ESCONDIDO, Calif., April 27 /PRNewswire/ -- Realty Income Corporation
(Realty Income) (NYSE: O), "The Monthly Dividend Company," today announced
operating results for the first quarter ended March 31, 2000.
SUMMARY OF FIRST QUARTER ACTIVITIES:
-- The monthly dividend was increased, for the tenth consecutive quarter,
to $0.1813 per share or $2.175 on an annualized basis
-- Funds from Operations (FFO) increased 3.1% to $16.5 million
-- Funds from Operations per common share increased 3.3% to $0.62
-- Revenue increased 18.3% to $28.4 million
-- Realty Income repurchased 123,200 shares of its securities for
$2.5 million (through April 26, 2000).
Funds From Operations for the Quarter ended 3/31/2000
FFO for the quarter ended March 31, 2000 increased 3.1% to $16.5 million
as compared to $16.0 million for the same period one year ago. On a diluted
per common share basis, FFO increased 3.3% to $0.62 per share compared to
$0.60 for the same period in 1999.
FFO is a widely used measure of REIT performance that excludes gains or
losses on the sale of assets and non-cash charges for depreciation of real
estate assets. FFO is one measure of a company's cash flow and of its ability
to pay dividends.
Net Income Available to Common Stockholders for the Quarter ended
3/31/2000
Net income available to common stockholders for the quarter increased
6.1% to $10.5 million as compared to $9.9 million for the same quarter in
1999. On a diluted per common share basis, net income available to common
stockholders increased 5.4% to $0.39 per share as compared to $0.37 per share
for the same period in 1999.
Revenue Increases for the Quarter ended 3/31/00
Realty Income's total revenue, for the quarter ended March 31, 2000,
increased 18.3% to $28.4 million as compared to $24.0 million for the same
period in 1999. The Company's portfolio of quality retail real estate owned
under 10-20 year net leases continues to perform well and provide dependable
lease revenue supporting the payment of monthly dividends.
Same store rents on the 923 properties leased during both the three months
ended March 31, 2000 and 1999, increased 1.4% to $23.34 million compared to
$23.02 million in 1999.
Sources and Uses of Funds for Investment during First Quarter, 2000
Realty Income primarily utilized excess cash flow, after the payment of
dividends, to repurchase shares of the Company's securities. The Company also
utilized borrowings under its acquisition credit facility to acquire
properties during the quarter. Total investments in new properties and share
repurchases were $9.6 million.
Property Acquisitions and Dispositions
Through March 31, 2000, the Company had invested $8.7 million in two new
properties and properties under development with an initial contractual lease
yield of 10.7%. The new properties are 100% leased with an initial average
lease length of 15.0 years. The Company's portfolio of retail properties now
consists of 1,077 properties located in 45 states, leased to 72 retail chains
doing business in 23 different retail industries.
During the quarter, Realty Income also began to focus on harvesting its
real estate assets with an eye toward generating additional capital for
investment or enhancing the credit quality of its real estate portfolio.
Through March 31, 2000 Realty Income sold one property for $1.4 million and
identified approximately $42.9 million in properties to be offered for sale
with the proceeds to be reinvested into additional properties during the
second and third quarters of 2000.
Share Repurchase Activity
In January 2000 Realty Income announced a $10 million securities buyback
program. Pursuant to that announcement, through March 31, 2000, the Company
had repurchased 32,300 shares of common stock at an average price of
$20.90, and 14,300 shares of is Class B preferred stock at an average price of
$19.27, for a total investment of $950,500. Through April 26, 2000, the
Company had invested a total of $2.5 million in the repurchase of 123,200
shares of Realty Income securities.
Dividend Information
During the quarter, Realty Income announced the tenth consecutive
quarterly increase in the amount of the monthly dividend on shares of its
common stock. The amount of the dividend was increased to $0.1813 per share
from $0.1800 for an annualized dividend of $2.175 per share. The Company also
paid three monthly dividends totaling $0.54 per common share during the
quarter.
Realty Income also paid three monthly dividends totaling $0.5937 per share
on its Class C preferred stock and one quarterly dividend in the amount of
$0.5859 per share on its Class B preferred stock.
Commenting on the Company's activities, Tom A. Lewis, Chief Executive
Officer, stated,
"We are pleased with the progress we have made during the first quarter of
2000. We have initiated a number of plans to provide for sources of
investment capital during the year, as well as providing for the continued
growth of your company. In addition to managing a billion dollar real estate
portfolio generating sizeable lease revenue, we have implemented asset
disposition, share repurchase and subsidiary task force programs focused on
uncovering new business opportunities that should afford new investment
capital and new sources of cash flow on an ongoing basis.
