##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 or
 o
    
    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: 000-25771
 
 CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
  Maryland
(State or other jurisdiction of incorporation or organization)
    
    13-3951476
(I.R.S. Employer Identification No.)50 Rockefeller Plaza 
New York, New York
(Address of principal executive offices)
    
    10020
(Zip code)
 Investor Relations (212) 492-8920
(212) 492-1100
 None
 Common Stock, Par Value $0.001 Per Share
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 Page No.PART IItem 1. Business.
    
    2Item 1A. Risk Factors.
    
    11Item 1B. Unresolved Staff Comments.
    
    19Item 2. Properties.
    
    19Item 3. Legal Proceedings.
    
    19Item 4. Submission of Matters to a Vote of Security Holders.
    
    19PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
    
    20Item 6. Selected Financial Data.
    
    21Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    22Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
    
    39Item 8. Financial Statements and Supplementary Data.
    
    42Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
    
    77Item 9A(T). Controls and Procedures.
    
    77Item 9B. Other Information.
    
    77PART IIIItem 10. Directors, Executive Officers and Corporate Governance.
    
    78Item 11. Executive Compensation.
    
    78Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
    
    78Item 13. Certain Relationships and Related Transactions, and Director Independence.
    
    78Item 14. Principal Accountant Fees and Services.
    
    78PART IVItem 15. Exhibits, Financial Statement Schedules.
    
    78SIGNATURES.
    
    80EX-21.1: SUBSIDIARIESEX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION
  Forward-Looking Statements
   CPA®:14 2008 10-K  1




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##### Table of Contents



Item 1. Business.
 (a) General Development of Business
 Overview
   
    
    clauses providing for mandated rent increases or periodic rent increases over the term
of the lease tied to increases in the Consumer Price Index (CPI) or other similar indices
for the jurisdiction in which the property is located or, when appropriate, increases tied
to the volume of sales at the property;
    
    indemnification for environmental and other liabilities;
    
    operational or financial covenants of the tenant; and
    
    guarantees of lease obligations from parent companies or letters of credit.
  ® ® ® ®
   Significant Developments during 2008 include:
 Liquidity Event Update
 (b) Financial Information About Segments
  CPA®:14 2008 10-K  2




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(c) Narrative Description of Business
 Business Objectives and Strategy
   
    
    own a diversified portfolio of triple-net leased real estate;
    
    fund distributions to shareholders; and
    
    increase our equity in our real estate by making regular mortgage principal payments.
  ®
 Our Portfolio
  Geographic Diversification
  Consolidated Investments
    
    
    Equity Investments in Real Estate (b)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualRegion
    
    Revenue (a)
    
    
    Lease Revenue
    
    
    Revenue (a)
    
    
    Lease RevenueUnited StatesEast
    
    $
    41,438
    
    
    
    26
    %
    
    $
    4,071
    
    
    
    8
    %South
    
    
    36,122
    
    
    
    22
    
    
    
    10,879
    
    
    
    22Midwest
    
    
    33,201
    
    
    
    21
    
    
    
    8,266
    
    
    
    17West
    
    
    25,179
    
    
    
    16
    
    
    
    14,634
    
    
    
    29Total U.S.
    
    
    135,940
    
    
    
    85
    
    
    
    37,850
    
    
    
    76InternationalEurope (c)
    
    
    25,648
    
    
    
    15
    
    
    
    11,904
    
    
    
    24Total
    
    $
    161,588
    
    
    
    100
    %
    
    $
    49,754
    
    
    
    100
    %
 
 (a)
    
    Reflects annualized contractual minimum base rent for the fourth quarter of 2008.(b)
    
    Reflects our pro rata share of annualized contractual minimum base rent for the fourth
quarter of 2008 from equity investments in real estate.(c)
    
    Reflects investments in Finland, France, Germany, the United Kingdom, and the Netherlands. CPA ® :14 2008 10-K  3




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##### Table of Contents



Property Diversification
  Consolidated Investments
    
    
    Equity Investments in Real Estate (b)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualProperty Type
    
    Revenue (a)
    
    
    Lease Revenue
    
    
    Revenue (a)
    
    
    Lease RevenueIndustrial
    
    $
    51,082
    
    
    
    32
    %
    
    $
    14,044
    
    
    
    29
    %Warehouse/distribution
    
    
    46,936
    
    
    
    29
    
    
    
    8,544
    
    
    
    17Office
    
    
    34,389
    
    
    
    21
    
    
    
    6,535
    
    
    
    13Retail
    
    
    15,661
    
    
    
    10
    
    
    
    11,465
    
    
    
    23Other properties (c)
    
    
    13,520
    
    
    
    8
    
    
    
    9,166
    
    
    
    18Total
    
    $
    161,588
    
    
    
    100
    %
    
    $
    49,754
    
    
    
    100
    %
 
 (a)
    
    Reflects annualized contractual minimum base rent for the fourth quarter of 2008.(b)
    
    Reflects our pro rata share of annualized contractual minimum base rent for the fourth
quarter of 2008 from equity investments in real estate.(c)
    
    Includes educational facilities, movie theaters, sports/fitness facilities, storage/trucking
facilities and undeveloped land. Tenant Diversification
  Consolidated Investments
    
    
    Equity Investments in Real Estate (b)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualTenant Industry (c)
    
    Revenue (a)
    
    
    Lease Revenue
    
    
    Revenue (a)
    
    
    Lease RevenueRetail trade
    
    $
    40,018
    
    
    
    25
    %
    
    $
    14,794
    
    
    
    30
    %Electronics
    
    
    23,636
    
    
    
    15
    
    
    
    10,794
    
    
    
    22Automobile
    
    
    17,296
    
    
    
    11
    
    
    
    
    
    
    
    Transportation  cargo
    
    
    11,961
    
    
    
    7
    
    
    
    
    
    
    
    Construction and building
    
    
    11,721
    
    
    
    7
    
    
    
    6,560
    
    
    
    13Consumer non-durable goods
    
    
    8,647
    
    
    
    5
    
    
    
    
    
    
    
    Leisure, amusement, entertainment
    
    
    8,600
    
    
    
    5
    
    
    
    5,811
    
    
    
    12Beverages, food, and tobacco
    
    
    7,101
    
    
    
    4
    
    
    
    1,763
    
    
    
    4Chemicals, plastics, rubber, and glass
    
    
    6,933
    
    
    
    4
    
    
    
    
    
    
    
    Healthcare, education and childcare
    
    
    6,502
    
    
    
    4
    
    
    
    1,671
    
    
    
    3Machinery
    
    
    4,182
    
    
    
    3
    
    
    
    
    
    
    
    Business and commercial services
    
    
    3,883
    
    
    
    3
    
    
    
    2,415
    
    
    
    5Media: printing and publishing
    
    
    2,285
    
    
    
    2
    
    
    
    1,597
    
    
    
    3Buildings and real estate
    
    
    
    
    
    
    
    
    
    
    2,141
    
    
    
    4Transportation  personal
    
    
    
    
    
    
    
    
    
    
    1,153
    
    
    
    2Grocery
    
    
    
    
    
    
    
    
    
    
    1,055
    
    
    
    2Other (d)
    
    
    8,823
    
    
    
    5
    
    
    
    
    
    
    
    Total
    
    $
    161,588
    
    
    
    100
    %
    
    $
    49,754
    
    
    
    100
    %
 
 (a)
    
    Reflects annualized contractual minimum base rent for the fourth quarter of 2008.(b)
    
    Reflects our pro rata share of annualized contractual minimum base rent for the fourth
quarter of 2008 from equity investments in real estate.(c)
    
    Based on the Moodys classification system and information provided by the tenant.(d)
    
    Includes revenue from tenants in our consolidated investments in the following industries:
mining (1.5%); aerospace and defense (1.1%); consumer and durable goods (0.9%); forest
products and paper (0.9%); hotels and gaming (0.9%) and banking (0.2%). CPA ® :14 2008 10-K  4




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Lease Expirations
  Consolidated Investments
    
    
    Equity Investments in Real Estate (b)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualYear of Lease Expiration
    
    Revenue (a)
    
    
    Lease Revenue
    
    
    Revenue (a)
    
    
    Lease Revenue2009
    
    $
    3,372
    
    
    
    2
    %
    
    $
    
    
    
    
    
    %2010
    
    
    661
    
    
    
    
    
    
    
    
    
    
    
    2011
    
    
    20,646
    
    
    
    13
    
    
    
    
    
    
    
    2012
    
    
    284
    
    
    
    
    
    
    
    
    
    
    
    2013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2014
    
    
    1,828
    
    
    
    1
    
    
    
    1,153
    
    
    
    22015
    
    
    6,806
    
    
    
    4
    
    
    
    2,415
    
    
    
    52016
    
    
    14,240
    
    
    
    9
    
    
    
    1,763
    
    
    
    42017
    
    
    14,364
    
    
    
    9
    
    
    
    
    
    
    
    2018
    
    
    2,810
    
    
    
    2
    
    
    
    8,972
    
    
    
    182019-2023
    
    
    94,757
    
    
    
    58
    
    
    
    15,149
    
    
    
    302024-2028
    
    
    817
    
    
    
    1
    
    
    
    8,398
    
    
    
    172029 and thereafter
    
    
    1,003
    
    
    
    1
    
    
    
    11,904
    
    
    
    24Total
    
    $
    161,588
    
    
    
    100
    %
    
    $
    49,754
    
    
    
    100
    %
 
 (a)
    
    Reflects annualized contractual minimum base rent for the fourth quarter of 2008.(b)
    
    Reflects our pro rata share of annualized contractual minimum base rent for the fourth
quarter of 2008 from equity investments in real estate. Asset Management
   Holding Period
   CPA ® :14 2008 10-K  5




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® ® ® ®
 Financing Strategies
    2009
    
    $
    49,064
    (a)2010
    
    
    66,666
    (a)2011
    
    
    255,794
    (a)2012
    
    
    151,263
    (a)2013
    
    
    
    (a)
 
 (a)
    
    Excludes our pro rata share of mortgage obligations of equity investments in real estate
totaling $12.4 million in 2009, $4.2 million in 2010, $9.8 million in 2011, $33.9 million in
2012 and $32.4 million in 2013.  Investment Strategies
   CPA ® :14 2008 10-K  6




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Tenant/Borrower Evaluation
 Properties Important to Tenant/Borrower Operations
 Diversification
 Lease Terms
 Collateral Evaluation
 Transaction Provisions that Enhance and Protect Value
 CPA ® :14 2008 10-K  7




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Other Equity Enhancements
 Investment Decisions ® ® ® ® ® ®
  
    
    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.
    
    George E. Stoddard Former officer-in-charge of the direct
placement department of The Equitable Life Assurance Society of
the U.S. and our former chief investment officer.
    
    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.
Former chairman and member of the board of managing directors of
Eurohypo AG, Frankfurt am Main, Germany.
 Segments
  Competition
  CPA ® :14 2008 10-K  8




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Environmental Matters
     Transactions with Affiliates
 ® ®
 Types of Investments
  Ventures With Affiliates and Others ®
 Other Investments
 CPA ® :14 2008 10-K  9




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(d) Financial Information About Geographic Areas
  (e) Available Information
   CPA ® :14 2008 10-K  10




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Item 1A. Risk Factors.
   The current financial and economic crisis could adversely affect our business.
  Deterioration in the credit markets could adversely affect our ability to finance or refinance
investments and the ability of our tenants to meet their obligations which could affect our ability
to make distributions.
    We are subject to the risks of real estate ownership, which could reduce the value of our
properties.
  
    
    changes in the general economic climate;
    
    changes in local conditions such as an oversupply of space or reduction in demand for real estate;
    
    changes in interest rates and the availability of financing; and
    
    changes in laws and governmental regulations, including those governing real estate usage, zoning and taxes.
 We may have difficulty selling or re-leasing our properties.
  We may recognize substantial impairment charges on our properties.
  CPA ® :14 2008 10-K  11




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The inability of a tenant in a single tenant property to pay rent will reduce our revenues.
  The bankruptcy or insolvency of tenants or borrowers may cause a reduction in revenue.
  
    
    the loss of lease or interest payments;
    
    an increase in the costs incurred to carry the property;
    
    a reduction in the value of our shares; and
    
    a decrease in distributions to our shareholders.
    ® ®
   CPA ® :14 2008 10-K  12




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We do not fully control the management for our properties.
  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.
  Liability for uninsured losses could adversely affect our financial condition.
  Our success is dependent on the performance of the advisor.
 ®
 The advisor may be subject to conflicts of interest.
  
    
    the receipt of compensation by the advisor for property purchases, leases, sales and
financing for us, which may cause the advisor to engage in transactions that generate
higher fees, rather than transactions that are more appropriate or beneficial for our
business;
    
    agreements between us and the advisor, including agreements regarding compensation, will
not be negotiated on an arms-length basis as would occur if the agreements were with
unaffiliated third parties;
    
    acquisitions of single properties or portfolios of properties from affiliates, including
WPC or the CPA® REITs, subject to our investment policies and procedures, which
may take the form of a direct purchase of assets, a merger or another type of transaction;
    
    competition with certain affiliates for property acquisitions, which may cause the
advisor and its affiliates to direct properties suitable for us to other related entities;
 CPA ® :14 2008 10-K  13




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
    
    a decision by the advisor (on our behalf) of whether to hold or sell a property could
impact the timing and amount of fees payable to the advisor because it receives asset
management fees and may decide not to sell a property;
    
    disposition, incentive and termination fees, which are based on the sale price of
properties, may cause a conflict between the advisors desire to sell a property and our
plans to hold or sell the property.
 We have limited independence from the advisor.
  The termination or replacement of the advisor could trigger a default or repayment event under our
financing arrangements for some of our assets.
  WPC and Carey Financial, LLC (Carey Financial) have settled a previously disclosed SEC
investigation. If other actions are brought against WPC or Carey Financial, we could be adversely
affected.
 ® ®
  Our net asset value is based in part on information that the advisor provides to a third party.
  Appraisals that we obtain may include leases in place on the property being appraised, and if the
leases terminate, the value of the property may become significantly lower.
  We are not required to meet any diversification standards; therefore, our investments may become
subject to concentration of risk.
  CPA ® :14 2008 10-K  14




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Our use of debt to finance investments could adversely affect our cash flow and distributions to
shareholders.
   Failure to qualify as a REIT would adversely affect our operations and ability to make
distributions.
    Dividends payable by REITs generally do not qualify for reduced U.S. federal income tax rates
because qualifying REITs do not pay U.S. federal income tax on their net income.
  Our distributions may exceed our earnings.
  CPA ® :14 2008 10-K  15




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The ability of our board of directors to change our investment policies or revoke our REIT election
without shareholder approval may cause adverse consequences to our shareholders.
   Potential liability for environmental matters could adversely affect our financial condition.
  
