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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
=========
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
Commission File Number 1-13318
REALTY INCOME CORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0580106
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
220 West Crest Street, Escondido, California 92025
---------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (619)741-2111
-------------
Securities registered pursuant to Section 12 (b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
- ----------------------------------- -----------------------
Common Stock, $1.00 Par Value New York Stock Exchange
Variable Rate Senior Notes Due 2001 New York Stock Exchange
- ----------------------------------- -----------------------
Securities registered pursuant to Section 12 (g) of the Act: None
----
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Continued
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
At March 19, 1996 the aggregate market value of the
Registrant's shares of common stock, $1.00 par value, held by
non-affiliates of the Registrant was $466,043,674, at the New
York Stock Exchange closing price of $21.125.
There were 22,976,237 shares of common stock outstanding at
March 19, 1996.
Documents incorporated by reference: Part III, Item 10, 11,
12 and 13 are incorporated by reference to the definitive proxy
statement for Realty Income Corporation's Annual Meeting to be
held on May 14, 1996, to be filed pursuant to Regulation 14A.
Page 1
REALTY INCOME CORPORATION
Index To Form 10-K
==================
Page
PART I ====
Item 1: Business......................................... 3
Item 2: Properties....................................... 22
Item 3: Legal Proceedings................................ 23
Item 4: Submission of Matters to a
Vote of Security Holders......................... 23
PART II
Item 5: Market for the Registrant's Common
Equity and Related Stockholder Matters........... 23
Item 6: Selected Financial Data.......................... 25
Item 7: Management's Discussion and Analysis
of Financial Condition and Results of
Operations....................................... 26
Item 8: Financial Statements and Supplementary Data...... 39
Item 9: Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure...........184
PART III
Item 10: Directors and Executive Officers
of the Registrant................................184
Item 11: Executive Compensation...........................184
Item 12: Security Ownership of Certain
Beneficial Owners and Management.................184
Item 13: Certain Relationships and Related
Transactions.....................................184
PART IV
Item 14: Exhibits, Financial Statement Schedules
and Reports on Form 8-K..........................185
SIGNATURES....................................................188
EXHIBIT INDEX.................................................190
Page 2
PART I
======
ITEM 1: BUSINESS
- -----------------
THE COMPANY
===========
Realty Income Corporation ("Realty Income" or the "Company")
is a fully integrated, self-administered and self-managed Real
Estate Investment Trust ("REIT") and the nation's largest
publicly-traded owner of freestanding, single-tenant, retail
properties diversified geographically and by industry and
operated under triple-net lease agreements. As of
February 1, 1996, the Company owned a diversified portfolio of
686 properties located in 42 states with over 4.6 million square
feet of leasable space. Over 99% of the Company's properties
were leased as of February 1, 1996. Unless otherwise indicated,
information regarding the Company's properties is as of
February 1, 1996.
Realty Income adheres to a focused strategy of acquiring
freestanding, single-tenant, retail properties leased to national
and regional retail chains under long-term, triple-net lease
agreements. The Company typically acquires, and then leases
back, retail store locations from retail chain store operators,
providing capital to the operators for continued expansion and
other purposes. The Company's triple-net lease agreements
generally are for initial terms of 15 to 25 years, require the
tenant to pay a minimum monthly rent and all property operating
expenses (taxes, insurance and maintenance), and provide for
future rent increases based on increases in the consumer price
index or additional rent calculated as a percentage of the
tenant's gross sales above a specified level.
Since 1970, Realty Income has acquired and leased back to
national and regional retail chains over 630 properties
(including approximately 20 properties that have been sold) and
has collected in excess of 98% of the contractual rent
obligations on those properties. Realty Income believes that the
long-term ownership of an actively managed, diversified portfolio
of retail properties leased under long-term, triple-net lease
agreements will produce consistent, predictable income and the
potential for long-term capital appreciation. Management
believes that long-term leases, coupled with tenants assuming
responsibility for property expenses under the triple-net lease
structure, generally produce a more predictable income stream
than many other types of real estate portfolios. As of
February 1, 1996, the Company's single-tenant properties were
leased pursuant to leases with an average remaining term
(excluding extension options) of approximately 9.2 years. See
"Properties."
Page 3
The Company was formed on September 9, 1993 in the State of
Delaware. Realty Income commenced operations as a REIT on
August 15, 1994 through the merger of 25 public and private real
estate limited partnerships with and into the Company (the
"Consolidation"). Each of the partnerships was formed between
1970 and 1989 for the purpose of acquiring and managing
long-term, triple-net leased properties. The partnerships
historically made regular monthly cash distributions to
investors. Realty Income pays a regular monthly distribution to
its stockholders.
The Company is a fully integrated real estate company with
in-house acquisition, leasing, legal, financial underwriting,
portfolio management and capital markets expertise. The seven
senior officers of the Company, who have each managed the
Company's properties and operations for between five and 26
years, owned approximately 3.9% of the Company's outstanding
common stock, par value $1.00 per share (the "Common Stock") as
of March 15, 1996.
Realty Income has 34 employees as of March 1, 1996.
RECENT DEVELOPMENTS
===================
Since the Consolidation, the Company has implemented its
growth plan, which is intended to increase the Company's revenue
and funds from operations ("FFO") per share. FFO is defined in
Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations. As part of its growth plan,
from the date of the Consolidation through February 1, 1996, the
Company acquired 63 additional triple-net leased retail
properties with an aggregate initial annual contractual base rent
of approximately $7.9 million.
INCREASE IN MONTHLY DISTRIBUTION. In August 1995, the
Company increased its monthly distribution to $0.155 per share
from $0.15 per share, representing an increase of 3.3%. The
Company has paid distributions of $0.155 per share in August 1995
through February 1996. The February 1996 distribution was paid
on January 26, 1996 and a special distribution of $0.23 per share
was also paid in January 1996. The monthly distribution of
$0.155 per share represents a current annualized distribution of
$1.86 per share, and an annualized distribution yield of
approximately 8.6% based on the last reported sale price of the
Company's Common Stock on the New York Stock Exchange ("NYSE") on
February 27, 1996. Although the Company expects to continue its
policy of paying monthly distributions, there can be no assurance
that the current level of distributions will be maintained by the
Company or as to the actual distribution yield for any future
period. See "Distribution Policy."
Page 4
MERGER OF THE ADVISOR COMPANY. Prior to August 17, 1995,
the day-to-day operations of the Company were managed by R.I.C.
Advisor, Inc. (the "Advisor Company") pursuant to an advisory
agreement. In order to create a fully integrated company and
more closely align the interests of management with the interests
of the Company's stockholders, the Advisor Company was merged
with and into Realty Income on August 17, 1995 (the "Merger").
Pursuant to the Agreement and Plan of Merger dated April 28, 1995
(the "Merger Agreement"), the outstanding shares of the Advisor
Company's common stock were converted into 990,704 newly issued
shares of Realty Income Common Stock. As a result of the Merger,
the employees of the Advisor Company became employees of the
Company, and the Company became a fully integrated,
self-administered and self-managed REIT.
ACQUISITION OF 63 TRIPLE-NET LEASED, RETAIL PROPERTIES.
Since the Consolidation, the Company has increased the size of
its portfolio through a strategic program of acquisitions. The
Company has acquired 63 additional properties (the "New
Properties"), and selectively sold five properties, increasing
the number of properties in its portfolio by 9.2% from 628
properties at August 15, 1994 to 686 properties as of
February 1, 1996. Of the New Properties, 61 were occupied as of
February 1, 1996 and the remaining two were pre-leased and under
construction pursuant to contracts under which the tenants have
agreed to develop the properties (with development costs funded
by the Company) and to begin paying rent when the premises open
for business. The New Properties were acquired for an aggregate
cost of approximately $70.7 million (including the estimated
development costs of the two properties under construction), are
located in 20 states, will contain approximately 655,900 leasable
square feet and are 100% leased under triple-net leases, with an
average initial lease term of 16.4 years. The weighted average
annual unleveraged return on the cost of the New Properties
(including the estimated cost of properties under construction)
is estimated to be 11.3%, computed as estimated contractual net
operating income (which in the case of a triple-net leased
property is equal to the base rent or, in the case of properties
under construction, the estimated base rent under the lease) for
the first year of each lease, divided by total acquisition and
estimated development costs. No assurance can be given that the
actual return on the cost of the New Properties will not differ
from the foregoing percentage. In addition to acquiring the New
Properties, at February 1, 1996 the Company had entered into
purchase agreements to acquire three additional properties for an
aggregate cost of approximately $2.6 million.
VARIABLE SENIOR NOTE REDEMPTION. On February 15, 1996, the
Company announced its intent to redeem all of its outstanding
variable rate senior notes due 2001 (the "Notes"). The Notes
will be redeemed at par plus accrued interest to the date of
redemption, which is scheduled for March 29, 1996.
Page 5
$130 MILLION UNSECURED ACQUISITION CREDIT FACILITY. In
November 1994, the Company obtained a $100 million, three-year,
revolving, unsecured acquisition credit facility (the
"Acquisition Credit Facility") from The Bank of New York, as
agent, and several major U.S. and non-U.S. commercial banks. In
December 1995, the Company negotiated several modifications to
the credit facility including (i) an increase in borrowing
capacity to $130 million from $100 million; (ii) a reduction in
the initial interest rate to London Interbank Offered Rate
("LIBOR") plus 1.25% from LIBOR plus 1.375%; and (iii) an
extension of the credit facility from November 1997 to
November 1998. The Acquisition Credit Facility has been used to
fund a portion of the property acquisitions completed since the
Consolidation and is anticipated to continue to be used to
acquire triple-net leased, retail properties.
LISTING OF THE COMMON STOCK ON THE NYSE. The Common Stock
was authorized for listing on the NYSE under the symbol "O" and
commenced trading on the NYSE on October 18, 1994.
BUSINESS OBJECTIVES AND STRATEGY
================================
GENERAL. The Company's primary business objective is to
generate a consistent and predictable level of FFO per share and
distributions to stockholders. Additionally, the Company
generally will seek to increase FFO per share and distributions
to stockholders through both internal and external growth, while
also seeking to lower the ratio of distributions to stockholders
as a percentage of FFO in order to allow internal cash flow to be
used to fund additional acquisitions and for other corporate
purposes. The Company pursues internal growth through
(i) contractual rent increases on existing leases; (ii) rental
increases at the termination of existing leases when market
conditions permit; and (iii) the active management of the
Company's property portfolio, including selective sales of
properties. The Company generally pursues external growth
through the acquisition of additional properties under long-term,
triple-net lease agreements with initial contractual base rent
which, at the time of acquisition, is in excess of the Company's
estimated cost of capital.
INVESTMENT PHILOSOPHY. Realty Income believes that the
long-term ownership of an actively managed, diversified portfolio
of retail properties under long-term, triple-net lease agreements
should produce consistent, predictable income and the potential
for long-term capital appreciation. Under a triple-net lease
agreement, the tenant agrees to pay a minimum monthly rent and
all property expenses (taxes, maintenance, and insurance) plus,
typically, future rent increases based on increases in the
consumer price index or additional rent calculated as a
percentage of the tenant's gross sales above a specified level.
Page 6
The Company believes that long-term leases, coupled with the
tenants assuming responsibility for property expenses, produce a
more predictable income stream than many other types of real
estate portfolios, while continuing to offer the opportunity for
capital appreciation.
INVESTMENT STRATEGY. In identifying new properties for
acquisition, Realty Income focuses on providing expansion capital
to middle market retail chains by acquiring, then leasing back,
their retail store locations. The Company classifies retail
tenants into three categories: venture, middle market, and upper
market. Venture companies are those which typically offer a new
retail concept in one geographic region of the country and
operate between five and 100 retail outlets. In general, these
retail chains are thinly capitalized and are in the process of
solving distribution, marketing, concept, geographic adaptation,
and other problems associated with a new, growing company.
Middle market retail chains are those which typically have 100 to
500 retail outlets, operations in more than one geographic
region, success through one or more economic cycles, a proven,
replicable concept, and an objective of further expansion. The
upper market retail chains typically consist of companies with
500 or more stores which operate nationally in a mature retail
concept. They generally have strong operating histories and
access to several sources of capital.
Realty Income focuses on acquiring properties leased to
emerging, middle market retail chains which the Company believes
are more attractive for investment because: (i) they generally
have overcome many of the operational and managerial obstacles
that tend to adversely affect venture retailers; (ii) they
typically require capital to fund expansion but have more limited
financing options compared to upper market retailers;
(iii) historically, they generally have provided attractive
risk-adjusted returns to the Company over time, since their
financial strength has in many cases tended to improve as their
businesses have matured; (iv) their relatively large size
compared to venture retailers allows them to spread corporate
expenses among a greater number of stores; and (v) compared to
venture retailers, middle market retailers typically have the
critical mass to survive if a number of locations have to be
closed due to underperformance.
ACQUISITION STRATEGY. Realty Income seeks to invest in
industries that are dominated by independent local operators and
in which several well organized regional and national chains are
capturing market share through service, quality control,
economies of scale, mass media advertising, and selection of
prime retail locations. The Company executes its acquisition
strategy by acting as a source of capital to regional and
national retail chain stores in a variety of industries by
acquiring, then leasing back, their retail store locations.
Page 7
Relying on executives from its acquisitions, portfolio
management, finance, accounting, operations, capital markets, and
legal departments, the Company undertakes stringent research and
analysis in identifying appropriate industries, tenants, and
property locations for investment. In selecting real estate for
potential investment, the Company generally will seek to acquire
properties that have the following characteristics:
* Freestanding, commercially zoned property with a single
tenant;
* Properties that are important retail locations for
national and regional retail chains;
* Properties that are located within attractive demographic
areas relative to the business of their tenants, with
high visibility and easy access to major thoroughfares;
* Properties that can be purchased with the simultaneous
execution or assumption of long-term, triple-net lease
agreements, providing the opportunity for both current
income and future rent increases based on increases in
the consumer price index or through the payment of
additional rent calculated as a percentage of the
tenant's gross sales above a specified level; and
* Properties that can be acquired at or below their
appraised value at prices generally ranging from $300,000
to $10 million.
PORTFOLIO MANAGEMENT STRATEGY. The active management of the
property portfolio is an essential component of the Company's
long-term strategy. The Company continually monitors its
portfolio for changes that could affect the performance of the
industries, tenants, and locations in which it has invested.
Realty Income's executive committee meets at least monthly to
review industry and tenant research, due diligence, property
operations and portfolio management. This monitoring typically
includes ongoing review and analysis of: (i) the performance of
various tenant industries; (ii) the operation, management,
business planning, and financial condition of the tenants;
(iii) the health of the individual markets in which the Company
owns properties, from both an economic and real estate
standpoint; and (iv) the physical maintenance of the Company's
individual properties. The portfolio is analyzed on an ongoing
basis with a view towards optimizing performance and returns.
While the Company generally intends to hold its triple-net
leased properties for long-term investment, the Company believes
that opportunities may exist to increase FFO through the active
management of its portfolio of triple- net lease properties. The
Company intends to pursue a strategy of identifying properties
Page 8
that may be sold at attractive prices where the reinvestment of
the sales proceeds is expected to generate a higher cash flow to
the Company. While the Company intends to pursue such a
strategy, it will only do so within the constraints of the
rules regarding REIT status.
CAPITAL STRATEGY. The Company utilizes its $130 million,
unsecured Acquisition Credit Facility as a vehicle for the
short-term financing of the acquisition of new properties. When
outstanding borrowings under the Acquisition Credit Facility
reach a certain level (generally in the range of $50 to $100
million), the Company intends to refinance those borrowings with
the net proceeds of long-term or permanent financing, which may
include the issuance of Common Stock, Preferred Stock or
convertible Preferred Stock, debt securities or convertible debt
securities. However, there can be no assurance that the Company
will be able to effect any such refinancing or regarding the
terms on which any such refinancing may be accomplished. The
Company believes that it is best served by a conservative capital
structure, with a majority of its capital consisting of equity.
As of December 31, 1995, the Company's total indebtedness was
approximately 4.9% of its total assets.
COMPETITIVE STRATEGY. The Company believes that to utilize
its investment philosophy and strategy most successfully, it must
seek to maintain the following competitive strategy:
* SIZE OF INVESTMENT PROPERTIES: The Company believes that
smaller ($300,000 to $10,000,000) retail triple-net
leased properties represent an attractive investment
opportunity in today's real estate environment. Due to
the complexities of acquiring and managing a large
portfolio of relatively small assets, the Company
believes that these types of properties have not
experienced significant institutional participation or
the corresponding yield reduction experienced by larger
income producing properties. The Company believes the
less intensive day to day property management required
by triple-net lease agreements, coupled with the active
management of a large portfolio of smaller properties by
the Company, is an effective investment strategy.
* INVESTMENT IN NEW INDUSTRIES: While specializing in
smaller properties, the Company will seek to further
diversify its portfolio among a variety of industries.
The Company believes that diversification will allow it
to invest in industries that are currently growing and
have characteristics the Company finds potentially
profitable. These characteristics include, but are not
limited to, industries dominated by local operators where
national and regional chain operators can gain
substantial market share and dominance through more
Page 9
efficient operations, as well as industries taking
advantage of major demographic shifts in the population
base. For example, in the early 1970s, Realty Income
targeted the fast food industry to take advantage of the
country's increasing desire to dine away from home, and
in the early 1980s, it targeted the child day care
industry, responding to the need for professional child
care as more women entered the work force.
* DIVERSIFICATION: Diversification of the portfolio by
industry type, tenant and geographic location is key to
the Company's objective of providing predictable
investment results for its stockholders. As the Company
expands it will seek to further diversify its portfolio.
* MANAGEMENT SPECIALIZATION: The Company believes that its
management's specialization in small properties operated
under triple-net lease agreements is important to meeting
its objectives. The Company plans to maintain this
specialization and will seek to employ and train high
quality professionals in this specialized area of real
estate ownership, finance and management.
* TECHNOLOGY: The Company intends to stay at the forefront
of technology in its efforts to efficiently and
economically carry out its operations. The Company
maintains a sophisticated information system that allows
it to analyze its portfolio's performance and actively
manage its investments. In addition, the Company
maintains record-keeping on an optical disc storage and
retrieval system which gives it ready access to records
on a cost efficient and timely basis. The Company
believes that technology and information based systems
will play an increasingly important role in its
competitiveness as an investment manager and source of
capital to a variety of industries and tenants.
PROPERTIES
==========
As of February 1, 1996, the Company owned 686 properties in
42 states consisting of 135 after-market automotive retail
locations, 319 child care centers, 36 convenience stores, 4 home
furnishings stores, 177 restaurant facilities and 15 other
properties. Of the 686 properties, 627 or 91% are leased to
national or regional retail chain operators; 35 or 5% are leased
to franchisees of retail chain operators; 20 or 3% are leased to
other tenant types; and four or less than 1% are available for
lease. Over 97% of the properties were under triple-net lease
agreements. Triple-net leases typically require the tenant to be
responsible for substantially all property operating costs
including property taxes, insurance, maintenance and structural
repairs.
Page 10
The Company's net-leased retail properties are primary
retail locations of national and regional retail chain store
operators. The properties average approximately 6,800 square
feet of leasable retail space on approximately 42,400 square feet
of land. Generally, buildings are single-story properties with
adequate parking on site to accommodate peak retail traffic
periods. The properties tend to be on major thoroughfares with
relatively high traffic counts and adequate access, egress and
proximity to a sufficient population base to constitute a
sufficient market or trade area for the retailer's business.
As of February 1, 1996, Realty Income owned a diversified
portfolio of 686 properties in 42 states consisting of over 4.6
million square feet of leasable space. The following table sets
forth certain geographic diversification information regarding
these properties:
Total
Number Approx. Percent
of Leasable Annualized of Total
Proper- Percent Square Base Annualized
State ties Leased Feet Rent (1) Base Rent
============ ======= ======= ========= =========== =========
Alabama 4 100% 20,300 $ 160,000 0.3%
Arizona 27 98 181,100 2,192,000 4.1
California 51 98 914,000 9,189,000 16.9
Colorado 38 100 222,600 2,686,000 4.9
Connecticut 3 100 7,100 160,000 0.3
Florida 40 100 298,600 2,967,000 5.5
Georgia 36 100 177,500 2,333,000 4.3
Idaho 11 100 52,000 653,000 1.2
Illinois 22 100 153,400 1,816,000 3.3
Indiana 20 100 89,800 1,315,000 2.4
Iowa 7 100 37,700 411,000 0.8
Kansas 13 100 80,500 900,000 1.8
Kentucky 10 100 30,600 727,000 1.3
Louisiana 2 100 10,700 126,000 0.2
Maryland 6 100 34,900 501,000 0.9
Massachusetts 4 100 20,900 431,000 0.8
Michigan 5 100 26,900 343,000 0.6
Minnesota 17 100 118,400 1,670,000 3.1
Mississippi 3 100 17,300 176,000 0.3
Missouri 26 100 161,200 1,906,000 3.5
Montana 1 100 5,400 71,000 0.1
Nebraska 8 100 47,100 509,000 0.9
Nevada 5 100 29,100 350,000 0.6
New Hampshire 1 100 6,400 119,000 0.2
New Jersey 3 67 32,300 344,000 0.6
Page 11
Continued
Total
Number Approx. Percent
of Leasable Annualized of Total
Proper- Percent Square Base Annualized
State ties Leased Feet Rent (1) Base Rent
============ ======= ======= ========= =========== =========
New Mexico 3 100 12,000 102,000 0.2
New York 4 100 24,100 453,000 0.8
North Carolina 18 100 77,100 1,154,000 2.1
Ohio 38 100 170,700 2,547,000 4.7
Oklahoma 9 100 60,200 538,000 1.0
Oregon 19 100 105,200 1,201,000 2.2
Pennsylvania 4 100 28,300 418,000 0.9
South Carolina 19 95 82,000 1,022,000 1.9
South Dakota 1 100 6,100 79,000 0.1
Tennessee 8 100 56,400 784,000 1.4
Texas 123 99 826,900 8,424,000 15.5
Utah 7 100 45,400 586,000 1.1
Virginia 12 100 67,000 886,000 1.6
Washington 41 100 246,900 2,920,000 5.5
West Virginia 1 100 4,600 58,000 0.1
Wisconsin 10 100 55,200 665,000 1.2
Wyoming 6 100 32,100 410,000 0.8
------- ------- --------- ----------- ---------
Total/Average 686 99% 4,676,000 $54,302,000 100.0%
======= ======= ========= =========== =========
(1) Does not include percentage rents (i.e., additional rent
calculated as a percentage of the tenant's gross sales above a
specified level), if any, that may be payable under leases
covering certain of the properties. Annualized base rent is
calculated by multiplying the monthly contractual base rent as of
February 1, 1996 for each of the properties by 12.
Page 12
The following table sets forth certain information regarding
the Company's properties as of February 1, 1996, classified
according to the business of the respective tenants:
Approx. Realty Total
Total Income Approx. Annual-
Loca- Owned Leasable ized
Industry tions Loca- Square Base
Tenant Segment (1) tions Feet Rent (2)
============== ============ ======= ====== ========= ===========
AUTOMOTIVE
- ----------
Discount Tire Parts 294 18 103,200 $ 1,133,000
Northern
Automotive Parts 560 79 409,100 4,176,000
R&S Strauss Parts 107 2 31,200 431,000
Econo Lube
N' Tune Service 214 2 5,600 155,000
Jiffy Lube Service 1,212 24 57,000 1,401,000
Q Lube Service 460 4 7,600 177,000
Speedy Muffler
King Service 1,032 4 20,200 311,000
Other Automotive -- 2 6,500 89,000
------ --------- -----------
TOTAL AUTOMOTIVE 135 640,400 7,873,000
CHILD CARE
- ----------
Children's World
Learning
Centers Child Care 500 134 964,000 13,272,000
KinderCare
Learning
Centers Child Care 1,150 13 79,800 1,055,000
La Petite
Academy Child Care 770 171 977,300 8,728,000
Other Child Care -- 1 4,200 --
------ --------- -----------
TOTAL CHILD CARE 319 2,025,300 23,055,000
CONVENIENCE STORES
- ------------------
7-ELEVEN Convenience 15,000 3 9,700 235,000
Dairy Mart Convenience 871 18 53,600 1,120,000
The Pantry Convenience 391 14 34,400 1,333,000
Other Convenience -- 1 2,100 31,000
------ --------- -----------
TOTAL CONVENIENCE STORES 36 99,800 2,719,000
Page 13
Continued
Approx. Realty Total
Total Income Approx. Annual-
Loca- Owned Leasable ized
Industry tions Loca- Square Base
Tenant Segment (1) tions Feet Rent (2)
============== ============ ======= ====== ========= ===========
HOME FURNISHINGS
- ----------------
Levitz Home
Furnishings 135 4 376,400 2,496,000
------ --------- -----------
TOTAL HOME FURNISHINGS 4 376,400 2,496,000
RESTAURANTS
- -----------
Don Pablo's Dinner House 46 7 60,700 592,000
Carver's Dinner House 94 2 18,500 330,000
Other Dinner House -- 15 124,700 1,195,000
Golden Corral Family 448 90 528,700 6,956,000
Sizzler Family 597 7 37,600 834,000
Other Family -- 4 23,900 291,000
Hardees Fast Food 3,870 3 10,300 108,000
Taco Bell Fast Food 4,623 24 54,100 1,488,000
Whataburger Fast Food 517 9 23,000 616,000
Other Fast Food -- 16 45,200 950,000
------ --------- -----------
TOTAL RESTAURANTS 177 926,700 13,360,000
TOTAL OTHER Miscellaneous 15 607,400 4,799,000
------ --------- -----------
Total 686 4,676,000 $54,302,000
====== ========= ===========
(1) Approximate total number of retail locations operated by
each tenant (including both owned and franchised locations),
based on information provided to the Company by the respective
tenants.
(2) Does not include percentage rents (i.e., additional rent
calculated as a percentage of the tenant's gross sales above a
specified level), if any, that may be payable under leases
covering certain of the properties. Annualized base rent is
calculated by multiplying the monthly contractual base rent as of
February 1, 1996 for each of the properties by 12.
Of the 686 properties, 676 are single-tenant properties with
the remaining properties being multi-tenant properties. As of
Page 14
February 1, 1996, 672 or over 99% of the single-tenant properties
were triple-net leased pursuant to leases with an average
remaining lease term (excluding extension options) of
approximately 9.2 years. The following table sets forth certain
information regarding the timing of lease expirations on the
Company's 672 triple-net leased, single tenant retail properties:
Percent
Number of of Total
Leases Annualized Annualized
Year Expiring Base Rent (2) Base Rent
======== ========= ============= ==========
1996 15 $ 572,000 1.1%
1997 15 587,000 1.2
1998 4 168,000 0.3
1999 20 895,000 1.8
2000 27 1,322,000 2.6
2001 46 3,599,000 7.2
2002 74 5,868,000 11.6
2003 70 5,203,000 10.3
2004 78 6,241,000 12.4
2005 88 6,121,000 12.2
2006 31 2,589,000 5.1
2007 78 4,382,000 8.7
2008 41 3,384,000 6.7
2009 11 714,000 1.4
2010 34 2,710,000 5.4
2011 11 926,000 1.8
2012 1 135,000 0.3
2013 0 -- --
2014 2 265,000 0.5
2015 24 4,624,000 9.2
2016 1 64,000 0.1
2017 0 -- --
2018 1 39,000 0.1
--------- ------------- ----------
Total 672 (1) $50,408,000 100.0%
========= ============= ==========
(1) The table does not include ten multi-tenant properties and
four vacant, unleased properties owned by the Company. The
average remaining lease term for all leases on the Company's
properties, excluding the multi-tenant properties, is
approximately 9.2 years. The lease expirations for two
properties under construction are based on the estimated date of
completion of such properties.
Page 15
(2) Does not include percentage rents (i.e., additional rent
calculated as a percentage of the tenant's gross sales above a
specified level), if any, that may be payable under leases
covering certain of the properties. Annualized base rent is
calculated by multiplying the monthly contractual base rent as of
February 1, 1996 for each of the properties by 12.
DESCRIPTION OF LEASING STRUCTURE. As of February 1, 1996,
over 97% of the Company's properties were leased pursuant to
triple-net leases. In most cases, the leases are for initial
terms of from 15 to 20 years and the tenant has an option to
extend the initial term. The leases generally provide for a
minimum base rent plus future increases based on increases in the
consumer price index or additional rent based upon the tenant's
gross sales above a specified level (i.e., percentage rent).
Where leases provide for rent increases based on increases in the
consumer price index, such increases permanently become part of
the base rent. Where leases provide for percentage rent, this
additional rent is typically payable only if the tenant's gross
sales for a given period (usually one year) exceed a specified
level, and then is typically calculated as a percentage of only
the amount of gross sales in excess of such level. In general,
the leases require the tenant to pay all real property taxes,
insurance, and expenses of maintaining the property.
Description of Industries
- -------------------------
The Company's investments in properties at February 1, 1996
were concentrated in five major industries: after-market
automotive parts and service stores, child care, convenience
stores, home furnishings stores and restaurants. In addition,
the Company owns three mixed-use light industrial business parks.
THE AFTER-MARKET AUTOMOTIVE PARTS AND SERVICE INDUSTRY AND
TENANTS. The motor vehicle and parts after- market industry is
comprised of various parts producing firms and retail outlets
providing parts, service and repair to automobiles throughout the
country. The Company has selectively invested in the following
sectors of the after-market automotive industry: auto parts and
accessories stores, lubrication services and tire stores.
Auto Parts and Accessories. The Company believes Northern
Automotive is one of the largest operators of retail after-market
auto parts stores in the nation based on number of stores. The
Company began investing in Northern Automotive stores in 1987 and
currently owns 79 Northern Automotive properties located in 14
states. Based on information provided by Northern Automotive,
the Company believes it is the largest owner of Northern
Automotive properties.
Page 16
Lubrication Services. Based upon industry reports, the
Company believes that the quick lube market is a growing segment
of the motor oil business. The Company began investing in Jiffy
Lube International, Inc. ("Jiffy Lube") in 1985 and currently
owns 24 Jiffy Lube locations in eight states.
Tire Stores. With approximately 294 outlets as of
February 1, 1996, the Company believes Discount Tire Stores is
one of the largest independent retail tire sales operation in the
nation. The Company began investing in Discount Tire Stores in
1990 and currently owns 18 Discount Tire Stores properties
located in five states.
THE CHILD CARE INDUSTRY AND TENANTS. According to the U.S.
Bureau of Labor Statistics, the number of children under age six
with mothers in the labor force grew from 6.5 million in 1980 to
9.6 million in 1993. Fueled by the increase in the number of
women in the workplace, child care has grown into a national
industry.
The Company believes that child day care remains a highly
fragmented industry, with only three chains operating in excess
of 500 centers. The Company's child care properties are
geographically diversified, with properties leased to the three
largest operators (based on number of locations) of child day
care centers in the United States: La Petite Academy in 27
states, Children's World Learning Centers in 18 states, and
KinderCare Learning Centers in eight states.
THE CONVENIENCE STORE INDUSTRY AND TENANTS. As the
supermarket replaced the neighborhood grocery store, the
convenience store industry emerged to provide a convenient
neighborhood location for the purchase of a limited selection of
high use items. The industry today is adapting to a new concept
with the combination of a gas station and a traditional
convenience store. The integration of the two businesses on one
location gives newer convenience stores a competitive advantage
over older, single-concept stores. As a result, traditional
convenience store chains are beginning to sell gas at their
locations while certain petroleum companies are adding
convenience stores to their traditional gas stations.
