SAN DIEGO, May 3, 2021 /PRNewswire/ -- Realty Income
Corporation (Realty Income, NYSE: O), The Monthly Dividend
Company®, today announced operating results for the
first quarter ended March 31, 2021.
All per share amounts presented in this press release are on a
diluted per common share basis unless stated otherwise.
COMPANY HIGHLIGHTS:
For the three months ended March 31,
2021:
- Net income per share was $0.26
- AFFO per share was $0.86
- Invested $1.03 billion in
properties and properties under development or expansion, including
$403.0 million in U.K.
properties
- Completed the early redemption on all $950.0 million in principal amount of our
outstanding 3.250% notes due October
2022
- Raised $670 million in net
proceeds from a common stock public offering of 12,075,000 shares,
inclusive of 1,575,000 shares purchased by the underwriters upon
exercise of their option to purchase additional shares
CEO Comments
"Our business momentum continues to illustrate the growth
opportunities afforded to us through a mix of investment verticals
in an increasingly diversified platform. Our pending merger with
VEREIT is consistent with this trajectory, as the transaction, once
completed, is expected to drive immediate earnings accretion,
create additional growth opportunities through enhanced size,
scale, and diversification, and allow for meaningful strategic and
financing synergies. Additionally, our continued success in the
U.K. gives us confidence in the portability of our business model
initiatives as One Team on behalf of our investors and clients,"
said Sumit Roy, Realty Income's
President and Chief Executive Officer. "I remain inspired by the
dedication and talent of our team who continues to execute across
our strategic initiatives. During the quarter, we invested over
$1.0 billion in properties with
attractive risk-adjusted yields, including nearly $403 million in the U.K. We are proud to have
eclipsed the $2.0 billion investment
mark in our U.K. portfolio within the first two years of our
initial acquisition abroad. Moreover, with our first investment in
Hawaii, our real estate portfolio
now reaches all U.S. states, demonstrating the size, scale, and
diversity of our platform. Further, in April we published our
inaugural Sustainability Report, which outlines our dedication to
embracing a changing world for the benefit of all those we
serve."
"Looking forward, our rent collections have improved and
stabilized, the business is well-positioned to capitalize on our
active global investment pipeline, and we finished the quarter with
approximately $2.5 billion of
liquidity and a net debt to EBITDAre ratio of 5.3x. We
remain on pace to meet our 2021 investment guidance of over
$3.25 billion."
Select Financial Results
The following summarizes our select financial results (dollars
in millions, except per share data):
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
Total
revenue
|
|
$
|
442.8
|
|
$
|
414.3
|
Net income available to
common stockholders (1)(2)
|
|
$
|
95.9
|
|
$
|
146.8
|
Net income per
share
|
|
$
|
0.26
|
|
$
|
0.44
|
Funds from operations
available to common stockholders (FFO) (2)(3)
|
|
$
|
267.7
|
|
$
|
277.1
|
FFO per
share
|
|
$
|
0.72
|
|
$
|
0.82
|
Adjusted funds from
operations available to common stockholders (AFFO)
(3)
|
|
$
|
318.2
|
|
$
|
297.2
|
AFFO per
share
|
|
$
|
0.86
|
|
$
|
0.88
|
(1)
|
The calculation to
determine net income attributable to common stockholders 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
available to common stockholders and period to period
comparisons.
|
(2)
|
Our financial results
during the three months ended March 31, 2021 were impacted by a
$46.5 million loss on extinguishment of debt due to the January
2021 early redemption of the 3.250% notes due October
2022.
|
(3)
|
FFO and AFFO are
non-GAAP financial measures. Please see the Glossary in our
supplemental materials for the three months ended March 31, 2021
for our definitions and explanations of how we utilize these
metrics. See pages 8 and 9 herein for reconciliations to the most
directly comparable GAAP measure.
