Property Acquisitions Exceed $50 Million at 10.0% Lease Rate Funds from
Operations Increased 23.4%
ESCONDIDO, Calif., Aug. 4 /PRNewswire/ -- Realty Income Corporation
(Realty Income) (NYSE: O) today announced the Company achieved further
improvements in operating results for the second quarter ended June 30, 1998.
Funds from Operations (FFO) increased 23.4% to $15.3 million from $12.4
million for the same quarter one year ago. On a diluted per share basis, FFO
increased 5.6% to $0.57 per share compared to $0.54 for the same quarter in
1997. Industry analysts generally consider FFO, as defined by the National
Association of Real Estate Investment Trusts (NAREIT), to be an appropriate
measure of performance for an equity REIT. Net income increased 27.2% to
$10.3 million as compared to $8.1 million for the same quarter in 1997. On a
diluted per share basis this represented an 8.6% increase to $0.38 per share
as compared to $0.35 per share for the same period one year ago.
SECOND QUARTER HIGHLIGHTS:
* $50 million invested in new properties with an initial lease yield of
10.0%
* 29% increase in acquisition dollar volume as compared to second quarter
1997
* Acquisition of 44 properties located in 20 states
* FFO increased by 23.4% to $15.3 million
* FFO per share increased by 5.6% to $0.57 per share
* Net income increased by 27.2% to $10.3 million
* Net income per share increased by 8.6% to $0.38 per share
* Monthly dividend increase to $0.1650 per share was announced in June,
the third consecutive quarterly increase
During the second quarter, Realty Income invested $50.2 million in new
properties and properties under development with an initial contractual lease
yield of 10.0%. The Company acquired 44 properties, containing approximately
300,700 leasable square feet, which are located in 20 states. The properties
are 100% leased with an average lease term of 14.4 years. In addition, the
Company further diversified its real estate portfolio by adding properties
from five new retail chains during the quarter.
Commenting on the Company's performance, Tom A. Lewis, Chief Executive
Officer, stated, "The first half of 1998 has been a productive and successful
period for us. We are benefiting from the combination of our unique retail
and real estate research capabilities that have facilitated the discovery of
new industry and retail opportunities ahead of our competitors. We are also
experiencing the positive effects of our intensified efforts to build and
maintain a strong acquisition pipeline. As a result, we have been able to
report significant growth in the size of our real estate portfolio and
earnings since the beginning of the year."
For the six months ended June 30, 1998, FFO increased 21.4% to $30.1
million versus $24.8 million for the same period one year ago. On a diluted
per share basis, FFO increased 5.6% to $1.14 as compared to $1.08 for the same
period in 1997. Net income for the first half of the year increased 23.9% to
$20.2 million as compared to $16.3 million for the same period in 1997. On a
diluted per share basis, net income increased 8.5% to $0.77 as compared to
$0.71 for the same six month period in 1997.
Year-to-date, Realty Income has invested $102.0 million in new properties
and properties under development, with an initial contractual lease yield of
10.3%. The Company has acquired 66 properties, containing approximately
657,300 leasable square feet, located in 29 states. The properties are 100%
leased with an average lease length of 14.8 years. During the first half of
the year Realty Income added two new industries and 11 new retailers to its
real estate portfolio. The Company's portfolio of properties now consists of
895 properties leased to 55 separate retail chains doing business in 15
different retail segments.
Same store rents on 717 properties owned during both the three months
ended June 30, 1998 and 1997, increased 1.3% to $15.17 million compared to
$14.97 million in 1997. For the six months ended June 30, 1998, same store
rents increased 1.1% to $30.40 million as compared to $30.08 million in 1997.
Realty Income owns and actively manages a portfolio of 895 commercial
properties in 43 states. By purchasing the freestanding retail store
locations of regional and national chain store operators and then leasing the
locations back to them, Realty Income provides retailers with the opportunity
to free up financial resources for expansion. The Company's acquisition and
investment activities are concentrated in highly specific target markets and
focus primarily on middle and upper market retailers providing goods and
services which satisfy basic consumer needs.
CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended June 30, 1998 and 1997
(dollars in thousands, except per share data)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/98 6/30/97 6/30/98 06/30/97
REVENUE
Rental $20,343 $16,006 $39,511 $31,455
Interest and other 24 117 78 148
20,367 16,123 39,589 31,603
EXPENSES
Depreciation and
amortization 5,369 4,484 10,453 8,948
General and
administrative 1,711 1,332 3,176 2,585
Property 426 362 899 853
Interest 2,864 2,009 5,355 3,321
Provision for
impairment losses -- 70 -- 70
10,370 8,257 19,883 15,777
Income from
operations 9,997 7,866 19,706 15,826
Gain on sales
of properties 311 202 526 427
NET INCOME $10,308 $8,068 $20,232 $16,253
FFO $15,326 $12,407 $30,080 $24,820
Dividends Paid 13,083 10,861 25,545 21,722
Basic and Diluted
Per Share Information
Income from
Operations $0.37 $0.34 $0.75 $0.69
Net Income 0.38 0.35 0.77 0.71
FFO 0.57 0.54 1.14 1.08
Cash Dividends Paid 0.488 0.473 0.968 0.945
Weighted average
number of shares
used for basic per
share computation 26,836,730 22,987,650 26,434,892 22,987,173
Weighted average
number of shares
used for diluted per
share computation 26,845,091 22,990,592 26,442,519 22,990,163
CONSOLIDATED BALANCE SHEETS
June 30, 1998 and December 31, 1997
(dollars in thousands, except per share data)
1998 1997
ASSETS
Real estate, at cost:
Land $249,911 $214,342
Buildings and improvements 548,271 485,455
798,182 699,797
Less - Accumulated
depreciation and
amortization (160,648) (152,206)
Net real estate 637,534 547,591
Cash and cash equivalents 3,116 2,123
Accounts receivable 1,490 2,888
Due from affiliates 336 348
Other assets 3,106 3,170
Goodwill, net 20,439 20,901
TOTAL ASSETS $666,021 $577,021
LIABILITIES AND STOCKHOLDERS'
EQUITY
Distributions payable $4,428 $4,112
Accounts payable and
accrued expenses 2,649 2,180
Other liabilities 4,582 4,814
Lines of credit payable 87,900 22,600
Notes payable 110,000 110,000
TOTAL LIABILITIES 209,559 143,706
Stockholders' equity
Preferred stock, par value
$1.00 per share, 20,000,000
shares authorized, no shares
issued or outstanding -- --
Common stock, par value
$1.00 per share, 100,000,000
shares authorized, 26,836,964
and 25,698,464 shares issued
and outstanding in 1998 and
1997, respectively 26,837 25,698
Paid in capital in excess of
par value 610,087 582,450
Accumulated distributions in
excess of net income (180,462) (174,833)
TOTAL STOCKHOLDERS' EQUITY 456,462 433,315
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $666,021 $577,021
The following table represents Realty Income's rental revenue by industry
(dollars in thousands):
Annualized (a)
Rent as of Six Months Ended Six Months Ended
July 1, 1998 June 30, 1998 June 30, 1997
Rental Percentage Rental Percentage Rental Percentage
Industry Revenue of Total Revenue of Total Revenue of Total
Apparel Stores $3,927 4.5% $1,497 3.8% $-- --%
Automotive Parts 7,398 8.4 2,745 6.9 2,906 9.3
Automotive Service 6,742 7.7 3,076 7.8 1,897 6.0
Book Stores 450 0.5 225 0.6 152 0.5
Child Care 24,502 27.9 11,920 30.2 11,779 37.4
Consumer
Electronics 4,432 5.1 2,320 5.9 2,114 6.7
Convenience Stores 5,301 6.0 2,401 6.1 1,602 5.1
Health and Fitness 360 0.4 -- -- -- --
Home Furnishings 8,065 9.2 2,752 7.0 1,543 4.9
Office Supplies 2,476 2.8 1,256 3.2 239 0.8
Pet Supplies
& Services 435 0.5 136 0.3 8 --
Private Education 1,000 1.1 271 0.6 -- --
Restaurant 13,902 15.9 6,804 17.2 6,768 21.5
Shoe Stores 529 0.6 247 0.6 -- --
Video Rental 3,315 3.8 1,367 3.5 -- --
Other 4,895 5.6 2,494 6.3 2,447 7.8
Total $87,729 100% $39,511 100% $31,455 100%
(a) Annualized rent is calculated by multiplying the monthly contracted
base rent as of July 1, 1998 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
specific level). For properties under construction, an estimated
contractual base rent is used based upon the estimated total costs of each
property.
SOURCE Realty Income Corporation
 back to top
Related links:
http://www.realtyincome.com
CONTACT:
Gary Malino, Sr. Vice President, Chief
Financial Officer, 760-741-2111, ext. 142, or Tere Miller, Vice
President, Investor Relations, 760-741-2111, ext. 177, both of
Realty Income Corporation
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.
|
