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OFFON

REALTY INCOME CORPORATION

(O)
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REALTY INCOME : ANNOUNCES OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 (Form 8-K)

08/03/2021 | 06:17am EDT
REALTY INCOME ANNOUNCES OPERATING RESULTS FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

SAN DIEGO, CALIFORNIA, August 2, 2021....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 of 1.125% senior unsecured notes due 2027 and £350 million through the issuance of 1.750% senior unsecured notes due 2033 in our debut Sterling-denominated green bond offering
•Collected 99.4% of contractual rent across our total portfolio, inclusive of 98.9% 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 50% of our total $1.1 billion of second quarter acquisitions. Additionally, after our debut offering in July, we are proud to be the first net lease REIT to issue a green bond, illustrating our commitment in partnering with our clients to achieve mutual sustainability goals.'

'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 $3.53 to $3.59 and increasing our 2021 acquisitions volume guidance to approximately $4.5 billion.'


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 $46.5 million loss on extinguishment of debt due to the January 2021 early redemption of the 3.250% notes due October 2022 recorded in the three months ended March 31, 2021, and $13.3 million of merger-related costs related to our proposed merger with VEREIT. Our financial results during the six months ended June 30, 2020 were impacted by a $9.8 million loss on extinguishment of debt due to the January 2020 early redemption of the 5.750% notes due 2021, and a $3.5 million executive severance charge for our former chief financial officer.
(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 pages10and 11herein 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
95.5% 95.5% 96.7% 95.9%
Contractual rent collected(1) from our top 20 clients (2)
92.7% 92.7% 94.8% 93.4%
Contractual rent collected(1)from our investment grade clients (3)
100.0% 100.0% 100.0% 100.0%
Contractual rent collected from our theater clients 32.3% 31.5% 51.0% 38.3%
Contractual rent collected from our health and fitness clients 94.8% 94.5% 93.9% 94.4%
(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.

- 2 -

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 5.4% of annualized contractual rental revenue. As of June 30, 2021, we were fully reserved for the outstanding receivable balances for 37 theater properties. At June 30, 2021, the receivables outstanding for our 79 theater properties totaled $77.9 million, inclusive of $9.1 million of straight-line rent receivables, and net of $40.0 million of reserves, inclusive of $2.0 million of straight-line rent reserves.

At June 30, 2021, the receivables outstanding across the portfolio totaled $327.9 million, net of $60.0 million of reserves, and includes $195.9 million of straight-line rent receivable, net of $8.6 million of reserves.

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 $2.826 per share. The amount of monthly dividends paid per share increased 0.9% to $0.705 for the three months ended June 30, 2021, as compared to $0.699 for the three months ended June 30, 2020. During the three months ended June 30, 2021, we distributed $263.4 million in common dividends to stockholders, representing 80.4% of our AFFO of $327.6 million.

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 approximately630 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 approximately8.8years. 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 98.5% with 103 properties available for lease or sale out of 6,761, as compared to 98.0% as of March 31, 2021 and 98.5% as of June 30, 2020.

- 3 -

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 $10.44 million, as compared to the previous annual rent of $9.97 million on the same units, representing a rent recapture rate of 104.7% on the units re-leased. We re-leased one unit to a new client without a period of vacancy, and two units to new clients after a period of vacancy.

During the six months ended June 30, 2021, the annual new rent on re-leases was $21.97 million, as compared to the previous annual rent of $21.12 million on the same units, representing a rent recapture rate of 104.0% on the units re-leased. We re-leased three units to new clients without a period of vacancy, and 17 units to new clients after a period of vacancy.
- 4 -

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 $850,000 received as settlement credits for four properties acquired as reimbursement of free rent periods.
(2) Represents investments of £424.9 million Sterling during the three months ended June 30, 2021 and £715.1 million Sterling during the six months ended June 30, 2021, converted at the applicable exchange rate on the date of acquisition.
(3) Our clients occupying the new properties operate in 19 industries and are 85.1% retail and 14.9% industrial, based on rental revenue. Approximately 54% of the rental revenue generated from acquisitions during the three months ended June 30, 2021 is from our investment grade rated clients, their subsidiaries or affiliated companies.
(4) Our clients occupying the new properties operate in 28 industries and are 75.8% retail and 24.2% industrial, based on rental revenue. Approximately 47% of the rental revenue generated from acquisitions during the six months ended June 30, 2021 is from our investment grade rated clients, their subsidiaries or affiliated companies.

