SAN
DIEGO, Feb. 20, 2024 /PRNewswire/ -- Realty
Income Corporation (Realty Income, NYSE: O), The Monthly Dividend
Company®, today announced operating results for the
three months and year ended December 31,
2023. All per share amounts presented in this press release
are on a diluted per common share basis unless stated
otherwise.
"As we focus on 2024 and beyond, I am energized by the strong
position we have established through our continued emphasis on
thoughtful growth," said Sumit Roy,
Realty Income's President and Chief Executive Officer. "Subsequent
to year end, we closed on the previously announced merger with
Spirit, laying the foundation for 2024 AFFO per share growth
guidance of 3.3% to 5.3%. More importantly, our capital raising
activity in the fourth quarter and January further solidified our
strong balance sheet and we have over $600
million of unsettled forward equity outstanding as of today,
positioning us to achieve this guidance range with minimal reliance
on the capital markets in 2024."
COMPANY HIGHLIGHTS:
For the three months ended December 31, 2023:
- Net income available to common stockholders was $218.4 million, or $0.30 per share
- AFFO available to common stockholders was $731.0 million, or $1.01 per share
- Invested $2.7 billion at an
initial weighted average cash yield of 7.6%
- Entered the markets of France,
Germany, and Portugal for the first time through
sale-leaseback transactions with affiliates of Decathlon SE
("Decathlon"), a world leader in retail sporting goods and an
investment grade rated company, for €527.0 million, which includes
82 retail properties located in France, Germany, Italy, Portugal, and Spain
- Raised $1.6 billion from the sale
of common stock, primarily through our At-The-Market (ATM) program,
at a weighted average price of $56.25
- Net Debt to Annualized Pro Forma Adjusted EBITDAre was
5.5x
For the year ended December 31,
2023:
- Net income available to common stockholders was $872.3 million, or $1.26 per share
- AFFO available to common stockholders was $2.8 billion, or $4.00 per share
- Invested $9.5 billion at an
initial weighted average cash yield of 7.1%
- Raised $5.5 billion from the sale
of common stock, primarily through our ATM program, at a weighted
average price of $59.79
Events subsequent to December 31,
2023:
- On January 23, 2024, closed on
the previously announced merger with Spirit Realty Capital, Inc.
("Spirit") in an all-stock transaction
- In January 2024, issued
$450.0 million of 4.750% senior
unsecured notes due February 2029 and
$800.0 million of 5.125% senior
unsecured notes due February 2034,
for which proceeds were used to repay $1.1
billion of senior unsecured notes and mortgages upon
maturity
- ATM forward agreements for a total of 10.8 million shares
remain unsettled with total expected net proceeds of approximately
$605 million
"Our 2023 results demonstrate our expertise in selectively
deploying capital into high quality opportunities that support our
long-term earnings and dividend growth potential," continued Mr.
Roy. "In 2023, Realty Income completed a record year of investment
volume, with approximately $9.5 billion closed at a cash yield of 7.1%.
In the fourth quarter, we invested approximately $2.7 billion at a cash yield of 7.6% as we
continued our expansion into Europe, entering three new countries through a
large portfolio sale-leaseback transaction with leading global
sporting goods retailer Decathlon. In addition, we made our first
investment in the data center space through a JV partnership with
Digital Realty to develop two build-to-suit hyperscale facilities
pre-leased to a S&P 100, investment grade rated client."
"Our diversified portfolio, comprised of real estate leased to
leading global operators, remains strong. At the end of 2023,
portfolio occupancy was 98.6%. The consistency of our business
model continues to manifest in our long track record of delivering
dependable monthly dividends that increase over time. In December,
we announced our 105th consecutive quarterly dividend
increase and I am confident our thoughtful growth initiatives will
continue to deliver favorable risk-adjusted returns."
Select Financial Results
The following summarizes our select financial results (dollars
in millions, except per share data).
|
|
Three months ended
December 31,
|
|
Years ended December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total
revenue
|
|
$
1,076.3
|
|
$
888.7
|
|
$
4,079.0
|
|
$
3,343.7
|
Net income available to
common stockholders (1)
|
|
$
218.4
|
|
$
227.3
|
|
$
872.3
|
|
$
869.4
|
Net income per
share
|
|
$
0.30
|
|
$
0.36
|
|
$
1.26
|
|
$
1.42
|
Funds from operations
available to common
stockholders (FFO) (2)
|
|
$
713.7
|
|
$
664.5
|
|
$
2,822.1
|
|
$
2,471.9
|
FFO per
share
|
|
$
0.98
|
|
$
1.05
|
|
$
4.07
|
|
$
4.04
|
Normalized funds from
operations available to
common stockholders (Normalized FFO)
(2)
|
|
$
723.6
|
|
$
665.4
|
|
$
2,836.6
|
|
$
2,485.8
|
Normalized FFO per
share
|
|
$
1.00
|
|
$
1.05
|
|
$
4.09
|
|
$
4.06
|
Adjusted funds from
operations available to common
stockholders (AFFO) (2)
|
|
$
731.0
|
|
$
634.0
|
|
$
2,774.9
|
|
$
2,401.4
|
AFFO per
share
|
|
$
1.01
|
|
$
1.00
|
|
$
4.00
|
|
$
3.92
|
(1)
|
The calculation to
determine net income attributable to common stockholders includes
provisions for impairment, gain on sales of real estate, and
foreign currency gain and loss. These items can vary from quarter
to quarter and can significantly impact net income available to
common stockholders and period to period comparisons.
|
(2)
|
FFO, Normalized FFO,
and AFFO are non-GAAP financial measures. Normalized FFO is based
on FFO and adjusted to exclude merger and integration-related costs
and AFFO further adjusts Normalized FFO for unique revenue and
expense items. Please see the Glossary for our definitions and
explanations of how we utilize these metrics. Please see pages 10
and 11 herein for reconciliations to the most directly comparable
GAAP measure.
|
Dividend Increases
In December 2023, we announced the
105th consecutive quarterly dividend increase, which is
the 123rd increase in the amount of the dividend since
our listing on the New York Stock Exchange (NYSE) in 1994. The
annualized dividend amount as of December
31, 2023 was $3.078 per share.
The amount of monthly dividends paid per share increased 2.8%
to $3.051 in 2023, as compared
to $2.967 in 2022, representing 76.3%
of our diluted AFFO per share of $4.00 during the year ended December 31, 2023.
