SAN DIEGO, Aug. 5, 2019 /PRNewswire/ -- Realty Income
Corporation (Realty Income, NYSE: O), The Monthly Dividend
Company®, today announced operating results for the
second quarter and six months ended June 30,
2019. 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 June 30,
2019:
- Net income per share was $0.31
- AFFO per share increased 2.5% to $0.82, compared to the quarter ended June 30, 2018
- Invested $1.1 billion in 102
properties, bringing our investments year-to-date to over
$1.6 billion, including £433.9
million (or approximately $549.2
million) related to our first international real estate
investment in the United
Kingdom
- Raised $1.0 billion from the sale
of common stock
- Issued $500 million of senior
unsecured notes due 2029 through a public offering, and £315
million in senior unsecured notes due 2034 through a private
placement
CEO Comments
"We completed another strong quarter and our business continues
to perform well," said Sumit Roy,
Realty Income's President and Chief Executive Officer. "We invested
approximately $1.1 billion in high
quality real estate during the quarter, including completing our
first-ever international acquisition, bringing us to over
$1.6 billion invested during the
first half of the year. To finance our investment activity, we
raised approximately $1.9 billion of
attractively priced capital during the quarter, including over
$1.0 billion of equity."
"We ended the quarter with nearly full availability on our
$3.0 billion revolving credit
facility and a debt-to-EBITDA ratio of 5.4x. We remain very
well-positioned with a conservative capital structure,
sector-leading cost of capital, and a robust pipeline of investment
opportunities."
Financial Results
Revenue
Revenue for the quarter ended
June 30, 2019, increased 11.1% to
$365.5 million, as compared to
$328.9 million for the same quarter
in 2018. Revenue for the six months ended June 30, 2019 increased 11.2% to $719.8 million, as compared to $647.2 million for the same period in
2018.
Net Income Available to Common Stockholders
Net
income available to common stockholders for the quarter ended
June 30, 2019, was $95.2 million, as compared to $96.4 million for the same quarter in 2018.
Net income per share for the quarter ended June 30, 2019, was $0.31, as compared to $0.34 for the same quarter in 2018.
Net income available to common stockholders for the six months
ended June 30, 2019 was $206.1
million, as compared to $179.5
million for the same period in 2018. Net income per share
for the six months ended June 30,
2019 was $0.67, as compared to
$0.63 for the same period in
2018.
The calculation to determine net income for a real estate
company includes impairments, gains on property sales and foreign
currency gains and losses. These items can vary from quarter to
quarter and can significantly impact net income and period to
period comparisons.
Funds From Operations Available to Common Stockholders
(FFO)
FFO for the quarter ended June 30, 2019, increased to $251.5 million, as compared to $226.1 million for the same quarter in 2018. FFO
per share for the quarter ended June 30,
2019, increased to $0.81, as
compared to $0.79 for the same
quarter in 2018.
FFO for the six months ended June 30,
2019 increased to $497.2
million, as compared to $451.0
million for the same period in 2018. FFO per share for the
six months ended June 30, 2019
increased to $1.62, as compared to
$1.58 for the same period in
2018.
Adjusted Funds From Operations Available to Common
Stockholders (AFFO)
AFFO for the quarter ended
June 30, 2019, increased 11.9% to
$253.9 million, as compared to
$227.0 million for the same quarter
in 2018. AFFO per share for the quarter ended June 30, 2019, increased 2.5% to $0.82, as compared to $0.80 for the same quarter in 2018.
AFFO for the six months ended June 30,
2019 increased 11.3% to $502.7
million, as compared to $451.5
million for the same period in 2018. AFFO per share for the
six months ended June 30, 2019
increased 2.5% to $1.63, as compared
to $1.59 for the same period in
2018.
