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Realty Income Announces Operating Results for the Three and Nine Months Ended September 30, 2024

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Realty Income reported Q3 2024 operating results with net income of $261.8 million ($0.30 per share) and AFFO of $915.6 million ($1.05 per share). The company invested $740.1 million at a 7.4% initial weighted average cash yield and maintained a 98.7% portfolio occupancy. They achieved a 105.0% rent recapture rate on re-leased properties. The company increased its 2024 investment volume guidance to $3.5 billion and raised AFFO guidance to $4.17-$4.21 per share. Notable capital activities included raising $271.0 million from stock sales and issuing $500.0 million of senior unsecured notes due 2054, along with £700.0 million in UK notes.

Realty Income ha riportato i risultati operativi del Q3 2024 con un utile netto di 261,8 milioni di dollari (0,30 dollari per azione) e un AFFO di 915,6 milioni di dollari (1,05 dollari per azione). L'azienda ha investito 740,1 milioni di dollari con un rendimento medio ponderato iniziale del 7,4% e ha mantenuto un'occupazione del portafoglio del 98,7%. Hanno raggiunto un tasso di recupero degli affitti del 105,0% su proprietà rilasciate. L'azienda ha aumentato le previsioni di volume di investimento per il 2024 a 3,5 miliardi di dollari e ha alzato le stime dell'AFFO a 4,17-4,21 dollari per azione. Le attività di capitale più significative hanno incluso la raccolta di 271,0 milioni di dollari tramite vendite di azioni e l'emissione di 500,0 milioni di dollari di obbligazioni senior non garantite con scadenza nel 2054, insieme a 700,0 milioni di sterline in note nel Regno Unito.

Realty Income informó los resultados operativos del Q3 2024 con un ingreso neto de 261,8 millones de dólares (0,30 dólares por acción) y un AFFO de 915,6 millones de dólares (1,05 dólares por acción). La empresa invirtió 740,1 millones de dólares a un rendimiento promedio ponderado inicial del 7,4% y mantuvo una ocupación de cartera del 98,7%. Lograron una tasa de recuperación de alquiler del 105,0% en propiedades re-alquiladas. La empresa aumentó su orientación de volumen de inversión para 2024 a 3,5 mil millones de dólares y elevó la guía de AFFO a 4,17-4,21 dólares por acción. Las actividades de capital notables incluyeron la recaudación de 271,0 millones de dólares a través de ventas de acciones y la emisión de 500,0 millones de dólares en notas senior no garantizadas con vencimiento en 2054, junto con 700,0 millones de libras en notas del Reino Unido.

Realty Income은 2024년 3분기 운영 결과를 보고하며 순이익이 2억 6,180만 달러(주당 0.30 달러)AFFO가 9억 1,560만 달러(주당 1.05 달러)이라고 발표했습니다. 회사는 7.4%의 초기 가중 평균 현금 수익률로 7억 4,010만 달러를 투자했으며 98.7%의 포트폴리오 점유율을 유지했습니다. 그들은 재임대한 자산에서 105.0%의 임대 회수율을 달성했습니다. 회사는 2024년 투자 예상치를 35억 달러로 상향 조정하고 AFFO 예상치를 주당 4.17-4.21 달러로 늘렸습니다. 주요 자본 활동으로는 주식 판매로 2억 7,100만 달러를 모금하고, 2054년에 만기되는 5억 달러의 고위험 무담보 채권을 발행하고, 영국에서 7억 파운드의 채권을 발행한 것이 포함됩니다.

Realty Income a publié ses résultats opérationnels pour le T3 2024 avec un revenu net de 261,8 millions de dollars (0,30 dollar par action) et un AFFO de 915,6 millions de dollars (1,05 dollar par action). L'entreprise a investi 740,1 millions de dollars avec un rendement moyen pondéré initial de 7,4 % et a maintenu un taux d'occupation de portefeuille de 98,7 %. Ils ont atteint un taux de récupération de loyer de 105,0 % sur les propriétés relouées. L'entreprise a augmenté ses prévisions de volume d'investissement pour 2024 à 3,5 milliards de dollars et a relevé les prévisions d'AFFO à 4,17-4,21 dollars par action. Les activités de capital notables comprenaient la levée de 271,0 millions de dollars par la vente d'actions et l'émission de 500,0 millions de dollars de billets non garantis à échéance en 2054, ainsi que 700,0 millions de livres en obligations au Royaume-Uni.

Realty Income berichtete über die operativen Ergebnisse des Q3 2024 mit einem Nettogewinn von 261,8 Millionen Dollar (0,30 Dollar pro Aktie) und einem AFFO von 915,6 Millionen Dollar (1,05 Dollar pro Aktie). Das Unternehmen investierte 740,1 Millionen Dollar mit einer anfänglichen gewichteten durchschnittlichen Cash-Rendite von 7,4 % und erzielte eine Portfoliobelegung von 98,7 %. Sie erreichten eine Miet-Rückgewinnungsquote von 105,0 % bei neu vermieteten Objekten. Das Unternehmen hob seine Investitionsschätzung für 2024 auf 3,5 Milliarden Dollar an und erhöhte die AFFO-Prognose auf 4,17-4,21 Dollar pro Aktie. Bemerkenswerte Kapitalaktivitäten umfassten die Beschaffung von 271,0 Millionen Dollar durch Aktienverkäufe und die Emission von 500,0 Millionen Dollar unbesicherter Anleihen mit Fälligkeit im Jahr 2054 sowie 700,0 Millionen Pfund in UK-Anleihen.

Positive
  • AFFO per share increased to $1.05 from $1.02 year-over-year
  • Portfolio occupancy remains strong at 98.7%
  • Achieved 105.0% rent recapture rate on re-leased properties
  • Raised 2024 AFFO guidance to $4.17-$4.21 per share
  • Increased 2024 investment volume guidance to $3.5 billion
Negative
  • Net income per share decreased to $0.30 from $0.33 year-over-year
  • FFO per share declined to $0.98 from $1.04 year-over-year
  • Same store rental revenue growth was minimal at 0.2% for Q3

Insights

The Q3 2024 results demonstrate solid financial performance with key metrics showing growth. AFFO per share increased to $1.05 from $1.02 year-over-year, while maintaining a healthy portfolio occupancy of 98.7%. The company invested $740.1 million at an attractive initial yield of 7.4%.

