PR Newswire | Aug 3, 2020 04:06PM EDT

Months Of 2020

08/03 15:05 CDT

Realty Income Announces Operating Results For Second Quarter And First Six Months Of 2020 SAN DIEGO, Aug. 3, 2020

SAN DIEGO, Aug. 3, 2020 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company(r), today announced operating results for the second quarter and six months ended June 30, 2020. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.

COMPANY HIGHLIGHTS

For the quarter ended June 30, 2020

* Net income per share was $0.31 * AFFO per share increased 4.9% to $0.86, compared to the quarter ended June 30, 2019 * Collected 86.5% of contractual rent across our total portfolio * Invested $154.2 million in 32 properties and properties under development or expansion, including $58.2 million in two properties in the U.K. * Raised $593.9 million through the issuance of 3.250% senior unsecured notes due in 2031 * Raised $98.1 million from the sale of common stock, primarily through our At -The-Market (ATM) program

For the month ended July 31, 2020

* Collected 91.5% of contractual rent due for the month of July 2020 across our total portfolio * Raised $378.8 million through the issuance of 3.250% senior unsecured notes due 2031

CEO Comments

"First and foremost, I appreciate my colleagues' seamless transition to a remote work environment, recognize our team's outstanding dedication and contributions that continue to drive our business, and empathize with individuals and businesses impacted by the COVID-19 pandemic," said Sumit Roy, Realty Income's President and Chief Executive Officer. "While economic and public health considerations remain due to the COVID-19 pandemic, our operating results for the second quarter continue to demonstrate the stability and resiliency of our business. Our diversified and high-quality real estate portfolio, which is primarily leased to tenants providing non-discretionary and/or low price point goods or services, was 98.5% occupied at quarter-end, and we achieved a 101% rent recapture rate on re-leasing activity during the quarter. Additionally, our financial position remains strong, as we ended the quarter with a net debt to EBITDAre ratio of 5.1x and a fixed charge coverage ratio of 5.4x. As of July 31st, we had total liquidity of $2.9 billion, including approximately $400 million of cash on hand and $2.5 billion remaining borrowing capacity available on our $3.0 billion revolving credit facility (excluding the $1.0 billion accordion feature, which is subject to obtaining lender commitments), which we believe provides us significant financial flexibility."

"Through July 31st, we have collected 86.5% of contractual rent for the second quarter and 91.5% of contractual rent for the month of July, which represented the second consecutive month of improving rent collection trends and the highest monthly rent collection reported since April 2020. We are pleased with these positive trends, and we continue to manage the business with a focus on generating long-term value for our stakeholders. Given the increased visibility to our business, we are providing 2020 acquisition guidance of $1.25 billion to $1.75 billion."

Summarized Financial Results

The following summarizes our select financial results (dollars in millions, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Total revenue $414.6 $365.5 $829.0 $719.8

Net income available to common stockholders$107.8 $95.2 $254.7 $206.1 ^(1)(2)

Net income per share $0.31 $0.31 $0.75 $0.67

Funds from operations available to common $288.3 $251.5 $565.4 $497.2 stockholders (FFO) ^ (2)(3)

FFO per share $0.84 $0.81 $1.66 $1.62

Adjusted funds from operations available $295.2 $253.9 $592.5 $502.7 to common stockholders (AFFO) ^(3)

AFFO per share $0.86 $0.82 $1.74 $1.63



The calculation to determine net income attributable to common ^ stockholders includes provisions for impairment, gains on sales of real (1)estate, and foreign currency gains and losses. These items can vary from quarter to quarter and can significantly impact net income and period to period comparisons.

Net income available to common stockholders and FFO in the first six months of 2020 were impacted by the following transactions recorded in ^ the first quarter of 2020: (i) a $9.8 million loss on extinguishment of (2)debt due to the January 2020 early redemption of the 5.750% notes due 2021, and (ii) a $3.5 million executive severance charge for our former chief financial officer (CFO).

