EX-99.1 2 c04863exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(CPA LOGO)
Corporate Property Associates 15 Incorporated
Supplemental Information
As of June 30, 2010
As used in this supplemental package, the terms “the Company,” “we,” “us” and “our” include Corporate Property Associates 15 Incorporated (“CPA®:15”), its consolidated subsidiaries and predecessors, unless otherwise indicated.
Important Note Regarding Non-GAAP Financial Measures
This supplemental package includes non-GAAP measures, including funds from operations (“FFO”), funds from operations — as adjusted (“AFFO”) and adjusted cash flow from operating activities. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measures are provided in this supplemental package.
Forward-Looking Statements
This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties and other factors that may materially affect our future results, performance, achievements or transactions. Information on factors which could impact actual results and forward-looking statements contained herein is included in our filings with the SEC, including but not limited to our Form 10-K for the year ended December 31, 2009. We do not undertake to revise or update any forward-looking statements.
     
Executive Offices
  Investor Relations
50 Rockefeller Plaza
  Susan C. Hyde
New York, NY 10020
  Managing Director & Director of Investor Relations
Tel: 1-800-WPCAREY or (212) 492-1100
  W. P. Carey & Co. LLC
Fax: (212) 492-8922
  Phone: (212) 492-1151
Web Site Address: www.CPA15.com
   

 

 


 

Corporate Property Associates 15 Incorporated
Reconciliation of Net Income (Loss) Attributable to CPA
®:15 Shareholders to Funds From Operations — as adjusted (AFFO) (Unaudited)
(in thousands, except share and per share amounts)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2010     2009     2010     2009  
Net income (loss) attributable to CPA®:15 shareholders
  $ 12,508     $ 2,172     $ 22,608     $ (8,754 )
Adjustments:
                               
Depreciation and amortization of real property
    14,864       15,191       30,008       30,443  
Loss (gain) on sale of real estate
                162       (851 )
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:
                               
Depreciation and amortization of real property
    469       2,986       2,487       4,893  
Gain on sale of real estate
    (173 )           (173 )      
Proportionate share of adjustments for noncontrolling interests to arrive at FFO
    (3,599 )     (2,509 )     (7,531 )     (6,757 )
 
                       
Total adjustments
    11,561       15,668       24,953       27,728  
 
                       
FFO — as defined by NAREIT
    24,069       17,840       47,561       18,974  
 
                       
Adjustments:
                               
Other depreciation, amortization, and non-cash charges
    1,656       (707 )     2,395       (1,141 )
Straight-line and other rent adjustments
    506       (280 )     535       1,550  
Impairment charges
          9,620             33,450  
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at AFFO:
                               
Other depreciation, amortization, and non-cash charges
    (364 )     (103 )     (285 )     (396 )
Straight-line and other rent adjustments
    188       152       386       304  
Impairment charges
                2,409        
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO
    253       (53 )     697       220  
 
                       
Total adjustments
    2,239       8,629       6,137       33,987  
 
                       
AFFO
  $ 26,308     $ 26,469     $ 53,698     $ 52,961  
 
                       
AFFO per share (a)
  $ 0.23     $ 0.23     $ 0.47     $ 0.47  
 
                       
Weighted average shares outstanding
    126,975,648       125,845,961       126,614,948       126,353,912  
 
                       
 
                               
(a) Numerator for AFFO per share calculation:
                               
AFFO
  $ 26,308     $ 26,469     $ 53,698     $ 52,961  
Add: Issuance of shares to an affiliate in satisfaction of fees due
    2,763       2,901       5,535       5,819  
 
                       
AFFO numerator in determination of AFFO per share
  $ 29,071     $ 29,370     $ 59,233     $ 58,780  
 
