SAN DIEGO, May 6, 2024 /PRNewswire/ -- Realty Income Corporation ((Realty Income, NYSE:O), The Monthly Dividend Company®, today announced operating results for the three months ended March 31, 2024. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise. "I am pleased with our first quarter results, as we continue to strengthen our role as real estate partner to the world's leading companies," said Sumit Roy, Realty Income's President and Chief Executive Officer. "We remain a highly selective capital allocator based on available product that meets our stringent long-term, risk-adjusted return hurdles. During the quarter, we completed $598 million of investment volume at an initial weighted average cash yield of 7.8%. Approximately 54% of total investment volume was in the U.K. and Europe at an initial weighted average cash yield of 8.2%. International growth continues to be a differentiating avenue for Realty Income to generate accretive earnings growth as our unique platform allows us to partner with best-in-class clients in a highly fragmented net lease market." COMPANY HIGHLIGHTS: For the three months ended March 31, 2024: Net income available to common stockholders was $129.7 million, or $0.16 per share AFFO available to common stockholders was $862.9 million, or $1.03 per share On January 23, 2024, closed on our previously announced stock-for-stock merger with Spirit Realty Capital, Inc. ("Spirit") Excluding our merger with Spirit, we invested $598.0 million at an initial weighted average cash yield of 7.8% Raised $550.1 million from the sale of common stock, primarily through our At-The-Market (ATM) program, at a weighted average price of $56.93 Net Debt and Preferred Stock to Annualized Pro Forma Adjusted EBITDAre was 5.5x Issued $450.0 million of 4.750% senior unsecured notes due February 2029 and $800.0 million of 5.125% senior unsecured notes due February 2034, for which proceeds were used to repay $1.1 billion of senior unsecured notes and mortgages upon maturity Event subsequent to March 31, 2024: In April 2024, a $33.0 million secured loan to an operator of Emagine Theaters, assumed in the Spirit merger, was repaid in full CEO Comments "Given the health of our balance sheet and ample liquidity, which was further bolstered by a well-timed $1.25 billion bond offering in January, we continue to emphasize that our unchanged $2.0 billion investments guidance for the year requires no new external capital. Following closing of the Spirit merger, our annualized adjusted free cash flow(1) of approximately $825 million is a competitive advantage that increasingly positions us to self-fund our external growth." "Underpinning the health of our balance sheet is continued stability in our high-quality portfolio. In the first quarter, occupancy remains stable at 98.6%, we delivered a rent recapture rate of 104.3% on properties re-leased, and we generated same store rental revenue growth of 0.8%. We believe our diversified portfolio of investments generates consistent recurring cash flow to support dependable monthly dividends that grow over time. In March, we announced our 124th common stock monthly dividend increase since Realty Income's listing on the NYSE in 1994. Dependable total operational returns with limited downside earnings volatility continues to be core to our investment proposition for our shareholders." (1) Annualized Adjusted Free Cash Flow is a non-GAAP financial measure. Please see the Glossary for our definition and an explanation of how we utilize this measure. Select Financial Results The following summarizes our select financial results (dollars in millions, except per share data). Three months ended March 31, 2024 2023 Total revenue $                                            1,260.5 $                                               944.4 Net income available to common stockholders (1) (2) $                                               129.7 $                                               225.0 Net income per share $                                                 0.16 $                                                 0.34 Funds from operations available to common stockholders (FFO) (3) $                                               785.7 $                                               684.3 FFO per share $                                                 0.94 $                                                 1.03 Normalized funds from operations available to common stockholders (Normalized FFO) (3) $                                               879.8 $                                               685.6 Normalized FFO per share $                                                 1.05 $                                                 1.04 Adjusted funds from operations available to common stockholders (AFFO) (3) $                                               862.9 $                                               650.7 AFFO per share $                                                 1.03 $                                                 0.98 (1) The calculation to determine net income attributable to common stockholders includes provisions for impairment, gain on sales of real estate, and foreign currency gain and loss. These items can vary from quarter to quarter and can significantly impact net income available to common stockholders and period to period comparisons. (2) Our financial results during the three months ended March 31, 2024 were primarily impacted by the following transactions: (i) $94.1 million of merger and integration-related costs related to our merger with Spirit, and (ii) $89.5 million provisions of impairment, primarily on two office properties which were acquired and retained in our merger with VEREIT, Inc. ("VEREIT") in 2021. (3) FFO, Normalized FFO, and AFFO are non-GAAP financial measures. Normalized FFO is based