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8-K - 8-K - REALTY INCOME CORPa13-17005_18k.htm

Exhibit 99.1

 

 

 

 

 

RECORD OPERATING RESULTS FOR SECOND QUARTER

AND SIX MONTHS ANNOUNCED BY REALTY INCOME

 

 

ESCONDIDO, CALIFORNIA, July 25, 2013...Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE: O), today announced record operating results for the second quarter ended June 30, 2013. Access to this document is available at www.realtyincome.com. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.

 

COMPANY HIGHLIGHTS:

 

For the quarter ended June 30, 2013 (as compared to the same quarterly period in 2012):

·     Revenue increased 63.0% to $184.3 million as compared to $113.1 million

·     Net income available to common stockholders per share was $0.23

·     Normalized FFO available to common stockholders increased 82.8% to $119.2 million

·     Normalized FFO per share increased 24.5% to $0.61

·     AFFO available to common stockholders increased 73.8% to $115.6 million

·     AFFO per share increased 18.0% to $0.59

·     Same store rents increased 1.1% to $109.9 million

·     Portfolio occupancy increased to 98.2% from 97.3%

·     Invested $738.1 million in 190 new properties and properties under development or expansion

·     Increased the monthly dividend in June for the 72nd time and for the 63rd consecutive quarter

·     Dividends paid per common share increased 24.5%

 

Financial Results

 

Revenue

Revenue, for the quarter ended June 30, 2013, increased 63.0% to $184.3 million as compared to $113.1 million, for the same quarter in 2012. Revenue, for the six months ended June 30, 2013, increased 58.1% to $355.5 million as compared to $224.9 million, for the same period in 2012.

 

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended June 30, 2013, was $44.2 million as compared to $33.0 million for the same quarter in 2012. Net income per share, for the quarter ended June 30, 2013, was $0.23 as compared to $0.25, for the same quarter in 2012.

 

Net income available to common stockholders, for the six months ended June 30, 2013, was $105.5 million as compared to $59.0 million, for the same period in 2012. Net income per share, for the six months ended June 30, 2013, was $0.57 as compared to $0.44, for the same period in 2012.

 

The calculation to determine net income for a real estate company includes impairments and/or gains from the sales of investment properties. Impairments and/or gains on property sales vary from quarter to quarter. This variance can significantly impact net income.

 

FFO Available to Common Stockholders

Funds from Operations (FFO), for the quarter ended June 30, 2013, increased 81.7% to $118.5 million as compared to $65.2 million for the same quarter in 2012. FFO per share, for the quarter ended June 30, 2013, increased 22.4% to $0.60 as compared to $0.49, for the same quarter in 2012.

 

FFO, for the six months ended June 30, 2013, increased 67.9% to $211.4 million as compared to $125.9 million, for the same period in 2012. FFO per share, for the six months ended June 30, 2013, increased 21.1% to $1.15 as compared to $0.95, for the same period in 2012.

 

1



 

Normalized FFO Available to Common Stockholders

Normalized Funds from Operations, which is based on FFO adjusted to add back ARCT merger-related costs, for the quarter ended June 30, 2013, increased 82.8% to $119.2 million as compared to $65.2 million, for the same quarter in 2012. Normalized FFO per share, for the quarter ended June 30, 2013, increased 24.5% to $0.61 as compared to $0.49, for the same quarter in 2012.

 

Normalized FFO, for the six months ended June 30, 2013, increased 78.0% to $224.1 million as compared to $125.9 million, for the same period in 2012. Normalized FFO per share, for the six months ended June 30, 2013, increased 28.4% to $1.22 as compared to $0.95, for the same period in 2012.

 

AFFO Available to Common Stockholders

Adjusted Funds from Operations (AFFO), for the quarter ended June 30, 2013, increased 73.8% to $115.6 million as compared to $66.5 million, for the same quarter in 2012. AFFO per share, for the quarter ended June 30, 2013, increased 18.0% to $0.59 as compared to $0.50, for the same quarter in 2012.

 

AFFO, for the six months ended June 30, 2013, increased 65.3% to $219.5 million as compared to $132.8 million, for the same period in 2012. AFFO per share, for the six months ended June 30, 2013, increased 19.0% to $1.19 as compared to $1.00, for the same period in 2012.

 

The company considers FFO, normalized FFO, and AFFO to be appropriate supplemental measures of a Real Estate Investment Trust’s (REIT’s) operating performance. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust’s (NAREIT’s) definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate, reduced by gains on sales of investment properties and extraordinary items. Normalized FFO adds back merger-related costs for the acquisition of ARCT. AFFO further adjusts Normalized FFO for unique revenue and expense items, which are not pertinent to the measurement of the company’s ongoing operating performance. See the reconciliation of net income available to common stockholders to FFO, normalized FFO and AFFO on page six.

 

Dividend Information

In June 2013, Realty Income announced the 63rd consecutive quarterly dividend increase, which is the 72nd increase in the amount of the dividend since the company’s listing on the New York Stock Exchange in 1994. The annualized dividend amount, as of June 30, 2013, was approximately $2.179 per share. The amount of the monthly dividends paid increased 24.5% to $0.544 per share, in the second quarter of 2013 from $0.437 per share for the same period in 2012. In addition, through June 30, 2013, the company has paid 515 consecutive monthly dividends and over $2.5 billion in total dividends since 1969. Realty Income has a dividend reinvestment and stock purchase program that can be accessed at www.realtyincome.com. The program is administered by Wells Fargo Shareowner Services.

 

Real Estate Portfolio Update

 

As of June 30, 2013, Realty Income’s portfolio of freestanding, single-tenant properties consisted of 3,681 properties located in 49 states and Puerto Rico, leased to 194 commercial enterprises doing business in 46 industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 11.0 years.

 

Portfolio Management Activities

The company’s portfolio of commercial real estate, owned primarily under 10- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of June 30, 2013, portfolio occupancy was 98.2% with 68 properties available for lease out of a total of 3,681 properties in the portfolio, as compared to 97.3% portfolio occupancy for the same period in 2012.

