W. P. Carey Annual Report 2009

FY2009 Annual Report · W. P. Carey

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2009 Annual Report

Income generation
for generations of investors

W. P. Carey & Co. and our series of managed CPA® programs have
been providing investors with a constant source of income for
over 35 years. Our risk management–driven investment strategy,
acquisition approval process and resulting portfolio diversification
have enabled us to focus on increasing distributions through various
economic cycles. We look forward to continuing our tradition of
income generation for you and for generations of investors to come.

Cumulative Distributions Paid by W. P. Carey and Our CPA® Programs
W. P. Carey and our CPA® programs surpassed $3 billion in paid distributions
in 2009; 87% of our distributions have increased over the prior quarter, and
we have never missed a payment.

$107,000,0006

$251,000,0006

$528,000,0006

$1,039,000,0006

1979

1983

1987

1991

1996

2001

Financial Highlights
(In thousands except per share data)

Operations
Revenues
Net Income
Cash Flow from Operating Activities
Funds from Operations—as adjusted (AFFO)1
Adjusted Cash Flow from Operating Activities1

By Segment
EBITDA1
Investment Management
Real Estate Ownership
Total
AFFO1
Investment Management
Real Estate Ownership
Total

Per Share
Diluted Earnings Per Share
Diluted AFFO Per Share1
Distributions Declared Per Share
Weighted Average Shares Outstanding (Diluted)

Stock Data
Price Range (January 1, 2009 through December 31, 2009)
Number of Shareholders

YeAR ended deCembeR 31, 2009

$187,161
69,023
74,544
122,876
93,880

$54,179
77,674
131,853

$55,550
67,326
122,876

$1.74
3.09
2.00
39,712,735

$16.15-$30.67
24,958

1 This Annual Report and the financials highlighted above contain references to non-GAAP financial measures, including EBITDA, AFFO and Adjusted Cash Flow from Operating Activities.
EBITDA – Represents earnings before interest, taxes, depreciation and amortization.
AFFO – Represents funds from operations as defined by the National Association of Real Estate Investment Trusts adjusted to include the impact of certain non-cash charges to net income.
Adjusted Cash Flow from Operating Activities – Represents GAAP cash flow from operations adjusted primarily to reflect certain timing differences, cash distributions received from
unconsolidated joint ventures in excess of our equity investment in the joint ventures, and cash distributions we make to our noncontrolling partners in joint ventures that we consolidate.

We believe that these non-GAAP financial measures are useful supplemental measures that assist investors to better understand the underlying performance of our business segments.
These non-GAAP financial measures do not represent net income or cash flow from operating activities that are computed in accordance with GAAP and should not be considered an
alternative to net income or cash flow from operating activities as an indicator of our financial performance. These non-GAAP financial measures may not be comparable to similarly
titled measures of other companies. Please reference the Form 8-K, which was filed on February 26, 2010, and is available on our Web site at www.wpcarey.com, for a reconciliation of these
non-GAAP financial measures to our consolidated financial statements.

$1,901,000,0006

$3,250,000,0006

2005

2010*

*As of 4/15/2010

dear Fellow Shareholders

What a difference a year makes! Over the past 12 months, we have seen a return of equity
investors—over $20 billion raised in the public markets and over $6 billion raised in the
private market—as well as a gradual reopening of mortgage lending. Investors in both
equity and debt are facing the reality of a low-return world, and this is driving a continued
appetite for yield-based investments. This appetite should create a number of favorable
trends for us, although it will likely make the investment climate more competitive as
well. The primary reasons we believe we are very well positioned to take advantage of
the environment going forward are:

Access to Capital
The past year showed that we have terrific access to capital and that access is getting
better and better. We have raised approximately $438 million in equity capital over the
past year—capital that has been used in a variety of investments that we were able to
make due in part to that access. That equity capital was raised from approximately
40 broker/dealer firms and over 4,500 financial advisors at those firms. Additionally,
although this time last year we were concerned about the state of the debt markets,
we have been able to complete 17 financings totaling $359 million in mortgage capital:
$306 million in the United States and $53 million in Europe both for W. P. Carey
and on behalf of the CPA® REITs.

Strong Financial Position
All of our funds and our company itself have benefited from the fact that we have ample
liquidity, strong balance sheets and modest leverage. The leverage we employ for our
funds is non-recourse, which allows us to manage a downturn with much more flexibility,
because a bad investment is limited to the equity in that investment and does not affect
the other investments in the fund. We have used this approach for over 35 years and it has
worked time and again.

2 •

W. P. C a r e y & C o.

W. P. Carey & Co. LLC’s Business Model

Advises
CPA® ReITs

Owns
diversified Stable Portfolio

4 $8 billion in net-leased real estate

4$1.5 billion in total market capitalization

4 Generated 55% of its revenue by managing
day-to-day operations and new real estate
investments1

4Generated 45% of its revenue through rental

income from its owned assets2

1 Revenues from investment management = asset management revenue + structuring revenue.
2 Revenues from real estate ownership = continuing rental income + interest income from direct financing leases + other
real estate income.

Market Leader
We have been a leading investor in sale-leaseback, or net-lease investments, for decades.
Having had discipline through the top of the last cycle is paying off, and we believe that
this financial crisis has only strengthened our market position. As many of our competitors
have had to retrench and refocus on survival, we have been able to move aggressively on
investment opportunities. We have established a strong leadership presence in the U.S. sale-
leaseback market and have been creating strong market position in Europe since 1998. We
hope to increase our market presence both in profile and in investment volume domestically
and internationally in the next few years.

Opportunistic Investment Approach
We believe there are plentiful attractive investment opportunities available today both in
the United States and in Europe due in part to the financial crisis and the resetting of asset
values around the world. We don’t see an environment of huge distress and asset trades at
massive discounts to fair value but, rather, an environment where well-capitalized investors
with well-established investment approaches can make attractive investments from a risk/
return standpoint. The New York Times investment and our first investment in Spain—our
purchase of 29 Eroski supermarkets—are great examples of our opportunistic investment
approach. We believe that this opportunistic investment approach and market leadership,
combined with our strong capital base and flexibility to find investment opportunities across
geographies, property types, and tenant industries, positions us very well going forward.

The past two years have been a trying time for investors in all asset classes. To investors
who have shown their faith in us by remaining investors throughout the worst of the
financial crisis, thank you for your loyalty. To investors who are new to our company,
thank you for your trust. And to all investors, rest assured that we will be working hard
to keep your loyalty and trust as we go forward into 2010.

With best wishes,

Wm. Polk Carey
Chairman

Gordon F. DuGan
President and Chief Executive Officer

2 0 0 9 A n n u a l R e p o r t • 3

We see opportunity in Tesco plc

$90 million
transaction

Long-term, 15-year lease

An international grocery
and general-merchandising
chain, Tesco is the world’s
third largest retailer.

4 •

W. P. C a r e y & C o.

The W. P. Carey Group’s first
sale-leaseback in Hungary

budapest-area
logistics facilities

UK parent
company
guarantee

D
i
s
c
i
p

l
i

n
e
+

Discipline: “orderly or prescribed
conduct or pattern of behavior; self-
control.” For 35+ years, W. P. Carey
has applied discipline to its investing,
fundraising and portfolio management
activities and for this reason we are
positioned to take advantage of today’s
opportunities. At W. P. Carey, we believe
discipline is measured through action.

2 0 0 9 A n n u a l R e p o r t • 5

Every investment we structure
goes through a rigorous under-
writing process: our investment
team analyzes the creditwor-
thiness of the tenant and the
criticality and fundamental value
of the assets and then tests the
structure and pricing under a
range of economic and busi-
ness scenarios. Our Independent
Investment Committee—a group
of investment professionals with
more than 200 years of combined
institutional and transactional
experience—then has the final say
on whether we make the invest-
ment. The Investment Committee

review and approval mechanism
has been an integral part of the
acquisition process since our
founding. This established process
maintains consistent standards for
our investments and is a large part
of why our portfolios continue
to perform well today; as of
year-end 2009, the W. P. Carey
Group’s occupancy was approxi-
mately 97%.

We use moderate levels of non-
recourse leverage to finance our
investments. This approach has
enabled us to avoid the situation
many of our overleveraged

competitors face today: millions
or even billions of dollars of debt
coming due but no cash to pay
it down and in many cases being
forced to sell good assets to pay
off debts on distressed assets.
At December 31, 2009 the CPA®
REITs had $404 million in debt
coming due in 2010–11 and we
had $56 million for the same
period. We are actively seeking
to refinance this debt but believe
we and the REITs have sufficient
financing alternatives and/or cash
resources to make these payments,
if necessary, so we feel we are in a
solid financial position.

Our discipline as an investment manager was highlighted from 2005 to 2007
This was the cyclical peak of asset prices, availability of credit and investor aggressiveness—and for roughly two
of those three years, we shut down fundraising. Why? We wanted to raise only the amount of money we thought
we could prudently invest and thought that there was far too much capital chasing too few good deals.

60%

2002

2003

2004

2005

2006

2007

2008

2009

6 •

W. P. C a r e y & C o.

WPC Marketshare –
Domestic Sale-Leasebacks

WPC Marketshare –
Non-traded REIT Sales

Sources:
Real Capital Analytics
Direct Investments Spectrum

The W. P. Carey Group Tenant Industry Diversification

Aerospace & defense
1.74%

banking
.03%

buildings & Real estate
2.66%

Chemicals, Plastics,
Rubber & Glass
4.95%

Consumer &
durable Goods
.84%

Consumer Services
.30%

Federal, State &
Local Government
1.45%

Grocery
.80%

Hotels & Gaming
1.80%

Leisure, Amusement
& entertainment
4.40%

media: Printing
& Publishing
4.89%

Retail Stores
21.98%

Textiles, Leather
& Apparel
.96%

Transportation—Personal
2.56%

This past year, we were highly suc-
cessful with our debt financings,
both for new transactions and for
refinancing of maturing debt; we
obtained mortgage financing total-
ing $297 million on behalf of our
CPA® REITs and $62 million for
our own portfolio. New financings
included a $120 million loan with
the Bank of China, New York
Branch, for The New York Times
Company’s midtown Manhattan
headquarters. Our investment
and asset management teams will
work hard to continue this trend
through 2010.

Our discipline as an investment
manager was highlighted from
2005 to 2007—the cyclical peak
of asset prices, availability of credit
and investor aggressiveness—and
for roughly two of those three
years, we closed down our fund-
raising. Why? We wanted to raise
only the amount of money we
thought we could prudently invest
and thought that there was far too
much capital chasing too few good
deals. Now that the market seems
to be on the rise again, we see great
opportunity for sale-leaseback
investing, and our 35+ year disci-
plined approach is enabling us to
seek out those opportunities.

Automobile
5.80%

beverages, Food
& Tobacco
3.52%

business &
Commercial Services
5.32%

Construction & building
4.34%

Consumer
non-durable Goods
2.15%

electronics
10.53%

Forest Products
& Paper
.94%

Healthcare, education
& Childcare
6.39%

Insurance
1.36%

machinery
2.61%

mining, metals &
Primary metal Industries
1.03%

Telecommunications
3.37%

Transportation—Cargo
3.13%

Utilities & Others
.15%

2 0 0 9 A n n u a l R e p o r t • 7

We see opportunity in The new York Times
Company (nYSe: nYT)

10.75% initial cap rate
with annual increases

Publisher of the New York
Times, International Herald
Tribune and Boston Globe
and owner of more than
50 Web sites, including
About.com

Approximately
$300-per-square-
foot purchase price

Renzo Piano–designed
headquarters located in
midtown manhattan

8 •

W. P. C a r e y & C o.

$225 million sale-
leaseback financing

Initial lease term of 15 years
with fixed rental escalations
and fixed tenant repurchase
option after year 10

+
O
p
p
o
r
t
u
n
i
t
y

Opportunity: “a good chance for
advancement or progress.” When times
are difficult, we see opportunity globally.
We are using the advantages the disciplined
approach we have taken over the past
35+ years has afforded us—a strong
balance sheet, capital, good fundraising
flow and quality tenant relationships—
to source and close transactions when
many others are unable to do so.

2 0 0 9 A n n u a l R e p o r t • 9

Investment structure:
high current cash flows
and conservative basis
in the building

What is driving this opportunity?
Fallen commercial real estate
values of 20 to 40%, nearly
$1.5 trillion of commercial real
estate debt rolling by 2012, and
a rebounding market.1 As an
investment organization with a
long track record in a well-defined
niche, we are prepared to seize
this opportunity.

Here are a few examples of how
we seized the opportunity on
behalf of our CPA® REITs this past
year. We closed a two-tranche,
$104 million total sale-leaseback
transaction with the third largest
grocery retailer in Spain, Eroski
Sociedad Cooperativa, the second
half of which closed in February
2010. We selected Eroski’s most
productive grocery stores in the
Basque region of northern Spain
with the investment thesis that
people buy groceries even during
difficult economic times, that the
dominant grocery retailer tends
to continue to be the dominant

retailer and that the most produc-
tive grocery stores continue to
perform the best.

We have been investing in Europe
since 1998, but the Eroski trans-
action was our first investment
in Spain. Although attracted to
Spain in the past, because of the
inflated markets we hadn’t seen
opportunities there that met our
investment parameters. Now
Spain’s real estate and financing
markets have declined, and the
country and many individual
businesses are in need of capital;
we see opportunity in that and
were able to go to Eroski with a
financing alternative that allowed
us to purchase Eroski’s prime
retail assets at attractive pricing.

In 2009 we also completed our
first transaction in Hungary.
Another new market for us, we
found opportunity in Hungary
through the acquisition of global
retailer Tesco plc’s logistics

facilities outside Budapest. Similar
to the Eroski acquisition, this was
the first time we saw an oppor-
tunity that fit our investment
parameters in Hungary. One of
the primary reasons this trans-
action made sense for us was
because we received a guarantee
from UK parent company Tesco,
the third largest retailer in the
world. We completed the euro-
denominated sale-leaseback,
valued at $94 million, and secured
euro-denominated debt, valued
at $50 million, thereby providing
an effective, inexpensive long-
term hedge.

We also highlight transactions with
The New York Times Company
and National Express Ltd. in these
pages and hope you’ll take some
time to read about those deals.
We strive to consider transactions
in a variety of industries, cities and
property types, thus spreading out
risk and adding to our portfolios’
overall diversification.

1 CMBS 2010 Outlook, Barclays Capital, December 2009

10 •

W. P. C a r e y & C o.

Cumulative Equity Raised
We use this capital to provide sale-leaseback
and build-to-suit financing for companies and
private equity firms around the globe.

$4,707,000,000(cid:31)

2010*

None of the $548 million in
transactions W. P. Carey and its
CPA® REITs completed in 2009
would have been possible without
the capital raised through our
latest non-traded REIT offering,
CPA®:17 – Global. As of March
26, 2010, CPA®:17 – Global raised
more than $900 million of its up-
to-$2.0-billion offering. Generally,
month-over-month fundraising
increased in 2009; we raised
$142 million in the fourth quarter,
which represented an increase of
98%, 41% and 14% over the first,
second and third quarters of 2009,
respectively, a trend we hope to
continue into 2010.

We believe 2010 holds increased
opportunities for us, and we have
already started the year with the
second tranche of the Eroski sale-
leaseback and two other notable
transactions on behalf of our
REITs, as well as our acquisition
of JPMorgan Chase’s Dallas/Fort
Worth–area operations center.
We do see significant challenges
ahead—more competition, new
players entering the market and
the risk for continued corporate
defaults. However, we are defin-
ing the opportunities we seek out
through the W. P. Carey lens, our
niche of expertise and close to four
decades of experience, in an effort
to capitalize on them in the best
possible way for our shareholders.

$1,640,000,000(cid:31)

$473,000,000(cid:31)

$273,000,000(cid:31)

$123,000,000(cid:31)

2006

2003

2001

1997

1993

1990

1988

1987

1986

1985

1983

1982

1981

1980

1979

*As of 3/31/10

2 0 0 9 A n n u a l R e p o r t • 11

We see opportunity in
national express Ltd.

Corporate head-
quarters and main
coach terminal hub,
a 38,000-square-
foot facility

$26 million now-completed
build-to-suit transaction

12 •

W. P. C a r e y & C o.

national express is the
United Kingdom’s only
national, scheduled
coach service,
serving approximately
1,700 destinations and
more than 16 million
passengers annually.

=
R
e
s
u
l
t
s

Strategically important asset

Results: “beneficial or tangible effect.”
What effect do our years of disciplined
investing and ability to secure future
opportunities have for our investors?
Income generation: in good times and
bad, W. P. Carey and the CPA® REITs
have never missed a distribution pay-
ment and 87% of our distributions have
increased over the prior quarter. It is
our goal to continue this trend.

2 0 0 9 A n n u a l R e p o r t • 13

How has W. P. Carey continued to
pay out increasing distributions
during these challenging times?

• Because we secure long-term leases

with our tenants and work dili-
gently on re-leasing, refinancing
and selling properties to keep our
portfolios at the highest occupancy
possible, we receive a steady stream
of income from our rent-paying
tenants each month. This rental
income—not asset appreciation—
is the primary driver in maintain-
ing a steady cash flow and, conse-
quently, steady distributions.

• Adjusted cash flow from operating
activities, rather than net income,
is the key metric we use to deter-
mine our distributions. Why? Net
income reflects non-cash charges
such as depreciation and amortiza-
tion, whereas adjusted cash flow
reflects only actual cash expenses
and is sourced primarily by
revenues earned from structuring
investments and managing assets
on behalf of our CPA® REITs, as
well as the rental revenue derived
from the long-term lease contracts
of our owned real estate.

W. P. Carey & Co. LLC’s Annualized Dividends

$2.01(cid:31)

• It is important to us that we be

able to cover our distributions—
meaning, the distributions we
pay out should be less than our
adjusted cash flow. Our payout
ratio (distributions per share
divided by adjusted cash flow
per share) for 2009 was 85%.

Our goal is to continue providing
W. P. Carey shareholders with
small but consistent distribution
increases.

Much of our success depends
on the success of our managed
funds; the CPA® REITs continue
to perform well given current
market conditions and pay out
a steady stream of distributions.
We are proud that their combined
occupancy remains over 97%.

$1.80(cid:31)

$1.71(cid:31)

$1.65(cid:31)

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

14 •

W. P. C a r e y & C o.

Annualized Yield and Estimated Net Asset Value of Our CPA® Programs

CPA®:14

8.11% 8.22%

8.31% 8.36%

7.49% 7.54% 7.58%7.63%

7.79%

7.08%

6.59%

6.49%

6.14%

CPA®:15

CPA®:16 – Global

7.21%7.29%

6.96%

6.64%

6.33%6.48%6.58%

6.62% 6.62%

6.21%6.29%6.37%6.48%

6.05%

5.36%

4.54%

0
0
0
1
$

0
3
1
1
$

0
1
2
1
$

0
4
2
1
$

0
2
3
1
$

0
5
4
1
$

0
0
3
1
$

0
8
1
1
$

0
0
0
1
$

0
5
0
1
$

0
4
1
1
$

0
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$

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$

0
7
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$

0
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$

0
8
9
$

0
2
9
$

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010*

2002

2003

2004

2005

2006

2007

2008

2009

2010*

2004

2005

2006

2007

2008

2009

2010*

Original cost (dollars per share)

Year-end estimated net asset value

Annualized yield

*As of 3/31/10

2009 CPA® Program Distribution Payout Ratios
We are proud that the distributions paid out by our CPA® programs, with the exception of
CPA®:17 – Global, which is still in its fundraising stage, continue to be supported by both
adjusted cash flow from operating activities and funds from operations—as adjusted (AFFO).

Distributions
Declared Per Share

Adjusted Cash Flow
Per Share

Payout Ratio
(distributions/
Adjusted Cash Flow)

AFFO Per Share

Payout Ratio
(distributions/AFFO)

CPA®:14

$0.7934

$1.14

70%

$1.10

72%

CPA®:15

CPA®:16 – Global

CPA®:17 – Global

$0.7151

$0.6621

$0.6324

$1.09

66%

$1.08

66%

$0.93

71%

$0.75

88%

$0.37

171%

$0.42

151%

Cumulative Total Return Comparison 1999–2009
If you had invested $1000 in W. P. Carey and these indices in 1999, how
much would your investment have been worth at december 31, 2009?

$5000

4000

3000

2000

1000

12/31/99

12/31/00

12/31/01

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06

12/31/07

12/31/08

12/31/09

W. P. Carey

NAREIT Index

S&P 500 Index

Russell 2000

2 0 0 9 A n n u a l R e p o r t • 15

Our Philanthropy: doing Good While doing Well

W. P. Carey’s founder and Chairman Wm. Polk Carey has always believed that people and companies who
are doing well should also be doing good by giving back to their communities, and for this reason he started
The W. P. Carey Foundation more than 20 years ago. Our employees embody this philosophy by donating
their time, talents and money to a wide range of causes and organizations: they support their alma maters,
research centers and arts and youth societies; participate in awareness walks, runs and hundred-mile bike
rides; act as mentors and big brothers or sisters for underprivileged children; and organize food and coat
drives. The W. P. Carey Foundation encourages and supports their incredible efforts with a 100%-matching
program. Here is a snapshot of how our employees are Doing Good While Doing Well.

• Following her own experience as a Fulbright Scholar in Mexico, Investments team member Katie Barthmaier
established a fund in her parents’ honor at her alma mater, the University of Pennsylvania. The Paul and
Kathleen Barthmaier Award assists with funding travel expenses for students conducting research or
involved with study programs abroad. The award recently funded a student’s travel to Brazil to participate
in a National Science Foundation program.

• Gordon DuGan, president and CEO, donates his time and resources by serving on the board of The
Innocence Project. Founded in 1992, The Innocence Project is a non-profit legal clinic and national
litigation and public policy organization dedicated to exonerating wrongfully convicted people through
DNA testing and reforming the criminal justice system to prevent future injustice. In 2009, 27 people
were exonerated by organizations in the Innocence Network after serving a combined 421 years in prison
for crimes they did not commit.

• The Adeona Foundation is a 501(c)3 charity that was founded in May 2008 by Office of the Chairman
employee Chad Burdette and four friends looking to bring together New York City’s network of young
professionals in order to make a profound impact on the community. The foundation hosts several
successful events throughout the year increasing awareness, raising funds and supporting community-
based organizations that benefit New York City’s disadvantaged children and youth.

• Asset manager Donna Neiley “adopts” a family every holiday season via Bergen County’s All Wrapped Up
program. Organized by the Volunteer Center of Bergen County, All Wrapped Up matches volunteers with
families in order to provide families with the holiday they deserve but cannot afford. From necessities
like sneakers and winter coats to children’s sporting equipment and books, underprivileged parents and
children get the holidays delivered to their doorsteps.

• Wide Eyed Productions is a New York City-based collective of artists dedicated to the pursuit of excellence
in risk-taking, relevant theater. Committed to cultivating new artistic talent, Wide Eyed has established
relationships with schools and colleges throughout the United States to extend its network and collabora-
tive process outside its own walls. Justin Ness, W. P. Carey’s knowledge manager, donates his time and
talents to serve as Wide Eyed’s managing director.

16 •

W. P. C a r e y & C o.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-13779

W. P. CAREY & CO. LLC

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation)

13-3912578
(I.R.S. Employer Identification No.)

50 Rockefeller Plaza
New York, New York
(Address of principal executive offices)

10020
(Zip code)

Registrant’s telephone numbers, including area code:
Investor Relations (212) 492-8920
(212) 492-1100
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Listed Shares, No Par Value

Name of exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes

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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.

Large accelerated filer

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Accelerated filer

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Non-accelerated filer
(Do not check if a smaller reporting company)

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Smaller reporting company

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes

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As of June 30, 2009, the aggregate market value of the registrants’ Listed Shares held by non-affiliates was $639.0 million.

As of February 19, 2010, there are 39,218,570 Listed Shares of registrant outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant incorporates by reference its definitive Proxy Statement with respect to its 2010 Annual Meeting of Shareholders,
to be filed with the Securities and Exchange Commission within 120 days following the end of its fiscal year, into Part III of this
Annual Report on Form 10-K.

TABLE OF CONTENTS

Page No.

PART I

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Item 6. Selected Financial Data

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules

SIGNATURES

Forward-Looking Statements

This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of
Operations in Item 7 of Part II of this Report, 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 cause them to differ from what is anticipated in the forward-looking
statements contained herein is included in this Report as well as in our other filings with the Securities and Exchange
Commission (the “SEC”), including but not limited to those described below in Item 1A. Risk Factors of this Report. We do not
undertake to revise or update any forward-looking statements. Additionally, a description of our critical accounting estimates is
included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Report.

W. P. Carey 2009 10-K — 1

PART I

Item 1.

Business.

(a) General Development of Business

Overview:

W. P. Carey & Co. LLC (“W. P. Carey” and, together with its consolidated subsidiaries and predecessors, “we”, “us” or “our”)
provides long-term sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment
portfolio. We invest primarily in commercial properties domestically and internationally that are each triple-net leased to single
corporate tenants, which requires each tenant to pay substantially all of the costs associated with operating and maintaining the
property. We also earn revenue as the advisor to publicly owned, non-actively traded real estate investment trusts, which are
sponsored by us under the Corporate Property Associates brand name (the “CPA
REITs”) and invest in similar properties. We
are currently the advisor to the following CPA® REITs: Corporate Property Associates 14 Incorporated (“CPA®:14”), Corporate
Property Associates 15 Incorporated (“CPA®:15”), Corporate Property Associates 16 – Global Incorporated (“CPA®:16 –
Global”) and Corporate Property Associates 17 – Global Incorporated (“CPA®:17 – Global”).

Most of our properties were either acquired as a result of our consolidation with certain affiliated Corporate Property Associates
limited partnerships or subsequently acquired from other CPA® REIT programs in connection with the provision of liquidity to
shareholders of those REITs, as further described below. Because our advisory agreements with each of the existing CPA®
REITs require that we use our best efforts to present to them a continuing and suitable program of investment opportunities that
meet their investment criteria, we generally provide investment opportunities to these funds first and earn revenues from
transaction and asset management services performed on their behalf. Our principal focus on our owned real estate portfolio in
recent years has therefore been on enhancing the value of our existing properties.

Under the advisory agreements with the CPA® REITs, we manage the CPA® REITs’ portfolios of real estate investments, for
which we earn asset-based management and performance revenue, and we structure and negotiate investments and debt
placement transactions for them, for which we earn structuring revenue. We also receive a percentage of distributions of
available cash from CPA®:17 – Global’s operating partnership. In addition, we earn incentive and disposition revenue and
receive other compensation in connection with providing liquidity alternatives to CPA® REIT shareholders. The CPA® REITs
also reimburse us for certain costs, primarily broker/dealer commissions paid on their behalf and marketing and personnel costs.
As a result of electing to receive certain payments for services in shares, we also hold ownership interests in the CPA® REITs.

We were formed as a limited liability company under the laws of Delaware on July 15, 1996. We commenced operations on
January 1, 1998 by combining the limited partnership interests of nine CPA® partnerships, at which time we listed on the New
York Stock Exchange (“NYSE”) under the symbol “WPC.” As a limited liability company, we are not subject to federal income
taxation as long as we satisfy certain requirements relating to our operations and pass through any tax liabilities or benefits to our
shareholders; however, certain of our subsidiaries are engaged in investment management operations and are subject to U.S.
federal, state and local income taxes, and some of our subsidiaries may also be subject to foreign taxes.

Our principal executive offices are located at 50 Rockefeller Plaza, New York, NY 10020, and our telephone number is
(212) 492-1100. At December 31, 2009, we employed 156 individuals through our wholly-owned subsidiaries.

Significant Developments during 2009 include:

Acquisition Activity — During 2009, we structured investments totaling $547.7 million, including a transaction with The New
York Times Company totaling $233.7 million. This 2009 investment activity consisted of investments structured on behalf of the
CPA® REITs totaling $507.7 million and our contribution of $40.0 million in The New York Times transaction. International
investments comprised 36% of our total investments during 2009. Amounts are based on the exchange rate of the foreign
currency at the date of acquisition, as applicable.

Financing Activity — During 2009, we obtained mortgage financing totaling $297.0 million on behalf of the CPA® REITs and
$61.5 million for our own real estate portfolio, including financing for new transactions and refinancing of maturing debt.
Amounts are based on the exchange rate of the foreign currency at the date of financing, as applicable.

W. P. Carey 2009 10-K — 2

Impairment Charges — During 2009, we recorded impairment charges on our own portfolio totaling $10.4 million, and we
currently estimate that the CPA® REITs will record impairment charges aggregating approximately $170 million. Primarily due
to these impairment charges, our proportionate share of income from equity investments in the CPA® REITs declined by
$11.5 million for 2009.

Fundraising Activity — Since beginning fundraising for CPA®:17 – Global in December 2007, we have raised more than
$850.0 million on their behalf through the date of this Report. Included in this amount is $437.9 million that we raised during
2009 and $76.7 million that we have raised so far in 2010 through the date of this Report. We earn a wholesaling fee of up to
$0.15 per share sold, which we use, along with any retained portion of selected dealer revenue, to cover underwriting costs
incurred in connection with CPA®:17 – Global’s offering and are reimbursed for marketing and personnel costs incurred in
raising capital on behalf of CPA®:17 – Global, subject to certain limitations.

(b) Financial Information About Segments

Refer to Note 17 in the accompanying consolidated financial statements for financial information about segments.

Business Objectives and Strategy

We have two primary business segments, investment management and real estate ownership. These segments are each described
below. Our objective is to increase shareholder value and earnings through expansion of our investment management operations
and prudent management of our owned real estate assets.

Investment Management

We earn revenue as the advisor to the CPA® REITs. Under the advisory agreements with the CPA® REITs, we perform various
services, including but not limited to the day-to-day management of the CPA® REITs and transaction-related services. The
advisory agreements allow us to elect to receive restricted stock for any revenue due from a CPA® REIT.

Because of limitations on the amount of non-real estate related income that may be earned by a limited liability company that is
taxed as a publicly traded partnership, our investment management operations are currently conducted primarily through taxable
subsidiaries.

From time to time, we explore alternatives for expanding our investment management operations beyond advising the CPA®
REITs. Any such expansion could involve the purchase of properties or other investments as principal, either for our own
portfolio or with the intention of transferring such investments to a newly created fund, as well as the sponsorship of one or more
funds to make investments other than primarily net lease investments.

Asset Management Revenue

Under the terms of the advisory agreements for CPA®:14, CPA®:15 and CPA®:16 – Global, we earn asset management revenue
totaling 1% per annum of average invested assets, which is calculated according to the advisory agreements for each CPA®
REIT. A portion of this asset management revenue is contingent upon the achievement of specific performance criteria for each
CPA® REIT, which is generally defined to be a cumulative distribution return for shareholders of the CPA® REIT. For CPA®:14,
CPA®:15 and CPA®:16 – Global, this performance revenue is generally equal to 0.5% of the average invested assets of the
CPA® REIT. For CPA®:17 – Global, we earn asset management revenue ranging from 0.5% of average market value for long-
term net leases and certain other types of real estate investments up to 1.75% of average equity value for certain types of
securities. For CPA®:17 – Global, we do not earn performance revenue, but we receive up to 10% of distributions of available
cash from its operating partnership. We seek to increase our asset management revenue and performance revenue by increasing
real estate-related assets under management, both as the CPA® REITs make new investments and from organizing new
investment entities. Such revenue may also increase, or decrease, based on changes in the estimated net asset valuations of the
individual CPA® REITs. Estimated net asset valuations are performed annually by a third party, beginning for each CPA® REIT
generally three years after completion of its public offering. Assets under management, and the resulting revenue earned by us,
may also decrease if investments are disposed of, either individually or in connection with the liquidation of a CPA® REIT.

W. P. Carey 2009 10-K — 3

Structuring Revenue

Other Revenue

We may also earn revenue related to the disposition of properties, subject to subordination provisions, which will only be
recognized as the relevant conditions are met. Such revenue may include subordinated disposition revenue of no more than 3%
of the value of any assets sold, payable only after shareholders have received back their initial investment plus a specified
preferred return, and subordinated incentive revenue of 15% of the net cash proceeds distributable to shareholders from the
disposition of properties, after recoupment by shareholders of their initial investment plus a specified preferred return. We may
also, in connection with the termination of the advisory agreement for CPA®:14, CPA®:15 and CPA®:16 – Global, be entitled to
a termination payment based on the amount by which the fair value of a CPA® REIT’s properties, less indebtedness, exceeds
investors’ capital plus a specified preferred return. CPA®:17 – Global, upon certain terminations, has the right, beginning two
years after the start of its operations, to repurchase our interest in its operating partnership at its then fair market value. We will
not receive a termination payment in circumstances where we receive subordinated incentive revenue.

In past years, we have earned substantial disposition and incentive or termination revenue in connection with providing liquidity
to CPA® REIT shareholders. In general, we begin evaluating liquidity alternatives for CPA® REIT shareholders about eight
years after a CPA® REIT has substantially invested the net proceeds received in its initial public offering. These liquidity
alternatives may include listing the CPA® REIT’s shares on a national securities exchange, selling the assets of the CPA® REIT
or merging the affected CPA® REIT with another entity, which could include another CPA® REIT. However, the timing of
liquidity events depends on market conditions and may also depend on other factors, including approval of the proposed course
of action by the independent directors, and in some instances the shareholders, of the affected CPA® REIT, and may occur well
after the eighth anniversary of the date that the net proceeds of an offering have been substantially invested. Because of these
factors, CPA® REIT liquidity events have not typically taken place every year. In consequence, given the relatively substantial
amounts of disposition revenue, as compared with the ongoing revenue earned from asset management and structuring
investments, income from this business segment may be significantly higher in those years where a liquidity event takes place.
Because CPA®:14 substantially invested the net proceeds received in its initial public offering in 2000, we began discussing
liquidity alternatives with the board of directors of CPA®:14 during 2008. However, in light of evolving market conditions
during 2008, we recommended, and the board of CPA®:14 agreed, that further consideration of liquidity alternatives be
postponed until market conditions become more stable. In 2010, we expect to restart our discussion about liquidity alternatives
for CPA
occur.

:14 shareholders with the board of directors of CPA®:14, but we are unable to predict when any liquidity event will

The CPA® REITs reimburse us for certain costs, primarily broker/dealer commissions paid on behalf of the CPA® REITs and
marketing and personnel costs. The CPA® REITs also reimburse us for many of our costs associated with the evaluation of
transactions on their behalf that are not completed. Marketing and personnel costs are apportioned based on the assets of each
entity. These reimbursements may be substantial. These reimbursements, together with asset management revenue payable by a
specific CPA® REIT, may be subject to deferral or reduction if they exceed a specified percentage of that CPA® REIT’s income
or invested assets. We also earn a wholesaling fee from CPA®:17 – Global of up to $0.15 per share sold, which we use, along
with any retained portion of the selected dealer revenue, to cover other underwriting costs incurred in connection with CPA®:17
– Global’s offering.

Equity Investments in CPA® REITs

As discussed above, we may elect to receive certain of our revenues from the CPA® REITs in restricted shares of those entities.
At December 31, 2009, we owned 8.5% of the outstanding shares of CPA®:14, 6.5% of the outstanding shares of CPA®:15,
4.7% of the outstanding shares of CPA®:16 – Global and 0.4% of the outstanding shares of CPA®:17 – Global. As a result of our
election to receive certain asset management revenue for 2010 in restricted shares of these entities, we expect our ownership
percentages to increase in 2010.

W. P. Carey 2009 10-K — 4

Real Estate Ownership

We own and invest in commercial properties in the United States (“U.S.”) and the European Union that are then leased to
companies, primarily on a single-tenant, triple-net leased basis. While our acquisition of new properties is constrained by our
obligation to provide a continuing and suitable investment program to the CPA® REITs, we seek to maximize the value of our
existing portfolio through prudent management of our real estate assets, which may involve follow-on transactions, dispositions
and favorable lease modifications, as well as refinancing of existing debt. In connection with providing liquidity alternatives to
CPA® REIT shareholders, we may acquire additional properties from the liquidating CPA® REIT, as we did during 2006. We
have also acquired properties and interests in properties through tax-free exchanges and as part of joint ventures with the CPA®
REITs. We may also, in the future, seek to increase our portfolio by making investments, including non-net lease investments
and investments in emerging markets, that may not meet the investment criteria of the CPA® REITs, particularly investments
that are not current-income oriented. See Our Portfolio below for an analysis of our portfolio at December 31, 2009.

While no tenant at any of our consolidated investments represented more than 10% of our total lease revenues from our real
estate ownership during 2009, a joint venture that we account for under the equity method of accounting and that leases property
to Carrefour France, SAS, earned lease revenue of $21.5 million in 2009. We have a 46% interest in this joint venture.

The Investment Strategies, Financing Strategies, Asset Management, Competition and Environmental Matters sections described
below pertain to both our investment management and real estate ownership segments.

