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Maryland
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33-0580106
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer Identification
Number)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Page
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2018
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|
2017
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|
||
ASSETS
|
(unaudited)
|
|
|
|
|
||
Real estate, at cost:
|
|
|
|
|
|
||
Land
|
$
|
4,355,454
|
|
|
$
|
4,080,400
|
|
Buildings and improvements
|
11,313,624
|
|
|
10,936,069
|
|
||
Total real estate, at cost
|
15,669,078
|
|
|
15,016,469
|
|
||
Less accumulated depreciation and amortization
|
(2,509,065
|
)
|
|
(2,346,644
|
)
|
||
Net real estate held for investment
|
13,160,013
|
|
|
12,669,825
|
|
||
Real estate held for sale, net
|
70,029
|
|
|
6,674
|
|
||
Net real estate
|
13,230,042
|
|
|
12,676,499
|
|
||
Cash and cash equivalents
|
30,717
|
|
|
6,898
|
|
||
Accounts receivable, net
|
126,126
|
|
|
119,533
|
|
||
Acquired lease intangible assets, net
|
1,228,580
|
|
|
1,194,930
|
|
||
Goodwill
|
14,902
|
|
|
14,970
|
|
||
Other assets, net
|
43,707
|
|
|
45,336
|
|
||
Total assets
|
$
|
14,674,074
|
|
|
$
|
14,058,166
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Distributions payable
|
$
|
64,399
|
|
|
$
|
60,799
|
|
Accounts payable and accrued expenses
|
122,379
|
|
|
109,523
|
|
||
Acquired lease intangible liabilities, net
|
311,043
|
|
|
268,796
|
|
||
Other liabilities
|
123,582
|
|
|
116,869
|
|
||
Line of credit payable
|
534,000
|
|
|
110,000
|
|
||
Term loans, net
|
319,531
|
|
|
445,286
|
|
||
Mortgages payable, net
|
311,708
|
|
|
325,941
|
|
||
Notes payable, net
|
5,374,963
|
|
|
5,230,244
|
|
||
Total liabilities
|
7,161,605
|
|
|
6,667,458
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock and paid in capital, par value $0.01 per share, 370,100,000 shares authorized, 290,024,275 shares issued and outstanding as of June 30, 2018 and 284,213,685 shares issued and outstanding as of December 31, 2017
|
9,925,543
|
|
|
9,624,264
|
|
||
Distributions in excess of net income
|
(2,449,793
|
)
|
|
(2,252,763
|
)
|
||
Total stockholders’ equity
|
7,475,750
|
|
|
7,371,501
|
|
||
Noncontrolling interests
|
36,719
|
|
|
19,207
|
|
||
Total equity
|
7,512,469
|
|
|
7,390,708
|
|
||
Total liabilities and equity
|
$
|
14,674,074
|
|
|
$
|
14,058,166
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
REVENUE
|
|
|
|
|
|
|
|
|
|
||||||
Rental
|
$
|
313,870
|
|
|
$
|
288,049
|
|
|
$
|
620,418
|
|
|
$
|
573,870
|
|
Tenant reimbursements
|
11,395
|
|
|
11,756
|
|
|
22,695
|
|
|
22,985
|
|
||||
Other
|
3,621
|
|
|
365
|
|
|
4,068
|
|
|
1,340
|
|
||||
Total revenue
|
328,886
|
|
|
300,170
|
|
|
647,181
|
|
|
598,195
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EXPENSES
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
133,999
|
|
|
123,089
|
|
|
265,102
|
|
|
244,186
|
|
||||
Interest
|
66,628
|
|
|
63,679
|
|
|
126,043
|
|
|
122,985
|
|
||||
General and administrative
|
17,954
|
|
|
15,781
|
|
|
33,638
|
|
|
29,346
|
|
||||
Property (including reimbursable)
|
16,236
|
|
|
16,486
|
|
|
32,788
|
|
|
35,561
|
|
||||
Income taxes
|
1,208
|
|
|
441
|
|
|
2,431
|
|
|
1,488
|
|
||||
Provisions for impairment
|
3,951
|
|
|
2,274
|
|
|
18,172
|
|
|
7,706
|
|
||||
Total expenses
|
239,976
|
|
|
221,750
|
|
|
478,174
|
|
|
441,272
|
|
||||
Gain on sales of real estate
|
7,787
|
|
|
2,839
|
|
|
11,005
|
|
|
13,371
|
|
||||
Net income
|
96,697
|
|
|
81,259
|
|
|
180,012
|
|
|
170,294
|
|
||||
Net income attributable to noncontrolling interests
|
(317
|
)
|
|
(123
|
)
|
|
(469
|
)
|
|
(288
|
)
|
||||
Net income attributable to the Company
|
96,380
|
|
|
81,136
|
|
|
179,543
|
|
|
170,006
|
|
||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,911
|
)
|
||||
Excess of redemption value over carrying value of preferred shares redeemed
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,373
|
)
|
||||
Net income available to common stockholders
|
$
|
96,380
|
|
|
$
|
81,136
|
|
|
$
|
179,543
|
|
|
$
|
152,722
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts available to common stockholders per common share:
|
|
|
|
|
|
|
|
||||||||
Net income, basic and diluted
|
$
|
0.34
|
|
|
$
|
0.30
|
|
|
$
|
0.63
|
|
|
$
|
0.57
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
284,928,969
|
|
|
272,588,332
|
|
|
284,469,689
|
|
|
268,024,691
|
|
||||
Diluted
|
285,372,256
|
|
|
273,099,487
|
|
|
284,924,336
|
|
|
268,569,855
|
|
|
2018
|
|
|
2017
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||
Net income
|
$
|
180,012
|
|
|
$
|
170,294
|
|
Adjustments to net income:
|
|
|
|
||||
Depreciation and amortization
|
265,102
|
|
|
244,186
|
|
||
Amortization of share-based compensation
|
8,657
|
|
|
7,215
|
|
||
Non-cash revenue adjustments
|
(4,029
|
)
|
|
(1,564
|
)
|
||
Amortization of net premiums on mortgages payable
|
(813
|
)
|
|
(1,240
|
)
|
||
Amortization of deferred financing costs
|
3,469
|
|
|
4,684
|
|
||
Gain on interest rate swaps
|
(2,799
|
)
|
|
(859
|
)
|
||
Gain on sales of real estate
|
(11,005
|
)
|
|
(13,371
|
)
|
||
Provisions for impairment on real estate
|
18,172
|
|
|
7,706
|
|
||
Change in assets and liabilities
|
|
|
|
||||
Accounts receivable and other assets
|
2,785
|
|
|
3,168
|
|
||
Accounts payable, accrued expenses and other liabilities
|
17,718
|
|
|
41,620
|
|
||
Net cash provided by operating activities
|
477,269
|
|
|
461,839
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Investment in real estate
|
(829,818
|
)
|
|
(696,116
|
)
|
||
Improvements to real estate, including leasing costs
|
(17,017
|
)
|
|
(9,232
|
)
|
||
Proceeds from sales of real estate
|
47,526
|
|
|
44,005
|
|
||
Insurance proceeds received
|
3,836
|
|
|
—
|
|
||
Collection of loans receivable
|
5,267
|
|
|
61
|
|
||
Net cash used in investing activities
|
(790,206
|
)
|
|
(661,282
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Cash distributions to common stockholders
|
(373,044
|
)
|
|
(335,380
|
)
|
||
Cash dividends to preferred stockholders
|
—
|
|
|
(6,168
|
)
|
||
Borrowings on line of credit
|
1,140,000
|
|
|
772,000
|
|
||
Payments on line of credit
|
(716,000
|
)
|
|
(1,244,000
|
)
|
||
Principal payment on term loan
|
(125,866
|
)
|
|
—
|
|
||
Proceeds from notes and bonds payable issued
|
497,500
|
|
|
711,812
|
|
||
Principal payment on notes payable
|
(350,000
|
)
|
|
—
|
|
||
Principal payments on mortgages payable
|
(13,447
|
)
|
|
(86,515
|
)
|
||
Redemption of preferred stock
|
—
|
|
|
(408,750
|
)
|
||
Proceeds from common stock offerings, net
|
—
|
|
|
704,938
|
|
||
Proceeds from dividend reinvestment and stock purchase plan
|
4,806
|
|
|
59,649
|
|
||
Proceeds from At-the-Market (ATM) program
|
297,983
|
|
|
52,442
|
|
||
Distributions to noncontrolling interests
|
(758
|
)
|
|
(887
|
)
|
||
Debt issuance costs
|
(4,436
|
)
|
|
(6,663
|
)
|
||
Other items, including shares withheld upon vesting
|
(11,143
|
)
|
|
(6,305
|
)
|
||
Net cash provided by financing activities
|
345,595
|
|
|
206,173
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
32,658
|
|
|
6,730
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
12,142
|
|
|
15,681
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
44,800
|
|
|
$
|
22,411
|
|
A.
