Risk Management and Use of Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table sets forth certain information regarding our derivative instruments for the years presented (in thousands):

Derivatives Designated as Hedging Instruments		Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
	Balance Sheet Location	June 30, 2014		December 31, 2013		June 30, 2014			December 31, 2013
Foreign currency forward contracts	Other assets, net	$	1,801	$	2,002	$	—		$	—
Interest rate swaps	Other assets, net	549		1,895		—			—
Foreign currency collars	Other assets, net	145		429		—			—
Foreign currency forward contracts	Accounts payable, accrued expenses and other liabilities	—		—		(11,818		)	(11,928		)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(15,287		)	(12,911		)
Derivatives Not Designated as Hedging Instruments
Embedded derivatives (a)	Accounts payable, accrued expenses and other liabilities	—		—		(599		)	(2,164		)
Embedded derivatives (b)	Other assets, net	2,295		2,314		—			—
Stock warrants (c)	Other assets, net	1,716		1,782		—			—
Foreign currency forward contract (d)	Other assets, net	1,402		1,521		—			—
Swaption (e)	Other assets, net	775		1,205		—			—
Total derivatives		$	8,683	$	11,148	$	(27,704	)	$	(27,003	)

___________

(a) In connection with the ADC Arrangement with IDL Wheel Tenant, LLC, we agreed to fund a portion of the loan in the euro and we locked the euro to U.S. dollar exchange rate at $1.278 to the developer at the time of the transaction (Note 6). This component of the loan is deemed to be an embedded derivative that requires separate measurement.

(b) In December 2013, there was an amendment to the loan commitment for the refinancing of Agrokor d.d., referred to as the Agrokor 4 portfolio, which provided for an effective net settlement provision.

(c) As part of the purchase of an interest in Hellweg Die Profi-Baumärkte GmbH & Co. KG, or Hellweg 2, from our then affiliate, Corporate Property Associates 14 Incorporated, or CPA^®:14, in May 2011, we acquired warrants from CPA^®:14, which were granted by Hellweg 2 to CPA^®:14. These warrants give us participation rights to any distributions made by Hellweg 2 and we are entitled to a cash distribution that equals a certain percentage of the liquidity event price of Hellweg 2 should a liquidity event occur.

(d) In connection with one of our investments located in Japan, we entered into a foreign currency forward contract that protects against fluctuations in foreign currency rates related to the Japanese yen, but it did not qualify for hedge accounting.

(e) In connection with the non-recourse debt financing related to our Cuisine Solutions, Inc. investment, we executed a swap and purchased a swaption, which grants us the right to enter into a new swap with a predetermined fixed rate should there be an extension of the loan maturity date.

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The following tables present the impact of our derivative instruments on the consolidated financial statements (in thousands):

	Amount of Gain (Loss) Recognized in Other Comprehensive Loss on Derivatives (Effective Portion)
	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2014			2013			2014			2013
Interest rate cap (a)	$	355		$	298		$	687		$	565
Interest rate swaps	(2,502		)	6,490			(4,421		)	8,457
Foreign currency collars	(83		)	(1,077		)	(199		)	(61		)
Foreign currency forward contracts	400			(1,770		)	(409		)	3,435
Derivatives in Net Investment Hedging Relationships(b)
Foreign currency forward contracts	257			(847		)	318			1,016
Total	$	(1,573	)	$	3,094		$	(4,024	)	$	13,412

	Amount of Gain (Loss) Reclassified from Other Comprehensive Loss into Income (Effective Portion)
	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2014			2013			2014			2013
Interest rate cap	$	(355	)	$	(298	)	$	(687	)	$	(565	)
Interest rate swaps	(2,217		)	(1,748		)	(3,932		)	(3,382		)
Foreign currency collars (c)	118			523			194			941
Foreign currency forward contracts (c)	89			83			(100		)	372
Total	$	(2,365	)	$	(1,440	)	$	(4,525	)	$	(2,634	)

___________

(a) Includes gains attributable to noncontrolling interests of $0.2 million and $0.1 million for the three months ended June 30, 2014 and 2013, respectively, and $0.3 million for both the six months ended June 30,2014 and 2013, respectively.

(b) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.

