Maryland
|
33-0580106
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(IRS Employer Identification Number)
|
PART I.
FINANCIAL INFORMATION
|
Page
|
||||
Item 1:
|
|||||
2 | |||||
3 | |||||
4 | |||||
5 | |||||
Item 2:
|
|||||
18 | |||||
19 | |||||
21 | |||||
24 | |||||
29 | |||||
36 | |||||
37 | |||||
38 | |||||
44 | |||||
44 | |||||
44 | |||||
Item 3:
|
44 | ||||
Item 4:
|
45 | ||||
PART II.
OTHER INFORMATION
|
|||||
Item 1A:
|
46 | ||||
Item 2:
|
46 | ||||
Item 6:
|
46 | ||||
|
49 |
FINANCIAL INFORMATION
|
Financial Statements
|
CONSOLIDATED BALANCE SHEETS
|
2011
|
2010
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Real estate, at cost:
|
||||||||
Land
|
$ | 1,689,523 | $ | 1,520,413 | ||||
Buildings and improvements
|
3,111,258 | 2,592,449 | ||||||
Total real estate, at cost
|
4,800,781 | 4,112,862 | ||||||
Less accumulated depreciation and amortization
|
(786,863 | ) | (711,615 | ) | ||||
Net real estate held for investment
|
4,013,918 | 3,401,247 | ||||||
Real estate held for sale, net
|
4,158 | 3,631 | ||||||
Net real estate
|
4,018,076 | 3,404,878 | ||||||
Cash and cash equivalents
|
5,543 | 17,607 | ||||||
Accounts receivable, net
|
12,065 | 11,301 | ||||||
Goodwill
|
17,206 | 17,206 | ||||||
Other assets, net
|
221,884 | 84,598 | ||||||
Total assets
|
$ | 4,274,774 | $ | 3,535,590 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Distributions payable
|
$ | 21,360 | $ | 19,051 | ||||
Accounts payable and accrued expenses
|
34,538 | 47,019 | ||||||
Other liabilities
|
28,584 | 22,555 | ||||||
Line of credit payable
|
96,600 | -- | ||||||
Mortgages payable, net
|
68,150 | -- | ||||||
Notes payable
|
1,750,000 | 1,600,000 | ||||||
Total liabilities
|
1,999,232 | 1,688,625 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock and paid in capital, par value $0.01 per share,
|
||||||||
20,000,000 shares authorized, 13,900,000 shares issued
|
||||||||
and outstanding in 2011 and 2010
|
337,790 | 337,790 | ||||||
Common stock and paid in capital, par value $0.01 per share,
|
||||||||
200,000,000 shares authorized, 133,202,323 and 118,058,988
|
||||||||
shares issued and outstanding as of September 30, 2011 and
|
||||||||
December 31, 2010, respectively
|
2,560,612 | 2,066,287 | ||||||
Distributions in excess of net income
|
(622,860 | ) | (557,112 | ) | ||||
Total stockholders' equity
|
2,275,542 | 1,846,965 | ||||||
Total liabilities and stockholders' equity
|
$ | 4,274,774 | $ | 3,535,590 |
The accompanying notes to consolidated financial statements are an integral part of these statements.
|
CONSOLIDATED STATEMENTS OF INCOME
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
REVENUE
|
||||||||||||||||
Rental
|
$ | 106,808 | $ | 86,749 | $ | 306,746 | $ | 251,237 | ||||||||
Other
|
488 | 84 | 886 | 385 | ||||||||||||
Total revenue
|
107,296 | 86,833 | 307,632 | 251,622 | ||||||||||||
EXPENSES
|
||||||||||||||||
Depreciation and amortization
|
31,869 | 23,941 | 87,542 | 70,145 | ||||||||||||
Interest
|
28,550 | 25,135 | 79,318 | 68,106 | ||||||||||||
General and administrative
|
7,143 | 6,165 | 23,001 | 19,526 | ||||||||||||
Property
|
1,698 | 1,742 | 5,102 | 5,324 | ||||||||||||
Income taxes
|
367 | 335 | 1,102 | 890 | ||||||||||||
Total expenses
|
69,627 | 57,318 | 196,065 | 163,991 | ||||||||||||
Income from continuing operations
|
37,669 | 29,515 | 111,567 | 87,631 | ||||||||||||
Income from discontinued operations
|
3,111 | 2,139 | 4,460 | 5,276 | ||||||||||||
Net income
|
40,780 | 31,654 | 116,027 | 92,907 | ||||||||||||
Preferred stock cash dividends
|
(6,063 | ) | (6,063 | ) | (18,190 | ) | (18,190 | ) | ||||||||
Net income available to common stockholders
|
$ | 34,717 | $ | 25,591 | $ | 97,837 | $ | 74,717 | ||||||||
Amounts available to common stockholders per common share:
|
||||||||||||||||
Income from continuing operations:
|
||||||||||||||||
Basic
|
$ | 0.25 | $ | 0.23 | $ | 0.75 | $ | 0.67 | ||||||||
Diluted
|
$ | 0.25 | $ | 0.23 | $ | 0.75 | $ | 0.67 | ||||||||
Net income:
|
||||||||||||||||
Basic
|
$ | 0.27 | $ | 0.25 | $ | 0.79 | $ | 0.72 | ||||||||
Diluted
|
$ | 0.27 | $ | 0.25 | $ | 0.79 | $ | 0.72 | ||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
126,376,201 | 103,830,029 | 123,921,317 | 103,781,108 | ||||||||||||
Diluted
|
126,582,609 | 103,977,023 | 124,013,142 | 103,887,679 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 116,027 | $ | 92,907 | ||||
Adjustments to net income:
|
||||||||
Depreciation and amortization
|
87,542 | 70,145 | ||||||
Income from discontinued operations
|
(4,460 | ) | (5,276 | ) | ||||
Gain on sale of land
|
(210 | ) | -- | |||||
Amortization of share-based compensation
|
6,098 | 4,824 | ||||||
Amortization of net premiums on mortgages payable
|
(98 | ) | -- | |||||
Provision for impairment on real estate held for investment
|
10 | -- | ||||||
Cash provided by discontinued operations:
|
||||||||
Real estate
|
773 | 2,055 | ||||||
Collection of principal on notes receivable
|
110 | 103 | ||||||
Change in assets and liabilities:
|
||||||||
Accounts receivable and other assets
|
8,672 | 7,023 | ||||||
Accounts payable, accrued expenses and other liabilities
|
(15,217 | ) | (15,020 | ) | ||||
Net cash provided by operating activities
|
199,247 | 156,761 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Acquisition of income producing investment properties
|
(766,148 | ) | (304,615 | ) | ||||
Proceeds from the sales of real estate:
|
||||||||
Continuing operations
|
783 | -- | ||||||
Discontinued operations
|
11,692 | 15,294 | ||||||
Restricted escrow deposits
|
(2,830 | ) | (5,687 | ) | ||||
Net cash used in investing activities
|
(756,503 | ) | (295,008 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Cash distributions to common stockholders
|
(161,276 | ) | (134,700 | ) | ||||
Cash dividends to preferred stockholders
|
(18,190 | ) | (18,190 | ) | ||||
Borrowings under line of credit
|
378,100 | 408,700 | ||||||
Payments on line of credit
|
(281,500 | ) | (413,300 | ) | ||||
Principal payments on mortgages
|
(138 | ) | -- | |||||
Proceeds from common stock offerings, net
|
489,236 | 196,899 | ||||||
Proceeds from bonds issued, net of financing costs of $9,923
|
140,077 | -- | ||||||
Proceeds from notes issued, net of financing costs of $3,869
|
-- | 246,131 | ||||||
Proceeds from dividend reinvestment and stock purchase plan, net
|
1,242 | -- | ||||||
Other items
|
(2,359 | ) | (1,737 | ) | ||||
Net cash provided by financing activities
|
545,192 | 283,803 | ||||||
Net increase (decrease) in cash and cash equivalents
|
(12,064 | ) | 145,556 | |||||
Cash and cash equivalents, beginning of period
|
17,607 | 10,026 | ||||||
Cash and cash equivalents, end of period
|
$ | 5,543 | $ | 155,582 |
1.
|
Management Statement
|
2.
