Realty Income Announces Operating Results For The Three Months And Year Ended December 31, 2021
Realty Income Corporation has reported strong financial results for the year and quarter ended December 31, 2021, despite a challenging environment. Net income per share was $0.87 for the year and $0.01 for the quarter. Normalized FFO per share rose 2.4% to $3.39, while AFFO increased 5.9% to $3.59. The company raised $4.51 billion through common stock sales and completed a significant merger with VEREIT, enhancing its portfolio. Portfolio occupancy remained high at 98.5%, with $6.41 billion invested in properties during the year.
- Normalized FFO per share increased 2.4% to $3.39.
- AFFO per share rose 5.9% to $3.59.
- Completed merger with VEREIT, enhancing portfolio.
- Raised $4.51 billion from common stock sales.
- Invested $6.41 billion in 911 properties during 2021.
- Portfolio occupancy was 98.5%.
- Net income available to common stockholders decreased to $4.0 million for Q4 2021, down from $117.9 million in Q4 2020.
- A loss on extinguishment of debt of $46.4 million was recognized due to early redemption of notes.
SAN DIEGO, Feb. 22, 2022 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced operating results for the three months and year ended December 31, 2021. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.
COMPANY HIGHLIGHTS:
For the year ended December 31, 2021:
- Net income per share was
$0.87 - Normalized FFO per share increased
2.4% to$3.39 , compared to the year ended December 31, 2020, which includes the$0.22 per share loss from the early redemption on our 2022 and 2023 notes - AFFO per share increased
5.9% to$3.59 , compared to the year ended December 31, 2020 - In November 2021, completed our merger with VEREIT, Inc. (VEREIT) and divestiture of substantially all of the combined company office properties through the Orion Office REIT Inc. spin-off
- Excluding our merger with VEREIT, invested
$6.41 billion in 911 properties and properties under development or expansion, including$2.57 billion in Europe - Shareholders realized a
5.1% increase in the amount of the dividend paid per share in December 2021 as compared to December 2020 - Raised
$4.51 billion from the sale of common stock, primarily through our At-The-Market (ATM) program - In conjunction with our merger with VEREIT, completed the
$4.65 billion exchange in principal of U.S. dollar-denominated outstanding notes issued by VEREIT for new notes issued by Realty Income - Issued
£400 million of1.125% senior unsecured notes due 2027 and£350 million of1.750% senior unsecured notes due 2033, both of which represented our debut Sterling-denominated green bond offering
For the three months ended December 31, 2021:
- Net income per share was
$0.01 - Normalized FFO per share increased
7.2% to$0.89 , compared to the three months ended December 31, 2020, which includes the$0.09 per share loss from the early redemption on our 2023 notes - AFFO per share increased
11.9% to$0.94 , compared to the three months ended December 31, 2020 - Excluding our merger with VEREIT, invested
$2.63 billion in 401 properties and properties under development or expansion, including$1.04 billion in Europe - Priscilla Almodovar and Mary Hogan Preusse joined our Board of Directors
- Completed the early redemption on all
$750.0 million in principal amount of our outstanding4.650% notes due August 2023 - Raised
$1.72 billion from the sale of common stock, primarily through our ATM program - Net debt to annualized pro forma adjusted EBITDAre was 5.3x
Events subsequent to December 31, 2021:
- Issued
£250.0 million of1.875% senior unsecured notes due 2027 and£250.0 million of2.500% senior unsecured notes due 2042
CEO Comments
"2021 was a milestone year and I am deeply appreciative of our talented 'One Team' and all that we have accomplished," said Sumit Roy, Realty Income's President and Chief Executive Officer. "In addition to closing our merger with VEREIT, we expanded our global platform through our investment in Spain, a new growth vertical in Continental Europe. To that end, we invested a record
