Corporate Property Associates 17 - Global 10-Q 2015 Q3 Quarterly report

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 September 30, 2015

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: 000-52891

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

(Exact name of registrant as specified in its charter)

Maryland	20-8429087
(State of incorporation)	(I.R.S. Employer Identification No.)
50 Rockefeller Plaza
New York, New York	10020
(Address of principal executive offices)	(Zip Code)

Investor Relations (212) 492-8920

(212) 492-1100

(Registrant’s telephone numbers, including area code)

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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

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 337,773,692 shares of common stock, $0.001 par value, outstanding at November 2, 2015.

INDEX

		Page No.
PART I − FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income (Loss)	4
	Consolidated Statements of Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3. Quantitative and Qualitative Disclosures About Market Risk		52
Item 4. Controls and Procedures		55
PART II − OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		56
Item 6. Exhibits		57
Signatures		58

Forward-Looking Statements

This Quarterly Report on Form 10-Q, or 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. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. 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, including but not limited to those described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 31, 2015, or the 2014 Annual Report. 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).

CPA^®:17 – Global 9/30/2015 10-Q– 1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)

	September 30, 2015			December 31, 2014
Assets
Investments in real estate:
Real estate, at cost (inclusive of $139,507 and $144,753, respectively, attributable to variable interest entities, or VIEs)	$	2,593,089		$	2,396,715
Operating real estate, at cost	274,223			272,859
Accumulated depreciation (inclusive of $12,317 and $9,984, respectively, attributable to VIEs)	(241,259		)	(197,695		)
Net investments in properties	2,626,053			2,471,879
Real estate under construction	2,273			110,983
Net investments in direct financing leases (inclusive of $246,967 and $245,815, respectively, attributable to VIEs)	496,348			479,425
Net investments in real estate	3,124,674			3,062,287
Equity investments in real estate	526,132			531,000
Cash and cash equivalents (inclusive of $105 and $27, respectively, attributable to VIEs)	94,803			275,719
In-place lease and tenant relationship intangible assets, net (inclusive of $15,672 and $16,348, respectively, attributable to VIEs)	438,403			432,444
Other intangible assets, net	77,164			83,238
Other assets, net (inclusive of $16,126 and $16,536, respectively, attributable to VIEs)	279,150			221,209
Total assets	$	4,540,326		$	4,605,897
Liabilities and Equity
Liabilities:
Non-recourse debt, net (inclusive of $188,563 and $193,437, respectively, attributable to VIEs)	$	1,850,842		$	1,896,489
Senior Credit Facility	53,706			—
Accounts payable, accrued expenses and other liabilities (inclusive of $6,968 and $10,109, respectively, attributable to VIEs)	134,798			141,043
Deferred income taxes (inclusive of $0 and $60, respectively, attributable to VIEs)	13,572			12,234
Below-market rent and other intangible liabilities, net (inclusive of $349 and $365, respectively, attributable to VIEs)	100,806			104,722
Due to affiliates	10,350			12,634
Distributions payable	54,434			53,378
Total liabilities	2,218,508			2,220,500
Commitments and contingencies (Note 12)
Equity:
CPA®:17 – Global stockholders’ equity:
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued	—			—
Common stock, $0.001 par value; 900,000,000 shares authorized; 346,427,763 and 336,843,388 shares issued, respectively; and 334,976,075 and 328,480,839 shares outstanding, respectively	346			337
Additional paid-in capital	3,123,031			3,033,283
Distributions in excess of accumulated earnings	(667,272		)	(567,806		)
Accumulated other comprehensive loss	(125,680		)	(81,007		)
Less: treasury stock at cost, 11,451,688 and 8,362,549 shares, respectively	(106,156		)	(77,852		)
Total CPA®:17 – Global stockholders’ equity	2,224,269			2,306,955
Noncontrolling interests	97,549			78,442
Total equity	2,321,818			2,385,397
Total liabilities and equity	$	4,540,326		$	4,605,897

See Notes to Consolidated Financial Statements. 

CPA^®:17 – Global 9/30/2015 10-Q– 2

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues
Lease revenues:
Rental income	$	69,075		$	63,998		$	198,473		$	191,072
Interest income from direct financing leases	14,386			13,674			41,470			40,889
Total lease revenues	83,461			77,672			239,943			231,961
Other real estate income	12,686			11,516			36,755			41,423
Other operating income	7,839			7,389			29,404			20,305
Other interest income	4,216			1,410			10,518			4,234
	108,202			97,987			316,620			297,923
Operating Expenses
Depreciation and amortization	26,844			25,340			78,675			76,796
Property expenses	17,704			15,940			54,042			48,083
General and administrative	4,897			6,544			13,690			17,853
Other real estate expenses	4,808			4,362			14,083			19,942
Acquisition expenses	—			—			643			1,401
Impairment charges	—			127			1,023			127
	54,253			52,313			162,156			164,202
Other Income and Expenses
Equity in (losses) earnings of equity method investments in real estate	(1,078		)	2,052			6,625			9,230
Other income and (expenses)	2,108			(2,687		)	2,917			(1,835		)
Interest expense	(24,104		)	(23,695		)	(69,346		)	(70,288		)
	(23,074		)	(24,330		)	(59,804		)	(62,893		)
Income before income taxes and gain on sale of real estate	30,875			21,344			94,660			70,828
Provision for income taxes	(1,676		)	(2,651		)	(4,441		)	(5,960		)
Income before gain on sale of real estate	29,199			18,693			90,219			64,868
Gain on sale of real estate, net of tax	—			790			2,197			13,338
Net Income	29,199			19,483			92,416			78,206
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $5,837, $6,111, $17,690, and $15,380, respectively)	(9,147		)	(9,193		)	(29,345		)	(24,510		)
Net Income Attributable to CPA®:17 – Global	$	20,052		$	10,290		$	63,071		$	53,696
Basic and Diluted Earnings Per Share	$	0.06		$	0.03		$	0.19		$	0.17
Basic and Diluted Weighted-Average Shares Outstanding	335,668,313			325,550,047			333,523,528			322,692,768
Distributions Declared Per Share	$	0.1625		$	0.1625		$	0.4875		$	0.4875

See Notes to Consolidated Financial Statements. 

CPA^®:17 – Global 9/30/2015 10-Q– 3

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net Income	$	29,199		$	19,483		$	92,416		$	78,206
Other Comprehensive Loss
Foreign currency translation adjustments	(1,100		)	(52,023		)	(60,990		)	(58,093		)
Change in net unrealized (loss) gain on derivative instruments	(3,142		)	18,844			15,665			14,503
Change in unrealized gain on marketable securities	7			77			21			124
	(4,235		)	(33,102		)	(45,304		)	(43,466		)
Comprehensive Income (Loss)	24,964			(13,619		)	47,112			34,740
Amounts Attributable to Noncontrolling Interests
Net income	(9,147		)	(9,193		)	(29,345		)	(24,510		)
Foreign currency translation adjustments	(103		)	905			631			1,002
Change in net unrealized gain on derivative instruments	—			(102		)	—			(411		)
Comprehensive income attributable to noncontrolling interests	(9,250		)	(8,390		)	(28,714		)	(23,919		)
Comprehensive Income (Loss) Attributable to CPA®:17 – Global	$	15,714		$	(22,009	)	$	18,398		$	10,821

See Notes to Consolidated Financial Statements.

CPA^®:17 – Global 9/30/2015 10-Q– 4

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Nine Months Ended September 30, 2015 and 2014

(in thousands, except share and per share amounts) 

	CPA®:17 – Global
	Total Outstanding Shares		Common Stock		Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total CPA®:17 – Global Stockholders			Noncontrolling Interests			Total
Balance at January 1, 2015	328,480,839		$	337	$	3,033,283	$	(567,806	)	$	(81,007	)	$	(77,852	)	$	2,306,955		$	78,442		$	2,385,397
Shares issued, net of offering costs	8,336,464		8		77,672											77,680						77,680
Shares issued to directors	10,288		—		100											100						100
Shares issued to affiliates	1,237,623		1		11,976											11,977						11,977
Contributions from noncontrolling interest																—			15,928			15,928
Distributions declared ($0.4875 per share)							(162,537		)							(162,537		)				(162,537		)
Distributions to noncontrolling interests																—			(25,535		)	(25,535		)
Net income							63,071									63,071			29,345			92,416
Other comprehensive income (loss):
Foreign currency translation adjustments										(60,359		)				(60,359		)	(631		)	(60,990		)
Change in net unrealized gain on derivative instruments										15,665						15,665			—			15,665
Change in unrealized gain on marketable securities										21						21						21
Repurchase of shares	(3,089,139	)											(28,304		)	(28,304		)				(28,304		)
Balance at September 30, 2015	334,976,075		$	346	$	3,123,031	$	(667,272	)	$	(125,680	)	$	(106,156	)	$	2,224,269		$	97,549		$	2,321,818
Balance at January 1, 2014	317,353,899		$	323	$	2,904,927	$	(431,095	)	$	(13,442	)	$	(52,477	)	$	2,408,236		$	77,488		2,485,724
Shares issued, net of offering costs	8,293,992		8		76,017											76,025						76,025
Shares issued to affiliates	2,054,771		2		19,715											19,717						19,717
Distributions declared ($0.4875 per share)							(157,485		)							(157,485		)				(157,485		)
Distributions to noncontrolling interests																—			(23,245		)	(23,245		)
Net income							53,696									53,696			24,510			78,206
Other comprehensive income (loss):
Foreign currency translation adjustments										(57,091		)				(57,091		)	(1,002		)	(58,093		)
Change in net unrealized gain on derivative instruments										14,092						14,092			411			14,503
Change in unrealized gain on marketable securities										124						124						124
Repurchase of shares	(1,798,674	)											(16,335		)	(16,335		)				(16,335		)
Balance at September 30, 2014	325,903,988		$	333	$	3,000,659	$	(534,884	)	$	(56,317	)	$	(68,812	)	$	2,340,979		$	78,162		$	2,419,141

See Notes to Consolidated Financial Statements.

CPA^®:17 – Global 9/30/2015 10-Q– 5

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Nine Months Ended September 30,
	2015			2014
Cash Flows — Operating Activities
Net Cash Provided by Operating Activities	$	185,087		$	152,785
Cash Flows — Investing Activities
Acquisitions of real estate and direct financing leases, and capital expenditures on owned real estate	(197,075		)	(32,210		)
Funding of loans receivable	(42,600		)	—
Capital contributions to equity investments in real estate	(33,951		)	(157,050		)
Funding for build-to-suit projects	(21,440		)	(61,638		)
Value added taxes paid in connection with acquisition of real estate	(21,229		)	(4,996		)
Return of capital from equity investments in real estate	20,434			75,060
Value added taxes refunded in connection with acquisition of real estate	15,049			1,498
Payment of deferred acquisition fees to an affiliate	(5,894		)	(5,467		)
Changes in investing restricted cash	5,016			(16,082		)
Proceeds from repayment of loans receivable	1,928			—
Deposits for investments	(1,000		)	—
Proceeds from sale of real estate	—			68,789
Investment in securities	—			(8,225		)
Net Cash Used in Investing Activities	(280,762		)	(140,321		)
Cash Flows — Financing Activities
Distributions paid	(161,481		)	(156,096		)
Scheduled payments and prepayments of mortgage principal	(114,867		)	(44,630		)
Proceeds from Senior Credit Facility	108,451			—
Proceeds from mortgage financing	108,181			81,902
Proceeds from issuance of shares, net of issuance costs	77,681			76,025
Repayments of Senior Credit Facility	(55,000		)	—
Purchase of treasury stock	(28,303		)	(16,335		)
Distributions to noncontrolling interests	(25,535		)	(23,245		)
Proceeds from notes payable to affiliate	25,000			—
Repayment of notes payable to affiliate	(25,000		)	—
Contributions from noncontrolling interest	15,928			—
Payment of financing costs and mortgage deposits, net of deposits refunded	(2,713		)	(750		)
Changes in financing restricted cash	(1,098		)	(3,563		)
Net Cash Used in Financing Activities	(78,756		)	(86,692		)
Change in Cash and Cash Equivalents During the Period
Effect of exchange rate changes on cash	(6,485		)	(7,934		)
Net decrease in cash and cash equivalents	(180,916		)	(82,162		)
Cash and cash equivalents, beginning of period	275,719			418,108
Cash and cash equivalents, end of period	$	94,803		$	335,946

See Notes to Consolidated Financial Statements.

CPA^®:17 – Global 9/30/2015 10-Q– 6

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Organization

Corporate Property Associates 17 – Global Incorporated, or CPA^®:17 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly-owned, non-listed real estate investment trust, or REIT, that invests primarily in commercial real estate properties leased to companies both domestically and internationally. We were formed in 2007 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively our advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates.

Substantially all of our assets and liabilities are held by CPA^®:17 Limited Partnership, or the Operating Partnership, and at September 30, 2015, we owned 99.99% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

At September 30, 2015, our portfolio was comprised of full or partial ownership interests in 375 fully-occupied properties, substantially all of which were triple-net leased to 113 tenants, and totaled approximately 40 million square feet. In addition, our portfolio was comprised of full or partial ownership interests in 72 operating properties, including 71 self-storage properties and one hotel property, for an aggregate of approximately 5 million square feet. As opportunities arise, we may also make other types of commercial real estate-related investments.

CPA^®:17 – Global 9/30/2015 10-Q– 7

Notes to Consolidated Financial Statements (Unaudited)

Note 2. Revisions of Previously-Issued Financial Statements

In the course of preparing our 2014 consolidated financial statements, we discovered an error related to our accounting for a subsidiary’s functional currency. We corrected this error, and other errors previously recorded as out-of-period adjustments, and revised our consolidated financial statements for all prior periods impacted. Accordingly, our financial results for the three and nine months ended September 30, 2014 and total equity at January 1, 2014 presented herein have been revised for the correction of such errors as follows (in thousands, except share and per share amounts):

Consolidated Statements of Income

	Three Months Ended September 30, 2014									Nine Months Ended September 30, 2014
	As Reported			Revisions			As Revised			As Reported			Revisions			As Revised
Revenues
Total revenues	$	97,987		$	—		$	97,987		$	297,923		$	—		$	297,923
Operating Expenses
Total operating expenses	52,313			—			52,313			164,202			—			164,202
Other Income and Expenses
Equity in earnings of equity method investments in real estate	2,052			—			2,052			9,777			(547		)	9,230
Other income and (expenses)	2,203			(4,890		)	(2,687		)	4,101			(5,936		)	(1,835		)
Interest expense	(23,695		)	—			(23,695		)	(70,288		)	—			(70,288		)
	(19,440		)	(4,890		)	(24,330		)	(56,410		)	(6,483		)	(62,893		)
Income before income taxes and gain on sale of real estate	26,234			(4,890		)	21,344			77,311			(6,483		)	70,828
Provision for income taxes	(2,651		)	—			(2,651		)	(6,012		)	52			(5,960		)
Income before gain on sale of real estate	23,583			(4,890		)	18,693			71,299			(6,431		)	64,868
Gain on sale of real estate, net of tax	790			—			790			13,338			—			13,338
Net Income	24,373			(4,890		)	19,483			84,637			(6,431		)	78,206
Net income attributable to noncontrolling interests	(9,193		)	—			(9,193		)	(24,510		)	—			(24,510		)
Net Income Attributable to CPA®:17 – Global	$	15,180		$	(4,890	)	$	10,290		$	60,127		$	(6,431	)	$	53,696
Basic and Diluted Earnings Per Share	$	0.05		$	(0.02	)	$	0.03		$	0.19		$	(0.02	)	$	0.17
Basic and Diluted Weighted-Average Shares Outstanding	325,550,047						325,550,047			322,692,768						322,692,768

