SAN DIEGO, Feb. 20, 2019 /PRNewswire/ -- Realty Income
Corporation (Realty Income, NYSE: O), The Monthly Dividend
Company®, today announced operating results for the
fourth quarter and year ended December 31,
2018. All per share amounts presented in this press release
are on a diluted per common share basis unless stated
otherwise.
COMPANY HIGHLIGHTS:
For the year ended December 31,
2018:
- Net income per share was $1.26
- AFFO per share increased 4.2% to $3.19, compared to 2017
- Invested $1.8 billion in 764 new
properties and properties under development or expansion
- Dividends paid per common share increased 4.1%, compared to
2017
For the quarter ended December 31,
2018:
- Net income per share was $0.29
- AFFO per share increased 3.9% to $0.79, compared to the quarter ended December 31, 2017
- Invested $332.1 million in 180
new properties and properties under development or expansion
- Raised $538.7 million from the
sale of common stock
- Closed on a new $3.25 billion
unsecured credit facility to replace the previous $2.25 billion unsecured credit facility
CEO Comments
"We completed another year of strong operating performance in
2018 which further positions the company for continued success in
2019," said Sumit Roy, Realty
Income's President & Chief Executive Officer. "We invested
$332 million in high-quality real
estate during the fourth quarter, bringing us to approximately
$1.8 billion in real estate
investments for the year. Our portfolio continues to perform well
with year-end occupancy of 98.6% and a rent recapture rate of 103%
on re-leasing activity during the year. We remain conservatively
capitalized, ending the year with a 5.3x Debt-to-EBITDA ratio, and
we enter 2019 with ample liquidity and flexibility to continue
growing earnings and dividends.
Our investment pipeline remains solid, and we anticipate
completing between $1.5 and
$2.0 billion in real estate
investments during 2019. Based on the strength of our operations
and financial position, we are introducing 2019 AFFO per share
guidance of $3.25 to $3.31, representing annual growth of
approximately 2% to 4%."
Financial Results
Revenue
Revenue for the quarter ended
December 31, 2018, increased 10.3% to
$342.6 million, as compared to
$310.7 million for the same quarter
in 2017. Revenue for 2018 increased 9.2% to $1.328 billion, as compared to $1.216 billion for 2017.
Net Income Available to Common Stockholders
Net
income available to common stockholders for the quarter ended
December 31, 2018, was $85.1 million, as compared to $60.9 million for the same quarter in 2017. Net
income per share for the quarter ended December 31, 2018, was $0.29, as compared to $0.22 for the same quarter in 2017.
Net income available to common stockholders for 2018 was
$363.6 million, as compared to
$301.5 million for 2017. Net income
per share for 2018 was $1.26, as
compared to $1.10 for 2017.
Net income available to common stockholders and FFO in 2018 were
impacted by a severance payment made to our former chief executive
officer (CEO) in October 2018. The
total value of cash, stock compensation and professional fees
incurred as a result of this severance was $28.3 million; however, the net amount, after
incorporating accruals for CEO compensation previous to this
severance, was $18.7 million,
equivalent to $0.06 per share.
The calculation to determine net income for a real estate
company includes impairments and gains on property sales. 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 December 31, 2018, increased to $217.7 million, as compared to $171.0 million for the same quarter in 2017. FFO
per share for the quarter ended December 31,
2018, increased to $0.73, as
compared to $0.61 for the same
quarter in 2017.
FFO for 2018 increased to $903.3
million, as compared to $772.7
million for 2017. FFO per share for 2018 increased to
$3.12, as compared to $2.82 for 2017.
Adjusted Funds From Operations Available to Common
Stockholders (AFFO)
AFFO for the quarter ended
December 31, 2018, increased 10.0% to
$236.8 million, as compared to
$215.3 million for the same quarter
in 2017. AFFO per share for the quarter ended December 31, 2018, increased 3.9% to $0.79, as compared to $0.76 for the same quarter in 2017.
AFFO for 2018 increased 10.3% to $924.6
million, as compared to $838.6
million for 2017. AFFO per share for 2018 increased 4.2% to
$3.19, as compared to $3.06 for 2017.
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 December 2018, Realty Income announced the
85th consecutive quarterly dividend increase, which is
the 99th 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 December 31, 2018 was $2.652 per share. The company distributed
$761.6 million in common dividends to
shareholders in 2018, representing 82.4% of our 2018 AFFO of
$924.6 million, and the amount of
monthly dividends paid per share increased 4.1% to $2.631 in 2018, as compared to $2.527 in 2017.
In January 2019, Realty Income
announced an increase to the amount of the February annualized
dividend to $2.706 per share, as
compared to the February 2018
annualized dividend amount of $2.628
per share, which represents an increase of 3.0%. The new monthly
dividend amount of $0.2255 per share
was paid on February 15, 2019.
Real Estate Portfolio Update
As of December 31, 2018, Realty Income's portfolio of
freestanding, single-tenant properties consisted of 5,797
properties located in 49 states and Puerto Rico, leased to 262 different
commercial tenants, and doing business in 48 industries. The
properties are leased under long-term, net lease agreements with a
weighted average remaining lease term of 9.2 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 December 31, 2018,
portfolio occupancy was 98.6% with 80 properties available for
lease out of a total of 5,797 properties in the portfolio, as
compared to 98.8% as of September 30,
2018 and 98.4% as of December 31, 2017. Economic
occupancy, or occupancy as measured by rental revenue, was 99.0% as
of December 31, 2018, as compared to 99.1% as of September 30, 2018 and 98.5% as of
December 31, 2017.
Since September 30, 2018, when the
company reported 71 properties available for lease, the company had
76 lease expirations, re-leased 62 properties and sold five vacant
properties during the quarter ended December 31, 2018. Of the
62 properties re-leased during the fourth quarter of 2018, 60
properties were re-leased to the same tenants and two were
re-leased to new tenants after a period of vacancy. The annual
new rent on these re-leases was $8.01
million, as compared to the previous annual rent of
$8.55 million on the same properties,
representing a rent recapture rate of 93.7% on the properties
re-leased during the quarter ended December 31, 2018.
Since December 31, 2017, when the
company reported 83 properties available for lease, the company had
267 lease expirations, re-leased 228 properties and sold 42 vacant
properties during 2018. Of the 228 properties re-leased during
2018, 215 properties were re-leased to the same tenants, three were
re-leased to new tenants without vacancy, and ten were re-leased to
new tenants after a period of vacancy. The annual new rent on
these re-leases was $46.15 million,
as compared to the previous annual rent of $44.66 million on the same properties,
representing a rent recapture rate of 103.3% on the properties
re-leased during 2018.
Rent Increases
During the quarter ended
December 31, 2018, same store rents on 4,629 properties
under lease increased 0.8% to $272.1 million, as compared to $270.0 million for the same quarter in 2017.
During 2018, same store rents on 4,629 properties under lease
increased 0.9% to $1.08 billion, as
compared to $1.07 billion for
2017.
Investments in Real Estate
During the quarter
ended December 31, 2018, Realty Income invested $332.1 million in 180 new properties and
properties under development or expansion, located in 30 states.
These properties are 100% leased with a weighted average lease term
of approximately 16.2 years and an initial average cash lease yield
of 6.5%. The tenants occupying the new properties operate in 13
industries, and are 97.1% retail and 2.9% industrial, based on
rental revenue. Approximately 24% of the rental revenue generated
from acquisitions during the fourth quarter of 2018 is from
investment grade rated tenants and their subsidiaries.
During 2018, Realty Income invested $1.8
billion in 764 new properties and properties under
development or expansion, located in 39 states. These properties
are 100% leased with a weighted average lease term of approximately
14.8 years and an initial average lease yield of 6.4%. The tenants
occupying the new properties operate in 21 industries, and the
property types are 96.3% retail and 3.7% industrial, based on
rental revenue. Approximately 59% of the rental revenue generated
from acquisitions during 2018 is from investment grade rated
tenants and their subsidiaries.
Property Dispositions
During the quarter ended
December 31, 2018, Realty Income sold
68 properties for $59.3 million, with
a gain on sales of $5.8 million.
During 2018, Realty Income sold 128 properties for $142.3 million, with a gain on sales of
$24.6 million.
Liquidity and Capital Markets
Capital Raising
During the quarter ended
December 31, 2018, Realty Income
raised $538.7 million from the sale
of common stock at a weighted average price of $63.05 per share. During 2018, Realty Income
raised $1.1 billion from the sale of
common stock at a weighted average price of $58.77 per share.
Credit Facility
In October 2018, we entered into a new $3.25 billion unsecured credit facility to amend
and restate our previous $2.25
billion unsecured credit facility, of which $2.0 billion was due to expire in June 2019. This new credit facility includes a
$3.0 billion unsecured revolving
credit facility and a new $250
million unsecured term loan due March
2024. The new revolving credit facility matures in
March 2023 and includes two six-month
extensions that can be exercised at our option. The new revolving
credit facility also has a $1.0
billion expansion feature. Under the new revolving credit
facility, our current investment grade credit ratings provide for
financing at the London Interbank Offered Rate, commonly referred
to as LIBOR, plus 0.775% with a facility commitment fee of 0.125%,
for all-in drawn pricing of 0.90% over LIBOR. This compares
favorably to our previous $2.25
billion unsecured credit facility, which had all-in drawn
pricing of 0.975% over LIBOR. As of December
31, 2018, we had a borrowing capacity of $2.75 billion on the revolving credit
facility.
In conjunction with our new revolving credit facility and as
referenced above, we entered into a $250.0
million senior unsecured term loan, which matures in
March 2024. Borrowing under this term
loan bears interest at the current one-month LIBOR, plus 0.85%. In
conjunction with this term loan, we also entered into an interest
rate swap which effectively fixes our per annum interest on this
term loan at 3.89%.
2019 Earnings Guidance
We estimate AFFO per share for 2019 of $3.25 to $3.31.
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 $3.23 to $3.29. FFO
per share for 2019 is based on a net income per share range of
$1.36 to $1.42, plus estimated real estate depreciation
and impairments of $1.92 per share,
and reduced by potential estimated gains on sales of investment
properties of $0.05 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
February 21, 2019 at 11:30 a.m.
PT to discuss the results. To access the conference, dial
(800) 458-4148. When prompted, provide the conference ID
5871002.
A telephone replay of the conference call can also be accessed
by calling (888) 203-1112 and entering the passcode 5871002. The
telephone replay will be available through March 7, 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 March 7, 2019. No access code is required for
this replay.
Supplemental Materials
Supplemental materials on fourth quarter and 2018 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
5,700 real estate properties owned under long-term lease agreements
with regional and national commercial tenants. To date, the company
has declared 584 consecutive common stock monthly dividends
throughout its 50-year operating history and increased the dividend
100 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 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.
CONSOLIDATED
STATEMENTS OF INCOME
|
(dollars in
thousands, except per share amounts) (unaudited)
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Ended
12/31/18
|
|
|
Ended
12/31/17
|
|
|
12/31/18
|
|
|
12/31/17
|
|
REVENUE
|
|
|
|
|
|
|
|
Rental
|
$
|
329,405
|
|
|
$
|
298,899
|
|
|
$
|
1,274,596
|
|
|
$
|
1,166,224
|
|
Tenant
reimbursements
|
11,776
|
|
|
11,165
|
|
|
46,950
|
|
|
46,082
|
|
Other
|
1,395
|
|
|
590
|
|
|
6,292
|
|
|
3,462
|
|
Total
revenue
|
342,576
|
|
|
310,654
|
|
|
1,327,838
|
|
|
1,215,768
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
137,711
|
|
|
127,033
|
|
|
539,780
|
|
|
498,788
|
|
Interest
|
70,635
|
|
|
61,477
|
|
|
266,020
|
|
|
247,413
|
|
General and
administrative
|
34,178
|
|
|
15,219
|
|
|
84,148
|
|
|
58,446
|
|
Property (including
reimbursable)
|
17,732
|
|
|
16,652
|
|
|
66,326
|
|
|
69,480
|
|
Income
taxes
|
1,607
|
|
|
3,424
|
|
|
5,340
|
|
|
6,044
|
|
Provisions for
impairment
|
1,235
|
|
|
6,679
|
|
|
26,269
|
|
|
14,751
|
|
Total
expenses
|
263,098
|
|
|
230,484
|
|
|
987,883
|
|
|
894,922
|
|
Gain on sales of real
estate
|
5,825
|
|
|
23,208
|
|
|
24,643
|
|
|
40,898
|
|
Loss on extinguishment
of debt
|
—
|
|
|
(42,426)
|
|
|
—
|
|
|
(42,426)
|
|
Net income
|
85,303
|
|
|
60,952
|
|
|
364,598
|
|
|
319,318
|
|
Net income
attributable to noncontrolling interests
|
(231)
|
|
|
(100)
|
|
|
(984)
|
|
|
(520)
|
|
Net income
attributable to the Company
|
85,072
|
|
|
60,852
|
|
|
363,614
|
|
|
318,798
|
|
Preferred stock
dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,911)
|
|
Excess of redemption
value over carrying value of preferred shares redeemed
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,373)
|
|
Net income available
to common stockholders
|
$
|
85,072
|
|
|
$
|
60,852
|
|
|
$
|
363,614
|
|
|
$
|
301,514
|
|
|
|
|
|
|
|
|
|
Funds from operations
available to common stockholders (FFO)
|
$
|
217,743
|
|
|
$
|
170,988
|
|
|
$
|
903,257
|
|
|
$
|
772,665
|
|
Adjusted funds from
operations available to common stockholders (AFFO)
|
$
|
236,813
|
|
|
$
|
215,312
|
|
|
$
|
924,558
|
|
|
$
|
838,638
|
|
|
|
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
|
|
|
Net income, basic and
diluted
|
$
|
0.29
|
|
|
$
|
0.22
|
|
|
$
|
1.26
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
FFO:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
3.12
|
|
|
$
|
2.83
|
|
Diluted
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
3.12
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
AFFO:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.80
|
|
|
$
|
0.76
|
|
|
$
|
3.19
|
|
|
$
|
3.07
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.76
|
|
|
$
|
3.19
|
|
|
$
|
3.06
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
$
|
0.662
|
|
|
$
|
0.636
|
|
|
$
|
2.631
|
|
|
$
|
2.527
|
|
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
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Ended
12/31/18
|
|
|
Ended
12/31/17
|
|
|
12/31/18
|
|
|
12/31/17
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
$
|
85,072
|
|
|
$
|
60,852
|
|
|
$
|
363,614
|
|
|
$
|
301,514
|
|
Depreciation and
amortization
|
137,711
|
|
|
127,033
|
|
|
539,780
|
|
|
498,788
|
|
Depreciation of
furniture, fixtures and equipment
|
(158)
|
|
|
(118)
|
|
|
(650)
|
|
|
(557)
|
|
Provisions for
impairment
|
1,235
|
|
|
6,679
|
|
|
26,269
|
|
|
14,751
|
|
Gain on sales of real
estate
|
(5,825)
|
|
|
(23,208)
|
|
|
(24,643)
|
|
|
(40,898)
|
|
FFO adjustments
allocable to noncontrolling interests
|
(292)
|
|
|
(250)
|
|
|
(1,113)
|
|
|
(933)
|
|
FFO available to
common stockholders
|
$
|
217,743
|
|
|
$
|
170,988
|
|
|
$
|
903,257
|
|
|
$
|
772,665
|
|
FFO allocable to
dilutive noncontrolling interests
|
473
|
|
|
—
|
|
|
867
|
|
|
877
|
|
Diluted
FFO
|
$
|
218,216
|
|
|
$
|
170,988
|
|
|
$
|
904,124
|
|
|
$
|
773,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
3.12
|
|
|
$
|
2.83
|
|
Diluted
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
3.12
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
$
|
196,835
|
|
|
$
|
179,306
|
|
|
$
|
761,582
|
|
|
$
|
689,294
|
|
|
|
|
|
|
|
|
|
FFO available to
common stockholders in excess of (less than) distributions paid to
common stockholders
|
$
|
20,908
|
|
|
$
|
(8,318)
|
|
|
$
|
141,675
|
|
|
$
|
83,371
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for FFO:
|
|
|
|
|
|
|
|
|
Basic
|
297,730,206
|
|
|
281,923,090
|
|
|
289,427,430
|
|
|
273,465,680
|
|
Diluted
|
298,609,734
|
|
|
282,023,488
|
|
|
289,923,984
|
|
|
273,936,752
|
|
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
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Ended
12/31/18
|
|
|
Ended
12/31/17
|
|
|
12/31/18
|
|
|
12/31/17
|
|
Net income available
to common stockholders
|
$
|
85,072
|
|
|
$
|
60,852
|
|
|
$
|
363,614
|
|
|
$
|
301,514
|
|
Cumulative
adjustments to calculate FFO (1)
|
132,671
|
|
|
110,136
|
|
|
539,643
|
|
|
471,151
|
|
FFO available to
common stockholders
|
217,743
|
|
|
170,988
|
|
|
903,257
|
|
|
772,665
|
|
Executive severance
charge (2)
|
18,651
|
|
|
—
|
|
|
18,651
|
|
|
—
|
|
Loss on
extinguishment of debt
|
—
|
|
|
42,426
|
|
|
—
|
|
|
42,426
|
|
Excess of redemption
value over carrying value of Class F preferred share
redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
13,373
|
|
Amortization of
share-based compensation
|
2,943
|
|
|
3,305
|
|
|
15,470
|
|
|
13,946
|
|
Amortization of
deferred financing costs (3)
|
1,119
|
|
|
1,193
|
|
|
3,991
|
|
|
5,326
|
|
Amortization of net
mortgage (premiums) discounts
|
(354)
|
|
|
1,114
|
|
|
(1,520)
|
|
|
(466)
|
|
Loss (gain) on
interest rate swaps
|
331
|
|
|
(2,022)
|
|
|
(2,733)
|
|
|
(3,250)
|
|
Leasing costs and
commissions
|
(1,076)
|
|
|
(326)
|
|
|
(3,907)
|
|
|
(1,575)
|
|
Recurring capital
expenditures
|
(555)
|
|
|
(376)
|
|
|
(1,084)
|
|
|
(912)
|
|
Straight-line
rent
|
(6,480)
|
|
|
(4,859)
|
|
|
(24,687)
|
|
|
(17,191)
|
|
Amortization of above
and below-market leases
|
4,427
|
|
|
3,800
|
|
|
16,852
|
|
|
14,013
|
|
Other adjustments
(4)
|
64
|
|
|
69
|
|
|
268
|
|
|
283
|
|
AFFO available to
common stockholders
|
$
|
236,813
|
|
|
$
|
215,312
|
|
|
$
|
924,558
|
|
|
$
|
838,638
|
|
AFFO allocable to
dilutive noncontrolling interests
|
487
|
|
|
293
|
|
|
901
|
|
|
1,178
|
|
Diluted
AFFO
|
$
|
237,300
|
|
|
$
|
215,605
|
|
|
$
|
925,459
|
|
|
$
|
839,816
|
|
|
|
|
|
|
|
|
|
AFFO per common
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.80
|
|
|
$
|
0.76
|
|
|
$
|
3.19
|
|
|
$
|
3.07
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.76
|
|
|
$
|
3.19
|
|
|
$
|
3.06
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
$
|
196,835
|
|
|
$
|
179,306
|
|
|
$
|
761,582
|
|
|
$
|
689,294
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders in excess of distributions paid to common
stockholders
|
$
|
39,978
|
|
|
$
|
36,006
|
|
|
$
|
162,976
|
|
|
$
|
149,344
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for AFFO:
|
|
|
|
|
|
|
Basic
|
297,730,206
|
|
|
281,923,090
|
|
|
289,427,430
|
|
|
273,465,680
|
|
Diluted
|
298,609,734
|
|
|
282,428,692
|
|
|
289,923,984
|
|
|
274,024,934
|
|
|
|
(1)
|
See FFO calculation
on page seven for reconciling items.
