REALTY INCOME CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 EARNINGS PRESS RELEASE

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8-K - FORM 8-K FOR Q3-11 EARNINGS PRESS RELEASE - REALTY INCOME CORP	ri8k_q311.htm

Exhibit 99.1

CONTACT:

Tere Miller

Vice President, Corporate Communications

760-741-2111 ext. 1177

REALTY INCOME ANNOUNCES RECORD THIRD QUARTER

AND NINE MONTH OPERATING RESULTS

ESCONDIDO, CALIFORNIA, October 27, 2011...Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE: O), today announced operating results for the third quarter ended September 30, 2011. Access to this document is available at www.realtyincome.com. All per share amounts presented in this press release are on a diluted per common share basis, unless stated otherwise.

COMPANY HIGHLIGHTS:

For the quarter ended September 30, 2011 (as compared to the same quarterly period in 2010):

●Revenue increased 23.6% to $107.3 million

●FFO available to common stockholders increased 32.6% to $63.4 million

●AFFO available to common stockholders increased 32.1% to $64.2 million

●FFO per share increased 8.7% to $0.50

●AFFO per share increased 8.5% to $0.51

●Net income available to common stockholders per share increased to $0.27

●Portfolio occupancy increased to 97.7% from 97.3% last quarter

●Same store rents increased 1.8% to $81.1 million

●Invested $462.3 million in 89 new properties and properties under development

●Dividends paid per common share increased 0.9%

●The monthly dividend increased for the 56th consecutive quarter to an annualized amount of $1.74225 per share

●Raised approximately $203.6 million from common stock offering

Financial Results

Revenue

Revenue, for the quarter ended September 30, 2011, increased 23.6% to $107.3 million as compared to $86.8 million for the same quarter in 2010. Revenue for the nine months ended September 30, 2011, increased 22.3% to $307.6 million as compared to $251.6 million for the same period in 2010.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended September 30, 2011, was $34.7 million as compared to $25.6 million for the same quarter in 2010. Net income per share, for the quarter ended September 30, 2011, was $0.27 as compared to $0.25 for the same quarter in 2010.

Net income available to common stockholders, for the nine months ended September 30, 2011, was $97.8 million as compared to $74.7 million for the same period in 2010. Net income per share, for the nine months ended September 30, 2011, was $0.79 as compared to $0.72 for the same period in 2010.

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

During the third quarter of 2011, income from continuing operations available to common stockholders was $0.25 per share as compared to $0.23 per share for the same quarter in 2010.

During the first nine months of 2011, income from continuing operations available to common stockholders was $0.75 per share as compared to $0.67 per share for the same period in 2010.

FFO Available to Common Stockholders

Funds from Operations (FFO), for the quarter ended September 30, 2011, increased 32.6% to $63.4 million as compared to $47.8 million for the same quarter in 2010. FFO per share, for the quarter ended September 30, 2011, increased 8.7% to $0.50 as compared to $0.46 for the same quarter in 2010.

FFO, for the nine months ended September 30, 2011, increased 28.1% to $180.9 million as compared to $141.2 million for the same period in 2010. FFO per share, for the nine months ended September 30, 2011, increased 7.4% to $1.46 as compared to $1.36 for the same period in 2010.

AFFO Available to Common Stockholders

Adjusted Funds from Operations (AFFO), for the quarter ended September 30, 2011, increased 32.1% to $64.2 million as compared to $48.6 million for the same quarter in 2010. AFFO per share, for the quarter ended September 30, 2011, increased 8.5% to $0.51 as compared to $0.47 for the same quarter in 2010.

AFFO, for the nine months ended September 30, 2011, increased 28.4% to $184.8 million as compared to $143.9 million for the same period in 2010. AFFO per share, for the nine months ended September 30, 2011, increased 7.2% to $1.49 as compared to $1.39 for the same period in 2010.

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

Dividend Information

In September 2011, Realty Income announced the 56th consecutive quarterly dividend increase, which is the 63rd increase in the amount of the dividend since the Company’s listing on the New York Stock Exchange in 1994. The annualized dividend amount, as of September 30, 2011, was $1.74225 per share. The amount of the monthly dividends paid, for the nine months ended September 30, 2011, increased 0.9% to $1.301 per share from $1.290 per share in the same period of 2010. Through September 30, 2011, the Company has paid 494 consecutive monthly dividends, and nearly $2.1 billion in monthly dividends since 1969. Realty Income has a dividend reinvestment and stock purchase program that can be accessed at www.realtyincome.com. The program is administered by Wells Fargo Shareowner Services.