The company considers FFO and AFFO to be appropriate supplemental measures of a Real Estate Investment Trust's (REIT's) operating performance. Realty Income defines FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts' (Nareit's) definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, and reduced by gains on property sales. AFFO further adjusts FFO for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the^ company's ongoing operating performance. Presentation of the information (3)regarding FFO and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered as measures of liquidity, our ability to make cash distributions, or our ability to pay interest payments. See the reconciliations of net income available to common stockholders to FFO and AFFO on pages eight and nine of this press release.

Impact of COVID-19

Percentages of Contractual Rent Collected as of July 31, 2020

Month Ended Month Month EndedQuarter Month Ended April 30, 2020Ended June 30, Ended July 31, 2020 May 31, 20202020 June 30, 2020



Contractual rent collected^ 88.4% 84.9% 86.1% 86.5% 91.5% (1) across total portfolio

Contractual rent collected^ 83.0% 82.1% 82.5% 82.5% 90.7% (1) from top 20 tenants^(2)

Contractual rent collected^ (1)^ from 100.0% 98.4% 98.9% 99.1% 100.0% investment grade tenants^(3)



Contractual rent is the aggregate cash amount charged to tenants inclusive of monthly base rent receivables. U.K. rent (which is payable ^ in pounds Sterling) was converted at the exchange rate in effect on May (1)1, 2020 for rents collected for the month of April 2020, on June 1, 2020 for rents collected for the month of May 2020, on July 1, 2020 for rents collected for the month of June 2020, and on July 31, 2020 for rents collected for the month of July 2020.

^ We define top 20 tenants as our 20 largest tenants based on percentage of(2)total portfolio annualized contractual rental revenue as of the last day of such period.

We define investment grade tenants as tenants with a credit rating, and ^ tenants that are subsidiaries or affiliates of companies with a credit (3)rating, of Baa3/BBB- or higher from one of the three major rating agencies (Moody's/S&P/Fitch).

We have executed deferral agreements or maintain ongoing deferral discussions with tenants that account for a majority of the unpaid contractual rent for the months of April, May, June, and July 2020. Additional detail on rent collections can be found in our supplemental materials available on our corporate website at www.realtyincome.com/investors/financial-information/quarterly-results.

Dividend Increases

In June 2020, we announced the 91st consecutive quarterly dividend increase, which is the 107th increase in the amount of the dividend since the company's listing on the New York Stock Exchange (NYSE) in 1994. The annualized dividend amount as of June 30, 2020 was $2.802 per share. The amount of monthly dividends paid per share increased 3.1% to $0.699 in the second quarter of 2020, as compared to $0.678 in the second quarter of 2019. During the second quarter of 2020, the company distributed $240.5 million in common dividends to shareholders, representing 81.5% of its AFFO of $295.2 million.

Real Estate Portfolio Update

As of June 30, 2020, our portfolio consisted of 6,541 properties located in 49 U.S. states, Puerto Rico and the U.K., and leased to approximately 600 different tenants doing business in 50 industries. The properties are primarily freestanding and leased under long-term, net lease agreements with a weighted average remaining lease term of 9.0 years. The company's portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of June 30, 2020, portfolio occupancy was 98.5% with 101 properties available for lease or sale out of the 6,541, as compared to 98.5% as of March 31, 2020 and 98.3% as of June 30, 2019.

Changes in Occupancy

Three months ended June 30, 2020

Properties available for lease at March 31, 202097

Lease expirations 81

Re-leases to same tenant ^(1) (60)

Re-leases to new tenant ^(1)(2) (5)

Vacant dispositions (12)

Properties available for lease at June 30, 2020 101



The annual new rent on these re-leases was $15.334 million, as compared ^ to the previous annual rent of $15.128 million on the same properties, (1)representing a rent recapture rate of 101.4% on the properties re-leased during the quarter ended June 30, 2020.

^ Re-leased two properties to new tenants without a period of vacancy, and (2)three properties to new tenants after a period of vacancy.

