UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
September 8, 2005
Date of Report (Date of earliest event reported)
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter)
Maryland |
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1-13374 |
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33-0580106 |
(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification
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220 West Crest Street |
Escondido, California 92025-1707 |
(Address of principal executive offices) (Zip Code) |
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(760) 741-2111 |
(Registrants telephone number, including area code) |
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N/A |
(Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On September 8, 2005, Realty Income Corporation (the Company) entered into a purchase agreement with Banc of America Securities LLC and Citigroup Global Markets Inc., as representatives of the underwriters (the Underwriters), pursuant to which the Company agreed to issue and sell $175,000,000 aggregate principal amount of its 5 3/8% Senior Notes due 2017. The transaction closed on September 15, 2005. Total net proceeds of the offering were approximately $173.4 million. The Company intends to use a portion of the net proceeds from the offering to repay outstanding borrowings under the Companys $250 million credit facility and the remaining net proceeds for general corporate purposes.
Item 9.01 Financial Statements and Exhibits.
(c) |
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Exhibits. |
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1.1 |
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Purchase Agreement, dated September 8, 2005, between the Underwriters and the Company. |
4.1 |
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Indenture, dated as of October 28, 1998, between the Company and The Bank of New York Trust Company, N.A., as successor trustee (filed as an exhibit to the Companys Form 8-K, filed on October 28, 1998 and incorporated herein by reference). |
4.2 |
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Form of 5 3/8% Senior Notes due 2017. |
4.3 |
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Officers 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 successor trustee, establishing a series of securities entitled 5 3/8% Senior Notes due 2017. |
5.1 |
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Opinion of Venable LLP |
5.2 |
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Opinion of Latham & Watkins LLP |
12.1 |
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Calculation of Ratio of Earnings to Fixed Charges. |
23.1 |
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Consent of Venable LLP (contained in the opinion filed as Exhibit 5.1 hereto). |
23.2 |
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Consent of Latham & Watkins LLP (contained in the opinion filed as Exhibit 5.2 hereto). |
25.1 |
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Form T-1 (incorporated herein by reference to filing made on March 2, 2005 pursuant to Section 305 (b)(2), File No. 333-113032). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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REALTY INCOME CORPORATION |
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Date: September 15, 2005 |
By: |
/s/ Michael R. Pfeiffer |
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Name: |
Michael R. Pfeiffer |
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Title: |
Executive Vice President, General
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EXHIBIT INDEX
Exhibit
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Document Description |
1.1 |
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Purchase Agreement, dated September 8, 2005, between the Underwriters and the Company. |
4.1 |
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Indenture, dated as of October 28, 1998, between the Company and The Bank of New York Trust Company, N.A., as successor trustee (filed as an exhibit to the Companys Form 8-K, filed on October 28, 1998 and incorporated herein by reference). |
4.2 |
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Form of 5 3/8% Senior Notes due 2017. |
4.3 |
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Officers 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 successor trustee, establishing a series of securities entitled 5 3/8% Senior Notes due 2017. |
5.1 |
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Opinion of Venable LLP |
5.2 |
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Opinion of Latham & Watkins LLP |
12.1 |
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Calculation of Ratio of Earnings to Fixed Charges. |
23.1 |
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Consent of Venable LLP (contained in the opinion filed as Exhibit 5.1 hereto). |
23.2 |
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Consent of Latham & Watkins LLP (contained in the opinion filed as Exhibit 5.2 hereto). |
25.1 |
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Form T-1 (incorporated herein by reference to filing made on March 2, 2005 pursuant to Section 305 (b)(2), File No. 333-113032). |
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Exhibit 1.1
REALTY INCOME CORPORATION
(a Maryland Corporation)
$175,000,000
5 3/8% Senior Notes due 2017
PURCHASE AGREEMENT
September 8, 2005
Table of Contents
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REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY |
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Exhibit A Form of Opinion of Latham & Watkins LLP |
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Exhibit B Form of Opinion of Michael R. Pfeiffer |
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Exhibit C Form of Opinion of Venable LLP |
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i
REALTY INCOME CORPORATION
(a Maryland corporation)
$175,000,000
5 3/8% Senior Notes due 2017
PURCHASE AGREEMENT
September 8, 2005
BANC OF AMERICA SECURITIES LLC
CITIGROUP GLOBAL MARKETS INC.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
Hearst Tower
214 North Tryon Street
Charlotte, North Carolina
28255
Ladies and Gentlemen:
Realty Income Corporation, a Maryland corporation (the Company), confirms its agreement with the underwriters named in Schedule A hereto (the Underwriters which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Banc of America Securities LLC (BAS) and Citigroup Global Markets Inc. (Citigroup) are acting as representatives (BAS and Citigroup, in such capacity, the Representatives), with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of $175,000,000 aggregate principal amount of the Companys 5 3/8% Senior Notes due 2017 (the Securities). The Securities are to be issued pursuant to an indenture dated as of October 28, 1998 (the Indenture) between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee) to The Bank of New York, the original trustee (the Original Trustee).