 

Rent Increases

During the quarter ended June 30, 2013, same store rents, on 2,388 properties under lease, increased 1.1% to $109.9 million, as compared to $108.7 million for the same quarter in 2012. For the six months ended June 30, 2013, same store rents, on 2,388 properties under lease, increased 1.3% to $220.3 million, as compared to $217.5 million for the same period in 2012.

 

Property Acquisitions

During the second quarter of 2013, Realty Income invested $738.1 million in 190 new properties and properties under development or expansion located in 32 states. These properties are 100% leased with a weighted average lease term of approximately 14 years and an initial average lease yield of 6.8%. In addition, approximately 70% of the revenue generated by these acquisitions is from investment grade tenants.

 

2



 

During the six months ended June 30, 2013, Realty Income invested approximately $866.5 million in 206 new properties and properties under development or expansion. The new properties are located in 35 states and are 100% leased with an average lease term of approximately 14 years and an initial average lease yield of 7.0%. Approximately 61% of the revenue generated from the year-to-date 2013 acquisitions is from investment grade tenants. These property acquisitions are in addition to the $3.2 billion acquisition of 515 properties resulting from Realty Income’s acquisition of American Realty Capital Trust, which was completed during the first quarter of 2013.

 

Realty Income maintains a $1.0 billion unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. As of July 16, 2013, the company repaid all credit facility borrowings with funds from a notes offering that closed on that date (see “Other Activities” section of the press release). The full $1.0 billion credit facility is available to fund additional acquisitions.

 

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in the second quarter of 2013. The objective of this program is to sell assets when the company believes the reinvestment of the sales proceeds will generate higher returns, enhance the credit quality of the company’s real estate portfolio, increase the average lease length, and/or decrease tenant or industry concentration.

 

During the quarter ended June 30, 2013, Realty Income sold 17 properties for $23.7 million, with a gain on sales of $5.7 million, as compared to 14 properties sold for $15.0 million, with a gain on sales of $3.4 million, during the same quarter in 2012.

 

During the six months ended June 30, 2013, Realty Income sold 34 properties for $83.7 million, with a gain on sales of $44.3 million, as compared to 19 properties sold for $18.6 million, with a gain on sales of $4.0 million, during the same period in 2012.

 

Other Activities

 

Investment Grade Debt Ratings Upgraded by Standard & Poor’s

In June 2013, Realty Income received a ratings upgrade from Standard & Poor’s Ratings Services to BBB+ from BBB on the company’s senior unsecured debt ratings, and to BBB- from BB+ on its preferred stock ratings, with a stable outlook.

 

Issuance of $750 million of 4.65% Senior Unsecured Notes

On July 16, 2013, Realty Income issued $750 million of 4.65% senior unsecured notes due 2023. The public offering price for the notes was 99.775% of the principal amount for an effective yield to maturity of 4.678%. The net proceeds from the offering were used to repay all of the borrowings outstanding under the company’s acquisition credit facility and for other general corporate purposes and working capital, which may include additional acquisitions.

 

Direct Stock Purchase and Dividend Reinvestment Plan (the “Stock Plan”)

During the second quarter of 2013, Realty Income issued 26,312 common shares via its Stock Plan, generating gross proceeds of approximately $1.2 million and, during the six months ended June 30, 2013, issued 44,549 common shares generating gross proceeds of approximately $2.0 million.

 

CEO Comments on Operating Results

Commenting on Realty Income’s financial results and real estate operations, Chief Executive Officer, Tom A. Lewis said, “The second quarter of 2013 was another record quarter for us. We are again pleased to report significant increases in all facets of our operations, including continued strength in the performance of our real estate portfolio, with occupancy increasing to 98.2% at the end of the second quarter from 97.7% at the end of the first quarter and acquisition activities continuing at a brisk pace.”

 

“The key drivers in our second quarter operating results are: 1) $866 million in new acquisitions, during the first six months of this year, at an initial average lease yield of 7.0%; 2) the immediately accretive rental revenue from our acquisition of ARCT for $3.2 billion, completed in January 2013; and 3) the continued strength of our existing portfolio of properties. We also now believe 2013 estimated acquisitions will be at least $1.25 billion versus our prior estimate of $1.0 billion, as acquisition activities remain robust and are projected to be immediately accretive to 2013 AFFO. Of note, and consistent with our strategic focus on continuing to increase the overall credit quality of our real estate portfolio, the majority, approximately 61%, of the properties acquired are leased to investment grade-rated tenants.”

 

3



 

“We were also successful in accessing the capital markets during July 2013, issuing $750 million of 10-year, 4.65% senior unsecured notes in an offering that was upsized from an anticipated $500 million issuance. The proceeds from the $750 million offering will be used to permanently finance the majority of our property acquisitions. With an average going in cash cap rate of 7.0%, on the properties acquired, and a 4.65% coupon on the note offering, the spreads generated from acquisitions will be very positive for our earnings. As a result of this offering, we were able to pay off our acquisition credit facility, and so we begin the second half of the year with all of our $1.0 billion acquisition credit facility available to make additional investments.”

 

“For our shareholders that rely on monthly dividend income, we would note the 24.5% increase in the dividends per share paid during the quarter. This is the result of a sizable increase in the dividend during the first quarter combined with the two smaller increases we announced in March and June of this year. Today, our shareholders enjoy an annualized dividend of $2.179, as compared to the $1.821 dividend at the end of 2012. Given the difficulty income oriented investors face in generating adequate yield today, we are pleased that our operations continue to provide our shareholders with an increasing dividend.”

 

FFO and AFFO Commentary

Realty Income’s FFO and AFFO per share has historically tended to be stable and fairly predictable because of the long-term leases that are the primary source of the company’s revenue. There are, however, several factors that can cause FFO and AFFO per share to vary from levels that have been anticipated by the company. These factors include, but are not limited to, changes in interest rates and occupancy rates, periodically accessing the capital markets, the level and timing of property and entity acquisitions and dispositions, integration of the acquired ARCT properties including the finalization of purchase price allocations, lease rollovers, the general real estate market, and the economy.

