SAN DIEGO, Feb. 19, 2020 /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,
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 year ended December 31,
2019:
- Net income per share was $1.38
- AFFO per share increased 4.1% to $3.32, compared to 2018
- Invested $3.7 billion in 789
properties and properties under development or expansion, including
$797.8 million in 18 properties in
the United Kingdom (U.K.)
- Generated a rent recapture rate of 102.6% on re-leasing
activity
- Dividends paid per common share increased 3.0%, compared to
2018
- Raised $2.2 billion from the sale
of common stock
For the quarter ended December 31,
2019:
- Net income per share was $0.39
- AFFO per share increased 8.9% to $0.86, compared to the quarter ended December 31, 2018
- Invested $1.7 billion in 556
properties and properties under development or expansion, including
$221.0 million in five properties in
the U.K.
- Generated a rent recapture rate of 106.2% on re-leasing
activity
- Raised $582.2 million from the
sale of common stock
CEO Comments
"We are pleased to complete another year of strong operating
results and favorable risk-adjusted returns for our shareholders,
particularly in a year that marked the 50th anniversary
of our company's founding and the 25th anniversary of
our public listing," said Sumit Roy,
Realty Income's President and Chief Executive Officer. "We
successfully executed our strategy across all areas of the
business, and I would like to thank our talented team for their
hard work and dedication in pursuing our mission. We invested
approximately $3.7 billion in
high-quality real estate during 2019, a record year for
property-level acquisitions, including $1.7
billion during the fourth quarter. We ended 2019 with
portfolio occupancy of 98.6% while generating a rent recapture rate
of approximately 103% on re-leasing activity during the year. To
finance our investment activity, we raised over $3.0 billion of capital during 2019 at favorable
pricing, including approximately $2.2
billion of equity. This month, we were added to the
exclusive S&P 500 Dividend Aristocrats® index as an
S&P 500 constituent that has raised its dividend every year for
the last 25 consecutive years."
"Our investment pipeline, both domestic and international,
remains robust, and we believe we will continue to enjoy excellent
access to well-priced capital. Accordingly, we expect to invest
$2.25 billion to $2.75 billion in 2020 based on current market
conditions. Combined with the continued strength of our portfolio,
we are introducing 2020 AFFO per share guidance of $3.50 to $3.56,
representing annual growth of 5.4% to 7.2%."
Select Financial Results
The following summarizes our select financial results (dollars
in millions, except per share data):
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Total
revenue
|
$
|
397.5
|
|
|
$
|
342.6
|
|
|
$
|
1,491.6
|
|
|
$
|
1,327.8
|
|
|
Net income available to
common stockholders (1)(2)
|
$
|
129.3
|
|
|
$
|
85.1
|
|
|
$
|
436.5
|
|
|
$
|
363.6
|
|
|
Net income per share
(2)
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
1.38
|
|
|
$
|
1.26
|
|
|
Funds from operations
(FFO) available to common stockholders (2)(3)
|
$
|
280.4
|
|
|
$
|
217.7
|
|
|
$
|
1,039.6
|
|
|
$
|
903.3
|
|
|
FFO per share
(2)
|
$
|
0.85
|
|
|
$
|
0.73
|
|
|
$
|
3.29
|
|
|
$
|
3.12
|
|
|
Adjusted funds from
operations (AFFO) available to common stockholders (3)
|
$
|
282.0
|
|
|
$
|
236.8
|
|
|
$
|
1,050.0
|
|
|
$
|
924.6
|
|
|
AFFO per
share
|
$
|
0.86
|
|
|
$
|
0.79
|
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The calculation to
determine net income for a real estate company includes provisions
for impairment, gains on sales of real estate, 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.
|
|
(2)
|
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 the CEO
compensation previous to this severance, was $18.7 million,
equivalent to $0.06 per share.
|
|
(3)
|
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 2019, Realty Income
announced the 89th consecutive quarterly dividend
increase, which is the 104th 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, 2019 was $2.73 per share. The amount of monthly dividends
paid per share increased 3.0% to $2.711 in 2019, as compared to $2.631 in 2018. The company distributed
$852.1 million in common dividends to
shareholders in 2019, representing 81.2% of its AFFO of
$1.05 billion.
