Press Release Details

Oct 29, 2014

Operating Results For Third Quarter And First Nine Months Of 2014 Announced By Realty Income

ESCONDIDO, Calif., Oct. 29, 2014 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE:O), The Monthly Dividend Company®, today announced operating results for the third quarter ended September 30, 2014. 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 September 30, 2014 (as compared to the same quarterly period in 2013):
  • Revenue increased 16.6% to $235.7 million as compared to $202.1 million
  • Net income available to common stockholders per share was $0.26
  • FFO available to common stockholders increased 22.6% to $142.3 million
  • FFO per share increased 8.5% to $0.64
  • AFFO available to common stockholders increased 20.8% to $142.4 million
  • AFFO per share increased 6.7% to $0.64
  • Same store rents increased 1.4%
  • Portfolio occupancy increased to 98.3% from 98.1%
  • Invested $182.1 million in 49 new properties and properties under development or expansion
  • Increased the monthly dividend in September for the 77th time and for the 68th consecutive quarter
  • Dividends paid per common share increased 0.6%
  • Celebrated 20-year anniversary as a New York Stock Exchange listed company
  • Generated net proceeds of $246.3 million from a 4.125% 12-yr notes offering

Real Estate Portfolio Update Financial Results

Revenue
Revenue for the quarter ended September 30, 2014 increased 16.6% to $235.7 million, as compared to $202.1 million for the same quarter in 2013. Revenue for the nine months ended September 30, 2014 increased 21.6% to $685.9 million, as compared to $564.0 million for the same period in 2013.

Net Income Available to Common Stockholders
Net income available to common stockholders for the quarter ended September 30, 2014 was $57.9 million, as compared to $41.1 million for the same quarter in 2013. Net income per share for the quarter ended September 30, 2014 was $0.26, as compared to $0.21 for the same quarter in 2013.

Net income available to common stockholders for the nine months ended September 30, 2014 was $156.5 million, as compared to $149.8 million for the same period in 2013. Net income per share for the nine months ended September 30, 2014 was $0.72, as compared to $0.80 for the same period in 2013.

Net income available to common stockholders per share for the quarter and nine months ended September 30, 2014 was impacted by a $6.0 million non-cash redemption charge on the Class E preferred shares that were redeemed in October 2014, which represents $0.03 net income per share. This charge is for the excess in redemption value over the carrying value of the Class E preferred stock and represents the original issuance cost that was paid in 2006. Net income available to common stockholders in the first nine months of 2013 was impacted by an unusually large gain on sale of real estate, which represented $0.18 net income per share. 

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

Funds From Operations Available to Common Stockholders (FFO)
FFO for the quarter ended September 30, 2014 increased 22.6% to $142.3 million, as compared to $116.1 million for the same quarter in 2013. FFO per share for the quarter ended September 30, 2014 increased 8.5% to $0.64, as compared to $0.59 for the same quarter in 2013.

FFO for the nine months ended September 30, 2014 increased 24.2% to $419.2 million, as compared to $337.4 million for the same period in 2013. FFO per share for the nine months ended September 30, 2014 increased 7.8% to $1.93, as compared to $1.79 for the same period in 2013.

FFO per share for the quarter and nine months ended September 30, 2014 was impacted by a $6.0 million non-cash redemption charge on the Class E preferred shares that were redeemed in October 2014, which represents $0.03 FFO per share. 

Adjusted Funds From Operations Available to Common Stockholders (AFFO)
AFFO for the quarter ended September 30, 2014 increased 20.8% to $142.4 million, as compared to $117.9 million for the same quarter in 2013. AFFO per share for the quarter ended September 30, 2014 increased 6.7% to $0.64, as compared to $0.60 for the same quarter in 2013.

AFFO for the nine months ended September 30, 2014 increased 23.4% to $416.3 million, as compared to $337.4 million for the same period in 2013. AFFO per share for the nine months ended September 30, 2014 increased 7.3% to $1.92, as compared to $1.79 for the same period in 2013.

The company considers 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. FFO, for the quarter and nine months ended September 30, 2013 has also been normalized to add back merger-related costs for the acquisition of ARCT. AFFO further adjusts FFO for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company's ongoing operating performance. See the reconciliations of net income available to common stockholders to FFO and AFFO on page seven. 

Dividend Information
In September 2014, Realty Income announced the 68th consecutive quarterly dividend increase, which is the 77th 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 September 30, 2014, was approximately $2.197 per share. The amount of monthly dividends paid per share increased 0.6% to $0.548 in the third quarter of 2014 compared to $0.545 for the same period in 2013. In addition, through September 30, 2014, the company has paid 530 consecutive monthly dividends and over $3.1 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 September 30, 2014, Realty Income's portfolio of freestanding, single-tenant properties consisted of 4,284 properties located in 49 states and Puerto Rico, leased to 231 commercial tenants doing business in 47 industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 10.4 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 September 30, 2014, portfolio occupancy was 98.3% with 74 properties available for lease out of a total of 4,284 properties in the portfolio, as compared to 98.1% portfolio occupancy, or 73 properties available for lease, as of September 30, 2013.

Since June 30, 2014, when we reported 74 properties available for lease, we had 81 lease expirations, re-leased 77 properties and sold four properties. Of the 77 properties re-leased during the third quarter of 2014, 71 properties were re-leased to either existing or new tenants without vacancy, and six were re-leased to a new tenant after a period of vacancy. The annual new rent of $16.3 million on these leases is equal to the previous rent on these same properties.

Rent Increases
During the quarter ended September 30, 2014, same store rents, on 2,756 properties under lease, increased 1.4% to $129.4 million, as compared to $127.6 million, for the same quarter in 2013. For the nine months ended September 30, 2014, same store rents, on 2,756 properties under lease, increased 1.5% to $388.0 million, as compared to $382.3 million, for the same period in 2013.