Select Financial Results
The following summarizes our select financial results (dollars in millions, except per share data):
Three Months Ended December 31, | Year Ended December 31, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Total revenue | $ 685.0 | $ 417.6 | $ 2,080.5 | $ 1,647.1 | ||||
Net income available to common stockholders (1)(2) | $ 4.0 | $ 117.9 | $ 359.5 | $ 395.5 | ||||
Net income per share | $ 0.01 | $ 0.33 | $ 0.87 | $ 1.14 | ||||
Funds from operations available to common | $ 326.2 | $ 293.7 | $ 1,240.6 | $ 1,142.1 | ||||
FFO per share | $ 0.63 | $ 0.83 | $ 2.99 | $ 3.31 | ||||
Normalized funds from operations available to | $ 463.5 | $ 293.7 | $ 1,408.0 | $ 1,142.1 | ||||
Normalized FFO per share | $ 0.89 | $ 0.83 | $ 3.39 | $ 3.31 | ||||
Adjusted funds from operations available to common | $ 486.0 | $ 297.7 | $ 1,488.8 | $ 1,172.6 | ||||
AFFO per share | $ 0.94 | $ 0.84 | $ 3.59 | $ 3.39 | ||||
(1) | The calculation to determine net income attributable to common stockholders includes provisions for impairment, gains on sales of real estate, and |
(2) | Our financial results during the year ended December 31, 2021 were primarily impacted by the following transactions: (i) a |
(3) | FFO, Normalized FFO, and AFFO are non-GAAP financial measures. Normalized FFO is based on FFO and adjusted to exclude merger and integration-related costs related to our 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 December 31, 2021 for our definitions and explanations of how we utilize these metrics. See pages 11 and 12 herein for reconciliations to the most directly comparable GAAP measure. |
Rent Collections Update
Percentages of Contractual Rent Collected as of December 31, 2021
Month Ended October 31, 2021 | Month Ended November 30, 2021 | Month Ended December 31, 2021 | Quarter Ended December 31, 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 | |||||||
Contractual rent collected from our theater clients | |||||||
Contractual rent collected from our health and fitness |
(1) | Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through December 31, 2021, divided by the contractual rent charged for the applicable period. Rent collection percentages are calculated based on contractual rent (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 rent 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 December 31, 2021 for all |
(3) | Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended December 31, 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 and Reserve Reversals (1)
The following table summarizes reserves and reserve reversals to rental revenue across the entire portfolio (dollars in millions):
Three Months Ended | Year Ended | ||||
December 31, 2021 | December 31, 2021 | ||||
Rental revenue reserves (reserve reversals) | |||||
Theater industry | $ (6.3) | $ 6.5 | |||
Other | 1.5 | 3.7 | |||
Total rental revenue reserves | $ (4.8) | $ 10.2 | |||
Straight-line rent reserves (reserve reversals) | |||||
Theater industry | $ 5.6 | $ 5.8 | |||
Other | — | (1.3) | |||
Total straight-line rent reserves | $ 5.6 | $ 4.5 | |||
Total reserves (reserve reversals) | |||||
Theater industry | $ (0.7) | $ 12.3 | |||
Other | 1.5 | 2.4 | |||
Total reserves | $ 0.8 | $ 14.7 | |||
(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. References to reserve reversals recorded as increases to rental revenue include amounts where the accounting for recognition of rental revenue and straight-line rental revenue has been moved from the cash to the accrual basis. |
Theater Industry Update
As of December 31, 2021, our clients in the theater industry represented
For the years ended December 31, 2021 and 2020, we recorded
At December 31, 2021, the receivables outstanding across the portfolio totaled
We did not record any provisions for impairment on theater properties for the year ended December 31, 2021. See "Item 1A—Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021 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 December 2021, we announced the 97th consecutive quarterly dividend increase, which is the 114th 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 December 31, 2021 was
