News Column

CORPORATE PROPERTY ASSOCIATES 17 - GLOBAL INC - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.

August 7, 2014

MD&A is intended to provide the reader with information that will assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. MD&A also provides the reader with our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. Our MD&A should be read in conjunction with our 2013 Annual Report.



Business Overview

As described in more detail in Item 1 in our 2013 Annual Report, we are a publicly owned, non-listed REIT that invests primarily in commercial properties leased to companies domestically and internationally. As opportunities arise, we also make other types of commercial real estate related investments. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and foreign currency exchange rates. We were formed in 2007 and are managed by the advisor. We hold substantially all of our assets and conduct substantially all of our business through our Operating Partnership. We are the general partner of, and own 99.99% of the interests in, the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC. Portfolio Overview We intend to continue to acquire a diversified portfolio of income-producing commercial properties and other real estate-related assets as we use the remaining net proceeds from our follow-on offering. We expect to make these investments both domestically and outside of the U.S. Portfolio information is provided on a consolidated basis to facilitate the review of our accompanying consolidated financial statements. In addition, we provide such information on a pro rata basis to better illustrate the economic impact of our various net-leased jointly-owned investments.



Portfolio Summary

June 30, 2014 December 31, 2013 Number of net-leased properties 358 352 Number of operating properties (a) 75 75 Number of tenants (b) 108 99 Total square footage (in thousands) (c) 39,985 39,665 Occupancy (b) 100.0 % 100.0 % Average lease term (in years) (b) 14.4 15.3 Number of countries 10 10 Total assets (in thousands) (d) $ 4,723,586$ 4,713,369 Total real estate assets (in thousands) (d) (e) 3,641,023 3,562,095 Six Months Ended June 30, 2014 2013



Acquisition volume - consolidated (in millions) (d) (f) $ 61.8$ 100.6 Acquisition volume - pro rata (in millions) (c)

156.1



181.8

Financing obtained - consolidated (in millions) (d) (g) 52.6

118.4

Financing obtained - pro rata (in millions) (c) (g) 79.5



196.1

Average U.S. dollar/euro exchange rate (h) 1.3712 1.3135 Change in the U.S. CPI (i) 2.3 % 1.7 % CPAŽ:17 - Global 6/30/2014 10-Q - 28



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__________

(a) Operating properties are primarily comprised of full or partial ownership

interests in 71 self-storage properties and two shopping centers, all of

which are managed by third parties. One of the shopping centers is accounted

for under the equity method of accounting and the other shopping center is a

build-to-suit project under construction.

(b) Excludes operating properties.

(c) Represents pro rata basis. See terms and definitions below for a description

of pro rata amounts.

(d) Represents consolidated basis.

(e) Represents Net investments in real estate.

(f) Includes build-to-suit transactions, which are reflected as the total

commitment for the build-to-suit funding.

(g) Financing obtained during the six months ended June 30, 2014 included a

refinancing of $22.9 million. No debt was refinanced during the six months

ended June 30, 2013. Financing on a pro rata basis includes our share of the

non-recourse mortgage financings related to Bank Pekao S.A. and Agrokor 5

( Note 6 ).

(h) The average conversion rate for the U.S. dollar in relation to the euro

increased during the six months ended June 30, 2014 as compared to the same

period in 2013, resulting in a positive impact on earnings in the current

year period for our euro-denominated investments.

(i) Many of our domestic lease agreements include contractual increases indexed

to the change in the U.S. Consumer Price Index, or CPI.

Net-Leased Portfolio Top Ten Tenants by Rent (in thousands, except percentages) Consolidated Pro Rata (b) Tenant/Lease Guarantor ABR (a) Percent ABR (a) Percent Metro Cash & Carry Italia S.p.A. (c) $ 31,367 11 % $ 31,367 10 % The New York Times Company 26,057 9 % 14,331 4 % Agrokor d.d. (c) 25,972 9 % 27,507 8 % General Parts Inc., Golden State Supply LLC, Straus-Frank Enterprises LLC, General Parts Distribution LLC and Worldpac Inc. 17,653 6 % 17,653 5 % KBR, Inc. 13,956 5 % 13,956 4 % Blue Cross and Blue Shield of Minnesota, Inc. 11,732 4 % 11,732 4 % Eroski Sociedad Cooperativa (c) 11,189 4 % 11,997 4 % DTS Distribuidora de Television Digital SA (c) 9,662 3 % 9,662 3 % Terminal Freezers, LLC 9,041 3 % 9,041 3 % RLJ-McLarty-Landers Automotive Holdings, LLC 6,546 2 % 6,544 2 % Total $ 163,175 56 %



$ 153,790 47 %

Weighted-Average Lease Term for Portfolio:



14.4 years

__________

(a) Contractual minimum annualized based rent, or ABR, excludes all operating

properties and is presented as of June 30, 2014. See terms and definitions

below for a description of ABR.

(b) See terms and definitions below for a description of pro rata amounts.

