Maryland
|
33-0580106
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(IRS Employer Identification Number)
|
PART I.
FINANCIAL INFORMATION
|
Page
|
||||
Item 1:
|
|||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
Item 2:
|
|||||
16 | |||||
17 | |||||
19 | |||||
21 | |||||
25 | |||||
32 | |||||
33 | |||||
34 | |||||
39 | |||||
39 | |||||
39 | |||||
Item 3:
|
39 | ||||
Item 4:
|
40 | ||||
PART II.
OTHER INFORMATION
|
|||||
Item 1A:
|
41 | ||||
Item 2:
|
41 | ||||
Item 6:
|
41 | ||||
43 |
PART I.
|
Item 1.
|
2010
|
2009
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Real estate, at cost:
|
||||||||
Land
|
$ | 1,176,915 | $ | 1,169,295 | ||||
Buildings and improvements
|
2,286,259 | 2,270,161 | ||||||
Total real estate, at cost
|
3,463,174 | 3,439,456 | ||||||
Less accumulated depreciation and amortization
|
(651,841 | ) | (630,840 | ) | ||||
Net real estate held for investment
|
2,811,333 | 2,808,616 | ||||||
Real estate held for sale, net
|
10,156 | 8,266 | ||||||
Net real estate
|
2,821,489 | 2,816,882 | ||||||
Cash and cash equivalents
|
849 | 10,026 | ||||||
Accounts receivable, net
|
9,517 | 10,396 | ||||||
Goodwill
|
17,206 | 17,206 | ||||||
Other assets, net
|
56,642 | 60,277 | ||||||
Total assets
|
$ | 2,905,703 | $ | 2,914,787 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Distributions payable
|
$ | 16,983 | $ | 16,926 | ||||
Accounts payable and accrued expenses
|
19,400 | 38,445 | ||||||
Other liabilities
|
11,981 | 16,807 | ||||||
Line of credit payable
|
39,900 | 4,600 | ||||||
Notes payable
|
1,350,000 | 1,350,000 | ||||||
Total liabilities
|
1,438,264 | 1,426,778 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock and paid in capital, par value $1.00 per share,
|
||||||||
20,000,000 shares authorized, 13,900,000 shares issued
|
||||||||
and outstanding
|
337,790 | 337,790 | ||||||
Common stock and paid in capital, par value $1.00 per share,
|
||||||||
200,000,000 shares authorized, 104,400,957 and 104,286,705
|
||||||||
shares issued and outstanding as of March 31, 2010 and
|
||||||||
December 31, 2009, respectively
|
1,629,346 | 1,629,237 | ||||||
Distributions in excess of net income
|
(499,697 | ) | (479,018 | ) | ||||
Total stockholders’ equity
|
1,467,439 | 1,488,009 | ||||||
Total liabilities and stockholders’ equity
|
$ | 2,905,703 | $ | 2,914,787 |
The accompanying notes to consolidated financial statements are an integral part of these statements.
|
2010
|
2009
|
|||||||
REVENUE
|
||||||||
Rental
|
$ | 83,159 | $ | 81,778 | ||||
Other
|
106 | 754 | ||||||
Total revenue
|
83,265 | 82,532 | ||||||
EXPENSES
|
||||||||
Depreciation and amortization
|
23,255 | 22,763 | ||||||
Interest
|
21,395 | 21,410 | ||||||
General and administrative
|
6,711 | 5,950 | ||||||
Property
|
2,176 | 2,140 | ||||||
Income taxes
|
277 | 303 | ||||||
Total expenses
|
53,814 | 52,566 | ||||||
Income from continuing operations
|
29,451 | 29,966 | ||||||
Income from discontinued operations:
|
||||||||
Real estate acquired for resale by Crest
|
206 | (125 | ) | |||||
Real estate held for investment
|
548 | 243 | ||||||
Total income from discontinued operations
|
754 | 118 | ||||||
Net income
|
30,205 | 30,084 | ||||||
Preferred stock cash dividends
|
(6,063 | ) | (6,063 | ) | ||||
Net income available to common stockholders
|
$ | 24,142 | $ | 24,021 | ||||
Amounts available to common stockholders per common share:
|
||||||||
Income from continuing operations:
|
||||||||
Basic
|
$ | 0.23 | $ | 0.23 | ||||
Diluted
|
$ | 0.23 | $ | 0.23 | ||||
Net income:
|
||||||||
Basic
|
$ | 0.23 | $ | 0.23 | ||||
Diluted
|
$ | 0.23 | $ | 0.23 | ||||
Weighted average common shares outstanding:
|
||||||||
Basic
|
103,606,241 | 103,439,114 | ||||||
Diluted
|
103,686,440 | 103,445,044 |
2010
|
2009
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 30,205 | $ | 30,084 | ||||
Adjustments to net income:
|
||||||||
Depreciation and amortization
|
23,255 | 22,763 | ||||||
(Income) loss from discontinued operations:
|
||||||||
Real estate acquired for resale
|
(206 | ) | 125 | |||||
Real estate held for investment
|
(548 | ) | (243 | ) | ||||
Amortization of share-based compensation
|
1,761 | 1,397 | ||||||
Cash provided by (used in) discontinued operations:
|
||||||||
Real estate acquired for resale
|
206 | 186 | ||||||
Real estate held for investment
|
(85 | ) | 274 | |||||
Collection of notes receivable by Crest
|
34 | 32 | ||||||
Change in assets and liabilities:
|
||||||||
Accounts receivable and other assets
|
5,661 | 3,997 | ||||||
Accounts payable, accrued expenses and other liabilities
|
(23,756 | ) | (22,997 | ) | ||||
Net cash provided by operating activities
|
36,527 | 35,618 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Proceeds from sales of investment properties, discontinued operations
|
797 | 1,093 | ||||||
Restricted escrow deposit for Section 1031 tax-deferred exchange
|
(609 | ) | -- | |||||
Acquisition of and improvements to investment properties
|
(28,713 | ) | (2,439 | ) | ||||
Net cash used in investing activities
|
(28,525 | ) | (1,346 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Cash distributions to common stockholders
|
(44,764 | ) | (44,362 | ) | ||||
Cash dividends to preferred stockholders
|
(6,063 | ) | (6,063 | ) | ||||
Borrowings from line of credit
|
58,400 | -- | ||||||
Payments under line of credit
|
(23,100 | ) | -- | |||||
Principal payment on notes payable
|
-- | (20,000 | ) | |||||
Other items
|
(1,652 | ) | (224 | ) | ||||
Net cash used in financing activities
|
(17,179 | ) | (70,649 | ) | ||||
Net decrease in cash and cash equivalents
|
(9,177 | ) | (36,377 | ) | ||||
Cash and cash equivalents, beginning of period
|
10,026 | 46,815 | ||||||
Cash and cash equivalents, end of period
|
$ | 849 | $ | 10,438 |
1.
|
Management Statement
|
2.