The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the Commission) a registration statement on Form S-3 (No. 333-113032) and Amendment No. 1 thereto (as so amended, the Current Registration Statement) for the registration of shares of its common stock, par value $1.00 per share (the Common Stock), shares of its preferred stock, par value $1.00 per share (the Preferred Stock), and its debt securities (including the Securities) under the Securities Act of 1933, as amended (the 1933 Act), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus supplement and, if required by Rule 424(b)
(as defined below), a prospectus in accordance with the provisions of Rule 415 (Rule 415) of the rules and regulations of the Commission under the 1933 Act (the 1933 Act Regulations) and paragraph (b) of Rule 424 (Rule 424(b)) of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 (Rule 434) of the 1933 Act Regulations, prepare and file a term sheet (a Term Sheet) in accordance with the provisions of Rule 434 and Rule 424(b). The information included in such Term Sheet that was omitted from the Current Registration Statement at the time it became effective but that is deemed to be part of the Current Registration Statement at the time the Term Sheet is filed with the Commission pursuant to paragraph (d) of Rule 434 is referred to as Rule 434 Information. Each prospectus, together with any related prospectus supplement, relating to the Securities used before the Current Registration Statement became effective, and each prospectus, together with the related prospectus supplement, relating to the Securities that omitted the Rule 434 Information or that was captioned Subject to Completion that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called, together with the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, a preliminary prospectus. The Current Registration Statement, including the exhibits thereto, schedules, if any, and documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became effective, including, if applicable, the Rule 434 Information, is hereinafter called the Registration Statement. Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the Rule 462(b) Registration Statement, and after such filing the term Registration Statement shall include the Rule 462(b) Registration Statement. The prospectus dated March 23, 2004 (the Base Prospectus) and the final prospectus supplement relating to the offering of the Securities, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, are herein called, collectively, the Prospectus. If Rule 434 is relied on, the term Prospectus shall refer to the Base Prospectus, the preliminary prospectus supplement relating to the Securities and the Term Sheet and all documents incorporated by reference therein pursuant to Item 12 of Form S-3, and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (EDGAR).
All references in this Agreement to financial statements and schedules and other information which is described, disclosed, contained, included or stated in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated or deemed to be incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the 1934 Act), which is incorporated or deemed to be incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.
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All references in this Agreement to properties or improvements owned by or of the Company or any of its subsidiaries shall be deemed to mean and include all properties and improvements which are leased by the Company or any of its subsidiaries, as lessee.
At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective, at the date hereof and at the Closing Time, the Registration Statement, any Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the applicable requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act, and the rules and regulations of the Commission under the 1939 Act (the 1939 Act Regulations), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the date hereof and at the Closing Time, neither the Prospectus nor any amendments or supplements thereto contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this paragraph shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act and the 1933 Act Regulations and, if applicable, each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T of the Commission.
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Payment shall be made to the Company by wire transfer of immediately available funds to an account at a bank designated by the Company, against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities, which it has agreed to purchase. BAS, individually and not as a Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by any Underwriter whose payment therefor has not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.
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provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto); and provided further that this indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any such amendments or supplements thereto, but excluding documents incorporated or deemed to be incorporated by reference therein) was not sent or given by or on behalf of such Underwriter to such person, if such is required by law, at or prior to the written confirmation of the sale of such Securities to such person and if the Prospectus (as so amended or supplemented, if applicable) would have corrected the defect giving rise to such loss, liability, claim, damage or expense, except that this proviso shall not be applicable if such defect shall have been corrected in a document which is incorporated or deemed to be incorporated by reference in the Prospectus.
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The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus (or, if Rule 434 is used, the corresponding location on the Term Sheet) bear to the aggregate initial public offering price of the Securities as set forth on such cover (or corresponding location on the Term Sheet, as the case may be).
The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters respective obligations to contribute pursuant to this Section 7 are several in proportion to the aggregate principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.
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(a) if the aggregate principal amount of the Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities set forth on Schedule A hereto, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities set forth on Schedule A hereto, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone the Closing Time, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term Underwriter includes any person substituted for an Underwriter under this Section 10.
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[Signature Page Follows]
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms.
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Very truly yours, |
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REALTY INCOME CORPORATION |
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By: |
/s/ Michael R. Pfeiffer |
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Michael R. Pfeiffer |
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Executive Vice President, |
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General Counsel and Secretary |
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CONFIRMED AND
ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
CITIGROUP GLOBAL MARKETS INC.
By: BANC OF AMERICA SECURITIES LLC
By: |
/s/ Lily Chang |
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Authorized Signatory |
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For themselves
and as Representatives of the
Underwriters named in Schedule A
hereto.