Notable strengths include a strong rent recapture rate of 105% on re-leased properties and raised 2024 investment volume guidance to $3.5 billion. The company maintains robust liquidity of $5.2 billion and a conservative leverage ratio of 5.4x. The increased AFFO guidance range of $4.17 to $4.21 per share reflects 4.8% growth at midpoint.

The successful issuance of $500 million in notes and £700 million in sterling-denominated debt demonstrates strong access to capital markets, though at higher rates reflecting the current interest rate environment.

SAN DIEGO, Nov. 4, 2024 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced operating results for the three and nine months ended September 30, 2024. 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 September 30, 2024:

  • Net income available to common stockholders was $261.8 million, or $0.30 per share
  • AFFO available to common shareholders was $915.6 million, or $1.05 per share
  • Invested $740.1 million at an initial weighted average cash yield of 7.4%
  • Net Debt to Annualized Pro Forma Adjusted EBITDAre was 5.4x
  • Raised $271.0 million from the sale of common stock, primarily through our At-The-Market (ATM) program, at a weighted average price of $62.25
  • ATM forward agreements for a total of 17.0 million shares remain unsettled with total expected net proceeds of approximately $968.7 million, of which 0.2 million shares were executed in October 2024
  • Issued $500.0 million of 5.375% senior unsecured notes due 2054, £350.0 million of 5.000% senior unsecured notes due 2029, and £350.0 million of 5.250% senior unsecured notes due 2041
  • Achieved a rent recapture rate of 105.0% on properties re-leased
  • Celebrated our 30-year anniversary as a New York Stock Exchange ("NYSE") listed company

CEO Comments

"Our third quarter results reflect disciplined execution of our strategy and the inherent benefits of our global platform," said Sumit Roy, Realty Income's President and Chief Executive Officer. "Supported by improvements in the investment environment and solid operating results, we see a robust pipeline of opportunities. As a result, we're pleased to increase our 2024 investment volume guidance to approximately $3.5 billion and raise the low-end of our AFFO per share guidance to a range of $4.17 to $4.21 per share, reflecting a 4.8% growth at the mid-point of the range. Looking ahead, Realty Income is pursuing a wide range of growth opportunities, including capital diversification initiatives to further enhance the reach and scale of our proven platform."

Select Financial Results

The following summarizes our select financial results (dollars in millions, except per share data).



Three months ended

September 30,


Nine months ended

 September 30,



2024


2023


2024


2023

Total revenue


$                1,330.9


$                1,039.1


$                3,930.8


$                3,002.7

Net income available to common stockholders (1) (2)


$                   261.8


$                   233.5


$                   648.3


$                   653.9

Net income per share


$                     0.30


$                     0.33


$                     0.75


$                     0.96

Funds from operations available to

common stockholders (FFO) (3)


$                   854.9


$                   736.1


$                2,569.7


$                2,108.4

FFO per share 


$                     0.98


$                     1.04


$                     2.99


$                     3.09

Normalized funds from operations available to common

 stockholders (Normalized FFO) (3)


$                   863.5


$                   739.0


$                2,675.2


$                2,113.0

Normalized FFO per share


$                     0.99


$                     1.04


$                     3.11


$                     3.10

Adjusted funds from operations available to common

 stockholders (AFFO) (3)


$                   915.6


$                   721.4


$                2,699.5


$                2,043.8

AFFO per share


$                     1.05


$                     1.02


$                     3.14


$                     2.99



(1)

The calculation to determine net income attributable to common stockholders includes provisions for impairment, gain on sales of real estate, and foreign currency gain and loss. These items can vary from quarter to quarter and can significantly impact net income available to common stockholders and period to period comparisons.

(2)

Our financial results during the three and nine months ended September 30, 2024 were impacted by the following: (i) merger, transaction, and other costs of $8.6 million and $105.5 million, respectively, and (ii) provisions for impairment of $96.9 million and $282.9 million, respectively.

(3)

FFO, Normalized FFO, and AFFO are non-GAAP financial measures. Normalized FFO is based on FFO and adjusted to exclude merger, transaction, and other costs and AFFO further adjusts Normalized FFO for unique revenue and expense items. Please see the Glossary for our definitions and explanations of how we utilize these metrics. Please see pages 10 and 11 herein for reconciliations to the most directly comparable GAAP measure.

Dividend Increases 

In September 2024, we announced the 108th consecutive quarterly dividend increase, which is the 127th increase since our listing on the NYSE in 1994. The annualized dividend amount as of September 30, 2024 was $3.162 per share. The amount of monthly dividends paid per share increased 2.9% to $0.789 during the three months ended September 30, 2024, as compared to $0.767 for the same period in 2023, representing 75.1% of our diluted AFFO per share of $1.05 during the three months ended September 30, 2024.

Real Estate Portfolio Update

As of September 30, 2024, we owned or held interests in 15,457 properties, which were leased to 1,552 clients doing business in 90 industries. Our diversified portfolio of commercial properties under long-term, net lease agreements is actively managed with a weighted average remaining lease term of approximately 9.4 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of September 30, 2024, portfolio occupancy was 98.7% with 196 properties available for lease or sale, as compared to 98.8% for both periods as of June 30, 2024 and September 30, 2023, respectively. Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending and include properties owned by unconsolidated joint ventures. Below is a summary of our portfolio activity for the periods indicated below:

Changes in Occupancy

Three months ended September 30, 2024


Properties available for lease at June 30, 2024

185

Lease expirations (1)

212

Re-leases to same client

(131)

Re-leases to new client

(11)

Vacant dispositions

(59)

Properties available for lease at September 30, 2024

196



Nine months ended September 30, 2024


Properties available for lease at December 31, 2023

193

Lease expirations (1)

642

Re-leases to same client

(441)

Re-leases to new client

(32)

Vacant dispositions

(166)

Properties available for lease at September 30, 2024

196



(1)

Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.