The company considers FFO and AFFO to be appropriate
supplemental measures of a Real Estate Investment Trust's (REIT's)
operating performance. Realty Income defines FFO, a non-GAAP
measure, consistent with the National Association of Real Estate
Investment Trusts' (NAREIT's) definition, as net income available
to common stockholders, plus depreciation and amortization of real
estate assets, plus impairments of real estate assets, and reduced
by gains on property sales. AFFO further adjusts 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. Presentation of the information regarding FFO and AFFO
is intended to assist the reader in comparing the operating
performance of different REITs, although it should be noted that
not all REITs calculate FFO and AFFO in the same way, so
comparisons with other REITs may not be meaningful. FFO and AFFO
should not be considered as alternatives to reviewing our cash
flows from operating, investing, and financing activities. In
addition, FFO and AFFO should not be considered as measures of
liquidity, our ability to make cash distributions, or our ability
to pay interest payments. See the reconciliations of net income
available to common stockholders to FFO and AFFO on pages seven and
eight of this press release.
Dividend Increases
In June 2019, Realty Income announced the
87th consecutive quarterly dividend increase, which is
the 102nd increase in the amount of the dividend since
the company's listing on the New York Stock Exchange (NYSE) in
1994. The annualized dividend amount as of June 30, 2019 was $2.718 per share. The amount of monthly dividends
paid per share increased 2.9% to $0.678 in the second quarter of 2019, as compared
to $0.659 for the same quarter of
2018. During the second quarter of 2019, the company distributed
$208.9 million in common dividends to
shareholders, representing 82.3% of its AFFO of $253.9 million.
Real Estate Portfolio Update
As of June 30, 2019, Realty Income's portfolio of
freestanding, single-tenant properties consisted of 5,951
properties located in 49 states, Puerto
Rico and the United
Kingdom, leased to 265 different commercial tenants, and
doing business in 49 industries. The properties are leased under
long-term, net lease agreements with a weighted average remaining
lease term of 9.4 years.
Asset Management Activities
The company's
portfolio of commercial real estate, owned primarily under
long-term net leases, continues to perform well and provides
dependable rental revenue supporting the payment of monthly
dividends. As of June 30, 2019,
portfolio occupancy was 98.3% with 102 properties available for
lease out of 5,951 properties in the portfolio, as compared to
98.3% as of March 31, 2019 and 98.7%
as of June 30, 2018. Economic occupancy, or occupancy as
measured by rental revenue, was 98.6% as of June 30, 2019, as
compared to 98.8% as of March 31,
2019 and 98.9% as of June 30, 2018.
Since March 31, 2019, when the
company reported 102 properties available for lease, the company
had 102 lease expirations, re-leased 86 properties and sold 16
vacant properties during the quarter ended June 30, 2019. Of
the 86 properties re-leased during the quarter ended June 30, 2019, 82 properties were re-leased to
the same tenants and four were re-leased to new tenants after a
period of vacancy. The annual new rent on these re-leases was
$23.8 million, as compared to the
previous annual rent of $23.7 million
on the same properties, representing a rent recapture rate of
100.4% on the properties re-leased during the quarter ended
June 30, 2019.
Since December 31, 2018, when the
company reported 80 properties available for lease, the company
had 210 lease expirations,
re-leased 157 properties and sold 31 vacant
properties during the six months ended June 30,
2019. Of the 157 properties re-leased during the six
months ended June 30, 2019, 148 properties were
re-leased to the same tenants, four were re-leased to new
tenants without vacancy, and five were re-leased to new
tenants after a period of vacancy. The annual new rent on
these re-leases was $41.6 million, as compared to the previous
annual rent of $40.7 million on the same properties,
representing a rent recapture rate of 102.2% on the
properties re-leased during the six months ended
June 30, 2019.
Rent Increases
During the quarter ended
June 30, 2019, same store rents on 4,863 properties under
lease increased 1.4% to $294.0
million, as compared to $289.8
million for the same quarter in 2018. For the six months
ended June 30, 2019, same store rents
on 4,863 properties under lease increased 1.5% to $590.5 million as compared to $581.9 million for the same period in 2018.
|
Investments in
Real Estate
The following table
summarizes our acquisitions in the U.S. and U.K. for the periods
indicated below:
|
|
|
Number of
Properties
|
|
Square Feet
(in millions)
|
|
Investment
($ in millions)
|
|
Weighted
Average
Lease Term
(Years)
|
|
Initial Average
Cash Lease
Yield
|
|
Three months ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
(in 28 states)
|
78
|
|
|
2.3
|
|
|
$
|
532.3
|
|
|
14.8
|
|
|
6.9
|
%
|
|
Acquisitions - U.K.