|
Acquired lease intangible assets, net, consist of the following at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Acquired in-place leases
|
$
|
1,301,834
|
|
|
$
|
1,272,897
|
|
|
Accumulated amortization of acquired in-place leases
|
(495,883
|
)
|
|
(444,221
|
)
|
||
|
Acquired above-market leases
|
562,801
|
|
|
487,933
|
|
||
|
Accumulated amortization of acquired above-market leases
|
(140,172
|
)
|
|
(121,679
|
)
|
||
|
|
$
|
1,228,580
|
|
|
$
|
1,194,930
|
|
B.
|
Other assets, net, consist of the following at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Prepaid expenses
|
$
|
15,821
|
|
|
$
|
12,851
|
|
|
Restricted escrow deposits
|
7,054
|
|
|
679
|
|
||
|
Impounds related to mortgages payable
|
7,029
|
|
|
4,565
|
|
||
|
Corporate assets, net
|
5,926
|
|
|
6,074
|
|
||
|
Receivable for property rebuilds
|
3,244
|
|
|
3,919
|
|
||
|
Credit facility origination costs, net
|
2,911
|
|
|
4,366
|
|
||
|
Non-refundable escrow deposits for pending acquisitions
|
—
|
|
|
7,500
|
|
||
|
Notes receivable issued in connection with property sales
|
—
|
|
|
5,267
|
|
||
|
Other items
|
1,722
|
|
|
115
|
|
||
|
|
$
|
43,707
|
|
|
$
|
45,336
|
|
C.
|
Distributions payable consist of the following declared distributions at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Common stock distributions
|
$
|
64,241
|
|
|
$
|
60,713
|
|
|
Noncontrolling interests distributions
|
158
|
|
|
86
|
|
||
|
|
$
|
64,399
|
|
|
$
|
60,799
|
|
D.
|
Accounts payable and accrued expenses consist of the following at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Notes payable - interest payable
|
$
|
75,861
|
|
|
$
|
64,058
|
|
|
Property taxes payable
|
18,200
|
|
|
11,718
|
|
||
|
Mortgages, term loans, credit line - interest payable and interest rate swaps
|
3,356
|
|
|
2,360
|
|
||
|
Accrued costs on properties under development
|
3,149
|
|
|
2,681
|
|
||
|
Other items
|
21,813
|
|
|
28,706
|
|
||
|
|
$
|
122,379
|
|
|
$
|
109,523
|
|
E.
|
Acquired lease intangible liabilities, net, consist of the following at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Acquired below-market leases
|
$
|
394,253
|
|
|
$
|
340,906
|
|
|
Accumulated amortization of acquired below-market leases
|
(83,210
|
)
|
|
(72,110
|
)
|
||
|
|
$
|
311,043
|
|
|
$
|
268,796
|
|
F.
|
Other liabilities consist of the following at:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
|
Rent received in advance and other deferred revenue
|
$
|
111,814
|
|
|
$
|
105,284
|
|
|
Security deposits
|
6,287
|
|
|
6,259
|
|
||
|
Capital lease obligations
|
5,481
|
|
|
5,326
|
|
||
|
|
$
|
123,582
|
|
|
$
|
116,869
|
|
|
Net
decrease to
rental revenue
|
|
|
Increase to
amortization
expense
|
|
||
2018
|
$
|
(7,856
|
)
|
|
$
|
53,176
|
|
2019
|
(15,108
|
)
|
|
97,639
|
|
||
2020
|
(14,378
|
)
|
|
91,887
|
|
||
2021
|
(13,208
|
)
|
|
83,903
|
|
||
2022
|
(13,074
|
)
|
|
71,978
|
|
||
Thereafter
|
(47,962
|
)
|
|
407,368
|
|
||
Totals
|
$
|
(111,586
|
)
|
|
$
|
805,951
|
|
As Of
|
|
Number of Properties
(1)
|
|
|
Weighted
Average
Stated
Interest
Rate
(2)
|
|
|
Weighted
Average
Effective
Interest
Rate
(3)
|
|
|
Weighted
Average
Remaining
Years Until
Maturity
|
|
Remaining
Principal
Balance
|
|
|
Unamortized
Premium
and Deferred
Financing Costs
Balance, net
|
|
|
Mortgage
Payable
Balance
|
|
|||
6/30/2018
|
|
61
|
|
|
5.1
|
%
|
|
4.5
|
%
|
|
3.6
|
|
$
|
306,836
|
|
|
$
|
4,872
|
|
|
$
|
311,708
|
|
12/31/2017
|
|
62
|
|
|
5.0
|
%
|
|
4.4
|
%
|
|
4.0
|
|
$
|
320,283
|
|
|
$
|
5,658
|
|
|
$
|
325,941
|
|
Year of Maturity
|
Principal
|
|
|
2018
|
$
|
8.5
|
|
2019
|
20.7
|
|
|
2020
|
82.4
|
|
|
2021
|
66.9
|
|
|
2022
|
109.7
|
|
|
Thereafter
|
18.6
|
|
|
Totals
|
$
|
306.8
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
2.000% notes, issued in October 2012 and due in January 2018
|
$
|
—
|
|
|
$
|
350
|
|
5.750% notes, issued in June 2010 and due in January 2021
|
250
|
|
|
250
|
|
||
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022
|
950
|
|
|
950
|
|
||
4.650% notes, issued in July 2013 and due in August 2023
|
750
|
|
|
750
|
|
||
3.875% notes, issued in June 2014 and due in July 2024
|
350
|
|
|
350
|
|
||
3.875% notes, issued in April 2018 and due in April 2025
|
500
|
|
|
—
|
|
||
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026
|
650
|
|
|
650
|
|
||
3.000% notes, issued in October 2016 and due in January 2027
|
600
|
|
|
600
|
|
||
3.650% notes, issued in December 2017 and due in January 2028
|
550
|
|
|
550
|
|
||
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035
|
250
|
|
|
250
|
|
||
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047
|
550
|
|
|
550
|
|
||
Total principal amount
|
5,400
|
|
|
5,250
|
|
||
Unamortized net original issuance premiums and deferred financing costs
|
(25
|
)
|
|
(20
|
)
|
||
|
$
|
5,375
|
|
|
$
|
5,230
|
|
Year of Maturity
|
Principal
|
|
|
2021
|
$
|
250
|
|
2022
|
950
|
|
|
Thereafter
|
4,200
|
|
|
Totals
|
$
|
5,400
|
|
|
Tau Operating
Partnership units
(1)
|
|
|
Realty Income, L.P.
units
(2)
|
|
|
Other
Noncontrolling
Interests
|
|
|
Total
|
|
||||
Carrying value at December 31, 2017
|
$
|
13,322
|
|
|
$
|
2,160
|
|
|
$
|
3,725
|
|
|
$
|
19,207
|
|
Reallocation of equity
|
572
|
|
|
(43
|
)
|
|
(37
|
)
|
|
492
|
|
||||
Redemptions
|
—
|
|
|
(1,468
|
)
|
|
—
|
|
|
(1,468
|
)
|
||||
Shares issued in conjunction with acquisition
|
—
|
|
|
18,848
|
|
|
|
|
18,848
|
|
|||||
Distributions
|
(417
|
)
|
|
(336
|
)
|
|
(76
|
)
|
|
(829
|
)
|
||||
Allocation of net income
|
173
|
|
|
257
|
|
|
39
|
|
|
469
|
|
||||
Carrying value at June 30, 2018
|
$
|
13,650
|
|
|
$
|
19,418
|
|
|
$
|
3,651
|
|
|
$
|
36,719
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
Net real estate
|
$
|
2,961,127
|
|
|
$
|
2,936,397
|
|
Total assets
|
3,348,144
|
|
|
3,342,443
|
|
||
Total debt
|
198,332
|
|
|
210,384
|
|
||
Total liabilities
|
330,757
|
|
|
313,295
|
|
At June 30, 2018
|
Carrying value
|
|
|
Estimated fair value
|
|
||
Mortgages payable assumed in connection with acquisitions
(1)
|
$
|
306.8
|
|
|
$
|
314.4
|
|
Notes and bonds payable
(2)
|
5,400.0
|
|
|
5,391.9
|
|
At December 31, 2017
|
Carrying value
|
|
|
Estimated fair value
|
|
||
Notes receivable issued in connection with property sales
|
$
|
5.3
|
|
|
$
|
5.3
|
|
Mortgages payable assumed in connection with acquisitions
(1)
|
320.3
|
|
|
334.2
|
|
||
Notes and bonds payable
(2)
|
5,250.0
|
|
|
5,475.3
|
|
Month
|
2018
|
|
|
2017
|
|
||
January
|
$
|
0.2125
|
|
|
$
|
0.2025
|
|
February
|
0.2190
|
|
|
0.2105
|
|
||
March
|
0.2190
|
|
|
0.2105
|
|
||
April
|
0.2195
|
|
|
0.2110
|
|
||
May
|
0.2195
|
|
|
0.2110
|
|
||
June
|
0.2195
|
|
|
0.2110
|
|
||
Total
|
$
|
1.3090
|
|
|
$
|
1.2565
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Weighted average shares used for the basic net income per share computation
