##### 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, 2005
 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
    
    13-3951476(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 50 ROCKEFELLER PLAZA
    
    10020NEW YORK, NEW YORK
    
    (Zip code)(Address of principal executive offices)
 
 
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TABLE OF CONTENTS  PART IITEM 1. BusinessITEM 1A. Risk FactorsITEM 1B. Unresolved Staff CommentsITEM 2. PropertiesITEM 3. Legal ProceedingsITEM 4. Submission of Matters to a Vote of Security HoldersPART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosures About Market RiskITEM 8. Financial Statements and Supplementary DataITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A. Controls and ProceduresITEM 9B. Other InformationPART IIIITEM 10. Directors and Executive Officers of the RegistrantITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersITEM 13. Certain Relationships and Related TransactionsITEM 14. Principal Accountant Fees and Services.PART IVITEM 15. Exhibits, Financial Statement SchedulesSIGNATURESEX-21.1: SUBSIDIARIES OF REGISTRANTEX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION    Table of Contents  
    Financial information in this report is in thousands except share and per share amounts.
 
 ITEM 1. Business.
 (a)
    
    General Development of Business
    
    
    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 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.
  ® ® ® ® ® ®
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® ® ® ®
      
    
    In March 2005, Gordon F. DuGan was elected chief executive officer. Mr. DuGan was
previously co-chief executive officer with William Polk Carey, who remains chairman of the
board.
    
    In March 2005, Thomas E. Zacharias was appointed chief operating officer. Mr. Zacharias
also continues to serve as managing director and head of the asset management department.
    
    In March 2005, the board of directors accepted the resignation of John J. Park as chief
financial officer and elected Claude Fernandez, who had been the chief accounting officer,
as acting chief financial officer. Mr. Park is currently managing director  strategic
planning.
    
    In November 2005, Mark J. DeCesaris, managing director, was appointed acting chief
financial officer and chief administrative officer. Mr. DeCesaris has been a consultant in
the finance department since May 2005. Mr. Fernandez has resumed his responsibilities as
chief accounting officer.
   (b)
    
    Financial Information About Segments
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(c)
    
    Narrative Description of Business
    
    
    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.
       Consolidated Investments
    
    
    Combined Investments (2)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualRegion
    
    Revenue (1)
    
    
    Lease Revenue
    
    
    Revenue (1)
    
    
    Lease RevenueUnited StatesEast
    
    $
    29,906
    
    
    
    24.93
    %
    
    $
    36,499
    
    
    
    23.71
    %Midwest
    
    
    26,976
    
    
    
    22.49
    
    
    
    32,967
    
    
    
    21.41South
    
    
    25,265
    
    
    
    21.06
    
    
    
    33,049
    
    
    
    21.47West
    
    
    17,984
    
    
    
    14.99
    
    
    
    31,624
    
    
    
    20.54Total U.S.
    
    
    100,131
    
    
    
    83.47
    
    
    
    134,139
    
    
    
    87.13InternationalEurope
    
    
    19,810
    
    
    
    16.53
    
    
    
    19,810
    
    
    
    12.87Total
    
    $
    119,941
    
    
    
    100.00
    %
    
    $
    153,949
    
    
    
    100.00
    %
 
 (1)
    
    Reflects annualized contractual base rent for the fourth quarter of 2005.(2)
    
    Reflects information regarding our consolidated investments and includes our pro rata share
of contractual lease revenue from equity investments. 4




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PROPERTY DIVERSIFICATION
  Consolidated Investments
    
    
    Combined Investments (2)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualProperty Type
    
    Revenue (1)
    
    
    Lease Revenue
    
    
    Revenue (1)
    
    
    Lease RevenueWarehouse/distribution
    
    $
    36,858
    
    
    
    30.73
    %
    
    $
    41,185
    
    
    
    26.75
    %Industrial
    
    
    35,012
    
    
    
    29.19
    
    
    
    45,229
    
    
    
    29.38Office
    
    
    29,597
    
    
    
    24.68
    
    
    
    38,213
    
    
    
    24.82Other properties
    
    
    9,731
    
    
    
    8.11
    
    
    
    20,517
    
    
    
    13.33Retail
    
    
    8,511
    
    
    
    7.10
    
    
    
    8,510
    
    
    
    5.53Land
    
    
    232
    
    
    
    .19
    
    
    
    295
    
    
    
    .19Total
    
    $
    119,941
    
    
    
    100.00
    %
    
    $
    153,949
    
    
    
    100.00
    %
 
 (1)
    
    Reflects annualized contractual base rent for the fourth quarter of 2005.(2)
    
    Reflects information regarding our consolidated investments and includes our pro rata share
of contractual lease revenue from equity investments. TENANT DIVERSIFICATION
  Consolidated Investments
    
    
    Combined Investments (2)Annualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualTenant Industry (3)
    
    Revenue (1)
    
    
    Lease Revenue
    
    
    Revenue (1)
    
    
    Lease RevenueManufacturing
    
    $
    40,252
    
    
    
    33.56
    %
    
    $
    50,469
    
    
    
    32.78
    %Retail trade
    
    
    27,919
    
    
    
    23.28
    
    
    
    27,919
    
    
    
    18.14Wholesale trade
    
    
    20,609
    
    
    
    17.18
    
    
    
    26,452
    
    
    
    17.18Transportation and warehousing
    
    
    5,751
    
    
    
    4.79
    
    
    
    5,751
    
    
    
    3.74Information
    
    
    5,109
    
    
    
    4.26
    
    
    
    7,356
    
    
    
    4.78Educational services
    
    
    4,692
    
    
    
    3.91
    
    
    
    4,692
    
    
    
    3.05Administrative and support and
waste management and
remediation services
    
    
    3,706
    
    
    
    3.09
    
    
    
    3,706
    
    
    
    2.41Arts, entertainment and
recreation
    
    
    1,421
    
    
    
    1.19
    
    
    
    13,828
    
    
    
    8.98Real estate, rental and leasing
    
    
    
    
    
    
    
    
    
    
    3,294
    
    
    
    2.14Other (4)
    
    
    10,482
    
    
    
    8.74
    
    
    
    10,482
    
    
    
    6.80Total
    
    $
    119,941
    
    
    
    100.00
    %
    
    $
    153,949
    
    
    
    100.00
    %
 
 (1)
    
    Reflects annualized contractual base rent for the fourth quarter of 2005.(2)
    
    Reflects information regarding our consolidated investments and includes our pro rata share
of contractual lease revenue from equity investments.(3)
    
    Based on the North American Industry Classification System (NAICS) and information provided
by the tenant.(4)
    
    Includes revenue from tenants in the professional, scientific and technical services,
management of companies and enterprises, accommodation and food services and healthcare and
social assistance industries as well as other services industries. 5




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LEASE EXPIRATIONS
  Consolidated Investments
    
    
    Combined InvestmentsAnnualized
    
    
    % of Annualized
    
    
    Annualized
    
    
    % of AnnualizedContractual Lease
    
    
    Contractual
    
    
    Contractual Lease
    
    
    ContractualYear of Lease Expiration
    
    Revenue (1)
    
    
    Lease Revenue
    
    
    Revenue (1)
    
    
    Lease Revenue2006
    
    $
    123
    
    
    
    .10
    %
    
    $
    123
    
    
    
    .08
    %2007
    
    
    566
    
    
    
    .47
    
    
    
    566
    
    
    
    .372008
    
    
    287
    
    
    
    .24
    
    
    
    287
    
    
    
    .192009
    
    
    1,205
    
    
    
    1.00
    
    
    
    1,205
    
    
    
    .782010
    
    
    2,152
    
    
    
    1.79
    
    
    
    2,152
    
    
    
    1.402011
    
    
    15,626
    
    
    
    13.03
    
    
    
    15,626
    
    
    
    10.152012
    
    
    103
    
    
    
    .09
    
    
    
    103
    
    
    
    0.072013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2014
    
    
    2,418
    
    
    
    2.02
    
    
    
    6,801
    
    
    
    4.422015
    
    
    4,207
    
    
    
    3.51
    
    
    
    6,454
    
    
    
    4.192016 - 2020
    
    
    46,697
    
    
    
    38.93
    
    
    
    57,963
    
    
    
    37.652021 - 2025
    
    
    45,458
    
    
    
    37.90
    
    
    
    61,570
    
    
    
    39.992026 and thereafter
    
    
    1,099
    
    
    
    .92
    
    
    
    1,099
    
    
    
    .71Total
    
    $
    119,941
    
    
    
    100.00
    %
    
    $
    153,949
    
    
    
    100.00
    %
 
 (1)
    
    Reflects annualized contractual base rent for the fourth quarter of 2005.(2)
    
    Reflects information regarding our consolidated investments and includes our pro rata share
of contractual lease revenue from equity investments.      ®
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® ®
          .
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® ® ® ® ® ® ®
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
    
    Ralph F. Verni, Chairman  Currently serving as a board of director
member of Commonwealth Capital, First Pioneer Credit and the Eaton
Vance Mutual Fund Family. Former board member of The MacGregor Group
and former executive vice president, board member and chief investment
officer of The New England Mutual Life Insurance Company and former
president and chief executive officer of State Street Research
Management.
    
    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.
    
    Nathaniel S. Coolidge  Former senior vice president and head of the
bond and corporate finance department of John Hancock Mutual Life
Insurance. Mr. Coolidges responsibilities included overseeing its
entire portfolio of fixed income investments.
    
    George E. Stoddard  Former officer-in-charge of the direct placement
department of The Equitable Life Assurance Society of the United
States and our former chief investment officer.
    
    Dr. Karsten von Köller  Currently chairman of Lone Star Germany GmbH
and chairman and member of the board of managing directors of
Allgemeine HypothekenBank Rheinboden AG.
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® ® ®
    ®
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(d)
    
    Financial Information About Geographic Areas
  (e)
    
    Available Information
  
 ITEM
1A. Risk Factors.
    
