Exhibit 99.1

 

CONTACT:

Tere Miller

Vice President, Corporate Communications

760-741-2111 ext. 177

 

REALTY INCOME ANNOUNCES RECORD

FOURTH QUARTER AND YEAR-END 2005 OPERATING RESULTS

 

ESCONDIDO, CALIFORNIA, February 15, 2006...Realty Income Corporation (Realty Income), The Monthly Dividend Company^® (NYSE: O) today announced operating results for the fourth quarter and year ended December 31, 2005.

 

COMPANY HIGHLIGHTS:

 

For the quarter ended December 31, 2005:

•      Revenue increased 18.5% to $53.7 million

•      Funds from Operations (FFO) available to common stockholders increased 24.7% to $35.9 million

•      FFO per diluted common share increased 19.4% to $0.43 per share

•      Net income available to common stockholders per diluted common share was $0.31 per share

•      Dividends paid per share increased 5.8% as compared to the same quarterly period in 2004

•      Increased the monthly dividend in December for the 33^rd consecutive quarter

•      Same store rents increased 0.6% to $40.01 million

•      Invested $74.5 million in 52 additional properties

 

For the year ended December 31, 2005:

•      Revenue increased 13.2% to $196.7 million

•      FFO available to common stockholders increased 9.6% to $129.6 million

•                  FFO per diluted common share increased 8.0% to $1.62 per share

•                  Net income available to common stockholders per diluted common share was $1.12 per share

•                  Paid the 425^th consecutive monthly dividend in December 2005

•                  Increased dividends 8.5% during 2005 as compared to 2004

•                  Portfolio occupancy remained strong at 98.5% at the end of the year

•                  Same store rents increased 0.8% to $158.11 million

•                  Invested $486.6 million in 156 properties

•                  Raised net proceeds of $362.9 million in common stock and bond offerings

•                  Arranged a new $300 million acquisition credit facility

 

 

Financial Results

 

Revenue Increases

 

Realty Income’s revenue for the fourth quarter ended December 31, 2005, increased 18.5% to $53.7 million as compared to $45.3 million for the same period in 2004.

 

Revenue for the year ended December 31, 2005, increased 13.2% to $196.7 million as compared to $173.7 million

in 2004.

 

1

 

Net Income Available to Common Stockholders

 

Net income available to common stockholders, for the quarter ended December 31, 2005, was $25.5 million as compared to $24.3 million for the same period in 2004. On a diluted per common share basis, net income was unchanged at $0.31 per share as compared to the same period in 2004.

 

Net income available to common stockholders for the year ended December 31, 2005, was $89.7 million as compared to $90.2 million for the same period in 2004. On a diluted per common share basis, net income was

$1.12 per share as compared to $1.15 per share in 2004.

 

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

 

During the fourth quarter of 2005, income from continuing operations available to common stockholders was $0.26 per diluted common share as compared to $0.25 per diluted common share for the same period in 2004.

 

During 2005, income from continuing operations available to common stockholders was $1.00 per diluted common share as compared to $0.89 per diluted common share in 2004.

 

Funds from Operations (FFO) Available to Common Stockholders

 

FFO for the quarter ended December 31, 2005 increased 24.7% to $35.9 million as compared to $28.8 million for the same period in 2004. FFO per diluted common share increased 19.4% to $0.43 per share for the quarter ended December 31, 2005 as compared to $0.36 per share for the same period in 2004. Core FFO (FFO before Crest Net’s contribution) per diluted common share for the quarter ended December 31, 2005 increased 16.7% to $0.42 per share from $0.36 per share for the same period in 2004.

 

FFO for the year ended December 31, 2005 increased 9.6% to $129.6 million as compared to $118.2 million in 2004. FFO per diluted common share for the year ended December 31, 2005 increased 8.0% to $1.62 per share as compared to $1.50 per share in 2004. Core FFO per diluted common share for the year ended December 31, 2005 increased 12.9% to $1.58 per diluted share from $1.40 per share in 2004. (For a calculation of Core FFO or FFO before Crest Net Lease contribution, see pages 7 and 8).