The Company currently owns 36 convenience store properties
with 18 leased to Dairy Mart Convenience Stores, Inc., 14 leased
to The Pantry, three operated as 7-ELEVEN'S, and one to another
tenant. The Company is actively seeking to expand its
participation in the convenience store industry through
additional acquisitions.
THE HOME FURNISHINGS INDUSTRY AND TENANT. According to the
U.S. Bureau of the Census Current Business Reports, the U.S.
furniture stores total estimated retail sales were approximately
Page 17
$17.7 billion for the first six months of 1995, a 6.9% increase
over estimated retail sales for the last six months of 1994. The
industry is segmented into a number of different niches that
compete with one another. The Company believes the largest
segments include conventional furniture stores, specialty stores,
specialty furniture stores, manufacturers' gallery stores,
vertically integrated furniture stores, department stores,
general merchandise discounters, and catalog retailers. The
Company believes that historically, the conventional furniture
store segment was dominated by numerous local, independent
retailers operating in a fragmented market. The Company believes
that in recent years regional and national retail chains have
been taking market share from independent operators through more
efficient operations, distribution, marketing, advertising and
lower prices.
The Company owns four home furnishing retail store
properties which are leased to Levitz Furniture Corporation, one
of the nation's largest home furnishings retailers.
THE RESTAURANT INDUSTRY AND TENANTS. According to industry
estimates cited in Standard & Poor's Industry Surveys--Leisure
Time Basic Analysis, spending for food prepared outside the home
has grown steadily for most of the past two decades. The Company
currently owns a total of 177 restaurant properties, 133 of them
leased to five leading restaurant chains. All five of the
Company's major restaurant tenants, Golden Corral, Taco Bell,
Sizzler, Hardees and Whataburger, were ranked by NATION'S
RESTAURANT NEWS among the top 100 restaurant companies for 1994
based on sales volume.
Matters Pertaining to Certain Properties and Tenants
- ----------------------------------------------------
As of February 1, 1996, the Company's four largest tenants
were Children's World Learning Centers, La Petite Academy, Golden
Corral and Northern Automotive, which accounted for approximately
25.6%, 18.0%, 12.8% and 9.1%, respectively, of the Company's
rental revenue for the year ended December 31, 1995.
Four of the Company's properties were vacant as of
February 1, 1996 and available for lease. Three of the vacant
properties were previously leased to restaurant operators. One
of the vacant properties was formerly leased to a child care
operator.
As of February 1, 1996, 16 of the Company's properties which
were under lease, were vacant and available for sublease by the
tenant. Fifteen of these properties (nine restaurants, three
automotive stores, two day care and one medical building) were
available for sublease and had tenants who were current with
their rent and other lease obligations. The other property, a
Page 18
restaurant, has a tenant who is delinquent with respect to rent
payments.
As of February 1, 1996, 17 of the Company's properties had
been sublet to tenants in different industries than the original
tenant. At February 1, 1996, all of these tenants were current
with their rent and other lease obligations.
For a nine month period in 1992, the Company granted
temporary rent concessions to Northern Automotive with respect to
certain of its leases. Northern Automotive resumed paying full
rent on all of its leases in December 1992 and is currently
repaying the concessions previously granted.
Development of Certain Properties
- ---------------------------------
Of the 63 New Properties acquired by the Company since the
Consolidation, 53 were completed properties occupied by the
tenant at the time of acquisition while the remaining 10
properties were parcels of undeveloped land acquired for
development. In the case of undeveloped land, the Company
typically enters into an agreement with a prospective tenant
pursuant to which the tenant retains a contractor to construct
the improvements on the property and the Company funds the costs
of such development. The tenant is contractually obligated to
complete the construction on a timely basis, generally within
eight months after the Company purchases the land, to pay
construction cost overruns to the extent they exceed the
construction budget by more than 5% and, in some cases, to obtain
a completion bond. The Company also enters into a lease with the
prospective tenant at the time the Company purchases the land,
which generally requires that the tenant begin paying base rent,
calculated as a percentage of the Company's acquisition cost for
the property, including construction costs and capitalized
interest, when the premises open for business. As of
February 1, 1996, eight of the Company's leased and operating New
Properties had been developed through Company funding and the
Company was funding the development of two additional New
Properties. The total acquisition and estimated development
costs for these two properties is $1.5 million, of which
$1.0 million had not been funded as of February 1, 1996. The
Company will continue to seek to acquire land for development
under similar arrangements.
DISTRIBUTION POLICY
===================
Distributions are paid to the Company's stockholders on a
monthly basis if, as and when declared by the Company's Board of
Directors. In order to maintain its tax status as a REIT, the
Company is generally required to distribute annually to its
Page 19
stockholders at least 95% of its taxable income (determined
without regard to the deduction for dividends paid and by
excluding any net capital gain). The Company intends to make
distributions to its stockholders which are sufficient to meet
this requirement.
Future distributions by the Company will be at the
discretion of its Board of Directors and will depend on, among
other things, its results of operations, financial condition and
capital requirements, the annual distribution requirements under
the REIT provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), its debt service requirements and such
other factors as the Board of Directors may deem relevant. In
addition, the Acquisition Credit Facility contains financial
covenants which could limit the amount of distributions payable
by the Company in the event of a deterioration in the results of
operations or financial condition of the Company, and which
prohibit the payment of distributions on the Common Stock in the
event that the Company fails to pay when due (subject to any
applicable grace period) any principal of or interest on
borrowings under the Acquisition Credit Facility.
Distributions by the Company to the extent of its current
and accumulated earnings and profits for federal income tax
purposes generally will be taxable to stockholders as ordinary
income. Distributions in excess of such earnings and profits
generally will be treated as a non-taxable reduction in the
stockholders basis in its stock to the extent of such basis, and
thereafter as a gain from the sale of such stock. Approximately
4.7% of the distributions made or deemed to have been made in
1995 were classified as a return of capital for federal income
tax purposes, the Company is unable to predict the portion of
1996 or future distributions which may be classified as a return
of capital since such amount depends on the Company's taxable
income for the entire year.
In connection with the Merger, the Company was treated as
having acquired the accumulated earnings and profits of the
Advisor Company (the "Acquired Earnings"). In order to maintain
its status as a REIT, the Company was required to make or be
deemed to have made distributions sufficient to eliminate the
Acquired Earnings prior to December 31, 1995. To meet this
requirement, the Company declared in December 1995 a $0.155 per
share regular distribution paid on January 15, 1996, a $0.155 per
share regular distribution paid on January 26, 1996 (in lieu of
the regular February distribution) and a $0.23 per share special
distribution paid on January 11, 1996.
Page 20
OTHER ITEMS
===========
COMPETITION FOR ACQUISITION OF REAL ESTATE. The Company
will face competition in the acquisition, operation and sale of
its properties. Such competition can be expected from other
businesses, individuals, fiduciary accounts and plans and other
entities engaged in real estate investment. Some of the
Company's competitors are larger and have greater financial
resources than the Company. This competition may result in a
higher cost for properties the Company wishes to purchase. The
tenants leasing the Company's properties generally face
significant competition from other operators. This may result in
an adverse impact on that portion, if any, of the rental stream
to be paid to the Company based on a tenant's revenues and may
also adversely impact the tenants' results of operations or
financial condition.
ENVIRONMENTAL MATTERS. Investments in real property create
a potential for environmental liability on the part of the owner
of such property for contamination resulting from the presence or
discharge of hazardous substances on the property. Such
liability may be imposed without regard to knowledge of, or the
timing, cause or person responsible for the release of such
substances onto the property. The Company believes that its
properties are in compliance in all material respects with all
federal, state and local laws, ordinances and regulations
regarding hazardous or toxic substances or petroleum products.
The Company has not been notified by any governmental authority,
and is not otherwise aware, of any material noncompliance,
liability or claim relating to hazardous or toxic substances or
petroleum products in connection with any of its present
properties. Moreover, the tenants are required to operate in
compliance with all applicable federal, state and local laws and
regulations. Nevertheless, if environmental contamination should
exist, the Company could be subject to strict liability by virtue
of its ownership interest.
TAXATION OF THE COMPANY. The Company has elected to be
taxed as a REIT under the Code, commencing with its taxable year
ended December 31, 1994. As long as the Company meets the
requirements under the Code for qualification as a REIT each
year, the Company will be entitled to a deduction when
calculating its taxable income for dividends paid to its
stockholders. For the Company to qualify as a REIT, however,
certain detailed technical requirements must be met (including
certain income, asset and stock ownership tests) under Code
provisions for which, in many cases, there are only limited
judicial or administrative interpretations. Although the Company
intends to operate so that it will continue to qualify as a REIT,
the highly complex nature of the rules governing REITs, the
ongoing importance of factual determinations and the possibility
Page 21
of future changes in the Company's circumstances preclude any
assurance that the Company will so qualify in any year. For any
taxable year that the Company fails to qualify as a REIT, it
would not be entitled to a deduction for dividends paid to its
stockholders in calculating its taxable income. Consequently,
distributions to stockholders would be substantially reduced and
could be eliminated because of the Company's increased tax
liability. Should the Company's qualification as a REIT
terminate, the Company may not be able to elect to be treated as
a REIT for the subsequent five-year period, which would
substantially reduce and could eliminate distributions to
stockholders for the years involved.
EFFECT OF DISTRIBUTION REQUIREMENTS. To maintain its status
as a REIT for federal income tax purposes, the Company generally
is required each year to distribute to its stockholders at least
95% of its taxable income. In addition, the Company is subject
to a 4% nondeductible excise tax on the amount, if any, by which
certain distributions paid by it with respect to any calendar
year are less than the sum of 85% of its ordinary income for such
calendar year, 95% of its capital gain net income for the
calendar year and any amount of such income that was not
distributed in prior years.
ADDITIONAL CAPITAL REQUIREMENTS. The Company's future
growth will depend in large part upon its ability to raise
additional capital. If the Company were to raise additional
capital through the issuance of equity securities, the interests
of holders of Common Stock, including the shares of Common Stock
offered hereby, could be diluted. Likewise, the Company's Board
of Directors is authorized to cause the Company to issue
preferred stock in one or more series and entitled to such
dividends and voting and other rights as the Board of Directors
may determine. Accordingly, the Board of Directors may authorize
the issuance of preferred stock with voting, dividend and other
similar rights which could be dilutive to or otherwise adversely
affect the interests of holders of Common Stock.
DEPENDENCE ON KEY PERSONNEL. The Company is dependent on
the efforts of its directors and executive officers. The loss of
the services of its key employees could have a material adverse
effect on the Company's operations.
ITEM 2: PROPERTIES
- -------------------
Information pertaining to the properties of Realty Income
can be found under Item 1.
Page 22
ITEM 3: LEGAL PROCEEDINGS
- --------------------------
The Company is subject to certain claims and lawsuits, the
outcome of which are not determinable at this time. In the
opinion of management, any liability that might be incurred by
the Company upon the resolution of these claims and lawsuits will
not, in the aggregate, have a material adverse effect on the
consolidated financial condition or results of operations of the
Company.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
No matters were submitted to stockholders during the fourth
quarter of the fiscal year.
PART II
=======
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
- ----------------------------------------------------------
A. Common stock of the Company is listed on the New York
Stock Exchange under the symbol "O." The stock initially began
trading on The New York Stock Exchange on October 18, 1994.
Prior to October 18, 1994, the stock was not publicly traded.
Page 23
The following table shows the high, low and closing sales
prices per share for the Common Stock as reported by the New York
Stock Exchange for the periods indicated:
Price Per Share Distributions
of Common Stock Declared (1)
-------------------------- -------------
1994 HIGH LOW CLOSE
==== ======= ======= =======
Third Quarter N/A N/A N/A $0.30
Fourth Quarter (price
per share from
October 18, 1994) $18.125 $15.25 $17.125 0.45
------
$0.75
======
1995
====
First Quarter $19.25 $16.50 $18.375 $0.45
Second Quarter 21.50 17.875 21.125 0.45
Third Quarter 22.00 20.25 21.125 0.465
Fourth Quarter 22.50 19.25 22.50 0.85
------
$2.215
======
1996
====
First Quarter (through
March 19, 1996) $23.125 $20.625 $21.125 $0.31
======
(1) Distributions are currently declared monthly by the Company
based on financial results for the prior months. At
December 31, 1995, a special distribution of $0.23 per share and
two distributions of $0.155 per share had been declared and were
paid on January 11, 1996, January 15, 1996 and January 26, 1996,
respectively.
B. There were 18,557 holders of record of Realty Income's
shares of common stock as of March 8, 1996, however, Realty
Income believes the total number of beneficial shareholders of
Realty Income to be approximately 40,000.
Page 24
ITEM 6: SELECTED FINANCIAL DATA
- --------------------------------
(not covered by Independent Auditors' Report)
As Of Or For The Years Ended December 31,
(dollars in thousands, except per share data)
------------------------------------------------
1995 1994 1993 1992 1991
========== ========== ======== ======== ========
Total Assets
(Book Value) $ 417,639 $ 352,768 $384,474 $395,671 $409,904
Cash and Cash
Equivalents 1,650 11,673 29,329 7,414 5,438
Long Term
Obligations 20,457 13,621 1,035 1,041 850
Total Liabilities 36,218 17,352 2,570 2,150 2,858
Stockholders'
Equity 381,421 335,416 381,904 393,418 406,942
Net Cash Provided
by Operating
Activities 40,312 28,460 38,485 41,441 43,360
Net Change in
Cash and Cash
Equivalents (10,023) (17,656) 21,915 1,976 (5,713)
Total Revenue 51,555 48,863 49,018 49,034 49,420
Consolidation Costs -- (11,201) -- -- --
Income from
Operations 25,582 14,059 25,735 26,940 27,524
Gain on Sales
of Properties 18 1,165 3,583 1,113 279
Net Income 25,600 15,224 29,318 28,053 27,803
Distributions
Paid to
Stockholders/
Partners 36,710 44,666 40,831 41,567 42,676
Ratio of
Earnings to
Fixed Charges
(1) 10:1 39:1 5,865:1 N/A N/A
Book Value Per
Share (2) 16.60 17.20
Net Income Per
Share (2) 1.27 0.78
Distributions
Paid Per Share
(2)(3) 1.825 0.60
Total Distribu-
tions Declared
Per Share (2)(3) 2.215 0.75
Page 25
Continued
As Of Or For The Years Ended December 31,
(dollars in thousands, except per share data)
------------------------------------------------
1995 1994 1993 1992 1991
========== ========== ======== ======== ========
Weighted Average
Number of
Shares
Outstanding 20,230,963 19,502,091
(1) Ratio of Earnings to Fixed Charges is calculated by dividing
net income after adding back interest expense, by fixed charges.
Fixed charges are comprised of interest costs. Ratio of Earnings
to Fixed Charges is not applicable for 1992 and 1991 because the
Company did not have any fixed charges for these periods.
(2) Due to the change in the capital structure caused by the
Consolidation (see Item 8, Note 1 to the Consolidated Financial
Statements), per share information would not be meaningful for
1993 through 1991 and therefore has not been included.
(3) The 1994 amount represents distributions paid or declared,
as the case may be, after the Consolidation.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------
GENERAL
- -------
Realty Income Corporation ("Realty Income" or the "Company")
was organized to operate as an equity real estate investment
trust ("REIT"). The Company's primary business objective is to
generate a consistent and predictable level of funds from
operations ("FFO") per share and distributions to stockholders.
Additionally, the Company generally will seek to increase FFO per
share and distributions to stockholders through both internal and
external growth, while also seeking to lower the ratio of
distributions to stockholders as a percentage of FFO in order to
allow internal cash flow to be used to fund additional
acquisitions and for other corporate purposes. Realty Income
pursues internal growth through (i) contractual rent increases on
existing leases; (ii) rental increases at the termination of
existing leases when market conditions permit; and (iii) the
active management of the Company's property portfolio, including
selective sales of properties. The Company generally pursues
Page 26
external growth through the acquisition of additional properties
under long-term, triple-net lease agreements with initial
contractual base rent which, at the time of acquisition, is in
excess of the Company's estimated cost of capital.
Realty Income was organized in the state of Delaware on
September 9, 1993 to facilitate the merger, which was effective
on August 15, 1994 (the "Consolidation"), of 10 private and 15
public real estate limited partnerships (the "Partnerships") with
and into Realty Income. The Company's common stock is listed on
the New York Stock Exchange (the "NYSE") under the symbol "O" and
commenced trading on October 18, 1994.
Investors in the Partnerships who elected to invest in the
equity of the Company received a total of 19,503,080 shares of
common stock. Certain investors elected to receive Variable Rate
Senior Notes (the "Notes") totaling $12.6 million. The Notes are
due in 2001 and are listed on the NYSE. The Company paid $0.9
million in cash in lieu of issuing promissory notes and $0.5
million in cash in lieu of issuing fractional shares. On
February 15, 1996, the Company declared its intent to redeem all
of its outstanding Notes at par value, plus accrued interest to
the date of redemption. The redemption date is scheduled for
March 29, 1996.
The Consolidation was accounted for as a reorganization of
affiliated entities in a manner similar to a pooling-of-
interests. Under this method, the assets and liabilities of the
Partnerships were carried over at their historical book values
and operations have been recorded on a combined historical cost
basis. The pooling-of-interests method of accounting also
requires the reporting of the results of operations as though the
entities had been combined as of the beginning of the earliest
period presented. Accordingly, the results of operations for the
year ended December 31, 1994 comprise those of the separate
entities combined from the beginning of the period through
August 15, 1994 (the date of the Consolidation) and those of the
Company from August 16, 1994 through December 31, 1994.
Financial information for 1993 has also been restated on a
combined basis to provide comparative information.
In accordance with the Company's certificate of
incorporation and bylaws, the responsibility for the management
and control of the Company's operations is vested in its board of
directors. Prior to August 18, 1995, the Company's day-to-day
affairs were managed by R.I.C. Advisor, Inc. (the "Advisor")
which provided advice and assistance regarding acquisitions of
properties by the Company and performed the day-to-day management
of the Company's properties and business. On August 17, 1995,
the Advisor was merged with and into Realty Income (the "Merger")
and the advisory agreement between Realty Income and the Advisor
was terminated. Realty Income issued 990,704 shares of common
Page 27
stock as consideration for the outstanding common stock of the
Advisor. The Advisor held 57,547 shares of common stock of the
Company which were retired after the Merger.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Realty Income was organized for the purpose of operating as
an equity REIT which acquires and leases properties and
distributes to stockholders, in the form of monthly cash
distributions, a substantial portion of its net cash flow
generated from lease revenue. The Company intends to retain an
appropriate amount of cash as working capital reserves. At
December 31, 1995, the Company had cash and cash equivalents
totaling $1.65 million.
Capital Funding
In November 1994, Realty Income entered into a $100 million
three-year, revolving, unsecured acquisition credit facility. In
December 1995, the Company negotiated several modifications to
the credit facility including (i) an increase in borrowing
capacity to $130 million from $100 million; (ii) a reduction in
the interest rate to London Interbank Offered Rate ("LIBOR") plus
1.25% from LIBOR plus 1.375%; and (iii) an extension of the
credit facility from November 1997 to November 1998. This credit
facility has been and is expected to be used to acquire
additional retail properties leased to national and regional
retail chains under long term lease agreements. As of
February 9, 1996, $118 million of borrowing capacity was
available to the Company under the acquisition credit facility.
As of February 9, 1996, the interest rate on this facility was
6.9%.
Realty Income expects to meet its long-term capital needs
for the acquisition of properties through the issuance of public
or private debt or equity. In August 1995, the Company filed a
universal shelf registration statement with the Securities and
Exchange Commission covering up to $200 million in value of
common stock, preferred stock or debt securities. In November
and December 1995, the Company issued a total of 2,540,000 shares
of common stock at a price of $19.625 per share. The shares were
issued pursuant to the registration statement and a related
prospectus supplement. The net proceeds of $46.6 million from
this offering were used to repay $44.6 million of outstanding
borrowings under the acquisition credit facility with the
remainder invested in properties.
The Company is not currently involved in any negotiations
and has not entered into any arrangements relating to any
additional securities issuances.
Page 28
Property Acquisitions
During 1995, Realty Income purchased 58 properties in 19
states for $65.4 million. Two of the properties are currently
under development. All of the above mentioned properties,
including the properties under development, are leased with
initial terms of ten to 20 years. The properties were purchased
with $12.8 million of cash on hand, $50.6 million from the
acquisition credit facility and $2.0 million from the stock
offering proceeds. Additional stock offering proceeds of $44.6
million were used to repay the credit facility. The Company
invested an additional $288,000 in existing properties.
1995 ACQUISITION ACTIVITY
Total
Approx.
Initial Lease-
Lease able
Term Square
Tenant Industry Location (Years) Feet
============== =============== ================== ======= =======
1st Qtr
- -------
Dairy Mart Convenience Manchester CT 15 2,000
Dairy Mart Convenience Vernon CT 15 2,400
Dairy Mart Convenience Westbrook CT 15 2,700
Dairy Mart Convenience New Albany IN 15 2,500
Dairy Mart Convenience New Albany IN 15 2,800
Dairy Mart Convenience Berea KY 15 2,700
Dairy Mart Convenience Elizabethtown KY 15 2,700
Dairy Mart Convenience Lebanon KY 15 2,700
Dairy Mart Convenience Louisville KY 15 2,700
Dairy Mart Convenience Seekonk MA 15 2,700
Dairy Mart Convenience Atwater OH 15 2,500
Dairy Mart Convenience Columbus OH 15 7,200
Dairy Mart Convenience Cuyahoga Falls OH 15 2,800
Dairy Mart Convenience Galion OH 15 2,700
Dairy Mart Convenience Tiffin OH 15 3,200
Golden Corral Restaurant St. Charles MO 15 11,300
Golden Corral Restaurant Omaha NE 15 11,300
Golden Corral Restaurant Memphis TN 15 11,300
Whataburger Fast Food Ft. Worth TX 20 3,000
Whataburger Fast Food Porter TX 20 2,700
Whataburger Fast Food Temple TX 20 2,200
R&S Strauss Automotive Cherry Hill NJ 20 16,100
Page 29
Continued
1995 ACQUISITION ACTIVITY
Total
Approx.
Initial Lease-
Lease able
Term Square
Tenant Industry Location (Years) Feet
============== =============== ================== ======= =======
2nd Qtr
- -------
Dairy Mart Convenience Kingston NY 15 2,800
Don Pablo's Restaurant Flint MI 10 7,800
Don Pablo's Restaurant Norman OK 10 9,800
Don Pablo's Restaurant Dallas TX 10 9,800
Golden Corral Restaurant Amherst NY 15 11,300
Levitz Home Furnishing Cathedral City CA 20 40,000
Levitz Home Furnishing Concord CA 20 102,900
Levitz Home Furnishing Winter Park FL 20 122,100
Levitz Home Furnishing Plano TX 20 111,300
3rd Qtr
- -------
Dairy Mart(1) Convenience Perrysburg OH 15 2,700
Don Pablo's Restaurant Oklahoma City OK 10 9,900
Econo Lube
N' Tune Automotive San Antonio TX 13 2,800
Pantry Convenience Henderson KY 20 2,400
Pantry Convenience Owensboro KY 20 2,400
Pantry Convenience Cary NC 20 2,400
Pantry Convenience Greenville NC 20 2,400
Pantry Convenience Greenville NC 20 2,400
Pantry Convenience Jacksonville NC 20 2,600
Pantry Convenience Columbia SC 20 2,600
Pantry Convenience John's Island SC 20 2,500
Pantry Convenience Lexington SC 20 2,600
Pantry Convenience Myrtle Beach SC 20 2,400
Pantry Convenience N. Charleston SC 20 2,400
Pantry Convenience Summerville SC 20 2,500
Pantry Convenience La Vergne TN 20 2,400
Pantry Convenience Shelbyville TN 20 2,400
Page 30
Continued
1995 ACQUISITION ACTIVITY
Total
Approx.
Initial Lease-
Lease able
Term Square
Tenant Industry Location (Years) Feet
============== =============== ================== ======= =======
4th Qtr
- -------
Dairy Mart(1) Convenience Louisville KY 15 3,800
Carver's Restaurant Orem UT 20 8,200
Carver's Restaurant Sandy UT 20 10,300
7-ELEVEN Convenience Columbus OH 15 3,200
7-ELEVEN Convenience Flint MI 15 3,200
7-ELEVEN Convenience Groveport OH 15 3,200
Speedy Brake Automotive Columbus OH 15 5,300
Speedy Brake Automotive Eastlake OH 15 5,300
Speedy Brake Automotive Milwaukee WI 15 5,300
Speedy Brake Automotive New Berlin WI 15 4,200
------- -------
Average/Total 16.7 621,800
======= =======
(1) The Company acquired these two properties as undeveloped
land and is funding construction and other costs relating to the
development of the properties by the prospective tenants. The
prospective tenants have entered into leases with the Company
covering these properties and are contractually obligated to
complete construction on a timely basis and to pay construction
cost overruns to the extent they exceed the construction budget
by more than 5%. As of December 31, 1995, the total acquisition
and estimated construction costs for the two development
properties was $1.3 million, of which $1.0 million had not been
funded.
Distributions
Cash distributions paid for the years ended
December 31, 1995, 1994 and 1993 were $36.7 million, $44.7
million and $40.8 million, respectively. The 1994 distributions
were made up of twelve monthly distributions in the aggregate
amount of $38.9 million and the final partnership distribution of
$5.8 million. The 1994 final partnership distributions were
substantially comprised of proceeds from the sales of properties
sold during 1993.
Page 31
For the year ended December 31, 1995, the Company paid
monthly distributions of $0.15 per share from January through
July and increased its monthly distributions to $0.155 per share
in August. Monthly distributions of $0.155 per share were paid
in August through December 1995. The distributions paid for 1995
totaled $1.825 per share. In December 1995, the Company declared
two distributions of $0.155 per share which were paid on
January 15 and January 26, 1996 and a special distribution of
$0.23 per share which was paid on January 11, 1996. For tax
purposes, a portion of the special distribution, in the amount of
approximately $0.144 per share, is taxable as ordinary income in
1995 and represents the remaining portion of taxable earnings and
profits which were assumed by the Company in the Merger with the
Advisor. The remaining amount of approximately $0.086 per share
of the special distribution will be included in the 1996
distributions for tax purposes.
From August 15, 1994, the date of the Consolidation, through
December 1994, the Company paid monthly distributions of $0.15
per share, totaling $0.60 per share. Prior to the Consolidation
on August 15, 1994, the Company did not have equivalent shares
outstanding so no comparative per share information is presented.
As a result of the Merger on August 17, 1995, the Company
assumed a defined benefit pension plan (the "Plan") covering
substantially all of its employees. The board of directors of
the Advisor froze the Plan effective May 31, 1995. For each Plan
participant, the accrued benefit earned under the Plan as of
May 31, 1995 was frozen. In October 1995, the Company declared
its intent to terminate the Plan, and the Plan was terminated on
January 2, 1996. As part of the Plan's termination, the Company
anticipates meeting its obligation to the Plan of approximately
$1.7 million in the second half of 1996.
Management believes that the Company's cash provided from
operating activities and borrowing capacity are sufficient to
meet its liquidity needs for the foreseeable future.
RESULTS OF OPERATIONS
- ---------------------
Prior to the Consolidation on August 15, 1994, the capital
structure of the Partnerships consisted of limited partner
interests with no long term debt. In the Consolidation, limited
partners exchanged their partnership units for shares of common
stock or Notes of the Company. The general partners did not
receive any shares or Notes for their general partner interest.
Due to these changes in capital structure, which were caused by
the Consolidation, and additional expenses associated with the
operations of a publicly traded REIT, the results of operations
for the years ended December 31, 1995, 1994 and 1993 are not
necessarily comparable.
Page 32
Comparison of 1995 to 1994
Rental revenue was $51.2 million for 1995 versus $47.9
million for 1994. The increase in rental revenue was primarily
due to the acquisition of 62 properties from December 1994
through December 1995. These properties generated revenue of
$3.8 million in 1995. During 1996, the contractual lease
payments (not including any percentage rents) on these properties
are approximately $7.8 million.
Substantially all the Company's leases provide for increases
in rents through base rent increases tied to a consumer price
index with adjustment ceilings or overage rent based on a
percentage of the tenants' gross sales. Some leases contain both
types of clauses. Percentage rent, which is included in rental
revenue, was $1.6 million for 1995 as compared to $2.6 million in
1994.
Vacant properties are a factor in determining gross revenue
generated and property costs incurred by the Company. At
December 31, 1995 and 1994, the Company had four properties that
were not under lease. All of the remaining properties were under
lease agreements with third party tenants.
The significant portion of the remaining revenue earned
during 1995 and 1994 was attributable to interest earned on cash
invested in two funds which hold short-term investments in United
States government agency securities or direct purchases of short-
term United States government agency securities. Interest
revenue was $0.3 million for 1995 as compared to $0.9 million
during 1994. The interest revenue decreased in 1995 due to a
reduction of cash held, which was invested in properties.
The Company recorded a net gain on the sale of properties
during 1995 of $18,000 as compared to $1.2 million for 1994.
During 1995 and 1994 cash proceeds generated from these sales
were $0.6 million and $3.8 million, respectively. The Company
anticipates a small number of property sales will occur in the
normal course of business.
Depreciation and amortization was $14.8 million in 1995
versus $13.8 million in 1994. The increase was primarily due to
the depreciation of 62 properties acquired from December 1994
through December 31, 1995 and amortization of goodwill recorded
in connection with the Merger of the Advisor in 1995.
Advisor fees decreased by $1.7 million to $3.7 million in
1995 as compared to $5.4 million in 1994. On August 17, 1995 the
Advisor was merged into the Company. The advisor fees for 1995
were calculated in accordance with the terms of the advisory
agreement which became effective August 15, 1994 and was
terminated on August 17, 1995. Prior to August 16, 1994, advisor
Page 33
fees were calculated in accordance with the terms of the
Partnership agreements of the Partnerships.
General and administrative expenses were $4.8 million in
1995 versus $4.0 million in 1994. The $0.8 million increase in
general and administrative expenses was due to a $1.3 million
increase in administrative expenses reduced by a $0.5 million
decrease in property expenses. The increase in administrative
expenses was attributable to costs for management, accounting
systems, professional and support personnel and office
facilities. Prior to August 17, 1995 these costs were the
responsibility of the Advisor. The decline in property expenses
during 1995 as compared to 1994 was primarily due to reductions
in property taxes, provision for impairment loss and other
property costs. Administration expense in 1994 included
approximately $0.5 million of one-time expenses primarily
associated with the distribution of stock certificates,
shareholder informational material and final partnership K-1's to
shareholders after the Consolidation had occurred. Other
administrative expenses increased in 1995 compared to 1994 due to
additional expenses associated with the operation of a publicly
traded REIT including, but not limited to, transfer agent fees,
NYSE fees, board of directors fees and property acquisition
expenses.
The Company reviews long-lived assets for impairment
whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. No charge
was recorded for impairment loss in 1995. In 1994, a $0.1
million charge was made to general and administrative expenses to
reduce the net carrying value of one property.
Interest expense was $2.6 million for 1995 as compared to
$0.4 million for 1994. Of the $2.2 million increase, $1.6
million was interest paid on the acquisition credit facility in
1995 and $0.6 million was interest paid on the Notes. During
1995, interest of $0.2 million was capitalized. No interest was
capitalized in 1994.
In 1994, the Company expensed Consolidation costs
aggregating $11.2 million which were nonrecurring costs incurred
to effect the Consolidation. In a manner similar to the pooling-
of-interests method of accounting, the Consolidation costs were
charged to expense upon the consummation of the Consolidation.