Six months ended June 30, 2020

Properties available for lease at December 31, 201994

Lease expirations 190

Re-leases to same tenant ^(1) (150)

Re-leases to new tenant ^(1)(2) (8)

Vacant dispositions (25)

Properties available for lease at June 30, 2020 101



The annual new rent on these re-leases was $33.152 million, as compared ^ to the previous annual rent of $33.124 million on the same properties, (1)representing a rent recapture rate of 100.1% on the properties re-leased during the first six months of 2020.

^ Re-leased three properties to new tenants without a period of vacancy, (2)and five properties to new tenants after a period of vacancy.

Investments in Real EstateThe following table summarizes our acquisitions in the U.S. and U.K. for the periods indicated below:

Leasable Weighted Initial Average Number of Square Feet Investment Average Cash Lease Properties(in millions)($ in millions)Lease TermYield (Years)

Three months ended June 30, 2020

Acquisitions - U.S. (in 26 0.4 $ 94.3 12.9 6.4 % 15 states)

Acquisitions2 0.1 58.2 9.9 6.1 % - U.K. ^(1)

Total 28 0.5 152.5 11.8 6.3 % Acquisitions

Properties under 4 0.1 1.7 10.4 10.3 % Development - U.S.

Total ^(2) 32 0.6 $ 154.2 11.8 6.3 %



Six months ended June 30, 2020

Acquisitions - U.S. (in 80 1.8 $ 412.6 14.4 6.5 % 25 states)

Acquisitions6 0.5 223.7 11.8 5.3 % - U.K. ^(1)

Total 86 2.3 636.3 13.6 6.1 % Acquisitions

Properties under 8 0.2 3.9 10.5 8.8 % Development - U.S.

Total ^(3) 94 2.5 $ 640.2 13.6 6.1 %



Represents investments of lb46.8 million Sterling during the quarter ^ ended June 30, 2020 and lb180.1 million during the six months ended June (1)30, 2020 converted at the applicable exchange rate on the date of acquisition.

The tenants occupying the new properties operate in 8 industries, and are^ 100% retail, based on rental revenue. Approximately 41% of the rental (2)revenue generated from acquisitions during the second quarter of 2020 is from investment grade rated tenants, their subsidiaries or affiliated companies.

The tenants occupying the new properties operate in 17 industries, and ^ are 96.5% retail and 3.5% industrial, based on rental revenue. (3)Approximately 37% of the rental revenue generated from acquisitions during the first six months of 2020 is from investment grade rated tenants, their subsidiaries or affiliated companies.

Same Store Rental RevenueThe following summarizes our same store rental revenue on 5,539 properties under lease (dollars in millions):

Three Months Ended June 30, Six Months Ended June 30,Decrease

2020 2019 2020 2019 Three monthsSix months

Rental $315.7 $317.0 $635.6 $636.7 (0.4) %(0.2) %Revenue



Our calculation of same store rental revenue includes $12.9 million of rent deferred for future payment as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the Financial Accounting Standards Board (FASB). Our calculation of same store rental revenue also includes $35.9 million of uncollected rent from the second quarter of 2020 where we have not granted a lease concession. If these applicable amounts of rent deferrals and uncollected rent were excluded from our calculation of same store rental revenue, the decreases for the second quarter and first six months of 2020 would have been (14.1)% and (6.5)%, respectively.

Property DispositionsThe following summarizes our property dispositions (dollars in millions):

Three Months EndedSix Months Ended June 30, 2020 June 30, 2020

Properties sold 12 29

Net sales proceeds $ 7.4 $ 133.6

Gain on sales of real estate$ 1.3 $ 39.8

Liquidity and Capital Markets

Capital RaisingIn May 2020, we issued $600 million of 3.250% senior unsecured notes due January 2031. The public offering price for these notes was 98.987% of the principal amount, for an effective yield to maturity of 3.364%.

During the quarter ended June 30, 2020, we raised $98.1 million from the sale of common stock at a weighted average price of $63.07 per share, primarily through our At-The-Market-Program.