 

2013 Earnings Estimates

Normalized FFO is based on FFO adjusted to add back ARCT merger-related costs. The Normalized 2013 FFO and AFFO estimates are as follows (excluding the costs associated with the ARCT transaction):

 

Normalized FFO per share for 2013 should range from $2.37 to $2.43 per share, an increase of 17% to 20% over the Normalized 2012 FFO per share of $2.02. Normalized FFO per share for 2013 is based on an estimated net income per share range of $0.93 to $0.99, plus estimated real estate depreciation of $1.63 plus ARCT merger-related costs of $0.07, and reduced by potential estimated gains on sales of investment properties of $0.26 per share (in accordance with NAREIT’s definition of FFO).

 

AFFO per share for 2013 should range from $2.35 to $2.41 per share, an increase of 14% to 17% over the 2012 AFFO per share of $2.06. AFFO further adjusts Normalized FFO for unique revenue and expense items, which are not pertinent to the measurement of the company’s ongoing operating performance. See the reconciliation of net income available to common stockholders to FFO, normalized FFO and AFFO on page six.

 

About Realty Income

Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of June 30, 2013, the company had paid 515 consecutive monthly dividends throughout its 44-year operating history. The monthly income is supported by the cash flows from over 3,600 properties owned under long-term lease agreements with 194 leading regional and national commercial enterprises. The company is an active buyer of net-leased properties nationwide. Additional information about the company can be obtained from the corporate website at www.realtyincome.com or www.twitter.com/realtyincome.

 

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 the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, integration of the ARCT acquisition, and the outcome of any legal proceedings to which the company is a party, as described in the company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The company undertakes 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.

 

Note to Editors: Realty Income press releases are available via the internet at http://www.realtyincome.com/invest/newsroom-library/press-releases.shtml.

 

Media Contact:

Tere H. Miller, Vice President, Corporation Communications

(760) 741-2111, x1177

 

4



 

CONSOLIDATED STATEMENTS OF INCOME

For the three and six months ended June 30, 2013 and 2012

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

 

 

 

 

Three months
Ended 6/30/13

 

Three months
Ended 6/30/12

 

Six months
Ended 6/30/13

 

Six months
Ended 6/30/12

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

$

182,354

 

 

$

112,528

 

 

$

352,104

 

 

$

224,020

 

Other

 

 

1,965

 

 

605

 

 

3,356

 

 

858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

184,319

 

 

113,133

 

 

355,460

 

 

224,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

77,698

 

 

34,742

 

 

147,280

 

 

69,093

 

Interest

 

 

39,100

 

 

28,806

 

 

80,567

 

 

57,758

 

General and administrative

 

 

12,075

 

 

9,273

 

 

23,688

 

 

18,440

 

Property

 

 

3,283

 

 

1,746

 

 

6,899

 

 

3,668

 

Income taxes

 

 

722

 

 

405

 

 

1,393

 

 

810

 

Merger-related costs

 

 

605

 

 

--

 

 

12,635

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses

 

 

133,483

 

 

74,972

 

 

272,462

 

 

149,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

50,836

 

 

38,161

 

 

82,998

 

 

75,109

 

Income from discontinued operations

 

 

3,911

 

 

5,246

 

 

43,562

 

 

7,562

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

54,747

 

 

43,407

 

 

126,560

 

 

82,671

 

Net income attributable to noncontrolling interests

 

 

(77

)

 

 

--

 

 

(86

)

 

 

--

 

Net income attributable to the Company

 

 

54,670

 

 

43,407

 

 

126,474

 

 

82,671

 

Preferred stock dividends

 

 

(10,482

)

 

(10,457

)

 

(20,965

)

 

(19,953

)

Excess of redemption value over carrying value of preferred shares redeemed

 

 

--

 

 

--

 

 

--

 

 

(3,696

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

 

$

44,188

 

 

$

32,950

 

 

$

105,509

 

 

$

59,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds from operations available to common stockholders (FFO)

 

 

$

118,547

 

 

$

65,167

 

 

$

211,435

 

 

$

125,863

 

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

 

 

$

119,152

 

 

$

65,167

 

 

$

224,070

 

 

$

125,863

 

Adjusted funds from operations available to common stockholders (AFFO)

 

 

$

115,564

 

 

$

66,499

 

 

$

219,521

 

 

$

132,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information for common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, basic and diluted

 

 

$

0.21

 

 

$

0.21

 

 

$

0.34

 

 

$

0.39

 

Net income, basic and diluted

 

 

$

0.23

 

 

$

0.25

 

 

$

0.57

 

 

$

0.44

 

FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.61

 

 

$

0.49

 

 

$

1.15

 

 

$

0.95

 

Diluted

 

 

$

0.60

 

 

$

0.49

 

 

$

1.15

 

 

$

0.95

 

Normalized FFO, basic and diluted

 

 

$

0.61

 

 

$

0.49

 

 

$

1.22

 

 

$

0.95

 

AFFO, basic and diluted

 

 

$

0.59

 

 

$

0.50

 

 

$

1.19

 

 

$

1.00

 

Cash dividends paid per common share

 

 

$

0.544

 

 

$

0.437

 

 

$

1.057

 

 

$

0.874

 

 

5



 

FUNDS FROM OPERATIONS (FFO)

(dollars in thousands, except per share amounts)

 

 

 

Three Months
Ended 6/30/13

 

Three Months
Ended 6/30/12

 

Six Months
Ended 6/30/13

 

Six Months
Ended 6/30/12

 

Net income available to common stockholders

 

 

$

 

44,188

 

 

$

32,950

 

 

$

105,509

 

 

$

59,022

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

 

77,698

 

 

34,742

 

 

147,280

 

 

69,093

 

Discontinued operations

 

 

196

 

 

896

 

 

520

 

 

1,848

 

Depreciation allocated to noncontrolling interest

 

 

