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Exhibit 99.1

 

LOGO

Corporate Property Associates 17 – Global Incorporated

Supplemental Unaudited Information

As of June 30, 2012

As used in this supplemental package, the terms “the Company,” “we,” “us” and “our” include Corporate Property Associates 17 – Global Incorporated (“CPA®:17 – Global”), 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”), modified funds from operations (“MFFO”), adjusted cash flow from operating activities (“ACFO”), and total adjusted revenue. 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, 2011. We do not undertake to revise or update any forward-looking statements.

 

Executive Offices

50 Rockefeller Plaza

New York, NY 10020

Tel: 1-800-WPCAREY or (212) 492-1100

Fax: (212) 492-8922

Web Site Address: www.CPA17GLOBAL.com

    

Investor Relations

Susan C. Hyde

Managing Director & Director of Investor Relations

W. P. Carey & Co. LLC

Phone: (212) 492-1151

  


Corporate Property Associates 17 – Global Incorporated

Reconciliation of Net Income Attributable to CPA®:17 – Global Shareholders

to Modified Funds From Operations (MFFO) (Unaudited)

(in thousands, except share and per share amounts)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
    2012     2011     2012     2011  

Net income attributable to CPA®:17 – Global shareholders

  $ 14,266     $ 12,847     $ 25,389     $ 25,278  

Adjustments:

       

Depreciation and amortization of real property

    16,459       8,829       30,652       16,830  

Gain on sale of real estate

           (787)        (740)        (787)   

Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO:

       

Depreciation and amortization of real property

    4,100       3,225       8,500       5,264  

Impairment charges (a)

    (54)               (54)          

Gain on sale of real estate, net

           (3)               (3)   

Proportionate share of adjustments for noncontrolling interests to arrive at FFO

    (150)        (167)        (279)        (326)   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

    20,355       11,097       38,079       20,978  
 

 

 

   

 

 

   

 

 

   

 

 

 

FFO — as defined by NAREIT (a)

    34,621       23,944       63,468       46,256  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments:

       

Other depreciation, amortization and non-cash charges

    832       (179)        1,005       445  

Straight-line and other rent adjustments (b)

    (3,275)        (3,077)        (7,217)        (6,127)   

Impairment charges (c)

                  2,019       -   

Acquisition expenses (d)

    1,007       3,618       1,725       4,028  

Above-market rent intangible lease amortization, net (e)

    251       497       533       947  

Amortization of premiums on debt investments, net

    32       37       69       74  

Realized gains on foreign currency, derivatives and other (f)

    (1,183)        (645)        (1,669)        (588)   

Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at MFFO:

       

Other depreciation, amortization and non-cash charges

           10       9       1  

Straight-line and other rent adjustments (b)

    (19)        (57)        (28)        (184)   

Gain on extinguishment of debt (g)

    (1,914)               (1,914)          

Acquisition expenses (d)

    64       49       128       106  

Above-market rent intangible lease amortization, net (e)

    7       14       14       12  

Realized losses (gains) on foreign currency, derivatives and other (f)

    17       (6)        17       (5)   

Proportionate share of adjustments for noncontrolling interests to arrive at MFFO

    508       185       1,487       622  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

    (3,673)        446       (3,822)        (669)   
 

 

 

   

 

 

   

 

 

   

 

 

 

MFFO

  $ 30,948     $ 24,390     $ 59,646     $ 45,587  
 

 

 

   

 

 

   

 

 

   

 

 

 

MFFO per share

  $ 0.15     $ 0.17     $ 0.30     $ 0.32  
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding

    237,203,712        165,796,441       226,590,138       158,736,669  
 

 

 

   

 

 

   

 

 

   

 

 

 

MFFO per share calculation:

 

       
    Three Months Ended June 30,     Six Months Ended June 30,  
    2012     2011     2012     2011  

MFFO

  $ 30,948     $ 24,390     $ 59,646     $ 45,587  

Issuance of shares to an affiliate in satisfaction of fees due

    4,765       3,081       9,318       5,930  
 

 

 

   

 

 

   

 

 

   

 

 

 

MFFO numerator in determination of MFFO per share

  $ 35,713     $ 27,471     $ 68,964     $ 51,517  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

 

 