    
    Responsibility and liability for the cost of investigation, removal or remediation of
hazardous or toxic substances released on or from our property, generally without regard to
our knowledge of, or responsibility for, the presence of these contaminants.
    
    Liability for claims by third parties based on damages to natural resources or property,
personal injuries, or costs of removal or remediation of hazardous or toxic substances in,
on, or migrating from our property.
    
    Responsibility for managing asbestos-containing building materials, and third-party
claims for exposure to those materials.
  International investments involve additional risks.
  
    
    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 U.S.;
    
    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;
 CPA ® :14 2008 10-K  16




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
    
    The difficulty in conforming obligations in other countries and the burden of complying
with a wide variety of foreign laws including tax requirements, land use, zoning laws, and
environmental laws;
    
    Adverse market conditions caused by changes in national or local economic or political conditions;
    
    Changes in relative interest rates;
    
    Changes in the availability, cost and terms of mortgage funds resulting from varying national economic policies; and
    
    Changes in real estate and other tax rates and other operating expenses in particular countries.
    The returns on our investments in net leased properties may not be as great as returns on equity
investments in real properties during strong real estate markets.
  A potential change in United States accounting standards regarding operating leases may make the
leasing of facilities less attractive to our potential domestic tenants, which could reduce overall
demand for our leasing services.
  CPA ® :14 2008 10-K  17




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Our net tangible book value may be adversely affected if we are required to adopt the fair value
accounting provisions of SOP 07-1.
   Your investment return may be reduced if we are required to register as an investment company under
the Investment Company Act.
  
    
    limitations on capital structure;
    
    restrictions on specified investments;
    
    prohibitions on transactions with affiliates; and
    
    compliance with reporting, record keeping, voting, proxy disclosure and other rules and
regulations that would significantly increase our operating expenses.
   There is not, and may never be, an active public trading market for our shares, so it will be difficult for
shareholders to sell shares quickly.
  CPA ® :14 2008 10-K  18




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Maryland law could restrict change in control.
  
    
    any person who beneficially owns 10% or more of the voting power of outstanding shares,
referred to as an interested shareholder;
    
    an affiliate who, at any time within the two-year period prior to the date in question,
was the beneficial owner of 10% or more of the voting power of our outstanding shares, also
referred to as an interested shareholder; or
    
    an affiliate of an interested shareholder.
   Shareholders equity may be diluted
  
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
   
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  CPA ® :14 2008 10-K  19




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Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
  Distributions
  2008
    
    
    2007First quarter
    
    $
    0.1954
    
    
    $
    0.1934Second quarter
    
    
    0.1959
    
    
    
    0.1939Third quarter
    
    
    0.1964
    
    
    
    0.1944Fourth quarter
    
    
    0.1971
    
    
    
    0.1949$
    0.7848
    
    
    $
    0.7766
 Unregistered Sales of Equity Securities
  Issuer Purchases of Equity Securities
 Maximum number (orTotal number of shares
    
    approximate dollar value)purchased as part of
    
    of shares that may yet beTotal number of
    
    Average price
    
    publicly announced
    
    purchased under the2008 Period
    
    shares purchased (a)
    
    paid per share
    
    plans or programs (a)
    
    plans or programs (a)October
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ANovember
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ADecember
    
    
    678,774
    
    
    $
    13.14
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    678,774
 
 (a)
    
    Represents shares of our common stock purchased pursuant to our redemption plan. In November
1997, we announced a redemption plan under which we may elect to redeem shares at the request
of our shareholders, subject to certain conditions and limitations. The maximum amount of
shares purchasable in any period depends on the availability of funds generated by our
dividend reinvestment and share purchase plan and other factors at the discretion of our board
of directors. The redemption plan will terminate if and when our shares are listed on a
national securities market. CPA ® :14 2008 10-K  20




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Item 6. Selected Financial Data.
   Years ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004Operating Data(a)Total revenues (b)
    
    $
    167,039
    
    
    $
    163,922
    
    
    $
    133,382
    
    
    $
    130,341
    
    
    $
    126,238Income from continuing operations
    
    
    44,286
    
    
    
    56,273
    
    
    
    57,428
    
    
    
    45,732
    
    
    
    37,379Earnings from continuing operations per share
    
    
    0.50
    
    
    
    0.65
    
    
    
    0.83
    
    
    
    0.67
    
    
    
    0.55Net income (c)
    
    
    45,164
    
    
    
    64,390
    
    
    
    69,618
    
    
    
    47,249
    
    
    
    38,940Earnings per share
    
    
    0.51
    
    
    
    0.73
    
    
    
    0.99
    
    
    
    0.69
    
    
    
    0.58Cash distributions paid
    
    
    68,851
    
    
    
    68,323
    
    
    
    83,633
    
    
    
    51,905
    
    
    
    50,973Cash distributions declared per share
    
    
    0.7848
    
    
    
    0.7766
    
    
    
    0.7711
    
    
    
    0.7646
    
    
    
    0.7592Payment of mortgage principal (d)
    
    
    17,383
    
    
    
    16,552
    
    
    
    12,580
    
    
    
    12,433
    
    
    
    11,046Balance Sheet DataTotal assets
    
    $
    1,637,430
    
    
    $
    1,715,148
    
    
    $
    1,675,323
    
    
    $
    1,295,036
    
    
    $
    1,346,355Long-term obligations (e)
    
    
    821,262
    
    
    
    861,902
    
    
    
    826,459
    
    
    
    679,522
    
    
    
    723,383
 
 (a)
    
    Certain prior year amounts have been reclassified from continuing operations to discontinued
operations.(b)
    
    Total revenues during 2008 and 2007 include lease revenue from properties acquired in the
Merger in December 2006.(c)
    
    Net income in 2008 includes impairment charges recognized on several properties totaling
$10.9 million ($9.8 million on equity investments and $1.1 million on consolidated
investments).(d)
    
    Represents scheduled mortgage principal paid, excluding balloon payments.(e)
    
    Represents mortgage and note obligations and deferred acquisition fee installments. CPA®:14 2008 10-K  21




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Executive Overview
 Business Overview
  Highlights
 Highlights during 2008
 
    
    During the first quarter of 2008, we asked our advisor to begin reviewing possible
liquidity alternatives for us. However, in light of evolving market conditions during the
year, the advisor recommended, and our board of directors agreed, that further
consideration of liquidity alternatives be postponed until market conditions become more
stable (see Current Developments and Trends below).
    
    In July 2008, we announced that, as a result of a valuation of our portfolio performed
by a third party as of April 30, 2008 at the request of our board of directors in
connection with its review of various liquidity alternatives, our estimated net asset value
was adjusted downward to $14.00 per share from $14.50 per share based on the December 31,
2007 valuation. Our estimated net asset value was further reduced to $13.00 per share in
connection with the December 31, 2008 annual valuation.
    
    Received $10.9 million from the advisor related to the advisors SEC Settlement.
    
    Incurred impairment charges on several properties totaling $10.9 million ($9.8 million
on equity investments and $1.1 million on consolidated investments).
    
    Obtained non-recourse mortgage financing on our consolidated investments totaling $9.7
million at a weighted average annual fixed interest rate and term of 6.1% and 8.7 years,
respectively. In addition, our share of refinancing obtained by a venture totaled $28.7
million with a three year term and bearing interest at a variable rate, subject to an
interest rate cap.
    
    Sold two properties for a total of $14.9 million, net of selling costs, and recognized
net gains on these sales totaling $0.5 million. In connection with these sales, we prepaid
an existing non-recourse mortgage loan of $6.5 million.
    
    Terminated our credit facility in May 2008.
    
    Our quarterly cash distribution increased to $0.1971 per share for the fourth quarter of
2008, which annualizes to $0.79 per share.
 Financial Highlights
 Years ended December 31,2008
    
    2007
    
    2006Total revenues (a)
    
    $
    167,039
    
    
    $
    163,922
    
    
    $
    133,382Net income (b)
    
    
    45,164
    
    
    
    64,390
    
    
    
    69,618Cash flow from operating activities (c)
    
    
    110,697
    
    
    
    89,730
    
    
    
    102,232
 
 (a)
    
    Total revenues during 2008 and 2007 include lease revenue from properties acquired in the
Merger in December 2006.(b)
    
    Net income in 2008 reflects impairment charges recognized on several properties totaling
$10.9 million ($9.8 million on equity investments and $1.1 million on consolidated
investments).(c)
    
    Cash flow from operating activities for 2008 included the receipt of $10.9 million related to
the advisors SEC Settlement.  CPA®:14 2008 10-K  22




---



##### Table of Contents



Current Developments and Trends
  ®
  Financing Conditions
   Commercial Real Estate
   CPA®:14 2008 10-K  23




---



##### Table of Contents



Corporate Defaults
     Redemptions
  Consumer Price Index (CPI)
  Exchange Rate Movements
  CPA®:14 2008 10-K  24




---



##### Table of Contents



How Management Evaluates Results of Operations
     Results of Operations
 ®
  2008
    
    
    2007
    
    
    2006Rental income
    
    $
    146,113
    
    
    $
    142,014
    
    
    $
    115,194Interest income from direct financing leases
    
    
    15,359
    
    
    
    16,472
    
    
    
    14,353$
    161,472
    
    
    $
    158,486
    
    
    $
    129,547
 CPA®:14 2008 10-K  25




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##### Table of Contents



Lessee
    
    2008
    
    
    2007
    
    
    2006Carrefour France, SAS (a) (b)
    
    $
    19,656
    
    
    $
    17,379
    
    
    $
    15,161Petsmart, Inc. (c)
    
    
    8,215
    
    
    
    8,303
    
    
    
    8,395Federal Express Corporation (c)
    
    
    6,967
    
    
    
    6,891
    
    
    
    6,816Nortel Networks Inc. (d)
    
    
    5,911
    
    
    
    6,165
    
    
    
    6,014Dicks Sporting Goods, Inc. (e)
    
    
    5,594
    
    
    
    5,409
    
    
    
    2,706Atrium Companies, Inc.
    
    
    5,170
    
    
    
    5,017
    
    
    
    4,922Perkin Elmer, Inc. (a) (f)
    
    
    4,802
    
    
    
    3,838
    
    
    
    3,430Katun Corporation (a)
    
    
    4,497
    
    
    
    4,400
    
    
    
    4,000Tower Automotive, Inc. (b) (g)
    
    
    4,493
    
    
    
    4,194
    
    
    
    4,218Caremark Rx, Inc.
    
    
    4,300
    
    
    
    4,300
    
    
    
    4,300Special Devices, Inc. (d) (g) (h)
    
    
    4,186
    
    
    
    4,029
    
    
    
    333Metaldyne Company LLC (g)
    
    
    3,899
    
    
    
    3,797
    
    
    
    3,673McLane Company Food Service Inc.
    
    
    3,706
    
    
    
    3,569
    
    
    
    3,662Amerix Corp.
    
    
    2,980
    
    
    
    2,928
    
    
    
    2,928Builders FirstSource, Inc. (c)
    
    
    2,692
    
    
    
    2,633
    
    
    
    2,598Gibson Guitar Corp. (c)
    
    
    2,658
    
    
    
    2,556
    
    
    
    2,460Gerber Scientific, Inc.
    
    
    2,591
    
    
    
    2,508
    
    
    
    2,445Waddington North America, Inc.
    
    
    2,536
    
    
    
    2,468
    
    
    
    2,331Collins & Aikman Corporation (g)
    
    
    2,488
    
    
    
    3,644
    
    
    
    3,594Institutional Jobbers Company
    
    
    2,270
    
    
    
    2,270
    
    
    
    2,270Other (a) (b) (c) (d) (e) (g)
    
    
    61,861
    
    
    
    62,188
    
    
    
    43,291$
    161,472
    
    
    $
    158,486
    
    
    $
    129,547
 
 (a)
    
    Revenue amounts are subject to fluctuations in foreign currency exchange rates.(b)
    
    Increase was due to CPI-based (or equivalent) rent increase.(c)
    
    Includes lease revenues applicable to minority interests totaling $7.2 million, $6.4 million
and $6.7 million for the years ended December 31, 2008, 2007 and 2006, respectively.(d)
    
    These tenants are currently operating under bankruptcy protection. Only Nortel Networks Inc.
has rejected its lease with us, however there is a subtenant in substantially all of the
building. Other includes lease revenue from Buffets, Inc., BLP UK Limited, and New Creative
Enterprises, Inc. totaling $5.3 million, $5.7 million and $5.5 million for 2008, 2007 and
2006, respectively.(e)
    
    Includes lease revenues from properties acquired in the Merger.(f)
    
    We acquired an additional property leased to this tenant in December 2007.(g)
    
    Tenant operates in the automotive industry. Tower Automotive and Collins & Aikman both
emerged from Chapter 11 bankruptcy protection in 2007. Amounts for Collins & Aikman include
lease revenues totaling $1.2 million and $1.3 million for the years ended December 31, 2007
and 2006, respectively from two properties that we sold in December 2007. Other includes
lease revenues from Meridian Automotive Systems, Inc., which emerged from bankruptcy
protection in 2006, totaling $1.3 million for the years ended December 31, 2008, 2007 and
2006.(h)
    
    We acquired the remaining interest in this property in the Merger and now consolidate the
entity that holds the assets. We previously accounted for this entity under the equity method
of accounting. CPA®:14 2008 10-K  26




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##### Table of Contents



OwnershipInterest at
    
    
    Years ended December 31,Lessee
    
    December 31, 2008
    
    
    2008
    
    
    2007
    
    
    2006Hellweg Die Profi-Baumarkte GmbH & Co. KG (a)
    
    
    32
    %
    
    $
    37,132
    
    
    $
    25,536
    
    
    $
    U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    
    
    12
    %
    
    
    28,541
    
    
    
    28,541
    
    
    
    28,541True Value Company
    
    
    50
    %
    
    
    14,698
    
    
    
    14,171
    
    
    
    14,471Advanced Micro Devices, Inc.
    
    
    67
    %
    
    
    11,175
    
    
    
    10,451
    
    
    
    10,451Life Time Fitness, Inc. (b) (c)
    
    
    56
    %
    
    
    9,272
    
    
    
    9,216
    
    
    
    2,622Compucom Systems, Inc.
    
    
    67
    %
    
    
    4,902
    
    
    
    4,549
    
    
    
    4,549CheckFree Holdings, Inc.
    
