Realty Income Announces Operating Results For The Three And Six Months Ended June 30, 2021
Realty Income Corporation (NYSE: O) reported its operating results for Q2 2021, showing net income per share at $0.33 and normalized FFO per share at $0.88. The company invested $1.13 billion across 156 properties, with significant acquisitions in the U.K. They raised $457.5 million from common stock sales and issued £400 million in green bonds. The rental collection rate reached 99.4%. Realty Income updated its 2021 AFFO guidance to $3.53 - $3.59 per share and acquisition guidance to approximately $4.5 billion. The portfolio remains strong with a 98.5% occupancy rate.
- Net income per share increased to $0.33, up from $0.31 in Q2 2020.
- Normalized FFO per share rose to $0.88, compared to $0.84 in Q2 2020.
- Invested $1.13 billion in 156 properties, indicating robust acquisition activity.
- Raised $457.5 million through common stock sales and $594.1 million from a public offering.
- Achieved a rental collection rate of 99.4% across the portfolio.
- Updated 2021 AFFO guidance to $3.53 - $3.59 per share, reflecting positive outlook.
- Portfolio occupancy at 98.5%, maintaining strong tenant demand.
- Net income available to common stockholders decreased from $254.7 million in 2020 to $220.4 million in 2021 for the six-month period.
- Rent collection from theater clients remains significantly lower at 38.3% for Q2 2021.
- Total rental revenue reserves recorded for theater properties amounted to $15.8 million for the first half of 2021.
SAN DIEGO, Aug. 2, 2021 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced operating results for the three and six months ended June 30, 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 June 30, 2021:
- Net income per share was
$0.33 - Normalized FFO and AFFO per share were
$0.88 - Invested
$1.13 billion in 156 properties and properties under development or expansion, including$591.8 million in United Kingdom (U.K.) properties - Raised
$457.5 million from the sale of common stock, primarily through our At-The-Market (ATM) program
For the month ended July 31, 2021:
- Raised
$594.1 million in net proceeds from a common stock public offering of 9,200,000 shares, inclusive of 1,200,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares - Issued
£400 million through the issuance of1.125% senior unsecured notes due 2027 and£350 million through the issuance of1.750% senior unsecured notes due 2033 in our debut Sterling-denominated green bond offering - Collected
99.4% of contractual rent across our total portfolio, inclusive of98.9% collected from our theater clients
CEO Comments
"Our second quarter results and guidance updates demonstrate our track record of consistently executing on the strategic goals we set for our business," said Sumit Roy, Realty Income's President and Chief Executive Officer. "Our international pipeline continues to exceed expectations as the U.K. accounted for over
"We are updating several key guidance metrics as a result of our achievements during the second quarter, which include increasing theater rent collections, and added depth of our global pipeline. This update includes raising our 2021 AFFO per share guidance to
Select Financial Results
The following summarizes our select financial results (dollars in millions, except per share data):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Total revenue | $ | 464.3 | $ | 414.6 | $ | 907.1 | $ | 829.0 | ||||
Net income available to common stockholders (1)(2) | $ | 124.5 | $ | 107.8 | $ | 220.4 | $ | 254.7 | ||||
Net income per share | $ | 0.33 | $ | 0.31 | $ | 0.59 | $ | 0.75 | ||||
Funds from operations available to common stockholders (FFO) (2)(3) | $ | 314.4 | $ | 288.3 | $ | 582.1 | $ | 565.4 | ||||
FFO per share | $ | 0.84 | $ | 0.84 | $ | 1.56 | $ | 1.66 | ||||
Normalized funds from operations available to common stockholders (Normalized FFO) (3) | $ | 327.7 | $ | 288.3 | $ | 595.4 | $ | 565.4 | ||||
Normalized FFO per share | $ | 0.88 | $ | 0.84 | $ | 1.60 | $ | 1.66 | ||||
Adjusted funds from operations available to common stockholders (AFFO) (3) | $ | 327.6 | $ | 295.2 | $ | 645.9 | $ | 592.5 | ||||
AFFO per share | $ | 0.88 | $ | 0.86 | $ | 1.73 | $ | 1.74 | ||||
(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 six months ended June 30, 2021 were impacted by a |
(3) | FFO, Normalized FFO, and AFFO are non-GAAP financial measures. Normalized FFO is based on FFO and adjusted to exclude merger-related costs related to our proposed merger with VEREIT and AFFO further adjusts Normalized FFO for unique revenue and expense items, such as losses on extinguishment of debt and executive severance costs. Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended June 30, 2021 for our definitions and explanations of how we utilize these metrics. See pages 10 and 11 herein for reconciliations to the most directly comparable GAAP measure. |
Rent Collections Update
Percentages of Contractual Rent Collected as of June 30, 2021
Month Ended April 30, 2021 | Month Ended May 31, 2021 | Month Ended June 30, 2021 | Quarter Ended June 30, 2021 | ||||
Contractual rent collected(1) across total portfolio | |||||||
Contractual rent collected(1) from our top 20 clients (2) | |||||||
Contractual rent collected(1) from our investment grade clients (3) | |||||||
Contractual rent collected from our theater clients | |||||||
Contractual rent collected from our health and fitness clients |
(1) | Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through June 30, 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 June 30, 2021 for all periods. |
(3) | Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended June 30, 2021 for our definition of 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.
