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 Q3-10 EARNINGS PRESS RELEASE - REALTY INCOME CORP	ri8k_q310.htm

Exhibit 99.1

CONTACT:

Tere Miller

Vice President, Corporate Communications

760-741-2111 ext. 1177

REALTY INCOME ANNOUNCES THIRD QUARTER

AND NINE MONTH OPERATING RESULTS

ESCONDIDO, CALIFORNIA, October 27, 2010...Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE: O), today announced operating results for the third quarter ended September 30, 2010. 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, 2010,

as compared to the same quarterly period in 2009)

●Revenue increased 7.0% to $87.2 million as compared to $81.5 million

●FFO available to common stockholders decreased 0.8% to $47.8 million

●FFO per share decreased 2.1% to $0.46

●AFFO per share was unchanged at $0.47

●Net income available to common stockholders per share was $0.25

●Portfolio occupancy increased to 96.4%

●Same store rents increased 0.3% to $78.7 million

●Dividends paid per common share increased 0.9%

●The monthly dividend increased for the 52nd consecutive quarter to an annualized amount of $1.72725 per share

●Invested $13.9 million in two new properties

●Raised $197 million from common stock offering

Financial Results

Revenue

Revenue, for the quarter ended September 30, 2010, increased 7.0% to $87.2 million as compared to $81.5 million for the same quarter in 2009. Revenue, for the nine months ended September 30, 2010, increased 3.6% to $253.2 million as compared to $244.5 million for the same period in 2009.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended September 30, 2010, was $25.6 million as compared to $27.1 million for the same quarter in 2009. Net income per share for the quarter was $0.25 as compared to $0.26 for the same quarter in 2009.

Net income available to common stockholders, for the nine months ended September 30, 2010, was $74.7 million as compared to $77.6 million for the same period in 2009. Net income per share, for the nine months ended September 30, 2010, was $0.72 as compared to $0.75 for the same period in 2009.

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

During the third quarter of 2010, income from continuing operations available to common stockholders was $0.23 per share as compared to $0.24 per share for the same quarter in 2009.

During the first nine months of 2010, income from continuing operations available to common stockholders was $0.68 per share as compared to $0.70 per share for the same period in 2009.

FFO Available to Common Stockholders

Funds from Operations (FFO), for the quarter ended September 30, 2010, decreased 0.8% to $47.8 million as compared to $48.2 million for the same quarter in 2009. FFO per share, for the quarter ended September 30, 2010, decreased 2.1% to $0.46 as compared to $0.47 for the same quarter in 2009.

FFO, for the nine months ended September 30, 2010, decreased 0.6% to $141.2 million as compared to $142.1 million for the same period in 2009. FFO per share, for the nine months ended September 30, 2010, decreased 0.7% to $1.36 as compared to $1.37 for the same period in 2009.

AFFO Available to Common Stockholders

Adjusted Funds from Operations (AFFO), for the quarter ended September 30, 2010, was $48.6 million as compared to $48.5 million for the same quarter in 2009. AFFO per share, for the quarter ended September 30, 2010, was unchanged at $0.47 as compared to the same quarter in 2009.

AFFO, for the nine months ended September 30, 2010, was $143.9 million as compared to $144.1 million for the same period in 2009. AFFO per share, for the nine months ended September 30, 2010, was unchanged at $1.39 as compared to the same period in 2009.

The Company considers FFO and AFFO to be appropriate supplemental measures of a Real Estate Investment Trust’s (REIT’s) operating performance as they are based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. FFO and AFFO are alternative, non-GAAP measures that are also considered to be good indicators of a company’s ability to generate income to pay dividends. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust’s (NAREIT’s) definition as net income available to common stockholders plus depreciation and amortization of real estate assets, reduced by gains on sales of investment properties and extraordinary items. AFFO further adjusts FFO by adding back non-cash items that reduce net income in accordance with GAAP, and deducting such items as capitalized expenditures and straight-line rent revenue. See our reconciliation of net income available to common stockholders to FFO and AFFO on page seven.

Dividend Information

In September 2010, Realty Income announced the 52nd consecutive quarterly dividend increase, which is the 59th 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, 2010, was $1.72725 per share. The amount of the monthly dividends paid, for the nine months ended September 30, 2010, increased 0.9% to $1.290 per share from $1.279 per share compared to the same period in 2009. Through September 30, 2010, the Company has paid 482 consecutive monthly dividends.