Real Estate Portfolio Update
As of December 31, 2023, we owned
or held interests in 13,458 properties, which were leased to 1,326
clients doing business in 86 industries. Our diversified portfolio
of commercial properties under long-term, net lease agreements is
actively managed with a weighted average remaining lease term of
approximately 9.8 years. Our portfolio of commercial real estate
has historically provided dependable rental revenue supporting the
payment of monthly dividends. As of December
31, 2023, portfolio occupancy was 98.6% with 193
properties available for lease or sale, as compared to 98.8% as of
September 30, 2023 and 99.0% as of
December 31, 2022. Our property-level
occupancy rates exclude properties with ancillary leases only, such
as cell towers and billboards, and properties with possession
pending and include properties owned by unconsolidated joint
ventures. Below is a summary of our portfolio activity for the
period indicated below:
Changes in Occupancy
Three months ended
December 31, 2023
|
|
|
|
|
|
Properties available
for lease at September 30, 2023
|
|
|
|
|
159
|
Lease expirations
(1)
|
|
|
|
|
266
|
Re-leases to same
client
|
|
|
|
|
(164)
|
Re-leases to new
client
|
|
|
|
|
(26)
|
Vacant
dispositions
|
|
|
|
|
(42)
|
Properties available
for lease at December 31, 2023
|
|
|
|
|
193
|
|
|
|
|
|
|
Year ended December
31, 2023
|
|
|
|
|
|
Properties available
for lease at December 31, 2022
|
|
|
|
|
126
|
Lease expirations
(1)
|
|
|
|
|
984
|
Re-leases to same
client
|
|
|
|
|
(750)
|
Re-leases to new
client
|
|
|
|
|
(51)
|
Vacant
dispositions
|
|
|
|
|
(116)
|
Properties available
for lease at December 31, 2023
|
|
|
|
|
193
|
(1)
|
Includes scheduled and
unscheduled expirations (including leases rejected in bankruptcy),
as well as future expirations resolved in the periods indicated
above.
|
During the three months ended December
31, 2023, the new annualized contractual rent on re-leases
was $52.7 million, as compared to the
previous annual rent of $50.8 million
on the same units, representing a rent recapture rate of 103.6% on
the units re-leased, which excludes restructurings associated with
the Cineworld bankruptcy. Including Cineworld restructured leases
that resulted in lease extensions, the recapture rate was 94.1% for
the three months ended December 31,
2023. We re-leased 20 units to new clients without a period
of vacancy, and 12 units to new clients after a period of vacancy.
Please see the Glossary for our definition of annualized
contractual income.
During the year ended December 31,
2023, the new annualized contractual rent on re-leases was
$198.1 million, as compared to the
previous annual rent of $190.3
million on the same units, representing a rent recapture
rate of 104.1% on the units re-leased, which excludes
restructurings associated with the Cineworld bankruptcy. Including
Cineworld restructured leases that resulted in lease extensions,
the recapture rate was 101.1% for the year ended December 31, 2023. We re-leased 27 units to new
clients without a period of vacancy, and 39 units to new clients
after a period of vacancy.
Investment Summary
The following table summarizes our acquisitions in the U.S. and
Europe for the periods indicated
below:
|
Number
of
Properties
|
|
Investment
($ in
millions)
|
|
Leasable
Square
Feet
(in
thousands)
|
|
Initial
Weighted
Average
Cash
Yield
(1)
|
|
Weighted
Average
Term
(Years)
|
Three months ended
December 31, 2023
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
real estate (2)
|
37
|
|
$
394.7
|
|
2,256
|
|
7.0 %
|
|
23.7
|
Acquisitions -
Europe real estate
|
97
|
|
888.8
|
|
6,129
|
|
7.2 %
|
|
9.2
|
Total real estate
acquisitions
|
134
|
|
$
1,283.5
|
|
8,385
|
|
7.1 %
|
|
13.6
|
Real estate properties
under development (2) (3)
|
194
|
|
586.9
|
|
5,602
|
|
6.9 %
|
|
14.2
|
Other investments
(4)
|
—
|
|
858.1
|
|
—
|
|
8.7 %
|
|
20.3
|
Total investments
(5)
|
328
|
|
$
2,728.5
|
|
13,987
|
|
7.6 %
|
|
16.2
|
|
|
|
|
|
|
|
|
|
|
Year ended December
31, 2023
|
|
|
|
|
|
|
|
|
|
Acquisitions - U.S.
real estate (2)
|
839
|
|
$
4,103.6
|
|
16,986
|
|
6.9 %
|
|
16.7
|
Acquisitions -
Europe real estate
|
177
|
|
3,080.4
|
|
14,737
|
|
7.1 %
|
|
13.7
|
Total real estate
acquisitions
|
1,016
|
|
$
7,184.0
|
|
31,723
|
|
7.0 %
|
|
15.4
|
Real estate properties
under development (2) (3)
|
392
|
|
1,496.9
|
|
8,460
|
|
6.8 %
|
|
15.4
|
Other investments
(4)
|
—
|
|
858.1
|
|
—
|
|
8.7 %
|
|
20.3
|
Total investments
(6)
|
1,408
|
|
$
9,539.0
|
|
40,183
|
|
7.1 %
|
|
15.9
|
(1)
|
Initial weighted
average cash yield is a supplemental operating measure. Cash income
used in the calculation of initial weighted average cash yield for
investments for the three months and year ended December 31, 2023
includes $0.7 million and $4.4 million, respectively, received
as settlement credits as reimbursement of free rent periods. Please
see the Glossary for our definitions of Initial Weighted Average
Cash Yield and Cash Income.
|
(2)
|
Includes our
proportionate share of unconsolidated joint ventures.
|
(3)
|
The three months and
year ended December 31, 2023 includes £1.7 million and £34.3
million of investments, respectively, relating to U.K. development
properties, respectively, and €3.4 million and €29.3 million of
investments, respectively, relating to Spain development
properties, converted at the applicable exchange rates on the
funding dates.
|
(4)
|
Other investments
include investments in loans and our preferred equity investments.
The preferred equity investment is callable and the weighted
average term is assumed to be consistent with the lease term of the
associated collateral.
|
(5)
|
Clients we have
invested in are 54.6% retail, 35.6% gaming, 2.2% industrial, and
7.6% other based on cash income. Approximately 36% of the cash
income generated from acquisitions during the three months ended
December 31, 2023 is from investment grade rated clients, their
subsidiaries or affiliated companies. Please see the Glossary for
our definition of Investment Grade Clients and Cash
Income.
|
(6)
|
Clients we have
invested in are 79.0% retail, 10.9% gaming, 7.6% industrial, and
2.5% other based on cash income. Approximately 28% of the cash
income generated from acquisitions during the year ended December
31, 2023 is from investment grade rated clients, their subsidiaries
or affiliated companies.
|
Same Store Rental Revenue
The following summarizes our same store rental revenue for
10,498 properties under lease (dollars in millions):
|
Three months ended
December 31,
|
|
Years ended December
31,
|
|
%
Increase
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Three
Months
|
|
Year
|
Same store rental
revenue
|
$
713.5
|
|
$
695.4
|
|
$
2,851.7
|
|
$
2,799.5
|
|
2.6 %
|
|
1.9 %
|
For purposes of comparability, same store rental revenue is
presented on a constant currency basis using the applicable
exchange rate as of December 31,
2023. None of the properties in France, Germany, Ireland, Italy, or Portugal met our same store pool definition
for the periods presented. Please see the Glossary to see
definitions of our Same Store Pool and Same Store Rental
Revenue.