"During 2000 we anticipate increases in funds from operations, similar to
1999 levels, that should be achieved through a combination of rental
increases, share repurchases and incremental increases in revenue from the
addition of new retail properties. We also anticipate modest growth in the
size of our real estate portfolio during the year and plan to utilize proceeds
from asset sales to fund acquisitions. Toward that end, we have identified a
number of properties that fit our criteria for property sales and plan to make
progress in this area throughout the year."
Other Activities
Crest Net Lease, Inc., a subsidiary focused on marketing net-leased
investments for sale, was formed in January 2000. Realty Income invested
$2.8 million in this company to fund investing opportunities and operating
costs. Crest Net Lease began actively pursuing properties for investment
during the first quarter. Through March 31, 2000 Crest Net Lease had invested
$3.1 million in real estate to be marketed for sale. Crest Net Lease has also
made commitments to invest an additional $16.2 million for the purchase of
several other retail properties that will also be actively marketed during the
year of 2000.
Forward-Looking Statement
Statements in this press release, which are not strictly historical, are
"forward-looking" statements. Forward-looking statements involve known and
unknown risks, which may cause the Company's actual results in the future to
differ materially from expected results. These risks include, among others,
the profitability of the Company's subsidiary, Crest Net Lease, general
economic conditions, local real estate conditions, and the availability of
capital to finance planned growth, as described in the Company's filings with
the Securities and Exchange Commission. Consequently, such 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.
Realty Income is "The Monthly Dividend Company," a New York Stock Exchange
real estate company dedicated to providing shareholders with dependable
monthly income. The monthly dividend is supported by the cash flows from
1,077 retail properties owned under long-term lease agreements with leading
regional and national retail chains. The Company is an active buyer of
net-leased retail properties nationwide.
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 2000 and 1999
(dollars in thousands, except per share amounts)
2000 1999
REVENUE
Rental $28,330 $23,948
Loss from unconsolidated
subsidiary (70) --
Other revenue from
unconsolidated subsidiary 36 --
Interest and other 59 38
28,355 23,986
EXPENSES
Depreciation and
amortization 6,748 6,090
Interest 7,158 5,880
General and
administrative 1,684 1,646
Property 515 441
16,105 14,057
Income from operations 12,250 9,929
Gain on sale
of property 662 --
Net Income 12,912 9,929
Preferred stock dividends (2,428) --
Net income available to
common stockholders $10,484 $ 9,929
Basic and diluted per share
per share information for
common stockholders:
Income from operations $ 0.37 $ 0.37
Net income 0.39 0.37
Funds from operations (FFO) 0.62 0.60
Cash dividends paid 0.54 0.51
Weighted average number
of shares used for:
Basic per share
computation 26,815,391 26,822,382
Diluted per share
computation 26,816,928 26,825,412
FUNDS FROM OPERATIONS
For the three months ended March 31, 2000 and 1999
(dollars in thousands)
2000 1999
Net income available
to common stockholders $10,484 $ 9,929
Plus depreciation and
amortization 6,748 6,090
Less:
Depreciation of furniture,
fixtures and equipment (33) (21)
Gain on sale of
property (662) --
Funds from operations $16,537 $15,998
Distributions paid to
common stockholders $14,484 $13,679
FFO in excess of
distributions $ 2,053 $ 2,319
CONSOLIDATED BALANCE SHEETS
As of March 31, 2000 and December 31, 1999
(dollars in thousands, except per share data)
2000 1999
ASSETS
Real estate, at cost:
Land $ 351,708 $ 350,517
Buildings and improvements 718,416 711,962
1,070,124 1,062,479
Less accumulated depreciation
and amortization (201,520) (195,386)
Net real estate 868,604 867,093
Investment in unconsolidated subsidiary 2,780 --
Cash and cash equivalents 2,103 773
Accounts receivable 3,180 3,407
Goodwill, net 18,822 19,053
Other assets 15,403 15,078
Due from affiliates 829 --
Total assets $ 911,721 $ 905,404
LIABILITIES AND STOCKHOLDERS' EQUITY
Distributions payable $ 4,856 $ 4,828
Accounts payable and accrued expenses 6,206 12,792
Other liabilities 3,841 3,753
Lines of credit payable 136,900 119,200
Notes payable 230,000 230,000
