10-KPeriod: FY2022

REALTY INCOME CORP Annual Report, Year Ended Dec 31, 2022

Filed February 22, 2023For Securities:O

Summary

Realty Income Corporation (O) demonstrated robust growth in 2022, largely driven by its strategic merger with VEREIT, Inc. The company's portfolio expanded significantly, encompassing 12,237 properties across diverse industries and geographies, with a high occupancy rate of 99.0%. The company continued its commitment to delivering dependable monthly dividends, increasing them multiple times throughout the year and demonstrating a consistent track record of dividend growth. Financially, Realty Income reported substantial increases in total revenue and net income, with FFO and AFFO also showing significant year-over-year growth. The company actively managed its capital structure, raising approximately $4.6 billion through its At-The-Market (ATM) program and issuing various senior unsecured notes to fund its operations and acquisitions. Despite a challenging economic environment, Realty Income maintained strong credit ratings and a conservative capital structure, positioning it well for continued expansion and shareholder value creation.

Financial Highlights

36 data points
Beta

Revenue

$3.34B

Net Income

$869.41M

26.0% Net Margin

EPS (Diluted)

$1.42

Total Assets

$49.67B

Cash & Equivalents

$171.10M

Free Cash Flow

$2.56B

Financial Statements
Beta
Revenue$3.34B
Operating Expenses$2.54B
Interest Expense$465.22M
Net Income$869.41M
EPS (Basic)$1.42
EPS (Diluted)$1.42
Shares Outstanding (Basic)611.77M
Shares Outstanding (Diluted)612.18M

Key Highlights

  • 1Realty Income expanded its property portfolio to 12,237 properties with a 99.0% occupancy rate, following its merger with VEREIT, Inc.
  • 2The company increased its monthly dividend four times in 2022 and twice in early 2023, continuing its long-standing policy of growing dividends.
  • 3Total revenue increased by 60.7% to $3,343.7 million, and net income available to common stockholders grew by 141.8% to $869.4 million in 2022.
  • 4Funds From Operations (FFO) available to common stockholders increased by 99.3% to $2,471.9 million, and Adjusted Funds From Operations (AFFO) increased by 61.3% to $2,401.4 million.
  • 5The company raised approximately $4.6 billion in net proceeds through its At-the-Market (ATM) equity program during 2022.
  • 6Realty Income maintained a strong balance sheet with total borrowings of $17.9 billion representing approximately 29.9% of its total market capitalization.
  • 7The portfolio remains highly diversified, with the top 10 industries representing only 71.9% of total annualized contractual rent, and the top 20 clients accounting for 40.9% of annualized rent.

Frequently Asked Questions

The merger with VEREIT, completed in November 2021, significantly expanded Realty Income's portfolio and asset base. This contributed to substantial year-over-year growth in total revenue (up 60.7% to $3,343.7 million) and net income (up 141.8% to $869.4 million). The merger also boosted FFO and AFFO, reflecting the increased scale and operational efficiencies.

Realty Income aims to maintain a conservative capital structure, with total borrowings representing approximately 29.9% of its total market capitalization at the end of 2022. The company utilizes a mix of debt and equity to fund its operations and acquisitions, with a long-term goal of common equity being the majority of its capital structure. They also maintain a universal shelf registration statement to facilitate future capital raising activities.

Realty Income's portfolio is highly diversified. At December 31, 2022, it comprised 12,237 properties located across all 50 U.S. states, Puerto Rico, the U.K., Spain, and Italy. The company's tenants operate in 84 different industries, with no single industry accounting for more than 8.6% of annualized contractual rent. Furthermore, the top 10 industries represent 71.9% of total annualized contractual rent, and the top 20 clients account for 40.9% of annualized rent, indicating a well-diversified tenant base.

Realty Income is committed to its policy of delivering dependable monthly dividends that increase over time. In 2022, the company increased its dividend four times, and twice in early 2023. As of February 2023, it had paid 101 consecutive quarterly dividend increases. The dividends paid per share increased by 4.7% in 2022 compared to 2021, totaling $2.967 per share.