    
    Adverse changes in general or local economic conditions,
    
    Changes in supply of or demand for similar or competing properties,
    
    Changes in interest rates and operating expenses,
    
    Competition for tenants,
    
    Changes in market rental rates,
    
    Inability to lease properties upon termination of existing leases,
    
    Renewal of leases at lower rental rates,
    
    Inability to collect rents from tenants due to financial hardship, including bankruptcy,
    
    Changes in tax, real estate, zoning and environmental laws that may have an adverse impact upon the value of real estate,
    
    Uninsured property liability, property damage or casualty losses,
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
    
    Unexpected expenditures for capital improvements or to bring properties into compliance with applicable federal, state and
local laws, and
    
    Acts of God and other factors beyond the control of our management.
 .
  .
      
    
    the receipt of compensation by our advisor for property purchases,
leases, sales and financing for us, which may cause our 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 our advisor, including agreements regarding
compensation, have not been negotiated on an arms length basis as
would occur if the agreements were with unaffiliated third parties;
    
    sale of single properties or portfolios of our properties to our
affiliates, including WPC or the CPA® REITs, which may take the form
of a direct purchase of our assets by an affiliate, a merger with an
affiliate or another type of transaction, which may result in the
payment of significant transactional fees to our advisor as well as
management fees;
    
    purchases and loans from affiliates, subject to our investment
procedures, objectives and policies, which will increase fees and
interest payable to affiliates, thereby decreasing our net income and
possibly causing us to incur higher leverage levels; and
    
    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 the property.
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
    
    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.
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
    
    the loss of lease payments;
    
    an increase in the costs incurred to carry the property;
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
    
    a reduction in the value of shares; and
    
    a decrease in distributions to shareholders.
     ®
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2006
    
    $
    
    (1)2007
    
    $
    2008
    
    $
    5,3212009
    
    $
    37,604
    (1)2010
    
    $
    57,990
 
 (1)
    
    Excludes our pro rata share of mortgage obligations from equity investments totaling $10,299 in
2006 and $31,912 in 2009.   16




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®
     .
    17




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.
         
    
    any person who beneficially owns 10% or more of the voting power of outstanding shares;
    
    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, referred to as an interested shareholder; or
    
    an affiliate of an interested shareholder.
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
    
    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.
  .
  
    
    whether your investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code;
    
    whether your investment will produce unrelated business taxable income, referred to as UBTI, to the benefit plan; and
    
    our need to value the assets of the benefit plan annually.
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ITEM 1B. Unresolved Staff Comments.
  
 ITEM 2. Properties.
   
 ITEM 3. Legal Proceedings.
   ®
 ® ®
 ® ® ® ®
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® ® ® ®
   
 ITEM 4. Submission of Matters to a Vote of Security Holders.
  
  
 ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
     2005
    
    
    2004First quarter
    
    $
    .1904
    
    
    $
    .1894Second quarter
    
    
    .1909
    
    
    
    .1897Third quarter
    
    
    .1914
    
    
    
    .1899Fourth quarter
    
    
    .1919
    
    
    
    .1902$
    .7646
    
    
    $
    .7592
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Total Number of Shares
    
    Maximum NumberPurchased as Part of
    
    (or Approximate Dollar Value)Total Number of

    

    Average Price

    
    Publicly Announced
    
    of Shares that may yet be purchasedPeriod
    

    Shares Purchased (1)

    

    Paid Per Share

    
    Plans or Programs (1)
    
    under the Plans or Programs (1)October 1, 2005 - October 31, 2005
    

    

    

    

    
    N/A
    
    N/ANovember 1, 2005 - November 30, 2005
    

    

    

    

    
    N/A
    
    N/ADecember 1, 2005 - December 31, 2005
    

    230,405

    

    $10.86

    
    N/A
    
    N/ATotal
    

    230,405
 (1)
    
    All shares were purchased pursuant to our redemption plan,
which we announced in November 1997. Under our redemption plan, we may elect to redeem shares subject to certain
conditions and limitations. The maximum amount of shares purchasable in any period depends on
the availability of funds generated by the Distribution Reinvestment and Share Purchase Plan
and other factors at the discretion of the Companys Board of Directors. The redemption plan
will terminate if and when our shares are listed on a national securities market. 
 ITEM 6. Selected Financial Data.
   For the years ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001OPERATING DATA:Revenues
    
    $
    134,369
    
    
    $
    130,237
    
    
    $
    127,424
    
    
    $
    110,139
    
    
    $
    64,532Income from continuing operations (1)
    
    
    46,909
    
    
    
    38,755
    
    
    
    33,641
    
    
    
    29,575
    
    
    
    18,041Basic earnings from continuing operations per share
    
    
    .69
    
    
    
    .58
    
    
    
    .51
    
    
    
    .44
    
    
    
    .35Net income
    
    
    47,249
    
    
    
    38,940
    
    
    
    33,820
    
    
    
    30,266
    
    
    
    18,377Basic earnings per share
    
    
    .69
    
    
    
    .58
    
    
    
    .51
    
    
    
    .45
    
    
    
    .36Cash distributions paid
    
    
    51,905
    
    
    
    50,973
    
    
    
    50,173
    
    
    
    48,581
    
    
    
    32,811Cash distributions declared per share
    
    
    .7646
    
    
    
    .7592
    
    
    
    .7552
    
    
    
    .7493
    
    
    
    .7075Payment of mortgage principal (2)
    
    
    12,433
    
    
    
    11,046
    
    
    
    9,234
    
    
    
    6,543
    
    
    
    2,557BALANCE SHEET DATA:Total assets
    
    $
    1,295,036
    
    
    $
    1,346,355
    
    
    $
    1,345,747
    
    
    $
    1,319,897
    
    
    $
    1,097,238Long-term obligations (3)
    
    
    663,530
    
    
    
    707,610
    
    
    
    710,346
    
    
    
    678,401
    
    
    
    471,942
 (1)
    
    Includes loss from sale of real estate in 2001.(2)
    
    Represents scheduled mortgage principal paid.(3)
    
    Represents mortgage obligations and deferred acquisition fee installments that are due after
more than one year. 
 ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
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2005
    
    
    2004
    
    
    2003Rental income
    
    $
    115,848
    
    
    $
    113,228
    
    
    $
    108,282Interest income from direct financing leases
    
    
    14,112
    
    
    
    13,430
    
    
    
    13,010$
    129,960
    
    
    $
    126,658
    
    
    $
    121,292
  2005
    
    
    %
    
    
    2004
    
    
    %
    
    
    2003
    
    
    %Carrefour France, SAS (a) (b)
    
    $
    14,460
    
    
    
    11
    %
    
    $
    13,696
    
    
    
    11
    %
    
    $
    11,597
    
    
    
    10
    %Petsmart, Inc. (c)
    
    
    8,303
    
    
    
    6
    
    
    
    8,303
    
    
    
    7
    
    
    
    8,303
    
    
    
    7Federal Express Corporation (c)
    
    
    6,742
    
    
    
    5
    
    
    
    6,669
    
    
    
    5
    
    
    
    6,596
    
    
    
    5Nortel Networks Limited
    
    
    6,001
    
    
    
    5
    
    
    
    6,001
    
    
    
    5
    
    
    
    6,001
    
    
    
    5Atrium Companies, Inc.
    
    
    4,787
    
    
    
    3
    
    
    
    4,574
    
    
    
    4
    
    
    
    4,457
    
    
    
    4Caremark Rx, Inc.
    
    
    4,300
    
    
    
    3
    
    
    
    4,300
    
    
    
    3
    
    
    
    4,300
    
    
    
    4Tower Automotive, Inc. (d)
    
    
    4,099
    
    
    
    3
    
    
    
    3,895
    
    
    
    3
    
    
    
    3,895
    
    
    
    3Katun Corporation (b)
    
    
    3,815
    
    
    
    3
    
    
    
    3,815
    
    
    
    3
    
    
    
    3,739
    
    
    
    3Dicks Sporting Goods, Inc.
    
    
    3,697
    
    
    
    3
    
    
    
    3,811
    
    
    
    3
    
    
    
    3,811
    
    
    
    3McLane Company Food Service Inc.
    
    
    3,601
    
    
    
    3
    
    
    
    3,560
    
    
    
    3
    
    
    
    3,522
    
    
    
    3Metaldyne Company LLC
    
    
    3,553
    
    
    
    3
    
    
    
    3,307
    
    
    
    3
    
    
    
    3,207
    
    
    
    2Collins & Aikman Corporation
    
    
    3,473
    
    
    
    3
    
    
    
    3,373
    
    
    
    3
    
    
    
    3,296
    
    
    
    2Perkin Elmer, Inc. (b)
    
    
    3,370
    
    
    
    2
    
    
    
    3,394
    
    
    
    3
    
    
    
    2,985
    
    
    
    2APW North America Inc.
    
    
    3,027
    
    
    
    2
    
    
    
    2,954
    
    
    
    2
    
    
    
    2,857
    
    
    
    2Amerix Corp.
    
    
    2,569
    
    
    
    2
    
    
    
    2,497
    
    
    
    2
    
    
    
    2,477
    
    
    
    2Gibson Guitar Corp.
    
    
    2,566
    
    
    
    2
    
    
    
    2,529
    
    
    
    2
    
    
    
    2,489
    
    
    
    2Builders FirstSource, Inc.
    
    
    2,521
    
    
    
    2
    
    
    
    2,497
    
    
    
    2
    
    
    
    2,425
    
    
    
    2Mayo Foundation (e)
    
    
    2,421
    
    
    
    2
    
    
    
    2,421
    
    
    
    2
    
    
    
    2,421
    
    
    
    2Gerber Scientific, Inc.
    
    
    2,361
    
    
    
    2
    
    
    
    2,276
    
    
    
    2
    
    
    
    2,202
    
    
    
    2Waddington North America, Inc.
    
    
    2,321
    
    
    
    2
    
    
    
    2,280
    
    
    
    2
    
    
    
    2,038
    
    
    
    2Buffets, Inc.
    
    
    2,280
    
    
    
    2
    
    
    
    2,272
    
    
    
    2
    
    
    
    2,224
    
    
    
    2Institutional Jobbers Company
    
    
    2,271
    
    
    
    2
    
    
    
    2,271
    
    
    
    2
    
    
    
    2,271
    
    
    
    2Best Buy Co.
    
    
    2,235
    
    
    
    2
    
    
    
    2,004
    
    
    
    2
    
    
    
    2,004
    
    
    
    2Consolidated Theatres Holding, G.P.
    