|
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements
|
September 30,
|
December 31,
|
|||||||
D. Other assets consist of the following (dollars in thousands) at:
|
2011
|
2010
|
||||||
Value of in-place and above market leases, net
|
$ | 150,124 | $ | 26,221 | ||||
Deferred bond financing costs, net
|
22,729 | 14,203 | ||||||
Notes receivable issued in connection with Crest property sales
|
21,965 | 22,075 | ||||||
Note receivable assumed in connection with 2011 acquisitions
|
8,780 | -- | ||||||
Prepaid expenses
|
8,236 | 8,431 | ||||||
Restricted escrow deposits
|
2,830 | 6,361 | ||||||
Credit facility origination costs, net
|
3,508 | 4,619 | ||||||
Deferred financing costs on assumed mortgages payable, net
|
835 | -- | ||||||
Corporate assets, net of accumulated depreciation and amortization
|
739 | 827 | ||||||
Other items
|
2,138 | 1,861 | ||||||
$ | 221,884 | $ | 84,598 |
E. Distributions payable consist of the following declared
|
September 30,
|
December 31,
|
||||||
distributions (dollars in thousands) at:
|
2011 | 2010 | ||||||
Common stock distributions
|
$ | 19,339 | $ | 17,030 | ||||
Preferred stock dividends
|
2,021 | 2,021 | ||||||
$ | 21,360 | $ | 19,051 | |||||
F. Accounts payable and accrued expenses consist of the
|
September 30,
|
December 31,
|
||||||
following (dollars in thousands) at:
|
2011 | 2010 | ||||||
Bond interest payable
|
$ | 12,925 | $ | 33,240 | ||||
Accrued costs on properties under development
|
5,023 | 420 | ||||||
Other items
|
16,590 | 13,359 | ||||||
$ | 34,538 | $ | 47,019 |
September 30,
|
December 31,
|
|||||||
G. Other liabilities consist of the following (dollars in thousands) at:
|
2011
|
2010
|
||||||
Rent received in advance
|
$ | 17,496 | $ | 14,564 | ||||
Value of in-place below-market leases, net
|
6,600 | 3,452 | ||||||
Security deposits
|
4,488 | 4,539 | ||||||
$ | 28,584 | $ | 22,555 |
(1)
|
In March, we announced the signing of definitive purchase agreements to acquire 33 single-tenant retail, distribution, office and manufacturing properties for approximately $544 million. Between March and August, we acquired 32 of the 33 properties for $524.8 million. We anticipate that we will acquire the one remaining property during the fourth quarter of 2011.
|
(2)
|
In August, we acquired 60 properties operating in the restaurant - quick service industry for $41.9 million, under long-term, triple net lease agreements.
|
(3)
|
In September, we acquired six properties operating in the wholesale clubs industry for $156.1 million, under long-term, triple net lease agreements.
|
(4)
|
In September, we acquired nine properties operating in the health and fitness industry for $63.2 million, under long-term, triple net lease agreements.
|
(5)
|
The remaining 18 properties acquired totaled approximately $40.4 million and were acquired at various times during 2011.
|
Total revenue
|
Income from
continuing operations
|
|||||||
Supplemental pro forma for the nine months ended September 30, 2011
(1)
|
$ | 342.1 | $ | 115.4 | ||||
Supplemental pro forma for the nine months ended September 30, 2010
(1)
|
$ | 300.4 | $ | 92.3 |
A.
|
General
|
September 30,
2011
|
December 31,
2010
|
|||||||
5.375% notes, issued in March 2003 and due in March 2013
|
$ | 100 | $ | 100 | ||||
5.5% notes, issued in November 2003 and due in November 2015
|
150 | 150 | ||||||
5.95% notes, issued in September 2006 and due in September 2016
|
275 | 275 | ||||||
5.375% notes, issued in September 2005 and due in September 2017
|
175 | 175 | ||||||
6.75% notes, issued in September 2007 and due in August 2019
|
550 | 550 | ||||||
5.75% notes, issued in June 2010 and due in January 2021
|
250 | 250 | ||||||
5.875% bonds, $100 issued in March 2005 and $150 issued in
June 2011, both due in March 2035
|
250 | 100 | ||||||
$ | 1,750 | $ | 1,600 |
B.
|
Re-opening of Unsecured Bonds due 2035
|
C.
|
Note Issuance
|
6.
|
Mortgages Payable
|
Tenant Name
|
Stated
Interest
Rate
(1)
|
Effective
Interest
Rate
|
Maturity
Date
(2)
|
Remaining
Principal
Balance
(2)
|
Amortized
Premium
(Discount)
Balance
|
Mortgage
Payable
Balance
|
|||||||||||||||
Aviall Services, Inc.
(3)
|
6.25 | % | 4.96 | % |
12/1/13
|
$ | 12,512 | $ | 406 | $ | 12,918 | ||||||||||
Aviall Services, Inc.
(3)
|
6.25 | % | 4.82 | % |
9/1/14
|
11,710 | 343 | 12,053 | |||||||||||||
T-Mobile USA, Inc.
|
5.89 | % | 5.15 | % |
5/6/14
|
10,664 | 182 | 10,846 | |||||||||||||
MeadWestvaco Corporation
|
4.73 | % | 4.89 | % |
6/10/15
|
23,625 | (72 | ) | 23,553 | ||||||||||||
Solae, LLC
(3)(4)
|
8.26 | % | 8.26 | % |
12/28/13
|
4,510 | -- | 4,510 | |||||||||||||
Solae, LLC
(3)(4)
|
8.26 | % | 8.26 | % |
12/28/13
|
4,270 | -- | 4,270 | |||||||||||||
$ | 67,291 | $ | 859 | $ | 68,150 |
|
(1)
With the exception of the MeadWestvaco Corporation mortgage, the mortgages are at fixed interest rates. The MeadWestvaco Corporation mortgage is at a floating variable interest rate calculated as the sum of the current 1 month LIBOR plus 4.50%, not to exceed an all-in interest rate of 5.5%.
|
|
(2)
The mortgages require monthly payments, with a principal payment due at maturity.
|
|
(3)
These are mortgages associated with one property occupied by the applicable tenant.
|
|
(4)
As part of the assumption of these mortgages payable related to our acquisition of Solae, LLC, we also assumed an $8.8 million note receivable, upon which we will receive interest income at a stated rate of 8.14% through December 28, 2013.
|
Carrying value per
|
Estimated
|
|||||||
At September 30, 2011
|
balance sheet
|
fair value
|
||||||
Notes receivable issued in connection with Crest property sales
|
$ | 22.0 | $ | 23.0 | ||||
Mortgages payable
|
$ | 68.2 | $ | 68.1 | ||||
Notes payable
|
$ | 1,750.0 | $ | 1,874.4 |
Carrying value per
|
Estimated
|
|||||||
At December 31, 2010
|
balance sheet
|
fair value
|
||||||
Notes receivable issued in connection with Crest property sales
|
$ | 22.1 | $ | 23.2 | ||||
Notes payable
|
$ | 1,600.0 | $ | 1,707.1 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Income from discontinued operations
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Gain on sales of investment properties
|
$ | 3,094 | $ | 1,919 | $ | 4,319 | $ | 4,284 | ||||||||
Rental revenue
|
83 | 519 | 439 | 2,209 | ||||||||||||
Other revenue
|
7 | 7 | 35 | 25 | ||||||||||||
Depreciation and amortization
|
(26 | ) | (260 | ) | (264 | ) | (892 | ) | ||||||||
Property expenses
|
(111 | ) | (230 | ) | (365 | ) | (896 | ) | ||||||||
Provisions for impairment
|
(158 | ) | (84 | ) | (368 | ) | (171 | ) | ||||||||
Crest’s income from discontinued operations
|
222 | 268 | 664 | 717 | ||||||||||||
Income from discontinued operations
|
$ | 3,111 | $ | 2,139 | $ | 4,460 | $ | 5,276 | ||||||||
Per common share, basic and diluted
|
$ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.05 |
Month
|
2011
|
2010
|
||||||
January
|
$ | 0.1442500 | $ | 0.1430000 | ||||
February
|
0.1442500 | 0.1430000 | ||||||
March
|
0.1442500 | 0.1430000 | ||||||
April
|
0.1445625 | 0.1433125 | ||||||
May
|
0.1445625 | 0.1433125 | ||||||
June
|
0.1445625 | 0.1433125 | ||||||
July
|
0.1448750 | 0.1436250 | ||||||
August
|
0.1448750 | 0.1436250 | ||||||
September
|
0.1448750 | 0.1436250 | ||||||
Total
|
$ | 1.3010625 | $ | 1.2898125 |
12.