Name of Underwriter |
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Principal
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Banc of America Securities LLC |
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$ |
78,750,000 |
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Citigroup Global Markets Inc. |
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78,750,000 |
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A.G. Edwards & Sons, Inc. |
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3,500,000 |
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BNY Capital Markets, Inc. |
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3,500,000 |
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Harris Nesbitt Corp. |
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3,500,000 |
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Piper Jaffray & Co. |
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3,500,000 |
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Wells Fargo Securities, LLC |
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3,500,000 |
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Total |
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$ |
175,000,000 |
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A-1
Price Schedule
1. The initial public offering price for the Securities shall be 99.974% of the principal amount thereof, plus accrued interest from September 15, 2005 if settlement occurs after that date.
2. Underwriting discounts and commissions for the Securities shall be 0.675% of the principal amount thereof. Accordingly, the purchase price to be paid for the Securities by the several Underwriters shall be 99.299% of the principal amount thereof, plus accrued interest from September 15, 2005 if settlement occurs after that date.
Exhibit 4.2
PRINCIPAL AMOUNT
$175,000,000
REGISTERED NO.: R-1
CUSIP NO.: 756109 AH 7
ISIN NO.: US756109AH73
REALTY INCOME CORPORATION
5 3/8% SENIOR NOTES DUE 2017
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND, UNLESS AND UNTIL IT IS EXCHANGED FOR SECURITIES IN DEFINITIVE FORM AS AFORESAID, MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ITS NOMINEE TO A SUCCESSOR DEPOSITARY OR ITS NOMINEE.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (DTC), 55 WATER STREET, NEW YORK, NEW YORK TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SUCH SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Realty Income Corporation, a Maryland corporation (the Company, which term shall include any successor under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of One Hundred Seventy-Five Million Dollars on September 15, 2017, and to pay interest thereon from September 15, 2005 or from the most recent date to which interest has been paid or duly provided for, semi-annually in arrears on March 15 and September 15 of each year (the Interest Payment Dates), commencing March 15, 2006, at the rate of 5 3/8% per annum, until the entire principal amount hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered in the Security Register applicable to the Notes at the close of business on March 1 or September 1 (the Regular Record Dates), as the case may be, immediately preceding the applicable Interest Payment Date regardless of whether the Regular Record Date is a Business Day. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the
Indenture. Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any principal of or premium, if any, or interest on any of the Notes is not paid when due, then such overdue principal and, to the extent permitted by law, such overdue premium or interest, as the case may be, shall bear interest, until paid or until such payment is duly provided for, at the rate of 5 3/8% per annum.
Payments of principal, premium, if any, and interest in respect of this Note will be made by the Company in Dollars. If this Note is a Global Security, all payments of principal, premium, if any, and interest in respect of this Note will be made by wire transfer of immediately available funds to an account maintained by the payee located in the United States. If this Note is not a Global Security (a Certificated Note), payments of interest on this Note may, at the Companys option, be made by mailing a check to the address of the Person entitled thereto as such address appears in the Security Register for the Notes or by wire transfer to an account maintained by the payee located inside the United States, all on the terms set forth in the Indenture; provided, however, that a Holder of $5 million or more in aggregate principal amount of Certificated Notes will be entitled to receive payments of interest due on any Interest Payment Date by wire transfer of immediately available funds to an account maintained by such Holder in the United States so long as such Holder has given appropriate wire transfer instructions to the Trustee or a Paying Agent for the Notes at least 15 calendar days prior to the applicable Interest Payment Date. Any such wire transfer instruction will remain in effect until revoked by such Holder or until such Person ceases to be a Holder of $5 million or more in aggregate principal amount of Certificated Notes.
Payments of principal of and premium, if any, and interest on Certificated Notes that are due and payable on the Final Maturity Date, any Redemption Date or any other date on which principal of such Notes is due and payable will be made by wire transfer of immediately available funds to accounts maintained by the Holders thereof in the United States, so long as such Holders have given appropriate wire transfer instructions to the Trustee or a Paying Agent for the Notes, against surrender of such Notes to the Trustee or a Paying Agent for the Notes; provided that installments of interest on Certificated Notes that are due and payable on any Interest Payment Date falling on or prior to such Final Maturity Date, Redemption Date or other date on which principal of such Notes is payable will be paid in the manner described in the preceding paragraph to the Persons who were the Holders of such Notes (or one or more Predecessor Securities) registered as such at the close of business on the relevant Regular Record Dates according to their terms and the provisions of the Indenture.
This Note is one of a duly authorized issue of Securities of the Company (herein called the Notes), issued as a series of Securities under an indenture dated as of October 28, 1998 (herein called, together with all indentures supplemental thereto, the Indenture), between the Company and The Bank of New York Trust Company, N.A. (successor trustee to The Bank of New York), as trustee (the Trustee, which term includes any successor trustee under the Indenture with respect to the Notes), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the duly authorized series designated as the 5 3/8% Senior Notes due 2017, limited (subject to exceptions provided in the Indenture and subject to the right of the Company to reopen such series for the issuance of additional Securities of such series on the terms and subject to the conditions specified in the Indenture) in aggregate principal amount to $175,000,000. All terms used in this Note which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.
The Notes may be redeemed at any time at the option of the Company, in whole at any time or from time to time in part, at a Redemption Price equal to the greater of:
(a) 100% of the principal amount of the Notes to be redeemed, and
(b) the sum of the present values of the remaining scheduled payments of principal of and interest on the Notes to be redeemed (exclusive of interest accrued to the applicable Redemption Date) discounted to such Redemption Date on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 25 basis points,
plus , in the case of both clauses (a) and (b) above, accrued and unpaid interest on the principal amount of the Notes being redeemed to such Redemption Date. Notwithstanding the foregoing, installments of interest on Notes whose Stated Maturity is on or prior to the relevant Redemption Date will be payable to the Holders of such Notes (or one or more Predecessor Securities) registered as such at the close of business on the relevant Regular Record Dates according to their terms and the provisions of the Indenture.
Notice of any redemption by the Company will be mailed at least 30 days but not more than 60 days before the applicable Redemption Date to each Holder of Notes to be redeemed.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company on the Notes and (b) certain restrictive covenants and the related defaults and Events of Default applicable to the Company, in each case, upon compliance by the Company with certain conditions set forth in the Indenture, which provisions apply to this Note.
In addition to the covenants of the Company contained in the Indenture, the Company makes the following covenants with respect to, and for the benefit of the Holders of, the Notes:
Limitation on Incurrence of Total Debt . The Company will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, if, immediately after giving effect to the incurrence of such additional Debt and the application of the proceeds therefrom on a pro forma basis, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 60% of the sum of (i) the Companys Total Assets as of the end of the latest fiscal quarter covered in the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing is not required under the Securities Exchange Act of 1934, as amended (the Exchange Act), with the Trustee) prior to the incurrence of such additional Debt and (ii) the increase, if any, in Total Assets from the end of such quarter including, without limitation, any increase in Total Assets caused by the application of the proceeds of such additional Debt (such increase together with the Companys Total Assets is referred to as the Adjusted Total Assets).
Limitation on Incurrence of Secured Debt. The Company will not, and will not permit any Subsidiary to, incur any Secured Debt, other than Intercompany Debt, if, immediately after giving effect to the incurrence of such additional Secured Debt and the application of the proceeds therefrom on a pro forma basis, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 40% of the Companys Adjusted Total Assets.
Debt Service Coverage. The Company will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, if the ratio of Consolidated Income Available for Debt Service to the Annual Debt Service Charge for the period consisting of the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred is less than 1.5 to 1.0, on a pro forma basis after giving effect to the incurrence of such Debt and the application of the proceeds therefrom, and calculated on the assumption that (i) such Debt and any other Debt incurred by the Company or any of its Subsidiaries since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four-quarter period) had occurred on the first day of such period, (ii) the repayment or retirement of any other Debt of the Company or any of its Subsidiaries since the first day of such four-quarter period had occurred on the first day of such period (except that, in making such computation, the amount of Debt under any revolving credit facility, line of credit or similar facility shall be computed based upon the average daily balance of such Debt during such period), and (iii) in the case of any acquisition or disposition by the Company or any Subsidiary of any asset or group of assets since the first day of such four-quarter period, including, without limitation, by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition had occurred on the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation. If the Debt giving rise to the need to make the foregoing calculation or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating rate then, for purposes of calculating the Annual Debt Service Charge, the interest rate on such Debt shall be computed on a pro forma basis as if the average interest rate which would have been in effect during the entire such four-quarter period had been the applicable rate for the entire such period.
Maintenance of Total Unencumbered Assets . The Company will maintain at all times Total Unencumbered Assets of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt of the Company and its Subsidiaries, computed on a consolidated basis in accordance with GAAP.
Certain Definitions . As used herein, the following terms will have the meanings set forth below:
Annual Debt Service Charge as of any date means the amount which is expensed in any 12-month period for interest on Debt of the Company and its Subsidiaries.
Business Day means any day, other than a Saturday or a Sunday, that is not a day on which banking institutions in The City of New York are authorized or required by law, regulation or executive order to close.
Comparable Treasury Issue means, with respect to any Redemption Date for the Notes, the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes to be redeemed.
Comparable Treasury Price means, with respect to any Redemption Date for the Notes:
(a) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Trustee obtains fewer than four but more than one such Reference Treasury Dealer Quotations for such Redemption Date, the average of all such quotations, or
(c) if the Trustee obtains only one such Reference Treasury Dealer Quotation for such Redemption Date, that Reference Treasury Dealer Quotation.
Consolidated Income Available for Debt Service for any period means Consolidated Net Income plus, without duplication, amounts which have been deducted in determining Consolidated Net Income during such period for (i) Consolidated Interest Expense, (ii) provisions for taxes of the Company and its Subsidiaries based on income, (iii) amortization (other than amortization of debt discount) and depreciation, (iv) provisions for losses from sales or joint ventures, (v) provisions for impairment losses, (vi) increases in deferred taxes and other non-cash charges, (vii) charges resulting from a change in accounting principles, and (viii) charges for early extinguishment of debt, and less, without duplication, amounts which have been added in determining Consolidated Net Income during such period for (a) provisions for gains from sales or joint ventures, and (b) decreases in deferred taxes and other non-cash items.
Consolidated Interest Expense for any period, and without duplication, means all interest (including the interest component of rentals on capitalized leases, letter of credit fees, commitment fees and other like financial charges) and all amortization of debt discount on all Debt (including, without limitation, payment-in-kind, zero coupon and other like securities) but excluding legal fees, title insurance charges, other out-of-pocket fees and expenses incurred in connection with the issuance of Debt and the amortization of any such debt issuance costs that are capitalized, all determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.
Consolidated Net Income for any period means the amount of consolidated net income (or loss) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.
Debt means any indebtedness of the Company or any Subsidiary, whether or not contingent, in respect of (i) money borrowed or evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance, trust deed, deed of trust, deed to secure debt, security agreement or any security interest existing on property owned by the Company or any Subsidiary, (iii) letters of credit or amounts representing the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes an accrued expense or trade payable or (iv) any lease of property by the Company or any Subsidiary as lessee that is reflected on the Companys consolidated balance sheet as a capitalized lease in accordance with GAAP, in the case of items of indebtedness under (i) through (iii) above to the extent that any such items (other than letters of credit) would appear as liabilities on the Companys consolidated balance sheet in accordance with GAAP, and also includes, to the extent not otherwise included, any obligation of the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), indebtedness of another Person (other than the Company or any Subsidiary) of the type referred to in (i), (ii), (iii) or (iv) above (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).
Executive Group means, collectively, those individuals holding the offices of Chairman, Vice Chairman, Chief Executive Officer, President, Chief Operating Officer or any Vice President of the Company.
Final Maturity Date means September 15, 2017.
Independent Investment Banker means, with respect to any Redemption Date for the Notes, Banc of America Securities LLC and its successors or Citigroup Global Markets Inc. and its successors (whichever shall be appointed by the Trustee after consultation with the Company) or, if both such firms or the respective successors, if any, to such firms, as the case may be, are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Company.
Intercompany Debt means indebtedness owed by the Company or any Subsidiary solely to the Company or any Subsidiary.
Reference Treasury Dealer means with respect to any Redemption Date for the Notes, Banc of America Securities LLC and Citigroup Global Markets Inc. and their respective successors (provided, however, that if any such firm or any such successor, as the case may be, ceases to be a primary U.S. Government securities dealer in The City of New York (a Primary Treasury Dealer), the Trustee, after consultation with the Company, shall substitute therefor another Primary Treasury Dealer) and two other Primary Treasury Dealers selected by the Trustee after consultation with the Company.
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer and any Redemption Date for the Notes, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
Secured Debt means Debt secured by any mortgage, lien, charge, encumbrance, trust deed, deed of trust, deed to secure debt, security agreement, pledge, conditional sale or other title retention agreement, capitalized lease, or other security interest or agreement granting or conveying security title to or a security interest in real property or other tangible assets.
Subsidiary means (i) any corporation, partnership, joint venture, limited liability company or other entity the majority of the shares, if any, of the non-voting capital stock or other equivalent ownership interests of which (except directors qualifying shares) are at the time directly or indirectly owned by the Company, and the majority of the shares of the voting capital stock or other equivalent ownership interests of which (except for directors qualifying shares) are at the time directly or indirectly owned by the Company, any other Subsidiary or Subsidiaries, and/or one or more individuals of the Executive Group (or, in the event of death or disability of any of such individuals, his/her respective legal representative(s), or such individuals successors in office as an officer of the Company), and (ii) any other entity the accounts of which are consolidated with the accounts of the Company. This definition shall apply only for purposes of the covenants set forth above under the captions Limitation on Incurrence of Total Debt, Limitation on Incurrence of Secured Debt, Debt Service Coverage, and Maintenance of Total Unencumbered Assets, the other definitions set forth herein under this caption Certain Definitions, and, insofar as Section 801 of the Indenture is applicable to the Notes, the term Subsidiary, as used in Section 801(2) of the Indenture, shall have the meaning set forth in this definition (instead of the meaning set forth in Section 101 of the Indenture).
Treasury Rate means, with respect to any Redemption Date for the Notes:
(a) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated H.15(519) or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption Treasury Constant Maturities, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Final Maturity Date of the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month), or
(b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
The Treasury Rate shall be calculated on the third Business Day preceding the applicable Redemption Date.
Total Assets as of any date means the sum of (i) Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP (but excluding accounts receivable and intangibles).
Total Unencumbered Assets as of any date means Total Assets minus the value of any properties of the Company and its Subsidiaries that are encumbered by any mortgage, charge, pledge, lien, security interest, trust deed, deed of trust, deed to secure debt, security agreement, or other encumbrance of any kind (other than those relating to Intercompany Debt), including the value of any stock of any Subsidiary that is so encumbered determined on a consolidated basis in accordance with GAAP. For purposes of this definition, the value of each property shall be equal to the purchase price or cost of each such property and the value of any stock subject to any encumbrance shall be determined by reference to the value of the properties owned by the issuer of such stock as aforesaid.
Undepreciated Real Estate Assets as of any date means the amount of real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization, determined on a consolidated basis in accordance with GAAP.
Unsecured Debt means Debt of the Company or any Subsidiary that is not Secured Debt.
If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a majority in principal
amount of the Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal of, or premium, if any, or interest on, this Note on or after the respective due dates therefor.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes. The Indenture also contains provisions permitting the Holders of not less than a majority in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not less than a majority of the aggregate principal amount of the Outstanding Notes to waive, in certain circumstances, on behalf of all Holders of the Notes, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and premium, if any, and interest on, this Note at the times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any Place of Payment for the Notes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar for the Notes duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of different authorized denominations, as requested by the Holder surrendering the same.
The Notes of this series are issuable only in registered form without interest coupons in denominations of $1,000 and any integral multiple thereof. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of, or premium, if any, or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor, either directly or through the Company or any successor, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
The headings included in this Note are for convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
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REALTY INCOME CORPORATION |
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By: |
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Thomas A. Lewis |
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Vice Chairman of the Board and |
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Chief Executive Officer |
Attest:
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Michael R. Pfeiffer |
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Executive Vice
President, General Counsel
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TRUSTEES CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
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Authorized Signatory |
Dated: September 15, 2005
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers to
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
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(Please Print or Typewrite Name and Address
including Zip Code of Assignee)
the within Note of REALTY INCOME CORPORATION, and |
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hereby does irrevocably constitute and appoint |
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Attorney to transfer said Note on the books of the within-named Company with full power of substitution in the premises.
Dated: |
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NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Note in every particular, without alteration or enlargement or any change whatever.
Signature Guaranty |
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(Signature must be guaranteed by |
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a participant in a signature |
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guarantee medallion program) |
Exhibit 4.3
Officers
Certificate
Pursuant to Sections 201, 301 and 303 of the Indenture
Dated: September 15, 2005
The undersigned, Paul M. Meurer, Executive Vice President, Chief Financial Officer and Treasurer, and Michael R. Pfeiffer, Executive Vice President, General Counsel and Secretary, of Realty Income Corporation, a Maryland corporation (the Company), hereby certify as follows:
The undersigned, having read the appropriate provisions of the Indenture dated as of October 28, 1998 (the Indenture) between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee), including Sections 201, 301 and 303 thereof and the definitions in such Indenture relating thereto, and certain other corporate documents and records, and having made such examination and investigation as, in the opinion of the undersigned, each considers necessary to enable the undersigned to express an informed opinion as to whether or not conditions set forth in the Indenture relating to the establishment of the title and terms of the Companys 5 3/8% Senior Notes due 2017 (the Securities) and the form of certificate evidencing the Securities have been complied with, and whether the conditions in the Indenture relating to the authentication and delivery by the Trustee of the Securities have been complied with, certify that (i) the title and terms of the Securities were established by the undersigned pursuant to authority delegated to them by resolutions duly adopted by the Board of Directors of the Company on August 23, 2005 (the Resolutions) and such terms are set forth in Annex I hereto (it being understood that, in the event that Securities are ever issued in definitive certificated form, the legends appearing as the first two paragraphs on the first page of such form of Securities may be removed), (ii) the form of certificate evidencing the Securities was established by the undersigned pursuant to authority delegated to them by the Resolutions and shall be in substantially the form attached as Annex II hereto, (iii) a true, complete and correct copy of the Resolutions, which were duly adopted by the Board of Directors of the Company and are in full force and effect in the form adopted on the date hereof, are attached as Annex III hereto and are also attached as an exhibit to the Certificate of the Secretary of the Company of even date herewith, (iv) the form, title and terms of the Securities have been established pursuant to and in accordance with Sections 201 and 301 of the Indenture and comply with the Indenture and, in the opinion of the undersigned, all conditions provided for in the Indenture (including, without limitation, those set forth in Sections 201, 301 and 303 of the Indenture) relating to the establishment of the title and terms of the Securities, the form of certificate evidencing the Securities and the execution, authentication and delivery of the Securities have been complied with and (v) to the best knowledge of the undersigned, no Event of Default (as defined in the Indenture) has occurred and is continuing with respect to the Securities.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, we have hereunto set our hands as of the date first written above.
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/s/ Paul M. Meurer |
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Paul M. Meurer |
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Executive Vice President, Chief Financial
Officer
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/s/ Michael R. Pfeiffer |
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Michael R. Pfeiffer |
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Executive Vice President, General Counsel and
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ANNEX I
Capitalized terms used in this Annex I and not otherwise defined herein have the same definitions as in the Indenture referred to in the Officers Certificate of which this Annex I constitutes a part.
Exhibit 5.1
[Venable LLP Letterhead]
September 15, 2005
Realty Income Corporation
220 West Crest Street
Escondido, California 92025
Re: Registration Statement on Form S-3
Registration No. 333-113032
Ladies and Gentlemen:
We have served as Maryland counsel to Realty Income Corporation, a Maryland corporation (the Company), in connection with certain matters of Maryland law arising out of the Companys registration statement on Form S-3 (No. 333-113032), and all amendments thereto (the Registration Statement), previously declared effective by the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the 1933 Act), relating to the proposed public offering of securities of the Company that may be offered and sold by the Company from time to time as set forth in the prospectus dated March 23, 2004 which forms a part of the Registration Statement (the Base Prospectus). This opinion is rendered in connection with the sale and issuance of up to $175,000,000 aggregate principal amount of the Companys 5 3 / 8 % Senior Notes due 2017 (the Securities), as described in a prospectus supplement dated September 8, 2005 (the Prospectus Supplement and, together with the Base Prospectus, the Prospectus). Capitalized terms used but not defined herein shall have the meanings given to them in the Registration Statement.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the Documents):
1. The Registration Statement and the related form of Prospectus in the form in which it was transmitted to the Commission under the 1933 Act;
2. The charter of the Company (the Charter), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the SDAT);
3. The Bylaws of the Company (the Bylaws), certified as of the date hereof by an officer of the Company;
4. Resolutions adopted by the Board of Directors of the Company relating to, among other matters, (i) the sale, issuance and registration of the Securities, (ii) the execution, delivery and performance of the Purchase Agreement and the Indenture (each as defined herein) and (iii) the execution and delivery of the Global Security (as defined herein), certified as of the date hereof by an officer of the Company;
5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
6. A certificate executed by an officer of the Company, dated as of the date hereof;
7. A copy of the executed Purchase Agreement, dated September 8, 2005 (the Purchase Agreement), by and among Banc of America Securities LLC and Citigroup Global Markets Inc., acting for themselves and as representatives of the underwriters named in Schedule A thereto, and the Company;
8. A copy of the executed Indenture, dated as of October 28, 1998 (the Indenture), between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee) to The Bank of New York, as original trustee;
9. A copy of the executed note evidencing the Securities (the Global Security);
10. Copies of executed Officers Certificates relating to the Securities, pursuant to Sections 201, 301 and 303 of the Indenture and the Company Order relating to the Securities pursuant to Section 303 of the Indenture;
11. The Companys Current Report on Form 8-K (the 8-K); and
12. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth in this letter, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
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2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such partys obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
2. The Securities have been duly authorized by all necessary corporate action on the part of the Company, and the Global Security has been duly executed by the Company and, when duly authenticated by the Trustee in the manner provided in the Indenture and delivered against payment of the purchase price therefor specified in the Purchase Agreement, the Securities will be duly and validly issued by the Company.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability or effect of any federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by any jurisdiction other than the State of Maryland, we do not express any opinion on such matter.
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We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for your submission to the Commission as an exhibit to the 8-K and incorporation by reference into the Registration Statement and, accordingly, may not be relied upon by, quoted in any manner to, or delivered to any other person or entity (other than Latham & Watkins, counsel to the Company, in connection with its opinion of even date herewith) without, in each instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the 8-K and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
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Very truly yours, |
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/s/ Venable LLP |
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Exhibit 5.2
[Latham & Watkins LLP Letterhead]
September 15, 2005
Realty Income Corporation
220 West Crest Street
Escondido, California 92025
Re: Registration Statement No. 333-113032; $175,000,000
Aggregate Principal Amount of 5 3/8% Senior Notes due 2017
Ladies and Gentlemen:
We have acted as special counsel to Realty Income Corporation, a Maryland corporation (the Company), in connection with the issuance of $175,000,000 aggregate principal amount of 5 3/8% Senior Notes due 2017 (the Securities) under the Indenture dated as of October 28, 1998 (the Indenture), between the Company and The Bank of New York Trust Company, N.A., as successor trustee (the Trustee), pursuant to (i) a registration statement on Form S-3 under the Securities Act of 1933, as amended (the 1933 Act), filed with the Securities and Exchange Commission (the Commission) on February 24, 2004 (File No. 333-113032), as amended by Amendment No. 1 filed with the Commission on March 11, 2004 (as so amended, the Registration Statement), (ii) a prospectus supplement dated September 8, 2005 (the Prospectus Supplement) and a related prospectus dated March 23, 2004 (collectively the Prospectus), and (iii) a purchase agreement dated September 8, 2005 (the Purchase Agreement) by and among Banc of America Securities LLC and Citigroup Global Markets Inc. as representatives of the several underwriters named in Schedule A thereto and the Company. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act, and no opinion is expressed herein as to any matters pertaining to the contents of the Registration Statement or the Prospectus, other than as to the enforceability of the Securities.
