SAN
DIEGO, May 6, 2024 /PRNewswire/ -- Realty Income
Corporation (Realty Income, NYSE: O), The Monthly Dividend
Company®, today announced operating results for the
three months ended March 31, 2024.
All per share amounts presented in this press release are on a
diluted per common share basis unless stated otherwise.
"I am pleased with our first quarter results, as we continue to
strengthen our role as real estate partner to the world's leading
companies," said Sumit Roy, Realty
Income's President and Chief Executive Officer. "We remain a highly
selective capital allocator based on available product that meets
our stringent long-term, risk-adjusted return hurdles. During the
quarter, we completed $598 million of investment volume at an
initial weighted average cash yield of 7.8%. Approximately 54%
of total investment volume was in the U.K. and Europe at an initial weighted average cash
yield of 8.2%. International growth continues to be a
differentiating avenue for Realty Income to generate accretive
earnings growth as our unique platform allows us to partner with
best-in-class clients in a highly fragmented net lease market."
COMPANY HIGHLIGHTS:
For the three months ended March 31,
2024:
- Net income available to common stockholders was $129.7 million, or $0.16 per share
- AFFO available to common stockholders was $862.9 million, or $1.03 per share
- On January 23, 2024, closed on
our previously announced stock-for-stock merger with Spirit Realty
Capital, Inc. ("Spirit")
- Excluding our merger with Spirit, we invested $598.0 million at an initial weighted average
cash yield of 7.8%
- Raised $550.1 million from the
sale of common stock, primarily through our At-The-Market (ATM)
program, at a weighted average price of $56.93
- Net Debt and Preferred Stock to Annualized Pro Forma Adjusted
EBITDAre was 5.5x
- Issued $450.0 million of 4.750%
senior unsecured notes due February
2029 and $800.0 million of
5.125% senior unsecured notes due February
2034, for which proceeds were used to repay $1.1 billion of senior unsecured notes and
mortgages upon maturity
Event subsequent to March 31,
2024:
- In April 2024, a $33.0 million secured loan to an operator
of Emagine Theaters, assumed in the Spirit merger, was repaid
in full
CEO Comments
"Given the health of our balance sheet and ample liquidity,
which was further bolstered by a well-timed $1.25 billion bond offering in January, we
continue to emphasize that our unchanged $2.0 billion investments guidance for the year
requires no new external capital. Following closing of the Spirit
merger, our annualized adjusted free cash flow(1) of
approximately $825 million is a
competitive advantage that increasingly positions us to self-fund
our external growth."
"Underpinning the health of our balance sheet is continued
stability in our high-quality portfolio. In the first quarter,
occupancy remains stable at 98.6%, we delivered a rent recapture
rate of 104.3% on properties re-leased, and we generated same store
rental revenue growth of 0.8%. We believe our diversified portfolio
of investments generates consistent recurring cash flow to support
dependable monthly dividends that grow over time. In March, we
announced our 124th common stock monthly dividend
increase since Realty Income's listing on the NYSE in 1994.
Dependable total operational returns with limited downside earnings
volatility continues to be core to our investment proposition for
our shareholders."
(1)
|
Annualized Adjusted
Free Cash Flow is a non-GAAP financial measure. Please see the
Glossary for our definition and an explanation of how we utilize
this measure.
|
Select Financial Results
The following summarizes our select financial results (dollars
in millions, except per share data).
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
Total
revenue
|
|
$
1,260.5
|
|
$
944.4
|
Net income available to
common stockholders (1) (2)
|
|
$
129.7
|
|
$
225.0
|
Net income per
share
|
|
$
0.16
|
|
$
0.34
|
Funds from operations
available to common stockholders (FFO) (3)
|
|
$
785.7
|
|
$
684.3
|
FFO per
share
|
|
$
0.94
|
|
$
1.03
|
Normalized funds from
operations available to common stockholders (Normalized FFO)
(3)
|
|
$
879.8
|
|
$
685.6
|
Normalized FFO per
share
|
|
$
1.05
|
|
$
1.04
|
Adjusted funds from
operations available to common stockholders (AFFO)
(3)
|
|
$
862.9
|
|
$
650.7
|
AFFO per
share
|
|
$
1.03
|
|
$
0.98
|
|
|
(1)
|
The calculation to
determine net income attributable to common stockholders includes
provisions for impairment, gain on sales of real estate, and
foreign currency gain and loss. These items can vary from quarter
to quarter and can significantly impact net income available to
common stockholders and period to period comparisons.
|
(2)
|
Our financial results
during the three months ended March 31, 2024 were primarily
impacted by the following transactions: (i) $94.1 million of
merger and integration-related costs related to our merger with
Spirit, and (ii) $89.5 million provisions of impairment, primarily
on two office properties which were acquired and retained in our
merger with VEREIT, Inc. ("VEREIT") in 2021.
|
(3)
|
FFO, Normalized FFO,
and AFFO are non-GAAP financial measures. Normalized FFO is based
on FFO and adjusted to exclude merger and integration-related costs
and AFFO further adjusts Normalized FFO for unique revenue and
expense items. Please see the Glossary for our definitions and
explanations of how we utilize these metrics. Please see pages 9
and 10 herein for reconciliations to the most directly comparable
GAAP measure.
|
Dividend Increases
In March 2024, we announced the
106th consecutive quarterly dividend increase,
which is the 124th increase in the amount of the
dividend since our listing on the New York Stock Exchange (NYSE) in
1994. The annualized dividend amount as of March 31, 2024 was $3.084 per share. The amount of monthly dividends
paid per share increased 2.4% to $0.770 during the three months ended March 31, 2024, as compared to $0.752 with the same period in 2023, representing
74.8% of our diluted AFFO per share of $1.03 during the three months ended March 31, 2024.