CPA^®:17 – Global 9/30/2015 10-Q– 8

Notes to Consolidated Financial Statements (Unaudited)

Consolidated Statements of Comprehensive Income

	Three Months Ended September 30, 2014									Nine Months Ended September 30, 2014
	As Reported			Revisions			As Revised			As Reported			Revisions			As Revised
Net Income	$	24,373		$	(4,890	)	$	19,483		$	84,637		$	(6,431	)	$	78,206
Other Comprehensive Loss
Foreign currency translation adjustments	(61,105		)	9,082			(52,023		)	(68,537		)	10,444			(58,093		)
Change in net unrealized gain on derivative instruments	23,036			(4,192		)	18,844			19,013			(4,510		)	14,503
Change in unrealized gain on marketable securities	77			—			77			124			—			124
	(37,992		)	4,890			(33,102		)	(49,400		)	5,934			(43,466		)
Comprehensive (Loss) Income	(13,619		)	—			(13,619		)	35,237			(497		)	34,740
Amounts Attributable to Noncontrolling Interests
Net income	(9,193		)	—			(9,193		)	(24,510		)	—			(24,510		)
Foreign currency translation adjustments	905			—			905			1,002			—			1,002
Change in net unrealized gain on derivative instruments	(102		)	—			(102		)	(411		)	—			(411		)
Comprehensive income attributable to noncontrolling interests	(8,390		)	—			(8,390		)	(23,919		)	—			(23,919		)
Comprehensive (Loss) Income Attributable to CPA®:17 – Global	$	(22,009	)	$	—		$	(22,009	)	$	11,318		$	(497	)	$	10,821

Consolidated Statement of Equity

	CPA®:17 – Global
Balance at January 1, 2014	Total Outstanding Shares	Common Stock		Additional Paid-In Capital		Distributions in Excess of Accumulated Earnings (a)			Accumulated Other Comprehensive Loss			Treasury Stock			Total CPA®:17 – Global Stockholders		Noncontrolling Interests		Total
As Reported	317,353,899	$	323	$	2,904,927	$	(439,688	)	$	(5,275	)	$	(52,477	)	$	2,407,810	$	77,488	$	2,485,298
Revisions	—	—		—		8,593			(8,167		)	—			426		—		426
As Revised	317,353,899	$	323	$	2,904,927	$	(431,095	)	$	(13,442	)	$	(52,477	)	$	2,408,236	$	77,488	$	2,485,724

__________

(a) The amount previously reported also reflects changes to prior period amounts related to the change in accounting for our investment in BG LLH, LLC, as more fully described in Note 3.

Description of the Errors and Revisions

In the fourth quarter of 2014, we identified an error in the consolidated financial statements related to the accounting for foreign currency matters. We identified that one of our consolidated subsidiary’s functional currency had been incorrectly designated as the euro instead of the U.S. dollar since the subsidiary was formed in 2009. As a result, the applicable financial results of this entity were being translated when they should have been remeasured. The correction of this error resulted in the recognition of foreign currency gains within the consolidated statements of income, specifically within Other income and (expenses), instead of as foreign currency translation adjustments within the consolidated statements of comprehensive income. We concluded that these revision adjustments were not material to our financial position or results of operations for 2014 or any of the prior periods and revised the prior period presented herein to reflect the correction of this error. These revision adjustments resulted in a decrease in Other income and (expenses) of $4.9 million and $5.9 million for the three and nine months ended September 30, 2014, respectively. The impact of these revision adjustments on both Distributions in excess of accumulated earnings and Accumulated other comprehensive loss was $8.1 million at January 1, 2014.

CPA^®:17 – Global 9/30/2015 10-Q– 9

Notes to Consolidated Financial Statements (Unaudited)

In connection with the error identified above, we also made adjustments to reflect the correction of other out-of-period adjustments identified during 2014, 2013, 2012, and 2011 to record these adjustments in the applicable prior periods. We concluded that none of the following revision adjustments were material to our financial position or results of operations for any of the periods presented:

• In 2014, we identified a classification error on one of our derivative instruments. Accordingly, we reclassified its associated mark-to-market adjustments during 2014, 2013, and 2012 from Change in net unrealized gain (loss) on derivative instruments to Foreign currency translation adjustments within the consolidated statements of equity and comprehensive income. There was no net impact to Other comprehensive loss or Comprehensive income for the three and nine months ended September 30, 2014. There was no net impact on Total equity at January 1, 2014 related to this reclassification.

• In the first quarter of 2014, we changed the accounting related to deferred foreign income taxes for one of our equity investments in real estate and we identified an additional tax-paying entity related to another of our equity investments in real estate. In the fourth quarter of 2013, we identified an error in the consolidated financial statements related to accounting for deferred foreign income taxes in connection with the acquisition of 15 properties acquired during 2008 through 2012. These revision adjustments resulted in a decrease in Equity in earnings of equity method investments in real estate of $0.5 million and a decrease in Provision for income taxes of less than $0.1 million for the nine months ended September 30, 2014. The impact of these revision adjustments on Distributions in excess of accumulated earnings and Accumulated other comprehensive loss was $0.5 million and less than $0.1 million, respectively, at January 1, 2014.

Statement of Cash Flows

These revisions resulted in a decrease of Net cash provided by operating activities of $0.5 million and a corresponding decrease of Net cash used in investing activities of $0.5 million in the statement of cash flows for the nine months ended September 30, 2014. These revisions had no impact on Net cash provided by financing activities in the statement of cash flows for the nine months ended September 30, 2014.

Note 3. 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 fair statement of our consolidated financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the United States, or 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 statement 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, 2014, which are included in the 2014 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.

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. 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.

CPA^®:17 – Global 9/30/2015 10-Q– 10

Notes to Consolidated Financial Statements (Unaudited)

At September 30, 2015, 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 requirement required 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 September 30, 2015, we consolidated eight VIEs. We apply accounting guidance for consolidation of VIEs to certain entities 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 support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan, can cause us to consider an entity a VIE.

We previously determined that the developer entity of our consolidated Agrokor d.d. build-to-suit investment, referred to as Agrokor 4, was a VIE and that we were its primary beneficiary. During the nine months ended September 30, 2015, in connection with the completion of the build-to-suit project, we acquired the shares of the developer entity and it is no longer a VIE.

Additionally, we own interests in single-tenant, net-leased properties leased to companies through noncontrolling interests in partnerships and limited liability companies that we do not control, but over which we exercise significant influence. We account for these investments under the equity method of accounting. At times, the carrying value of our equity investments may fall below zero for certain investments. We intend to fund our share of the 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, 2015, six of our equity investments were VIEs, and none had carrying values below zero.

Reclassifications

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

Changes to Prior Period Amounts

In accordance with the accounting guidance for equity method investments under Accounting Standards Codification, or ASC, 323-10-35-33, Increase in Level of Ownership or Degree of Influence, during 2014 we assessed our accounting for our investment in BG LLH, LLC, one of our cost method investments. Upon acquiring additional voting stock in the investment during 2014, we were required to account for our total investment in BG LLH, LLC under the equity method of accounting. In accordance with ASC 323-10-35-33, we have adjusted our financial statements retrospectively as if the equity method of accounting had been in effect during all previous periods in which the investment was held. The impact of this change on retained earnings at January 1, 2014 was $1.3 million.

Recent Accounting Requirements

The following Accounting Standards Updates, or ASUs, promulgated by the Financial Accounting Standards Board are applicable to us:

ASU 2015-16, Business Combinations (Topic 805) —ASU 2015-16 requires that an acquirer recognize adjustments identified during the business combination measurement period in the reporting period in which the adjustment amounts are determined. The effects on earnings due to changes in depreciation, amortization, or other income effects as a result of the change are also recognized in the same period’s financial statements. ASU 2015-16 also requires that acquirers present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, early adoption is permitted, and prospective application is required for adjustments that are identified after the effective date of this update. We elected to early adopt ASU 2015-16 and implemented the standard prospectively beginning July 1, 2015. The adoption did not have a material impact on our financial statements.

CPA^®:17 – Global 9/30/2015 10-Q– 11

Notes to Consolidated Financial Statements (Unaudited)

ASU 2015-03, Interest-Imputation of Interest(Subtopic 835-30) — ASU 2015-03 changes the presentation of debt issuance costs, which are currently recognized as a deferred charge (that is, an asset) and requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 does not affect the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015, early adoption is permitted and retrospective application is required. We are currently evaluating the impact of ASU 2015-03 on our consolidated financial statements.

ASU 2014-09, Revenue from Contracts with Customers (Topic 606) — ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict 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 2014-09 does not apply to our lease revenues, but will apply to reimbursed tenant costs and revenues generated from our operating properties. Additionally, this guidance modifies disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the Financial Accounting Standards Board issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year, until years beginning in 2018, with early adoption permitted but not before 2017, the original public company effective date.We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard.

Note 4. Agreements and Transactions with Related Parties

Transactions with Our Advisor

We have an advisory agreement with our advisor whereby our advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. The current advisory agreement will expire on December 31, 2015 and is scheduled to renew annually thereafter with our approval. We also have certain agreements with affiliates regarding jointly-owned investments. In addition, we reimburse our advisor for general and administrative duties performed on our behalf.

The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our advisor and other affiliates in accordance with the advisory agreement and the operating partnership agreement (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Amounts Included in the Consolidated Statements of Income
Asset management fees	$	7,422	$	6,468	$	21,864	$	19,934
Available Cash Distributions	5,837		6,111		17,690		15,380
Personnel and overhead reimbursements	3,086		3,206		9,238		9,529
Interest expense on deferred acquisition fees and loan from affiliate	113		121		246		401
Acquisition expenses	—		—		430		1,191
	$	16,458	$	15,906	$	49,468	$	46,435
Acquisition Fees Capitalized
Current acquisition fees	$	563	$	307	$	5,500	$	1,662
Deferred acquisition fees	450		247		4,182		937
	$	1,013	$	554	$	9,682	$	2,599

CPA^®:17 – Global 9/30/2015 10-Q– 12

Notes to Consolidated Financial Statements (Unaudited)

The following table presents a summary of amounts included in Due to affiliates in the consolidated financial statements (in thousands):

	September 30, 2015		December 31, 2014
Due to Affiliates
Deferred acquisition fees, including interest	$	4,604	$	9,394
Reimbursable costs	3,107		228
Asset management fees payable	2,475		2,283
Accounts payable	157		527
Current acquisition fees	7		—
Subordinated disposition fees	—		202
	$	10,350	$	12,634

Acquisition and Disposition Fees

We pay our advisor acquisition fees for structuring and negotiating investments and related mortgage financing on our behalf, a portion of which is payable upon acquisition of investments, with the remainder subordinated to the achievement of a preferred return, which is a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). Acquisition fees payable to our advisor with respect to our long-term, net-lease investments are 4.5% of the total cost of those investments and are comprised of a current portion of 2.5%, typically paid upon acquisition, and a deferred portion of 2.0%, typically paid over three years and subject to the 5.0% preferred return described above. For certain types of non-long term net-lease investments, initial acquisition fees are up to 1.75% of the equity invested plus the related acquisition fees, with no portion of the payment being deferred. Unpaid installments of deferred acquisition fees are included in Due to affiliates in the consolidated financial statements. Unpaid installments of deferred acquisition fees bear interest at an annual rate of 5.0%.

Our advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold; however, payment of such fees is subordinated to the 5.0% preferred return. These fees, which are paid at the discretion of our board of directors, are deferred and are payable to our advisor only in connection with a liquidity event.

Asset Management Fees and Available Cash Distribution

As defined in the advisory agreement, we pay our advisor asset management fees that vary based on the nature of the underlying investment. We pay 0.5% per annum of average market value for long-term net leases and certain other types of real estate investments, and 1.5% to 1.75% per annum of average equity value for certain types of securities. For 2014, the asset management fees were payable in cash or shares of our common stock at the option of our advisor. We amended the advisory agreement for 2015, so that the asset management fees are payable in cash or shares of our common stock at our option, after consultation with our advisor. If our advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, which was $9.72 as of December 31, 2014. For 2015, we paid our advisor 50.0% of its asset management fees in cash and 50.0% in shares of our common stock. For 2014, we paid our advisor 100% its asset management fees in shares of our common stock. At September 30, 2015, our advisor owned 10,029,140 shares (3.0%) of our common stock. We also distribute to our advisor, depending on the type of investments we own, up to 10.0% of available cash of the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Asset management fees and Available Cash Distributions are included in Property expenses and Net income attributable to noncontrolling interests, respectively, in the consolidated financial statements.

CPA^®:17 – Global 9/30/2015 10-Q– 13

Notes to Consolidated Financial Statements (Unaudited)

Personnel and Overhead Reimbursements

Under the terms of the advisory agreement, our advisor allocates a portion of its personnel and overhead expenses to us and the other publicly-owned, non-listed REITs that are managed by our advisor, including Corporate Property Associates 18 – Global Incorporated, which we refer to as CPA^®:18 – Global or, together with us, as the CPA^® REITs, Carey Watermark Investors Incorporated, or CWI, and Carey Watermark Investors 2 Incorporated, or CWI 2. Our advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues and those of WPC and other entities managed by WPC and its affiliates.

We reimburse our advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our advisor for the cost of personnel if these personnel provide services for transactions for which our advisor receives a transaction fee, such as acquisitions and dispositions. Under the advisory agreement currently in place, the amount of applicable personnel costs allocated to us is capped at 2.4% for 2015 and 2.2% for 2016, of pro rata lease revenues for each year. Beginning in 2017, the cap decreases to 2.0% of pro rata lease revenues for that year. Costs related to our advisor’s legal transactions group are based on a schedule of expenses for different types of transactions, including 0.25% of the total investment cost of an acquisition. Personnel and overhead reimbursements are included in General and administrative expenses in the consolidated financial statements.

Our advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period. If in any year our operating expenses exceed the 2%/25% guidelines, our advisor will have an obligation to reimburse us for such excess, subject to certain conditions. If our independent directors find that the excess expenses were justified based on any unusual and nonrecurring factors that they deem sufficient, our advisor may be paid in future years for the full amount or any portion of such excess expenses, but only to the extent that the reimbursement would not cause our operating expenses to exceed this limit in any such year. We record the reimbursement as a reduction of asset management fees at such time that a reimbursement is fixed, determinable, and irrevocable. Our operating expenses have not exceeded the amount that would require our advisor to reimburse us.

Loans from WPC

In March 2015, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us of up to $75.0 million, in the aggregate, at a rate equal to the rate at which WPC was able to borrow funds under its line of credit, for the purpose of facilitating acquisitions approved by our advisor’s investment committee that we would not otherwise have sufficient available funds to complete. All loans were made solely at the discretion of WPC’s management. On July 1, 2015, we obtained a $10.0 million loan from WPC in connection with our acquisition of six retail facilities in Illinois, North Dakota, and Wisconsin (Note 5, Note 6) with a maturity date of December 30, 2015. On July 14, 2015, we obtained an additional $15.0 million loan from WPC in connection with our acquisition of a warehouse facility in Sered, Slovakia (Note 5) with a maturity date of December 30, 2015. Both loans had a rate of London Interbank Offered Rate, or LIBOR, plus 1.1%. In June 2015, our board of directors approved us entering into a credit facility with a syndicate of lenders. We entered into a credit agreement on August 26, 2015, at which point we drew down from the Revolver (Note 11) to fully repay our outstanding loans from WPC of $25.0 million, and the WPC line of credit was terminated.

Jointly-Owned Investments and Other Transactions with Affiliates

At September 30, 2015, we owned interests ranging from 7% to 97% in jointly-owned investments, with the remaining interests held by affiliates or by third parties. We consolidate certain of these investments and account for the remainder under the equity method of accounting. We also owned an interest in a jointly-controlled tenancy-in-common interest in several properties, which we account for under the equity method of accounting (Note 7).