Liquidity and Capital Markets
Capital Raising
During the three months ended December
31, 2023, we raised $1.6
billion of proceeds from the sale of common stock at a
weighted average price of $56.25 per
share, primarily through the sale of approximately 28.5 million
shares of common stock pursuant to forward sale agreements through
our ATM program. As of December 31,
2023, there were approximately 6.2 million shares of
unsettled common stock subject to forward sale agreements through
our ATM program, representing approximately $337.8 million in expected net proceeds and a
weighted average initial gross price of $55.03 per share. ATM net sale proceed amounts
assume full physical settlement of all outstanding shares of common
stock, subject to such forward sale agreements and certain
assumptions made with respect to settlement dates. As of
February 20, 2024, ATM forward
agreements for a total of 10.8 million shares remain unsettled with
total expected net proceeds of approximately $605.0 million of which 4.6 million shares were
executed in January 2024.
In December 2023, we issued £300.0
million of 5.750% senior unsecured notes due December 2031 (the "2031 Notes"), and £450.0
million of 6.000% senior unsecured notes due December 2039 (the "2039 Notes"). The public
offering price for the 2031 Notes was 99.298% of the principal
amount for an effective annual yield to maturity of 5.862%, and the
public offering price for the 2039 Notes was 99.250% of the
principal amount for an effective annual yield to maturity of
6.075%. Combined, the Notes have a weighted average tenor of
approximately 12.8 years and a weighted average annual yield to
maturity of 5.990%.
In January 2024, we issued
$450.0 million of 4.750% senior
unsecured notes due February 2029
(the "2029 Notes"), and $800.0 million of 5.125% senior unsecured
notes due February 2034 (the "2034
Notes"). The public offering price for the 2029 Notes was 99.225%
of the principal amount for an effective annual yield to maturity
of 4.923%, and the public offering price for the 2034 Notes was
98.910% of the principal amount for an effective annual yield to
maturity of 5.265%. Combined, the Notes have a weighted average
tenor of approximately 8.3 years, a weighted average semi-annual
yield to maturity of 5.142%, and weighted average coupon rate of
4.990%.
Completion of Exchange Offers
In connection with our merger with Spirit on January 23, 2024, we completed the $2.7 billion exchange in principal of U.S. dollar
denominated outstanding notes issued by Spirit Realty, L.P.
("Spirit OP") for new notes issued by Realty Income and entered
into two new term loan agreements totaling $1.3 billion, which provides for the assumption
of Spirit OP's existing term loan agreements.
Liquidity
As of December 31, 2023, we had
$4.1 billion of liquidity, which
consists of cash and cash equivalents of $232.9 million, unsettled ATM forward equity of
$337.8 million, and $3.5 billion of availability under our
$4.25 billion unsecured revolving
credit facility after deducting $764.4
million in borrowings under our commercial paper programs.
There was no balance on our revolving credit facility as of
December 31, 2023. We use our
unsecured revolving credit facility as a liquidity backstop for the
repayment of the notes issued under these programs.
Earnings Guidance
Summarized below are approximate estimates of the key components
of our 2024 earnings guidance, which gives effect to the merger
between us and Spirit, which closed on January 23, 2024:
|
|
2024
Guidance
|
Net income per share
(1)
|
|
$1.22 -
$1.34
|
Real estate
depreciation and impairments per share (1)
|
|
$2.82
|
Other adjustments per
share (2)
|
|
$0.13
|
Normalized FFO per
share (1)(3)
|
|
$4.17 -
$4.29
|
AFFO per share
(3)
|
|
$4.13 -
$4.21
|
Same store rent growth
(4)
|
|
Approx 1.0%
|
Occupancy
|
|
Over 98%
|
Cash G&A expenses
(% of revenues) (5)(6)
|
|
Approx 3.0%
|
Property expenses
(non-reimbursable) (% of revenues) (5)
|
|
1.0% - 1.5%
|
Income tax
expenses
|
|
$65 to $75
million
|
Acquisition volume
(7)
|
|
Approx $2.0
billion
|
|
|
|
(1) Subject
to change upon finalization of Spirit purchase price accounting.
Net income per share and Normalized FFO per share include -$0.06
per share non-cash interest expense impact related to Spirit
merger.
|
(2)
Includes gain on sales of properties and merger and
integration-related costs.
|
(3)
Normalized FFO per share and AFFO per share exclude merger and
integration-related costs associated with our merger with Spirit.
Per share amounts may not add due to rounding.
|
(4) Reserve
reversals recognized in 2023 represent an approximately 30 basis
point headwind to same store rent growth in 2024. Guidance excludes
unidentified reserves for bad debt in excess of normalized run
rate.
|
(5) Revenue
excludes contractually obligated reimbursements by our clients.
Cash G&A expenses exclude stock-based compensation
expense.
|
(6) G&A
expenses inclusive of stock-based compensation expense as a
percentage of rental revenue, excluding reimbursements, is expected
to be approximately 3.4% - 3.7% in 2024.
|
(7)
Acquisition volume excludes merger with Spirit Realty, which closed
January 23, 2024
|
Conference Call Information
In conjunction with the release of our operating results, we
will host a conference call on February 21, 2024 at
11:00 a.m. PST to discuss the
results. To access the conference call, dial (833) 816-1264
(United States) or (412) 317-5632
(International). When prompted, please ask for the Realty Income
conference call.
A telephone replay of the conference call can also be accessed
by calling (877) 344-7529 and entering the conference ID 6093311.
The telephone replay will be available through February 28, 2024.
A live webcast will be available in listen-only mode by clicking
on the webcast link on the company's home page or in the investors
section at www.realtyincome.com. A replay of the conference call
webcast will be available approximately one hour after the
conclusion of the live broadcast. No access code is required for
this replay.
Supplemental Materials and Sustainability Report
Supplemental Operating and Financial Data for the year ended
December 31, 2023 are available on
our corporate website at
www.realtyincome.com/investors/quarterly-and-annual-results.
The Sustainability Report for the year ended December 31,
2022 is available on our corporate website at
esg.realtyincome.com/indicators/sustainability_report. Our Green
Financing Framework is also available on our corporate website at
esg.realtyincome.com/indicators/green_financing.
About Realty Income
Realty Income, The Monthly Dividend Company®, is an
S&P 500 company and member of the S&P 500 Dividend
Aristocrats® index. We invest in people and places to
deliver dependable monthly dividends that increase over time. The
company is structured as a real estate investment trust ("REIT"),
and its monthly dividends are supported by the cash flow
from over 15,450 real estate properties (including properties
acquired in the Spirit merger in January
2024) primarily owned under long-term net lease agreements
with commercial clients. To date, the company has
declared 644 consecutive monthly dividends on its shares
of common stock throughout its 55-year operating history and
increased the dividend 123 times since Realty Income's public
listing in 1994 (NYSE: O). Additional information about the company
can be obtained from the corporate website at
www.realtyincome.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended. When used in
this press release, the words "estimated," "anticipated," "expect,"
"believe," "intend," "continue," "should," "may," "likely,"
"plans," and similar expressions are intended to identify
forward-looking statements. Forward-looking statements include
discussions of our business, portfolio, future operations and
results, including guidance, intentions of management, growth
strategies, acquisitions, dispositions, re-lease, re-development
and speculative development of properties and expenditures related
thereto, settlement of shares of common stock sold pursuant to
forward sale confirmations under our ATM program, dividends, and
trends in our business, including trends in the market for
long-term leases of freestanding, single-client properties.