(c) Rent amounts are subject to fluctuations in foreign currency exchange rates. CPAŽ:17 - Global 6/30/2014 10-Q - 29



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Portfolio Diversification by Geography and Property Type (in thousands, except percentages)

Consolidated Pro Rata (b) Region ABR (a) Percent ABR (a) Percent U.S. East $ 51,730 18 % $ 39,390 12 % South 51,526 18 % 56,945 18 % Midwest 48,320 16 % 53,256 16 % West 27,849 9 % 28,818 9 % U.S. Total 179,425 61 % 178,409 55 % International Italy 31,367 11 % 31,367 10 % Croatia 25,972 9 % 27,507 8 % Spain 20,851 7 % 21,659 7 % Poland 11,361 4 % 16,552 5 % Germany 10,796 4 % 20,815 6 % Netherlands 3,075 1 % 17,043 5 % Other (c) 9,078 3 % 12,682 4 % International Total 112,500 39 % 147,625 45 % Total $ 291,925 100 % $ 326,034 100 % Consolidated Pro Rata (b) Property Type ABR (a) Percent ABR (a) Percent Office $ 94,387 32 % $ 90,558 28 % Warehouse/Distribution 66,812 23 % 86,094 26 % Retail 61,339 21 % 75,471 23 % Industrial 47,167 16 % 47,538 15 % Other (d) 22,220 8 % 26,373 8 % Total $ 291,925 100 % $ 326,034 100 % ________



(a) ABR excludes all operating properties and is presented as of June 30, 2014.

See terms and definitions below for a description of ABR.

(b) See terms and definitions below for a description of pro rata amounts.

(c) Consolidated includes ABR from tenants in Japan and the United Kingdom. Pro

Rata includes ABR from the aforementioned countries and Hungary.

(d) Consolidated includes ABR from tenants with the following property types:

education, automotive dealership, and sports. Pro Rata includes ABR from the

aforementioned property types in addition to self-storage and land. CPAŽ:17 - Global 6/30/2014 10-Q - 30



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Portfolio Diversification by Tenant Industry (in thousands, except percentages) Consolidated Pro Rata (b) Industry Type (c) ABR (a) Percent ABR (a) Percent Retail Trade $ 72,264 25 % $ 86,370 26 % Media: Printing and Publishing 38,448 13 % 26,722 8 % Grocery 37,177 13 % 57,181 18 % Transportation - Cargo 15,493 5 % 15,405 5 % Construction and Building 14,000 5 % 14,000 4 % Healthcare, Education, and Childcare 11,755 4 % 11,755 4 % Insurance 11,732 4 % 15,211 5 % Business and Commercial Services 11,254 4 % 11,254 3 % Machinery 10,610 4 % 10,610 3 % Electronics 10,192 3 % 8,874 3 % Beverages, Food, and Tobacco 8,735 3 % 8,735 3 % Automobile 7,972 3 % 6,712 2 % Leisure, Amusement, and Entertainment 7,672 3 % 7,672 2 % Chemicals, Plastics, Rubber, and Glass 6,046 2 % 9,638 3 % Consumer Services 5,672 2 % 5,672 2 % Consumer Non-durable Goods 4,912 2 % 4,912 2 % Banking 4,605 1 % 9,716 3 % Transportation - Personal 2,626 1 % 4,080 1 % Buildings and Real Estate 995 - % 3,696 1 % Other (d) 9,765 3 % 7,819 2 % $ 291,925 100 % $ 326,034 100 % __________



(a) ABR excludes all operating properties and is presented as of June 30, 2014.

See terms and definitions below for a description of ABR.

(b) See terms and definitions below for a description of pro rata amounts.

(c) Based on the Moody's Investors Service, Inc. classification system and

information provided by the tenant.

(d) Includes ABR from tenants in the following industries: textiles, leather and

apparel, mining, metals, and primary metal industries, forest products and

paper, hotels and gaming, finance, consumer and durable goods, and telecommunications. CPAŽ:17 - Global 6/30/2014 10-Q - 31



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Lease Expirations - Pro Rata (in thousands, except percentages and number of leases) Consolidated Pro Rata (b) Number of Number of Leases Leases Year of Lease Expiration Expiring ABR (a) Percent Expiring ABR (a) Percent Remaining 2014 1 $ 84 - % 1 $ 84 - % 2015 10 340 - % 10 342 - % 2016 10 3,140 1 % 10 3,189 1 % 2017 4 574 - % 4 574 - % 2018 6 26,180 9 % 6 14,483 4 % 2019 3 342 - % 3 342 - % 2020 2 121 - % 2 120 - % 2021 3 1,662 1 % 3 1,161 - % 2022 2 2,923 1 % 2 4,348 1 % 2023 2 76 - % 2 5,187 2 % 2024 8 12,333 4 % 8 18,103 6 % 2025 11 11,370 4 % 11 11,370 3 % 2026 16 13,620 5 % 16 27,589 9 % 2027 23 31,088 11 % 23 31,088 10 % Thereafter 83 188,072 64 % 83 208,054 64 % 184 $ 291,925 100 % 184 $ 326,034 100 % __________



(a) ABR excludes all operating properties and is presented as of June 30, 2014.

See terms and definitions below for a description of ABR.

(b) See terms and definitions below for a description of pro rata amounts.

Self-Storage Summary

Self-storage properties have an average occupancy rate of 84% at June 30, 2014. As of June 30, 2014, our self-storage portfolio was comprised as follows (square footage in thousands): State Number of Properties Square Footage California 29 2,079 Illinois 13 900 Florida 7 486 Texas 5 437 Hawaii 4 259 Louisiana 3 196 Georgia 2 79 Alabama 1 130 North Carolina 1 80 Mississippi 1 61 Consolidated Total 66 4,707 New York 5 272 Pro Rata Total 71 4,979 CPAŽ:17 - Global 6/30/2014 10-Q - 32



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Terms and Definitions

Pro Rata Metrics

The portfolio information above 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, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we generally present our proportionate share, based on our economic ownership of these jointly-owned investments, of the assets, liabilities, revenues, and expenses of those investments. ABR



ABR represents contractual minimum annualized base rent for our net-leased properties. ABR is not applicable to operating properties.