|
Net Income Per Common Share
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Weighted average shares used for the basic net income per share computation
|
126,376,201 | 103,830,029 | 123,921,317 | 103,781,108 | ||||||||||||
Incremental shares from share-based compensation
|
206,408 | 146,994 | 91,825 | 106,571 | ||||||||||||
Adjusted weighted average shares used for diluted net income per share computation
|
126,582,609 | 103,977,023 | 124,013,142 | 103,887,679 | ||||||||||||
Unvested shares from share-based compensation that were anti-dilutive
|
262,076 | 87,000 | 12,510 | 87,000 |
13.
|
Supplemental Disclosures of Cash Flow Information
|
September 30,
|
December 31,
|
|||||||
Assets, as of:
|
2011
|
2010
|
||||||
Segment net real estate:
|
||||||||
Automotive service
|
$ | 104,676 | $ | 107,507 | ||||
Automotive tire services
|
191,071 | 195,883 | ||||||
Beverages
|
308,512 | 302,159 | ||||||
Child care
|
67,682 | 72,935 | ||||||
Convenience stores
|
695,711 | 711,667 | ||||||
Drug stores
|
155,223 | 143,739 | ||||||
Health and fitness
|
292,734 | 220,653 | ||||||
Restaurants - casual dining
|
476,004 | 487,141 | ||||||
Restaurants - quick service
|
279,744 | 247,475 | ||||||
Sporting goods
|
81,005 | 82,966 | ||||||
Theaters
|
386,693 | 281,072 | ||||||
Transportation services
|
96,966 | 4,961 | ||||||
Wholesale clubs
|
155,979 | - | ||||||
26 non-reportable segments
|
726,076 | 546,720 | ||||||
Total segment net real estate
|
4,018,076 | 3,404,878 | ||||||
Intangible assets:
Automotive tire services
|
544 | 588 | ||||||
Beverages
|
3,635 | - | ||||||
Drug stores
|
14,708 | 5,939 | ||||||
Health and fitness
|
1,601 | 1,708 | ||||||
Restaurants - quick service
|
4,180 | - | ||||||
Sporting goods
|
5,439 | 5,786 | ||||||
Theaters
|
32,338 | 1,579 | ||||||
Transportation services
|
22,454 | - | ||||||
Other - non-reportable segments
|
65,225 | 10,621 | ||||||
Goodwill:
|
||||||||
Automotive service
|
1,338 | 1,338 | ||||||
Child care
|
5,353 | 5,353 | ||||||
Convenience stores
|
2,074 | 2,074 | ||||||
Restaurants - casual dining
|
2,461 | 2,461 | ||||||
Restaurants - quick service
|
1,318 | 1,318 | ||||||
Other - non-reportable segments
|
4,662 | 4,662 | ||||||
Other corporate assets
|
89,368 | 87,285 | ||||||
Total assets
|
$ | 4,274,774 | $ | 3,535,590 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Revenue
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Segment rental revenue:
|
||||||||||||||||
Automotive service
|
$ | 3,979 | $ | 4,018 | $ | 12,078 | $ | 11,907 | ||||||||
Automotive tire services
|
5,507 | 5,476 | 17,486 | 16,476 | ||||||||||||
Beverages
|
5,960 | 4,838 | 17,472 | 5,158 | ||||||||||||
Child care
|
5,547 | 5,670 | 16,713 | 16,630 | ||||||||||||
Convenience stores
|
19,512 | 14,340 | 58,355 | 42,775 | ||||||||||||
Drug stores
|
4,017 | 3,479 | 11,777 | 10,343 | ||||||||||||
Health and fitness
|
6,482 | 5,833 | 18,978 | 17,587 | ||||||||||||
Restaurants - casual dining
|
11,611 | 11,337 | 34,692 | 34,169 | ||||||||||||
Restaurants - quick service
|
6,767 | 6,370 | 19,961 | 20,055 | ||||||||||||
Sporting goods
|
2,791 | 2,232 | 8,294 | 6,494 | ||||||||||||
Theaters
|
9,779 | 7,563 | 25,715 | 22,690 | ||||||||||||
Transportation services
|
2,298 | 187 | 5,146 | 562 | ||||||||||||
Wholesale clubs
|
34 | - | 34 | - | ||||||||||||
26 non-reportable segments
|
22,524 | 15,406 | 60,045 | 46,391 | ||||||||||||
Total rental revenue
|
106,808 | 86,749 | 306,746 | 251,237 | ||||||||||||
Other revenue
|
488 | 84 | 886 | 385 | ||||||||||||
Total revenue
|
$ | 107,296 | $ | 86,833 | $ | 307,632 | $ | 251,622 |
For the nine
months ended
September 30, 2011
|
For the year ended
December 31, 2010
|
|||||||||||||||
Number of
shares
|
Weighted
average
price
(1)
|
Number of
shares
|
Weighted
average
price
(1)
|
|||||||||||||
Outstanding nonvested shares, beginning of year
|
924,294 | $ | 19.69 | 853,234 | $ | 19.14 | ||||||||||
Shares granted
|
247,014 | 33.94 | 278,200 | 28.99 | ||||||||||||
Shares vested
|
(245,094 | ) | 25.26 | (206,153 | ) | 23.70 | ||||||||||
Shares forfeited
|
(348 | ) | 31.06 | (987 | ) | 26.03 | ||||||||||
Outstanding nonvested
shares, end of each period
|
925,866 | $ | 22.12 | 924,294 | $ | 19.69 |
-
|
$0.1451875 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.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
●
|
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; and
|
●
|
Future expenditures for development projects.
|
●
|
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 commercial enterprises; and
|
●
|
Leased under long-term, net-lease agreements.
|
●
|
Of 2,600 properties;
|
●
|
With an occupancy rate of 97.7%, or 2,541 properties leased and only 59 properties available for lease;
|
●
|
Leased to 134 different retail and other commercial enterprises doing business in 38 separate industries;
|
●
|
Located in 49 states;
|
●
|
With over 26.8 million square feet of leasable space; and
|
●
|
With an average leasable space per property of approximately 10,300 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), additional rent calculated as a percentage of the tenants' gross sales above a specified level, or fixed increases.
|
●
|
Properties that are freestanding, commercially-zoned with a single tenant;
|
●
|
Properties that are important locations for regional and national commercial enterprises;
|
●
|
Properties that we deem to be profitable for the tenants and/or can generally be characterized as important to the operations of the company’s business;
|
●
|
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 the various industries of our tenants; and
|
●
|
The operation, management, business planning, and financial condition of our 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.
|
(1)
|
In March, we announced the signing of definitive purchase agreements to acquire 33 single-tenant retail, distribution, office and manufacturing properties for approximately $544 million. Between March and August, we acquired 32 of the 33 properties for $524.8 million. We anticipate that we will acquire the one remaining property during the fourth quarter of 2011.
|
(2)
|
In August, we acquired 60 properties operating in the restaurant - quick service industry for $41.9 million, under long-term, triple net lease agreements.
|
(3)
|
In September, we acquired six properties operating in the wholesale clubs industry for $156.1 million, under long-term, triple net lease agreements.
|
(4)
|
In September, we acquired nine properties operating in the health and fitness industry for $63.2 million, under long-term, triple net lease agreements.
|
(5)
|
The remaining 18 properties acquired totaled approximately $40.4 million and were acquired at various times during 2011.
|
●
|
Leased 25 properties;
|
●
|
Sold 18 properties available for lease; and
|
●
|
Have 18 new properties available for lease.
|
●
|
Shares of our common stock outstanding of 133,202,323 multiplied by the last reported sales price of our common stock on the NYSE of $32.24 per share on September 30, 2011, or $4.29 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 mortgages payable of $68.2 million;
|
●
|
Outstanding borrowings of $96.6 million on our credit facility; and
|
●
|
Outstanding senior unsecured notes and bonds of $1.75 billion.
