|
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
|
Emerging growth company
o
|
|
|
|
|
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 9/30/2018 10-Q
–
1
|
|
W. P. Carey 9/30/2018 10-Q
–
2
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Investments in real estate:
|
|
|
|
||||
Land, buildings and improvements
|
$
|
5,794,494
|
|
|
$
|
5,457,265
|
|
Net investments in direct financing leases
|
702,151
|
|
|
721,607
|
|
||
In-place lease and other intangible assets
|
1,199,785
|
|
|
1,213,976
|
|
||
Above-market rent intangible assets
|
626,390
|
|
|
640,480
|
|
||
Investments in real estate
|
8,322,820
|
|
|
8,033,328
|
|
||
Accumulated depreciation and amortization
|
(1,485,056
|
)
|
|
(1,329,613
|
)
|
||
Assets held for sale, net
|
108,730
|
|
|
—
|
|
||
Net investments in real estate
|
6,946,494
|
|
|
6,703,715
|
|
||
Equity investments in the Managed Programs and real estate
|
366,306
|
|
|
341,457
|
|
||
Cash and cash equivalents
|
176,612
|
|
|
162,312
|
|
||
Due from affiliates
|
82,547
|
|
|
105,308
|
|
||
Other assets, net
|
305,295
|
|
|
274,650
|
|
||
Goodwill
|
641,734
|
|
|
643,960
|
|
||
Total assets
|
$
|
8,518,988
|
|
|
$
|
8,231,402
|
|
Liabilities and Equity
|
|
|
|
||||
Debt:
|
|
|
|
||||
Senior unsecured notes, net
|
$
|
3,007,453
|
|
|
$
|
2,474,661
|
|
Unsecured revolving credit facility
|
696,380
|
|
|
216,775
|
|
||
Unsecured term loans, net
|
—
|
|
|
388,354
|
|
||
Non-recourse mortgages, net
|
959,951
|
|
|
1,185,477
|
|
||
Debt, net
|
4,663,784
|
|
|
4,265,267
|
|
||
Accounts payable, accrued expenses and other liabilities
|
265,676
|
|
|
263,053
|
|
||
Below-market rent and other intangible liabilities, net
|
105,898
|
|
|
113,957
|
|
||
Deferred income taxes
|
98,933
|
|
|
67,009
|
|
||
Dividends payable
|
111,688
|
|
|
109,766
|
|
||
Total liabilities
|
5,245,979
|
|
|
4,819,052
|
|
||
Redeemable noncontrolling interest
|
1,300
|
|
|
965
|
|
||
Commitments and contingencies (
Note 11
)
|
|
|
|
|
|
||
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 450,000,000 shares authorized; 107,214,394 and 106,922,616 shares, respectively, issued and outstanding
|
107
|
|
|
107
|
|
||
Additional paid-in capital
|
4,445,426
|
|
|
4,433,573
|
|
||
Distributions in excess of accumulated earnings
|
(1,165,914
|
)
|
|
(1,052,064
|
)
|
||
Deferred compensation obligation
|
36,159
|
|
|
46,656
|
|
||
Accumulated other comprehensive loss
|
(254,055
|
)
|
|
(236,011
|
)
|
||
Total stockholders’ equity
|
3,061,723
|
|
|
3,192,261
|
|
||
Noncontrolling interests
|
209,986
|
|
|
219,124
|
|
||
Total equity
|
3,271,709
|
|
|
3,411,385
|
|
||
Total liabilities and equity
|
$
|
8,518,988
|
|
|
$
|
8,231,402
|
|
|
W. P. Carey 9/30/2018 10-Q
–
3
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Real Estate:
|
|
|
|
|
|
|
|
||||||||
Lease revenues
|
$
|
167,088
|
|
|
$
|
161,511
|
|
|
$
|
492,935
|
|
|
$
|
475,547
|
|
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
17,931
|
|
|
15,940
|
|
||||
Operating property revenues
|
4,282
|
|
|
8,449
|
|
|
16,365
|
|
|
23,652
|
|
||||
Lease termination income and other
|
1,981
|
|
|
1,227
|
|
|
3,603
|
|
|
4,234
|
|
||||
|
179,330
|
|
|
176,584
|
|
|
530,834
|
|
|
519,373
|
|
||||
Investment Management:
|
|
|
|
|
|
|
|
||||||||
Asset management revenue
|
17,349
|
|
|
17,938
|
|
|
51,602
|
|
|
53,271
|
|
||||
Structuring revenue
|
6,553
|
|
|
9,817
|
|
|
12,718
|
|
|
27,981
|
|
||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
16,883
|
|
|
45,390
|
|
||||
Other advisory revenue
|
110
|
|
|
99
|
|
|
300
|
|
|
896
|
|
||||
Dealer manager fees
|
—
|
|
|
105
|
|
|
—
|
|
|
4,430
|
|
||||
|
30,054
|
|
|
34,170
|
|
|
81,503
|
|
|
131,968
|
|
||||
|
209,384
|
|
|
210,754
|
|
|
612,337
|
|
|
651,341
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
67,825
|
|
|
64,040
|
|
|
198,119
|
|
|
189,319
|
|
||||
General and administrative
|
15,863
|
|
|
17,236
|
|
|
50,888
|
|
|
53,189
|
|
||||
Reimbursable tenant and affiliate costs
|
12,021
|
|
|
11,608
|
|
|
34,814
|
|
|
61,330
|
|
||||
Property expenses, excluding reimbursable tenant costs
|
7,953
|
|
|
10,556
|
|
|
26,760
|
|
|
31,196
|
|
||||
Subadvisor fees
|
3,127
|
|
|
5,206
|
|
|
7,014
|
|
|
11,598
|
|
||||
Stock-based compensation expense
|
2,475
|
|
|
4,635
|
|
|
14,392
|
|
|
14,649
|
|
||||
Merger and other expenses
|
1,673
|
|
|
65
|
|
|
4,328
|
|
|
1,138
|
|
||||
Restructuring and other compensation
|
—
|
|
|
1,356
|
|
|
—
|
|
|
9,074
|
|
||||
Dealer manager fees and expenses
|
—
|
|
|
462
|
|
|
—
|
|
|
6,544
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
4,790
|
|
|
—
|
|
||||
|
110,937
|
|
|
115,164
|
|
|
341,105
|
|
|
378,037
|
|
||||
Other Income and Expenses
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(41,740
|
)
|
|
(41,182
|
)
|
|
(121,125
|
)
|
|
(125,374
|
)
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
18,363
|
|
|
16,318
|
|
|
46,246
|
|
|
47,820
|
|
||||
Other gains and (losses)
|
8,875
|
|
|
(4,569
|
)
|
|
16,698
|
|
|
(4,969
|
)
|
||||
|
(14,502
|
)
|
|
(29,433
|
)
|
|
(58,181
|
)
|
|
(82,523
|
)
|
||||
Income before income taxes and gain on sale of real estate
|
83,945
|
|
|
66,157
|
|
|
213,051
|
|
|
190,781
|
|
||||
Provision for income taxes
|
(2,715
|
)
|
|
(1,760
|
)
|
|
(2,975
|
)
|
|
(2,903
|
)
|
||||
Income before gain on sale of real estate
|
81,230
|
|
|
64,397
|
|
|
210,076
|
|
|
187,878
|
|
||||
Gain on sale of real estate, net of tax
|
343
|
|
|
19,257
|
|
|
18,987
|
|
|
22,732
|
|
||||
Net Income
|
81,573
|
|
|
83,654
|
|
|
229,063
|
|
|
210,610
|
|
||||
Net income attributable to noncontrolling interests
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
||||
Net Income Attributable to W. P. Carey
|
$
|
77,348
|
|
|
$
|
80,278
|
|
|
$
|
218,303
|
|
|
$
|
202,080
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Share
|
$
|
0.71
|
|
|
$
|
0.74
|
|
|
$
|
2.02
|
|
|
$
|
1.87
|
|
Diluted Earnings Per Share
|
$
|
0.71
|
|
|
$
|
0.74
|
|
|
$
|
2.01
|
|
|
$
|
1.87
|
|
Weighted-Average Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
108,073,969
|
|
|
108,019,292
|
|
|
108,063,826
|
|
|
107,751,672
|
|
||||
Diluted
|
108,283,666
|
|
|
108,143,694
|
|
|
108,253,841
|
|
|
107,947,490
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends Declared Per Share
|
$
|
1.025
|
|
|
$
|
1.005
|
|
|
$
|
3.060
|
|
|
$
|
3.000
|
|
|
W. P. Carey 9/30/2018 10-Q
–
4
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Income
|
$
|
81,573
|
|
|
$
|
83,654
|
|
|
$
|
229,063
|
|
|
$
|
210,610
|
|
Other Comprehensive (Loss) Income
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(8,102
|
)
|
|
28,979
|
|
|
(29,401
|
)
|
|
71,686
|
|
||||
Realized and unrealized gain (loss) on derivative instruments
|
772
|
|
|
(10,270
|
)
|
|
6,453
|
|
|
(32,574
|
)
|
||||
Change in unrealized (loss) gain on investments
|
(269
|
)
|
|
66
|
|
|
101
|
|
|
(260
|
)
|
||||
|
(7,599
|
)
|
|
18,775
|
|
|
(22,847
|
)
|
|
38,852
|
|
||||
Comprehensive Income
|
73,974
|
|
|
102,429
|
|
|
206,216
|
|
|
249,462
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Attributable to Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||||
Net income
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
||||
Foreign currency translation adjustments
|
945
|
|
|
(4,716
|
)
|
|
4,797
|
|
|
(13,961
|
)
|
||||
Realized and unrealized loss on derivative instruments
|
1
|
|
|
8
|
|
|
6
|
|
|
13
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(3,279
|
)
|
|
(8,084
|
)
|
|
(5,957
|
)
|
|
(22,478
|
)
|
||||
Comprehensive Income Attributable to W. P. Carey
|
$
|
70,695
|
|
|
$
|
94,345
|
|
|
$
|
200,259
|
|
|
$
|
226,984
|
|
|
W. P. Carey 9/30/2018 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
|
|
W. P. Carey
|
|
Noncontrolling
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Obligation
|
|
Loss
|
|
Stockholders
|
|
Interests
|
|
Total
|
|||||||||||||||||
Balance at January 1, 2018
|
106,922,616
|
|
|
$
|
107
|
|
|
$
|
4,433,573
|
|
|
$
|
(1,052,064
|
)
|
|
$
|
46,656
|
|
|
$
|
(236,011
|
)
|
|
$
|
3,192,261
|
|
|
$
|
219,124
|
|
|
$
|
3,411,385
|
|
Shares issued upon delivery of vested restricted share awards
|
289,707
|
|
|
—
|
|
|
(13,501
|
)
|
|
|
|
|
|
|
|
(13,501
|
)
|
|
|
|
(13,501
|
)
|
||||||||||||
Shares issued upon purchases under employee share purchase plan
|
2,071
|
|
|
—
|
|
|
125
|
|
|
|
|
|
|
|
|
125
|
|
|
|
|
125
|
|
||||||||||||
Delivery of deferred vested shares, net
|
|
|
|
|
10,497
|
|
|
|
|
(10,497
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||||
Amortization of stock-based compensation expense
|
|
|
|
|
14,392
|
|
|
|
|
|
|
|
|
14,392
|
|
|
|
|
14,392
|
|
||||||||||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(15,166
|
)
|
|
(15,166
|
)
|
||||||||||||||
Redemption value adjustment
|
|
|
|
|
(335
|
)
|
|
|
|
|
|
|
|
(335
|
)
|
|
|
|
(335
|
)
|
||||||||||||||
Dividends declared ($3.060 per share)
|
|
|
|
|
675
|
|
|
(332,153
|
)
|
|
|
|
|
|
(331,478
|
)
|
|
|
|
(331,478
|
)
|
|||||||||||||
Net income
|
|
|
|
|
|
|
218,303
|
|
|
|
|
|
|
218,303
|
|
|
10,760
|
|
|
229,063
|
|
|||||||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
(24,604
|
)
|
|
(24,604
|
)
|
|
(4,797
|
)
|
|
(29,401
|
)
|
|||||||||||||
Realized and unrealized gain on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
6,459
|
|
|
6,459
|
|
|
(6
|
)
|
|
6,453
|
|
|||||||||||||
Change in unrealized gain on investments
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
101
|
|
|
|
|
101
|
|
||||||||||||||
Balance at September 30, 2018
|
107,214,394
|
|
|
$
|
107
|
|
|
$
|
4,445,426
|
|
|
$
|
(1,165,914
|
)
|
|
$
|
36,159
|
|
|
$
|
(254,055
|
)
|
|
$
|
3,061,723
|
|
|
$
|
209,986
|
|
|
$
|
3,271,709
|
|
|
W. P. Carey 9/30/2018 10-Q
–
6
|
|
W. P. Carey Stockholders
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Distributions
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||||
|
Common Stock
|
|
Additional
|
|
in Excess of
|
|
Deferred
|
|
Other
|
|
Total
|
|
|
|
|
|||||||||||||||||||
|
$0.001 Par Value
|
|
Paid-in
|
|
Accumulated
|
|
Compensation
|
|
Comprehensive
|
|
W. P. Carey
|
|
Noncontrolling
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Obligation
|
|
Loss
|
|
Stockholders
|
|
Interests
|
|
Total
|
|||||||||||||||||
Balance at January 1, 2017
|
106,294,162
|
|
|
$
|
106
|
|
|
$
|
4,399,961
|
|
|
$
|
(894,137
|
)
|
|
$
|
50,222
|
|
|
$
|
(254,485
|
)
|
|
$
|
3,301,667
|
|
|
$
|
123,473
|
|
|
$
|
3,425,140
|
|
Shares issued under “at-the-market” offering, net
|
345,253
|
|
|
1
|
|
|
22,856
|
|
|
|
|
|
|
|
|
22,857
|
|
|
|
|
22,857
|
|
||||||||||||
Acquisition of noncontrolling interest
|
|
|
|
|
(1,845
|
)
|
|
|
|
|
|
|
|
(1,845
|
)
|
|
1,845
|
|
|
—
|
|
|||||||||||||
Shares issued upon delivery of vested restricted share awards
|
219,540
|
|
|
—
|
|
|
(9,678
|
)
|
|
|
|
|
|
|
|
(9,678
|
)
|
|
|
|
(9,678
|
)
|
||||||||||||
Shares issued upon exercise of stock options and purchases under employee share purchase plan
|
38,560
|
|
|
—
|
|
|
(1,595
|
)
|
|
|
|
|
|
|
|
(1,595
|
)
|
|
|
|
(1,595
|
)
|
||||||||||||
Delivery of deferred vested shares, net
|
|
|
|
|
3,734
|
|
|
|
|
(3,734
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||||
Amortization of stock-based compensation expense
|
|
|
|
|
14,649
|
|
|
|
|
|
|
|
|
14,649
|
|
|
|
|
14,649
|
|
||||||||||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
90,487
|
|
|
90,487
|
|
||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(16,910
|
)
|
|
(16,910
|
)
|
||||||||||||||
Dividends declared ($3.000 per share)
|
|
|
|
|
1,158
|
|
|
(325,844
|
)
|
|
223
|
|
|
|
|
(324,463
|
)
|
|
|
|
(324,463
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
|
202,080
|
|
|
|
|
|
|
202,080
|
|
|
8,530
|
|
|
210,610
|
|
|||||||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
57,725
|
|
|
57,725
|
|
|
13,961
|
|
|
71,686
|
|
|||||||||||||
Realized and unrealized loss on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
(32,561
|
)
|
|
(32,561
|
)
|
|
(13
|
)
|
|
(32,574
|
)
|
|||||||||||||
Change in unrealized loss on investments
|
|
|
|
|
|
|
|
|
|
|
(260
|
)
|
|
(260
|
)
|
|
|
|
(260
|
)
|
||||||||||||||
Balance at September 30, 2017
|
106,897,515
|
|
|
$
|
107
|
|
|
$
|
4,429,240
|
|
|
$
|
(1,017,901
|
)
|
|
$
|
46,711
|
|
|
$
|
(229,581
|
)
|
|
$
|
3,228,576
|
|
|
$
|
221,373
|
|
|
$
|
3,449,949
|
|
|
W. P. Carey 9/30/2018 10-Q
–
7
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows — Operating Activities
|
|
|
|
||||
Net income
|
$
|
229,063
|
|
|
$
|
210,610
|
|
Adjustments to net income:
|
|
|
|
||||
Depreciation and amortization, including intangible assets and deferred financing costs
|
201,983
|
|
|
195,298
|
|
||
Distributions of earnings from equity method investments
|
47,173
|
|
|
49,365
|
|
||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
(46,246
|
)
|
|
(47,820
|
)
|
||
Investment Management revenue received in shares of Managed REITs and other
|
(40,049
|
)
|
|
(53,170
|
)
|
||
Amortization of rent-related intangibles and deferred rental revenue
|
36,405
|
|
|
37,210
|
|
||
Gain on sale of real estate
|
(18,987
|
)
|
|
(22,732
|
)
|
||
Stock-based compensation expense
|
14,392
|
|
|
14,649
|
|
||
Straight-line rent adjustments
|
(12,142
|
)
|
|
(13,511
|
)
|
||
Realized and unrealized (gains) losses on foreign currency transactions, derivatives, and other
|
(9,293
|
)
|
|
15,223
|
|
||
Deferred income taxes
|
(5,123
|
)
|
|
(8,167
|
)
|
||
Impairment charges
|
4,790
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net changes in other operating assets and liabilities
|
(35,173
|
)
|
|
(2,548
|
)
|
||
Deferred structuring revenue received
|
7,834
|
|
|
15,256
|
|
||
Increase in deferred structuring revenue receivable
|
(4,868
|
)
|
|
(3,697
|
)
|
||
Net Cash Provided by Operating Activities
|
369,759
|
|
|
385,966
|
|
||
Cash Flows — Investing Activities
|
|
|
|
||||
Purchases of real estate
|
(530,114
|
)
|
|
(6,000
|
)
|
||
Proceeds from sales of real estate
|
95,130
|
|
|
102,503
|
|
||
Funding for real estate construction, redevelopments, and other capital expenditures on real estate
|
(64,010
|
)
|
|
(47,560
|
)
|
||
Proceeds from repayment of short-term loans to affiliates
|
37,000
|
|
|
229,696
|
|
||
Return of capital from equity method investments
|
12,129
|
|
|
6,482
|
|
||
Funding of short-term loans to affiliates
|
(10,000
|
)
|
|
(123,492
|
)
|
||
Capital contributions to equity method investments
|
(715
|
)
|
|
(1,291
|
)
|
||
Other investing activities, net
|
(576
|
)
|
|
5,728
|
|
||
Capital expenditures on corporate assets
|
(388
|
)
|
|
(274
|
)
|
||
Net Cash (Used in) Provided by Investing Activities
|
(461,544
|
)
|
|
165,792
|
|
||
Cash Flows — Financing Activities
|
|
|
|
||||
Proceeds from Senior Unsecured Credit Facility
|
982,538
|
|
|
1,189,591
|
|
||
Repayments of Senior Unsecured Credit Facility
|
(904,868
|
)
|
|
(1,558,091
|
)
|
||
Proceeds from issuance of Senior Unsecured Notes
|
616,355
|
|
|
530,456
|
|
||
Dividends paid
|
(329,552
|
)
|
|
(322,389
|
)
|
||
Prepayments of mortgage principal
|
(164,908
|
)
|
|
(159,204
|
)
|
||
Scheduled payments of mortgage principal
|
(59,048
|
)
|
|
(303,538
|
)
|
||
Distributions paid to noncontrolling interests
|
(15,166
|
)
|
|
(16,910
|
)
|
||
Payments for withholding taxes upon delivery of equity-based awards and exercises of stock options
|
(13,840
|
)
|
|
(11,423
|
)
|
||
Payment of financing costs
|
(4,286
|
)
|
|
(12,672
|
)
|
||
Other financing activities, net
|
(3,291
|
)
|
|
(1,451
|
)
|
||
Proceeds from mortgage financing
|
857
|
|
|
969
|
|
||
Contributions from noncontrolling interests
|
71
|
|
|
90,487
|
|
||
Proceeds from shares issued under “at-the-market” offering, net of selling costs
|
—
|
|
|
22,833
|
|
||
Net Cash Provided by (Used in) Financing Activities
|
104,862
|
|
|
(551,342
|
)
|
||
Change in Cash and Cash Equivalents and Restricted Cash During the Period
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(7,953
|
)
|
|
7,997
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
5,124
|
|
|
8,413
|
|
||
Cash and cash equivalents and restricted cash, beginning of period
|
209,676
|
|
|
210,731
|
|
||
Cash and cash equivalents and restricted cash, end of period
|
$
|
214,800
|
|
|
$
|
219,144
|
|
|
W. P. Carey 9/30/2018 10-Q
–
8
|
•
|
CPA:17 – Global and Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global, publicly owned, non-listed REITs that primarily invest in commercial real estate properties leased to companies on a triple-net lease basis; we refer to CPA:17 – Global and CPA:18 – Global together as the CPA REITs;
|
•
|
Carey Watermark Investors Incorporated, or CWI 1, and Carey Watermark Investors 2 Incorporated, or CWI 2, two publicly owned, non-listed REITs that invest in lodging and lodging-related properties; we refer to CWI 1 and CWI 2 together as the CWI REITs and, together with the CPA REITs, as the Managed REITs (
Note 3
); and
|
•
|
Carey European Student Housing Fund I, L.P., or CESH I, a limited partnership formed for the purpose of developing, owning, and operating student housing properties and similar investments in Europe (
Note 3
); we refer to the Managed REITs and CESH I collectively as the Managed Programs.
