W. P. Carey Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
8-K - 8-K - W. P. Carey Inc.	wpc2018q28-ksupplemental.htm
EX-99.1 - EXHIBIT 99.1 - W. P. Carey Inc.	wpc2018q28-kerexh991.htm

Exhibit 99.2

Filed pursuant to Rule 425 under the Securities Act of 1933, as amended,

and deemed filed pursuant to 14a-12 under the

Securities Exchange Act of 1934, as amended

Filing Person: W. P. Carey Inc.

Subject Company: Corporate Property Associates 17 – Global Incorporated

Commission File No.: 000-52891

W. P. Carey Inc.

Supplemental Information

Second Quarter 2018

Important Disclosures About This Supplemental Package

As used in this supplemental package, the terms “W. P. Carey,” “WPC^®,” “we,” “us” and “our” include W. P. Carey Inc., its consolidated subsidiaries and its predecessors, unless otherwise indicated. “CPA^®REITs” means Corporate Property Associates 17 – Global Incorporated, or CPA:17 – Global, and Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global. “CWI^® REITs” means Carey Watermark Investors Incorporated, or CWI 1, and Carey Watermark Investors 2 Incorporated, or CWI 2. “Managed REITs” means the CPAREITs and the CWI REITs. “Managed Programs” means the Managed REITs and Carey European Student Housing Fund I, L.P., or CESH I. “CCIF” means Carey Credit Income Fund (now known as Guggenheim Credit Income Fund, or GCIF), which was included in the Managed Programs prior to our resignation as its advisor during the third quarter of 2017. “U.S.” means United States. “AUM” means assets under management. “ABR” means contractual minimum annualized base rent. “Proposed Merger” means our proposed merger with CPA:17 – Global, pursuant to a merger agreement that we entered into on June 17, 2018, which was filed as Exhibit 2.1 to a Current Report on Form 8-K that we filed with the Securities and Exchange Commission (“SEC”) on June 18, 2018.

Important Note Regarding Non-GAAP Financial Measures

This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including funds from operations, or FFO; adjusted funds from operations, or AFFO; earnings before interest, taxes, depreciation and amortization, or EBITDA; adjusted EBITDA; pro rata cash net operating income, or pro rata cash NOI; and normalized pro rata cash NOI. A description of these non-GAAP financial measures and reconciliations to their most directly comparable GAAP measures, as well as a description of other metrics presented, are provided within the Appendix to this supplemental package. FFO is a non-GAAP measure defined by the National Association of Real Estate Investments Trusts, Inc., or NAREIT, an industry trade group.

Amounts may not sum to totals due to rounding.

W. P. Carey Inc.

Supplemental Information – Second Quarter 2018



Table of Contents



Overview
Summary Metrics	1
Components of Net Asset Value	3

Financial Results
Statements of Income – Last Five Quarters
Consolidated	6
Owned Real Estate	7
Investment Management	8
FFO and AFFO – Last Five Quarters
Consolidated	9
Owned Real Estate	10
Investment Management	11
Elements of Pro Rata Statement of Income and AFFO Adjustments	12
Capital Expenditures	14

Balance Sheets and Capitalization
Consolidated Balance Sheets	16
Capitalization	17
Debt Overview	18
Debt Maturity	19
Senior Unsecured Notes	20

Owned Real Estate
Investment Activity
Capital Investment Projects	22
Acquisitions and Completed Capital Investment Projects	23
Dispositions	24
Joint Ventures	25
Top Ten Tenants	26
Diversification by Property Type	27
Diversification by Tenant Industry	28
Diversification by Geography	29
Contractual Rent Increases	31
Same Store Analysis	32
Leasing Activity	33
Lease Expirations – Total Net-Lease Portfolio	34
Lease Expirations – Unencumbered Net-Lease Portfolio	35

Investment Management
Selected Information – Managed Programs	37
Managed Programs Fee Summary	38
Investment Activity – Managed Programs	39
Summary of Future Liquidity Strategies for Managed Programs	40
Summary of Back-End Fees for / Interests in the Managed Programs	41

Appendix
Normalized Pro Rata Cash NOI	43
Adjusted EBITDA – Last Five Quarters
Consolidated	45
Owned Real Estate	46
Investment Management	47
Terms and Definitions	48

W. P. Carey Inc.

Overview – Second Quarter 2018



Summary Metrics

As of or for the three months ended June 30, 2018.



Financial Results
	Segment
	Owned Real Estate		Investment Management		Total
Revenues, excluding reimbursable costs – consolidated ($'000)	$	168,179	$	21,694	$	189,873
Net income attributable to W. P. Carey ($'000)	59,316		16,365		75,681
Net income attributable to W. P. Carey per diluted share	0.55		0.15		0.70
Normalized pro rata cash NOI from real estate ($'000) ^{(a) (b)}	169,731		N/A		169,731
Adjusted EBITDA ($'000) ^(a) ^(b)	159,541		27,607		187,148
AFFO attributable to W. P. Carey ($'000) ^{(a) (b)}	116,462		26,137		142,599
AFFO attributable to W. P. Carey per diluted share ^(a) ^(b)	1.08		0.24		1.32

Distributions declared per share – second quarter					1.02
Distributions declared per share – second quarter annualized					4.08
Dividend yield – annualized, based on quarter end share price of $66.35					6.1		%
Dividend payout ratio – for the six months ended June 30, 2018 ^(c)					78.3		%

Balance Sheet and Capitalization
Equity market capitalization – based on quarter end share price of $66.35 ($'000)					$	7,112,766
Pro rata net debt ($'000) ^(d)					4,330,253
Enterprise value ($'000)					11,443,019

Total capitalization ($'000) ^(e)					11,565,449

Total consolidated debt ($'000)					4,401,058
Gross assets ($'000) ^(f)					8,945,697
Liquidity ($'000) ^(g)					1,225,411

Pro rata net debt to enterprise value ^(b)					37.8		%
Pro rata net debt to adjusted EBITDA (annualized) ^(a) ^(b)					5.8x
Total consolidated debt to gross assets					49.2		%

Weighted-average interest rate ^(b)					3.5		%
Weighted-average debt maturity (years) ^(b)					5.6

Moody's Investors Service – corporate rating					Baa2 (stable)
Standard & Poor's Ratings Services – issuer rating					BBB (stable)

Owned Real Estate Portfolio (Pro Rata)
ABR ($’000) ^(h)					$	693,482
Number of net-leased properties					878
Number of operating properties					1
Number of tenants –net-leased properties					208

ABR from investment grade tenants as a % of total ABR – net-leased properties ⁽ⁱ⁾					27.5		%

Net-leased properties – square footage (millions)					86.6

Occupancy – net-leased properties					99.6		%
Weighted-average lease term (years)					10.0

Maximum commitment for capital investment projects expected to be completed during 2018 ($’000)					$	70,067
Acquisitions and completed capital investment projects – second quarter ($'000)					289,193
Dispositions – second quarter ($'000)					128,277

________


(a)	Normalized pro rata cash NOI, Adjusted EBITDA and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how certain non-GAAP measures are calculated.


(b)	Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.


(c)	Represents distributions declared per share divided by AFFO per diluted share on a year-to-date basis.


(d)	Represents total pro rata debt outstanding less consolidated cash and cash equivalents. See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 1

W. P. Carey Inc.

Overview – Second Quarter 2018


(e)	Represents equity market capitalization plus total pro rata debt outstanding. See the Terms and Definitions section in the Appendix for a description of pro rata.


(f)	Gross assets represent consolidated total assets before accumulated depreciation on buildings and improvements. Gross assets are net of accumulated amortization on in-place lease and other intangible assets of $464.2 million and above-market rent intangible assets of $302.2 million.


(g)	Represents availability on our Senior Unsecured Credit Facility plus consolidated cash and cash equivalents.


(h)	See the Terms and Definitions section in the Appendix for a description of ABR.

(i)

Percentage of portfolio is based on ABR, as of June 30, 2018. Includes tenants or guarantors with investment grade ratings (18.7%) and subsidiaries of non-guarantor parent companies with investment grade ratings (8.8%). Investment grade refers to an entity with a rating of BBB- or higher from Standard & Poor’s Ratings Services or Baa3 or higher from Moody’s Investors Service. See the Terms and Definitions section in the Appendix for a description of ABR.



		Investing for the long run^TM \| 2

W. P. Carey Inc.

Overview – Second Quarter 2018



Components of Net Asset Value

Dollars in thousands, except per share amounts.



Owned Real Estate	Three Months Ended Jun. 30, 2018		Annualized
Normalized pro rata cash NOI ^{(a) (b)}	$	169,731	$	678,924

Investment Management	Three Months Ended Jun. 30, 2018		Twelve Months Ended Jun. 30, 2018
Adjusted EBITDA ^{(a) (b)}	$	27,607	$	115,987
Selected Components of Adjusted EBITDA:
Asset management revenue ^(c)	17,268		69,045
Structuring revenue ^(c)	4,426		22,199
Operating partnership interests in real estate cash flow of Managed REITs ^(d)	8,586		42,168
Back-end fees and interests associated with the Managed Programs	See the Summary of Back-End Fees for / Interests in the Managed Programs section for details.

Balance Sheet – Selected Information (Consolidated Unless Otherwise Stated)			As of Jun. 30, 2018
Assets
Book value of real estate excluded from NOI ^(e)			$	51,447
Cash and cash equivalents			122,430
Due from affiliates			78,100
Other assets, net:
Straight-line rent adjustments			$	77,988
Deferred charges			42,705
Restricted cash, including escrow			41,388
Securities and derivatives			26,475
Investment in GCIF securities			23,806
Accounts receivable			20,098
Taxes receivable			17,671
Other intangible assets, net			12,667
Prepaid expenses			12,390
Note receivable			9,637
Leasehold improvements, furniture and fixtures			3,179
Other			169
Total other assets, net			$	288,173

Liabilities
Total pro rata debt outstanding ^(b)			$	4,452,683
Distributions payable			110,972
Deferred income taxes			88,871
Accounts payable, accrued expenses and other liabilities:
Accounts payable and accrued expenses			$	90,552
Prepaid and deferred rents			77,142
Tenant security deposits			31,651
Accrued taxes payable			27,392
Securities and derivatives			4,244
Straight-line rent adjustments			1,878
Other			12,429
Total accounts payable, accrued expenses and other liabilities			$	245,288



		Investing for the long run^TM \| 3

W. P. Carey Inc.

Overview – Second Quarter 2018



Other	Ownership %		Number of Shares / Units Owned	NAV			Implied Value
			A	B			A x B
Ownership in Managed Programs: ^(f)
CPA:17 – Global	4.6	%	16,131,967	$	10.04	^(g)	$	161,965
CPA:18 – Global	3.0	%	4,327,814	8.57		^(g)	37,089
CWI 1	2.6	%	3,597,692	10.41		^(g)	37,452
CWI 2	2.3	%	2,045,049	11.11		^(g)	22,720
CESH I	2.4	%	3,492	1,000.00		^(h)	3,492
							$	262,718

________


(a)	Normalized pro rata cash NOI and Adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how they are calculated.


(b)	Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.


(c)	Amounts are gross of fees paid to the respective subadvisors of CWI 1, CWI 2, CPA:18 – Global (for multi-family properties) and CCIF (prior to our resignation as the advisor to CCIF in the third quarter of 2017).

(d)

We are entitled to receive distributions of our share of earnings up to 10% of the Available Cash of each of the Managed REITs, as defined in their respective operating partnership agreements. Pursuant to the terms of their subadvisory agreements, however, 20% of the distributions of Available Cash we receive from CWI 1 and 25% of the distributions of Available Cash we receive from CWI 2 are paid to their respective subadvisors. Amounts for CWI 1 and CWI 2 are net of fees paid to their respective subadvisors.


(e)	Represents the value of real estate not included in net operating income, such as vacant assets and in-progress build-to-suit properties.


(f)	Separate from operating partnership interests in the Managed REITs and our interests in unconsolidated real estate joint ventures with our affiliate, CPA:17 – Global.


(g)	We calculated the estimated net asset values per share, or NAVs, by relying in part on an estimate of the fair market values of the respective real estate portfolios adjusted to give effect to mortgage loans, both provided by third parties, as well as other adjustments. Refer to the SEC filings of the Managed REITs for the calculation methodologies of the respective NAVs.


(h)	We own limited partnership units of CESH I at its private placement price of $1,000 per share; a NAV for CESH I has not yet been calculated.