    
    2,092
    
    
    
    2
    
    
    
    1,759
    
    
    
    1
    
    
    
    1,733
    
    
    
    1Career Education Corp. (f)
    
    
    2,018
    
    
    
    1
    
    
    
    1,967
    
    
    
    1
    
    
    
    978
    
    
    
    1Other (c) (b)
    
    
    31,077
    
    
    
    24
    
    
    
    30,233
    
    
    
    22
    
    
    
    29,464
    
    
    
    25$
    129,960
    
    
    
    100
    %
    
    $
    126,658
    
    
    
    100
    %
    
    $
    121,292
    
    
    
    100
    %
 (a)
    
    An expansion at this property was completed in July 2003. An additional expansion was
completed in July 2005.(b)
    
    Revenue amounts are subject to fluctuations in foreign currency exchange rates.(c)
    
    Includes lease revenues applicable to minority interests. Minority interests included in the
consolidated amounts above total $8,040, $7,975 and $7,838 for the years ended December 31,
2005, 2004 and 2003, respectively.(d)
    
    Tower Automotive filed for Chapter 11 bankruptcy protection in February 2005.(e)
    
    Lease was assumed from Celestica Corporation effective January 1, 2004.(f)
    
    Investment was placed into service in June 2003. 24




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2005
    
    
    %
    
    
    2004
    
    
    %
    
    
    2003
    
    
    %Starmark Camhood, L.L.C. (a)
    
    $
    7,461
    
    
    
    22
    %
    
    $
    7,492
    
    
    
    22
    %
    
    $
    6,713
    
    
    
    22
    %Clear Channel Communications, Inc.
    
    
    5,660
    
    
    
    16
    
    
    
    5,660
    
    
    
    17
    
    
    
    5,660
    
    
    
    18True Value Company (b)
    
    
    5,065
    
    
    
    14
    
    
    
    5,065
    
    
    
    15
    
    
    
    5,065
    
    
    
    17Advanced Micro Devices, Inc. (b)
    
    
    3,484
    
    
    
    10
    
    
    
    3,259
    
    
    
    10
    
    
    
    3,259
    
    
    
    11Mercury Partners and U-Haul Moving Partners (c)
    
    
    3,294
    
    
    
    9
    
    
    
    2,215
    
    
    
    7
    
    
    
    
    
    
    
    Applied Materials, Inc.
    
    
    3,277
    
    
    
    9
    
    
    
    3,249
    
    
    
    10
    
    
    
    3,097
    
    
    
    10CheckFree Holdings, Inc. (b)
    
    
    2,247
    
    
    
    6
    
    
    
    2,180
    
    
    
    6
    
    
    
    2,128
    
    
    
    7Special Devices, Inc. (b)
    
    
    2,088
    
    
    
    6
    
    
    
    2,039
    
    
    
    6
    
    
    
    1,995
    
    
    
    6Compucom Systems, Inc. (b)
    
    
    1,489
    
    
    
    4
    
    
    
    1,408
    
    
    
    4
    
    
    
    1,408
    
    
    
    5Textron, Inc.
    
    
    1,333
    
    
    
    4
    
    
    
    1,240
    
    
    
    3
    
    
    
    1,240
    
    
    
    4Dicks Sporting Goods, Inc. (d)
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    35,511
    
    
    
    100
    %
    
    $
    33,807
    
    
    
    100
    %
    
    $
    30,565
    
    
    
    100
    %
 
 (a)
    
    The Starmark interest was acquired in February 2003.(b)
    
    Increase is due to a rent increase.(c)
    
    Interest in this investment was acquired in April 2004.(d)
    
    Investment reclassified to an equity investment in November 2005 as a result of a transaction
with CPA®:16  Global.     
    
    In February 2005, a tenant exercised a five-year renewal option on its lease for
property in California, which resulted in an increase in annual lease revenue of
approximately $250.
    
    In July 2005, we acquired a $1,993 expansion at an existing property in France, which
will generate additional annual rent of approximately $180 subject to fluctuations in
foreign exchange rates.
    
    In September 2005, we entered into a net lease agreement with a new tenant for the
remaining space in a property in Utah, which had been partially vacant. We expect this
lease to generate annual lease revenues of approximately $490 upon completion of
improvements at the property.
    
    In December 2005, we entered into a transaction with
CPA®:16  Global, an
affiliate, where
CPA®:16  Global acquired a 55.1% interest in our property
leased to Dicks Sporting Goods, Inc. (see Item 1  Significant Developments During 2005).
In connection with this transaction, we have reclassified this property as an equity
investment.
    
    During 2005, our tenants Tower Automotive, Collins and Aikman and Meridian Automotive,
which combined contributed approximately $4,100, $3,475 and $1,215 in 2005 lease revenues,
respectively, filed for bankruptcy protection. We cannot predict whether either company
will affirm or terminate its lease in connection with its bankruptcy reorganization.
    25




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
    
    A reduction in interest expense from the prepayment of outstanding mortgage obligations in 2005. We anticipate annual
savings of approximately $725 as a result of these prepayments.
    
    Recent lease activity at several properties which we expect will contribute an additional cash flow of approximately $920.
    
    Scheduled rent increases on several properties during 2005 and 2006 should result in additional cash from operations.
   28




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##### Table of Contents



Total
    
    
    Less than 1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    More than 5 yearsMortgage notes payable  Principal
    
    $
    663,098
    
    
    $
    12,478
    
    
    $
    33,004
    
    
    $
    125,516
    
    
    $
    492,100Mortgage notes payable  Interest
    
    
    307,500
    
    
    
    49,263
    
    
    
    95,464
    
    
    
    84,289
    
    
    
    78,484Deferred acquisition fees  Principal
    
    
    16,423
    
    
    
    3,514
    
    
    
    6,759
    
    
    
    4,668
    
    
    
    1,482Deferred acquisition fees  Interest
    
    
    3,013
    
    
    
    985
    
    
    
    1,338
    
    
    
    571
    
    
    
    119Subordinated disposition fees (1)
    
    
    412
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412Operating leases (2)
    
    
    6,790
    
    
    
    424
    
    
    
    1,150
    
    
    
    1,276
    
    
    
    3,940$
    997,236
    
    
    $
    66,664
    
    
    $
    137,715
    
    
    $
    216,320
    
    
    $
    576,537
 
 (1)
    
    Payable to the advisor, subject to meeting contingencies, in connection with any liquidity
event.(2)
    
    Operating lease obligations consist primarily of our share of 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. Such amounts are allocated among the
entities based on gross revenues and are adjusted quarterly.       29




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
    
    Our equity investment is not sufficient to allow the entity to finance its activities without additional third party financing;
    
    We do not have the direct or indirect ability to make decisions about the entitys business;
    
    We are not obligated to absorb the expected losses of the entity;
    
    We do not have the right to receive the expected residual returns of the entity; and
    
    Our voting rights are not proportionate to our economic interests, and substantially all
of the entitys activities either involve or are conducted on behalf of an investor that has
disproportionately few voting rights.
     31




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ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.
      2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueFixed rate debt
    
    $
    12,015
    
    
    $
    12,927
    
    
    $
    19,049
    
    
    $
    52,024
    
    
    $
    72,299
    
    
    $
    468,209
    
    
    $
    636,523
    
    
    $
    643,533Weighted average interest rate
    
    
    7.15
    %
    
    
    7.15
    %
    
    
    7.31
    %
    
    
    8.10
    %
    
    
    8.10
    %
    
    
    7.27
    %Variable rate debt
    
    $
    463
    
    
    $
    497
    
    
    $
    531
    
    
    $
    576
    
    
    $
    617
    
    
    $
    23,891
    
    
    $
    26,575
    
    
    $
    26,575
  33




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##### Table of Contents



2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    TotalRental income (1)
    
    $
    13,791
    
    
    $
    13,791
    
    
    $
    13,791
    
    
    $
    13,791
    
    
    $
    13,791
    
    
    $
    45,877
    
    
    $
    114,832Interest income from direct financing leases (1)
    
    
    949
    
    
    
    1,037
    
    
    
    1,037
    
    
    
    1,037
    
    
    
    1,133
    
    
    
    30,448
    
    
    
    35,641
  2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    TotalFixed rate debt (1)
    
    $
    4,526
    
    
    $
    4,836
    
    
    $
    5,157
    
    
    $
    5,422
    
    
    $
    5,746
    
    
    $
    98,058
    
    
    $
    123,745Variable rate debt (1)
    
    
    91
    
    
    
    98
    
    
    
    105
    
    
    
    114
    
    
    
    122
    
    
    
    5,648
    
    
    
    6,178
 
 (1)
    
    Based on December 31, 2005 exchange rate. Contractual rents and mortgage notes are
denominated in the functional currency of the country of each property. 
 ITEM 8. Financial Statements and Supplementary Data.
           34




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December 31,2005
    
    
    2004ASSETS:Real estate, net
    
    $
    943,637
    
    
    $
    999,861Net investment in direct financing leases
    
    
    115,513
    
    
    
    116,343Equity investments
    
    
    143,417
    
    
    
    134,905Asset held for sale
    
    
    
    
    
    
    3,797Cash and cash equivalents
    
    
    37,871
    
    
    
    36,395Marketable securities
    
    
    9,267
    
    
    
    13,904Other assets, net
    
    
    45,331
    
    
    
    41,150Total assets
    
    $
    1,295,036
    
    
    $
    1,346,355LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS EQUITY:Liabilities:Mortgage notes payable
    
    $
    663,098
    
    
    $
    701,181Mortgage note payable on asset held for sale
    
    
    
    
    
    
    2,190Accrued interest
    
    
    4,358
    
    
    
    4,612Due to affiliates
    
    
    4,894
    
    
    
    4,925Accounts payable and accrued expenses
    
    
    5,506
    
    
    
    3,760Prepaid rental income and security deposits
    
    
    19,514
    
    
    
    22,233Deferred acquisition fees payable to affiliate
    
    
    16,424
    
    
    
    20,012Other liabilities
    
    
    1,163
    
    
    
    1,424Distributions payable
    
    
    13,103
    
    
    
    12,894Total liabilities
    
    
    728,060
    
    
    
    773,231Minority interest
    
    
    25,012
    
    
    
    26,426Commitments
and contingencies (Note 10)Shareholders equity:Common stock, $.001 par value; 120,000,000 shares authorized; 70,308,710 and 68,982,023
shares issued and outstanding at December 31, 2005 and 2004
    
