Record Operating Results For Fourth Quarter And 2013 Announced By Realty Income

   Record Operating Results For Fourth Quarter And 2013 Announced By Realty
                                    Income

PR Newswire

ESCONDIDO, Calif., Feb. 13, 2014

ESCONDIDO, Calif., Feb. 13, 2014 /PRNewswire/ -- Realty Income Corporation
(Realty Income), The Monthly Dividend Company^® (NYSE: O), today announced
record operating results for the fourth quarter ended December 31, 2013.
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.

(Logo: http://photos.prnewswire.com/prnh/20130507/MM09486LOGO)

COMPANY HIGHLIGHTS:

For the quarter ended December 31, 2013 (as compared to the same quarterly
period in 2012):

  oRevenue increased 62.4% to $215.7 million as compared to $132.8 million
  oNet income available to common stockholders per share was $0.26
  oNormalized FFO available to common stockholders increased 68.4% to $124.6
    million
  oNormalized FFO per share increased 8.9% to $0.61
  oAFFO available to common stockholders increased 72.4% to $125.7 million
  oAFFO per share increased 12.7% to $0.62
  oSame store rents increased 1.8% to $110.0 million
  oPortfolio occupancy increased to 98.2% from 97.2%
  oGenerated net proceeds of approximately $378 million in 9.775 million
    common share offering
  oInvested $145.3 million in 66 new properties and properties under
    development or expansion
  oIncreased the monthly dividend in December for the 74^th time and for the
    65^th consecutive quarter
  oDividends paid per common share increased 20.3%
  oIncreased credit facility borrowing capacity to $1.5 billion from $1.0
    billion

For the year ended December 31, 2013 (as compared to 2012):

  oRevenue increased 61.2% to $778.4 million as compared to $482.8 million
  oNet income available to common stockholders per share was $1.06
  oNormalized FFO available to common stockholders increased 71.9% to $462.0
    million
  oNormalized FFO per share increased 19.3% to $2.41
  oAFFO available to common stockholders increased 68.9% to $463.1 million
  oAFFO per share increased 17.0% to $2.41
  oSame store rents increased 1.4% to $435.2 million
  oInvested $1.5 billion in 459 new properties and properties under
    development or expansion (excluding ARCT)
  oClosed on the $3.2 billion acquisition of ARCT, successfully integrating
    515 properties into the company's property portfolio
  oIncluding ARCT acquisition, invested $4.7 billion in 974 properties
  oRaised gross proceeds of $3.94 billion to fund 2013 real estate
    acquisitions, ARCT acquisition, and repay borrowings under the credit
    facility
  oDividends paid per common share increased 21.2%
  oPaid the 521^st consecutive monthly dividend in December 2013

Financial Results

Revenue

Revenue, for the quarter ended December 31, 2013, increased 62.4% to $215.7
million as compared to $132.8million, for the same quarter in 2012. Revenue
for 2013 increased 61.2% to $778.4 million as compared to $482.8 million for
2012.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended December
31, 2013, was $53.9million as compared to $28.5 million for the same quarter
in 2012. Net income per share, for the quarter ended December 31, 2013, was
$0.26as compared to $0.21, for the same quarter in 2012.

Net income available to common stockholders, in 2013, was $203.6million as
compared to $114.5 million for 2012. Net income per share, in 2013, was $1.06
as compared to $0.86 for 2012.

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 and period to period comparisons.

FFO Available to Common Stockholders

Funds from Operations (FFO), for the quarter ended December 31, 2013,
increased 73.9% to $124.5million as compared to $71.6 million for the same
quarter in 2012. FFO per share, for the quarter ended December 31, 2013,
increased 13.0% to $0.61 as compared to $0.54, for the same quarter in 2012.

FFO, in 2013, increased 72.1% to $449.0 million as compared to $260.9million
for the same period in 2012. FFO per share, in 2013, increased 19.4% to $2.34
as compared to $1.96 for 2012.

Normalized FFO Available to Common Stockholders

Normalized Funds from Operations, which is based on FFO adjusted to add back
ARCT merger-related costs, for the quarter ended December 31, 2013, increased
68.4% to $124.6million as compared to $74.0 million, for the same quarter in
2012. Normalized FFO per share, for the quarter ended December 31, 2013,
increased 8.9% to $0.61 as compared to $0.56, for the same quarter in 2012.

Normalized FFO, in 2013, increased 71.9% to $462.0 million as compared to
$268.8million for 2012. Normalized FFO per share, in 2013, increased 19.3% to
$2.41 as compared to $2.02 for 2012.

AFFO Available to Common Stockholders

Adjusted Funds from Operations (AFFO), for the quarter ended December 31,
2013, increased 72.4% to $125.7million as compared to $72.9 million, for the
same quarter in 2012. AFFO per share, for the quarter ended December 31, 2013,
increased 12.7% to $0.62 as compared to $0.55, for the same quarter in 2012.