(220

)

 

--

 

 

(395

)

 

--

 

Depreciation of furniture, fixtures & equipment

 

 

(67

)

 

(67

)

 

(127

)

 

(135

)

Provisions for impairment on investment properties

 

 

2,496

 

 

--

 

 

2,952

 

 

--

 

Gain on sales of investment properties, discontinued operations

 

 

(5,744

)

 

 

(3,354

)

 

 

(44,304

)

 

 

(3,965

)

FFO available to common stockholders

 

 

118,547

 

 

65,167

 

 

211,435

 

 

125,863

 

Merger-related costs

 

 

605

 

 

--

 

 

12,635

 

 

--

 

Normalized FFO available to common stockholders

 

 

$

 

119,152

 

 

$

65,167

 

 

$

224,070

 

 

$

125,863

 

FFO per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

0.61

 

 

$

0.49

 

 

$

1.15

 

 

$

0.95

 

Diluted

 

 

$

 

0.60

 

 

$

0.49

 

 

$

1.15

 

 

$

0.95

 

Normalized FFO per common share, basic and diluted

 

 

$

 

0.61

 

 

$

0.49

 

 

$

1.22

 

 

$

0.95

 

Dividends paid to common stockholders

 

 

$

 

106,692

 

 

$

58,360

 

 

$

191,669

 

 

$

116,552

 

Normalized FFO in excess of dividends paid to common stockholders

 

 

$

 

12,460

 

 

$

6,807

 

 

$

32,401

 

 

$

9,311

 

Weighted average number of common shares used for computation per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

195,574,014

 

 

132,592,939

 

 

183,714,191

 

 

132,643,698

 

Diluted

 

 

196,099,610

 

 

132,828,540

 

 

184,165,700

 

 

132,785,213

 

 

We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trust’s definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, reduced by gains on sales of investment properties and extraordinary items. We define normalized FFO, a non-GAAP measure, as FFO excluding the ARCT merger-related costs.

 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(dollars in thousands, except per share amounts)

 

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).

 

 

 

Three Months
Ended 6/30/13

 

Three Months
Ended 6/30/12

 

Six Months
Ended 6/30/13

 

Six Months
Ended 6/30/12

 

Net income available to common stockholders

 

 

$

44,188

 

 

$

32,950

 

 

$

105,509

 

 

$

59,022

 

Cumulative adjustments to calculate normalized FFO(1)

 

 

74,964

 

 

32,217

 

 

118,561

 

 

66,841

 

Normalized FFO available to common stockholders

 

 

119,152

 

 

65,167

 

 

224,070

 

 

125,863

 

Excess of redemption value over carrying value of preferred share redemption

 

 

--

 

 

--

 

 

--

 

 

3,696

 

Amortization of share-based compensation

 

 

3,653

 

 

2,593

 

 

7,498

 

 

5,550

 

Amortization of deferred financing costs(2)

 

 

1,015

 

 

609

 

 

2,021

 

 

1,226

 

Amortization of net mortgage premiums

 

 

(2,494

)

 

(71

)

 

(4,441

)

 

(168

)

(Gain) loss on interest rate swaps

 

 

(1,738

)

 

40

 

 

(1,286

)

 

53

 

Capitalized leasing costs and commissions

 

 

(361

)

 

(431

)

 

(774

)

 

(698

)

Capitalized building improvements

 

 

(1,255

)

 

(914

)

 

(2,520

)

 

(1,707

)

Other adjustments(3)

 

 

(2,408

)

 

 

(494

)

 

 

(5,047

)

 

 

(1,022

)

Total AFFO available to common stockholders

 

 

$

115,564

 

 

$

66,499

 

 

$

219,521

 

 

$

132,793

 

AFFO per common share, basic and diluted

 

 

$

0.59

 

 

$

0.50

 

 

$

1.19

 

 

$

1.00

 

Dividends paid to common stockholders

 

 

$

106,692

 

 

$

58,360

 

 

$

191,669

 

 

$

116,552

 

AFFO in excess of dividends paid to common stockholders

 

 

$

8,872

 

 

$

8,139

 

 

$

27,852

 

 

$

16,241

 

 

(1)           See FFO and normalized FFO calculation above for reconciling items.

(2)           Includes the amortization of costs incurred and capitalized when our notes were issued in March 2003, November 2003, March 2005, September 2005, September 2006, September 2007, June 2010, June 2011 and October 2012. Additionally, this includes the amortization of deferred financing costs incurred and capitalized in connection with our assumption of the mortgages payable and the issuance of our term loan. The deferred financing costs are being amortized over the lives of the respective mortgages and term loan. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.

(3)           Includes straight-line rent revenue, and the amortization of above and below-market leases.

 

6



 

HISTORICAL FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

 

For the three months ended June 30,

 

2013

 

2012

 

2011

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

44,188

 

$

32,950

 

$

33,185

 

$

24,985

 

$

26,497

 

Depreciation and amortization

 

77,607

 

35,571

 

29,000

 

23,469

 

22,922

 

Provisions for impairment on Realty Income investment properties

 

2,496

 

--

 

10

 

53

 

--

 

Gain on sales of investment properties

 

(5,744

)

 

(3,354

)

 

(1,251

)

 

(1,663

)

 

(2,239

)

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

118,547

 

65,167

 

60,944

 

46,844

 

47,180

 

Merger-related costs

 

605

 

--

 

--

 

--

 

--

 

Normalized FFO

 

$

119,152

 

$

65,167

 

$

60,944

 

$

46,844

 

$

47,180

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO per diluted share

 

$

0.61

 

$

0.49

 

$

0.48

 

$

0.45

 

$

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

$

115,564

 

$

66,499

 

$

62,370

 

$

47,730

 

$

47,943

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per diluted share

 

$

0.59

 

$

0.50

 

$

0.49

 

$

0.46

 

$

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid per share

 

$

0.544

 

$

0.437

 

$

0.434

 

$

0.430

 

$

0.426

 

Weighted average diluted shares outstanding

 

