UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SeptemberJune 30, 20172022
or

o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to __________
Commission File Number: 001-13779
wpchighreslogoa05.jpgwpc-20220630_g1.jpg
W. P. Carey Inc.
(Exact name of registrant as specified in its charter)
Maryland45-4549771
(State of incorporation)(I.R.S. Employer Identification No.)
50 Rockefeller PlazaOne Manhattan West, 395 9th Avenue, 58th Floor
New York,New York1002010001
(Address of principal executive offices)(Zip Code)
 
Investor Relations (212) 492-8920
(212) 492-1100
(Registrant’s telephone numbers, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par ValueWPCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☑ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ☑ No o

☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑Accelerated filer☐Non-accelerated filer  ☐
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
(Do not check if a smaller reporting company)
Smaller reporting companyo
☐
Emerging growth companyo☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No þ
☑
Registrant has 106,909,474192,908,916 shares of common stock, $0.001 par value, outstanding at October 27, 2017.
July 22, 2022.


INDEX
Page No.


INDEX
Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
23
34
45
56
78
89
5041
8565
8967
PART II — OTHER INFORMATION
9068
9169
70

W. P. Carey 6/30/2022 10-Q– 1


Forward-Looking Statements


This Quarterly Report on Form 10-Q or this Report,(this “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of Part I of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to, statements regarding: capital markets; tenant credit quality; the general economic outlook; our expected range of Adjusted funds from operations, or AFFO;Proposed Merger (as defined herein), including the impact thereof; our corporate strategy; our capital structure; our portfolio lease terms; our international exposurestrategy and acquisition volume, including the effects of the United Kingdom’s decision to exit the European Union; our expectations about tenant bankruptcies and interest coverage; statements regarding estimated or future economic performance and results, including our underlying assumptions, occupancy rate, credit ratings,expectations surrounding the impact of the novel coronavirus (“COVID-19”) pandemic on our business, financial condition, liquidity, results of operations, and prospects; our future capital expenditure and leverage levels, debt service obligations, and plans to fund our liquidity needs; prospective statements regarding our access to the capital markets, including our “at-the-market” program (“ATM Program”) and settlement of our Equity Forwards (as defined herein); the outlook for the investment programs that we manage, including possible new acquisitions and dispositions by us and our investment managementliquidity events for those programs; the Managed Programs discussed herein, including their earnings; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust or REIT;(“REIT”); and the impact of recently issued accounting pronouncements; the amountpronouncements and timing of any future dividends; our existing or future leverage and debt service obligations; our ability to sell shares under our “at the market” program and the use of proceeds from that program; our estimated future growth; our projected assets under management; our future capital expenditure levels; our future financing transactions; and our plans to fund our future liquidity needs. regulatory activity.

These statements are based on the current expectations of our management. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Other unknown or unpredictable factorsrisks or uncertainties, like the risks related to the effects of pandemics and global outbreaks of contagious diseases (such as the current COVID-19 pandemic) or the fear of such outbreaks, could also have material adverse effects on our business, financial condition, liquidity, results of operations, AFFO, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report, as well as in our other filings with the Securities and Exchange Commission or the SEC,(“SEC”), including but not limited to those described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2016,2021, as filed with the SEC on February 24, 2017, or the 201611, 2022 (the “2021 Annual Report.Report”), and in Part II, Item 1A. Risk Factors herein. Moreover, because we operate in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of this Report, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to revise or update any forward-looking statements.


All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part I, Item 1. Financial Statements (Unaudited).



W. P. Carey 6/30/2022 10-Q– 2

W. P. Carey 9/30/2017 10-Q– 1



PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.


W. P. CAREY INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share amounts)
June 30, 2022December 31, 2021
Assets
Investments in real estate:
Land, buildings and improvements$12,026,671 $11,875,407 
Net investments in direct financing leases and loans receivable786,462 813,577 
In-place lease intangible assets and other2,384,032 2,386,000 
Above-market rent intangible assets822,470 843,410 
Investments in real estate16,019,635 15,918,394 
Accumulated depreciation and amortization(3,043,146)(2,889,294)
Assets held for sale, net— 8,269 
Net investments in real estate12,976,489 13,037,369 
Equity method investments344,360 356,637 
Cash and cash equivalents103,590 165,427 
Due from affiliates18,937 1,826 
Other assets, net1,119,389 1,017,842 
Goodwill891,464 901,529 
Total assets (a)
$15,454,229 $15,480,630 
Liabilities and Equity
Debt:
Senior unsecured notes, net$5,471,066 $5,701,913 
Unsecured term loans, net548,287 310,583 
Unsecured revolving credit facility417,455 410,596 
Non-recourse mortgages, net328,820 368,524 
Debt, net6,765,628 6,791,616 
Accounts payable, accrued expenses and other liabilities529,719 572,846 
Below-market rent and other intangible liabilities, net174,766 183,286 
Deferred income taxes135,128 145,572 
Dividends payable207,526 203,859 
Total liabilities (a)
7,812,767 7,897,179 
Commitments and contingencies (Note 11)
00
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued— — 
Common stock, $0.001 par value, 450,000,000 shares authorized; 192,891,792 and 190,013,751 shares, respectively, issued and outstanding193 190 
Additional paid-in capital10,201,614 9,977,686 
Distributions in excess of accumulated earnings(2,352,839)(2,224,231)
Deferred compensation obligation57,012 49,810 
Accumulated other comprehensive loss(266,157)(221,670)
Total stockholders’ equity7,639,823 7,581,785 
Noncontrolling interests1,639 1,666 
Total equity7,641,462 7,583,451 
Total liabilities and equity$15,454,229 $15,480,630 
 September 30, 2017 December 31, 2016
Assets   
Investments in real estate:   
Land, buildings and improvements$5,429,239
 $5,285,837
Net investments in direct financing leases717,184
 684,059
In-place lease and other intangible assets1,204,770
 1,172,238
Above-market rent intangible assets639,140
 632,383
Assets held for sale10,596
 26,247
Investments in real estate8,000,929
 7,800,764
Accumulated depreciation and amortization(1,249,024) (1,018,864)
Net investments in real estate6,751,905
 6,781,900
Equity investments in the Managed Programs and real estate327,598
 298,893
Cash and cash equivalents169,770
 155,482
Due from affiliates154,336
 299,610
Other assets, net287,481
 282,149
Goodwill643,321
 635,920
Total assets$8,334,411
 $8,453,954
Liabilities and Equity   
Debt:   
Unsecured senior notes, net$2,455,383
 $1,807,200
Unsecured term loans, net382,191
 249,978
Unsecured revolving credit facility224,213
 676,715
Non-recourse mortgages, net1,253,051
 1,706,921
Debt, net4,314,838
 4,440,814
Accounts payable, accrued expenses and other liabilities255,911
 266,917
Below-market rent and other intangible liabilities, net116,980
 122,203
Deferred income taxes86,581
 90,825
Distributions payable109,187
 107,090
Total liabilities4,883,497
 5,027,849
Redeemable noncontrolling interest965
 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; 106,897,515 and 106,294,162 shares, respectively, issued and outstanding107
 106
Additional paid-in capital4,429,240
 4,399,961
Distributions in excess of accumulated earnings(1,017,901) (894,137)
Deferred compensation obligation46,711
 50,222
Accumulated other comprehensive loss(229,581) (254,485)
Total stockholders’ equity3,228,576
 3,301,667
Noncontrolling interests221,373
 123,473
Total equity3,449,949
 3,425,140
Total liabilities and equity$8,334,411
 $8,453,954
__________

(a)See Note 2 for details related to variable interest entities (“VIEs”).

See Notes to Consolidated Financial Statements.

W. P. Carey 6/30/2022 10-Q– 3


W. P. Carey 9/30/2017 10-Q– 2



W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except share and per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
2017 2016 2017 20162022202120222021
Revenues       Revenues
Owned Real Estate:       
Real Estate:Real Estate:
Lease revenues$161,511
 $163,786
 $475,547
 $506,358
Lease revenues$314,354 $289,064 $622,079 $573,729 
Income from direct financing leases and loans receivableIncome from direct financing leases and loans receivable17,778 17,422 36,157 35,164 
Operating property revenues8,449
 8,524
 23,652
 23,696
Operating property revenues5,064 3,245 8,929 5,424 
Reimbursable tenant costs5,397
 6,537
 15,940
 19,237
Lease termination income and other1,227
 1,224
 4,234
 34,603
Lease termination income and other2,591 5,059 16,713 6,644 
176,584
 180,071
 519,373
 583,894
339,787 314,790 683,878 620,961 
Investment Management:       Investment Management:
Asset management revenue17,938
 15,978
 53,271
 45,596
Structuring revenue9,817
 12,301
 27,981
 30,990
Asset management and other revenueAsset management and other revenue3,467 3,966 6,887 7,920 
Reimbursable costs from affiliates6,211
 14,540
 45,390
 46,372
Reimbursable costs from affiliates1,143 968 2,070 2,009 
Dealer manager fees105
 1,835
 4,430
 5,379
Other advisory revenue99
 522
 896
 522
34,170
 45,176
 131,968
 128,859
4,610 4,934 8,957 9,929 
210,754
 225,247
 651,341
 712,753
344,397 319,724 692,835 630,890 
Operating Expenses       Operating Expenses
Depreciation and amortization64,040
 62,802
 189,319
 213,835
Depreciation and amortization115,080 114,348 230,473 224,670 
General and administrative17,236
 15,733
 53,189
 58,122
General and administrative20,841 20,464 43,925 42,547 
Reimbursable tenant and affiliate costs11,608
 21,077
 61,330
 65,609
Reimbursable tenant costsReimbursable tenant costs16,704 15,092 33,664 30,850 
Property expenses, excluding reimbursable tenant costs10,556
 10,193
 31,196
 38,475
Property expenses, excluding reimbursable tenant costs11,851 11,815 25,630 22,698 
Subadvisor fees5,206
 4,842
 11,598
 10,010
Stock-based compensation expense4,635
 4,356
 14,649
 14,964
Stock-based compensation expense9,758 9,048 17,591 14,429 
Restructuring and other compensation1,356
 —
 9,074
 11,925
Dealer manager fees and expenses462
 3,028
 6,544
 9,000
Other expenses65
 —
 1,138
 5,359
Impairment charges—
 14,441
 —
 49,870
Impairment charges6,206 — 26,385 — 
Operating property expensesOperating property expenses3,191 2,049 5,978 3,960 
Merger and other expensesMerger and other expenses1,984 (2,599)(338)(3,075)
Reimbursable costs from affiliatesReimbursable costs from affiliates1,143 968 2,070 2,009 
115,164
 136,472
 378,037
 477,169
186,758 171,185 385,378 338,088 
Other Income and Expenses       Other Income and Expenses
Interest expense(41,182) (44,349) (125,374) (139,496)Interest expense(46,417)(49,252)(92,470)(100,892)
Equity in earnings of equity method investments in the Managed Programs and real estate16,318
 16,803
 47,820
 48,243
Other income and (expenses)(4,569) 5,101
 (4,969) 9,398
Gain on sale of real estate, netGain on sale of real estate, net31,119 19,840 42,367 29,212 
Other gains and (losses)Other gains and (losses)(21,746)7,545 13,999 (33,643)
Earnings (losses) from equity method investmentsEarnings (losses) from equity method investments7,401 (156)12,173 (9,889)
Non-operating incomeNon-operating income5,974 3,065 14,520 9,421 
(29,433) (22,445) (82,523) (81,855)(23,669)(18,958)(9,411)(105,791)
Income before income taxes and gain on sale of real estate66,157
 66,330
 190,781
 153,729
(Provision for) benefit from income taxes(1,760) (3,154) (2,903) 4,538
Income before gain on sale of real estate64,397
 63,176
 187,878
 158,267
Gain on sale of real estate, net of tax19,257
 49,126
 22,732
 68,070
Income before income taxesIncome before income taxes133,970 129,581 298,046 187,011 
Provision for income taxesProvision for income taxes(6,252)(9,298)(13,335)(15,087)
Net Income83,654
 112,302
 210,610
 226,337
Net Income127,718 120,283 284,711 171,924 
Net income attributable to noncontrolling interests(3,376) (1,359) (8,530) (6,294)Net income attributable to noncontrolling interests(40)(38)(38)(45)
Net Income Attributable to W. P. Carey$80,278
 $110,943
 $202,080
 $220,043
Net Income Attributable to W. P. Carey$127,678 $120,245 $284,673 $171,879 
       
Basic Earnings Per Share$0.74
 $1.03
 $1.87
 $2.06
Basic Earnings Per Share$0.66 $0.67 $1.48 $0.96 
Diluted Earnings Per Share$0.74
 $1.03
 $1.87
 $2.05
Diluted Earnings Per Share$0.66 $0.67 $1.47 $0.96 
Weighted-Average Shares Outstanding       Weighted-Average Shares Outstanding
Basic108,019,292
 107,221,668
 107,751,672
 106,493,145
Basic194,019,451 180,099,370 192,971,256 178,379,654 
Diluted108,143,694
 107,468,029
 107,947,490
 106,853,174
Diluted194,763,695 180,668,732 193,706,035 178,902,259 

       
Distributions Declared Per Share$1.0050
 $0.9850
 $3.0000
 $2.9392


See Notes to Consolidated Financial Statements.

W. P. Carey 6/30/2022 10-Q– 4


W. P. Carey 9/30/2017 10-Q– 3



W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2017 2016 2017 2016 2022202120222021
Net Income$83,654
 $112,302
 $210,610
 $226,337
Net Income$127,718 $120,283 $284,711 $171,924 
Other Comprehensive Income (Loss)       
Other Comprehensive (Loss) IncomeOther Comprehensive (Loss) Income
Foreign currency translation adjustments28,979
 (11,824) 71,686
 (41,999)Foreign currency translation adjustments(43,993)5,973 (53,145)(7,929)
Realized and unrealized loss on derivative instruments(10,270) (3,093) (32,574) (5,999)
Change in unrealized gain (loss) on marketable securities66
 (7) (260) (3)
Unrealized gain (loss) on derivative instrumentsUnrealized gain (loss) on derivative instruments19,976 (2,023)27,346 17,896 
Reclassification of unrealized gain on investments to net incomeReclassification of unrealized gain on investments to net income— — (18,688)— 
18,775
 (14,924) 38,852
 (48,001)(24,017)3,950 (44,487)9,967 
Comprehensive Income102,429
 97,378
 249,462
 178,336
Comprehensive Income103,701 124,233 240,224 181,891 
       
Amounts Attributable to Noncontrolling Interests       Amounts Attributable to Noncontrolling Interests
Net income(3,376) (1,359) (8,530) (6,294)Net income(40)(38)(38)(45)
Foreign currency translation adjustments(4,716) (218) (13,961) (1,051)
Realized and unrealized loss on derivative instruments8
 17
 13
 17
Unrealized gain on derivative instrumentsUnrealized gain on derivative instruments— (21)— (21)
Comprehensive income attributable to noncontrolling interests(8,084) (1,560) (22,478) (7,328)Comprehensive income attributable to noncontrolling interests(40)(59)(38)(66)
Comprehensive Income Attributable to W. P. Carey$94,345
 $95,818
 $226,984
 $171,008
Comprehensive Income Attributable to W. P. Carey$103,661 $124,174 $240,186 $181,825 
 
See Notes to Consolidated Financial Statements.

W. P. Carey 6/30/2022 10-Q– 5


W. P. Carey 9/30/2017 10-Q– 4



W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
Nine Months Ended September 30, 2017 and 2016
(in thousands, except share and per share amounts)
W. P. Carey Stockholders
DistributionsAccumulated
Common StockAdditionalin Excess ofDeferredOtherTotal
$0.001 Par ValuePaid-inAccumulatedCompensationComprehensiveW. P. CareyNoncontrolling
SharesAmountCapitalEarningsObligationLossStockholdersInterestsTotal
Balance at April 1, 2022192,394,960 $192 $10,152,426 $(2,274,619)$57,152 $(242,140)$7,693,011 $1,650 $7,694,661 
Shares issued under ATM Program, net491,068 1 39,135 39,136 39,136 
Shares issued upon delivery of vested restricted share awards3,724 — — — — 
Shares issued upon purchases under employee share purchase plan2,040 — 155 155 155 
Amortization of stock-based compensation expense9,758 9,758 9,758 
Delivery of deferred vested shares, net140 (140)— — 
Distributions to noncontrolling interests— (51)(51)
Dividends declared ($1.059 per share)(205,898)(205,898)(205,898)
Net income127,678 127,678 40 127,718 
Other comprehensive loss:
Foreign currency translation adjustments(43,993)(43,993)(43,993)
Unrealized gain on derivative instruments19,976 19,976 19,976 
Balance at June 30, 2022192,891,792 $193 $10,201,614 $(2,352,839)$57,012 $(266,157)$7,639,823 $1,639 $7,641,462 
 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, 2017106,294,162
 $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, net345,253
 1
 22,856
       22,857
   22,857
Contributions from noncontrolling interests            —
 90,487
 90,487
Acquisition of noncontrolling interest    (1,845)       (1,845) 1,845
 —
Shares issued upon delivery of vested restricted share awards219,540
 —
 (9,678)       (9,678)   (9,678)
Shares issued upon exercise of stock options and purchases under employee share purchase plan38,560
 —
 (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
Distributions to noncontrolling interests            —
 (16,910) (16,910)
Distributions declared ($3.0000 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 marketable securities          (260) (260)   (260)
Balance at September 30, 2017106,897,515
 $107
 $4,429,240
 $(1,017,901) $46,711
 $(229,581) $3,228,576
 $221,373
 $3,449,949


W. P. Carey Stockholders
DistributionsAccumulated
Common StockAdditionalin Excess ofDeferredOtherTotal
$0.001 Par ValuePaid-inAccumulatedCompensationComprehensiveW. P. CareyNoncontrolling
SharesAmountCapitalEarningsObligationLossStockholdersInterestsTotal
Balance at April 1, 2021177,520,962 $178 $9,061,143 $(1,988,440)$49,815 $(233,889)$6,888,807 $1,648 $6,890,455 
Shares issued under our Equity Forwards, net4,523,209 5 309,502 309,507 309,507 
Shares issued under ATM Program, net2,205,509 1 162,335 162,336 162,336 
Shares issued upon purchases under employee share purchase plan2,597 — 176 176 176 
Shares issued upon delivery of vested restricted share awards874 — (33)(33)(33)
Amortization of stock-based compensation expense9,048 9,048 9,048 
Distributions to noncontrolling interests— (41)(41)
Dividends declared ($1.050 per share)(194,914)(194,914)(194,914)
Net income120,245 120,245 38 120,283 
Other comprehensive income:
Foreign currency translation adjustments5,973 5,973 5,973 
Unrealized loss on derivative instruments(2,044)(2,044)21(2,023)
Balance at June 30, 2021184,253,151 $184 $9,542,171 $(2,063,109)$49,815 $(229,960)$7,299,101 $1,666 $7,300,767 



(Continued)






W. P. Carey 6/30/2022 10-Q– 6

W. P. Carey 9/30/2017 10-Q– 5



W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
(Continued)
Nine Months Ended September 30, 2017 and 2016
(in thousands, except share and per share amounts)
W. P. Carey Stockholders
DistributionsAccumulated
Common StockAdditionalin Excess ofDeferredOtherTotal
$0.001 Par ValuePaid-inAccumulatedCompensationComprehensiveW. P. CareyNoncontrolling
SharesAmountCapitalEarningsObligationLossStockholdersInterestsTotal
Balance at January 1, 2022190,013,751 $190 $9,977,686 $(2,224,231)$49,810 $(221,670)$7,581,785 $1,666 $7,583,451 
Shares issued under ATM Program, net2,740,295 3 218,098 218,101 218,101 
Shares issued upon delivery of vested restricted share awards135,706 — (6,600)(6,600)(6,600)
Shares issued upon purchases under employee share purchase plan2,040 — 155 155 155 
Amortization of stock-based compensation expense17,591 17,591 17,591 
Deferral of vested shares, net(6,696)6,696 — — 
Distributions to noncontrolling interests— (65)(65)
Dividends declared ($2.116 per share)1,380 (413,281)506 (411,395)(411,395)
Net income284,673 284,673 38 284,711 
Other comprehensive loss:
Foreign currency translation adjustments(53,145)(53,145)(53,145)
Unrealized gain on derivative instruments27,346 27,346 27,346 
Reclassification of unrealized gain on investments to net income(18,688)(18,688)(18,688)
Balance at June 30, 2022192,891,792 $193 $10,201,614 $(2,352,839)$57,012 $(266,157)$7,639,823 $1,639 $7,641,462 
 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, 2016104,448,777
 $104
 $4,282,042
 $(738,652) $56,040
 $(172,291) $3,427,243
 $134,185
 $3,561,428
Shares issued under “at-the-market” offering, net1,249,836
 2
 83,784
       83,786
   83,786
Shares issued to a third party in connection with the redemption of a redeemable noncontrolling interest217,011
 —
 13,418
       13,418
   13,418
Contributions from noncontrolling interests (Note 2)
            —
 14,319
 14,319
Shares issued upon delivery of vested restricted share awards326,176
 —
 (14,505)       (14,505)   (14,505)
Shares issued upon exercise of stock options and purchases under employee share purchase plan32,873
 —
 (1,491)       (1,491)   (1,491)
Delivery of deferred vested shares, net    5,712
   (5,712)   —
   —
Deconsolidation of affiliate (Note 2)
            —
 (14,184) (14,184)
Amortization of stock-based compensation expense    18,170
       18,170
   18,170
Redemption value adjustment    561
       561
   561
Distributions to noncontrolling interests            —
 (13,418) (13,418)
Distributions declared ($2.9392 per share)    1,672
 (316,259) 248
   (314,339)   (314,339)
Net income      220,043
     220,043
 6,294
 226,337
Other comprehensive loss:                 
Foreign currency translation adjustments          (43,050) (43,050) 1,051
 (41,999)
Realized and unrealized loss on derivative instruments          (5,982) (5,982) (17) (5,999)
Change in unrealized loss on marketable securities          (3) (3)   (3)
Balance at September 30, 2016106,274,673
 $106
 $4,389,363
 $(834,868) $50,576
 $(221,326) $3,383,851
 $128,230
 $3,512,081


W. P. Carey Stockholders
DistributionsAccumulated
Common StockAdditionalin Excess ofDeferredOtherTotal
$0.001 Par ValuePaid-inAccumulatedCompensationComprehensiveW. P. CareyNoncontrolling
SharesAmountCapitalEarningsObligationLossStockholdersInterestsTotal
Balance at January 1, 2021175,401,757 $175 $8,925,365 $(1,850,935)$42,014 $(239,906)$6,876,713 $1,656 $6,878,369 
Shares issued under our Equity Forwards, net4,523,209 5 309,502 309,507 309,507 
Shares issued under ATM Program, net4,225,624 4 302,619 302,623 302,623 
Shares issued upon delivery of vested restricted share awards99,964 — (3,777)(3,777)(3,777)
Shares issued upon purchases under employee share purchase plan2,597 — 176 176 176 
Amortization of stock-based compensation expense14,429 14,429 14,429 
Deferral of vested shares, net(7,049)7,049 — — 
Distributions to noncontrolling interests— (56)(56)
Dividends declared ($2.098 per share)906 (384,053)752 (382,395)(382,395)
Net income171,879 171,879 45 171,924 
Other comprehensive income:
Unrealized gain on derivative instruments17,875 17,875 21 17,896 
Foreign currency translation adjustments(7,929)(7,929)(7,929)
Balance at June 30, 2021184,253,151 $184 $9,542,171 $(2,063,109)$49,815 $(229,960)$7,299,101 $1,666 $7,300,767 

See Notes to Consolidated Financial Statements.

W. P. Carey 6/30/2022 10-Q– 7


W. P. Carey 9/30/2017 10-Q– 6



W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 Nine Months Ended September 30,
 2017
2016
Cash Flows — Operating Activities   
Net income$210,610
 $226,337
Adjustments to net income:   
Depreciation and amortization, including intangible assets and deferred financing costs195,298
 216,002
Investment Management revenue received in shares of Managed REITs and other(53,170) (22,088)
Distributions of earnings from equity investments49,365
 48,303
Equity in earnings of equity method investments in the Managed Programs and real estate(47,820) (48,243)
Amortization of rent-related intangibles and deferred rental revenue37,210
 (8,796)
Gain on sale of real estate(22,732) (68,070)
Stock-based compensation expense14,649
 18,170
Straight-line rent(13,511) (12,138)
Realized and unrealized losses (gains) on foreign currency transactions, derivatives, extinguishment of debt, and other13,112
 (6,921)
Deferred income taxes(8,167) (19,094)
Impairment charges—
 49,870
Allowance for credit losses—
 7,064
Changes in assets and liabilities:   
Deferred structuring revenue received15,256
 18,161
Net changes in other operating assets and liabilities(4,526) (15,771)
Increase in deferred structuring revenue receivable(3,697) (5,310)
Net Cash Provided by Operating Activities381,877
 377,476
Cash Flows — Investing Activities   
Proceeds from repayment of short-term loans to affiliates229,696
 37,053
Funding of short-term loans to affiliates(123,492) (20,000)
Proceeds from sale of real estate102,503
 392,867
Funding for real estate construction and expansions(36,741) (41,874)
Capital expenditures on owned real estate(10,819) (7,104)
Change in investing restricted cash9,588
 7,775
Return of capital from equity investments6,482
 3,522
Purchases of real estate(6,000) (385,835)
Other investing activities, net5,728
 2,549
Capital contributions to equity investments in real estate(1,291) (6)
Capital expenditures on corporate assets(349) (846)
Deconsolidation of affiliate (Note 2)
—
 (15,408)
Investment in assets of affiliate (Note 2)
—
 (14,861)
Proceeds from limited partnership units issued by affiliate (Note 2)
—
 14,184
Net Cash Provided by (Used in) Investing Activities175,305
 (27,984)
Cash Flows — Financing Activities   
Repayments of Senior Unsecured Credit Facility(1,557,814) (837,575)
Proceeds from Senior Unsecured Credit Facility1,189,591
 720,568
Proceeds from issuance of Unsecured Senior Notes530,456
 348,887
Distributions paid(322,389) (310,509)
Scheduled payments of mortgage principal(303,538) (113,420)
Prepayments of mortgage principal(157,370) (193,030)
Contributions from noncontrolling interests90,487
 135
Proceeds from shares issued under “at-the-market” offering, net of selling costs22,833
 84,093
Distributions paid to noncontrolling interests(16,910) (13,418)
Payment of financing costs(12,672) (2,949)
Payments for withholding taxes upon delivery of equity-based awards and exercises of stock options(11,423) (15,943)
Change in financing restricted cash(2,097) 926
Proceeds from mortgage financing969
 33,935
Proceeds from exercise of stock options and purchases under the employee share purchase plan149
 204
Net Cash Used in Financing Activities(549,728) (298,096)
Change in Cash and Cash Equivalents During the Period   
Effect of exchange rate changes on cash and cash equivalents6,834
 860
Net increase in cash and cash equivalents14,288
 52,256
Cash and cash equivalents, beginning of period155,482
 157,227
Cash and cash equivalents, end of period$169,770
 $209,483
Six Months Ended June 30,
20222021
Cash Flows — Operating Activities
Net income$284,711 $171,924 
Adjustments to net income:
Depreciation and amortization, including intangible assets and deferred financing costs237,672 232,111 
Gain on sale of real estate, net(42,367)(29,212)
Straight-line rent adjustments(27,146)(21,986)
Impairment charges26,385 — 
Amortization of rent-related intangibles and deferred rental revenue22,701 28,554 
Stock-based compensation expense17,591 14,429 
Distributions of earnings from equity method investments15,907 3,730 
Net realized and unrealized (gains) losses on equity securities, extinguishment of debt, foreign currency exchange rate movements, and other(12,621)39,781 
(Earnings) losses from equity method investments(12,173)9,889 
Deferred income tax benefit(1,597)(2,351)
Asset management revenue received in shares of CPA:18 – Global(1,024)(6,292)
Change in allowance for credit losses(980)(6,249)
Net changes in other operating assets and liabilities(60,176)(35,581)
Net Cash Provided by Operating Activities446,883 398,747 
Cash Flows — Investing Activities
Purchases of real estate(614,397)(837,003)
Proceeds from sales of real estate115,133 98,433 
Proceeds from redemption of securities65,000 — 
Funding for real estate construction, redevelopments, and other capital expenditures on real estate(56,741)(54,381)
Capital contributions to equity method investments(39,609)(88,692)
Funding of short-term loans to affiliates(26,000)(31,000)
Investment in loan receivable(19,293)— 
Proceeds from repayment of short-term loans to affiliates10,000 37,048 
Return of capital from equity method investments8,105 11,627 
Other investing activities, net(2,723)(21,913)
Net Cash Used in Investing Activities(560,525)(885,881)
Cash Flows — Financing Activities
Proceeds from Unsecured Revolving Credit Facility696,984 1,088,217 
Repayments of Unsecured Revolving Credit Facility(657,866)(893,104)
Dividends paid(407,728)(372,585)
Proceeds from term loan283,139 — 
Proceeds from shares issued under ATM Program, net of selling costs218,095 302,512 
Scheduled payments of mortgage principal(14,705)(20,239)
Prepayments of mortgage principal(10,380)(426,907)
Payments for withholding taxes upon delivery of equity-based awards(6,599)(3,777)
Other financing activities, net5,656 2,250 
Distributions paid to noncontrolling interests(65)(56)
Proceeds from issuance of Senior Unsecured Notes— 1,038,391 
Redemption of Senior Unsecured Notes— (617,442)
Proceeds from shares issued under our Equity Forwards, net of selling costs— 309,864 
Payment of financing costs— (8,176)
Net Cash Provided by Financing Activities106,531 398,948 
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(10,346)(5,390)
Net decrease in cash and cash equivalents and restricted cash(17,457)(93,576)
Cash and cash equivalents and restricted cash, beginning of period217,950 311,779 
Cash and cash equivalents and restricted cash, end of period$200,493 $218,203 


See Notes to Consolidated Financial Statements.

W. P. Carey 6/30/2022 10-Q– 8


W. P. Carey 9/30/2017 10-Q– 7



W. P. CAREY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Note 1. Business and Organization
 
W. P. Carey Inc., or (“W. P. Carey,Carey”) is together with its consolidated subsidiaries, a REIT that, provides long-term financing via sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment portfolio. We investtogether with our consolidated subsidiaries, invests primarily in operationally-critical, single-tenant commercial real estate properties domesticallylocated in the United States and internationally.Northern and Western Europe on a long-term basis. We earn revenue principally by leasing the properties we own to single corporate tenants,companies on a triple-net lease basis, which generally requires each tenant to pay the costs associated with operating and maintaining the property.


Originally foundedFounded in 1973, we reorganized as a REIT in September 2012 in connection with our merger with Corporate Property Associates 15 Incorporated. We refer to that merger as the CPA®:15 Merger. On January 31, 2014, Corporate Property Associates 16 – Global Incorporated, or CPA®:16 – Global, merged with and into us, which we refer to as the CPA®:16 Merger. Our shares of common stock are listed on the New York Stock Exchange under the symbol “WPC.”


On February 27, 2022, we, Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”) (a publicly owned, non-traded REIT that primarily invests in commercial real estate properties and is advised by us), CPA:18 Limited Partnership (a subsidiary of CPA:18 – Global, “CPA:18 LP”), and certain of our subsidiaries entered into an agreement and plan of merger (the “Merger Agreement”), pursuant to which CPA:18 – Global will merge with and into one of our indirect subsidiaries in exchange for shares of our common stock and cash (the “Proposed Merger”). The Proposed Merger and related transactions were approved by the stockholders of CPA:18 – Global at a special meeting on July 26, 2022. We currently expect the transaction to close on August 1, 2022.

Subject to the terms and conditions contained in the Merger Agreement, at the effective time of the Proposed Merger, each share of CPA:18 – Global common stock issued and outstanding immediately prior to the effective time of the Proposed Merger will be canceled and, in exchange for cancellation of such share, the rights attaching to such share will be converted automatically into the right to receive (i) 0.0978 shares of our common stock and (ii) $3.00 in cash, which we refer to herein as the Merger Consideration. Each share of CPA:18 – Global common stock owned by us or any of our subsidiaries immediately prior to the effective time of the Proposed Merger will automatically be canceled and retired, and will cease to exist, for no Merger Consideration.

We have elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code.Code effective as of February 15, 2012. As a REIT, we are not generally subject to United States federal income taxation other than fromtaxes on income and gains that we distribute to our taxable REIT subsidiaries, or TRSs,stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We also own real property in jurisdictions outside the United States through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. Through our taxable REIT subsidiaries (“TRSs”), we also earn revenue as the advisor to certain non-traded investment programs. We hold all of our real estate assets attributable to our Owned Real Estate segment under the REIT structure, while the activities conducted by our Investment Management segment subsidiaries have been organized under TRSs.


Through our TRSs, we also earn revenue as the advisor to publicly owned, non-listed REITs, which are sponsored by us under the Corporate Property Associates, or CPA®,brand name and invest in similar properties. At SeptemberJune 30, 2017,2022, we were the advisor to Corporate Property Associates 17 – Global Incorporated, or CPA®:17 – Global, and Corporate Property Associates 18 – Global Incorporated, or CPA®:18 – Global. We refer to CPA®:17 – Global and CPA®:18 – Global together as the CPA® REITs.

At September 30, 2017, we were also the advisor to 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 REITsfollowing entities (Note 3).:


At September 30, 2017, we were also the advisor to •CPA:18 – Global; and
•Carey European Student Housing Fund I, L.P. (“CESH”), 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). Europe.

We refer to the Managed REITsCPA:18 – Global and CESH I collectively as the Managed“Managed Programs.

On June 15, 2017, our board of directors,” We no longer raise capital for new or the Board, approved a plan to exit all non-traded retail fundraising activities carried out by our wholly-owned broker-dealer subsidiary, Carey Financial LLC, or Carey Financial, as of June 30, 2017. Weexisting funds, but currently expect to continue to manage all existing Managed Programsmanaging CPA:18 – Global and CESH through the end of their respective natural life cycles (Note 3).

In August 2017, we resigned as the advisor to Carey Credit Income Fund (known as Guggenheim Credit Income Fund since October 23, 2017), or CCIF, and by extension, its feeder funds, or the CCIF Feeder Funds, each of which is a business development company, or BDC (Note 3). We refer to CCIF and the CCIF Feeder Funds collectively as the Managed BDCs. The board of trustees of CCIF approved our resignation and appointed CCIF’s subadvisor Guggenheim Partners Investment Management, LLC, or Guggenheim, as the interim sole advisor to CCIF, effective as of September 11, 2017. The shareholders of CCIF approved Guggenheim’s appointment as sole advisor on a permanent basis on October 20, 2017. The Managed BDCs were included in the Managed Programs prior to our resignation as their advisor.



W. P. Carey 9/30/2017 10-Q– 8
Notes to Consolidated Financial Statements (Unaudited)


Reportable Segments

As a resultReal Estate — Lease revenues from our real estate investments generate the vast majority of our Board’s decision to exit all non-traded retail fundraising activities, described above, we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include equity income generated through our (i) ownership of shares and limited partnership units of the Managed Programs and (ii) special general partner interests in the operating partnerships of the Managed REITs in our Investment Management segment. Previously, these items were recognized within our Owned Real Estate segment.earnings. We also include our equity investments in the Managed Programs in our Investment Management segment. Both (i) earnings from our investment in CCIF and (ii) our investment in CCIF continue to be included in our Investment Management segment. Results of operations and assets by segment for prior periods have been reclassified to conform to the current period presentation.

Owned Real Estate — We own and invest primarily in commercial properties principallylocated in North America,the United States and Northern and Western Europe, Australia, and Asia, which are leased to companies primarily on a triple-net lease basis. We also own two hotels, which are considered operating properties. We earn lease revenues from our wholly-owned and co-owned real estate investments that we control. In addition, we generate equity income through co-owned real estate investments that we do not control (Note 7). At SeptemberJune 30, 2017,2022, our owned portfolio was comprised of our full or partial ownership interests in 8901,357 properties, totaling approximately 85.9161 million square feet, substantially all of which were net leased to 211356 tenants, with a weighted-average lease term of 11.0 years and an occupancy rate of 99.8%99.1%. In addition, at June 30, 2022, our portfolio was comprised of full or partial ownership interests in 20 operating properties, including 19 self-storage properties and 1 hotel, totaling approximately 1.4 million square feet.


W. P. Carey 6/30/2022 10-Q– 9

Notes to Consolidated Financial Statements (Unaudited)
Investment Management — Through our TRSs, we structure and negotiate investments and debt placement transactionsmanage the real estate investment portfolios for the Managed Programs, for which we earn structuring revenue, and manage their portfolios of real estate investments, for which we earn asset management revenue. We also earned asset management revenue from CCIF based on the average of its gross assets at fair value through the effective date of our resignation as its advisor. We may earn disposition revenue when we negotiate and structure the sale of properties on behalf of the Managed REITs, and we may also earn incentive revenue and receive other compensation through our advisory agreements with certain of the Managed Programs, including in connection with providing a liquidity eventsevent for the Managed REITs’CPA:18 – Global’s stockholders.

In addition, we generateinclude equity income generated through our (i) ownership of shares and limited partnership units of the Managed Programs (Note 7). Through our and (ii) special general partner interestsinterest in the operating partnershipspartnership of CPA:18 – Global (through which we participate in its cash flows (Note 3)), in our Investment Management segment.

At June 30, 2022, the Managed REITs, we also participate in their cash flows (Note 3). Our Board’s decision to exit all non-traded retail fundraising activities through Carey Financial as of June 30, 2017, as discussed above, will not affect the continuation of these current revenue streams. At September 30, 2017, the CPA® REITs collectivelyPrograms owned all or a portion of 46146 net-leased properties (including certain properties in which we also have an ownership interest), totaling approximately 54.19.7 million square feet, substantially all of which were net leased to 20747 tenants, with an occupancy rate of approximately 99.7%99.3%. The Managed Programs also had interests in 16666 operating properties totaling(totaling approximately 20.25.1 million square feet in the aggregate.aggregate) and 2 active build-to-suit projects at the same date.


Note 2. Basis of Presentation


Basis of Presentation


Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a faircomplete statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States or GAAP.

(“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statementpresentation of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2016,2021, which are included in the 20162021 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year.


The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.



W. P. Carey 9/30/2017 10-Q– 9
Notes to Consolidated Financial Statements (Unaudited)


Basis of Consolidation


Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries and our tenancy-in-common interest as described below.subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.


When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entitiesThere have been no significant changes in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial supportour VIE policies from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided forwhat was disclosed in the partnership agreement or other related contracts2021 Annual Report.

W. P. Carey 6/30/2022 10-Q– 10

Notes to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.Consolidated Financial Statements (Unaudited)

At Septemberboth June 30, 2017,2022 and December 31, 2021, we considered 2814 entities to be VIEs, 21 of which we consolidated 6, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in theour consolidated balance sheets (in thousands):
June 30, 2022December 31, 2021
Land, buildings and improvements$429,623 $426,831 
Net investments in direct financing leases and loans receivable144,103 144,103 
In-place lease intangible assets and other44,165 42,884 
Above-market rent intangible assets26,720 26,720 
Accumulated depreciation and amortization(162,739)(154,413)
Total assets499,806 500,884 
Non-recourse mortgages, net$1,279 $1,485 
Below-market rent and other intangible liabilities, net19,711 20,568 
Total liabilities44,233 46,302 
 September 30, 2017 
December 31, 2016 (a)
Land, buildings and improvements$910,495
 $886,148
Net investments in direct financing leases39,897
 60,294
In-place lease and other intangible assets265,852
 245,480
Above-market rent intangible assets102,432
 98,043
Accumulated depreciation and amortization(231,323) (184,710)
Total assets1,129,154
 1,150,093
    
Non-recourse mortgages, net$128,659
 $406,574
Total liabilities202,514
 548,659
__________
(a)In 2017, we reclassified certain line items in our consolidated balance sheets, as described below. As a result, prior period amounts for certain line items included within Net investments in real estate have been reclassified to conform to the current period presentation.


At Septemberboth June 30, 2017,2022 and December 31, 2021, our seven8 unconsolidated VIEs included our interests in six(i) 6 unconsolidated real estate investments, which we account for under the equity method of accounting and one unconsolidated entity, which we account for under the cost method of accounting and is included within our Investment Management segment. At December 31, 2016, our seven unconsolidated VIEs included our interests in six unconsolidated real estate investments and one unconsolidated entity among our interests in the Managed Programs, all of which we accounted for under the equity method of accounting. We(we do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities.entities), and (ii) 2 unconsolidated investments in equity securities, which we accounted for as investments in shares of the entities at fair value. As of SeptemberJune 30, 20172022, and December 31, 2016,2021, the net carrying amount of our investments in these entities was $152.8$612.9 million and $152.9$581.3 million, respectively, and our maximum exposure to loss in these entities was limited to our investments.

At September 30, 2017, we had an investment in a tenancy-in-common interest in various underlying international properties. Consolidation of this investment is not required as such interest does not qualify as a VIE and does not meet the control


W. P. Carey 9/30/2017 10-Q– 10
Notes to Consolidated Financial Statements (Unaudited)

requirement for consolidation. Accordingly, we account for this investment using the equity method of accounting. We use the equity method of accounting because the shared decision-making involved in a tenancy-in-common interest investment provides us with significant influence on the operating and financial decisions of this investment.

At times, the carrying value of our equity investments may fall below zero for certain investments. We intend to fund our share of the jointly owned investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments, nor do we have any legal obligation to fund operating deficits. At September 30, 2017, none of our equity investments had carrying values below zero.

On April 20, 2016, we formed a limited partnership, CESH I, for the purpose of developing, owning, and operating student housing properties and similar investments in Europe. CESH I commenced fundraising in July 2016 through a private placement with an initial offering of $100.0 million and a maximum offering of $150.0 million. Prior to August 30, 2016, which is the date that we had collected $14.2 million of net proceeds on behalf of CESH I from limited partnership units issued in the private placement (primarily to independent investors), we had included CESH I’s financial results and balances in our consolidated financial statements. On August 31, 2016, we determined that CESH I had sufficient equity to finance its operations and that we were no longer considered the primary beneficiary, and as a result we deconsolidated CESH I and began to account for our interest in it at fair value by electing the equity method fair value option available under GAAP. As of August 31, 2016, CESH I had assets totaling $30.3 million on our consolidated balance sheet, including $15.4 million in Cash and cash equivalents and $14.9 million in Other assets, net. In connection with the deconsolidation, we recorded offsetting amounts of $14.2 million for the nine months ended September 30, 2016 in Contributions from noncontrolling interests and Deconsolidation of affiliate in the consolidated statements of equity, and in Proceeds from limited partnership units issued by affiliate and Deconsolidation of affiliate in the consolidated statements of cash flows. We recognized a gain on deconsolidation of $1.9 million, which is included in Other income and (expenses) in the consolidated statements of income for the three and nine months ended September 30, 2016. The deconsolidation did not have a material impact on our financial position or results of operations. Following the deconsolidation, we continue to serve as the advisor to CESH I (Note 3).