AFFO, in 2013, increased 68.9% to $463.1 million as compared to $274.2million
for 2012. AFFO per share, for 2013, increased 17.0% to $2.41 as compared to
$2.06 for 2012.

The company considers FFO, normalized 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, plus impairments of real estate, reduced by gains on sales
of investment properties and extraordinary items. Normalized FFO adds back
merger-related costs for the acquisition of ARCT. AFFO further adjusts
Normalized FFO for unique revenue and expense items, which the company
believes are not as pertinent to the measurement of the company's ongoing
operating performance. See the reconciliation of net income available to
common stockholders to FFO, normalized FFO and AFFO on page seven.

Dividend Information

In December 2013, Realty Income announced the 65^th consecutive quarterly
dividend increase, which is the 74^th 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 December 31, 2013, was approximately $2.186
per share. The amount of monthly dividends paid per share increased 21.2% to
$2.147 in 2013 compared to $1.772 per share in 2012. In addition, through
December 31, 2013, the company has paid 521 consecutive monthly dividends and
over $2.7billion in total 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 December 31, 2013, Realty Income's portfolio of freestanding,
single-tenant properties consisted of 3,896 properties located in 49 states
and Puerto Rico, leased to 205 commercial tenants doing business in 47
industries. The properties are leased under long-term, net leases with a
weighted average remaining lease term of approximately 10.8 years.

Portfolio Management Activities

The company's portfolio of commercial real estate, owned primarily under 10-
to 20-year net leases, continues to perform well and provide dependable lease
revenue supporting the payment of monthly dividends. As of December31, 2013,
portfolio occupancy was 98.2% with 70 properties available for lease out of a
total of 3,896 properties in the portfolio, as compared to 97.2% portfolio
occupancy, or 84 properties available for lease, as of December 31, 2012.

Rent Increases

During the quarter ended December 31, 2013, same store rents, on 2,338
properties under lease, increased 1.8% to $110.0million, as compared to
$108.1million for the same quarter in 2012. During 2013, same store rents, on
2,338 properties under lease, increased 1.4% to $435.2million, as compared to
$429.0million for 2012.

Property Acquisitions

During the fourth quarter of 2013, Realty Income invested $145.3 million in 66
new properties, and properties under development or expansion, located in 28
states. These properties are 100% leased with a weighted average lease term of
approximately 12.5 years and an initial average lease yield of 7.3%. The
tenants occupying the new properties operate in 16 industries, and the
property types consist of 80% retail, 12% office, and 8% industrial and
distribution, based on rental revenue.

During 2013, Realty Income invested approximately $1.5 billion in 459 new
properties and properties under development or expansion. The new properties
are located in 40 states and are 100% leased with an average lease term of
approximately 14 years and an initial average lease yield of 7.1%.
Approximately 65% of the revenue generated from the 2013 acquisitions is from
investment grade tenants. The tenants occupying the new properties operate in
23 industries, and the property types consist of 84% retail, 9% office, 5%
industrial and distribution, and 2% manufacturing, based on rental revenue.
These properties are in addition to the $3.2 billion acquisition of 515
properties added to the company's real estate portfolio upon the closing of
the ARCT transaction during the first quarter of 2013. The combined real
estate acquisitions in 2013 were $4.7 billion invested in 974 new properties
and properties under development or expansion. 

Realty Income maintains a $1.5 billion unsecured acquisition credit facility,
which is used to fund property acquisitions in the near term. As of December
31, 2013, $1.37 billion was available on the credit facility to fund
additional acquisitions.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program.
During the quarter ended December31, 2013, Realty Income sold 22 properties
for $28.0million, with a gain on sales of $14.3million, as compared to 14
properties sold for $16.3 million, with a gain on sales of $1.2 million,
during the same quarter in 2012. During 2013, Realty Income sold 75 properties
for $134.2 million, with a gain on sales of $64.7 million, as compared to 44
properties sold for $50.6 million, with a gain on sales of $9.9 million,
during 2012.

Other Quarterly Activities

Expansion of Unsecured Credit Facility

On October 29, 2013, Realty Income announced the expansion of the company's
unsecured acquisition credit facility to $1.5 billion from $1.0 billion. The
company exercised the $500 million accordion expansion of the existing credit
facility with its current bank lending group. All other material business
terms of the credit facility remain unchanged. As of December 31, 2013, the
company had borrowing capacity of approximately $1.37 billion available on the
facility.

Issued 9.775 Million Shares In An Upsized Common Share Offering

On October 25, 2013, Realty Income issued 9.775 million common shares priced
at $40.63 per share. Net proceeds of approximately $378 million were used to
repay a portion of the borrowings under the company's acquisition credit
facility.

Realty Income Names Sumit Roy as Chief Investment Officer

On October 16, 2013, Realty Income announced that Sumit Roy assumed the
position of Chief Investment Officer.