|
|
W. P. Carey 9/30/2018 10-Q
–
9
|
|
W. P. Carey 9/30/2018 10-Q
–
10
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land, buildings and improvements
|
$
|
952,534
|
|
|
$
|
916,001
|
|
Net investments in direct financing leases
|
38,847
|
|
|
40,133
|
|
||
In-place lease and other intangible assets
|
235,578
|
|
|
268,863
|
|
||
Above-market rent intangible assets
|
92,226
|
|
|
103,081
|
|
||
Accumulated depreciation and amortization
|
(253,067
|
)
|
|
(251,979
|
)
|
||
Total assets
|
1,245,053
|
|
|
1,118,727
|
|
||
|
|
|
|
||||
Non-recourse mortgages, net
|
$
|
113,901
|
|
|
$
|
128,230
|
|
Total liabilities
|
208,206
|
|
|
201,186
|
|
|
W. P. Carey 9/30/2018 10-Q
–
11
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
176,612
|
|
|
$
|
162,312
|
|
Restricted cash
(a)
|
38,188
|
|
|
47,364
|
|
||
Total cash and cash equivalents and restricted cash
|
$
|
214,800
|
|
|
$
|
209,676
|
|
(a)
|
Restricted cash is included within Other assets, net on our consolidated balance sheets.
|
|
W. P. Carey 9/30/2018 10-Q
–
12
|
|
W. P. Carey 9/30/2018 10-Q
–
13
|
|
W. P. Carey 9/30/2018 10-Q
–
14
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Asset management revenue
(a)
|
$
|
17,349
|
|
|
$
|
17,938
|
|
|
$
|
51,602
|
|
|
$
|
53,271
|
|
Distributions of Available Cash
|
13,135
|
|
|
12,047
|
|
|
32,413
|
|
|
34,568
|
|
||||
Structuring revenue
(a)
|
6,553
|
|
|
9,817
|
|
|
12,718
|
|
|
27,981
|
|
||||
Reimbursable costs from affiliates
(a)
|
6,042
|
|
|
6,211
|
|
|
16,883
|
|
|
45,390
|
|
||||
Interest income on deferred acquisition fees and loans to affiliates
|
493
|
|
|
447
|
|
|
1,541
|
|
|
1,464
|
|
||||
Other advisory revenue
(a)
|
110
|
|
|
99
|
|
|
300
|
|
|
896
|
|
||||
Dealer manager fees
(a)
|
—
|
|
|
105
|
|
|
—
|
|
|
4,430
|
|
||||
|
$
|
43,682
|
|
|
$
|
46,664
|
|
|
$
|
115,457
|
|
|
$
|
168,000
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
CPA:17 – Global
|
$
|
17,794
|
|
|
$
|
15,383
|
|
|
$
|
48,131
|
|
|
$
|
55,645
|
|
CPA:18 – Global
|
11,377
|
|
|
4,042
|
|
|
29,411
|
|
|
18,361
|
|
||||
CWI 1
|
8,204
|
|
|
11,940
|
|
|
20,826
|
|
|
26,051
|
|
||||
CWI 2
|
5,537
|
|
|
11,643
|
|
|
14,982
|
|
|
45,206
|
|
||||
CCIF
|
—
|
|
|
1,787
|
|
|
—
|
|
|
12,777
|
|
||||
CESH I
|
770
|
|
|
1,869
|
|
|
2,107
|
|
|
9,960
|
|
||||
|
$
|
43,682
|
|
|
$
|
46,664
|
|
|
$
|
115,457
|
|
|
$
|
168,000
|
|
(a)
|
Amounts represent revenues from contracts under ASC 606.
|
|
W. P. Carey 9/30/2018 10-Q
–
15
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Short-term loans to affiliates, including accrued interest
|
$
|
58,350
|
|
|
$
|
84,031
|
|
Deferred acquisition fees receivable, including accrued interest
|
9,782
|
|
|
12,345
|
|
||
Asset management fees receivable
|
6,058
|
|
|
356
|
|
||
Reimbursable costs
|
4,972
|
|
|
4,315
|
|
||
Accounts receivable
|
1,706
|
|
|
4,089
|
|
||
Current acquisition fees receivable
|
1,679
|
|
|
83
|
|
||
Organization and offering costs
|
—
|
|
|
89
|
|
||
|
$
|
82,547
|
|
|
$
|
105,308
|
|
Managed Program
|
|
Rate
|
|
Payable
|
|
Description
|
CPA:17 – Global
|
|
0.5% – 1.75%
|
|
In shares of its common stock and/or cash, at the option of CPA:17 – Global; payable in shares of its common stock through May 31, 2018; payable in cash effective as of June 1, 2018 in light of the CPA:17 Merger
|
|
Rate depends on the type of investment and was based on the average market or average equity value, as applicable
|
CPA:18 – Global
|
|
0.5% – 1.5%
|
|
In shares of its Class A common stock and/or cash, at the option of CPA:18 – Global; payable in shares of its Class A common stock for 2018 and 2017
|
|
Rate depends on the type of investment and is based on the average market or average equity value, as applicable
|
CWI 1
|
|
0.5%
|
|
In shares of its common stock and/or cash, at our election; payable in shares of its common stock for 2018 and 2017
|
|
Rate is based on the average market value of the investment; we are required to pay 20% of the asset management revenue we receive to the subadvisor
|
CWI 2
|
|
0.55%
|
|
In shares of its Class A common stock and/or cash, at our election; payable in shares of its Class A common stock for 2018 and 2017
|
|
Rate is based on the average market value of the investment; we are required to pay 25% of the asset management revenue we receive to the subadvisor
|
CCIF
|
|
1.75% – 2.00%
|
|
In cash, prior to our resignation as the advisor to CCIF, effective September 11, 2017 (
Note 1
)
|
|
Based on the average of gross assets at fair value; we were required to pay 50% of the asset management revenue we received to the subadvisor
|
CESH I
|
|
1.0%
|
|
In cash
|
|
Based on gross assets at fair value
|
|
W. P. Carey 9/30/2018 10-Q
–
16
|
Managed Program
|
|
Rate
|
|
Payable
|
|
Description
|
CPA:17 – Global
|
|
1% – 1.75%, 4.5%
|
|
In cash; for non net-lease investments, 1% – 1.75% upon completion; for net-lease investments, 2.5% upon completion, with 2% deferred and payable in three interest-bearing annual installments
|
|
Based on the total aggregate cost of the net-lease investments made; also based on the total aggregate cost of the non net-lease investments or commitments made; total limited to 6% of the contract prices in aggregate
|
CPA:18 – Global
|
|
4.5%
|
|
In cash; for all investments, other than readily marketable real estate securities for which we will not receive any acquisition fees, 2.5% upon completion, with 2% deferred and payable in three interest-bearing annual installments
|
|
Based on the total aggregate cost of the investments or commitments made; total limited to 6% of the contract prices in aggregate
|
CWI REITs
|
|
1% – 2.5%
|
|
In cash upon completion; loan refinancing transactions up to 1% of the principal amount; 2.5% of the total investment cost of the properties acquired, however, fees were paid 50% in cash and 50% in shares of CWI 1’s common stock and CWI 2’s Class A common stock for a jointly owned investment structured on behalf of CWI 1 and CWI 2 in September 2017, with the approval of each CWI REIT’s board of directors
|
|
Based on the total aggregate cost of the lodging investments or commitments made; we are required to pay 20% and 25% to the subadvisors of CWI 1 and CWI 2, respectively; total for each CWI REIT limited to 6% of the contract prices in aggregate
|
CESH I
|
|
2.0%
|
|
In cash upon acquisition
|
|
Based on the total aggregate cost of investments or commitments made, including the acquisition, development, construction, or redevelopment of the investments
|
|
W. P. Carey 9/30/2018 10-Q
–
17
|
Managed Program
|
|
Payable
|
|
Description
|
CPA:17 – Global and CPA:18 – Global
|
|
In cash
|
|
Personnel and overhead costs, excluding those related to our legal transactions group, our senior management, and our investments team, are charged to the CPA REITs based on the average of the trailing 12-month aggregate reported revenues of the Managed Programs and us, and are capped at 1.0% and 2.0% of each CPA REIT’s pro rata lease revenues for 2018 and 2017, respectively; for the legal transactions group, costs are charged according to a fee schedule
|
CWI 1 and CWI 2
|
|
In cash
|
|
Actual expenses incurred, excluding those related to our senior management; allocated between the CWI REITs based on the percentage of their total pro rata hotel revenues for the most recently completed quarter
|
CCIF and CCIF Feeder Funds
|
|
In cash
|
|
Actual expenses incurred, excluding those related to their investment management team and senior management team, prior to our resignation as the advisor to CCIF, effective September 11, 2017 (
Note 1
)
|
CESH I
|
|
In cash
|
|
Actual expenses incurred
|
|
W. P. Carey 9/30/2018 10-Q
–
18
|
|
|
Interest Rate at September 30, 2018
|
|
Maturity Date at September 30, 2018
|
|
Maximum Loan Amount Authorized at September 30, 2018
|
|
Principal Outstanding Balance at
(a)
|
||||||||
Managed Program
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|||||||||
CWI 1
(b) (c)
|
|
LIBOR + 1.00%
|
|
6/30/2019
|
|
$
|
65,802
|
|
|
$
|
41,637
|
|
|
$
|
68,637
|
|
CESH I
(b)
|
|
LIBOR + 1.00%
|
|
5/3/2019
|
|
35,000
|
|
|
14,461
|
|
|
14,461
|
|
|||
CPA:18 – Global
|
|
N/A
|
|
N/A
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|||
CWI 2
|
|
N/A
|
|
N/A
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
$
|
56,098
|
|
|
$
|
83,098
|
|
(a)
|
Amounts exclude accrued interest of
$2.3 million
and
$0.9 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(b)
|
LIBOR means London Interbank Offered Rate.
|
(c)
|
Maximum loan amount authorized at
December 31, 2017
to CWI 1 was
$100.0 million
.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land
|
$
|
1,130,930
|
|
|
$
|
1,125,539
|
|
Buildings and improvements
|
4,596,754
|
|
|
4,208,907
|
|
||
Real estate under construction
|
24,430
|
|
|
39,772
|
|
||
Less: Accumulated depreciation
|
(699,584
|
)
|
|
(613,543
|
)
|
||
|
$
|
5,052,530
|
|
|
$
|
4,760,675
|
|
|
W. P. Carey 9/30/2018 10-Q
–
19
|
•
|
an investment of
$6.1 million
for a warehouse facility in Sellersburg, Indiana, on February 21, 2018;
|
•
|
an investment of
$79.1 million
for
one
warehouse facility in Waukesha, Wisconsin, and
two
retail facilities in Appleton and Madison, Wisconsin, on March 15, 2018;
|
•
|
an investment of
$85.5 million
for a manufacturing facility in Bessemer, Alabama, on June 5, 2018; the property was acquired as part of a nonmonetary transaction in exchange for
23
manufacturing facilities in various locations in the United States and Canada leased to the same tenant; this swap was recorded based on the fair value of the property acquired and was a non-cash investing activity (
Note 15
);
|
•
|
an investment of
$186.6 million
for
14
logistics facilities and
one
office building in various locations in Denmark on June 28, 2018. In addition, we recorded an estimated deferred tax liability of
$33.2 million
, with a corresponding increase to the asset value, since we assumed the tax basis of the acquired portfolio;
|
•
|
an investment of
$177.8 million
for
36
retail facilities in various locations in the Netherlands on July 13, 2018;
|
•
|
an investment of
$9.1 million
for a manufacturing facility in Oostburg, Wisconsin, on July 17, 2018;
|
•
|
an investment of
$22.9 million
for an office/warehouse facility in Kampen, the Netherlands, on July 19, 2018; and
|
•
|
an investment of
$49.9 million
for a logistics facility in Azambuja, Portugal, on September 28, 2018. In addition, we recorded an estimated deferred tax liability of
$10.5 million
, with a corresponding increase to the asset value, since we assumed the tax basis of the acquired property.
|
•
|
an expansion project at an education facility in Houston, Texas, in January 2018 at a cost totaling
$21.1 million
, including capitalized interest;
|
•
|
a build-to-suit project for an industrial facility in Zawiercie, Poland, in April 2018 at a cost totaling
$11.4 million
, including capitalized interest;
|
•
|
a renovation project at
two
industrial facilities in Albemarle and Old Fort, North Carolina, in April 2018 at a cost totaling
$2.2 million
(this investment is included within Net investments in direct financing leases in the consolidated balance sheets);
|
•
|
a renovation project at an industrial facility in Chicago, Illinois, in June 2018 at a cost totaling
$3.5 million
;
|
•
|
an expansion project at an education facility in Windermere, Florida, in August 2018 at a cost totaling
$15.1 million
, including capitalized interest;
|
•
|
a renovation project at a retail facility in Kennesaw, Georgia, in August 2018 at a cost totaling
$5.5 million
; and
|
•
|
a build-to-suit project for an industrial facility in Radomsko, Poland, in August 2018 at a cost totaling
$16.0 million
, including capitalized interest.