In July 2020, we issued $350 million of 3.250% senior unsecured notes due January 2031, which constituted a further issuance of, and formed a single series with, the $600 million senior notes issued in May 2020. The public offering price was 108.241% of the principal amount, for an effective yield to maturity of 2.341%.

Credit FacilityWe have a $3.0 billion unsecured revolving credit facility, with an initial term that expires in March 2023 (subject to two six-month options to extend). The revolving credit facility also has a $1.0 billion accordion feature, which is subject to obtaining lender commitments. As of June 30, 2020, the balance of borrowings outstanding under our revolving credit facility was $628.6 million, and we had a cash balance of $35.3 million.

Repayment of Term LoanIn June 2020, we repaid one of the $250.0 million senior term loans in full upon maturity.

2020 Acquisitions Guidance

On April 9, 2020 we withdrew our 2020 guidance that was provided on February 19, 2020 due the ongoing uncertainty regarding the impact of the COVID-19 pandemic and measures taken to limit its spread. We are reinstating guidance relating to our acquisition volume, which we currently estimate at $1.25 - $1.75 billion for 2020. We continue to evaluate the impacts of the COVID-19 pandemic on our business as the situation continues to evolve.

Conference Call Information

In conjunction with the release of our operating results, we will host a conference call on August 4, 2020 at 11:30 a.m. PT to discuss the results. To access the conference, dial (877) 701-6180 (United States) or (647) 689-4069 (International). When prompted, provide the conference ID 4181696.

A telephone replay of the conference call can also be accessed by calling (800) 585-8367 and entering the passcode 4181696. The telephone replay will be available through August 18, 2020. A live webcast will be available in listen-only mode by clicking on the webcast link on the company's home page or in the investors section at www.realtyincome.com.

A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. No access code is required for this replay.

Supplemental Materials

Supplemental materials on second quarter and year-to-date 2020 operating results, including reconciliations for non-GAAP measures, are available on our corporate website at www.realtyincome.com/investors/financial-information/quarterly-results.

About Realty Income

Realty Income, The Monthly Dividend Company(r), is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants. To date, the company has declared 601 consecutive common stock monthly dividends throughout its 51-year operating history and increased the dividend 107 times since Realty Income's public listing in 1994 (NYSE: O). The company is a member of the S&P 500 Dividend Aristocrats(r) index. Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical are "forward-looking" statements. Forward-looking statements involve known and unknown risks, which may cause the company's actual future results to differ materially from expected results. These risks include, among others, general economic conditions, domestic and foreign real estate conditions, tenant financial health, the availability of capital to finance planned growth, volatility and uncertainty in the credit markets and broader financial markets, changes in foreign currency exchange rates, property acquisitions and the timing of these acquisitions, charges for property impairments, the effects of the COVID-19 pandemic and the measures taken to limit its impact, the effects of pandemics or global outbreaks of contagious diseases or fear of such outbreaks, the company's tenants' ability to adequately manage its properties and fulfill their respective lease obligations to the company, and the outcome of any legal proceedings to which the company is a party, as described in the company's filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company's current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share amounts) (unaudited)



Three Months Three Months Six Months Six Months

Ended 6/30/20Ended 6/30/19Ended 6/30/20Ended 6/30/19

REVENUE

Rental (including reimbursable) ^ $410,201 $364,252 $822,358 $718,289 (1)

Other ^(2) 4,435 1,198 6,619 1,526

Total revenue 414,636 365,450 828,977 719,815



EXPENSES

Depreciation and 168,328 150,426 332,913 287,943 amortization

Interest 77,841 72,488 153,766 142,508

Property (including 26,452 21,342 52,058 42,978 reimbursable)