Out-of-Period Adjustments

During the second quarter of 2016, we identified and recorded out-of-period adjustments related to adjustments to prior period income tax returns. We concluded that these adjustments were not material to our consolidated financial statements for any of the current or prior periods presented. The net adjustment is reflected as a $3.0 million reduction of our Benefit from income taxes in the consolidated statements of income for the nine months ended September 30, 2016.


Reclassifications


Certain prior period amounts have been reclassified to conform to the current period presentation.


In 2017, we reclassified in-place lease intangible assets, net, below-market ground lease intangible assets, net (previously included in Other assets, net),We currently present Income from direct financing leases and above-market rent intangible assets, net to be included within Net investments in real estate in our consolidated balance sheets. The accumulated amortizationloans receivable on these assets is now included in Accumulated depreciation and amortization in our consolidated balance sheets. We also retitled theits own line item Real estate to Land, buildings and improvements in our consolidated balance sheets. In addition, we included the line item Operating real estate, which had previously appeared in our consolidated balance sheets, within Land, buildings and improvements in our consolidated balance sheets. Prior period balances have been reclassified to conform to the current period presentation.

As a result of our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017 (Note 1), we have revised how we view and present a component of our two reportable segments. As such, effective since the second quarter of 2017, we include (i) equity in earnings of equity method investments in the Managed Programs and (ii) equity investments in the Managed Programs in our Investment Management segment. Results of operations and assets by segment for prior periods have been reclassified to conform to the current period presentation.

In connection with our adoption of Accounting Standards Update, or ASU, 2016-09, Improvements to Employee Share-Based Payment Accounting, as described below, we retrospectively reclassified Payments for withholding taxes upon delivery of equity-based awards and exercises of stock options from Net cash provided by operating activities to Net cash used in financing activities within our consolidated statements of cash flows.income. Previously, income from direct financing leases was included within Lease revenues and income from loans receivable was included within Lease termination income and other in the consolidated statements of income.



Revenue Recognition


W. P. Carey 9/30/2017 10-Q– 11
Notes to Consolidated Financial Statements (Unaudited)

Recent Accounting Pronouncements

In May 2014, the FinancialThere have been no significant changes in our policies for revenue from contracts under Accounting Standards Board, or FASB, issued ASU 2014-09, RevenueCodification (“ASC”) 606 from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depictwhat was disclosed in the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-092021 Annual Report. ASC 606 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily applyapplies to revenues generated from our hotel operating properties and our Investment Management business. We will adopt this guidancesegment. Revenue from contracts for our interimReal Estate segment primarily represented hotel operating property revenues of $3.3 million and annual periods beginning January 1, 2018 using one$1.7 million for the three months ended June 30, 2022 and 2021, respectively, and $5.4 million and $2.5 million for the six months ended June 30, 2022 and 2021, respectively (Note 15). Revenue from contracts under ASC 606 from our Investment Management segment is discussed in Note 3.

Lease revenue (including straight-line lease revenue) is only recognized when deemed probable of two methods: retrospective restatementcollection. Collectibility is assessed for each reporting period presented attenant receivable using various criteria including credit ratings (Note 5), guarantees, past collection issues, and the time of adoption, or retrospectively withcurrent economic and business environment affecting the cumulative effect of initially applying this guidance recognized at the date of initial application. We have not decided which method of adoption we will use. We are evaluating the impacttenant. If collectibility of the new standard and havecontractual rent stream is not yet determined if itdeemed probable, revenue will have a material impact on our business or our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, wouldonly be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchangedrecognized upon receipt of cash from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. In addition, it also requires lessors to record gross revenues and expenses associated with activities that do not transfer services to the lessee (such as real estate taxes and insurance). Additionally, the new standard requires extensive quantitative and qualitative disclosures. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. We will adopt this guidance for our interim and annual periods beginning January 1, 2019. The ASU is expected to impact our consolidated financial statements as we have certain operating office and land lease arrangements for which we are the lessee. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements.tenant.


In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 amends Accounting Standards Codification, or ASC, Topic 718, Compensation-Stock Based Compensation to simplify various aspects of how share-based payments are accounted for and presented in the financial statements including (i) reflecting income tax effects of share-based payments through the income statement, (ii) allowing statutory tax withholding requirements at the employees’ maximum individual tax rate without requiring awards to be classified as liabilities, and (iii) permitting an entity to make an accounting policy election for the impact of forfeitures on the recognition of expense. ASU 2016-09 is effective for public business entities for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period, with early adoption permitted.

We adopted ASU 2016-09 as of January 1, 2017 and elected to account for forfeitures as they occur, rather than to account for them based on an estimate of expected forfeitures. This election was adopted using a modified retrospective transition method, with a cumulative effect adjustment to retained earnings. The related financial statement impact of this adjustment is not material. Depending on several factors, such as the market price of our common stock, employee stock option exercise behavior, and corporate income tax rates, the excess tax benefits associated with the exercise of stock options and the vesting and delivery of restricted share awards, or RSAs, restricted share units, or RSUs, and performance share units, or PSUs, could generate a significant income tax benefit in a particular interim period, potentially creating volatility in Net income attributable to W. P. Carey and basic and diluted earnings per share between interim periods. Under the former accounting guidance, windfall tax benefits related to stock-based compensation were recognized within Additional paid-in capital in our consolidated financial statements. Under ASU 2016-09, these amounts are reflected as a reduction to Provision for income taxes. For reference, windfall tax benefits related to stock-based compensation recorded in Additional paid-in capital for the years ended December 31, 2016 and 2015 were $6.7 million and $12.5 million, respectively. Windfall tax benefits related to stock-based compensation recorded as a deferred tax benefit for the three and nine months ended September 30, 2017 were $0.6 million and $3.6 million, respectively.6/30/2022 10-Q– 11


In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within


W. P. Carey 9/30/2017 10-Q– 12
Notes to Consolidated Financial Statements (Unaudited)

those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. ASU 2016-15 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-15 on our consolidated financial statements and will retrospectively adopt the standard for the fiscal year beginning January 1, 2018.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. ASU 2016-17 changes how a reporting entity that is a decision maker should consider indirect interests in a VIE held through an entity under common control. If a decision maker must evaluate whether it is the primary beneficiary of a VIE, it will only need to consider its proportionate indirect interest in the VIE held through a common control party. ASU 2016-17 amends ASU 2015-02, which we adopted on January 1, 2016, and which currently directs the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. ASU 2016-17 is effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted ASU 2016-17 as of January 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 intends to reduce diversity in practice for the classification and presentation

The following table provides a reconciliation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconcilingand restricted cash reported within the beginning-of-period and end-of-period total amounts shown onconsolidated balance sheets to the statementconsolidated statements of cash flows. ASU 2016-18 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periodsflows (in thousands):
June 30, 2022December 31, 2021
Cash and cash equivalents$103,590 $165,427 
Restricted cash (a)
96,903 52,523 
Total cash and cash equivalents and restricted cash$200,493 $217,950 
__________
(a)Restricted cash is included within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2016-18Other assets, net on our consolidated financial statements and will retrospectively adopt the standard for the fiscal year beginning January 1, 2018.balance sheets.


In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We elected to early adopt ASU 2017-01 on January 1, 2017 on a prospective basis. While our acquisitions have historically been classified as either business combinations or asset acquisitions, certain acquisitions that were classified as business combinations by us likely would have been considered asset acquisitions under the new standard. As a result, transaction costs are more likely to be capitalized since we expect most of our future acquisitions to be classified as asset acquisitions under this new standard. In addition, goodwill that was previously allocated to businesses that were sold or held for sale will no longer be allocated and written off upon sale if future sales were deemed to be sales of assets and not businesses.

In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 removes step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. ASU 2017-04 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years in which a goodwill impairment test is performed, with early adoption permitted. We adopted ASU 2017-04 as of April 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements.



W. P. Carey 9/30/2017 10-Q– 13
Notes to Consolidated Financial Statements (Unaudited)

In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. ASU 2017-05 is effective for periods beginning after December 15, 2017, with early application permitted for fiscal years beginning after December 15, 2016. We are in the process of evaluating the impact of ASU 2017-05 on our consolidated financial statements and will adopt the standard for the fiscal year beginning January 1, 2018.

In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies when to account for a change to the terms and conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, vesting conditions, or classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-09 on our consolidated financial statements and will adopt the standard for the fiscal year beginning January 1, 2018.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our consolidated financial statements.



W. P. Carey 9/30/2017 10-Q– 14
Notes to Consolidated Financial Statements (Unaudited)

Note 3. Agreements and Transactions with Related Parties
 
Proposed Merger with CPA:18 – Global

The Proposed Merger with CPA:18 – Global is described in Note 1.

Advisory Agreements and Partnership Agreements with the Managed Programs
 
We currently have advisory agreements with each of the Managed Programs,CPA:18 – Global and CESH, pursuant to which we earn fees and are entitled to receive reimbursement for certain fund management expenses, as well as cash distributions. The advisory agreements also entitled us to fees for serving as the dealer manager of the offerings of the Managed Programs. However, as previously noted, as of June 30, 2017, we ceased all active non-traded retail fundraising activities.expenses. We facilitated the orderly processing of sales of shares of the common stock and limited partnership units of CWI 2 and CESH I, respectively, through July 31, 2017 and closed their respective offerings on that date, and as a result, stopped receiving dealer manager fees after that date. In addition, in August 2017, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective as of September 11, 2017, and as a result, we no longer earned any fees from CCIF after that date. Weraise capital for new or existing funds, but we currently expect to continue to manage all existing Managed ProgramsCPA:18 – Global and CESH and earn various fees (as described below) through the end of their respective natural life cycles (Note 1). The advisorycycles. We have partnership agreements with eachCPA:18 – Global and CESH, and under the partnership agreement with CPA:18 – Global, we are entitled to receive certain cash distributions from its operating partnership. Upon the expected completion of the Managed REITs have terms of one year, may be renewed for successive one-year periods, and are currently scheduled to expire on December 31, 2017, unless otherwise renewed. TheProposed Merger, the advisory agreement and partnership agreement with CESH I,CPA:18 – Global will be terminated, after which commenced June 3, 2016,we will continue until terminated pursuantno longer receive fees and distributions from CPA:18 – Global.

The merger between Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”), two former affiliates (the “CWI 1 and CWI 2 Merger”), closed on April 13, 2020 and is discussed in detail in the 2021 Annual Report. Subsequently, CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”). In connection with the CWI 1 and CWI 2 Merger, we entered into a transition services agreement, under which we provided certain transition services at cost to its terms.WLT generally for a period of 12 months from closing. On October 13, 2021, all services provided under the transition services agreement were terminated.


The following tables present a summary of revenue earned, and/or cash receivedreimbursable costs, and distributions of Available Cash received/accrued from the Managed Programs and WLT for the periods indicated, included in the consolidated financial statements. Asset management revenue excludes amounts received from third partiesstatements (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Asset management revenue (a) (b)
$3,467 $3,966 $6,887 $7,920 
Distributions of Available Cash (c)
2,814 1,787 5,401 3,326 
Reimbursable costs from affiliates (a)
1,143 968 2,070 2,009 
Interest income on deferred acquisition fees and loans to affiliates (d)
75 30 108 64 
$7,499 $6,751 $14,466 $13,319 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Asset management revenue$17,938
 $15,955
 $53,271
 $45,535
Distributions of Available Cash12,047
 10,876
 34,568
 32,018
Structuring revenue9,817
 12,301
 27,981
 30,990
Reimbursable costs from affiliates6,211
 14,540
 45,390
 46,372
Interest income on deferred acquisition fees and loans to affiliates447
 130
 1,464
 492
Dealer manager fees105
 1,835
 4,430
 5,379
Other advisory revenue99
 522
 896
 522
 $46,664
 $56,159
 $168,000
 $161,308
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
CPA:18 – Global
$6,937 $5,611 $13,388 $10,970 
CESH562 1,044 1,078 2,145 
WLT (reimbursed transition services)— 96 — 204 
$7,499 $6,751 $14,466 $13,319 
__________
W. P. Carey 6/30/2022 10-Q– 12
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
CPA®:17 – Global
$15,383
 $16,616
 $55,645
 $51,820
CPA®:18 – Global 
4,042
 5,259
 18,361
 22,851
CWI 111,940
 7,771
 26,051
 26,453
CWI 211,643
 19,924
 45,206
 49,233
CCIF1,787
 3,388
 12,777
 7,750
CESH I1,869
 3,201
 9,960
 3,201
 $46,664
 $56,159
 $168,000
 $161,308




W. P. Carey 9/30/2017 10-Q– 15
Notes to Consolidated Financial Statements (Unaudited)

(a)Amounts represent revenues from contracts under ASC 606.
(b)Included within Asset management and other revenue in the consolidated statements of income.
(c)Included within Earnings (losses) from equity method investments in the consolidated statements of income.
(d)Included within Non-operating income in the consolidated statements of income.

The following table presents a summary of amounts included in Due from affiliates in the consolidated financial statements (in thousands):
June 30, 2022December 31, 2021
Short-term loans to affiliates, including accrued interest$16,108 $— 
Asset management fees receivable1,767 494 
Reimbursable costs873 974 
Accounts receivable171 336 
Current acquisition fees receivable18 19 
Deferred acquisition fees receivable, including accrued interest— 3 
$18,937 $1,826 
 September 30, 2017 December 31, 2016
Short-term loans to affiliates, including accrued interest$132,210
 $237,613
Deferred acquisition fees receivable, including accrued interest10,720
 21,967
Accounts receivable5,358
 5,005
Reimbursable costs3,943
 4,427
Current acquisition fees receivable1,508
 8,024
Asset management fees receivable539
 2,449
Organization and offering costs58
 784
Distribution and shareholder servicing fees—
 19,341
 $154,336
 $299,610


Asset Management Revenue
 
Under the advisory agreements with the Managed Programs, we earn asset management revenue for managing their investment portfolios. The following table presents a summary of our asset management fee arrangements with the remaining Managed Programs:
Managed ProgramRatePayableDescription
CPA®:17CPA:18 – Global
0.5% – 1.75%1.5%2016 50% inIn shares of its Class A common stock and/or cash, and 50%at the option of CPA:18 – Global; payable in shares of its common stock; 2017 in shares of itsClass A common stock for 2021 through February 28, 2022; payable in cash effective as of March 1, 2022, in light of the Proposed MergerRate depends on the type of investment and is based on the average market or average equity value, as applicable
CPA®:18 – Global
CESH		0.5% – 1.5%1.0%In shares of its Class A common stockRate depends on the type of investment and is based on the average market or average equity value, as applicable
CWI 10.5%2016 in cash; 2017 in shares of its common stockRate 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 20.55%In shares of its Class A common stockRate 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
CCIF1.75% – 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 I1.0%In cashBased on gross assets at fair value


W. P. Carey 9/30/2017 10-Q– 16
Notes to Consolidated Financial Statements (Unaudited)


Structuring and Other Advisory Revenue
 
Under the terms of the advisory agreements with the Managed Programs, we may earn revenue for structuring and negotiating investments. For CPA:18 – Global and CESH, we may earn fees of 4.5% and 2.0%, respectively, of the total aggregate cost of the investments and related financing. We did not earn any structuring revenue from the Managed BDCs. The following table presents a summary of our structuring fee arrangements with the Managed Programs:or commitments made.
Managed ProgramRatePayableDescription
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 installmentsBased 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 installmentsBased on the total aggregate cost of the investments or commitments made; total limited to 6% of the contract prices in aggregate
CWI REITs2.5%In cash upon completion; 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 directorsBased on the total aggregate cost of the lodging investments or commitments made; loan refinancing transactions up to 1% of the principal amount; 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 I2.0%In cash upon completionBased on the total aggregate cost of investments or commitments made, including the acquisition, development, construction, or re-development of the investments



W. P. Carey 9/30/2017 10-Q– 17
Notes to Consolidated Financial Statements (Unaudited)


Reimbursable Costs from Affiliates
 
During their respective offering periods, theThe existing Managed Programs reimbursedreimburse us for certain costs that we incurred on their behalf, which consisted primarily of broker-dealer commissions, marketing costs, and an annual distribution and shareholder servicing fee, as applicable. The offerings for CWI 2 and CESH I closed on July 31, 2017. The Managed Programs will continue to reimburse usin cash for certain personnel and overhead costs that we incur on their behalf. The following tables present summariesFor CPA:18 – Global, such costs (excluding those related to our legal transactions group, our senior management, and our investments team) are charged to CPA:18 – Global based on the average of such fee arrangements:

Broker-Dealer Selling Commissions
Managed ProgramRatePayableDescription
CWI 2 Class A Shares
January 1, 2016 through March 31, 2017: $0.70

April 27, 2017 through July 31, 2017: $0.84 (a)
In cash upon share settlement; 100% re-allowed to broker-dealersPer share sold
CWI 2 Class T Shares
January 1, 2016 through March 31, 2017: $0.19

April 27, 2017 through July 31, 2017: $0.23 (a)
In cash upon share settlement; 100% re-allowed to broker-dealersPer share sold
CCIF Feeder Funds
Through September 10, 2017:
0% – 3% (b)
In cash upon share settlement; 100% re-allowed to broker-dealersBased on the selling price of each share sold; the offering for Carey Credit Income Fund 2016 T (known as Guggenheim Credit Income Fund 2016 T since October 23, 2017), or CCIF 2016 T, closed on April 28, 2017
CESH I
Up to 7.0% of gross offering proceeds (a)
In cash upon limited partnership unit settlement; 100% re-allowed to broker-dealersBased on the selling price of each limited partnership unit sold
__________
(a)After the end of active fundraising by Carey Financial on June 30, 2017, we facilitated the orderly processing of sales in the offerings of CWI 2 and CESH I through July 31, 2017, which then closed their respective offerings on that date.
(b)In August 2017, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective as of September 11, 2017.



W. P. Carey 9/30/2017 10-Q– 18
Notes to Consolidated Financial Statements (Unaudited)

Dealer Manager Fees
Managed ProgramRatePayableDescription
CWI 2 Class A Shares
January 1, 2016 through March 31, 2017: $0.30

April 27, 2017 through July 31, 2017: $0.36 (a)
Per share soldIn cash upon share settlement; a portion may be re-allowed to broker-dealers
CWI 2 Class T Shares
January 1, 2016 through March 31, 2017: $0.26

April 27, 2017 through July 31, 2017: $0.31 (a)
Per share soldIn cash upon share settlement; a portion may be re-allowed to broker-dealers
CCIF Feeder Funds
Through September 10, 2017: 2.50% – 3.0% (b)
Based on the selling price of each share soldIn cash upon share settlement; a portion may be re-allowed to broker-dealers; CCIF 2016 T’s offering closed on April 28, 2017
CESH I
Up to 3.0% of gross offering proceeds (a)
Per limited partnership unit soldIn cash upon limited partnership unit settlement; a portion may be re-allowed to broker-dealers
__________
(a)In connection with the end of active fundraising by Carey Financial on June 30, 2017, CWI 2 and CESH I facilitated the orderly processing of sales through July 31, 2017 and closed their respective offerings on that date.
(b)In August 2017, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective as of September 11, 2017.

Annual Distributionthe trailing 12-month aggregate reported revenues of the Managed Programs and Shareholder Servicing Fee
Managed ProgramRatePayableDescription
CPA®:18 – Global Class C Shares (a)
1.0%Accrued daily and payable quarterly in arrears in cash; a portion may be re-allowed to selected dealersBased on the purchase price per share sold or, once it was reported, the net asset value per share, or NAV; cease paying when underwriting compensation from all sources equals 10% of gross offering proceeds
CWI 2 Class T Shares (a)
1.0%Accrued daily and payable quarterly in arrears in cash; a portion may be re-allowed to selected dealersBased on the purchase price per share sold or, once it was reported, the NAV; cease paying on the earlier of six years or when underwriting compensation from all sources equals 10% of gross offering proceeds
CCIF 2016 T (b)
0.9%Payable quarterly in arrears in cash; 100% is re-allowed to selected dealersBased on the weighted-average net price of shares sold in the public offering; cease paying on the earlier of when underwriting compensation from all sources equals, including this fee, 10% of gross offering proceeds or the date at which a liquidity event occurs
__________
(a)In connection with our exit from all non-traded retail fundraising activities as of June 30, 2017, beginning with the payment for the third quarter of 2017 (which was made during the fourth quarter of 2017), the distribution and shareholder servicing fee is now paid directly to selected dealers by the respective funds. As a result, our liability to the selected dealers and the corresponding receivable from the funds were removed during the third quarter of 2017.
(b)In connection with our resignation as advisor to CCIF in August 2017, our dealer manager agreement was assigned to Guggenheim. As a result, our liability to the selected dealers and the corresponding receivable from CCIF was removed.


W. P. Carey 9/30/2017 10-Q– 19
Notes to Consolidated Financial Statements (Unaudited)

Personnelus, and Overhead Costs
Managed ProgramPayableDescription
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 2.0% and 2.2% of each CPA® REIT’spersonnel costs are capped at 1.0% of CPA:18 – Global’s pro rata lease revenues for 2017 and 2016, respectively; for the legal transactions group, costs are charged according to a fee schedule
CWI 1In cashActual 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
CWI 2In cashActual 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, prior to our resignation as the advisor to CCIF, effective September 11, 2017 (Note 1)
Actual expenses incurred, excluding those related to their investment management team and senior management team
CESH IIn cashActual expenses incurred

Organization and Offering Costs
Managed ProgramPayableDescription
CWI 2 (a)
In cash; within 60 days after the end of the quarter in which the offering terminatesActual costs incurred up to 1.5% of the gross offering proceeds
CCIF and CCIF Feeder Funds (b)
In cash; payable monthly, prior to our resignation as the advisor to CCIF, effective September 11, 2017 (Note 1)
Up to 1.5% of the gross offering proceeds; we were required to pay 50% of the organization and offering costs we received to the subadvisor
CESH I (a)
N/AIn lieu of reimbursing us for organization and offering costs, CESH I paid us limited partnership units, as described below under Other Advisory Revenue
__________
(a)In connection with the end of active fundraising by Carey Financial on June 30, 2017, CWI 2 and CESH I facilitated the orderly processing of sales through July 31, 2017 and closed their respective offerings on that date.
(b)In August 2017, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective as of September 11, 2017.

Other Advisory Revenue

Under the limited partnership agreement we have with CESH I, we paid all organization and offering costs on behalf of CESH I, and instead of being reimbursed by CESH I on a dollar-for-dollar basis for those costs, we received limited partnership units of CESH I equal to 2.5% of its gross offering proceeds. This revenue, which commenced in the third quarter of 2016, is included in Other advisory revenue in the consolidated statements of income and totaled $0.1 million and $0.7 million for the three and nine months ended September 30, 2017, respectively, and $0.5 million for both the three2022 and nine months ended September 30, 2016, respectively. In connection with the end of active non-traded retail fundraising by Carey Financial2021. For CESH, reimbursements are based on June 30, 2017, we facilitated the orderly processing of sales of CESH I through July 31, 2017, which closed its offering on that date.actual expenses incurred.



W. P. Carey 9/30/2017 10-Q– 20
Notes to Consolidated Financial Statements (Unaudited)

Expense Support and Conditional Reimbursements

Under the expense support and conditional reimbursement agreement we had with each of the CCIF Feeder Funds, we and the CCIF subadvisor were obligated to reimburse the CCIF Feeder Funds 50% of the excess of the cumulative distributions paid to the CCIF Feeder Funds’ shareholders over the available operating funds on a monthly basis. Following any month in which the available operating funds exceeded the cumulative distributions paid to its shareholders, the excess operating funds were used to reimburse us and the CCIF subadvisor for any expense payment we made within three years prior to the last business day of such month that had not been previously reimbursed by the CCIF Feeder Fund, up to the lesser of (i) 1.75% of each CCIF Feeder Fund’s average net assets or (ii) the percentage of each CCIF Feeder Fund’s average net assets attributable to its common shares represented by other operating expenses during the fiscal year in which such expense support payment from us and the CCIF’s subadvisor was made, provided that the effective rate of distributions per share at the time of reimbursement was not less than such rate at the time of expense payment. The expense support and conditional reimbursement agreement we had with each of the CCIF Feeder Funds was terminated in connection with our resignation as the advisor to CCIF effective as of September 11, 2017.

Distributions of Available Cash
 
We are entitled to receive distributions of up to 10% of the Available Cash (as defined in the respective advisory agreements)CPA:18 – Global’s partnership agreement) from the operating partnershipspartnership of each of the Managed REITs, as described in their respective operating partnership agreements,CPA:18 – Global, payable quarterly in arrears. We are required

W. P. Carey 6/30/2022 10-Q– 13

Notes to pay 20% and 25% of such distributions to the subadvisors of CWI 1 and CWI 2, respectively.Consolidated Financial Statements (Unaudited)

Back-End Fees and Interests in the Managed Programs


Under our advisory agreements with certain of the Managed Programs, we may also receive compensation in connection with providing liquidity events for their stockholders. ForSuch back-end fees or interests include or may include disposition fees, interests in disposition proceeds, and distributions related to ownership of shares or limited partnership units in the Managed REITs, the timing and form of such liquidity events are at the discretion of each REIT’s board of directors, and in certain instances, we have waived these fees in connection with the liquidity events of prior programs that we managed. Therefore, therePrograms. There can be no assurance as to whether or when any of these back-end fees or interests will be realized. Subject to the terms and conditions of the Merger Agreement, upon consummation of the Proposed Merger, we have agreed to waive certain back-end fees that we would have been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our advisory agreement and partnership agreement with CPA:18 – Global.


Other Transactions with Affiliates
 
Loans to Affiliates


From time to time, our Boardboard of directors has approved the making of secured and unsecured loans or lines of credit from us to certain of the Managed Programs, at our sole discretion, with each loan at a rate equal to the rate at which we are able to borrow funds under our senior credit facility (Note 10), generally for the purpose of facilitating acquisitions or for working capital purposes.


The following table sets forth certain information regardingprincipal outstanding balance on our loansline of credit to affiliates (dollarsCPA:18 – Global was $16.0 million as of June 30, 2022. No amounts were outstanding as of December 31, 2021. In July 2022, CPA:18 – Global repaid the principal outstanding balance in thousands):full.
  Interest Rate at
September 30, 2017		 Maturity Date at September 30, 2017 Maximum Loan Amount Authorized at September 30, 2017 
Principal Outstanding Balance at (a)
Managed Program    September 30, 2017 December 31, 2016
CWI 1 (b) (c) (d)
 LIBOR + 1.00% 6/30/2018; 12/31/2018 $100,000
 $97,835
 $—
CPA®:18 – Global (b) (e)
 LIBOR + 1.00% 10/31/2017; 5/15/2018 50,000
 19,000
 27,500
CESH I (b)
 LIBOR + 1.00% 5/3/2018; 5/9/2018 35,000
 14,461
 —
CWI 2 (f)
 N/A N/A N/A —
 210,000
        $131,296
 $237,500
__________
(a)Amounts exclude accrued interest of $0.9 million and $0.1 million at September 30, 2017 and December 31, 2016, respectively.
(b)LIBOR means London Interbank Offered Rate.
(c)We entered into a secured credit facility with CWI 1 in September 2017, comprised of a $75.0 million bridge loan to facilitate an acquisition and a $25.0 million revolving working capital facility.


W. P. Carey 9/30/2017 10-Q– 21
Notes to Consolidated Financial Statements (Unaudited)

(d)
In October 2017, CWI 1 repaid $29.2 million, in aggregate, of the loans outstanding to us at September 30, 2017 (Note 17).
(e)
In October 2017, CPA®:18 – Global repaid in full the amount outstanding to us at September 30, 2017 (Note 17).
(f)
In October 2017, we entered into a secured $25.0 million revolving working capital facility with CWI 2 (Note 17).


Other


At SeptemberJune 30, 2017,2022, we owned interests ranging from 3% to 90% in 9 jointly owned investments in real estate, including a jointly controlled tenancy-in-common interest in several properties, with the remaining interests generally held by affiliates.affiliates or third parties. We account for 8 such investments under the equity method of accounting (Note 7) and consolidate the remaining investment. In addition, we owned stock of each of the Managed REITs and CCIF,CPA:18 – Global and limited partnership units of CESH I.at that date. We consolidate certain of these investments and accountaccounted for the remainder either (i)our investment in CPA:18 – Global under the equity method of accounting (ii)and elected to account for our investment in CESH under the cost method of accounting, or (iii) at fair value by electing the equity method fair value option available under GAAP (Note 7).


Note 4. Land, Buildings and Improvements and Assets Held for Sale
 
Land, Buildings and Improvements — Operating Leases


Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands):
September 30, 2017 December 31, 2016June 30, 2022December 31, 2021
Land$1,132,569
 $1,128,933
Land$2,136,338 $2,151,327 
Buildings4,194,213
 4,053,334
Buildings and improvementsBuildings and improvements9,743,900 9,525,858 
Real estate under construction20,373
 21,859
Real estate under construction62,732 114,549 
Less: Accumulated depreciation(578,592) (472,294)Less: Accumulated depreciation(1,530,006)(1,448,020)
$4,768,563
 $4,731,832
$10,412,964 $10,343,714 
 
During the ninesix months ended SeptemberJune 30, 2017,2022, the U.S. dollar weakenedstrengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro increaseddecreased by 12.0%8.3% to $1.1806$1.0387 from $1.0541.$1.1326. As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements subject to operating leases increaseddecreased by $160.5$328.8 million from December 31, 20162021 to SeptemberJune 30, 2017.2022.


In connection with a change in lease classification due to termination of the underlying lease, we reclassified 1 property with an aggregate carrying value of $17.3 million from Net investments in direct financing leases and loans receivable to Land, buildings and improvements during the six months ended June 30, 2022 (Note 5).

Depreciation expense, including the effect of foreign currency translation, on our Land, buildings and improvements subject to operating leases was $36.3$73.0 million and $35.4$69.4 million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $107.5$145.0 million and $107.3$136.4 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016, respectively. Accumulated depreciation of real estate is included in Accumulated depreciation and amortization in the consolidated financial statements.

In connection with changes in lease classifications due to extensions of the underlying leases, we reclassified six properties with an aggregate carrying value of $1.6 million from Net investments in direct financing leases to Land, buildings and improvements during the nine months ended September 30, 2017 (Note 5).

Acquisition of Real Estate

On June 27, 2017, we acquired an industrial facility in Chicago, Illinois, which was deemed to be a real estate asset acquisition, at a total cost of $6.0 million, including land of $2.2 million, building of $2.5 million, and an in-place lease intangible asset of $1.3 million (Note 6). We also committed to fund an additional $3.6 million of building improvements at that facility by June 2018.

Real Estate Under Construction

During the nine months ended September 30, 2017, we capitalized real estate under construction totaling $43.5 million, including net accrual activity of $6.8 million, primarily related to construction projects on our properties. As of September 30, 2017, we had five construction projects in progress, and as of December 31, 2016, we had three construction projects in progress. Aggregate unfunded commitments totaled approximately $109.6 million and $135.2 million as of September 30, 2017 and December 31, 2016,2021, respectively.




W. P. Carey 6/30/2022 10-Q– 14

W. P. Carey 9/30/2017 10-Q– 22
Notes to Consolidated Financial Statements (Unaudited)

Acquisitions of Real Estate

During the ninesix months ended SeptemberJune 30, 2017,2022, we entered into the following investments, which were deemed to be real estate asset acquisitions (dollars in thousands):
Property Location(s)Number of PropertiesDate of AcquisitionProperty TypeTotal Capitalized Costs
Pleasant Prairie, Wisconsin11/10/2022Industrial$20,024 
Various, Spain (a)
262/3/2022Funeral Home146,364 
Various, Denmark (a) (b)
82/11/2022Retail33,976 
Laval, Canada (a)
12/18/2022Industrial21,459 
Chattanooga, Tennessee (c)
13/4/2022Warehouse43,198 
Various, United States (4 properties), Canada (1 property, and Mexico (1 property)64/27/2022; 5/9/2022Industrial80,595 
Various, United States65/16/2022Industrial; Warehouse110,381 
Various, Denmark (a) (b)
106/1/2022; 6/30/2022Retail42,635 
Medina, Ohio16/17/2022Industrial28,913 
Bree, Belgium (a)
16/30/2022Warehouse96,697 
61$624,242 
__________
(a)Amount reflects the applicable exchange rate on the date of transaction.
(b)We also entered into purchase agreements to acquire 13 additional retail facilities leased to this tenant totaling $49.3 million (based on the exchange rate of the Danish krone at June 30, 2022), which is expected to be completed in 2022.
(c)We also committed to fund an additional $22.8 million for an expansion at the facility, which is expected to be completed in the second quarter of 2023.

The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
Total Capitalized Costs
Land$77,122 
Buildings and improvements463,233 
Intangible assets and liabilities:
In-place lease (weighted-average expected life of 22.8 years)74,979 
Below-market rent (expected life of 6.8 years)(3,379)
Right-of-use assets:
Prepaid rent (a)
12,287 
$624,242 
__________
(a)Represents prepaid rent for a land lease. Therefore, there is no future obligation on the land lease asset and no corresponding operating lease liability. This asset is included in In-place lease intangible assets and other in the consolidated balance sheets.

Real Estate Under Construction

During the six months ended June 30, 2022, we capitalized real estate under construction totaling $46.4 million. The number of construction projects in progress with balances included in real estate under construction was 5 and 6 as of June 30, 2022 and December 31, 2021, respectively. Aggregate unfunded commitments totaled approximately $34.0 million and $55.3 million as of June 30, 2022 and December 31, 2021, respectively.

W. P. Carey 6/30/2022 10-Q– 15

Notes to Consolidated Financial Statements (Unaudited)
During the six months ended June 30, 2022, we completed the following construction projects at a total cost(dollars in thousands):
Property Location(s)Primary Transaction TypeNumber of PropertiesDate of CompletionProperty Type
Total Capitalized Costs (a)
Hurricane, UtahExpansion13/8/2022Warehouse$20,517 
Breda, Netherlands (a)
Expansion13/18/2022Warehouse4,721 
Bowling Green, KentuckyRenovation14/26/2022Warehouse72,971 
3$98,209 
__________
(a)Amount reflects the applicable exchange rate on the date of $59.0 million, of which $35.5 million was capitalized during 2016:transaction.


an expansion project at an industrial facility in Windsor, Connecticut in March 2017 at a cost totaling $3.3 million;
an expansion project at an educational facility in Coconut Creek, Florida in May 2017 at a cost totaling $18.2 million;
an expansion project at two industrial facilities in Monarto, Australia in May 2017 at a cost totaling $15.9 million; and
During the six months ended June 30, 2022, we committed to fund a build-to-suit project for an industrial facilityoutdoor advertising structure in McCalla, AlabamaMount Laurel, New Jersey, for an aggregate amount of $2.1 million. We currently expect to complete the project in the third quarter of 2022.

Capitalized interest incurred during construction was $0.4 million and $0.6 million for the three months ended June 2017 at a cost totaling $21.6 million.30, 2022 and 2021, respectively, and $1.1 million and $1.3 million for the six months ended June 30, 2022 and 2021, respectively, which reduces Interest expense in the consolidated statements of income.


Dispositions of Properties


During the ninesix months ended SeptemberJune 30, 2017,2022, we sold nine12 properties, and a parcel of vacant land, excluding the sale of one property that waswhich were classified as held for sale as of December 31, 2016,Land, buildings and transferred ownership of two propertiesimprovements subject to the related mortgage lender (Note 15).operating leases. As a result, the carrying value of our Land, buildings and improvements subject to operating leases decreased by $72.4$58.8 million from December 31, 20162021 to SeptemberJune 30, 2017.2022 (Note 14).


Future DispositionsLease Termination Income and Other

2022 — For the three and six months ended June 30, 2022, lease termination income and other on our consolidated statements of Propertiesincome included: (i) other lease-related settlements totaling $1.4 million and $6.1 million, respectively; (ii) income from a parking garage attached to one of our net-leased properties totaling $0.6 million and $1.2 million, respectively, and (iii) lease termination income of $8.2 million received from a tenant during the six months ended June 30, 2022.


As2021 — For the three and six months ended June 30, 2021, lease termination income and other on our consolidated statements of September 30, 2017, two tenants exercised optionsincome included: (i) lease-related settlements totaling $4.4 million and $5.3 million, respectively; and (ii) income from a parking garage attached to repurchaseone of our net-leased properties totaling $0.4 million and $0.9 million, respectively.

Leases

Operating Lease Income

Lease income related to operating leases recognized and included in the properties they are leasing from us in accordance with their lease agreements for an aggregateconsolidated statements of $23.1 million (the amount for one repurchaseincome is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Lease income — fixed$281,269 $261,704 $557,410 $519,031 
Lease income — variable (a)
33,085 27,360 64,669 54,698 
Total operating lease income$314,354 $289,064 $622,079 $573,729 
__________
(a)Includes (i) rent increases based on changes in the exchange rate of the euro as of September 30, 2017), but there can be no assurance that such repurchases will be completed. At September 30, 2017, these two properties had an aggregate asset carrying value of $17.5 million.U.S. Consumer Price Index and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services.


W. P. Carey 6/30/2022 10-Q– 16

Notes to Consolidated Financial Statements (Unaudited)
Land, Buildings and Improvements — Operating Properties
 
At both SeptemberJune 30, 20172022 and December 31, 2016,2021, Land, buildings and improvements attributable to operating properties consisted of our investments in two hotels, which are summarized as follows (in thousands): 
 September 30, 2017 December 31, 2016
Land$6,041
 $6,041
Buildings76,043
 75,670
Less: Accumulated depreciation(15,345) (12,143)
 $66,739
 $69,568

Depreciation expense on10 consolidated self-storage properties and 1 consolidated hotel. Below is a summary of our Land, buildings and improvements attributable to operating properties (in thousands):
June 30, 2022December 31, 2021
Land$10,452 $10,452 
Buildings and improvements73,249 73,221 
Less: Accumulated depreciation(18,051)(16,750)
$65,650 $66,923 

Depreciation expense on our buildings and improvements attributable to operating properties was $1.1$0.7 million for both the three months ended SeptemberJune 30, 20172022 and 2016,2021, and $3.2$1.4 million for both the ninesix months ended SeptemberJune 30, 20172022 and 2016. Accumulated depreciation of Land, buildings and improvements attributable to operating properties is included in Accumulated depreciation and amortization in the consolidated financial statements.2021.


Assets Held for Sale, Net


Below is a summary of our properties held for sale (in thousands):
June 30, 2022December 31, 2021
Land, buildings and improvements$— $10,628 
Accumulated depreciation and amortization— (2,359)
Assets held for sale, net$— $8,269 
 September 30, 2017 December 31, 2016
Real estate, net$6,146
 $—
Intangible assets, net4,450
 —
Net investments in direct financing leases—
 26,247
Assets held for sale$10,596
 $26,247


At September 30, 2017,December 31, 2021, we had one property2 properties classified as Assets held for sale, net, with aan aggregate carrying value of $10.6$8.3 million.

At December 31, 2016, we had one property classified as Assets held for sale with a carrying value of $26.2 million. In addition, there was a deferred tax liability of $2.5 million related to this property as of December 31, 2016, which is included in Deferred income taxes These properties were sold in the consolidated balance sheets. The property was sold during the nine months ended September 30, 2017 (Note 15).first quarter of 2022.




W. P. Carey 9/30/2017 10-Q– 23
Notes to Consolidated Financial Statements (Unaudited)

Note 5. Finance Receivables
 
Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in direct financing leases noteand loans receivable (net of allowance for credit losses), and deferred acquisition fees. Operating leases are not included in finance receivablesreceivables.

Finance Receivables

Net investments in direct financing leases and loans receivable are summarized as such amountsfollows (in thousands):
Maturity DateJune 30, 2022December 31, 2021
Net investments in direct financing leases (a)
2022 – 2036$530,318 $572,205 
Sale-leaseback transactions accounted for as loans receivable (b)
2038 – 2052232,001 217,229 
Secured loans receivable (c)
2022 – 202524,143 24,143 
$786,462 $813,577 
__________
(a)Amounts are not recognizednet of allowance for credit losses, as an assetdisclosed below under Net Investments in Direct Financing Leases.
(b)These investments are accounted for as loans receivable in accordance with ASC 310, Receivables and ASC 842, Leases. Maturity dates reflect the consolidated financial statements.current lease maturity dates.
(c)Amounts are net of allowance for credit losses of $12.6 million as of both June 30, 2022 and December 31, 2021.

W. P. Carey 6/30/2022 10-Q– 17

Notes to Consolidated Financial Statements (Unaudited)
Net Investments in Direct Financing Leases
 
Interest incomeNet investments in direct financing leases is summarized as follows (in thousands):
June 30, 2022December 31, 2021
Lease payments receivable$354,530 $414,002 
Unguaranteed residual value504,806 545,896 
859,336 959,898 
Less: unearned income(317,396)(370,353)
Less: allowance for credit losses (a)
(11,622)(17,340)
$530,318 $572,205 
__________
(a)During the six months ended June 30, 2022 and 2021, we recorded a net reversal of allowance for credit losses of $1.0 million and $6.2 million, respectively, on our net investments in direct financing leases due to changes in expected economic conditions and improved credit quality for certain tenants, which was included within Other gains and (losses) in our consolidated statements of income. In addition, during the six months ended June 30, 2022, we reduced the allowance for credit losses balance by $4.7 million, in connection with the reclassification of a property from Net investments in direct financing leases and loans receivable to Land, buildings and improvements subject to operating leases, as described below.

Income from direct financing leases, which wasis included in Lease revenuesIncome from direct financing leases and loans receivable in the consolidated financial statements, was $16.8$13.3 million and $17.6$16.2 million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $49.3$27.2 million and $53.9$33.3 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively.


During the ninesix months ended SeptemberJune 30, 2017,2022, we reclassified 1 property with an aggregate carrying value of $17.3 million from Net investments in direct financing leases and loans receivable to Land, buildings and improvements subject to operating leases in connection with a change in lease classification due to termination of the underlying lease. During the six months ended June 30, 2022, the U.S. dollar weakenedstrengthened against the euro, resulting in a $38.9$31.0 million increasedecrease in the carrying value of Net investments in direct financing leases and loans receivable from December 31, 20162021 to SeptemberJune 30, 2017. 2022.