 

The Company considers FFO to be an appropriate supplemental measure of a Real Estate Investment Trust’s (REITs) operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. FFO is an alternative, non-GAAP, measure that is also considered to be a good indicator of a company’s ability to generate income to pay dividends. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust’s (NAREIT) definition as net income available to common stockholders plus depreciation and amortization of real estate assets, reduced by gains on sales of investment properties and extraordinary items. (See reconciliation of net income available to common stockholders to FFO on page 7).

 

Dividend Information

 

In December 2005, Realty Income announced the 33^rd consecutive quarterly increase in the amount of the monthly dividend on its common stock to an annualized amount of $1.395 per share. This marked the 37^th increase in the amount of the dividend since the Company’s listing on the New York Stock Exchange in 1994.

 

During 2005, Realty Income paid twelve monthly dividends and increased the amount of the monthly dividend five times. The amount of dividends paid per share during 2005 increased 8.5% to $1.34625 as compared to $1.24125 in 2004. Throughout its 36-year operating history, the Company has paid 425 consecutive monthly dividends. The Company continues its 36-year history of declaring and paying dividends every month.

 

During 2005, the Company also paid dividends totaling $1.84375 per share on its Class D preferred stock.

 

Real Estate Portfolio Update

 

As of December 31, 2005, Realty Income’s portfolio of freestanding, single-tenant, retail properties consisted of 1,646 properties located in 48 states, leased to 101 retail chains doing business in 29 retail industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 12.4 years.

 

2

 

Portfolio Management Activities

 

The Company’s portfolio of retail real estate, owned primarily under 15- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of December 31, 2005, portfolio occupancy was 98.5% with only 25 properties available for lease out of 1,646 properties in the portfolio.

 

Rent Increases

 

Same store rents on 1,269 properties under lease during the three months ended December 31, 2005 and 2004 increased 0.6% to $40.01 million from $39.76 million in 2004. Same store rents on the same 1,269 properties under lease during the years ended December 31, 2005 and 2004 increased 0.8% to $158.11 million compared to $156.80 million in 2004.

 

Property Acquisitions

 

During the fourth quarter, Realty Income and its wholly-owned subsidiary, Crest Net Lease, invested $74.5 million in 52 new properties and properties under development. Realty Income invested $73.1 million in 49 new properties and properties under development with an initial average contractual lease yield of 8.5%. The 49 new properties acquired by Realty Income are located in 13 states and are 100% leased under net-lease agreements with an initial average lease length of 12.0 years. They are leased to seven different retail chains in five industries: financial services, health and fitness, motor vehicle dealership, restaurant and theater.

 

For the year ended December 31, 2005, Realty Income and its wholly-owned subsidiary, Crest Net Lease, invested $486.6 million in 156 new properties and properties under development. Realty Income invested $430.7 million in 135 new properties and properties under development with an initial average contractual lease yield of 8.4%. The 135 new properties acquired by Realty Income are located in 28 states and are 100% leased under net-lease agreements with an initial average lease length of 15.6 years. They are leased to 13 different retail chains in seven industries: convenience store, drug store, financial services, health and fitness, motor vehicle dealership, restaurant and theater.

 

Realty Income maintains an unsecured acquisition credit facility with borrowing capacity of $300 million that is used to fund property acquisitions in the near term. The outstanding balance on the Company’s acquisition credit facility at the end of the fourth quarter was $136.7 million with $163.3 million available to fund new property acquisitions. In addition, the Company reported cash and cash equivalents of $65.7 million at December 31, 2005.

 

Property Dispositions

 

Realty Income continued to successfully execute its asset disposition program. The objective of the 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 or increase the average lease length.