Rental Revenue Reserves (1)
The following table summarizes reserves recorded as a reduction of rental revenue across the entire portfolio (dollars in millions):
Three Months Ended | Six Months Ended | ||||||||
June 30, 2021 | June 30, 2021 | ||||||||
Rental revenue reserves | |||||||||
Theater industry | $ | 6.5 | $ | 13.8 | |||||
Other | 1.0 | 2.0 | |||||||
Total rental revenue reserves | $ | 7.5 | $ | 15.8 | |||||
Straight-line rent reserves | |||||||||
Theater industry | $ | 0.1 | $ | 0.2 | |||||
Other | 0.6 | 1.0 | |||||||
Total straight-line rent reserves | $ | 0.7 | $ | 1.2 | |||||
Total reserves | |||||||||
Theater industry | $ | 6.6 | $ | 14.0 | |||||
Other | 1.6 | 3.0 | |||||||
Total reserves | $ | 8.2 | $ | 17.0 | |||||
(1) | 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. |
Theater Industry Update
As of June 30, 2021, the theater industry represented
At June 30, 2021, the receivables outstanding across the portfolio totaled
Additionally, we did not record any provisions for impairment on theater properties for the six months ended June 30, 2021. See "Item 1A—Risk Factors" in Part I of our Annual Report on Form 10-K for the 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 June 2021, we announced the 95th consecutive quarterly dividend increase, which is the 111th 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 June 30, 2021 was
Real Estate Portfolio Update
As of June 30, 2021, our portfolio consisted of 6,761 properties located in all 50 U.S. states, Puerto Rico and the U.K., and leased to approximately 630 clients doing business in 58 separate industries. The properties are primarily freestanding and leased under long-term net lease agreements with a weighted average remaining lease term of approximately 8.8 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of June 30, 2021, portfolio occupancy was
Changes in Occupancy
Three months ended June 30, 2021 | ||
Properties available for lease at March 31, 2021 | 131 | |
Lease expirations (1) | 66 | |
Re-leases to same client | (54) | |
Re-leases to new client | (2) | |
Vacant dispositions | (38) | |
Properties available for lease at June 30, 2021 | 103 | |
Six months ended June 30, 2021 | ||
Properties available for lease at December 31, 2020 | 140 | |
Lease expirations (1) | 126 | |
Re-leases to same client | (91) | |
Re-leases to new client | (15) | |
Vacant dispositions | (57) | |
Properties available for lease at June 30, 2021 | 103 | |
(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 June 30, 2021, the annual new rent on re-leases was
During the six months ended June 30, 2021, the annual new rent on re-leases was
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 June 30, 2021 | |||||||||||||||
Acquisitions - U.S. (in 24 states) | 96 | 2,186,109 | $ | 485,424 | 13.9 | 5.3 | % | ||||||||
Acquisitions - U.K. (2) | 29 | 2,200,493 | 591,821 | 9.3 | 6.1 | % | |||||||||
Total acquisitions | 125 | 4,386,602 | $ | 1,077,245 | 11.2 | 5.7 | % | ||||||||
Properties under development - U.S. | 31 | 1,898,893 | 56,867 | 15.6 | 5.9 | % | |||||||||
Total (3) | 156 | 6,285,495 | $ | 1,134,112 | 11.5 | 5.7 | % | ||||||||
Six months ended June 30, 2021 | |||||||||||||||
Acquisitions - U.S. (in 29 states) | 173 | 4,484,715 | $ | 1,052,333 | 13.7 | 5.5 | % | ||||||||
Acquisitions - U.K. (2) | 41 | 3,133,460 | 994,783 | 9.8 | 5.6 | % | |||||||||
Total acquisitions | 214 | 7,618,175 | $ | 2,047,116 | 11.8 | 5.5 | % | ||||||||
Properties under development - U.S. | 40 | 2,015,992 | 114,798 | 15.6 | 5.7 | % | |||||||||