Loans Receivable

During the ninesix months ended SeptemberJune 30, 2017,2022, we sold an international investment accounted for asentered into the following sale-leaseback, which was deemed to be a direct financing lease that had a net carrying valueloan receivable in accordance with ASC 310, Receivables and ASC 842, Leases (dollars in thousands):
Property Location(s)Number of PropertiesDate of AcquisitionProperty TypeTotal Investment
Various, Belgium (a)
56/22/2022Retail$19,795 
5$19,795 
__________
(a)Amount reflects the applicable exchange rate on the date of $1.7 million. During the nine months ended September 30, 2017, we reclassified six properties with a carrying value of $1.6 milliontransaction.

Earnings from Net investmentsour loans receivable are included in Income from direct financing leases to Land, buildings and improvements in connection with changes in lease classifications due to extensions of the underlying leases (Note 4).

Note Receivable

At September 30, 2017 and December 31, 2016, we had a noteloans receivable with an outstanding balance of $10.1 million and $10.4 million, respectively, representing the expected future payments under a sales type lease, which was included in Other assets, net in the consolidated financial statements. Earnings fromstatements, and totaled $4.5 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively, and $8.9 million and $1.8 million for the six months ended June 30, 2022 and 2021, respectively.

In the first quarter of 2021, we entered into an agreement with the borrowers for our note2 secured loans receivable, are included in Lease termination income and otherwho agreed to pay us at maturity a total of $3.7 million of unpaid interest due over the previous year. We did not recognize this interest in the consolidated financial statements.

Deferred Acquisition Fees Receivablestatements due to uncertainty of collectibility.
 
As described in Note 3, we earn revenue in connection with structuring and negotiating investments and related mortgage financing for the CPA® REITs. A portion of this revenue is due in equal annual installments over three years, provided the CPA® REITs meet their respective performance criteria. Unpaid deferred installments, including accrued interest, from the CPA® REITs were included in Due from affiliates in the consolidated financial statements.
W. P. Carey 6/30/2022 10-Q– 18

Notes to Consolidated Financial Statements (Unaudited)
Credit Quality of Finance Receivables
 
We generally seek investmentsinvest in facilities that we believe are critical to a tenant’s business and that we believetherefore have a lowlower risk of tenant default. As of December 31, 2016, we had an allowance for credit losses of $13.3 million on a single direct financing lease investment, including the impact of foreign currency translation. This allowance was established in the fourth quarter of 2015. During the nine months ended September 30, 2016, we increased the allowance by $7.1 million, which was recorded in Property expenses, excluding reimbursable tenant costs in the consolidated financial statements, due to a decline in the estimated amount of future payments we would receive from the tenant. We sold this direct financing lease investment in August 2017, as described above. At both SeptemberJune 30, 20172022 and December 31, 2016, none of the2021, other than uncollected income from our secured loans receivable (as noted above), no material balances of our finance receivables were past due. ThereOther than the lease termination noted under Net Investments in Direct Financing Leases above, there were no material modifications of finance receivables during the ninesix months ended SeptemberJune 30, 2017.2022.


We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. A credit quality of one through three indicates a range of investment grade to stable. A credit quality of four through five indicates a range of inclusion on the watch list to risk of default. The credit quality evaluation of our finance receivables was lastis updated in the third quarter of 2017. We believe the credit quality of our deferred acquisition fees receivable falls under category one, as the CPA® REITs are expected to have the available cash to make such payments.quarterly.
 


W. P. Carey 9/30/2017 10-Q– 24
Notes to Consolidated Financial Statements (Unaudited)

A summary of our finance receivables by internal credit quality rating, excluding our deferred acquisition fees receivable,allowance for credit losses, is as follows (dollars in thousands):
Number of Tenants / Obligors atCarrying Value at
Internal Credit Quality IndicatorJune 30, 2022December 31, 2021June 30, 2022December 31, 2021
1 – 31817$698,244 $703,280 
489112,433 140,230 
5——— — 
$810,677 $843,510 

  Number of Tenants / Obligors at Carrying Value at
Internal Credit Quality Indicator September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
1 - 3 24 27 $604,081
 $621,955
4 8 5 123,173
 70,811
5 — 1 —
 1,644
      $727,254
 $694,410

Note 6.Goodwill and Other Intangibles


We have recorded net lease, internal-use software development, and trade name intangibles that are being amortized over periods ranging from three yearsless than one year to 40 years. In addition, we have several ground lease intangibles that are being amortized over periods of up to 9948 years. In-place lease and below-market ground lease (as lessee) intangibles, at cost are included in In-place lease intangible assets and other intangible assets in the consolidated financial statements. Above-market rent intangibles, at cost are included in Above-market rent intangible assets in the consolidated financial statements. Accumulated amortization of in-place lease below-market ground lease (as lessee), and above-market rent intangibles is included in Accumulated depreciation and amortization in the consolidated financial statements. Internal-use software development and trade name intangibles are included in Other assets, net in the consolidated financial statements. Below-market rent above-market ground lease (as lessee), and below-market purchase option intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements.

In connection with our investment activity during the nine months ended September 30, 2017 (Note 4), we recorded an in-place lease intangible asset of $1.3 million, which has an expected life of 21 years.

Goodwill within our Owned Real Estate segment increased by $7.4 million during the nine months ended September 30, 2017 due to foreign currency translation adjustments, from $572.3 million as of December 31, 2016 to $579.7 million as of September 30, 2017. Goodwill within our Investment Management segment was $63.6 million as of September 30, 2017, unchanged from December 31, 2016. In connection with our Board’s decision to exit all non-traded retail fundraising activities (Note 1), we performed a test for impairment during the second quarter of 2017 on goodwill recorded in our Investment Management segment, and no impairment was indicated.




W. P. Carey 6/30/2022 10-Q– 19

W. P. Carey 9/30/2017 10-Q– 25
Notes to Consolidated Financial Statements (Unaudited)

Goodwill within our Real Estate segment decreased by $10.1 million during the six months ended June 30, 2022 due to foreign currency translation adjustments, from $872.2 million as of December 31, 2021 to $862.1 million as of June 30, 2022. Goodwill within our Investment Management segment was $29.3 million as of June 30, 2022, unchanged from December 31, 2021.

Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands):
June 30, 2022December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Finite-Lived Intangible Assets
Internal-use software development costs$19,661 $(18,923)$738 $19,553 $(18,682)$871 
Trade name3,975 (3,975)— 3,975 (3,581)394 
23,636 (22,898)738 23,528 (22,263)1,265 
Lease Intangibles:
In-place lease2,274,546 (983,304)1,291,242 2,279,905 (934,663)1,345,242 
Above-market rent822,470 (511,785)310,685 843,410 (489,861)353,549 
3,097,016 (1,495,089)1,601,927 3,123,315 (1,424,524)1,698,791 
Goodwill
Goodwill891,464 — 891,464 901,529 — 901,529 
Total intangible assets$4,012,116 $(1,517,987)$2,494,129 $4,048,372 $(1,446,787)$2,601,585 
Finite-Lived Intangible Liabilities
Below-market rent$(272,239)$114,184 $(158,055)$(272,483)$105,908 $(166,575)
Indefinite-Lived Intangible Liabilities
Below-market purchase option(16,711)— (16,711)(16,711)— (16,711)
Total intangible liabilities$(288,950)$114,184 $(174,766)$(289,194)$105,908 $(183,286)
 September 30, 2017 December 31, 2016
 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$18,649
 $(7,159) $11,490
 $18,568
 $(5,068) $13,500
Trade name3,975
 (200) 3,775
 3,975
 —
 3,975
 22,624
 (7,359) 15,265
 22,543
 (5,068) 17,475
Lease Intangibles:           
In-place lease1,185,107
 (398,237) 786,870
 1,148,232
 (322,119) 826,113
Above-market rent639,140
 (255,152) 383,988
 632,383
 (210,927) 421,456
Below-market ground lease18,693
 (1,698) 16,995
 23,140
 (1,381) 21,759
 1,842,940
 (655,087) 1,187,853
 1,803,755
 (534,427) 1,269,328
Indefinite-Lived Goodwill and Intangible Assets           
Goodwill643,321
 —
 643,321
 635,920
 —
 635,920
Below-market ground lease970
 —
 970
 866
 —
 866
 644,291
 —
 644,291
 636,786
 —
 636,786
Total intangible assets$2,509,855
 $(662,446) $1,847,409
 $2,463,084
 $(539,495) $1,923,589
            
Finite-Lived Intangible Liabilities           
Below-market rent$(136,319) $46,377
 $(89,942) $(133,137) $38,231
 $(94,906)
Above-market ground lease(13,206) 2,879
 (10,327) (12,948) 2,362
 (10,586)
 (149,525) 49,256
 (100,269) (146,085) 40,593
 (105,492)
Indefinite-Lived Intangible Liabilities           
Below-market purchase option(16,711) —
 (16,711) (16,711) —
 (16,711)
Total intangible liabilities$(166,236) $49,256
 $(116,980) $(162,796) $40,593
 $(122,203)


During the six months ended June 30, 2022, the U.S. dollar strengthened against the euro, resulting in a decrease of $53.4 million in the carrying value of our net intangible assets from December 31, 2021 to June 30, 2022. Net amortization of intangibles, including the effect of foreign currency translation, was $38.4$50.8 million and $38.1$57.6 million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $114.1$103.5 million and $125.6$111.6 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Lease revenues;revenues and amortization of internal-use software development, trade name, and in-place lease intangibles is included in Depreciation and amortization; and amortization of above-market ground lease and below-market ground lease intangibles is included in Property expenses, excluding reimbursable tenant costs.amortization.


Note 7. Equity Method Investments in the Managed Programs and Real Estate
 
We own interests in the Managed Programs and certain unconsolidated real estate investments with the Managed ProgramsCPA:18 – Global and also own interests in the Managed Programs.third parties. We account for our interests in these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences) or at fair value by electing the equity method fair value option available under GAAP.


We classify distributions received from equity method investments using the cumulative earnings approach. In general, distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

W. P. Carey 6/30/2022 10-Q– 20

W. P. Carey 9/30/2017 10-Q– 26
Notes to Consolidated Financial Statements (Unaudited)

The following table presents Equity in earnings of equity method investments in the Managed Programs and real estate, which represents our proportionate share of the income or losses of these investments, as well as certain adjustments related to amortization of basis differences related to purchase accounting adjustments (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Distributions of Available Cash (Note 3)
$12,047
 $10,876
 $34,568
 $32,018
Proportionate share of equity in earnings of equity investments in the Managed Programs886
 2,962
 4,688
 7,396
Amortization of basis differences on equity method investments in the Managed Programs(355) (265) (969) (756)
Total equity in earnings of equity method investments in the Managed Programs12,578
 13,573
 38,287
 38,658
Equity in earnings of equity method investments in real estate4,244
 4,197
 11,404
 12,456
Amortization of basis differences on equity method investments in real estate(504) (967) (1,871) (2,871)
Total equity in earnings of equity method investments in real estate3,740
 3,230
 9,533
 9,585
Equity in earnings of equity method investments in the Managed Programs and real estate$16,318
 $16,803
 $47,820
 $48,243
Managed Programs
 
We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, and through our ownership of their common stock, we do not exert control over, but we do have the ability to exercise significant influence on,over, the Managed Programs. Operating results of the Managed Programs are included in the Investment Management segment.
 
The following table sets forth certain information about our investments in the Managed Programs (dollars in thousands):
  % of Outstanding Interests Owned at Carrying Amount of Investment at
Fund September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
CPA®:17 – Global
 3.996% 3.456% $120,464
 $99,584
CPA®:17 – Global operating partnership
 0.009% 0.009% —
 —
CPA®:18 – Global
 2.298% 1.616% 25,812
 17,955
CPA®:18 – Global operating partnership
 0.034% 0.034% 209
 209
CWI 1 1.882% 1.109% 23,351
 11,449
CWI 1 operating partnership 0.015% 0.015% 186
 —
CWI 2 1.541% 0.773% 14,171
 5,091
CWI 2 operating partnership 0.015% 0.015% 300
 300
CCIF (a)
 —% 13.322% —
 23,528
CESH I (b)
 2.430% 2.431% 3,110
 2,701
      $187,603
 $160,817
% of Outstanding Interests Owned atCarrying Amount of Investment at
FundJune 30, 2022December 31, 2021June 30, 2022December 31, 2021
CPA:18 – Global (a)
5.718 %5.578 %$60,989 $60,836 
CPA:18 – Global operating partnership0.034 %0.034 %209 209 
CESH (b)
2.430 %2.430 %2,488 3,689 
$63,686 $64,734 
__________
(a)
In August 2017, we resigned as the advisor to CCIF, effective as of September 11, 2017 (Note 1). As such, we reclassified our investment in CCIF from Equity investments in the Managed Programs and real estate to Other assets, net in our consolidated balance sheets and account for it under the cost method, since we no longer share decision-making responsibilities with the third-party investment partner. Our cost method investment in CCIF had a carrying value of $23.3 million at September 30, 2017 and is included in our Investment Management segment.
(b)Investment is accounted for at fair value.



W. P. Carey 9/30/2017 10-Q– 27
Notes to Consolidated Financial Statements (Unaudited)

CPA®:17(a)During the six months ended June 30, 2022, we received certain asset management revenue from CPA:18 – Global— The carrying value in shares of its common stock, which increased our investmentownership percentage in CPA®:17CPA:18 – Global. Effective as of March 1, 2022, we began receiving asset management revenue from CPA:18 – Global in cash in light of the Proposed Merger (Note 1).
(b)Investment is accounted for at September 30, 2017 includes asset management fees receivable, for which 243,250 shares of CPA®:17fair value.

CPA:18 – Global common stock were issued during the fourth quarter of 2017. — We received distributions from this investment during the ninesix months ended SeptemberJune 30, 20172022 and 20162021 of $6.1$1.1 million and $5.5$0.9 million, respectively. We received distributions from our investment in the CPA®:17 – Global operating partnership during the nine months ended September 30, 2017 and 2016 of $19.2 million and $17.8 million, respectively.

CPA®:18 – Global— The carrying value of our investment in CPA®:18 – Global at September 30, 2017 includes asset management fees receivable, for which 117,416 shares of CPA®:18 – Global Class A common stock were issued during the fourth quarter of 2017. We received distributions from this investment during the nine months ended September 30, 2017 and 2016 of $1.2 million and $0.6 million, respectively. We received distributions from our investment in the CPA®:CPA:18 – Global operating partnership during the ninesix months ended SeptemberJune 30, 20172022 and 20162021 of $6.1$5.4 million and $5.3$3.3 million, respectively.

CWI 1— The carrying value of our investment in CWI 1 at September 30, 2017 includes asset management fees receivable, for which 110,715 shares of CWI 1 common stock were issued during the fourth quarter of 2017. We received distributions from this investment during the nine months ended September 30, 2017 and 2016 of $0.8 million and $0.6 million, respectively. We received distributions from our investment in the CWI 1 operating partnership during the nine months ended September 30, 2017 and 2016 of $5.7 million and $6.9 million, respectively.

CWI 2— The carrying value of our investment in CWI 2 at September 30, 2017 includes asset management fees receivable, for which 68,367 shares of CWI 2 Class A common stock were issued during the fourth quarter of 2017. We received distributions from this investment during the nine months ended September 30, 2017 and 2016 of $0.2 million and less than $0.1 million, respectively. We received distributions from our investment in the CWI 2 operating partnership during the nine months ended September 30, 2017 and 2016 of $3.5 million and $2.0 million, respectively.

CCIF— We received distributions from this investment during the nine months ended September 30, 2017 and 2016 of $0.9 million and $0.6 million, respectively. Following our resignation as the advisor to CCIF, effective September 11, 2017respectively (Note 1), and the reclassification of our investment in CCIF from Equity investments in the Managed Programs and real estate to Other assets, net in our consolidated balance sheets (as described above), distributions of earnings from CCIF are recorded within Other income and (expenses) in the consolidated financial statements.

CESH I— Under the limited partnership agreement we have with CESH I, we paid all organization and offering costs on behalf of CESH I, and instead of being reimbursed by CESH I on a dollar-for-dollar basis for those costs, we received limited partnership units of CESH I equal to 2.5% of its gross offering proceeds. In connection with the end of active fundraising by Carey Financial on June 30, 2017, we facilitated the orderly processing of sales in the CESH I offering through July 31, 2017, which then closed its offering on that date (Note 3).

CESH— We have elected to account for our investment in CESH I at fair value by selecting the equity method fair value option available under GAAP. We record our investment in CESH I on a one quarter lag; therefore, the balance of our equity method investment in CESH I recorded as of SeptemberJune 30, 20172022 is based on the estimated fair value of our equity method investment in CESH I as of June 30, 2017.March 31, 2022. We did not receivereceived distributions from this investment during the ninesix months ended SeptemberJune 30, 2017 or 2016.2022 and 2021 of $1.2 million and $0.1 million, respectively.


At SeptemberJune 30, 20172022 and December 31, 2016,2021, the aggregate unamortized basis differences on our equity method investments in the Managed Programs were $39.5$22.0 million and $31.7$23.3 million, respectively.


Interests in Other Unconsolidated Real Estate Investments and WLT


We own equity interests in single-tenant net-leased properties that are generally leased to companies through noncontrolling interests (i) in partnerships and limited liability companies that we do not control but over which we exercise significant influence or (ii) as tenants-in-common subject to common control. Generally, theinfluence. The underlying investments are jointly owned with affiliates.affiliates or third parties. We account for these investments under the equity method of accounting. In addition, we own shares of WLT common stock, which we accounted for under the equity method of accounting as of December 31, 2021, but was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022, as described in Note 8. Operating results of our unconsolidated real estate investments are included in the Owned Real Estate segment.




W. P. Carey 6/30/2022 10-Q– 21

W. P. Carey 9/30/2017 10-Q– 28
Notes to Consolidated Financial Statements (Unaudited)

The following table sets forth our ownership interests in our equity method investments in real estate, excluding the Managed Programs, and their respective carrying values (dollars in thousands):
      Carrying Value at
Lessee Co-owner Ownership Interest September 30, 2017 December 31, 2016
The New York Times Company 
CPA®:17 – Global
 45% $69,510
 $69,668
Frontier Spinning Mills, Inc. 
CPA®:17 – Global
 40% 24,147
 24,138
Beach House JV, LLC (a)
 Third Party N/A 15,105
 15,105
ALSO Actebis GmbH (b)
 
CPA®:17 – Global
 30% 12,072
 11,205
Jumbo Logistiek Vastgoed B.V. (b) (c)
 
CPA®:17 – Global
 15% 10,505
 8,739
Wagon Automotive GmbH (b)
 
CPA®:17 – Global
 33% 8,323
 8,887
Wanbishi Archives Co. Ltd. (d)
 
CPA®:17 – Global
 3% 333
 334
      $139,995
 $138,076
Carrying Value at
Lessee/Fund/DescriptionCo-ownerOwnership InterestJune 30, 2022December 31, 2021
Las Vegas Retail Complex (a)
Third PartyN/A$141,341 $104,114 
Johnson Self StorageThird Party90%66,552 67,573 
Kesko Senukai (b)
Third Party70%33,416 41,955 
Harmon Retail Corner (c)
Third Party15%24,725 24,435 
State Farm Mutual Automobile Insurance Co.CPA:18 – Global50%6,411 7,129 
Apply Sørco AS (d)
CPA:18 – Global49%3,977 5,909 
Fortenova Grupa d.d. (b)
CPA:18 – Global20%2,146 2,936 
Bank Pekao (b) (e)
CPA:18 – Global50%2,106 4,460 
WLT (f)
WLTN/A— 33,392 
$280,674 $291,903 
__________
(a)This investment is in the form of a preferred equity interest.
(b)The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
(c)
This investment represents a tenancy-in-common interest, whereby the property is encumbered by the debt for which we are jointly and severally liable. The co-obligor is CPA®:17 – Global and the amount due under the arrangement was approximately $75.4 million at September 30, 2017. Of this amount, $11.3 million represents the amount we are liable for and is included within the carrying value of the investment at September 30, 2017.
(d)The carrying value of this investment is affected by fluctuations in the exchange rate of the yen.

(a)On June 10, 2021, we entered into an agreement to fund a construction loan of approximately $261.9 million (as of June 30, 2022) for a retail complex in Las Vegas, Nevada. Through June 30, 2022, we funded $141.0 million, including $37.3 million during the six months ended June 30, 2022. Interest income from this investment was $3.4 million and $0.3 million for the six months ended June 30, 2022 and 2021, respectively, which was recognized within Earnings (losses) from equity method investments in our consolidated statements of income.
(b)The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
(c)This investment is reported using the hypothetical liquidation at book value (“HLBV”) model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement.
(d)The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone.
(e)We recognized our $4.6 million proportionate share of an impairment charge recorded on this investment during the six months ended June 30, 2022, which was reflected within Earnings (losses) from equity method investments in our consolidated statements of income. The estimated fair value of the investment is based on the estimated selling price of the international office facility owned by the investment, and the fair value of the non-recourse mortgage encumbering the property also approximates the fair value of the property.
(f)We own 12,208,243 shares of common stock of WLT, which we accounted for as an equity method investment in real estate as of December 31, 2021, but was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022 (Note 8).

We received aggregate distributions of $12.1$18.4 million and $12.4$11.1 million from our other unconsolidated real estate investments for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively. At SeptemberJune 30, 20172022 and December 31, 2016,2021, the aggregate unamortized basis differences on our unconsolidated real estate investments were $7.1$7.6 million and $6.7$7.9 million, respectively.


Note 8. Fair Value Measurements
 
The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts, and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.


W. P. Carey 6/30/2022 10-Q– 22

Notes to Consolidated Financial Statements (Unaudited)
Items Measured at Fair Value on a Recurring Basis


The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs along with their weighted-average ranges.inputs.


Money Market FundsDerivative Assets and Liabilities — Our money market funds,derivative assets and liabilities, which are included in CashOther assets, net and cash equivalentsAccounts payable, accrued expenses and other liabilities, respectively, in the consolidated financial statements, are comprised of government securities and U.S. Treasury bills. These funds were classified as Level 1 as we used quoted prices from active markets to determine their fair values.

Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of foreign currency forward contracts, foreign currency collars, interest rate swaps, interest rate caps, and stock warrants (Note 9).

The foreign currency forward contracts, foreign currency collars,valuation of our derivative instruments (excluding stock warrants) is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate swaps,curves, spot and interest rate caps were measured atforward rates, and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value using readily observable market inputs,measurements. In adjusting the fair value of our derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as quotations on interest rates,collateral postings, thresholds, mutual puts, and guarantees. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

The stock warrants were measured at fair value using valuation models that incorporate market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because these assets are not traded in an active market.



W. P. Carey 9/30/2017 10-Q– 29
Notes to Consolidated Financial Statements (Unaudited)


Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of foreign currency collars and interest rate swaps (Note 9). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Equity Method Investment in CESH I—We have elected to account for our investment in CESH, Iwhich is included in Equity method investments in the consolidated financial statements, at fair value by selecting the equity method fair value option available under GAAP (Note 7). We classified this investment as Level 3 because we primarily used valuation models that incorporate unobservable inputs to determine its fair value.

Investment in Shares of Lineage Logistics — We have elected to apply the measurement alternative under Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10) to account for our investment in shares of Lineage Logistics (a cold storage REIT), which is included in Other assets, net in the consolidated financial statements. Under this alternative, the carrying value is adjusted for any impairments or changes in fair value resulting from observable transactions for similar or identical investments in the issuer. We classified this investment as Level 3 because it is not traded in an active market. We recognized non-cash unrealized gains on our investment in shares of Lineage Logistics of $23.4 million during the six months ended June 30, 2021, due to a secondary market transaction at a higher price per share, which was recorded within Other gains and (losses) in the consolidated financial statements. In addition, during the six months ended June 30, 2022 and 2021, we received cash dividends of $4.3 million and $6.4 million, respectively, from our investment in shares of Lineage Logistics, which was recorded within Non-operating income in the consolidated financial statements. The fair value of this investment was $366.3 million at both June 30, 2022 and December 31, 2021.

Investment in Shares of GCIF — We account for our investment in shares of Guggenheim Credit Income Fund (“GCIF”), which is included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 2 because we used a quoted price from an inactive market to determine its fair value. During the six months ended June 30, 2022, we received liquidating distributions from our investment in shares of GCIF totaling $1.1 million, which reduced the cost basis of our investment (in March 2021, GCIF announced its intention to liquidate and to distribute substantially all of its assets). The fair value of our equity investment in CESH I approximated its carrying value asshares of SeptemberGCIF was $3.3 million and $4.3 million at June 30, 20172022 and December 31, 2016.2021, respectively.


Investment in Preferred Shares of WLT — In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (based on the liquidation preference of $50.00 per share). In connection with this redemption, we reclassified an unrealized gain on this investment of $18.7 million from Accumulated other comprehensive loss to Other gains and (losses) in the consolidated financial statements (Note 12). Prior to this redemption, we accounted for this investment, which was included in Other assets, net in the consolidated financial statements, as available-for-sale debt securities at fair value (Level 3). During the six months ended June 30, 2022, we received cash dividends of $0.9 million from our investment in preferred shares of WLT, which was recorded within Non-operating income in the consolidated financial statements. The fair value of our investment in preferred shares of WLT was $65.0 million as of December 31, 2021.

W. P. Carey 6/30/2022 10-Q– 23

Notes to Consolidated Financial Statements (Unaudited)
Investment in Common Shares of WLT — In January 2022, we reclassified our investment in 12,208,243 shares of common stock of WLT from equity method investments to equity securities, since we no longer have significant influence over WLT, following the redemption of our investment in preferred shares of WLT, as described above. As a result, we account for this investment, which is included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 3 because it is not traded in an active market. The carrying value of this investment was $33.4 million as of December 31, 2021, which was included within Equity method investments in the consolidated financial statements. We recognized non-cash unrealized gains of $43.4 million on our investment in common shares of WLT during the six months ended June 30, 2022, reflecting the most recently published net asset value of WLT, which was recorded within Other gains and (losses) in the consolidated financial statements. The fair value of our investment in common shares of WLT was $76.8 million as of June 30, 2022.

We did not have any transfers into or out of Level 1, Level 2, and Level 3 category of measurements during either the three or ninesix months ended SeptemberJune 30, 20172022 or 2016.2021. Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other incomegains and (expenses)(losses) on our consolidated financial statements.


Our other material financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):
   September 30, 2017 December 31, 2016
 Level Carrying Value Fair Value Carrying Value Fair Value
Unsecured Senior Notes, net (a) (b) (c)
2 $2,455,383
 $2,574,990
 $1,807,200
 $1,828,829
Non-recourse mortgages, net (a) (b) (d)
3 1,253,051
 1,265,075
 1,706,921
 1,711,364
Note receivable (d)
3 10,070
 9,740
 10,351
 10,046
June 30, 2022December 31, 2021
LevelCarrying ValueFair ValueCarrying ValueFair Value
Senior Unsecured Notes, net (a) (b) (c)
2$5,471,066 $4,983,231 $5,701,913 $5,984,228 
Non-recourse mortgages, net (a) (b) (d)
3328,820 324,326 368,524 369,841 
__________
(a)
The carrying value of Unsecured Senior Notes, net (Note 10) includes unamortized deferred financing costs of $15.0 million and $12.1 million at September 30, 2017 and December 31, 2016, respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $1.0 million and $1.3 million at September 30, 2017 and December 31, 2016, respectively.
(b)The carrying value of Unsecured Senior Notes, net includes unamortized discount of $10.2 million and $7.8 million at September 30, 2017 and December 31, 2016, respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $1.4 million and $0.2 million at September 30, 2017 and December 31, 2016, respectively.
(c)We determined the estimated fair value of the Unsecured Senior Notes using quoted market prices in an open market with limited trading volume, where available. In cases where there was no trading volume, we determined the estimated fair value using a discounted cash flow model using a rate that reflects the average yield of similar market participants.
(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.
(a)The carrying value of Senior Unsecured Notes, net (Note 10) includes unamortized deferred financing costs of $25.6 million and $28.7 million at June 30, 2022 and December 31, 2021, respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of less than $0.1 million at both June 30, 2022 and December 31, 2021.
(b)The carrying value of Senior Unsecured Notes, net includes unamortized discount of $26.0 million and $29.2 million at June 30, 2022 and December 31, 2021, respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $0.4 million and $0.8 million at June 30, 2022 and December 31, 2021, respectively.
(c)We determined the estimated fair value of the Senior Unsecured Notes using observed market prices in an open market, which may experience limited trading volume.
(d)We determined the estimated fair value of our non-recourse mortgage loans 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 consider 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.

We estimated that our other financial assets and liabilities, (excluding net investments in direct financing leases)including amounts outstanding under our Senior Unsecured Credit Facility (Note 10), but excluding finance receivables (Note 5), had fair values that approximated their carrying values at both SeptemberJune 30, 20172022 and December 31, 2016.2021.



W. P. Carey 9/30/2017 10-Q– 30
Notes to Consolidated Financial Statements (Unaudited)


Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)


We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be recoverable. For investmentsThere have been no significant changes in real estate held for useour impairment policies from what was disclosed in the 2021 Annual Report.

W. P. Carey 6/30/2022 10-Q– 24

Notes to Consolidated Financial Statements (Unaudited)
The following tables present information about assets for which we recorded an impairment indicator is identified, we follow a two-step process to determine whether the investment is impairedcharge and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the future undiscounted net cash flows that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. If this amount is less than the carrying value, the property’s asset group is considered to be not recoverable. We then measure the impairment charge as the excess of the carrying value of the property’s asset group over the estimatedwere measured at fair value of the property’s asset group, which is primarily determined using market information such as recent comparable sales, broker quotes, or third-party appraisals. If relevant market information is not available or is not deemed appropriate, we performon a future net cash flow analysis, discounted for inherent risk associated with each investment. We determined that the significant inputs used to value these investments fall within Level 3 fornon-recurring basis (in thousands):
Three Months Ended June 30,
 20222021
 Fair Value MeasurementsImpairment ChargesFair Value MeasurementsImpairment Charges
Impairment Charges
Land, buildings and improvements and intangibles$10,270 $6,206 $— $— 
Equity method investments— — — — 
$6,206 $— 
Six Months Ended June 30,
20222021
Fair Value
Measurements		Impairment
Charges		Fair Value
Measurements		Impairment
Charges
Impairment Charges
Land, buildings and improvements and intangibles$24,497 $26,385 $— $— 
Equity method investments— — 8,175 6,830 
$26,385 $6,830 

Impairment charges, and their related triggering events and fair value reporting. As a result of our assessments, we calculated impairment charges based on market conditions and assumptions that existed at the time. The valuation of real estate is subject to significant judgment and actual results may differ materially if market conditions or the underlying assumptions change.

We did not recognize any impairment chargesmeasurements, recognized during the three or nineand six months ended SeptemberJune 30, 2017.2022 and 2021 were as follows:


Land, Buildings and Improvements and Intangibles

The impairment charges described below are reflected within Impairment charges in our consolidated statements of income.

During the three and six months ended SeptemberJune 30, 2016,2022, we recognized impairment charges totaling $14.4 million, including an amount attributable to a noncontrolling interest of $0.6$6.2 million on 182 properties includingin order to reduce their carrying values to their estimated fair values, which approximated their estimated selling prices.

During the six months ended June 30, 2022, we recognized an impairment charge of $10.9 million on a portfolioproperty in order to reduce its carrying value to its estimated fair value, which declined due to changes in expected cash flows related to the existing tenant’s lease expiration in 2023. The fair value measurement was determined by estimating discounted cash flows using two significant unobservable inputs, which were the cash flow discount rate (14.0%) and terminal capitalization rate (11.0%)

In March 2022, we entered into a transaction to restructure certain leases with Pendragon PLC (a tenant at certain automotive dealerships in the United Kingdom). Under this restructuring, we extended the leases on 30 properties by 11 years (no change to rent) and entered into an agreement to dispose of 1412 properties, with the tenant continuing to pay rent until the earlier of sale date or certain specified dates over the following 12 months. As a result, during the six months ended June 30, 2022, we recognized impairment charges totaling $9.3 million on 6 of these properties in order to reduce the carrying values of the properties to their estimated fair values. The fair value measurements for the properties were determined using a direct capitalization rate analysis; the capitalization rate for the various scenarios ranged from 4.75% to 10.00%.

Equity Method Investments

The other-than-temporary impairment charges recognized on the portfoliodescribed below are reflected within Earnings (losses) from equity method investments in our consolidated statements of 14 properties were in addition to charges recognized on the portfolio duringincome.

During the six months ended June 30, 2016 (as described below), based on the purchase and sale agreement for the portfolio. The fair value measurements for the properties, which totaled $158.8 million, approximated their estimated selling prices, less estimated costs to sell. We used available information, including third-party broker information and internal discounted cash flow models (Level 3 inputs), in determining the fair value of these properties. The portfolio of 14 properties was sold in October 2016. Of the other four properties, one was sold in December 2016, two were disposed of in January 2017, and one property, which was classified as held for sale as of December 31, 2016, was sold in January 2017.

During the nine months ended September 30, 2016,2021, we recognized an other-than-temporary impairment charges totaling $49.9 million, including an amount attributable to a noncontrolling interestcharge of $0.6$6.8 million on 18 properties in ordera jointly owned real estate investment to reduce the carrying valuesvalue of the propertiesour investment to theirits estimated fair values. In additionvalue, which declined due to changes in expected cash flows related to the impairment charges of $14.4 million recognized during the three months ended September 30, 2016, described above, we recognized impairment charges totaling $35.4 million on the portfolio of 14 properties during the six months ended June 30, 2016,existing tenant’s lease expiration in order to reduce the carrying values of the properties to their estimated fair values at that time.2028. The fair value measurements for the properties, which totaled $158.8 million, approximated their estimated selling prices, less estimated costs to sell. We used available information, including third-party broker information and internalmeasurement was determined by estimating discounted cash flows using three significant unobservable inputs, which were the cash flow models (Level 3 inputs)discount rate (5.75%), in determining the fair value of these properties.residual discount rate (7.50%), and residual capitalization rate (6.75%).


W. P. Carey 6/30/2022 10-Q– 25

Notes to Consolidated Financial Statements (Unaudited)
Note 9. Risk Management and Use of Derivative Financial Instruments


Risk Management
 
In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including our Senior Unsecured Credit Facility and Unsecured Senior Notes (Note 10). and unhedged variable-rate non-recourse mortgage loans. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of ourSenior Unsecured Notes, other securities, and the shares or limited partnership units we hold in the Managed Programs, due to changes in interest rates or other market factors. We own investments in North America, Europe, Australia, and AsiaJapan and are subject to risks associated with fluctuating foreign currency exchange rates.


Derivative Financial Instruments

When we use derivative instruments, it is generally to reduceThere have been no significant changes in our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, and we may be granted common stock warrants by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of derivative


W. P. Carey 9/30/2017 10-Q– 31
Notes to Consolidated Financial Statements (Unaudited)

instruments include a counterparty to a hedging arrangement defaulting on its obligation and a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities.

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive income (loss) until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the changepolicies from what was disclosed in the fair value and/or the net settlement of the derivative is reported in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements.2021 Annual Report. At both SeptemberJune 30, 20172022 and December 31, 2016,2021, no cash collateral had been posted nor received for any of our derivative positions.
 
The following table sets forth certain information regarding our derivative instruments (in thousands):
Derivatives Designated as Hedging InstrumentsBalance Sheet LocationDerivative Assets Fair Value atDerivative Liabilities Fair Value at
June 30, 2022December 31, 2021June 30, 2022December 31, 2021
Foreign currency collarsOther assets, net$41,827 $19,484 $— $— 
Interest rate swapOther assets, net503 — — — 
Interest rate capOther assets, net5 1 — — 
Foreign currency collarsAccounts payable, accrued expenses and other liabilities— — — (1,311)
Interest rate swapsAccounts payable, accrued expenses and other liabilities— — — (908)
42,335 19,485 — (2,219)
Derivatives Not Designated as Hedging Instruments
Stock warrantsOther assets, net4,600 4,600 — — 
Foreign currency collarsOther assets, net1,126 — — — 
5,726 4,600 — — 
Total derivatives$48,061 $24,085 $— $(2,219)
Derivatives Designated as Hedging Instruments Balance Sheet Location Asset Derivatives Fair Value at Liability Derivatives Fair Value at
  September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
Foreign currency forward contracts Other assets, net $15,636
 $37,040
 $—
 $—
Foreign currency collars Other assets, net 5,837
 17,382
 —
 —
Interest rate swaps Other assets, net 227
 190
 —
 —
Interest rate cap Other assets, net 24
 45
 —
 —
Foreign currency collars Accounts payable, accrued expenses and other liabilities —
 —
 (4,472) —
Interest rate swaps Accounts payable, accrued expenses and other liabilities —
 —
 (1,822) (2,996)
Derivatives Not Designated as Hedging Instruments          
Stock warrants Other assets, net 3,551
 3,752
 —
 —
Interest rate swap (a)
 Other assets, net 14
 9
 —
 —
Total derivatives   $25,289
 $58,418
 $(6,294) $(2,996)
__________
(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.




W. P. Carey 6/30/2022 10-Q– 26

W. P. Carey 9/30/2017 10-Q– 32
Notes to Consolidated Financial Statements (Unaudited)

The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands):
Amount of Gain (Loss) Recognized on Derivatives in
 Other Comprehensive Income (Loss) (a)
Three Months Ended June 30,Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships 2022202120222021
Foreign currency collars$18,456 $(2,539)$23,654 $13,628 
Interest rate swaps575 235 1,356 3,648 
Interest rate caps2 2 5 4 
Total$19,033 $(2,302)$25,015 $17,280 
  
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Loss) (Effective Portion) (a)
  Three Months Ended September 30, Nine Months Ended September 30,
Derivatives in Cash Flow Hedging Relationships  2017 2016 2017 2016
Foreign currency collars $(5,398) $(439) $(16,002) $3,618
Foreign currency forward contracts (4,752) (3,622) (16,422) (7,830)
Interest rate swaps 250
 961
 779
 (1,536)
Interest rate caps (17) (29) (26) (21)
Derivatives in Net Investment Hedging Relationships (b)
        
Foreign currency forward contracts (1,171) (2,200) (5,347) (3,357)
Total $(11,088) $(5,329) $(37,018) $(9,126)

 Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive Income (Loss) (Effective Portion)Amount of Gain (Loss) on Derivatives Reclassified from
 Other Comprehensive Income (Loss)
Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended September 30, Nine Months Ended September 30,Derivatives in Cash Flow Hedging RelationshipsLocation of Gain (Loss) Recognized in IncomeThree Months Ended June 30,Six Months Ended June 30,
 2017 2016 2017 20162022202120222021
Foreign currency forward contracts Other income and (expenses) $1,454
 $1,773
 $5,336
 $5,163
Foreign currency collars Other income and (expenses) 735
 654
 3,154
 1,259
Foreign currency collarsNon-operating income$3,359 $614 $5,463 $(567)
Interest rate swaps and caps Interest expense (286) (512) (1,024) (1,578)
Interest rate swaps and caps (b)
Interest rate swaps and caps (b)
Interest expense(122)(198)(286)(524)
Total $1,903
 $1,915
 $7,466
 $4,844
Total$3,237 $416 $5,177 $(1,091)
__________
(a)Excludes net losses of $0.4 million and net gains of less than $0.1 million recognized on unconsolidated jointly owned investments for the three months ended September 30, 2017 and 2016, respectively, and net losses of $0.9 million and $0.2 million for the nine months ended September 30, 2017 and 2016, respectively.
(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 income (loss).

(a)Excludes net gains of $0.9 million and $0.3 million recognized on unconsolidated jointly owned investments for the three months ended June 30, 2022 and 2021, respectively, and net gains of $2.3 million and $0.6 million for the six months ended June 30, 2022 and 2021, respectively.

(b)Amount for the six months ended June 30, 2021 excludes other comprehensive income totaling $3.1 million that was released from the consolidated financial statements (along with the related liability balances) upon the termination of interest rate swaps in connection with certain prepayments of non-recourse mortgage loans during the period.

W. P. Carey 9/30/2017 10-Q– 33
Notes to Consolidated Financial Statements (Unaudited)


Amounts reported in Other comprehensive (loss) income (loss) related to interest rate swapsderivative contracts will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive (loss) income (loss) related to foreign currency derivative contracts will be reclassified to OtherNon-operating income and (expenses) when the hedged foreign currency contracts are settled. As of SeptemberJune 30, 2017,2022, we estimate that an additional $0.7$0.2 million and $7.5$18.1 million will be reclassified as interestInterest expense and otherNon-operating income, respectively, during the next 12 months.


The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands):
Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives in Cash Flow Hedging RelationshipsLocation of Gain (Loss) Recognized in IncomeThree Months Ended June 30,Six Months Ended June 30,
2022202120222021
Foreign currency collarsNon-operating income$2,575 $(841)$3,783 $159 
Interest rate swapsInterest expense144 225 331 1,131 
Derivatives Not in Cash Flow Hedging Relationships
Foreign currency collarsOther gains and (losses)842 — 1,126 — 
Stock warrantsOther gains and (losses)— (500)— (500)
Total$3,561 $(1,116)$5,240 $790 
    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,
  2017 2016 2017 2016
Foreign currency collars Other income and (expenses) $(225) $78
 $(718) $257
Stock warrants Other income and (expenses) 134
 335
 (201) 134
Foreign currency forward contracts Other income and (expenses) (19) —
 (19) —
Interest rate swaps Other income and (expenses) 2
 401
 11
 2,656
Derivatives in Cash Flow Hedging Relationships          
Interest rate swaps (a)
 Interest expense 153
 165
 455
 428
Foreign currency forward contracts Other income and (expenses) (14) (55) (75) 86
Foreign currency collars Other income and (expenses) (13) (26) (11) 12
Total   $18
 $898
 $(558) $3,573
__________
(a)Relates to the ineffective portion of the hedging relationship.


See below for information on our purposes for entering into derivative instruments and for information on derivative instruments owned by unconsolidated investments, which are excluded from the tables above.instruments.


W. P. Carey 6/30/2022 10-Q– 27

Notes to Consolidated Financial Statements (Unaudited)
Interest Rate Swaps and Caps


We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgagegenerally seek long-term debt financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners have obtained, and may in the future obtain, variable-rate, non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.