Investment Strategies

The following description of our investment process applies to investments we make on behalf of the CPA® REITs. In general,
we would expect to follow a similar process in connection with any investments in triple-net lease, single-tenant commercial
properties we may make directly, but we are not required to do so.

In analyzing potential investments, we review all aspects of a transaction, including tenant and real estate fundamentals, to
determine whether a potential investment and lease can be structured to satisfy the CPA® REITs’ investment criteria. In
evaluating net lease transactions, we generally consider, among other things, the following aspects of each transaction:

Tenant/Borrower Evaluation — We evaluate each potential tenant or borrower for its creditworthiness, typically considering
factors such as management experience, industry position and fundamentals, operating history, and capital structure, as well as
other factors that may be relevant to a particular investment. We seek opportunities in which we believe the tenant may have a
stable or improving credit profile or credit potential that has not been recognized by the market. In evaluating a possible
investment, the creditworthiness of a tenant or borrower often will be a more significant factor than the value of the underlying
real estate, particularly if the underlying property is specifically suited to the needs of the tenant; however, in certain
circumstances where the real estate is attractively valued, the creditworthiness of the tenant may be a secondary consideration.
Whether a prospective tenant or borrower is creditworthy will be determined by our investment department and the investment
committee, as described below. Creditworthy does not mean “investment grade.”

Properties Important to Tenant/Borrower Operations — We generally will focus on properties that we believe are essential or
important to the ongoing operations of the tenant. We believe that these properties provide better protection generally as well as
in the event of a bankruptcy, since a tenant/borrower is less likely to risk the loss of a critically important lease or property in a
bankruptcy proceeding or otherwise.

Diversification — We attempt to diversify the CPA® REIT portfolios to avoid dependence on any one particular tenant,
borrower, collateral type, geographic location or tenant/borrower industry. By diversifying these portfolios, we seek to reduce the
adverse effect of a single under-performing investment or a downturn in any particular industry or geographic region. While we
have not endeavored to maintain any particular standard of diversity in our own portfolio, we believe that our own portfolio is
reasonably well diversified (see Our Portfolio below).

Lease Terms — Generally, the net leased properties in which the CPA® REITs and we invest will be leased on a full recourse
basis to the tenants or their affiliates. In addition, we seek to include a clause in each lease that provides for increases in rent over
the term of the lease. These increases are fixed or tied generally to increases in indices such as the Consumer Price Index
(“CPI”). In the case of retail stores and hotels, the lease may provide for participation in gross revenues of the tenant at the
property above a stated level. Alternatively, a lease may provide for mandated rental increases on specific dates, and we may
adopt other methods in the future.

W. P. Carey 2009 10-K — 5

Collateral Evaluation — We review the physical condition of the property, and conduct a market evaluation to determine the
likelihood of replacing the rental stream if the tenant defaults or of a sale of the property in such circumstances. We also
generally engage a third party to conduct, or require the seller to conduct, Phase I or similar environmental site assessments
(including a visual inspection for the potential presence of asbestos) in an attempt to identify potential environmental liabilities
associated with a property prior to its acquisition. If potential environmental liabilities are identified, we generally require that
identified environmental issues be resolved by the seller prior to property acquisition or, where such issues cannot be resolved
prior to acquisition, require tenants contractually to assume responsibility for resolving identified environmental issues post-
closing and provide indemnification protections against any potential claims, losses or expenses arising from such matters.
Although we generally rely on our own analysis in determining whether to make an investment on behalf of the CPA® REITs,
each real property to be purchased by them will be appraised by an independent appraiser. The contractual purchase price (plus
acquisition fees, but excluding acquisition expenses, for properties acquired on behalf of the CPA® REITs) for a real property we
acquire for ourselves or on behalf of a CPA® REIT will not exceed its appraised value. The appraisals may take into
consideration, among other things, the terms and conditions of the particular lease transaction, the quality of the lessee’s credit
and the conditions of the credit markets at the time the lease transaction is negotiated. The appraised value may be greater than
the construction cost or the replacement cost of a property, and the actual sale price of a property if sold may be greater or less
than the appraised value. In cases of special purpose real estate, a property is examined in light of the prospects for the
tenant/borrower’s enterprise and the financial strength and the role of that asset in the context of the tenant’s overall viability.
Operating results of properties and other collateral may be examined to determine whether or not projected income levels are
likely to be met. We will also consider factors particular to the laws of foreign countries, in addition to the risks normally
associated with real property investments, when considering an investment outside the U.S.

Transaction Provisions to Enhance and Protect Value — We attempt to include provisions in the leases that we believe may help
protect an investment from changes in the operating and financial characteristics of a tenant that may affect its ability to satisfy
its obligations to the CPA® REIT or reduce the value of the investment. Such provisions include requiring our consent to
specified tenant activity, requiring the tenant to provide indemnification protections, and requiring the tenant to satisfy specific
operating tests. We may also seek to enhance the likelihood of a tenant’s lease obligations being satisfied through a guaranty of
obligations from the tenant’s corporate parent or other entity or a letter of credit. This credit enhancement, if obtained, provides
additional financial security. However, in markets where competition for net lease transactions is strong, some or all of these
provisions may be difficult to negotiate. In addition, in some circumstances, tenants may retain the right to repurchase the
property leased by the tenant. The option purchase price is generally the greater of the contract purchase price and the fair market
value of the property at the time the option is exercised.

Other Equity Enhancements — We may attempt to obtain equity enhancements in connection with transactions. These equity
enhancements may involve warrants exercisable at a future time to purchase stock of the tenant or borrower or their parent. If
warrants are obtained, and become exercisable, and if the value of the stock subsequently exceeds the exercise price of the
warrant, equity enhancements can help achieve the goal of increasing investor returns.

As other opportunities arise, we may also seek to expand the CPA® REIT portfolios to include other types of real estate-related
investments, such as:

•

equity investments in real properties that are not long-term net leased to a single tenant and may include partially

leased properties, multi-tenanted properties, vacant or undeveloped properties and properties subject to short-term net
leases, among others;

mortgage loans secured by commercial real properties;

subordinated interests in first mortgage real estate loans, or B Notes;

mezzanine loans related to commercial real estate, which are senior to the borrower’s equity position but subordinated

to other third-party financing;

commercial mortgage-backed securities, or CMBS; and

equity and debt securities (including preferred equity and other higher-yielding structured debt and equity investments)

issued by companies that are engaged in real-estate related businesses, including other REITs.

To date, our investments on behalf of the CPA® REITs have not included significant amounts of these types of investments.

Investment Committee — We have an investment committee that provides services to the CPA® REITs and may provide services
to us. Our investment department, under the oversight of our chief investment officer, is primarily responsible for evaluating,
negotiating and structuring potential investment opportunities. Before a property is acquired by a CPA® REIT, the transaction is
generally reviewed by the investment committee. The investment committee is not directly involved in originating or negotiating
potential investments but instead functions as a separate and final step in the investment process. We place special emphasis on
having experienced individuals serve on our investment committee and, subject to limited exceptions, generally do not invest in a
transaction on behalf of the CPA® REITs unless the investment committee approves it. The investment committee may delegate
its authority, such as to investment advisory committees with specialized expertise in the particular geographic market, like our
Asia Advisory Committee for potential investments in China. However, we do not currently expect that the investments
delegated to these advisory committees will account for a significant portion of the investments we make in the near term.

W. P. Carey 2009 10-K — 6

In addition, the investment committee may at the request of our board of directors or executive committee also review any initial
investment in which we propose to engage directly, although it is not required to do so. Our board of directors or executive
committee may also determine that certain investments that may not meet the CPA® REITs’ investment criteria (particularly
transactions in emerging markets and investments that are not current income oriented) may be acceptable to us. For transactions
that meet the investment criteria of more than one CPA® REIT, our chief investment officer has discretion to allocate the
investment to one of the CPA® REITs or among two or more of the CPA® REITs. In cases where two or more CPA® REITs (or
one or more CPA® REITs and us) will hold the investment, a majority of the independent directors of each CPA® REIT
investing in the property must also approve the transaction.

The following people currently serve on our investment committee:

•

Nathaniel S. Coolidge, Chairman — Former senior vice president and head of the bond and corporate finance

department of John Hancock Mutual Life Insurance (currently known as John Hancock Life Insurance Company).
Mr. Coolidge’s responsibilities included overseeing its entire portfolio of fixed income investments.

Trevor P. Bond — Co-founder of Credit Suisse’s real estate equity group. Currently managing member of private

investment vehicle, Maidstone Investment Co., LLC.

Axel K.A. Hansing — Currently serving as a senior partner at Coller Capital, Ltd., a global leader in the private equity

secondary market, and responsible for investment activity in parts of Europe, Turkey and South Africa.

Frank J. Hoenemeyer — Former vice chairman and chief investment officer of the Prudential Insurance Company of

America. As chief investment officer, he was responsible for all of Prudential Insurance Company of America’s
investments including stocks, bonds and real estate.

Dr. Lawrence R. Klein — Currently serving as professor emeritus of economics and finance at the University of

Pennsylvania and its Wharton School. Recipient of the 1980 Nobel Prize in economic sciences and former consultant
to both the Federal Reserve Board and the President’s Council of Economic Advisors.

Nick J.M. van Ommen — Former chief executive officer of the European Public Real Estate Association promoting,

developing and representing the European public real estate sector, with over twenty years of financial industry
experience.

Dr. Karsten von Köller — Currently chairman of Lone Star Germany GmbH, deputy chairman of the Supervisory

Board of Corealcredit Bank AG, deputy chairman of the Supervisory Board of MHB Bank AG, and vice chairman of
the Supervisory Board of IKB Deutsche Industriebank AG. Former chief executive officer of Eurohypo AG.

Messrs. Coolidge, Bond, Klein and von Köller also serve as members of our board of directors.

We are required to use our best efforts to present a continuing and suitable investment program to the CPA® REITs but we are
not required to present to the CPA® REITs any particular investment opportunity, even if it is of a character which, if presented,
could be taken by one or more of the CPA® REITs.

Self-Storage Investments

In November 2006, we formed a subsidiary (“Carey Storage”) for the purpose of investing in self-storage real estate properties
and their related businesses within the U.S. In December 2006, we contributed $5.0 million in cash for equity interests in Carey
Storage and loaned Carey Storage $5.9 million, and Carey Storage began acquiring domestic self-storage properties. In
January 2009, Carey Storage completed a transaction whereby it received cash proceeds, plus a commitment to invest additional
equity, from a third party to fund the purchase of self-storage assets in the future in exchange for a 60% interest in its self-storage
portfolio. Further information about this transaction and other Carey Storage activity is described in Part II, Item 7, Carey
Storage Activity and Item 8, Note 4. Real Estate – Carey Storage.

W. P. Carey 2009 10-K — 7

Our Portfolio

At December 31, 2009, we owned and managed 880 properties domestically and internationally, including our own portfolio.
Our portfolio was comprised of our full or partial ownership interest in 170 properties, substantially all of which were triple-net
leased to 79 tenants, and totaled approximately 14 million square feet (on a pro rata basis) with an occupancy rate of
approximately 94%. Our portfolio has the following property and lease characteristics:

Geographic Diversification

Information regarding the geographic diversification of our properties at December 31, 2009 is set forth below (dollars in
thousands):

Region
United States
South
West
Midwest
East
Total U.S.
International
Europe (c)
Total

Consolidated Investments

Annualized
Contractual Lease
Revenue(a)

% of Annualized

Contractual
Lease Revenue

Equity Investments in Real Estate(b)
Annualized
Contractual Lease
Revenue(a)

Contractual
Lease Revenue

% of Annualized

26,758
15,917
11,068
7,971
61,714

7,601
69,315

39% $
23
16
11
89

100% $

2,988
3,590
2,399
6,511
15,488

13,572
29,060

10%
12
8
22
52

48
100%

(a) Reflects annualized contractual minimum base rent for the fourth quarter of 2009.
(b) Reflects our pro rata share of annualized contractual minimum base rent for the fourth quarter of 2009 from equity

investments in real estate.

Property Diversification

Information regarding our property diversification at December 31, 2009 is set forth below (dollars in thousands):

Property Type
Industrial
Office
Warehouse/Distribution
Retail
Other Properties (c)
Total

Consolidated Investments

Annualized
Contractual Lease
Revenue(a)

% of Annualized
Contractual
Lease Revenue

Equity Investments in Real Estate(b)
Annualized
Contractual Lease
Revenue(a)

Contractual
Lease Revenue

% of Annualized

24,605
23,917
10,334
5,858
4,601
69,315

35% $
35
15
8
7
100% $

4,501
12,360
8,684
—
3,515
29,060

15%
43
30
—
12
100%

investments in real estate.

W. P. Carey 2009 10-K — 8

Tenant Diversification

Information regarding our tenant diversification at December 31, 2009 is set forth below (dollars in thousands):

Tenant Industry(c)
Telecommunications
Business and Commercial Services
Retail Stores
Electronics
Beverages, Food, and Tobacco
Forest Products and Paper
Aerospace and Defense
Healthcare, Education and Childcare
Media: Printing and Publishing
Consumer Goods
Chemicals, Plastics, Rubber, and

Glass

Hotels and Gaming
Governmental
Mining
Machinery
Transportation — Cargo
Transportation — Personal
Other (d)
Total

Consolidated Investments

Annualized
Contractual Lease
Revenue(a)

% of Annualized
Contractual
Lease Revenue

Equity Investments in Real Estate(b)
Annualized
Contractual Lease
Revenue(a)

Contractual
Lease Revenue

% of Annualized

12,367
11,660
6,928
5,407
4,842
4,606
4,426
4,195
2,593
1,857

1,813
1,510
1,170
912
692
295
183
3,859

69,315

18% $
17
10
8
7
7
6
5
4
3

3
2
2
2
1
—
—
5
100% $

—
1,863
8,209
1,270
419
—
—
3,515
4,293
—

—
—
—
948
2,408
2,838
3,297
—
29,060

—%
6
30
4
1
—
—
12
15
—

—
—
—
3
8
10
11
—
100%

investments in real estate.

(c) Based on the Moody’s Investors Service, Inc.’s classification system and information provided by the tenant.
(d) Includes revenue from tenants in our consolidated investments in the following industries: automobile (1%), construction

(1%), grocery (1%), mining (1%) and textiles (1%).

W. P. Carey 2009 10-K — 9

Lease Expirations

At December 31, 2009, lease expirations of our properties are as follows (dollars in thousands):

Year of Lease Expiration
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 - 2023
2024 - 2028
Total

Consolidated Investments

Annualized
Contractual Lease
Revenue(a)

% of Annualized
Contractual
Lease Revenue

Equity Investments in Real Estate(b)
Annualized
Contractual Lease
Revenue(a)

Contractual
Lease Revenue

% of Annualized

10,070
10,683
6,975
2,325
7,868
6,761
1,160
5,890
10,751
5,787
1,045
69,315

15% $
15
10
3
11
10
2
8
16
8
2
100% $

—
—
1,094
2,282
3,297
7,115
560
—
—
7,063
7,649
29,060

—%
—
4
8
11
24
2
—
—
24
27
100%

investments in real estate.

Financing Strategies

Consistent with our investment policies, we use leverage when available on terms we believe are favorable. Substantially all of
our mortgage loans, as well as those of the CPA® REITs, are non-recourse and bear interest at fixed rates, or have been
converted to fixed rates through interest rate caps or swap agreements. We may refinance properties or defease a loan when a
decline in interest rates makes it profitable to prepay an existing mortgage loan, when an existing mortgage loan matures or if an
attractive investment becomes available and the proceeds from the refinancing can be used to purchase such investment. The
benefits of the refinancing may include an increased cash flow resulting from reduced debt service requirements, an increase in
distributions from proceeds of the refinancing, if any, and/or an increase in property ownership if some refinancing proceeds are
reinvested in real estate. The prepayment of loans may require us to pay a yield maintenance premium to the lender in order to
pay off a loan prior to its maturity.

A lender on non-recourse mortgage debt generally has recourse only to the property collateralizing such debt and not to any of
our other assets, while full recourse financing would give a lender recourse to all of our assets. The use of non-recourse debt,
therefore, helps us to limit the exposure of all of our assets to any one debt obligation. Lenders may, however, have recourse to
our other assets in limited circumstances not related to the repayment of the indebtedness, such as under an environmental
indemnity or in the case of fraud.

We also have an unsecured line of credit that can be used in connection with refinancing existing debt and making new
investments, as well as to meet other working capital needs. Our line of credit is discussed in detail in the Cash Resources section
of Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial
Condition.

W. P. Carey 2009 10-K — 10

Some of our financing may require us to make a lump-sum or “balloon” payment at maturity. We are actively seeking to
refinance loans that mature within the next several years but believe we have sufficient financing alternatives and/or cash
resources to make these payments, if necessary. At December 31, 2009, scheduled balloon payments for the next five years are
as follows (in thousands):

2010
2011
2012
2013
2014

11,612(a)
133,325(b) (c)
28,260

—(b)
—

(a) Of the amount shown, $2.2 million was paid in January 2010.
(b) Excludes our pro rata share of mortgage obligations of equity investments in real estate totaling $24.9 million in 2011 and

$71.7 million in 2014.

(c) Includes amounts that will be due upon maturity of our line of credit in June 2011. Such amounts are prepayable at any

time. At December 31, 2009, we had drawn $111.0 million from this line of credit, which allows us to borrow, repay,
prepay, and reborrow at any time prior to the scheduled maturity date. We also have the ability to extend this line by an
additional year subject to satisfying certain conditions.

Asset Management

We believe that effective management of our assets is essential to maintain and enhance property values. Important aspects of
asset management include restructuring transactions to meet the evolving needs of current tenants, re-leasing properties,
refinancing debt, selling properties and knowledge of the bankruptcy process.

We monitor, on an ongoing basis, compliance by tenants with their lease obligations and other factors that could affect the
financial performance of any of our properties. Monitoring involves receiving assurances that each tenant has paid real estate
taxes, assessments and other expenses relating to the properties it occupies and confirming that appropriate insurance coverage is
being maintained by the tenant. For international compliance, we often rely on third party asset managers. We review financial
statements of tenants and undertake regular physical inspections of the condition and maintenance of properties. Additionally, we
periodically analyze each tenant’s financial condition, the industry in which each tenant operates and each tenant’s relative
strength in its industry.

Competition

In raising funds for investment by the CPA® REITs, we face active competition from other funds with similar investment
objectives that seek to raise funds from investors through publicly registered, non-traded funds, publicly-traded funds and private
funds, such as hedge funds. In addition, we face broad competition from other forms of investment. Currently, we raise
substantially all of our funds for investment in the CPA® REITs within the U.S.; however, in the future we may seek to raise
funds for investment from outside the U.S.

While historically we faced active competition from many sources for investment opportunities in commercial properties net
leased to major corporations both domestically and internationally, there has been a decrease in such competition as a result of
the continued weakness in the credit and real estate financing markets. In general, we believe that our management’s experience
in real estate, credit underwriting and transaction structuring should allow us to compete effectively for commercial properties.
However, competitors may be willing to accept rates of return, lease terms, other transaction terms or levels of risk that we may
find unacceptable.

Environmental Matters

We and the CPA® REITs have invested, and expect to continue to invest, in properties currently or historically used as industrial,
manufacturing and commercial properties. Under various federal, state and local environmental laws and regulations, current and
former owners and operators of property may have liability for the cost of investigating, cleaning-up or disposing of hazardous
materials released at, on, under, in or from the property. These laws typically impose responsibility and liability without regard
to whether the owner or operator knew of or was responsible for the presence of hazardous materials or contamination, and
liability under these laws is often joint and several. Third parties may also make claims against owners or operators of properties
for personal injuries and property damage associated with releases of hazardous materials. As part of our efforts to mitigate these
risks, we typically engage third parties to perform assessments of potential environmental risks when evaluating a new
acquisition of property and we frequently obtain contractual protection (indemnities, cash reserves, letters of credit or other
instruments) from property sellers, tenants, a tenant’s parent company or another third party to address known or potential
environmental issues.

W. P. Carey 2009 10-K — 11

(d) Financial Information About Geographic Areas

See Our Portfolio above and the Segment Reporting footnote of the consolidated financial statements for financial data
pertaining to our geographic operations.

(e) Available Information

All filings we make with the SEC, including our Annual Report on Form 10-K, our quarterly reports on Form 10-Q and our
current reports on Form 8-K, and any amendments to those reports, are available for free on our website, www.wpcarey.com, as
soon as reasonably practicable after they are filed or furnished to the SEC. Our SEC filings are available to be read or copied at
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information regarding the operation of the
Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. Our filings can also be obtained for free on the
SEC’s Internet site at http://www.sec.gov. We are providing our website address solely for the information of investors. We do
not intend our website to be an active link or to otherwise incorporate the information contained on our website into this report or
other filings with the SEC. We will supply to any shareholder, upon written request and without charge, a copy of this Annual
Report on Form 10-K for the year ended December 31, 2009 as filed with the SEC. Generally, we also post the dates of our
upcoming scheduled financial press releases, telephonic investor calls and investor presentations on the Investor Relations
portion of our website at least ten days prior to the event. Our investor calls are open to the public and remain available on our
website for at least two weeks thereafter.

Item 1A. Risk Factors.

Our business, results of operations, financial condition and ability to pay distributions at the current rate could be materially
adversely affected by various risks and uncertainties, including the conditions below. These risk factors may have affected, and
in the future could affect, our actual operating and financial results and could cause such results to differ materially from those in
any forward-looking statements. You should not consider this list exhaustive. New risk factors emerge periodically, and we
cannot assure you that the factors described below list all material risks to us at any later time.

The current financial and economic crisis could adversely affect our business.

Although we believe we are seeing an easing of the global economic and financial crisis that has severely curbed liquidity in the
credit and real estate financing markets during recent periods, the full magnitude, effects and duration of the crisis cannot be
predicted. To date, its effects on our business have been somewhat limited, primarily in that it has been generally more difficult
to obtain financing for the sale-leaseback transactions we enter into on behalf of our managed funds and for refinancing of
maturing debt. In addition, a number of tenants, particularly in the portfolios of the CPA® REITs, have experienced increased
levels of financial distress, with several having filed for bankruptcy protection.

Depending on how long and how severe this crisis is, we could in the future experience a number of additional effects on our
business, including higher levels of default in the payment of rent by our tenants, additional bankruptcies and impairments in the
value of our property investments, as well as difficulties in refinancing existing loans as they come due. Any of these conditions
may negatively affect our earnings, as well as our cash flow and, consequently, our ability to sustain the payment of dividends at
current levels.

Our managed funds may also be adversely affected by these conditions, and their earnings or cash flow may also be adversely
affected by other events, such as increases in the value of the U.S. Dollar relative to other currencies in which they receive rent,
as well as the need to expend cash to fund increased redemptions. Additionally, the ability of CPA®:17 – Global to make new
investments will be affected by the availability of financing as well as its ability to raise new funds. Decreases in the value of the
assets held by the CPA® REITs will affect the asset management revenues payable to us, as well as the value of the stock we
hold in the CPA® REITs, and decreases in these funds’ earnings or ability to pay distributions may also affect their ability to
make the payments due to us, as well as our income and cash flow from CPA® REIT distribution payments.

Earnings from our investment management operations are subject to volatility.

Growth in revenue from our investment management operations is dependent in large part on future capital raising in existing or
future managed entities, as well as on our ability to make investments that meet the investment criteria of these entities, both of
which are subject to uncertainty, including with respect to capital market and real estate market conditions. This uncertainty
creates volatility in our earnings because of the resulting fluctuation in transaction-based revenue. Asset management revenue
may be affected by factors that include not only our ability to increase the CPA® REITs’ portfolio of properties under
management, but also changes in valuation of those properties, as well as sales of CPA® REIT properties. In addition, revenue
from our investment management operations, including our ability to earn performance revenue, as well as the value of our
holdings of CPA® REIT interests and dividend income from those interests, may be significantly affected by the results of
operations of the CPA® REITs. Each of the CPA® REITs has invested substantially all of its assets (other than short-term
investments) in triple-net leased properties substantially similar to those we hold, and consequently the results of operations of,
and cash available for distribution by, each of the CPA® REITs, is likely to be substantially affected by the same market
conditions, and subject to the same risk factors, as the properties we own. Four of the sixteen CPA® funds temporarily reduced
the rate of distributions to their investors as a result of adverse developments involving tenants.

W. P. Carey 2009 10-K — 12

Each of the CPA® REITs we currently manage may incur significant debt. This significant debt load could restrict their ability to
pay revenue owed to us when due, due to either liquidity problems or restrictive covenants contained in their borrowing
agreements. In addition, the revenue payable under each of our current investment advisory agreements is subject to a variable
annual cap based on a formula tied to the assets and income of that CPA® REIT. This cap may limit the growth of our
management revenue. Furthermore, our ability to earn revenue related to the disposition of properties is primarily tied to
providing liquidity events for CPA® REIT investors. Our ability to provide that liquidity, and to do so under circumstances that
will satisfy the applicable subordination requirements noted above in Item 1, Business — Other Revenue, will depend on market
conditions at the relevant time, which may vary considerably over a period of years. In any case, liquidity events typically occur
several years apart, and income from our investment management operations is likely to be significantly higher in those years in
which such events occur.

The inability of a tenant in a single tenant property to pay rent will reduce our revenues.

Most of our properties are occupied by a single tenant and, therefore, the success of our investments is materially dependent on
the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our
lease revenues. Our five largest tenants/guarantors represented approximately 33%, 31% and 29% of total lease revenues in
2009, 2008 and 2007, respectively. Lease payment defaults by tenants negatively impact our net income and reduce the amounts
available for distributions to shareholders. As our tenants generally may not have a recognized credit rating, they may have a
higher risk of lease defaults than if our tenants had a recognized credit rating. In addition, the bankruptcy of a tenant could cause
the loss of lease payments as well as an increase in the costs incurred to carry the property until it can be re-leased or sold. We
have had tenants file for bankruptcy protection. In the event of a default, we may experience delays in enforcing our rights as
landlord and may incur substantial costs in protecting the investment and re-leasing the property. If a lease is terminated, there is
no assurance that we will be able to re-lease the property for the rent previously received or sell the property without incurring a
loss.

A substantial amount of our leases will expire within the next three years, and we may have difficulty in re-leasing or
selling our properties if tenants do not renew their leases.

Within the next three years, approximately 40% of our leases are due to expire. If these leases are not renewed, or if the
properties cannot be re-leased on terms that yield payments comparable to those currently being received, then our lease
revenues could be substantially adversely affected. The terms of any new or renewed leases of these properties may depend on
market conditions prevailing at the time of lease expiration. In addition, if properties are vacated by the current tenants, we may
incur substantial costs in attempting to re-lease such properties. We may also seek to sell these properties, in which event we
may incur losses, depending upon market conditions prevailing at the time of sale.

Real estate investments generally lack liquidity compared to other financial assets, and this lack of liquidity will limit our ability
to quickly change our portfolio in response to changes in economic or other conditions. Some of our net leases are for properties
that are specially suited to the particular needs of the tenant. With these properties, we may be required to renovate the property
or to make rent concessions in order to lease the property to another tenant. In addition, if we are forced to sell the property, we
may have difficulty selling it to a party other than the tenant due to the special purpose for which the property may have been
designed. These and other limitations may affect our ability to re-lease or sell properties without adversely affecting returns to
shareholders.

We may recognize substantial impairment charges on our properties.

Historically, we have incurred substantial impairment charges, which we are required to recognize whenever we sell a property
for less than its carrying value or we determine that the property has experienced an other-than-temporary decline in its carrying
value (or, for direct financing leases, that the unguaranteed residual value of the underlying property has declined). By their
nature, the timing or extent of impairment charges are not predictable. We may incur impairment charges in the future, which
may reduce our net income, although it will not necessarily affect our cash flow from operations.

The revenue streams from the investment advisory agreements with the CPA® REITs are subject to limitation or
cancellation.

The agreements under which we provide investment advisory services may generally be terminated by each CPA® REIT upon
60 days’ notice, with or without cause. There can be no assurance that these agreements will not be terminated. A termination
without cause may, however, entitle us to termination revenue, equal to 15% of the amount by which the net fair value of the
relevant CPA® REIT’s assets exceeds the remaining amount necessary to provide investors with total distributions equal to their
investment plus a preferred return. For CPA®:17 – Global, it has the right, but not the obligation, upon certain terminations to
repurchase our interests in its operating partnership at fair market value. If such right is not exercised, we would remain as a
limited partner of the operating partnership. Nonetheless, any such termination could have a material adverse effect on our
business, results of operations and financial condition.

W. P. Carey 2009 10-K — 13

Changes in investor preferences or market conditions could limit our ability to raise funds or make new investments.

Substantially all of our and the CPA® REITs’ current investments, as well as the majority of the investments we expect to
originate for the CPA® REITs in the near term, are investments in single-tenant commercial properties that are subject to triple-
net leases. In addition, we have relied predominantly on raising funds from individual investors through the sale by participating
selected dealers to their customers of publicly-registered, non-traded securities of the CPA® REITs. Although we have increased
the number of broker dealers we use for fund raising, the majority of our fund raising efforts have been through one major
selected dealer. If, as a result of changes in market receptivity to investments that are not readily liquid and involve high selected
dealer fees, or for other reasons, this capital raising method were to become less available as a source of capital, our ability to
raise funds for CPA® REIT programs, and consequently our ability to make investments on their behalf, could be adversely
affected. While we are not limited to this particular method of raising funds for investment (and, among other things, the CPA®
REITs may themselves be able to borrow additional funds to invest), our experience with other means of raising capital is
limited. Also, many factors, including changes in tax laws or accounting rules, may make these types of investments less
attractive to potential sellers and lessees, which could negatively affect our ability to increase the amount of assets of this type
under management.

Our use of debt to finance investments could adversely affect our cash flow.

Most of our investments are made by borrowing a portion of the total investment and securing the loan with a mortgage on the
property. If we are unable to make our debt payments as required, a lender could foreclose on the property or properties securing
its debt. This could cause us to lose part or all of our investment, which in turn could cause the value of our portfolio, and
revenues available for distribution to our shareholders, to be reduced. We generally borrow on a non- recourse basis to limit our
exposure on any property to the amount of equity invested in the property.

Some of our financing may also require us to make a lump-sum or “balloon” payment at maturity. Our ability to make balloon
payments on debt will depend upon our ability either to refinance the obligation when due, invest additional equity in the
property or to sell the related property. When the balloon payment is due, we may be unable to refinance the balloon payment on
terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. Our ability to
accomplish these goals will be affected by various factors existing at the relevant time, such as the state of the national and
regional economies, local real estate conditions, available mortgage rates, our equity in the mortgaged properties, our financial
condition, the operating history of the mortgaged properties and tax laws. A refinancing or sale could affect the rate of return to
shareholders.

We face active competition.

In raising funds for investment by the CPA® REITs, we face competition from other funds with similar investment objectives
that seek to raise funds from investors through publicly registered, non-traded funds, publicly-traded funds and private funds.
This competition could adversely affect our ability to make acquisitions and to raise funds for future investments, which in turn
could ultimately reduce, or limit the growth of, revenues from our investment management operations.

As a result of the continued weakness in the credit and real estate financing markets, we believe there has been a recent decrease
in the level of competition for the acquisition of office and industrial properties net leased to major corporations both
domestically and internationally. Historically, however, we have faced active competition from many sources, including
insurance companies, credit companies, pension funds, private individuals, financial institutions, finance companies and
investment companies, among others. These institutions may accept greater risk or lower returns, allowing them to offer more
attractive terms to prospective tenants. In addition, our evaluation of the acceptability of rates of return on behalf of the CPA®
REITs is affected by such factors as the cost of raising capital, the amount of revenue we can earn and the performance hurdle
rates of the relevant CPA® REITs. Thus, the effect of the cost of raising capital and the revenue we can earn may be to limit the
amount of new investments we make on behalf of the CPA® REITs, which will in turn limit the growth of revenues from our
investment management operations.

Our leases may permit tenants to purchase a property at a predetermined price, which could limit our realization of any
appreciation or result in a loss.

In some circumstances, we grant tenants a right to repurchase the property they lease from us. The purchase price may be a fixed
price or it may be based on a formula or the market value at the time of exercise. If a tenant exercises its right to purchase the
property and the property’s market value has increased beyond that price, we could be limited in fully realizing the appreciation
on that property. Additionally, if the price at which the tenant can purchase the property is less than our purchase price or
carrying value (for example, where the purchase price is based on an appraised value), we may incur a loss.

W. P. Carey 2009 10-K — 14

International investments involve additional risks.

We have invested in and may continue to invest in properties located outside the U.S. These investments may be affected by
factors particular to the laws of the jurisdiction in which the property is located. These investments may expose us to risks that
are different from and in addition to those commonly found in the U.S., including:

•

Foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar;

Changing governmental rules and policies;

Enactment of laws relating to the foreign ownership of property and laws relating to the ability of foreign entities to

remove invested capital or profits earned from activities within the country to the United States;

Expropriation;

Legal systems under which the ability to enforce contractual rights and remedies may be more limited than would be

the case under U.S. law;

The difficulty in conforming obligations in other countries and the burden of complying with a wide variety of foreign

laws;

Adverse market conditions caused by changes in national or local economic or political conditions;

Tax requirements vary by country and we may be subject to additional taxes as a result of our international

investments;

Changes in relative interest rates;

Changes in the availability, cost and terms of mortgage funds resulting from varying national economic policies;

Changes in real estate and other tax rates and other operating expenses in particular countries;

Changes in land use and zoning laws; and

More stringent environmental laws or changes in such laws.

In addition, the lack of available information in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) could impair our ability to analyze transactions and may cause us to forego an investment opportunity. It
may also impair our ability to receive timely and accurate financial information from tenants necessary to meet our reporting
obligations to financial institutions or governmental or regulatory agencies.

Also, we may rely on third-party asset managers in international jurisdictions to monitor compliance with legal requirements and
lending agreements with respect to properties we own or manage on behalf of the CPA® REITs. Failure to comply with
applicable requirements may expose us or our operating subsidiaries to additional liabilities.

We do not fully control the management of our properties.

The tenants or managers of net lease properties are responsible for maintenance and other day-to-day management of the
properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur
expenses for deferred maintenance expenditures or other liabilities once the property becomes free of the lease. While our leases
generally provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely
to defer maintenance and it may be more difficult to enforce remedies against such a tenant. In addition, to the extent tenants are
unable to conduct their operation of the property on a financially successful basis, their ability to pay rent may be adversely
affected. Although we endeavor to monitor, on an ongoing basis, compliance by tenants with their lease obligations and other
factors that could affect the financial performance of our properties, such monitoring may not in all circumstances ascertain or
forestall deterioration either in the condition of a property or the financial circumstances of a tenant.

We are subject to possible liabilities relating to environmental matters.

We own commercial properties and are subject to the risk of liabilities under federal, state and local environmental laws. These
responsibilities and liabilities also exist for properties owned by the CPA® REITs and if they become liable for these costs, their
ability to pay for our services could be materially affected. Some of these laws could impose the following on us:

•

Responsibility and liability for the cost of investigation and removal or remediation of hazardous substances released
on our property, generally without regard to our knowledge of or responsibility for the presence of the contaminants;

Liability for the costs of investigation and removal or remediation of hazardous substances at disposal facilities for

persons who arrange for the disposal or treatment of such substances;

Potential liability for common law claims by third parties based on damages and costs of environmental contaminants;

and

Claims being made against us by the CPA® REITs for inadequate due diligence.

Our costs of investigation, remediation or removal of hazardous or toxic substances, or for third-party claims for damages, may
be substantial. The presence of hazardous or toxic substances at any of our properties, or the failure to properly remediate a
contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination or
otherwise adversely affect our ability to sell or lease the property or to borrow using the property as collateral. While we attempt
to mitigate identified environmental risks by contractually requiring tenants to acknowledge their responsibility for complying
with environmental laws and to assume liability for environmental matters, circumstances may arise in which a tenant fails, or is
unable, to fulfill its contractual obligations. In addition, environmental liabilities, or costs or operating limitations imposed on a
tenant to comply with environmental laws, could affect its ability to make rental payments to us. Also, and although we endeavor
to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with
indemnification against potential environmental liabilities.

W. P. Carey 2009 10-K — 15

Our portfolio growth is constrained by our obligations to offer property transactions to the CPA® REITs.

Under our investment advisory agreements with the CPA® REITs, we are required to use our best efforts to present a continuing
and suitable investment program to them. In recent years, new property investment opportunities have generally been made
available by us to the CPA® REITs. While the allocation of new investments to the CPA® REITs fulfills our duty to present a
continuing and suitable investment program and enhances the revenues from our investment management operations, it also
restricts the potential growth of revenues from our real estate ownership and our ability to diversity our portfolio.