(a) The SEC Staff has recently stated that they take no position on the inclusion or exclusion of impairment write-downs in arriving at FFO. Since 2003, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has taken the position that the exclusion of impairment charges on real estate is consistent with its definition of FFO. Accordingly, we have revised our computation of FFO to exclude impairment charges on real estate, if any, in arriving at FFO for all periods presented.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 2


(b) Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in 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) Impairment charges were incurred on our CMBS portfolio and are considered non-real estate impairments. As such, these impairment charges were not included in our computation of FFO as defined by NAREIT but are included as an adjustment in arriving at MFFO as these charges are not directly related or attributable to our operations.
(d) 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, 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 and income from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to shareholders, 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.
(e) 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.
(f) Management believes that adjusting for fair value adjustments for derivatives provides useful information because such fair value adjustments are based on market fluctuations and may not be directly related or attributable to our operations.
(g) Relates to our share of gain on the extinguishment of debt recognized by a jointly-owned investment.

Non-GAAP Financial Disclosure – FFO and MFFO

Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT has promulgated a measure known as funds from operations, or FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a real estate investment trust, or REIT. The use of FFO is recommended by the REIT industry as a supplemental performance 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, or the White Paper. 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 indications exist and if the carrying, or book value, exceeds 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

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 3


group level under GAAP) from such asset. Investors should note, 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 whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO described above, investors are cautioned that, due to the fact that impairments are based on estimated future undiscounted cash flows and the relatively limited term of our operations, 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, specifically acquisition fees and expenses for all industries as items that are expensed under GAAP, 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. As disclosed in the prospectus for our follow-on offering dated April 7, 2011 (the “Prospectus”), 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 was terminated in April 2011. Thus, we do not intend to continuously purchase assets and intend to have a limited life. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (“IPA”), an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental 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 after 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 after our offering and most of our acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that 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, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA 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 which are unrealized and may not

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 4


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. Inasmuch as interest rate hedges are not a fundamental part of our operations, 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 IPA’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 which 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 our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to 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 (loss) or income (loss) from continuing operations 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 shareholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance.

MFFO has limitations as a performance measure in an offering such as ours, where the price of a share of common stock is a stated value and there is no net asset value determination during the offering stage and for a period thereafter. MFFO is useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete and net asset value is disclosed. MFFO is not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining MFFO.

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.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 5


Corporate Property Associates 17 – Global Incorporated

Adjusted Cash Flow from Operating Activities (ACFO) (Unaudited)

(in thousands)

 

                 Six Months Ended  June 30,          
     2012       2011  

Summarized cash flow information:

     

Cash flow provided by operating activities

   $ 80,026      $ 45,713  
  

 

 

    

 

 

 

Cash flow used in investing activities

   $ (229,339)       $ (423,753)   
  

 

 

    

 

 

 

Cash flow provided by financing activities

   $ 402,378      $ 433,260  
  

 

 

    

 

 

 

Reconciliation of adjusted cash flow from operating activities:

     

Cash flow provided by operating activities

   $ 80,026      $ 45,713  

Adjustments related to equity method investments:

     

Add: Distributions received from equity investments in real estate in excess of equity income, net

     6,426        84,734  

Less: Distributions received from equity investments in real estate in excess of equity income — attributable to financing activities

     -         (78,168)   
  

 

 

    

 

 

 

Distributions received from equity investments in real estate in excess of equity income — attributable to operating activities (a)

     6,426        6,566  

Adjustments related to noncontrolling interests:

     

Less: Distributions (paid to) net of contributions received from noncontrolling interests

     (11,155)         (11,440)   

Add: Distributions paid to (received from) noncontrolling interests, net not attributable to operating activities

     -         1,859  
  

 

 

    

 

 

 

Distributions paid to noncontrolling interests, attributable to operating activities (b)

     (11,155)         (9,581)   
  

 

 

    

 

 

 

Adjustments related to changes in working capital (c)

     

Net changes in other assets and liabilities

     (3,013)         359  
  

 

 

    

 

 

 

ACFO

   $ 72,284      $ 43,057  
  

 

 

    

 

 

 

Distributions declared (d)

   $ 73,639      $ 51,192  
  

 

 

    

 

 

 

 

 

 