CPA^®:17 – Global 9/30/2015 10-Q– 14

Notes to Consolidated Financial Statements (Unaudited)

Note 5. Net Investments in Properties and Real Estate Under Construction

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands):

	September 30, 2015			December 31, 2014
Land	$	556,885		$	513,172
Buildings	2,036,204			1,883,543
Less: Accumulated depreciation	(212,992		)	(175,478		)
	$	2,380,097		$	2,221,237

The carrying value of our Real estate decreased $67.0 million from December 31, 2014 to September 30, 2015, due to the strengthening of the U.S. dollar relative to foreign currencies, particularly the euro, during the same period.

Acquisitions of Real Estate During 2015

During the nine months ended September 30, 2015, we entered into the following investments, which were deemed to be real estate asset acquisitions because we acquired the sellers’ properties and simultaneously entered into new leases in connection with these acquisitions, at a total cost of $177.2 million, including net lease intangibles of $44.5 million (Note 8) and acquisition-related costs and fees of $8.3 million, which were capitalized:

• $22.2 million for an office facility in San Antonio, Texas on January 16, 2015;

• $63.8 million for two warehouse facilities in Mszczonów and Tomaszów Mazowiecki, Poland on February 26, 2015 (dollar amount is based on the exchange rate of the euro on the date of acquisition);

• $68.8 million primarily for four retail facilities in Fargo, North Dakota and Ashwaubenon, Brookfield, and Wauwatosa, Wisconsin on June 26, 2015; and

• $22.4 million primarily for a warehouse facility in Sered, Slovakia on July 9, 2015 (dollar amount is based on the exchange rate of the euro on the date of acquisition).

During the nine months ended September 30, 2015, we placed into service four build-to-suit projects totaling $130.3 million and capitalized $4.0 million of building improvements with existing tenants.

CPA^®:17 – Global 9/30/2015 10-Q– 15

Notes to Consolidated Financial Statements (Unaudited)

Operating Real Estate

Operating real estate, which consists of our domestic self-storage operations, at cost, is summarized as follows (in thousands):

	September 30, 2015			December 31, 2014
Land	$	66,066		$	66,066
Buildings	208,157			206,793
Less: Accumulated depreciation	(28,267		)	(22,217		)
	$	245,956		$	250,642

Partial Sale

On December 1, 2011, we entered into a contract with I Shops LLC, a real estate developer, to finance the renovation of a hotel and construction of a shopping center in Orlando, Florida. As a result of the terms of that agreement, we consolidated the hotel and the shopping center. Additionally, as a condition to providing the construction loan, we entered into a contract with the developer that granted us the option to acquire a 15% equity interest in the parent company that owns I Shops LLC. However, we did not exercise the option and it expired on January 31, 2015.

On April 24, 2014, upon the substantial repayment of the construction loan by the developer, we deconsolidated our investment in the hotel as it no longer met the criteria for consolidation, which was accounted for as a partial sale due to our purchase option. The related gain on sale of real estate was $14.6 million, of which $12.4 million, or 85%, we recognized during the three months ended June 30, 2014 and $2.2 million, or 15%, we deferred until the purchase option expired, in accordance with ASC 360-20-40-3, Criteria for Recognizing Profit on Sales of Real Estate Under Full Accrual Method. We recognized the $2.2 million gain on sale of real estate during the three months ended March 31, 2015, after the option expired without being exercised on January 31, 2015. In accordance with ASU 2014-08, the results of operations for assets related to the partial sale are included in continuing operations in the consolidated financial statements.

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (in thousands):

	Nine Months Ended			Year Ended
	September 30, 2015			December 31, 2014
Beginning balance	$	110,983		$	127,935
Capitalized funds	20,916			74,420
Placed into service	(130,334		)	(96,807		)
Capitalized interest	2,200			6,661
Foreign currency translation adjustments, building improvements, and other	(1,492		)	(1,226		)
Ending balance	$	2,273		$	110,983

Capitalized Funds — During the nine months ended September 30, 2015, total capitalized funds were primarily comprised of $7.0 million in construction draws related to three existing build-to-suit projects, $11.8 million for the funding of one new build-to-suit project, which is an expansion of property acquired in a prior year, and construction draws of $1.8 million for tenant allowance for an operating property. During the year ended December 31, 2014, costs attributable to seven build-to-suit projects, including acquisition-related costs and fees related to two new build-to-suit projects, were capitalized.

Placed into Service — During the nine months ended September 30, 2015, we placed into service four build-to-suit projects totaling $130.3 million, of which one was completed and three were partially completed as of September 30, 2015. During the year ended December 31, 2014, we placed four build-to-suit projects into service, of which three were completed and one was partially completed as of December 31, 2014, in the amount of $96.8 million. Of the total, $81.9 million was reclassified to Real estate, at cost, and $14.9 million was reclassified to Operating real estate, at cost.

CPA^®:17 – Global 9/30/2015 10-Q– 16

Notes to Consolidated Financial Statements (Unaudited)

Capitalized Interest — Capitalized interest includes amortization of the mortgage discount and deferred financing costs and interest incurred during construction, totaling $2.2 million and $6.7 million for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively.

Ending Balance — At September 30, 2015, we had three open build-to-suit projects. At December 31, 2014, we had three build-to-suit projects that were incomplete. The aggregate unfunded commitment on the remaining open projects totaled approximately $3.6 million and $12.5 million at September 30, 2015 and December 31, 2014, respectively.

Note 6. 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 and Loans receivable. Operating leases are not included in finance receivables as such amounts are not recognized as an asset in the consolidated financial statements. Our Loans receivable are included in Other assets, net in the consolidated financial statements. Earnings from our Loans receivable are included in Other interest income in the consolidated financial statements.

Net Investments in Direct Financing Leases

On June 26, 2015, we entered into a net lease financing transaction for two retail facilities in Joliet, Illinois and Greendale, Wisconsin for $18.6 million, including capitalized acquisition-related costs and fees of $1.2 million.

Loans Receivable

127 West 23^rd Manager, LLC —On February 3, 2015, we provided financing of $12.6 million to a subsidiary of 127 West 23^rd Manager, LLC for the acquisition of a building in New York, New York that is intended to be developed as a hotel. The loan has an interest rate of 7% and matures on February 3, 2016, which may be extended by us for a 12-month period. In connection with this transaction, we expensed acquisition-related costs and fees of $0.1 million, which are included in Acquisition expenses in the consolidated financial statements. At September 30, 2015, the balance of the loan receivable remained $12.6 million.

1185 Broadway LLC —On January 8, 2015, we provided a mezzanine loan of $30.0 million to a subsidiary of 1185 Broadway LLC for the development of a hotel on a parcel of land in New York, New York. The mezzanine loan is collateralized by an equity interest in a subsidiary of 1185 Broadway LLC. It has an interest rate of 10% and matures on January 8, 2016, which may be extended by us for six months, up to two times. In connection with this transaction, we expensed acquisition-related costs and fees of $0.3 million, which are included in Acquisition expenses in the consolidated financial statements. The agreement also contains rights to certain fees upon maturity and an equity interest in the underlying entity that has been recorded in Other assets, net in the consolidated financial statements. At September 30, 2015, the balance of the loan receivable was $30.7 million.

China Alliance Properties Limited —On December 14, 2010, we provided financing of $40.0 million to China Alliance Properties Limited, a subsidiary of Shanghai Forte Land Co., Ltd. The financing was provided through a collateralized loan that is guaranteed by Shanghai Forte Land Co., Ltd.’s parent company, Fosun International Limited. It has an interest rate of 11% and matures on December 14, 2015. At both September 30, 2015 and December 31, 2014, the balance of the loan receivable remained $40.0 million.

Credit Quality of Finance Receivables

We generally seek investments in facilities that we believe are critical to a tenant’s business and that we believe have a low risk of tenant default. At both September 30, 2015 and December 31, 2014, none of the balances of our finance receivables were past due and we had not established any allowances for credit losses. Additionally, there were no modifications of finance receivables during the nine months ended September 30, 2015 or the year ended December 31, 2014. 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. The credit quality evaluation of our finance receivables was last updated in the third quarter of 2015.

CPA^®:17 – Global 9/30/2015 10-Q– 17

Notes to Consolidated Financial Statements (Unaudited)

A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands):

	Number of Tenants / Obligors at		Carrying Value at
Internal Credit Quality Indicator	September 30, 2015	December 31, 2014	September 30, 2015		December 31, 2014
1	—	—	$	—	$	—
2	1	1	2,263		2,259
3	11	9	469,733		429,245
4	4	3	107,646		87,921
5	—	—	—		—
			$	579,642	$	519,425

At September 30, 2015 and December 31, 2014, Other assets, net included $0.3 million and $0.6 million, respectively, of accounts receivable related to amounts billed under our direct financing leases.

Note 7. Equity Investments in Real Estate

We own equity interests in 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, the underlying investments are jointly-owned with affiliates. We account for these investments under the equity method of accounting. Earnings for each investment are recognized in accordance with each respective investment agreement and, where applicable, based upon an allocation of the investment’s net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period. As required by current authoritative accounting guidance, we periodically compare an investment’s carrying value to its estimated fair value and recognize an impairment charge to the extent that the carrying value exceeds fair value and such decline is determined to be other than temporary. Additionally, we provide funding to developers for the acquisition, development, and construction of real estate, or ADC Arrangements. Under ADC Arrangements, we have provided two loans to third-party developers of real estate projects, which we account for as equity investments as the characteristics of the arrangement with the third-party developers are more similar to a jointly-owned investment or partnership rather than a loan.

CPA^®:17 – Global 9/30/2015 10-Q– 18

Notes to Consolidated Financial Statements (Unaudited)

The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values, along with those ADC Arrangements that are recorded as equity investments (dollars in thousands):

		Ownership Interest at	Carrying Value at
Lessee/Equity Investee	Co-owner	September 30, 2015	September 30, 2015		December 31, 2014
Shelborne Property Associates, LLC (a)	Third Party	33%	$	151,451	$	152,801
C1000 Logistiek Vastgoed B.V. (b) (c) (d)	WPC	85%	61,897		71,130
BPS Nevada, LLC (e)	Third Party	15%	49,129		40,032
IDL Wheel Tenant, LLC (f)	Third Party	N/A	47,117		30,049
U-Haul Moving Partners, Inc. and Mercury Partners, LP	WPC	12%	39,735		41,028
BG LLH, LLC	Third Party	7%	39,723		42,587
Bank Pekao S.A. (b) (d)	CPA®:18 – Global	50%	27,029		31,045
State Farm	CPA®:18 – Global	50%	19,429		20,414
Madison Storage NYC, LLC and Veritas Group IX-NYC, LLC (g)	Third Party	45%	17,019		20,147
Berry Plastics Corporation	WPC	50%	15,993		16,632
Apply Sørco AS (b)	CPA®:18 – Global	49%	15,406		19,076
Tesco plc (b)	WPC	49%	12,380		14,194
Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) (b)	WPC	37%	9,595		9,935
Agrokor d.d. (referred to as Agrokor 5) (b)	CPA®:18 – Global	20%	7,975		8,760
Eroski Sociedad Cooperativa – Mallorca (b)	WPC	30%	6,964		7,662
Dick’s Sporting Goods, Inc.	WPC	45%	5,290		5,508
			$	526,132	$	531,000

__________

(a) Represents a domestic ADC Arrangement. This investment is a VIE. There was no unfunded balance on the loan related to this investment at September 30, 2015.

(b) The carrying value of this investment is affected by the impact of fluctuations in the exchange rate of the applicable foreign currency.

(c) This investment represents a tenancy-in-common interest, whereby the property is encumbered by debt for which we are jointly and severally liable. For this investment, the co-obligor is WPC and the amount due under the arrangement was approximately $75.0 million and $82.7 million at September 30, 2015 and December 31, 2014, respectively. Of these amounts, $63.8 million and $70.3 million represent the amounts we agreed to pay and are included within the carrying value of this investment at September 30, 2015 and December 31, 2014, respectively.

(d) The decrease in carrying value was partially due to distributions made to us.

(e) See Acquisition of Equity Investment below.

(f) Represents a domestic ADC Arrangement. This investment is a VIE. We provided funding of $18.3 million to this investment and capitalized $0.6 million of interest related to the investment during the nine months ended September 30, 2015. There was no unfunded balance on the loan related to this investment at September 30, 2015.

(g) In addition to our 45% equity interest, we have a 40% indirect economic interest in this investment based upon certain contractual arrangements with our partner in this entity that enable or could require us to purchase their interest.

We recognized Equity in (losses) earnings of equity method investments in real estate of $(1.1) million and $2.1 million for the three months ended September 30, 2015 and 2014, respectively, and $6.6 million and $9.2 million for the nine months ended September 30, 2015 and 2014, respectively. For certain investments, equity in earnings of equity investments is based on the hypothetical liquidation at book value model as well as some depreciation and amortization adjustments related to basis differentials. Aggregate distributions from our interests in other unconsolidated real estate investments were $31.0 million and $20.6 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015 and December 31, 2014, the unamortized basis differences on our equity investments were $27.9 million and $31.0 million, respectively. Net amortization of the basis differences reduced the carrying values of our equity investments by $1.2 million for both the three months ended September 30, 2015 and 2014, and by $3.1 million for both the nine months ended September 30, 2015 and 2014.

CPA^®:17 – Global 9/30/2015 10-Q– 19

Notes to Consolidated Financial Statements (Unaudited)

Acquisition of Equity Investment

On November 19, 2014, we acquired a preferred equity position in BPS Nevada, LLC, an entity in which we hold a 15% equity interest, for a total cost of $18.2 million, including acquisition-related costs and fees of $0.2 million. The preferred equity interest provides us with a preferred rate of return of 8% during the first four months of the term, 10% during the next four months of the term, and 12% thereafter, until November 19, 2019, the date on which the preferred equity interest is redeemable. Our equity interest and preferred equity position in BPS Nevada, LLC allow us to have significant influence over the entity. Accordingly, we account for this investment using the equity method of accounting. On February 2, 2015, we funded an additional $9.1 million, including acquisition-related costs and fees of $0.1 million, related to this investment. During the nine months ended September 30, 2015, we recognized $3.0 million of income related to this investment, which is included in Equity in earnings of equity method investments in real estate in the consolidated financial statements.

Note 8.Intangible Assets and Liabilities

In connection with our acquisitions of properties, we have recorded net lease intangibles that are being amortized over periods ranging from one year to 53 years. In addition, we have several ground lease intangibles that are being amortized over periods of up to 94 years. In-place lease intangibles and tenant relationship intangibles are included in In-place lease and tenant relationship intangible assets, net in the consolidated financial statements. Above-market rent, below-market ground lease (as lessee) intangibles, and goodwill are included in Other intangible assets, net in the consolidated financial statements. Below-market rent and above-market ground lease (as lessor) 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, 2015, we recorded net lease intangibles comprised as follows (life in years, dollars in thousands):

	Weighted-Average Life	Amount
Amortizable Intangible Assets
In-place lease	14.5	$	45,714
Above-market rent	10.0	587
		$	46,301
Amortizable Intangible Liabilities
Below-market rent	22.1	$	(1,792	)

Intangible assets and liabilities are summarized as follows (in thousands):

	September 30, 2015									December 31, 2014
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Amortizable Intangible Assets
In-place lease and tenant relationship	$	584,888		$	(146,485	)	$	438,403		$	551,569		$	(119,125	)	$	432,444
Above-market rent	89,558			(19,531		)	70,027			92,548			(16,539		)	76,009
Below-market ground leases	7,121			(288		)	6,833			7,124			(199		)	6,925
	681,567			(166,304		)	515,263			651,241			(135,863		)	515,378
Unamortizable Intangible Assets
Goodwill	304			—			304			304			—			304
Total intangible assets	$	681,871		$	(166,304	)	$	515,567		$	651,545		$	(135,863	)	$	515,682
Amortizable Intangible Liabilities
Below-market rent	$	(117,399	)	$	17,710		$	(99,689	)	$	(116,887	)	$	13,293		$	(103,594	)
Above-market ground lease	(1,145		)	28			(1,117		)	(1,145		)	17			(1,128		)
Total intangible liabilities	$	(118,544	)	$	17,738		$	(100,806	)	$	(118,032	)	$	13,310		$	(104,722	)

CPA^®:17 – Global 9/30/2015 10-Q– 20

Notes to Consolidated Financial Statements (Unaudited)

Net amortization of intangibles, including the effect of foreign currency translation, was $9.5 million and $9.4 million for the three months ended September 30, 2015 and 2014, respectively and $28.5 million for both the nine months ended September 30, 2015 and 2014. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income; amortization of below-market ground lease and above-market ground lease intangibles is included in Property expenses; and amortization of in-place lease and tenant relationship intangibles is included in Depreciation and amortization.