|
(2)
|
The executive
severance charge represents the incremental costs incurred upon our
former CEO's departure in October 2018 per the reconciliation
below:
|
|
|
|
Cash
|
$
|
9,817
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation
|
17,902
|
|
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
574
|
|
|
Total value of
severance
|
28,293
|
|
|
|
|
|
|
|
|
|
|
|
Amount accrued for
CEO compensation prior to separation
|
(9,642)
|
|
|
Incremental
severance
|
$
|
18,651
|
|
|
|
(3)
|
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.
|
(4)
|
Includes adjustments
allocable to both noncontrolling interests and capital lease
obligations.
|
HISTORICAL FFO AND
AFFO
|
(dollars in
thousands, except per share amounts)
|
|
For the three months
ended December 31,
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
$
|
85,072
|
|
|
$
|
60,852
|
|
|
$
|
85,671
|
|
|
$
|
76,171
|
|
|
$
|
71,018
|
|
Depreciation and
amortization, net of FF&E
|
137,553
|
|
|
126,915
|
|
|
117,580
|
|
|
105,537
|
|
|
96,376
|
|
Provisions for
impairment
|
1,235
|
|
|
6,679
|
|
|
3,709
|
|
|
1,378
|
|
|
1,960
|
|
Gain on sales of real
estate
|
(5,825)
|
|
|
(23,208)
|
|
|
(6,696)
|
|
|
(5,126)
|
|
|
(25,270)
|
|
FFO adjustments
allocable to noncontrolling interests
|
(292)
|
|
|
(250)
|
|
|
(431)
|
|
|
(52)
|
|
|
(378)
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
$
|
217,743
|
|
|
$
|
170,988
|
|
|
$
|
199,833
|
|
|
$
|
177,908
|
|
|
$
|
143,706
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
0.77
|
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
$
|
236,813
|
|
|
$
|
215,312
|
|
|
$
|
192,964
|
|
|
$
|
170,023
|
|
|
$
|
145,394
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
$
|
0.79
|
|
|
$
|
0.76
|
|
|
$
|
0.75
|
|
|
$
|
0.68
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
$
|
0.662
|
|
|
$
|
0.636
|
|
|
$
|
0.606
|
|
|
$
|
0.572
|
|
|
$
|
0.549
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
298,609,734
|
|
|
282,023,488
|
|
|
259,010,432
|
|
|
249,508,956
|
|
|
223,262,633
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
298,609,734
|
|
|
282,428,692
|
|
|
259,010,432
|
|
|
249,508,956
|
|
|
223,262,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended
December 31,
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
$
|
363,614
|
|
|
$
|
301,514
|
|
|
$
|
288,491
|
|
|
$
|
256,686
|
|
|
$
|
227,558
|
|
Depreciation and
amortization
|
539,130
|
|
|
498,231
|
|
|
449,196
|
|
|
408,404
|
|
|
374,179
|
|
Provisions for
impairment
|
26,269
|
|
|
14,751
|
|
|
20,664
|
|
|
10,560
|
|
|
4,636
|
|
Gain on sales of real
estate
|
(24,643)
|
|
|
(40,898)
|
|
|
(21,979)
|
|
|
(22,243)
|
|
|
(42,088)
|
|
FFO adjustments
allocable to noncontrolling interests
|
(1,113)
|
|
|
(933)
|
|
|
(977)
|
|
|
(970)
|
|
|
(1,396)
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
$
|
903,257
|
|
|
$
|
772,665
|
|
|
$
|
735,395
|
|
|
$
|
652,437
|
|
|
$
|
562,889
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
$
|
3.12
|
|
|
$
|
2.82
|
|
|
$
|
2.88
|
|
|
$
|
2.77
|
|
|
$
|
2.58
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
$
|
924,558
|
|
|
$
|
838,638
|
|
|
$
|
736,374
|
|
|
$
|
647,028
|
|
|
$
|
561,661
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