		Investing for the long run^TM \| 4

W. P. Carey Inc.

Financial Results

Second Quarter 2018



		Investing for the long run^TM \| 5

W. P. Carey Inc.

Financial Results – Second Quarter 2018



Consolidated Statements of Income – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Revenues
Owned Real Estate:
Lease revenues	$	162,634		$	163,213		$	154,826		$	161,511		$	158,255
Reimbursable tenant costs	5,733			6,219			5,584			5,397			5,322
Operating property revenues	4,865			7,218			6,910			8,449			8,223
Lease termination income and other	680			942			515			1,227			2,247
	173,912			177,592			167,835			176,584			174,047
Investment Management:
Asset management revenue	17,268			16,985			16,854			17,938			17,966
Reimbursable costs from affiliates	5,537			5,304			6,055			6,211			13,479
Structuring revenue	4,426			1,739			6,217			9,817			14,330
Other advisory revenue	—			190			—			99			706
Dealer manager fees	—			—			—			105			1,000
	27,231			24,218			29,126			34,170			47,481
	201,143			201,810			196,961			210,754			221,528
Operating Expenses
Depreciation and amortization	64,337			65,957			64,015			64,040			62,849
General and administrative	16,442			18,583			17,702			17,236			17,529
Reimbursable tenant and affiliate costs	11,270			11,523			11,639			11,608			18,801
Property expenses, excluding reimbursable tenant costs^(a)	8,908			9,899			9,560			10,556			10,530
Stock-based compensation expense	3,698			8,219			4,268			4,635			3,104
Merger and other expenses ^(b)	2,692			(37		)	(533		)	65			1,000
Subadvisor fees ^(c)	1,855			2,032			2,002			5,206			3,672
Impairment charges	—			4,790			2,769			—			—
Restructuring and other compensation ^(d)	—			—			289			1,356			7,718
Dealer manager fees and expenses	—			—			—			462			2,788
	109,202			120,966			111,711			115,164			127,991
Other Income and Expenses
Interest expense	(41,311		)	(38,074		)	(40,401		)	(41,182		)	(42,235		)
Equity in earnings of equity method investments in the Managed Programs and real estate	12,558			15,325			16,930			16,318			15,728
Other gains and (losses)	10,586			(2,763		)	1,356			(4,569		)	(916		)
	(18,167		)	(25,512		)	(22,115		)	(29,433		)	(27,423		)
Income before income taxes and gain on sale of real estate	73,774			55,332			63,135			66,157			66,114
(Provision for) benefit from income taxes	(6,262		)	6,002			192			(1,760		)	(2,448		)
Income before gain on sale of real estate	67,512			61,334			63,327			64,397			63,666
Gain on sale of real estate, net of tax	11,912			6,732			11,146			19,257			3,465
Net Income	79,424			68,066			74,473			83,654			67,131
Net (income) loss attributable to noncontrolling interests	(3,743		)	(2,792		)	736			(3,376		)	(2,813		)
Net Income Attributable to W. P. Carey	$	75,681		$	65,274		$	75,209		$	80,278		$	64,318

Basic Earnings Per Share	$	0.70		$	0.60		$	0.69		$	0.74		$	0.60
Diluted Earnings Per Share	$	0.70		$	0.60		$	0.69		$	0.74		$	0.59
Weighted-Average Shares Outstanding
Basic	108,059,394			108,057,940			108,041,556			108,019,292			107,668,218
Diluted	108,234,934			108,211,936			108,208,918			108,143,694			107,783,204

Distributions Declared Per Share	$	1.020		$	1.015		$	1.010		$	1.005		$	1.000

________


(a)	Amounts for the three and twelve months ended June 30, 2018 include $3.6 million and $21.0 million, respectively, of property expenses related to two hotel operating properties, one of which we sold in April 2018.


(b)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.

(c)

The subadvisors for CWI 1, CWI 2 and CPA:18 – Global earn a percentage of gross fees recorded, which we account for as an expense and are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees. Pursuant to the terms of the subadvisory agreement we had with CCIF’s subadvisor (prior to our resignation as the advisor to CCIF in the third quarter of 2017), we paid a subadvisory fee equal to 50% of the asset management fees and organization and offering costs paid to us by CCIF.


(d)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.



		Investing for the long run^TM \| 6

W. P. Carey Inc.

Financial Results – Second Quarter 2018



Statements of Income, Owned Real Estate – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Revenues
Lease revenues	$	162,634		$	163,213		$	154,826		$	161,511		$	158,255
Reimbursable tenant costs	5,733			6,219			5,584			5,397			5,322
Operating property revenues	4,865			7,218			6,910			8,449			8,223
Lease termination income and other	680			942			515			1,227			2,247
	173,912			177,592			167,835			176,584			174,047
Operating Expenses
Depreciation and amortization	63,374			64,920			62,951			62,970			61,989
General and administrative	10,599			12,065			11,691			11,234			7,803
Property expenses, excluding reimbursable tenant costs^(a)	8,908			9,899			9,560			10,556			10,530
Reimbursable tenant costs	5,733			6,219			5,584			5,397			5,322
Merger and other expenses ^(b)	2,692			(37		)	(533		)	65			1,000
Stock-based compensation expense	1,990			4,306			2,227			1,880			899
Impairment charges	—			4,790			2,769			—			—
	93,296			102,162			94,249			92,102			87,543
Other Income and Expenses
Interest expense	(41,311		)	(38,074		)	(40,401		)	(41,182		)	(42,235		)
Equity in earnings of equity method investments in real estate	3,529			3,358			3,535			3,740			3,721
Other gains and (losses)	9,630			(2,887		)	594			(4,918		)	(1,371		)
	(28,152		)	(37,603		)	(36,272		)	(42,360		)	(39,885		)
Income before income taxes and gain on sale of real estate	52,464			37,827			37,314			42,122			46,619
(Provision for) benefit from income taxes	(1,317		)	3,533			4,953			(1,511		)	(3,731		)
Income before gain on sale of real estate	51,147			41,360			42,267			40,611			42,888
Gain on sale of real estate, net of tax	11,912			6,732			11,146			19,257			3,465
Net Income from Owned Real Estate	63,059			48,092			53,413			59,868			46,353
Net (income) loss attributable to noncontrolling interests	(3,743		)	(2,792		)	736			(3,376		)	(2,813		)
Net Income from Owned Real Estate Attributable to W. P. Carey	$	59,316		$	45,300		$	54,149		$	56,492		$	43,540

Basic Earnings Per Share	$	0.55		$	0.42		$	0.50		$	0.52		$	0.41
Diluted Earnings Per Share	$	0.55		$	0.42		$	0.50		$	0.52		$	0.40
Weighted-Average Shares Outstanding
Basic	108,059,394			108,057,940			108,041,556			108,019,292			107,668,218
Diluted	108,234,934			108,211,936			108,208,918			108,143,694			107,783,204

________


(a)	Amounts for the three and twelve months ended June 30, 2018 include $3.6 million and $21.0 million, respectively, of property expenses related to two hotel operating properties, one of which we sold in April 2018.


(b)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.



		Investing for the long run^TM \| 7

W. P. Carey Inc.

Financial Results – Second Quarter 2018



Statements of Income, Investment Management – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018		Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Revenues
Asset management revenue	$	17,268		$	16,985	$	16,854		$	17,938		$	17,966
Reimbursable costs from affiliates	5,537			5,304		6,055			6,211			13,479
Structuring revenue	4,426			1,739		6,217			9,817			14,330
Other advisory revenue	—			190		—			99			706
Dealer manager fees	—			—		—			105			1,000
	27,231			24,218		29,126			34,170			47,481
Operating Expenses
General and administrative	5,843			6,518		6,011			6,002			9,726
Reimbursable costs from affiliates	5,537			5,304		6,055			6,211			13,479
Subadvisor fees ^(a)	1,855			2,032		2,002			5,206			3,672
Stock-based compensation expense	1,708			3,913		2,041			2,755			2,205
Depreciation and amortization	963			1,037		1,064			1,070			860
Restructuring and other compensation ^(b)	—			—		289			1,356			7,718
Dealer manager fees and expenses	—			—		—			462			2,788
	15,906			18,804		17,462			23,062			40,448
Other Income and Expenses
Equity in earnings of equity method investments in the Managed Programs	9,029			11,967		13,395			12,578			12,007
Other gains and (losses)	956			124		762			349			455
	9,985			12,091		14,157			12,927			12,462
Income before income taxes	21,310			17,505		25,821			24,035			19,495
(Provision for) benefit from income taxes	(4,945		)	2,469		(4,761		)	(249		)	1,283
Net Income from Investment Management Attributable to W. P. Carey	$	16,365		$	19,974	$	21,060		$	23,786		$	20,778

Basic Earnings Per Share	$	0.15		$	0.18	$	0.19		$	0.22		$	0.19
Diluted Earnings Per Share	$	0.15		$	0.18	$	0.19		$	0.22		$	0.19
Weighted-Average Shares Outstanding
Basic	108,059,394			108,057,940		108,041,556			108,019,292			107,668,218
Diluted	108,234,934			108,211,936		108,208,918			108,143,694			107,783,204

________

(a)


(b)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.



		Investing for the long run^TM \| 8

W. P. Carey Inc.

Financial Results – Second Quarter 2018



FFO and AFFO, Consolidated – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income attributable to W. P. Carey	$	75,681		$	65,274		$	75,209		$	80,278		$	64,318
Adjustments:
Depreciation and amortization of real property	63,073			64,580			62,603			62,621			61,636
Gain on sale of real estate, net	(11,912		)	(6,732		)	(11,146		)	(19,257		)	(3,465		)
Impairment charges	—			4,790			2,769			—			—
Proportionate share of adjustments for noncontrolling interests	(2,729		)	(2,782		)	(2,696		)	(2,692		)	(2,562		)
Proportionate share of adjustments to equity in net income of partially owned entities	902			1,252			877			866			833
Total adjustments	49,334			61,108			52,407			41,538			56,442
FFO (as defined by NAREIT) Attributable to W. P. Carey^(a)	125,015			126,382			127,616			121,816			120,760
Adjustments:
Above- and below-market rent intangible lease amortization, net ^(b)	12,303			11,802			17,922			12,459			12,323
Other amortization and non-cash items ^(c)	(7,437		)	5,146			2,198			6,208			6,693
Stock-based compensation	3,698			8,219			4,268			4,635			3,104
Tax expense (benefit) – deferred	3,028			(12,155		)	(10,497		)	(1,234		)	(1,382		)
Merger and other expenses ^(d)	2,692			(37		)	(533		)	65			1,000
Straight-line and other rent adjustments	(2,637		)	(2,296		)	(2,002		)	(3,212		)	(2,965		)
Amortization of deferred financing costs	1,905			(194		)	2,043			2,184			2,542
Realized losses (gains) on foreign currency	627			(1,515		)	(472		)	(449		)	(378		)
Loss (gain) on extinguishment of debt	—			1,609			(81		)	1,566			(2,443		)
Restructuring and other compensation ^(e)	—			—			289			1,356			7,718
Proportionate share of adjustments to equity in net income of partially owned entities	3,635			1,752			2,884			3,064			1,978
Proportionate share of adjustments for noncontrolling interests	(230		)	(343		)	(1,573		)	(216		)	(513		)
Total adjustments	17,584			11,988			14,446			26,426			27,677
AFFO Attributable to W. P. Carey^(a)	$	142,599		$	138,370		$	142,062		$	148,242		$	148,437

Summary
FFO (as defined by NAREIT) attributable to W. P. Carey^(a)	$	125,015		$	126,382		$	127,616		$	121,816		$	120,760
FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share ^(a)	$	1.16		$	1.16		$	1.18		$	1.13		$	1.12
AFFO attributable to W. P. Carey^(a)	$	142,599		$	138,370		$	142,062		$	148,242		$	148,437
AFFO attributable to W. P. Carey per diluted share ^(a)	$	1.32		$	1.28		$	1.31		$	1.37		$	1.38
Diluted weighted-average shares outstanding	108,234,934			108,211,936			108,208,918			108,143,694			107,783,204

________


(a)	FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.


(b)	Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to the accelerated amortization of an above-market rent intangible in connection with a lease restructuring.


(c)	Primarily represents unrealized gains and losses from foreign exchange movements and derivatives.


(d)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.


(e)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.



		Investing for the long run^TM \| 9

W. P. Carey Inc.

Financial Results – Second Quarter 2018



FFO and AFFO, Owned Real Estate – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income from Owned Real Estate attributable to W. P. Carey	$	59,316		$	45,300		$	54,149		$	56,492		$	43,540
Adjustments:
Depreciation and amortization of real property	63,073			64,580			62,603			62,621			61,636
Gain on sale of real estate, net	(11,912		)	(6,732		)	(11,146		)	(19,257		)	(3,465		)
Impairment charges	—			4,790			2,769			—			—
Proportionate share of adjustments for noncontrolling interests	(2,729		)	(2,782		)	(2,696		)	(2,692		)	(2,562		)
Proportionate share of adjustments to equity in net income of partially owned entities	902			1,252			877			866			833
Total adjustments	49,334			61,108			52,407			41,538			56,442
FFO (as defined by NAREIT) Attributable to W. P. Carey – Owned Real Estate ^(a)	108,650			106,408			106,556			98,030			99,982
Adjustments:
Above- and below-market rent intangible lease amortization, net ^(b)	12,303			11,802			17,922			12,459			12,323
Other amortization and non-cash items ^(c)	(7,176		)	4,826			2,260			6,808			7,038
Merger and other expenses ^(d)	2,692			(37		)	(533		)	65			1,000
Straight-line and other rent adjustments	(2,637		)	(2,296		)	(2,002		)	(3,212		)	(2,965		)
Stock-based compensation	1,990			4,306			2,227			1,880			899
Amortization of deferred financing costs	1,905			(194		)	2,043			2,184			2,542
Tax (benefit) expense – deferred	(1,767		)	(9,518		)	(15,047		)	(2,694		)	33
Realized losses (gains) on foreign currency	633			(1,558		)	(477		)	(454		)	(382		)
Loss (gain) on extinguishment of debt	—			1,609			(81		)	1,566			(2,443		)
Proportionate share of adjustments to equity in net income of partially owned entities	99			(71		)	41			(79		)	(92		)
Proportionate share of adjustments for noncontrolling interests	(230		)	(343		)	(1,573		)	(216		)	(513		)
Total adjustments	7,812			8,526			4,780			18,307			17,440
AFFO Attributable to W. P. Carey – Owned Real Estate^(a)	$	116,462		$	114,934		$	111,336		$	116,337		$	117,422

Summary
FFO (as defined by NAREIT) attributable to W. P. Carey – Owned Real Estate ^(a)	$	108,650		$	106,408		$	106,556		$	98,030		$	99,982
FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share – Owned Real Estate ^(a)	$	1.01		$	0.98		$	0.99		$	0.91		$	0.93
AFFO attributable to W. P. Carey – Owned Real Estate ^(a)	$	116,462		$	114,934		$	111,336		$	116,337		$	117,422
AFFO attributable to W. P. Carey per diluted share – Owned Real Estate ^(a)	$	1.08		$	1.06		$	1.03		$	1.07		$	1.09
Diluted weighted-average shares outstanding	108,234,934			108,211,936			108,208,918			108,143,694			107,783,204

________


(a)	FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.