Real Estate Portfolio Update
As of March 31, 2024, we owned or
held interests in 15,485 properties, which were leased to 1,552
clients doing business in 89 industries. Our diversified
portfolio of commercial properties under long-term, net lease
agreements is actively managed with a weighted average remaining
lease term of approximately 9.8 years. Our portfolio of
commercial real estate has historically provided dependable rental
revenue supporting the payment of monthly dividends. As of
March 31, 2024, portfolio occupancy
was 98.6% with 217 properties available for lease or sale, as
compared to 98.6% as of December 31,
2023 and 99.0% as of March 31,
2023. Our property-level occupancy rates exclude properties
with ancillary leases only, such as cell towers and billboards, and
properties with possession pending and include properties owned by
unconsolidated joint ventures. Below is a summary of our portfolio
activity for the period indicated below:
Changes in Occupancy
Three months ended
March 31, 2024
|
|
Properties available
for lease at December 31, 2023
|
193
|
Lease expirations
(1) (2)
|
245
|
Re-leases to same
client
|
(166)
|
Re-leases to new
client
|
(12)
|
Vacant
dispositions
|
(43)
|
Properties available
for lease at March 31, 2024
|
217
|
|
|
(1)
|
Includes scheduled and
unscheduled expirations (including leases rejected in bankruptcy),
as well as future expirations resolved in the periods indicated
above.
|
(2)
|
Includes 26 properties acquired through the
merger with Spirit in January 2024.
|
During the three months ended March 31,
2024, the new annualized contractual rent on re-leases was
$59.37 million, as compared to the
previous annual rent of $56.91
million on the same units, representing a rent recapture
rate of 104.3% on the units re-leased. We re-leased nine units to
new clients without a period of vacancy, and seven units to new
clients after a period of vacancy. Please see the Glossary for our
definition of annualized contractual income.
Investment Summary
The following table summarizes our acquisitions in the U.S. and
Europe for the period indicated
below:
|
Number
of
Properties
|
|
Investment
($ in
millions)
|
|
Leasable
Square
Feet
(in
thousands)
|
|
Initial Weighted
Average
Cash
Yield (1)
|
|
Weighted
Average
Term
(Years)
|
Three months ended
March 31, 2024
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
real estate
|
5
|
|
$
16.0
|
|
194
|
|
7.1 %
|
|
8.9
|
Acquisitions -
Europe real estate
|
8
|
|
302.6
|
|
1,064
|
|
8.2 %
|
|
6.2
|
Total real estate
acquisitions
|
13
|
|
$
318.6
|
|
1,258
|
|
8.2 %
|
|
6.3
|
Real estate properties
under development (2) (3)
|
142
|
|
279.4
|
|
5,776
|
|
7.3 %
|
|
15.1
|
Total investments
(4)
|
155
|
|
$
598.0
|
|
7,034
|
|
7.8 %
|
|
10.2
|
|
|
(1)
|
Initial weighted
average cash yield is a supplemental operating measure. Cash income
used in the calculation of initial weighted average cash yield for
investments includes $0.5 million received as settlement
credits as reimbursement of free rent periods. Please see the
Glossary for our definitions of Initial Weighted Average Cash Yield
and Cash Income.
|
(2)
|
Includes
£8.7 million of investments relating to United Kingdom
("U.K.") development properties and €8.4 million of investments
relating to Spain development properties, converted at the
applicable exchange rates on the funding dates.
|
(3)
|
Includes
$38.1 million of investments in an unconsolidated U.S. data
center joint venture.
|
(4)
|
Clients we have
invested in are 84.5% retail, 9.7% industrial, and 5.8% other based
on cash income. Approximately 44% of the annualized cash income
generated from acquisitions is from investment grade rated clients,
their subsidiaries or affiliated companies. Please see the Glossary
for our definition of Investment Grade Clients and Cash
Income.
|
Same Store Rental Revenue
The following summarizes our same store rental revenue for
11,716 properties under lease (dollars in millions):
|
Three months ended
March 31,
|
|
|
|
2024
|
|
2023
|
|
%
Increase
|
Same store rental
revenue
|
$843.5
|
|
$837.1
|
|
0.8 %
|
For purposes of comparability, same store rental revenue is
presented on a constant currency basis using the applicable
exchange rate as of March 31, 2024.
None of the properties in France,
Germany, Ireland or Portugal met our same store pool definition
for the periods presented. In addition, the same store pool
excludes properties assumed on January 23,
2024 as a result of our merger with Spirit. Please see the
Glossary to see definitions of our Same Store Pool and Same Store
Rental Revenue.
Liquidity and Capital Markets
Capital Raising
During the three months ended
March 31, 2024, we raised
$550.1 million of proceeds from the
sale of common stock at a weighted average price of $56.93 per share, primarily through the
settlement of approximately 9.6 million shares of common stock
sales previously executed pursuant to forward sale agreements
through our ATM program. As of March 31,
2024, there were approximately 1.2 million shares of
unsettled common stock subject to forward sale agreements through
our ATM program, representing approximately $62.9 million in expected net proceeds and a
weighted average initial gross price of $54.00 per share. ATM net sale proceed amounts
assume full physical settlement of all outstanding shares of common
stock, subject to such forward sale agreements and certain
assumptions made with respect to settlement dates.
In January 2024, we issued
$450.0 million of 4.750% senior
unsecured notes due February 2029
(the "2029 Notes"), and $800.0 million of 5.125% senior unsecured
notes due February 2034 (the "2034
Notes"). Combined, the Notes have a weighted average tenor of
approximately 8.3 years, a weighted average semi-annual yield to
maturity of 5.142%, and weighted average coupon rate of 4.990%.
Liquidity
As of March
31, 2024, we had $4.0 billion
of liquidity, which consists of cash and cash equivalents of
$680.2 million, unsettled ATM forward
equity of $62.9 million, and
$3.2 billion of availability under
our $4.25 billion unsecured revolving
credit facility, net of $806.5 million of borrowing on the revolving
credit facility and after deducting $216.0
million in borrowings under our commercial paper programs.
We use our unsecured revolving credit facility as a liquidity
backstop for the repayment of the notes issued under these
programs.