Forward-looking statements are subject to risks, uncertainties, and
assumptions about us, which may cause our actual future results to
differ materially from expected results. Some of the factors that
could cause actual results to differ materially are, among others,
our continued qualification as a REIT; general domestic and foreign
business, economic, or financial conditions; competition;
fluctuating interest and currency rates; inflation and its impact
on our clients and us; access to debt and equity capital markets
and other sources of funding; continued volatility and uncertainty
in the credit markets and broader financial markets; other risks
inherent in the real estate business including our clients'
defaults under leases, increased client bankruptcies, potential
liability relating to environmental matters, illiquidity of real
estate investments, and potential damages from natural disasters;
impairments in the value of our real estate assets; changes in
domestic and foreign income tax laws and rates; our clients'
solvency; property ownership through joint ventures and
partnerships which may limit control of the underlying investments;
current or future epidemics or pandemics, measures taken to limit
their spread, the impacts on us, our business, our clients, and the
economy generally; the loss of key personnel; the outcome of any
legal proceedings to which we are a party or which may occur in the
future; acts of terrorism and war; the anticipated benefits from
the merger with Spirit; and those additional risks and factors
discussed in our reports filed with the U.S. Securities and
Exchange Commission. Readers are cautioned not to place undue
reliance on forward-looking statements. Forward-looking statements
are not guarantees of future plans and performance and speak only
as of the date of this press release. Actual plans and operating
results may differ materially from what is expressed or forecasted
in this press release. We do not undertake any obligation to update
forward-looking statements or publicly release the results of any
forward-looking statements that may be made to reflect events or
circumstances after the date these statements were made.
CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
Three months ended
December 31,
|
|
Years ended December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUE
|
|
|
|
|
|
|
|
|
Rental (including
reimbursable) (1)
|
|
$
1,028,710
|
|
$
873,346
|
|
$
3,958,150
|
|
$
3,299,657
|
Other
|
|
47,575
|
|
15,304
|
|
120,843
|
|
44,024
|
Total
revenue
|
|
1,076,285
|
|
888,650
|
|
4,078,993
|
|
3,343,681
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
475,856
|
|
438,174
|
|
1,895,177
|
|
1,670,389
|
Interest
|
|
208,313
|
|
131,290
|
|
730,423
|
|
465,223
|
Property (including
reimbursable)
|
|
81,883
|
|
69,089
|
|
316,964
|
|
226,330
|
General and
administrative
|
|
38,015
|
|
37,525
|
|
144,536
|
|
138,459
|
Provisions for
impairment
|
|
27,281
|
|
9,481
|
|
87,082
|
|
25,860
|
Merger and
integration-related costs
|
|
9,932
|
|
903
|
|
14,464
|
|
13,897
|
Total
expenses
|
|
841,280
|
|
686,462
|
|
3,188,646
|
|
2,540,158
|
Gain on sales of real
estate
|
|
5,992
|
|
9,346
|
|
25,667
|
|
102,957
|
Foreign currency and
derivative (loss) gain, net
|
|
(18,371)
|
|
2,692
|
|
(13,414)
|
|
(13,311)
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
367
|
Equity in income and
impairment of investment
in unconsolidated entities
|
|
2,135
|
|
(113)
|
|
2,546
|
|
(6,448)
|
Other income,
net
|
|
10,804
|
|
23,604
|
|
23,789
|
|
30,511
|
Income before income
taxes
|
|
235,565
|
|
237,717
|
|
928,935
|
|
917,599
|
Income
taxes
|
|
(15,803)
|
|
(9,381)
|
|
(52,021)
|
|
(45,183)
|
Net income
|
|
219,762
|
|
228,336
|
|
876,914
|
|
872,416
|
Net income attributable
to noncontrolling interests
|
|
(1,357)
|
|
(1,071)
|
|
(4,605)
|
|
(3,008)
|
Net income available to
common stockholders
|
|
$
218,405
|
|
$
227,265
|
|
$
872,309
|
|
$
869,408
|
|
|
|
|
|
|
|
|
|
Funds from operations
available to common
stockholders (FFO)
|
|
$
713,716
|
|
$
664,508
|
|
$
2,822,138
|
|
$
2,471,893
|
Normalized funds from
operations available to
common stockholders (Normalized FFO)
|
|
$
723,648
|
|
$
665,411
|
|
$
2,836,602
|
|
$
2,485,790
|
Adjusted funds from
operations available to
common stockholders (AFFO)
|
|
$
731,034
|
|
$
633,967
|
|
$
2,774,870
|
|
$
2,401,359
|
|
|
|
|
|
|
|
|
|
Per share information
for common stockholders:
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
per common share, basic and diluted
|
|
$
0.30
|
|
$
0.36
|
|
$
1.26
|
|
$
1.42
|
|
|
|
|
|
|
|
|
|
FFO per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.98
|
|
$
1.05
|
|
$
4.08
|
|
$
4.04
|
Diluted
|
|
$
0.98
|
|
$
1.05
|
|
$
4.07
|
|
$
4.04
|
|
|
|
|
|
|
|
|
|
Normalized FFO per
common share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.00
|
|
$
1.05
|
|
$
4.10
|
|
$
4.06
|
Diluted
|
|
$
1.00
|
|
$
1.05
|
|
$
4.09
|
|
$
4.06
|
|
|
|
|
|
|
|
|
|
AFFO per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.01
|
|
$
1.00
|
|
$
4.01
|
|
$
3.93
|
Diluted
|
|
$
1.01
|
|
$
1.00
|
|
$
4.00
|
|
$
3.92
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per common share
|
|
$
0.7680
|
|
$
0.7440
|
|
$
3.0510
|
|
$
2.9670
|
(1)
|
Includes reserves
to rental revenue of $1.0 million and reserve reversals to
rental revenue of $10.4 million for the three months and year
ended December 31, 2023, respectively, and reserves of rental
revenue of $14.9 million and $4.0 million for the three months
and year ended December 31, 2022, respectively. References to
reserves recorded as a reduction of rental revenue include amounts
reserved for in the current period, as well as unrecognized
contractual revenue and unrecognized straight-line rental revenue
for leases accounted for on a cash basis. References to reserve
reversals recorded as increases to rental revenue include amounts
where the accounting for recognition of rental revenue and
straight-line rental revenue has been moved from the cash to the
accrual basis.
|
FUNDS FROM
OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized
FFO)
(in thousands, except
per share amounts)
|
FFO and Normalized FFO
are non-GAAP financial measures. Please see the Glossary for our
definitions and explanations of how we utilize these
metrics.