Direct Stock Purchase and Dividend Reinvestment Plan Activities

During the fourth quarter of 2013, Realty Income issued 1,359,164 common
shares via its Stock Plan at an average price of $39.36 per share. The Plan
generated gross proceeds of $52.0 million during the quarter. For 2013, the
company issued 1,449,139 common shares via the Stock Plan, at an average price
of $43.04 per share, raising gross proceeds of $55.9 million.

CEO Comments on Operating Results

Commenting on Realty Income's results and real estate operations, Chief
Executive Officer, John P. Case said, "We are pleased to report record results
for the fourth quarter and for 2013. Revenue significantly increased to over
$778million in 2013, contributing to a 19.3% increase in normalized FFO per
share, to $2.41, and a 17% increase in AFFO per share, to $2.41. Record
earnings growth also allowed us to increase the dividends paid per share to
our shareholders in 2013 by 21.2%, the largest increase in the company's
history. Additionally, our existing portfolio of 3,896 properties continues to
perform well with occupancy increasing to 98.2% at the end of 2013, as
compared to 97.2% at the end of 2012. We also realized same store rent
increases of 1.8% for the fourth quarter, and 1.4% for 2013.

"We completed $1.5 billion in acquisitions for 2013, of which $145.3 million
were closed during the fourth quarter. The weighted average remaining lease
term of the properties acquired in 2013 was 14 years, and 84% of the
acquisitions were retail properties. Including our acquisition of American
Realty Capital Trust in January 2013, we invested approximately $4.7 billion
in real estate, the highest level of acquisitions in the company's 45-year
history. We funded the 2013 acquisitions by issuing $3.2billion of common
stock, $820million in unsecured notes with an average maturity of 10 years,
and assuming approximately $630 million of existing debt.

We also expanded our unsecured credit facility to $1.5billion from $1.0
billion, providing us with additional liquidity to fund acquisitions. We are
currently anticipating approximately $1.2 billion in acquisitions for 2014. As
of February 12, 2014, we have borrowing capacity of approximately $917 million
on the credit facility to fund additional property investment activities."

FFO and AFFO Commentary

Realty Income's FFO and AFFO 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 and AFFO 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 and entity acquisitions and
dispositions, lease rollovers, the general real estate market, and the
economy.

2014 Earnings Estimates

FFO per share for 2014 should range from $2.53 to $2.58 per share, an increase
of 5% to 7% over 2013 FFO per share of $2.41. FFO per share for 2014 is based
on a net income per share range of $0.84 to $0.89, plus estimated real estate
depreciation of $1.76 per share, and reduced by potential estimated gains on
sales of investment properties of $0.07 per share (in accordance with NAREIT's
definition of FFO).

AFFO per share for 2014 should range from $2.53 to $2.58per share, an
increase of 5% to 7% over the 2013 AFFO per diluted share of $2.41. AFFO
further adjusts FFO for unique revenue and expense items, which are not as
pertinent to the measurement of the company's ongoing operating performance.

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 December 31, 2013, the company had paid 521 consecutive
monthly dividends throughout its 45-year operating history. The monthly income
is supported by the cash flows from over 3,800 properties owned under
long-term lease agreements with 205 leading regional and national commercial
tenants. 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 or www.twitter.com/realtyincome.

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, and 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 via the internet
at http://www.realtyincome.com/invest/newsroom-library/press-releases.shtml.


CONSOLIDATED STATEMENTS OF INCOME
For the three months and years ended December 31, 2013 and 2012
(dollars in thousands, except per share amounts - unaudited)
                            Three months  Three months  Year        Year
                            Ended         Ended         Ended       Ended
                            12/31/13      12/31/12      12/31/13    12/31/12
REVENUE
Rental                      $  204,828    $  127,777    $ 747,570   $ 466,498
Tenant reimbursements          9,325         4,507        24,944      14,619
Other                          1,547         519          5,861       1,730
Total revenue                  215,700       132,803      778,375     482,847
EXPENSES
Depreciation and               85,245        41,755       306,577     147,323
amortization
Interest                       50,645        35,065       180,916     122,542
General and administrative     16,511        10,223       56,827      37,998
Property (including            13,056        6,053        38,838      21,297
reimbursable)
Income taxes                   670           215          2,734       1,430
Merger-related costs           138           2,404        13,013      7,899
Provisions for impairment      -             3,639        290         3,639
Total expenses                 166,265       99,354       599,195     342,128
Income from continuing         49,435        33,449       179,180     140,719
operations
Income from discontinued       15,199        5,575        67,103      18,433
operations
Net income                     64,634        39,024       246,283     159,152
Net income attributable to     (298)         -            (719)       -
noncontrolling interests
Net income attributable to     64,336        39,024       245,564     159,152
the Company
Preferred stock dividends      (10,482)      (10,482)     (41,930)    (40,918)
Excess of redemption value
over carrying value of
preferred shares redeemed      -             -            -           (3,696)
Net income available to     $  53,854     $  28,542     $ 203,634   $ 114,538
common stockholders
Funds from operations
available to
common stockholders (FFO)   $  124,492    $  71,579     $ 449,017   $ 260,862
Normalized funds from
operations available to
common stockholders         $  124,630    $  73,983     $ 462,030   $ 268,761
(normalized FFO)
Adjusted funds from
operations available to
common stockholders (AFFO)  $  125,700    $  72,892     $ 463,139   $ 274,183
Per share information for
common stockholders:
Income from continuing
operations,
basic and diluted           $  0.19       $  0.17       $ 0.71      $ 0.72
Net income, basic and       $  0.26       $  0.21       $ 1.06      $ 0.86
diluted
FFO, basic and diluted      $  0.61       $  0.54       $ 2.34      $ 1.96
Normalized FFO, basic and   $  0.61       $  0.56       $ 2.41      $ 2.02
diluted
AFFO:
Basic                       $  0.62       $  0.55       $ 2.42      $ 2.06
Diluted                     $  0.62       $  0.55       $ 2.41      $ 2.06
Cash dividends paid per     $  0.546      $  0.454      $ 2.147     $ 1.772
common share