(1)
|
12
|
|
|
1.1
|
|
|
549.2
|
|
|
14.8
|
|
|
5.3
|
%
|
|
Total
Acquisitions
|
90
|
|
|
3.4
|
|
|
1,081.5
|
|
|
14.8
|
|
|
6.1
|
%
|
|
Properties under
Development - U.S.
|
12
|
|
|
0.4
|
|
|
13.2
|
|
|
15.9
|
|
|
7.3
|
%
|
|
Total
(2)
|
102
|
|
|
3.8
|
|
|
$
|
1,094.7
|
|
|
14.8
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
(in 34 states)
|
175
|
|
|
4.2
|
|
|
$
|
1,040.9
|
|
|
15.9
|
|
|
6.8
|
%
|
|
Acquisitions - U.K.
(1)
|
12
|
|
|
1.1
|
|
|
549.2
|
|
|
14.8
|
|
|
5.3
|
%
|
|
Total
Acquisitions
|
187
|
|
|
5.3
|
|
|
1,590.1
|
|
|
15.5
|
|
|
6.3
|
%
|
|
Properties under
Development - U.S.
|
12
|
|
|
0.4
|
|
|
24.1
|
|
|
16.5
|
|
|
7.2
|
%
|
|
Total
(3)
|
199
|
|
|
5.7
|
|
|
$
|
1,614.2
|
|
|
15.6
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents investment
of £433.9 million, multiplied by the applicable exchange rate on
the closing date of the acquisition.
|
|
(2)
|
The tenants occupying
the new properties operate in 15 industries, and are 99.4% retail
and 0.6% industrial, based on rental revenue. Approximately 12% of
the rental revenue generated from acquisitions during the second
quarter of 2019 is from investment grade rated tenants and their
subsidiaries.
|
|
(3)
|
The tenants occupying
the new properties operate in 17 industries, and are 99.1% retail
and 0.9% industrial, based on rental revenue. Approximately 18% of
the rental revenue generated from acquisitions during the first six
months of 2019 is from investment grade rated tenants and their
subsidiaries.
|
Property Dispositions
During the quarter ended
June 30, 2019, Realty Income sold 18
properties for $28.6 million, with a
gain on sales of $6.9 million.
During the six months ended June 30,
2019, Realty Income sold 37 properties for $51.1 million, with a gain on sales of
$14.2 million.
Liquidity and Capital Markets
Capital Raising
During the quarter ended
June 30, 2019, Realty Income raised
$1.0 billion from the sale of common
stock at a weighted average price of $69.67 per share, including net proceeds of
$845.1 million raised in the issuance
of 12,650,000 shares of common stock in an overnight public
offering in May 2019.
Also in May 2019, we entered into
a note purchase agreement (the "Note Purchase Agreement") that
provided for the private placement of £315 million in senior
unsecured notes due May 2034 (the
"2034 Notes").
In June 2019, we issued $500
million of 3.250% senior unsecured notes due
June 2029 (the "2029 Notes"). The
public offering price for the 2029 Notes was 99.359% of
the principal amount, for an effective yield to maturity
of 3.326%.
Credit Facility
Realty Income has a
$3.25 billion unsecured credit
facility, which is comprised of a $3.0
billion revolving credit facility, with an initial term that
expires in March 2023 (subject to two
six-month options to extend), and a $250.0
million term loan due March
2024. The revolving credit facility also has a $1.0 billion expansion feature. As of
June 30, 2019, the balance of
borrowings outstanding under our revolving credit facility was
$8.0 million.
2019 Earnings Guidance
We estimate AFFO per share for 2019 of $3.28 to $3.33.
AFFO adjusts FFO for unique revenue and expense items, which are
not as pertinent to the measurement of Realty Income's ongoing
operating performance.
We estimate FFO per share for 2019 of $3.26 to $3.31. FFO
per share for 2019 is based on a net income per share range of
$1.33 to $1.38, plus estimated real estate depreciation
and impairments of $1.99 per share,
and reduced by potential estimated gains on sales of investment
properties of $0.06 per share (in
accordance with NAREIT's definition of FFO).