Real Estate Portfolio Update

As of September 30, 2011, Realty Income’s portfolio of freestanding, single-tenant properties consisted of 2,600 properties located in 49 states, leased to 134 retail chains and other commercial enterprises doing business in 38 industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 11.1 years. Crest Net Lease, a subsidiary company of Realty Income, had an inventory of three properties at September 30, 2011, with a carrying value of $3.0 million.

Portfolio Management Activities

The Company’s portfolio of commercial real estate, owned primarily under 15- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of September 30, 2011, portfolio occupancy was 97.7% with 59 properties available for lease out of a total of 2,600 properties in the portfolio, as compared to 97.3% portfolio occupancy as of June 30, 2011 and 96.6% as of December 31, 2010.

Rent Increases

During the quarter ended September 30, 2011, same store rents on 2,159 properties under lease increased 1.8% to $81.1 million, as compared to $79.7 million for the same quarter in 2010. During the nine months ended September 30, 2011, same store rents on 2,159 properties under lease increased 1.5% to $243.0 million, as compared to $239.3 million for the same period in 2010.

Property Acquisitions

During the third quarter of 2011, Realty Income invested $462.3 million in 89 new properties and properties under development. The new properties are located in 15 states and are 100% leased with an initial average lease term of 9.6 years and an initial average lease yield of 8.1%.

During the nine months ended September 30, 2011, Realty Income invested $826.4 million in 125 new properties and properties under development. The new properties are located in 25 states and are 100% leased with an initial average lease term of 11.3 years and an initial average lease yield of 7.9%.

Realty Income maintains a $425 million unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. As of September 30, 2011, outstanding borrowings on the Company’s acquisition credit facility were $96.6 million. In addition, the Company had cash and cash equivalents of $5.5 million at September 30, 2011.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in the third quarter of 2011. The objective of this program is to sell assets when the Company believes the reinvestment of the sales proceeds will generate higher returns, enhance the credit quality of the Company's real estate portfolio, increase the average lease length, or decrease tenant or industry concentration.

During the quarter ended September 30, 2011, Realty Income sold 12 properties for $7.4 million, which resulted in a gain on sales of $3.1 million. During the nine months ended September 30, 2011, Realty Income sold 21 properties for $12.5 million, which resulted in a gain on sales of $4.5 million.

Other Activities

Raised Approximately $203.6 million from Common Stock Offering

The Company completed a public offering of 6,300,000 shares of common stock priced at $34.00 per share. Net proceeds from the offering, after underwriting discounts and estimated offering expenses payable by the Company, were approximately $203.6 million. The offering was upsized from an original amount of 6,000,000 shares to the final offering size of 6,300,000 shares.

Direct Stock Purchase and Dividend Reinvestment Plan (the “Stock Plan”)

During the third quarter of 2011, Realty Income issued 17,081 common shares via its Stock Plan at an average price of $33.49 per share. The Plan generated gross proceeds of $583,000 during the quarter. For the nine months ended September 30, 2011, the Company issued 38,643 common shares via the Stock Plan, at an average price of $33.93 per share, raising gross proceeds of $1.34 million.

CEO Comments on Operating Results

Commenting on Realty Income’s financial results and real estate operations, Chief Executive Officer, Tom A. Lewis said, “We are pleased to report substantial increases in rental revenue and funds from operations (FFO) during the third quarter of 2011. In addition, our net-leased property portfolio continued to exhibit consistent performance during the quarter, and same store rents on 2,159 properties under lease also increased 1.8% versus the same quarter one year ago.”

“During the third quarter, we were very active in property acquisitions, investing over $462 million in 89 new properties. The new properties were acquired at an average lease yield of 8.1% and an initial average lease term of 9.6 years. This brings the total acquisition volume in 2011 to over $826 million invested in 125 new properties at an average lease yield of 7.9%, and an initial average lease term of 11.3 years. We recently revised our acquisition outlook, for 2011, from $600 to $800 million, to over $850 million that we anticipate could be invested by the end of the year. Our revised outlook is based on the continued, substantial flow of viable acquisition opportunities for us to review, opportunities that will allow us to further diversify our sources of revenue with quality tenants in solid performing industries.”

“We have been successful in permanently funding the majority of 2011 acquisitions, through a common stock offering in September 2011, that raised approximately $204 million in net proceeds, a March 2011 common stock offering where we raised about $286 million, and a $150 million re-opening in June 2011 of our 30-year bonds originally issued in 2005, all of which provided us with total permanent funding this year of approximately $640 million. Our ability to access capital this year provides us with ample liquidity to fund any additional large acquisition opportunities that may arise throughout the remainder of 2011 and into 2012.”