    
    70
    
    
    
    69Additional paid-in capital
    
    
    636,009
    
    
    
    620,366Distributions in excess of accumulated earnings
    
    
    (81,166
    )
    
    
    (76,301
    )Accumulated other comprehensive income
    
    
    7,080
    
    
    
    13,621561,993
    
    
    
    557,755Less, treasury stock at cost, 2,028,584 and 1,191,490 shares at December 31, 2005 and 2004
    
    
    (20,029
    )
    
    
    (11,057
    )Total shareholders equity
    
    
    541,964
    
    
    
    546,698Total liabilities, minority interest and shareholders equity
    
    $
    1,295,036
    
    
    $
    1,346,355
  37




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##### Table of Contents



For the years ended December 312005
    
    
    2004
    
    
    2003REVENUES:Rental income
    
    $
    115,848
    
    
    $
    113,228
    
    
    $
    108,282Interest income from direct financing leases
    
    
    14,112
    
    
    
    13,430
    
    
    
    13,010Other operating income
    
    
    4,409
    
    
    
    3,579
    
    
    
    6,132134,369
    
    
    
    130,237
    
    
    
    127,424OPERATING EXPENSES:Depreciation
    
    
    (23,500
    )
    
    
    (23,426
    )
    
    
    (22,728
    )Property expenses
    
    
    (25,009
    )
    
    
    (22,559
    )
    
    
    (20,986
    )General and administrative
    
    
    (6,376
    )
    
    
    (6,155
    )
    
    
    (8,404
    )Impairment charges
    
    
    
    
    
    
    
    
    
    
    (3,103
    )(54,885
    )
    
    
    (52,140
    )
    
    
    (55,221
    )OTHER INCOME AND EXPENSES:Income from equity investments
    
    
    15,798
    
    
    
    14,304
    
    
    
    12,992Other interest income
    
    
    2,232
    
    
    
    1,239
    
    
    
    1,630Minority interest in income
    
    
    (2,153
    )
    
    
    (1,805
    )
    
    
    (1,489
    )Gain on sale of real estate
    
    
    269
    
    
    
    
    
    
    
    Gain (loss) on derivative instruments, net
    
    
    5,271
    
    
    
    (719
    )
    
    
    (20
    )(Loss) gain on foreign currency transactions, net
    
    
    (446
    )
    
    
    1,438
    
    
    
    1,040Interest expense
    
    
    (53,546
    )
    
    
    (53,799
    )
    
    
    (52,715
    )(32,575
    )
    
    
    (39,342
    )
    
    
    (38,562
    )Income from continuing operations
    
    
    46,909
    
    
    
    38,755
    
    
    
    33,641DISCONTINUED OPERATIONS:Income from operations of discontinued properties
    
    
    144
    
    
    
    185
    
    
    
    179Gain on sale of real estate
    
    
    196
    
    
    
    
    
    
    
    Income from discontinued operations
    
    
    340
    
    
    
    185
    
    
    
    179NET INCOME
    
    $
    47,249
    
    
    $
    38,940
    
    
    $
    33,820BASIC EARNINGS PER SHARE:Income from continuing operations
    
    $
    .69
    
    
    $
    .58
    
    
    $
    .51Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    .69
    
    
    $
    .58
    
    
    $
    .51DISTRIBUTIONS DECLARED PER SHARE
    
    $
    .7646
    
    
    $
    .7592
    
    
    $
    .7552WEIGHTED
AVERAGE SHARES OUTSTANDING  BASIC
    
    
    68,208,208
    
    
    
    67,447,812
    
    
    
    66,638,026
  38




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##### Table of Contents



For the years ended December 31,2005
    
    
    2004
    
    
    2003Net income
    
    $
    47,249
    
    
    $
    38,940
    
    
    $
    33,820Other comprehensive income:Foreign currency translation adjustment
    
    
    (5,745
    )
    
    
    2,254
    
    
    
    4,396Unrealized appreciation on marketable securities
    
    
    (796
    )
    
    
    217
    
    
    
    641(6,541
    )
    
    
    2,471
    
    
    
    5,037Comprehensive income:
    
    $
    40,708
    
    
    $
    41,411
    
    
    $
    38,857
  
 Distributions
    
    
    Accumulatedin Excess of
    
    
    OtherCommon
    
    
    Additional
    
    
    Accumulated
    
    
    Comprehensive
    
    
    TreasuryStock
    
    
    Paid-in Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    TotalBalance at January 1, 2003
    
    $
    67
    
    
    $
    597,852
    
    
    $
    (47,508
    )
    
    $
    6,113
    
    
    $
    (4,635
    )
    
    $
    551,889858,550 shares issued $.001 par, at
$10.00 per share, net of offering costs
    
    
    1
    
    
    
    8,528
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,529Distributions declared
    
    
    
    
    
    
    
    
    
    
    (50,348
    )
    
    
    
    
    
    
    
    
    
    
    (50,348
    )Purchase of treasury stock, 281,731 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,498
    )
    
    
    (2,498
    )Net income
    
    
    
    
    
    
    
    
    
    
    33,820
    
    
    
    
    
    
    
    
    
    
    
    33,820Change in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,037
    
    
    
    
    
    
    
    5,037Balance at December 31, 2003
    
    
    68
    
    
    
    606,380
    
    
    
    (64,036
    )
    
    
    11,150
    
    
    
    (7,133
    )
    
    
    546,4291,287,321 shares issued $.001 par, at
$11.30 per share, net of offering costs
    
    
    1
    
    
    
    13,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,987Distributions declared
    
    
    
    
    
    
    
    
    
    
    (51,205
    )
    
    
    
    
    
    
    
    
    
    
    (51,205
    )Purchase of treasury stock, 388,848 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,924
    )
    
    
    (3,924
    )Net income
    
    
    
    
    
    
    
    
    
    
    38,940
    
    
    
    
    
    
    
    
    
    
    
    38,940Change in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,471
    
    
    
    
    
    
    
    2,471Balance at December 31, 2004
    
    
    69
    
    
    
    620,366
    
    
    
    (76,301
    )
    
    
    13,621
    
    
    
    (11,057
    )
    
    
    546,6981,326,687 shares issued $.001 par, at
$12.10 per share, net of offering costs
    
    
    1
    
    
    
    15,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,644Distributions declared
    
    
    
    
    
    
    
    
    
    
    (52,114
    )
    
    
    
    
    
    
    
    
    
    
    (52,114
    )Purchase of treasury stock, 837,094 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,972
    )
    
    
    (8,972
    )Net income
    
    
    
    
    
    
    
    
    
    
    47,249
    
    
    
    
    
    
    
    
    
    
    
    47,249Change in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,541
    )
    
    
    
    
    
    
    (6,541
    )Balance at December 31, 2005
    
    $
    70
    
    
    $
    636,009
    
    
    $
    (81,166
    )
    
    $
    7,080
    
    
    $
    (20,029
    )
    
    $
    541,964
  39




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For the years ended December 31,2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net income
    
    $
    47,249
    
    
    $
    38,940
    
    
    $
    33,820Adjustments to reconcile net income to net cash provided by continuing operations:Depreciation and amortization
    
    
    24,597
    
    
    
    24,642
    
    
    
    23,964Straight-line rent adjustments
    
    
    (3,173
    )
    
    
    (4,349
    )
    
    
    (3,965
    )Income from equity investments in excess of distributions received
    
    
    30
    
    
    
    (1,162
    )
    
    
    (1,529
    )Minority interest in income
    
    
    2,153
    
    
    
    1,805
    
    
    
    1,489Issuance of shares to affiliate in satisfaction of current and accrued performance fees
    
    
    8,947
    
    
    
    8,289
    
    
    
    7,105Impairment charge on real estate
    
    
    
    
    
    
    
    
    
    
    3,103(Decrease) increase in prepaid rents and security deposits
    
    
    (2,232
    )
    
    
    2,584
    
    
    
    (1,727
    )Realized gain on foreign currency transactions
    
    
    (334
    )
    
    
    (1,357
    )
    
    
    (349
    )Realized gain on sale of warrants
    
    
    (2,192
    )
    
    
    
    
    
    
    Reversal of unrealized loss on warrants
    
    
    7
    
    
    
    
    
    
    
    Unrealized (gain) loss on derivatives, net
    
    
    (3,086
    )
    
    
    719
    
    
    
    20Unrealized loss (gain) on foreign currency transactions, net
    
    
    780
    
    
    
    (81
    )
    
    
    (691
    )Settlement proceeds received in the form of marketable securities
    
    
    (223
    )
    
    
    
    
    
    
    Gain on sale of real estate
    
    
    (465
    )
    
    
    
    
    
    
    Change in other operating assets and liabilities, net
    
    
    (1,163
    )
    
    
    560
    
    
    
    (1,830
    )Net cash provided by operating activities
    
    
    70,895
    
    
    
    70,590
    
    
    
    59,410Cash flows from investing activities:Equity distributions received in excess of equity income
    
    
    1,837
    
    
    
    2,412
    
    
    
    1,178Capital distributions received from equity investments
    
    
    
    
    
    
    
    
    
    
    8,722Purchases of real estate and equity investments and other capitalized costs, net (a)
    
    
    (3,279
    )
    
    
    (17,195
    )
    
    
    (50,385
    )Value added taxes recoverable on purchase of real estate
    
    
    
    
    
    
    
    
    
    
    827Purchase of securities
    
    
    
    
    
    
    (10,825
    )
    
    
    (15,000
    )Proceeds from sale of securities
    
    
    9,432
    
    
    
    19,775
    
    
    
    21,059Proceeds from sale of real estate
    
    
    5,808
    
    
    
    
    
    
    
    Payment of deferred acquisition fees
    
    
    (3,420
    )
    
    
    (3,266
    )
    
    
    (2,373
    )Net cash provided by (used in) investing activities
    
    
    10,378
    
    
    
    (9,099
    )
    
    
    (35,972
    )Cash flows from financing activities:Distributions paid
    
    
    (51,905
    )
    
    
    (50,973
    )
    
    
    (50,173
    )Proceeds from stock issuance, net of costs
    
    
    6,697
    
    
    
    5,698
    
    
    
    1,424Prepayment of mortgage principal
    
    
    (8,512
    )
    