    
    50
    %
    
    
    4,830
    
    
    
    4,711
    
    
    
    4,604Best Buy Co., Inc. (b)
    
    
    37
    %
    
    
    4,421
    
    
    
    4,484
    
    
    
    375Sicor, Inc.(b)
    
    
    50
    %
    
    
    3,343
    
    
    
    3,343
    
    
    
    279Del Monte Corporation (b)
    
    
    50
    %
    
    
    3,241
    
    
    
    2,955
    
    
    
    245The Upper Deck Company (b)
    
    
    50
    %
    
    
    3,194
    
    
    
    3,194
    
    
    
    265Dicks Sporting Goods, Inc. (d)
    
    
    45
    %
    
    
    3,142
    
    
    
    3,030
    
    
    
    1,349ShopRite Supermarkets, Inc. (b)
    
    
    45
    %
    
    
    2,461
    
    
    
    2,442
    
    
    
    204Town Sports International Holdings, Inc. (b) (c)
    
    
    56
    %
    
    
    1,086
    
    
    
    1,086
    
    
    
    505Starmark Camhood, L.L.C. (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,338Special Devices, Inc. (e)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,952$
    131,438
    
    
    $
    117,709
    
    
    $
    78,750
 
 (a)
    
    We acquired our interest in this investment during 2007. In addition to lease revenues, the
venture also earned interest income of $28.1 million and $19.5 million on a note receivable
during 2008 and 2007, respectively. Amounts are subject to fluctuations in foreign currency
exchange rates.(b)
    
    Interest or additional interest in this equity investment in real estate was acquired in the
Merger.(c)
    
    Lease with Starmark Camhood was restructured in 2006, at which time we entered into new
leases with Life Time Fitness and Town Sports International.(d)
    
    Expansion at this property completed in January 2007. Prior to the completion of
construction, 100% of the lease revenues and net income of this investment were attributed to
us.(e)
    
    Property was consolidated effective December 1, 2006 following acquisition of the remaining
interest in the property in the Merger. Lease Revenues
  2008 vs. 2007
 2007 vs. 2006
 CPA®:14 2008 10-K  27




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##### Table of Contents



Depreciation and Amortization
 2008 vs. 2007
 2007 vs. 2006
 Property Expense
 2008 vs. 2007
 2007 vs. 2006
 General and Administrative
 2008 vs. 2007 ®
 2007 vs. 2006
 Impairment Charges
 2008
 2007
 Advisor Settlement
  Income from Equity Investments in Real Estate
  CPA®:14 2008 10-K  28




---



##### Table of Contents



2008 vs. 2007
  2007
 Gain on Exchange or Sale of Real Estate, Net
 2007
 Gain on Foreign Currency Transactions, Derivative Instruments and Other, Net
  2008
 2007
 2006
 CPA®:14 2008 10-K  29




---



##### Table of Contents



Interest Expense
  2007 vs. 2006
 Discontinued Operations
 2007
 2006
 Net Income
 2008 vs. 2007
 2007 vs. 2006
 Financial Condition
 Sources and Uses of Cash during the Year
   Operating Activities
 Investing Activities
 CPA®:14 2008 10-K  30




---



##### Table of Contents



Financing Activities
    CPA®:14 2008 10-K  31




---



##### Table of Contents



Summary of Financing
  December 31,2008
    
    
    2007BalanceFixed rate
    
    $
    691,263
    
    
    $
    724,766Variable rate (a)
    
    
    119,531
    
    
    
    122,821Total
    
    $
    810,794
    
    
    $
    847,587Percent of total debtFixed rate
    
    
    85
    %
    
    
    86
    %Variable rate (a)
    
    
    15
    %
    
    
    14
    %100
    %
    
    
    100
    %Weighted average interest rate at end of yearFixed rate
    
    
    7.4
    %
    
    
    7.3
    %Variable rate (a)
    
    
    6.2
    %
    
    
    6.4
    %
 
 (a)
    
    Variable rate debt at December 31, 2008 included (i) $18.8 million that has been effectively
converted to fixed rate debt through interest rate swap derivative instruments and (ii) $95.8
million in mortgage obligations that bore interest at fixed rates but that convert to variable
rates during their term. No interest rate resets or expirations of interest rate swaps are
scheduled to occur in 2009. Cash Resources
   Cash Requirements
  CPA®:14 2008 10-K  32




---



##### Table of Contents



Off-Balance Sheet Arrangements and Contractual Obligations
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsNon-recourse debt  Principal
    
    $
    810,794
    
    
    $
    67,163
    
    
    $
    355,781
    
    
    $
    170,669
    
    
    $
    217,181Deferred acquisition fees  Principal
    
    
    10,468
    
    
    
    3,638
    
    
    
    4,391
    
    
    
    1,298
    
    
    
    1,141Interest on borrowings and deferred acquisition fees (a)
    
    
    225,930
    
    
    
    57,631
    
    
    
    87,759
    
    
    
    32,081
    
    
    
    48,459Subordinated disposition fees (b)
    
    
    5,050
    
    
    
    
    
    
    
    5,050
    
    
    
    
    
    
    
    Operating and other lease commitments (c)
    
    
    4,424
    
    
    
    534
    
    
    
    1,106
    
    
    
    1,161
    
    
    
    1,623$
    1,056,666
    
    
    $
    128,966
    
    
    $
    454,087
    
    
    $
    205,209
    
    
    $
    268,404
 
 (a)
    
    Interest on variable rate debt obligations was calculated using the applicable variable
interest rates and balances outstanding as of December 31, 2008.(b)
    
    Payable to the advisor, subject to meeting contingencies, in connection with any liquidity
event. In the first quarter of 2008, we asked our advisor to begin reviewing possible
liquidity alternatives for us; however, due to deteriorating market conditions during the
year, the advisor recommended, and our board of directors agreed, that further consideration
of a liquidity event be postponed until market conditions become more stable. As a result, we
are unable to predict when a liquidity event will occur.(c)
    
    Operating and other lease commitments consist primarily of rent obligations under ground
leases and our share of future minimum rents payable under an office cost-sharing agreement
with certain affiliates for the purpose of leasing office space used for the administration of
real estate entities. Amounts under the cost-sharing agreement are allocated among the
entities based on gross revenues and are adjusted quarterly. The table above excludes the
rental obligations under ground leases of two ventures in which we own a combined interest of
32%. These obligations total approximately $34.7 million over the lease terms, which extend
through 2091. We account for these ventures under the equity method of accounting.   OwnershipInterest at
    
    
    
    
    
    
    Total ThirdLessee
    
    December 31, 2008
    
    
    Total Assets
    
    
    Party Debt
    
    
    Maturity DateCompucom Systems, Inc.
    
    
    67
    %
    
    $
    31,062
    
    
    $
    18,738
    
    
    
    4/2009ShopRite Supermarkets, Inc.
    
    
    45
    %
    
    
    16,292
    
    
    
    9,768
    
    
    
    7/2010The Upper Deck Company
    
    
    50
    %
    
    
    26,107
    
    
    
    10,942
    
    
    
    2/2011Del Monte Corporation
    
    
    50
    %
    
    
    15,080
    
    
    
    10,665
    
    
    
    8/2011Advanced Micro Devices, Inc.
    
    
    67
    %
    
    
    89,630
    
    
    
    43,000
    
    
    
    1/2012Best Buy Co., Inc.
    
    
    37
    %
    
    
    41,796
    
    
    
    25,250
    
    
    
    2/2012True Value Company
    
    
    50
    %
    
    
    133,162
    
    
    
    70,446
    
    
    
    1/2013 & 2/2013U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    12
    %
    
    
    300,105
    
    
    
    168,202
    
    
    
    5/2014Checkfree Holdings, Inc.
    
    
    50
    %
    
    
    34,373
    
    
    
    29,840
    
    
    
    6/2016Life Time Fitness, Inc. and Town Sports International Holdings, Inc.
    
    
    56
    %
    
    
    117,212
    
    
    
    84,944
    
    
    
    12/2016 & 5/2017Hellweg Die Profi-Baumarkte GmbH & Co. KG (a)
    
    
    32
    %
    
    
    503,030
    
    
    
    399,840
    
    
    
    4/2017Sicor, Inc.
    
    
    50
    %
    
    
    17,027
    
    
    
    35,350
    
    
    
    7/2017Dicks Sporting Goods, Inc.
    
    
    45
    %
    
    
    28,541
    
    
    
    22,489
    
    
    
    1/2022$
    1,353,417
    
    
    $
    929,474
 CPA®:14 2008 10-K  33




---



##### Table of Contents



(a)
    
    Ownership interest represents our combined interest in two ventures. Dollar amounts shown are
based on the exchange rate of the Euro as of December 31, 2008. Total assets excludes a note
receivable from an unaffiliated third party. Total third party debt excludes related minority
interest that is redeemable by the unaffiliated third party. The note receivable and minority
interest have a carrying value as of December 31, 2008 of $331.8 million and $377 million,
respectively. In connection with one of these ventures, we have certain purchase options
that, if exercised, would obligate the partners in the venture to pay an exercise price of
approximately $2.4 million, of which our share is approximately $0.8 million (Note 7).  Critical Accounting Estimates
  Classification of Real Estate Assets
  Identification of Tangible and Intangible Assets in Connection with Real Estate Acquisitions
   CPA®:14 2008 10-K  34




---



##### Table of Contents



Basis of Consolidation
    Impairments
  CPA®:14 2008 10-K  35




---



##### Table of Contents



Provision for Uncollected Amounts from Lessees
  CPA®:14 2008 10-K  36




---



##### Table of Contents



Fair Value of Derivative Instruments and Marketable Securities
   Income Taxes
    Adoption of New Accounting Pronouncements
 SFAS 155
  SFAS 157
  CPA®:14 2008 10-K  37




---



##### Table of Contents



SFAS 159
  Recent Accounting Pronouncements
 SFAS 141R
  SFAS 160
  SFAS 161
  FSP 142-3
  CPA®:14 2008 10-K  38




---



##### Table of Contents



EITF 03-6-1
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Market Risks
   Interest Rate Risk
      ®
 CPA®:14 2008 10-K  39




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##### Table of Contents



2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    Total
    
    Fair valueFixed rate debt
    
    $
    62,110
    
    
    $
    79,706
    
    
    $
    265,100
    
    
    $
    155,609
    
    
    $
    3,313
    
    
    $
    125,425
    
    
    $
    691,263
    
    
    $
    674,033Variable rate debt
    
    $
    5,053
    
    
    $
    5,366
    
    
    $
    5,609
    
    
    $
    5,642
    
    
    $
    6,105
    
    
    $
    91,756
    
    
    $
    119,531
    
    
    $
    117,304
  Foreign Currency Exchange Rate Risk
    Lease Revenues (a)
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    TotalEuro
    
    $
    23,896
    
    
    $
    23,896
    
    
    $
    11,151
    
    
    $
    6,022
    
    
    $
    6,022
    
    
    $
    5,899
    
    
    $
    76,886British pound sterling
    
    
    1,003
    
    
    
    1,133
    
    
    
    1,096
    
    
    
    1,095
    
    
    
    1,238
    
    
    
    1,197
    
    
    
    6,762$
    24,899
    
    
    $
    25,029
    
    
    $
    12,247
    
    
    $
    7,117
    
    
    $
    7,260
    
    
    $
    7,096
    
    
    $
    83,648
 CPA®:14 2008 10-K  40




---



##### Table of Contents



Debt Service (a) (b)
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    TotalEuro
    
    $
    14,681
    
    
    $
    15,083
    
    
    $
    14,893
    
    
    $
    14,615
    
    
    $
    14,610
    
    
    $
    232,531
    
    
    $
    306,413British pound sterling
    
    
    415
    
    
    
    415
    
    
    
    416
    
    
    
    418
    
    
    
    418
    
    
    
    9,409
    
    
    
    11,491$
    15,096
    
    
    $
    15,498
    
    
    $
    15,309
    
    
    $
    15,033
    
    
    $
    15,028
    
    
    $
    241,940
    
    
    $
    317,904
 
 (a)
    
    Based on the applicable exchange rate as of December 31, 2008. Contractual rents and debt
obligations are denominated in the functional currency of the country of each property.(b)
    
    Interest on variable rate debt obligations was calculated using the applicable annual
interest rates and balances outstanding as of December 31, 2008.  Other
  CPA®:14 2008 10-K  41




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data.
  Report of Independent Registered Public Accounting Firm
    
    
    43Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    44Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006
    
    
    45Consolidated Statements of Comprehensive Income for the years ended December 31, 2008, 2007 and 2006
    
    
    46Consolidated Statements of Shareholders Equity for the years ended December 31, 2008, 2007 and 2006
    
    
    47Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006
    
    
    48Notes to Consolidated Financial Statements
    
    
    50Schedule III  Real Estate and Accumulated Depreciation as of December 31, 2008
    
    
    73Notes to Schedule III
  CPA ® :14 2008 10-K  42




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   
 CPA ® :14 2008 10-K  43




---



##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED BALANCE SHEETS  (in thousands, except share and per share amounts)
 December 31,2008
    
    
    2007AssetsReal estate, net
    
    $
    1,087,036
    
    
    $
    1,139,131Net investment in direct financing leases
    
    
    124,731
    
    
    
    128,058Equity investments in real estate
    
    
    156,344
    
    
    
    166,125Cash and cash equivalents
    
    
    125,746
    
    
    
    122,503Intangible assets, net
    
    
    72,877
    
    
    
    79,353Other assets, net
    
    
    70,696
    
    
    
    79,978Total assets
    
    $
    1,637,430
    
    
    $
    1,715,148Liabilities and Shareholders EquityLiabilities:Non-recourse debt
    
    $
    810,794
    
    
    $
    847,587Accounts payable, accrued expenses and other liabilities
    
    
    19,149
    
    
    
    15,515Prepaid and deferred rental income and security deposits
    
    
    25,650
    
    
    
    27,898Due to affiliates
    
    
    21,322
    
    
    
    26,039Distributions payable
    
    
    17,315
    
    
    
    17,116Total liabilities
    
    
    894,230
    
    
    
    934,155Minority interest in consolidated entities
    
    
    16,548
    
    
    
    18,033Commitments and contingencies (Note 13)Shareholders equity:Common stock, $0.001 par value; 120,000,000 shares authorized; 93,654,012 and 92,112,004
shares issued, respectively
    
    
    94
    
    
    
    92Additional paid-in capital
    
    
    916,069
    
    
    
    894,773Distributions in excess of accumulated earnings
    
    
    (127,093
    )
    
    
    (103,207
    )Accumulated other comprehensive income
    
    
    4,427
    
    
    
    18,074793,497
    
    
    
    809,732Less, treasury stock at cost, 5,804,003 and 4,293,933 shares, respectively
    
