|
Maryland
|
45-4549771
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
|
|
50 Rockefeller Plaza
|
|
New York, New York
|
10020
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Page No.
|
PART I − FINANCIAL INFORMATION
|
|
|
Item 1. Financial Statements (Unaudited)
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 4.
Controls and Procedures
|
||
|
|
|
PART II − OTHER INFORMATION
|
|
|
Item 6.
Exhibits
|
||
|
W. P. Carey 6/30/2015 10-Q
–
1
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
||||
Investments in real estate:
|
|
|
|
||||
Real estate, at cost (inclusive of $183,810 and $184,417, respectively, attributable to variable interest entities, or VIEs)
|
$
|
5,296,054
|
|
|
$
|
5,006,682
|
|
Operating real estate, at cost (inclusive of $38,714 and $38,714, respectively, attributable to VIEs)
|
85,237
|
|
|
84,885
|
|
||
Accumulated depreciation (inclusive of $23,552 and $19,982, respectively, attributable to VIEs)
|
(324,136
|
)
|
|
(258,493
|
)
|
||
Net investments in properties
|
5,057,155
|
|
|
4,833,074
|
|
||
Net investments in direct financing leases (inclusive of $59,829 and $61,609, respectively, attributable to VIEs)
|
783,832
|
|
|
816,226
|
|
||
Assets held for sale
|
—
|
|
|
7,255
|
|
||
Net investments in real estate
|
5,840,987
|
|
|
5,656,555
|
|
||
Cash and cash equivalents (inclusive of $1,749 and $2,652, respectively, attributable to VIEs)
|
233,629
|
|
|
198,683
|
|
||
Equity investments in the Managed Programs and real estate
|
263,418
|
|
|
249,403
|
|
||
Due from affiliates
|
176,796
|
|
|
34,477
|
|
||
Goodwill
|
687,084
|
|
|
692,415
|
|
||
In-place lease and tenant relationship intangible assets, net (inclusive of $19,513 and $21,267, respectively, attributable to VIEs)
|
948,547
|
|
|
993,819
|
|
||
Above-market rent intangible assets, net (inclusive of $12,784 and $13,767, respectively, attributable to VIEs)
|
498,746
|
|
|
522,797
|
|
||
Other assets, net (inclusive of $18,775 and $18,603, respectively, attributable to VIEs)
|
318,397
|
|
|
300,330
|
|
||
Total assets
|
$
|
8,967,604
|
|
|
$
|
8,648,479
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Non-recourse debt, net (inclusive of $122,712 and $125,226, respectively, attributable to VIEs)
|
$
|
2,443,212
|
|
|
$
|
2,532,683
|
|
Senior Unsecured Credit Facility - Revolver
|
350,234
|
|
|
807,518
|
|
||
Senior Unsecured Credit Facility - Term Loan
|
250,000
|
|
|
250,000
|
|
||
Senior Unsecured Notes, net
|
1,501,061
|
|
|
498,345
|
|
||
Below-market rent and other intangible liabilities, net (inclusive of $8,830 and $9,305, respectively, attributable to VIEs)
|
171,544
|
|
|
175,070
|
|
||
Accounts payable, accrued expenses and other liabilities (inclusive of $4,012 and $5,573, respectively, attributable to VIEs)
|
312,521
|
|
|
293,846
|
|
||
Deferred income taxes (inclusive of $535 and $587, respectively, attributable to VIEs)
|
89,036
|
|
|
94,133
|
|
||
Distributions payable
|
101,517
|
|
|
100,078
|
|
||
Total liabilities
|
5,219,125
|
|
|
4,751,673
|
|
||
Redeemable noncontrolling interest
|
13,374
|
|
|
6,071
|
|
||
Commitments and contingencies (
Note 13
)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
W. P. Carey stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 450,000,000 shares authorized; 105,421,626 and 105,085,069 shares issued, respectively; and 104,377,210 and 104,040,653 shares outstanding, respectively
|
105
|
|
|
105
|
|
||
Additional paid-in capital
|
4,298,574
|
|
|
4,322,273
|
|
||
Distributions in excess of accumulated earnings
|
(575,404
|
)
|
|
(465,606
|
)
|
||
Deferred compensation obligation
|
57,395
|
|
|
30,624
|
|
||
Accumulated other comprehensive loss
|
(120,777
|
)
|
|
(75,559
|
)
|
||
Less: treasury stock at cost, 1,044,416 shares
|
(60,948
|
)
|
|
(60,948
|
)
|
||
Total W. P. Carey stockholders’ equity
|
3,598,945
|
|
|
3,750,889
|
|
||
Noncontrolling interests
|
136,160
|
|
|
139,846
|
|
||
Total equity
|
3,735,105
|
|
|
3,890,735
|
|
||
Total liabilities and equity
|
$
|
8,967,604
|
|
|
$
|
8,648,479
|
|
|
W. P. Carey 6/30/2015 10-Q
–
2
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Real estate revenues:
|
|
|
|
|
|
|
|
||||||||
Lease revenues
|
$
|
162,574
|
|
|
$
|
148,253
|
|
|
$
|
322,739
|
|
|
$
|
271,320
|
|
Operating property revenues
|
8,426
|
|
|
8,251
|
|
|
15,538
|
|
|
13,244
|
|
||||
Reimbursable tenant costs
|
6,130
|
|
|
5,749
|
|
|
12,069
|
|
|
11,763
|
|
||||
Lease termination income and other
|
3,122
|
|
|
14,988
|
|
|
6,331
|
|
|
16,175
|
|
||||
|
180,252
|
|
|
177,241
|
|
|
356,677
|
|
|
312,502
|
|
||||
Revenues from the Managed Programs:
|
|
|
|
|
|
|
|
||||||||
Structuring revenue
|
37,808
|
|
|
17,254
|
|
|
59,528
|
|
|
35,005
|
|
||||
Asset management revenue
|
12,073
|
|
|
9,045
|
|
|
23,232
|
|
|
18,822
|
|
||||
Reimbursable costs
|
7,639
|
|
|
41,925
|
|
|
17,246
|
|
|
81,657
|
|
||||
Dealer manager fees
|
307
|
|
|
7,949
|
|
|
1,581
|
|
|
14,626
|
|
||||
Incentive, termination and subordinated disposition revenue
|
—
|
|
|
—
|
|
|
203
|
|
|
—
|
|
||||
|
57,827
|
|
|
76,173
|
|
|
101,790
|
|
|
150,110
|
|
||||
|
238,079
|
|
|
253,414
|
|
|
458,467
|
|
|
462,612
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
65,166
|
|
|
63,445
|
|
|
130,566
|
|
|
116,118
|
|
||||
General and administrative
|
26,376
|
|
|
19,134
|
|
|
56,144
|
|
|
41,804
|
|
||||
Reimbursable tenant and affiliate costs
|
13,769
|
|
|
47,674
|
|
|
29,315
|
|
|
93,420
|
|
||||
Property expenses, excluding reimbursable tenant costs
|
11,020
|
|
|
11,211
|
|
|
20,384
|
|
|
19,630
|
|
||||
Stock-based compensation expense
|
5,089
|
|
|
7,957
|
|
|
12,098
|
|
|
15,000
|
|
||||
Subadvisor fees
|
4,147
|
|
|
2,451
|
|
|
6,808
|
|
|
2,469
|
|
||||
Dealer manager fees and expenses
|
2,327
|
|
|
6,285
|
|
|
4,699
|
|
|
11,710
|
|
||||
Merger and property acquisition expenses
|
1,897
|
|
|
1,137
|
|
|
7,573
|
|
|
30,751
|
|
||||
Impairment charges
|
591
|
|
|
2,066
|
|
|
3,274
|
|
|
2,066
|
|
||||
|
130,382
|
|
|
161,360
|
|
|
270,861
|
|
|
332,968
|
|
||||
Other Income and Expenses
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(47,693
|
)
|
|
(47,733
|
)
|
|
(95,642
|
)
|
|
(86,808
|
)
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
14,272
|
|
|
9,452
|
|
|
25,995
|
|
|
23,714
|
|
||||
Other income and (expenses)
|
7,641
|
|
|
(1,378
|
)
|
|
3,335
|
|
|
(7,019
|
)
|
||||
Gain on change in control of interests
|
—
|
|
|
—
|
|
|
—
|
|
|
105,947
|
|
||||
|
(25,780
|
)
|
|
(39,659
|
)
|
|
(66,312
|
)
|
|
35,834
|
|
||||
Income from continuing operations before income taxes and gain (loss) on sale of real estate
|
81,917
|
|
|
52,395
|
|
|
121,294
|
|
|
165,478
|
|
||||
Provision for income taxes
|
(15,010
|
)
|
|
(8,021
|
)
|
|
(16,990
|
)
|
|
(10,274
|
)
|
||||
Income from continuing operations before gain (loss) on sale of real estate
|
66,907
|
|
|
44,374
|
|
|
104,304
|
|
|
155,204
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
26,421
|
|
|
—
|
|
|
32,828
|
|
||||
Gain (loss) on sale of real estate, net of tax
|
16
|
|
|
(3,823
|
)
|
|
1,201
|
|
|
(3,743
|
)
|
||||
Net Income
|
66,923
|
|
|
66,972
|
|
|
105,505
|
|
|
184,289
|
|
||||
Net income attributable to noncontrolling interests
|
(3,575
|
)
|
|
(2,344
|
)
|
|
(6,041
|
)
|
|
(3,921
|
)
|
||||
Net loss (income) attributable to redeemable noncontrolling interest
|
—
|
|
|
111
|
|
|
—
|
|
|
(151
|
)
|
||||
Net Income Attributable to W. P. Carey
|
$
|
63,348
|
|
|
$
|
64,739
|
|
|
$
|
99,464
|
|
|
$
|
180,217
|
|
Basic Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to W. P. Carey
|
$
|
0.60
|
|
|
$
|
0.38
|
|
|
$
|
0.94
|
|
|
$
|
1.55
|
|
Income from discontinued operations attributable to W. P. Carey
|
—
|
|
|
0.26
|
|
|
—
|
|
|
0.34
|
|
||||
Net Income Attributable to W. P. Carey
|
$
|
0.60
|
|
|
$
|
0.64
|
|
|
$
|
0.94
|
|
|
$
|
1.89
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to W. P. Carey
|
$
|
0.59
|
|
|
$
|
0.38
|
|
|
$
|
0.93
|
|
|
$
|
1.53
|
|
Income from discontinued operations attributable to W. P. Carey
|
—
|
|
|
0.26
|
|
|
—
|
|
|
0.34
|
|
||||
Net Income Attributable to W. P. Carey
|
$
|
0.59
|
|
|
$
|
0.64
|
|
|
$
|
0.93
|
|
|
$
|
1.87
|
|
Weighted-Average Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
105,764,032
|
|
|
100,236,362
|
|
|
105,532,976
|
|
|
94,855,067
|
|
||||
Diluted
|
106,281,983
|
|
|
100,995,225
|
|
|
106,355,402
|
|
|
95,857,916
|
|
||||
Amounts Attributable to W. P. Carey
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations, net of tax
|
$
|
63,348
|
|
|
$
|
38,275
|
|
|
$
|
99,464
|
|
|
$
|
147,211
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
26,464
|
|
|
—
|
|
|
33,006
|
|
||||
Net Income
|
$
|
63,348
|
|
|
$
|
64,739
|
|
|
$
|
99,464
|
|
|
$
|
180,217
|
|
Distributions Declared Per Share
|
$
|
0.9540
|
|
|
$
|
0.9000
|
|
|
$
|
1.9065
|
|
|
$
|
1.7950
|
|
|
W. P. Carey 6/30/2015 10-Q
–
3
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net Income
|
$
|
66,923
|
|
|
$
|
66,972
|
|
|
$
|
105,505
|
|
|
$
|
184,289
|
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
48,090
|
|
|
(1,590
|
)
|
|
(65,989
|
)
|
|
2,956
|
|
||||
Realized and unrealized (loss) gain on derivative instruments
|
(9,619
|
)
|
|
(1,767
|
)
|
|
17,199
|
|
|
(4,564
|
)
|
||||
Change in unrealized (loss) gain on marketable securities
|
—
|
|
|
(5
|
)
|
|
14
|
|
|
12
|
|
||||
|
38,471
|
|
|
(3,362
|
)
|
|
(48,776
|
)
|
|
(1,596
|
)
|
||||
Comprehensive Income
|
105,394
|
|
|
63,610
|
|
|
56,729
|
|
|
182,693
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Attributable to Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||||
Net income
|
(3,575
|
)
|
|
(2,344
|
)
|
|
(6,041
|
)
|
|
(3,921
|
)
|
||||
Foreign currency translation adjustments
|
(1,585
|
)
|
|
113
|
|
|
3,558
|
|
|
448
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(5,160
|
)
|
|
(2,231
|
)
|
|
(2,483
|
)
|
|
(3,473
|
)
|
||||
Amounts Attributable to Redeemable Noncontrolling Interest
|
|
|
|
|
|
|
|
||||||||
Net loss (income)
|
—
|
|
|
111
|
|
|
—
|
|
|
(151
|
)
|
||||
Foreign currency translation adjustments
|
—
|
|
|
21
|
|
|
—
|
|
|
27
|
|
||||
Comprehensive loss (income) attributable to redeemable noncontrolling interest
|
—
|
|
|
132
|
|
|
—
|
|
|
(124
|
)
|
||||
Comprehensive Income Attributable to W. P. Carey
|
$
|
100,234
|
|
|
$
|
61,511
|
|
|
$
|
54,246
|
|
|
$
|
179,096
|
|
|
W. P. Carey 6/30/2015 10-Q
–
4
|
|
W. P. Carey Stockholders
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Distributions
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Common Stock
|
|
Additional
|
|
in Excess of
|
|
Deferred
|
|
Other
|
|
|
|
Total
|
|
|
|
|
|||||||||||||||||||||
|
$0.001 Par Value
|
|
Paid-in
|
|
Accumulated
|
|
Compensation
|
|
Comprehensive
|
|
Treasury
|
|
W. P. Carey
|
|
Noncontrolling
|
|
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Obligation
|
|
Income (Loss)
|
|
Stock
|
|
Stockholders
|
|
Interests
|
|
Total
|
|||||||||||||||||||
Balance at January 1, 2015
|
104,040,653
|
|
|
$
|
105
|
|
|
$
|
4,322,273
|
|
|
$
|
(465,606
|
)
|
|
$
|
30,624
|
|
|
$
|
(75,559
|
)
|
|
$
|
(60,948
|
)
|
|
$
|
3,750,889
|
|
|
$
|
139,846
|
|
|
$
|
3,890,735
|
|
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
483
|
|
|
483
|
|
||||||||||||||||
Exercise of stock options and employee purchases under the employee share purchase plan
|
4,738
|
|
|
—
|
|
|
256
|
|
|
|
|
|
|
|
|
|
|
256
|
|
|
|
|
256
|
|
||||||||||||||
Grants issued in connection with services rendered
|
288,142
|
|
|
—
|
|
|
(14,533
|
)
|
|
|
|
|
|
|
|
|
|
(14,533
|
)
|
|
|
|
(14,533
|
)
|
||||||||||||||
Shares issued under share incentive plans
|
43,677
|
|
|
—
|
|
|
(870
|
)
|
|
|
|
|
|
|
|
|
|
(870
|
)
|
|
|
|
(870
|
)
|
||||||||||||||
Deferral of vested shares
|
|
|
|
|
(24,935
|
)
|
|
|
|
24,935
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||||||
Windfall tax benefits - share incentive plans
|
|
|
|
|
6,524
|
|
|
|
|
|
|
|
|
|
|
6,524
|
|
|
|
|
6,524
|
|
||||||||||||||||
Amortization of stock-based compensation expense
|
|
|
|
|
12,098
|
|
|
|
|
|
|
|
|
|
|
12,098
|
|
|
|
|
12,098
|
|
||||||||||||||||
Redemption value adjustment
|
|
|
|
|
(7,303
|
)
|
|
|
|
|
|
|
|
|
|
(7,303
|
)
|
|
|
|
(7,303
|
)
|
||||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(6,652
|
)
|
|
(6,652
|
)
|
||||||||||||||||
Distributions declared ($1.9065 per share)
|
|
|
|
|
5,064
|
|
|
(209,262
|
)
|
|
1,836
|
|
|
|
|
|
|
(202,362
|
)
|
|
|
|
(202,362
|
)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
99,464
|
|
|
|
|
|
|
|
|
99,464
|
|
|
6,041
|
|
|
105,505
|
|
|||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
(62,431
|
)
|
|
|
|
(62,431
|
)
|
|
(3,558
|
)
|
|
(65,989
|
)
|
|||||||||||||||
Realized and unrealized gain on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
17,199
|
|
|
|
|
17,199
|
|
|
|
|
17,199
|
|
||||||||||||||||
Change in unrealized gain on marketable securities
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
14
|
|
||||||||||||||||
Balance at June 30, 2015
|
104,377,210
|
|
|
$
|
105
|
|
|
$
|
4,298,574
|
|
|
$
|
(575,404
|
)
|
|
$
|
57,395
|
|
|
$
|
(120,777
|
)
|
|
$
|
(60,948
|
)
|
|
$
|
3,598,945
|
|
|
$
|
136,160
|
|
|
$
|
3,735,105
|
|
|
W. P. Carey 6/30/2015 10-Q
–
5
|
|
W. P. Carey Stockholders
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Distributions
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Common Stock
|
|
Additional
|
|
in Excess of
|
|
Deferred
|
|
Other
|
|
|
|
Total
|
|
|
|
|
|||||||||||||||||||||
|
$0.001 Par Value
|
|
Paid-in
|
|
Accumulated
|
|
Compensation
|
|
Comprehensive
|
|
Treasury
|
|
W. P. Carey
|
|
Noncontrolling
|
|
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Obligation
|
|
Income (Loss)
|
|
Stock
|
|
Stockholders
|
|
Interests
|
|
Total
|
|||||||||||||||||||
Balance at January 1, 2014
|
68,266,570
|
|
|
$
|
69
|
|
|
$
|
2,256,503
|
|
|
$
|
(318,577
|
)
|
|
$
|
11,354
|
|
|
$
|
15,336
|
|
|
$
|
(60,270
|
)
|
|
$
|
1,904,415
|
|
|
$
|
298,316
|
|
|
$
|
2,202,731
|
|
Shares issued to stockholders of CPA
®
:16 – Global in connection with the CPA
®
:16 Merger
|
30,729,878
|
|
|
31
|
|
|
1,815,490
|
|
|
|
|
|
|
|
|
|
|
1,815,521
|
|
|
|
|
1,815,521
|
|
||||||||||||||
Purchase of the remaining interests in less-than-wholly-owned investments that we already consolidate in connection with the CPA
®
:16 Merger
|
|
|
|
|
(41,374
|
)
|
|
|
|
|
|
|
|
|
|
(41,374
|
)
|
|
(239,562
|
)
|
|
(280,936
|
)
|
|||||||||||||||
Purchase of noncontrolling interests in connection with the CPA
®
:16 Merger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
99,947
|
|
|
99,947
|
|
||||||||||||||||
Exercise of stock options and employee purchases under the employee share purchase plan
|
23,506
|
|
|
|
|
1,184
|
|
|
|
|
|
|
|
|
|
|
1,184
|
|
|
|
|
1,184
|
|
|||||||||||||||
Grants issued in connection with services rendered
|
352,188
|
|
|
|
|
(15,736
|
)
|
|
|
|
|
|
|
|
|
|
(15,736
|
)
|
|
|
|
(15,736
|
)
|
|||||||||||||||
Shares issued under share incentive plans
|
18,683
|
|
|
|
|
(534
|
)
|
|
|
|
|
|
|
|
|
|
(534
|
)
|
|
|
|
(534
|
)
|
|||||||||||||||
Deferral of vested shares
|
|
|
|
|
(15,428
|
)
|
|
|
|
15,428
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||||||
Windfall tax benefits - share incentive plans
|
|
|
|
|
5,449
|
|
|
|
|
|
|
|
|
|
|
5,449
|
|
|
|
|
5,449
|
|
||||||||||||||||
Amortization of stock-based compensation expense