Real Estate Portfolio Update

As of September 30, 2010, Realty Income’s portfolio of freestanding, single-tenant properties consisted of 2,342 properties located in 49 states, leased to 118 commercial enterprises doing business in 32 industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 11.2 years.

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, 2010, portfolio occupancy was 96.4% with 84 properties available for lease out of a total of 2,342 properties in the portfolio.

Rent Increases

During the quarter ended September 30, 2010, same store rents on 2,148 properties under lease increased 0.3%, as compared to the same quarter in 2009. During the nine months ended September 30, 2010, same store rents on 2,148 properties under lease increased 0.4%, as compared to the same period in 2009.

Property Acquisitions

During the third quarter of 2010, Realty Income invested $13.9 million in two new properties. The new properties are located in two states and are 100% leased with an initial average lease term of 17.4 years and an initial average lease yield of 7.8%.

During the nine months ended September 30, 2010, Realty Income invested $302.9 million in 23 new properties. The new properties are located in eight states and are 100% leased with an initial average lease term of 18.3 years and an initial average lease yield of 7.6%.

Realty Income maintains a $355 million unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. As of September 30, 2010, there were no outstanding borrowings on the Company’s acquisition credit facility and the full $355 million was available to fund new property acquisitions. In addition, the Company had cash and cash equivalents of $155.6 million at September 30, 2010.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in 2010. 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, 2010, Realty Income sold nine properties for $8.9 million, which resulted in a gain on sales of $1.9 million. During the nine months ended September 30, 2010, Realty Income sold 19 properties for $16.7 million, which resulted in a gain on sales of $4.3 million.

Other Activities

Offering of 6.2 Million Shares of Common Stock

In September 2010, Realty Income issued 6,198,500 shares of the Company’s common stock, including 808,500 shares purchased by the underwriters upon the exercise of their over-allotment option. Net proceeds from the offering, after underwriting discounts and offering expenses payable by the Company, were approximately $196.9 million.

Acquisition of 23 Properties for Approximately $126.5 Million Leased to 13 Tenants

Subsequent to the end of the third quarter 2010, Realty Income acquired 23 retail properties leased to 13 different tenants in six different states, for approximately $126.5 million, under long-term lease agreements. The properties are in eight different industries, all of which are already in the Company’s portfolio. These acquisitions were funded by the Company’s common stock offering in September 2010.

Acquisition of Approximately $250 Million of Properties in Sale-Leaseback Transaction

During October 2010, Realty Income signed a purchase agreement to acquire 136 retail properties for approximately $250 million under long-term, net-lease agreements. The properties are of a type the Company already has in its portfolio. While Realty Income’s acquisition of these properties is subject to a number of conditions, it is anticipated that the transaction should be completed within the next 90 days. If the transaction is completed, Realty Income expects to fund the purchase price with cash on hand, borrowings under its acquisition credit facility, and/or the possible issuance of public securities. The Company also said it plans to disclose further information about this acquisition subsequent to its completion.

Crest Net Lease

Crest is focused on acquiring and subsequently marketing net-leased properties for sale. Crest did not acquire or sell any properties during the third quarter. At September 30, 2010, Crest’s property inventory consisted of three properties valued at $3.8 million. During the third quarter of 2010 and 2009, Crest did not contribute to Realty Income’s FFO per share. For the nine months ended September 30, 2010, Crest contributed $0.01 per share to Realty Income’s FFO per share as compared to $0.00 for the same period in 2009.

CEO Comments on Operating Results

Commenting on Realty Income’s financial results and real estate operations, Chief Executive Officer Tom A. Lewis said, “We continue to enjoy steady performance in our property portfolio and business operations that support the payment of monthly dividends to our shareholders. Our focus during the third quarter was on preparing for additional property acquisitions while maintaining a high level of portfolio occupancy.”

“During the quarter, we reviewed numerous acquisition opportunities and purchased two new properties for $13.9 million, which brought our year-to-date acquisitions to 23 properties acquired for $303 million. The properties

acquired during the first nine months of this year have initial average lease lengths of just over 18 years and initial lease yields of 7.6%. Subsequent to the end of the third quarter, we acquired 23 additional properties for over $126 million and also announced an agreement to acquire approximately $250 million in additional properties which, if completed during the fourth quarter, would bring total acquisitions for 2010 to approximately $700 million at initial lease yields of approximately 8%. We believe these acquisitions will have a meaningful impact on our revenue and FFO during 2011 and beyond.”