“Most important to our shareholders is our ability to continue to increase the amount of the monthly dividend. We are pleased that our operations, once again, allowed us to increase the dividend amount during the third quarter. Providing monthly dividends that increase over time is our mission, so we remain focused on operating the business in a manner that supports the payment of monthly dividends to our shareholders that increase over time.”

FFO Commentary

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

2011 Estimates

Realty Income estimates that 2011 FFO per share should range from $1.97 to $1.98 per share, an increase of 7.7% to 8.2% over 2010 FFO per share of $1.83. FFO per share for 2011 is based on an estimated net income per share range of $1.13 to $1.14, plus estimated real estate depreciation of $0.90, and reduced by potential gains on sales of investment properties of $0.06 per share (in accordance with NAREIT’s definition of FFO).

The Company estimates that 2011 Adjusted Funds from Operations (AFFO) should range from $2.01 to $2.02 per share, an increase of 8.1% to 8.6% over 2010 AFFO per share of $1.86. AFFO per share estimates for 2011 are based on adding back items to FFO totaling approximately $0.08, that reduce net income in accordance with Generally Accepted Accounting Principles (GAAP), and deducting capitalized expenditures and straight-line rent revenue items totaling approximately $0.04, for a net increase of approximately $0.04 over FFO.

2012 Estimates

The Company estimates that 2012 FFO per share should range from $2.07 to $2.11 per share, an increase of 4.5% to 7.1% over 2011 estimated FFO per share of $1.97 to $1.98. The FFO per share estimates for 2012 are based on an estimated net income per share range of $1.17 to $1.21, plus estimated real estate depreciation of $0.95, and reduced by potential gains on sales of investment properties of $0.05 per share (in accordance with NAREIT’s definition of FFO).

The Company estimates that 2012 Adjusted Funds from Operations (AFFO) should range from $2.11 to $2.16 per share, an increase of 4.5% to 7.5% over 2011 estimated AFFO per share of $2.01 to $2.02. The AFFO per share estimates for 2012 are based on adding back items to FFO totaling $0.08 to $0.09 that reduce net income, in accordance with GAAP, and deducting capitalized expenditures and straight-line rent revenue items totaling approximately $0.04, for a net increase of $0.04 to $0.05 over FFO.

About Realty Income

Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of September 30, 2011, the Company had paid 494 consecutive monthly dividends throughout its 42-year operating history. The monthly income is supported by the cash flows from 2,600 properties owned under long-term lease agreements with 134 leading regional and national retail chains and other commercial enterprises. The Company is an active buyer of net-leased properties nationwide. Additional information about the Company can be obtained from the corporate website at www.realtyincome.com.

Forward-Looking Statements

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

Note to Editors: Realty Income press releases are available at no charge by calling our toll-free investor hotline number: 888-811-2001, or via the internet at http://www.realtyincome.com/invest/newsroom-library/press-releases.shtml.

CONSOLIDATED STATEMENTS OF INCOME

For the three and nine months ended September 30, 2011 and 2010

(dollars in thousands, except per share amounts)

	Three Months Ended 9/30/11			Three Months Ended 9/30/10			Nine Months Ended 9/30/11			Nine Months Ended 9/30/10
REVENUE
Rental	$	106,808		$	86,749		$	306,746		$	251,237
Other		488			84			886			385
Total revenue		107,296			86,833			307,632			251,622

EXPENSES
Depreciation and amortization		31,869			23,941			87,542			70,145
Interest		28,550			25,135			79,318			68,106
General and administrative		7,143			6,165			23,001			19,526
Property		1,698			1,742			5,102			5,324
Income taxes		367			335			1,102			890
Total expenses		69,627			57,318			196,065			163,991
Income from continuing operations		37,669			29,515			111,567			87,631
Income from discontinued operations		3,111			2,139			4,460			5,276

Net income		40,780			31,654			116,027			92,907
Preferred stock cash dividends		(6,063	)		(6,063	)		(18,190	)		(18,190	)
Net income available to common stockholders	$	34,717		$	25,591		$	97,837		$	74,717

Funds from operations available to common stockholders (FFO)	$	63,405		$	47,804		$	180,936		$	141,247

Adjusted funds from operations available to common stockholders (AFFO)	$	64,239		$	48,585		$	184,847		$	143,930

Per share information for common stockholders:

Income from continuing operations, basic and diluted	$	0.25		$	0.23		$	0.75		$	0.67

Net income, basic and diluted	$	0.27		$	0.25		$	0.79		$	0.72

FFO, basic and diluted	$	0.50		$	0.46		$	1.46		$	1.36

AFFO, basic and diluted	$	0.51		$	0.47		$	1.49		$	1.39

Cash dividends paid per share	$	0.435		$	0.431		$	1.301		$	1.290

FUNDS FROM OPERATIONS (FFO)