Additional earnings guidance detail can be found in Realty
Income's supplemental materials available on Realty Income's
corporate website at
www.realtyincome.com/investors/financial-information/quarterly-results.
Conference Call Information
In conjunction with the release of Realty Income's operating
results, the company will host a conference call on August 6, 2019 at 11:30
a.m. PT to discuss the results. To access the conference,
dial (800) 353-6461. When prompted, provide the conference ID
8531559.
A telephone replay of the conference call can also be accessed
by calling (888) 203-1112 and entering the passcode 8531559. The
telephone replay will be available through August 20, 2019. A live webcast will be available
in listen-only mode by clicking on the webcast link on the
company's home page or in the investors section at
www.realtyincome.com.
A replay of the conference call webcast will be available
approximately two hours after the conclusion of the live broadcast.
The webcast replay will be available through August 20, 2019. No access code is required for
this replay.
Supplemental Materials
Supplemental materials on second quarter and year-to-date 2019
operating results are available on Realty Income's corporate
website at
www.realtyincome.com/investors/financial-information/quarterly-results.
About Realty Income
Realty Income, The Monthly Dividend Company®, is an
S&P 500 company dedicated to providing stockholders with
dependable monthly income. The company is structured as a REIT, and
its monthly dividends are supported by the cash flow from over
5,900 real estate properties owned under long-term lease agreements
with commercial tenants. To date, the company has declared 589
consecutive common stock monthly dividends throughout its 50-year
operating history and increased the dividend 102 times since Realty
Income's public listing in 1994 (NYSE: O). Additional information
about the company can be obtained from the corporate website at
www.realtyincome.com.
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 and foreign 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, changes in foreign currency exchange
rates, 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.
|
CONSOLIDATED
STATEMENTS OF INCOME
(dollars in
thousands, except per share amounts) (unaudited)
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Six Months
|
|
Six Months
|
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
Rental (including
reimbursable)
|
|
$
|
364,252
|
|
|
$
|
325,265
|
|
|
$
|
718,289
|
|
|
$
|
643,113
|
|
|
Other
|
|
1,198
|
|
|
3,621
|
|
|
1,526
|
|
|
4,068
|
|
|
Total
revenue
|
|
365,450
|
|
|
328,886
|
|
|
719,815
|
|
|
647,181
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
150,426
|
|
|
133,999
|
|
|
287,943
|
|
|
265,102
|
|
|
Interest
|
|
72,488
|
|
|
66,628
|
|
|
142,508
|
|
|
126,043
|
|
|
General and
administrative
|
|
18,585
|
|
|
17,954
|
|
|
33,693
|
|
|
33,638
|
|
|
Property (including
reimbursable)
|
|
21,342
|
|
|
16,236
|
|
|
42,978
|
|
|
32,788
|
|
|
Income
taxes
|
|
1,155
|
|
|
1,208
|
|
|
2,600
|
|
|
2,431
|
|
|
Provisions for
impairment
|
|
13,061
|
|
|
3,951
|
|
|
17,733
|
|
|
18,172
|
|
|
Total
expenses
|
|
277,057
|
|
|
239,976
|
|
|
527,455
|
|
|
478,174
|
|
|
Gain on sales of real
estate
|
|
6,891
|
|
|
7,787
|
|
|
14,154
|
|
|
11,005
|
|
|
Foreign currency and
derivative gains, net
|
|
136
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
Net income
|
|
95,420
|
|
|
96,697
|
|
|
206,650
|
|
|
180,012
|
|
|
Net income
attributable to noncontrolling interests
|
|
(226)
|
|
|
(317)
|
|
|
(514)
|
|
|
(469)
|
|
|
Net income available
to common stockholders
|
|
$
|
95,194
|
|
|
$
|
96,380
|
|
|
$
|
206,136
|
|
|
$
|
179,543
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
available to common stockholders (FFO)
|
|
$
|
251,489
|
|
|
$
|
226,082
|
|
|
$
|
497,164
|
|
|
$
|
450,964
|
|
|
Adjusted funds from
operations available to common stockholders (AFFO)
|
|
$
|
253,935
|
|
|
$
|
226,988
|
|
|
$
|
502,669
|
|
|
$
|
451,549
|
|
|
|
|
|
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
|
|
|
|
|
Net income, basic and
diluted
|
|
$
|
0.31
|
|
|
$
|
0.34
|
|
|
$
|
0.67
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
FFO:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.62
|
|
|
$
|
1.59
|
|
|
Diluted
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.62
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
AFFO:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
1.64
|
|
|
$
|
1.59
|
|
|
Diluted
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
1.63
|
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
|
0.678
|
|
|
$
|
0.659
|
|
|
$
|
1.350
|
|
|
$
|
1.309
|
|
|
FUNDS FROM
OPERATIONS (FFO)
(dollars in
thousands, except per share amounts)
|
|
|
We define FFO, a
non-GAAP measure, consistent with NAREIT'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 real estate sales.