|
Impact of COVID-19
Percentages of Contractual Rent Collected as of
March 31, 2021
|
Month
Ended
January 31,
2021
|
|
Month
Ended
February 28,
2021
|
|
Month
Ended
March 31,
2021
|
|
Quarter
Ended
March 31,
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual rent
collected (1) across total portfolio
|
93.9%
|
|
94.0%
|
|
94.3%
|
|
94.1%
|
Contractual rent
collected (1) from our top 20 clients
(2)
|
89.4%
|
|
89.8%
|
|
90.3%
|
|
89.8%
|
Contractual rent
collected (1) from our investment
grade clients (3)
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
Contractual rent
collected from our theater clients
|
13.3%
|
|
13.1%
|
|
15.5%
|
|
14.0%
|
Contractual rent
collected from our health and fitness clients
|
89.1%
|
|
92.3%
|
|
94.1%
|
|
91.8%
|
(1)
|
Collection rates are
calculated as the aggregate contractual rent collected for the
applicable period from the beginning of that applicable period
through March 31, 2021, divided by the contractual rent charged for
the applicable period. Rent collection percentages are calculated
based on contractual rents (excluding percentage rents and
contractually obligated reimbursements by our clients). Charged
amounts have not been adjusted for any COVID-19 related rent relief
granted and include contractual rents from any clients in
bankruptcy. Due to differences in applicable foreign currency
conversion rates and rent conventions, the percentages above may
differ from percentages calculated utilizing our total portfolio
annualized contractual rent.
|
(2)
|
We define our
top 20 clients as our 20 largest clients based on percentage of
total portfolio annualized contractual rent as of March 31, 2021
for all periods.
|
(3)
|
Please see the
Glossary in our supplemental materials for the three months ended
March 31, 2021 for our definition of our investment grade
clients.
|
We either have executed deferral agreements or maintain ongoing
deferral discussions with clients that account for a majority of
the unpaid contractual rent for each of the periods referenced in
the table above. Additional detail on rent collections can be found
in our supplemental materials available on our corporate website at
www.realtyincome.com/investors/financial-information/quarterly-results.
Theater Industry Update
As of March 31, 2021, the theater
industry represented 5.6% of annualized contractual rental revenue.
As of March 31, 2021, and
December 31, 2020, we were fully
reserved for 37 theater properties. At March
31, 2021, the receivables outstanding for our 79 theater
properties totaled $66.7 million, net
of $33.2 million of reserves, and includes $8.5 million of straight-line rent receivables,
net of $1.9 million of reserves. The
following table summarizes reserves recorded as a reduction of
rental revenue for theater properties (dollars in millions):
|
|
Three Months
Ended
|
|
|
March 31,
2021
|
Rental revenue
reserves
|
|
$
|
7.3
|
|
Straight-line rent
reserves
|
|
0.1
|
|
Total rental revenue
reserves
|
|
$
|
7.4
|
|
Additionally, we did not record any provisions for impairment on
theater properties for the three months ended March 31, 2021. See "Item 1A—Risk Factors" in
Part I of our Annual Report on Form 10-K for year ended
December 31, 2020 for more
information regarding the actual and potential future impacts of
the COVID-19 pandemic and the measures taken to limit its spread on
our clients and our business, results of operations, financial
condition and liquidity.
Dividend Increases
In March 2021, we announced the
94th consecutive quarterly dividend increase,
which is the 110th 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, 2021 was $2.82 per share. The amount of monthly dividends
paid per share increased 1.6% to $0.7035 for the three months ended March 31, 2021, as compared to $0.6925 for the three months ended March 31, 2020. During the three months ended
March 31, 2021, we distributed
$260.7 million in common dividends to
stockholders, representing 81.9% of its AFFO of $318.2 million.
Real Estate Portfolio Update
As of March 31, 2021, our
portfolio consisted of 6,662 properties located in all U.S. states,
Puerto Rico and the U.K., and
leased to approximately 600 clients doing business in 56 separate
industries. The properties are primarily freestanding and leased
under long-term net lease agreements with a weighted average
remaining lease term of approximately 8.9 years. Our portfolio
of commercial real estate has historically provided dependable
rental revenue supporting the payment of monthly dividends. As of
March 31, 2021, portfolio occupancy
was 98.0% with 131 properties available for lease or sale out of
6,662, as compared to 97.9% as of December 31, 2020 and 98.5%
as of March 31, 2020.