Financial Highlights (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2014 2013 2014 2013 Total revenues $ 98,786$ 88,991$ 199,936$ 175,717 Net income attributable to CPAŽ:17 - Global 36,321 12,803 44,947 27,627 Cash distributions paid 52,042 50,208 103,611 96,621 Net cash provided by operating activities 101,670 93,752 Net cash used in investing activities (95,400 ) (147,288 ) Net cash (used in) provided by financing activities



(65,721 ) 29,384

Supplemental financial measures: Funds from operations (a) 64,353 38,856 103,780 79,076 Modified funds from operations (a) 60,336 35,016



100,392 69,424

__________

(a) We consider the performance metrics listed above, including Funds from

operations, or FFO, and Modified funds from operations, or MFFO, which are

supplemental measures that are not defined by GAAP, or non-GAAP, to be

important measures in the evaluation of our results of operations and capital

resources. We evaluate our results of operations with a primary focus on the

ability to generate cash flow necessary to meet our objective of funding

distributions to stockholders. See Supplemental Financial Measures below

for our definitions of these non-GAAP measures and reconciliations to their

most directly comparable GAAP measures.

Total revenues, Net income attributable to CPAŽ:17 - Global, Net cash provided by operating activities, FFO, and MFFO all increased for the three and six months ended June 30, 2014 as compared to the same periods in 2013, primarily reflecting the increase in the number of our investments during 2014 and 2013.



Results of Operations

We evaluate our results of operations with a primary focus on our ability to generate cash flow necessary to meet our objectives of funding distributions to stockholders and increasing our equity in our real estate. As a result, our assessment of operating results gives less emphasis to the effect of unrealized gains and losses, which may cause fluctuations in net income for comparable periods but have no impact on cash flows, and to other non-cash charges, such as depreciation and impairment charges. CPAŽ:17 - Global 6/30/2014



10-Q - 33

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The following table presents the comparative results of operations (in thousands):

Three Months Ended June 30,



Six Months Ended June 30,

2014 2013 Change 2014 2013 Change Revenues Lease revenues $ 77,646$ 69,704$ 7,942$ 154,290$ 138,482$ 15,808 Operating property revenues 13,837 13,310 527 30,604 26,386 4,218 Reimbursable tenant costs 5,735 4,038 1,697 11,997 7,516 4,481 Interest income and other 1,568 1,939 (371 ) 3,045 3,333 (288 ) 21,140 19,287 1,853 45,646 37,235 8,411 98,786 88,991 9,795 199,936 175,717 24,219 Operating Expenses Depreciation and amortization Net-leased properties 22,144 18,562 3,582 43,846 37,390 6,456 Operating properties 3,472 4,254 (782 ) 7,610 8,302 (692 ) 25,616 22,816 2,800 51,456 45,692 5,764 Property expenses Asset management fees 6,846 5,365 1,481 13,465 10,476 2,989 Operating properties 6,618 8,913 (2,295 ) 16,045 17,423 (1,378 ) Reimbursable tenant costs 5,735 4,038 1,697 11,997 7,516 4,481 Net-leased properties 3,170 2,936 234 6,216 5,084 1,132 22,369 21,252 1,117 47,723 40,499 7,224 General and administrative 5,108 4,220 888 11,309 9,748 1,561 Acquisition expenses 272 724 (452 ) 1,401 1,795 (394 ) 53,365 49,012 4,353 111,889 97,734 14,155 Net Operating Income 45,421 39,979 5,442 88,047 77,983 10,064 Other Income and Expenses Interest expense (23,264 ) (21,844 ) (1,420 ) (46,593 ) (43,661 ) (2,932 ) Net income from equity investments in real estate 10,974 1,733 9,241 7,725 2,867 4,858 Other income and (expenses) 946 1,358 (412 )



1,898 6,154 (4,256 )

(11,344 ) (18,753 ) 7,409 (36,970 ) (34,640 ) (2,330 ) Income from continuing operations before gain on sale of real estate, net of tax 34,077 21,226 12,851 51,077 43,343 7,734 Provision for income taxes (2,664 ) (754 ) (1,910 ) (3,361 ) (1,570 ) (1,791 ) Income from continuing operations 31,413 20,472 10,941 47,716 41,773 5,943 Income from discontinued operations, net of tax - 263 (263 ) - 492 (492 ) Gain on sale of real estate, net of tax 12,548 - 12,548 12,548 581 11,967 Net Income 43,961 20,735 23,226 60,264 42,846 17,418 Net income attributable to noncontrolling interests (7,640 ) (7,932 ) 292 (15,317 ) (15,219 ) (98 ) Net Income Attributable to CPAŽ:17 - Global $ 36,321$ 12,803$ 23,518$ 44,947$ 27,627$ 17,320 MFFO $ 60,336$ 35,016$ 25,320$ 100,392$ 69,424$ 30,968 CPAŽ:17 - Global 6/30/2014 10-Q - 34



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Lease Composition and Leasing Activities