|
Summary of Significant Accounting Policies and Procedures
|
March 31,
|
December 31,
|
|||||||
D. Other assets consist of the following (dollars in thousands) at:
|
2010
|
2009
|
||||||
Notes receivable issued in conjunction with Crest property sales
|
$ | 22,180 | $ | 22,214 | ||||
Deferred bond financing costs, net
|
11,525 | 11,899 | ||||||
Value of in-place and above-market leases, net
|
10,626 | 10,928 | ||||||
Prepaid expenses
|
8,053 | 7,738 | ||||||
Credit facility organization costs, net
|
1,205 | 1,470 | ||||||
Corporate assets, net of accumulated depreciation and amortization
|
986 | 1,058 | ||||||
Restricted escrow deposits for Section 1031 tax-deferred exchanges
|
609 | 4,479 | ||||||
Other items
|
1,458 | 491 | ||||||
$ | 56,642 | $ | 60,277 |
E. Distributions payable consist of the following declared
|
March 31,
|
December 31,
|
||||||
distributions (dollars in thousands) at:
|
2010
|
2009
|
||||||
Common stock distributions
|
$ | 14,962 | $ | 14,905 | ||||
Preferred stock dividends
|
2,021 | 2,021 | ||||||
$ | 16,983 | $ | 16,926 | |||||
F. Accounts payable and accrued expenses consist of the
|
March 31,
|
December 31,
|
||||||
following (dollars in thousands) at:
|
2010 | 2009 | ||||||
Bond interest payable
|
$ | 9,499 | $ | 25,972 | ||||
Other items
|
9,901 | 12,473 | ||||||
$ | 19,400 | $ | 38,445 |
March 31,
|
December 31,
|
|||||||
G. Other liabilities consist of the following (dollars in thousands) at:
|
2010
|
2009
|
||||||
Rent received in advance
|
$ | 5,589 | $ | 10,341 | ||||
Security deposits
|
4,317 | 4,334 | ||||||
Value of in-place below-market leases, net
|
2,075 | 2,132 | ||||||
$ | 11,981 | $ | 16,807 |
5.375% notes, issued in March 2003 and due in March 2013
|
$ | 100.0 | ||
5.5% notes, issued in November 2003 and due in November 2015
|
150.0 | |||
5.95% notes, issued in September 2006 and due in September 2016
|
275.0 | |||
5.375% notes, issued in September 2005 and due in September 2017
|
175.0 | |||
6.75% notes, issued in September 2007 and due in August 2019
|
550.0 | |||
5.875% bonds, issued in March 2005 and due in March 2035
|
100.0 | |||
$ | 1,350.0 |
Carrying value per
|
Estimated
|
|||||||
At March 31, 2010
|
balance sheet
|
fair value
|
||||||
Notes receivable issued in connection with Crest property sales
|
$ | 22.2 | $ | 20.5 | ||||
Notes payable
|
$ | 1,350.0 | $ | 1,336.2 |
Carrying value per
|
Estimated
|
|||||||
At December 31, 2009
|
balance sheet
|
fair value
|
||||||
Notes receivable issued in connection with Crest property sales
|
$ | 22.2 | $ | 20.0 | ||||
Notes payable
|
$ | 1,350.0 | $ | 1,276.4 |
8.
|
Discontinued Operations
|
|
Three months ended
March 31,
|
|||||||
Crest's income from discontinued operations, real estate acquired for resale
|
2010
|
2009
|
||||||
Rental revenue
|
$ | 22 | $ | 66 | ||||
Interest and other revenue
|
350 | 351 | ||||||
Interest expense
|
(128 | ) | (173 | ) | ||||
General and administrative expense
|
(97 | ) | (86 | ) | ||||
Property expenses
|
(30 | ) | (34 | ) | ||||
Provisions for impairment
|
-- | (311 | ) | |||||
Income taxes
|
89 | 62 | ||||||
Income (loss) from discontinued operations,
real estate acquired for resale by Crest
|
$ | 206 | $ | (125 | ) |
|
Three months ended
March 31,
|
|||||||
Realty Income's income from discontinued operations, real estate held for investment
|
2010
|
2009
|
||||||
Gain on sales of investment properties
|
$ | 703 | $ | 198 | ||||
Rental revenue
|
110 | 421 | ||||||
Other revenue
|
10 | 12 | ||||||
Depreciation and amortization
|
(36 | ) | (229 | ) | ||||
Property expenses
|
(205 | ) | (159 | ) | ||||
Provision for impairment
|
(34 | ) | -- | |||||
Income from discontinued operations,
real estate held for investment
|
$ | 548 | $ | 243 |
Three months ended
March 31,
|
||||||||
Total discontinued operations
|
2010
|
2009
|
||||||
Real estate acquired for resale by Crest
|
$ | 206 | $ | (125 | ) | |||
Real estate held for investment
|
548 | 243 | ||||||
Income from discontinued operations
|
$ | 754 | $ | 118 | ||||
Per common share, basic and diluted
|
$ | 0.01 | $ | 0.00 |
Month
|
2010
|
2009
|
||||||
January
|
$ | 0.14300 | $ | 0.14175 | ||||
February
|
0.14300 | 0.14175 | ||||||
March
|
0.14300 | 0.14175 | ||||||
Total
|
$ | 0.42900 | $ | 0.42525 |
Three months ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Weighted average shares used for the basic net income per share computation
|
103,606,241 | 103,439,114 | ||||||
Incremental shares from share-based compensation
|
80,199 | 5,930 | ||||||
Adjusted weighted average shares used for diluted net income per share computation
|
103,686,440 | 103,445,044 | ||||||
Unvested shares from share-based compensation that were anti-dilutive
|
520 | 823,488 |
11.
|
Supplemental Disclosures of Cash Flow Information
|
March 31,
|
December 31,
|
|||||||
Assets, as of:
|
2010
|
2009
|
||||||
Segment net real estate:
|
||||||||
Automotive service
|
$ | 109,178 | $ | 105,085 | ||||
Automotive tire services
|
199,687 | 201,233 | ||||||
Child care
|
76,700 | 77,769 | ||||||
Convenience stores
|
473,146 | 477,555 | ||||||
Drug stores
|
139,869 | 141,057 | ||||||
Health and fitness
|
218,851 | 197,820 | ||||||
Restaurants
|
724,432 | 729,489 | ||||||
Theaters
|
288,058 | 290,386 | ||||||
23 other non-reportable segments
|
591,568 | 596,488 | ||||||
Total segment net real estate
|
2,821,489 | 2,816,882 | ||||||
Other intangible assets – Automotive tire services
|
632 | 647 | ||||||
Other intangible assets – Drug stores
|
5,901 | 6,066 | ||||||
Other intangible assets – Grocery stores
|
848 | 860 | ||||||
Other intangible assets – Health and fitness
|
829 | 845 | ||||||
Other intangible assets – Theaters
|
1,808 | 1,885 | ||||||
Other intangible assets – Other
|
608 | 625 | ||||||
Goodwill – Automotive service
|
1,338 | 1,338 | ||||||
Goodwill – Child care
|
5,353 | 5,353 | ||||||
Goodwill – Convenience stores
|
2,074 | 2,074 | ||||||
Goodwill – Home furnishings
|
1,557 | 1,557 | ||||||
Goodwill – Restaurants
|
3,779 | 3,779 | ||||||
Goodwill – non-reportable segments
|
3,105 | 3,105 | ||||||
Other corporate assets
|
56,382 | 69,771 | ||||||
Total assets
|
$ | 2,905,703 | $ | 2,914,787 |
Revenue for the three months ended March 31:
|
2010
|
2009
|
||||||
Segment rental revenue
(1)
:
|
||||||||
Automotive service
|
$ | 3,911 | $ | 4,207 | ||||
Automotive tire services
|
5,458 | 5,808 | ||||||
Child care
|
5,649 | 5,844 | ||||||
Convenience stores
|
14,207 | 13,568 | ||||||
Drug stores
|
3,432 | 3,431 | ||||||
Health and fitness
|
5,656 | 4,701 | ||||||
Restaurants
|
18,233 | 17,610 | ||||||
Theaters
|
7,563 | 7,498 | ||||||
23 non-reportable segments
|
19,050 | 19,111 | ||||||
Total rental revenue
|
83,159 | 81,778 | ||||||
Other revenue
|
106 | 754 | ||||||
Total revenue
|
$ | 83,265 | $ | 82,532 |
|
(1)
Crest’s revenue appears in “income from discontinued operations, real estate acquired for resale by Crest” and is not included in this table, which covers revenue but does not include revenue classified as part of income from discontinued operations.