During the three months ended September 30, 2024, the new annualized contractual rent on re-leases was $38.41 million, as compared to the previous annual rent of $36.57 million on the same units, representing a rent recapture rate of 105.0% on the units re-leased. We re-leased two units to new clients without a period of vacancy, and 14 units to new clients after a period of vacancy. Please see the Glossary for our definition of annualized contractual rent.

During the nine months ended September 30, 2024, the new annualized contractual rent on re-leases was $131.50 million, as compared to the previous annual rent of $125.39 million on the same units, representing a rent recapture rate of 104.9% on the units re-leased. We re-leased 16 units to new clients without a period of vacancy, and 29 units to new clients after a period of vacancy.

Investment Summary

The following table summarizes our investments in the U.S. and Europe for the periods indicated below:


Number of

Properties


Investment

($ in millions)


Leasable

Square Feet

(in thousands)


Initial
Weighted
Average

Cash Yield (1)


Weighted

Average Term

(Years)

Three months ended September 30, 2024










Acquisitions - U.S. real estate

67


$               267.2


1,651


7.4 %


10.0

Acquisitions - Europe real estate

15


326.5


893


7.3 %


7.5

Total real estate acquisitions

82


$               593.7


2,544


7.4 %


8.6

Real estate properties under development (2)

87


146.4


5,127


7.5 %


15.6

Total investments (3)

169


$               740.1


7,671


7.4 %


10.0











Nine months ended September 30, 2024










Acquisitions - U.S. real estate

87


$               414.3


2,370


7.5 %


13.4

Acquisitions - Europe real estate

29


744.4


2,457


7.8 %


6.8

Total real estate acquisitions

116


$            1,158.7


4,827


7.7 %


9.1

Real estate properties under development (2)

184


607.7


6,671


7.3 %


15.1

Other investments (4)


377.5



8.1 %


6.0

Total investments (5)

300


$            2,143.9


11,498


7.7 %


10.1



(1)

Initial weighted average cash yield is a supplemental operating measure. Cash income used in the calculation of initial weighted average cash yield for investments for the three and nine months ended September 30, 2024 includes $0.7 million and $1.2 million, respectively, received as settlement credits as reimbursement of free rent periods. Please see the Glossary for our definitions of Initial Weighted Average Cash Yield and Cash Income.

(2)

The three months ended September 30, 2024 includes £15.4 million of Sterling-denominated investments, €14.3 million of Euro-denominated investments, and $6.5 million of investments in an unconsolidated U.S. data center joint venture, converted at the applicable exchange rates on the funding dates. The nine months ended September 30, 2024 includes £50.6 million of Sterling-denominated investments, €38.9 million of Euro-denominated investments, and $58.7 million of investments in an unconsolidated U.S. data center joint venture, converted at the applicable exchange rates on the funding dates.

(3)

Clients we have invested in are 82.3% retail, 16.8% industrial, and 0.9% other based on cash income. Approximately 25% of the annualized cash income generated from acquisitions was from investment grade rated clients, their subsidiaries or affiliated companies at the date of acquisition. Please see the Glossary for our definition of Investment Grade Clients and Cash Income.

(4)

For the nine months ended September 30, 2024, other investments relate to an investment in a senior secured note issued by a parent company of Asda based in the U.K.

(5)

Clients we have invested in are 85.6% retail, 11.9% industrial, and 2.5% other based on cash income. Approximately 25% of the annualized cash income generated from acquisitions was from investment grade rated clients, their subsidiaries or affiliated companies at the date of acquisition.

Same Store Rental Revenue

The following summarizes our same store rental revenue for 13,499 and 11,574 properties under lease for the three and nine months ended September 30, 2024, respectively (dollars in millions):


Three months ended

September 30,


Nine months ended

 September 30,


% Increase


2024


2023


2024


2023


Three Months


Nine Months

Same store rental revenue

$            1,001.9


$               999.6


$            2,518.5


$            2,511.3


0.2 %


0.3 %

For purposes of comparability, same store rental revenue is presented on a constant currency basis using the applicable exchange rate as of September 30, 2024. None of the properties in France, Germany, Ireland or Portugal met our Same Store Pool definition for the periods presented. Beginning with the second quarter of 2024, properties acquired through the merger with Spirit Realty Capital, Inc. ("Spirit") were considered under each element of our Same Store Pool criteria, except for the requirement that the property be owned for the full comparative period. If the property was owned by Spirit for the full comparative period and each of the other criteria were met, the property was included in our Same Store Pool. Accordingly, Spirit properties have been included in the Same Store Pool for the quarter and have been excluded for the year-to-date calculation. Please see the Glossary to see definitions of our Same Store Pool and Same Store Rental Revenue.

Property Dispositions

The following summarizes our property dispositions (dollars in millions):


Three months ended

September 30, 2024


Nine months ended
September 30, 2024

Properties sold

92


214

Net sales proceeds

$                             249.5


$                             451.4

Gain on sale of real estate

$                               50.6


$                               92.3

Liquidity and Capital Markets

Capital Raising

During the three months ended September 30, 2024, we raised $271.0 million of proceeds from the sale of common stock at a weighted average price of $62.25 per share, primarily through the sale of approximately 4.3 million shares of common stock pursuant to forward sale agreements through our ATM program. As of September 30, 2024, there were approximately 16.8 million shares of unsettled common stock subject to forward sale agreements through our ATM program, representing approximately $958.1 million in expected net proceeds and a weighted average initial gross price of $57.58 per share. ATM net sale proceed amounts assume full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates. As of November 4, 2024, ATM forward agreements for a total of 17.0 million shares remain unsettled with total expected net proceeds of approximately $968.7 million, of which 0.2 million shares were executed in October 2024.

In September 2024, we completed the acquisition of 42 properties by paying cash and by issuing 0.7 million common partnership units in Realty Income, LP, and recorded $46.5 million of contributions to non-controlling interests.

In August 2024, we issued $500.0 million of 5.375% senior unsecured notes due 2054 (the "2054 Notes"). The public offering price for the 2054 Notes was 98.374% of the principal amount for an effective semi-annual yield to maturity of 5.486%.