|
|
W. P. Carey 9/30/2018 10-Q
–
20
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land
|
$
|
3,874
|
|
|
$
|
6,041
|
|
Buildings and improvements
|
38,506
|
|
|
77,006
|
|
||
Less: Accumulated depreciation
|
(8,039
|
)
|
|
(16,419
|
)
|
||
|
$
|
34,341
|
|
|
$
|
66,628
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land, buildings and improvements
|
$
|
74,628
|
|
|
$
|
—
|
|
In-place lease and other intangible assets
|
51,009
|
|
|
—
|
|
||
Above-market rent intangible assets
|
8,570
|
|
|
—
|
|
||
Accumulated depreciation and amortization
|
(25,477
|
)
|
|
—
|
|
||
Assets held for sale, net
|
$
|
108,730
|
|
|
$
|
—
|
|
|
W. P. Carey 9/30/2018 10-Q
–
21
|
|
|
Number of Tenants / Obligors at
|
|
Carrying Value at
|
||||||||
Internal Credit Quality Indicator
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
1 - 3
|
|
26
|
|
24
|
|
$
|
628,744
|
|
|
$
|
608,101
|
|
4
|
|
6
|
|
8
|
|
83,058
|
|
|
123,477
|
|
||
5
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
$
|
711,802
|
|
|
$
|
731,578
|
|
|
W. P. Carey 9/30/2018 10-Q
–
22
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Finite-Lived Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Internal-use software development costs
|
$
|
18,814
|
|
|
$
|
(9,972
|
)
|
|
$
|
8,842
|
|
|
$
|
18,649
|
|
|
$
|
(7,862
|
)
|
|
$
|
10,787
|
|
Trade name
|
3,975
|
|
|
(997
|
)
|
|
2,978
|
|
|
3,975
|
|
|
(401
|
)
|
|
3,574
|
|
||||||
|
22,789
|
|
|
(10,969
|
)
|
|
11,820
|
|
|
22,624
|
|
|
(8,263
|
)
|
|
14,361
|
|
||||||
Lease Intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-place lease
|
1,175,176
|
|
|
(460,774
|
)
|
|
714,402
|
|
|
1,194,055
|
|
|
(421,686
|
)
|
|
772,369
|
|
||||||
Above-market rent
|
626,390
|
|
|
(314,487
|
)
|
|
311,903
|
|
|
640,480
|
|
|
(276,110
|
)
|
|
364,370
|
|
||||||
Below-market ground lease
|
18,238
|
|
|
(2,172
|
)
|
|
16,066
|
|
|
18,936
|
|
|
(1,855
|
)
|
|
17,081
|
|
||||||
|
1,819,804
|
|
|
(777,433
|
)
|
|
1,042,371
|
|
|
1,853,471
|
|
|
(699,651
|
)
|
|
1,153,820
|
|
||||||
Indefinite-Lived Goodwill and Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
641,734
|
|
|
—
|
|
|
641,734
|
|
|
643,960
|
|
|
—
|
|
|
643,960
|
|
||||||
Below-market ground lease
|
6,371
|
|
|
—
|
|
|
6,371
|
|
|
985
|
|
|
—
|
|
|
985
|
|
||||||
|
648,105
|
|
|
—
|
|
|
648,105
|
|
|
644,945
|
|
|
—
|
|
|
644,945
|
|
||||||
Total intangible assets
|
$
|
2,490,698
|
|
|
$
|
(788,402
|
)
|
|
$
|
1,702,296
|
|
|
$
|
2,521,040
|
|
|
$
|
(707,914
|
)
|
|
$
|
1,813,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finite-Lived Intangible Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Below-market rent
|
$
|
(133,547
|
)
|
|
$
|
54,015
|
|
|
$
|
(79,532
|
)
|
|
$
|
(135,704
|
)
|
|
$
|
48,657
|
|
|
$
|
(87,047
|
)
|
Above-market ground lease
|
(13,159
|
)
|
|
3,504
|
|
|
(9,655
|
)
|
|
(13,245
|
)
|
|
3,046
|
|
|
(10,199
|
)
|
||||||
|
(146,706
|
)
|
|
57,519
|
|
|
(89,187
|
)
|
|
(148,949
|
)
|
|
51,703
|
|
|
(97,246
|
)
|
||||||
Indefinite-Lived Intangible Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Below-market purchase option
|
(16,711
|
)
|
|
—
|
|
|
(16,711
|
)
|
|
(16,711
|
)
|
|
—
|
|
|
(16,711
|
)
|
||||||
Total intangible liabilities
|
$
|
(163,417
|
)
|
|
$
|
57,519
|
|
|
$
|
(105,898
|
)
|
|
$
|
(165,660
|
)
|
|
$
|
51,703
|
|
|
$
|
(113,957
|
)
|
|
W. P. Carey 9/30/2018 10-Q
–
23
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Distributions of Available Cash (
Note 3
)
|
$
|
13,135
|
|
|
$
|
12,047
|
|
|
$
|
32,413
|
|
|
$
|
34,568
|
|
Proportionate share of equity in earnings of equity investments in the Managed Programs
|
1,136
|
|
|
886
|
|
|
4,166
|
|
|
4,688
|
|
||||
Amortization of basis differences on equity method investments in the Managed Programs
|
(607
|
)
|
|
(355
|
)
|
|
(1,919
|
)
|
|
(969
|
)
|
||||
Total equity in earnings of equity method investments in the Managed Programs
|
13,664
|
|
|
12,578
|
|
|
34,660
|
|
|
38,287
|
|
||||
Equity in earnings of equity method investments in real estate
|
5,264
|
|
|
4,244
|
|
|
13,251
|
|
|
11,404
|
|
||||
Amortization of basis differences on equity method investments in real estate
|
(565
|
)
|
|
(504
|
)
|
|
(1,665
|
)
|
|
(1,871
|
)
|
||||
Total equity in earnings of equity method investments in real estate
|
4,699
|
|
|
3,740
|
|
|
11,586
|
|
|
9,533
|
|
||||
Equity in earnings of equity method investments in the Managed Programs and real estate
|
$
|
18,363
|
|
|
$
|
16,318
|
|
|
$
|
46,246
|
|
|
$
|
47,820
|
|
|
W. P. Carey 9/30/2018 10-Q
–
24
|
|
|
% of Outstanding Interests Owned at
|
|
Carrying Amount of Investment at
|
||||||||||
Fund
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||
CPA:17 – Global
(a)
|
|
4.572
|
%
|
|
4.186
|
%
|
|
$
|
130,145
|
|
|
$
|
125,676
|
|
CPA:17 – Global operating partnership
|
|
0.009
|
%
|
|
0.009
|
%
|
|
—
|
|
|
—
|
|
||
CPA:18 – Global
(a)
|
|
3.228
|
%
|
|
2.540
|
%
|
|
36,810
|
|
|
28,433
|
|
||
CPA:18 – Global operating partnership
|
|
0.034
|
%
|
|
0.034
|
%
|
|
209
|
|
|
209
|
|
||
CWI 1
(a)
|
|
2.830
|
%
|
|
2.119
|
%
|
|
36,026
|
|
|
26,810
|
|
||
CWI 1 operating partnership
|
|
0.015
|
%
|
|
0.015
|
%
|
|
186
|
|
|
186
|
|
||
CWI 2
(a)
|
|
2.554
|
%
|
|
1.786
|
%
|
|
23,219
|
|
|
16,495
|
|
||
CWI 2 operating partnership
|
|
0.015
|
%
|
|
0.015
|
%
|
|
300
|
|
|
300
|
|
||
CESH I
(b)
|
|
2.430
|
%
|
|
2.430
|
%
|
|
3,397
|
|
|
3,299
|
|
||
|
|
|
|
|
|
$
|
230,292
|
|
|
$
|
201,408
|
|
(a)
|
During 2018, we received asset management revenue from the Managed REITs in shares of their common stock, which increased our ownership percentage in each of the Managed REITs. Effective as of June 1, 2018, we began receiving asset management revenue from CPA:17 – Global in cash in light of the CPA:17 Merger, which closed on October 31, 2018 (
Note 1
,
Note 3
,
Note 17
).
|
(b)
|
Investment is accounted for at fair value.
|
|
W. P. Carey 9/30/2018 10-Q
–
25
|
|
|
|
|
|
|
Carrying Value at
|
||||||
Lessee
|
|
Co-owner
|
|
Ownership Interest
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
The New York Times Company
(a) (b)
|
|
CPA:17 – Global
|
|
45%
|
|
$
|
68,945
|
|
|
$
|
69,401
|
|
Frontier Spinning Mills, Inc.
(a)
|
|
CPA:17 – Global
|
|
40%
|
|
24,074
|
|
|
24,153
|
|
||
Beach House JV, LLC
(c)
|
|
Third Party
|
|
N/A
|
|
15,105
|
|
|
15,105
|
|
||
ALSO Actebis GmbH
(a) (d)
|
|
CPA:17 – Global
|
|
30%
|
|
11,401
|
|
|
12,009
|
|
||
Jumbo Logistiek Vastgoed B.V.
(a) (d) (e)
|
|
CPA:17 – Global
|
|
15%
|
|
9,430
|
|
|
10,661
|
|
||
Wagon Automotive GmbH
(a) (d) (f)
|
|
CPA:17 – Global
|
|
33%
|
|
6,016
|
|
|
8,386
|
|
||
Wanbishi Archives Co. Ltd.
(a) (g)
|
|
CPA:17 – Global
|
|
3%
|
|
1,043
|
|
|
334
|
|
||
|
|
|
|
|
|
$
|
136,014
|
|
|
$
|
140,049
|
|
(a)
|
Subsequent to the CPA:17 Merger in October 2018, we consolidate these wholly owned investments (
Note 17
).
|
(b)
|
I
n January 2018, this tenant exercised its option to repurchase the property it is leasing for
$250.0 million
. There can be no assurance that such repurchase will be completed.
|
(c)
|
This investment is in the form of a preferred equity interest.
|
(d)
|
The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
|
(e)
|
This investment represents a tenancy-in-common interest, whereby the property is encumbered by the debt for which we are jointly and severally liable. The co-obligor is CPA:17 – Global and the amount due under the arrangement was approximately
$72.5 million
at
September 30, 2018
. Of this amount,
$10.9 million
represents the amount we were liable for and is included within the carrying value of the investment at
September 30, 2018
.
|
|
W. P. Carey 9/30/2018 10-Q
–
26
|
(f)
|
In August 2018, this investment sold
one
of its
two
properties for
$7.7 million
, net of selling costs (our proportionate share was
$2.6 million
), and recognized a net gain on the sale of
$4.6 million
(our proportionate share was
$1.5 million
).
|
(g)
|
The carrying value of this investment is affected by fluctuations in the exchange rate of the yen. In January 2018, we contributed
$0.7 million
to this jointly owned investment in connection with the repayment of the non-recourse mortgage loan encumbering the investment.
|
|
W. P. Carey 9/30/2018 10-Q
–
27
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Level
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Senior Unsecured Notes, net
(a) (b) (c)
|
2
|
|
$
|
3,007,453
|
|
|
$
|
3,055,120
|
|
|
$
|
2,474,661
|
|
|
$
|
2,588,032
|
|
Non-recourse mortgages, net
(a) (b) (d)
|
3
|
|
959,951
|
|
|
957,332
|
|
|
1,185,477
|
|
|
1,196,399
|
|
||||
Note receivable
(d)
|
3
|
|
9,651
|
|
|
9,503
|
|
|
9,971
|
|
|
9,639
|
|
(a)
|
The carrying value of Senior Unsecured Notes, net (
Note 10
) includes unamortized deferred financing costs of
$16.7 million
and
$14.7 million
at
September 30, 2018
and
December 31, 2017
, respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of
$0.9 million
and
$1.0 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(b)
|
The carrying value of Senior Unsecured Notes, net includes unamortized discount of
$12.2 million
and
$9.9 million
at
September 30, 2018
and
December 31, 2017
, respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of
$1.9 million
and
$1.7 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(c)
|
We determined the estimated fair value of the Senior Unsecured Notes using observed market prices in an open market with limited trading volume.
|
(d)
|
We determined the estimated fair value of these financial instruments using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.
|
|
W. P. Carey 9/30/2018 10-Q
–
28
|
|
W. P. Carey 9/30/2018 10-Q
–
29
|
Derivatives Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
Asset Derivatives Fair Value at
|
|
Liability Derivatives Fair Value at
|
||||||||||||
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
Foreign currency forward contracts
|
|
Other assets, net
|
|
$
|
15,486
|
|
|
$
|
12,737
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency collars
|
|
Other assets, net
|
|
6,392
|
|
|
4,931
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
|
Other assets, net
|
|
1,500
|
|
|
523
|
|
|
—
|
|
|
—
|
|
||||
Interest rate cap
|
|
Other assets, net
|
|
4
|
|
|
20
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency collars
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(3,167
|
)
|
|
(6,805
|
)
|
||||
Interest rate swaps
|
|
Accounts payable, accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
(164
|
)
|
|
(1,108
|
)
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock warrants
|
|
Other assets, net
|
|
3,886
|
|
|
3,685
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap
(a)
|
|
Other assets, net
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives
|
|
|
|
$
|
27,268
|
|
|
$
|
21,915
|
|
|
$
|
(3,331
|
)
|
|
$
|
(7,913
|
)
|
(a)
|
This interest rate swap does not qualify for hedge accounting; however, it does protect against fluctuations in interest rates related to the underlying variable-rate debt.
|
|
|
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)
(a)
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign currency collars
|
|
$
|
1,267
|
|
|
$
|
(5,398
|
)
|
|
$
|
5,117
|
|
|
$
|
(16,002
|
)
|
Foreign currency forward contracts
|
|
(786
|
)
|
|
(4,752
|
)
|
|
(644
|
)
|
|
(16,422
|
)
|
||||
Interest rate swaps
|
|
244
|
|
|
250
|
|
|
1,664
|
|
|
779
|
|
||||
Interest rate cap
|
|
(1
|
)
|
|
(17
|
)
|
|
(12
|
)
|
|
(26
|
)
|
||||
Derivatives in Net Investment Hedging Relationships
(b)
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
1,100
|
|
|
(1,171
|
)
|
|
3,416
|
|
|
(5,347
|
)
|
||||
Total
|
|
$
|
1,824
|
|
|
$
|
(11,088
|
)
|
|
$
|
9,541
|
|
|
$
|
(37,018
|
)
|
|
|
|
|
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income (Effective Portion)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of Gain (Loss) Recognized in Income
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
Foreign currency forward contracts
|
|
Other gains and (losses)
|
|
$
|
1,752
|
|
|
$
|
1,454
|
|
|
$
|
4,556
|
|
|
$
|
5,336
|
|
Foreign currency collars
|
|
Other gains and (losses)
|
|
681
|
|
|
735
|
|
|
1,255
|
|
|
3,154
|
|
||||
Interest rate swaps and cap
|
|
Interest expense
|
|
(10
|
)
|
|
(286
|
)
|
|
(261
|
)
|
|
(1,024
|
)
|
||||
Total
|
|
|
|
$
|
2,423
|
|
|
$
|
1,903
|
|
|
$
|
5,550
|
|
|
$
|
7,466
|
|
(a)
|
Excludes
net gains
of less than
$0.1 million
and
net losses
of
$0.4 million
recognized on unconsolidated jointly owned investments for the
three months ended September 30, 2018
and
2017
, respectively, and
net gains
of
$0.3 million
and
net losses
of
$0.9 million
for the
nine months ended September 30, 2018
and
2017
, respectively.
|
|
W. P. Carey 9/30/2018 10-Q
–
30
|
(b)
|
The effective portion of the changes in fair value of these contracts are reported in the foreign currency translation adjustment section of
Other comprehensive (loss) income
.
|
|
|
|
|
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 September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
Foreign currency collars
|
|
Other gains and (losses)
|
|
$
|
135
|
|
|
$
|
(225
|
)
|
|
$
|
455
|
|
|
$
|
(718
|
)
|
Stock warrants
|
|
Other gains and (losses)
|
|
—
|
|
|
134
|
|
|
201
|
|
|
(201
|
)
|
||||
Foreign currency forward contracts
|
|
Other gains and (losses)
|
|
—
|
|
|
(19
|
)
|
|
(125
|
)
|
|
(19
|
)
|
||||
Interest rate swaps
|
|
Other gains and (losses)
|
|
—
|
|
|
2
|
|
|
7
|
|
|
11
|
|
||||
Derivatives in Cash Flow Hedging Relationships
(a)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Interest expense
|
|
36
|
|
|
153
|
|
|
249
|
|
|
455
|
|
||||
Foreign currency collars
|
|
Other gains and (losses)
|
|
(3
|
)
|
|
(13
|
)
|
|
(24
|
)
|
|
(11
|
)
|
||||
Foreign currency forward contracts
|
|
Other gains and (losses)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(75
|
)
|
||||
Total
|
|
|
|
$
|
168
|
|
|
$
|
18
|
|
|
$
|
763
|
|
|
$
|
(558
|
)
|
(a)
|
Relates to the ineffective portion of the hedging relationship.
|
|
|
Number of Instruments
|
|
Notional
Amount
|
|
Fair Value at
September 30, 2018 (a) |
||||
Interest Rate Derivatives
|
|
|
|
|||||||
Designated as Cash Flow Hedging Instruments
|
|
|
|
|
|
|
|
|||
Interest rate swaps
|
|
9
|
|
86,863
|
|
USD
|
|
$
|
1,336
|
|
Interest rate cap
|
|
1
|
|
30,050
|
|
EUR
|
|
4
|
|
|
|
|
|
|
|
|
|
$
|
1,340
|
|
(a)
|
Fair value amounts are based on the exchange rate of the euro at
September 30, 2018
, as applicable.
|
|
W. P. Carey 9/30/2018 10-Q
–
31
|
|
|
Number of Instruments
|
|
Notional
Amount |
|
Fair Value at
September 30, 2018
|
||||
Foreign Currency Derivatives
|
|
|
|
|||||||
Designated as Cash Flow Hedging Instruments
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
13
|
|
47,800
|
|
EUR
|
|
$
|
9,980
|
|
Foreign currency collars
|
|
31
|
|
39,000
|
|
GBP
|
|
4,615
|
|
|
Foreign currency collars
|
|
31
|
|
101,275
|
|
EUR
|
|
(1,390
|
)
|
|
Foreign currency forward contracts
|
|
5
|
|
6,385
|
|
AUD
|
|
541
|
|
|
Foreign currency forward contracts
|
|
1
|
|
540
|
|
GBP
|
|
148
|
|
|
Designated as Net Investment Hedging Instruments
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
2
|
|
68,999
|
|
AUD
|
|
4,817
|
|
|
|
|
|
|
|
|
|
$
|
18,711
|
|
|
W. P. Carey 9/30/2018 10-Q
–
32
|
|
W. P. Carey 9/30/2018 10-Q
–
33
|
|
|
Interest Rate at
September 30, 2018 (a) |
|
Maturity Date at September 30, 2018
|
|
Principal Outstanding Balance at
|
||||||
Senior Unsecured Credit Facility
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||
Unsecured Revolving Credit Facility:
|
|
|
|
|
|
|
|
|
|
|
||
Unsecured Revolving Credit Facility — borrowing in euros
(b)
|
|
EURIBOR + 1.00%
|
|
2/22/2021
|
|
$
|
449,380
|
|
|
$
|
111,775
|
|
Unsecured Revolving Credit Facility — borrowing in U.S. dollars
|
|
LIBOR + 1.00%
|
|
2/22/2021
|
|
247,000
|
|
|
105,000
|
|
||
|
|
|
|
|
|
696,380
|
|
|
216,775
|
|
||
Unsecured Term Loans
(c)
:
|
|
|
|
|
|
|
|
|
||||
Term Loan — borrowing in euros
(d)
|
|
N/A
|
|
N/A
|
|
—
|
|
|
283,425
|
|
||
Delayed Draw Term Loan — borrowing in euros
|
|
N/A
|
|
N/A
|
|
—
|
|
|
106,348
|
|
||
|
|
|
|
|
|
—
|
|
|
389,773
|
|
||
|
|
|
|
|
|
$
|
696,380
|
|
|
$
|
606,548
|
|
(a)
|
The applicable interest rate at
September 30, 2018
was based on the credit rating for our Senior Unsecured Notes of
BBB/Baa2
.
|
(b)
|
EURIBOR means Euro Interbank Offered Rate.
|
(c)
|
On March 7, 2018, we repaid and terminated our Unsecured Term Loans in full, as described above.
|
(d)
|
Balance excludes unamortized discount of
$1.2 million
and unamortized deferred financing costs of
$0.2 million
at
December 31, 2017
.