(dollars in thousands, except per share amounts)

	Three Months Ended 9/30/11			Three Months Ended 9/30/10			Nine Months Ended 9/30/11			Nine Months Ended 9/30/10

Net income available to common stockholders	$	34,717		$	25,591		$	97,837		$	74,717
Depreciation and amortization:
Continuing operations		31,869			23,941			87,542			70,145
Discontinued operations		26			260			264			892
Depreciation of furniture, fixtures & equipment		(58	)		(69	)		(178	)		(223	)
Gain on sales of investment properties:
Continuing operations		(55	)		--			(210	)		--
Discontinued operations		(3,094	)		(1,919	)		(4,319	)		(4,284	)
Funds from operations available to common stockholders	$	63,405		$	47,804		$	180,936		$	141,247

FFO per common share, basic and diluted	$	0.50		$	0.46		$	1.46		$	1.36

Dividends paid to common stockholders	$	55,145		$	45,026		$	161,276		$	134,700

FFO in excess of dividends paid to common stockholders	$	8,260		$	2,778		$	19,660		$	6,547

Weighted average number of common shares used for computation per share:
Basic		126,376,201			103,830,029			123,921,317			103,781,108
Diluted		126,582,609			103,977,023			124,013,142			103,887,679

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

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(dollars in thousands, except per share amounts)

Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution).

	Three Months Ended 9/30/11			Three Months Ended 9/30/10			Nine Months Ended 9/30/11			Nine Months Ended 9/30/10

Net income available to common stockholders	$	34,717		$	25,591		$	97,837		$	74,717
Cumulative adjustments to calculate FFO(1)		28,688			22,213			83,099			66,530
FFO available to common stockholders	$	63,405			47,804		$	180,936			141,247
Amortization of share-based compensation		1,751			1,347			6,098			4,824
Amortization of deferred financing costs(2)		486			431			1,335			1,114
Provisions for impairment		169			84			378			171
Capitalized leasing costs and commissions		(595	)		(238	)		(1,243	)		(874	)
Capitalized building improvements		(528	)		(438	)		(1,737	)		(1,404	)
Other adjustments(3)		(449	)		(405	)		(920	)		(1,148	)
Total AFFO available to common stockholders	$	64,239		$	48,585		$	184,847		$	143,930

AFFO per common share, basic and diluted	$	0.51		$	0.47		$	1.49		$	1.39

Dividends paid to common stockholders	$	55,145		$	45,026		$	161,276		$	134,700

AFFO in excess of dividends paid to common stockholders	$	9,094		$	3,559		$	23,571		$	9,230

(1)	See FFO calculation above for reconciling items.

(2)

Includes the amortization of costs incurred and capitalized when our senior notes were issued in March 2003, November 2003, March 2005, September 2005, September 2006, September 2007, June 2010 and June 2011. Additionally, this includes the amortization of deferred financing costs incurred and capitalized in connection with our assumption of the mortgages payable in 2011. These costs are being amortized over the lives of the respective mortgages. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.

(3)	Includes straight-line rent revenue, and the amortization of above and below-market leases.

HISTORICAL FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)



For the three months ended September 30,	2011			2010			2009			2008			2007

Net income available to common stockholders	$	34,717		$	25,591		$	27,089		$	28,634		$	27,910
Depreciation and amortization		31,837			24,132			22,879			22,844			19,514
Gain on sales of investment properties		(3,149	)		(1,919	)		(1,814	)		(5,730	)		(799	)
Total FFO	$	63,405		$	47,804		$	48,154		$	45,748		$	46,625

Total FFO per diluted share	$	0.50		$	0.46		$	0.47		$	0.46		$	0.47

Total FFO	$	63,405		$	47,804		$	48,154		$	45,748		$	46,625
Less FFO contributed by Crest		(190	)		(221	)		(207	)		(238	)		(1,937	)
FFO before Crest contribution	$	63,215		$	47,583		$	47,947		$	45,510		$	44,688

FFO components, per diluted share(1):
FFO before Crest contribution	$	0.50		$	0.46		$	0.46		$	0.45		$	0.45
Crest FFO contribution	$	0.00		$	0.00		$	0.00		$	0.00		$	0.02

Total FFO	$	0.50		$	0.46		$	0.47		$	0.46		$	0.47

AFFO	$	64,239		$	48,585		$	48,499		$	46,696		$	47,571

AFFO per diluted share	$	0.51		$	0.47		$	0.47		$	0.47		$	0.47

Cash dividends paid per share	$	0.435		$	0.431		$	0.427		$	0.417		$	0.391
Weighted average diluted shares outstanding		126,582,609			103,977,023			103,481,892			100,420,070			100,252,953