 

During the fourth quarter ended December 31, 2005, Realty Income sold eight properties for $5.8 million, which resulted in a gain on sales of $2.8 million. The properties sold consisted of one automotive tire service location, three child care locations, three restaurants, and one property classified as “other”. The proceeds were, or will be, used to pay down the Company’s acquisition credit facility or to invest in new properties.

 

For the year ended December 31, 2005, Realty Income sold 23 properties for $23.4 million, which resulted in a gain on sales of $6.6 million. The properties sold consisted of: one automotive service store, two automotive tire service locations, seven child care properties, two consumer electronics stores, one convenience store, one motor vehicle dealership, one private education facility, seven restaurants, and one property classified as “other”.

 

Other 2005 Activities

 

Receives Mergent Dividend Achiever Status

 

In October 2005, Realty Income announced that the Company was named a Mergent Dividend Achiever, a distinction shared by just 313 other dividend-paying companies, out of approximately 10,000 plus North-American listed, dividend-paying common stocks.

 

Issued 4.1 Million Common Shares

 

In September 2005, Realty Income issued 4.1 million common shares priced at $23.79 per share. The net proceeds from the offering of $92.7 million were used to fund new property acquisitions and for other general corporate purposes.

 

3

 

Completed 12-Year Notes Offering

 

In September 2005, Realty Income completed a $175 million offering of 12-year, 5-³/₈ senior unsecured notes due 2017. The net proceeds from the offering were used to repay borrowings on the Company’s unsecured acquisition credit facility and for other general corporate purposes.

 

Credit Rating Upgrade

 

In September 2005, Fitch Ratings upgraded Realty Income’s senior unsecured debt ratings to BBB+ from BBB and its preferred stock ratings to BBB from BBB-, with a stable outlook.

 

Completed 30-Year Unsecured Bond Offering

 

In March 2005, Realty Income completed a $100 million offering of 5-⁷/₈% senior unsecured bonds due 2035. The net proceeds from the offering were used to repay borrowings on the Company’s unsecured acquisition credit facility and for other general corporate purposes.

 

Crest Net Lease

 

Crest Net Lease is a wholly-owned subsidiary of Realty Income focused on acquiring and subsequently marketing net-leased properties for sale. During the fourth quarter ended December 31, 2005, Crest sold three properties for $6.6 million and reported a gain on sales of $930,000. Crest also invested $1.4 million in three new properties during the fourth quarter.

 

For the year ended December 31, 2005, Crest sold 12 properties for $23.5 million and reported a gain on sales of $3.3 million. During the year, Crest invested $55.9 million in 21 new properties and properties under development. As of December 31, 2005, Crest carried an inventory of $45.7 million, which consists of 17 properties held for sale.

 

Crest’s contribution to Realty Income’s FFO depends on the timing and number of property sales, if any, in a given quarter. Therefore, Crest’s contribution can fluctuate and add volatility to the Company’s reported FFO and net income on a comparable quarterly and annualized basis. During the fourth quarter ended December 31, 2005, Crest generated $1.1 million, or $0.01 per diluted common share, in FFO (and net income) for Realty Income as compared to $598,000, or $0.01 per diluted common share, in FFO for the same period in 2004. For the year ended December 31, 2005, Crest generated $2.8 million, or $0.03 per diluted common share, in FFO (and net income) for Realty Income as compared to $7.8 million, or $0.10 per diluted common share in 2004.

 

CEO Comments on Operating Results

 

Commenting on Realty Income’s financial results and real estate operations, Tom A. Lewis, Chief Executive Officer, stated, “The Monthly Dividend Company^® ended the fourth quarter and 2005 with record operating results in nearly all facets of the Company’s business. Increases in property acquisitions, total revenue and funds from operations allowed us to raise the dividend again in the fourth quarter, for a total of five increases during the year, which led to an increase in dividends paid in 2005 of 8.5% as compared to 2004. We are pleased to have been able to continue to offer shareholders a source of dependable monthly income that has increased over time.