Changes in Occupancy
Three months ended
March 31, 2021
|
|
Properties available
for lease at December 31, 2020
|
140
|
|
Lease expirations
(1)
|
60
|
|
Re-leases to same
client
|
(37)
|
|
Re-leases to new
client
|
(13)
|
|
Vacant
dispositions
|
(19)
|
|
Properties available
for lease at March 31, 2021
|
131
|
|
(1)
|
Includes scheduled
and unscheduled expirations (including leases rejected in
bankruptcy), as well as future expirations resolved in the current
quarter.
|
The annual new rent on re-leases was $11.54 million, as compared to the previous
annual rent of $11.15 million on the
same units, representing a rent recapture rate of 103.5% on the
units re-leased during the three months ended March 31, 2021. We re-leased two units to new
clients without a period of vacancy, and 15 units to new clients
after a period of vacancy.
Investments in Real Estate
The following table summarizes our acquisitions in the U.S. and
U.K. for the periods indicated below:
|
Number
of
Properties
|
|
Leasable
Square
Feet
|
|
Investment
($ in
thousands)
|
|
Weighted
Average
Lease
Term
(Years)
|
|
Initial
Average
Cash
Lease
Yield
(1)
|
Three months ended
March 31, 2021
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
(in 25 states)
|
77
|
|
|
2,298,606
|
|
|
$
|
566,909
|
|
|
13.5
|
|
|
5.6
|
%
|
Acquisitions - U.K.
(2)
|
12
|
|
|
932,967
|
|
|
402,962
|
|
|
10.6
|
|
|
4.9
|
%
|
Total
acquisitions
|
89
|
|
|
3,231,573
|
|
|
$
|
969,871
|
|
|
12.4
|
|
|
5.3
|
%
|
Properties under
development - U.S.
|
21
|
|
|
1,597,165
|
|
|
57,931
|
|
|
15.5
|
|
|
5.6
|
%
|
Total
(3)
|
110
|
|
|
4,828,738
|
|
|
$
|
1,027,802
|
|
|
12.6
|
|
|
5.3
|
%
|
(1)
|
Initial average cash
lease yield is a supplemental operating measure. Please see the
Glossary in our supplemental materials for the three months ended
March 31, 2021 for our definition of this metric.
|
(2)
|
Represents
investments of £290.2 million Sterling during the three months
ended March 31, 2021 converted at the applicable exchange rate on
the date of acquisition.
|
(3)
|
Our clients occupying
the new properties operate in 23 industries and are 65.1% retail
and 34.9% industrial, based on rental revenue. Approximately 39% of
the rental revenue generated from acquisitions during the three
months ended March 31, 2021 is from our investment grade rated
clients, their subsidiaries or affiliated companies.
|
Same Store Rental Revenue
The following summarizes our same store rental revenue on 6,127
properties under lease (dollars in millions):
|
Three Months Ended
March 31,
|
|
Decrease
|
|
2021
|
|
2020
|
|
Three
Months
|
Rental
revenue
|
$
|
372.9
|
|
$
|
375.8
|
|
(0.8)
|
%
|
|
|
|
|
|
|
|
|
|
For purposes of comparability, same store rental revenue is
presented on a constant currency basis using the exchange rate as
of March 31, 2021 of 1.38 GBP/USD.
Our calculation of same store rental revenue includes rent
deferred for future payment as a result of lease concessions we
granted in response to the COVID-19 pandemic and recognized under
the practical expedient provided by the Financial Accounting
Standards Board (FASB). Same store rental revenue was negatively
impacted by reserves recorded as reductions of rental revenue of
$7.4 million for the three months
ended March 31, 2021 compared to
$819,000 for the three months ended
March 31, 2020. Our calculation of
same store rental revenue also includes uncollected rent for which
we have not granted a lease concession. If these applicable amounts
of rent deferrals and uncollected rent were excluded from our
calculation of same store rental revenue, the decreases for the
three months ended March 31, 2021
relative to the comparable period for 2020 would have been
(8.6)%.
Property Dispositions
The following summarizes our property dispositions (dollars in
millions):
|
Three Months
Ended
March 31,
2021
|
Properties
sold
|
27
|
Net sales
proceeds
|
$
|
34.7
|
Gain on sales of real
estate
|
$
|
8.4
|
|
|
|
|
Liquidity and Capital Markets
Equity Capital Raising
In January 2021, we raised
$670 million from the issuance of
12,075,000 shares of common stock in an underwritten public
offering, inclusive of 1,575,000 shares purchased by the
underwriters upon the exercise of their option to purchase
additional shares.
During the three months ended March 31,
2021, we raised $692 million
from the sale of common stock at a weighted average price of
$57.06 per share, primarily through
the underwritten public offering in January
2021.
Revolving Credit Facility and Commercial Paper
Program
We have a $3.0 billion unsecured
revolving credit facility, with an initial term that expires in
March 2023 (subject to two six-month
options to extend). The revolving credit facility also has a
$1.0 billion accordion feature, which
is subject to obtaining lender commitments. As of March 31, 2021, there were no borrowings on our
revolving credit facility. In addition, we had a cash balance of
$184.0 million.
Additionally, we have a U.S. dollar-denominated unsecured
commercial paper program. Under the terms of this program, we may
issue unsecured commercial paper notes up to a maximum aggregate
amount outstanding of $1.0 billion,
with proceeds used for general corporate purposes. We use our
unsecured revolving credit facility as a liquidity backstop for the
repayment of the notes issued under this program. As of
March 31, 2021, we had $675.0 million in commercial paper
borrowings.
Early Redemption of 3.250% Notes Due 2022
In January 2021, we completed the
early redemption on all $950.0
million in principal amount of our outstanding 3.250% notes
due October 2022, plus accrued and
unpaid interest. As a result of the early redemption, we recognized
a loss on extinguishment of debt of $46.5
million, or $0.13 per diluted
common share, to net income available to common stockholders and
Nareit-defined FFO in the three months ended March 31, 2021. Loss on extinguishment of debt is
excluded in our calculation of AFFO.
2021 Earnings Guidance
We estimate FFO per share for 2021 of $3.26 to $3.34,
inclusive of a $0.13 per share loss
due to the early redemption of our 3.250% notes due October 2022. We estimate AFFO per share for 2021
of $3.44 to $3.49, an increase of 1.5% to 2.9% over 2020 AFFO
per share of $3.39. Summarized below
are approximate estimates of the key components of our 2021
earnings guidance, which do not give effect to the announced merger
between us and VEREIT, Inc.:
|
2021
Guidance
|
Net income per
share
|
$1.19 to
$1.27
|
Real estate
depreciation and impairments per share
|
$2.13
|
Gains on sales of
properties per share
|
$(0.06)
|
FFO per
share
|
$3.26 to
$3.34
|
AFFO per
share
|
$3.44 to
$3.49
|
Same store rent
growth (1)
|
0.5% to
1.0%
|
Occupancy
|
~ 98%
|
Cash G&A expenses
(% of revenues) (2)(3)
|
~ 4.5%
|
Property expenses
(non-reimbursable) (% of revenues) (2)
|
1.5% -
2.0%
|
Income tax
expenses
|
~ $20
million
|
Acquisition
volume
|
Over $3.25
billion
|
(1) Includes rent deferred for future
payment as a result of lease concessions we granted in response to
the COVID-19 pandemic.
|
(2) Revenue excludes contractually
obligated reimbursements by our clients. Cash G&A excludes
stock-based compensation expense.
|
(3) G&A inclusive of stock-based
compensation expense as a percentage of rental revenue, excluding
reimbursements, is expected to be approximately 5% in
2021.
|
Conference Call Information
In conjunction with the release of our operating results, we
will host a conference call on May 4,
2021 at 11:30 a.m. PT to
discuss the results. To access the conference, dial (877) 701-6180
(United States) or (647) 689-4069
(International). When prompted, provide the conference ID
7659455.