W. P. Carey 9/30/2017 10-Q– 34
Notes to Consolidated Financial Statements (Unaudited)

The interest rate swaps and caps that our consolidated subsidiaries had outstanding at SeptemberJune 30, 20172022 are summarized as follows (currency in thousands):
Interest Rate Derivatives Number of InstrumentsNotional
Amount
Fair Value at
June 30, 2022 (a)
Designated as Cash Flow Hedging Instruments
Interest rate swaps246,584 EUR$496 
Interest rate swap115,718 USD7 
Interest rate cap110,608 EUR5 
$508 
   Number of Instruments
Notional
Amount

Fair Value at
September 30, 2017 (a)
Interest Rate Derivatives 

Designated as Cash Flow Hedging Instruments       
Interest rate swaps 11 104,966
USD $(1,455)
Interest rate swap 1 5,813
EUR (140)
Interest rate cap 1 30,517
EUR 24
Not Designated as Cash Flow Hedging Instruments       
Interest rate swap (b)
 1 2,890
USD 14
       $(1,557)
__________
__________(a)Fair value amounts are based on the exchange rate of the euro at June 30, 2022, as applicable.
(a)Fair value amounts are based on the exchange rate of the euro at September 30, 2017, as applicable.
(b)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.

Foreign Currency Contracts and Collars
 
We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling, the Australian dollar,Norwegian krone, and certain other currencies. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other income and (expenses) in the consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 7762 months or less.


The following table presents the foreign currency derivative contractscollars that we had outstanding at SeptemberJune 30, 2017, which were designated as cash flow hedges2022 (currency in thousands):
Foreign Currency Derivatives Number of InstrumentsNotional
Amount
Fair Value at
June 30, 2022
Designated as Cash Flow Hedging Instruments
Foreign currency collars79311,100 EUR$35,741 
Foreign currency collars8555,120 GBP6,086 
Not Designated as Cash Flow Hedging Instruments
Foreign currency collars215,100 EUR1,126 
$42,953 
   Number of Instruments Notional
Amount		 
Fair Value at
September 30, 2017
Foreign Currency Derivatives   
Designated as Cash Flow Hedging Instruments       
Foreign currency forward contracts 25 77,208
EUR $12,553
Foreign currency collars 24 40,750
GBP 5,316
Foreign currency collars 24 87,150
EUR (3,951)
Foreign currency forward contracts 5 2,680
GBP 603
Foreign currency forward contracts 9 11,411
AUD 404
Designated as Net Investment Hedging Instruments       
Foreign currency forward contracts 3 74,463
AUD 2,076
       $17,001



W. P. Carey 9/30/2017 10-Q– 35
Notes to Consolidated Financial Statements (Unaudited)


Credit Risk-Related Contingent Features


We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of SeptemberJune 30, 2017.2022. At SeptemberJune 30, 2017,2022, our total credit exposure and the maximum exposure to any single counterparty was $19.9$43.8 million and $13.5$8.5 million, respectively.


W. P. Carey 6/30/2022 10-Q– 28

Notes to Consolidated Financial Statements (Unaudited)
Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At SeptemberJune 30, 2017,2022, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $6.5 million and $3.3$2.2 million at September 30, 2017 and December 31, 2016, respectively,2021, which included accrued interest and any nonperformance risk adjustments.adjustments (there was 0 such liability balance at June 30, 2022). If we had breached any of these provisions at September 30, 2017 or December 31, 2016,2021, we could have been required to settle our obligations under these agreements at their aggregate termination value of $6.8 million and $3.3 million, respectively.$2.3 million.


Net Investment Hedges


At September 30, 2017, the €236.3 million borrowedBorrowings under our Senior Unsecured Notes, Unsecured Revolving Credit Facility, and Unsecured Term Loans (all as defined in Note 10) denominated in euro, outstanding under our Amended Term Loan was designated as a net investment hedge (Note 10). Additionally, we have had two issuances of euro-denominated senior notes, each with a principal amount of €500.0 million, which we refer to as the 2.0% Senior Notes and 2.25% Senior Notes (Note 10). These borrowingsBritish pounds sterling, or Japanese yen are designated as, and are effective as, economic hedges of our net investments in foreign entities. Variability in the exchange rates of the foreign currencies with respect to the U.S. dollar impacts

Exchange rate variations impact our financial results asbecause the financial results of our foreign subsidiaries are translated to U.S. dollars each period, with the effect of changes in the foreign currencies to U.S. dollar exchange ratesrate variations being recorded in Other comprehensive (loss) income (loss) as part of the cumulative foreign currency translation adjustment. As a result, the borrowings in euro under our Amended Term Loan, 2.0% Senior Notes, and 2.25% Senior Notes are recorded at cost in the consolidated financial statements and all changes in the value of our borrowings under our euro-denominated senior notes and changes in the value of our euro, Japanese yen, and British pound sterling borrowings under our Senior Unsecured Credit Facility, related to changes in the spot rates, will be reported in the same manner as aforeign currency translation adjustment,adjustments, which isare recorded in Other comprehensive (loss) income (loss) as part of the cumulative foreign currency translation adjustment.

At September 30, 2017, we also had foreign currency forward contracts that were designated as Such gains (losses) related to non-derivative net investment hedges as discussed in“Derivative Financial Instruments” above.were $236.4 million and $(44.5) million for the three months ended June 30, 2022 and 2021, respectively, and $313.3 million and $98.0 million for the six months ended June 30, 2022 and 2021, respectively.


Note 10. Debt
 
Senior Unsecured Credit Facility


AsOn February 20, 2020, we entered into the Fourth Amended and Restated Credit Facility, which had capacity of December 31, 2016, we hadapproximately $2.1 billion, comprised of (i) a senior credit facility that provided for a $1.5$1.8 billion unsecured revolving credit facility orfor our Unsecuredworking capital needs, acquisitions, and other general corporate purposes (our “Unsecured Revolving Credit Facility, andFacility”), (ii) a $250.0£150.0 million term loan facility, or our Prior Term Loan, which we refer to collectively as the Senior Unsecured Credit Facility. At December 31, 2016, the Senior Unsecured Credit Facility also permitted (i) up to $750.0 million under our Unsecured Revolving Credit Facility to be borrowed in certain currencies other than the U.S. dollar, (ii) swing line loans up to $50.0 million under our Unsecured Revolving Credit Facility,(our “Term Loan”), and (iii) the issuance of letters of credit under our Unsecured Revolving Credit Facility in an aggregate amount not to exceed $50.0 million. On January 26, 2017, we exercised our option to extend our Prior Term Loan by an additional year to January 31, 2018.

On February 22, 2017, we amended and restated our Senior Unsecured Credit Facility to increase its capacity to approximately $1.85 billion, which is comprised of $1.5 billion under our Unsecured Revolving Credit Facility, a €236.3 million term loan, or our Amended Term Loan, and a $100.0€96.5 million delayed draw term loan or our Delayed(our “Delayed Draw Term Loan. The Delayed Draw Term Loan allows for borrowings in U.S. dollars, euros, or British pounds sterling.Loan”). We refer to our Prior Term Loan, Amended Term Loan and Delayed Draw Term Loan collectively as the Unsecured“Unsecured Term Loans.

On February 22, 2017, we drew downLoans” and the entire facility collectively as our Amended Term Loan in full by borrowing €236.3 million (equivalent to $250.0 million) to repay and terminate our $250.0 million Prior Term Loan. On June 8, 2017, we drew down our Delayed Draw Term Loan in full by borrowing €88.7 million (equivalent to $100.0 million) to partially pay down the amounts then outstanding under our“Senior Unsecured Revolving Credit Facility.”


The maturity date of the Unsecured Revolving Credit Facility is February 22, 2021. We have two options to extend the maturity date of the Unsecured Revolving Credit Facility by six months, subject to the conditions provided in the Third Amended and Restated Credit Facility dated February 22, 2017, as amended, or the Credit Agreement. The maturity date of both the Amended


W. P. Carey 9/30/2017 10-Q– 36
Notes to Consolidated Financial Statements (Unaudited)

Term Loan and Delayed Draw Term Loan is February 22, 2022. The Senior Unsecured Credit Facility is being used for working capital needs, for acquisitions, and for other general corporate purposes.

The Credit Agreement also permits (i) a sub-limit for upincludes the ability to $1.0 billion under the Unsecured Revolving Credit Facility to be borrowedborrow in certain currencies other than U.S. dollars (ii)and has a sub-limit for swing line loansmaturity date of up to $75.0 million under the Unsecured Revolving Credit Facility, and (iii) a sub-limit for the issuance of letters of credit under the Unsecured Revolving Credit Facility in an aggregate amount not to exceed $50.0 million.February 20, 2025. The aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit AgreementFacility may be increased up to an amount not to exceed the U.S. dollar equivalent of $2.35$2.75 billion, and may be allocated as an increase to the Unsecured Revolving Credit Facility, the Amended Term Loan, or the Delayed Draw Term Loan, or if the Amended Term Loan has been terminated, an add-on term loan, in each case subject to the conditions to increase providedset forth in our Credit Agreement, as described above.

In April 2022, we entered into a Second Amendment to the Credit Agreement. In connection withAgreement to increase the amendmentTerm Loan to £270.0 million and restatementthe Delayed Draw Term Loan to €215.0 million, thereby increasing the total capacity of our Senior Unsecured Credit Facility we capitalized deferred financing costs totaling $8.5 million, which is being amortized to Interest expense overapproximately $2.4 billion. There were no other changes to the remaining terms of our Credit Agreement. We used the approximately $300 million of proceeds from this increase in the capacity of our Unsecured Term Loans to partially repay amounts outstanding under our Unsecured Revolving Credit Facility and Amended Term Loan.Facility.


At SeptemberJune 30, 2017,2022, our Unsecured Revolving Credit Facility had unusedavailable capacity of $1.3approximately $1.4 billion excluding(net of amounts reserved for outstanding letters of credit. As of September 30, 2017, our lenders had issuedstandby letters of credit totaling $0.1 million on our behalf in connection with certain contractual obligations, which reduce amounts that may be drawn under our Unsecured Revolving Credit Facility by the same amount.$0.6 million). We also incur aan annual facility fee of 0.20% of the total commitment on our Unsecured Revolving Credit Facility, and a feewhich is included within Interest expense in our consolidated statements of 0.20% on the unused commitments under our Delayed Draw Term Loan priorincome.

W. P. Carey 6/30/2022 10-Q– 29

Notes to the draw or termination of such commitments.Consolidated Financial Statements (Unaudited)

The following table presents a summary of our Senior Unsecured Credit Facility (dollars in millions)thousands):


Interest Rate at
September 30, 2017 (a)

Maturity Date at September 30, 2017
Principal Outstanding Balance at
Senior Unsecured Credit Facility


September 30, 2017
December 31, 2016
Unsecured Term Loans:







Amended Term Loan — borrowing in euros (b) (c)

EURIBOR + 1.10%
2/22/2022
$279.0

$—
Delayed Draw Term Loan — borrowing in euros (c)

EURIBOR + 1.10%
2/22/2022
104.7

—
Prior Term Loan — borrowing in U.S. dollars (d)
 N/A N/A —
 250.0
 




383.7

250.0
Unsecured Revolving Credit Facility:









Unsecured Revolving Credit Facility — borrowing in U.S. dollars
LIBOR + 1.00%
2/22/2021
113.0

390.0
Unsecured Revolving Credit Facility — borrowing in euros (c)

EURIBOR + 1.00%
2/22/2021
111.2

286.7






224.2

676.7






$607.9

$926.7
Interest Rate at
June 30, 2022 (a)
Maturity Date at June 30, 2022Principal Outstanding Balance at
Senior Unsecured Credit FacilityJune 30, 2022December 31, 2021
Unsecured Term Loans:
Term Loan — borrowing in British pounds sterling (b) (c) (d)
SONIA + 0.9826%2/20/2025$326,787 $202,183 
Delayed Draw Term Loan — borrowing in euros (e)
EURIBOR + 0.95%2/20/2025223,321 109,296 
550,108 311,479 
Unsecured Revolving Credit Facility:
Borrowing in euros (e)
EURIBOR + 0.85%2/20/2025248,769 205,001 
Borrowing in U.S. dollars (f)
LIBOR + 0.85%2/20/2025151,000 — 
Borrowing in Japanese yen (g)
TIBOR + 0.85%2/20/202517,686 20,935 
Borrowing in British pounds sterlingN/A2/20/2025— 184,660 
417,455 410,596 


$967,563 $722,075 
__________
(a)The applicable interest rate at September 30, 2017
(a)The applicable interest rate at June 30, 2022 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa2 .
(b)SONIA means Sterling Overnight Index Average.
(c)Interest rate includes both a spread adjustment to the base rate and a credit spread.
(d)Balance excludes unamortized discount of $1.8 million and $0.9 million at June 30, 2022 and December 31, 2021, respectively.
(e)EURIBOR means Euro Interbank Offered Rate.
(f)LIBOR means London Interbank Offered Rate.
(g)TIBOR means Tokyo Interbank Offered Rate.

Senior Unsecured Senior Notes of BBB/Baa2.
(b)Balance excludes unamortized deferred financing costs of $0.2 million and unamortized discount of $1.3 million at September 30, 2017.
(c)EURIBOR means Euro Interbank Offered Rate.
(d)Balance excludes unamortized deferred financing costs of less than $0.1 million at December 31, 2016.

Unsecured Senior Notes


As set forth in the table below, we have euro and U.S. dollar-denominated senior unsecured senior notes outstanding with an aggregate principal balance outstanding of $2.5$5.5 billion at SeptemberJune 30, 2017. 2022 (the “Senior Unsecured Notes”).

We refer to these notes collectively asredeemed the Unsecured Senior Notes. On January 19, 2017, we completed a public offering of €500.0 million of 2.25%2.0% Senior Notes atdue 2023 in March 2021. In connection with this redemption, we paid a price“make-whole” amount of 99.448%$26.2 million (based on the exchange rate of par value, issued bythe euro as of the date of redemption) and recognized a loss on extinguishment of $28.2 million, which is included within Other gains and (losses) on our wholly owned subsidiary, WPC Eurobond B.V., which are guaranteed by us. These 2.25% Senior Notes have a 7.5-year term and are scheduled to mature on July 19, 2024.consolidated statements of income for the six months ended June 30, 2021.



W. P. Carey 6/30/2022 10-Q– 30

W. P. Carey 9/30/2017 10-Q– 37
Notes to Consolidated Financial Statements (Unaudited)


Interest on the Senior Unsecured Senior Notes is payable annually in arrears for our euro-denominated senior notes and semi-annually for U.S. dollar-denominated senior notes. The Senior Unsecured Senior Notes can be redeemed at par within three months of their respective maturities, or we can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 3020 to 35 basis points. The following table presents a summary of our Senior Unsecured Senior Notes outstanding at SeptemberJune 30, 20172022 (currency in millions)thousands):
        Original Issue Discount Effective Interest Rate     Principal Outstanding Balance at
Unsecured Senior Notes, net (a)
 Issue Date Principal Amount Price of Par Value   Coupon Rate Maturity Date September 30, 2017 December 31, 2016
2.0% Senior Notes 1/21/2015 €500.0
 99.220% $4.6
 2.107% 2.0% 1/20/2023 $590.3
 $527.1
4.6% Senior Notes 3/14/2014 $500.0
 99.639% $1.8
 4.645% 4.6% 4/1/2024 500.0
 500.0
2.25% Senior Notes 1/19/2017 €500.0
 99.448% $2.9
 2.332% 2.25% 7/19/2024 590.3
 —
4.0% Senior Notes 1/26/2015 $450.0
 99.372% $2.8
 4.077% 4.0% 2/1/2025 450.0
 450.0
4.25% Senior Notes 9/12/2016 $350.0
 99.682% $1.1
 4.290% 4.25% 10/1/2026 350.0
 350.0
                $2,480.6
 $1,827.1
Principal AmountCoupon RateMaturity DatePrincipal Outstanding Balance at
Senior Unsecured Notes, net (a)
Issue DateJune 30, 2022December 31, 2021
4.6% Senior Notes due 20243/14/2014$500,000 4.6 %4/1/2024$500,000 $500,000 
2.25% Senior Notes due 20241/19/2017€500,000 2.25 %7/19/2024519,350 566,300 
4.0% Senior Notes due 20251/26/2015$450,000 4.0 %2/1/2025450,000 450,000 
2.250% Senior Notes due 202610/9/2018€500,000 2.250 %4/9/2026519,350 566,300 
4.25% Senior Notes due 20269/12/2016$350,000 4.25 %10/1/2026350,000 350,000 
2.125% Senior Notes due 20273/6/2018€500,000 2.125 %4/15/2027519,350 566,300 
1.350% Senior Notes due 20289/19/2019€500,000 1.350 %4/15/2028519,350 566,300 
3.850% Senior Notes due 20296/14/2019$325,000 3.850 %7/15/2029325,000 325,000 
0.950% Senior Notes due 20303/8/2021€525,000 0.950 %6/1/2030545,318 594,615 
2.400% Senior Notes due 203110/14/2020$500,000 2.400 %2/1/2031500,000 500,000 
2.450% Senior Notes due 203210/15/2021$350,000 2.450 %2/1/2032350,000 350,000 
2.250% Senior Notes due 20332/25/2021$425,000 2.250 %4/1/2033425,000 425,000 
$5,522,718 $5,759,815 
__________
(a)
(a)Aggregate balance excludes unamortized deferred financing costs totaling $15.0 million and $12.1 million, and unamortized discount totaling $10.2 million and $7.8 million, at September 30, 2017 and December 31, 2016, respectively.

Proceeds from the issuances of each of these notes were used primarily to partially pay down the amounts then outstanding under the unsecured revolving credit facility that we had in place at that time. In connection with the offering of the 2.25% Senior Notes in January 2017, we incurred financing costs totaling $4.0$25.6 million during the nine months ended Septemberand $28.7 million, and unamortized discount totaling $26.0 million and $29.2 million, at June 30, 2017, which are included in Unsecured Senior Notes, net in the consolidated financial statements2022 and are being amortized to Interest expense over the term of the 2.25% Senior Notes.December 31, 2021, respectively.


Covenants


The Senior Unsecured Credit Facility, as amended, andAgreement, each of the Senior Unsecured Senior Notes, and certain of our non-recourse mortgage loan agreements include customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. The Senior Unsecured Credit Facility also contains various customary affirmative and negativeThere have been no significant changes in our debt covenants applicable to us and our subsidiaries, subject to materiality and other qualifications, baskets, and exceptions as outlinedfrom what was disclosed in the Credit Agreement.2021 Annual Report. We were in compliance with all of these covenants at SeptemberJune 30, 2017.2022.

We may make unlimited Restricted Payments (as defined in the Credit Agreement), as long as no non-payment default or financial covenant default has occurred before, or would on a pro forma basis occur as a result of, the Restricted Payment. In addition, we may make Restricted Payments in an amount required to (i) maintain our REIT status and (ii) as a result of that status, not pay federal or state income or excise tax, as long as the loans under the Credit Agreement have not been accelerated and no bankruptcy or event of default has occurred.

Obligations under the Senior Unsecured Credit Facility may be declared immediately due and payable upon the occurrence of certain events of default as defined in the Credit Agreement, including failure to pay any principal when due and payable, failure to pay interest within five business days after becoming due, failure to comply with any covenant, representation or condition of any loan document, any change of control, cross-defaults, and certain other events as set forth in the Credit Agreement, with grace periods in some cases.


Non-Recourse Mortgages
 
At SeptemberJune 30, 2017,2022, the weighted-average interest rate for our total non-recourse mortgage notes payable bore interest at fixed annual rates ranging from 2.0% to 7.8%was 3.8% (fixed-rate and variable contractual annual rates ranging from 0.9% to 6.9%variable-rate non-recourse mortgage notes payable were 4.8% and 1.9%, respectively), with maturity dates ranging from December 2017August 2022 to September 2031.

Repayments

During the six months ended June 2027.

In January 2017,30, 2022, we repaid two international(i) prepaid a non-recourse mortgage loansloan of $10.4 million and (ii) repaid a non-recourse mortgage loan at maturity with an aggregatea principal balance of approximately $243.8$2.5 million. We recognized a net loss on extinguishment of debt of $1.1 million encumberingon these repayments, which is included within Other gains and (losses) on our consolidated statements of income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 5.8%.

During the six months ended June 30, 2021, we (i) prepaid non-recourse mortgage loans totaling $426.9 million, and (ii) repaid a German investment,non-recourse mortgage loan at maturity with a principal balance of approximately $3.0 million. We recognized an aggregate net loss on extinguishment of debt of $31.9 million on these repayments, primarily comprised of certain properties leased to Hellweg Die Profi-Baumärkte GmbH & Co. KG, or the Hellweg 2 Portfolio,prepayment penalties totaling $31.8 million, which is jointly owned withincluded within Other gains and (losses) on our affiliate, CPA®:17 – Global. In connection with this repayment, CPA®:17 – Global contributed $90.3 million, which was accounted for as a contribution from a noncontrolling interest. Amounts are based on the exchange rateconsolidated statements of the euro as of the date of repayment.income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 5.1%.



W. P. Carey 6/30/2022 10-Q– 31

W. P. Carey 9/30/2017 10-Q– 38
Notes to Consolidated Financial Statements (Unaudited)

interest rate for these mortgage loans on the date of repayment was 5.4%. During the nine months ended September 30, 2017, we repaid additional loans at maturity with an aggregate principal balance of approximately $19.3 million.

During the nine months ended September 30, 2017, we prepaid non-recourse mortgage loans totaling $157.4 million, including $38.4 million encumbering properties that were disposed of during the nine months ended September 30, 2017 (Note 15). Amounts are based on the exchange rate of the related foreign currency as of the date of repayment, as applicable. The weighted-average interest rate for these mortgage loans on their respective dates of prepayment was 5.5%. In connection with these payments, we recognized a gain on extinguishment of debt of $0.8 million during the nine months ended September 30, 2017, which was included in Other income and (expenses) in the consolidated financial statements.

Foreign Currency Exchange Rate Impact


During the ninesix months ended SeptemberJune 30, 2017,2022, the U.S. dollar weakenedstrengthened against the euro, resulting in an aggregate increasedecrease of $204.7$329.4 million in the aggregate carrying values of our Non-recourse mortgages, net, Senior Unsecured Credit Facility, and Senior Unsecured Senior Notes, net from December 31, 20162021 to SeptemberJune 30, 2017.2022.


Scheduled Debt Principal Payments
 
Scheduled debt principal payments during the remainderas of 2017, each of the next four calendar years following December 31, 2017, and thereafter through 2027June 30, 2022 are as follows (in thousands):
Years Ending December 31, Total
2022 (remainder)$30,717 
2023178,319 
20241,056,815 
20251,466,474 
2026901,421 
Thereafter through 20333,185,790 
Total principal payments6,819,536 
Unamortized discount, net(28,209)
Unamortized deferred financing costs(25,699)
Total$6,765,628 

Certain amounts in the table above are based on the applicable foreign currency exchange rate at June 30, 2022.

Years Ending December 31,  
Total (a)
2017 (remainder) $40,784
2018 278,163
2019 99,384
2020 221,547
2021 384,004
Thereafter through 2027 3,320,040
Total principal payments 4,343,922
Unamortized deferred financing costs (16,210)
Unamortized discount, net (b)
 (12,874)
Total $4,314,838
__________
(a)Certain amounts are based on the applicable foreign currency exchange rate at September 30, 2017.
(b)
Represents the unamortized discount on the Unsecured Senior Notes of $10.2 million in aggregate, unamortized discount on the Unsecured Term Loans of $1.3 million, and unamortized discount of $1.4 million in aggregate resulting from the assumption of property-level debt in connection with both the CPA®:15 Merger and the CPA®:16 Merger (Note 1).

Note 11. Commitments and Contingencies


At SeptemberJune 30, 2017,2022, we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.


Note 12. Restructuring and Other Compensation

Expenses Recorded During 2017

On June 15, 2017, our Board approved a plan to exit all non-traded retail fundraising activities carried out by our wholly-owned broker-dealer subsidiary, Carey Financial, as of June 30, 2017 (Note 1). As a result, we incurred non-recurring charges to exit our fundraising activities, consisting primarily of severance costs. During the nine months ended September 30, 2017, we recorded $8.2 million of severance and benefits and $0.9 million of other related costs, which are all included in Restructuring and other compensation in the consolidated financial statements.



W. P. Carey 9/30/2017 10-Q– 39
Notes to Consolidated Financial Statements (Unaudited)

Expenses Recorded During 2016

In connection with the resignation of our then-chief executive officer, Trevor P. Bond, we and Mr. Bond entered into a letter agreement, dated February 10, 2016. Under the terms of the agreement, subject to certain conditions, Mr. Bond is entitled to receive the severance benefits provided for in his employment agreement and, subject to satisfaction of applicable performance conditions and proration, vesting of his outstanding unvested PSUs in accordance with their terms. In addition, the portion of his previously granted RSUs that were scheduled to vest on February 15, 2016, which would have been forfeited upon separation pursuant to their terms, were allowed to vest on that date. In connection with the separation agreement, we recorded $5.1 million of severance-related expenses during the nine months ended September 30, 2016, which are included in Restructuring and other compensation in the consolidated financial statements.

In February 2016, we entered into an agreement with Catherine D. Rice, our former chief financial officer, in connection with the termination of her employment, which provides for the continued vesting of her outstanding RSUs and PSUs pursuant to their terms as though her employment had continued through their respective vesting dates. In connection with the modification of these award terms, we recorded incremental stock-based compensation expense of $2.4 million during the nine months ended September 30, 2016, which is included in Restructuring and other compensation in the consolidated financial statements.

In March 2016, as part of a cost savings initiative, we undertook a reduction in force, or RIF, and realigned and consolidated certain positions within the company, resulting in employee headcount reductions. As a result of these reductions in headcount and the separations described above, during the nine months ended September 30, 2016, we recorded $8.2 million of severance and benefits, $3.2 million of stock-based compensation, and $0.5 million of other related costs, which are all included in Restructuring and other compensation in the consolidated financial statements.

As of September 30, 2017, the accrued liability for these severance obligations recorded during 2016 and 2017 was $4.8 million, which is included within Accounts payable, accrued expenses and other liabilities in the consolidated financial statements.

Note 13.12. Stock-Based Compensation and Equity


Stock-Based Compensation


In June 2017, our shareholders approved the 2017 Share Incentive Plan, which replaced our predecessor plans for employees, the 2009 Share Incentive Plan, and for non-employee directors, the 2009 Non-Employee Directors’ Incentive Plan. No further awards will be granted under those predecessorWe maintain several stock-based compensation plans, which are more fully described in the 20162021 Annual Report. The 2017 Share Incentive Plan authorizesThere have been no significant changes to the issuanceterms and conditions of up to 4,000,000 sharesany of our common stock, reduced bystock-based compensation plans or arrangements during the number of shares (279,728) that were subject to awards granted under the 2009 Share Incentive Plan and the 2009 Non-Employee Directors’ Incentive Plan after December 31, 2016 and before the effective date of the 2017 Share Incentive Plan, which was June 15, 2017. The 2017 Share Incentive Plan provides for the grant of various stock- and cash-based awards, including (i) share options, (ii) RSUs, (iii) PSUs, (iv) RSAs, and (v) dividend equivalent rights.

During the ninesix months ended SeptemberJune 30, 2017 and 2016, we2022. We recorded stock-based compensation expense of $14.6$9.8 million and $18.2$9.0 million during the three months ended June 30, 2022 and 2021, respectively, ofand $17.6 million and $14.4 million during the six months ended June 30, 2022 and 2021, respectively, which $3.2 million was included in Restructuring and otherStock-based compensation forexpense in the nine months ended September 30, 2016 (Note 12).consolidated financial statements.




W. P. Carey 6/30/2022 10-Q– 32

W. P. Carey 9/30/2017 10-Q– 40
Notes to Consolidated Financial Statements (Unaudited)

Restricted and Conditional Awards
 
Nonvested RSAs, RSUs,restricted share awards (“RSAs”), restricted share units (“RSUs”), and PSUsperformance share units (“PSUs”) at SeptemberJune 30, 20172022 and changes during the ninesix months ended September June 30, 2017 2022were as follows:
RSA and RSU AwardsPSU Awards
RSA and RSU Awards PSU AwardsSharesWeighted-Average
Grant Date
Fair Value		SharesWeighted-Average
Grant Date
Fair Value
Shares 
Weighted-Average
Grant Date
Fair Value
 Shares Weighted-Average
Grant Date
Fair Value
Nonvested at January 1, 2017356,865
 $61.63
 310,018
 $73.80
Nonvested at January 1, 2022Nonvested at January 1, 2022306,994 $71.21 398,255 $86.86 
Granted (a)
193,467
 62.19
 107,934
 75.39
Granted (a)
212,226 80.10 144,311 104.97 
Vested (b)
(169,560) 62.77
 (132,412) 74.21
Vested (b)
(136,412)72.53 (165,615)92.16 
Forfeited(41,957) 61.09
 (45,258) 76.91
Forfeited(5,412)76.54 — — 
Adjustment (c)
—
 —
 28,271
 63.24
Adjustment (c)
— — 143,984 81.65 
Nonvested at September 30, 2017 (d)
338,815
 $61.45
 268,553
 $75.18
Nonvested at June 30, 2022 (d)
Nonvested at June 30, 2022 (d)
377,396 $75.65 520,935 $89.53 
__________
(a)
(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, 2017, we used a risk-free interest rate of 1.5%, an expected volatility rate of 17.1%, and assumed a dividend yield of zero.
(b)The total fair value of shares vested during the nine months ended September 30, 2017 was $20.5 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, 2017 and December 31, 2016, we had an obligation to issue 1,135,563 and 1,217,274 shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $46.7 million and $50.2 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 to reflect the number of shares expected to be issued when the PSUs vest.
(d)At September 30, 2017, total unrecognized compensation expense related to these awards was approximately $21.4 million, with an aggregate weighted-average remaining term of 1.9 years.
During the threedate of grant on a 1-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 nine(ii) future financial performance projections. To estimate the fair value of PSUs granted during the six months ended SeptemberJune 30, 2017, 2,4752022, we used a risk-free interest rate of 1.2%, an expected volatility rate of 36.7%, and 134,709assumed a dividend yield of zero.
(b)The grant date fair value of shares vested during the six months ended June 30, 2022 was $25.2 million. Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to previously made deferral elections. At June 30, 2022 and December 31, 2021, we had an obligation to issue 1,181,947 and 1,104,020 shares, respectively, of our common stock options, respectively, were exercisedunderlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $57.0 million and $49.8 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 3 times the original awards. As a result, we recorded adjustments at June 30, 2022 to reflect the number of shares expected to be issued when the PSUs vest.
(d)At June 30, 2022, total unrecognized compensation expense related to these awards was approximately $47.5 million, with an aggregate intrinsic valueweighted-average remaining term of less than $0.1 million and $4.0 million, respectively. At September 30, 2017, there were 10,324 stock options outstanding, all of which were exercisable and, if not exercised, will expire on December 31, 2017.2.2 years.



W. P. Carey 9/30/2017 10-Q– 41
Notes to Consolidated Financial Statements (Unaudited)


Earnings Per Share
 
Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of our nonvested RSUs and RSAs contain rights to receive non-forfeitable distribution equivalents or distributions, respectively, and therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes the income attributable to the nonvested participating RSUs and RSAs from the numerator and such nonvested shares in the denominator. The following table summarizes basic and diluted earnings (in thousands, except share amounts)(dollars in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Net income — basic and diluted$127,678 $120,245 $284,673 $171,879 
Weighted-average shares outstanding — basic194,019,451 180,099,370 192,971,256 178,379,654 
Effect of dilutive securities744,244 569,362 734,779 522,605 
Weighted-average shares outstanding — diluted194,763,695 180,668,732 193,706,035 178,902,259 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income attributable to W. P. Carey$80,278
 $110,943
 $202,080
 $220,043
Net income attributable to nonvested participating RSUs and RSAs(239) (386) (600) (766)
Net income — basic and diluted$80,039
 $110,557
 $201,480
 $219,277
        
Weighted-average shares outstanding — basic108,019,292
 107,221,668
 107,751,672
 106,493,145
Effect of dilutive securities124,402
 246,361
 195,818
 360,029
Weighted-average shares outstanding — diluted108,143,694
 107,468,029
 107,947,490
 106,853,174

For the three and ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, there were no potentially dilutive securities excluded from the computation of diluted earnings per share.


At-The-Market Equity Offering Program

On March 1, 2017, we filed a prospectus supplement with the SEC pursuant to which we may offer and sell shares of our common stock from time to time, up to an aggregate gross sales price of $400.0 million, through a continuous “at-the-market,” or ATM, offering program with a consortium of banks acting as sales agents. On that date, we also terminated a prior ATM program that was established on June 3, 2015, under which we could also offer and sell shares of our common stock, up to an aggregate gross sales price of $400.0 million. During the three and nine months ended September 30, 2017, we issued 15,500 and 345,253 shares, respectively, of our common stock under the current ATM program at a weighted-average price of $67.05 and $67.78 per share, respectively, for net proceeds of $0.9 million and $22.8 million, respectively. During the three and nine months ended September 30, 2016, we issued 968,535 and 1,249,836 shares, respectively, of our common stock under the prior ATM program at a weighted-average price of $68.54 and $68.52 per share, respectively, for net proceeds of $65.2 million and $84.1 million, respectively. As of September 30, 2017, $376.6 million remained available for issuance under our current ATM program.

Acquisition of Noncontrolling Interest

On May 24, 2017, we acquired the remaining 25% interest in an international jointly owned investment (which we already consolidated) from the noncontrolling interest holders for €2, bringing our ownership interest to 100%. No gain or loss was recognized on the transaction. We recorded an adjustment of approximately $1.8 million to Additional paid-in capital in our consolidated statement of equity for the nine months ended September 30, 2017 related to the difference between the consideration transferred and the carrying value of the noncontrolling interest related to this investment. The property owned by the investment was sold on May 26, 2017 and we recognized a gain on sale of less than $0.1 million (Note 15).

Redeemable Noncontrolling Interest
We account for the noncontrolling interest in our subsidiary, W. P. Carey International, LLC, or WPCI, held by a third party as a redeemable noncontrolling interest, because, pursuant to a put option held by the third party, we had an obligation to redeem the interest at fair value, subject to certain conditions. This obligation was required to be settled in shares of our common stock. On October 1, 2013, we received a notice from the holder of the noncontrolling interest in WPCI regarding the exercise of the put option, pursuant to which we were required to purchase the third party’s 7.7% interest in WPCI. Pursuant to the terms of the6/30/2022 10-Q– 33



W. P. Carey 9/30/2017 10-Q– 42
Notes to Consolidated Financial Statements (Unaudited)

ATM Program
related put agreement, the value
On May 2, 2022, we established a continuous “at-the-market” offering program (“ATM Program”) with a syndicate of that interest was determined based on a third-party valuation as of October 31, 2013,banks, pursuant to which is the end of the month that the put option was exercised. In March 2016, we issued 217,011 shares of our common stock having an aggregate gross sales price of up to $1.0 billion may be sold (i) directly through or to the holderbanks acting as sales agents or as principal for their own accounts or (ii) participating banks or their affiliates acting as forward sellers on behalf of the redeemable noncontrolling interest, which had a value of $13.4 million at the date of issuance,any forward purchasers pursuant to a formula set forthforward sale agreement (our “ATM Forwards”). Effective as of that date, we terminated a prior ATM Program that was established on August 9, 2019.

Our prior ATM Program is discussed in the put agreement. Through2021 Annual Report. The following table sets forth certain information regarding the issuance of shares of our common stock under our prior ATM Program during the periods presented (net proceeds in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Shares of common stock issued491,068 2,205,509 2,740,295 4,225,624 
Weighted-average price per share$81.70 $74.56 $80.79 $72.50 
Net proceeds$39,101 $162,292 $218,095 $302,512 

Forward Equity

We expect to settle the ATM Forwards in full on or prior to the maturity date of this Report,each ATM Forward via physical delivery of the third party hasoutstanding shares of common stock in exchange for cash proceeds. However, subject to certain exceptions, we may also elect to cash settle or net share settle all or any portion of our obligations under any ATM Forwards. The forward sale price that we will receive upon physical settlement of the ATM Forwards will be (i) subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread (i.e., if the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price) and (ii) decreased based on amounts related to expected dividends on shares of our common stock during the term of the ATM Forwards.

We determined that our ATM Forwards meet the criteria for equity classification and are therefore exempt from derivative accounting. We recorded the ATM Forwards at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not formally transferred his interestsrequired under equity classification.

In addition, we refer to our three forward equity offerings presented below as the June 2020 Equity Forwards, June 2021 Equity Forwards, and August 2021 Equity Forwards (collectively, the “Equity Forwards”), which are discussed in WPCIthe 2021 Annual Report. Our ATM Forwards are also presented below (gross offering proceeds at closing in thousands):
Agreement Date (a)
Shares Offered (b)
Average Gross Offering PriceAverage Gross Offering Proceeds at ClosingOutstanding Shares as of June 30, 2022
June 2020 Equity Forwards (c)
6/17/20205,462,500$70.00 $382,375 —
June 2021 Equity Forwards (d)
6/7/20216,037,50075.30 454,624 —
August 2021 Equity Forwards8/9/20215,175,00078.00 403,650 3,925,000
ATM Forwards (e)
5/2/20223,674,18783.98 308,553 3,674,187
7,599,187
__________
(a)We expect to us pursuantsettle the Equity Forwards in full within 18 months of the respective agreement dates via physical delivery of the outstanding shares of common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations under the Equity Forwards, subject to certain conditions.
(b)Includes 712,500, 787,500, and 675,000 shares of common stock purchased by certain underwriters in connection with the put agreement becauseJune 2020 Equity Forwards, June 2021 Equity Forwards, and August 2021 Equity Forwards, respectively, upon the exercise of a dispute regarding30-day options to purchase additional shares.
(c)All remaining outstanding shares were settled during the three months ended June 30, 2021.
(d)All remaining outstanding shares were settled during the three months ended December 31, 2021.
(e)We sold shares under our ATM Forwards during the second quarter of 2022. We did not settle any amounts that may still be owedof the shares sold and therefore did not receive any proceeds from such sales.

W. P. Carey 6/30/2022 10-Q– 34

Notes to him.Consolidated Financial Statements (Unaudited)

The following table presents a reconciliationsets forth certain information regarding the settlement of redeemable noncontrolling interest (inour Equity Forwards during the periods presented (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Shares of common stock delivered— 4,523,209 — 4,523,209 
Net proceeds$— $309,864 $— $309,864 
 Nine Months Ended September 30,
 2017 2016
Beginning balance$965
 $14,944
Distributions—
 (13,418)
Redemption value adjustment—
 (561)
Ending balance$965
 $965


Reclassifications Out of Accumulated Other Comprehensive Loss


The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):
Three Months Ended June 30, 2022
Gains and (Losses) on Derivative InstrumentsForeign Currency Translation AdjustmentsGains and (Losses) on InvestmentsTotal
Beginning balance$23,717 $(265,857)$— $(242,140)
Other comprehensive loss before reclassifications23,213 (43,993)— (20,780)
Amounts reclassified from accumulated other comprehensive loss to:
Non-operating income(3,359)— — (3,359)
Interest expense122 — — 122 
Total(3,237)— — (3,237)
Net current period other comprehensive loss19,976 (43,993)— (24,017)
Ending balance$43,693 $(309,850)$— $(266,157)
Three Months Ended September 30, 2017Three Months Ended June 30, 2021
Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Gains and Losses on Marketable Securities TotalGains and (Losses) on Derivative InstrumentsForeign Currency Translation AdjustmentsGains and (Losses) on InvestmentsTotal
Beginning balance$24,636
 $(267,868) $(416) $(243,648)Beginning balance$982 $(234,871)$— $(233,889)
Other comprehensive income before reclassifications(8,367) 25,417
 66
 17,116
Other comprehensive income before reclassifications(1,607)5,973 — 4,366 
Amounts reclassified from accumulated other comprehensive loss to:       Amounts reclassified from accumulated other comprehensive loss to:
Gain on sale of real estate, net of tax (Note 15)
—
 3,562
 —
 3,562
Non-operating incomeNon-operating income(614)— — (614)
Interest expense286
 —
 —
 286
Interest expense198 — — 198 
Other income and (expenses)(2,189) —
 —
 (2,189)
Total(1,903) 3,562
 —
 1,659
Total(416)— — (416)
Net current period other comprehensive income(10,270) 28,979
 66
 18,775
Net current period other comprehensive income(2,023)5,973 — 3,950 
Net current period other comprehensive gain attributable to noncontrolling interests8
 (4,716) —
 (4,708)
Net current period other comprehensive income attributable to noncontrolling interestsNet current period other comprehensive income attributable to noncontrolling interests(21)— — (21)
Ending balance$14,374
 $(243,605) $(350) $(229,581)Ending balance$(1,062)$(228,898)$— $(229,960)
W. P. Carey 6/30/2022 10-Q– 35
 Three Months Ended September 30, 2016
 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Gains and Losses on Marketable Securities Total
Beginning balance$34,744
 $(240,985) $40
 $(206,201)
Other comprehensive loss before reclassifications(1,178) (11,824) (7) (13,009)
Amounts reclassified from accumulated other comprehensive loss to:       
Interest expense512
 —
 —
 512
Other income and (expenses)(2,427) —
 —
 (2,427)
Total(1,915) —
 —
 (1,915)
Net current period other comprehensive loss(3,093) (11,824) (7) (14,924)
Net current period other comprehensive gain attributable to noncontrolling interests17
 (218) —
 (201)
Ending balance$31,668
 $(253,027) $33
 $(221,326)



W. P. Carey 9/30/2017 10-Q– 43
Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2022
Gains and (Losses) on Derivative InstrumentsForeign Currency Translation AdjustmentsGains and (Losses) on InvestmentsTotal
Beginning balance$16,347 $(256,705)$18,688 $(221,670)
Other comprehensive loss before reclassifications32,523 (53,145)— (20,622)
Amounts reclassified from accumulated other comprehensive loss to:
Non-operating income(5,463)— — (5,463)
Interest expense286 — — 286 
Other gains and (losses) (Note 8)
— — (18,688)(18,688)
Total(5,177)— (18,688)(23,865)
Net current period other comprehensive loss27,346 (53,145)(18,688)(44,487)
Ending balance$43,693 $(309,850)$— $(266,157)
Six Months Ended June 30, 2021
Gains and (Losses) on Derivative InstrumentsForeign Currency Translation AdjustmentsGains and (Losses) on InvestmentsTotal
Beginning balance$(18,937)$(220,969)$— $(239,906)
Other comprehensive income before reclassifications16,805 (7,929)— 8,876 
Amounts reclassified from accumulated other comprehensive loss to:
Non-operating income567 — — 567 
Interest expense524 — — 524 
Total1,091 — — 1,091 
Net current period other comprehensive income17,896 (7,929)— 9,967 
Net current period other comprehensive income attributable to noncontrolling interests(21)— — (21)
Ending balance$(1,062)$(228,898)$— $(229,960)
 Nine Months Ended September 30, 2017
 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Gains and Losses on Marketable Securities 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
Interest expense1,024
 —
 —
 1,024
Other income and (expenses)(8,490) —
 —
 (8,490)
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 interests13
 (13,961) —
 (13,948)
Ending balance$14,374
 $(243,605) $(350) $(229,581)


See Note 9 for additional information on our derivatives activity recognized within Other comprehensive (loss) income for the periods presented.