Such costs included, but were not limited to, fees paid to
underwriters, attorneys, and accountants, as well as costs
associated with obtaining a fairness opinion, soliciting the
stockholders, and registering and listing the common stock and
the Notes on the NYSE.
Page 34
For 1995, the Company had net income of $25.6 million versus
$15.2 million in 1994. The net income in 1994 was negatively
impacted by one time Consolidation costs of $11.2 million. Net
income for 1994, excluding the Consolidation costs, was $26.4
million.
Comparison of 1994 to 1993
Rental revenue was $47.9 million for 1994 versus $48.6
million for 1993. The decline in the 1994 rental revenue was
mainly due to the sale of four retirement center properties
during December 1993. The 1993 rental revenue generated from
those properties was $2.4 million. Percentage rent, which is
included in rental revenue, was $2.6 million for 1994 as compared
to $1.0 million in 1993.
Vacant properties are a factor in determining gross revenue
generated and property costs incurred by the Company. At
December 31, 1994, the Company had four properties that were not
under lease as compared to seven properties at December 31, 1993.
All of the remaining properties were under lease agreements with
third party tenants.
The significant portion of the remaining revenue earned
during 1994 and 1993 was attributable to interest earned on cash
invested in a fund which holds short-term investments in United
States government agency securities or direct purchases of short-
term United States government agency securities. Interest
revenue was $0.9 million for 1994 as compared to $0.3 million
during 1993. The interest revenue increased in 1994 due to the
increase in cash from the sale of the four retirement centers as
well as an increase in short-term interest rates. In the fourth
quarter of 1994, portions of the proceeds from the sale of the
retirement properties were distributed to the limited partners,
used to pay transaction costs associated with the Consolidation
and invested in properties.
The Company recorded a gain on the sale of properties during
1994 of $1.2 million as compared to $3.6 million for 1993.
During 1994 and 1993 cash proceeds generated from these sales
were $3.8 million and $26.5 million, respectively. The Company
anticipates a small number of property sales will occur in the
normal course of business.
Depreciation and amortization was $13.8 million in 1994
versus $14.7 million 1993. The decrease in 1994 as compared to
1993 was primarily due to the sale of four retirement center
properties during December 1993.
Advisor fees increased by $0.3 million to $5.4 million in
1994 as compared to $5.1 million in 1993. The increase in
Advisor fees was due to the increase in expense reimbursements to
Page 35
the Advisor primarily associated with cost of living increases in
salary and general and administrative expenses. Under the terms
of the advisory agreement, which became effective
August 15, 1994, the fees with respect to the properties included
in the Consolidation were based upon the aggregate of all fees,
distributions and reimbursements paid to the general partners of
the partnerships merged into the Company during the twelve months
ended prior to the closing date of the Consolidation. Prior to
August 15, 1994, advisor fees were calculated in accordance with
the terms of the Partnership agreements of the Partnerships.
General and administrative expenses were $4.0 million in
1994 versus $3.5 million in 1993. The $0.5 million increase in
general and administrative expenses was due to a $1.1 million
increase in administrative expenses reduced by a $0.6 million
decrease in property expenses. Of the increase in administrative
expenses, approximately $0.5 million was attributable to one-time
expenses primarily associated with the distribution of stock
certificates, shareholder informational material and final
partnership K-1's to shareholders after the Consolidation had
occurred. The remainder of the increase was due to additional
expenses associated with the operation of a publicly traded REIT.
The decline in property expenses during 1994 as compared to 1993
was due to the reduction in the provision for impairment loss.
Other property expenses increased due to increases in the cost of
living.
Interest expense was $0.4 million for 1994 as compared to
$5,000 for 1993. Of the $0.4 million increase, $0.3 million was
interest paid on the Notes. The remainder of the increased
interest expense was attributable to short-term borrowings by
certain partnerships to finance their portion of the REIT
transaction costs prior to the Consolidation and amortization of
deferred acquisition credit facility fees.
In 1994, the Company expensed Consolidation costs
aggregating $11.2 million which were nonrecurring costs incurred
to effect the Consolidation. In a manner similar to the pooling-
of-interests method of accounting, the Consolidation costs were
charged to expense upon the consummation of the Consolidation.
Such costs included, but were not limited to, fees paid to
underwriters, attorneys, and accountants, as well as costs
associated with obtaining a fairness opinion, soliciting the
stockholders, and registering and listing the common stock and
the Notes on the NYSE.
For 1994, the Company had net income of $15.2 million versus
$29.3 million in 1993. The net income in 1994 was negatively
impacted by one time Consolidation costs of $11.2 million. Net
income for 1994, excluding the Consolidation costs, was $26.4
million.
Page 36
FUNDS FROM OPERATIONS
- ---------------------
Funds from operations ("FFO") for 1995 was $40.4 million
versus $39.1 million during 1994 and $40.4 million during 1993.
Excluding the one-time cost to disseminate information to
investors relating to the Consolidation, the 1994 FFO was
approximately $39.6 million. Realty Income defines FFO as net
income excluding gains or losses from sales of properties and the
one-time expenses of the 1994 Consolidation, plus depreciation
and amortization. In accordance with the recommendations of the
National Association of Real Estate Investment Trusts ("NAREIT"),
amortization of deferred financing costs are not added back to
net income to calculate FFO. Amortization of financing costs are
included in interest expense on the consolidated statements of
income.
Management considers FFO to be an appropriate measure of
the performance of an equity REIT. FFO is used by financial
analysts in evaluating REITs and can be one measure of a REIT's
ability to make cash distribution payments. Presentation of this
information provides the reader with an additional measure to
compare the performance of different REITs.
FFO is not necessarily indicative of cash flow available to
fund cash needs and should not be considered as an alternative to
net income as an indication of the Company's performance or to
cash flow from operating, investing, and financing activities as
a measure of liquidity or ability to make cash distributions.
Below is reconciliation of net income to funds from
operations (dollars in thousands):
1995 1994 1993
======= ======= =======
Net Income $25,600 $15,224 $29,318
Plus Depreciation and
Amortization 14,849 13,790 14,689
Less Depreciation of Furniture,
Fixtures and Equipment (17) -- --
Plus Consolidation Costs -- 11,201 --
Less Net Gain on Sales
of Properties (18) (1,165) (3,583)
------- ------- -------
Total Funds From Operations $40,414 $39,050 $40,424
======= ======= =======
Page 37
IMPACT OF INFLATION
- -------------------
Tenant leases generally provide for increases in rent as a
result of increases in the tenant's sales volumes or increases in
the consumer price index. Management expects that inflation will
cause these lease provisions to result in increases in rent over
time. However, inflation and increased costs may have an adverse
impact on the tenants if increases in the tenant's operating
expenses exceed increases in revenues. Over 97% of the
properties are leased to tenants under triple-net leases in which
the tenant is responsible for substantially all property costs
and expenses. These features in the leases reduce the Company's
exposure to rising expenses due to inflation.
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS
- ---------------------------------------
Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and of Long-
Lived Assets to Be Disposed Of" ("Statement 121") was issued in
March 1995. Statement 121 provides guidance for recognition and
measurement of impairment of long-lived assets, certain
identifiable intangibles and goodwill related both to assets to
be held and used and assets to be disposed of. Statement 121 is
effective for financial statements issued for fiscal years
beginning after December 15, 1995.
The Company's existing accounting policies comply with
Statement 121 and therefore implementing Statement 121 is not
expected to have a material effect on the Company's financial
position or results of operations.
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement 123") was
issued in October 1995. Statement 123 established the fair value
based method of accounting for stock-based compensation
arrangements, under which compensation cost is determined using
the fair value of the stock options at the grant date and the
number of options vested, and is recognized over the periods in
which the related services are rendered. Statement 123 is
effective for fiscal years beginning after December 15, 1995.
If the Company were to retain its current intrinsic value
based method, as allowed by Statement 123, it will be required to
disclose the pro forma effect of adopting the fair value based
method. To date, the Company has not made a decision to adopt
the fair value based method.
Page 38
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
Table of Contents Page
================= ======
A. Independent Auditors' Report........................... 40
B. Consolidated Balance Sheets,
December 31, 1995 and 1994........................... 41-42
C. Consolidated Statements of Income,
Years ended December 31, 1995, 1994 and 1993......... 43
D. Consolidated Statements of Stockholders' Equity,
Years ended December 31, 1995, 1994 and 1993......... 44-46
E. Consolidated Statements of Cash Flows,
Years ended December 31, 1995, 1994 and 1993......... 47-48
F. Notes to Consolidated Financial Statements............. 49-60
G. Consolidated Quarterly Financial Data
(unaudited) for 1995 and 1994........................ 61
H. Schedule III-Real Estate and Accumulated
Depreciation.........................................62-183
Schedules not Filed: All schedules, other than that indicated in
the Table of Contents, have been omitted as the required
information is inapplicable or the information is presented in
the financial statements or related notes.
Page 39
Independent Auditors' Report
----------------------------
The Board of Directors and Stockholders
Realty Income Corporation:
We have audited the consolidated financial statements (Note 1) of
Realty Income Corporation and subsidiaries as listed in the
accompanying table of contents. In connection with our audits of
the consolidated financial statements, we also have audited the
financial statement schedule III listed in the accompanying table
of contents. These consolidated financial statements and
financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Realty Income Corporation and subsidiaries as of
December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the years in the three-year
period ended December 31, 1995, in conformity with generally
accepted accounting principles. Also in our opinion, the related
financial statement schedule III, when considered in relation to
the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set
forth therein.
KPMG Peat Marwick LLP
San Diego, California
January 26, 1996,
except as to Note 5B to the
consolidated financial statements,
which is as of February 15, 1996
Page 40
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
===========================
December 31, 1995 and 1994
(dollars in thousands, except per share data)
1995 1994
========= =========
ASSETS
Real Estate, at Cost:
Land $ 147,789 $ 122,059
Buildings and Improvements 367,637 328,644
--------- ---------
515,426 450,703
Less - Accumulated Depreciation
and Amortization (126,062) (112,169)
--------- ---------
Net Real Estate, at Cost 389,364 338,534
Cash and Cash Equivalents 1,650 11,673
Accounts Receivable 1,638 1,266
Due from Affiliates 493 --
Other Assets 1,927 1,295
Goodwill 22,567 --
--------- ---------
TOTAL ASSETS $ 417,639 $ 352,768
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Distributions Payable $ 12,407 $ 2,925
Accounts Payable and Accrued Expenses 673 658
Other Liabilities 4,541 1,119
Due to Advisor -- 34
Notes Payable 12,597 12,616
Line of Credit Payable 6,000 --
--------- ---------
TOTAL LIABILITIES 36,218 17,352
--------- ---------
Page 41
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
===========================
December 31, 1995 and 1994
(dollars in thousands, except per share data)
1995 1994
========= =========
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, Par Value $1.00 Per
Share, 5,000,000 Shares Authorized,
No Shares Issued or Outstanding -- --
Common Stock, Par Value $1.00 Per Share,
40,000,000 Shares Authorized,
22,976,237 and 19,502,091 Shares
Issued and Outstanding in 1995 and
1994, respectively 22,976 19,502
Capital in Excess of Par Value 516,119 452,996
Accumulated Distributions in Excess
of Net Income (157,674) (137,082)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 381,421 335,416
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 417,639 $ 352,768
========= =========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
Page 42
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Income
=================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands, except per share data)
1994 1993
1995 (Note 1) (Note 1)
========== ========== ==========
REVENUE
Rental $ 51,185 $ 47,905 $ 48,584
Interest 276 862 279
Other 94 96 155
---------- ---------- ----------
51,555 48,863 49,018
---------- ---------- ----------
EXPENSES
Depreciation and Amortization 14,849 13,790 14,689
Advisor Fees 3,661 5,422 5,108
General and Administrative 4,821 3,995 3,481
Interest 2,642 396 5
Consolidation Costs -- 11,201 --
---------- ---------- ----------
25,973 34,804 23,283
---------- ---------- ----------
Income from Operations 25,582 14,059 25,735
Net Gain on Sales of
Properties 18 1,165 3,583
---------- ---------- ----------
NET INCOME $ 25,600 $ 15,224 $ 29,318
========== ========== ==========
Net Income Per Share $ 1.27 $ 0.78 --
========== ========== ==========
Weighted Average Number of
Shares Outstanding 20,230,963 19,502,091 --
========== ========== ==========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
Page 43
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Stockholders' Equity (Note 1)
========================================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands)
Accumu-
lated
Capital Distri-
in butions
Common Stock Excess in Excess
------------------- of Par of Net
Shares Amount Value Income Total
========== ======= ======== ========= ========
BALANCE,
December
31, 1992 -- $ -- $486,620 $ (93,202) $393,418
Net Income -- -- -- 29,318 29,318
Distributions
to Partners -- -- -- (40,831) (40,831)
Capital
Contribution -- -- 200 -- 200
Acquisition
of Treasury
Units -- -- (201) -- (201)
---------- ------- -------- --------- --------
BALANCE,
December
31, 1993 -- -- 486,619 (104,715) 381,904
Page 44
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Stockholders' Equity (Note 1)
========================================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands)
Accumu-
lated
Capital Distri-
in butions
Common Stock Excess in Excess
------------------- of Par of Net
Shares Amount Value Income Total
========== ======= ======== ========= ========
Net Income -- -- -- 15,224 15,224
Distributions
to Partners -- -- -- (32,964) (32,964)
Distributions
Paid and
Payable to
Stockholders -- -- -- (14,627) (14,627)
Shares Issued
in Exchange
for Limited
Partnership
Interests 19,502,091 19,502 (19,502) -- --
Payment of
Promissory
Notes and
Fractional
Shares in
Exchange for
Limited
Partnership
Interests -- -- (1,505) -- (1,505)
Notes Payable
Issued in
Exchange for
Limited
Partnership
Interests -- -- (12,616) -- (12,616)
---------- ------- -------- --------- --------
BALANCE,
December
31, 1994 19,502,091 19,502 452,996 (137,082) 335,416
Page 45
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Stockholders' Equity (Note 1)
========================================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands)
Accumu-
lated
Capital Distri-
in butions
Common Stock Excess in Excess
------------------- of Par of Net
Shares Amount Value Income Total
========== ======= ======== ========= ========
Net Income -- -- -- 25,600 25,600
Distributions
Paid and
Payable to
Stockholders -- -- -- (46,192) (46,192)
Shares Issued
in Exchange
for Advisor 990,704 991 20,186 -- 21,177
Shares Retired (57,547) (58) (1,172) -- (1,230)
Shares Issued
in Stock
Offering, net
of offering
costs of
$3,217 2,540,000 2,540 44,090 -- 46,630
Shares Issued
in Exchange
for Limited
Partnership
Interests 989 1 19 -- 20
---------- ------- -------- --------- --------
BALANCE,
December
31, 1995 22,976,237 $22,976 $516,119 $(157,674) $381,421
========== ======= ======== ========= ========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
Page 46
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Cash Flows
=====================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands)
1994 1993
1995 (Note 1) (Note 1)
======== ======== ========
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income $ 25,600 $ 15,224 $ 29,318
Adjustments to Net Income:
Depreciation and Amortization 14,849 13,790 14,689
Net Gain on Sales of Properties (18) (1,165) (3,583)
Provision for Impairment Loss -- 135 935
Noncash Portion of Lease
Settlement -- -- (103)
Proceeds from Sale of Equipment -- -- 9
Changes in Assets and Liabilities
(net of the Merger with
the Advisor):
Change in Accounts Receivable
and Other Assets (1) 980 (2,933)
Change in Other Liabilities (86) 460 (251)
Change in Due to Advisor (32) (964) 404
-------- -------- --------
Net Cash Provided by
Operating Activities 40,312 28,460 38,485
-------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Proceeds from Sales of Properties 617 3,795 26,517
Acquisition of Properties (65,890) (3,485) (2,510)
Payment of Advisor Merger Costs (1,629) -- --
Cash Acquired from Advisor Merger 647 -- --
-------- -------- --------
Net Cash Provided by
(Used in) Investing
Activities (66,255) 310 24,007
-------- -------- --------
Page 47
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Cash Flows
=====================================
Years Ended December 31, 1995, 1994 and 1993
(dollars in thousands)
1994 1993
1995 (Note 1) (Note 1)
======== ======== ========
CASH FLOWS FROM
FINANCING ACTIVITIES:
Payments of Distributions (36,710) (44,666) (40,831)
Proceeds from Lines of Credit 50,600 625 445
Payments of Lines of Credit (44,600) (880) (190)
Proceeds from Stock Offering,
Net of Offering Costs
of $3,217 46,630 -- --
Payments in Lieu of Promissory
Notes and Fractional Shares -- (1,505) --
Capital Contribution -- -- 200
Acquisition and Retirement
of Treasury Units -- -- (201)
-------- -------- --------
Net Cash Provided by
(Used in) Financing
Activities 15,920 (46,426) (40,577)
-------- -------- --------
Net Increase (Decrease) in
Cash and Cash Equivalents (10,023) (17,656) 21,915
Cash and Cash Equivalents,
Beginning of Year 11,673 29,329 7,414
-------- -------- --------
Cash and Cash Equivalents,
End of Year $ 1,650 $ 11,673 $ 29,329
======== ======== ========
For supplemental disclosure of noncash investing and financing
activities, see Note 9.
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
Page 48
REALTY INCOME CORPORATION AND SUBSIDIARIES
Notes To Consolidated Financial Statements
==========================================
December 31, 1995, 1994 and 1993
1. Organization and Operation
Realty Income Corporation (the "Company") was organized in
the state of Delaware on September 9, 1993 to facilitate the
merger, which was effected on August 15, 1994 (the
"Consolidation"), of 10 private and 15 public real estate limited
partnerships (the "Partnerships") with and into the Company. The
Company invests in commercial real estate and has elected to be
taxed as a real estate investment trust ("REIT").
Investors in the Partnerships who elected to invest in the
Company received common stock of the Company totaling 19,503,080
shares. Certain investors elected to receive Variable Rate
Senior Notes (the "Notes") totaling $12.6 million.
The Consolidation was accounted for as a reorganization of
affiliated entities under common control in a manner similar to a
pooling-of-interests. Under this method, the assets and
liabilities of the Partnerships were carried over at their
historical book values and their operations have been recorded on
a combined historical cost basis. The pooling-of-interests
method of accounting also requires the reporting of the results
of operations as though the entities had been combined as of the
beginning of the earliest period presented. Accordingly, the
results of operations for the year ended December 31, 1994
comprise those of the separate entities combined from
January 1, 1994 through August 15, 1994 and those of the Company
from August 16, 1994 through December 31, 1994. Financial
information for 1993 has also been restated on a combined basis
to provide comparative information. Costs incurred to effect the
Consolidation and integrate the continuing operations of the
separate entities were expenses of the Company in the period the
Consolidation was consummated. These expenses include all costs
and expenses incurred in structuring and consummating the
Consolidation. Such costs included, but were not limited to,
fees paid to underwriters, attorneys, and accountants, as well as
costs associated with obtaining a fairness opinion, soliciting
the shareholders, and registering and listing the common stock
and the Notes on the New York Stock Exchange. Prior to the
Consolidation, the Company had no significant operations;
therefore, the combined operations for the periods prior to the
Consolidation represent the operations of the Partnerships. The
Consolidation did not require any material adjustments to conform
the accounting policies of the separate entities to that of the
Company. All intercompany transactions and balances have been
eliminated.
Page 49
1. Organization and Operation (continued)
The results of operations of the previously separate
entities for the periods before the Consolidation was consummated
that are included in the results of operations for the years
ended December 31, 1994 and 1993 follow:
January 1, 1994
through Year Ended
August 15, 1994 December 31, 1993
----------------- -----------------
(dollars in thousands)
Net
Net Income
Entity Income Revenue (Loss) Revenue
====== ======= ======= ======= =======
Northridge Bell, Ltd. $ 15 $ 29 $ 23 $ 44
Tustin Bell, Ltd. 39 47 64 75
Marina Bell, Ltd. 5 7 8 12
Fullerton Commercial
Property, Ltd. 70 73 107 125
Chino Commercial
Property, Ltd. 49 55 70 79
R.I.C. 76, Ltd. 38 52 62 83
R.I.C. 781, Ltd. 50 75 443 150
Garden Grove BYH, Ltd. 14 19 23 30
R.I.C. Associates #1, Ltd. 7 11 11 18
R.I.C. Associates #2, Ltd. 35 55 200 86
R.I.C. 79, Ltd. 299 451 380 607
R.I.C. 81, Ltd. 451 754 565 1,033
R.I.C. 14, Ltd. 664 1,188 951 1,747
R.I.C. 15, Ltd. 142 898 (150) 1,439
R.I.C. 16, Ltd. 811 1,735 1,238 2,814
R.I.C. 17, Ltd. 1,612 3,490 2,345 5,488
R.I.C. 18, Ltd. 531 1,707 972 2,645
R.I.C. 19, Ltd. 1,638 2,537 2,418 4,138
R.I.C. 20, Ltd. 614 1,789 2,701 3,401
R.I.C. 21, Ltd. 1,841 2,978 3,581 4,978
R.I.C. 22, Ltd. 1,472 2,574 2,485 4,104
R.I.C. 23, Ltd. 2,225 3,463 3,802 5,483
R.I.C. 24, Ltd. 1,731 2,737 2,766 4,278
R.I.C. 25, Ltd. 1,934 2,900 3,337 4,873
R.I.C. 26, Ltd. 571 818 916 1,288
------- ------- ------- -------
Combined Results $16,858 $30,442 $29,318 $49,018
======= ======= ======= =======
Page 50
2. Summary of Significant Accounting Policies
Principles of Consolidation - The accompanying consolidated
financial statements include the accounts of the Company and
partnerships more than 50 percent owned (subsidiaries) after
elimination of all material intercompany balances and
transactions.
Cash and Cash Equivalents - The Company considers all short-
term, highly liquid investments that are readily convertible to
cash and have an original maturity of three months or less at the
time of purchase to be cash equivalents.
Depreciation and Amortization - Depreciation of buildings
and improvements and amortization of goodwill are computed using
the straight-line method over an estimated useful life of
approximately 25 years.
Leases - All leases are accounted for as operating leases.
Under this method, lease payments are recognized as revenue over
the term of the lease on a straight line basis.
Income Taxes - Prior to the Consolidation, the Company's
operations were conducted through private and public real estate
limited partnerships. In accordance with partnership taxation,
each partner was responsible for reporting its share of taxable
income. Accordingly, no federal income tax provision has been
made in the accompanying consolidated financial statements prior
to August 16, 1994.
After August 15, 1994, the Company elected to be taxed as a
REIT under the Internal Revenue Code of 1986, as amended.
Management believes the Company has qualified and continues to
qualify as a REIT and therefore will be permitted to deduct
distributions paid to its stockholders, eliminating the federal
taxation of income represented by such distributions at the
Company's level. Accordingly, no provision has been made for
federal income taxes in the accompanying consolidated financial
statements for the period August 16, 1994 through
December 31, 1994 and the year ended December 31, 1995.
Distributions Paid and Payable - For the year ended
December 31, 1995, cash distributions of $1.825 per share were
paid. As of December 31, 1995, three distributions totaling
$0.54 per share were declared and payable. In 1995,
distributions of $1.876 per share are taxable as ordinary income
and $0.093 per share was a return of capital. A portion of the
distributions payable at December 31, 1995, in the amount of
$0.144 per share, is included in the $1.876 per share taxable as
ordinary income and represents the remaining portion of taxable
earnings and profits which were assumed by the Company in the
merger with R.I.C. Advisor, Inc. (the "Advisor"). For the period
Page 51
2. Summary of Significant Accounting Policies (continued)
August 16, 1994 through December 31, 1994, cash distributions of
$0.60 per share were paid and are taxable as ordinary income.
Provision for Impairment Loss - The Company reviews long-
lived assets, including goodwill, for impairment whenever events
or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Provision is made for
impairment loss if estimated future operating cash flows
(undiscounted and without interest charges) over a long-term
holding period plus estimated disposition proceeds (undiscounted)
are less than the current book value. There was no provision for
the year ended December 31, 1995. For the years ended
December 31, 1994 and 1993, a provision of $135,000 and $935,000,
respectively, was charged to operations to reduce the net
carrying value of three investment properties.
Net Income Per Share - Net income per share for 1995 was
calculated based upon the weighted average number of shares
outstanding during the year. Net income per share for 1994 was
calculated assuming 19,502,091 shares of the Company's common
stock were outstanding. Prior to the Consolidation, no shares of
common stock were outstanding. Due to the change in the capital
structure resulting from the Consolidation, the net income per
share information for the year ended December 31, 1993 would not
be meaningful and has not been included.
Reclassifications - Certain of the 1994 and 1993 balances
have been reclassified to conform to 1995 presentation. The
reclassifications had no effect on stockholders' equity or net
income.
Estimates - Management of the Company has made a number of
estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of assets and liabilities to
prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from
those estimates.
3. The Merger of R.I.C. Advisor, Inc.
On August 17, 1995, the Company merged with the Advisor and
issued 990,704 shares of the Company's common stock valued at
approximately $21.2 million (the "Merger"). The Merger was
accounted for using the purchase method. Accordingly, the
purchase price was allocated to assets acquired based on their
estimated fair values. This treatment resulted in approximately
$22.9 million of goodwill. Amortization of goodwill for the year
ended December 31, 1995 was $340,000.
Page 52
3. The Merger of R.I.C. Advisor, Inc. (continued)
The following unaudited pro forma summary presents
information as if the Merger had occurred at the beginning of
each period presented. The pro forma information is provided for
information purposes only. It is based on historical information
and does not necessarily reflect the actual results that would
have occurred nor is it necessarily indicative of future results
of operations of the combined company. The Advisor had several
non-recurring expenses during 1995 and 1994 which negatively
impacted net income and net income per share.
For the Years Ended December 31
(dollars in thousands,
except per share data)
-------------------------------
Pro Forma Pro Forma
1995 1994
(unaudited) (unaudited)
=========== ===========
Revenue $ 51,765 $ 49,244
Net Income $ 24,751 $ 12,932
Net Income Per Share $ 1.22 $ 0.66
4. Credit Facility Available for Acquisitions
In November 1994, the Company obtained a $100 million,
three-year, revolving, unsecured acquisition credit facility from
The Bank of New York, as agent, and several major U.S. and non-
U.S. banks. In December 1995, the credit facility was modified
to (i) increase the borrowing capacity to $130 million from $100
million; (ii) reduce the interest rate to London Interbank
Offered Rate ("LIBOR") plus 1.25% from LIBOR plus 1.375%; and
(iii) extend the credit facility from November 1997 to
November 1998.
The credit facility is subject to various leverage and
interest coverage ratio limitations, all of which the Company was
in compliance with as of December 31, 1995 and 1994. As of
December 31, 1995 and 1994, the outstanding balance on the credit
facility was $6 million and $0, respectively. The effective
interest rate at December 31, 1995 was 7.19%. A commitment fee
of 0.35% or less, per annum, accrues on the average amount of the
unused available credit commitment.
Interest of $217,000 was capitalized on properties under
construction in 1995. No interest was capitalized in 1994.
Page 53
5. Notes Payable
A. In connection with the Consolidation, certain investors
elected to receive Notes totaling $12.6 million. The Notes
mature on June 30, 2001, and the interest rate is adjusted
quarterly. Interest payments are due quarterly and principal is
due at maturity. Interest incurred for the years ended
December 31, 1995 and 1994 was $997,000 and $332,000,
respectively. The interest rate on the Notes at
December 31, 1995 and 1994, was 7.44% and 6.94%, respectively.
On January 2, 1996 the interest rate adjusted to 7.13%.
B. On February 15, 1996, the Company announced its plan to
redeem all of its outstanding Notes. The Notes will be redeemed
at par plus accrued interest to the date of redemption. The
redemption date is scheduled for March 29, 1996.
6. Operating Leases
A. General
At December 31, 1995, the Company owned 685 properties
in 42 states. Of the Company's properties, 675 are single-tenant
locations and the remainder are multi-tenant. At
December 31, 1995, four single-tenant properties were vacant and
available for lease.
Substantially all leases are triple-net leases whereby
the tenant pays all property taxes and assessments, fully
maintains the interior and exterior of the building, and carries
insurance coverage for public liability, property damage, fire,
and extended coverage. The Company's leases are primarily for
initial terms of 15 to 20 years and provide for cost of living
increases and/or increased rent based upon a percentage of the
tenant's sales. Percentage rent for 1995, 1994 and 1993 was $1.6
million, $2.6 million and $1.0 million respectively.
Page 54
6. Operating Leases (continued)
Minimum annual rents to be received on the operating
leases as of December 31, 1995 are as follows (dollars in
thousands):
Years Ending December 31,
=========================
1996 $ 50,828
1997 49,351
1998 48,752
1999 48,363
2000 47,209
2001-2018 261,726
--------
TOTAL $506,229
========
B. Major Tenants
The following schedule presents rental income, including
percentage rents, from tenants representing more than 10% of the
Company's total revenue for at least one of the years ended
December 31, 1995, 1994 or 1993 (dollars in thousands):
Tenant 1995 1994 1993
=============================== ======= ======= =======
Children's World, Inc. $13,121 $12,907 $12,442
La Petite Academy, Inc. 9,189 9,574 8,924
Golden Corral Corporation 6,550 6,362 6,278
Northern Automotive Corporation 4,677 4,931 4,340
7. Net Gain on Sales of Properties
In 1995, the Company sold three properties for a total of
$617,000 and recognized a net gain of $18,000. In 1994, the
Company sold five properties and had three land easement
transactions for a total of $3.8 million and recognized a net
gain of $1.2 million. In 1993, the Company sold six properties,
exchanged one property and had seven land easement transactions
for a total of $26.5 million and recognized a net gain of $3.6
million.
Page 55
8. Financial Instruments
Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," requires
that the Company disclose estimated fair values for its financial
instruments, as well as the methods and significant assumptions
used to estimate fair values. Management of the Company believes
that the carrying values reflected in the balance sheets at
December 31, 1995 and 1994 reasonably approximate the fair values
for cash and cash equivalents, accounts receivable, due from
affiliates and all liabilities. In making such assessments, the
Company utilized estimates and quoted market prices.
9. Supplemental Disclosure of Cash Flow Information
Interest paid during 1995, 1994 and 1993 was $2,186,000,
$354,000 and $5,000, respectively.
The following non-cash investing and financing activities
are included in the accompanying financial statements:
A. Distributions payable totaled $12.4 million and $2.9
million at December 31, 1995 and 1994, respectively.
B. The Merger of the Advisor into the Company on
August 17, 1995 resulted in the following:
(dollars in thousands)
Increases in:
Other Assets $ (1,143)
Goodwill (21,184)
Common Stock retired after the Merger (1,230)
Increases/(Decrease) in:
Other Liabilities 3,029
Due to Advisor (2)
Common Stock 991
Capital in Excess of Par Value 20,186
--------
Cash Acquired from Merger $ 647
========
In 1995, other assets of $95,000 were reclassified to
goodwill. Common stock retired after the Merger includes par
value of common stock and capital in excess of par value of
$58,000 and $1,172,000, respectively.
Page 56
9. Supplemental Disclosure of Cash Flow Information (continued)
C. In 1995, the following increases (decreases) occurred
resulting from exchanges of Notes Payable for Common Stock
(dollars in thousands):
Notes Payable $ (19)
Common Stock 1
Capital in Excess of Par Value 19
D. In 1995, pursuant to the assumption of the defined
benefit pension plan by the Company (Note 11), the Company
recorded a due from affiliate and a liability (included in other
liabilities) of $493,000. This represents the amount of the
increase in the liability to the plan, of which the Company is
indemnified by the former shareholders of the Advisor.