A telephone replay of the conference call can also be accessed
by calling (800) 585-8367 and entering the conference ID
7659455. The telephone replay will be available through
May 18, 2021.
A live webcast will be available in listen-only mode by clicking
on the webcast link on our 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 materials on our operating results for the three
months ended March 31, 2021,
including reconciliations for non-GAAP measures within the
Glossary, are available on our corporate website at
www.realtyincome.com/investors/financial-information/quarterly-results.
The Sustainability Report for the year ended December 31, 2020 is available on our corporate
website at www.realtyincome.com/corporate-responsibility.
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
6,600 real estate properties owned under long-term lease agreements
with our commercial clients. To date, the company has declared 610
consecutive common stock monthly dividends throughout its 52-year
operating history and increased the dividend 110 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 our
actual future results to differ materially from expected results.
These risks include, among others, general economic conditions,
domestic and foreign real estate conditions, client financial
health, the availability of capital to finance planned growth,
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, the
structure, timing and completion of the announced mergers between
us and VEREIT, Inc. and any effects of the announcement, pendency
or completion of the announced mergers, including the anticipated
benefits therefrom, charges for property impairments, the effects
of the COVID-19 pandemic and the measures taken to limit its
impact, the effects of pandemics or global outbreaks of contagious
diseases or fear of such outbreaks, our clients' ability to
adequately manage their properties and fulfill their respective
lease obligations to us, and the outcome of any legal proceedings
to which the we are a party, as described in our filings with the
Securities and Exchange Commission. Consequently, forward-looking
statements should be regarded solely as reflections of our current
operating plans and estimates. Actual operating results may differ
materially from what is expressed or forecast in this press
release. We undertake 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
|
|
|
Ended
3/31/21
|
|
Ended
3/31/20
|
REVENUE
|
|
|
|
|
Rental (including
reimbursable) (1)
|
|
$
|
439,365
|
|
|
$
|
412,157
|
|
Other
|
|
3,439
|
|
|
2,184
|
|
Total
revenue
|
|
442,804
|
|
|
414,341
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
Depreciation and
amortization
|
|
177,985
|
|
|
164,585
|
|
Interest
|
|
73,075
|
|
|
75,925
|
|
Property (including
reimbursable)
|
|
28,499
|
|
|
25,606
|
|
General and
administrative
|
|
20,796
|
|
|
20,964
|
|
Income taxes
|
|
6,225
|
|
|
2,763
|
|
Provisions for
impairment
|
|
2,720
|
|
|
4,478
|
|
Total
expenses
|
|
309,300
|
|
|
294,321
|
|
Gain on sales of real
estate
|
|
8,401
|
|
|
38,506
|
|
Foreign currency and
derivative gains (losses), net
|
|
804
|
|
|
(1,564)
|
|
Loss on extinguishment
of debt
|
|
(46,473)
|
|
|
(9,819)
|
|
Net income
|
|
96,236
|
|
|
147,143
|
|
Net income attributable
to noncontrolling interests
|
|
(296)
|
|
|
(316)
|
|
Net income available to
common stockholders
|
|
$
|
95,940
|
|
|
$
|
146,827
|
|
|
|
|
|
|
Funds from operations
available to common stockholders (FFO)
|
|
$
|
267,707
|
|
|
$
|
277,104
|
|
Adjusted funds from
operations available to common stockholders (AFFO)
|
|
$
|
318,222
|
|
|
$
|
297,223
|
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
Net income:
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.26
|
|
|
$
|
0.44
|
|
|
|
|
|
|
FFO:
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.72
|
|
|
$
|
0.82
|
|
|
|
|
|
|
AFFO:
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.86
|
|
|
$
|
0.88
|
|
|
|
|
|
|
Cash dividends paid per
common share
|
|
$
|
0.7035
|
|
|
$
|
0.6925
|
|
(1)
|
We recorded reserves
as a reduction of rental revenue of $8.8 million (of which $451,000
was related to straight-line rent receivables) for the three months
ended March 31, 2021 and $1.8 million (of which $671,000 was
related to straight-line receivables) for the three months ended
March 31, 2020. Unless otherwise specified, references to reserves
recorded as a reduction of rental revenue include amounts reserved
for in the current period, as well as unrecognized contractual
rental revenue and unrecognized straight-line rental revenue for
leases accounted for on a cash basis.
