Realty Income Announces Operating Results for the Three Months and Year Ended December 31, 2024
Realty Income (NYSE: O) reported strong operating results for Q4 and full-year 2024. Net income for Q4 was $199.6 million ($0.23 per share), while AFFO per share increased 4.0% to $1.05. For the full year, net income reached $847.9 million ($0.98 per share) with AFFO growing 4.8% to $4.19 per share.
The company invested $1.7 billion in Q4 at a 7.1% initial weighted average cash yield and $3.9 billion for the full year at 7.4%. Portfolio occupancy remained strong at 98.7% with successful rent recapture rates of 107.4% in Q4 and 105.6% for 2024.
Notable developments include a $2.0 billion share repurchase program authorized in February 2025, and the announcement of the 109th consecutive quarterly dividend increase. The company raised $947.8 million from common stock sales in Q4 at an average price of $58.12, primarily through their ATM program.
Realty Income (NYSE: O) ha riportato risultati operativi solidi per il quarto trimestre e per l'intero anno 2024. L'utile netto per il quarto trimestre è stato di 199,6 milioni di dollari (0,23 dollari per azione), mentre l'AFFO per azione è aumentato del 4,0% a 1,05 dollari. Per l'intero anno, l'utile netto ha raggiunto 847,9 milioni di dollari (0,98 dollari per azione) con un AFFO in crescita del 4,8% a 4,19 dollari per azione.
La società ha investito 1,7 miliardi di dollari nel quarto trimestre con un rendimento medio ponderato iniziale in contante del 7,1% e 3,9 miliardi di dollari per l'intero anno con un rendimento del 7,4%. L'occupazione del portafoglio è rimasta forte al 98,7% con tassi di recupero degli affitti di successo del 107,4% nel quarto trimestre e del 105,6% per il 2024.
Sviluppi notevoli includono un programma di riacquisto di azioni da 2,0 miliardi di dollari autorizzato a febbraio 2025 e l'annuncio del 109° aumento consecutivo del dividendo trimestrale. La società ha raccolto 947,8 milioni di dollari dalla vendita di azioni ordinarie nel quarto trimestre a un prezzo medio di 58,12 dollari, principalmente attraverso il loro programma ATM.
Realty Income (NYSE: O) reportó resultados operativos sólidos para el cuarto trimestre y el año completo 2024. El ingreso neto para el cuarto trimestre fue de 199,6 millones de dólares (0,23 dólares por acción), mientras que el AFFO por acción aumentó un 4,0% a 1,05 dólares. Para el año completo, el ingreso neto alcanzó los 847,9 millones de dólares (0,98 dólares por acción) con un AFFO creciendo un 4,8% a 4,19 dólares por acción.
La compañía invirtió 1,7 mil millones de dólares en el cuarto trimestre con un rendimiento promedio ponderado inicial en efectivo del 7,1% y 3,9 mil millones de dólares para el año completo con un 7,4%. La ocupación de la cartera se mantuvo fuerte en un 98,7% con tasas de recuperación de alquiler exitosas del 107,4% en el cuarto trimestre y del 105,6% para 2024.
Desarrollos notables incluyen un programa de recompra de acciones de 2,0 mil millones de dólares autorizado en febrero de 2025, y el anuncio del 109° aumento consecutivo del dividendo trimestral. La compañía recaudó 947,8 millones de dólares de la venta de acciones comunes en el cuarto trimestre a un precio promedio de 58,12 dólares, principalmente a través de su programa ATM.
Realty Income (NYSE: O)는 2024년 4분기 및 연간 운영 결과가 강력하다고 보고했습니다. 4분기 순이익은 1억 9960만 달러(주당 0.23달러)였으며, AFFO는 주당 1.05달러로 4.0% 증가했습니다. 연간 순이익은 8억 4790만 달러(주당 0.98달러)에 도달했으며, AFFO는 주당 4.19달러로 4.8% 성장했습니다.
회사는 4분기 동안 17억 달러를 초기 가중 평균 현금 수익률 7.1%로 투자했으며, 연간 39억 달러를 7.4%로 투자했습니다. 포트폴리오 점유율은 98.7%로 강력하게 유지되었으며, 4분기에는 107.4%, 2024년에는 105.6%의 성공적인 임대 회수율을 기록했습니다.
주목할 만한 발전으로는 2025년 2월에 승인된 20억 달러 규모의 자사주 매입 프로그램과 109번째 연속 분기 배당금 증가 발표가 포함됩니다. 회사는 4분기 동안 평균 58.12달러의 가격으로 보통주 판매를 통해 9억 4780만 달러를 모금했습니다. 주로 ATM 프로그램을 통해서입니다.
Realty Income (NYSE: O) a annoncé de solides résultats opérationnels pour le quatrième trimestre et l'année complète 2024. Le revenu net pour le quatrième trimestre était de 199,6 millions de dollars (0,23 dollar par action), tandis que l'AFFO par action a augmenté de 4,0 % pour atteindre 1,05 dollar. Pour l'année entière, le revenu net a atteint 847,9 millions de dollars (0,98 dollar par action) avec un AFFO en hausse de 4,8 % à 4,19 dollars par action.
L'entreprise a investi 1,7 milliard de dollars au quatrième trimestre avec un rendement initial moyen pondéré en espèces de 7,1 % et 3,9 milliards de dollars pour l'année entière avec 7,4 %. Le taux d'occupation du portefeuille est resté fort à 98,7 % avec des taux de recouvrement des loyers réussis de 107,4 % au quatrième trimestre et de 105,6 % pour 2024.
Les développements notables comprennent un programme de rachat d'actions de 2,0 milliards de dollars autorisé en février 2025, ainsi que l'annonce de la 109e augmentation consécutive du dividende trimestriel. L'entreprise a levé 947,8 millions de dollars grâce à la vente d'actions ordinaires au quatrième trimestre à un prix moyen de 58,12 dollars, principalement par le biais de son programme ATM.
Realty Income (NYSE: O) hat starke Betriebsergebnisse für das vierte Quartal und das gesamte Jahr 2024 berichtet. Der Nettogewinn für das vierte Quartal betrug 199,6 Millionen Dollar (0,23 Dollar pro Aktie), während das AFFO pro Aktie um 4,0% auf 1,05 Dollar anstieg. Für das gesamte Jahr erreichte der Nettogewinn 847,9 Millionen Dollar (0,98 Dollar pro Aktie), während das AFFO um 4,8% auf 4,19 Dollar pro Aktie wuchs.
Das Unternehmen investierte im vierten Quartal 1,7 Milliarden Dollar mit einer anfänglichen gewichteten durchschnittlichen Bargeldrendite von 7,1% und 3,9 Milliarden Dollar für das gesamte Jahr mit 7,4%. Die Portfoliobelegung blieb stark bei 98,7% mit erfolgreichen Mietrückgewinnungsraten von 107,4% im vierten Quartal und 105,6% für 2024.
Bemerkenswerte Entwicklungen umfassen ein Aktienrückkaufprogramm über 2,0 Milliarden Dollar, das im Februar 2025 genehmigt wurde, sowie die Ankündigung der 109. aufeinanderfolgenden Erhöhung der vierteljährlichen Dividende. Das Unternehmen sammelte im vierten Quartal 947,8 Millionen Dollar durch den Verkauf von Stammaktien zu einem Durchschnittspreis von 58,12 Dollar, hauptsächlich über ihr ATM-Programm.
- AFFO per share increased 4.8% year-over-year to $4.19
- Strong portfolio occupancy at 98.7%
- Achieved 107.4% rent recapture rate in Q4 2024
- $3.7 billion in liquidity as of December 31, 2024
- Invested $3.9 billion at 7.4% initial weighted average cash yield in 2024
- Net Debt to Annualized Pro Forma Adjusted EBITDAre at 5.4x
- Dilution from $1.8 billion in common stock sales during 2024
Insights
The Q4 and FY2024 results reveal Realty Income's robust operational execution and strategic positioning. The 4.8% AFFO per share growth to
Three key metrics deserve attention: First, the 7.4% initial cash yield on
The company's capital structure shows prudent management with a Net Debt to EBITDAre of 5.4x. The
The dividend metrics underscore sustainability: a 74.6% AFFO payout ratio provides ample coverage, while the
Same-store performance and global diversification across 15,621 properties in eight countries position Realty Income for continued stable growth. The 9.3-year weighted average lease term provides excellent cash flow visibility, while the broad tenant diversification across 1,565 clients mitigates concentration risk.
COMPANY HIGHLIGHTS:
For the three months ended December 31, 2024:
- Net income available to common stockholders was
$199.6 million $0.23 - Adjusted Funds from Operations ("AFFO") per share increased
4.0% to$1.05 - Invested
$1.7 billion 7.1% - Net Debt to Annualized Pro Forma Adjusted EBITDAre was 5.4x
- Raised
$947.8 million $58.12 - Achieved a rent recapture rate of
107.4% on properties re-leased
For the year ended December 31, 2024:
- Net income available to common stockholder was
$847.9 million $0.98 - AFFO increased
4.8% to$4.19 - Invested
$3.9 billion 7.4% - Raised
$1.8 billion $58.33 - Achieved a rent recapture rate of
105.6% on properties re-leased
Events subsequent to December 31, 2024:
- In February 2025, our Board of Directors authorized a share repurchase program for up to
$2.0 billion
CEO Comments "I am pleased with our performance in 2024 as we delivered a
Select Financial Results
The following summarizes our select financial results (dollars in millions, except per share data):
Three months ended December 31, | Years ended December 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Total revenue | $ 1,340.3 | $ 1,076.3 | $ 5,271.1 | $ 4,079.0 | ||||
Net income available to common stockholders (1) (2) | $ 199.6 | $ 218.4 | $ 847.9 | $ 872.3 | ||||
Net income per share | $ 0.23 | $ 0.30 | $ 0.98 | $ 1.26 | ||||
Funds from operations available to common | $ 897.9 | $ 713.7 | $ 3,467.7 | $ 2,822.1 | ||||
FFO per share | $ 1.02 | $ 0.98 | $ 4.01 | $ 4.07 | ||||
Normalized funds from operations available to | $ 888.7 | $ 723.6 | $ 3,564.0 | $ 2,836.6 | ||||
Normalized FFO per share | $ 1.01 | $ 1.00 | $ 4.12 | $ 4.09 | ||||
Adjusted funds from operations available to common | $ 921.9 | $ 731.0 | $ 3,621.4 | $ 2,774.9 | ||||
AFFO per share | $ 1.05 | $ 1.01 | $ 4.19 | $ 4.00 | ||||
(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 months and year ended December 31, 2024 were impacted by the following: (i) merger, transaction, and other costs, net of |
(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, net 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 9 and 10 herein for reconciliations to the most directly comparable GAAP measure. |
Dividend Increases
In December 2024, we announced the 109th consecutive quarterly dividend increase, which is the 128th increase since our listing on the NYSE in 1994. The annualized dividend amount as of December 31, 2024 was
In February 2025, we announced an increase in our monthly dividend to
Real Estate Portfolio Update
As of December 31, 2024, we owned or held interests in 15,621 properties, which were leased to 1,565 clients doing business in 89 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 9.3 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of December 31, 2024, portfolio occupancy was
Changes in Occupancy
Three months ended December 31, 2024 | |
Properties available for lease at September 30, 2024 | 196 |
Lease expirations (1) | 286 |
Re-leases to same client | (197) |
Re-leases to new client | (24) |
Vacant dispositions | (56) |
Properties available for lease at December 31, 2024 | 205 |
Year ended December 31, 2024 | |
Properties available for lease at December 31, 2023 | 193 |
Lease expirations (1) | 928 |
Re-leases to same client | (638) |
Re-leases to new client | (56) |
Vacant dispositions | (222) |
Properties available for lease at December 31, 2024 | 205 |
(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 December 31, 2024, the new annualized contractual rent on re-leases was
During the year ended December 31, 2024, the new annualized contractual rent on re-leases was
Investment Summary
The following table summarizes our investments in the
Number of Properties | Investment ($ in millions) | Leasable Square Feet (in thousands) | Initial Cash Yield (1) | Weighted Average Term (Years) | |||||
Three months ended December 31, 2024 | |||||||||
Acquisitions - | 200 | $ 988.6 | 1,165 | 6.4 % | 14.1 | ||||
Acquisitions - Europe real estate | 33 | 327.6 | 1,806 | 6.8 % | 7.5 | ||||
Total real estate acquisitions | 233 | $ 1,316.2 | 2,971 | 6.5 % | 12.4 | ||||
Real estate properties under development (2) | 75 | 149.4 | 4,776 | 7.6 % | 14.7 | ||||
Other investments (3) | — | 254.2 | — | 10.1 % | 6.0 | ||||
Total investments (4) | 308 | $ 1,719.8 | 7,747 | 7.1 % | 11.3 | ||||
Year ended December 31, 2024 | |||||||||
Acquisitions - | 287 | $ 1,402.9 | 3,535 | 6.7 % | 13.9 | ||||
Acquisitions - Europe real estate | 62 | 1,072.0 | 4,263 | 7.5 % | 6.9 | ||||
Total real estate acquisitions | 349 | $ 2,474.9 | 7,798 | 7.0 % | 10.7 | ||||
Real estate properties under development (2) | 197 | 757.1 | 7,458 | 7.4 % | 15.0 | ||||
Other investments (3) | — | 631.7 | — | 8.9 % | 6.0 | ||||
Total investments (5) | 546 | $ 3,863.7 | 15,256 | 7.4 % | 10.6 |
(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 months and year ended December 31, 2024 includes |
(2) | The three months ended December 31, 2024 includes |
(3) | The three months and year ended December 31, 2024 include |
(4) | Clients we have invested in are |
(5) | Clients we have invested in are |
Same Store Rental Revenue
The following summarizes our same store rental revenue for 13,397 and 11,479 properties under lease for the three months and year ended December 31, 2024, respectively (dollars in millions):
Three months ended December 31, | Years ended December 31, | % Increase | |||||||||
2024 | 2023 | 2024 | 2023 | Three Months | Year | ||||||
Same store rental revenue | $ 992.8 | $ 985.2 | $ 3,319.1 | $ 3,302.4 | 0.8 % | 0.5 % | |||||
For purposes of comparability, same store rental revenue is presented on a constant currency basis using the applicable exchange rate as of December 31, 2024. None of the properties in
Property Dispositions
The following summarizes our property dispositions (dollars in millions):
Three months ended December 31, 2024 | Year ended December 31, 2024 | ||
Properties sold | 80 | 294 | |
Net sales proceeds | $ 138.1 | $ 589.5 | |
Gain on sale of real estate | $ 25.0 | $ 117.3 |
Liquidity and Capital Markets
Capital Raising
During the three months ended December 31, 2024, we raised
Liquidity
As of December 31, 2024, we had
In February 2025, our Board of Directors authorized a share repurchase program for up to
Earnings Guidance
Summarized below are approximate estimates of the key components of our 2025 earnings guidance:
Net income per share (1) | |||
Real estate depreciation per share | |||
Other adjustments per share (2) | |||
AFFO per share (3) | |||
Same store rent growth | Approx | ||
Occupancy | Over | ||
Cash G&A expenses (% of revenues) (4)(5) | Approx | ||
Property expenses (non-reimbursable) (% of revenues) (4) | |||
Income tax expenses | |||
Investment volume | Approx | ||
(1) Net income per share excludes impairments and future foreign currency or derivative gains or losses due to the inherent unpredictability of forecasting these items. | |||
(2) Includes gain on sales of properties and merger, transaction, and other costs, net. | |||
(3) AFFO per share excludes merger, transaction, and other costs, net. | |||
(4) Revenue excludes contractually obligated reimbursements by our clients. Cash G&A expenses exclude stock-based compensation expense. | |||
(5) G&A expenses 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 25, 2025 at 11:00 a.m. PDT to discuss the operating results. To access the conference call, dial (833) 816-1264 (
A telephone replay of the conference call can also be accessed by calling (877) 344-7529 (
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 months and year ended December 31, 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://realtyincome.com/sustainability/esg-reporting. Our Green Financing Framework is also available on our corporate website at https://realtyincome.com/sustainability/green-financing-framework.
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, as of December 31, 2024, have a portfolio of over 15,600 properties in all 50 U.S. states, the
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; statements made regarding our share repurchase program; 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; 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 co-investment ventures, funds, joint ventures, partnerships and other arrangements which may transfer or limit our 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; and those additional risks and factors discussed in our reports filed with the
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) | ||||||||
Three months ended December 31, | Years ended December 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
REVENUE | ||||||||
Rental (including reimbursable) (1) | $ 1,279,698 | $ 1,028,710 | $ 5,043,748 | $ 3,958,150 | ||||
Other | 60,601 | 47,575 | 227,394 | 120,843 | ||||
Total revenue | 1,340,299 | 1,076,285 | 5,271,142 | 4,078,993 | ||||
EXPENSES | ||||||||
Depreciation and amortization | 606,671 | 475,856 | 2,395,644 | 1,895,177 | ||||
Interest | 268,149 | 208,313 | 1,016,955 | 730,423 | ||||
Property (including reimbursable) | 96,309 | 81,883 | 377,675 | 316,964 | ||||
General and administrative | 49,114 | 38,015 | 176,895 | 144,536 | ||||
Provisions for impairment | 142,966 | 27,281 | 425,833 | 87,082 | ||||
Merger, transaction, and other costs, net | (9,176) | 9,932 | 96,292 | 14,464 | ||||
Total expenses | 1,154,033 | 841,280 | 4,489,294 | 3,188,646 | ||||
Gain on sales of real estate | 24,985 | 5,992 | 117,275 | 25,667 | ||||
Foreign currency and derivative gain (loss), net | 535 | (18,371) | 3,420 | (13,414) | ||||
Equity in earnings of unconsolidated entities | 2,353 | 2,135 | 7,793 | 2,546 | ||||
Other income, net | 7,313 | 10,804 | 23,606 | 23,789 | ||||
Income before income taxes | 221,452 | 235,565 | 933,942 | 928,935 | ||||
Income taxes | (20,102) | (15,803) | (66,601) | (52,021) | ||||
Net income | 201,350 | 219,762 | 867,341 | 876,914 | ||||
Net income attributable to noncontrolling interests | (1,738) | (1,357) | (6,569) | (4,605) | ||||
Net income attributable to the Company | 199,612 | 218,405 | 860,772 | 872,309 | ||||
Preferred stock dividends | — | — | (7,763) | — | ||||
Excess of redemption value over carrying value of preferred | — | — | (5,116) | — | ||||
Net income available to common stockholders | $ 199,612 | $ 218,405 | $ 847,893 | $ 872,309 | ||||
Funds from operations available to common stockholders (FFO) | $ 897,917 | $ 713,716 | $ 3,467,659 | $ 2,822,138 | ||||
Normalized funds from operations available to common | $ 888,741 | $ 723,648 | $ 3,563,951 | $ 2,836,602 | ||||
Adjusted funds from operations available to common | $ 921,920 | $ 731,034 | $ 3,621,437 | $ 2,774,870 | ||||
Amounts available to common stockholders per common share: | ||||||||
Net income, basic and diluted | $ 0.23 | $ 0.30 | $ 0.98 | $ 1.26 | ||||
FFO per common share: | ||||||||
Basic | $ 1.03 | $ 0.98 | $ 4.02 | $ 4.08 | ||||
Diluted | $ 1.02 | $ 0.98 | $ 4.01 | $ 4.07 | ||||
Normalized FFO per common share: | ||||||||
Basic | $ 1.01 | $ 1.00 | $ 4.13 | $ 4.10 | ||||
Diluted | $ 1.01 | $ 1.00 | $ 4.12 | $ 4.09 | ||||
AFFO per common share: | ||||||||
Basic | $ 1.05 | $ 1.01 | $ 4.20 | $ 4.01 | ||||
Diluted | $ 1.05 | $ 1.01 | $ 4.19 | $ 4.00 | ||||
Cash dividends paid per common share | $ 0.7905 | $ 0.7680 | $ 3.1255 | $ 3.0510 | ||||
(1) | Includes rental revenue (reimbursable) of |
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 | ||||||||
Three months ended December 31, | Years ended December 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net income available to common stockholders | $ 199,612 | $ 218,405 | $ 847,893 | $ 872,309 | ||||
Depreciation and amortization | 606,671 | 475,856 | 2,395,644 | 1,895,177 | ||||
Depreciation of furniture, fixtures and equipment | (952) | (583) | (2,857) | (2,239) | ||||
Provisions for impairment of real estate | 110,480 | 22,407 | 319,032 | 82,208 | ||||
Gain on sales of real estate | (24,985) | (5,992) | (117,275) | (25,667) | ||||
Proportionate share of adjustments for unconsolidated | 8,418 | 4,670 | 29,124 | 4,205 | ||||
FFO adjustments allocable to noncontrolling interests | (1,327) | (1,047) | (3,902) | (3,855) | ||||
FFO available to common stockholders | $ 897,917 | $ 713,716 | $ 3,467,659 | $ 2,822,138 | ||||
FFO allocable to dilutive noncontrolling interests | 2,209 | 1,386 | 6,611 | 5,552 | ||||
Diluted FFO | $ 900,126 | $ 715,102 | $ 3,474,270 | $ 2,827,690 | ||||
FFO available to common stockholders | $ 897,917 | $ 713,716 | $ 3,467,659 | $ 2,822,138 | ||||
Merger, transaction, and other costs, net (1) | (9,176) | 9,932 | 96,292 | 14,464 | ||||
Normalized FFO available to common stockholders | $ 888,741 | $ 723,648 | $ 3,563,951 | $ 2,836,602 | ||||
Normalized FFO allocable to dilutive noncontrolling interests | 2,209 | 1,386 | 6,611 | 5,552 | ||||
Diluted Normalized FFO | $ 890,950 | $ 725,034 | $ 3,570,562 | $ 2,842,154 | ||||
FFO per common share: | ||||||||
Basic | $ 1.03 | $ 0.98 | $ 4.02 | $ 4.08 | ||||
Diluted | $ 1.02 | $ 0.98 | $ 4.01 | $ 4.07 | ||||
Normalized FFO per common share: | ||||||||
Basic | $ 1.01 | $ 1.00 | $ 4.13 | $ 4.10 | ||||
Diluted | $ 1.01 | $ 1.00 | $ 4.12 | $ 4.09 | ||||
Distributions paid to common stockholders | $ 691,861 | $ 556,114 | $ 2,691,719 | $ 2,111,793 | ||||
FFO available to common stockholders in excess of | $ 206,056 | $ 157,602 | $ 775,940 | $ 710,345 | ||||
Normalized FFO available to common stockholders in | $ 196,880 | $ 167,534 | $ 872,232 | $ 724,809 | ||||
Weighted average number of common shares used for FFO | ||||||||
Basic | 875,710 | 724,598 | 862,959 | 692,298 | ||||
Diluted | 879,649 | 726,859 | 865,842 | 694,819 | ||||
(1) | For the three months ended December 31, 2024, merger, transaction, and other costs, net primarily consists of a |
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. | ||||||||
Three months ended December 31, | Years ended December 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net income available to common stockholders | $ 199,612 | $ 218,405 | $ 847,893 | $ 872,309 | ||||
Cumulative adjustments to calculate Normalized FFO (1) | 689,129 | 505,243 | 2,716,058 | 1,964,293 | ||||
Normalized FFO available to common stockholders | 888,741 | 723,648 | 3,563,951 | 2,836,602 | ||||
Excess of redemption value over carrying value of preferred | — | — | 5,116 | — | ||||
Amortization of share-based compensation | 9,821 | 6,073 | 32,741 | 26,227 | ||||
Amortization of net debt discounts (premiums) and deferred | 5,500 | (10,127) | 15,361 | (44,568) | ||||
Amortization of acquired interest rate swap value (2) | 3,710 | — | 13,935 | — | ||||
Non-cash change in allowance for credit losses (3) | 32,486 | 4,874 | 106,801 | 4,874 | ||||
Leasing costs and commissions | (2,661) | (3,010) | (8,558) | (9,878) | ||||
Recurring capital expenditures | (199) | (141) | (402) | (331) | ||||
Straight-line rent and expenses, net | (35,510) | (27,891) | (171,887) | (141,130) | ||||
Amortization of above and below-market leases, net | 14,817 | 17,134 | 55,870 | 79,101 | ||||
Deferred tax expense | 3,552 | — | 3,552 | — | ||||
Proportionate share of adjustments for unconsolidated entities | (308) | 932 | (2,078) | 932 | ||||
Other adjustments (4) | 1,971 | 19,542 | 7,035 | 23,041 | ||||
AFFO available to common stockholders | $ 921,920 | $ 731,034 | $ 3,621,437 | $ 2,774,870 | ||||
AFFO allocable to dilutive noncontrolling interests | 2,186 | 1,370 | 6,599 | 5,540 | ||||
Diluted AFFO | $ 924,106 | $ 732,404 | $ 3,628,036 | $ 2,780,410 | ||||
AFFO per common share: | ||||||||
Basic | $ 1.05 | $ 1.01 | $ 4.20 | $ 4.01 | ||||
Diluted | $ 1.05 | $ 1.01 | $ 4.19 | $ 4.00 | ||||
Distributions paid to common stockholders | $ 691,861 | $ 556,114 | $ 2,691,719 | $ 2,111,793 | ||||
AFFO available to common stockholders in excess of | $ 230,059 | $ 174,920 | $ 929,718 | $ 663,077 | ||||
Weighted average number of common shares used for AFFO: | ||||||||
Basic | 875,710 | 724,598 | 862,959 | 692,298 | ||||
Diluted | 879,649 | 726,859 | 865,842 | 694,819 | ||||
(1) | See Normalized FFO calculations on page 9 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 relate to the impairment of financing receivables. |
(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 December 31, | 2024 | 2023 | 2022 | 2021 | 2020 | |||||
Net income available to common stockholders | $ 199,612 | $ 218,405 | $ 227,265 | $ 4,041 | $ 117,931 | |||||
Depreciation and amortization, net of furniture, | 605,719 | 475,273 | 437,638 | 332,877 | 174,888 | |||||
Provisions for impairment of real estate | 110,480 | 22,407 | 9,481 | 7,990 | 23,790 | |||||
Gain on sales of real estate | (24,985) | (5,992) | (9,346) | (20,402) | (22,667) | |||||
Proportionate share of adjustments for | 8,418 | 4,670 | — | 1,931 | — | |||||
FFO adjustments allocable to noncontrolling interests | (1,327) | (1,047) | (530) | (274) | (242) | |||||
FFO available to common stockholders | $ 897,917 | $ 713,716 | $ 664,508 | $ 326,163 | $ 293,700 | |||||
Merger, transaction, and other costs, net | (9,176) | 9,932 | 903 | 137,332 | — | |||||
Normalized FFO available to common stockholders | $ 888,741 | $ 723,648 | $ 665,411 | $ 463,495 | $ 293,700 | |||||
FFO per diluted share | $ 1.02 | $ 0.98 | $ 1.05 | $ 0.63 | $ 0.83 | |||||
Normalized FFO per diluted share | $ 1.01 | $ 1.00 | $ 1.05 | $ 0.89 | $ 0.83 | |||||
AFFO available to common stockholders | $ 921,920 | $ 731,034 | $ 633,967 | $ 486,047 | $ 297,654 | |||||
AFFO per diluted share | $ 1.05 | $ 1.01 | $ 1.00 | $ 0.94 | $ 0.84 | |||||
Cash dividends paid per common share | $ 0.7905 | $ 0.7680 | $ 0.7440 | $ 0.7180 | $ 0.7020 | |||||
Weighted average diluted shares outstanding - FFO, | 879,649 | 726,859 | 635,637 | 519,438 | 355,051 | |||||
For the year ended December 31, | 2024 | 2023 | 2022 | 2021 | 2020 | |||||
Net income available to common stockholders | $ 847,893 | $ 872,309 | $ 869,408 | $ 359,456 | $ 395,486 | |||||
Depreciation and amortization, net of furniture, | 2,392,787 | 1,892,938 | 1,668,375 | 896,809 | 676,450 | |||||
Provisions for impairment of real estate | 319,032 | 82,208 | 25,860 | 38,967 | 147,232 | |||||
Gain on sales of real estate | (117,275) | (25,667) | (102,957) | (55,798) | (76,232) | |||||
Proportionate share of adjustments for | 29,124 | 4,205 | 12,812 | 1,931 | — | |||||
FFO adjustments allocable to noncontrolling interests | (3,902) | (3,855) | (1,605) | (785) | (817) | |||||
FFO available to common stockholders | $ 3,467,659 | $ 2,822,138 | $ 2,471,893 | $ 1,240,580 | $ 1,142,119 | |||||
Merger, transaction, and other costs, net | 96,292 | 14,464 | 13,897 | 167,413 | — | |||||
Normalized FFO available to common stockholders | $ 3,563,951 | $ 2,836,602 | $ 2,485,790 | $ 1,407,993 | $ 1,142,119 | |||||
FFO per diluted share | $ 4.01 | $ 4.07 | $ 4.04 | $ 2.99 | $ 3.31 | |||||
Normalized FFO per diluted share | $ 4.12 | $ 4.09 | $ 4.06 | $ 3.39 | $ 3.31 | |||||
AFFO available to common stockholders | $ 3,621,437 | $ 2,774,870 | $ 2,401,359 | $ 1,488,753 | $ 1,172,626 | |||||
AFFO per diluted share | $ 4.19 | $ 4.00 | $ 3.92 | $ 3.59 | $ 3.39 | |||||
Cash dividends paid per common share | $ 3.1255 | $ 3.0510 | $ 2.9670 | $ 2.8330 | $ 2.7940 | |||||
Weighted average diluted shares outstanding - FFO | 865,842 | 694,819 | 613,473 | 414,770 | 345,878 | |||||
Weighted average diluted shares outstanding - | 865,842 | 694,819 | 613,473 | 415,270 | 345,878 | |||||
ADJUSTED EBITDAre (dollars in thousands) (unaudited) | ||||
Adjusted EBITDAre, Annualized Adjusted EBITDAre, Pro Forma Adjusted EBITDAre, Annualized Pro Forma Adjusted EBITDAre, Net | ||||
Three months ended December 31, | ||||
2024 | 2023 | |||
Net income | $ 201,350 | $ 219,762 | ||
Interest | 268,149 | 208,313 | ||
Income taxes | 20,102 | 15,803 | ||
Depreciation and amortization | 606,671 | 475,856 | ||
Provisions for impairment | 142,966 | 27,281 | ||
Merger, transaction, and other costs, net | (9,176) | 9,932 | ||
Gain on sales of real estate | (24,985) | (5,992) | ||
Foreign currency and derivative (gain) loss, net | (535) | 18,371 | ||
Proportionate share of adjustments from unconsolidated entities | 18,991 | 14,983 | ||
Quarterly Adjusted EBITDAre | $ 1,223,533 | $ 984,309 | ||
Annualized Adjusted EBITDAre (1) | $ 4,894,132 | $ 3,937,236 | ||
Annualized Pro Forma Adjustments | $ 79,143 | $ 74,919 | ||
Annualized Pro Forma Adjusted EBITDAre | $ 4,973,275 | $ 4,012,155 | ||
Total debt per the consolidated balance sheet, excluding deferred financing | $ 26,510,798 | $ 21,480,869 | ||
Proportionate share of unconsolidated entities debt, excluding deferred | 659,190 | 659,190 | ||
Less: Cash and cash equivalents | (444,962) | (232,923) | ||
Net Debt (2) | $ 26,725,026 | $ 21,907,136 | ||
Net Debt/Annualized Adjusted EBITDAre | 5.5x | 5.6x | ||
Net Debt/Annualized Pro Forma Adjusted EBITDAre | 5.4x | 5.5x | ||
(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
Three months ended December 31, | ||||
2024 | 2023 | |||
Annualized pro forma adjustments from investments acquired or stabilized | $ 82,848 | $ 77,012 | ||
Annualized pro forma adjustments from investments disposed | (3,705) | (2,093) | ||
Annualized Pro Forma Adjustments | $ 79,143 | $ 74,919 | ||
Adjusted Free Cash Flow (in thousands) (unaudited) | ||||
Adjusted Free Cash Flow is a non-GAAP financial measure. Please see the Glossary for our definition and an explanation | ||||
Years ended December 31, | ||||
2024 | 2023 | |||
Net cash provided by operating activities | $ 3,573,276 | $ 2,958,769 | ||
Non-recurring capital expenditures | (113,786) | (49,701) | ||
Distributions paid to common stockholders | (2,691,719) | (2,111,793) | ||
Distributions paid to preferred stockholders | (7,763) | — | ||
Merger, transaction, and other costs, net (1) | 71,541 | 14,464 | ||
Increase in net working capital | (30,689) | (174,007) | ||
Lease termination fees | (21,062) | (5,016) | ||
Adjusted Free Cash Flow | $ 779,798 | $ 632,716 | ||
(1) | Excludes share-based compensation costs recognized in merger, transaction, and other costs, net. |
CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) | ||||
December 31, 2024 | December 31, 2023 | |||
ASSETS | ||||
Real estate held for investment, at cost: | ||||
Land | $ 17,320,520 | $ 14,929,310 | ||
Buildings and improvements | 40,974,535 | 34,657,094 | ||
Total real estate held for investment, at cost | 58,295,055 | 49,586,404 | ||
Less accumulated depreciation and amortization | (7,381,083) | (6,072,118) | ||
Real estate held for investment, net | 50,913,972 | 43,514,286 | ||
Real estate and lease intangibles held for sale, net | 94,979 | 31,466 | ||
Cash and cash equivalents | 444,962 | 232,923 | ||
Accounts receivable, net | 877,668 | 710,536 | ||
Lease intangible assets, net | 6,322,992 | 5,017,907 | ||
Goodwill | 4,932,199 | 3,731,478 | ||
Investment in unconsolidated entities | 1,229,699 | 1,172,118 | ||
Other assets, net | 4,018,568 | 3,368,643 | ||
Total assets | $ 68,835,039 | $ 57,779,357 | ||
LIABILITIES AND EQUITY | ||||
Distributions payable | $ 238,045 | $ 195,222 | ||
Accounts payable and accrued expenses | 759,416 | 738,526 | ||
Lease intangible liabilities, net | 1,635,770 | 1,406,853 | ||
Other liabilities | 923,128 | 811,650 | ||
Line of credit payable and commercial paper | 1,130,201 | 764,390 | ||
Term loans, net | 2,358,417 | 1,331,841 | ||
Mortgages payable, net | 80,784 | 821,587 | ||
Notes payable, net | 22,657,592 | 18,602,319 | ||
Total liabilities | $ 29,783,353 | $ 24,672,388 | ||
Stockholders' equity: | ||||
Common stock and paid in capital, par value | $ 47,451,068 | $ 39,629,709 | ||
Distributions in excess of net income | (8,648,559) | (6,762,136) | ||
Accumulated other comprehensive income | 38,229 | 73,894 | ||
Total stockholders' equity | $ 38,840,738 | $ 32,941,467 | ||
Noncontrolling interests | 210,948 | 165,502 | ||
Total equity | $ 39,051,686 | $ 33,106,969 | ||
Total liabilities and equity | $ 68,835,039 | $ 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, net. 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, net, (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, net, 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 Pro Forma Adjusted EBITDAre, a non-GAAP financial measure, is defined as Adjusted EBITDAre, which includes transaction accounting adjustments in accordance with
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 (based on interest rates in place as of the date of the acquisition), 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, net.
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.
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SOURCE Realty Income Corporation
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