 

“A record level of property acquisitions, the highest in Realty Income’s history, was primarily responsible for increases in financial results across the board. For the year ended December 31, 2005, Realty Income and Crest Net, combined, acquired 156 properties for $486.6 million. The initial average lease rate for properties acquired during 2005 was 8.4%, which continued to represent an attractive spread over our cost of capital. The initial average lease term on properties acquired during 2005 was 15.8 years.

 

“We were also pleased with our ability to access capital quickly to permanently fund these property acquisitions. During 2005, we raised approximately $363 million in new capital from the proceeds of common stock and bond offerings.

 

“While we were very pleased with the volume of property acquisitions during 2005, this level of acquisitions should not necessarily be viewed as a trend that can be extrapolated into the future. The Company will continue to adhere to its strict due diligence and underwriting standards that guide the review and decision-making process for every potential real estate acquisition opportunity. As always, acquisition opportunities will be required to meet these standards in order to be considered for inclusion in Realty Income’s real estate portfolio.  During 2005, the Company’s Investment Committee reviewed over 1,700 properties with an approximate value of $2.9 billion for possible acquisition. Out of that, the Committee selected 156 properties for $486.6 million, or 17% of the opportunities reviewed, for acquisition.

 

4

 

“Our real estate portfolio of 1,646 properties continues to perform well and provide the dependable lease revenue that supports the payment of monthly dividends. During 2005, the portfolio exhibited stable occupancy, ending the year with 98.5% of our properties occupied in comparison to 97.9% at the end of 2004. We believe this excellent performance is due to our continued focus on acquiring properties that are primarily leased to retailers that sell basic human needs goods and services that consumers use every day.”

 

FFO Commentary

 

Realty Income’s FFO per diluted common 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 diluted common share to vary from levels that have been anticipated by the Company. These factors include, but are not limited to, changes in interest rates, occupancy rates, periodically accessing the capital markets, the level and timing of property acquisitions and dispositions, lease rollovers, the general real estate market, the economy, charges for property impairments, and the operations of Crest Net Lease.

 

2006 Estimates

 

Management estimates that FFO per diluted common share for 2006 should range from $1.67 to $1.71, which would represent annual FFO per diluted common share growth of approximately 3.1% to 5.6%, compared to the 2005 FFO. FFO for 2006 is based on an estimated net income per diluted common share range of $1.10 to $1.14 adjusted (in accordance with NAREIT’s definition of FFO) for estimated real estate depreciation of $0.63 and potential gain on sales of investment properties of $0.06 per share.

 

Management further estimates that Crest Net Lease could contribute between $0.03 to $0.06 per share to Realty Income’s FFO during 2006. Crest’s primary business is the purchase and sale of properties for a profit. These sales may occur at various times during the course of the year, which could cause FFO, in certain quarters, to fluctuate on a comparable quarterly and annualized basis.

 

The Company does not intend to provide quarterly estimates of FFO. Absent changes in annual FFO guidance at the end of each quarter, it may be presumed that the Company’s overall estimates for 2006 have not changed.

 

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, 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 the Company’s subsidiary, Crest Net Lease, as described in the Company’s filings with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

 

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 December 31, 2005, the Company had paid 425 consecutive monthly dividends throughout its 36-year operating history. The monthly income is supported by the cash flows from over 1,600 retail properties owned under long-term lease agreements with leading regional and national retail chains. The Company is an active buyer of net-leased retail properties nationwide.

 

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

 

5

 

CONSOLIDATED STATEMENTS OF INCOME

For the three months and years ended December 31, 2005 and 2004

(dollars in thousands, except per share amounts)

 