Based on the intangible assets and liabilities recorded at September 30, 2015, scheduled annual net amortization of intangibles for the remainder of 2015, each of the next four calendar years following December 31, 2015, and thereafter is as follows (in thousands):

Years Ending December 31,	Net Increase in Rental Income			Increase to Amortization/Property Expenses		Net
2015 (remaining)	$	(327	)	$	9,636	$	9,309
2016	(480		)	34,636		34,156
2017	(252		)	32,051		31,799
2018	(229		)	31,949		31,720
2019	(220		)	31,903		31,683
Thereafter	(28,154		)	303,944		275,790
	$	(29,662	)	$	444,119	$	414,457

Note 9. 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 swaps and foreign currency forward contracts; and Level 3, for securities and other derivative assets 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.

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.

Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of foreign currency forward contracts, stock warrants, embedded derivatives, and a swaption (Note 10). The foreign currency forward contracts and swaption were measured at fair value using readily observable market inputs, such as quotations on interest rates, and 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 and embedded derivatives were measured at fair value using internal valuation models that incorporated market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because they are not traded in an active market.

Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency forward contracts (Note 10). The interest rate swaps and foreign currency forward contracts 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.

We did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during either the nine months ended September 30, 2015 or 2014. Gains and losses (realized and unrealized) included in earnings are reported in Other income and (expenses) in the consolidated financial statements.

CPA^®:17 – Global 9/30/2015 10-Q– 21

Notes to Consolidated Financial Statements (Unaudited)

Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):

		September 30, 2015				December 31, 2014
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-recourse debt (a)	3	$	1,850,842	$	1,896,434	$	1,896,489	$	1,961,905
Senior Credit Facility (b)	2	53,706		53,706		—		—
Loans receivable (a)	3	83,294		83,294		40,000		41,990
Other securities (c)	3	6,650		9,059		9,381		9,649
Deferred acquisition fees payable (d)	3	4,451		4,488		9,009		10,077
CMBS (e)	3	2,585		8,392		3,053		8,899

___________

(a) We determined the estimated fair value of our non-recourse debt using a discounted cash flow model with rates that take into account the credit of the tenant/obligor and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate. Additionally, for our loans receivable with China Alliance Properties Limited, 127 West 23rd Manager, LLC and 1185 Broadway LLC, we estimated that the fair values of the loans receivable approximated their carrying values.

(b) We determined the estimated fair value of our Senior Credit Facility (Note 11) using a discounted cash flow model with rates that take into account the market-based credit spread and our credit quality.

(c) Amounts at September 30, 2015 and December 31, 2014 primarily reflect our interest in a foreign debenture, which is included in Other assets, net in the consolidated financial statements.

(d) We determined the estimated fair value of our deferred acquisition fees based on an estimate of discounted cash flows using two significant unobservable inputs, which are the leverage adjusted unsecured spread of 205 basis points and an illiquidity adjustment of 75 basis points. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement.

(e) The carrying value of our commercial mortgage-backed securities, or CMBS, is inclusive of impairment charges recognized during the nine months ended September 30, 2015 and the three and nine months ended September 30, 2014, as well as accretion related to the estimated cash flows expected to be received. There were no purchases, sales, or impairment charges recognized during the three months ended September 30, 2015.

We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both September 30, 2015 and December 31, 2014.

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 investments in real estate held for use for which an impairment indicator is identified, we follow a two-step process to determine whether the investment is impaired 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 estimated 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 perform 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 for 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.

CPA^®:17 – Global 9/30/2015 10-Q– 22

Notes to Consolidated Financial Statements (Unaudited)

The following table presents information about our assets that were measured at fair value on a non-recurring basis (in thousands):

	Three Months Ended September 30, 2015				Three Months Ended September 30, 2014
	Fair Value Measurements		Total Impairment Charges		Fair Value Measurements		Total Impairment Charges
Impairment Charges
CMBS	$	—	$	—	$	187	$	127

	Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
	Fair Value Measurements		Total Impairment Charges		Fair Value Measurements		Total Impairment Charges
Impairment Charges
CMBS	$	1,478	$	1,023	$	187	$	127

During the three months ended September 30, 2015, we did not recognize any impairment charges. During the nine months ended September 30, 2015, we incurred other-than-temporary impairment charges on two tranches in our CMBS portfolio totaling $1.0 million, to reduce their carrying values to their estimated fair values as a result of non-performance. The fair value measurements related to the impairment charges were derived from third-party appraisals, which were based on input from dealers, buyers, and other market participants, as well as updates on prepayments, losses, and delinquencies within our CMBS portfolio.

During the three and nine months ended September 30, 2014, we incurred an other-than-temporary impairment charge on one tranche in our CMBS portfolio of $0.1 million to reduce its carrying value to its estimated fair value as a result of non-performance. The fair value measurement related to the impairment charge was derived from third-party appraisals, which were based on input from dealers, buyers, and other market participants, as well as updates on prepayments, losses, and delinquencies within our CMBS portfolio.

Note 10. 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 assets and liabilities, including the Senior Credit Facility (Note 11). 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 our other investments due to changes in interest rates or other market factors. We own investments in Europe and Asia and are subject to risks associated with fluctuating foreign currency exchange rates.

Derivative Financial Instruments

When we use derivative instruments, it is generally to reduce 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 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.

CPA^®:17 – Global 9/30/2015 10-Q– 23

Notes to Consolidated Financial Statements (Unaudited)

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 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 change in the fair value and/or the net settlement of the derivative are reported in Other comprehensive loss as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive loss into earnings when the hedged investment is either sold or substantially liquidated. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

The following table sets forth certain information regarding our derivative instruments (in thousands):

Derivatives Designated as Hedging Instruments		Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
	Balance Sheet Location	September 30, 2015		December 31, 2014		September 30, 2015			December 31, 2014
Foreign currency forward contracts	Other assets, net	$	39,466	$	24,051	$	—		$	—
Interest rate swaps	Other assets, net	—		71		—			—
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(13,691		)	(14,554		)
Derivatives Not Designated as Hedging Instruments
Foreign currency forward contracts	Other assets, net	—		5,120		—			—
Stock warrants	Other assets, net	1,914		1,848		—			—
Swaption	Other assets, net	328		505		—			—
Embedded credit derivatives	Other assets, net	58		499		—			—
Foreign currency forward contracts	Accounts payable, accrued expenses and other liabilities	—		—		—			(2,904		)
Total derivatives		$	41,766	$	32,094	$	(13,691	)	$	(17,458	)

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. At both September 30, 2015 and December 31, 2014, no cash collateral had been posted or received for any of our derivative positions.

CPA^®:17 – Global 9/30/2015 10-Q– 24

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 Loss (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives in Cash Flow Hedging Relationships	2015			2014			2015			2014
Interest rate swaps	$	(2,110	)	$	500		$	(43	)	$	(3,920	)
Foreign currency forward contracts	(978		)	18,208			15,626			17,799
Interest rate cap (a)	—			227			—			913
Foreign currency collars	—			(91		)	—			(290		)
Derivatives in Net Investment Hedging Relationships (b)
Foreign currency forward contracts	(20		)	—			366			—
Derivatives Formerly in Net Investment Hedging Relationships (c)
Foreign currency forward contracts	—			4,192			—			4,511
Total	$	(3,108	)	$	23,036		$	15,949		$	19,013

		Amount of Gain (Loss) Reclassified from Other Comprehensive Loss into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Reclassified to Income	Three Months Ended September 30,						Nine Months Ended September 30,
		2015			2014			2015			2014
Foreign currency forward contracts	Other income and (expenses)	$	2,296		$	526		$	6,662		$	425
Interest rate swaps	Interest expense	(1,913		)	(1,811		)	(6,044		)	(5,259		)
Interest rate cap	Interest expense	—			(226		)	—			(913		)
Foreign currency collars	Other income and (expenses)	—			557			—			751
Total		$	383		$	(954	)	$	618		$	(4,996	)

__________

(a) Includes gains attributable to a noncontrolling interest of $0.1 million and $0.4 million for the three and nine months ended September 30, 2014, respectively.

(b) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive loss until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.

(c) In September 2014, a new forward contract was executed to offset this existing forward contract. As a result of this transaction, this existing forward contract was de-designated as a hedging instrument. However, the effective portion of the change in fair value (through the date of de-designation) and the settlement of this contract are reported in the foreign currency translation adjustment section of Other comprehensive loss until the underlying investment is sold, at which time we will reclassify the gain or loss to earnings. The forward contract matured during the three months ended September 30, 2015.

Amounts reported in Other comprehensive loss related to interest rate swaps will be reclassified to Interest expense as interest payments are made on our variable-rate debt. Amounts reported in Other comprehensive loss related to foreign currency derivative contracts will be reclassified to Other income and (expenses) when the hedged foreign currency contracts are settled. At September 30, 2015, we estimated that an additional $7.4 million and $7.0 million will be reclassified as interest expense and as other expenses, respectively, during the next 12 months.

CPA^®:17 – Global 9/30/2015 10-Q– 25

Notes to Consolidated Financial Statements (Unaudited)

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 Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended September 30,						Nine Months Ended September 30,
		2015			2014			2015			2014
Swaption	Other income and (expenses)	$	(212	)	$	(83	)	$	(177	)	$	(512	)
Embedded credit derivatives	Other income and (expenses)	(26		)	725			235			1,006
Foreign currency forward contracts	Other income and (expenses)	—			445			(16		)	327
Stock warrants	Other income and (expenses)	—			132			66			66
Derivatives in Cash Flow Hedging Relationships
Interest rate swaps (a)	Interest expense	61			91			233			216
Total		$	(177	)	$	1,310		$	341		$	1,103

__________

(a) Relates to the ineffective portion of the hedging relationship.

See below for information regarding why we enter into our derivative instruments and concerning derivative instruments owned by unconsolidated investments, which are excluded from the tables above.

Interest Rate Swaps and Swaption

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage 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 swaptions 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 face amount on which the swaps are based is not exchanged. A swaption gives us the right but not the obligation to enter into an interest rate swap, of which the terms and conditions are set on the trade date, on a specified date in the future. Our objective in using these derivatives is to limit our exposure to interest rate movements.

The interest rate swaps and swaption that our consolidated subsidiaries had outstanding at September 30, 2015 are summarized as follows (currency in thousands):

Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at September 30, 2015(a)
Designated as Cash Flow Hedging Instruments
Interest rate swaps	13	232,486	USD	$	(9,129	)
Interest rate swaps	7	190,447	EUR	(4,562		)
Not Designated as Hedging Instrument
Swaption	1	13,230	USD	328
				$	(13,363	)

__________

(a) Fair value amount is based on the exchange rate of the euro at September 30, 2015, as applicable.

CPA^®:17 – Global 9/30/2015 10-Q– 26

Notes to Consolidated Financial Statements (Unaudited)

The interest rate swap that one of our unconsolidated jointly-owned investments had outstanding at September 30, 2015, which was designated as a cash flow hedge, is summarized as follows (currency in thousands):

Interest Rate Derivative	Ownership Interest in Investee at September 30, 2015	Number of Instruments	Notional Amount		Fair Value at September 30, 2015(a)
Interest rate swap	85%	1	11,252	EUR	$	(531	)

__________

(a) Fair value amount is based on the exchange rate of the euro at September 30, 2015.

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 Japanese yen, the Norwegian krone, and the Indian rupee. 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. 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 consists of a written call option and a purchased put option to sell the foreign currency. These instruments lock the range in which the foreign currency exchange rate may fluctuate.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at September 30, 2015 (currency in thousands):

Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at September 30, 2015(a)
Designated as Cash Flow Hedging Instruments
Foreign currency forward contracts	83	164,667	EUR	$	34,886
Foreign currency forward contracts	17	12,239	NOK	215
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts	10	1,031,827	JPY	4,225
Foreign currency forward contracts	5	7,996	NOK	140
				$	39,466

__________

(a) Fair value amounts are based on the exchange rate of the euro, the Norwegian krone, or the Japanese yen, as applicable, at September 30, 2015.

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 September 30, 2015. At September 30, 2015, our total credit exposure was $38.7 million and the maximum exposure to any single counterparty was $15.9 million.

Some of the agreements 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 September 30, 2015, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives that were in a net liability position was $15.5 million and $18.5 million at September 30, 2015 and December 31, 2014, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at September 30, 2015 or December 31, 2014, we could have been required to settle our obligations under these agreements at their aggregate termination value of $16.1 million and $19.1 million, respectively.

CPA^®:17 – Global 9/30/2015 10-Q– 27

Notes to Consolidated Financial Statements (Unaudited)

Information about Significant Tenants

For the nine months ended September 30, 2015, the following tenants represented 5% or more of total lease revenues:

• The New York Times Company (9%);

• Metro Cash & Carry Italia S.p.A. (8%);

• Agrokor d.d. (7%);

• KBR, Inc. (7%); and

• General Parts Inc., Golden State Supply LLC, Straus-Frank Enterprises LLC, General Parts Distribution LLC, and Worldpac Inc. (6% in the aggregate).

Note 11. Debt

Non-Recourse Debt

Non-recourse debt consists of mortgage notes payable, which are collateralized by the assignment of real estate properties with an aggregate carrying value of $2.7 billion at September 30, 2015 and $2.9 billion at December 31, 2014. At September 30, 2015, our mortgage notes payable bore interest at fixed annual rates ranging from 2.0% to 7.5% and variable contractual annual rates ranging from 1.6% to 6.1%, with maturity dates ranging from August 2016 to 2039.

During the nine months ended September 30, 2015, we obtained five new non-recourse mortgage financings and one refinancing totaling $108.2 million, with a weighted-average annual interest rate of 4.3% and term of 9.5 years, of which $36.3 million related to investments acquired during prior years and $71.9 million related to investments acquired during the current year.

During the nine months ended September 30, 2015, we repaid four non-recourse mortgage loans with outstanding principal balances totaling $93.7 million and a weighted-average interest rate of 6.2%. Two of these loans were repaid prior to maturity and had outstanding principal balances totaling $57.5 million and a weighted-average remaining term to maturity of 4.9 years.  In addition, three of these non-recourse mortgages encumbered properties of jointly-owned investments with our advisor, WPC, which we consolidate. WPC contributed $19.9 million in connection with the repayment of these non-recourse mortgages. We recognized a loss on extinguishment of debt of $0.3 million on one of the non-recourse mortgages paid prior to maturity, which is included in Other income and (expenses) in the consolidated financial statements.