196,099,610

 

132,828,540

 

126,202,047

 

103,765,828

 

103,450,457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30,

 

2013

 

2012

 

2011

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

105,509

 

$

59,022

 

$

63,120

 

$

49,127

 

$

50,518

 

Depreciation and amortization

 

147,278

 

70,806

 

55,791

 

46,682

 

45,833

 

Provisions for impairment on Realty Income investment properties

 

2,952

 

--

 

210

 

87

 

--

 

Gain on sales of investment properties

 

(44,304

)

 

(3,965

)

 

(1,379

)

 

(2,366

)

 

(2,436

)

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

211,435

 

125,863

 

117,742

 

93,530

 

93,915

 

Merger-related costs

 

12,635

 

--

 

--

 

--

 

--

 

Normalized FFO

 

$

224,070

 

$

125,863

 

$

117,742

 

$

93,530

 

$

93,915

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO per diluted share

 

$

1.22

 

$

0.95

 

$

0.96

 

$

0.90

 

$

0.91

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

$

219,521

 

$

132,793

 

$

120,610

 

$

95,344

 

$

95,619

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per diluted share

 

$

1.19

 

$

1.00

 

$

0.98

 

$

0.92

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid per share

 

$

1.057

 

$

0.874

 

$

0.866

 

$

0.859

 

$

0.851

 

Weighted average diluted shares outstanding

 

184,165,700

 

132,785,213

 

122,691,418

 

103,778,609

 

103,479,897

 

 

7



 

CONSOLIDATED BALANCE SHEETS

As of June 30, 2013 and December 31, 2012

(dollars in thousands)

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Real estate, at cost:

 

 

 

 

 

Land

 

$

2,539,628

 

$

1,999,820

 

Buildings and improvements

 

6,672,354

 

3,920,865

 

Total real estate, at cost

 

9,211,982

 

5,920,685

 

Less accumulated depreciation and amortization

 

(998,079

)

 

(897,767

)

 

 

 

 

 

 

Net real estate held for investment

 

8,213,903

 

5,022,918

 

Real estate held for sale, net

 

16,808

 

19,219

 

Net real estate

 

8,230,711

 

5,042,137

 

Cash and cash equivalents

 

22,575

 

5,248

 

Accounts receivable, net

 

27,507

 

21,659

 

Acquired lease intangible assets, net

 

972,049

 

242,125

 

Goodwill

 

15,834

 

16,945

 

Other assets, net

 

146,857

 

115,249

 

 

 

 

 

 

 

Total assets

 

$

9,415,533

 

$

5,443,363

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Distributions payable

 

$

39,280

 

$

23,745

 

Accounts payable and accrued expenses

 

77,411

 

70,426

 

Acquired lease intangible liabilities, net

 

116,381

 

26,471

 

Other liabilities

 

29,266

 

26,059

 

Lines of credit payable

 

701,000

 

158,000

 

Mortgages payable, net

 

827,109

 

175,868

 

Term loan

 

70,000

 

--

 

Notes payable

 

2,450,000

 

2,550,000

 

 

 

 

 

 

 

Total liabilities

 

4,310,447

 

3,030,569

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock and paid in capital

 

609,363

 

609,363

 

Common stock and paid in capital

 

5,329,715

 

2,572,092

 

Distributions in excess of net income

 

(870,199

)

 

(768,661

)

 

 

 

 

 

 

Total stockholders’ equity

 

5,068,879

 

2,412,794

 

Noncontrolling interests

 

36,207

 

--

 

 

 

 

 

 

 

Total equity

 

5,105,086

 

2,412,794

 

 

 

 

 

 

 

Total liabilities and equity

 

$

9,415,533

 

$

5,443,363

 

 

8



 

Realty Income Performance vs. Major Stock Indices

 

 

 

 

 

 

 

Equity

 

Dow Jones

 

 

 

NASDAQ

 

 

 

Realty Income

 

REIT Index(1)

 

Industrial Average

 

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 12/31/94

 

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%

 

YTD Q2 2013

 

5.2%

 

6.9%

 

3.5%

 

5.8%

 

2.5%

 

15.2%

 

2.2%

 

13.8%

 

1.4%

 

12.7%

 

Compounded Average Annual Total Return(5)

 

 

 

17.3%

 

 

 

11.1%

 

 

 

9.9%

 

 

 

8.9%

 

 

 

8.3%

 

 

Note: All of these dividend yields are calculated as annualized dividends based on 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.

(3)     Includes reinvestment of dividends. Sources: NAREIT website and Factset.

(4)     Price only index, does not include dividends. Source: Factset.

(5)     All of these Compounded Average Annual Total Return rates are calculated in the same manner: from Realty Income’s NYSE listing on October 18, 1994 through June 30, 2013, and (except for NASDAQ) assuming 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.

 

9



 

Property Type Diversification

 

The following table sets forth certain property type information regarding Realty Income’s property portfolio as of June 30, 2013 (dollars in thousands):

 

 

 

 

 

Approximate

 

Rental Revenue for

 

Percentage of

 

 

 

Number of

 

Leasable

 

the Quarter Ended

 

Rental

 

Property Type

 

Properties

 

Square Feet

 

June 30, 2013(1)

 

Revenue

 

Retail

 

3,543

 

36,740,700

 

$ 141,914

 

77.7

%

 

Distribution

 

64

 

15,302,300

 

21,350

 

11.7

 

 

Office

 

36

 

2,277,800

 

9,691

 

5.3

 

 

Agriculture

 

15

 

184,500

 

5,145

 

2.8

 

 

Manufacturing

 

11

 

3,457,500

 

4,267

 

2.3

 

 

Industrial

 

12

 

383,200

 

355

 

0.2

 

 

Totals

 

3,681

 

58,346,000

 

$ 182,722

 

100.0

%

 

 

(1)     Includes rental revenue for all properties owned by Realty Income at June 30, 2013, including revenue from properties reclassified as discontinued operations of $392. Excludes revenue of $24 from properties owned by Crest.