(b)	Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to the accelerated amortization of an above-market rent intangible in connection with a lease restructuring.


(c)	Primarily represents unrealized gains and losses from foreign exchange movements and derivatives.


(d)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.



		Investing for the long run^TM \| 10

W. P. Carey Inc.

Financial Results – Second Quarter 2018



FFO and AFFO, Investment Management – Last Five Quarters

In thousands, except share and per share amounts.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income from Investment Management attributable to W. P. Carey	$	16,365		$	19,974		$	21,060		$	23,786		$	20,778
FFO (as defined by NAREIT) Attributable to W. P. Carey – Investment Management ^(a)	16,365			19,974			21,060			23,786			20,778
Adjustments:
Tax expense (benefit) – deferred	4,795			(2,637		)	4,550			1,460			(1,415		)
Stock-based compensation	1,708			3,913			2,041			2,755			2,205
Other amortization and non-cash items ^(b)	(261		)	320			(62		)	(600		)	(345		)
Realized (gains) losses on foreign currency	(6		)	43			5			5			4
Restructuring and other compensation ^(c)	—			—			289			1,356			7,718
Proportionate share of adjustments to equity in net income of partially owned entities	3,536			1,823			2,843			3,143			2,070
Total adjustments	9,772			3,462			9,666			8,119			10,237
AFFO Attributable to W. P. Carey – Investment Management^(a)	$	26,137		$	23,436		$	30,726		$	31,905		$	31,015

Summary
FFO (as defined by NAREIT) attributable to W. P. Carey – Investment Management ^(a)	$	16,365		$	19,974		$	21,060		$	23,786		$	20,778
FFO (as defined by NAREIT) attributable to W. P. Carey per diluted share – Investment Management ^(a)	$	0.15		$	0.18		$	0.19		$	0.22		$	0.19
AFFO attributable to W. P. Carey – Investment Management^(a)	$	26,137		$	23,436		$	30,726		$	31,905		$	31,015
AFFO attributable to W. P. Carey per diluted share – Investment Management ^(a)	$	0.24		$	0.22		$	0.28		$	0.30		$	0.29
Diluted weighted-average shares outstanding	108,234,934			108,211,936			108,208,918			108,143,694			107,783,204

________


(a)	FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures.


(b)	Primarily represents unrealized gains and losses from foreign exchange movements.


(c)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our previously announced exit from non-traded retail fundraising activities.



		Investing for the long run^TM \| 11

W. P. Carey Inc.

Financial Results – Second Quarter 2018



Elements of Pro Rata Statement of Income and AFFO Adjustments

In thousands. For the three months ended June 30, 2018.

We believe that the table below is useful for investors to help them better understand our business by illustrating the impact of each of our AFFO adjustments on our GAAP statement of income line items. This presentation is not an alternative to the GAAP statement of income, nor is AFFO an alternative to net income as determined by GAAP.



	Equity Investments ^(a)			Noncontrolling Interests ^(b)			AFFO Adjustments
Revenues
Owned Real Estate:
Lease revenues	$	4,869		$	(6,165	)	$	9,111		^(c)
Reimbursable tenant costs	24			(166		)	(156		)
Operating property revenues:
Hotel revenues	—			—			—
Lease termination income and other	—			(1		)	(14		)

Investment Management:
Asset management revenue	—			—			—
Reimbursable costs from affiliates	—			—			—
Structuring revenue	—			—			—

Operating Expenses
Depreciation and amortization	347			(2,737		)	(60,670		)	^(d)
General and administrative	—			(4		)	—
Reimbursable tenant and affiliate costs	24			(166		)	(156		)
Property expenses, excluding reimbursable tenant costs:
Hotel expenses	—			—			—
Non-reimbursable property expenses	168			(167		)	(298		)	^(e)
Stock-based compensation expense	—			—			(3,698		)	^(e)
Merger and other expenses	—			—			(2,692		)	^(f)
Subadvisor fees ^(g)	—			—			—

Other Income and Expenses
Interest expense	(604		)	(237		)	1,926			^(h)
Equity in earnings of equity method investments in the Managed Programs and real estate:
Income related to our general partnership interests in the Managed REITs	—			—			—
Joint ventures	(3,755		)	(1		)	555			⁽ⁱ⁾
Income related to our ownership in the Managed Programs	—			—			3,540			^(j)
Other gains and (losses)	(1		)	(190		)	(6,756		)	^(k)

Provision for income taxes	6			(57		)	3,110			^(l)
Gain on sale of real estate, net of tax	—			—			(11,912		)
Net income attributable to noncontrolling interests	—			3,743			—

________


(a)	Represents the break-out by line item of amounts recorded in Equity in earnings of equity method investments in the Managed Programs and real estate.


(b)	Represents the break-out by line item of amounts recorded in Net income attributable to noncontrolling interests.


(c)	Represents the reversal of amortization of above- or below-market lease intangibles of $12.0 million and the elimination of non-cash amounts related to straight-line rent and other of $2.9 million.


(d)	Adjustment is a non-cash adjustment excluding corporate depreciation and amortization.


(e)	Adjustment to exclude a non-cash item.


(f)	Adjustment primarily to exclude costs incurred in connection with the Proposed Merger.


(g)	The subadvisors for CWI 1, CWI 2 and CPA:18 – Global earn a percentage of gross fees recorded, which we account for as an expense and are recorded as Subadvisor fees in our consolidated statements of income. The amounts paid to the subadvisors are the differences between gross and net fees.


(h)	Represents the elimination of non-cash components of interest expense, such as deferred financing costs, debt premiums and discounts.


(i)	Adjustments to include our pro rata share of AFFO adjustments from equity investments.



		Investing for the long run^TM \| 12

W. P. Carey Inc.

Financial Results – Second Quarter 2018


(j)	Represents Adjusted MFFO from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs. Adjusted MFFO is defined as MFFO adjusted for deferred taxes and excluding the adjustment for realized gains and losses on hedges.


(k)	Represents eliminations of gains (losses) related to the extinguishment of debt, foreign currency, unrealized gains (losses) on derivatives and other items.


(l)	Primarily represents the elimination of deferred taxes.



		Investing for the long run^TM \| 13

W. P. Carey Inc.

Financial Results – Second Quarter 2018



Capital Expenditures

In thousands. For the three months ended June 30, 2018.



Tenant Improvements and Leasing Costs
Tenant improvements	$	275
Leasing costs	1,136
Tenant Improvements and Leasing Costs	1,411

Maintenance Capital Expenditures
Operating property	1,891
Net-lease properties	25
Maintenance Capital Expenditures	1,916

Total: Tenant Improvements and Leasing Costs, and Maintenance Capital Expenditures	$	3,327



		Investing for the long run^TM \| 14

W. P. Carey Inc.

Balance Sheets and Capitalization

Second Quarter 2018



		Investing for the long run^TM \| 15

W. P. Carey Inc.

Balance Sheets and Capitalization – Second Quarter 2018



Consolidated Balance Sheets

In thousands, except share and per share amounts.



	Jun. 30, 2018			Dec. 31, 2017
Assets
Investments in real estate:
Land, buildings and improvements ^(a)	$	5,651,906		$	5,457,265
Net investments in direct financing leases	705,588			721,607
In-place lease and other intangible assets	1,228,241			1,213,976
Above-market rent intangible assets	631,977			640,480
Investments in real estate	8,217,712			8,033,328
Accumulated depreciation and amortization ^(b)	(1,445,397		)	(1,329,613		)
Net investments in real estate	6,772,315			6,703,715
Equity investments in the Managed Programs and real estate ^(c)	363,622			341,457
Cash and cash equivalents	122,430			162,312
Due from affiliates	78,100			105,308
Other assets, net	288,173			274,650
Goodwill	642,060			643,960
Total assets	$	8,266,700		$	8,231,402

Liabilities and Equity
Debt:
Senior unsecured notes, net	$	3,018,475		$	2,474,661
Unsecured revolving credit facility	396,917			216,775
Unsecured term loans, net	—			388,354
Non-recourse mortgages, net	985,666			1,185,477
Debt, net	4,401,058			4,265,267
Accounts payable, accrued expenses and other liabilities	245,288			263,053
Below-market rent and other intangible liabilities, net	107,542			113,957
Deferred income taxes	88,871			67,009
Distributions payable	110,972			109,766
Total liabilities	4,953,731			4,819,052
Redeemable noncontrolling interest	965			965

Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued	—			—
Common stock, $0.001 par value, 450,000,000 shares authorized; 107,200,687 and 106,922,616 shares, respectively, issued and outstanding	107			107
Additional paid-in capital	4,443,374			4,433,573
Distributions in excess of accumulated earnings	(1,132,182		)	(1,052,064		)
Deferred compensation obligation	36,007			46,656
Accumulated other comprehensive loss	(247,402		)	(236,011		)
Total stockholders' equity	3,099,904			3,192,261
Noncontrolling interests	212,100			219,124
Total equity	3,312,004			3,411,385
Total liabilities and equity	$	8,266,700		$	8,231,402

________


(a)	Includes $42.3 million and $83.0 million of amounts attributable to operating properties as of June 30, 2018 and December 31, 2017, respectively. We sold one hotel operating property in April 2018.


(b)	Includes $679.0 million and $630.0 million of accumulated depreciation on buildings and improvements as of June 30, 2018 and December 31, 2017, respectively, and $766.4 million and $699.7 million of accumulated amortization on lease intangibles as of June 30, 2018 and December 31, 2017, respectively.


(c)	Our equity investments in the Managed Programs totaled $225.3 million and $201.4 million as of June 30, 2018 and December 31, 2017, respectively. Our equity investments in real estate joint ventures totaled $138.3 million and $140.0 million as of June 30, 2018 and December 31, 2017, respectively.



		Investing for the long run^TM \| 16

W. P. Carey Inc.

Balance Sheets and Capitalization – Second Quarter 2018



Capitalization

In thousands, except share and per share amounts. As of June 30, 2018.



Description	Shares	Share Price		Market Value
Equity
Common equity	107,200,687	$	66.35	$	7,112,766
Preferred equity				—
Total Equity Market Capitalization				7,112,766

				Outstanding Balance ^(a)
Pro Rata Debt
Non-recourse mortgages				1,007,066
Unsecured revolving credit facility (due February 22, 2021)				396,917
Senior unsecured notes:
Due January 20, 2023				582,900
Due April 1, 2024				500,000
Due July 19, 2024				582,900
Due February 1, 2025				450,000
Due October 1, 2026				350,000
Due April 15, 2027				582,900
Total Pro Rata Debt				4,452,683

Total Capitalization				$	11,565,449

________


(a)	Excludes unamortized deferred financing costs totaling $18.6 million and unamortized discount, net totaling $15.0 million as of June 30, 2018.



		Investing for the long run^TM \| 17

W. P. Carey Inc.

Balance Sheets and Capitalization – Second Quarter 2018



Debt Overview

Dollars in thousands. Pro rata. As of June 30, 2018.



	USD-Denominated				EUR-Denominated				GBP-Denominated				Total
													Outstanding Balance
	Out-standing Balance (in USD)		Weigh-ted -Avg. Interest Rate		Out-standing Balance (in USD)		Weigh-ted -Avg. Interest Rate		Out-standing Balance (in USD)		Weigh-ted Avg. Interest Rate		Amount ^{(a) (b)} (in USD)		% of Total		Weigh-ted -Avg. Interest Rate		Weigh-ted -Avg. Maturity (Years)
Non-Recourse Debt
Fixed	$	726,568	5.7	%	$	109,842	4.3	%	$	10,333	5.6	%	$	846,743	19.0	%	5.5	%	4.2
Variable:
Swapped	95,519		4.9	%	1,976		8.5	%	—		—	%	97,495		2.2	%	5.0	%	2.6
Floating	44,892		3.8	%	—		—	%	—		—	%	44,892		1.0	%	3.8	%	1.7
Capped	—		—	%	17,936		3.3	%	—		—	%	17,936		0.4	%	3.3	%	3.1
Total Pro Rata Non-Recourse Debt	866,979		5.5	%	129,754		4.2	%	10,333		5.6	%	1,007,066		22.6	%	5.3	%	3.9

Recourse Debt
Fixed – Senior unsecured notes:
Due January 20, 2023	—		—	%	582,900		2.0	%	—		—	%	582,900		13.1	%	2.0	%	4.6
Due April 1, 2024	500,000		4.6	%	—		—	%	—		—	%	500,000		11.2	%	4.6	%	5.8
Due July 19, 2024	—		—	%	582,900		2.3	%	—		—	%	582,900		13.1	%	2.3	%	6.1
Due February 1, 2025	450,000		4.0	%	—		—	%	—		—	%	450,000		10.1	%	4.0	%	6.6
Due October 1, 2026	350,000		4.3	%	—		—	%	—		—	%	350,000		7.9	%	4.3	%	8.3
Due April 15, 2027	—		—	%	582,900		2.1	%	—		—	%	582,900		13.1	%	2.1	%	8.8
Total Senior Unsecured Notes	1,300,000		4.3	%	1,748,700		2.1	%	—		—	%	3,048,700		68.5	%	3.1	%	6.6
Variable:
Unsecured revolving credit facility (due February 22, 2021) ^(c)	195,000		3.1	%	201,917		1.0	%	—		—	%	396,917		8.9	%	2.0	%	2.7
Total Recourse Debt	1,495,000		4.1	%	1,950,617		2.0	%	—		—	%	3,445,617		77.4	%	2.9	%	6.1

Total Pro Rata Debt Outstanding	$	2,361,979	4.6	%	$	2,080,371	2.1	%	$	10,333	5.6	%	$	4,452,683	100.0	%	3.5	%	5.6

________


(a)	Debt data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata.