|
|
|
|
Three months ended
December 31,
|
|
Years ended December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net income available to
common
stockholders
|
|
$
218,405
|
|
$
227,265
|
|
$
872,309
|
|
$
869,408
|
Depreciation and
amortization
|
|
475,856
|
|
438,174
|
|
1,895,177
|
|
1,670,389
|
Depreciation of
furniture, fixtures and
equipment
|
|
(583)
|
|
(536)
|
|
(2,239)
|
|
(2,014)
|
Provisions for
impairment of real estate
|
|
22,407
|
|
9,481
|
|
82,208
|
|
25,860
|
Gain on sales of real
estate
|
|
(5,992)
|
|
(9,346)
|
|
(25,667)
|
|
(102,957)
|
Proportionate share of
adjustments for
unconsolidated entities
|
|
4,670
|
|
—
|
|
4,205
|
|
12,812
|
FFO adjustments
allocable to noncontrolling
interests
|
|
(1,047)
|
|
(530)
|
|
(3,855)
|
|
(1,605)
|
FFO available to common
stockholders
|
|
$
713,716
|
|
$
664,508
|
|
$
2,822,138
|
|
$
2,471,893
|
FFO allocable to
dilutive noncontrolling
interests
|
|
1,386
|
|
1,410
|
|
5,552
|
|
3,979
|
Diluted FFO
|
|
$
715,102
|
|
$
665,918
|
|
$
2,827,690
|
|
$
2,475,872
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
713,716
|
|
$
664,508
|
|
$
2,822,138
|
|
$
2,471,893
|
Merger and
integration-related costs
|
|
9,932
|
|
903
|
|
14,464
|
|
13,897
|
Normalized FFO
available to common
stockholders
|
|
$
723,648
|
|
$
665,411
|
|
$
2,836,602
|
|
$
2,485,790
|
Normalized FFO
allocable to dilutive
noncontrolling interests
|
|
1,386
|
|
1,410
|
|
5,552
|
|
3,979
|
Diluted Normalized
FFO
|
|
$
725,034
|
|
$
666,821
|
|
$
2,842,154
|
|
$
2,489,769
|
|
|
|
|
|
|
|
|
|
FFO per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.98
|
|
$
1.05
|
|
$
4.08
|
|
$
4.04
|
Diluted
|
|
$
0.98
|
|
$
1.05
|
|
$
4.07
|
|
$
4.04
|
|
|
|
|
|
|
|
|
|
Normalized FFO per
common share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.00
|
|
$
1.05
|
|
$
4.10
|
|
$
4.06
|
Diluted
|
|
$
1.00
|
|
$
1.05
|
|
$
4.09
|
|
$
4.06
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
556,114
|
|
$
470,737
|
|
$
2,111,793
|
|
$
1,813,432
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders in
excess of distributions paid to common
stockholders
|
|
$
157,602
|
|
$
193,771
|
|
$
710,345
|
|
$
658,461
|
|
|
|
|
|
|
|
|
|
Normalized FFO
available to common
stockholders in excess of distributions
paid
to common stockholders
|
|
$
167,534
|
|
$
194,674
|
|
$
724,809
|
|
$
672,358
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common
shares used for FFO and Normalized
FFO
|
|
|
|
|
|
|
|
|
Basic
|
|
724,598
|
|
633,374
|
|
692,298
|
|
611,766
|
Diluted
|
|
726,859
|
|
635,637
|
|
694,819
|
|
613,473
|
ADJUSTED FUNDS FROM
OPERATIONS (AFFO)
(in thousands, except
per share amounts)
|
AFFO is a non-GAAP
financial measure. Please see the Glossary for our definition and
an explanation of how we utilize this metric.
|
|
|
|
Three months ended
December 31,
|
|
Years ended December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income available to
common
stockholders
|
|
$
218,405
|
|
$
227,265
|
|
$
872,309
|
|
$
869,408
|
Cumulative adjustments
to calculate
Normalized FFO (1)
|
|
505,243
|
|
438,146
|
|
1,964,293
|
|
1,616,382
|
Normalized FFO
available to common
stockholders
|
|
723,648
|
|
665,411
|
|
2,836,602
|
|
2,485,790
|
Gain on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
(367)
|
Amortization of
share-based compensation
|
|
6,073
|
|
4,875
|
|
26,227
|
|
21,617
|
Amortization of net
debt premiums and
deferred financing costs
(2)
|
|
(10,127)
|
|
(16,378)
|
|
(44,568)
|
|
(67,150)
|
Non-cash (gain) loss on
interest rate swaps
|
|
(1,799)
|
|
(1,463)
|
|
(7,189)
|
|
718
|
Non-cash change in
allowance for credit
losses
|
|
4,874
|
|
—
|
|
4,874
|
|
—
|
Straight-line impact of
cash settlement on
interest rate swaps (3)
|
|
1,798
|
|
1,558
|
|
7,190
|
|
1,558
|
Leasing costs and
commissions
|
|
(3,010)
|
|
(1,383)
|
|
(9,878)
|
|
(5,236)
|
Recurring capital
expenditures
|
|
(141)
|
|
(128)
|
|
(331)
|
|
(587)
|
Straight-line rent and
expenses, net
|
|
(27,891)
|
|
(35,248)
|
|
(141,130)
|
|
(120,252)
|
Amortization of above
and below-market
leases, net
|
|
17,134
|
|
15,777
|
|
79,101
|
|
63,243
|
Proportionate share of
adjustments for
unconsolidated entities
|
|
932
|
|
—
|
|
932
|
|
(4,239)
|
Other adjustments
(4)
|
|
19,543
|
|
946
|
|
23,040
|
|
26,264
|
AFFO available to
common stockholders
|
|
$
731,034
|
|
$
633,967
|
|
$
2,774,870
|
|
$
2,401,359
|
AFFO allocable to
dilutive noncontrolling
interests
|
|
1,370
|
|
1,420
|
|
5,540
|
|
4,033
|
Diluted AFFO
|
|
$
732,404
|
|
$
635,387
|
|
$
2,780,410
|
|
$
2,405,392
|
|
|
|
|
|
|
|
|
|
AFFO per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.01
|
|
$
1.00
|
|
$
4.01
|
|
$
3.93
|
Diluted
|
|
$
1.01
|
|
$
1.00
|
|
$
4.00
|
|
$
3.92
|
|
|
|
|
|
|
|
|
|
Distributions paid to
common stockholders
|
|
$
556,114
|
|
$
470,737
|
|
$
2,111,793
|
|
$
1,813,432
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders in
excess of distributions paid to common
stockholders
|
|
$
174,920
|
|
$
163,230
|
|
$
663,077
|
|
$
587,927
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common
shares used for AFFO:
|
|
|
|
|
|
|
|
|
Basic
|
|
724,598
|
|
633,374
|
|
692,298
|
|
611,766
|
Diluted
|
|
726,859
|
|
635,637
|
|
694,819
|
|
613,473
|
(1)
|
See Normalized FFO
calculations on page 10 for reconciling items.