E. In 1994, the following increases occurred resulting from
exchanges of limited partnership units for Notes payable and
Common Stock (dollars in thousands):
Notes Payable $ 12,616
Common Stock 19,502
Capital in Excess of Par Value 452,996
F. In October 1993, the Company regained possession of a
property through foreclosure. The Company held a note on the
property with a net balance of $1.5 million.
10. Related Party Transactions
A. Advisory Agreement
In August 1994, in connection with the Consolidation,
the Company entered into an advisory agreement under which R.I.C.
Advisor, Inc. advised the Company with respect to its investments
and assumed day-to-day management of the Company (the "Advisory
Agreement"). The Advisory Agreement provided for a monthly
advisor fee equal to 0.1189% of the appraised value of the real
estate properties as of the Consolidation date plus the current
book value of the non-real estate assets of the Company. Amounts
incurred under the Advisory Agreement for the period from
January 1, 1995 through August 17, 1995 and August 15, 1994
through December 31, 1994 were $3.7 million and $2.2 million,
respectively. Prior to the Consolidation, the general partners
of the Partnerships received management fees and reimbursements
from the Partnerships (Note 10B). On August 17, 1995, the
Advisor was merged into the Company (Note 3). As part of the
Merger, the Advisory Agreement was terminated.
Page 57
10. Related Party Transactions (continued)
B. Related Party Transactions Prior to the Consolidation
Cash Distributions - The Advisor and William E. and
Evelyn J. Clark, the former general partners of the Partnerships,
collectively, received approximately 1.0% of the Partnerships'
distributions. For the period from January 1, 1994 through
August 15, 1994 and the year ended December 31, 1993, the general
partners' distributions totaled $342,000 and $436,000,
respectively.
Management Fees - The Advisor received management fees
of approximately 1.5% of gross receipts of the Partnerships. For
the period from January 1, 1994 through August 15, 1994 and the
year ended December 31, 1993, management fees totaled $432,000
and $762,000, respectively.
Administrative Expenses - The Advisor received
reimbursements for personnel and overhead costs incurred to
administer the operations of the Partnerships. For the period
from January 1, 1994 through August 15, 1994 and the year ended
December 31, 1993, reimbursements totaled $2.8 million and $4.3
million, respectively.
The administrative expenses and management fees
described in the preceding paragraphs are included in advisor
fees in the accompanying consolidated statements of income.
11. Employee Benefit Plan
As a result of the Merger on August 17, 1995, the Company
assumed a defined benefit pension plan (the "Plan") covering
substantially all of its employees. The Plan's benefit formulas
generally based payments to retired employees upon their length
of service and a percentage of qualifying compensation during the
final years of employment. The Company's funding policy was to
contribute annually the amount necessary to satisfy the Internal
Revenue Service's funding standards. The Plan did not provide
for funding of prior service costs.
The board of directors of the Advisor froze the Plan
effective May 31, 1995. No additional employees were entitled to
enter the Plan after May 31, 1995. For each Plan participant,
the accrued benefit earned under the Plan was frozen as of
May 31, 1995. In October 1995, the Company declared its intent
to terminate the Plan, and the Plan was terminated on
January 2, 1996.
Page 58
11. Employee Benefit Plan (continued)
The following table sets forth the Plan's funded status and
amounts recognized in the Company's financial statements as of
December 31, 1995 (dollars in thousands):
Actuarial Present Value of Benefit Obligations:
Accumulated Benefit Obligation, All Vested $(7,526)
Plan Assets at Fair Value, Primarily Listed
Stock and Cash and Cash Equivalents 5,319
-------
Benefit Obligation in Excess of Plan Assets
(Included in Other Liabilities) $(2,207)
=======
Assumptions Used:
Discount Rates 6.0%
Rates of Increase in Compensation Levels N/A
Expected Long-Term Rates of Return on Assets 8.0%
At December 31, 1995, the benefit obligation in excess of
plan assets is included in other liabilities in the accompanying
balance sheet. In connection with the Merger, the Company
assumed a benefit obligation of $1,714,000. The Merger agreement
provides for indemnification by the former shareholders of the
Advisor with respect to increases in the benefit obligation.
Pursuant to the Merger agreement, an escrow was established to
satisfy certain contingencies, including any potential increases
in the benefit obligation. Therefore, a receivable from the
Advisor's former shareholders has been recorded for $493,000, and
is included as due from affiliates in the accompanying
consolidated balance sheets as of December 31, 1995.
12. Stock Incentive Plan
On September 9, 1993, the board of directors and the
original stockholder of the Company approved a stock incentive
plan (the "Stock Plan") designed to attract and retain directors,
officers and employees of the Company by enabling such
individuals to participate in the ownership of the Company. The
Stock Plan provides for the award (subject to ownership
limitations) of a broad variety of stock-based compensation
alternatives such as nonqualified stock options, incentive stock
options, restricted stock and performance awards.
In August 1994, options were granted to each of the three
independent directors to purchase 10,000 shares of the Company's
stock at an exercise price of $20 per share (the estimated value
of the shares at the date of grant). These options vest during
the directors' continued service periods at a rate of 2,500
shares per year. At December 31, 1995, options to acquire 7,500
shares were vested.
Page 59
13. Commitments and Contingencies
As of December 31, 1995, the Company had entered into
agreements with unrelated parties to acquire two properties to be
purchased under sale/leaseback agreements for an estimated
aggregate amount of $2.3 million and to fund two buildings under
construction on land owned by the Company for an estimated
aggregate amount of $1.3 million.
In the ordinary course of its business, the Company is a
party to various legal actions which the Company believes are
routine in nature and incidental to the operation of the business
of the Company. The Company believes that the outcome of the
proceedings will not have a material adverse effect upon its
operations or financial condition.
Page 60
REALTY INCOME CORPORATION
AND SUBSIDIARIES
CONSOLIDATED QUARTERLY FINANCIAL DATA
(dollars in thousands, except per share data)
(not covered by Independent Auditors' Report)
First Second Third Fourth
1995 Quarter Quarter Quarter Quarter Year
==== ======= ======= ======= ======= =======
Total Revenue $11,928 $12,243 $13,102 $14,282 $51,555
Depreciation and
Amortization
Expense 3,345 3,586 3,863 4,055 14,849
Other Expenses 2,659 2,863 3,098 2,504 11,124
Income from
Operations 5,924 5,794 6,141 7,723 25,582
Net Income 6,001 5,794 6,120 7,685 25,600
Net Income
Per Share 0.31 0.30 0.31 0.35 1.27
1994
====
Total Revenue $12,251 $11,760 $12,177 $12,675 $48,863
Depreciation and
Amortization
Expense 3,464 3,449 3,449 3,428 13,790
Other Expenses
(except Con-
solidation
Costs) 1,959 2,135 2,822 2,897 9,813
Consolidation
Costs (1) -- -- 11,201 -- 11,201
Income (Loss)
from Operations 6,828 6,176 (5,295) 6,350 14,059
Net Income (Loss) 6,643 6,727 (5,295) 7,149 15,224
Net Income
(Loss) Per
Share 0.34 0.34 (0.27) 0.37 0.78
(1) The Consolidation costs expensed in the third quarter of
1994 represent the costs of the Consolidation of the Company and
25 private and public partnerships on August 15, 1994. The
Consolidation was accounted for in a manner similar to a pooling-
of-interests.
Page 61
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Birmingham AL $ 63,800 $ 295,791 None None
La Petite Academy
Huntsville AL 28,600 197,165 None None
La Petite Academy
Mobile AL 78,400 237,671 None None
La Petite Academy
Mobile AL 63,000 292,084 None None
Children's World
Chandler AZ 144,083 668,080 None None
Children's World
Chandler AZ 291,720 647,923 None None
Children's World
Chandler AZ 271,695 603,446 None None
Burger King
Douglas AZ 75,000 347,719 None None
Auto Mall
Glendale AZ 92,709 429,821 None None
La Petite Academy
Glendale AZ 115,000 285,172 None None
Auto Mall
Mesa AZ 271,754 1,259,910 None None
Children's World
Mesa AZ 276,770 590,417 None None
Children's World
Mesa AZ 297,500 660,755 None None
Children's World
Peoria AZ 281,750 625,779 None None
Auto Mall
Phoenix AZ 162,658 754,122 None None
Auto Mall
Phoenix AZ 322,708 1,496,143 185,465 10,462
Checker Autoworks
Phoenix AZ 231,000 513,057 None None
Checker Autoworks
Phoenix AZ 71,750 159,359 None None
Page 62
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Birmingham AL $ 63,800 $ 295,791 $ 359,591
La Petite Academy
Huntsville AL 28,600 197,165 225,765
La Petite Academy
Mobile AL 78,400 237,671 316,071
La Petite Academy
Mobile AL 63,000 292,084 355,084
Children's World
Chandler AZ 144,083 668,080 812,163
Children's World
Chandler AZ 291,720 647,923 939,643
Children's World
Chandler AZ 271,695 603,446 875,141
Burger King
Douglas AZ 75,000 347,719 422,719
Auto Mall
Glendale AZ 92,709 429,821 522,530
La Petite Academy
Glendale AZ 115,000 285,172 400,172
Auto Mall
Mesa AZ 271,754 1,259,910 1,531,664
Children's World
Mesa AZ 276,770 590,417 867,187
Children's World
Mesa AZ 297,500 660,755 958,255
Children's World
Peoria AZ 281,750 625,779 907,529
Auto Mall
Phoenix AZ 162,658 754,122 916,780
Auto Mall
Phoenix AZ 322,708 1,692,070 2,014,778
Checker Autoworks
Phoenix AZ 231,000 513,057 744,057
Checker Autoworks
Phoenix AZ 71,750 159,359 231,109
Page 63
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Birmingham AL $ 175,794 N/A 10/31/84 300
La Petite Academy
Huntsville AL 178,542 N/A 06/15/82 180
La Petite Academy
Mobile AL 209,942 N/A 10/15/82 180
La Petite Academy
Mobile AL 163,334 N/A 04/25/85 300
Children's World
Chandler AZ 304,160 N/A 12/17/86 300
Children's World
Chandler AZ 172,863 N/A 12/11/87 300
Children's World
Chandler AZ 161,104 N/A 12/14/87 300
Burger King
Douglas AZ 177,696 N/A 11/27/85 300
Auto Mall
Glendale AZ 215,970 N/A 01/30/86 300
La Petite Academy
Glendale AZ 226,542 N/A 02/08/84 180
Auto Mall
Mesa AZ 606,057 N/A 06/30/86 300
Children's World
Mesa AZ 143,242 N/A 09/29/88 300
Children's World
Mesa AZ 160,303 N/A 09/29/88 300
Children's World
Peoria AZ 161,943 N/A 03/30/88 300
Auto Mall
Phoenix AZ 378,923 N/A 01/30/86 300
Auto Mall
Phoenix AZ 723,075 N/A 06/30/86 300
Checker Autoworks
Phoenix AZ 138,312 N/A 11/09/87 300
Checker Autoworks
Phoenix AZ 42,960 N/A 11/19/87 300
Page 64
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Checker Autoworks
Phoenix AZ 222,950 495,178 None None
Children's World
Phoenix AZ 318,500 707,397 None None
Kinder-Care
Phoenix AZ 264,504 587,471 None None
Kinder-Care
Phoenix AZ 260,719 516,181 None None
Children's World
Scottsdale AZ 291,993 648,530 None None
Children's World
Tempe AZ 292,200 648,989 None None
Children's World
Tempe AZ 294,000 638,977 None None
Checker Autoworks
Tucson AZ 194,250 431,434 None None
Children's World
Tucson AZ 304,500 676,303 None None
Children's World
Tucson AZ 283,500 546,878 None None
Discount Tire
Store
Tucson AZ 178,297 396,005 None None
Taco Bell
Tucson AZ 107,393 497,904 None None
Discount Tire
Store
Yuma AZ 120,750 268,190 None None
Children's World
Calabasas CA 156,430 725,248 None None
Children's World
Carmichael CA 131,035 607,507 None None
Levitz Furniture
Cathedral
City CA 1,006,923 2,293,077 None None
Page 65
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Checker Autoworks
Phoenix AZ 222,950 495,178 718,128
Children's World
Phoenix AZ 318,500 707,397 1,025,897
Kinder-Care
Phoenix AZ 264,504 587,471 851,975
Kinder-Care
Phoenix AZ 260,719 516,181 776,900
Children's World
Scottsdale AZ 291,993 648,530 940,523
Children's World
Tempe AZ 292,200 648,989 941,189
Children's World
Tempe AZ 294,000 638,977 932,977
Checker Autoworks
Tucson AZ 194,250 431,434 625,684
Children's World
Tucson AZ 304,500 676,303 980,803
Children's World
Tucson AZ 283,500 546,878 830,378
Discount Tire
Store
Tucson AZ 178,297 396,005 574,302
Taco Bell
Tucson AZ 107,393 497,904 605,297
Discount Tire
Store
Yuma AZ 120,750 268,190 388,940
Children's World
Calabasas CA 156,430 725,248 881,678
Children's World
Carmichael CA 131,035 607,507 738,542
Levitz Furniture
Cathedral
City CA 1,006,923 2,293,077 3,300,000
Page 66
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Checker Autoworks
Phoenix AZ 103,390 N/A 11/02/89 300
Children's World
Phoenix AZ 171,619 N/A 09/29/88 300
Kinder-Care
Phoenix AZ 109,327 N/A 06/29/90 300
Kinder-Care
Phoenix AZ 87,741 N/A 12/26/90 300
Children's World
Scottsdale AZ 173,080 N/A 12/14/87 300
Children's World
Tempe AZ 167,950 N/A 03/10/88 300
Children's World
Tempe AZ 121,487 N/A 09/27/90 300
Checker Autoworks
Tucson AZ 117,471 N/A 10/30/87 300
Children's World
Tucson AZ 164,076 N/A 09/28/88 300
Children's World
Tucson AZ 132,676 N/A 09/29/88 300
Discount Tire
Store
Tucson AZ 79,018 N/A 01/19/90 300
Taco Bell
Tucson AZ 250,615 N/A 01/17/86 300
Discount Tire
Store
Yuma AZ 53,514 N/A 01/23/90 300
Children's World
Calabasas CA 376,837 N/A 09/26/85 300
Children's World
Carmichael CA 287,017 N/A 08/22/86 300
Levitz Furniture
Cathedral
City CA 57,327 N/A 05/26/95 300
Page 67
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Chino CA 155,000 634,071 None None
Chino Commercial
Center
Chino CA 80,000 154,303 None None
Children's World
Chula Vista CA 350,563 778,614 None None
Levitz Furniture
Concord CA 4,162,500 3,037,500 None None
Children's World
Corona CA 144,856 671,585 None None
Pizza Hut
Diamond Bar CA 76,117 183,052 None 15,000
Children's World
El Cajon CA 157,804 731,621 None None
Children's World
Encinitas CA 320,000 710,729 None None
La Petite Academy
Escondido CA 276,286 613,638 None None
The Fitness Club
& More
Escondido CA 332,500 904,690 135,826 61,140
La Petite Academy
Folsom CA 281,563 625,363 None None
Medical 21
Fresno CA 428,900 3,434,562 None None
Fullerton Commer-
cial Center
Fullerton CA 112,791 158,545 None 26,561
Kragen Autoworks
Grass Valley CA 325,000 384,955 None None
Der Wiener-
schnitzel
Hemet CA 106,164 199,179 None None
Kragen Autoworks
Jackson CA 300,000 390,849 None None
Page 68
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Chino CA 155,000 634,071 789,071
Chino Commercial
Center
Chino CA 80,000 154,303 234,303
Children's World
Chula Vista CA 350,563 778,614 1,129,177
Levitz Furniture
Concord CA 4,162,500 3,037,500 7,200,000
Children's World
Corona CA 144,856 671,585 816,441
Pizza Hut
Diamond Bar CA 76,117 198,052 274,169
Children's World
El Cajon CA 157,804 731,621 889,425
Children's World
Encinitas CA 320,000 710,729 1,030,729
La Petite Academy
Escondido CA 276,286 613,638 889,924
The Fitness Club
& More
Escondido CA 332,500 1,101,656 1,434,156
La Petite Academy
Folsom CA 281,563 625,363 906,926
Medical 21
Fresno CA 428,900 3,434,562 3,863,462
Fullerton Commer-
cial Center
Fullerton CA 112,791 185,106 297,897
Kragen Autoworks
Grass Valley CA 325,000 384,955 709,955
Der Wiener-
schnitzel
Hemet CA 106,164 199,179 305,343
Kragen Autoworks
Jackson CA 300,000 390,849 690,849
Page 69
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Chino CA 517,715 N/A 10/06/83 180
Chino Commercial
Center
Chino CA 151,689 N/A 06/23/75 300
Children's World
Chula Vista CA 212,003 N/A 10/30/87 300
Levitz Furniture
Concord CA 75,938 N/A 05/31/95 300
Children's World
Corona CA 392,817 N/A 12/19/84 300
Pizza Hut
Diamond Bar CA 159,733 N/A 09/25/78 300
Children's World
El Cajon CA 370,748 N/A 12/19/85 300
Children's World
Encinitas CA 189,681 N/A 12/29/87 300
La Petite Academy
Escondido CA 163,767 N/A 12/31/87 300
The Fitness Club
& More
Escondido CA 281,106 N/A 01/11/84 180
La Petite Academy
Folsom CA 171,821 N/A 10/23/87 300
Medical 21
Fresno CA 3,017,477 N/A 10/29/82 180
Fullerton Commer-
cial Center
Fullerton CA 164,563 N/A 11/08/72 300
Kragen Autoworks
Grass Valley CA 95,324 N/A 05/20/88 300
Der Wiener-
schnitzel
Hemet CA 176,724 N/A 04/15/77 300
Kragen Autoworks
Jackson CA 92,150 N/A 05/17/88 300
Page 70
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Mission Viejo CA 353,891 744,367 None None
Children's World
Moreno Valley CA 304,489 676,214 None None
Children's World
Oceanside CA 145,568 674,889 None None
La Petite Academy
Palmdale CA 249,490 554,125 None None
Pay N Play
Paramount CA 86,400 278,827 None None
La Petite Academy
R. Cordova CA 276,328 613,733 None None
Children's World
R. Cucamonga CA 471,733 1,047,739 None None
Sizzler
R. Cucamonga CA 230,733 481,225 None None
Taco Bell
R. Cucamonga CA 95,192 441,334 None None
Golden Corral
Red Bluff CA 136,740 633,984 None None
Der Wiener-
schnitzel
Riverside CA 90,000 170,394 None None
Vacant
Riverside CA 225,795 534,679 None 21,560
La Petite Academy
Roseville CA 297,343 660,412 None None
Children's World
Sacramento CA 290,734 645,731 None None
Kragen Autoworks
Sacramento CA 210,000 466,419 None None
Empire Business
Center
San Diego CA 5,797,411 15,311,772 None 122,143
R.I.C. Trade Ctr
San Diego CA 3,745,000 8,777,176 None 62,826
Page 71
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Mission Viejo CA 353,891 744,367 1,098,258
Children's World
Moreno Valley CA 304,489 676,214 980,703
Children's World
Oceanside CA 145,568 674,889 820,457
La Petite Academy
Palmdale CA 249,490 554,125 803,615
Pay N Play
Paramount CA 86,400 278,827 365,227
La Petite Academy
R. Cordova CA 276,328 613,733 890,061
Children's World
R. Cucamonga CA 471,733 1,047,739 1,519,472
Sizzler
R. Cucamonga CA 230,733 481,225 711,958
Taco Bell
R. Cucamonga CA 95,192 441,334 536,526
Golden Corral
Red Bluff CA 136,740 633,984 770,724
Der Wiener-
schnitzel
Riverside CA 90,000 170,394 260,394
Vacant
Riverside CA 225,795 556,239 782,034
La Petite Academy
Roseville CA 297,343 660,412 957,755
Children's World
Sacramento CA 290,734 645,731 936,465
Kragen Autoworks
Sacramento CA 210,000 466,419 676,419
Empire Business
Center
San Diego CA 5,797,411 15,433,915 21,231,326
R.I.C. Trade Ctr
San Diego CA 3,745,000 8,840,002 12,585,002
Page 72
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Mission Viejo CA 94,597 N/A 06/24/93 300
Children's World
Moreno Valley CA 198,741 N/A 02/11/87 300
Children's World
Oceanside CA 341,999 N/A 12/23/85 300
La Petite Academy
Palmdale CA 134,434 N/A 09/14/88 300
Pay N Play
Paramount CA 224,993 N/A 11/22/83 180
La Petite Academy
R. Cordova CA 138,977 N/A 03/23/89 300
Children's World
R. Cucamonga CA 279,624 N/A 12/30/87 300
Sizzler
R. Cucamonga CA 467,814 N/A 04/03/81 180
Taco Bell
R. Cucamonga CA 223,646 N/A 12/20/85 300
Golden Corral
Red Bluff CA 288,639 N/A 12/18/86 300
Der Wiener-
schnitzel
Riverside CA 153,582 N/A 12/09/76 300
Vacant
Riverside CA 168,049 N/A 10/01/81 180
La Petite Academy
Roseville CA 181,439 N/A 10/22/87 300
Children's World
Sacramento CA 175,820 N/A 10/05/87 300
Kragen Autoworks
Sacramento CA 125,738 N/A 11/25/87 300
Empire Business
Center
San Diego CA 3,899,649 01/20/89 08/05/87 300
R.I.C. Trade Ctr
San Diego CA 4,208,641 03/08/86 03/25/86 300
Page 73
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Silverton
Business Center
San Diego CA 2,485,160 8,595,722 None 52,100
Sizzler
San Dimas CA 240,562 445,521 None None
Garcia's
San Ramon CA 406,000 1,126,930 None None
La Petite Academy
Santee CA 248,418 551,748 None None
Children's World
Simi Valley CA 208,585 967,055 None None
Kragen Autoworks
Turlock CA 222,250 493,627 None None
La Petite Academy
Valencia CA 301,295 669,185 None None
Children's World
Walnut CA 217,365 1,007,753 None None
Children's World
Aurora CO 141,811 657,497 None None
Children's World
Aurora CO 287,000 637,440 None None
Children's World
Aurora CO 301,455 655,609 None None
Discount Tire
Store
Aurora CO 221,691 492,382 None None
Wrangler 2
Boulder CO 426,675 822,676 18,000 None
Children's World
Broomfield CO 107,000 403,080 None None
La Petite Academy
Broomfield CO 155,306 344,941 None None
Checker Autoworks
Canon City CO 66,500 147,699 None None
Children's World
Co. Springs CO 115,542 535,700 None None
Page 74
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Silverton
Business Center
San Diego CA 2,485,160 8,647,822 11,132,982
Sizzler
San Dimas CA 240,562 445,521 686,083
Garcia's
San Ramon CA 406,000 1,126,930 1,532,930
La Petite Academy
Santee CA 248,418 551,748 800,166
Children's World
Simi Valley CA 208,585 967,055 1,175,640
Kragen Autoworks
Turlock CA 222,250 493,627 715,877
La Petite Academy
Valencia CA 301,295 669,185 970,480
Children's World
Walnut CA 217,365 1,007,753 1,225,118
Children's World
Aurora CO 141,811 657,497 799,308
Children's World
Aurora CO 287,000 637,440 924,440
Children's World
Aurora CO 301,455 655,609 957,064
Discount Tire
Store
Aurora CO 221,691 492,382 714,073
Wrangler 2
Boulder CO 426,675 840,676 1,267,351
Children's World
Broomfield CO 107,000 403,080 510,080
La Petite Academy
Broomfield CO 155,306 344,941 500,247
Checker Autoworks
Canon City CO 66,500 147,699 214,199
Children's World
Co. Springs CO 115,542 535,700 651,242
Page 75
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Silverton
Business Center
San Diego CA 2,415,097 01/23/89 09/19/86 300
Sizzler
San Dimas CA 436,610 N/A 03/12/81 180
Garcia's
San Ramon CA 907,734 N/A 12/08/83 180
La Petite Academy
Santee CA 154,703 N/A 07/23/87 300
Children's World
Simi Valley CA 490,058 N/A 12/20/85 300
Kragen Autoworks
Turlock CA 131,741 N/A 12/30/87 300
La Petite Academy
Valencia CA 167,762 N/A 06/23/88 300
Children's World
Walnut CA 476,114 N/A 08/22/86 300
Children's World
Aurora CO 324,734 N/A 03/25/86 300
Children's World
Aurora CO 170,120 N/A 12/31/87 300
Children's World
Aurora CO 185,180 N/A 09/27/89 300
Discount Tire
Store
Aurora CO 98,249 N/A 01/29/90 300
Wrangler 2
Boulder CO 667,125 N/A 01/05/84 180
Children's World
Broomfield CO 349,205 N/A 01/12/83 180
La Petite Academy
Broomfield CO 89,267 N/A 03/15/88 300
Checker Autoworks
Canon City CO 39,817 N/A 11/12/87 300
Children's World
Co. Springs CO 246,103 N/A 12/04/86 300
Page 76
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Discount Tire
Store
Co. Springs CO 280,193 622,317 None None
Discount Tire
Store
Co. Springs CO 192,988 433,542 None None
Hardee's
Co. Springs CO 152,000 704,736 None None
Hardee's
Co. Springs CO 313,250 695,730 None None
La Petite Academy
Co. Springs CO 58,400 271,217 None None
La Petite Academy
Co. Springs CO 92,570 241,413 None None
Checker Autoworks
Denver CO 141,400 314,056 None None
Checker Autoworks
Denver CO 315,000 699,623 None None
Checker Autoworks
Denver CO 283,500 629,666 None None
Jiffy Lube
Denver CO 79,717 369,586 None None
Children's World
Englewood CO 131,216 608,372 None None
Children's World
Englewood CO 158,651 735,571 None None
Children's World
Fort Collins CO 117,105 542,950 None None
Children's World
Fort Collins CO 137,734 638,594 None None
La Petite Academy
Fort Collins CO 55,200 256,356 None None
La Petite Academy
Greeley CO 58,400 270,755 None None
Checker Autoworks
Littleton CO 252,925 561,759 None None
Page 77
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Discount Tire
Store
Co. Springs CO 280,193 622,317 902,510
Discount Tire
Store
Co. Springs CO 192,988 433,542 626,530
Hardee's
Co. Springs CO 152,000 704,736 856,736
Hardee's
Co. Springs CO 313,250 695,730 1,008,980
La Petite Academy
Co. Springs CO 58,400 271,217 329,617
La Petite Academy
Co. Springs CO 92,570 241,413 333,983
Checker Autoworks
Denver CO 141,400 314,056 455,456
Checker Autoworks
Denver CO 315,000 699,623 1,014,623
Checker Autoworks
Denver CO 283,500 629,666 913,166
Jiffy Lube
Denver CO 79,717 369,586 449,303
Children's World
Englewood CO 131,216 608,372 739,588
Children's World
Englewood CO 158,651 735,571 894,222
Children's World
Fort Collins CO 117,105 542,950 660,055
Children's World
Fort Collins CO 137,734 638,594 776,328
La Petite Academy
Fort Collins CO 55,200 256,356 311,556
La Petite Academy
Greeley CO 58,400 270,755 329,155
Checker Autoworks
Littleton CO 252,925 561,759 814,684
Page 78
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Discount Tire
Store
Co. Springs CO 124,175 N/A 01/23/90 300
Discount Tire
Store
Co. Springs CO 47,645 N/A 05/20/93 300
Hardee's
Co. Springs CO 329,925 N/A 09/30/86 300
Hardee's
Co. Springs CO 202,596 N/A 03/10/87 300
La Petite Academy
Co. Springs CO 234,335 N/A 12/22/82 180
La Petite Academy
Co. Springs CO 199,744 N/A 08/31/83 180
Checker Autoworks
Denver CO 84,663 N/A 11/18/87 300
Checker Autoworks
Denver CO 177,277 N/A 05/16/88 300
Checker Autoworks
Denver CO 159,551 N/A 05/27/88 300
Jiffy Lube
Denver CO 191,972 N/A 10/08/85 300
Children's World
Englewood CO 279,489 N/A 12/05/86 300
Children's World
Englewood CO 334,887 N/A 12/29/86 300
Children's World
Fort Collins CO 268,158 N/A 03/25/86 300
Children's World
Fort Collins CO 315,397 N/A 03/25/86 300
La Petite Academy
Fort Collins CO 221,829 N/A 12/22/82 180
La Petite Academy
Greeley CO 159,701 N/A 11/21/84 300
Checker Autoworks
Littleton CO 146,891 N/A 02/12/88 300
Page 79
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Littleton CO 287,000 637,435 None None
Children's World
Littleton CO 299,250 664,642 None None
La Petite Academy
Littleton CO 161,617 358,956 None None
Children's World
Longmont CO 115,592 535,931 None None
La Petite Academy
Louisville CO 58,089 269,313 None None
Golden Corral
Montrose CO 217,595 483,284 None None
La Petite Academy
Parker CO 153,551 341,043 None None
Discount Tire
Store
Pueblo CO 196,994 437,530 None None
Hardee's
Security CO 150,000 695,463 None None
Golden Corral
Sterling CO 95,320 441,928 None None
Children's World
Westminster CO 306,387 695,737 None None
La Estrellita
Enterprises
Westminster CO 338,940 1,571,401 20,000 13,440
Dairy Mart
Manchester CT 118,262 305,510 None None
Dairy Mart
Vernon CT 179,646 319,372 None None
Dairy Mart
Westbrook CT 98,247 373,340 None None
La Petite Academy
Bradenton FL 160,060 355,501 None None
Sizzler
Casselberry FL 403,900 897,075 None None
Page 80
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Littleton CO 287,000 637,435 924,435
Children's World
Littleton CO 299,250 664,642 963,892
La Petite Academy
Littleton CO 161,617 358,956 520,573
Children's World
Longmont CO 115,592 535,931 651,523
La Petite Academy
Louisville CO 58,089 269,313 327,402
Golden Corral
Montrose CO 217,595 483,284 700,879
La Petite Academy