FUNDS FROM OPERATIONS (FFO)
(dollars in thousands, except per share amounts)
                      Three months   Three months   Year          Year
                      Ended          Ended          Ended         Ended
                      12/31/13       12/31/12       12/31/13      12/31/12
Net income available
to common             $  53,854      $   28,542     $  203,634    $  114,538
stockholders
Depreciation and
amortization:
      Continuing         85,245          41,755        306,577       147,323
      operations
      Discontinued       84              730           1,818         3,984
      operations
Depreciation allocated
to noncontrolling        (329)           -             (1,009)       -
interest
Depreciation of
furniture, fixtures and  (86)            (57)          (288)         (249)
equipment
Provisions for
impairment on investment -               4,472         3,028         5,139
properties
Gain on sale of
investment
properties,
      discontinued       (14,276)        (3,863)       (64,743)      (9,873)
      operations
FFO available to         124,492         71,579        449,017       260,862
common stockholders
Merger-related costs     138             2,404         13,013        7,899
Normalized FFO
available to common   $  124,630     $   73,983     $  462,030    $  268,761
stockholders
FFO per common
share, basic and      $  0.61        $   0.54       $  2.34       $  1.96
diluted
Normalized FFO per
common share,
      basic and       $  0.61        $   0.56       $  2.41       $  2.02
      diluted
Distributions paid
to common             $  110,678     $   60,629     $  409,222    $  236,348
stockholders
Normalized FFO in
excess of
distributions paid
to
      common          $  13,952      $   13,354     $  52,808     $  32,413
      stockholders
Weighted average number
of common shares
      used for
      computation
      per share:
      Basic           203,303,124    132,846,497    191,754,857   132,817,472
      Diluted         203,326,838    132,979,552    191,781,622   132,884,933
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, plus
impairments of real estate assets, reduced by gains on sales of investment
properties and extraordinary items. We define normalized FFO, a non-GAAP
measure, as FFO excluding the ARCT merger-related costs.
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   Three months   Year          Year
                      Ended          Ended          Ended         Ended
                      12/31/13       12/31/12       12/31/13      12/31/12
Net income available
to common             $  53,854      $   28,542     $  203,634    $  114,538
stockholders
Cumulative
adjustments to           70,776          45,441        258,396       154,223
calculate normalized
FFO ^(1)
Normalized FFO available 124,630         73,983        462,030       268,761
to common stockholders
Amortization of
share-based              6,550           2,221         20,785        10,001
compensation
Amortization of
deferred financing       1,219           948           4,436         2,786
costs ^(2)
Provisions for
impairment on Crest      308             -             308           -
properties
Excess of redemption
value over carrying
value
      of Class D
      preferred          -               -             -             3,696
      share
      redemption
Amortization of net      (2,522)         (387)         (9,481)       (665)
mortgage premiums
(Gain) loss on           (188)           (18)          (878)         56
interest rate swaps
Capitalized leasing
costs and                (137)           (401)         (1,280)       (1,619)
commissions
Capitalized building     (2,468)         (1,652)       (7,227)       (4,935)
improvements
Straight-line rent       (3,631)         (2,128)       (13,742)      (5,674)
Amortization of above    1,939           326           8,188         1,776
and below-market lease
Total AFFO available
to common             $  125,700     $   72,892     $  463,139    $  274,183
stockholders
AFFO per common
share:
      Basic           $  0.62        $   0.55       $  2.42       $  2.06
      Diluted         $  0.62        $   0.55       $  2.41       $  2.06
Distributions paid
to common             $  110,678     $   60,629     $  409,222    $  236,348
stockholders
AFFO in excess of
distributions paid
to
      common          $  15,022      $   12,263     $  53,917     $  37,835
      stockholders

^(1) See FFO and normalized FFO calculation above for reconciling items.
     Includes the amortization of costs incurred and capitalized when our
     notes were issued in March 2003, November 2003, March 2005, September
     2005, September 2006, September 2007, June 2010, June 2011, October 2012
     and July 2013. Additionally, this includes the amortization of deferred
^(2) financing costs incurred and capitalized in connection with our
     assumption of the mortgages payable and the issuance of our term loan.
     The deferred financing costs are being amortized over the lives of the
     respective mortgages and term loan. No costs associated with our credit
     facility agreements or annual fees paid to credit rating agencies have
     been included.