In January 2020, Realty Income
announced an increase of the February
2020 annualized dividend to $2.79 per share, as compared to the February 2019 annualized dividend amount of
$2.706, which represents an increase
of 3.1%. The new monthly dividend amount of $0.2325 per share was paid on February 14, 2020.
Real Estate Portfolio Update
As of December 31, 2019, Realty Income's portfolio
consisted of 6,483 properties located in 49 U.S. states,
Puerto Rico and the U.K., leased
to 301 different commercial tenants doing business in 50
industries. The properties are primarily freestanding and leased
under long-term, net lease agreements with a weighted average
remaining lease term of 9.2 years. The company's portfolio of
commercial real estate continues to perform well and provides
dependable rental revenue supporting the payment of monthly
dividends. As of December 31, 2019,
portfolio occupancy was 98.6% with 94 properties available for
lease out of the 6,483, as compared to 98.3% as of September 30, 2019 and 98.6% as of December 31, 2018.
Changes in Occupancy
|
Properties available
for lease at September 30, 2019
|
102
|
|
Lease
expirations
|
44
|
|
Re-leases to same
tenant (1)
|
(25)
|
|
Re-leases to new
tenant (1)(2)
|
(3)
|
|
Dispositions
|
(24)
|
|
Properties available
for lease at December 31, 2019
|
94
|
|
(1)
|
The annual new rent
on these re-leases was $6.457 million, as compared to the previous
annual rent of $6.079 million on the same properties, representing
a rent recapture rate of 106.2% on the properties re-leased during
the quarter ended December 31, 2019.
|
|
(2)
|
Re-leased to two new
tenants after a period of vacancy, and one new tenant without
vacancy.
|
|
Properties available
for lease at December 31, 2018
|
80
|
|
Lease
expirations
|
304
|
|
Re-leases to same
tenant (1)
|
(199)
|
|
Re-leases to new
tenant (1)(2)
|
(15)
|
|
Dispositions
|
(76)
|
|
Properties available
for lease at December 31, 2019
|
94
|
|
(1)
|
The annual new rent
on these re-leases was $54.978 million, as compared to the previous
annual rent of $53.605 million on the same properties, representing
a rent recapture rate of 102.6% on the properties re-leased during
the year ended December 31, 2019.
|
|
(2)
|
Re-leased to eight
new tenants after a period of vacancy, and seven new tenants
without vacancy.
|
Investments in Real Estate
The following table summarizes our acquisitions in the U.S. and
U.K. for the periods indicated below:
|
Number of
Properties
|
|
Square Feet
(in millions)
|
|
Investment
($ in millions)
|
|
Weighted
Average
Lease Term
(Years)
|
|
Initial Average
Cash Lease
Yield
|
|
Three months ended
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
(in 42 states)
|
539
|
|
|
5.4
|
|
|
$
|
1,447.9
|
|
|
10.5
|
|
|
7.0
|
%
|
|
Acquisitions - U.K.
(1)
|
5
|
|
|
0.4
|
|
|
221.0
|
|
|
17.1
|
|
|
5.2
|
%
|
|
Total
Acquisitions
|
544
|
|
|
5.8
|
|
|
1,668.9
|
|
|
11.2
|
|
|
6.8
|
%
|
|
Properties under
Development - U.S.
|
12
|
|
|
0.3
|
|
|
20.6
|
|
|
13.5
|
|
|
7.1
|
%
|
|
Total
(2)
|
556
|
|
|
6.1
|
|
|
$
|
1,689.5
|
|
|
11.2
|
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
(in 45 states)
|
753
|
|
|
11.6
|
|
|
$
|
2,860.8
|
|
|
13.0
|
|
|
6.8
|
%
|
|
Acquisitions - U.K.
(1)
|
18
|
|
|
1.6
|
|
|
797.8
|
|
|
15.6
|
|
|
5.2
|
%
|
|
Total
Acquisitions
|
771
|
|
|
13.2
|
|
|
3,658.6
|
|
|
13.4
|
|
|
6.4
|
%
|
|
Properties under
Development - U.S.
|
18
|
|
|
0.5
|
|
|
56.6
|
|
|
15.1
|
|
|
7.3
|
%
|
|
Total
(3)
|
789
|
|
|
13.7
|
|
|
$
|
3,715.2
|
|
|
13.5
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents
investments of £169.7 million Sterling during the quarter ended
December 31, 2019 and £625.8 million Sterling during the year ended
December 31, 2019 converted at the applicable exchange rate on the
date of acquisition.
|
|
(2)
|
The tenants occupying
the new properties operate in 26 industries, and are 100.0% retail,
based on rental revenue. Approximately 47% of the rental revenue
generated from acquisitions during the fourth quarter of 2019 is
from investment grade rated tenants, their subsidiaries or
affiliated companies.
|
|
(3)
|
The tenants occupying
the new properties operate in 31 industries, and are 94.6% retail
and 5.4% industrial, based on rental revenue. Approximately 36% of
the rental revenue generated from acquisitions during 2019 is from
investment grade rated tenants, their subsidiaries or affiliated
companies.
|
Rent Increases
The following summarizes our same store rents on 4,811 properties
under lease (dollars in millions):
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
Increase
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Three
months
|
|
Twelve
months
|
|
Rental
Revenue
|
$
|
296.5
|
|
|
$
|
290.8
|
|
|
$
|
1,175.6
|
|
|
$
|
1,157.6
|
|
|
2.0
|
%
|
|
1.6
|
%
|
Property Dispositions
The following summarizes our property dispositions (dollars in
millions):
|
Quarter
Ended
December 31,
2019
|
|
Year
Ended
December 31,
2019
|
|
Properties
sold
|
29
|
|
|
93
|
|
|
Net sales
proceeds
|
$
|
36.3
|
|
|
$
|
108.9
|
|
|
Gain on sales of real
estate
|
$
|
14.2
|
|
|
$
|
30.0
|
|
Liquidity and Capital Markets
Equity Capital Raising
During the quarter ended December 31,
2019, Realty Income raised $582.2
million from the sale of common stock at a weighted average
price of $75.52 per share. During
2019, Realty Income raised $2.2
billion from the sale of common stock at a weighted average
price of $72.40 per share.
Credit Facility
Realty Income has an unsecured revolving 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 December 31, 2019, the balance of borrowings
outstanding under our revolving credit facility was $704.3 million.
Early Redemption of 5.75% Notes Due January 2021
In January 2020, we completed the
early redemption on all $250.0
million in principal amount of our outstanding 5.750% Notes
due January 2021, plus accrued and
unpaid interest. As a result of the early redemption, we will
recognize an estimated $9.8 million
loss on extinguishment of debt during the first quarter of
2020.
2020 Earnings Guidance
We estimate AFFO per share for 2020 of $3.50 to $3.56.
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 2020 of $3.45 to $3.51, inclusive of a $0.03 per share loss due to the early redemption
of the 5.750% Notes due 2021. FFO per share for 2020 is based on a
net income per share range of $1.42
to $1.48, plus estimated real estate
depreciation and impairments of $2.09
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
February 20, 2020 at 11:30 a.m.
PT to discuss the results. To access the conference, dial
(877) 701-6180. When prompted, provide the conference ID
9079776.
A telephone replay of the conference call can also be accessed
by calling (800) 585-8367 and entering the passcode 9079776. The
telephone replay will be available through March 5, 2020. 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.
The webcast replay will be available through March 5, 2020. No access code is required for
this replay.
Supplemental Materials
Supplemental materials on fourth quarter and 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
6,400 real estate properties owned under long-term lease agreements
with commercial tenants. To date, the company has declared 596
consecutive common stock monthly dividends throughout its 51-year
operating history and increased the dividend 105 times since Realty
Income's public listing in 1994 (NYSE: O). The company is a member
of the S&P 500 Dividend Aristocrats® index.
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, domestic 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
|
|
Year Ended
|
|
Year Ended
|
|
|
Ended
12/31/19
|
|
Ended
12/31/18
|
|
12/31/19
|
|
12/31/18
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
Rental (including
reimbursable)
|
|
$
|
394,217
|
|
|
$
|
341,181
|
|
|
$
|
1,484,818
|
|
|
$
|
1,321,546
|
|
|
Other
|
|
3,312
|
|
|
1,395
|
|
|
6,773
|
|
|
6,292
|
|
|
Total
revenue
|
|
397,529
|
|
|
342,576
|
|
|
1,491,591
|
|
|
1,327,838
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
156,594
|
|
|
137,711
|
|
|
593,961
|
|
|
539,780
|
|
|
Interest
|
|
75,073
|
|
|
70,635
|
|
|
290,991
|
|
|
266,020
|
|
|
General and
administrative
|
|
16,330
|
|
|
34,178
|
|
|
66,483
|
|
|
84,148
|
|
|
Property (including
reimbursable)
|
|
25,253
|
|
|
17,732
|
|
|
88,585
|
|
|
66,326
|
|
|
Income
taxes
|
|
1,736
|
|
|
1,607
|
|
|
6,158
|
|
|
5,340
|
|
|
Provisions for
impairment
|
|
8,950
|
|
|
1,235
|
|
|
40,186
|
|
|
26,269
|
|
|
Total
expenses
|
|
283,936
|
|
|
263,098
|
|
|
1,086,364
|
|
|
987,883
|
|
|
Gain on sales of real
estate
|
|
14,168
|
|
|
5,825
|
|
|
29,996
|
|
|
24,643
|
|
|
Foreign currency and
derivative gains, net
|
|
1,792
|
|
|
—
|
|
|
2,255
|
|
|
—
|
|
|
Net income
|
|
129,553
|
|
|
85,303
|
|
|
437,478
|
|
|
364,598
|
|
|
Net income
attributable to noncontrolling interests
|
|
(256)
|
|
|
(231)
|
|
|
(996)
|
|
|
(984)
|
|
|
Net income available
to common stockholders
|
|
$
|
129,297
|
|
|
$
|
85,072
|
|
|
$
|
436,482
|
|
|
$
|
363,614
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
available to common stockholders (FFO)
|
|
$
|
280,396
|
|
|
$
|
217,743
|
|
|
$
|
1,039,591
|
|
|
$
|
903,257
|
|
|
Adjusted funds from
operations available to common stockholders (AFFO)
|
|
$
|
281,986
|
|
|
$
|
236,813
|
|
|
$
|
1,050,015
|
|
|
$
|
924,558
|
|
|
|
|
|
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
|
|
|
|
|
Net
income:
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
1.38
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
FFO:
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
|
$
|
0.85
|
|
|
$
|
0.73
|
|
|
$
|
3.29
|
|
|
$
|
3.12
|
|
|
|
|
|
|
|
|
|
|
|
AFFO:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
Diluted
|
|
$
|
0.86
|
|
|
$
|
0.79
|
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
|
0.681
|
|
|
$
|
0.662
|
|
|
$
|
2.711
|
|
|
$
|
2.631
|
|
|
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
12/31/19
|
|
Ended
12/31/18
|
|
12/31/19
|
|
12/31/18
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
129,297
|
|
|
$
|
85,072
|
|
|
$
|
436,482
|
|
|
$
|
363,614
|
|
|
Depreciation and
amortization
|
|
156,594
|
|
|
137,711
|
|
|
593,961
|
|
|
539,780
|
|
|
Depreciation of
furniture, fixtures and equipment
|
|
(127)
|
|
|
(158)
|
|
|
(565)
|
|
|
(650)
|
|
|
Provisions for
impairment
|
|
8,950
|
|
|
1,235
|
|
|
40,186
|
|
|
26,269
|
|
|
Gain on sales of real
estate
|
|
(14,168)
|
|
|
(5,825)
|
|
|
(29,996)
|
|
|
(24,643)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(150)
|
|
|
(292)
|
|
|
(477)
|
|
|
(1,113)
|
|
|
FFO available to
common stockholders
|
|
$
|
280,396
|
|
|
$
|
217,743
|
|
|
$
|
1,039,591
|
|
|
$
|
903,257
|
|
|
FFO allocable to
dilutive noncontrolling interests
|
|
372
|
|
|
473
|
|
|
1,403
|
|
|
867
|
|
|
Diluted
FFO
|
|
$
|
280,768
|
|
|
$
|
218,216
|
|
|
$
|
1,040,994
|
|
|
$
|
904,124
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common
share:
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
|
$
|
0.85
|
|
|
$
|
0.73
|
|
|
$
|
3.29
|
|
|
$
|
3.12
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
222,476
|
|
|
$
|
196,834
|
|
|
$
|
852,134
|
|
|
$
|
761,582
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
|
57,920
|
|
|
$
|
20,909
|
|
|
$
|
187,457
|
|
|
$
|
141,675
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for FFO:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
328,565,734
|
|
|
297,730,206
|
|
|
315,837,012
|
|
|
289,427,430
|
|
|
Diluted
|
|
329,364,027
|
|
|
298,609,734
|
|
|
316,601,350
|
|
|
289,923,984
|
|
|
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
12/31/19
|
|
Ended
12/31/18
|
|
12/31/19
|
|
12/31/18
|
|
Net income available
to common stockholders
|
|
$
|
129,297
|
|
|
$
|
85,072
|
|
|
$
|
436,482
|
|
|
$
|
363,614
|
|
|
Cumulative
adjustments to calculate FFO (1)
|
|
151,099
|
|
|
132,671
|
|
|
603,109
|
|
|
539,643
|
|
|
FFO available to
common stockholders
|
|
280,396
|
|
|
217,743
|
|
|
1,039,591
|
|
|
903,257
|
|
|
Executive severance
charge (2)
|
|
—
|
|
|
18,651
|
|
|
—
|
|
|
18,651
|
|
|
Amortization of
share-based compensation
|
|
3,184
|
|
|
2,943
|
|
|
13,662
|
|
|
15,470
|
|
|
Amortization of
deferred financing costs (3)
|
|
1,283
|
|
|
1,119
|
|
|
4,754
|
|
|
3,991
|
|
|
Amortization of net
mortgage premiums
|
|
(354)
|
|
|
(354)
|
|
|
(1,415)
|
|
|
(1,520)
|
|
|
Loss (gain) on
interest rate swaps
|
|
694
|
|
|
331
|
|
|
2,752
|
|
|
(2,733)
|
|
|
Straight-line
payments from cross-currency swaps (4)
|
|
1,762
|
|
|
—
|
|
|
4,316
|
|
|
—
|
|
|
Leasing costs and
commissions
|
|
(222)
|
|
|
(1,076)
|
|
|
(2,102)
|
|
|
(3,907)
|
|
|
Recurring capital
expenditures
|
|
(224)
|
|
|
(555)
|
|
|
(801)
|
|
|
(1,084)
|
|
|
Straight-line
rent
|
|
(8,940)
|
|
|
(6,480)
|
|
|
(28,674)
|
|
|
(24,687)
|
|
|
Amortization of above
and below-market leases
|
|
6,109
|
|
|
4,427
|
|
|
19,336
|
|
|
16,852
|
|
|
Other adjustments
(5)
|
|
(1,702)
|
|
|
64
|
|
|
(1,404)
|
|
|
268
|
|
|
AFFO available to
common stockholders
|
|
$
|
281,986
|
|
|
$
|
236,813
|
|
|
$
|
1,050,015
|
|
|
$
|
924,558
|
|
|
AFFO allocable to
dilutive noncontrolling interests
|
|
378
|
|
|
487
|
|
|
1,442
|
|
|
901
|
|
|
Diluted
AFFO
|
|
$
|
282,364
|
|
|
$
|
237,300
|
|
|
$
|
1,051,457
|
|
|
$
|
925,459
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
Diluted
|
|
$
|
0.86
|
|
|
$
|
0.79
|
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
222,476
|
|
|
$
|
196,834
|
|
|
$
|
852,134
|
|
|
$
|
761,582
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
|
59,510
|
|
|
$
|
39,979
|
|
|
$
|
197,881
|
|
|
$
|
162,976
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares used for AFFO:
|
|
|
|
|
|
|
|
Basic
|
|
328,565,734
|
|
|
297,730,206
|
|
|
315,837,012
|
|
|
289,427,430
|
|
|
Diluted
|
|
329,364,027
|
|
|
298,609,734
|
|
|
316,601,350
|
|
|
289,923,984
|
|
|
|
|
(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)
|
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.