A potential change in U.S. accounting standards regarding operating leases may make the leasing of facilities less
attractive to our potential tenants, which could reduce overall demand for our leasing services.

Under current authoritative accounting guidance for leases, a lease is classified by a tenant as a capital lease if the significant
risks and rewards of ownership are considered to reside with the tenant. This situation is considered to be met if, among other
things, the non-cancellable lease term is more than 75% of the useful life of the asset or if the present value of the minimum
lease payments equals 90% or more of the leased property’s fair value. Under capital lease accounting for a tenant, both the
leased asset and liability are reflected on their balance sheet. If the lease does not meet any of the criteria for a capital lease, the
lease is considered an operating lease by the tenant and the obligation does not appear on the tenant’s balance sheet; rather, the
contractual future minimum payment obligations are only disclosed in the footnotes thereto. Thus, entering into an operating
lease can appear to enhance a tenant’s balance sheet in comparison to direct ownership. In response to concerns caused by a 2005
SEC study that the current model does not have sufficient transparency, the Financial Accounting Standards Board (the “FASB”)
and the International Accounting Standards Board conducted a joint project to re-evaluate lease accounting. In March 2009, the
FASB issued a discussion paper providing its preliminary views that the scope of the proposed new standard should be based on
the scope of the existing standards. Changes to the accounting guidance could affect both our accounting for leases as well as
that of our current and potential customers. These changes may affect how the real estate leasing business is conducted both
domestically and internationally. For example, if the accounting standards regarding the financial statement classification of
operating leases are revised, then companies may be less willing to enter into leases in general or desire to enter into leases with
shorter terms because the apparent benefits to their balance sheets could be reduced or eliminated. This in turn could make it
more difficult for us to enter leases on terms we find favorable.

The value of our real estate is subject to fluctuation.

We are subject to all of the general risks associated with the ownership of real estate. While the revenues from our leases and
those of the CPA® REITs are not directly dependent upon the value of the real estate owned, significant declines in real estate
values could adversely affect us in many ways, including a decline in the residual values of properties at lease expiration;
possible lease abandonments by tenants; a decline in the attractiveness of REIT investments that may impede our ability to raise
new funds for investment by CPA® REITs and a decline in the attractiveness of triple-net lease transactions to potential sellers.
We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and debt service payments
on indebtedness we incur. General risks associated with the ownership of real estate include:

•

Adverse changes in general or local economic conditions,

Changes in the supply of or demand for similar or competing properties,

Changes in interest rates and operating expenses,

Competition for tenants,

Changes in market rental rates,

Inability to lease or sell properties upon termination of existing leases,

Renewal of leases at lower rental rates,

Inability to collect rents from tenants due to financial hardship, including bankruptcy,

Changes in tax, real estate, zoning and environmental laws that may have an adverse impact upon the value of real

estate,

Uninsured property liability, property damage or casualty losses,

Unexpected expenditures for capital improvements or to bring properties into compliance with applicable federal, state

and local laws, and

Acts of God and other factors beyond the control of our management.

We depend on key personnel for our future success.

We depend on the efforts of our executive officers and key employees. The loss of the services of these executive officers and
key employees could have a material adverse effect on our operations.

W. P. Carey 2009 10-K — 16

Our governing documents and capital structure may discourage a takeover.

Wm. Polk Carey, Chairman, is the beneficial owner of approximately 30% of our outstanding shares. The provisions of our
Amended and Restated Limited Liability Company Agreement and the share ownership of Mr. Carey may discourage a tender
offer for our shares or a hostile takeover, even though these may be attractive to shareholders.

Proposed legislation may prevent us from qualifying for treatment as a partnership for U.S. federal income tax purposes,
which may significantly increase our tax liability and may affect the market value of our shares.

Members of the United States Congress have introduced legislation that would, if enacted, preclude us from qualifying for
treatment as a partnership for U.S. federal income tax purposes under the publicly traded partnership rules. If this or any similar
legislation or regulation were to be enacted and to apply to us, we would incur a material increase in our tax liability and the
market value of our shares could decline materially.

Item 1B. Unresolved Staff Comments.

None.

Item 2.

Properties.

Our principal corporate offices are located at 50 Rockefeller Plaza, New York, NY 10020 and our primary international
investment offices are located in London and Amsterdam. We also have office space domestically in Dallas, Texas and San
Francisco, California and internationally in Shanghai. We lease all of these offices and believe these leases are suitable for our
operations for the foreseeable future.

See Item 1, Business — Our Portfolio for a discussion of the properties we hold for rental operations and Part II, Item 8,
Financial Statements and Supplemental Data – Schedule III — Real Estate and Accumulated Depreciation for a detailed listing
of such properties.

Item 3.

Legal Proceedings.

At December 31, 2009, we were not involved in any material litigation.

Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are
not expected to have a material adverse effect on our consolidated financial position or results of operations.

Item 4.

Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2009.

W. P. Carey 2009 10-K — 17

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

PART II

Securities.

Listed Shares and Distributions

Our common stock is listed on the New York Stock Exchange under the ticker symbol “WPC.” At December 31, 2009 there
were 24,958 holders of record of our common stock. The following table shows the high and low prices per share and quarterly
cash distributions declared for the past two fiscal years:

Period
First quarter
Second quarter
Third quarter
Fourth quarter

2009

High
24.00
29.89
30.67
29.80

Low

16.15
19.75
22.50
25.50

Cash
Distributions
Declared

0.496
0.498
0.500
0.502(a)

2008

Cash

Distributions

High

34.62
33.97
31.08
27.05

Low
25.79
27.67
23.44
16.50

Declared

0.482
0.487
0.492
0.494

(a) Excludes a special distribution of $0.30 per share that was paid in January 2010 to shareholders of record at December 31,
2009. The special distribution was approved by our board of directors as a result of an increase in our 2009 taxable income.

Our line of credit contains covenants that restrict the amount of distributions that we can pay.

Stock Price Performance Graph

The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period
December 31, 2004 to December 31, 2009 compared with the S&P 500 Index and the FTSE NAREIT Equity Index. The graph
assumes a $100 investment on December 31, 2004, together with the reinvestment of all dividends.

W. P. Carey & Co. LLC
S&P 500
FTSE NAREIT Equity

12/04
100.00
100.00
100.00

12/05
76.94
104.91
112.16

12/06
97.47
121.48
151.49

12/07
114.96
128.16
127.72

12/08
87.25
80.74
79.53

12/09
112.50
102.11
101.79

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

W. P. Carey 2009 10-K — 18

Item 6.

Selected Financial Data.

The following selected financial data should be read in conjunction with the consolidated financial statements and related notes
in Item 8. (In thousands, except per share data)

Operating Data (a)

2009

Years ended December 31,
2007

2008

2006

2005

Revenues from continuing operations (b)

$ 235,876

$ 238,624

$ 257,956

$ 261,764 $ 157,610

Income from continuing operations

60,435

71,749

70,392

82,269

41,793

Net income

Add: Net loss (income) attributable to

noncontrolling interests

Less: Net income attributable to redeemable

noncontrolling interests

Net income attributable to W. P. Carey members

70,568

78,605

88,789

87,115

48,868

713

950

(4,781)

220

1,197

(2,258)
69,023

(1,508)
78,047

(4,756)
79,252

(1,032)
86,303

(1,461)
48,604

Basic Earnings Per Share:
Income from continuing operations attributable W. P.

Carey members

Net income attributable to W. P. Carey members

Diluted Earnings Per Share:
Income from continuing operations attributable W. P.

Carey members

Net income attributable to W. P. Carey members
Cash distributions declared per share

Balance Sheet Data

Net investments in real estate (d)
Total assets
Long-term obligations (e)

Other Information

Cash provided by operating activities
Cash distributions paid
Payment of mortgage principal (f)

1.48
1.74

1.82
2.00

1.74
2.08

2.18
2.29

1.10
1.29

1.49
1.74
2.00(c)

1.80
1.97
1.96

1.71
2.05
1.88(c)

2.11
2.22
1.82

1.06
1.25
1.79

$ 884,460
1,093,336
326,330

$ 918,741
1,111,136

326,874

$ 918,734
1,153,284
316,751

$ 850,107 $ 747,700
983,262
247,298

1,093,010
279,314

74,544
78,618
9,534

63,247
87,700
9,678

47,471
71,608
16,072

$ 119,940 $ 52,707
67,004
9,229

68,615
11,742

(a) Certain prior year amounts have been reclassified from continuing operations to discontinued operations as well as

retrospectively adjusted to reflect the adoption of several accounting pronouncements during 2009.

(b) For 2007, includes revenue earned in connection with CPA®:16 – Global meeting its performance criterion, and for 2006,

includes revenue earned in connection with a CPA® REIT merger transaction.

(c) Excludes special distributions of $0.30 per share and $0.27 per share paid in January 2010 and January 2008 to shareholders

of record at December 31, 2009 and December 31, 2007, respectively.

(d) Net investments in real estate consists of net investments in properties, net investment in direct financing leases, equity

investments in real estate and CPA® REITs and assets held for sale, as applicable.

(e) Represents mortgage and note obligations.
(f) Represents scheduled mortgage principal payment.

W. P. Carey 2009 10-K — 19

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s discussion and analysis of financial condition and results of operations (“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. The discussion also provides
information about the financial results of the segments of our business to provide a better understanding of how these segments
and their results affect our financial condition and results of operations.

Business Overview

As described in more detail in Item 1 of this Report, we operate in two operating segments, investment management and real
estate ownership. Within our investment management segment, we are currently the advisor to the following affiliated publicly-
owned, non-actively traded real estate investment trusts: CPA®:14, CPA®:15, CPA®:16 – Global and CPA®:17 – Global.

Financial Highlights
(in thousands)

Total revenue (excluding reimbursed costs from affiliates)
Net income attributable to W. P. Carey members
Cash flow from operating activities

2009
187,161

Years ended December 31,
2008
197,445
78,047
63,247

69,023
74,544

2007
244,174
79,252
47,471

Total revenue decreased in 2009 as compared to 2008, primarily due to recent tenant activities including lease restructurings and
the reclassification of a property to an equity investment in real estate during 2009 within our real estate ownership segment. In
addition, revenue from this segment in 2008 included a $6.5 million lease termination fee.

The reduction in Net income in 2009 as compared to 2008 was primarily due to an increase in the amount of impairment charges
taken in 2009. We recognized impairment charges totaling $10.4 million in 2009 in our real estate ownership segment compared
to impairments of $1.0 million in 2008. We were also impacted by an increase in the level of impairments taken by the CPA®
REITs, which are reflected in our investment management segment.

Cash flow in 2009 benefited from our election to receive more of the fees we earn from certain of the CPA® REITs in cash
instead of their common stock, our receipt of distributions of available cash from CPA®:17 – Global and more efficient tax
strategies. In addition, cash flow in 2008 was affected both by the receipt in January 2008 of $28.3 million of previously deferred
revenue from CPA®:16 – Global, which had been recognized when CPA®:16 – Global met its performance criterion in 2007, and
by the payment of $30.0 million related to a previously disclosed settlement with the SEC, described below.

Factors Affecting Comparability

Certain events have occurred over the past few years that affect comparability of our results of operations for the periods
presented in this Report. These events, described below, significantly impacted the results of operations of our investment
management segment for the year ended December 31, 2007 and as such make it difficult to compare 2007 with future periods.

Under the terms of our advisory agreement with CPA®:16 – Global, certain revenues were to be deferred and were not payable to
us until CPA®:16 – Global met an agreed-upon performance criterion. In June 2007, CPA®:16 – Global met its performance
criterion, and as a result, we recognized previously deferred revenue totaling $45.9 million (consisting of asset management
revenue of $11.9 million, structuring revenue of $31.7 million and interest income on the previously deferred structuring revenue
of $2.3 million). Net income recognized in connection with CPA®:16 – Global achieving its performance criterion totaled
$21.6 million in 2007. In addition, as a result of CPA®:16 – Global meeting its performance criterion, we recognized and paid to
certain employees incentive and commission compensation of $6.6 million that had previously been deferred.

In March 2008, we entered into a settlement with the SEC with respect to all matters relating to a previously disclosed
investigation (the “SEC Settlement”). In connection with this settlement, we made payments of $20.0 million, including interest,
to certain of our managed REITs and paid a $10.0 million civil penalty. In anticipation of this settlement, we took a charge of
$30.0 million in the fourth quarter of 2007 and recognized an offsetting $9.0 million tax benefit in the same period, which had a
negative impact on the results of our investment management segment for the year ended December 31, 2007.

W. P. Carey 2009 10-K — 20

Current Trends

As of the date of this Report, we believe we are seeing an easing of the global economic and financial crisis that has severely
curbed liquidity in the credit and real estate financing markets during recent periods, although the full magnitude, effects and
duration of the crisis cannot be predicted. As a result of improving economic conditions, we have seen some positive trends
affecting both our business as well as the CPA® REITs, including: an increase in investment opportunities; improving financing
conditions for new transactions and refinancing of maturing debt, both domestically and internationally; and continued
improvement of capital fundraising for CPA®:17 – Global. However, the lingering effects of the challenging economic
environment have also resulted in some negative trends affecting both our business as well as the CPA® REITs. These trends
include: continued tenant defaults, particularly in the portfolios of the CPA® REITs; renewals of tenant leases generally at lower
rental rates than existing leases; and low inflation rates, which will likely limit rent increases in upcoming periods because most
of our leases provide for rent adjustments indexed to changes in the CPI. Despite recent indicators that the economy is beginning
to recover, the current trends that affect our business segments remain dependent on the rate and scope of the recovery, rendering
any discussion of the impact of these trends highly uncertain. Nevertheless, as of the date of this Report, the impact of current
financial and economic trends on our business segments, and our response to those trends, is presented below.

Investment Opportunities

We earn structuring revenue on the investment transactions we structure on behalf of the CPA® REITs. Our ability to complete
these investments, and thereby to earn structuring revenue, fluctuates based on the pricing of transactions and the availability of
financing for our investments, among other factors. During 2009, pricing on sale-leaseback investment opportunities generally
became more attractive, and we expect continued attractive pricing to continue in 2010 if economic conditions continue to
improve. We believe that our sale-leaseback transactions can be an attractive alternative source of financing for corporations that
have difficulty obtaining financing through traditional channels, and we are seeing increased demand for our services. We were
able to achieve financing on many of the investments structured on behalf of the CPA® REITs during 2009 and, when financing
was unavailable, we were able to achieve desired returns that allowed us to structure transactions on behalf of the CPA® REITs
without financing. In addition, due to the recent volatility in the investment environment, we believe we are benefiting from a
decreased level of competition for the investments we make on behalf of the CPA® REITs, both domestically and internationally.

During 2009, we structured investments totaling $547.7 million, including a transaction with The New York Times Company
totaling $233.7 million. This 2009 investment activity consists of investments structured on behalf of the CPA® REITs totaling
$507.7 million and our contribution of $40.0 million in the New York Times transaction. International investments comprised
36% of our total investments during 2009, as compared to 46% during 2008. We currently expect that international transactions
will continue to form a significant portion of the investments we structure, although the percentage of international investments
in any given period may vary.

Financing Conditions

Conditions in the real estate financing markets impact our ability to structure investments on behalf of the CPA® REITs and to
refinance maturing debt. Despite the recent weak financing environment, which has resulted in lenders for both domestic and
international investments offering loans at shorter maturities and subject to variable interest rates, we have begun to see some
improvements in the financing markets and to date have been successful refinancing maturing debt and obtaining financing for
new transactions. We generally attempt to obtain interest rate caps or swaps to mitigate the impact of variable rate financing.
During 2009, we obtained mortgage financing totaling $297.0 million on behalf of the CPA® REITs, including financing for new
transactions and refinancing of maturing debt, with a weighted annual average interest rate and term of up to 7.6% and 6.6 years,
respectively. In addition, we also obtained mortgage financing totaling $61.5 million for our own real estate portfolio, including
our share of financing for the New York Times transaction and refinancing of maturing debt, with a weighted average annual
interest rate and term of up to 7.8% and 7.0 years, respectively.

At December 31, 2009, the CPA® REITs had aggregate balloon payments totaling $101.4 million due in 2010 and $319.3 million
in 2011, while we had balloon payments totaling $11.6 million that will be due during 2010 and $47.2 million that will be due
during 2011, including our share of balloon payments related to unconsolidated ventures totaling $24.9 million in 2011. We are
actively seeking to refinance this debt but believe we and the CPA® REITs have sufficient financing alternatives and/or cash
resources to make these payments, if necessary. In both our own portfolio and those of the CPA® REITs, property level debt is
generally non-recourse, which means that if we or any of the CPA® REITs default on a mortgage loan obligation, our exposure is
limited to our equity invested in that property (see Corporate Defaults below). We also have a line of credit that expires in 2011
and that can be extended for one year, subject to satisfying certain conditions. Amounts outstanding under this line totaled
$111.0 million at December 31, 2009.

W. P. Carey 2009 10-K — 21

Corporate Defaults

Some of the tenants in our own portfolio and the CPA® REIT portfolios have experienced financial stress, and we expect that this
trend may continue, albeit at a less severe rate, in 2010. In our own real estate portfolio, corporate defaults can reduce our results
of operations and cash flow from operations. Tenant defaults in the CPA® REIT portfolios can reduce our asset management
revenue if they lead to a decline in the net asset values of the CPA® REITs, and can also reduce our income from equity
investments in the CPA® REITs.

Tenants in financial distress may become delinquent on their rent and/or default on their leases and, if they file for bankruptcy
protection, may reject our lease in bankruptcy court, all of which may require us or the CPA® REITs to incur impairment
charges. Even where a default has not occurred and a tenant is continuing to make the required lease payments, we may
restructure or renew leases on less favorable terms, or the tenant’s credit profile may deteriorate, which could affect the value of
the leased asset and could in turn require us or the CPA® REITs to incur impairment charges. Based on tenant activity during
2009, including lease amendments, early lease renewals and lease rejections in bankruptcy court, we currently expect that 2010
lease revenue will decrease by approximately 7% in our own portfolio and by approximately 4% in the CPA® REITs on an
annualized basis, as compared with 2009 lease revenue. However, this amount may increase or decrease based on additional
tenant activities and changes in economic conditions, both of which are outside of our control. If the North American and
European economic zones continue to experience the improving economic conditions that they have experienced recently, we
would expect to see an improvement in the general business conditions for our tenants, which should result in less stress for them
financially. However, if economic conditions deteriorate, it is likely that our tenants’ financial condition will deteriorate as well.

We have no significant exposure to tenants operating under bankruptcy protection in our own portfolio as of the date of this
Report. However, the CPA® REITs have experienced increased levels of corporate defaults recently. During 2009, tenants
accounting for less than 2.0% of aggregate annualized lease revenues of the CPA® REITs entered into bankruptcy/administration.
As a result of several of these corporate defaults, during 2009 the CPA® REITs suspended debt service on six non-recourse
mortgage loans with an aggregate outstanding balance of $83.3 million, or approximately 2% of the aggregate outstanding non-
recourse debt of the CPA® REITs, and suspended debt service and subsequently turned over to the lenders several properties that
had been collateralized by two additional non-recourse mortgage loans with an aggregate outstanding balance of $27.7 million.
During 2009, we recorded impairment charges on our own portfolio totaling $10.4 million and we currently estimate that the
CPA® REITs will record impairment charges aggregating approximately $170 million. As a result of the CPA® REIT impairment
charges, our income from equity investments in the CPA® REITs declined by $11.5 million for 2009. Impairment charges do not
necessarily reflect the true economic loss caused by the default of a tenant. The economic loss may be greater or less than the
impairment amount.

To mitigate these risks, we have invested in assets that we believe are critically important to a tenant’s operations and have
attempted to diversify the fully invested portfolios by tenant and tenant industry. We also monitor tenant performance through
review of rent delinquencies as a precursor to a potential default, meetings with tenant management and review of tenants’
financial statements and compliance with any financial covenants. When necessary, our asset management process includes
restructuring transactions to meet the evolving needs of tenants, re-leasing properties, refinancing debt and selling properties,
where possible, as well as protecting our rights when tenants default or enter into bankruptcy.

Fundraising

We are currently fundraising for CPA®:17 – Global. While fundraising trends are difficult to predict, our recent fundraising has
continued to strengthen. We generally experienced increases in our month over month fundraising results in 2009 and raised
$141.5 million for CPA®:17 – Global’s initial public offering in the fourth quarter of 2009, which represented an increase of
98%, 41% and 14% over the first, second and third quarters of 2009, respectively. Since beginning fundraising for CPA®:17 –
Global in December 2007, we have raised more than $850 million on its behalf through the date of this Report. We have made a
concerted effort to broaden our distribution channels and are beginning to see a greater portion of our fundraising come from
multiple channels as a result of these efforts. We expect these trends to continue in 2010.

Net Asset Values of the CPA® REITs

We own shares in the CPA® REITs and earn asset management revenue based on a percentage of average invested assets for
each CPA® REIT. As such, we benefit from rising investment values and are negatively impacted when these values decrease.
As a result of market conditions deteriorating during 2008, asset values declined across all asset types, and the estimated net
asset valuations for CPA®:14, CPA®:15 and CPA®:16 – Global at December 31, 2008 declined as well, which negatively
impacted our asset management revenue during 2009. Based on the overall continued weakness in the economy during 2009, we
currently expect that estimated net asset valuations for CPA®:14, CPA®:15 and CPA®:16 – Global at December 31, 2009 will be
down slightly.

W. P. Carey 2009 10-K — 22

The estimated net asset valuations of the CPA® REITs are based on a number of variables, including individual tenant credits,
tenant defaults, lease terms, lending credit spreads, and foreign currency exchange rates, among other variables. We do not
control these variables and, as such, cannot predict how these variables will change in the future.

Redemptions and Distributions of the CPA® REITs

During 2008 and 2009, CPA®:14, CPA®:15 and, to a lesser extent, CPA®:16 – Global and CPA®:17 – Global experienced higher
levels of share redemptions. The redemption plan for each of the CPA® REITs provides for certain limits on the amount of
redemptions, including that redemptions cannot exceed 5% of outstanding shares. As a result of these increased redemption
levels, the redemption plans of CPA®:14 and CPA®:15 were either nearing or had reached the 5% limitation, and as a result their
boards of directors approved the suspension of their respective redemption plans. These suspensions will remain in effect until
the boards of directors of CPA®:14 and CPA®:15, in their discretion, determine to reinstate the redemption plans. In addition, for
the fourth quarter of 2009, CPA®:16 – Global and CPA®:17 – Global did not increase their quarterly distribution from the
distribution paid in the third quarter. As a result of these events, the CPA® REITs have conserved cash. To date, the CPA®
REITs have not experienced conditions that have affected their ability to continue to pay distributions, and we currently
anticipate that the CPA® REITs will continue to maintain adequate distribution coverage.

Lease Expirations

We actively manage our own real estate portfolio and begin discussing options with tenants generally three years in advance of
the scheduled lease expiration. In certain cases, we obtain lease renewals from our tenants. However, tenants may exercise
purchase options rather than renew their leases, while in other cases we may seek replacement tenants or sell the property. As of
the date of this Report, a significant amount of the leases in our own portfolio expire between 2010 and 2012. Based on
annualized contractual lease revenue, 15% of the leases on our consolidated real estate investments will expire in 2010, 15% will
expire in 2011 and 10% will expire in 2012. We currently expect that most of our leases due to expire in 2010 will be renewed
by our tenants, on what we believe are generally competitive terms given current market conditions. We expect that the leases
will be renewed mostly with the existing tenants, which will allow us to avoid downtime, paying operating costs and paying for
tenant improvements in most cases. On the other hand, we expect that a majority of the leases that are being renewed during
2010 will be at rents that are below the tenants’ existing contractual rent. Based on tenant activity during 2009, including lease
amendments and early lease renewals, we currently expect lease revenue from our consolidated real estate investments in 2010 to
decrease by approximately 7% on an annualized basis. In addition, two of our largest equity investments in real estate based on
lease revenue, Carrefour France, SAS and Medica-France, S.A., were renewed early at a combined 19% reduction on an
annualized basis. We own a 46% interest in these investments. Lease expirations may also affect the cash flow of certain of the
CPA® REITs, particularly CPA®:14 and CPA®:15.

Inflation and Foreign Exchange Rates

Our leases and those of the CPA® REITs generally have rent adjustments based on formulas indexed to changes in the CPI or
other similar indices for the jurisdiction in which the property is located. Because these rent adjustments may be calculated based
on changes in the CPI over a multi-year period, changes in inflation rates can have a delayed impact on our results of operations.
Rent adjustments during 2008 and 2009 have generally benefited from increases in inflation rates during the years prior to the
scheduled rent adjustment date. However, we expect that rent increases in our own portfolio and in the CPA® REITs will be
significantly lower in coming years as a result of the current historically low inflation rates in the U.S. and the Euro zone.

We have foreign investments and as a result are subject to risk from the effects of exchange rate movements. Our results of
foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar relative to foreign
currencies. During recent months, the U.S. dollar has not fluctuated significantly against the Euro. To the extent foreign currency
exchange rates remain stable, they will have a minimal impact on our financial conditions and results of operations. However,
significant shifts in the value of the Euro could have a material impact on our future results and, especially, on the future results
and cash flows of the CPA® REITs, which have higher levels of international investments.

The average rate for the U.S. dollar in relation to the Euro strengthened by approximately 5% during 2009 in comparison to
2008, resulting in a modestly negative impact on our results of operations for Euro-denominated investments in the current year.
For 2008 as compared with 2007, the average rate for the U.S. dollar in relation to the Euro weakened by approximately 7%,
resulting in a modestly positive impact on our results of operations for Euro-denominated investments in 2008 as compared with
2007. Investments denominated in the Euro accounted for approximately 11% of our annualized lease revenues for 2009 and 9%
of our annualized lease revenues for both 2008 and 2007, and 29%, 30% and 31% of aggregate lease revenues for the CPA®
REITs for 2009, 2008 and 2007, respectively.

W. P. Carey 2009 10-K — 23

W. P. Carey International Transaction

W. P. Carey International LLC (“WPCI”) is a subsidiary company that structures net lease transactions on behalf of the CPA®
REITs outside of the U.S. After exercising certain option rights in 2008, two officers of WPCI held interests totaling
approximately 23% in WPCI. In December 2009, one of those officers resigned from W. P. Carey, WPCI, and all affiliated
entities pursuant to a mutually agreed separation. As part of this separation, we effected the purchase of all of the interests in
WPCI and these related entities held by that officer for cash, at a negotiated fair market value of $15.4 million. The remaining
officer currently has an approximately 7.7% interest in each of WPCI and the related entities (Note 14).

Carey Storage Activity

In January 2009, Carey Storage completed a transaction whereby it received cash proceeds of $21.9 million, plus a commitment
to invest up to a further $8.1 million of equity, from a third party to fund the purchase of self-storage assets in the future in
exchange for a 60% interest in its self storage portfolio. Carey Storage incurred transaction-related costs totaling approximately
$1.0 million in connection with this transaction. Because we have an option to repurchase this interest at fair value, we account
for this transaction under the profit sharing method.

In connection with this transaction, Carey Storage repaid, in full, the $35.0 million outstanding balance on its secured credit
facility at a discount for $28.0 million, terminated the facility, and recognized a gain of $7.0 million on the repayment of this
debt, inclusive of the third party’s interest of $4.2 million. The debt repayment was financed with a portion of the proceeds from
the exchange of the 60% interest and non-recourse debt with a new lender totaling $25.0 million, which is secured by individual
mortgages on, and cross-collateralized by, the thirteen properties in the Self Storage portfolio. The new financing bears interest
at a fixed rate of 7% per annum and has a 10 year term with a rate reset after 5 years. The $7.0 million gain recognized on the
debt repayment and the third party’s $4.2 million interest in this gain are both reflected in Other income and (expenses) in the
consolidated financial statements.

In August 2009, Carey Storage borrowed an additional $3.5 million that is secured by individual mortgages on, and cross-
collateralized by, seven properties in the Self Storage portfolio and distributed the proceeds to its profit sharing interest holders.
This new loan has an annual fixed interest rate of 7.25% and has a term of 9.6 years with a rate reset after 5 years. As part of this
transaction, Carey Storage distributed $1.9 million to its third party investor, which has been reflected as a reduction of the profit
sharing obligation.

We reflect our Carey Storage operations in our real estate ownership segment. Costs totaling $1.0 million incurred in structuring
the transaction and bringing in a new investor into these operations are reflected in General and administrative expenses in our
investment management segment.

How We Evaluate Results of Operations

We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality and amount of assets
under management by our investment management segment and seeking to increase value in our real estate ownership segment.
We focus our efforts on improving underperforming assets through re-leasing efforts, including negotiation of lease renewals, or
selectively selling assets in order to increase value in our real estate portfolio. The ability to increase assets under management
by structuring investments on behalf of the CPA® REITs is affected, among other things, by the CPA® REITs’ ability to raise
capital and our ability to identify and consummate appropriate investments and financing.

Our evaluation of operating results includes our ability to generate necessary cash flow in order to fund distributions to our
shareholders. As a result, our assessment of operating results gives less emphasis to the effects 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. We do not consider unrealized gains and losses resulting from short-term
foreign currency fluctuations when evaluating our ability to fund distributions. Our evaluation of our potential for generating
cash flow includes an assessment of the long-term sustainability of both our real estate portfolio and the assets we manage on
behalf of the CPA® REITs.

We consider cash flows from operating activities, cash flows from investing activities, cash flows from financing activities and
certain non-GAAP performance metrics to be important measures in the evaluation of our results of operations, liquidity and
capital resources. Cash flows from operating activities are sourced primarily by revenues earned from structuring investments
and providing asset-based management services on behalf of the CPA® REITs we manage and long-term lease contracts from
our real estate ownership. Our evaluation of the amount and expected fluctuation of cash flows from operating activities is
essential in evaluating our ability to fund operating expenses, service debt and fund distributions to shareholders.

We consider cash flows from operating activities plus cash distributions from equity investments in real estate and CPA® REITs
in excess of equity income as a supplemental measure of liquidity in evaluating our ability to sustain distributions to
shareholders. We consider this measure useful as a supplemental measure to the extent the source of distributions in excess of
equity income is the result of non-cash charges, such as depreciation and amortization, because it allows us to evaluate the cash
flows from consolidated and unconsolidated investments in a comparable manner. In deriving this measure, we exclude cash
distributions from equity investments in real estate and CPA® REITs that are sourced from sales of equity investee’s assets or
refinancing of debt because they are deemed to be returns of investment.

W. P. Carey 2009 10-K — 24

We focus on measures of cash flows from investing activities and cash flows from financing activities in our evaluation of our
capital resources. Investing activities typically consist of the acquisition or disposition of investments in real property and the
funding of capital expenditures with respect to real properties. Financing activities primarily consist of the payment of
distributions to shareholders, borrowings and repayments under our lines of credit and the payment of mortgage principal
amortization.

Results of Operations

A summary of comparative results of these business segments is as follows:

Investment Management (in thousands)

2009

2008

Change

2008

2007

Change

Years ended December 31,

Revenues
Asset management revenue
Structuring revenue
Wholesaling revenue
Reimbursed costs from affiliates

Operating Expenses
General and administrative
Reimbursable costs
Depreciation and amortization
Provision for settlement

Other Income and Expenses
Other interest income
(Loss) income from equity investments in CPA®

REITs

Other income and (expenses)

Income from continuing operations before income

taxes

Provision for income taxes
Net income from investment management

Add: Net loss attributable to noncontrolling

$ 76,621
23,273
6,550
48,715
155,159

$ 80,714
20,236
5,129
41,179
147,258

$ (4,093)
3,037
1,421
7,536
7,901

$ 80,714 $ 83,051 $ (2,337)
(57,939)
5,102
27,397
(27,777)

78,175
27
13,782
175,035

20,236
5,129
41,179
147,258

(57,638)
(48,715)
(3,807)
—
(110,160)

(55,508)
(41,179)
(4,515)
—
(101,202)

(2,130)
(7,536)
708
—
(8,958)

(55,508)
(41,179)
(4,515)
—
(101,202)

(54,592)
(13,782)
(4,179)
(29,979)
(102,532)

(916)
(27,397)
(336)
29,979
1,330

1,538

2,261

(723)

2,261

6,031

(3,770)

(340)
4,059
5,257

6,211
1,850
10,322

50,256
(21,038)
29,218

56,378
(22,432)
33,946

(6,551)
2,209
(5,065)

(6,122)
1,394
(4,728)

6,211
1,850
10,322

11,166
—
17,197

(4,955)
1,850
(6,875)

56,378
(22,432)
33,946

89,700
(50,158)
39,542

(33,322)
27,726
(5,596)

interests

2,374

2,420

(46)

2,420

2,022

398

Less: Net income attributable to redeemable

noncontrolling interests

Net income from investment management
attributable to W. P. Carey members

Asset Management Revenue

(2,258)

(1,508)

(750)

(1,508)

(4,756)

3,248

$ 29,334

$ 34,858

$ (5,524)

$ 34,858 $ 36,808 $ (1,950)

We earn asset-based management and performance revenue from the CPA® REITs based on the value of their real estate-related
assets under management. This asset management revenue may increase or decrease depending upon (i) increases in the CPA®
REIT asset bases as a result of new investments; (ii) decreases in the CPA® REIT asset bases as a result of sales of investments;
(iii) increases or decreases in the annual estimated net asset valuations of CPA® REIT investment portfolios; (iv) increases or
decreases in distributions of available cash (for CPA®:17 – Global only); and (v) whether the CPA® REITs are meeting their
performance criteria. The availability of funds for new investments is substantially dependent on our ability to raise funds for
investment by the CPA® REITs.

W. P. Carey 2009 10-K — 25

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, asset management revenue decreased by
$4.1 million, primarily due to declines in the annual estimated net asset valuations of CPA® REIT funds as described below.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, asset management revenue decreased by
$2.3 million. This decrease was primarily due to performance revenue totaling $19.0 million (including previously deferred
performance revenue totaling $11.9 million) recognized in 2007 as a result of CPA®:16 – Global meeting its performance
criterion in June of that year, compared to $12.0 million earned in 2008. This decrease was partially offset by increases in asset
management revenue during 2008 resulting from higher investment volume as well as increases in the annual estimated net asset
valuations of CPA®:14 and CPA®:15 in that year compared to 2007 as described below.

We obtain estimated net asset valuations for the CPA® REITs on an annual basis and sometimes on an interim basis, which
occurs generally in connection with our consideration of potential liquidity events. Currently, annual estimated net asset
valuations are performed for CPA®:14, CPA®:15 and CPA®:16 — Global. The following table presents recent estimated net
asset valuations per share for these REITs:

CPA®:14
CPA®:15
CPA®:16 – Global

Structuring Revenue

Years ended December 31,
2007

2008

2006

13.00
11.50
9.80

14.50
12.20
10.00

13.20
11.40
10.00

We earn structuring revenue when we structure and negotiate investments and debt placement transactions for the CPA® REITs.
Structuring revenue is dependent on investment activity, which is subject to significant period-to-period variation. Investment
volume on behalf of the CPA® REITs for the past three years was $507.7 million in 2009, $457.3 million in 2008 and
$1.1 billion in 2007.

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, structuring revenue increased by $3.0 million
primarily due to higher investment volume in 2009 compared to 2008. In addition, investment volume for 2008 included the
acquisition of $20.0 million of CMBS on behalf of CPA®:17 – Global, for which we earned structuring revenues of 1%
compared to an average of 4.5% that we generally earn for structuring long-term net lease investments on behalf of the CPA®
REITs.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, structuring revenue decreased by $57.9 million.
This decrease was primarily the result of the recognition in 2007 of $42.4 million of previously deferred structuring revenue
from CPA®:16 – Global meeting its performance criterion in June of that year as well as a significant decrease in investment
volume in 2008 compared to 2007. Investment volume for 2008 included the acquisition of $20.0 million of CMBS as described
above.

Wholesaling Revenue

We earn wholesaling revenue based on the number of shares sold in connection with CPA®:17 – Global’s initial public offering,
which commenced in December 2007. Wholesaling revenue earned is substantially offset by underwriting costs incurred in
connection with the offering, which are included in general and administrative expenses.

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, wholesaling revenue increased by $1.4 million
primarily due to an increase in the number of shares sold related to CPA®:17 – Global’s initial public offering in 2009 compared
to 2008. As described in Current Trends — Fundraising above, we have broadened our distribution channels and have
experienced stronger fundraising results in 2009.

2008 vs. 2007 — For the year ended December 31, 2008, we earned wholesaling revenue of $5.1 million in connection with
CPA®:17 – Global’s initial pubic offering, which commenced in December 2007.

Reimbursed and Reimbursable Costs

Reimbursed costs from affiliates (revenue) and reimbursable costs (expenses) represent costs incurred by us on behalf of the
CPA® REITs, consisting primarily of broker-dealer commissions and marketing and personnel costs, which are reimbursed by
the CPA® REITs. Revenue from reimbursed costs from affiliates is offset by corresponding charges to reimbursable costs and
therefore has no impact on net income.