|
FUNDS FROM
OPERATIONS (FFO)
(dollars in thousands, except per share amounts)
|
|
FFO is a non-GAAP
financial measure. Please see the Glossary in our supplemental
materials for the three months ended March 31, 2021 for our
definition and an explanation of how we utilize this
metric.
|
|
|
|
Three
Months
|
|
Three
Months
|
|
|
Ended
3/31/21
|
|
Ended
3/31/20
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
|
95,940
|
|
|
$
|
146,827
|
|
Depreciation and
amortization
|
|
177,985
|
|
|
164,585
|
|
Depreciation of
furniture, fixtures and equipment
|
|
(371)
|
|
|
(126)
|
|
Provisions for
impairment
|
|
2,720
|
|
|
4,478
|
|
Gain on sales of real
estate
|
|
(8,401)
|
|
|
(38,506)
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(166)
|
|
|
(154)
|
|
FFO available to common
stockholders
|
|
$
|
267,707
|
|
|
$
|
277,104
|
|
FFO allocable to
dilutive noncontrolling interests
|
|
—
|
|
|
369
|
|
Diluted FFO
|
|
$
|
267,707
|
|
|
$
|
277,473
|
|
|
|
|
|
|
FFO per common
share:
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.72
|
|
|
$
|
0.82
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
260,697
|
|
|
$
|
233,824
|
|
|
|
|
|
|
FFO available to common
stockholders in excess of distributions paid to common
stockholders
|
|
$
|
7,010
|
|
|
$
|
43,280
|
|
|
|
|
|
|
Weighted average number
of common shares used for FFO:
|
|
|
|
|
Basic
|
|
371,522,607
|
|
|
336,624,567
|
|
Diluted
|
|
371,601,901
|
|
|
337,439,634
|
|
ADJUSTED FUNDS
FROM OPERATIONS (AFFO)
(dollars in thousands, except per share amounts)
|
|
AFFO is a non-GAAP
financial measure. Please see the Glossary in our supplemental
materials for the three months ended March 31, 2021 for our
definition and an explanation of how we utilize this
metric.