As of June 30, 2014, approximately 54.8% of our net leases, based on ABR, provide for adjustments based on formulas indexed to changes in the CPI, or other similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. In addition, 44.7% of our net leases on that same basis have fixed rent adjustments, for which ABR is scheduled to increase by an average of 1.3% in the next 12 months. We own international investments and, therefore, lease revenues from these investments are subject to fluctuations in exchange rate movements in foreign currencies, primarily the euro. During the three and six months ended June 30, 2014, we extended two leases with existing tenants totaling 2,466 square feet of leased space. The average new rent for these leases was $19.65 per square foot and the average former rent was $19.16 per square foot. There were no tenant improvement allowances or concessions related to these leases. During the three months ended June 30, 2013, we did not modify any existing leases. During the six months ended June 30, 2013, we modified one existing lease with an existing tenant to add approximately 1.0 million square feet of leased space at the same rental rate per square foot. The average rent for this lease was $3.22 per square foot. There were no tenant improvement allowances or concessions related to this lease. CPAŽ:17 - Global 6/30/2014



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Property Level Contribution

Property level contribution includes lease and operating property revenues, less property expenses, depreciation and amortization. When a property is leased on a net-lease basis, reimbursable tenant costs are recorded as both income and property expense and, therefore, have no impact on the property level contribution. The following table presents the property level contribution for our consolidated leased and operating properties and a reconciliation to our net operating income (in thousands): Three Months Ended June 30,



Six Months Ended June 30,

2014 2013 Change 2014 2013 Change Same Store Net-leased Properties Lease revenues $ 69,806$ 68,140$ 1,666$ 139,287$ 136,168$ 3,119 Depreciation and amortization (18,599 ) (18,241 ) (358 ) (37,189 ) (36,841 ) (348 ) Property expenses (2,605 ) (2,903 ) 298



(4,999 ) (5,053 ) 54 Property level contribution 48,602 46,996 1,606 97,099 94,274 2,825

Recently Acquired Net-leased Properties Lease revenues 7,840 1,564 6,276 15,003 2,314 12,689 Depreciation and amortization (3,545 ) (321 ) (3,224 ) (6,657 ) (549 ) (6,108 ) Property expenses (565 ) (33 ) (532 ) (1,217 ) (31 ) (1,186 ) Property level contribution 3,730 1,210 2,520 7,129 1,734 5,395 Operating Properties Revenues 11,608 9,461 2,147 22,689 18,756 3,933 Property expenses (4,758 ) (4,400 ) (358 ) (9,490 ) (8,444 ) (1,046 ) Depreciation and amortization (3,368 ) (3,825 ) 457 (6,873 ) (7,873 ) 1,000 Property level contribution 3,482 1,236 2,246 6,326 2,439 3,887 Properties Sold Revenues 2,229 3,849 (1,620 ) 7,915 7,630 285 Property expenses (1,860 ) (4,513 ) 2,653 (6,555 ) (8,979 ) 2,424 Depreciation and amortization (104 ) (429 ) 325 (737 ) (429 ) (308 ) Property level contribution 265 (1,093 ) 1,358 623 (1,778 ) 2,401 Total Property Level Contribution Lease revenues 77,646 69,704 7,942 154,290 138,482 15,808 Property expenses (3,170 ) (2,936 ) (234 ) (6,216 ) (5,084 ) (1,132 ) Operating property revenues 13,837 13,310 527 30,604 26,386 4,218 Operating property expenses (6,618 ) (8,913 ) 2,295 (16,045 ) (17,423 ) 1,378 Depreciation and amortization (25,616 ) (22,816 ) (2,800 ) (51,456 ) (45,692 ) (5,764 ) Property Level Contribution 56,079 48,349 7,730 111,177 96,669 14,508 Add other income: Non-rent related revenue and other 1,568 1,939 (371 ) 3,045 3,333 (288 ) Less other expenses: Asset management fees (6,846 ) (5,365 ) (1,481 ) (13,465 ) (10,476 ) (2,989 ) Acquisition expenses (272 ) (724 ) 452 (1,401 ) (1,795 ) 394 General and administrative (5,108 ) (4,220 ) (888 ) (11,309 ) (9,748 ) (1,561 ) Net Operating Income $ 45,421$ 39,979$ 5,442$ 88,047$ 77,983$ 10,064 CPAŽ:17 - Global 6/30/2014 10-Q - 36



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Same Store Net-leased Properties

Same store net-leased properties are those we acquired prior to January 1, 2013. At June 30, 2014, there were 224 same-store net-leased properties.

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, property level contribution for same store net-leased properties increased by $1.6 million and $2.8 million, respectively, primarily due to an increase in lease revenues of $1.7 million and $3.1 million, respectively, as a result of CPI-related rent increases.



Recently Acquired Net-leased Properties

Recently acquired net-leased properties are those that we acquired subsequent to December 31, 2012.

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, property level contribution from recently acquired leased properties increased by $2.5 million and $5.4 million, respectively, as a result of 21 properties acquired after June 30, 2013 and through June 30, 2014.



Operating Properties

Other real estate operations represent primarily the results of operations (revenues and operating expenses) of our 66 self-storage properties. Eight self-storage properties were acquired during 2013, with the remaining self-storage properties acquired during prior years.

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, property level contribution from operating properties increased by $2.2 million and $3.9 million, respectively, as a result of six self-storage properties acquired after June 30, 2013 and through June 30, 2014.



Properties Sold

Properties sold represent only those properties that did not qualify for classification as discontinued operations. The results of operations for properties that were sold prior to January 1, 2014 are included within discontinued operations in the consolidated financial statements.