on FFO and adjusted to exclude merger and integration-related costs and AFFO further adjusts Normalized FFO for unique revenue and expense items. Please see the Glossary for our definitions and explanations of how we utilize these metrics. Please see pages 9 and 10 herein for reconciliations to the most directly comparable GAAP measure. Dividend Increases  In March 2024, we announced the 106th consecutive quarterly dividend increase, which is the 124th increase in the amount of the dividend since our listing on the New York Stock Exchange (NYSE) in 1994. The annualized dividend amount as of March 31, 2024 was $3.084 per share. The amount of monthly dividends paid per share increased 2.4% to $0.770 during the three months ended March 31, 2024, as compared to $0.752 with the same period in 2023, representing 74.8% of our diluted AFFO per share of $1.03 during the three months ended March 31, 2024. Real Estate Portfolio Update As of March 31, 2024, we owned or held interests in 15,485 properties, which were leased to 1,552 clients doing business in 89 industries. Our diversified portfolio of commercial properties under long-term, net lease agreements is actively managed with a weighted average remaining lease term of approximately 9.8 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of March 31, 2024, portfolio occupancy was 98.6% with 217 properties available for lease or sale, as compared to 98.6% as of December 31, 2023 and 99.0% as of March 31, 2023. Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending and include properties owned by unconsolidated joint ventures. Below is a summary of our portfolio activity for the period indicated below: Changes in Occupancy Three months ended March 31, 2024 Properties available for lease at December 31, 2023 193 Lease expirations (1) (2) 245 Re-leases to same client (166) Re-leases to new client (12) Vacant dispositions (43) Properties available for lease at March 31, 2024 217 (1)  Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above. (2) Includes 26 properties acquired through the merger with Spirit in January 2024. During the three months ended March 31, 2024, the new annualized contractual rent on re-leases was $59.37 million, as compared to the previous annual rent of $56.91 million on the same units, representing a rent recapture rate of 104.3% on the units re-leased. We re-leased nine units to new clients without a period of vacancy, and seven units to new clients after a period of vacancy. Please see the Glossary for our definition of annualized contractual income. Investment Summary The following table summarizes our acquisitions in the U.S. and Europe for the period indicated below: Number of Properties Investment ($ in millions) Leasable Square Feet (in thousands) Initial Weighted Average Cash Yield (1) Weighted Average Term (Years) Three months ended March 31, 2024 Acquisitions - U.S. real estate 5 $                 16.0 194 7.1 % 8.9 Acquisitions - Europe real estate 8 302.6 1,064 8.2 % 6.2 Total real estate acquisitions 13 $               318.6 1,258 8.2 % 6.3 Real estate properties under development (2) (3) 142 279.4 5,776 7.3 % 15.1 Total investments (4) 155 $               598.0 7,034 7.8 % 10.2 (1)  Initial weighted average cash yield is a supplemental operating measure. Cash income used in the calculation of initial weighted average cash yield for investments includes $0.5 million received as settlement credits as reimbursement of free rent periods. Please see the Glossary for our definitions of Initial Weighted Average Cash Yield and Cash Income. (2) Includes £8.7 million of investments relating to United Kingdom ("U.K.") development properties and €8.4 million of investments relating to Spain development properties, converted at the applicable exchange rates on the funding dates. (3)  Includes $38.1 million of investments in an unconsolidated U.S. data center joint venture. (4) Clients we have invested in are 84.5% retail, 9.7% industrial, and 5.8% other based on cash income. Approximately 44% of the annualized cash income generated from acquisitions is from investment grade rated clients, their subsidiaries or affiliated companies. Please see the Glossary for our definition of Investment Grade Clients and Cash Income. Same Store Rental Revenue The following summarizes our same store rental revenue for 11,716 properties under lease (dollars in millions): Three months ended March 31, 2024 2023 % Increase Same store rental revenue $843.5 $837.1 0.8 % For purposes of comparability, same store rental revenue is presented on a constant currency basis using the applicable exchange rate as of March 31, 2024. None of the properties in France, Germany, Ireland or Portugal met our same store pool definition for the periods presented. In addition, the same store pool excludes properties assumed on January 23, 2024 as a result of our merger with Spirit. Please see the Glossary to see definitions of our Same Store Pool and Same Store Rental Revenue. Liquidity and Capital Markets Capital RaisingDuring the three months ended March 31, 2024, we raised $550.1 million of proceeds from the sale of common stock at a weighted average price of $56.93 per share, primarily through the settlement of approximately 9.6 million shares of common stock sales previously executed pursuant to forward sale agreements through our ATM program. As of March 31, 2024, there were approximately 1.2 million shares of unsettled common stock subject to forward sale agreements through our ATM program, representing approximately $62.9 million in expected net proceeds and a weighted average initial gross price of $54.00 per share. ATM net sale proceed amounts assume full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates. In January 2024, we issued $450.0 million of 4.750% senior unsecured notes due February 2029 (the "2029 Notes"), and $800.0 million of 5.125% senior unsecured notes due February 2034 (the "2034 Notes"). Combined, the Notes have a weighted average tenor of approximately 8.3 years, a weighted average semi-annual yield to maturity of 5.142%, and weighted average coupon rate of 4.990%. LiquidityAs of March 31, 2024, we had $4.0 billion of liquidity, which consists of cash and cash equivalents of $680.2 million, unsettled ATM forward equity of $62.9 million, and $3.2 billion of availability under our $4.25 billion unsecured revolving credit facility, net of $806.5 million of borrowing on the revolving credit facility and after deducting $216.0 million in borrowings under our commercial paper programs. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under these programs. Earnings Guidance Summarized below are approximate estimates of the key components of our 2024 earnings guidance.   Prior 2024 Guidance (1) Revised 2024 Guidance Net income per share (2)  $1.22 - $1.34 $1.23 - $1.35 Real estate depreciation and impairments per share (3) $2.82 $2.84 Other adjustments per share (3) $0.13 $0.10 Normalized FFO per share (2)(4) $4.17 - $4.29 $4.17 - $4.29 AFFO per share (4) $4.13 - $4.21 $4.13 - $4.21 Same store rent growth (5) Approx 1.0% Approx 1.0% Occupancy Over 98% Over 98% Cash G&A expenses (% of revenues) (6)(7) Approx 3.0% Approx 3.0% Property expenses (non-reimbursable) (% of revenues) (6) 1.0% - 1.5% 1.0% - 1.5% Income tax expenses $65 to $75 million $65 to $75 million Acquisition volume (8) Approx $2.0 billion Approx $2.0 billion (1)  As issued on February 21, 2024. (2)  Net income per share and Normalized FFO per share include non-cash interest expense impact related to the Spirit merger. (3)  Includes gain on sales of properties and merger and integration-related costs. (4) Normalized FFO per share and AFFO per share exclude merger and integration-related costs associated with our merger with Spirit. Per share amounts may not add due to rounding. (5) Reserve reversals recognized in 2023 represent an approximately 30 basis point headwind to same store rent growth in 2024. (6) Revenue excludes contractually obligated reimbursements by our clients. Cash G&A expenses exclude stock-based compensation expense. (7) G&A expenses inclusive of stock-based compensation expense as a percentage of rental revenue, excluding reimbursements, is expected to be approximately 3.4% - 3.7% in 2024. (8) Acquisition volume excludes merger with Spirit, which closed January 23, 2024. Conference Call Information In conjunction with the release of our operating results, we will host a conference call on May 7, 2024 at 11:00 a.m. PDT to discuss the results. To access the conference call, dial (833) 816-1264 (United States) or (412) 317-5632 (International). When prompted, please ask for the Realty Income conference call. A telephone replay of the conference call can also be accessed by calling (877) 344-7529 and entering the conference ID 4176200. The telephone replay will be available through May 14, 2024. 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 and Sustainability Report Supplemental Operating and Financial Data for the three months ended March 31, 2024 is available on our corporate website at www.realtyincome.com/investors/quarterly-and-annual-results. The Sustainability Report for the year ended December 31, 2022 is available on our corporate website at esg.realtyincome.com/indicators/sustainability_report. Our Green Financing Framework is also available on our corporate website at esg.realtyincome.com/indicators/green_financing. About Realty Income Realty Income (NYSE:O), an S&P 500 company, is real estate partner to the world's leading companies. Founded in 1969, we invest in diversified commercial real estate and have a portfolio of over 15,450 properties in all 50 U.S. states, the U.K., and six other countries in Europe. We are known as "The Monthly Dividend Company®," and have a mission to deliver stockholders dependable monthly dividends that grow over time. Since our founding, we have declared 646 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for the last 25 consecutive years. Additional information about the company can be found at www.realtyincome.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio; growth strategies and intentions to acquire or dispose of properties (including timing, partners, clients and terms); re-leases, re-development and speculative development of properties and expenditures related thereto; future operations and results; the announcement of operating results, strategy, plans, and the intentions of management; guidance; settlement of shares of common stock sold pursuant to forward sale confirmations under our ATM program; dividends; and trends in our business, including trends in the market for long-term leases of freestanding, single-client properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms and partners of such funding); continued volatility and uncertainty in the credit markets and broader financial markets; other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; changes in domestic and foreign income tax laws and rates; property ownership through joint ventures, partnerships and other arrangements which may limit control of the underlying investments; epidemics or pandemics including measures taken to limit their spread, the impacts on us, our business, our clients, and the economy generally; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers and acquisitions including from the merger with Spirit; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) Three months ended March 31, 2024 2023 REVENUE Rental (including reimbursable) (1) $                              1,208,169 $                                 925,289 Other 52,316 19,110 Total revenue 1,260,485 944,399 EXPENSES Depreciation and amortization