 Nine Months Ended September 30, 2016
 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Gains and Losses on Marketable Securities Total
Beginning balance$37,650
 $(209,977) $36
 $(172,291)
Other comprehensive loss before reclassifications(1,155) (41,999) (3) (43,157)
Amounts reclassified from accumulated other comprehensive loss to:       
Interest expense1,578
 —
 —
 1,578
Other income and (expenses)(6,422) —
 —
 (6,422)
Total(4,844) —
 —
 (4,844)
Net current period other comprehensive loss(5,999) (41,999) (3) (48,001)
Net current period other comprehensive gain attributable to noncontrolling interests17
 (1,051) —
 (1,034)
Ending balance$31,668
 $(253,027) $33
 $(221,326)

DistributionsDividends Declared


During the thirdsecond quarter of 2017, we2022, our Board declared a quarterly distributiondividend of $1.0050$1.059 per share, which was paid on October 16, 2017July 15, 2022 to stockholders of record on October 2, 2017, in the aggregate amountas of $107.4 million.June 30, 2022.


During the ninesix months ended SeptemberJune 30, 2017,2022, we declared distributionsdividends totaling $3.00$2.116 per share in the aggregate amount of $320.3 million.share.


Note 14.13. Income Taxes


We elected to be treated as a REIT and believe that we have been organized and have operated in such a manner to maintain our qualification as a REIT for federal and state income tax purposes. As a REIT, we are generally not subject to corporate level federal income taxes on earnings distributed to our stockholders. Since inception, we have distributed at least 100% of our taxable income annually and intend to do so for the tax year ending December 31, 2017.annually. Accordingly, we have not included any provisions for federal income taxes related to the REIT in the accompanying consolidated financial statements for the three and ninesix months ended SeptemberJune 30, 20172022 and 2016.2021.


Certain of our subsidiaries have elected TRS status. A TRS may provide certain services considered impermissible for REITs and may hold assets that REITs may not hold directly. We also own real property in jurisdictions outside the United States


W. P. Carey 9/30/2017 10-Q– 44
Notes to Consolidated Financial Statements (Unaudited)

through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. The accompanying consolidated financial statements include an interim tax provision for our TRSs and foreign subsidiaries, as necessary, for the three and ninesix months ended SeptemberJune 30, 20172022 and 2016. 2021.

W. P. Carey 6/30/2022 10-Q– 36

Notes to Consolidated Financial Statements (Unaudited)
Current income tax expense was $3.0$6.6 million and $4.8$9.1 million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $11.1$14.9 million and $14.7$17.5 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively.

During the second quarter of 2016, we identified and recorded out-of-period adjustments related to adjustments to prior period Deferred income tax returns. This adjustment is reflected as a $3.0 million reduction of our Benefit from income taxes in the consolidated statements of income for the nine months ended September 30, 2016 (Note 2), and is included in current income tax expense for the nine months ended September 30, 2016.

Our TRSs and foreign subsidiaries are subject to U.S. federal, state, and foreign income taxes. As such, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if we believe that it is more likely than not that we will not realize the tax benefit of deferred tax assets based on available evidence at the time the determination is made. A change in circumstances may cause us to change our judgment about whether the tax benefit of a deferred tax asset will more likely than not be realized. We generally report any change in the valuation allowance through our income statement in the period in which such changes in circumstances occur. Deferred tax assets (net of valuation allowance) and liabilities for our TRSs and foreign subsidiaries were recorded, as necessary, as of September 30, 2017 and December 31, 2016. The majority of our deferred tax assets relate to the timing difference between the financial reporting basis and tax basis for stock-based compensation expense. The majority of our deferred tax liabilities relate to differences between the tax basis and financial reporting basis of the assets acquired in acquisitions in which the tax basis of such assets(expense) was not stepped up to fair value for income tax purposes. (Provision for) benefit from income taxes included deferred income tax benefits of $1.2$0.4 million and $1.6$(0.2) million for the three months ended SeptemberJune 30, 20172022 and 2016,2021, respectively, and $8.2$1.6 million and $19.2$2.4 million for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively.


Note 15.14. Property Dispositions
 
From time to time, we may decide to sell a property. We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We may make a decisiondecide to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet. All property dispositions are recorded within our Owned Real Estate segment.segment and are also discussed in Note 4.


2017 2022— During the three and ninesix months ended SeptemberJune 30, 2017,2022, we sold five8 and 14 properties, and 11 properties and a parcel of vacant land, respectively, for total proceeds, of $58.7 million and $102.5 million, respectively, net of selling costs, of $88.4 million and $115.1 million, respectively, and recognized a net gain on these sales of $19.3totaling $31.1 million and $22.7$42.4 million, respectively. In connection with the salerespectively (inclusive of a property in Malaysia in August 2017, and in accordance with ASC 830-30-40, Foreign Currency Matters, we reclassified $3.6 million of foreign currency translation losses from Accumulated other comprehensive loss to Gain on sale of real estate, net of tax (as a reduction to Gain on sale of real estate, net of tax), since the sale represented a disposal of our Malaysian investments (Note 13). One of the properties sold during the nine months ended September 30, 2017 was held for sale at December 31, 2016 (Note 4). In addition, in January 2017, we transferred ownership of two international properties and the related non-recourse mortgage loan, which had an aggregate asset carrying value of $31.3 million and an outstanding balance of $28.1 million (net of $3.8 million of cash held in escrow that was retained by the mortgage lender), respectively, on the dates of transfer, to the mortgage lender, resulting in a net loss ofincome taxes totaling less than $0.1 million.

Duringmillion for both the ninethree and six months ended SeptemberJune 30, 2017, we entered into a contract to sell one international property, which was classified as held for sale as of September 30, 2017 (Note 4)2022, recognized upon sale).


2016 2021— During the three and ninesix months ended SeptemberJune 30, 2016,2021, we sold three10 and 12 properties, and ten properties and a parcel of vacant land, respectively, for total proceeds, of $192.0 million and $392.6 million, respectively, net of selling costs, of $85.0 million and $98.4 million, respectively, and recognized a net gain on these sales of $37.4totaling $19.8 million and $39.9$29.2 million, respectively including amounts attributable to noncontrolling interests(inclusive of $0.9income taxes totaling $3.7 million for the nine months ended September 30, 2016. In April 2016, we transferred ownership

and $3.8 million, respectively, recognized upon sale).

W. P. Carey 6/30/2022 10-Q– 37

W. P. Carey 9/30/2017 10-Q– 45
Notes to Consolidated Financial Statements (Unaudited)

of a vacant international property and the related non-recourse mortgage loan, which had a carrying value of $39.8 million and an outstanding balance of $60.9 million, respectively, on the date of transfer, to the mortgage lender, resulting in a net gain of $16.4 million. In addition, in July 2016, a vacant domestic property with an asset carrying value of $13.7 million, which was encumbered by a $24.3 million non-recourse mortgage loan (net of $2.6 million of cash held in escrow that was retained by the mortgage lender), was foreclosed upon by the mortgage lender, resulting in a net gain of $11.6 million.

In connection with those sales that constituted businesses, during the three and nine months ended September 30, 2016 we allocated goodwill totaling $18.0 million and $32.9 million, respectively, to the cost basis of the properties for our Owned Real Estate segment based on the relative fair value at the time of the sale.

In the fourth quarter of 2015, we executed a lease amendment with a tenant in a domestic office building. The amendment extended the lease term an additional 15 years to January 31, 2037 and provided a one-time rent payment of $25.0 million, which was paid to us on December 18, 2015. The lease amendment also provided an option to terminate the lease effective February 29, 2016, with additional lease termination fees of $22.2 million to be paid to us on or five days before February 29, 2016 upon exercise of the option. The tenant exercised the option on January 1, 2016. The aggregate of the additional rent payment of $25.0 million and the lease termination fees of $22.2 million were amortized to lease termination income from the lease amendment date on December 4, 2015 through the end of the non-cancelable lease term on February 29, 2016, resulting in $15.0 million recognized during the year ended December 31, 2015 and $32.2 million recognized during the nine months ended September 30, 2016 within Lease termination income and other in the consolidated financial statements. In addition, during the fourth quarter of 2015, we entered into an agreement to sell the property to a third party and the buyer placed a deposit of $12.7 million for the purchase of the property that was held in escrow. In February 2016, we sold the property for proceeds of $44.4 million, net of selling costs, and recognized a loss on the sale of $10.7 million.



W. P. Carey 9/30/2017 10-Q– 46
Notes to Consolidated Financial Statements (Unaudited)

Note 16.15. Segment Reporting
 
We evaluate our results from operations through our two2 major business segments: Owned Real Estate and Investment Management. As a result of our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017 (Note 1), we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include (i) equity in earnings of equity method investments in the Managed Programs and (ii) our equity investments in the Managed Programs in our Investment Management segment. Both (i) earnings from our investment in CCIF and (ii) our investment in CCIF continue to be included in our Investment Management segment. Results of operations and assets by segment for prior periods have been reclassified to conform to the current period presentation. The following tables present a summary of comparative results and assets for these business segments (in thousands):


Owned Real Estate
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenues
Lease revenues$314,354 $289,064 $622,079 $573,729 
Income from direct financing leases and loans receivable17,778 17,422 36,157 35,164 
Operating property revenues (a)
5,064 3,245 8,929 5,424 
Lease termination income and other2,591 5,059 16,713 6,644 
339,787 314,790 683,878 620,961 
Operating Expenses
Depreciation and amortization115,080 114,348 230,473 224,670 
General and administrative20,841 20,464 43,925 42,547 
Reimbursable tenant costs16,704 15,092 33,664 30,850 
Property expenses, excluding reimbursable tenant costs11,851 11,815 25,630 22,698 
Stock-based compensation expense9,758 9,048 17,591 14,429 
Impairment charges6,206 — 26,385 — 
Operating property expenses3,191 2,049 5,978 3,960 
Merger and other expenses1,984 (2,599)(341)(3,090)
185,615 170,217 383,305 336,064 
Other Income and Expenses
Interest expense(46,417)(49,252)(92,470)(100,892)
Gain on sale of real estate, net31,119 19,840 42,367 29,212 
Other gains and (losses)(20,155)7,472 14,263 (34,717)
Non-operating income5,975 3,065 14,517 9,337 
Earnings (losses) from equity method investments in real estate4,529 (1,854)3,742 (12,973)
(24,949)(20,729)(17,581)(110,033)
Income before income taxes129,223 123,844 282,992 174,864 
Provision for income taxes(5,955)(9,119)(12,868)(15,545)
Net Income from Real Estate123,268 114,725 270,124 159,319 
Net income attributable to noncontrolling interests(40)(38)(38)(45)
Net Income from Real Estate Attributable to W. P. Carey$123,228 $114,687 $270,086 $159,274 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues       
Lease revenues$161,511
 $163,786
 $475,547
 $506,358
Operating property revenues8,449
 8,524
 23,652
 23,696
Reimbursable tenant costs5,397
 6,537
 15,940
 19,237
Lease termination income and other1,227
 1,224
 4,234
 34,603
 176,584
 180,071
 519,373
 583,894
        
Operating Expenses       
Depreciation and amortization62,970
 61,740
 186,481
 210,557
General and administrative11,234
 7,453
 27,311
 25,653
Property expenses, excluding reimbursable tenant costs10,556
 10,193
 31,196
 38,475
Reimbursable tenant costs5,397
 6,537
 15,940
 19,237
Stock-based compensation expense1,880
 1,572
 4,733
 4,316
Other expenses65
 —
 1,138
 2,975
Impairment charges—
 14,441
 —
 49,870
Restructuring and other compensation—
 —
 —
 4,413
 92,102
 101,936
 266,799
 355,496
Other Income and Expenses       
Interest expense(41,182) (44,349) (125,374) (139,496)
Equity in earnings of equity method investments in real estate3,740
 3,230
 9,533
 9,585
Other income and (expenses)(4,918) 3,244
 (6,249) 7,681
 (42,360) (37,875) (122,090) (122,230)
Income before income taxes and gain on sale of real estate42,122
 40,260
 130,484
 106,168
(Provision for) benefit from income taxes(1,511) (530) (6,696) 6,792
Income before gain on sale of real estate40,611
 39,730
 123,788
 112,960
Gain on sale of real estate, net of tax19,257
 49,126
 22,732
 68,070
Net Income from Owned Real Estate59,868
 88,856
 146,520
 181,030
Net income attributable to noncontrolling interests(3,376) (1,359) (8,530) (6,294)
Net Income from Owned Real Estate Attributable to W. P. Carey$56,492
 $87,497
 $137,990
 $174,736




W. P. Carey 6/30/2022 10-Q– 38

W. P. Carey 9/30/2017 10-Q– 47
Notes to Consolidated Financial Statements (Unaudited)

Investment Management
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenues
Asset management and other revenue$3,467 $3,966 $6,887 $7,920 
Reimbursable costs from affiliates1,143 968 2,070 2,009 
4,610 4,934 8,957 9,929 
Operating Expenses
Reimbursable costs from affiliates1,143 968 2,070 2,009 
Merger and other expenses— — 3 15 
1,143 968 2,073 2,024 
Other Income and Expenses
Earnings from equity method investments in the Managed Programs2,872 1,698 8,431 3,084 
Other gains and (losses)(1,591)73 (264)1,074 
Non-operating (loss) income(1)— 3 84 
1,280 1,771 8,170 4,242 
Income before income taxes4,747 5,737 15,054 12,147 
(Provision for) benefit from income taxes(297)(179)(467)458 
Net Income from Investment Management Attributable to W. P. Carey$4,450 $5,558 $14,587 $12,605 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues       
Asset management revenue$17,938
 $15,978
 $53,271
 $45,596
Structuring revenue9,817
 12,301
 27,981
 30,990
Reimbursable costs from affiliates6,211
 14,540
 45,390
 46,372
Dealer manager fees105
 1,835
 4,430
 5,379
Other advisory revenue99
 522
 896
 522
 34,170
 45,176
 131,968
 128,859
Operating Expenses       
Reimbursable costs from affiliates6,211
 14,540
 45,390
 46,372
General and administrative6,002
 8,280
 25,878
 32,469
Subadvisor fees5,206
 4,842
 11,598
 10,010
Stock-based compensation expense2,755
 2,784
 9,916
 10,648
Restructuring and other compensation1,356
 —
 9,074
 7,512
Depreciation and amortization1,070
 1,062
 2,838
 3,278
Dealer manager fees and expenses462
 3,028
 6,544
 9,000
Other expenses—
 —
 —
 2,384
 23,062
 34,536
 111,238
 121,673
Other Income and Expenses       
Equity in earnings of equity method investments in the Managed Programs12,578
 13,573
 38,287
 38,658
Other income and (expenses)349
 1,857
 1,280
 1,717
 12,927
 15,430
 39,567
 40,375
Income before income taxes24,035
 26,070
 60,297
 47,561
(Provision for) benefit from income taxes(249) (2,624) 3,793
 (2,254)
Net Income from Investment Management Attributable to W. P. Carey$23,786
 $23,446
 $64,090
 $45,307


Total Company
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenues$344,397 $319,724 $692,835 $630,890 
Operating expenses186,758 171,185 385,378 338,088 
Other income and (expenses)(23,669)(18,958)(9,411)(105,791)
Provision for income taxes(6,252)(9,298)(13,335)(15,087)
Net income attributable to noncontrolling interests(40)(38)(38)(45)
Net income attributable to W. P. Carey$127,678 $120,245 $284,673 $171,879 
Total Assets at
June 30, 2022December 31, 2021
Real Estate$15,314,097 $15,344,703 
Investment Management140,132 135,927 
Total Company$15,454,229 $15,480,630 
__________
(a)Operating property revenues from our hotels include $3.3 million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively, and $5.4 million and $2.5 million for the six months ended June 30, 2022 and 2021, respectively, generated from a hotel in Bloomington, Minnesota (revenues reflect higher occupancy as the hotel’s business recovered from the COVID-19 pandemic).

W. P. Carey 6/30/2022 10-Q– 39

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues$210,754
 $225,247
 $651,341
 $712,753
Operating expenses115,164
 136,472
 378,037
 477,169
Other income and (expenses)(29,433) (22,445) (82,523) (81,855)
Gain on sale of real estate, net of tax19,257
 49,126
 22,732
 68,070
(Provision for) benefit from income taxes(1,760) (3,154) (2,903) 4,538
Net income attributable to noncontrolling interests(3,376) (1,359) (8,530) (6,294)
Net income attributable to W. P. Carey$80,278
 $110,943
 $202,080
 $220,043
 Total Assets at
 September 30, 2017 December 31, 2016
Owned Real Estate$7,975,925
 $8,104,974
Investment Management358,486
 348,980
Total Company$8,334,411
 $8,453,954



W. P. Carey 9/30/2017 10-Q– 48
Notes to Consolidated Financial Statements (Unaudited)

Note 17.16. Subsequent Events


Mortgage Loan RepaymentsAcquisitions and Completed Construction Project


In October 2017,July 2022, we repaid three non-recourse mortgage loans with an aggregate principal balancecompleted two acquisitions totaling approximately $281.9 million. They are as follows:

•$262.0 million for a portfolio of approximately $25.220 industrial facilities in the United States; and
•$19.9 million for a portfolio of 5 retail facilities in Spain.

In addition, in July 2022, we completed a build-to-suit project for $25.7 million.


Repayments of Loans to Affiliates

In October 2017, CWI 1 repaid a total of $29.2 million of the loans outstanding to us at September 30, 2017, of which $15.0 million reduced the amount outstanding under the revolving working capital facility and $14.2 million went toward repaying the bridge loan. In October 2017, CPA®:18 – Globalrepaid in full the $19.0 million loan that was outstanding to us at September 30, 2017 (Note 3).

Loan to Affiliate

On October 19, 2017, we entered into a secured $25.0 million revolving working capital facility with CWI 2. The loan bears interest at LIBOR plus 1.00% and maturesAmounts are based on the earlierapplicable exchange rate on the date of December 31, 2018 and the expiration or termination by CWI 2 of its advisory agreement with us (Note 3).

transaction.

W. P. Carey 6/30/2022 10-Q– 40

W. P. Carey 9/30/2017 10-Q– 49



Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide the reader with information that will assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThis item also provides the reader with our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also provides information aboutbreaks down the financial results of the segments of our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 20162021 Annual Report and subsequent reports filed under the Securities Exchange Act of 1934.

Business Overview
As described in more detail in1934, as amended (the “Exchange Act”). Refer to Item 1 of the 20162021 Annual Report for a description of our business.

Significant Developments

Proposed Merger with CPA:18 – Global

On February 27, 2022, we, provide long-term financing via sale-leasebackCPA:18 – Global, CPA:18 LP, and build-to-suitcertain of our subsidiaries entered into the Merger Agreement, pursuant to which CPA:18 – Global will merge with and into one of our indirect subsidiaries in exchange for shares of our common stock and cash (Note 1). The Proposed Merger and related transactions for companies worldwide and, aswere approved by the stockholders of September 30, 2017, manageCPA:18 – Global at a global investment portfolio of 1,381 properties, including 890 net-leased properties and two operating properties within our owned real estate portfolio. Our business operates in two segments: Owned Real Estate and Investment Management.

On June 15, 2017, our Board approved a plan to exit all non-traded retail fundraising activities carried out by our wholly-owned broker-dealer subsidiary, Carey Financial, effective as of June 30, 2017.special meeting on July 26, 2022. We currently expect the transaction to continue to manage all existing Managed Programs through the end of their respective natural life cycles (Noteclose on August 1,). 2022.


Financial Highlights
 
During the ninesix months ended SeptemberJune 30, 2017,2022, we completed the following activities, as(as further described below and in the consolidated financial statements:statements):


•
We capitalized and completed four construction projects at a cost totaling $59.0 million and acquired one investment for $6.0 million for our Owned Real Estate segment
Real Estate

Investments

•We acquired 11 investments totaling $644.0 million (Note 4, Note 5).
•We completed three construction projects at a cost totaling $98.2 million (Note 4).
•We funded approximately $37.3 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the nine months ended September 30, 2017 (Note 4).
•
As part of our active capital recycling program, we disposed of 13 properties and a parcel of vacant land from our Owned Real Estate portfolio for total proceeds of $130.6 million, net of selling costs (Note 15).
•
On January 19, 2017, we completed a public offering of €500.0 million of 2.25% Senior Notes, at a price of 99.448% of par value, issued by our wholly owned subsidiary, WPC Eurobond B.V., which are guaranteed by us. These 2.25% Senior Notes have a 7.5-year term and are scheduled to mature on July 19, 2024 (Note 10).
•
On February 22, 2017, we amended and restated our Senior Unsecured Credit Facility to increase its capacity to $1.85 billion, which is comprised of a $1.5 billion Unsecured Revolving Credit Facility maturing in four years with two six-month extension options, a €236.3 million Amended Term Loan maturing in five years, and a $100.0 million Delayed Draw Term Loan also maturing in five years. On that date, we also drew down our Amended Term Loan in full by borrowing €236.3 million (equivalent to $250.0 million) and repaid in full, and terminated, our $250.0 million Prior Term Loan. On June 8, 2017, we drew down our Delayed Draw Term Loan in full by borrowing €88.7 million (equivalent to $100.0 million) (Note 10).
•
We reduced our mortgage debt outstanding by repaying at maturity or prepaying $417.9 million of non-recourse mortgage loans with a weighted-average interest rate of 5.4% during the nine months ended September 30, 2017 (Note 10).
•
In connection with our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017, we recorded $1.4 million and $9.1 million of restructuring expenses during the three and nine months ended September 30, 2017, respectively, primarily related to severance costs (Note 1, Note 12).
During the three and ninesix months ended SeptemberJune 30, 2017,2022. Through June 30, 2022, we have funded $141.0 million (Note 7).
•We committed to fund two build-to-suit or expansion projects totaling $24.9 million. We currently expect to complete the projects in 2022 and 2023 (Note 4).

Dispositions

•As part of our active capital recycling program, we disposed of 14 properties for total proceeds, net of selling costs, of $115.1 million (Note 14).
•In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (Note 8).

Financing and Capital Markets Transactions

•On May 2, 2022, we established a $1.0 billion ATM Program, under which we may issue shares directly or defer delivery to a later date through our ATM Forwards. As of June 30, 2022, we had approximately $301.0 million of available proceeds under our ATM Forwards (Note 12).
•We issued 15,500 and 345,2532,740,295 shares respectively, of our common stock under the currentour prior ATM programProgram at a weighted-average price of $67.05 and $67.78$80.79 per share, respectively, for net proceeds of $0.9$218.1 million (Note 12).
•In April 2022, we increased the Term Loan to £270.0 million and $22.8the Delayed Draw Term Loan to €215.0 million, respectively.thereby increasing the total capacity of our Senior Unsecured Credit Facility to approximately $2.4 billion. We used the approximately $300 million of proceeds from this increase in the capacity of our Unsecured Term Loans to partially repay amounts outstanding under our Unsecured Revolving Credit Facility (Note 10).
•
We structured new investments on behalf of the Managed Programs totaling $1.1 billion during the nine months ended September 30, 2017, increasing our assets under management to $13.2 billion as of September 30, 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. CCIF was included in the Managed Programs prior to our resignation as its advisor (Note 1).

W. P. Carey 6/30/2022 10-Q– 41


Investment Management

Assets Under Management

•As of June 30, 2022, we managed total assets of approximately $2.5 billion on behalf of CPA:18 – Global and CESH. The vast majority of our Investment Management earnings are generated from asset management fees and our ownership interests in CPA:18 – Global and CESH. However, subject to the terms and conditions of the Merger Agreement, upon consummation of the Proposed Merger, we will no longer receive fees and distributions from CPA:18 – Global, and as a result, Investment Management earnings are expected to decline in future periods (Note 1).

Dividends to Stockholders

We declared cash distributionsdividends totaling $3.00$2.116 per share induring the aggregate amount of $320.3 million for the ninesix months ended SeptemberJune 30, 2017,2022, comprised of threetwo quarterly dividends per share declared of $0.9950, $1.0000,$1.057 and $1.0050.$1.059 (Note 12).



W. P. Carey 9/30/2017 10-Q– 50



Consolidated Results


(in thousands, except shares)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues from Owned Real Estate$176,584
 $180,071
 $519,373
 $583,894
Reimbursable tenant costs5,397
 6,537
 15,940
 19,237
Revenues from Owned Real Estate (excluding reimbursable tenant costs)171,187
 173,534
 503,433
 564,657
        
Revenues from Investment Management34,170
 45,176
 131,968
 128,859
Reimbursable costs from affiliates6,211
 14,540
 45,390
 46,372
Revenues from Investment Management (excluding reimbursable costs from affiliates)27,959
 30,636
 86,578
 82,487
        
Total revenues210,754
 225,247
 651,341
 712,753
Total reimbursable costs11,608
 21,077
 61,330
 65,609
Total revenues (excluding reimbursable costs)199,146
 204,170
 590,011
 647,144
        
Net income from Owned Real Estate attributable to W. P. Carey (a)
56,492
 87,497
 137,990
 174,736
Net income from Investment Management attributable to W. P. Carey (a)
23,786
 23,446
 64,090
 45,307
Net income attributable to W. P. Carey80,278

110,943

202,080

220,043
        
Cash distributions paid108,272
 104,587
 322,389
 310,509
        
Net cash provided by operating activities    381,877
 377,476
Net cash provided by (used in) investing activities    175,305
 (27,984)
Net cash used in financing activities    (549,728) (298,096)
        
Supplemental financial measures:       
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Owned Real Estate (a) (b)
116,337
 118,030
 345,529
 352,058
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management (a) (b)
31,905
 26,441
 85,388
 64,115
Adjusted funds from operations attributable to W. P. Carey (AFFO) (b)
148,242

144,471

430,917

416,173
        
Diluted weighted-average shares outstanding108,143,694
 107,468,029
 107,947,490
 106,853,174
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenues from Real Estate$339,787 $314,790 $683,878 $620,961 
Revenues from Investment Management4,610 4,934 8,957 9,929 
Total revenues344,397 319,724 692,835 630,890 
Net income from Real Estate attributable to W. P. Carey123,228 114,687 270,086 159,274 
Net income from Investment Management attributable to W. P. Carey4,450 5,558 14,587 12,605 
Net income attributable to W. P. Carey127,678 120,245 284,673 171,879 
Dividends declared205,898 194,914 411,395 382,395 
Net cash provided by operating activities446,883 398,747 
Net cash used in investing activities(560,525)(885,881)
Net cash provided by financing activities106,531 398,948 
Supplemental financial measures (a):
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate247,246 222,377 499,260 432,705 
Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management7,128 6,299 13,940 12,457 
Adjusted funds from operations attributable to W. P. Carey (AFFO)254,374 228,676 513,200 445,162 
Diluted weighted-average shares outstanding194,763,695 180,668,732 193,706,035 178,902,259 
__________
(a)
As a result of our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017, we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include equity in earnings of equity method investments in the Managed Programs in our Investment Management segment (Note 1). Earnings from our investment in CCIF continue to be included in our Investment Management segment. Results of operations for prior periods have been reclassified to conform to the current period presentation.
(b)
We consider Adjusted funds from operations, or 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.

(a)We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by GAAP (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 6/30/2022 10-Q– 42

W. P. Carey 9/30/2017 10-Q– 51



Revenues
Consolidated Results

Total revenues increased for the three and six months ended June 30, 2022 as compared to the same periods in 2021. Real Estate revenue increased primarily due to higher lease revenues (substantially as a result of property acquisition activity and rent escalations, partially offset by the impact of the weakening euro and British pound sterling, as well as property dispositions) and higher lease termination and other income for the six months ended June 30, 2022 as compared to the same period in 2021 (Note 4).
Revenues and
Net Income Attributable to W. P. Carey


Total revenues decreasedNet income attributable to W. P. Carey increased for the three months ended SeptemberJune 30, 20172022 as compared to the same period in 2016, due to decreases within both our Investment Management and Owned2021. Net income from Real Estate segments. Investment Management revenue decreased primarily as a result of a decrease in structuring revenue and a decrease in dealer manager fees dueattributable to our exit from all non-traded retail fundraising activities (Note 1), partially offset by an increase in asset management revenue as a result of growth in assets under management for the Managed Programs. Owned Real Estate revenue declinedW. P. Carey increased primarily due to a decreasenon-cash unrealized gain recognized on our investment in lease revenues duecommon shares of WLT (Note 8), a higher aggregate gain on sale of real estate (Note 14), and the impact of real estate acquisitions, partially offset by the impact of the weakening euro and British pound sterling, and impairment charges recognized during the current year period.

Net income attributable to dispositions of properties since July 1, 2016 (Note 15).

Total revenues decreasedW. P. Carey increased for the ninesix months ended SeptemberJune 30, 20172022 as compared to the same period in 2016, due to decreases within our Owned2021. Net income from Real Estate segment, partially offset by increases within our Investment Management segment. Owned Real Estate revenue declined primarily due to lease termination income recognized during the prior year period related to a domestic property sold in February 2016, as well as a decrease in lease revenues due to dispositions of properties since January 1, 2016 (Note 15), partially offset by an increase in lease revenues due to property acquisitions since January 1, 2016. Investment Management revenue increased primarily due to an increase in asset management revenue as a result of growth in assets under management for the Managed Programs, partially offset by a decrease in structuring revenue and a decrease in dealer manager fees due to our exit from all non-traded retail fundraising activities (Note 1).

Net income attributable to W. P. Carey decreased for the three months ended September 30, 2017 as compared to the same period in 2016,increased primarily due to a lower loss on extinguishment of debt (Note 10), non-cash unrealized gains recognized on our investment in common shares of WLT (Note 8), the lowerimpact of real estate acquisitions, and a higher aggregate gain on sale of real estate, recognized during the current year period (Note 15), as well as decreases in Owned Real Estate and Investment Management revenues. The decrease in Net income attributable to W. P. Carey was partially offset by lower interest expensethe impact of the weakening euro and British pound sterling, higher impairment charges (Note 8), and a non-cash unrealized gain recognized on our investment in shares of Lineage Logistics during the currentprior year period (Note 8).

AFFO

AFFO increased for the three and six months ended June 30, 2022 as compared to the same periodperiods in 2016. In addition, during2021, primarily due to higher lease revenues from net investment activity and rent escalations, partially offset by the prior year period, we recognized impairment charges on certain international properties (Note 8),impact of the weakening euro and British pound sterling, as well as a related offsetting deferred tax benefit on those impairment charges, which reduced Net income attributable to the cessation of cash dividends from our investment in preferred shares of WLT following the redemption of that investment in January 2022 (Note 8).

W. P. Carey for the period.6/30/2022 10-Q– 43


Net income attributable to W. P. Carey decreased for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to the lower aggregate gain on sale of real estate recognized during the current year period (Note 15), as well as a decrease in Owned Real Estate revenues. During the current year period, we also recognized non-recurring restructuring expenses, primarily comprised of severance costs, related to our exit from all non-traded retail fundraising activities (Note 12). The decrease in Net income attributable to W. P. Carey was partially offset by lower interest expense and general and administrative expenses during the current year period as compared to the same period in 2016. In addition, during the prior year period, we recognized impairment charges on certain international properties (Note 8), as well as a related offsetting deferred tax benefit on those impairment charges, which reduced Net income attributable to W. P. Carey for the period. During the prior year period, we recognized one-time restructuring and other compensation expenses, consisting primarily of severance costs, related to the RIF (Note 12), as well as an allowance for credit losses on a direct financing lease (Note 5).

Net Cash Provided by Operating Activities

Net cash provided by operating activities increased for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to an increase in cash flow generated from properties acquired during 2016 and 2017, a decrease in interest expense, and lower general and administrative expenses in the current year period. These increases were partially offset by lease termination income received in connection with the sale of a property during the prior year period and a decrease in cash flow as a result of property dispositions during 2016 and 2017.

AFFO

AFFO increased for the three months ended September 30, 2017 as compared to the same period in 2016, primarily due to lower interest expense, higher asset management revenue, and higher earnings from our equity interests in the Managed Programs, partially offset by lower structuring revenues, higher general and administrative expenses, and lower lease revenues.

AFFO increased for the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to lower interest expense, higher asset management revenue, lower general and administrative expenses, and higher earnings from our equity interests in the Managed Programs, partially offset by lower lease revenues, lease termination income received in connection with the sale of a property during the prior year period, and lower structuring revenues.


W. P. Carey 9/30/2017 10-Q– 52



Owned Real Estate

Investments

During the nine months ended September 30, 2017, we capitalized and completed construction projects at a cost totaling $59.0 million (Note 4), as follows:

an expansion project at an industrial facility in Windsor, Connecticut in March 2017 at a cost totaling $3.3 million;
an expansion project at an educational facility in Coconut Creek, Florida in May 2017 at a cost totaling $18.2 million;
an expansion project at an industrial facility in Monarto, Australia in May 2017 at a cost totaling $15.9 million; and
a build-to-suit project for an industrial facility in McCalla, Alabama in June 2017 at a cost totaling $21.6 million.

In addition, during the nine months ended September 30, 2017, we acquired an industrial facility in Chicago, Illinois for $6.0 million and committed to fund an additional $3.6 million of building improvements at that facility by June 2018.

Dispositions

During the nine months ended September 30, 2017, we sold 11 properties and a parcel of vacant land from our Owned Real Estate portfolio for total proceeds of $102.5 million, net of selling costs, and recorded a net gain on sale of real estate of $22.7 million. We also disposed of two properties with an aggregate carrying value of $31.3 million by transferring ownership to the mortgage lender, in satisfaction of non-recourse mortgage loans encumbering the properties totaling $28.1 million (net of $3.8 million of cash held in escrow that was retained by the mortgage lender), resulting in a net gain of less than $0.1 million (Note 15).

Financing Transactions

During the nine months ended September 30, 2017, we entered into the following financing transactions (Note 10):

On January 19, 2017, we completed a public offering of €500.0 million of 2.25% Senior Notes, at a price of 99.448% of par value, issued by our wholly owned subsidiary, WPC Eurobond B.V., which are guaranteed by us. These 2.25% Senior Notes have a 7.5-year term and are scheduled to mature on July 19, 2024.
On February 22, 2017, we amended and restated our Senior Unsecured Credit Facility to increase its capacity to $1.85 billion, which is comprised of a $1.5 billion Unsecured Revolving Credit Facility maturing in four years with two six-month extension options, a €236.3 million Amended Term Loan maturing in five years, and a $100.0 million Delayed Draw Term Loan also maturing in five years. On that date, we also drew down our Amended Term Loan in full by borrowing €236.3 million (equivalent to $250.0 million) and repaid in full, and terminated, our $250.0 million Prior Term Loan. On June 8, 2017, we drew down our Delayed Draw Term Loan in full by borrowing €88.7 million (equivalent to $100.0 million). We incur interest at LIBOR, or a LIBOR equivalent, plus 1.00% on the Unsecured Revolving Credit Facility, and at EURIBOR plus 1.10% on both the Amended Term Loan and Delayed Draw Term Loan.
•
In January 2017, we repaid two international non-recourse mortgage loans at maturity with an aggregate principal balance of approximately $243.8 million encumbering the Hellweg 2 Portfolio, which is jointly owned with our affiliate, CPA®:17 – Global. In connection with this repayment, CPA®:17 – Global contributed $90.3 million, which was accounted for as a contribution from a noncontrolling interest. Amounts are based on the exchange rate of the euro as of the date of repayment. The weighted-average interest rate for these mortgage loans on the date of repayment was 5.4%.
•
During the nine months ended September 30, 2017, we prepaid non-recourse mortgage loans totaling $157.4 million, including $38.4 million encumbering properties that were disposed of during the nine months ended September 30, 2017 (Note 15). Amounts are based on the exchange rate of the related foreign currency as of the date of repayment, as applicable. The weighted-average interest rate for these mortgage loans on their respective dates of prepayment was 5.5%. In connection with these payments, we recognized a gain on extinguishment of debt of $0.8 million during the nine months ended September 30, 2017, which was included in Other income and (expenses) in the consolidated financial statements.



W. P. Carey 9/30/2017 10-Q– 53


Composition

As of September 30, 2017, our Owned Real Estate portfolio consisted of 890 net-lease properties, comprising 85.9 million square feet leased to 211 tenants, and two hotels, which are classified as operating properties. As of that date, the weighted-average lease term of the net-lease portfolio was 9.5 years and the occupancy rate was 99.8%.

Investment Management

During the nine months ended September 30, 2017, we managed CPA®:17 – Global, CPA®:18 – Global, CWI 1, CWI 2, and CESH I. As of September 30, 2017, these Managed Programs had total assets under management of approximately $13.2 billion. In August 2017, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective as of September 11, 2017. CCIF was included in the Managed Programs prior to our resignation as its advisor (Note 1).

Non-Traded Retail Fundraising Platform Closure

On June 15, 2017, our Board approved a plan to exit all non-traded retail fundraising activities carried out by our wholly-owned broker-dealer subsidiary, Carey Financial, as of June 30, 2017, in keeping with our long-term strategy of focusing exclusively on net lease investing for our balance sheet. We currently expect to continue to manage all existing Managed Programs through the end of their respective natural life cycles (Note 1).

Investment Transactions

During the nine months ended September 30, 2017, we structured new investments totaling $1.1 billion on behalf of the Managed Programs, from which we earned $27.4 million in structuring revenue.

CWI 2: We structured two investments in domestic hotels for $423.5 million, including acquisition-related costs. One of these investments is jointly-owned with CWI 1.
CESH I: We structured investments in six international student housing development projects and one build-to-suit expansion on an existing project for an aggregate of $287.7 million, including acquisition-related costs.
CWI 1: We structured one investment in a domestic hotel for $165.2 million, including acquisition-related costs. This investment is jointly-owned with CWI 2.
•
CPA®:17 – Global: We structured investments in two properties and one build-to-suit expansion on an existing property for an aggregate of $158.5 million, including acquisition-related costs. Approximately $147.0 million was invested in Europe and $11.5 million was invested in the United States.
•
CPA®:18 – Global: We structured investments in two properties and three build-to-suit expansions on existing properties, including increases in funding commitments, for an aggregate of $66.2 million, including of acquisition-related costs. Approximately $58.9 million was invested internationally and $7.3 million was invested in the United States.

Financing Transactions

During the nine months ended September 30, 2017, we arranged mortgage financing totaling $439.9 million for CWI 2, $293.1 million for CPA®:17 – Global, $175.5 million for CWI 1, and $89.4 million for CPA®:18 – Global, from which we earned $0.6 million in structuring revenue.



W. P. Carey 9/30/2017 10-Q– 54


Investor Capital Inflows

In connection with our Board’s decision to exit from non-traded retail fundraising activities, we ceased active fundraising for the Managed Programs on June 30, 2017 (Note 1). The offerings for CWI 2 and CESH I closed on July 31, 2017. In August 2017, we resigned as the advisor to CCIF, effective as of September 11, 2017. The investor capital inflows for the funds managed by us during the nine months ended September 30, 2017 were as follows:

CWI 2 commenced its initial public offering in the first quarter of 2015. Through the closing of its offering on July 31, 2017, CWI 2 had raised approximately $851.3 million through its offering, of which $235.0 million was raised during the nine months ended September 30, 2017. We earned $2.9 million in Dealer manager fees during the nine months ended September 30, 2017 related to this offering.
CESH I commenced its private placement in July 2016. Through the closing of its offering on July 31, 2017, CESH I had raised approximately $139.7 million through its offering, of which $26.9 million was raised during the nine months ended September 30, 2017. We earned $0.5 million in Dealer manager fees during the nine months ended September 30, 2017 related to this offering.
•
Two CCIF Feeder Funds commenced their respective initial public offerings in the third quarter of 2015 and invested the proceeds that they raised in the master fund, CCIF. Through June 30, 2017, these funds had invested $195.3 million in CCIF, of which $70.2 million was invested during the nine months ended September 30, 2017. We earned $1.0 million in Dealer manager fees during the nine months ended September 30, 2017 related to these offerings. 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. CCIF was included in the Managed Programs prior to our resignation as its advisor (Note 1).

Significant Developments

Board of Directors Change

On October 3, 2017, we announced that Margaret G. Lewis, age 63, was appointed to our Board.

Management Change

On November 1, 2017, our Board appointed Mr. Jason E. Fox, our President, to succeed Mr. Mark J. DeCesaris as our Chief Executive Officer and as a Director, both effective as of January 1, 2018. Mr. DeCesaris intends to retire from his positions as Chief Executive Officer and a Director, effective as of December 31, 2017.

Upon commencement of his new duties on January 1, 2018, Mr. Fox will be stepping down as our President. Mr. John J. Park, our Director of Strategy and Capital Markets, will succeed Mr. Fox as President on that date.

Mr. Fox, age 44, has served as W. P. Carey’s President since 2015 and previously served in various capacities in the Investment Department, including as Head of Global Investments, since joining W. P. Carey in 2002. Mr. Park, age 53, has served as W. P. Carey’s Director of Strategy and Capital Markets since March 2016, after serving in various capacities since joining W. P. Carey as an investment analyst in 1987.



W. P. Carey 9/30/2017 10-Q– 55


Portfolio Overview


We intend to continue to acquire a diversifiedOur portfolio is comprised of income-producingoperationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern and Western Europe. We invest in high-quality single tenant industrial, warehouse, office, retail, and self-storage properties and other real estate-related assets. We expectsubject to make these investments both domestically and internationally.long-term net leases with built-in rent escalators. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.