HISTORICAL FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(dollars in thousands, except per share amounts)
For the three
months ended      2013         2012         2011         2010         2009
December 31,
Net income
available to   $  53,854    $  28,542    $  34,941    $  31,814    $  29,268
common
stockholders
Depreciation
and               84,914       42,428       34,314       25,045       22,916
amortization
Provisions for
impairment on     -            4,472        27           42           110
investment
properties
Gain on sales
of investment     (14,276)     (3,863)      (1,205)      (4,392)      (3,809)
properties
FFO               124,492      71,579       68,077       52,509       48,485
Merger-related    138          2,404        -            -            -
costs
Normalized FFO $  124,630   $  73,983    $  68,077    $  52,509    $  48,485
Normalized FFO
per diluted    $  0.61      $  0.56      $  0.51      $  0.47      $  0.47
share
AFFO           $  125,700   $  72,892    $  68,524    $  53,327    $  48,622
AFFO per       $  0.62      $  0.55      $  0.52      $  0.48      $  0.47
diluted share
Cash dividends $  0.546     $  0.454     $  0.436     $  0.432     $  0.428
paid per share
Weighted
average        203,326,838  132,979,552  132,609,319  112,067,874  103,491,891
diluted shares
outstanding
For the year
ended December    2013         2012         2011         2010         2009
31,
Net income
available to   $  203,634   $  114,538   $  132,779   $  106,531   $  106,874
common
stockholders
Depreciation
and               307,098      151,058      121,941      95,858       91,629
amortization
Provisions for
impairment on     3,028        5,139        405          213          110
investment
properties
Gain on sales
of investment     (64,743)     (9,873)      (5,733)      (8,676)      (8,059)
properties
FFO               449,017      260,862      249,392      193,926      190,554
Merger-related    13,013       7,899        -            -            -
costs
Normalized FFO $  462,030   $  268,761   $  249,392   $  193,926   $  190,554
Normalized FFO
per diluted    $  2.41      $  2.02      $  1.98      $  1.83      $  1.84
share
AFFO           $  463,139   $  274,183   $  253,372   $  197,256   $  192,739
AFFO per       $  2.41      $  2.06      $  2.01      $  1.86      $  1.86
diluted share
Cash dividends $  2.147     $  1.772     $  1.737     $  1.722     $  1.707
paid per share
Weighted
average        191,781,622  132,884,933  126,189,399  105,942,721  103,581,053
diluted shares
outstanding





REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2013 and 2012
(dollars in thousands, except per share data)
                                                      2013           2012
ASSETS
Real estate, at cost:
Land                                                $ 2,791,147    $ 1,999,820
Buildings and improvements                            7,108,328      3,920,865
Total real estate, at cost                            9,899,475      5,920,685
Less accumulated depreciation and amortization        (1,114,888)    (897,767)
Net real estate held for investment                   8,784,587      5,022,918
Real estate held for sale, net                        12,022         19,219
Net real estate                                       8,796,609      5,042,137
Cash and cash equivalents                             10,257         5,248
Accounts receivable, net                              39,323         21,659
Acquired lease intangible assets, net                 935,459        242,125
Goodwill                                              15,660         16,945
Other assets, net                                     127,133        101,234
Total assets                                        $ 9,924,441    $ 5,429,348
LIABILITIES AND EQUITY
Distributions payable                               $ 41,452       $ 23,745
Accounts payable and accrued expenses                 102,511        70,426
Acquired lease intangible liabilities, net            148,250        26,471
Other liabilities                                     44,030         26,059
Lines of credit payable                               128,000        158,000
Term loan                                             70,000         -
Mortgages payable, net                                783,360        175,868
Notes payable, net                                    3,185,480      2,535,985
Total liabilities                                     4,503,083      3,016,554
Commitments and contingencies
Stockholders' equity:
Preferred stock and paid in capital, par value
$0.01 per share, 69,900,000 shares authorized and     609,363        609,363
25,150,000 shares issued and outstanding as of
December 31, 2013 and December 31, 2012
Common stock and paid in capital, par value $0.01
per share, 370,100,000 shares authorized,
207,485,073 shares issued and outstanding as of       5,767,878      2,572,092
December 31, 2013 and 133,452,411 shares issued and
outstanding at December 31, 2012
Distributions in excess of net income                 (991,794)      (768,661)
Total stockholders' equity                            5,385,447      2,412,794
Noncontrolling interests                              35,911         -
Total equity                                          5,421,358      2,412,794
Total liabilities and equity                        $ 9,924,441    $ 5,429,348



