Segment Reporting

We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, CMBS, one hotel, and other properties, which are included in our All Other category. The following tables present a summary of comparative results and assets for these business segments (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net Lease
Revenues ^{(a) (b)}	$	95,024		$	98,243		$	301,878		$	286,214
Operating expenses ^{(c) (d)}	(35,085		)	(68,453		)	(114,260		)	(139,970		)
Interest expense	(19,126		)	(22,302		)	(58,475		)	(66,583		)
Other income and (expenses), excluding interest expense ^(e)	(1,361		)	3,592			3,834			9,324
Provision for income taxes	(366		)	(590		)	(68		)	(2,570		)
(Loss) gain on sale of real estate, net of tax	(39		)	—			2,871			—
Net income attributable to noncontrolling interests	(3,622		)	(3,551		)	(9,895		)	(10,601		)
Net income attributable to CPA^®:17 – Global	$	35,425		$	6,939		$	125,885		$	75,814
Self Storage
Revenues	$	9,129		$	10,135		$	26,902		$	35,213
Operating expenses	(6,459		)	(7,717		)	(19,998		)	(28,632		)
Interest expense	(1,825		)	(2,211		)	(5,802		)	(6,746		)
Other income and (expenses), excluding interest expense ^{(f) (g)}	—			(15,991		)	(260		)	25,905
Provision for income taxes	(28		)	(16		)	(90		)	(133		)
Gain on sale of real estate, net of tax	—			82,287			—			132,702
Net income attributable to CPA^®:17 – Global	$	817		$	66,487		$	752		$	158,309
All Other
Revenues	$	3,243		$	1,698		$	8,134		$	5,060
Operating expenses	(289		)	(29		)	(335		)	(81		)
Interest expense	—			—			—			(6		)
Other income and (expenses), excluding interest expense	(2,844		)	(603		)	(5,065		)	(2,999		)
Provision for income taxes	(1,006		)	(1,442		)	(2,030		)	(3,373		)
Net (loss) income attributable to CPA^®:17 – Global	$	(896	)	$	(376	)	$	704		$	(1,399	)
Corporate
Unallocated Corporate Overhead^(h)	$	(5,158	)	$	(9,556	)	$	(14,555	)	$	(29,422	)
Net income attributable to noncontrolling interests — Available Cash Distributions	$	(5,459	)	$	(5,276	)	$	(19,240	)	$	(17,803	)
Total Company
Revenues	$	107,396		$	110,076		$	336,914		$	326,487
Operating expenses	(53,313		)	(87,442		)	(168,509		)	(203,684		)
Interest expense	(21,776		)	(25,048		)	(66,619		)	(75,027		)
Other income and (expenses), excluding interest expense	2,536			(10,495		)	20,754			39,955
Provision for income taxes	(994		)	(2,333		)	(2,730		)	(6,530		)
(Loss) gain on sale of real estate, net of tax	(39		)	82,287			2,871			132,702
Net income attributable to noncontrolling interests	(9,081		)	(8,827		)	(29,135		)	(28,404		)
Net income attributable to CPA^®:17 – Global	$	24,729		$	58,218		$	93,546		$	185,499



	Total Assets at
	September 30, 2017		December 31, 2016
Net Lease ⁽ⁱ⁾	$	3,988,468	$	3,905,402
All Other ^(j)	277,969		266,231
Self-Storage	243,531		252,195
Corporate	136,148		275,095
Total Company	$	4,646,116	$	4,698,923

___________


(a)	Includes a $15.7 million write off and a $3.3 million acceleration of a below-market rent lease liabilities, pertaining to our KBR Inc., properties that were recognized in Rental income during the nine months ended September 30, 2017 (Note 13).


(b)	We recognized straight-line rent adjustments of $3.4 million during both the three months ended September 30, 2017 and 2016, and $10.6 million and $12.3 million during the nine months ended September 30, 2017 and 2016, respectively, which increased Rental income within our consolidated financial statements for each period.


(c)	Includes an impairment charge of $4.5 million related to a net-leased property (Note 8) incurred during the nine months ended September 30, 2017. During both the three and nine months ended September 30, 2016, we recorded an impairment charge on a net-leased property totaling $29.2 million (Note 8).

(d)

In April 2016, the Croatian government passed a special law assisting the restructuring of companies considered of systematic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and recently received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $4.8 million during the nine months ended September 30, 2017.


(e)	During the three and nine months ended September 30, 2017 we recorded impairment charges on our equity method investments totaling $6.3 million and $8.8 million, respectively (Note 8).


(f)	Includes a loss on extinguishment of debt of $16.0 million and $23.6 million during the three and nine months ended September 30, 2016, respectively.

(g)

We recognized a Gain on change in control of interests of $49.9 million during the nine months ended September 30, 2016. This gain was recorded in conjunction with the change in control resulting from the acquisition of a controlling interest in a self-storage investment portfolio that we previously accounted for under the equity investment method. We recorded a non-cash gain on change in control of interests, which was the difference between the carrying value of $15.1 million and the fair value of $64.9 million from our previously held equity interest in April 2016.


(h)	Included in unallocated corporate overhead are asset management fees and general and administrative expenses, as well as interest expense and other charges related to our Senior Credit Facility. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance.


(i)	Includes the impact of the I-drive Property disposition (Note 4 and Note 13), the sale of a property classified as Assets held for sale as of December 31, 2016, and the sale of three other net-leased properties (Note 13).


(j)	Includes the impact of the I-drive Wheel restructuring (Note 5, Note 6, Note 13).