(b)	Excludes unamortized deferred financing costs totaling $18.6 million and unamortized discount, net totaling $15.0 million as of June 30, 2018.

(c)

Depending on the currency, we incurred interest at either London Interbank Offered Rate (LIBOR) or Euro Interbank Offered Rate (EURIBOR) plus 1.00% on our Unsecured revolving credit facility. EURIBOR has a floor of 0.00% under the terms of our credit agreement. Availability under our Unsecured revolving credit facility was $1.1 billion as of June 30, 2018. The aggregate principal amount (of revolving and term loans) available under our credit agreement may be increased up to an amount not to exceed the U.S. dollar equivalent of $2.35 billion.



		Investing for the long run^TM \| 18

W. P. Carey Inc.

Balance Sheets and Capitalization – Second Quarter 2018



Debt Maturity

Dollars in thousands. Pro rata. As of June 30, 2018.



	Real Estate			Debt
	Number of Properties ^(a)			Weighted- Average Interest Rate				Total Outstanding Balance ^{(b) (c)}		% of Total Outstanding Balance
Year of Maturity	Number of Properties ^(a)	ABR ^(a)		Weighted- Average Interest Rate		Balloon		Total Outstanding Balance ^{(b) (c)}		% of Total Outstanding Balance
Non-Recourse Debt
Remaining 2018	4	$	5,925	6.8	%	$	31,696	$	31,907	0.7	%
2019	10	16,165		6.1	%	46,662		50,549		1.1	%
2020	22	47,576		4.9	%	221,445		244,562		5.5	%
2021	14	25,686		5.5	%	107,094		121,625		2.7	%
2022	30	43,225		5.1	%	202,234		234,554		5.3	%
2023	25	36,776		5.1	%	91,087		131,532		3.0	%
2024	22	20,785		5.9	%	3,444		53,029		1.2	%
2025	13	14,915		4.8	%	52,825		86,695		1.9	%
2026	7	10,154		6.6	%	18,992		42,264		1.0	%
2027	1	2,423		5.8	%	—		10,349		0.2	%
Total Pro Rata Non-Recourse Debt	148	$	223,630	5.3	%	$	775,479	1,007,066		22.6	%

Recourse Debt
Fixed – Senior unsecured notes:
Due January 20, 2023				2.0	%			582,900
Due April 1, 2024				4.6	%			500,000
Due July 19, 2024				2.3	%			582,900
Due February 1, 2025				4.0	%			450,000
Due October 1, 2026				4.3	%			350,000
Due April 15, 2027				2.1	%			582,900
Total Senior Unsecured Notes				3.1	%			3,048,700		68.5	%
Variable:
Unsecured revolving credit facility (due February 22, 2021) ^(d)				2.0	%			396,917		8.9	%
Total Recourse Debt				2.9	%			3,445,617		77.4	%

Total Pro Rata Debt Outstanding				3.5	%			$	4,452,683	100.0	%

________


(a)	Represents the number of properties and ABR associated with the debt that is maturing in each respective year.


(b)	Debt maturity data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata. Total outstanding balance includes balloon payments and scheduled amortization for our non-recourse debt.


(c)	Excludes unamortized deferred financing costs totaling $18.6 million and unamortized discount, net totaling $15.0 million as of June 30, 2018.

(d)

Depending on the currency, we incurred interest at either LIBOR or EURIBOR plus 1.00% on our Unsecured revolving credit facility. EURIBOR has a floor of 0.00% under the terms of our credit agreement. Availability under our Unsecured revolving credit facility was $1.1 billion as of June 30, 2018. The aggregate principal amount (of revolving and term loans) available under our credit agreement may be increased up to an amount not to exceed the U.S. dollar equivalent of $2.35 billion.



		Investing for the long run^TM \| 19

W. P. Carey Inc.

Balance Sheets and Capitalization – Second Quarter 2018



Senior Unsecured Notes

As of June 30, 2018.

Ratings



	Issuer / Corporate		Senior Unsecured Notes
Ratings Agency	Rating	Outlook	Rating	Outlook
Moody's	Baa2	Stable	Baa2	Stable
Standard & Poor's	BBB	Stable	BBB	Stable

Senior Unsecured Note Covenants

The following is a summary of the key financial covenants for the Senior Unsecured Notes, along with our estimated calculations of our compliance with those covenants at the end of the period presented. These ratios are not measures of our liquidity or performance and serve only to demonstrate our ability to incur additional debt, as permitted by the covenants for the Senior Unsecured Notes.



Covenant	Metric	Required	As of Jun. 30, 2018
Limitation on the incurrence of debt	"Total Debt" / "Total Assets"	≤ 60%	44.9%
Limitation on the incurrence of secured debt	"Secured Debt" / "Total Assets"	≤ 40%	10.0%
Limitation on the incurrence of debt based on consolidated EBITDA to annual debt service charge	"Consolidated EBITDA" / "Annual Debt Service Charge"	≥ 1.5x	4.8x
Maintenance of unencumbered asset value	"Unencumbered Assets" / "Total Unsecured Debt"	≥ 150%	192.0%



		Investing for the long run^TM \| 20

W. P. Carey Inc.

Owned Real Estate

Second Quarter 2018



		Investing for the long run^TM \| 21

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Investment Activity – Capital Investment Projects ^(a)

Dollars in thousands. Pro rata.



		Primary Transaction Type	Property Type	Expected Completion Date	Estimated Change in Square Footage	Lease Term (Years)	Funded During Three Months Ended Jun. 30, 2018		Total Funded Through Jun. 30, 2018		Maximum Commitment
Tenant	Location	Primary Transaction Type	Property Type	Expected Completion Date	Estimated Change in Square Footage	Lease Term (Years)	Funded During Three Months Ended Jun. 30, 2018		Total Funded Through Jun. 30, 2018		Remaining		Total
Nord Anglia Education, Inc. ^(b)	Coconut Creek, FL	Build-to-Suit	Education Facility	Q3 2018	130,000	25	$	5,499	$	18,624	$	5,590	$	24,810
Ontex BVBA^(c)	Radomsko, Poland	Build-to-Suit	Industrial	Q3 2018	280,897	15	5,703		8,500		7,240		15,740
Nord Anglia Education, Inc. ^(b)	Windermere, FL	Build-to-Suit	Education Facility	Q3 2018	38,000	25	3,371		10,669		4,481		15,442
Hellweg Die Profi-Baumärkte GmbH & Co. KG ^{(c) (d)}	Germany	Renovation	Retail	Q3 2018	N/A	19	1,932		2,901		5,462		8,363
Hellweg Die Profi-Baumärkte GmbH & Co. KG ^(c)	Germany	Renovation	Retail	Q3 2018	N/A	19	—		366		5,346		5,712
Auria Solutions Ltd.	Holmesville, OH	Expansion	Industrial	Q1 2019	32,000	17	—		—		3,140		3,140
Astellas US Holding, Inc.	Westborough, MA	Redevelopment	Laboratory	Q3 2019	10,063	18	—		—		51,677		51,677
Nippon Express Co., Ltd. ^(c)	Rotterdam, the Netherlands	Expansion	Industrial	Q3 2019	353,239	10	75		75		19,924		19,999
Total					844,199		$	16,580	$	41,135	$	102,860	$	144,883

________


(a)	This schedule includes future estimates for which we can give no assurance as to timing or amounts. Completed capital investment projects are included in the Investment Activity – Acquisitions and Completed Capital Investment Projects section. Funding amounts exclude capitalized construction interest.


(b)	Interest earned on the funding for these properties is excluded from the remaining commitments.


(c)	Commitment amounts are based on the exchange rate of the euro at period end.

(d)

This project relates to a jointly owned investment that we consolidate, and in which our affiliate, CPA:17 – Global, has a 36.52% equity interest. Funding and commitment amounts are presented on a pro rata basis. On a consolidated basis, (i) the total amount funded during the three months ended June 30, 2018 was $3.0 million, (ii) the total amount funded through June 30, 2018 was $4.6 million, (iii) the remaining commitment was $8.6 million and (vi) the total maximum commitment was $13.2 million.



		Investing for the long run^TM \| 22

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Investment Activity – Acquisitions and Completed Capital Investment Projects

Dollars in thousands. Pro rata. For the six months ended June 30, 2018.

Gross Investment Amount

Closing Date / Asset Completion Date

Property

Type(s)

Gross Square Footage

Tenant / Lease Guarantor

Property Location(s)

Acquisitions

1Q18

LKQ Corporation

Sellersburg, IN

6,108

Feb-18

Warehouse

75,375

Undisclosed (3 properties) ^(a)

Appleton, Madison and Waukesha, WI

79,109

Mar-18

Retail, Warehouse

771,354

1Q18 Total

85,217

846,729

2Q18

Forterra, Inc. ^(b)

Bessemer, AL

85,527

Jun-18

Industrial

1,020,422

Danske Fragtmænd A/S (15 properties) ^(c)

Various, Denmark

186,589

Jun-18

Warehouse, Office

1,986,823

2Q18 Total

272,116

3,007,245

Year-to-Date Total

357,333

3,853,974

Completed Capital Investment Projects

1Q18

Nord Anglia Education, Inc. ^(d)

Houston, TX

20,977

Jan-18

Education Facility

98,678

1Q18 Total

20,977

98,678

2Q18

Schlage Lock Company LLC ^(c)

Zawiercie, Poland

11,386

Apr-18

Industrial

155,108

Auria Solutions Ltd.

Albemarle and Old Fort, NC

2,180

Apr-18

Industrial

N/A

Griffith Foods Group Inc. ^(e)

Chicago, IL

3,511

Jun-18

Industrial

N/A

2Q18 Total

17,077

155,108

Year-to-Date Total

38,054

253,786

Year-to-Date Total Acquisitions and Completed Capital Investment Projects

395,387

4,107,760

________


(a)	Tenant undisclosed under terms of the lease agreement.


(b)	Property was acquired in exchange for 23 properties, which were transferred back to the same tenant in a nonmonetary swap transaction. Amount is based on the fair value of the property acquired.


(c)	Amount reflects the applicable exchange rate on the date of the transaction.


(d)	Rent related to this project commenced on March 1, 2018.


(e)	Rent related to this project commenced on July 1, 2018.



		Investing for the long run^TM \| 23

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Investment Activity – Dispositions

Dollars in thousands. Pro rata. For the six months ended June 30, 2018.

Tenant / Lease Guarantor

Property Location(s)

Gross Sale Price

Closing Date

Property

Type(s)

Gross Square Footage

1Q18

Carl Leipold GmbH ^(a)

Bunde, Germany

1,217

Mar-18

Industrial, Office

36,797

Compass Group USA, Inc. ^(b)

Lafayette, LA

1,650

Mar-18

Office

33,818

Multiple tenants

Nashville, TN

12,600

Mar-18

Office

64,693

IAC Soft Trim Properties, LLC

Springfield, TN

4,250

Mar-18

Industrial

144,072

Mantsinen Group Ltd. Oy ^(a)

Ylämylly, Finland

15,769

Mar-18

Industrial

172,083

1Q18 Total

35,486

451,463

2Q18

DoubleTree

Memphis, TN

38,950

Apr-18

Hotel

42,500

Vacant

Orlando, FL

3,800

May-18

Warehouse

58,827

Forterra, Inc. (23 properties)^{(a) (c)}

Various, United States (20 properties) and Canada (3 properties)

85,527

Jun-18

Industrial

1,853,830

2Q18 Total

128,277

1,955,157

Year-to-Date Total Dispositions

163,763

2,406,620

________


(a)	Amount reflects the applicable exchange rate on the date of the transaction.


(b)	This multi-tenant property had approximately 25,000 vacant square feet as of the date of disposition.


(c)	Properties were disposed of in exchange for one property acquired from the same tenant valued at this amount in a nonmonetary swap transaction.



		Investing for the long run^TM \| 24

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Joint Ventures

Dollars in thousands. As of June 30, 2018.



Joint Venture or JV (Principal Tenant)	JV Partnership		Consolidated				Pro Rata ^(a)
Joint Venture or JV (Principal Tenant)	Partner	WPC %	Debt Outstanding ^(b)		ABR		Debt Outstanding ^(c)		ABR
Unconsolidated Joint Ventures (Equity Method Investments) ^(d)
Wanbishi Archives Co. Ltd. ^(e)	CPA:17 – Global	3.00%	$	—	$	2,756	$	—	$	83
Jumbo Logistiek Vastgoed B.V. ^(e)	CPA:17 – Global	15.00%	73,559		14,521		11,034		2,178
ALSO Actebis GmbH ^(e)	CPA:17 – Global	30.00%	—		3,877		—		1,163
Wagon Automotive GmbH ^(e)	CPA:17 – Global	33.33%	—		3,372		—		1,124
Frontier Spinning Mills, Inc.	CPA:17 – Global	40.00%	—		5,342		—		2,137
The New York Times Company	CPA:17 – Global	45.00%	99,759		27,656		44,891		12,445
Total Unconsolidated Joint Ventures			173,318		57,524		55,925		19,130

Consolidated Joint Ventures
Berry Global Inc. ^(f)	CPA:17 – Global	50.00%	22,841		7,587		11,421		3,793
Tesco Global Aruhazak Zrt. ^(e)	CPA:17 – Global	51.00%	35,169		6,738		17,936		3,436
Dick’s Sporting Goods, Inc. ^(f)	CPA:17 – Global	55.10%	18,675		3,581		10,290		1,973
Hellweg Die Profi-Baumärkte GmbH & Co. KG ^{(e) (f)}	CPA:17 – Global	63.48%	—		33,102		—		21,013
Eroski Sociedad Cooperativa ^(e)	CPA:17 – Global	70.00%	—		2,440		—		1,708
U-Haul Moving Partners, Inc. and Mercury Partners, LP	CPA:17 – Global	88.46%	—		36,008		—		31,853
McCoy-Rockford, Inc.	Third party	90.00%	3,349		857		3,013		771
Total Consolidated Joint Ventures			80,034		90,313		42,660		64,547
Total Unconsolidated and Consolidated Joint Ventures			$	253,352	$	147,837	$	98,585	$	83,677

________


(a)	See the Terms and Definitions section in the Appendix for a description of pro rata.