Earnings Guidance
Summarized below are approximate estimates of the key components
of our 2024 earnings guidance.
|
|
Prior 2024 Guidance
(1)
|
|
Revised 2024
Guidance
|
Net income per share
(2)
|
|
$1.22 -
$1.34
|
|
$1.23 -
$1.35
|
Real estate
depreciation and impairments per share (3)
|
|
$2.82
|
|
$2.84
|
Other adjustments per
share (3)
|
|
$0.13
|
|
$0.10
|
Normalized FFO per
share (2)(4)
|
|
$4.17 -
$4.29
|
|
$4.17 -
$4.29
|
AFFO per share
(4)
|
|
$4.13 -
$4.21
|
|
$4.13 -
$4.21
|
Same store rent growth
(5)
|
|
Approx 1.0%
|
|
Approx 1.0%
|
Occupancy
|
|
Over 98%
|
|
Over 98%
|
Cash G&A expenses
(% of revenues) (6)(7)
|
|
Approx 3.0%
|
|
Approx 3.0%
|
Property expenses
(non-reimbursable) (% of revenues) (6)
|
|
1.0% - 1.5%
|
|
1.0% - 1.5%
|
Income tax
expenses
|
|
$65 to $75
million
|
|
$65 to $75
million
|
Acquisition volume
(8)
|
|
Approx $2.0
billion
|
|
Approx $2.0
billion
|
|
|
|
|
|
(1) As issued on February 21, 2024.
|
(2)
Net income per share and Normalized
FFO per share include non-cash interest expense impact related to
the Spirit merger.
|
(3) Includes gain on sales of properties and merger and
integration-related costs.
|
(4)
Normalized FFO per share and AFFO per
share exclude merger and integration-related costs associated with
our merger with Spirit. Per share amounts may not add due to
rounding.
|
(5)
Reserve reversals recognized in 2023
represent an approximately 30 basis point headwind to same store
rent growth in 2024.
|
(6)
Revenue excludes contractually obligated
reimbursements by our clients. Cash G&A expenses exclude
stock-based compensation expense.
|
(7)
G&A expenses inclusive of stock-based
compensation expense as a percentage of rental revenue, excluding
reimbursements, is expected to be approximately 3.4% - 3.7% in
2024.
|
(8)
Acquisition volume excludes merger with
Spirit, which closed January 23, 2024.
|
Conference Call Information
In conjunction with the release of our operating results, we
will host a conference call on May 7, 2024 at 11:00 a.m. PDT to discuss the results. To access
the conference call, dial (833) 816-1264 (United States) or (412) 317-5632
(International). When prompted, please ask for the Realty Income
conference call.
A telephone replay of the conference call can also be accessed
by calling (877) 344-7529 and entering the conference ID
4176200. The telephone replay will be available through
May 14, 2024.
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 one hour after the
conclusion of the live broadcast. No access code is required for
this replay.
Supplemental Materials and Sustainability Report
Supplemental Operating and Financial Data for the three months
ended March 31, 2024 is available on
our corporate website at
www.realtyincome.com/investors/quarterly-and-annual-results.
The Sustainability Report for the year ended December 31, 2022 is available on our
corporate website at
esg.realtyincome.com/indicators/sustainability_report. Our Green
Financing Framework is also available on our corporate website at
esg.realtyincome.com/indicators/green_financing.
About Realty Income
Realty Income (NYSE: O), an S&P 500 company, is real estate
partner to the world's leading companies. Founded in 1969, we
invest in diversified commercial real estate and have a portfolio
of over 15,450 properties in all 50 U.S. states, the U.K., and six
other countries in Europe. We are
known as "The Monthly Dividend Company®," and have a
mission to deliver stockholders dependable monthly dividends that
grow over time. Since our founding, we have declared 646
consecutive monthly dividends and are a member of the S&P 500
Dividend Aristocrats® index for having increased our
dividend for the last 25 consecutive years. Additional information
about the company can be found at www.realtyincome.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended. When used in
this press release, the words "estimated," "anticipated," "expect,"
"believe," "intend," "continue," "should," "may," "likely,"
"plans," and similar expressions are intended to identify
forward-looking statements. Forward-looking statements include
discussions of our business and portfolio; growth strategies and
intentions to acquire or dispose of properties (including timing,
partners, clients and terms); re-leases, re-development and
speculative development of properties and expenditures related
thereto; future operations and results; the announcement of
operating results, strategy, plans, and the intentions of
management; guidance; settlement of shares of common stock sold
pursuant to forward sale confirmations under our ATM program;
dividends; and trends in our business, including trends in the
market for long-term leases of freestanding, single-client
properties. Forward-looking statements are subject to risks,
uncertainties, and assumptions about us, which may cause our actual
future results to differ materially from expected results. Some of
the factors that could cause actual results to differ materially
are, among others, our continued qualification as a real estate
investment trust; general domestic and foreign business, economic,
or financial conditions; competition; fluctuating interest and
currency rates; inflation and its impact on our clients and us;
access to debt and equity capital markets and other sources of
funding (including the terms and partners of such funding);
continued volatility and uncertainty in the credit markets and
broader financial markets; other risks inherent in the real estate
business including our clients' solvency, client defaults under
leases, increased client bankruptcies, potential liability relating
to environmental matters, illiquidity of real estate investments,
and potential damages from natural disasters; impairments in the
value of our real estate assets; changes in domestic and foreign
income tax laws and rates; property ownership through joint
ventures, partnerships and other arrangements which may limit
control of the underlying investments; epidemics or pandemics
including measures taken to limit their spread, the impacts on us,
our business, our clients, and the economy generally; the loss of
key personnel; the outcome of any legal proceedings to which we are
a party or which may occur in the future; acts of terrorism and
war; the anticipated benefits from mergers and acquisitions
including from the merger with Spirit; and those additional risks
and factors discussed in our reports filed with the U.S. Securities
and Exchange Commission. Readers are cautioned not to place undue
reliance on forward-looking statements. Forward-looking statements
are not guarantees of future plans and performance and speak only
as of the date of this press release. Actual plans and operating
results may differ materially from what is expressed or forecasted
in this press release. We do not undertake any obligation to update
forward-looking statements or publicly release the results of any
forward-looking statements that may be made to reflect events or
circumstances after the date these statements were made.
CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
REVENUE
|
|
|
|
|
Rental (including
reimbursable) (1)
|
|
$
1,208,169
|
|
$
925,289
|
Other
|
|
52,316
|
|
19,110
|
Total
revenue
|
|
1,260,485
|
|
944,399
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
Depreciation and
amortization
|
|
581,064
|
|
451,477
|
Interest
|
|
240,614
|
|
154,132
|
Property (including
reimbursable)
|
|
89,361
|
|
69,397
|
General and
administrative
|
|
40,842
|
|
34,167
|
Provisions for
impairment
|
|
89,489
|
|
13,178
|
Merger and
integration-related costs
|
|
94,104
|
|
1,307
|
Total
expenses
|
|
1,135,474
|
|
723,658
|
Gain on sales of real
estate
|
|
16,574
|
|
4,279
|
Foreign currency and
derivative gain, net
|
|
4,046
|
|
10,322
|
Equity in (losses)
earnings of unconsolidated entities
|
|
(1,676)
|
|
—
|
Other income,
net
|
|
5,446
|
|
2,730
|
Income before income
taxes
|
|
149,401
|
|
238,072
|
Income
taxes
|
|
(15,502)
|
|
(11,950)
|
Net income
|
|
133,899
|
|
226,122
|
Net income attributable
to noncontrolling interests
|
|
(1,615)
|
|
(1,106)
|
Net income attributable
to the Company
|
|
132,284
|
|
225,016
|
Preferred stock
dividends
|
|
(2,588)
|
|
—
|
Net income available to
common stockholders
|
|
$
129,696
|
|
$
225,016
|
|
|
|
|
|
Funds from operations
available to common stockholders (FFO)
|
|
$
785,683
|
|
$
684,291
|
Normalized funds from
operations available to common stockholders (Normalized
FFO)
|
|
$
879,787
|
|
$
685,598
|
Adjusted funds from
operations available to common stockholders (AFFO)
|
|
$
862,871
|
|
$
650,728
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
Net income available to
common stockholders per common share, basic and diluted
|
|
$
0.16
|
|
$
0.34
|
|
|
|
|
|
FFO per common
share
|
|
|
|
|
Basic
|
|
$
0.94
|
|
$
1.04
|
Diluted
|
|
$
0.94
|
|
$
1.03
|
|
|
|
|
|
Normalized FFO per
common share, basic and diluted
|
|
$
1.05
|
|
$
1.04
|
|
|
|
|
|
AFFO per common
share
|
|
|
|
|
Basic
|
|
$
1.03
|
|
$
0.99
|
Diluted
|
|
$
1.03
|
|
$
0.98
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
0.7695
|
|
$
0.7515
|
|
|
(1)
|
Includes reserves to
rental revenue of $1.4 million for the three months ended March 31,
2024, and reserve reversals to rental revenue of $1.8 million for
the three months ended March 31, 2023. References to reserves
recorded as a reduction of rental revenue include amounts reserved
for in the current period, as well as unrecognized contractual
revenue and unrecognized straight-line rental revenue for leases
accounted for on a cash basis. References to reserve reversals
recorded as increases to rental revenue include amounts where the
accounting for recognition of rental revenue and straight-line
rental revenue has been moved from the cash to the accrual
basis.
|
FUNDS FROM
OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized
FFO)
(in thousands, except
per share amounts)
|
FFO and Normalized FFO
are non-GAAP financial measures. Please see the Glossary for our
definitions and explanations of how we utilize these
metrics.
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
129,696
|
|
$
225,016
|
Depreciation and
amortization
|
|
581,064
|
|
451,477
|
Depreciation of
furniture, fixtures and equipment
|
|
(623)
|
|
(542)
|
Provisions for
impairment of real estate
|
|
88,197
|
|
13,178
|
Gain on sales of real
estate
|
|
(16,574)
|
|
(4,279)
|
Proportionate share of
adjustments for unconsolidated entities
|
|
4,674
|
|
—
|
FFO adjustments
allocable to noncontrolling interests
|
|
(751)
|
|
(559)
|
FFO available to common
stockholders
|
|
$
785,683
|
|
$
684,291
|
FFO allocable to
dilutive noncontrolling interests
|
|
1,340
|
|
1,420
|
Diluted FFO
|
|
$
787,023
|
|
$
685,711
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
785,683
|
|
$
684,291
|
Merger and
integration-related costs
|
|
94,104
|
|
1,307
|
Normalized FFO
available to common stockholders
|
|
$
879,787
|
|
$
685,598
|
Normalized FFO
allocable to dilutive noncontrolling interests
|
|
1,340
|
|
1,420
|
Diluted Normalized
FFO
|
|
$
881,127
|
|
$
687,018
|
|
|
|
|
|
FFO per common
share
|
|
|
|
|
Basic
|
|
$
0.94
|
|
$
1.04
|
Diluted
|
|
$
0.94
|
|
$
1.03
|
|
|
|
|
|
Normalized FFO per
common share, basic and diluted
|
|
$
1.05
|
|
$
1.04
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
636,499
|
|
$
497,245
|
|
|
|
|
|
FFO available to common
stockholders in excess of distributions paid to common
stockholders
|
|
$
149,184
|
|
$
187,046
|
|
|
|
|
|
Normalized FFO
available to common stockholders in excess of distributions paid to
common stockholders
|
|
$
243,288
|
|
$
188,353
|
|
|
|
|
|
Weighted average number
of common shares used for FFO and Normalized FFO
|
|
|
|
|
Basic
|
|
834,940
|
|
660,462
|
Diluted
|
|
837,037
|
|
663,034
|
ADJUSTED FUNDS FROM
OPERATIONS (AFFO)
(in thousands, except
per share amounts)
|
AFFO is a non-GAAP
financial measure. Please see the Glossary for our definition and
an explanation of how we utilize this metric.
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
Net income available to
common stockholders
|
|
$
129,696
|
|
$
225,016
|
Cumulative adjustments
to calculate Normalized FFO (1)
|
|
750,091
|
|
460,582
|
Normalized FFO
available to common stockholders
|
|
879,787
|
|
685,598
|
Amortization of
share-based compensation
|
|
9,252
|
|
6,300
|
Amortization of net
debt discounts (premiums) and deferred financing costs
(2)
|
|
4,201
|
|
(13,688)
|
Non-cash gain on
interest rate swaps
|
|
(1,800)
|
|
(1,801)
|
Non-cash change in
allowance for credit losses
|
|
1,292
|
|
—
|
Straight-line impact of
cash settlement on interest rate swaps (3)
|
|
1,797
|
|
1,797
|
Leasing costs and
commissions
|
|
(927)
|
|
(444)
|
Recurring capital
expenditures
|
|
—
|
|
(53)
|
Straight-line rent and
expenses, net
|
|
(44,860)
|
|
(36,485)
|
Amortization of above
and below-market leases, net
|
|
14,274
|
|
17,358
|
Proportionate share of
adjustments for unconsolidated entities
|
|
920
|
|
—
|
Other adjustments
(4)
|
|
(1,065)
|
|
(7,854)
|
AFFO available to
common stockholders
|
|
$
862,871
|
|
$
650,728
|
AFFO allocable to
dilutive noncontrolling interests
|
|
1,359
|
|
1,431
|
Diluted AFFO
|
|
$
864,230
|
|
$
652,159
|
|
|
|
|
|
AFFO per common
share
|
|
|
|
|
Basic
|
|
$
1.03
|
|
$
0.99
|
Diluted
|
|
$
1.03
|
|
$
0.98
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
636,499
|
|
$
497,245
|
|
|
|
|
|
AFFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
226,372
|
|
$
153,483
|
|
|
|
|
|
Weighted average number
of common shares used for AFFO:
|
|
|
|
|
Basic
|
|
834,940
|
|
660,462
|
Diluted
|
|
837,037
|
|
663,034
|
|
|
(1)
|
See Normalized FFO
calculations on page 9 for reconciling items.
|
(2)
|
Includes the
amortization of net premiums and discounts on notes payable and
assumption of our mortgages payable, which are being amortized over
the life of the applicable debt, and costs incurred and capitalized
upon issuance and exchange of our notes payable, assumption of our
mortgages payable and issuance of our term loans, which are also
being amortized over the lives of the applicable debt. No costs
associated with our credit facility agreements or annual fees paid
to credit rating agencies have been included.
|
(3)
|
Represents the
straight-line amortization of $72.0 million gain realized upon the
termination of $500.0 million in notional interest rate swaps, over
the term of the $750.0 million of 5.625% senior unsecured notes due
October 2032.
|
(4)
|
Includes non-cash
foreign currency losses (gains) from remeasurement to USD,
mark-to-market adjustments on investments and derivatives that are
non-cash in nature, straight-line payments from cross-currency
swaps, obligations related to financing lease liabilities, and
adjustments allocable to noncontrolling interests.
|
HISTORICAL FFO AND
AFFO
(in thousands, except
per share amounts)
|
|
For the three months
ended March 31,
|
|
2024
|
|
2023
|
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
129,696
|
|
$
225,016
|
|
$
199,369
|
|
$
95,940
|
|
$
146,827
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
580,441
|
|
450,935
|
|
403,284
|
|
177,614
|
|
164,459
|
Provisions for
impairment of real estate
|
|
88,197
|
|
13,178
|
|
7,038
|
|
2,720
|
|
4,478
|
Gain on sales of real
estate
|
|
(16,574)
|
|
(4,279)
|
|
(10,156)
|
|
(8,401)
|
|
(38,506)
|
Proportionate share of
adjustments for unconsolidated entities
|
|
4,674
|
|
—
|
|
2,235
|
|
—
|
|
—
|
FFO adjustments
allocable to noncontrolling interests
|
|
(751)
|
|
(559)
|
|
(354)
|
|
(166)
|
|
(154)
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
785,683
|
|
$
684,291
|
|
$
601,416
|
|
$
267,707
|
|
$
277,104
|
Merger and
integration-related costs
|
|
94,104
|
|
1,307
|
|
6,519
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO
available to common stockholders
|
|
$
879,787
|
|
$
685,598
|
|
$
607,935
|
|
$
267,707
|
|
$
277,104
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
0.94
|
|
$
1.03
|
|
$
1.01
|
|
$
0.72
|
|
$
0.82
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO per
diluted share
|
|
$
1.05
|
|
$
1.04
|
|
$
1.02
|
|
$
0.72
|
|
$
0.82
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders
|
|
$
862,871
|
|
$
650,728
|
|
$
580,098
|
|
$
318,222
|
|
$
297,223
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
1.03
|
|
$
0.98
|
|
$
0.98
|
|
$
0.86
|
|
$
0.88
|
|
|
|
|
|
|
|
|
|
|
|
Common stock dividends
paid
|
|
$
0.7695
|
|
$
0.7515
|
|
$
0.7395
|
|
$
0.7035
|
|
$
0.6925
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO and Normalized FFO
|
|
837,037
|
|
663,034
|
|
595,103
|
|
371,602
|
|
337,440
|
Weighted average
diluted shares outstanding - AFFO
|
|
837,037
|
|
663,034
|
|
595,103
|
|
372,065
|
|
337,440
|
ADJUSTED EBITDAre
(dollars in
thousands)
|
Adjusted
EBITDAre, Annualized Adjusted EBITDAre, Pro Forma
Adjusted EBITDAre, Annualized Pro Forma Adjusted
EBITDAre, Net Debt/Annualized Adjusted EBITDAre Net
Debt/Annualized Pro Forma Adjusted EBITDAre, Net Debt and
Preferred/ Annualized Adjusted EBITDAre, and Net Debt and
Preferred/ Annualized Pro Forma Adjusted EBITDAre are
non-GAAP financial measures. Please see the Glossary for our
definition and an explanation of how we utilize these
metrics.