General and 19,063 18,585 40,027 33,693 administrative

Income taxes 2,838 1,155 5,601 2,600

Provisions for 13,869 13,061 18,347 17,733 impairment

Total expenses 308,391 277,057 602,712 527,455

Gain on sales of 1,323 6,891 39,829 14,154 real estate

Foreign currency and derivative 502 136 (1,062) 136 gains (losses), net

Loss on extinguishment of- - (9,819) - debt

Net income 108,070 95,420 255,213 206,650

Net income attributable to (246) (226) (562) (514) noncontrolling interests

Net income available to $107,824 $95,194 $254,651 $206,136 common stockholders



Funds from operations available to $288,338 $251,489 $565,441 $497,164 common stockholders (FFO)

Adjusted funds from operations available to $295,241 $253,935 $592,463 $502,669 common stockholders (AFFO)



Per share information for common stockholders:

Net income:

Basic and Diluted$0.31 $0.31 $0.75 $0.67



FFO:

Basic and Diluted$0.84 $0.81 $1.66 $1.62



AFFO:

Basic $0.86 $0.82 $1.74 $1.64

Diluted $0.86 $0.82 $1.74 $1.63



Cash dividends paid per common $0.699 $0.678 $1.392 $1.350 share



We recorded reserves as a reduction of rental revenue of $8.5 million (of which $2.1 million was related to straight-line rent receivables) for the^ second quarter of 2020, $417,000 for the second quarter of 2019, (1)$10.2 million (of which $2.8 million was related to straight-line rent receivables) for the six months ended June 30, 2020, and $2.4 million (of which $1.4 million was related to straight-line receivables) for the six months ended June 30, 2019.

The three and six months ended June 30, 2020 includes $1.4 million and $1.5 million, respectively, of interest income from short-term ^ investments and money market funds. The three and six months ended June (2)30, 2019 includes $166,000 and $296,000, respectively, of interest income from money market funds. There were no short-term investments in the three or six months ended June 30, 2019.

FUNDS FROM OPERATIONS (FFO) (dollars in thousands, except per share amounts)



We define FFO, a non-GAAP measure, consistent with Nareit's definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, reduced by gains on real estate sales.



Three Months Three Months Six Months Six Months

Ended 6/30/20Ended 6/30/19Ended 6/30/20Ended 6/30/19



Net income available to $ 107,824 $ 95,194 $ 254,651 $ 206,136 common stockholders

Depreciation and 168,328 150,426 332,913 287,943 amortization

Depreciation of furniture, (152) (147) (278) (302) fixtures and equipment

Provisions for 13,869 13,061 18,347 17,733 impairment

Gain on sales of (1,323) (6,891) (39,829) (14,154) real estate

FFO adjustments allocable to (208) (154) (363) (192) noncontrolling interests

FFO available to common $ 288,338 $ 251,489 $ 565,441 $ 497,164 stockholders

FFO allocable to dilutive 348 362 717 670 noncontrolling interests

Diluted FFO $ 288,686 $ 251,851 $ 566,158 $ 497,834



FFO per common share, basic and $ 0.84 $ 0.81 $ 1.66 $ 1.62 diluted



Distributions paid to common $ 240,470 $ 208,864 $ 474,294 $ 413,410 stockholders



FFO available to common stockholders in excess of $ 47,868 $ 42,625 $ 91,147 $ 83,754 distributions paid to common stockholders



Weighted average number of common shares used for FFO:

Basic 343,515,406 311,032,972 340,061,487 307,293,949

Diluted 344,148,378 311,785,281 340,744,384 308,000,806

ADJUSTED FUNDS FROM OPERATIONS (AFFO) (dollars in thousands, except per share amounts)



We define AFFO as FFO adjusted for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company'songoing operating performance. Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution).



Three Months Three Months Six Months Six Months

Ended 6/30/20Ended 6/30/19Ended 6/30/20Ended 6/30/19

Net income available to $ 107,824 $ 95,194 $ 254,651 $ 206,136 common stockholders ^(1)

Cumulative adjustments to 180,514 156,295 310,790 291,028 calculate FFO ^ (2)

FFO available to common 288,338 251,489 565,441 497,164 stockholders

Executive severance charge - - 3,463 - ^(3)

Loss on extinguishment of- - 9,819 - debt

Amortization of share-based 4,882 4,527 8,624 7,291 compensation

Amortization of deferred 1,476 1,133 2,836 2,173 financing costs ^ (4)

Amortization of net mortgage (356) (354) (710) (708) premiums

Loss on interest 1,306 686 1,992 1,364 rate swaps

Straight-line payments from 623 799 1,346 799 cross-currency swaps ^(5)

Leasing costs and(973) (707) (1,111) (1,030) commissions

Recurring capital(21) (116) (21) (172) expenditures

Straight-line (6,242) (7,230) (14,024) (12,092) rent

Amortization of above and 6,087 3,627 12,517 7,741 below-market leases, net

Other adjustments121 81 2,291 139 ^(6)

AFFO available to common $ 295,241 $ 253,935 $ 592,463 $ 502,669 stockholders

AFFO allocable to dilutive 356 368 732 - noncontrolling interests

Diluted AFFO $ 295,597 $ 254,303 $ 593,195 $ 502,669



AFFO per common share:

Basic $ 0.86 $ 0.82 $ 1.74 $ 1.64

Diluted $ 0.86 $ 0.82 $ 1.74 $ 1.63



Distributions paid to common $ 240,470 $ 208,864 $ 474,294 $ 413,410 stockholders



AFFO available to common stockholders in excess of $ 54,771 $ 45,071 $ 118,169 $ 89,259 distributions paid to common stockholders



Weighted average number of common shares used for AFFO:

Basic 343,515,406 311,032,972 340,061,487 307,293,949

Diluted 344,148,378 311,785,281 340,744,384 307,580,127



The three and six months ended June 30, 2020 includes $14.1 million of rent deferred as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient ^ provided by the FASB and $46.1 million of uncollected rent from the (1)second quarter for which we have not granted a lease concession. As of June 30, 2020, collection of the $60.2 million of unpaid rent is probable. Deferrals accounted for as modifications totaling $161,000 for the three and six months ended June 30, 2020 have not been added back to AFFO.

^ See FFO calculation on page eight for reconciling items. (2)

The executive severance charge represents the incremental costs incurred ^ upon our former CFO's departure in March 2020, consisting of $1.6 million(3)of cash, $1.8 million of share-based compensation expense and $58,000 of professional fees.

Includes the amortization of costs incurred and capitalized upon issuance of our notes payable, assumption of our mortgages payable and issuance of^ our term loans. The deferred financing costs are being amortized over the(4)lives of the respective notes payable, mortgages and term loans. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.

Straight-line payments from cross-currency swaps represent quarterly ^ payments in U.S. dollars received by us from counterparties in exchange (5)for associated foreign currency payments. These USD payments are fixed and determinable for the duration of the associated hedging transaction.

^ Includes adjustments allocable to noncontrolling interests, obligations (6)related to financing lease liabilities, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions.

HISTORICAL FFO AND AFFO (dollars in thousands, except per share amounts)



For the three months ended 2020 2019 2018 2017 2016 June 30,



Net income available to $107,824 $95,194 $96,380 $81,136 $69,045 common stockholders

Depreciation and amortization, net of 168,176 150,279 133,831 122,939 110,147 furniture, fixtures and equipment

Provisions for13,869 13,061 3,951 2,274 6,269 impairment

Gain on sales (1,323) (6,891) (7,787) (2,839) (8,658) of real estate

FFO adjustments allocable to (208) (154) (293) (238) (155) noncontrolling interests



FFO $288,338 $251,489 $226,082 $203,272 $176,648



FFO per $0.84 $0.81 $0.79 $0.75 $0.70 diluted share



AFFO $295,241 $253,935 $226,988 $208,388 $180,876



AFFO per $0.86 $0.82 $0.80 $0.76 $0.71 diluted share



Cash dividends$0.699 $0.678 $0.659 $0.633 $0.597 paid per share



Weighted average diluted shares344,148,378311,785,281285,372,256273,187,669254,254,243outstanding - FFO