|
284,928,969
|
|
|
272,588,332
|
|
|
284,469,689
|
|
|
268,024,691
|
|
Incremental shares from share-based compensation
|
126,265
|
|
|
194,133
|
|
|
137,625
|
|
|
228,142
|
|
Weighted average partnership common units convertible to common shares that were dilutive
|
317,022
|
|
|
317,022
|
|
|
317,022
|
|
|
317,022
|
|
Weighted average shares used for diluted net income per share computation
|
285,372,256
|
|
|
273,099,487
|
|
|
284,924,336
|
|
|
268,569,855
|
|
Unvested shares from share-based compensation that were anti-dilutive
|
237,861
|
|
|
44,191
|
|
|
164,111
|
|
|
32,016
|
|
Weighted average partnership common units convertible to common shares that were anti-dilutive
|
359,980
|
|
|
88,182
|
|
|
207,948
|
|
|
88,182
|
|
|
June 30, 2018
|
|
|
June 30, 2017
|
|
||
Cash and cash equivalents shown in the consolidated balance sheets
|
$
|
30,717
|
|
|
$
|
10,945
|
|
Restricted escrow deposits
(1)
|
7,054
|
|
|
8,550
|
|
||
Impounds related to mortgages payable
(1)
|
7,029
|
|
|
2,916
|
|
||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows
|
$
|
44,800
|
|
|
$
|
22,411
|
|
Assets, as of:
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||
Segment net real estate:
|
|
|
|
||||
Apparel
|
$
|
161,920
|
|
|
$
|
164,919
|
|
Automotive service
|
209,964
|
|
|
213,156
|
|
||
Automotive tire services
|
243,271
|
|
|
247,557
|
|
||
Beverages
|
287,032
|
|
|
289,170
|
|
||
Child care
|
60,058
|
|
|
61,527
|
|
||
Convenience stores
|
1,397,354
|
|
|
997,170
|
|
||
Dollar stores
|
1,101,066
|
|
|
1,105,097
|
|
||
Drug stores
|
1,511,955
|
|
|
1,518,443
|
|
||
Financial services
|
428,731
|
|
|
384,867
|
|
||
General merchandise
|
318,584
|
|
|
313,181
|
|
||
Grocery stores
|
773,501
|
|
|
793,286
|
|
||
Health and fitness
|
886,585
|
|
|
896,430
|
|
||
Home improvement
|
428,730
|
|
|
407,002
|
|
||
Motor vehicle dealerships
|
201,073
|
|
|
204,651
|
|
||
Restaurants-casual dining
|
475,028
|
|
|
494,977
|
|
||
Restaurants-quick service
|
803,886
|
|
|
681,763
|
|
||
Theaters
|
561,477
|
|
|
566,585
|
|
||
Transportation services
|
766,883
|
|
|
776,068
|
|
||
Wholesale club
|
420,048
|
|
|
426,551
|
|
||
Other non-reportable segments
|
2,192,896
|
|
|
2,134,099
|
|
||
Total segment net real estate
|
13,230,042
|
|
|
12,676,499
|
|
||
Intangible assets:
|
|
|
|
||||
Apparel
|
34,641
|
|
|
36,600
|
|
||
Automotive service
|
62,664
|
|
|
64,388
|
|
||
Automotive tire services
|
9,520
|
|
|
10,383
|
|
||
Beverages
|
1,894
|
|
|
2,022
|
|
||
Convenience stores
|
95,392
|
|
|
45,445
|
|
||
Dollar stores
|
47,357
|
|
|
47,905
|
|
||
Drug stores
|
171,741
|
|
|
173,893
|
|
||
Financial services
|
22,563
|
|
|
24,867
|
|
||
General merchandise
|
45,893
|
|
|
50,184
|
|
||
Grocery stores
|
144,239
|
|
|
140,780
|
|
||
Health and fitness
|
74,992
|
|
|
76,276
|
|
||
Home improvement
|
61,666
|
|
|
61,045
|
|
||
Motor vehicle dealerships
|
29,937
|
|
|
31,720
|
|
||
Restaurants-casual dining
|
19,100
|
|
|
20,079
|
|
||
Restaurants-quick service
|
62,303
|
|
|
51,711
|
|
||
Theaters
|
25,555
|
|
|
26,448
|
|
||
Transportation services
|
80,111
|
|
|
87,162
|
|
||
Wholesale club
|
28,040
|
|
|
29,596
|
|
||
Other non-reportable segments
|
210,972
|
|
|
214,426
|
|
||
Goodwill:
|
|
|
|
||||
Automotive service
|
437
|
|
|
437
|
|
||
Automotive tire services
|
862
|
|
|
862
|
|
||
Child care
|
4,899
|
|
|
4,924
|
|
||
Convenience stores
|
2,002
|
|
|
2,004
|
|
||
Restaurants-casual dining
|
2,047
|
|
|
2,062
|
|
||
Restaurants-quick service
|
1,057
|
|
|
1,064
|
|
||
Other non-reportable segments
|
3,598
|
|
|
3,617
|
|
||
Other corporate assets
|
200,550
|
|
|
171,767
|
|
||
Total assets
|
$
|
14,674,074
|
|
|
$
|
14,058,166
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
Revenue
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment rental revenue:
|
|
|
|
|
|
|
|
||||||||
Apparel
|
$
|
4,210
|
|
|
$
|
4,928
|
|
|
$
|
8,541
|
|
|
$
|
9,895
|
|
Automotive service
|
7,021
|
|
|
6,298
|
|
|
14,030
|
|
|
11,841
|
|
||||
Automotive tire services
|
7,708
|
|
|
7,616
|
|
|
15,147
|
|
|
14,775
|
|
||||
Beverages
|
7,836
|
|
|
7,758
|
|
|
15,673
|
|
|
15,516
|
|
||||
Child care
|
5,216
|
|
|
4,845
|
|
|
10,916
|
|
|
10,332
|
|
||||
Convenience stores
|
34,008
|
|
|
26,965
|
|
|
61,869
|
|
|
55,268
|
|
||||
Dollar stores
|
23,237
|
|
|
22,757
|
|
|
46,487
|
|
|
45,508
|
|
||||
Drug stores
|
32,436
|
|
|
31,614
|
|
|
64,775
|
|
|
63,245
|
|
||||
Financial services
|
6,890
|
|
|
7,159
|
|
|
13,891
|
|
|
14,318
|
|
||||
General merchandise
|
7,290
|
|
|
5,395
|
|
|
14,159
|
|
|
10,756
|
|
||||
Grocery stores
|
15,673
|
|
|
13,597
|
|
|
31,338
|
|
|
23,759
|
|
||||
Health and fitness
|
23,614
|
|
|
21,789
|
|
|
47,057
|
|
|
43,394
|
|
||||
Home improvement
|
9,339
|
|
|
7,090
|
|
|
18,583
|
|
|
14,010
|
|
||||
Motor vehicle dealerships
|
5,712
|
|
|
5,755
|
|
|
12,948
|
|
|
12,491
|
|
||||
Restaurants-casual dining
|
11,029
|
|
|
10,716
|
|
|
21,989
|
|
|
21,606
|
|
||||
Restaurants-quick service
|
17,083
|
|
|
14,517
|
|
|
33,362
|
|
|
28,853
|
|
||||
Theaters
|
17,565
|
|
|
13,114
|
|
|
35,335
|
|
|
26,458
|
|
||||
Transportation services
|
15,762
|
|
|
15,633
|
|
|
31,548
|
|
|
31,021
|
|
||||
Wholesale club
|
9,341
|
|
|
9,413
|
|
|
18,873
|
|
|
18,827
|
|
||||
Other non-reportable segments
|
52,900
|
|
|
51,090
|
|
|
103,897
|
|
|
101,997
|
|
||||
Total rental revenue
|
313,870
|
|
|
288,049
|
|
|
620,418
|
|
|
573,870
|
|
||||
Tenant reimbursements
|
11,395
|
|
|
11,756
|
|
|
22,695
|
|
|
22,985
|
|
||||
Other revenue
|
3,621
|
|
|
365
|
|
|
4,068
|
|
|
1,340
|
|
||||
Total revenue
|
$
|
328,886
|
|
|
$
|
300,170
|
|
|
$
|
647,181
|
|
|
$
|
598,195
|
|
•
|
Our anticipated growth strategies;
|
•
|
Our intention to acquire additional properties and the timing of these acquisitions;
|
•
|
Our intention to sell properties and the timing of these property sales;
|
•
|
Our intention to re-lease vacant properties;
|
•
|
Anticipated trends in our business, including trends in the market for long-term, net leases of freestanding, single-tenant properties; and
|
•
|
Future expenditures for development projects.
|
•
|
Our continued qualification as a real estate investment trust;
|
•
|
General business and economic conditions;
|
•
|
Competition;
|
•
|
Fluctuating interest rates;
|
•
|
Access to debt and equity capital markets;
|
•
|
Continued volatility and uncertainty in the credit markets and broader financial markets;
|
•
|
Other risks inherent in the real estate business including tenant defaults, 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 the tax laws of the United States of America;
|
•
|
The outcome of any legal proceedings to which we are a party or which may occur in the future; and
|
•
|
Acts of terrorism and war.