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  yield     return   yield     return   yield     return   yield     return
                     ^(2)              ^(3)               ^(3)               ^(3)               ^(4)
10/18 to   10.5%     10.8%   7.7%      0.0%     2.9%      (1.6%)   2.9%      (1.2%)   0.5%      (1.7%)
12/31/1994
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%
2011       5.0%      7.3%    3.8%      8.3%     2.8%      8.3%     2.3%      2.1%     1.3%      (1.8%)
2012       4.5%      20.1%   3.5%      19.7%    3.0%      10.2%    2.5%      16.0%    2.6%      15.9%
2013       5.8%      (1.8%)  3.9%      2.9%     2.3%      29.6%    2.0%      32.4%    1.4%      38.3%
Compounded Average
Annual Total Return  16.3%             10.6%              10.3%              9.5%               9.2%
^(5)

Note: All of these dividend yields are calculated as annualized dividends
based on the last dividend paid in applicable time period divided by the
closing price as of period end. Dividend yield sources: NAREIT website and
Bloomberg, except for the 1994 NASDAQ dividend yield which was sourced from
Datastream / Thomson Financial.

^(1) FTSE NAREIT US Equity REIT Index, as per NAREIT website.
     Calculated as the difference between the closing stock price as of period
^(2) 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. Source: NAREIT website and Factset.
^(4) Price only index, does not include dividends. Source: Factset.
     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 December 31, 2013, and (except for NASDAQ) assuming reinvestment
^(5) of dividends. 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 December 31, 2013 (dollars in
thousands):
                                                  Rental          Percentage
                                     Approximate    Revenue for     of
                       Number of               the Quarter     Rental
                                     Leasable       Ended
Property Type          Properties     Square      December 31,    Revenue
                                     Feet           2013^(1)
Retail                 3,747         39,979,700     $   158,804     77.4%
Industrial and         79            15,661,100         22,374      10.9
distribution
Office                 42            3,104,400          13,450      6.6
Manufacturing          13            3,715,200          5,254       2.6
Agriculture            15            184,500            5,202       2.5
Totals                 3,896         62,644,900     $   205,084     100.0%

     Includes rental revenue for all properties owned by Realty Income at
^(1) December 31, 2013, including revenue from properties reclassified as
     discontinued operations of $279. Excludes revenue of $23 from properties
     owned by Crest.



Tenant Diversification
The largest tenants based on percentage of total portfolio rental revenue at
December 31, 2013 include the following:
FedEx                                  5.2%        Dollar General       2.4%
Walgreens                              5.0%        Rite Aid             2.2%
Family Dollar                          4.8%        Regal Cinemas        2.1%
LA Fitness                             4.3%        CVS Pharmacy         2.1%
AMC Theatres                           3.1%        The Pantry           1.8%
Diageo                                 2.9%        Circle K             1.7%
BJ's Wholesale Clubs                   2.9%        Walmart/Sam's Club   1.6%
Northern Tier Energy/Super America     2.5%



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
                   Ended
                   December    Dec      Dec      Dec      Dec     Dec    Dec
                   31,         31,      31,      31,      31,     31,    31,
                   2013        2013     2012     2011     2010    2009   2008
Retail industries
Apparel stores     1.7%        1.9%     1.7%     1.4%     1.2%    1.1%   1.1%
Automotive         0.8         0.8      1.1      0.9      1.0     1.1    1.0
collision services
Automotive parts   1.4         1.2      1.0      1.2      1.4     1.5    1.6
Automotive service 1.9         2.1      3.1      3.7      4.7     4.8    4.8
Automotive tire    3.3         3.6      4.7      5.6      6.4     6.9    6.7
services
Book stores        *           *        0.1      0.1      0.1     0.2    0.2
Child care         2.5         2.8      4.5      5.2      6.5     7.3    7.6
Consumer           0.3         0.3      0.5      0.5      0.6     0.7    0.8
electronics
Convenience stores 10.6        11.2     16.3     18.5     17.1    16.9   15.8
Crafts and         0.5         0.5      0.3      0.2      0.3     0.3    0.3
novelties
Dollar stores      7.1         6.2      2.2      -        -       -      -
Drug stores        9.7         8.1      3.5      3.8      4.1     4.3    4.1
Education          0.4         0.4      0.7      0.7      0.8     0.9    0.8
Entertainment      0.6         0.6      0.9      1.0      1.2     1.3    1.2
Equipment services 0.1         0.1      0.1      0.2      0.2     0.2    0.2
Financial services 1.4         1.5      0.2      0.2      0.2     0.2    0.2
General            1.2         1.1      0.6      0.6      0.8     0.8    0.8
merchandise
Grocery stores     2.8         2.9      3.7      1.6      0.9     0.7    0.7
Health and fitness 6.8         6.3      6.8      6.4      6.9     5.9    5.6
Health care        1.0         1.1      -        -        -       -      -
Home furnishings   0.8         0.9      1.0      1.1      1.3     1.3    2.4
Home improvement   1.5         1.6      1.5      1.7      2.0     2.2    2.1
Jewelry            0.1         0.1      -        -        -       -      -
Motor vehicle      1.6         1.6      2.1      2.2      2.6     2.7    3.2
dealerships
Office supplies    0.4         0.5      0.8      0.9      0.9     1.0    1.0
Pet supplies and   0.8         0.8      0.6      0.7      0.9     0.9    0.8
services
Restaurants -      4.7         5.1      7.3      10.9     13.4    13.7   14.3
casual dining
Restaurants -      4.3         4.4      5.9      6.6      7.7     8.3    8.2
quick service
Shoe stores        0.1         0.1      0.1      0.2      0.1     -      -
Sporting goods     1.6         1.7      2.5      2.7      2.7     2.6    2.3
Theaters           5.6         6.2      9.4      8.8      8.9     9.2    9.0
Transportation     0.1         0.1      0.2      0.2      0.2     0.2    0.2
services
Wholesale clubs    4.3         3.9      3.2      0.7      -       -      -
Other              *           0.1      0.1      0.1      0.3     1.1    1.2
Retail industries  80.0%       79.8%    86.7%    88.6%    95.4%   98.3%  98.2%