In September 2024, we issued £350.0 million of 5.000% senior unsecured notes due 2029 (the "2029 Notes") and £350.0 million of 5.250% senior unsecured notes due 2041 (the "2041 Notes"). The public offering price for the 2029 Notes was 99.139% of the principal amount for an effective annual yield to maturity of 5.199% and the public offering price for the 2041 Notes was 96.211% of the principal amount for an effective annual yield to maturity of 5.601%. Combined, the notes have a weighted average tenor of approximately 11.1 years, a weighted average effective annual yield to maturity of 5.400%, and a weighted average coupon rate of 5.125%.

Redemption of Preferred Stock

In September 2024, we redeemed all 6.9 million shares outstanding of our 6.000% Series A Cumulative Redeemable Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends. The excess of the $25.00 liquidation price per share over the carrying value of the preferred stock redeemed resulted in a loss on redemption of $5.1 million for the three months ended September 30, 2024.

Liquidity

As of September 30, 2024, we had $5.2 billion of liquidity, which consists of cash and cash equivalents of $397.0 million, unsettled ATM forward equity of $958.1 million, and $3.8 billion of availability under our $4.25 billion unsecured revolving credit facility, net of $427.5 million of borrowing on the revolving credit facility. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under our commercial paper programs.

Earnings Guidance

Summarized below are approximate estimates of the key components of our 2024 earnings guidance.



Prior 2024 Guidance (1)


Revised 2024 Guidance

Net income per share (2)


$1.21 - $1.30


$1.15 - $1.20

Real estate depreciation and impairments per share


$2.92


$2.96

Other adjustments per share (3)


$0.06


$0.05

Normalized FFO per share (2)(4)


$4.19 - $4.28


$4.16 - $4.21

AFFO per share (4)


$4.15 - $4.21


$4.17 - $4.21

Same store rent growth (5)


Approx 1.0%


Approx 1.0%

Occupancy


Over 98%


Over 98%

Cash G&A expenses (% of revenues) (6)(7)


Approx 3.0%


Approx 3.0%

Property expenses (non-reimbursable) (% of revenues) (6)


1.0% - 1.5%


1.2% - 1.5%

Income tax expenses


$65 - $75 million


$65 - $75 million

Investment volume (8)


Approx $3.0 billion


Approx $3.5 billion

Disposition volume


$400 - $500 million


$550 - $600 million







(1)

As issued on August 5, 2024.

(2)

Net income per share and Normalized FFO per share include non-cash interest expense impact related to the Spirit merger.

(3)

Includes gain on sales of properties and merger, transaction, and other costs.

(4)

Normalized FFO per share and AFFO per share exclude merger, transaction, and other costs. Per share amounts may not add due to rounding.

(5)

Consistent with prior quarters, the full year Same Store Pool does not include the Spirit portfolio. Reserve reversals recognized in 2023 represent an approximately 30 basis point headwind to same store rent growth in 2024.

(6)

Revenue excludes contractually obligated reimbursements by our clients. Cash G&A expenses exclude stock-based compensation expense.

(7)

G&A expenses inclusive of stock-based compensation expense as a percentage of rental revenue, excluding reimbursements, is expected to be approximately 3.4% - 3.7% in 2024.

(8)

Investment volume excludes merger with Spirit, which closed January 23, 2024.

Conference Call Information

In conjunction with the release of our operating results, we will host a conference call on November 5, 2024 at 11:00 a.m. PDT to discuss the operating results. To access the conference call, dial (833) 816-1264 (United States) or (412) 317-5632 (International). When prompted, please ask for the Realty Income conference call.

A telephone replay of the conference call can also be accessed by calling (877) 344-7529 (United States) or (412) 317-0088 (International) and entering the conference ID 6281798. The telephone replay will be available through November 12, 2024.

A live webcast will be available in listen-only mode by clicking on the webcast link on the company's home page at www.realtyincome.com. A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. No access code is required for this replay.

Supplemental Materials and Sustainability Report

Supplemental Operating and Financial Data for the three and nine months ended September 30, 2024 is available on our corporate website at www.realtyincome.com/investors/quarterly-and-annual-results.

The Sustainability Report for the year ended December 31, 2023 is available on our corporate website at https://esg.realtyincome.com/sustainability/esg-reporting. Our Green Financing Framework is also available on our corporate website at esg.realtyincome.com/indicators/green_financing.

About Realty Income

Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies. Founded in 1969, we invest in diversified commercial real estate and have a portfolio of over 15,450 properties in all 50 U.S. states, the U.K., and six other countries in Europe. We are known as "The Monthly Dividend Company®," and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 652 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for the last 30 consecutive years. Additional information about the company can be found at www.realtyincome.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio; growth strategies and intentions to acquire or dispose of properties (including geographies, timing, partners, clients and terms); re-leases, re-development and speculative development of properties and expenditures related thereto; future operations and results; the announcement of operating results, strategy, plans, and the intentions of management; guidance; settlement of shares of common stock sold pursuant to forward sale confirmations under our ATM program; dividends, including the amount, timing and payments of dividends related thereto; and trends in our business, including trends in the market for long-term leases of freestanding, single-client properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms and partners of such funding); continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; changes in domestic and foreign income tax laws and rates; property ownership through joint ventures, partnerships and other arrangements which may limit control of the underlying investments; epidemics or pandemics including measures taken to limit their spread, the impacts on us, our business, our clients, and the economy generally; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers and acquisitions including from the merger with Spirit; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release might not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

 

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts) (unaudited)




Three months ended

September 30,


Nine months ended

 September 30,



2024


2023


2024


2023

REVENUE









Rental (including reimbursable) (1)


$      1,271,153


$      1,008,862


$      3,764,050


$      2,929,440

Other


59,762


30,242


166,793


73,268

Total revenue


1,330,915


1,039,104


3,930,843


3,002,708

EXPENSES









Depreciation and amortization


602,339


495,566


1,788,973


1,419,321

Interest


261,261


184,121


748,806


522,110

Property (including reimbursable)


