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8-K - FORM 8-K - CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCc14711e8vk.htm
Exhibit 99.1
(CPA LOGO)
Corporate Property Associates 16 — Global Incorporated
Supplemental Information
As of December 31, 2010
As used in this supplemental package, the terms “the Company,” “we,” “us” and “our” include Corporate Property Associates 16 — Global Incorporated (“CPA®:16”), 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 SEC, 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.CPA16GLOBAL.com
   

 

 


 

Corporate Property Associates 16 — Global Incorporated
Reconciliation of Net Income (Loss) Attributable to CPA
®:16 — Global Shareholders to Funds From Operations — as adjusted (AFFO) (Unaudited)
(in thousands, except share and per share amounts)
                                                 
    Three months ended December 31,     Years ended December 31,  
    2010     2009     2008     2010     2009     2008  
Net income (loss) attributable to CPA®:16 — Global shareholders
  $ 7,630     $ (2,080 )   $ 1,598     $ 32,007     $ (2,540 )   $ 20,247  
Adjustments:
                                               
Depreciation and amortization of real property
    12,559       12,450       11,339       48,368       48,206       45,757  
Loss (gain) on sale of real estate
          28             78       (7,634 )     (136 )
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:
                                               
Depreciation and amortization of real property
    2,169       2,429       2,431       8,563       9,470       10,292  
Gain on sale of real estate
          (79 )                 (3,958 )      
Proportionate share of adjustments for noncontrolling interests to arrive at FFO
    (1,548 )     (2,942 )     (1,698 )     (10,457 )     (10,413 )     (9,102 )
 
                                   
Total adjustments
    13,180       11,886       12,072       46,552       35,671       46,811  
 
                                   
FFO — as defined by NAREIT
    20,810       9,806       13,670       78,559       33,131       67,058  
 
                                   
Adjustments:
                                               
Gain on deconsolidation of subsidiary
                      (7,082 )            
Gain on extinguishment of debt
    (879 )                 (879 )     (8,825 )      
Other depreciation, amortization and non-cash charges
    297       1,409       256       237       413       3,368  
Straight-line and other rent adjustments
    285       275       (1,202 )     (260 )     1,227       (1,732 )
Impairment charges
    11       10,749       890       9,808       55,958       890  
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO:
                                               
Other depreciation, amortization and non-cash charges
                (19 )           (163 )     117  
Straight-line and other rent adjustments
    (47 )     (117 )     149       (247 )     (178 )     457  
Impairment charges
          3,301       3,071       1,046       5,065       3,071  
Loss on extinguishment of debt
          14                   726        
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO
    (93 )     (4,979 )     4,752       (2,833 )     (10,345 )     2,533  
 
                                   
Total adjustments
    (426 )     10,652       7,897       (210 )     43,878       8,704  
 
                                   
AFFO (a)
  $ 20,384     $ 20,458     $ 21,567     $ 78,349     $ 77,009     $ 75,762  
 
                                   
AFFO per share (b)
  $ 0.19     $ 0.19     $ 0.20     $ 0.72     $ 0.72     $ 0.72  
 
                                   
Weighted average shares outstanding
    125,731,770       122,924,636       122,548,847       124,631,975       122,824,957       121,314,180  
 
                                   
     
(a)  
The amounts previously furnished for the three months and year ended December 31, 2009 of $20.5 million and $80.4 million, respectively, have been revised in the table above to correct an inadvertent calculation error.
 
(b)  
Numerator for AFFO per share calculation:
                                                 
AFFO
  $ 20,384     $ 20,458     $ 21,567     $ 78,349     $ 77,009     $ 75,762  
Add: Issuance of shares to an affiliate in satisfaction of fees due
    2,942       2,945       3,005       11,750       11,729       12,021  
 
                                   
AFFO numerator in determination of AFFO per share
  $ 23,326     $ 23,403     $ 24,572     $ 90,099     $ 88,738     $ 87,783  
 
                                   
Non-GAAP Financial Disclosure
Funds from Operations (“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 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. As a result, we believe that AFFO and AFFO per share are useful supplemental measures 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)
                         
    Years ended December 31,  
    2010     2009     2008  
Cash flow from operating activities — as reported
  $ 121,340     $ 119,879     $ 117,435  
Adjustments:
                       
Distributions received from equity investments in real estate in excess of equity income, net(a)
    5,245       8,645       10,721  
Distributions paid to noncontrolling interests, net (b)
    (11,755 )     (15,585 )     (5,980 )
Changes in working capital (c)
    (247 )     1,286       (6,301 )
 
                 
Adjusted cash flow from operating activities(d)
  $ 114,583     $ 114,225     $ 115,875  
 
                 
Adjusted cash flow per share
  $ 0.92     $ 0.93     $ 0.96  
 
                 
 
                       
Distributions declared per share
  $ 0.6624     $ 0.6621     $ 0.6576  
 
                 
Payout ratio (distributions per share/adjusted cash flow per share)
    72 %     71 %     69 %
 
                 
 
                       
Weighted average shares outstanding
    124,631,975       122,824,957       121,314,180  
 
                 
 
     
(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 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. In addition, an adjustment to exclude the impact of escrow funds was introduced in 2009 as more often than not these funds are released to the lender.
 