		Three Months Ended 12/31/05			Three Months Ended 12/31/04			Year Ended 12/31/05			Year Ended 12/31/04
REVENUE
Rental		$	53,604		$	44,952		$	196,322		$	172,714
Other		46			354			354			1,033
		53,650			45,306			196,676			173,747
EXPENSES
Interest		11,869			8,599			40,949			34,132
Depreciation and amortization		13,218			10,282			46,438			39,874
General and administrative		3,493			3,496			15,421			13,119
Property		967			901			3,838			3,069
Income taxes		210			178			813			699
		29,757			23,456			107,459			90,893
Income from continuing operations		23,893			21,850			89,217			82,854
Income from discontinued operations:
Real estate acquired for resale by Crest		1,086			598			2,781			7,847
Real estate held for investment		2,849			4,108			7,121			12,696
		3,935			4,706			9,902			20,543
Net income		27,828			26,556			99,119			103,397
Preferred stock cash dividends		(2,351		)	(2,244		)	(9,403		)	(9,455		)
Excess of redemption value over carrying value of preferred shares redeemed		—-			—-			—-			(3,774		)
Net income available to common stockholders		$	25,477		$	24,312		$	89,716		$	90,168
Funds from operations available to common stockholders (FFO)		$	35,863		$	28,792		$	129,647		$	118,181
Per share information for common stockholders, basic and diluted:
Income from continuing operations		$	0.26		$	0.25		$	1.00		$	0.89
Net income		$	0.31		$	0.31		$	1.12		$	1.15
FFO, basic:(1)
FFO before Crest Net contribution		$	0.42		$	0.36		$	1.59		$	1.41
Crest Net Lease		0.01			0.01			0.03			0.10
Total FFO		0.43			0.36			1.62			1.51
FFO, diluted:(1)
FFO before Crest Net contribution		$	0.42		$	0.36		$	1.58		$	1.40
Crest Net Lease		0.01			0.01			0.03			0.10
Total FFO		0.43			0.36			1.62			1.50
Cash dividends paid		$	0.347		$	0.328		$	1.346		$	1.241

 

(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.

 

6

 

FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

 

		Three Months Ended 12/31/05			Three Months Ended 12/31/04			Year Ended 12/31/05			Year Ended 12/31/04
Net income available to common stockholders		$	25,477		$	24,312		$	89,716		$	90,168
Depreciation and amortization:
Continuing operations		13,218			10,282			46,438			39,874
Discontinued operations		18			177			226			984
Depreciation of furniture, fixtures & equipment		(39		)	(31		)	(142		)	(117		)
Gain on sales of investment properties:
Continuing operations		(5		)	(185		)	(18		)	(185		)
Discontinued operations		(2,806		)	(5,763		)	(6,573		)	(12,543		)
Funds from operations available to common stockholders		$	35,863		$	28,792		$	129,647		$	118,181
Dividends paid to common stockholders		$	29,031		$	26,021		$	108,575		$	97,420
FFO in excess of dividends		$	6,832		$	2,771		$	21,072		$	20,761
FFO per common share:
Basic		$	0.43		$	0.36		$	1.62		$	1.51
Diluted		$	0.43		$	0.36		$	1.62		$	1.50
Weighted average number of common shares used for computation per share:
Basic		83,005,569			79,301,254			79,950,255			78,518,296
Diluted		83,163,283			79,383,964			80,208,593			78,598,788

 

CONTRIBUTIONS BY CREST NET LEASE TO FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

 

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

 

		Three Months Ended 12/31/05			Three Months Ended 12/31/04			Year Ended 12/31/05			Year Ended 12/31/04
Gain on sales of real estate acquired for resale		$	930		$	706		$	3,291		$	10,254
Rental revenue		1,003			352			2,085			2,304
Interest expense		(509		)	(154		)	(1,139		)	(674		)
General and administrative expense		(44		)	(105		)	(453		)	(464		)
Property expenses		(1		)	(21		)	(60		)	(93		)
Income taxes		(293		)	(180		)	(943		)	(3,480		)
Funds from operations contributed by Crest		$	1,086		$	598		$	2,781		$	7,847
Crest FFO per common share, basic and diluted		$	0.01		$	0.01		$	0.03		$	0.10
Total FFO		$	35,863		$	28,792		$	129,647		$	118,181
Less FFO contributed by Crest		(1,086		)	(598		)	(2,781		)	(7,847		)
FFO before Crest contribution		$	34,777		$	28,194		$	126,866		$	110,334
FFO before Crest contribution per common share:
Basic		$	0.42		$	0.36		$	1.59		$	1.41
Diluted		$	0.42		$	0.36		$	1.58		$	1.40

 

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 property and extraordinary items.

