|
Realty
Income Corporation and Subsidiaries
Notes
to Consolidated Financial Statements
December
31, 1999, 1998 and 1997
1.
Organization and Operation
Realty
Income Corporation (“Realty Income”, the “Company”, “we” or
“our”) is organized in the State of Maryland. We invest in
commercial retail real estate and have elected to be taxed
as a real estate investment trust (“REIT”). As of December
31, 1999, we owned 1,076 properties in 45 states containing
over 8.6 million leasable square feet.
2.
Summary of Significant Accounting Policies and Procedures
Principles
of Consolidation
The accompanying consolidated financial statements include
the accounts of Realty Income and entities we control (subsidiaries)
after elimination of all material intercompany balances and
transactions.
Cash
Equivalents We
consider all short-term, highly liquid investments that are
readily convertible to cash and have an original maturity
of three months or less at the time of purchase to be cash
equivalents.
Depreciation
and Amortization Depreciation
of buildings and improvements, and amortization of goodwill
are computed using the straight-line method over an estimated
useful life of 25 years. Amortization of goodwill for each
of the years ended December 31, 1999, 1998 and 1997 was $924,000.
Leases
All
leases are accounted for as operating leases. Under this method,
lease payments are recognized as revenue over the term of
the lease.
Federal
Income Taxes We
have elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended (the “IRS Code”). We believe Realty
Income has qualified and continues to qualify as a REIT and
therefore will be permitted to deduct distributions paid to
its stockholders, eliminating the federal taxation of income
represented by those distributions at the Company’s level.
Accordingly, no provision has been made for federal income
taxes in the accompanying consolidated financial statements.
Distributions
Paid and Payable Realty
Income pays distributions monthly to our common stockholders.
The following is a summary of monthly cash distributions paid
per common share for the years ended December 31, 1999, 1998
and 1997.
The
following presents the federal income tax characterization
of distributions paid or deemed to be paid to common stockholders
for the years ended December 31:
|