(d)  
The amount previously furnished for the year ended December 31, 2008 of $107.5 million has been revised in the table above to reflect the actual amounts of cash distributed by foreign equity investments in real estate in the period.
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.

 

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Corporate Property Associates 16 — Global Incorporated
Portfolio Diversification as of December 31, 2010 (Unaudited)
Top Ten Tenants by Rent (Pro Rata Basis)

(in thousands)
                 
    Annualized Contractual        
Tenant/Lease Guarantor   Minimum Base Rent     Percent  
Telcordia Technologies, Inc.
  $ 10,085       5 %
U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    9,996       5 %
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a)
    9,568       5 %
Nordic Cold Storage LLC
    6,916       4 %
The New York Times Company
    6,690       4 %
Fraikin SAS (a)
    6,114       3 %
International Management Services Group
    4,669       2 %
The Talaria Company, LLC
    4,663       2 %
MetoKote Corporation (a)
    4,430       2 %
Prefecture de Police (a)
    4,414       2 %
 
           
Total
  $ 67,545       34 %
 
           
Weighted Average Lease Term for Portfolio: 13.8 years
(PERFORMANCE 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 December 31, 2010 (Unaudited)
by Geography and Property Type (Pro Rata Basis)

(in thousands)
                 
    Annualized Contractual        
Region   Minimum Base Rent     Percent  
U.S.
               
East
  $ 44,334       22 %
South
    34,848       18 %
West
    23,059       12 %
Midwest
    22,293       11 %
 
           
U.S. Total
    124,534       63 %
 
           
 
               
International
               
Germany
    29,656       15 %
France
    13,387       6 %
Finland
    11,717       6 %
United Kingdom
    4,418       2 %
Asia(a)
    4,263       2 %
Poland
    3,954       2 %
Hungary
    3,469       2 %
Other(b)
    3,804       2 %
 
           
International Total
    74,668       37 %
 
           
Total
  $ 199,202       100 %
 
           
                 
    Annualized Contractual        
Property Type   Minimum Base Rent     Percent  
Industrial
  $ 75,960       38 %
Office
    43,601       22 %
Warehouse/Distribution
    32,322       16 %
Retail
    25,339       13 %
Self-Storage
    9,996       5 %
Hospitality
    6,549       3 %
Other Properties(c)
    5,435       3 %
 
           
Total
  $ 199,202       100 %
 
           
 
     
(a)  
Includes rent from tenants in Malaysia and Thailand.
 
(b)  
Includes rent from tenants in Canada, Mexico and Sweden.
 
(c)  
Includes rent from tenants with the following property types: residential (2.2%), education (0.5%), and land (0.04%).
     
(PIE CHART)
  (PIE CHART)

 

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Corporate Property Associates 16 — Global Incorporated
Portfolio Diversification as of December 31, 2010 (Unaudited)
by Tenant Industry (Pro Rata Basis)

(in thousands)
                 
    Annualized Contractual        
Industry Type(a)   Minimum Base Rent     Percent  
Retail Trade
  $ 29,751       15 %
Chemicals, Plastics, Rubber, and Glass
    16,125       8 %
Automobile
    13,972       7 %
Electronics
    13,757       7 %
Healthcare, Education and Childcare
    11,954       6 %
Transportation — Cargo
    11,733       6 %
Telecommunications
    10,135       5 %
Consumer Non-durable Goods
    9,760       5 %
Construction and Building
    9,587       5 %
Media: Printing and Publishing
    8,806       5 %
Beverages, Food, and Tobacco
    8,558       4 %
Business and Commercial Services
    6,916       4 %
Hotels and Gaming
    6,549       3 %
Buildings and Real Estate
    6,497       3 %
Machinery
    6,293       3 %
Insurance
    4,760       2 %
Federal, State and Local Government
    4,414       2 %
Textiles, Leather, and Apparel
    3,879       2 %
Grocery
    3,653       2 %
Transportation — Personal
    3,499       2 %
Other(b)
    8,604       4 %
 
           
Total
  $ 199,202       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: aerospace & defense (1.4%), mining, metals and primary metal industries (1.2%), consumer services (1.2%), and utilities (0.5%).

 

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