10-KPeriod: FY2017

REALTY INCOME CORP Annual Report, Year Ended Dec 31, 2017

Filed February 22, 2018For Securities:O

Summary

Realty Income Corporation (O) presented its 2017 annual report, highlighting its continued strategy of acquiring and leasing freestanding commercial properties under long-term, net lease agreements. The company maintained a high occupancy rate of 98.4% across its diversified portfolio of 5,172 properties, leased to 249 tenants across 47 industries and 49 states plus Puerto Rico. Realty Income demonstrated consistent dividend growth, increasing its monthly dividend five times during 2017 and twice in early 2018, marking 95 dividend increases since its NYSE listing. Financially, the company invested $1.52 billion in new properties during 2017, supported by successful capital raises including significant note offerings totaling $1.3 billion in December 2017 and $705 million in March 2017. Adjusted Funds From Operations (AFFO) per share increased by 6.3% year-over-year, reflecting the company's stable operational performance and commitment to shareholder returns.

Financial Highlights

30 data points
Beta

Revenue

$1.22B

Net Income

$318.80M

26.2% Net Margin

EPS (Diluted)

$1.10

Total Assets

$14.06B

Cash & Equivalents

$6.90M

Free Cash Flow

$875.85M

Financial Statements
Beta
Revenue$1.22B
Interest Expense$247.41M
Net Income$318.80M
EPS (Basic)$1.10
Shares Outstanding (Basic)273.47M
Shares Outstanding (Diluted)273.94M

Key Highlights

  • 1Maintained a high occupancy rate of 98.4% across a diversified portfolio of 5,172 properties.
  • 2Invested $1.52 billion in 303 new properties and properties under development/expansion during 2017.
  • 3Increased the monthly dividend five times in 2017 and twice in early 2018, continuing its track record of dividend growth.
  • 4Total debt represented approximately 27.4% of total market capitalization at December 31, 2017, indicating a conservative capital structure.
  • 5Secured investment-grade credit ratings from Moody's (A3 stable), S&P (BBB+ positive), and Fitch (BBB+ stable).
  • 6Achieved a rent recapture rate of 105.5% on properties re-leased during 2017.
  • 7Adjusted Funds from Operations (AFFO) per share increased by 6.3% year-over-year to $3.06.

Frequently Asked Questions

At December 31, 2017, Realty Income owned a portfolio of 5,172 properties. These properties were located in 49 states and Puerto Rico, leased to 249 different commercial tenants across 47 industries, and had an occupancy rate of 98.4%.

Realty Income funded its operations and acquisitions through a combination of cash flow from operations, borrowings under its $2.0 billion unsecured revolving credit facility, and proceeds from public securities offerings. During 2017, the company issued common stock, raising $1.4 billion, and completed significant note offerings totaling approximately $2.0 billion.

Realty Income continued its policy of paying monthly dividends. In 2017, the company increased its dividend five times and paid total cash distributions of approximately $689.3 million to common stockholders. The dividends paid per share increased by 5.6% compared to 2016.

FFO available to common stockholders increased by 5.1% to $772.7 million in 2017, though FFO per share decreased slightly by 2.1% to $2.82 due to debt extinguishment costs. AFFO available to common stockholders increased significantly by 13.9% to $838.6 million, with AFFO per share increasing by 6.3% to $3.06.