Parker CO 153,551 341,043 494,594
Discount Tire
Store
Pueblo CO 196,994 437,530 634,524
Hardee's
Security CO 150,000 695,463 845,463
Golden Corral
Sterling CO 95,320 441,928 537,248
Children's World
Westminster CO 306,387 695,737 1,002,124
La Estrellita
Enterprises
Westminster CO 338,940 1,604,841 1,943,781
Dairy Mart
Manchester CT 118,262 305,510 423,772
Dairy Mart
Vernon CT 179,646 319,372 499,018
Dairy Mart
Westbrook CT 98,247 373,340 471,587
La Petite Academy
Bradenton FL 160,060 355,501 515,561
Sizzler
Casselberry FL 403,900 897,075 1,300,975
Page 81
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Littleton CO 154,646 N/A 09/29/88 300
Children's World
Littleton CO 161,247 N/A 09/29/88 300
La Petite Academy
Littleton CO 95,795 N/A 12/10/87 300
Children's World
Longmont CO 264,693 N/A 03/25/86 300
La Petite Academy
Louisville CO 164,883 N/A 06/22/84 300
Golden Corral
Montrose CO 128,979 N/A 12/16/87 300
La Petite Academy
Parker CO 93,696 N/A 10/19/87 300
Discount Tire
Store
Pueblo CO 87,303 N/A 01/26/90 300
Hardee's
Security CO 325,585 N/A 09/30/86 300
Golden Corral
Sterling CO 258,685 N/A 12/27/84 300
Children's World
Westminster CO 175,366 N/A 09/27/89 300
La Estrellita
Enterprises
Westminster CO 974,497 N/A 06/28/84 300
Dairy Mart
Manchester CT 9,675 N/A 03/03/95 300
Dairy Mart
Vernon CT 10,113 N/A 03/09/95 300
Dairy Mart
Westbrook CT 11,822 N/A 03/09/95 300
La Petite Academy
Bradenton FL 90,082 N/A 05/05/88 300
Sizzler
Casselberry FL 172,779 N/A 12/20/89 300
Page 82
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Clearwater FL 42,223 269,380 None None
La Petite Academy
Fort Myers FL 66,100 210,462 None None
Golden Corral
Green Cove
Springs FL 86,240 399,828 None None
Arby's
Jacksonville FL 150,210 693,446 None None
Arby's
Jacksonville FL 143,299 664,373 None None
Jiffy Lube
Jacksonville FL 76,585 355,066 None None
La Petite Academy
Jacksonville FL 38,500 228,481 None None
La Petite Academy
Jacksonville FL 48,000 243,060 None None
La Petite Academy
Jacksonville FL 184,800 410,447 None None
La Petite Academy
Jupiter FL 78,000 360,088 None None
Jiffy Lube
Lauderdale
Lakes FL 65,987 305,931 None None
La Petite Academy
Margate FL 66,686 309,183 None None
La Petite Academy
Melbourne FL 256,439 549,345 None None
La Petite Academy
Niceville FL 73,696 341,688 None None
La Petite Academy
Orange Park FL 45,000 208,986 None None
La Petite Academy
Orlando FL 68,001 313,922 None None
La Petite Academy
Orlando FL 159,177 353,538 None None
Page 83
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Clearwater FL 42,223 269,380 311,603
La Petite Academy
Fort Myers FL 66,100 210,462 276,562
Golden Corral
Green Cove
Springs FL 86,240 399,828 486,068
Arby's
Jacksonville FL 150,210 693,446 843,656
Arby's
Jacksonville FL 143,299 664,373 807,672
Jiffy Lube
Jacksonville FL 76,585 355,066 431,651
La Petite Academy
Jacksonville FL 38,500 228,481 266,981
La Petite Academy
Jacksonville FL 48,000 243,060 291,060
La Petite Academy
Jacksonville FL 184,800 410,447 595,247
La Petite Academy
Jupiter FL 78,000 360,088 438,088
Jiffy Lube
Lauderdale
Lakes FL 65,987 305,931 371,918
La Petite Academy
Margate FL 66,686 309,183 375,869
La Petite Academy
Melbourne FL 256,439 549,345 805,784
La Petite Academy
Niceville FL 73,696 341,688 415,384
La Petite Academy
Orange Park FL 45,000 208,986 253,986
La Petite Academy
Orlando FL 68,001 313,922 381,923
La Petite Academy
Orlando FL 159,177 353,538 512,715
Page 84
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Clearwater FL 251,422 N/A 12/22/81 180
La Petite Academy
Fort Myers FL 190,585 N/A 06/15/82 180
Golden Corral
Green Cove
Springs FL 234,041 N/A 12/19/84 300
Arby's
Jacksonville FL 363,087 N/A 09/13/85 300
Arby's
Jacksonville FL 339,403 N/A 12/13/85 300
Jiffy Lube
Jacksonville FL 179,932 N/A 12/23/85 300
La Petite Academy
Jacksonville FL 213,249 N/A 12/22/81 180
La Petite Academy
Jacksonville FL 226,856 N/A 12/22/81 180
La Petite Academy
Jacksonville FL 92,944 N/A 03/30/89 300
La Petite Academy
Jupiter FL 188,539 N/A 09/11/85 300
Jiffy Lube
Lauderdale
Lakes FL 152,411 N/A 02/19/86 300
La Petite Academy
Margate FL 140,765 N/A 12/16/86 300
La Petite Academy
Melbourne FL 71,143 N/A 04/16/93 300
La Petite Academy
Niceville FL 156,965 N/A 12/03/86 300
La Petite Academy
Orange Park FL 189,247 N/A 06/15/82 180
La Petite Academy
Orlando FL 164,366 N/A 09/04/85 300
La Petite Academy
Orlando FL 99,126 N/A 07/02/87 300
Page 85
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Orlando FL 245,249 544,704 None None
La Petite Academy
Orlando FL 190,050 422,107 None None
Sizzler
Orlando FL 230,000 1,066,339 None None
Sizzler
Orlando FL 209,800 972,679 None None
Taco Bell
Orlando FL 339,500 746,333 None None
La Petite Academy
Oviedo FL 166,409 369,598 None None
La Petite Academy
Panama City FL 69,500 244,314 None None
La Petite Academy
Pensacola FL 147,000 326,492 None None
La Petite Academy
Royal Palm
Beach FL 194,193 431,309 None None
Jiffy Lube
Seminole FL 68,000 315,266 None None
La Petite Academy
Spring Hill FL 146,939 326,356 None None
La Petite Academy
St. Augustine FL 44,800 213,040 None None
Jiffy Lube
Sunrise FL 80,253 372,069 None None
La Petite Academy
Sunrise FL 69,400 246,671 None None
La Petite Academy
Sunrise FL 245,000 533,280 None None
La Petite Academy
Tallahassee FL 66,000 232,010 None None
Jiffy Lube
Tampa FL 67,000 310,629 None None
Page 86
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Orlando FL 245,249 544,704 789,953
La Petite Academy
Orlando FL 190,050 422,107 612,157
Sizzler
Orlando FL 230,000 1,066,339 1,296,339
Sizzler
Orlando FL 209,800 972,679 1,182,479
Taco Bell
Orlando FL 339,500 746,333 1,085,833
La Petite Academy
Oviedo FL 166,409 369,598 536,007
La Petite Academy
Panama City FL 69,500 244,314 313,814
La Petite Academy
Pensacola FL 147,000 326,492 473,492
La Petite Academy
Royal Palm
Beach FL 194,193 431,309 625,502
Jiffy Lube
Seminole FL 68,000 315,266 383,266
La Petite Academy
Spring Hill FL 146,939 326,356 473,295
La Petite Academy
St. Augustine FL 44,800 213,040 257,840
Jiffy Lube
Sunrise FL 80,253 372,069 452,322
La Petite Academy
Sunrise FL 69,400 246,671 316,071
La Petite Academy
Sunrise FL 245,000 533,280 778,280
La Petite Academy
Tallahassee FL 66,000 232,010 298,010
Jiffy Lube
Tampa FL 67,000 310,629 377,629
Page 87
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Orlando FL 145,369 N/A 12/10/87 300
La Petite Academy
Orlando FL 95,584 N/A 03/30/89 300
Sizzler
Orlando FL 544,935 N/A 11/18/85 300
Sizzler
Orlando FL 463,553 N/A 08/15/86 300
Taco Bell
Orlando FL 195,154 N/A 02/03/88 300
La Petite Academy
Oviedo FL 99,629 N/A 11/20/87 300
La Petite Academy
Panama City FL 221,239 N/A 06/15/82 180
La Petite Academy
Pensacola FL 73,933 N/A 03/28/89 300
La Petite Academy
Royal Palm
Beach FL 102,315 N/A 11/15/88 300
Jiffy Lube
Seminole FL 159,762 N/A 12/23/85 300
La Petite Academy
Spring Hill FL 87,971 N/A 11/24/87 300
La Petite Academy
St. Augustine FL 198,838 N/A 12/22/81 180
Jiffy Lube
Sunrise FL 186,891 N/A 02/14/86 300
La Petite Academy
Sunrise FL 223,373 N/A 06/15/82 180
La Petite Academy
Sunrise FL 123,385 N/A 05/25/89 300
La Petite Academy
Tallahassee FL 210,097 N/A 06/15/82 180
Jiffy Lube
Tampa FL 157,412 N/A 12/27/85 300
Page 88
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Jiffy Lube
Tampa FL 70,000 324,538 None None
Jiffy Lube
Tampa FL 86,502 401,041 None None
La Petite Academy
Tampa FL 53,385 199,846 None None
Levitz Furniture
Winter Park FL 2,404,598 3,382,402 None None
Jiffy Lube
Atlanta GA 55,840 258,889 None None
Jiffy Lube
Atlanta GA 78,646 364,625 None None
Minit Lube
Bogart GA 66,807 309,732 None None
La Petite Academy
Douglasville GA 54,000 250,356 None None
Children's World
Dunwoody GA 318,500 707,399 None None
La Petite Academy
Ellenwood GA 119,678 275,414 None None
La Petite Academy
Fayetteville GA 148,400 329,601 None None
Minit Lube
Gainesville GA 53,589 248,452 None None
Taco Bell
Garden City GA 197,225 438,043 None None
Golden Corral
Hinesville GA 89,220 413,644 None None
Taco Bell
Hinesville GA 172,611 383,376 None None
La Petite Academy
Lawrenceville GA 141,449 314,161 None None
Children's World
Lilburn GA 116,350 539,488 None None
La Petite Academy
Lithia Springs GA 187,444 363,358 None None
Page 89
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Jiffy Lube
Tampa FL 70,000 324,538 394,538
Jiffy Lube
Tampa FL 86,502 401,041 487,543
La Petite Academy
Tampa FL 53,385 199,846 253,231
Levitz Furniture
Winter Park FL 2,404,598 3,382,402 5,787,000
Jiffy Lube
Atlanta GA 55,840 258,889 314,729
Jiffy Lube
Atlanta GA 78,646 364,625 443,271
Minit Lube
Bogart GA 66,807 309,732 376,539
La Petite Academy
Douglasville GA 54,000 250,356 304,356
Children's World
Dunwoody GA 318,500 707,399 1,025,899
La Petite Academy
Ellenwood GA 119,678 275,414 395,092
La Petite Academy
Fayetteville GA 148,400 329,601 478,001
Minit Lube
Gainesville GA 53,589 248,452 302,041
Taco Bell
Garden City GA 197,225 438,043 635,268
Golden Corral
Hinesville GA 89,220 413,644 502,864
Taco Bell
Hinesville GA 172,611 383,376 555,987
La Petite Academy
Lawrenceville GA 141,449 314,161 455,610
Children's World
Lilburn GA 116,350 539,488 655,838
La Petite Academy
Lithia Springs GA 187,444 363,358 550,802
Page 90
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Jiffy Lube
Tampa FL 164,460 N/A 12/27/85 300
Jiffy Lube
Tampa FL 191,191 N/A 07/23/86 300
La Petite Academy
Tampa FL 186,523 N/A 12/22/81 180
Levitz Furniture
Winter Park FL 84,560 N/A 05/31/95 300
Jiffy Lube
Atlanta GA 132,302 N/A 11/27/85 300
Jiffy Lube
Atlanta GA 184,775 N/A 12/18/85 300
Minit Lube
Bogart GA 156,959 N/A 12/20/85 300
La Petite Academy
Douglasville GA 148,808 N/A 10/23/84 300
Children's World
Dunwoody GA 167,808 N/A 11/16/88 300
La Petite Academy
Ellenwood GA 65,333 N/A 11/16/88 300
La Petite Academy
Fayetteville GA 74,637 N/A 03/29/89 300
Minit Lube
Gainesville GA 125,902 N/A 12/19/85 300
Taco Bell
Garden City GA 98,013 N/A 04/20/89 300
Golden Corral
Hinesville GA 242,125 N/A 12/20/84 300
Taco Bell
Hinesville GA 102,317 N/A 12/22/87 300
La Petite Academy
Lawrenceville GA 77,911 N/A 07/07/88 300
Children's World
Lilburn GA 245,616 N/A 12/23/86 300
La Petite Academy
Lithia Springs GA 79,629 N/A 12/28/89 300
Page 91
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Golden Corral
Lithonia GA 89,220 413,647 None None
La Petite Academy
Lithonia GA 239,715 524,459 None None
Children's World
Marietta GA 231,000 513,061 None None
Children's World
Marietta GA 273,000 619,076 None None
Children's World
Marietta GA 292,250 649,095 None None
Children's World
Marietta GA 295,750 596,299 None None
Children's World
Marietta GA 301,000 668,529 None None
Jiffy Lube
Marietta GA 60,900 293,461 None None
Jiffy Lube
Marietta GA 69,561 346,024 None None
La Petite Academy
Marietta GA 148,620 330,090 None None
La Petite Academy
Martinez GA 141,153 313,504 None None
Minit Lube
Riverdale GA 58,444 270,961 None None
Minit Lube
Rome GA 56,454 261,733 None None
Taco Bell
Savannah GA 143,993 345,548 None None
Taco Bell
Savannah GA 165,409 367,379 None None
Children's World
Smyrna GA 274,750 610,229 None None
Taco Bell
Statesboro GA 201,250 446,983 None None
La Petite Academy
Stockbridge GA 168,700 374,688 None None
Page 92
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Golden Corral
Lithonia GA 89,220 413,647 502,867
La Petite Academy
Lithonia GA 239,715 524,459 764,174
Children's World
Marietta GA 231,000 513,061 744,061
Children's World
Marietta GA 273,000 619,076 892,076
Children's World
Marietta GA 292,250 649,095 941,345
Children's World
Marietta GA 295,750 596,299 892,049
Children's World
Marietta GA 301,000 668,529 969,529
Jiffy Lube
Marietta GA 60,900 293,461 354,361
Jiffy Lube
Marietta GA 69,561 346,024 415,585
La Petite Academy
Marietta GA 148,620 330,090 478,710
La Petite Academy
Martinez GA 141,153 313,504 454,657
Minit Lube
Riverdale GA 58,444 270,961 329,405
Minit Lube
Rome GA 56,454 261,733 318,187
Taco Bell
Savannah GA 143,993 345,548 489,541
Taco Bell
Savannah GA 165,409 367,379 532,788
Children's World
Smyrna GA 274,750 610,229 884,979
Taco Bell
Statesboro GA 201,250 446,983 648,233
La Petite Academy
Stockbridge GA 168,700 374,688 543,388
Page 93
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Golden Corral
Lithonia GA 242,058 N/A 01/04/85 300
La Petite Academy
Lithonia GA 111,296 N/A 08/20/91 300
Children's World
Marietta GA 132,773 N/A 03/18/88 300
Children's World
Marietta GA 158,538 N/A 04/26/88 300
Children's World
Marietta GA 152,228 N/A 12/02/88 300
Children's World
Marietta GA 139,847 N/A 12/30/88 300
Children's World
Marietta GA 156,785 N/A 12/30/88 300
Jiffy Lube
Marietta GA 148,710 N/A 12/26/85 300
Jiffy Lube
Marietta GA 167,875 N/A 06/03/86 300
La Petite Academy
Marietta GA 80,103 N/A 09/16/88 300
La Petite Academy
Martinez GA 83,665 N/A 12/31/87 300
Minit Lube
Riverdale GA 136,149 N/A 01/15/86 300
Minit Lube
Rome GA 132,632 N/A 12/20/85 300
Taco Bell
Savannah GA 92,221 N/A 12/22/87 300
Taco Bell
Savannah GA 98,048 N/A 12/22/87 300
Children's World
Smyrna GA 144,758 N/A 11/15/88 300
Taco Bell
Statesboro GA 91,594 N/A 11/14/89 300
La Petite Academy
Stockbridge GA 84,846 N/A 03/28/89 300
Page 94
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Stone Mtn. GA 316,750 703,512 None None
Golden Corral
Stone Mtn. GA 215,940 1,001,188 None None
La Petite Academy
Stone Mtn. GA 65,000 301,357 None None
La Petite Academy
Valdosta GA 73,561 341,059 None None
Golden Corral
Ankeny IA 100,000 349,218 None None
Golden Corral
Boone IA 76,000 386,170 None None
La Petite Academy
Cedar Rapids IA 194,950 427,085 None None
Checker Autoworks
Council Bluffs IA 194,355 431,668 None None
Golden Corral
Indianola IA 155,000 370,252 None None
La Petite Academy
Iowa City IA 186,900 408,910 None None
La Petite Academy
Johnston IA 186,996 347,278 None None
Schuck's Autoworks
Boise ID 158,400 351,813 None None
Schuck's Autoworks
Boise ID 190,080 422,172 None None
Taco Bell
Boise ID 190,894 423,981 None None
Taco Bell
Boise ID 161,352 334,041 None None
Schuck's Autoworks
Coeur D'Alene ID 165,900 368,468 None None
Schuck's Autoworks
Lewiston ID 138,950 308,612 None None
Schuck's Autoworks
Moscow ID 117,250 260,417 None None
Page 95
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Stone Mtn. GA 316,750 703,512 1,020,262
Golden Corral
Stone Mtn. GA 215,940 1,001,188 1,217,128
La Petite Academy
Stone Mtn. GA 65,000 301,357 366,357
La Petite Academy
Valdosta GA 73,561 341,059 414,620
Golden Corral
Ankeny IA 100,000 349,218 449,218
Golden Corral
Boone IA 76,000 386,170 462,170
La Petite Academy
Cedar Rapids IA 194,950 427,085 622,035
Checker Autoworks
Council Bluffs IA 194,355 431,668 626,023
Golden Corral
Indianola IA 155,000 370,252 525,252
La Petite Academy
Iowa City IA 186,900 408,910 595,810
La Petite Academy
Johnston IA 186,996 347,278 534,274
Schuck's Autoworks
Boise ID 158,400 351,813 510,213
Schuck's Autoworks
Boise ID 190,080 422,172 612,252
Taco Bell
Boise ID 190,894 423,981 614,875
Taco Bell
Boise ID 161,352 334,041 495,393
Schuck's Autoworks
Coeur D'Alene ID 165,900 368,468 534,368
Schuck's Autoworks
Lewiston ID 138,950 308,612 447,562
Schuck's Autoworks
Moscow ID 117,250 260,417 377,667
Page 96
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Stone Mtn. GA 166,886 N/A 11/16/88 300
Golden Corral
Stone Mtn. GA 464,415 N/A 10/30/86 300
La Petite Academy
Stone Mtn. GA 160,452 N/A 06/19/85 300
La Petite Academy
Valdosta GA 156,672 N/A 12/03/86 300
Golden Corral
Ankeny IA 289,512 N/A 07/28/83 180
Golden Corral
Boone IA 309,471 N/A 12/27/83 180
La Petite Academy
Cedar Rapids IA 71,901 N/A 09/24/92 300
Checker Autoworks
Council Bluffs IA 109,381 N/A 05/19/88 300
Golden Corral
Indianola IA 300,810 N/A 10/28/83 180
La Petite Academy
Iowa City IA 71,038 N/A 09/24/92 300
La Petite Academy
Johnston IA 51,574 N/A 08/19/91 300
Schuck's Autoworks
Boise ID 89,146 N/A 05/06/88 300
Schuck's Autoworks
Boise ID 106,974 N/A 05/06/88 300
Taco Bell
Boise ID 107,433 N/A 05/17/88 300
Taco Bell
Boise ID 80,139 N/A 10/07/88 300
Schuck's Autoworks
Coeur D'Alene ID 101,321 N/A 09/21/87 300
Schuck's Autoworks
Lewiston ID 84,863 N/A 09/09/87 300
Schuck's Autoworks
Moscow ID 71,609 N/A 09/14/87 300
Page 97
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Schuck's Autoworks
Nampa ID 183,743 408,101 None None
Sizzler
Nampa ID 74,156 343,821 None None
Golden Corral
Rexburg ID 90,760 420,787 None None
Schuck's Autoworks
Twin Falls ID 190,080 422,172 None None
Children's World
Addison IL 125,780 583,146 None None
Kinder-Care
Algonquin IL 241,500 509,629 None None
Golden Corral
Alton IL 225,785 419,315 None None
La Petite Academy
Aurora IL 165,679 398,739 None None
Children's World
Bartlett IL 120,824 560,166 None None
Children's World
Bolingbrook IL 60,000 409,024 None None
Children's World
Carol Stream IL 122,831 586,416 None None
Golden Corral
Dixon IL 230,090 511,036 None None
Children's World
Elk Grove
Village IL 126,860 588,175 None None
La Petite Academy
Elk Grove
Village IL 214,845 477,180 None None
Children's World
Glendale Hghts IL 318,500 707,399 None None
Children's World
Hoffman
Estates IL 318,500 707,399 None None
Page 98
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Schuck's Autoworks
Nampa ID 183,743 408,101 591,844
Sizzler
Nampa ID 74,156 343,821 417,977
Golden Corral
Rexburg ID 90,760 420,787 511,547
Schuck's Autoworks
Twin Falls ID 190,080 422,172 612,252
Children's World
Addison IL 125,780 583,146 708,926
Kinder-Care
Algonquin IL 241,500 509,629 751,129
Golden Corral
Alton IL 225,785 419,315 645,100
La Petite Academy
Aurora IL 165,679 398,739 564,418
Children's World
Bartlett IL 120,824 560,166 680,990
Children's World
Bolingbrook IL 60,000 409,024 469,024
Children's World
Carol Stream IL 122,831 586,416 709,247
Golden Corral
Dixon IL 230,090 511,036 741,126
Children's World
Elk Grove
Village IL 126,860 588,175 715,035
La Petite Academy
Elk Grove
Village IL 214,845 477,180 692,025
Children's World
Glendale Hghts IL 318,500 707,399 1,025,899
Children's World
Hoffman
Estates IL 318,500 707,399 1,025,899
Page 99
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Schuck's Autoworks
Nampa ID 103,410 N/A 05/06/88 300
Sizzler
Nampa ID 156,534 N/A 12/31/86 300
Golden Corral
Rexburg ID 215,038 N/A 11/25/85 300
Schuck's Autoworks
Twin Falls ID 106,974 N/A 05/06/88 300
Children's World
Addison IL 288,014 N/A 03/25/86 300
Kinder-Care
Algonquin IL 97,326 N/A 07/10/90 300
Golden Corral
Alton IL 100,599 N/A 10/18/88 300
La Petite Academy
Aurora IL 93,511 N/A 12/21/88 300
Children's World
Bartlett IL 276,662 N/A 03/25/86 300
Children's World
Bolingbrook IL 359,857 N/A 10/18/82 180
Children's World
Carol Stream IL 289,628 N/A 03/25/86 300
Golden Corral
Dixon IL 136,365 N/A 12/28/87 300
Children's World
Elk Grove
Village IL 290,497 N/A 03/26/86 300
La Petite Academy
Elk Grove
Village IL 122,201 N/A 04/08/88 300
Children's World
Glendale Hghts IL 167,808 N/A 11/16/88 300
Children's World
Hoffman
Estates IL 160,186 N/A 03/31/89 300
Page 100
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Hoffman
Estates IL 211,082 468,818 None None
La Petite Academy
Lockport IL 189,477 442,018 None None
La Petite Academy
O'Fallon IL 141,250 313,722 None None
La Petite Academy
Orland Park IL 218,499 485,295 None None
Children's World
Palatine IL 121,911 565,233 None None
Children's World
Roselle IL 297,541 561,036 None None
Golden Corral
Salem IL 213,815 474,892 None None
La Petite Academy
Schaumburg IL 218,798 485,956 None None
Children's World
Vernon Hills IL 132,523 614,430 None None
Children's World
Westmont IL 124,742 578,330 None None
Taco Bell
Anderson IN 197,523 438,707 None None
Golden Corral
Bedford IN 311,815 692,543 None None
Kinder-Care
Carmel IN 217,565 430,742 None None
Golden Corral
Decatur IN 181,020 385,618 None None
Kinder-Care
Fishers IN 212,118 419,959 None None
Rax
Goshen IN 115,000 533,165 None None
Kinder-Care
Highland IN 220,460 436,476 None None
Page 101
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Hoffman
Estates IL 211,082 468,818 679,900
La Petite Academy
Lockport IL 189,477 442,018 631,495
La Petite Academy
O'Fallon IL 141,250 313,722 454,972
La Petite Academy
Orland Park IL 218,499 485,295 703,794
Children's World
Palatine IL 121,911 565,233 687,144
Children's World
Roselle IL 297,541 561,036 858,577
Golden Corral
Salem IL 213,815 474,892 688,707
La Petite Academy
Schaumburg IL 218,798 485,956 704,754
Children's World
Vernon Hills IL 132,523 614,430 746,953
Children's World
Westmont IL 124,742 578,330 703,072
Taco Bell
Anderson IN 197,523 438,707 636,230
Golden Corral
Bedford IN 311,815 692,543 1,004,358
Kinder-Care
Carmel IN 217,565 430,742 648,307
Golden Corral
Decatur IN 181,020 385,618 566,638
Kinder-Care
Fishers IN 212,118 419,959 632,077
Rax
Goshen IN 115,000 533,165 648,165
Kinder-Care
Highland IN 220,460 436,476 656,936
Page 102
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Hoffman
Estates IL 94,806 N/A 12/08/89 300
La Petite Academy
Lockport IL 120,342 N/A 10/29/87 300
La Petite Academy
O'Fallon IL 85,408 N/A 10/30/87 300
La Petite Academy
Orland Park IL 132,126 N/A 10/29/87 300
Children's World
Palatine IL 279,165 N/A 03/25/86 300
Children's World
Roselle IL 131,578 N/A 12/30/88 300
Golden Corral
Salem IL 129,305 N/A 10/30/87 300
La Petite Academy
Schaumburg IL 129,690 N/A 12/17/87 300
Children's World
Vernon Hills IL 303,462 N/A 03/25/86 300
Children's World
Westmont IL 285,633 N/A 03/25/86 300
Taco Bell
Anderson IN 109,981 N/A 06/02/88 300
Golden Corral
Bedford IN 194,178 N/A 07/15/87 300
Kinder-Care
Carmel IN 73,218 N/A 12/27/90 300
Golden Corral
Decatur IN 112,289 N/A 03/31/87 300
Kinder-Care
Fishers IN 71,386 N/A 12/27/90 300
Rax
Goshen IN 256,378 N/A 07/07/86 300
Kinder-Care
Highland IN 74,192 N/A 12/26/90 300
Page 103
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Kinder-Care
Indianapolis IN 245,000 544,153 None None
Golden Corral
Martinsville IN 100,000 463,642 None None
Rax
Muncie IN 136,400 632,380 None None
Taco Bell
Muncie IN 67,156 149,157 None None
Dairy Mart
New Albany IN 181,459 289,353 None None
Dairy Mart
New Albany IN 262,465 331,796 None None
Golden Corral
New Albany IN 271,215 602,377 None None
Taco Bell
New Castle IN 144,349 320,572 None None
La Petite Academy
Noblesville IN 60,000 278,175 None None
Golden Corral
Shelbyville IN 128,820 597,263 None None
Fazolis Restaurant
South Bend IN 133,200 617,545 None 19,211
Taco Bell
Westfield IN 213,341 477,300 None None
La Petite Academy
Zionsville IN 127,568 319,770 None None
Golden Corral
Derby KS 96,060 445,359 None None
Golden Corral
El Dorado KS 87,400 405,206 None None
Golden Corral
Great Bend KS 95,800 444,154 None None
Checker Autoworks
Kansas City KS 185,955 413,014 None None
Checker Autoworks
Kansas City KS 222,000 455,881 None None
Page 104
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Kinder-Care
Indianapolis IN 245,000 544,153 789,153
Golden Corral
Martinsville IN 100,000 463,642 563,642
Rax
Muncie IN 136,400 632,380 768,780
Taco Bell
Muncie IN 67,156 149,157 216,313
Dairy Mart
New Albany IN 181,459 289,353 470,812
Dairy Mart
New Albany IN 262,465 331,796 594,261
Golden Corral
New Albany IN 271,215 602,377 873,592
Taco Bell
New Castle IN 144,349 320,572 464,921
La Petite Academy
Noblesville IN 60,000 278,175 338,175
Golden Corral
Shelbyville IN 128,820 597,263 726,083
Fazolis Restaurant
South Bend IN 133,200 636,756 769,956
Taco Bell
Westfield IN 213,341 477,300 690,641
La Petite Academy
Zionsville IN 127,568 319,770 447,338
Golden Corral
Derby KS 96,060 445,359 541,419
Golden Corral
El Dorado KS 87,400 405,206 492,606
Golden Corral
Great Bend KS 95,800 444,154 539,954
Checker Autoworks
Kansas City KS 185,955 413,014 598,969
Checker Autoworks
Kansas City KS 222,000 455,881 677,881
Page 105
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Kinder-Care
Indianapolis IN 101,265 N/A 06/29/90 300
Golden Corral
Martinsville IN 211,084 N/A 12/23/86 300
Rax
Muncie IN 312,329 N/A 03/18/86 300
Taco Bell
Muncie IN 38,600 N/A 03/30/88 300
Dairy Mart
New Albany IN 9,163 N/A 03/03/95 300
Dairy Mart
New Albany IN 10,507 N/A 03/06/95 300
Golden Corral
New Albany IN 121,816 N/A 12/26/89 300
Taco Bell
New Castle IN 94,682 N/A 01/07/87 300
La Petite Academy
Noblesville IN 155,555 N/A 04/30/85 300
Golden Corral
Shelbyville IN 271,920 N/A 12/18/86 300
Fazolis Restaurant
South Bend IN 307,317 N/A 04/28/86 300
Taco Bell
Westfield IN 93,956 N/A 12/21/89 300
La Petite Academy
Zionsville IN 87,055 N/A 10/28/87 300
Golden Corral
Derby KS 229,501 N/A 10/29/85 300
Golden Corral
El Dorado KS 200,062 N/A 04/10/86 300
Golden Corral
Great Bend KS 259,984 N/A 12/26/84 300
Checker Autoworks
Kansas City KS 104,655 N/A 05/13/88 300
Checker Autoworks
Kansas City KS 115,411 N/A 05/16/88 300
Page 106
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Lenexa KS 318,500 707,399 None None
Children's World
Olathe KS 304,500 676,308 None None
Children's World
Overland Park KS 305,691 707,397 None None
Children's World
Shawnee KS 315,000 699,629 None None
La Petite Academy
Topeka KS 58,000 268,903 None None
Burger King
Wichita KS 98,000 454,350 None None
Kinder-Care
Wichita KS 209,890 415,549 None None
La Petite Academy
Wichita KS 108,569 401,828 None None
Dairy Mart
Berea KY 252,077 360,815 None None
Dairy Mart
Elizabethtown KY 286,106 286,106 None None
The Pantry Inc.
Henderson KY 225,000 515,000 None None
Dairy Mart
Lebanon KY 158,052 316,105 None None
La Petite Academy
Lexington KY 210,427 420,883 None None
Taco Bell
Lexington KY 122,200 490,200 None None
Dairy Mart
Louisville KY 198,926 368,014 None None
Dairy Mart
Louisville KY 216,849 1,928 None None
Jiffy Lube
Louisville KY 56,054 259,881 None None
The Pantry Inc.
Owensboro KY 360,000 590,000 None None
Page 107
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Lenexa KS 318,500 707,399 1,025,899
Children's World
Olathe KS 304,500 676,308 980,808
Children's World
Overland Park KS 305,691 707,397 1,013,088
Children's World
Shawnee KS 315,000 699,629 1,014,629
La Petite Academy
Topeka KS 58,000 268,903 326,903
Burger King
Wichita KS 98,000 454,350 552,350
Kinder-Care
Wichita KS 209,890 415,549 625,439
La Petite Academy
Wichita KS 108,569 401,828 510,397
Dairy Mart
Berea KY 252,077 360,815 612,892
Dairy Mart
Elizabethtown KY 286,106 286,106 572,212
The Pantry Inc.
Henderson KY 225,000 515,000 740,000
Dairy Mart
Lebanon KY 158,052 316,105 474,157
La Petite Academy
Lexington KY 210,427 420,883 631,310
Taco Bell
Lexington KY 122,200 490,200 612,400
Dairy Mart
Louisville KY 198,926 368,014 566,940
Dairy Mart
Louisville KY 216,849 1,928 218,777
Jiffy Lube
Louisville KY 56,054 259,881 315,935
The Pantry Inc.