“We were also successful in permanently financing the 2010 properties we have acquired to date by issuing 6.2 million common shares in an offering where the over-allotment was exercised, providing us with net proceeds of about $197 million. This capital raise, combined with our second quarter issuance of $250 million of 5.75% senior unsecured notes, leaves us in a very liquid position to pursue additional acquisition opportunities during the balance of the year and into 2011.”

“During the third quarter, we continued to enjoy strong performance in our real estate portfolio with occupancy increasing to 96.4% and same store rents increasing 0.3%. Absent additional unforeseen difficulties in the economy, we believe we may have seen the worst of the impact of the recession on the portfolio, and we would anticipate an increased level of occupancy and same store rent growth over the next year.”

“Finally, our solid operating performance allowed us to increase the amount of the dividend once again 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 that increase over time to our shareholders.”

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, charges for property impairments, and the operations of Crest.

2010 Estimates

Management estimates that FFO per share for 2010 should range from $1.82 to $1.83, which represents an annual FFO per share decrease of 0.5% to 1.1%, as compared to 2009 FFO per share of $1.84. FFO for 2010 is based on an estimated net income per share range of $0.97 to $0.98 plus (in accordance with NAREIT’s definition of FFO) estimated real estate depreciation of $0.90 and reduced by potential gain on sales of investment properties of $0.05 per share.

2011 Estimates

Management estimates that FFO per share for 2011 should range between $1.96 to $2.01 per share, or an increase of 7.1% to 10.4% in annual FFO growth, compared to its 2010 estimate of $1.82 to $1.83. FFO for 2011 is based on an estimated net income per share range of $1.09 to $1.14 plus (in accordance with NAREIT’s definition of FFO) estimated real estate depreciation of $0.90 and reduced by potential gains on sales of investment properties of $0.03 per share.

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, 2010, the Company had paid 482 consecutive monthly dividends throughout its 41-year operating history. The monthly income is supported by the cash flows from over 2,342 properties owned under long-term lease agreements with regional and national retail chains and other commercial enterprises. The Company is an active buyer of net-leased properties nationwide.

Forward-Looking Statements

Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the Company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, the outcome of any legal proceedings to which the Company is a party, and the profitability of Crest, the Company’s subsidiary, as described in the Company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or

forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

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

CONSOLIDATED STATEMENTS OF INCOME

For the three and nine months ended September 30, 2010 and 2009

(dollars in thousands, except per share amounts)

	Three Months Ended 9/30/10			Three Months Ended 9/30/09			Nine Months Ended 9/30/10			Nine Months Ended 9/30/09
REVENUE
Rental	$	87,089		$	81,036		$	252,369		$	243,292
Other		84			427			854			1,255
Total revenue		87,173			81,463			253,223			244,547

EXPENSES
Depreciation and amortization		24,100			22,680			70,621			67,976
Interest		25,135			21,374			68,106			64,151
General and administrative		6,165			4,906			19,526			15,862
Property		1,763			1,472			5,355			5,290
Income taxes		335			74			890			684
Total expenses		57,498			50,506			164,498			153,963
Income from continuing operations		29,675			30,957			88,725			90,584
Income from discontinued operations:
Real estate acquired for resale by Crest		221			207			585			308
Real estate held for investment		1,758			1,988			3,597			4,904
Total income from discontinued operations		1,979			2,195			4,182			5,212

Net income		31,654			33,152			92,907			95,796
Preferred stock cash dividends		(6,063	)		(6,063	)		(18,190	)		(18,190	)
Net income available to common stockholders	$	25,591		$	27,089		$	74,717		$	77,606

Funds from operations available to common stockholders (FFO)	$	47,804		$	48,154		$	141,247		$	142,069
Adjusted funds from operations (AFFO)	$	48,585		$	48,499		$	143,930		$	144,118

Per share information for common stockholders:
Income from continuing operations: Basic and diluted	$	0.23		$	0.24		$	0.68		$	0.70
Net income: Basic and diluted	$	0.25		$	0.26		$	0.72		$	0.75
FFO, basic(1):
FFO before Crest contribution	$	0.46		$	0.46		$	1.36		$	1.37
Crest Net Lease	$	0.00		$	0.00		$	0.01		$	0.00
Total FFO	$	0.46		$	0.47		$	1.36		$	1.37
FFO, diluted(1):
FFO before Crest contribution	$	0.46		$	0.46		$	1.35		$	1.37
Crest Net Lease	$	0.00		$	0.00		$	0.01		$	0.00
Total FFO	$	0.46		$	0.47		$	1.36		$	1.37