During the three months ended June 30, 2014, we sold a hotel that had been classified as an operating property on the consolidated financial statements ( Note 4 ). For the three months ended June 30, 2014 and 2013, property level contribution from the hotel sold was income of $0.3 million and a loss of $1.1 million, respectively. For six months ended June 30, 2014 and 2013, property level contribution from the hotel sold was income of $0.6 million and a loss of $1.8 million, respectively. Prior year losses incurred by the hotel were a result of significant renovation-related disruption for which a portion of total rooms were unavailable, thus negatively impacted our net operating income. The related gain is included in Gain on sale of real estate, net of tax, which is disclosed below. Other Revenues and Expenses



Property Expenses - Asset Management Fees

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, asset management fees increased by $1.5 million and $3.0 million, respectively, as a result of 2014 and 2013 investment volume, which increased the asset base from which the advisor earns a fee.



General and Administrative

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, general and administrative expenses increased by $0.9 million and $1.6 million, respectively, primarily due to increases in management expenses of $0.9 million and $1.4 million, respectively, as a result of the increase in our revenue base from which the advisor allocates costs of personnel and overhead pursuant to the terms of our advisory agreement. Management expenses include our reimbursements to the advisor for the allocated costs of personnel and overhead in providing management of our day-to-day operations, including accounting and legal services, stockholder services, corporate management, and property management and operations. CPAŽ:17 - Global 6/30/2014 10-Q - 37



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Net Income from Equity Investments in Real Estate

Net income from equity investments in real estate is recognized in accordance with each respective investment agreement and, where applicable, based upon an allocation of the investment's net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period. The table below presents the details of our net income from equity investments (in thousands). Same store equity investments represent investments we accounted for under the equity method and acquired prior to January 1, 2013. Recently acquired equity investments are those that we acquired subsequent to December 31, 2012. Three Months Ended June 30, Six Months Ended June 30, Type 2014 2013 Change 2014 2013 Change Same store equity investments $ 9,593$ 1,733$ 7,860$ 10,558$ 2,867$ 7,691 Recently acquired equity investments 1,381 - 1,381 (2,833 ) - (2,833 ) Total net income from equity investments $ 10,974$ 1,733$ 9,241$ 7,725$ 2,867$ 4,858 For the three and six months ended June 30, 2014 as compared to the same periods in 2013, net income from same store equity investments increased by $7.9 million and $7.7 million, respectively, primarily due to capital contributions made by our partners in one of our investments that resulted in income attributed to us of $6.5 million based upon the hypothetical liquidation at book value method of accounting ( Note 6 ).



For the three months ended June 30, 2014, we recognized net income from our recently acquired equity investments of $1.4 million primarily as a result of recognizing our share of earnings from an investment that was previously accounted for under the cost method of accounting ( Note 6 ).

For the six months ended June 30, 2014, we recognized a net loss from our five recently acquired equity investments. Our share of the earnings from three of the investments was more than offset by our share of the losses from the remaining two investments. Our share of the net losses included $4.2 million of acquisition expenses recorded by the entity that leases its property to Bank Pekao S.A., which was acquired in March 2014, partially offset by the $1.4 million representing our share of earnings from an investment that was previously accounted for under the cost method of accounting ( Note 6 ).



Other Income and (Expenses)

Other income and (expenses) primarily consists of gains and losses on foreign currency transactions and derivative instruments. We and certain of our foreign consolidated subsidiaries have intercompany debt or advances that are not denominated in the investment's functional currency. For intercompany transactions that are of a long-term investment nature, the gain or loss is recognized as a cumulative translation adjustment in Other comprehensive income or loss. We also recognize gains or losses on foreign currency transactions when we repatriate cash from our foreign investments. In addition, we have certain derivative instruments, including common stock warrants and foreign currency contracts that are not designated as hedges for accounting purposes, for which realized and unrealized gains and losses are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation. For the three and six months ended June 30, 2014 as compared to the same periods in 2013, net Other income decreased by $0.4 million and $4.3 million, respectively, primarily due to an increase in losses of $0.5 million and $3.2 million, respectively, recognized on our derivatives and a decrease in interest income of $0.2 million and $0.7 million, respectively, recognized on our lower average cash balances. These increases in losses were partially offset by increases of $0.3 million and $0.2 million, respectively, in realized gains related to foreign currency transaction gains on our foreign investments during the three and six months ended June 30, 2013.



Interest Expense

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, interest expense increased by $1.4 million and $2.9 million, respectively, primarily as a result of mortgage financing obtained or assumed in connection with our investment activity during 2014 and 2013. CPAŽ:17 - Global 6/30/2014



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Discontinued Operations

Income from discontinued operations, net of tax represents the net income (revenue less expenses) from the operations of properties that were sold or classified as held-for-sale prior to January 1, 2014 ( Note 13 ).

During the three and six months ended June 30, 2013, we recognized income from discontinued operations, net of tax of $0.3 million and $0.5 million, respectively, due to the sale of a hotel in the fourth quarter of 2013.

Gain on Sale of Real Estate, Net of Tax

For both the three and six months ended June 30, 2014, we recognized a $12.5 million gain on sale of real estate, net of tax as a result of the partial sale related to I Shops LLC ( Note 4 ).



Net Income Attributable to CPAŽ:17 - Global

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, the resulting net income attributable to CPAŽ:17 - Global increased by $23.5 million and $17.3 million, respectively.



Modified Funds from Operations

MFFO is a non-GAAP measure that we use to evaluate our business. For a definition of MFFO and reconciliation to net income attributable to CPAŽ:17 - Global, see Supplemental Financial Measures below.