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
Net income
|
|
$
133,899
|
|
$
226,122
|
Interest
|
|
240,614
|
|
154,132
|
Income taxes
|
|
15,502
|
|
11,950
|
Depreciation and
amortization
|
|
581,064
|
|
451,477
|
Provisions for
impairment
|
|
89,489
|
|
13,178
|
Merger and
integration-related costs
|
|
94,104
|
|
1,307
|
Gain on sales of real
estate
|
|
(16,574)
|
|
(4,279)
|
Foreign currency and
derivative gain, net
|
|
(4,046)
|
|
(10,322)
|
Proportionate share of
adjustments from unconsolidated entities
|
|
15,236
|
|
—
|
Quarterly Adjusted
EBITDAre
|
|
$
1,149,288
|
|
$
843,565
|
Annualized Adjusted
EBITDAre (1)
|
|
$
4,597,152
|
|
$
3,374,260
|
Annualized Pro Forma
Adjustments
|
|
$
82,199
|
|
$
83,015
|
Annualized Pro Forma
Adjusted EBITDAre
|
|
$
4,679,351
|
|
$
3,457,275
|
Total debt per the
consolidated balance sheet, excluding deferred financing costs and
net premiums and discounts
|
|
$
25,598,604
|
|
$
18,748,217
|
Proportionate share of
unconsolidated entities debt, excluding deferred financing
costs
|
|
659,190
|
|
—
|
Less: Cash and cash
equivalents
|
|
(680,159)
|
|
(164,576)
|
Net Debt
(2)
|
|
$
25,577,635
|
|
$
18,583,641
|
Preferred
Stock
|
|
167,394
|
|
—
|
Net Debt and Preferred
Stock
|
|
$
25,745,029
|
|
$
18,583,641
|
Net Debt/Annualized
Adjusted EBITDAre
|
|
5.6x
|
|
5.5x
|
Net Debt/Annualized Pro
Forma Adjusted EBITDAre
|
|
5.5x
|
|
5.4x
|
Net Debt and Preferred/
Annualized Adjusted EBITDAre
|
|
5.6x
|
|
5.5x
|
Net Debt and Preferred/
Annualized Pro Forma Adjusted EBITDAre
|
|
5.5x
|
|
5.4x
|
|
|
(1)
|
We calculate Annualized
Adjusted EBITDAre by multiplying the Quarterly Adjusted
EBITDAre by four.
|
(2)
|
Net Debt is total debt
per our consolidated balance sheets, excluding deferred financing
costs and net premiums and discounts, but including our
proportionate share of debt from unconsolidated entities, less cash
and cash equivalents.
|
The Annualized Pro
Forma Adjustments, which include transaction accounting adjustments
in accordance with U.S GAAP, consist of adjustments to incorporate
Adjusted EBITDAre from properties we acquired or stabilized
during the applicable quarter and remove Adjusted EBITDAre
from properties we disposed of during the applicable quarter,
giving pro forma effect to all transactions as if they occurred at
the beginning of the applicable period. Our calculation includes
all adjustments consistent with the requirements to present
Adjusted EBITDAre on a pro forma basis in accordance with
Article 11 of Regulation S-X. The Annualized Pro Forma Adjustments
are consistent with the debt service coverage ratio calculated
under financial covenants for our senior unsecured notes. The
following table summarizes our Annualized Pro Forma Adjustments
related to our Annualized Pro Forma Adjusted EBITDAre
calculation for the periods indicated below (in
thousands):
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
Annualized pro forma
adjustments from properties acquired or stabilized
|
|
$
83,152
|
|
$
85,835
|
Annualized pro forma
adjustments from properties disposed
|
|
(953)
|
|
(2,820)
|
Annualized Pro forma
Adjustments
|
|
$
82,199
|
|
$
83,015
|
Adjusted Free Cash
Flow
(in
thousands)
|
Adjusted Free Cash Flow
and Annualized Adjusted Free Cash Flow are non-GAAP financial
measures. Please see the Glossary for our definition and an
explanation of how we utilize these metrics.
|
|
|
|
Three months ended
March 31,
|
|
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
|
$
778,673
|
|
$
731,234
|
Non-recurring capital
expenditures
|
|
(9,628)
|
|
(13,261)
|
Distributions paid to
common stockholders
|
|
(636,499)
|
|
(497,245)
|
Distributions paid to
preferred stockholders
|
|
(2,588)
|
|
—
|
Merger and
integration-related costs (1)
|
|
69,353
|
|
1,307
|
Change in net working
capital decrease (increase)
|
|
6,724
|
|
(80,564)
|
Adjusted Free Cash
Flow
|
|
$
206,035
|
|
$
141,471
|
Annualized Adjusted
Free Cash Flow
|
|
$
824,140
|
|
$
565,884
|
|
|
(1)
|
Excludes share-based
compensation costs recognized in merger and integration-related
costs.