For the nine months ended September 30,	2011			2010			2009			2008			2007

Net income available to common stockholders	$	97,837		$	74,717		$	77,606		$	79,320		$	89,043
Depreciation and amortization		87,628			70,814			68,713			68,616			56,071
Gain on sales of investment properties		(4,529	)		(4,284	)		(4,250	)		(9,439	)		(3,190	)
Total FFO	$	180,936		$	141,247		$	142,069		$	138,497		$	141,924

Total FFO per diluted share	$	1.46		$	1.36		$	1.37		$	1.38		$	1.41

Total FFO	$	180,936		$	141,247		$	142,069		$	138,497		$	141,924
Less FFO contributed by Crest		(559	)		(585	)		(308	)		(1,338	)		(7,967	)
FFO before Crest contribution	$	180,377		$	140,662		$	141,761		$	137,159		$	133,957

FFO components, per diluted share(1):
FFO before Crest contribution	$	1.45		$	1.35		$	1.37		$	1.37		$	1.34
Crest FFO contribution	$	0.00		$	0.01		$	0.00		$	0.01		$	0.08

Total FFO	$	1.46		$	1.36		$	1.37		$	1.38		$	1.41

AFFO	$	184,847		$	143,930		$	144,118		$	144,604		$	144,768

AFFO per diluted share	$	1.49		$	1.39		$	1.39		$	1.44		$	1.44

Cash dividends paid per share	$	1.301		$	1.290		$	1.279		$	1.239		$	1.152
Weighted average diluted shares outstanding		124,013,142			103,887,679			103,532,894			100,462,396			100,326,859

(1) The above FFO per share amounts have been rounded to the nearest two decimals and, as such, the individual amounts may not add up to the “Total FFO” amount.

CONSOLIDATED BALANCE SHEETS

As of September 30, 2011 and December 31, 2010

(dollars in thousands, except per share amounts)

	2011			2010
ASSETS
Real estate, at cost:
Land	$	1,689,523		$	1,520,413
Buildings and improvements		3,111,258			2,592,449
Total real estate, at cost		4,800,781			4,112,862
Less accumulated depreciation and amortization		(786,863	)		(711,615	)
Net real estate held for investment		4,013,918			3,401,247
Real estate held for sale, net		4,158			3,631
Net real estate		4,018,076			3,404,878
Cash and cash equivalents		5,543			17,607
Accounts receivable, net		12,065			11,301
Goodwill		17,206			17,206
Other assets, net		221,884			84,598
Total assets	$	4,274,774		$	3,535,590

LIABILITIES AND STOCKHOLDERS’ EQUITY
Distributions payable	$	21,360		$	19,051
Accounts payable and accrued expenses		34,538			47,019
Other liabilities		28,584			22,555
Line of credit payable		96,600			--
Mortgages payable, net		68,150			--
Notes payable		1,750,000			1,600,000
Total liabilities		1,999,232			1,688,625

Stockholders’ equity:
Preferred stock and paid in capital, par value $0.01 per share, 20,000,000 shares authorized, 13,900,000 issued and outstanding in 2011 and 2010		337,790			337,790
Common stock and paid in capital, par value $0.01 per share, 200,000,000 shares authorized, 133,202,323 and 118,058,988 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively		2,560,612			2,066,287
Distributions in excess of net income		(622,860	)		(557,112	)
Total stockholders’ equity		2,275,542			1,846,965
Total liabilities and stockholders’ equity	$	4,274,774		$	3,535,590

Realty Income Performance vs. Major Stock Indices

			Equity						NASDAQ
	Realty Income		REIT Index(1)		DJIA		S&P 500		Composite
	Dividend	Total	Dividend	Total	Dividend	Total	Dividend	Total	Dividend	Total
	Yield	Return(2)	Yield	Return(3)	Yield	Return(3)	Yield	Return(3)	Yield	Return(4)