|
|
|
|
Three
Months
|
|
Three
Months
|
|
|
Ended
3/31/21
|
|
Ended
3/31/20
|
Net income available to
common stockholders (1)
|
|
$
|
95,940
|
|
|
$
|
146,827
|
|
Cumulative adjustments
to calculate FFO (2)
|
|
171,767
|
|
|
130,277
|
|
FFO available to common
stockholders
|
|
267,707
|
|
|
277,104
|
|
Executive
severance charge (3)
|
|
—
|
|
|
3,463
|
|
Loss on
extinguishment of debt
|
|
46,473
|
|
|
9,819
|
|
Amortization of
share-based compensation
|
|
3,697
|
|
|
3,742
|
|
Amortization of
deferred financing costs (4)
|
|
1,665
|
|
|
1,360
|
|
Amortization of net
mortgage premiums
|
|
(280)
|
|
|
(354)
|
|
Loss on interest rate
swaps
|
|
722
|
|
|
686
|
|
Straight-line payments
from cross-currency swaps (5)
|
|
618
|
|
|
723
|
|
Leasing costs and
commissions
|
|
(706)
|
|
|
(138)
|
|
Recurring capital
expenditures
|
|
(23)
|
|
|
—
|
|
Straight-line
rent
|
|
(10,463)
|
|
|
(7,782)
|
|
Amortization of above
and below-market leases, net
|
|
9,300
|
|
|
6,430
|
|
Other adjustments
(6)
|
|
(488)
|
|
|
2,170
|
|
AFFO available to
common stockholders
|
|
$
|
318,222
|
|
|
$
|
297,223
|
|
AFFO allocable to
dilutive noncontrolling interests
|
|
351
|
|
|
376
|
|
Diluted AFFO
|
|
$
|
318,573
|
|
|
$
|
297,599
|
|
|
|
|
|
|
AFFO per common
share:
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.86
|
|
|
$
|
0.88
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
|
260,697
|
|
|
$
|
233,824
|
|
|
|
|
|
|
AFFO available to
common stockholders in excess of distributions paid to common
stockholders
|
|
$
|
57,525
|
|
|
$
|
63,399
|
|
|
|
|
|
|
Weighted average number
of common shares used for AFFO:
|
|
|
Basic
|
|
371,522,607
|
|
|
336,624,567
|
|
Diluted
|
|
372,065,020
|
|
|
337,439,634
|
|
(1)
|
As of March 31, 2021,
there was $22.3 million of uncollected rent deferred as a result of
lease concessions we granted in response to the COVID-19 pandemic
and recognized under the practical expedient provided by the FASB
and $69.8 million of uncollected rent for which we have not granted
a lease concession. As the COVID-19 pandemic did not affect our
rent collections until April 2020, there was no related impact for
the three months ended March 31, 2020.
|
(2)
|
See FFO calculation
on page eight for reconciling items.
|
(3)
|
The executive
severance charge represents the incremental costs incurred upon our
former CFO's departure in March 2020, consisting of $1.6 million of
cash, $1.8 million of share-based compensation expense and $58,000
of professional fees.
|
(4)
|
Includes the
amortization of costs incurred and capitalized upon issuance of our
notes payable, assumption of our mortgages payable and issuance of
our current and previous term loans. The deferred financing costs
are being amortized over the lives of the respective notes payable,
mortgages and term loan. No costs associated with our credit
facility agreements or annual fees paid to credit rating agencies
have been included.
|
(5)
|
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.
|
(6)
|
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 March 31,
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
|
95,940
|
|
|
$
|
146,827
|
|
|
$
|
110,942
|
|
|
$
|
83,163
|
|
|
$
|
71,586
|
|
Depreciation and
amortization, net of furniture, fixtures and equipment
|
|
177,614
|
|
|
164,459
|
|
|
137,362
|
|
|
130,944
|
|
|
120,940
|
|
Provisions for
impairment
|
|
2,720
|
|
|
4,478
|
|
|
4,672
|
|
|
14,221
|
|
|
5,433
|
|
Gain on sales of real
estate
|
|
(8,401)
|
|
|
(38,506)
|
|
|
(7,263)
|
|
|
(3,218)
|
|
|
(10,532)
|
|
FFO adjustments
allocable to noncontrolling interests
|
|
(166)
|
|
|
(154)
|
|
|
(38)
|
|
|
(228)
|
|
|
(214)
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
$
|
267,707
|
|
|
$
|
277,104
|
|
|
$
|
245,675
|
|
|
$
|
224,882
|
|
|
$
|
187,213
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
0.72
|
|
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
|
|
$
|
318,222
|
|
|
$
|
297,223
|
|
|
$
|
248,734
|
|
|
$
|
224,560
|
|
|
$
|
201,336
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
|
0.86
|
|
|
$
|
0.88
|
|
|
$
|
0.82
|
|
|
$
|
0.79
|
|
|
$
|
0.76
|
|
|
|
|
|
.