Portfolio Summary
June 30, 2022December 31, 2021
ABR (in thousands)$1,270,226 $1,247,764 
Number of net-leased properties1,357 1,304 
Number of operating properties (a)
20 20 
Number of tenants (net-leased properties)356 352 
Total square footage (net-leased properties, in thousands)161,294 155,674 
Occupancy (net-leased properties)99.1 %98.5 %
Weighted-average lease term (net-leased properties, in years)11.0 10.8 
Number of countries (b)
25 24 
Total assets (in thousands)$15,454,229 $15,480,630 
Net investments in real estate (in thousands)12,976,489 13,037,369 
 September 30, 2017 December 31, 2016
Number of net-leased properties890
 903
Number of operating properties (a)
2
 2
Number of tenants (net-leased properties)211
 217
Total square footage (net-leased properties, in thousands)85,883
 87,866
Occupancy (net-leased properties)99.8% 99.1%
Weighted-average lease term (net-leased properties, in years)9.5
 9.7
Number of countries18
 19
Total assets (consolidated basis, in thousands)$8,334,411
 $8,453,954
Net investments in real estate (consolidated basis, in thousands) (b)
6,751,905
 6,781,900

 Nine Months Ended September 30,
 2017 2016
Financing obtained — consolidated (in millions) (c)
$633.4
 $384.6
Financing obtained — pro rata (in millions) (c)
633.4
 367.6
Acquisition volume (in millions) (d) (e)
6.0
 385.8
Construction and expansion projects capitalized and completed (in millions) (d) (f)
59.0
 —
Average U.S. dollar/euro exchange rate1.1130
 1.1161
Average U.S. dollar/British pound sterling exchange rate1.2751
 1.3939
Change in the U.S. CPI (g)
2.2 % 2.1 %
Change in the Germany CPI (g)
0.7 % 0.7 %
Change in the United Kingdom CPI (g)
2.1 % 0.8 %
Change in the Spain CPI (g)
(0.3)% (0.5)%
Six Months Ended June 30,
20222021
Acquisition volume (in millions) (c)
$681.3 $922.0 
Construction projects completed (in millions)98.2 62.4 
Average U.S. dollar/euro exchange rate1.0941 1.2046 
Average U.S. dollar/British pound sterling exchange rate1.2999 1.3874 
 
__________
(a)At both September 30, 2017 and December 31, 2016, operating properties consisted of two hotel properties with an average occupancy of 85.1% for the nine months ended September 30, 2017.
(b)
In 2017, we reclassified certain line items in our consolidated balance sheets. As a result, Net investments in real estate as of December 31, 2016 has been revised to conform to the current period presentation (Note 2).
(c)
Both the consolidated and pro rata amounts for the nine months ended September 30, 2017 include the issuance of €500.0 million of 2.25% Senior Notes 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). Both the consolidated and pro rata amounts for the nine months ended September 30, 2016 include the issuance of $350.0 million of 4.25% Senior Notes in September 2016. The consolidated amount for the nine months ended September 30, 2016 includes the refinancing of a non-recourse mortgage loan for $34.6 million, while the pro rata amount for the nine months ended September 30, 2016 includes our proportionate share of that refinancing of $17.6 million. Dollar amounts are based on the exchange rate of the euro on the dates of activity, as applicable.
(d)Amounts are the same on both a consolidated and pro rata basis.
(e)
Amount for the nine months ended September 30, 2017 excludes a commitment for $3.6 million of building improvements in connection with an acquisition (Note 4). Amount for the nine months ended September 30, 2016 excludes an aggregate commitment for $128.1 million of build-to-suit financing.
(f)Includes projects that were capitalized and partially completed in 2016.

(a)At both June 30, 2022 and December 31, 2021, operating properties consisted of 19 self-storage properties (of which we consolidated ten, with an average occupancy of 95.3% as of June 30, 2022) and one hotel property with an average occupancy of 59.2% for the six months ended June 30, 2022.
(b)We acquired investments in Belgium during the six months ended June 30, 2022.
(c)Amounts for the six months ended June 30, 2022 and 2021 include $37.3 million and $84.9 million, respectively, of funding for a construction loan (Note 7).


W. P. Carey 6/30/2022 10-Q– 44

W. P. Carey 9/30/2017 10-Q– 56



(g)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.

Net-Leased Portfolio


The tables below represent information about our net-leased portfolio at SeptemberJune 30, 20172022 on a pro rata basis and, accordingly, exclude all operating properties. See Terms and Definitions below for a description of pro rata amounts and ABR.


Top Ten Tenants by ABR
(dollars in thousands)
Tenant/Lease Guarantor Property Type Tenant Industry Location Number of Properties ABR ABR Percent Weighted-Average Remaining Lease Term (Years)Tenant/Lease GuarantorDescriptionNumber of PropertiesABRABR PercentWeighted-Average Lease Term (Years)
U-Haul Moving Partners Inc. and Mercury Partners, LPU-Haul Moving Partners Inc. and Mercury Partners, LPNet lease self-storage properties in the U.S.78 $38,751 3.0 %1.8 
State of Andalucía (a)
State of Andalucía (a)
Government office properties in Spain70 28,506 2.2 %12.5 
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)
 Retail Retail Stores Germany 53
 $36,265
 5.3% 12.4
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)
Do-it-yourself retail properties in Germany35 26,537 2.1 %14.7 
U-Haul Moving Partners Inc. and Mercury Partners, LP Self Storage Cargo Transportation, Consumer Services United States 78
 31,853
 4.7% 6.6
State of Andalucia (a)
 Office Sovereign and Public Finance Spain 70
 28,708
 4.2% 17.2
Metro Cash & Carry Italia S.p.A. (a)
Metro Cash & Carry Italia S.p.A. (a)
Business-to-business wholesale stores in Italy and Germany20 26,492 2.1 %6.3 
Extra Space Storage, Inc.Extra Space Storage, Inc.Net lease self-storage properties in the U.S.27 22,957 1.8 %21.8 
OBI Group (a)
OBI Group (a)
Do-it-yourself retail properties in Poland26 21,515 1.7 %8.1 
Marriott CorporationMarriott CorporationNet lease hotel properties in the U.S.18 21,350 1.7 %1.6 
Nord Anglia Education, Inc.Nord Anglia Education, Inc.K-12 private schools in the U.S.3 20,981 1.7 %21.2 
Pendragon PLC (a)
 Retail Retail Stores, Consumer Services United Kingdom 70
 21,488
 3.2% 12.6
Pendragon PLC (a)
Automotive dealerships in the United Kingdom63 20,214 1.6 %12.9 
Marriott Corporation Hotel Hotel, Gaming and Leisure United States 18
 20,065
 3.0% 6.1
Forterra Building Products (a) (b)
 Industrial Construction and Building United States and Canada 49
 17,517
 2.6% 18.5
OBI Group (a)
 Office, Retail Retail Stores Poland 18
 16,295
 2.4% 6.7
True Value Company Warehouse Retail Stores United States 7
 15,680
 2.3% 5.3
UTI Holdings, Inc. Education Facility Consumer Services United States 5
 14,484
 2.1% 4.5
ABC Group Inc. (c)
 Industrial, Office, Warehouse Automotive Canada, Mexico, and United States 14
 13,771
 2.0% 19.2
Advance Auto Parts, Inc.Advance Auto Parts, Inc.Distribution facilities in the U.S.29 19,851 1.6 %10.6 
Total 382
 $216,126
 31.8% 11.1
Total369 $247,154 19.5 %10.5 
__________
(a)ABR amounts are subject to fluctuations in foreign currency exchange rates.
(b)Of the 49 properties leased to Forterra Building Products, 44 are located in the United States and five are located in Canada.
(c)Of the 14 properties leased to ABC Group Inc., six are located in Canada, four are located in Mexico, and four are located in the United States, subject to three master leases all denominated in U.S. dollars.

(a)ABR amounts are subject to fluctuations in foreign currency exchange rates.



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W. P. Carey 9/30/2017 10-Q– 57



Portfolio Diversification by Geography
(in thousands, except percentages)
RegionABRABR Percent
Square Footage (a)
Square Footage Percent
United States
South
Texas$105,724 8.3 %11,983 7.4 %
Florida53,372 4.2 %4,456 2.7 %
Tennessee25,193 2.0 %4,136 2.6 %
Georgia24,804 2.0 %3,512 2.2 %
Alabama19,386 1.5 %3,334 2.1 %
Other (b)
15,469 1.2 %2,237 1.4 %
Total South243,948 19.2 %29,658 18.4 %
Midwest
Illinois62,824 4.9 %8,734 5.4 %
Minnesota32,584 2.6 %3,225 2.0 %
Indiana26,882 2.1 %4,734 2.9 %
Ohio21,055 1.7 %4,503 2.8 %
Wisconsin15,962 1.3 %2,726 1.7 %
Michigan15,410 1.2 %2,496 1.6 %
Other (b)
35,706 2.8 %5,634 3.5 %
Total Midwest210,423 16.6 %32,052 19.9 %
East
North Carolina36,505 2.9 %8,098 5.0 %
Pennsylvania31,890 2.5 %3,673 2.3 %
New Jersey23,178 1.8 %1,235 0.8 %
Massachusetts22,159 1.7 %1,387 0.8 %
New York18,881 1.5 %2,221 1.4 %
Kentucky17,796 1.4 %3,063 1.9 %
South Carolina14,982 1.2 %4,088 2.5 %
Other (b)
37,234 2.9 %5,300 3.3 %
Total East202,625 15.9 %29,065 18.0 %
West
California70,710 5.5 %6,420 4.0 %
Arizona30,099 2.4 %3,365 2.1 %
Other (b)
63,158 5.0 %6,720 4.1 %
Total West163,967 12.9 %16,505 10.2 %
United States Total820,963 64.6 %107,280 66.5 %
International
Spain60,420 4.8 %5,078 3.2 %
Germany57,205 4.5 %6,440 4.0 %
Poland55,570 4.4 %7,959 4.9 %
United Kingdom52,424 4.1 %4,804 3.0 %
The Netherlands52,200 4.1 %6,990 4.3 %
Italy24,912 2.0 %2,386 1.5 %
Denmark20,475 1.6 %2,844 1.8 %
France19,013 1.5 %1,685 1.0 %
Croatia15,988 1.3 %1,726 1.1 %
Canada15,644 1.2 %2,448 1.5 %
Other (c)
75,412 5.9 %11,654 7.2 %
International Total449,263 35.4 %54,014 33.5 %
Total$1,270,226 100.0 %161,294 100.0 %
Region ABR Percent 
Square Footage (a)
 Percent
United States        
South        
Texas $56,669
 8.4% 8,192
 9.5%
Florida 29,407
 4.3% 2,657
 3.1%
Georgia 20,863
 3.1% 3,293
 3.8%
Tennessee 15,589
 2.3% 2,306
 2.7%
Other (b)
 11,722
 1.7% 2,280
 2.7%
Total South 134,250
 19.8% 18,728
 21.8%
         
East        
North Carolina 19,867
 2.9% 4,518
 5.3%
New Jersey 18,768
 2.8% 1,097
 1.3%
New York 18,244
 2.7% 1,178
 1.4%
Pennsylvania 16,870
 2.5% 2,525
 2.9%
Massachusetts 15,402
 2.3% 1,390
 1.6%
Virginia 7,616
 1.1% 1,025
 1.2%
Connecticut 6,940
 1.0% 1,135
 1.3%
Other (b)
 17,967
 2.6% 3,781
 4.4%
Total East 121,674
 17.9% 16,649
 19.4%
         
West        
California 42,578
 6.3% 3,303
 3.9%
Arizona 26,776
 3.9% 3,049
 3.5%
Colorado 9,834
 1.5% 864
 1.0%
Other (b)
 26,621
 3.9% 3,241
 3.8%
Total West 105,809
 15.6% 10,457
 12.2%
         
Midwest        
Illinois 21,689
 3.2% 3,295
 3.9%
Michigan 12,171
 1.8% 1,396
 1.6%
Indiana 9,329
 1.4% 1,418
 1.7%
Ohio 8,547
 1.3% 1,911
 2.2%
Minnesota 6,932
 1.0% 811
 0.9%
Other (b)
 24,064
 3.5% 4,385
 5.1%
Total Midwest 82,732
 12.2% 13,216
 15.4%
United States Total 444,465
 65.5% 59,050
 68.8%
         
International        
Germany 60,506
 8.9% 6,272
 7.3%
United Kingdom 33,570
 4.9% 2,324
 2.7%
Spain 30,438
 4.5% 2,927
 3.4%
Poland 18,321
 2.7% 2,189
 2.5%
The Netherlands 15,341
 2.3% 2,233
 2.6%
France 14,542
 2.1% 1,266
 1.5%
Finland 13,030
 1.9% 1,121
 1.3%
Canada 12,638
 1.9% 2,196
 2.6%
Australia 12,507
 1.8% 3,272
 3.8%
Other (c)
 23,504
 3.5% 3,033
 3.5%
International Total 234,397
 34.5% 26,833
 31.2%
         
Total $678,862
 100.0% 85,883
 100.0%



W. P. Carey 6/30/2022 10-Q– 46

W. P. Carey 9/30/2017 10-Q– 58



Portfolio Diversification by Property Type
(in thousands, except percentages)
Property Type ABR Percent 
Square Footage (a)
 Percent
Industrial $203,127
 29.9% 38,564
 44.9%
Office 166,880
 24.6% 10,998
 12.8%
Retail 111,249
 16.3% 9,780
 11.4%
Warehouse 97,115
 14.4% 18,661
 21.7%
Self Storage 31,853
 4.7% 3,535
 4.1%
Other (d)
 68,638
 10.1% 4,345
 5.1%
Total $678,862
 100.0% 85,883
 100.0%
__________
(a)Includes square footage for any vacant properties.
(b)Other properties within South include assets in Alabama, Louisiana, Arkansas, Mississippi, and Oklahoma. Other properties within East include assets in Kentucky, South Carolina, Maryland, New Hampshire, and West Virginia. Other properties within West include assets in Utah, Washington, Nevada, Oregon, New Mexico, Wyoming, Alaska, and Montana. Other properties within Midwest include assets in Missouri, Kansas, Wisconsin, Nebraska, Iowa, South Dakota, and North Dakota.
(c)Includes assets in Norway, Hungary, Austria, Thailand, Mexico, Sweden, Belgium, and Japan.
(d)Includes ABR from tenants within the following property types: education facility, hotel, theater, fitness facility, and net-lease student housing.

Property TypeABRABR Percent
Square Footage (a)
Square Footage Percent
Industrial$339,070 26.7 %56,461 35.0 %
Warehouse306,675 24.1 %57,856 35.9 %
Office237,154 18.7 %16,013 9.9 %
Retail (d)
212,899 16.8 %19,384 12.0 %
Self Storage (net lease)61,708 4.9 %5,810 3.6 %
Other (e)
112,720 8.8 %5,770 3.6 %
Total$1,270,226 100.0 %161,294 100.0 %

__________
(a)Includes square footage for any vacant properties.
(b)Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi. Other properties within Midwest include assets in Missouri, Kansas, Iowa, Nebraska, North Dakota, and South Dakota. Other properties within East include assets in Virginia, Maryland, Connecticut, West Virginia, New Hampshire, and Maine. Other properties within West include assets in Oregon, Utah, Colorado, Washington, Nevada, Hawaii, New Mexico, Idaho, Wyoming, and Montana.
(c)Includes assets in Lithuania, Mexico, Finland, Norway, Belgium, Hungary, Portugal, the Czech Republic, Austria, Sweden, Slovakia, Japan, Latvia, and Estonia.
(d)Includes automotive dealerships.
(e)Includes ABR from tenants within the following property types: education facility, hotel (net lease), laboratory, theater, fitness facility, student housing (net lease), funeral home, restaurant, and land.


W. P. Carey 6/30/2022 10-Q– 47

W. P. Carey 9/30/2017 10-Q– 59



Portfolio Diversification by Tenant Industry
(in thousands, except percentages)
Industry Type ABR Percent Square Footage PercentIndustry TypeABRABR PercentSquare FootageSquare Footage Percent
Retail Stores (a)
 $119,208
 17.6% 14,916
 17.4%
Retail Stores (a)
$265,377 20.9 %34,369 21.3 %
Consumer Services 71,119
 10.5% 5,604
 6.5%Consumer Services110,204 8.7 %8,067 5.0 %
Beverage and FoodBeverage and Food86,945 6.8 %12,263 7.6 %
Automotive 55,550
 8.2% 9,044
 10.5%Automotive79,095 6.2 %12,310 7.6 %
Sovereign and Public Finance 42,798
 6.3% 3,411
 4.0%
Construction and Building 36,926
 5.5% 8,142
 9.5%
Hotel, Gaming, and Leisure 35,352
 5.2% 2,254
 2.6%
Beverage, Food, and Tobacco 31,222
 4.6% 6,876
 8.0%
GroceryGrocery69,117 5.4 %7,756 4.8 %
Cargo Transportation 28,823
 4.2% 3,860
 4.5%Cargo Transportation61,358 4.8 %9,485 5.9 %
Healthcare and Pharmaceuticals 28,203
 4.2% 1,988
 2.3%Healthcare and Pharmaceuticals60,276 4.7 %5,372 3.3 %
Construction and BuildingConstruction and Building51,403 4.1 %9,077 5.6 %
Business ServicesBusiness Services47,521 3.7 %3,981 2.5 %
Capital EquipmentCapital Equipment47,088 3.7 %7,755 4.8 %
Durable Consumer GoodsDurable Consumer Goods44,337 3.5 %10,276 6.4 %
Hotel and LeisureHotel and Leisure42,259 3.3 %2,214 1.4 %
Containers, Packaging, and Glass 27,278
 4.0% 5,325
 6.2%Containers, Packaging, and Glass40,660 3.2 %6,714 4.2 %
Sovereign and Public FinanceSovereign and Public Finance37,455 3.0 %3,241 2.0 %
High Tech Industries 26,133
 3.8% 2,354
 2.7%High Tech Industries31,066 2.5 %3,315 2.1 %
Media: Advertising, Printing, and Publishing 25,448
 3.7% 1,588
 1.8%
Capital Equipment 24,668
 3.6% 4,037
 4.7%
Business Services 14,175
 2.1% 1,730
 2.0%
Wholesale 13,500
 2.0% 2,572
 3.0%
Durable Consumer Goods 11,509
 1.7% 2,485
 2.9%
Grocery 11,421
 1.7% 1,260
 1.5%
Chemicals, Plastics, and RubberChemicals, Plastics, and Rubber27,710 2.2 %4,431 2.7 %
InsuranceInsurance25,973 2.0 %1,749 1.1 %
Non-Durable Consumer GoodsNon-Durable Consumer Goods23,869 1.9 %5,940 3.7 %
BankingBanking19,210 1.5 %1,216 0.8 %
Aerospace and Defense 10,406
 1.5% 1,115
 1.3%Aerospace and Defense16,227 1.3 %1,358 0.8 %
Chemicals, Plastics, and Rubber 9,357
 1.4% 1,108
 1.3%
Metals and Mining 9,177
 1.4% 1,341
 1.6%
Oil and Gas 8,659
 1.3% 368
 0.4%
Banking 8,412
 1.2% 702
 0.8%
Non-Durable Consumer Goods 8,115
 1.2% 1,883
 2.2%
Telecommunications 7,008
 1.0% 418
 0.5%Telecommunications15,007 1.2 %1,479 0.9 %
MetalsMetals14,913 1.2 %3,068 1.9 %
Media: Broadcasting and SubscriptionMedia: Broadcasting and Subscription12,723 1.0 %784 0.5 %
Other (b)
 14,395
 2.1% 1,502
 1.8%
Other (b)
40,433 3.2 %5,074 3.1 %
Total $678,862
 100.0% 85,883
 100.0%Total$1,270,226 100.0 %161,294 100.0 %
__________
(a)Includes automotive dealerships.
(b)Includes ABR from tenants in the following industries: insurance, electricity, media: broadcasting and subscription, forest products and paper, and environmental industries. Also includes square footage for vacant properties.

(a)Includes automotive dealerships.

(b)Includes ABR from tenants in the following industries: media: advertising, printing, and publishing, wholesale, oil and gas, environmental industries, consumer transportation, forest products and paper, real estate, and electricity. Also includes square footage for vacant properties.


W. P. Carey 6/30/2022 10-Q– 48

W. P. Carey 9/30/2017 10-Q– 60



Lease Expirations
(in thousands, except percentages, number of leases, and number of leases)tenants)
Year of Lease Expiration (a)
 Number of Leases Expiring ABR Percent Square
Footage		 Percent
Year of Lease Expiration (a)
Number of Leases ExpiringNumber of Tenants with Leases ExpiringABRABR PercentSquare
Footage		Square Footage Percent
Remaining 2017 (b)
 3
 $609
 0.1% 71
 0.1%
2018 5
 8,129
 1.2% 1,107
 1.3%
2019 22
 31,176
 4.6% 3,132
 3.6%
2020 24
 33,390
 4.9% 3,343
 3.9%
2021 80
 42,214
 6.2% 6,376
 7.4%
2022 40
 70,121
 10.3% 9,442
 11.0%
2023 21
 41,331
 6.1% 5,811
 6.8%
2024 43
 95,601
 14.1% 11,592
 13.5%
Remaining 2022Remaining 202220 17 $24,073 1.9 %1,500 0.9 %
2023 (b)
2023 (b)
32 27 46,942 3.7 %5,127 3.2 %
2024 (c)
2024 (c)
43 37 94,116 7.4 %12,221 7.6 %
2025 41
 34,083
 5.0% 3,689
 4.3%202552 30 58,981 4.6 %7,144 4.4 %
2026 19
 18,912
 2.8% 3,159
 3.7%202641 30 56,375 4.4 %8,222 5.1 %
2027 26
 42,632
 6.3% 6,052
 7.0%202757 33 79,785 6.3 %8,715 5.4 %
2028 10
 20,052
 3.0% 2,272
 2.6%202842 24 62,132 4.9 %5,571 3.5 %
2029 11
 19,970
 2.9% 2,897
 3.4%202951 24 55,657 4.4 %6,882 4.3 %
2030 11
 50,930
 7.5% 4,804
 5.6%203028 24 65,273 5.1 %5,565 3.4 %
Thereafter (>2030) 96
 169,712
 25.0% 21,953
 25.6%
2031203133 17 64,229 5.1 %8,056 5.0 %
2032203237 18 40,780 3.2 %5,409 3.4 %
2033203328 22 74,922 5.9 %10,159 6.3 %
2034203448 16 76,288 6.0 %7,955 4.9 %
2035203513 13 26,224 2.1 %4,725 2.9 %
Thereafter (>2035)Thereafter (>2035)277 109 444,449 35.0 %62,519 38.8 %
Vacant —
 —
 —% 183
 0.2%Vacant— — — — %1,524 0.9 %
Total 452
 $678,862
 100.0% 85,883
 100.0%Total802 $1,270,226 100.0 %161,294 100.0 %
__________
(a)Assumes tenants do not exercise any renewal options.
(b)One month-to-month lease with ABR of $0.1 million is included in 2017 ABR.

(a)Assumes tenants do not exercise any renewal options or purchase options.
(b)Includes ABR of $16.1 million from a tenant (Marriott Corporation) with a lease expiration in January 2023.
(c)Includes ABR of $38.8 million from a tenant (U-Haul Moving Partners, Inc. and Mercury Partners, LP) that holds an option to repurchase the 78 properties it is leasing in April 2024. There can be no assurance that such repurchase will be completed.

Rent Collections

Through the date of this Report, we received from tenants over 99.6% of contractual base rent that was due during the second quarter of 2022 (based on contractual minimum annualized base rent (“ABR”) as of March 31, 2022).

Terms and Definitions


Pro Rata Metrics— The portfolio information above contains certain metrics prepared under theon a pro rata consolidation method.basis. We refer to these metrics as pro rata metrics. We have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. Under theOn a full consolidation method,basis, we report 100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%. Also, for all other jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. Under theOn a pro rata consolidation method,basis, we generally present our proportionate share, based on our economic ownership of these jointly owned investments, of the portfolio metrics of those investments. Multiplying each of theour jointly owned investments’ financial statement line items by our percentage ownership and adding those amounts to or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in suchour jointly owned investments.


ABR —ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of SeptemberJune 30, 2017.2022. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties.




W. P. Carey 6/30/2022 10-Q– 49

W. P. Carey 9/30/2017 10-Q– 61



Results of Operations
 
We operate in two reportable segments: Owned Real Estate and Investment Management. We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality, and number of properties in our Owned Real Estate segment, as well as assets owned by the Managed Programs, which are managed by us through our Investment Management segment. We focus our efforts on accretive investing and improving underperforming assetsportfolio quality through re-leasing efforts, including negotiation of lease renewals, or selectively selling assets in order to increase value in our real estate portfolio.

As a result of our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017, we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include equity in earnings of equity method investments in the Managed Programs in Through our Investment Management segment, (Note 1). Earnings from our investment in CCIFwe expect to continue to be included inearn fees and other income from the management of the portfolios of the remaining Managed Programs until those programs reach the end of their respective life cycles. Refer to Note 15 for tables presenting the comparative results of our Real Estate and Investment Management segment. Results of operations for prior periods have been reclassified to conform to the current period presentation.segments.



W. P. Carey 9/30/2017 10-Q– 62


Owned Real Estate


Revenues

The following table presents the comparative results ofrevenues within our Owned Real Estate segment (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Real Estate Revenues
Lease revenues from:
Existing net-leased properties$282,633 $273,925 $8,708 $562,924 $552,371 $10,553 
Recently acquired net-leased properties31,017 12,381 18,636 57,558 14,794 42,764 
Net-leased properties sold or held for sale704 2,758 (2,054)1,597 6,564 (4,967)
Total lease revenues (includes reimbursable tenant costs)314,354 289,064 25,290 622,079 573,729 48,350 
Income from direct financing leases and loans receivable17,778 17,422 356 36,157 35,164 993 
Operating property revenues5,064 3,245 1,819 8,929 5,424 3,505 
Lease termination income and other2,591 5,059 (2,468)16,713 6,644 10,069 
$339,787 $314,790 $24,997 $683,878 $620,961 $62,917 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Revenues           
Lease revenues$161,511
 $163,786
 $(2,275) $475,547
 $506,358
 $(30,811)
Operating property revenues8,449
 8,524
 (75) 23,652
 23,696
 (44)
Reimbursable tenant costs5,397
 6,537
 (1,140) 15,940
 19,237
 (3,297)
Lease termination income and other1,227
 1,224
 3
 4,234
 34,603
 (30,369)
 176,584
 180,071
 (3,487) 519,373
 583,894
 (64,521)
Operating Expenses           
Depreciation and amortization:           
Net-leased properties61,583
 60,337
 1,246
 182,314
 206,312
 (23,998)
Operating properties1,067

1,071
 (4) 3,202
 3,174
 28
Corporate depreciation and amortization320
 332
 (12) 965
 1,071
 (106)
 62,970
 61,740
 1,230
 186,481
 210,557
 (24,076)
Property expenses:           
Operating property expenses6,227
 5,611
 616
 17,859
 17,117
 742
Reimbursable tenant costs5,397
 6,537
 (1,140) 15,940
 19,237
 (3,297)
Net-leased properties4,329
 4,582
 (253) 13,337
 21,358
 (8,021)
 15,953
 16,730
 (777) 47,136
 57,712
 (10,576)
General and administrative11,234
 7,453
 3,781
 27,311
 25,653
 1,658
Stock-based compensation expense1,880
 1,572
 308
 4,733
 4,316
 417
Other expenses65
 —
 65
 1,138
 2,975
 (1,837)
Impairment charges—
 14,441
 (14,441) —
 49,870
 (49,870)
Restructuring and other compensation—
 —
 —
 —
 4,413
 (4,413)
 92,102
 101,936
 (9,834) 266,799
 355,496
 (88,697)
Other Income and Expenses           
Interest expense(41,182) (44,349) 3,167
 (125,374) (139,496) 14,122
Equity in earnings of equity method investments in real estate3,740
 3,230
 510
 9,533
 9,585
 (52)
Other income and (expenses)(4,918) 3,244
 (8,162) (6,249) 7,681
 (13,930)
 (42,360) (37,875) (4,485) (122,090) (122,230) 140
Income before income taxes and gain on sale of real estate42,122
 40,260
 1,862
 130,484
 106,168
 24,316
(Provision for) benefit from income taxes(1,511) (530) (981) (6,696) 6,792
 (13,488)
Income before gain on sale of real estate40,611
 39,730
 881
 123,788
 112,960
 10,828
Gain on sale of real estate, net of tax19,257
 49,126
 (29,869) 22,732
 68,070
 (45,338)
Net Income from Owned Real Estate59,868
 88,856
 (28,988) 146,520
 181,030
 (34,510)
Net income attributable to noncontrolling interests(3,376) (1,359) (2,017) (8,530) (6,294) (2,236)
Net Income from Owned Real Estate Attributable to W. P. Carey$56,492
 $87,497
 $(31,005) $137,990
 $174,736
 $(36,746)




W. P. Carey 9/30/2017 10-Q– 63


Lease Composition and Leasing Activities

As of September 30, 2017, 68.9% of our net leases, based on ABR, have rent increase adjustments based on CPI or similar indices and 26.2% of our net leases, based on ABR, have fixed rent increases. These leases comprise 95.1% of our portfolio. CPI and similar rent adjustments are based on formulas indexed to changes in the CPI, or other similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. Over the next 12 months, fixed rent escalations are scheduled to increase ABR by an average of 2.5%, excluding leases that are set to expire within the next 12 months. We own international investments and, therefore, lease revenues from these investments are subject to exchange rate fluctuations in various foreign currencies, primarily the euro.

The following discussion presents a summary of rents on existing properties arising from leases with new tenants and renewed leases with existing tenants for the period presented and, therefore, does not include new acquisitions or properties placed into service for our portfolio during the periods presented, as applicable.

During the three months ended September 30, 2017, we entered into one new lease for approximately 3,000 square feet of leased space. The rent for the leased space is $22.50 per square foot. In addition, during the three months ended September 30, 2017, we extended two leases with existing tenants for a total of approximately 0.1 million square feet of leased space. The average new rent for the leased space is $7.19 per square foot, compared to the average former rent of $7.18 per square foot.

During the nine months ended September 30, 2017, we entered into five new leases for a total of approximately 0.4 million square feet of leased space. The average rent for the leased space is $14.92 per square foot. We provided tenant improvement allowances for the four new leases totaling $8.8 million. In addition, during the nine months ended September 30, 2017, we extended 22 leases with existing tenants for a total of approximately 2.8 million square feet of leased space. The average new rent for the leased space is $5.27 per square foot, compared to the average former rent of $5.47 per square foot, reflecting current market conditions. We provided tenant improvement allowances on four of these leases totaling $4.0 million.



W. P. Carey 9/30/2017 10-Q– 64


Property Level Contribution

The following table presents the Property level contribution for our consolidated net-leased and operating properties as well as a reconciliation to Net income from Owned Real Estate attributable to W. P. Carey (in thousands):6/30/2022 10-Q– 50

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Existing Net-Leased Properties           
Lease revenues$148,721
 $143,209
 $5,512
 $436,210
 $431,502
 $4,708
Property expenses(3,776) (3,419) (357) (11,438) (10,048) (1,390)
Depreciation and amortization(56,244) (55,111) (1,133) (165,834) (165,842) 8
Property level contribution88,701
 84,679
 4,022
 258,938
 255,612
 3,326
Recently Acquired Net-Leased Properties           
Lease revenues11,953
 8,099
 3,854
 35,302
 14,815
 20,487
Property expenses(80) (28) (52) (325) (37) (288)
Depreciation and amortization(5,032) (3,823) (1,209) (14,845) (6,885) (7,960)
Property level contribution6,841
 4,248
 2,593
 20,132
 7,893
 12,239
Properties Sold or Held for Sale           
Lease revenues837
 12,478
 (11,641) 4,035
 60,041
 (56,006)
Operating revenues—
 —
 —
 —
 61
 (61)
Property expenses(473) (1,139) 666
 (1,574) (11,379) 9,805
Depreciation and amortization(307) (1,403) 1,096
 (1,635) (33,598) 31,963
Property level contribution57
 9,936
 (9,879) 826
 15,125
 (14,299)
Operating Properties           
Revenues8,449
 8,524
 (75) 23,652
 23,635
 17
Property expenses(6,227) (5,607) (620) (17,859) (17,011) (848)
Depreciation and amortization(1,067) (1,071) 4
 (3,202) (3,161) (41)
Property level contribution1,155
 1,846
 (691) 2,591
 3,463
 (872)
Property Level Contribution96,754
 100,709
 (3,955) 282,487
 282,093
 394
Add: Lease termination income and other1,227
 1,224
 3
 4,234
 34,603
 (30,369)
Less other expenses:           
General and administrative(11,234) (7,453) (3,781) (27,311) (25,653) (1,658)
Stock-based compensation expense(1,880) (1,572) (308) (4,733) (4,316) (417)
Corporate depreciation and amortization(320) (332) 12
 (965) (1,071) 106
Other expenses(65) —
 (65) (1,138) (2,975) 1,837
Impairment charges—
 (14,441) 14,441
 —
 (49,870) 49,870
Restructuring and other compensation—
 —
 —
 —
 (4,413) 4,413
Other Income and Expenses           
Interest expense(41,182) (44,349) 3,167
 (125,374) (139,496) 14,122
Equity in earnings of equity method investments in real estate3,740
 3,230
 510
 9,533
 9,585
 (52)
Other income and (expenses)(4,918) 3,244
 (8,162) (6,249) 7,681
 (13,930)
 (42,360) (37,875) (4,485) (122,090) (122,230) 140
Income before income taxes and gain on sale of real estate42,122
 40,260
 1,862
 130,484
 106,168
 24,316
(Provision for) benefit from income taxes(1,511) (530) (981) (6,696) 6,792
 (13,488)
Income before gain on sale of real estate40,611
 39,730
 881
 123,788
 112,960
 10,828
Gain on sale of real estate, net of tax19,257
 49,126
 (29,869) 22,732
 68,070
 (45,338)
Net Income from Owned Real Estate59,868
 88,856
 (28,988) 146,520
 181,030
 (34,510)
Net income attributable to noncontrolling interests(3,376) (1,359) (2,017) (8,530) (6,294) (2,236)
Net Income from Owned Real Estate Attributable to W. P. Carey$56,492
 $87,497
 $(31,005) $137,990
 $174,736
 $(36,746)



W. P. Carey 9/30/2017 10-Q– 65



Lease Revenues
Property level contribution is a non-GAAP measure that we believe to be a useful supplemental measure for management and investors in evaluating and analyzing the financial results of our net-leased and operating properties included in our Owned Real Estate segment over time. Property level contribution presents the lease and operating property revenues, less property expenses and depreciation and amortization. We believe that Property level contribution allows for meaningful comparison between periods of the direct costs of owning and operating our net-leased assets and operating properties. When a property is leased on a net-lease basis, reimbursable tenant costs are recorded as both income and property expense and, therefore, have no impact on the Property level contribution. While we believe that Property level contribution is a useful supplemental measure, it should not be considered as an alternative to Net income from Owned Real Estate attributable to W. P. Carey as an indication of our operating performance.

During the three months ended September 30, 2017, certain of our properties were damaged by Hurricane Harvey and Hurricane Irma. As a result, we evaluated such properties to determine if any losses should be recognized. We determined that the damages incurred were immaterial, and as such, no losses have been recorded.

Existing Net-Leased Properties

“Existing net-leased propertiesproperties” are those that we acquired or placed into service prior to January 1, 20162021 and that were not sold or held for sale during the periods presented. For the periods presented, there were 8081,108 existing net-leased properties.


For the three and six months ended SeptemberJune 30, 20172022 as compared to the same periodperiods in 2016,2021, lease revenues from existing net-leased properties increased by $2.2 milliondue to the following items (in millions):
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__________
(a)Excludes fixed minimum rent increases, which are reflected as straight-line rent adjustments within lease revenues.
(b)Primarily related to (i) straight-line rent adjustments as a result of an increase in the average exchange ratecontractual rental revenue from certain leases being deemed probable of the U.S. dollar in relation to foreign currencies (primarily the euro) between the periods, $1.3 million related to scheduledcollection and (ii) write-offs of above/below-market rent increases, $1.2 million due to new leases with existing tenants, and $0.8 million related to completed build-to-suit or expansion projects on existing properties. Depreciation and amortization expense from existing net-leased properties increased primarily as a result of an increase in the average exchange rate of the U.S. dollar in relation to foreign currencies (primarily the euro) between the periods.intangibles.


For the nine months ended September 30, 2017 as compared to the same period in 2016, lease revenues from existing net-leased properties increased by $3.3 million related to scheduled rent increases, $2.8 million due to new leases with existing tenants, and $2.4 million related to completed build-to-suit or expansion projects on existing properties. These increases were partially offset by decreases of $2.2 million as a result of a decrease in the average exchange rate of the U.S. dollar in relation to foreign currencies (primarily the British pound sterling) between the periods, $1.0 million due to lease restructurings, and $1.0 million due to lease expirations.

Recently Acquired Net-Leased Properties

“Recently acquired net-leased propertiesproperties” are those that we acquired or placed into service subsequent to December 31, 2015. Since January 1, 2016, we acquired four investments comprised of 67 properties, 51 of which we acquired during the second quarter of 2016, 15 of which we acquired during the fourth quarter of 2016,2020 and one of which we acquired during the second quarter of 2017.

For the three and nine months ended September 30, 2017, property level contribution from recently acquired net-leased properties increased by $2.6 million and $12.2 million, respectively, reflecting the results of operations of our investments completed during 2016 and 2017.

Properties Sold or Held for Sale

In addition to the impact on property level contribution related to properties wethat were not sold or classified as held for sale during the periods presented,presented. Since January 1, 2021, we recognized gainsacquired 36 investments (comprised of 129 properties and losses on salesix land parcels under buildings that we already own) and placed one property into service.

W. P. Carey 6/30/2022 10-Q– 51


“Net-leased properties sold or held for sale” include (i) 14 net-leased properties disposed of real estate, lease termination income, impairment charges, allowances for credit losses, and gain (loss) on extinguishment of debt. The impact of these transactions is described in further detail below and in Note 15.

Duringduring the threesix months ended SeptemberJune 30, 2017, we2022 and (ii) 24 net-leased properties disposed of five properties. During the nine months ended September 30, 2017, we disposed of 13 properties, one of which was held for sale at December 31, 2016, and a parcel of vacant land. At September 30, 2017, we had one property classified as held for sale (Note 4). During the year ended December 31, 2016, we disposed of 33 properties and a parcel of vacant land.



W. P. Carey 9/30/2017 10-Q– 66


In the fourth quarter of 2015, we executed a lease amendment with a tenant in a domestic office building. The amendment extended the lease term an additional 15 years to January 31, 2037 and provided a one-time rent payment of $25.0 million, which was paid to us on December 18, 2015. The lease amendment also provided an option to terminate the lease effective February 29, 2016, with additional lease termination fees of $22.2 million to be paid to us on or five days before February 29, 2016 upon exercise of the option. The tenant exercised the option on January 1, 2016. The aggregate of the additional rent payment of $25.0 million and the lease termination fees of $22.2 million were amortized to lease termination income from the lease amendment date on December 4, 2015 through the end of the non-cancelable lease term on February 29, 2016, resulting in $15.0 million recognized during the year ended December 31, 20152021. Our dispositions are more fully described in Note 14.

Income from Direct Financing Leases and $32.2 million recognized duringLoans Receivable

We currently present Income from direct financing leases and loans receivable on its own line item in the nine months ended September 30, 2016consolidated statements of income. Previously, income from direct financing leases was included within Lease revenues and income from loans receivable was included within Lease termination income and other in the consolidated financial statements. Duringstatements of income. Prior period amounts have been reclassified to conform to the fourth quarter of 2015, we entered into an agreement to sell the property to a third party. In February 2016, we sold the property. As a result of this lease termination and sale, we recognized accelerated amortization of below-market rent intangibles of $16.7 million during the nine months ended September 30, 2016, which was recorded as an adjustment to lease revenues. In addition, for the same property, we recognized accelerated amortization of in-place lease intangibles of $20.3 million during thatcurrent period which is included in depreciation and amortization expense.presentation.

In addition, during the nine months ended September 30, 2016, we recorded an allowance for credit losses of $7.1 million on an international direct financing lease investment that was sold in August 2017, which was included in property expenses, due to a decline in the estimated amount of future payments we would receive from the tenant (Note 5).

Operating Properties

Operating properties consist of our investments in two hotels for all periods presented.


For the three and ninesix months ended SeptemberJune 30, 20172022 as compared to the same periods in 2016, property expenses for operating properties2021, income from direct financing leases and loans receivable increased due to increases in costs related to room and food services, property management, and marketing.the following items (in millions):

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Other
W. P. Carey 6/30/2022 10-Q– 52


Operating Property Revenues and Expenses


For the periods presented, we recorded operating property revenues from 11 operating properties, comprised of ten self-storage operating properties (which excludes nine self-storage properties accounted for under the equity method) and one hotel operating property. For our hotel operating property, revenues and expenses increased by (i) $1.5 million and $1.1 million, respectively, for the three months ended June 30, 2022 as compared to the same period in 2021, and (ii) $3.0 million and $2.0 million, respectively, for the six months ended June 30, 2022 as compared to the same period in 2021, reflecting higher occupancy as the hotel’s business recovers from the ongoing COVID-19 pandemic.

Lease Termination Income and Other


2017 — For the nine months ended September 30, 2017, lease termination income and other was $4.2 million. We received proceeds from a bankruptcy settlement claim with a former tenant during both the second and third quarters of 2017 and recognized income during the first, second, and third quarters of 2017 related to a lease termination that occurred during the first quarter of 2017. Lease termination income and other also consists of earnings from our note receivable (is described in Note 54).


2016 — For the nine months ended September 30, 2016, lease termination income
Operating Expenses

Depreciation and other was $34.6 million, primarily consisting of the $32.2 million of lease termination income related to a domestic property that was sold in February 2016, as discussed above (Note 15).Amortization


GeneralThe following table presents depreciation and Administrative

Beginning with the third quarter of 2017, personnel and rent expenses includedamortization expense within general and administrative expenses that are recorded by our Owned Real Estate segment will be allocated based on time incurred by our personnel for the Owned Real Estate and Investment Management segments. All other overhead costs are charged to our Investment Management segment based on the trailing 12-month reported revenues of the Managed Programs and us.(in thousands):

Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Depreciation and Amortization
Net-leased properties$113,650 $112,319 $1,331 $227,612 $220,822 $6,790 
Operating properties683 679 4 1,367 1,375 (8)
Corporate747 1,350 (603)1,494 2,473 (979)
$115,080 $114,348 $732 $230,473 $224,670 $5,803 
As discussed in Note 3, certain personnel costs and overhead costs are charged to the CPA® REITs based on the trailing 12-month reported revenues of the Managed Programs and us. We allocate certain personnel and overhead costs to the CWI REITs based on the time incurred by our personnel. We allocate certain personnel costs based on the time incurred by our personnel to CESH I and, prior to our resignation as the advisor to CCIF in the third quarter of 2017, to the Managed BDCs.

For the three and ninesix months ended SeptemberJune 30, 20172022 as compared to the same periods in 2016,2021, depreciation and amortization expense for net-leased properties increased primarily due to the impact of net acquisition activity, partially offset by the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the U.S. dollar between the periods.