|
5.375% notes, issued in March 2003 and due in March 2013
|
$ | 100 | ||
5.5% notes, issued in November 2003 and due in November 2015
|
150 | |||
5.95% notes, issued in September 2006 and due in September 2016
|
275 | |||
5.375% notes, issued in September 2005 and due in September 2017
|
175 | |||
6.75% notes, issued in September 2007 and due in August 2019
|
550 | |||
5.75% notes, issued in June 2010 and due in January 2021
|
250 | |||
5.875% bonds, $100 issued in March 2005 and $150 issued in
June 2011, both due in March 2035
|
250 | |||
$ | 1,750 |
Table of Obligations
|
Ground
|
Ground
|
||||||||||||||||||||||||||||||
Leases
|
Leases
|
|||||||||||||||||||||||||||||||
Paid by
|
Paid by
|
|||||||||||||||||||||||||||||||
Year of
|
Credit
|
Notes and
|
Mortgages
|
Realty
|
Our
|
|||||||||||||||||||||||||||
Maturity
|
Facility
(1)
|
Bonds
|
Payable
(2)
|
Interest
(3)
|
Income
(4)
|
Tenants
(5)
|
Other
(6)
|
Totals
|
||||||||||||||||||||||||
2011
|
$ | -- | $ | -- | $ | 0.2 | $ | 27.9 | $ | -- | $ | 1.0 | $ | 5.7 | $ | 34.8 | ||||||||||||||||
2012
|
-- | -- | 0.6 | 111.6 | 0.2 | 4.0 | 10.0 | 126.4 | ||||||||||||||||||||||||
2013
|
-- | 100.0 | 20.9 | 107.4 | 0.2 | 3.9 | -- | 232.4 | ||||||||||||||||||||||||
2014
|
96.6 | -- | 22.0 | 102.6 | 0.2 | 3.7 | -- | 225.1 | ||||||||||||||||||||||||
2015
|
-- | 150.0 | 23.6 | 99.7 | 0.2 | 3.7 | -- | 277.2 | ||||||||||||||||||||||||
Thereafter
|
-- | 1,500.0 | -- | 516.7 | 0.6 | 52.6 | -- | 2,069.9 | ||||||||||||||||||||||||
Totals
|
$ | 96.6 | $ | 1,750.0 | $ | 67.3 | $ | 965.9 | $ | 1.4 | $ | 68.9 | $ | 15.7 | $ | 2,965.8 |
|
(1)
The initial term of the credit facility expires in March 2014 and includes two, one-year extension options.
|
|
(2)
Excludes net premiums of $957,000 recorded on the mortgages payable.
|
|
(3)
Interest on the credit facility, notes, bonds and mortgages payable has been calculated based on outstanding balances as of September 30, 2011 through their respective maturity dates.
|
|
(4)
Realty Income currently pays the ground lessors directly for the rent under the ground leases.
|
|
(5)
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.
|
|
(6)
“Other” consists of $15.0 million of commitments under construction contracts and $729,000 of contingent payments for tenant improvements and leasing costs. The amounts allocated to 2011 and 2012 have been estimated.
|
●
|
The 125 properties (5.5 million square feet) acquired by Realty Income in 2011, which generated $9.6 million of rent in the third quarter of 2011;
|
●
|
The 186 retail properties (2.3 million square feet) acquired by Realty Income in 2010, which generated $14.1 million of rent in the third quarter of 2011 compared to $5.5 million of rent in the third quarter of 2010, for an increase of $8.6 million;
|
●
|
Same store rents generated on 2,159 properties (17.8 million square feet) during the entire third quarters of 2011 and 2010, increased by $1.4 million, or 1.8%, to $81.1 million from $79.7 million;
|
●
|
A net increase of $304,000 relating to the aggregate of (i) rental revenue from 114 properties (1.1 million square feet) that were available for lease during part of 2011 or 2010, (ii) rental revenue related to 49 properties sold during 2011 and 2010 and (iii) lease termination settlements, which, in aggregate, totaled $1.5 million in the third quarter of 2011 compared to $1.2 million in the third quarter of 2010; and
|
●
|
A net increase in straight-line rent and other non-cash adjustments to rent of $76,000 in the third quarter of 2011 as compared to the third quarter of 2010.
|
●
|
The 125 properties (5.5 million square feet) acquired by Realty Income in 2011, which generated $15.2 million of rent in the first nine months of 2011;
|
●
|
The 186 properties (2.3 million square feet) acquired by Realty Income in 2010, which generated $42.06 million of rent in the first nine months of 2011 compared to $6.44 million in the first nine months of 2010, for an increase of $35.6 million;
|
●
|
Same store rents generated on 2,159 properties (17.8 million square feet) during the entire first nine months of 2011 and 2010 increased by $3.7 million, or 1.5%, to $243.0 million from $239.3 million;
|
●
|
A net increase of $1.2 million relating to the aggregate of (i) rental revenue from 114 properties (1.1 million square feet) that were available for lease during part of 2011 or 2010, (ii) rental revenue related to 49 properties sold during 2011 and 2010, and (iii) lease termination settlements, which in aggregate, totaled $5.6 million in the first nine months of 2011 compared to $4.4 million in the first nine months of 2010; and
|
●
|
A net decrease in straight-line rent and other non-cash adjustments to rent of $202,000 in the first nine months of 2011 as compared to the first nine months of 2010.
|
●
|
Primarily base rent increases tied to a consumer price index (typically subject to ceilings);
|
●
|
Overage rent based on a percentage of the tenants’ gross sales;
|
●
|
Fixed increases; or
|
●
|
A combination
of two or more of the above rent provisions.
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest on our credit facility, notes, bonds and mortgages
|
$ | 27,627 | $ | 24,260 | $ | 76,531 | $ | 65,677 | ||||||||
Interest included in discontinued operations
|
(198 | ) | (137 | ) | (597 | ) | (400 | ) | ||||||||
Credit facility commitment fees
|
377 | 248 | 1,131 | 743 | ||||||||||||
Amortization of credit facility origination costs, deferred financing costs and net mortgage
premiums
|
888 | 766 | 2,570 | 2,091 | ||||||||||||
Interest capitalized
|
(144 | ) | (2 | ) | (317 | ) | (5 | ) | ||||||||
Interest expense
|
$ | 28,550 | $ | 25,135 | $ | 79,318 | $ | 68,106 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Credit facility, mortgages and notes outstanding
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Average outstanding balances (dollars in
thousands)
|
$ | 1,797,848 | $ | 1,621,010 | $ | 1,675,706 | $ | 1,456,643 | ||||||||
Average interest rates
|
5.9 | % | 6.0 | % | 6.0 | % | 6.0 | % |
●
|
Notes and bonds payable of $1.75 billion was 6.03%;
|
●
|
Mortgages payable of $68.2 million was 5.4%;
|
●
|
Credit facility outstanding borrowings of $96.6 million was 2.09%; and
|
●
|
Combined outstanding notes, bonds, mortgages and credit facility borrowings of $1.9 billion was 5.8%.
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
|
$ | 40,780 | $ | 31,654 | $ | 116,027 | $ | 92,907 | ||||||||
Interest expense
|
28,550 | 25,135 | 79,318 | 68,106 | ||||||||||||
Interest expense included in discontinued operations
|
198 | 137 | 597 | 400 | ||||||||||||
Income taxes
|
367 | 335 | 1,102 | 890 | ||||||||||||
Income tax benefit included in discontinued operations
|
(90 | ) | (88 | ) | (268 | ) | (288 | ) | ||||||||
Depreciation and amortization
|
31,869 | 23,941 | 87,542 | 70,145 | ||||||||||||
Depreciation and amortization in discontinued operations
|
26 | 260 | 264 | 892 | ||||||||||||
EBITDA
|
101,700 | 81,374 | 284,582 | 233,052 | ||||||||||||
Provisions for impairment
|
169 | 84 | 378 | 171 | ||||||||||||
Amortization of net premiums on mortgages payable
|
(98 | ) | -- | (98 | ) | -- | ||||||||||
Gain on property sales
|
(55 | ) | -- | (210 | ) | -- | ||||||||||
Gain on property sales in discontinued operations
|
(3,094 | ) | (1,919 | ) | (4,319 | ) | (4,284 | ) | ||||||||
Adjusted EBITDA
|
$ | 98,622 | $ | 79,539 | $ | 280,333 | $ | 228,939 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Dollars in thousands
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Adjusted EBITDA
|
$ | 98,622 | $ | 79,539 | $ | 280,333 | $ | 228,939 | ||||||||
Divided by interest expense
(1)
|
$ | 28,748 | $ | 25,272 | $ | 79,915 | $ | 68,506 | ||||||||
Interest coverage ratio
|
3.4 | 3.1 | 3.5 | 3.3 |
|
(1)
Includes interest expense recorded to discontinued operations.
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Dollars in thousands
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Adjusted EBITDA
|
$ | 98,622 | $ | 79,539 | $ | 280,333 | $ | 228,939 | ||||||||
Divided by interest expense plus preferred stock dividends
(1)
|
$ | 34,811 | $ | 31,335 | $ | 98,105 | $ | 86,696 | ||||||||
Fixed charge coverage ratio
|
2.8 | 2.5 | 2.9 | 2.6 |
|
(1)
Includes interest expense recorded to discontinued operations.
