10-QPeriod: Q2 FY2009

REALTY INCOME CORP Quarterly Report for Q2 Ended Jun 30, 2009

Filed July 30, 2009For Securities:O

Summary

Realty Income Corporation (O) reported its financial results for the second quarter and first six months ended June 30, 2009. The company maintained a stable rental revenue, showing slight increases in same-store rents. Despite a challenging economic environment, Realty Income demonstrated resilience with consistent monthly dividend payments and a strong occupancy rate of 96.6%. The company successfully managed its debt, with no outstanding balance on its credit facility at the end of the period and no debt maturities until March 2013. Management emphasized a conservative capital structure and maintained its investment-grade credit ratings. While net income available to common stockholders saw a slight decrease year-over-year, Funds From Operations (FFO) available to common stockholders showed a modest increase, highlighting operational stability. The company is actively managing its portfolio through selective property sales and is prepared to reinvest proceeds into acquisitions when accretive opportunities arise. Realty Income's diversified tenant base and focus on long-term net leases continue to provide a predictable income stream.

Financial Highlights

15 data points
Beta

Revenue

$81.30M

Net Income

$32.56M

40.0% Net Margin

Free Cash Flow

$106.81M

Financial Statements
Beta
Revenue$81.30M
Operating Income$59.97M
Interest Expense$21.37M
Net Income$32.56M
Shares Outstanding (Basic)103.45M
Shares Outstanding (Diluted)103.45M

Key Highlights

  • 1Total assets decreased slightly to $2.93 billion from $2.99 billion at year-end 2008, primarily due to debt reduction.
  • 2Net real estate held for investment decreased to $2.81 billion from $2.86 billion, reflecting strategic property sales.
  • 3Total liabilities decreased to $1.41 billion from $1.44 billion, indicating effective debt management.
  • 4Rental revenue for the quarter was $81.6 million, slightly down from $82.0 million in the prior year, with same-store rents showing a modest increase.
  • 5Net income available to common stockholders was $26.5 million for the quarter, down from $27.0 million in the prior year.
  • 6Funds from Operations (FFO) available to common stockholders increased slightly to $47.2 million from $46.8 million.
  • 7The company maintained a strong occupancy rate of 96.6% across its 2,338 properties.

Frequently Asked Questions

For the three months ended June 30, 2009, net income available to common stockholders was $26.5 million, a decrease of $491,000 compared to $27.0 million in the second quarter of 2008. On a diluted per common share basis, net income was $0.26 in Q2 2009 versus $0.27 in Q2 2008. However, Funds From Operations (FFO) available to common stockholders increased slightly to $47.2 million in Q2 2009 from $46.8 million in Q2 2008.

As of June 30, 2009, Realty Income had $35.8 million in cash and cash equivalents. The company had no outstanding balance on its $355 million revolving credit facility and had $1.35 billion in senior unsecured notes outstanding. The earliest debt maturity is in March 2013, indicating a stable debt maturity profile.

The company maintained a high occupancy rate of 96.6% across its 2,338 properties. During the first six months of 2009, Realty Income invested $1.3 million in previously acquired properties and also sold ten investment properties for $6.4 million, resulting in a gain of $2.4 million. The company continues to monitor the acquisition market and aims to reinvest proceeds from property sales into accretive acquisitions when market conditions are favorable.

Realty Income continued its policy of paying monthly distributions to its common stockholders, increasing the monthly distribution in July 2009. The company stated that its funds from operations are sufficient to support its current level of cash distributions and it intends to continue meeting its REIT distribution requirements.