 

7

 

HISTORICAL FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

 

		2005			2004			2003			2002			2001
For the three months ended December 31,
Net income available to common stockholders		$	25,477		$	24,312		$	25,056		$	17,679		$	15,995
Depreciation and amortization		13,197			10,428			9,149			8,088			7,492
Gain on sales of investment properties		(2,811		)	(5,948		)	(2,900		)	(903		)	(1,556		)
Total FFO		$	35,863		$	28,792		$	31,305		$	24,864		$	21,931
Total FFO per diluted share		$	0.43		$	0.36		$	0.42		$	0.36		$	0.34
Total FFO		$	35,863		$	28,792		$	31,305		$	24,864		$	21,931
Less FFO contributed by Crest		(1,086		)	(598		)	(4,121		)	(807		)	(819		)
FFO before Crest contribution		$	34,777		$	28,194		$	27,184		$	24,057		$	21,112
FFO components, per diluted share:
FFO before Crest’s contribution		$	0.42		$	0.36		$	0.36		$	0.34		$	0.33
Crest FFO contribution		$	0.01		$	0.01		$	0.06		$	0.01		$	0.01
Total FFO		$	0.43		$	0.36		$	0.42		$	0.36		$	0.34
Cash dividends paid per share		$	0.347		$	0.328		$	0.298		$	0.291		$	0.283
Diluted shares outstanding		83,163,283			79,383,964			74,575,552			69,856,588			64,259,202
For the year ended December 31,
Net income available to common stockholders		$	89,716		$	90,168		$	76,722		$	68,954		$	57,846
Depreciation and amortization		46,522			40,741			33,800			31,091			29,010
Gain on sales of investment properties		(6,591		)	(12,728		)	(7,156		)	(6,506		)	(10,478		)
Total FFO		$	129,647		$	118,181		$	103,366		$	93,539		$	76,378
Total FFO per diluted share		$	1.62		$	1.50		$	1.45		$	1.38		$	1.30
Total FFO		$	129,647		$	118,181		$	103,366		$	93,539		$	76,378
Less FFO contributed by Crest		(2,781		)	(7,847		)	(4,588		)	(2,748		)	(2,425		)
FFO before Crest contribution		$	126,866		$	110,334		$	98,778		$	90,791		$	73,953
FFO components, per diluted share:
FFO before Crest’s contribution		$	1.58		$	1.40		$	1.39		$	1.34		$	1.26
Crest FFO contribution		$	0.03		$	0.10		$	0.06		$	0.04		$	0.04
Total FFO		$	1.62		$	1.50		$	1.45		$	1.38		$	1.30
Cash dividends paid per share		$	1.346		$	1.241		$	1.181		$	1.151		$	1.121
Diluted shares outstanding		80,208,593			78,598,788			71,222,628			67,976,314			58,562,240

 

8

 

CONSOLIDATED BALANCE SHEETS

As of December 31, 2005 and 2004

(dollars in thousands, except per share amounts)

 

