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8-K - FORM 8-K - Corporate Property Associates 17 - Global INC | c16843e8vk.htm |
Exhibit 99.1
Corporate Property Associates 17 Global Incorporated
Supplemental Information
Supplemental Information
As of March 31, 2011
As used in this supplemental package, the terms the Company, we, us and our include
Corporate Property Associates 17 Global Incorporated (CPA®:17), its consolidated subsidiaries
and predecessors, unless otherwise indicated.
Important Note Regarding Non-GAAP Financial Measures
This supplemental package includes non-GAAP measures, including funds from operations (FFO),
funds from operations as adjusted (AFFO), and adjusted cash flow from operating activities. A
description of these non-GAAP measures and reconciliations to the most directly comparable GAAP
measures are provided in this supplemental package.
Forward-Looking Statements
This supplemental package contains 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 Securities and Exchange Commission,
including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2010.
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.CPA17GLOBAL.com |
Corporate Property Associates 17 Global Incorporated
Reconciliation of Net Income Attributable to CPA®:17 Global Shareholders
to Funds From Operations as adjusted (AFFO) (Unaudited)
(in thousands, except share and per share amounts)
Reconciliation of Net Income Attributable to CPA®:17 Global Shareholders
to Funds From Operations as adjusted (AFFO) (Unaudited)
(in thousands, except share and per share amounts)
Three months ended March 31, | ||||||||
2011 | 2010 | |||||||
Net income attributable to CPA®:17 Global shareholders |
$ | 12,435 | $ | 6,123 | ||||
Adjustments: |
||||||||
Depreciation and amortization of real property |
8,001 | 2,255 | ||||||
Proportionate share of adjustments to equity in net income of partially owned
entities to arrive at FFO: |
||||||||
Depreciation and amortization of real property |
2,039 | 786 | ||||||
Proportionate share of adjustments for noncontrolling interests to arrive at FFO |
(159 | ) | (161 | ) | ||||
Total adjustments |
9,881 | 2,880 | ||||||
FFO as defined by NAREIT |
22,316 | 9,003 | ||||||
Adjustments: |
||||||||
Other depreciation, amortization and non-cash charges |
624 | 65 | ||||||
Straight-line and other rent adjustments |
(3,050 | ) | (1,361 | ) | ||||
Proportionate share of adjustments to equity in net income of partially owned
entities to arrive at AFFO: |
||||||||
Other depreciation, amortization, and other non-cash charges |
(9 | ) | | |||||
Straight-line and other rent adjustments |
(127 | ) | (61 | ) | ||||
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO |
449 | 273 | ||||||
Total adjustments |
(2,113 | ) | (1,084 | ) | ||||
AFFO (a) |
$ | 20,203 | $ | 7,919 | ||||
AFFO per share (b) |
$ | 0.15 | $ | 0.10 | ||||
Weighted average shares outstanding |
151,599,433 | 87,261,461 | ||||||
(a) The amount previously furnished for the three months ended March 31, 2010 of $7.7 million have been revised in the table above
to correct an inadvertent calculation error. |
||||||||
(b) Numerator for AFFO per share calculation: |
||||||||
AFFO |
$ | 20,203 | $ | 7,919 | ||||
Issuance of shares to an affiliate in satisfaction of fees due |
2,850 | 939 | ||||||
AFFO numerator in determination of AFFO per share |
$ | 23,053 | $ | 8,858 | ||||
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Non-GAAP Financial Disclosure
FFO is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts
(NAREIT). NAREIT defines FFO as net income or loss (as computed in accordance with GAAP)
excluding: depreciation and amortization expense from real estate assets, gains or losses from
sales of depreciated real estate assets and extraordinary items; however, FFO related to assets
held for sale, sold or otherwise transferred and included in the results of discontinued operations
are to be included. These adjustments also incorporate the pro rata share of unconsolidated
subsidiaries. FFO is used by management, investors and analysts to facilitate meaningful
comparisons of operating performance between periods and among our peers. Although NAREIT has
published this definition of FFO, real estate companies often modify this definition as they seek
to provide financial measures that meaningfully reflect their distinctive operations.
We modify the NAREIT computation of FFO to include other adjustments to GAAP net income for certain
non-cash charges, where applicable, such as gains or losses from extinguishment of debt and
deconsolidation of subsidiaries, amortization of intangibles, straight-line rents, impairment
charges on real estate, allowances for credit losses and unrealized foreign currency exchange gains
and losses. We refer to our modified definition of FFO as Funds from Operations as Adjusted, or
AFFO, and we employ it as one measure of our operating performance when we formulate corporate
goals and evaluate the effectiveness of our strategies. 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 have no impact on cash flows.