    
    
    
    
    
    Release of mortgage funds by lenders
    
    
    
    
    
    
    167
    
    
    
    2,776Proceeds from mortgages
    
    
    
    
    
    
    
    
    
    
    21,582Repayment of proceeds from note
    
    
    
    
    
    
    (1,617
    )
    
    
    1,617Payments of mortgage principal
    
    
    (12,433
    )
    
    
    (11,046
    )
    
    
    (9,234
    )Purchase of treasury stock
    
    
    (8,972
    )
    
    
    (3,924
    )
    
    
    (2,498
    )Distributions paid to minority interest partner, net
    
    
    (3,579
    )
    
    
    (2,735
    )
    
    
    (3,340
    )Net cash used in financing activities
    
    
    (78,704
    )
    
    
    (64,430
    )
    
    
    (37,846
    )Effect of exchange rates on cash
    
    
    (1,093
    )
    
    
    609
    
    
    
    1,035Net increase (decrease) in cash and cash equivalents
    
    
    1,476
    
    
    
    (2,330
    )
    
    
    (13,373
    )Cash and cash equivalents, beginning of year
    
    
    36,395
    
    
    
    38,725
    
    
    
    52,098Cash and cash equivalents, end of year
    
    $
    37,871
    
    
    $
    36,395
    
    
    $
    38,725
  (a)
    
    Included in the cost basis of real estate and equity investments acquired in 2004 and 2003
are deferred acquisition fees payable to W. P. Carey & Co., LLC of $749 and $1,733,
respectively. No such fees were incurred in 2005.
    40




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##### Table of Contents




    
    The Companys equity investment is not sufficient to allow the entity to finance its
activities without additional third party financing;
    
    The Company does not have the direct or indirect ability to make decisions about the entitys business;
    
    The Company is not obligated to absorb the expected losses of the entity;
    
    The Company does not have the right to receive the expected residual returns of the entity; and
    
    The Companys voting rights are not proportionate to its economic interests, and
substantially all of the entitys activities either involve or are conducted on behalf of an
investor that has disproportionately few voting rights.
   41




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December 31,2005
    
    
    2004Cost
    
    $
    1,050,368
    
    
    $
    1,086,073Less: Accumulated depreciation
    
    
    (106,731
    )
    
    
    (86,212
    )$
    943,637
    
    
    $
    999,861
  Year ending December 31,2006
    
    $
    103,3062007
    
    
    104,6212008
    
    
    104,2762009
    
    
    104,0002010
    
    
    101,120Thereafter through 2023
    
    
    813,717
   December 31,2005
    
    
    2004Minimum lease payments receivable
    
    $
    221,136
    
    
    $
    233,681Unguaranteed residual value
    
    
    111,752
    
    
    
    112,688332,888
    
    
    
    346,369Less: unearned income
    
    
    (217,375
    )
    
    
    (230,026
    )$
    115,513
    
    
    $
    116,343
 48




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Year ending December 31,2006
    
    $
    12,6362007
    
    
    12,7242008
    
    
    12,7242009
    
    
    12,7242010
    
    
    12,891Thereafter through 2031
    
    
    157,435
     December 31,2005
    
    
    2004Assets (primarily real estate)
    
    $
    1,084,354
    
    
    $
    1,122,692Liabilities (primarily mortgage notes payable)
    
    
    (652,119
    )
    
    
    (682,377
    )Partners and Members equity
    
    $
    432,235
    
    
    $
    440,315Companys share of equity investees net assets
    
    $
    143,417
    
    
    $
    134,905
 Years ended December 31,2005
    
    
    2004
    
    
    2003Revenues (primarily rental income and interest income from direct financing leases)
    
    $
    117,156
    
    
    $
    105,488
    
    
    $
    80,329Expenses (primarily interest on mortgage and depreciation)
    
    
    (69,698
    )
    
    
    (64,085
    )
    
    
    (46,429
    )Net income
    
    $
    47,458
    
    
    $
    41,403
    
    
    $
    33,900Companys share of net income from equity investments
    
    $
    15,798
    
    
    $
    14,304
    
    
    $
    12,992
   49




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® ® ® ®
   ® ® ® ® ®
 ® ®
 ® ®
 Actual
    
    
    1% Adverse Change
    
    
    2% Adverse ChangeFair value of CPA® Interests
    
    $
    6,434
    
    
    $
    6,163
    
    
    $
    5,907
  50




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Years Ending December 31,
    
    Total Debt
    
    
    Fixed Rate Debt
    
    
    Variable Rate Debt2006
    
    $
    12,478
    
    
    $
    12,015
    
    
    $
    4632007
    
    
    13,424
    
    
    
    12,927
    
    
    
    4972008
    
    
    19,580
    
    
    
    19,049
    
    
    
    5312009
    
    
    52,600
    
    
    
    52,024
    
    
    
    5762010
    
    
    72,916
    
    
    
    72,299
    
    
    
    617Thereafter through 2026
    
    
    492,100
    
    
    
    468,209
    
    
    
    23,891Total
    
    $
    663,098
    
    
    $
    636,523
    
    
    $
    26,575
     ®
 ® ®
 51




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® ® ® ®
 ® ® ® ®
      2005
    
    
    2004
    
    
    2003Ordinary income
    
    $
    .56
    
    
    $
    .57
    
    
    $
    .57Capital gains
    
    
    .04
    
    
    
    
    
    
    
    Return of capital
    
    
    .16
    
    
    
    .19
    
    
    
    .19$
    .76
    
    
    $
    .76
    
    
    $
    .76
  52




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2005
    
    
    2004Unrealized appreciation on marketable securities
    
    $
    319
    
    
    $
    1,115Foreign currency translation adjustment
    
    
    6,761
    
    
    
    12,506Accumulated other comprehensive income
    
    $
    7,080
    
    
    $
    13,621
      Years ended December 31,2005
    
    
    2004
    
    
    2003Revenues (primarily rental revenues and interest income)
    
    $
    217
    
    
    $
    423
    
    
    $
    423Expenses (primarily interest on mortgages, depreciation and property expenses)
    
    
    (73
    )
    
    
    (238
    )
    
    
    (244
    )Gain on sale of real estate
    
    
    196
    
    
    
    
    
    
    
    Income from discontinued operations
    
    $
    340
    
    
    $
    185
    
    
    $
    179
    Domestic
    
    
    Foreign (1)
    
    
    Total CompanyRevenues
    
    $
    110,929
    
    
    $
    23,440
    
    
    $
    134,369Operating expenses
    
    
    (48,812
    )
    
    
    (6,857
    )
    
    
    (55,669
    )Income from equity investments
    
    
    15,798
    
    
    
    
    
    
    
    15,798Interest expense, net
    
    
    (41,648
    )
    
    
    (8,882
    )
    
    
    (50,530
    )Other, net (2)
    
    
    3,382
    
    
    
    (441
    )
    
    
    2,941Income from continuing operations
    
    $
    39,649
    
    
    $
    7,260
    
    
    $
    46,909
 53




---



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Domestic
    
    
    Foreign (1)
    
    
    Total CompanyTotal equity investments
    
    $
    143,417
    
    
    $
    
    
    
    $
    143,417Total long-lived assets
    
    
    1,027,312
    
    
    
    175,255
    
    
    
    1,202,567Total assets
    
    
    1,112,722
    
    
    
    182,314
    
    
    
    1,295,036
  Domestic
    
    
    Foreign (1)
    
    
    Total CompanyRevenues
    
    $
    107,762
    
    
    $
    22,475
    
    
    $
    130,237Operating expenses
    
    
    (45,484
    )
    
    
    (6,656
    )
    
    
    (52,140
    )Income from equity investments
    
    
    14,304
    
    
    
    
    
    
    
    14,304Interest expense, net
    
    
    (43,441
    )
    
    
    (9,119
    )
    
    
    (52,560
    )Other, net (2)
    
    
    (1,147
    )
    
    
    61
    
    
    
    (1,086
    )Income from continuing operations
    
    $
    31,994
    
    
    $
    6,761
    
    
    $
    38,755Total equity investments
    
    $
    134,905
    
    
    $
    
    
    
    $
    134,905Total long-lived assets
    
    
    1,048,775
    
    
    
    202,334
    
    
    
    1,251,109Total assets
    
    
    1,130,852
    
    
    
    215,503
    
    
    
    1,346,355
  Domestic
    
    
    Foreign (1)
    
    
    Total CompanyRevenues
    
    $
    107,630
    
    
    $
    19,794
    
    
    $
    127,424Operating expenses
    
    
    (48,951
    )
    
    
    (6,270
    )
    
    
    (55,221
    )Income from equity investments
    
    
    12,992
    
    
    
    
    
    
    
    12,992Interest expense, net
    
    
    (42,802
    )
    
    
    (8,283
    )
    
    
    (51,085
    )Other, net (2)
    
    
    (469
    )
    
    
    
    
    
    
    (469
    )Income from continuing operations
    
    $
    28,400
    
    
    $
    5,241
    
    
    $
    33,641Total equity investments
    
    $
    120,388
    
    
    $
    
    
    
    $
    120,388Total long-lived assets
    
    
    1,055,321
    
    
    
    190,412
    
    
    
    1,245,733Total assets
    
    
    1,143,581
    
    
    
    202,166
    
    
    
    1,345,747
 
 (1)
    
    Consists of operations in the United Kingdom, France, Finland and The Netherlands.(2)
    
    Consists of minority interest, gain on sale of real estate, gains (losses) on derivative
instruments and foreign currency transactions.  For the three months endedMarch 31, 2005
    
    June 30, 2005
    
    September 30, 2005
    
    December 31, 2005Revenues
    
    $
    33,212
    
    
    $
    33,205
    
    
    $
    35,322
    
    
    $
    32,630Operating expenses
    
    
    (13,120
    )
    
    
    (13,664
    )
    
    
    (15,588
    )
    
    
    (12,513
    )Net income
    
    
    13,011
    
    
    
    10,667
    
    
    
    10,839
    
    
    
    12,732Earnings per share  basic
    
    
    .19
    
    
    
    .16
    
    
    
    .16
    
    
    
    .18Distributions declared per share
    
    
    .1904
    
    
    
    .1909
    
    
    
    .1914
    
    
    