Property Acquisitions
During the third quarter of 2014, Realty Income invested $182.1 million in 49 new properties and properties under development or expansion, located in 26 states. These properties are 100% leased with a weighted average lease term of approximately 11.2 years and an initial average lease yield of 7.4%. The tenants occupying the new properties operate in 15 industries, and the property types consist of 96.0% retail and 4.0% industrial and distribution, based on rental revenue. Approximately 53% of the revenue generated from acquisitions during the third quarter of 2014 is from investment grade tenants.

During the nine months ended September 30, 2014, Realty Income invested approximately $1.24 billion in 439 new properties and properties under development or expansion. The new properties are located in 42 states and are 100% leased with a weighted average lease term of approximately 12.6 years and an initial average lease yield of 7.1%. The tenants occupying the new properties operate in 27 industries, and the property types consist of 85.6% retail, 7.2% office, 5.8% industrial and distribution, and 1.4% manufacturing, based on rental revenue. Approximately 70% of the revenue generated from the year-to-date 2014 acquisitions is from investment grade tenants.

Realty Income maintains a $1.5 billion unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. As of September 30, 2014, approximately $1.46 billion was available on the credit facility to fund additional acquisitions.

Property Dispositions
During the quarter ended September 30, 2014, Realty Income sold 11 properties for $33.8 million, with a gain on sales of $11.0 million, as compared to 19 properties sold for $22.4 million, with a gain on sales of $6.2 million, during the same quarter in 2013.

During the nine months ended September 30, 2014, Realty Income sold 28 properties for $53.6 million, with a gain on sales of $16.8 million, as compared to 53 properties sold for $106.1 million, with a gain on sales of $50.5 million, during the same period in 2013.

Other Activities

Redeemed All Outstanding Shares of 6.75% Monthly Income Class E Preferred Stock
In October, Realty Income redeemed all 8,800,000 outstanding shares of the company's 6.75% Monthly Income Class E Preferred Stock. The shares were redeemed at $25 per share (par), plus accrued and unpaid dividends to the redemption date of October 24, 2014. The issuance of the redemption notice for the Class E Preferred Stock prior to the end of the quarter required us to reclassify $220.0 million of preferred stock from stockholders' equity to liabilities on our consolidated balance sheet at September 30, 2014.

Issued $250 Million of 4.125% 12-yr Senior Unsecured Notes
In September 2014, Realty Income issued $250 million of 4.125% senior unsecured notes due 2026. The public offering price for the notes was 99.499% of the principal amount for an effective yield to maturity of 4.178%. The net proceeds of approximately $246.3 million from the offering were used to repay the borrowings outstanding under the company's acquisition credit facility. In October 2014, we utilized our acquisition credit facility to redeem our 6.75% Monthly Income Class E Preferred Stock.

Direct Stock Purchase and Dividend Reinvestment Plan
During the third quarter of 2014, Realty Income issued 50,567 common shares via its Plan, generating gross proceeds of approximately $2.2 million. During the first nine months of 2014, Realty Income issued 1,290,872 common shares via its Plan, generating gross proceeds of approximately $56.6 million.

FFO and AFFO Commentary CEO Comments on Operating Results
Commenting on Realty Income's results and real estate operations, Chief Executive Officer, John P. Case, said, "We achieved solid performance in the third quarter with AFFO per share increasing by nearly 7% to $0.64. Our portfolio is performing well as we continue to execute our disciplined investment strategy. Additionally, we celebrated our 20th anniversary as a listed company on the New York Stock Exchange. During the 20 years since our listing, we have increased the dividend every year, achieving a compounded average annual dividend growth rate of 4.6%."

"The third quarter was our most active quarter this year from a portfolio management standpoint. We re-leased 77 out of 81 properties with expiring leases, recapturing 100% of expiring rents while maintaining portfolio occupancy at 98.3%. Our same store rent year-to-date increased by 1.5% as compared to the same period last year. During the quarter, we also accelerated our dispositions activity with the sale of 11 assets for $33.8 million. We now expect to sell approximately $100 million of properties for the year."

"During the quarter, we completed $182.1 million in acquisitions at an initial average lease yield of 7.4%. We sourced over $7 billion in acquisitions opportunities during the quarter and more than $20 billion for the year, so we continue to see plenty of investment options. We remain selective as, year-to-date, we have completed $1.24 billion in acquisitions. We expect approximately $1.4 billion in acquisitions for 2014 which would make this our second most acquisitive year in the company's history. We continue to finance our acquisitions activities conservatively, with our balance sheet being two-thirds equity and one-third predominately long-term, fixed rate debt."

"Additionally, we are initiating 2015 AFFO per share guidance of $2.66 - $2.71 which reflects earnings growth of approximately 4% - 6% over the midpoint of our estimated 2014 guidance."

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, lease rollovers, the general real estate market, and the economy.

2014 Earnings Estimates
FFO per share for 2014 should range from $2.57 to $2.60, an increase of 6.6% to 7.9% over 2013 FFO (normalized to exclude 2013 ARCT merger-related costs) per share of $2.41. FFO per share for 2014 is based on a net income per share range of $0.90 to $0.93, plus estimated real estate depreciation of $1.75 per share, and reduced by potential estimated gains on sales of investment properties of $0.08 per share (in accordance with NAREIT's definition of FFO).  We reduced our FFO per share guidance for 2014 primarily as a result of the $6.0 million non-cash redemption charge on our Class E preferred shares that were redeemed in October 2014.

AFFO per share for 2014 should range from $2.55 to $2.57, an increase of 5.8% to 6.6% over the 2013 AFFO per share of $2.41. AFFO further adjusts FFO for unique revenue and expense items, which are not as pertinent to the measurement of the company's ongoing operating performance.