|
•
|
Of
5,483
properties;
|
•
|
With an occupancy rate of
98.7%
, or
5,414
properties leased and
69
properties available for lease;
|
•
|
Leased to
257
different commercial tenants doing business in
48
separate industries;
|
•
|
Located in
49
states and Puerto Rico;
|
•
|
With over
92.0 million
square feet of leasable space; and
|
•
|
With an average leasable space per property of approximately
16,780
square feet; approximately
11,680
square feet per retail property and
228,150
square feet per industrial property.
|
•
|
Properties that are freestanding, commercially-zoned with a single tenant;
|
•
|
Properties that are in significant markets or strategic locations critical to generating revenue for regional and national tenants (i.e. they need the property in which they operate in order to conduct their business);
|
•
|
Properties that we deem to be profitable for the tenants and/or can generally be characterized as important to the successful operations of the company’s business;
|
•
|
Properties that are located within attractive demographic areas relative to the business of our tenants, generally fungible, and have good visibility and easy access to major thoroughfares;
|
•
|
Properties with real estate valuations that approximate replacement costs;
|
•
|
Properties with rental or lease payments that approximate market rents; and
|
•
|
Properties that can be purchased with the simultaneous execution or assumption of long-term, net lease agreements, offering both current income and the potential for future rent increases.
|
•
|
Tenants with reliable and sustainable cash flow;
|
•
|
Tenants with revenue and cash flow from multiple sources;
|
•
|
Tenants that are willing to sign a long-term lease (10 or more years); and
|
•
|
Tenants that are large owners and users of real estate.
|
•
|
The aforementioned overall real estate characteristics, including demographics, replacement cost and comparative rental rates;
|
•
|
Industry, tenant (including credit profile), and market conditions;
|
•
|
Store profitability for retail locations if profitability data is available; and
|
•
|
The importance of the real estate location to the operations of the tenants’ business.
|
•
|
Rent increases at the expiration of existing leases, when market conditions permit;
|
•
|
Optimum exposure to certain tenants, industries, and markets through re-leasing vacant properties and selectively selling properties;
|
•
|
Maximum asset-level returns on properties that are re-leased or sold;
|
•
|
Additional value creation from the existing portfolio by enhancing individual properties, pursuing alternative uses, and deriving ancillary revenue; and
|
•
|
Investment opportunities in new asset classes for the portfolio.
|
•
|
Generate higher returns;
|
•
|
Enhance the credit quality of our real estate portfolio;
|
•
|
Extend our average remaining lease term; and/or
|
•
|
Strategically decrease tenant, industry, or geographic concentration.
|
|
|
Month
|
|
Month
|
|
Dividend
|
|
|
Increase
|
|
||
2018 Dividend increases
|
|
Declared
|
|
Paid
|
|
per share
|
|
|
per share
|
|
||
1st increase
|
|
Dec 2017
|
|
Jan 2018
|
|
$
|
0.2125
|
|
|
$
|
0.0005
|
|
2nd increase
|
|
Jan 2018
|
|
Feb 2018
|
|
$
|
0.2190
|
|
|
$
|
0.0065
|
|
3rd increase
|
|
Mar 2018
|
|
Apr 2018
|
|
$
|
0.2195
|
|
|
$
|
0.0005
|
|
4th increase
|
|
Jun 2018
|
|
Jul 2018
|
|
$
|
0.2200
|
|
|
$
|
0.0005
|
|
•
|
Had
115
lease expirations;
|
•
|
Re-leased
102
properties; and
|
•
|
Sold
27
vacant properties.
|
•
|
Shares of our common stock outstanding of
290,024,275
, plus total common units outstanding of
719,001
, multiplied by the last reported sales price of our common stock on the NYSE of
$53.79
per share on
June 30, 2018
, or
$15.6 billion
;
|
•
|
Outstanding borrowings of
$534.0 million
on our credit facility;
|
•
|
Outstanding mortgages payable of
$306.8 million
, excluding net mortgage premiums of
$5.1 million
and deferred financing costs of
$209,000
;
|
•
|
Outstanding borrowings of
$320.0 million
on our term loans, excluding deferred financing costs of
$469,000
; and
|
•
|
Outstanding senior unsecured notes and bonds of
$5.4 billion
, excluding net unamortized original issuance premiums of
$11.1 million
and deferred financing costs of
$36.2 million
.
|
5.750% notes, issued in June 2010 and due in January 2021
|
$
|
250
|
|
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022
|
950
|
|
|
4.650% notes, issued in July 2013 and due in August 2023
|
750
|
|
|
3.875% notes, issued in June 2014 and due in July 2024
|
350
|
|
|
3.875% notes, issued in April 2018 and due in April 2025
|
500
|
|
|
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026
|
650
|
|
|
3.000% notes, issued in October 2016 and due in January 2027
|
600
|
|
|
3.650% notes, issued in December 2017 and due in January 2028
|
550
|
|
|
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035
|
250
|
|
|
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047
|
550
|
|
|
|
|
|
|
Total principal amount
|
$
|
5,400
|
|
|
|
|
|
Unamortized net original issuance premiums and deferred financing costs
|
(25
|
)
|
|
|
|
|
|
|
$
|
5,375
|
|
Note Covenants
|
Required
|
Actual
|
|
Limitation on incurrence of total debt
|
<
60% of adjusted assets
|
41.4
|
%
|
Limitation on incurrence of secured debt
|
<
40% of adjusted assets
|
2.0
|
%
|
Debt service coverage (trailing 12 months)
(1)
|
>
1.5x
|
4.6x
|
|
Maintenance of total unencumbered assets
|
>
150% of unsecured debt
|
244.0
|
%
|
(1)
|
Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that: (i) the incurrence of any Debt (as defined in the covenants) incurred by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our Debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters had in each case occurred on July 1, 2017, and subject to certain additional adjustments. Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of July 1, 2017, nor does it purport to reflect our debt service coverage ratio for any future period. Our fixed charge coverage ratio is calculated in exactly the same manner as our debt service coverage ratio, except that preferred stock dividends are also added to the denominator; since we redeemed our Class F preferred dividends in April 2017, our fixed charge coverage ratio is equivalent to our debt service coverage ratio. The following is our calculation of debt service and fixed charge coverage at
June 30, 2018
(in thousands, for trailing twelve months):
|
Net income attributable to the Company
|
$
|
328,335
|
|
Plus: interest expense
|
242,291
|
|
|
Plus: provision for taxes
|
6,989
|
|
|
Plus: depreciation and amortization
|
519,704
|
|
|
Plus: provisions for impairment
|
25,216
|
|
|
Plus: pro forma adjustments
|
57,887
|
|
|
Plus: charges for early extinguishment of debt
|
42,426
|
|
|
Less: gain on sales of real estate
|
(38,533
|
)
|
|
|
|
|
|
Income available for debt service, as defined
|
$
|
1,184,315
|
|
|
|
|
|
Total pro forma debt service charge
|
$
|
259,244
|
|
|
|
|
|
Debt service and fixed charge coverage ratio
|
4.6
|
|
Year of
Maturity
|
Credit
Facility
(1)
|
|
Notes and
Bonds
(2)
|
|
Term
Loan
(3)
|
|
Mortgages
Payable
(4)
|
|
Interest
(5)
|
|
Ground
Leases Paid by Realty
Income
(6)
|
|
Ground
Leases Paid by Our
Tenants
(7)
|
|
Other
(8)
|
|
Totals
|
|
|||||||||
2018
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8.5
|
|
$
|
133.1
|
|
$
|
0.8
|
|
$
|
6.8
|
|
$
|
15.1
|
|
$
|
164.3
|
|
2019
|
534.0
|
|
—
|
|
70.0
|
|
20.7
|
|
251.8
|
|
1.5
|
|
13.6
|
|
15.1
|
|
906.7
|
|
|||||||||
2020
|
—
|
|
—
|
|
250.0
|
|
82.4
|
|
237.5
|
|
1.4
|
|
13.4
|
|
—
|
|
584.7
|
|
|||||||||
2021
|
—
|
|
250.0
|
|
—
|
|
66.9
|
|
219.2
|
|
1.2
|
|
13.1
|
|
—
|
|
550.4
|
|
|||||||||
2022
|
—
|
|
950.0
|
|
—
|
|
109.7
|
|
208.5
|
|
1.2
|
|
13.0
|
|
—
|
|
1,282.4
|
|
|||||||||
Thereafter
|
—
|
|
4,200.0
|
|
—
|
|
18.6
|
|
1,224.2
|
|
20.9
|
|
94.9
|
|
—
|
|
5,558.6
|
|
|||||||||
Totals
|
$
|
534.0
|
|
$
|
5,400.0
|
|
$
|
320.0
|
|
$
|
306.8
|
|
$
|
2,274.3
|
|
$
|
27.0
|
|
$
|
154.8
|
|
$
|
30.2
|
|
$
|
9,047.1
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Three months
|
|
Six months
|
||||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rental
|
$
|
313,870
|
|
|
$
|
288,049
|
|
|
$
|
620,418
|
|
|
$
|
573,870
|
|
|
$
|
25,821
|
|
|
$
|
46,548
|
|
Tenant reimbursements
|
11,395
|
|
|
11,756
|
|
|
22,695
|
|
|
22,985
|
|
|
(361
|
)
|
|
(290
|
)
|
||||||
Other
|
3,621
|
|
|
365
|
|
|
4,068
|
|
|
1,340
|
|
|
3,256
|
|
|
2,728
|
|
||||||
Total revenue
|
$
|
328,886
|
|
|
$
|
300,170
|
|
|
$
|
647,181
|
|
|
$
|
598,195
|
|
|
$
|
28,716
|
|
|
$
|
48,986
|
|
•
|
The 351 properties (2.6 million square feet) we acquired in 2018, which generated $9.5 million of rent in the second quarter of 2018;
|
•
|
The 287 properties (7.2 million square feet) we acquired in 2017, which generated $23.8 million of rent in the second quarter of 2018, compared to $6.8 million in the second quarter of 2017, an increase of $17.0 million; and
|
•
|
Same store rents generated on 4,731 properties (80.8 million square feet) during the second quarter of 2018 and 2017, increased by $2.6 million, or 1.0%, to $272.6 million from $270.0 million;
|
•
|
A net increase in straight-line rent and other non-cash adjustments to rent of $2.4 million in the second quarter of 2018 as compared to the second quarter of 2017; partially offset by
|
•
|
A net decrease of $2.7 million relating to properties sold in the second quarter of 2018 and during 2017; and
|
•
|
A net decrease of $3.0 million relating to the aggregate of (i) rental revenue from properties (90 properties comprising 2.4 million square feet) that were available for lease during part of 2018 or 2017, (ii) rental revenue for five properties under development, and (iii) lease termination settlements. In aggregate, the revenues for these items totaled $3.3 million in the second quarter of 2018, compared to $6.3 million in the second quarter of 2017.