(a) Cash flow provided by operating activities on a GAAP basis does not include distributions that we receive from equity investments in excess of our equity income. All such excess distributions, including our share of distributions of property-level cash flows in excess of operating income, are reported as cash flows provided by investing activities in our statement of cash flows. In calculating ACFO, we make an adjustment to our reported cash flow provided by operating activities to add such distributions to the extent they relate to our pro rata share of property-level operating income, after deducting any portion of such distributions attributable to the financing or investment activities of the underlying jointly-owned investment.
(b) Cash flow provided by operating activities on a GAAP basis does not include contributions that we receive from noncontrolling interests and distributions that we pay to noncontrolling interests in our consolidated jointly-owned investments. All such contributions and distributions, including contributions to and distributions of property-level operating cash flows, are reported as cash flows used in or provided by financing activities in our statement of cash flows. In calculating ACFO, we make adjustments to our reported cash flow provided by operating activities to add contributions received from noncontrolling interests and subtract distributions paid to noncontrolling interests to the extent these contributions or distributions relate to operating activities of the underlying property jointly-owned investments.
(c) Cash flow provided by operating activities on a GAAP basis includes adjustments to reflect the impact of the “net changes in other operating assets and liabilities”. We make adjustments to cash flow provided by operating activities to incorporate changes between reporting periods in other assets and liabilities as we believe that these adjustments better reflect cash generated from core operations.
(d) During the six months ended June 30, 2012 and 2011, 98% and 84%, respectively, of distributions were sourced from ACFO, with the remainder of the 2011 distributions being sourced from offering proceeds. From inception through June 30, 2012, cumulative distributions of $301.8 million, including cash distributions of $154.1 million, were sourced 82% from ACFO, with the remainder sourced from offering proceeds. Distribution coverage based on GAAP net income was 32% from inception through June 30, 2012 and 34% for the six months ended June 30, 2012.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 6


Non-GAAP Financial Disclosure – ACFO

ACFO refers to our cash flow from operating activities (as computed in accordance with GAAP) adjusted, where applicable, primarily to: add cash distributions of property-level operating cash flows that we receive from our investments in unconsolidated real estate jointly-owned investments in excess of our equity income; subtract cash distributions of property-level operating cash flows that we make to our noncontrolling partners in real estate jointly-owned investments that we consolidate net of such partners’ contributions to our share of property-level operating cash flows; and eliminate changes in working capital. We hold a number of interests in real estate jointly-owned investments, and we believe that adjusting our GAAP cash flow provided by operating activities to reflect these actual cash receipts and cash payments that are attributable to the property-level operating cash flows of the underlying jointly-owned investments, 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. The jointly-owned investments are property-owning entities and their activities are generally limited to receiving rental income, financing the property and ultimately disposing of the property. Distributions and contributions related to these activities are based on the ownership percentages of the partners in each jointly-owned investment. In accordance with each jointly-owned investment’s operating agreement, jointly-owned investment partners generally participate in the jointly-owned investment’s operating cash flow, debt financing and proceeds from property distributions. Distributions of cash to jointly-owned investment partners are typically made on a monthly basis.

We believe that ACFO 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. While we believe that ACFO is an important supplemental measure, it should not be considered as an alternative to cash flow from operating activities as a measure of liquidity. This non-GAAP measure should be used in conjunction with cash flow from operating activities as defined by GAAP. 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.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 7


CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

Total Adjusted Revenue (Pro rata Basis) (Unaudited)

(in thousands)

 

     Three Months Ended              Six Months Ended June 30,           
     June 30, 2012          March 31, 2012              December 31, 2011              September 30, 2011              June 30, 2011          2012      2011  

Reconciliation of Total Adjusted Revenue

                    

Total revenue — as reported

   $ 68,721      $ 65,804      $ 60,256      $ 49,243      $ 44,878      $ 134,525      $ 87,036  

Less: Other operating income

     (893)         (924)         (753)         (623)         (961)         (1,817)         (1,510)   

Less: Interest income revenue

     (1,830)         (1,391)         (1,429)         (1,217)         (1,737)         (3,221)         (3,956)   

Less: Other real estate income

     (9,945)         (9,763)         (6,615)         (5,120)         (1,152)         (19,708)         (2,005)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total consolidated lease revenues

     56,053        53,726        51,459        42,283        41,028        109,779        79,565  

Lease revenues — discontinued operations

     -         106        66        -         284        106        671  

Add: Pro rata share of revenues from equity investments

     6,367        6,407        6,369        6,650        6,224        12,774        10,865  