Total (4) | 254 | 9,634,167 | $ | 2,161,914 | 12.0 | 5.5 | % | ||||||||
(1) | Initial average cash lease yield is a supplemental operating measure. Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended June 30, 2021 for our definition of this metric. Contractual net operating income used in the calculation of initial average cash yield for the three and six months ended June 30, 2021 includes approximately |
(2) | Represents investments of |
(3) | Our clients occupying the new properties operate in 19 industries and are |
(4) | Our clients occupying the new properties operate in 28 industries and are |
Same Store Rental Revenue
The following summarizes our same store rental revenue on 6,114 properties under lease (dollars in millions):
Three Months Ended June 30, | Six Months Ended June 30, | Increase | |||||||||||||||
2021 | 2020 | 2021 | 2020 | Three Months | Six Months | ||||||||||||
Rental revenue | $ | 373.8 | $ | 371.8 | $ | 747.7 | $ | 747.0 | 0.5 | % | 0.1 | % | |||||
For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of June 30, 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 income was negatively impacted by reserves recorded as reductions of rental revenue of
Property Dispositions
The following summarizes our property dispositions (dollars in millions):
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||
Properties sold | 42 | 69 | ||||||
Net sales proceeds | $ | 56.9 | $ | 91.6 | ||||
Gain on sales of real estate | $ | 14.9 | $ | 23.3 | ||||
Liquidity and Capital Markets
Equity Capital Raising
During the three months ended June 30, 2021, we raised
In July 2021, we raised
In July 2021, we issued
Revolving Credit Facility and Commercial Paper Program
We have a
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
2021 Earnings Guidance
We estimate Normalized FFO per share for 2021 of
Prior 2021 Guidance | Revised 2021 Guidance | |
Net income per share (1) | ||
Real estate depreciation and impairments per share | ||
Gains on sales of properties per share | ||
Merger-related costs (actual) (1) | $— | |
Normalized FFO per share | ||
AFFO per share | ||
Same store rent growth (2) | ||
Occupancy | ~ | Over |
Cash G&A expenses (% of revenues) (3)(4) | ~ | ~ |
Property expenses (non-reimbursable) (% of revenues) (3) | ||
Income tax expenses | ~ | ~ |
Acquisition volume | Over | ~ |
(1) Does not include any estimated merger-related costs for the remainder of 2021. | ||
(2) Includes rent deferred for future payment as a result of lease concessions we granted in response to the COVID-19 pandemic. | ||
(3) Revenue excludes contractually obligated reimbursements by our clients. Cash G&A excludes stock-based compensation expense. | ||
(4) G&A inclusive of stock-based compensation expense as a percentage of rental revenue, excluding reimbursements, is expected to be approximately | ||
Conference Call Information
In conjunction with the release of our operating results, we will host a conference call on August 3, 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 2875728.
A telephone replay of the conference call can also be accessed by calling (800) 585-8367 and entering the conference ID 2875728. The telephone replay will be available through August 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 Operating and Financial Data for the three months ended June 30, 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. During June 2021, we established our Green Financing Framework, which is also available on our corporate website at www.realtyincome.com/corporate-responsibility/Green-Financing-Framework.