For the three and six months ended June 30, 2014 as compared to the same periods in 2013, MFFO increased by $25.3 million and $31.0 million, respectively, primarily as a result of the increase in the number of our investments during 2014 and 2013. Financial Condition



Sources and Uses of Cash During the Period

We expect to continue to invest the proceeds of our follow-on offering in a diversified portfolio of income-producing commercial properties and other real estate related assets. We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund distributions to our stockholders. Our cash flows fluctuate from period to period due to a number of factors, which may include, among other things, the timing of purchases and sales of real estate, the timing of the receipt of the proceeds from and the repayment of non-recourse mortgage loans and receipt of lease revenues, the advisor's annual election to receive fees in shares of our common stock or cash, the timing and characterization of distributions received from equity investments in real estate, the timing of payments of distributions of available cash to the advisor, and changes in foreign currency exchange rates. Despite these fluctuations, we believe our net leases and other real estate related assets will generate sufficient cash from operations and from equity distributions in excess of equity income in real estate to meet our normal recurring short-term and long-term liquidity needs. However, until we have fully invested the proceeds of our follow-on offering, we have used, and may in the future use, a portion of the offering proceeds to fund our operating activities and distributions to our stockholders (see Financing Activities below). We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.



Operating Activities

Net cash provided by operating activities increased by $7.9 million during the six months ended June 30, 2014 compared to the same period in 2013, primarily reflecting the increase in the number of our investments during 2014 and 2013.



Investing Activities

Our investing activities are generally comprised of real estate-related transactions (purchases and sales), payment of deferred acquisition fees to the advisor related to asset acquisitions, and capitalized property-related costs. During the six months ended June 30, 2014, we used $73.5 million to acquire two investments and to fund construction costs on build-to-suit projects ( Note 4 ). We contributed $149.1 million to jointly-owned investments, including $95.9 million to acquire equity interests in one new investment, $30.4 million to fund existing ADC Arrangements, and $20.4 million to acquire an additional interest in an existing investment ( Note 6 ). We used $8.3 million to acquire an additional interest in a foreign debenture ( Note 8 ). We received $69.7 million as a return of capital from our equity investments in real estate, primarily due to a distribution of $62.6 million made to us as a result of new financing obtained by two of the investments ( Note 6 ), and we received net proceeds of CPAŽ:17 - Global 6/30/2014 10-Q - 39



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$68.0 million from the sale of real estate as a result of the partial sale related to I Shops LLC ( Note 4 ). Funds totaling $32.0 million and $36.2 million, respectively, were invested in and released from lender-held investment accounts.

Financing Activities During the six months ended June 30, 2014, we paid distributions of $103.6 million to our stockholders, which were comprised of cash distributions of $53.4 million and distributions that were reinvested in shares of our common stock by stockholders through our DRIP of $50.2 million. We paid distributions of $14.6 million to affiliates that hold noncontrolling interests in various investments jointly-owned with us. We received $52.6 million in proceeds from mortgage financings related to the investment activity. We paid financing costs totaling $0.8 million and we made scheduled and unscheduled mortgage principal installments totaling $35.3 million. Funds totaling $3.6 million were released from lender-held investment accounts. Our objectives are to generate sufficient cash flow over time to provide our stockholders with distributions and to seek investments with potential for capital appreciation throughout varying economic cycles. During the six months ended June 30, 2014, we declared distributions to our stockholders totaling $104.5 million, which were comprised of cash distributions of $54.2 million and $50.3 million of distributions reinvested by stockholders through our DRIP. We funded 95% of these distributions from Net cash provided by operating activities, with the remainder being funded from proceeds of our follow-on offering. Since inception, we have funded 93% of our cumulative distributions from Net cash provided by operating activities, with the remainder being funded from proceeds of our public offerings. In determining our distribution policy during the periods in which we are raising funds or investing capital, we place primary emphasis on projections of cash flow from operations, together with cash distributions from our unconsolidated investments, rather than on historical results of operations (though these and other factors may be a part of our consideration). In setting a distribution rate, we thus focus primarily on expected returns from those investments we have already made, as well as our anticipated rate of return from future investments, to assess the sustainability of a particular distribution rate over time. We maintain a quarterly redemption plan pursuant to which we may, at the discretion of our board of directors, redeem shares of our common stock from stockholders seeking liquidity. During the six months ended June 30, 2014, we received requests to redeem 1,182,382 shares of our common stock pursuant to our redemption plan, all of which were redeemed in the same period, at a weighted-average price of $9.04 per share, which is net of redemption fees, totaling $10.7 million.



Summary of Financing

The table below summarizes our non-recourse debt (dollars in thousands):

June 30, 2014 December 31, 2013 Carrying Value Fixed rate $ 1,311,669$ 1,319,340 Variable rate (a) 629,179 596,261 Total $ 1,940,848$ 1,915,601 Percent of Total Debt Fixed rate 68 % 69 % Variable rate 32 % 31 % 100 % 100 % Weighted-Average Interest Rate at End of Period Fixed rate 5.3 % 5.3 % Variable rate 4.0 % 4.0 % ___________



(a) Variable-rate debt at June 30, 2014 primarily consisted of (i) $437.1 million

that was effectively converted to fixed-rate debt through interest rate swap

derivative instruments, (ii) $113.6 million that was subject to an interest

rate cap, but for which the applicable interest rate was below the interest

rate of the cap at June 30, 2014, (iii) $42.4 million of floating-rate debt,

and (iv) $36.1 million in mortgage loan obligations that bore interest at

fixed rates but have interest rate reset features that may change the

interest rates to then-prevailing market fixed rates at certain points during their term. CPAŽ:17 - Global 6/30/2014 10-Q - 40



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Cash Resources

At June 30, 2014, our cash resources consisted of cash and cash equivalents totaling $358.2 million. Of this amount, $54.8 million, at then-current exchange rates, was held in foreign subsidiaries, but we could be subject to restrictions or significant costs should we decide to repatriate these amounts. We also had unleveraged properties that had an aggregate carrying value of $218.0 million at June 30, 2014, although there can be no assurance that we would be able to obtain financing for these properties. Our cash resources may be used for future investments and can be used for working capital needs, other commitments, and distributions to our stockholders.