    
    (66,845
    )
    
    
    (46,772
    )Total shareholders equity
    
    
    726,652
    
    
    
    762,960Total liabilities and shareholders equity
    
    $
    1,637,430
    
    
    $
    1,715,148
  CPA ® :14 2008 10-K  44




---



##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME  (in thousands, except share and per share amounts)
 Years ended December 31,2008
    
    
    2007
    
    
    2006RevenuesRental income
    
    $
    146,113
    
    
    $
    142,014
    
    
    $
    115,194Interest income from direct financing leases
    
    
    15,359
    
    
    
    16,472
    
    
    
    14,353Other operating income
    
    
    5,567
    
    
    
    5,436
    
    
    
    3,835167,039
    
    
    
    163,922
    
    
    
    133,382Operating ExpensesDepreciation and amortization
    
    
    (32,809
    )
    
    
    (33,365
    )
    
    
    (27,463
    )Property expense
    
    
    (33,044
    )
    
    
    (30,503
    )
    
    
    (22,898
    )General and administrative
    
    
    (8,282
    )
    
    
    (7,957
    )
    
    
    (6,681
    )Impairment charges
    
    
    (1,139
    )
    
    
    (345
    )
    
    
    (75,274
    )
    
    
    (72,170
    )
    
    
    (57,042
    )Other Income and ExpensesAdvisor settlement (Note 14)
    
    
    10,868
    
    
    
    
    
    
    
    Income from equity investments in real estate
    
    
    637
    
    
    
    17,089
    
    
    
    27,410Other interest income
    
    
    4,123
    
    
    
    3,950
    
    
    
    3,103Minority interest in income
    
    
    (2,037
    )
    
    
    (1,564
    )
    
    
    (1,956
    )Gain on exchange or sale of real estate, net
    
    
    538
    
    
    
    9,509
    
    
    
    Gain on foreign currency transactions, derivative instruments and other, net
    
    
    3,309
    
    
    
    1,470
    
    
    
    3,274Interest expense
    
    
    (62,676
    )
    
    
    (63,985
    )
    
    
    (50,676
    )(45,238
    )
    
    
    (33,531
    )
    
    
    (18,845
    )Income from continuing operations before income taxes
    
    
    46,527
    
    
    
    58,221
    
    
    
    57,495Provision for income taxes
    
    
    (2,241
    )
    
    
    (1,948
    )
    
    
    (67
    )Income from continuing operations
    
    
    44,286
    
    
    
    56,273
    
    
    
    57,428Discontinued OperationsIncome (loss) from operations of discontinued properties
    
    
    354
    
    
    
    337
    
    
    
    (992
    )Gain on sale of real estate, net
    
    
    524
    
    
    
    7,780
    
    
    
    13,182Income from discontinued operations
    
    
    878
    
    
    
    8,117
    
    
    
    12,190Net Income
    
    $
    45,164
    
    
    $
    64,390
    
    
    $
    69,618Earnings Per ShareIncome from continuing operations
    
    $
    0.50
    
    
    $
    0.65
    
    
    $
    0.83Income from discontinued operations
    
    
    0.01
    
    
    
    0.08
    
    
    
    0.16Net income
    
    $
    0.51
    
    
    $
    0.73
    
    
    $
    0.99Weighted Average Shares Outstanding
    
    
    88,174,907
    
    
    
    87,860,052
    
    
    
    70,421,426
  CPA®:14 2008 10-K  45




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##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (in thousands)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Net Income
    
    $
    45,164
    
    
    $
    64,390
    
    
    $
    69,618Other Comprehensive (Loss) IncomeForeign currency translation adjustment
    
    
    (9,006
    )
    
    
    5,888
    
    
    
    4,269Change in unrealized (loss) gain on marketable securities
    
    
    (2,385
    )
    
    
    385
    
    
    
    452Change in unrealized loss on derivative instruments
    
    
    (2,256
    )
    
    
    
    
    
    
    (13,647
    )
    
    
    6,273
    
    
    
    4,721Comprehensive Income
    
    $
    31,517
    
    
    $
    70,663
    
    
    $
    74,339
  CPA®:14 2008 10-K  46




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##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
For the years ended December 31, 2008, 2007 and 2006  (in thousands, except share and per share amounts)
 Distributions
    
    
    AccumulatedAdditional
    
    
    in Excess of
    
    
    OtherCommon
    
    
    Paid-In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    TreasuryShares
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    TotalBalance at January 1, 2006
    
    
    68,280,126
    
    
    $
    70
    
    
    $
    636,009
    
    
    $
    (81,166
    )
    
    $
    7,080
    
    
    $
    (20,029
    )
    
    $
    541,964Shares issued $.001 par, at $11.85 -
$12.40 per share, net of offering costs
    
    
    1,023,137
    
    
    
    1
    
    
    
    10,768
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,769Shares issued in connection with the
CPA®:12 merger, $.001 par, at $11.85
per share
    
    
    18,470,351
    
    
    
    18
    
    
    
    218,856
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    218,874Shares, $.001 par, issued to the
advisor at $12.40 per share
    
    
    712,409
    
    
    
    1
    
    
    
    8,737
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,738Distributions declared ($0.7711 per share) (a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87,857
    )
    
    
    
    
    
    
    
    
    
    
    (87,857
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,618
    
    
    
    
    
    
    
    
    
    
    
    69,618Change in other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,721
    
    
    
    
    
    
    
    4,721Repurchase of shares
    
    
    (833,318
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,187
    )
    
    
    (9,187
    )Balance at December 31, 2006
    
    
    87,652,705
    
    
    
    90
    
    
    
    874,370
    
    
    
    (99,405
    )
    
    
    11,801
    
    
    
    (29,216
    )
    
    
    757,640Cumulative effect adjustment
from adoption of FIN 48 (Note 16)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80
    )
    
    
    
    
    
    
    
    
    
    
    (80
    )Balance at January 1, 2007
    
    
    87,652,705
    
    
    
    90
    
    
    
    874,370
    
    
    
    (99,485
    )
    
    
    11,801
    
    
    
    (29,216
    )
    
    
    757,560Shares issued $.001 par, at $13.20 per
share, net of offering costs
    
    
    745,265
    
    
    
    1
    
    
    
    9,156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,157Shares, $.001 par, issued to the
advisor at $13.20 per share
    
    
    852,132
    
    
    
    1
    
    
    
    11,247
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,248Distributions declared ($0.7766 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (68,112
    )
    
    
    
    
    
    
    
    
    
    
    (68,112
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,390
    
    
    
    
    
    
    
    
    
    
    
    64,390Change in other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,273
    
    
    
    
    
    
    
    6,273Repurchase of shares
    
    
    (1,432,031
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,556
    )
    
    
    (17,556
    )Balance at December 31, 2007
    
    
    87,818,071
    
    
    
    92
    
    
    
    894,773
    
    
    
    (103,207
    )
    
    
    18,074
    
    
    
    (46,772
    )
    
    
    762,960Shares issued $.001 par, at $14.00 -
$14.50 per share, net of offering costs
    
    
    691,750
    
    
    
    1
    
    
    
    9,147
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,148Shares, $.001 par, issued to the
advisor at $14.00 - $14.50 per share
    
    
    850,258
    
    
    
    1
    
    
    
    12,149
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,150Distributions declared ($0.7848 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (69,050
    )
    
    
    
    
    
    
    
    
    
    
    (69,050
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,164
    
    
    
    
    
    
    
    
    
    
    
    45,164Change in other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,647
    )
    
    
    
    
    
    
    (13,647
    )Repurchase of shares
    
    
    (1,510,070
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,073
    )
    
    
    (20,073
    )Balance at December 31, 2008
    
    
    87,850,009
    
    
    $
    94
    
    
    $
    916,069
    
    
    $
    (127,093
    )
    
    $
    4,427
    
    
    $
    (66,845
    )
    
    $
    726,652
 
 (a)
    
    Excludes special distributions totaling $0.49 per share declared in 2006 (Note 15).  CPA®:14 2008 10-K  47




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##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS  (in thousands)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Cash Flows  Operating ActivitiesNet income
    
    $
    45,164
    
    
    $
    64,390
    
    
    $
    69,618Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization, including intangible assets and deferred financing costs
    
    
    37,792
    
    
    
    40,139
    
    
    
    29,366Straight-line rent adjustments
    
    
    (1,225
    )
    
    
    (2,289
    )
    
    
    (2,344
    )Income from equity investments in real estate in excess of distributions received
    
    
    12,447
    
    
    
    598
    
    
    
    8,989Minority interest in income
    
    
    2,037
    
    
    
    1,564
    
    
    
    1,956Issuance of shares to affiliate in satisfaction of fees due
    
    
    12,150
    
    
    
    11,346
    
    
    
    8,741Impairment charges
    
    
    1,139
    
    
    
    345
    
    
    
    Realized gain on foreign currency transactions, net
    
    
    (3,435
    )
    
    
    (2,018
    )
    
    
    (417
    )Unrealized loss (gain) on foreign currency transactions, net
    
    
    5
    
    
    
    289
    
    
    
    (513
    )Realized (gain) loss on sale of securities
    
    
    (708
    )
    
    
    (1,648
    )
    
    
    158Reversal of unrealized gain (loss) on warrants and derivatives
    
    
    708
    
    
    
    2,207
    
    
    
    (229
    )Unrealized loss (gain) on warrants and derivatives, net
    
    
    351
    
    
    
    (312
    )
    
    
    (2,273
    )Gain from sale or exchange of real estate
    
    
    (1,062
    )
    
    
    (17,289
    )
    
    
    (13,182
    )Change in other operating assets and liabilities, net
    
    
    5,334
    
    
    
    (7,592
    )
    
    
    2,362Net cash provided by operating activities
    
    
    110,697
    
    
    
    89,730
    
    
    
    102,232Cash Flows  Investing ActivitiesEquity distributions received in excess of equity income in real estate
    
    
    7,921
    
    
    
    57,150
    
    
    
    81,788Acquisitions of real estate and equity investments in real estate and other capitalized costs (a)
    
    
    
    
    
    
    (32,664
    )
    
    
    (1,085
    )Proceeds from sale of real estate
    
    
    15,057
    
    
    
    49,220
    
    
    
    37,628Exercise of common stock warrants
    
    
    
    
    
    
    (999
    )
    
    
    Proceeds from sale of securities
    
    
    708
    
    
    
    3,160
    
    
    
    2,986Cash payments to shareholders of acquired company
    
    
    
    
    
    
    
    
    
    
    (102,176
    )Cash overdraft assumed in acquisition of CPA®:12s business operations (b)
    
    
    
    
    
    
    
    
    
    
    (3,950
    )Capital contributions to equity investments in real estate
    
    
    (11,928
    )
    
    
    
    
    
    
    (45,481
    )Funds placed in restricted account for future investment
    
    
    
    
    
    
    
    
    
    
    (21,741
    )Funds released from restricted account
    
    
    
    
    
    
    617
    
    
    
    21,741Payment of deferred acquisition fees to an affiliate
    
    
    (3,846
    )
    
    
    (4,369
    )
    
    
    (3,514
    )Net cash provided by (used in) investing activities
    
    
    7,912
    
    
    
    72,115
    
    
    
    (33,804
    )Cash Flows  Financing ActivitiesDistributions paid
    
    
    (68,851
    )
    
    
    (68,323
    )
    
    
    (83,633
    )Distributions paid to minority interest partner
    
    
    (3,522
    )
    
    
    (2,996
    )
    
    
    (3,869
    )Proceeds from mortgages and credit facility
    
    
    9,740
    
    
    
    171,657
    
    
    
    40,000Prepayment of mortgage principal and credit facility
    
    
    (20,510
    )
    
    
    (134,074
    )
    
    
    (27,167
    )Scheduled payments of mortgage principal
    
    
    (17,383
    )
    
    
    (16,552
    )
    
    
    (12,580
    )Proceeds from loan from affiliate
    
    
    
    
    
    
    
    
    
    
    24,000Prepayment of loan from affiliate
    
    
    
    
    
    
    
    
    
    
    (24,000
    )Deferred financing costs and mortgage deposits
    
    
    (576
    )
    
    
    (768
    )
    
    
    (1,731
    )Proceeds from stock issuance, net of costs
    
    
    9,148
    
    
    
    9,059
    
    
    
    10,766Purchase of treasury stock
    
    
    (20,073
    )
    
    
    (17,556
    )
    
    
    (9,187
    )Net cash used in financing activities
    
    
    (112,027
    )
    
    
    (59,553
    )
    
    
    (87,401
    )Change in Cash and Cash Equivalents During the YearEffect of exchange rate changes on cash
    
    
    (3,339
    )
    
    
    1,221
    
    
    
    93Net increase (decrease) in cash and cash equivalents
    
    
    3,243
    
    
    
    103,513
    
    
    
    (18,880
    )Cash and cash equivalents, beginning of year
    
    
    122,503
    
    
    
    18,991
    
    
    
    37,871Cash and cash equivalents, end of year
    
    $
    125,746
    
    
    $
    122,504
    
    
    $
    18,991
  CPA®:14 2008 10-K  48




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##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
 Non-cash activities
 (a)
    
    Included in the cost basis of real estate and equity investments acquired in 2007 are
deferred acquisition fees payable to W. P. Carey & Co., LLC of $3 million. No such fees were
incurred in 2008 or 2006.
 (b)
    
    The merger with Corporate Property Associates 12 Incorporated (CPA®:12), an
affiliate, as described in Note 3, consisted of the acquisition and assumption of certain
assets and liabilities, respectively, at fair value in exchange for the issuance of shares, a
cash payment to CPA®:12 shareholders who elected to redeem their shares and certain
costs, as follows (in thousands):
 Real estate accounted for under the operating method
    
    $
    214,858Net investment in direct financing leases
    
    
    19,799Intangible assets
    
    
    93,019Equity investments
    
    
    111,977Investment in mortgage loan securitization
    
    
    7,346Other assets
    
    
    4,415Non-recourse debt (cost $110,041)
    
    
    (116,082
    )Redemption of CPA®:12 shareholders
    
    
    (102,176
    )Other liabilities (1)
    
    
    (13,966
    )Elimination of minority interest
    
    
    3,634Issuance of common stock
    
    
    (218,874
    )Cash overdraft assumed in acquisition of CPA®:12s business operations
    
    $
    (3,950
    )
 
 (1)
    
    Includes deferred fees of $2.7 million payable to the advisor (Note 4). ® ®
 Supplemental cash flow information
    CPA®:14 2008 10-K  49




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Business and Organization
   ®
 Note 2. Summary of Significant Accounting Policies
 Basis of Consolidation
     CPA®:14 2008 10-K  50