 

 

 

 

 

 

Tenant Diversification

 

The largest tenants based on percentage of total portfolio rental revenue at June 30, 2013 include the following:

 

FedEx

 

5.3%

 

Rite Aid

 

2.3%

 

LA Fitness

 

4.5%

 

Regal Cinemas

 

2.2%

 

Walgreens

 

4.1%

 

Dollar General

 

2.1%

 

Family Dollar

 

3.5%

 

CVS Pharmacy

 

2.0%

 

AMC Theatres

 

3.3%

 

The Pantry

 

1.9%

 

Diageo

 

3.1%

 

Circle K

 

1.8%

 

BJ’s Wholesale Clubs

 

3.0%

 

Walmart/Sam’s Club

 

1.7%

 

Northern Tier Energy/Super America

 

2.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10



 

Industry Diversification

 

The following table sets forth certain information regarding Realty Income’s property portfolio classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:

 

 

 

 

Percentage of Rental Revenue(1)

 

 

 

For the
Quarter
Ended

 

For the Years Ended

 

 

 

June 30,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

 

 

2013

 

2012

 

2011

 

2010

 

2009

 

2008

 

2007

 

Retail industries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel stores

 

1.9

%

1.7

%

1.4

%

1.2

%

1.1

%

1.1

%

1.2

%

Automotive collision services

 

0.8

 

1.1

 

0.9

 

1.0

 

1.1

 

1.0

 

1.1

 

Automotive parts

 

1.1

 

1.0

 

1.2

 

1.4

 

1.5

 

1.6

 

2.1

 

Automotive service

 

2.2

 

3.1

 

3.7

 

4.7

 

4.8

 

4.8

 

5.2

 

Automotive tire services

 

3.9

 

4.7

 

5.6

 

6.4

 

6.9

 

6.7

 

7.3

 

Book stores

 

0.1

 

0.1

 

0.1

 

0.1

 

0.2

 

0.2

 

0.2

 

Child care

 

3.0

 

4.5

 

5.2

 

6.5

 

7.3

 

7.6

 

8.4

 

Consumer electronics

 

0.3

 

0.5

 

0.5

 

0.6

 

0.7

 

0.8

 

0.9

 

Convenience stores

 

11.4

 

16.3

 

18.5

 

17.1

 

16.9

 

15.8

 

14.0

 

Crafts and novelties

 

0.5

 

0.3

 

0.2

 

0.3

 

0.3

 

0.3

 

0.3

 

Dollar stores

 

5.6

 

2.2

 

-

 

-

 

-

 

-

 

-

 

Drug stores

 

6.9

 

3.5

 

3.8

 

4.1

 

4.3

 

4.1

 

2.7

 

Education

 

0.5

 

0.7

 

0.7

 

0.8

 

0.9

 

0.8

 

0.8

 

Entertainment

 

0.7

 

0.9

 

1.0

 

1.2

 

1.3

 

1.2

 

1.4

 

Equipment services

 

0.1

 

0.1

 

0.2

 

0.2

 

0.2

 

0.2

 

0.2

 

Financial services

 

1.7

 

0.2

 

0.2

 

0.2

 

0.2

 

0.2

 

0.2

 

General merchandise

 

1.1

 

0.6

 

0.6

 

0.8

 

0.8

 

0.8

 

0.7

 

Grocery stores

 

3.2

 

3.7

 

1.6

 

0.9

 

0.7

 

0.7

 

0.7

 

Health and fitness

 

5.9

 

6.8

 

6.4

 

6.9

 

5.9

 

5.6

 

5.1

 

Health care

 

*

 

-

 

-

 

-

 

-

 

-

 

-

 

Home furnishings

 

0.9

 

1.0

 

1.1

 

1.3

 

1.3

 

2.4

 

2.6

 

Home improvement

 

1.3

 

1.5

 

1.7

 

2.0

 

2.2

 

2.1

 

2.4

 

Jewelry

 

0.1

 

-

 

-

 

-

 

-

 

-

 

-

 

Motor vehicle dealerships

 

1.6

 

2.1

 

2.2

 

2.6

 

2.7

 

3.2

 

3.1

 

Office supplies

 

0.5

 

0.8

 

0.9

 

0.9

 

1.0

 

1.0

 

1.1

 

Pet supplies and services

 

0.9

 

0.6

 

0.7

 

0.9

 

0.9

 

0.8

 

0.9

 

Restaurants - casual dining

 

5.5

 

7.3

 

10.9

 

13.4

 

13.7

 

14.3

 

14.9

 

Restaurants - quick service

 

4.4

 

5.9

 

6.6

 

7.7

 

8.3

 

8.2

 

6.6

 

Shoe stores

 

0.1

 

0.1

 

0.2

 

0.1

 

-

 

-

 

-

 

Sporting goods

 

1.8

 

2.5

 

2.7

 

2.7

 

2.6

 

2.3

 

2.6

 

Theaters

 

6.3

 

9.4

 

8.8

 

8.9

 

9.2

 

9.0

 

9.0

 

Transportation services

 

0.1

 

0.2

 

0.2

 

0.2

 

0.2

 

0.2

 

0.2

 

Wholesale clubs

 

3.3

 

3.2

 

0.7

 

-

 

-

 

-

 

-

 

Other

 

*

 

0.1

 

0.1

 

0.3

 

1.1

 

1.2

 

1.9

 

Retail industries

 

77.7

%

86.7

%

88.6

%

95.4

%

98.3

%

98.2

%

97.8

%

 

11



 

Industry Diversification (continued)

 

 

 

Percentage of Rental Revenue(1)

 

 

 

For the
Quarter
Ended

 

For the Years Ended

 

 

 

June 30,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

 

 

2013

 

2012

 

2011

 

2010

 

2009

 

2008

 

2007

 

Non-retail industries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace

 

0.9

 

0.9

 

0.5

 

-

 

-

 

-

 

-

 

Beverages

 

3.4

 

5.1

 

5.6

 

3.0

 

-

 

-

 