About Realty Income
Realty Income, The Monthly Dividend Company®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,700 real estate properties owned under long-term lease agreements with our commercial clients. To date, the company has declared 613 consecutive common stock monthly dividends throughout its 52-year operating history and increased the dividend 111 times since Realty Income's public listing in 1994 (NYSE: O). Additional information about the company can be obtained from the corporate website at www.realtyincome.com.
Forward-Looking Statements
Statements in this press release that are not strictly historical are "forward-looking" statements. Forward-looking statements involve known and unknown risks, which may cause 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 | Six Months | Six Months | |||||||||||||
Ended 6/30/21 | Ended 6/30/20 | Ended 6/30/21 | Ended 6/30/20 | |||||||||||||
REVENUE | ||||||||||||||||
Rental (including reimbursable) (1) | $ | 460,256 | $ | 410,201 | $ | 899,621 | $ | 822,358 | ||||||||
Other | 4,026 | 4,435 | 7,465 | 6,619 | ||||||||||||
Total revenue | 464,282 | 414,636 | 907,086 | 828,977 | ||||||||||||
EXPENSES | ||||||||||||||||
Depreciation and amortization | 187,789 | 168,328 | 365,774 | 332,913 | ||||||||||||
Interest | 73,674 | 77,841 | 146,749 | 153,766 | ||||||||||||
Property (including reimbursable) | 31,734 | 26,452 | 60,233 | 52,058 | ||||||||||||
General and administrative | 21,849 | 19,063 | 42,645 | 40,027 | ||||||||||||
Provisions for impairment | 17,246 | 13,869 | 19,966 | 18,347 | ||||||||||||
Merger-related costs | 13,298 | — | 13,298 | — | ||||||||||||
Total expenses | 345,590 | 305,553 | 648,665 | 597,111 | ||||||||||||
Gain on sales of real estate | 14,901 | 1,323 | 23,302 | 39,829 | ||||||||||||
Foreign currency and derivative gains | 400 | 502 | 1,204 | (1,062) | ||||||||||||
Loss on extinguishment of debt | — | — | (46,473) | (9,819) | ||||||||||||
Income before income taxes | 133,993 | 110,908 | 236,454 | 260,814 | ||||||||||||
Income taxes | (9,225) | (2,838) | (15,450) | (5,601) | ||||||||||||
Net income | 124,768 | 108,070 | 221,004 | 255,213 | ||||||||||||
Net income attributable to noncontrolling interests | (289) | (246) | (585) | (562) | ||||||||||||
Net income available to common stockholders | $ | 124,479 | $ | 107,824 | $ | 220,419 | $ | 254,651 | ||||||||
Funds from operations available to common | $ | 314,375 | $ | 288,338 | $ | 582,082 | $ | 565,441 | ||||||||
Normalized funds from operations available to | $ | 327,673 | $ | 288,338 | $ | 595,380 | $ | 565,441 | ||||||||
Adjusted funds from operations available to | $ | 327,647 | $ | 295,241 | $ | 645,869 | $ | 592,463 | ||||||||
Per share information for common stockholders: | ||||||||||||||||
Net income, basic and diluted | $ | 0.33 | $ | 0.31 | $ | 0.59 | $ | 0.75 | ||||||||
FFO, basic and diluted | $ | 0.84 | $ | 0.84 | $ | 1.56 | $ | 1.66 | ||||||||
Normalized FFO, basic and diluted | $ | 0.88 | $ | 0.84 | $ | 1.60 | $ | 1.66 | ||||||||
AFFO, basic and diluted | $ | 0.88 | $ | 0.86 | $ | 1.73 | $ | 1.74 | ||||||||
Cash dividends paid per common share | $ | 0.705 | $ | 0.699 | $ | 1.409 | $ | 1.392 | ||||||||
(1) | We recorded reserves as a reduction of rental revenue of |
FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized FFO) | ||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
FFO and Normalized FFO are non-GAAP financial measures. Please see the Glossary in the Supplemental Operating and Financial Data for the three | ||||||||||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended 6/30/21 | Ended 6/30/20 | Ended 6/30/21 | Ended 6/30/20 | |||||||||||||