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##### Table of Contents



Notes to Consolidated Financial Statements
  Out-of-Period Adjustments
   Use of Estimates
  Reclassifications and Revisions
  Purchase Price Allocation
    CPA®:14 2008 10-K  51




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##### Table of Contents



Notes to Consolidated Financial Statements
   Cash and Cash Equivalents
  Marketable Securities
  Other Assets and Other Liabilities
  Deferred Acquisition Fees Payable to Affiliate
  Treasury Stock
  Real Estate Leased to Others
   CPA®:14 2008 10-K  52




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##### Table of Contents



Notes to Consolidated Financial Statements
  Operating leases
 Direct financing method
  Depreciation
  Impairments
     CPA®:14 2008 10-K  53




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##### Table of Contents



Notes to Consolidated Financial Statements
 Assets Held for Sale
    Foreign Currency Translation
    Derivative Instruments
  CPA®:14 2008 10-K  54




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##### Table of Contents



Notes to Consolidated Financial Statements
  Income Taxes
    Earnings Per Share
  Adoption of New Accounting Pronouncements
 SFAS 155
  SFAS 157
  CPA®:14 2008 10-K  55




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##### Table of Contents



Notes to Consolidated Financial Statements
   Fair Value Measurements at Reporting Date Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    December 31, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Marketable securities
    
    $
    13,968
    
    
    $
    181
    
    
    $
    
    
    
    $
    13,787Derivative assets
    
    
    1,601
    
    
    
    
    
    
    
    
    
    
    
    1,601$
    15,569
    
    
    $
    181
    
    
    $
    
    
    
    $
    15,388Liabilities:Derivative liabilities
    
    $
    2,256
    
    
    $
    
    
    
    $
    2,256
    
    
    $
    
  Fair Value Measurements Using SignificantUnobservable Inputs (Level 3 Only)Marketable
    
    
    DerivativeSecurities
    
    
    Assets
    
    
    Total AssetsBalance at January 1, 2008
    
    $
    16,408
    
    
    $
    2,564
    
    
    $
    18,972Total gains or losses (realized and unrealized):Included in earnings
    
    
    (96
    )
    
    
    (255
    )
    
    
    (351
    )Included in other comprehensive income
    
    
    (2,208
    )
    
    
    
    
    
    
    (2,208
    )Amortization and accretion
    
    
    (317
    )
    
    
    
    
    
    
    (317
    )Purchases, issuances, and settlements
    
    
    
    
    
    
    (708
    )
    
    
    (708
    )Balance at December 31, 2008
    
    $
    13,787
    
    
    $
    1,601
    
    
    $
    15,388The amount of total gains or losses for the period included in earnings attributable to
the change in unrealized gains or losses relating to assets still held at the reporting
date
    
    $
    (96
    )
    
    $
    (963
    )
    
    $
    (1,059
    )
   CPA®:14 2008 10-K  56




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##### Table of Contents



Notes to Consolidated Financial Statements
 SFAS 159
  Recent Accounting Pronouncements
 SFAS 141R
  SFAS 160
  SFAS 161
  FSP 142-3
  EITF 03-6-1
  CPA®:14 2008 10-K  57




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##### Table of Contents



Notes to Consolidated Financial Statements
  Note 3. Business Combination with Corporate Property Associates 12 Incorporated
 ® ® ® ® ® ® ® ®
 ® ® ® ®
 ® ® ®
  ® ®
 Note 4. Agreements and Transactions with Related Parties
 1
 CPA®:14 2008 10-K  58




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##### Table of Contents



Notes to Consolidated Financial Statements
  ®
      CPA®:14 2008 10-K  59




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##### Table of Contents



Notes to Consolidated Financial Statements
  Note 5. Real Estate
  December 31,2008
    
    
    2007Land
    
    $
    231,325
    
    
    $
    236,546Buildings (a)
    
    
    1,044,450
    
    
    
    1,064,959Less: Accumulated depreciation
    
    
    (188,739
    )
    
    
    (162,374
    )$
    1,087,036
    
    
    $
    1,139,131
 
 (a)
    
    During 2008, we incurred an impairment charge of $1 million on a domestic property to reduce
the propertys carrying value to its estimated fair value.   Year ending December 31,2009
    
    $
    146,9442010
    
    
    144,0472011
    
    
    130,1342012
    
    
    125,3612013
    
    
    125,670Thereafter through 2024
    
    
    755,926
  Note 6. Net Investment in Direct Financing Leases
  December 31,2008
    
    
    2007Minimum lease payments receivable
    
    $
    199,384
    
    
    $
    219,468Unguaranteed residual value
    
    
    120,009
    
    
    
    123,675319,393
    
    
    
    343,143Less: unearned income
    
    
    (194,662
    )
    
    
    (215,085
    )$
    124,731
    
    
    $
    128,058
 CPA®:14 2008 10-K  60




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##### Table of Contents



Notes to Consolidated Financial Statements
    Year ending December 31,2009
    
    $
    15,0372010
    
    
    15,2382011
    
    
    15,3012012
    
    
    15,3012013
    
    
    15,443Thereafter through 2031
    
    
    123,064
  Note 7. Equity Investments in Real Estate
   CPA®:14 2008 10-K  61




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##### Table of Contents



Notes to Consolidated Financial Statements
  OwnershipInterest at
    
    
    Carrying Value at December 31,Lessee
    
    December 31, 2008
    
    
    2008
    
    
    2007True Value Company
    
    
    50
    %
    
    $
    31,916
    
    
    $
    32,164Advanced Micro Devices, Inc. (a)
    
    
    67
    %
    
    
    29,579
    
    
    
    18,533Hellweg Die Profi-Baumarkte GmbH & Co. KG (b)
    
    
    32
    %
    
    
    19,399
    
    
    
    23,852U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    12
    %
    
    
    12,992
    
    
    
    13,028Best Buy Co., Inc. (c)
    
    
    37
    %
    
    
    12,469
    
    
    
    22,559The Upper Deck Company (c)
    
    
    50
    %
    
    
    11,673
    
    
    
    13,430Starmark Holdings LLC, Life Time Fitness, Inc. and Town Sports
International Holdings, Inc. (d)
    
    
    56
    %
    
    
    10,898
    
    
    
    11,615Compucom Systems, Inc.
    
    
    67
    %
    
    
    10,958
    
    
    
    11,788Del Monte Corporation (c)
    
    
    50
    %
    
    
    8,135
    
    
    
    8,832ShopRite Supermarkets, Inc.
    
    
    45
    %
    
    
    6,696
    
    
    
    6,824Checkfree Holdings, Inc.
    
    
    50
    %
    
    
    1,653
    
    
    
    2,053Sicor, Inc. (e)
    
    
    50
    %
    
    
    493
    
    
    
    2,005Dicks
Sporting Goods, Inc. (f)
    
    
    45
    %
    
    
    (517
    )
    
    
    (558
    )$
    156,344
    
    
    $
    166,125
 
 (a)
    
    In connection with a mortgage refinancing in 2008, we contributed $11.9 million to this
venture to pay off an existing non-recourse mortgage loan.(b)
    
    We acquired two related investments in 2007 that are accounted for under the equity method of
accounting as we do not have a controlling interest but exercise significant influence. The
remaining ownership of these entities is held by our advisor and certain of our affiliates.
The primary purpose of these investments was to ultimately acquire an interest in the
underlying properties and as such was structured to effectively transfer the economics of
ownership to the CPA® REITs while still monetizing the sales value by transferring
the legal ownership in the underlying properties over time. In April 2007, we acquired an
interest in a venture (the property venture) that in turn acquired a 24.7% ownership
interest in a limited partnership owning 37 properties throughout Germany. Concurrently, we
also acquired an interest in a second venture (the lending venture) that made a loan (the
note receivable) to the holder of the remaining 75.3% interests in the limited partnership
(the partner). Under the terms of the note receivable, the lending venture will receive
interest that approximates 75% of all income earned by the limited partnership, less
adjustments. Our total effective ownership interest in the ventures is 32%. The total cost of
the interests in these ventures, which are owned with affiliates, is $446.4 million. In
connection with these transactions, the ventures obtained combined non-recourse financing of
$378.6 million, having a fixed annual interest rate of 5.5% and a term of 10 years. All dollar
amounts are based upon the exchange rate of the Euro at the date of acquisition.In connection with the acquisition, the property venture agreed to an option agreement that
gives the property venture the right to purchase, from the partner, an additional 75% interest
in the limited partnership no later than December 2010 at a price equal to the principal amount
of the note receivable at the time of purchase. Upon exercise of this purchase option, the
property venture would own 99.7% of the limited partnership. The property venture has also
agreed to a second assignable option agreement to acquire the remaining 0.3% interest in the
limited partnership by December 2012. If the property venture does not exercise its option
agreements, the partner has option agreements to put its remaining interests in the limited
partnership to the property venture during 2014 at a price equal to the principal amount of the
note receivable at the time of purchase.Upon exercise of the purchase option or the put, in order to avoid circular transfers of cash,
the seller and the lending venture and the property venture agreed that the lending venture or
the seller may elect upon exercise of the respective purchase option or put option to have the
loan from the lending venture to the seller repaid by a deemed transfer of cash in amounts
necessary to fully satisfy the sellers obligations to the lending venture and the lending
venture shall be deemed to have transferred such funds up to the CPA® REITs as if
they had recontributed them down into the property venture based on their pro rata ownership.
Accordingly, at December 31, 2008 (based on the exchange rate of the Euro), the only additional
cash required by us to fund the exercise of the purchase option or the put would be the pro rata
amounts necessary to redeem the advisors interest  the aggregate of which would be
approximately $2.4 million with our share approximating $0.8 million. In addition, our maximum
exposure to loss on these CPA®:14 2008 10-K  62




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##### Table of Contents



Notes to Consolidated Financial Statements
 ventures was approximately $20.2 million (inclusive of both our existing investment and the
amount to fund our future commitment).(c)
    
    We recognized impairment charges totaling $9.8 million during the fourth quarter of 2008 to
reduce three ventures carrying value to their estimated fair value ($8.6 million  Best Buy
Co., Inc; $1.1 million  The Upper Deck Company; $0.1 million  Del Monte Corporation).(d)
    
    Together with an affiliate, we own an interest in a venture that owned fifteen properties
formerly leased to Starmark Holdings LLC (Starmark) under a master lease agreement. We owned
a 41% interest in this venture and acquired an additional 15% interest in the venture in the
Merger, and account for this investment under the equity method of accounting. Our interest in
this investment accounted for $1.6 million, $7.3 million and $(7.8) million of income (loss)
from equity investments in real estate for the years ended December 31, 2008, 2007 and 2006,
respectively. The loss in 2006 reflects the recognition of impairment charges and prepayment
penalties and debt defeasance costs as described below.In June 2006, the advisor entered into a lease restructuring agreement with Starmark under which
six properties under the master lease agreement were re-leased to Life Time Fitness, Inc., a new
tenant unaffiliated with Starmark. Life Time agreed to provide a total of $20 million of
improvements to these six properties, comprised of a rent abatement to Life Time of $2.3
million, security deposits and prepaid rent released by Starmark totaling $7.7 million and a
commitment by Life Time to fund $10 million of improvements in exchange for the transfer to Life
Time of four properties formerly leased to Starmark. The $10 million commitment by Life Time is
secured by letters of credit totaling $10 million. The venture transferred title of these four
properties to Life Time and the venture has no continuing involvement in the transferred
properties. No gain or loss was recorded on the transfer of the four properties as the venture
had previously written down the four transferred properties to their estimated fair values, as
described below. The $20 million of improvements are for the benefit of the venture and will be
retained by the venture upon expiration of the lease. An additional property was re-leased to
Town Sports International Holdings, Inc., a second new tenant unaffiliated with Starmark, on
terms similar to the original lease with Starmark. In December 2006, upon entering into new
leases for the ventures four remaining properties, the venture terminated the agreement with
Starmark and recognized lease termination income of $8.1 million, comprised of security deposits
and prepaid rent from Starmark totaling $7.7 million and the release of real estate tax escrows
of $0.4 million. During the fourth quarter of 2007, the venture sold these four properties for
$41.4 million, net of selling costs and recognized a gain on the sale of $12.3 million.In connection with these transactions, the venture recognized impairment charges on this
investment during 2006 totaling $25 million, comprised of a charge of $18.7 million to write off
intangible assets on properties leased to Starmark and an impairment charge of $6.3 million to
reduce the carrying value of the four transferred properties to their estimated fair values.In April 2006, the venture prepaid/defeased the existing debt of $100.9 million and incurred
prepayment penalties and debt defeasance costs totaling $10.1 million. In November 2006, the
venture obtained new non-recourse mortgage financing of $80 million on the Life Time properties
at a fixed annual interest rate of 5.8% with a 10-year term. In April 2007, the venture obtained
new non-recourse mortgage financing of $8 million on the Town Sports property at a fixed annual
interest rate of 5.6% and with a 10-year term.Our share of the effects of the ventures transactions is reflected as part of income from
equity investments in our statements of income in the periods described.(e)
    
    Decrease is primarily due to amortization of differences between the fair value of the
investment at the date of acquisition of the venture and the carrying value of its net assets
at that date.(f)
    
    In January 2007, this venture obtained non-recourse mortgage financing of $23 million and
distributed the proceeds to the venture partners. Although we are not obligated to do so,
based on the fair value of the property we expect to fund any deficits this venture may incur. CPA®:14 2008 10-K  63




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##### Table of Contents



Notes to Consolidated Financial Statements
  December 31,2008
    
    
    2007Assets
    
    
    
    
    
    $
    1,685,258
    
    
    $
    1,803,515Liabilities
    
    
    
    
    
    
    (1,007,937
    )
    
    
    (1,113,645
    )Partners and members equity
    
    
    
    
    
    $
    677,321
    
    
    $
    689,870Years ended December 31,2008
    
    
    2007
    
    
    2006(a)Revenue
    
    $
    157,208
    
    
    $
    144,038
    
    
    $
    105,543Expenses
    
    
    (92,713
    )
    
    
    (80,333
    )
    
    
    (70,576
    )Gain on sale of real estate (b)
    
    
    
    
    
    
    12,253
    
    
    
    74,069Impairment charge (c)
    
    
    
    
    
    
    
    
    
    
    (24,978
    )Net income
    
    $
    64,495
    
    
    $
    75,958
    
    
    $
    84,058Our share of net income from equity investments in real estate (d)
    
    $
    637
    
    
    $
    17,089
    
    
    $
    27,410
 
 (a)
    