W. P. Carey 2009 10-K — 26

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, reimbursed and reimbursable costs increased by
$7.5 million, primarily due to higher level of commissions paid to broker-dealers related to CPA®:17 – Global’s initial public
offering as funds raised in 2009 where higher than in 2008.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, reimbursed and reimbursable costs increased by
$27.4 million, primarily due to broker-dealer commissions related to CPA®:17 – Global’s initial public offering, which
commenced in December 2007.

General and Administrative

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, general and administrative expenses increased by
$2.1 million, primarily due to increases in compensation-related costs of $4.8 million and underwriting costs of $1.2 million.
These increases were partially offset by decreases in professional fees of $2.9 million and business development costs of
$1.4 million.

Compensation-related costs were higher in 2009 due to several factors, including an increase of $2.3 million in the amortization
of stock-based compensation to key officers and directors, which reflected two years of grants under a new long-term incentive
program initiated in 2008 (the “LTIP”), and a $1.7 million increase in bonuses resulting primarily from higher investment
volume in 2009. Underwriting costs represent costs incurred in connection with CPA®:17 – Global’s initial public offering. The
increased underwriting costs in 2009 were offset by higher wholesaling revenue, which we earn based on the number of shares of
CPA®:17 – Global sold. Professional fees primarily represent auditing, tax, legal and consulting services. Professional fees
overall were lower in 2009 primarily due to the write off in 2008 of previously capitalized offering costs totaling $1.6 million
related to a potential offering of Carey Watermark (Note 2) and fees incurred in 2008 in connection with the SEC Settlement and
the opening of our asset management office in Amsterdam. These decreases in professional fees were partially offset by
transaction-related costs of $1.0 million incurred in connection with the Carey Storage transaction during 2009 (Note 4).

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, general and administrative expenses increased by
$0.9 million, primarily due to increases in underwriting costs of $4.8 million, professional fees of $3.1 million and business
development fees of $1.7 million, which were substantially offset by decreases in compensation-related costs of $8.4 million.

Underwriting costs increased in 2008, as CPA®:17 – Global’s initial public offering commenced in December 2007. Professional
fees for 2008, which included the write-off of offering expenses totaling $1.6 million described above, also reflected higher fees
incurred in connection with our international operations, particularly relating to the opening of our asset management office in
Amsterdam. The increase in business development costs also related primarily to our international operations.

Compensation-related costs were significantly higher in 2007, primarily due to CPA®:16 – Global achieving its performance
criterion in June 2007 as well as higher investment volume in 2007. As a result of CPA®:16 – Global achieving its performance
criterion, we recognized $6.6 million of previously deferred compensation costs in 2007. In addition, bonuses decreased by
$6.3 million in 2008 compared to 2007, primarily due to relatively lower investment volume in 2008 and a reduction in the
bonus level for 2008 implemented in response to the deterioration in economic conditions during 2008. These decreases were
partially offset by increases in compensation-related costs totaling $4.5 million, primarily from an increase of $1.7 million in the
amortization of stock-based compensation to key officers in connection with the initial grants under the LTIP as well as an
increase in headcount during 2008 and severance costs.

Provision for Settlement

In March 2008, we entered into a settlement with the SEC with respect to all matters relating to a previously disclosed
investigation. In connection with the SEC Settlement, we made payments of $20.0 million, including interest, to certain of our
managed REITs and paid a $10.0 million civil penalty. In anticipation of this settlement, we took a charge of $30.0 million in the
fourth quarter of 2007 (Note 9).

Other Interest Income

Other interest income is primarily comprised of interest earned on deferred structuring revenue due from the CPA® REITs.

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, other interest income decreased by $0.7 million,
primarily due to a decrease in deferred structuring revenue as a result of installment payments made by the CPA® REITs.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, other interest income decreased by $3.8 million,
primarily due to the recognition of the $2.3 million of interest income earned on deferred structuring revenue from CPA®:16 –
Global in 2007 as a result of achieving its performance criterion that year, as well as a decrease in investment volume in 2008
compared to 2007.

W. P. Carey 2009 10-K — 27

(Loss) income from Equity Investments in CPA® REITs

Income or loss from equity investments in CPA® REITs represents our proportionate share of net income or loss (revenues less
expenses) from our investments in the CPA® REITs in which, because of the shares we elect to receive from them for revenue
due to us, we have a noncontrolling interest but exercise significant influence. The net income of the CPA® REITs fluctuates
based on the timing of transactions, such as new leases and property sales, as well as the level of impairment charges.

2009 vs. 2008— For the year ended December 31, 2009, loss from equity investments in the CPA® REITs was $0.3 million,
compared to income of $6.2 million in 2008, primarily due to higher impairment charges recognized by the CPA® REITs, which
are estimated to total approximately $170 million in 2009, compared to $40.4 million in 2008. In addition, the CPA® REITs
recognized income totaling $20.0 million during 2008 related to the SEC Settlement. These factors were partially offset by an
increase in net gains on sales of properties totaling $25.8 million recognized by the CPA® REITs in 2009 over 2008.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, income from equity investments in CPA® REITs
decreased by $5.0 million, primarily due to the recognition of out-of-period adjustments totaling $3.5 million during 2007 (Note
2) and impairment charges recognized by the CPA® REITs during 2008, which increased by $32.0 million from $8.4 million
recognized in 2007.

Other Income and (Expenses)

2009 — During 2009, we recognized other income of $4.1 million primarily related to a settlement of a dispute with a vendor
regarding certain fees we paid in prior years for services they performed. Under the terms of the settlement agreement, we
received cash of $2.0 million in the fourth quarter of 2009, with the remaining $2.0 million payable in either discounts on future
services or, if the amount of services is insufficient, cash over the next four years.

2008 — We recognized a gain of $1.8 million during 2008 related to an insurance reimbursement of certain professional services
costs incurred in connection with the now settled SEC investigation.

Provision for Income Taxes

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, our provision for income taxes decreased by
$1.4 million, primarily due to a reduction in income from continuing operations before income taxes.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, our provision for income taxes decreased by
$27.7 million. Income from continuing operations before income taxes also decreased by a similar amount in 2008. The decrease
was due to several factors, including international asset management revenue being taxed in a foreign jurisdiction beginning in
the third quarter of 2008 and reductions in both tax-generating intercompany transactions and the amount of shares in the CPA®
REITs that we hold in taxable subsidiaries. In addition, our provision for income taxes for the year ended December 31, 2007
included taxes on asset management revenue and structuring revenue recognized as a result of CPA®:16 – Global achieving its
performance criterion that year.

Net Income from Investment Management Attributable to W. P. Carey Members

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, the resulting net income from investment
management attributable to W. P. Carey members decreased by $5.5 million.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, the resulting net income from investment
management attributable to W. P. Carey members decreased by $2.0 million.

W. P. Carey 2009 10-K — 28

Real Estate Ownership (in thousands)

Revenues
Lease revenues
Other real estate income

Operating Expenses
Depreciation and amortization
Property expenses
General and administrative
Other real estate expenses
Impairment charges

Other Income and Expenses
Other interest income
Income from equity investments in real estate
Gain on sale of investment in direct financing

lease

Other income and (expenses)
Interest expense

Income from continuing operations before income

taxes

Provision for income taxes
Income from continuing operations
Income from discontinued operations
Net income from real estate ownership

Less: Net income attributable to noncontrolling

2009

2008

Years ended December 31,
2008

Change

2007 Change

$ 65,493
15,224
80,717

$ 70,696
20,670
91,366

$ (5,203)
(5,446)
(10,649)

$ 70,696 $ 70,207 $

20,670
91,366

12,714
82,921

(19,817)
(8,128)
(4,977)
(7,308)
(9,525)
(49,755)

(19,913)
(7,259)
(7,082)
(8,196)
(473)
(42,923)

96
(869)
2,105
888
(9,052)
(6,832)

(19,913)
(7,259)
(7,082)
(8,196)
(473)
(42,923)

(20,068)
(5,908)
(7,254)
(7,690)
(420)
(41,340)

176
13,765

623
7,987

(447)
5,778

623
7,987

811
7,191

—
3,258
(15,189)
2,010

1,103
(406)
(18,858)
(9,551)

(1,103)
3,664
3,669
11,561

1,103
(406)
(18,858)
(9,551)

—
3,114
(20,266)
(9,150)

32,972
(1,755)
31,217
10,133
41,350

38,892
(1,089)
37,803
6,856
44,659

(5,920)
(666)
(6,586)
3,277
(3,309)

38,892
(1,089)
37,803
6,856
44,659

32,431
(1,581)
30,850
18,397
49,247

6,461
492
6,953
(11,541)
(4,588)

489
7,956
8,445

155
(1,351)
172
(506)
(53)
(1,583)

(188)
796

1,103
(3,520)
1,408
(401)

interests

(1,661)

(1,470)

(191)

(1,470)

(6,803)

5,333

Net income from real estate ownership
attributable to W. P. Carey members

$ 39,689 $ 43,189 $ (3,500) $ 43,189 $ 42,444 $

745

Our evaluation of the sources of lease revenues is as follows (in thousands):

Rental income
Interest income from direct financing leases

Years ended December 31,
2008

2009

2007

54,874
10,619
65,493

59,768
10,928
70,696

58,486
11,721
70,207

W. P. Carey 2009 10-K — 29

The following table sets forth the net lease revenues (i.e., rental income and interest income from direct financing leases) that we
earned from lease obligations through our direct ownership of real estate (in thousands):

Lessee
Bouygues Telecom, S.A. (a) (b) (c)
CheckFree Holdings, Inc. (b)
The American Bottling Company
Titan Corporation
Orbital Sciences Corporation
AutoZone, Inc.
Lucent Technologies, Inc.
Sybron Dental Specialties Inc. (d)
Quebecor Printing, Inc.
Unisource Worldwide, Inc.
BellSouth Telecommunications, Inc.
Werner Corporation
BE Aerospace, Inc.
Eagle Hardware & Garden, a subsidiary of Lowe’s Companies (e)
CSS Industries, Inc.
Career Education Corporation
Enviro Works, Inc.
Sprint Spectrum, L.P.
AT&T Corporation
Omnicom Group Inc.
United States Postal Service
Other (a)

Years ended December 31,
2008

2009

2007

6,410
4,964
4,591
2,912
2,771
2,228
1,995
1,953
1,919
1,668
1,617
1,614
1,580
1,574
1,570
1,502
1,426
1,425
1,259
1,251
1,225
18,039
65,493

6,215
4,829
4,563
2,912
2,939
2,210
1,995
1,770
1,941
1,678
1,711
1,625
1,580
1,486
1,570
1,502
1,421
1,425
1,259
1,251
1,182
23,632
70,696

5,529
4,711
4,501
2,912
3,023
2,058
1,876
1,770
1,941
1,686
1,771
1,627
1,580
1,680
1,570
1,502
1,350
1,425
1,259
1,251
1,179
24,006
70,207

(a) Revenue amounts are subject to fluctuations in foreign currency exchange rates.
(b) These revenues are generated in consolidated ventures, generally with our affiliates, and include lease revenues applicable

to noncontrolling interests totaling $3.7 million, $3.6 million and $3.4 million for the years ended December 31, 2009, 2008
and 2007, respectively.

(c) Increase in 2008 was due to CPI-based (or equivalent) rent increase.
(d) Increase in 2009 was due to CPI-based (or equivalent) rent increase.
(e) Revenue amounts are subject to fluctuations in percentage rents.

W. P. Carey 2009 10-K — 30

We recognize income from equity investments in real estate, of which lease revenues are a significant component. The following
table sets forth the net lease revenues earned by these ventures. Amounts provided are the total amounts attributable to the
ventures and do not represent our proportionate share (dollars in thousands):

Lessee
The New York Times Company (a)
Carrefour France, SAS (b) (c)
Federal Express Corporation
Medica — France, S.A. (b) (d)
Schuler A.G. (b) (e)
Information Resources, Inc.
Amylin Pharmaceuticals, Inc.
Hologic, Inc.
Consolidated Systems, Inc.
U. S. Airways Group, Inc. (f)
Childtime Childcare, Inc.
The Retail Distribution Group (g)

Ownership
Interest at

December 31, 2009

Years ended December 31,
2008

2007

2009

18% $
46%
40%
46%
33%
33%
50%
36%
60%
75%
34%
40%

21,751
21,481
7,319
6,917
6,568
4,973
3,635
3,387
1,831
1,658
1,332
1,020
81,872

—
21,387
6,967
7,169
6,802
4,972
3,343
3,317
1,831
—
1,248
808
57,844

—
19,061
6,892
6,348
1,808
4,972
3,343
3,212
1,810
—
1,280
808
49,534

(a) We acquired our interest in this investment in March 2009.
(b) Revenue amounts are subject to fluctuations in foreign currency exchange rates.
(c) Increase in 2008 was due to CPI-based (or equivalent) rent increase.
(d) Our interest was increased to 46% from 35% in September 2007 as a result of a restructuring of ownership interests with an

affiliate.

(e) We acquired our interest in this venture in December 2007.
(f) In the third quarter of 2009, we recorded an adjustment to record this entity on the equity method. This entity had

previously been accounted for under a proportionate consolidation method (Note 2). During 2008 and 2007, this entity
recorded lease revenue of $3.1 million and $2.8 million, respectively.
(g) Increase in 2009 was due to CPI-based (or equivalent) rent increase.

The above table does not reflect our share of interest income from our 5% interest in a venture that acquired a note receivable in
April 2007. The venture recognized interest income of $27.1 million, $37.2 million and $25.5 million for the years ended
December 31, 2009, 2008 and 2007, respectively. This amount represents total amount attributable to the entire venture, not our
proportionate share, and is subject to fluctuations in the exchange rate of the Euro.

Lease Revenues

Our net leases generally have rent adjustments based on formulas indexed to changes in the CPI or other similar indices for the
jurisdiction in which the property is located, sales overrides or other periodic increases, which are intended to increase lease
revenues in the future. We own international investments, and therefore lease revenues from these investments are subject to
fluctuations in exchange rate movements in foreign currencies.

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, lease revenues decreased by $5.2 million,
primarily due to the impact of recent activity, including lease restructurings, lease expirations and property sales, which resulted
in a reduction to lease revenues of $3.4 million. In addition, the reclassification of a property to an equity investment in real
estate in 2009 (see footnote (f) in the lease revenue from equity investments in real estate table above) resulted in a decrease of
$3.1 million to lease revenues. These decreases were partially offset by scheduled rent increases at several properties totaling
$1.6 million.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, lease revenues increased by $0.5 million. Rent
increases at several properties totaling $1.9 million and lease revenue from an investment entered into during December 2007
totaling $1.0 million were substantially offset by the impact of property sales and lease expirations totaling $2.6 million.

W. P. Carey 2009 10-K — 31

Other Real Estate Income

Other real estate income generally consists of revenue from Carey Storage, a subsidiary that invests in domestic self-storage
properties (see Part I, Item I, Business – Investment Management - Self-Storage Investments), and Livho, a subsidiary that
operates a Radisson hotel franchise in Livonia, Michigan. Other real estate income also includes lease termination payments and
other non-rent related revenues from real estate ownership including, but not limited to, settlements of claims against former
lessees. We receive settlements in the ordinary course of business; however, the timing and amount of settlements cannot always
be estimated.

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, other real estate income decreased by
$5.4 million, primarily due to lower lease termination income recognized in the current year. In October 2008, we terminated the
lease on a domestic property in exchange for termination fees totaling $7.5 million, partially offset by the write-off of certain
intangible assets totaling $1.0 million. Increases in reimbursable tenant costs, which are recorded as both revenue and expense
and therefore have no impact on net income, were substantially offset by a reduction in income from Livho, whose operations
have been impacted by the recent financial crisis.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, other real estate income increased by
$8.0 million, primarily due to the $6.5 million gain recognized on a lease termination in 2008 as described above. In addition,
income from seven properties that Carey Storage acquired in 2007 also contributed $1.1 million of the increase.

Property Expenses

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, property expenses increased by $0.9 million
primarily due to increases in reimbursable tenant costs.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, property expenses increased by $1.4 million,
primarily due to increases in other property-related expenses, including professional services, insurance and utilities, totaling
$0.9 million.

General and Administrative

General and administrative expenses were $5.0 million, $7.1 million and $7.3 million in 2009, 2008 and 2007, respectively. The
$2.1 million decrease in general and administrative expenses for the year ended December 31, 2009 as compared to 2008 was
primarily due to decreases in professional expenses of $1.1 million and business development costs of $0.5 million. Professional
fees include auditing, consulting and legal services associated with our real estate ownership. Professional fees in 2008 reflected
costs incurred in connection with opening our asset management office in Amsterdam.

Impairment Charges

For the years ended December 31, 2009, 2008 and 2007, we recorded impairment charges related to our continuing real estate
ownership operations totaling $9.5 million, $0.5 million and $0.4 million, respectively. The table below summarizes the
impairment charges recorded for the past three fiscal years for both continuing and discontinued operations (in thousands):

Property
Lafayette, Louisiana
College Station, Texas
Various properties
Various properties

2008 2007

2009
$3,138 $ — $ — Decline in estimated fair market value of the property
1,990 — — Decline in estimated fair market value of the property
1,781 — 420 Decline in estimated fair market value of the properties
2,616

— Decline in unguaranteed residual value of properties

Reason

473

Impairment charges from continuing

operations

$9,525 $473 $ 420

Walbridge, Ohio
Various properties

$ — $ — $2,317 Property sold for less than carrying value

899 538

597 Properties sold for less than carrying value

Impairment charges from discontinued

operations

$ 899 $538 $2,914

W. P. Carey 2009 10-K — 32

Income from Equity Investments in Real Estate

Income from equity investments in real estate represents our proportionate share of net income (revenue less expenses) from
investments entered into with affiliates or third parties in which we have a noncontrolling interest but exercise significant
influence.

2009 vs. 2008— For the year ended December 31, 2009 as compared to 2008, income from equity investments in real estate
increased by $5.8 million, primarily due to our investment in The New York Times transaction in March 2009, which
contributed income of $3.5 million in 2009. In addition, during 2009 we recorded income of $1.6 million from an equity
investment that had previously been accounted for under a proportionate consolidation method (Note 2).

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, income from equity investments in real estate
increased by $0.8 million. The full year impact of our investment in the Schuler A.G. venture (purchased in December 2007)
contributed equity income of $2.1 million in 2008, while changes in depreciation / amortization schedules for certain equity
investments beginning in the third quarter of 2007 contributed an additional $1.7 million in 2008 (Note 2). These increases were
partially offset by a decrease of $2.7 million in 2008 in our Amylin Pharmaceuticals Inc. venture primarily as a result of this
venture’s refinancing in June 2007 of an existing $2.5 million mortgage with new financing totaling $35.4 million based on the
appraised value of the real estate of the venture.

Gain on Sale of Investment in Direct Financing Lease

During the year ended December 31, 2008, we sold our investment in a direct financing lease for $5.0 million, net of selling
costs, and recognized a net gain on sale of $1.1 million.

Other Income and (Expenses)

2009 vs. 2008 — For the year ended December 31, 2009, we recognized other income of $3.3 million, compared to other
expenses of $0.4 million in 2008. The other income in 2009 was primarily comprised of the $7.0 million gain recognized by our
subsidiary, Carey Storage, on the repayment of its $35.0 million outstanding balance on its secured credit facility for
$28.0 million in January 2009. This gain was partially offset by a third party investor’s profit sharing interest in the gain totaling
$4.2 million (Note 4). The other expenses in 2008 were primarily due to foreign currency transactions as described below.
Fluctuations in foreign currency exchange rates did not have a significant impact in 2009.

2008 vs. 2007 — For the year ended December 31, 2008, we recognized other expenses of $0.4 million, as compared to other
income of $3.1 million in 2007. As a result of the strengthening of the U.S. dollar against the Euro in the second half of 2008, we
reflected cumulative unrealized currency losses of $2.4 million during 2008 due to changes in foreign currency exchange rates
on notes receivable from international subsidiaries. In addition, we incurred a loss of $0.2 million in connection with the write
off of certain warrants. These losses were substantially offset by realized foreign currency transaction gains of $2.3 million
recognized in 2008 in connection with the repatriation of cash held in foreign accounts. The gains recognized in 2007 were
primarily due to foreign currency translation gains. Our results of foreign operations benefit from a weaker U.S. dollar and are
adversely affected by a stronger U.S. dollar relative to foreign currencies. During 2007, the average rate for the U.S. dollar in
relation to the Euro was considerably weaker than during the prior year, and as a result, we experienced a positive impact on our
results of foreign operations.

Interest Expense

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, interest expense decreased by $3.7 million,
primarily due to a decrease of $1.8 million resulting from Carey Storage’s repayment of its $35.0 million outstanding balance on
its secured credit facility in January 2009. In addition, interest expense on our line of credit decreased by $1.1 million compared
to 2008, primarily due to a lower average annual interest rate, partially offset by a higher average outstanding balance during
2009. The weighted average annual interest rate on advances on the line of credit at December 31, 2009 was 1.3%, compared to
2.6% at December 31, 2008. An out-of-period adjustment as described in Note 2 also resulted in reduction of $1.1 million in
interest expense for 2009.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, interest expense decreased by $1.4 million,
primarily due to decreases of $0.8 million resulting from the pay-off of two mortgages in 2007, $0.6 million from a lower
average annual interest rate on Carey Storage’s secured credit facility and $0.5 million resulting from scheduled principal
payments. These decreases were partially offset by an increase of $0.5 million in interest expense incurred on our line of credit,
which had a higher average outstanding balance during 2008 than in 2007. The higher average outstanding balance was primarily
attributable to payments in March 2008 totaling $30.0 million in connection with the SEC Settlement as well as to the repurchase
of shares in connection with our share repurchase programs.

W. P. Carey 2009 10-K — 33

Discontinued Operations

2009 — For the year ended December 31, 2009, we earned income from discontinued operations of $10.1 million. During 2009,
we sold five domestic properties and recognized a net gain of $7.7 million. Income generated from the operations of
discontinued properties of $3.3 million was partially offset by impairment charges totaling $0.9 million.

2008 — For the year ended December 31, 2008, we earned income from discontinued operations of $6.9 million, which
primarily consisted of proceeds received from a former tenant in payment of a $3.8 million legal judgment in our favor and
income generated from the operations of discontinued properties of $3.6 million, partially offset by a $0.5 million impairment
charge.

2007 — For the year ended December 31, 2007, we earned income from discontinued operations of $18.4 million. During 2007,
we sold several properties and recognized a net gain of $15.5 million and lease termination revenue of $1.9 million in connection
with these transactions. Income generated from the operations of discontinued properties were partially offset by the recognition
of impairment charges on several properties totaling $2.9 million. These amounts do not include noncontrolling interest in
income totaling $5.4 million.

Impairment charges for 2009, 2008 and 2007 are described in Impairment Charges above.

Net Income from Real Estate Ownership Attributable to W. P. Carey Members

2009 vs. 2008 — For the year ended December 31, 2009 as compared to 2008, the resulting net income from real estate
ownership attributable to W. P. Carey members decreased by $3.5 million.

2008 vs. 2007 — For the year ended December 31, 2008 as compared to 2007, the resulting net income from real estate
ownership attributable to W. P. Carey members increased by $0.7 million.

Financial Condition

Sources and Uses of Cash during the Year

Our cash flows fluctuate period to period due to a number of factors, which may include, among other things, the nature and
timing of receipts of transaction-related and performance revenue, the performance of the CPA® REITs relative to their
performance criteria, the timing of purchases and sales of real estate, timing of proceeds from non-recourse mortgage loans and
receipt of lease revenue, the timing and characterization of distributions from equity investments in real estate and the CPA®
REITs, the timing of certain payments, and the receipt of the annual installment of deferred acquisition revenue and interest
thereon in the first quarter from certain of the CPA® REITs. Despite this fluctuation, we believe that we will generate sufficient
cash from operations and from equity distributions in excess of equity income in real estate to meet our short-term and long-term
liquidity needs. We may also use existing cash resources, the proceeds of non-recourse mortgage loans, unused capacity on our
line of credit and the issuance of additional equity securities to meet these needs. We assess our ability to access capital on an
ongoing basis. Our sources and uses of cash during the year are described below.

Operating Activities

During 2009, we used our cash flow from operations, along with distributions from our equity investments in real estate and the
CPA
credit to make purchases of common stock under a share repurchase program that ended in March 2009.

REITs, to fund distributions to our shareholders, and we used existing cash resources and borrowings under our line of

During 2009, we received revenue of $37.1 million in cash from providing asset-based management services to the CPA®
REITs. This amount does not include revenue received from the CPA® REITs in the form of shares of their restricted common
stock rather than cash (see below). We also received revenue of $13.1 million in connection with structuring investments and
debt refinancing on behalf of the CPA® REITs. In January 2009, we received $21.8 million related to the annual installment of
deferred acquisition revenue from CPA®:14, CPA®:15 and CPA®:16 – Global, including interest. We receive deferred
structuring revenue from CPA®:17 – Global on a quarterly basis, of which $3.4 million was received during 2009. In
January 2010, we received $13.7 million related to the annual installment of deferred acquisition revenue from CPA®:14,
CPA®:15 and CPA®:16 – Global, including interest.

In 2009, we elected to receive all performance revenue from CPA®:16 – Global as well as asset management revenue from
CPA®:17 – Global in restricted shares of their common stock rather than cash. However, for CPA®:14 and CPA®:15, we elected
to receive 80% of all performance revenue in their restricted shares, with the remaining 20% payable in cash. For 2010, we have
elected to continue to receive all performance revenue from CPA®:16 – Global as well as all asset management revenue from
CPA®:17 – Global and 80% of CPA®:14 and CPA®:15’s performance revenue in restricted shares.

W. P. Carey 2009 10-K — 34

During 2009, our real estate ownership provided cash flows (contractual lease revenues, net of property-level debt service) of
approximately $50.1 million.

Investing Activities

Our investing activities are generally comprised of real estate transactions (purchases and sales) and capitalized property-related
costs. During 2009, we used $39.6 million to finance our portion of The New York Times transaction and $7.8 million to make
capital improvements to existing properties. Cash inflows during the year included proceeds from the sale of five domestic
properties totaling $43.5 million, proceeds from Carey Storage’s transfer of a 60% interest in its self storage portfolio for
$21.9 million and distributions from equity investments in real estate and the CPA® REITs in excess of equity income of
$39.1 million, inclusive of distributions of $21.2 million received from The New York Times venture in connection with its
mortgage financing. In connection with an exchange transaction under Section 1031 of the Internal Revenue Code of 1986, as
amended (the “Code”), proceeds of $36.1 million from a property sale were placed into escrow for purchases of properties in
2010. See Subsequent Event below.

Based on current distribution rates and our current investment in the CPA® REITs, our annual distributions from the CPA®
REITs for 2010 are projected to be approximately $15.7 million.

Financing Activities

During 2009, we paid distributions to shareholders, noncontrolling interests and profit sharing interest totaling $89.8 million and
paid scheduled mortgage principal installments of $9.5 million. We also used $15.4 million to purchase certain interests in WPCI
and related entities from a noncontrolling investor (Note 14). We refinanced a maturing non-recourse mortgage loan of $11.9
million with new non-recourse mortgage financing of $14.0 million that is scheduled to mature in 2019. Borrowings under our
line of credit increased overall by $30.0 million since December 31, 2008 and were comprised of gross borrowings of
$150.5 million and repayments of $120.5 million. Borrowings under our line of credit were used for several purposes, including
to finance our portion of The New York Times transaction in March 2009, which was partially repaid when we obtained secured
financing for The New York Times property in August 2009. In January 2009, Carey Storage repaid, in full, the $35.0 million
outstanding balance on its secured credit facility at a discount for $28.0 million and terminated the facility. In connection with
this loan repayment, Carey Storage obtained non-recourse mortgage loans totaling $28.5 million that are secured by individual
mortgages on the self storage properties in the Carey Storage portfolio. In connection with our share repurchase programs, we
repurchased shares totaling $10.7 million during 2009, with the most recent program ended in March 2009.

Summary of Financing

The table below summarizes our non-recourse long-term debt and credit facilities (dollars in thousands):

Balance
Fixed rate
Variable rate (a)

Percent of total debt
Fixed rate
Variable rate (a)

Weighted average interest rate at end of year
Fixed rate
Variable rate (a)

December 31,

2009

2008

147,060
179,270
326,330

169,425
157,449
326,874

45%
55%
100%

6.2%
2.9%

52%
48%
100%

6.3%
3.3%

(a) Variable rate debt at December 31, 2009 included (i) $111.0 million outstanding under our line of credit, (ii) $9.3 million

that has been effectively converted to a fixed rate through an interest rate swap derivative instrument and (iii) $54.0 million
in mortgage obligations that bore interest at fixed rates but which have interest rate reset features that may change the
interest rates to then-prevailing market fixed rates (subject to specified caps) at certain points during their term. No interest
rate resets or expirations of interest rate swaps are scheduled to occur in 2010.

W. P. Carey 2009 10-K — 35

Cash Resources

At December 31, 2009, our cash resources consisted of the following:

•

Cash and cash equivalents totaling $18.5 million. Of this amount, $5.6 million, at then current exchange rates, was

held in foreign bank accounts, and we could be subject to restrictions or significant costs should we decide to
repatriate these amounts;

A line of credit with unused capacity of $139.0 million, all of which is available to us and which may also be used to
loan funds to our affiliates. Our lender has issued letters of credit totaling $7.0 million on our behalf in connection
with certain contractual obligations, which reduce amounts that may be drawn under this facility; and

We also had unleveraged properties that had an aggregate carrying value of $223.3 million, although given the current

economic environment, there can be no assurance that we would be able to obtain financing for these properties.

Our cash resources can be used for working capital needs and other commitments and may be used for future investments. We
continue to evaluate fixed-rate financing options, such as obtaining non-recourse financing on our unleveraged properties. Any
financing obtained may be used for working capital objectives and/or may be used to pay down existing debt balances. A
summary of our secured and unsecured credit facilities is provided below (in thousands):

Line of credit
Secured credit facility

Line of credit

December 31, 2009

Outstanding

Balance

111,000
N/A
111,000

Maximum
Available

250,000
N/A
250,000

December 31, 2008
Outstanding Maximum
Available

Balance

81,000
35,009
116,009

250,000
35,009
285,009

We have a $250.0 million unsecured revolving line of credit, that is scheduled to mature in June 2011. Pursuant to its terms, the
line of credit can be increased up to $300.0 million at the discretion of the lenders and, at our discretion, can be extended for an
additional year subject to satisfying certain conditions and the payment of an extension fee equal to 0.125% of the total
commitments under the facility at that time.

The line of credit provides for an annual interest rate, at our election, of either (i) LIBOR plus a spread that ranges from 75 to
120 basis points depending on our leverage or (ii) the greater of the lender’s prime rate and the Federal Funds Effective Rate plus
50 basis points. At December 31, 2009, the average interest rate on advances on the line of credit was 1.3%. In addition, we pay
an annual fee ranging between 12.5 and 20 basis points of the unused portion of the line of credit, depending on our leverage
ratio. Based on our leverage ratio at December 31, 2009, we pay interest at LIBOR plus 75 basis points and pay 12.5 basis points
on the unused portion of the line of credit. The line of credit has financial covenants that among other things require us to
maintain a minimum equity value, restrict the amount of distributions we can pay and requires us to meet or exceed certain
operating and coverage ratios. We were in compliance with these covenants at December 31, 2009.

Secured credit facility

Carey Storage had a credit facility for up to $105.0 million that provided for advances through March 8, 2008, after which no
additional borrowings were available. The credit facility itself was scheduled to expire in December 2008; however, pursuant to
its terms, in December 2008 we exercised an option to extend the maturity date of the credit facility for an additional year on
substantially the same terms. In January 2009, Carey Storage repaid, in full, the $35.0 million outstanding under this credit
facility at a discount for $28.0 million and terminated the facility (See Carey Storage Activity above).

Cash Requirements

During 2010, we expect that cash payments will include paying distributions to shareholders and to our affiliates who hold
noncontrolling interests in entities we control and making scheduled mortgage principal payments, including mortgage balloon
payments totaling $11.6 million, as well as other normal recurring operating expenses. In January 2010, we made a balloon
payment of $2.2 million for a maturing mortgage loan.

We expect to fund future investments, any capital expenditures on existing properties and scheduled debt maturities on non-
recourse mortgage loans through use of our cash reserves or unused amounts on our line of credit.

W. P. Carey 2009 10-K — 36

Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our off-balance sheet arrangements and contractual obligations at December 31, 2009 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).

Non-recourse debt — Principal
Line of credit — Principal
Interest on borrowings (a)
Operating and other lease

commitments (b)

Property improvements (c)
Other commitments (d)

Total
215,330
111,000
67,263

28,099

206
148
422,046

Less than

1 Year

19,124
—
13,841

3,140

206
148
36,459

More than

1-3 Years

63,363
111,000
21,139

3-5 Years
11,077
—
15,265

6,335

—
—
201,837

6,341
—
—
32,683

5 years

121,766
—
17,018

12,283
—
—
151,067

(a) Interest on un-hedged variable rate debt obligations was calculated using the applicable annual variable interest rates and

balances outstanding at December 31, 2009.

(b) Operating and other lease commitments consist primarily of the total minimum rents payable on the lease for our principal
offices. We are reimbursed by affiliates for their share of the future minimum rents under an office cost-sharing agreement.
These amounts are allocated among the entities based on gross revenues and are adjusted quarterly. The table above
excludes the rental obligation under a ground lease of a venture in which we own a 46% interest. This obligation totals
approximately $3.1 million over the lease term through January 2063.
(c) Represents remaining commitments to fund certain property improvements.
(d) Includes estimates for accrued interest and penalties related to uncertain tax positions and a commitment to contribute

capital to an investment in India.

Amounts in the table above related to our foreign operations are based on the exchange rate of the Euro at December 31, 2009.
At December 31, 2009, we had no material capital lease obligations for which we are the lessee, either individually or in the
aggregate.

We have investments in unconsolidated ventures that own single-tenant properties net leased to corporations. All of the
underlying investments are owned with our affiliates. Summarized financial information for these ventures and our ownership
interest in the ventures at December 31, 2009 are presented below. Summarized financial information provided represents the
total amounts attributable to the ventures and does not represent our proportionate share (dollars in thousands):

Lessee
Federal Express Corporation
Information Resources, Inc.
Childtime Childcare, Inc.
U. S. Airways Group, Inc. (a)
The New York Times Company (b)
Carrefour France, SAS (c)
Consolidated Systems, Inc.
Amylin Pharmaceuticals, Inc. (d)
Medica — France, S.A. (c)
Hologic, Inc.
Schuler A.G. (c)
The Retail Distribution Group (e)

Ownership
Interest at

December 31, 2009

40% $
33%
34%
75%
18%
46%
60%
50%
46%
36%
33%
40%

Total Assets
50,545
48,001
10,646
8,536
373,048
150,330
17,926
37,829
49,670
28,823
83,197
6,656
865,207

Total Third
Party Debt Maturity Date
1/2011
$
1/2011
1/2011
4/2014
9/2014
12/2014
11/2016
7/2017
10/2017
5/2023
N/A
N/A

39,936
21,828
6,429
3,895
119,154
117,806
11,538
35,350
41,036
14,897
—
—

411,869

(a) In the third quarter of 2009, we recorded an adjustment to record this entity on the equity method that had previously been

accounted under a proportionate consolidation method (Note 2).

(b) We acquired our interest in this investment in March 2009.
(c) Dollar amounts shown are based on the exchange rate of the Euro at December 31, 2009.
(d) In 2007, this venture refinanced its existing non-recourse mortgage debt for new non-recourse financing of $35.4 million

based on the appraised value of the underlying real estate of the venture and distributed the proceeds to the venture partners.

(e) In July 2009, this venture repaid a maturing non-recourse mortgage loan of $5.4 million.

W. P. Carey 2009 10-K — 37

The table above does not reflect our acquisition in April 2007 of a 5% interest in a venture that made a loan (the “note
receivable”) to the holder of a 75% interest in a limited partnership owning 37 properties throughout Germany at a total cost of
$336.0 million. In connection with this transaction, the venture obtained non-recourse financing of $284.9 million having a fixed
annual interest rate of 5.5% and a term of 10 years. Under the terms of the note receivable, the venture will receive interest that
approximates 75% of all income earned by the limited partnership, less adjustments. All amounts are based on the exchange rate
of the Euro at the date of acquisition.