|
•
|
The 351 properties (2.6 million square feet) we acquired in the first six months of 2018, which generated $9.9 million of rent in the first six months of 2018;
|
•
|
The 287 properties (7.2 million square feet) we acquired in 2017, which generated $47.6 million of rent in the first six months of 2018, compared to $7.5 million in the first six months of 2017, an increase of $40.1 million;
|
•
|
Same store rents generated on 4,731 properties (80.8 million square feet) during the first six months of 2018 and 2017, increased by $5.0 million or 0.9%, to $548.7 million from $543.7 million;
|
•
|
A net increase in straight-line rent and other non-cash adjustments to rent of $1.8 million in the first six months of 2018 as compared to the first six months of 2017; partially offset by
|
•
|
A net decrease of $5.6 million relating to properties sold in the first six months of 2018 and during 2017 that were reported in continuing operations; and
|
•
|
A net decrease of $4.7 million relating to the aggregate of (i) rental revenue from properties (90 properties comprising 2.4 million square feet) that were available for lease during part of 2018 or 2017, (ii) rental revenue for five properties under development, and (iii) lease termination settlements. In aggregate, the revenues for these items totaled $6.3 million in the first six months of 2018 compared to $11.0 million in the first six months of 2017.
|
•
|
Base rent increases tied to a consumer price index (typically subject to ceilings);
|
•
|
Percentage rent based on a percentage of the tenants’ gross sales;
|
•
|
Fixed increases; or
|
•
|
A combination of two or more of the above rent provisions.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Three months
|
|
Six months
|
||||||||||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
$
|
133,999
|
|
|
$
|
123,089
|
|
|
$
|
265,102
|
|
|
$
|
244,186
|
|
|
$
|
10,910
|
|
|
$
|
20,916
|
|
Interest
|
66,628
|
|
|
63,679
|
|
|
126,043
|
|
|
122,985
|
|
|
2,949
|
|
|
3,058
|
|
||||||
General and administrative
|
17,954
|
|
|
15,781
|
|
|
33,638
|
|
|
29,346
|
|
|
2,173
|
|
|
4,292
|
|
||||||
Property (excluding reimbursable)
|
4,841
|
|
|
4,730
|
|
|
10,093
|
|
|
12,576
|
|
|
111
|
|
|
(2,483
|
)
|
||||||
Property - reimbursable
|
11,395
|
|
|
11,756
|
|
|
22,695
|
|
|
22,985
|
|
|
361
|
|
|
290
|
|
||||||
Income taxes
|
1,208
|
|
|
441
|
|
|
2,431
|
|
|
1,488
|
|
|
767
|
|
|
943
|
|
||||||
Provisions for impairment
|
3,951
|
|
|
2,274
|
|
|
18,172
|
|
|
7,706
|
|
|
1,677
|
|
|
10,466
|
|
||||||
Total expenses
|
$
|
239,976
|
|
|
$
|
221,750
|
|
|
$
|
478,174
|
|
|
$
|
441,272
|
|
|
$
|
18,948
|
|
|
$
|
37,482
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Interest on our credit facility, term loans, notes, mortgages and interest rate swaps
|
$
|
65,310
|
|
|
$
|
60,714
|
|
|
$
|
124,961
|
|
|
$
|
116,772
|
|
Credit facility commitment fees
|
632
|
|
|
758
|
|
|
1,257
|
|
|
1,508
|
|
||||
Amortization of credit facility origination costs and deferred financing costs
|
1,826
|
|
|
2,351
|
|
|
3,412
|
|
|
4,664
|
|
||||
(Gain) loss on interest rate swaps
|
(792
|
)
|
|
470
|
|
|
(2,799
|
)
|
|
(859
|
)
|
||||
Dividend on preferred shares subject to redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
2,257
|
|
||||
Amortization of net mortgage premiums
|
(354
|
)
|
|
(609
|
)
|
|
(813
|
)
|
|
(1,240
|
)
|
||||
Capital lease obligation
|
78
|
|
|
77
|
|
|
155
|
|
|
155
|
|
||||
Interest capitalized
|
(72
|
)
|
|
(82
|
)
|
|
(130
|
)
|
|
(272
|
)
|
||||
Interest expense
|
$
|
66,628
|
|
|
$
|
63,679
|
|
|
$
|
126,043
|
|
|
$
|
122,985
|
|
|
|
|
|
|
|
|
|
||||||||
Credit facility, term loans, mortgages and notes
|
|
|
|
|
|
|
|
||||||||
Average outstanding balances (dollars in thousands)
|
$6,698,072
|
|
$5,883,340
|
|
$6,438,236
|
|
$5,797,800
|
||||||||
Average interest rates
|
3.90
|
%
|
|
4.09
|
%
|
|
3.88
|
%
|
|
3.98
|
%
|
•
|
Term loans outstanding of
$320.0 million
(excluding deferred financing costs of
$469,000
) was
3.0%
;
|
•
|
Mortgages payable of
$306.8 million
(excluding net premiums totaling
$5.1 million
and deferred financing costs of
$209,000
on these mortgages) was
5.1%
;
|
•
|
Credit facility outstanding borrowings of
$534.0 million
was
2.9%
;
|
•
|
Notes and bonds payable of
$5.4 billion
(excluding net unamortized original issue premiums of
$11.1 million
and deferred financing costs of
$36.2 million
) was
4.0%
; and
|
•
|
Combined outstanding notes, bonds, mortgages, term loans and credit facility borrowings of
$6.6 billion
was
3.9%
.