                       
Non-GAAP Financial Disclosure
Funds from Operations (“FFO”) is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income or loss (as computed in accordance with GAAP) excluding: depreciation and amortization expense from real estate assets, gains or losses from sales of depreciated real estate assets and extraordinary items, however FFO related to assets held for sale, sold or otherwise transferred and included in the results of discontinued operations are to be included. These adjustments also incorporate the pro rata share of unconsolidated subsidiaries. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers. Although NAREIT has published this definition of FFO, real estate companies often modify this definition as they seek to provide financial measures that meaningfully reflect their distinctive operations.
We modify the NAREIT computation of FFO to include other adjustments to GAAP net income for certain non-cash charges, where applicable, such as gains or losses from extinguishment of debt and deconsolidation of subsidiaries, amortization of intangibles, straight-line rents, impairment charges on real estate and unrealized foreign currency exchange gains and losses. We refer to our modified definition of FFO as “Funds from Operations — as Adjusted,” or AFFO, and we employ it as one measure of our operating performance when we formulate corporate goals and evaluate the effectiveness of our strategies. We exclude these items from GAAP net income, as they are not the primary drivers in our decision-making process. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. As a result, we believe that AFFO and AFFO per share are useful supplemental measures for investors to consider because it will help them to better understand and measure the performance of our business over time without the potentially distorting impact of these short-term fluctuations.

 

2


 

Corporate Property Associates 15 Incorporated
Adjusted Cash Flow from Operating Activities (Unaudited)

(in thousands, except share and per share amounts)
                 
    Six months ended June 30,  
    2010     2009  
Cash flow provided by operating activities — as reported
  $ 78,714     $ 68,963  
Adjustments:
               
Distributions received from equity investments in real estate in excess of equity income, net (a)
    945       3,808  
Distributions paid to noncontrolling interests, net (b)
    (16,230 )     (19,735 )
Changes in working capital (c)
    (2,760 )     (4,275 )
 
           
Adjusted cash flow from operating activities
  $ 60,669     $ 48,761  
 
           
Adjusted cash flow per share
  $ 0.48     $ 0.39  
 
           
 
               
Distributions declared per share
  $ 0.3617     $ 0.3546  
 
           
Payout ratio (distributions per share/adjusted cash flow per share)
    75 %     91 %
 
           
 
               
Weighted average shares outstanding
    126,614,948       126,353,912  
 
           
     
(a)   To the extent we receive distributions in excess of the equity income that we recognize, we include such amounts in our evaluation of cash flow from core operations.
 
(b)   Represents noncontrolling interests’ share of distributions made by ventures that we consolidate in our financial statements.
 
(c)   Timing differences arising from the payment of certain liabilities and the receipt of certain receivables in a period other than that in which the item is recognized in determining net income may distort the actual cash flow that our core operations generate. We adjust our GAAP cash flow provided by operating activities to record such amounts in the period in which the item was actually recognized.
Non-GAAP Financial Disclosure
Adjusted cash flow from operating activities refers to our cash flow from operating activities (as computed in accordance with GAAP) adjusted, where applicable, primarily to: add cash distributions that we receive from our investments in unconsolidated real estate joint ventures in excess of our equity income; subtract cash distributions that we make to our noncontrolling partners in real estate joint ventures that we consolidate; and eliminate changes in working capital. We hold a number of interests in real estate joint ventures, and we believe that adjusting our GAAP cash flow provided by operating activities to reflect these actual cash receipts and cash payments as well as eliminating the effect of timing differences between the payment of certain liabilities and the receipt of certain receivables in a period other than that in which the item is recognized, may give investors additional information about our actual cash flow that is not incorporated in cash flow from operating activities as defined by GAAP.
We believe that adjusted cash flow from operating activities is a useful supplemental measure for assessing the cash flow generated from our core operations as it gives investors important information about our liquidity that is not provided within cash flow from operating activities as defined by GAAP, and we use this measure when evaluating distributions to shareholders.