2015 Earnings Estimates
FFO per share for 2015 should range from $2.67 to $2.72, an increase of 3% to 5% over the midpoint of the 2014 estimated FFO per share projection. FFO per share for 2015 is based on a net income per share range of $0.94 to $0.99, plus estimated real estate depreciation of $1.79 per share, and reduced by potential estimated gains on sales of investment properties of $0.06 per share (in accordance with NAREIT's definition of FFO). 

AFFO per share for 2015 should range from $2.66 to $2.71, an increase of 4% to 6% over the midpoint of the 2014 estimated AFFO per share projection. AFFO further adjusts FFO for unique revenue and expense items, which are not as pertinent to the measurement of the company's ongoing operating performance.

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 September 30, 2014, the company had paid 530 consecutive monthly dividends throughout its 45-year operating history. The monthly income is supported by the cash flows from over 4,200 properties owned under long-term lease agreements with 231 leading regional and national commercial tenants. 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, 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.

CONSOLIDATED STATEMENTS OF INCOME

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

                                       
   

Three Months

     

Three Months

     

Nine Months

     

Nine Months

 
   

Ended 9/30/14

     

Ended 9/30/13

     

Ended 9/30/14

     

Ended 9/30/13

 

REVENUE

                                     

Rental

 

$

226,832

     

$

195,332

     

$

662,822

     

$

543,219

 

Tenant reimbursements

   

8,275

       

5,107

       

20,872

       

15,619

 

Other

   

606

       

1,642

       

2,238

       

5,207

 
                                       

Total revenue

   

235,713

       

202,081

       

685,932

       

564,045

 
                                       

EXPENSES

                                     

Depreciation and amortization

   

95,260

       

80,822

       

278,124

       

221,476

 

Interest

   

52,814

       

49,836

       

157,246

       

130,667

 

General and administrative

   

11,025

       

16,640

       

35,499

       

40,356

 

Property (including reimbursable)

   

12,770

       

8,466

       

33,474

       

25,792

 

Income taxes

   

697

       

569

       

2,358

       

1,770

 

Provisions for impairment

   

495

       

-

       

2,676

       

290

 

Merger-related costs

   

-

       

240

       

-

       

12,875

 
                                       

Total expenses

   

173,061

       

156,573

       

509,377

       

433,226

 
                                       

Gain on sales of real estate

   

10,975

       

-

       

14,211

       

-

 

Income from continuing operations

73,627

       

45,508

       

190,766

       

130,819

 

Income from discontinued operations

 

-

       

6,399

       

3,097

       

50,831

 
                                       

Net income

   

73,627

       

51,907

       

193,863

       

181,650

 

Net income attributable to noncontrolling interests

 

(344)

       

(336)

       

(1,016)

       

(422)

 
                                       

Net income attributable to the Company

73,283

       

51,571

       

192,847

       

181,228

 

Preferred stock dividends

   

(9,327)

       

(10,482)

       

(30,292)

       

(31,447)

 

Excess of redemption value over carrying value of preferred

                               

shares subject to redemption

   

(6,015)

       

-

       

(6,015)

       

-

 
                                       

Net income available to common stockholders

$

57,941

     

$

41,089

     

$

156,540

     

$

149,781

 
                                       

Funds from operations available to

                                 

common stockholders (FFO)

 

$

142,259

     

$

116,146

     

$

419,170

     

$

337,400

 

Adjusted funds from operations available to

                               

common stockholders (AFFO)

 

$

142,429

     

$

117,919

     

$

416,255

     

$

337,439

 
                                       

Per share information for common stockholders:

                                   

Income from continuing operations,

                               

basic and diluted

 

$

0.26

     

$

0.18

     

$

0.71

     

$

0.53

 
                                       

Net income, basic and diluted

 

$

0.26

     

$

0.21

     

$

0.72

     

$

0.80

 
                                       

FFO:

                                     

Basic

 

$

0.64

     

$

0.59

     

$

1.93

     

$

1.80

 

Diluted

 

$

0.64

     

$

0.59

     

$

1.93

     

$

1.79

 
                                       

AFFO:

                                     

Basic

 

$

0.64

     

$

0.60

     

$

1.92

     

$

1.80

 

Diluted

 

$

0.64

     

$

0.60

     

$

1.92

     

$

1.79

 
                                       

Cash dividends paid per common share

$

0.548

     

$

0.545

     

$

1.642

     

$

1.602

 
 
 

FUNDS FROM OPERATIONS (FFO)

(dollars in thousands, except per share amounts)

                                   
     

Three Months

   

Three Months

   

Nine Months

   

Nine Months

 
     

Ended 9/30/14

   

Ended 9/30/13

   

Ended 9/30/14

   

Ended 9/30/13

 
                                   

Net income available to common stockholders

 

$

57,941

   

$

41,089

   

$

156,540

   

$

149,781

 

Depreciation and amortization:

                               
 

Continuing operations

   

95,260

     

80,822

     

278,124

     

221,476

 
 

Discontinued operations

   

-

     

443

     

-

     

1,590

 

Depreciation of furniture, fixtures and equipment

   

(125)

     

(76)

     

(320)

   

(203)

 

Provisions for impairment on investment properties:

                               
 

Continuing operations

   

495

     

-

     

2,676

     

290

 
 

Discontinued operations

   

-

     

76

     

-

     

2,738

 

Gain on sale of investment properties:

                               
 

Continuing operations

   

(10,975)

     

-

     

(14,211)

   

-

 
 

Discontinued operations

   

-

     

(6,163)

     

(2,607)

   

(50,467)

 

Merger-related costs (1)

   

-

     

240

     

-

     

12,875

 

FFO adjustments allocable to noncontrolling interests

   

(337)

     

(285)

     

(1,032)

   

(680)

 
                                   

FFO available to common stockholders

 

$

142,259

   