-

 

Consumer appliances

 

0.6

 

0.1

 

-

 

-

 

-

 

-

 

-

 

Consumer goods

 

1.1

 

0.1

 

-

 

-

 

-

 

-

 

-

 

Crafts and novelties

 

0.1

 

-

 

-

 

-

 

-

 

-

 

-

 

Diversified industrial

 

0.1

 

0.1

 

-

 

-

 

-

 

-

 

-

 

Equipment services

 

0.3

 

0.3

 

0.2

 

-

 

-

 

-

 

-

 

Financial services

 

0.5

 

0.4

 

0.3

 

-

 

-

 

-

 

-

 

Food processing

 

1.6

 

1.3

 

0.7

 

-

 

-

 

-

 

-

 

Government services

 

1.5

 

0.1

 

0.1

 

0.1

 

0.1

 

-

 

-

 

Health care

 

2.2

 

*

 

*

 

-

 

-

 

-

 

-

 

Home furnishings

 

0.2

 

-

 

-

 

-

 

-

 

-

 

-

 

Home improvement

 

0.3

 

-

 

-

 

-

 

-

 

-

 

-

 

Insurance

 

0.1

 

*

 

-

 

-

 

-

 

-

 

-

 

Machinery

 

0.2

 

0.1

 

-

 

-

 

-

 

-

 

-

 

Other manufacturing

 

0.6

 

-

 

-

 

-

 

-

 

-

 

-

 

Packaging

 

1.0

 

0.7

 

0.4

 

-

 

-

 

-

 

-

 

Paper

 

0.2

 

0.1

 

0.1

 

-

 

-

 

-

 

-

 

Shoe stores

 

0.9

 

-

 

-

 

-

 

-

 

-

 

-

 

Telecommunications

 

0.7

 

0.8

 

0.7

 

-

 

-

 

-

 

-

 

Transportation services

 

5.8

 

2.2

 

1.6

 

-

 

-

 

-

 

-

 

Other

 

*

 

1.0

 

1.2

 

1.5

 

1.6

 

1.8

 

2.2

 

Non-retail industries

 

22.3

%

13.3

%

11.4

%

4.6

%

1.7

%

1.8

%

2.2

%

Totals

 

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

 

*

Less than 0.1%

 

 

(1)

Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified as discontinued operations. Excludes revenue from properties owned by Crest.

 

12



 

Lease Expirations

 

The following table sets forth certain information regarding Realty Income’s property portfolio regarding the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on our 3,597 net leased, single-tenant properties as of June 30, 2013 (dollars in thousands):

 

 

 

 

Total Portfolio

 

Initial Expirations(3)

 

Subsequent Expirations(4)

 

 

 

 

 

 

Rental

 

 

 

 

 

Rental

 

 

 

 

 

Rental

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Revenue

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

for the

 

 

 

 

 

for the

 

 

 

 

 

for the

 

 

 

 

 

 

 

 

Quarter

 

% of

 

 

 

Quarter

 

% of

 

 

 

Quarter

 

% of

 

 

Number

 

Approx.

 

Ended

 

Total

 

Number

 

Ended

 

Total

 

Number

 

Ended

 

Total

 

 

of Leases

 

Leasable

 

June 30,

 

Rental

 

of Leases

 

June 30,

 

Rental

 

of Leases

 

June 30,

 

Rental

Year

 

Expiring (1)

 

Sq. Feet

 

2013(2)

 

Revenue

 

Expiring

 

2013

 

Revenue

 

Expiring

 

2013

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

107

 

828,000

 

$

2,642

 

1.5

%

 

31

 

$

977

 

0.6

%

 

76

 

$

1,665

 

0.9

%

2014

 

155

 

1,074,200

 

3,834

 

2.1

 

 

53

 

1,753

 

1.0

 

 

102

 

2,081

 

1.1

 

2015

 

169

 

911,500

 

3,868

 

2.1

 

 

67

 

1,779

 

1.0

 

 

102

 

2,089

 

1.1

 

2016

 

187

 

1,110,300

 

4,094

 

2.3

 

 

119

 

2,492

 

1.4

 

 

68

 

1,602

 

0.9

 

2017

 

171

 

1,978,900

 

5,690

 

3.1

 

 

45

 

2,954

 

1.6

 

 

126

 

2,736

 

1.5

 

2018

 

243

 

3,244,300

 

10,022

 

5.5

 

 

162

 

7,670

 

4.2

 

 

81

 

2,352

 

1.3

 

2019

 

168

 

2,787,200

 

9,645

 

5.3

 

 

156

 

9,147

 

5.0

 

 

12

 

498

 

0.3

 

2020

 

107

 

3,358,200

 

8,238

 

4.5

 

 

96

 

7,869

 

4.3

 

 

11

 

369

 

0.2

 

2021

 

187

 

5,164,600

 

13,130

 

7.2

 

 

179

 

12,611

 

6.9

 

 

8

 

519

 

0.3

 

2022

 

209

 

7,563,800

 

14,051

 

7.8

 

 

201

 

13,794

 

7.6

 

 

8

 

257

 

0.2

 

2023

 

328

 

4,436,600

 

16,865

 

9.3

 

 

317

 

16,268

 

9.0

 

 

11

 

597

 

0.3

 

2024

 

137

 

2,065,500

 

6,145

 

3.4

 

 

137

 

6,145

 

3.4

 

 

0

 

0

 

0.0

 

2025

 

288

 

3,702,200

 

16,113

 

8.9

 

 

283

 

15,992

 

8.8

 

 

5

 

121

 

0.1

 

2026

 

232

 

3,326,200

 

11,476

 

6.4

 

 

229

 

11,394

 

6.3

 

 

3

 

82

 

0.1

 

2027

 

444

 

4,371,300

 

14,920

 

8.2

 

 

442

 

14,880

 

8.2

 

 

2

 

40

 

*

 

2028 - 2043

 

465

 

11,192,500

 

40,567

 

22.4

 

 

458

 

40,420

 

22.3

 

 

7

 

147

 

0.1

 

Totals

 

3,597

 

57,115,300

 

$

181,300

 

100.0

%

 

2,975

 

$

166,145

 

91.6

%

 

622

 

$

15,155

 

8.4

%

 

*

Less than 0.1%

 

 

(1)

Excludes 16 multi-tenant properties and 68 vacant unleased properties, one of which is a multi-tenant property. The lease expirations for properties under construction are based on the estimated date of completion of those properties.