 

3


 

Corporate Property Associates 15 Incorporated
Portfolio Diversification as of June 30, 2010 (Unaudited)
Top Ten Tenants by Rent (Pro Rata Basis)

(in thousands)
                 
            Percentage of Total  
Tenant/Lease Guarantor   Annualized Rent     Annualized Rent  
Hellweg Die Profi-Baumärkte GmbH & Co KG (a)
  $ 22,850       10 %
U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    18,742       8 %
OBI A.G. (a)
    10,927       5 %
Universal Technical Institute Holdings, Inc.
    9,691       4 %
Life Time Fitness, Inc.
    8,759       4 %
Marriott Corporation
    8,406       3 %
Carrefour France SAS (a)
    8,273       3 %
True Value Company
    6,825       3 %
Foster Wheeler, Inc.
    6,227       3 %
Pohjola Non-Life Insurance Company (a)
    4,763       2 %
 
           
Total
  $ 105,463       45 %
 
           
     
Weighted Average Lease Term for Portfolio: 11.1 years
   
CPA®:15 Historical Occupancy
(LINE GRAPH)
 
     
(a)   Rent amounts are subject to fluctuations in foreign currency exchange rates.
 
(b)   Percentage of the portfolio’s total pro rata square footage that was subject to lease.

 

4


 

Corporate Property Associates 15 Incorporated
Portfolio Diversification as of June 30, 2010 (Unaudited)
by Geography and Property Type (Pro Rata Basis)

(in thousands)
                 
Region   Annualized Rent     Percent  
U.S.
               
West
  $ 45,597       20 %
South
    43,898       19 %
East
    39,153       17 %
Midwest
    36,068       15 %
 
           
U.S. Total
    164,716       71 %
 
           
International
               
Germany
    27,578       12 %
France
    17,806       7 %
Poland
    10,927       4 %
Finland
    9,330       4 %
Belgium
    1,422       1 %
United Kingdom
    1,298       1 %
 
           
International Total
    68,361       29 %
 
           
             
Total
  $ 233,077       100 %
 
           
Portfolio Diversification by Geography
(PIE CHART)
                 
Property Type   Annualized Rent     Percent  
Office
  $ 51,752       22 %
Industrial
    50,241       22 %
Retail
    42,750       18 %
Warehouse/Distribution
    33,125       14 %
Self-Storage
    18,741       8 %
Other Properties (a)
    16,063       7 %
Sports
    11,999       5 %
Hospitality
    8,406       4 %
 
           
Total
  $ 233,077       100 %
 
           
Portfolio Diversification by Property Type
(PIE CHART)
     
(a)   Includes revenue from tenants with the following property types: education (5.0%), nursing home (1.3%) and theater (0.6%).

 

5


 

Corporate Property Associates 15 Incorporated
Portfolio Diversification as of June 30, 2010 (Unaudited)
by Tenant Industry (Pro Rata Basis)

(in thousands)
                 
    Annualized        
Industry Type (a)   Rent     Percent  
Retail Trade
  $ 56,201       24 %
Electronics
    26,643       11 %
Healthcare, Education and Childcare
    20,378       9 %
Business and Commercial Services
    14,011       6 %
Leisure, Amusement, Entertainment
    13,499       6 %
Chemicals, Plastics, Rubber, and Glass
    12,293       5 %
Buildings and Real Estate
    12,182       5 %
Hotels and Gaming
    8,406       4 %
Automobile
    7,851       3 %
Construction and Building
    7,471       3 %
Transportation — Personal
    6,560       3 %
Media: Printing and Publishing
    5,980       3 %
Beverages, Food, and Tobacco
    5,691       3 %
Telecommunications
    5,512       2 %
Federal, State and Local Government
    5,488       2 %
Insurance
    4,763       2 %
Aerospace and Defense
    4,112       2 %
Consumer and Durable Goods
    3,831       2 %
Machinery
    3,414       2 %
Transportation — Cargo
    3,237       1 %
Other (b)
    5,554       2 %
 
           
Total
  $ 233,077       100 %
 
           
     
(a)   Based on the Moody’s Investors Service, Inc. classification system and information provided by the tenant.
 
(b)   Includes revenue from tenants in the following industries: grocery (0.8%), forest products and paper (0.6%), consumer non-durable goods (0.6%), and mining, metals and primary metal industries (0.4%).

 

6