|
|
Three Months Ended
June 30, |
||||||
Dollars in thousands
|
2018
|
|
|
2017
|
|
||
Net income
|
$
|
96,697
|
|
|
$
|
81,259
|
|
Interest
|
66,628
|
|
|
63,679
|
|
||
Income taxes
|
1,208
|
|
|
441
|
|
||
Depreciation and amortization
|
133,999
|
|
|
123,089
|
|
||
Impairment loss
|
3,951
|
|
|
2,274
|
|
||
Gain on sales of real estate
|
(7,787
|
)
|
|
(2,839
|
)
|
||
Quarterly Adjusted EBITDA
re
|
$
|
294,696
|
|
|
$
|
267,903
|
|
|
|
|
|
||||
Annualized Adjusted EBITDA
re
(1)
|
$
|
1,178,784
|
|
|
$
|
1,071,612
|
|
Total Debt
|
$
|
6,540,202
|
|
|
$
|
5,988,048
|
|
Debt/Adjusted EBITDA
re
|
5.5
|
|
|
5.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net income available to common stockholders
|
$
|
96,380
|
|
|
$
|
81,136
|
|
|
$
|
179,543
|
|
|
$
|
152,722
|
|
Depreciation and amortization
|
133,999
|
|
|
123,089
|
|
|
265,102
|
|
|
244,186
|
|
||||
Depreciation of furniture, fixtures and equipment
|
(168
|
)
|
|
(150
|
)
|
|
(327
|
)
|
|
(307
|
)
|
||||
Provisions for impairment on real estate
|
3,951
|
|
|
2,274
|
|
|
18,172
|
|
|
7,706
|
|
||||
Gain on sales of real estate
|
(7,787
|
)
|
|
(2,839
|
)
|
|
(11,005
|
)
|
|
(13,371
|
)
|
||||
FFO adjustments allocable to noncontrolling interests
|
(293
|
)
|
|
(238
|
)
|
|
(521
|
)
|
|
(453
|
)
|
||||
FFO available to common stockholders
|
$
|
226,082
|
|
|
$
|
203,272
|
|
|
$
|
450,964
|
|
|
$
|
390,483
|
|
FFO allocable to dilutive noncontrolling interests
|
232
|
|
|
282
|
|
|
450
|
|
|
438
|
|
||||
Diluted FFO
|
$
|
226,314
|
|
|
$
|
203,554
|
|
|
$
|
451,414
|
|
|
$
|
390,921
|
|
|
|
|
|
|
|
|
|
||||||||
FFO per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.79
|
|
|
$
|
0.75
|
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.75
|
|
|
$
|
1.58
|
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions paid to common stockholders
|
$
|
187,488
|
|
|
$
|
172,874
|
|
|
$
|
373,044
|
|
|
$
|
335,380
|
|
FFO available to common stockholders in excess of distributions paid to common stockholders
|
$
|
38,594
|
|
|
$
|
30,398
|
|
|
$
|
77,920
|
|
|
$
|
55,103
|
|
Weighted average number of common shares used for computation per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
284,928,969
|
|
|
272,588,332
|
|
|
284,469,689
|
|
|
268,024,691
|
|
||||
Diluted
|
285,372,256
|
|
|
273,187,669
|
|
|
284,924,336
|
|
|
268,569,855
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Net income available to common stockholders
|
$
|
96,380
|
|
|
$
|
81,136
|
|
|
$
|
179,543
|
|
|
$
|
152,722
|
|
Cumulative adjustments to calculate FFO
(1)
|
129,702
|
|
|
122,136
|
|
|
271,421
|
|
|
237,761
|
|
||||
FFO available to common stockholders
|
226,082
|
|
|
203,272
|
|
|
450,964
|
|
|
390,483
|
|
||||
Excess of redemption value over carrying value of Class F preferred share redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
13,373
|
|
||||
Amortization of share-based compensation
|
4,995
|
|
|
4,462
|
|
|
8,657
|
|
|
7,215
|
|
||||
Amortization of deferred financing costs
(2)
|
1,014
|
|
|
1,317
|
|
|
1,858
|
|
|
2,804
|
|
||||
Amortization of net mortgage premiums
|
(354
|
)
|
|
(609
|
)
|
|
(813
|
)
|
|
(1,240
|
)
|
||||
(Gain) loss on interest rate swaps
|
(792
|
)
|
|
470
|
|
|
(2,799
|
)
|
|
(859
|
)
|
||||
Leasing costs and commissions
|
(1,536
|
)
|
|
(349
|
)
|
|
(2,452
|
)
|
|
(759
|
)
|
||||
Recurring capital expenditures
|
(135
|
)
|
|
(24
|
)
|
|
(147
|
)
|
|
(365
|
)
|
||||
Straight-line rent
|
(6,267
|
)
|
|
(4,271
|
)
|
|
(11,632
|
)
|
|
(7,554
|
)
|
||||
Amortization of above and below-market leases
|
3,907
|
|
|
4,049
|
|
|
7,771
|
|
|
6,481
|
|
||||
Other adjustments
(3)
|
74
|
|
|
71
|
|
|
142
|
|
|
144
|
|
||||
Total AFFO available to common stockholders
|
$
|
226,988
|
|
|
$
|
208,388
|
|
|
$
|
451,549
|
|
|
$
|
409,723
|
|
AFFO allocable to dilutive noncontrolling interests
|
236
|
|
|
292
|
|
|
465
|
|
|
586
|
|
||||
Diluted AFFO
|
$
|
227,224
|
|
|
$
|
208,680
|
|
|
$
|
452,014
|
|
|
$
|
410,309
|
|
|
|
|
|
|
|
|
|
||||||||
AFFO per common share, basic and diluted
|
$
|
0.80
|
|
|
0.76
|
|
|
$
|
1.59
|
|
|
1.53
|
|
||
Distributions paid to common stockholders
|
$
|
187,488
|
|
|
$
|
172,874
|
|
|
$
|
373,044
|
|
|
$
|
335,380
|
|
AFFO available to common stockholders in excess of distributions paid to common stockholders
|
$
|
39,500
|
|
|
$
|
35,514
|
|
|
$
|
78,505
|
|
|
$
|
74,343
|
|
Weighted average number of common shares used for computation per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
284,928,969
|
|
|
272,588,332
|
|
|
284,469,689
|
|
|
268,024,691
|
|
||||
Diluted
|
285,372,256
|
|
|
273,187,669
|
|
|
284,924,336
|
|
|
268,658,037
|
|
(1)
|
See reconciling items for FFO presented under “Funds from Operations Available to Common Stockholders (FFO).”
|
(2)
|
Includes the amortization of costs incurred and capitalized upon issuance of our notes payable, assumption of our mortgages payable and upon issuance of our term loans. The deferred financing costs are being amortized over the lives of the respective mortgages and term loans. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
|
(3)
|
Includes adjustments allocable to both non-controlling interests and capital lease obligations.
|
•
|
Of
5,483
properties;
|
•
|
With an occupancy rate of
98.7%
, or
5,414
properties leased and
69
properties available for lease;
|
•
|
Leased to
257
different commercial tenants doing business in
48
separate industries;
|
•
|
Located in
49
states and Puerto Rico;
|
•
|
With over
92.0 million
square feet of leasable space; and
|
•
|
With an average leasable space per property of approximately
16,780
square feet; approximately
11,680
square feet per retail property and
228,150
square feet per industrial property.
|
Percentage of Rental Revenue by Industry
|
|||||||||||||||||
|
For the Quarter Ended
June 30, 2018
|
|
For the Years Ended
|
||||||||||||||
|
|
Dec 31,
2017
|
|
Dec 31,
2016
|
|
Dec 31,
2015
|
|
Dec 31,
2014
|
|
Dec 31,
2013
|
|||||||
Aerospace
|
0.9
|
%
|
|
0.9
|
%
|
|
1.0
|
%
|
|
1.1
|
%
|
|
1.2
|
%
|
|
1.2
|
%
|
Apparel stores
|
1.3
|
|
|
1.6
|
|
|
1.9
|
|
|
2.0
|
|
|
2.0
|
|
|
1.9
|
|
Automotive collision services
|
0.9
|
|
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|
0.8
|
|
|
0.8
|
|
Automotive parts
|
1.8
|
|
|
1.3
|
|
|
1.3
|
|
|
1.4
|
|
|
1.3
|
|
|
1.2
|
|
Automotive service
|
2.2
|
|
|
2.2
|
|
|
1.9
|
|
|
1.9
|
|
|
1.8
|
|
|
2.1
|
|
Automotive tire services
|
2.5
|
|
|
2.6
|
|
|
2.7
|
|
|
2.9
|
|
|
3.2
|
|
|
3.6
|
|
Beverages
|
2.5
|
|
|
2.7
|
|
|
2.6
|
|
|
2.7
|
|
|
2.8
|
|
|
3.3
|
|
Book stores
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Child care
|
1.7
|
|
|
1.8
|
|
|
1.9
|
|
|
2.0
|
|
|
2.2
|
|
|
2.8
|
|
Consumer appliances