Owensboro KY 360,000 590,000 950,000
Page 108
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Lenexa KS 160,186 N/A 03/31/89 300
Children's World
Olathe KS 164,077 N/A 09/28/88 300
Children's World
Overland Park KS 171,619 N/A 09/28/88 300
Children's World
Shawnee KS 167,848 N/A 10/27/88 300
La Petite Academy
Topeka KS 150,370 N/A 04/16/85 300
Burger King
Wichita KS 216,530 N/A 08/08/86 300
Kinder-Care
Wichita KS 70,636 N/A 12/26/90 300
La Petite Academy
Wichita KS 163,339 N/A 12/16/86 300
Dairy Mart
Berea KY 11,426 N/A 03/08/95 300
Dairy Mart
Elizabethtown KY 9,060 N/A 03/03/95 300
The Pantry Inc.
Henderson KY 7,725 N/A 08/25/95 300
Dairy Mart
Lebanon KY 10,010 N/A 03/03/95 300
La Petite Academy
Lexington KY 82,359 N/A 08/20/91 180
Taco Bell
Lexington KY 225,200 N/A 12/03/86 300
Dairy Mart
Louisville KY 11,654 N/A 03/03/95 300
Dairy Mart In
Louisville KY 0 Process 11/17/95 300
Jiffy Lube
Louisville KY 131,695 N/A 12/17/85 300
The Pantry Inc.
Owensboro KY 8,850 N/A 08/25/95 300
Page 109
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
El Chico
Alexandria LA 143,000 662,985 None 15,000
Golden Corral
Jennings LA 107,120 496,636 None None
Children's World
Acton MA 315,533 700,813 None None
Children's World
Marlborough MA 352,765 776,487 None None
Dairy Mart
Seekonk MA 298,354 268,518 None None
Children's World
Westborough MA 359,412 773,877 None None
Jiffy Lube
Clinton MD 70,880 328,620 None None
La Petite Academy
Ellicott City MD 219,368 630,839 None None
Golden Corral
La Plata MD 120,140 557,000 None None
Children's World
Olney MD 342,500 760,701 None None
Children's World
Waldorf MD 130,430 604,702 None None
La Petite Academy
Waldorf MD 237,207 526,844 None None
Ponderosa
Albion MI 143,280 694,578 None 12,341
Children's World
Canton MI 55,000 378,848 None None
7-Eleven
Flint MI 194,492 476,504 None None
Don Pablo's
Flint MI 827,853 0 None None
Golden Corral
Sturgis MI 210,560 467,659 None None
Golden Corral
Albert Lea MN 213,150 473,412 None None
Page 110
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
El Chico
Alexandria LA 143,000 677,985 820,985
Golden Corral
Jennings LA 107,120 496,636 603,756
Children's World
Acton MA 315,533 700,813 1,016,346
Children's World
Marlborough MA 352,765 776,487 1,129,252
Dairy Mart
Seekonk MA 298,354 268,518 566,872
Children's World
Westborough MA 359,412 773,877 1,133,289
Jiffy Lube
Clinton MD 70,880 328,620 399,500
La Petite Academy
Ellicott City MD 219,368 630,839 850,207
Golden Corral
La Plata MD 120,140 557,000 677,140
Children's World
Olney MD 342,500 760,701 1,103,201
Children's World
Waldorf MD 130,430 604,702 735,132
La Petite Academy
Waldorf MD 237,207 526,844 764,051
Ponderosa
Albion MI 143,280 706,919 850,199
Children's World
Canton MI 55,000 378,848 433,848
7-Eleven
Flint MI 194,492 476,504 670,996
Don Pablo's
Flint MI 827,853 0 827,853
Golden Corral
Sturgis MI 210,560 467,659 678,219
Golden Corral
Albert Lea MN 213,150 473,412 686,562
Page 111
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
El Chico
Alexandria LA 340,878 N/A 01/17/86 300
Golden Corral
Jennings LA 255,925 N/A 10/17/85 300
Children's World
Acton MA 170,022 N/A 09/30/88 300
Children's World
Marlborough MA 184,195 N/A 11/04/88 300
Dairy Mart
Seekonk MA 8,503 N/A 03/03/95 300
Children's World
Westborough MA 183,573 N/A 11/01/88 300
Jiffy Lube
Clinton MD 169,288 N/A 11/15/85 300
La Petite Academy
Ellicott City MD 147,945 N/A 12/19/88 300
Golden Corral
La Plata MD 284,551 N/A 12/03/85 300
Children's World
Olney MD 203,016 N/A 12/18/87 300
Children's World
Waldorf MD 362,098 N/A 09/26/84 300
La Petite Academy
Waldorf MD 140,602 N/A 12/31/87 300
Ponderosa
Albion MI 346,781 N/A 03/06/86 300
Children's World
Canton MI 334,644 N/A 10/06/82 180
7-Eleven
Flint MI 794 N/A 12/21/95 300
Don Pablo's
Flint MI 0 N/A 04/13/95 300
Golden Corral
Sturgis MI 126,072 N/A 11/12/87 300
Golden Corral
Albert Lea MN 126,363 N/A 12/16/87 300
Page 112
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Apple Valley MN 113,523 526,319 None None
Children's World
Bloomington MN 124,113 575,416 None None
Children's World
Brooklyn Park MN 112,823 523,073 None None
Children's World
Brooklyn Park MN 118,111 547,586 None None
Children's World
Eagan MN 112,127 519,844 None None
Children's World
Eden Prairie MN 124,286 576,243 None None
Children's World
Maple Grove MN 111,691 517,822 None None
Kinder-Care
Maple Grove MN 313,250 660,149 None None
Automax
Minneapolis MN 58,000 268,903 None None
Children's World
Minnetonka MN 146,847 680,842 None None
Children's World
Plymouth MN 134,221 622,350 None None
Golden Corral
Red Wing MN 248,325 551,541 None None
Joe Sensor's Bar
& Grill
Roseville MN 281,600 1,305,560 None None
Children's World
W. Bloomington MN 40,000 468,484 None None
Children's World
White Bear
Lake MN 260,750 579,133 None None
Kinder-Care
White Bear
Lake MN 242,165 537,855 None None
Page 113
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Apple Valley MN 113,523 526,319 639,842
Children's World
Bloomington MN 124,113 575,416 699,529
Children's World
Brooklyn Park MN 112,823 523,073 635,896
Children's World
Brooklyn Park MN 118,111 547,586 665,697
Children's World
Eagan MN 112,127 519,844 631,971
Children's World
Eden Prairie MN 124,286 576,243 700,529
Children's World
Maple Grove MN 111,691 517,822 629,513
Kinder-Care
Maple Grove MN 313,250 660,149 973,399
Automax
Minneapolis MN 58,000 268,903 326,903
Children's World
Minnetonka MN 146,847 680,842 827,689
Children's World
Plymouth MN 134,221 622,350 756,571
Golden Corral
Red Wing MN 248,325 551,541 799,866
Joe Sensor's Bar
& Grill
Roseville MN 281,600 1,305,560 1,587,160
Children's World
W. Bloomington MN 40,000 468,484 508,484
Children's World
White Bear
Lake MN 260,750 579,133 839,883
Kinder-Care
White Bear
Lake MN 242,165 537,855 780,020
Page 114
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Apple Valley MN 259,947 N/A 03/27/86 300
Children's World
Bloomington MN 284,196 N/A 03/27/86 300
Children's World
Brooklyn Park MN 258,343 N/A 03/27/86 300
Children's World
Brooklyn Park MN 270,449 N/A 03/27/86 300
Children's World
Eagan MN 256,748 N/A 03/27/86 300
Children's World
Eden Prairie MN 284,604 N/A 03/27/86 300
Children's World
Maple Grove MN 255,751 N/A 03/27/86 300
Kinder-Care
Maple Grove MN 127,107 N/A 07/11/90 300
Automax
Minneapolis MN 136,268 N/A 12/18/85 300
Children's World
Minnetonka MN 312,781 N/A 12/12/86 300
Children's World
Plymouth MN 285,908 N/A 12/12/86 300
Golden Corral
Red Wing MN 147,163 N/A 12/30/87 300
Joe Sensor's Bar
& Grill
Roseville MN 764,210 N/A 12/18/84 300
Children's World
W. Bloomington MN 422,432 N/A 06/18/82 180
Children's World
White Bear
Lake MN 154,560 N/A 12/23/87 300
Kinder-Care
White Bear
Lake MN 97,204 N/A 08/30/90 300
Page 115
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Golden Corral
Belton MO 89,328 418,187 None None
Checker Autoworks
Blue Springs MO 222,569 494,334 None None
Golden Corral
Blue Springs MO 111,440 516,665 None None
Golden Corral
Carthage MO 85,020 394,175 None None
Golden Corral
Chillicothe MO 81,080 375,908 None None
Children's World
Florissant MO 318,500 707,399 None None
La Petite Academy
Florissant MO 181,300 402,672 None None
Golden Corral
Fulton MO 210,199 466,861 None None
Children's World
Gladstone MO 294,000 652,987 None None
Golden Corral
Hannibal MO 266,011 590,822 None None
Po Folks
Hazelwood MO 157,117 725,327 None None
Checker Autoworks
Independence MO 210,643 467,845 None None
Golden Corral
Jackson MO 210,199 466,860 None None
Checker Autoworks
Kansas City MO 210,070 466,571 None None
Checker Autoworks
Kansas City MO 168,350 373,910 None None
Checker Autoworks
Kansas City MO 248,500 551,927 None None
Children's World
Lee'S Summit MO 239,627 532,220 None None
La Petite Academy
Liberty MO 65,400 303,211 None None
Page 116
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Golden Corral
Belton MO 89,328 418,187 507,515
Checker Autoworks
Blue Springs MO 222,569 494,334 716,903
Golden Corral
Blue Springs MO 111,440 516,665 628,105
Golden Corral
Carthage MO 85,020 394,175 479,195
Golden Corral
Chillicothe MO 81,080 375,908 456,988
Children's World
Florissant MO 318,500 707,399 1,025,899
La Petite Academy
Florissant MO 181,300 402,672 583,972
Golden Corral
Fulton MO 210,199 466,861 677,060
Children's World
Gladstone MO 294,000 652,987 946,987
Golden Corral
Hannibal MO 266,011 590,822 856,833
Po Folks
Hazelwood MO 157,117 725,327 882,444
Checker Autoworks
Independence MO 210,643 467,845 678,488
Golden Corral
Jackson MO 210,199 466,860 677,059
Checker Autoworks
Kansas City MO 210,070 466,571 676,641
Checker Autoworks
Kansas City MO 168,350 373,910 542,260
Checker Autoworks
Kansas City MO 248,500 551,927 800,427
Children's World
Lee'S Summit MO 239,627 532,220 771,847
La Petite Academy
Liberty MO 65,400 303,211 368,611
Page 117
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Golden Corral
Belton MO 244,787 N/A 12/18/84 300
Checker Autoworks
Blue Springs MO 106,616 N/A 07/31/89 300
Golden Corral
Blue Springs MO 302,431 N/A 12/28/84 300
Golden Corral
Carthage MO 201,369 N/A 12/03/85 300
Golden Corral
Chillicothe MO 220,039 N/A 12/26/84 300
Children's World
Florissant MO 160,186 N/A 03/30/89 300
La Petite Academy
Florissant MO 91,182 N/A 03/29/89 300
Golden Corral
Fulton MO 130,901 N/A 07/30/87 300
Children's World
Gladstone MO 158,419 N/A 09/29/88 300
Golden Corral
Hannibal MO 165,657 N/A 07/30/87 300
Po Folks
Hazelwood MO 379,902 N/A 08/28/85 300
Checker Autoworks
Independence MO 100,903 N/A 07/31/89 300
Golden Corral
Jackson MO 130,901 N/A 07/30/87 300
Checker Autoworks
Kansas City MO 118,225 N/A 05/13/88 300
Checker Autoworks
Kansas City MO 94,745 N/A 05/26/88 300
Checker Autoworks
Kansas City MO 131,973 N/A 10/25/88 300
Children's World
Lee'S Summit MO 110,568 N/A 09/27/89 300
La Petite Academy
Liberty MO 161,437 N/A 06/18/85 300
Page 118
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Manchester MO 287,000 637,435 None None
Golden Corral
Nevada MO 222,552 494,296 None None
Golden Corral
Sedalia MO 269,798 599,232 None None
Children's World
St. Charles MO 259,000 575,246 None None
Golden Corral
St. Charles MO 695,121 790,560 None None
Po Folks
St. Charles MO 175,413 809,790 None None
Golden Corral
St. Joseph MO 107,648 496,958 None None
Golden Corral
Sullivan MO 85,500 396,400 None None
Golden Corral
Clinton MS 100,000 337,371 None None
La Petite Academy
Pearl MS 121,801 270,525 None None
Golden Corral
Southaven MS 263,900 582,303 None None
Checker Autoworks
Missoula MT 163,100 362,249 None None
La Petite Academy
Cary NC 75,200 262,973 None None
The Pantry Inc.
Cary NC 450,000 825,000 None None
La Petite Academy
Chapel Hill NC 77,000 356,992 None None
La Petite Academy
Charlotte NC 27,551 247,000 None None
La Petite Academy
Charlotte NC 134,582 268,222 None None
La Petite Academy
Concord NC 32,441 190,859 None None
Page 119
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Manchester MO 287,000 637,435 924,435
Golden Corral
Nevada MO 222,552 494,296 716,848
Golden Corral
Sedalia MO 269,798 599,232 869,030
Children's World
St. Charles MO 259,000 575,246 834,246
Golden Corral
St. Charles MO 695,121 790,560 1,485,681
Po Folks
St. Charles MO 175,413 809,790 985,203
Golden Corral
St. Joseph MO 107,648 496,958 604,606
Golden Corral
Sullivan MO 85,500 396,400 481,900
Golden Corral
Clinton MS 100,000 337,371 437,371
La Petite Academy
Pearl MS 121,801 270,525 392,326
Golden Corral
Southaven MS 263,900 582,303 846,203
Checker Autoworks
Missoula MT 163,100 362,249 525,349
La Petite Academy
Cary NC 75,200 262,973 338,173
The Pantry Inc.
Cary NC 450,000 825,000 1,275,000
La Petite Academy
Chapel Hill NC 77,000 356,992 433,992
La Petite Academy
Charlotte NC 27,551 247,000 274,551
La Petite Academy
Charlotte NC 134,582 268,222 402,804
La Petite Academy
Concord NC 32,441 190,859 223,300
Page 120
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Manchester MO 170,120 N/A 12/22/87 300
Golden Corral
Nevada MO 138,594 N/A 07/30/87 300
Golden Corral
Sedalia MO 134,002 N/A 07/31/89 300
Children's World
St. Charles MO 153,524 N/A 12/23/87 300
Golden Corral
St. Charles MO 1,318 12/15/95 03/16/95 300
Po Folks
St. Charles MO 424,139 N/A 08/28/85 300
Golden Corral
St. Joseph MO 260,200 N/A 09/04/85 300
Golden Corral
Sullivan MO 232,032 N/A 12/27/84 300
Golden Corral
Clinton MS 279,683 N/A 07/28/83 180
La Petite Academy
Pearl MS 64,363 N/A 11/15/88 300
Golden Corral
Southaven MS 166,418 N/A 05/11/87 300
Checker Autoworks
Missoula MT 98,634 N/A 10/30/87 300
La Petite Academy
Cary NC 209,285 N/A 01/25/84 180
The Pantry Inc.
Cary NC 12,375 N/A 08/25/95 300
La Petite Academy
Chapel Hill NC 199,630 N/A 04/17/85 300
La Petite Academy
Charlotte NC 230,534 N/A 12/23/81 180
La Petite Academy
Charlotte NC 63,624 N/A 11/16/88 300
La Petite Academy
Concord NC 178,135 N/A 12/23/81 180
Page 121
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Jiffy Lube
Durham NC 55,074 255,336 None None
La Petite Academy
Durham NC 220,728 429,380 None None
La Petite Academy
Durham NC 238,000 471,201 None None
Golden Corral
Fayetteville NC 116,240 538,919 None None
The Pantry Inc.
Greenville NC 330,000 515,000 None None
The Pantry Inc.
Greenville NC 225,000 405,000 None None
La Petite Academy
Hendersonville NC 32,748 186,152 None None
The Pantry Inc.
Jacksonville NC 150,000 530,000 None None
La Petite Academy
Kernersville NC 162,216 316,299 None None
La Petite Academy
Morrisville NC 175,700 390,234 None None
Jiffy Lube
Raleigh NC 89,145 413,301 None None
Taco Bell
Wilkesboro NC 183,050 406,562 None None
La Petite Academy
Bellevue NE 60,568 280,819 None None
Checker Autoworks
Kearney NE 173,950 344,393 None None
Checker Autoworks
Omaha NE 196,000 435,321 None None
Checker Autoworks
Omaha NE 199,100 412,042 None None
Golden Corral
Omaha NE 629,592 1,051,244 None None
La Petite Academy
Omaha NE 60,500 280,491 None None
Page 122
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Jiffy Lube
Durham NC 55,074 255,336 310,410
La Petite Academy
Durham NC 220,728 429,380 650,108
La Petite Academy
Durham NC 238,000 471,201 709,201
Golden Corral
Fayetteville NC 116,240 538,919 655,159
The Pantry Inc.
Greenville NC 330,000 515,000 845,000
The Pantry Inc.
Greenville NC 225,000 405,000 630,000
La Petite Academy
Hendersonville NC 32,748 186,152 218,900
The Pantry Inc.
Jacksonville NC 150,000 530,000 680,000
La Petite Academy
Kernersville NC 162,216 316,299 478,515
La Petite Academy
Morrisville NC 175,700 390,234 565,934
Jiffy Lube
Raleigh NC 89,145 413,301 502,446
Taco Bell
Wilkesboro NC 183,050 406,562 589,612
La Petite Academy
Bellevue NE 60,568 280,819 341,387
Checker Autoworks
Kearney NE 173,950 344,393 518,343
Checker Autoworks
Omaha NE 196,000 435,321 631,321
Checker Autoworks
Omaha NE 199,100 412,042 611,142
Golden Corral
Omaha NE 629,592 1,051,244 1,680,836
La Petite Academy
Omaha NE 60,500 280,491 340,991
Page 123
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Jiffy Lube
Durham NC 131,538 N/A 11/13/85 300
La Petite Academy
Durham NC 99,541 N/A 12/29/89 300
La Petite Academy
Durham NC 69,979 N/A 08/20/91 300
Golden Corral
Fayetteville NC 315,457 N/A 12/20/84 300
The Pantry Inc.
Greenville NC 7,725 N/A 08/25/95 300
The Pantry Inc.
Greenville NC 6,075 N/A 08/25/95 300
La Petite Academy
Hendersonville NC 173,742 N/A 12/23/81 180
The Pantry Inc.
Jacksonville NC 7,950 N/A 08/25/95 300
La Petite Academy
Kernersville NC 75,964 N/A 12/14/89 300
La Petite Academy
Morrisville NC 88,365 N/A 03/29/89 300
Jiffy Lube
Raleigh NC 212,982 N/A 10/28/85 300
Taco Bell
Wilkesboro NC 113,995 N/A 07/24/87 300
La Petite Academy
Bellevue NE 127,850 N/A 12/16/86 300
Checker Autoworks
Kearney NE 65,016 N/A 05/01/90 300
Checker Autoworks
Omaha NE 110,307 N/A 05/26/88 300
Checker Autoworks
Omaha NE 102,241 N/A 05/27/88 300
Golden Corral
Omaha NE 22,777 06/02/95 02/24/95 300
La Petite Academy
Omaha NE 170,471 N/A 08/01/84 300
Page 124
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Omaha NE 53,000 245,720 None None
La Petite Academy
Omaha NE 142,867 317,315 None None
Children's World
Londonderry NH 335,467 745,082 None None
R & S Strauss
Cherry Hill NJ 1,074,640 1,032,304 None None
La Petite Academy
Clementon NJ 279,851 554,060 None None
Vacant
Eatontown NJ 302,595 1,402,898 None 210,000
Checker Autoworks
Albuquerque NM 80,500 178,794 None None
Checker Autoworks
Rio Rancho NM 211,577 469,923 None None
Checker Autoworks
Sante Fe NM 70,000 155,473 None None
La Petite Academy
Henderson NV 82,000 380,173 None None
Checker Autoworks
Las Vegas NV 161,000 357,585 None None
Kinder-Care
Las Vegas NV 201,250 446,983 None None
Checker Autoworks
Reno NV 456,000 562,344 None None
La Petite Academy
Sparks NV 244,752 543,604 None None
Golden Corral
Amherst NY 935,355 739,896 None None
Golden Corral
Fulton NY 294,009 653,006 None None
Dairy Mart
Kingston NY 257,763 456,042 None None
Wendy's
Watertown NY 139,199 645,355 None None
Page 125
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Omaha NE 53,000 245,720 298,720
La Petite Academy
Omaha NE 142,867 317,315 460,182
Children's World
Londonderry NH 335,467 745,082 1,080,549
R & S Strauss
Cherry Hill NJ 1,074,640 1,032,304 2,106,944
La Petite Academy
Clementon NJ 279,851 554,060 833,911
Vacant
Eatontown NJ 302,595 1,612,898 1,915,493
Checker Autoworks
Albuquerque NM 80,500 178,794 259,294
Checker Autoworks
Rio Rancho NM 211,577 469,923 681,500
Checker Autoworks
Sante Fe NM 70,000 155,473 225,473
La Petite Academy
Henderson NV 82,000 380,173 462,173
Checker Autoworks
Las Vegas NV 161,000 357,585 518,585
Kinder-Care
Las Vegas NV 201,250 446,983 648,233
Checker Autoworks
Reno NV 456,000 562,344 1,018,344
La Petite Academy
Sparks NV 244,752 543,604 788,356
Golden Corral
Amherst NY 935,355 739,896 1,675,251
Golden Corral
Fulton NY 294,009 653,006 947,015
Dairy Mart
Kingston NY 257,763 456,042 713,805
Wendy's
Watertown NY 139,199 645,355 784,554
Page 126
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Omaha NE 147,095 N/A 10/11/84 300
La Petite Academy
Omaha NE 84,682 N/A 12/09/87 300
Children's World
Londonderry NH 158,691 N/A 08/18/89 300
R & S Strauss
Cherry Hill NJ 15,485 08/02/95 01/26/95 300
La Petite Academy
Clementon NJ 80,798 N/A 09/09/91 300
Vacant
Eatontown NJ 1,122,325 N/A 01/11/84 180
Checker Autoworks
Albuquerque NM 48,683 N/A 10/29/87 300
Checker Autoworks
Rio Rancho NM 122,877 N/A 02/26/88 300
Checker Autoworks
Sante Fe NM 42,333 N/A 10/29/87 300
La Petite Academy
Henderson NV 212,592 N/A 04/17/85 300
Checker Autoworks
Las Vegas NV 97,364 N/A 10/29/87 300
Kinder-Care
Las Vegas NV 83,182 N/A 06/29/90 300
Checker Autoworks
Reno NV 142,351 N/A 05/26/88 300
La Petite Academy
Sparks NV 143,610 N/A 01/28/88 300
Golden Corral
Amherst NY 3,699 11/06/95 05/31/95 300
Golden Corral
Fulton NY 173,140 N/A 12/24/87 300
Dairy Mart
Kingston NY 12,921 N/A 04/06/95 300
Wendy's
Watertown NY 304,898 N/A 08/18/86 300
Page 127
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Don Pablo's
Akron OH 723,347 0 None None
Golden Corral
Ashland OH 120,740 559,801 None None
Dairy Mart
Atwater OH 118,555 266,748 None None
Children's World
Beavercreek OH 179,552 398,786 None None
Golden Corral
Celina OH 207,060 459,841 None None
Children's World
Centerville OH 174,519 387,613 None None
La Petite Academy
Cincinnati OH 165,910 368,486 None None
7-Eleven
Columbus OH 273,085 471,693 None None
Dairy Mart
Columbus OH 147,296 304,411 None None
Jiffy Lube
Columbus OH 71,098 329,626 None None
Jiffy Lube
Columbus OH 75,761 351,246 None None
Speedy Brake
& Muffler
Columbus OH 245,036 470,468 None None
Dairy Mart
Cuyahoga Falls OH 297,982 357,579 None None
Jiffy Lube
Dayton OH 70,000 324,538 None None
La Petite Academy
Dublin OH 84,000 389,446 None None
Speedy Brake
& Muffler
Eastlake OH 321,347 459,774 None None
La Petite Academy
Englewood OH 74,000 343,083 None None
Page 128
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Don Pablo's
Akron OH 723,347 0 723 347
Golden Corral
Ashland OH 120,740 559,801 680,541
Dairy Mart
Atwater OH 118,555 266,748 385,303
Children's World
Beavercreek OH 179,552 398,786 578,338
Golden Corral
Celina OH 207,060 459,841 666,901
Children's World
Centerville OH 174,519 387,613 562,132
La Petite Academy
Cincinnati OH 165,910 368,486 534,396
7-Eleven
Columbus OH 273,085 471,693 744,778
Dairy Mart
Columbus OH 147,296 304,411 451,707
Jiffy Lube
Columbus OH 71,098 329,626 400,724
Jiffy Lube
Columbus OH 75,761 351,246 427,007
Speedy Brake
& Muffler
Columbus OH 245,036 470,468 715,504
Dairy Mart
Cuyahoga Falls OH 297,982 357,579 655,561
Jiffy Lube
Dayton OH 70,000 324,538 394,538
La Petite Academy
Dublin OH 84,000 389,446 473,446
Speedy Brake
& Muffler
Eastlake OH 321,347 459,774 781,121
La Petite Academy
Englewood OH 74,000 343,083 417,083
Page 129
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Don Pablo's
Akron OH 0 N/A 12/22/94 300
Golden Corral
Ashland OH 254,863 N/A 12/19/86 300
Dairy Mart
Atwater OH 8,447 N/A 03/03/95 300
Children's World
Beavercreek OH 112,891 N/A 06/30/87 300
Golden Corral
Celina OH 136,392 N/A 01/02/87 300
Children's World
Centerville OH 108,681 N/A 07/23/87 300
La Petite Academy
Cincinnati OH 106,306 N/A 04/13/87 300
7-Eleven
Columbus OH 786 N/A 12/21/95 300
Dairy Mart
Columbus OH 9,640 N/A 03/03/95 300
Jiffy Lube
Columbus OH 171,217 N/A 10/02/85 300
Jiffy Lube
Columbus OH 181,005 N/A 10/24/85 300
Speedy Brake
& Muffler
Columbus OH 784 N/A 12/22/95 300
Dairy Mart
Cuyahoga Falls OH 11,323 N/A 03/03/95 300
Jiffy Lube
Dayton OH 167,240 N/A 10/30/85 300
La Petite Academy
Dublin OH 202,286 N/A 10/08/85 300
Speedy Brake
& Muffler
Eastlake OH 766 N/A 12/22/95 300
La Petite Academy
Englewood OH 176,796 N/A 10/23/85 300
Page 130
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Forest Park OH 170,778 379,305 None None
La Petite Academy
Gahanna OH 86,000 398,718 None None
Dairy Mart
Galion OH 138,981 327,597 None None
7-Eleven
Groveport OH 277,198 445,497 None None
Children's World
Huber Heights OH 245,000 544,153 None None
Golden Corral
Lebanon OH 210,134 466,717 None None
Children's World
Loveland OH 206,136 457,829 None None
Children's World
Maineville OH 173,105 384,469 None None
Jiffy Lube
Miamisburg OH 63,996 296,701 None None
Jiffy Lube
Northwood OH 65,978 263,912 None None
Dairy Mart
Perrysburg OH 211,678 81,601 None None
La Petite Academy
Pickerington OH 87,580 406,055 None None
Golden Corral
Stow OH 317,546 712,455 None None
Jiffy Lube
Toledo OH 73,408 293,632 None None
Jiffy Lube
Toledo OH 91,655 366,621 None None
Dairy Mart
Triffin OH 117,017 273,040 None None
Golden Corral
Troy OH 130,540 605,238 None None
Page 131
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Forest Park OH 170,778 379,305 550,083
La Petite Academy
Gahanna OH 86,000 398,718 484,718
Dairy Mart
Galion OH 138,981 327,597 466,578
7-Eleven
Groveport OH 277,198 445,497 722,695
Children's World
Huber Heights OH 245,000 544,153 789,153
Golden Corral
Lebanon OH 210,134 466,717 676,851
Children's World
Loveland OH 206,136 457,829 663,965
Children's World
Maineville OH 173,105 384,469 557,574
Jiffy Lube
Miamisburg OH 63,996 296,701 360,697
Jiffy Lube
Northwood OH 65,978 263,912 329,890
Dairy Mart
Perrysburg OH 211,678 81,601 293,279
La Petite Academy
Pickerington OH 87,580 406,055 493,635
Golden Corral
Stow OH 317,546 712,455 1,030,001
Jiffy Lube
Toledo OH 73,408 293,632 367,040
Jiffy Lube
Toledo OH 91,655 366,621 458,276
Dairy Mart
Triffin OH 117,017 273,040 390,057
Golden Corral
Troy OH 130,540 605,238 735,778
Page 132
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Forest Park OH 105,524 N/A 09/28/87 300
La Petite Academy
Gahanna OH 203,758 N/A 11/26/85 300
Dairy Mart
Galion OH 10,374 N/A 03/06/95 300
7-Eleven
Groveport OH 743 N/A 12/21/95 300
Children's World
Huber Heights OH 96,880 N/A 09/27/90 300
Golden Corral
Lebanon OH 130,860 N/A 07/31/87 300
Children's World
Loveland OH 133,318 N/A 03/20/87 300
Children's World
Maineville OH 111,956 N/A 03/06/87 300
Jiffy Lube
Miamisburg OH 154,114 N/A 10/08/85 300
Jiffy Lube
Northwood OH 163,589 N/A 09/12/86 180
Dairy Mart In
Perrysburg OH 0 Process 09/01/95 300
La Petite Academy
Pickerington OH 186,532 N/A 12/11/86 300
Golden Corral
Stow OH 189,195 N/A 12/31/87 300
Jiffy Lube
Toledo OH 182,010 N/A 09/12/86 180
Jiffy Lube
Toledo OH 227,253 N/A 09/12/86 180
Dairy Mart
Triffin OH 8,646 N/A 03/07/95 300
Golden Corral
Troy OH 278,049 N/A 12/05/86 300
Page 133
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Golden Corral
Washington
Courthouse OH 123,120 570,836 None None
Children's World
Westerville OH 294,350 646,557 None None
La Petite Academy
Westerville OH 82,000 380,173 None None
Golden Corral
Wilmington OH 119,320 553,217 None None
La Petite Academy
Broken Arrow OK 78,705 220,434 None None
La Petite Academy
Midwest City OK 67,800 314,338 None None
Don Pablo's
Norman OK 734,335 0 None None
Don Pablo's
Oklahoma City OK 759,826 0 None None
La Petite Academy
Oklahoma City OK 50,800 214,474 None None
La Petite Academy
Oklahoma City OK 79,000 366,261 None None
Golden Corral
Owasso OK 247,450 549,597 None None
Golden Corral
Ponca City OK 234,990 521,923 None None
La Petite Academy
Yukon OK 61,000 282,812 None None
Schuck's Autoworks
Albany OR 152,250 338,153 None None
Children's World
Beaverton OR 135,148 626,647 None None
Children's World
Beaverton OR 115,232 534,301 None None
Schuck's Autoworks
Beaverton OR 210,000 466,419 None None
Page 134
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Golden Corral
Washington
Courthouse OH 123,120 570,836 693,956
Children's World
Westerville OH 294,350 646,557 940,907
La Petite Academy
Westerville OH 82,000 380,173 462,173
Golden Corral
Wilmington OH 119,320 553,217 672,537
La Petite Academy
Broken Arrow OK 78,705 220,434 299,139
La Petite Academy
Midwest City OK 67,800 314,338 382,138
Don Pablo's
Norman OK 734,335 0 734 335
Don Pablo's
Oklahoma City OK 759,826 0 759 826
La Petite Academy
Oklahoma City OK 50,800 214,474 265,274
La Petite Academy
Oklahoma City OK 79,000 366,261 445,261
Golden Corral
Owasso OK 247,450 549,597 797,047
Golden Corral
Ponca City OK 234,990 521,923 756,913
La Petite Academy
Yukon OK 61,000 282,812 343,812
Schuck's Autoworks
Albany OR 152,250 338,153 490,403
Children's World
Beaverton OR 135,148 626,647 761,795
Children's World
Beaverton OR 115,232 534,301 649,533
Schuck's Autoworks
Beaverton OR 210,000 466,419 676,419
Page 135
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Golden Corral
Washington
Courthouse OH 259,888 N/A 12/19/86 300
Children's World
Westerville OH 122,068 N/A 09/26/90 300
La Petite Academy
Westerville OH 197,470 N/A 10/08/85 300
Golden Corral
Wilmington OH 251,868 N/A 12/31/86 300
La Petite Academy
Broken Arrow OK 190,227 N/A 01/27/83 180
La Petite Academy
Midwest City OK 166,018 N/A 08/14/85 300
Don Pablo's
Norman OK 0 09/29/95 06/05/95 300
Don Pablo's
Oklahoma City OK 0 N/A 07/06/95 300
La Petite Academy
Oklahoma City OK 194,215 N/A 06/15/82 180
La Petite Academy
Oklahoma City OK 217,616 N/A 11/14/84 300
Golden Corral
Owasso OK 146,679 N/A 12/28/87 300
Golden Corral
Ponca City OK 139,292 N/A 12/30/87 300
La Petite Academy
Yukon OK 156,877 N/A 05/02/85 300
Schuck's Autoworks
Albany OR 93,900 N/A 08/24/87 300
Children's World
Beaverton OR 285,296 N/A 12/17/86 300
Children's World
Beaverton OR 243,254 N/A 12/22/86 300
Schuck's Autoworks
Beaverton OR 129,517 N/A 08/26/87 300
Page 136
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Schuck's Autoworks
Corvallis OR 152,250 338,153 None None
Taco Bell
Corvallis OR 172,788 383,766 None None
Schuck's Autoworks
Eugene OR 194,880 432,837 None None
Golden Corral
Hermiston OR 85,560 396,675 None None
The Keg
Lake Oswego OR 175,899 815,509 None None
Golden Corral
McMinnville OR 227,780 505,905 None None
The Keg
Milwaukie OR 179,174 830,689 None None
Schuck's Autoworks
Oak Grove OR 180,250 400,336 None None
Schuck's Autoworks
Portland OR 190,750 423,664 None None
Schuck's Autoworks
Portland OR 147,000 326,493 None None
Schuck's Autoworks
Portland OR 210,000 466,412 None None
El Presidente
Salem OR 161,656 749,474 20,000 29,125
Schuck's Autoworks
Salem OR 136,500 303,170 None None
Taco Bell
Salem OR 198,540 440,964 None None
Schuck's Autoworks
Tigard OR 164,500 365,361 None None
Golden Corral
Connellsville PA 264,670 587,843 None None
R & S Strauss
Philadelphia PA 858,500 877,745 None None
Page 137
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Schuck's Autoworks
Corvallis OR 152,250 338,153 490,403
Taco Bell
Corvallis OR 172,788 383,766 556,554
Schuck's Autoworks
Eugene OR 194,880 432,837 627,717
Golden Corral
Hermiston OR 85,560 396,675 482,235
The Keg
Lake Oswego OR 175,899 815,509 991,408
Golden Corral
McMinnville OR 227,780 505,905 733,685
The Keg
Milwaukie OR 179,174 830,689 1,009,863
Schuck's Autoworks
Oak Grove OR 180,250 400,336 580,586
Schuck's Autoworks
Portland OR 190,750 423,664 614,414
Schuck's Autoworks
Portland OR 147,000 326,493 473,493
Schuck's Autoworks
Portland OR 210,000 466,412 676,412
El Presidente
Salem OR 161,656 798,599 960,255
Schuck's Autoworks
Salem OR 136,500 303,170 439,670
Taco Bell
Salem OR 198,540 440,964 639,504
Schuck's Autoworks
Tigard OR 164,500 365,361 529,861
Golden Corral
Connellsville PA 264,670 587,843 852,513
R & S Strauss
Philadelphia PA 858,500 877,745 1,736,245
Page 138
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Schuck's Autoworks
Corvallis OR 93,900 N/A 08/12/87 300
Taco Bell
Corvallis OR 102,421 N/A 12/22/87 300
Schuck's Autoworks
Eugene OR 113,180 N/A 02/10/88 300
Golden Corral
Hermiston OR 232,192 N/A 12/18/84 300
The Keg
Lake Oswego OR 502,935 N/A 05/16/84 300
Golden Corral
McMinnville OR 136,382 N/A 11/12/87 300
The Keg
Milwaukie OR 515,877 N/A 05/08/84 300
Schuck's Autoworks
Oak Grove OR 111,167 N/A 08/06/87 300
Schuck's Autoworks
Portland OR 117,646 N/A 08/12/87 300
Schuck's Autoworks
Portland OR 90,662 N/A 08/26/87 300
Schuck's Autoworks
Portland OR 128,256 N/A 09/01/87 300
El Presidente
Salem OR 476,586 N/A 05/16/84 300
Schuck's Autoworks
Salem OR 84,184 N/A 08/20/87 300
Taco Bell
Salem OR 94,422 N/A 05/23/89 300
Schuck's Autoworks
Tigard OR 101,456 N/A 08/26/87 300
Golden Corral
Connellsville PA 163,235 N/A 08/17/87 300
R & S Strauss
Philadelphia PA 124,330 05/19/95 12/05/94 300
Page 139
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Jiffy Lube
Springfield
Township PA 82,740 383,601 None None
Golden Corral
Waynesburg PA 222,285 493,704 None None
La Petite Academy
Charleston SC 125,593 278,946 None None
La Petite Academy
Charleston SC 140,700 312,498 None None
La Petite Academy
Columbia SC 58,160 269,643 None None
The Pantry Inc.
