REALTY INCOME CORP Quarterly Report for Q2 Ended Jun 30, 2016

Summary

Realty Income Corporation (O) reported its second quarter and year-to-date results for the period ending June 30, 2016. The company demonstrated solid performance with increases in net income available to common stockholders, Funds from Operations (FFO), and Adjusted Funds from Operations (AFFO) compared to the prior year. Acquisitions remain a key growth driver, with significant investments made in new properties and properties under development during the first six months of the year. The company continued its policy of paying monthly dividends, increasing them four times during the period, underscoring its commitment to shareholder returns. Financially, Realty Income maintained a strong balance sheet with a conservative capital structure and access to significant liquidity through its revolving credit facility. While property sales contributed to gains, the company also recorded impairment charges on certain properties. The portfolio remains well-diversified by tenant, industry, and geography, with a high occupancy rate of 98.0%. The company's strategic focus on acquiring high-quality, net-leased properties leased to investment-grade or financially sound tenants continues to support its consistent dividend payout and potential for growth.

Key Highlights

• 1Net income available to common stockholders increased by 8.0% to $0.27 per diluted share for Q2 2016 and by 1.9% to $0.53 per diluted share for the six months ended June 30, 2016, compared to the prior year.
• 2Funds From Operations (FFO) per diluted share increased by 1.4% to $0.70 for Q2 2016 and by 1.5% to $1.38 for the six months ended June 30, 2016.
• 3Adjusted Funds From Operations (AFFO) per diluted share increased by 4.4% to $0.71 for Q2 2016 and by 4.4% to $1.42 for the six months ended June 30, 2016.
• 4The company invested $662.9 million in 153 new properties and properties under development or expansion during the first six months of 2016.
• 5Realty Income continued its track record of increasing monthly dividends, with four increases in the first half of 2016, and maintained an occupancy rate of 98.0% as of June 30, 2016.
• 6The company maintained a conservative capital structure, with total outstanding borrowings representing approximately 21.3% of its total market capitalization as of June 30, 2016.
• 7Total rental revenue increased by 7.7% to $260.1 million for Q2 2016 and by 8.5% to $516.9 million for the six months ended June 30, 2016, driven by acquisitions and same-store rent increases.

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