    .1919
 For the three months endedMarch 31, 2004
    
    June 30, 2004
    
    September 30, 2004
    
    December 31, 2004Revenues
    
    $
    31,752
    
    
    $
    32,354
    
    
    $
    33,568
    
    
    $
    32,563Operating expenses
    
    
    (12,503
    )
    
    
    (13,186
    )
    
    
    (13,902
    )
    
    
    (12,549
    )Net income
    
    
    8,989
    
    
    
    8,905
    
    
    
    9,903
    
    
    
    11,143Earnings per share  basic
    
    
    .13
    
    
    
    .13
    
    
    
    .15
    
    
    
    .17Distributions declared per share
    
    
    .1894
    
    
    
    .1897
    
    
    
    .1899
    
    
    
    .1902
 54




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55




---



##### Table of Contents



Life on whichDepreciationCosts
    
    
    Increase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    in LatestCapitalized
    
    
    (Decrease) in
    
    
    Gross Amount at which Carried
    
    
    
    
    
    
    
    
    Statement ofInitial Cost to Company
    
    
    Subsequent to
    
    
    Net Investment
    
    
    at Close of Period
    
    
    Accumulated
    
    
    
    
    IncomeDescription
    
    Encumbrances
    
    
    Land
    
    
    Buildings
    
    
    Acquisition (a)
    
    
    (b)
    
    
    Land
    
    
    Buildings
    
    
    Total
    
    
    Depreciation (d)
    
    
    Date Acquired
    
    is ComputedOperating Method:Industrial facility in Daleville, Indiana
    
    
    
    
    
    $
    2,100,000
    
    
    $
    5,439,267
    
    
    
    
    
    
    $
    (3,810,000
    )
    
    $
    2,100,000
    
    
    $
    1,629,267
    
    
    $
    3,729,267
    
    
    $
    644,529
    
    
    June 29, 1998
    
    40 yrs.Retail store in Torrance, California
    
    
    
    
    
    
    13,059,980
    
    
    
    6,933,851
    
    
    $
    45,914
    
    
    
    
    
    
    
    13,059,980
    
    
    
    6,979,765
    
    
    
    20,039,745
    
    
    
    1,300,887
    
    
    July 28, 1998
    
    40 yrs.Industrial facility in San Clemente, California
    
    
    
    
    
    
    2,390,000
    
    
    
    
    
    
    
    8,957,798
    
    
    
    53,063
    
    
    
    2,390,000
    
    
    
    9,010,861
    
    
    
    11,400,861
    
    
    
    1,403,061
    
    
    July 29, 1998
    
    40 yrs.Industrial facility in Pittsburgh, Pennsylvania
    
    $
    3,766,503
    
    
    
    620,000
    
    
    
    6,186,283
    
    
    
    
    
    
    
    
    
    
    
    620,000
    
    
    
    6,186,283
    
    
    
    6,806,283
    
    
    
    1,089,044
    
    
    December 28, 1998
    
    40 yrs.Industrial and warehouse facilities in Burbank, California and Las Vegas, Nevada
    
    
    7,043,970
    
    
    
    3,860,000
    
    
    
    8,263,455
    
    
    
    
    
    
    
    
    
    
    
    3,860,000
    
    
    
    8,263,455
    
    
    
    12,123,455
    
    
    
    1,372,828
    
    
    March 31, 1999 andOctober 15, 1999
    
    40 yrs.Industrial facility in Gardena, California
    
    
    2,812,961
    
    
    
    2,340,000
    
    
    
    3,942,723
    
    
    
    
    
    
    
    (2,900,000
    )
    
    
    2,340,000
    
    
    
    1,042,723
    
    
    
    3,382,723
    
    
    
    53,222
    
    
    July 19, 1999
    
    40 yrs.Warehouse and distribution facilities in Burlington, New Jersey; Shawnee, Kansas and
Manassas, Virginia
    
    
    20,664,810
    
    
    
    3,604,000
    
    
    
    8,613,172
    
    
    
    21,321,241
    
    
    
    
    
    
    
    3,604,000
    
    
    
    29,934,413
    
    
    
    33,538,413
    
    
    
    4,381,776
    
    
    August 18, 1999
    
    40 yrs.Warehouse and distribution facility in Grand Rapids, Michigan
    
    
    5,694,028
    
    
    
    740,000
    
    
    
    3,042,828
    
    
    
    7,638,183
    
    
    
    
    
    
    
    740,000
    
    
    
    10,681,011
    
    
    
    11,421,011
    
    
    
    1,643,679
    
    
    August 18, 1999
    
    40 yrs.Land in Midlothian, Virginia
    
    
    2,024,645
    
    
    
    3,515,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,515,000
    
    
    
    
    
    
    
    3,515,000
    
    
    
    
    
    
    September 22, 1999
    
    N/AWarehouse
and distribution facilities in Harrisburg, North Carolina; Atlanta, Georgia; Cincinnati, Ohio and Elkwood, Virginia
    
    
    13,318,353
    
    
    
    3,929,891
    
    
    
    10,397,514
    
    
    
    8,476,016
    
    
    
    (1,951
    )
    
    
    3,945,275
    
    
    
    18,856,195
    
    
    
    22,801,470
    
    
    
    2,301,695
    
    
    June 29, 1999 andDecember 20, 2001
    
    40 yrs.Office facility in Columbia, Maryland
    
    
    13,434,459
    
    
    
    2,622,500
    
    
    
    20,232,580
    
    
    
    3,113,719
    
    
    
    
    
    
    
    2,622,500
    
    
    
    23,346,299
    
    
    
    25,968,799
    
    
    
    3,447,052
    
    
    November 1, 1999
    
    40 yrs.Industrial
facilities in Welcome, North Carolina; Murrysville, Pennsylvania and Wylie, Texas
    
    
    15,465,821
    
    
    
    1,596,442
    
    
    
    23,910,092
    
    
    
    322,771
    
    
    
    (125,206
    )
    
    
    1,596,442
    
    
    
    24,107,657
    
    
    
    25,704,099
    
    
    
    2,690,688
    
    
    November 18, 1999and December
1, 2001
    
    40 yrs.Sports facilities in Salt Lake City, Utah and St. Charles, Missouri
    
    
    6,802,219
    
    
    
    2,920,000
    
    
    
    8,659,950
    
    
    
    793,654
    
    
    
    
    
    
    
    2,920,000
    
    
    
    9,453,604
    
    
    
    12,373,604
    
    
    
    1,241,693
    
    
    December 29,
1999and December 28, 2000
    
    40 yrs.Warehouse and distribution facility in Tempe, Arizona
    
    
    3,198,751
    
    
    
    940,000
    
    
    
    4,557,382
    
    
    
    12,498
    
    
    
    
    
    
    
    940,000
    
    
    
    4,569,880
    
    
    
    5,509,880
    
    
    
    661,681
    
    
    January 12, 2000
    
    40 yrs.Warehouse and distribution facility in Rock Island, Illinois
    
    
    6,917,491
    
    
    
    500,000
    
    
    
    9,944,545
    
    
    
    1,887,506
    
    
    
    
    
    
    
    500,000
    
    
    
    11,832,051
    
    
    
    12,332,051
    
    
    
    1,504,227
    
    
    February 3, 2000
    
    40 yrs.Industrial facility in North Amityville, New York
    
    
    10,390,297
    
    
    
    2,932,000
    
    
    
    16,397,988
    
    
    
    17,904
    
    
    
    (4,119,723
    )
    
    
    1,482,000
    
    
    
    13,746,169
    
    
    
    15,228,169
    
    
    
    2,018,969
    
    
    February 29, 2000
    
    40 yrs.Warehouse and distribution facilities in Monon, Indiana; Champlin, Minnesota;
Robbinsville, New Jersey; Radford, Virginia and North Salt Lake City, Utah
    
    
    16,383,689
    
    
    
    4,580,000
    
    
    
    24,844,084
    
    
    
    14,784
    
    
    
    
    
    
    
    4,580,000
    
    
    
    24,858,868
    
    
    
    29,438,868
    
    
    
    3,495,778
    
    
    May 30, 2000
    
    40 yrs.Warehouse and distribution facility in Lakewood, New Jersey
    
    
    6,442,476
    
    
    
    710,000
    
    
    
    4,531,037
    
    
    
    3,438,798
    
    
    
    
    
    
    
    710,000
    
    
    
    7,969,835
    
    
    
    8,679,835
    
    
    
    1,019,616
    
    
    June 29, 2000
    
    40 yrs.Retail facilities in Kennesaw, Georgia and Leadwood, Kansas
    
    
    14,003,237
    
    
    
    6,230,000
    
    
    
    15,842,392
    
    
    
    107,525
    
    
    
    
    
    
    
    6,230,000
    
    
    
    15,949,917
    
    
    
    22,179,917
    
    
    
    2,209,728
    
    
    June 29, 2000
    
    40 yrs.Land in Scottsdale, Arizona
    
    
    8,388,413
    
    
    
    14,600,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,600,000
    
    
    
    
    
    
    
    14,600,000
    
    
    
    
    
    
    September 21, 2000
    
    N/AIndustrial facility in Albuquerque, New Mexico
    
    
    3,348,902
    
    
    
    1,490,000
    
    
    
    4,635,655
    
    
    
    7,176
    
    
    
    
    
    
    
    1,490,000
    
    
    
    4,642,831
    
    
    
    6,132,831
    
    
    
    614,208
    
    
    September 25, 2000
    
    40 yrs.Office facility in Houston, Texas
    
    
    4,793,092
    
    
    
    570,000
    
    
    
    6,759,843
    
    
    
    
    
    
    
    
    
    
    
    570,000
    
    
    
    6,759,843
    
    
    
    7,329,843
    
    
    
    894,271
    
    
    September 26, 2000
    
    40 yrs.Office facility in Eagan, Minnesota
    
    
    9,273,068
    
    
    
    4,225,000
    
    
    
    15,518,481
    
    
    
    1,420
    
    
    
    (1,325,000
    )
    
    
    2,900,000
    
    
    
    15,519,901
    
    
    
    18,419,901
    
    
    
    2,053,136
    
    
    September 28, 2000
    
    40 yrs.Warehouse and distribution facility in Kansas City, Missouri
    
    
    3,646,347
    
    
    
    570,000
    
    
    
