ESCONDIDO, Calif., Aug. 10 /PRNewswire/ -- Realty Income Corporation
(Realty Income), "The Monthly Dividend Company," (NYSE: O) today announced
operating results for the second quarter and six months ended June 30, 2000.
COMPANY HIGHLIGHTS:
(for the six months ended June 30, 2000)
- The monthly dividend amount was increased for the 11th consecutive
quarter
- Annualized dividends increased 4.3% from June 30, 1999 to June 30,
2000, to an annualized amount of $2.19 per share
- Revenue increased 16.2% to $56.8 million
- Funds from Operations (FFO) increased 2.5% to $32.8 million
- FFO per common share increased 3.4% to $1.23
- Realty Income repurchased 195,300 shares of its securities for
$4.1 million
Revenue Increases
Realty Income's revenue for the second quarter ended June 30, 2000
increased 14.1% to $28.4 million as compared to $24.9 million for the same
quarter ended June 30, 1999.
Revenue for the six months ended June 30, 2000 increased 16.2% to
$56.8 million from $48.9 million for the same period in 1999.
Funds from Operations
FFO for the quarter ended June 30, 2000 increased 1.9% to $16.3 million as
compared to $16.0 million for the same quarter in 1999. On a diluted per
common share basis, FFO increased 1.7% to $0.61 per share compared to
$0.60 per share for the same period in 1999.
FFO for the six months ended June 30, 2000 increased 2.5% to $32.8 million
as compared to $32.0 million for the same period one year ago. On a diluted
per common share basis, FFO increased 3.4% to $1.23 per share from $1.19 per
share for the same period in 1999.
FFO is a widely used measure of REIT performance that excludes gains or
losses on the sale of real estate assets and non-cash charges for depreciation
of real estate. FFO is one measure of a company's cash flow and of its
ability to pay dividends.
Net Income Available to Common Stockholders
Net income available to common stockholders for the quarter ended June 30,
2000 increased 6.1% to $10.4 million as compared to $9.8 million for the same
period in 1999. On a diluted per common share basis, net income increased
5.4% to $0.39 per share as compared to $0.37 per share for the three months
ended June 30, 1999.
Net income available to common stockholders for the six months ended
June 30, 2000 increased 6.1% to $20.9 million as compared to $19.7 million for
the same period in 1999. On a diluted per common share basis, this
represented a 5.4% increase to $0.78 per share as compared to $0.74 per share
for the same period one year ago.
Sources and Uses of Funds for Investment through 6/30/2000
Realty Income primarily utilized excess cash flow, after the payment of
dividends, to repurchase shares of the Company's securities. The Company
utilized the proceeds from the sale of a property and borrowings under its
acquisition credit facility to acquire properties during the quarter. Total
investments in new properties and share repurchases as of June 30, 2000 were
$20.9 million.
Property Acquisitions and Dispositions
Through June 30, 2000, the Company had invested $16.8 million in 3 new
properties and properties under development with an initial contractual lease
yield of 10.5%. The new properties are 100% leased with an initial average
lease length of 13.2 years. During the second quarter, Realty Income invested
$8.2 million in one new property and properties under development with an
initial contractual lease yield of 10.4%. The new property is 100% leased
with an initial average lease length of 9.7 years.
The Company also initiated its asset disposition program during the first
six months of 2000. The objective of this program is to sell assets when the
Company believes the reinvestment of the sales proceeds will generate higher
returns or enhance the credit quality of the Company's real estate portfolio.
Through June 30, 2000, Realty Income sold six properties for $3.5 million.
The Company anticipates selling up to $100 million of properties over the next
12 months for reinvestment into new property acquisitions. The Company's
portfolio of retail properties now consists of 1,073 properties located in
45 states, leased to 74 retail chains doing business in 23 retail industries.
Share Repurchase Activity
Realty Income continued to repurchase shares of the Company's stock
through the second quarter of 2000. As of June 30, 2000, the Company had
repurchased 181,000 shares of common stock at an average price of $21.28 per
share and 14,300 shares of its Class B preferred stock at an average price of
$19.27 per share, for a total investment of $4.1 million.
Dividend Information
On June 15, 2000, Realty Income announced the 11th consecutive quarterly
increase in the amount of the monthly dividend on its common stock. The
amount of the dividend was increased to $0.1825 per share from $0.18125 per
share. This represents an annualized dividend amount of $2.19 per share. The
Company paid six monthly dividends totaling $1.084 per common share through
June 30, 2000.