|
|
|
|
|
|
|
|
|
Original Issue Discount
|
|
Effective Interest Rate
|
|
|
|
|
|
Principal Outstanding Balance at
|
|||||||||||||
Senior Unsecured Notes, net
(a)
|
|
Issue Date
|
|
Principal Amount
|
|
Price of Par Value
|
|
|
|
Coupon Rate
|
|
Maturity Date
|
|
September 30, 2018
|
|
December 31, 2017
|
|||||||||||||
2.0% Senior Notes due 2023
|
|
1/21/2015
|
|
€
|
500.0
|
|
|
99.220
|
%
|
|
$
|
4.6
|
|
|
2.107
|
%
|
|
2.0
|
%
|
|
1/20/2023
|
|
$
|
578.8
|
|
|
$
|
599.7
|
|
4.6% Senior Notes due 2024
|
|
3/14/2014
|
|
$
|
500.0
|
|
|
99.639
|
%
|
|
$
|
1.8
|
|
|
4.645
|
%
|
|
4.6
|
%
|
|
4/1/2024
|
|
500.0
|
|
|
500.0
|
|
||
2.25% Senior Notes due 2024
|
|
1/19/2017
|
|
€
|
500.0
|
|
|
99.448
|
%
|
|
$
|
2.9
|
|
|
2.332
|
%
|
|
2.25
|
%
|
|
7/19/2024
|
|
578.8
|
|
|
599.7
|
|
||
4.0% Senior Notes due 2025
|
|
1/26/2015
|
|
$
|
450.0
|
|
|
99.372
|
%
|
|
$
|
2.8
|
|
|
4.077
|
%
|
|
4.0
|
%
|
|
2/1/2025
|
|
450.0
|
|
|
450.0
|
|
||
4.25% Senior Notes due 2026
|
|
9/12/2016
|
|
$
|
350.0
|
|
|
99.682
|
%
|
|
$
|
1.1
|
|
|
4.290
|
%
|
|
4.25
|
%
|
|
10/1/2026
|
|
350.0
|
|
|
350.0
|
|
||
2.125% Senior Notes due 2027
|
|
3/6/2018
|
|
€
|
500.0
|
|
|
99.324
|
%
|
|
$
|
4.2
|
|
|
2.208
|
%
|
|
2.125
|
%
|
|
4/15/2027
|
|
578.8
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,036.4
|
|
|
$
|
2,499.4
|
|
(a)
|
Aggregate balance excludes unamortized deferred financing costs totaling
$16.7 million
and
$14.7 million
, and unamortized discount totaling
$12.2 million
and
$9.9 million
, at
September 30, 2018
and
December 31, 2017
, respectively.
|
|
W. P. Carey 9/30/2018 10-Q
–
34
|
|
W. P. Carey 9/30/2018 10-Q
–
35
|
Years Ending December 31,
|
|
Total
(a)
|
||
2018 (remainder)
|
|
$
|
32,885
|
|
2019
|
|
91,760
|
|
|
2020
|
|
220,661
|
|
|
2021
|
|
855,589
|
|
|
2022
|
|
240,696
|
|
|
Thereafter through 2027
|
|
3,253,934
|
|
|
Total principal payments
|
|
4,695,525
|
|
|
Unamortized deferred financing costs
|
|
(17,638
|
)
|
|
Unamortized discount, net
(b)
|
|
(14,103
|
)
|
|
Total
|
|
$
|
4,663,784
|
|
(a)
|
Certain amounts are based on the applicable foreign currency exchange rate at
September 30, 2018
.
|
(b)
|
Represents the unamortized discount on the Senior Unsecured Notes of
$12.2 million
in aggregate and unamortized discount of
$1.9 million
in aggregate primarily resulting from the assumption of property-level debt in connection with business combinations completed in prior years.
|
|
W. P. Carey 9/30/2018 10-Q
–
36
|
|
RSA and RSU Awards
|
|
PSU Awards
|
||||||||||
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value |
||||||
Nonvested at January 1, 2018
|
324,339
|
|
|
$
|
61.43
|
|
|
281,299
|
|
|
$
|
74.57
|
|
Granted
(a)
|
137,519
|
|
|
64.50
|
|
|
75,864
|
|
|
75.81
|
|
||
Vested
(b)
|
(179,412
|
)
|
|
62.22
|
|
|
(66,632
|
)
|
|
76.96
|
|
||
Forfeited
|
(3,079
|
)
|
|
61.71
|
|
|
(3,098
|
)
|
|
76.49
|
|
||
Adjustment
(c)
|
—
|
|
|
—
|
|
|
40,308
|
|
|
75.11
|
|
||
Nonvested at September 30, 2018
(d)
|
279,367
|
|
|
$
|
62.43
|
|
|
327,741
|
|
|
$
|
78.99
|
|
(a)
|
The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a one-for-one basis. The grant date fair value of PSUs was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the
three
-year performance period and (ii) future financial performance projections. To estimate the fair value of PSUs granted during the
nine months ended
September 30, 2018
, we used a risk-free interest rate of
2.2%
, an expected volatility rate of
17.2%
, and assumed a dividend yield of
zero
.
|
(b)
|
The grant date fair value of shares vested during the
nine months ended
September 30, 2018
was
$16.3 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
September 30, 2018
and
December 31, 2017
, we had an obligation to issue
873,671
and
1,140,632
shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of
$36.2 million
and
$46.7 million
, respectively.
|
(c)
|
Vesting and payment of the PSUs is conditioned upon certain company and/or 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. As a result, we recorded adjustments at
September 30, 2018
to reflect the number of shares expected to be issued when the PSUs vest.
|
(d)
|
At
September 30, 2018
, total unrecognized compensation expense related to these awards was approximately
$21.4 million
, with an aggregate weighted-average remaining term of
1.9 years
.
|
|
W. P. Carey 9/30/2018 10-Q
–
37
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to W. P. Carey
|
$
|
77,348
|
|
|
$
|
80,278
|
|
|
$
|
218,303
|
|
|
$
|
202,080
|
|
Net income attributable to nonvested participating RSUs and RSAs
|
(99
|
)
|
|
(239
|
)
|
|
(279
|
)
|
|
(600
|
)
|
||||
Net income — basic and diluted
|
$
|
77,249
|
|
|
$
|
80,039
|
|
|
$
|
218,024
|
|
|
$
|
201,480
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding — basic
|
108,073,969
|
|
|
108,019,292
|
|
|
108,063,826
|
|
|
107,751,672
|
|
||||
Effect of dilutive securities
|
209,697
|
|
|
124,402
|
|
|
190,015
|
|
|
195,818
|
|
||||
Weighted-average shares outstanding — diluted
|
108,283,666
|
|
|
108,143,694
|
|
|
108,253,841
|
|
|
107,947,490
|
|
|
W. P. Carey 9/30/2018 10-Q
–
38
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
|
Gains and (Losses) on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and (Losses) on Investments
|
|
Total
|
||||||||
Beginning balance
|
$
|
14,858
|
|
|
$
|
(262,469
|
)
|
|
$
|
209
|
|
|
$
|
(247,402
|
)
|
Other comprehensive loss before reclassifications
|
3,195
|
|
|
(8,102
|
)
|
|
(269
|
)
|
|
(5,176
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
|
|
|
||||||||
Other gains and (losses)
|
(2,433
|
)
|
|
—
|
|
|
—
|
|
|
(2,433
|
)
|
||||
Interest expense
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Total
|
(2,423
|
)
|
|
—
|
|
|
—
|
|
|
(2,423
|
)
|
||||
Net current period other comprehensive loss
|
772
|
|
|
(8,102
|
)
|
|
(269
|
)
|
|
(7,599
|
)
|
||||
Net current period other comprehensive loss attributable to noncontrolling interests
|
1
|
|
|
945
|
|
|
—
|
|
|
946
|
|
||||
Ending balance
|
$
|
15,631
|
|
|
$
|
(269,626
|
)
|
|
$
|
(60
|
)
|
|
$
|
(254,055
|
)
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
Gains and (Losses) on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and (Losses) on Investments
|
|
Total
|
||||||||
Beginning balance
|
$
|
24,636
|
|
|
$
|
(267,868
|
)
|
|
$
|
(416
|
)
|
|
$
|
(243,648
|
)
|
Other comprehensive income before reclassifications
|
(8,367
|
)
|
|
25,417
|
|
|
66
|
|
|
17,116
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
|
|
|
||||||||
Gain on sale of real estate, net of tax (
Note 15
)
|
—
|
|
|
3,562
|
|
|
—
|
|
|
3,562
|
|
||||
Other gains and (losses)
|
(2,189
|
)
|
|
—
|
|
|
—
|
|
|
(2,189
|
)
|
||||
Interest expense
|
286
|
|
|
—
|
|
|
—
|
|
|
286
|
|
||||
Total
|
(1,903
|
)
|
|
3,562
|
|
|
—
|
|
|
1,659
|
|
||||
Net current period other comprehensive income
|
(10,270
|
)
|
|
28,979
|
|
|
66
|
|
|
18,775
|
|
||||
Net current period other comprehensive gain attributable to noncontrolling interests
|
8
|
|
|
(4,716
|
)
|
|
—
|
|
|
(4,708
|
)
|
||||
Ending balance
|
$
|
14,374
|
|
|
$
|
(243,605
|
)
|
|
$
|
(350
|
)
|
|
$
|
(229,581
|
)
|
|
W. P. Carey 9/30/2018 10-Q
–
39
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
|
Gains and (Losses) on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and (Losses) on Investments
|
|
Total
|
||||||||
Beginning balance
|
$
|
9,172
|
|
|
$
|
(245,022
|
)
|
|
$
|
(161
|
)
|
|
$
|
(236,011
|
)
|
Other comprehensive loss before reclassifications
|
12,003
|
|
|
(29,401
|
)
|
|
101
|
|
|
(17,297
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
|
|
|
||||||||
Other gains and (losses)
|
(5,811
|
)
|
|
—
|
|
|
—
|
|
|
(5,811
|
)
|
||||
Interest expense
|
261
|
|
|
—
|
|
|
—
|
|
|
261
|
|
||||
Total
|
(5,550
|
)
|
|
—
|
|
|
—
|
|
|
(5,550
|
)
|
||||
Net current period other comprehensive loss
|
6,453
|
|
|
(29,401
|
)
|
|
101
|
|
|
(22,847
|
)
|
||||
Net current period other comprehensive loss attributable to noncontrolling interests
|
6
|
|
|
4,797
|
|
|
—
|
|
|
4,803
|
|
||||
Ending balance
|
$
|
15,631
|
|
|
$
|
(269,626
|
)
|
|
$
|
(60
|
)
|
|
$
|
(254,055
|
)
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
Gains and (Losses) on Derivative Instruments
|
|
Foreign Currency Translation Adjustments
|
|
Gains and (Losses) on Investments
|
|
Total
|
||||||||
Beginning balance
|
$
|
46,935
|
|
|
$
|
(301,330
|
)
|
|
$
|
(90
|
)
|
|
$
|
(254,485
|
)
|
Other comprehensive income before reclassifications
|
(25,108
|
)
|
|
68,124
|
|
|
(260
|
)
|
|
42,756
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
|
|
|
||||||||
Gain on sale of real estate, net of tax (
Note 15
)
|
—
|
|
|
3,562
|
|
|
—
|
|
|
3,562
|
|
||||
Other gains and (losses)
|
(8,490
|
)
|
|
—
|
|
|
—
|
|
|
(8,490
|
)
|
||||
Interest expense
|
1,024
|
|
|
—
|
|
|
—
|
|
|
1,024
|
|
||||
Total
|
(7,466
|
)
|
|
3,562
|
|
|
—
|
|
|
(3,904
|
)
|
||||
Net current period other comprehensive income
|
(32,574
|
)
|
|
71,686
|
|
|
(260
|
)
|
|
38,852
|
|
||||
Net current period other comprehensive gain attributable to noncontrolling interests
|
13
|
|
|
(13,961
|
)
|
|
—
|
|
|
(13,948
|
)
|
||||
Ending balance
|
$
|
14,374
|
|
|
$
|
(243,605
|
)
|
|
$
|
(350
|
)
|
|
$
|
(229,581
|
)
|
|
W. P. Carey 9/30/2018 10-Q
–
40
|
|
W. P. Carey 9/30/2018 10-Q
–
41
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Lease revenues
|
$
|
167,088
|
|
|
$
|
161,511
|
|
|
$
|
492,935
|
|
|
$
|
475,547
|
|
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
17,931
|
|
|
15,940
|
|
||||
Operating property revenues
(a)
|
4,282
|
|
|
8,449
|
|
|
16,365
|
|
|
23,652
|
|
||||
Lease termination income and other
|
1,981
|
|
|
1,227
|
|
|
3,603
|
|
|
4,234
|
|
||||
|
179,330
|
|
|
176,584
|
|
|
530,834
|
|
|
519,373
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
66,837
|
|
|
62,970
|
|
|
195,131
|
|
|
186,481
|
|
||||
General and administrative
|
11,349
|
|
|
11,234
|
|
|
34,013
|
|
|
27,311
|
|
||||
Property expenses, excluding reimbursable tenant costs
|
7,953
|
|
|
10,556
|
|
|
26,760
|
|
|
31,196
|
|
||||
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
17,931
|
|
|
15,940
|
|
||||
Merger and other expenses
|
1,673
|
|
|
65
|
|
|
4,328
|
|
|
1,138
|
|
||||
Stock-based compensation expense
|
1,380
|
|
|
1,880
|
|
|
7,676
|
|
|
4,733
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
4,790
|
|
|
—
|
|
||||
|
95,171
|
|
|
92,102
|
|
|
290,629
|
|
|
266,799
|
|
||||
Other Income and Expenses
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(41,740
|
)
|
|
(41,182
|
)
|
|
(121,125
|
)
|
|
(125,374
|
)
|
||||
Equity in earnings of equity method investments in real estate
|
4,699
|
|
|
3,740
|
|
|
11,586
|
|
|
9,533
|
|
||||
Other gains and (losses)
|
8,197
|
|
|
(4,918
|
)
|
|
14,940
|
|
|
(6,249
|
)
|
||||
|
(28,844
|
)
|
|
(42,360
|
)
|
|
(94,599
|
)
|
|
(122,090
|
)
|
||||
Income before income taxes and gain on sale of real estate
|
55,315
|
|
|
42,122
|
|
|
145,606
|
|
|
130,484
|
|
||||
(Provision for) benefit from income taxes
|
(424
|
)
|
|
(1,511
|
)
|
|
1,792
|
|
|
(6,696
|
)
|
||||
Income before gain on sale of real estate
|
54,891
|
|
|
40,611
|
|
|
147,398
|
|
|
123,788
|
|
||||
Gain on sale of real estate, net of tax
|
343
|
|
|
19,257
|
|
|
18,987
|
|
|
22,732
|
|
||||
Net Income from Real Estate
|
55,234
|
|
|
59,868
|
|
|
166,385
|
|
|
146,520
|
|
||||
Net income attributable to noncontrolling interests
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
||||
Net Income from Real Estate Attributable to W. P. Carey
|
$
|
51,009
|
|
|
$
|
56,492
|
|
|
$
|
155,625
|
|
|
$
|
137,990
|
|
(a)
|
Operating property revenues are comprised of (i)
$4.2 million
for the
three months ended September 30, 2017
, and
$4.8 million
and
$12.4 million
for the
nine months ended September 30, 2018
and
2017
, respectively, generated from a hotel in Memphis, Tennessee, which was sold in April 2018 (
Note 15
), and (ii)
$4.3 million
for both the
three months ended September 30, 2018
and
2017
, and
$11.5 million
and
$11.2 million
for the
nine months ended September 30, 2018
and
2017
, respectively, generated from a hotel in Bloomington, Minnesota.
|
|
W. P. Carey 9/30/2018 10-Q
–
42
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Asset management revenue
|
$
|
17,349
|
|
|
$
|
17,938
|
|
|
$
|
51,602
|
|
|
$
|
53,271
|
|
Structuring revenue
|
6,553
|
|
|
9,817
|
|
|
12,718
|
|
|
27,981
|
|
||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
16,883
|
|
|
45,390
|
|
||||
Other advisory revenue
|
110
|
|
|
99
|
|
|
300
|
|
|
896
|
|
||||
Dealer manager fees
|
—
|
|
|
105
|
|
|
—
|
|
|
4,430
|
|
||||
|
30,054
|
|
|
34,170
|
|
|
81,503
|
|
|
131,968
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
16,883
|
|
|
45,390
|
|
||||
General and administrative
|
4,514
|
|
|
6,002
|
|
|
16,875
|
|
|
25,878
|
|
||||
Subadvisor fees
|
3,127
|
|
|
5,206
|
|
|
7,014
|
|
|
11,598
|
|
||||
Stock-based compensation expense
|
1,095
|
|
|
2,755
|
|
|
6,716
|
|
|
9,916
|
|
||||
Depreciation and amortization
|
988
|
|
|
1,070
|
|
|
2,988
|
|
|
2,838
|
|
||||
Restructuring and other compensation
|
—
|
|
|
1,356
|
|
|
—
|
|
|
9,074
|
|
||||
Dealer manager fees and expenses
|
—
|
|
|
462
|
|
|
—
|
|
|
6,544
|
|
||||
|
15,766
|
|
|
23,062
|
|
|
50,476
|
|
|
111,238
|
|
||||
Other Income and Expenses
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of equity method investments in the Managed Programs
|
13,664
|
|
|
12,578
|
|
|
34,660
|
|
|
38,287
|
|
||||
Other gains and (losses)
|
678
|
|
|
349
|
|
|
1,758
|
|
|
1,280
|
|
||||
|
14,342
|
|
|
12,927
|
|
|
36,418
|
|
|
39,567
|
|
||||
Income before income taxes
|
28,630
|
|
|
24,035
|
|
|
67,445
|
|
|
60,297
|
|
||||
(Provision for) benefit from income taxes
|
(2,291
|
)
|
|
(249
|
)
|
|
(4,767
|
)
|
|
3,793
|
|
||||
Net Income from Investment Management Attributable to W. P. Carey
|
$
|
26,339
|
|
|
$
|
23,786
|
|
|
$
|
62,678
|
|
|
$
|
64,090
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
$
|
209,384
|
|
|
$
|
210,754
|
|
|
$
|
612,337
|
|
|
$
|
651,341
|
|
Operating expenses
|
110,937
|
|
|
115,164
|
|
|
341,105
|
|
|
378,037
|
|
||||
Other income and (expenses)
|
(14,502
|
)
|
|
(29,433
|
)
|
|
(58,181
|
)
|
|
(82,523
|
)
|
||||
Provision for income taxes
|
(2,715
|
)
|
|
(1,760
|
)
|
|
(2,975
|
)
|
|
(2,903
|
)
|
||||
Gain on sale of real estate, net of tax
|
343
|
|
|
19,257
|
|
|
18,987
|
|
|
22,732
|
|
||||
Net income attributable to noncontrolling interests
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
||||
Net income attributable to W. P. Carey
|
$
|
77,348
|
|
|
$
|
80,278
|
|
|
$
|
218,303
|
|
|
$
|
202,080
|
|
|
Total Assets at
|
||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||
Real Estate
|
$
|
8,148,350
|
|
|
$
|
7,885,751
|
|
Investment Management
|
370,638
|
|
|
345,651
|
|
||
Total Company
|
$
|
8,518,988
|
|
|
$
|
8,231,402
|
|
|
W. P. Carey 9/30/2018 10-Q
–
43
|
|
W. P. Carey 9/30/2018 10-Q
–
44
|
•
|
We acquired eight investments totaling
$617.1 million
, including a property valued at
$85.5 million
that was acquired in exchange for
23
properties leased to the same tenant in a nonmonetary transaction (
Note 4
).