    5,869,790
    
    
    
    39,219
    
    
    
    
    
    
    
    570,000
    
    
    
    5,909,009
    
    
    
    6,479,009
    
    
    
    781,583
    
    
    September 29, 2000
    
    40 yrs.Warehouse and distribution facilities in Valdosta, Georgia and Johnson City, Tennessee
    
    
    12,442,169
    
    
    
    650,000
    
    
    
    16,889,267
    
    
    
    409,990
    
    
    
    
    
    
    
    650,000
    
    
    
    17,299,257
    
    
    
    17,949,257
    
    
    
    2,252,899
    
    
    October 6, 2000
    
    40 yrs.Land in Elk Grove Village, Illinois
    
    
    2,271,714
    
    
    
    4,100,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,100,000
    
    
    
    
    
    
    
    4,100,000
    
    
    
    
    
    
    October 30, 2000
    
    N/AOffice facility in Lafayette, Louisiana
    
    
    2,403,622
    
    
    
    660,000
    
    
    
    3,004,921
    
    
    
    
    
    
    
    
    
    
    
    660,000
    
    
    
    3,004,921
    
    
    
    3,664,921
    
    
    
    378,745
    
    
    December 1, 2000
    
    40 yrs.Office facility in Collierville, Tennessee
    
    
    42,626,080
    
    
    
    3,154,425
    
    
    
    70,645,575
    
    
    
    12,000
    
    
    
    
    
    
    
    3,154,425
    
    
    
    70,657,575
    
    
    
    73,812,000
    
    
    
    16,346,433
    
    
    December 6, 2000
    
    7 - 40 yrs.Retail, warehouse and distribution facilities in York, Pennsylvania
    
    
    7,144,279
    
    
    
    1,974,000
    
    
    
    10,067,885
    
    
    
    2,900
    
    
    
    
    
    
    
    1,974,000
    
    
    
    10,070,785
    
    
    
    12,044,785
    
    
    
    1,269,477
    
    
    December 27, 2000
    
    40 yrs.Office facility in Houston, Texas
    
    
    3,892,778
    
    
    
    1,025,000
    
    
    
    4,530,120
    
    
    
    9,419
    
    
    
    
    
    
    
    1,025,000
    
    
    
    4,539,539
    
    
    
    5,564,539
    
    
    
    572,211
    
    
    December 27, 2000
    
    40 yrs.Industrial and office facilities in Rome, Georgia; Niles, Illinois; Plymouth,
Michigan and Twinsburg, Ohio
    
    
    16,018,750
    
    
    
    4,140,000
    
    
    
    23,822,057
    
    
    
    1,404,883
    
    
    
    
    
    
    
    4,140,000
    
    
    
    25,226,940
    
    
    
    29,366,940
    
    
    
    2,836,987
    
    
    August 16, 2001
    
    40 yrs.Industrial facility in Rochester, Minnesota
    
    
    11,723,412
    
    
    
    3,348,824
    
    
    
    9,275,468
    
    
    
    8,941,752
    
    
    
    
    
    
    
    3,348,824
    
    
    
    18,217,220
    
    
    
    21,566,044
    
    
    
    2,098,349
    
    
    August 14, 2000
    
    40 yrs.Industrial facilities in South Windsor and Manchester, Connecticut
    
    
    12,057,797
    
    
    
    1,555,400
    
    
    
    18,822,872
    
    
    
    250,000
    
    
    
    
    
    
    
    1,555,400
    
    
    
    19,072,872
    
    
    
    20,628,272
    
    
    
    2,114,893
    
    
    July 30, 2001
    
    N/AIndustrial facility in Salisbury, North Carolina
    
    
    6,949,214
    
    
    
    1,370,000
    
    
    
    2,671,897
    
    
    
    6,298,329
    
    
    
    (50,640
    )
    
    
    1,319,360
    
    
    
    8,970,226
    
    
    
    10,289,586
    
    
    
    906,286
    
    
    November 16, 2000
    
    40 yrs.Industrial facilities in City of Industry, California; Florence, Kentucky;
Chelmsford, Massachusetts and Lancaster, Texas
    
    
    10,454,677
    
    
    
    4,398,000
    
    
    
    13,418,144
    
    
    
    3,745,441
    
    
    
    
    
    
    
    4,643,000
    
    
    
    16,918,585
    
    
    
    21,561,585
    
    
    
    1,802,992
    
    
    April 30, 2001
    
    7 - 40 yrs.Industrial facility in Milford, Ohio
    
    
    9,605,512
    
    
    
    2,000,000
    
    
    
    12,869,110
    
    
    
    
    
    
    
    
    
    
    
    2,000,000
    
    
    
    12,869,110
    
    
    
    14,869,110
    
    
    
    1,380,748
    
    
    September 6, 2001
    
    40 yrs.Educational facilities in Union, New Jersey; Allentown and Philadelphia, Pennsylvania
and Grand Prairie, Texas
    
    
    5,919,446
    
    
    
    2,486,384
    
    
    
    7,601,852
    
    
    
    
    
    
    
    
    
    
    
    2,486,384
    
    
    
    7,601,852
    
    
    
    10,088,236
    
    
    
    768,534
    
    
    December 28, 2001
    
    40 yrs.
 56




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##### Table of Contents



Life on whichDepreciationCosts
    
    
    Increase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    in LatestCapitalized
    
    
    (Decrease) in
    
    
    Gross Amount at which Carried
    
    
    
    
    
    
    
    
    Statement ofInitial Cost to Company
    
    
    Subsequent to
    
    
    Net Investment
    
    
    at Close of Period
    
    
    Accumulated
    
    
    
    
    IncomeDescription
    
    Encumbrances
    
    
    Land
    
    
    Buildings
    
    
    Acquisition (a)
    
    
    (b)
    
    
    Land
    
    
    Buildings
    
    
    Total
    
    
    Depreciation (d)
    
    
    Date Acquired
    
    is ComputedOperating
Method:Industrial and office facilities in Elgin, Illinois; Bozeman, Montana and Nashville,
Tennessee
    
    
    11,485,964
    
    
    
    3,900,000
    
    
    
    17,937,226
    
    
    
    13,947
    
    
    
    (293,545
    )
    
    
    3,900,000
    
    
    
    17,657,628
    
    
    
    21,557,628
    
    
    
    2,131,040
    
    
    March 19, 2001
    
    40 yrs.Office facility in Richardson, Texas
    
    
    28,892,699
    
    
    
    3,400,000
    
    
    
    45,053,608
    
    
    
    
    
    
    
    
    
    
    
    3,400,000
    
    
    
    45,053,608
    
    
    
    48,453,608
    
    
    
    4,552,292
    
    
    December 19, 2001
    
    40 yrs.Office facility in Turku, Finland
    
    
    21,001,347
    
    
    
    801,195
    
    
    
    23,389,834
    
    
    
    81,315
    
    
    
    7,843,574
    
    
    
    1,072,104
    
    
    
    31,043,814
    
    
    
    32,115,918
    
    
    
    3,145,672
    
    
    December 28, 2001
    
    40 yrs.Retail facilities in several cities in the following states: Arizona, California, Florida, Illinois, Massachusetts, Maryland, Michigan, Minnesota and Texas
    
    
    41,624,644
    
    
    
    17,100,000
    
    
    
    54,742,917
    
    
    
    
    
    
    
    
    
    
    
    17,100,000
    
    
    
    54,742,917
    
    
    
    71,842,917
    
    
    
    5,645,810
    
    
    November 28, 2001
    
    40 yrs.Warehouse and distribution facility in Duluth, Georgia
    
    
    7,543,294
    
    
    
    2,167,000
    
    
    
    11,445,566
    
    
    
    5,231
    
    
    
    
    
    
    
    2,167,000
    
    
    
    11,450,797
    
    
    
    13,617,797
    
    
    
    1,371,612
    
    
    March 28, 2001
    
    40 yrs.Industrial facility in Helmond, Netherlands
    
    
    5,660,754
    
    
    
    2,230,224
    
    
    
    3,360,091
    
    
    
    
    
    
    
    1,788,399
    
    
    
    2,981,716
    
    
    
    4,396,998
    
    
    
    7,378,714
    
    
    
    503,462
    
    
    June 29, 2001
    
    40 yrs.Multiplex motion picture theater in Port St. Lucie and Pensacola, Florida
    
    
    
    
    
    
    3,200,000
    
    
    
    3,066,397
    
    
    
    6,799,722
    
    
    
    (4,112,076
    )
    
    
    3,685,000
    
    
    
    5,269,043
    
    
    
    8,954,043
    
    
    
    595,591
    
    
    December 7, 2000
    
    40 yrs.Office facilities in Lindon, Utah
    
    
    
    
    
    
    1,390,000
    
    
    
    1,122,716
    
    
    
    7,840,446
    
    
    
    
    
    
    
    1,820,925
    
    
    
    8,532,237
    
    
    
    10,353,162
    
    
    
    888,042
    
    
    December 27, 2000
    
    40 yrs.Warehouse, distribution, office and industrial facilities in Perris, California;
Eugene, Oregon; West Jordan, Utah and Tacoma, Washington
    
    
    7,932,085
    
    
    
    6,050,000
    
    
    
    8,198,138
    
    
    
    
    
    
    
    
    
    
    
    6,050,000
    
    
    
    8,198,138
    
    
    
    14,248,138
    
    
    
    794,110
    
    
    February 28, 2002
    
    40 yrs.Warehouse and distribution facilities in Charlotte and Lincolnton, North Carolina and
Mauldin, South Carolina
    
    
    8,500,963
    
    
    
    1,860,000
    
    
    
    12,851,675
    
    
    
    
    
    
    
    
    
    
    
    1,860,000
    
    
    
    12,851,675
    
    
    
    14,711,675
    
    
    
    1,219,778
    
    
    March 26, 2002
    
    40 yrs.Warehouse and distribution facilities in Boe, Carpiquet, Mans, Vendin Le Vieil,
Lieusaint, Lagnieu, Luneville and St. Germain de Puy, France
    
    
    90,881,532
    
    
    
    15,724,087
    
    
    
    75,210,660
    
    
    
    11,761,695
    
    
    
    28,686,940
    
    
    
    22,042,194
    
    
    
    109,341,188
    
    
    
    131,383,382
    
    
    