1995	8.3%	42.0%	7.4%	15.3%	2.4%	36.9%	2.3%	37.6%	0.6%	39.9%
1996	7.9%	15.4%	6.1%	35.3%	2.2%	28.9%	2.0%	23.0%	0.2%	22.7%
1997	7.5%	14.5%	5.5%	20.3%	1.8%	24.9%	1.6%	33.4%	0.5%	21.6%
1998	8.2%	5.5%	7.5%	(17.5%)	1.7%	18.1%	1.3%	28.6%	0.3%	39.6%
1999	10.5%	(8.7%)	8.7%	(4.6%)	1.3%	27.2%	1.1%	21.0%	0.2%	85.6%
2000	8.9%	31.2%	7.5%	26.4%	1.5%	(4.7%)	1.2%	(9.1%)	0.3%	(39.3%)
2001	7.8%	27.2%	7.1%	13.9%	1.9%	(5.5%)	1.4%	(11.9%)	0.3%	(21.1%)
2002	6.7%	26.9%	7.1%	3.8%	2.6%	(15.0%)	1.9%	(22.1%)	0.5%	(31.5%)
2003	6.0%	21.0%	5.5%	37.1%	2.3%	28.3%	1.8%	28.7%	0.6%	50.0%
2004	5.2%	32.7%	4.7%	31.6%	2.2%	5.6%	1.8%	10.9%	0.6%	8.6%
2005	6.5%	(9.2%)	4.6%	12.2%	2.6%	1.7%	1.9%	4.9%	0.9%	1.4%
2006	5.5%	34.8%	3.7%	35.1%	2.5%	19.0%	1.9%	15.8%	0.8%	9.5%
2007	6.1%	3.2%	4.9%	(15.7%)	2.7%	8.8%	2.1%	5.5%	0.8%	9.8%
2008	7.3%	(8.2%)	7.6%	(37.7%)	3.6%	(31.8%)	3.2%	(37.0%)	1.3%	(40.5%)
2009	6.6%	19.3%	3.7%	28.0%	2.6%	22.6%	2.0%	26.5%	1.0%	43.9%
2010	5.1%	38.6%	3.5%	27.9%	2.6%	14.0%	1.9%	15.1%	1.2%	16.9%
YTD Q3 2011	5.4%	(1.9%)	4.1%	(6.0%)	2.9%	(3.9%)	2.3%	(8.7%)	1.1%	(9.0%)
Compounded Average Annual Total Return(5)		16.9%		9.8%		8.6%		7.3%		7.0%

Note: All of these Dividend Yields are calculated as annualized dividend based on last dividend paid in applicable time period divided by closing price as of period end. Dividend Yield sources: NAREIT website and Bloomberg.

(1)

FTSE NAREIT US Equity REIT Index, as per NAREIT website.

(2)	Calculated as the difference between the closing stock price as of period end less the closing stock price as of previous period, plus dividends paid in period, divided by closing stock price as of end of previous period. Does not include reinvestment of dividends.

(3)

Includes reinvestment of dividends. Sources: NAREIT website and Factset.

(4)

Price only index, does not include dividends. Source: Factset.

(5)

All of these Compounded Average Annual Total Return rates are calculated in the same manner: from Realty Income's NYSE listing on October 18, 1994 through September 30, 2011, and assuming reinvestment of dividends, except for NASDAQ. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future.

Property Type Diversification

The following table sets forth certain property type information regarding Realty Income’s property portfolio as of September 30, 2011 (dollars in thousands):

			Approximate		Rental Revenue for		Percentage of
	Number of		Leasable		the Quarter Ended		Rental
Property Type	Properties		Square Feet		September 30, 2011(1)		Revenue
Retail		2,545		21,602,900	$	91,710		85.8	%
Agriculture		14		184,500		4,937		4.6
Distribution		12		1,979,300		3,378		3.2
Manufacturing		6		1,418,600		2,492		2.3
Office		8		778,500		2,786		2.6
Industrial		15		850,500		1,543		1.5
Totals		2,600		26,814,300	$	106,846		100.0	%

(1)	Includes rental revenue for all properties owned by Realty Income at September 30, 2011, including revenue from properties reclassified to discontinued operations of $56. Excludes revenue of $18 from properties owned by Crest.

Industry Diversification

The following table sets forth certain information regarding Realty Income’s property portfolio classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:

	Percentage of Rental Revenue(1)
	For the Quarter			For the Years Ended
Industries	Ended September 30, 2011			Dec 31, 2010			Dec 31, 2009			Dec 31, 2008			Dec 31, 2007			Dec 31, 2006			Dec 31, 2005
Apparel stores		1.4	%		1.2	%		1.1	%		1.1	%		1.2	%		1.7	%		1.6	%
Automotive collision services		0.9			1.0			1.1			1.0			1.1			1.3			1.3
Automotive parts		1.1			1.4			1.5			1.6			2.1			2.8			3.4
Automotive service		3.7			4.7			4.8			4.8			5.2			6.9			7.6
Automotive tire services		5.2			6.4			6.9			6.7			7.3			6.1			7.2
Aviation		0.8			--			--			--			--			--			--
Beverages		5.6			3.0			--			--			--			--			--
Book stores		0.1			0.1			0.2			0.2			0.2			0.2			0.3
Business services		*			*			*			*			0.1			0.1			0.1
Child care		5.2			6.5			7.3			7.6			8.4			10.3			12.7
Consumer electronics		0.5			0.6			0.7			0.8			0.9			1.1			1.3
Convenience stores		18.3			17.1			16.9			15.8			14.0			16.1			18.7
Crafts and novelties		0.2			0.3			0.3			0.3			0.3			0.4			0.4
Drug stores		3.8			4.1			4.3			4.1			2.7			2.9			2.8
Education		0.7			0.8			0.9			0.8			0.8			0.8			0.8
Entertainment		1.0			1.2			1.3			1.2			1.4			1.6			2.1
Equipment services		0.4			0.2			0.2			0.2			0.2			0.2			0.4
Financial services		0.6			0.2			0.2			0.2			0.2			0.1			0.1
Food processing		1.1			--			--			--			--			--			--
General merchandise		0.6			0.8			0.8			0.8			0.7			0.6			0.5
Grocery stores		1.5			0.9			0.7			0.7			0.7			0.7			0.7
Health and fitness		6.1			6.9			5.9			5.6			5.1			4.3			3.7
Home furnishings		1.1			1.3			1.3			2.4			2.6			3.1			3.7
Home improvement		1.6			2.0			2.2			2.1			2.4			3.4			1.1
Motor vehicle dealerships		2.4			2.6			2.7			3.2			3.1			3.4			2.6
Office supplies		0.8			0.9			1.0			1.0			1.1			1.3			1.5
Packaging		0.7			--			--			--			--			--			--
Paper		0.2			--			--			--			--			--			--
Pet supplies and services		0.7			0.9			0.9			0.8			0.9			1.1			1.3
Restaurants - casual dining		10.9			13.4			13.7			14.3			14.9			7.0			5.5
Restaurants - quick service		6.4			7.7			8.3			8.2			6.6			4.9			3.9
Shoe stores		0.2			0.1			--			--			--			--			0.3
Sporting goods		2.6			2.7			2.6			2.3			2.6			2.9			3.4
Telecommunications		0.9			--			--			--			--			--			--
Theaters		9.2			8.9			9.2			9.0			9.0			9.6			5.2
Transportation services		2.1			0.2			0.2			0.2			0.2			0.3			0.3
Video rental		0.0			0.2			1.0			1.1			1.7			2.1			2.5
Wholesale clubs		*			--			--			--			--			--			--
Other		1.4			1.7			1.8			1.9			2.3			2.7			3.0
Totals		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

* Less than 0.1%

(1) Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified as discontinued operations. Excludes revenue from properties owned by Crest.

Tenant Diversification

Largest Tenants based on Percentage of Total Portfolio Rental Revenue at September 30, 2011
AMC Theatres	5.4%	NPC International/Pizza Hut	2.7%
Diageo	5.0%	BJ’s Wholesale Club	2.7%
L.A. Fitness	4.7%	Rite Aid	2.7%
Northern Tier Energy/Super America	4.5%	FreedomRoads/Camping World	2.4%
Hometown Buffet	4.3%	La Petite Academy	2.3%
Friendly’s Ice Cream	3.6%	TBC Corporation	2.3%
Regal Cinemas	3.5%	Couche-Tard/Circle K	2.2%
The Pantry	3.2%

Lease Expirations

The following table sets forth certain information regarding Realty Income's property portfolio regarding the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on our 2,526 net leased, single-tenant properties as of September 30, 2011 (dollars in thousands):

	Total Portfolio									Initial Expirations(3)							Subsequent Expirations(4)
Year	Number of Leases Expiring(1)		Approx. Leasable Sq. Feet		Rental Revenue for the Quarter Ended Sept. 30, 2011(2)		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended Sept. 30, 2011		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended Sept. 30, 2011		% of Total Rental Revenue
2011		44		319,800	$	1,143		1.1	%		18	$	513		0.5	%		26	$	630		0.6	%
2012		155		1,093,400		3,440		3.3			43		1,350		1.3			112		2,090		2.0
2013		162		1,367,500		5,325		5.1			65		2,976		2.8			97		2,349		2.3
2014		126		990,600		3,694		3.5			31		1,641		1.6			95		2,053		1.9
2015		158		891,800		4,059		3.9			79		2,391		2.3			79		1,668		1.6
2016		162		839,200		3,442		3.3			113		2,296		2.2			49		1,146		1.1
2017		58		722,200		2,493		2.4			41		2,141		2.1			17		352		0.3
2018		84		1,242,900		3,307		3.2			74		3,040		2.9			10		267		0.3
2019		140		1,565,700		6,643		6.3			132		6,220		5.9			8		423		0.4
2020		85		1,597,400		4,889		4.7			75		4,544		4.4			10		345		0.3
2021		186		1,975,600		8,502		8.1			178		7,934		7.6			8		568		0.5
2022		105		879,400		4,457		4.3			104		4,409		4.3			1		48		*
2023		252		2,094,000		9,887		9.4			250		9,814		9.3			2		73		0.1
2024		63		565,000		2,448		2.3			63		2,448		2.3			--		--		--
2025-2043		746		9,163,500		41,073		39.1			730		40,717		38.8			16		356		0.3
Totals		2,526		25,308,000	$	104,802		100.0	%		1,996	$	92,434		88.3	%		530	$	12,368		11.7	%