|
•
|
We completed seven construction projects at a cost totaling
$74.8 million
, including capitalized interest. Construction projects include build-to-suit, expansion, and renovation projects (
Note 4
).
|
•
|
We committed to fund an aggregate of
$19.9 million
(based on the exchange rate of the euro at
September 30, 2018
) for an expansion project at a warehouse facility in Rotterdam, the Netherlands. We currently expect to complete the project in the third quarter of 2019 (
Note 4
).
|
|
W. P. Carey 9/30/2018 10-Q
–
45
|
•
|
As part of our active capital recycling program, we sold
ten
properties for total proceeds of
$95.1 million
, net of selling costs, including the sale of
one
of our
two
hotel operating properties in April 2018 (
Note 15
).
|
•
|
We completed a nonmonetary transaction, in which we disposed of
23
properties in exchange for the acquisition of
one
property leased to the same tenant, as described above. This swap was recorded based on the fair value of the property acquired of
$85.5 million
(
Note 15
).
|
•
|
On
March 6, 2018
, we completed a public offering of
€500.0 million
of 2.125% Senior Notes due 2027, at a price of
99.324%
of par value, issued by our wholly owned subsidiary, WPC Eurobond B.V., which are guaranteed by us. These 2.125% Senior Notes due 2027 have a
nine
-year term and are scheduled to mature on
April 15, 2027
(
Note 10
).
|
•
|
On March 7, 2018, we repaid and terminated our Unsecured Term Loans in full for €325.0 million (equivalent to $403.6 million), using a portion of the proceeds from the issuance of the 2.125% Senior Notes due 2027. The aggregate principal amount (of revolving and term loans) available under the Credit Agreement may be increased up to an amount not to exceed the U.S. dollar equivalent of
$2.35 billion
(
Note 10
).
|
•
|
We reduced our mortgage debt outstanding by prepaying or repaying at maturity a total of
$187.5 million
of non-recourse mortgage loans (
Note 10
). As a result of paying off certain non-recourse mortgage loans since January 1, 2017, the weighted-average interest rate of our debt decreased from
3.6%
during the
nine months ended September 30, 2017
to
3.4%
during the
nine months ended September 30, 2018
(
Note 10
).
|
•
|
CPA:18 – Global: We structured
seven
new investments in student housing development projects for
$243.8 million
. Approximately
$173.6 million
was invested in Europe and
$70.2 million
was invested in the United States.
|
•
|
CPA:17 – Global: We structured one investment in a portfolio of domestic self-storage properties for
$57.4 million
.
|
|
W. P. Carey 9/30/2018 10-Q
–
46
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues from Real Estate
|
$
|
179,330
|
|
|
$
|
176,584
|
|
|
$
|
530,834
|
|
|
$
|
519,373
|
|
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
17,931
|
|
|
15,940
|
|
||||
Revenues from Real Estate (excluding reimbursable tenant costs)
|
173,351
|
|
|
171,187
|
|
|
512,903
|
|
|
503,433
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Revenues from Investment Management
|
30,054
|
|
|
34,170
|
|
|
81,503
|
|
|
131,968
|
|
||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
16,883
|
|
|
45,390
|
|
||||
Revenues from Investment Management (excluding reimbursable costs from affiliates)
|
24,012
|
|
|
27,959
|
|
|
64,620
|
|
|
86,578
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
209,384
|
|
|
210,754
|
|
|
612,337
|
|
|
651,341
|
|
||||
Total reimbursable costs
|
12,021
|
|
|
11,608
|
|
|
34,814
|
|
|
61,330
|
|
||||
Total revenues (excluding reimbursable costs)
|
197,363
|
|
|
199,146
|
|
|
577,523
|
|
|
590,011
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income from Real Estate attributable to W. P. Carey
|
51,009
|
|
|
56,492
|
|
|
155,625
|
|
|
137,990
|
|
||||
Net income from Investment Management attributable to W. P. Carey
|
26,339
|
|
|
23,786
|
|
|
62,678
|
|
|
64,090
|
|
||||
Net income attributable to W. P. Carey
|
77,348
|
|
|
80,278
|
|
|
218,303
|
|
|
202,080
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends paid
|
110,360
|
|
|
108,272
|
|
|
329,552
|
|
|
322,389
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
(a)
|
|
|
|
|
369,759
|
|
|
385,966
|
|
||||||
Net cash (used in) provided by investing activities
(a)
|
|
|
|
|
(461,544
|
)
|
|
165,792
|
|
||||||
Net cash provided by (used in) financing activities
(a)
|
|
|
|
|
104,862
|
|
|
(551,342
|
)
|
||||||
|
|
|
|
|
|
|
|
||||||||
Supplemental financial measures
(b)
:
|
|
|
|
|
|
|
|
||||||||
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate
|
121,169
|
|
|
116,337
|
|
|
352,565
|
|
|
345,529
|
|
||||
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management
|
38,588
|
|
|
31,905
|
|
|
88,161
|
|
|
85,388
|
|
||||
Adjusted funds from operations attributable to W. P. Carey (AFFO)
|
159,757
|
|
|
148,242
|
|
|
440,726
|
|
|
430,917
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average shares outstanding
|
108,283,666
|
|
|
108,143,694
|
|
|
108,253,841
|
|
|
107,947,490
|
|
(a)
|
On January 1, 2018, we adopted ASU 2016-15 and ASU 2016-18, which revised how certain items are presented in the consolidated statements of cash flows. As a result of adopting this guidance, we retrospectively revised Net cash provided by operating activities, Net cash (used in) provided by investing activities, and Net cash used in financing activities within our consolidated statements of cash flows for the
nine months ended September 30, 2017
, as described in
Note 2
.
|
(b)
|
We consider AFFO, a supplemental measure that is not defined by GAAP, referred to as a non-GAAP measure, to be an important measure in the evaluation of our operating performance. 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 9/30/2018 10-Q
–
47
|
|
W. P. Carey 9/30/2018 10-Q
–
48
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Number of net-leased properties
|
913
|
|
|
887
|
|
||
Number of operating properties
(a)
|
1
|
|
|
2
|
|
||
Number of tenants (net-leased properties)
|
210
|
|
|
210
|
|
||
Total square footage (net-leased properties, in thousands)
|
89,304
|
|
|
84,899
|
|
||
Occupancy (net-leased properties)
|
98.7
|
%
|
|
99.8
|
%
|
||
Weighted-average lease term (net-leased properties, in years)
|
10.2
|
|
|
9.6
|
|
||
Number of countries
|
19
|
|
|
17
|
|
||
Total assets (consolidated basis, in thousands)
|
$
|
8,518,988
|
|
|
$
|
8,231,402
|
|
Net investments in real estate (consolidated basis, in thousands)
|
6,946,494
|
|
|
6,703,715
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Financing obtained (in millions)
(b) (c)
|
$
|
620.6
|
|
|
$
|
633.4
|
|
Acquisition volume (in millions)
(c) (d)
|
617.1
|
|
|
6.0
|
|
||
Construction projects completed (in millions)
(c) (e)
|
74.8
|
|
|
59.0
|
|
||
Average U.S. dollar/euro exchange rate
|
1.1947
|
|
|
1.1130
|
|
||
Average U.S. dollar/British pound sterling exchange rate
|
1.3519
|
|
|
1.2751
|
|
||
Change in the U.S. CPI
(f)
|
2.4
|
%
|
|
2.2
|
%
|
||
Change in the Germany CPI
(f)
|
1.4
|
%
|
|
0.7
|
%
|
||
Change in the United Kingdom CPI
(f)
|
1.5
|
%
|
|
2.1
|
%
|
||
Change in the Spain CPI
(f)
|
0.8
|
%
|
|
(0.3
|
)%
|
||
Change in the Netherlands CPI
(f)
|
1.9
|
%
|
|
1.3
|
%
|
(a)
|
At
September 30, 2018
and
December 31, 2017
, operating properties consisted of one and two hotel properties, respectively, with an average occupancy of
76.8%
for the
nine months ended
September 30, 2018
. We sold one of the hotels in April 2018.
|
(b)
|
Amount for the
nine months ended September 30, 2018
includes the issuance of €500.0 million of 2.125% Senior Notes due 2027 in March 2018. Amount for the
nine months ended September 30, 2017
includes the issuance of €500.0 million of 2.25% Senior Notes due 2024 in January 2017 and the amendment and restatement of our Senior Unsecured Credit Facility in February 2017, which increased our borrowing capacity by approximately $100.0 million (
Note 10
). Dollar amounts are based on the exchange rate of the euro on the dates of activity, as applicable.
|
(c)
|
Amounts are the same on both a consolidated and pro rata basis.
|
(d)
|
Amount for the
nine months ended September 30, 2018
includes a property valued at
$85.5 million
that was acquired in exchange for
23
properties leased to the same tenant in a nonmonetary transaction (
Note 4
). Amount for the
nine months ended September 30, 2017
excludes a commitment for $3.6 million of building improvements in connection with an acquisition. This construction project was completed in June 2018 (
Note 4
).
|
(e)
|
Amount for the
nine months ended September 30, 2017
includes projects that were partially completed in 2016.
|
(f)
|
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 9/30/2018 10-Q
–
49
|
Tenant/Lease Guarantor
|
|
Description
|
|
Number of Properties
|
|
ABR
|
|
ABR Percent
|
|
Weighted-Average Lease Term (Years)
|
|||||
Hellweg Die Profi-Baumärkte GmbH & Co. KG
(a) (b)
|
|
Do-it-yourself retail properties in Germany
|
|
53
|
|
|
$
|
35,390
|
|
|
5.0
|
%
|
|
18.4
|
|
U-Haul Moving Partners Inc. and Mercury Partners, LP
|
|
Net lease self-storage properties in the U.S.
|
|
78
|
|
|
31,853
|
|
|
4.5
|
%
|
|
5.6
|
|
|
State of Andalucia
(a)
|
|
Government office properties in Spain
|
|
70
|
|
|
28,599
|
|
|
4.0
|
%
|
|
16.2
|
|
|
Pendragon PLC
(a)
|
|
Automotive dealerships in the United Kingdom
|
|
70
|
|
|
21,490
|
|
|
3.0
|
%
|
|
11.6
|
|
|
Marriott Corporation
|
|
Net lease hotel properties in the U.S.
|
|
18
|
|
|
20,065
|
|
|
2.8
|
%
|
|
5.1
|
|
|
Forterra, Inc.
(a) (c)
|
|
Industrial properties in the U.S. and Canada
|
|
27
|
|
|
18,032
|
|
|
2.5
|
%
|
|
24.7
|
|
|
Nord Anglia Education, Inc.
|
|
K-12 private schools in the U.S.
|
|
3
|
|
|
16,633
|
|
|
2.3
|
%
|
|
23.9
|
|
|
OBI Group
(a)
|
|
Do-it-yourself retail properties in Poland
|
|
18
|
|
|
16,174
|
|
|
2.3
|
%
|
|
5.6
|
|
|
True Value Company
|
|
Distribution facilities in the U.S.
|
|
7
|
|
|
15,993
|
|
|
2.3
|
%
|
|
4.3
|
|
|
UTI Holdings, Inc.
|
|
Automotive technical training facilities in the U.S.
|
|
5
|
|
|
14,628
|
|
|
2.0
|
%
|
|
5.5
|
|
|
Total
|
|
|
|
349
|
|
|
$
|
218,857
|
|
|
30.7
|
%
|
|
12.5
|
|
(a)
|
ABR amounts are subject to fluctuations in foreign currency exchange rates.
|
(b)
|
At
September 30, 2018
,
nine
properties leased to this tenant with total ABR of $7.8 million were classified as held for sale (
Note 4
).
|
(c)
|
Of the
27
properties leased to Forterra, Inc.,
25
are located in the United States and
two
are located in Canada.
|
|
W. P. Carey 9/30/2018 10-Q
–
50
|
Region
|
|
ABR
|
|
ABR Percent
|
|
Square Footage
(a)
|
|
Square Footage Percent
|
|||||
United States
|
|
|
|
|
|
|
|
|
|||||
South
|
|
|
|
|
|
|
|
|
|||||
Texas
|
|
$
|
57,876
|
|
|
8.1
|
%
|
|
7,702
|
|
|
8.6
|
%
|
Florida
|
|
29,912
|
|
|
4.2
|
%
|
|
2,639
|
|
|
3.0
|
%
|
|
Georgia
|
|
21,388
|
|
|
3.0
|
%
|
|
3,210
|
|
|
3.6
|
%
|
|
Tennessee
|
|
13,229
|
|
|
1.9
|
%
|
|
1,983
|
|
|
2.2
|
%
|
|
Alabama
|
|
10,135
|
|
|
1.4
|
%
|
|
1,920
|
|
|
2.2
|
%
|
|
Other
(b)
|
|
5,888
|
|
|
0.8
|
%
|
|
1,096
|
|
|
1.2
|
%
|
|
Total South
|
|
138,428
|
|
|
19.4
|
%
|
|
18,550
|
|
|
20.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
East
|
|
|
|
|
|
|
|
|
|||||
Massachusetts
|
|
20,606
|
|
|
2.9
|
%
|
|
1,390
|
|
|
1.6
|
%
|
|
North Carolina
|
|
19,119
|
|
|
2.7
|
%
|
|
4,517
|
|
|
5.1
|
%
|
|
New Jersey
|
|
19,023
|
|
|
2.7
|
%
|
|
1,097
|
|
|
1.2
|
%
|
|
New York
|
|
18,603
|
|
|
2.6
|
%
|
|
1,178
|
|
|
1.3
|
%
|
|
Pennsylvania
|
|
15,433
|
|
|
2.1
|
%
|
|
2,525
|
|
|
2.8
|
%
|
|
Virginia
|
|
7,678
|
|
|
1.1
|
%
|
|
1,025
|
|
|
1.1
|
%
|
|
Other
(b)
|
|
25,180
|
|
|
3.5
|
%
|
|
4,916
|
|
|
5.5
|
%
|
|
Total East
|
|
125,642
|
|
|
17.6
|
%
|
|
16,648
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
West
|
|
|
|
|
|
|
|
|
|||||
California
|
|
41,998
|
|
|
5.9
|
%
|
|
3,187
|
|
|
3.6
|
%
|
|
Arizona
|
|
27,054
|
|
|
3.8
|
%
|
|
3,049
|
|
|
3.4
|
%
|
|
Colorado
|
|
10,012
|
|
|
1.4
|
%
|
|
864
|
|
|
1.0
|
%
|
|
Other
(b)
|
|
27,063
|
|
|
3.7
|
%
|
|
3,225
|
|
|
3.6
|
%
|
|
Total West
|
|
106,127
|
|
|
14.8
|
%
|
|
10,325
|
|
|
11.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Midwest
|
|
|
|
|
|
|
|
|
|||||
Illinois
|
|
21,424
|
|
|
3.0
|
%
|
|
3,111
|
|
|
3.5
|
%
|
|
Michigan
|
|
12,288
|
|
|
1.7
|
%
|
|
1,456
|
|
|
1.6
|
%
|
|
Indiana
|
|
9,785
|
|
|
1.4
|
%
|
|
1,493
|
|
|
1.7
|
%
|
|
Wisconsin
|
|
9,719
|
|
|
1.4
|
%
|
|
1,750
|
|
|
2.0
|
%
|
|
Minnesota
|
|
9,098
|
|
|
1.3
|
%
|
|
904
|
|
|
1.0
|
%
|
|
Ohio
|
|
8,285
|
|
|
1.1
|
%
|
|
1,822
|
|
|
2.0
|
%
|
|
Other
(b)
|
|
19,885
|
|
|
2.8
|
%
|
|
3,525
|
|
|
3.9
|
%
|
|
Total Midwest
|
|
90,484
|
|
|
12.7
|
%
|
|
14,061
|
|
|
15.7
|
%
|
|
United States Total
|
|
460,681
|
|
|
64.5
|
%
|
|
59,584
|
|
|
66.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
International
|
|
|
|
|
|
|
|
|
|||||
Germany
|
|
56,923
|
|
|
8.0
|
%
|
|
5,751
|
|
|
6.5
|
%
|
|
United Kingdom
|
|
33,264
|
|
|
4.7
|
%
|
|
2,324
|
|
|
2.6
|
%
|
|
Spain
|
|
30,346
|
|
|
4.2
|
%
|
|
2,927
|
|
|
3.3
|
%
|
|
The Netherlands
|
|
29,189
|
|
|
4.1
|
%
|
|
4,098
|
|
|
4.6
|
%
|
|
Poland
|
|
20,089
|
|
|
2.8
|
%
|
|
2,625
|
|
|
2.9
|
%
|
|
France
|
|
14,529
|
|
|
2.0
|
%
|
|
1,266
|
|
|
1.4
|
%
|
|
Denmark
|
|
12,242
|
|
|
1.7
|
%
|
|
1,987
|
|
|
2.2
|
%
|
|
Finland
|
|
11,605
|
|
|
1.6
|
%
|
|
949
|
|
|
1.1
|
%
|
|
Canada
|
|
11,119
|
|
|
1.6
|
%
|
|
1,817
|
|
|
2.0
|
%
|
|
Australia
|
|
10,629
|
|
|
1.5
|
%
|
|
3,183
|
|
|
3.6
|
%
|
|
Other
(c)
|
|
23,228
|
|
|
3.3
|
%
|
|
2,793
|
|
|
3.1
|
%
|
|
International Total
|
|
253,163
|
|
|
35.5
|
%
|
|
29,720
|
|
|
33.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
$
|
713,844
|
|
|
100.0
|
%
|
|
89,304
|
|
|
100.0
|
%
|
|
W. P. Carey 9/30/2018 10-Q
–
51
|
Property Type
|
|
ABR
|
|
ABR Percent
|
|
Square Footage
(a)
|
|
Square Footage Percent
|
|||||
Industrial
|
|
$
|
199,101
|
|
|
27.9
|
%
|
|
37,460
|
|
|
41.9
|
%
|
Office
|
|
163,971
|
|
|
23.0
|
%
|
|
10,814
|
|
|
12.1
|
%
|
|
Retail
(d)
|
|
123,165
|
|
|
17.3
|
%
|
|
11,423
|
|
|
12.8
|
%
|
|
Warehouse
|
|
115,247
|
|
|
16.1
|
%
|
|
21,337
|
|
|
23.9
|
%
|
|
Education Facility
|
|
32,913
|
|
|
4.6
|
%
|
|
1,997
|
|
|
2.3
|
%
|
|
Other
(e)
|
|
79,447
|
|
|
11.1
|
%
|
|
6,273
|
|
|
7.0
|
%
|
|
Total
|
|
$
|
713,844
|
|
|
100.0
|
%
|
|
89,304
|
|
|
100.0
|
%
|
(a)
|
Includes square footage for any vacant properties.