Cash Requirements

During the next 12 months, we expect that our cash payments will include acquiring new investments, funding capital commitments, paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in entities we control, and making scheduled and unscheduled mortgage loan principal payments, as well as other normal recurring operating expenses. Balloon payments totaling $5.0 million on our consolidated mortgage loan obligations are due during the next 12 months. Our advisor is actively seeking to refinance certain of these loans, although there can be no assurance that it will be able to do so on favorable terms, if at all. Capital and ground lease commitments totaling $49.4 million are expected to be funded during the next 12 months. We expect to fund future investments, capital commitments such as build-to-suit projects and ADC Arrangements, any capital expenditures on existing properties, and scheduled and unscheduled debt maturities on our mortgage loans through the use of our cash reserves and cash generated from operations. We intend to continue to use the remaining net proceeds of our follow-on offering to acquire, own, and manage a portfolio of commercial real estate properties leased to a diversified group of companies primarily on a single-tenant net lease basis.



Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our debt, off-balance sheet arrangements, and other contractual obligations at June 30, 2014 and the effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands): Less than More than Total 1 year 1-3 years 3-5 years 5 years Non-recourse debt - principal (a) $ 1,944,540$ 33,945$ 523,594$ 383,817$ 1,003,184 Deferred acquisition fees - principal 12,377 9,167 3,210 - - Interest on borrowings and deferred acquisition fees 533,177 94,876 166,401 114,828 157,072 Subordinated disposition fees (b) 202 - - 202 - Capital commitments (c) 46,506 46,110 - 396 - Operating and other lease commitments (d) 78,926 3,265 6,706 7,005 61,950 Asset retirement obligations, net (e) 22,805 - - - 22,805 $ 2,638,533$ 187,363$ 699,911$ 506,248$ 1,245,011 ___________



(a) Excludes $3.7 million of unamortized discount, net on two notes, which was

included in non-recourse debt at June 30, 2014.

(b) Represents amounts that may be payable to the advisor in connection with

sales of assets if minimum stockholder returns are satisfied ( Note 3 ).

There can be no assurance as to whether or when these fees will be paid.

(c) Capital commitments include (i) capital commitments related to ADC

Arrangements of $24.8 million ( Note 6 ), (ii) current build-to-suit

projects of $19.9 million ( Note 4 ), and (iii) $1.8 million related to

other construction commitments.

(d) Operating commitments consist of rental obligations under ground leases.

Other lease commitments consist of our share of future rents payable for the

purpose of leasing office space pursuant to our advisory agreement. Amounts

are allocated among WPC, the CPAŽ REITs, and CWI based on gross revenues and

are adjusted quarterly.

(e) Represents the future amount of obligations estimated for the removal of

asbestos and environmental waste in connection with several of our acquisitions upon the retirement or sale of the assets.



Amounts in the table above that relate to our foreign operations are based on the exchange rate of the local currencies at June 30, 2014, which consisted primarily of the euro. At June 30, 2014, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

CPAŽ:17 - Global 6/30/2014 10-Q - 41



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Equity Investments

We have interests in unconsolidated investments that primarily own single-tenant properties net leased to companies. Generally, the underlying investments are jointly-owned with our affiliates. At June 30, 2014, on a combined basis, these investments had total assets of approximately $2.0 billion, third-party non-recourse mortgage debt of $0.9 billion, and total asset retirement obligations of $1.7 million. At that date, our pro rata share of the aggregate debt for these investments was $376.6 million. Cash requirements with respect to our share of these debt obligations are discussed above under Cash Requirements.



Supplemental Financial Measures

In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use supplemental non-GAAP measures which are uniquely defined by our management. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures are provided below.



Funds from Operations, or FFO, and Modified Funds from Operations, or MFFO

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 measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to nor a substitute for net income or loss as determined under GAAP. We define FFO consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004, or the White Paper. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate, and depreciation and amortization; and after adjustments for unconsolidated partnerships and jointly-owned investments. Adjustments for unconsolidated partnerships and jointly-owned investments are calculated to reflect FFO. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment, and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization as well as impairment charges of real estate-related assets, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. In particular, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indications exist and if the carrying, or book value, exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO described above, investors are cautioned that, due to the fact that impairments are based on estimated future undiscounted cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges. However, FFO and MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating the operating performance of the company. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO. Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) were put into effect in 2009. These other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT's definition of FFO have prompted an increase in cash-settled expenses, such as acquisition fees, that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after acquisition activity ceases. As disclosed in the prospectus for our follow-on offering dated April 7, 2011, or the Prospectus, we intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets or another similar transaction) within eight to 12 years following the investment of substantially all of the net proceeds from our initial offering, which occurred in April 2011. Thus, we do not intend to continuously purchase assets and intend to have a limited life. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association, or the IPA, an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance now that our offering has been completed and once all of our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance since our offering and most of our acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of a company's operating performance after a company's offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on a company's operating performance during the periods in which properties are acquired. We define MFFO consistent with the IPA's Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above- and below-market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; nonrecurring impairments of real estate-related investments (i.e., infrequent or unusual, not reasonably likely to recur in the ordinary course of business); mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives, or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and jointly-owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we are responsible for managing interest rate, hedge, and foreign exchange risk, we retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such infrequent gains and losses in calculating MFFO, as such gains and losses are not reflective of on-going operations.



