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8-K - FORM 8-K - CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCc92898e8vk.htm
Exhibit 99.1
(CPA LOGO)
Corporate Property Associates 16 — Global Incorporated
Supplemental Information
As of September 30, 2009
Forward-Looking Statements
This supplemental information may contain forward-looking statements within the meaning of the Federal securities laws. 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 which could impact actual results and forward-looking statements contained herein is included in our filings with the SEC, including but not limited to our Form 10-K for the year ended December 31, 2008. We do not undertake to revise or update any forward-looking statements.
     
Executive Offices
  Investor Relations
50 Rockefeller Plaza
  Susan C. Hyde
New York, NY 10020
  Managing Director & Director of Investor Relations
Tel: 1-800-WPCAREY or (212) 492-1100
  W. P. Carey & Co. LLC
Fax: (212) 492-8922
  Phone: (212) 492-1151
Web Site Address: www.CPA16GLOBAL.com
   

 

 


 

Corporate Property Associates 16 — Global Incorporated
Reconciliation of Net Income (Loss) to Funds From Operations - as adjusted (AFFO) (Unaudited)
(in thousands, except share and per share amounts)
                                 
    Three months ended September 30,     Nine months ended September 30,  
    2009     2008     2009     2008  
Net income (loss) attributable to CPA®:16 — Global shareholders
  $ 1,836     $ 5,004     $ (460 )   $ 18,649  
Gain on extinguishment of debt
    (2,313 )           (8,825 )      
Depreciation, amortization, and other non-cash charges
    13,119       16,185       34,758       37,529  
Straight-line and other rent adjustments
    (412 )     (572 )     952       (530 )
Gain on sale of real estate, net
    (7,662 )     (136 )     (7,662 )     (136 )
Impairment charges
    24,124             45,210        
AFFO adjustment to earnings from equity investments
    2,902       2,858       8,424       8,306  
AFFO adjustment to share of earnings of noncontrolling interests
    (11,977 )     (6,182 )     (12,588 )     (9,623 )
 
                       
AFFO
  $ 19,617     $ 17,157     $ 59,809     $ 54,195  
 
                       
AFFO per share (a)
  $ 0.18     $ 0.17     $ 0.56     $ 0.52  
 
                       
Weighted average shares outstanding
    122,907,481       121,817,667       122,791,365       120,899,625  
 
                       
 
                               
(a)   AFFO per share calculation:
                               
 
                               
AFFO
  $ 19,617     $ 17,157     $ 59,809     $ 54,195  
Add: Issuance of shares to an affiliate in satisfaction of fees due
    2,947       3,005       8,783       9,016  
 
                       
AFFO numerator in determination of AFFO per share
  $ 22,564     $ 20,162     $ 68,592     $ 63,211  
 
                       
Weighted average shares outstanding including dilutive effect of shares issued in satisfaction of fees due
    122,907,481       121,817,667       122,791,365       120,899,625  
 
                       
Non-GAAP Financial Disclosure
Funds from operations (FFO) is a non-GAAP financial measure that is commonly used by investors and analysts in evaluating real estate companies. Although the National Association of Real Estate Investment Trusts (NAREIT) has published a definition of FFO, real estate companies often modify this definition as they seek to provide financial measures that meaningfully reflect their operations. FFO should not be considered as an alternative to net income as an indication of a company’s operating performance or to cash flow from operating activities as a measure of its liquidity. It should be used in conjunction with GAAP net income. FFO disclosed by other REITs may not be comparable to our AFFO calculation.
NAREIT’s definition of FFO adjusts GAAP net income to exclude depreciation and gains/losses from the sales of properties and adjusts for FFO applicable to unconsolidated partnerships and joint ventures. We calculate AFFO in accordance with this definition and then include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of intangibles, straight-line rents, impairment charges on real estate and unrealized foreign currency exchange gains and losses. We exclude these items from GAAP net income as they are not the primary drivers in our decision making process. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but that have no impact on cash flows and we therefore use AFFO as one measure of our operating performance when we formulate corporate goals and evaluate the effectiveness of our strategies. As a result, we believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better understand and measure the performance of our business over time without the potentially distorting impact of these short-term fluctuations.

 

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Corporate Property Associates 16 — Global Incorporated
Adjusted Cash Flow from Operating Activities (Unaudited)
(in thousands, except share and per share amounts)
                 
    Nine months ended September 30,  
    2009     2008  
Cash flow from operating activities — as reported
  $ 87,648     $ 96,116  
Adjustments:
               
Distributions received from equity investments in real estate in excess of equity income, net (a)
    6,676       7,838  
Distributions paid to noncontrolling interests, net (b)
    (13,887 )     (5,164 )
Changes in working capital (c)
    1,514       (7,396 )
 
           
Adjusted cash flow from operating activities
  $ 81,951     $ 91,394  
 
           
Adjusted cash flow per share
  $ 0.67     $ 0.76  
 
           
 
               
Distributions declared per share
  $ 0.4965     $ 0.4926  
 
           
Payout ratio (distributions per share/adjusted cash flow per share)
    74 %     65 %
 
           
 
               
Weighted average shares outstanding
    122,791,365       120,899,625  
 
           
     
(a)   To the extent we receive distributions in excess of the equity income that we recognize, we include such amounts in our evaluation of cash flow from core operations.
 
(b)   Represents noncontrolling interests’ share of distributions made by ventures that we consolidate in our financial statements.
 