(b)	Excludes unamortized deferred financing costs totaling $0.6 million and unamortized premium, net totaling $0.3 million as of June 30, 2018.


(c)	Excludes unamortized deferred financing costs totaling $0.2 million and unamortized premium, net totaling $0.1 million as of June 30, 2018.


(d)	Excludes a preferred equity position in a jointly owned investment, Beach House JV, LLC, which did not have debt outstanding or ABR as of June 30, 2018.


(e)	Amounts are based on the applicable exchange rate at the end of the period.


(f)	Excludes certain properties leased to the tenants that we consolidate and in which we have a 100% ownership interest.



		Investing for the long run^TM \| 25

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Top Ten Tenants

Dollars in thousands. Pro rata. As of June 30, 2018.



Tenant / Lease Guarantor	Property Type	Tenant Industry	Location	Number of Properties	ABR		ABR %		Weighted-Average Lease Term (Years)
Hellweg Die Profi-Baumärkte GmbH & Co. KG ^(a)	Retail	Retail Stores	Germany	53	$	35,640	5.1	%	18.7
U-Haul Moving Partners Inc. and Mercury Partners, LP	Self Storage	Cargo Transportation, Consumer Services	United States	78	31,853		4.6	%	5.8
State of Andalucia ^(a)	Office	Sovereign and Public Finance	Spain	70	28,802		4.2	%	16.5
Pendragon PLC ^(a)	Retail	Retail Stores, Consumer Services	United Kingdom	70	21,673		3.1	%	11.8
Marriott Corporation	Hotel	Hotel, Gaming and Leisure	United States	18	20,065		2.9	%	5.4
Forterra, Inc. ^{(a) (b)}	Industrial	Construction and Building	United States and Canada	27	18,016		2.6	%	25.0
OBI Group ^(a)	Office, Retail	Retail Stores	Poland	18	16,289		2.3	%	5.9
True Value Company	Warehouse	Retail Stores	United States	7	15,993		2.3	%	4.5
Nord Anglia Education, Inc.	Education Facility	Consumer Services	United States	3	15,521		2.2	%	23.5
UTI Holdings, Inc.	Education Facility	Consumer Services	United States	5	14,484		2.1	%	3.7
Total^(c)				349	$	218,336	31.4	%	12.5

________


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


(b)	Of the 27 properties leased to Forterra, Inc., 25 are located in the United States and two are located in Canada.


(c)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 26

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Diversification by Property Type

In thousands, except percentages. Pro rata. As of June 30, 2018.



	Total Net-Lease Portfolio							Unencumbered Net-Lease Portfolio ^(a)
Property Type	ABR		ABR %		Square Footage ^(b)	Sq. ft. %		ABR		ABR %		Square Footage ^(b)	Sq. ft. %
U.S.
Industrial	$	139,562	20.1	%	27,209	31.4	%	$	81,040	17.2	%	16,651	27.4	%
Office	103,885		15.0	%	6,321	7.3	%	43,803		9.3	%	3,061	5.0	%
Retail	30,365		4.4	%	2,337	2.7	%	21,279		4.5	%	1,674	2.8	%
Warehouse	79,117		11.4	%	15,490	17.9	%	42,268		9.0	%	8,409	13.8	%
Self Storage (net lease)	31,853		4.6	%	3,535	4.1	%	31,853		6.8	%	3,535	5.8	%
Other^(c)	70,854		10.2	%	4,443	5.1	%	33,715		7.2	%	1,970	3.2	%
U.S. Total	455,636		65.7	%	59,335	68.5	%	253,958		54.0	%	35,300	58.0	%

International
Industrial	58,948		8.5	%	10,027	11.6	%	58,797		12.5	%	10,016	16.5	%
Office	64,379		9.3	%	4,744	5.5	%	51,105		10.9	%	4,168	6.8	%
Retail ^(d)	82,609		11.9	%	7,569	8.7	%	82,610		17.6	%	7,569	12.4	%
Warehouse	31,910		4.6	%	4,968	5.7	%	23,382		5.0	%	3,817	6.3	%
Self Storage (net lease)	—		—	%	—	—	%	—		—	%	—	—	%
Other	—		—	%	—	—	%	—		—	%	—	—	%
International Total	237,846		34.3	%	27,308	31.5	%	215,894		46.0	%	25,570	42.0	%

Total
Industrial	198,510		28.6	%	37,236	43.0	%	139,837		29.7	%	26,667	43.9	%
Office	168,264		24.3	%	11,065	12.8	%	94,908		20.2	%	7,229	11.8	%
Retail ^(d)	112,974		16.3	%	9,906	11.4	%	103,889		22.1	%	9,243	15.2	%
Warehouse	111,027		16.0	%	20,458	23.6	%	65,650		14.0	%	12,226	20.1	%
Self Storage (net lease)	31,853		4.6	%	3,535	4.1	%	31,853		6.8	%	3,535	5.8	%
Other^(c)	70,854		10.2	%	4,443	5.1	%	33,715		7.2	%	1,970	3.2	%
Total ^(e)	$	693,482	100.0	%	86,643	100.0	%	$	469,852	100.0	%	60,870	100.0	%

________


(a)	Represents properties unencumbered by non-recourse mortgage debt.


(b)	Includes square footage for vacant properties.


(c)	Includes ABR from tenants with the following property types: education facility, hotel, theater, fitness facility and net-lease student housing.


(d)	Includes automotive dealerships.


(e)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 27

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Diversification by Tenant Industry

In thousands, except percentages. Pro rata. As of June 30, 2018.



	Total Net-Lease Portfolio							Unencumbered Net-Lease Portfolio ^(a)
Industry Type	ABR		ABR %		Square Footage	Sq. ft. %		ABR		ABR %		Square Footage	Sq. ft. %
Retail Stores ^(b)	$	124,396	17.9	%	15,687	18.1	%	$	95,273	20.3	%	10,354	17.0	%
Consumer Services	73,537		10.6	%	5,703	6.6	%	56,630		12.0	%	4,443	7.3	%
Automotive	55,515		8.0	%	8,900	10.3	%	48,844		10.4	%	7,766	12.8	%
Sovereign and Public Finance	41,949		6.0	%	3,364	3.9	%	32,394		6.9	%	3,000	4.9	%
Cargo Transportation	41,307		6.0	%	5,847	6.7	%	34,850		7.4	%	5,410	8.9	%
Construction and Building	38,380		5.5	%	7,464	8.6	%	26,670		5.7	%	5,492	9.0	%
Hotel, Gaming and Leisure	35,368		5.1	%	2,254	2.6	%	15,215		3.2	%	1,040	1.7	%
Beverage, Food and Tobacco	30,713		4.4	%	6,876	7.9	%	30,713		6.5	%	6,876	11.3	%
Healthcare and Pharmaceuticals	28,249		4.1	%	2,048	2.4	%	14,333		3.0	%	1,119	1.8	%
High Tech Industries	28,197		4.1	%	2,479	2.8	%	18,632		4.0	%	1,533	2.5	%
Containers, Packaging and Glass	27,680		4.0	%	5,325	6.1	%	7,874		1.7	%	1,556	2.6	%
Media: Advertising, Printing and Publishing	23,121		3.3	%	1,588	1.8	%	4,689		1.0	%	655	1.1	%
Capital Equipment	21,115		3.0	%	3,522	4.1	%	16,302		3.5	%	2,457	4.0	%
Business Services	14,187		2.0	%	1,723	2.0	%	10,194		2.2	%	1,473	2.4	%
Durable Consumer Goods	11,606		1.7	%	2,485	2.9	%	3,464		0.7	%	1,139	1.9	%
Grocery	11,505		1.7	%	1,228	1.4	%	5,064		1.1	%	388	0.6	%
Aerospace and Defense	10,769		1.6	%	1,115	1.3	%	6,588		1.4	%	788	1.3	%
Wholesale	9,798		1.4	%	1,625	1.9	%	3,885		0.8	%	706	1.2	%
Banking	9,726		1.4	%	702	0.8	%	1,736		0.4	%	106	0.2	%
Chemicals, Plastics and Rubber	9,485		1.4	%	1,108	1.3	%	3,237		0.7	%	437	0.7	%
Metals and Mining	9,023		1.3	%	1,341	1.5	%	3,396		0.7	%	772	1.3	%
Oil and Gas	8,189		1.2	%	333	0.4	%	8,189		1.7	%	333	0.5	%
Non-Durable Consumer Goods	8,156		1.2	%	1,883	2.2	%	5,919		1.3	%	1,355	2.2	%
Telecommunications	7,155		1.0	%	418	0.5	%	3,215		0.7	%	166	0.3	%
Other ^(c)	14,356		2.1	%	1,625	1.9	%	12,546		2.7	%	1,506	2.5	%
Total ^(d)	$	693,482	100.0	%	86,643	100.0	%	$	469,852	100.0	%	60,870	100.0	%

________


(a)	Represents properties unencumbered by non-recourse mortgage debt.


(b)	Includes automotive dealerships.


(c)	Includes ABR from tenants in the following industries: insurance, electricity, media: broadcasting and subscription, forest products and paper and environmental industries. Also includes square footage for vacant properties.


(d)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 28

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Diversification by Geography

In thousands, except percentages. Pro rata. As of June 30, 2018.



	Total Net-Lease Portfolio							Unencumbered Net-Lease Portfolio ^(a)
Region	ABR		ABR %		Square Footage ^(b)	Sq. ft. %		ABR		ABR %		Square Footage ^(b)	Sq. ft. %
U.S.
South
Texas	$	57,378	8.3	%	7,702	8.9	%	$	33,391	7.1	%	4,925	8.1	%
Florida	29,943		4.3	%	2,598	3.0	%	26,798		5.7	%	2,342	3.8	%
Georgia	21,388		3.1	%	3,210	3.7	%	16,173		3.4	%	2,343	3.9	%
Tennessee	13,198		1.9	%	1,985	2.3	%	4,600		1.0	%	993	1.6	%
Alabama	10,042		1.5	%	1,920	2.2	%	10,042		2.1	%	1,920	3.2	%
Other ^(c)	5,843		0.8	%	1,096	1.3	%	5,180		1.1	%	937	1.5	%
Total South	137,792		19.9	%	18,511	21.4	%	96,184		20.4	%	13,460	22.1	%

East
North Carolina	19,043		2.8	%	4,517	5.2	%	12,093		2.6	%	3,238	5.3	%
New Jersey	19,004		2.7	%	1,097	1.3	%	8,529		1.8	%	601	1.0	%
New York	18,524		2.7	%	1,178	1.4	%	758		0.2	%	66	0.1	%
Pennsylvania	18,080		2.6	%	2,525	2.9	%	9,411		2.0	%	1,583	2.6	%
Massachusetts	15,551		2.2	%	1,390	1.6	%	11,309		2.4	%	1,163	1.9	%
Virginia	7,655		1.1	%	1,025	1.2	%	6,900		1.5	%	531	0.9	%
Connecticut	6,969		1.0	%	1,135	1.3	%	1,999		0.4	%	251	0.4	%
Other ^(c)	18,183		2.6	%	3,782	4.4	%	7,941		1.7	%	2,093	3.5	%
Total East	123,009		17.7	%	16,649	19.3	%	58,940		12.6	%	9,526	15.7	%

West
California	41,686		6.0	%	3,187	3.7	%	14,867		3.2	%	1,451	2.4	%
Arizona	27,045		3.9	%	3,049	3.5	%	8,577		1.8	%	685	1.1	%
Colorado	9,983		1.5	%	864	1.0	%	6,306		1.3	%	509	0.8	%
Other ^(c)	27,034		3.9	%	3,225	3.7	%	17,250		3.7	%	1,943	3.2	%
Total West	105,748		15.3	%	10,325	11.9	%	47,000		10.0	%	4,588	7.5	%

Midwest
Illinois	21,123		3.0	%	3,111	3.6	%	8,928		1.9	%	1,637	2.7	%
Michigan	12,263		1.8	%	1,456	1.7	%	12,263		2.6	%	1,456	2.4	%
Indiana	9,708		1.4	%	1,493	1.7	%	3,526		0.8	%	508	0.8	%
Wisconsin	9,036		1.3	%	1,585	1.8	%	7,679		1.6	%	1,414	2.3	%
Minnesota	8,909		1.3	%	904	1.0	%	7,190		1.5	%	644	1.1	%
Ohio	8,285		1.2	%	1,776	2	%	4,231		0.9	%	913	1.5	%
Other ^(c)	19,763		2.8	%	3,525	4.1	%	8,017		1.7	%	1,154	1.9	%
Total Midwest	89,087		12.8	%	13,850	15.9	%	51,834		11.0	%	7,726	12.7	%
U.S. Total	455,636		65.7	%	59,335	68.5	%	253,958		54.0	%	35,300	58.0	%

International
Germany	57,697		8.3	%	5,930	6.8	%	53,980		11.5	%	5,718	9.4	%
United Kingdom	33,547		4.8	%	2,324	2.7	%	31,526		6.7	%	2,111	3.5	%
Spain	30,510		4.4	%	2,927	3.4	%	30,510		6.5	%	2,927	4.8	%
Poland	19,057		2.8	%	2,344	2.7	%	19,057		4.0	%	2,344	3.8	%
The Netherlands	15,340		2.2	%	2,233	2.6	%	12,118		2.6	%	1,792	2.9	%
France	14,508		2.1	%	1,266	1.4	%	6,517		1.4	%	1,025	1.7	%
Denmark	12,335		1.8	%	1,987	2.3	%	12,335		2.6	%	1,987	3.3	%
Australia	12,081		1.7	%	3,272	3.8	%	12,081		2.6	%	3,272	5.4	%
Finland	11,658		1.7	%	949	1.1	%	11,658		2.5	%	949	1.5	%
Canada	11,072		1.6	%	1,817	2.1	%	11,072		2.4	%	1,817	3.0	%
Other^(d)	20,041		2.9	%	2,259	2.6	%	15,040		3.2	%	1,628	2.7	%
International Total	237,846		34.3	%	27,308	31.5	%	215,894		46.0	%	25,570	42.0	%
Total^(e)	$	693,482	100.0	%	86,643	100.0	%	$	469,852	100.0	%	60,870	100.0	%

________



		Investing for the long run^TM \| 29

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018


(a)	Represents properties unencumbered by non-recourse mortgage debt.