Weighted average diluted shares344,148,378311,785,281285,372,256273,187,669253,937,221outstanding - AFFO



For the six months ended 2020 2019 2018 2017 2016 June 30,



Net income available to $254,651 $206,136 $179,543 $152,722 $132,518 common stockholders

Depreciation and amortization, net of 332,635 287,641 264,775 243,879 217,887 furniture, fixtures and equipment

Provisions for18,347 17,733 18,172 7,706 8,192 impairment

Gain on sales (39,829) (14,154) (11,005) (13,371) (10,948) of real estate

FFO adjustments allocable to (363) (192) (521) (453) (373) noncontrolling interests



FFO $565,441 $497,164 $450,964 $390,483 $347,276



FFO per $1.66 $1.62 $1.58 $1.46 $1.38 diluted share



AFFO $592,463 $502,669 $451,549 $409,723 $356,793



AFFO per $1.74 $1.63 $1.59 $1.53 $1.42 diluted share



Cash dividends$1.392 $1.350 $1.309 $1.257 $1.185 paid per share



Weighted average diluted shares340,744,384308,000,806284,924,336268,569,855252,073,685outstanding - FFO



Weighted average diluted shares340,744,384307,580,127284,924,336268,658,037252,378,957outstanding - AFFO

REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) (unaudited)



June 30, 2020December 31, 2019

ASSETS

Real estate held for investment, at cost:

Land $5,772,734 $5,684,034

Buildings and improvements 14,096,997 13,833,882

Total real estate held for investment, at 19,869,731 19,517,916 cost

Less accumulated depreciation and (3,367,420) (3,117,919) amortization

Real estate held for investment, net 16,502,311 16,399,997

Real estate and lease intangibles held for 40,551 96,775 sale, net

Cash and cash equivalents 35,345 54,011

Short-term investment 300,000 -

Accounts receivable 255,609 181,969

Lease intangible assets, net 1,508,177 1,493,383

Other assets, net 460,554 328,661

Total assets $19,102,547$18,554,796



LIABILITIES AND EQUITY

Distributions payable $81,384 $76,728

Accounts payable and accrued expenses 201,176 177,039

Lease intangible liabilities, net 322,744 333,103

Other liabilities 248,547 262,221

Line of credit payable 628,551 704,335

Term loans, net 249,258 499,044

Mortgages payable, net 394,816 410,119

Notes payable, net 6,602,152 6,288,049

Total liabilities 8,728,628 8,750,638



Commitments and contingencies



Stockholders' equity:

Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 345,023,421 and 333,619,106 13,704,121 12,873,849 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

Distributions in excess of net income (3,306,588) (3,082,291)

Accumulated other comprehensive loss (53,084) (17,102)

Total stockholders' equity 10,344,449 9,774,456

Noncontrolling interests 29,470 29,702

Total equity 10,373,919 9,804,158

Total liabilities and equity $19,102,547$18,554,796

Realty Income Performance vs. Major Stock Indices



Equity NASDAQ

Realty Income REIT Index^ (1) DJIA S&P 500 Composite

DividendTotal DividendTotal DividendTotal DividendTotal DividendTotal

yield return ^(2)yield return ^(3)yield return ^(3)yield return ^(3)yield return ^(4)



10/ 18 to 10.5% 10.8% 7.7% 0.0% 2.9% (1.6%) 2.9% (1.2%) 0.5% (1.7%) 12/ 31/ 1994

19958.3% 42.0% 7.4% 15.3% 2.4% 36.9% 2.3% 37.6% 0.6% 39.9%

19967.9% 15.4% 6.1% 35.3% 2.2% 28.9% 2.0% 23.0% 0.2% 22.7%

19977.5% 14.5% 5.5% 20.3% 1.8% 24.9% 1.6% 33.4% 0.5% 21.6%

19988.2% 5.5% 7.5% (17.5%) 1.7% 18.1% 1.3% 28.6% 0.3% 39.6%

199910.5% (8.7%) 8.7% (4.6%) 1.3% 27.2% 1.1% 21.0% 0.2% 85.6%

20008.9% 31.2% 7.5% 26.4% 1.5% (4.7%) 1.2% (9.1%) 0.3% (39.3%)