    Results for equity investees are presented for the period during which we accounted for the
investee under the equity method of accounting (that is, December 1, 2006 through December 31,
2006 for investments acquired during the Merger and January 1, 2006 through November 30, 2006
for the two investments that we consolidated following our acquisition of the remaining
interests in the Merger). Results for investments we owned as of January 1, 2006, including
those in which we acquired an additional interest in the Merger, are presented for the full
year.(b)
    
    Gain on sale of real estate in 2007 reflects gain on the sale of certain properties formerly
leased to Starmark as described above.In June 2006, a venture in which we and an affiliate held 40% and 60% interests, respectively,
sold a property in New York for $200 million, net of closing costs, and recognized a gain on the
sale of $41.1 million, net of a $10.3 million writeoff of unrecoverable receivables related to
future stated rent increases. In connection with the sale, the venture repaid the existing
non-recourse mortgage obligation of $81.2 million and incurred a charge for prepayment penalties
and related costs totaling $3 million.In October 2006, a venture through which we and an affiliate held 49.99% and 50.01% interests,
respectively, in a property in California, sold the property for $56.4 million, net of closing
costs, and recognized a gain on the sale of $14.4 million. The venture also recognized a gain of
$18.6 million on the sale of additional properties in which we had no ownership interest. In
connection with the sale, the venture repaid the existing non-recourse mortgage obligation of
$19.7 million and incurred a charge for prepayment penalties and related costs totaling $1.8
million.(c)
    
    Impairment charge in 2006 reflects impairment charges and the writeoff of intangible assets
incurred in connection with the Starmark transaction as described above.(d)
    
    Inclusive of (i) amortization of differences between the fair value of investments acquired
in the Merger and the carrying value of the ventures net assets as of the date of the Merger
and (ii) impairment charges as described above. CPA ® :14 2008 10-K  64




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##### Table of Contents



Notes to Consolidated Financial Statements
 Note 8. Intangibles
 ®
 December 31,2008
    
    
    2007Lease intangiblesIn-place lease
    
    $
    33,420
    
    
    $
    33,448Tenant relationship
    
    
    10,217
    
    
    
    10,224Above-market rent
    
    
    42,333
    
    
    
    42,398Less: accumulated amortization
    
    
    (13,093
    )
    
    
    (6,717
    )$
    72,877
    
    
    $
    79,353Below-market rent
    
    $
    (5,365
    )
    
    $
    (5,365
    )Less: accumulated amortization
    
    
    286
    
    
    
    149$
    (5,079
    )
    
    $
    (5,216
    )
   Note 9. Interest in Mortgage Loan Securitization
 ®
  Fair value as of
    
    1% adverse
    
    2% adverseDecember 31, 2008
    
    change
    
    changeFair value of our interest in CCMT
    
    $
    11,375
    
    
    $
    11,062
    
    
    $
    10,760
  Note 10. Disclosures About Fair Value of Financial Instruments
  CPA ® :14 2008 10-K  65




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##### Table of Contents



Notes to Consolidated Financial Statements
  Note 11. Risk Management and Use of Financial Instruments
 Risk Management
  Use of Derivative Financial Instruments
  Interest Rate Swaps
      Embedded Credit Derivative
  CPA ® :14 2008 10-K  66




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##### Table of Contents



Notes to Consolidated Financial Statements
 Stock Warrants
   Foreign Currency Exchange
  Concentration of Credit Risk
     CPA ® :14 2008 10-K  67




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##### Table of Contents



Notes to Consolidated Financial Statements
 Note 12. Debt
   Years ending December 31,
    
    Total Debt2009
    
    $
    67,1632010
    
    
    85,0722011
    
    
    270,7092012
    
    
    161,2512013
    
    
    9,418Thereafter through 2023
    
    
    217,181Total
    
    $
    810,794
 Credit Facility
  Note 13. Commitments and Contingencies
  State Securities Matters
 ®
 Note 14. Advisor Settlement of SEC Investigation
 ® ®
 ® ® ®
 ® ®
 CPA ® :14 2008 10-K  68




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##### Table of Contents



Notes to Consolidated Financial Statements
 ®
  Note 15. Shareholders Equity
 Distributions
  2008
    
    
    2007
    
    
    2006Ordinary income
    
    $
    0.69
    
    
    $
    0.43
    
    
    $
    0.31Capital gains
    
    
    0.07
    
    
    
    0.25
    
    
    
    0.440.76
    
    
    
    0.68
    
    
    
    0.75Spillover distribution (a)
    
    
    0.02
    
    
    
    0.10
    
    
    
    0.02$
    0.78
    
    
    $
    0.78
    
    
    $
    0.77
 
 (a)
    
    For 2008, this portion of the distribution is not taxable to shareholders until 2009;
therefore, its taxability and classification will be determined in 2008. For 2007 and 2006,
this portion of the distribution was paid and taxed to shareholders in 2008 and 2007 as
ordinary income ($0.06 and $0.01) and long term capital gain ($0.04 and $0.01).   Accumulated Other Comprehensive Income
  2008
    
    
    2007Unrealized (loss) gain on marketable securities
    
    $
    (1,229
    )
    
    $
    1,156Unrealized loss on derivative instruments
    
    
    (2,256
    )
    
    
    Foreign currency translation adjustment
    
    
    7,912
    
    
    
    16,918Accumulated other comprehensive income
    
    $
    4,427
    
    
    $
    18,074
 Note 16. Income Taxes
  CPA ® :14 2008 10-K  69




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##### Table of Contents



Notes to Consolidated Financial Statements
    2008
    
    
    2007Balance at January 1,
    
    $
    106
    
    
    $
    75Additions based on tax positions related to the current year
    
    
    15
    
    
    
    21Additions for tax positions of prior years
    
    
    
    
    
    
    80Reductions for tax positions of prior years
    
    
    
    
    
    
    (70
    )Settlements
    
    
    
    
    
    
    Reductions for expiration of statute of limitations
    
    
    (11
    )
    
    
    Balance at December 31,
    
    $
    110
    
    
    $
    106
   Note 17. Discontinued Operations
  2008
 2007
 2006
 CPA ® :14 2008 10-K  70




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##### Table of Contents



Notes to Consolidated Financial Statements
  Years ended December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    1,358
    
    
    $
    3,874
    
    
    $
    2,814Expenses
    
    
    (1,004
    )
    
    
    (3,537
    )
    
    
    (3,806
    )Gain on sale of real estate, net
    
    
    524
    
    
    
    7,780
    
    
    
    13,182Income from discontinued operations
    
    $
    878
    
    
    $
    8,117
    
    
    $
    12,190
 Note 18. Segment Information
   2008
    
    Domestic
    
    Foreign (a)
    
    Total CompanyRevenues
    
    $
    136,058
    
    
    $
    30,981
    
    
    $
    167,039Total long-lived assets (b)
    
    
    1,144,992
    
    
    
    223,119
    
    
    
    1,368,111
 2007
    
    Domestic
    
    Foreign (a)
    
    Total CompanyRevenues
    
    $
    137,336
    
    
    $
    26,586
    
    
    $
    163,922Total long-lived assets (b)
    
    
    1,189,988
    
    
    
    243,326
    
    
    
    1,433,314
 2006
    
    Domestic
    
    Foreign (a)
    
    Total CompanyRevenues
    
    $
    109,912
    
    
    $
    23,470
    
    
    $
    133,382Total long-lived assets (b)
    
    
    1,300,717
    
    
    
    191,098
    
    
    
    1,491,815
 
 (a)
    
    Consists of operations in the United Kingdom, France, Finland and the Netherlands and, in
2008 and 2007, in Germany.(b)
    
    Consists of real estate, net; net investment in direct financing leases and equity
investments in real estate. Note 19. Selected Quarterly Financial Data (unaudited)
  Three months endedMarch 31, 2008
    
    June 30, 2008
    
    September 30, 2008
    
    December 31, 2008Revenues (a)
    
    $
    41,571
    
    
    $
    41,933
    
    
    $
    40,395
    
    
    $
    43,140Operating expenses (a)
    
    
    (18,708
    )
    
    
    (19,347
    )
    
    
    (17,343
    )
    
    
    (19,876
    )Net income (b)
    
    
    22,187
    
    
    
    10,224
    
    
    
    9,613
    
    
    
    3,140Earnings per share
    
    
    0.25
    
    
    
    0.12
    
    
    
    0.11
    
    
    
    0.03Distributions declared per share
    
    
    0.1954
    
    
    
    0.1959
    
    
    
    0.1964
    
    
    
    0.1971Three months endedMarch 31, 2007
    
    June 30, 2007
    
    September 30, 2007
    
    December 31, 2007Revenues (a)
    
    $
    39,357
    
    
    $
    40,460
    
    
    $
    41,909
    
    
    $
    42,196Operating expenses (a)
    
    
    (17,232
    )
    
    
    (18,572
    )
    
    
    (19,312
    )
    
    
    (17,054
    )Net income (c) (d)
    
    
    8,741
    
    
    
    8,758
    
    
    
    15,510
    
    
    
    31,381Earnings per share
    
    
    0.10
    
    
    
    0.10
    
    
    
    0.18
    
    
    
    0.35Distributions declared per share
    
    
    0.1934
    
    
    
    0.1939
    
    
    
    0.1944
    
    
    
    0.1949
 
 (a)
    
    Certain amounts from previous quarters have been retrospectively adjusted as discontinued
operations (Note 17). CPA ® :14 2008 10-K  71




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##### Table of Contents



Notes to Consolidated Financial Statements
 (b)
    
    Net income for the fourth quarter of 2008 included impairment charges totaling $9.8 million
to reduce three ventures carrying value to their estimated fair value(c)
    
    Includes impact of out-of-period adjustment in the periods ended March 31, 2007 and September
30, 2007 (Note 2).(d)
    
    Net income for the fourth quarter of 2007 includes gains on the sale of real estate of $9.5
million and $7.8 million, which are included in Income from continuing operations and Income
from discontinued operations, respectively. CPA ® :14 2008 10-K  72




---



##### Table of Contents



SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION   (in thousands)
 Life on whichDepreciation inCosts Capitalized
    
    Increase
    
    Gross Amount at which Carried
    
    
    
    
    
    
    
    
    
    Latest Statement ofInitial Cost to Company
    
    Subsequent to
    
    (Decrease) in Net
    
    at Close of Period
    
    Accumulated
    
    Date
    
    Income isDescription
    
    Encumbrances
    
    Land
    
    Buildings
    
    Acquisition (a)
    
    Investments (b)
    
    Land
    
    Buildings
    
    Total
    
    Depreciation (e)
    
    Acquired
    
    ComputedReal Estate Under Operating Leases:Retail store in Torrance, California
    
    $
    28,317
    
    
    $
    13,060
    
    
    $
    6,934
    
    
    $
    153
    
    
    $
    
    
    
    $
    13,060
    
    
    $
    7,087
    
    
    $
    20,147
    
    
    $
    1,831
    
    
    Jul. 1998
    
    40 yrs.Industrial facility in San Clemente, California
    
    
    
    
    
    
    2,390
    
    
    
    
    
    
    
    8,958
    
    
    
    53
    
    
    
    2,390
    
    
    
    9,011
    
    
    
    11,401
    
    
    
    2,079
    
    
    Jul. 1998
    
    40 yrs.Industrial facility in Pittsburgh, Pennsylvania
    
    
    5,920
    
    
    
    620
    
    
    
    6,186
    
    
    
    
    
    
    
    
    
    
    
    620
    
    
    
    6,186
    
    
    
    6,806
    
    
    
    1,553
    
    
    Dec. 1998
    
    40 yrs.Industrial and warehouse facilities in Burbank, California and Las
Vegas, Nevada
    
    
    6,573
    
    
    
    3,860
    
    
    
    8,263
    
    
    
    
    
    
    
    2
    
    
    
    3,860
    
    
    
    8,265
    
    
    
    12,125
    
    
    
    1,993
    
    
    Mar. 1999, Oct. 1999
    
    40 yrs.Warehouse and distribution facilities in Harrisburg, North Carolina; Atlanta, Georgia; Cincinnati, Ohio and Elkwood, Virginia
    
    
    12,478
    
    
    
    3,930
    
    
    
    10,398
    
    
    
    8,476
    
    
    
    10
    
    
    
    3,946
    
    
    
    18,868
    
    
    
    22,814
    
    
    
    3,718
    
    
    Jun. 1999, Dec. 2001
    
    40 yrs.Industrial facility in Gardena, California
    
    
    2,683
    
    
    
    2,340
    
    
    
    3,943
    
    
    
    
    
    
    
    (2,899
    )
    
    
    2,340
    
    
    
    1,044
    
    
    
    3,384
    
    
    
    132
    
    
    Jul. 1999
    
    40 yrs.Warehouse and distribution facilities in Burlington, New Jersey;
Shawnee, Kansas and Manassas, Virginia (c)
    
    
    20,036
    
    
    
    3,604
    
    
    
    8,613
    
    
    
    23,709
    
    
    
    
    
    
    
    4,476
    
    
    
    31,450
    
    
    
    35,926
    
    
    
    7,074
    
    
    Aug. 1999
    
    40 yrs.Warehouse and distribution facility in Grand Rapids, Michigan
    
    
    5,481
    
    
    
    740
    
    
    
    3,043
    
    
    
    7,638
    
    
    
    
    
    
    
    740
    
    
    
    10,681
    
    
    
    11,421
    
    
    
    2,495
    
    
    Aug. 1999
    
    40 yrs.Land in Midlothian, Virginia
    
    
    2,469
    
    
    
    3,515
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,515
    
    
    
    
    
    
    
    3,515
    
    
    
    
    
    
    Sep. 1999
    
    
    N/AOffice facility in Columbia, Maryland
    
    
    12,616
    
    
    
    2,623
    
    
    
    20,233
    
    
    
    3,113
    
    
    
    
    
    
    
    2,623
    
    
    
    23,346
    
    
    
    25,969
    
    
    
    5,198
    
    
    Nov. 1999
    
    40 yrs.Industrial facilities in Welcome, North Carolina, Murrysville,
Pennsylvania and Wylie, Texas
    
    
    12,940
    
    
    
    1,596
    
    
    
    23,910
    
    
    
    875
    
    
    
    (214
    )
    
    
    2,059
    
    
    
    24,108
    
    
    
    26,167
    
    
    
    4,499
    
    
    Nov. 1999, Dec. 2001
    
    40 yrs.Sports facilities in Salt Lake City, Utah and St. Charles, Missouri
    
    
    6,478
    
    
    
    2,920
    
    
    
    8,660
    
    
    
    836
    
    
    
    
    
    
    
    2,920
    
    
    
    9,496
    
    
    
    12,416
    
    
    