*Less than 0.1%

(1)	Excludes 15 multi-tenant properties and 59 vacant unleased properties, one of which is a multi-tenant property. The lease expirations for properties under construction are based on the estimated date of completion of those properties.

(2)	Includes rental revenue of $56 from properties reclassified as discontinued operations and excludes revenue of $2,044 from 15 multi-tenant properties and from 59 vacant and unleased properties at September 30, 2011. Excludes revenue of $18 from three properties owned by Crest.

(3)	Represents leases to the initial tenant of the property that are expiring for the first time.

(4)	Represents lease expirations on properties in the portfolio, which have previously been renewed, extended or re-tenanted.

Geographic Diversification

The following table sets forth certain state-by-state information regarding Realty Income's property portfolio as of September 30, 2011 (dollars in thousands):

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Rental Revenue for the Quarter Ended September 30, 2011(1)		Percentage of Rental Revenue
Alabama		62		97	%		420,200	$	1,851		1.7	%
Alaska		2		100			128,500		287		0.3
Arizona		83		98			561,700		2,845		2.7
Arkansas		17		100			92,400		383		0.4
California		93		100			2,159,400		11,186		10.5
Colorado		59		97			499,000		1,913		1.8
Connecticut		23		96			269,100		1,185		1.1
Delaware		17		100			33,300		431		0.4
Florida		184		97			1,926,000		7,642		7.2
Georgia		144		97			1,273,300		4,750		4.4
Hawaii		--		--			--		--		--
Idaho		12		83			80,700		316		0.3
Illinois		101		99			1,335,900		5,995		5.6
Indiana		81		96			799,000		3,555		3.3
Iowa		21		100			290,600		1,021		1.0
Kansas		37		92			642,900		1,330		1.2
Kentucky		23		100			134,700		707		0.7
Louisiana		33		100			296,300		1,199		1.1
Maine		3		100			22,500		162		0.1
Maryland		29		100			384,000		1,611		1.5
Massachusetts		64		98			575,400		2,551		2.4
Michigan		54		100			287,200		1,326		1.2
Minnesota		150		100			1,003,600		6,755		6.3
Mississippi		72		97			360,700		1,588		1.5
Missouri		76		96			1,027,500		3,642		3.4
Montana		2		100			30,000		77		0.1
Nebraska		19		95			196,300		491		0.5
Nevada		14		100			308,800		1,002		0.9
New Hampshire		15		100			217,200		592		0.6
New Jersey		33		100			260,400		1,945		1.8
New Mexico		9		100			58,400		198		0.2
New York		42		98			776,200		2,820		2.6
North Carolina		94		100			572,400		3,007		2.8
North Dakota		6		100			36,600		59		0.1
Ohio		135		96			1,127,400		3,841		3.6
Oklahoma		35		100			752,400		1,505		1.4
Oregon		19		100			373,500		1,160		1.1
Pennsylvania		103		99			905,800		3,646		3.4
Rhode Island		3		100			11,000		59		0.1
South Carolina		98		100			371,400		2,314		2.2
South Dakota		10		100			89,800		186		0.2
Tennessee		129		97			747,800		2,980		2.8
Texas		216		97			3,176,700		9,958		9.3
Utah		5		100			92,100		251		0.2
Vermont		4		100			12,700		128		0.1
Virginia		105		98			1,519,400		4,328		4.0
Washington		34		94			276,500		997		0.9
West Virginia		2		100			23,000		121		0.1
Wisconsin		27		93			269,200		950		0.9
Wyoming		1		0			5,400		0		0.0
Totals/Average		2,600		98	%		26,814,300	$	106,846		100.0	%

(1)	Includes rental revenue for all properties owned by Realty Income at September 30, 2011, including revenue from properties reclassified as discontinued operations of $56. Excludes revenue of $18 from properties owned by Crest.

REALTY INCOME CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 EARNINGS PRESS RELEASE - October 27, 2011

Attached files

REALTY INCOME CORP Reports