(b)	Includes square footage for vacant properties.

(c)

Other properties within South include assets in Louisiana, Arkansas, Mississippi and Oklahoma. Other properties within East include assets in Kentucky, South Carolina, Maryland, New Hampshire and West Virginia. Other properties within West include assets in Utah, Washington, Nevada, Oregon, New Mexico, Wyoming, Alaska and Montana. Other properties within Midwest include assets in Missouri, Kansas, Nebraska, Iowa, South Dakota and North Dakota.


(d)	Includes assets in Norway, Hungary, Austria, Mexico, Sweden, Belgium and Japan.


(e)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 30

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Contractual Rent Increases

In thousands, except percentages. Pro rata. As of June 30, 2018.



	Total Net-Lease Portfolio							Unencumbered Net-Lease Portfolio ^(a)
Rent Adjustment Measure	ABR		ABR %		Square Footage	Sq. ft. %		ABR		ABR %		Square Footage	Sq. ft. %
(Uncapped) CPI	$	287,831	41.5	%	33,502	38.7	%	$	210,656	44.8	%	23,399	38.4	%
Fixed	189,737		27.4	%	26,289	30.3	%	120,698		25.7	%	17,873	29.4	%
CPI-based	182,643		26.3	%	24,129	27.8	%	125,627		26.7	%	18,267	30.0	%
Other ^(b)	26,655		3.8	%	1,838	2.1	%	10,555		2.3	%	801	1.3	%
None	6,616		1.0	%	579	0.7	%	2,316		0.5	%	224	0.4	%
Vacant	—		—	%	306	0.4	%	—		—	%	306	0.5	%
Total ^(c)	$	693,482	100.0	%	86,643	100.0	%	$	469,852	100.0	%	60,870	100.0	%

________


(a)	Represents properties unencumbered by non-recourse mortgage debt.


(b)	Represents leases attributable to percentage rent.


(c)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 31

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Same Store Analysis

Dollars in thousands. Pro rata.

Same store portfolio includes leases that were continuously in place during the period from June 30, 2017 to June 30, 2018. Excludes leases for properties that were acquired, sold or vacated, or were subject to lease renewals, extensions or modifications at any time that affected ABR during that period. For purposes of comparability, ABR is presented on a constant currency basis using exchange rates as of June 30, 2018.



	ABR
Property Type	As of Jun. 30, 2018		As of Jun. 30, 2017		Increase		% Increase
Industrial	$	165,009	$	160,424	$	4,585	2.9	%
Office	155,937		154,775		1,162		0.8	%
Retail ^(a)	94,972		93,660		1,312		1.4	%
Warehouse	94,106		92,508		1,598		1.7	%
Self Storage (net lease)	31,853		31,853		—		—	%
Other ^(b)	62,383		61,729		654		1.1	%
Total	$	604,260	$	594,949	$	9,311	1.6	%

Rent Adjustment Measure
(Uncapped) CPI	$	260,048	$	256,833	$	3,215	1.3	%
Fixed	148,764		146,058		2,706		1.9	%
CPI-based	162,176		158,786		3,390		2.1	%
Other ^(c)	26,656		26,656		—		—	%
None	6,616		6,616		—		—	%
Total	$	604,260	$	594,949	$	9,311	1.6	%

Geography
U.S.	$	396,582	$	390,501	$	6,081	1.6	%
Europe	182,063		179,431		2,632		1.5	%
Other International ^(d)	25,615		25,017		598		2.4	%
Total	$	604,260	$	594,949	$	9,311	1.6	%

Same Store Portfolio Summary
Number of properties	785
Square footage (in thousands)	73,333

________


(a)	Includes automotive dealerships.


(b)	Includes ABR from tenants with the following property types: education facility, hotel, theater, fitness facility and net-lease student housing.


(c)	Represents leases attributable to percentage rent.


(d)	Includes assets in Canada, Australia, Mexico and Japan.



		Investing for the long run^TM \| 32

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Leasing Activity

For the three months ended June 30, 2018, except ABR. Pro rata.



Lease Renewals and Extensions										Expected Tenant Improvements ($’000s)		Leasing Commissions ($’000s)
			ABR
Property Type	Square Feet	Number of Leases	Prior Lease ($’000s)			New Lease ($'000s) ^(a)		Releasing Spread						Incremental Lease Term
Industrial	3,023,414	3	$	19,321		$	16,283	(15.7	)%	$	—	$	1,000	10.7 years
Office	94,649	1	1,207			1,347		11.7	%	—		—		2 years
Retail	66,060	2	549			549		—	%	—		—		5 years
Warehouse	369,537	1	1,396			1,293		(7.3	)%	475		136		5 years
Self Storage (net lease)	—	—	—			—		—	%	—		—		N/A
Other	46,658	1	892			892		—	%	—		—		5 years
Total / Weighted Average ^(b)	3,600,318	8	$	23,365		$	20,364	(12.8	)%	$	475	$	1,136	9.2 years

Q2 Summary
Prior Lease ABR (% of Total Portfolio)			3.4		%

_______


(a)	New Lease amounts are based on in-place rents at time of lease commencement and exclude any free rent periods.


(b)	Weighted average refers to the incremental lease term.



		Investing for the long run^TM \| 33

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Lease Expirations – Total Net-Lease Portfolio

In thousands, except percentages and number of leases. Pro rata. As of June 30, 2018.



Year of Lease Expiration^(a)	Number of Leases Expiring	ABR		ABR %		Square Footage	Sq. ft. %
Remaining 2018	3	$	7,319	1.1	%	603	0.7	%
2019	17	25,362		3.7	%	1,996	2.3	%
2020	22	26,762		3.9	%	2,639	3.0	%
2021	76	37,962		5.5	%	5,086	5.9	%
2022	40	69,582		10.0	%	9,442	10.9	%
2023	21	41,773		6.0	%	5,860	6.7	%
2024 ^(b)	45	98,032		14.1	%	12,008	13.8	%
2025	41	30,993		4.5	%	3,439	4.0	%
2026	19	19,072		2.7	%	3,159	3.6	%
2027	25	41,713		6.0	%	5,957	6.9	%
2028	11	21,079		3.0	%	2,514	2.9	%
2029	11	20,127		2.9	%	2,656	3.1	%
2030	9	15,811		2.3	%	1,481	1.7	%
2031	54	33,580		4.8	%	2,832	3.3	%
Thereafter (>2031)	64	204,315		29.5	%	26,665	30.8	%
Vacant	—	—		—	%	306	0.4	%
Total^(c)	458	$	693,482	100.0	%	86,643	100.0	%

________


(a)	Assumes tenants do not exercise any renewal options.


(b)	Includes ABR of $12.3 million from a tenant (The New York Times Company) that exercised its option in January 2018 to repurchase the property it is leasing from a jointly owned investment with our affiliate, CPA:17 – Global, in which we have a 45% equity interest and which is consolidated by CPA:17 – Global. There can be no assurance that such repurchase will be completed.


(c)	See the Terms and Definitions section in the Appendix for a description of pro rata.



		Investing for the long run^TM \| 34

W. P. Carey Inc.

Owned Real Estate – Second Quarter 2018



Lease Expirations – Unencumbered Net-Lease Portfolio

In thousands, except percentages and number of leases. Pro rata. As of June 30, 2018.



Year of Lease Expiration^(a)	Number of Leases Expiring	ABR		ABR %		Square Footage	Sq. ft. %
Remaining 2018	3	$	7,319	1.6	%	603	1.0	%
2019	10	5,569		1.2	%	644	1.1	%
2020	14	11,707		2.5	%	1,450	2.4	%
2021	66	19,796		4.2	%	2,965	4.9	%
2022	27	25,615		5.4	%	4,043	6.6	%
2023	15	13,489		2.9	%	2,529	4.2	%
2024	34	64,737		13.8	%	8,300	13.6	%
2025	34	19,659		4.2	%	1,739	2.9	%
2026	8	11,887		2.5	%	1,995	3.3	%
2027	19	28,045		6.0	%	3,699	6.1	%
2028	9	16,056		3.4	%	2,275	3.7	%
2029	11	20,127		4.3	%	2,656	4.4	%
2030	7	9,518		2.0	%	884	1.4	%
2031	54	33,580		7.1	%	2,832	4.6	%
Thereafter (>2031)	55	182,748		38.9	%	23,950	39.3	%
Vacant	—	—		—	%	306	0.5	%
Total^{(b) (c)}	366	$	469,852	100.0	%	60,870	100.0	%

________


(a)	Assumes tenants do not exercise any renewal options.


(b)	See the Terms and Definitions section in the Appendix for a description of pro rata.


(c)	Represents properties unencumbered by non-recourse mortgage debt.



		Investing for the long run^TM \| 35

W. P. Carey Inc.

Investment Management

Second Quarter 2018



		Investing for the long run^TM \| 36

W. P. Carey Inc.

Investment Management – Second Quarter 2018



Selected Information – Managed Programs

Dollars and square footage in thousands, except per share amounts. As of or for the three months ended June 30, 2018.



	Managed Programs
	CPA:17 – Global			CPA:18 – Global			CWI 1			CWI 2			CESH I
General
Year established	2007			2013			2010			2015			2016
AUM ^(a)	$	5,808,434		$	2,549,589		$	2,893,645		$	1,959,683		$	213,993
Net-lease AUM	5,107,168			1,557,317			N/A			N/A			N/A
NAV ^(b)	10.04			8.57			10.41			11.11			1,000.00
Fundraising status	Closed			Closed			Closed			Closed			Closed

Portfolio
Investment type	Net lease / Diversified REIT			Net lease / Diversified REIT			Lodging REIT			Lodging REIT			Student Housing
Number of net-leased properties	411			59			N/A			N/A			N/A
Number of operating properties	38			83			28			12			9
Number of tenants – net-leased properties ^(c)	114			100			N/A			N/A			N/A
Square footage ^(c)	47,136			16,866			6,314			3,468			117
Occupancy ^(d)	99.7		%	98.3		%	80.5		%	82.4		%	30.3		%
Acquisitions – second quarter	$	—		$	94,745		$	—		$	—		$	—
Dispositions – second quarter	—			—			—			—			—

Balance Sheet (Book Value)
Total assets	$	4,470,224		$	2,398,943		$	2,348,888		$	1,630,589		$	222,603
Total debt	1,897,796			1,370,526			1,389,179			831,805			49,233
Total debt / total assets	42.5		%	57.1		%	59.1		%	51.0		%	22.1		%

________


(a)	Represents estimated value of real estate assets plus cash and cash equivalents, less distributions payable for the Managed REITs and fair value of investments plus cash for CESH I.


(b)	The estimated NAVs for CPA:17 – Global, CWI 1 and CWI 2 were determined as of December 31, 2017. The estimated NAV for CPA:18 – Global was determined as of March 31, 2018. We own limited partnership units of CESH I at its private placement price of $1,000 per share; a NAV for CESH I has not yet been calculated.


(c)	For CPA:17 – Global and CPA:18 – Global, excludes operating properties. For CESH I, one property has been placed into service as of June 30, 2018. The remaining investments are build-to-suit projects and gross square footage cannot be determined at this time.

(d)

Represents occupancy for net-leased properties for CPA:17 – Global and single-tenant net-leased properties for CPA:18 – Global. Represents occupancy for hotels owned by CWI 1 and CWI 2 for the three months ended June 30, 2018. Occupancy for CPA:17 – Global's 37 self-storage properties was 93.1% as of June 30, 2018. Occupancy for CPA:18 – Global's 69 self-storage properties and 14 multi-family properties was 92.1% and 92.3%, respectively, as of June 30, 2018. CPA:18 – Global’s multi-tenant net-leased properties had an occupancy rate of 96.1% and square footage of 0.6 million as of June 30, 2018.