|
|
(5)
|
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 December 31,
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
129,297
|
|
|
$
|
85,072
|
|
|
$
|
60,852
|
|
|
$
|
85,671
|
|
|
$
|
76,171
|
|
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
156,467
|
|
|
137,553
|
|
|
126,915
|
|
|
117,580
|
|
|
105,537
|
|
|
Provisions for
impairment
|
|
8,950
|
|
|
1,235
|
|
|
6,679
|
|
|
3,709
|
|
|
1,378
|
|
|
Gain on sales of real
estate
|
|
(14,168)
|
|
|
(5,825)
|
|
|
(23,208)
|
|
|
(6,696)
|
|
|
(5,126)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(150)
|
|
|
(292)
|
|
|
(250)
|
|
|
(431)
|
|
|
(52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
280,396
|
|
|
$
|
217,743
|
|
|
$
|
170,988
|
|
|
$
|
199,833
|
|
|
$
|
177,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
0.85
|
|
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
0.77
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
|
$
|
281,986
|
|
|
$
|
236,813
|
|
|
$
|
215,312
|
|
|
$
|
192,964
|
|
|
$
|
170,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
|
0.86
|
|
|
$
|
0.79
|
|
|
$
|
0.76
|
|
|
$
|
0.75
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.681
|
|
|
$
|
0.662
|
|
|
$
|
0.636
|
|
|
$
|
0.606
|
|
|
$
|
0.572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
329,364,027
|
|
|
298,609,734
|
|
|
282,023,488
|
|
|
259,010,432
|
|
|
249,508,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
|
329,364,027
|
|
|
298,609,734
|
|
|
282,428,692
|
|
|
259,010,432
|
|
|
249,508,956
|
|
|
|
|
For the year ended
December 31,
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
|
436,482
|
|
|
$
|
363,614
|
|
|
$
|
301,514
|
|
|
$
|
288,491
|
|
|
$
|
256,686
|
|
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
593,396
|
|
|
539,130
|
|
|
498,231
|
|
|
449,196
|
|
|
408,404
|
|
|
Provisions for
impairment
|
|
40,186
|
|
|
26,269
|
|
|
14,751
|
|
|
20,664
|
|
|
10,560
|
|
|
Gain on sales of real
estate
|
|
(29,996)
|
|
|
(24,643)
|
|
|
(40,898)
|
|
|
(21,979)
|
|
|
(22,243)
|
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(477)
|
|
|
(1,113)
|
|
|
(933)
|
|
|
(977)
|
|
|
(970)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
1,039,591
|
|
|
$
|
903,257
|
|
|
$
|
772,665
|
|
|
$
|
735,395
|
|
|
$
|
652,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
3.29
|
|
|
$
|
3.12
|
|
|
$
|
2.82
|
|
|
$
|
2.88
|
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
|
$
|
1,050,015
|
|
|
$
|
924,558
|
|
|
$
|
838,638
|
|
|
$
|
736,374
|
|
|
$
|
647,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
|
3.32
|
|
|
$
|
3.19
|
|
|
$
|
3.06
|
|
|
$
|
2.88
|
|
|
$
|
2.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
2.711
|
|
|
$
|
2.631
|
|
|
$
|
2.527
|
|
|
$
|
2.392
|
|
|
$
|
2.271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