Senior Credit Facility

On August 26, 2015, we entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and a syndicate of other lenders. The Credit Agreement provides for a $200.0 million senior unsecured revolving credit facility, or the Revolver, and a $50.0 million delayed-draw term loan facility, or the Term Loan. We refer to the Revolver and the Term Loan together as the Senior Credit Facility, which has a maximum aggregate principal amount of $250.0 million and an accordion feature of $250.0 million, subject to lender approval. The Senior Credit Facility is scheduled to mature on August 26, 2018, which may be extended by us for two 12-month periods.

The Senior Credit Facility provides for an annual interest rate of either (i) the Eurocurrency Rate or (ii) the Base Rate, in each case plus the Applicable Rate (each as defined in the Credit Agreement). With respect to the Revolver, the Applicable Rate on Eurocurrency loans and letters of credit ranges from 1.50% to 2.25% (based on LIBOR) and the Applicable Rate on Base Rate loans ranges from 0.50% to 1.25% (as defined in the Credit Agreement), depending on our leverage ratio. With respect to the Term Loan, the Applicable Rate on Eurocurrency loans and letters of credit ranges from 1.45% to 2.20% (based on LIBOR) and the Applicable Rate on Base Rate loans ranges from 0.45% to 1.20% (as defined in the Credit Agreement), depending on our leverage ratio. In addition, we pay a fee of either 0.15% or 0.30% on the unused portion of the Senior Credit Facility. If usage of the Senior Credit Facility is equal to or greater than 50% of the Aggregate Commitments, the Unused Fee Rate will be 0.15%, and if usage of the Senior Credit Facility is less than 50% of the Aggregate Commitments, the Unused Fee Rate will be 0.30%. In connection with the transaction, we incurred costs of $1.9 million, which are being amortized over the remaining term of the Senior Credit Facility.

At September 30, 2015, availability under the Senior Credit Facility was $196.2 million, the outstanding balance under the Revolver was $53.8 million and we had not drawn on our Term Loan. At September 30, 2015, interest was computed on the Senior Credit Facility at the annual interest rate consisting of LIBOR plus 1.60%. The Revolver will be used for the working capital needs of the Company and its subsidiaries as well as for other general corporate purposes.

CPA^®:17 – Global 9/30/2015 10-Q– 28

Notes to Consolidated Financial Statements (Unaudited)

We are required to ensure that the total Restricted Payments (as defined in the Credit Agreement) in an aggregate amount in any fiscal year does not exceed the amount of Restricted Payments required in order for us to (i) maintain our REIT status and (ii) avoid the payment of federal or state income or excise tax. Restricted Payments include quarterly dividends and the total amount of shares repurchased by us, if any, in excess of $100.0 million per year. In addition to placing limitations on dividend distributions and share repurchases, the Credit Agreement also stipulates certain customary financial covenants. We were in compliance with all such covenants at September 30, 2015.

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of 2015, each of the next four calendar years following December 31, 2015, and thereafter are as follows (in thousands):

Years Ending December 31,	Total
2015 (remainder)	$	6,072
2016	233,447
2017	346,598
2018 (a)	197,918
2019	38,556
Thereafter through 2039	1,084,377
	1,906,968
Unamortized discount, net	(2,420		)
Total	$	1,904,548

__________

(a) Includes $53.8 million outstanding under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms.

Certain amounts in the table above are based on the applicable foreign currency exchange rate at September 30, 2015. The carrying value of our Non-recourse debt decreased by $39.8 million from December 31, 2014 to September 30, 2015 due to the strengthening of the U.S. dollar relative to foreign currencies, particularly the euro, during the same period.

Note 12. Commitments and Contingencies

At September 30, 2015, 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. See Note 5 for unfunded construction commitments.

CPA^®:17 – Global 9/30/2015 10-Q– 29

Notes to Consolidated Financial Statements (Unaudited)

Note 13. Equity

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 September 30, 2015
	Gains and Losses on Derivative Instruments			Gains and Losses on Marketable Securities			Foreign Currency Translation Adjustments			Total
Beginning balance	$	26,118		$	(92	)	$	(147,368	)	$	(121,342	)
Other comprehensive (loss) income before reclassifications	(2,759		)	7			(1,100		)	(3,852		)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	1,913			—			—			1,913
Other income and (expenses)	(2,296		)	—			—			(2,296		)
Total	(383		)	—			—			(383		)
Net current-period Other comprehensive (loss) income	(3,142		)	7			(1,100		)	(4,235		)
Net current-period Other comprehensive income attributable to noncontrolling interests	—			—			(103		)	(103		)
Ending balance	$	22,976		$	(85	)	$	(148,571	)	$	(125,680	)

	Three Months Ended September 30, 2014
	Gains and Losses on Derivative Instruments			Gains and Losses on Marketable Securities			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(21,367	)	$	(344	)	$	(2,307	)	$	(24,018	)
Other comprehensive (loss) income before reclassifications	17,890			77			(52,023		)	(34,056		)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	2,037			—			—			2,037
Other income and (expenses)	(1,083		)	—			—			(1,083		)
Total	954			—			—			954
Net current-period Other comprehensive (loss) income	18,844			77			(52,023		)	(33,102		)
Net current-period Other comprehensive (income) loss attributable to noncontrolling interests	(102		)	—			905			803
Ending balance	$	(2,625	)	$	(267	)	$	(53,425	)	$	(56,317	)

CPA^®:17 – Global 9/30/2015 10-Q– 30

Notes to Consolidated Financial Statements (Unaudited)

	Nine Months Ended September 30, 2015
	Gains and Losses on Derivative Instruments			Gains and Losses on Marketable Securities			Foreign Currency Translation Adjustments			Total
Beginning balance	$	7,311		$	(106	)	$	(88,212	)	$	(81,007	)
Other comprehensive income (loss) before reclassifications	16,283			21			(60,990		)	(44,686		)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	6,044			—			—			6,044
Other income and (expenses)	(6,662		)	—			—			(6,662		)
Total	(618		)	—			—			(618		)
Net current-period Other comprehensive income (loss)	15,665			21			(60,990		)	(45,304		)
Net current-period Other comprehensive loss attributable to noncontrolling interests	—			—			631			631
Ending balance	$	22,976		$	(85	)	$	(148,571	)	$	(125,680	)

	Nine Months Ended September 30, 2014
	Gains and Losses on Derivative Instruments			Gains and Losses on Marketable Securities			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(16,717	)	$	(391	)	$	3,666		$	(13,442	)
Other comprehensive (loss) income before reclassifications	9,507			124			(58,093		)	(48,462		)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	6,172			—			—			6,172
Other income and (expenses)	(1,176		)	—			—			(1,176		)
Total	4,996			—			—			4,996
Net current-period Other comprehensive (loss) income	14,503			124			(58,093		)	(43,466		)
Net current-period Other comprehensive (income) loss attributable to noncontrolling interests	(411		)	—			1,002			591
Ending balance	$	(2,625	)	$	(267	)	$	(53,425	)	$	(56,317	)

Distributions Declared

During the third quarter of 2015, our board of directors declared a quarterly distribution of $0.1625 per share, which was paid on October 15, 2015 to stockholders of record on September 30, 2015, in the amount of $54.4 million.

CPA^®:17 – Global 9/30/2015 10-Q– 31

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 Operations 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. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 2014 Annual Report.

Business Overview

As described in more detail in Item 1 of the 2014 Annual Report, we are a publicly-owned, non-listed REIT that invests primarily in commercial properties leased to companies both domestically and internationally. As opportunities arise, we also make other types of commercial real estate-related investments. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and foreign currency exchange rates. We were formed in 2007 and are managed by our advisor. We hold substantially all of our assets and conduct substantially all of our business through our Operating Partnership. We are the general partner of, and own 99.99% of the interests in, the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

Significant Developments

Foreign Currency Fluctuation

We own investments outside the United States, primarily in Europe, and as a result, are subject to risk from exchange rate fluctuations in various foreign currencies, primarily the euro. The average exchange rate of the U.S. dollar in relation to the euro decreased by approximately 16.2% and 17.8% during the three and nine months ended September 30, 2015, respectively, compared to the same periods in 2014, resulting in a negative impact on the results of operations for our euro-denominated investments during the three and nine months ended September 30, 2015, compared to the same periods in 2014. We try to manage our exposure related to fluctuations in exchange rates of the U.S. dollar relative to the respective currencies of our foreign operations by entering into hedging arrangements utilizing derivative instruments, such as foreign currency forward contracts and collars. We also try to manage our exposure related to fluctuations in the exchange rate between the U.S. dollar and the euro by incurring non-recourse debt denominated in the euro, including euro-denominated non-recourse debt.

Senior Credit Facility

In August 2015, we entered into a Credit Agreement with a syndicate of banks that provides for a $250.0 million Senior Credit Facility with a maximum aggregate principal amount of $250.0 million and an accordion feature of $250.0 million, subject to lender approval. The Senior Credit Facility is scheduled to mature on August 26, 2018, which may be extended by us for two 12-month periods. At September 30, 2015, the outstanding balance under the Senior Credit Facility was $53.8 million (Note 11).

New Senior Management Responsibilities

On August 5, 2015, we made the following changes in senior management responsibilities:

• Hisham A. Kader, who was the Chief Accounting Officer of CPA^®:17 – Global, became our Chief Financial Officer, replacing Catherine D. Rice who remains Managing Director; and

• ToniAnn Sanzone, who was the Global Corporate Controller of CPA^®:17 – Global, became our Chief Accounting Officer.

CPA^®:17 – Global 9/30/2015 10-Q– 32

Portfolio Overview

We intend to continue to acquire a diversified portfolio of income-producing commercial real estate properties and other real estate-related assets. We expect to make these investments both domestically and internationally. Portfolio information is provided on a consolidated basis to facilitate the review of our accompanying consolidated financial statements. In addition, we provide such information on a pro rata basis 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

	September 30, 2015			December 31, 2014
Number of net-leased properties	375			365
Number of operating properties (a)	72			72
Number of tenants (b)	113			112
Total square footage (in thousands) (c)	44,873			41,243
Occupancy (b)	100.0		%	100.0		%
Weighted-average lease term (in years) (b)	14.0			14.1
Number of countries	12			11
Total assets (in thousands) (d)	$	4,540,326		$	4,605,897
Net investments in real estate (in thousands) (d)	3,124,674			3,062,287

	Nine Months Ended September 30,
	2015			2014
Acquisition volume — consolidated (in millions) (d) (e) (f)	$	250.8		$	75.2
Acquisition volume — pro rata (in millions) (c) (e) (f)	259.9			173.7
Financing obtained — consolidated (in millions) (d) (g)	108.2			81.9
Financing obtained — pro rata (in millions) (c) (g) (h)	108.2			127.0
Average U.S. dollar/euro exchange rate (i)	1.1148			1.3566
Change in the U.S. CPI (j)	1.3		%	2.1		%
Change in the Harmonized Index of Consumer Prices (j)	0.3		%	0.2		%

__________

(a) Operating properties are comprised of full or partial ownership interests in 71 self-storage properties, with an average occupancy of 90.2% at September 30, 2015, and one hotel, all of which are managed by third parties.

(b) Excludes operating properties.

(c) Represents pro rata basis. See Terms and Definitions below for a description of pro rata amounts.

(d) Represents consolidated basis.

(e) Includes build-to-suit transactions, which are reflected as the total commitment for the build-to-suit funding.

(f) Includes acquisition-related costs and fees, which are included in Acquisition expenses in the consolidated financial statements.

(g) Includes a refinancing of $5.1 million obtained during the nine months ended September 30, 2015. Includes a refinancing of $24.9 million obtained during the nine months ended September 30, 2014.

(h) Financing on a pro rata basis during the nine months ended September 30, 2014 includes our share of the non-recourse mortgage financing related to our Bank Pekao S.A. and Agrokor 5 investments.

(i) The average exchange rate for the U.S. dollar in relation to the euro decreased during the nine months ended September 30, 2015 as compared to the same period in 2014, resulting in a negative impact on earnings in the current year period for our euro-denominated investments.

(j) Many of our lease agreements include contractual increases indexed to changes in the U.S. Consumer Price Index, or CPI, or similar indices.

CPA^®:17 – Global 9/30/2015 10-Q– 33

Net-Leased Portfolio

The tables below represent information about our net-leased portfolio on a consolidated and pro rata basis and, accordingly, exclude all operating properties at September 30, 2015. See Terms and Definitions below for a description of pro rata amounts and ABR.

Top Ten Tenants by ABR

(in thousands, except percentages)

	Consolidated				Pro Rata
Tenant/Lease Guarantor	ABR		Percent		ABR		Percent
Metro Cash & Carry Italia S.p.A. (a)	$	27,345	9	%	$	27,345	8	%
The New York Times Company	26,448		8	%	14,546		4	%
Agrokor d.d. (a)	21,919		7	%	23,185		7	%
General Parts Inc., Golden State Supply LLC, Straus-Frank Enterprises LLC, General Parts Distribution LLC, and Worldpac Inc.	17,653		6	%	17,653		5	%
KBR, Inc.	14,123		5	%	14,123		4	%
Lineage Logistics Holdings, LLC	13,682		4	%	13,682		4	%
Blue Cross and Blue Shield of Minnesota, Inc.	11,966		4	%	11,966		4	%
IDL Master Tenant, LLC	10,290		3	%	10,290		3	%
Eroski Sociedad Cooperativa (a)	9,184		3	%	9,847		3	%
DTS Distribuidora Television Digital SA (a)	7,929		2	%	7,929		2	%
Total	$	160,539	51	%	$	150,566	44	%

__________

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

Portfolio Diversification by Geography

(in thousands, except percentages)

	Consolidated				Pro Rata
Region	ABR		Percent		ABR		Percent
United States
South	$	64,093	20	%	$	69,653	20	%
Midwest	58,588		19	%	63,578		19	%
East	55,285		18	%	42,780		12	%
West	30,100		10	%	29,489		9	%
United States Total	208,066		67	%	205,500		60	%
International
Italy	25,744		8	%	25,744		7	%
Croatia	21,919		7	%	23,185		7	%
Spain	17,113		5	%	17,776		5	%
Poland	15,824		5	%	20,337		6	%
Germany	10,568		3	%	19,912		6	%
United Kingdom	5,879		2	%	5,879		2	%
Other (a)	7,831		3	%	24,937		7	%
International Total	104,878		33	%	137,770		40	%
Total	$	312,944	100	%	$	343,270	100	%

__________

CPA^®:17 – Global 9/30/2015 10-Q– 34

(a) Consolidated includes ABR from tenants in the Netherlands, Japan, and Slovakia. Pro rata includes ABR from tenants in the aforementioned countries plus Hungary and Norway.

Portfolio Diversification by Property Type

(in thousands, except percentages)

	Consolidated				Pro Rata
Property Type	ABR		Percent		ABR		Percent
Office	$	97,519	31	%	$	95,641	28	%
Retail	79,113		25	%	90,291		26	%
Warehouse	72,069		23	%	88,315		26	%
Industrial	48,295		16	%	48,920		14	%
Other (a)	15,948		5	%	20,103		6	%
Total	$	312,944	100	%	$	343,270	100	%

__________

(a) Consolidated includes ABR from tenants with the following property types: learning center and sports facility. Pro rata includes ABR from tenants with the aforementioned property types and self-storage.