Same Store Rental Revenue
The following summarizes our same store rental revenue on 6,114 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 $5.7 million for the three months ended June 30, 2021 compared to $3.7 million for the three months ended June 30, 2020, and $13.0 million for the six months ended June 30, 2021 compared to $3.8 million for the six months ended June 30, 2020. Our calculation of same store rental revenue also includes uncollected rent for which we have not granted a lease concession. If these applicable amounts of rent deferrals and uncollected rent were excluded from our calculation of same store rental revenue, the increases for the three and six months ended June 30, 2021 relative to the comparable periods for 2020 would have been 16.3% and 4.9%, respectively.

- 5 -

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 $457.5 million from the sale of common stock at a weighted average price of $69.01 per share, primarily through our At-The-Market-Program.

In July 2021, we raised $594.1 million from the issuance of 9,200,000 shares of common stock in an underwritten public offering, inclusive of 1,200,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares.

In July 2021, we issued £400 million of 1.125% senior unsecured notes due 2027 (the '2027' Notes) and £350 million of 1.750% senior unsecured notes due 2033 (the '2033' Notes). The public offering price for the 2027 Notes was 99.305% of the principal amount, for an effective semi-annual yield to maturity of 1.242%, and the public offering price for the 2033 Notes was 99.842% of the principal amount, for an effective semi-annual yield to maturity of 1.757%. Combined, the new issues of the 2027 Notes and 2033 Notes have a weighted average term of 8.8 years and a weighted average effective semi-annual yield to maturity of 1.48%. The issuances represented our debut green bond offering.

Revolving Credit Facility and Commercial Paper Program
We have a $3.0 billion unsecured revolving credit facility, with an initial term that expires in March 2023 (subject to two six-month options to extend). The revolving credit facility also has a $1.0 billion accordion feature, which is subject to obtaining lender commitments. As of June 30, 2021, the balance of borrowings outstanding under our revolving credit facility was $635.3 million, consisting entirely of Sterling-denominated borrowings of £460.0 million.

Additionally, we have a U.S. dollar-denominated unsecured commercial paper program. Under the terms of this program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion, with proceeds used for general corporate purposes. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under this program. As of June 30, 2021, we had$650.0 million in commercial paper borrowings.

- 6 -

2021 Earnings Guidance

We estimate Normalized FFO per share for 2021 of $3.37 to $3.46. We estimate AFFO per share for 2021 of $3.53 to $3.59, an increase of 4.1% to 5.9% over 2020 AFFO per share of $3.39. Normalized FFO per share and AFFO per share exclude the merger-related costs associated with the proposed VEREIT merger. Summarized below are approximate estimates of the key components of our 2021 earnings guidance, which do not give effect to the announced merger between us and VEREIT, Inc. other than merger-related costs incurred to date:
Prior 2021 Guidance Revised 2021 Guidance
Net income per share (1)
$1.19 to $1.27 $1.32 to $1.41
Real estate depreciation and impairments per share $2.13 $2.11
Gains on sales of properties per share $(0.06) $(0.09)
Merger-related costs (actual) (1)
$- $0.03
Normalized FFO per share $3.26 to $3.34 $3.37 to $3.46
AFFO per share $3.44 to $3.49 $3.53 to $3.59
Same store rent growth (2)
0.5% - 1.0% 1.5% - 2.0%
Occupancy ~ 98% Over 98%
Cash G&A expenses (% of revenues) (3)(4)
~ 4.5% ~ 4.5%
Property expenses (non-reimbursable) (% of revenues) (3)
1.5% - 2.0% 1.5% - 1.8%
Income tax expenses ~ $20 million ~ $25 million
Acquisition volume Over $3.25 billion ~ $4.5 billion
(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 5% in 2021.

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.
- 7 -

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 over6,700 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.

Investor Contact:
Jonathan Pong, CFA, CPA
SVP, Head of Corporate Finance
(858) 284-5177
- 8 -

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 (losses), net 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 stockholders (FFO)
$ 314,375 $ 288,338 $ 582,082 $ 565,441
Normalized funds from operations available to common stockholders (Normalized FFO) $ 327,673 $ 288,338 $ 595,380 $ 565,441
Adjusted funds from operations available to common stockholders (AFFO)
$ 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 $8.2 million (of which $723,000 was related to straight-line rent receivables) for the three months ended June 30, 2021 and $8.5 million (of which $2.1 million was related to straight-line receivables) for the three months ended June 30, 2020, $17.0 million (of which $1.2 million was related to straight-line rent receivables) for the six months ended June 30, 2021 and $10.2 million (of which $2.8 million was related to straight-line receivables) for the six months ended June 30, 2020. Unless otherwise specified, references to reserves recorded as a reduction of rental revenue include amounts reserved for in the current period, as well as unrecognized contractual rental revenue and unrecognized straight-line rental revenue for leases accounted for on a cash basis.

- 9 -

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 months ended June 30, 2021 for our definitions and explanations of how we utilize these metrics.
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 interests
(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
- 10 -

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, 2021 for our definition and an explanation of how we utilize this metric.

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 distributions paid to common stockholders
$ 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$40.5 million of uncollected rent deferred as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the Financial Accounting Standards Board (FASB) and $61.2 million of uncollected rent for which we have not granted a lease concession.
(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 $1.6 million of cash, $1.8 million of share-based compensation expense and $58,000 of professional fees.
(4)Includes the amortization of costs incurred and capitalized upon issuance of our notes payable, assumption of our mortgages payable and issuance of our current and previous term loans. The deferred financing costs are being amortized over the lives of the respective notes payable, mortgages and term loan. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
(5)Straight-line payments from cross-currency swaps represent quarterly payments in U.S. dollars received by us from counterparties in exchange for associated foreign currency payments. These USD payments are fixed and determinable for the duration of the associated hedging transaction.
(6)Includes adjustments allocable to noncontrolling interests, obligations related to financing lease liabilities, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions.

- 11 -

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, fixtures and equipment
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, Normalized FFO, and AFFO 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
- 12 -

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 $0.01 per share, 740,200,000 shares authorized, 380,174,042 and 361,303,445 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
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
- 13 -

Realty Income Performance vs. Major Stock Indices
Equity
NASDAQ
Realty Income
REIT Index (1)
DJIA
S&P 500
Composite
Dividend
Total
Dividend
Total
Dividend
Total
Dividend
Total
Dividend
Total
yield
return (2)
yield
return (3)
yield
return (3)
yield
return (3)
yield
return (4)
10/18 to 12/31/1994
10.5%
10.8%
7.7%
0.0%
2.9%
(1.6%)
2.9%
(1.2%)
0.5%
(1.7%)
1995
8.3%
42.0%
7.4%
15.3%
2.4%
36.9%
2.3%
37.6%
0.6%
39.9%
1996
7.9%
15.4%
6.1%
35.3%
2.2%
28.9%
2.0%
23.0%
0.2%
22.7%
1997
7.5%
14.5%
5.5%
20.3%
1.8%
24.9%
1.6%
33.4%
0.5%
21.6%
1998
8.2%
5.5%
7.5%
(17.5%)
1.7%
18.1%
1.3%
28.6%
0.3%
39.6%
1999
10.5%
(8.7%)
8.7%
(4.6%)
1.3%
27.2%
1.1%
21.0%
0.2%
85.6%
2000
8.9%
31.2%
7.5%
26.4%
1.5%
(4.7%)
1.2%
(9.1%)
0.3%
(39.3%)
2001
7.8%
27.2%
7.1%
13.9%
1.9%
(5.5%)
1.4%
(11.9%)
0.3%
(21.1%)
2002
6.7%
26.9%
7.1%
3.8%
2.6%
(15.0%)
1.9%
(22.1%)
0.5%
(31.5%)
2003
6.0%
21.0%
5.5%
37.1%
2.3%
28.3%
1.8%
28.7%
0.6%
50.0%
2004
5.2%
32.7%
4.7%
31.6%
2.2%
5.6%
1.8%
10.9%
0.6%
8.6%
2005
6.5%
(9.2%)
4.6%
12.2%
2.6%
1.7%
1.9%
4.9%
0.9%
1.4%
2006
5.5%
34.8%
3.7%
35.1%
2.5%
19.0%
1.9%
15.8%
0.8%
9.5%
2007
6.1%
3.2%
4.9%
(15.7%)
2.7%
8.8%
2.1%
5.5%
0.8%
9.8%
2008
7.3%
(8.2%)
7.6%
(37.7%)
3.6%
(31.8%)
3.2%
(37.0%)
1.3%
(40.5%)
2009
6.6%
19.3%
3.7%
28.0%
2.6%
22.6%
2.0%
26.5%
1.0%
43.9%
2010
5.1%
38.6%
3.5%
27.9%
2.6%
14.0%
1.9%
15.1%
1.2%
16.9%
2011
5.0%
7.3%
3.8%
8.3%
2.8%
8.3%
2.3%
2.1%
1.3%
(1.8%)
2012
4.5%
20.1%
3.5%
19.7%
3.0%
10.2%
2.5%
16.0%
2.6%
15.9%
2013
5.8%
(1.8%)
3.9%
2.9%
2.3%
29.6%
2.0%
32.4%
1.4%
38.3%
2014
4.6%
33.7%
3.6%
28.0%
2.3%
10.0%
2.0%
13.7%
1.3%
13.4%
2015
4.4%
13.0%
3.9%
2.8%
2.6%
0.2%
2.2%
1.4%
1.4%
5.7%
2016
4.2%
16.0%
4.0%
8.6%
2.5%
16.5%
2.1%
12.0%
1.4%
7.5%
2017
4.5%
3.6%
3.9%
8.7%
2.2%
28.1%
1.9%
21.8%
1.1%
28.2%
2018
4.2%
15.2%
4.4%
(4.0%)
2.5%
(3.5%)
2.2%
(4.4%)
1.4%
(3.9%)
2019 3.7% 21.1% 3.7% 28.7% 2.4% 25.3% 1.9% 31.5% 1.1% 35.2%
2020 4.5% (11.8%) 3.6% (5.1%) 1.9% 9.7% 1.5% 18.4% 0.9% 43.6%
YTD 2021 4.2% 9.6% 2.9% 21.3% 1.8% 13.8% 1.4% 15.3% 0.7% 12.5%
Compound Average
Annual Total Return (5)
15.3% 10.8% 11.0%
10.8%
11.7%
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.
- 14 -

Disclaimer

Realty Income Corporation published this content on 02 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 09:57:14 UTC.


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Financials (USD)
Sales 2021 1 813 M - -
Net income 2021 565 M - -
Net Debt 2021 9 843 M - -
P/E ratio 2021 44,8x
Yield 2021 4,19%
Capitalization 26 186 M 26 186 M -
EV / Sales 2021 19,9x
EV / Sales 2022 18,6x
Nbr of Employees 209
Free-Float 99,8%
Chart REALTY INCOME CORPORATION
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Realty Income Corporation Technical Analysis Chart | O | US7561091049 | MarketScreener
Technical analysis trends REALTY INCOME CORPORATION
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 20
Last Close Price 67,61 $
Average target price 77,88 $
Spread / Average Target 15,2%
EPS Revisions
Managers and Directors
Sumit Roy President, Chief Executive Officer & Director
Christie B. Kelly Chief Financial Officer, Treasurer & Executive VP
Michael Dale McKee Non-Executive Chairman
Joseph Stewart Vice President-Information Technology
Mark E. Hagan Chief Investment Officer & Executive VP
Sector and Competitors
1st jan.Capi. (M$)
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