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Six Months
|
|
Six Months
|
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
95,194
|
|
|
$
|
96,380
|
|
|
$
|
206,136
|
|
|
$
|
179,543
|
|
|
Depreciation and
amortization
|
|
150,426
|
|
|
133,999
|
|
|
287,943
|
|
|
265,102
|
|
|
Depreciation of
furniture, fixtures and equipment
|
|
(147)
|
|
|
(168)
|
|
|
(302)
|
|
|
(327)
|
|
|
Provisions for
impairment
|
|
13,061
|
|
|
3,951
|
|
|
17,733
|
|
|
18,172
|
|
|
Gain on sales of real
estate
|
|
(6,891)
|
|
|
(7,787)
|
|
|
(14,154)
|
|
|
(11,005)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(154)
|
|
|
(293)
|
|
|
(192)
|
|
|
(521)
|
|
|
FFO available to
common stockholders
|
|
$
|
251,489
|
|
|
$
|
226,082
|
|
|
$
|
497,164
|
|
|
$
|
450,964
|
|
|
FFO allocable to
dilutive noncontrolling interests
|
|
362
|
|
|
232
|
|
|
670
|
|
|
450
|
|
|
Diluted
FFO
|
|
$
|
251,851
|
|
|
$
|
226,314
|
|
|
$
|
497,834
|
|
|
$
|
451,414
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.62
|
|
|
$
|
1.59
|
|
|
Diluted
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.62
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
208,864
|
|
|
$
|
187,488
|
|
|
$
|
413,410
|
|
|
$
|
373,044
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
|
42,625
|
|
|
$
|
38,594
|
|
|
$
|
83,754
|
|
|
$
|
77,920
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for FFO:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
311,032,972
|
|
|
284,928,969
|
|
|
307,293,949
|
|
|
284,469,689
|
|
|
Diluted
|
|
311,785,281
|
|
|
285,372,256
|
|
|
308,000,806
|
|
|
284,924,336
|
|
|
ADJUSTED FUNDS
FROM OPERATIONS (AFFO)
(dollars in
thousands, except per share amounts)
|
|
|
We define AFFO as FFO
adjusted for unique revenue and expense items, which the company
believes are not as pertinent to the measurement of the company's
ongoing operating performance. 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
|
|
Six Months
|
|
Six Months
|
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
Ended
6/30/19
|
|
Ended
6/30/18
|
|
Net income available
to common stockholders
|
|
$
|
95,194
|
|
|
$
|
96,380
|
|
|
$
|
206,136
|
|
|
$
|
179,543
|
|
|
Cumulative
adjustments to calculate FFO (1)
|
|
156,295
|
|
|
129,702
|
|
|
291,028
|
|
|
271,421
|
|
|
FFO available to
common stockholders
|
|
251,489
|
|
|
226,082
|
|
|
497,164
|
|
|
450,964
|
|
|
Amortization of
share-based compensation
|
|
4,527
|
|
|
4,995
|
|
|
7,291
|
|
|
8,657
|
|
|
Amortization of
deferred financing costs (2)
|
|
1,133
|
|
|
1,014
|
|
|
2,173
|
|
|
1,858
|
|
|
Amortization of net