$

116,146

   

$

419,170

   

$

337,400

 
                                   

FFO per common share:

                               
 

Basic

 

$

0.64

   

$

0.59

   

$

1.93

   

$

1.80

 
 

Diluted

 

$

0.64

   

$

0.59

   

$

1.93

   

$

1.79

 

Distributions paid to common stockholders

 

$

122,092

   

$

106,875

   

$

356,735

   

$

298,544

 

FFO in excess of distributions paid to

                               

common stockholders

 

$

20,167

   

$

9,271

   

$

62,435

   

$

38,856

 
                                   

Weighted average number of common shares used for FFO:

                         
 

Basic

 

222,061,661

   

195,768,298

   

216,804,815

   

187,805,222

 
 

Diluted

 

222,236,071

   

196,619,866

   

216,830,013

   

188,399,848

 
                                   

(1)

FFO for the three and nine months ended September 30, 2013, has been normalized to exclude ARCT merger-related costs.

 
 

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.

 
 
 
 

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

(dollars in thousands, except per share amounts)

                                   

We define AFFO as FFO adjusted for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company's ongoing operating performance.  Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution).

                                   
     

Three Months

   

Three Months

   

Nine Months

   

Nine Months

 
     

Ended 9/30/14

   

Ended 9/30/13

   

Ended 9/30/14

   

Ended 9/30/13

 
                                   

Net income available to common stockholders

 

$

57,941

   

$

41,089

   

$

156,540

   

$

149,781

 

Cumulative adjustments to calculate FFO (1)

   

84,318

     

75,057

     

262,630

     

187,619

 

FFO available to common stockholders

   

142,259

     

116,146

     

419,170

     

337,400

 

Excess of redemption value over carrying value

                               

of Class E preferred share redemption

   

6,015

     

-

     

6,015

     

-

 

Amortization of share-based compensation

   

2,204

     

6,737

     

7,653

     

14,235

 

Amortization of deferred financing costs (2)

   

1,235

     

1,196

     

3,476

     

3,217

 

Amortization of net mortgage premiums

   

(2,285)

     

(2,518)

     

(7,060)

   

(6,959)

 

(Gain) loss on early extinguishment of mortgage debt

   

(2,909)

     

-

     

(3,528)

   

-

 

(Gain) loss on interest rate swaps

   

(633)

     

596

     

409

     

(690)

 

Capitalized leasing costs and commissions

   

(188)

     

(369)

     

(655)

   

(1,143)

 

Capitalized building improvements

   

(1,616)

     

(2,239)

     

(3,883)

   

(4,759)

 

Straight-line rent

   

(3,851)

     

(3,656)

     

(11,764)

   

(10,111)

 

Amortization of above and below-market leases

   

2,166

     

2,026

     

6,374

     

6,249

 

AFFO adjustments allocable to noncontrolling interests

   

32

     

-

     

48

     

-

 

AFFO available to common stockholders

 

$

142,429

   

$

117,919

   

$

416,255

   

$

337,439

 
                                   

AFFO per common share:

                               
 

Basic

 

$

0.64

   

$

0.60

   

$

1.92

   

$

1.80

 
 

Diluted

 

$

0.64

   

$

0.60

   

$

1.92

   

$

1.79

 

Distributions paid to common stockholders

 

$

122,092

   

$

106,875

   

$

356,735

   

$

298,544

 

AFFO in excess of distributions paid to

                               

common stockholders

 

$

20,337

   

$

11,044

   

$

59,520

   

$

38,895

 
                                   

Weighted average number of common shares used for AFFO:

                         
 

Basic

 

222,061,661

   

195,768,298

   

216,804,815

   

187,805,222

 
 

Diluted

 

222,236,071

   

196,619,866

   

216,830,013

   

188,399,848

 
                                   

(1)

See 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, October 2012, July 2013, June 2014 and September 2014. Additionally, this includes the amortization of deferred financing costs incurred and capitalized in connection with our assumption of our 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.

 

HISTORICAL FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

                               

For the three months ended September 30,

2014

   

2013

   

2012

   

2011

   

2010

 
                               

Net income available to common stockholders

$

57,941

 

$

41,089

 

$

26,976

 

$

34,717

 

$

25,591

 

Depreciation and amortization

 

95,135

   

81,189

   

37,822

   

31,837

   

24,132

 

Provisions for impairment on investment properties

495

   

76

   

667

   

169

   

84

 

Gain on sales of investment properties

(10,975)

   

(6,163)

   

(2,045)

   

(3,149)

   

(1,919)

 

Merger-related costs

 

-

   

240

   

5,495

   

-

   

-

 

FFO adjustments allocable to noncontrolling interests

 

(337)

   

(285)

   

-

   

-

   

-

 
                               

FFO

$

142,259

 

$

116,146

 

$

68,915

 

$

63,574

 

$

47,888

 
                               

FFO per diluted share

$

0.64

 

$

0.59

 

$

0.52

 

$

0.50

 

$

0.46

 
                               

AFFO

$

142,429

 

$

117,919

 

$

68,496

 

$

64,239

 

$

48,585

 
                               

AFFO per diluted share

$

0.64

 

$

0.60

 

$

0.52

 

$

0.51

 

$

0.47

 
                               

Cash dividends paid per share

$

0.548

 

$

0.545

 

$

0.443

 

$

0.435

 

$

0.431

 

Weighted average diluted shares outstanding

222,236,071

 

196,619,866

 

132,931,813

 

126,582,609

 

103,977,023

 
                               

For the nine months ended September 30,

2014

   

2013

   

2012

   

2011

   

2010

 
                               

Net income available to common stockholders

$

156,540

 

$

149,781

 

$

85,998

 

$

97,837

 

$

74,717

 

Depreciation and amortization

 

277,804

   

222,863

   

108,628

   