In calculating MFFO, we exclude acquisition-related expenses, restructuring expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables, and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in

CPAŽ:17 - Global 6/30/2014



10-Q - 42

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determining operating net income. These expenses are paid in cash by a company. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by the company, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses, and other costs related to such property. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives and gains and losses from dispositions of assets as infrequent items or items which are unrealized and may not ultimately be realized, and which are not reflective of on-going operations and are therefore typically adjusted for assessing operating performance. Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-listed REITs, which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period, and targeted exit strategy, and hence that the use of such measures is useful to investors. For example, acquisition costs are generally funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management's analysis of the operating performance of the properties. By excluding restructuring expenses we facilitate the evaluation of operating performance of a recurring nature. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information. Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income or income from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO accordingly. CPAŽ:17 - Global 6/30/2014 10-Q - 43



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FFO and MFFO were as follows (in thousands):

Three Months Ended June 30,



Six Months Ended June 30,

2014 2013 2014 2013 Net income attributable to CPAŽ:17 - Global $ 36,321$ 12,803$ 44,947$ 27,627 Adjustments: Depreciation and amortization of real property 24,874 22,234 49,986 44,530 Gain on sale of real estate (3,461 ) - (3,461 ) - Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO: 0 Depreciation and amortization of real property 6,786 3,971 12,642 7,227 Proportionate share of adjustments for noncontrolling interests to arrive at FFO (167 ) (152 ) (334 ) (308 ) Total adjustments 28,032 26,053 58,833 51,449 FFO - as defined by NAREIT 64,353 38,856 103,780 79,076



Adjustments:

Other non-real estate depreciation, amortization and non-cash charges (314 ) 409 (948 ) (1,229 ) Straight-line and other rent adjustments (a) (4,827 ) (5,278 ) (9,806 ) (10,608 ) Loss on extinguishment of debt - - 270 - Acquisition expenses (b) 956 1,398 2,764 3,137 Above- and below-market rent intangible lease amortization, net (c) (79 ) (57 ) (145 ) (166 ) (Accretion of discounts) amortization of premiums on debt investments, net (160 ) 35 (290 ) 69 Realized losses (gains) on foreign currency, derivatives and other 294 (757 ) 305 (2,898 ) Unrealized gains on mark-to-market adjustments (81 ) - (129 ) - Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at MFFO: Other non-real estate depreciation, amortization and non-cash charges 3 10 1 12 Straight-line and other rent adjustments (a) (117 ) (21 ) (337 ) (19 ) Acquisition expenses (b) 67 64 4,172 1,315 Above- and below-market rent intangible lease amortization, net (c) 205 310 607 621 Realized (gains) losses on foreign currency, derivatives and other (27 ) 2 5 2 Unrealized losses on mark-to-market adjustments 74 - 112 - Proportionate share of adjustments for noncontrolling interests to arrive at MFFO (11 ) 45 31 112 Total adjustments (4,017 ) (3,840 ) (3,388 ) (9,652 ) MFFO $ 60,336$ 35,016$ 100,392$ 69,424 ___________



(a) Under GAAP, rental receipts are allocated to periods using an accrual basis.

This may result in income recognition that is significantly different than

underlying contract terms. By adjusting for these items (to reflect such

payments from a GAAP accrual basis to a cash basis of disclosing the rent and

lease payments), management believes that MFFO provides useful supplemental

information on the realized economic impact of lease terms and debt

investments, provides insight on the contractual cash flows of such lease

terms and debt investments, and aligns results with management's analysis of

operating performance.

(b) Includes Acquisition expenses and amortization of deferred acquisition fees.

In evaluating investments in real estate, management differentiates the costs

to acquire the investment from the operations derived from the investment.

Such information would be comparable only for non-listed REITs that have

completed their acquisition activity and have other similar operating

characteristics. By excluding expensed acquisition costs and amortization of

deferred acquisition fees, management believes MFFO provides useful

supplemental information that is comparable for each type of real estate

investment and is consistent with management's analysis of the investing and

operating performance of our properties. Acquisition fees and expenses include payments to our advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing



operations, both of which are performance measures under GAAP. All paid and

accrued acquisition fees and expenses will have negative effects on returns

to stockholders, the potential for future distributions, and cash flows CPAŽ:17 - Global 6/30/2014 10-Q - 44



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generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property. (c) Under GAAP, certain intangibles are accounted for at cost and reviewed at

least annually for impairment, and certain intangibles are assumed to

diminish predictably in value over time and amortized, similar to

depreciation and amortization of other real estate related assets that are

excluded from FFO. However, because real estate values and market lease rates

historically rise or fall with market conditions, management believes that by

excluding charges relating to amortization of these intangibles, MFFO

provides useful supplemental information on the performance of the real

estate.


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