316,601,350
|
|
|
289,923,984
|
|
|
273,936,752
|
|
|
255,822,679
|
|
|
235,891,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
|
316,601,350
|
|
|
289,923,984
|
|
|
274,024,934
|
|
|
255,822,679
|
|
|
235,891,368
|
|
|
REALTY INCOME
CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(dollars in
thousands, except per share data) (unaudited)
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
ASSETS
|
|
|
|
|
|
Real estate, at
cost:
|
|
|
|
|
|
Land
|
|
$
|
5,684,034
|
|
|
$
|
4,682,660
|
|
|
Buildings and
improvements
|
|
13,833,882
|
|
|
11,858,806
|
|
|
Total real estate, at
cost
|
|
19,517,916
|
|
|
16,541,466
|
|
|
Less accumulated
depreciation and amortization
|
|
(3,117,919)
|
|
|
(2,714,534)
|
|
|
Net real estate held
for investment
|
|
16,399,997
|
|
|
13,826,932
|
|
|
Real estate held for
sale, net
|
|
96,775
|
|
|
16,585
|
|
|
Net real
estate
|
|
16,496,772
|
|
|
13,843,517
|
|
|
Cash and cash
equivalents
|
|
54,011
|
|
|
10,387
|
|
|
Accounts
receivable
|
|
181,969
|
|
|
144,991
|
|
|
Lease intangible
assets, net
|
|
1,493,383
|
|
|
1,199,597
|
|
|
Other assets,
net
|
|
328,661
|
|
|
61,991
|
|
|
Total
assets
|
|
$
|
18,554,796
|
|
|
$
|
15,260,483
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Distributions
payable
|
|
$
|
76,728
|
|
|
$
|
67,789
|
|
|
Accounts payable and
accrued expenses
|
|
177,039
|
|
|
133,765
|
|
|
Lease intangible
liabilities, net
|
|
333,103
|
|
|
310,866
|
|
|
Other
liabilities
|
|
262,221
|
|
|
127,109
|
|
|
Line of credit
payable
|
|
704,335
|
|
|
252,000
|
|
|
Term loans,
net
|
|
499,044
|
|
|
568,610
|
|
|
Mortgages payable,
net
|
|
410,119
|
|
|
302,569
|
|
|
Notes payable,
net
|
|
6,288,049
|
|
|
5,376,797
|
|
|
Total
liabilities
|
|
8,750,638
|
|
|
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, 333,619,106 shares issued and outstanding as of
December 31, 2019 and 370,100,000 shares authorized, 303,742,090
shares issued and outstanding as of December 31, 2018
|
|
12,873,849
|
|
|
10,754,495
|
|
|
Distributions in
excess of net income
|
|
(3,082,291)
|
|
|
(2,657,655)
|
|
|
Accumulated other
comprehensive loss
|
|
(17,102)
|
|
|
(8,098)
|
|
|
Total stockholders'
equity
|
|
9,774,456
|
|
|
8,088,742
|
|
|
Noncontrolling
interests
|
|
29,702
|
|
|
32,236
|
|
|
Total
equity
|
|
9,804,158
|
|
|
8,120,978
|
|
|
Total liabilities and
equity
|
|
$
|
18,554,796
|
|
|
$
|
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%)
|
|
2019
|
3.7%
|
|
21.1%
|
|
3.7%
|
|
28.7%
|
|
2.4%
|
|
25.3%
|
|
1.9%
|
|
31.5%
|
|
1.1%
|
|
35.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound Average
Annual Total Return (5)
|
|
16.5%
|
|
|
|
10.8%
|
|
|
|
10.7%
|
|
|
|
10.1%
|
|
|
|
10.3%
|
|
|
|
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 December 31, 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