mortgage premiums
|
|
(354)
|
|
|
(354)
|
|
|
(708)
|
|
|
(813)
|
|
|
Loss (gain) on
interest rate swaps
|
|
686
|
|
|
(792)
|
|
|
1,364
|
|
|
(2,799)
|
|
|
Straight-line
payments from cross-currency swaps (3)
|
|
799
|
|
|
—
|
|
|
799
|
|
|
—
|
|
|
Leasing costs and
commissions
|
|
(707)
|
|
|
(1,536)
|
|
|
(1,030)
|
|
|
(2,452)
|
|
|
Recurring capital
expenditures
|
|
(116)
|
|
|
(135)
|
|
|
(172)
|
|
|
(147)
|
|
|
Straight-line
rent
|
|
(7,230)
|
|
|
(6,267)
|
|
|
(12,092)
|
|
|
(11,632)
|
|
|
Amortization of above
and below-market leases
|
|
3,627
|
|
|
3,907
|
|
|
7,741
|
|
|
7,771
|
|
|
Other adjustments
(4)
|
|
81
|
|
|
74
|
|
|
139
|
|
|
142
|
|
|
AFFO available to
common stockholders
|
|
$
|
253,935
|
|
|
$
|
226,988
|
|
|
$
|
502,669
|
|
|
$
|
451,549
|
|
|
AFFO allocable to
dilutive noncontrolling interests
|
|
368
|
|
|
236
|
|
|
—
|
|
|
465
|
|
|
Diluted
AFFO
|
|
$
|
254,303
|
|
|
$
|
227,224
|
|
|
$
|
502,669
|
|
|
$
|
452,014
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
1.64
|
|
|
$
|
1.59
|
|
|
Diluted
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
1.63
|
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
208,864
|
|
|
$
|
187,488
|
|
|
$
|
413,410
|
|
|
$
|
373,044
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
|
45,071
|
|
|
$
|
39,500
|
|
|
$
|
89,259
|
|
|
$
|
78,505
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for AFFO:
|
|
|
|
|
|
|
|
Basic
|
|
311,032,972
|
|
|
284,928,969
|
|
|
307,293,949
|
|
|
284,469,689
|
|
|
Diluted
|
|
311,785,281
|
|
|
285,372,256
|
|
|
307,580,127
|
|
|
284,924,336
|
|
|
|
|
(1)
|
See FFO calculation
on page seven for reconciling items.
|
|
(2)
|
Includes the
amortization of costs incurred and capitalized upon issuance of our
notes payable, assumption of our mortgages payable and issuance of
our term loans. The deferred financing costs are being amortized
over the lives of the respective notes payable, mortgages and term
loans. No costs associated with our credit facility agreements
or annual fees paid to credit rating agencies have been
included.
|
|
(3)
|
Straight-line
payments from cross-currency swaps represent quarterly payments in
U.S. dollars received by us from counterparties in exchange for
associated foreign currency payments. These USD payments are fixed
and determinable for the duration of the associated hedging
transaction.
|
|
(4)
|
Includes adjustments
allocable to noncontrolling interests, obligations related to
financing lease liabilities, and foreign currency gains and losses
as a result of intercompany debt and remeasurement
transactions.