Less: Pro rata share of revenues due to noncontrolling interests

     (4,099)         (4,264)         (4,088)         (4,073)         (4,069)         (8,363)         (8,296)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total pro rata net lease revenues

     58,321        55,975        53,806        44,860        43,467        114,296        82,805  

Add: Other real estate income

     9,945        9,763        6,615        5,120        1,152        19,708        2,005  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Adjusted Revenue

   $                 68,266      $                 65,738      $                 60,421      $                 49,980      $                 44,619      $                 134,004      $                 84,810  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Financial Disclosure – Total Adjusted Revenue

Total adjusted revenue is a non-GAAP financial measure that represents revenues on a GAAP basis adjusted for our pro rata share of revenues from equity investments as well as the pro rata share of revenues due to noncontrolling interests. We believe that total adjusted revenue is useful to investors and analysts as a supplemental measure of revenues from our core operations, and we use it to evaluate the stability of our underlying revenue streams. Total adjusted revenue should not be considered as an alternative to revenues computed on a GAAP basis as a measure of our profitability. Total adjusted revenue may not be comparable to similarly titled measures of other companies.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 8


Corporate Property Associates 17 – Global Incorporated

Portfolio Diversification as of June 30, 2012 (Unaudited)

Top Ten Tenants by Rent (Pro Rata Basis)

(in thousands, except percentages)

 

Tenant/Lease Guarantor

 

  Annualized Contractual  

Minimum Base Rent

 

        Percent        

Metro Cash & Carry Italia S.p.A. (a)

  $                           26,364    11%

Agrokor d.d. (a)

  19,435    8%

General Parts Inc., Golden State Supply LLC, Straus-Frank
Enterprises LLC, General Parts Distribution LLC and
Worldpac Inc., collectively “CARQUEST”

  17,653    7%

The New York Times Company

  13,911    6%

C1000 Logistiek Vastgoed B.V. (a)

  12,319    5%

Blue Cross and Blue Shield of Minnesota, Inc.

  11,276    5%

Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)

  11,259    5%

Eroski Sociedad Cooperativa (a)

  10,651    4%

A-American Self Storage

  9,934    4%

Terminal Freezers, LLC

  8,605    4%
 

 

 

 

Total

  $                        141,407    59%
 

 

 

 

Weighted-Average Lease Term for Portfolio:

  15.4 years   

 

 

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

Portfolio

At June 30, 2012, our portfolio was comprised of our full or partial ownership interests in 305 fully-occupied properties, substantially all of which were triple-net leased to 47 tenants, and totaled approximately 28 million square feet (on a pro rata basis). In addition, we own 49 self-storage properties and retain a fee interest in a hotel property for an aggregate of approximately 4 million square feet (on a pro rata basis).

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 9


Corporate Property Associates 17 – Global Incorporated

Portfolio Diversification as of June 30, 2012 (Unaudited)

by Geography and Property Type (Pro Rata Basis)

(in thousands, except percentages)

 

Region  

  Annualized Contractual  

Minimum Base Rent

                Percent        

 

 

 

 

   

 

U.S.

     

Midwest

  $ 39,744        17%

East

    36,943        16%

West

    28,649        12%

South

    28,303        12%
 

 

 

   

 

U.S. Total

    133,639        57%
 

 

 

   

 

International

     

Italy

    26,365        11%

Croatia

    19,435        8%

Spain

    19,209        8%

Germany

    16,236        7%

Netherlands

    12,319        5%

United Kingdom

    5,529        2%

Hungary

    3,264        1%

Poland

    1,836        1%
 

 

 

   

 

International Total

    104,193        43%
 

 

 

   

 

Total

  $         237,832        100%
 

 

 

   

 

Property Type  

  Annualized Contractual  

Minimum Base Rent

                Percent        

 

 

 

 

   

 

Warehouse/Distribution

  $ 76,857        32%

Retail

    62,890        27%

Office

    51,858        22%

Industrial

    27,066        11%

Self Storage

    15,425        6%

Other (a)

    3,736        2%
 

 

 

   

 

Total

  $ 237,832        100%
 

 

 

   

 

 

 

(a) Includes rent from tenants with the following property types: education (1.0%), hospitality (1.0%) and residential (0.01%).