General and Administrative

All general and administrative expenses inare attributed to our Owned Real Estate segment, which excludes restructuring and other compensation expenses as described below, increased by $3.8 million and $1.7 million, respectively, primarily due to the change in methodology for allocation of expenses between our Owned Real Estate and Investment Management segments (Note 1).segment.



W. P. Carey 9/30/2017 10-Q– 67


Stock-based Compensation Expense

Beginning with the third quarter of 2017, stock-based compensation expense is being allocated to our Owned Real Estate and Investment Management segments based on time incurred by our personnel for those segments.


For the three and ninesix months ended SeptemberJune 30, 2017, stock-based compensation expense allocated to our Owned Real Estate segment was $1.9 million and $4.7 million, respectively, substantially unchanged from the prior year periods.

Other Expenses

For the nine months ended September 30, 20172022 as compared to the same period in 2016, other2021, general and administrative expenses decreasedallocated to our Real Estate segment increased by $1.8$1.4 million, primarily due to advisoryhigher compensation expense.

Property Expenses, Excluding Reimbursable Tenant Costs

For the six months ended June 30, 2022 as compared to the same period in 2021, property expenses, excluding reimbursable tenant costs, increased by $2.9 million, primarily due to higher carrying costs related to tenant vacancies (which resulted in property expenses no longer being reimbursable) and professional fees incurred during the prior year periodcosts associated with repositioning certain properties.

Stock-based Compensation Expense

Stock-based compensation expense is fully recognized within our OwnedReal Estate segment.

For the six months ended June 30, 2022 as compared to the same period in 2021, stock-based compensation expense allocated to our Real Estate segment increased by $3.2 million, primarily due to changes in connection with the formal strategic review that we completed in May 2016.projected payout for PSUs.


Impairment Charges


Where the undiscounted cash flows for an asset are less than the asset’s carrying value when considering and evaluating the various alternative courses of action that may occur, we recognize an impairment charge to reduce the carrying value of the asset to its estimated fair value. Further, when we classify an asset as held for sale, we carry the asset at the lower of its current carrying value or its fair value, less estimated cost to sell. Our impairment charges are more fully described in Note 8.


During
W. P. Carey 6/30/2022 10-Q– 53


Merger and Other Expenses

The following table presents merger and other expenses within our Real Estate segment (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Merger and Other Expenses
Costs incurred in connection with the Proposed Merger (Note 1)
$1,785 $— $1,785 $2,734 $— $2,734 
Reversals of estimated liabilities for German real estate transfer taxes that were previously recorded in connection with mergers in prior years— (2,819)2,819 (3,616)(3,262)(354)
Other expenses199 220 (21)541 172 369 
$1,984 $(2,599)$4,583 $(341)$(3,090)$2,749 

Other Income and (Expenses), and Provision for Income Taxes

Interest Expense
For the three months ended September 30, 2016, we recognized impairment charges totaling $14.4 million, including an amount attributable to a noncontrolling interest of $0.6 million, on 18 properties, including a portfolio of 14 properties, in order to reduce the carrying values of the properties to their estimated fair values. The impairment charges recognized on the portfolio of 14 properties were in addition to charges recognized on the portfolio during theand six months ended June 30, 2016 (as described below), based on the purchase and sale agreement for the portfolio. The fair value measurements for the properties approximated their estimated selling prices, less estimated costs to sell. The portfolio of 14 properties was sold in October 2016. Of the other four properties, one was sold in December 2016, two were disposed of in January 2017, and one property, which was classified as held for sale as of December 31, 2016, was sold in January 2017.

During the nine months ended September 30, 2016, we recognized impairment charges totaling $49.9 million, including an amount attributable to a noncontrolling interest of $0.6 million, on 18 properties in order to reduce the carrying values of the properties to their estimated fair values. In addition to the impairment charges of $14.4 million recognized during the three months ended September 30, 2016, described above, we recognized impairment charges totaling $35.4 million on the portfolio of 14 properties during the six months ended June 30, 2016, in order to reduce the carrying values of the properties to their estimated fair values at that time. The fair value measurements for the properties approximated their estimated selling prices, less estimated costs to sell.

Restructuring and Other Compensation

For the nine months ended September 30, 2016, we recorded total restructuring and other compensation expenses of $11.9 million, of which $4.4 million was allocated to our Owned Real Estate segment. Included in the total was $5.1 million of severance related to the employment agreement with our former chief executive officer and $6.8 million related to severance, stock-based compensation, and other costs incurred as part of the employee terminations and RIF during the period (Note 12).

Interest Expense
For the three and nine months ended September 30, 20172022 as compared to the same periods in 2016,2021, interest expense decreased by $3.2$2.8 million and $14.1$8.4 million, respectively, primarily due to an overall decrease(i) the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the U.S. dollar between the periods, (ii) the reduction of our weighted-average interest rate, as well as an overall decrease in our averagemortgage debt outstanding debt balances. Our weighted-average interest rate was 3.5% and 3.8% during the three months ended September 30, 2017 and 2016, respectively, and 3.6% and 3.9% during the nine months ended September 30, 2017 and 2016, respectively. Our average outstanding debt balance was $4.3 billion and $4.5 billion during the three months ended September 30, 2017 and 2016, respectively, and $4.3 billion and $4.6 billion during the nine months ended September 30, 2017 and 2016, respectively. Theby prepaying or repaying at or close to maturity a total of $790.7 million of non-recourse mortgage loans with a weighted-average interest rate of our debt decreased primarily as a result of paying off certain non-recourse mortgage loans with unsecured borrowings, which bear interest at a lower rate than our mortgage loans4.9% since January 1, 2021 (Note 10)., and (iii) the redemption of the €500.0 million of 2.0% Senior Notes due 2023 in March 2021, partially offset by three senior unsecured notes issuances totaling $1.4 billion (based on the exchange rate of the euro on the date of issuance for our euro-denominated senior unsecured notes) with a weighted-average interest rate of 1.7% completed since January 1, 2021.



The following table presents certain information about our outstanding debt (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Average outstanding debt balance$6,833,452 $7,000,966 $6,876,996 $6,908,325 
Weighted-average interest rate2.5 %2.6 %2.5 %2.7 %

Gain on Sale of Real Estate, Net

Gain on sale of real estate, net, consists of gain on the sale of properties that were disposed of during the reporting period. Our dispositions are more fully described in Note 14.


W. P. Carey 6/30/2022 10-Q– 54

W. P. Carey 9/30/2017 10-Q– 68



Other IncomeGains and (Expenses)(Losses)
 
Other incomegains and (expenses)(losses) primarily consists of gains and losses on (i) the mark-to-market fair value of equity securities, (ii) extinguishment of debt, and (iii) foreign currency transactions, derivativeexchange rate movements. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation. All of our foreign currency-denominated unsecured debt instruments were designated as net investment hedges during the three and extinguishment of debt. Gainssix months ended June 30, 2022 and 2021. Therefore, no gains and losses on foreign currency transactions areexchange rate movements were recognized on the remeasurement of certain ofsuch instruments during those periods (Note 9).
The following table presents other gains and (losses) within our euro-denominated unsecured debt instruments that are not designated as net investment hedges. Real Estate segment (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Other Gains and (Losses)
Net realized and unrealized (losses) gains on foreign currency exchange rate movements (a)
$(37,030)$3,270 $(40,300)$(48,104)$(4,181)$(43,923)
Non-cash unrealized gains related to an increase in the fair value of our investment in common shares of WLT (Note 8)
15,357 — 15,357 43,397 — 43,397 
Change in allowance for credit losses on finance receivables (Note 5)
1,753 4,890 (3,137)980 6,249 (5,269)
Loss on extinguishment of debt (b)
(149)(187)38 (1,041)(60,068)59,027 
Realized gains in connection with the redemption of our investment in preferred shares of WLT (Note 8)
— — — 18,688 — 18,688 
Non-cash unrealized gains related to an increase in the fair value of our investment in shares of Lineage Logistics (Note 8)
— — — — 23,381 (23,381)
Other(86)(501)415 343 (98)441 
$(20,155)$7,472 $(27,627)$14,263 $(34,717)$48,980 
__________
(a)We make certain foreign currency-denominated intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar as their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and short-termamortizing loans, are included in other gains and (losses).
(b)Amount for the determinationsix months ended June 30, 2021 is related to the prepayment of net income. We also recognize gains or losses on foreign currency transactions when we repatriate cash from our foreign investments. In addition, we have certain derivative instruments, including common stock warrantsmortgage loans (primarily comprised of prepayment penalties totaling $31.8 million) and foreign currency contracts, that are not designated as hedges for accounting purposes, for whichredemption of the €500.0 million of 2.0% Senior Notes due 2023 in March 2021 (primarily comprised of a “make-whole” amount of $26.2 million related to the redemption) (Note 10).

W. P. Carey 6/30/2022 10-Q– 55


Non-Operating Income

Non-operating income primarily consists of realized and unrealized gains and losses are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.
2017 — For the three months ended September 30, 2017, net other expenses were $4.9 million. During the period, we recognized net realized and unrealized losses of $7.0 million on foreign currency transactions as a result of changes in foreign currency exchange rates and a net loss on extinguishment of debt totaling $1.6 million primarily related to the repayment of a non-recourse mortgage loan encumbering a domestic property that was sold in July 2017 (Note 15). These losses were partially offset by realized gains of $2.3 million related to foreign currency forward contracts and foreign currency collarsderivative instruments, dividends from securities, and interest income of $0.5 million primarily related toon our loans to affiliates (Note 3).and cash deposits.


For the nine months ended September 30, 2017, net other expenses were $6.2 million. During the period, we recognized net realized and unrealized losses of $16.4 million on foreign currency transactions as a result of changes in foreign currency exchange rates and unrealized losses of $1.1 million primarily on foreign currency collars prior to their maturities on various dates during the period, as well as on common stock warrants that we own in connection with certain investments. These losses were partially offset by realized gains of $8.6 million related to foreign currency forward contracts and foreign currency collars and interestThe following table presents non-operating income of $1.5 million primarily related towithin our loans to affiliates (Note 3).

2016 — For the three months ended September 30, 2016, net other income was $3.2 million. During the period, we recognized realized gains of $2.4 million related to foreign currency forward contracts and foreign currency collars and unrealized gains of $0.7 million recognized primarily on interest rate swaps that did not qualify for hedge accounting. In addition, we recognized a gain of $0.7 million in our Owned Real Estate segment on(in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Non-Operating Income
Realized gains (losses) on foreign currency collars (Note 9)
$5,934 $(228)$6,162 $9,246 $(408)$9,654 
Interest income related to our loans to affiliates and cash deposits41 25 16 51 39 12 
Cash dividends from our investment in preferred shares of WLT (Note 8)
— 3,268 (3,268)912 3,268 (2,356)
Cash dividends from our investment in Lineage Logistics (Note 8)
— — — 4,308 6,438 (2,130)
$5,975 $3,065 $2,910 $14,517 $9,337 $5,180 

Earnings (Losses) from Equity Method Investments in Real Estate

Our equity method investments in real estate are more fully described in Note 7. The following table presents earnings (losses) from equity method investments in real estate (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Earnings (Losses) from Equity Method Investments in Real Estate
Earnings from Las Vegas Retail Complex$1,809 $293 $1,516 $3,368 $293 $3,075 
Earnings from Johnson Self Storage (a)
1,087 492 595 2,027 893 1,134 
Earnings (losses) from Kesko Senukai (b)
576 660 (84)1,230 (510)1,740 
Losses from WLT (c)
— (4,005)4,005 — (8,488)8,488 
Proportionate share of impairment charge recognized on Bank Pekao (Note 7)
— — — (4,610)— (4,610)
Other-than-temporary impairment charge on State Farm Mutual Automobile Insurance Co. (Note 8)
— — — — (6,830)6,830 
Other1,057 706 351 1,727 1,669 58 
$4,529 $(1,854)$6,383 $3,742 $(12,973)$16,715 
__________
(a)Increases for the deconsolidation of an affiliate, CESH I (Note 2). These gains were partially offset by a net loss on extinguishment of debt of $2.1 million primarily relatedthree and six months ended June 30, 2022 as compared to the payoff of a non-recourse mortgage loan.same periods in 2021 are primarily due to higher occupancy and unit rates at these self-storage facilities.
For(b)Increase for the ninesix months ended SeptemberJune 30, 2016, net other income was $7.7 million. During the period, we recognized realized gains of $6.4 million related to foreign currency forward contracts and foreign currency collars, unrealized gains of $3.2 million recognized primarily on interest rate swaps that did not qualify for hedge accounting, and interest income of $0.6 million primarily related to our loans to affiliates (Note 3). In addition, we recognized a gain of $0.7 million in our Owned Real Estate segment on the deconsolidation of CESH I (Note 2). These gains were partially offset by a net loss on extinguishment of debt of $3.9 million primarily related to the payoff of two non-recourse mortgage loans.

(Provision for) Benefit from Income Taxes

For the three months ended September 30, 2017,2022 as compared to the same period in 2016,2021 is primarily due to higher rent collections at these retail properties, where certain rents were previously disputed and subsequently collected.
(c)Losses for the prior year periods were primarily due to the adverse impact of the COVID-19 pandemic on WLT’s operations. We recorded losses from this investment on a one quarter lag. This investment was reclassified to equity securities at fair value within Other assets, net on our consolidated balance sheets in January 2022 (Note 8).




W. P. Carey 6/30/2022 10-Q– 56


Provision for Income Taxes

For the three and six months ended June 30, 2022 as compared to the same periods in 2021, provision for income taxes within our Owned Real Estate segment increaseddecreased by $1.0$3.2 million and $2.7 million, respectively, primarily due to (i) a decrease of $0.7 million inone-time deferred tax expense recognized on a foreign property during the prior year periods and tax benefits primarily associated with basis differencesrecognized on certain foreign properties and (ii) an increase of $0.2 million in current federal, foreign, and state franchise taxes due to higher taxable income on our domestic TRSs and foreign properties.

For the nine months ended September 30, 2017, we recognized a provision for income taxes of $6.7 million, compared to a benefit from income taxes of $6.8 million recorded during the same period in 2016, within our Owned Real Estate segment. During the nine months ended September 30, 2016, we recorded $19.7 million of deferred tax benefits associated with basis differences on certain foreign properties, primarily resulting from the impairment charges recorded in the period on certain international properties (Note 8). In addition, current federal, foreign, and state franchise taxes decreased by $1.1 million due to decreases in taxable income generated by our domestic TRSs and foreign properties.



W. P. Carey 9/30/2017 10-Q– 69


Gain on Sale of Real Estate, Net of Tax

Gain on sale of real estate, net of tax consists of gain on the sale of properties, net of tax that were disposed of during the three and nine months ended September 30, 2017 and 2016 (Note 15).

2017 — During the three and nine months ended September 30, 2017, we sold five properties, and 11 properties andyear periods as a parcel of vacant land, respectively, for net proceeds of $58.7 million and $102.5 million, respectively, and recognized a net gain on these sales, net of tax totaling $19.3 million and $22.7 million, respectively. In connection with the saleresult of a property in Malaysia in August 2017, and in accordance with ASC 830-30-40, Foreign Currency Matters, we reclassified $3.6 million of foreign currency translation losses from Accumulated other comprehensive loss to Gain on sale of real estate, net of tax (as a reduction to Gain on sale of real estate, net of tax), since the sale represented a disposal of our Malaysian investments (Note 13). One of the properties sold during the nine months ended September 30, 2017 was held for sale at December 31, 2016 (Note 4). In addition, in January 2017, we transferred ownership of two international properties and the related non-recourse mortgage loan, which had an aggregate asset carrying value of $31.3 million and an outstanding balance of $28.1 million (net of $3.8 million of cash held in escrow that was retained by the mortgage lender), respectively, on the dates of transfer, to the mortgage lender, resulting in a net loss of less than $0.1 million.court ruling.


2016 — During the three and nine months ended September 30, 2016, we sold three properties, and ten properties and a parcel of vacant land, respectively, for net proceeds of $192.0 million and $392.6 million, respectively, and recognized a net gain on these sales, net of tax totaling $37.4 million and $39.9 million, respectively, including amounts attributable to noncontrolling interests of $0.9 million for the nine months ended September 30, 2016. In addition, in April 2016, we transferred ownership of a vacant international property and the related non-recourse mortgage loan, which had a carrying value of $39.8 million and an outstanding balance of $60.9 million, respectively, on the date of transfer, to the mortgage lender, resulting in a net gain of $16.4 million. Also, in July 2016, a vacant domestic property with an asset carrying value of $13.7 million, which was encumbered by a $24.3 million mortgage loan (net of $2.6 million of cash held in escrow that was retained by the mortgage lender), was foreclosed upon by the mortgage lender, resulting in a net gain of $11.6 million.

Investment Management


We earn revenue as the advisor to the Managed Programs. For the periods presented, we acted as advisor to the following affiliated Managed Programs: CPA®:17 – Global, CPA®:CPA:18 – Global and CESH. The CWI 1 and CWI 2 CCIF (through September 10, 2017)Merger closed on April 13, 2020, and as a result, CWI 2 was renamed Watermark Lodging Trust, Inc., and CESH I (since Junefor which we provided certain services pursuant to a transition services agreement, which was terminated on October 13, 2021 (Note 3 2016)). On June 15, 2017, our Board approved a plan to exit all non-traded retail fundraising activities carried out by our wholly-owned broker-dealer subsidiary, Carey Financial, as of June 30, 2017.

We no longer raise capital for new or existing funds, but we currently expect to continue to manage all existing Managed Programsmanaging CPA:18 – Global and CESH and earn the various fees described below through the end of their respective natural life cyclescycles. Upon the expected completion of the Proposed Merger, we will no longer receive fees and distributions from CPA:18 – Global, and as a result, Investment Management earnings are expected to decline in future periods (Note 1). In August 2017,As of June 30, 2022, we resigned as the advisor to CCIF, and our advisory agreement with CCIF was terminated, effective asmanaged total assets of September 11, 2017. CCIF was included inapproximately $2.5 billion on behalf of the Managed Programs prior to our resignation as its advisor (Note 1).Programs.


Revenues

The following tables present other operating data that management finds useful in evaluating result of operations (dollars in millions):
 September 30, 2017 December 31, 2016
Total properties — Managed Programs627
 606
Assets under management — Managed Programs (a)
$13,244.8
 $12,874.8
Cumulative funds raised — CWI 2 offering (b) (c)
851.3
 616.3
Cumulative funds raised — CCIF offering (b) (d)
195.3
 125.1
Cumulative funds raised — CESH I offering (e)
139.7
 112.8
 Nine Months Ended September 30,
 2017 2016
Financings structured — Managed Programs$997.9
 $1,080.3
Investments structured — Managed Programs (f)
1,101.1
 1,047.8
Funds raised — CWI 2 offering (b) (c)
235.0
 288.8
Funds raised — CCIF offering (b) (d)
70.2
 89.2
Funds raised — CESH I offering (e)
26.9
 41.8
__________


W. P. Carey 9/30/2017 10-Q– 70


(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 fair value of the investment assets, plus cash, owned by CESH I. Amount as of December 31, 2016 also includes the fair value of the investment assets, plus cash, owned by CCIF.
(b)Excludes reinvested distributions through each entity’s distribution reinvestment plan.
(c)Reflects funds raised from CWI 2’s initial public offering, which commenced in February 2015. In connection with the end of active fundraising by Carey Financial on June 30, 2017, we facilitated the orderly processing of sales in the offering by CWI 2 through July 31, 2017, which then closed its offering on that date.
(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. In connection with the end of active fundraising by Carey Financial on June 30, 2017, we facilitated the orderly processing of sales in the offering by CESH I through July 31, 2017, which then closed its offering on that date.
(f)Includes acquisition-related costs.



W. P. Carey 9/30/2017 10-Q– 71


Below is a summary of comparative results oftable presents revenues within our Investment Management segment (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20222021Change20222021Change
Investment Management Revenues
Asset management and other revenue
CPA:18 – Global$3,047 $3,154 $(107)$6,105 $6,292 $(187)
CESH420 812 (392)782 1,628 (846)
3,467 3,966 (499)6,887 7,920 (1,033)
Reimbursable costs from affiliates
CPA:18 – Global1,001 641 360 1,774 1,289 485 
CESH142 231 (89)296 516 (220)
WLT— 96 (96)— 204 (204)
1,143 968 175 2,070 2,009 61 
$4,610 $4,934 $(324)$8,957 $9,929 $(972)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 Change 2017 2016 Change
Revenues           
Asset management revenue$17,938
 $15,978
 $1,960
 $53,271
 $45,596
 $7,675
Structuring revenue9,817
 12,301
 (2,484) 27,981
 30,990
 (3,009)
Reimbursable costs from affiliates6,211
 14,540
 (8,329) 45,390
 46,372
 (982)
Dealer manager fees105
 1,835
 (1,730) 4,430
 5,379
 (949)
Other advisory revenue99
 522
 (423) 896
 522
 374
 34,170
 45,176
 (11,006) 131,968
 128,859
 3,109
Operating Expenses           
Reimbursable costs from affiliates6,211
 14,540
 (8,329) 45,390
 46,372
 (982)
General and administrative6,002
 8,280
 (2,278) 25,878
 32,469
 (6,591)
Subadvisor fees5,206
 4,842
 364
 11,598
 10,010
 1,588
Stock-based compensation expense2,755
 2,784
 (29) 9,916
 10,648
 (732)
Restructuring and other compensation1,356
 —
 1,356
 9,074
 7,512
 1,562
Depreciation and amortization1,070
 1,062
 8
 2,838
 3,278
 (440)
Dealer manager fees and expenses462
 3,028
 (2,566) 6,544
 9,000
 (2,456)
Other expenses—
 —
 —
 —
 2,384
 (2,384)
 23,062
 34,536
 (11,474) 111,238
 121,673
 (10,435)
Other Income and Expenses           
Equity in earnings of equity method investments in the Managed Programs12,578
 13,573
 (995) 38,287
 38,658
 (371)
Other income and (expenses)349
 1,857
 (1,508) 1,280
 1,717
 (437)
 12,927
 15,430
 (2,503) 39,567
 40,375
 (808)
Income before income taxes24,035
 26,070
 (2,035) 60,297
 47,561
 12,736
(Provision for) benefit from income taxes(249) (2,624) 2,375
 3,793
 (2,254) 6,047
Net Income from Investment Management Attributable to W. P. Carey$23,786
 $23,446
 $340
 $64,090
 $45,307
 $18,783


Asset Management and Other Revenue
 
We earnAsset management and other revenue includes asset management revenue, structuring revenue, and other advisory revenue. During the periods presented, we earned asset management revenue from the Managed REITs(i) CPA:18 – Global based on the value of theirits real estate-related and lodging-related assets under management. We also earn asset management revenue fromand (ii) CESH I based on its gross assets under management at fair value. We also earned asset management revenue from CCIF based on the average of its gross assets at fair value prior to our resignation as the advisor to CCIF in the third quarter of 2017. Asset management revenue may increase or decrease depending upon (i) increaseschanges in the Managed Programs’ asset bases as a result of new investments; (ii) decreases in the Managed Programs’ asset bases as a result ofpurchases, sales, of investments; and (iii) increases or decreaseschanges in the appraised value of the real estate-related and lodging-related assets in thetheir investment portfolios of the Managed Programs. Prior to our resignation as the advisor to CCIF in the third quarter of 2017, asset management revenue also increased or decreased depending on increases or decreases in the fair value of CCIF’s investment portfolio.portfolios. For 2017,2022, we receive asset management fees from the Managed REITs(i) CPA:18 – Global in shares of theirits common stock and from CESH I in cash. Prior to our resignationthrough February 28, 2022; effective as the advisor to CCIF in the third quarter of 2017,March 1, 2022, we receivedreceive asset management fees from CCIF in cash.

For the three and nine months ended September 30, 2017 as compared to the same periods in 2016, asset management revenue increased by $2.0 million and $7.7 million, respectively, as a result of the growth in assets under management due to investment volume after September 30, 2016. Asset management revenue increased by $0.9 million and $3.2 million, respectively, from CWI 2, $0.5 million and $3.1 million, respectively, from CCIF, $0.4 million and $1.0 million, respectively, from CPA®:CPA:18 – Global $0.3 millionin cash in light of the Proposed Merger (Note 3), and $0.7 million, respectively, from(ii) CESH I, and less than $0.1 million and $0.2 million, respectively, from CWI 1. These increases were partially offset by decreases of $0.1 million and $0.4 million, respectively, in asset management revenue from CPA®:17 – Global, which sold 34 self-storage properties during 2016, resulting in a decrease in assets under management for that fund.cash.



W. P. Carey 9/30/2017 10-Q– 72


Structuring Revenue


We earn structuring and other advisory revenue when we structure new investments and debt placement transactions for the Managed Programs. Structuring revenue is dependent on investment activity, which is subject to significant period-to-period variation.

For the three months ended September 30, 2017 as compared to the same period in 2016, structuring revenue decreased by $2.5 million. Structuring revenue from CWI 2 and CPA®:17 – Global decreased by $3.6 million and $1.1 million, respectively, as a result of lower investment and debt placement volume during the current year period. Structuring revenue for the three months ended September 30, 2017 also includes a $2.6 million adjustment related to a development deal for one of the Managed Programs, in accordance with ASC 605, Revenue Recognition. These decreases were partially offset by an increase of $3.5 million in structuring revenue from CWI 1 and $1.1 million of structuring revenue recognized during the current year period from CESH I.

For the nine months ended September 30, 2017 as compared to the same period in 2016, structuring revenue decreased by $3.0 million. Structuring revenue from CWI 2 and CPA®:18 – Global decreased by $5.4 million and $4.2 million, respectively, as a result of lower investment and debt placement volume during the current year period. Structuring revenue for the nine months ended September 30, 2017 also includes a $2.6 million adjustment related to a development deal for one of the Managed Programs, in accordance with ASC 605, Revenue Recognition. These decreases were partially offset by $5.5 million of structuring revenue recognized during the current year period from CESH I and increases of $3.1 million and $0.7 million in structuring revenue from CPA®:17 – Global and CWI 1, respectively.

Reimbursable Costs from Affiliates
Reimbursable costs from affiliates represent costs incurred by us on behalf of the Managed Programs. During their respective offering periods, these costs consisted primarily of broker-dealer commissions, distribution and shareholder servicing fees, and marketing and personnel costs, which were reimbursed by the Managed Programs and were reflected as a component of both revenues and expenses. As a result of our exit from all non-traded retail fundraising activities, we will no longer incur offering-related expenses, including broker-dealer commissions, distribution and shareholder servicing fees, and marketing costs, on behalf of the Managed Programs.
For the three months ended September 30, 2017 as compared to the same period in 2016, reimbursable costs from affiliates decreased by $8.3 million, primarily due to a decrease of $5.2 million of distribution and shareholder servicing fees and commissions paid to broker-dealers related to the sale of the CCIF Feeder Funds’ shares, $2.0 million of commissions paid to broker-dealers related to CESH I’s private placement, and $1.4 million in distribution and shareholder servicing fees and commissions paid to broker-dealers related to CWI 2’s initial public offering, in each case due to our exit from all non-traded retail fundraising during the current year period, as described above. These decreases were partially offset by an increase of $0.4 million in overhead reimbursed to us by the Managed Programs.

For the nine months ended September 30, 2017 as compared to the same period in 2016, reimbursable costs from affiliates decreased by $1.0 million, primarily due to a decrease of $16.8 million of distribution and shareholder servicing fees and commissions paid to broker-dealers related to the sale of the CCIF Feeder Funds’ shares. This decrease was partially offset by an increase of $15.2 million of distribution and shareholder servicing fees and commissions paid to broker-dealers related to CWI 2’s initial public offering, and an increase of $0.3 million in overhead reimbursed to us by the Managed Programs.

Dealer Manager Fees
As discussed in Note 3, we earned a dealer manager fee, depending on the class of common stock sold, of $0.30 or $0.26 per share sold, for the Class A common stock and Class T common stock, respectively, in connection with CWI 2’s initial public offering, through March 31, 2017, when CWI 2 suspended its offering in order to determine updated estimated NAVs as of December 31, 2016. As a result, CWI 2 had new offering prices and new dealer manager fees of $0.36 and $0.31 per Class A and Class T Shares, respectively, for its offering through its closing on July 31, 2017. We received dealer manager fees of 2.50% - 3.0% based on the selling price of each share sold in connection with the offerings of the CCIF Feeder Funds, which began in the fourth quarter of 2015. CCIF 2016 T’s offering closed on April 28, 2017. We also received dealer manager fees of up to 3.0% of gross offering proceeds based on the selling price of each limited partnership unit sold in connection with CESH I’s private placement, which commenced in July 2016 and closed in July 2017.



W. P. Carey 9/30/2017 10-Q– 73


We re-allowed a portion of the dealer manager fees to selected dealers in the offerings and reflected those amounts as Dealer manager fees and expenses in the consolidated financial statements. As discussed above, on June 15, 2017, our Board approved a plan to exit all non-traded retail fundraising activities as of June 30, 2017, and as a result,Since we no longer receive dealer manager fees following the completion of those fundraising activities on July 31, 2017.

For the threeraise capital for new or existing funds, structuring and nine months ended September 30, 2017 as compared to the same periods in 2016, dealer manager fees decreased due to our exit from all non-traded retail fundraising activities.

Other Advisory Revenue

Under the limited partnership agreement we have with CESH I, we paid all organization and offering costs on behalf of CESH I, and instead of being reimbursed by CESH I on a dollar-for-dollar basis for those costs, we received limited partnership units of CESH I equal to 2.5% of its gross offering proceeds through the closing of its offering on July 31, 2017.

For the three months ended September 30, 2017 as compared to the same period in 2016, other advisory revenue decreased by $0.4 million, primarily duehas recently been and is expected to the completion of CESH I fundraising in July 2017 (Note 2).be insignificant going forward.

For the nine months ended September 30, 2017 as compared to the same period in 2016, other advisory revenue increased by $0.4 million, primarily due to the limited partnership units of CESH I received in connection with CESH I’s private placement, which commenced in July 2016 and closed in July 2017 (Note 2).

General and Administrative

Beginning with the third quarter of 2017, personnel and rent expenses included within general and administrative expenses that are recorded by our Investment Management segment will be allocated based on time incurred by our personnel for the Owned Real Estate and Investment Management segments. All other overhead costs are charged to our Owned Real Estate segment based on the trailing 12-month reported revenues of the Managed Programs and us.

As discussed in Note 3, certain personnel costs and overhead costs are charged to the CPA® REITs based on the trailing 12-month reported revenues of the Managed Programs and us. We allocate certain personnel and overhead costs to the CWI REITs based on the time incurred by our personnel. We allocate certain personnel costs based on the time incurred by our personnel to CESH I and, prior to our resignation as the advisor to CCIF in the third quarter of 2017, to the Managed BDCs.

For the three and nine months ended September 30, 2017 as compared to the same periods in 2016, general and administrative expenses in our Investment Management segment, which excludes restructuring and other compensation expenses as described below, decreased by $2.3 million and $6.6 million, respectively, primarily due to an overall decline in compensation expense as a result of the reduction in headcount, including the RIF and the impact of our exit from all active non-traded retail fundraising activities as of June 30, 2017, and other cost savings initiatives implemented during 2016 as well as the change in methodology for allocation of expenses between our Owned Real Estate and Investment Management segments (Note 1).

Subadvisor Fees

As discussed in Note 3, we earn investment management revenue from CWI 1, CWI 2, and CPA®:18 – Global, and, prior to our resignation as advisor, from CCIF. Pursuant to the terms of the subadvisory agreements we have with the third-party subadvisors in connection with both CWI 1 and CWI 2, we pay a subadvisory fee equal to 20% of the amount of fees paid to us by CWI 1 and 25% of the amount of fees paid to us by CWI 2, including but not limited to: acquisition fees, asset management fees, loan refinancing fees, property management fees, and subordinated disposition fees, each as defined in the advisory agreements we have with each of CWI 1 and CWI 2. We also pay to each subadvisor 20% and 25% of the net proceeds resulting from any sale, financing, or recapitalization or sale of securities of CWI 1 and CWI 2, respectively, by us, the advisor. In addition, in connection with the multi-family properties acquired on behalf of CPA®:18 – Global, we entered into agreements with third-party advisors for the day-to-day management of the properties, for which we pay 100% of asset management fees paid to us by CPA®:18 – Global. Pursuant to the terms of the subadvisory agreement we had with the third-party subadvisor in connection with CCIF (prior to our resignation as the advisor to CCIF in the third quarter of 2017), we paid a subadvisory fee equal to 50% of the asset management fees and organization and offering costs paid to us by CCIF.




W. P. Carey 6/30/2022 10-Q– 57

W. P. Carey 9/30/2017 10-Q– 74



For the three and nine months ended September 30, 2017 as compared to the same periods in 2016, subadvisor fees increased by $0.4 million and $1.6 million, respectively, primarily due to increases of $0.7 million and $0.2 million, respectively, as a result of higher fees earned from CWI 1 and increases of $0.2 million and $1.5 million, respectively, as a result of higher fees earned from CCIF, each of which paid higher asset management fees to us during the current year periods as compared to the prior year periods. For the three and nine months ended September 30, 2017 as compared to the same periods in 2016, these increases were partially offset by decreases of $0.5 million and $0.2 million, respectively, as a result of lower fees earned from CWI 2 due to lower investment and debt placement volume during the current year periods.

Stock-based Compensation Expense

Beginning with the third quarter of 2017, stock-based compensation expense is being allocated to our Owned Real Estate and Investment Management segments based on time incurred by our personnel for those segments.

For the nine months ended September 30, 2017 as compared to the same period in 2016, stock-based compensation expense allocated to our Investment Management segment decreased by $0.7 million primarily due to the reduction in RSUs and PSUs outstanding as a result of a reduction in headcount related to our exit from all non-traded retail fundraising activities as of June 30, 2017 (Note 12).

Restructuring and Other Compensation

For the three and nine months ended September 30, 2017, we recorded total restructuring expenses of $1.4 million and $9.1 million, respectively, related to our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017. These expenses, all of which were allocated to the Investment Management segment, consist primarily of severance costs (Note 1, Note 12).

For the nine months ended September 30, 2016, we recorded total restructuring and other compensation expenses of $11.9 million, of which $7.5 million was allocated to our Investment Management segment. Included in the total was $5.1 million of severance related to the employment agreement with our former chief executive officer and $6.8 million related to severance, stock-based compensation, and other costs incurred as part of the RIF during that period (Note 12).

Other Income and Expenses


For nine months ended September 30, 2016, we incurred advisory expenses and professional fees of $2.4 million within our Investment Management segment in connection with the formal strategic review that we completed in May 2016.



W. P. Carey 9/30/2017 10-Q– 75


Equity in Earnings offrom Equity Method Investments in the Managed Programs


Equity in earnings ofEarnings from our equity method investments in the Managed Programs is recognized in accordance with the investment agreement for each of our equity method investments. In addition, we are entitled to receive distributions of Available Cash (Note 3) from the operating partnerships of each of the Managed REITs. The net income of our unconsolidated investments fluctuates based on the timing of transactions, such as new leases and property sales, as well as the level of impairment charges. Equity in earnings of our equity method investment in CCIF fluctuated based on changes in the fair value of investments owned by CCIF. Following our resignation as the advisor to CCIF, effective September 11, 2017, earnings from our cost method investment in CCIF are included in Other income and (expenses) in the consolidated financial statements (Note 7). The following table presents the details of our Equity in earnings offrom equity method investments in the Managed Programs (Note 7) (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Equity in earnings of equity method investments in the Managed Programs:       
Equity in earnings of equity method investments in the Managed Programs (a)
$531
 $2,697
 $3,719
 $6,640
Distributions of Available Cash: (b)
       
CPA®:17 – Global
5,459
 5,276
 19,240
 17,803
CPA®:18 – Global
2,196
 1,662
 6,057
 5,319
CWI 12,498
 2,838
 5,743
 6,931
CWI 21,894
 1,100
 3,528
 1,965
Equity in earnings of equity method investments in the Managed Programs$12,578
 $13,573
 $38,287
 $38,658
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Earnings from equity method investments in the Managed Programs:
Distributions of Available Cash from CPA:18 – Global (a)
$2,814 $1,787 $5,401 $3,326 
Earnings (losses) from equity method investments in the Managed Programs (b)
58 (89)3,030 (242)
Earnings from equity method investments in the Managed Programs$2,872 $1,698 $8,431 $3,084 
__________
(a)
Decreases for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 were primarily due to decreases of $1.1 million and $3.0 million, respectively, from our investment in shares of common stock of CPA®:17 – Global, which recognized significant gains on the sale of real estate during each of the prior year periods. In addition, we recognized equity in earnings of our equity method investment in CCIF of $1.1 million during the three months ended September 30, 2016. We did not recognize any such earnings during the three months ended September 30, 2017.
(b)
We are entitled to receive distributions of our share of earnings up to 10% of the Available Cash from the operating partnerships of each of the Managed REITs, as defined in their respective operating partnership agreements (Note 3). Distributions of Available Cash received and earned from the Managed REITs increased in the aggregate, primarily as a result of new investments entered into by the Managed REITs during 2017 and 2016.

(a)We are entitled to receive distributions of up to 10% of the Available Cash from the operating partnership of CPA:18 – Global, as defined in its operating partnership agreement (Note 3). Distributions of Available Cash received and earned from CPA:18 – Global fluctuate based on the timing of certain events, including acquisitions and dispositions.
Other Income and (Expenses)

For both(b)Increase for the three and ninesix months ended SeptemberJune 30, 2016, we recognized a gain of $1.2 million in our Investment Management segment on the deconsolidation of CESH I (Note 2).

(Provision for) Benefit from Income Taxes

For the three months ended September 30, 20172022 as compared to the same period in 2016, provision for income taxes within our Investment Management segment decreased by $2.4 million, primarily due to the impact of lower pre-tax income recognized by our TRSs and a deferred windfall tax benefit of $0.6 million recognized during the current year period as a result of the adoption of ASU 2016-09 during the first quarter of 2017, under which such benefits are now reflected as a reduction to provision for income taxes (Note 2).

For the nine months ended September 30, 2017, we recorded a benefit from income taxes of $3.8 million, compared to a provision for income taxes of $2.3 million recognized during the same period in 2016, within our Investment Management segment. We recorded a benefit from income taxes during the current year period primarily due to a deferred windfall tax benefit of $3.6 million as a result of the adoption of ASU 2016-09 during the first quarter of 2017, under which such benefits are now reflected as a reduction to provision for income taxes (Note 2). We recognized a provision for income taxes during the prior year period primarily2021 was due to an out-of-period adjustment recorded during the period (Note 2).increase of $3.3 million from our investment in shares of CPA:18 – Global.



W. P. Carey 9/30/2017 10-Q– 76



Liquidity and Capital Resources


Sources and Uses of Cash During the Period
 
We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund distributionsdividends to stockholders. Our cash flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of our equity and debt offerings; the timing of purchases and sales of real estate; the timing of the receipt of proceeds from, and the repayment of mortgage loans and receipt of lease revenues; the receipttiming and amount of other lease-related payments; the annual installmenttiming of deferred acquisition revenue and interest thereon from the CPA® REITs;settlement of foreign currency transactions; changes in foreign currency exchange rates; the receipt of the asset management fees in either shares of the common stock or limited partnership units of the Managed ProgramsCPA:18 – Global or cash; the timing and characterization of distributions from equity investments in the Managed Programsmethod investments; and real estate; the receipt of distributions of Available Cash from the Managed REITs; and changes in foreign currency exchange rates.CPA:18 – Global. Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, unusedavailable capacity under our Senior Unsecured Credit Facility, proceeds from dispositions of properties, proceeds of mortgage loans, net contributions from noncontrolling interests, and the issuance of additional debt or equity securities, such as salesissuances of ourcommon stock through our Equity Forwards and ATM program,Program (Note 12), in order to meet these needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.


Operating Activities — Net cash provided by operating activities increased by $4.4$48.1 million during the ninesix months ended SeptemberJune 30, 20172022 as compared to the same period in 2016,2021, primarily due to an increase in cash flow generated from net investment activity and scheduled rent increases at existing properties, acquired during 2016higher lease termination and 2017, a decrease in interest expense,other income, and lower general and administrative expenses in the current year period. These increases were partially offset by lease termination income received in connection with the sale of a property during the prior year period and a decrease in cash flow as a result of property dispositions during 2016 and 2017.interest expense.

Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales) and capitalized property-related costs.

Duringfunding for build-to-suit activities and other capital expenditures on real estate. In addition to these types of transactions, during the ninesix months ended SeptemberJune 30, 2017,2022, we used $123.5$26.0 million to fund short-term loans to the Managed Programs, (Note 3), while $229.7$10.0 million of such loans made by us in prior periods were repaid during the current year period. We sold 11 properties and a parcel of vacant land for net proceeds of $102.5 million. We used $36.7 million primarily to fund expansions on our existing properties. In addition, we used $10.8 million to invest in capital expenditures for owned real estate and $6.0 million to acquire an investment (Note 43). We also received $6.5$8.1 million in distributions from equity investments in the Managed Programs and real estate in excess of cumulative equity income.method investments.


Financing Activities — During the nine months ended September 30, 2017, grossOur financing activities are generally comprised of borrowings under our Senior Unsecured Credit Facility were $1.2 billion and repayments were $1.6 billion, which included the impact of the amendment and restatement of our Senior Unsecured Credit Facility in February 2017 (Note 10). We received the equivalent of $530.5 million in net proceeds from the issuance of the 2.25% Senior Notes in January 2017, which we used primarily to pay down the outstanding balance onunder our Unsecured Revolving Credit Facility, at that time (Note 10). In connection with the issuances of these notes and the amendment and restatement our Senior Unsecured Credit Facility in February 2017 (Note 10), we incurred financing costs totaling $12.7 million. We also made scheduledNotes, payments and prepaidprepayments of non-recourse mortgage loan principalloans, and payments of $303.5 million and $157.4 million, respectively. Additionally, we paid distributionsdividends to stockholders totaling $322.4 million related to the fourth quarter of 2016, the first quarter of 2017, and the second quarter of 2017; and also paid distributions of $16.9 million to affiliates that hold noncontrolling interests in various entities with us. We received contributions from noncontrolling interests totaling $90.5 million, primarily from an affiliate in connection with the repayment at maturity of mortgage loans encumbering the Hellweg 2 Portfolio (Note 10).stockholders. In addition to these types of transactions, during the six months ended June 30, 2022, we received $22.8$218.1 million in net proceeds from the issuance of shares under our prior ATM programProgram (Note 1312).




