Realty Income Announces Third Quarter and Nine Month Operating Results

http://www.businesswire.com/news/home/20091028006380/en

ESCONDIDO, Calif.--(Business Wire)--
Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE:
O) today announced operating results for the third quarter ended September 30,
2009. 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 September 30, 2009, as compared to the same quarterly
period in 2008)

* Revenue was $82.0 million as compared to $82.2 million
* Funds from Operations (FFO) available to common stockholders increased 5.5% to
$48.2 million
* FFO per share increased 2.2% to $0.47
* FFO per share before Crest`s contribution increased 2.2% to $0.46
* Net income available to common stockholders per share was $0.26
* Portfolio occupancy increased to 96.8%
* Same store rents increased 0.4% to $75.1 million
* Dividends paid per common share increased 2.4%
* The monthly dividend increased for the 48th consecutive quarter to an
annualized amount of $1.71225 per share
* Invested $10.7 million in three new properties

Financial Results

Revenue

Realty Income`s revenue, for the quarter ended September 30, 2009, was $82.0
million as compared to $82.2 million for the same quarter in 2008. Revenue, for
the nine months ended September 30, 2009, was $246.2 million as compared to
$246.5 million for the same period in 2008. Overall, comparing 2009 to 2008,
revenue has generally been flat as the company now owns 2,334 properties
compared to 2,355 properties at the end of the third quarter of 2008.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended September 30,
2009, was $27.1 million as compared to $28.6 million for the same quarter in
2008. Net income per share for the quarter was $0.26 as compared to $0.29 for
the same quarter in 2008.

Net income available to common stockholders, for the nine months ended September
30, 2009, was $77.6 million as compared to $79.3 million for the same period in
2008. Net income per share, for the nine months ended September 30, 2009, was
$0.75 as compared to $0.79 for the same period in 2008.

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

During the third quarter of 2009, income from continuing operations available to
common stockholders was $0.24 per share as compared to $0.22 per share for the
same quarter in 2008.

During the first nine months of 2009, income from continuing operations
available to common stockholders was $0.70 per share as compared to $0.68 per
share for the same period in 2008.

FFO Available to Common Stockholders

FFO, for the quarter ended September 30, 2009, increased 5.5% to $48.2 million
as compared to $45.7 million for the same quarter in 2008. FFO per share, for
the quarter ended September 30, 2009, increased 2.2% to $0.47 as compared to
$0.46 for the same quarter in 2008. FFO per share before Crest`s contribution,
for the quarter ended September 30, 2009, increased 2.2% to $0.46 from $0.45 as
compared to the same quarter in 2008. Crest Net Lease, Inc. (Crest) is a
wholly-owned subsidiary of Realty Income.

FFO, for the nine months ended September 30, 2009, increased 2.6% to $142.1
million as compared to $138.5 million for the same period in 2008. FFO per
share, for the nine months ended September 30, 2009, decreased 0.7% to $1.37 as
compared to $1.38 for the same period in 2008. FFO before Crest`s contribution,
for the nine months ended September 30, 2009, was unchanged at $1.37 per share
as compared to the same period in 2008. For a calculation of FFO before Crest`s
contribution, see pages 7 and 8.

The Company considers FFO to be an appropriate supplemental measure of a Real
Estate Investment Trust`s (REIT`s) operating performance as it is based on a net
income analysis of property portfolio performance that excludes non-cash items
such as depreciation. FFO is an alternative, non-GAAP measure that is also
considered to be a good indicator of a company`s ability to generate income to
pay dividends. 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, reduced by gains on sales of investment properties and
extraordinary items. See reconciliation of net income available to common
stockholders to FFO on pages 7 and 8.

Dividend Information

In September 2009, Realty Income announced the 48th consecutive quarterly
increase and the 55th 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 September 30, 2009, was $1.71225 per share. The amount of the monthly
dividends paid, for the nine months ended September 30, 2009, increased 3.2% to
$1.279 per share from $1.239 per share for the same period in 2008. Through
September 30, 2009, the Company has paid 470 consecutive monthly dividends and
continues its 40-year history of declaring and paying dividends every month.

Real Estate Portfolio Update

As of September 30, 2009, Realty Income`s portfolio of freestanding,
single-tenant, retail properties consisted of 2,334 properties located in 49
states, leased to 118 retail chains doing business in 30 retail industries. The
properties are leased under long-term, net leases with a weighted average
remaining lease term of approximately 11.3 years.

Portfolio Management Activities

The Company`s portfolio of retail real estate, owned primarily under 15- to
20-year net leases, continues to perform well and provide dependable lease
revenue supporting the payment of monthly dividends. As of September 30, 2009,
portfolio occupancy was 96.8% with 75 properties available for lease out of a
total of 2,334 properties in the portfolio.

Rent Increases

During the three months ended September 30, 2009, same store rents on 2,080
properties under lease increased 0.4% to $75.1 million, as compared to $74.8
million for the same quarter in 2008. Excluding 104 properties leased to
Buffets, Inc. (for which rents were renegotiated in September 2008), for the
quarter ended September 30, 2009, same store rents on 1,976 properties under
lease increased 1.2% to $70.2 million, as compared to $69.34 million for the
same quarter in 2008.

During the nine months ended September 30, 2009, same store rents on 2,080
properties under lease increased 0.4% to $225.5 million, as compared to $224.7
million for the same period in 2008. Excluding 104 properties leased to Buffets,
Inc. (for which rents were renegotiated in September 2008), for the nine months
ended September 30, 2009, same store rents on 1,976 properties under lease
increased 1.3% to $210.7 million, as compared to $208.0 million for the same
period in 2008.

Property Acquisitions

During the third quarter of 2009, Realty Income invested $10.7 million in three
new properties and previously acquired properties. The new properties are
located in two states and are 100% leased with an initial average lease yield of
10.2%.

During the nine months ended September 30, 2009, Realty Income invested $11.9
million in three new properties and previously acquired properties with an
initial average lease yield of 10.1%. Crest did not acquire any properties
during the first nine months of 2009.

Realty Income maintains a $355 million unsecured acquisition credit facility,
which is used to fund property acquisitions in the near term. There is currently
no outstanding balance on the Company`s acquisition credit facility, and the
full $355 million is available to fund new property acquisitions. In addition,
the Company had cash and cash equivalents of $20 million at September 30, 2009.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in
2009. 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, or decrease tenant or industry concentration.

During the quarter ended September 30, 2009, Realty Income sold seven properties
for $4.6 million, which resulted in a gain on sales of $1.8 million. During the
nine months ended September 30, 2009, Realty Income sold 17 properties for $11.0
million, which resulted in a gain on sales of $4.2 million.

Other Activities

Crest Net Lease

Crest is focused on acquiring and subsequently marketing net-leased properties
for sale. Crest did not acquire or sell any properties during the third quarter.
At September 30, 2009, Crest`s property inventory consisted of five properties
valued at $5.7 million.

Crest`s contribution to Realty Income`s FFO (and net income) depends on the
timing and number of property sales, if any, in a given quarter. Therefore,
Crest`s contribution can fluctuate and add volatility to Realty Income`s
reported FFO and net income on a comparable quarterly and annualized
basis.During the third quarter of 2009 and 2008, Crest contributed $0.00 per
share to Realty Income`s FFO per share. During the nine months ended September
30, 2009, Crest contributed $0.00 per share to Realty Income`s FFO per share, as
compared to $0.01 per share during the same period in 2008.

CEO Comments on Operating Results

Commenting on Realty Income`s financial results and real estate operations,
Chief Executive Officer, Tom A. Lewis said, "We continue to be pleased with our
results given the challenges in the overall economy and have remained focused on
maintaining our liquidity and managing our portfolio to maximize occupancy and
cash flow. Core FFO per share (before Crest) was up 2.2% for the quarter, as
compared to the same period one year ago, which is a positive considering that
we have sold 24 properties in the past year, while acquiring only three
properties."

"At September 30, occupancy increased to 96.8%, as compared to 96.6%, at the end
of the second quarter, and same store rents increased 0.4% for both the quarter
and nine months ended September 30, 2009, compared to the same period one year
ago. Given the ongoing softness in the retail industry, we are pleased with the
increasing results in occupancy and same store rents."

"Our ongoing focus on liquidity and balance sheet health has provided us with
$20 million in cash on hand, at the end of the quarter, and the entire balance
of our $355 million credit facility available to take advantage of acquisition
opportunities as they arise. We also have no debt maturities until 2013, and we
carry no mortgages on any of our 2,334 properties. Nor do we have any properties
under development, no joint ventures and no off balance sheet assets or
liabilities of any kind."

"With respect to real estate acquisitions, during the third quarter, we invested
just over $10 million in three new properties with an initial lease yield of
10.2%. While we are starting to see more acquisition prospects within the 9% to
10% cap rate range, to date the level of transactions available in the
marketplace that would meet the Company`s due diligence requirements remains
modest. We continue to review and perform due diligence on a number of
properties and anticipate additional acquisitions for our core portfolio over
the next few quarters. Given our substantial liquidity position, as attractive
opportunities arise, we are prepared to invest."

"Our conservative operations during a challenging economic and retail
environment allowed us to increase the amount of the monthly dividend for the
55th time since our listing on the New York Stock Exchange in 1994, to an
annualized amount of $1.71225 per share. We have been fortunate to own a
portfolio of properties that have generally remained profitable to our
retailers, which is key to the profitability of our tenants` businesses. We
believe this has kept occupancy high and, when coupled with our conservative
balance sheet and strong liquidity, is providing us with a solid foundation
during the current economic downturn."

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, occupancy
rates, periodically accessing the capital markets, the level and timing of
property acquisitions and dispositions, lease rollovers, the general real estate
market, the economy, charges for property impairments, and the operations of
Crest.

2009 Estimates

Management estimates that FFO per share for 2009 should range from $1.83 to
$1.84, which represents annual FFO per share growth of approximately 0.0% to
0.5%, as compared to 2008 FFO per share of $1.83. FFO for 2009 is based on an
estimated net income per share range of $1.00 to $1.01, adjusted (in accordance
with NAREIT`s definition of FFO) for estimated real estate depreciation of $0.88
and potential gain on sales of investment properties of $0.05 per share.

Management further estimates that Crest could contribute between $0.00 and $0.01
per share to Realty Income`s FFO during 2009. Crest`s primary business is the
purchase and sale of properties for a profit. These sales may occur at various
times during the course of the year and could cause FFO, in certain quarters, to
fluctuate on a comparable quarterly and annualized basis.

2010 Estimates

Management estimates that FFO per share for 2010 should range from $1.86 to
$1.92, which represents annual FFO per share growth of approximately 1.1% to
4.9%, as compared to an estimated 2009 FFO per share range of $1.83 to $1.84.
FFO for 2010 is based on an estimated net income per share range of $0.99 to
$1.05, adjusted (in accordance with NAREIT`s definition of FFO) for estimated
real estate depreciation of $0.92 and potential gain on sales of investment
properties of $0.05 per share.

Management notes that, given the volatility in the markets, it is more
challenging than usual to estimate a number of factors that will impact the
Company`s future results. For example, new property acquisition levels could
vary depending on the number of opportunities, capitalization rates and the
availability of attractively priced permanent financing. As such, management
would add that the $1.86 FFO per share estimate assumes no new property
acquisitions for 2010. The $1.92 FFO per share estimate assumes property
acquisitions of approximately $250 million in 2010.

Management further estimates that Crest could contribute between $0.00 and $0.01
per share to Realty Income`s FFO during 2010. Crest`s primary business is the
purchase and sale of properties for a profit. These sales may occur at various
times during the course of the year and could cause FFO, in certain quarters, to
fluctuate on a comparable quarterly and annualized basis.

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 September 30, 2009, the Company had paid 470 consecutive monthly
dividends throughout its 40-year operating history. The monthly income is
supported by the cash flows from 2,334 retail properties owned under long-term
lease agreements with leading regional and national retail chains. The Company
is a buyer of net-leased retail properties nationwide.

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, 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, the outcome of any legal proceedings to which
the Company is a party, and the profitability of Crest, the Company`s
subsidiary, as described in the Company`s filings with the Securities and
Exchange Commission. Consequently, such 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 at no charge by
calling our toll-free investor hotline number: 888-811-2001, or via the internet
at http://www.realtyincome.com/Investing/News.html.

CONSOLIDATED STATEMENTS OF INCOME

For the three and nine months ended September 30, 2009 and 2008

(dollars in thousands, except per share amounts)

Three Months Three Months Nine Months Nine Months

Ended 9/30/09
Ended 9/30/08
Ended 9/30/09
Ended 9/30/08
REVENUE
Rental $ 81,534 $ 81,951 $ 244,918 $ 244,692
Other 427 272 1,266 1,800
Total revenue 81,961 82,223 246,184 246,492

EXPENSES
Depreciation and amortization 22,930 22,754 68,716 67,459
Interest 21,374 23,915 64,151 71,230
General and administrative 4,906 5,097 15,862 16,564
Property 1,628 1,730 5,712 4,036
Income taxes 74 308 684 922

Total expenses 50,912 53,804 155,125 160,211

Income from continuing operations 31,049 28,419 91,059 86,281
Income from discontinued operations:
Real estate acquired for resale by Crest 207 238 308 567
Real estate held for investment 1,896 6,040 4,429 10,662
Total income from discontinued operations 2,103 6,278 4,737 11,229

Net income 33,152 34,697 95,796 97,510
Preferred stock cash dividends (6,063 ) (6,063 ) (18,190 ) (18,190 )

Net income available to common stockholders $ 27,089 $ 28,634 $ 77,606 $ 79,320

Funds from operations available to common stockholders (FFO) $ 48,154 $ 45,748 $ 142,069 $ 138,497

Per share information for common stockholders:
Income from continuing operations:
Basic and diluted $ 0.24 $ 0.22 $ 0.70 $ 0.68
Net income:
Basic and diluted $ 0.26 $ 0.29 $ 0.75 $ 0.79
FFO, basic and diluted(1)
FFO before Crest contribution $ 0.46 $ 0.45 $ 1.37 $ 1.37
Crest Net Lease $ 0.00 $ 0.00 $ 0.00 $ 0.01
Total FFO $ 0.47 $ 0.46 $ 1.37 $ 1.38
Cash dividends paid $ 0.427 $ 0.417 $ 1.279 $ 1.239

(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.

FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

Three Months Three Months Nine Months Nine Months

Ended 9/30/09
Ended 9/30/08
Ended 9/30/09
Ended 9/30/08

Net income available to common stockholders $ 27,089 $ 28,634 $ 77,606 $ 79,320
Depreciation and amortization:
Continuing operations 22,930 22,754 68,716 67,459
Discontinued operations 29 171 236 1,395
Depreciation of furniture, fixtures & equipment (80 ) (81 ) (239 ) (238 )
Gain on sales of investment properties:
Continuing operations (15 ) -- (15 ) (236 )
Discontinued operations (1,799 ) (5,730 ) (4,235 ) (9,203 )

Funds from operations available to common stockholders $ 48,154 $ 45,748 $ 142,069 $ 138,497

FFO per common share, basic and diluted $ 0.47 $ 0.46 $ 1.37 $ 1.38

Dividends paid to common stockholders $ 44,541 $ 42,209 $ 133,367 $ 125,519

FFO in excess of dividends paid to common stockholders $ 3,613 $ 3,539 $ 8,702 $ 12,978

Weighted average number of common shares used for computation per share:
Basic 103,470,512 100,362,872 103,528,952 100,400,212
Diluted 103,481,892 100,420,070 103,532,894 100,462,396

CONTRIBUTIONS BY CREST TO FUNDS FROM OPERATIONS
(dollars in thousands, except per share amounts)

Crest acquires properties with the intention of reselling them rather than holding them as investments and operating the properties. Consequently, we typically classify properties acquired by Crest as held for sale at the date of acquisition and do not depreciate them. The operations of Crest`s properties are classified as "income from discontinued operations, real estate acquired for resale".

Three Months Three Months Nine Months Nine Months

Ended 9/30/09
Ended 9/30/08
Ended 9/30/09
Ended 9/30/08
Gain on sales of real estate acquired for resale $ -- $ 199 $ -- $ 4,642
Rental revenue 66 129 198 1,764
Other revenue 351 353 1,053 561
Interest expense (140 ) (359 ) (462 ) (1,424 )
General and administrative expense (82 ) (110 ) (250 ) (397 )
Property expenses (29 ) (41 ) (97 ) (106 )
Provisions for impairment (29 ) (27 ) (340 ) (3,374 )
Income taxes 70 94 206 (328 )

Funds from operations contributed by Crest $ 207 $ 238 $ 308 $ 1,338

Crest FFO per common share, basic and diluted $ 0.00 $ 0.00 $ 0.00 $ 0.01
Total FFO $ 48,154 $ 45,748 $ 142,069 $ 138,497
Less FFO contributed by Crest (207 ) (238 ) (308 ) (1,338 )

FFO before Crest contribution $ 47,947 $ 45,510 $ 141,761 $ 137,159

FFO before Crest contribution per common share, basic and diluted $ 0.46 $ 0.45 $ 1.37 $ 1.37

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 reduced
by gains on sales of investment properties and extraordinary items.

HISTORICAL FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

For the three months ended September 30, 2009 2008 2007 2006 2005

Net income available to common stockholders $ 27,089 $ 28,634 $ 27,910 $ 24,207 $ 20,771
Depreciation and amortization 22,879 22,844 19,514 14,612 11,280
Gain on sales of investment properties (1,814 ) (5,730 ) (799 ) (843 ) (303 )

Total FFO $ 48,154 $ 45,748 $ 46,625 $ 37,976 $ 31,748

Total FFO per diluted share $ 0.47 $ 0.46 $ 0.47 $ 0.43 $ 0.40

Total FFO $ 48,154 $ 45,748 $ 46,625 $ 37,976 $ 31,748
Less FFO contributed by Crest (207 ) (238 ) (1,937 ) (99 ) (566 )

FFO before Crest contribution $ 47,947 $ 45,510 $ 44,688 $ 37,877 $ 31,182

FFO components, per diluted share(1):
FFO before Crest contribution $ 0.46 $ 0.45 $ 0.45 $ 0.42 $ 0.39
Crest FFO contribution $ 0.00 $ 0.00 $ 0.02 $ 0.00 $ 0.01

Total FFO $ 0.47 $ 0.46 $ 0.47 $ 0.43 $ 0.40

Cash dividends paid per share $ 0.427 $ 0.417 $ 0.391 $ 0.360 $ 0.338
Diluted shares outstanding 103,481,892 100,420,070 100,252,953 89,267,138 79,843,553

For the nine months ended September 30, 2009 2008 2007 2006 2005

Net income available to common stockholders $ 77,606 $ 79,320 $ 89,043 $ 71,033 $ 64,239
Depreciation and amortization 68,713 68,616 56,071 42,901 33,326
Gain on sales of investment properties (4,250 ) (9,439 ) (3,190 ) (3,036 ) (3,781 )

Total FFO $ 142,069 $ 138,497 $ 141,924 $ 110,898 $ 93,784

Total FFO per diluted share $ 1.37 $ 1.38 $ 1.41 $ 1.27 $ 1.18

Total FFO $ 142,069 $ 138,497 $ 141,924 $ 110,898 $ 93,784
Less FFO contributed by Crest (308 ) (1,338 ) (7,967 ) (1,515 ) (1,695 )

FFO before Crest contribution $ 141,761 $ 137,159 $ 133,957 $ 109,383 $ 92,089

FFO components, per diluted share(1):
FFO before Crest contribution $ 1.37 $ 1.37 $ 1.34 $ 1.26 $ 1.16
Crest FFO contribution $ 0.00 $ 0.01 $ 0.08 $ 0.02 $ 0.02

Total FFO $ 1.37 $ 1.38 $ 1.41 $ 1.27 $ 1.18

Cash dividends paid per share $ 1.279 $ 1.239 $ 1.152 $ 1.060 $ 0.999
Diluted shares outstanding 103,532,894 100,462,396 100,326,859 87,084,545 79,727,036

(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 September 30, 2009 and December 31, 2008

(dollars in thousands, except per share amounts)

2009 2008
ASSETS
Real estate, at cost:
Land $ 1,157,197 $ 1,157,885
Buildings and improvements 2,247,767 2,251,025
Total real estate, at cost 3,404,964 3,408,910
Less accumulated depreciation and amortization (612,622 ) (553,417 )

Net real estate held for investment 2,792,342 2,855,493
Real estate held for sale, net 8,160 6,660
Net real estate 2,800,502 2,862,153
Cash and cash equivalents 20,042 46,815
Accounts receivable, net 9,582 10,624
Goodwill 17,206 17,206
Other assets, net 54,043 57,381

Total assets $ 2,901,375 $ 2,994,179

LIABILITIES AND STOCKHOLDERS` EQUITY
Distributions payable $ 16,901 $ 16,793
Accounts payable and accrued expenses 20,708 38,027
Other liabilities 11,357 14,698
Line of credit payable -- --
Notes payable 1,350,000 1,370,000

Total liabilities 1,398,966 1,439,518

Stockholders` equity:
Preferred stock and paid in capital, par value $1.00 per share, 20,000,000 shares authorized, 13,900,000 issued and outstanding 337,790 337,790
Common stock and paid in capital, par value $1.00 per share, 200,000,000 shares authorized, 104,286,381 and 104,211,541 shares issued and outstanding as of September 30, 2009 and December 31, 2008, respectively 1,628,239 1,624,622
Distributions in excess of net income (463,620 ) (407,751 )

Total stockholders` equity 1,502,409 1,554,661

Total liabilities and stockholders` equity $ 2,901,375 $ 2,994,179

Realty Income Performance vs. Major Stock Indices

Equity NASDAQ
Realty Income REIT Index(1) DJIA 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 %)
YTD 3Q 2009 6.7 % 16.3 % 4.0 % 17.0 % 2.8 % 13.4 % 2.0 % 19.3 % 0.8 % 34.6 %

Compounded Average Annual Total Return(5) 16.7 % 9.1 % 8.6 % 7.6 % 7.1 %

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 closing stock price as of period end 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
September 30, 2009, 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.

Industry Diversification

The following table sets forth certain information regarding Realty Income`s
property portfolio (excluding properties owned by Crest) 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
Industries Ended Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
September 30, 2008 2007 2006 2005 2004 2003

2009
Apparel stores 1.1 % 1.1 % 1.2 % 1.7 % 1.6 % 1.8 % 2.1 %
Automotive collision services 1.1 1.0 1.1 1.3 1.3 1.0 0.3
Automotive parts 1.5 1.6 2.1 2.8 3.4 3.8 4.5
Automotive service 4.7 4.8 5.2 6.9 7.6 7.7 8.3
Automotive tire services 6.8 6.7 7.3 6.1 7.2 7.8 3.1
Book stores 0.2 0.2 0.2 0.2 0.3 0.3 0.4
Business services * * 0.1 0.1 0.1 0.1 0.1
Child care 7.6 7.6 8.4 10.3 12.7 14.4 17.8
Consumer electronics 0.7 0.8 0.9 1.1 1.3 2.1 3.0
Convenience stores 17.0 15.8 14.0 16.1 18.7 19.2 13.3
Crafts and novelties 0.3 0.3 0.3 0.4 0.4 0.5 0.6
Distribution and office 1.0 1.0 0.6 -- -- -- --
Drug stores 4.3 4.1 2.7 2.9 2.8 0.1 0.2
Entertainment 1.3 1.2 1.4 1.6 2.1 2.3 2.6
Equipment rental services 0.2 0.2 0.2 0.2 0.4 0.3 0.2
Financial services 0.2 0.2 0.2 0.1 0.1 0.1 --
General merchandise 0.8 0.8 0.7 0.6 0.5 0.4 0.5
Grocery stores 0.7 0.7 0.7 0.7 0.7 0.8 0.4
Health and fitness 6.0 5.6 5.1 4.3 3.7 4.0 3.8
Home furnishings 1.3 2.4 2.6 3.1 3.7 4.1 4.9
Home improvement 1.9 1.9 2.1 3.4 1.1 1.0 1.1
Motor vehicle dealerships 2.7 3.1 3.1 3.4 2.6 0.6 --
Office supplies 1.0 1.0 1.1 1.3 1.5 1.6 1.9
Pet supplies and services 0.9 0.8 0.9 1.1 1.3 1.4 1.7
Private education 0.8 0.8 0.8 0.8 0.8 1.1 1.2
Restaurants 21.2 21.8 21.2 11.9 9.4 9.7 11.8
Shoe stores -- -- -- -- 0.3 0.3 0.9
Sporting goods 2.5 2.3 2.6 2.9 3.4 3.4 3.8
Theaters 9.2 9.0 9.0 9.6 5.2 3.5 4.1
Travel plazas 0.2 0.2 0.2 0.3 0.3 0.4 0.3
Video rental 1.0 1.1 1.7 2.1 2.5 2.8 3.3
Other 1.8 1.9 2.3 2.7 3.0 3.4 3.8
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.

Tenant Diversification

Largest Tenants based on Percentage of Total Portfolio Rental Revenue at September 30, 2009
Hometown Buffet 6.0 % Boston Market 3.1 %
Kerasotes Showplace Theatres 5.4 % KinderCare Learning Centers 3.0 %
L.A. Fitness 4.6 % Couche-Tard/Circle K 3.0 %
The Pantry 4.4 % NPC International/Pizza Hut 2.6 %
Friendly`s Ice Cream 4.1 % FreedomRoads/Camping World 2.5 %
Rite Aid 3.5 % Regal Cinemas 2.2 %
La Petite Academy 3.3 % Sports Authority 2.0 %
TBC Corporation 3.2 %

Lease Expirations

The following table sets forth certain information regarding Realty Income`s property portfolio (excluding properties owned by Crest) regarding the timing of the lease term expirations (excluding extension options) on our 2,249 net leased, single-tenant retail properties as of September 30, 2009 (dollars in thousands):

Total Portfolio Initial Expirations(3) Subsequent Expirations(4)
Year Total Rental % of Number Rental Revenue % of Number Rental Revenue % of

Number of Leases Expiring(1) Revenue
Total Rental Revenue
of Leases Expiring for the Total Rental Revenue of Leases Expiring for the Total

for the
Quarter
Quarter Ended Rental Revenue

Quarter Ended
September 30, 2009
Ended September 30, 2009(2)
September 30, 2009
2009 92 $ 2,017 2.6 % 20 $ 468 0.6 % 72 $ 1,549 2.0 %
2010 97 2,053 2.6 47 1,123 1.4 50 930 1.2
2011 107 3,226 4.1 59 2,119 2.7 48 1,107 1.4
2012 126 2,838 3.6 78 1,936 2.5 48 902 1.1
2013 141 5,100 6.5 98 4,043 5.2 43 1,057 1.3
2014 87 2,951 3.7 50 2,226 2.8 37 725 0.9
2015 114 2,940 3.7 85 2,316 2.9 29 624 0.8
2016 114 2,052 2.6 112 2,007 2.5 2 45 0.1
2017 49 1,833 2.3 40 1,648 2.1 9 185 0.2
2018 42 1,824 2.3 34 1,624 2.1 8 200 0.2
2019 98 4,853 6.1 92 4,483 5.6 6 370 0.5
2020 79 3,180 4.0 74 3,091 3.9 5 89 0.1
2021 177 7,530 9.5 176 7,475 9.4 1 55 0.1
2022 100 2,938 3.7 99 2,889 3.6 1 49 0.1
2023 248 8,079 10.2 246 8,007 10.1 2 72 0.1
2024 60 1,572 2.0 60 1,572 2.0 -- -- --
2025-2043 518 24,141 30.5 507 23,920 30.2 11 221 0.3
Totals 2,249 $ 79,127 100.0 % 1,877 $ 70,947 89.6 % 372 $ 8,180 10.4 %