We believe that AFFO and AFFO per share are useful supplemental measures for investors to consider
because it will help them to better assess the sustainability of our operating performance without
the potentially distorting impact of these short-term fluctuations. However, there are limits on
the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign
currency losses that we exclude may become actual realized losses upon the ultimate disposition of
the properties in the form of lower cash proceeds or other considerations. FFO or AFFO
should not be considered as an alternative to net income as an indication of a companys operating
performance or to cash flow from operating activities as a measure of its liquidity, but should be
used in conjunction with GAAP net income.
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Corporate Property Associates 17 Global Incorporated
Adjusted Cash Flow from Operating Activities (Unaudited)
(in thousands, except share and per share amounts)
Adjusted Cash Flow from Operating Activities (Unaudited)
(in thousands, except share and per share amounts)
Three months ended March 31, | ||||||||
2011 | 2010 | |||||||
Cash flow provided by operating activities as reported |
$ | 26,404 | $ | 15,509 | ||||
Adjustments: |
||||||||
Distributions received from equity investments in real estate in excess of equity income, net (a) |
2,085 | 332 | ||||||
Distributions paid to noncontrolling interests, net (b) |
(5,059 | ) | (2,394 | ) | ||||
Changes in working capital (c) |
(947 | ) | (4,300 | ) | ||||
Adjusted cash flow from operating activities (d) |
$ | 22,483 | $ | 9,147 | ||||
Adjusted cash flow per share |
$ | 0.15 | $ | 0.10 | ||||
Distributions declared per share |
$ | 0.1600 | $ | 0.1600 | ||||
Payout ratio (distributions per share/adjusted cash flow per share) |
107 | % | 160 | % | ||||
Weighted average shares outstanding |
151,599,433 | 87,261,461 | ||||||
(a) | To the extent we receive distributions in excess of 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 and the receipt of certain receivables in a period other than that in which the item is recognized in determining net income may distort the actual cash flow that our core operations generate. We adjust our GAAP cash flow provided by operating activities to record such amounts in the period in which the item was actually recognized. | |
(d) | During the first quarter of 2011, we made an adjustment to exclude the impact of escrow funds from Adjusted cash flow from operating activities as, more often than not, these funds represent investing and/or financing activities. The amount previously furnished for Adjusted cash flow from operating activities for the three months ended March 31, 2010 has been revised in the table above to reflect this reclassification. |
Non-GAAP Financial Disclosure
Adjusted cash flow from operating activities refers to our cash flow from operating activities (as
computed in accordance with GAAP) adjusted, where applicable, primarily to: add cash distributions
that we receive from our investments in unconsolidated real estate joint ventures in excess of our
equity income; subtract cash distributions that we make to our noncontrolling partners in real
estate joint ventures that we consolidate; and eliminate changes in working capital. We hold a
number of interests in real estate joint ventures, and we believe that adjusting our GAAP cash flow
provided by operating activities to reflect these actual cash receipts and cash payments, as well
as eliminating the effect of timing differences between the payment of certain liabilities and the
receipt of certain receivables in a period other than that in which the item is recognized may give
investors additional information about our actual cash flow that is not incorporated in cash flow
from operating activities as defined by GAAP.
We believe that adjusted cash flow from operating activities is a useful supplemental measure for
assessing the cash flow generated from our core operations as it gives investors important
information about our liquidity that is not provided within cash flow from operating activities as
defined by GAAP, and we use this measure when evaluating distributions to shareholders. Adjusted
cash flow from operating activities should not be considered as an alternative to cash provided by
operating activities computed on a GAAP basis as a measure of our liquidity. As we are still in our
offering and investment stage, we also consider our expectations as to the yields that may be
generated on existing investments and our acquisition pipeline when evaluating distributions to
shareholders.