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

Cash dividends paid	$	0.431		$	0.427		$	1.290		$	1.279

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

FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

	Three Months Ended 9/30/10			Three Months Ended 9/30/09			Nine Months Ended 9/30/10			Nine Months Ended 9/30/09
Net income available to common stockholders	$	25,591		$	27,089		$	74,717		$	77,606
Depreciation and amortization:
Continuing operations		24,100			22,680			70,621			67,976
Discontinued operations		101			279			416			976
Depreciation of furniture, fixtures & equipment		(69	)		(80	)		(223	)		(239	)
Gain on sales of investment properties:
Continuing operations		--			(15	)		(468	)		(15	)
Discontinued operations		(1,919	)		(1,799	)		(3,816	)		(4,235	)
Funds from operations available to common stockholders	$	47,804		$	48,154		$	141,247		$	142,069

FFO per common share, basic and diluted	$	0.46		$	0.47		$	1.36		$	1.37

Dividends paid to common stockholders	$	45,026		$	44,541		$	134,700		$	133,367

FFO in excess of dividends paid to common stockholders	$	2,778		$	3,613		$	6,547		$	8,702

Weighted average number of common shares used for computation per share:
Basic		103,830,029			103,470,512			103,781,108			103,528,952
Diluted		103,977,023			103,481,892			103,887,679			103,532,894

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, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution). AFFO further adjusts FFO by adding back non-cash items that reduce net income in accordance with GAAP, and deducting such items as capitalized expenditures and straight-line rent revenue.

	Three Months Ended 9/30/10			Three Months Ended 9/30/09			Nine Months Ended 9/30/10			Nine Months Ended 9/30/09
Net income available to common stockholders	$	25,591		$	27,089		$	74,717		$	77,606
Cumulative adjustments to calculate FFO(1)		22,213			21,065			66,530			64,463
FFO available to common stockholders		47,804			48,154			141,247			142,069
Amortization of share-based compensation		1,347			994			4,824			3,733
Amortization of deferred note financing costs(2)		431			341			1,114			1,022
Provisions for impairment		84			29			171			340
Capitalized leasing costs and commissions		(238	)		(348	)		(874	)		(957	)
Capitalized building improvements		(438	)		(438	)		(1,404	)		(1,279	)
Straight-line rent revenue(3)		(405	)		(233	)		(1,148	)		(810	)
Total AFFO available to common stockholders	$	48,585		$	48,499		$	143,930		$	144,118

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

Dividends paid to common stockholders	$	45,026		$	44,541		$	134,700		$	133,367

AFFO in excess of dividends paid to common stockholders	$	3,559		$	3,958		$	9,230		$	10,751

(1)	See FFO calculation above for reconciling items.

(2)

Amortization of deferred note financing costs includes the amortization of costs incurred and capitalized when our notes were issued in January 1999, March 2003, November 2003, March 2005, September 2005, September 2006, September 2007 and June 2010. These costs are being amortized over the lives of these notes. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.

(3)	A negative amount indicates that our straight-line rent revenue was greater than our actual cash rent collected.

HISTORICAL FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)



For the three months ended September 30,	2010			2009			2008			2007			2006

Net income available to common stockholders	$	25,591		$	27,089		$	28,634		$	27,910		$	24,207
Depreciation and amortization		24,132			22,879			22,844			19,514			14,612
Gain on sales of investment properties		(1,919	)		(1,814	)		(5,730	)		(799	)		(843	)
Total FFO	$	47,804		$	48,154		$	45,748		$	46,625		$	37,976

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

Total FFO	$	47,804		$	48,154		$	45,748		$	46,625		$	37,976
Less FFO contributed by Crest		(221	)		(207	)		(238	)		(1,937	)		(99	)
FFO before Crest contribution	$	47,583		$	47,947		$	45,510		$	44,688		$	37,877

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

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

Cash dividends paid per share	$	0.431		$	0.427		$	0.417		$	0.391		$	0.360
Diluted shares outstanding		103,977,023			103,481,892			100,420,070			100,252,953			89,267,138