92,154


70,981


281,366


235,081

General and administrative


41,869


35,525


127,781


106,521

Provisions for impairment


96,920


16,808


282,867


59,801

Merger, transaction, and other costs


8,610


2,884


105,468


4,532

Total expenses


1,103,153


805,885


3,335,261


2,347,366

Gain on sales of real estate


50,563


7,572


92,290


19,675

Foreign currency and derivative (loss) gain, net


(1,672)


(2,813)


2,885


4,957

Equity in earnings of unconsolidated entities


5,087



5,440


411

Other income, net


4,739


7,235


16,293


12,985

Income before income taxes


286,479


245,213


712,490


693,370

Income taxes


(15,355)


(11,336)


(46,499)


(36,218)

Net income


271,124


233,877


665,991


657,152

Net income attributable to noncontrolling interests


(1,639)


(404)


(4,831)


(3,248)

Net income attributable to the Company


269,485


233,473


661,160


653,904

Preferred stock dividends


(2,588)



(7,763)


Excess of redemption value over carrying value of preferred shares redeemed


(5,116)



(5,116)


Net income available to common stockholders


$         261,781


$         233,473


$         648,281


$         653,904

Funds from operations available to common stockholders (FFO)


$         854,926


$         736,146


$      2,569,742


$      2,108,422

Normalized funds from operations available to common stockholders (Normalized FFO)


$         863,536


$         739,030


$      2,675,210


$      2,112,954

Adjusted funds from operations available to common stockholders (AFFO)


$         915,572


$         721,370


$      2,699,517


$      2,043,836

Per share information for common stockholders:









Net income available to common stockholders per common share, basic and diluted:


$               0.30


$               0.33


$               0.75


$               0.96

FFO per common share, basic and diluted:


$               0.98


$               1.04


$               2.99


$               3.09

Normalized FFO per common share:









Basic


$               0.99


$               1.04


$               3.12


$               3.10

Diluted


$               0.99


$               1.04


$               3.11


$               3.10

AFFO per common share:









Basic


$               1.05


$               1.02


$               3.14


$               3.00

Diluted


$               1.05


$               1.02


$               3.14


$               2.99

Cash dividends paid per common share


$           0.7890


$           0.7665


$           2.3350


$           2.2830



(1)

Includes rental revenue (reimbursable) of $74.3 million and $61.3 million for the three months ended September 30, 2024 and 2023, respectively, and $227.6 million and $208.6 million for the nine months ended September 30, 2024 and 2023, respectively. Additionally, it includes reserves to rental revenue, exclusive of non-cash reserves, of $7.0 million and $16.2 million for the three and nine months ended September 30, 2024, respectively, and reserve reversals to rental revenue, exclusive of non-cash reserves of $2.6 million and $7.1 million for the three and nine months ended September 30, 2023, respectively.

 

FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized FFO)

(in thousands, except per share amounts) (unaudited)


FFO and Normalized FFO are non-GAAP financial measures. Please see the Glossary for our definitions and explanations of how we utilize these metrics.




Three months ended

September 30,


Nine months ended

 September 30,



2024


2023


2024


2023










Net income available to common stockholders


$           261,781


$           233,473


$           648,281


$           653,904

Depreciation and amortization


602,339


495,566


1,788,973


1,419,321

Depreciation of furniture, fixtures and equipment


(672)


(817)


(1,905)


(1,656)

Provisions for impairment of real estate


33,151


16,808


208,552


59,801

Gain on sales of real estate


(50,563)


(7,572)


(92,290)


(19,675)

Proportionate share of adjustments for unconsolidated entities


9,652



20,706


(465)

FFO adjustments allocable to noncontrolling interests


(762)


(1,312)


(2,575)


(2,808)

FFO available to common stockholders


$           854,926


$           736,146


$        2,569,742


$        2,108,422

FFO allocable to dilutive noncontrolling interests


1,467


1,375


4,402


4,166

Diluted FFO


$           856,393


$           737,521


$        2,574,144


$        2,112,588










FFO available to common stockholders


$           854,926


$           736,146


$        2,569,742


$        2,108,422

Merger, transaction, and other costs (1)


8,610


2,884


105,468


4,532

Normalized FFO available to common stockholders


$           863,536


$           739,030


$        2,675,210


$        2,112,954

Normalized FFO allocable to dilutive noncontrolling interests


1,467


1,375


4,402


4,166

Diluted Normalized FFO


$           865,003


$           740,405


$        2,679,612


$        2,117,120










FFO per common share, basic and diluted:


$                 0.98


$                 1.04


$                 2.99


$                 3.09

Normalized FFO per common share:









Basic


$                 0.99


$                 1.04


$                 3.12


$                 3.10

Diluted


$                 0.99


$                 1.04


$                 3.11


$                 3.10

Distributions paid to common stockholders


$           687,144


$           543,343


$        1,999,858


$        1,555,679

FFO available to common stockholders in excess of distributions

 paid to common stockholders


$           167,782


$           192,803


$           569,884


$           552,743

Normalized FFO available to common stockholders in excess of

 distributions paid to common stockholders


$           176,392


$           195,687


$           675,352


$           557,275

Weighted average number of common shares used for FFO and

 Normalized FFO:









Basic


870,665


709,165


858,679


681,419

Diluted


873,974


711,338


861,300


683,925



(1)

During the three and nine months ended September 30, 2024, we incurred $8.6 million and $105.5 million, respectively, of merger, transaction, and other costs consisting primarily of $2.9 million and $99.8 million, respectively, of transaction and integration-related costs related to Spirit and $5.1 million for each of the respective periods related to the lease termination of a legacy corporate facility.

 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(in thousands, except per share amounts) (unaudited)


AFFO is a non-GAAP financial measure. Please see the Glossary for our definition and an explanation of how we utilize this metric. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported AFFO.