Portfolio Diversification by Tenant Industry

(in thousands, except percentages)

	Consolidated				Pro Rata
Industry Type	ABR		Percent		ABR		Percent
Retail Stores	$	86,607	28	%	$	99,621	29	%
Business Services	37,337		12	%	39,798		12	%
Grocery	31,102		10	%	47,675		14	%
Media: Advertising, Printing, and Publishing	29,231		9	%	17,330		5	%
Capital Equipment	13,215		4	%	13,215		4	%
Insurance	11,966		4	%	15,586		5	%
Consumer Services	10,698		3	%	11,817		3	%
Transportation: Cargo	10,680		3	%	12,135		4	%
Automotive	10,234		3	%	9,183		3	%
Media: Broadcasting and Subscription	9,611		3	%	9,611		3	%
Consumer Goods: Non-Durable	9,362		3	%	7,336		2	%
Hotel, Gaming, and Leisure	8,519		3	%	8,560		2	%
Beverage, Food, and Tobacco	8,354		3	%	8,354		2	%
Healthcare and Pharmaceuticals	6,626		2	%	6,626		2	%
High Tech Industries	6,289		2	%	5,174		2	%
Telecommunications	6,145		2	%	6,187		2	%
Banking	4,546		2	%	8,993		2	%
Containers, Packing, and Glass	3,854		1	%	7,502		2	%
Other (a)	8,568		3	%	8,567		2	%
Total	$	312,944	100	%	$	343,270	100	%

__________

(a) Includes ABR from tenants in the following industries: transportation: consumer; aerospace and defense; chemicals, plastics, and rubber; construction and building; consumer goods: durable; metals and mining; real estate; finance; and environmental industries.

CPA^®:17 – Global 9/30/2015 10-Q– 35

Lease Expirations

(in thousands, except percentages and number of leases)

	Consolidated					Pro Rata
Year of Lease Expiration (a)	Number of Leases Expiring	ABR		Percent		Number of Leases Expiring	ABR		Percent
Remaining 2015 (b)	10	$	2,666	1	%	11	$	1,086	—	%
2016	9	1,059		—	%	10	1,100		—	%
2017	4	576		—	%	4	576		—	%
2018	2	124		—	%	5	147		—	%
2019	5	2,481		1	%	5	2,481		1	%
2020	5	242		—	%	5	242		—	%
2021	5	1,971		1	%	5	1,560		1	%
2022	1	2,466		1	%	2	3,913		1	%
2023	1	76		—	%	3	4,523		1	%
2024	7	38,882		12	%	11	32,457		9	%
2025	15	16,937		5	%	15	16,937		5	%
2026	10	11,218		4	%	16	22,802		7	%
2027	23	30,281		10	%	23	30,281		9	%
2028	26	38,168		12	%	28	42,297		12	%
2029	4	6,308		2	%	4	6,308		2	%
Thereafter	54	159,489		51	%	58	176,560		52	%
Total	181	$	312,944	100	%	205	$	343,270	100	%

__________

(a) Assumes tenant does not exercise renewal option.

(b) Month-to-month leases are included in 2015 ABR.

Self-Storage Summary

Our self-storage properties had an average occupancy rate of 90.2% at September 30, 2015. As of September 30, 2015, our self-storage portfolio was comprised as follows (square footage in thousands):

State	Number of Properties	Square Footage
California	29	2,079
Illinois	13	900
Florida	7	486
Texas	5	437
Hawaii	4	259
Louisiana	3	196
Georgia	2	79
Alabama	1	130
North Carolina	1	80
Mississippi	1	61
Consolidated Total	66	4,707
New York (45% ownership interest)	5	284
Pro Rata Total (a)	71	4,991

__________

(a) See Terms and Definitions below for a description of pro rata amounts.

CPA^®:17 – Global 9/30/2015 10-Q– 36

Terms and Definitions

Pro Rata Metrics— The portfolio information above contains certain metrics prepared under the pro rata consolidation method. 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 the full consolidation method, 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, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we present our proportionate share, based on our economic ownership of these jointly-owned investments, of the assets, liabilities, revenues, and expenses of those investments.

ABR —ABR represents contractual minimum annualized base rent for our net-leased properties. ABR is not applicable to operating properties.

Financial Highlights

(in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014 (a)		2015			2014 (a)
Total revenues	$	108,202	$	97,987	$	316,620		$	297,923
Net income attributable to CPA®:17 – Global	20,052		10,290		63,071			53,696
Cash distributions paid	54,182		52,485		161,481			156,096
Net cash provided by operating activities					185,087			152,785
Net cash used in investing activities					(280,762		)	(140,321		)
Net cash used in financing activities					(78,756		)	(86,692		)
Supplemental financial measures:
FFO attributable to CPA®:17 – Global (b)	54,759		41,800		162,553			145,556
MFFO attributable to CPA®:17 – Global (b)	47,908		40,673		147,953			140,570

__________

(a) In the course of preparing our 2014 consolidated financial statements, we discovered an error related to our accounting for a subsidiary’s functional currency. We corrected this error, and other errors previously recorded as out-of-period adjustments, and revised our consolidated financial statements for all prior periods impacted. Accordingly, our financial results for the prior periods presented herein have been revised for the correction of such errors (Note 2).

(b) We consider the performance metrics listed above, including Funds from operations, or FFO, and Modified funds from operations, or MFFO, which are supplemental measures that are not defined by GAAP, both referred to as non-GAAP measures, to be important measures in the evaluation of our results of operations and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objective of funding distributions to stockholders. See Supplemental Financial Measures below for our definitions of these non-GAAP measures and reconciliations to their most directly comparable GAAP measures.

Total revenues and net income attributable to CPA^®:17 – Global and MFFO increased for the three and nine months ended September 30, 2015, compared to the same periods in 2014, primarily due to an increase in revenues received from properties acquired and build-to-suit projects placed into service after September 30, 2014 (Note 5, Note 6). The increase during the nine months ended September 30, 2015 was also due to proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015. This increase was partially offset by a decrease in Other real estate income due to the sale of a hotel that was classified as an operating property in April 2014 (Note 5) and the impact of the strengthening of the U.S. dollar relative to foreign currencies.

CPA^®:17 – Global 9/30/2015 10-Q– 37

Results of Operations

We evaluate our results of operations with a primary focus on our ability to generate cash flow necessary to meet our objectives of funding distributions to stockholders and increasing the value in our real estate investments. As a result, our assessment of operating results gives less emphasis to the effect of unrealized gains and losses, which may cause fluctuations in net income for comparable periods but have no impact on cash flows, and to other non-cash charges, such as depreciation and impairment charges.

The following table presents the comparative results of operations (in thousands):

	Three Months Ended September 30,									Nine Months Ended September 30,
	2015			2014			Change			2015			2014			Change
Revenues
Lease revenues	$	83,461		$	77,672		$	5,789		$	239,943		$	231,961		$	7,982
Operating property revenues	12,686			11,516			1,170			36,755			41,423			(4,668		)
Reimbursable tenant costs	7,456			7,006			450			22,089			19,003			3,086
Interest income and other	4,599			1,793			2,806			17,833			5,536			12,297
	108,202			97,987			10,215			316,620			297,923			18,697
Operating Expenses
Depreciation and amortization:
Net-leased properties	23,880			22,095			1,785			69,432			65,941			3,491
Operating properties	2,964			3,245			(281		)	9,243			10,855			(1,612		)
	26,844			25,340			1,504			78,675			76,796			1,879
Property expenses:
Reimbursable tenant costs	7,456			7,006			450			22,089			19,003			3,086
Asset management fees	7,422			6,468			954			21,864			19,934			1,930
Operating properties	5,029			4,595			434			14,766			20,639			(5,873		)
Net-leased properties	2,605			2,233			372			9,406			8,449			957
	22,512			20,302			2,210			68,125			68,025			100
General and administrative	4,897			6,544			(1,647		)	13,690			17,853			(4,163		)
Impairment charges	—			127			(127		)	1,023			127			896
Acquisition expenses	—			—			—			643			1,401			(758		)
	54,253			52,313			1,940			162,156			164,202			(2,046		)
Operating Income	53,949			45,674			8,275			154,464			133,721			20,743
Other Income and Expenses
Equity in (losses) earnings of equity method investments in real estate	(1,078		)	2,052			(3,130		)	6,625			9,230			(2,605		)
Other income and (expenses)	2,108			(2,687		)	4,795			2,917			(1,835		)	4,752
Interest expense	(24,104		)	(23,695		)	(409		)	(69,346		)	(70,288		)	942
	(23,074		)	(24,330		)	1,256			(59,804		)	(62,893		)	3,089
Income before income taxes and gain on sale of real estate	30,875			21,344			9,531			94,660			70,828			23,832
Provision for income taxes	(1,676		)	(2,651		)	975			(4,441		)	(5,960		)	1,519
Income before gain on sale of real estate	29,199			18,693			10,506			90,219			64,868			25,351
Gain on sale of real estate, net of tax	—			790			(790		)	2,197			13,338			(11,141		)
Net Income	29,199			19,483			9,716			92,416			78,206			14,210
Net income attributable to noncontrolling interests	(9,147		)	(9,193		)	46			(29,345		)	(24,510		)	(4,835		)
Net Income Attributable to CPA®:17 – Global	$	20,052		$	10,290		$	9,762		$	63,071		$	53,696		$	9,375
MFFO Attributable to CPA®:17 – Global	$	47,908		$	40,673		$	7,235		$	147,953		$	140,570		$	7,383

CPA^®:17 – Global 9/30/2015 10-Q– 38

Lease Composition and Leasing Activities

As of September 30, 2015, approximately 51.4% of our net leases, based on consolidated ABR, provide for adjustments based on formulas indexed to changes in the CPI, or similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. In addition, 46.5% of our net leases on that same basis have fixed rent adjustments, for which consolidated ABR is scheduled to increase by an average of 1.8% in 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, or second generation leases, and renewed leases with existing tenants for the three months ended September 30, 2015 and, therefore, does not include new acquisitions for our portfolio during that period. For a discussion about our leasing activities for the prior periods presented in this Report, please see our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2015, March 31, 2015, and September 30, 2014, as filed with the SEC on August 12, 2015, May 15, 2015, and November 14, 2014, respectively.

During the three months ended September 30, 2015, we signed two such leases totaling 7,871 square feet of leased space. Both leases were extensions with existing tenants. The average new rent for these leases is $23.01 per square foot and the average former rent was $17.91 per square foot. We provided a tenant improvement allowance of $0.2 million on one of these leases.

CPA^®:17 – Global 9/30/2015 10-Q– 39

Property Level Contribution

Property level contribution includes lease and operating property revenues, less property expenses, and depreciation and amortization. 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. The following table presents the property level contribution for our consolidated leased and operating properties, as well as a reconciliation to our net operating income (in thousands):

	Three Months Ended September 30,									Nine Months Ended September 30,
	2015			2014			Change			2015			2014			Change
Existing Net-Leased Properties
Lease revenues	$	76,730		$	76,900		$	(170	)	$	226,070		$	230,184		$	(4,114	)
Depreciation and amortization	(20,573		)	(21,161		)	588			(61,500		)	(63,511		)	2,011
Property expenses	(2,526		)	(2,186		)	(340		)	(9,161		)	(8,375		)	(786		)
Property level contribution	53,631			53,553			78			155,409			158,298			(2,889		)
Recently Acquired Net-Leased Properties
Lease revenues	6,731			772			5,959			13,873			1,777			12,096
Depreciation and amortization	(3,307		)	(841		)	(2,466		)	(7,932		)	(2,152		)	(5,780		)
Property expenses	(79		)	(47		)	(32		)	(245		)	(74		)	(171		)
Property level contribution	3,345			(116		)	3,461			5,696			(449		)	6,145
Operating Properties
Revenues	12,686			11,516			1,170			36,755			33,508			3,247
Property expenses	(5,029		)	(4,578		)	(451		)	(14,766		)	(14,029		)	(737		)
Depreciation and amortization	(2,964		)	(3,338		)	374			(9,243		)	(10,396		)	1,153
Property level contribution	4,693			3,600			1,093			12,746			9,083			3,663
Property Sold
Revenues	—			—			—			—			7,915			(7,915		)
Property expenses	—			(17		)	17			—			(6,610		)	6,610
Depreciation and amortization	—			—			—			—			(737		)	737
Property level contribution	—			(17		)	17			—			568			(568		)
Total Property Level Contribution
Lease revenues	83,461			77,672			5,789			239,943			231,961			7,982
Property expenses	(2,605		)	(2,233		)	(372		)	(9,406		)	(8,449		)	(957		)
Operating property revenues	12,686			11,516			1,170			36,755			41,423			(4,668		)
Operating property expenses	(5,029		)	(4,595		)	(434		)	(14,766		)	(20,639		)	5,873
Depreciation and amortization	(26,844		)	(25,340		)	(1,504		)	(78,675		)	(76,796		)	(1,879		)
Property Level Contribution	61,669			57,020			4,649			173,851			167,500			6,351
Add other income:
Interest income and other	4,599			1,793			2,806			17,833			5,536			12,297
Less other expenses:
Asset management fees	(7,422		)	(6,468		)	(954		)	(21,864		)	(19,934		)	(1,930		)
General and administrative	(4,897		)	(6,544		)	1,647			(13,690		)	(17,853		)	4,163
Impairment charges	—			(127		)	127			(1,023		)	(127		)	(896		)
Acquisition expenses	—			—			—			(643		)	(1,401		)	758
Operating Income	$	53,949		$	45,674		$	8,275		$	154,464		$	133,721		$	20,743

CPA^®:17 – Global 9/30/2015 10-Q– 40

Existing Net-Leased Properties

Existing net-leased properties are those we acquired or placed into service prior to January 1, 2014. At September 30, 2015, we had 219 existing net-leased properties.

For the three months ended September 30, 2015, compared to the same period in 2014, property level contribution for existing net-leased properties increased by $0.1 million, primarily as a result of an increase in revenue from a build-to-suit project expansion, offset by the strengthening of the U.S. dollar relative to foreign currencies. For the nine months ended September 30, 2015, compared to the same period in 2014, property level contribution for existing net-leased properties decreased by $2.9 million, primarily as a result of the strengthening of the U.S. dollar relative to foreign currencies.

Recently Acquired Net-Leased Properties

Recently acquired net-leased properties are those that we acquired or placed into service subsequent to December 31, 2013.

For the three and nine months ended September 30, 2015, compared to the same periods in 2014, property level contribution from recently acquired net-leased properties increased by $3.5 million and $6.1 million, respectively, primarily as a result of 19 properties acquired or placed into service after September 30, 2014. Total lease revenues from these properties were $6.7 million and $13.9 million for the three and nine months ended September 30, 2015, respectively.

Operating Properties

Other real estate operations represent primarily the results of operations, or revenues and operating expenses, of our 66 self-storage properties. All of our self-storage properties were acquired prior to January 1, 2014. Additionally, other real estate operations includes the results of operations of a parking garage attached to one of our existing net-leased properties.

For the three and nine months ended September 30, 2015, compared to the same periods in 2014, property level contribution from operating properties increased by $1.1 million and $3.7 million, respectively, primarily due to an increase in the occupancy rate for our self-storage properties.

Property Sold

In April 2014, we sold a hotel that was previously classified as an operating property in the consolidated financial statements (Note 5). For the nine months ended September 30, 2014, property level contribution from that hotel was $0.6 million.

Other Revenues and Expenses

Interest Income and Other

Interest income and other primarily consists of interest earned on our loans receivable and CMBS investments. For the three and nine months ended September 30, 2015, compared to the same periods in 2014, interest income and other increased by $2.8 million and $12.3 million, respectively, primarily due to interest income totaling $1.7 million and $4.9 million received during the three and nine months ended September 30, 2015, respectively, from the loans receivable that we funded during the nine months ended September 30, 2015 (Note 6). Additionally, we received proceeds of $6.3 million from a bankruptcy settlement claim with a former tenant during the second quarter of 2015.

Property Expenses — Asset Management Fees

For the three and nine months ended September 30, 2015, compared to the same periods in 2014, asset management fees increased by $1.0 million and $1.9 million, respectively, as a result of investments acquired since September 30, 2014 and an increase in the estimated fair value of our real estate, both of which increased the asset base from which our advisor earns a fee.