|
CONSOLIDATED BALANCE
SHEETS
(in thousands, except
per share amounts) (unaudited)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
|
Real estate held for
investment, at cost:
|
|
|
|
|
Land
|
|
$
16,787,731
|
|
$
14,929,310
|
Buildings and
improvements
|
|
39,674,812
|
|
34,657,094
|
Total real estate held
for investment, at cost
|
|
56,462,543
|
|
49,586,404
|
Less accumulated
depreciation and amortization
|
|
(6,392,472)
|
|
(6,072,118)
|
Real estate held for
investment, net
|
|
50,070,071
|
|
43,514,286
|
Real estate and lease
intangibles held for sale, net
|
|
78,254
|
|
31,466
|
Cash and cash
equivalents
|
|
680,159
|
|
232,923
|
Accounts receivable,
net
|
|
789,244
|
|
710,536
|
Lease intangible
assets, net
|
|
7,037,328
|
|
5,017,907
|
Goodwill
|
|
4,991,342
|
|
3,731,478
|
Investment in
unconsolidated entities
|
|
1,203,263
|
|
1,172,118
|
Other assets,
net
|
|
3,478,588
|
|
3,368,643
|
Total
assets
|
|
$
68,328,249
|
|
$
57,779,357
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Distributions
payable
|
|
$
225,757
|
|
$
195,222
|
Accounts payable and
accrued expenses
|
|
802,652
|
|
738,526
|
Lease intangible
liabilities, net
|
|
1,740,200
|
|
1,406,853
|
Other
liabilities
|
|
900,106
|
|
811,650
|
Line of credit payable
and commercial paper
|
|
1,022,516
|
|
764,390
|
Term loan,
net
|
|
2,370,455
|
|
1,331,841
|
Mortgages payable,
net
|
|
200,075
|
|
821,587
|
Notes payable,
net
|
|
21,748,004
|
|
18,602,319
|
Total
liabilities
|
|
$
29,009,765
|
|
$
24,672,388
|
|
|
|
|
|
6.000% Series A
cumulative redeemable preferred stock and paid in capital, par
value $0.01 per share, 69,900
shares authorized, 6,900 shares and no shares issued and
outstanding as of March 31, 2024 and December 31, 2023,
respectively, liquidation preference $25.00 per share
|
|
$
167,394
|
|
$
—
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and paid
in capital, par value $0.01 per share, 1,300,000 shares
authorized, 870,756 and 752,460 shares
issued and outstanding as of March 31, 2024 and December 31, 2023,
respectively
|
|
$
46,220,761
|
|
$
39,629,709
|
Distributions in excess
of net income
|
|
(7,299,514)
|
|
(6,762,136)
|
Accumulated other
comprehensive income
|
|
64,780
|
|
73,894
|
Total stockholders'
equity
|
|
$
38,986,027
|
|
$
32,941,467
|
Noncontrolling
interests
|
|
165,063
|
|
165,502
|
Total
equity
|
|
$
39,151,090
|
|
$
33,106,969
|
Total liabilities and
equity
|
|
$
68,328,249
|
|
$
57,779,357
|
GLOSSARY
Adjusted EBITDAre. The National Association of
Real Estate Investment Trusts (Nareit) established an EBITDA metric
for real estate companies (i.e., EBITDA for real estate, or
EBITDAre) it believed would provide investors with a
consistent measure to help make investment decisions among certain
REITs. Our definition of "Adjusted EBITDAre" is generally
consistent with the Nareit definition, other than our adjustment to
remove foreign currency and derivative gain and loss, excluding the
gain and loss from the settlement of foreign currency forwards not
designated as hedges (which is consistent with our previous
calculations of "Adjusted EBITDAre"). We define Adjusted
EBITDAre, a non-GAAP financial measure, for the most recent
quarter as earnings (net income) before (i) interest expense,
including non-cash loss (gain) on swaps, (ii) income and
franchise taxes, (iii) gain on extinguishment of debt, (iv)
real estate depreciation and amortization, (v) provisions for
impairment, (vi) merger and integration-related costs,
(vii) gain on sales of real estate, (viii) foreign currency
and derivative gain and loss, net, (ix) gain on settlement of
foreign currency forwards, and (x) our proportionate share of
adjustments from unconsolidated entities. Our Adjusted
EBITDAre may not be comparable to Adjusted
EBITDAre reported by other companies or as defined by
Nareit, and other companies may interpret or define Adjusted
EBITDAre differently than we do. Management believes
Adjusted EBITDAre to be a meaningful measure of a REIT's
performance because it provides a view of our operating
performance, analyzes our ability to meet interest payment
obligations before the effects of income tax, depreciation and
amortization expense, provisions for impairment, gain on sales of
real estate and other items, as defined above, that affect
comparability, including the removal of non-recurring and non-cash
items that industry observers believe are less relevant to
evaluating the operating performance of a company. In addition,
EBITDAre is widely followed by industry analysts, lenders,
investors, rating agencies, and others as a means of evaluating the
operational cash generating capacity of a company prior to
servicing debt obligations. Management also believes the use of an
annualized quarterly Adjusted EBITDAre metric is
meaningful because it represents our current earnings run rate for
the period presented. The ratio of our total debt to our annualized
quarterly Adjusted EBITDAre is also used to determine
vesting of performance share awards granted to our executive
officers. Adjusted EBITDAre should be considered along
with, but not as an alternative to, net income as a measure of our
operating performance.
Adjusted Free Cash Flow, a non-GAAP financial measure, is
defined as net cash provided by operating activities, excluding
merger and integration-related costs and changes in net working
capital, less non-recurring capital expenditures and dividends
paid. We believe adjusted free cash flow to be a useful liquidity
measure for us and our investors by helping to evaluate our ability
to generate cash beyond what is needed to fund capital
expenditures, debt service and other obligations. Notwithstanding
cash on hand and incremental borrowing capacity, adjusted free cash
flow reflects our ability to grow our business through investments
and acquisitions, as well as our ability to return cash to
shareholders through dividends. Adjusted free cash flow is not
considered under generally accepted accounting principles to be a
primary measure of an entity's residual cash flow available for
discretionary spending, and accordingly should not be considered an
alternative to operating income, net income, or amounts shown in
our consolidated statements of cash flows.
Adjusted Funds From Operations (AFFO), a non-GAAP
financial measure, is defined as FFO adjusted for unique
revenue and expense items, which we believe are not as pertinent to
the measurement of our 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). We believe AFFO
provides useful information to investors because it is a widely
accepted industry measure of the operating performance of real
estate companies used by the investment community. In particular,
AFFO provides an additional measure to compare the operating
performance of different REITs without having to account for
differing depreciation assumptions and other unique revenue and
expense items which are not pertinent to measuring a particular
company's ongoing operating performance. Therefore, we believe that
AFFO is an appropriate supplemental performance metric, and that
the most appropriate GAAP performance metric to which AFFO should
be reconciled is net income available to common stockholders.
Annualized Adjusted EBITDAre, a non-GAAP financial
measure, is calculated by annualizing Adjusted EBITDAre.