$
|
3.19
|
|
|
$
|
3.06
|
|
|
$
|
2.88
|
|
|
$
|
2.74
|
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
$
|
2.631
|
|
|
$
|
2.527
|
|
|
$
|
2.392
|
|
|
$
|
2.271
|
|
|
$
|
2.192
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
289,923,984
|
|
|
273,936,752
|
|
|
255,822,679
|
|
|
235,891,368
|
|
|
218,450,863
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
289,923,984
|
|
|
274,024,934
|
|
|
255,822,679
|
|
|
235,891,368
|
|
|
218,450,863
|
|
REALTY INCOME
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(dollars in
thousands, except per share data) (unaudited)
|
|
|
December 31,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Real estate, at
cost:
|
|
|
|
Land
|
$
|
4,682,660
|
|
|
$
|
4,080,400
|
|
Buildings and
improvements
|
11,858,806
|
|
|
10,936,069
|
|
Total real estate, at
cost
|
16,541,466
|
|
|
15,016,469
|
|
Less accumulated
depreciation and amortization
|
(2,714,534)
|
|
|
(2,346,644)
|
|
Net real estate held
for investment
|
13,826,932
|
|
|
12,669,825
|
|
Real estate held for
sale, net
|
16,585
|
|
|
6,674
|
|
Net real
estate
|
13,843,517
|
|
|
12,676,499
|
|
Cash and cash
equivalents
|
10,387
|
|
|
6,898
|
|
Accounts receivable,
net
|
144,991
|
|
|
119,533
|
|
Lease intangible
assets, net
|
1,199,597
|
|
|
1,194,930
|
|
Goodwill
|
14,630
|
|
|
14,970
|
|
Other assets,
net
|
47,361
|
|
|
45,336
|
|
Total
assets
|
$
|
15,260,483
|
|
|
$
|
14,058,166
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Distributions
payable
|
$
|
67,789
|
|
|
$
|
60,799
|
|
Accounts payable and
accrued expenses
|
133,765
|
|
|
109,523
|
|
Lease intangible
liabilities, net
|
310,866
|
|
|
268,796
|
|
Other
liabilities
|
127,109
|
|
|
116,869
|
|
Line of credit
payable
|
252,000
|
|
|
110,000
|
|
Term loans,
net
|
568,610
|
|
|
445,286
|
|
Mortgages payable,
net
|
302,569
|
|
|
325,941
|
|
Notes payable,
net
|
5,376,797
|
|
|
5,230,244
|
|
Total
liabilities
|
7,139,505
|
|
|
6,667,458
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and paid
in capital, par value $0.01 per share, 370,100,000 shares
authorized, 303,742,090 shares issued and outstanding as of
December 31, 2018 and 284,213,685 shares issued and outstanding as
of December 31, 2017
|
10,754,495
|
|
|
9,624,264
|
|
Distributions in
excess of net income
|
(2,657,655)
|
|
|
(2,252,763)
|
|
Accumulated other
comprehensive loss
|
(8,098)
|
|
|
—
|
|
Total stockholders'
equity
|
8,088,742
|
|
|
7,371,501
|
|
Noncontrolling
interests
|
32,236
|
|
|
19,207
|
|
Total
equity
|
8,120,978
|
|
|
7,390,708
|
|
Total liabilities and
equity
|
$
|
15,260,483
|
|
|
$
|
14,058,166
|
|
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%)
|
|
2.6%
|
|
(3.5%)
|
|
2.2%
|
|
(4.4%)
|
|
1.4%
|
|
(3.9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound
Average Annual Total
Return (5)
|
|
16.3%
|
|
|
|
10.1%
|
|
|
|
10.2%
|
|
|
|
9.3%
|
|
|
|
9.3%
|
|
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.
|
(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)
|
All of these Compound
Average Annual Total Return rates are calculated in the same
manner: from Realty Income's NYSE listing on October 18, 1994
through December 31, 2018, and (except for NASDAQ) assuming
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