		Investing for the long run^TM \| 37

W. P. Carey Inc.

Investment Management – Second Quarter 2018



Managed Programs Fee Summary

Dollars in thousands. For the three months ended June 30, 2018, unless otherwise noted.



	Managed Programs
	CPA:17 – Global		CPA:18 – Global		CWI 1		CWI 2		CESH I ^(a)		Total
Year established	2007		2013		2010		2015		2016
Fundraising status	Closed		Closed		Closed		Closed		Closed

1. Structuring Fees
Structuring fee, gross (% of total aggregate cost)	4.50% ^(b)		4.50% ^(b)		2.50%		2.50%		2.00%
Net of subadvisor fees ^(c)	4.50%		4.50%		2.00%		1.875%		2.00%
Gross acquisition volume – second quarter	$	—	$	94,745	$	—	$	—	$	—	$	94,745
Structuring revenue – second quarter ^(d)	$	—	$	4,163	$	263	$	—	$	—	$	4,426

2. Asset Management Fees
Asset management fee, gross (% of average AUM, per annum)	0.50% ^(e)		0.50% ^(e)		0.50% ^(e)		0.55% ^(e)		1.00% ^(f)
Net of subadvisor fees ^(c)	0.50%		0.50%		0.40%		0.41%		1.00%
AUM – current quarter	$	5,808,434	$	2,549,589	$	2,893,645	$	1,959,683	$	213,993	$	13,425,344
AUM – prior quarter	$	5,806,328	$	2,475,417	$	2,896,851	$	1,957,502	$	201,943	$	13,338,041
Average AUM	$	5,807,381	$	2,512,503	$	2,895,248	$	1,958,593	$	207,968	$	13,381,693
Asset management revenue – second quarter ^(g)	$	7,493	$	3,151	$	3,534	$	2,607	$	483	$	17,268

3. Operating Partnership Interests ^(h)
Operating partnership interests, gross (% of Available Cash)	10.00%		10.00%		10.00%		10.00%		N/A
Net of subadvisor fees ^(c)	10.00%		10.00%		8.00%		7.50%		N/A
Equity in earnings of equity method investments in the Managed Programs and real estate (profits interest) – second quarter⁽ⁱ⁾	$	5,185	$	2,830	$	—	$	571	N/A		$	8,586

________


(a)	In addition to the fees shown, we may also receive distributions from CESH I upon liquidation of the fund in an amount potentially equal to 20% of available cash after the limited partners have received certain cumulative distributions.

(b)

Comprised of an initial acquisition fee (generally 2.50% of the total aggregate cost of net-leased properties) paid when the transaction is completed and a subordinated acquisition fee (generally 2.00% of the total aggregate cost of net-leased properties) paid in annual installments over three years, provided certain performance criterion are met. The acquisition fee for other properties is generally 1.75% of the total aggregate cost.

(c)

We earn investment management revenue from CWI 1 and CWI 2 in our role as their advisor. Pursuant to the terms of their subadvisory agreements, however, 20% of the fees we receive from CWI 1 and 25% of the fees we receive from CWI 2 are paid to their respective subadvisors. In connection with the acquisitions of multi-family properties on behalf of CPA:18 – Global, we entered into agreements with third-party advisors for the day-to-day management of the properties for which we pay 100% of asset management fees paid to us by CPA:18 – Global.


(d)	Amounts for CWI 1 and CWI 2 are gross of fees paid to their respective subadvisors. Amount for CWI 1 is related to a mortgage loan refinancing.

(e)

Based on average market value of assets. Under the terms of the respective advisory agreements of the Managed REITs, we may elect to receive cash or shares of CWI 1 and CWI 2’s stock for asset management fees due, while the CPA REITs have an option to pay asset management fees in cash or shares upon our recommendation. Asset management fees are recorded in Asset management revenue in our consolidated financial statements.


(f)	Based on gross assets at fair value.


(g)	Amounts for CWI 1 and CWI 2 are gross of fees paid to their respective subadvisors.


(h)	Available Cash means cash generated by operating partnership operations and investments, excluding cash from sales and refinancings, after the payment of debt service and other operating expenses, but before distributions to partners. Amounts are recorded in Equity in earnings of equity method investments in the Managed Programs and real estate in our consolidated financial statements.


(i)	Amounts for CWI 1 and CWI 2 are net of fees paid to their respective subadvisors.



		Investing for the long run^TM \| 38

W. P. Carey Inc.

Investment Management – Second Quarter 2018



Investment Activity – Managed Programs

Dollars in thousands. Pro rata. For the six months ended June 30, 2018.



Acquisitions			Gross Investment Amount				Gross Square Footage
Fund	Tenant / Operator	Property Location(s)	Gross Investment Amount		Closing Date	Property Type(s)	Gross Square Footage	Ownership
1Q18
CPA:18 – Global ^{(a) (b)}	Collegiate AC	Barcelona, Spain	$	28,473	Mar-18	Student Housing	112,980	98.7	%
1Q18 Total			28,473				112,980

2Q18
CPA:18 – Global ^{(a) (b)}	Temprano Capital Partners	Coimbra, Portugal	26,326		Jun-18	Student Housing	135,076	98.5	%
CPA:18 – Global ^{(a) (b)}	Collegiate AC	San Sebastian, Spain	36,733		Jun-18	Student Housing	126,075	100.0	%
CPA:18 – Global ^{(a) (b)}	Pallars	Barcelona, Spain	31,686		Jun-18	Student Housing	77,504	100.0	%
2Q18 Total			94,745				338,655

Year-to-Date Total Acquisitions			$	123,218			451,635

Dispositions

Gross Square Footage

Portfolio(s)

Tenant / Operator

Property Location(s)

Gross Sale Price

Closing Date

Property
Type(s)

Ownership

1Q18

CWI 1

Marriott

Boca Raton, FL

76,000

Jan-18

Hotel

167,056

100.0

CWI 1 (2 properties)

Hilton

Atlanta, GA and Memphis, TN

63,000

Feb-18

Hotel

164,050

100.0

1Q18 Total

139,000

331,106

2Q18 (N/A)

Year-to-Date Total Dispositions

139,000

331,106

________


(a)	Amount reflects the applicable exchange rate on the date of the transaction.


(b)	Acquisition includes a build-to-suit transaction. Gross investment amount represents total commitment for build-to-suit funding.



		Investing for the long run^TM \| 39

W. P. Carey Inc.

Investment Management – Second Quarter 2018



Summary of Future Liquidity Strategies for Managed Programs

As of June 30, 2018.

Liquidity events for the Managed REITs must be approved by each Managed REIT’s board of the directors. A liquidity transaction could include sales of assets, either on a portfolio basis or individually; a listing of each Managed REIT’s shares on a national securities exchange; or a merger or other transaction(s) approved by the respective board of directors. Market conditions and other factors could cause the delay of a liquidity transaction or the commencement of liquidation. Even if a Managed REIT’s board of directors decides to liquidate, the Managed REIT is under no obligation to conclude a liquidation within a set timeframe because the precise timing of any transaction(s) will depend on the then-prevailing real estate and financial markets, the economic conditions of the areas in which properties are located and the federal income tax consequences to the Managed REIT’s stockholders.



General Liquidation Guideline ^(a)
CPA:17 – Global ^(b)	CPA:18 – Global	CWI 1	CWI 2	CESH I
8 to 12 years following investment of substantially all proceeds from the initial public offering in 2011	Beginning after the seventh anniversary of the closing of the initial public offering in 2015	Beginning six years following the termination of the initial public offering in 2013	Beginning six years following the termination of the initial public offering in 2017	Beginning five years after raising the minimum offering amount in 2016

________


(a)	Based on general liquidation guidelines set forth in the respective prospectuses; ultimately, liquidation is approved by the independent directors of each program (except for CESH I, which is determined by its General Partner).

(b)

On June 17, 2018, we announced that our board of directors had unanimously approved a definitive merger agreement pursuant to which CPA:17 – Global will merge with and into a subsidiary of ours in a stock for-stock transaction valued at approximately $6 billion. The transaction has also been approved by CPA:17 – Global’s board of directors upon the unanimous recommendation and approval of a Special Committee consisting of CPA:17 – Global’s independent directors. The Proposed Merger and related transactions are subject to the satisfaction of a number of closing conditions, including approvals by our stockholders and the stockholders of CPA:17 – Global. If these approvals are obtained and the other closing conditions are met, we currently expect the transaction to close at or around December 31, 2018, although there can be no assurance that the transaction will occur at such time or at all.



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W. P. Carey Inc.

Investment Management – Second Quarter 2018



Summary of Back-End Fees for / Interests in the Managed Programs

The overview below is intended to provide a summary of current disclosures regarding various back-end fees and interests that we may be entitled to upon each Managed Program’s liquidity event. Such liquidity events are at the discretion of each Managed REIT’s board of directors and there is no assurance that any of the fees or interests described below will be realized. Please refer to each Managed REIT’s filings with the Securities and Exchange Commission for complete descriptions of each Managed REIT’s liquidity strategy.



	Back-End Fees and Interests
	CPA:17 – Global ^(a)	CPA:18 – Global	CWI 1	CWI 2	CESH I
Disposition Fees	Net leased properties — equal to the lesser of (i) 50% of the brokerage commission paid or (ii) 3% of the contract sales price of a property. Investments in B Notes, C Notes, mortgage-backed securities and real estate-related loans — 1% of the average equity value.	Investments other than those described below — equal to the lesser of (i) 50% of the brokerage commission paid or (ii) 3% of the contract sales price of a property. Readily marketable real estate securities — none.	Equal to the lesser of: (i) 50% of the competitive real estate commission and (ii) 1.5% of the contract sales price of a property.	Equal to the lesser of: (i) 50% of the competitive real estate commission and (ii) 1.5% of the contract sales price of a property.	N/A
Interest in Disposition Proceeds	Special general partner interest entitled to receive distributions of up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership, through certain liquidity events or distributions, plus the 6% preferred return rate.	Special general partner interest entitled to receive distributions of up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership, through certain liquidity events or distributions, plus the 6% preferred return rate.	Special general partner interest receives up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership (through certain liquidity transactions or distributions) plus the six percent preferred return rate. A listing will not trigger the payment of this distribution.	Special general partner interest receives up to 15% of the net proceeds from the sale, exchange or other disposition of operating partnership assets remaining after the corporation has received a return of 100% of its initial investment in the operating partnership (through certain liquidity transactions or distributions) plus the six percent preferred return rate. A listing will not trigger the payment of this distribution.	Available Cash (as defined in In “Principal Terms”), subject to any other limitations provided for herein, will be initially apportioned among the Limited Partners in proportion to their respective capital contributions and the General Partner as provided in connection with its Carried Interest and distributed. ^(b)
Purchase of Special GP Interest	Lesser of (i) 5.0x the distributions of the last completed fiscal year and (ii) the discounted value of expected future distributions from point of valuation to April 2021, using a discount rate used by the independent third-party valuation firm to determine the most recent appraisal.	Lesser of (i) 5.0x the distributions of the last completed fiscal year and (ii) the discounted value of expected future distributions from point of valuation to March 2025 using a discount rate used by the independent third-party valuation firm to determine the most recent appraisal.	Fair market value as determined by Appraisal.	Fair market value as determined by Appraisal.	N/A
Distribution Related to Ownership of Shares	4.6% ownership as of 6/30/2018	3.0% ownership as of 6/30/2018	2.6% ownership as of 6/30/2018	2.3% ownership as of 6/30/2018	2.4% ownership as of 6/30/2018

________

(a)

(b)

Order of distributions are as follows: (1) First, to a Limited Partner until it has received an amount equal to its total capital contributions or deemed capital contribution with respect to the Advisor Units in the case of the Advisor (or a wholly owned subsidiary of the Advisor); (2) Second, to a Limited Partner until such Limited Partner has received a cumulative, non-compounding, annual 10% return on its unreturned capital contributions (the “Preferred Return”); (3) Third, to the General Partner until the General Partner has received 20% of the aggregate amounts distributed pursuant to clause (2) and this clause (3); (4) Thereafter, 80% to such Limited Partner and 20% to the General Partner (together with the amounts received under clause (3), the General Partner’s “Carried Interest”). The Advisor’s capital contribution for purposes of the Partnership Agreement will be deemed to be the value of the Advisor Units upon their issuance.



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W. P. Carey Inc.

Appendix

Second Quarter 2018



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W. P. Carey Inc.

Appendix – Second Quarter 2018



Normalized Pro Rata Cash NOI

In thousands. From real estate.



	Three Months Ended Jun. 30, 2018
Consolidated Lease Revenues
Total lease revenues – as reported	$	162,634
Less: Consolidated Non-Reimbursable Property Expenses
Non-reimbursable property expenses – as reported	5,327
	157,307

Plus: NOI from Operating Properties
Hotel revenues	4,865
Hotel expenses	(3,581		)
	1,284

	158,591

Adjustments for Pro Rata Ownership of Real Estate Joint Ventures:
Add: Pro rata share of NOI from equity investments	4,702
Less: Pro rata share of NOI attributable to noncontrolling interests	(5,997		)
	(1,295		)

	157,296

Adjustments for Pro Rata Non-Cash Items:
Add: Above- and below-market rent intangible lease amortization	11,746
Less: Straight-line rent amortization	(2,635		)
Add: Other non-cash items	303
	9,414

Pro Rata Cash NOI ^(a)	166,710

Adjustment to normalize for intra-period acquisitions, completed capital investment projects and dispositions ^(b)	3,021

Normalized Pro Rata Cash NOI ^(a)	$	169,731



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W. P. Carey Inc.