|
|
|
|
|
|
|
Cash dividends paid per
share
|
|
$
|
0.7035
|
|
|
$
|
0.6925
|
|
|
$
|
0.6720
|
|
|
$
|
0.6505
|
|
|
$
|
0.6235
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
371,601,901
|
|
|
337,439,634
|
|
|
303,819,878
|
|
|
284,345,328
|
|
|
263,934,304
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - AFFO
|
|
372,065,020
|
|
|
337,439,634
|
|
|
303,819,878
|
|
|
284,345,328
|
|
|
264,022,486
|
|
REALTY INCOME
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share and share count data)
(unaudited)
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
|
Real estate held for
investment, at cost:
|
|
|
|
|
Land
|
|
$
|
6,672,885
|
|
|
$
|
6,318,926
|
|
Buildings and
improvements
|
|
15,171,070
|
|
|
14,696,712
|
|
Total real estate held
for investment, at cost
|
|
21,843,955
|
|
|
21,015,638
|
|
Less accumulated
depreciation and amortization
|
|
(3,668,269)
|
|
|
(3,549,486)
|
|
Real estate held for
investment, net
|
|
18,175,686
|
|
|
17,466,152
|
|
Real estate and lease
intangibles held for sale, net
|
|
22,500
|
|
|
19,004
|
|
Cash and cash
equivalents
|
|
183,984
|
|
|
824,476
|
|
Accounts receivable,
net
|
|
307,017
|
|
|
285,701
|
|
Lease intangible
assets, net
|
|
1,820,146
|
|
|
1,710,655
|
|
Other assets,
net
|
|
470,237
|
|
|
434,297
|
|
Total
assets
|
|
$
|
20,979,570
|
|
|
$
|
20,740,285
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Distributions
payable
|
|
$
|
88,662
|
|
|
$
|
85,691
|
|
Accounts payable and
accrued expenses
|
|
200,168
|
|
|
241,336
|
|
Lease intangible
liabilities, net
|
|
313,907
|
|
|
321,198
|
|
Other
liabilities
|
|
277,325
|
|
|
256,863
|
|
Line of credit payable
and commercial paper
|
|
675,000
|
|
|
—
|
|
Term loan,
net
|
|
249,407
|
|
|
249,358
|
|
Mortgages payable,
net
|
|
282,037
|
|
|
300,360
|
|
Notes payable,
net
|
|
7,326,051
|
|
|
8,267,749
|
|
Total
liabilities
|
|
9,412,557
|
|
|
9,722,555
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock and paid in capital, par value $0.01 per share,
740,200,000 shares authorized,
373,509,822 and 361,303,445
shares issued and outstanding as of
March 31, 2021 and
December 31, 2020,
respectively
|
|
15,371,016
|
|
|
14,700,050
|
|
Distributions in excess
of net income
|
|
(3,827,660)
|
|
|
(3,659,933)
|
|
Accumulated other
comprehensive loss
|
|
(8,484)
|
|
|
(54,634)
|
|
Total stockholders'
equity
|
|
11,534,872
|
|
|
10,985,483
|
|
Noncontrolling
interests
|
|
32,141
|
|
|
32,247
|
|
Total
equity
|
|
11,567,013
|
|
|
11,017,730
|
|
Total liabilities and
equity
|
|
$
|
20,979,570
|
|
|
$
|
20,740,285
|
|
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%
|
2020
|
4.5%
|
|
(11.8%)
|
|
3.6%
|
|
(5.1%)
|
|
1.9%
|
|
9.7%
|
|
1.5%
|
|
18.4%
|
|
0.9%
|
|
43.6%
|
YTD 2021
|
4.4%
|
|
3.3%
|
|
3.3%
|
|
8.3%
|
|
1.9%
|
|
8.3%
|
|
1.4%
|
|
6.2%
|
|
0.7%
|
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound
Average
Annual Total
Return (5)
|
|
15.2%
|
|
|
|
10.4%
|
|
|
|
10.9%
|
|
|
|
10.5%
|
|
|
|
11.4%
|
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
for each period from Realty Income's NYSE listing on October 18,
1994 through March 31, 2021, 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