|
|
HISTORICAL FFO AND
AFFO
(dollars in
thousands, except per share amounts)
|
|
|
|
For the three months
ended June 30,
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
95,194
|
|
|
$
|
96,380
|
|
|
$
|
81,136
|
|
|
$
|
69,045
|
|
|
$
|
59,317
|
|
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
150,279
|
|
|
133,831
|
|
|
122,939
|
|
|
110,147
|
|
|
100,861
|
|
|
Provisions for
impairment
|
|
13,061
|
|
|
3,951
|
|
|
2,274
|
|
|
6,269
|
|
|
3,230
|
|
|
Gain on sales of real
estate
|
|
(6,891)
|
|
|
(7,787)
|
|
|
(2,839)
|
|
|
(8,658)
|
|
|
(3,675)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(154)
|
|
|
(293)
|
|
|
(238)
|
|
|
(155)
|
|
|
(263)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
251,489
|
|
|
$
|
226,082
|
|
|
$
|
203,272
|
|
|
$
|
176,648
|
|
|
$
|
159,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
0.75
|
|
|
$
|
0.70
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
|
$
|
253,935
|
|
|
$
|
226,988
|
|
|
$
|
208,388
|
|
|
$
|
180,876
|
|
|
$
|
159,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
0.76
|
|
|
$
|
0.71
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.678
|
|
|
$
|
0.659
|
|
|
$
|
0.633
|
|
|
$
|
0.597
|
|
|
$
|
0.569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
311,785,281
|
|
|
285,372,256
|
|
|
273,187,669
|
|
|
254,254,243
|
|
|
232,886,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
|
311,785,281
|
|
|
285,372,256
|
|
|
273,187,669
|
|
|
253,937,221
|
|
|
232,886,185
|
|
|
|
For the six months
ended June 30,
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
206,136
|
|
|
$
|
179,543
|
|
|
$
|
152,722
|
|
|
$
|
132,518
|
|
|
$
|
119,810
|
|
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
287,641
|
|
|
264,775
|
|
|
243,879
|
|
|
217,887
|
|
|
198,713
|
|
|
Provisions for
impairment
|
|
17,733
|
|
|
18,172
|
|
|
7,706
|
|
|
8,192
|
|
|
5,317
|
|
|
Gain on sales of real
estate
|
|
(14,154)
|
|
|
(11,005)
|
|
|
(13,371)
|
|
|
(10,948)
|
|
|
(10,893)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(192)
|
|
|
(521)
|
|
|
(453)
|
|
|
(373)
|
|
|
(577)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
497,164
|
|
|
$
|
450,964
|
|
|
$
|
390,483
|
|
|
$
|
347,276
|
|
|
$
|
312,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
1.62
|
|
|
$
|
1.58
|
|
|
$
|
1.46
|
|
|
$
|
1.38
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
|
$
|
502,669
|
|
|
$
|
451,549
|
|
|
$
|
409,723
|
|
|
$
|
356,793
|
|
|
$
|
311,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
|
1.63
|
|
|
$
|
1.59
|
|
|
$
|
1.53
|
|
|
$
|
1.42
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
1.350
|
|
|
$
|
1.309
|
|
|
$
|
1.257
|
|
|
$
|
1.185
|
|
|
$
|
1.130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
308,000,806
|
|
|
284,924,336
|
|
|
268,569,855
|
|
|
252,073,685
|
|
|
229,061,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
|
307,580,127
|
|
|
284,924,336
|
|
|
268,658,037
|
|
|
252,378,957
|
|
|
229,061,762
|
|
|
REALTY INCOME
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(dollars in
thousands, except per share data)
|
|
|
|
June 30,
2019
|
|
|
December 31,
2018
|
|
|
ASSETS
|
|
(unaudited)
|
|
|
|
|
|
Real estate, at
cost:
|
|
|
|
|
|
Land
|
|
$
|
5,058,572
|
|
|
$
|
4,682,660
|
|
|
Buildings and
improvements
|
|
12,774,967
|
|
|
11,858,806
|
|
|
Total real estate, at
cost
|
|
17,833,539
|
|
|
16,541,466
|
|
|
Less accumulated
depreciation and amortization
|
|
(2,911,779)
|
|
|
(2,714,534)
|
|
|
Net real estate held
for investment
|
|
14,921,760
|
|
|
13,826,932
|
|
|
Real estate held for