87,628

   

70,814

 

Provisions for impairment on investment properties

2,676

   

3,028

   

667

   

378

   

171

 

Gain on sales of investment properties

(16,818)

   

(50,467)

   

(6,010)

   

(4,529)

   

(4,284)

 

Merger-related costs

 

-

   

12,875

   

5,495

   

-

   

-

 

FFO adjustments allocable to noncontrolling interests

 

(1,032)

   

(680)

   

-

   

-

   

-

 
                               

FFO

$

419,170

 

$

337,400

 

$

194,778

 

$

181,314

 

$

141,418

 
                               

FFO per diluted share

$

1.93

 

$

1.79

 

$

1.47

 

$

1.46

 

$

1.36

 
                               

AFFO

$

416,255

 

$

337,439

 

$

201,290

 

$

184,847

 

$

143,930

 
                               

AFFO per diluted share

$

1.92

 

$

1.79

 

$

1.52

 

$

1.49

 

$

1.39

 
                               

Cash dividends paid per share

$

1.642

 

$

1.602

 

$

1.317

 

$

1.301

 

$

1.290

 

Weighted average diluted shares outstanding

216,830,013

 

188,399,848

 

132,845,970

 

124,013,142

 

103,887,679

 
 
 

REALTY INCOME CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30, 2014 and December 31, 2013

(dollars in thousands, except per share data)

             
   

2014

   

2013

 

ASSETS

 

(unaudited)

       

Real estate, at cost:

           

Land

$

3,008,036

 

$

2,791,147

 

Buildings and improvements

 

7,995,808

   

7,108,328

 

Total real estate, at cost

 

11,003,844

   

9,899,475

 

Less accumulated depreciation and amortization

 

(1,317,760)

   

(1,114,888)

 

Net real estate held for investment

 

9,686,084

   

8,784,587

 

Real estate held for sale, net

 

15,757

   

12,022

 

Net real estate

 

9,701,841

   

8,796,609

 

Cash and cash equivalents

 

16,936

   

10,257

 

Accounts receivable, net

 

47,852

   

39,323

 

Acquired lease intangible assets, net

 

1,059,879

   

935,459

 

Goodwill

 

15,535

   

15,660

 

Other assets, net

 

97,797

   

127,133

 

Total assets

$

10,939,840

 

$

9,924,441

 
             

LIABILITIES AND EQUITY

           

Distributions payable

$

43,289

 

$

41,452

 

Accounts payable and accrued expenses

 

78,271

   

102,511

 

Acquired lease intangible liabilities, net

 

201,245

   

148,250

 

Other liabilities

 

44,410

   

44,030

 

Preferred shares subject to mandatory redemption

 

220,000

   

-

 

Line of credit payable

 

45,000

   

128,000

 

Term loan

 

70,000

   

70,000

 

Mortgages payable, net

 

862,212

   

783,360

 

Notes payable, net

 

3,785,027

   

3,185,480

 

Total liabilities

 

5,349,454

   

4,503,083

 
             

Commitments and contingencies

           
             

Stockholders' equity:

           

Preferred stock and paid in capital, par value $0.01 per share,

           

69,900,000 shares authorized, 16,350,000 shares issued and

           

outstanding as of September 30, 2014 and 25,150,000 shares issued

           

and outstanding as of December 31, 2013

 

395,377

   

609,363

 

Common stock and paid in capital, par value $0.01 per share,

           

370,100,000 shares authorized, 222,670,846 shares issued and

           

outstanding as of September 30, 2014 and 207,485,073 shares issued

           

and outstanding at December 31, 2013

 

6,361,400

   

5,767,878

 

Distributions in excess of net income

 

(1,194,987)

   

(991,794)

 

Total stockholders' equity

 

5,561,790

   

5,385,447

 

Noncontrolling interests

 

28,596

   

35,911

 

Total equity

 

5,590,386

   

5,421,358

 

Total liabilities and equity

$

10,939,840

 

$

9,924,441

 
             

 

 

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

%

Q3 YTD 2014

5.4

%

 

13.7

%

 

3.8

%

 

13.4

%

 

2.3

%

 

4.6

%

 

2.0

%

 

8.3

%

 

1.2

%

 

7.6

%

                                                             

Compounded Average

Annual Total Return (5)

16.4

%

       

10.9

%

       

10.1

%

       

9.5

%

       

9.3

%

                                                             

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.  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 September 30, 2014, 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.

 

 

 

Property Type Diversification

 

The following table sets forth certain property type information regarding Realty Income's property portfolio as of September 30, 2014 (dollars in thousands):  

                       
         

   Approximate

 

Rental Revenue for

   

Percentage of

 
     

Number of

 

      Leasable

 

the Quarter Ended

   

Rental

 

Property Type

 

Properties

 

   Square Feet

 

September 30, 2014(1)

 

Revenue

 

Retail

 

4,128

 

46,451,000

 

$

176,992

   

78.2

%

Industrial and distribution

 

81

 

15,869,200

   

23,248

   

10.3

 

Office

 

46

 

3,519,900

   

15,097

   

6.7

 

Manufacturing

 

14

 

3,875,200

   

5,616

   

2.5

 

Agriculture

 

15

 

184,500

   

5,267

   

2.3

 

Totals

 

4,284

 

69,899,800

 

$

226,220

   

100.0

%

                         

(1)

Includes rental revenue for all properties owned by Realty Income at September 30, 2014, including revenue from properties reclassified as discontinued operations of $13.  Excludes revenue of $44 from properties owned by Crest and $581 from sold properties that were included in continuing operations.