    1,954
    
    
    Dec. 1999, Dec. 2000
    
    40 yrs.Warehouse and distribution facility in Tempe, Arizona
    
    
    3,082
    
    
    
    940
    
    
    
    4,557
    
    
    
    13
    
    
    
    
    
    
    
    940
    
    
    
    4,570
    
    
    
    5,510
    
    
    
    1,004
    
    
    Jan. 2000
    
    40 yrs.Warehouse and distribution facility in Rock Island, Illinois
    
    
    6,645
    
    
    
    500
    
    
    
    9,945
    
    
    
    1,887
    
    
    
    
    
    
    
    500
    
    
    
    11,832
    
    
    
    12,332
    
    
    
    2,392
    
    
    Feb. 2000
    
    40 yrs.Industrial facility in North Amityville, New York
    
    
    9,751
    
    
    
    2,932
    
    
    
    16,398
    
    
    
    18
    
    
    
    (4,120
    )
    
    
    1,482
    
    
    
    13,746
    
    
    
    15,228
    
    
    
    3,050
    
    
    Feb. 2000
    
    40 yrs.Warehouse and distribution facilities in Monon, Indiana; Champlin,
Minnesota; Robbinsville, New Jersey; Radford, Virginia and North
Salt Lake City, Utah
    
    
    15,315
    
    
    
    4,580
    
    
    
    24,844
    
    
    
    15
    
    
    
    
    
    
    
    4,580
    
    
    
    24,859
    
    
    
    29,439
    
    
    
    5,360
    
    
    May. 2000
    
    40 yrs.Warehouse and distribution facility in Lakewood, New Jersey
    
    
    6,189
    
    
    
    710
    
    
    
    4,531
    
    
    
    3,439
    
    
    
    
    
    
    
    710
    
    
    
    7,970
    
    
    
    8,680
    
    
    
    1,617
    
    
    Jun. 2000
    
    40 yrs.Retail facilities in Kennesaw, Georgia and Leawood, Kansas
    
    
    13,414
    
    
    
    6,230
    
    
    
    15,842
    
    
    
    108
    
    
    
    
    
    
    
    6,230
    
    
    
    15,950
    
    
    
    22,180
    
    
    
    3,406
    
    
    Jun. 2000
    
    40 yrs.Land in Scottsdale, Arizona
    
    
    7,868
    
    
    
    14,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,600
    
    
    
    
    
    
    
    14,600
    
    
    
    
    
    
    Sep. 2000
    
    
    N/AIndustrial facility in Albuquerque, New Mexico
    
    
    3,227
    
    
    
    1,490
    
    
    
    4,636
    
    
    
    7
    
    
    
    
    
    
    
    1,490
    
    
    
    4,643
    
    
    
    6,133
    
    
    
    962
    
    
    Sep. 2000
    
    40 yrs.Office facility in Houston, Texas
    
    
    4,607
    
    
    
    570
    
    
    
    6,760
    
    
    
    
    
    
    
    
    
    
    
    570
    
    
    
    6,760
    
    
    
    7,330
    
    
    
    1,401
    
    
    Sep. 2000
    
    40 yrs.Office facility in Eagan, Minnesota
    
    
    19,609
    
    
    
    4,225
    
    
    
    15,518
    
    
    
    2
    
    
    
    (1,325
    )
    
    
    2,900
    
    
    
    15,520
    
    
    
    18,420
    
    
    
    3,217
    
    
    Sep. 2000
    
    40 yrs.Warehouse and distribution facilities in Valdosta, Georgia and
Johnson City, Tennessee
    
    
    11,634
    
    
    
    650
    
    
    
    16,889
    
    
    
    410
    
    
    
    
    
    
    
    650
    
    
    
    17,299
    
    
    
    17,949
    
    
    
    3,550
    
    
    Oct. 2000
    
    40 yrs.Land in Elk Grove Village, Illinois
    
    
    2,184
    
    
    
    4,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,100
    
    
    
    
    
    
    
    4,100
    
    
    
    
    
    
    Oct. 2000
    
    
    N/AIndustrial facility in Salisbury, North Carolina
    
    
    6,521
    
    
    
    1,370
    
    
    
    2,672
    
    
    
    6,298
    
    
    
    (51
    )
    
    
    1,319
    
    
    
    8,970
    
    
    
    10,289
    
    
    
    1,579
    
    
    Nov. 2000
    
    40 yrs.Office facility in Lafayette, Louisiana
    
    
    2,256
    
    
    
    660
    
    
    
    3,005
    
    
    
    
    
    
    
    
    
    
    
    660
    
    
    
    3,005
    
    
    
    3,665
    
    
    
    604
    
    
    Dec. 2000
    
    40 yrs.Office facility in Collierville, Tennessee
    
    
    40,686
    
    
    
    3,154
    
    
    
    70,646
    
    
    
    12
    
    
    
    
    
    
    
    3,154
    
    
    
    70,658
    
    
    
    73,812
    
    
    
    25,740
    
    
    Dec. 2000
    
    7 - 40 yrs.Multiplex motion picture theater in Port St. Lucie and Pensacola,
Florida
    
    
    6,055
    
    
    
    3,200
    
    
    
    3,066
    
    
    
    6,800
    
    
    
    (4,112
    )
    
    
    3,685
    
    
    
    5,269
    
    
    
    8,954
    
    
    
    991
    
    
    Dec. 2000
    
    40 yrs.Retail, warehouse and distribution facilities in York, Pennsylvania
    
    
    9,621
    
    
    
    1,974
    
    
    
    10,068
    
    
    
    8,433
    
    
    
    (5,456
    )
    
    
    849
    
    
    
    14,170
    
    
    
    15,019
    
    
    
    1,398
    
    
    Dec. 2000
    
    40 yrs.
 CPA ® :14 2008 10-K  73




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##### Table of Contents



SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION   (in thousands)
 Life on whichDepreciation inCosts Capitalized
    
    Increase
    
    Gross Amount at which Carried
    
    
    
    
    
    
    
    
    
    Latest Statement ofInitial Cost to Company
    
    Subsequent to
    
    (Decrease) in Net
    
    at Close of Period
    
    Accumulated
    
    Date
    
    Income isDescription
    
    Encumbrances
    
    Land
    
    Buildings
    
    Acquisition (a)
    
    Investments (b)
    
    Land
    
    Buildings
    
    Total
    
    Depreciation (e)
    
    Acquired
    
    ComputedReal Estate Under Operating Leases (Continued):Office facilities in Lindon, Utah
    
    
    
    
    
    
    1,390
    
    
    
    1,123
    
    
    
    8,072
    
    
    
    (428
    )
    
    
    1,851
    
    
    
    8,306
    
    
    
    10,157
    
    
    
    2,110
    
    
    Dec. 2000
    
    40 yrs.Office facility in Houston, Texas
    
    
    3,634
    
    
    
    1,025
    
    
    
    4,530
    
    
    
    341
    
    
    
    
    
    
    
    1,025
    
    
    
    4,871
    
    
    
    5,896
    
    
    
    934
    
    
    Dec. 2000
    
    40 yrs.Industrial and office facilities in Elgin, Illinois; Bozeman,
Montana and Nashville, Tennessee
    
    
    11,105
    
    
    
    3,900
    
    
    
    17,937
    
    
    
    138
    
    
    
    (546
    )
    
    
    3,900
    
    
    
    17,529
    
    
    
    21,429
    
    
    
    3,410
    
    
    Mar. 2001
    
    40 yrs.Warehouse and distribution facility in Duluth, Georgia
    
    
    7,239
    
    
    
    2,167
    
    
    
    11,446
    
    
    
    5
    
    
    
    
    
    
    
    2,167
    
    
    
    11,451
    
    
    
    13,618
    
    
    
    2,230
    
    
    Mar. 2001
    
    40 yrs.Industrial facilities in City of Industry, California; Florence,
Kentucky; Chelmsford, Massachusetts and Lancaster, Texas
    
    
    9,840
    
    
    
    4,398
    
    
    
    13,418
    
    
    
    3,745
    
    
    
    24
    
    
    
    4,643
    
    
    
    16,942
    
    
    
    21,585
    
    
    
    3,076
    
    
    Apr. 2001
    
    7-40 yrs.Industrial facilities in Mesa, Arizona and Moorpark, California (c)
    
    
    21,985
    
    
    
    4,000
    
    
    
    14,951
    
    
    
    10,146
    
    
    
    
    
    
    
    5,945
    
    
    
    23,152
    
    
    
    29,097
    
    
    
    3,438
    
    
    Jun. 2001, Dec. 2006
    
    34.5 yrs.Industrial facilities in South Windsor and Manchester, Connecticut
    
    
    11,620
    
    
    
    1,555
    
    
    
    18,823
    
    
    
    250
    
    
    
    27
    
    
    
    1,555
    
    
    
    19,100
    
    
    
    20,655
    
    
    
    3,550
    
    
    Jul. 2001
    
    
    N/AIndustrial and office facilities in Rome, Georgia; Niles,
Illinois; Plymouth, Michigan and Twinsburg, Ohio
    
    
    15,403
    
    
    
    4,140
    
    
    
    23,822
    
    
    
    1,374
    
    
    
    
    
    
    
    4,140
    
    
    
    25,196
    
    
    
    29,336
    
    
    
    4,729
    
    
    Aug. 2001
    
    40 yrs.Industrial facility in Milford, Ohio
    
    
    9,236
    
    
    
    2,000
    
    
    
    12,869
    
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    12,869
    
    
    
    14,869
    
    
    
    2,346
    
    
    Sep. 2001
    
    40 yrs.Retail facilities in several cities in the following states: Arizona, California, Florida, Illinois, Massachusetts, Maryland,
Michigan, Minnesota and Texas
    
    
    40,151
    
    
    
    17,100
    
    
    
    54,743
    
    
    
    
    
    
    
    
    
    
    
    17,100
    
    
    
    54,743
    
    
    
    71,843
    
    
    
    9,752
    
    
    Nov. 2001
    
    40 yrs.Office facility in Richardson, Texas
    
    
    27,802
    
    
    
    3,400
    
    
    
    45,054
    
    
    
    
    
    
    
    (501
    )
    
    
    3,400
    
    
    
    44,553
    
    
    
    47,953
    
    
    
    7,844
    
    
    Dec. 2001
    
    40 yrs.Office facility in Turku, Finland
    
    
    47,674
    
    
    
    801
    
    
    
    23,390
    
    
    
    12,291
    
    
    
    13,556
    
    
    
    1,784
    
    
    
    48,254
    
    
    
    50,038
    
    
    
    6,944
    
    
    Dec. 2001, Dec. 2007
    
    25 - 40 yrs.Educational facilities in Union, New Jersey; Allentown and
Philadelphia, Pennsylvania and Grand Prairie, Texas
    
    
    5,541
    
    
    
    2,486
    
    
    
    7,602
    
    
    
    
    
    
    
    3
    
    
    
    2,486
    
    
    
    7,605
    
    
    
    10,091
    
    
    
    1,339
    
    
    Dec. 2001
    
    40 yrs.Warehouse, distribution, office and industrial facilities in
Perris, California; Eugene, Oregon; West Jordan, Utah and Tacoma,
Washington
    
    
    6,502
    
    
    
    6,050
    
    
    
    8,198
    
    
    
    
    
    
    
    (1,845
    )
    
    
    4,200
    
    
    
    8,203
    
    
    
    12,403
    
    
    
    1,410
    
    
    Feb. 2002
    
    40 yrs.Warehouse and distribution facilities in Charlotte and Lincolnton,
North Carolina and Mauldin, South Carolina
    
    
    8,233
    
    
    
    1,860
    
    
    
    12,852
    
    
    
    
    
    
    
    1
    
    
    
    1,860
    
    
    
    12,853
    
    
    
    14,713
    
    
    
    2,184
    
    
    Mar. 2002
    
    40 yrs.Warehouse and distribution facilities in Boe, Carpiquet, Mans,
Vendin Le Vieil, Lieusaint, Lagnieu, Luneville and St. Germain de
Puy, France
    
    
    95,769
    
    
    
    15,724
    
    
    
    75,211
    
    
    
    13,755
    
    
    
    50,817
    
    
    
    26,235
    
    
    
    129,272
    
    
    
    155,507
    
    
    
    21,330
    
    
    Mar. 2002
    
    40 yrs.Warehouse, distribution and office facilities in Davenport, Iowa
and Bloomington, Minnesota
    
    
    17,709
    
    
    
    3,260
    
    
    
    26,009
    
    
    
    
    
    
    
    
    
    
    
    3,260
    
    
    
    26,009
    
    
    
    29,269
    
    
    
    4,199
    
    
    Jul. 2002
    
    40 yrs.Industrial facility in Gorinchem, Netherlands
    
    
    6,760
    
    
    
    2,374
    
    
    
    3,864
    
    
    
    
    
    
    
    2,531
    
    
    
    3,383
    
    
    
    5,386
    
    
    
    8,769
    
    
    
    871
    
    
    Jul. 2002Industrial facilities in Granite City, Illinois; Kendallville,
Indiana and Clinton Township, Michigan
    
    
    18,697
    
    
    
    4,390
    
    
    
    30,336
    
    
    
    
    
    
    
    (1,022
    )
    
    
    4,390
    
    
    
    29,314
    
    
    
    33,704
    
    
    
    5,089
    
    
    Aug. 2002
    
    40 yrs.Educational facility in Upper Saucon Township, Pennsylvania
    
    
    12,324
    
    
    
    3,200
    
    
    
    15,415
    
    
    
    1,475
    
    
    
    
    
    
    
    3,200
    
    
    
    16,890
    
    
    
    20,090
    
    
    
    2,307
    
    
    Aug. 2002
    
    40 yrs.Retail facilities in Lombard, Illinois and Fairfax, Virginia (d)
    
    
    15,061
    
    
    
    13,226
    
    
    
    18,248
    
    
    
    
    
    
    
    (696
    )
    
    
    13,226
    
    
    
    17,552
    
    
    
    30,778
    
    
    
    1,089
    
    
    Dec. 2006
    
    33.6 yrs.Retail facility in South Tulsa, Oklahoma (d)
    
    
    4,721
    
    
    
    1,649
    
    
    
    3,425
    
    
    
    
    
    
    
    
    
    
    
    1,649
    
    
    
    3,425
    
    
    
    5,074
    
    
    
    238
    
    
    Dec. 2006
    
    30 yrs.Retail and warehouse and distribution facilities in Johnstown and
Whitehall, Pennsylvania (d)
    
    
    4,474
    
    
    
    2,115
    
    
    
    15,945
    
    
    
    
    
    
    
    (609
    )
    
    
    2,115
    
    
    