|
(2)
|
Includes the
amortization of net premiums on notes payable and assumption of our
mortgages payable, which are being amortized over the life of the
applicable debt, and costs incurred and capitalized upon issuance
and exchange of our notes payable, assumption of our mortgages
payable and issuance of our term loans, which are also being
amortized over the lives of the applicable debt. No costs
associated with our credit facility agreements or annual fees paid
to credit rating agencies have been included.
|
(3)
|
Represents the
straight-line amortization of $72.0 million gain realized upon the
termination of $500.0 million in notional interest rate swaps in
October 2022, over the term of the $750.0 million of 5.625% senior
unsecured notes due October 2032.
|
(4)
|
Includes non-cash
foreign currency losses (gains) from remeasurement to USD,
mark-to-market adjustments on investments and derivatives that are
non-cash in nature, straight-line payments from cross-currency
swaps, obligations related to financing lease liabilities, and
adjustments allocable to noncontrolling interests.
|
HISTORICAL FFO AND
AFFO
(in thousands, except
per share amounts)
|
|
For the three months
ended December 31,
|
|
2023
|
|
2022
|
|
2021
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
218,405
|
|
$
227,265
|
|
$
4,041
|
|
$
117,931
|
|
$
129,297
|
Depreciation and
amortization, net of furniture,
fixtures and equipment
|
|
475,273
|
|
437,638
|
|
332,877
|
|
174,888
|
|
156,467
|
Provisions for
impairment of real estate
|
|
22,407
|
|
9,481
|
|
7,990
|
|
23,790
|
|
8,950
|
Gain on sales of real
estate
|
|
(5,992)
|
|
(9,346)
|
|
(20,402)
|
|
(22,667)
|
|
(14,168)
|
Proportionate share of
adjustments for
unconsolidated entities
|
|
4,670
|
|
—
|
|
1,931
|
|
—
|
|
—
|
FFO adjustments
allocable to noncontrolling interests
|
|
(1,047)
|
|
(530)
|
|
(274)
|
|
(242)
|
|
(150)
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
713,716
|
|
$
664,508
|
|
$
326,163
|
|
$
293,700
|
|
$
280,396
|
Merger and
integration-related costs
|
|
9,932
|
|
903
|
|
137,332
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO
available to common stockholders
|
|
$
723,648
|
|
$
665,411
|
|
$
463,495
|
|
$
293,700
|
|
$
280,396
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
0.98
|
|
$
1.05
|
|
$
0.63
|
|
$
0.83
|
|
$
0.85
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO per
diluted share
|
|
$
1.00
|
|
$
1.05
|
|
$
0.89
|
|
$
0.83
|
|
$
0.85
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders
|
|
$
731,034
|
|
$
633,967
|
|
$
486,047
|
|
$
297,654
|
|
$
281,986
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
1.01
|
|
$
1.00
|
|
$
0.94
|
|
$
0.84
|
|
$
0.86
|
|
|
|
|
|
|
|
|
.
|
|
|
Cash dividends paid per
share
|
|
$
0.7680
|
|
$
0.7440
|
|
$
0.7180
|
|
$
0.7020
|
|
$
0.6810
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO,
Normalized FFO and AFFO
|
|
726,859
|
|
635,637
|
|
519,438
|
|
355,051
|
|
329,364
|
For the year ended
December 31,
|
|
2023
|
|
2022
|
|
2021
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to
common stockholders
|
|
$
872,309
|
|
$
869,408
|
|
$
359,456
|
|
$
395,486
|
|
$
436,482
|
Depreciation and
amortization, net of furniture,
fixtures and equipment
|
|
1,892,938
|
|
1,668,375
|
|
896,809
|
|
676,450
|
|
593,396
|
Provisions for
impairment of real estate
|
|
82,208
|
|
25,860
|
|
38,967
|
|
147,232
|
|
40,186
|
Gain on sales of real
estate
|
|
(25,667)
|
|
(102,957)
|
|
(55,798)
|
|
(76,232)
|
|
(29,996)
|
Proportionate share of
adjustments for
unconsolidated entities
|
|
4,205
|
|
12,812
|
|
1,931
|
|
—
|
|
—
|
FFO adjustments
allocable to noncontrolling interests
|
|
(3,855)
|
|
(1,605)
|
|
(785)
|
|
(817)
|
|
(477)
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
stockholders
|
|
$
2,822,138
|
|
$
2,471,893
|
|
$
1,240,580
|
|
$
1,142,119
|
|
$
1,039,591
|
Merger and
integration-related costs
|
|
14,464
|
|
13,897
|
|
167,413
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO
available to common stockholders
|
|
$
2,836,602
|
|
$
2,485,790
|
|
$
1,407,993
|
|
$
1,142,119
|
|
$
1,039,591
|
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
4.07
|
|
$
4.04
|
|
$
2.99
|
|
$
3.31
|
|
$
3.29
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO per
diluted share
|
|
$
4.09
|
|
$
4.06
|
|
$
3.39
|
|
$
3.31
|
|
$
3.29
|
|
|
|
|
|
|
|
|
|
|
|
AFFO available to
common stockholders
|
|
$
2,774,870
|
|
$
2,401,359
|
|
$
1,488,753
|
|
$
1,172,626
|
|
$
1,050,015
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
share
|
|
$
4.00
|
|
$
3.92
|
|
$
3.59
|
|
$
3.39
|
|
$
3.32
|
|
|
|
|
|
|
|
|
|
|
2.7105
|
Cash dividends paid per
share
|
|
$
3.0510
|
|
$
2.9670
|
|
$
2.8330
|
|
$
2.7940
|
|
$
2.7105
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding - FFO
|
|
694,819
|
|
613,473
|
|
414,770
|
|
345,878
|
|
316,601
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding -
Normalized FFO and AFFO
|
|
694,819
|
|
613,473
|
|
415,270
|
|
345,878
|
|
316,601
|
ADJUSTED
EBITDAre
(dollars in
thousands)
|
Adjusted
EBITDAre, Annualized Adjusted EBITDAre, Pro Forma
Adjusted EBITDAre, Annualized Pro Forma Adjusted
EBITDAre, Net Debt/Annualized Adjusted EBITDAre and
Net Debt/Annualized Pro Forma Adjusted EBITDAre are non-GAAP
financial measures. Please see the Glossary for our definition and
an explanation of how we utilize these metrics.