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W. P. Carey 9/30/2017 10-Q– 77



Summary of Financing
 
The table below summarizes our Senior Unsecured Notes, our non-recourse mortgages, our Unsecured Senior Notes, and our Senior Unsecured Credit Facility (dollars in thousands):
September 30, 2017 December 31, 2016June 30, 2022December 31, 2021
Carrying Value   Carrying Value
Fixed rate:   Fixed rate:
Unsecured Senior Notes (a)
$2,455,383
 $1,807,200
Senior Unsecured Notes (a)
Senior Unsecured Notes (a)
$5,471,066 $5,701,913 
Non-recourse mortgages (a)
985,118
 1,406,222
Non-recourse mortgages (a)
211,973 235,898 
3,440,501
 3,213,422
5,683,039 5,937,811 
Variable rate:   Variable rate:
Unsecured Term Loans (a)
382,191
 249,978
Unsecured Term Loans (a)
548,287 310,583 
Unsecured Revolving Credit Facility224,213
 676,715
Unsecured Revolving Credit Facility417,455 410,596 
Non-recourse mortgages (a):
   
Non-recourse mortgages (a):
Amount subject to interest rate swaps and cap149,824
 158,765
Amount subject to interest rate swaps and capsAmount subject to interest rate swaps and caps69,250 79,055 
Floating interest rate mortgage loans118,109
 141,934
Floating interest rate mortgage loans47,597 53,571 
874,337
 1,227,392
1,082,589 853,805 
$4,314,838
 $4,440,814
$6,765,628 $6,791,616 
   
Percent of Total Debt   Percent of Total Debt
Fixed rate80% 72%Fixed rate84 %87 %
Variable rate20% 28%Variable rate16 %13 %
100% 100%100 %100 %
Weighted-Average Interest Rate at End of Period   Weighted-Average Interest Rate at End of Period
Fixed rate3.9% 4.5%Fixed rate2.7 %2.7 %
Variable rate (b)
1.8% 1.9%
Variable rate (b)
1.6 %1.1 %
Total debtTotal debt2.5 %2.5 %
 
__________
(a)Aggregate debt balance includes unamortized deferred financing costs totaling $16.2 million and $13.4 million as of September 30, 2017 and December 31, 2016, respectively, and unamortized discount totaling $12.9 million and $8.0 million as of September 30, 2017 and December 31, 2016, respectively.
(b)The impact of our derivative instruments is reflected in the weighted-average interest rates.

(a)Aggregate debt balance includes unamortized discount, net, totaling $28.2 million and $30.9 million as of June 30, 2022 and December 31, 2021, respectively, and unamortized deferred financing costs totaling $25.7 million and $28.8 million as of June 30, 2022 and December 31, 2021, respectively.
(b)The impact of our interest rate swaps and caps is reflected in the weighted-average interest rates.

Cash Resources
 
At SeptemberJune 30, 2017,2022, our cash resources consisted of the following:
 
•cash and cash equivalents totaling $169.8$103.6 million. Of this amount, $84.3$65.1 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 unusedavailable capacity of $1.3approximately $1.4 billion excluding(net of amounts reserved for outstandingstandby letters of credit;credit totaling $0.6 million);
•available proceeds under our Equity Forwards of approximately $285.0 million (based on 3,925,000 remaining shares outstanding and a net offering price of $72.61 per share as of June 30, 2022);
•available proceeds under our ATM Forwards of approximately $301.0 million (based on 3,674,187 shares outstanding and a weighted-average net offering price of $81.93 per share as of June 30, 2022); and
•unleveraged properties that had an aggregate asset carrying value of $4.4approximately $12.4 billion at SeptemberJune 30, 2017,2022, although there can be no assurance that we would be able to obtain financing for these properties.


We
W. P. Carey 6/30/2022 10-Q– 59


Historically, we have also accessaccessed the capital markets when necessary through additional debt (denominated in both U.S. dollars and euros) and equity offerings, such asofferings. During the €500.0 million of 2.25% Senior Notes thatsix months ended June 30, 2022, we issued in January 2017 (Note 10) and our ATM program. During the three and nine months ended September 30, 2017, we issued 15,500 and 345,2532,740,295 shares respectively, of our common stock under the currentour prior ATM program at a weighted-average price of $67.05 and $67.78 per share, respectively,Program for net proceeds of $0.9$218.1 million and $22.8 million, respectively. During the three and nine months ended September 30, 2016, we issued 968,535 and 1,249,836 shares, respectively, of our common stock under the prior ATM program at a weighted-average price of $68.54 and $68.52 per share,


W. P. Carey 9/30/2017 10-Q– 78


respectively, for net proceeds of $65.2 million and $84.1 million, respectively.(Note 12). As of SeptemberJune 30, 2017, $376.62022, we had approximately $285.0 million remainedof available for issuanceproceeds under our currentEquity Forwards (Note 12). As of June 30, 2022, we had approximately $301.0 million of available proceeds under our ATM programForwards (Note 1312).
Senior Unsecured Credit Facility
Our Senior Unsecured Credit Facility is more fully described in Note 10. A summary of our Senior Unsecured Credit Facility is provided below (in thousands):
 September 30, 2017 December 31, 2016
 Outstanding Balance Maximum Available Outstanding Balance Maximum Available
Unsecured Term Loans, net (a)
$383,695
 $383,695
 $250,000
 $250,000
Unsecured Revolving Credit Facility224,213
 1,500,000
 676,715
 1,500,000
__________
(a)Outstanding balance excludes unamortized discount of $1.3 million at September 30, 2017. Outstanding balance also excludes unamortized deferred financing costs of $0.2 million and less than $0.1 million at September 30, 2017 and December 31, 2016, respectively.


Our cash resources can be used for working capital needs and other commitments and may be used for future investments.


Cash Requirements and Liquidity
 
As of June 30, 2022, we had (i) $103.6 million of cash and cash equivalents, (ii) approximately $1.4 billion of available capacity under our Unsecured Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $0.6 million), (iii) available proceeds under our Equity Forwards of approximately $285.0 million (based on 3,925,000 remaining shares outstanding and a net offering price of $72.61 per share as of that date), and (iv) available proceeds under our ATM Forwards of approximately $301.0 million (based on 3,674,187 remaining shares outstanding and a weighted-average net offering price of $81.93 per share as of that date). Our Senior Unsecured Credit Facility includes a $1.8 billion Unsecured Revolving Credit Facility and Unsecured Term Loans outstanding totaling $548.3 million as of June 30, 2022 (Note 10), and is scheduled to mature on February 20, 2025. As of June 30, 2022, scheduled debt principal payments total $30.7 million through December 31, 2022 and $209.0 million through December 31, 2023, and our Senior Unsecured Notes do not start to mature until April 2024 (Note 10).

During the next 12 months following June 30, 2022 and thereafter, we expect that our significant cash requirements will include paymentsinclude:

•paying dividends to acquireour stockholders;
•funding acquisitions of new investments (Note 4);
•funding future capital commitments such as build-to-suit projects, paying distributions toand tenant improvement allowances (Note 4);
•making scheduled principal and balloon payments on our stockholders and to our affiliates that hold noncontrolling interests in entities we control, debt obligations (Note 10);
•making scheduled interest payments on our debt obligations (future interest payments total $798.3 million, with $171.6 million due during the Unsecured Senior Notes, scheduled mortgage loan principal payments, including mortgage balloon paymentsnext 12 months; interest on our consolidated mortgage loanunhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and prepayments of our consolidated mortgage loan obligations, as well as balances outstanding at June 30, 2022);
•cash consideration and costs related to the Proposed Merger (Note 1); and
•other normal recurring operating expenses.


We expect to fund future investments, build-to-suit commitments, any capital expenditures on existing properties, scheduled debt maturities on non-recourse mortgage loans and any loans to certain of the Managed Programs (Note 3)these cash requirements through cash generated from operations, cash received from dispositions of properties, the use of our cash reserves or unused amounts on our Unsecured Revolving Credit Facility (as described above), issuances of sharescommon stock through our ATM program,Equity Forwards and/or ATM Program (Note 12), and potential issuances of additional debt or equity or debt offerings.securities. We may also choose to pursue prepayments of certain of our non-recourse mortgage loan obligations, depending on our capital needs and market conditions at that time.


Our liquidity wouldcould be adversely affected by unanticipated costs, and greater-than-anticipated operating expenses.expenses, and the adverse impact of the continuing COVID-19 pandemic. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash from operations and from equity distributions in excess of equity income in real estate to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, the proceeds of mortgage loans, unusedavailable capacity onunder our Unsecured Revolving Credit Facility, net contributions from noncontrolling interests,mortgage loan proceeds, and the issuance of additional debt or equity securities such as through our ATM program, to meet these needs.



W. P. Carey 9/30/2017 10-Q– 79


Off-Balance Sheet Arrangements The extent to which the COVID-19 pandemic impacts our liquidity and Contractual Obligations
debt covenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The table below summarizespotential impact of the COVID-19 pandemic on our debt, off-balance sheet arrangements,tenants and other contractual obligations (primarily our capital commitments and lease obligations) at September 30, 2017 and theproperties could also have a material adverse effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands):debt covenants.

 Total 
Less than
1 year
 1-3 years 3-5 years 
More than
5 years
Unsecured Senior Notes — principal (a) (b)
$2,480,600
 $—
 $—
 $—
 $2,480,600
Non-recourse mortgages — principal (a)
1,255,414
 280,392
 295,517
 322,311
 357,194
Senior Unsecured Credit Facility — principal (a) (c)
607,908
 —
 —
 607,908
 —
Interest on borrowings (d)
826,420
 147,478
 270,397
 223,095
 185,450
Operating and other lease commitments (e)
161,067
 8,439
 17,015
 9,536
 126,077
Capital commitments and tenant expansion allowances (f)
139,654
 81,807
 53,748
 586
 3,513
Restructuring and other compensation commitments (g)
4,829
 4,532
 297
 —
 —
 $5,475,892
 $522,648
 $636,974
 $1,163,436
 $3,152,834
__________
(a)
Excludes unamortized deferred financing costs totaling $16.2 million, the unamortized discount on the Unsecured Senior Notes of $10.2 million in aggregate, the unamortized discount on the Unsecured Term Loans of $1.3 million, and the unamortized fair market value adjustment of $1.4 million resulting from the assumption of property-level debt in connection with both the CPA®:15 Merger and the CPA®:16 Merger (Note 10).
(b)Our Unsecured Senior Notes are scheduled to mature from 2023 through 2026.
(c)Our Unsecured Revolving Credit Facility is scheduled to mature on February 22, 2021 unless otherwise extended pursuant to its terms. Our Unsecured Term Loans are scheduled to mature on February 22, 2022.
(d)Interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at September 30, 2017.
(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. Pursuant to their respective advisory agreements with us, we are reimbursed by the Managed Programs for their share of overhead costs, which includes a portion of those future minimum rent amounts. Our operating lease commitments are presented net of $11.3 million, based on the allocation percentages as of September 30, 2017, which we estimate the Managed Programs will reimburse us for in full (Note 3).
(f)Capital commitments include (i) $109.6 million related to build-to-suit expansions and (ii) $30.1 million related to unfunded tenant improvements, including certain discretionary commitments.
(g)
Represents severance-related obligations to our former chief executive officer and other employees (Note 12).
Amounts in the tableCertain amounts disclosed above that relate to our foreign operations are based on the applicable foreign currency exchange rate of the local currencies at SeptemberJune 30, 2017, which consisted primarily of the euro. At September 30, 2017, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.2022.


W. P. Carey 6/30/2022 10-Q– 60


Supplemental Financial Measures


In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use Funds from Operations or FFO,(“FFO”) and AFFO, which are non-GAAP measures defined by our management. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.


Funds from Operations and Adjusted Funds from Operations
 
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”), or NAREIT, an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the


W. P. Carey 9/30/2017 10-Q– 80


REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP.
 
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revisedrestated in February 2004.December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above.


We also modify the NAREIT computation of FFO to include other adjustments toadjust GAAP net income to adjust for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rents, stockrent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on loans receivable and direct financing leases, stock-based compensation, gains or losses from extinguishmentnon-cash environmental accretion expense, amortization of discounts and premiums on debt, and deconsolidationamortization of subsidiaries, and unrealized foreign currency exchange gains and losses.deferred financing costs. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as certain lease termination income, restructuringgains or losses from extinguishment of debt and other compensation-related expenses resulting from a reduction in headcountmerger and employee severance arrangements, and other expenses (which includes expenses related to the formal strategic review that we completed in May 2016 and accruals for estimated one-time legal settlement expenses).acquisition expenses. We also exclude realized and unrealized gains/losses on foreign currency exchange transactionsrate movements (other than those realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision makingdecision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs whichthat are currently not engaged in acquisitions, mergers, and restructuring, which are not part of our normal business operations. AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.


We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net earningsincome computed under GAAP, or as alternatives to net cash fromprovided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs.




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Consolidated FFO and AFFO were as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income attributable to W. P. Carey$127,678 $120,245 $284,673 $171,879 
Adjustments:
Depreciation and amortization of real property114,333 112,997 228,979 222,201 
Gain on sale of real estate, net(31,119)(19,840)(42,367)(29,212)
Impairment charges6,206 — 26,385 — 
Proportionate share of adjustments to earnings from equity method investments (a) (b)
2,934 3,434 10,617 13,740 
Proportionate share of adjustments for noncontrolling interests (c)
(4)(4)(8)(8)
Total adjustments92,350 96,587 223,606 206,721 
FFO (as defined by NAREIT) attributable to W. P. Carey220,028 216,832 508,279 378,600 
Adjustments:
Other (gains) and losses (d)
21,746 (7,545)(13,999)33,643 
Straight-line and other leasing and financing adjustments(14,492)(10,313)(25,339)(19,064)
Above- and below-market rent intangible lease amortization, net10,548 14,384 21,552 26,499 
Stock-based compensation9,758 9,048 17,591 14,429 
Amortization of deferred financing costs3,147 3,447 6,275 6,860 
Merger and other expenses (e)
1,984 (2,599)(338)(3,075)
Other amortization and non-cash items530 563 1,082 592 
Tax (benefit) expense — deferred and other(355)217 (1,597)(3,170)
Proportionate share of adjustments to earnings from equity method investments (b)
1,486 4,650 (295)9,861 
Proportionate share of adjustments for noncontrolling interests (c)
(6)(8)(11)(13)
Total adjustments34,346 11,844 4,921 66,562 
AFFO attributable to W. P. Carey$254,374 $228,676 $513,200 $445,162 
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey$220,028 $216,832 $508,279 $378,600 
AFFO attributable to W. P. Carey$254,374 $228,676 $513,200 $445,162 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income attributable to W. P. Carey$80,278
 $110,943
 $202,080
 $220,043
Adjustments:       
Depreciation and amortization of real property62,621
 61,396
 185,439
 209,449
Gain on sale of real estate, net(19,257) (49,126) (22,732) (68,070)
Impairment charges—
 14,441
 —
 49,870
Proportionate share of adjustments for noncontrolling interests to arrive at FFO(2,692) (3,254) (7,795) (8,541)
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO866
 1,354
 4,416
 3,994
Total adjustments41,538
 24,811
 159,328
 186,702
FFO attributable to W. P. Carey (as defined by NAREIT)121,816
 135,754
 361,408
 406,745
Adjustments:       
Above- and below-market rent intangible lease amortization, net (a)
12,459
 12,564
 37,273
 23,851
Other amortization and non-cash items (b) (c)
6,208
 (4,897) 14,995
 (7,695)
Stock-based compensation4,635
 4,356
 14,649
 14,964
Straight-line and other rent adjustments (d)
(3,212) (5,116) (9,677) (34,262)
Amortization of deferred financing costs2,184
 1,007
 6,126
 2,271
Loss on extinguishment of debt1,566
 2,072
 35
 3,885
Restructuring and other compensation (e)
1,356
 —
 9,074
 11,925
Tax benefit — deferred(1,234) (2,999) (8,167) (22,522)
Realized (gains) losses on foreign currency(449) 1,559
 (424) 2,569
Other expenses (f) (g)
65
 —
 1,138
 5,359
Allowance for credit losses—
 —
 —
 7,064
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO3,064
 261
 5,592
 741
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO(216) (90) (1,105) 1,278
Total adjustments26,426
 8,717
 69,509
 9,428
AFFO attributable to W. P. Carey$148,242
 $144,471
 $430,917
 $416,173
        
Summary       
FFO attributable to W. P. Carey (as defined by NAREIT)$121,816
 $135,754
 $361,408
 $406,745
AFFO attributable to W. P. Carey$148,242
 $144,471
 $430,917
 $416,173



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FFO and AFFO from Owned Real Estate were as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income from Real Estate attributable to W. P. Carey$123,228 $114,687 $270,086 $159,274 
Adjustments:
Depreciation and amortization of real property114,333 112,997 228,979 222,201 
Gain on sale of real estate, net(31,119)(19,840)(42,367)(29,212)
Impairment charges6,206 — 26,385 — 
Proportionate share of adjustments to earnings from equity method investments (a) (b)
2,934 3,434 10,617 13,740 
Proportionate share of adjustments for noncontrolling interests (c)
(4)(4)(8)(8)
Total adjustments92,350 96,587 223,606 206,721 
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate215,578 211,274 493,692 365,995 
Adjustments:
Other (gains) and losses (d)
20,155 (7,472)(14,263)34,717 
Straight-line and other leasing and financing adjustments(14,492)(10,313)(25,339)(19,064)
Above- and below-market rent intangible lease amortization, net10,548 14,384 21,552 26,499 
Stock-based compensation9,758 9,048 17,591 14,429 
Amortization of deferred financing costs3,147 3,447 6,275 6,860 
Merger and other expenses (e)
1,984 (2,599)(341)(3,090)
Other amortization and non-cash items530 563 1,082 592 
Tax (benefit) expense — deferred and other(324)208 (1,513)(2,387)
Proportionate share of adjustments to earnings from equity method investments (b)
368 3,845 535 8,167 
Proportionate share of adjustments for noncontrolling interests (c)
(6)(8)(11)(13)
Total adjustments31,668 11,103 5,568 66,710 
AFFO attributable to W. P. Carey — Real Estate$247,246 $222,377 $499,260 $432,705 
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate$215,578 $211,274 $493,692 $365,995 
AFFO attributable to W. P. Carey — Real Estate$247,246 $222,377 $499,260 $432,705 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income from Owned Real Estate attributable to W. P. Carey (h)
$56,492
 $87,497
 $137,990
 $174,736
Adjustments:       
Depreciation and amortization of real property62,621
 61,396
 185,439
 209,449
Gain on sale of real estate, net(19,257) (49,126) (22,732) (68,070)
Impairment charges—
 14,441
 —
 49,870
Proportionate share of adjustments for noncontrolling interests to arrive at FFO(2,692) (3,254) (7,795) (8,541)
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO866
 1,354
 4,416
 3,994
Total adjustments41,538
 24,811
 159,328
 186,702
FFO attributable to W. P. Carey (as defined by NAREIT) — Owned Real Estate (h)
98,030
 112,308
 297,318
 361,438
Adjustments:       
Above- and below-market rent intangible lease amortization, net (a)
12,459
 12,564
 37,273
 23,851
Other amortization and non-cash items (b) (c)
6,808
 (4,356) 15,855
 (7,587)
Straight-line and other rent adjustments (d)
(3,212) (5,116) (9,677) (34,262)
Tax benefit — deferred(2,694) (3,387) (5,121) (19,712)
Amortization of deferred financing costs2,184
 1,007
 6,126
 2,271
Stock-based compensation1,880
 1,572
 4,733
 4,316
Loss on extinguishment of debt1,566
 2,072
 35
 3,885
Realized (gains) losses on foreign currency(454) 1,559
 (441) 2,518
Other expenses (f) (g)
65
 —
 1,138
 2,975
Allowance for credit losses—
 —
 —
 7,064
Restructuring and other compensation (e)
—
 —
 —
 4,413
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO (h)
(79) (103) (605) (390)
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO(216) (90) (1,105) 1,278
Total adjustments18,307
 5,722
 48,211
 (9,380)
AFFO attributable to W. P. Carey — Owned Real Estate (h)
$116,337
 $118,030
 $345,529
 $352,058
        
Summary       
FFO attributable to W. P. Carey (as defined by NAREIT) — Owned Real Estate (h)
$98,030
 $112,308
 $297,318
 $361,438
AFFO attributable to W. P. Carey — Owned Real Estate (h)
$116,337
 $118,030
 $345,529
 $352,058




W. P. Carey 6/30/2022 10-Q– 63

W. P. Carey 9/30/2017 10-Q– 83



FFO and AFFO from Investment Management were as follows (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income from Investment Management attributable to W. P. Carey (h)
$23,786
 $23,446
 $64,090
 $45,307
FFO attributable to W. P. Carey (as defined by NAREIT) — Investment Management (h)
23,786
 23,446
 64,090
 45,307
Adjustments:       
Stock-based compensation2,755
 2,784
 9,916
 10,648
Tax expense (benefit) — deferred1,460
 388
 (3,046) (2,810)
Restructuring and other compensation (e)
1,356
 —
 9,074
 7,512
Other amortization and non-cash items (b)
(600) (541) (860) (108)
Realized losses on foreign currency5
 —
 17
 51
Other expenses (g)
—
 —
 —
 2,384
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO (h)
3,143
 364
 6,197
 1,131
Total adjustments8,119
 2,995
 21,298
 18,808
AFFO attributable to W. P. Carey — Investment Management (h)
$31,905
 $26,441
 $85,388
 $64,115
        
Summary       
FFO attributable to W. P. Carey (as defined by NAREIT) — Investment Management (h)
$23,786
 $23,446
 $64,090
 $45,307
AFFO attributable to W. P. Carey — Investment Management (h)
$31,905
 $26,441
 $85,388
 $64,115
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income from Investment Management attributable to W. P. Carey$4,450 $5,558 $14,587 $12,605 
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management4,450 5,558 14,587 12,605 
Adjustments:
Other (gains) and losses1,591 (73)264 (1,074)
Tax (benefit) expense — deferred and other(31)9 (84)(783)
Merger and other expenses— — 3 15 
Proportionate share of adjustments to earnings from equity method investments (b)
1,118 805 (830)1,694 
Total adjustments2,678 741 (647)(148)
AFFO attributable to W. P. Carey — Investment Management$7,128 $6,299 $13,940 $12,457 
Summary
FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management$4,450 $5,558 $14,587 $12,605 
AFFO attributable to W. P. Carey — Investment Management$7,128 $6,299 $13,940 $12,457 
__________
(a)Amount for the nine months ended September 30, 2016 includes an adjustment of $15.6 million related to the acceleration of a below-market lease from a tenant of a domestic property that was sold during that period.
(b)Represents primarily unrealized gains and losses from foreign exchange and derivatives.
(c)
Amounts for the three and nine months ended September 30, 2016 include an adjustment of $0.6 million to exclude a portion of a gain recognized on the deconsolidation of CESH I (Note 2).
(d)
Amount for the nine months ended September 30, 2016 includes an adjustment to exclude $27.2 million of the $32.2 million of lease termination income recognized in connection with a domestic property that was sold during that period, as such amount was determined to be non-core income (Note 15). Amount for the nine months ended September 30, 2016 also reflects an adjustment to include $1.8 million of lease termination income received in December 2015 that represented core income for the nine months ended September 30, 2016.
(e)
Amounts for the three and nine months ended September 30, 2017 represent restructuring expenses resulting from our exit from all non-traded retail fundraising activities, as of June 30, 2017. Amount for the nine months ended September 30, 2016 represents restructuring and other compensation-related expenses resulting from a reduction in headcount, including the RIF, and employee severance arrangements (Note 12).
(f)Amount for the nine months ended September 30, 2017 is primarily comprised of an accrual for estimated one-time legal settlement expenses.
(g)Amount for the nine months ended September 30, 2016 reflects expenses related to our formal strategic review, which was completed in May 2016.
(h)
As a result of our Board’s decision to exit all non-traded retail fundraising activities as of June 30, 2017, we have revised how we view and present a component of our two reportable segments. As such, beginning with the second quarter of 2017, we include equity in earnings of equity method investments in the Managed Programs in our Investment Management segment (Note 1). Earnings from our investment in CCIF continue to be included in our Investment Management segment. Results of operations for prior periods have been reclassified to conform to the current period presentation.
(a)Amount for the six months ended June 30, 2022 includes our $4.6 million proportionate share of an impairment charge recognized on an equity method investment in real estate (Note 7). Amount for the six months ended June 30, 2021 includes a non-cash other-than-temporary impairment charge of $6.8 million recognized on an equity method investment in real estate (Note 8).

(b)Equity income, including amounts that are not typically recognized for FFO and AFFO, is recognized within Earnings (losses) from equity method investments on the consolidated statements of income. This represents adjustments to equity income to reflect FFO and AFFO on a pro rata basis.

(c)Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.
(d)Primarily comprised of gains and losses on extinguishment of debt, the mark-to-market fair value of equity securities, and foreign currency exchange rate movements, as well as non-cash allowance for credit losses on loans receivable and direct financing leases.
W. P. Carey 9/30/2017 10-Q– 84
(e)Amounts for the three and six months ended June 30, 2022 and 2021 are primarily comprised of costs incurred in connection with the Proposed Merger (Note 1) and/or reversals of estimated liabilities for German real estate transfer taxes that were previously recorded in connection with mergers in prior years.



While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of a company’s operating performance. These non-GAAP measures should be used in conjunction with net income as defined by GAAP. FFO and AFFO, or similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures.


W. P. Carey 6/30/2022 10-Q– 64


Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 
Market Risk
 
Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices. The primary market risks that we are exposed to are interest rate risk and foreign currency exchange risk. risk; however, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. From time to time, we may enter into foreign currency collars to hedge our foreign currency cash flow exposures.

We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors (such as the COVID-19 pandemic) can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, we view our collective tenant roster as a portfolio and we attempt to diversify such portfolio so that we are not overexposed to a particular industry or geographic region.

Generally, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. However, from time to time, we may enter into foreign currency forward contracts and collars to hedge our foreign currency cash flow exposures.
 
Interest Rate Risk
 
The values of our real estate and related fixed-rate debt obligations, andas well as the values of our note receivable investmentsunsecured debt obligations, are subject to fluctuations based on changes in interest rates. The value of our real estate is also subject to fluctuations based on local and regional economic conditions (including the ongoing impact of the COVID-19 pandemic) and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled, if we do not choose to repay the debt when due. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An increase in interest rates would likely cause the fair value of our owned and managed assets to decrease, which would create lower revenues from managed assets and lower investment performance for the Managed REITs.decrease. Increases in interest rates may also have an impact on the credit profile of certain tenants.


We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we historically attempted to obtain non-recourse mortgagegenerally seek long-term debt financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with lenders. Interest rate swap agreements effectively convert the variable-rate debt service obligations of a loan to a fixed rate, while interest rate cap agreements limit the underlying interest rate from exceeding a specified strike rate. Interest rate swaps are agreements in which one party exchanges a stream of interest paymentscounterparties. See Note 9 for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. These interest rate swaps and caps are derivative instruments that, where applicable, are designated as cash flow hedgesadditional information on the forecasted interest payments on the debt obligation. The face amount on which the swaps or caps are based is not exchanged. Our objective in using these derivatives is to limit our exposure to interest rate movements. At September 30, 2017, we estimated that the total fair value of our interest rate swaps and cap, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, was in a net liability position of $1.6 million (Note 9).caps.




W. P. Carey 9/30/2017 10-Q– 85


At SeptemberJune 30, 2017,2022, a significant portion (approximately 83.2%85.0%) of our long-term debt either bore interest at fixed rates or was swapped or capped to a fixed rate, or bore interest at fixed rates that were scheduled to convert to then-prevailing market fixed rates at certain future points during their term. The annual interest rates on our fixed-rate debt at September 30, 2017 ranged from 2.0% to 7.8%. The contractual annual interest rates on our variable-rate debt at September 30, 2017 ranged from 0.9% to 6.9%.rate. Our debt obligations are more fully described in Note 10 and Liquidity and Capital Resources — Summary of Financing in Item 2 above. The following table presents principal cash outflows for the remainder of 2017, each of the next four calendar years following December 31, 2017, and thereafter,flows based upon expected maturity dates of our debt obligations outstanding at SeptemberJune 30, 20172022 (in thousands):
2022 (Remainder)2023202420252026ThereafterTotalFair Value
2017 (Remainder) 2018 2019 2020 2021 Thereafter Total Fair value
Fixed-rate debt (a)
$38,805
 $135,368
 $86,143
 $178,496
 $116,682
 $2,911,666
 $3,467,160
 $3,572,112
Fixed-rate debt (a) (b)
Fixed-rate debt (a) (b)
$18,392 $87,272 $1,043,216 $498,911 $901,421 $3,185,790 $5,735,002 $5,191,465 
Variable-rate debt (a)
$1,979
 $142,795
 $13,241
 $43,051
 $267,322
 $408,374
 $876,762
 $874,357
Variable-rate debt (a)
$12,325 $91,047 $13,599 $967,563 $— $— $1,084,534 $1,081,834 
__________
(a)Amounts are based on the exchange rate at September 30, 2017, as applicable.

(a)Amounts are based on the exchange rate at June 30, 2022, as applicable.
(b)Amounts after 2023 are primarily comprised of principal payments for our Senior Unsecured Notes (Note 10).

The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps, or that has been subject to interest rate caps, is affected by changes in interest rates. Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at SeptemberJune 30, 20172022 would increase or decrease by $7.2$5.2 million for our euro-denominated debt, by $3.3 million for our British pound sterling-denominated debt, by $1.5 million for our U.S. dollar-denominated debt, and by $0.2 million for our Japanese yen-denominated debt, for each respective 1% change in annual interest rates. As more fully described under Liquidity and Capital Resources — Summary of Financing in Item 2 above, a portion of the debt classified as variable-rate debt in the tables above bore interest at fixed rates at September 30, 2017 but has interest rate reset features that will change the fixed interest rates to then-prevailing market fixed rates at certain points during their term. This debt is generally not subject to short-term fluctuations in interest rates.


W. P. Carey 6/30/2022 10-Q– 65


Foreign Currency Exchange Rate Risk
 
We own international investments, primarily in Europe, Australia, Asia,Canada, and Canada,Japan, and as a result are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro, the British pound sterling, the AustralianCanadian dollar, and the Canadian dollar,Japanese yen, which may affect future costs and cash flows. We managehave obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also completed several offerings of euro-denominated senior notes, and have borrowed under our Senior Unsecured Credit Facility in foreign currencies, including the euro, British pound sterling, and Japanese yen (Note 10). Volatile market conditions arising from the ongoing effects of the COVID-19 global pandemic, as well as other macroeconomic factors, may result in significant fluctuations in foreign currency exchange rate movements by generally placing ourrates. To the extent that currency fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service obligation(comprised of principal and interest, excluding balloon payments), as translated to U.S. dollars, will partially offset the lendereffect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates. We estimate that, for a 1% increase or decrease in the exchange rate between the euro, British pound sterling, or Japanese yen and the tenant’s rental obligation to usU.S. dollar, there would be a corresponding change in the same currency. This reduces our overall exposure to the netprojected estimated cash flow from that investment. (scheduled future rental revenues, net of scheduled future debt service payments for the next 12 months) for our consolidated foreign operations at June 30, 2022 of $2.6 million, $0.4 million, and less than $0.1 million, respectively, excluding the impact of our derivative instruments.

In addition, we may use currency hedging to further reduce the exposure to our equity cash flow. We are generally a net receiver of these currencies (we receive more cash than we pay out), and therefore our foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar, relative to the foreign currency. As part of our investment strategy, we make intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar as their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and short-term loans, are included in the determination of net income. For the nine months ended September 30, 2017, we recognized net foreign currency transaction losses (included in Other income and (expenses) in the consolidated financial statements) of $15.9 million, primarily due to the weakening of the U.S. dollar relative to the euro during the period. The end-of-period rate for the U.S. dollar in relation to the euro at September 30, 2017 increased by 12.0% to $1.1806 from $1.0541 at December 31, 2016.


The June 23, 2016 referendum by voters in the United Kingdom to exit the European Union, a process commonly referred to as “Brexit,” adversely impacted global markets, including the currencies, and resulted in a sharp decline in the value of the British pound sterling and, to a lesser extent, the euro, as compared to the U.S. dollar. Volatility in exchange rates is expected to continue as the United Kingdom negotiates its likely exit from the European Union. As of September 30, 2017, 4.9% and 24.0% of our total ABR was from the United Kingdom and other European Union countries, respectively. We currently hedge a portion of our British pound sterling exposure and our euro exposure through the next five years, thereby significantly reducing our currency risk. Any impact from Brexit on us will depend, in part, on the outcome of tariff, trade, regulatory, and other negotiations. Although it is unknown what the result of those negotiations will be, it is possible that new terms may adversely affect our operations and financial results.

We enter into foreign currency forward contracts and collars to hedge certain of our foreign currency cash flow exposures. A foreign currency forward contract is a commitment to deliver a certain amount of foreign currency at a certain priceSee Note 9 for additional information on a specific date in the future. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the


W. P. Carey 9/30/2017 10-Q– 86


exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. The estimated fair value of our foreign currency forward contracts and collars, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, was in a net asset position of $17.0 million at September 30, 2017 (Note 9). We have obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also issued the euro-denominated 2.0% Senior Notes and 2.25% Senior Notes, and have borrowed under our Unsecured Revolving Credit Facility and Unsecured Term Loans in foreign currencies, including the euro and the British pound sterling. To the extent that currency fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service, as translated to U.S. dollars, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates.collars.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases for our consolidated foreign operations as of September 30, 2017 for the remainder of 2017, each of the next four calendar years following December 31, 2017, and thereafter are as follows (in thousands):
Lease Revenues (a)
 2017 (Remainder) 2018 2019 2020 2021 Thereafter Total
Euro (b)
 $42,817
 $171,565
 $168,207
 $164,933
 $160,199
 $1,251,640
 $1,959,361
British pound sterling (c)
 8,357
 33,337
 33,592
 33,919
 34,165
 278,974
 422,344
Australian dollar (d)
 3,150
 12,498
 12,498
 12,532
 12,498
 160,492
 213,668
Other foreign currencies (e)
 4,051
 16,322
 16,819
 15,073
 15,299
 152,029
 219,593
  $58,375
 $233,722
 $231,116
 $226,457
 $222,161
 $1,843,135
 $2,814,966

Scheduled debt service payments (principal and interest) for our Unsecured Senior Notes, Senior Unsecured Credit Facility, and non-recourse mortgage notes payable for our consolidated foreign operations as of September 30, 2017 for the remainder of 2017, each of the next four calendar years following December 31, 2017, and thereafter are as follows (in thousands):
Debt Service (a) (f)
 2017 (Remainder) 2018 2019 2020 2021 Thereafter Total
Euro (b)
 $41,096
 $174,748
 $42,970
 $86,502
 $179,220
 $1,650,182
 $2,174,718
British pound sterling (c)
 210
 840
 840
 840
 840
 11,595
 15,165
Thai baht 497
 9,231
 —
 —
 —
 —
 9,728
  $41,803
 $184,819
 $43,810
 $87,342
 $180,060
 $1,661,777
 $2,199,611
__________
(a)
Amounts are based on the applicable exchange rates at September 30, 2017. 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, 2017 of $2.2 million, excluding the impact of our derivative instruments. Amounts included the equivalent of $590.3 million of 2.0% Senior Notes outstanding maturing in January 2023; the equivalent of $590.3 million of 2.25% Senior Notes outstanding maturing in July 2024; the equivalent of $383.7 million borrowed in euro in aggregate under our Unsecured Term Loans, which are scheduled to mature on February 22, 2022; and the equivalent of $111.2 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, 2017 of $4.1 million, excluding the impact of our derivative instruments.
(d)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, 2017 of $2.1 million. There is no related mortgage loan on this investment.
(e)Other foreign currencies for future minimum rents consist of the Canadian dollar, the Swedish krona, the Norwegian krone, and the Thai baht.
(f)Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at September 30, 2017.



W. P. Carey 9/30/2017 10-Q– 87


As a result of scheduled balloon payments on certain of our international non-recourse mortgage loans, projected debt service obligations denominated in euros exceed projected lease revenues denominated in euros in 2018. In 2018, balloon payments denominated in euros totaling $130.1 million are due on three non-recourse mortgage loans that are collateralized by properties that we own. We currently anticipate that, by their respective due dates, we will have refinanced or repaid these loans using our cash resources, including unused capacity on our Unsecured Revolving Credit Facility, as well as proceeds from dispositions of properties.

Projected debt service obligations denominated in euros exceed projected lease revenues denominated in euros in 2021 and thereafter, primarily due to amounts borrowed in euros under our Unsecured Term Loans, Unsecured Revolving Credit Facility, 2.0% Senior Notes, and 2.25% Senior Notes, as described above.


Concentration of Credit Risk


Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk. While we believe our portfolio is reasonably well diversified,well-diversified, it does contain concentrations in certain areas. There have been no material changes in our concentration of credit risk from what was disclosed in the 2021 Annual Report.

For the nine months ended September 30, 2017, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues:

68% related to domestic operations; and
32% related to international operations.

At September 30, 2017, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ABR as of that date:

65% related to domestic properties;
35% related to international properties;
W. P. Carey 6/30/2022 10-Q– 66

30% related to industrial facilities, 25% related to office facilities, 16% related to retail facilities, and 14% related to warehouse facilities; and
18% related to the retail stores industry and 11% related to the consumer services industry.



W. P. Carey 9/30/2017 10-Q– 88



Item 4. Controls and Procedures.
 
Disclosure Controls and Procedures
 
Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls.
 
Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of SeptemberJune 30, 2017,2022, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of SeptemberJune 30, 20172022 at a reasonable level of assurance.


Changes in Internal Control Over Financial Reporting


There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.




W. P. Carey 6/30/2022 10-Q– 67

W. P. Carey 9/30/2017 10-Q– 89



PART II — OTHER INFORMATION


Item 1A. Risk Factors

We are including the following additional risk factor, which should be read in conjunction with our description of risk factors provided in Part I, Item 1A. Risk Factors in our 2021 Annual Report:

Risks Related to Our Proposed Merger with CPA:18 – Global

Failure to complete the Proposed Merger could negatively affect us.
It is possible that the Proposed Merger may not be completed. The parties’ respective obligations to complete the Proposed Merger are subject to the satisfaction or waiver of specified conditions, some of which are beyond the control of CPA:18 – Global and us. If the Proposed Merger is not completed, we may be subject to a number of material risks, including the following:

•we will have incurred substantial costs and expenses related to the Proposed Merger, such as legal, accounting, and financial advisor fees, which will be payable by us even if the Proposed Merger is not completed, and are only subject to reimbursement from CPA:18 – Global under certain limited circumstances; and
•we may be required to pay CPA:18 – Global’s out-of-pocket expenses incurred in connection with the Proposed Merger if the Merger Agreement is terminated under certain circumstances.

The future results of the combined company will suffer if the combined company does not effectively manage its expanded operations following the Proposed Merger.

Following the Proposed Merger, the combined company may continue to expand its operations through additional acquisitions and other strategic transactions, some of which may involve complex challenges. The future success of the combined company will depend, in part, upon its ability to manage its expansion opportunities, integrate new operations into its existing business in an efficient and timely manner, successfully monitor its operations, costs, regulatory compliance and service quality, and maintain other necessary internal controls. There can be no assurance that the combined company’s expansion or acquisition opportunities will be successful, or that the combined company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

Goodwill resulting from the consummation of the Proposed Merger may adversely affect the combined company’s results of operations.

Potential impairment of goodwill resulting from the Proposed Merger could adversely affect the combined company’s financial condition and results of operations. The combined company will assess its goodwill and other intangible assets and long-lived assets for impairment annually and more frequently when required by GAAP. The combined company will be required to record an impairment charge if circumstances indicate that the asset carrying values exceed their fair values the combined company’s assessment of goodwill, other intangible assets, or long-lived assets could indicate that an impairment of the carrying value of such assets may have occurred that could result in a material, non-cash write-down of such assets, which could have a material adverse effect on its results of operations and future earnings.

W. P. Carey 6/30/2022 10-Q– 68


Item 6. Exhibits.
 
The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
Exhibit
No.
DescriptionDescriptionMethod of Filing
31.110.1 
Equity Sales Agreement, dated May 2, 2022, by and among W. P. Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc., Jefferies LLC, JMP Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital (USA) Inc., and Wells Fargo Securities, LLC, as agents, and each of Barclays Bank PLC, Bank of Montreal, The Bank of New York Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, Regions Securities LLC, Royal Bank of Canada, The Bank of Nova Scotia and Wells Fargo Bank, National Association, as forward purchasersIncorporated by reference to Exhibit 1.1 to Current Report on Form 8-K, filed May 3, 2022
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith
32
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Filed herewith
101101.INS
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL DocumentThe following materials from W. P. Carey Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017 and 2016, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements.Filed herewith


101.SCH
W. P. Carey 9/30/2017 10-Q– 90
XBRL Taxonomy Extension Schema DocumentFiled herewith
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentFiled herewith
101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
101.LABXBRL Taxonomy Extension Label Linkbase DocumentFiled herewith
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith

W. P. Carey 6/30/2022 10-Q– 69




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportReport to be signed on its behalf by the undersigned, thereunto duly authorized.
W. P. Carey Inc.
Date:July 29, 2022
By:/s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer
(Principal Financial Officer)
Date:July 29, 2022W. P. Carey Inc.
Date:November 3, 2017
By: /s/ ToniAnn Sanzone
ToniAnn Sanzone
Chief Financial Officer
(Principal Financial Officer)
Date:November 3, 2017
By: /s/ Arjun Mahalingam
Arjun Mahalingam
Chief Accounting Officer
(Principal Accounting Officer)



By:/s/ Arjun Mahalingam
W. P. Carey 9/30/2017 10-Q– 91
Arjun Mahalingam
Chief Accounting Officer
(Principal Accounting Officer)

W. P. Carey 6/30/2022 10-Q– 70




EXHIBIT INDEX

The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
Exhibit
No.
DescriptionDescriptionMethod of Filing
31.110.1 
Equity Sales Agreement, dated May 2, 2022, by and among W. P. Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc., Jefferies LLC, JMP Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital (USA) Inc., and Wells Fargo Securities, LLC, as agents, and each of Barclays Bank PLC, Bank of Montreal, The Bank of New York Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, Regions Securities LLC, Royal Bank of Canada, The Bank of Nova Scotia and Wells Fargo Bank, National Association, as forward purchasers
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101101.INS
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document
The following materials from W. P. Carey Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017 and 2016, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements.
Filed herewith
101.SCHXBRL Taxonomy Extension Schema DocumentFiled herewith
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentFiled herewith
101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
101.LABXBRL Taxonomy Extension Label Linkbase DocumentFiled herewith
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith