Supplemental Information

Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE: O), today announced record operating results for the fourth quarter and year ended December 31, 2012. Access to this document is available at www.realtyincome.com. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.

COMPANY HIGHLIGHTS:

For the quarter ended December 31, 2012 (as compared to the same quarterly period in 2011):
  • Revenue increased 16.4% to $130.1 million as compared to $111.8 million
  • Net income available to common stockholders per share was $0.21
  • Normalized FFO available to common stockholders increased 8.7% to $74.0 million
  • Normalized FFO per share increased 9.8% to $0.56
  • AFFO available to common stockholders increased 6.4% to $72.9 million
  • AFFO per share increased 5.8% to $0.55
  • Same store rents increased 0.4% to $90.85 million
  • Portfolio occupancy increased to 97.2% from 97.0%
  • Invested $447 million in real estate, acquiring 189 new properties and properties under development
  • The monthly dividend was increased in December, for the 69 th time and for the 61 st consecutive quarter
  • Raised gross proceeds of $800 million in an offering of senior unsecured notes due 2018 and 2022
  • Dividends paid per common share increased 4.1%

For the year ended December 31, 2012 (as compared to 2011):
  • Revenue increased 15.9% to $475.5 million as compared to $410.3 million
  • Net income available to common stockholders per share was $0.86
  • Normalized FFO available to common stockholders increased 7.8% to $268.8 million
  • Normalized FFO per share increased 2.0% to $2.02
  • AFFO available to common stockholders increased 8.2% to $274.2 million
  • AFFO per share increased 2.5% to $2.06
  • Same store rents increased 0.1% to $360.4 million
  • Invested $1.16 billion in real estate, acquiring 423 new properties
  • Raised gross proceeds of $1.21 billion in public securities offerings to fund 2012 real estate acquisitions, repay borrowings under the credit facility, and redeem all outstanding Class D preferred shares
  • Dividends paid per common share increased 2.0%
  • Paid the 509 th consecutive monthly dividend in December 2012
  • Total return to shareholders of 20.1% based on dividends paid and share price growth

Major events subsequent to December 31, 2012:
  • On January 22, 2013, Realty Income closed on the acquisition of American Realty Capital Trust
  • Increased the annualized dividend amount by $0.35 to $2.171 per share

Financial Results

Revenue

Revenue, for the quarter ended December 31, 2012, increased 16.4% to $130.1 million as compared to $111.8 million for the same quarter in 2011. Revenue for 2012 increased 15.9% to $475.5 million as compared to $410.3 million for 2011.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended December 31, 2012, was $28.5 million as compared to $34.9 million for the same quarter in 2011. Net income per share, for the quarter ended December 31, 2012, was $0.21 as compared to $0.26 for the same quarter in 2011. The decrease in net income available to common stockholders includes $2.4 million of ARCT merger-related costs.

Net income available to common stockholders, in 2012, was $114.5 million as compared to $132.8 million for 2011. Net income per share, in 2012, was $0.86 as compared to $1.05 for 2011. The decrease in net income available to common stockholders includes a $3.7 million non-cash redemption charge on the Class D preferred shares that were redeemed in March 2012 and $7.9 million of ARCT merger-related costs.

The calculation to determine net income for a real estate company includes impairments and/or gains from the sales of investment properties. Impairments and/or gains on property sales vary from quarter to quarter. This variance can significantly impact net income.

FFO Available to Common Stockholders

Funds from Operations (FFO), for the quarter ended December 31, 2012, increased 5.1% to $71.6 million as compared to $68.1 million for the same quarter in 2011. FFO per share, for the quarter ended December 31, 2012, increased 5.9% to $0.54 as compared to $0.51 for the same quarter in 2011.

FFO in 2012 increased 4.6% to $260.9 million as compared to $249.4 million for 2011. FFO per share, in 2012, decreased 1.0% to $1.96 as compared to $1.98 for 2011. The decrease in FFO per share is due to a $3.7 million non-cash redemption charge on the Class D preferred shares that were redeemed in March 2012 and $7.9 million of ARCT merger-related costs. Excluding the $3.7 million charge, FFO per share is $1.99 for 2012, an increase of 0.5% as compared to 2011.

Normalized FFO Available to Common Stockholders

Normalized Funds from Operations, which is based on FFO adjusted to add back ARCT merger-related costs, for the quarter ended December 31, 2012, increased 8.7% to $74.0 million as compared to $68.1 million for the same quarter in 2011. Normalized FFO per share, for the quarter ended December 31, 2012, increased 9.8% to $0.56 as compared to $0.51 for the same quarter in 2011.

Normalized FFO in 2012 increased 7.8% to $268.8 million as compared to $249.4 million for 2011. Normalized FFO per share, in 2012, increased 2.0% to $2.02 as compared to $1.98 for 2011. Normalized FFO per share includes a $3.7 million non-cash, redemption charge on the Class D preferred shares that were redeemed in March 2012. Excluding this $3.7 million charge, normalized FFO per share is $2.05 for 2012, an increase of 3.5% as compared to 2011.

AFFO Available to Common Stockholders

Adjusted Funds from Operations (AFFO), for the quarter ended December 31, 2012, increased 6.4% to $72.9 million as compared to $68.5 million for the same quarter in 2011. AFFO per share, for the quarter ended December 31, 2012, increased 5.8% to $0.55 as compared to $0.52 for the same quarter in 2011.

AFFO in 2012 increased 8.2% to $274.2 million as compared to $253.4 million for 2011. AFFO per share, in 2012, increased 2.5% to $2.06 as compared to $2.01 for 2011.

The company considers FFO, normalized FFO and AFFO to be appropriate supplemental measures of a Real Estate Investment Trust’s (REIT’s) operating performance. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust’s (NAREIT’s) definition as net income available to common stockholders plus depreciation and amortization of real estate assets, plus impairments of real estate, reduced by gains on sales of investment properties and extraordinary items. Normalized FFO adds back ARCT merger-related costs for our acquisition of American Realty Capital Trust (ARCT). AFFO further adjusts Normalized FFO for unique revenue and expense items which are not pertinent to the measurement of our ongoing operating performance. See our reconciliation of net income available to common stockholders to FFO, normalized FFO and AFFO on page seven.

Dividend Information

In December 2012, Realty Income announced the 61 st consecutive quarterly dividend increase, which is the 69 th increase in the amount of the dividend since the company’s listing on the New York Stock Exchange in 1994. The annualized dividend amount, as of December 31, 2012, was $1.821 per share. The amount of the monthly dividends paid increased 2.0% to $1.771625 per share in 2012 from $1.736625 per share for 2011. In addition, through December 31, 2012, the company has paid 509 consecutive monthly dividends and over $2.3 billion in total dividends since 1969. Realty Income has a dividend reinvestment and stock purchase program that can be accessed at www.realtyincome.com. The program is administered by Wells Fargo Shareowner Services.

Real Estate Portfolio Update

As of December 31, 2012, Realty Income’s portfolio of freestanding, single-tenant properties consisted of 3,013 properties located in 49 states, leased to 150 commercial enterprises doing business in 44 industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 11.0 years.

Portfolio Management Activities

The company’s portfolio of commercial real estate, owned primarily under 10- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of December 31, 2012, portfolio occupancy was 97.2% with 84 properties available for lease out of a total of 3,013 properties in the portfolio, as compared to 97.0% portfolio occupancy as of September 30, 2012.

Rent Increases

During the quarter ended December 31, 2012, same store rents on 2,220 properties under lease increased 0.4% to $90.85 million, as compared to $90.47 million for the same quarter in 2011. During 2012, same store rents on 2,220 properties under lease increased 0.1% to $360.4 million, as compared to $360.0 million for 2011.

Property Acquisitions

During the fourth quarter of 2012, Realty Income invested $447 million in real estate, acquiring 189 new properties and properties under development. The new properties are located in 27 states and are 100% leased with an average lease term of 14.9 years and an initial average lease yield of 7.4%.

During 2012, Realty Income invested $1.16 billion in real estate, acquiring 423 new properties and properties under development. The new properties are located in 37 states and are 100% leased with an average lease term of 14.6 years and an initial average lease yield of 7.2%.

Realty Income maintains a $1.0 billion unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. As of December 31, 2012, outstanding borrowings on the company’s acquisition credit facility were $158 million, and borrowing capacity was $842 million.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in the fourth quarter of 2012. The objective of this program is to sell assets when the company believes the reinvestment of the sales proceeds will generate higher returns, enhance the credit quality of the company's real estate portfolio, increase the average lease length, and/or decrease tenant or industry concentration.

During the quarter ended December 31, 2012, Realty Income sold 14 properties for $16.3 million, with a gain on sales of $3.9 million, as compared to five properties sold for $11.7 million, with a gain on sales of $1.2 million, during the same quarter in 2011.

During 2012, Realty Income sold 44 properties for $50.6 million, with a gain on sales of $9.9 million, as compared to 26 properties sold for $24.1 million, with a gain on sales of $5.7 million, during 2011.

Other Activities

Acquisition of American Realty Capital Trust (ARCT)

In September 2012, Realty Income entered into a definitive merger agreement to acquire all of the outstanding shares of ARCT. This transaction closed on January 22, 2013 and, at that time, Realty Income issued approximately 45.6 million shares to ARCT shareholders based on a fixed exchange ratio of 0.2874 shares of Realty Income stock for each share of ARCT common stock owned. The company also made a cash payment of $0.35 per ARCT share to each ARCT shareholder. In conjunction with the acquisition of ARCT, Realty Income assumed approximately $516.3 million of mortgages payable and repaid approximately $552.9 million of borrowings under ARCT’s revolving credit facility and term loan. The total transaction value is approximately $3.1 billion. Upon closing, Realty Income became the 18 th largest real estate investment trust in the US, with an enterprise value of approximately $12.6 billion and an equity market capitalization of approximately $8.5 billion. In addition, the company’s real estate portfolio, upon the closing, consisted of 3,528 properties leased to 202 tenants doing business in 48 industries. A “Supplemental Information” section has been added to the end of this press release to provide pro forma operating metrics for Realty Income after integrating the ARCT real estate into the company’s core portfolio.

January 2013 Dividend Increase

On January 22, 2013, Realty Income increased the amount of the annualized dividend 19.2%. The new dividend amount represents an annualized increase of $0.35 per share, to $2.171 per share, as compared to the prior annualized dividend amount of $1.821 per share. The new monthly dividend amount of $0.1890167 per share will be paid on February 15, 2013 to shareholders of record on February 1, 2013.

Priced $800 Million of Senior Unsecured Notes Due 2018 and 2022

On October 10, 2012, the company closed its offering of $350 million of 5-year 2.00% fixed rate Notes, due January 2018, and $450 million of 10-year 3.25% fixed rate Notes, due October 2022. The public offering price for the 5-year notes was 99.910% of the principal amount for an effective yield to maturity of 2.017%. The public offering price for the 10-year notes was 99.382% of the principal amount for an effective yield to maturity of 3.323%. The net proceeds from the offering were used to repay borrowings outstanding on the company’s $1.0 billion acquisition credit facility, and the remaining proceeds were used for general corporate purposes, which included additional property acquisitions.

CEO Comments on Operating Results

Commenting on Realty Income’s financial results and real estate operations, Chief Executive Officer, Tom A. Lewis said, “We are very pleased to report increases in rental revenue, adjusted funds from operations (AFFO) and dividends during the fourth quarter of 2012. In addition, our net-leased property portfolio continued to exhibit strong performance with occupancy increasing to 97.2%.

“We also invested $447 million in real estate during the fourth quarter, acquiring 189 new properties and properties under development, bringing our total dollars invested in real estate to $1.16 billion in 2012, the highest level in a single year since the company was founded in 1969. The initial average lease yield for the fourth quarter acquisitions was 7.4% and for 2012 was 7.2%. Importantly, the majority of the properties acquired are leased to investment-grade tenants, consistent with our strategic focus on continuing to increase the overall credit quality of our real estate portfolio. As we begin 2013, real estate transaction flow continues to offer us ample real estate investment opportunities.

“Perhaps the highlight of 2012 was the announcement of our planned acquisition of ARCT, which closed on January 22, 2013. As we commented on many times during the merger and acquisition process, the completion of the ARCT acquisition positions Realty Income as the largest public net-lease REIT, and one of the larger REITs in our industry. More importantly, the 515 properties that were added to our real estate portfolio are immediately accretive to our earnings and significantly advance our objective to increase the overall credit quality of the lease revenue supporting the payment of dividends. Upon closing of the transaction, anticipated lease revenue generated by investment grade rated tenants rises to 34%, compared to 19% prior to the ARCT acquisition.”

“We were also successful in accessing the capital markets during 2012, generating gross proceeds of $1.21 billion through total preferred stock offerings of $409 million in both February and April 2012, and senior unsecured notes offerings of $800 million in October 2012. This capital raising activity allowed us to fund our acquisitions during 2012. In addition, we entered into a new and expanded $1.0 billion credit facility with our commercial banks earlier in the year, so we have ample access to funds allowing us to pursue additional real estate investment opportunities.

“Our ability to increase the amount of the monthly dividend paid to our shareholders was supported by the record operating results during the year. We were able to provide four quarterly dividend increases, as well as a special August 2012 increase of 3.4%. As a result, our shareholders enjoyed a 2.0% increase in the amount of the dividends paid per share during 2012. Since the closing of the ARCT acquisition, we announced another $0.35 per share annual increase in the amount of the dividend. The new annualized dividend amount, as of January 22, 2013, is $2.171 per share. Providing monthly dividends that increase over time is our mission, thus we remain focused on operating our business in a manner consistent with achieving that mission.”

FFO Commentary

Realty Income’s FFO per share has historically tended to be stable and fairly predictable because of the long-term leases that are the primary source of the company’s revenue. There are, however, several factors that can cause FFO per share to vary from levels that have been anticipated by the company. These factors include, but are not limited to, changes in interest rates and occupancy rates, periodically accessing the capital markets, the level and timing of property and entity acquisitions and dispositions, integration of the acquired ARCT properties including the finalization of purchase price allocations, lease rollovers, the general real estate market, and the economy.

2013 Earnings Estimates

Normalized FFO is based on FFO adjusted to add back ARCT merger-related costs. The Normalized 2013 FFO and AFFO estimates are as follows (excluding the costs associated with the ARCT transaction):

Normalized FFO per share for 2013 should range from $2.32 to $2.38 per share, an increase of 14.9% to 17.8% over the Normalized 2012 FFO per share of $2.02. Normalized FFO per share for 2013 is based on an estimated net income per share range of $1.05 to $1.11, plus estimated real estate depreciation of $1.50 and reduced by potential estimated gains on sales of investment properties of $0.23 per share (in accordance with NAREIT’s definition of FFO).

AFFO per share for 2013 should range from $2.33 to $2.39 per share, an increase of 13.1% to 16.0% over the 2012 AFFO per share of $2.06. The AFFO per share estimate for 2013 is based on adding back items to FFO, that reduce net income, totaling approximately $0.10, and deducting capitalized expenditures and straight-line rent revenue items totaling approximately $0.08, for a net increase of $0.01 to $0.02 over Normalized FFO.

About Realty Income

Realty Income is The Monthly Dividend Company ®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of January 15, 2013, the company had paid 510 consecutive monthly dividends throughout its 44-year operating history. The monthly income is supported by the cash flows from over 3,500 properties owned under long-term lease agreements with 202 leading regional and national commercial enterprises. The company is an active buyer of net-leased properties nationwide. Additional information about the company can be obtained from the corporate website at www.realtyincome.com or www.twitter.com/realtyincome.

Forward-Looking Statements

Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, integration of the ARCT acquisition, and the outcome of any legal proceedings to which the company is a party, as described in the company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

Note to Editors: Realty Income press releases are available via the internet at http://www.realtyincome.com/invest/newsroom-library/press-releases.shtml.

                       

CONSOLIDATED STATEMENTS OF INCOME

For the three months and years ended December 31, 2012 and 2011

(dollars in thousands, except per share amounts - unaudited)
 

Three Months

Ended 12/31/12

Three Months

Ended 12/31/11

Year Ended

12/31/12

Year Ended

12/31/11
REVENUE
Rental $ 129,619 $ 110,978 $ 473,741 $ 408,640
Other   520     777     1,769     1,612  

Total revenue
 

130,139
   

111,755
   

475,510
   

410,252
 
 
EXPENSES
Depreciation and amortization 42,313 33,714 149,597 118,874
Interest 35,065 28,983 122,542 108,301
General and administrative 10,223 7,953 37,998 30,954
Property 1,669 1,950 7,269 6,018
Income taxes 215 367 1,430 1,470
ARCT merger-related costs 2,404 -- 7,899 --
Provisions for impairment   2,804     --     2,804     10  
 
Total expenses   94,693     72,967     329,539     265,627  
 
Income from continuing operations 35,446 38,788 145,971 144,625
Income from discontinued operations   3,578     2,216     13,181     12,407  
 
Net income 39,024 41,004 159,152 157,032
Preferred stock dividends (10,482 ) (6,063 ) (40,918 ) (24,253 )
Excess of redemption value over carrying value of preferred shares redeemed  

--
   

--
   

(3,696

)
 

--
 
 
Net income available to common stockholders $ 28,542   $ 34,941   $ 114,538   $ 132,779  
 

Funds from operations available to common stockholders (FFO)

$

71,579

$

68,077

$

260,862

$

249,392

Normalized funds from operations available to common stockholders (Normalized FFO)

$

73,983

$

68,077

$

268,761

$

249,392

Adjusted funds from operations available to common stockholders (AFFO)

$

72,892

$

68,524

$

274,183

$

253,372
 
Per share information for common stockholders:

Income from continuing operations, basic and diluted

$

0.19

$

0.25

$

0.76

$

0.95
Net income, basic and diluted $ 0.21 $ 0.26 $ 0.86 $ 1.05
FFO, basic and diluted $ 0.54 $ 0.51 $ 1.96 $ 1.98
Normalized FFO, basic and diluted $ 0.56 $ 0.51 $ 2.02 $ 1.98
AFFO, basic and diluted $ 0.55 $ 0.52 $ 2.06 $ 2.01
Cash dividends paid per common share $ 0.454 $ 0.436 $ 1.772 $ 1.737
 
 
                       

FUNDS FROM OPERATIONS (FFO)

(dollars in thousands, except per share amounts)
 
Three Months

Ended 12/31/12
Three Months

Ended 12/31/11
Year Ended

12/31/12
Year Ended

12/31/11
Net income available to common stockholders $ 28,542 $ 34,941 $ 114,538 $ 132,779
Depreciation and amortization:
Continuing operations 42,313 33,714 149,597 118,874
Discontinued operations 172 659 1,710 3,305
Depreciation of furniture, fixtures & equipment (57 ) (59 ) (249 ) (238 )

Provisions for impairment on Realty Income investment properties

 

4,472

27

5,139

405
Gain on sales of investment properties:
Continuing operations -- (330 ) -- (540 )
Discontinued operations   (3,863 )   (875 )   (9,873 )   (5,193 )
FFO available to common stockholders 71,579 68,077 260,862 249,392
ARCT merger-related costs   2,404     --     7,899     --  
Normalized FFO available to common stockholders $ 73,983   $ 68,077     268,761   $ 249,392  
FFO per common share, basic and diluted $ 0.54 $ 0.51 $ 1.96 $ 1.98
Normalized FFO per common share, basic and diluted $ 0.56 $ 0.51 $ 2.02 $ 1.98
Dividends paid to common stockholders $ 60,629 $ 58,021 $ 236,348 $ 219,297

Normalized FFO in excess of dividends paid to common stockholders

$

13,354

$

10,056

$

32,413

$

30,095
Weighted average number of common shares used for computation per share:
Basic 132,846,497 132,353,040 132,817,472 126,142,696
Diluted 132,979,552 132,609,319 132,884,933 126,189,399
 

We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trust’s definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, reduced by gains on sales of investment properties and extraordinary items. We define normalized FFO, a non-GAAP measure, as FFO excluding the ARCT merger-related costs.
 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(dollars in thousands, except per share amounts)
 
Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution).
 
      Three Months

Ended 12/31/12
     

Three Months

Ended 12/31/11
      Year Ended

12/31/12
      Year Ended

12/31/11
Net income available to common stockholders $ 28,542 $ 34,941 $ 114,538 $ 132,779
Cumulative adjustments to calculate normalized FFO (1)   45,441     33,136     154,223     116,613  
Normalized FFO available to common stockholders 73,983 68,077 268,761 249,392
Excess of redemption value over carrying value of preferred share redemption -- -- 3,696 --
Amortization of share-based compensation 2,221 1,775 10,001 7,873
Amortization of deferred financing costs (2) 543 546 2,177 1,881
Capitalized leasing costs and commissions (401 ) (478 ) (1,619 ) (1,722 )
Capitalized building improvements (1,652 ) (714 ) (4,935 ) (2,450 )
Other adjustments (3)   (1,802 )   (682 )   (3,898 )   (1,602 )
Total AFFO available to common stockholders $ 72,892   $ 68,524   $ 274,183   $ 253,372  
AFFO per common share, basic and diluted $ 0.55 $ 0.52 $ 2.06 $ 2.01
Dividends paid to common stockholders $ 60,629 $ 58,021 $ 236,348 $ 219,297

AFFO in excess of dividends paid to common stockholders
$ 12,263 $ 10,503 $ 37,835 $ 34,075
 
(1)     See FFO and normalized FFO calculation above for reconciling items.
(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, June 2011, and October 2012. Additionally, this includes the amortization of deferred financing costs incurred and capitalized in connection with our assumption of the mortgages payable. 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.
 
 
                     

HISTORICAL FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

 

For the three months ended December 31,
2012 2011 2010 2009 2008
 
Net income available to common stockholders $ 28,542 $ 34,941 $ 31,814 $ 29,268 $ 28,269
Depreciation and amortization 42,428 34,314 25,045 22,916 22,869
Provisions for impairment on Realty Income investment properties

4,472

27

42

110

--
Gain on sales of investment properties   (3,863 )   (1,205 )   (4,392 )   (3,809 )   (4,111 )
 
FFO 71,579 68,077 52,509 48,485 47,027
ARCT merger-related costs   2,404     --     --     --     --  
Normalized FFO $ 73,983   $ 68,077   $ 52,509   $ 48,485   $ 47,027  
 
Normalized FFO per diluted share $ 0.56 $ 0.51 $ 0.47 $ 0.47 $ 0.46
 
Normalized FFO $ 73,983 $ 68,077 $ 52,509 $ 48,485 $ 47,027
Add (less) FFO contributed by Crest   (245 )   (176 )   551     (649 )   (8 )
 
Normalized FFO before Crest contribution $ 73,738   $ 67,901   $ 53,060   $ 47,836   $ 47,019  
 
Normalized FFO components, per diluted share (1):
FFO before Crest contribution $ 0.55 $ 0.51 $ 0.47 $ 0.46 $ 0.46
Crest FFO contribution $ 0.00 $ 0.00 $ 0.00 $ 0.01 $ 0.00
Normalized FFO $ 0.56 $ 0.51 $ 0.47 $ 0.47 $ 0.46
 
AFFO $ 72,892 $ 68,524 $ 53,327 $ 48,622 $ 47,399
 
AFFO per diluted share $ 0.55 $ 0.52 $ 0.48 $ 0.47 $ 0.46
 
Cash dividends paid per share $ 0.454 $ 0.436 $ 0.432 $ 0.428 $ 0.423
Weighted average diluted shares outstanding 132,979,552 132,609,319 112,067,874 103,491,891 103,266,636
 
 

For the years ended December 31,
2012 2011 2010 2009 2008
 
Net income available to common stockholders $ 114,538 $ 132,779 $ 106,531 $ 106,874 $ 107,588
Depreciation and amortization 151,058 121,941 95,858 91,629 91,486
Provisions for impairment on Realty Income investment properties

5,139

405

213

110

--
Gain on sales of investment properties   (9,873 )   (5,733 )   (8,676 )   (8,059 )   (13,550 )
 
FFO 260,862 249,392 193,926 190,554 185,524
ARCT merger-related costs   7,899     --     --     --     --  
Normalized FFO $ 268,761   $ 249,392   $ 193,926   $ 190,554   $ 185,524  
 
Normalized FFO per diluted share $ 2.02 $ 1.98 $ 1.83 $ 1.84 $ 1.83
 
Normalized FFO $ 268,761 $ 249,392 $ 193,926 $ 190,554 $ 185,524
Less FFO contributed by Crest   (824 )   (736 )   (35 )   (958 )   (1,346 )
 
Normalized FFO before Crest contribution $ 267,937   $ 248,656   $ 193,891   $ 189,596   $ 184,178  
 
Normalized FFO components, per diluted share (1):
FFO before Crest contribution $ 2.02 $ 1.97 $ 1.83 $ 1.83 $ 1.82
Crest FFO contribution $ 0.01 $ 0.01 $ 0.00 $ 0.01 $ 0.01
Normalized FFO $ 2.02 $ 1.98 $ 1.83 $ 1.84 $ 1.83
 
AFFO $ 274,183 $ 253,372 $ 197,256 $ 192,739 $ 192,003
 
AFFO per diluted share $ 2.06 $ 2.01 $ 1.86 $ 1.86 $ 1.90
 
Cash dividends paid per share $ 1.772 $ 1.737 $ 1.722 $ 1.707 $ 1.662
Weighted average diluted shares outstanding 132,884,933 126,189,399 105,942,721 103,581,053 101,209,883
 
(1)     The above FFO per share amounts have been rounded to the nearest two decimals and, as such, the individual amounts may not add up to the “Total FFO” amount.
 
 
                       

CONSOLIDATED BALANCE SHEETS

As of December 31, 2012 and December 31, 2011

(dollars in thousands, except per share amounts)
 
2012 2011
(unaudited)
ASSETS
Real estate, at cost:
Land $ 1,999,820 $ 1,749,378
Buildings and improvements   3,920,865     3,222,603  
Total real estate, at cost 5,920,685 4,971,981
Less accumulated depreciation and amortization   (897,767 )   (814,126 )
 
Net real estate held for investment 5,022,918 4,157,855
Real estate held for sale, net   19,219     2,153  
Net real estate 5,042,137 4,160,008
Cash and cash equivalents 5,248 4,165
Accounts receivable, net 21,659 15,375
Goodwill 16,945 17,206
Other assets, net   357,374     222,635  
 
Total assets $ 5,443,363   $ 4,419,389  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Distributions payable $ 23,745 $ 21,405
Accounts payable and accrued expenses 70,426 58,770
Other liabilities 52,530 29,179
Lines of credit payable 158,000 237,400
Mortgages payable, net 175,868 67,781
Notes payable   2,550,000     1,750,000  
 
Total liabilities   3,030,569     2,164,535  
 
Stockholders’ equity:
Preferred stock and paid in capital 609,363 337,790
Common stock and paid in capital 2,572,092 2,563,048
Distributions in excess of net income   (768,661 )   (645,984 )
 
Total stockholders’ equity   2,412,794     2,254,854  
 
Total liabilities and stockholders’ equity $ 5,443,363   $ 4,419,389  
 
 
               

Realty Income Performance vs. Major Stock Indices
 
Equity Dow Jones NASDAQ
Realty Income REIT Index (1) Industrial Average S&P 500 Composite
Dividend   Total Dividend   Total Dividend   Total Dividend   Total Dividend   Total
Yield Return (2) Yield Return (3) Yield Return (3) Yield Return (3) Yield Return (4)
 
1995 8.3 % 42.0 % 7.4 % 15.3 % 2.4 % 36.9 % 2.3 % 37.6 % 0.6 % 39.9 %
1996 7.9 % 15.4 % 6.1 % 35.3 % 2.2 % 28.9 % 2.0 % 23.0 % 0.2 % 22.7 %
1997 7.5 % 14.5 % 5.5 % 20.3 % 1.8 % 24.9 % 1.6 % 33.4 % 0.5 % 21.6 %
1998 8.2 % 5.5 % 7.5 % (17.5 %) 1.7 % 18.1 % 1.3 % 28.6 % 0.3 % 39.6 %
1999 10.5 % (8.7 %) 8.7 % (4.6 %) 1.3 % 27.2 % 1.1 % 21.0 % 0.2 % 85.6 %
2000 8.9 % 31.2 % 7.5 % 26.4 % 1.5 % (4.7 %) 1.2 % (9.1 %) 0.3 % (39.3 %)
2001 7.8 % 27.2 % 7.1 % 13.9 % 1.9 % (5.5 %) 1.4 % (11.9 %) 0.3 % (21.1 %)
2002 6.7 % 26.9 % 7.1 % 3.8 % 2.6 % (15.0 %) 1.9 % (22.1 %) 0.5 % (31.5 %)
2003 6.0 % 21.0 % 5.5 % 37.1 % 2.3 % 28.3 % 1.8 % 28.7 % 0.6 % 50.0 %
2004 5.2 % 32.7 % 4.7 % 31.6 % 2.2 % 5.6 % 1.8 % 10.9 % 0.6 % 8.6 %
2005 6.5 % (9.2 %) 4.6 % 12.2 % 2.6 % 1.7 % 1.9 % 4.9 % 0.9 % 1.4 %
2006 5.5 % 34.8 % 3.7 % 35.1 % 2.5 % 19.0 % 1.9 % 15.8 % 0.8 % 9.5 %
2007 6.1 % 3.2 % 4.9 % (15.7 %) 2.7 % 8.8 % 2.1 % 5.5 % 0.8 % 9.8 %
2008 7.3 % (8.2 %) 7.6 % (37.7 %) 3.6 % (31.8 %) 3.2 % (37.0 %) 1.3 % (40.5 %)
2009 6.6 % 19.3 % 3.7 % 28.0 % 2.6 % 22.6 % 2.0 % 26.5 % 1.0 % 43.9 %
2010 5.1 % 38.6 % 3.5 % 27.9 % 2.6 % 14.0 % 1.9 % 15.1 % 1.2 % 16.9 %
2011 5.0 % 7.3 % 3.8 % 8.3 % 2.8 % 8.3 % 2.3 % 2.1 % 1.3 % (1.8 %)
2012 4.5 % 20.1 % 3.5 % 19.7 % 3.0 % 10.2 % 2.5 % 16.0 % 2.6 % 15.9 %
 

Compounded

Average

Annual Total

Return (5)
17.4 % 11.0 % 9.3 % 8.3 % 7.8 %
 

Note: All of these Dividend Yields are calculated as annualized dividend based on last dividend paid in applicable time period divided by closing price as of period end. Dividend Yield sources: NAREIT website and Bloomberg.
(1)     FTSE NAREIT US Equity REIT Index, as per NAREIT website.
(2) Calculated as the difference between the closing stock price as of period end less the closing stock price as of previous period, plus dividends paid in period, divided by closing stock price as of end of previous period. Does not include reinvestment of dividends.
(3) Includes reinvestment of dividends. Sources: NAREIT website and Factset.
(4) Price only index, does not include dividends. Source: Factset.
(5) All of these Compounded Average Annual Total Return rates are calculated in the same manner: from Realty Income’s NYSE listing on October 18, 1994 through December 31, 2012, and assuming reinvestment of dividends, except for NASDAQ. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future.
 
 

Property Type Diversification

The following table sets forth certain property type information regarding Realty Income’s property portfolio as of December 31, 2012 (dollars in thousands):
                             
Approximate Rental Revenue for Percentage of
Number of Leasable the Quarter Ended Rental
Property Type       Properties       Square Feet       December 31, 2012 (1)       Revenue
Retail 2,941 27,520,200 $ 111,218 84.9 %
Distribution 23 5,181,200 6,131 4.7
Agriculture 15 184,500 5,138 3.9
Manufacturing 10 3,117,100 3,775 2.9
Office 9 824,000 3,110 2.4
Industrial       15       850,500         1,570       1.2  
Totals       3,013       37,677,500       $ 130,942       100.0 %
 
      (1)     Includes rental revenue for all properties owned by Realty Income at December 31, 2012, including revenue from properties reclassified as discontinued operations of $1,347. Excludes revenue of $24 from properties owned by Crest.
 
 

Industry Diversification

The following table sets forth certain information regarding Realty Income’s property portfolio classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:
                     
      Percentage of Rental Revenue (1)
For the Quarter     For the Years Ended
        Ended

December 31,

2012
     

Dec 31,

2012
     

Dec 31,

2011
     

Dec 31,

2010
     

Dec 31,

2009
     

Dec 31,

2008
     

Dec 31,

2007

Retail Industries
                   
Apparel stores 2.4 % 1.7 % 1.4 % 1.2 % 1.1 % 1.1 % 1.2 %
Automotive collision services 1.1 1.1 0.9 1.0 1.1 1.0 1.1
Automotive parts 1.1 1.0 1.2 1.4 1.5 1.6 2.1
Automotive service 2.9 3.1 3.7 4.7 4.8 4.8 5.2
Automotive tire services 4.3 4.7 5.6 6.4 6.9 6.7 7.3
Book stores 0.1 0.1 0.1 0.1 0.2 0.2 0.2
Business services * * * * * * 0.1
Child care 4.1 4.5 5.2 6.5 7.3 7.6 8.4
Consumer electronics 0.5 0.5 0.5 0.6 0.7 0.8 0.9
Convenience stores 14.9 16.3 18.5 17.1 16.9 15.8 14.0
Crafts and novelties 0.7 0.3 0.2 0.3 0.3 0.3 0.3
Dollar stores 4.3 2.2 -- -- -- -- --
Drug stores 3.3 3.5 3.8 4.1 4.3 4.1 2.7
Education 0.6 0.7 0.7 0.8 0.9 0.8 0.8
Entertainment 0.9 0.9 1.0 1.2 1.3 1.2 1.4
Equipment services 0.1 0.1 0.2 0.2 0.2 0.2 0.2
Financial services 0.2 0.2 0.2 0.2 0.2 0.2 0.2
General merchandise 0.5 0.6 0.6 0.8 0.8 0.8 0.7
Grocery stores 3.3 3.7 1.6 0.9 0.7 0.7 0.7
Health and fitness 6.7 6.8 6.4 6.9 5.9 5.6 5.1
Home furnishings 1.0 1.0 1.1 1.3 1.3 2.4 2.6
Home improvement 1.3 1.5 1.7 2.0 2.2 2.1 2.4
Motor vehicle dealerships 2.0 2.1 2.2 2.6 2.7 3.2 3.1
Office supplies 0.7 0.8 0.9 0.9 1.0 1.0 1.1
Pet supplies and services 0.5 0.6 0.7 0.9 0.9 0.8 0.9
Restaurants - casual dining 6.7 7.3 10.9 13.4 13.7 14.3 14.9
Restaurants - quick service 5.7 5.9 6.6 7.7 8.3 8.2 6.6
Shoe stores 0.1 0.1 0.2 0.1 -- -- --
Sporting goods 2.3 2.5 2.7 2.7 2.6 2.3 2.6
Theaters 8.7 9.4 8.8 8.9 9.2 9.0 9.0
Transportation services 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Video rental 0.0 0.0 0.0 0.2 1.0 1.1 1.7
Wholesale clubs 4.4 3.2 0.7 -- -- -- --
Other       0.1       0.1       0.1       0.1       0.1       0.1       0.1  
Retail Industries       85.6 %     86.7 %     88.6 %     95.4 %     98.3 %     98.2 %     97.8 %
 
 

Non-retail Industries
Aerospace 1.0 0.9 0.5 -- -- -- --
Beverages 4.7 5.1 5.6 3.0 -- -- --
Consumer appliances 0.3 0.1 -- -- -- -- --
Consumer goods 0.3 0.1 -- -- -- -- --
Diversified industrial 0.2 0.1 -- -- -- -- --
Equipment services 0.5 0.3 0.2 -- -- -- --
Financial services 0.4 0.4 0.3 -- -- -- --
Food processing 1.6 1.3 0.7 -- -- -- --
Insurance 0.1 * -- -- -- -- --
Machinery 0.3 0.1 -- -- -- -- --
Packaging 1.0 0.7 0.4 -- -- -- --
Paper 0.1 0.1 0.1 -- -- -- --
Telecommunications 0.8 0.8 0.7 -- -- -- --
Transportation services 2.1 2.2 1.6 -- -- -- --
Other       1.0       1.1       1.3       1.6       1.7       1.8       2.2  
Non-retail Industries       14.4 %     13.3 %     11.4 %     4.6 %     1.7 %     1.8 %     2.2 %
Totals       100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
 
*     Less than 0.1%
 
(1) Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified as discontinued operations. Excludes revenue from properties owned by Crest.
 
 
     

Tenant Diversification
 
The largest tenants based on percentage of total portfolio rental revenue at December 31, 2012 include the following:
L.A. Fitness     5.1 %     NPC International/Pizza Hut     2.3 %
AMC Theatres 4.6 % Rite Aid 2.2 %
Family Dollar 4.4 % Friendly’s Ice Cream 2.1 %
Diageo 4.4 % Smart & Final 2.1 %
BJ’s Wholesale Clubs 4.3 % Fed-Ex 2.0 %
Northern Tier Energy/Super America 3.8 % FreedomRoads/Camping World 2.0 %
Regal Cinemas 3.2 % National Tire & Battery 1.9 %
The Pantry 2.7 %
 
 

Lease Expirations

The following table sets forth certain information regarding Realty Income's property portfolio regarding the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on our 2,913 net leased, single-tenant properties as of December 31, 2012 (dollars in thousands):
           
Total Portfolio    

Initial Expirations (3)
    Subsequent Expirations (4)

Year
   

Number

of Leases

Expiring (1)
   

Approx.

Leasable

Sq. Feet
   

Rental

Revenue

for the

Quarter

Ended

Dec. 31,

2012 (2)
   

% of

Total

Rental

Revenue
   

Number

of Leases

Expiring
   

Rental

Revenue

for the

Quarter

Ended

Dec. 31,

2012
   

% of

Total

Rental

Revenue
   

Number

of Leases

Expiring
   

Rental

Revenue

for the

Quarter

Ended

Dec. 31,

2012
   

% of

Total

Rental

Revenue
2013 157     1,209,200     $ 3,879     3.0 % 39     $ 1,319     1.0 % 118     $ 2,560     2.0 %
2014 155 1,019,400 3,717 2.9 52 1,652 1.3 103 2,065 1.6
2015 161 859,500 3,690 2.9 67 1,774 1.4 94 1,916 1.5
2016 176 1,144,300 3,840 3.0 115 2,380 1.9 61 1,460 1.1
2017 165 1,940,200 5,633 4.4 44 2,902 2.3 121 2,731 2.1
2018 144 2,116,600 6,411 5.0 90 4,691 3.7 54 1,720 1.3
2019 143 1,511,800 7,298 5.7 132 6,815 5.3 11 483 0.4
2020 86 1,986,500 5,455 4.2 76 5,109 4.0 10 346 0.2
2021 163 2,353,000 8,426 6.5 155 7,916 6.1 8 510 0.4
2022 127 3,713,600 7,396 5.7 119 7,153 5.5 8 243 0.2
2023 257 2,294,400 10,634 8.3 250 10,106 7.9 7 528 0.4
2024 62 686,900 2,764 2.1 62 2,764 2.1 -- -- 0.0
2025 253 2,707,700 13,478 10.5 248 13,363 10.4 5 115 0.1
2026 153 2,311,400 8,335 6.5 150 8,253 6.4 3 82 0.1
2027-2043     711     10,152,200       37,694     29.3       702       37,509     29.2       9       185     0.1  
Totals     2,913     36,006,700     $ 128,650     100.0 %     2,301     $ 113,706     88.5 %     612     $ 14,944     11.5 %
 
(1)     Excludes 16 multi-tenant properties and 84 vacant unleased properties, one of which is a multi-tenant property. The lease expirations for properties under construction are based on the estimated date of completion of those properties.
(2) Includes rental revenue of $1,347 from properties reclassified as discontinued operations and excludes revenue of $2,292 from 16 multi-tenant properties and from 84 vacant and unleased properties at December 31, 2012. Excludes revenue of $24 from four properties owned by Crest.
(3) Represents leases to the initial tenant of the property that are expiring for the first time.
(4) Represents lease expirations on properties in the portfolio, which have previously been renewed, extended or re-tenanted.
 
 

Geographic Diversification

The following table sets forth certain state-by-state information regarding Realty Income's property portfolio as of December 31, 2012 (dollars in thousands):
                   
State    

Number of

Properties
    Percent

Leased
    Approximate

Leasable

Square Feet
    Rental Revenue for

the Quarter Ended

December 31, 2012 (1)
    Percentage of

Rental

Revenue
Alabama 71 96 % 500,500 $ 1,831 1.4 %
Alaska 2 100 128,500 307 0.2
Arizona 96 98 710,300 3,496 2.7
Arkansas 21 95 135,000 340 0.3
California 142 100 3,821,700 18,204 13.9
Colorado 57 96 497,700 1,985 1.5
Connecticut 25 92 456,500 2,037 1.6
Delaware 16 100 29,500 391 0.3
Florida 211 98 2,229,600 8,364 6.4
Georgia 152 94 1,342,400 5,040 3.8
Hawaii -- -- -- -- --
Idaho 12 92 80,700 329 0.3
Illinois 111 99 1,428,900 6,264 4.8
Indiana 87 98 858,400 3,858 2.9
Iowa 28 89 1,878,400 2,331 1.8
Kansas 67 96 920,600 1,905 1.5
Kentucky 26 96 202,200 733 0.6
Louisiana 44 100 428,500 1,449 1.1
Maine 3 100 22,500 139 0.1
Maryland 30 100 492,500 2,661 2.0
Massachusetts 63 92 572,700 2,279 1.7
Michigan 69 100 421,900 1,579 1.2
Minnesota 151 100 1,019,000 6,807 5.2
Mississippi 77 95 775,300 1,982 1.5
Missouri 78 99 1,057,800 3,861 2.9
Montana 2 100 30,000 77 0.1
Nebraska 22 100 220,400 604 0.5
Nevada 16 100 333,700 1,054 0.8
New Hampshire 17 94 234,000 961 0.7
New Jersey 33 94 267,300 1,941 1.5
New Mexico 19 100 154,700 421 0.3
New York 46 98 918,900 4,614 3.5
North Carolina 99 96 895,400 3,127 2.4
North Dakota 6 100 36,600 78 0.1
Ohio 151 97 2,192,200 5,231 4.0
Oklahoma 57 98 961,500 1,742 1.3
Oregon 20 100 384,200 1,325 1.0
Pennsylvania 105 98 1,092,500 4,740 3.6
Rhode Island 3 100 11,000 37 *
South Carolina 102 97 564,500 2,571 2.0
South Dakota 10 100 89,800 186 0.1
Tennessee 136 96 1,351,500 3,240 2.5
Texas 328 97 4,271,900 12,205 9.3
Utah 9 100 159,300 413 0.3
Vermont 4 100 12,700 133 0.1
Virginia 115 97 2,429,400 5,351 4.1
Washington 34 97 293,000 1,147 0.9
West Virginia 4 100 87,400 134 0.1
Wisconsin 33 94 653,400 1,375 1.1
Wyoming     3     100       21,100       63     *  
Totals/Average     3,013     97 %     37,677,500     $ 130,942     100.0 %
 
*     Less than 0.1%
 
(1) Includes rental revenue for all properties owned by Realty Income at December 31, 2012, including revenue from properties reclassified as discontinued operations of $1,347. Excludes revenue of $24 from properties owned by Crest.
 
 

SUPPLEMENTAL INFORMATION

On January 22, 2013, Realty Income acquired American Realty Capital Trust (ARCT). The information that follows provides pro forma operating metrics after integrating the ARCT real estate into the company’s core portfolio.

Pro Forma Property Type Diversification

The following table sets forth certain property type information regarding Realty Income’s property portfolio after the acquisition of ARCT (dollars in thousands):
                             
Annualized Percentage of
Approximate Rental Annualized
Number of Leasable Revenue Rental
Property Type       Properties       Square Feet       at 12/31/12       Revenue
Retail 3,387 32,853,300 $ 549,943 77.2 %
Distribution 61 14,189,100 79,258 11.1
Office 40 2,221,700 39,752 5.6
Agriculture 15 184,500 20,551 2.9
Manufacturing 10 3,117,100 16,588 2.3
Industrial       15       850,500         6,320       0.9  
Totals       3,528       53,416,200       $ 712,412       100.0 %
 
 
     

Pro Forma Tenant Diversification
 
Largest Tenants based on Percentage of Total Portfolio Rental Revenue after the Acquisition of ARCT
FedEx     5.5 %     Regal Cinemas     2.4 %
L.A. Fitness 3.9 % Dollar General 2.0 %
Family Dollar 3.5 % The Pantry 2.0 %
AMC Theatres 3.5 % Rite Aid 1.9 %
Diageo 3.3 % NPC International/Pizza Hut 1.8 %
BJ’s Wholesale Club 3.3 % Friendly’s Ice Cream 1.6 %
Walgreens 2.9 % CVS 1.6 %
Northern Tier Energy/Super America 2.9 %
 
 

Industry Diversification

The following table sets forth certain information regarding Realty Income's property portfolio after the acquisition of ARCT classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:
       
Historical Percentage of Rental Revenue (1)
For the Years Ended
     

Pro Forma

Percentage of

Annualized

Rental

Revenue

at 12/31/2012
   

Dec 31,

2011
   

Dec 31,

2010
   

Dec 31,

2009
   

Dec 31,

2008
   

Dec 31,

2007
   

Dec 31,

2006

Retail Industries
                   
Apparel stores 1.6 % 1.4 % 1.2 % 1.1 % 1.1 % 1.2 % 1.7 %
Automotive collision services 0.8 0.9 1.0 1.1 1.0 1.1 1.3
Automotive parts 1.1 1.2 1.4 1.5 1.6 2.1 2.8
Automotive service 3.0 3.7 4.7 4.8 4.8 5.2 6.9
Automotive tire services 3.2 5.6 6.4 6.9 6.7 7.3 6.1
Book stores * 0.1 0.1 0.2 0.2 0.2 0.2
Business services * * * * * 0.1 0.1
Child care 3.0 5.2 6.5 7.3 7.6 8.4 10.3
Consumer electronics 0.3 0.5 0.6 0.7 0.8 0.9 1.1
Convenience stores 11.6 18.5 17.1 16.9 15.8 14.0 16.1
Crafts and novelties 0.6 0.2 0.3 0.3 0.3 0.3 0.4
Dollar stores 5.6 -- -- -- -- -- --
Drug stores 6.6 3.8 4.1 4.3 4.1 2.7 2.9
Education 0.5 0.7 0.8 0.9 0.8 0.8 0.8
Entertainment 0.6 1.0 1.2 1.3 1.2 1.4 1.6
Equipment services 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Financial services 1.9 0.2 0.2 0.2 0.2 0.2 0.1
General merchandise 1.2 0.6 0.8 0.8 0.8 0.7 0.6
Grocery stores 3.2 1.6 0.9 0.7 0.7 0.7 0.7
Health and fitness 5.2 6.4 6.9 5.9 5.6 5.1 4.3
Home furnishings 1.0 1.1 1.3 1.3 2.4 2.6 3.1
Home improvement 1.6 1.7 2.0 2.2 2.1 2.4 3.4
Jewelry 0.1 -- -- -- -- -- --
Motor vehicle dealerships 1.7 2.2 2.6 2.7 3.2 3.1 3.4
Office supplies 0.5 0.9 0.9 1.0 1.0 1.1 1.3
Pet supplies and services 0.9 0.7 0.9 0.9 0.8 0.9 1.1
Restaurants - casual dining 5.6 10.9 13.4 13.7 14.3 14.9 7.0
Restaurants - quick service 4.6 6.6 7.7 8.3 8.2 6.6 4.9
Shoe stores 0.9 0.2 0.1 -- -- -- --
Sporting goods 1.7 2.7 2.7 2.6 2.3 2.6 2.9
Theaters 6.4 8.8 8.9 9.2 9.0 9.0 9.6
Transportation services 0.1 0.2 0.2 0.2 0.2 0.2 0.3
Video rental 0.0 0.0 0.2 1.0 1.1 1.7 2.1
Wholesale clubs 3.4 0.7 -- -- -- -- --
Other     0.1       0.1       0.1       0.1       0.1       0.1       0.2  
Retail Industries     78.7 %     88.6 %     95.4 %     98.3 %     98.2 %     97.8 %     97.5 %
 
 

Other Industries
Aerospace 0.9 0.5 -- -- -- -- --
Beverages 3.5 5.6 3.0 -- -- -- --
Consumer appliances 0.7 -- -- -- -- -- --
Consumer goods 1.1 -- -- -- -- -- --
Diversified industrial 0.1 -- -- -- -- -- --
Equipment services 0.3 0.2 -- -- -- -- --
Financial services 0.3 0.3 -- -- -- -- --
Food processing 1.5 0.7 -- -- -- -- --
Government services 1.5 -- -- -- -- -- --
Health care 2.0 -- -- -- -- -- --
Home furnishings 0.2 -- -- -- -- -- --
Insurance 0.1 -- -- -- -- -- --
Machinery 0.2 -- -- -- -- -- --
Other manufacturing 0.5 -- -- -- -- -- --
Packaging 1.0 0.4 -- -- -- -- --
Paper 0.2 0.1 -- -- -- -- --
Telecommunications 0.7 0.7 -- -- -- -- --
Transportation services 5.7 1.6 -- -- -- -- --
Other     0.8       1.3       1.6       1.7       1.8       2.2       2.5  
Other Industries     21.3 %     11.4 %     4.6 %     1.7 %     1.8 %     2.2 %     2.5 %
Totals     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
 
*     Less than 0.1%
 
(1) Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified as discontinued operations. Excludes revenue from properties owned by Crest.
 
 

Pro Forma Geographic Diversification

The following table sets forth certain state-by-state information regarding Realty Income's property portfolio after the acquisition of ARCT (dollars in thousands):
                   
State     Number of

Properties
    Percent

Leased
    Approximate

Leasable

Square Feet
    Annualized

Rental

Revenue

at 12/31/2012
   

Percentage of

Annualized

Rental

Revenue
Alabama 87 97 % 658,800 $ 10,097 1.4 %
Alaska 2 100 128,500 1,226 0.2
Arizona 101 98 1,079,000 19,713 2.8
Arkansas 27 96 532,500 4,160 0.6
California 152 100 4,497,800 80,373 11.3
Colorado 65 97 618,700 9,584 1.3
Connecticut 26 92 475,600 8,349 1.2
Delaware 16 100 29,500 1,562 0.2
Florida 234 98 2,443,700 41,373 5.8
Georgia 176 95 2,326,800 28,532 4.0
Hawaii -- -- -- -- --
Idaho 14 93 97,500 1,812 0.3
Illinois 132 99 3,386,400 36,395 5.1
Indiana 91 98 909,300 16,820 2.4
Iowa 35 91 2,679,900 11,879 1.7
Kansas 76 96 1,557,300 11,940 1.7
Kentucky 36 97 514,000 8,857 1.2
Louisiana 65 100 619,800 9,171 1.3
Maine 5 100 67,700 1,550 0.2
Maryland 32 100 658,000 14,460 2.0
Massachusetts 82 94 699,900 11,768 1.7
Michigan 96 100 871,900 11,308 1.6
Minnesota 156 100 1,141,900 28,940 4.1
Mississippi 83 95 834,900 9,255 1.3
Missouri 108 99 1,744,300 24,573 3.4
Montana 2 100 30,000 282 *
Nebraska 26 100 377,700 4,772 0.7
Nevada 18 100 366,000 4,804 0.7
New Hampshire 18 94 280,000 4,588 0.6
New Jersey 66 97 449,000 10,374 1.5
New Mexico 21 100 166,800 2,048 0.3
New York 80 99 1,967,000 39,214 5.5
North Carolina 113 96 1,014,600 16,055 2.3
North Dakota 7 100 66,000 480 0.1
Ohio 177 97 4,163,000 34,867 4.9
Oklahoma 64 98 1,031,500 8,780 1.2
Oregon 23 100 394,900 5,344 0.7
Pennsylvania 147 99 1,702,700 27,326 3.8
Rhode Island 3 100 11,000 147 *
South Carolina 118 97 735,800 15,219 2.1
South Dakota 11 100 133,500 1,032 0.1
Tennessee 144 97 1,564,700 16,386 2.3
Texas 368 98 5,281,300 68,678 9.6
Utah 11 100 737,600 4,618 0.7
Vermont 5 100 78,000 1,675 0.2
Virginia 121 97 2,480,900 25,303 3.6
Washington 36 97 372,000 5,040 0.7
West Virginia 10 100 242,900 3,363 0.5
Wisconsin 35 94 1,145,600 7,204 1.0
Wyoming 3 100 21,100 257 *
 
Puerto Rico     4     100       28,900       859     0.1  
Totals/Average     3,528     98 %     53,416,200     $ 712,412     100.0 %
 
*     Less than 0.1%

Copyright Business Wire 2010

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