|
(b)
|
Other properties within South include assets in Louisiana, Arkansas, Mississippi, and Oklahoma. Other properties within East include assets in Connecticut, Kentucky, South Carolina, Maryland, New Hampshire, and West Virginia. Other properties within West include assets in Utah, Washington, Nevada, Oregon, New Mexico, Wyoming, Alaska, and Montana. Other properties within Midwest include assets in Missouri, Kansas, Nebraska, Iowa, South Dakota, and North Dakota.
|
(c)
|
Includes assets in Norway, Hungary, Austria, Mexico, Portugal, Sweden, Belgium, and Japan.
|
(d)
|
Includes automotive dealerships.
|
(e)
|
Includes ABR from tenants within the following property types: self storage (net lease), hotel (net lease), laboratory, theater, fitness facility, and student housing (net lease).
|
|
W. P. Carey 9/30/2018 10-Q
–
52
|
Industry Type
|
|
ABR
|
|
ABR Percent
|
|
Square Footage
|
|
Square Footage Percent
|
|||||
Retail Stores
(a)
|
|
$
|
133,142
|
|
|
18.6
|
%
|
|
16,588
|
|
|
18.6
|
%
|
Consumer Services
|
|
74,675
|
|
|
10.5
|
%
|
|
5,704
|
|
|
6.4
|
%
|
|
Automotive
|
|
55,207
|
|
|
7.7
|
%
|
|
8,767
|
|
|
9.8
|
%
|
|
Sovereign and Public Finance
|
|
41,772
|
|
|
5.8
|
%
|
|
3,364
|
|
|
3.8
|
%
|
|
Cargo Transportation
|
|
41,142
|
|
|
5.8
|
%
|
|
5,847
|
|
|
6.5
|
%
|
|
Construction and Building
|
|
38,549
|
|
|
5.4
|
%
|
|
7,464
|
|
|
8.4
|
%
|
|
Healthcare and Pharmaceuticals
|
|
36,623
|
|
|
5.1
|
%
|
|
2,299
|
|
|
2.6
|
%
|
|
Hotel, Gaming, and Leisure
|
|
35,392
|
|
|
5.0
|
%
|
|
2,254
|
|
|
2.5
|
%
|
|
Beverage, Food, and Tobacco
|
|
29,698
|
|
|
4.2
|
%
|
|
6,787
|
|
|
7.6
|
%
|
|
Containers, Packaging, and Glass
|
|
27,724
|
|
|
3.9
|
%
|
|
5,325
|
|
|
6.0
|
%
|
|
Media: Advertising, Printing, and Publishing
|
|
23,409
|
|
|
3.3
|
%
|
|
1,588
|
|
|
1.8
|
%
|
|
Capital Equipment
|
|
21,156
|
|
|
3.0
|
%
|
|
3,522
|
|
|
3.9
|
%
|
|
High Tech Industries
|
|
20,974
|
|
|
2.9
|
%
|
|
1,880
|
|
|
2.1
|
%
|
|
Grocery
|
|
14,751
|
|
|
2.1
|
%
|
|
1,762
|
|
|
2.0
|
%
|
|
Business Services
|
|
14,185
|
|
|
2.0
|
%
|
|
1,723
|
|
|
1.9
|
%
|
|
Durable Consumer Goods
|
|
13,810
|
|
|
1.9
|
%
|
|
2,833
|
|
|
3.2
|
%
|
|
Aerospace and Defense
|
|
10,828
|
|
|
1.5
|
%
|
|
1,115
|
|
|
1.2
|
%
|
|
Chemicals, Plastics, and Rubber
|
|
10,236
|
|
|
1.4
|
%
|
|
1,273
|
|
|
1.4
|
%
|
|
Banking
|
|
9,920
|
|
|
1.4
|
%
|
|
706
|
|
|
0.8
|
%
|
|
Wholesale
|
|
9,798
|
|
|
1.4
|
%
|
|
1,623
|
|
|
1.8
|
%
|
|
Non-Durable Consumer Goods
|
|
9,323
|
|
|
1.3
|
%
|
|
2,164
|
|
|
2.4
|
%
|
|
Metals and Mining
|
|
8,995
|
|
|
1.3
|
%
|
|
1,341
|
|
|
1.5
|
%
|
|
Oil and Gas
|
|
8,228
|
|
|
1.1
|
%
|
|
333
|
|
|
0.4
|
%
|
|
Insurance
|
|
7,743
|
|
|
1.1
|
%
|
|
401
|
|
|
0.4
|
%
|
|
Telecommunications
|
|
7,155
|
|
|
1.0
|
%
|
|
418
|
|
|
0.5
|
%
|
|
Other
(b)
|
|
9,409
|
|
|
1.3
|
%
|
|
2,223
|
|
|
2.5
|
%
|
|
Total
|
|
$
|
713,844
|
|
|
100.0
|
%
|
|
89,304
|
|
|
100.0
|
%
|
(a)
|
Includes automotive dealerships.
|
(b)
|
Includes ABR from tenants in the following industries: electricity, media: broadcasting and subscription, forest products and paper, and environmental industries. Also includes square footage for vacant properties.
|
|
W. P. Carey 9/30/2018 10-Q
–
53
|
Year of Lease Expiration
(a)
|
|
Number of Leases Expiring
|
|
Number of Tenants with Leases Expiring
|
|
ABR
|
|
ABR Percent
|
|
Square
Footage |
|
Square Footage Percent
|
|||||||
Remaining 2018
|
|
1
|
|
|
1
|
|
|
$
|
458
|
|
|
0.1
|
%
|
|
21
|
|
|
—
|
%
|
2019
|
|
11
|
|
|
9
|
|
|
17,442
|
|
|
2.4
|
%
|
|
1,242
|
|
|
1.4
|
%
|
|
2020
|
|
22
|
|
|
20
|
|
|
23,395
|
|
|
3.3
|
%
|
|
2,348
|
|
|
2.6
|
%
|
|
2021
|
|
74
|
|
|
19
|
|
|
36,546
|
|
|
5.1
|
%
|
|
4,774
|
|
|
5.4
|
%
|
|
2022
|
|
39
|
|
|
27
|
|
|
68,314
|
|
|
9.6
|
%
|
|
8,962
|
|
|
10.0
|
%
|
|
2023
|
|
22
|
|
|
22
|
|
|
44,662
|
|
|
6.3
|
%
|
|
6,065
|
|
|
6.8
|
%
|
|
2024
(b)
|
|
47
|
|
|
28
|
|
|
99,987
|
|
|
14.0
|
%
|
|
12,113
|
|
|
13.6
|
%
|
|
2025
|
|
41
|
|
|
16
|
|
|
30,940
|
|
|
4.3
|
%
|
|
3,439
|
|
|
3.9
|
%
|
|
2026
|
|
19
|
|
|
14
|
|
|
19,165
|
|
|
2.7
|
%
|
|
3,159
|
|
|
3.5
|
%
|
|
2027
|
|
25
|
|
|
18
|
|
|
41,838
|
|
|
5.9
|
%
|
|
5,957
|
|
|
6.7
|
%
|
|
2028
|
|
18
|
|
|
13
|
|
|
24,840
|
|
|
3.5
|
%
|
|
2,785
|
|
|
3.1
|
%
|
|
2029
|
|
21
|
|
|
11
|
|
|
22,516
|
|
|
3.1
|
%
|
|
3,025
|
|
|
3.4
|
%
|
|
2030
|
|
12
|
|
|
10
|
|
|
22,943
|
|
|
3.2
|
%
|
|
2,585
|
|
|
2.9
|
%
|
|
2031
|
|
55
|
|
|
6
|
|
|
35,924
|
|
|
5.0
|
%
|
|
2,980
|
|
|
3.3
|
%
|
|
Thereafter (>2031)
|
|
88
|
|
|
45
|
|
|
224,874
|
|
|
31.5
|
%
|
|
28,655
|
|
|
32.1
|
%
|
|
Vacant
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
1,194
|
|
|
1.3
|
%
|
|
Total
|
|
495
|
|
|
|
|
$
|
713,844
|
|
|
100.0
|
%
|
|
89,304
|
|
|
100.0
|
%
|
(a)
|
Assumes tenants do not exercise any renewal options.
|
(b)
|
Includes ABR of
$12.4 million
from a tenant (The New York Times Company) that in January 2018 exercised its option to repurchase the property that, at September 30, 2018, it was leasing from a jointly owned investment with our affiliate, CPA:17 – Global, in which we had a 45% equity interest and which was consolidated by CPA:17 – Global at that date. Following the completion of the CPA:17 Merger on October 31, 2018 (
Note 17
), we consolidate this wholly owned investment. There can be no assurance that such repurchase will be completed (
Note 7
).
|
|
W. P. Carey 9/30/2018 10-Q
–
54
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
$
|
167,088
|
|
|
$
|
161,511
|
|
|
$
|
5,577
|
|
|
$
|
492,935
|
|
|
$
|
475,547
|
|
|
$
|
17,388
|
|
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
582
|
|
|
17,931
|
|
|
15,940
|
|
|
1,991
|
|
||||||
Operating property revenues
|
4,282
|
|
|
8,449
|
|
|
(4,167
|
)
|
|
16,365
|
|
|
23,652
|
|
|
(7,287
|
)
|
||||||
Lease termination income and other
|
1,981
|
|
|
1,227
|
|
|
754
|
|
|
3,603
|
|
|
4,234
|
|
|
(631
|
)
|
||||||
|
179,330
|
|
|
176,584
|
|
|
2,746
|
|
|
530,834
|
|
|
519,373
|
|
|
11,461
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net-leased properties
|
65,968
|
|
|
61,583
|
|
|
4,385
|
|
|
192,114
|
|
|
182,314
|
|
|
9,800
|
|
||||||
Operating properties
|
546
|
|
|
1,067
|
|
|
(521
|
)
|
|
2,045
|
|
|
3,202
|
|
|
(1,157
|
)
|
||||||
Corporate depreciation and amortization
|
323
|
|
|
320
|
|
|
3
|
|
|
972
|
|
|
965
|
|
|
7
|
|
||||||
|
66,837
|
|
|
62,970
|
|
|
3,867
|
|
|
195,131
|
|
|
186,481
|
|
|
8,650
|
|
||||||
Property expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reimbursable tenant costs
|
5,979
|
|
|
5,397
|
|
|
582
|
|
|
17,931
|
|
|
15,940
|
|
|
1,991
|
|
||||||
Net-leased properties
|
4,898
|
|
|
4,329
|
|
|
569
|
|
|
14,454
|
|
|
13,337
|
|
|
1,117
|
|
||||||
Operating property expenses
|
3,055
|
|
|
6,227
|
|
|
(3,172
|
)
|
|
12,306
|
|
|
17,859
|
|
|
(5,553
|
)
|
||||||
|
13,932
|
|
|
15,953
|
|
|
(2,021
|
)
|
|
44,691
|
|
|
47,136
|
|
|
(2,445
|
)
|
||||||
General and administrative
|
11,349
|
|
|
11,234
|
|
|
115
|
|
|
34,013
|
|
|
27,311
|
|
|
6,702
|
|
||||||
Merger and other expenses
|
1,673
|
|
|
65
|
|
|
1,608
|
|
|
4,328
|
|
|
1,138
|
|
|
3,190
|
|
||||||
Stock-based compensation expense
|
1,380
|
|
|
1,880
|
|
|
(500
|
)
|
|
7,676
|
|
|
4,733
|
|
|
2,943
|
|
||||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
4,790
|
|
|
—
|
|
|
4,790
|
|
||||||
|
95,171
|
|
|
92,102
|
|
|
3,069
|
|
|
290,629
|
|
|
266,799
|
|
|
23,830
|
|
||||||
Other Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
(41,740
|
)
|
|
(41,182
|
)
|
|
(558
|
)
|
|
(121,125
|
)
|
|
(125,374
|
)
|
|
4,249
|
|
||||||
Equity in earnings of equity method investments in real estate
|
4,699
|
|
|
3,740
|
|
|
959
|
|
|
11,586
|
|
|
9,533
|
|
|
2,053
|
|
||||||
Other gains and (losses)
|
8,197
|
|
|
(4,918
|
)
|
|
13,115
|
|
|
14,940
|
|
|
(6,249
|
)
|
|
21,189
|
|
||||||
|
(28,844
|
)
|
|
(42,360
|
)
|
|
13,516
|
|
|
(94,599
|
)
|
|
(122,090
|
)
|
|
27,491
|
|
||||||
Income before income taxes and gain on sale of real estate
|
55,315
|
|
|
42,122
|
|
|
13,193
|
|
|
145,606
|
|
|
130,484
|
|
|
15,122
|
|
||||||
(Provision for) benefit from income taxes
|
(424
|
)
|
|
(1,511
|
)
|
|
1,087
|
|
|
1,792
|
|
|
(6,696
|
)
|
|
8,488
|
|
||||||
Income before gain on sale of real estate
|
54,891
|
|
|
40,611
|
|
|
14,280
|
|
|
147,398
|
|
|
123,788
|
|
|
23,610
|
|
||||||
Gain on sale of real estate, net of tax
|
343
|
|
|
19,257
|
|
|
(18,914
|
)
|
|
18,987
|
|
|
22,732
|
|
|
(3,745
|
)
|
||||||
Net Income from Real Estate
|
55,234
|
|
|
59,868
|
|
|
(4,634
|
)
|
|
166,385
|
|
|
146,520
|
|
|
19,865
|
|
||||||
Net income attributable to noncontrolling interests
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(849
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
|
(2,230
|
)
|
||||||
Net Income from Real Estate Attributable to W. P. Carey
|
$
|
51,009
|
|
|
$
|
56,492
|
|
|
$
|
(5,483
|
)
|
|
$
|
155,625
|
|
|
$
|
137,990
|
|
|
$
|
17,635
|
|
|
W. P. Carey 9/30/2018 10-Q
–
55
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Existing Net-Leased Properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
$
|
152,835
|
|
|
$
|
153,744
|
|
|
$
|
(909
|
)
|
|
$
|
463,810
|
|
|
$
|
451,637
|
|
|
$
|
12,173
|
|
Depreciation and amortization
|
(59,641
|
)
|
|
(58,301
|
)
|
|
(1,340
|
)
|
|
(179,753
|
)
|
|
(172,158
|
)
|
|
(7,595
|
)
|
||||||
Property expenses
|
(4,493
|
)
|
|
(3,596
|
)
|
|
(897
|
)
|
|
(13,256
|
)
|
|
(11,022
|
)
|
|
(2,234
|
)
|
||||||
Property level contribution
|
88,701
|
|
|
91,847
|
|
|
(3,146
|
)
|
|
270,801
|
|
|
268,457
|
|
|
2,344
|
|
||||||
Recently Acquired Net-Leased Properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
11,195
|
|
|
105
|
|
|
11,090
|
|
|
15,365
|
|
|
109
|
|
|
15,256
|
|
||||||
Depreciation and amortization
|
(5,035
|
)
|
|
(47
|
)
|
|
(4,988
|
)
|
|
(6,630
|
)
|
|
(47
|
)
|
|
(6,583
|
)
|
||||||
Property expenses
|
(153
|
)
|
|
(3
|
)
|
|
(150
|
)
|
|
(215
|
)
|
|
(3
|
)
|
|
(212
|
)
|
||||||
Property level contribution
|
6,007
|
|
|
55
|
|
|
5,952
|
|
|
8,520
|
|
|
59
|
|
|
8,461
|
|
||||||
Properties Sold or Held for Sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease revenues
|
3,058
|
|
|
7,662
|
|
|
(4,604
|
)
|
|
13,760
|
|
|
23,801
|
|
|
(10,041
|
)
|
||||||
Operating revenues
|
—
|
|
|
4,188
|
|
|
(4,188
|
)
|
|
4,843
|
|
|
12,414
|
|
|
(7,571
|
)
|
||||||
Depreciation and amortization
|
(1,292
|
)
|
|
(3,877
|
)
|
|
2,585
|
|
|
(6,378
|
)
|
|
(12,027
|
)
|
|
5,649
|
|
||||||
Property expenses
|
(282
|
)
|
|
(3,864
|
)
|
|
3,582
|
|
|
(4,689
|
)
|
|
(11,553
|
)
|
|
6,864
|
|
||||||
Property level contribution
|
1,484
|
|
|
4,109
|
|
|
(2,625
|
)
|
|
7,536
|
|
|
12,635
|
|
|
(5,099
|
)
|
||||||
Operating Property
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
4,282
|
|
|
4,261
|
|
|
21
|
|
|
11,522
|
|
|
11,238
|
|
|
284
|
|
||||||
Depreciation and amortization
|
(546
|
)
|
|
(425
|
)
|
|
(121
|
)
|
|
(1,398
|
)
|
|
(1,284
|
)
|
|
(114
|
)
|
||||||
Property expenses
|
(3,025
|
)
|
|
(3,093
|
)
|
|
68
|
|
|
(8,600
|
)
|
|
(8,618
|
)
|
|
18
|
|
||||||
Property level contribution
|
711
|
|
|
743
|
|
|
(32
|
)
|
|
1,524
|
|
|
1,336
|
|
|
188
|
|
||||||
Property Level Contribution
|
96,903
|
|
|
96,754
|
|
|
149
|
|
|
288,381
|
|
|
282,487
|
|
|
5,894
|
|
||||||
Add: Lease termination income and other
|
1,981
|
|
|
1,227
|
|
|
754
|
|
|
3,603
|
|
|
4,234
|
|
|
(631
|
)
|
||||||
Less other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General and administrative
|
(11,349
|
)
|
|
(11,234
|
)
|
|
(115
|
)
|
|
(34,013
|
)
|
|
(27,311
|
)
|
|
(6,702
|
)
|
||||||
Merger and other expenses
|
(1,673
|
)
|
|
(65
|
)
|
|
(1,608
|
)
|
|
(4,328
|
)
|
|
(1,138
|
)
|
|
(3,190
|
)
|
||||||
Stock-based compensation expense
|
(1,380
|
)
|
|
(1,880
|
)
|
|
500
|
|
|
(7,676
|
)
|
|
(4,733
|
)
|
|
(2,943
|
)
|
||||||
Corporate depreciation and amortization
|
(323
|
)
|
|
(320
|
)
|
|
(3
|
)
|
|
(972
|
)
|
|
(965
|
)
|
|
(7
|
)
|
||||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,790
|
)
|
|
—
|
|
|
(4,790
|
)
|
||||||
Other Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
(41,740
|
)
|
|
(41,182
|
)
|
|
(558
|
)
|
|
(121,125
|
)
|
|
(125,374
|
)
|
|
4,249
|
|
||||||
Equity in earnings of equity method investments in real estate
|
4,699
|
|
|
3,740
|
|
|
959
|
|
|
11,586
|
|
|
9,533
|
|
|
2,053
|
|
||||||
Other gains and (losses)
|
8,197
|
|
|
(4,918
|
)
|
|
13,115
|
|
|
14,940
|
|
|
(6,249
|
)
|
|
21,189
|
|
||||||
|
(28,844
|
)
|
|
(42,360
|
)
|
|
13,516
|
|
|
(94,599
|
)
|
|
(122,090
|
)
|
|
27,491
|
|
||||||
Income before income taxes and gain on sale of real estate
|
55,315
|
|
|
42,122
|
|
|
13,193
|
|
|
145,606
|
|
|
130,484
|
|
|
15,122
|
|
||||||
(Provision for) benefit from income taxes
|
(424
|
)
|
|
(1,511
|
)
|
|
1,087
|
|
|
1,792
|
|
|
(6,696
|
)
|
|
8,488
|
|
||||||
Income before gain on sale of real estate
|
54,891
|
|
|
40,611
|
|
|
14,280
|
|
|
147,398
|
|
|
123,788
|
|
|
23,610
|
|
||||||
Gain on sale of real estate, net of tax
|
343
|
|
|
19,257
|
|
|
(18,914
|
)
|
|
18,987
|
|
|
22,732
|
|
|
(3,745
|
)
|
||||||
Net Income from Real Estate
|
55,234
|
|
|
59,868
|
|
|
(4,634
|
)
|
|
166,385
|
|
|
146,520
|
|
|
19,865
|
|
||||||
Net income attributable to noncontrolling interests
|
(4,225
|
)
|
|
(3,376
|
)
|
|
(849
|
)
|
|
(10,760
|
)
|
|
(8,530
|
)
|
|
(2,230
|
)
|
||||||
Net Income from Real Estate Attributable to W. P. Carey
|
$
|
51,009
|
|
|
$
|
56,492
|
|
|
$
|
(5,483
|
)
|
|
$
|
155,625
|
|
|
$
|
137,990
|
|
|
$
|
17,635
|
|
|
W. P. Carey 9/30/2018 10-Q
–
56
|
|
W. P. Carey 9/30/2018 10-Q
–
57
|
|
W. P. Carey 9/30/2018 10-Q
–
58
|
|
W. P. Carey 9/30/2018 10-Q
–
59
|
|
W. P. Carey 9/30/2018 10-Q
–
60
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Total properties — Managed Programs
|
633
|
|
|
628
|
|
||
Assets under management — Managed Programs
(a)
|
$
|
13,373.7
|
|
|
$
|
13,125.1
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Financings structured — Managed Programs
|
$
|
291.0
|
|
|
$
|
644.8
|
|
Investments structured — Managed Programs
(b)
|
301.2
|
|
|
617.0
|
|
||
Funds raised — CWI 2 offering
(c)
|
—
|
|
|
228.5
|
|
||
Funds raised — CCIF offering
(d)
|
—
|
|
|
70.2
|
|
||
Funds raised — CESH I offering
(e)
|
—
|
|
|
25.2
|
|
(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. Amounts include the estimated fair value of the real estate assets, plus cash, owned by CESH I.