Three months ended

September 30,


Nine months ended

 September 30,



2024


2023


2024


2023

Net income available to common stockholders


$          261,781


$          233,473


$          648,281


$          653,904

Cumulative adjustments to calculate Normalized FFO (1)


601,755


505,557


2,026,929


1,459,050

Normalized FFO available to common stockholders


863,536


739,030


2,675,210


2,112,954

Excess of redemption value over carrying value of preferred

 shares redeemed


5,116



5,116


Amortization of share-based compensation


6,401


6,231


22,920


20,154

Amortization of net debt discounts (premiums) and deferred

 financing costs


4,861


(10,244)


9,861


(34,441)

Amortization of acquired interest rate swap value (2)


3,711



10,225


Non-cash change in allowance for credit losses (3)


63,769



74,315


Leasing costs and commissions


(2,841)


(1,392)


(5,897)


(6,868)

Recurring capital expenditures


(151)


(52)


(203)


(190)

Straight-line rent and expenses, net


(43,930)


(42,791)


(136,377)


(113,239)

Amortization of above and below-market leases, net


12,973


24,939


41,053


61,967

Proportionate share of adjustments for unconsolidated entities


(2,152)



(1,770)


Other adjustments (4)


4,279


5,649


5,064


3,499

AFFO available to common stockholders


$          915,572


$          721,370


$      2,699,517


$      2,043,836

AFFO allocable to dilutive noncontrolling interests


1,467


1,357


4,413


4,170

Diluted AFFO


$          917,039


$          722,727


$      2,703,930


$      2,048,006

AFFO per common share:









Basic


$                1.05


$                1.02


$                3.14


$                3.00

Diluted


$                1.05


$                1.02


$                3.14


$                2.99

Distributions paid to common stockholders


$          687,144


$          543,343


$      1,999,858


$      1,555,679

AFFO available to common stockholders in excess of distributions

 paid to common stockholders


$          228,428


$          178,027


$          699,659


$          488,157

Weighted average number of common shares used for AFFO:









Basic


870,665


709,165


858,679


681,419

Diluted


873,974


711,338


861,300


683,925



(1)

See Normalized FFO calculations on page 10 for reconciling items.

(2)

Includes the amortization of the purchase price allocated to interest rate swaps acquired in the Spirit merger.

(3)

Credit losses primarily consist of a financing receivable impairment for a client in the convenience store industry that defaulted on their lease payments to us.

(4)

Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, straight-line payments from cross-currency swaps, obligations related to financing lease liabilities, adjustments allocable to noncontrolling interests, and gains and losses on the sale of loans receivable.

 

HISTORICAL FFO AND AFFO

(in thousands, except per share amounts) (unaudited)

 


For the three months ended September 30,


2024


2023


2022


2021


2020

Net income available to common stockholders


$       261,781


$       233,473


$       219,567


$       134,996


$         22,904

Depreciation and amortization, net of furniture, fixtures and equipment


601,667


494,749


418,505


198,602


168,927

Provisions for impairment of real estate


33,151


16,808


1,650


11,011


105,095

Gain on sales of real estate


(50,563)


(7,572)


(42,883)


(12,094)


(13,736)

Proportionate share of adjustments for unconsolidated entities


9,652



717



FFO adjustments allocable to noncontrolling interests


(762)


(1,312)


(402)


(180)


(212)

FFO available to common stockholders


$       854,926


$       736,146


$       597,154


$       332,335


$       282,978

Merger, transaction, and other costs


8,610


2,884


3,746


16,783


Normalized FFO available to common stockholders


$       863,536


$       739,030


$       600,900


$       349,118


$       282,978

FFO per diluted share


$              0.98


$              1.04


$              0.97


$              0.85


$              0.82

Normalized FFO per diluted share


$              0.99


$              1.04


$              0.97


$              0.89


$              0.82

AFFO available to common stockholders


$       915,572


$       721,370


$       603,566


$       356,837


$       282,509

AFFO per diluted share


$              1.05


$              1.02


$              0.98


$              0.91


$              0.81

Common stock dividends paid


$         0.7890


$         0.7665


$         0.7425


$         0.7065


$         0.7005

Weighted average diluted shares outstanding - FFO, Normalized FFO

 and AFFO


873,974


711,338


619,201


392,514


347,213












For the nine months ended September 30,


2024


2023


2022


2021


2020

Net income available to common stockholders


$       648,281


$       653,904


$       642,143


$       355,415


$       277,555

Depreciation and amortization, net of furniture, fixtures and equipment


1,787,068


1,417,665


1,230,737


563,932


501,562

Provisions for impairment of real estate


208,552


59,801


16,379


30,977


123,442

Gain on sales of real estate


(92,290)


(19,675)


(93,611)


(35,396)


(53,565)

Proportionate share of adjustments for unconsolidated entities


20,706


(465)


12,812



FFO adjustments allocable to noncontrolling interests


(2,575)


(2,808)


(1,075)


(511)


(575)

FFO available to common stockholders


$    2,569,742


$    2,108,422


$    1,807,385


$       914,417


$       848,419

Merger, transaction, and other costs


105,468


4,532


12,994


30,081


Normalized FFO available to common stockholders


$    2,675,210


$    2,112,954


$    1,820,379


$       944,498


$       848,419

FFO per diluted share


$              2.99


$              3.09


$              2.99


$              2.41


$              2.48

Normalized FFO per diluted share


$              3.11


$              3.10


$              3.01


$              2.49


$              2.48

AFFO available to common stockholders


$    2,699,517


$    2,043,836


$    1,767,392


$    1,002,706


$       874,972

AFFO per diluted share


$              3.14


$              2.99


$              2.92


$              2.64


$              2.55

Common stock dividends paid


$         2.3350


$         2.2830


$         2.2230


$         2.1150


$         2.0920

Weighted average diluted shares outstanding - FFO, Normalized FFO

 and AFFO


861,300


683,925


605,958


379,873


342,946

 

ADJUSTED EBITDAre

(dollars in thousands) (unaudited)


Adjusted EBITDAre, Annualized Adjusted EBITDAre, Pro Forma Adjusted EBITDAre, Annualized Pro Forma Adjusted EBITDAre, Net Debt/Annualized Adjusted EBITDAre, and Net Debt/Annualized Pro Forma Adjusted EBITDAre are non-GAAP financial measures. Please see the Glossary for our definition and an explanation of how we utilize these metrics.