|
For the three
months ended
March 31, 2010
|
For the year ended
December 31, 2009
|
|||||||||||||||
Number of
shares
|
Weighted
average
price
(1)
|
Number of
shares
|
Weighted
average
price
(1)
|
|||||||||||||
Outstanding nonvested shares, beginning of year
|
853,234 | $ | 19.14 | 994,453 | $ | 19.70 | ||||||||||
Shares granted
|
178,200 | 26.54 | 142,860 | 22.86 | ||||||||||||
Shares vested
|
(176,097 | ) | 23.03 | (214,521 | ) | 23.14 | ||||||||||
Shares forfeited
|
(369 | ) | 25.38 | (69,558 | ) | 25.95 | ||||||||||
Outstanding nonvested
shares, end of each period
|
854,968 | $ | 22.56 | 853,234 | $ | 19.14 |
14.
|
Commitments and Contingencies
|
15.
|
Subsequent Events
|
●
|
$0.1433125 per share to our common stockholders;
|
●
|
$0.1536459 per share to our Class D preferred stockholders; and
|
●
|
$0.140625 per share to our Class E preferred stockholders.
|
●
|
Our anticipated growth strategies;
|
●
|
Our intention to acquire additional properties and the timing of these acquisitions;
|
●
|
Our intention to sell properties and the timing of these property sales;
|
●
|
Our intention to re-lease vacant properties;
|
●
|
Anticipated trends in our business, including trends in the market for long-term net-leases of freestanding, single-tenant properties;
|
●
|
Future expenditures for development projects; and
|
●
|
Profitability of our subsidiary, Crest Net Lease, Inc. (“Crest”).
|
●
|
Our continued qualification as a real estate investment trust;
|
●
|
General business and economic conditions;
|
●
|
Competition;
|
●
|
Fluctuating interest rates;
|
●
|
Access to debt and equity capital markets;
|
●
|
Continued volatility and uncertainty in the credit markets and broader financial markets;
|
●
|
Other risks inherent in the real estate business including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters;
|
●
|
Impairments in the value of our real estate assets;
|
●
|
Changes in the tax laws of the United States of America;
|
●
|
The outcome of any legal proceedings to which we are a party; and
|
●
|
Acts of terrorism and war.
|
●
|
Contractual rent increases on existing leases;
|
●
|
Rent increases at the termination of existing leases, when market conditions permit; and
|
●
|
The active management of our property portfolio, including re-leasing vacant properties and selectively selling properties, thereby mitigating our exposure to certain tenants and markets.
|
●
|
Freestanding, single-tenant locations;
|
●
|
Leased to regional and national chains; and
|
●
|
Leased under long-term, net-lease agreements.
|
●
|
Of 2,344 retail properties;
|
●
|
With an occupancy rate of 96.7%, or 2,267 properties occupied and only 77 properties available for lease;
|
●
|
Leased to 118 different retail chains doing business in 30 separate retail industries;
|
●
|
Located in 49 states;
|
●
|
With over 19.2 million square feet of leasable space; and
|
●
|
With an average leasable retail space per property of approximately 8,200 square feet.
|
●
|
Are for initial terms of 15 to 20 years;
|
●
|
Require the tenant to pay minimum monthly rent and property operating expenses (taxes, insurance and maintenance); and
|
●
|
Provide for future rent increases based on increases in the consumer price index (typically subject to ceilings), fixed increases, or additional rent calculated as a percentage of the tenants’ gross sales above a specified level.
|
●
|
Freestanding, commercially-zoned property with a single tenant;
|
●
|
Properties that are important locations for regional and national chains;
|
●
|
Properties that we deem to be profitable for the tenants;
|
●
|
Properties that are located within attractive demographic areas relative to the business of our tenants, with high visibility and easy access to major thoroughfares; and
|
●
|
Properties that can be purchased with the simultaneous execution or assumption of long-term, net-lease agreements, offering both current income and the potential for rent increases.
|
●
|
The performance of various retail industries; and
|
●
|
The operation, management, business planning and financial condition of the tenants.
|
●
|
generate higher returns;
|
●
|
enhance the credit quality of our real estate portfolio;
|
●
|
extend our average remaining lease term; or
|
●
|
decrease tenant or industry concentration.
|
●
|
Shares of our common stock outstanding of 104,400,957 multiplied by the last reported sales price of our common stock on the NYSE of $30.69 per share on March 31, 2010, or $3.20 billion;
|
●
|
Aggregate liquidation value (par value of $25 per share) of the Class D preferred stock of $127.5 million;
|
●
|
Aggregate liquidation value (par value of $25 per share) of the Class E preferred stock of $220 million;
|
●
|
Outstanding notes of $1.35 billion; and
|
●
|
Outstanding borrowings of $39.9 million on our credit facility.
|
5.375% notes, issued in March 2003 and due in March 2013
|
$ | 100.0 | ||
5.5% notes, issued in November 2003 and due in November 2015
|
150.0 | |||
5.95% notes, issued in September 2006 and due in September 2016
|
275.0 | |||
5.375% notes, issued in September 2005 and due in September 2017
|
175.0 | |||
6.75% notes, issued in September 2007 and due in August 2019
|
550.0 | |||
5.875% bonds, issued in March 2005 and due in March 2035
|
100.0 | |||
$ | 1,350.0 |
Table of Obligations
|
Ground
|
Ground
|
||||||||||||||||||||||||||
Leases
|
Leases
|
|||||||||||||||||||||||||||
Paid by
|
Paid by
|
|||||||||||||||||||||||||||
Year of
|
Credit
|
Realty
|
Our
|
|||||||||||||||||||||||||
Maturity
|
Facility
|
Notes
|
Interest
(1)
|
Income
(2)
|
Tenants
(3)
|
Other
(4)
|
Totals
|
|||||||||||||||||||||
2010
|
$ | -- | $ | -- | $ | 62.2 | $ | 0.1 | $ | 2.8 | $ | 6.7 | $ | 71.8 | ||||||||||||||
2011
|
39.9 | -- | 82.6 | 0.1 | 3.8 | -- | 126.4 | |||||||||||||||||||||
2012
|
-- | -- | 82.4 | 0.1 | 3.7 | -- | 86.2 | |||||||||||||||||||||
2013
|
-- | 100.0 | 78.1 | 0.1 | 3.5 | -- | 181.7 | |||||||||||||||||||||
2014
|
-- | -- | 77.0 | 0.1 | 3.3 | -- | 80.4 | |||||||||||||||||||||
Thereafter
|
-- | 1,250.0 | 350.9 | 0.8 | 37.7 | -- | 1,639.4 | |||||||||||||||||||||
Totals
|
$ | 39.9 | $ | 1,350.0 | $ | 733.2 | $ | 1.3 | $ | 54.8 | $ | 6.7 | $ | 2,185.9 |
|
(1)
Interest on the credit facility and notes has been calculated based on outstanding balances as of March 31, 2010 through their respective maturity dates.