|
(b)
|
Includes acquisition-related costs.
|
(c)
|
Reflects funds raised from CWI 2’s initial public offering, which commenced in February 2015 and closed on July 31, 2017, but excludes distributions to CWI 2’s shareholders that were reinvested in CWI 2’s common stock through its distribution reinvestment plan.
|
(d)
|
Amount represents funding from the CCIF Feeder Funds to CCIF. We began to raise funds on behalf of the CCIF Feeder Funds in the fourth quarter of 2015. One of the CCIF Feeder Funds, CCIF 2016 T, closed its offering on April 28, 2017. In August 2017, we resigned as the advisor to CCIF and our advisory agreement with CCIF was terminated, effective as of September 11, 2017.
|
(e)
|
Reflects funds raised from CESH I’s private placement, which commenced in July 2016 and closed on July 31, 2017.
|
|
W. P. Carey 9/30/2018 10-Q
–
61
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset management revenue
|
$
|
17,349
|
|
|
$
|
17,938
|
|
|
$
|
(589
|
)
|
|
$
|
51,602
|
|
|
$
|
53,271
|
|
|
$
|
(1,669
|
)
|
Structuring revenue
|
6,553
|
|
|
9,817
|
|
|
(3,264
|
)
|
|
12,718
|
|
|
27,981
|
|
|
(15,263
|
)
|
||||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
(169
|
)
|
|
16,883
|
|
|
45,390
|
|
|
(28,507
|
)
|
||||||
Other advisory revenue
|
110
|
|
|
99
|
|
|
11
|
|
|
300
|
|
|
896
|
|
|
(596
|
)
|
||||||
Dealer manager fees
|
—
|
|
|
105
|
|
|
(105
|
)
|
|
—
|
|
|
4,430
|
|
|
(4,430
|
)
|
||||||
|
30,054
|
|
|
34,170
|
|
|
(4,116
|
)
|
|
81,503
|
|
|
131,968
|
|
|
(50,465
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reimbursable costs from affiliates
|
6,042
|
|
|
6,211
|
|
|
(169
|
)
|
|
16,883
|
|
|
45,390
|
|
|
(28,507
|
)
|
||||||
General and administrative
|
4,514
|
|
|
6,002
|
|
|
(1,488
|
)
|
|
16,875
|
|
|
25,878
|
|
|
(9,003
|
)
|
||||||
Subadvisor fees
|
3,127
|
|
|
5,206
|
|
|
(2,079
|
)
|
|
7,014
|
|
|
11,598
|
|
|
(4,584
|
)
|
||||||
Stock-based compensation expense
|
1,095
|
|
|
2,755
|
|
|
(1,660
|
)
|
|
6,716
|
|
|
9,916
|
|
|
(3,200
|
)
|
||||||
Depreciation and amortization
|
988
|
|
|
1,070
|
|
|
(82
|
)
|
|
2,988
|
|
|
2,838
|
|
|
150
|
|
||||||
Restructuring and other compensation
|
—
|
|
|
1,356
|
|
|
(1,356
|
)
|
|
—
|
|
|
9,074
|
|
|
(9,074
|
)
|
||||||
Dealer manager fees and expenses
|
—
|
|
|
462
|
|
|
(462
|
)
|
|
—
|
|
|
6,544
|
|
|
(6,544
|
)
|
||||||
|
15,766
|
|
|
23,062
|
|
|
(7,296
|
)
|
|
50,476
|
|
|
111,238
|
|
|
(60,762
|
)
|
||||||
Other Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of equity method investments in the Managed Programs
|
13,664
|
|
|
12,578
|
|
|
1,086
|
|
|
34,660
|
|
|
38,287
|
|
|
(3,627
|
)
|
||||||
Other gains and (losses)
|
678
|
|
|
349
|
|
|
329
|
|
|
1,758
|
|
|
1,280
|
|
|
478
|
|
||||||
|
14,342
|
|
|
12,927
|
|
|
1,415
|
|
|
36,418
|
|
|
39,567
|
|
|
(3,149
|
)
|
||||||
Income before income taxes
|
28,630
|
|
|
24,035
|
|
|
4,595
|
|
|
67,445
|
|
|
60,297
|
|
|
7,148
|
|
||||||
(Provision for) benefit from income taxes
|
(2,291
|
)
|
|
(249
|
)
|
|
(2,042
|
)
|
|
(4,767
|
)
|
|
3,793
|
|
|
(8,560
|
)
|
||||||
Net Income from Investment Management Attributable to W. P. Carey
|
$
|
26,339
|
|
|
$
|
23,786
|
|
|
$
|
2,553
|
|
|
$
|
62,678
|
|
|
$
|
64,090
|
|
|
$
|
(1,412
|
)
|
|
W. P. Carey 9/30/2018 10-Q
–
62
|
|
W. P. Carey 9/30/2018 10-Q
–
63
|
|
W. P. Carey 9/30/2018 10-Q
–
64
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Equity in earnings of equity method investments in the Managed Programs:
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of equity method investments in the Managed Programs
(a)
|
$
|
529
|
|
|
$
|
531
|
|
|
$
|
2,247
|
|
|
$
|
3,719
|
|
Distributions of Available Cash:
(b)
|
|
|
|
|
|
|
|
||||||||
CPA:17 – Global
(c)
|
7,256
|
|
|
5,459
|
|
|
18,611
|
|
|
19,240
|
|
||||
CPA:18 – Global
|
1,710
|
|
|
2,196
|
|
|
6,445
|
|
|
6,057
|
|
||||
CWI 1
|
2,478
|
|
|
2,498
|
|
|
3,450
|
|
|
5,743
|
|
||||
CWI 2
|
1,691
|
|
|
1,894
|
|
|
3,907
|
|
|
3,528
|
|
||||
Equity in earnings of equity method investments in the Managed Programs
|
$
|
13,664
|
|
|
$
|
12,578
|
|
|
$
|
34,660
|
|
|
$
|
38,287
|
|
(a)
|
Decreases for the three and
nine months ended September 30, 2018
as compared to the same periods in
2017
were primarily due to decreases of
$1.5 million
and
$1.9 million
, respectively, from our investment in shares of common stock of CPA:17 – Global, which recognized significant impairment charges during the current year periods, partially offset by increases of
$1.5 million
and
$1.6 million
, respectively, from our investment in shares of common stock of CPA:18 – Global, which recognized significant gains on sale of real estate during the current year periods. In addition, we recognized equity in earnings of our equity method investment in CCIF of
$0.7 million
during the
nine months ended September 30,
2017
.
|
(b)
|
We are entitled to receive distributions of 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 (
Note 3
). Distributions of Available Cash received and earned from the Managed REITs fluctuate based on the timing of certain events, including acquisitions, dispositions, and weather-related disruption during 2017 (resulting in property damages and loss of revenue).
|
(c)
|
As a result of the completion of the CPA:17 Merger on October 31, 2018 (
Note 17
), we will no longer receive distributions of Available Cash from CPA:17 – Global.
|
|
W. P. Carey 9/30/2018 10-Q
–
65
|
|
W. P. Carey 9/30/2018 10-Q
–
66
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Carrying Value
|
|
|
|
||||
Fixed rate:
|
|
|
|
||||
Senior Unsecured Notes
(a)
|
$
|
3,007,453
|
|
|
$
|
2,474,661
|
|
Non-recourse mortgages
(a)
|
838,889
|
|
|
916,768
|
|
||
|
3,846,342
|
|
|
3,391,429
|
|
||
Variable rate:
|
|
|
|
||||
Unsecured Revolving Credit Facility
|
696,380
|
|
|
216,775
|
|
||
Unsecured Term Loans
(a)
|
—
|
|
|
388,354
|
|
||
Non-recourse mortgages
(a)
:
|
|
|
|
||||
Amount subject to interest rate swaps and cap
|
121,062
|
|
|
149,563
|
|
||
Floating interest rate mortgage loans
|
—
|
|
|
119,146
|
|
||
|
817,442
|
|
|
873,838
|
|
||
|
$
|
4,663,784
|
|
|
$
|
4,265,267
|
|
|
|
|
|
||||
Percent of Total Debt
|
|
|
|
||||
Fixed rate
|
82
|
%
|
|
80
|
%
|
||
Variable rate
|
18
|
%
|
|
20
|
%
|
||
|
100
|
%
|
|
100
|
%
|
||
Weighted-Average Interest Rate at End of Period
|
|
|
|
||||
Fixed rate
|
3.6
|
%
|
|
3.9
|
%
|
||
Variable rate
(b)
|
2.2
|
%
|
|
1.8
|
%
|
(a)
|
Aggregate debt balance includes unamortized deferred financing costs totaling
$17.6 million
and
$15.9 million
as of
September 30, 2018
and
December 31, 2017
, respectively, and unamortized discount totaling
$14.1 million
and
$12.8 million
as of
September 30, 2018
and
December 31, 2017
, respectively.
|
(b)
|
The impact of our derivative instruments is reflected in the weighted-average interest rates.
|
•
|
cash and cash equivalents totaling
$176.6 million
. Of this amount,
$93.4 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 Unsecured Revolving Credit Facility, with unused capacity of
$803.6 million
; and
|
•
|
unleveraged properties that had an aggregate asset carrying value of
$5.1 billion
at
September 30, 2018
, although there can be no assurance that we would be able to obtain financing for these properties.
|
|
W. P. Carey 9/30/2018 10-Q
–
67
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Outstanding Balance
|
|
Maximum Available
|
|
Outstanding Balance
|
|
Maximum Available
|
||||||||
Unsecured Revolving Credit Facility
|
$
|
696,380
|
|
|
$
|
1,500,000
|
|
|
$
|
216,775
|
|
|
$
|
1,500,000
|
|
Unsecured Term Loans, net
(a) (b)
|
—
|
|
|
—
|
|
|
389,773
|
|
|
389,773
|
|
(a)
|
Amounts as of
December 31, 2017
were comprised of our Term Loan of €236.3 million and our Delayed Draw Term Loan of €88.7 million, and reflected the exchange rate of the euro at that date. On March 7, 2018, we repaid and terminated both of our Unsecured Term Loans in full. The aggregate principal amount (of revolving and term loans) available under the Credit Agreement may be increased up to an amount not to exceed the U.S. dollar equivalent of
$2.35 billion
(
Note 10
).
|
(b)
|
Outstanding balance excludes unamortized discount of
$1.2 million
and unamortized deferred financing costs of
$0.2 million
at
December 31, 2017
.
|
|
W. P. Carey 9/30/2018 10-Q
–
68
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Senior Unsecured Notes — principal
(a) (b)
|
$
|
3,036,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
578,800
|
|
|
$
|
2,457,600
|
|
Non-recourse mortgages — principal
(a)
|
962,745
|
|
|
83,314
|
|
|
405,451
|
|
|
357,837
|
|
|
116,143
|
|
|||||
Unsecured Revolving Credit Facility — principal
(a)
(c)
|
696,380
|
|
|
—
|
|
|
696,380
|
|
|
—
|
|
|
—
|
|
|||||
Interest on borrowings
(d)
|
788,168
|
|
|
154,318
|
|
|
277,679
|
|
|
210,072
|
|
|
146,099
|
|
|||||
Operating and other lease commitments
(e) (f)
|
235,141
|
|
|
12,209
|
|
|
20,130
|
|
|
11,718
|
|
|
191,084
|
|
|||||
Capital commitments and tenant expansion allowances
(g)
|
156,676
|
|
|
112,077
|
|
|
41,086
|
|
|
—
|
|
|
3,513
|
|
|||||
|
$
|
5,875,510
|
|
|
$
|
361,918
|
|
|
$
|
1,440,726
|
|
|
$
|
1,158,427
|
|
|
$
|
2,914,439
|
|
(a)
|
Excludes unamortized deferred financing costs totaling
$17.6 million
, the unamortized discount on the Senior Unsecured Notes of
$12.2 million
in aggregate, and the aggregate unamortized fair market value adjustment of
$1.9 million
, primarily resulting from the assumption of property-level debt in connection with business combinations completed in prior years.
|
(b)
|
Our Senior Unsecured Notes are scheduled to mature from 2023 through 2027 (
Note 10
).
|
(c)
|
Our Unsecured Revolving Credit Facility is scheduled to mature on February 22, 2021 unless otherwise extended pursuant to its terms.
|
(d)
|
Interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at
September 30, 2018
.
|
(e)
|
Operating and other lease commitments consist primarily of rental obligations under ground leases and the future minimum rents payable on the leases for our principal offices. Total amount includes
$138.8 million
of ground lease obligations for which we will be reimbursed by tenants.
|
(f)
|
Includes a total of
$1.6 million
in office rent related to our lease of certain office space in New York, for which we entered into a sublease agreement with a third party during the fourth quarter of 2017. The sublessee will reimburse us in full for rent through the end of the lease term in the first quarter of 2021.
|
(g)
|
Capital commitments include (i)
$119.7 million
related to build-to-suit projects and redevelopments, including
$48.0 million
related to projects for which the tenant has not exercised the associated construction option, and (ii)
$37.0 million
related to unfunded tenant improvements, including certain discretionary commitments.