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Corporate Property Associates 17 Global Incorporated
Portfolio Diversification as of March 31, 2011 (Unaudited)
Top Ten Tenants by Rent (Pro Rata Basis)
(in thousands)
Portfolio Diversification as of March 31, 2011 (Unaudited)
Top Ten Tenants by Rent (Pro Rata Basis)
(in thousands)
Annualized Contractual | ||||||||
Tenant/Lease Guarantor | Minimum Base Rent | Percent | ||||||
General Parts Inc. (Carquest) (a) |
$ | 17,472 | 11 | % | ||||
Agrokor d.d. (a) |
16,010 | 10 | % | |||||
The New York Times Company |
13,503 | 9 | % | |||||
C1000 B.V. (a) |
13,458 | 9 | % | |||||
Eroski Sociedad Cooperativa (a) |
11,639 | 7 | % | |||||
DTS Distribuidora de Television Digital S.A. (a) |
9,305 | 6 | % | |||||
Terminal Freezers, LLC |
8,395 | 5 | % | |||||
LifeTime Fitness, Inc. |
5,887 | 4 | % | |||||
Angelica Corporation |
5,198 | 3 | % | |||||
Flint River Services, LLC |
4,000 | 3 | % | |||||
Total |
$ | 104,867 | 67 | % | ||||
Weighted
Average Lease Term for Portfolio: 17.4 years
(a) | Rent amounts are subject to fluctuations in foreign currency exchange rates. |
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Corporate Property Associates 17 Global Incorporated
Portfolio Diversification as of March 31, 2011 (Unaudited)
by Geography and Property Type (Pro Rata Basis)
(in thousands)
Portfolio Diversification as of March 31, 2011 (Unaudited)
by Geography and Property Type (Pro Rata Basis)
(in thousands)
Annualized Contractual | ||||||||
Region | Minimum Base Rent | Percent | ||||||
U.S. |
||||||||
East |
$ | 41,086 | 26 | % | ||||
South |
16,548 | 11 | % | |||||
Midwest |
15,890 | 10 | % | |||||
West |
15,671 | 10 | % | |||||
U.S. Total |
89,195 | 57 | % | |||||
International |
||||||||
Spain |
20,944 | 13 | % | |||||
Croatia |
16,010 | 10 | % | |||||
Netherlands |
13,458 | 9 | % | |||||
United Kingdom |
5,582 | 4 | % | |||||
Germany |
5,042 | 3 | % | |||||
Hungary |
3,545 | 2 | % | |||||
Canada |
1,423 | 1 | % | |||||
Poland |
1,197 | 1 | % | |||||
International Total |
67,201 | 43 | % | |||||
Total |
$ | 156,396 | 100 | % | ||||
Annualized Contractual | ||||||||
Property Type | Minimum Base Rent | Percent | ||||||
Warehouse/Distribution |
$ | 74,356 | 47 | % | ||||
Office |
39,552 | 25 | % | |||||
Industrial |
23,561 | 15 | % | |||||
Retail |
15,416 | 10 | % | |||||
Other (a) |
2,511 | 2 | % | |||||
Hospitality |
1,000 | 1 | % | |||||
Total |
$ | 156,396 | 100 | % | ||||
(a) | Includes rent from tenants with the following property types: education (2%) and residential (0.01%). |
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Corporate Property Associates 17 Global Incorporated
Portfolio Diversification as of March 31, 2011 (Unaudited)
by Tenant Industry (Pro Rata Basis)
(in thousands)
Portfolio Diversification as of March 31, 2011 (Unaudited)
by Tenant Industry (Pro Rata Basis)
(in thousands)
Annualized Contractual | ||||||||
Industry Type (a) | Minimum Base Rent | Percent | ||||||
Retail Trade |
$ | 51,942 | 33 | % | ||||
Media: Printing and Publishing |
22,808 | 15 | % | |||||
Beverages, Food, and Tobacco |
19,203 | 12 | % | |||||
Transportation Cargo |
11,714 | 8 | % | |||||
Electronics |
6,473 | 4 | % | |||||
Chemicals, Plastics, Rubber, and Glass |
6,373 | 4 | % | |||||
Healthcare, Education and Childcare |
6,119 | 4 | % | |||||
Leisure, Amusement, Entertainment |
5,887 | 4 | % | |||||
Consumer Services |
5,196 | 3 | % | |||||
Machinery |
4,102 | 3 | % | |||||
Business and Commercial Services |
4,000 | 3 | % | |||||
Banking |
3,821 | 2 | % | |||||
Textiles, Leather, and Apparel |
2,830 | 2 | % | |||||
Transportation Personal |
2,263 | 1 | % | |||||
Automobile |
2,043 | 1 | % | |||||
Other (b) |
1,622 | 1 | % | |||||
Total |
$ | 156,396 | 100 | % | ||||
(a) | Based on the Moodys Investors Service, Inc. classification system and information provided by the tenant. | |
(b) | Includes tenants in hotels and gaming (0.6%), consumer and durable goods (0.2%) and mining, metals, and primary metal industries (0.2%). |
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