Three months ended

September 30,



2024


2023

Net income


$                         271,124


$                         233,877

Interest


261,261


184,121

Income taxes


15,355


11,336

Depreciation and amortization


602,339


495,566

Provisions for impairment


96,920


16,808

Merger, transaction, and other costs


8,610


2,884

Gain on sales of real estate


(50,563)


(7,572)

Foreign currency and derivative loss, net


1,672


2,813

Proportionate share of adjustments from unconsolidated entities


20,340


Quarterly Adjusted EBITDAre


$                      1,227,058


$                         939,833

Annualized Adjusted EBITDAre (1)


$                      4,908,232


$                      3,759,332

Annualized Pro Forma Adjustments


$                           29,347


$                           74,503

Annualized Pro Forma Adjusted EBITDAre


$                      4,937,579


$                      3,833,835

Total debt per the consolidated balance sheet, excluding deferred financing costs and

 net premiums and discounts


$                    26,437,045


$                    20,388,406

Proportionate share of unconsolidated entities debt, excluding deferred financing costs


659,190


Less: Cash and cash equivalents


(396,956)


(344,129)

Net Debt (2)


$                    26,699,279


$                    20,044,277

Net Debt/Annualized Adjusted EBITDAre


                                    5.4x


                                    5.3x

Net Debt/Annualized Pro Forma Adjusted EBITDAre


                                    5.4x


                                    5.2x



(1)

We calculate Annualized Adjusted EBITDAre by multiplying the Quarterly Adjusted EBITDAre by four.

(2)

Net Debt is total debt per our consolidated balance sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents.

The Annualized Pro Forma Adjustments, which include transaction accounting adjustments in accordance with U.S GAAP, consist of adjustments to incorporate Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and remove Adjusted EBITDAre from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The Annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes. The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDAre calculation for the periods indicated below (in thousands):



Three months ended

September 30,



2024


2023

Annualized pro forma adjustments from investments acquired or stabilized


$                             32,378


$                             79,141

Annualized pro forma adjustments from investments disposed


(3,031)


(4,638)

Annualized Pro Forma Adjustments


$                             29,347


$                             74,503

 

Adjusted Free Cash Flow

(in thousands) (unaudited)


Adjusted Free Cash Flow and Annualized Adjusted Free Cash Flow are non-GAAP financial measures. Please see the Glossary for our definition and an explanation of how we utilize these metrics. 




Nine months ended

 September 30,



2024


2023

Net cash provided by operating activities


$                        2,601,313


$                        2,198,111

Non-recurring capital expenditures


(79,952)


(37,541)

Distributions paid to common stockholders


(1,999,858)


(1,555,679)

Distributions paid to preferred stockholders


(7,763)


Merger, transaction, and other costs (1)


80,717


4,532

Increase in net working capital


(3,867)


(143,989)

Lease termination fees


(17,048)


(4,178)

Adjusted Free Cash Flow


$                           573,542


$                           461,256

Annualized Adjusted Free Cash Flow


$                           764,723


$                           615,008



(1)

Excludes share-based compensation costs recognized in merger, transaction, and other costs.

 

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts) (unaudited)




September 30, 2024


December 31, 2023

ASSETS





Real estate held for investment, at cost:





Land


$                                17,140,719


$                                14,929,310

Buildings and improvements


40,608,341


34,657,094

Total real estate held for investment, at cost


57,749,060


49,586,404

Less accumulated depreciation and amortization


(7,066,449)


(6,072,118)

Real estate held for investment, net


50,682,611


43,514,286

Real estate and lease intangibles held for sale, net


60,467


31,466

Cash and cash equivalents


396,956


232,923

Accounts receivable, net


835,328


710,536

Lease intangible assets, net


6,600,058


5,017,907

Goodwill


4,932,199


3,731,478

Investment in unconsolidated entities


1,224,974


1,172,118

Other assets, net


3,736,173


3,368,643

Total assets


$                                68,468,766


$                                57,779,357






LIABILITIES AND EQUITY





Distributions payable


$                                     233,139


$                                     195,222

Accounts payable and accrued expenses


880,122


738,526

Lease intangible liabilities, net


1,676,549


1,406,853

Other liabilities


863,683


811,650

Line of credit payable and commercial paper


427,546


764,390

Term loans, net


2,428,279


1,331,841

Mortgages payable, net


197,522


821,587

Notes payable, net


23,092,216


18,602,319

Total liabilities


$                                29,799,056


$                                24,672,388

Stockholders' equity:





Common stock and paid in capital, par value $0.01 per share, 1,300,000

 shares authorized, 875,197 and 752,460 shares issued and outstanding

 as of September 30, 2024 and December 31, 2023, respectively


$                                46,505,688


$                                39,629,709

Distributions in excess of net income


(8,151,359)


(6,762,136)

Accumulated other comprehensive income


103,463


73,894

Total stockholders' equity


$                                38,457,792


$                                32,941,467

Noncontrolling interests


211,918


165,502

Total equity


$                                38,669,710


$                                33,106,969

Total liabilities and equity


$                                68,468,766


$                                57,779,357

GLOSSARY

Adjusted EBITDAre, The National Association of Real Estate Investment Trusts (Nareit) established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent measure to help make investment decisions among certain REITs. Our definition of "Adjusted EBITDAre" is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gain and loss and merger, transaction, and other costs. We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) provisions for impairment, (v) merger, transaction, and other costs, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities. Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT's performance because it provides a view of our operating performance, analyzes our ability to meet interest payment obligations before the effects of income tax, depreciation and amortization expense, provisions for impairment, gain on sales of real estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-cash items that industry observers believe are less relevant to evaluating the operating performance of a company. In addition, EBITDAre is widely followed by industry analysts, lenders, investors, rating agencies, and others as a means of evaluating the operational cash generating capacity of a company prior to servicing debt obligations. Management also believes the use of an annualized quarterly Adjusted EBITDAre metric is meaningful because it represents our current earnings run rate for the period presented. The ratio of our total debt to our annualized quarterly Adjusted EBITDAre is also used to determine vesting of performance share awards granted to our executive officers. Adjusted EBITDAre should be considered along with, but not as an alternative to, net income as a measure of our operating performance.