Appendix – Second Quarter 2018

The following table presents a reconciliation from Net income from Owned Real Estate attributable to W. P. Carey to Normalized pro rata cash NOI:



	Three Months Ended Jun. 30, 2018
Net Income from Owned Real Estate Attributable to W. P. Carey
Net income from Owned Real Estate attributable to W. P. Carey – as reported	$	59,316
Adjustments for Consolidated Operating Expenses
Add: Operating expenses – as reported	93,296
Less: Property expenses, excluding reimbursable tenant costs – as reported	(8,908		)
	84,388

Adjustments for Other Consolidated Revenues and Expenses:
Less: Lease termination income and other	(680		)
Less: Reimbursable property expenses – as reported	(5,733		)
Add: Other income and (expenses)	28,152
Add: Provision for income taxes	1,317
Less: Gain on sale of real estate	(11,912		)
	11,144

Other Adjustments:
Add: Above- and below-market rent intangible lease amortization	12,303
Adjustment to normalize for intra-period acquisitions, completed capital investment projects and dispositions ^(b)	3,021
Less: Straight-line rent amortization	(2,650		)
Add: Adjustments for pro rata ownership	2,081
Add: Property expenses, excluding reimbursable tenant costs, non-cash	128
	14,883

Normalized Pro Rata Cash NOI ^(a)	$	169,731

________


(a)	Pro rata cash NOI and normalized pro rata cash NOI are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures and for details on how pro rata cash NOI and normalized pro rata cash NOI are calculated.

(b)

For properties acquired and capital investment projects completed during the three months ended June 30, 2018, the adjustment modifies our pro rata share of cash NOI for the partial period with an amount estimated to be equivalent to the additional pro rata share of cash NOI necessary to reflect ownership for the full quarter. For properties disposed of during the three months ended June 30, 2018, the adjustment eliminates our pro rata share of cash NOI for the period.



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W. P. Carey Inc.

Appendix – Second Quarter 2018



Adjusted EBITDA, Consolidated – Last Five Quarters

In thousands.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income	$	79,424		$	68,066		$	74,473		$	83,654		$	67,131

Adjustments to Derive Consolidated EBITDA
Depreciation and amortization	64,337			65,957			64,015			64,040			62,849
Interest expense	41,311			38,074			40,401			41,182			42,235
Provision for (benefit from) income taxes	6,262			(6,002		)	(192		)	1,760			2,448
Consolidated EBITDA ^(a)	191,334			166,095			178,697			190,636			174,663

Adjustments to Derive Adjusted EBITDA
Adjustments for Non-Cash Items:
Above- and below-market rent intangible and straight-line rent adjustments ^{(b) (c)}	9,653			9,507			15,920			9,247			9,186
Unrealized (gains) losses and other ^(d)	(8,741		)	4,557			2,495			7,382			7,226
Stock-based compensation expense	3,698			8,219			4,268			4,635			3,104
Impairment charges	—			4,790			2,769			—			—
	4,610			27,073			25,452			21,264			19,516
Adjustments for Non-Core Items: ^(e)
Gain on sale of real estate, net	(11,912		)	(6,732		)	(11,146		)	(19,257		)	(3,465		)
Merger and other expenses ^(f)	2,692			(37		)	(533		)	65			1,000
Loss (gain) on extinguishment of debt	—			1,609			(81		)	1,566			(2,443		)
Restructuring and other compensation ^(g)	—			—			289			1,356			7,718
Other	1,973			(1,081		)	(595		)	(1,553		)	(536		)
	(7,247		)	(6,241		)	(12,066		)	(17,823		)	2,274
Adjustments for Pro Rata Ownership
Real Estate Joint Ventures:
Add: Pro rata share of adjustments for equity investments	1,436			1,661			1,450			1,307			1,242
Less: Pro rata share of adjustments for amounts attributable to noncontrolling interests	(6,569		)	(6,784		)	(6,801		)	(6,866		)	(6,433		)
	(5,133		)	(5,123		)	(5,351		)	(5,559		)	(5,191		)
Equity Investments in the Managed Programs: ^(h)
Add: Distributions received from equity investments in the Managed Programs	3,837			3,582			3,273			3,417			2,981
Less: Income from equity investments in the Managed Programs	(253		)	(1,464		)	(101		)	(531		)	(1,279		)
	3,584			2,118			3,172			2,886			1,702

Adjusted EBITDA ^(a)	$	187,148		$	183,922		$	189,904		$	191,404		$	192,964

________


(a)	EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.


(b)	Straight-line rent adjustments relate to our net-leased properties subject to operating leases.


(c)	Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to the accelerated amortization of an above-market rent intangible in connection with a lease restructuring.


(d)	Comprised of unrealized gains and losses on derivatives, unrealized gains and losses on foreign currency and straight-line rent adjustments for office rent expenses.

(e)

Comprised of items that we do not consider to be part of our core operating business plan or representative of our overall long-term operating performance, based on a number of factors, including the nature of the item and/or the frequency with which it occurs. We believe that these adjustments provide a more representative view of EBITDA from our core operating business and allow for more meaningful comparisons.


(f)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.


(g)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our exit from non-traded retail fundraising activities, which we announced in June 2017.


(h)	Adjustments to include cash distributions received from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs.



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W. P. Carey Inc.

Appendix – Second Quarter 2018



Adjusted EBITDA, Owned Real Estate – Last Five Quarters

In thousands.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income from Owned Real Estate	$	63,059		$	48,092		$	53,413		$	59,868		$	46,353

Adjustments to Derive Consolidated EBITDA
Depreciation and amortization	63,374			64,920			62,951			62,970			61,989
Interest expense	41,311			38,074			40,401			41,182			42,235
Provision for (benefit from) income taxes	1,317			(3,533		)	(4,953		)	1,511			3,731
Consolidated EBITDA – Owned Real Estate ^(a)	169,061			147,553			151,812			165,531			154,308

Adjustments to Derive Adjusted EBITDA
Adjustments for Non-Cash Items:
Above- and below-market rent intangible and straight-line rent adjustments ^{(b) (c)}	9,653			9,507			15,920			9,247			9,186
Unrealized (gains) losses and other ^(d)	(8,789		)	4,826			2,715			8,014			7,685
Stock-based compensation expense	1,990			4,306			2,227			1,880			899
Impairment charges	—			4,790			2,769			—			—
	2,854			23,429			23,631			19,141			17,770
Adjustments for Non-Core Items: ^(e)
Gain on sale of real estate, net	(11,912		)	(6,732		)	(11,146		)	(19,257		)	(3,465		)
Merger and other expenses ^(f)	2,692			(37		)	(533		)	65			1,000
Loss (gain) on extinguishment of debt	—			1,609			(81		)	1,566			(2,443		)
Other	1,979			(1,545		)	(588		)	(1,535		)	(653		)
	(7,241		)	(6,705		)	(12,348		)	(19,161		)	(5,561		)
Adjustments for Pro Rata Ownership
Real Estate Joint Ventures:
Add: Pro rata share of adjustments for equity investments	1,436			1,661			1,450			1,307			1,242
Less: Pro rata share of adjustments for amounts attributable to noncontrolling interests	(6,569		)	(6,784		)	(6,801		)	(6,866		)	(6,433		)
	(5,133		)	(5,123		)	(5,351		)	(5,559		)	(5,191		)

Adjusted EBITDA – Owned Real Estate ^(a)	$	159,541		$	159,154		$	157,744		$	159,952		$	161,326

________


(a)	EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.


(b)	Straight-line rent adjustments relate to our net-leased properties subject to operating leases.


(c)	Amount for the three months ended December 31, 2017 includes an adjustment of $5.7 million related to the accelerated amortization of an above-market rent intangible in connection with a lease restructuring.


(d)	Comprised of unrealized gains and losses on derivatives and unrealized gains and losses on foreign currency.

(e)


(f)	Amount for the three months ended June 30, 2018 is primarily comprised of costs incurred in connection with the Proposed Merger. Amount for the three months ended June 30, 2017 is comprised of an accrual for estimated one-time legal settlement expenses.



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W. P. Carey Inc.

Appendix – Second Quarter 2018



Adjusted EBITDA, Investment Management – Last Five Quarters

In thousands.



	Three Months Ended
	Jun. 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sep. 30, 2017			Jun. 30, 2017
Net income from Investment Management	$	16,365		$	19,974		$	21,060		$	23,786		$	20,778

Adjustments to Derive Consolidated EBITDA
Provision for (benefit from) income taxes	4,945			(2,469		)	4,761			249			(1,283		)
Depreciation and amortization	963			1,037			1,064			1,070			860
Consolidated EBITDA – Investment Management^(a)	22,273			18,542			26,885			25,105			20,355

Adjustments to Derive Adjusted EBITDA
Adjustments for Non-Cash Items:
Stock-based compensation expense	1,708			3,913			2,041			2,755			2,205
Unrealized losses (gains) and other ^(b)	48			(269		)	(220		)	(632		)	(459		)
	1,756			3,644			1,821			2,123			1,746
Adjustments for Non-Core Items: ^(c)
Restructuring and other compensation ^(d)	—			—			289			1,356			7,718
Other	(6		)	464			(7		)	(18		)	117
	(6		)	464			282			1,338			7,835

Adjustments for Pro Rata Ownership
Equity Investments in the Managed Programs: ^(e)
Add: Distributions received from equity investments in the Managed Programs	3,837			3,582			3,273			3,417			2,981
Less: Income from equity investments in the Managed Programs	(253		)	(1,464		)	(101		)	(531		)	(1,279		)
	3,584			2,118			3,172			2,886			1,702

Adjusted EBITDA – Investment Management^(a)	$	27,607		$	24,768		$	32,160		$	31,452		$	31,638

________


(a)	EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures.


(b)	Comprised of unrealized gains and losses on foreign currency and straight-line rent adjustments for office rent expenses.

(c)


(d)	Amounts for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017 represent restructuring expenses resulting from our previously announced exit from non-traded retail fundraising activities.


(e)	Adjustments to include cash distributions received from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs.



		Investing for the long run^TM \| 47

W. P. Carey Inc.

Appendix – Second Quarter 2018



Terms and Definitions

Non-GAAP Financial Disclosures

AFFO

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 from real estate assets; 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.

We modify the NAREIT computation of FFO to include other adjustments to GAAP net income to adjust for certain non-cash charges such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rents, stock-based compensation, non-cash environmental accretion expense and amortization of deferred financing costs. 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. Additionally, we exclude non-core income and expenses such as certain lease termination income, gains or losses from extinguishment of debt, restructuring and related compensation expenses and merger and acquisition expenses. We also exclude realized and unrealized gains/losses on foreign exchange transactions (other than those realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs which are currently not engaged in acquisitions, mergers and restructuring which are not part of our normal business operations. AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies and determine executive compensation.

We believe that AFFO is a useful supplemental measure for investors to consider as we believe 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. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP or as alternatives to net cash provided by operating activities computed under GAAP or as indicators of our ability to fund our cash needs.

Pro Rata Cash NOI

Cash net operating income, or cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our net leased and operating properties. We define cash NOI as cash rents from our leased and operating properties less non-reimbursable property expenses. Cash NOI excludes amortization of intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We present cash NOI on a pro rata basis, referred to as pro rata cash NOI, to account for our share of income related to unconsolidated joint ventures and noncontrolling interests. We believe that pro rata cash NOI is a helpful measure that both investors and management can use to evaluate the financial performance of our leased and operating properties and it allows for comparison of our operating performance between periods and to other REITs. Pro rata cash NOI should not be considered as an alternative to net income as an indication of our financial performance or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present cash NOI and/or pro rata cash NOI, may not be directly comparable to the way other REITs present cash NOI.

Normalized Pro Rata Cash NOI

Normalized pro rata cash NOI is pro rata cash NOI as defined above adjusted primarily to exclude our pro rata share of cash NOI from properties disposed of during the most recent quarter and to include a full quarter of pro rata cash NOI related to properties acquired or capital investment projects completed during the period, as applicable. We believe this measure provides a helpful representation of our net operating income from our in-place leased and operating properties.



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W. P. Carey Inc.

Appendix – Second Quarter 2018

Adjusted EBITDA

We believe that EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of our business segments because (i) it removes the impact of our capital structure from our operating results and (ii) because it is helpful when comparing our operating performance to that of companies in our industry without regard to such items, which can vary substantially from company to company. Adjusted EBITDA as disclosed represents EBITDA, modified to include other adjustments to GAAP net income for certain non-cash charges, such as impairments, non-cash rent adjustments and unrealized gains and losses from our hedging activity. Additionally, we exclude gains and losses on sale of real estate, which are not considered fundamental attributes of our business plans and do not affect our overall long-term operating performance. We exclude these items from adjusted EBITDA as they are not the primary drivers in our decision-making process. Adjusted EBITDA reflects adjustments for unconsolidated partnerships and jointly owned investments. Our assessment of our operations is focused on long-term sustainability and not on such non-cash and non-core items, which may cause short-term fluctuations in net income but have no impact on cash flows. We believe that adjusted EBITDA is a useful supplemental measure to investors and analysts, although it does not represent net income that is computed in accordance with GAAP. Accordingly, adjusted EBITDA should not be considered as an alternative to net income or as an indicator of our financial performance. EBITDA and adjusted EBITDA as calculated by us may not be comparable to similarly titled measures of other companies.

Other Metrics

Pro Rata Metrics

This supplemental package 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, which we do not control, 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. Multiplying each of our jointly owned investments’ financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investments.

ABR

ABR represents contractual minimum annualized base rent for our net-leased properties, net of receivable reserves as determined by GAAP, and reflects exchange rates as of June 30, 2018. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties and is presented on a pro rata basis.



		Investing for the long run^TM \| 49

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