Net income available to common stockholders | $ | 124,479 | $ | 107,824 | $ | 220,419 | $ | 254,651 | ||||||||
Depreciation and amortization | 187,789 | 168,328 | 365,774 | 332,913 | ||||||||||||
Depreciation of furniture, fixtures and equipment | (73) | (152) | (444) | (278) | ||||||||||||
Provisions for impairment | 17,246 | 13,869 | 19,966 | 18,347 | ||||||||||||
Gain on sales of real estate | (14,901) | (1,323) | (23,302) | (39,829) | ||||||||||||
FFO adjustments allocable to noncontrolling | (165) | (208) | (331) | (363) | ||||||||||||
FFO available to common stockholders | $ | 314,375 | $ | 288,338 | $ | 582,082 | $ | 565,441 | ||||||||
FFO allocable to dilutive noncontrolling interests | 348 | 348 | 705 | 717 | ||||||||||||
Diluted FFO | $ | 314,723 | $ | 288,686 | $ | 582,787 | $ | 566,158 | ||||||||
FFO available to common stockholders | $ | 314,375 | $ | 288,338 | $ | 582,082 | $ | 565,441 | ||||||||
Merger-related costs | 13,298 | — | 13,298 | — | ||||||||||||
Normalized FFO available to common stockholders | $ | 327,673 | $ | 288,338 | $ | 595,380 | $ | 565,441 | ||||||||
Normalized FFO allocable to dilutive noncontrolling interests | 348 | 348 | 705 | 717 | ||||||||||||
Diluted Normalized FFO | $ | 328,021 | $ | 288,686 | $ | 596,085 | $ | 566,158 | ||||||||
FFO per common share, basic and diluted | $ | 0.84 | $ | 0.84 | $ | 1.56 | $ | 1.66 | ||||||||
Normalized FFO per common share, basic and diluted | $ | 0.88 | $ | 0.84 | $ | 1.60 | $ | 1.66 | ||||||||
Distributions paid to common stockholders | $ | 263,358 | $ | 240,470 | $ | 524,056 | $ | 474,294 | ||||||||
FFO available to common stockholders in excess of distributions paid to common stockholders | $ | 51,017 | $ | 47,868 | $ | 58,026 | $ | 91,147 | ||||||||
Normalized FFO available to common stockholders in excess of distributions paid to common stockholders | $ | 64,315 | $ | 47,868 | $ | 71,324 | $ | 91,147 | ||||||||
Weighted average number of common shares used for FFO and Normalized FFO: | ||||||||||||||||
Basic | 374,236,424 | 343,515,406 | 372,879,165 | 340,061,487 | ||||||||||||
Diluted | 374,804,142 | 344,148,378 | 373,434,863 | 340,744,384 | ||||||||||||
ADJUSTED FUNDS FROM OPERATIONS (AFFO) | ||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||
AFFO is a non-GAAP financial measure. Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended June 30, | ||||||||||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended 6/30/21 | Ended 6/30/20 | Ended 6/30/21 | Ended 6/30/20 | |||||||||||||
Net income available to common stockholders (1) | $ | 124,479 | $ | 107,824 | $ | 220,419 | $ | 254,651 | ||||||||
Cumulative adjustments to calculate Normalized FFO (2) | 203,194 | 180,514 | 374,961 | 310,790 | ||||||||||||
Normalized FFO available to common stockholders | 327,673 | 288,338 | 595,380 | 565,441 | ||||||||||||
Executive severance charge (3) | — | — | — | 3,463 | ||||||||||||
Loss on extinguishment of debt | — | — | 46,473 | 9,819 | ||||||||||||
Amortization of share-based compensation | 4,472 | 4,882 | 8,169 | 8,624 | ||||||||||||
Amortization of deferred financing costs (4) | 1,710 | 1,476 | 3,375 | 2,836 | ||||||||||||
Amortization of net mortgage premiums | (205) | (356) | (485) | (710) | ||||||||||||
Loss on interest rate swaps | 724 | 1,306 | 1,446 | 1,992 | ||||||||||||
Straight-line payments from cross-currency swaps (5) | 584 | 623 | 1,202 | 1,346 | ||||||||||||