(c)   Timing differences arising from the payment of certain liabilities in a period other than that in which the expense is recognized in determining net income may distort the actual cash flow that our core operations generate. We adjust our GAAP cash flow from operations to record such amounts in the period in which the liability was actually incurred. In addition, an adjustment to exclude the impact of escrow funds was introduced in the second quarter of 2009 as more often than not these funds are released to the lender. We believe this adjustment results in a more accurate presentation of this supplemental measure.
Non-GAAP Financial Disclosure
Adjusted cash flow from operating activities refers to our cash provided by operating activities, as determined in accordance with GAAP, adjusted primarily to reflect timing differences between the period an expense is incurred and paid, to add cash distributions that we receive from our investments in unconsolidated real estate joint ventures in excess of our equity investment in the joint ventures, and to subtract cash distributions that we make to our noncontrolling partners in real estate joint ventures that we consolidate. We hold a number of interests in real estate joint ventures, and we believe that adjusting our GAAP cash provided by operating activities to reflect these actual cash receipts and cash payments may give investors a more accurate picture of our actual cash flow than GAAP cash provided by operating activities alone and that it is a useful supplemental measure for investors to consider. We also believe that adjusted cash flow from operating activities is a useful supplemental measure for assessing the cash flow generated from our core operations, and we use this measure when evaluating distributions to shareholders. Adjusted cash flow from operating activities should not be considered as an alternative for cash provided by operating activities computed on a GAAP basis as a measure of our liquidity. Adjusted cash flow from operating activities may not be comparable to similarly titled measures of other companies.

 

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Corporate Property Associates 16 — Global Incorporated
Portfolio Diversification as of September 30, 2009 (Unaudited)

(in thousands)
Top Ten Tenants by Rent (Pro Rata Basis)
                 
Tenant/Lease Guarantor   Annualized Rent     Percent  
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)
  $ 14,265       7 %
U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    10,008       5 %
Telcordia Technologies, Inc.
    9,462       5 %
Fraikin SAS (a)
    7,015       4 %
Nordic Cold Storage LLC
    6,916       3 %
The New York Times Company
    6,591       3 %
International Aluminum Corp. and United States Aluminum of Canada Ltd. (a)
    4,561       2 %
Police Prefecture, French Government (a)
    4,426       2 %
OBI A.G. (a)
    4,298       2 %
Corinthian Colleges, Inc.
    4,253       2 %
 
           
Total
  $ 71,795       35 %
 
           
Weighted Average Lease Term for Portfolio: 14.9 years
CPA®:16 — Global Historical Occupancy
(LINE GRAPH)
 
     
(a)   Rent amounts are subject to fluctuations in foreign currency exchange rates.
 
(b)   Percentage of the portfolio’s total pro rata square footage that was subject to lease.

 

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Corporate Property Associates 16 — Global Incorporated
Portfolio Diversification as of September 30, 2009 (Unaudited)
by Geography and Property Type (Pro Rata Basis)

(in thousands)
                 
Region   Annualized Rent     Percent  
U.S.
               
East
  $ 43,853       22 %
South
    30,090       15 %
Midwest
    22,967       11 %
West
    21,936       11 %
 
           
U.S. Total
    118,846       59 %
 
           
 
               
International
               
Germany
    33,072       17 %
France
    14,588       7 %
Finland
    12,959       6 %
United Kingdom
    5,047       3 %
Poland
    4,297       2 %
Asia (a)
    3,804       2 %
Hungary
    3,751       2 %
Other (b)
    3,523       2 %
 
           
International Total
    81,041       41 %
 
           
 
Total
  $ 199,887       100 %
 
           
                 
Property Type   Annualized Rent     Percent  
Industrial
  $ 81,605       41 %
Office
    43,257       22 %
Warehouse/Distribution
    32,470       16 %
Retail
    24,288       12 %
Self-Storage
    10,008       5 %
Other Properties (c)
    8,259       4 %
 
           
Total
  $ 199,887       100 %
 
           
(PIE CHART)
     
(a)   Includes revenue from tenants in Malaysia and Thailand.
 
(b)   Includes revenue from tenants in Canada, Mexico and Sweden.
 
(c)   Includes revenue from tenants with the following property types: residential (2%), hospitality (1%), education (0.5%), and land (0.5%).

 

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Corporate Property Associates 16 — Global Incorporated
Portfolio Diversification as of September 30, 2009 (Unaudited)
by Tenant Industry (Pro Rata Basis)

(in thousands)
                 
Industry Type (a)   Annualized Rent     Percent  
Retail Trade
  $ 31,526       16 %
Automobile
    16,644       8 %
Chemicals, Plastics, Rubber, and Glass
    16,551       8 %
Electronics
    14,335       7 %
Healthcare, Education and Childcare
    12,053       6 %
Transportation — Cargo
    10,465       5 %
Telecommunications
    9,462       5 %
Construction and Building
    9,326       5 %
Consumer Non-durable Goods
    9,215       5 %
Media: Printing and Publishing
    8,716       4 %
Beverages, Food, and Tobacco
    8,424       4 %
Business and Commercial Services
    6,916       4 %
Machinery
    6,703       3 %
Buildings and Real Estate
    6,497       3 %
Textiles, Leather, and Apparel
    5,337       3 %
Insurance
    5,168       3 %
Federal, State and Local Government
    4,426       2 %
Transportation — Personal
    3,510       2 %
Grocery
    3,450       2 %
Mining, Metals, and Primary Metal Industries
    2,540       1 %
Aerospace and Defense
    2,232       1 %
Other (b)
    6,391       3 %
 
           
Total
  $ 199,887       100 %
 
           
     
(a)   Based on the Moody’s Classification System and information provided by the tenant.
 
(b)   Includes revenue from tenants in the following industries: hotels and gaming (1.5%), consumer services (1.2%), and utilities (0.5%).

 

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