Annualized Contractual Rent of our acquisitions and
properties under development is the monthly aggregate cash amount
charged to clients, inclusive of monthly base rent receivables, as
of the balance sheet date, multiplied by 12, excluding percentage
rent, interest income on loans and preferred equity investments,
and including our pro rata share of such revenues from properties
owned by unconsolidated joint ventures. We believe total annualized
contractual rent is a useful supplemental operating measure, as it
excludes entities that were no longer owned at the balance sheet
date and includes the annualized rent from properties acquired
during the quarter. Total annualized contractual rent has not been
reduced to reflect reserves recorded as reductions to GAAP rental
revenue in the periods presented.
Annualized Adjusted Free Cash Flow, a non-GAAP financial
measure, is calculated by annualizing Adjusted Free Cash
Flow.
Annualized Pro Forma Adjusted EBITDAre, a non-GAAP
financial measure, is defined as Adjusted EBITDAre, which
includes transaction accounting adjustments in accordance with U.S.
GAAP, consists of adjustments to incorporate Adjusted
EBITDAre from properties we acquired or stabilized during
the applicable quarter and removes Adjusted EBITDAre from
properties we disposed of during the applicable quarter, giving pro
forma effect to all transactions as if they occurred at the
beginning of the applicable quarter. Our calculation includes all
adjustments consistent with the requirements to present Adjusted
EBITDAre on a pro forma basis in accordance with Article 11
of Regulation S-X. The annualized pro forma adjustments are
consistent with the debt service coverage ratio calculated under
financial covenants for our senior unsecured notes and bonds.
Cash Income represents actual rent for real estate
acquisitions as well as rent to be received upon completion of the
properties under development. For unconsolidated entities, this
represents our pro rata share of the cash income. For loans
receivable and preferred equity investments, this represents
interest income and preferred dividend income, respectively.
Funds From Operations (FFO), a non-GAAP financial
measure, consistent with the Nareit definition, is net income
available to common stockholders, plus depreciation and
amortization of real estate assets, plus provisions for impairments
of depreciable real estate assets, and reduced by gain on property
sales. 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 alternatives to reviewing our cash flows
from operating, investing, and financing activities. In addition,
FFO and AFFO should not be considered measures of liquidity, of our
ability to make cash distributions, or of our ability to pay
interest payments. We consider FFO to be an appropriate
supplemental measure of a REIT's operating performance as it is
based on a net income analysis of property portfolio performance
that adds back items such as depreciation and impairments for FFO.
The historical accounting convention used for real estate assets
requires straight-line depreciation of buildings and improvements,
which implies that the value of real estate assets diminishes
predictably over time. Since real estate values historically rise
and fall with market conditions, presentations of operating results
for a REIT using historical accounting for depreciation could be
less informative. The use of FFO is recommended by the REIT
industry as a supplemental performance measure. In addition, FFO is
used as a measure of our compliance with the financial covenants of
our credit facility.
Initial Weighted Average Cash Yield for acquisitions
and properties under development is computed as Cash Income for the
first twelve months following the acquisition date, divided by the
total cost of the property (including all expenses borne by us),
and includes our pro-rata share of Cash Income from unconsolidated
joint ventures. Initial weighted average cash yield for loans
receivable and preferred equity investment is computed using the
Cash Income for the first twelve months following the acquisition
date (based on interest rates in place as of the date of
acquisition), divided by the total cost of the investment.
Investment Grade Clients are our clients with a
credit rating, and our clients that are subsidiaries or affiliates
of companies with a credit rating, as of the balance sheet date, of
Baa3/BBB- or higher from one of the three major rating agencies
(Moody's/S&P/Fitch).
Net Debt/Annualized Adjusted EBITDAre, a
ratio used by management as a measure of leverage, is calculated as
net debt (which we define as total debt per our consolidated
balance sheet, excluding deferred financing costs and net premiums
and discounts, but including our proportionate share of debt from
unconsolidated entities, less cash and cash equivalents), divided
by Annualized Adjusted EBITDAre.
Net Debt/Annualized Pro Forma Adjusted EBITDAre, a
ratio used by management as a measure of leverage, is calculated as
net debt (which we define as total debt per our consolidated
balance sheet, excluding deferred financing costs and net premiums
and discounts, but including our proportionate share of debt from
unconsolidated entities, less cash and cash equivalents), divided
by Annualized Pro Forma Adjusted EBITDAre.
Net Debt and Preferred/Annualized Adjusted
EBITDAre, a ratio used by management as a measure of
leverage, is calculated as net debt (which we define as total debt
per our consolidated balance sheet, excluding deferred financing
costs and net premiums and discounts, but including our
proportionate share of debt from unconsolidated entities, less cash
and cash equivalents) plus our preferred stock, divided by
Annualized Adjusted EBITDAre.
Net Debt and Preferred/Annualized Pro Forma Adjusted
EBITDAre, a ratio used by management as a measure of
leverage, is calculated as net debt (which we define as total debt
per our consolidated balance sheet, excluding deferred financing
costs and net premiums and discounts, but including our
proportionate share of debt from unconsolidated entities, less cash
and cash equivalents) plus our preferred stock, divided by
Annualized Pro Forma Adjusted EBITDAre.
Normalized Funds from Operations Available to Common
Stockholders (Normalized FFO), a non-GAAP financial measure, is
FFO excluding merger and integration-related costs.
Same Store Pool, for purposes of determining the
properties used to calculate our same store rental revenue,
includes all properties that we owned for the entire year-to-date
period, for both the current and prior year except for properties
during the current or prior year that were: (i) vacant at any
time,(ii) under development or redevelopment, or
(iii) involved in eminent domain and rent was reduced.
Same Store Rental Revenue excludes straight-line
rent, the amortization of above and below-market leases, and
reimbursements from clients for recoverable real estate taxes and
operating expenses. For purposes of comparability, same store
rental revenue is presented on a constant currency basis by
applying the exchange rate as of the balance sheet date to base
currency rental revenue.
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SOURCE Realty Income Corporation