In connection with the purchase of many of our properties, we required the sellers to perform environmental reviews. We
believe, based on the results of these reviews, that our properties were in substantial compliance with Federal and state
environmental statutes at the time the properties were acquired. However, portions of certain properties have been subject to
some degree of contamination, principally in connection with leakage from underground storage tanks, surface spills from
facility activities or historical on-site activities. In most instances where contamination has been identified, tenants are actively
engaged in the remediation process and addressing identified conditions. Tenants are generally subject to environmental statutes
and regulations regarding the discharge of hazardous materials and any related remediation obligations. In addition, our leases
generally require tenants to indemnify us from all liabilities and losses related to the leased properties, with provisions of these
indemnification specifically addressing environmental matters. The leases generally include provisions that allow for periodic
environmental assessments, paid for by the tenant, and allow us to extend leases until such time as a tenant has satisfied its
environmental obligations. Certain of our leases allow us to require financial assurances from tenants, such as performance
bonds or letters of credit, if the costs of remediating environmental conditions are, in our estimation, in excess of specified
amounts. Accordingly, we believe that the ultimate resolution of environmental matters should not have a material adverse effect
on our financial condition, liquidity or results of operations.

Critical Accounting Estimates

Our significant accounting policies are described in Note 2 to the consolidated financial statements. Many of these accounting
policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our
consolidated financial statements. On a quarterly basis, we evaluate these estimates and judgments based on historical experience
as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in the
future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of
estimates. Those accounting policies that require significant estimation and/or judgment are listed below.

Classification of Real Estate Assets

We classify our directly owned leased assets for financial reporting purposes at the inception of a lease, or when significant lease
terms are amended, as either real estate leased under operating leases or net investment in direct financing leases. This
classification is based on several criteria, including, but not limited to, estimates of the remaining economic life of the leased
assets and the calculation of the present value of future minimum rents. We estimate remaining economic life using third party
appraisals of the leased assets. We calculate the present value of future minimum rents using the lease’s implicit interest rate,
which requires an estimate of the residual value of the leased assets as of the end of the non-cancelable lease term. Estimates of
residual values are generally based on third party appraisals. Different estimates of residual value result in different implicit
interest rates and could possibly affect the financial reporting classification of leased assets. The contractual terms of our leases
are not necessarily different for operating and direct financing leases; however, the classification is based on accounting
pronouncements that are intended to indicate whether the risks and rewards of ownership are retained by the lessor or
substantially transferred to the lessee. We believe that we retain certain risks of ownership regardless of accounting
classification. Assets classified as net investment in direct financing leases are not depreciated but are written down to expected
residual value over the lease term. Therefore, the classification of assets may have a significant impact on net income even
though it has no effect on cash flows.

Identification of Tangible and Intangible Assets in Connection with Real Estate Acquisitions

In connection with our acquisition of properties accounted for as operating leases, we allocate purchase costs to tangible and
intangible assets and liabilities acquired based on their estimated fair values. We determine the value of tangible assets,
consisting of land and buildings, as if vacant, and record intangible assets, including the above- and below-market value of
leases, the value of in-place leases and the value of tenant relationships, at their relative estimated fair values.

We determine the value attributed to tangible assets in part using a discounted cash flow model that is intended to approximate
both what a third party would pay to purchase the vacant property and rent at current estimated market rates. In applying the
model, we assume that the disinterested party would sell the property at the end of an estimated market lease term. Assumptions
used in the model are property-specific where this information is available; however, when certain necessary information is not
available, we use available regional and property-type information. Assumptions and estimates include a discount rate or internal
rate of return, marketing period necessary to put a lease in place, carrying costs during the marketing period, leasing
commissions and tenant improvements allowances, market rents and growth factors of these rents, market lease term and a cap
rate to be applied to an estimate of market rent at the end of the market lease term.

W. P. Carey 2009 10-K — 38

We acquire properties subject to net leases and determine the value of above-market and below-market lease intangibles based
on the difference between (i) the contractual rents to be paid pursuant to the leases negotiated and in place at the time of
acquisition of the properties and (ii) our estimate of fair market lease rates for the property or a similar property, both of which
are measured over a period equal to the estimated market lease term. We discount the difference between the estimated market
rent and contractual rent to a present value using an interest rate reflecting our current assessment of the risk associated with the
lease acquired, which includes a consideration of the credit of the lessee. Estimates of market rent are generally based on a third
party appraisal obtained in connection with the property acquisition and can include estimates of market rent increase factors,
which are generally provided in the appraisal or by local brokers.

We evaluate the specific characteristics of each tenant’s lease and any pre-existing relationship with each tenant in determining
the value of in-place lease and tenant relationship intangibles. To determine the value of in-place lease intangibles, we consider
estimated market rent, estimated carrying costs of the property during a hypothetical expected lease-up period, current market
conditions and costs to execute similar leases. Estimated carrying costs include real estate taxes, insurance, other property
operating costs and estimates of lost rentals at market rates during the hypothetical expected lease-up periods, based on
assessments of specific market conditions. In determining the value of tenant relationship intangibles, we consider the
expectation of lease renewals, the nature and extent of our existing relationship with the tenant, prospects for developing new
business with the tenant and the tenant’s credit profile. We also consider estimated costs to execute a new lease, including
estimated leasing commissions and legal costs, as well as estimated carrying costs of the property during a hypothetical expected
lease-up period. We determine these values using third party appraisals or our estimates.

Basis of Consolidation

When we obtain an economic interest in an entity, we evaluate the entity to determine if it is deemed a variable interest entity
(“VIE”) and, if so, whether we are deemed to be the primary beneficiary and are therefore required to consolidate the entity.
Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements
provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE under
current authoritative accounting guidance, and to establish whether we have any variable interests in the VIE. We then compare
our variable interests, if any, to those of the other venture partners to identify the party that is exposed to the majority of the
VIE’s expected losses, expected residual returns, or both. We use this analysis to determine who should consolidate the VIE. The
comparison uses both qualitative and quantitative analytical techniques that may involve the use of a number of assumptions
about the amount and timing of future cash flows.

For an entity that is not considered to be a VIE, the general partners in a limited partnership (or similar entity) are presumed to
control the entity regardless of the level of their ownership and, accordingly, may be required to consolidate the entity. We
evaluate the partnership agreements or other relevant contracts to determine whether there are provisions in the agreements that
would overcome this presumption. If the agreements provide the limited partners with either (a) the substantive ability to
dissolve or liquidate the limited partnership or otherwise remove the general partners without cause or (b) substantive
participating rights, the limited partners’ rights overcome the presumption of control by a general partner of the limited
partnership, and, therefore, the general partner must account for its investment in the limited partnership using the equity method
of accounting.

When we obtain an economic interest in an entity that is structured at the date of acquisition as a tenant-in-common interest, we
evaluate the tenancy-in-common agreements or other relevant documents to ensure that the entity does not qualify as a VIE and
does not meet the control requirement required for consolidation. We also use judgment in determining whether the shared
decision-making involved in a tenant-in-common interest investment creates an opportunity for us to have significant influence
on the operating and financial decisions of these investments and thereby creates some responsibility by us for a return on our
investment. We account for tenancy-in-common interests under the equity method of accounting.

W. P. Carey 2009 10-K — 39

Impairments

We periodically assess whether there are any indicators that the value of our long-lived assets, including goodwill, may be
impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, the
vacancy of a property that is not subject to a lease; a lease default by a tenant that is experiencing financial difficulty; the
termination of a lease by a tenant; or the rejection of a lease in a bankruptcy proceeding. We may incur impairment charges on
long-lived assets, including real estate, direct financing leases, assets held for sale and equity investments in real estate. We may
also incur impairment charges on marketable securities and goodwill. Estimates and judgments used when evaluating whether
these assets are impaired are presented below.

Real Estate

For real estate assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset
is impaired and to determine the amount of the charge. First, we compare the carrying value of the property to the future net
undiscounted cash flow that we expect the property will generate, including any estimated proceeds from the eventual sale of the
property. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values and holding
periods. We estimate market rents and residual values using market information from outside sources such as broker quotes or
recent comparable sales. In cases where the available market information is not deemed appropriate, we perform a future net
cash flow analysis discounted for inherent risk associated with each asset to determine an estimated fair value. As our investment
objective is to hold properties on a long-term basis, holding periods used in the undiscounted cash flow analysis generally range
from five to ten years. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation
of long-lived assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining the
best possible estimate of future cash flows. If the future net undiscounted cash flow of the property is less than the carrying
value, the property is considered to be impaired. We then measure the loss as the excess of the carrying value of the property
over its estimated fair value. The property’s estimated fair value is primarily determined using market information from outside
sources such as broker quotes or recent comparable sales.

Direct Financing Leases

We review our direct financing leases at least annually to determine whether there has been an other-than-temporary decline in
the current estimate of residual value of the property. The residual value is our estimate of what we could realize upon the sale of
the property at the end of the lease term, based on market information from outside sources such as broker quotes or recent
comparable sales. If this review indicates that a decline in residual value has occurred that is other-than-temporary, we recognize
an impairment charge and revise the accounting for the direct financing lease to reflect a portion of the future cash flow from the
lessee as a return of principal rather than as revenue. While we evaluate direct financing leases if there are any indicators that the
residual value may be impaired, the evaluation of a direct financing lease can be affected by changes in long-term market
conditions even though the obligations of the lessee are being met.

Assets Held for Sale

We classify assets that are accounted for as operating leases as held for sale when we have entered into a contract to sell the
property, all material due diligence requirements have been satisfied and we believe it is probable that the disposition will occur
within one year. When we classify an asset as held for sale, we calculate its estimated fair value as the expected sale price, less
expected selling costs. We base the expected sale price on the contract and the expected selling costs on information provided by
brokers and legal counsel. We then compare the asset’s estimated fair value to its carrying value, and if the estimated fair value is
less than the property’s carrying value, we reduce the carrying value to the estimated fair value. We will continue to review the
initial impairment for subsequent changes in the estimated fair value, and may recognize an additional impairment charge if
warranted.

If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously
classified as held for sale, we reclassify the property as held and used. We measure and record a property that is reclassified as
held and used at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any
depreciation expense that would have been recognized had the property been continuously classified as held and used, or (b) the
estimated fair value at the date of the subsequent decision not to sell.

Equity Investments in Real Estate and CPA® REITs

We evaluate our equity investments in real estate and in the CPA® REITs on a periodic basis to determine if there are any
indicators that the value of our equity investment may be impaired and to establish whether or not that impairment is other-than-
temporary. To the extent impairment has occurred, we measure the charge as the excess of the carrying value of our investment
over its estimated fair value, which is determined by multiplying the estimated fair value of the underlying venture’s net assets
by our ownership interest percentage. For our unconsolidated ventures in real estate, we calculate the estimated fair value of the
underlying venture’s real estate or net investment in direct financing lease as described in Real Estate and Direct Financing
Leases above. The fair value of the underlying venture’s debt, if any, is calculated based on market interest rates and other
market information. The fair value of the underlying venture’s other assets and liabilities is generally assumed to be equal to
their carrying value. For our investments in the CPA® REITs, we calculate the estimated fair value of our investment using the
most recently published net asset value of each CPA® REIT.

W. P. Carey 2009 10-K — 40

Marketable Securities

We evaluate our marketable securities for impairment if a decline in estimated fair value below cost basis is significant and/or
has lasted for an extended period of time. We review the underlying cause of the decline in value and the estimated recovery
period, as well as the severity and duration of the decline, to determine if the decline is other-than-temporary. In our evaluation,
we consider our ability and intent to hold these investments for a reasonable period of time sufficient for us to recover our cost
basis. We also evaluate the near-term prospects for each of these investments in relation to the severity and duration of the
decline. If we determine that the decline is other-than-temporary, we record an impairment charge to reduce our cost basis to the
estimated fair value of the security.

Goodwill

We evaluate goodwill recorded by our investment management segment for possible impairment at least annually using a two-
step process. To identify any impairment, we first compare the estimated fair value of our investment management segment with
its carrying amount, including goodwill. We calculate the estimated fair value of the investment management segment by
applying a multiple, based on comparable companies, to earnings. If the fair value of the investment management segment
exceeds its carrying amount, we do not consider goodwill to be impaired and no further analysis is required. If the carrying
amount of the investment management segment exceeds its estimated fair value, we then perform the second step to measure the
amount of the impairment charge.

For the second step, we determine the impairment charge by comparing the implied fair value of the goodwill with its carrying
amount and record an impairment charge equal to the excess of the carrying amount over the implied fair value. We determine
the implied fair value of the goodwill by allocating the estimated fair value of the investment management segment to its assets
and liabilities. The excess of the estimated fair value of the investment management segment over the amounts assigned to its
assets and liabilities is the implied fair value of the goodwill.

Provision for Uncollected Amounts from Lessees

On an ongoing basis, we assess our ability to collect rent and other tenant-based receivables and determine an appropriate
allowance for uncollected amounts. Because we have a limited number of lessees (21 lessees represented 72% of lease revenues
during 2009), we believe that it is necessary to evaluate the collectability of these receivables based on the facts and
circumstances of each situation rather than solely using statistical methods. Therefore, in recognizing our provision for
uncollected rents and other tenant receivables, we evaluate actual past due amounts and make subjective judgments as to the
collectability of those amounts based on factors including, but not limited to, our knowledge of a lessee’s circumstances, the age
of the receivables, the tenant’s credit profile and prior experience with the tenant. Even if a lessee has been making payments, we
may reserve for the entire receivable amount from the lessee if we believe there has been significant or continuing deterioration
in the lessee’s ability to meet its lease obligations.

Determination of Certain Asset Based Management and Performance Revenue

We earn asset-based management and performance revenue for providing property management, leasing, advisory and other
services to the CPA® REIT’s. For certain CPA® REIT’s, this revenue is based on third party annual estimated valuations of the
underlying real estate assets of the CPA® REIT. The valuation uses estimates, including but not limited to market rents, residual
values and increases in the CPI and discount rates. Differences in the assumptions applied would affect the amount of revenue
that we recognize. The effect of any changes in the annual valuations will affect both revenue and compensation expense and
therefore the determination of net income.

Income Taxes

Real Estate Ownership Operations

We have elected to be treated as a partnership for U.S. federal income tax purposes. Prior to September 30, 2007, our real estate
ownership operations were conducted through partnership or limited liability companies electing to be treated as partnerships for
U.S. federal income tax purposes. As partnerships, we and our partnership subsidiaries were generally not directly subject to tax
and the taxable income or loss of these operations was included in the income tax returns of the members; accordingly, no
provision for income tax expense or benefit related to these partnerships was reflected in the consolidated financial statements.
Subsequent to September 30, 2007, our real estate operations have been conducted through a subsidiary REIT. In order to
maintain its qualification as a REIT, the subsidiary is required to, among other things, distribute at least 90% of its REIT net
taxable income to its shareholders (excluding net capital gains) and meet certain tests regarding the nature of its income and
assets. As a REIT, the subsidiary is not subject to U.S. federal income tax with respect to the portion of its income that meets
certain criteria and is distributed annually to its shareholders. Accordingly, no provision has been made for U.S. federal income
taxes related to the REIT subsidiary in the consolidated financial statements. We believe we have operated, and we intend to
continue to operate, in a manner that allows the subsidiary to continue to meet the requirements for taxation as a REIT. Many of
these requirements, however, are highly technical and complex. If we were to fail to meet these requirements, the subsidiary
would be subject to U.S. federal income tax. These operations are subject to certain state, local and foreign taxes and a provision
for such taxes is included in the consolidated financial statements.

W. P. Carey 2009 10-K — 41

Investment Management Operations

We conduct our investment management operations primarily through taxable subsidiaries. These operations are subject to
federal, state, local and foreign taxes, as applicable. Our financial statements are prepared on a consolidated basis including these
taxable subsidiaries and include a provision for current and deferred taxes on these operations.

Our consolidated effective income tax rate is influenced by tax planning opportunities available to us in the various jurisdictions
in which we operate. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions.
We establish tax reserves in accordance with current authoritative accounting guidance for uncertainty in income taxes. This
guidance is based on a benefit recognition model, which we believe could result in a greater amount of benefit (and a lower
amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than
not of being sustained, the guidance permits a company to recognize the largest amount of tax benefit that is greater than 50%
likely of being ultimately realized upon settlement. The tax position must be derecognized when it is no longer more likely than
not of being sustained.

Future Accounting Requirements

In June 2009, the FASB amended the existing guidance regarding accounting for transfers and servicing of financial assets and
extinguishment of liabilities by eliminating the concept of a qualifying special-purpose entity; limiting the circumstances where
the transfer of a portion of a financial asset will qualify as a sale even if all other derecognition criteria are met; clarifying and
amending the derecognition criteria for a transfer to be accounted for as a sale; and expanding the disclosures surrounding
transfers of financial assets. The new guidance is effective for us beginning January 1, 2010. We are currently assessing the
potential impact that the adoption of the new guidance will have on our financial position and results of operations.

In June 2009, the FASB issued amended guidance related to the consolidation of VIEs. These amendments require an enterprise
to qualitatively assess the determination of the primary beneficiary of a VIE based on whether the entity (1) has the power to
direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to
receive benefits of the VIE that could potentially be significant to the VIE. The amendments change the consideration of kick-out
rights in determining if an entity is a VIE, which may cause certain additional entities to now be considered VIEs. Additionally,
they require an ongoing reconsideration of the primary beneficiary and provide a framework for the events that trigger a
reassessment of whether an entity is a VIE. This guidance is effective for us beginning January 1, 2010. We are currently
assessing the potential impact that the adoption of the new guidance will have on our financial position and results of operations.

Subsequent Event

In February 2010, we entered into a domestic investment at a total cost of $47.6 million, which we funded with proceeds of
$36.1 million from a sale of property in December 2009 in an exchange transaction under Section 1031 of the Code and cash of
$11.5 million.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market Risks

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates and equity prices.
The primary risks to which we are exposed are interest rate risk and foreign currency exchange risk. We are also exposed to
market risk as a result of concentrations in certain tenant industries.

We do not generally use derivative financial instruments to manage foreign currency exchange rate risk exposure and do not use
derivative instruments to hedge credit/market risks or for speculative purposes.

Interest Rate Risk

The value of our real estate and related fixed rate debt obligations is subject to fluctuations based on changes in interest rates.
The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the
creditworthiness of lessees, all of which may affect our ability to refinance property-level mortgage debt when balloon payments
are scheduled. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic
and international economic and political conditions, and other factors beyond our control. An increase in interest rates would
likely cause the value of our owned and managed assets to decrease, which would create lower revenues from managed assets
and lower investment performance for the managed funds. Increases in interest rates may also have an impact on the credit
profile of certain tenants.

W. P. Carey 2009 10-K — 42

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we
attempt to obtain mortgage financing on a long-term, fixed rate basis. However, from time to time, we or our venture partners
may obtain variable rate non-recourse mortgage loans and, as such, may enter into interest rate swap agreements or interest rate
cap agreements with lenders that effectively convert the variable rate debt service obligations of the loan to a fixed rate. Interest
rate swaps are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow
over a specific period, and interest rate caps limit the effective borrowing rate of variable rate debt obligations while allowing
participants to share in downward shifts in interest rates. These interest rate swaps and caps are derivative instruments designated
as cash flow hedges on the forecasted interest payments on the debt obligation. The notional, or face, amount on which the swaps
or caps are based is not exchanged. Our objective in using these derivatives is to limit our exposure to interest rate movements.
At December 31, 2009, we estimate that the fair value of our interest rate swaps and interest rate caps, which are included in and
Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, was a net liability of
$0.6 million (Note 13).

At December 31, 2009, a significant portion (approximately 64%) of our long-term debt either bore interest at fixed rates, was
swapped or capped to a fixed rate, or bore interest at fixed rates that were scheduled to convert to then-prevailing market fixed
rates at certain future points during their term. The estimated fair value of these instruments is affected by changes in market
interest rates. The annual interest rates on our fixed rate debt at December 31, 2009 ranged from 4.9% to 8.1%. The annual
interest rates on our variable rate debt at December 31, 2009 ranged from 1.3% to 7.3%. Our debt obligations are more fully
described in Financial Condition above. The following table presents principal cash flows based upon expected maturity dates of
our debt obligations at December 31, 2009 (in thousands):

Fixed rate debt
Variable rate debt

2010
$11,632
$ 7,492

2011
$ 26,206
$113,664

2012
$31,775
$ 2,718

2013
$2,678
$2,867

2014
$2,486
$3,046

Thereafter
72,283
$
49,483
$

Total
$147,060
$179,270

Fair value
$ 137,603
$ 173,071

The estimated fair value of our fixed rate debt and our variable rate debt that bears interest at fixed rates or has effectively been
converted to a fixed rate through the use of interest rate swaps or caps is affected by changes in interest rates. A decrease or
increase in interest rates of 1% would change the estimated fair value of such debt at December 31, 2009 by an aggregate
increase of $10.8 million or an aggregate decrease of $10.3 million, respectively. Annual interest expense on our unhedged
variable rate debt that does not bear interest at fixed rates at December 31, 2009 would increase or decrease by $1.2 million for
each respective 1% change in annual interest rates. As more fully described in Summary of Financing in Item 7 above, a portion
of the debt classified as variable rate debt in the tables above bore interest at fixed rates at December 31, 2009 but has interest
rate reset features that will change the fixed interest rates to then-prevailing market fixed rates at certain points during their term.
Such debt is generally not subject to short-term fluctuations in interest rates.

Foreign Currency Exchange Rate Risk

We own investments in the European Union, and as a result we are subject to risk from the effects of exchange rate movements
of foreign currencies, primarily the Euro, which may affect future costs and cash flows. We manage foreign currency exchange
rate movements by generally placing both our debt obligations to the lender and the tenant’s rental obligations to us in the same
currency. We are generally a net receiver of the foreign currency (we receive more cash than we pay out), and therefore our
foreign operations benefit from a weaker U.S. dollar, and are adversely affected by a stronger U.S. dollar, relative to the Euro.
For the year ended December 31, 2009, we recognized net realized and unrealized foreign currency gains of less than
$0.1 million and $0.2 million, respectively. These gains are included in the consolidated financial statements and were primarily
due to changes in the value of the Euro on accrued interest receivable on notes receivable from wholly-owned subsidiaries.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases and scheduled payments for
mortgage notes payable (principal and interest) for our foreign real estate operations during each of the next five years and
thereafter are as follows (in thousands):

Future minimum rents (a)
Mortgage notes payable (a) (b)

2010
$ 5,716
$ 3,726

2011
$ 5,442
$ 3,767

2012
$ 5,181
$ 3,686

2013
$ 1,392
$ 3,690

2014
$ 1,048
$ 3,718

Thereafter
11,525
26,692

$
$

Total
$ 30,304
$ 45,279

(a) Based on the exchange rate of the Euro at December 31, 2009.
(b) Interest on unhedged variable debt obligations was calculated using the applicable annual interest rates and balances

outstanding at December 31, 2009.

W. P. Carey 2009 10-K — 43

Item 8.

Financial Statements and Supplementary Data.

The following financial statements and schedule are filed as a part of this Report:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Schedule III — Real Estate and Accumulated Depreciation

Notes to Schedule III

Financial statement schedules other than those listed above are omitted because the required information is given in the financial
statements, including the notes thereto, or because the conditions requiring their filing do not exist.

W. P. Carey 2009 10-K — 44

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of W. P. Carey & Co. LLC:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the
financial position of W. P. Carey & Co. LLC and its subsidiaries at December 31, 2009 and December 31, 2008, and the results
of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with
accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement
schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial
statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted
our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of
material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our
audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

New York, New York
February 26, 2010

W. P. Carey 2009 10-K — 45

W. P. CAREY & CO. LLC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

Assets
Investments in real estate:
Real estate, at cost
Operating real estate, at cost
Accumulated depreciation

Net investments in properties
Net investment in direct financing leases
Equity investments in real estate and CPA® REITs

Net investments in real estate

Cash and cash equivalents
Due from affiliates
Intangible assets and goodwill, net
Other assets, net
Total assets

Liabilities and Equity
Liabilities:
Non-recourse debt
Line of credit
Accounts payable, accrued expenses and other liabilities
Income taxes, net
Distributions payable
Total liabilities

Redeemable noncontrolling interests
Commitments and contingencies (Note 10)
Equity:
W. P. Carey members’ equity:
Listed shares, no par value, 100,000,000 shares authorized; 39,204,605 and 39,589,594

shares issued and outstanding, respectively
Distributions in excess of accumulated earnings
Deferred compensation obligation
Accumulated other comprehensive loss
Total W. P. Carey members’ equity

Noncontrolling interests

Total equity
Total liabilities and equity

See Notes to Consolidated Financial Statements.

December 31,

2009

2008

525,607
85,927
(112,286)
499,248
80,222
304,990
884,460
18,450
35,998
85,187
69,241
$ 1,093,336

603,044
84,547
(113,262)
574,329
83,792
260,620
918,741
16,799
53,423
93,310
28,863
$ 1,111,136

215,330
111,000
51,710
43,831
31,365
453,236
7,692

245,874
81,000
42,323
58,011
19,508
446,716
18,085

754,507
(138,442)
10,249
(681)
625,633
6,775
632,408
$ 1,093,336

757,921
(116,990)
—
(828)
640,103
6,232
646,335
$ 1,111,136

W. P. Carey 2009 10-K — 46

W. P. CAREY & CO. LLC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)

Years ended December 31,
2008

2009

2007

Revenues
Asset management revenue
Structuring revenue
Wholesaling revenue
Reimbursed costs from affiliates
Lease revenues
Other real estate income

Operating Expenses
General and administrative
Reimbursable costs
Depreciation and amortization
Property expenses
Other real estate expenses
Impairment charges
Provision for settlement (Note 9)

Other Income and Expenses
Other interest income
Income from equity investments in real estate and CPA® REITs
Gain on sale of investment in direct financing lease
Other income and (expenses)
Interest expense

Income from continuing operations before income taxes
Provision for income taxes
Income from continuing operations
Discontinued Operations
Income from operations of discontinued properties
Gains on sale of real estate, net
Impairment charges
Income from discontinued operations
Net Income
Add: Net loss (income) attributable to noncontrolling interests
Less: Net income attributable to redeemable noncontrolling interests
Net Income Attributable to W. P. Carey Members
Basic Earnings Per Share
Income from continuing operations attributable to W. P. Carey members
Income from discontinued operations attributable to W. P. Carey members
Net income attributable to W. P. Carey members
Diluted Earnings Per Share
Income from continuing operations attributable to W. P. Carey members
Income from discontinued operations attributable to W. P. Carey members
Net income attributable to W. P. Carey members
Weighted Average Shares Outstanding
Basic
Diluted
Amounts Attributable to W. P. Carey Members
Income from continuing operations, net of tax
Income from discontinued operations, net of tax
Net income

76,621
23,273
6,550
48,715
65,493
15,224
235,876

(62,615)
(48,715)
(23,624)
(8,128)
(7,308)
(9,525)
—
(159,915)

1,714
13,425
—
7,317
(15,189)
7,267
83,228
(22,793)
60,435

3,331
7,701
(899)
10,133
70,568
713
(2,258)
69,023

1.48
0.26
1.74

1.49
0.25
1.74

39,019,709
39,712,735

58,890
10,133
69,023

See Notes to Consolidated Financial Statements.

80,714
20,236
5,129
41,179
70,696
20,670
238,624

(62,590)
(41,179)
(24,428)
(7,259)
(8,196)
(473)
—
(144,125)

2,884
14,198
1,103
1,444
(18,858)
771
95,270
(23,521)
71,749

7,394
—
(538)
6,856
78,605
950
(1,508)
78,047

1.82
0.18
2.00

1.80
0.17
1.97

83,051
78,175
27
13,782
70,207
12,714
257,956

(61,846)
(13,782)
(24,247)
(5,908)
(7,690)
(420)
(29,979)
(143,872)

6,842
18,357
—
3,114
(20,266)
8,047
122,131
(51,739)
70,392

5,825
15,486
(2,914)
18,397
88,789
(4,781)
(4,756)
79,252

1.74
0.34
2.08

1.71
0.34
2.05

39,202,520
40,221,112

38,113,857
39,868,208

71,191
6,856
78,047

66,249
13,003
79,252

W. P. Carey 2009 10-K — 47

W. P. CAREY & CO. LLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Net Income
Other Comprehensive Income (Loss):

Foreign currency translation adjustment
Unrealized loss on derivative instruments
Change in unrealized appreciation on marketable securities

Comprehensive Income

Amounts Attributable to Noncontrolling Interests:

Net loss (income)
Foreign currency translation adjustment

Comprehensive loss (income) attributable to noncontrolling interests

Amounts Attributable to Redeemable Noncontrolling Interests:

Net income
Foreign currency translation adjustment

Comprehensive income attributable to redeemable noncontrolling interests

Years ended December 31,
2008

2009

2007

70,568

78,605

88,789

619
(482)
53
190
70,758

713
(31)
682

(2,258)
(12)
(2,270)

(3,199)
(419)
(29)
(3,647)
74,958

950
81
1,031

(1,508)
—
(1,508)

2,533
—
(42)
2,491
91,280

(4,781)
223
(4,558)

(4,756)
—
(4,756)

Comprehensive Income Attributable to W. P. Carey Members

69,170

74,481

81,966

See Notes to Consolidated Financial Statements.

W. P. Carey 2009 10-K — 48

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W. P. CAREY & CO. LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Cash Flows — Operating Activities
Net income
Adjustments to net income:

Depreciation and amortization including intangible assets and deferred

financing costs

(Income) loss from equity investments in real estate and CPA® REITs

in excess of distributions received

Straight-line rent adjustments
Gains on sale of real estate and investment in direct financing lease
Gain on lease termination (a)
Gain on extinguishment of debt
Allocation of earnings to profit sharing interest
Management income received in shares of affiliates
Unrealized (gain) loss on foreign currency transactions, warrants and

securities

Realized gain on foreign currency transactions and other
Impairment charges
Stock-based compensation expense
Decrease in deferred acquisition revenue receivable
Increase in structuring revenue receivable
(Decrease) increase in income taxes, net
(Decrease) increase in settlement provision
Net changes in other operating assets and liabilities

Net cash provided by operating activities

Cash Flows — Investing Activities

Distributions received from equity investments in real estate and CPA®

REITs in excess of equity income

Capital contributions made to equity investments in real estate
Purchases of real estate and equity investments in real estate
Capital expenditures
Proceeds from sales of real estate, net investment in direct financing

lease and securities

Proceeds from transfer of profit sharing interest
Funds placed in escrow in connection with the sale of property
Funds released from escrow in connection with the sale of property
Loans to affiliates
Proceeds from repayment of loans to affiliates
VAT refunded on purchase of real estate
Payment of deferred acquisition revenue to affiliate

Net cash provided by (used in) investing activities

Cash Flows — Financing Activities

Distributions paid
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Purchase of noncontrolling interests
Distributions to profit sharing interest
Scheduled payments of mortgage principal
Proceeds from credit facilities
Prepayments of credit facilities
Proceeds from mortgage financing
Prepayments of mortgage principal
Proceeds from loans from affiliates
Repayment of loans from affiliates
Funds placed in escrow in connection with financing
Payment of financing costs, net of deposits refunded
Proceeds from issuance of shares (b)
Windfall tax benefits associated with stock-based compensation awards
Repurchase and retirement of shares
Net cash used in financing activities

Years ended December 31,
2008

2009

2007

70,568

78,605

88,789

24,476

27,197

27,321

(2,258)
2,223
(7,701)
—
(6,991)
3,900
(31,721)

(174)
(257)
10,424
9,336
25,068
(11,672)
(9,276)
—
(1,401)
74,544

39,102
(2,872)
(39,632)
(7,775)

43,487
21,928
(36,132)
—
—
—
—
—

18,106

(78,618)
2,947
(5,505)
(15,380)
(5,645)
(9,534)
150,500
(148,518)
42,495
(13,974)
1,625
(1,770)
—
(862)
1,507
143
(10,686)
(91,275)

1,866
2,227
(1,103)
(4,998)
—
—
(40,717)

2,656
(2,250)
1,011
7,278
48,266
(10,512)
(8,079)
(29,979)
(8,221)
63,247

19,852
(1,769)
(201)
(14,051)

5,062
—
—
636
—
—
3,189
(120)
12,598

(87,700)
2,582
(5,607)
—
—
(9,678)
129,300
(111,572)
10,137
—
—
(7,569)
(400)
(375)
23,350
2,156
(15,413)
(70,789)

(2,296)
2,972
(15,827)
—
—
—
(55,535)

(1,659)
(1,332)
3,334
5,551
16,164
(55,897)
1,796
29,979
4,111
47,471

17,441
(3,596)
(80,491)
(15,987)

42,214
—
(19,515)
19,410
(8,676)
8,676
—
(524)
(41,048)

(71,608)
1,703
(8,168)
—
—
(16,072)
182,781
(102,000)
6,602
(13,090)
7,569
—
—
(1,350)
20,682
1,939
(25,525)
(16,537)

Change in Cash and Cash Equivalents During the Year

Effect of exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

276

1,651
16,799
18,450

(394)
4,662
12,137
16,799

143
(9,971)
22,108
12,137

(Continued)

W. P. Carey 2009 10-K — 50

W. P. CAREY & CO. LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS

Non-cash activities

(a) In October 2008, we terminated the lease on a domestic property in exchange for a gross termination fee of $7.5 million.
The termination fee consisted of tenant’s assumption of the existing $6.0 million debt balance by substituting one of their
owned assets as collateral and a $1.5 million cash payment. In connection with the lease termination, we wrote off $0.8
million of straight line rent adjustments and $0.2 million of unamortized leasing commission.

(b) We issued restricted shares valued at $0.8 million in 2009, $0.2 million in 2008 and $0.4 million in 2007, to certain

directors in consideration of service rendered. Stock-based awards (net of adjustment – Note 14) valued at $6.7 million,
$9.6 million and $7.4 million in 2009, 2008 and 2007, respectively, were issued to officers and employees and were
recorded to additional paid-in capital, of which $0.1 million, less than $0.1 million and $0.2 million, respectively, was
forfeited in 2009, 2008 and 2007.

Supplemental cash flows information (in thousands)

Interest paid, net of amounts capitalized
Income taxes paid

Years ended December 31,
2008

2009

2007

$
$

14,845
35,039

$
$

18,753
33,280

$
$

19,311
48,030

See Notes to Consolidated Financial Statements.

W. P. Carey 2009 10-K — 51

Note 1. Business

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

W. P. Carey, its consolidated subsidiaries and predecessors provide long-term sale-leaseback and build-to-suit transactions for
companies worldwide and manage a global investment portfolio. We invest primarily in commercial properties domestically and
internationally that are each triple-net leased to single corporate tenants, which requires each tenant to pay substantially all of the
costs associated with operating and maintaining the property. We also earn revenue as the advisor to publicly owned, non-
actively traded CPA® REITs sponsored by us that invest in similar properties. We are currently the advisor to the following
CPA® REITs: CPA®:14, CPA®:15, CPA®:16 – Global and CPA®:17 – Global. At December 31, 2009, we owned and managed
880 properties domestically and internationally, including our own portfolio. Our portfolio was comprised of our full or partial
ownership interest in 170 properties, substantially all of which were net leased to 79 tenants, and totaled approximately
14 million square feet (on a pro rata basis) with an occupancy rate of approximately 94%.

Primary Business Segments

Investment Management — We structure and negotiate investments and debt placement transactions for the CPA® REITs, for
which we earn structuring revenue, and manage their portfolios of real estate investments, for which we earn asset-based
management and performance revenue. We earn asset-based management and performance revenue from the CPA® REITs based
on the value of their real estate-related assets under management. As funds available to the CPA® REITs are invested, the asset
base from which we earn revenue increases. In addition, we also receive a percentage of distributions of available cash from
CPA®:17 – Global’s operating partnership. We may also earn incentive and disposition revenue and receive other compensation
in connection with providing liquidity alternatives to CPA® REIT shareholders.

Real Estate Ownership — We own and invest in commercial properties in the United States (“U.S.”) and the European Union
that are then leased to companies, primarily on a triple-net leased basis. We may also invest in other properties if opportunities
arise.

Organization

We commenced operations on January 1, 1998 by combining the limited partnership interests of nine CPA® partnerships, at
which time we listed on the New York Stock Exchange. On June 28, 2000, we acquired the net lease real estate management
operations of Carey Management LLC (“Carey Management”) from Wm. Polk Carey, our Chairman and then Chief Executive
Officer, subsequent to receiving the approval of the transaction by our shareholders. The assets acquired included the advisory
agreements with four affiliated CPA® REITs, our management agreement, the stock of an affiliated broker-dealer, investments in
the common stock of the CPA® REITs, and certain office furniture, fixtures, equipment and employees required to carry on the
business operations of Carey Management.

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements reflect all of our accounts, including those of our majority-owned and/or controlled
subsidiaries. The portion of equity in a subsidiary that is not attributable, directly or indirectly, to us is presented as
noncontrolling interests or redeemable noncontrolling interests. All significant intercompany accounts and transactions have
been eliminated.