 

Tenant Diversification

The largest tenants based on percentage of total portfolio rental revenue at September 30, 2014 include the following:

                   

Tenant

   

Number of Properties

       

% of Revenue

                   

Walgreens

   

116

       

5.4

%

FedEx

   

38

       

5.1

%

Dollar General

   

502

       

4.9

%

LA Fitness

   

46

       

4.7

%

Family Dollar

   

453

       

4.5

%

BJ's Wholesale Clubs

   

15

       

2.9

%

AMC Theatres

   

20

       

2.8

%

Diageo

   

17

       

2.7

%

Regal Cinemas

   

23

       

2.3

%

Northern Tier Energy/Super America

   

134

       

2.2

%

CVS Pharmacy

   

56

       

2.1

%

Rite Aid

   

58

       

1.9

%

TBC Corporation

   

149

       

1.9

%

Circle K

   

168

       

1.8

%

The Pantry

   

145

       

1.7

%

Walmart/Sam's Club

   

19

       

1.4

%

GPM Investments/Fas Mart

   

140

       

1.4

%

NPC International

   

202

       

1.4

%

Smart & Final

   

36

       

1.2

%

FreedomRoads/Camping World

   

18

       

1.2

%

 

 

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

 

September 30,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

2014

 

2013

 

2012

 

2011

 

2010

 

2009

 

2008

Retail industries

                                           

Apparel stores

2.2

%

   

1.9

%

 

1.7

%

 

1.4

%

 

1.2

%

 

1.1

%

 

1.1

%

Automotive collision services

0.8

       

0.8

   

1.1

   

0.9

   

1.0

   

1.1

   

1.0

 

Automotive parts

1.3

       

1.2

   

1.0

   

1.2

   

1.4

   

1.5

   

1.6

 

Automotive service

1.8

       

2.1

   

3.1

   

3.7

   

4.7

   

4.8

   

4.8

 

Automotive tire services

3.1

       

3.6

   

4.7

   

5.6

   

6.4

   

6.9

   

6.7

 

Book stores

*

       

*

   

0.1

   

0.1

   

0.1

   

0.2

   

0.2

 

Child care

2.2

       

2.8

   

4.5

   

5.2

   

6.5

   

7.3

   

7.6

 

Consumer electronics

0.3

       

0.3

   

0.5

   

0.5

   

0.6

   

0.7

   

0.8

 

Convenience stores

10.0

       

11.2

   

16.3

   

18.5

   

17.1

   

16.9

   

15.8

 

Crafts and novelties

0.5

       

0.5

   

0.3

   

0.2

   

0.3

   

0.3

   

0.3

 

Dollar stores

9.6

       

6.2

   

2.2

   

-

   

-

   

-

   

-

 

Drug stores

9.4

       

8.1

   

3.5

   

3.8

   

4.1

   

4.3

   

4.1

 

Education

0.4

       

0.4

   

0.7

   

0.7

   

0.8

   

0.9

   

0.8

 

Entertainment

0.6

       

0.6

   

0.9

   

1.0

   

1.2

   

1.3

   

1.2

 

Equipment services

0.1

       

0.1

   

0.1

   

0.2

   

0.2

   

0.2

   

0.2

 

Financial services

1.4

       

1.5

   

0.2

   

0.2

   

0.2

   

0.2

   

0.2

 

General merchandise

1.2

       

1.1

   

0.6

   

0.6

   

0.8

   

0.8

   

0.8

 

Grocery stores

3.2

       

2.9

   

3.7

   

1.6

   

0.9

   

0.7

   

0.7

 

Health and fitness

7.0

       

6.3

   

6.8

   

6.4

   

6.9

   

5.9

   

5.6

 

Health care

1.1

       

1.1

   

-

   

-

   

-

   

-

   

-

 

Home furnishings

0.7

       

0.9

   

1.0

   

1.1

   

1.3

   

1.3

   

2.4

 

Home improvement

2.0

       

1.6

   

1.5

   

1.7

   

2.0

   

2.2

   

2.1

 

Jewelry

0.1

       

0.1

   

-

   

-

   

-

   

-

   

-

 

Motor vehicle dealerships

1.5

       

1.6

   

2.1

   

2.2

   

2.6

   

2.7

   

3.2

 

Office supplies

0.4

       

0.5

   

0.8

   

0.9

   

0.9

   

1.0

   

1.0

 

Pet supplies and services

0.7

       

0.8

   

0.6

   

0.7

   

0.9

   

0.9

   

0.8

 

Restaurants - casual dining

4.2

       

5.1

   

7.3

   

10.9

   

13.4

   

13.7

   

14.3

 

Restaurants - quick service

3.5

       

4.4

   

5.9

   

6.6

   

7.7

   

8.3

   

8.2

 

Shoe stores

0.1

       

0.1

   

0.1

   

0.2

   

0.1

   

-

   

-

 

Sporting goods

1.7

       

1.7

   

2.5

   

2.7

   

2.7

   

2.6

   

2.3

 

Theaters

5.2

       

6.2

   

9.4

   

8.8

   

8.9

   

9.2

   

9.0

 

Transportation services

0.1

       

0.1

   

0.2

   

0.2

   

0.2

   

0.2

   

0.2

 

Wholesale clubs

4.1

       

3.9

   

3.2

   

0.7

   

-

   

-

   

-

 

Other

*

       

0.1

   

0.1

   

0.1

   

0.3

   

1.1

   

1.2

 

Retail industries

80.5

%

   

79.8

%

 

86.7

%

 

88.6

%

 

95.4

%

 

98.3

%

 

98.2

%

 

 

 

Industry Diversification (continued)

   

Percentage of  Rental Revenue(1)

   

For the

                                   
   

Quarter Ended

 

For the Years Ended

   

September 30,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

 

Dec 31,

   

2014

 

2013

 

2012

 

2011

 

2010

 

2009

 

2008

 

Non-retail industries

                                           
 

Aerospace

1.2

       

1.2

   

0.9

   

0.5

   

-

   

-

   

-

 
 

Beverages

2.8

       