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
|
0.6
|
|
Consumer electronics
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
Consumer goods
|
0.7
|
|
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
|
0.9
|
|
|
1.0
|
|
Convenience stores
|
10.8
|
|
|
9.6
|
|
|
8.7
|
|
|
9.2
|
|
|
10.1
|
|
|
11.2
|
|
Crafts and novelties
|
0.7
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
Diversified industrial
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
|
0.8
|
|
|
0.5
|
|
|
0.2
|
|
Dollar stores
|
7.4
|
|
|
7.9
|
|
|
8.6
|
|
|
8.9
|
|
|
9.6
|
|
|
6.2
|
|
Drug stores
|
10.3
|
|
|
10.9
|
|
|
11.2
|
|
|
10.6
|
|
|
9.5
|
|
|
8.1
|
|
Education
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
|
0.4
|
|
Electric utilities
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
*
|
|
Entertainment
|
0.4
|
|
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.6
|
|
Equipment services
|
0.4
|
|
|
0.4
|
|
|
0.6
|
|
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
Financial services
|
2.2
|
|
|
2.4
|
|
|
1.8
|
|
|
1.7
|
|
|
1.8
|
|
|
2.0
|
|
Food processing
|
0.5
|
|
|
0.6
|
|
|
1.1
|
|
|
1.2
|
|
|
1.4
|
|
|
1.5
|
|
General merchandise
|
2.2
|
|
|
2.0
|
|
|
1.8
|
|
|
1.7
|
|
|
1.5
|
|
|
1.1
|
|
Government services
|
0.9
|
|
|
1.0
|
|
|
1.1
|
|
|
1.2
|
|
|
1.3
|
|
|
1.4
|
|
Grocery stores
|
5.0
|
|
|
4.4
|
|
|
3.1
|
|
|
3.0
|
|
|
3.0
|
|
|
2.9
|
|
Health and beauty
|
0.2
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Health and fitness
|
7.5
|
|
|
7.5
|
|
|
8.1
|
|
|
7.7
|
|
|
7.0
|
|
|
6.3
|
|
Health care
|
1.6
|
|
|
1.4
|
|
|
1.5
|
|
|
1.7
|
|
|
1.8
|
|
|
1.9
|
|
Home furnishings
|
0.8
|
|
|
0.9
|
|
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
|
1.1
|
|
Home improvement
|
3.0
|
|
|
2.6
|
|
|
2.5
|
|
|
2.4
|
|
|
1.7
|
|
|
1.6
|
|
Insurance
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
Jewelry
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
Machinery
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
Motor vehicle dealerships
|
1.8
|
|
|
2.1
|
|
|
1.9
|
|
|
1.6
|
|
|
1.6
|
|
|
1.6
|
|
Office supplies
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
|
0.5
|
|
Other manufacturing
|
0.7
|
|
|
0.8
|
|
|
0.8
|
|
|
0.7
|
|
|
0.7
|
|
|
0.6
|
|
Packaging
|
1.1
|
|
|
1.0
|
|
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
0.9
|
|
Paper
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Pet supplies and services
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
|
0.8
|
|
Restaurants - casual dining
|
3.5
|
|
|
3.8
|
|
|
3.9
|
|
|
3.8
|
|
|
4.3
|
|
|
5.1
|
|
Restaurants - quick service
|
5.5
|
|
|
5.1
|
|
|
4.9
|
|
|
4.2
|
|
|
3.7
|
|
|
4.4
|
|
Shoe stores
|
0.5
|
|
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
|
0.9
|
|
|
1.0
|
|
Sporting goods
|
1.1
|
|
|
1.4
|
|
|
1.6
|
|
|
1.8
|
|
|
1.6
|
|
|
1.7
|
|
Telecommunications
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
|
0.7
|
|
Theaters
|
5.6
|
|
|
5.0
|
|
|
4.9
|
|
|
5.1
|
|
|
5.3
|
|
|
6.2
|
|
Transportation services
|
5.0
|
|
|
5.4
|
|
|
5.5
|
|
|
5.4
|
|
|
5.2
|
|
|
5.4
|
|
Wholesale clubs
|
3.0
|
|
|
3.3
|
|
|
3.6
|
|
|
3.8
|
|
|
4.1
|
|
|
3.9
|
|
Other
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
Totals
|
100.0
|
%
|
|
100.0
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Property Type
|
Number of Properties
|
|
|
Approximate Leasable Square Feet
|
|
|
Rental Revenue for the Quarter Ended
June 30, 2018
(1)
|
|
|
Percentage of Rental Revenue
|
|
|
Retail
|
5,309
|
|
|
62,021,900
|
|
|
$
|
253,768
|
|
|
80.9
|
%
|
Industrial
|
117
|
|
|
26,694,100
|
|
|
39,755
|
|
|
12.7
|
|
|
Office
|
42
|
|
|
3,104,700
|
|
|
13,603
|
|
|
4.3
|
|
|
Agriculture
|
15
|
|
|
184,500
|
|
|
6,578
|
|
|
2.1
|
|
|
Totals
|
5,483
|
|
|
92,005,200
|
|
|
$
|
313,704
|
|
|
100.0
|
%
|
Tenant
|
Number of
Leases
|
|
|
% of Rental Revenue
|
|
Walgreens
|
220
|
|
|
6.6
|
%
|
FedEx
|
42
|
|
|
4.9
|
%
|
Dollar General
|
544
|
|
|
3.8
|
%
|
LA Fitness
|
54
|
|
|
3.8
|
%
|
7-Eleven
|
254
|
|
|
3.8
|
%
|
Dollar Tree / Family Dollar
|
468
|
|
|
3.5
|
%
|
AMC Theatres
|
32
|
|
|
3.4
|
%
|
Walmart / Sam’s Club
|
51
|
|
|
2.9
|
%
|
Circle K (Couche-Tard)
|
298
|
|
|
2.4
|
%
|
BJ’s Wholesale Clubs
|
15
|
|
|
2.1
|
%
|
Treasury Wine Estates
|
17
|
|
|
2.0
|
%
|
Life Time Fitness
|
11
|
|
|
1.9
|
%
|
CVS Pharmacy
|
82
|
|
|
1.9
|
%
|
Regal Cinemas
|
25
|
|
|
1.9
|
%
|
GPM Investments / Fas Mart
|
213
|
|
|
1.7
|
%
|
Super America / Western Refining
|
133
|
|
|
1.7
|
%
|
TBC Corporation (Sumitomo)
|
159
|
|
|
1.5
|
%
|
Kroger
|
17
|
|
|
1.4
|
%
|
Rite Aid
|
51
|
|
|
1.3
|
%
|
Home Depot
|
15
|
|
|
1.2
|
%
|
|
Retail Rental Revenue for the Quarter Ended
June 30, 2018
(1)
|
|
|
Percentage of Retail Rental Revenue
|
|
|
Tenants Providing Services
|
|
|
|
|||
Automotive collision services
|
$
|
2,888
|
|
|
1.1
|
%
|
Automotive service
|
7,022
|
|
|
2.8
|
|
|
Child care
|
5,245
|
|
|
2.1
|
|
|
Education
|
845
|
|
|
0.3
|
|
|
Entertainment
|
1,279
|
|
|
0.5
|
|
|
Equipment services
|
111
|
|
|
*
|
|
|
Financial services
|
5,902
|
|
|
2.3
|
|
|
Health and fitness
|
23,519
|
|
|
9.3
|
|
|
Health care
|
1,934
|
|
|
0.8
|
|
|
Telecommunications
|
53
|
|
|
*
|
|
|
Theaters
|
17,545
|
|
|
6.9
|
|
|
Transportation services
|
250
|
|
|
0.1
|
|
|
Other
|
74
|
|
|
*
|
|
|
|
66,667
|
|
|
26.2
|
|
|
Tenants Selling Goods and Services
|
|
|
|
|
||
Automotive parts (with installation)
|
1,647
|
|
|
0.6
|
|
|
Automotive tire services
|
7,709
|
|
|
3.0
|
|
|
Convenience stores
|
33,718
|
|
|
13.3
|
|
|
Health and beauty
|
15
|
|
|
*
|
|
|
Motor vehicle dealerships
|
5,710
|
|
|
2.3
|
|
|
Pet supplies and services
|
563
|
|
|
0.2
|
|
|
Restaurants - casual dining
|
10,300
|
|
|
4.1
|
|
|
Restaurants - quick service
|
17,159
|
|
|
6.8
|
|
|
Other
|
*
|
|
|
*
|
|
|
|
76,821
|
|
|
30.3
|
|
|
Tenants Selling Goods
|
|
|
|
|
||
Apparel stores
|
3,955
|
|
|
1.6
|
|
|
Automotive parts
|
3,520
|
|
|
1.4
|
|
|
Book stores
|
112
|
|
|
*
|
|
|
Consumer electronics
|
969
|
|
|
0.4
|
|
|
Crafts and novelties
|
1,914
|
|
|
0.8
|
|
|
Dollar stores
|
23,233
|
|
|
9.2
|
|
|
Drug stores
|
30,957
|
|
|
12.2
|
|
|
General merchandise
|
5,877
|
|
|
2.3
|
|
|
Grocery stores
|
15,680
|
|
|
6.2
|
|
|
Home furnishings
|
2,301
|
|
|
0.9
|
|
|
Home improvement
|
8,011
|
|
|
3.1
|
|
|
Jewelry
|
175
|
|
|
0.1
|
|
|
Office supplies
|
615
|
|
|
0.2
|
|
|
Shoe stores
|
183
|
|
|
0.1
|
|
|
Sporting goods
|
3,433
|
|
|
1.3
|
|
|
Wholesale clubs
|
9,345
|
|
|
3.7
|
|
|
|
110,280
|
|
|
43.5
|
|
|
Totals
|
$
|
253,768
|
|
|
100.0
|
%
|
(1)
|
Includes rental revenue for all retail leases for properties owned at
June 30, 2018
. Excludes revenue of
$59,936
from non-retail leases and
$166
from sold properties.
|
Total Portfolio
(1)
|
|||||||||||||||
|
Expiring
|
|
Approx.