When we obtain an economic interest in an entity, we evaluate the entity to determine if the entity is deemed a variable interest
entity, or VIE, and if we are deemed to be the primary beneficiary under current authoritative accounting guidance. We
consolidate (i) entities that are VIEs and of which we are deemed to be the primary beneficiary and (ii) entities that are non-VIEs
that we control. Entities that we account for under the equity method (i.e., at cost, increased or decreased by our share of
earnings or losses, less distributions, plus fundings) include (i) entities that are VIEs and of which we are not deemed to be the
primary beneficiary and (ii) entities that are non-VIEs that we do not control but over which we have the ability to exercise
significant influence. We will reconsider our determination of whether an entity is a VIE and who the primary beneficiary is if
certain events occur that are likely to cause a change in the original determinations.

In determining whether we control a non-VIE, we consider that the general partners in a limited partnership (or similar entity)
are presumed to control the entity regardless of the level of their ownership and, accordingly, may be required to consolidate the
entity. This presumption may be overcome if the agreements provide the limited partners with either (a) the substantive ability to
dissolve (liquidate) the limited partnership or otherwise remove the general partners without cause or (b) substantive
participating rights. If it is deemed that the limited partners’ rights overcome the presumption of control by a general partner of
the limited partnership, the general partner must account for its investment in the limited partnership using the equity method of
accounting.

W. P. Carey 2009 10-K — 52

Notes to Consolidated Financial Statements

We have investments in tenant-in-common interests in various domestic and international properties. Consolidation of these
investments is not required as they do not qualify as VIEs and do not meet the control requirement required for consolidation.
Accordingly, we account for these investments using the equity method of accounting. We use the equity method of accounting
because the shared decision-making involved in a tenant-in-common interest investment creates an opportunity for us to have
significant influence on the operating and financial decisions of these investments and thereby creates some responsibility by us
for a return on our investment.

In February 2007, we formed CPA®:17 – Global, an affiliated REIT. In November 2007, the Securities and Exchange
Commission (the “SEC”) declared effective CPA®:17 – Global’s registration statement to sell up to $2.0 billion of its common
stock in an initial public offering, plus up to an additional $475.0 million of its common stock under its distribution reinvestment
and stock purchase plan. In December 2007, we commenced fundraising for CPA®:17 – Global; however, no shares were issued
until January 2008. Therefore, as of and during the period ended December 31, 2007, the financial results of CPA®:17 – Global
were included in our consolidated financial statements, as we owned all of CPA®:17 – Global’s outstanding common stock.
Beginning in 2008, we have accounted for our interest in CPA®:17 – Global under the equity method of accounting.

In March 2008, we formed Carey Watermark Investors Incorporated (“Carey Watermark”) for the purpose of acquiring interests
in lodging and lodging-related properties and filed a registration statement with the SEC to sell up to $1 billion of common stock
of Carey Watermark in an initial public offering, plus up to an additional $237.5 million of its common stock under its
distribution reinvestment plan. However, during the fourth quarter of 2008 we expensed previously capitalized costs of
$1.6 million related to this potential offering because market conditions made it difficult to predict if and when we would
commence fundraising efforts for Carey Watermark. As of and during the years ended December 31, 2009 and 2008, the
financial statements of Carey Watermark, which had no operations during the periods, were included in our consolidated
financial statements, as we owned all of its outstanding common stock.

Out-of-Period Adjustments

During the third quarter of 2009, we recorded an adjustment to record an entity on the equity method that had been incorrectly
accounted for under a proportionate consolidation method since its acquisition in 1989. This adjustment was recorded as a
reduction to Real estate and Non-recourse debt of approximately $23.3 million and $15.0 million, respectively, and an increase
to Equity investment in real estate and CPA® REITs of $7.8 million on our consolidated balance sheet at September 30, 2009,
and an adjustment to classify approximately $1.2 million of net earnings to income from equity investments in real estate and
CPA® REITs for the nine months ended September 30, 2009, respectively, which did not result in any change to previously
reported net income attributable to W. P. Carey members. We have concluded that the effect of this adjustment was not material
to any of our previously issued financial statements, nor was it material to the quarter or fiscal year in which it was recorded. As
such, these adjustments were recorded in our consolidated balance sheets and statements of income at September 30, 2009 and
for the nine months ended September 30, 2009. Prior period financial statements have not been revised in the current filing, nor
will such amounts be revised in subsequent filings.

During the third quarter of 2007, we determined that a longer schedule of depreciation/amortization of assets in certain of our
equity investments should appropriately be applied to reflect the lives of the underlying assets rather than the expected holding
period of these investments. We concluded that these adjustments were not material to any prior periods’ consolidated financial
statements. We also concluded that the cumulative adjustment was not material to the third quarter of 2007, nor to the year ended
December 31, 2007. As such, the cumulative effect was recorded in the consolidated statements of income as a one-time
cumulative out-of-period adjustment in the third quarter of 2007. The effect of this adjustment for the year ended December 31,
2007 was to increase income from continuing operations before income taxes by approximately $4.2 million and net income by
approximately $3.5 million. There was no associated net impact on our cash flow from operations for the year ended
December 31, 2007.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the
accompanying notes. Actual results could differ from those estimates.

Reclassifications and Revisions

Certain prior year amounts have been reclassified to conform to the current year presentation. The consolidated financial
statements included in this Report have been retrospectively adjusted to reflect the adoption of several new accounting
pronouncements during the year ended December 31, 2009.

W. P. Carey 2009 10-K — 53

Notes to Consolidated Financial Statements

Purchase Price Allocation

When we acquire properties accounted for as operating leases, we allocate the purchase costs to the tangible and intangible assets
and liabilities acquired based on their estimated fair values. We determine the value of the tangible assets, consisting of land and
buildings, as if vacant, and record intangible assets, including the above-market and below-market value of leases, the value of
in-place leases and the value of tenant relationships, at their relative estimated fair values. See Real Estate Leased to Others and
Depreciation below for a discussion of our significant accounting policies related to tangible assets. We include the value of
below-market leases in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements.

We record above-market and below-market lease values for owned properties based on the present value (using an interest rate
reflecting the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant
to the leases negotiated and in place at the time of acquisition of the properties and (ii) our estimate of fair market lease rates for
the property or equivalent property, both of which are measured over a period equal to the estimated market lease term. We
amortize the capitalized above-market lease value as a reduction of rental income over the estimated market lease term. We
amortize the capitalized below-market lease value an increase to rental income over the initial term and any fixed rate renewal
periods in the respective leases.

We allocate the total amount of other intangibles to in-place lease values and tenant relationship intangible values based on our
evaluation of the specific characteristics of each tenant’s lease and our overall relationship with each tenant. The characteristics
we consider in allocating these values include estimated market rent, the nature and extent of the existing relationship with the
tenant, the expectation of lease renewals, estimated carrying costs of the property if vacant and estimated costs to execute a new
lease, among other factors. We determine these values using third party appraisals or our estimates. We amortize the capitalized
value of in-place lease intangibles to expense over the remaining initial term of each lease. We amortize the capitalized value of
tenant relationships to expense over the initial and expected renewal terms of the lease. No amortization period for intangibles
will exceed the remaining depreciable life of the building.

If a lease is terminated, we charge the unamortized portion of each intangible, including above-market and below-market lease
values, in-place lease values and tenant relationship values, to expense.

Operating Real Estate

We carry land and buildings and personal property at cost less accumulated depreciation. We capitalize renewals and
improvements, while we expense as incurred replacements, maintenance and repairs that do not improve or extend the lives of
the respective assets.

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are both readily convertible to cash and have a maturity of three
months or less at the time of purchase to be cash equivalents. Items classified as cash equivalents include commercial paper and
money-market funds. At December 31, 2009 and 2008, our cash and cash equivalents were held in the custody of several
financial institutions, and these balances, at times, exceeded federally insurable limits. We seek to mitigate this risk by depositing
funds only with major financial institutions.

Other Assets and Liabilities

We include prepaid expenses, deferred rental income, tenant receivable, deferred charges, escrow balances held by lenders,
restricted cash balances, marketable securities and corporate fixed assets in Other assets. We include profit sharing obligation,
derivative instruments, miscellaneous amounts held on behalf of tenants and deferred revenue, including unamortized below-
market rent intangibles in Other liabilities. Deferred charges are costs incurred in connection with mortgage financings and
refinancings that are amortized over the terms of the mortgages and included in Interest expense in the consolidated financial
statements. Deferred rental income is the aggregate cumulative difference for operating leases between scheduled rents that vary
during the lease term, and rent recognized on a straight-line basis. Marketable securities are classified as available-for-sale
securities and reported at fair value with our interest in unrealized gains and losses on these securities reported as a component of
Other comprehensive income (“OCI”) until realized. Profit sharing obligation is the third party interest in our Carey Storage
investment.

Real Estate Leased to Others

We lease real estate to others primarily on a triple-net leased basis, whereby the tenant is generally responsible for all operating
expenses relating to the property, including property taxes, insurance, maintenance, repairs, renewals and improvements. We
charge expenditures for maintenance and repairs, including routine betterments, to operations as incurred. We capitalize
significant renovations that increase the useful life of the properties. For the year ended December 31, 2009, although we are
legally obligated for the payment, pursuant to our lease agreements with our tenants, lessees were responsible for the direct
payment to the taxing authorities of real estate taxes of approximately $8.8 million.

W. P. Carey 2009 10-K — 54

Notes to Consolidated Financial Statements

We diversify our real estate investments among various corporate tenants engaged in different industries, by property type and
by geographic area. Substantially all of our leases provide for either scheduled rent increases, periodic rent adjustments based on
formulas indexed to changes in the CPI or similar indices or percentage rents. CPI-based adjustments are contingent on future
events and are therefore not included in straight-line rent calculations. We recognize rents from percentage rents as reported by
the lessees, which is after the level of sales requiring a rental payment to us is reached.

We account for leases as operating or direct financing leases, as described below:

Operating leases — We record real estate at cost less accumulated depreciation; we recognize future minimum rental revenue on
a straight-line basis over the term of the related leases and charge expenses (including depreciation) to operations as incurred
(Note 4).

Direct financing method — We record leases accounted for under the direct financing method at their net investment (Note 5).
We defer and amortize unearned income to income over the lease term so as to produce a constant periodic rate of return on our
net investment in the lease.

On an ongoing basis, we assess our ability to collect rent and other tenant-based receivables and determine an appropriate
allowance for uncollected amounts. Because we have a limited number of lessees (21 lessees represented 72% of lease revenues
during 2009), we believe that it is necessary to evaluate the collectibility of these receivables based on the facts and
circumstances of each situation rather than solely using statistical methods. Therefore, in recognizing our provision for
uncollected rents and other tenant receivables, we evaluate actual past due amounts and make subjective judgments as to the
collectability of those amounts based on factors including, but not limited to, our knowledge of a lessee’s circumstances, the age
of the receivables, the tenant’s credit profile and prior experience with the tenant. Even if a lessee has been making payments, we
may reserve for the entire receivable amount if we believe there has been significant or continuing deterioration in the lessee’s
ability to meet its lease obligations.

Revenue Recognition

We earn structuring revenue and asset management revenue in connection with providing services to the CPA® REITs. We earn
structuring revenue for investment banking services we provide in connection with the analysis, negotiation and structuring of
transactions, including acquisitions and dispositions and the placement of mortgage financing obtained by the CPA® REITs.
Asset management revenue consists of property management, leasing and advisory revenue. Receipt of the incentive revenue
portion of the asset management revenue (“performance revenue”), however, is subordinated to the achievement of specified
cumulative return requirements by the shareholders of the CPA® REITs. At our option, the performance revenue may be
collected in cash or shares of the CPA® REIT (Note 3).

We recognize all revenue as earned. We earn structuring revenue upon the consummation of a transaction and asset management
revenue when services are performed. We recognize revenue subject to subordination only when the performance criteria of the
CPA® REIT is achieved and contractual limitations are not exceeded.

We are also reimbursed for certain costs incurred in providing services, including broker-dealer commissions paid on behalf of
the CPA® REITs, marketing costs and the cost of personnel provided for the administration of the CPA® REITs. We record
reimbursement income as the expenses are incurred, subject to limitations on a CPA® REIT’s ability to incur offering costs.

We earn wholesaling revenue of $0.15 per share sold in connection with CPA®:17 – Global’s initial public offering. This
revenue is used to cover the cost of wholesaling activities.

Depreciation

We compute depreciation of building and related improvements using the straight-line method over the estimated useful lives of
the properties (generally 40 years) and furniture, fixtures and equipment (generally up to seven years). We compute depreciation
of tenant improvements using the straight-line method over the lesser of the remaining term of the lease or the estimated useful
life.

Impairments

We periodically assess whether there are any indicators that the value of our long-lived assets, including goodwill, may be
impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, the
vacancy of a property that is not subject to a lease; a lease default by a tenant that is experiencing financial difficulty; the
termination of a lease by a tenant; or the rejection of a lease in a bankruptcy proceeding. We may incur impairment charges on
long-lived assets, including real estate, direct financing leases, assets held for sale and equity investments in real estate. We may
also incur impairment charges on marketable securities and goodwill. Our policies for evaluating whether these assets are
impaired are presented below.

W. P. Carey 2009 10-K — 55

Notes to Consolidated Financial Statements

Real Estate

For real estate assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset
is impaired and to determine the amount of the charge. First, we compare the carrying value of the property to the future net
undiscounted cash flow that we expect the property will generate, including any estimated proceeds from the eventual sale of the
property. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values and holding
periods. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived
assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining the best possible
estimate of future cash flows. If the future net undiscounted cash flow of the property is less than the carrying value, the property
is considered to be impaired. We then measure the loss as the excess of the carrying value of the property over its estimated fair
value, as determined using market information. In cases where the available market information is not deemed appropriate, we
perform a future net cash flow analysis discounted for inherent risk associated with each asset to determine an estimated fair
value.

Direct Financing Leases

We review our direct financing leases at least annually to determine whether there has been an other-than-temporary decline in
the current estimate of residual value of the property. The residual value is our estimate of what we could realize upon the sale of
the property at the end of the lease term, based on market information. If this review indicates that a decline in residual value has
occurred that is other-than-temporary, we recognize an impairment charge and revise the accounting for the direct financing
lease to reflect a portion of the future cash flow from the lessee as a return of principal rather than as revenue. While we evaluate
direct financing leases if there are any indicators that the residual value may be impaired, the evaluation of a direct financing
lease can be affected by changes in long-term market conditions even though the obligations of the lessee are being met.

Assets Held for Sale

We classify assets that are accounted for as operating leases as held for sale when we have entered into a contract to sell the
property, all material due diligence requirements have been satisfied and we believe it is probable that the disposition will occur
within one year. When we classify an asset as held for sale, we calculate its estimated fair value as the expected sale price, less
expected selling costs. We then compare the asset’s estimated fair value to its carrying value, and if the estimated fair value is
less than the property’s carrying value, we reduce the carrying value to the estimated fair value. We will continue to review the
initial impairment for subsequent changes in the estimated fair value, and may recognize an additional impairment charge if
warranted.

Equity Investments in Real Estate and CPA® REITs

Marketable Securities

W. P. Carey 2009 10-K — 56

Notes to Consolidated Financial Statements

Goodwill

Stock Based Compensation

We have granted restricted shares, stock options, restricted share units (“RSUs”) and performance share units (“PSUs”) to certain
employees. Grants were awarded in the name of the employee, who has all the rights of a shareholder, subject to certain
restrictions of transferability and a risk of forfeiture. The forfeiture provisions on the awards expire annually, over their
respective vesting periods. Stock-based compensation expense for all stock-based compensation awards is based on the grant
date fair value estimated in accordance with current accounting guidance for share-based payments. We recognize these
compensation costs for only those shares expected to vest on a straight-line basis over the requisite service period of the award.
We include stock-based compensation within the listed shares caption of equity.

Foreign Currency Translation

We have interests in real estate investments in the European Union for which the functional currency is the Euro. We perform the
translation from the Euro to the U.S. dollar for assets and liabilities using current exchange rates in effect at the balance sheet
date and for revenue and expense accounts using a weighted average exchange rate during the period. We report the gains and
losses resulting from such translation as a component of OCI in equity. At December 31, 2009 and 2008, the cumulative foreign
currency translation adjustment gain (loss) was $0.2 million and $(0.4) million, respectively.

Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that
will be received or paid. A change in the exchange rates between the functional currency and the currency in which a transaction
is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of that transaction.
That increase or decrease in the expected functional currency cash flows is an unrealized foreign currency transaction gain or
loss that generally will be included in determining net income for the period in which the exchange rate changes. Likewise, a
transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is
later), realized upon settlement of a foreign currency transaction generally will be included in net income for the period in which
the transaction is settled. Foreign currency transactions that are (i) designated as, and are effective as, economic hedges of a net
investment and (ii) inter-company foreign currency transactions that are of a long-term nature (that is, settlement is not planned
or anticipated in the foreseeable future), when the entities to the transactions are consolidated or accounted for by the equity
method in our financial statements, are not included in determining net income but are accounted for in the same manner as
foreign currency translation adjustments and reported as a component of OCI in equity. International equity investments in real
estate were funded in part through subordinated intercompany debt.

Foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and the
translation to the reporting currency of subordinated intercompany debt with scheduled principal payments, are included in the
determination of net income. We recognized net unrealized gains (losses) of $0.2 million, $(2.4) million and $1.7 million from
such transactions for the years ended December 31, 2009, 2008 and 2007, respectively. For the years ended December 31, 2009,
2008 and 2007, we recognized net realized gains of less than $0.1 million, $2.3 million and $1.3 million, respectively, on foreign
currency transactions in connection with the transfer of cash from foreign operations of subsidiaries to the parent company.

Derivative Instruments

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations
under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through
earnings. If a derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative
will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or
recognized in OCI until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value
will be immediately recognized in earnings.

W. P. Carey 2009 10-K — 57

Notes to Consolidated Financial Statements

Income Taxes

We have elected to be treated as a partnership for U.S. federal income tax purposes. Deferred income taxes are recorded for the
corporate subsidiaries based on earnings reported. The provision for income taxes differs from the amounts currently payable
because of temporary differences in the recognition of certain income and expense items for financial reporting and tax reporting
purposes. Income taxes are computed under the asset and liability method. The asset and liability method requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and
financial bases of assets and liabilities (Note 15).

Real Estate Ownership Operations

Our real estate operations are conducted through a subsidiary REIT. As a REIT, our real estate operations are generally not
subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial
statements for these operations. These operations are subject to certain state, local and foreign taxes, as applicable.

In October 2007, we transferred our real estate assets from a wholly owned subsidiary into Carey REIT II, Inc. (“Carey REIT
II”), a newly formed wholly owned REIT subsidiary. On January 1, 2008, we merged our subsidiary Carey REIT, Inc. (“Carey
REIT”) into Carey REIT II with Carey REIT II as the survivor. Carey REIT held certain properties, including certain properties
acquired from Corporate Property Associates 12 Incorporated in 2006. To the extent that the fair value of Carey REIT property
in the merger exceeded its tax basis at the time of the merger, Carey REIT II would be subject to corporate level taxes to the
extent of this “built-in-gain” if the properties were to be sold in a taxable transaction within ten years from the date of the
merger. At the time of the merger, Carey REIT owned three properties whose tax values were not significantly different from
their fair values. We do not expect to trigger any “built-in-gains” nor do we expect any significant “built-in-gains” tax if
triggered.

Carey REIT II elected to be taxed as a REIT under Sections 856 through 860 of the Code, with the filing of its 2007 return. We
believe we have operated, and we intend to continue to operate, in a manner that allows Carey REIT II to continue to qualify as a
REIT. Under the REIT operating structure, Carey REIT II is permitted to deduct distributions paid to our shareholders and
generally will not be required to pay U.S. federal income taxes. Accordingly, no provision has been made for U.S. federal
income taxes related to Carey REIT II in the consolidated financial statements.

Investment Management Operations

Future Accounting Requirements

W. P. Carey 2009 10-K — 58

Notes to Consolidated Financial Statements

Note 3. Agreements and Transactions with Related Parties

Advisory Services with the CPA® REITs

Directly and through wholly-owned subsidiaries, we earn revenue as the advisor to the CPA® REITs. Under the advisory
agreements with the CPA® REITs, we manage the portfolios of the CPA® REITs and structure and negotiate investments and
debt placement transactions for them, and may provide additional services. The advisory agreements were amended and renewed
effective October 1, 2009. The following table presents a summary of revenue earned and cash received from the CPA® REITs
in connection with providing services to them (in thousands):

Asset management revenue
Structuring revenue
Wholesaling revenue
Reimbursed costs from affiliates

Asset Management Revenue

Years ended December 31,
2008

2009

2007

76,621
23,273
6,550
48,715
155,159

80,714
20,236
5,129
41,179
147,258

83,051
78,175
27
13,782
175,035

Under the terms of the advisory agreements, we earn asset management revenue totaling 1% per annum of average invested
assets, which is calculated according to the advisory agreements for each CPA® REIT. A portion of this asset management
revenue is contingent upon the achievement of specific performance criteria for each CPA® REIT, which is generally defined to
be a cumulative distribution return for shareholders of the CPA® REIT. For CPA®:14, CPA®:15 and CPA®:16 – Global, this
performance revenue is generally equal to 0.5% of the average invested assets of the CPA® REIT. For CPA®:17 – Global, we
earn asset management revenue ranging from 0.5% of average market value for long-term net leases and certain other types of
real estate investments up to 1.75% of average equity value for certain types of securities. For CPA®:17 – Global, we do not earn
performance revenue, but we receive up to 10% of distributions of available cash from its operating partnership. For the year
ended December 31, 2009, we received $2.2 million in cash under this provision. Asset management revenue for the year ended
December 31, 2007 included performance revenue recognized from CPA®:16 – Global on achievement of its performance
criterion in June 2007 (see CPA®:16 – Global Performance Criterion below).

Under the terms of the advisory agreements, we may elect to receive shares of restricted stock for any revenue due from each
CPA® REIT. In 2009, we elected to receive all asset management revenue in cash, with the exception of CPA®:17 – Global’s
asset management revenue, which we elected to receive in restricted shares. We also elected to receive performance revenue
from CPA®:16 – Global in restricted shares, while for CPA®:14 and CPA®:15 we elected to receive 80% of all performance
revenue in restricted shares, with the remaining 20% payable in cash. In 2008, for CPA®:14, CPA®:15 and CPA®:16 – Global,
we elected to receive all asset management revenue in cash and all performance revenue in restricted shares rather than cash,
while for CPA®:17 – Global we elected to receive asset management revenue in restricted shares. In 2007, we elected to receive
all asset management revenue in cash, with the exception of CPA®:16 – Global’s asset management revenue, for which we
elected to receive restricted shares, and all performance revenue in restricted shares. We did not earned asset management
revenue from CPA®:17 – Global in 2007 as it had no investments.

Structuring Revenue

Under the terms of the advisory agreements, we earn revenue in connection with structuring and negotiating investments and
related mortgage financing for the CPA® REITs, which we call acquisition revenue. Under each of the advisory agreements, we
may receive acquisition revenue of up to an average of 4.5% of the total cost of all investments made by each CPA® REIT. A
portion of this revenue (generally 2.5%) is paid when the transaction is completed, while the remainder (generally 2%) is payable
in equal annual installments ranging from three to eight years, provided the relevant CPA® REIT meets its performance criterion.
Unpaid installments bear interest at annual rates ranging from 5% to 7%. Interest earned on unpaid installments was $1.5 million,
$2.3 million and $6.0 million for the year ended December 31, 2009, 2008 and 2007, respectively. Interest income for the year
ended December 31, 2007 included interest income recognized from CPA®:16 – Global on achievement of its performance
criterion in June 2007 (see CPA®:16 – Global Performance Criterion below). For certain types of non-long term net lease
investments acquired on behalf of CPA®:17 – Global, initial acquisition revenue may range from 0% to 1.75% of the equity
invested plus the related acquisition revenue, with no deferred acquisition revenue being earned. We may also be entitled, subject
to CPA® REIT board approval, to loan refinancing revenue of up to 1% of the principal amount refinanced in connection with
structuring and negotiating investments. This loan refinancing revenue, together with the acquisition revenue, is referred to as
structuring revenue. In addition, we may also earn revenue related to the sale of properties, subject to subordination provisions.
We will only recognize this revenue if we meet the subordination provisions. Structuring revenue for the year ended
December 31, 2007 includes structuring revenue recognized from CPA®:16 – Global on achievement of its performance criterion
in June 2007 (see CPA®:16 – Global Performance Criterion below).

W. P. Carey 2009 10-K — 59

Notes to Consolidated Financial Statements

Reimbursed Costs from Affiliates and Wholesaling Revenue

The CPA® REITs reimburse us for certain costs, primarily broker/dealer commissions paid on behalf of the CPA® REITs and
marketing and personnel costs. In addition, under the terms of a sales agency agreement between our wholly-owned broker-
dealer subsidiary and CPA®:17 – Global, we earn a selling commission of up to $0.65 per share sold, selected dealer revenue of
up to $0.20 per share sold and/or wholesaling revenue for selected dealers or investment advisors of up to $0.15 per share sold.
We will re-allow all selling commissions to selected dealers participating in CPA®:17 – Global’s offering and will re-allow up to
the full selected dealer revenue to selected dealers. If needed, we will use any retained portion of the selected dealer revenue
together with the wholesaling revenue to cover other underwriting costs incurred in connection with CPA®:17 – Global’s
offering. Total underwriting compensation earned in connection with CPA®:17 – Global’s offering, including selling
commissions, selected dealer revenue, wholesaling revenue and reimbursements made by us to selected dealers, cannot exceed
the limitations prescribed by the Financial Industry Regulatory Authority (“FINRA”). The limit on underwriting compensation is
currently 10% of gross offering proceeds. We may also be reimbursed up to an additional 0.5% of the gross offering proceeds for
bona fide due diligence expenses.

CPA®:16 – Global Performance Criterion

In June 2007, CPA®:16 – Global met its performance criterion (a non-compounded cumulative distribution return of 6% per
annum), as defined in its advisory agreement, and as a result, we recognized previously deferred revenue totaling $45.9 million
(consisted of asset management revenue of $11.9 million, structuring revenue of $31.7 million and interest income on the
previously deferred structuring revenue of $2.3 million). In addition, as a result of CPA®:16 – Global meeting its performance
criterion, we recognized and paid to certain employees incentive and commission compensation of $6.6 million that had
previously been deferred.

The deferred asset management revenue of $11.9 million was paid in July 2007 by CPA®:16 – Global in the form of 1,194,549
shares of CPA®:16 – Global’s restricted common stock. The deferred structuring revenue of $31.7 million and interest thereon of
$2.3 million was paid in cash by CPA®:16 – Global in January 2008, 2009 and 2010 in the amounts of $28.3 million,
$4.7 million and $1.0 million, respectively.

Other Transactions with Affiliates

We are the general partner in a limited partnership (which we consolidate for financial statement purposes) that leases our home
office space and participates in an agreement with certain affiliates, including the CPA® REITs, for the purpose of leasing office
space used for the administration of our operations and the operations of our affiliates and for sharing the associated costs.
During the years ended December 31, 2009, 2008 and 2007, we recorded income from noncontrolling interest partners of
$2.4 million, $2.4 million and $2.0 million, respectively, in each case related to reimbursements from these affiliates. The
average estimated minimum lease payments on the office lease, inclusive of noncontrolling interests, at December 31, 2009
approximates $2.9 million annually through 2016.

We own interests in entities ranging from 5% to 95%, including jointly-controlled tenant-in-common interests in properties, with
the remaining interests generally held by affiliates, and own common stock in each of the CPA® REITs. We consolidate certain
of these investments (Note 2) and account for the remainder under the equity method of accounting (Note 6).

One of our directors and officers is the sole shareholder of Livho, Inc. (“Livho”). We consolidate the accounts of Livho in our
consolidated financial statements in accordance with current accounting guidance for consolidation of VIEs because it is a VIE
and we are its primary beneficiary.

Family members of one of our directors have an ownership interest in certain companies that own noncontrolling interests in our
French majority-owned subsidiaries. These ownership interests are subject to substantially the same terms as all other ownership
interests in the subsidiary companies.

An employee owns a redeemable noncontrolling interest in WPCI, a subsidiary company that structures net lease transactions on
behalf of the CPA® REITs outside of the U.S., as well as certain related entities. As discussed in Note 14, we acquired interests
in those same entities from another employee at a negotiated fair market value of approximately $15.4 million as part of a
mutually agreed separation.

W. P. Carey 2009 10-K — 60

Notes to Consolidated Financial Statements

Included in Accounts payable, accrued expenses and other liabilities in the consolidated balance sheets at each of December 31,
2009 and 2008 are amounts due to affiliates totaling $0.9 million.

We have the right to loan funds to affiliates under our line of credit. Such loans generally bear interest at comparable rates to our
line of credit. In August 2007, we loaned $8.7 million to a venture in which CPA®:15 has an ownership interest to facilitate the
defeasance of a mortgage obligation in connection with the venture’s sale of a property. We recognized interest income of less
than $0.1 million prior to this loan being repaid in September 2007.

In December 2007, we received a loan totaling $7.6 million from two affiliated ventures in which we have interests that are
accounted for under the equity method of accounting. The loan was used to fund the acquisition of certain tenancy-in-common
interests in Europe and was repaid in March 2008. During the years ended December 31, 2008 and 2007, we incurred interest
expense of $0.1 million and less than $0.1 million, respectively, in connection with this loan.

Note 4. Real Estate

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and accounted for as operating leases, is summarized as
follows (in thousands):

Land
Buildings
Less: Accumulated depreciation

Operating Real Estate

December 31,

2009

98,971
426,636
(100,247)
425,360

2008
109,234
493,810
(103,249)
499,795

Operating real estate, which consists primarily of our self-storage investments through Carey Storage and our Livho subsidiary,
at cost, is summarized as follows (in thousands):

Land
Buildings
Less: Accumulated depreciation

December 31,

2009

16,257
69,670
(12,039)
73,888

2008

15,408
69,139
(10,013)
74,534

Our investments in real estate are categorized as either real estate or net investment in direct financing leases for consolidated
investments and equity investments in real estate for unconsolidated ventures. Acquisitions of real estate are discussed in Note 4,
while acquisitions of net investment in direct financing leases are discussed in Note 5 and acquisitions of equity investments in
real estate are discussed in Note 6.

Real Estate Acquired

We did not acquire any consolidated real estate investments in 2009 and 2008. In 2007, we acquired an investment in Poland at a
total cost of $13.9 million, based upon the exchange rate of the Euro at the date of acquisition. Carey Storage also acquired seven
domestic self-storage properties at a total cost of $35.0 million during 2007.

W. P. Carey 2009 10-K — 61

Notes to Consolidated Financial Statements

Acquisition Costs

We adopted the FASB’s revised guidance for business combinations on January 1, 2009. The revised guidance establishes
principles and requirements for how the acquirer in a business combination must recognize and measure in its financial
statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interests in the entity acquired, and
goodwill acquired in a business combination. Additionally, the revised guidance requires that an acquiring entity must
immediately expense all acquisition costs and fees associated with a business combination, while such costs are capitalized for
transactions deemed to be acquisitions of an asset. We may be impacted by the adoption of the revised guidance through both the
investments we make for our own portfolio as well as our equity interests in the CPA® REITs. To the extent we make
investments for our own portfolio or on behalf of the CPA® REITs that are deemed to be business combinations, our results of
operations will be negatively impacted by the immediate expensing of acquisition costs and fees incurred in accordance with the
revised guidance, whereas in the past such costs and fees would have been capitalized and allocated to the cost basis of the
acquisition. Post acquisition, there will be a subsequent positive impact on our results of operations through a reduction in
depreciation expense over the estimated life of the properties. For those investments that are not deemed to be a business
combination, the revised guidance is not expected to have a material impact on our consolidated financial statements.
Historically, we have not acquired investments that would be deemed a business combination under the revised guidance.

We did not make any investments for our own portfolio that were deemed to be business combinations during 2009. All
investments structured on behalf of the CPA® REITs during 2009 were deemed to be real estate asset acquisitions. Acquisition
costs and fees capitalized by the CPA® REITs during 2009 totaled $0.1 million, $0.2 million, $5.5 million and $20.7 million for
CPA®:14, CPA®:15, CPA®:16 – Global and CPA®:17 – Global, respectively.

Carey Storage

In connection with this transaction, Carey Storage repaid, in full, the $35.0 million outstanding balance on its secured credit
facility at a discount for $28.0 million, terminated the facility, and recognized a gain of $7.0 million on the repayment of this
debt, inclusive of the third party’s interest of $4.2 million. The debt repayment was financed with a portion of the proceeds from
the exchange of the 60% interest and non-recourse debt with a new lender totaling $25.0 million, which is secured by individual
mortgages on, and cross-collateralized by, the thirteen properties in the Carey Storage portfolio. The new financing bears interest
at a fixed rate of 7% per annum and has a 10 year term with a rate reset after 5 years. The $7.0 million gain recognized on the
debt repayment and the third party’s $4.2 million interest in this gain are both reflected in Other income and (expenses) in the
consolidated financial statements.

In August 2009, Carey Storage borrowed an additional $3.5 million that is secured by individual mortgages on, and cross-
collateralized by, seven properties in the Carey Storage portfolio and distributed the proceeds to its profit sharing interest
holders. This new loan has an annual fixed interest rate of 7.25% and has a term of 9.6 years with a rate reset after 5 years. As
part of this transaction, Carey Storage distributed $1.9 million to its third party investor, which has been reflected as a reduction
of the profit sharing obligation.

Scheduled Future Minimum Rents

Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants and future CPI-based increases, under non-
cancelable operating leases at December 31, 2009 as follows (in thousands):

Years ended December 31,
2010
2011
2012
2013
2014
Thereafter through 2025

Percentage rent revenue was $0.1 million in both 2009 and 2008 and $0.3 million in 2007.

53,345
42,100
32,916
27,415
25,498
59,400

W. P. Carey 2009 10-K — 62

Notes to Consolidated Financial Statements

Note 5. Net Investment in Direct Financing Leases

Net investment in direct financing leases is summarized as follows (in thousands):

Minimum lease payments receivable
Unguaranteed residual value

Less: unearned income

December 31,

2009

64,201
78,526
142,727
(62,505)
80,222

2008

55,057
81,132
136,189
(52,397)
83,792

During 2008, we sold our net investment in a direct financing lease for $5.0 million, net of selling costs, and recognized a net
gain on sale of $1.1 million. Refer to Note 12 for details of impairment charges on net investments in direct financing leases.

Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, percentage of sales rents and future CPI-
based adjustments, under non-cancelable direct financing leases are as follows (in thousands):

Years ended December 31,
2010
2011
2012
2013
2014
Thereafter through 2022

10,950
9,994
9,831
9,613
6,657
17,156

Percentage rent revenue approximated $0.1 million in each of 2009, 2008, and 2007.

Note 6. Equity Investments in Real Estate and CPA® REITs

Our equity investments in real estate for our investments in the CPA® REITs and for our interests in unconsolidated venture
properties are summarized below. As described in Note 2, we recognized an out-of-period adjustment in the third quarter of 2007
that impacted our equity investments in real estate and CPA® REITs.

CPA® REITs

We own interests in the CPA® REITs and account for these interests under the equity method because, as their advisor, we do
not exert control but have the ability to exercise significant influence. Shares of the CPA® REITs are publicly registered and the
CPA® REITs file periodic reports with the SEC, but the shares are not listed on any exchange and are not actively traded. We
earn asset management and performance revenue from the CPA® REITs and have elected, in certain cases, to receive this
revenue in the form of restricted common stock of the CPA® REITs rather than cash (Note 3).

W. P. Carey 2009 10-K — 63

Notes to Consolidated Financial Statements

The following table sets forth certain information about our investments in the CPA® REITs (dollars in thousands):

Fund
CPA®:14
CPA®:15
CPA®:16 – Global
CPA®:17 – Global

% of Outstanding Shares at Carrying Amount of Investment at

December 31,

2009

2008

2009 (a)

2008 (a)

8.5%
6.5%
4.7%
0.4%

7.4% $
5.5%
3.7%
0.2%

79,906
78,816
53,901
3,328
215,951

78,052
74,959
46,880
1,080
200,971

(a) Includes asset management fee receivable at period end for which shares will be issued during the subsequent period.

The following tables present combined summarized financial information for the CPA® REITs. Amounts provided are the total
amounts attributable to the CPA® REITs and do not represent our proportionate share (in thousands):

Assets
Liabilities
Shareholders’ equity

Revenues
Expenses
Net income

December 31,

2009
$ 8,468,955
(4,638,552)
$ 3,830,403

2008
$ 8,272,855
(4,605,886)
$ 3,666,969

Years ended December 31,
2008
730,207
(633,492)
96,715

2009
757,780
(759,378)
(1,598)

2007
605,049
(409,623)
195,426

We recognized loss from our equity investments in the CPA® REITs of $0.3 million for the year ended December 31, 2009 and
income of $6.2 and $11.2 million for the years ended December 31, 2008 and 2007, respectively. Income recognized from our
equity investments in the CPA® REITs is impacted by several factors, including impairment charges recorded by the CPA®
REITs. During the years ended December 31, 2009, 2008 and 2007, the CPA® REITs recognized impairment charges totaling
approximately $170 million, $40.4 and $8.4 million, respectively, which reduced the income we earned from these investments
by $11.5 million, $2.1 and $0.3 million, respectively.