Realty Income also paid six monthly dividends totaling $1.187 per share on
its Class C preferred stock and two quarterly dividends totaling $1.172 per
share on its Class B preferred stock.
Portfolio Management Highlights
The Company's portfolio of quality retail real estate owned under 10- to
20-year net leases continues to perform well and provide dependable lease
revenue supporting the payment of monthly dividends. As of June 30, 2000,
Realty Income's property portfolio of 1,073 properties was 98.5% leased with
only 16 properties available for lease. During the first half of 2000 the
Company successfully resolved a situation involving the vacancy of 9 of its
properties leased to Econo Lube 'N Tune. This situation had nominal impact on
operating results during the first and second quarters of 2000.
During the third and fourth quarters of 2000, Realty Income anticipates
that it will have 11 properties come available for re-lease resulting from the
nonperformance of one of its other tenants. The Company anticipates a
successful resolution of this situation during the third and fourth quarters
of this year. Realty Income anticipates a net impact of less than 1/2 of
1% on total lease revenue once the situation has been resolved.
Same store rents on the 918 properties under lease during the three months
ended June 30, 2000 and 1999 increased 0.9% to $23.0 million from
$22.8 million in 1999. Same store rents on the 918 properties under lease
during the six months ended June 30, 2000 and 1999 increased 1.3% to
$46.3 million compared to $45.7 million in 1999.
Other Activities
Crest Net Lease Inc., a newly formed subsidiary focused on marketing
net-leased properties for sale, acquired 6 properties for $17.4 million during
the second quarter. Through June 30, 2000, Crest has invested $20.5 million
in properties held for sale. Those properties are now being actively marketed
for sale.
Tom A. Lewis, Chief Executive Officer, stated, "We continue to make steady
progress towards achieving our business objectives for 2000. We have
initiated an asset disposition program to sell in excess of $100 million of
real estate assets to strategically re-deploy in new net-leased properties.
At the same time we have made excellent progress with our new subsidiary,
Crest Net Lease, in acquiring assets to be marketed during the second half of
the year. We anticipate that Crest Net Lease will positively contribute to
Realty Income's FFO growth in 2000 and 2001. We believe these activities will
allow us to continue to grow our revenue, FFO and dividends in a capital
constrained environment."
Forward-Looking Statements
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 income is supported by the cash flows from
1,080 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 and six months ended June 30, 2000 and 1999
(dollars in thousands, except per share amounts)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/00 6/30/99 6/30/00 6/30/99
REVENUE
Rental $28,349 $24,864 $56,679 $48,812
Interest and other 92 38 117 76
28,441 24,902 56,796 48,888
EXPENSES
Interest 7,471 6,045 14,629 11,925
Depreciation and
amortization 6,844 6,237 13,592 12,327
General and
administrative 1,735 1,755 3,419 3,401
Property 466 437 981 878
16,516 14,474 32,621 28,531
Income from operations 11,925 10,428 24,175 20,357
Gain on sales
of properties 938 -- 1,600 --
Net income 12,863 10,428 25,775 20,357
Preferred stock
dividends (2,428) (629) (4,856) (629)
Net income available to
common stockholders $10,435 $9,799 $20,919 $19,728
Funds from
operations (FFO) $16,306 $16,014 $32,843 $32,012
Basic and diluted
per share information for
common stockholders:
Income from
operations $0.36 $0.37 $0.72 $0.74
Net income 0.39 0.37 0.78 0.74
FFO 0.61 0.60 1.23 1.19
Cash dividends paid 0.5438 0.5175 1.0838 1.0275
Weighted average number
of common shares used for:
Basic per share
computation 26,703,319 26,822,370 26,759,355 26,822,376
Diluted per share
computation 26,717,992 26,827,338 26,768,843 26,826,291
FUNDS FROM OPERATIONS
(dollars in thousands)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/00 6/30/99 6/30/00 6/30/99