(c) Gains (losses) reclassified from Other comprehensive (loss) income into income (loss) for contracts and collars that have matured are included in Other income and (expenses) in the consolidated financial statements.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

		Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not in Cash Flow  Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
Embedded credit derivatives	Other income and (expenses)	$	163		$	(394	)	$	281		$	554
Foreign currency forward contracts	Other income and (expenses)	(56		)	199			(118		)	762
Stock warrants	Other income and (expenses)	(66		)	—			(66		)	165
Swaption	Other income and (expenses)	(172		)	179			(430		)	179
Interest rate swaps (a)	Interest expense	53			76			124			179
Total		$	(78	)	$	60		$	(209	)	$	1,839

___________

(a) Relates to the ineffective portion of the hedging relationship.

Schedule of Derivative Instruments

The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2014 (currency in thousands):

Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2014(a)
Designated as Cash Flow Hedging Instruments
Foreign currency collars	1	€	4,468	$	145
Foreign currency forward contracts	105	€	209,723	(9,573		)
Foreign currency forward contracts	14	¥	650,343	1,556
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts	1	€	45,000	(2,000		)
Not Designated as Hedging Instruments
Foreign currency forward contracts	1	¥	610,129	1,402
				$	(8,470	)

___________

(a) Fair value amounts are based on the applicable exchange rate of the euro or the Japanese yen at June 30, 2014.

The interest rate swaps, cap, and swaption that we had outstanding on our consolidated subsidiaries at June 30, 2014 are summarized as follows (currency in thousands):

Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2014(a)
Interest rate cap (b)	1	$	113,842	$	—
Interest rate swaps	6	€	186,099	(9,575		)
Interest rate swaps	12	$	209,154	(5,163		)
Swaption	1	$	13,230	775
				$	(13,963	)

____________

(a) Fair value amount is based on the exchange rate of the euro at June 30, 2014, as applicable.

(b) The applicable interest rate of the related debt was 2.7%, which was below the interest rate of the cap of 4.0% at June 30, 2014. The notional amount of $51.2 million attributable to the noncontrolling interest is included in this cap and there is no fair value.

The interest rate swap that one of our unconsolidated jointly-owned investments had outstanding at June 30, 2014 and was designated as cash flow hedge is summarized as follows (currency in thousands):

Interest Rate Derivative	Ownership Interest in Investee at June 30, 2014	Number of Instruments	Notional Amount		Fair Value at June 30, 2014(a)
Interest rate swap	85%	1	€	12,001	$	(500	)

____________

(a) Fair value amount is based on the exchange rate of the euro at June 30, 2014.

Domestic And International Investments Revenues And Net Investments In Real Estate

The following tables present information about our investments on a geographic basis (in thousands):

		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
Domestic
	Revenues	$	68,920		$	63,988		$	139,978		$	125,851
	Income from continuing operations before income taxes and after gain on sale of real estate, net of tax	34,241			11,862			42,842			23,721
	Net income attributable to noncontrolling interests	(7,443		)	(7,695		)	(14,966		)	(14,818		)
	Net income attributable to CPA®:17 – Global	26,296			2,594			26,588			7,389
Italy
	Revenues	$	7,859		$	7,859		$	15,950		$	15,275
	Income from continuing operations before income taxes and after gain on sale of real estate, net of tax	1,922			1,922			3,885			3,859
	Net income attributable to noncontrolling interests	—			—			—			—
	Net income attributable to CPA®:17 – Global	1,922			1,922			3,823			3,858
Other International
	Revenues	$	22,007		$	17,144		$	44,008		$	34,591
	Income from continuing operations before income taxes and after gain on sale of real estate, net of tax	10,462			7,442			16,898			16,344
	Net income attributable to noncontrolling interests	(197		)	(237		)	(351		)	(401		)
	Net income attributable to CPA®:17 – Global	8,103			8,287			14,536			16,380
Total
	Revenues	$	98,786		$	88,991		$	199,936		$	175,717
	Income from continuing operations before income taxes and after gain on sale of real estate, net of tax	46,625			21,226			63,625			43,924
	Net income attributable to noncontrolling interests	(7,640		)	(7,932		)	(15,317		)	(15,219		)
	Net income attributable to CPA®:17 – Global	36,321			12,803			44,947			27,627

		June 30, 2014		December 31, 2013
Domestic
	Long-lived assets (a)	$	2,405,834	$	2,195,465
	Non-recourse debt	1,331,765		1,319,094
Italy
	Long-lived assets (a)	$	337,303	$	343,876
	Non-recourse debt	220,942		223,937
Other International
	Long-lived assets (a)	$	897,886	$	1,022,754
	Non-recourse debt	388,141		372,570
Total
	Long-lived assets (a)	$	3,641,023	$	3,562,095
	Non-recourse debt	1,940,848		1,915,601

___________

(a) Consists of Net investments in real estate.