|
|
W. P. Carey 9/30/2018 10-Q
–
69
|
|
W. P. Carey 9/30/2018 10-Q
–
70
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to W. P. Carey
|
$
|
77,348
|
|
|
$
|
80,278
|
|
|
$
|
218,303
|
|
|
$
|
202,080
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real property
|
66,493
|
|
|
62,621
|
|
|
194,146
|
|
|
185,439
|
|
||||
Gain on sale of real estate, net
|
(343
|
)
|
|
(19,257
|
)
|
|
(18,987
|
)
|
|
(22,732
|
)
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
4,790
|
|
|
—
|
|
||||
Proportionate share of adjustments for noncontrolling interests
|
(2,693
|
)
|
|
(2,692
|
)
|
|
(8,204
|
)
|
|
(7,795
|
)
|
||||
Proportionate share of adjustments to equity in net income of partially owned entities
|
(651
|
)
|
|
866
|
|
|
1,503
|
|
|
4,416
|
|
||||
Total adjustments
|
62,806
|
|
|
41,538
|
|
|
173,248
|
|
|
159,328
|
|
||||
FFO (as defined by NAREIT) attributable to W. P. Carey
|
140,154
|
|
|
121,816
|
|
|
391,551
|
|
|
361,408
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Above- and below-market rent intangible lease amortization, net
|
13,224
|
|
|
12,459
|
|
|
37,329
|
|
|
37,273
|
|
||||
Other amortization and non-cash items
(a)
|
(4,829
|
)
|
|
6,208
|
|
|
(7,120
|
)
|
|
14,995
|
|
||||
Tax expense (benefit) — deferred
|
3,918
|
|
|
(1,234
|
)
|
|
(5,209
|
)
|
|
(8,167
|
)
|
||||
Straight-line and other rent adjustments
|
(3,431
|
)
|
|
(3,212
|
)
|
|
(8,364
|
)
|
|
(9,677
|
)
|
||||
Stock-based compensation
|
2,475
|
|
|
4,635
|
|
|
14,392
|
|
|
14,649
|
|
||||
Amortization of deferred financing costs
|
1,901
|
|
|
2,184
|
|
|
3,612
|
|
|
6,126
|
|
||||
Merger and other expenses
(b)
|
1,673
|
|
|
65
|
|
|
4,328
|
|
|
1,138
|
|
||||
Realized losses (gains) on foreign currency
|
191
|
|
|
(449
|
)
|
|
(697
|
)
|
|
(424
|
)
|
||||
(Gain) loss on extinguishment of debt
|
(43
|
)
|
|
1,566
|
|
|
1,566
|
|
|
35
|
|
||||
Restructuring and other compensation
(c)
|
—
|
|
|
1,356
|
|
|
—
|
|
|
9,074
|
|
||||
Proportionate share of adjustments to equity in net income of partially owned entities
|
3,860
|
|
|
3,064
|
|
|
9,247
|
|
|
5,592
|
|
||||
Proportionate share of adjustments for noncontrolling interests
|
664
|
|
|
(216
|
)
|
|
91
|
|
|
(1,105
|
)
|
||||
Total adjustments
|
19,603
|
|
|
26,426
|
|
|
49,175
|
|
|
69,509
|
|
||||
AFFO attributable to W. P. Carey
|
$
|
159,757
|
|
|
$
|
148,242
|
|
|
$
|
440,726
|
|
|
$
|
430,917
|
|
|
|
|
|
|
|
|
|
||||||||
Summary
|
|
|
|
|
|
|
|
||||||||
FFO (as defined by NAREIT) attributable to W. P. Carey
|
$
|
140,154
|
|
|
$
|
121,816
|
|
|
$
|
391,551
|
|
|
$
|
361,408
|
|
AFFO attributable to W. P. Carey
|
$
|
159,757
|
|
|
$
|
148,242
|
|
|
$
|
440,726
|
|
|
$
|
430,917
|
|
|
W. P. Carey 9/30/2018 10-Q
–
71
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income from Real Estate attributable to W. P. Carey
|
$
|
51,009
|
|
|
$
|
56,492
|
|
|
$
|
155,625
|
|
|
$
|
137,990
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real property
|
66,493
|
|
|
62,621
|
|
|
194,146
|
|
|
185,439
|
|
||||
Gain on sale of real estate, net
|
(343
|
)
|
|
(19,257
|
)
|
|
(18,987
|
)
|
|
(22,732
|
)
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
4,790
|
|
|
—
|
|
||||
Proportionate share of adjustments for noncontrolling interests
|
(2,693
|
)
|
|
(2,692
|
)
|
|
(8,204
|
)
|
|
(7,795
|
)
|
||||
Proportionate share of adjustments to equity in net income of partially owned entities
|
(651
|
)
|
|
866
|
|
|
1,503
|
|
|
4,416
|
|
||||
Total adjustments
|
62,806
|
|
|
41,538
|
|
|
173,248
|
|
|
159,328
|
|
||||
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate
|
113,815
|
|
|
98,030
|
|
|
328,873
|
|
|
297,318
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Above- and below-market rent intangible lease amortization, net
|
13,224
|
|
|
12,459
|
|
|
37,329
|
|
|
37,273
|
|
||||
Other amortization and non-cash items
(a)
|
(5,174
|
)
|
|
6,808
|
|
|
(7,524
|
)
|
|
15,855
|
|
||||
Tax benefit — deferred
|
(3,556
|
)
|
|
(2,694
|
)
|
|
(14,841
|
)
|
|
(5,121
|
)
|
||||
Straight-line and other rent adjustments
|
(3,431
|
)
|
|
(3,212
|
)
|
|
(8,364
|
)
|
|
(9,677
|
)
|
||||
Amortization of deferred financing costs
|
1,901
|
|
|
2,184
|
|
|
3,612
|
|
|
6,126
|
|
||||
Merger and other expenses
(b)
|
1,673
|
|
|
65
|
|
|
4,328
|
|
|
1,138
|
|
||||
Stock-based compensation
|
1,380
|
|
|
1,880
|
|
|
7,676
|
|
|
4,733
|
|
||||
Realized losses (gains) on foreign currency
|
197
|
|
|
(454
|
)
|
|
(728
|
)
|
|
(441
|
)
|
||||
(Gain) loss on extinguishment of debt
|
(43
|
)
|
|
1,566
|
|
|
1,566
|
|
|
35
|
|
||||
Proportionate share of adjustments to equity in net income of partially owned entities
|
519
|
|
|
(79
|
)
|
|
547
|
|
|
(605
|
)
|
||||
Proportionate share of adjustments for noncontrolling interests
|
664
|
|
|
(216
|
)
|
|
91
|
|
|
(1,105
|
)
|
||||
Total adjustments
|
7,354
|
|
|
18,307
|
|
|
23,692
|
|
|
48,211
|
|
||||
AFFO attributable to W. P. Carey — Real Estate
|
$
|
121,169
|
|
|
$
|
116,337
|
|
|
$
|
352,565
|
|
|
$
|
345,529
|
|
|
|
|
|
|
|
|
|
||||||||
Summary
|
|
|
|
|
|
|
|
||||||||
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate
|
$
|
113,815
|
|
|
$
|
98,030
|
|
|
$
|
328,873
|
|
|
$
|
297,318
|
|
AFFO attributable to W. P. Carey — Real Estate
|
$
|
121,169
|
|
|
$
|
116,337
|
|
|
$
|
352,565
|
|
|
$
|
345,529
|
|
|
W. P. Carey 9/30/2018 10-Q
–
72
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income from Investment Management attributable to W. P. Carey
|
$
|
26,339
|
|
|
$
|
23,786
|
|
|
$
|
62,678
|
|
|
$
|
64,090
|
|
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management
|
26,339
|
|
|
23,786
|
|
|
62,678
|
|
|
64,090
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Tax expense (benefit) — deferred
|
7,474
|
|
|
1,460
|
|
|
9,632
|
|
|
(3,046
|
)
|
||||
Stock-based compensation
|
1,095
|
|
|
2,755
|
|
|
6,716
|
|
|
9,916
|
|
||||
Other amortization and non-cash items
(a)
|
345
|
|
|
(600
|
)
|
|
404
|
|
|
(860
|
)
|
||||
Realized (gains) losses on foreign currency
|
(6
|
)
|
|
5
|
|
|
31
|
|
|
17
|
|
||||
Restructuring and other compensation
(c)
|
—
|
|
|
1,356
|
|
|
—
|
|
|
9,074
|
|
||||
Proportionate share of adjustments to equity in net income of partially owned entities
|
3,341
|
|
|
3,143
|
|
|
8,700
|
|
|
6,197
|
|
||||
Total adjustments
|
12,249
|
|
|
8,119
|
|
|
25,483
|
|
|
21,298
|
|
||||
AFFO attributable to W. P. Carey — Investment Management
|
$
|
38,588
|
|
|
$
|
31,905
|
|
|
$
|
88,161
|
|
|
$
|
85,388
|
|
|
|
|
|
|
|
|
|
||||||||
Summary
|
|
|
|
|
|
|
|
||||||||
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management
|
$
|
26,339
|
|
|
$
|
23,786
|
|
|
$
|
62,678
|
|
|
$
|
64,090
|
|
AFFO attributable to W. P. Carey — Investment Management
|
$
|
38,588
|
|
|
$
|
31,905
|
|
|
$
|
88,161
|
|
|
$
|
85,388
|
|
(a)
|
Primarily represents unrealized gains and losses from foreign exchange movements and derivatives.
|
(b)
|
Amounts for the three and
nine months ended September 30, 2018
are primarily comprised of costs incurred in connection with the CPA:17 Merger (
Note 1
,
Note 3
,
Note 17
). Amount for the nine months ended September 30, 2017 is primarily comprised of an accrual for estimated one-time legal settlement expenses.
|
(c)
|
Amounts for the three and
nine months ended September 30, 2017
represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017 (
Note 12
).
|
|
W. P. Carey 9/30/2018 10-Q
–
73
|
|
2018 (Remainder)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
Fair value
|
||||||||||||||||
Fixed-rate debt
(a) (b)
|
$
|
31,918
|
|
|
$
|
81,240
|
|
|
$
|
177,621
|
|
|
$
|
116,769
|
|
|
$
|
219,027
|
|
|
$
|
3,250,924
|
|
|
$
|
3,877,499
|
|
|
$
|
3,891,532
|
|
Variable-rate debt
(a)
|
$
|
967
|
|
|
$
|
10,520
|
|
|
$
|
43,040
|
|
|
$
|
738,820
|
|
|
$
|
21,669
|
|
|
$
|
3,010
|
|
|
$
|
818,026
|
|
|
$
|
817,300
|
|
(a)
|
Amounts are based on the exchange rate at
September 30, 2018
, as applicable.
|
(b)
|
Amounts after 2022 are primarily comprised of principal payments for our Senior Unsecured Notes (
Note 10
).
|
|
W. P. Carey 9/30/2018 10-Q
–
74
|
Lease Revenues
(a)
|
|
2018 (Remainder)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Euro
(b)
|
|
$
|
46,565
|
|
|
$
|
181,592
|
|
|
$
|
178,577
|
|
|
$
|
175,740
|
|
|
$
|
165,101
|
|
|
$
|
1,598,439
|
|
|
$
|
2,346,014
|
|
British pound sterling
(c)
|
|
8,436
|
|
|
33,555
|
|
|
33,907
|
|
|
34,154
|
|
|
34,285
|
|
|
242,574
|
|
|
386,911
|
|
|||||||
Danish krone
(d)
|
|
3,084
|
|
|
12,460
|
|
|
12,725
|
|
|
12,925
|
|
|
13,165
|
|
|
198,645
|
|
|
253,004
|
|
|||||||
Australian dollar
(e)
|
|
2,677
|
|
|
10,622
|
|
|
10,651
|
|
|
10,622
|
|
|
10,622
|
|
|
125,776
|
|
|
170,970
|
|
|||||||
Other foreign currencies
(f)
|
|
2,755
|
|
|
11,185
|
|
|
11,414
|
|
|
11,586
|
|
|
11,256
|
|
|
104,426
|
|
|
152,622
|
|
|||||||
|
|
$
|
63,517
|
|
|
$
|
249,414
|
|
|
$
|
247,274
|
|
|
$
|
245,027
|
|
|
$
|
234,429
|
|
|
$
|
2,269,860
|
|
|
$
|
3,309,521
|
|
Debt Service
(a) (g)
|
|
2018 (Remainder)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Euro
(b)
|
|
$
|
13,703
|
|
|
$
|
53,908
|
|
|
$
|
96,617
|
|
|
$
|
524,941
|
|
|
$
|
46,174
|
|
|
$
|
1,842,638
|
|
|
$
|
2,577,981
|
|
British pound sterling
(c)
|
|
205
|
|
|
819
|
|
|
819
|
|
|
819
|
|
|
819
|
|
|
10,478
|
|
|
13,959
|
|
|||||||
|
|
$
|
13,908
|
|
|
$
|
54,727
|
|
|
$
|
97,436
|
|
|
$
|
525,760
|
|
|
$
|
46,993
|
|
|
$
|
1,853,116
|
|
|
$
|
2,591,940
|
|
(a)
|
Amounts are based on the applicable exchange rates at
September 30, 2018
. Contractual rents and debt obligations are denominated in the functional currency of the country of each property.
|
(b)
|
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 cash flow at
September 30, 2018
of
$2.3 million
, excluding the impact of our derivative instruments. Amounts included the equivalent of
$578.8 million
of 2.0% Senior Notes due 2023 outstanding maturing in January 2023; the equivalent of
$578.8 million
of 2.25% Senior Notes due 2024 outstanding maturing in July 2024; the equivalent of
$578.8 million
of 2.125% Senior Notes due 2027 outstanding maturing in April 2027; and the equivalent of
$449.4 million
borrowed in euro under our Unsecured Revolving Credit Facility, which is scheduled to mature on February 22, 2021 unless extended pursuant to its terms, but may be prepaid prior to that date pursuant to its terms (
Note 10
).
|
(c)
|
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 cash flow at
September 30, 2018
of
$3.7 million
, excluding the impact of our derivative instruments.
|
(d)
|
We estimate that, for a 1% increase or decrease in the exchange rate between the Danish krone and the U.S. dollar, there would be a corresponding change in the projected estimated cash flow at
September 30, 2018
of
$2.5 million
. There is no related mortgage loan on this investment.
|
(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 cash flow at
September 30, 2018
of
$1.7 million
. There is no related mortgage loan on this investment.
|
(f)
|
Other foreign currencies for future minimum rents consist of the Norwegian krone, Canadian dollar, and the Swedish krona.
|
(g)
|
Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at
September 30, 2018
.
|
|
W. P. Carey 9/30/2018 10-Q
–
75
|
•
|
65%
related to domestic operations; and
|
•
|
35%
related to international operations.
|
•
|
65%
related to domestic properties;
|
•
|
35%
related to international properties;
|
•
|
28%
related to industrial facilities,
23%
related to office facilities,
17%
related to retail facilities, and
16%
related to warehouse facilities; and
|
•
|
19%
related to the retail stores industry (including automotive dealerships) and
11%
related to the consumer services industry.
|
|
W. P. Carey 9/30/2018 10-Q
–
76
|
|
W. P. Carey 9/30/2018 10-Q
–
77
|
Exhibit
No. |
|
|
Description
|
|
Method of Filing
|
1.1
|
|
|
Underwriting Agreement dated October 2, 2018, by and among W. P. Carey Inc., WPC Eurobond B.V., J.P. Morgan Securities plc, Merrill Lynch International, and Wells Fargo Securities International Limited, as representatives of the several underwriters listed in Schedule 1 thereto.
|
|
Incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed October 4, 2018
|
|
|
|
|
|
|
4.1
|
|
|
Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2026
|
|
Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed October 9, 2018
|
|
|
|
|
|
|
4.2
|
|
|
Indenture dated as of November 8, 2016, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee
|
|
Incorporated by reference to Exhibit 4.3 of automatic shelf registration statement on Form S-3 filed November 8, 2016
|
|
|
|
|
|
|
4.3
|
|
|
Supplemental Indenture dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee
|
|
Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K filed October 9, 2018
|
|
|
|
|
|
|
10.1
|
|
|
Agency Agreement dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee
|
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed October 9, 2018
|
|
|
|
|
|
|
10.2
|
|
|
First Amendment to Third Amended and Restated Credit Agreement, dated as of September 30, 2018, by and among W. P. Carey Inc., each Designated Borrower, certain Subsidiaries of W. P. Carey Inc. identified therein, from time to time as Guarantors, the Lenders, Swing Line Lenders and L/C Issuers and Bank of America, N.A., as Administrative Agent.
|
|
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.INS
|
|
|
XBRL Instance Document
|
|
Filed herewith
|
|
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
|
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
|
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
W. P. Carey 9/30/2018 10-Q
–
78
|
|
|
|
W. P. Carey Inc.
|
Date:
|
November 2, 2018
|
|
|
|
|
By:
|
/s/ ToniAnn Sanzone
|
|
|
|
ToniAnn Sanzone
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
November 2, 2018
|
|
|
|
|
By:
|
/s/ Arjun Mahalingam
|
|
|
|
Arjun Mahalingam
|
|
|
|
Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
|
W. P. Carey 9/30/2018 10-Q
–
79
|
Exhibit
No. |
|
|
Description
|
|
Method of Filing
|
1.1
|
|
|
Underwriting Agreement dated October 2, 2018, by and among W. P. Carey Inc., WPC Eurobond B.V., J.P. Morgan Securities plc, Merrill Lynch International, and Wells Fargo Securities International Limited, as representatives of the several underwriters listed in Schedule 1 thereto.
|
|
|
|
|
|
|
|
|
4.1
|
|
|
Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2026
|
|
|
|
|
|
|
|
|
4.2
|
|
|
Indenture dated as of November 8, 2016, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee
|
|
|
|
|
|
|
|
|
4.3
|
|
|
Supplemental Indenture dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee
|
|
|
|
|
|
|
|
|
10.1
|
|
|
Agency Agreement dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee
|
|
|
|
|
|
|
|
|
10.2
|
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First Amendment to Third Amended and Restated Credit Agreement, dated as of September 30, 2018, by and among W. P. Carey Inc., each Designated Borrower, certain Subsidiaries of W. P. Carey Inc. identified therein, from time to time as Guarantors, the Lenders, Swing Line Lenders and L/C Issuers and Bank of America, N.A., as Administrative Agent.
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31.1
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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32
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Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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Filed herewith
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101.SCH
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XBRL Taxonomy Extension Schema Document
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Filed herewith
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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Filed herewith
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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Filed herewith
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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Filed herewith
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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Filed herewith
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W.P. CAREY INC.
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By:
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/s/ Mark J. Foresi
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Name: Mark J. Foresi
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Title: Senior Vice President, Capital Markets
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BANK OF AMERICA, N.A., as a Lender
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By:
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/s/ Michael J. Kauffman
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Name: Michael J. Kauffman
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Title: Vice President
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JPMORGAN CHASE BANK, N.A.,
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as a Lender
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By:
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/s/ Christian Lunt
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Name: Christian Lunt
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Title: Executive Director
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WELLS FARGO BANK, N.A., as a Lender
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By:
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/s/ Kristen Ray
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Name: Kristen Ray
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Title: Vice President
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BARCLAYS BANK PLC, as a Lender
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By:
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/s/ Jake Lam
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Name: Jake Lam
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Title: Assistant Vice President
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CAPITAL ONE, NATIONAL ASSOCIATION,
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as a Lender
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By:
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/s/ Frederick H. Denecke
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Name: Frederick H. Denecke
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Title: Senior Vice President
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U.S. BANK NATIONAL ASSOCIATION, as a
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Lender
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By:
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/s/ Lee Hord
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Name: Lee Hord
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Title: Senior Vice President
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CITIZENS BANK, N.A., as a Lender
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By:
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/s/ Donald Woods
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Name: Donald Woods
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Title: Senior Vice President
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PNC BANK, NATIONAL ASSOCIATION, as a
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Lender
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By:
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/s/ Brian P. Kelly
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Name: Brian P. Kelly
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Title: Senior Vice President
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REGIONS BANK, as a Lender
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By:
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/s/ Lori Chambers
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Name: Lori Chambers
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Title: Senior Vice President
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THE BANK OF NOVA SCOTIA,
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as a Lender
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By:
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/s/ Chad Hale
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Name: Chad Hale
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Title: Director & Execution Head, REGAL
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BMO HARRIS BANK N.A., as a Lender
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By:
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/s/ Kevin Fennell
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Name: Kevin Fennell
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Title: Director
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FIFTH THRID BANK, AN OHIO BANKING
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CORPORATION, as a Lender
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By:
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/s/ Casey Ciccone
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Name: Casey Ciccone
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Title: Vice President
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THE BANK OF NEW YORK MELLON, as a
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Lender
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By:
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/s/ Adam Petrasovic
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Name: Adam Petrasovic
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Title: Vice President
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SIGNATURE BANK, as a Lender
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By:
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/s/ Richard Assatt
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Name: Richard Assatt
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Title: Senior Lender/Vice President
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BANK OF CHINA, NEW YORK BRANCH, as a
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Lender
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By:
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/s/ Raymond Oiao
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Name: Raymond Oiao
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Title: Executive Vice President
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ACKNOWLEDGED BY:
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BANK OF AMERICA, N.A., as
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Administrative Agent
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By:
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/s/ Anthony W. Kell
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Name: Anthony W. Kell
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Title: Vice President
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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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