Industry Diversification (continued)
                     Percentage of Rental Revenue^(1)
                     For the
                     Quarter   For the Years Ended
                     Ended
                     December  Dec 31,  Dec     Dec     Dec     Dec     Dec
                     31,                31,     31,     31,     31,     31,
                     2013      2013     2012    2011    2010    2009    2008
Non-retail
industries
Aerospace            1.3       1.2      0.9     0.5     -       -       -
Beverages            3.0       3.3      5.1     5.6     3.0     -       -
Consumer appliances  0.6       0.6      0.1     -       -       -       -
Consumer goods       1.0       1.0      0.1     -       -       -       -
Crafts and novelties 0.1       0.1      -       -       -       -       -
Diversified          0.2       0.2      0.1     -       -       -       -
industrial
Electric Utilities   0.1       *        -       -       -       -       -
Equipment services   0.5       0.4      0.3     0.2     -       -       -
Financial services   0.5       0.5      0.4     0.3     -       -       -
Food processing      1.4       1.5      1.3     0.7     -       -       -
Government services  1.3       1.4      0.1     0.1     0.1     0.1     -
Health care          0.8       0.8      *       *       -       -       -
Home furnishings     0.2       0.2      -       -       -       -       -
Insurance            0.1       0.1      *       -       -       -       -
Machinery            0.2       0.2      0.1     -       -       -       -
Other manufacturing  0.6       0.6      -       -       -       -       -
Packaging            0.9       0.9      0.7     0.4     -       -       -
Paper                0.1       0.2      0.1     0.1     -       -       -
Shoe stores          0.8       0.9      -       -       -       -       -
Telecommunications   0.6       0.7      0.8     0.7     -       -       -
Transportation       5.3       5.3      2.2     1.6     -       -       -
services
Other                0.4       0.1      1.0     1.2     1.5     1.6     1.8
Non-retail           20.0%     20.2%    13.3%   11.4%   4.6%    1.7%    1.8%
industries
Totals               100.0%    100.0%   100.0%  100.0%  100.0%  100.0%  100.0%

*    Less than 0.1%
     Includes rental revenue for all properties owned by Realty Income at the
^(1) end of each period presented, including revenue from properties
     reclassified as discontinued operations. Excludes revenue from properties
     owned by Crest.





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 3,807
net leased, single-tenant properties as of December 31, 2013 (dollars in thousands):
Total Portfolio                                       Initial Expirations^(3)        Subsequent Expirations^(4)
                                 Rental                         Rental                         Rental
                                 Revenue                        Revenue                        Revenue
                                 for the                        for the                        for the
                                 Quarter    % of               Quarter    % of               Quarter   % of
       Number        Approx.     Ended      Total     Number    Ended      Total     Number    Ended     Total
       of Leases     Leasable    Dec 31,    Rental    of        Dec 31,    Rental    of        Dec 31,   Rental
                                                      Leases                         Leases
Year   Expiring^(1)  Sq. Feet    2013^(2)   Revenue   Expiring  2013       Revenue   Expiring  2013      Revenue
2014        157      1,116,500   $ 4,005    2.0     % 56        $ 1,960    1.0     % 101       $ 2,045   1.0     %
2015        174      961,500       4,111    2.0       67          1,808    0.9       107         2,303   1.1
2016        200      1,214,900     4,618    2.3       121         2,807    1.4       79          1,811   0.9
2017        177      2,038,400     6,058    3.0       46          3,052    1.5       131         3,006   1.5
2018        278      3,621,900     11,276   5.6       162         7,920    3.9       116         3,356   1.7
2019        193      3,017,500     10,496   5.1       161         9,599    4.7       32          897     0.4
2020        110      3,404,600     8,844    4.4       99          8,468    4.2       11          376     0.2
2021        189      5,314,200     13,616   6.7       181         13,105   6.4       8           511     0.3
2022        224      7,270,400     14,508   7.2       216         14,273   7.1       8           235     0.1
2023        355      6,133,200     19,731   9.7       342         19,076   9.4       13          655     0.3
2024        140      2,105,200     7,016    3.5       140         7,016    3.5       -           -       -
2025        288      3,734,800     16,633   8.3       283         16,510   8.2       5           123     0.1
2026        231      3,396,200     12,133   6.0       228         12,049   6.0       3           84      *
2027        443      4,177,700     14,591   7.2       441         14,551   7.2       2           40      *
2028        283      5,758,000     15,911   7.8       281         15,858   7.8       2           53      *
2029 -      365      7,951,300     38,832   19.2      358         38,652   19.1      7           180     0.1
2043
Totals      3,807    61,216,300  $ 202,379  100.0   % 3,182     $ 186,704  92.3    % 625       $ 15,675  7.7     %