Columbia SC 150,000 450,000 None None
La Petite Academy
Elgin SC 160,831 313,600 None None
La Petite Academy
Goose Creek SC 61,635 192,905 None None
Vacant
Greenville SC 500,000 1,273,648 20,000 None
The Pantry Inc.
John's Isle SC 170,000 350,000 None None
La Petite Academy
Ladson SC 31,543 177,457 None None
La Petite Academy
Lexington SC 55,869 274,742 None None
Long John Silver's
Lexington SC 176,774 392,619 None None
The Pantry Inc.
Lexington SC 255,000 545,000 None None
La Petite Academy
Mt. Pleasant SC 40,700 180,400 None None
The Pantry Inc.
Myrtle Beach SC 140,000 590,000 None None
The Pantry Inc.
N. Charleston SC 400,000 650,000 None None
Page 140
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Jiffy Lube
Springfield
Township PA 82,740 383,601 466,341
Golden Corral
Waynesburg PA 222,285 493,704 715,989
La Petite Academy
Charleston SC 125,593 278,946 404,539
La Petite Academy
Charleston SC 140,700 312,498 453,198
La Petite Academy
Columbia SC 58,160 269,643 327,803
The Pantry Inc.
Columbia SC 150,000 450,000 600,000
La Petite Academy
Elgin SC 160,831 313,600 474,431
La Petite Academy
Goose Creek SC 61,635 192,905 254,540
Vacant
Greenville SC 500,000 1,293,648 1,793,648
The Pantry Inc.
John's Isle SC 170,000 350,000 520,000
La Petite Academy
Ladson SC 31,543 177,457 209,000
La Petite Academy
Lexington SC 55,869 274,742 330,611
Long John Silver's
Lexington SC 176,774 392,619 569,393
The Pantry Inc.
Lexington SC 255,000 545,000 800,000
La Petite Academy
Mt. Pleasant SC 40,700 180,400 221,100
The Pantry Inc.
Myrtle Beach SC 140,000 590,000 730,000
The Pantry Inc.
N. Charleston SC 400,000 650,000 1,050,000
Page 141
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Jiffy Lube
Springfield
Township PA 191,105 N/A 02/28/86 300
Golden Corral
Waynesburg PA 137,093 N/A 08/17/87 300
La Petite Academy
Charleston SC 70,682 N/A 05/26/88 300
La Petite Academy
Charleston SC 70,764 N/A 03/28/89 300
La Petite Academy
Columbia SC 160,208 N/A 11/14/84 300
The Pantry Inc.
Columbia SC 6,750 N/A 08/25/95 300
La Petite Academy
Elgin SC 75,316 N/A 12/14/89 300
La Petite Academy
Goose Creek SC 180,115 N/A 12/22/81 180
Vacant
Greenville SC 1,074,976 N/A 06/15/83 180
The Pantry Inc.
John's Isle SC 5,250 N/A 08/25/95 300
La Petite Academy
Ladson SC 165,626 N/A 12/22/81 180
La Petite Academy
Lexington SC 163,237 N/A 11/13/84 300
Long John Silver's
Lexington SC 97,369 N/A 07/06/88 300
The Pantry Inc.
Lexington SC 8,175 N/A 08/25/95 300
La Petite Academy
Mt. Pleasant SC 168,374 N/A 12/22/81 180
The Pantry Inc.
Myrtle Beach SC 8,850 N/A 08/25/95 300
The Pantry Inc.
N. Charleston SC 9,750 N/A 08/25/95 300
Page 142
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Summerville SC 44,400 174,500 None None
The Pantry Inc.
Summerville SC 115,000 515,000 None None
La Petite Academy
Sumter SC 56,010 268,903 None None
Long John Silver's
West Columbia SC 147,735 328,123 None None
Golden Corral
Pierre SD 251,790 559,232 None None
The Pantry Inc.
La Vergne TN 340,000 650,000 None None
Children's World
Memphis TN 238,263 504,897 None None
Children's World
Memphis TN 238,000 528,608 None None
Golden Corral
Memphis TN 405,274 1,060,680 None None
Kinder-Care
Memphis TN 221,501 491,962 None None
Children's World
Nashville TN 274,298 609,223 None None
Sante Fe Cantina
Nashville TN 484,975 1,192,627 20,000 31,098
The Pantry Inc.
Shelbyville TN 200,000 465,000 None None
La Petite Academy
Allen TX 177,637 394,537 None None
Checker Autoworks
Amarillo TX 140,000 419,734 None None
Children's World
Arlington TX 82,109 380,678 None None
Children's World
Arlington TX 238,000 528,604 None None
Children's World
Arlington TX 241,500 550,559 None None
Page 143
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Summerville SC 44,400 174,500 218,900
The Pantry Inc.
Summerville SC 115,000 515,000 630,000
La Petite Academy
Sumter SC 56,010 268,903 324,913
Long John Silver's
West Columbia SC 147,735 328,123 475,858
Golden Corral
Pierre SD 251,790 559,232 811,022
The Pantry Inc.
La Vergne TN 340,000 650,000 990,000
Children's World
Memphis TN 238,263 504,897 743,160
Children's World
Memphis TN 238,000 528,608 766,608
Golden Corral
Memphis TN 405,274 1,060,680 1,465,954
Kinder-Care
Memphis TN 221,501 491,962 713,463
Children's World
Nashville TN 274,298 609,223 883,521
Sante Fe Cantina
Nashville TN 484,975 1,243,725 1,728,700
The Pantry Inc.
Shelbyville TN 200,000 465,000 665,000
La Petite Academy
Allen TX 177,637 394,537 572,174
Checker Autoworks
Amarillo TX 140,000 419,734 559,734
Children's World
Arlington TX 82,109 380,678 462,787
Children's World
Arlington TX 238,000 528,604 766,604
Children's World
Arlington TX 241,500 550,559 792,059
Page 144
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Summerville SC 162,866 N/A 12/22/81 180
The Pantry Inc.
Summerville SC 7,725 N/A 08/25/95 300
La Petite Academy
Sumter SC 143,173 N/A 06/18/85 300
Long John Silver's
West Columbia SC 86,686 N/A 01/13/88 300
Golden Corral
Pierre SD 149,248 N/A 12/01/87 300
The Pantry Inc.
La Vergne TN 9,750 N/A 08/25/95 300
Children's World
Memphis TN 122,489 N/A 09/29/88 300
Children's World
Memphis TN 128,244 N/A 09/30/88 300
Golden Corral
Memphis TN 19,446 06/30/95 03/17/95 300
Kinder-Care
Memphis TN 88,910 N/A 08/30/90 300
Children's World
Nashville TN 137,954 N/A 03/30/89 300
Sante Fe Cantina
Nashville TN 1,012,195 N/A 05/20/83 180
The Pantry Inc.
Shelbyville TN 6,975 N/A 08/25/95 300
La Petite Academy
Allen TX 93,584 N/A 11/21/88 300
Checker Autoworks
Amarillo TX 101,475 N/A 09/12/88 300
Children's World
Arlington TX 224,475 N/A 12/13/84 300
Children's World
Arlington TX 128,242 N/A 09/26/88 300
Children's World
Arlington TX 175,963 N/A 09/22/89 300
Page 145
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Arlington TX 70,000 324,538 None None
La Petite Academy
Arlington TX 195,650 387,355 None None
Golden Corral
Athens TX 245,245 544,700 None None
Children's World
Austin TX 134,383 623,103 None None
Children's World
Austin TX 236,733 528,608 None None
Children's World
Austin TX 238,000 528,604 None None
Discount Tire
Store
Austin TX 185,454 411,899 None None
La Petite Academy
Austin TX 103,600 230,532 None None
La Petite Academy
Austin TX 88,872 222,684 None None
La Petite Academy
Austin TX 188,144 417,872 None None
La Petite Academy
Austin TX 191,636 425,629 None None
La Petite Academy
Austin TX 224,878 499,461 None None
La Petite Academy
Austin TX 217,878 483,913 None None
Children's World
Bedford TX 241,500 550,559 None None
Don Pablo's
Bedford TX 919,303 98,231 None None
Golden Corral
Beeville TX 250,490 556,349 None None
Golden Corral
Brownwood TX 288,225 640,160 None None
Page 146
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Arlington TX 70,000 324,538 394,538
La Petite Academy
Arlington TX 195,650 387,355 583,005
Golden Corral
Athens TX 245,245 544,700 789,945
Children's World
Austin TX 134,383 623,103 757,486
Children's World
Austin TX 236,733 528,608 765,341
Children's World
Austin TX 238,000 528,604 766,604
Discount Tire
Store
Austin TX 185,454 411,899 597,353
La Petite Academy
Austin TX 103,600 230,532 334,132
La Petite Academy
Austin TX 88,872 222,684 311,556
La Petite Academy
Austin TX 188,144 417,872 606,016
La Petite Academy
Austin TX 191,636 425,629 617,265
La Petite Academy
Austin TX 224,878 499,461 724,339
La Petite Academy
Austin TX 217,878 483,913 701,791
Children's World
Bedford TX 241,500 550,559 792,059
Don Pablo's
Bedford TX 919,303 98,231 1,017,534
Golden Corral
Beeville TX 250,490 556,349 806,839
Golden Corral
Brownwood TX 288,225 640,160 928,385
Page 147
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Arlington TX 180,022 N/A 05/08/85 300
La Petite Academy
Arlington TX 63,763 N/A 02/07/91 300
Golden Corral
Athens TX 145,371 N/A 12/01/87 300
Children's World
Austin TX 283,684 N/A 12/26/86 300
Children's World
Austin TX 128,244 N/A 09/27/88 300
Children's World
Austin TX 118,276 N/A 04/06/89 300
Discount Tire
Store
Austin TX 81,082 N/A 02/06/90 300
La Petite Academy
Austin TX 202,823 N/A 10/29/82 180
La Petite Academy
Austin TX 192,994 N/A 01/12/83 180
La Petite Academy
Austin TX 105,885 N/A 05/11/88 300
La Petite Academy
Austin TX 99,818 N/A 12/22/88 300
La Petite Academy
Austin TX 115,791 N/A 01/03/89 300
La Petite Academy
Austin TX 105,670 N/A 06/22/89 300
Children's World
Bedford TX 175,965 N/A 09/22/89 300
Don Pablo's
Bedford TX 83,950 N/A 12/27/94 300
Golden Corral
Beeville TX 155,993 N/A 07/31/87 300
Golden Corral
Brownwood TX 170,702 N/A 12/28/87 300
Page 148
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Carrollton TX 277,850 617,113 None None
La Petite Academy
Cedar Park TX 168,857 375,036 None None
La Petite Academy
Colleyville TX 68,000 315,266 None None
Children's World
Converse TX 217,000 481,963 None None
Children's World
Coppell TX 139,224 645,551 None None
Children's World
Coppell TX 208,641 463,398 None None
Golden Corral
Crockett TX 90,780 420,880 None None
Discount Tire
Store
Dallas TX 191,267 424,811 None None
Don Pablo's
Dallas TX 742,507 0 None None
Whataburger
Dallas TX 242,025 479,170 None None
La Petite Academy
Desoto TX 86,000 398,715 None None
La Petite Academy
Duncanville TX 93,000 431,172 None None
Golden Corral
El Campo TX 98,060 454,631 None None
Checker Autoworks
El Paso TX 66,150 146,922 None None
Checker Autoworks
El Paso TX 56,350 125,156 None None
Kentucky Fried
Chicken
Ennis TX 173,250 384,793 None None
Children's World
Euless TX 234,111 519,962 None None
Page 149
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Carrollton TX 277,850 617,113 894,963
La Petite Academy
Cedar Park TX 168,857 375,036 543,893
La Petite Academy
Colleyville TX 68,000 315,266 383,266
Children's World
Converse TX 217,000 481,963 698,963
Children's World
Coppell TX 139,224 645,551 784,775
Children's World
Coppell TX 208,641 463,398 672,039
Golden Corral
Crockett TX 90,780 420,880 511,660
Discount Tire
Store
Dallas TX 191,267 424,811 616,078
Don Pablo's
Dallas TX 742,507 0 742 507
Whataburger
Dallas TX 242,025 479,170 721,195
La Petite Academy
Desoto TX 86,000 398,715 484,715
La Petite Academy
Duncanville TX 93,000 431,172 524,172
Golden Corral
El Campo TX 98,060 454,631 552,691
Checker Autoworks
El Paso TX 66,150 146,922 213,072
Checker Autoworks
El Paso TX 56,350 125,156 181,506
Kentucky Fried
Chicken
Ennis TX 173,250 384,793 558,043
Children's World
Euless TX 234,111 519,962 754,073
Page 150
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Carrollton TX 164,696 N/A 12/11/87 300
La Petite Academy
Cedar Park TX 88,958 N/A 11/21/88 300
La Petite Academy
Colleyville TX 174,879 N/A 05/01/85 300
Children's World
Converse TX 116,927 N/A 09/28/88 300
Children's World
Coppell TX 293,902 N/A 12/18/86 300
Children's World
Coppell TX 123,672 N/A 12/11/87 300
Golden Corral
Crockett TX 213,283 N/A 12/17/85 300
Discount Tire
Store
Dallas TX 84,765 N/A 01/26/90 300
Don Pablo's
Dallas TX 0 N/A 04/13/95 300
Whataburger
Dallas TX 73,733 N/A 06/25/91 300
La Petite Academy
Desoto TX 236,959 N/A 10/23/84 300
La Petite Academy
Duncanville TX 239,171 N/A 05/08/85 300
Golden Corral
El Campo TX 232,332 N/A 11/25/85 300
Checker Autoworks
El Paso TX 40,004 N/A 10/27/87 300
Checker Autoworks
El Paso TX 34,077 N/A 10/27/87 300
Kentucky Fried
Chicken
Ennis TX 102,695 N/A 12/28/87 300
Children's World
Euless TX 148,601 N/A 05/08/87 300
Page 151
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Children's World
Flowermound TX 202,773 442,846 None None
Children's World
Fort Worth TX 238,000 528,608 None None
La Petite Academy
Fort Worth TX 85,518 396,495 None None
La Petite Academy
Fort Worth TX 210,007 444,460 None None
La Petite Academy
Fort Worth TX 216,160 427,962 None None
Whataburger
Fort Worth TX 223,195 492,067 None None
Whataburger
Ft. Worth TX 423,281 382,059 None None
Golden Corral
Gainesville TX 89,220 413,644 None None
Discount Tire
Store
Garland TX 242,887 539,461 None None
La Petite Academy
Garland TX 211,050 468,749 None None
La Petite Academy
Grand Prairie TX 167,164 371,275 None None
Discount Tire
Store
Harlingen TX 134,599 298,948 None None
Golden Corral
Hillsboro TX 75,992 352,316 None None
Children's World
Houston TX 219,100 486,631 None None
Children's World
Houston TX 219,100 486,628 None None
Children's World
Houston TX 149,109 323,314 None None
Page 152
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Children's World
Flowermound TX 202,773 442,846 645,619
Children's World
Fort Worth TX 238,000 528,608 766,608
La Petite Academy
Fort Worth TX 85,518 396,495 482,013
La Petite Academy
Fort Worth TX 210,007 444,460 654,467
La Petite Academy
Fort Worth TX 216,160 427,962 644,122
Whataburger
Fort Worth TX 223,195 492,067 715,262
Whataburger
Ft. Worth TX 423,281 382,059 805,340
Golden Corral
Gainesville TX 89,220 413,644 502,864
Discount Tire
Store
Garland TX 242,887 539,461 782,348
La Petite Academy
Garland TX 211,050 468,749 679,799
La Petite Academy
Grand Prairie TX 167,164 371,275 538,439
Discount Tire
Store
Harlingen TX 134,599 298,948 433,547
Golden Corral
Hillsboro TX 75,992 352,316 428,308
Children's World
Houston TX 219,100 486,631 705,731
Children's World
Houston TX 219,100 486,628 705,728
Children's World
Houston TX 149,109 323,314 472,423
Page 153
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Children's World
Flowermound TX 127,757 N/A 04/20/87 300
Children's World
Fort Worth TX 128,244 N/A 09/26/88 300
La Petite Academy
Fort Worth TX 182,141 N/A 12/03/86 300
La Petite Academy
Fort Worth TX 90,111 N/A 02/01/90 300
La Petite Academy
Fort Worth TX 70,448 N/A 02/07/91 300
Whataburger
Fort Worth TX 84,482 N/A 06/26/91 300
Whataburger
Ft. Worth TX 13,372 N/A 02/10/95 300
Golden Corral
Gainesville TX 242,125 N/A 12/18/84 300
Discount Tire
Store
Garland TX 107,642 N/A 01/19/90 300
La Petite Academy
Garland TX 94,793 N/A 12/12/89 300
La Petite Academy
Grand Prairie TX 87,071 N/A 12/13/88 300
Discount Tire
Store
Harlingen TX 59,651 N/A 01/17/90 300
Golden Corral
Hillsboro TX 214,126 N/A 08/01/84 300
Children's World
Houston TX 118,061 N/A 09/30/88 300
Children's World
Houston TX 115,438 N/A 11/16/88 300
Children's World
Houston TX 88,535 N/A 06/26/89 300
Page 154
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Discount Tire
Store
Houston TX 151,018 335,417 None None
La Petite Academy
Houston TX 58,000 268,901 None None
La Petite Academy
Houston TX 102,000 472,898 None None
La Petite Academy
Houston TX 60,000 278,175 None None
La Petite Academy
Houston TX 139,125 308,997 None None
La Petite Academy
Houston TX 139,125 308,997 None None
La Petite Academy
Houston TX 141,296 313,824 None None
Whataburger
Houston TX 184,175 364,636 None None
Whataburger
Houston TX 194,994 386,056 None None
Artesian Center
Humble TX 106,000 545,518 None None
Vacant
Irving TX 63,853 296,034 None None
Taco Bell
Killeen TX 262,500 583,014 None 14,398
Golden Corral
League City TX 126,822 588,000 None None
Discount Tire
Store
Leon Valley TX 178,221 395,834 None None
Children's World
Lewisville TX 192,777 428,121 None None
Children's World
Lewisville TX 192,218 426,922 None None
La Petite Academy
Lewisville TX 79,000 366,264 None None
Page 155
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Discount Tire
Store
Houston TX 151,018 335,417 486,435
La Petite Academy
Houston TX 58,000 268,901 326,901
La Petite Academy
Houston TX 102,000 472,898 574,898
La Petite Academy
Houston TX 60,000 278,175 338,175
La Petite Academy
Houston TX 139,125 308,997 448,122
La Petite Academy
Houston TX 139,125 308,997 448,122
La Petite Academy
Houston TX 141,296 313,824 455,120
Whataburger
Houston TX 184,175 364,636 548,811
Whataburger
Houston TX 194,994 386,056 581,050
Artesian Center
Humble TX 106,000 545,518 651,518
Vacant
Irving TX 63,853 296,034 359,887
Taco Bell
Killeen TX 262,500 597,412 859,912
Golden Corral
League City TX 126,822 588,000 714,822
Discount Tire
Store
Leon Valley TX 178,221 395,834 574,055
Children's World
Lewisville TX 192,777 428,121 620,898
Children's World
Lewisville TX 192,218 426,922 619,140
La Petite Academy
Lewisville TX 79,000 366,264 445,264
Page 156
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Discount Tire
Store
Houston TX 66,928 N/A 01/25/90 300
La Petite Academy
Houston TX 160,973 N/A 10/11/84 300
La Petite Academy
Houston TX 262,316 N/A 05/01/85 300
La Petite Academy
Houston TX 154,305 N/A 05/01/85 300
La Petite Academy
Houston TX 88,307 N/A 05/22/87 300
La Petite Academy
Houston TX 88,307 N/A 05/22/87 300
La Petite Academy
Houston TX 87,992 N/A 07/24/87 300
Whataburger
Houston TX 56,109 N/A 06/25/91 300
Whataburger
Houston TX 59,405 N/A 06/25/91 300
Artesian Center
Humble TX 388,039 N/A 03/19/86 300
Vacant
Irving TX 144,942 N/A 04/23/86 300
Taco Bell
Killeen TX 167,168 N/A 05/29/87 300
Golden Corral
League City TX 267,701 N/A 12/30/86 300
Discount Tire
Store
Leon Valley TX 78,984 N/A 01/17/90 300
Children's World
Lewisville TX 126,896 N/A 01/07/87 300
Children's World
Lewisville TX 100,123 N/A 12/29/88 300
La Petite Academy
Lewisville TX 195,010 N/A 06/26/85 300
Page 157
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Checker Autoworks
Lubbock TX 42,000 93,284 None None
Checker Autoworks
Lubbock TX 49,000 108,831 None None
Golden Corral
Lufkin TX 105,904 490,998 None None
La Petite Academy
Mansfield TX 181,375 402,838 None None
Don Pablo's
Mesquite TX 729,596 120,820 None None
Golden Corral
Mesquite TX 134,940 625,612 None None
La Petite Academy
Mesquite TX 85,000 394,079 None None
La Petite Academy
Mesquite TX 139,466 326,525 None None
Golden Corral
Mexia TX 93,620 434,046 None None
Checker Autoworks
Midland TX 45,500 101,058 None None
La Petite Academy
Missouri City TX 221,025 437,593 None None
Children's World
North Richland
Hills TX 238,000 528,608 None None
Taco Bell
New Braunfels TX 185,500 411,997 None None
Checker Autoworks
Odessa TX 50,750 112,718 None None
Golden Corral
Orange TX 93,560 433,768 None None
Discount Tire
Store
Pasadena TX 107,391 238,518 None None
La Petite Academy
Pasadena TX 60,000 278,173 None None
Page 158
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Checker Autoworks
Lubbock TX 42,000 93,284 135,284
Checker Autoworks
Lubbock TX 49,000 108,831 157,831
Golden Corral
Lufkin TX 105,904 490,998 596,902
La Petite Academy
Mansfield TX 181,375 402,838 584,213
Don Pablo's
Mesquite TX 729,596 120,820 850,416
Golden Corral
Mesquite TX 134,940 625,612 760,552
La Petite Academy
Mesquite TX 85,000 394,079 479,079
La Petite Academy
Mesquite TX 139,466 326,525 465,991
Golden Corral
Mexia TX 93,620 434,046 527,666
Checker Autoworks
Midland TX 45,500 101,058 146,558
La Petite Academy
Missouri City TX 221,025 437,593 658,618
Children's World
North Richland
Hills TX 238,000 528,608 766,608
Taco Bell
New Braunfels TX 185,500 411,997 597,497
Checker Autoworks
Odessa TX 50,750 112,718 163,468
Golden Corral
Orange TX 93,560 433,768 527,328
Discount Tire
Store
Pasadena TX 107,391 238,518 345,909
La Petite Academy
Pasadena TX 60,000 278,173 338,173
Page 159
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Checker Autoworks
Lubbock TX 25,398 N/A 10/26/87 300
Checker Autoworks
Lubbock TX 29,633 N/A 10/29/87 300
Golden Corral
Lufkin TX 255,036 N/A 10/08/85 300
La Petite Academy
Mansfield TX 81,465 N/A 12/20/89 300
Don Pablo's
Mesquite TX 104,039 N/A 12/23/94 300
Golden Corral
Mesquite TX 308,987 N/A 03/20/86 300
La Petite Academy
Mesquite TX 234,207 N/A 10/23/84 300
La Petite Academy
Mesquite TX 76,803 N/A 10/08/92 300
Golden Corral
Mexia TX 219,956 N/A 12/18/85 300
Checker Autoworks
Midland TX 27,515 N/A 10/27/87 300
La Petite Academy
Missouri City TX 74,383 N/A 12/13/90 300
Children's World
North Richland
Hills TX 128,244 N/A 09/26/88 300
Taco Bell
New Braunfels TX 119,972 N/A 03/26/87 300
Checker Autoworks
Odessa TX 30,690 N/A 10/26/87 300
Golden Corral
Orange TX 221,595 N/A 12/10/85 300
Discount Tire
Store
Pasadena TX 47,594 N/A 01/24/90 300
La Petite Academy
Pasadena TX 165,323 N/A 10/23/84 300
Page 160
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Golden Corral
Plainview TX 125,000 350,767 None None
Children's World
Plano TX 261,912 581,658 None None
Children's World
Plano TX 250,514 556,399 None None
Children's World
Plano TX 259,000 575,246 None None
Discount Tire
Store
Plano TX 187,564 416,586 None None
Levitz Furniture
Plano TX 565,000 5,835,000 None None
Golden Corral
Port Lavaca TX 244,759 543,619 None None
Whataburger
Porter TX 227,067 333,031 None None
La Petite Academy
Round Rock TX 80,525 373,347 None None
La Petite Academy
Round Rock TX 186,380 413,957 None None
Golden Corral
Rowlett TX 126,933 585,986 None None
Children's World
San Antonio TX 130,833 606,595 None None
Children's World
San Antonio TX 234,500 520,831 None None
Children's World
San Antonio TX 217,000 481,967 None None
Children's World
San Antonio TX 220,500 447,108 None None
Discount Tire
Store
San Antonio TX 245,164 544,518 None None
Econo Lube N' Tune
San Antonio TX 198,828 437,422 None None
Page 161
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Golden Corral
Plainview TX 125,000 350,767 475,767
Children's World
Plano TX 261,912 581,658 843,570
Children's World
Plano TX 250,514 556,399 806,913
Children's World
Plano TX 259,000 575,246 834,246
Discount Tire
Store
Plano TX 187,564 416,586 604,150
Levitz Furniture
Plano TX 565,000 5,835,000 6,400,000
Golden Corral
Port Lavaca TX 244,759 543,619 788,378
Whataburger
Porter TX 227,067 333,031 560,098
La Petite Academy
Round Rock TX 80,525 373,347 453,872
La Petite Academy
Round Rock TX 186,380 413,957 600,337
Golden Corral
Rowlett TX 126,933 585,986 712,919
Children's World
San Antonio TX 130,833 606,595 737,428
Children's World
San Antonio TX 234,500 520,831 755,331
Children's World
San Antonio TX 217,000 481,967 698,967
Children's World
San Antonio TX 220,500 447,108 667,608
Discount Tire
Store
San Antonio TX 245,164 544,518 789,682
Econo Lube N' Tune
San Antonio TX 198,828 437,422 636,250
Page 162
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Golden Corral
Plainview TX 279,162 N/A 01/24/84 180
Children's World
Plano TX 172,523 N/A 01/06/87 300
Children's World
Plano TX 148,492 N/A 12/10/87 300
Children's World
Plano TX 139,559 N/A 09/27/88 300
Discount Tire
Store
Plano TX 83,124 N/A 01/18/90 300
Levitz Furniture
Plano TX 145,875 N/A 05/26/95 300
Golden Corral
Port Lavaca TX 152,424 N/A 07/30/87 300
Whataburger
Porter TX 11,656 N/A 02/09/95 300
La Petite Academy
Round Rock TX 169,977 N/A 12/16/86 300
La Petite Academy
Round Rock TX 92,623 N/A 04/19/89 300
Golden Corral
Rowlett TX 306,816 N/A 09/06/85 300
Children's World
San Antonio TX 299,594 N/A 03/24/86 300
Children's World
San Antonio TX 139,000 N/A 12/29/87 300
Children's World
San Antonio TX 115,631 N/A 10/14/88 300
Children's World
San Antonio TX 101,246 N/A 03/30/89 300
Discount Tire
Store
San Antonio TX 107,187 N/A 02/14/90 300
Econo Lube N' Tune
San Antonio TX 5,103 N/A 09/15/95 300
Page 163
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
San Antonio TX 102,512 475,289 None None
La Petite Academy
San Antonio TX 81,530 378,007 None None
La Petite Academy
San Antonio TX 139,125 308,997 None None
La Petite Academy
San Antonio TX 162,161 360,166 None None
La Petite Academy
San Antonio TX 181,412 402,923 None None
La Petite Academy
San Antonio TX 182,868 406,155 None None
Whataburger
Sealy TX 197,871 391,754 None None
La Petite Academy
Southlake TX 228,279 511,750 None None
Stone Meadow Ctr
Spring TX 143,980 722,247 None None
Whataburger
Stafford TX 214,024 423,732 None None
La Petite Academy
Sugarland TX 193,800 430,436 None None
Whataburger
Temple TX 302,505 291,414 None None
La Petite Academy
Texas City TX 48,000 222,918 None None
La Petite Academy
The Woodlands TX 193,801 430,441 None None
Golden Corral
Vidor TX 90,618 420,124 None None
La Petite Academy
Watauga TX 165,914 368,502 None None
Golden Corral
Waxahachie TX 326,935 726,137 None None
Page 164
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
San Antonio TX 102,512 475,289 577,801
La Petite Academy
San Antonio TX 81,530 378,007 459,537
La Petite Academy
San Antonio TX 139,125 308,997 448,122
La Petite Academy
San Antonio TX 162,161 360,166 522,327
La Petite Academy
San Antonio TX 181,412 402,923 584,335
La Petite Academy
San Antonio TX 182,868 406,155 589,023
Whataburger
Sealy TX 197,871 391,754 589,625
La Petite Academy
Southlake TX 228,279 511,750 740,029
Stone Meadow Ctr
Spring TX 143,980 722,247 866,227
Whataburger
Stafford TX 214,024 423,732 637,756
La Petite Academy
Sugarland TX 193,800 430,436 624,236
Whataburger
Temple TX 302,505 291,414 593,919
La Petite Academy
Texas City TX 48,000 222,918 270,918
La Petite Academy