 

Portfolio Diversification by Geography   Portfolio Diversification by Property Type
LOGO   LOGO

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 10


Corporate Property Associates 17 – Global Incorporated

Portfolio Diversification as of June 30, 2012 (Unaudited)

by Tenant Industry (Pro Rata Basis)

(in thousands, except percentages)

 

Industry Type (a)

  Annualized Contractual
Minimum Base Rent
            Percent          

Retail Trade

  $ 61,071        26%   

Grocery

    45,670        19%   

Media: Printing and Publishing

    22,469        9%   

Buildings and Real Estate

    14,113        6%   

Transportation - Cargo

    11,838        5%   

Insurance

    11,276        5%   

Machinery

    10,198        4%   

Chemicals, Plastics, Rubber, and Glass

    7,018        3%   

Electronics

    6,598        3%   

Healthcare, Education and Childcare

    6,393        3%   

Leisure, Amusement, Entertainment

    6,004        3%   

Business and Commercial Services

    5,416        2%   

Consumer Services

    5,197        2%   

Consumer Non-durable Goods

    4,704        2%   

Banking

    3,897        2%   

Transportation - Personal

    3,608        2%   

Beverages, Food, and Tobacco

    3,312        1%   

Automobile

    3,092        1%   

Textiles, Leather, and Apparel

    2,945        1%   

Other (b)

    3,013        1%   
 

 

 

   

 

 

 

Total

  $ 237,832        100%   
 

 

 

   

 

 

 

 

(a) Based on the Moody’s Investors Service, Inc. classification system and information provided by the tenant.
(b) Includes rent from tenants in the following industries: hotels and gaming (0.7%), forest products and paper (0.3%), consumer and durable goods (0.2%), mining, metals, and primary metal industries (0.1%) and telecommunications (0.02%).

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 11


CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

Investment Activity (Unaudited)

For the Six Months Ended June 30, 2012

(in thousands, except square footage)

 

Acquisitions

         

Tenant/Lease Guarantor

 

Property Location(s)

  Purchase Price  (a)     Closing Date   Property Type   Gross Square Footage  

Blue Cross and Blue Shield of Minnesota, Inc.

  Aurora, Eagan, & Virginia, MN   $ 169,011       January-12   Office     1,131,469  

Sabre Communications Corporation and Cellxion, LLC

  Alvarado, TX     4,964       March-12 & June-12   Industrial     44,250  

Nippon Sheet Glass Co., Ltd. (b) (c)

  Tarnobrzeg, Poland     26,579       April-12   Warehouse/Distribution     BTS   

Sabre Communications Corporation and Cellxion, LLC (b)

  Sioux City, IA     17,801       June-12   Industrial     BTS   
   

 

 

       

 

 

 

Total Acquisitions - Leased Properties

      218,355             1,175,719  
   

 

 

       

 

 

 

Property Type

 

Property Location(s)

  Purchase Price (a)     Closing Date          

Self-Storage Facilities

  Various locations in Alabama, Louisiana, & Mississippi     16,800       June-12    
   

 

 

       

Total Acquisitions - Self-Storage Properties

      16,800          
   

 

 

       

Security Type

 

Company

  Purchase Price (a)     Closing Date          

Equity Securities

  Lineage Logistics Holdings LLC     7,070       June-12    
   

 

 

       

Total Acquisitions - Equity Securities

      7,070          
   

 

 

       

Total Acquisitions

    $ 242,225          
   

 

 

       

Dispositions

         

Tenant/Lease Guarantor

 

Property Location(s)

  Gross Sale Price     Date   Property Type   Gross Square Footage  

Dolgencorp, LLC

 

Choudrant, Gardner, Mangham, Mount Hermon, & Richwood, LA; Vass, NC; & Chesterfield, Hopewell, & Hot Springs, VA

  $ 12,922     February-12 &
March-12
  Retail     99,363  
   

 

 

       

 

 

 

Total Dispositions

    $ 12,922           99,363  
   

 

 

       

 

 

 

 

 

 

(a) Includes capitalized transaction costs, where applicable.
(b) Acquisition includes a build-to-suit (“BTS”) transaction. Gross square footage cannot be determined at this time.
(c) Acquisition price reflects applicable foreign exchange rate.

 

CPA®:17 – Global 6/30/2012 Supplemental 8-K — 12