Supplemental Disclosures of Cash Flow Information

6 Months Ended

Jun. 30, 2012

Supplemental Disclosures of Cash Flow Information

Supplemental Disclosures of Cash Flow Information

15.Supplemental Disclosures of Cash Flow Information

Interest paid was $55.7 million in the first six months of 2012 and was $49.0 million in the first six months of 2011.

Interest capitalized to properties under development was $277,000 in the first six months of 2012 and was $173,000 in the first six months of 2011.

Income taxes paid were $818,000 in the first six months of 2012 and were $946,000 in the first six months of 2011.

The following non-cash investing and financing activities are included in the accompanying consolidated financial statements:

A.  Share-based compensation expense was $5.6 million for the first six months of 2012 and was $4.3 million for the first six months of 2011.

B.  Accrued costs on properties under development resulted in an increase in buildings and improvements and accounts payable of $1.9 million at June 30, 2012, and $3.6 million at June 30, 2011.

C.  In 2011, we entered into loan agreements to fund development of real estate. Accrued loans receivable resulted in an increase in other assets of $889,000 at June 30, 2012.

D.  As part of the acquisition of three properties, during the first six months of 2011, we assumed $58.6 million of mortgages payable to third-party lenders and recorded $820,000 of net premiums. See note 6 for a discussion of these transactions.

E.  See note 12 for a discussion of impairments recorded by Realty Income in discontinued operations for the first six months of 2011.