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Income from discontinued operations
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Gain on sales of investment properties
|
$ | 3,094 | $ | 1,919 | $ | 4,319 | $ | 4,284 | ||||||||
Rental revenue
|
83 | 519 | 439 | 2,209 | ||||||||||||
Other revenue
|
7 | 7 | 35 | 25 | ||||||||||||
Depreciation and amortization
|
(26 | ) | (260 | ) | (264 | ) | (892 | ) | ||||||||
Property expenses
|
(111 | ) | (230 | ) | (365 | ) | (896 | ) | ||||||||
Provisions for impairment
|
(158 | ) | (84 | ) | (368 | ) | (171 | ) | ||||||||
Crest’s income from discontinued operations
|
222 | 268 | 664 | 717 | ||||||||||||
Income from discontinued operations
|
$ | 3,111 | $ | 2,139 | $ | 4,460 | $ | 5,276 | ||||||||
Per common share, basic and diluted
|
$ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.05 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income available to common stockholders
|
$ | 34,717 | $ | 25,591 | $ | 97,837 | $ | 74,717 | ||||||||
Depreciation and amortization:
|
||||||||||||||||
Continuing operations
|
31,869 | 23,941 | 87,542 | 70,145 | ||||||||||||
Discontinued operations
|
26 | 260 | 264 | 892 | ||||||||||||
Depreciation of furniture, fixtures, and equipment
|
(58 | ) | (69 | ) | (178 | ) | (223 | ) | ||||||||
Gain on sales of land and investment properties:
|
||||||||||||||||
Continuing operations
|
(55 | ) | -- | (210 | ) | -- | ||||||||||
Discontinued operations
|
(3,094 | ) | (1,919 | ) | (4,319 | ) | (4,284 | ) | ||||||||
FFO available to common stockholders
|
$ | 63,405 | $ | 47,804 | $ | 180,936 | $ | 141,247 | ||||||||
FFO per common share:
|
||||||||||||||||
Basic
|
$ | 0.50 | $ | 0.46 | $ | 1.46 | $ | 1.36 | ||||||||
Diluted
|
$ | 0.50 | $ | 0.46 | $ | 1.46 | $ | 1.36 | ||||||||
Distributions paid to common stockholders
|
$ | 55,145 | $ | 45,026 | $ | 161,276 | $ | 134,700 | ||||||||
FFO in excess of distributions paid to common stockholders
|
$ | 8,260 | $ | 2,778 | $ | 19,660 | $ | 6,547 | ||||||||
Weighted average number of common shares used for computation per share:
|
||||||||||||||||
Basic
|
126,376,201 | 103,830,029 | 123,921,317 | 103,781,108 | ||||||||||||
Diluted
|
126,582,609 | 103,977,023 | 124,013,142 | 103,887,679 |
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income available to common stockholders
|
$ | 34,717 | $ | 25,591 | $ | 97,837 | $ | 74,717 | ||||||||
Cumulative adjustments to calculate FFO
(1)
|
28,688 | 22,213 | 83,099 | 66,530 | ||||||||||||
FFO available to common stockholders
|
63,405 | 47,804 | 180,936 | 141,247 | ||||||||||||
Amortization of share-based compensation
|
1,751 | 1,347 | 6,098 | 4,824 | ||||||||||||
Amortization of deferred financing costs
(2)
|
486 | 431 | 1,335 | 1,114 | ||||||||||||
Provisions for impairment
|
169 | 84 | 378 | 171 | ||||||||||||
Capitalized leasing costs and commissions
|
(595 | ) | (238 | ) | (1,243 | ) | (874 | ) | ||||||||
Capitalized building improvements
|
(528 | ) | (438 | ) | (1,737 | ) | (1,404 | ) | ||||||||
Other adjustments
(3)
|
(449 | ) | (405 | ) | (920 | ) | (1,148 | ) | ||||||||
Total AFFO available to common stockholders
|
$ | 64,239 | $ | 48,585 | $ | 184,847 | $ | 143,930 | ||||||||
AFFO per common share:
|
||||||||||||||||
Basic
|
$ | 0.51 | $ | 0.47 | $ | 1.49 | $ | 1.39 | ||||||||
Diluted
|
$ | 0.51 | $ | 0.47 | $ | 1.49 | $ | 1.39 | ||||||||
Distributions paid to common stockholders
|
$ | 55,145 | $ | 45,026 | $ | 161,276 | $ | 134,700 | ||||||||
AFFO in excess of distributions paid to common stockholders
|
$ | 9,094 | $ | 3,559 | $ | 23,571 | $ | 9,230 | ||||||||
Weighted average number of common shares used for computation per share:
|
||||||||||||||||
Basic
|
126,376,201 | 103,830,029 | 123,921,317 | 103,781,108 | ||||||||||||
Diluted
|
126,582,609 | 103,977,023 | 124,013,142 | 103,887,679 |
(1)
|
See reconciling items for FFO presented on the previous page.
|
(2)
|
Includes the amortization of costs incurred and capitalized when our senior notes were issued in March 2003, November 2003, March 2005, September 2005, September 2006, September 2007, June 2010 and June 2011. Additionally, this includes the amortization of deferred financing costs incurred and capitalized in connection with our assumption of the mortgages payable in 2011. These costs are being amortized over the lives of the respective mortgages. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
|
(3)
|
Includes straight-line rent revenue and the amortization of above and below-market leases.
|
●
|
Of 2,600 properties;
|
●
|
With an occupancy rate of 97.7%, or 2,541 properties leased and only 59 properties available for lease;
|
●
|
Leased to 134 different retail and other commercial enterprises doing business in 38 separate industries;
|
●
|
Located in 49 states;
|
●
|
With over 26.8 million square feet of leasable space; and
|
●
|
With an average leasable space per property of approximately 10,300 square feet.
|
●
|
Properties previously included in the “distribution and office” industry were reclassified to the “home improvement,” “convenience store,” and “restaurant” industries, to better reflect the industry in which the tenant operates;
|
●
|
The “restaurant” industry was separated into the “restaurants - casual dining” industry, which includes dinner houses and family restaurants, and the “restaurants - quick service” industry, which includes fast food restaurants;
|
●
|
The “equipment rental” industry was renamed “equipment services;”
|
●
|
The “travel plazas” industry was renamed “transportation services;” and
|
●
|
The “wine and spirits” industry was renamed “beverages.”