|
|
|
|
Three months ended
December 31,
|
|
|
2023
|
|
2022
|
Net income
|
|
$
219,762
|
|
$
228,336
|
Interest
|
|
208,313
|
|
131,290
|
Income taxes
|
|
15,803
|
|
9,381
|
Depreciation and
amortization
|
|
475,856
|
|
438,174
|
Provisions for
impairment
|
|
27,281
|
|
9,481
|
Merger and
integration-related costs
|
|
9,932
|
|
903
|
Gain on sales of real
estate
|
|
(5,992)
|
|
(9,346)
|
Foreign currency and
derivative loss (gain), net
|
|
18,371
|
|
(2,692)
|
Gain on settlement of
foreign currency forwards
|
|
—
|
|
2,139
|
Proportionate share of
adjustments from unconsolidated entities
|
|
14,983
|
|
113
|
Quarterly Adjusted
EBITDAre
|
|
$
984,309
|
|
$
807,779
|
Annualized Adjusted
EBITDAre (1)
|
|
$
3,937,236
|
|
$
3,231,116
|
Annualized Pro Forma
Adjustments
|
|
$
74,919
|
|
$
119,876
|
Annualized Pro Forma
Adjusted EBITDAre
|
|
$
4,012,155
|
|
$
3,350,992
|
Total debt per the
consolidated balance sheet, excluding deferred financing costs
and net premiums and discounts
|
|
$
21,480,869
|
|
$
17,935,539
|
Proportionate share of
unconsolidated entities debt, excluding deferred financing
costs
|
|
659,190
|
|
—
|
Less: Cash and cash
equivalents
|
|
(232,923)
|
|
(171,102)
|
Net Debt
(2)
|
|
$
21,907,136
|
|
$
17,764,437
|
Net Debt/Annualized
Adjusted EBITDAre
|
|
5.6x
|
|
5.5x
|
Net Debt/Annualized Pro
Forma Adjusted EBITDAre
|
|
5.5x
|
|
5.3x
|
(1)
|
We calculate Annualized
Adjusted EBITDAre by multiplying the Quarterly Adjusted
EBITDAre by four.
|
(2)
|
Net Debt is total debt
per our consolidated balance sheets, excluding deferred financing
costs and net premiums and discounts, but including our
proportionate share of debt from unconsolidated entities, less cash
and cash equivalents.
|
The Annualized Pro Forma Adjustments, which include transaction
accounting adjustments in accordance with U.S GAAP, consist of
adjustments to incorporate Adjusted EBITDAre from properties
we acquired or stabilized during the applicable quarter and remove
Adjusted EBITDAre from properties we disposed of during the
applicable quarter, giving pro forma effect to all transactions as
if they occurred at the beginning of the applicable period. Our
calculation includes all adjustments consistent with the
requirements to present Adjusted EBITDAre on a pro forma
basis in accordance with Article 11 of Regulation S-X. The
Annualized Pro Forma Adjustments are consistent with the debt
service coverage ratio calculated under financial covenants for our
senior unsecured notes. The following table summarizes our
Annualized Pro Forma Adjustments related to our Annualized Pro
Forma Adjusted EBITDAre calculation for the periods
indicated below (in thousands):
|
|
Three months ended
December 31,
|
|
|
2023
|
|
2022
|
Annualized pro forma
adjustments from properties acquired or stabilized
|
|
$
77,012
|
|
$
120,408
|
Annualized pro forma
adjustments from properties disposed
|
|
(2,093)
|
|
(532)
|
Annualized Pro forma
Adjustments
|
|
$
74,919
|
|
$
119,876
|
CONSOLIDATED BALANCE
SHEETS
(in thousands, except
per share amounts) (unaudited)
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
|
Real estate held for
investment, at cost:
|
|
|
|
|
Land
|
|
$
14,929,310
|
|
$
12,948,835
|
Buildings and
improvements
|
|
34,657,094
|
|
29,707,751
|
Total real estate held
for investment, at cost
|
|
49,586,404
|
|
42,656,586
|
Less accumulated
depreciation and amortization
|
|
(6,072,118)
|
|
(4,904,165)
|
Real estate held for
investment, net
|
|
43,514,286
|
|
37,752,421
|
Real estate and lease
intangibles held for sale, net
|
|
31,466
|
|
29,535
|
Cash and cash
equivalents
|
|
232,923
|
|
171,102
|
Accounts receivable,
net
|
|
710,536
|
|
543,237
|
Lease intangible
assets, net
|
|
5,017,907
|
|
5,168,366
|
Goodwill
|
|
3,731,478
|
|
3,731,478
|
Investment in
unconsolidated entities
|
|
1,172,118
|
|
—
|
Other assets,
net
|
|
3,368,643
|
|
2,276,953
|
Total
assets
|
|
$
57,779,357
|
|
$
49,673,092
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Distributions
payable
|
|
$
195,222
|
|
$
165,710
|
Accounts payable and
accrued expenses
|
|
738,526
|
|
399,137
|
Lease intangible
liabilities, net
|
|
1,406,853
|
|
1,379,436
|
Other
liabilities
|
|
811,650
|
|
774,787
|
Line of credit payable
and commercial paper
|
|
764,390
|
|
2,729,040
|
Term loan,
net
|
|
1,331,841
|
|
249,755
|
Mortgages payable,
net
|
|
821,587
|
|
853,925
|
Notes payable,
net
|
|
18,602,319
|
|
14,278,013
|
Total
liabilities
|
|
24,672,388
|
|
20,829,803
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock and paid in capital, par value $0.01 per share,
1,300,000 shares authorized, 752,460 and
660,300 shares
issued and outstanding as of December 31, 2023
and
December 31, 2022, respectively
|
|
39,629,709
|
|
34,159,509
|
Distributions in excess
of net income
|
|
(6,762,136)
|
|
(5,493,193)
|
Accumulated other
comprehensive income
|
|
73,894
|
|
46,833
|
Total stockholders'
equity
|
|
32,941,467
|
|
28,713,149
|
Noncontrolling
interests
|
|
165,502
|
|
130,140
|
Total
equity
|
|
33,106,969
|
|
28,843,289
|
Total liabilities and
equity
|
|
$
57,779,357
|
|
$
49,673,092
|
GLOSSARY
Adjusted EBITDAre. The National Association of
Real Estate Investment Trusts (Nareit) established an EBITDA metric
for real estate companies (i.e., EBITDA for real estate, or
EBITDAre) it believed would provide investors with a
consistent measure to help make investment decisions among certain
REITs. Our definition of "Adjusted EBITDAre" is generally
consistent with the Nareit definition, other than our adjustment to
remove foreign currency and derivative gain and loss, excluding the
gain and loss from the settlement of foreign currency forwards not
designated as hedges (which is consistent with our previous
calculations of "Adjusted EBITDAre"). We define Adjusted
EBITDAre, a non-GAAP financial measure, for the most recent
quarter as earnings (net income) before (i) interest expense,
including non-cash loss (gain) on swaps, (ii) income and
franchise taxes, (iii) gain on extinguishment of debt, (iv)
real estate depreciation and amortization, (v) provisions for
impairment, (vi) merger and integration-related costs,
(vii) gain on sales of real estate, (viii) foreign currency
and derivative gain and loss, net, (ix) gain on settlement of
foreign currency forwards, and (x) our proportionate share of
adjustments from unconsolidated entities. Our Adjusted
EBITDAre may not be comparable to Adjusted
EBITDAre reported by other companies or as defined by
Nareit, and other companies may interpret or define Adjusted
EBITDAre differently than we do. Management believes
Adjusted EBITDAre to be a meaningful measure of a REIT's
performance because it provides a view of our operating
performance, analyzes our ability to meet interest payment
obligations before the effects of income tax, depreciation and
amortization expense, provisions for impairment, gain on sales of
real estate and other items, as defined above, that affect
comparability, including the removal of non-recurring and non-cash
items that industry observers believe are less relevant to
evaluating the operating performance of a company. In addition,
EBITDAre is widely followed by industry analysts, lenders,
investors, rating agencies, and others as a means of evaluating the
operational cash generating capacity of a company prior to
servicing debt obligations. Management also believes the use of an
annualized quarterly Adjusted EBITDAre metric is
meaningful because it represents our current earnings run rate for
the period presented. The ratio of our total debt to our annualized
quarterly Adjusted EBITDAre is also used to determine
vesting of performance share awards granted to our executive
officers. Adjusted EBITDAre should be considered along
with, but not as an alternative to, net income as a measure of our
operating performance.