3.3

   

5.1

   

5.6

   

3.0

   

-

   

-

 
 

Consumer appliances

0.5

       

0.6

   

0.1

   

-

   

-

   

-

   

-

 
 

Consumer goods

0.9

       

1.0

   

0.1

   

-

   

-

   

-

   

-

 
 

Crafts and novelties

0.1

       

0.1

   

-

   

-

   

-

   

-

   

-

 
 

Diversified industrial

0.6

       

0.2

   

0.1

   

-

   

-

   

-

   

-

 
 

Electric utilities

0.1

       

*

   

-

   

-

   

-

   

-

   

-

 
 

Equipment services

0.5

       

0.4

   

0.3

   

0.2

   

-

   

-

   

-

 
 

Financial services

0.4

       

0.5

   

0.4

   

0.3

   

-

   

-

   

-

 
 

Food processing

1.3

       

1.5

   

1.3

   

0.7

   

-

   

-

   

-

 
 

General merchandise

0.3

       

-

   

-

   

-

   

-

   

-

   

-

 
 

Government services

1.2

       

1.4

   

0.1

   

0.1

   

0.1

   

0.1

   

-

 
 

Health care

0.7

       

0.8

   

*

   

*

   

-

   

-

   

-

 
 

Home furnishings

0.2

       

0.2

   

-

   

-

   

-

   

-

   

-

 
 

Home improvement

*

       

-

   

-

   

-

   

-

   

-

   

-

 
 

Insurance

0.1

       

0.1

   

*

   

-

   

-

   

-

   

-

 
 

Machinery

0.2

       

0.2

   

0.1

   

-

   

-

   

-

   

-

 
 

Other manufacturing

0.7

       

0.6

   

-

   

-

   

-

   

-

   

-

 
 

Packaging

0.8

       

0.9

   

0.7

   

0.4

   

-

   

-

   

-

 
 

Paper

0.2

       

0.2

   

0.1

   

0.1

   

-

   

-

   

-

 
 

Shoe stores

0.8

       

0.9

   

-

   

-

   

-

   

-

   

-

 
 

Telecommunications

0.7

       

0.7

   

0.8

   

0.7

   

-

   

-

   

-

 
 

Transportation services

5.0

       

5.3

   

2.2

   

1.6

   

-

   

-

   

-

 
 

Other

0.2

       

0.1

   

1.0

   

1.2

   

1.5

   

1.6

   

1.8

 
 

Non-retail industries

19.5

%

   

20.2

%

 

13.3

%

 

11.4

%

 

4.6

%

 

1.7

%

 

1.8

%

 

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 Net Lease, Inc., or Crest.

 

 

 

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 4,189 net leased, single-tenant properties as of September 30, 2014 (dollars in thousands):

 

Total Portfolio(1)

Initial Expirations(3)

Subsequent Expirations(4)

               

Rental

         

Rental

       

Rental

     
               

Revenue

         

Revenue

       

Revenue

     
               

for the

         

for the

       

for the

     
   

Number

   

Quarter

   

% of

   

Quarter

 

 % of

   

Quarter

 

 % of

 
   

of Leases

 

Approx.

Ended

   

Total

 

Number

Ended

 

Total

 

Number

Ended

 

Total

 
   

   Expiring

 

Leasable

Sep 30,

   

Rental

 

of Leases

Sep 30,

 

Rental

 

of Leases

Sep 30,

 

Rental

 

Year

 

Retail

 

Non-Retail

 

Sq. Feet

2014

(2) 

Revenue

 

Expiring

2014

 

Revenue

 

Expiring

2014

 

Revenue

 
                                                         

2014

 

34

 

-

 

274,100

 

$

840

   

0.4

%

8

 

$

298

 

0.1

%

26

 

$

542

 

0.3

%

2015

 

154

 

-

 

758,800

   

3,269

   

1.5

 

62

   

1,331

 

0.6

 

92

   

1,938

 

0.9

 

2016

 

201

 

1

 

1,223,700

   

4,618

   

2.1

 

121

   

2,830

 

1.3

 

81

   

1,788

 

0.8

 

2017

 

205

 

2

 

2,265,600

   

6,620

   

3.0

 

50

   

3,191

 

1.4

 

157

   

3,429

 

1.6

 

2018

 

282

 

10

 

4,011,100

   

11,552

   

5.2

 

169

   

8,219

 

3.7

 

123

   

3,333

 

1.5

 

2019

 

227

 

11

 

3,864,700

   

13,005

   

5.8

 

169

   

11,051

 

4.9

 

69

   

1,954

 

0.9

 

2020

 

114

 

12

 

3,750,200

   

10,092

   

4.5

 

105

   

9,255

 

4.1

 

21

   

837

 

0.4

 

2021

 

185

 

13

 

5,490,000

   

14,471

   

6.5

 

187

   

13,893

 

6.2

 

11

   

578

 

0.3

 

2022

 

223

 

18

 

7,419,200

   

14,953

   

6.7

 

221

   

14,416

 

6.5

 

20

   

537

 

0.2

 

2023

 

351

 

19

 

6,187,800

   

21,406

   

9.6

 

357

   

20,722

 

9.3

 

13

   

684

 

0.3

 

2024

 

164

 

10

 

2,944,200

   

9,106

   

4.1

 

169

   

8,938

 

4.0

 

5

   

168

 

0.1

 

2025

 

307

 

10

 

4,174,100

   

17,706

   

7.9

 

297

   

17,158

 

7.7

 

20

   

548

 

0.2

 

2026

 

233

 

4

 

3,207,600

   

12,279

   

5.5

 

233

   

12,153

 

5.4

 

4

   

126

 

0.1

 

2027

 

464

 

3

 

5,162,700

   

17,659

   

7.9

 

465

   

17,619

 

7.9

 