Leasing costs and commissions | (121) | (973) | (827) | (1,111) | ||||||||||||
Recurring capital expenditures | (27) | (21) | (50) | (21) | ||||||||||||
Straight-line rent | (11,004) | (6,242) | (21,467) | (14,024) | ||||||||||||
Amortization of above and below-market leases, net | 3,934 | 6,087 | 13,234 | 12,517 | ||||||||||||
Other adjustments (6) | (93) | 121 | (581) | 2,291 | ||||||||||||
AFFO available to common stockholders | $ | 327,647 | $ | 295,241 | $ | 645,869 | $ | 592,463 | ||||||||
AFFO allocable to dilutive noncontrolling interests | 344 | 356 | 695 | 732 | ||||||||||||
Diluted AFFO | $ | 327,991 | $ | 295,597 | $ | 646,564 | $ | 593,195 | ||||||||
AFFO per common share, basic and diluted | $ | 0.88 | $ | 0.86 | $ | 1.73 | $ | 1.74 | ||||||||
Distributions paid to common stockholders | $ | 263,358 | $ | 240,470 | $ | 524,056 | $ | 474,294 | ||||||||
AFFO available to common stockholders in excess of | $ | 64,289 | $ | 54,771 | $ | 121,813 | $ | 118,169 | ||||||||
Weighted average number of common shares used for AFFO: | ||||||||||||||||
Basic | 374,236,424 | 343,515,406 | 372,879,165 | 340,061,487 | ||||||||||||
Diluted | 374,804,142 | 344,148,378 | 373,434,863 | 340,744,384 | ||||||||||||
(1) | As of June 30, 2021, there was |
(2) | See Normalized FFO calculations on page ten for reconciling items. |
(3) | The executive severance charge represents the incremental costs incurred upon our former CFO's departure in March 2020, consisting of |
(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 June 30, | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||
Net income available to common stockholders | $ | 124,479 | $ | 107,824 | $ | 95,194 | $ | 96,380 | $ | 81,136 | ||||||||||
Depreciation and amortization, net of furniture, | 187,716 | 168,176 | 150,279 | 133,831 | 122,939 | |||||||||||||||
Provisions for impairment | 17,246 | 13,869 | 13,061 | 3,951 | 2,274 | |||||||||||||||
Gain on sales of real estate | (14,901) | (1,323) | (6,891) | (7,787) | (2,839) | |||||||||||||||
FFO adjustments allocable to noncontrolling interests | (165) | (208) | (154) | (293) | (238) | |||||||||||||||
FFO available to common stockholders | $ | 314,375 | $ | 288,338 | $ | 251,489 | $ | 226,082 | $ | 203,272 | ||||||||||
Merger-related costs | 13,298 | — | — | — | — | |||||||||||||||
Normalized FFO available to common stockholders | $ | 327,673 | $ | 288,338 | $ | 251,489 | $ | 226,082 | $ | 203,272 | ||||||||||
FFO per diluted share | $ | 0.84 | $ | 0.84 | $ | 0.81 | $ | 0.79 | $ | 0.75 | ||||||||||
Normalized FFO per diluted share | $ | 0.88 | $ | 0.84 | $ | 0.81 | $ | 0.79 | $ | 0.75 | ||||||||||
AFFO available to common stockholders | $ | 327,647 | $ | 295,241 | $ | 253,935 | $ | 226,988 | $ | 208,388 | ||||||||||
AFFO per diluted share | $ | 0.88 | $ | 0.86 | $ | 0.82 | $ | 0.80 | $ | 0.76 | ||||||||||
. | ||||||||||||||||||||
Cash dividends paid per share | $ | 0.705 | $ | 0.699 | $ | 0.678 | $ | 0.659 | $ | 0.633 | ||||||||||
Weighted average diluted shares outstanding - FFO, | 374,804,142 | 344,148,378 | 311,785,281 | 285,372,256 | 273,187,669 | |||||||||||||||
For the six months ended June 30, | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||
Net income available to common stockholders | $ | 220,419 | $ | 254,651 | $ | 206,136 | $ | 179,543 | $ | 152,722 | ||||||||||
Depreciation and amortization, net of furniture, fixtures and equipment | 365,330 | 332,635 | 287,641 | 264,775 | 243,879 | |||||||||||||||
Provisions for impairment | 19,966 | 18,347 | 17,733 | 18,172 | 7,706 | |||||||||||||||
