10-KPeriod: FY2008

REALTY INCOME CORP Annual Report, Year Ended Dec 31, 2008

Filed February 12, 2009For Securities:O

Summary

Realty Income Corporation's 2008 10-K report reflects a resilient business model focused on long-term net-leased retail properties, despite the challenging economic environment of 2008. The company maintained a high occupancy rate of 97.0% across its diversified portfolio of 2,348 properties, leased to 119 retail chains in 30 industries across 49 states. Financially, Realty Income demonstrated prudent capital management. While net income available to common stockholders decreased slightly to $107.6 million from $116.2 million in 2007, Funds from Operations (FFO) remained strong at $185.5 million. The company successfully managed its debt, repaying $100 million in senior notes in November 2008 and $20 million in January 2009, with no further debt maturities until 2013. A significant portion of acquisitions ($181.4 million out of $189.6 million total for 2008) occurred in the first quarter, indicating a cautious approach to new investments due to market uncertainty. The company also continued its consistent monthly dividend payment, increasing it for the 45th consecutive quarter.

Financial Highlights

17 data points
Beta

Revenue

$325.04M

Net Income

$131.84M

40.6% Net Margin

Free Cash Flow

$246.16M

Financial Statements
Beta
Revenue$325.04M
Operating Income$110.30M
Interest Expense$93.96M
Net Income$131.84M
Shares Outstanding (Basic)101.18M
Shares Outstanding (Diluted)101.21M

Key Highlights

  • 1Maintained a high occupancy rate of 97.0% across a diversified portfolio of 2,348 retail properties.
  • 2Generated $185.5 million in Funds from Operations (FFO), indicating strong underlying operational performance.
  • 3Successfully repaid $120 million in senior notes in late 2008 and early 2009, with no further maturities until 2013.
  • 4Continued its long-standing policy of paying monthly dividends, with the 45th consecutive quarterly increase in January 2009.
  • 5Acquisitions in 2008 totaled $189.6 million, with a significant portion ($181.4 million) concentrated in the first quarter due to market uncertainty.
  • 6The company maintains investment-grade credit ratings (BBB+ / Baa1 / BBB for senior notes) with stable outlooks.
  • 7No mortgage debt is held on any of the company's properties.

Frequently Asked Questions

In 2008, Realty Income reported net income available to common stockholders of $107.6 million, a decrease from $116.2 million in 2007. However, Funds from Operations (FFO) remained robust at $185.5 million, indicating the operational strength of its real estate portfolio. The company also maintained a strong liquidity position with $46.8 million in cash and cash equivalents and an undrawn $355 million credit facility at year-end.

Realty Income focused on strengthening its balance sheet by repaying $120 million in senior notes during late 2008 and early 2009. The company also entered into a new $355 million acquisition credit facility in May 2008, which was undrawn at year-end, providing significant financial flexibility. Its total outstanding borrowings represented approximately 35.5% of its total market capitalization, reflecting a conservative capital structure. No debt maturities are scheduled until 2013.

As of December 31, 2008, Realty Income owned 2,348 retail properties with a high occupancy rate of 97.0%. The portfolio is diversified across 119 retail chains in 30 industries and located in 49 states. The company experienced a slowdown in acquisitions during the latter half of 2008 due to market uncertainty but continued its strategy of acquiring long-term, net-leased properties.

Realty Income is committed to its policy of paying monthly dividends, a practice it has maintained for 39 years. In January 2009, the company increased its monthly distribution, marking its 45th consecutive quarterly increase. The annualized distribution for 2008 was $1.66225 per share, reflecting a commitment to returning value to shareholders.