|
|
(2)
Realty Income currently pays the ground lessors directly for the rent under the ground leases. A majority of this rent is reimbursed to Realty Income as additional rent from our tenants.
|
|
(3)
Our tenants, who are generally sub-tenants under ground leases, are responsible for paying the rent under these ground leases. In the event a tenant fails to pay the ground lease rent, we are primarily responsible.
|
|
(4)
“Other” consists of $5.2 million of commitments under construction contracts and $1.5 million of contingent payments for tenant improvements and leasing costs.
|
●
|
The eight retail properties acquired by Realty Income in 2010, which generated $22,000 of rent in the first three months of 2010;
|
●
|
The 16 retail properties acquired by Realty Income in 2009, which generated $1.4 million of rent in the first three months of 2010 compared to no rental revenue in the first three months of 2009;
|
●
|
Same store rents generated on 2,193 properties during the entire first three months of 2010 and 2009 increased by $616,000, or 0.8%, to $80.55 million from $79.94 million; net of
|
●
|
A net decrease of $643,000 relating to the aggregate of (i) development properties acquired before 2009 that started paying rent in 2009, (ii) properties that were vacant during part of 2010 or 2009, (iii) properties sold during 2010 and 2009 and (iv) lease termination settlements, which, in aggregate, totaled $954,000 in the first three months of 2010 compared to $1.6 million in the first three months of 2009; and
|
●
|
A decrease in straight-line rent and other non-cash adjustments to rent of $24,000 in the first three months of 2010 as compared to the first three months of 2009.
|
●
|
Primarily base rent increases tied to a consumer price index (typically subject to ceilings);
|
●
|
Fixed increases;
|
●
|
Overage rent based on a percentage of the tenants’ gross sales; or
|
●
|
A combination
of two or more of the above rent provisions.
|
Three months ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Interest on our notes and credit facility
|
$ | 20,618 | $ | 20,665 | ||||
Interest included in discontinued operations
from real estate acquired for resale by Crest
|
(128 | ) | (173 | ) | ||||
Credit facility commitment fees
|
248 | 248 | ||||||
Amortization of credit facility origination costs and
deferred bond financing costs
|
659 | 670 | ||||||
Interest capitalized
|
(2 | ) | -- | |||||
Interest expense
|
$ | 21,395 | $ | 21,410 |
Three months ended
March 31,
|
||||||||
Credit facility and notes outstanding
|
2010
|
2009
|
||||||
Average outstanding balances (dollars in thousands)
|
$ | 1,356,429 | $ | 1,353,111 | ||||
Average interest rates
|
6.08 | % | 6.11 | % |
●
|
Notes payable of $1.35 billion was 6.10%;
|
●
|
Credit facility outstanding borrowings of $39.9 million was 1.24%; and
|
●
|
Combined outstanding notes and credit facility borrowings of $1.39 billion was 5.96%.
|
Three months ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Net cash provided by operating activities
|
$ | 36,527 | $ | 35,618 | ||||
Interest expense
|
21,395 | 21,410 | ||||||
Interest expense included in discontinued operations
(1)
|
128 | 173 | ||||||
Income taxes
|
277 | 303 | ||||||
Income tax benefit included in discontinued operations
(1)
|
(89 | ) | (62 | ) | ||||
Collection of notes receivable by Crest
(1)
|
(34 | ) | (32 | ) | ||||
Crest provisions for impairment
(1)
|
-- | (311 | ) | |||||
Amortization of share-based compensation
|
(1,761 | ) | (1,397 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable and other assets
|
(5,661 | ) | (3,997 | ) | ||||
Accounts payable, accrued expenses and other liabilities
|
23,756 | 22,997 | ||||||
Interest coverage amount
|
$ | 74,538 | $ | 74,702 | ||||
Divided by interest expense
(2)
|
$ | 21,523 | $ | 21,583 | ||||
Interest coverage ratio
|
3.5 | 3.5 |
Three months ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Interest coverage amount
|
$ | 74,538 | $ | 74,702 | ||||
Divided by interest expense plus preferred stock dividends
(1)
|
$ | 27,586 | $ | 27,646 | ||||
Fixed charge coverage ratio
|
2.7 | 2.7 |
|
Three months ended
March 31,
|
|||||||
Crest's income from discontinued operations, real estate acquired for resale
|
2010
|
2009
|
||||||
Rental revenue
|
$ | 22 | $ | 66 | ||||
Interest and other revenue
|
350 | 351 | ||||||
Interest expense
|
(128 | ) | (173 | ) | ||||
General and administrative expense
|
(97 | ) | (86 | ) | ||||
Property expenses
|
(30 | ) | (34 | ) | ||||
Provisions for impairment
|
-- | (311 | ) | |||||
Income taxes
|
89 | 62 | ||||||
Income (loss) from discontinued operations,
real estate acquired for resale by Crest
|
$ | 206 | $ | (125 | ) | |||
Per common share, basic and diluted
|
$ | 0.00 | $ | 0.00 |
|
Three months ended
March 31,
|
|||||||
Realty Income's income from discontinued operations, real estate held for investment
|
2010
|
2009
|
||||||
Gain on sales of investment properties
|
$ | 703 | $ | 198 | ||||
Rental revenue
|
110 | 421 | ||||||
Other revenue
|
10 | 12 | ||||||
Depreciation and amortization
|
(36 | ) | (229 | ) | ||||
Property expenses
|
(205 | ) | (159 | ) | ||||
Provision for impairment
|
(34 | ) | -- | |||||
Income from discontinued operations,
real estate held for investment
|
$ | 548 | $ | 243 | ||||
Per common share, basic and diluted
|
$ | 0.01 | $ | 0.00 |
Three months ended
March 31,
|
||||||||
Total discontinued operations
|
2010
|
2009
|
||||||
Real estate acquired for resale by Crest
|
$ | 206 | $ | (125 | ) | |||
Real estate held for investment
|
548 | 243 | ||||||
Income from discontinued operations
|
$ | 754 | $ | 118 | ||||
Per common share, basic and diluted
|
$ | 0.01 | $ | 0.00 |
Three months ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Net income available to common stockholders
|
$ | 24,142 | $ | 24,021 | ||||
Depreciation and amortization:
|
||||||||
Continuing operations
|
23,255 | 22,763 | ||||||
Discontinued operations
|
36 | 229 | ||||||
Depreciation of furniture, fixtures and equipment