20017.8% 27.2% 7.1% 13.9% 1.9% (5.5%) 1.4% (11.9%) 0.3% (21.1%)

20026.7% 26.9% 7.1% 3.8% 2.6% (15.0%) 1.9% (22.1%) 0.5% (31.5%)

20036.0% 21.0% 5.5% 37.1% 2.3% 28.3% 1.8% 28.7% 0.6% 50.0%

20045.2% 32.7% 4.7% 31.6% 2.2% 5.6% 1.8% 10.9% 0.6% 8.6%

20056.5% (9.2%) 4.6% 12.2% 2.6% 1.7% 1.9% 4.9% 0.9% 1.4%

20065.5% 34.8% 3.7% 35.1% 2.5% 19.0% 1.9% 15.8% 0.8% 9.5%

20076.1% 3.2% 4.9% (15.7%) 2.7% 8.8% 2.1% 5.5% 0.8% 9.8%

20087.3% (8.2%) 7.6% (37.7%) 3.6% (31.8%) 3.2% (37.0%) 1.3% (40.5%)

20096.6% 19.3% 3.7% 28.0% 2.6% 22.6% 2.0% 26.5% 1.0% 43.9%

20105.1% 38.6% 3.5% 27.9% 2.6% 14.0% 1.9% 15.1% 1.2% 16.9%

20115.0% 7.3% 3.8% 8.3% 2.8% 8.3% 2.3% 2.1% 1.3% (1.8%)

20124.5% 20.1% 3.5% 19.7% 3.0% 10.2% 2.5% 16.0% 2.6% 15.9%

20135.8% (1.8%) 3.9% 2.9% 2.3% 29.6% 2.0% 32.4% 1.4% 38.3%

20144.6% 33.7% 3.6% 28.0% 2.3% 10.0% 2.0% 13.7% 1.3% 13.4%

20154.4% 13.0% 3.9% 2.8% 2.6% 0.2% 2.2% 1.4% 1.4% 5.7%

20164.2% 16.0% 4.0% 8.6% 2.5% 16.5% 2.1% 12.0% 1.4% 7.5%

20174.5% 3.6% 3.9% 8.7% 2.2% 28.1% 1.9% 21.8% 1.1% 28.2%

20184.2% 15.2% 4.4% (4.0%) 2.5% (3.5%) 2.2% (4.4%) 1.4% (3.9%)

20193.7% 21.1% 3.7% 28.7% 2.4% 25.3% 1.9% 31.5% 1.1% 35.2%

Q2 4.7% (17.3%) 4.0% (13.3%) 2.4% (8.4%) 1.9% (3.1%) 0.9% 12.1% 2020





Compound Average 15.3% 10.0% 10.1% 9.7% 10.5% Annual Total Return^ (5)



Note: All of these dividend yields are calculated as annualized dividends based on the last dividend paid in applicable time period divided by the closing price as of period end. Dividend yield sources: Nareit website and Bloomberg, except for the 1994 NASDAQ dividend yield which was sourced from Datastream / Thomson Financial.



^ FTSE Nareit US Equity REIT Index, as per Nareit website. (1)

Calculated as the difference between the closing stock price as of period^ end less the closing stock price as of previous period, plus dividends (2)paid in period, divided by closing stock price as of end of previous period. Does not include reinvestment of dividends for the annual percentages.

^ Includes reinvestment of dividends. Source: Nareit website and Factset. (3)

^ Price only index, does not include dividends as NASDAQ did not report (4)total return metrics for the entirety of the measurement period. Source: Factset.

All of these Compound Average Annual Total Return rates are calculated in the same manner for each period from Realty Income's NYSE listing on ^ October 18, 1994 through June 30, 2020, and (except for NASDAQ) assume (5)reinvestment of dividends. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future.

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SOURCE Realty Income Corporation