Interests in Unconsolidated Venture Properties

We own interests in single-tenant net leased properties leased to corporations through noncontrolling interests in (i) partnerships
and limited liability companies in which our ownership interests are 75% or less but over which we exercise significant
influence, and (ii) as tenants-in-common subject to common control. All of the underlying investments are generally owned with
affiliates. We account for these investments under the equity method of accounting (i.e., at cost, increased or decreased by our
share of earnings or losses, less distributions, plus fundings).

W. P. Carey 2009 10-K — 64

Notes to Consolidated Financial Statements

The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values.
The carrying value of these ventures is affected by the timing and nature of distributions (dollars in thousands):

Lessee
Schuler A.G. (a) (b)
The New York Times Company (c)
Carrefour France, SAS (a)
U. S. Airways Group, Inc. (b) (d)
Medica — France, S.A. (a)
Hologic, Inc. (b)
Consolidated Systems, Inc. (b)
Hellweg Die Profi-Baumarkte GmbH & Co. KG (a)
Information Resources, Inc.
Federal Express Corporation
Childtime Childcare, Inc.
The Retail Distribution Group (e)
Amylin Pharmaceuticals, Inc. (b) (f)

Ownership
Interest at

Carrying Value at
December 31,

December 31, 2009

2009

2008

33% $
18%
46%
75%
46%
36%
60%
5%
33%
40%
34%
40%
50%

23,755 $
19,740
17,570
8,927
6,160
4,388
3,395
2,639
2,270
1,976
1,843
1,099
(4,723)
89,039 $

23,279
—
17,213
—
7,115
4,402
3,420
2,467
1,571
2,565
1,748
264
(4,395)
59,649

(a) Carrying value of investment is affected by the impact of fluctuations in the exchange rate of the Euro.
(b) Represents tenant-in-common interest (Note 2).
(c) We acquired our interest in this investment in March 2009.
(d) In the third quarter of 2009, we recorded an adjustment to record this entity on the equity method. This entity had

previously been accounted for under a proportionate consolidation method (Note 2). If the entity had previously been
accounted for under the equity method, it would have had a carrying value of $7.5 million at December 31, 2008.

(e) In July 2009, we contributed $1.5 million to this venture to pay off a maturing mortgage loan.
(f) In June 2007, this venture refinanced its existing non-recourse mortgage debt for new non-recourse financing of

$35.4 million based on the appraised value of the underlying real estate of the venture and distributed the proceeds to the
venture partners.

The following tables present combined summarized financial information of our venture properties. Amounts provided are the
total amounts attributable to the venture properties and do not represent our proportionate share (in thousands):

Assets
Liabilities
Partners’/members’ equity

Revenues
Expenses
Net income

December 31,

2009
$ 1,253,959
(734,672)
519,287

2008
816,502
(615,759)
200,743

Years ended December 31,
2008

2009
119,265
(61,519)
57,746

88,713
(65,348)
23,365

2007

71,737
(53,791)
17,946

We recognized income from these equity investments in real estate of $13.8 million, $8.0 million and $7.2 million for the years
ended December 31, 2009, 2008 and 2007, respectively. These amounts represent our share of the income of these ventures as
well as certain depreciation and amortization adjustments related to purchase accounting and other-than-temporary impairment
charges. In addition, income from these equity investments in real estate for the year ended December 31, 2007 included an out-
of-period adjustment of $3.5 million (Note 2).

W. P. Carey 2009 10-K — 65

Notes to Consolidated Financial Statements

Equity Investment in Real Estate Acquired

In March 2009, an entity in which we, CPA®:16 – Global and CPA®:17 – Global hold 17.75%, 27.25% and 55% interests,
respectively, completed a net lease financing transaction with respect to a leasehold condominium interest, encompassing
approximately 750,000 rentable square feet, in the office headquarters of The New York Times Company for approximately
$233.7 million in the aggregate. Our share of the purchase price was approximately $40.0 million, which we funded with
proceeds from our line of credit. We account for this investment under the equity method of accounting as we do not have a
controlling interest in the entity but exercise significant influence over it. In connection with this investment, which was deemed
a direct financing lease, the venture capitalized costs and fees totaling $8.7 million. In August 2009, the venture obtained
mortgage financing on the New York Times property of $119.8 million at an annual interest rate of LIBOR plus 4.75% that has
been capped at 8.75% through the use of an interest rate cap. This new financing has a term of five years.

Note 7. Intangible Assets and Goodwill

In connection with our acquisition of properties, we have recorded net lease intangibles of $34.5 million, which are being
amortized over periods ranging from two years to 30 years. Amortization of below-market and above-market rent intangibles is
recorded as an adjustment to lease revenues, while amortization of in-place lease and tenant relationship intangibles is included
in depreciation and amortization. Below-market rent intangibles are included in Accounts payable, accrued expenses and other
liabilities in the consolidated financial statements.

Intangibles and goodwill are summarized as follows (in thousands):

Amortized Intangibles Assets
Management contracts
Less: accumulated amortization

Lease Intangibles:
In-place lease
Tenant relationship
Above-market rent
Less: accumulated amortization

Unamortized Goodwill and Indefinite-Lived Intangible Assets
Goodwill
Trade name

Amortized Below-Market Rent Intangible
Below-market rent
Less: accumulated amortization

December 31,

2009

2008

$
$

32,765
(26,262)
6,503

18,614
9,816
8,085
(25,413)
11,102

63,607
3,975
67,582
85,187

(2,009)
641
(1,368)

$
$

32,765
(23,489)
9,276

19,365
10,140
9,707
(22,760)
16,452

63,607
3,975
67,582
93,310

(2,009)
540
(1,469)

Net amortization of intangibles was $6.6 million, $7.3 million and $8.9 million for the years ended December 31, 2009, 2008 and
2007, respectively.

Based on the intangible assets at December 31, 2009, annual net amortization of intangibles for each of the next five years is as
follows: 2010 — $5.4 million; 2011 — $2.3 million, 2012 — $2.0 million, 2013 — $1.9 million and 2014 — $0.7 million.

W. P. Carey 2009 10-K — 66

Notes to Consolidated Financial Statements

Note 8. Debt

Scheduled debt principal payments during each of the next five years following December 31, 2009 and thereafter are as follows
(in thousands):

Years ended December 31,
2010
2011 (a)
2012
2013
2014
Thereafter through 2019
Total

Total

19,124
139,870
34,493
5,545
5,532
121,766
326,330

(a) Includes $111.0 million outstanding under our line of credit, which is scheduled to mature in June 2011.

Non-recourse debt

Non-recourse debt consists of mortgage notes payable, which are collateralized by the assignment of real property and direct
financing leases with an aggregate carrying value of $357.3 million at December 31, 2009. Our mortgage notes payable had
fixed annual interest rates ranging from 4.9% to 8.1% and variable annual interest rates ranging from 1.3% to 7.3%, with
maturity dates ranging from 2010 to 2019 at December 31, 2009.

In December 2006, Carey Storage, entered into a two year secured credit facility for up to $105.0 million that provided for
advances through March 8, 2008, after which no additional borrowings were available. The credit facility was scheduled to
expire in December 2008; however, pursuant to its terms, in December 2008 we exercised an option to extend the maturity date
of this facility for an additional year. In January 2009, Carey Storage repaid, in full, the $35.0 million outstanding under this
credit facility at a discount for $28.0 million and terminated the facility.

Line of credit

In June 2007, we entered into a $250.0 million revolving line of credit to replace our previous $175.0 million line of credit.
Pursuant to its terms, the $250.0 million line of credit, which is scheduled to mature in June 2011, can be increased up to
$300.0 million at the discretion of the lenders and, at our discretion, can be extended for an additional year subject to satisfying
certain conditions and the payment of an extension fee equal to 0.125% of the total commitments under the facility at that time.

Note 9. Settlement of SEC Investigation

In March 2008, we entered into a settlement with the SEC with respect to all matters relating to a previously disclosed
investigation. In anticipation of this settlement, we took a charge of $30.0 million in the fourth quarter of 2007 and recognized an
offsetting $9.0 million tax benefit in the same period. As a result, the settlement is reflected as “Decrease in settlement
provision” in our Consolidated Statement of Cash Flows for the year ended December 31, 2008. We recognized a gain of
$1.8 million for the year ended December 31, 2008 related to an insurance reimbursement of certain professional services costs
incurred in connection with the SEC investigation.

W. P. Carey 2009 10-K — 67

Notes to Consolidated Financial Statements

Note 10. Commitments and Contingencies

At December 31, 2009, we were not involved in any material litigation.

We have provided certain representations in connection with divestitures of certain of our properties. These representations
address a variety of matters including environmental liabilities. We are not aware of any claims or other information that would
give rise to material payments under such representations.

Note 11. Fair Value Measurements

In September 2007, the FASB issued authoritative guidance for using fair value to measure assets and liabilities, which we
adopted as required on January 1, 2008, with the exception of nonfinancial assets and nonfinancial liabilities that are not
recognized or disclosed at fair value on a recurring basis, which we adopted as required on January 1, 2009. In April 2009, the
FASB provided additional guidance for estimating fair value when the volume and level of activity for the asset or liability have
significantly decreased, which we adopted as required in the second quarter of 2009. Fair value is defined as the exit price, or the
amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The guidance also establishes a three-tier fair value hierarchy based on the inputs used in measuring
fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such
as money market funds, equity securities and U.S. Treasury securities; Level 2, for which there are inputs other than quoted
prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest
rate caps and swaps; and Level 3, for which little or no market data exists, therefore requiring us to develop our own
assumptions, such as certain marketable securities.

The following tables set forth our assets and liabilities that were accounted for at fair value on a recurring basis at December 31,
2009 and 2008 (in thousands):

Description
Assets:
Money market funds
Marketable securities

Total

Liabilities:
Derivative liabilities
Redeemable noncontrolling interests

Total

Fair Value Measurements at Reporting Date Using:

Quoted Prices in
Active Markets for

Significant Other
Identical Assets Observable Inputs

December 31, 2009

(Level 1)

(Level 2)

Unobservable
Inputs
(Level 3)

$
$
$

4,283 $
1,687
5,970 $

634 $
7,692 $
8,326 $

4,283
—
4,283

—
—
—

$
$
$

—
—
—

634
—
634

$
$
$

—
1,687
1,687

—
7,692
7,692

W. P. Carey 2009 10-K — 68

Notes to Consolidated Financial Statements

Description
Assets:
Money market funds
Marketable securities

Total

Liabilities:
Derivative liabilities
Redeemable noncontrolling interests

Total

Fair Value Measurements at Reporting Date Using:

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Unobservable
Inputs
(Level 3)

December 31, 2008

2,068 $
1,628
3,696 $

419 $

18,085
18,504 $

2,068
—
2,068

—
—
—

419
—
419

—
1,628
1,628

—
18,085
18,085

Assets and liabilities presented above exclude assets and liabilities owned by unconsolidated ventures.

Fair Value Measurements Using
Significant Unobservable Inputs (Level 3 Only)

Marketable
Securities

Derivative
Assets

Total
Assets

Redeemable
Noncontrolling
Interests

Total
Liabilities

Beginning balance

1,628

Year ended December 31, 2009
— $

1,628

Total gains or losses (realized and

unrealized):
Included in earnings
Included in other comprehensive

income
Distributions paid
Redemption value adjustment
Purchases, issuances and

settlements

Ending balance

The amount of total gains or losses for
the period included in earnings (or
changes in net assets) attributable
to the change in unrealized gains or
losses relating to assets still held at
the reporting date

(2)

16
—
—

—

—
—
—

(2)

16
—
—

18,085

2,258

12
(4,056)
6,773

45
1,687

—
— $

45
1,687

(15,380)
7,692

(2)

— $

(2)

—

W. P. Carey 2009 10-K — 69

Notes to Consolidated Financial Statements

Fair Value Measurements Using
Significant Unobservable Inputs (Level 3 Only)

Marketable
Securities

Derivative
Assets

Total
Assets

Redeemable
Noncontrolling
Interests

Total
Liabilities

Beginning balance

1,494

Year ended December 31, 2008
204

1,698

20,394

Total gains or losses (realized and

unrealized):
Included in earnings
Included in other comprehensive

income
Distributions paid
Redemption value adjustment
Purchases, issuances and

settlements

Ending balance

(3)

(43)
—
—

180
1,628

(204)

(207)

1,508

—
—
—

—
—

(43)
—
—

—
(4,139)
322

180
1,628

—
18,085

—

(204)

—

Gains and losses (realized and unrealized) included in earnings are reported in Other income and (expenses) in the consolidated
financial statements.

We account for the noncontrolling interests in WPCI as redeemable noncontrolling interests (Note 14). We determined the
valuation of redeemable noncontrolling interests using widely accepted valuation techniques, including discounted cash flow on
the expected cash flows of the investment as well as the income capitalization approach, which considers prevailing market
capitalization rates.

At December 31, 2009, we performed our quarterly assessment of the value of certain of our real estate investments in
accordance with current authoritative accounting guidance. We determined the valuation of these assets using the valuation
techniques described above. We reviewed each investment based on the highest and best use of the investment and market
participation assumptions. We determined that the significant inputs used to value these investments fall within Level 3. Based
on this valuation, during the year ended December 31, 2009 we recorded impairment charges totaling $10.4 million as described
in Note 12, calculated based on market conditions and assumptions at December 31, 2009. Actual results may differ materially if
market conditions or the underlying assumptions change.

Our financial instruments had the following carrying value and fair value (in thousands):

Non-recourse debt
Line of credit
Marketable securities (a)

December 31, 2009

Carrying Value
215,330
111,000
1,681

Fair Value
201,774
$
108,900
1,687

December 31, 2008
Carrying Value Fair Value
$ 242,210
$
77,200
1,628

245,874
81,000
1,612

(a) Carrying value represents historical cost for marketable securities.

We determine the estimated fair value of our debt instruments using a discounted cash flow model with rates that take into
account the credit of the tenants and interest rate risk. We estimate that our other financial assets and liabilities (excluding net
investment in direct financing leases) had fair values that approximated their carrying values at both December 31, 2009 and
2008.

W. P. Carey 2009 10-K — 70

Notes to Consolidated Financial Statements

Note 12. Impairment Charges

We recorded impairment charges of $10.4 million, $1.0 million and $3.3 million for the years ended December 31, 2009, 2008
and 2007, respectively, of which $0.9 million, $0.5 million and $2.9 million are included in discontinued operations for the years
ended December 31, 2009, 2008 and 2007, respectively.

Impairment Charges on Operating Assets

During the year ended December 31, 2009, we recognized impairment charges on various properties totaling $6.9 million. These
impairments were primarily the result of writing down the properties’ carrying values to their respective estimated fair values in
connection with potential sales due to tenants vacating or not renewing their leases. Impairment charges recognized in 2007
totaled $0.4 million. There were no such impairments recognized during 2008.

Impairment Charges on Direct Finance Leases

In connection with our annual review of the estimated residual values on our properties classified as net investments in direct
financing leases, we determined that an other than temporary decline in estimated residual value had occurred at various
properties due to market conditions, and the accounting for the direct financing leases was revised using the changed estimates.
The changes in estimates resulted in the recognition of impairment charges totaling $2.6 million and $0.5 million in 2009 and
2008, respectively. There were no such impairments recognized during 2007.

Impairment Charges on Properties Sold

During the years ended December 31, 2009, 2008 and 2007, we recognized impairment charges on properties sold totaling
$0.9 million, $0.5 million and $2.9 million, respectively. These impairment charges, which are included in discontinued
operations, were the result of reducing these properties’ carrying values to their estimated fair values (Note 16).

Note 13. Risk Management and Use of Derivative Financial Instruments

Risk Management

In the normal course of our on-going business operations, we encounter economic risk. There are three main components of
economic risk: interest rate risk, credit risk and market risk. We are subject to interest rate risk on our interest-bearing liabilities.
Credit risk is the risk of default on our operations and tenants’ inability or unwillingness to make contractually required
payments. Market risk includes changes in the value of our properties and related loans, changes in the value of our marketable
securities and changes in the value of the shares we hold in the CPA® REITs due to changes in interest rates or other market
factors. In addition, we own investments in the European Union and are subject to the risks associated with changing foreign
currency exchange rates.

Foreign Currency Exchange

We are exposed to foreign currency exchange rate movements, primarily in the Euro. We manage foreign currency exchange rate
movements by generally placing both our debt obligation to the lender and the tenant’s rental obligation to us in the same
currency, but we are subject to foreign currency exchange rate movements to the extent of the difference in the timing and
amount of the rental obligation and the debt service. We also face challenges with repatriating cash from our foreign
investments. We may encounter instances where it is difficult to repatriate cash because of jurisdictional restrictions or because
repatriating cash may result in current or future tax liabilities. Realized and unrealized gains and losses recognized in earnings
related to foreign currency transactions are included in Other income and (expenses) in the consolidated financial statements.

Use of Derivative Financial Instruments

When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates. We have not entered,
and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to derivative instruments that
we enter into on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, and we
may own common stock warrants, granted to us by lessees when structuring lease transactions, that are considered to be
derivative instruments. The primary risks related to our use of derivative instruments are that a counterparty to a hedging
arrangement could default on its obligation or that the credit quality of the counterparty may be downgraded to such an extent
that it impairs our ability to sell or assign our side of the hedging transaction. While we seek to mitigate these risks by entering
into hedging arrangements with counterparties that are large financial institutions that we deem to be credit worthy, it is possible
that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we
terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have
established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial
instrument activities.

W. P. Carey 2009 10-K — 71

Notes to Consolidated Financial Statements

In March 2008, the FASB amended the existing guidance for accounting for derivative instruments and hedging activities to
require additional disclosures that are intended to help investors better understand how derivative instruments and hedging
activities affect an entity’s financial position, financial performance and cash flows. The enhanced disclosure requirements
primarily surround the objectives and strategies for using derivative instruments by their underlying risk as well as a tabular
format of the fair values of the derivative instruments and their gains and losses. The required additional disclosures are
presented below.

The following table sets forth our derivative instruments at December 31, 2009 and 2008 (in thousands):

Balance Sheet Location December 31, 2009

December 31, 2008

Liability Derivatives Fair Value at

Derivatives designated as hedging instruments
Interest rate swap

Other liabilities

Derivatives not designated as hedging instruments
Interest rate cap (a)
Total derivatives

Other liabilities

(634)

—
(634)

(419)

—
(419)

(a) Our secured credit facility had a variable interest rate equal to the one-month LIBOR plus a spread of 225 basis points. In

March 2008, we obtained a $35.5 million interest rate cap whereby the LIBOR component of our interest rate could not
exceed 4.75% through December 2008. In October 2008, we amended the interest rate cap agreement so that the LIBOR
component of the interest rate could not exceed 5.75% through December 2009. In January 2009, this credit facility was
repaid and terminated, at which time the interest rate cap was terminated. For the duration of the interest rate cap, we did
not account for this instrument as a hedge, and therefore changes in value were reflected in our consolidated statement of
income. The interest rate cap had no fair value at either December 31, 2008 or the date of termination, and no gains or
losses were included in Other income and (expenses) for the years ended December 31, 2009 and 2008.

Our derivative instruments had no impact on our earnings for the years ended December 31, 2009, 2008 and 2007. The following
table presents the impact of derivative instruments on OCI within our consolidated financial statements (in thousands):

Amount of (Loss) Gain Recognized in
OCI on Derivative (Effective Portion)
Years ended December 31,
2008

2007

2009

Derivatives in Cash Flow Hedging Relationships
Interest rate swap (a)

(243)

(419)

—

(a) During the years ended December 31, 2009, 2008 and 2007, no gains or losses were reclassified from OCI into income

related to effective or ineffective portions of hedging relationships or to amounts excluded from effectiveness testing.

See below for information on our purposes for entering into derivative instruments and for information on derivative instruments
owned by unconsolidated ventures, which are excluded from the tables above.

Interest Rate Swaps and Caps

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we
attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our venture partners
may obtain variable rate non-recourse mortgage loans and, as a result, may enter into interest rate swap agreements or interest
rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable rate debt service obligations
of the loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream
of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate
caps limit the effective borrowing rate of variable rate debt obligations while allowing participants to share in downward shifts in
interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.

W. P. Carey 2009 10-K — 72

Notes to Consolidated Financial Statements

The interest rate swap derivative instrument that we had outstanding at December 31, 2009 was designated as a cash flow hedge
and is summarized as follows (dollars in thousands):

3-Month Euribor

“Pay-fixed” swap $ 9,428

4.2%

Type

Notional(a)
Amount Interest Rate

Effective

Effective Expiration
Date

Date
3/2008

Fair Value(a)
(634)

3/2018 $

(a) Amounts are based upon the Euro exchange rate at December 31, 2009.

The interest rate cap derivative instruments that our unconsolidated ventures had outstanding at December 31, 2009 were
designated as cash flow hedges and are summarized as follows (dollars in thousands):

Ownership Interest
at December 31, 2009

Notional
Amount Cap Rate (a)

Effective Expiration

Spread

Date

Type
17.75% Interest rate cap $119,750
18,828
78.95% Interest rate cap

4.0%
3.0%

4.8% 8/2009
4.0% 9/2009

Fair Value
2,985
557

8/2014 $
4/2014

3-Month LIBOR
1-Month LIBOR

3,542

(a) The applicable interest rates of the related loans were 5.0% and 4.2% at December 31, 2009; therefore, the interest rate caps

were not being utilized at that date.

Other

Amounts reported in OCI related to derivatives will be reclassified to interest expense as interest payments are made on our non-
recourse variable-rate debt. At December 31, 2009, we estimate that an additional $0.3 million will be reclassified as interest
expense during the next twelve months.

We have agreements with certain of our derivative counterparties that contain certain credit contingent provisions that could
result in a declaration of default against us regarding our derivative obligations if we either default or are capable of being
declared in default on any of our indebtedness. At December 31, 2009, we have not been declared in default on any of our
derivative obligations. The estimated fair value of our derivatives that were in a net liability position was $0.7 million at
December 31, 2009, which includes accrued interest but excludes any adjustment for nonperformance risk. If we had breached
any of these provisions at December 31, 2009, we could have been required to settle our obligations under these agreements at
their termination value of $0.8 million.

Portfolio Concentration Risk

Concentrations of credit risk arise when a group of tenants is engaged in similar business activities or is subject to similar
economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio
to assess potential concentrations of credit risk. While we believe our portfolio is reasonably well diversified, it does contain
concentrations in excess of 10% of current annualized lease revenues in certain areas, as described below. Although we view our
exposure from properties that we purchased together with our affiliates based on our ownership percentage in these properties,
the percentages below are based on our consolidated ownership and not on our actual ownership percentage in these investments.

At December 31, 2009, the majority of our directly owned real estate properties were located in the U.S. (89%), with Texas
(17%) and California (13%) representing the only geographic concentrations. At December 31, 2009, our directly owned real
estate properties contain concentrations in the following asset types: industrial (35%), office (35%) and warehouse/distribution
(15%); and in the following tenant industries: telecommunications (18%), business and commercial services (17%) and retail
stores (10%).

W. P. Carey 2009 10-K — 73

Notes to Consolidated Financial Statements

Note 14. Equity and Stock Based and Other Compensation

Distributions Payable

We declared a quarterly distribution of $0.502 per share and a special distribution of $0.30 per share in December 2009, which
was paid in January 2010 to shareholders of record at December 31, 2009. The special distribution was approved by our board of
directors as a result of an increase in our 2009 taxable income.

Accumulated Other Comprehensive Loss

The following table presents accumulated other comprehensive loss reflected in equity, net of tax. Amounts include our
proportionate share of other comprehensive income or loss from our unconsolidated investments (in thousands):

Unrealized gain (loss) on marketable securities
Unrealized loss on derivative instruments
Foreign currency translation adjustment
Accumulated other comprehensive loss

Stock Based Compensation

December 31,

2009

2008

42
(901)
178
(681)

(11)
(419)
(398)
(828)

At December 31, 2009, we maintained several stock-based compensation plans as described below. The total compensation
expense (net of forfeitures) for these plans was $9.3 million, $7.3 million and $5.6 million for the years ended December 31,
2009, 2008 and 2007, respectively. The tax benefit recognized by us related to these plans totaled $4.2 million, $3.2 million and
$2.5 million for the years ended December 31, 2009, 2008 and 2007, respectively.

1997 Share Incentive Plan

We maintain the 1997 Share Incentive Plan (as amended, the “1997 Incentive Plan”), which authorized the issuance of up to
6,200,000 shares of our Common Stock, of which 5,892,253 were issued or are currently reserved for issuance upon exercise of
outstanding options and vesting of restricted units and performance units at December 31, 2009. The 1997 Incentive Plan has
been replaced by a new stock incentive plan (see “2009 Incentive Plan” below), and as a result no further awards can be made
under the 1997 Incentive Plan. The 1997 Incentive Plan provided for the grant of (i) share options, which may or may not qualify
as incentive stock options under the Code , (ii) performance shares or units, (iii) dividend equivalent rights and (iv) restricted
shares or units. The vesting of grants is accelerated upon a change in our control and under certain other conditions. Options
granted under the 1997 Incentive Plan generally have a 10-year term and generally vest in four equal annual installments.

In December 2007, the Compensation Committee approved a long-term incentive compensation program (the “LTIP”) and
terminated further contributions to the Partnership Equity Unit Plan described below. In 2008, the Compensation Committee
approved long-term incentive awards consisting of 153,900 RSUs and 148,250 PSUs under the LTIP through the 1997 Incentive
Plan. In 2009, the Compensation Committee granted 126,050 RSUs and 152,000 PSUs under the LTIP through the 1997
Incentive Plan. The RSUs generally vest over three years. Vesting and payment of the PSUs is conditional on certain
performance goals being met by us during the performance period. The ultimate number of PSUs to be vested will depend on the
extent to which we meet the performance goals at the end of the three-year performance period and can range from zero to three
times the original awards. At the end of each reporting period, we evaluate the ultimate number of PSUs we expect to vest based
upon the extent to which we have met and expect to meet the performance goals and where appropriate revise our estimate and
associated expense. Upon vesting, the RSUs and PSUs may be converted into shares of our common stock. Both the RSUs and
PSUs carry dividend equivalent rights. Dividend equivalent rights on RSUs are paid in cash on a quarterly basis whereas
dividend equivalent rights on PSUs accrue during the performance period and may be converted into additional shares of
common stock at the conclusion of the performance period to the extent the PSUs vest. Dividend equivalent rights are accounted
for as a reduction to retained earnings to the extent that the awards are expected to vest. For awards that are not expected to vest
or do not ultimately vest, dividend equivalent rights are accounted for as additional compensation expense.

As a result of issuing these awards, we currently expect to recognize compensation expense totaling approximately $12.9 million
over the vesting period, of which $4.2 million and $2.4 million was recognized during 2009 and 2008, respectively.

W. P. Carey 2009 10-K — 74

Notes to Consolidated Financial Statements

2009 Share Incentive Plan

In June 2009, our stockholders approved the 2009 Share Incentive Plan (the “2009 Incentive Plan”) to replace the 1997 Incentive
Plan, except with respect to outstanding contractual obligations under the 1997 Incentive Plan, so that no further awards can be
made under that plan. The 2009 Incentive Plan authorizes the issuance of up to 3.6 million shares of our common stock and
provides for the grant of (i) share options, (ii) restricted shares or units, (iii) performance shares or units, and (iv) dividend
equivalent rights. The vesting of grants is accelerated upon a change in our control and under certain other conditions. Future
grants under the LTIP will be made under the 2009 Incentive Plan.

1997 Non-Employee Directors’ Plan

We maintain the 1997 Non-Employee Directors’ Plan (the “1997 Directors’ Plan”), which authorized the issuance of up to
300,000 shares of our Common Stock, of which 129,462 shares were granted at December 31, 2009. The 1997 Directors’ Plan
has been replaced by a new stock-based plan for outside directors, and as a result, no further awards can be made under the 1997
Directors’ Plan (see the 2009 Non-Employee Directors’ Incentive Plan below). The 1997 Directors’ Plan provided for the grant
of (i) share options which may or may not qualify as incentive stock options, (ii) performance shares, (iii) dividend equivalent
rights and (iv) restricted shares. Options granted under the 1997 Directors’ Plan have a 10-year term and vest generally over
three years from the date of grant. In June 2007, the 1997 Director’s Plan, which had been due to expire in October 2007, was
extended through October 2017.

2009 Non-Employee Directors’ Incentive Plan

In June 2009, our stockholders approved the 2009 Non-Employee Directors’ Incentive Plan (the “2009 Directors’ Plan”) to
replace the predecessor plan, the 1997 Directors’ Plan, except with respect to outstanding contractual obligations under the
predecessor plan, so that no further awards can be made under that plan. The 2009 Directors’ Plan authorizes the issuance of
325,000 shares of our common stock in the aggregate and provides for the automatic annual grant of RSUs with a total value of
$50,000 to each director. In the discretion of our board of directors, the awards may also be in the form of share options or
restricted shares, or any combination of the permitted awards. Grants under the 2009 Directors Plan totaled 30,933 RSUs at
December 31, 2009.

Employee Share Purchase Plan

We sponsor an Employee Share Purchase Plan (“ESPP”) pursuant to which eligible employees may contribute up to 10% of
compensation, subject to certain limits, to purchase our common stock. Employees can purchase stock semi-annually at a price
equal to 85% of the fair market value at certain plan defined dates. The ESPP is not material to our results of operations.
Compensation expense under this plan for the years ended December 31, 2009, 2008 and 2007 was $0.4 million, $0.1 million
and $0.2 million, respectively.

Carey Management Warrants

In January 1998, the predecessor of Carey Management was granted warrants to purchase 2,284,800 shares of our common stock
exercisable at $21 per share and warrants to purchase 725,930 shares exercisable at $23 per share as compensation for
investment banking services in connection with structuring the consolidation of the CPA® Partnerships. During the year ended
December 31, 2008, a corporation wholly-owned by our Chairman, Wm. Polk Carey, exercised warrants to purchase a total of
695,930 shares of our common stock at $23 per share, for which we received proceeds of $16.1 million. During the years ended
December 31, 2007 and 2006, the corporation wholly-owned by Mr. Carey exercised warrants to purchase a total of 684,800 and
100,000 shares of our common stock at $21 per share, for which we received proceeds of $14.4 million and $2.1 million,
respectively. In addition, during 2007, 1,500,000 warrants were exercised at $21 per share in a cashless exercise for which
567,164 shares were issued. At December 31, 2008, all of the $21 per share warrants had been exercised. On January 1, 2009,
the remaining 24,000 warrants exercisable at $23 per share expired without value.

Partnership Equity Unit Plan

During 2003, we adopted a non-qualified deferred compensation plan (the Partnership Equity Plan, or “PEP”) under which a
portion of any participating officer’s cash compensation in excess of designated amounts was deferred and the officer was
awarded Partnership Equity Plan Units (“PEP Units”). The value of each PEP Unit was intended to correspond to the value of a
share of the CPA® REIT designated at the time of such award. During 2005, further contributions to the initial PEP were
terminated and it was succeeded by a second PEP. As amended, payment under these plans will occur at the earlier of
December 16, 2013 (in the case of the initial PEP) or twelve years from the date of award. The award is fully vested upon grant.
Each of the PEPs is a deferred compensation plan and is therefore considered to be outside the scope of current accounting
guidance for stock-based compensation and subject to liability award accounting. The value of each PEP Unit will be adjusted to
reflect the underlying appraised value of the designated CPA® REIT. Additionally, each PEP Unit will be entitled to distributions
equal to the distribution rate of the CPA® REIT. All issuances of PEP Units, changes in the fair value of PEP Units and
distributions paid are included in our compensation expense.

W. P. Carey 2009 10-K — 75

Notes to Consolidated Financial Statements

The value of the plans is reflected at fair value each quarter and is subject to changes in the fair value of the PEP units.
Compensation expense under these Plans for the years ended December 31, 2009, 2008 and 2007 was $0.2 million, $0.9 million
and $5.2 million, respectively. Further contributions to the second PEP were terminated at December 31, 2007; however, this
termination did not affect any awardees’ rights pursuant to awards granted under this plan. In December 2008, participants in the
PEPs were required to make an election to either (i) remain in the PEPs, (ii) receive cash for their PEP Units (available to former
employees only) or (iii) convert their PEP Units to fully vested RSUs (available to current employees only) to be issued under
the 1997 Incentive Plan on June 15, 2009. Substantially all of the PEP participants elected to receive cash or convert their
existing PEP Units to RSUs. In January 2009, we paid $2.0 million in cash to former employee participants who elected to
receive cash for their PEP Units. As a result of the election to convert PEP Units to RSUs, we derecognized $9.5 million of our
existing PEP liability and recorded a deferred compensation obligation within W. P. Carey members’ equity in the same amount
during the second quarter of 2009. The PEP participants that elected RSUs received a total of 361,236 RSUs, which was equal to
the total value of their PEP Units divided by the closing price of our common stock on June 15, 2009. The PEP participants
electing to receive RSUs were required to defer receipt of the underlying shares of our common stock for a minimum of two
years. These participants are entitled to receive dividend equivalents equal to the amount of dividends paid on the underlying
common stock during the deferral period. At December 31, 2009, we are obligated to issue $9.5 million of our common stock
underlying these RSUs, which is recorded within W. P. Carey members’ equity as Deferred compensation obligation. The
remaining PEP liability pertaining to participants who elected to remain in the plans was $0.7 million at December 31, 2009.

Profit-Sharing Plan

We sponsor a qualified profit-sharing plan and trust covering substantially all of our full-time employees who have attained age
21, worked a minimum of 1,000 hours and completed one year of service. We are under no obligation to contribute to the plan
and the amount of any contribution is determined by and at the discretion of our board of directors. Our board of directors can
authorize contributions to a maximum of 15% of an eligible participant’s compensation, limited to less than $0.1 million
annually per participant. For the years ended December 31, 2009, 2008 and 2007, amounts expensed for contributions to the trust
were $3.3 million, $2.8 million and $2.4 million, respectively. The profit-sharing plan is a deferred compensation plan and is
therefore considered to be outside the scope of current accounting guidance for stock-based compensation.

WPCI Stock Options

On June 30, 2003, WPCI granted an incentive award to two officers of WPCI consisting of 1,500,000 restricted units,
representing an approximate 13% interest in WPCI, and 1,500,000 options for WPCI units with a combined fair value of
$2.5 million at that date. Both the options and restricted units vested ratably over five years, with full vesting occurring
December 31, 2007. During 2008, the officers exercised all of their 1,500,000 options to purchase 1,500,000 units of WPCI at $1
per unit. Upon the exercise of the WPCI options, the officers had a total interest of approximately 23% in WPCI. The terms of
the vested restricted units and units received in connection with the exercise of options of WPCI by noncontrolling interest
holders provided that the units could be redeemed, commencing December 31, 2012 and thereafter, solely in exchange for our
shares and that any redemption would be subject to a third party valuation of WPCI. In connection with a reorganization of
WPCI into three separate entities in 2008, the officers also owned equivalent interests in the three new entities.

In December 2009, one of those officers resigned from W. P. Carey, WPCI and all affiliated entities pursuant to a mutually
agreed separation. As part of this separation, we effected the purchase of all of the interests in WPCI and certain related entities
held by that officer for cash, at a negotiated fair market value of $15.4 million. The tax effect of approximately $4.8 million
relating to the acquisition of this interest, which resulted in an increase in contributed capital, has been recorded as an adjustment
to Listed shares in the consolidated balance sheets. The remaining officer currently has a total interest of approximately 7.7% in
each of WPCI and the related entities.

Redeemable Noncontrolling Interest

We account for the noncontrolling interests in WPCI as redeemable noncontrolling interests, as we have an obligation to
repurchase the interests from the remaining partner, subject to certain conditions. The partner’s interest is reflected at estimated
redemption value for all periods presented. Redeemable noncontrolling interests, as presented on the consolidated balance sheets,
reflect adjustments of $6.8 million and $0.3 million at December 31, 2009 and 2008, respectively, to present the partner’s
interest at redemption value.