* Less than 0.1%

(1) Excludes ten multi-tenant properties and 75 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 $127 from properties reclassified to discontinued
operations and excludes revenue of $2,534 from ten multi-tenant properties and
from 75 vacant and unleased properties at September 30, 2009.

(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 (excluding properties owned by Crest) as of
September 30, 2009 (dollars in thousands):

State Number of Percent Approximate Rental Revenue for Percentage of
Properties Leased Leasable the Quarter Ended Revenue

Square Feet
September 30, 2009(1)
Alabama 63 97 % 425,300 $ 1,830 2.2 %
Alaska 2 100 128,500 277 0.3
Arizona 79 99 392,700 2,508 3.1
Arkansas 18 89 98,500 377 0.5
California 65 98 1,170,000 4,399 5.4
Colorado 52 98 478,900 1,856 2.3
Connecticut 24 96 276,600 1,183 1.4
Delaware 17 100 33,300 429 0.5
Florida 167 93 1,437,300 6,480 7.9
Georgia 131 98 914,300 3,920 4.8
Idaho 12 100 80,700 331 0.4
Illinois 74 97 877,800 4,207 5.1
Indiana 81 96 686,400 3,251 4.0
Iowa 22 95 296,100 1,011 1.2
Kansas 33 91 573,500 1,171 1.4
Kentucky 22 100 110,600 675 0.8
Louisiana 33 97 190,400 892 1.1
Maine 3 100 22,500 160 0.2
Maryland 28 100 266,600 1,601 2.0
Massachusetts 64 100 575,400 2,579 3.2
Michigan 52 100 257,300 1,276 1.6
Minnesota 21 95 392,100 1,548 1.9
Mississippi 71 96 347,600 1,466 1.8
Missouri 62 95 640,100 2,096 2.6
Montana 2 100 30,000 76 0.1
Nebraska 19 95 196,300 479 0.6
Nevada 15 93 191,000 775 0.9
New Hampshire 14 100 109,900 563 0.7
New Jersey 33 100 261,300 1,931 2.4
New Mexico 8 100 56,400 179 0.2
New York 40 93 502,300 2,339 2.9
North Carolina 96 97 548,300 2,837 3.5
North Dakota 6 100 36,600 57 0.1
Ohio 137 95 852,700 3,350 4.1
Oklahoma 24 100 137,400 585 0.7
Oregon 18 100 297,300 854 1.0
Pennsylvania 98 98 678,400 3,491 4.3
Rhode Island 3 100 11,000 57 0.1
South Carolina 100 100 374,400 2,239 2.7
South Dakota 9 100 24,900 102 0.1
Tennessee 134 97 629,300 2,955 3.6
Texas 212 95 2,280,000 7,843 9.6
Utah 4 100 25,200 91 0.1
Vermont 4 100 12,700 124 0.2
Virginia 104 100 637,100 3,553 4.4
Washington 35 94 230,300 735 0.9
West Virginia 2 100 23,000 121 0.1
Wisconsin 20 90 248,100 784 1.0
Wyoming 1 100 4,200 18 000
Totals/Average 2,334 97 % 19,070,600 $ 81,661 100.0 %

* Less than 0.1%

(1) Includes rental revenue for all properties owned by Realty Income at
September 30, 2009, including revenue from properties reclassified as
discontinued operations of $127.

Realty Income Corporation
Tere Miller
Vice President, Corporate Communications
760-741-2111 ext. 1177

Copyright Business Wire 2009