The Woodlands TX 193,801 430,441 624,242
Golden Corral
Vidor TX 90,618 420,124 510,742
La Petite Academy
Watauga TX 165,914 368,502 534,416
Golden Corral
Waxahachie TX 326,935 726,137 1,053,072
Page 165
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
San Antonio TX 218,339 N/A 12/03/86 300
La Petite Academy
San Antonio TX 173,648 N/A 12/11/86 300
La Petite Academy
San Antonio TX 88,307 N/A 05/22/87 300
La Petite Academy
San Antonio TX 100,986 N/A 07/07/87 300
La Petite Academy
San Antonio TX 112,973 N/A 07/07/87 300
La Petite Academy
San Antonio TX 95,252 N/A 12/06/88 300
Whataburger
Sealy TX 60,282 N/A 06/25/91 300
La Petite Academy
Southlake TX 87,945 N/A 03/11/93 300
Stone Meadow Ctr
Spring TX 489,523 N/A 12/18/85 300
Whataburger
Stafford TX 65,203 N/A 06/26/91 300
La Petite Academy
Sugarland TX 120,689 N/A 07/31/87 300
Whataburger
Temple TX 10,199 N/A 02/09/95 300
La Petite Academy
Texas City TX 201,862 N/A 06/15/82 180
La Petite Academy
The Woodlands TX 119,527 N/A 08/11/87 300
Golden Corral
Vidor TX 255,333 N/A 08/01/84 300
La Petite Academy
Watauga TX 103,321 N/A 07/07/87 300
Golden Corral
Waxahachie TX 193,715 N/A 12/30/87 300
Page 166
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Discount Tire
Store
Bountiful UT 183,750 408,115 None None
Golden Corral
Cedar City UT 130,000 296,544 None None
La Petite Academy
Layton UT 136,574 269,009 None None
Carver's
Orem UT 516,129 1,004,608 None None
Discount Tire
Store
Provo UT 125,395 278,507 None None
Carver's
Sandy UT 635,945 884,792 None None
La Petite Academy
Sandy UT 168,089 373,330 None None
Children's World
Centreville VA 371,000 824,003 None None
Color Tile
Chesapeake VA 144,014 649,869 None 11,754
La Petite Academy
Chesapeake VA 190,050 422,107 None None
La Petite Academy
Glen Allen VA 74,643 346,060 None None
Hot N Now
Norfolk VA 251,207 575,250 None 12,983
La Petite Academy
Portsmouth VA 171,575 381,072 None None
Children's World
Richmond VA 269,500 598,567 None None
La Petite Academy
Richmond VA 71,001 327,771 None None
Children's World
Virginia Bch VA 124,988 579,496 None None
Golden Corral
Virginia Bch VA 314,790 699,161 None None
Page 167
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Discount Tire
Store
Bountiful UT 183,750 408,115 591,865
Golden Corral
Cedar City UT 130,000 296,544 426,544
La Petite Academy
Layton UT 136,574 269,009 405,583
Carver's
Orem UT 516,129 1,004,608 1,520,737
Discount Tire
Store
Provo UT 125,395 278,507 403,902
Carver's
Sandy UT 635,945 884,792 1,520,737
La Petite Academy
Sandy UT 168,089 373,330 541,419
Children's World
Centreville VA 371,000 824,003 1,195,003
Color Tile
Chesapeake VA 144,014 661,623 805,637
La Petite Academy
Chesapeake VA 190,050 422,107 612,157
La Petite Academy
Glen Allen VA 74,643 346,060 420,703
Hot N Now
Norfolk VA 251,207 588,233 839,440
La Petite Academy
Portsmouth VA 171,575 381,072 552,647
Children's World
Richmond VA 269,500 598,567 868,067
La Petite Academy
Richmond VA 71,001 327,771 398,772
Children's World
Virginia Bch VA 124,988 579,496 704,484
Golden Corral
Virginia Bch VA 314,790 699,161 1,013,951
Page 168
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Discount Tire
Store
Bountiful UT 81,434 N/A 01/30/90 300
Golden Corral
Cedar City UT 245,382 N/A 08/04/83 180
La Petite Academy
Layton UT 62,323 N/A 02/01/90 300
Carver's
Orem UT 1,674 N/A 12/13/95 300
Discount Tire
Store
Provo UT 55,572 N/A 01/25/90 300
Carver's
Sandy UT 1,475 N/A 12/22/95 300
La Petite Academy
Sandy UT 73,489 N/A 02/01/90 300
Children's World
Centreville VA 173,284 N/A 09/29/89 300
Color Tile
Chesapeake VA 309,936 N/A 12/22/86 300
La Petite Academy
Chesapeake VA 95,584 N/A 03/27/89 300
La Petite Academy
Glen Allen VA 211,868 N/A 06/20/84 300
Hot N Now
Norfolk VA 159,516 N/A 10/15/87 300
La Petite Academy
Portsmouth VA 89,369 N/A 12/21/88 300
Children's World
Richmond VA 135,541 N/A 03/28/89 300
La Petite Academy
Richmond VA 171,618 N/A 09/04/85 300
Children's World
Virginia Bch VA 286,211 N/A 03/25/86 300
Golden Corral
Virginia Bch VA 192,259 N/A 09/03/87 300
Page 169
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
La Petite Academy
Virginia Bch VA 69,080 320,270 None None
Children's World
Woodbridge VA 358,050 795,239 None None
Golden Corral
Auburn WA 301,595 669,852 None None
Schuck's Autoworks
Bellevue WA 185,500 411,997 None None
Schuck's Autoworks
Bellingham WA 168,000 373,133 None None
Schuck's Autoworks
Bothell WA 199,500 443,098 None None
Children's World
Everett WA 120,000 540,363 None None
Schuck's Autoworks
Everett WA 367,500 816,227 None None
Children's World
Federal Way WA 150,785 699,100 None None
La Petite Academy
Federal Way WA 261,943 581,782 None None
Schuck's Autoworks
Hazel Dell WA 168,000 373,135 None None
Schuck's Autoworks
Kennewick WA 161,350 358,365 None None
Children's World
Kent WA 128,300 539,141 None None
Children's World
Kent WA 140,763 678,809 None None
Schuck's Autoworks
Kent WA 199,500 443,091 None None
Children's World
Kirkland WA 301,000 668,534 None None
Schuck's Autoworks
Lacey WA 171,150 380,125 None None
Golden Corral
Marysville WA 276,273 613,613 None None
Page 170
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
La Petite Academy
Virginia Bch VA 69,080 320,270 389,350
Children's World
Woodbridge VA 358,050 795,239 1,153,289
Golden Corral
Auburn WA 301,595 669,852 971,447
Schuck's Autoworks
Bellevue WA 185,500 411,997 597,497
Schuck's Autoworks
Bellingham WA 168,000 373,133 541,133
Schuck's Autoworks
Bothell WA 199,500 443,098 642,598
Children's World
Everett WA 120,000 540,363 660,363
Schuck's Autoworks
Everett WA 367,500 816,227 1,183,727
Children's World
Federal Way WA 150,785 699,100 849,885
La Petite Academy
Federal Way WA 261,943 581,782 843,725
Schuck's Autoworks
Hazel Dell WA 168,000 373,135 541,135
Schuck's Autoworks
Kennewick WA 161,350 358,365 519,715
Children's World
Kent WA 128,300 539,141 667,441
Children's World
Kent WA 140,763 678,809 819,572
Schuck's Autoworks
Kent WA 199,500 443,091 642,591
Children's World
Kirkland WA 301,000 668,534 969,534
Schuck's Autoworks
Lacey WA 171,150 380,125 551,275
Golden Corral
Marysville WA 276,273 613,613 889,886
Page 171
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
La Petite Academy
Virginia Bch VA 190,290 N/A 11/15/84 300
Children's World
Woodbridge VA 192,931 N/A 09/29/88 300
Golden Corral
Auburn WA 178,771 N/A 12/16/87 300
Schuck's Autoworks
Bellevue WA 114,404 N/A 08/06/87 300
Schuck's Autoworks
Bellingham WA 103,611 N/A 08/20/87 300
Schuck's Autoworks
Bothell WA 123,042 N/A 08/20/87 300
Children's World
Everett WA 472,374 N/A 11/23/82 180
Schuck's Autoworks
Everett WA 220,040 N/A 11/17/87 300
Children's World
Federal Way WA 318,285 N/A 12/17/86 300
La Petite Academy
Federal Way WA 138,001 N/A 11/21/88 300
Schuck's Autoworks
Hazel Dell WA 89,690 N/A 05/23/88 300
Schuck's Autoworks
Kennewick WA 99,513 N/A 08/26/87 300
Children's World
Kent WA 452,036 N/A 06/03/83 180
Children's World
Kent WA 309,046 N/A 12/17/86 300
Schuck's Autoworks
Kent WA 123,038 N/A 08/06/87 300
Children's World
Kirkland WA 173,007 N/A 03/31/88 300
Schuck's Autoworks
Lacey WA 105,553 N/A 08/13/87 300
Golden Corral
Marysville WA 170,391 N/A 08/27/87 300
Page 172
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Schuck's Autoworks
Marysville WA 168,000 373,135 None None
Schuck's Autoworks
Moses Lake WA 138,600 307,831 None None
Golden Corral
Oak Harbor WA 275,940 612,874 None None
Schuck's Autoworks
Pasco WA 161,700 359,142 None None
La Petite Academy
Puyallup WA 195,552 434,327 None None
Schuck's Autoworks
Puyallup WA 173,250 384,795 None None
Azteca Restaurant
Redmond WA 610,334 1,262,103 None None
La Petite Academy
Redmond WA 279,830 621,512 None None
Schuck's Autoworks
Redmond WA 196,000 435,317 None None
Children's World
Renton WA 111,183 515,490 None None
Schuck's Autoworks
Renton WA 185,500 412,003 None None
Schuck's Autoworks
Richland WA 161,700 359,142 None None
Schuck's Autoworks
Seattle WA 162,400 360,697 None None
Schuck's Autoworks
Silverdale WA 183,808 419,777 None None
Schuck's Autoworks
Spanaway WA 189,000 419,777 None None
Schuck's Autoworks
Spokane WA 66,150 146,921 None None
27th Street Bar
& Grill
Tacoma WA 255,000 718,614 None None
Page 173
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Schuck's Autoworks
Marysville WA 168,000 373,135 541,135
Schuck's Autoworks
Moses Lake WA 138,600 307,831 446,431
Golden Corral
Oak Harbor WA 275,940 612,874 888,814
Schuck's Autoworks
Pasco WA 161,700 359,142 520,842
La Petite Academy
Puyallup WA 195,552 434,327 629,879
Schuck's Autoworks
Puyallup WA 173,250 384,795 558,045
Azteca Restaurant
Redmond WA 610,334 1,262,103 1,872,437
La Petite Academy
Redmond WA 279,830 621,512 901,342
Schuck's Autoworks
Redmond WA 196,000 435,317 631,317
Children's World
Renton WA 111,183 515,490 626,673
Schuck's Autoworks
Renton WA 185,500 412,003 597,503
Schuck's Autoworks
Richland WA 161,700 359,142 520,842
Schuck's Autoworks
Seattle WA 162,400 360,697 523,097
Schuck's Autoworks
Silverdale WA 183,808 419,777 603,585
Schuck's Autoworks
Spanaway WA 189,000 419,777 608,777
Schuck's Autoworks
Spokane WA 66,150 146,921 213,071
27th Street Bar
& Grill
Tacoma WA 255,000 718,614 973,614
Page 174
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Schuck's Autoworks
Marysville WA 103,615 N/A 08/20/87 300
Schuck's Autoworks
Moses Lake WA 85,479 N/A 08/12/87 300
Golden Corral
Oak Harbor WA 171,840 N/A 07/16/87 300
Schuck's Autoworks
Pasco WA 99,728 N/A 08/18/87 300
La Petite Academy
Puyallup WA 101,857 N/A 12/06/88 300
Schuck's Autoworks
Puyallup WA 105,813 N/A 09/15/87 300
Azteca Restaurant
Redmond WA 1,100,832 N/A 12/10/82 180
La Petite Academy
Redmond WA 174,264 N/A 07/27/87 300
Schuck's Autoworks
Redmond WA 119,706 N/A 09/17/87 300
Children's World
Renton WA 254,597 N/A 03/24/86 300
Schuck's Autoworks
Renton WA 113,293 N/A 09/15/87 300
Schuck's Autoworks
Richland WA 99,728 N/A 08/13/87 300
Schuck's Autoworks
Seattle WA 100,161 N/A 08/20/87 300
Schuck's Autoworks
Silverdale WA 115,431 N/A 09/16/87 300
Schuck's Autoworks
Spanaway WA 116,564 N/A 08/25/87 300
Schuck's Autoworks
Spokane WA 39,607 N/A 11/18/87 300
27th Street Bar
& Grill
Tacoma WA 426,966 N/A 11/06/84 300
Page 175
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Discount Tire
Store
Tacoma WA 187,111 415,579 None None
Schuck's Autoworks
Tacoma WA 191,800 425,996 None None
Schuck's Autoworks
Tacoma WA 196,000 435,324 None None
Sea Galley
Tacoma WA 198,857 921,947 None None
Schuck's Autoworks
Vancouver WA 180,250 400,343 None None
Schuck's Autoworks
Walla Walla WA 170,100 377,793 None None
Schuck's Autoworks
Wenatchee WA 148,400 329,602 None None
Schuck's Autoworks
Woodinville WA 171,500 380,908 None None
Kinder-Care
Appleton WI 196,000 424,038 None None
La Petite Academy
Brookfield WI 233,100 461,500 None None
Taco Bell
Grafton WI 149,778 332,664 None None
Car-X Muffler
& Brake
Milwaukee WI 173,005 499,244 None None
Golden Corral
Monroe WI 193,130 428,947 None None
Car-X Muffler
& Brake
New Berlin WI 188,491 466,268 None None
Golden Corral
Portage WI 199,605 443,328 None None
Golden Corral
Shawano WI 205,730 456,932 None None
Page 176
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Discount Tire
Store
Tacoma WA 187,111 415,579 602,690
Schuck's Autoworks
Tacoma WA 191,800 425,996 617,796
Schuck's Autoworks
Tacoma WA 196,000 435,324 631,324
Sea Galley
Tacoma WA 198,857 921,947 1,120,804
Schuck's Autoworks
Vancouver WA 180,250 400,343 580,593
Schuck's Autoworks
Walla Walla WA 170,100 377,793 547,893
Schuck's Autoworks
Wenatchee WA 148,400 329,602 478,002
Schuck's Autoworks
Woodinville WA 171,500 380,908 552,408
Kinder-Care
Appleton WI 196,000 424,038 620,038
La Petite Academy
Brookfield WI 233,100 461,500 694,600
Taco Bell
Grafton WI 149,778 332,664 482,442
Car-X Muffler
& Brake
Milwaukee WI 173,005 499,244 672,249
Golden Corral
Monroe WI 193,130 428,947 622,077
Car-X Muffler
& Brake
New Berlin WI 188,491 466,268 654,759
Golden Corral
Portage WI 199,605 443,328 642,933
Golden Corral
Shawano WI 205,730 456,932 662,662
Page 177
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Discount Tire
Store
Tacoma WA 82,923 N/A 01/25/90 300
Schuck's Autoworks
Tacoma WA 118,293 N/A 08/18/87 300
Schuck's Autoworks
Tacoma WA 118,531 N/A 10/15/87 300
Sea Galley
Tacoma WA 568,576 N/A 05/29/84 300
Schuck's Autoworks
Vancouver WA 111,168 N/A 08/20/87 300
Schuck's Autoworks
Walla Walla WA 104,906 N/A 08/06/87 300
Schuck's Autoworks
Wenatchee WA 91,527 N/A 08/25/87 300
Schuck's Autoworks
Woodinville WA 105,772 N/A 08/20/87 300
Kinder-Care
Appleton WI 82,485 N/A 07/10/90 300
La Petite Academy
Brookfield WI 78,446 N/A 12/13/90 300
Taco Bell
Grafton WI 90,579 N/A 10/29/87 300
Car-X Muffler
& Brake
Milwaukee WI 832 N/A 12/22/95 300
Golden Corral
Monroe WI 114,477 N/A 12/17/87 300
Car-X Muffler
& Brake
New Berlin WI 777 N/A 12/22/95 300
Golden Corral
Portage WI 118,295 N/A 12/23/87 300
Golden Corral
Shawano WI 121,928 N/A 12/17/87 300
Page 178
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
-------------------------- ------------------
Buildings,
Improvements
and
Description Acquisition Improve- Carrying
(Note 1) Land Fees ments Costs
================= ============ ============ ======== ========
Golden Corral
Sturgeon Bay WI 214,865 477,221 None None
La Petite Academy
Waukesha WI 215,950 427,546 None None
Golden Corral
Oak Hill WV 85,860 398,069 None None
C. B. Potts
Cheyenne WY 220,764 790,772 None 13,500
La Petite Academy
Cheyenne WY 59,856 277,506 None None
Golden Corral
Gillette WY 126,660 587,228 None None
Sizzler
Laramie WY 210,000 466,417 None None
Golden Corral
Riverton WY 216,685 481,267 None None
Golden Corral
Sheridan WY 117,160 543,184 None None
Other None 398,234 None 28,079
------------ ------------ -------- --------
$147,788,835 $366,434,701 $419,291 $782,721
============ ============ ======== ========
Page 179
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
----------------------------------------
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
================= ============ ============ ============
Golden Corral
Sturgeon Bay WI 214,865 477,221 692,086
La Petite Academy
Waukesha WI 215,950 427,546 643,496
Golden Corral
Oak Hill WV 85,860 398,069 483,929
C. B. Potts
Cheyenne WY 220,764 804,272 1,025,036
La Petite Academy
Cheyenne WY 59,856 277,506 337,362
Golden Corral
Gillette WY 126,660 587,228 713,888
Sizzler
Laramie WY 210,000 466,417 676,417
Golden Corral
Riverton WY 216,685 481,267 697,952
Golden Corral
Sheridan WY 117,160 543,184 660,344
Other None 426,313 426,313
------------ ------------ ------------
$147,788,835 $367,636,713 $515,425,548
============ ============ ============
Page 180
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which De-
preciation
in latest
Income
Statement
Accumulated Date of is Com-
Description Depreciation Constr- Date uted (in
(Note 1) (Note 4) uction Acquired Months)
================= ============ ======== ========== ==========
Golden Corral
Sturgeon Bay WI 127,362 N/A 12/01/87 300
La Petite Academy
Waukesha WI 72,675 N/A 12/13/90 300
Golden Corral
Oak Hill WV 233,010 N/A 12/28/84 300
C. B. Potts
Cheyenne WY 634,269 N/A 01/12/84 180
La Petite Academy
Cheyenne WY 163,682 N/A 11/20/84 300
Golden Corral
Gillette WY 295,064 N/A 01/29/86 300
Sizzler
Laramie WY 88,720 N/A 03/12/90 300
Golden Corral
Riverton WY 128,441 N/A 12/01/87 300
Golden Corral
Sheridan WY 275,261 N/A 12/31/85 300
Other 236,588 N/A Various Various
------------
$126,062,055
============
Page 181
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Note 1. Six hundred eighty two of the properties are single unit
retail outlets. Trade Center, Silverton Business Center and
Empire Business Center properties are multi-tenant commercial
properties. All properties were acquired on an all cash basis,
no encumbrances were outstanding for the periods presented.
Note 2. The aggregate cost for federal income tax purposes is
$446,365,567.
Note 3. Reconciliation of total real estate carrying value for
the three years ended December 31, 1995 are as follows:
1995 1994 1993
============ ============ ============
Balance at Beginning
of Period $450,703,481 $451,738,008 $476,962,037
Additions During
Period:
Acquisitions
-Foreclosure 0 0 950,000
Other Acquisitions 65,392,559 3,285,413 2,948,312
Equipment 0 0 70,000
Improvements, Etc. 447,720 83,571 11,800
Other
(Leasing Costs) 50,126 115,977 102,047
------------ ------------ ------------
Total Additions 65,890,405 3,484,961 4,082,159
------------ ------------ ------------
Deductions During
Period:
Cost of Real Estate
Sold (1,162,098) (4,326,985) (28,293,498)
Cost of Equipment Sold 0 (1,500) (8,500)
Other (Fully Amortized
Commissions) (6,240) (56,003) (69,190)
Other (Provision for
Impairment Losses) 0 (135,000) (935,000)
------------ ------------ ------------
Total Deductions (1,168,338) (4,519,488) (29,306,188)
------------ ------------ ------------
Balance at Close
of Period $515,425,548 $450,703,481 $451,738,008
============ ============ ============
Page 182
Continued
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Note 4. Reconciliation of accumulated depreciation for the three
years ended December 31, 1995 are as follows:
1995 1994 1993
============ ============ ============
Balance at Beginning
of Period $112,168,982 $100,133,571 $ 90,878,109
Additions During
Period-Provision
for Depreciation 14,462,491 13,788,354 14,686,439
Deductions During
Period-Accumulated
Depreciation of Real
Estate Sold (563,178) (1,696,940) (5,361,787)
Deductions During Period
-Fully Amortized
Commissions (6,240) (56,003) (69,190)
------------ ------------ ------------
Balance at Close
of Period $126,062,055 $112,168,982 $100,133,571
============ ============ ============
Note 5. Provision is made for impairment loss if estimated
undiscounted future cash flow over a long term holding period
plus estimated undiscounted disposition value is less than
current book value. A provision for impairment loss was made on
the Stone Meadow Center in Spring, TX and the Artesian Center in
Humble, TX in 1993 and on the Automall property in Mesa, AZ in
1994 and 1993.
Page 183
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
- ---------------------------------------------------------
The corporation has had no disagreements with its
independent auditors' on accountancy or financial disclosure.
PART III
========
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
This item is incorporated by reference from the definitive
proxy statement for the Annual Meeting of Shareholders presently
scheduled to be held on May 14, 1996, to be filed pursuant to
Regulation 14A.
ITEM 11: EXECUTIVE COMPENSATION
- --------------------------------
This item is incorporated by reference from the definitive
proxy statement for the Annual Meeting of Shareholders presently
scheduled to be held on May 14, 1996, to be filed pursuant to
Regulation 14A.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
- -------------------------------------------------------------
This item is incorporated by reference from the definitive
proxy statement for the Annual Meeting of Shareholders presently
scheduled to be held on May 14, 1996, to be filed pursuant to
Regulation 14A.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
This item is incorporated by reference from the definitive
proxy statement for the Annual Meeting of Shareholders presently
scheduled to be held on May 14, 1996, to be filed pursuant to
Regulation 14A.
Page 184
PART IV
=======
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
- ----------------------------------------------------------------
A. The following documents are filed as part of this
report.
1. Financial Statements (see Item 8)
a. Independent Auditors' Report
b. Consolidated Balance Sheets,
December 31, 1995 and 1994
c. Consolidated Statements of Income,
Years ended December 31, 1995, 1994 and 1993
d. Consolidated Statements of
Stockholders' Equity,
Years ended December 31, 1995, 1994 and 1993
e. Consolidated Statements of Cash Flows,
Years ended December 31, 1995, 1994 and 1993
f. Notes to Consolidated Financial Statements
g. Consolidated Quarterly Financial Data
(unaudited) for 1995 and 1994
2. Financial Statement Schedule (see Item 8)
Schedule III - Real Estate and Accumulated
Depreciation
Schedules not Filed: All schedules, other than
those indicated in the Table of Contents, have been
omitted as the required information is inapplicable
or the information is presented in the financial
statements or related notes.
3. Exhibits
2.1 Agreement and Plan of Merger between Realty
Income Corporation and R.I.C. Advisor, Inc.
dated as of April 28, 1995 (incorporated by
reference to Appendix A to the Company's
definitive Proxy Statement filed
June 30, 1995)
Page 185
3.1 Amended and Restated Certificate of
Incorporation of Realty Income Corporation
(filed as Exhibit 3.1 to the Company's 10-Q
for the quarter ended September 30, 1994 and
incorporated herein by reference)
3.2 Amended and Restated Bylaws of Realty Income
Corporation (filed as Exhibit 3.2 to the
Company's 10-Q for the quarter ended
September 30, 1995 and incorporated herein by
reference)
4.1 Indenture between the Company and Chemical
Trust Company as Trustee, including the
Variable Rate Senior Note Due 2001 (filed as
Exhibit 4.05 to the Company's Registration
Statement on Form S-4 (Registration No.
33-69410) and incorporated herein by
reference)
4.2 Form of Note (attached as Exhibit A to Exhibit
4.1 above)
4.3 Form of Stock Certificate (filed as Exhibit
4.04 to the Company's Registration Statement
on S-4 (Registration Statement No. 33-69410)
and incorporated herein by reference)
4.4 Form of Indenture (filed as Exhibit 4.3 to the
Company's Registration Statement on Form S-3
(Registration No. 33-95374) and incorporated
herein by reference)
4.5 Form of Debt Security (filed and included as
Exhibit 4.3 to the Company's Registration
Statement on Form S-3 (Registration No.
33-95374) and incorporated herein by
reference)
10.1 Revolving Credit Agreement (filed as Exhibit
99.2 to the Company's 8-K dated
December 16, 1994 and incorporated herein by
reference)
10.2 Stock Incentive Plan (filed as Exhibit 4.1 to
the Company's Registration Statement on Form
S-8 (Registration No. 33-95708) and
incorporated by reference)
21.1 Subsidiaries of the Company as of
January 1, 1996, filed herewith
Page 186
24.1 Consent of KPMG Peat Marwick LLP
27 Financial Data Schedule (electronically filed
with the Securities and Exchange Commission
only)
B. Four reports on Form 8-K were filed by registrant during
the last quarter of the period covered by this report. The
reports were dated September 29, 1995; October 30, 1995;
October 31, 1995 and December 19, 1995.
Page 187
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
REALTY INCOME CORPORATION
By: /s/ William E. Clark
-----------------------------------------------------------
William E. Clark
Chairman and Chief Executive Officer
Date: March 19, 1996
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ William E. Clark
-----------------------------------------------------------
William E. Clark
Chairman of the Board of Directors and
Chief Executive Officer
(Principal Executive Officer)
Date: March 19, 1996
By: /s/ Thomas A. Lewis
-----------------------------------------------------------
Thomas A. Lewis
Vice Chairman of the Board of Directors and
Vice President, Capital Markets
Date: March 19, 1996
Page 188
SIGNATURES (continued)
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Donald R. Cameron
-----------------------------------------------------------
Donald R. Cameron
Director
Date: March 19, 1996
By: /s/ Roger P. Kuppinger
-----------------------------------------------------------
Roger P. Kuppinger
Director
Date: March 19, 1996
By: /s/ Michael D. McKee
-----------------------------------------------------------
Michael D. McKee
Director
Date: March 19, 1996
By: /s/ Gary Malino
-----------------------------------------------------------
Gary Malino
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: March 19, 1996
By: /s/ Gregory J. Fahey
-----------------------------------------------------------
Gregory J. Fahey
Controller
Date: March 19, 1996
Page 189
EXHIBIT INDEX
=============
Exhibit No. Description Page
- ----------- ----------- ----
21.1 Subsidiaries of the Company as of
January 1, 1996...............................191
24.1 Consent of KPMG Peat Marwick LLP..............192
27 Financial Data Schedule (electronically
filed with the Securities and Exchange
Commission only)..............................193
Page 190