2

   

40

 

*

 

2028

 

283

 

5

 

6,018,600

   

15,936

   

7.1

 

286

   

15,881

 

7.1

 

2

   

55

 

*

 

2029 - 2043

 

609

 

35

 

11,399,800

   

49,593

   

22.2

 

636

   

49,387

 

22.1

 

8

   

206

 

0.1

 

Totals

 

4,036

 

153

 

68,152,200

 

$

223,105

   

100.0

%

3,535

 

$

206,342

 

92.3

%

654

 

$

16,763

 

7.7

%

                                                         

*

Less than 0.1%

                                                         

(1)

Excludes 21 multi-tenant properties and 74 vacant 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 $13 from properties reclassified as discontinued operations and excludes revenue of $3,115 from 21 multi-tenant properties and from 74 vacant properties at September 30, 2014, $581 from sold properties included in continuing operations and $44 from 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.

 

 

 

Geographic Diversification

 

The following table sets forth certain state-by-state information regarding Realty Income's property portfolio as of September 30, 2014 (dollars in thousands):

                     
         

Approximate

 

Rental Revenue for

 

Percentage of

 
   

Number of

Percent

 

Leasable

 

 the Quarter Ended

 

Rental

 

State

Properties

Leased

 

Square Feet

 

September 30, 2014

(1)

Revenue

 

Alabama            

128

98

%

1,039,500

 

$

3,416

 

1.5

%

Alaska             

3

100

 

275,900

   

457

 

0.2

 

Arizona            

113

96

 

1,546,400

   

6,000

 

2.6

 

Arkansas           

53

98

 

782,600

   

1,653

 

0.7

 

California         

167

99

 

5,332,400

   

23,873

 

10.6

 

Colorado           

72

99

 

1,045,400

   

3,737

 

1.7

 

Connecticut        

25

96

 

536,900

   

2,483

 

1.1

 

Delaware           

17

100

 

78,300

   

634

 

0.3

 

Florida            

322

99

 

3,379,000

   

13,545

 

6.0

 

Georgia            

237

97

 

3,363,900

   

9,768

 

4.3

 

Hawaii             

--

--

 

--

   

--

 

--

 

Idaho              

12

100

 

87,000

   

438

 

0.2

 

Illinois           

159

99

 

4,507,800

   

12,759

 

5.6

 

Indiana            

106

99

 

1,172,800

   

5,315

 

2.3

 

Iowa               

35

94

 

2,751,700

   

3,332

 

1.5

 

Kansas             

80

99

 

1,359,400

   

3,167

 

1.4

 

Kentucky           

56

96

 

902,200

   

3,160

 

1.4

 

Louisiana          

88

99

 

961,700

   

2,789

 

1.2

 

Maine

10

100

 

145,300

   

840

 

0.4

 

Maryland           

33

100

 

772,000

   

4,234

 

1.9

 

Massachusetts      

82

98

 

755,900

   

3,426

 

1.5

 

Michigan           

107

98

 

1,028,400

   

3,418

 

1.5

 

Minnesota          

155

100

 

1,153,200

   

7,354

 

3.2

 

Mississippi        

122

98

 

1,566,100

   

3,783

 

1.7

 

Missouri           

133

98

 

2,568,000

   

8,059

 

3.6

 

Montana            

1

100

 

5,400

   

13

 

*

 

Nebraska           

31

100

 

708,700

   

1,748

 

0.8

 

Nevada             

22

95

 

413,000

   

1,289

 

0.6

 

New Hampshire      

20

100

 

320,100

   

1,479

 

0.7

 

New Jersey         

67

99

 

577,300

   

3,486

 

1.5

 

New Mexico         

30

100

 

294,000

   

742

 

0.3

 

New York           

87

97

 

2,203,500

   

10,876

 

4.8

 

North Carolina     

148

99

 

1,504,600

   

5,718

 

2.5

 

North Dakota       

7

100

 

66,000

   

118

 

*

 

Ohio               

213

99

 

5,058,200

   

12,290

 

5.4

 

Oklahoma           

125

99

 

1,598,300

   

3,761

 

1.7

 

Oregon             

25

96

 

525,400

   

1,830

 

0.8

 

Pennsylvania       

146

99

 

1,785,500

   

7,186

 

3.2

 

Rhode Island       

4

100

 

157,200

   

808

 

0.4

 

South Carolina     

134

99

 

974,900

   

4,441

 

2.0

 

South Dakota       

11

100

 

133,500

   

244

 

0.1

 

Tennessee          

198

96

 

2,595,900

   

6,347

 

2.8

 

Texas              

441

98

 

8,149,400

   

21,855

 

9.7

 

Utah               

13

100

 

749,000

   

1,338

 

0.6

 

Vermont            

5

100

 

98,000

   

478

 

0.2

 

Virginia           

141

97

 

2,662,600

   

7,038

 

3.1

 

Washington         

38

97

 

415,300

   

1,571

 

0.7

 

West Virginia      

12

100

 

261,200

   

916

 

0.4

 

Wisconsin          

43

95

 

1,481,600

   

2,795

 

1.2

 

Wyoming            

3

100

 

21,100

   

64

 

*

 

Puerto Rico

4

100

 

28,300

   

149

 

0.1

 

Totals\Average

4,284

98

%

69,899,800

 

$

226,220

 

100.0

%

                       

*

Less than 0.1%

                   
                       

(1)

Includes rental revenue for all properties owned by Realty Income at September 30, 2014, including revenue from properties reclassified as discontinued operations of $13.  Excludes revenue of $44 from properties owned by Crest and $581 from sold properties that were included in continuing operations.

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SOURCE Realty Income Corporation

CONTACT: Jonathan Pong, CFA, CPA, Associate Vice President, Capital Markets & Investor Relations, (760) 741-2111 ext. 1177

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