*    Less than 0.1%
     Excludes 19 multi-tenant properties and 70 vacant unleased properties,
^(1) 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.
     Includes rental revenue of $279 from properties reclassified as
     discontinued operations and excludes revenue of $2,705 from 19
^(2) multi-tenant properties and from 70 vacant and unleased properties at
     December 31, 2013. Excludes revenue of $23 from 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 December 31, 2013 (dollars in
thousands):
                                         Approximate Rental      Percentage of
                                                     Revenue for
                                                     the
                      Number of  Percent Leasable    Quarter     Rental
                                                     Ended
                                                     December
State                 Properties Leased  Square Feet 31,         Revenue
                                                     2013^(1)
Alabama   104        97%     791,800     $  2,846    1.4%
Alaska   2          100     128,500        307      0.1
Arizona   110        96      1,187,400      5,510    2.7
Arkansas   36         94      619,200        1,180    0.6
California   161        99      4,705,200      22,672   11.1
Colorado   69         99      792,100        2,969    1.4
Connecticut   22         95      462,100        2,071    1.0
Delaware   16         100     29,500         418      0.2
Florida   279        99      2,951,000      12,029   5.9
Georgia   209        97      2,689,400      8,368    4.1
Hawaii   --         --      --             --       --
Idaho   13         100     91,800         456      0.2
Illinois   155        100     4,215,700      12,244   6.0
Indiana   100        98      1,055,400      4,954    2.4
Iowa   35         97      2,751,700      3,301    1.6
Kansas   76         99      1,583,300      3,370    1.6
Kentucky   45         98      808,700        2,920    1.4
Louisiana   75         97      836,700        2,456    1.2
Maine                 9          100     126,400        837      0.4
Maryland   32         100     654,100        3,711    1.8
Massachusetts   82         96      728,200        3,205    1.6
Michigan   103        98      938,600        3,229    1.6
Minnesota   155        100     1,153,300      7,416    3.6
Mississippi   96         97      1,307,200      3,177    1.5
Missouri   122        98      2,307,000      7,343    3.6
Montana   2          50      30,000         13       *
Nebraska   30         100     660,200        1,296    0.6
Nevada   22         100     413,000        1,279    0.6
New Hampshire   18         100     290,900        1,224    0.6
New Jersey   62         98      452,700        2,608    1.3
New Mexico   24         100     184,600        589      0.3
New York   81         95      2,007,900      10,153   5.0
North Carolina   129        99      1,259,300      4,795    2.3
North Dakota   7          100     66,000         138      0.1
Ohio   200        98      4,795,700      11,294   5.5
Oklahoma   112        100     1,467,200      3,601    1.8
Oregon   24         100     455,200        1,620    0.8
Pennsylvania   147        99      1,745,400      6,957    3.4
Rhode Island   3          100     21,300         107      *
South Carolina   127        98      897,500        4,140    2.0
South Dakota   11         100     133,500        244      0.1
Tennessee   156        97      2,653,200      5,145    2.5
Texas   393        98      6,760,200      19,493   9.5
Utah   13         100     749,000        1,326    0.6
Vermont   6          100     100,700        522      0.3
Virginia   127        97      2,531,900      6,465    3.2
Washington   38         100     415,300        1,609    0.8
West Virginia   12         100     261,200        883      0.4
Wisconsin   39         95      1,329,300      2,382    1.2
Wyoming   3          100     21,100         63       *
Puerto Rico           4          100     28,300         149      0.1
Totals\Average        3,896      98%     62,644,900  $  205,084  100.0%

*    Less than 0.1%
     Includes rental revenue for all properties owned by Realty Income at
^(1) December 31, 2013, including revenue from properties reclassified as
     discontinued operations of $279. Excludes revenue of $23 from properties
     owned by Crest.



SOURCE Realty Income Corporation

Website: http://www.realtyincome.com
Contact: Tere H. Miller, Vice President, Investor Relations & Corporate
Communications, (760) 741-2111, x1177
 
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