Gain on sales of real estate | (23,302) | (39,829) | (14,154) | (11,005) | (13,371) | |||||||||||||||
FFO adjustments allocable to noncontrolling interests | (331) | (363) | (192) | (521) | (453) | |||||||||||||||
FFO available to common stockholders | $ | 582,082 | $ | 565,441 | $ | 497,164 | $ | 450,964 | $ | 390,483 | ||||||||||
Merger-related costs | 13,298 | — | — | — | — | |||||||||||||||
Normalized FFO available to common stockholders | $ | 595,380 | $ | 565,441 | $ | 497,164 | $ | 450,964 | $ | 390,483 | ||||||||||
FFO per diluted share | $ | 1.56 | $ | 1.66 | $ | 1.62 | $ | 1.58 | $ | 1.46 | ||||||||||
Normalized FFO per diluted share | $ | 1.60 | $ | 1.66 | $ | 1.62 | $ | 1.58 | $ | 1.46 | ||||||||||
AFFO available to common stockholders | $ | 645,869 | $ | 592,463 | $ | 502,669 | $ | 451,549 | $ | 409,723 | ||||||||||
AFFO per diluted share | $ | 1.73 | $ | 1.74 | $ | 1.63 | $ | 1.59 | $ | 1.53 | ||||||||||
. | ||||||||||||||||||||
Cash dividends paid per share | $ | 1.409 | $ | 1.392 | $ | 1.350 | $ | 1.309 | $ | 1.257 | ||||||||||
Weighted average diluted shares outstanding - FFO, Normalized FFO, and AFFO | 373,434,863 | 340,744,384 | 308,000,806 | 284,924,336 | 268,569,855 | |||||||||||||||
REALTY INCOME CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(dollars in thousands, except per share and share count data) (unaudited) | ||||||||
June 30, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||
Real estate held for investment, at cost: | ||||||||
Land | $ | 6,975,008 | $ | 6,318,926 | ||||
Buildings and improvements | 15,700,846 | 14,696,712 | ||||||
Total real estate held for investment, at cost | 22,675,854 | 21,015,638 | ||||||
Less accumulated depreciation and amortization | (3,775,540) | (3,549,486) | ||||||
Real estate held for investment, net | 18,900,314 | 17,466,152 | ||||||
Real estate and lease intangibles held for sale, net | 39,540 | 19,004 | ||||||
Cash and cash equivalents | 231,164 | 824,476 | ||||||
Accounts receivable, net | 327,920 | 285,701 | ||||||
Lease intangible assets, net | 1,969,793 | 1,710,655 | ||||||
Other assets, net | 516,210 | 434,297 | ||||||
Total assets | $ | 21,984,941 | $ | 20,740,285 | ||||
LIABILITIES AND EQUITY | ||||||||
Distributions payable | $ | 90,455 | $ | 85,691 | ||||
Accounts payable and accrued expenses | 259,805 | 241,336 | ||||||
Lease intangible liabilities, net | 319,495 | 321,198 | ||||||
Other liabilities | 276,120 | 256,863 | ||||||
Line of credit payable and commercial paper | 1,285,306 | — | ||||||
Term loan, net | 249,457 | 249,358 | ||||||
Mortgages payable, net | 300,574 | 300,360 | ||||||
Notes payable, net | 7,330,050 | 8,267,749 | ||||||
Total liabilities | 10,111,262 | 9,722,555 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock and paid in capital, par value | 15,827,231 | 14,700,050 | ||||||
Distributions in excess of net income | (3,968,333) | (3,659,933) | ||||||
Accumulated other comprehensive loss | (19,366) | (54,634) | ||||||
Total stockholders' equity | 11,839,532 | 10,985,483 | ||||||
Noncontrolling interests | 34,147 | 32,247 | ||||||
Total equity | 11,873,679 | 11,017,730 | ||||||
Total liabilities and equity | $ | 21,984,941 | $ | 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 | ( | ( | ( | ||||||||||||||||
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YTD 2021 | |||||||||||||||||||
Compound Average Annual Total Return (5) | |||||||||||||||||||
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 June 30, 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
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