As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon the foregoing and upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters.
We are opining herein as to the internal laws of the State of New York, and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction, or as to any matters of municipal law or the laws of any local agencies within any state. We understand that certain matters concerning the laws of the State of Maryland are
addressed in an opinion of Venable LLP, separately provided to you, and we express no opinion with respect to those matters.
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Securities have been duly executed, issued, and authenticated in accordance with the terms of the Indenture and delivered on behalf of the Company against payment of the purchase price therefor specified in the Purchase Agreement, the Securities will be legally valid and binding obligations of the Company enforceable against it in accordance with their terms.
The opinion rendered in the foregoing paragraph relating to the enforceability of the Securities is subject to the following exceptions, limitations and qualifications: (i) the effect of bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, whether enforcement is considered in a proceeding in equity or law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor may be brought; (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; (iv) restrictions upon non-written modifications and waivers; and (v) we express no opinion concerning the enforceability of (a) the waiver of rights or defenses contained in the Indenture; (b) any provision requiring payment of attorneys fees, where such payment is contrary to law or public policy; or (c) any provision permitting, upon acceleration of the Securities, collection of that portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon.
With your consent, we have assumed for purposes of this opinion that (i) the Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Maryland, and has the corporate power and authority to enter into and consummate the transactions contemplated by the Purchase Agreement, the Indenture and the Securities (collectively, the Documents); (ii) the Securities have been duly authorized for issuance by all necessary corporate action by the Company and the execution, delivery and performance of the Documents have been duly authorized by all necessary corporate action by the Company; (iii) the Documents have been duly authorized, executed and delivered by the parties thereto, including the Company; (iv) the Documents constitute legally valid and binding obligations of the parties thereto other than the Company, enforceable against each of them in accordance with their respective terms; and (v) the status of the Documents as legally valid and binding obligations of the parties is not affected by any (a) breaches of, or defaults under, agreements or instruments, (b) violations of statutes, rules, regulations or court or governmental orders, or (c) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations or filings with, governmental authorities.
This opinion is for your benefit in connection with the Registration Statement and the Prospectus and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of federal securities laws. We consent to your filing this opinion as an
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exhibit to a current report on Form 8-K and to the reference to our firm in the Prospectus Supplement under the heading Legal Matters. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act or the rule and regulations of the Commission thereunder.
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Very truly yours, |
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/s/ Latham & Watkins LLP |
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3
Exhibit 12.1
REALTY INCOME CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND COMPUTATION OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in thousands)
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Six months
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Years ended December 31, |
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||||||||||||||
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2005 |
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2004 |
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2003 |
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2002 |
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2001 |
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2000 |
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Net Income |
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$ |
48,169 |
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$ |
103,397 |
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$ |
86,435 |
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$ |
78,667 |
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$ |
67,558 |
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$ |
54,788 |
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Fixed Charges: |
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Interest |
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17,751 |
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31,992 |
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24,459 |
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21,072 |
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23,981 |
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29,054 |
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Interest, discontinued operations |
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310 |
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674 |
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561 |
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394 |
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869 |
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913 |
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Amortization of fees |
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1,100 |
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2,140 |
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1,954 |
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2,070 |
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1,616 |
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1,580 |
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Interest Capitalized |
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625 |
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531 |
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697 |
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511 |
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385 |
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1,048 |
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Fixed Charges |
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19,786 |
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35,337 |
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27,671 |
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24,047 |
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26,851 |
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32,595 |
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Net Income before Fixed Charges |
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67,330 |
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138,203 |
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113,409 |
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102,203 |
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94,024 |
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86,335 |
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Divided by Fixed Charges |
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19,786 |
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35,337 |
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27,671 |
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24,047 |
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26,851 |
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32,595 |
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Ratio of Earnings to Fixed Charges |
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3.4 |
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3.9 |
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4.1 |
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4.3 |
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3.5 |
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2.6 |
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Ratio of earnings to combined fixed charges and preferred stock dividends |
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2.7 |
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3.1 |
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3.0 |
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3.0 |
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2.6 |
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2.0 |
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Preferred stock dividends |
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$ |
4,702 |
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$ |
9,455 |
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$ |
9,713 |
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$ |
9,713 |
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$ |
9,712 |
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$ |
9,712 |
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