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
15,000
|
|
||||||||||||||||
Redemption value adjustment
|
|
|
|
|
306
|
|
|
|
|
|
|
|
|
|
|
306
|
|
|
|
|
306
|
|
||||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(11,185
|
)
|
|
(11,185
|
)
|
||||||||||||||||
Distributions declared ($1.7950 per share)
|
|
|
|
|
3,179
|
|
|
(187,798
|
)
|
|
3,842
|
|
|
|
|
|
|
(180,777
|
)
|
|
|
|
(180,777
|
)
|
||||||||||||||
Purchase of treasury stock from related party
|
(11,037
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(678
|
)
|
|
(678
|
)
|
|
|
|
(678
|
)
|
|||||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||||||||||
Net income
|
|
|
|
|
|
|
180,217
|
|
|
|
|
|
|
|
|
180,217
|
|
|
3,921
|
|
|
184,138
|
|
|||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
3,431
|
|
|
|
|
3,431
|
|
|
(448
|
)
|
|
2,983
|
|
|||||||||||||||
Realized and unrealized loss on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
(4,564
|
)
|
|
|
|
(4,564
|
)
|
|
|
|
(4,564
|
)
|
||||||||||||||||
Change in unrealized gain on marketable securities
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
12
|
|
||||||||||||||||
Balance at June 30, 2014
|
99,379,788
|
|
|
$
|
100
|
|
|
$
|
4,024,039
|
|
|
$
|
(326,158
|
)
|
|
$
|
30,624
|
|
|
$
|
14,215
|
|
|
$
|
(60,948
|
)
|
|
$
|
3,681,872
|
|
|
$
|
150,993
|
|
|
$
|
3,832,865
|
|
|
W. P. Carey 6/30/2015 10-Q
–
6
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash Flows — Operating Activities
|
|
|
|
||||
Net income
|
$
|
105,505
|
|
|
$
|
184,289
|
|
Adjustments to net income:
|
|
|
|
||||
Depreciation and amortization, including intangible assets and deferred financing costs
|
134,129
|
|
|
123,908
|
|
||
Straight-line rent and amortization of rent-related intangibles
|
19,793
|
|
|
23,350
|
|
||
Stock-based compensation expense
|
12,098
|
|
|
15,000
|
|
||
Management income received in shares of Managed REITs and other
|
(10,699
|
)
|
|
(18,045
|
)
|
||
Impairment charges
|
3,274
|
|
|
2,066
|
|
||
Realized and unrealized loss (gain) on foreign currency transactions, derivatives, extinguishment of debt and other
|
1,452
|
|
|
(1,756
|
)
|
||
Equity in earnings of equity method investments in the Managed Programs and real estate in excess of
distributions received |
(1,417
|
)
|
|
(1,815
|
)
|
||
Gain on sale of real estate
|
(1,201
|
)
|
|
(23,930
|
)
|
||
Gain on change in control of interests
|
—
|
|
|
(105,947
|
)
|
||
Amortization of deferred revenue
|
—
|
|
|
(786
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Increase in structuring revenue receivable
|
(17,896
|
)
|
|
(10,842
|
)
|
||
Payments for withholding taxes upon delivery of equity-based awards and exercises of stock options
|
(15,402
|
)
|
|
(16,271
|
)
|
||
Deferred acquisition revenue received
|
14,084
|
|
|
11,153
|
|
||
Net changes in other operating assets and liabilities
|
(27,668
|
)
|
|
(11,737
|
)
|
||
Net Cash Provided by Operating Activities
|
216,052
|
|
|
168,637
|
|
||
Cash Flows — Investing Activities
|
|
|
|
||||
Purchases of real estate
|
(435,915
|
)
|
|
(88,334
|
)
|
||
Funding of loans to affiliates
|
(122,447
|
)
|
|
(11,000
|
)
|
||
Change in investing restricted cash
|
31,692
|
|
|
(103,116
|
)
|
||
Proceeds from sale of real estate
|
24,016
|
|
|
280,795
|
|
||
Investment in real estate under construction
|
(21,638
|
)
|
|
(2,835
|
)
|
||
Proceeds from repayment of note receivable
|
9,964
|
|
|
—
|
|
||
Capital contribution to equity investments in real estate
|
(8,643
|
)
|
|
(459
|
)
|
||
Distributions received from equity investments in the Managed Programs and real estate in excess of equity
income
|
3,383
|
|
|
8,889
|
|
||
Capital expenditures on corporate assets
|
(2,312
|
)
|
|
(8,637
|
)
|
||
Capital expenditures on owned real estate
|
(2,026
|
)
|
|
(2,005
|
)
|
||
Other investing activities, net
|
977
|
|
|
740
|
|
||
Cash acquired in connection with the CPA
®
:16 Merger
|
—
|
|
|
65,429
|
|
||
Purchase of securities
|
—
|
|
|
(7,664
|
)
|
||
Cash paid to stockholders of CPA
®
:16 – Global in the CPA
®
:16 Merger
|
—
|
|
|
(1,338
|
)
|
||
Proceeds from repayment of short-term loan to affiliate
|
—
|
|
|
1,155
|
|
||
Net Cash (Used in) Provided by Investing Activities
|
(522,949
|
)
|
|
131,620
|
|
||
Cash Flows — Financing Activities
|
|
|
|
||||
Proceeds from issuance of Senior Unsecured Notes
|
1,022,303
|
|
|
498,195
|
|
||
Repayments of Senior Unsecured Credit Facility
|
(913,868
|
)
|
|
(1,310,000
|
)
|
||
Proceeds from Senior Unsecured Credit Facility
|
484,122
|
|
|
1,042,627
|
|
||
Distributions paid
|
(200,915
|
)
|
|
(158,312
|
)
|
||
Scheduled payments of mortgage principal
|
(36,095
|
)
|
|
(61,608
|
)
|
||
Proceeds from mortgage financing
|
17,778
|
|
|
6,550
|
|
||
Payment of financing costs
|
(10,886
|
)
|
|
(12,192
|
)
|
||
Distributions paid to noncontrolling interests
|
(6,652
|
)
|
|
(12,026
|
)
|
||
Windfall tax benefit associated with stock-based compensation awards
|
6,524
|
|
|
5,449
|
|
||
Contributions from noncontrolling interests
|
483
|
|
|
314
|
|
||
Change in financing restricted cash
|
(342
|
)
|
|
(588
|
)
|
||
Proceeds from exercise of stock options and employee purchases under the employee share purchase plan
|
256
|
|
|
1,184
|
|
||
Prepayments of mortgage principal
|
—
|
|
|
(201,820
|
)
|
||
Purchase of treasury stock from related party
|
—
|
|
|
(677
|
)
|
||
Net Cash Provided by (Used in) Financing Activities
|
362,708
|
|
|
(202,904
|
)
|
||
Change in Cash and Cash Equivalents During the Period
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(20,865
|
)
|
|
99
|
|
||
Net increase in cash and cash equivalents
|
34,946
|
|
|
97,452
|
|
||
Cash and cash equivalents, beginning of period
|
198,683
|
|
|
117,519
|
|
||
Cash and cash equivalents, end of period
|
$
|
233,629
|
|
|
$
|
214,971
|
|
|
W. P. Carey 6/30/2015 10-Q
–
7
|
|
W. P. Carey 6/30/2015 10-Q
–
8
|
|
W. P. Carey 6/30/2015 10-Q
–
9
|
|
W. P. Carey 6/30/2015 10-Q
–
10
|
|
W. P. Carey 6/30/2015 10-Q
–
11
|
|
W. P. Carey 6/30/2015 10-Q
–
12
|
|
Three Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2014
|
||||
Pro forma total revenues
|
$
|
252,907
|
|
|
$
|
487,032
|
|
|
|
|
|
||||
Pro forma net income from continuing operations, net of tax
|
$
|
40,469
|
|
|
$
|
78,409
|
|
Pro forma net income attributable to noncontrolling interests
|
(2,344
|
)
|
|
(2,916
|
)
|
||
Pro forma net loss (income) attributable to redeemable noncontrolling interest
|
111
|
|
|
(151
|
)
|
||
Pro forma net income from continuing operations, net of tax attributable to W. P. Carey
(a)
|
$
|
38,236
|
|
|
$
|
75,342
|
|
|
|
|
|
||||
Pro forma earnings per share:
(a)
|
|
|
|
||||
Basic
|
$
|
0.38
|
|
|
$
|
0.75
|
|
Diluted
|
$
|
0.38
|
|
|
$
|
0.75
|
|
|
|
|
|
||||
Pro forma weighted-average shares:
(b)
|
|
|
|
||||
Basic
|
100,236,362
|
|
|
99,976,714
|
|
||
Diluted
|
100,995,225
|
|
|
100,875,283
|
|
(a)
|
The pro forma income attributable to W. P. Carey for the
three and six
months ended
June 30, 2014
reflects the following income and expenses recognized related to the CPA
®
:16 Merger as if the CPA
®
:16 Merger had taken place on January 1, 2013: (i) combined merger expenses through
December 31, 2014
; (ii) an aggregate gain on change in control of interests; and (iii) an income tax expense from a permanent difference upon recognition of deferred revenue associated with accelerated vesting of shares previously issued by CPA
®
:16 – Global for asset management and performance fees in connection with the CPA
®
:16 Merger.
|
(b)
|
The pro forma weighted-average shares outstanding for the
three and six
months ended
June 30, 2014
were determined as if the
30,729,878
shares of our common stock issued to CPA
®
:16 – Global stockholders in the CPA
®
:16 Merger were issued on January 1, 2013.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Structuring revenue
|
$
|
37,808
|
|
|
$
|
17,254
|
|
|
$
|
59,528
|
|
|
$
|
35,005
|
|
Asset management revenue
|
12,073
|
|
|
9,022
|
|
|
23,185
|
|
|
18,776
|
|
||||
Distributions of Available Cash
|
9,256
|
|
|
5,235
|
|
|
18,062
|
|
|
15,681
|
|
||||
Reimbursable costs from affiliates
|
7,639
|
|
|
41,925
|
|
|
17,246
|
|
|
81,657
|
|
||||
Interest income on deferred acquisition fees and loans to affiliates
|
442
|
|
|
163
|
|
|
596
|
|
|
337
|
|
||||
Dealer manager fees
|
307
|
|
|
7,949
|
|
|
1,581
|
|
|
14,626
|
|
||||
Incentive, termination and subordinated disposition revenue
|
—
|
|
|
—
|
|
|
203
|
|
|
—
|
|
||||
Deferred revenue earned
|
—
|
|
|
—
|
|
|
—
|
|
|
786
|
|
||||
|
$
|
67,525
|
|
|
$
|
81,548
|
|
|
$
|
120,401
|
|
|
$
|
166,868
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
CPA
®
:16 – Global
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,999
|
|
CPA
®
:17 – Global
(b)
|
20,484
|
|
|
16,645
|
|
|
42,161
|
|
|
32,472
|
|
||||
CPA
®
:18 – Global
(b)
|
24,725
|
|
|
42,654
|
|
|
43,666
|
|
|
98,831
|
|
||||
CWI
(b)
|
16,897
|
|
|
22,249
|
|
|
29,155
|
|
|
27,566
|
|
||||
CWI 2
(b)
|
5,419
|
|
|
—
|
|
|
5,419
|
|
|
—
|
|
||||
|
$
|
67,525
|
|
|
$
|
81,548
|
|
|
$
|
120,401
|
|
|
$
|
166,868
|
|
(a)
|
The amount for the
six months ended June 30,
2014
reflects transactions through January 31, 2014, the date of the CPA
®
:16 Merger.
|
(b)
|
The advisory agreements with each of the CPA
®
REITs are scheduled to expire on December 31, 2015 and the advisory agreements with CWI and CWI 2 are scheduled to expire on September 30, 2015 and December 31, 2015, respectively, unless otherwise renewed.
|
|
W. P. Carey 6/30/2015 10-Q
–
13
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Notes receivable from affiliates, including interest thereon
|
$
|
122,724
|
|
|
$
|
—
|
|
Deferred acquisition fees receivable
|
30,725
|
|
|
26,913
|
|
||
Current acquisition fees receivable
|
6,650
|
|
|
2,463
|
|
||
Reimbursable costs
|
5,600
|
|
|
301
|
|
||
Accounts receivable
|
5,068
|
|
|
2,680
|
|
||
Asset management fees receivable
|
3,092
|
|
|
—
|
|
||
Organization and offering costs
|
2,937
|
|
|
2,120
|
|
||
|
$
|
176,796
|
|
|
$
|
34,477
|
|
|
W. P. Carey 6/30/2015 10-Q
–
14
|
|
W. P. Carey 6/30/2015 10-Q
–
15
|
|
|
|
|
|
|
|
|
Carrying Amount at
|
||||||||
Managed Program
|
|
Issue Date
|
|
Principal Amount
|
|
Maturity Date
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||
CWI 2
|
|
4/1/2015
|
|
$
|
37,170
|
|
|
3/31/2016
|
|
$
|
37,170
|
|
|
—
|
|
|
CWI 2
|
|
5/1/2015
|
|
65,277
|
|
|
12/30/2015
|
|
65,277
|
|
|
—
|
|
|||
CCIF
|
|
5/28/2015
|
|
10,000
|
|
|
12/30/2015
|
|
10,000
|
|
|
—
|
|
|||
CCIF
|
|
6/10/2015
|
|
10,000
|
|
|
12/30/2015
|
|
10,000
|
|
|
—
|
|
|||
Principal
|
|
|
|
|
|
|
|
122,447
|
|
|
—
|
|
||||
Accrued interest
|
|
|
|
|
|
|
|
277
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
$
|
122,724
|
|
|
$
|
—
|
|
|
W. P. Carey 6/30/2015 10-Q
–
16
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Land
|
$
|
1,182,707
|
|
|
$
|
1,146,704
|
|
Buildings
|
4,063,736
|
|
|
3,829,981
|
|
||
Real estate under construction
|
49,611
|
|
|
29,997
|
|
||
Less: Accumulated depreciation
|
(317,136
|
)
|
|
(253,627
|
)
|
||
|
$
|
4,978,918
|
|
|
$
|
4,753,055
|
|
•
|
an investment of
$345.9 million
for
73
auto dealership properties in various locations in the United Kingdom on January 28, 2015;
|
•
|
an investment of
$42.4 million
for a logistics facility in Rotterdam, the Netherlands on February 11, 2015;
|
•
|
an investment of
$23.3 million
for a retail facility in Bad Fischau, Austria on April 10, 2015; and
|
•
|
an investment of
$26.3 million
for a logistics facility in Oskarshamn, Sweden on June 17, 2015.
|
|
W. P. Carey 6/30/2015 10-Q
–
17
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Land
|
$
|
7,104
|
|
|
$
|
7,074
|
|
Buildings
|
78,133
|
|
|
77,811
|
|
||
Less: Accumulated depreciation
|
(7,000
|
)
|
|
(4,866
|
)
|
||
|
$
|
78,237
|
|
|
$
|
80,019
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Real estate, net
|
$
|
—
|
|
|
$
|
5,969
|
|
Above-market rent intangible assets, net
|
—
|
|
|
838
|
|
||
In-place lease intangible assets, net
|
—
|
|
|
448
|
|
||
Assets held for sale
|
$
|
—
|
|
|
$
|
7,255
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Minimum lease payments receivable
|
$
|
851,243
|
|
|
$
|
904,788
|
|
Unguaranteed residual value
|
786,871
|
|
|
818,334
|
|
||
|
1,638,114
|
|
|
1,723,122
|
|
||
Less: unearned income
|
(854,282
|
)
|
|
(906,896
|
)
|
||
|
$
|
783,832
|
|
|
$
|
816,226
|
|
|
|
Number of Tenants / Obligors at
|
|
Carrying Value at
|
||||||||
Internal Credit Quality Indicator
|
|
June 30, 2015
|
|
December 31, 2014
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
1
|
|
3
|
|
3
|
|
$
|
134,406
|
|
|
$
|
79,343
|
|
2
|
|
3
|
|
4
|
|
27,068
|
|
|
37,318
|
|
||
3
|
|
22
|
|
22
|
|
510,232
|
|
|
592,631
|
|
||
4
|
|
7
|
|
7
|
|
122,956
|
|
|
127,782
|
|
||
5
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
$
|
794,662
|
|
|
$
|
837,074
|
|
|
W. P. Carey 6/30/2015 10-Q
–
18
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Proportionate share of earnings from equity investments in the Managed Programs
|
$
|
686
|
|
|
$
|
769
|
|
|
$
|
994
|
|
|
$
|
1,549
|
|
Amortization of basis differences on equity investments in the Managed Programs
|
(190
|
)
|
|
(118
|
)
|
|
(375
|
)
|
|
(508
|
)
|
||||
Other-than-temporary impairment charges on the Special Member Interest in CPA
®
:16 – Global’s operating partnership
|
—
|
|
|
—
|
|
|
—
|
|
|
(735
|
)
|
||||
Distributions of Available Cash (
Note 5
)
|
9,256
|
|
|
5,235
|
|
|
18,062
|
|
|
15,681
|
|
||||
Deferred revenue earned (
Note 5
)
|
—
|
|
|
—
|
|
|
—
|
|
|
786
|
|
||||
Total equity earnings from the Managed Programs
|
9,752
|
|
|
5,886
|
|
|
18,681
|
|
|
16,773
|
|
||||
Equity earnings from other equity investments
|
5,449
|
|
|
3,662
|
|
|
9,158
|
|
|
7,618
|
|
||||
Amortization of basis differences on other equity investments
|
(929
|
)
|
|
(96
|
)
|
|
(1,844
|
)
|
|
(677
|
)
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
$
|
14,272
|
|
|
$
|
9,452
|
|
|
$
|
25,995
|
|
|
$
|
23,714
|
|
|
|
% of Outstanding Shares Owned at
|
|
Carrying Amount of Investment at
|
||||||||||
Fund
|
|
June 30, 2015
|
|
December 31, 2014
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||
CPA
®
:17 – Global
(a)
|
|
2.893
|
%
|
|
2.676
|
%
|
|
$
|
83,080
|
|
|
$
|
79,429
|
|
CPA
®
:17 – Global operating partnership
(b)
|
|
0.009
|
%
|
|
0.009
|
%
|
|
—
|
|
|
—
|
|
||
CPA
®
:18 – Global
(c)
|
|
0.420
|
%
|
|
0.221
|
%
|
|
5,677
|
|
|
2,784
|
|
||
CPA
®
:18 – Global operating partnership
(d)
|
|
0.034
|
%
|
|
0.034
|
%
|
|
209
|
|
|
209
|
|
||
CWI
|
|
1.147
|
%
|
|
1.088
|
%
|
|
13,114
|
|
|
13,940
|
|
||
CWI operating partnership
(e)
|
|
0.015
|
%
|
|
0.015
|
%
|
|
—
|
|
|
—
|
|
||
CWI 2
(f)
|
|
3.069
|
%
|
|
—
|
%
|
|
166
|
|
|
—
|
|
||
CWI 2 operating partnership
(g)
|
|
0.015
|
%
|
|
—
|
%
|
|
300
|
|
|
—
|
|
||
CCIF
(h)
|
|
50.000
|
%
|
|
50.000
|
%
|
|
25,162
|
|
|
25,000
|
|
||
|
|
|
|
|
|
$
|
127,708
|
|
|
$
|
121,362
|
|
|
W. P. Carey 6/30/2015 10-Q
–
19
|
(a)
|
Carrying value at June 30, 2015 includes asset management fees receivable, for which
127,007
shares of CPA
®
:17 – Global common stock were issued during the third quarter of 2015. We received distributions from this investment during the six months ended June 30, 2015 and 2014 of
$2.9 million
and
$2.1 million
, respectively.