|
Percentage of Rental Revenue
(1)
|
||||||||||||||||||||||||||||
For the Quarter
|
For the Years Ended
|
|||||||||||||||||||||||||||
Industries
|
Ended
September 30,
2011
|
Dec 31,
2010
|
Dec 31,
2009
|
Dec 31,
2008
|
Dec 31,
2007
|
Dec 31,
2006
|
Dec 31,
2005
|
|||||||||||||||||||||
Apparel stores
|
1.4 | % | 1.2 | % | 1.1 | % | 1.1 | % | 1.2 | % | 1.7 | % | 1.6 | % | ||||||||||||||
Automotive collision services
|
0.9 | 1.0 | 1.1 | 1.0 | 1.1 | 1.3 | 1.3 | |||||||||||||||||||||
Automotive parts
|
1.1 | 1.4 | 1.5 | 1.6 | 2.1 | 2.8 | 3.4 | |||||||||||||||||||||
Automotive service
|
3.7 | 4.7 | 4.8 | 4.8 | 5.2 | 6.9 | 7.6 | |||||||||||||||||||||
Automotive tire services
|
5.2 | 6.4 | 6.9 | 6.7 | 7.3 | 6.1 | 7.2 | |||||||||||||||||||||
Aviation
|
0.8 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Beverages
|
5.6 | 3.0 | -- | -- | -- | -- | -- | |||||||||||||||||||||
Book stores
|
0.1 | 0.1 | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | |||||||||||||||||||||
Business services
|
* | * | * | * | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Child care
|
5.2 | 6.5 | 7.3 | 7.6 | 8.4 | 10.3 | 12.7 | |||||||||||||||||||||
Consumer electronics
|
0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.1 | 1.3 | |||||||||||||||||||||
Convenience stores
|
18.3 | 17.1 | 16.9 | 15.8 | 14.0 | 16.1 | 18.7 | |||||||||||||||||||||
Crafts and novelties
|
0.2 | 0.3 | 0.3 | 0.3 | 0.3 | 0.4 | 0.4 | |||||||||||||||||||||
Drug stores
|
3.8 | 4.1 | 4.3 | 4.1 | 2.7 | 2.9 | 2.8 | |||||||||||||||||||||
Education
|
0.7 | 0.8 | 0.9 | 0.8 | 0.8 | 0.8 | 0.8 | |||||||||||||||||||||
Entertainment
|
1.0 | 1.2 | 1.3 | 1.2 | 1.4 | 1.6 | 2.1 | |||||||||||||||||||||
Equipment services
|
0.4 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.4 | |||||||||||||||||||||
Financial services
|
0.6 | 0.2 | 0.2 | 0.2 | 0.2 | 0.1 | 0.1 | |||||||||||||||||||||
Food processing
|
1.1 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
General merchandise
|
0.6 | 0.8 | 0.8 | 0.8 | 0.7 | 0.6 | 0.5 | |||||||||||||||||||||
Grocery stores
|
1.5 | 0.9 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | |||||||||||||||||||||
Health and fitness
|
6.1 | 6.9 | 5.9 | 5.6 | 5.1 | 4.3 | 3.7 | |||||||||||||||||||||
Home furnishings
|
1.1 | 1.3 | 1.3 | 2.4 | 2.6 | 3.1 | 3.7 | |||||||||||||||||||||
Home improvement
|
1.6 | 2.0 | 2.2 | 2.1 | 2.4 | 3.4 | 1.1 | |||||||||||||||||||||
Motor vehicle dealerships
|
2.4 | 2.6 | 2.7 | 3.2 | 3.1 | 3.4 | 2.6 | |||||||||||||||||||||
Office supplies
|
0.8 | 0.9 | 1.0 | 1.0 | 1.1 | 1.3 | 1.5 | |||||||||||||||||||||
Packaging
|
0.7 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Paper
|
0.2 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Pet supplies and services
|
0.7 | 0.9 | 0.9 | 0.8 | 0.9 | 1.1 | 1.3 | |||||||||||||||||||||
Restaurants - casual dining
|
10.9 | 13.4 | 13.7 | 14.3 | 14.9 | 7.0 | 5.5 | |||||||||||||||||||||
Restaurants - quick service
|
6.4 | 7.7 | 8.3 | 8.2 | 6.6 | 4.9 | 3.9 | |||||||||||||||||||||
Shoe stores
|
0.2 | 0.1 | -- | -- | -- | -- | 0.3 | |||||||||||||||||||||
Sporting goods
|
2.6 | 2.7 | 2.6 | 2.3 | 2.6 | 2.9 | 3.4 | |||||||||||||||||||||
Telecommunications
|
0.9 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Theaters
|
9.2 | 8.9 | 9.2 | 9.0 | 9.0 | 9.6 | 5.2 | |||||||||||||||||||||
Transportation services
|
2.1 | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.3 | |||||||||||||||||||||
Video rental
|
0.0 | 0.2 | 1.0 | 1.1 | 1.7 | 2.1 | 2.5 | |||||||||||||||||||||
Wholesale clubs
|
* | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Other
|
1.4 | 1.7 | 1.8 | 1.9 | 2.3 | 2.7 | 3.0 | |||||||||||||||||||||
Totals
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
|
(1)
Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified as discontinued operations. Excludes revenue from properties owned by Crest.
|
Property Type
|
Number of
Properties
|
Approximate Leasable
Square Feet
|
Rental Revenue for
the Quarter Ended
September 30, 2011
(1)
|
Percentage of
Revenue
|
||||||||||||
Retail
|
2,545 | 21,602,900 | $ | 91,710 | 85.8 | % | ||||||||||
Agriculture
|
14 | 184,500 | 4,937 | 4.6 | ||||||||||||
Distribution
|
12 | 1,979,300 | 3,378 | 3.2 | ||||||||||||
Manufacturing
|
6 | 1,418,600 | 2,492 | 2.3 | ||||||||||||
Office
|
8 | 778,500 | 2,786 | 2.6 | ||||||||||||
Industrial
|
15 | 850,500 | 1,543 | 1.5 | ||||||||||||
Totals
|
2,600 | 26,814,300 | $ | 106,846 | 100.0 | % |
|
(1)
Includes rental revenue for all properties owned by Realty Income at September 30, 2011, including revenue from properties reclassified as discontinued operations of $56. Excludes revenue of $18 from properties owned by Crest.
|
AMC Theatres
|
5.4%
|
NPC International/Pizza Hut
|
2.7%
|
||
Diageo
|
5.0%
|
BJ’s Wholesale Club
|
2.7%
|
||
L.A. Fitness
|
4.7%
|
Rite Aid
|
2.7%
|
||
Northern Tier Energy/Super America
|
4.5%
|
FreedomRoads/Camping World
|
2.4%
|
||
Hometown Buffet
|
4.3%
|
La Petite Academy
|
2.3%
|
||
Friendly’s Ice Cream
|
3.6%
|
TBC Corporation
|
2.3%
|
||
Regal Cinemas
|
3.5%
|
Couche-Tard/Circle K
|
2.2%
|
||
The Pantry
|
3.2%
|
Retail Industry
|
Number of
Properties
|
Retail
Rental Revenue for
the Quarter Ended
September 30, 2011
(1)
|
Percentage of
Retail
Rental
Revenue
|
|||||||||
Tenants Providing Services
|
||||||||||||
Automotive collision services
|
17 | $ | 962 | 1.0 | % | |||||||
Automotive service
|
238 | 3,979 | 4.3 | |||||||||
Child care
|
239 | 5,547 | 6.0 | |||||||||
Education
|
14 | 803 | 0.9 | |||||||||
Entertainment
|
8 | 1,074 | 1.2 | |||||||||
Equipment services
|
2 | 150 | 0.2 | |||||||||
Financial services
|
13 | 196 | 0.2 | |||||||||
Health and fitness
|
45 | 6,472 | 7.1 | |||||||||
Theaters
|
43 | 9,779 | 10.7 | |||||||||
Transportation services
|
1 | 187 | 0.2 | |||||||||
Other
|
9 | 132 | 0.1 | |||||||||
629 | 29,281 | 31.9 | ||||||||||
Tenants Selling Goods and Services
|
||||||||||||
Automotive parts (with installation)
|
23 | 452 | 0.5 | |||||||||
Automotive tire services
|
155 | 5,507 | 6.0 | |||||||||
Business services
|
1 | 5 | * | |||||||||
Convenience stores
|
719 | 19,399 | 21.2 | |||||||||
Home improvement
|
1 | 29 | * | |||||||||
Motor vehicle dealerships
|
17 | 2,519 | 2.7 | |||||||||
Pet supplies and services
|
12 | 710 | 0.8 | |||||||||
Restaurants - casual dining
|
316 | 10,982 | 12.0 | |||||||||
Restaurants - quick service
|
372 | 6,794 | 7.4 | |||||||||
Video rental
|
8 | -- | 0.0 | |||||||||
Wholesale clubs
|
6 | 34 | * | |||||||||
1,630 | 46,431 | 50.6 | ||||||||||
Tenants Selling Goods
|
||||||||||||
Apparel stores
|
11 | 1,519 | 1.7 | |||||||||
Automotive parts
|
44 | 724 | 0.8 | |||||||||
Book stores
|
1 | 113 | 0.1 | |||||||||
Consumer electronics
|
9 | 581 | 0.6 | |||||||||
Crafts and novelties
|
4 | 238 | 0.3 | |||||||||
Drug stores
|
57 | 4,017 | 4.4 | |||||||||
General merchandise
|
33 | 643 | 0.7 | |||||||||
Grocery stores
|
21 | 1,632 | 1.8 | |||||||||
Home furnishings
|
44 | 1,153 | 1.3 | |||||||||
Home improvement
|
27 | 1,485 | 1.6 | |||||||||
Office supplies
|
11 | 900 | 1.0 | |||||||||
Pet supplies
|
2 | 34 | * | |||||||||
Shoe stores
|
1 | 168 | 0.2 | |||||||||
Sporting goods
|
21 | 2,791 | 3.0 | |||||||||
286 | 15,998 | 17.5 | ||||||||||
Totals
|
2,545 | $ | 91,710 | 100.0 | % |
(1)
|
Includes rental revenue for all retail properties owned by Realty Income at September 30, 2011, including revenue from properties reclassified as discontinued operations of $56. Excludes revenue of $18 from properties owned by Crest.
|
Total Portfolio
|
Initial Expirations
(3)
|
Subsequent Expirations
(4)
|
||||||||||||||||||||||||||||||||||||||
Year
|
Number
of Leases Expiring
(1)
|
Approx.