    9,829,861
    
    
    March 26, 2002
    
    40 yrs.Warehouse, distribution and office facilities in Davenport, Iowa and Bloomington,
Minnesota
    
    
    18,394,744
    
    
    
    3,260,000
    
    
    
    26,009,123
    
    
    
    
    
    
    
    
    
    
    
    3,260,000
    
    
    
    26,009,123
    
    
    
    29,269,123
    
    
    
    2,248,695
    
    
    July 5, 2002
    
    40 yrs.Industrial facility in Gorinchem, Netherlands
    
    
    6,201,518
    
    
    
    2,374,404
    
    
    
    3,864,260
    
    
    
    
    
    
    
    1,174,087
    
    
    
    2,842,560
    
    
    
    4,570,191
    
    
    
    7,412,751
    
    
    
    395,724
    
    
    July 5, 2002Industrial facilities in Granite City, Illinois; Kendallville, Indiana and Clinton Township, Michigan
    
    
    19,314,919
    
    
    
    4,390,000
    
    
    
    30,336,328
    
    
    
    
    
    
    
    
    
    
    
    4,390,000
    
    
    
    30,336,328
    
    
    
    34,726,328
    
    
    
    2,812,430
    
    
    August 10, 2002
    
    40 yrs.Educational facility in Upper Saucon Township, Pennsylvania
    
    
    11,679,327
    
    
    
    3,200,000
    
    
    
    15,415,229
    
    
    
    1,086,974
    
    
    
    
    
    
    
    3,200,000
    
    
    
    16,502,203
    
    
    
    19,702,203
    
    
    
    1,044,555
    
    
    August 10, 2002
    
    40 yrs.$
    600,436,772
    
    
    $
    182,553,756
    
    
    $
    740,145,848
    
    
    $
    104,860,170
    
    
    $
    22,807,922
    
    
    $
    188,713,089
    
    
    $
    861,654,607
    
    
    $
    1,050,367,696
    
    
    $
    106,730,579
 Gross AmountCosts
    
    
    Increase
    
    
    at which CarriedCapitalized
    
    
    (Decrease) in
    
    
    at Close ofInitial Cost to Company
    
    
    Subsequent to
    
    
    Net Investments
    
    
    PeriodDescription
    
    Encumbrances
    
    
    Land
    
    
    Buildings
    
    
    Acquisition
    
    
    (b)
    
    
    Total
    
    
    Date AcquiredDirect Financing Method:Industrial facilities in Dallas and Greenville, Texas
    
    $
    10,646,708
    
    
    $
    459,608
    
    
    $
    20,426,564
    
    
    
    
    
    
    $
    (3,191,407
    )
    
    $
    17,694,765
    
    
    November 18, 1999Multiplex theater facility in Midlothian, Virginia
    
    
    6,693,084
    
    
    
    
    
    
    
    10,818,996
    
    
    $
    854,117
    
    
    
    863,662
    
    
    
    12,536,775
    
    
    September 22, 1999Office facility in Scottsdale, Arizona
    
    
    14,602,112
    
    
    
    
    
    
    
    25,414,917
    
    
    
    
    
    
    
    
    
    
    
    25,414,917
    
    
    September 21, 2000Warehouse and distribution facility in Elk Grove Village, Illinois
    
    
    2,313,918
    
    
    
    
    
    
    
    4,172,251
    
    
    
    3,920
    
    
    
    
    
    
    
    4,176,171
    
    
    October 30, 2000Multiplex motion picture theater in Pensacola, Florida
    
    
    
    
    
    
    
    
    
    
    4,112,076
    
    
    
    2,541,782
    
    
    
    
    
    
    
    6,653,858
    
    
    December 7, 2000Industrial facility in Doncaster, United Kingdom
    
    
    6,178,532
    
    
    
    
    
    
    
    8,383,364
    
    
    
    7,099
    
    
    
    2,448,561
    
    
    
    10,839,024
    
    
    January 9, 2001Industrial and manufacturing facilities in Manchester, Michigan;
Farmville, Old Fort and Albemarie, North Carolina; Holmesville,
Ohio and Springfield, Tennessee
    
    
    15,951,346
    
    
    
    2,961,000
    
    
    
    24,473,555
    
    
    
    20,257
    
    
    
    
    
    
    
    27,454,812
    
    
    September 28, 2001Educational facility in Mooresville, North Carolina
    
    
    6,275,944
    
    
    
    1,600,000
    
    
    
    9,275,962
    
    
    
    130,053
    
    
    
    (263,737
    )
    
    
    10,742,278
    
    
    February 11, 2002$
    62,661,644
    
    
    $
    5,020,608
    
    
    $
    107,077,685
    
    
    $
    3,557,228
    
    
    $
    (142,921
    )
    
    $
    115,512,600
 57




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##### Table of Contents



(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 is due to the amortization of unearned income
producing a constant periodic rate of return on the net investment which is more (less) than
lease payments received, foreign currency translation adjustments, impairment losses and
property sales.(c)
    
    At December 31, 2005, the aggregate cost of real estate owned by the Company and its
subsidiaries for U.S. Federal income tax purposes is $930,229,418.(d)
    
    Reconciliation of real estate and accumulated depreciation: Reconciliation of Real Estate Accounted for Under theOperating MethodDecember 31,2005
    
    
    2004
    
    
    2003Balance at beginning of year
    
    $
    1,086,073,255
    
    
    $
    1,072,543,402
    
    
    $
    1,010,142,307Additions
    
    
    3,111,105
    
    
    
    2,034,685
    
    
    
    19,988,102Dispositions
    
    
    (1,375,640
    )
    
    
    
    
    
    
    Reclassification from real estate under construction
    
    
    
    
    
    
    
    
    
    
    14,723,082Reclassification to direct financing lease, net of
reclassification from direct financing lease
    
    
    
    
    
    
    
    
    
    
    (729,353
    )Reclassification to asset held for sale
    
    
    
    
    
    
    (4,119,723
    )
    
    
    Foreign currency translation adjustment
    
    
    (25,902,228
    )
    
    
    15,614,891
    
    
    
    28,419,264Reclassification to equity investment
    
    
    (11,538,796
    )
    
    
    
    
    
    
    Balance at close of year
    
    $
    1,050,367,696
    
    
    $
    1,086,073,255
    
    
    $
    1,072,543,402
 Reconciliation of Accumulated DepreciationDecember 31,2005
    
    
    2004
    
    
    2003Balance at beginning of year
    
    $
    86,212,092
    
    
    $
    62,105,338
    
    
    $
    38,682,696Depreciation expense
    
    
    23,499,816
    
    
    
    23,425,574
    
    
    
    22,728,601Depreciation expense from discontinued operations
    
    
    
    
    
    
    64,583
    
    
    
    66,743Reclassification to direct financing lease
    
    
    
    
    
    
    
    
    
    
    (236,973
    )Reclassification to equity investment
    
    
    (1,300,472
    )
    
    
    
    
    
    
    Reclassification to asset held for sale
    
    
    
    
    
    
    (323,213
    )
    
    
    Foreign currency translation adjustment
    
    
    (1,680,857
    )
    
    
    939,810
    
    
    
    864,271Balance at close of year
    
    $
    106,730,579
    
    
    $
    86,212,092
    
    
    $
    62,105,338
 
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 ITEM 9A. Controls and Procedures.
   
 ITEM 9B. Other Information.
  58




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##### Table of Contents



ITEM 10. Directors and Executive Officers of the Registrant.
  
 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.
  
 ITEM 14. Principal Accountant Fees and Services
  59




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##### Table of Contents



ITEM 15. Exhibits, Financial Statement Schedules.
    Exhibit No.
    
    Description
    
    Method of Filing3.1
    
    Articles of Amendment
    
    Exhibit 3.1 to Registration Statement
(Form S-11) No. 333-767613.1(2)
    
    Articles of Incorporation of Registrant
    
    Exhibit 3.1 to Registration Statement
(Form S-11) No. 333-314373.2
    
    Form of Bylaws of Registrant
    
    Exhibit 3.2 to Registration Statement
(Form S-11) No. 333-314374.1
    
    Dividend Reinvestment and Share Purchase Plan
    
    Exhibit 4.1 to Registrants Form S-3D
dated July 22, 200210.1
    
    Amended and Restated Advisory Agreement
dated September 30, 2005 between Corporate
Property Associates 14 Incorporated and
Carey Asset Management Corp
    
    Exhibit 10.1 to Registrants Form 10-Q
dated November 14, 200521.1
    
    Subsidiaries of Registrant
    
    Filed herewith23.1
    
    Consent of PricewaterhouseCoopers LLP
    
    Filed herewith31.1
    
    Certification of Chief Executive Officer
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    Certification of Chief Financial Officer
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith32.1
    
    Certification of Chief Executive Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith32.2
    
    Certification of Chief Financial Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith
 60




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##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED3/24/06
    
    
    
    BY:
    
    /s/ Mark J. DeCesarisDate
    
    
    
    
    
    Mark J. DeCesaris
Managing Director and acting Chief Financial Officer
  3/24/06
    
    
    
    BY:
    
    /s/ William Polk CareyDate
    
    
    
    
    
    William Polk CareyChairman of the Board and Director3/24/06
    
    
    
    BY:
    
    /s/ Gordon F. DuGanDate
    
    
    
    
    
    Gordon F. DuGanVice Chairman of the Board, Chief Executive Officer
and Director(Principal Executive Officer)3/24/06
    
    
    
    BY:
    
    /s/ Trevor P. BondDate
    
    
    
    
    
    Trevor P. BondDirector3/24/06
    
    
    
    BY:
    
    /s/ Charles E. ParenteDate
    
    
    
    
    
    Charles E. ParenteDirector3/24/06
    
    
    
    BY:
    
    /s/ James D. PriceDate
    
    
    
    
    
    James D. PriceDirector3/24/06
    
    
    
    BY:
    
    /s/ Mark J. DeCesarisDate
    
    
    
    
    
    Mark J. DeCesarisManaging Director and acting Chief Financial Officer(acting Principal Financial Officer)3/24/06
    
    
    
    BY:
    
    /s/ Claude FernandezDate
    
    
    
    
    
    Claude FernandezManaging Director and Chief Accounting Officer(Principal Accounting Officer)
   61