sale, net
|
|
18,506
|
|
|
16,585
|
|
|
Net real
estate
|
|
14,940,266
|
|
|
13,843,517
|
|
|
Cash and cash
equivalents
|
|
27,136
|
|
|
10,387
|
|
|
Accounts
receivable
|
|
165,470
|
|
|
144,991
|
|
|
Lease intangible
assets, net
|
|
1,308,564
|
|
|
1,199,597
|
|
|
Goodwill
|
|
14,536
|
|
|
14,630
|
|
|
Other assets,
net
|
|
292,658
|
|
|
47,361
|
|
|
Total
assets
|
|
$
|
16,748,630
|
|
|
$
|
15,260,483
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Distributions
payable
|
|
$
|
72,752
|
|
|
$
|
67,789
|
|
|
Accounts payable and
accrued expenses
|
|
156,859
|
|
|
133,765
|
|
|
Lease intangible
liabilities, net
|
|
330,893
|
|
|
310,866
|
|
|
Other
liabilities
|
|
251,244
|
|
|
127,109
|
|
|
Line of credit
payable
|
|
8,000
|
|
|
252,000
|
|
|
Term loans,
net
|
|
498,829
|
|
|
568,610
|
|
|
Mortgages payable,
net
|
|
299,397
|
|
|
302,569
|
|
|
Notes payable,
net
|
|
6,268,062
|
|
|
5,376,797
|
|
|
Total
liabilities
|
|
7,886,036
|
|
|
7,139,505
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common stock and paid
in capital, par value $0.01 per share, 740,200,000 shares
authorized, 318,218,713 shares issued and outstanding as of June
30, 2019 and 370,100,000 shares authorized, 303,742,090 shares
issued and outstanding as of December 31, 2018
|
|
11,722,036
|
|
|
10,754,495
|
|
|
Distributions in
excess of net income
|
|
(2,869,937)
|
|
|
(2,657,655)
|
|
|
Accumulated other
comprehensive loss
|
|
(14,597)
|
|
|
(8,098)
|
|
|
Total stockholders'
equity
|
|
8,837,502
|
|
|
8,088,742
|
|
|
Noncontrolling
interests
|
|
25,092
|
|
|
32,236
|
|
|
Total
equity
|
|
8,862,594
|
|
|
8,120,978
|
|
|
Total liabilities and
equity
|
|
$
|
16,748,630
|
|
|
$
|
15,260,483
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/18 to
12/31/1994
|
10.5%
|
|
10.8%
|
|
7.7%
|
|
0.0%
|
|
2.9%
|
|
(1.6%)
|
|
2.9%
|
|
(1.2%)
|
|
0.5%
|
|
(1.7%)
|
|
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%
|
|
2014
|
4.6%
|
|
33.7%
|
|
3.6%
|
|
28.0%
|
|
2.3%
|
|
10.0%
|
|
2.0%
|
|
13.7%
|
|
1.3%
|
|
13.4%
|
|
2015
|
4.4%
|
|
13.0%
|
|
3.9%
|
|
2.8%
|
|
2.6%
|
|
0.2%
|
|
2.2%
|
|
1.4%
|
|
1.4%
|
|
5.7%
|
|
2016
|
4.2%
|
|
16.0%
|
|
4.0%
|
|
8.6%
|
|
2.5%
|
|
16.5%
|
|
2.1%
|
|
12.0%
|
|
1.4%
|
|
7.5%
|
|
2017
|
4.5%
|
|
3.6%
|
|
3.9%
|
|
8.7%
|
|
2.2%
|
|
28.1%
|
|
1.9%
|
|
21.8%
|
|
1.1%
|
|
28.2%
|
|
2018
|
4.2%
|
|
15.2%
|
|
4.4%
|
|
(4.0%)
|
|
2.5%
|
|
(3.5%)
|
|
2.2%
|
|
(4.4%)
|
|
1.4%
|
|
(3.9%)
|
|
YTD 2019
|
3.9%
|
|
11.5%
|
|
3.8%
|
|
19.3%
|
|
2.2%
|
|
15.4%
|
|
1.9%
|
|
18.5%
|
|
1.0%
|
|
20.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound Average
Annual Total Return (5)
|
|
16.4%
|
|
|
|
10.7%
|
|
|
|
10.6%
|
|
|
|
9.8%
|
|
|
|
10.0%
|
|
|
Note: The
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.
|
|
(2)
|
Calculated as the
difference between the closing stock price as of period 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 for the
annual percentages.
|
|
(3)
|
Includes reinvestment
of dividends. Source: NAREIT website and
Factset.
|
|
(4)
|
Price only index,
does not include dividends as NASDAQ did not report total return
metrics for the entirety of the measurement period. Source:
Factset.
|
|
(5)
|
The Compound Average
Annual Total Return rates are calculated in the same manner for
each period from Realty Income's NYSE listing on October 18,
1994 through June 30, 2019, and (except for NASDAQ) assume
reinvestment 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.
|
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SOURCE Realty Income Corporation