Adjusted Funds From Operations (AFFO), a non-GAAP
financial measure, is defined as FFO adjusted for unique
revenue and expense items, which we believe are not as pertinent to
the measurement of our ongoing operating performance. Most
companies in our industry use a similar measurement to AFFO, but
they may use the term "CAD" (for Cash Available for Distribution)
or "FAD" (for Funds Available for Distribution). We believe AFFO
provides useful information to investors because it is a widely
accepted industry measure of the operating performance of real
estate companies used by the investment community. In particular,
AFFO provides an additional measure to compare the operating
performance of different REITs without having to account for
differing depreciation assumptions and other unique revenue and
expense items which are not pertinent to measuring a particular
company's ongoing operating performance. Therefore, we believe that
AFFO is an appropriate supplemental performance metric, and that
the most appropriate GAAP performance metric to which AFFO should
be reconciled is net income available to common stockholders.
Annualized Adjusted EBITDAre, a non-GAAP financial
measure, is calculated by annualizing Adjusted EBITDAre.
Annualized Contractual Rent of our acquisitions and
properties under development is the monthly aggregate cash amount
charged to clients, inclusive of monthly base rent receivables, as
of the balance sheet date, multiplied by 12, excluding percentage
rent, interest income on loans and preferred equity investments,
and including our pro rata share of such revenues from properties
owned by unconsolidated joint ventures. We believe total annualized
contractual rent is a useful supplemental operating measure, as it
excludes entities that were no longer owned at the balance sheet
date and includes the annualized rent from properties acquired
during the quarter. Total annualized contractual rent has not been
reduced to reflect reserves recorded as reductions to GAAP rental
revenue in the periods presented.
Annualized Pro Forma Adjusted EBITDAre, a non-GAAP
financial measure, is defined as Adjusted EBITDAre, which
includes transaction accounting adjustments in accordance with U.S.
GAAP, consists of adjustments to incorporate Adjusted
EBITDAre from properties we acquired or stabilized during
the applicable quarter and removes Adjusted EBITDAre from
properties we disposed of during the applicable quarter, giving pro
forma effect to all transactions as if they occurred at the
beginning of the applicable quarter. Our calculation includes all
adjustments consistent with the requirements to present Adjusted
EBITDAre on a pro forma basis in accordance with Article 11
of Regulation S-X. The annualized pro forma adjustments are
consistent with the debt service coverage ratio calculated under
financial covenants for our senior unsecured notes and bonds.
Cash Income represents cash rent for real estate
acquisitions and properties under development. For unconsolidated
entities, this represents our pro rata share of the
cash income. For loans receivable and preferred equity
investment, cash income represents interest income and preferred
dividend income, respectively.
Funds From Operations (FFO), a non-GAAP financial
measure, consistent with the Nareit definition, is net income
available to common stockholders, plus depreciation and
amortization of real estate assets, plus provisions for impairments
of depreciable real estate assets, and reduced by gain on property
sales. Presentation of the information regarding FFO and AFFO is
intended to assist the reader in comparing the operating
performance of different REITs, although it should be noted that
not all REITs calculate FFO and AFFO in the same way, so
comparisons with other REITs may not be meaningful. FFO and AFFO
should not be considered alternatives to reviewing our cash flows
from operating, investing, and financing activities. In addition,
FFO and AFFO should not be considered measures of liquidity, of our
ability to make cash distributions, or of our ability to pay
interest payments. We consider FFO to be an appropriate
supplemental measure of a REIT's operating performance as it is
based on a net income analysis of property portfolio performance
that adds back items such as depreciation and impairments for FFO.
The historical accounting convention used for real estate assets
requires straight-line depreciation of buildings and improvements,
which implies that the value of real estate assets diminishes
predictably over time. Since real estate values historically rise
and fall with market conditions, presentations of operating results
for a REIT using historical accounting for depreciation could be
less informative. The use of FFO is recommended by the REIT
industry as a supplemental performance measure. In addition, FFO is
used as a measure of our compliance with the financial covenants of
our credit facility.
Initial Weighted Average Cash Yield for
acquisitions and properties under development is computed as Cash
Income for the first twelve months following the acquisition date,
divided by the total cost of the property (including all expenses
borne by us), and includes our pro-rata share of Cash Income from
unconsolidated joint ventures. Initial weighted average cash yield
for loans receivable and preferred equity investment is computed
using the Cash Income for the first twelve months following
the acquisition date (based on interest rates in place as of the
date of acquisition), divided by the total cost of the
investment.
Investment Grade Clients are our clients with a
credit rating, and our clients that are subsidiaries or affiliates
of companies with a credit rating, as of the balance sheet date, of
Baa3/BBB- or higher from one of the three major rating agencies
(Moody's/S&P/Fitch).
Net Debt/Annualized Adjusted EBITDAre, a
ratio used by management as a measure of leverage, is calculated as
net debt (which we define as total debt per our consolidated
balance sheet, excluding deferred financing costs and net premiums
and discounts, but including our proportionate share of debt from
unconsolidated entities, less cash and cash equivalents), divided
by Annualized Adjusted EBITDAre.
Net Debt/Annualized Pro Forma Adjusted EBITDAre, a
ratio used by management as a measure of leverage, is calculated as
net debt (which we define as total debt per our consolidated
balance sheet, excluding deferred financing costs and net premiums
and discounts, but including our proportionate share of debt from
unconsolidated entities, less cash and cash equivalents), divided
by Annualized Pro Forma Adjusted EBITDAre.
Normalized Funds from Operations Available to Common
Stockholders (Normalized FFO), a non-GAAP financial measure, is
FFO excluding merger and integration-related costs.
Same Store Pool, for purposes of determining the
properties used to calculate our same store rental revenue,
includes all properties that we owned for the entire year-to-date
period, for both the current and prior year except for properties
during the current or prior year that were: (i) vacant at any
time,(ii) under development or redevelopment, or
(iii) involved in eminent domain and rent was reduced.
Same Store Rental Revenue excludes straight-line
rent, the amortization of above and below-market leases, and
reimbursements from clients for recoverable real estate taxes and
operating expenses. For purposes of comparability, same store
rental revenue is presented on a constant currency basis by
applying the exchange rate as of the balance sheet date to base
currency rental revenue.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/realty-income-announces-operating-results-for-the-three-months-and-year-ended-december-31-2023-302066579.html
SOURCE Realty Income Corporation