|
(78 | ) | (81 | ) | ||||
Gain on sales of land and investment properties, discontinued operations
|
(703 | ) | (198 | ) | ||||
FFO available to common stockholders
|
$ | 46,652 | $ | 46,734 | ||||
FFO per common share:
|
||||||||
Basic
|
$ | 0.45 | $ | 0.45 | ||||
Diluted
|
$ | 0.45 | $ | 0.45 | ||||
Distributions paid to common stockholders
|
$ | 44,764 | $ | 44,362 | ||||
|
FFO in excess of distributions paid to common stockholders
|
$ | 1,888 | $ | 2,372 | ||||
Weighted average number of common shares used for computation per share:
|
||||||||
Basic
|
103,606,241 | 103,439,114 | ||||||
Diluted
|
103,686,440 | 103,445,044 |
Three months ended
March 31,
|
||||||||
|
2010
|
2009
|
||||||
Net income available to common stockholders
|
$ | 24,142 | $ | 24,021 | ||||
Cumulative adjustments to calculate FFO
(1)
|
22,510 | 22,713 | ||||||
FFO available to common stockholders
|
46,652 | 46,734 | ||||||
Amortization of share-based compensation
|
1,761 | 1,397 | ||||||
Amortization of deferred note financing costs
(2)
|
341 | 341 | ||||||
Provisions for impairment
|
34 | 311 | ||||||
Capitalized leasing costs and commissions
|
(292 | ) | (406 | ) | ||||
Capitalized building improvements
|
(643 | ) | (441 | ) | ||||
Straight-line rent revenue
(3)
|
(238 | ) | (261 | ) | ||||
Total AFFO available to common stockholders
|
$ | 47,615 | $ | 47,675 | ||||
AFFO per common share:
|
||||||||
Basic
|
$ | 0.46 | $ | 0.46 | ||||
Diluted
|
$ | 0.46 | $ | 0.46 | ||||
Distributions paid to common stockholders
|
$ | 44,764 | $ | 44,362 |
AFFO in excess of distributions paid to common stockholders
|
$ | 2,851 | $ | 3,313 | ||||
Weighted average number of common shares used for computation per share:
|
||||||||
Basic
|
103,606,241 | 103,439,114 | ||||||
Diluted
|
103,686,440 | 103,445,044 |
(1)
|
See reconciling items for FFO presented on previous page.
|
(2)
|
Amortization of deferred note financing costs includes the amortization of costs incurred and capitalized when our notes were issued in January 1999, March 2003, November 2003, March 2005, September 2005, September 2006 and September 2007. These costs are being amortized over the lives of these notes. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
|
(3)
|
A negative amount indicates that our straight-line rent revenue was greater than our actual cash rent collected.
|
●
|
Of 2,344 retail properties;
|
●
|
With an occupancy rate of 96.7%, or 2,267 properties occupied and only 77 properties available for lease;
|
●
|
Leased to 118 different retail chains doing business in 30 separate retail industries;
|
●
|
Located in 49 states;
|
●
|
With over 19.2 million square feet of leasable space; and
|
●
|
With an average leasable retail space per property of approximately 8,200 square feet.
|
Percentage of Rental Revenue
(1)
|
|||||||||||||||||||||||||||
For the Quarter
|
For the Years Ended
|
||||||||||||||||||||||||||
Industries
|
Ended
March 31,
2010
|
Dec 31,
2009
|
Dec 31,
2008
|
Dec 31,
2007
|
Dec 31,
2006
|
Dec 31,
2005
|
Dec 31,
2004
|
||||||||||||||||||||
Apparel stores
|
1.1 | % | 1.1 | % | 1.1 | % | 1.2 | % | 1.7 | % | 1.6 | % | 1.8 | % | |||||||||||||
Automotive collision services
|
1.1 | 1.1 | 1.0 | 1.1 | 1.3 | 1.3 | 1.0 | ||||||||||||||||||||
Automotive parts
|
1.4 | 1.5 | 1.6 | 2.1 | 2.8 | 3.4 | 3.8 | ||||||||||||||||||||
Automotive service
|
4.7 | 4.8 | 4.8 | 5.2 | 6.9 | 7.6 | 7.7 | ||||||||||||||||||||
Automotive tire services
|
6.6 | 6.9 | 6.7 | 7.3 | 6.1 | 7.2 | 7.8 | ||||||||||||||||||||
Book stores
|
0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.3 | ||||||||||||||||||||
Business services
|
* | * | * | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||||||||||
Child care
|
6.8 | 7.3 | 7.6 | 8.4 | 10.3 | 12.7 | 14.4 | ||||||||||||||||||||
Consumer electronics
|
0.6 | 0.7 | 0.8 | 0.9 | 1.1 | 1.3 | 2.1 | ||||||||||||||||||||
Convenience stores
|
17.1 | 16.9 | 15.8 | 14.0 | 16.1 | 18.7 | 19.2 | ||||||||||||||||||||
Crafts and novelties
|
0.3 | 0.3 | 0.3 | 0.3 | 0.4 | 0.4 | 0.5 | ||||||||||||||||||||
Distribution and office
|
1.0 | 1.0 | 1.0 | 0.6 | -- | -- | -- | ||||||||||||||||||||
Drug stores
|
4.2 | 4.3 | 4.1 | 2.7 | 2.9 | 2.8 | 0.1 | ||||||||||||||||||||
Entertainment
|
1.3 | 1.3 | 1.2 | 1.4 | 1.6 | 2.1 | 2.3 | ||||||||||||||||||||
Equipment rental services
|
0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.4 | 0.3 | ||||||||||||||||||||
Financial services
|
0.2 | 0.2 | 0.2 | 0.2 | 0.1 | 0.1 | 0.1 | ||||||||||||||||||||
General merchandise
|
0.8 | 0.8 | 0.8 | 0.7 | 0.6 | 0.5 | 0.4 | ||||||||||||||||||||
Grocery stores
|
0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.8 | ||||||||||||||||||||
Health and fitness
|
6.8 | 5.9 | 5.6 | 5.1 | 4.3 | 3.7 | 4.0 | ||||||||||||||||||||
Home furnishings
|
1.4 | 1.3 | 2.4 | 2.6 | 3.1 | 3.7 | 4.1 | ||||||||||||||||||||
Home improvement
|
1.9 | 1.9 | 1.9 | 2.1 | 3.4 | 1.1 | 1.0 | ||||||||||||||||||||
Motor vehicle dealerships
|
2.6 | 2.7 | 3.1 | 3.1 | 3.4 | 2.6 | 0.6 | ||||||||||||||||||||
Office supplies
|
0.9 | 1.0 | 1.0 | 1.1 | 1.3 | 1.5 | 1.6 | ||||||||||||||||||||
Pet supplies and services
|
0.9 | 0.9 | 0.8 | 0.9 | 1.1 | 1.3 | 1.4 | ||||||||||||||||||||
Private education
|
0.8 | 0.9 | 0.8 | 0.8 | 0.8 | 0.8 | 1.1 | ||||||||||||||||||||
Restaurants
|
21.9 | 21.3 | 21.8 | 21.2 | 11.9 | 9.4 | 9.7 | ||||||||||||||||||||
Shoe stores
|
-- | -- | -- | -- | -- | 0.3 | 0.3 | ||||||||||||||||||||
Sporting goods
|
2.5 | 2.6 | 2.3 | 2.6 | 2.9 | 3.4 | 3.4 | ||||||||||||||||||||
Theaters
|
9.1 | 9.2 | 9.0 | 9.0 | 9.6 | 5.2 | 3.5 | ||||||||||||||||||||
Travel plazas
|
0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.3 | 0.4 | ||||||||||||||||||||
Video rental
|
1.0 | 1.0 | 1.1 | 1.7 | 2.1 | 2.5 | 2.8 | ||||||||||||||||||||
Other
|
1.7 | 1.8 | 1.9 | 2.3 | 2.7 | 3.0 | 3.4 | ||||||||||||||||||||
Totals
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
|
* Less than 0.1%
|
(1)
|
Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified to discontinued operations.