		2005			2004
ASSETS
Real estate, at cost:
Land		$	746,016		$	624,558
Buildings and improvements		1,350,140			1,066,725
		2,096,156			1,691,283
Less accumulated depreciation and amortization		(341,193		)	(301,728		)
Net real estate held for investment		1,754,963			1,389,555
Real estate held for sale, net		47,083			17,155
Net real estate		1,802,046			1,406,710
Cash and cash equivalents		65,704			2,141
Accounts receivable		5,044			4,075
Goodwill		17,206			17,206
Other assets		30,988			12,183
Total assets		$	1,920,988		$	1,442,315
LIABILITIES AND STOCKHOLDERS’ EQUITY
Distributions payable		$	10,121		$	9,115
Accounts payable and accrued expenses		20,391			9,579
Other liabilities		9,562			6,286
Line of credit payable		136,700			23,600
Notes payable		755,000			480,000
Total liabilities		931,774			528,580
Stockholders’ equity:
Preferred stock and paid in capital, par value $1.00 per share, 20,000,000 shares authorized, 5,100,000 issued and outstanding		123,804			123,787
Common stock and paid in capital, par value $1.00 per share, in 2005 there were 200,000,000 shares authorized and 83,696,647 issued and outstanding and in 2004 there were 100,000,000 shares authorized and 79,301,630 shares issued and outstanding		1,134,300			1,038,973
Distributions in excess of net income		(268,890		)	(249,025		)
Total stockholders’ equity		989,214			913,735
Total liabilities and stockholders’ equity		$	1,920,988		$	1,442,315

 

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

 

		Percentage of Rental Revenue (1)
30 Industries		For the Quarter Ended Dec. 31, 2005			For the Years Ended
					Dec 31, 2005			Dec 31, 2004			Dec 31, 2003			Dec 31, 2002			Dec 31, 2001			Dec 31, 2000
Apparel stores		1.4	%		1.6	%		1.8	%		2.1	%		2.3	%		2.4	%		2.4	%
Automotive collision services		1.2			1.3			1.0			0.3			—			—			—
Automotive parts		3.4			3.4			3.8			4.5			4.9			5.7			6.0
Automotive service		7.0			7.6			7.7			8.3			7.0			5.7			5.8
Automotive tire services		6.5			7.2			7.8			3.1			2.7			2.6			2.3
Book stores		0.3			0.3			0.3			0.4			0.4			0.4			0.5
Business services		0.1			0.1			0.1			0.1			0.1			0.1			0.1
Child care		11.8			12.7			14.4			17.8			20.8			23.9			24.7
Consumer electronics		1.2			1.3			2.1			3.0			3.3			4.0			4.9
Convenience stores		17.8			18.7			19.2			13.3			9.1			8.4			8.4
Crafts and novelties		0.4			0.4			0.5			0.6			0.4			0.4			0.4
Drug stores		3.0			2.8			0.1			0.2			0.2			0.2			0.2
Entertainment		1.9			2.1			2.3			2.6			2.3			1.8			2.0
Equipment rental services		0.3			0.4			0.3			0.2			—			—			—
Financial services		0.1			0.1			0.1			—			—			—			—
General merchandise		0.5			0.5			0.4			0.5			0.5			0.6			0.6
Grocery stores		0.6			0.7			0.8			0.4			0.5			0.6			0.6
Health and fitness		3.3			3.7			4.0			3.8			3.8			3.6			2.4
Home furnishings		3.4			3.7			4.1			4.9			5.4			6.0			5.8
Home improvement		1.0			1.1			1.0			1.1			1.2			1.3			2.0
Motor vehicle dealerships		2.9			2.6			0.6			—			—			—			—
Office supplies		1.6			1.5			1.6			1.9			2.1			2.2			2.3
Pet supplies and services		1.2			1.3			1.4			1.7			1.7			1.6			1.5
Private education		0.7			0.8			1.1			1.2			1.3			1.5			1.4
Restaurants		9.9			9.4			9.7			11.8			13.5			12.2			12.3
Shoe stores		0.0			0.3			0.3			0.9			0.8			0.7			0.8
Sporting goods		3.1			3.4			3.4			3.8			4.1			0.9			—
Theaters		9.9			5.2			3.5			4.1			3.9			4.3			2.7
Travel plazas		0.3			0.3			0.4			0.3			—			—			—
Video rental		2.3			2.5			2.8			3.3			3.3			3.7			3.9
Other		2.9			3.0			3.4			3.8			4.4			5.2			6.0
Totals		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

 

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

 

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