Leasable
Sq. Feet
|
Rental
Revenue
for the
Quarter
Ended
Sept. 30, 2011
(2)
|
% of
Total
Rental Revenue
|
Number
of Leases Expiring
|
Rental Revenue
for the
Quarter Ended
Sept. 30,
2011
|
% of
Total
Rental Revenue
|
Number of Leases Expiring
|
Rental Revenue
for the
Quarter
Ended
Sept. 30,
2011
|
% of
Total
Rental Revenue
|
||||||||||||||||||||||||||||||
2011
|
44 | 319,800 | $ | 1,143 | 1.1 | % | 18 | $ | 513 | 0.5 | % | 26 | $ | 630 | 0.6 | % | ||||||||||||||||||||||||
2012
|
155 | 1,093,400 | 3,440 | 3.3 | 43 | 1,350 | 1.3 | 112 | 2,090 | 2.0 | ||||||||||||||||||||||||||||||
2013
|
162 | 1,367,500 | 5,325 | 5.1 | 65 | 2,976 | 2.8 | 97 | 2,349 | 2.3 | ||||||||||||||||||||||||||||||
2014
|
126 | 990,600 | 3,694 | 3.5 | 31 | 1,641 | 1.6 | 95 | 2,053 | 1.9 | ||||||||||||||||||||||||||||||
2015
|
158 | 891,800 | 4,059 | 3.9 | 79 | 2,391 | 2.3 | 79 | 1,668 | 1.6 | ||||||||||||||||||||||||||||||
2016
|
162 | 839,200 | 3,442 | 3.3 | 113 | 2,296 | 2.2 | 49 | 1,146 | 1.1 | ||||||||||||||||||||||||||||||
2017
|
58 | 722,200 | 2,493 | 2.4 | 41 | 2,141 | 2.1 | 17 | 352 | 0.3 | ||||||||||||||||||||||||||||||
2018
|
84 | 1,242,900 | 3,307 | 3.2 | 74 | 3,040 | 2.9 | 10 | 267 | 0.3 | ||||||||||||||||||||||||||||||
2019
|
140 | 1,565,700 | 6,643 | 6.3 | 132 | 6,220 | 5.9 | 8 | 423 | 0.4 | ||||||||||||||||||||||||||||||
2020
|
85 | 1,597,400 | 4,889 | 4.7 | 75 | 4,544 | 4.4 | 10 | 345 | 0.3 | ||||||||||||||||||||||||||||||
2021
|
186 | 1,975,600 | 8,502 | 8.1 | 178 | 7,934 | 7.6 | 8 | 568 | 0.5 | ||||||||||||||||||||||||||||||
2022
|
105 | 879,400 | 4,457 | 4.3 | 104 | 4,409 | 4.3 | 1 | 48 | * | ||||||||||||||||||||||||||||||
2023
|
252 | 2,094,000 | 9,887 | 9.4 | 250 | 9,814 | 9.3 | 2 | 73 | 0.1 | ||||||||||||||||||||||||||||||
2024
|
63 | 565,000 | 2,448 | 2.3 | 63 | 2,448 | 2.3 | -- | -- | -- | ||||||||||||||||||||||||||||||
2025
|
210 | 1,730,800 | 11,674 | 11.1 | 205 | 11,561 | 11.0 | 5 | 113 | 0.1 | ||||||||||||||||||||||||||||||
2026
|
113 | 1,811,100 | 7,128 | 6.8 | 110 | 7,047 | 6.7 | 3 | 81 | 0.1 | ||||||||||||||||||||||||||||||
2027
|
173 | 1,410,000 | 5,859 | 5.6 | 172 | 5,841 | 5.6 | 1 | 18 | * | ||||||||||||||||||||||||||||||
2028
|
90 | 1,083,100 | 4,427 | 4.2 | 88 | 4,376 | 4.2 | 2 | 51 | * | ||||||||||||||||||||||||||||||
2029
|
52 | 919,800 | 2,071 | 2.0 | 49 | 2,010 | 1.9 | 3 | 61 | 0.1 | ||||||||||||||||||||||||||||||
2030
|
43 | 564,400 | 6,779 | 6.5 | 43 | 6,779 | 6.5 | -- | -- | -- | ||||||||||||||||||||||||||||||
2031
|
46 | 1,123,600 | 1,068 | 1.0 | 45 | 1,049 | 1.0 | 1 | 19 | * | ||||||||||||||||||||||||||||||
2032
|
2 | 289,400 | 651 | 0.6 | 2 | 651 | 0.6 | -- | -- | -- | ||||||||||||||||||||||||||||||
2033
|
8 | 94,000 | 540 | 0.5 | 8 | 540 | 0.5 | -- | -- | -- | ||||||||||||||||||||||||||||||
2034
|
6 | 84,900 | 509 | 0.5 | 6 | 509 | 0.5 | -- | -- | -- | ||||||||||||||||||||||||||||||
2037
|
2 | 48,800 | 354 | 0.3 | 2 | 354 | 0.3 | -- | -- | -- | ||||||||||||||||||||||||||||||
2043
|
1 | 3,600 | 13 | * | -- | -- | -- | 1 | 13 | * | ||||||||||||||||||||||||||||||
Totals
|
2,526 | 25,308,000 | $ | 104,802 | 100.0 | % | 1,996 | $ | 92,434 | 88.3 | % | 530 | $ | 12,368 | 11.7 | % |
State
|
Number of
Properties
|
Percent
Leased
|
Approximate
Leasable
Square Feet
|
Rental Revenue for
the Quarter Ended
September 30, 2011
(1)
|
Percentage of
Rental
Revenue
|
|||||||||||||||
Alabama
|
62 | 97 | % | 420,200 | $ | 1,851 | 1.7 | % | ||||||||||||
Alaska
|
2 | 100 | 128,500 | 287 | 0.3 | |||||||||||||||
Arizona
|
83 | 98 | 561,700 | 2,845 | 2.7 | |||||||||||||||
Arkansas
|
17 | 100 | 92,400 | 383 | 0.4 | |||||||||||||||
California
|
93 | 100 | 2,159,400 | 11,186 | 10.5 | |||||||||||||||
Colorado
|
59 | 97 | 499,000 | 1,913 | 1.8 | |||||||||||||||
Connecticut
|
23 | 96 | 269,100 | 1,185 | 1.1 | |||||||||||||||
Delaware
|
17 | 100 | 33,300 | 431 | 0.4 | |||||||||||||||
Florida
|
184 | 97 | 1,926,000 | 7,642 | 7.2 | |||||||||||||||
Georgia
|
144 | 97 | 1,273,300 | 4,750 | 4.4 | |||||||||||||||
Hawaii
|
-- | -- | -- | -- | -- | |||||||||||||||
Idaho
|
12 | 83 | 80,700 | 316 | 0.3 | |||||||||||||||
Illinois
|
101 | 99 | 1,335,900 | 5,995 | 5.6 | |||||||||||||||
Indiana
|
81 | 96 | 799,000 | 3,555 | 3.3 | |||||||||||||||
Iowa
|
21 | 100 | 290,600 | 1,021 | 1.0 | |||||||||||||||
Kansas
|
37 | 92 | 642,900 | 1,330 | 1.2 | |||||||||||||||
Kentucky
|
23 | 100 | 134,700 | 707 | 0.7 | |||||||||||||||
Louisiana
|
33 | 100 | 296,300 | 1,199 | 1.1 | |||||||||||||||
Maine
|
3 | 100 | 22,500 | 162 | 0.1 | |||||||||||||||
Maryland
|
29 | 100 | 384,000 | 1,611 | 1.5 | |||||||||||||||
Massachusetts
|
64 | 98 | 575,400 | 2,551 | 2.4 | |||||||||||||||
Michigan
|
54 | 100 | 287,200 | 1,326 | 1.2 | |||||||||||||||
Minnesota
|
150 | 100 | 1,003,600 | 6,755 | 6.3 | |||||||||||||||
Mississippi
|
72 | 97 | 360,700 | 1,588 | 1.5 | |||||||||||||||
Missouri
|
76 | 96 | 1,027,500 | 3,642 | 3.4 | |||||||||||||||
Montana
|
2 | 100 | 30,000 | 77 | 0.1 | |||||||||||||||
Nebraska
|
19 | 95 | 196,300 | 491 | 0.5 | |||||||||||||||
Nevada
|
14 | 100 | 308,800 | 1,002 | 0.9 | |||||||||||||||
New Hampshire
|
15 | 100 | 217,200 | 592 | 0.6 | |||||||||||||||
New Jersey
|
33 | 100 | 260,400 | 1,945 | 1.8 | |||||||||||||||
New Mexico
|
9 | 100 | 58,400 | 198 | 0.2 | |||||||||||||||
New York
|
42 | 98 | 776,200 | 2,820 | 2.6 | |||||||||||||||
North Carolina
|
94 | 100 | 572,400 | 3,007 | 2.8 | |||||||||||||||
North Dakota
|
6 | 100 | 36,600 | 59 | 0.1 | |||||||||||||||
Ohio
|
135 | 96 | 1,127,400 | 3,841 | 3.6 | |||||||||||||||
Oklahoma
|
35 | 100 | 752,400 | 1,505 | 1.4 | |||||||||||||||
Oregon
|
19 | 100 | 373,500 | 1,160 | 1.1 | |||||||||||||||
Pennsylvania
|
103 | 99 | 905,800 | 3,646 | 3.4 | |||||||||||||||
Rhode Island
|
3 | 100 | 11,000 | 59 | 0.1 | |||||||||||||||
South Carolina
|
98 | 100 | 371,400 | 2,314 | 2.2 | |||||||||||||||
South Dakota
|
10 | 100 | 89,800 | 186 | 0.2 | |||||||||||||||
Tennessee
|
129 | 97 | 747,800 | 2,980 | 2.8 | |||||||||||||||
Texas
|
216 | 97 | 3,176,700 | 9,958 | 9.3 | |||||||||||||||
Utah
|
5 | 100 | 92,100 | 251 | 0.2 | |||||||||||||||
Vermont
|
4 | 100 | 12,700 | 128 | 0.1 | |||||||||||||||
Virginia
|
105 | 98 | 1,519,400 | 4,328 | 4.0 | |||||||||||||||
Washington
|
34 | 94 | 276,500 | 997 | 0.9 | |||||||||||||||
West Virginia
|
2 | 100 | 23,000 | 121 | 0.1 | |||||||||||||||
Wisconsin
|
27 | 93 | 269,200 | 950 | 0.9 | |||||||||||||||
Wyoming
|
1 | 0 | 5,400 | 0 | 0.0 | |||||||||||||||
Totals/Average
|
2,600 | 98 | % | 26,814,300 | $ | 106,846 | 100.0 | % |
(1)
|
Includes rental revenue for all properties owned by Realty Income at September 30, 2011, including revenue from properties reclassified as discontinued operations of $56. Excludes revenue of $18 from properties owned by Crest.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Year of maturity
|
Fixed rate
debt
|
Average interest rate
on fixed rate debt
|
Variable rate
debt
|
Average interest rate
on variable rate debt
|
||||||||||||
2011
|
$ | 0.2 | 6.25 | % | $ | -- | -- | % | ||||||||
2012
|
0.6 | 6.25 | -- | -- | ||||||||||||
2013
(1)
|
120.9 | 5.67 | -- | -- | ||||||||||||
2014
(2)
|
22.0 | 6.07 | 96.6 | 2.09 | ||||||||||||
2015
(3)
|
150.0 | 5.50 | 23.6 | 4.79 | ||||||||||||
Thereafter
(4)
|
1,500.0 | 6.13 | -- | -- | ||||||||||||
Totals
(5)
|
$ | 1,793.7 | 6.05 | % | $ | 120.2 | 2.62 | % | ||||||||
Fair Value
(6)
|
$ | 1,919.0 | $ | 120.1 |
(1)
|