    15,336
    
    
    
    17,451
    
    
    
    1,055
    
    
    Dec. 2006
    
    30.3 yrs.Warehouse and distribution facility in Dallas, Texas (d)
    
    
    3,504
    
    
    
    323
    
    
    
    6,784
    
    
    
    
    
    
    
    
    
    
    
    323
    
    
    
    6,784
    
    
    
    7,107
    
    
    
    383
    
    
    Dec. 2006
    
    30.8 yrs.Industrial facility in Shelburne, Vermont (d)
    
    
    2,051
    
    
    
    955
    
    
    
    2,919
    
    
    
    
    
    
    
    
    
    
    
    955
    
    
    
    2,919
    
    
    
    3,874
    
    
    
    199
    
    
    Dec. 2006
    
    30.6 yrs.Industrial facilities in Fort Dodge, Indiana and Oconomowoc, Wisconsin (d)
    
    
    6,423
    
    
    
    1,218
    
    
    
    11,879
    
    
    
    
    
    
    
    
    
    
    
    1,218
    
    
    
    11,879
    
    
    
    13,097
    
    
    
    1,053
    
    
    Dec. 2006
    
    23.5 yrs.
 CPA ® :14 2008 10-K  74




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##### Table of Contents



SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION   (in thousands)
 Life on whichDepreciation inCosts Capitalized
    
    
    Increase
    
    
    Gross Amount at which Carried
    
    
    
    
    
    
    
    
    
    
    Latest Statement ofInitial Cost to Company
    
    
    Subsequent to
    
    
    (Decrease) in Net
    
    
    at Close of Period
    
    
    Accumulated
    
    
    Date
    
    
    Income isDescription
    
    Encumbrances
    
    
    Land
    
    
    Buildings
    
    
    Acquisition (a)
    
    
    Investments (b)
    
    
    Land
    
    
    Buildings
    
    
    Total
    
    
    Depreciation (e)
    
    
    Acquired
    
    
    ComputedReal Estate Under Operating Leases (Continued):Industrial facility in Aurora, Illinois (d)
    
    
    9,213
    
    
    
    2,730
    
    
    
    10,391
    
    
    
    
    
    
    
    
    
    
    
    2,730
    
    
    
    10,391
    
    
    
    13,121
    
    
    
    702
    
    
    Dec. 2006
    
    30.8 yrs.Industrial facility in Houston, Texas (d)
    
    
    
    
    
    
    2,299
    
    
    
    4,722
    
    
    
    
    
    
    
    
    
    
    
    2,299
    
    
    
    4,722
    
    
    
    7,021
    
    
    
    602
    
    
    Dec. 2006
    
    16.3 yrs.Industrial, warehouse and distribution and office
facilities in Waterloo, Wisconsin (d)
    
    
    
    
    
    
    922
    
    
    
    16,824
    
    
    
    
    
    
    
    (642
    )
    
    
    922
    
    
    
    16,182
    
    
    
    17,104
    
    
    
    1,658
    
    
    Dec. 2006
    
    20.3 yrs.Industrial and warehouse and distribution facilities
in Westfield, Massachusetts (d)
    
    
    6,553
    
    
    
    1,106
    
    
    
    9,952
    
    
    
    
    
    
    
    
    
    
    
    1,106
    
    
    
    9,952
    
    
    
    11,058
    
    
    
    599
    
    
    Dec. 2006
    
    34.7 yrs.Industrial facility in Richmond, Missouri (d)
    
    
    5,725
    
    
    
    530
    
    
    
    6,505
    
    
    
    
    
    
    
    
    
    
    
    530
    
    
    
    6,505
    
    
    
    7,035
    
    
    
    389
    
    
    Dec. 2006
    
    34.8 yrs.Retail facilities in Bourne, Sandwich and Chelmsford,
Massachusetts (d)
    
    
    1,464
    
    
    
    1,418
    
    
    
    2,157
    
    
    
    
    
    
    
    
    
    
    
    1,418
    
    
    
    2,157
    
    
    
    3,575
    
    
    
    145
    
    
    Dec. 2006
    
    31.1 yrs.Industrial facility in Carlsbad, California (d)
    
    
    4,811
    
    
    
    2,618
    
    
    
    4,880
    
    
    
    
    
    
    
    
    
    
    
    2,618
    
    
    
    4,880
    
    
    
    7,498
    
    
    
    330
    
    
    Dec. 2006
    
    30.8 yrs.Fitness and recreational facility in Houston, Texas (d)
    
    
    3,830
    
    
    
    1,613
    
    
    
    3,398
    
    
    
    
    
    
    
    
    
    
    
    1,613
    
    
    
    3,398
    
    
    
    5,011
    
    
    
    239
    
    
    Dec. 2006
    
    29.7 yrs.Theater in Hickory Creek, Texas (d)
    
    
    3,878
    
    
    
    3,138
    
    
    
    6,752
    
    
    
    
    
    
    
    
    
    
    
    3,138
    
    
    
    6,752
    
    
    
    9,890
    
    
    
    414
    
    
    Dec. 2006
    
    34 yrs.Educational facilities in Chandler, Arizona; Fleming
Island, Florida; Ackworth, Georgia; Hauppauge and
Patchogue, New York; Sugar Land, Texas; Hampton,
Virginia and Silverdale, Washington (d)
    
    
    6,062
    
    
    
    4,312
    
    
    
    9,963
    
    
    
    
    
    
    
    (379
    )
    
    
    4,313
    
    
    
    9,583
    
    
    
    13,896
    
    
    
    677
    
    
    Dec. 2006
    
    29.6 yrs.Industrial facility in Indianapolis, Indiana (d)
    
    
    1,867
    
    
    
    1,035
    
    
    
    6,594
    
    
    
    
    
    
    
    
    
    
    
    1,035
    
    
    
    6,594
    
    
    
    7,629
    
    
    
    466
    
    
    Dec. 2006
    
    29.5 yrs.Warehouse and distribution facilities in Greenville,
South Carolina (d)
    
    
    4,761
    
    
    
    625
    
    
    
    8,178
    
    
    
    
    
    
    
    
    
    
    
    625
    
    
    
    8,178
    
    
    
    8,803
    
    
    
    612
    
    
    Dec. 2006
    
    27.8 yrs.$
    746,277
    
    
    $
    220,135
    
    
    $
    880,669
    
    
    $
    132,792
    
    
    $
    42,179
    
    
    $
    231,325
    
    
    $
    1,044,450
    
    
    $
    1,275,775
    
    
    $
    188,739
 Gross Amount atCosts Capitalized
    
    
    Increase
    
    
    which CarriedInitial Cost to Company
    
    
    Subsequent to
    
    
    (Decrease) in Net
    
    
    at Close of
    
    
    DateDescription
    
    Encumbrances (c)
    
    
    Land
    
    
    Buildings
    
    
    Acquisition (a)
    
    
    Investments (b)
    
    
    Period Total
    
    
    AcquiredDirect Financing Method:Industrial facilities in Dallas and Greenville, Texas
    
    $
    12,253
    
    
    $
    460
    
    
    $
    20,427
    
    
    $
    
    
    
    $
    (3,192
    )
    
    $
    17,695
    
    
    Nov. 1999Multiplex theater facility in Midlothian, Virginia
    
    
    9,038
    
    
    
    
    
    
    
    10,819
    
    
    
    854
    
    
    
    1,194
    
    
    
    12,867
    
    
    Sep. 1999Office facility in Scottsdale, Arizona
    
    
    13,696
    
    
    
    
    
    
    
    25,415
    
    
    
    
    
    
    
    
    
    
    
    25,415
    
    
    Sep. 2000Warehouse and distribution facility in Elk Grove Village, Illinois
    
    
    2,225
    
    
    
    
    
    
    
    4,172
    
    
    
    4
    
    
    
    1
    
    
    
    4,177
    
    
    Oct. 2000Multiplex motion picture theater in Pensacola, Florida
    
    
    9,473
    
    
    
    
    
    
    
    4,112
    
    
    
    2,542
    
    
    
    
    
    
    
    6,654
    
    
    Dec. 2000Industrial facility in Doncaster, United Kingdom
    
    
    4,951
    
    
    
    
    
    
    
    8,383
    
    
    
    7
    
    
    
    1,429
    
    
    
    9,819
    
    
    Jan.2001Industrial and manufacturing facilities in Old Fort and
Albemarie, North Carolina; Holmesville, Ohio and Springfield,
Tennessee
    
    
    7,249
    
    
    
    2,961
    
    
    
    24,474
    
    
    
    20
    
    
    
    (9,754
    )
    
    
    17,701
    
    
    Sep. 2001Educational facility in Mooresville, North Carolina
    
    
    5,632
    
    
    
    1,600
    
    
    
    9,276
    
    
    
    130
    
    
    
    (402
    )
    
    
    10,604
    
    
    Feb. 2002Industrial facility in Ashburn Junction, Virginia (d)
    
    
    
    
    
    
    4,683
    
    
    
    15,116
    
    
    
    
    
    
    
    
    
    
    
    19,799
    
    
    Dec. 2006$
    64,517
    
    
    $
    9,704
    
    
    $
    122,194
    
    
    $
    3,557
    
    
    $
    (10,724
    )
    
    $
    124,731
 CPA ® :14 2008 10-K  75




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##### Table of Contents



NOTES TO SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION
 
 (a)
    
    Consists of the costs of improvements subsequent to purchase and acquisition costs, including
legal fees, appraisal fees, title costs and other related professional fees.(b)
    
    The increase (decrease) in net investment was 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 minority interests.(c)
    
    Additional interest in this property acquired in the Merger on December 1, 2006.(d)
    
    Property acquired in the Merger on December 1, 2006.(e)
    
    Reconciliation of real estate and accumulated depreciation (see below): Reconciliation of Real Estate Subject toOperating LeasesDecember 31,2008
    
    
    2007
    
    
    2006Balance at beginning of year
    
    $
    1,301,505
    
    
    $
    1,291,598
    
    
    $
    1,050,368Additions
    
    
    527
    
    
    
    17,524
    
    
    
    218,018Dispositions
    
    
    (16,799
    )
    
    
    (30,088
    )
    
    
    (25,295
    )Foreign currency translation adjustment
    
    
    (9,458
    )
    
    
    22,471
    
    
    
    17,753Reclassification from equity investment
    
    
    
    
    
    
    
    
    
    
    30,754Balance at close of year
    
    $
    1,275,775
    
    
    $
    1,301,505
    
    
    $
    1,291,598Reconciliation of Accumulated DepreciationDecember 31,2008
    
    
    2007
    
    
    2006Balance at beginning of year
    
    $
    162,374
    
    
    $
    137,262
    
    
    $
    106,731Depreciation expense
    
    
    29,527
    
    
    
    29,085
    
    
    
    27,458Depreciation expense from discontinued operations
    
    
    190
    
    
    
    479
    
    
    
    190Dispositions
    
    
    (2,073
    )
    
    
    (6,950
    )
    
    
    (2,933
    )Foreign currency translation adjustment
    
    
    (1,279
    )
    
    
    2,498
    
    
    
    1,732Reclassification from equity investment
    
    
    
    
    
    
    
    
    
    
    4,084Balance at close of year
    
    $
    188,739
    
    
    $
    162,374
    
    
    $
    137,262
  CPA®:14 2008 10-K  76




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A(T). Controls and Procedures.
 Disclosure Controls and Procedures
   Managements Report on Internal Control Over Financial Reporting
      Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information.
  CPA®:14 2008 10-K  77




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##### Table of Contents



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 Accountant Fees and Services
  
  
 Item 15. Exhibits, Financial Statement Schedules.
    Exhibit No.
    
    Description
    
    Method of Filing3.1
    
    Articles of Incorporation of Registrant
    
    Incorporated by reference to
Registration Statement Form S-11
(No. 333-31437) filed on July
16, 19973.2
    
    Articles of Amendment
    
    Incorporated by reference to
Registration Statement Form S-11
(No. 333-76761) filed on
November 16, 19993.3
    
    Bylaws of Registrant
    
    Incorporated by reference to
Registration Statement Form S-11
(No. 333-31437) filed on July
16, 19974.1
    
    Dividend Reinvestment and Share Purchase Plan
    
    Exhibit 4.1 to Form S-3D filed on
July 22, 200210.1
    
    Agreement and Plan of Merger dated as of June 29, 2006 by and among
Corporate Property Associates 14 Incorporated, Corporate Property
Associates 12 Incorporated, CPA 14 Acquisition Inc., CPI Holdings
Incorporated and CPA 12 Merger Sub Inc.
    
    Incorporated by reference to
Form 8-K/A filed on July 6, 2006
 CPA®:14 2008 10-K  78




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##### Table of Contents



Exhibit No.
    
    Description
    
    Method of Filing10.2
    
    Amended and Restated Advisory Agreement dated September 30, 2007
between Corporate Property Associates 14 Incorporated and Carey Asset
Management Corp.
    
    Incorporated by reference to
Form 10-Q filed on November 14,
200710.3
    
    Amendment No. 1 to the Amended and Restated Advisory Agreement dated as
of September 2, 2008 between Corporate Property Associates 14
Incorporated and Carey Asset Management Corp.
    
    Incorporated by reference to
Form 10-Q filed on November 14,
200810.4
    
    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
Form 10-Q filed on November 14,
200821.1
    
    Subsidiaries of Registrant
    
    Filed herewith23.1
    
    Consent of PricewaterhouseCoopers LLP
    
    Filed herewith31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith32
    
    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith
 CPA®:14 2008 10-K  79




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##### Table of Contents



SIGNATURES
  Corporate Property Associates 14 IncorporatedDate 3/26/2009
    By:
    /s/ Mark J. DeCesarisMark J. DeCesarisManaging Director and Acting Chief Financial Officer  Signature
    
    Title
    
    Date/s/ Wm. Polk Carey
Wm. Polk Carey
    
    Chairman of the Board and Director
    
    3/26/2009/s/ Gordon F. DuGan
Gordon F. DuGan
    
    Chief Executive Officer
(Principal Executive Officer)
    
    3/26/2009/s/ Mark J. DeCesaris
Mark J. DeCesaris
    
    Managing Director and Acting Chief Financial
Officer (Principal Financial Officer)
    
    3/26/2009/s/ Thomas J. Ridings Jr.
Thomas J. Ridings Jr.
    
    Executive Director and Chief Accounting Officer
(Principal Accounting Officer)
    
    3/26/2009/s/ Marshall E. Blume
Marshall E. Blume
    
    Director
    
    3/26/2009/s/ James D. Price
James D. Price
    
    Director
    
    3/26/2009
 CPA®:14 2008 10-K  80