CPA^®:17 – Global 9/30/2015 10-Q– 41

General and Administrative

For the three and nine months ended September 30, 2015, compared to the same periods in 2014, general and administrative expenses decreased by $1.6 million and $4.2 million, respectively, primarily due to decreases in investor relation expenses of $1.0 million and $2.1 million, respectively, decreases in office expenses of $0.3 million and $0.7 million, respectively, and decreases in other general and administrative expenses of $0.1 million and $0.5 million, respectively. Investor relations expenses declined as due to lower annual report and proxy statement costs.

Impairment Charges

During the three months ended September 30, 2015, we did not recognize any impairment charges. During the nine months ended September 30, 2015, we incurred other-than-temporary impairment charges of $1.0 million on two of our CMBS tranches to reduce their carrying values to their estimated fair values as a result of non-performance (Note 9). At September 30, 2015, the carrying value of our CMBS was $2.6 million in aggregate. During both the three and nine months ended September 30, 2014, we incurred an other-than-temporary impairment charge on one tranche in our CMBS portfolio of $0.1 million to reduce its carrying value to its estimated fair value as a result of non-performance.

Acquisition Expenses

Acquisition expenses represent direct costs incurred to acquire properties in transactions that are accounted for as business combinations, whereby such costs are required to be expensed as incurred (Note 5).

For the nine months ended September 30, 2015, compared to the same period in 2014, acquisition expenses decreased by $0.8 million, primarily due to a decrease in the number of business combinations we entered into during the nine months ended September 30, 2015, compared to the same period in 2014.

Equity in (Losses) Earnings of Equity Method Investments in Real Estate

Equity in (losses) earnings of equity method investments in real estate is recognized in accordance with the investment agreement for each of our equity method investments and, where applicable, based upon an allocation of the investment’s net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period.

For the three months ended September 30, 2015, we recognized loss from equity investments in real estate of $1.1 million compared to income of $2.1 million in 2014. This is primarily due to $3.1 million of losses incurred during the three months ended September 30, 2015 as compared to $2.0 million of losses incurred during the three months ended September 30, 2014 on our Shelborne investment as a result of applying the hypothetical liquidation book value model. Our partners in this investment contributed capital during 2014 which caused them to absorb cumulative prior losses that had previously been recognized by us.

For the nine months ended September 30, 2015, compared to the same period in 2014, equity in earnings of equity method investments decreased by $2.6 million. These changes are primarily due to capital contributions from our partners to partially fund cumulative losses that had previously been recognized on our Shelborne investment. Such capital contributions resulted in income attributable to us of $6.5 million based upon the hypothetical liquidation at book value method of accounting during the nine months ended September 30, 2014.

Other Income and (Expenses)

Other income and (expenses) primarily consists of gains and losses on foreign currency transactions, derivative instruments, and extinguishment of debt. We and certain of our foreign consolidated subsidiaries have intercompany debt and/or advances that are not denominated in the functional currency of those subsidiaries. When the intercompany debt or accrued interest thereon is remeasured against the functional currency of the respective subsidiaries, an unrealized gain or loss on foreign currency translation may result. 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 warrants and foreign currency contracts, that are not designated as hedges for accounting purposes, for which 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.

CPA^®:17 – Global 9/30/2015 10-Q– 42

For the three months ended September 30, 2015, we recognized net other income of $2.1 million, which was primarily comprised of gains recognized on derivatives of $2.0 million, realized and unrealized foreign currency transaction gains related to our international investments of $0.4 million, interest income received on our cash balances held with financial institutions of $0.3 million, partially offset by other losses of $0.6 million related to the write-off of a purchase option which expired in July 2015.

For the three months ended September 30, 2014, we recognized net other expenses of $2.7 million, which was primarily comprised of realized and unrealized foreign currency transaction losses related to our international investments of $5.6 million, partially offset by interest income received on our cash balances held with financial institutions of $0.6 million and gains recognized on derivatives of $2.3 million.

For the nine months ended September 30, 2015, we recognized net other income of $2.9 million, which was primarily comprised of gains recognized on derivatives of $6.8 million and interest income received on our cash balances held with financial institutions of $1.0 million, partially offset by realized and unrealized foreign currency transaction losses related to our international investments of $4.0 million, other losses of $0.6 million related to the write-off of a purchase option which expired in July 2015, and a loss recognized on the extinguishment of debt of $0.3 million related to the prepayment of a non-recourse mortgage loan during the nine months ended September 30, 2015 (Note 11).

For the nine months ended September 30, 2014, we recognized net other expenses of $1.8 million, which was primarily comprised of realized and unrealized foreign currency transaction losses related to our international investments of $5.3 million, partially offset by gains recognized on derivatives of $2.1 million, and interest income received on our cash balances held with financial institutions of $1.7 million.

Gain on Sale of Real Estate, Net of Tax

During the nine months ended September 30, 2015, we recognized a deferred gain on sale of real estate, net of tax of $2.2 million as a result of the sale of a hotel, which occurred in the prior year period (Note 5). During the nine months ended September 30, 2014, we recognized a gain on sale of real estate, net of tax of $12.4 million as a result of the sale of the hotel. Additionally, for both the three and nine months ended September 30, 2014, we recognized a $0.8 million gain on sale of real estate, net of tax as a result of granting an easement at one of our properties.

Net Income Attributable to Noncontrolling Interests

For the nine months ended September 30, 2015, compared to the same period in 2014, net income attributable to noncontrolling interests increased by $4.8 million, primarily due to an increase of $2.3 million in the Available Cash Distributions paid to our advisor as a result of our investment activity since September 30, 2014. Additionally, our affiliate’s share of proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015 was $2.1 million.

Net Income Attributable to CPA^®:17–Global

For the three and nine months ended September 30, 2015, compared to the same periods in 2014, the resulting net income attributable to CPA^®:17 – Global increased by $9.8 million and $9.4 million, respectively.

Modified Funds from Operations

MFFO is a non-GAAP measure that we use to evaluate our business. For a definition of MFFO and reconciliation to net income attributable to CPA^®:17 – Global, see Supplemental Financial Measures below.

For the three and nine months ended September 30, 2015, compared to the same period in 2014, MFFO increased by $7.2 million and $7.4 million, respectively, primarily due to an increase in revenues received from properties acquired and build-to-suit projects placed into service after September 30, 2014 (Note 5, Note 6). The increase during the nine months ended September 30, 2015 was also due to proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015. This increase was partially offset by a decrease in Other real estate income due to the sale of a hotel that was classified as an operating property in April 2014 (Note 5) and the impact of the strengthening of the U.S. dollar relative to foreign currencies.

CPA^®:17 – Global 9/30/2015 10-Q– 43

Liquidity and Capital Resources

Our principal demands for funds will be for the acquisition of real estate and real estate related investments and the payment of acquisition-related expenses, operating expenses, interest and principal on current and future indebtedness, and distributions to stockholders. We currently expect that, for the short-term, the aforementioned cash requirements will be funded by our cash on hand, financings, or unused capacity under our Revolver. We expect to meet our short-term liquidity requirements generally through existing cash balances, cash flow generated from our properties, and, if necessary, short-term borrowings.

Our liquidity would be affected adversely by unanticipated costs and greater-than-anticipated operating expenses. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash generated from operations or through short-term borrowings.

Sources and Uses of Cash During the Period

We expect to continue to invest in a diversified portfolio of income-producing commercial properties and other real estate-related assets. We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund distributions to our stockholders. Our cash flows will fluctuate periodically due to a number of factors, which may include, among other things, the timing of purchases and sales of real estate; the timing of the receipt of the proceeds from, and the repayment of, non-recourse mortgage loans and the receipt of lease revenues; whether our advisor receives fees in shares of our common stock or cash, which our board of directors must elect; the timing and characterization of distributions received from equity investments in real estate; the timing of payments of the Available Cash Distribution to our advisor; and changes in foreign currency exchange rates. Despite these fluctuations, we believe our net leases and other real estate-related assets will generate sufficient 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 non-recourse mortgage loans, unused capacity under our Revolving Credit Facility, and the issuance of additional equity securities 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 $32.3 million during the nine months ended September 30, 2015 as compared to the same period in 2014, primarily reflecting the impact of investments acquired after September 30, 2014, proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015, and our share of acquisition expenses recorded by a jointly-owned investment during the nine months ended September 30, 2014.

Investing Activities —Our investing activities are generally comprised of real estate-related transactions (purchases and sales), payment of deferred acquisition fees to our advisor related to asset acquisitions, and capitalized property-related costs.

During the nine months ended September 30, 2015, we used $197.6 million to acquire four real estate investments and invest in capital expenditures for owned real estate, and $21.4 million to fund construction costs on build-to-suit projects (Note 5, Note 6). We used $42.6 million to fund two loans receivable (Note 6). We contributed $34.0 million to jointly-owned investments, including $9.1 million to acquire a follow-on equity interest in an existing investment (Note 7). We received $20.4 million as a return of capital from our equity investments in real estate. We paid value added taxes totaling $21.2 million in connection with several international investments and recovered $15.0 million of value added taxes during the nine months ended September 30, 2015, including amounts paid in prior years. Payments of deferred acquisition fees to our advisor totaled $5.9 million (Note 4). We also had cash inflows of $4.5 million related to the change in restricted cash.

Financing Activities — During the nine months ended September 30, 2015, we paid distributions related to the fourth quarter of 2014, the first quarter of 2015, and second quarter of 2015 totaling $161.5 million to our stockholders, which were comprised of cash distributions of $83.8 million and distributions that were reinvested in shares of our common stock by stockholders through our distribution reinvestment and stock purchase plan of $77.7 million. Our gross borrowings under our Senior Credit Facility were $108.5 million and repayments were $55.0 million. We received $108.2 million in proceeds from mortgage financings related to new and existing investments (Note 11). We made scheduled and unscheduled mortgage principal installments totaling $114.9 million, and received contributions totaling $15.9 million from an affiliate that holds noncontrolling interests in various entities with us to pay off mortgage loans (Note 11). We obtained a $25.0 million loan from WPC which we repaid in full during the third quarter of 2015 (Note 4). We also paid distributions of $25.5 million to affiliates that hold noncontrolling interests in various investments jointly-owned with us.

CPA^®:17 – Global 9/30/2015 10-Q– 44

Distributions

Our objectives are to generate sufficient cash flow over time to provide stockholders with distributions and to seek investments with potential for capital appreciation throughout varying economic cycles. During the nine months ended September 30, 2015, we declared distributions to our stockholders totaling $162.5 million, which were comprised of $84.7 million of cash distributions and $77.8 million of distributions reinvested by stockholders through our distribution reinvestment and stock purchase plan. We funded all of these distributions from Net cash provided by operating activities. Since inception, we have funded 98% of our cumulative distributions from Net cash provided by operating activities, with the remaining 2%, or $17.7 million, being funded primarily from proceeds of our public offerings. In determining our distribution policy during the periods in which we are investing capital, we place primary emphasis on projections of cash flow from operations, together with cash distributions from our unconsolidated investments, rather than on historical results of operations (though these and other factors may be a part of our consideration). In setting a distribution rate, we thus focus primarily on expected returns from those investments we have already made, as well as our anticipated rate of return from future investments, to assess the sustainability of a particular distribution rate over time.

Redemptions

We maintain a quarterly redemption program pursuant to which we may, at the discretion of our board of directors, redeem shares of our common stock from stockholders seeking liquidity. During the nine months ended September 30, 2015, we received requests to redeem 3,089,139 shares of our common stock pursuant to our redemption plan, all of which were redeemed during the same period. The weighted-average price per share at which the shares were redeemed was $9.16, which is net of redemptions fees, totaling $28.3 million.

Summary of Financing

The table below summarizes our non-recourse debt and Senior Credit Facility (dollars in thousands):

	September 30, 2015			December 31, 2014
Carrying Value
Fixed rate	$	1,225,016		$	1,259,320
Variable rate:
Senior Credit Facility	53,706			—
Non-recourse debt:
Amount subject to interest rate swaps	420,334			434,202
Floating interest rate mortgage loans	169,529			166,932
Amount of fixed rate debt subject to interest rate reset features	35,963			36,035
	625,826			637,169
	$	1,904,548		$	1,896,489
Percent of Total Debt
Fixed rate	64		%	66		%
Variable rate	36		%	34		%
	100		%	100		%
Weighted-Average Interest Rate at End of Period
Fixed rate	5.2		%	5.3		%
Variable rate (a)	3.8		%	4.0		%

__________

(a) The impact of our derivative instruments is reflected in the weighted-average interest rates.

CPA^®:17 – Global 9/30/2015 10-Q– 45

Cash Resources

At September 30, 2015, our cash resources consisted primarily of cash and cash equivalents totaling $94.8 million. Of this amount, $37.4 million, at then-current exchange rates, was held in foreign subsidiaries, but we could be subject to restrictions or significant costs should we decide to repatriate these amounts. We also had our Senior Credit Facility with unused capacity of $196.2 million, as well as unleveraged properties that had an aggregate carrying value of $375.4 million at September 30, 2015, although there can be no assurance that we would be able to obtain financing for these properties. Our cash resources may be used for future investments and can be used for working capital needs, other commitments, and distributions to our stockholders.

Cash Requirements

During the next 12 months, we expect that our cash requirements will include payments to acquire new investments, funding capital commitments such as build-to-suit projects and ADC Arrangements, paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in entities we control, and making scheduled mortgage loan principal payments, paydowns of the Revolver, as well as other normal recurring operating expenses. Balloon payments totaling $193.9 million and $16.7 million on our consolidated and unconsolidated mortgage loan obligations, respectively, are also due during the next 12 months. Our advisor is actively seeking to refinance certain of these loans, although there can be no assurance that it will be able to do so on favorable terms, if at all. Capital and other lease commitments totaling $6.0 million are expected to be funded during the next 12 months. We expect to fund future investments, capital commitments, any capital expenditures on existing properties, scheduled and unscheduled debt payments on our mortgage loans, and paydowns of the Revolver through the use of our cash reserves, cash generated from operations, and proceeds from our distribution reinvestment and stock purchase plan.

Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our debt, off-balance sheet arrangements, and other contractual obligations (primarily our capital commitments and lease obligations) at September 30, 2015, and the effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Non-recourse debt — principal (a)	$	1,853,194	$	221,032	$	503,781	$	96,006	$	1,032,375
Senior Credit Facility — principal (b)	53,774		—		53,774		—		—
Deferred acquisition fees — principal	6,748		4,379		2,369		—		—
Interest on borrowings and deferred acquisition fees	453,122		91,434		138,218		110,819		112,651
Capital commitments (c)	4,191		3,861		—		330		—
Operating and other lease commitments (d)	72,468		2,116		6,801		6,130		57,421
Asset retirement obligations, net (e)	24,958		—		—		—		24,958
	$	2,468,455	$	322,822	$	704,943	$	213,285	$	1,227,405

__________

(a) Excludes $2.4 million of unamortized discount, net, on three notes, which was included in Non-recourse debt at September 30, 2015.

(b) Excludes $0.1 million of unamortized discount on our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms.

(c) Capital commitments include (i) current build-to-suit projects of $3.6 million (Note 5), and (ii) $0.6 million related to other construction commitments.

(d) Operating commitments consist of rental obligations under ground leases. Other lease commitments consist of our share of future rents payable for the purpose of leasing office space pursuant to the advisory agreement. Amounts are allocated among WPC, the CPA^® REITs, CWI, and CWI 2 (Note 4).

(e) Represents the amount of future obligations estimated for the removal of asbestos and environmental waste in connection with several of our acquisitions, payable upon the retirement or sale of the assets.