|
(b)
|
We received distributions from this investment during the six months ended June 30, 2015 and 2014 of
$11.9 million
and $
9.3 million
, respectively.
|
(c)
|
Carrying value at June 30, 2015 includes asset management fees receivable, for which
64,523
shares of CPA
®
:18 – Global class A common stock were issued during the third quarter of 2015.
|
(d)
|
We received distributions from this investment during the six months ended June 30, 2015 and 2014 of
$2.3 million
and $
0.6 million
, respectively.
|
(e)
|
We received distributions from this investment during the six months ended June 30, 2015 and 2014 of
$3.9 million
and $
1.1 million
, respectively.
|
(f)
|
On May 30, 2014, we purchased
22,222
shares of CWI 2’s class A common stock, par value
$0.001
per share, for an aggregate purchase price of
$0.2 million
. On May 15, 2015, upon CWI 2 reaching its minimum offering proceeds and admitting new stockholders, we began to account for our interest in CWI 2 under the equity method of accounting
(
Note 3
)
. As of June 30, 2015, we had not received any distributions from this investment. Carrying value at June 30, 2015 includes asset management fees receivable, for which
16,804
shares of class A common stock of CWI 2 were issued during the third quarter of 2015.
|
(g)
|
On March 27, 2015, we purchased a
0.015%
special general partnership interest in CWI 2 operating partnership for
$0.3 million
. This special general partnership interest entitles us to receive distributions of our proportionate share of earnings up to
10%
of the Available Cash from CWI 2’s operating partnership
(
Note 5
)
. As of June 30, 2015, we had not received any distributions from this investment.
|
(h)
|
As of June 30, 2015, CCIF had not yet admitted any additional shareholders other than our joint venture partner
(Note 1)
.
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Real estate, net
|
$
|
6,327,876
|
|
|
$
|
5,969,011
|
|
Other assets
|
2,817,519
|
|
|
2,293,065
|
|
||
Total assets
|
9,145,395
|
|
|
8,262,076
|
|
||
Debt
|
(4,126,660
|
)
|
|
(3,387,795
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
(601,273
|
)
|
|
(496,857
|
)
|
||
Total liabilities
|
(4,727,933
|
)
|
|
(3,884,652
|
)
|
||
Noncontrolling interests
|
(257,780
|
)
|
|
(170,249
|
)
|
||
Stockholders’ equity
|
$
|
4,159,682
|
|
|
$
|
4,207,175
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
$
|
295,469
|
|
|
$
|
224,594
|
|
|
$
|
531,179
|
|
|
$
|
365,819
|
|
Expenses
|
(273,037
|
)
|
|
(196,673
|
)
|
|
(506,400
|
)
|
|
(331,155
|
)
|
||||
Income from continuing operations
|
$
|
22,432
|
|
|
$
|
27,921
|
|
|
$
|
24,779
|
|
|
$
|
34,664
|
|
Net income (loss) attributable to the Managed Programs
(a) (b)
|
$
|
8,511
|
|
|
$
|
40,469
|
|
|
$
|
(571
|
)
|
|
$
|
47,211
|
|
(a)
|
Inclusive of impairment charges recognized by the Managed Programs totaling
$0.5 million
and
$1.0 million
during the
three and six months ended June 30,
2015
, respectively. These impairment charges reduced our income earned from these investments by less than
$0.1 million
during each of the
three and six months ended June 30,
2015
, respectively. There were no such impairment charges recognized by the Managed Programs during the
three and six months ended June 30,
2014
.
|
(b)
|
Amounts included net gains on sale of real estate recorded by the Managed Programs totaling
$2.2 million
for the
six months ended
June 30, 2015
. Amounts included net gains on sale of real estate recorded by the Managed Programs totaling
$12.5 million
for each of the
three and six months ended June 30,
2014
. There were no gains or losses on sale of real estate recorded by the Managed Programs during the three months ended
June 30, 2015
. Net income (loss) attributable to the
|
|
W. P. Carey 6/30/2015 10-Q
–
20
|
|
|
|
|
Ownership Interest at
|
|
Carrying Value at
|
||||||
Lessee
|
|
Co-owner
|
|
June 30, 2015
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Existing Equity Investments
(a) (b)
|
|
|
|
|
|
|
|
|
||||
C1000 Logistiek Vastgoed B.V.
(c)
|
|
CPA
®
:17 – Global
|
|
15%
|
|
$
|
9,538
|
|
|
$
|
11,192
|
|
Waldaschaff Automotive GmbH and Wagon Automotive Nagold GmbH
(d)
|
|
CPA
®
:17 – Global
|
|
33%
|
|
8,431
|
|
|
6,949
|
|
||
Wanbishi Archives Co. Ltd.
|
|
CPA
®
:17 – Global
|
|
3%
|
|
322
|
|
|
341
|
|
||
|
|
|
|
|
|
18,291
|
|
|
18,482
|
|
||
Equity Investments Acquired in the CPA
®
:16 Merger
|
|
|
|
|
|
|||||||
The New York Times Company
|
|
CPA
®
:17 – Global
|
|
45%
|
|
71,922
|
|
|
72,476
|
|
||
Frontier Spinning Mills, Inc.
(e)
|
|
CPA
®
:17 – Global
|
|
40%
|
|
24,197
|
|
|
15,609
|
|
||
Actebis Peacock GmbH
(a)
|
|
CPA
®
:17 – Global
|
|
30%
|
|
6,195
|
|
|
6,369
|
|
||
|
|
|
|
|
|
102,314
|
|
|
94,454
|
|
||
Recently Acquired Equity Investment
|
|
|
|
|
|
|
|
|
||||
Beach House JV, LLC
(f)
|
|
Third Party
|
|
N/A
(d)
|
|
15,105
|
|
|
15,105
|
|
||
|
|
|
|
|
|
$
|
135,710
|
|
|
$
|
128,041
|
|
(a)
|
The carrying value of this investment is affected by the impact of fluctuations in the exchange rate of the foreign currency.
|
(b)
|
Represents equity investments we acquired prior to January 1, 2014.
|
(c)
|
This investment represents a tenancy-in-common interest, whereby the property is encumbered by the debt for which we are jointly and severally liable. For this investment, the co-obligor is CPA
®
:17 – Global and the amount due under the arrangement was approximately $
75.3 million
at
June 30, 2015
. Of this amount, $
11.3 million
represents the amount we agreed to pay and is included within the carrying value of the investment at
June 30, 2015
.
|
(d)
|
During the
six months ended
June 30, 2015
, we recognized equity income of approximately
$2.1 million
, representing our share of the bankruptcy proceeds received by the jointly-owned investment. As of
June 30, 2015
, we have not received any distribution of our share of the proceeds.
|
(e)
|
We made a contribution of
$8.6 million
in the second quarter of 2015 to this jointly-owned investment to repay the related non-recourse mortgage loan.
|
(f)
|
In March 2014, we received a preferred equity position in Beach House JV, LLC as part of the sale of the Soho House investment. During the
six months ended
June 30, 2015
, we recognized
$0.6 million
of income and distributions related to this investment, which is included in Equity in earnings of equity method investments in the Managed Programs and real estate in the consolidated financial statements.
|
|
W. P. Carey 6/30/2015 10-Q
–
21
|
|
Weighted-Average Life
|
|
Amount
|
||
Amortizable Intangible Assets
|
|
|
|
||
In-place lease
|
14.0
|
|
$
|
46,560
|
|
Above-market rent
|
15.3
|
|
17,318
|
|
|
Below-market ground lease
|
223.4
|
|
6,963
|
|
|
|
|
|
$
|
70,841
|
|
|
|
|
|
||
Amortizable Intangible Liabilities
|
|
|
|
||
Below-market rent
|
14.6
|
|
$
|
(6,492
|
)
|
|
Real Estate Ownership
|
|
Investment Management
|
|
Total
|
||||||
Balance at January 1, 2015
|
$
|
628,808
|
|
|
$
|
63,607
|
|
|
$
|
692,415
|
|
Foreign currency translation adjustments and other
|
(6,732
|
)
|
|
—
|
|
|
(6,732
|
)
|
|||
Acquisition of investment accounted for as business combination
|
1,704
|
|
|
—
|
|
|
1,704
|
|
|||
Allocation of goodwill to the cost basis of properties sold or classified as held-for-sale
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
|||
Balance at June 30, 2015
|
$
|
623,477
|
|
|
$
|
63,607
|
|
|
$
|
687,084
|
|
|
W. P. Carey 6/30/2015 10-Q
–
22
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Amortizable Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Management contracts
|
$
|
32,765
|
|
|
$
|
(32,765
|
)
|
|
$
|
—
|
|
|
$
|
32,765
|
|
|
$
|
(32,765
|
)
|
|
$
|
—
|
|
Internal-use software development costs
|
18,673
|
|
|
(1,014
|
)
|
|
17,659
|
|
|
17,584
|
|
|
(26
|
)
|
|
17,558
|
|
||||||
|
51,438
|
|
|
(33,779
|
)
|
|
17,659
|
|
|
50,349
|
|
|
(32,791
|
)
|
|
17,558
|
|
||||||
Lease Intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-place lease and tenant relationship
|
1,192,512
|
|
|
(243,965
|
)
|
|
948,547
|
|
|
1,185,692
|
|
|
(191,873
|
)
|
|
993,819
|
|
||||||
Above-market rent
|
647,421
|
|
|
(148,675
|
)
|
|
498,746
|
|
|
639,370
|
|
|
(116,573
|
)
|
|
522,797
|
|
||||||
Below-market ground lease
|
23,950
|
|
|
(659
|
)
|
|
23,291
|
|
|
17,771
|
|
|
(435
|
)
|
|
17,336
|
|
||||||
|
1,863,883
|
|
|
(393,299
|
)
|
|
1,470,584
|
|
|
1,842,833
|
|
|
(308,881
|
)
|
|
1,533,952
|
|
||||||
Unamortizable Goodwill and Indefinite-Lived Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
687,084
|
|
|
—
|
|
|
687,084
|
|
|
692,415
|
|
|
—
|
|
|
692,415
|
|
||||||
Trade name
|
3,975
|
|
|
—
|
|
|
3,975
|
|
|
3,975
|
|
|
—
|
|
|
3,975
|
|
||||||
|
691,059
|
|
|
—
|
|
|
691,059
|
|
|
696,390
|
|
|
—
|
|
|
696,390
|
|
||||||
Total intangible assets
|
$
|
2,606,380
|
|
|
$
|
(427,078
|
)
|
|
$
|
2,179,302
|
|
|
$
|
2,589,572
|
|
|
$
|
(341,672
|
)
|
|
$
|
2,247,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortizable Intangible Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Below-market rent
|
$
|
(172,225
|
)
|
|
$
|
29,048
|
|
|
$
|
(143,177
|
)
|
|
$
|
(169,231
|
)
|
|
$
|
23,039
|
|
|
$
|
(146,192
|
)
|
Above-market ground lease
|
(13,114
|
)
|
|
1,458
|
|
|
(11,656
|
)
|
|
(13,311
|
)
|
|
1,144
|
|
|
(12,167
|
)
|
||||||
|
(185,339
|
)
|
|
30,506
|
|
|
(154,833
|
)
|
|
(182,542
|
)
|
|
24,183
|
|
|
(158,359
|
)
|
||||||
Unamortizable Intangible Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Below-market purchase option
|
(16,711
|
)
|
|
—
|
|
|
(16,711
|
)
|
|
(16,711
|
)
|
|
—
|
|
|
(16,711
|
)
|
||||||
Total intangible liabilities
|
$
|
(202,050
|
)
|
|
$
|
30,506
|
|
|
$
|
(171,544
|
)
|
|
$
|
(199,253
|
)
|
|
$
|
24,183
|
|
|
$
|
(175,070
|
)
|
Years Ending December 31,
|
|
Net Decrease in
Lease Revenues
|
|
Increase to Amortization/
Property Expenses
|
|
Net
|
||||||
2015 (remainder)
|
|
$
|
26,677
|
|
|
$
|
56,565
|
|
|
$
|
83,242
|
|
2016
|
|
52,238
|
|
|
112,082
|
|
|
164,320
|
|
|||
2017
|
|
49,443
|
|
|
108,289
|
|
|
157,732
|
|
|||
2018
|
|
46,225
|
|
|
98,790
|
|
|
145,015
|
|
|||
2019
|
|
42,329
|
|
|
93,541
|
|
|
135,870
|
|
|||
Thereafter
|
|
138,657
|
|
|
508,574
|
|
|
647,231
|
|
|||
Total
|
|
$
|
355,569
|
|
|
$
|
977,841
|
|
|
$
|
1,333,410
|
|
|
W. P. Carey 6/30/2015 10-Q
–
23
|
|
W. P. Carey 6/30/2015 10-Q
–
24
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
Level
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Non-recourse debt
(a)
|
|
3
|
|
$
|
2,443,212
|
|
|
$
|
2,468,334
|
|
|
$
|
2,532,683
|
|
|
$
|
2,574,437
|
|
Senior Unsecured Notes
(b)
|
|
2
|
|
1,501,061
|
|
|
1,487,777
|
|
|
498,345
|
|
|
527,029
|
|
||||
Senior Unsecured Credit Facility
(c)
|
|
2
|
|
600,234
|
|
|
600,235
|
|
|
1,057,518
|
|
|
1,057,519
|
|
||||
Notes receivable from affiliates
|
|
3
|
|
122,724
|
|
|
122,724
|
|
|
—
|
|
|
—
|
|
||||
Deferred acquisition fees receivable
(d)
|
|
3
|
|
30,725
|
|
|
29,946
|
|
|
26,913
|
|
|
28,027
|
|
||||
Notes receivable
(a)
|
|
3
|
|
10,834
|
|
|
9,509
|
|
|
20,848
|
|
|
19,604
|
|
(a)
|
We determined the estimated fair value of these financial instruments using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, where applicable, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity and the current market interest rate.
|
(b)
|
We determined the estimated fair value of the Senior Unsecured Notes (
Note 12
) using quoted market prices in an open market with limited trading volume.
|
(c)
|
We determined the estimated fair value of our Senior Unsecured Credit Facility (
Note 12
) using a discounted cash flow model with rates that take into account the market-based credit spread and our credit rating.
|
(d)
|
We determined the estimated fair value of our deferred acquisition fees receivable based on an estimate of discounted cash flows using two significant unobservable inputs, which are the leverage adjusted unsecured spread of
205 basis points
and an illiquidity adjustment of
75 basis points
at
June 30, 2015
. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement.
|
|
W. P. Carey 6/30/2015 10-Q
–
25
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||||
|
Fair Value
Measurements
|
|
Total Impairment
Charges
|
|
Fair Value
Measurements |
|
Total Impairment
Charges |
||||||||
Impairment Charges
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
782
|
|
|
$
|
591
|
|
|
$
|
5,200
|
|
|
$
|
2,066
|
|
|
Six Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2014
|
||||||||||||
|
Fair Value
Measurements
|
|
Total Impairment
Charges
|
|
Fair Value
Measurements |
|
Total Impairment
Charges |
||||||||
Impairment Charges
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
6,076
|
|
|
$
|
3,274
|
|
|
$
|
5,200
|
|
|
$
|
2,066
|
|
Equity investments in real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
735
|
|
||||
|
|
|
$
|
3,274
|
|
|
|
|
$
|
2,801
|
|
|
W. P. Carey 6/30/2015 10-Q
–
26
|
Derivatives Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
Asset Derivatives Fair Value at
|
|
Liability Derivatives Fair Value at
|
||||||||||||
|
|
June 30, 2015
|
|
December 31, 2014
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||
Interest rate cap
|
|
Other assets, net
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
Other assets, net
|
|
284
|
|
|
285
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
|
Other assets, net
|
|
34,116
|
|
|
16,307
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency collars
|
|
Other assets, net
|
|
2,443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(5,001
|
)
|
|
(5,660
|
)
|
||||
Foreign currency forward contracts
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
||||
Foreign currency collars
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|
—
|
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock warrants
|
|
Other assets, net
|
|
3,886
|
|
|
3,753
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
(a)
|
|
Other assets, net
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
(a)
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(4,792
|
)
|
|
(7,496
|
)
|
||||
Total derivatives
|
|
|
|
$
|
40,742
|
|
|
$
|
20,348
|
|
|
$
|
(10,163
|
)
|
|
$
|
(13,156
|
)
|
(a)
|
These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt.
|
|
W. P. Carey 6/30/2015 10-Q
–
27
|
|
|
Amount of Gain (Loss) Recognized on Derivatives in
Other Comprehensive Income (Loss) (Effective Portion)
(a)
|
||||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Foreign currency forward contracts
|
|
$
|
(7,536
|
)
|
|
$
|
(451
|
)
|
|
$
|
14,053
|
|
|
$
|
(3,115
|
)
|
Foreign currency collars
|
|
(4,044
|
)
|
|
—
|
|
|
2,066
|
|
|
—
|
|
||||
Interest rate swaps
|
|
1,338
|
|
|
(1,431
|
)
|
|
157
|
|
|
(1,617
|
)
|
||||
Interest rate caps
|
|
2
|
|
|
(4
|
)
|
|
1
|
|
|
(21
|
)
|
||||
Derivatives in Net Investment Hedging Relationships
(b)
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
(350
|
)
|
|
—
|
|
|
3,306
|
|
|
—
|
|
||||
Total
|
|
$
|
(10,590
|
)
|
|
$
|
(1,886
|
)
|
|
$
|
19,583
|
|
|
$
|
(4,753
|
)
|
|
|
|
|
Amount of (Loss) Gain on Derivatives Reclassified from
Other Comprehensive Income (Loss) (Effective Portion)
(c)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of Gain (Loss) Recognized in Income
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
Foreign currency forward contracts
|
|
Other income and (expenses)
|
|
$
|
1,876
|
|
|
$
|
(440
|
)
|
|
$
|
3,730
|
|
|
$
|
(824
|
)
|
Interest rate swaps and caps
|
|
Interest expense
|
|
(609
|
)
|
|
(634
|
)
|
|
(1,218
|
)
|
|
(1,335
|
)
|
||||
Foreign currency collars
|
|
Other income and (expenses)
|
|
357
|
|
|
—
|
|
|
357
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
1,624
|
|
|
$
|
(1,074
|
)
|
|
$
|
2,869
|
|
|
$
|
(2,159
|
)
|
(a)
|
Excludes net gains of
$0.6 million
and less than
$0.1 million
recognized on unconsolidated jointly-owned investments for the three months ended
June 30, 2015
and
2014
, respectively, and net gains of
$0.9 million
and less than
$0.1 million
for the
six months ended June 30, 2015
and
2014
, respectively.
|
(b)
|
The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of
Other comprehensive income (loss)
until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.
|
(c)
|
Excludes net gains recognized on unconsolidated jointly-owned investments of
$0.2 million
and
$0.3 million
for the
three and six months ended June 30,
2014
, respectively. There were no such gains or losses recognized for the
three and six months ended June 30,
2015
.
|
|
W. P. Carey 6/30/2015 10-Q
–
28
|
|
|
|
|
Amount of Gain (Loss) on Derivatives Recognized in Income
|
||||||||||||||
Derivatives Not in Cash Flow Hedging Relationships
|
|
Location of Gain (Loss) Recognized in Income
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
1,112
|
|
|
$
|
507
|
|
|
$
|
2,085
|
|
|
$
|
985
|
|
Stock warrants
|
|
Other income and (expenses)
|
|
469
|
|
|
(134
|
)
|
|
134
|
|
|
(134
|
)
|
||||
Foreign currency forwards
|
|
Other income and (expenses)
|
|
(347
|
)
|
|
—
|
|
|
(347
|
)
|
|
—
|
|
||||
Foreign currency collars
|
|
Other income and (expenses)
|
|
(357
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
(a)
|
|
Interest expense
|
|
187
|
|
|
—
|
|
|
335
|
|
|
—
|
|
||||
Foreign currency collars
|
|
Other income and (expenses)
|
|
11
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
|
Other income and (expenses)
|
|
(1
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
1,074
|
|
|
$
|
373
|
|
|
$
|
2,239
|
|
|
$
|
851
|
|
(a)
|
Relates to the ineffective portion of the hedging relationship.
|
|
|
Number of Instruments
|
|
Notional
Amount
|
|
Fair Value at
June 30, 2015
(a)
|
||||
Interest Rate Derivatives
|
|
|
|
|||||||
Designated as Cash Flow Hedging Instruments
|
|
|
|
|
|
|
|
|||
Interest rate swaps
|
|
13
|
|
124,117
|
|
USD
|
|
$
|
(3,991
|
)
|
Interest rate swaps
|
|
1
|
|
6,060
|
|
EUR
|
|
(726
|
)
|
|
Interest rate cap
(b)
|
|
1
|
|
43,736
|
|
EUR
|
|
1
|
|
|
Not Designated as Cash Flow Hedging Instruments
|
|
|
|
|
|
|
|
|||
Interest rate swaps
(c)
|
|
3
|
|
106,105
|
|
EUR
|
|
(4,792
|
)
|
|
Interest rate swaps
(c)
|
|
1
|
|
3,192
|
|
USD
|
|
12
|
|
|
|
|
|
|
|
|
|
$
|
(9,496
|
)
|
(a)
|
Fair value amounts are based on the exchange rate of the euro at
June 30, 2015
, as applicable.
|
(b)
|
The applicable interest rate of the related debt was
1.0%
, which were below the strike prices of the caps of
3.0%
at
June 30, 2015
.
|
|
W. P. Carey 6/30/2015 10-Q
–
29
|
(c)
|
These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt.
|
|
|
Number of Instruments
|
|
Notional
Amount |
|
Fair Value at
June 30, 2015
(a)
|
||||
Foreign Currency Derivatives
|
|
|
|
|||||||
Designated as Cash Flow Hedging Instruments
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
60
|
|
142,201
|
|
EUR
|
|
$
|
26,404
|
|
Foreign currency collars
|
|
18
|
|
78,750
|
|
EUR
|
|
2,443
|
|
|
Foreign currency forward contracts
|
|
18
|
|
22,702
|
|
AUD
|
|
1,827
|
|
|
Foreign currency collars
|
|
6
|
|
10,500
|
|
GBP
|
|
(352
|
)
|
|
Foreign currency forward contracts
|
|
14
|
|
7,490
|
|
GBP
|
|
(5
|
)
|
|
Designated as Net Investment Hedging Instruments
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
5
|
|
84,522
|
|
AUD
|
|
5,872
|
|
|
|
|
|
|
|
|
|
$
|
36,189
|
|
(a)
|
Fair value amounts are based on the applicable exchange rate of the foreign currency at
June 30, 2015
.
|
|
W. P. Carey 6/30/2015 10-Q
–
30
|
|
W. P. Carey 6/30/2015 10-Q
–
31
|
Notes
|
|
Issue Date
|
|
Principal Amount
|
|
Price of Par Value
|
|
Discount
|
|
Effective Interest Rate
|
|
Coupon Rate
|
|
Maturity Date
|
|||||||
4.6% Senior Notes
|
|
3/14/2014
|
|
$
|
500.0
|
|
|
99.639
|
%
|
|
$
|
1.8
|
|
|
4.645
|
%
|
|
4.6
|
%
|
|
4/1/2024
|
2.0% Senior Euro Notes
(a)
|
|
1/21/2015
|
|
€
|
500.0
|
|
|
99.220
|
%
|
|
$
|
4.6
|
|
|
2.107
|
%
|
|
2.0
|
%
|
|
1/20/2023
|
4.0% Senior Notes
(a)
|
|
1/26/2015
|
|
$
|
450.0
|
|
|
99.372
|
%
|
|
$
|
2.8
|
|
|
4.077
|
%
|
|
4.0
|
%
|
|
2/1/2025
|
(a)
|
Proceeds from the issuances of these notes were used primarily to partially pay down the amounts then outstanding under our Revolver.
|
|
W. P. Carey 6/30/2015 10-Q
–
32
|
Years Ending December 31,
|
|
Total
(a)
|
||
2015 (remainder)
|
|
$
|
189,265
|
|
2016
(b)
|
|
584,246
|
|
|
2017
|
|
726,514
|
|
|
2018
(c)
|
|
619,622
|
|
|
2019
|
|
99,257
|
|
|
Thereafter through 2038
(d)
|
|
2,328,401
|
|
|
|
|
4,547,305
|
|
|
Unamortized discount, net
(e)
|
|
(2,798
|
)
|
|
Total
|
|
$
|
4,544,507
|
|
(a)
|
Certain amounts are based on the applicable foreign currency exchange rate at
June 30, 2015
.
|
(b)
|
Includes $
250.0 million
outstanding under our Term Loan Facility at
June 30, 2015
, which is scheduled to mature on January 31, 2016 unless extended pursuant to its terms.
|
(c)
|
Includes $
350.2 million
outstanding under our Revolver at
June 30, 2015
, which is scheduled to mature on January 31, 2018 unless extended pursuant to its terms.
|
(d)
|
Includes $
1.5 billion
of outstanding Senior Unsecured Notes, which are scheduled to mature during 2023 through 2025.
|
(e)
|
Represents the unamortized discount on the Senior Unsecured Notes of
$8.4 million
partially offset by unamortized premium of
$5.6 million
in the aggregate resulting from the assumption of property-level debt in connection with the CPA
®
:15 Merger and CPA
®
:16 Merger.
|
|
W. P. Carey 6/30/2015 10-Q
–
33
|
|
RSA and RSU Awards
|
|
PSU Awards
|
||||||||||
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value |
||||||
Nonvested at January 1, 2015
|
442,502
|
|
|
$
|
53.03
|
|
|
877,641
|
|
|
$
|
32.06
|
|
Granted
(a)
|
173,741
|
|
|
70.89
|
|
|
65,277
|
|
|
85.61
|
|
||
Vested
(b)
|
(242,995
|
)
|
|
48.40
|
|
|
(792,465
|
)
|
|
56.27
|
|
||
Forfeited
|
(8,451
|
)
|
|
65.91
|
|
|
—
|
|
|
—
|
|
||
Adjustment
(c)
|
—
|
|
|
—
|
|
|
218,363
|
|
|
55.25
|
|
||
Nonvested at June 30, 2015
(d)
|
364,797
|
|
|
$
|
64.33
|
|
|
368,816
|
|
|
$
|
48.23
|
|
(a)
|
The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant. The grant date fair value of PSUs were determined utilizing a Monte Carlo simulation model to generate a range of possible future stock prices for both us and the plan defined peer index over the three-year performance period. To estimate the fair value of PSUs granted during the
six months ended
June 30, 2015
, we used a risk-free interest rate of
1.0%
and an expected volatility rate of
20.2%
(the plan defined peer index assumes
13.5%
) and assumed a dividend yield of
zero
.
|
(b)
|
The total fair value of shares vested during the
six months ended
June 30, 2015
was $
56.4 million
. Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date, pursuant to previously-made deferral elections. At
June 30, 2015
and
December 31, 2014
, we had an obligation to issue
1,430,900
and
848,788
shares, respectively, of our common stock underlying such deferred awards, which is recorded within W. P. Carey stockholders’ equity as a Deferred compensation obligation of $
57.4 million
and
$30.6 million
, respectively.
|
(c)
|
Vesting and payment of the PSUs is conditioned upon certain company and market performance goals being met during the relevant three-year performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from zero to three times the original awards. In connection with the payment of the PSUs granted in 2012, which were paid out in February 2015, we adjusted the shares during the
six months ended
June 30, 2015
to reflect the actual number of shares issued. There was no impact on our consolidated financial statements related to these adjustments, as the initial fair value of our PSUs factored in the variability associated with the performance features of these awards.
|
(d)
|
At
June 30, 2015
, total unrecognized compensation expense related to these awards was approximately $
30.4 million
, with an aggregate weighted-average remaining term of
2.0
years.
|
|
W. P. Carey 6/30/2015 10-Q
–
34
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income attributable to W. P. Carey
|
$
|
63,348
|
|
|
$
|
64,739
|
|
|
$
|
99,464
|
|
|
$
|
180,217
|
|
Allocation of distribution equivalents paid on nonvested RSUs and RSAs in excess of income
|
(218
|
)
|
|
(277
|
)
|
|
(342
|
)
|
|
(770
|
)
|
||||
Net income – basic
|
63,130
|
|
|
64,462
|
|
|
99,122
|
|
|
179,447
|
|
||||
Income effect of dilutive securities, net of taxes
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
82
|
|
||||
Net income – diluted
|
$
|
63,130
|
|
|
$
|
64,402
|
|
|
$
|
99,122
|
|
|
$
|
179,529
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding – basic
|
105,764,032
|
|
|
100,236,362
|
|
|
105,532,976
|
|
|
94,855,067
|
|
||||
Effect of dilutive securities
|
517,951
|
|
|
758,863
|
|
|
822,426
|
|
|
1,002,849
|
|
||||
Weighted-average shares outstanding – diluted
|
106,281,983
|
|
|
100,995,225
|
|
|
106,355,402
|
|
|
95,857,916
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
6,071
|
|
|
$
|
7,436
|
|
Redemption value adjustment
|
7,303
|
|
|
(306
|
)
|
||
Net income
|
—
|
|
|
151
|
|
||
Distributions
|
—
|
|
|
(836
|
)
|
||
Change in other comprehensive income
|
—
|
|
|
(27
|
)
|
||
Ending balance
|
$
|
13,374
|
|
|
$
|
6,418
|
|
|
W. P. Carey 6/30/2015 10-Q
–
35
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Net income attributable to W. P. Carey
|
$
|
99,464
|
|
|
$
|
180,217
|
|
Transfers to noncontrolling interest
|
|
|
|
||||
Decrease in W. P. Carey’s additional paid-in capital for purchases of less-than-wholly-owned investments in connection with the CPA
®
:16 Merger
|
—
|
|
|
(41,374
|
)
|
||
Net transfers to noncontrolling interest
|
—
|
|
|
(41,374
|
)
|
||
Change from net income attributable to W. P. Carey and transfers to noncontrolling interest
|
$
|
99,464
|
|
|
$
|
138,843
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||
|
Gains and Losses on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and Losses on Marketable Securities
|
|
Total
|
||||||||
Beginning balance
|
$
|
40,415
|
|
|
$
|
(198,113
|
)
|
|
$
|
35
|
|
|
$
|
(157,663
|
)
|
Other comprehensive income (loss) before reclassifications
|
(7,995
|
)
|
|
48,090
|
|
|
—
|
|
|
40,095
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) to:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
609
|
|
|
—
|
|
|
—
|
|
|
609
|
|
||||
Other income and (expenses)
|
(2,233
|
)
|
|
—
|
|
|
—
|
|
|
(2,233
|
)
|
||||
Total
|
(1,624
|
)
|
|
—
|
|
|
—
|
|
|
(1,624
|
)
|
||||
Net current period other comprehensive income (loss)
|
(9,619
|
)
|
|
48,090
|
|
|
—
|
|
|
38,471
|
|
||||
Net current period other comprehensive gain attributable to noncontrolling interests and redeemable noncontrolling interest
|
—
|
|
|
(1,585
|
)
|
|
—
|
|
|
(1,585
|
)
|
||||
Ending balance
|
$
|
30,796
|
|
|
$
|
(151,608
|
)
|
|
$
|
35
|
|
|
$
|
(120,777
|
)
|
|
W. P. Carey 6/30/2015 10-Q
–
36
|
|
Three Months Ended June 30, 2014
|
||||||||||||||
|
Gains and Losses on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and Losses on Marketable Securities
|
|
Total
|
||||||||
Beginning balance
|
$
|
(10,285
|
)
|
|
$
|
27,680
|
|
|
$
|
48
|
|
|
$
|
17,443
|
|
Other comprehensive (loss) income before reclassifications
|
(3,001
|
)
|
|
(1,590
|
)
|
|
(5
|
)
|
|
(4,596
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) to:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
634
|
|
|
—
|
|
|
—
|
|
|
634
|
|
||||
Other income and (expenses)
|
440
|
|
|
—
|
|
|
—
|
|
|
440
|
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
160
|
|
|
—
|
|
|
—
|
|
|
160
|
|
||||
Total
|
1,234
|
|
|
—
|
|
|
—
|
|
|
1,234
|
|
||||
Net current period other comprehensive (loss) income
|
(1,767
|
)
|
|
(1,590
|
)
|
|
(5
|
)
|
|
(3,362
|
)
|
||||
Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
||||
Ending balance
|
$
|
(12,052
|
)
|
|
$
|
26,224
|
|
|
$
|
43
|
|
|
$
|
14,215
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||
|
Gains and Losses on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and Losses on Marketable Securities
|
|
Total
|
||||||||
Beginning balance
|
$
|
13,597
|
|
|
$
|
(89,177
|
)
|
|
$
|
21
|
|
|
$
|
(75,559
|
)
|
Other comprehensive income (loss) before reclassifications
|
20,068
|
|
|
(65,989
|
)
|
|
14
|
|
|
(45,907
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) to:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
1,218
|
|
|
—
|
|
|
—
|
|
|
1,218
|
|
||||
Other income and (expenses)
|
(4,087
|
)
|
|
—
|
|
|
—
|
|
|
(4,087
|
)
|
||||
Total
|
(2,869
|
)
|
|
—
|
|
|
—
|
|
|
(2,869
|
)
|
||||
Net current period other comprehensive income (loss)
|
17,199
|
|
|
(65,989
|
)
|
|
14
|
|
|
(48,776
|
)
|
||||
Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest
|
—
|
|
|
3,558
|
|
|
—
|
|
|
3,558
|
|
||||
Ending balance
|
$
|
30,796
|
|
|
$
|
(151,608
|
)
|
|
$
|
35
|
|
|
$
|
(120,777
|
)
|
|
W. P. Carey 6/30/2015 10-Q
–
37
|
|
Six Months Ended June 30, 2014
|
||||||||||||||
|
Gains and Losses on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and Losses on Marketable Securities
|
|
Total
|
||||||||
Beginning balance
|
$
|
(7,488
|
)
|
|
$
|
22,793
|
|
|
$
|
31
|
|
|
$
|
15,336
|
|
Other comprehensive (loss) income before reclassifications
|
(7,002
|
)
|
|
2,956
|
|
|
12
|
|
|
(4,034
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) to:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
1,335
|
|
|
—
|
|
|
—
|
|
|
1,335
|
|
||||
Other income and (expenses)
|
824
|
|
|
—
|
|
|
—
|
|
|
824
|
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
279
|
|
|
—
|
|
|
—
|
|
|
279
|
|
||||
Total
|
2,438
|
|
|
—
|
|
|
—
|
|
|
2,438
|
|
||||
Net current period other comprehensive (loss) income
|
(4,564
|
)
|
|
2,956
|
|
|
12
|
|
|
(1,596
|
)
|
||||
Net current period other comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interest
|
—
|
|
|
475
|
|
|
—
|
|
|
475
|
|
||||
Ending balance
|
$
|
(12,052
|
)
|
|
$
|
26,224
|
|
|
$
|
43
|
|
|
$
|
14,215
|
|
|
W. P. Carey 6/30/2015 10-Q
–
38
|
|
W. P. Carey 6/30/2015 10-Q
–
39
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
2,302
|
|
|
$
|
—
|
|
|
$
|
8,586
|
|
Expenses
|
—
|
|
|
(707
|
)
|
|
—
|
|
|
(2,161
|
)
|
||||
Gain (loss) on extinguishment of debt
|
—
|
|
|
249
|
|
|
—
|
|
|
(1,271
|
)
|
||||
Gain on sale of real estate
|
—
|
|
|
24,577
|
|
|
—
|
|
|
27,674
|
|
||||
Income from discontinued operations
|
$
|
—
|
|
|
$
|
26,421
|
|
|
$
|
—
|
|
|
$
|
32,828
|
|
|
W. P. Carey 6/30/2015 10-Q
–
40
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Real Estate Ownership
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
180,252
|
|
|
$
|
177,241
|
|
|
$
|
356,677
|
|
|
$
|
312,502
|
|
Operating expenses
(a)
|
(97,581
|
)
|
|
(93,115
|
)
|
|
(203,178
|
)
|
|
(200,344
|
)
|
||||
Interest expense
|
(47,693
|
)
|
|
(47,733
|
)
|
|
(95,642
|
)
|
|
(86,808
|
)
|
||||
Other income and expenses, excluding interest expense
|
21,714
|
|
|
7,913
|
|
|
28,951
|
|
|
122,809
|
|
||||
(Provision for) benefit from income taxes
|
(3,845
|
)
|
|
(3,110
|
)
|
|
(2,571
|
)
|
|
928
|
|
||||
Gain (loss) on sale of real estate, net of tax
|
16
|
|
|
(3,823
|
)
|
|
1,201
|
|
|
(3,743
|
)
|
||||
Net income attributable to noncontrolling interests
|
(1,591
|
)
|
|
(2,325
|
)
|
|
(4,057
|
)
|
|
(3,713
|
)
|
||||
Net income attributable to noncontrolling interests of discontinued operations
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(178
|
)
|
||||
Income from continuing operations attributable to W. P. Carey
|
$
|
51,272
|
|
|
$
|
35,005
|
|
|
$
|
81,381
|
|
|
$
|
141,453
|
|
Investment Management
|
|
|
|
|
|
|
|
||||||||
Revenues
(b)
|
$
|
57,827
|
|
|
$
|
76,173
|
|
|
$
|
101,790
|
|
|
$
|
150,110
|
|
Operating expenses
(b) (c)
|
(32,801
|
)
|
|
(68,245
|
)
|
|
(67,683
|
)
|
|
(132,624
|
)
|
||||
Other income and expenses, excluding interest expense
|
199
|
|
|
161
|
|
|
379
|
|
|
(167
|
)
|
||||
Provision for income taxes
|
(11,165
|
)
|
|
(4,911
|
)
|
|
(14,419
|
)
|
|
(11,202
|
)
|
||||
Net income attributable to noncontrolling interests
|
(1,984
|
)
|
|
(19
|
)
|
|
(1,984
|
)
|
|
(208
|
)
|
||||
Net loss (income) attributable to redeemable noncontrolling interests
|
—
|
|
|
111
|
|
|
—
|
|
|
(151
|
)
|
||||
Income from continuing operations attributable to W. P. Carey
|
$
|
12,076
|
|
|
$
|
3,270
|
|
|
$
|
18,083
|
|
|
$
|
5,758
|
|
Total Company
|
|
|
|
|
|
|
|
||||||||
Revenues
(b)
|
$
|
238,079
|
|
|
$
|
253,414
|
|
|
$
|
458,467
|
|
|
$
|
462,612
|
|
Operating expenses
(a) (b) (c)
|
(130,382
|
)
|
|
(161,360
|
)
|
|
(270,861
|
)
|
|
(332,968
|
)
|
||||
Interest expense
|
(47,693
|
)
|
|
(47,733
|
)
|
|
(95,642
|
)
|
|
(86,808
|
)
|
||||
Other income and expenses, excluding interest expense
|
21,913
|
|
|
8,074
|
|
|
29,330
|
|
|
122,642
|
|
||||
Provision for income taxes
|
(15,010
|
)
|
|
(8,021
|
)
|
|
(16,990
|
)
|
|
(10,274
|
)
|
||||
Gain (loss) on sale of real estate, net of tax
|
16
|
|
|
(3,823
|
)
|
|
1,201
|
|
|
(3,743
|
)
|
||||
Net income attributable to noncontrolling interests
|
(3,575
|
)
|
|
(2,344
|
)
|
|
(6,041
|
)
|
|
(3,921
|
)
|
||||
Net income attributable to noncontrolling interests of discontinued operations
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(178
|
)
|
||||
Net loss (income) attributable to redeemable noncontrolling interests
|
—
|
|
|
111
|
|
|
—
|
|
|
(151
|
)
|
||||
Income from continuing operations attributable to W. P. Carey
|
$
|
63,348
|
|
|
$
|
38,275
|
|
|
$
|
99,464
|
|
|
$
|
147,211
|
|
|
Total Long-Lived Assets at
(d)
|
|
Total Assets at
|
||||||||||||
|
June 30, 2015
|
|
December 31, 2014
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||
Real Estate Ownership
|
$
|
6,079,243
|
|
|
$
|
5,880,958
|
|
|
$
|
8,769,493
|
|
|
$
|
8,459,406
|
|
Investment Management
|
25,162
|
|
|
25,000
|
|
|
198,111
|
|
|
189,073
|
|
||||
Total Company
|
$
|
6,104,405
|
|
|
$
|
5,905,958
|
|
|
$
|
8,967,604
|
|
|
$
|
8,648,479
|
|
(a)
|
Includes expenses incurred of
$30.4 million
related to the CPA
®
:16 Merger for the
six months ended
June 30, 2014
.
|
|
W. P. Carey 6/30/2015 10-Q
–
41
|
(b)
|
Included in revenues and operating expenses are reimbursable tenant and affiliate costs totaling
$13.8 million
and
$47.7 million
for the three months ended
June 30, 2015
and
2014
, respectively, and
$29.3 million
and
$93.4 million
for the
six months ended June 30, 2015
and
2014
, respectively.
|
(c)
|
Includes Stock-based compensation expense of
$5.1 million
and
$8.0 million
for the three months ended
June 30, 2015
and
2014
, respectively, of which
$3.1 million
and
$5.3 million
, respectively, were included in the Investment Management segment; and
$12.1 million
and
$15.0 million
for the
six months ended June 30, 2015
and
2014
, of which
$7.6 million
and
$9.5 million
, respectively, were included in the Investment Management segment.
|
(d)
|
Consists of Net investments in real estate and
Equity investments in the Managed Programs and real estate
. Total long-lived assets for our Investment Management segment consists of our equity investment in CCIF (
Note 8
).
|
|
W. P. Carey 6/30/2015 10-Q
–
42
|
•
|
Jason E. Fox was named President of W. P. Carey, in addition to his existing role as Global Head of Investments overseeing the sourcing, negotiating and structuring of acquisitions on behalf of W. P. Carey and the CPA
®
REITs;
|
•
|
Catherine D. Rice, who was the Chief Financial Officer of W. P. Carey, was promoted to Senior Managing Director in a newly created internal advisory role focused on examining our core businesses; and
|
•
|
Hisham A. Kader, who was the Chief Accounting Officer of W. P. Carey, became our Chief Financial Officer.
|
•
|
On January 15, 2015, we exercised the accordion feature on our Senior Unsecured Credit Facility, which increased the maximum borrowing capacity under our Revolver from $1.0 billion to $1.5 billion. We also amended the Senior
|
|
W. P. Carey 6/30/2015 10-Q
–
43
|
•
|
On January 21, 2015, we issued €500.0 million ($591.7 million) of 2.0% Senior Euro Notes, at a price of 99.22% of par value, in a registered public offering. These 2.0% Senior Euro Notes have an eight-year term and are scheduled to mature on January 20, 2023.
|
•
|
On January 26, 2015, we issued $450.0 million of 4.0% Senior Notes, at a price of 99.372% of par value, in a registered public offering. These 4.0% Senior Notes have a ten-year term and are scheduled to mature on February 1, 2025.
|
•
|
We structured investments in
nine
properties,
two
loans receivable, and
one
equity investment for an aggregate of
$237.5 million
, inclusive of acquisition-related costs, on behalf of CPA
®
:17 – Global. Approximately
$75.8 million
was invested in Europe and
$161.7 million
was invested in the United States.
|
•
|
We structured investments in
36
properties for an aggregate of
$676.2 million
, inclusive of acquisition-related costs, on behalf of CPA
®
:18 – Global. Approximately
$302.1 million
was invested in the United States,
$353.5 million
was invested in Europe, and
$20.6 million
was invested in Canada.
|
•
|
We structured investments in
six
domestic hotels for a total of
$633.3 million
, inclusive of acquisition-related costs, on behalf of CWI. One of these investments is jointly-owned with CWI 2.
|
•
|
We structured investments in
two
domestic hotels for a total of
$144.2 million
, inclusive of acquisition-related costs, on behalf of CWI 2. One of these investments is jointly-owned with CWI 1.
|
•
|
During the
six months ended
June 30, 2015
, we arranged financing totaling
$101.9 million
for CPA
®
:17 – Global,
$363.1 million
for CPA
®
:18 – Global,
$252.6 million
for CWI, and
$42.0 million
for CWI 2.
|
|
W. P. Carey 6/30/2015 10-Q
–
44
|
•
|
CPA
®
:18 – Global commenced its initial public offering in May 2013 and through the termination of the offering in April
2015
, raised approximately $
1.2 billion
, of which
$100.4 million
was raised during
2015
. We earned
$1.3 million
in Dealer manager fees during the
six months ended
June 30, 2015
related to CPA
®
:18 – Global’s initial offering, which closed on April 2, 2015.
|
•
|
CWI 2 began to admit new stockholders on May 15, 2015 (
Note 3
). Through
June 30, 2015
, CWI 2 had raised approximately
$17.0 million
through its initial public offering. We earned $
0.3 million
in Dealer manager fees during the
six months ended
June 30, 2015
related to CWI 2’s offering.
|
•
|
In September 2014, we filed two registration statements on Form N-2, with the SEC regarding the organization of two feeder funds that are affiliated with CCIF. As amended, the registration statements enable the newly organized feeder funds to sell common shares up to $1.0 billion and to invest that equity capital into CCIF. The advisor to CCIF is wholly owned by us. The registration statements for each of the feeder funds were declared effective by the SEC in July 2015.
|
•
|
Total lease revenue and total property level contribution increased by
$15.8 million
and
$16.5 million
, respectively, for the
six months ended June 30,
2015
as compared to the same period in
2014
, due to properties acquired in the CPA
®
:16 Merger on January 31, 2014.
|
•
|
Total lease revenue and total property level contribution increased by
$23.0 million
and
$12.6 million
, respectively, for the three months ended
June 30, 2015
, and by
$45.3 million
and
$25.5 million
, respectively, for the
six months ended June 30,
2015
, as compared to the same periods in
2014
, due to properties acquired in 2015 and 2014.
|
•
|
Interest expense increased by
$7.6 million
and
$18.0 million
for
three and six months ended June 30,
2015
, respectively, as compared to the same periods in
2014
due to the issuances of the our 2.0% Senior Euro Notes and 4.0% Senior Notes issued in January 2015 and 4.6% Senior Notes in March 2014 (
Note 12
).
|
•
|
We recognized an aggregate gain on change in control of interests of $105.9 million and incurred costs in connection with the CPA
®
:16 Merger of $30.4 million during the
six months ended June 30,
2014
.
|
•
|
We issued 4,600,000 shares in a public offering in September 2014.
|
|
W. P. Carey 6/30/2015 10-Q
–
45
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Real estate revenues (excluding reimbursable tenant costs)
|
$
|
174,122
|
|
|
$
|
171,492
|
|
|
$
|
344,608
|
|
|
$
|
300,739
|
|
Investment management revenues (excluding reimbursable costs from affiliates)
|
50,188
|
|
|
34,248
|
|
|
84,544
|
|
|
68,453
|
|
||||
Total revenues (excluding reimbursable costs)
|
224,310
|
|
|
205,740
|
|
|
429,152
|
|
|
369,192
|
|
||||
Net income attributable to W. P. Carey
|
63,348
|
|
|
64,739
|
|
|
99,464
|
|
|
180,217
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash distributions paid
|
101,055
|
|
|
90,153
|
|
|
200,915
|
|
|
158,312
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
|
|
|
216,052
|
|
|
168,637
|
|
||||||
Net cash (used in) provided by investing activities
|
|
|
|
|
(522,949
|
)
|
|
131,620
|
|
||||||
Net cash provided by (used in) financing activities
|
|
|
|
|
362,708
|
|
|
(202,904
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Supplemental financial measure:
|
|
|
|
|
|
|
|
||||||||
Adjusted funds from operations attributable to W. P. Carey
(a)
|
139,036
|
|
|
122,246
|
|
|
269,003
|
|
|
240,494
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average shares outstanding
|
106,281,983
|
|
|
100,995,225
|
|
|
106,355,402
|
|
|
95,857,916
|
|
(a)
|
We consider the performance metrics listed above, including Adjusted funds from operations, previously referred to as Funds from operations – as adjusted, a supplemental measure that is not defined by GAAP, referred to as a non-GAAP measure, to be important measures in the evaluation of our results of operations and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objective of funding distributions to stockholders. See
Supplemental Financial Measures
below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.
|
|
W. P. Carey 6/30/2015 10-Q
–
46
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Number of net-leased properties
|
852
|
|
|
783
|
|
||
Number of operating properties
(a)
|
4
|
|
|
4
|
|
||
Number of tenants (net-leased properties)
|
217
|
|
|
219
|
|
||
Total square footage (net-leased properties, in thousands)
|
89,306
|
|
|
87,300
|
|
||
Occupancy (net-leased properties)
|
98.6
|
%
|
|
98.6
|
%
|
||
Weighted-average lease term (net-leased properties, in years)
|
9.1
|
|
|
9.1
|
|
||
Number of countries
|
19
|
|
|
18
|
|
||
Total assets (consolidated basis, in thousands)
|
$
|
8,967,604
|
|
|
$
|
8,648,479
|
|
Net investments in real estate (consolidated basis, in thousands)
|
5,840,987
|
|
|
5,656,555
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Financing obtained (in millions, pro rata amount equals consolidated amount)
(b)
|
$
|
1,541.7
|
|
|
$
|
1,750.0
|
|
Acquisition volume (in millions, pro rata amount equals consolidated amount)
(c)
|
445.6
|
|
|
89.4
|
|
||
Average U.S. dollar/euro exchange rate
(d)
|
1.1162
|
|
|
1.3712
|
|
||
Change in the U.S. CPI
(e)
|
1.6
|
%
|
|
2.3
|
%
|
||
Change in the German CPI
(e)
|
0.3
|
%
|
|
0.2
|
%
|
||
Change in the French CPI
(e)
|
0.6
|
%
|
|
0.4
|
%
|
||
Change in the Finnish CPI
(e)
|
(0.2
|
)%
|
|
0.4
|
%
|
||
Change in the Spanish CPI
(e)
|
0.9
|
%
|
|
(1.2
|
)%
|
(a)
|
Operating properties include two self-storage properties with an average occupancy of
93.8%
for the
six months ended
June 30, 2015
and also include two hotel properties acquired from CPA
®
:16 – Global in the CPA
®
:16 Merger with an average occupancy of
80.8%
for the
six months ended
June 30, 2015
.
|
(b)
|
The amount for the
six months ended
June 30, 2015
represents the exercise of the accordion feature under our Senior Unsecured Credit Facility in January 2015, which increased our borrowing capacity under the Revolver by $500.0 million, and the issuances of the
€500.0 million
2.0% Senior Euro Notes and $450.0 million 4.0% Senior Notes in January 2015 (
Note 12
).
|
(c)
|
Includes acquisition-related costs, which were expensed in the consolidated financial statements.
|
(d)
|
The average conversion rate for the U.S. dollar in relation to the euro decreased during the
six months ended
June 30, 2015
as compared to the same period in
2014
, resulting in a negative impact on earnings in
2015
from our euro-denominated investments.
|
(e)
|
Many of our lease agreements include contractual increases indexed to changes in the U.S. Consumer Price Index, or CPI, or similar indices in the jurisdictions in which the properties are located.
|
|
W. P. Carey 6/30/2015 10-Q
–
47
|
Tenant/Lease Guarantor
|
|
ABR
|
|
Percent
|
|||
Hellweg Die Profi-Baumärkte GmbH & Co. KG
(a)
|
|
$
|
33,932
|
|
|
5.0
|
%
|
U-Haul Moving Partners Inc. and Mercury Partners, LP
|
|
31,853
|
|
|
4.7
|
%
|
|
Carrefour France SAS
(a)
|
|
27,686
|
|
|
4.1
|
%
|
|
State of Andalucia
(a)
|
|
26,409
|
|
|
3.9
|
%
|
|
Pendragon Plc
(a)
|
|
25,571
|
|
|
3.7
|
%
|
|
Marcourt Investments Inc. (Marriott Corporation)
|
|
16,100
|
|
|
2.4
|
%
|
|
OBI Group
(a)
|
|
15,229
|
|
|
2.2
|
%
|
|
True Value Company
|
|
15,071
|
|
|
2.2
|
%
|
|
UTI Holdings, Inc.
|
|
14,636
|
|
|
2.1
|
%
|
|
Advanced Micro Devices, Inc.
|
|
12,769
|
|
|
1.9
|
%
|
|
Total
|
|
$
|
219,256
|
|
|
32.2
|
%
|
(a)
|
ABR amounts are subject to fluctuations in foreign currency exchange rates.
|
|
W. P. Carey 6/30/2015 10-Q
–
48
|
Region
|
|
ABR
|
|
Percent
|
|
Square
Footage
|
|
Percent
|
|||||
United States
|
|
|
|
|
|
|
|
|
|||||
East
|
|
|
|
|
|
|
|
|
|||||
New Jersey
|
|
$
|
25,229
|
|
|
3.7
|
%
|
|
1,694
|
|
|
1.9
|
%
|
North Carolina
|
|
18,768
|
|
|
2.8
|
%
|
|
4,435
|
|
|
5.0
|
%
|
|
Pennsylvania
|
|
18,276
|
|
|
2.7
|
%
|
|
2,526
|
|
|
2.8
|
%
|
|
New York
|
|
17,741
|
|
|
2.6
|
%
|
|
1,178
|
|
|
1.3
|
%
|
|
Massachusetts
|
|
14,481
|
|
|
2.1
|
%
|
|
1,390
|
|
|
1.6
|
%
|
|
Virginia
|
|
7,783
|
|
|
1.1
|
%
|
|
1,093
|
|
|
1.2
|
%
|
|
Other
(a)
|
|
22,550
|
|
|
3.3
|
%
|
|
4,702
|
|
|
5.3
|
%
|
|
Total East
|
|
124,828
|
|
|
18.3
|
%
|
|
17,018
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
West
|
|
|
|
|
|
|
|
|
|||||
California
|
|
55,361
|
|
|
8.1
|
%
|
|
3,518
|
|
|
3.9
|
%
|
|
Arizona
|
|
25,848
|
|
|
3.8
|
%
|
|
2,934
|
|
|
3.3
|
%
|
|
Colorado
|
|
8,502
|
|
|
1.3
|
%
|
|
1,340
|
|
|
1.5
|
%
|
|
Utah
|
|
7,198
|
|
|
1.1
|
%
|
|
960
|
|
|
1.1
|
%
|
|
Other
(a)
|
|
20,092
|
|
|
3.0
|
%
|
|
2,297
|
|
|
2.6
|
%
|
|
Total West
|
|
117,001
|
|
|
17.3
|
%
|
|
11,049
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
South
|
|
|
|
|
|
|
|
|
|||||
Texas
|
|
46,682
|
|
|
6.9
|
%
|
|
6,740
|
|
|
7.5
|
%
|
|
Georgia
|
|
26,637
|
|
|
3.9
|
%
|
|
3,498
|
|
|
3.9
|
%
|
|
Florida
|
|
17,844
|
|
|
2.6
|
%
|
|
1,855
|
|
|
2.1
|
%
|
|
Tennessee
|
|
13,933
|
|
|
2.0
|
%
|
|
1,804
|
|
|
2.0
|
%
|
|
Other
(a)
|
|
7,525
|
|
|
1.1
|
%
|
|
1,767
|
|
|
2.0
|
%
|
|
Total South
|
|
112,621
|
|
|
16.5
|
%
|
|
15,664
|
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Midwest
|
|
|
|
|
|
|
|
|
|||||
Illinois
|
|
26,002
|
|
|
3.8
|
%
|
|
3,741
|
|
|
4.2
|
%
|
|
Michigan
|
|
11,594
|
|
|
1.7
|
%
|
|
1,380
|
|
|
1.5
|
%
|
|
Indiana
|
|
9,140
|
|
|
1.3
|
%
|
|
1,418
|
|
|
1.6
|
%
|
|
Ohio
|
|
7,209
|
|
|
1.1
|
%
|
|
1,647
|
|
|
1.8
|
%
|
|
Other
(a)
|
|
27,580
|
|
|
4.1
|
%
|
|
4,777
|
|
|
5.3
|
%
|
|
Total Midwest
|
|
81,525
|
|
|
12.0
|
%
|
|
12,963
|
|
|
14.4
|
%
|
|
United States Total
|
|
435,975
|
|
|
64.1
|
%
|
|
56,694
|
|
|
63.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
International
|
|
|
|
|
|
|
|
|
|||||
Germany
|
|
55,459
|
|
|
8.2
|
%
|
|
6,819
|
|
|
7.6
|
%
|
|
France
|
|
43,356
|
|
|
6.4
|
%
|
|
8,166
|
|
|
9.2
|
%
|
|
United Kingdom
|
|
38,668
|
|
|
5.7
|
%
|
|
2,464
|
|
|
2.8
|
%
|
|
Spain
|
|
27,955
|
|
|
4.1
|
%
|
|
2,927
|
|
|
3.3
|
%
|
|
Finland
|
|
19,836
|
|
|
2.9
|
%
|
|
1,979
|
|
|
2.2
|
%
|
|
Poland
|
|
17,121
|
|
|
2.5
|
%
|
|
2,189
|
|
|
2.5
|
%
|
|
Australia
|
|
10,280
|
|
|
1.5
|
%
|
|
3,160
|
|
|
3.5
|
%
|
|
The Netherlands
|
|
9,522
|
|
|
1.4
|
%
|
|
1,676
|
|
|
1.9
|
%
|
|
Other
(b)
|
|
21,969
|
|
|
3.2
|
%
|
|
3,232
|
|
|
3.6
|
%
|
|
International Total
|
|
244,166
|
|
|
35.9
|
%
|
|
32,612
|
|
|
36.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
$
|
680,141
|
|
|
100.0
|
%
|
|
89,306
|
|
|
100.0
|
%
|
|
W. P. Carey 6/30/2015 10-Q
–
49
|
Property Type
|
|
ABR
|
|
Percent
|
|
Square
Footage |
|
Percent
|
|||||
Office
|
|
$
|
198,474
|
|
|
29.1
|
%
|
|
13,421
|
|
|
15.0
|
%
|
Industrial
|
|
171,253
|
|
|
25.2
|
%
|
|
34,420
|
|
|
38.5
|
%
|
|
Warehouse
|
|
121,868
|
|
|
17.9
|
%
|
|
25,254
|
|
|
28.3
|
%
|
|
Retail
|
|
105,839
|
|
|
15.6
|
%
|
|
9,310
|
|
|
10.4
|
%
|
|
Self Storage
|
|
31,853
|
|
|
4.7
|
%
|
|
3,535
|
|
|
4.0
|
%
|
|
Other
(c)
|
|
50,854
|
|
|
7.5
|
%
|
|
3,366
|
|
|
3.8
|
%
|
|
Total
|
|
$
|
680,141
|
|
|
100.0
|
%
|
|
89,306
|
|
|
100.0
|
%
|
(a)
|
Other properties in the East include assets in Connecticut, South Carolina, Kentucky, Maryland, New Hampshire, and West Virginia. Other properties in the West include assets in Washington, Nevada, New Mexico, Oregon, Wyoming, and Alaska. Other properties in the South include assets in Alabama, Louisiana, Arkansas, Mississippi, and Oklahoma. Other properties in the Midwest include assets in Missouri, Minnesota, Kansas, Wisconsin, Nebraska, and Iowa.
|
(b)
|
Includes assets in Norway, Hungary, Belgium, Sweden, Austria, Canada, Mexico, Thailand, Malaysia, and Japan.
|
(c)
|
Includes ABR from tenants with the following property types: learning center, sports facility, theater, and residential.
|
|
W. P. Carey 6/30/2015 10-Q
–
50
|
Industry Type
|
|
ABR
|
|
Percent
|
|
Square
Footage |
|
Percent
|
|||||
Retail Stores
|
|
$
|
137,557
|
|
|
20.2
|
%
|
|
20,385
|
|
|
22.8
|
%
|
Consumer Services
|
|
57,998
|
|
|
8.5
|
%
|
|
4,953
|
|
|
5.5
|
%
|
|
High Tech Industries
|
|
45,697
|
|
|
6.7
|
%
|
|
3,263
|
|
|
3.7
|
%
|
|
Sovereign and Public Finance
|
|
39,656
|
|
|
5.8
|
%
|
|
3,364
|
|
|
3.8
|
%
|
|
Automotive
|
|
36,678
|
|
|
5.4
|
%
|
|
6,414
|
|
|
7.2
|
%
|
|
Beverage, Food, and Tobacco
|
|
34,055
|
|
|
5.0
|
%
|
|
7,370
|
|
|
8.2
|
%
|
|
Transportation: Cargo
|
|
31,699
|
|
|
4.7
|
%
|
|
4,559
|
|
|
5.1
|
%
|
|
Media: Advertising, Printing, and Publishing
|
|
31,446
|
|
|
4.6
|
%
|
|
2,327
|
|
|
2.6
|
%
|
|
Hotel, Gaming, and Leisure
|
|
30,498
|
|
|
4.5
|
%
|
|
1,806
|
|
|
2.0
|
%
|
|
Healthcare and Pharmaceuticals
|
|
26,952
|
|
|
4.0
|
%
|
|
1,945
|
|
|
2.2
|
%
|
|
Containers, Packaging, and Glass
|
|
26,549
|
|
|
3.9
|
%
|
|
5,325
|
|
|
6.0
|
%
|
|
Capital Equipment
|
|
25,765
|
|
|
3.8
|
%
|
|
4,876
|
|
|
5.5
|
%
|
|
Construction and Building
|
|
20,617
|
|
|
3.0
|
%
|
|
4,276
|
|
|
4.8
|
%
|
|
Business Services
|
|
17,789
|
|
|
2.6
|
%
|
|
1,849
|
|
|
2.1
|
%
|
|
Telecommunications
|
|
14,809
|
|
|
2.2
|
%
|
|
1,188
|
|
|
1.3
|
%
|
|
Wholesale
|
|
14,706
|
|
|
2.2
|
%
|
|
2,806
|
|
|
3.1
|
%
|
|
Aerospace and Defense
|
|
11,126
|
|
|
1.6
|
%
|
|
1,221
|
|
|
1.4
|
%
|
|
Consumer Goods: Durable
|
|
10,990
|
|
|
1.6
|
%
|
|
2,485
|
|
|
2.8
|
%
|
|
Grocery
|
|
10,499
|
|
|
1.6
|
%
|
|
1,218
|
|
|
1.4
|
%
|
|
Metals and Mining
|
|
9,881
|
|
|
1.5
|
%
|
|
1,413
|
|
|
1.6
|
%
|
|
Chemicals, Plastics, and Rubber
|
|
9,756
|
|
|
1.4
|
%
|
|
1,088
|
|
|
1.2
|
%
|
|
Insurance
|
|
9,217
|
|
|
1.4
|
%
|
|
473
|
|
|
0.5
|
%
|
|
Oil and Gas
|
|
8,380
|
|
|
1.2
|
%
|
|
368
|
|
|
0.4
|
%
|
|
Consumer Goods: Non-Durable
|
|
7,738
|
|
|
1.1
|
%
|
|
1,883
|
|
|
2.1
|
%
|
|
Other
(a)
|
|
10,083
|
|
|
1.5
|
%
|
|
2,451
|
|
|
2.7
|
%
|
|
Total
|
|
$
|
680,141
|
|
|
100.0
|
%
|
|
89,306
|
|
|
100.0
|
%
|
(a)
|
Includes ABR from tenants in the following industries: banking; media: broadcasting and subscription; environmental industries; finance; transportation: consumer; and forest products and paper.
|
|
W. P. Carey 6/30/2015 10-Q
–
51
|
Year of Lease Expiration
(a)
|
|
Number of Leases Expiring
|
|
ABR
|
|
Percent
|
|
Square
Footage |
|
Percent
|
||||||
Remaining 2015
(b)
|
|
9
|
|
|
$
|
9,981
|
|
|
1.5
|
%
|
|
1,142
|
|
|
1.3
|
%
|
2016
|
|
16
|
|
|
20,099
|
|
|
3.0
|
%
|
|
2,513
|
|
|
2.8
|
%
|
|
2017
|
|
17
|
|
|
16,147
|
|
|
2.4
|
%
|
|
2,679
|
|
|
3.0
|
%
|
|
2018
|
|
29
|
|
|
56,638
|
|
|
8.3
|
%
|
|
8,106
|
|
|
9.1
|
%
|
|
2019
|
|
28
|
|
|
45,878
|
|
|
6.7
|
%
|
|
4,685
|
|
|
5.2
|
%
|
|
2020
|
|
24
|
|
|
35,415
|
|
|
5.2
|
%
|
|
3,534
|
|
|
4.0
|
%
|
|
2021
|
|
76
|
|
|
40,038
|
|
|
5.9
|
%
|
|
6,612
|
|
|
7.4
|
%
|
|
2022
|
|
37
|
|
|
61,906
|
|
|
9.1
|
%
|
|
8,551
|
|
|
9.6
|
%
|
|
2023
|
|
14
|
|
|
45,811
|
|
|
6.7
|
%
|
|
5,550
|
|
|
6.2
|
%
|
|
2024
|
|
44
|
|
|
92,895
|
|
|
13.7
|
%
|
|
12,475
|
|
|
14.0
|
%
|
|
2025
|
|
41
|
|
|
29,175
|
|
|
4.3
|
%
|
|
3,036
|
|
|
3.4
|
%
|
|
2026
|
|
21
|
|
|
17,363
|
|
|
2.6
|
%
|
|
2,525
|
|
|
2.8
|
%
|
|
2027
|
|
16
|
|
|
34,161
|
|
|
5.0
|
%
|
|
5,341
|
|
|
6.0
|
%
|
|
2028
|
|
10
|
|
|
23,407
|
|
|
3.4
|
%
|
|
2,987
|
|
|
3.3
|
%
|
|
Thereafter
|
|
88
|
|
|
151,227
|
|
|
22.2
|
%
|
|
18,342
|
|
|
20.5
|
%
|
|
Vacant
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
1,228
|
|
|
1.4
|
%
|
|
Total
|
|
470
|
|
|
$
|
680,141
|
|
|
100.0
|
%
|
|
89,306
|
|
|
100.0
|
%
|
(a)
|
Assumes tenant does not exercise renewal option.
|
(b)
|
Month-to-month leases are included in
2015
ABR.
|
|
W. P. Carey 6/30/2015 10-Q
–
52
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
$
|
162,574
|
|
|
$
|
148,253
|
|
|
$
|
14,321
|
|
|
$
|
322,739
|
|
|
$
|
271,320
|
|
|
$
|
51,419
|
|
Operating property revenues
|
8,426
|
|
|
8,251
|
|
|
175
|
|
|
15,538
|
|
|
13,244
|
|
|
2,294
|
|
||||||
Reimbursable tenant costs
|
6,130
|
|
|
5,749
|
|
|
381
|
|
|
12,069
|
|
|
11,763
|
|
|
306
|
|
||||||
Lease termination income and other
|
3,122
|
|
|
14,988
|
|
|
(11,866
|
)
|
|
6,331
|
|
|
16,175
|
|
|
(9,844
|
)
|
||||||
|
180,252
|
|
|
177,241
|
|
|
3,011
|
|
|
356,677
|
|
|
312,502
|
|
|
44,175
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net-leased properties
|
63,088
|
|
|
61,579
|
|
|
1,509
|
|
|
126,407
|
|
|
112,106
|
|
|
14,301
|
|
||||||
Operating properties
|
1,062
|
|
|
913
|
|
|
149
|
|
|
2,111
|
|
|
1,741
|
|
|
370
|
|
||||||
|
64,150
|
|
|
62,492
|
|
|
1,658
|
|
|
128,518
|
|
|
113,847
|
|
|
14,671
|
|
||||||
Property expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reimbursable tenant costs
|
6,130
|
|
|
5,749
|
|
|
381
|
|
|
12,069
|
|
|
11,763
|
|
|
306
|
|
||||||
Operating property expenses
|
6,168
|
|
|
5,821
|
|
|
347
|
|
|
11,539
|
|
|
9,506
|
|
|
2,033
|
|
||||||
Net-leased properties
|
2,755
|
|
|
4,703
|
|
|
(1,948
|
)
|
|
5,229
|
|
|
8,032
|
|
|
(2,803
|
)
|
||||||
Property management fees
|
2,097
|
|
|
687
|
|
|
1,410
|
|
|
3,616
|
|
|
2,092
|
|
|
1,524
|
|
||||||
|
17,150
|
|
|
16,960
|
|
|
190
|
|
|
32,453
|
|
|
31,393
|
|
|
1,060
|
|
||||||
General and administrative
|
11,772
|
|
|
7,758
|
|
|
4,014
|
|
|
26,884
|
|
|
16,737
|
|
|
10,147
|
|
||||||
Stock-based compensation expense
|
2,021
|
|
|
2,702
|
|
|
(681
|
)
|
|
4,476
|
|
|
5,550
|
|
|
(1,074
|
)
|
||||||
Merger and property acquisition expenses
|
1,897
|
|
|
1,137
|
|
|
760
|
|
|
7,573
|
|
|
30,751
|
|
|
(23,178
|
)
|
||||||
Impairment charges
|
591
|
|
|
2,066
|
|
|
(1,475
|
)
|
|
3,274
|
|
|
2,066
|
|
|
1,208
|
|
||||||
|
97,581
|
|
|
93,115
|
|
|
4,466
|
|
|
203,178
|
|
|
200,344
|
|
|
2,834
|
|
||||||
Segment Net Operating Income
|
82,671
|
|
|
84,126
|
|
|
(1,455
|
)
|
|
153,499
|
|
|
112,158
|
|
|
41,341
|
|
||||||
Other Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
(47,693
|
)
|
|
(47,733
|
)
|
|
40
|
|
|
(95,642
|
)
|
|
(86,808
|
)
|
|
(8,834
|
)
|
||||||
Other income and (expenses)
|
7,442
|
|
|
(1,539
|
)
|
|
8,981
|
|
|
2,956
|
|
|
(6,852
|
)
|
|
9,808
|
|
||||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
14,272
|
|
|
9,452
|
|
|
4,820
|
|
|
25,995
|
|
|
23,714
|
|
|
2,281
|
|
||||||
Gain on change in control of interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,947
|
|
|
(105,947
|
)
|
||||||
|
(25,979
|
)
|
|
(39,820
|
)
|
|
13,841
|
|
|
(66,691
|
)
|
|
36,001
|
|
|
(102,692
|
)
|
||||||
Income from continuing operations before income taxes
|
56,692
|
|
|
44,306
|
|
|
12,386
|
|
|
86,808
|
|
|
148,159
|
|
|
(61,351
|
)
|
||||||
(Provision for) benefit from income taxes
|
(3,845
|
)
|
|
(3,110
|
)
|
|
(735
|
)
|
|
(2,571
|
)
|
|
928
|
|
|
(3,499
|
)
|
||||||
Income from continuing operations before gain on sale of real estate
|
52,847
|
|
|
41,196
|
|
|
11,651
|
|
|
84,237
|
|
|
149,087
|
|
|
(64,850
|
)
|
||||||
Income from discontinued operations, net of tax
|
—
|
|
|
26,421
|
|
|
(26,421
|
)
|
|
—
|
|
|
32,828
|
|
|
(32,828
|
)
|
||||||
Gain (loss) on sale of real estate, net of tax
|
16
|
|
|
(3,823
|
)
|
|
3,839
|
|
|
1,201
|
|
|
(3,743
|
)
|
|
4,944
|
|
||||||
Net Income from Real Estate Ownership
|
52,863
|
|
|
63,794
|
|
|
(10,931
|
)
|
|
85,438
|
|
|
178,172
|
|
|
(92,734
|
)
|
||||||
Net income attributable to noncontrolling interests
|
(1,591
|
)
|
|
(2,325
|
)
|
|
734
|
|
|
(4,057
|
)
|
|
(3,713
|
)
|
|
(344
|
)
|
||||||
Net Income from Real Estate Ownership Attributable to W. P. Carey
|
$
|
51,272
|
|
|
$
|
61,469
|
|
|
$
|
(10,197
|
)
|
|
$
|
81,381
|
|
|
$
|
174,459
|
|
|
$
|
(93,078
|
)
|
|
W. P. Carey 6/30/2015 10-Q
–
53
|
|
W. P. Carey 6/30/2015 10-Q
–
54
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Existing Net-Leased Properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
$
|
72,515
|
|
|
$
|
75,240
|
|
|
$
|
(2,725
|
)
|
|
$
|
144,639
|
|
|
$
|
151,187
|
|
|
$
|
(6,548
|
)
|
Property expenses
|
(139
|
)
|
|
(1,489
|
)
|
|
1,350
|
|
|
(697
|
)
|
|
(1,870
|
)
|
|
1,173
|
|
||||||
Depreciation and amortization
|
(28,218
|
)
|
|
(30,388
|
)
|
|
2,170
|
|
|
(56,839
|
)
|
|
(60,208
|
)
|
|
3,369
|
|
||||||
Property level contribution
|
44,158
|
|
|
43,363
|
|
|
795
|
|
|
87,103
|
|
|
89,109
|
|
|
(2,006
|
)
|
||||||
Net-Leased Properties Acquired in the CPA
®
:16 Merger
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
65,187
|
|
|
69,584
|
|
|
(4,397
|
)
|
|
130,492
|
|
|
114,706
|
|
|
15,786
|
|
||||||
Property expenses
|
(1,040
|
)
|
|
(1,666
|
)
|
|
626
|
|
|
(2,101
|
)
|
|
(3,708
|
)
|
|
1,607
|
|
||||||
Depreciation and amortization
|
(24,872
|
)
|
|
(29,774
|
)
|
|
4,902
|
|
|
(50,661
|
)
|
|
(49,778
|
)
|
|
(883
|
)
|
||||||
Property level contribution
|
39,275
|
|
|
38,144
|
|
|
1,131
|
|
|
77,730
|
|
|
61,220
|
|
|
16,510
|
|
||||||
Recently Acquired Net-Leased Properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
24,740
|
|
|
1,746
|
|
|
22,994
|
|
|
47,052
|
|
|
1,745
|
|
|
45,307
|
|
||||||
Property expenses
|
(1,526
|
)
|
|
(397
|
)
|
|
(1,129
|
)
|
|
(2,293
|
)
|
|
(477
|
)
|
|
(1,816
|
)
|
||||||
Depreciation and amortization
|
(9,935
|
)
|
|
(682
|
)
|
|
(9,253
|
)
|
|
(18,703
|
)
|
|
(682
|
)
|
|
(18,021
|
)
|
||||||
Property level contribution
|
13,279
|
|
|
667
|
|
|
12,612
|
|
|
26,056
|
|
|
586
|
|
|
25,470
|
|
||||||
Properties Sold
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
132
|
|
|
1,683
|
|
|
(1,551
|
)
|
|
556
|
|
|
3,682
|
|
|
(3,126
|
)
|
||||||
Property expenses
|
(50
|
)
|
|
(1,151
|
)
|
|
1,101
|
|
|
(138
|
)
|
|
(1,977
|
)
|
|
1,839
|
|
||||||
Depreciation and amortization
|
(63
|
)
|
|
(735
|
)
|
|
672
|
|
|
(204
|
)
|
|
(1,438
|
)
|
|
1,234
|
|
||||||
Property level contribution
|
19
|
|
|
(203
|
)
|
|
222
|
|
|
214
|
|
|
267
|
|
|
(53
|
)
|
||||||
Operating Properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
8,426
|
|
|
8,251
|
|
|
175
|
|
|
15,538
|
|
|
13,244
|
|
|
2,294
|
|
||||||
Property expenses
|
(6,168
|
)
|
|
(5,821
|
)
|
|
(347
|
)
|
|
(11,539
|
)
|
|
(9,506
|
)
|
|
(2,033
|
)
|
||||||
Depreciation and amortization
|
(1,062
|
)
|
|
(913
|
)
|
|
(149
|
)
|
|
(2,111
|
)
|
|
(1,741
|
)
|
|
(370
|
)
|
||||||
Property level contribution
|
1,196
|
|
|
1,517
|
|
|
(321
|
)
|
|
1,888
|
|
|
1,997
|
|
|
(109
|
)
|
||||||
Property Level Contribution
|
97,927
|
|
|
83,488
|
|
|
14,439
|
|
|
192,991
|
|
|
153,179
|
|
|
39,812
|
|
||||||
Add: Lease termination income and other
|
3,122
|
|
|
14,988
|
|
|
(11,866
|
)
|
|
6,331
|
|
|
16,175
|
|
|
(9,844
|
)
|
||||||
Less other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property management fees
|
(2,097
|
)
|
|
(687
|
)
|
|
(1,410
|
)
|
|
(3,616
|
)
|
|
(2,092
|
)
|
|
(1,524
|
)
|
||||||
General and administrative
|
(11,772
|
)
|
|
(7,758
|
)
|
|
(4,014
|
)
|
|
(26,884
|
)
|
|
(16,737
|
)
|
|
(10,147
|
)
|
||||||
Stock-based compensation expense
|
(2,021
|
)
|
|
(2,702
|
)
|
|
681
|
|
|
(4,476
|
)
|
|
(5,550
|
)
|
|
1,074
|
|
||||||
Merger and property acquisition expenses
|
(1,897
|
)
|
|
(1,137
|
)
|
|
(760
|
)
|
|
(7,573
|
)
|
|
(30,751
|
)
|
|
23,178
|
|
||||||
Impairment charges
|
(591
|
)
|
|
(2,066
|
)
|
|
1,475
|
|
|
(3,274
|
)
|
|
(2,066
|
)
|
|
(1,208
|
)
|
||||||
Segment Net Operating Income
|
$
|
82,671
|
|
|
$
|
84,126
|
|
|
$
|
(1,455
|
)
|
|
$
|
153,499
|
|
|
$
|
112,158
|
|
|
$
|
41,341
|
|
|
W. P. Carey 6/30/2015 10-Q
–
55
|
|
W. P. Carey 6/30/2015 10-Q
–
56
|
|
W. P. Carey 6/30/2015 10-Q
–
57
|
|
W. P. Carey 6/30/2015 10-Q
–
58
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Equity in earnings of equity method investments in the Managed Programs:
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of equity method investments in the Managed Programs
(a)
|
$
|
496
|
|
|
$
|
651
|
|
|
$
|
619
|
|
|
$
|
1,121
|
|
Other-than-temporary impairment charges on the Special Member Interest in CPA
®
:16 – Global’s operating partnership, net of related deferred revenue earned
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||
Distributions of Available Cash
(c)
|
|
|
|
|
|
|
|
||||||||
CPA
®
:16 – Global
|
—
|
|
|
—
|
|
|
—
|
|
|
4,751
|
|
||||
CPA
®
:17 – Global
|
5,789
|
|
|
4,590
|
|
|
11,854
|
|
|
9,269
|
|
||||
CPA
®
:18 – Global
|
1,422
|
|
|
537
|
|
|
2,316
|
|
|
606
|
|
||||
CWI
|
2,045
|
|
|
108
|
|
|
3,892
|
|
|
1,055
|
|
||||
Equity in earnings of equity method investments from the Managed Programs
|
9,752
|
|
|
5,886
|
|
|
18,681
|
|
|
16,774
|
|
||||
Equity in earnings of other equity method investments in real estate:
|
|
|
|
|
|
|
|
||||||||
Equity investments acquired in the CPA
®
:16 Merger
(d)
|
2,207
|
|
|
2,848
|
|
|
4,458
|
|
|
5,052
|
|
||||
Recently acquired equity investment
(e)
|
319
|
|
|
380
|
|
|
638
|
|
|
380
|
|
||||
Existing equity investments
(f)
|
1,994
|
|
|
256
|
|
|
2,218
|
|
|
734
|
|
||||
Equity investments sold
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
||||
Equity investments consolidated after the CPA
®
:16 Merger
(g)
|
—
|
|
|
—
|
|
|
—
|
|
|
692
|
|
||||
Total equity in earnings of other equity method investments in real estate
|
4,520
|
|
|
3,566
|
|
|
7,314
|
|
|
6,940
|
|
||||
Total equity in earnings of equity method investments in the Managed Programs and real estate
|
$
|
14,272
|
|
|
$
|
9,452
|
|
|
$
|
25,995
|
|
|
$
|
23,714
|
|
(a)
|
Amount for the
six months ended June 30, 2014
included $0.5 million of equity income from CPA
®
:16 – Global.
|
(b)
|
In May 2011, we acquired the Special Member Interest in CPA
®
:16 – Global’s operating partnership, which we recorded as an equity investment at fair value with an equal amount recorded as deferred revenue (
Note 5
). On January 31, 2014, we acquired all the remaining interests in CPA
®
:16 – Global and now consolidate the operating partnership.
|
(c)
|
We are entitled to receive distributions of our share of earnings up to 10% of the Available Cash from the operating partnerships of each of the Managed REITs, as defined in their respective operating partnership agreements. Distributions of Available Cash received and earned from the Managed REITs increased primarily as a result of new investments that they entered into during 2015 and 2014.
|
(d)
|
We acquired our interests or additional interests in these investments in the CPA
®
:16 Merger.
|
(e)
|
During the year ended
December 31, 2014
, we received a preferred equity position in Beach House JV, LLC, as part of a sale of a property. The preferred equity, redeemable on March 13, 2019, provides us with a preferred rate of return of 8.5%. The rights under these preferred units allow us to have significant influence over the entity. Accordingly, we account for this investment using the equity method of accounting.
|
(f)
|
Represents equity investments we held prior to January 1, 2014. Equity income on a jointly-owned German investment increased by
$2.1 million
during both the
three and six months ended June 30,
2015
, representing our share of the bankruptcy proceeds received (
Note 8
).
|
(g)
|
We acquired additional interests in these investments from CPA
®
:16 – Global in the CPA
®
:16 Merger. Subsequent to the CPA
®
:16 Merger, we consolidate these majority-owned or wholly-owned investments.
|
|
W. P. Carey 6/30/2015 10-Q
–
59
|
|
W. P. Carey 6/30/2015 10-Q
–
60
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Total properties — Managed REITs
|
571
|
|
|
519
|
|
||
Assets under management — Managed Programs
(a)
|
$
|
10,383.7
|
|
|
$
|
9,231.8
|
|
Cumulative funds raised — CPA
®
:18 – Global offering
(b) (c)
|
1,243.5
|
|
|
1,143.1
|
|
||
Cumulative funds raised — CWI offerings
(b) (d)
|
1,153.2
|
|
|
1,153.2
|
|
||
Cumulative funds raised — CWI 2 offering
(b) (e)
|
17.0
|
|
|
—
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Financings structured — Managed REITs
|
$
|
759.6
|
|
|
$
|
594.9
|
|
Investments structured — Managed REITs
(f)
|
1,691.2
|
|
|
974.3
|
|
||
Funds raised — CPA
®
:18 – Global offering
(b) (c)
|
100.4
|
|
|
797.7
|
|
||
Funds raised — CWI offerings
(b) (d)
|
—
|
|
|
111.3
|
|
||
Funds raised — CWI 2 offerings
(b) (e)
|
17.0
|
|
|
—
|
|
(a)
|
Represents the estimated fair value of the real estate assets owned by the Managed REITs, which was calculated by us as the advisor to the Managed REITs based in part upon third-party appraisals, plus cash and cash equivalents, less distributions payable. Amount as of
June 30, 2015
also included the fair value of the investment assets, plus cash and cash equivalents, owned by CCIF.
|
(b)
|
Excludes reinvested distributions through each entity’s distribution reinvestment plan.
|
(c)
|
Reflects funds raised since the commencement of CPA
®
:18 – Global’s initial public offering in May 2013. CPA
®
:18 – Global closed its initial public offering on April 2, 2015 (
Note 5
).
|
(d)
|
Reflects funds raised in CWI’s initial public offering, which closed on September 15, 2013, and CWI’s follow-on offering, which commenced on December 20, 2013 and closed on December 31, 2014.
|
(e)
|
Reflects funds raised since the commencement of CWI 2’s initial public offering, which began to admit new stockholders on May 15, 2015.
|
(f)
|
Includes acquisition-related costs.
|
|
W. P. Carey 6/30/2015 10-Q
–
61
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Structuring revenue
|
$
|
37,808
|
|
|
$
|
17,254
|
|
|
$
|
20,554
|
|
|
$
|
59,528
|
|
|
$
|
35,005
|
|
|
$
|
24,523
|
|
Asset management revenue
|
12,073
|
|
|
9,045
|
|
|
3,028
|
|
|
23,232
|
|
|
18,822
|
|
|
4,410
|
|
||||||
Reimbursable costs
|
7,639
|
|
|
41,925
|
|
|
(34,286
|
)
|
|
17,246
|
|
|
81,657
|
|
|
(64,411
|
)
|
||||||
Dealer manager fees
|
307
|
|
|
7,949
|
|
|
(7,642
|
)
|
|
1,581
|
|
|
14,626
|
|
|
(13,045
|
)
|
||||||
Disposition and termination revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
||||||
|
57,827
|
|
|
76,173
|
|
|
(18,346
|
)
|
|
101,790
|
|
|
150,110
|
|
|
(48,320
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General and administrative
|
14,604
|
|
|
11,376
|
|
|
3,228
|
|
|
29,260
|
|
|
25,067
|
|
|
4,193
|
|
||||||
Reimbursable costs from affiliates
|
7,639
|
|
|
41,925
|
|
|
(34,286
|
)
|
|
17,246
|
|
|
81,657
|
|
|
(64,411
|
)
|
||||||
Stock-based compensation expense
|
3,068
|
|
|
5,255
|
|
|
(2,187
|
)
|
|
7,622
|
|
|
9,450
|
|
|
(1,828
|
)
|
||||||
Subadvisor fees
|
4,147
|
|
|
2,451
|
|
|
1,696
|
|
|
6,808
|
|
|
2,469
|
|
|
4,339
|
|
||||||
Dealer manager fees and expenses
|
2,327
|
|
|
6,285
|
|
|
(3,958
|
)
|
|
4,699
|
|
|
11,710
|
|
|
(7,011
|
)
|
||||||
Depreciation and amortization
|
1,016
|
|
|
953
|
|
|
63
|
|
|
2,048
|
|
|
2,271
|
|
|
(223
|
)
|
||||||
|
32,801
|
|
|
68,245
|
|
|
(35,444
|
)
|
|
67,683
|
|
|
132,624
|
|
|
(64,941
|
)
|
||||||
Other Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other income and (expenses)
|
199
|
|
|
161
|
|
|
38
|
|
|
379
|
|
|
(167
|
)
|
|
546
|
|
||||||
|
199
|
|
|
161
|
|
|
38
|
|
|
379
|
|
|
(167
|
)
|
|
546
|
|
||||||
Income from continuing operations before income taxes
|
25,225
|
|
|
8,089
|
|
|
17,136
|
|
|
34,486
|
|
|
17,319
|
|
|
17,167
|
|
||||||
Provision for income taxes
|
(11,165
|
)
|
|
(4,911
|
)
|
|
(6,254
|
)
|
|
(14,419
|
)
|
|
(11,202
|
)
|
|
(3,217
|
)
|
||||||
Net Income from Investment Management
|
14,060
|
|
|
3,178
|
|
|
10,882
|
|
|
20,067
|
|
|
6,117
|
|
|
13,950
|
|
||||||
Net income attributable to noncontrolling interests
|
(1,984
|
)
|
|
(19
|
)
|
|
(1,965
|
)
|
|
(1,984
|
)
|
|
(208
|
)
|
|
(1,776
|
)
|
||||||
Net loss (income) attributable to redeemable noncontrolling interest
|
—
|
|
|
111
|
|
|
(111
|
)
|
|
—
|
|
|
(151
|
)
|
|
151
|
|
||||||
Net Income from Investment Management Attributable to W. P. Carey
|
$
|
12,076
|
|
|
$
|
3,270
|
|
|
$
|
8,806
|
|
|
$
|
18,083
|
|
|
$
|
5,758
|
|
|
$
|
12,325
|
|
|
W. P. Carey 6/30/2015 10-Q
–
62
|
|
W. P. Carey 6/30/2015 10-Q
–
63
|
|
W. P. Carey 6/30/2015 10-Q
–
64
|
|
W. P. Carey 6/30/2015 10-Q
–
65
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Carrying Value
|
|
|
|
||||
Fixed rate:
|
|
|
|
||||
Non-recourse mortgages
|
$
|
2,032,889
|
|
|
$
|
2,174,604
|
|
Senior Unsecured Notes
(a)
|
1,501,061
|
|
|
498,345
|
|
||
|
3,533,950
|
|
|
2,672,949
|
|
||
Variable rate:
(a)
|
|
|
|
||||
Revolver
|
350,234
|
|
|
807,518
|
|
||
Term Loan Facility
|
250,000
|
|
|
250,000
|
|
||
Non-recourse debt:
|
|
|
|
||||
Amount subject to interest rate swap and cap
|
299,648
|
|
|
320,220
|
|
||
Non-recourse mortgages
|
100,783
|
|
|
24,299
|
|
||
Amount of fixed rate debt subject to interest rate reset features
|
9,892
|
|
|
13,560
|
|
||
|
1,010,557
|
|
|
1,415,597
|
|
||
|
$
|
4,544,507
|
|
|
$
|
4,088,546
|
|
|
|
|
|
||||
Percent of Total Debt
|
|
|
|
||||
Fixed rate
|
78
|
%
|
|
65
|
%
|
||
Variable rate
|
22
|
%
|
|
35
|
%
|
||
|
100
|
%
|
|
100
|
%
|
||
Weighted-Average Interest Rate at End of Period
|
|
|
|
||||
Fixed rate
|
4.7
|
%
|
|
5.4
|
%
|
||
Variable rate
(b)
|
2.7
|
%
|
|
2.0
|
%
|
(a)
|
As described in
Note 12
, in January 2015, we completed the issuances of the 2.0% Senior Euro Notes and the 4.0% Senior Notes.
|
(b)
|
The impact of our derivative instruments is reflected in the weighted-average interest rates.
|
•
|
Cash and cash equivalents totaling $
233.6 million
. Of this amount,
$79.9 million
, at then-current exchange rates, was held in foreign subsidiaries and we could be subject to restrictions or significant costs should we decide to repatriate these amounts;
|
•
|
Our Revolver, with unused capacity of $
1.1 billion
, excluding amounts reserved for outstanding letters of credit; and
|
•
|
Unleveraged properties that had an aggregate carrying value of $
2.6 billion
at
June 30, 2015
, although there can be no assurance that we would be able to obtain financing for these properties.
|
|
W. P. Carey 6/30/2015 10-Q
–
66
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Outstanding Balance
|
|
Maximum Available
|
|
Outstanding Balance
|
|
Maximum Available
|
||||||||
Revolver
|
$
|
350,234
|
|
|
$
|
1,500,000
|
|
|
$
|
807,518
|
|
|
$
|
1,000,000
|
|
Term Loan Facility
|
250,000
|
|
|
250,000
|
|
|
250,000
|
|
|
250,000
|
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Non-recourse debt — principal
(a)
|
$
|
2,437,621
|
|
|
$
|
344,168
|
|
|
$
|
1,119,875
|
|
|
$
|
227,628
|
|
|
$
|
745,950
|
|
Senior Unsecured Notes — principal
(a) (b)
|
1,509,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,509,450
|
|
|||||
Senior Unsecured Credit Facility — principal
(c)
|
600,234
|
|
|
250,000
|
|
|
350,234
|
|
|
—
|
|
|
—
|
|
|||||
Interest on borrowings
(d)
|
944,041
|
|
|
183,793
|
|
|
276,809
|
|
|
200,249
|
|
|
283,190
|
|
|||||
Operating and other lease commitments
(e)
|
102,067
|
|
|
6,601
|
|
|
13,699
|
|
|
13,726
|
|
|
68,041
|
|
|||||
Build-to-suit commitments
(f)
|
16,663
|
|
|
3,782
|
|
|
9,997
|
|
|
2,884
|
|
|
—
|
|
|||||
Property improvement commitments
|
2,197
|
|
|
2,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
5,612,273
|
|
|
$
|
790,541
|
|
|
$
|
1,770,614
|
|
|
$
|
444,487
|
|
|
$
|
2,606,631
|
|
(a)
|
Excludes the unamortized discount on the Senior Unsecured Notes of
$8.4 million
and the unamortized fair market value adjustment of
$5.6 million
resulting from the assumption of property-level debt in connection with the CPA
®
:15 Merger and CPA
®
:16 Merger (
Note 12
).
|
(b)
|
Our Senior Unsecured Notes are scheduled to mature from 2023 through 2025.
|
(c)
|
Our Term Loan Facility is scheduled to mature on January 31, 2016 and our Revolver is scheduled to mature on January 31, 2018 unless otherwise extended pursuant to their terms.
|
(d)
|
Interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at
June 30, 2015
.
|
(e)
|
Operating and other lease commitments consist primarily of rental obligations under ground leases and the future minimum rents payable on the lease for our principal offices. Pursuant to their respective advisory agreements with us, we are reimbursed by the Managed REITs for their share of overhead costs, which includes a portion of those future minimum rent amounts. Our operating lease commitments are presented net of $
8.4 million
, which the Managed REITs will reimburse us.
|
|
W. P. Carey 6/30/2015 10-Q
–
67
|
(f)
|
Represents a build-to-suit transaction we entered into in December 2013 for the construction of an office building located in Germany, and a tenant expansion allowance of $
12.9 million
we committed to fund in connection with an investment in Australia. Amounts are based on the exchange rates of the euro and the Australian Dollar, as applicable, at
June 30, 2015
.
|
|
W. P. Carey 6/30/2015 10-Q
–
68
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income attributable to W. P. Carey
|
$
|
63,348
|
|
|
$
|
64,739
|
|
|
$
|
99,464
|
|
|
$
|
180,217
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real property
|
63,688
|
|
|
62,354
|
|
|
127,579
|
|
|
113,974
|
|
||||
Impairment charges
|
591
|
|
|
2,066
|
|
|
3,274
|
|
|
2,066
|
|
||||
Gain on sale of real estate, net
|
(16
|
)
|
|
(25,582
|
)
|
|
(1,201
|
)
|
|
(28,758
|
)
|
||||
Proportionate share of adjustments for noncontrolling interests to arrive at FFO
|
(2,640
|
)
|
|
(2,586
|
)
|
|
(5,293
|
)
|
|
(6,078
|
)
|
||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real property
|
1,296
|
|
|
533
|
|
|
2,574
|
|
|
1,798
|
|
||||
Total adjustments
|
62,919
|
|
|
36,785
|
|
|
126,933
|
|
|
83,002
|
|
||||
FFO attributable to W. P. Carey — as defined by NAREIT
|
126,267
|
|
|
101,524
|
|
|
226,397
|
|
|
263,219
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Above- and below-market rent intangible lease amortization, net
|
13,220
|
|
|
17,124
|
|
|
26,970
|
|
|
30,610
|
|
||||
Other amortization and non-cash items
(a)
|
(6,574
|
)
|
|
1,719
|
|
|
115
|
|
|
2,574
|
|
||||
Stock-based compensation
|
5,089
|
|
|
7,957
|
|
|
12,098
|
|
|
15,000
|
|
||||
Straight-line and other rent adjustments
|
(3,070
|
)
|
|
(8,999
|
)
|
|
(6,007
|
)
|
|
(11,668
|
)
|
||||
Merger and property acquisition expenses
(b)
|
1,897
|
|
|
1,139
|
|
|
7,573
|
|
|
44,618
|
|
||||
Amortization of deferred financing costs
|
1,489
|
|
|
999
|
|
|
2,654
|
|
|
2,024
|
|
||||
Tax benefit – deferred and other non-cash charges
|
(1,372
|
)
|
|
(1,246
|
)
|
|
(3,118
|
)
|
|
(12,176
|
)
|
||||
Realized losses (gains) on foreign currency, derivatives, and other
(c)
|
415
|
|
|
159
|
|
|
(139
|
)
|
|
820
|
|
||||
Gain on change in control of interests
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,947
|
)
|
||||
Loss on extinguishment of debt
|
—
|
|
|
721
|
|
|
—
|
|
|
8,713
|
|
||||
Other, net
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
21
|
|
||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at AFFO:
|
|
|
|
|
|
|
|
||||||||
AFFO adjustments to equity earnings from equity investments
|
1,426
|
|
|
935
|
|
|
2,563
|
|
|
3,871
|
|
||||
Deferred tax benefit
|
206
|
|
|
—
|
|
|
208
|
|
|
—
|
|
||||
Other amortization and non-cash items
|
185
|
|
|
62
|
|
|
254
|
|
|
155
|
|
||||
Straight-line rent and other rent adjustments
|
(122
|
)
|
|
(98
|
)
|
|
(297
|
)
|
|
(200
|
)
|
||||
Above- and below-market rent intangible lease amortization, net
|
(35
|
)
|
|
4
|
|
|
(69
|
)
|
|
18
|
|
||||
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO
|
15
|
|
|
259
|
|
|
(199
|
)
|
|
(1,158
|
)
|
||||
Total adjustments
|
12,769
|
|
|
20,722
|
|
|
42,606
|
|
|
(22,725
|
)
|
||||
AFFO attributable to W. P. Carey
|
$
|
139,036
|
|
|
$
|
122,246
|
|
|
$
|
269,003
|
|
|
$
|
240,494
|
|
|
|
|
|
|
|
|
|
||||||||
Summary
|
|
|
|
|
|
|
|
||||||||
FFO attributable to W. P. Carey — as defined by NAREIT
|
$
|
126,267
|
|
|
$
|
101,524
|
|
|
$
|
226,397
|
|
|
$
|
263,219
|
|
AFFO attributable to W. P. Carey
|
$
|
139,036
|
|
|
$
|
122,246
|
|
|
$
|
269,003
|
|
|
$
|
240,494
|
|
(a)
|
Represents primarily unrealized gains and losses from foreign exchange and derivatives, as well as amounts for the amortization of contracts.
|
(b)
|
Amounts for the
three and six months ended June 30,
2014
include reported merger costs, as well as income tax expense incurred in connection with the CPA
®
:16 Merger. Income tax expense incurred in connection with the CPA
®
:16 Merger
|
|
W. P. Carey 6/30/2015 10-Q
–
69
|
(c)
|
Effective January 1, 2015, we no longer adjust for realized gains or losses on foreign currency derivatives. For the
three and six months ended June 30,
2014
, realized gains on foreign exchange derivatives were $0.3 million and less than $0.1 million, respectively.
|
(d)
|
Gain on change in control of interests for the
six months ended
June 30, 2014
represents a gain of $75.7 million recognized on our previously-held interest in shares of CPA
®
:16 – Global common stock and a gain of $30.2 million recognized on the purchase of the remaining interests in nine investments from CPA
®
:16 – Global, which we had previously accounted for under the equity method.
|
|
W. P. Carey 6/30/2015 10-Q
–
70
|
|
2015 (Remainder)
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
|
Fair value
|
|||||||||||||||
Fixed-rate debt
(a)
|
$
|
84,646
|
|
|
320,862
|
|
|
$
|
664,878
|
|
|
$
|
133,087
|
|
|
$
|
86,018
|
|
|
$
|
2,245,427
|
|
|
$
|
3,534,918
|
|
|
$
|
3,560,657
|
|
Variable-rate debt
(a)
|
$
|
104,619
|
|
|
263,384
|
|
|
$
|
61,636
|
|
|
$
|
486,535
|
|
|
$
|
13,239
|
|
|
$
|
82,974
|
|
|
$
|
1,012,387
|
|
|
$
|
995,689
|
|
(a)
|
Amounts are based on the exchange rate at
June 30, 2015
, as applicable.
|
|
W. P. Carey 6/30/2015 10-Q
–
71
|
Lease Revenues
(a)
|
|
2015 (Remainder)
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Euro
(c)
|
|
$
|
96,642
|
|
|
$
|
191,601
|
|
|
$
|
182,609
|
|
|
$
|
169,507
|
|
|
$
|
151,730
|
|
|
$
|
1,282,058
|
|
|
$
|
2,074,147
|
|
British pound sterling
(d)
|
|
19,480
|
|
|
38,794
|
|
|
38,750
|
|
|
38,864
|
|
|
39,079
|
|
|
410,113
|
|
|
585,080
|
|
|||||||
Australian dollar
(e)
|
|
5,179
|
|
|
10,301
|
|
|
10,273
|
|
|
10,273
|
|
|
10,273
|
|
|
152,496
|
|
|
198,795
|
|
|||||||
Other foreign currencies
(f)
|
|
7,586
|
|
|
15,269
|
|
|
15,405
|
|
|
15,564
|
|
|
15,992
|
|
|
128,433
|
|
|
198,249
|
|
|||||||
|
|
$
|
128,887
|
|
|
$
|
255,965
|
|
|
$
|
247,037
|
|
|
$
|
234,208
|
|
|
$
|
217,074
|
|
|
$
|
1,973,100
|
|
|
$
|
3,056,271
|
|
Debt service
(a) (b)
|
|
2015 (Remainder)
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Euro
(c)
|
|
$
|
146,388
|
|
|
$
|
186,754
|
|
|
$
|
378,462
|
|
|
$
|
353,599
|
|
|
$
|
19,549
|
|
|
$
|
651,321
|
|
|
$
|
1,736,073
|
|
British pound sterling
(d)
|
|
16,803
|
|
|
987
|
|
|
987
|
|
|
987
|
|
|
987
|
|
|
15,594
|
|
|
36,345
|
|
|||||||
Other foreign currencies
(f)
|
|
1,515
|
|
|
2,993
|
|
|
7,626
|
|
|
9,872
|
|
|
750
|
|
|
3,858
|
|
|
26,614
|
|
|||||||
|
|
$
|
164,706
|
|
|
$
|
190,734
|
|
|
$
|
387,075
|
|
|
$
|
364,458
|
|
|
$
|
21,286
|
|
|
$
|
670,773
|
|
|
$
|
1,799,032
|
|
(a)
|
Amounts are based on the applicable exchange rates at
June 30, 2015
. Contractual rents and debt obligations are denominated in the functional currency of the country of each property.
|
(b)
|
Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at
June 30, 2015
.
|
(c)
|
We estimate that, for a 1% increase or decrease in the exchange rate between the euro and the U.S. dollar, there would be a corresponding change in the projected estimated property level cash flow at
June 30, 2015
of
$3.4 million
. Amounts included the equivalent of
$209.2 million
borrowed in euro under the Revolver, which is scheduled to mature on January 31, 2018 unless extended pursuant to its terms (
Note 12
), and the equivalent of
$559.5 million
of 2.0% Senior Euro Notes outstanding maturing in January 2023 (
Note 12
).
|
(d)
|
We estimate that, for a 1% increase or decrease in the exchange rate between the British pound sterling and the U.S. dollar, there would be a corresponding change in the projected estimated property level cash flow at
June 30, 2015
of
$5.5 million
.
|
(e)
|
We estimate that, for a 1% increase or decrease in the exchange rate between the Australian dollar and the U.S. dollar, there would be a corresponding change in the projected estimated property level cash flow at
June 30, 2015
of
$1.7 million
.
|
(f)
|
Other foreign currencies consist of the Canadian dollar, the Malaysian ringgit, the Swedish krona, the Norwegian krone, and the Thai baht.
|
|
W. P. Carey 6/30/2015 10-Q
–
72
|
|
W. P. Carey 6/30/2015 10-Q
–
73
|
|
W. P. Carey 6/30/2015 10-Q
–
74
|
Exhibit
No.
|
|
|
Description
|
|
Method of Filing
|
1.1
|
|
|
Equity Sales Agreement, dated June 3, 2015, by and among W. P. Carey Inc. and Citigroup Global Markets Inc., Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, as sales agent and/or principal.
|
|
Incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed June 3, 2015.
|
|
|
|
|
|
|
10.1
|
|
|
Third Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors Incorporated, CWI OP, LP and Carey Lodging Advisors, LLC.
|
|
Filed herewith
|
|
|
|
|
|
|
10.2
|
|
|
First Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP and Carey Lodging Advisors, LLC.
|
|
Filed herewith
|
|
|
|
|
|
|
10.3
|
|
|
Amended and Restated Asset Management Agreement dated as of May 13, 2015, by and among Corporate Property Associates 17 – Global Incorporated, CPA
®
:17 Limited Partnership, and W. P. Carey & Co. B.V.
|
|
Incorporated by reference to Exhibit 10.3 to Corporate Property Associates 17 – Global Incorporated’ Form 10‑Q filed on May 15, 2015.
|
|
|
|
|
|
|
10.4
|
|
|
Amended and Restated Asset Management Agreement, dated as of May 13, 2015, by and among, Corporate Property Associates 18 – Global Incorporated, CPA:18 Limited Partnership and W. P. Carey & Co. B.V.
|
|
Incorporated by reference to Exhibit 10.3 to Corporate Property Associates 18 – Global Incorporated’ Form 10‑Q filed on May 15, 2015.
|
|
|
|
|
|
|
10.5
|
|
|
Form of Long-Term Performance Share Unit Award Agreement under the 2009 Share Incentive Plan.
|
|
Filed herewith
|
|
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
31.2
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
32
|
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
101
|
|
|
The following materials from W. P. Carey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at June 30, 2015 and December 31, 2014, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014, (iv) Consolidated Statements of Equity for the six months ended June 30, 2015 and 2014, (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014, and (vi) Notes to Consolidated Financial Statements.
|
|
Filed herewith
|
|
W. P. Carey 6/30/2015 10-Q
–
75
|
|
|
|
W. P. Carey Inc.
|
Date:
|
August 7, 2015
|
|
|
|
|
By:
|
/s/ Hisham A. Kader
|
|
|
|
Hisham A. Kader
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
August 7, 2015
|
|
|
|
|
By:
|
/s/ Toniann Sanzone
|
|
|
|
Toniann Sanzone
|
|
|
|
Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
|
W. P. Carey 6/30/2015 10-Q
–
76
|
Exhibit
No. |
|
|
Description
|
|
Method of Filing
|
1.1
|
|
|
Equity Sales Agreement, dated June 3, 2015, by and among W. P. Carey Inc. and Citigroup Global Markets Inc., Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, as sales agent and/or principal.
|
|
Incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed June 3, 2015.
|
|
|
|
|
|
|
10.1
|
|
|
Third Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors Incorporated, CWI OP, LP and Carey Lodging Advisors, LLC.
|
|
Filed herewith
|
|
|
|
|
|
|
10.2
|
|
|
First Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP and Carey Lodging Advisors, LLC.
|
|
Filed herewith
|
|
|
|
|
|
|
10.3
|
|
|
Amended and Restated Asset Management Agreement dated as of May 13, 2015, by and among Corporate Property Associates 17 – Global Incorporated, CPA®:17 Limited Partnership, and W. P. Carey & Co. B.V.
|
|
Incorporated by reference to Exhibit 10.3 to Corporate Property Associates 17 – Global Incorporated’ Form 10‑Q filed on May 15, 2015.
|
|
|
|
|
|
|
10.4
|
|
|
Amended and Restated Asset Management Agreement, dated as of May 13, 2015, by and among, Corporate Property Associates 18 – Global Incorporated, CPA:18 Limited Partnership and W. P. Carey & Co. B.V.
|
|
Incorporated by reference to Exhibit 10.3 to Corporate Property Associates 18 – Global Incorporated’ Form 10‑Q filed on May 15, 2015.
|
|
|
|
|
|
|
10.5
|
|
|
Form of Long-Term Performance Share Unit Award Agreement under the 2009 Share Incentive Plan.
|
|
Filed herewith
|
|
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
31.2
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
32
|
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
101
|
|
|
The following materials from W. P. Carey Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at June 30, 2015 and December 31, 2014, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014, (iv) Consolidated Statements of Equity for the six months ended June 30, 2015 and 2014, (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014, and (vi) Notes to Consolidated Financial Statements.
|
|
Filed herewith
|
|
CAREY WATERMARK INVESTORS INCORPORATED
|
|
|
|
|
By:
|
/s/ Susan C. Hyde
|
|
Name: Susan C. Hyde
|
|
Title: Managing Director and Secretary
|
|
|
|
|
|
|
|
CWI OP, LP
|
By:
|
CAREY WATERMARK INVESTORS INCORPORATED, its general partner
|
|
|
|
|
By:
|
/s/ Hisham A. Kader
|
|
Name: Hisham A. Kader
|
|
Title: Chief Financial Officer and
|
|
Accounting Officer
|
|
|
|
|
|
|
|
CAREY LODGING ADVISORS, LLC
|
By:
|
CAREY ASSET MANAGEMENT CORP.,
|
|
its sole member
|
|
|
|
|
By:
|
/s/ Thomas E. Zacharias
|
|
Name: Thomas E. Zacharias
|
|
Title: Managing Director and Chief Operation Officer
|
|
CAREY WATERMARK INVESTORS INCORPORATED
|
|
|
|
|
By:
|
/s/ Susan C. Hyde
|
|
Name: Susan C. Hyde
|
|
Title: Managing Director and Secretary
|
|
|
|
|
|
|
|
CWI OP, LP
|
By:
|
CAREY WATERMARK INVESTORS INCORPORATED, its general partner
|
|
|
|
|
By:
|
/s/ Hisham A. Kader
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Name: Hisham A. Kader
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Title: Chief Financial Officer and
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Accounting Officer
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CAREY LODGING ADVISORS, LLC
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By:
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CAREY ASSET MANAGEMENT CORP.,
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its sole member
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By:
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/s/ Thomas E. Zacharias
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Name: Thomas E. Zacharias
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Title: Managing Director and Chief Operation Officer
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W. P. CAREY INC.
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By:
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Participant:
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Name:
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Signature:
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1.
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I have reviewed this Quarterly Report on Form 10-Q of W. P. Carey Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of W. P. Carey Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of W. P. Carey Inc.
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