W. P. Carey 2009 10-K — 76

Notes to Consolidated Financial Statements

The following table presents a reconciliation of redeemable noncontrolling interests (in thousands):

Balance at beginning of year
Redemption value adjustment
Net income
Distributions
Purchase of noncontrolling interests
Change in other comprehensive loss
Balance at end of year

Company Options and Grants

2009

2008

2007

18,085
6,773
2,258
(4,056)
(15,380)
12
7,692

20,394
322
1,508
(4,139)
—
—
18,085

13,444
2,426
4,756
(232)
—
—
20,394

Option and warrant activity at December 31, 2009 and changes during the year ended December 31, 2009 were as follows:

Outstanding at beginning of year
Granted
Exercised
Forfeited / Expired
Outstanding at end of year
Vested and expected to vest at end of year
Exercisable at end of year

Weighted
Average
Exercise Price
27.16
$
—
22.29
28.46
27.55
27.50
26.25

Shares
2,543,239
—
(201,701)
(85,934)
$
2,255,604
$
2,220,902
1,350,494 $

Weighted
Average
Remaining
Contractual
Term (in Years)

Aggregate
Intrinsic Value

4.80 $
4.79 $
4.33 $

4,490,925
4,472,016
4,064,704

Option and warrant activity for 2008 and 2007 was as follows:

Years ended December 31,

2008

Weighted
Average

Weighted
Average
Remaining
Contractual Term
(in Years)

2007

Weighted
Average
Remaining
Contractual Term
(in Years)

Weighted
Average
Exercise Price

Shares Exercise Price

Outstanding at beginning of

year
Granted
Exercised
Forfeited / Expired
Outstanding at end of year
Exercisable at end of year

3,428,170 $
20,000
(882,931)
(22,000)
2,543,239
1,242,076 $

25.87
31.56
22.15
30.27
27.16
24.38

5,600,069 $
384,348
(2,494,247)
(62,000)
3,428,170
2,108,393 $

5.52

23.14
32.85
20.71
30.22
25.87
23.30

5.35

We did not issue any option awards during 2009. The weighted average grant date fair value of options granted during the years
ended December 31, 2008 and 2007 was $2.42 and $3.00, respectively. The total intrinsic value of options exercised during the
years ended December 31, 2009, 2008 and 2007 was $1.0 million, $1.9 million and $4.2 million, respectively.

W. P. Carey 2009 10-K — 77

Notes to Consolidated Financial Statements

Nonvested restricted stock and RSU awards at December 31, 2009 and changes during the year ended December 31, 2009 were
as follows:

Nonvested at January 1, 2009
Granted
Vested
Forfeited
Nonvested at December 31, 2009

Weighted Average

Shares
454,452 $
159,362
(194,741)
(37,195)
381,878 $

Grant Date
Fair Value

30.50
23.97
29.77
23.00
28.87

The total fair value of shares vested during the years ended December 31, 2009, 2008 and 2007 was $7.2 million, $4.4 million
and $2.8 million, respectively.

Nonvested PSU awards at December 31, 2009 and changes during the year ended December 31, 2009 were as follows:

Nonvested at January 1, 2009
Granted
Vested
Forfeited
Adjustment (a)
Nonvested at December 31, 2009

Weighted Average

90,469 $

152,000
—
(20,625)
(51,469)
170,375 $

Grant Date
Fair Value

37.88
30.42
—
32.33
26.50
35.33

(a) Vesting and payment of the PSUs is conditional on certain performance goals being met by us during the three-year
performance period. The ultimate number of PSUs to be vested will depend on the extent to which we meet the
performance goals and can range from zero to three times the original awards. Pursuant to a review of our current and
expected performance versus the performance goals, we revised our estimate of the ultimate number of certain of the PSUs
to be vested. As a result, we recorded an adjustment in 2009 to reflect the number of shares expected to be issued when the
PSUs vest.

The fair value of certain share-based payment awards is estimated using the Black-Scholes option pricing formula (options and
warrants), which involves the use of assumptions that are used in estimating the fair value of share-based payment awards. The
risk-free interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the
time of grant. The dividend yield is based upon the trailing quarterly distribution for the four quarters preceding the award
expressed as a percentage of our stock price. Expected volatilities are based on a review of the five-and ten-year historical
volatility of our stock as well as the historical volatilities and implied volatilities of common stock and exchange traded options
of selected comparable companies. The expected term of awards granted is derived from an analysis of the remaining life of our
awards giving consideration to their maturity dates and remaining time to vest. We use historical data to estimate option exercise
and employee termination within the valuation model; separate groups of employees that have similar historical exercise
behavior are considered separately for valuation purposes. We did not grant any stock option awards during 2009. For the years
ended December 31, 2008 and 2007, the following assumptions and weighted average fair values were used:

Risk-free interest rates
Dividend yields
Expected volatility
Expected term in years

Years ended December 31,

2008
3.3% - 3.8%
5.4% - 6.3%
15% - 16.4%
6.3

2007
3.8 - 4.7%
5.4 - 6.2%
15.0 - 16.0%
6.1 - 6.3

W. P. Carey 2009 10-K — 78

Notes to Consolidated Financial Statements

At December 31, 2009, approximately $9.9 million of total unrecognized compensation expense related to nonvested stock-based
compensation awards is expected to be recognized over a weighted-average period of approximately 1.6 years.

We have the ability and intent to issue shares upon stock option exercises. Historically, we have issued authorized but unissued
common stock to satisfy such exercises. Cash received from stock option exercises and purchases under the ESPP during the
year ended December 31, 2009 was $1.5 million.

Earnings Per Share

In June 2008, the FASB issued new authoritative guidance for determining earnings per share, which we adopted as required on
January 1, 2009 on a retrospective basis. Under the new guidance, all unvested share-based payment awards that contain non-
forfeitable rights to dividends are considered to be participating securities and therefore are included in the computation of
earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings
per share for each class of common shares and participating security according to dividends declared (or accumulated) and
participation rights in undistributed earnings. Our unvested RSUs contain rights to receive non-forfeitable distributions, and
therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes
the income attributable to the unvested RSUs from the numerator. The following table summarizes basic and diluted earnings per
share for the periods indicated (in thousands, except share amounts):

Years ended December 31,
2008

2009

2007

Net income attributable to W. P. Carey members
Allocation of distributions paid on unvested RSUs in excess of net income
Net income – basic
Income effect of dilutive securities, net of taxes
Net income – diluted

69,023
(1,127)
67,896
1,250
69,146

78,047
294
78,341
840
79,181

79,252
—
79,252
2,616
81,868

Weighted average shares outstanding – basic
Effect of dilutive securities
Weighted average shares outstanding – diluted

39,019,709
693,026

39,712,735

39,202,520
1,018,592
40,221,112

38,113,857
1,754,351
39,868,208

Securities included in our diluted earnings per share determination consist of stock options, warrants and restricted stock.
Securities totaling 2.6 million shares, 2.4 million shares and 3.5 million shares for the years ended December 31, 2009, 2008, and
2007, respectively, were excluded from the earnings per share computations above as their effect would have been anti-dilutive.

Share Repurchase Programs

In June 2007, our board of directors approved a $20.0 million share repurchase program through December 31, 2007. In
September 2007, our board of directors approved the repurchase of an additional $20.0 million of our stock under this share
repurchase program. The board also approved an extension of this program to March 31, 2008. Under this program, we could
repurchase up to $40.0 million of our common stock in the open market through March 31, 2008 as conditions warranted. In
March 2008, we terminated this program. During the term of the program, we repurchased a total of $30.7 million of our
common stock.

In October 2008, the Executive Committee of our board of directors (the “Executive Committee”) approved a program to
repurchase up to $10.0 million of our common stock through December 15, 2008. During the term of this program, we
repurchased a total of $8.5 million of our common stock. In December 2008, the Executive Committee approved a further
program to repurchase up to $10.0 million of our common stock through March 4, 2009 or the date the maximum was reached, if
earlier. During the term of this program, we repurchased a total of $9.3 million of our common stock. In March 2009, the
Executive Committee approved an additional program to repurchase up to $3.5 million of our common stock through March 27,
2009 or the date the maximum was reached, if earlier. During the term of this program, we repurchased a total of $2.8 million of
our common stock.

Other

We have employment contracts with certain senior executives. These contracts provide for severance payments in the event of
termination under certain conditions including a change of control. During 2009, 2008 and 2007, we recognized severance costs
totaling approximately $1.7 million, $0.7 million and $0.2 million, respectively, related to several former employees. Such costs
are included in general and administrative expenses in the accompanying consolidated financial statements.

W. P. Carey 2009 10-K — 79

Notes to Consolidated Financial Statements

Note 15. Income Taxes

The components of our provision for income taxes for the years ended December 31, 2009, 2008 and 2007 are as follows (in
thousands):

2009

2008

2007

Federal
Current
Deferred

State, Local and Foreign
Current
Deferred

Total Provision

19,796
(6,388)
13,408

12,722
(3,337)
9,385
22,793

Deferred income taxes at December 31, 2009 and 2008 consist of the following (in thousands):

Deferred tax assets

Unearned and deferred compensation
Other

Deferred tax liabilities

Receivables from affiliates
Investments
Other

Net deferred tax liability

22,266
(6,123)
16,143

10,594
(3,216)
7,378
23,521

20,531
13,806
34,337

10,846
6,556
17,402
51,739

December 31,

2009

2008

10,121
4,899
15,020

13,478
39,116
247
52,841
37,821

9,334
82
9,416

17,887
44,235
(349)
61,773
52,357

The difference between the tax provision and the tax benefit recorded at the statutory rate at December 31, 2009, 2008 and 2007
is as follows (in thousands):

Pre-tax income from taxable subsidiaries
Federal provision at statutory tax rate (35%)
State and local taxes, net of federal benefit
Settlement provision — nondeductible
Amortization of intangible assets
Other
Tax provision – taxable subsidiaries
Other state, local and foreign taxes
Total tax provision

Years ended December 31,
2008

2009

2007

41,943
14,680
4,246
—
855
101
19,882
2,911
22,793

56,151
19,653
3,522
—
856
211
24,242
(721)
23,521

92,274
32,296
11,136
4,488
867
1,328
50,115
1,624
51,739

Included in income taxes in the consolidated balance sheets at December 31, 2009 and 2008 are accrued income taxes totaling
$5.3 million and $5.6 million, respectively, and deferred income taxes totaling $37.8 million and $52.4 million, respectively.

W. P. Carey 2009 10-K — 80

Notes to Consolidated Financial Statements

We have elected to be treated as a partnership for U.S. federal income tax purposes and prior to our restructuring in
October 2007 conducted our real estate ownership operations through partnerships or limited liability companies electing to be
treated as partnerships for U.S. federal income tax purposes. As partnerships, we and our partnerships subsidiaries are generally
not directly subject to tax. We conduct our investment management services primarily through taxable subsidiaries. These
operations are subject to federal, state, local and foreign taxes, as applicable. We conduct business in the U. S. and the European
Union, and as a result, we or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various
state and certain foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S.
income tax examinations for years before 2004. Certain of our inter-company transactions that have been eliminated in
consolidation for financial accounting purposes are also subject to taxation. Periodically, shares in the CPA® REITs that are
payable to our taxable subsidiaries in consideration for services rendered are distributed from these subsidiaries to us.

We adopted the authoritative guidance for accounting for uncertainty in income taxes on January 1, 2007. As a result of the
implementation, we recognized a $1.1 million decrease to reserves for uncertain tax positions. This decrease in reserves was
accounted for as an adjustment to the beginning balance of retained earnings on the balance sheet. Including the cumulative
effect decrease in reserves, at the beginning of 2007, we had approximately $0.8 million of total gross unrecognized tax benefits.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Balance at January 1,
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlements
Balance at December 31,

2009

2008

1,022
—
11
—
—
1,033

838
—
184
—
—
1,022

At both December 31, 2009 and 2008, we had unrecognized tax benefits of $0.6 million (net of federal benefits), that if
recognized would favorably affect the effective income tax rate in any future periods. We recognize interest and penalties related
to uncertain tax positions in income tax expense. At both December 31, 2009 and 2008, we had $0.1 million of accrued interest
and penalties related to uncertain tax positions.

During the next year, we currently expect the liability for uncertain taxes to be adjusted on a similar basis to the adjustments that
occurred in 2008. Our tax returns are subject to audit by taxing authorities. Such audits can often take years to complete and
settle. The tax years 2006-2009 remain open to examination by the major taxing jurisdictions to which we are subject.

Carey REIT II owns our real estate assets and has elected to be taxed as a REIT under Sections 856 through 860 of the Code with
the filing of its 2007 return. We believe we have operated, and we intend to continue to operate, in a manner that allows Carey
REIT II to continue to qualify as a REIT. Under the REIT operating structure, Carey REIT II is permitted to deduct distributions
paid to our shareholders and generally will not be required to pay U.S. federal income taxes. Accordingly, no provision has been
made for U.S. federal income taxes in the consolidated financial statements.

Note 16. Discontinued Operations

From time to time, tenants may vacate space due to lease buy-outs, elections not to renew their leases, company insolvencies or
lease rejections in the bankruptcy process. In these cases, we assess whether we can obtain the highest value from the property
by re-leasing or selling it. In addition, in certain cases, we may elect to sell a property that is occupied if selling the property
yields the highest value. When it is appropriate to do so under current accounting guidance for the disposal of long-lived assets,
we reclassify the property as an asset held for sale and the current and prior period results of operations of the property are
reclassified as discontinued operations.

2009 — We sold five domestic properties for $43.5 million, net of selling costs, and recognized a net gain on sale of
$7.7 million, excluding impairment charges of $0.9 recognized in 2009 and $1.1 million in prior years.

2008 — Subsequent to the sale of a domestic property in 2004, which was reflected in discontinued operations, we entered into
litigation with the former tenant. In June 2008, we received $3.8 million from the former tenant in connection with the resolution
of the lawsuit.

W. P. Carey 2009 10-K — 81

Notes to Consolidated Financial Statements

2007 — We sold several properties for combined sales proceeds of $46.0 million, net of selling costs, and in addition received
lease termination proceeds of $1.9 million. We recognized a combined net gain on sale of $15.5 million, exclusive of an
impairment charge of $2.3 million recognized in 2007 and combined impairment charges totaling $2.7 million recognized in
prior years.

The results of operations for properties that are held for sale or have been sold are reflected in the consolidated financial
statements as discontinued operations for all periods presented and are summarized as follows (in thousands):

Revenues
Expenses
Gains on sales of real estate, net
Impairment charges
Income from discontinued operations

Note 17. Segment Reporting

Years ended December 31,
2008

2009

2007

4,758
(1,427)
7,701
(899)

10,133

9,435
(2,041)
—
(538)
6,856

11,901
(6,076)
15,486
(2,914)
18,397

We evaluate our results from operations by our two major business segments – investment management and real estate
ownership (Note 1). The following table presents a summary of comparative results of these business segments (in thousands):

Investment Management

Revenues (a)
Operating expenses (a)
Other, net (b)
Provision for income taxes
Income from continuing operations attributable to W. P. Carey

members

Real Estate Ownership

Revenues
Operating expenses
Interest expense
Other, net (b)
Provision for income taxes
Income from continuing operations attributable to W. P. Carey

members

Total Company
Revenues (a)
Operating expenses (a)
Interest expense
Other, net (b)
Provision for income taxes
Income from continuing operations attributable to W. P. Carey

Years ended December 31,
2008

2009

2007

155,159
(110,160)
5,373
(21,038)

29,334

80,717
(49,755)
(15,189)
15,538
(1,755)

29,556

235,876
(159,915)
(15,189)
20,911
(22,793)

147,258
(101,202)
11,234
(22,432)

34,858

91,366
(42,923)
(18,858)
7,837
(1,089)

36,333

238,624
(144,125)
(18,858)
19,071
(23,521)

175,035
(102,532)
14,463
(50,158)

36,808

82,921
(41,340)
(20,266)
9,707
(1,581)

29,441

257,956
(143,872)
(20,266)
24,170
(51,739)

members

58,890

71,191

66,249

Equity Investments in Real Estate Total Long-Lived Assets(c)

as of December 31,

2008

as of December 31,
2008
2009

Total Assets
as of December 31,

Investment Management
Real Estate Ownership
Total Company

2009

215,951
89,039
304,990

200,971 $ 222,453

59,649

668,510

260,620 $ 890,963

2009
$ 210,249 $ 343,989 $ 346,568
764,568
$ 944,793 $1,093,336 $1,111,136

734,544

749,347

2008

W. P. Carey 2009 10-K — 82

Notes to Consolidated Financial Statements

(a) Included in revenues and operating expenses are reimbursable costs from affiliates totaling $48.7 million, $41.2 million and

$13.8 million for the years ended December 31, 2009, 2008 and 2007, respectively.

(b) Includes interest income, income from equity investments in real estate and CPA® REITs, income (loss) attributable to
noncontrolling interests and other income and (expenses). Other income and (expenses) in 2009 in the investment
management segment includes other income of $4.0 million related to a settlement of a dispute with a vendor regarding
certain fees we paid in prior years for services they performed.

(c) Includes real estate, real estate under construction, net investment in direct financing leases, equity investments in real

estate, operating real estate and intangible assets related to management contracts and leases.

Geographic information for the real estate ownership segment is as follows (in thousands):

2009
Revenues
Operating expenses
Interest expense
Other, net (b)
Provision for income taxes

Income from continuing operations attributable to W. P. Carey

members

Total assets
Total long-lived assets

2008
Revenues
Operating expenses
Interest expense
Other, net (b)
Provision for income taxes

Income from continuing operations attributable to W. P. Carey

members

Total assets
Total long-lived assets

2007
Revenues
Operating expenses
Interest expense
Other, net (b)
Provision for income taxes

Income from continuing operations attributable to W. P. Carey

members

Total assets
Total long-lived assets

Domestic

Foreign(a)

Total

$
$
$

72,744
(47,336)
(13,138)
9,749
(792)

21,227
684,482
620,599

Domestic
83,531
(39,652)
(16,710)
4,474
(386)

31,257
707,399
686,003

Domestic

77,351
(39,432)
(18,597)
5,995
(1,456)

23,861
744,297
719,059

$
$
$

7,973
(2,419)
(2,051)
5,789
(963)

8,329
64,865
47,911

Foreign(a)

7,835
(3,271)
(2,148)
3,363
(703)

5,076
57,169
48,541

Foreign(a)

5,570
(1,908)
(1,669)
3,712
(125)

5,580
61,901
52,999

$
$
$

80,717
(49,755)
(15,189)
15,538
(1,755)

29,556
749,347
668,510

Total

91,366
(42,923)
(18,858)
7,837
(1,089)

36,333
764,568
734,544

Total

82,921
(41,340)
(20,266)
9,707
(1,581)

29,441
806,198
772,058

(a) At December 31, 2009, our international investments were comprised of investments in France, Germany and Poland.
(b) Includes interest income, income from equity investments in real estate and CPA® REITs, income (loss) attributable to

noncontrolling interests and other income and (expenses).

W. P. Carey 2009 10-K — 83

Notes to Consolidated Financial Statements

Note 18. Selected Quarterly Financial Data (unaudited)

(Dollars in thousands, except per share amounts)

Revenues (a)
Expenses (a)

Net income

Add: Net loss attributable to noncontrolling

interests

Less: Net income attributable to redeemable

noncontrolling interests

Net income attributable to W. P. Carey members

Earnings per share attributable to W. P. Carey

members –
Basic
Diluted

Distributions declared per share

Three months ended
March 31, 2009 June 30, 2009 September 30, 2009 December 31, 2009
63,163
$
44,313

60,015 $
40,461

59,262 $
38,264

53,436 $
36,877

17,774

14,877

170

203

(235)

17,709

(103)

14,977

0.45
0.44

0.496

0.37
0.37

0.498

14,184

186

(1,019)
13,351

0.33
0.34

0.500

23,733

154

(901)
22,986

0.59
0.59

0.502(b)

Revenues (a)
Expenses (a)

Net income

Add: Net loss attributable to noncontrolling

interests

Less: Net income attributable to redeemable

noncontrolling interests

Net income attributable to W. P. Carey members

Earnings per share attributable to W. P. Carey

members –
Basic
Diluted

Distributions declared per share

Three months ended
March 31, 2008 June 30, 2008 September 30, 2008 December 31, 2008
60,053
$
33,841

65,316 $
38,124

57,187 $
36,257

56,068 $
35,903

17,190

20,152

172

168

(261)
17,101

(472)
19,848

0.44
0.43

0.482

0.51
0.50

0.487

19,301

238

(341)
19,198

0.49
0.48

0.492

21,962

372

(434)
21,900

0.56
0.56

0.494

(a) Certain amounts from previous quarters have been reclassified to discontinued operations (Note 16).
(b) Excludes a special distribution of $0.30 per share paid in January 2010 to shareholders of record at December 31, 2009.

W. P. Carey 2009 10-K — 84

Notes to Consolidated Financial Statements

Note 19. Subsequent Event

In May 2009, the FASB issued authoritative guidance for subsequent events, which we adopted as required in the second quarter
of 2009. The guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet
date but before financial statements are issued or are available to be issued.

W. P. Carey 2009 10-K — 85

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NOTES TO SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION

(a) Consists of the cost of improvements and acquisition costs subsequent to acquisition, including legal fees, appraisal fees,

title costs, other related professional fees and purchases of furniture, fixtures, equipment and improvements at the hotel
properties.

(b) The increase (decrease) in net investment is primarily due to (i) the amortization of unearned income from net investment in
direct financing leases, which produces a periodic rate of return that at times may be greater or less than lease payments
received, (ii) sales of properties, (iii) impairment charges, (iv) changes in foreign currency exchange rates and
(v) adjustments in connection with purchasing certain noncontrolling interests.

Balance at beginning of year
Additions/capital expenditures
Dispositions
Foreign currency translation adjustment
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intangible assets, assets held for sale and equity investments in real
estate

Impairment charge
Balance at end of year

Balance at beginning of year
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Depreciation expense from discontinued operations
Foreign currency translation adjustment
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intangible assets, assets held for sale and equity investments in real
estate
Dispositions
Balance at end of year

Balance at beginning of year
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Writeoff of assets in connection with tenant improvements
Balance at end of year

Balance at beginning of year
Depreciation expense
Writeoff of accumulated depreciation in connection with tenant

improvements

Balance at end of year

Reconciliation of Real Estate Accounted
for Under the Operating Method
December 31,
2008
602,109
4,972
—
(2,608)

2009
603,044
4,754
(46,951)
966

2007
620,472
15,346
(41,357)
5,185

(28,977)
(7,229)
525,607

(891)
(538)
603,044

3,480
(1,017)
602,109

Reconciliation of
Accumulated Depreciation
for Real Estate Accounted for
Under the Operating Method
December 31,
2008

2007

2009
103,249
12,841
1,298
285

(6,451)
(10,975)
100,247

88,704
15,007
—
(462)

—
—
103,249

79,968
14,439
695
2,558

61
(9,017)
88,704

Reconciliation for Operating Real Estate
December 31,
2008

2009

2007

84,547
1,380
—
85,927

81,358
3,189
—
84,547

41,275
41,425
(1,342)
81,358

Reconciliation of Accumulated
Depreciation for Operating Real Estate
December 31,
2008

2007

2009

10,013
2,026

—
12,039

8,169
1,844

—
10,013

7,669
1,842

(1,342)
8,169

W. P. Carey 2009 10-K — 89

At December 31, 2009, the aggregate cost of real estate that we and our consolidated subsidiaries own for federal income tax
purposes is approximately $797 million.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Our disclosure controls and procedures include our controls and other procedures designed to provide reasonable assurance that
information required to be disclosed in this and other reports filed under the Securities Exchange Act of 1934 (the “Exchange
Act”) is accumulated and communicated to management, including our chief executive officer and acting chief financial officer,
to allow timely decisions regarding required disclosure and to ensure that such information is recorded, processed, summarized
and reported within the required time periods specified in the SEC’s rules and forms. It should be noted that no system of
controls can provide complete assurance of achieving a company’s objectives and that future events may impact the
effectiveness of a system of controls.

Our chief executive officer and acting chief financial officer, after conducting an evaluation, together with members of our
management, of the effectiveness of the design and operation of our disclosure controls and procedures at December 31, 2009,
have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective
at December 31, 2009 at a reasonable level of assurance.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial
statements.

We assessed the effectiveness of our internal control over financial reporting at December 31, 2009. In making this assessment,
we used criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). Based on our assessment, we concluded that, at December 31, 2009, our internal control
over financial reporting is effective based on those criteria.

The effectiveness of our internal control over financial reporting at December 31, 2009 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report in Item 8.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

W. P. Carey 2009 10-K — 90

Item 10. Directors, Executive Officers and Corporate Governance.

PART III

This information will be contained in our definitive proxy statement for the 2010 Annual Meeting of Shareholders, to be filed
within 120 days following the end of our fiscal year, and is incorporated by reference.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

W. P. Carey 2009 10-K — 91

Item 15. Exhibits, Financial Statement Schedules.

PART IV

(1) and (2) — Financial statements and schedules — see index to financial statements and schedules included in Item 8.

(3) Exhibits:

The following exhibits are filed as part of this Report. Documents other than those designated as being filed herewith are
incorporated herein by reference.

Exhibit No.
3.1

Description
Amended and Restated Limited Liability Company
Agreement.

3.2

Amended and Restated Bylaws.

Method of Filing
Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2006 filed
August 9, 2006

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 filed
August 6, 2009

4.1

Form of Listed Share Stock Certificate.

Incorporated by reference to Registration Statement on
Form S-4 (No. 333-37901) filed October 15, 1997

10.1

10.2

10.3

Management Agreement Between Carey Management
LLC and the Company.

Incorporated by reference to Registration Statement on
Form S-4 (No. 333-37901) filed October 15, 1997

1997 Non-Employee Directors’ Incentive Plan
(Amended and restated as of April 23, 2007). *

Incorporated by reference to Schedule 14A filed
April 30, 2007

W. P. Carey & Co. LLC 1997 Share Incentive Plan
(Amended through June 11, 2009) (the “1997 Share
Incentive Plan”) *

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 filed
August 6, 2009

10.4

W. P. Carey & Co. Long-Term Incentive Program

10.5

W. P. Carey & Co. LLC Deferred Compensation Plan
for Employees. *

10.6

W. P. Carey & Co. LLC 2009 Share Incentive Plan
(the “2009 Share Incentive Plan”) *

10.7

Form of Share Option Agreement under the 2009
Share Incentive Plan *

10.8

Form of Restricted Share Agreement under the 2009
Share Incentive Plan *

10.9

Form of Restricted Share Unit Agreement under the
2009 Share Incentive Plan *

10.10

Form of Long-Term Performance Share Unit Award
Agreement under the 2009 Share Incentive Plan *

Incorporated by reference to Annual Report on
Form 10-K for the year ended December 31, 2008 filed
March 2, 2009

Incorporated by reference to Exhibit A to definitive
proxy statement filed April 30, 2009 (the “2009 Proxy
Statement”)

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 filed
August 6, 2009

W. P. Carey & Co. LLC 2009 Non-Employee
Directors’ Incentive Plan (the “2009 Directors Plan”) *

Incorporated by reference to Exhibit B to the 2009
Proxy Statement

10.11

10.12

Form of Restricted Share Unit Agreement under the
2009 Directors Plan *

10.13

Credit Agreement.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 filed
August 6, 2009

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2007 filed
August 2, 2007

W. P. Carey 2009 10-K — 92

Exhibit No.
10.14

Description
Separation Agreement dated as of December 24, 2009
by and between W. P. Carey & Co. LLC, W. P. Carey
International LLC and Edward V. LaPuma

Method of Filing
Filed herewith

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

Amended and Restated Advisory Agreement dated as
of October 1, 2009 between Corporate Property
Associates 14 Incorporated and Carey Asset
Management Corp.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009
filed November 6, 2009

Asset Management Agreement dated as of
September 2, 2008 between Corporate Property
Associates 14 Incorporated and W. P. Carey & Co.
B.V.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2008
filed November 7, 2008

Amended and Restated Advisory Agreement dated as
of October 1, 2009 between Corporate Property
Associates 15 Incorporated and Carey Asset
Management Corp.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009
filed November 6, 2009

Asset Management Agreement dated as of July 1, 2008
between Corporate Property Associates 15
Incorporated and W. P. Carey & Co. B.V.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2008 filed
August 8, 2008

Amended and Restated Advisory Agreement dated as
of October 1, 2009 between Corporate Property
Associates 16 – Global Incorporated and Carey Asset
Management Corp.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009
filed November 6, 2009

Asset Management Agreement dated as of July 1, 2008
between Corporate Property Associates 16 — Global
Incorporated and W. P. Carey & Co. B.V.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2008 filed
August 8, 2008

Amended and Restated Advisory Agreement dated as
of October 1, 2009 between Corporate Property
Associates 17 – Global Incorporated and Carey Asset
Management Corp.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009
filed November 6, 2009

Asset Management Agreement dated as of July 1, 2008
between Corporate Property Associates 17 — Global
Incorporated and W. P. Carey & Co. B.V.

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2008 filed
August 8, 2008

21.1

List of Registrant Subsidiaries.

Filed herewith

23.1

Consent of PricewaterhouseCoopers LLP.

Filed herewith

31.1

31.2

Certification pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.

Filed herewith

Certification pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.

Filed herewith

Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.

Filed herewith

99.1

Director and Officer Indemnification Policy

Incorporated by reference to Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 filed
August 6, 2009

The referenced exhibit is a management contract or compensation plan or arrangement described in Item 601(b)(10)(iii) of

SEC Regulation S-K.

W. P. Carey 2009 10-K — 93

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date 2/26/2010

W. P. Carey & Co. LLC

By: /s/ Mark J. DeCesaris
Mark J. DeCesaris
Managing Director and Acting Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/s/ Wm. Polk Carey
Wm. Polk Carey

/s/ Gordon F. DuGan
Gordon F. DuGan

/s/ Mark J. DeCesaris
Mark J. DeCesaris

Title

Chairman of the Board and Director

President, Chief Executive Officer and Director
(Principal Executive Officer)

Managing Director and Acting Chief Financial Officer
(Principal Financial Officer)

/s/ Thomas J. Ridings Jr.
Thomas J. Ridings Jr.

Executive Director and Chief Accounting Officer
(Principal Accounting Officer)

/s/ Francis J. Carey
Francis J. Carey

/s/ Trevor P. Bond
Trevor P. Bond

/s/ Nathaniel S. Coolidge
Nathaniel S. Coolidge

/s/ Eberhard Faber IV
Eberhard Faber IV

/s/ Benjamin H. Griswold IV
Benjamin H. Griswold IV

/s/ Dr. Lawrence R. Klein
Dr. Lawrence R. Klein

/s/ Dr. Karsten von Köller
Dr. Karsten von Köller

/s/ Robert E. Mittelstaedt Jr.
Robert E. Mittelstaedt

/s/ Charles E. Parente
Charles E. Parente

/s/ Reginald Winssinger
Reginald Winssinger

Director

Date

2/26/2010

W. P. Carey 2009 10-K — 94

SUBSIDIARIES OF REGISTRANT

Name of Subsidiary
(CA) Ads, LLC
(CA) CHC LP
24 HR TX (TX) Limited Partnership
24 HR-TX (MD) Business Trust
24 HR-TX GP (TX) QRS 12-66, Inc.
308 Route 38 LLC
308 Route 38, Inc.
50 Rock Partners
620 Eighth Lender NYT (NY) Limited Partnership
620 Eighth NYT (NY) Limited Partnership
ABI (TX) Limited Partnership
ABI GP (TX) LLC
AFD (MN) LLC
Amln Landlord LLC
ANTH WPC (CA) LLC
ANT-LM LLC
AW WPC (KY) LLC
AZO Driver (DE) LLC
AZO Mechanic (DE) LLC
AZO Navigator (DE) LLC
AZO Valet (DE) LLC
AZO-A L.P.
AZO-B L.P.
AZO-C L.P.
AZO-D L.P.
Bill CD LLC
Bone (DE) LLC
Bone Manager, Inc.
BRI (MN) LLC
Broomfield Properties Corp.
Build (CA) QRS 12-24, Inc.
Call LLC
Carey Asset Management Corp.
Carey Financial, LLC
Carey Management LLC
Carey Management Services, Inc.
Carey Norcross, L.L.C.
Carey REIT II, Inc.
Carey REIT, Inc.
Carey Storage ACES GP LLC
Carey Storage Asset Management LLC
Carey Storage I (CA) Rohnert LLC
Carey Storage I (FL) Bull Run LLC
Carey Storage I (GA) Ameristor LLC
Carey Storage I (GA) Store House LLC
Carey Storage I (MA) LLC
Carey Storage I (OH) Armor LLC
Carey Storage I (TX) Aces LLC
Carey Storage I (TX) Beltline LP
Carey Storage I (TX) Tarrant LP
Carey Storage Management LLC
Carey Storage Mezz I LLC
Carey Storage Opportunity Fund I LLC
Carey Storage Participation LLC
Carey Technology Properties II LLC
Carlog 1 SARL
Carlog 2 SARL
Carlog SCI
CCARE (Multi) Limited Partnership
CD Corp-5, Inc.
CD UP LP
CDC Paying Agent LLC

Exhibit 21.1

State or Country
of Incorporation
Delaware
Delaware
Delaware
Maryland
Delaware
Delaware
Delaware
New York
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Arizona
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Colorado
California
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Maryland
Maryland
Texas
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Texas
Texas
Delaware
Delaware
Delaware
Delaware
Delaware
France
France
France
Delaware
Delaware
Delaware
Delaware

Name of Subsidiary
Chkfree WPC Member (GA) LLC
Citrus Heights (CA) GP, LLC
Comquest West (AZ) 11-68, Inc.
Consys-9 (SC) LLC
Corporate Property Associates 4-A
California Limited Partnership
Corporate Property Associates 6-A
California Limited Partnership
Corporate Property Associates 9-A
Delaware Limited Partnership
Corporate Property Associates LP
CPA Burnhaven LP
CPA Paper, Inc.
Cross LLC
Denton (TX) Trust
DP WPC (TX) LLC
Drayton Plains (MI), LLC
Emerald Development Company, Inc.
Faur WPC (OH) LLC
Fifth Rock Limited Partnership
Fly CD, LLC
Food WPC (MI) LLC
Forge River (TX) LP
Forge River GP (TX) WPC, INC.
H2 Lender WPC LLC
Hibbett (AL) 11-41, Inc.
HLWG Two Lender SARL
Illkinvest SAS
Jamesinvest sprl
Keystone Capital Company, Inc.
Livho, Inc.
Map Invest 1 SARL
Map Invest 2 SARL
Map Invest SCI
Mapi Invest SPRL
Mapinvest Delaware LLC
Mauritius International I LLC
Olimpia Investments Sp. z o.o.
Paper Limited Liability Company
Phone (LA), LLC
Phone Managing Member, LLC
Pilbara Investments Limited
Polkinvest Sprl
QRS 10-18 (FL), LLC
QRS 11-12 (FL), LLC
QRS 11-14 (NC), LLC
QRS 11-41 (AL), LLC
Quest-US West (AZ) QRS 11-68, LLC
Randolph/Clinton Limited Partnership
Rush It LLC
Schobi (Ger-Pol) LLC
SPEC (CA) QRS 12-20, Inc.
Storage 1 (CT) LLC
Telegraph (MO) LLC
Telegraph Manager (MO) WPC, Inc.
Three Aircraft Seats (DE) LP
Three Cabin Seats (DE) LLC
Torrey Pines Limited Partnership
Torrey Pines, LLC
Tours Invest SAS
UP CD LLC
Venice (CA) LP
W. P. Carey & Co. B.V.
W. P. Carey Holdings, LLC
W. P. Carey & Co. Limited
W. P. Carey International LLC
Wals (IN) LLC
WPCI Holdings II LLC
WPCI Holdings LLC

State or Country
of Incorporation
Delaware
Delaware
Delaware
Delaware
California

California

Delaware

California
Delaware
Delaware
Georgia
Maryland
Delaware
Delaware
Delaware
Delaware
New York
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Luxembourg
France
Belgium
Washington
Delaware
France
France
France
Belgium
Delaware
Delaware
Poland
Delaware
Delaware
Delaware
Cyprus
Belgium
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
California
Delaware
Delaware
Delaware
Delaware
Delaware
California
Delaware
France
Delaware
Delaware
Netherlands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-160078, 333-160079,
333-90880, 333-64549 and 333-56121) and in the Registration Statement on Form S-3 (No. 333-158112) of W. P. Carey & Co.
LLC of our report dated February 26, 2010 relating to the financial statements, financial statement schedule, and the
effectiveness of internal control over financial reporting, which appears in this Form 10-K.

Exhibit 23.1

/s/ PricewaterhouseCoopers LLP
New York, New York
February 26, 2010

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gordon F. DuGan, certify that:

I have reviewed this Annual Report on Form 10-K of W. P. Carey & Co. LLC;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal controls over financial reporting.

Date 2/26/2010

/s/ Gordon F. DuGan
Gordon F. DuGan
President and Chief Executive Officer

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mark J. DeCesaris, certify that: