		-		4
Balance - end of period	$	7,316	$	6,623

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


				Three Months Ended September 30, 2013
				Gains and Losses on Derivative Instruments		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Marketable Securities		Total
Balance - beginning of period				$	(2,253)	$	(762)	$	31	$	(2,984)
	Other comprehensive (loss) income before reclassifications				(4,711)		17,675		-		12,964
	Amounts reclassified from accumulated other comprehensive loss to:
		Interest expense			436		-		-		436
		Other income and (expense)			206		-		-		206
		Net income from equity investments in real estate and the Managed REITs			56		-		-		56
			Total		698		-		-		698
	Net current period other comprehensive (loss) income				(4,013)		17,675		-		13,662
	Net current period other comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest				-		(2,052)		-		(2,052)
Balance - end of period				$	(6,266)	$	14,861	$	31	$	8,626


				Three Months Ended September 30, 2012
				Gains and Losses on Derivative Instruments		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Marketable Securities		Total
Balance - beginning of period				$	(5,827)	$	(5,302)	$	33	$	(11,096)
	Other comprehensive (loss) income before reclassifications				(673)		2,164		(2)		1,489
	Amounts reclassified from accumulated other comprehensive loss to:
		Interest expense			344		-		-		344
		Other income and (expense)			142		-				142
		Net income from equity investments in real estate and the Managed REITs			95		-		-		95
			Total		581		-		-		581
	Net current period other comprehensive (loss) income				(92)		2,164		(2)		2,070
	Net current period other comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest				-		(239)		-		(239)
Balance - end of period				$	(5,919)	$	(3,377)	$	31	$	(9,265)

				Nine Months Ended September 30, 2013
				Gains and Losses on Derivative Instruments		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Marketable Securities		Total
Balance - beginning of period				$	(7,508)	$	2,828	$	31	$	(4,649)
	Other comprehensive (loss) income before reclassifications				(727)		13,017		-		12,290
	Amounts reclassified from accumulated other comprehensive income (loss) to:
		Interest expense			1,311		-		-		1,311
		Other income and (expense)			182		-		-		182
		Net income from equity investments in real estate and the Managed REITs			476		-		-		476
			Total		1,969		-		-		1,969
	Net current period other comprehensive income				1,242		13,017		-		14,259
	Net current period other comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest				-		(984)		-		(984)
Balance - end of period				$	(6,266)	$	14,861	$	31	$	8,626


				Nine Months Ended September 30, 2012
				Gains and Losses on Derivative Instruments		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Marketable Securities		Total
Balance - beginning of period				$	(5,246)	$	(3,299)	$	38	$	(8,507)
	Other comprehensive loss before reclassifications				(2,084)		(141)		(7)		(2,232)
	Amounts reclassified from accumulated other comprehensive loss to:
		Interest expense			1,010		-		-		1,010
		Other income and (expense)			142		-		-		142
		Net income from equity investments in real estate and the Managed REITs			259		-		-		259
			Total		1,411		-		-		1,411
	Net current period other comprehensive loss				(673)		(141)		(7)		(821)
	Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest				-		63		-		63
Balance - end of period				$	(5,919)	$	(3,377)	$	31	$	(9,265)