Adjusted Free Cash Flow, a non-GAAP financial measure, is defined as net cash provided by operating activities, excluding merger, transaction, and other costs, changes in net working capital and lease termination fees, less non-recurring capital expenditures and dividends paid. We believe adjusted free cash flow to be a useful liquidity measure for us and our investors by helping to evaluate our ability to generate cash beyond what is needed to fund capital expenditures, debt service and other obligations. Notwithstanding cash on hand and incremental borrowing capacity, adjusted free cash flow reflects our ability to grow our business through investments and acquisitions, as well as our ability to return cash to shareholders through dividends. Adjusted free cash flow is not considered under generally accepted accounting principles to be a primary measure of an entity's residual cash flow available for discretionary spending, and accordingly should not be considered an alternative to operating income, net income, or amounts shown in our consolidated statements of cash flows.

Adjusted Funds From Operations (AFFO), a non-GAAP financial measure, is defined as FFO adjusted for unique revenue and expense items, which we believe are not as pertinent to the measurement of our ongoing operating performance. Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution). We believe AFFO provides useful information to investors because it is a widely accepted industry measure of the operating performance of real estate companies used by the investment community. In particular, AFFO provides an additional measure to compare the operating performance of different REITs without having to account for differing depreciation assumptions and other unique revenue and expense items which are not pertinent to measuring a particular company's ongoing operating performance. Therefore, we believe that AFFO is an appropriate supplemental performance metric, and that the most appropriate GAAP performance metric to which AFFO should be reconciled is net income available to common stockholders.

Annualized Adjusted EBITDAre, a non-GAAP financial measure, is calculated by annualizing Adjusted EBITDAre.

Annualized Contractual Rent of our acquisitions and properties under development is the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables, as of the balance sheet date, multiplied by 12, excluding percentage rent, interest income on loans and preferred equity investments, and including our pro rata share of such revenues from properties owned by unconsolidated joint ventures. We believe total annualized contractual rent is a useful supplemental operating measure, as it excludes entities that were no longer owned at the balance sheet date and includes the annualized rent from properties acquired during the quarter. Total annualized contractual rent has not been reduced to reflect reserves recorded as reductions to GAAP rental revenue in the periods presented.

Annualized Adjusted Free Cash Flow, a non-GAAP financial measure, is calculated by annualizing Adjusted Free Cash Flow.

Annualized Pro Forma Adjusted EBITDAre, a non-GAAP financial measure, is defined as Adjusted EBITDAre, which includes transaction accounting adjustments in accordance with U.S. GAAP, consists of adjustments to incorporate Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and removes Adjusted EBITDAre from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The annualized pro forma adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes and bonds.

Cash Income represents expected rent for real estate acquisitions as well as rent to be received upon completion of the properties under development. For unconsolidated entities, this represents our pro rata share of the cash income. For loans receivable and preferred equity investments, this represents interest income and preferred dividend income, respectively.

Funds From Operations (FFO), a non-GAAP financial measure, consistent with the Nareit definition, is net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairments of depreciable real estate assets, and reduced by gain on property sales. Presentation of the information regarding FFO and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered measures of liquidity, of our ability to make cash distributions, or of our ability to pay interest payments. We consider FFO to be an appropriate supplemental measure of a REIT's operating performance as it is based on a net income analysis of property portfolio performance that adds back items such as depreciation and impairments for FFO. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT using historical accounting for depreciation could be less informative. The use of FFO is recommended by the REIT industry as a supplemental performance measure. In addition, FFO is used as a measure of our compliance with the financial covenants of our credit facility.

Initial Weighted Average Cash Yield for acquisitions and properties under development is computed as Cash Income for the first twelve months following the acquisition date, divided by the total cost of the property (including all expenses borne by us), and includes our pro-rata share of Cash Income from unconsolidated joint ventures. Initial weighted average cash yield for loans receivable is computed using the Cash Income for the first twelve months following the acquisition date, divided by the total cost of the investment.

Investment Grade Clients are our clients with a credit rating, and our clients that are subsidiaries or affiliates of companies with a credit rating, as of the balance sheet date, of Baa3/BBB- or higher from one of the three major rating agencies (Moody's/S&P/Fitch).

Net Debt/Annualized Adjusted EBITDAre, a ratio used by management as a measure of leverage, is calculated as net debt (which we define as total debt per our consolidated balance sheet, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by Annualized Adjusted EBITDAre.

Net Debt/Annualized Pro Forma Adjusted EBITDAre, a ratio used by management as a measure of leverage, is calculated as net debt (which we define as total debt per our consolidated balance sheet, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by Annualized Pro Forma Adjusted EBITDAre.

Normalized Funds from Operations Available to Common Stockholders (Normalized FFO), a non-GAAP financial measure, is FFO excluding merger, transaction, and other costs.

Same Store Pool, for purposes of determining the properties used to calculate our same store rental revenue, includes all properties that we owned for the entire year-to-date period, for both the current and prior year except for properties during the current or prior year that were: (i) vacant at any time,(ii) under development or redevelopment, or (iii) involved in eminent domain and rent was reduced.

Same Store Rental Revenue excludes straight-line rent, the amortization of above and below-market leases, and reimbursements from clients for recoverable real estate taxes and operating expenses. For purposes of comparability, same store rental revenue is presented on a constant currency basis by applying the exchange rate as of the balance sheet date to base currency rental revenue.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/realty-income-announces-operating-results-for-the-three-and-nine-months-ended-september-30-2024-302295750.html

SOURCE Realty Income Corporation

FAQ

What was Realty Income's (O) AFFO per share in Q3 2024?

Realty Income reported AFFO per share of $1.05 in Q3 2024, compared to $1.02 in Q3 2023.

What is Realty Income's (O) portfolio occupancy rate as of September 30, 2024?

Realty Income's portfolio occupancy rate was 98.7% as of September 30, 2024.

What is Realty Income's (O) updated AFFO guidance for 2024?

Realty Income raised its 2024 AFFO guidance to a range of $4.17 to $4.21 per share.

How much did Realty Income (O) invest in Q3 2024?

Realty Income invested $740.1 million at an initial weighted average cash yield of 7.4% in Q3 2024.

Realty Income Corporation

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49.41B
870.87M
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78.83%
1.87%
REIT - Retail
Real Estate Investment Trusts
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United States of America
SAN DIEGO