Net income available to
common stockholders
$10,435 $9,799 $20,919 $19,728
Plus depreciation and
amortization 6,844 6,237 13,592 12,327
Less:
Depreciation of furniture,
fixtures and equipment
and amortization of
organization costs (35) (22) (68) (43)
Gain on sales of
properties (938) -- (1,600) --
Funds from operations $16,306 $16,014 $32,843 $32,012
Dividends paid to
common stockholders $14,534 $13,881 $29,018 $27,560
FFO in excess of
dividends $1,772 $2,133 $3,825 $4,452
CONSOLIDATED BALANCE SHEETS
As of June 30, 2000 and December 31, 1999
(dollars in thousands, except per share data)
2000 1999
ASSETS
Real estate, at cost:
Land $340,875 $338,489
Buildings and improvements 690,771 678,763
1,031,646 1,017,252
Less accumulated depreciation
and amortization (191,831) (179,421)
Net real estate held for investment 839,815 837,831
Real estate held for sale, net 49,812 29,262
Net real estate 889,627 867,093
Cash and cash equivalents 2,449 773
Accounts receivable 3,048 3,407
Goodwill, net 18,591 19,053
Other assets 14,677 15,078
Total assets $928,392 $905,404
LIABILITIES AND STOCKHOLDERS' EQUITY
Distributions payable $4,865 $4,828
Accounts payable and accrued expenses 4,845 12,792
Other liabilities 3,526 3,753
Lines of credit payable 162,300 119,200
Notes payable 230,000 230,000
Total liabilities 405,536 370,573
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 99,368 99,679
Common stock and paid in capital, par value
$1.00 per share, 100,000,000 shares
authorized, 26,656,870 and 26,822,164
shares issued and outstanding in 2000
and 1999, respectively 633,083 636,611
Distributions in excess of net income (209,595) (201,459)
Total stockholders' equity 522,856 534,831
Total liabilities and
stockholders' equity $928,392 $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 June 30, 2000
Rental Percentage Percentage of Total Revenue
Revenue of Total 1999 1998 1997
Industry
Apparel Stores $2,799 2.4% 3.8% 4.1% 0.7%
Automotive Parts 10,114 8.8 8.6 7.8 9.1
Automotive Service 6,781 5.9 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 28,124 24.6 25.3 29.2 35.9
Consumer Electronics 5,699 5.0 4.4 5.4 6.5
Convenience Stores 9,815 8.6 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 3,950 3.4 0.6 0.1 --
Home Furnishings 6,614 5.8 6.5 7.8 5.6
Home Improvement 4,033 3.5 3.6 * --
Office Supplies 2,476 2.2 2.6 3.0 1.7
Pet Supplies & Services 1,631 1.4 1.1 0.6 0.2
Private Education 1,698 1.5 1.2 0.9 --
Restaurants 14,268 12.5 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 3.9 4.3 3.8 0.6
Other 3,771 3.3 5.7 6.0 7.3
Totals $114,512 100.0% 100.0% 100.0% 100.0%
* Less than 0.1%
(1) Annualized Rent is calculated by multiplying the monthly contractual
base rent as of June 30, 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 June 30, 2000, classified according to the retail business
types and the level of services they provide (dollars in thousands):
Number of Annualized Percentage of
Properties Rent (1) Annualized Rent
Industry
TENANTS PROVIDING SERVICES
Automotive Service 101 $6,715 5.9%
Child Care 336 28,124 24.6
Entertainment 6 2,293 2.0
Health & Fitness 7 3,950 3.4
Private Education 6 1,698 1.5
Theaters 2 2,406 2.1
Other 10 3,773 3.3
468 48,959 42.8
TENANTS SELLING GOODS
AND SERVICES
Automotive Parts 64 5,505 4.8
Business Services 1 124 0.1
Convenience Stores 103 9,815 8.6
Home Improvement 21 2,655 2.3
Pet Supplies & Services 6 1,163 1.0
Restaurants 175 14,268 12.5
Video Rental 35 4,510 3.9
405 38,040 33.2
TENANTS SELLING GOODS
Apparel Stores 4 2,799 2.4
Automotive Parts 80 4,675 4.0
Book Stores 1 450 0.4
Consumer Electronics 37 5,699 5.0
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 35 6,614 5.8
Home Improvement 13 1,377 1.2
Office Supplies 8 2,476 2.2
Pet Supplies 2 467 0.4
Shoe Stores 4 890 0.8
200 27,513 24.0
Totals 1,073 $114,512 100.0%
(1) Annualized Rent is calculated by multiplying the monthly contractual
base rent as of June 30, 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 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/Investing/News.html
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