For the nine months ended September 30,	2010			2009			2008			2007			2006

Net income available to common stockholders	$	74,717		$	77,606		$	79,320		$	89,043		$	71,033
Depreciation and amortization		70,814			68,713			68,616			56,071			42,901
Gain on sales of investment properties		(4,284	)		(4,250	)		(9,439	)		(3,190	)		(3,036	)
Total FFO	$	141,247		$	142,069		$	138,497		$	141,924		$	110,898

Total FFO per diluted share	$	1.36		$	1.37		$	1.38		$	1.41		$	1.27

Total FFO	$	141,247		$	142,069		$	138,497		$	141,924		$	110,898
Less FFO contributed by Crest		(585	)		(308	)		(1,338	)		(7,967	)		(1,515	)
FFO before Crest contribution	$	140,662		$	141,761		$	137,159		$	133,957		$	109,383

FFO components, per diluted share(1):
FFO before Crest contribution	$	1.35		$	1.37		$	1.37		$	1.34		$	1.26
Crest FFO contribution	$	0.01		$	0.00		$	0.01		$	0.08		$	0.02

Total FFO	$	1.36		$	1.37		$	1.38		$	1.41		$	1.27

Cash dividends paid per share	$	1.290		$	1.279		$	1.239		$	1.152		$	1.060
Diluted shares outstanding		103,887,679			103,532,894			100,462,396			100,326,859			87,084,545

(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, 2010 and December 31, 2009

(dollars in thousands, except per share amounts)

	2010			2009
ASSETS
Real estate, at cost:
Land	$	1,353,973		$	1,169,295
Buildings and improvements		2,366,621			2,270,161
Total real estate, at cost		3,720,594			3,439,456
Less accumulated depreciation and amortization		(690,511	)		(630,840	)
Net real estate held for investment		3,030,083			2,808,616
Real estate held for sale, net		9,639			8,266
Net real estate		3,039,722			2,816,882
Cash and cash equivalents		155,582			10,026
Accounts receivable, net		10,398			10,396
Goodwill		17,206			17,206
Other assets, net		62,626			60,277
Total assets	$	3,285,534		$	2,914,787

LIABILITIES AND STOCKHOLDERS’ EQUITY
Distributions payable	$	17,954		$	16,926
Accounts payable and accrued expenses		26,846			38,445
Other liabilities		13,750			16,807
Line of credit payable		--			4,600
Notes payable		1,600,000			1,350,000
Total liabilities		1,658,550			1,426,778

Stockholders’ equity:
Preferred stock and paid in capital, par value $1.00 per share, 20,000,000 shares authorized, 13,900,000 issued and outstanding		337,790			337,790
Common stock and paid in capital, par value $1.00 per share, 200,000,000 shares authorized, 110,696,348 and 104,286,705 shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively		1,829,223			1,629,237
Distributions in excess of net income		(540,029	)		(479,018	)
Total stockholders’ equity		1,626,984			1,488,009
Total liabilities and stockholders’ equity	$	3,285,534		$	2,914,787

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%
YTD Q3 2010	5.1%	35.1%	3.8%	19.1%	2.6%	5.6%	2.0%	3.9%	1.1%	4.4%
Compounded Average Annual Total Return(5)		18.0%		10.4%		9.0%		7.7%		7.3%

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

(1) FTSE NAREIT US Equity REIT Index, as per NAREIT website.

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

(3) Includes reinvestment of dividends. Sources: NAREIT website and Factset.

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

(5) All of these Compounded Average Annual Total Return rates are calculated in the same manner: from Realty Income's NYSE listing on October 18, 1994 through September 30, 2010, and assuming reinvestment of dividends, except for NASDAQ. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future.