|
Rental Revenue for
|
Percentage of
|
|||||||||||
Number of
|
the Quarter Ended
|
Rental
|
||||||||||
Industry
|
Properties
|
March 31, 2010
(1)
|
Revenue
|
|||||||||
Tenants Providing Services
|
||||||||||||
Automotive collision services
|
13 | $ | 886 | 1.1 | % | |||||||
Automotive service
|
241 | 3,911 | 4.7 | |||||||||
Child care
|
251 | 5,649 | 6.8 | |||||||||
Entertainment
|
8 | 1,064 | 1.3 | |||||||||
Equipment rental services
|
2 | 150 | 0.2 | |||||||||
Financial services
|
13 | 192 | 0.2 | |||||||||
Health and fitness
|
34 | 5,666 | 6.8 | |||||||||
Private education
|
11 | 712 | 0.8 | |||||||||
Theaters
|
34 | 7,563 | 9.1 | |||||||||
Other
|
10 | 1,392 | 1.7 | |||||||||
617 | 27,185 | 32.7 | ||||||||||
Tenants Selling Goods and Services
|
||||||||||||
Automotive parts (with installation)
|
26 | 454 | 0.5 | |||||||||
Automotive tire services
|
154 | 5,458 | 6.6 | |||||||||
Business services
|
1 | 5 | * | |||||||||
Convenience stores
|
583 | 14,207 | 17.1 | |||||||||
Distribution and office
|
3 | 864 | 1.0 | |||||||||
Home improvement
|
3 | 112 | 0.1 | |||||||||
Motor vehicle dealerships
|
17 | 2,196 | 2.6 | |||||||||
Pet supplies and services
|
12 | 701 | 0.9 | |||||||||
Restaurants
|
638 | 18,256 | 21.9 | |||||||||
Travel plazas
|
1 | 187 | 0.2 | |||||||||
Video rental
|
27 | 847 | 1.0 | |||||||||
1,465 | 43,287 | 51.9 | ||||||||||
Tenants Selling Goods
|
||||||||||||
Apparel stores
|
6 | 902 | 1.1 | |||||||||
Automotive parts
|
47 | 731 | 0.9 | |||||||||
Book stores
|
2 | 149 | 0.2 | |||||||||
Consumer electronics
|
9 | 519 | 0.6 | |||||||||
Crafts and novelties
|
5 | 236 | 0.3 | |||||||||
Drug stores
|
51 | 3,481 | 4.2 | |||||||||
General merchandise
|
32 | 657 | 0.8 | |||||||||
Grocery stores
|
9 | 580 | 0.7 | |||||||||
Home furnishings
|
43 | 1,149 | 1.4 | |||||||||
Home improvement
|
29 | 1,462 | 1.8 | |||||||||
Office supplies
|
10 | 788 | 0.9 | |||||||||
Pet supplies
|
2 | 40 | * | |||||||||
Sporting goods
|
17 | 2,097 | 2.5 | |||||||||
262 | 12,791 | 15.4 | ||||||||||
Totals
|
2,344 | $ | 83,263 | 100.0 | % |
(1)
|
Includes rental revenue for all properties owned by Realty Income at March 31, 2010, including revenue from properties reclassified to discontinued operations of $104.
|
Total Portfolio
|
Initial Expirations
(3)
|
Subsequent Expirations
(4)
|
||||||||||||||||||||||||||||||||||
Year
|
Number
of Leases Expiring
(1)
|
Rental
Revenue
for the
Quarter
Ended
March 31,
2010
(2)
|
% of
Total
Rental
Revenue
|
Number
of Leases Expiring
|
Rental
Revenue
for the
Quarter
Ended
March 31,
2010
|
% of
Total
Rental
Revenue
|
Number
of Leases Expiring
|
Rental
Revenue
for the
Quarter
Ended
March 31,
2010
|
% of
Total
Rental
Revenue
|
|||||||||||||||||||||||||||
2010
|
118 | $ | 2,418 | 3.0 | % | 36 | $ | 880 | 1.1 | % | 82 | $ | 1,538 | 1.9 | % | |||||||||||||||||||||
2011
|
120 | 3,732 | 4.6 | 65 | 2,500 | 3.1 | 55 | 1,232 | 1.5 | |||||||||||||||||||||||||||
2012
|
130 | 2,975 | 3.7 | 78 | 1,919 | 2.4 | 52 | 1,056 | 1.3 | |||||||||||||||||||||||||||
2013
|
144 | 5,011 | 6.2 | 99 | 4,002 | 5.0 | 45 | 1,009 | 1.2 | |||||||||||||||||||||||||||
2014
|
105 | 3,361 | 4.2 | 60 | 2,380 | 3.0 | 45 | 981 | 1.2 | |||||||||||||||||||||||||||
2015
|
130 | 3,415 | 4.2 | 92 | 2,636 | 3.2 | 38 | 779 | 1.0 | |||||||||||||||||||||||||||
2016
|
115 | 2,087 | 2.6 | 112 | 2,010 | 2.5 | 3 | 77 | 0.1 | |||||||||||||||||||||||||||
2017
|
50 | 1,853 | 2.3 | 40 | 1,653 | 2.0 | 10 | 200 | 0.3 | |||||||||||||||||||||||||||
2018
|
42 | 1,894 | 2.3 | 34 | 1,666 | 2.0 | 8 | 228 | 0.3 | |||||||||||||||||||||||||||
2019
|
98 | 5,129 | 6.3 | 92 | 4,714 | 5.8 | 6 | 415 | 0.5 | |||||||||||||||||||||||||||
2020
|
82 | 3,283 | 4.1 | 75 | 3,096 | 3.8 | 7 | 187 | 0.3 | |||||||||||||||||||||||||||
2021
|
177 | 7,566 | 9.4 | 176 | 7,511 | 9.3 | 1 | 55 | 0.1 | |||||||||||||||||||||||||||
2022
|
100 | 2,939 | 3.6 | 99 | 2,891 | 3.5 | 1 | 48 | 0.1 | |||||||||||||||||||||||||||
2023
|
250 | 8,407 | 10.4 | 248 | 8,334 | 10.3 | 2 | 73 | 0.1 | |||||||||||||||||||||||||||
2024
|
62 | 2,111 | 2.6 | 62 | 2,111 | 2.6 | -- | -- | -- | |||||||||||||||||||||||||||
2025
|
70 | 5,400 | 6.7 | 66 | 5,330 | 6.6 | 4 | 70 | 0.1 | |||||||||||||||||||||||||||
2026
|
109 | 6,170 | 7.6 | 106 | 6,102 | 7.5 | 3 | 68 | 0.1 | |||||||||||||||||||||||||||
2027
|
159 | 5,022 | 6.2 | 158 | 5,005 | 6.2 | 1 | 17 | * | |||||||||||||||||||||||||||
2028
|
81 | 4,134 | 5.1 | 79 | 4,085 | 5.0 | 2 | 49 | 0.1 | |||||||||||||||||||||||||||
2029
|
49 | 1,273 | 1.6 | 48 | 1,258 | 1.6 | 1 | 15 | * | |||||||||||||||||||||||||||
2030
|
26 | 945 | 1.2 | 26 | 945 | 1.2 | -- | -- | -- | |||||||||||||||||||||||||||
2031
|
27 | 649 | 0.8 | 27 | 649 | 0.8 | -- | -- | -- | |||||||||||||||||||||||||||
2032
|
1 | 18 | * | 1 | 18 | * | -- | -- | -- | |||||||||||||||||||||||||||
2033
|
7 | 460 | 0.6 | 7 | 460 | 0.6 | -- | -- | -- | |||||||||||||||||||||||||||
2034
|
2 | 258 | 0.3 | 2 | 258 | 0.3 | -- | -- | -- | |||||||||||||||||||||||||||
2037
|
2 | 354 | 0.4 | 2 | 354 | 0.4 | -- | -- | -- | |||||||||||||||||||||||||||
2043
|
1 | 13 | * | -- | -- | -- | 1 | 13 | * | |||||||||||||||||||||||||||
Totals
|
2,257 | $ | 80,877 | 100.0 | % | 1,890 | $ | 72,767 | 89.8 | % | 367 | $ | 8,110 | 10.2 | % |
(1)
|
Excludes ten multi-tenant properties and 77 vacant unleased properties. The lease expirations for properties under construction are based on the estimated date of completion of those properties.
|
(2)
|
Includes rental revenue of $104 from properties reclassified to discontinued operations and excludes revenue of $2,386 from ten multi-tenant properties and from 77 vacant and unleased properties at March 31, 2010.
|
(3)
|
Represents leases to the initial tenant of the property that are expiring for the first time.
|
(4)
|
Represents lease expirations on properties in the portfolio, which have previously been renewed, extended or re-tenanted.
|
Approximate
|
Rental Revenue for
|
Percentage of
|
||||||||||||||||||
Number of
|
Percent
|
Leasable
|
the Quarter Ended
|
Rental
|
||||||||||||||||
State
|
Properties
|
Leased
|
Square Feet
|
March 31, 2010
(1)
|
Revenue
|
|||||||||||||||
Alabama
|
63 | 97 | % | 425,300 | $ | 1,814 | 2.2 | % | ||||||||||||
Alaska
|
2 | 100 | 128,500 | 277 | 0.3 | |||||||||||||||
Arizona
|
80 | 99 | 395,800 | 2,495 | 3.0 | |||||||||||||||
Arkansas
|
17 | 94 | 92,400 | 379 | 0.5 | |||||||||||||||
California
|
66 | 97 | 1,223,500 | 4,363 | 5.2 | |||||||||||||||
Colorado
|
51 | 96 | 471,500 | 1,796 | 2.2 | |||||||||||||||
Connecticut
|
24 | 100 | 276,600 | 1,191 | 1.4 | |||||||||||||||
Delaware
|
17 | 100 | 33,300 | 432 | 0.5 | |||||||||||||||
Florida
|
166 | 93 | 1,426,700 | 6,588 | 7.9 | |||||||||||||||
Georgia
|
132 | 96 | 916,800 | 3,848 | 4.6 | |||||||||||||||
Hawaii
|
-- | -- | -- | -- | -- | |||||||||||||||
Idaho
|
12 | 100 | 80,700 | 308 | 0.4 | |||||||||||||||
Illinois
|
85 | 98 | 1,008,800 | 5,026 | 6.0 | |||||||||||||||
Indiana
|
82 | 95 | 729,300 | 3,236 | 3.9 | |||||||||||||||
Iowa
|
21 | 100 | 290,600 | 1,015 | 1.2 | |||||||||||||||
Kansas
|
33 | 85 | 573,200 | 1,146 | 1.4 | |||||||||||||||
Kentucky
|
22 | 100 | 110,600 | 681 | 0.8 | |||||||||||||||
Louisiana
|
32 | 100 | 184,900 | 904 | 1.1 | |||||||||||||||
Maine
|
3 | 100 | 22,500 | 161 | 0.2 | |||||||||||||||
Maryland
|
28 | 100 | 266,600 | 1,604 | 1.9 | |||||||||||||||
Massachusetts
|
64 | 98 | 575,400 | 2,572 | 3.1 | |||||||||||||||
Michigan
|
52 | 98 | 257,300 | 1,272 | 1.5 | |||||||||||||||
Minnesota
|
20 | 100 | 389,000 | 1,547 | 1.9 | |||||||||||||||
Mississippi
|
71 | 96 | 347,600 | 1,467 | 1.8 | |||||||||||||||
Missouri
|
62 | 95 | 640,100 | 2,180 | 2.6 | |||||||||||||||
Montana
|
2 | 100 | 30,000 | 76 | 0.1 | |||||||||||||||
Nebraska
|
19 | 95 | 196,300 | 504 | 0.6 | |||||||||||||||
Nevada
|
14 | 100 | 153,300 | 757 | 0.9 | |||||||||||||||
New Hampshire
|
14 | 100 | 109,900 | 584 | 0.7 | |||||||||||||||
New Jersey
|
33 | 100 | 261,300 | 1,937 | 2.3 | |||||||||||||||
New Mexico
|
9 | 100 | 58,400 | 190 | 0.2 | |||||||||||||||
New York
|
40 | 93 | 502,300 | 2,375 | 2.9 | |||||||||||||||
North Carolina
|
95 | 98 | 538,300 | 2,868 | 3.4 | |||||||||||||||
North Dakota
|
6 | 100 | 36,600 | 62 | 0.1 | |||||||||||||||
Ohio
|
136 | 95 | 845,500 | 3,331 | 4.0 | |||||||||||||||
Oklahoma
|
24 | 100 | 137,400 | 587 | 0.7 | |||||||||||||||
Oregon
|
18 | 94 | 297,300 | 838 | 1.0 | |||||||||||||||
Pennsylvania
|
98 | 99 | 677,200 | 3,512 | 4.2 | |||||||||||||||
Rhode Island
|
3 | 100 | 11,000 | 58 | 0.1 | |||||||||||||||
South Carolina
|
99 | 100 | 372,500 | 2,228 | 2.7 | |||||||||||||||
South Dakota
|
9 | 100 | 24,900 | 102 | 0.1 | |||||||||||||||
Tennessee
|
133 | 97 | 621,800 | 2,931 | 3.5 | |||||||||||||||
Texas
|
215 | 97 | 2,292,000 | 8,470 | 10.2 | |||||||||||||||
Utah
|
4 | 100 | 25,200 | 93 | 0.1 | |||||||||||||||
Vermont
|
4 | 100 | 12,700 | 126 | 0.2 | |||||||||||||||
Virginia
|
104 | 97 | 637,100 | 3,421 | 4.1 | |||||||||||||||
Washington
|
36 | 92 | 286,200 | 953 | 1.1 | |||||||||||||||
West Virginia
|
2 | 100 | 23,000 | 121 | 0.2 | |||||||||||||||
Wisconsin
|
21 | 90 | 252,700 | 819 | 1.0 | |||||||||||||||
Wyoming
|
1 | 100 | 5,400 | 18 | * | |||||||||||||||
Totals/Average
|
2,344 | 97 | % | 19,275,300 | $ | 83,263 | 100.0 | % |
(1)
|
Includes rental revenue for all properties owned by Realty Income at March 31, 2010, including revenue from properties reclassified to discontinued operations of $104.
|
Year of maturity
|
Fixed rate
debt
|
Average interest rate
on fixed rate debt
|
Variable rate
debt
|
Average interest rate
on variable rate debt
|
||||||||||||
2010
|
$ | -- | -- | % | $ | -- | -- | % | ||||||||
2011
(1)
|
-- | -- | 39.9 | 1.24 | ||||||||||||
2012
|
-- | -- | -- | -- | ||||||||||||
2013
(2)
|
100.0 | 5.38 | -- | -- | ||||||||||||
2014
|
-- | -- | -- | -- | ||||||||||||
Thereafter
(3)
|
1,250.0 | 6.16 | -- | -- | ||||||||||||
Totals
|
$ | 1,350.0 | 6.10 | % | $ | 39.9 | 1.24 | % | ||||||||
Fair Value
(4)
|
$ | 1,336.2 | $ | 39.9 |
(1)
|
The credit facility expires in May 2011.
|
(2)
|
$100 million matures in March 2013.
|
(3)
|
$150 million matures in November 2015, $275 million matures in September 2016, $175 million matures in September 2017, $550 million matures in August 2019 and $100 million matures in March 2035.
|
(4)
|
We base the fair value of the fixed rate debt at March 31, 2010 on the indicative market prices and recent trading activity of our notes payable. The fair value of the variable rate debt approximates its carrying value because its terms are similar to those available in the marketplace at March 31, 2010.
|
Item 4.
|
PART II.
|
Item 1A.
|
Item 6.
|
Exhibit No.
|
Description
|
3.1 |
Articles of Incorporation of the Company, as amended by amendment No. 1 dated May 10, 2005 and amendment No. 2 dated May 10, 2005 (filed as exhibit 3.1 to the Company’s Form 10-Q dated June 30, 2005, and incorporated herein by reference).
|
||
3.2 |
Amended and Restated Bylaws of the Company dated December 12, 2007 (filed as exhibit 3.1 to the Company’s Form 8-K, filed on December 13, 2007 and dated December 12, 2007 and incorporated herein by reference), as amended on May 13, 2008 (amendment filed as exhibit 3.1 to the Company’s Form 8-K, filed on May 14, 2008 and dated May 13, 2008, and incorporated herein by reference).
|
||
3.3 |
Articles Supplementary to the Articles of Incorporation of the Company classifying and designating the 7.375% Monthly Income Class D Cumulative Redeemable Preferred Stock (filed as exhibit 3.8 to the Company’s Form 8-A, filed on May 25, 2004 and incorporated herein by reference).
|
||
3.4 |
Articles Supplementary to the Articles of Incorporation of the Company classifying and designating additional shares of the 7.375% Monthly Income Class D Cumulative Redeemable Preferred Stock (filed as exhibit 3.2 to the Company’s Form 8-K, filed on October 19, 2004 and dated October 12, 2004 and incorporated herein by reference).
|
||
3.5 |
Articles Supplementary to the Articles of Incorporation of the Company classifying and designating the 6.75% Class E Cumulative Redeemable Preferred Stock (filed as exhibit 3.5 to the Company’s Form 8-A, filed on December 5, 2006 and incorporated herein by reference).
|
4.1 |
Indenture dated as of October 28, 1998 between the Company and The Bank of New York (filed as exhibit 4.1 to the Company’s Form 8-K, filed on October 28, 1998 and dated October 27, 1998 and incorporated herein by reference).
|
||
4.2 |
Form of 5.375% Senior Notes due 2013 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on March 7, 2003 and dated March 5, 2003 and incorporated herein by reference).
|
||
4.3 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.375% Senior Notes due 2013 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on March 7, 2003 and dated March 5, 2003 and incorporated herein by reference).
|
||
4.4 |
Form of 5.50% Senior Notes due 2015 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on November 24, 2003 and dated November 19, 2003 and incorporated herein by reference).
|
||
4.5 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.50% Senior Notes due 2015 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on November 24, 2003 and dated November 19, 2003 and incorporated herein by reference).
|
||
4.6 |
Form of 5.875% Senior Notes due 2035 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on March 11, 2005 and dated March 8, 2005 and incorporated herein by reference).
|
||
4.7 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.875% Senior Debentures due 2035 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on March 11, 2005 and dated March 8, 2005 and incorporated herein by reference).
|
||
4.8 |
Form of 5.375% Senior Notes due 2017 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on September 16, 2005 and dated September 8, 2005 and incorporated herein by reference).
|
||
4.9 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.375% Senior Notes due 2017 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on September 16, 2005 and dated September 8, 2005 and incorporated herein by reference).
|
||
4.10 |
Form of 5.95% Senior Notes due 2016 (filed as exhibit 4.2 to the Company’s Form
8-K, filed on September 18, 2006 and dated September 6, 2006 and incorporated herein by reference).
|
4.11 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York, as Trustee, establishing a series of securities entitled 5.95% Senior Notes due 2016 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on September 18, 2006 and dated September 6, 2006 and incorporated herein by reference).
|
||
4.12 |
Form of 6.75% Notes due 2019 (filed as exhibit 4.2 to the Company’s Form 8-K, filed on September 5, 2007 and dated August 30, 2007 and incorporated herein by reference).
|
||
4.13 |
Officer’s Certificate pursuant to sections 201, 301 and 303 of the Indenture dated October 28, 1998 between the Company and The Bank of New York Trust Company, N.A., as Trustee, establishing a series of securities entitled 6.75% Senior Notes due 2019 (filed as exhibit 4.3 to the Company’s Form 8-K, filed on September 5, 2007 and dated August 30, 2007 and incorporated herein by reference).
|
* 10.1 |
Form of Restricted Stock Agreement for John P. Case.
|
* 31.1 |
Rule 13a-14(a) Certifications as filed by the Chief Executive Officer pursuant to SEC release No. 33-8212 and 34-47551.
|
||
* 31.2 |
Rule 13a-14(a) Certifications as filed by the Chief Financial Officer pursuant to SEC release No. 33-8212 and 34-47551.
|
||
* 32 |
Section 1350 Certifications as furnished by the Chief Executive Officer and the Chief Financial Officer pursuant to SEC release No. 33-8212 and 34-47551.
|
||
* Filed herewith
|
REALTY INCOME CORPORATION
|
|
Date: April 28, 2010
|
/s/ GREGORY J. FAHEY
|
Gregory J. Fahey
|
|
Vice President, Controller
|
|
(Principal Accounting Officer)
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Thomas A. Lewis
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Paul M. Meurer
|