 

 

(2)

Includes rental revenue of $392 from properties reclassified as discontinued operations and excludes revenue of $1,422 from 16 multi-tenant properties and from 68 vacant and unleased properties at June 30, 2013. Excludes revenue of $24 from four properties owned by Crest.

 

 

(3)

Represents leases to the initial tenant of the property that are expiring for the first time.

 

 

(4)

Represents lease expirations on properties in the portfolio, which have previously been renewed, extended or re-tenanted.

 

 

13



 

Geographic Diversification

 

The following table sets forth certain state-by-state information regarding Realty Income’s property portfolio as of June 30, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

Rental Revenue

 

 

 

 

 

 

 

 

 

Approximate

 

for the Quarter

 

Percentage of

 

 

 

Number of

 

Percent

 

Leasable

 

Ended

 

Rental

 

State

 

Properties

 

Leased

 

Square Feet

 

June 30, 2013 (1)

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Alabama

 

88

 

97

%

665,800

 

$

2,545

 

1.4

%

Alaska

 

2

 

100

 

128,500

 

307

 

0.2

 

Arizona

 

105

 

97

 

1,141,000

 

4,895

 

2.7

 

Arkansas

 

30

 

93

 

559,200

 

1,122

 

0.6

 

California

 

148

 

100

 

3,998,100

 

19,288

 

10.6

 

Colorado

 

67

 

99

 

729,200

 

2,474

 

1.4

 

Connecticut

 

24

 

100

 

468,000

 

2,107

 

1.2

 

Delaware

 

16

 

100

 

29,500

 

418

 

0.2

 

Florida

 

239

 

99

 

2,564,000

 

10,322

 

5.6

 

Georgia

 

180

 

96

 

2,396,400

 

7,259

 

4.0

 

Hawaii

 

--

 

--

 

--

 

--

 

--

 

Idaho

 

13

 

100

 

91,800

 

473

 

0.3

 

Illinois

 

140

 

100

 

3,463,000

 

9,493

 

5.2

 

Indiana

 

96

 

98

 

978,500

 

4,274

 

2.3

 

Iowa

 

34

 

91

 

2,675,600

 

3,026

 

1.7

 

Kansas

 

76

 

100

 

1,564,400

 

3,105

 

1.7

 

Kentucky

 

39

 

97

 

754,500

 

2,668

 

1.5

 

Louisiana

 

66

 

100

 

756,500

 

2,268

 

1.2

 

Maine

 

9

 

100

 

126,400

 

489

 

0.3

 

Maryland

 

32

 

100

 

1,113,500

 

3,715

 

2.0

 

Massachusetts

 

82

 

94

 

723,900

 

3,117

 

1.7

 

Michigan

 

101

 

100

 

923,200

 

2,866

 

1.6

 

Minnesota

 

155

 

100

 

1,152,000

 

7,198

 

3.9

 

Mississippi

 

90

 

96

 

1,233,900

 

2,274

 

1.2

 

Missouri

 

122

 

99

 

2,311,000

 

6,466

 

3.5

 

Montana

 

2

 

50

 

30,000

 

3

 

*

 

Nebraska

 

26

 

100

 

381,800

 

1,253

 

0.7

 

Nevada

 

19

 

100

 

372,400

 

1,189

 

0.7

 

New Hampshire

 

19

 

100

 

295,000

 

1,187

 

0.6

 

New Jersey

 

63

 

97

 

403,900

 

2,608

 

1.4

 

New Mexico

 

24

 

100

 

182,500

 

516

 

0.3

 

New York

 

80

 

99

 

1,970,300

 

9,942

 

5.4

 

North Carolina

 

119

 

97

 

1,105,200

 

4,284

 

2.3

 

North Dakota

 

7

 

100

 

66,000

 

117

 

0.1

 

Ohio

 

188

 

97

 

4,689,700

 

9,977

 

5.5

 

Oklahoma

 

110

 

100

 

1,448,800

 

2,330

 

1.3

 

Oregon

 

24

 

100

 

455,200

 

1,517

 

0.8

 

Pennsylvania

 

149

 

99

 

1,712,600

 

6,988

 

3.8

 

Rhode Island

 

3

 

100

 

11,000

 

37

 

*

 

South Carolina

 

121

 

97

 

776,800

 

3,949

 

2.2

 

South Dakota

 

11

 

100

 

133,500

 

263

 

0.1

 

Tennessee

 

148

 

97

 

1,921,300

 

4,649

 

2.5

 

Texas

 

382

 

98

 

6,523,300

 

17,472

 

9.6

 

Utah

 

11

 

100

 

731,000

 

1,191

 

0.7

 

Vermont

 

5

 

100

 

78,200

 

432

 

0.2

 

Virginia

 

122

 

97

 

2,488,900

 

6,285

 

3.4

 

Washington

 

38

 

100

 

404,000

 

1,268

 

0.7

 

West Virginia

 

11

 

100

 

252,000

 

864

 

0.5

 

Wisconsin

 

38

 

95

 

1,315,300

 

1,956

 

1.1

 

Wyoming

 

3

 

100

 

21,100

 

63

 

*

 

Puerto Rico

 

4

 

100

 

28,300

 

213

 

0.1

 

Totals\Average

 

3,681

 

98

%

58,346,000

 

$

182,722

 

100.0

%

 

*

Less than 0.1%

 

 

(1)

Includes rental revenue for all properties owned by Realty Income at June 30, 2013, including revenue from properties reclassified as discontinued operations of $392. Excludes revenue of $24 from properties owned by Crest.

 

14