Industry Diversification

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

	Percentage of Rental Revenue(1)
	For the Quarter			For the Years Ended
Industries	Ended September 30, 2010			Dec 31, 2009			Dec 31, 2008			Dec 31, 2007			Dec 31, 2006			Dec 31, 2005			Dec 31, 2004
Apparel stores		1.0	%		1.1	%		1.1	%		1.2	%		1.7	%		1.6	%		1.8	%
Automotive collision services		1.0			1.1			1.0			1.1			1.3			1.3			1.0
Automotive parts		1.3			1.5			1.6			2.1			2.8			3.4			3.8
Automotive service		4.7			4.8			4.8			5.2			6.9			7.6			7.7
Automotive tire services		6.3			6.9			6.7			7.3			6.1			7.2			7.8
Book stores		0.1			0.2			0.2			0.2			0.2			0.3			0.3
Business services		*			*			*			0.1			0.1			0.1			0.1
Child care		6.6			7.3			7.6			8.4			10.3			12.7			14.4
Consumer electronics		0.6			0.7			0.8			0.9			1.1			1.3			2.1
Convenience stores		16.5			16.9			15.8			14.0			16.1			18.7			19.2
Crafts and novelties		0.3			0.3			0.3			0.3			0.4			0.4			0.5
Distribution and office		1.0			1.0			1.0			0.6			--			--			--
Drug stores		4.0			4.3			4.1			2.7			2.9			2.8			0.1
Entertainment		1.2			1.3			1.2			1.4			1.6			2.1			2.3
Equipment rental services		0.2			0.2			0.2			0.2			0.2			0.4			0.3
Financial services		0.2			0.2			0.2			0.2			0.1			0.1			0.1
General merchandise		0.7			0.8			0.8			0.7			0.6			0.5			0.4
Grocery stores		0.7			0.7			0.7			0.7			0.7			0.7			0.8
Health and fitness		6.9			5.9			5.6			5.1			4.3			3.7			4.0
Home furnishings		1.3			1.3			2.4			2.6			3.1			3.7			4.1
Home improvement		1.7			1.9			1.9			2.1			3.4			1.1			1.0
Motor vehicle dealerships		2.6			2.7			3.1			3.1			3.4			2.6			0.6
Office supplies		0.9			1.0			1.0			1.1			1.3			1.5			1.6
Pet supplies and services		0.8			0.9			0.8			0.9			1.1			1.3			1.4
Private education		0.8			0.9			0.8			0.8			0.8			0.8			1.1
Restaurants		19.7			21.3			21.8			21.2			11.9			9.4			9.7
Shoe stores		0.2			--			--			--			--			0.3			0.3
Sporting goods		2.6			2.6			2.3			2.6			2.9			3.4			3.4
Theaters		8.7			9.2			9.0			9.0			9.6			5.2			3.5
Travel plazas		0.2			0.2			0.2			0.2			0.3			0.3			0.4
Video rental		*			1.0			1.1			1.7			2.1			2.5			2.8
Wine and spirits		5.5			--			--			--			--			--			--
Other		1.7			1.8			1.9			2.3			2.7			3.0			3.4
Totals		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

* Less than 0.1%

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

Tenant Diversification

Largest Tenants based on Percentage of Total Portfolio Rental Revenue at September 30, 2010
Diageo	5.7%	TBC Corporation	3.0%
AMC Theatres	5.7%	Couche-Tard/Circle K	2.8%
L.A. Fitness	5.6%	FreedomRoads/Camping World	2.7%
Hometown Buffet	5.6%	Boston Market	2.6%
The Pantry	4.1%	NPC International/Pizza Hut	2.5%
Friendly’s Ice Cream	3.8%	KinderCare Learning Centers	2.4%
Rite Aid	3.2%	Regal Cinemas	2.2%
La Petite Academy	3.0%

Lease Expirations

The following table sets forth certain information regarding Realty Income's property portfolio (excluding properties owned by Crest) regarding the timing of the lease term expirations (excluding extension options) on our 2,248 net leased, single-tenant properties as of September 30, 2010 (dollars in thousands):

	Total Portfolio							Initial Expirations(3)							Subsequent Expirations(4)
Year	Number of Leases Expiring(1)		Rental Revenue for the Quarter Ended Sept. 30, 2010(2)		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended Sept. 30, 2010		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended Sept. 30, 2010		% of Total Rental Revenue
2010		72	$	1,410		1.6	%		7	$	180		0.2	%		65	$	1,230		1.4	%
2011		115		3,278		3.8			54		1,874		2.2			61		1,404		1.6
2012		125		2,774		3.2			36		1,026		1.2			89		1,748		2.0
2013		146		4,958		5.8			66		3,096		3.6			80		1,862		2.2
2014		106		3,366		3.9			41		1,913		2.2			65		1,453		1.7
2015		146		3,562		4.2			77		2,152		2.5			69		1,410		1.7
2016		123		2,349		2.7			111		2,105		2.4			12		244		0.3
2017		50		1,822		2.1			39		1,604		1.9			11		218		0.2
2018		42		1,839		2.1			34		1,635		1.9			8		204		0.2
2019		98		5,081		5.9			90		4,657		5.4			8		424		0.5
2020		85		3,731		4.4			74		3,361		3.9			11		370		0.5
2021		178		7,733		9.0			176		7,512		8.7			2		221		0.3
2022		99		2,930		3.4			98		2,882		3.3			1		48		0.1
2023		250		8,405		9.8			248		8,331		9.7			2		74		0.1
2024		62		2,118		2.5			62		2,118		2.5			--		--		--
2025-2043		551		30,529		35.6			539		30,264		35.3			12		265		0.3
Totals		2,248	$	85,885		100.0	%		1,752	$	74,710		86.9	%		496	$	11,175		13.1	%

* Less than 0.1%

(1)	Excludes ten multi-tenant properties and 84 vacant unleased properties, one of which is a multi-tenant property. The lease expirations for properties under construction are based on the estimated date of completion of those properties.

(2)	Includes rental revenue of $130 from properties reclassified as discontinued operations and excludes revenue of $1,334 from ten multi-tenant properties and from 84 vacant and unleased properties at September 30, 2010.

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

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

Geographic Diversification

The following table sets forth certain state-by-state information regarding Realty Income's property portfolio (excluding properties owned by Crest) as of September 30, 2010 (dollars in thousands):

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Rental Revenue for the Quarter Ended September 30, 2010(1)		Percentage of Rental Revenue
Alabama		62		97	%		420,200	$	1,807		2.1	%
Alaska		2		100			128,500		277		0.3
Arizona		80		99			395,800		2,417		2.8
Arkansas		17		94			92,400		379		0.4
California		78		97			1,569,600		9,493		10.9
Colorado		51		96			471,400		1,798		2.1
Connecticut		23		96			269,100		941		1.1
Delaware		17		100			33,300		431		0.5
Florida		166		92			1,426,700		6,508		7.5
Georgia		131		95			905,500		3,779		4.3
Hawaii		--		--			--		--		--
Idaho		12		100			80,700		340		0.4
Illinois		85		98			1,008,800		4,939		5.7
Indiana		81		95			729,900		3,431		3.9
Iowa		21		100			290,600		1,015		1.2
Kansas		32		88			570,000		1,052		1.2
Kentucky		22		95			110,600		653		0.7
Louisiana		32		100			184,900		899		1.0
Maine		3		100			22,500		161		0.2
Maryland		28		100			266,600		1,597		1.8
Massachusetts		64		98			575,400		2,517		2.9
Michigan		52		100			257,300		1,278		1.5
Minnesota		20		100			389,000		1,541		1.8
Mississippi		71		97			347,600		1,526		1.7
Missouri		62		97			640,100		2,168		2.5
Montana		2		100			30,000		76		0.1
Nebraska		19		95			196,300		490		0.6
Nevada		14		93			153,200		727		0.8
New Hampshire		14		100			109,900		584		0.7
New Jersey		33		100			261,300		1,938		2.2
New Mexico		9		100			58,400		197		0.2
New York		39		97			495,000		2,544		2.9
North Carolina		94		99			531,700		2,896		3.3
North Dakota		6		100			36,600		57		0.1
Ohio		136		94			846,200		3,186		3.6
Oklahoma		24		100			137,400		589		0.7
Oregon		18		94			297,300		834		1.0
Pennsylvania		98		99			677,200		3,551		4.1
Rhode Island		3		100			11,000		58		0.1
South Carolina		99		100			372,500		2,256		2.6
South Dakota		9		100			24,900		102		0.1
Tennessee		131		93			606,700		2,686		3.1
Texas		212		97			2,241,100		7,996		9.2
Utah		4		100			25,200		94		0.1
Vermont		4		100			12,700		126		0.1
Virginia		104		96			636,500		3,359		3.8
Washington		34		94			274,900		982		1.1
West Virginia		2		100			23,000		121		0.1
Wisconsin		21		90			252,700		819		0.9
Wyoming		1		0			5,400		4		*
Totals/Average		2,342		96	%		19,503,600	$	87,219		100.0	%

* Less than 0.1%

(1)	Includes rental revenue for all properties owned by Realty Income at September 30, 2010, including revenue from properties reclassified as discontinued operations of $130.

REALTY INCOME CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 EARNINGS PRESS RELEASE - October 27, 2010

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REALTY INCOME CORP Reports