Total liabilities 381,803 370,573
Stockholders' equity:
Preferred stock and paid in capital, par value
$1.00 per share, 20,000,000 shares
authorized, 4,125,700 and 4,140,000
shares issued and outstanding in 2000
and 1999, respectively 99,403 99,679
Common stock and paid in capital, par value
$1.00 per share, 100,000,000 shares
authorized, 26,793,470 and 26,822,164
shares issued and outstanding in 2000
and 1999, respectively 636,002 636,611
Distributions in excess of net income (205,487) (201,459)
Total stockholders' equity 529,918 534,831
Total liabilities and
stockholders' equity $ 911,721 $ 905,404
The following table sets forth certain information regarding our
properties classified according to the business of the respective tenants
(dollars in thousands):
Annualized (1)
Rent as of March 31, 2000
Rental Percentage Percentage of Total Revenue
Industry Revenue of Total 1999 1998 1997
Apparel Stores $ 2,799 2.4% 3.8% 4.1% 0.7%
Automotive Parts 10,107 8.6 8.6 7.8 9.1
Automotive Service 6,645 5.7 6.6 7.5 6.4
Book Stores 450 0.4 0.5 0.6 0.5
Business Services 124 0.1 0.1 * --
Child Care 28,323 24.2 25.3 29.2 35.9
Consumer Electronics 5,717 4.9 4.4 5.4 6.5
Convenience Stores 9,815 8.4 7.2 6.1 5.5
Crafts & Novelties 425 0.4 0.4 * --
Drug Stores 235 0.2 0.2 0.1 --
Entertainment 2,293 2.0 1.2 -- --
General Merchandise 687 0.6 0.6 * --
Grocery Stores 719 0.6 0.5 * --
Health & Fitness 3,966 3.4 0.6 0.1 --
Home Furnishings 6,085 5.2 6.5 7.8 5.6
Home Improvement 4,274 3.6 3.6 * --
Office Supplies 2,476 2.1 2.6 3.0 1.7
Pet Supplies & Services 1,673 1.4 1.1 0.6 0.2
Private Education 1,695 1.4 1.2 0.9 --
Restaurants 14,349 12.2 13.3 16.2 19.8
Shoe Stores 890 0.8 1.1 0.8 0.2
Theaters 2,406 2.1 0.6 -- --
Video Rental 4,510 3.8 4.3 3.8 0.6
Other 6,501 5.5 5.7 6.0 7.3
Totals $117,164 100.0% 100.0% 100.0% 100.0%
* Less than 0.1%
(1) Annualized Rent is calculated by multiplying the monthly contractual
base rent as of March 31, 2000 for each of the properties by 12, and
adding the previous twelve month's historic percentage rent, which
totaled $1.7 million, (i.e., additional rent calculated as a percentage
of the tenant's gross sales above a specified level). For the properties
under construction, an estimated contractual base rent is used based upon
the estimated total costs of each property.
The following table sets forth certain information regarding our
properties as of March 31, 2000, classified according to the retail
business types and the level of services they provide (dollars in
thousands):
Number of Percentage of
Industry Properties Annualized Annualized
Rent(1) Rent
TENANTS PROVIDING SERVICES
Automotive Service 104 $6,645 5.7%
Child Care 336 28,323 24.2
Entertainment 6 2,293 2.0
Health & Fitness 7 3,966 3.4
Other 10 6,502 5.5
Private Education 6 1,695 1.4
Theaters 2 2,406 2.0
471 51,830 44.2
TENANTS SELLING GOODS AND SERVICES
Automotive Parts 62 5,404 4.6
Business Services 1 124 0.1
Convenience Stores 104 9,815 8.4
Home Improvement 20 2,619 2.2
Pet Supplies & Services 6 1,205 1.0
Restaurants 176 14,349 12.3
Video Rental 35 4,510 3.9
404 38,026 32.5
TENANTS SELLING GOODS
Apparel Stores 4 2,799 2.4
Automotive Parts 82 4,703 4.0
Book Stores 1 450 0.4
Consumer Electronics 37 5,717 4.9
Craft & Novelty 2 425 0.4
Drug Stores 1 235 0.2
General Merchandise 11 687 0.6
Grocery Stores 2 719 0.6
Home Furnishings 34 6,085 5.2
Home Improvement 14 1,655 1.4
Office Supplies 8 2,476 2.1
Pet Supplies 2 467 0.4
Shoe Stores 4 890 0.7
202 27,308 23.3
Totals 1,077 $117,164 100.0%
(1) Annualized Rent is calculated by multiplying the monthly contractual
base rent as of March 31, 2000 for each of the properties by 12, and
adding the previous twelve month's historic percentage rent, which totaled
$1.7 million, (i.e., additional rent calculated as a percentage of the
tenant's gross sales above a specified level). For the properties under
construction, an estimated contractual base rent is used based upon the
estimated total costs of each property.
SOURCE Realty Income Corporation
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Related links:
http://www.realtyincome.com
CONTACT:
Tere H. Miller, Vice President, Corporate
Communications of Realty Income Corporation, 760-741-2111 ext.
177
NOTE TO EDITORS: Realty Income press releases are available at no
charge by calling our toll-free investor hotline number:
888-811-2001, or through the internet at
http://www.realtyincome.com.
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