$100 million of fixed rate notes mature in March 2013 and $20.9 million of fixed rate mortgages mature in December 2013.
|
(2)
|
$10.7 million of fixed rate mortgages mature in May 2014, $11.3 million matures in September 2014 and the credit facility expires in March 2014.
|
(3)
|
$150 million of fixed rate senior notes mature in November 2015 and $23.6 million of variable rate mortgages mature in June 2015. The variable interest rate on the mortgages of $23.6 million is capped at 5.5%.
|
(4)
|
As it relates to fixed rate senior notes, $275 million matures in September 2016, $175 million matures in September 2017, $550 million matures in August 2019, $250 million matures in January 2021 and $250 million matures in March 2035.
|
(5)
|
Excludes net premiums of $957,000 recorded on mortgages payable.
|
(6)
|
We base the estimated fair value of the fixed rate senior notes at September 30, 2011 on the indicative market prices and recent trading activity of our notes payable. We base the estimated fair value of our fixed rate and variable rate mortgages at September 30, 2011 on the current 5-year Treasury yield curve, plus an applicable credit-adjusted spread. We believe that the carrying value of the credit facility balance reasonably approximates its estimated fair value at September 30, 2011.
|
OTHER INFORMATION
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
|
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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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4.12 |
Form of 6.75% Notes due 2019 (filed as exhibit 4.2 to Company's Form 8-K, filed on September 5, 2007 and dated August 30, 2007 and incorporated herein by reference).
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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).
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4.14 |
Form of 5.75% Notes due 2021 (filed as exhibit 4.2 to Company's Form 8-K, filed on June 29, 2010 and dated June 24, 2010 and incorporated herein by reference).
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4.15 |
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 Mellon Trust Company, N.A., as successor trustee, establishing a series of securities entitled "5.75% Senior Notes due 2021" (filed as exhibit 4.3 to the Company's Form 8-K, filed on June 29, 2010 and dated June 24, 2010 and incorporated herein by reference).
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* 4.16 |
Form of Common Stock Certificate.
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10.1 |
Dividend Reinvestment and Stock Purchase Plan (filed as Company’s Registration Statement 333-158169 on Form 424B5, filed on and dated March 23, 2011 and incorporated herein by reference).
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10.2 |
The First Amendment to Credit Agreement among the Company, as Borrower, each of the Lenders party thereto (as defined in the original credit agreement, dated December 13, 2010), and Wells Fargo Bank, National Association (filed as exhibit 10.1 to the Company’s Form 8-K, filed on March 29, 2011 and dated March 25, 2011 and incorporated herein by reference).
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10.3 |
Form indemnification agreement between the Company and each executive and each director of the Board of Directors of the Company (filed as exhibit 10.1 to the Company’s Form 8-K, filed on May 4, 2011 and dated May 3, 2011 and incorporated herein by reference).
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* 31.1 |
Rule 13a-14(a) Certifications as filed by the Chief Executive Officer pursuant to SEC release No. 33-8212 and 34-47551.
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* 31.2 |
Rule 13a-14(a) Certifications as filed by the Chief Financial Officer pursuant to SEC release No. 33-8212 and 34-47551.
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* 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.
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* Filed herewith
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REALTY INCOME CORPORATION
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Date: October 27, 2011
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/s/ GREGORY J. FAHEY
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Gregory J. Fahey
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Vice President, Controller
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(Principal Accounting Officer)
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NUMBER:
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COMMON STOCK
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RI
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SHARES |
SEE REVERSE FOR IMPORTANT NOTICE ON TRANSFER RESTRICTIONS AND OTHER INFORMATION
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||
INCORPORATED UNDER THE LAWS
OF THE STATE OF MARYLAND
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THIS CERTIFICATE IS TRANSFERABLE IN SOUTH SAINT PAUL, MN.
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CUSIP 756109 10 4
SEE REVERSE FOR CERTAIN DEFINITIONS
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/s/ DONALD R. CAMERON
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||||
CHAIRMAN
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||||
/s/ MICHAEL R. PFEIFFER
|
||||
SECRETARY
|
||||
By:
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(Corporate Seal)
|
||
/s/ TODD J. MAY
|
||||
TRANSFER AGENT AND REGISTRAR
AUTHORIZED SIGNATURE
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TEN COM
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--
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As tenants in common
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UNIF GIFT MIN ACT
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--
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______Custodian________
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|||||
TEN ENT
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--
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As tenants by the entireties
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(Cust) (Minor)
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|||||||
JT TEN
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--
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As joint tenants with right of
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under Uniform Gifts to Minors
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|||||||
survivorship and not as tenants
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Act___________________
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|||||||||
in common
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(State)
|
|||||||||
UNIF TRF MIN ACT
|
--
|
______Custodian (until age____)
|
||||||||
(Cust)
|
||||||||||
______under Uniform Transfers
|
||||||||||
(Minor)
|
||||||||||
to Minors Act______________
|
||||||||||
(State)
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
|
||
Shares
|
||
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
|
Attorney
|
||||
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
|
X
|
||||
X
|
||||
NOTICE:
|
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
|
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
|