Amounts in the table above that relate to our foreign operations are based on the exchange rate of the local currencies at September 30, 2015, which consisted primarily of the euro. At September 30, 2015, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

CPA^®:17 – Global 9/30/2015 10-Q– 46

Equity Method Investments

We have interests in unconsolidated investments that primarily own single-tenant properties net leased to companies. The underlying investments are jointly-owned with our affiliates and with third parties. At September 30, 2015, on a combined basis, these investments had total assets of approximately $1.7 billion and third-party non-recourse mortgage debt of $960.3 million. At that date, our pro rata share of the aggregate debt for these investments was $391.8 million. In addition, we have a limited liability interest, with a carrying value of $39.7 million as of September 30, 2015, in a company that owns an interest in a cold storage operator. Cash requirements with respect to our share of these debt obligations are discussed above under Cash Requirements.

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 FFO and MFFO, which are supplemental non-GAAP measures. We believe that these non-GAAP 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 MFFO and reconciliations of FFO and MFFO to the most directly comparable GAAP measures are provided below.

FFO and MFFO

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., 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 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 revised in February 2004. 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, and depreciation and amortization; 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.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment, and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization, as well as impairment charges of real estate-related assets, provides a more complete understanding of our performance to investors and to management; and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. In particular, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions, which can change over time. An asset will only be evaluated for impairment if certain impairment indicators exist. Then a two-step process is performed, of which first is to determine whether an asset is impaired by comparing the carrying value, or book value, to the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset, then measure the impairment loss as the excess of the carrying value over its estimated fair value. It should be noted, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property (including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows) are taken into account in determining

CPA^®:17 – Global 9/30/2015 10-Q– 47

whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO described above due to the fact that impairments are based on estimated future undiscounted cash flows, it could be difficult to recover any impairment charges. However, FFO and MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating the operating performance of the company. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) were put into effect in 2009. These other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, such as acquisition fees that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after acquisition activity ceases. We intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) within eight to 12 years following the investment of substantially all of the net proceeds from our initial public offering, which occurred in April 2011. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association, an industry trade group, has standardized a measure known as MFFO, which the Investment Program Association has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental non-GAAP measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO, and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance now that our offering has been completed and once all of our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance, with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. MFFO should only be used to assess the sustainability of a company’s operating performance after a company’s offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on a company’s operating performance during the periods in which properties are acquired.

We define MFFO consistent with the Investment Program Association’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the Investment Program Association in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above- and below-market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; nonrecurring impairments of real estate-related investments (i.e., infrequent or unusual, not reasonably likely to recur in the ordinary course of business); mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives, or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and jointly-owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses that are unrealized and may not ultimately be realized. While we are responsible for managing interest rate, hedge, and foreign exchange risk, we retain an outside consultant to review all our hedging agreements. Since interest rate hedges are not a fundamental part of our operations,

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we believe it is appropriate to exclude such infrequent gains and losses in calculating MFFO, as such gains and losses are not reflective of on-going operations.

Our MFFO calculation complies with the Investment Program Association’s Practice Guideline described above. In calculating MFFO, we exclude acquisition-related expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables, and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by a company. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by the company, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses, and other costs related to such property. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives and gains and losses from dispositions of assets as infrequent items or items that are unrealized and may not ultimately be realized, and which are not reflective of on-going operations and are therefore typically adjusted for assessing operating performance.

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-listed REITs, which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that MFFO and the adjustments used to calculate it allow us to present our performance in a manner that takes into account certain characteristics unique to non-listed REITs, such as their limited life, defined acquisition period, and targeted exit strategy, and is therefore a useful measure for investors. For example, acquisition costs are generally funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance.

Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO accordingly.

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FFO and MFFO were as follows (in thousands): 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014 (a)			2015			2014 (a)
Net income attributable to CPA®:17 – Global	$	20,052		$	10,290		$	63,071		$	53,696
Adjustments:
Depreciation and amortization of real property	26,785			25,273			78,503			76,622
Gain on sale of real estate	—			(790		)	(2,197		)	(4,251		)
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO:
Depreciation and amortization of real property	8,059			7,199			23,599			20,016
Proportionate share of adjustments for noncontrolling interests to arrive at FFO	(137		)	(172		)	(423		)	(527		)
Total adjustments	34,707			31,510			99,482			91,860
FFO attributable to CPA®:17 – Global — as defined by NAREIT	54,759			41,800			162,553			145,556
Adjustments:
Straight-line and other rent adjustments (b)	(5,445		)	(4,632		)	(15,285		)	(14,437		)
Realized (gains) losses on foreign currency, derivatives and other	(944		)	1,599			(5,285		)	2,392
Unrealized (gains) losses on foreign currency, derivatives, and other	(918		)	1,781			2,963			1,390
Above- and below-market rent intangible lease amortization, net (c)	(361		)	(91		)	(1,054		)	(236		)
Amortization of premiums (accretion of discounts) on debt investments, net	259			(47		)	340			(336		)
Loss (gain) on extinguishment of debt	5			(2		)	275			268
Impairment charges (d)	—			—			1,023			—
Acquisition expenses (e)	—			—			643			1,401
Unrealized gains on mark-to-market adjustments	—			(81		)	—			(210		)
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at MFFO:
Above- and below-market rent intangible lease amortization, net (c)	334			318			706			926
Acquisition expenses (e)	205			(7		)	541			3,991
Realized (gains) losses on foreign currency, derivatives, and other	(133		)	12			164			17
Amortization of premiums on debt investments, net	95			—			284			—
Straight-line and other rent adjustments (b)	(64		)	(99		)	(205		)	(437		)
Unrealized losses on mark-to-market adjustments	—			49			—			161
Unrealized losses on foreign currency, derivatives, and other	—			15			—			15
Proportionate share of adjustments for noncontrolling interests to arrive at MFFO	116			58			290			109
Total adjustments	(6,851		)	(1,127		)	(14,600		)	(4,986		)
MFFO attributable to CPA®:17 �� Global	$	47,908		$	40,673		$	147,953		$	140,570

__________

CPA^®:17 – Global 9/30/2015 10-Q– 50

(a) In the course of preparing our 2014 consolidated financial statements, we discovered an error related to our accounting for a subsidiary’s functional currency. We corrected this error, and other errors previously recorded as out-of-period adjustments, and revised our consolidated financial statements for all prior periods impacted. Accordingly, our financial results for the prior periods presented herein have been revised for the correction of such errors (Note 2). The correction of errors resulted in decreases to Net income attributable to CPA^®:17 – Global of $4.9 million, FFO of $4.3 million, and MFFO of $0.2 million for the three months ended September 30, 2014, and decreases to Net income attributable to CPA^®:17 – Global of $6.4 million, FFO of $4.3 million, and MFFO of $0.7 million for the nine months ended September 30, 2014.

(b) Under GAAP, rental receipts are allocated to periods using an accrual basis. This may result in timing of income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), management believes that MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, provides insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

(c) Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that, by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

(d) Impairment charges were incurred on our CMBS portfolio and are considered non-real estate impairments. As such, these impairment charges were not included as an add back adjustment in our computation of FFO, as defined by NAREIT, but are included as an adjustment in arriving at MFFO because these charges are not directly related or attributable to our operations.

(e) Prior to the first quarter of 2015, includes Acquisition expenses and amortization of deferred acquisition fees. Amortization of deferred acquisition fees totaled $0.8 million and $2.2 million for the three and nine months ended September 30, 2015, respectively, and is included in depreciation and amortization of real property. In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs and amortization of deferred acquisition fees, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income, a performance measure under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to stockholders, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property.

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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 risks that we are exposed to are interest rate risk and foreign currency exchange risk. 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 can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, our advisor views our collective tenant roster as a portfolio and attempts 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 to hedge our foreign currency cash flow exposures.

Interest Rate Risk

The values of our real estate, related fixed-rate debt obligations, our Senior Credit Facility, and our loans receivable investments 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 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 assets to 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 have historically attempted to obtain non-recourse mortgage 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 payments 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 hedges 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, 2015, we estimated that the total fair value of our interest rate swaps, 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 $13.7 million (Note 10).

At September 30, 2015, all of our debt either bore interest at fixed rates, bore interest at floating rates, was swapped 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, 2015 ranged from 2.0% to 7.5%. The contractual annual interest rates on our variable-rate debt at September 30, 2015 ranged from 1.6% to 6.1%. Our debt obligations are more fully described under Liquidity and Capital Resources – Summary of Financing in Item 2 above. The following table presents principal cash outflows for the remainder of 2015, each of the next four calendar years following December 31, 2015, and thereafter, based upon expected maturity dates of our debt obligations outstanding at September 30, 2015 (in thousands):

	2015 (Remainder)		2016		2017		2018		2019		Thereafter		Total		Fair value
Fixed-rate debt (a)	$	4,621	$	44,941	$	178,064	$	25,750	$	36,009	$	934,876	$	1,224,261	$	1,268,445
Variable-rate debt (a) (b)	$	1,451	$	188,506	$	168,534	$	172,168	$	2,547	$	149,501	$	682,707	$	681,695

__________

(a) Amounts are based on the exchange rate at September 30, 2015, as applicable.

(b) Includes $53.8 million outstanding under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms.

CPA^®:17 – Global 9/30/2015 10-Q– 52

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, is affected by changes in interest rates. A decrease or increase in interest rates of 1% would change the estimated fair value of this debt at September 30, 2015 by an aggregate increase of $61.6 million or an aggregate decrease of $75.9 million, respectively. Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at September 30, 2015 would increase or decrease by $2.2 million 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, our variable-rate debt in the table above bore interest at fixed rates at September 30, 2015, 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.

Foreign Currency Exchange Rate Risk

We own investments in Europe and Asia, and as a result, are subject to risk from the effects of exchange rate movements primarily in the euro and, to a lesser extent, the British pound sterling, the Japanese yen, the Norwegian krone, and the Indian rupee, which may affect future costs and cash flows. Although all of our foreign investments through the third quarter of 2015 were conducted in these currencies, we may conduct business in other currencies in the future. We manage foreign currency exchange rate movements by generally placing both our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to the actual equity that we have invested and the equity portion of our cash flow. 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), 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.

We obtain mortgage financing in local currencies. 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 mitigate the risk from changes in foreign currency exchange rates.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases, for our consolidated foreign operations as of September 30, 2015, during the remainder of 2015, each of the next four calendar years following December 31, 2015, and thereafter, are as follows (in thousands):

Lease Revenues(a)	2015 (Remainder)		2016		2017		2018		2019		Thereafter		Total
Euro (c)	$	24,390	$	97,030	$	96,765	$	96,765	$	96,765	$	884,077	$	1,295,792
British pound sterling (d)	1,491		5,891		5,875		5,875		5,875		64,510		89,517
Japanese yen (e)	621		2,525		2,536		2,536		2,536		5,690		16,444
	$	26,502	$	105,446	$	105,176	$	105,176	$	105,176	$	954,277	$	1,401,753

Scheduled debt service payments (principal and interest) for mortgage notes payable for our consolidated foreign operations as of September 30, 2015, during the remainder of 2015, each of the next four calendar years following December 31, 2015, and thereafter, are as follows (in thousands):

Debt Service(a) (b)	2015 (Remainder)		2016		2017		2018		2019		Thereafter		Total
Euro (c)	$	8,639	$	218,835	$	128,660	$	63,552	$	6,410	$	99,406	$	525,502
British pound sterling (d)	508		14,557		1,518		1,479		13,731		—		31,793
Japanese yen (e)	109		434		22,101		—		—		—		22,644
	$	9,256	$	233,826	$	152,279	$	65,031	$	20,141	$	99,406	$	579,939

__________

(a) Amounts are based on the applicable exchange rates at September 30, 2015. Contractual rents and debt obligations are denominated in the functional currency of the country of each property. Our foreign operations denominated in the Norwegian krone and Indian rupee are related to an unconsolidated jointly-owned investment and a foreign debenture, respectively, and are excluded from the amounts in the tables.

(b) Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at September 30, 2015.

CPA^®:17 – Global 9/30/2015 10-Q– 53

(c) We estimate that, for a 1% increase or decrease in the exchange rate between the euro and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at September 30, 2015 of $7.7 million.

(d) We estimate that, for a 1% increase or decrease in the exchange rate between the British pound sterling and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at September 30, 2015 of $0.6 million.

(e) We estimate that, for a 1% increase or decrease in the exchange rate between the Japanese yen and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at September 30, 2015 of less than $0.1 million.

As a result of scheduled balloon payments on international non-recourse mortgage loans, projected debt service obligations exceed projected lease revenues in 2016 and 2017. In 2016, balloon payments totaling $205.6 million are due on three non-recourse mortgage loans that are collateralized by properties that we own with affiliates. In 2017, balloon payments totaling $135.3 million are due on eight non-recourse mortgage loans that are collateralized by properties that we own with affiliates. We currently anticipate that, by their respective due dates, we will have refinanced certain of these loans, but there can be no assurance that we will be able to do so on favorable terms, if at all. If that has not occurred, we would expect to use our cash resources to make these payments, if necessary.

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, it does contain concentrations in excess of 10%, based on the percentage of our consolidated ABR as of September 30, 2015, in certain areas; however, there were no significant changes to our portfolio concentrations at September 30, 2015 as compared to December 31, 2014.

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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 September 30, 2015, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of September 30, 2015 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.

CPA^®:17 – Global 9/30/2015 10-Q– 55

PART II — OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

During the three months ended September 30, 2015, we issued 381,497 shares of our common stock to our advisor as consideration for asset management fees. These shares were issued at $9.72 per share, which represents our most recently published NAV as approved by our board of directors at the date of issuance. Since none of these transactions were considered to have involved a “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933, the shares issued were deemed to be exempt from registration. In acquiring our shares, our advisor represented that such interests were being acquired by it for investment purposes and not with a view to the distribution thereof. From inception through September 30, 2015, we have issued a total of 10,029,140 shares of our common stock to our advisor as consideration for asset management fees.

Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of our common stock during the three months ended September 30, 2015:

	Total number of shares purchased (a)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or program (a)	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or program (a)
2015 Period
July	—	$	—	N/A	N/A
August	—	—		N/A	N/A
September	1,513,657	9.17		N/A	N/A
Total	1,513,657

__________

(a) Represents shares of our common stock repurchased under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. We generally receive fees in connection with share redemptions.

CPA^®:17 – Global 9/30/2015 10-Q– 56

Item 6. Exhibits.

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description	Method of Filing
10.1	Credit Agreement, dated as of August 26, 2015, by and among Corporate Property Associates 17 – Global Incorporated, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer; Bank of America, N.A., as Syndication Agent and L/C Issuer; the Other Lenders Party Hereto; J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and Joint Bookrunners; and Regions Bank, as Documentation Agent.	Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 28, 2015
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

101 The following materials from Corporate Property Associates 17 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2015 and December 31, 2014, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2015 and 2014, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, and (vi) Notes to Consolidated Financial Statements. Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Corporate Property Associates 17 – Global Incorporated
Date:	November 6, 2015
		By:	/s/ Hisham A. Kader
			Hisham A. Kader
			Chief Financial Officer
			(Principal Financial Officer)
Date:	November 6, 2015
		By:	/s/ ToniAnn Sanzone
			ToniAnn Sanzone
			Chief Accounting Officer
			(Principal Accounting Officer)

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EXHIBIT INDEX

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description	Method of Filing
10.1	Credit Agreement, dated as of August 26, 2015, by and among Corporate Property Associates 17 – Global Incorporated, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer; Bank of America, N.A., as Syndication Agent and L/C Issuer; the Other Lenders Party Hereto; J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and Joint Bookrunners; and Regions Bank, as Documentation Agent.	Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 28, 2015
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

101 The following materials from Corporate Property Associates 17 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2015 and December 31, 2014, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2015 and 2014, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, and (vi) Notes to Consolidated Financial Statements. Filed herewith