Real Estate Portfolio Update
As of December 31, 2021, our portfolio consisted of 11,136 properties located in all 50 U.S. states, Puerto Rico, the U.K. and Spain, and leased to approximately 1,040 clients doing business in 60 separate industries. We own an actively managed, diversified portfolio of commercial properties under long-term, net lease agreements with a weighted average remaining lease term of approximately 9.0 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of December 31, 2021, portfolio occupancy was
Changes in Occupancy
Three months ended December 31, 2021 | |
Properties available for lease at September 30, 2021 | 86 |
Lease expirations (1)(2) | 354 |
Re-leases to same client | (210) |
Re-leases to new client | (13) |
Vacant dispositions | (53) |
Properties available for lease at December 31, 2021 | 164 |
Year ended December 31, 2021 | |
Properties available for lease at December 31, 2020 | 140 |
Lease expirations (1)(2) | 529 |
Re-leases to same client | (336) |
Re-leases to new client | (36) |
Vacant dispositions | (133) |
Properties available for lease at December 31, 2021 | 164 |
(1) | Includes 103 net vacancies assumed from the combined effect of our merger with VEREIT and spin-off of office properties to Orion Office REIT Inc. in November 2021. |
(2) | 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 December 31, 2021, the annual new rent on re-leases was
During the year ended December 31, 2021, the annual new rent on re-leases was
Investments in Real Estate
The following table summarizes our acquisitions in the U.S. and Europe for the periods indicated below (excludes properties assumed on November 1, 2021 in conjunction with our merger with VEREIT):
Number of Properties | Leasable Square Feet | Investment ($ in thousands) | Weighted Average Lease Term (Years) | Initial Weighted Cash Lease Yield (1) | |||||
Three months ended December 31, 2021 | |||||||||
Acquisitions - U.S. (in 35 states) | 299 | 5,500,972 | $ 1,535,472 | 14.6 | |||||
Acquisitions - Europe (U.K. and Spain) | 58 | 3,979,153 | 1,038,093 | 13.5 | |||||
Total acquisitions | 357 | 9,480,125 | 2,573,565 | 14.2 | |||||
Properties under development (2) | 44 | 2,422,607 | 61,320 | 15.3 | |||||
Total (3) | 401 | 11,902,732 | $ 2,634,885 | 14.2 | |||||
Year ended December 31, 2021 | |||||||||
Acquisitions - U.S. (in 43 states) | 714 | 14,727,335 | $ 3,608,573 | 14.1 | |||||
Acquisitions - Europe (U.K. and Spain) | 129 | 9,196,345 | 2,558,909 | 11.6 | |||||
Total acquisitions | 843 | 23,923,680 | $ 6,167,482 | 13.1 | |||||
Properties under development (2) | 68 | 2,681,676 | 243,278 | 15.7 | |||||
Total (4) | 911 | 26,605,356 | $ 6,410,760 | 13.2 |
(1) | Initial weighted 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 December 31, 2021 for our definition of this metric. Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately |
(2) | The three months and year ended December 31, 2021 includes |
(3) | Our clients occupying the new properties are |
(4) | Our clients occupying the new properties are |
Same Store Rental Revenue
The following summarizes our same store rental revenue on 6,046 properties under lease (dollars in millions):
Three Months Ended December 31, | Year Ended December 31, | Increase | |||||||||
2021 | 2020 | 2021 | 2020 | Three Months | Twelve Months | ||||||
Rental revenue | $ 369.4 | $ 352.2 | $ 1,457.6 | $ 1,418.5 | |||||||
For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2021 of 1.35 GBP/USD. None of the properties in Spain met our same store pool definition for the periods presented. In addition, the same store pool excludes properties assumed on November 1, 2021 as a result of our merger with VEREIT.
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 impacted by (reserve reversals) and reserves to rental revenue of
Property Dispositions
The following summarizes our property dispositions (dollars in millions). These amounts exclude properties disposed from the spin-off of office properties to Orion Office REIT Inc. in November 2021.
Three Months Ended | Year Ended December 31, 2021 | |||
Properties sold | 58 | 154 | ||
Net sales proceeds | $ 126.8 | $ 250.3 | ||
Gain on sales of real estate | $ 20.4 | $ 55.8 |
Liquidity and Capital Markets
Capital Raising
During the three months ended December 31, 2021, we raised
In January 2022, 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
Early Redemption of
In December 2021, we completed the early redemption on all
Completion of Exchange Offers
In connection with our merger with VEREIT, in November 2021, we completed our debt exchange offer to exchange outstanding notes issued by VEREIT's operating partnership, or VEREIT OP, totaling
Earnings Guidance
Summarized below are approximate estimates of the key components of our 2022 earnings guidance:
2022 Guidance | |
Net income per share | |
Real estate depreciation and impairments per share | |
Gains on sales of properties per share | |
Normalized FFO per share (1) | |
AFFO per share (1) | |
Same store rent growth (2) | ~ |
Occupancy | ~ |
Cash G&A expenses (% of revenues) (3)(4) | |
Property expenses (non-reimbursable) (% of revenues) (3) | |
Income tax expenses | |
Acquisition volume | Over |
(1) Normalized FFO per share and AFFO per share exclude merger and integration-related costs associated with our merger with VEREIT. | |
(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 February 23, 2022 at 11:30 a.m. PT to discuss the results. To access the conference call, dial (888) 440-5675 (United States) or (646) 960-0268 (International). When prompted, provide the conference ID 9982808.
A telephone replay of the conference call can also be accessed by calling (800) 770-2030 and entering the conference ID 9982808. The telephone replay will be available through March 9, 2022.
A live webcast will be available in listen-only mode by clicking on the webcast link on the company's home page or in the investors section at www.realtyincome.com. A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. No access code is required for this replay.
Supplemental Materials and Sustainability Report
Supplemental Operating and Financial Data for the three months ended December 31, 2021, including reconciliations for non-GAAP measures within the Glossary, are available on our corporate website at www.realtyincome.com/investors/financial-information/quarterly-results.
The Sustainability Report for the year ended December 31, 2020 is available on our corporate website at www.realtyincome.com/corporate-responsibility. 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 11,100 real estate properties owned under long-term net lease agreements with our commercial clients. To date, the company has declared 620 consecutive common stock monthly dividends throughout its 53-year operating history and increased the dividend 114 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, terms or completion of these acquisitions, uncertainties regarding whether the anticipated benefits of our merger with VEREIT, which closed on November 1, 2021, and the spin-off of the office properties to Orion Office REIT Inc. on November 12, 2021 will be achieved, 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, the ability of clients to adequately manage their properties and fulfill their respective lease obligations to Realty Income, the outcome of any legal proceedings to which Realty Income is a party and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of Realty Income's current operating plans and estimates. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. Realty Income does not undertake any 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.
Investor Contact:
Victoria Prescott, CFA
Senior Director, Capital Markets & Investor Relations
(858) 284-5349
vprescott@realtyincome.com
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
| ||||||||
Three Months | Three Months | Year | Year | |||||
Ended 12/31/21 | Ended 12/31/20 | Ended 12/31/21 | Ended 12/31/20 | |||||
REVENUE | ||||||||
Rental (including reimbursable) (1) | $ 679,000 | $ 415,306 | $ 2,064,958 | $ 1,639,533 | ||||
Other (2) | 6,019 | 2,322 | 15,505 | 7,554 | ||||
Total revenue | 685,019 | 417,628 | 2,080,463 | 1,647,087 | ||||
EXPENSES | ||||||||
Depreciation and amortization | 333,229 | 175,041 | 897,835 | 677,038 | ||||
Interest | 100,739 | 78,764 | 323,644 | 309,336 | ||||
Property (including reimbursable) | 43,710 | 27,135 | 133,605 | 104,603 | ||||
General and administrative | 30,522 | 16,674 | 96,980 | 73,215 | ||||
Provisions for impairment | 7,990 | 23,790 | 38,967 | 147,232 | ||||
Merger and integration-related costs | 137,332 | — | 167,413 | — | ||||
Total expenses | 653,522 | 321,404 | 1,658,444 | 1,311,424 | ||||
Gain on sales of real estate | 20,402 | 22,667 | 55,798 | 76,232 | ||||
Foreign currency and derivative gains, net | 1,880 | 3,311 | 710 | 4,585 | ||||
Loss on extinguishment of debt | (46,722) | — | (97,178) | (9,819) | ||||
Equity in income of unconsolidated entities | 1,106 | — | 1,106 | — | ||||
Other income, net (2) | 6,432 | 448 | 9,949 | 4,538 | ||||
Income before income taxes | 14,595 | 122,650 | 392,404 | 411,199 | ||||
Income taxes | (10,128) | (4,500) | (31,657) | (14,693) | ||||
Net income | 4,467 | 118,150 | 360,747 | 396,506 | ||||
Net income attributable to noncontrolling interests | (426) | (219) | (1,291) | (1,020) | ||||
Net income available to common stockholders | $ 4,041 | $ 117,931 | $ 359,456 | $ 395,486 | ||||
Funds from operations available to common | $ 326,163 | $ 293,700 | $ 1,240,580 | $ 1,142,119 | ||||
Normalized funds from operations available to | $ 463,495 | $ 293,700 | $ 1,407,993 | $ 1,142,119 | ||||
Adjusted funds from operations available to | $ 486,047 | $ 297,654 | $ 1,488,753 | $ 1,172,626 | ||||
Per share information for common stockholders: | ||||||||
Net income: | ||||||||
Basic | $ 0.01 | $ 0.33 | $ 0.87 | $ 1.15 | ||||
Diluted | $ 0.01 | $ 0.33 | $ 0.87 | $ 1.14 | ||||
FFO, basic and diluted | $ 0.63 | $ 0.83 | $ 2.99 | $ 3.31 | ||||
Normalized FFO: | ||||||||
Basic | $ 0.89 | $ 0.83 | $ 3.40 | $ 3.31 | ||||
Diluted | $ 0.89 | $ 0.83 | $ 3.39 | $ 3.31 | ||||
AFFO: | ||||||||
Basic | $ 0.94 | $ 0.84 | $ 3.59 | $ 3.40 | ||||
Diluted | $ 0.94 | $ 0.84 | $ 3.59 | $ 3.39 | ||||
Cash dividends paid per common share | $ 0.718 | $ 0.702 | $ 2.833 | $ 2.794 | ||||
(1) | We recorded reserves to rental revenue of |
(2) | Certain miscellaneous non-recurring revenue has been reclassified from total revenue to "Other income, net" for the three months ended December 31, 2020 and year |
FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized FFO)
(in thousands, except per share and share count data)
FFO and Normalized FFO are non-GAAP financial measures. Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended December 31, 2021 for our definitions and explanations of how we utilize these metrics.
Three Months | Three Months | Year | Year | |||||
Ended 12/31/21 | Ended 12/31/20 | Ended 12/31/21 | Ended 12/31/20 | |||||
Net income available to common stockholders | $ 4,041 | $ 117,931 | $ 359,456 | $ 395,486 | ||||
Depreciation and amortization | 333,229 | 175,041 | 897,835 | 677,038 | ||||
Depreciation of furniture, fixtures and equipment | (352) | (153) | (1,026) | (588) | ||||
Provisions for impairment | 7,990 | 23,790 | 38,967 | 147,232 | ||||
Gain on sales of real estate | (20,402) | (22,667) | (55,798) | (76,232) | ||||
Proportionate share of adjustments for | 1,931 | — | 1,931 | — | ||||
FFO adjustments allocable to noncontrolling | (274) | (242) | (785) | (817) | ||||
FFO available to common stockholders | $ 326,163 | $ 293,700 | $ 1,240,580 | $ 1,142,119 | ||||
FFO allocable to dilutive noncontrolling interests | — | 355 | — | 1,418 | ||||
Diluted FFO | $ 326,163 | $ 294,055 | $ 1,240,580 | $ 1,143,537 | ||||
FFO available to common stockholders | $ 326,163 | $ 293,700 | $ 1,240,580 | $ 1,142,119 | ||||
Merger and integration-related costs | 137,332 | — | 167,413 | — | ||||
Normalized FFO available to common | $ 463,495 | $ 293,700 | $ 1,407,993 | $ 1,142,119 | ||||
Normalized FFO allocable to dilutive | — | 355 | 1,642 | 1,418 | ||||
Diluted Normalized FFO | $ 463,495 | $ 294,055 | $ 1,409,635 | $ 1,143,537 | ||||
FFO per common share, basic and diluted | $ 0.63 | $ 0.83 | $ 2.99 | $ 3.31 | ||||
Normalized FFO per common share: | ||||||||
Basic | $ 0.89 | $ 0.83 | $ 3.40 | $ 3.31 | ||||
Diluted | $ 0.89 | $ 0.83 | $ 3.39 | $ 3.31 | ||||
Distributions paid to common stockholders | $ 371,179 | $ 247,632 | $ 1,169,026 | $ 964,167 | ||||
FFO available to common stockholders in | $ (45,016) | $ 46,068 | $ 71,554 | $ 177,952 | ||||
Normalized FFO available to common | $ 92,316 | $ 46,068 | $ 238,967 | $ 177,952 | ||||
Weighted average number of common shares | ||||||||
Basic | 519,116,544 | 354,437,466 | 414,535,283 | 345,280,126 | ||||
Diluted | 519,438,347 | 355,050,977 | 414,769,846 | 345,878,377 | ||||
Weighted average number of common shares | ||||||||
Basic | 519,116,544 | 354,437,466 | 414,535,283 | 345,280,126 | ||||
Diluted | 519,438,347 | 355,050,977 | 415,270,063 | 345,878,377 |
ADJUSTED FUNDS FROM OPERATIONS (AFFO)
(in thousands, except per share and share count data)
AFFO is a non-GAAP financial measure. Please see the Glossary in the Supplemental Operating and Financial Data for the three months ended December 31, 2021 for our definition and an explanation of how we utilize this metric.
Three Months | Three Months | Year | Year | |||||
Ended 12/31/21 | Ended 12/31/20 | Ended 12/31/21 | Ended 12/31/20 | |||||
Net income available to common stockholders (1) | $ 4,041 | $ 117,931 | $ 359,456 | $ 395,486 | ||||
Cumulative adjustments to calculate Normalized FFO (2) | 459,454 | 175,769 | 1,048,537 | 746,633 | ||||
Normalized FFO available to common stockholders | 463,495 | 293,700 | 1,407,993 | 1,142,119 | ||||
Executive severance charge (3) | — | — | — | 3,463 | ||||
Loss on extinguishment of debt | 46,722 | — | 97,178 | 9,819 | ||||
Amortization of share-based compensation | 3,750 | 3,083 | 16,234 | 14,727 | ||||
Amortization of net debt premiums and deferred | (10,466) | 938 | (6,182) | 3,710 | ||||
Loss on interest rate swaps | 726 | 1,238 | 2,905 | 4,353 | ||||
Straight-line payments from cross-currency swaps (5) | 513 | 613 | 2,228 | 2,573 | ||||
Leasing costs and commissions | (4,175) | (846) | (6,201) | (1,859) | ||||
Recurring capital expenditures | (787) | (72) | (1,202) | (198) | ||||
Straight-line rent and expenses | (25,082) | (6,033) | (61,350) | (26,502) | ||||
Amortization of above and below-market leases, net | 14,424 | 8,015 | 37,970 | 22,940 | ||||
Proportionate share of adjustments for unconsolidated | (1,948) | — | (1,948) | — | ||||
Other adjustments (6) | (1,125) | (2,982) | 1,128 | (2,519) | ||||
AFFO available to common stockholders | $ 486,047 | $ 297,654 | $ 1,488,753 | $ 1,172,626 | ||||
AFFO allocable to dilutive noncontrolling interests | — | 359 | 1,619 | 1,438 | ||||
Diluted AFFO | $ 486,047 | $ 298,013 | $ 1,490,372 | $ 1,174,064 | ||||
AFFO per common share: | ||||||||
Basic | $ 0.94 | $ 0.84 | $ 3.59 | $ 3.40 | ||||
Diluted | $ 0.94 | $ 0.84 | $ 3.59 | $ 3.39 | ||||
Distributions paid to common stockholders | $ 371,179 | $ 247,632 | $ 1,169,026 | $ 964,167 | ||||
AFFO available to common stockholders in excess | $ 114,868 | $ 50,022 | $ 319,727 | $ 208,459 | ||||
Weighted average number of common shares used for AFFO: | ||||||||
Basic | 519,116,544 | 354,437,466 | 414,535,283 | 345,280,126 | ||||
Diluted | 519,438,347 | 355,050,977 | 415,270,063 | 345,878,377 |
(1) | As of December 31, 2021, there was |
(2) | See Normalized FFO calculations on page 11 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 premiums and discounts on notes payable and assumption of our mortgages payable, which are being amortized over the life of the applicable debt, and costs incurred and capitalized upon issuance and exchange of our notes payable, assumption of our mortgages payable and issuance of our term loans, which are also being amortized over the lives of the applicable debt. 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, mark-to-market adjustments on investments and derivatives that do not qualify for hedge accounting, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions. |
HISTORICAL FFO AND AFFO (in thousands, except per share and share count data)
| ||||||||||
For the three months ended December 31, | 2021 | 2020 | 2019 | 2018 | 2017 | |||||
Net income available to common stockholders | $ 4,041 | $ 117,931 | $ 129,297 | $ 85,072 | $ 60,852 | |||||
Depreciation and amortization, net of furniture | 332,877 | 174,888 | 156,467 | 137,553 | 126,915 | |||||
Provisions for impairment | 7,990 | 23,790 | 8,950 | 1,235 | 6,679 | |||||
Gain on sales of real estate | (20,402) | (22,667) | (14,168) | (5,825) | (23,208) | |||||
Proportionate share of adjustments for | 1,931 | — | — | — | — | |||||
FFO adjustments allocable to noncontrolling | (274) | (242) | (150) | (292) | (250) | |||||
FFO available to common stockholders | $ 326,163 | $ 293,700 | $ 280,396 | $ 217,743 | $ 170,988 | |||||
Merger and integration-related costs | 137,332 | — | — | — | — | |||||
Normalized FFO available to common stockholders | $ 463,495 | $ 293,700 | $ 280,396 | $ 217,743 | $ 170,988 | |||||
FFO per diluted share | $ 0.63 | $ 0.83 | $ 0.85 | $ 0.73 | $ 0.61 | |||||
Normalized FFO per diluted share | $ 0.89 | $ 0.83 | $ 0.85 | $ 0.73 | $ 0.61 | |||||
AFFO available to common stockholders | $ 486,047 | $ 297,654 | $ 281,986 | $ 236,813 | $ 215,312 | |||||
AFFO per diluted share | $ 0.94 | $ 0.84 | $ 0.86 | $ 0.79 | $ 0.76 | |||||
. | ||||||||||
Cash dividends paid per share | $ 0.718 | $ 0.702 | $ 0.681 | $ 0.662 | $ 0.636 | |||||
Weighted average diluted shares outstanding - FFO | 519,438,347 | 355,050,977 | 329,364,027 | 298,609,734 | 282,023,488 | |||||
Weighted average diluted shares outstanding - | 519,438,347 | 355,050,977 | 329,364,027 | 298,609,734 | 282,428,692 | |||||
For the year ended December 31, | 2021 | 2020 | 2019 | 2018 | 2017 | |||||
Net income available to common stockholders | $ 359,456 | $ 395,486 | $ 436,482 | $ 363,614 | $ 301,514 | |||||
Depreciation and amortization, net of furniture, | 896,809 | 676,450 | 593,396 | 539,130 | 498,231 | |||||
Provisions for impairment | 38,967 | 147,232 | 40,186 | 26,269 | 14,751 | |||||
Gain on sales of real estate | (55,798) | (76,232) | (29,996) | (24,643) | (40,898) | |||||
Proportionate share of adjustments for | 1,931 | — | — | — | — | |||||
FFO adjustments allocable to noncontrolling | (785) | (817) | (477) | (1,113) | (933) | |||||
FFO available to common stockholders | $ 1,240,580 | $ 1,142,119 | $ 1,039,591 | $ 903,257 | $ 772,665 | |||||
Merger and integration-related costs | 167,413 | — | — | — | — | |||||
Normalized FFO available to common stockholders | $ 1,407,993 | $ 1,142,119 | $ 1,039,591 | $ 903,257 | $ 772,665 | |||||
FFO per diluted share | $ 2.99 | $ 3.31 | $ 3.29 | $ 3.12 | $ 2.82 | |||||
Normalized FFO per diluted share | $ 3.39 | $ 3.31 | $ 3.29 | $ 3.12 | $ 2.82 | |||||
AFFO available to common stockholders | $ 1,488,753 | $ 1,172,626 | $ 1,050,015 | $ 924,558 | $ 838,638 | |||||
AFFO per diluted share | $ 3.59 | $ 3.39 | $ 3.32 | $ 3.19 | $ 3.06 | |||||
Cash dividends paid per share | $ 2.833 | $ 2.794 | $ 2.711 | $ 2.631 | $ 2.527 | |||||
Weighted average diluted shares outstanding - FFO | 414,769,846 | 345,878,377 | 316,601,350 | 289,923,984 | 273,936,752 | |||||
Weighted average diluted shares outstanding - | 415,270,063 | 345,878,377 | 316,601,350 | 289,923,984 | 273,936,752 | |||||
Weighted average diluted shares outstanding - | 415,270,063 | 345,878,377 | 316,601,350 | 289,923,984 | 274,024,934 |
REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share and share count data) (unaudited)
| ||||
December 31, 2021 | December 31, 2020 | |||
ASSETS | ||||
Real estate held for investment, at cost: | ||||
Land | $ 10,753,750 | $ 6,318,926 | ||
Buildings and improvements | 25,155,178 | 14,696,712 | ||
Total real estate held for investment, at cost | 35,908,928 | 21,015,638 | ||
Less accumulated depreciation and amortization | (3,949,798) | (3,549,486) | ||
Real estate held for investment, net | 31,959,130 | 17,466,152 | ||
Real estate and lease intangibles held for sale, net | 30,470 | 19,004 | ||
Cash and cash equivalents | 258,579 | 824,476 | ||
Accounts receivable, net | 426,768 | 285,701 | ||
Lease intangible assets, net | 5,275,304 | 1,710,655 | ||
Goodwill | 3,676,705 | 14,180 | ||
Investment in unconsolidated entities | 140,967 | — | ||
Other assets, net | 1,369,579 | 420,117 | ||
Total assets | $ 43,137,502 | $ 20,740,285 | ||
LIABILITIES AND EQUITY | ||||
Distributions payable | $ 146,919 | $ 85,691 | ||
Accounts payable and accrued expenses | 351,128 | 241,336 | ||
Lease intangible liabilities, net | 1,308,221 | 321,198 | ||
Other liabilities | 759,197 | 256,863 | ||
Line of credit payable and commercial paper | 1,551,376 | — | ||
Term loan, net | 249,557 | 249,358 | ||
Mortgages payable, net | 1,141,995 | 300,360 | ||
Notes payable, net | 12,499,709 | 8,267,749 | ||
Total liabilities | 18,008,102 | 9,722,555 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock and paid in capital, par value | 29,578,212 | 14,700,050 | ||
Distributions in excess of net income | (4,530,571) | (3,659,933) | ||
Accumulated other comprehensive income (loss) | 4,933 | (54,634) | ||
Total stockholders' equity | 25,052,574 | 10,985,483 | ||
Noncontrolling interests | 76,826 | 32,247 | ||
Total equity | 25,129,400 | 11,017,730 | ||
Total liabilities and equity | $ 43,137,502 | $ 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) | ||||||||||
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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 December 31, 2021, and (except for NASDAQ) assume reinvestment of dividends. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future. |
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SOURCE Realty Income Corporation
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