|
|
|
|
|
% of
|
|
||||||
|
Leases
|
|
Leasable
|
|
|
Rental
|
|
|
Rental
|
|
|||||
Year
|
Retail
|
|
|
Non-Retail
|
|
|
Sq. Feet
|
|
|
Revenue
|
|
|
Revenue
|
|
|
2018
|
118
|
|
|
6
|
|
|
704,300
|
|
|
$
|
3,148
|
|
|
1.0
|
%
|
2019
|
269
|
|
|
9
|
|
|
3,548,200
|
|
|
13,053
|
|
|
4.2
|
|
|
2020
|
221
|
|
|
14
|
|
|
4,268,600
|
|
|
13,029
|
|
|
4.2
|
|
|
2021
|
343
|
|
|
14
|
|
|
5,535,800
|
|
|
15,949
|
|
|
5.1
|
|
|
2022
|
402
|
|
|
21
|
|
|
9,921,900
|
|
|
21,357
|
|
|
6.8
|
|
|
2023
|
529
|
|
|
23
|
|
|
9,771,800
|
|
|
28,018
|
|
|
8.9
|
|
|
2024
|
230
|
|
|
12
|
|
|
4,639,100
|
|
|
13,392
|
|
|
4.3
|
|
|
2025
|
337
|
|
|
13
|
|
|
5,139,700
|
|
|
20,111
|
|
|
6.4
|
|
|
2026
|
313
|
|
|
3
|
|
|
4,638,300
|
|
|
15,807
|
|
|
5.0
|
|
|
2027
|
545
|
|
|
5
|
|
|
6,254,400
|
|
|
22,000
|
|
|
7.0
|
|
|
2028
|
330
|
|
|
13
|
|
|
8,795,500
|
|
|
21,148
|
|
|
6.8
|
|
|
2029
|
407
|
|
|
7
|
|
|
7,452,300
|
|
|
21,749
|
|
|
6.9
|
|
|
2030
|
102
|
|
|
14
|
|
|
2,906,100
|
|
|
16,035
|
|
|
5.1
|
|
|
2031
|
295
|
|
|
25
|
|
|
5,863,100
|
|
|
27,195
|
|
|
8.7
|
|
|
2032
|
84
|
|
|
4
|
|
|
3,072,600
|
|
|
11,878
|
|
|
3.8
|
|
|
2033-2043
|
777
|
|
|
3
|
|
|
8,296,300
|
|
|
49,604
|
|
|
15.8
|
|
|
Totals
|
5,302
|
|
|
186
|
|
|
90,808,000
|
|
|
$
|
313,473
|
|
|
100.0
|
%
|
(1)
|
The lease expirations for leases under construction are based on the estimated date of completion of those projects. Excludes revenue of
$231
from
90
expired leases, and
$166
from sold properties at
June 30, 2018
. Leases on our multi-tenant properties are counted separately in the table above.
|
State
|
Number of Properties
|
|
|
Percent Leased
|
|
|
Approximate Leasable Square Feet
|
|
|
Rental Revenue for the Quarter Ended
June 30, 2018
(1)
|
|
|
Percentage of Rental Revenue
|
|
|
Alabama
|
167
|
|
|
98
|
%
|
|
1,585,200
|
|
|
$
|
6,019
|
|
|
1.9
|
%
|
Alaska
|
3
|
|
|
100
|
|
|
422,000
|
|
|
604
|
|
|
0.2
|
|
|
Arizona
|
115
|
|
|
100
|
|
|
1,801,100
|
|
|
6,792
|
|
|
2.2
|
|
|
Arkansas
|
74
|
|
|
100
|
|
|
887,700
|
|
|
2,213
|
|
|
0.7
|
|
|
California
|
186
|
|
|
99
|
|
|
6,079,900
|
|
|
28,253
|
|
|
9.0
|
|
|
Colorado
|
83
|
|
|
99
|
|
|
1,459,000
|
|
|
5,116
|
|
|
1.6
|
|
|
Connecticut
|
22
|
|
|
91
|
|
|
521,100
|
|
|
2,020
|
|
|
0.6
|
|
|
Delaware
|
18
|
|
|
100
|
|
|
93,000
|
|
|
736
|
|
|
0.2
|
|
|
Florida
|
381
|
|
|
99
|
|
|
4,140,000
|
|
|
17,558
|
|
|
5.6
|
|
|
Georgia
|
266
|
|
|
98
|
|
|
4,288,200
|
|
|
13,372
|
|
|
4.3
|
|
|
Idaho
|
12
|
|
|
100
|
|
|
87,000
|
|
|
391
|
|
|
0.1
|
|
|
Illinois
|
260
|
|
|
99
|
|
|
5,798,000
|
|
|
19,360
|
|
|
6.2
|
|
|
Indiana
|
189
|
|
|
98
|
|
|
2,260,900
|
|
|
8,674
|
|
|
2.8
|
|
|
Iowa
|
39
|
|
|
95
|
|
|
2,951,600
|
|
|
4,265
|
|
|
1.4
|
|
|
Kansas
|
99
|
|
|
97
|
|
|
1,894,000
|
|
|
4,916
|
|
|
1.6
|
|
|
Kentucky
|
72
|
|
|
99
|
|
|
1,665,600
|
|
|
4,413
|
|
|
1.4
|
|
|
Louisiana
|
108
|
|
|
98
|
|
|
1,559,500
|
|
|
5,042
|
|
|
1.6
|
|
|
Maine
|
19
|
|
|
100
|
|
|
207,900
|
|
|
1,167
|
|
|
0.4
|
|
|
Maryland
|
37
|
|
|
97
|
|
|
1,017,500
|
|
|
4,866
|
|
|
1.5
|
|
|
Massachusetts
|
77
|
|
|
96
|
|
|
725,100
|
|
|
3,562
|
|
|
1.1
|
|
|
Michigan
|
163
|
|
|
99
|
|
|
1,788,700
|
|
|
6,542
|
|
|
2.1
|
|
|
Minnesota
|
163
|
|
|
99
|
|
|
2,052,600
|
|
|
10,022
|
|
|
3.2
|
|
|
Mississippi
|
139
|
|
|
97
|
|
|
1,613,800
|
|
|
4,714
|
|
|
1.5
|
|
|
Missouri
|
156
|
|
|
97
|
|
|
2,721,000
|
|
|
8,472
|
|
|
2.7
|
|
|
Montana
|
11
|
|
|
100
|
|
|
87,000
|
|
|
461
|
|
|
0.1
|
|
|
Nebraska
|
42
|
|
|
100
|
|
|
775,100
|
|
|
1,930
|
|
|
0.6
|
|
|
Nevada
|
23
|
|
|
100
|
|
|
1,191,100
|
|
|
2,118
|
|
|
0.7
|
|
|
New Hampshire
|
19
|
|
|
100
|
|
|
315,800
|
|
|
1,574
|
|
|
0.5
|
|
|
New Jersey
|
73
|
|
|
100
|
|
|
995,800
|
|
|
5,798
|
|
|
1.8
|
|
|
New Mexico
|
34
|
|
|
100
|
|
|
366,400
|
|
|
1,077
|
|
|
0.3
|
|
|
New York
|
114
|
|
|
100
|
|
|
2,798,300
|
|
|
15,284
|
|
|
4.9
|
|
|
North Carolina
|
182
|
|
|
99
|
|
|
2,778,100
|
|
|
8,869
|
|
|
2.8
|
|
|
North Dakota
|
6
|
|
|
100
|
|
|
117,700
|
|
|
211
|
|
|
0.1
|
|
|
Ohio
|
291
|
|
|
99
|
|
|
6,876,100
|
|
|
15,933
|
|
|
5.1
|
|
|
Oklahoma
|
136
|
|
|
100
|
|
|
1,668,700
|
|
|
4,702
|
|
|
1.5
|
|
|
Oregon
|
28
|
|
|
100
|
|
|
593,300
|
|
|
2,285
|
|
|
0.7
|
|
|
Pennsylvania
|
186
|
|
|
98
|
|
|
2,138,300
|
|
|
8,970
|
|
|
2.9
|
|
|
Rhode Island
|
4
|
|
|
100
|
|
|
161,600
|
|
|
841
|
|
|
0.3
|
|
|
South Carolina
|
164
|
|
|
99
|
|
|
1,653,200
|
|
|
7,097
|
|
|
2.3
|
|
|
South Dakota
|
15
|
|
|
100
|
|
|
195,200
|
|
|
471
|
|
|
0.1
|
|
|
Tennessee
|
250
|
|
|
98
|
|
|
3,590,600
|
|
|
10,640
|
|
|
3.4
|
|
|
Texas
|
638
|
|
|
99
|
|
|
10,255,200
|
|
|
32,900
|
|
|
10.5
|
|
|
Utah
|
21
|
|
|
100
|
|
|
927,700
|
|
|
2,169
|
|
|
0.7
|
|
|
Vermont
|
5
|
|
|
100
|
|
|
98,000
|
|
|
489
|
|
|
0.2
|
|
|
Virginia
|
198
|
|
|
97
|
|
|
3,148,600
|
|
|
9,305
|
|
|
3.0
|
|
|
Washington
|
44
|
|
|
98
|
|
|
737,400
|
|
|
2,839
|
|
|
0.9
|
|
|
West Virginia
|
18
|
|
|
100
|
|
|
395,600
|
|
|
1,293
|
|
|
0.4
|
|
|
Wisconsin
|
123
|
|
|
100
|
|
|
2,437,000
|
|
|
6,924
|
|
|
2.2
|
|
|
Wyoming
|
6
|
|
|
100
|
|
|
54,700
|
|
|
286
|
|
|
0.1
|
|
|
Puerto Rico
|
4
|
|
|
100
|
|
|
28,300
|
|
|
149
|
|
|
*
|
|
|
Totals\Average
|
5,483
|
|
|
99
|
%
|
|
92,005,200
|
|
|
$
|
313,704
|
|
|
100.0
|
%
|
•
|
As we focus on board refreshment, in July 2018, we added two new independent, non-employee directors;
|
•
|
Our Board of Directors is now comprised of ten directors, nine of which are independent, non-employee directors;
|
•
|
Our Board of Directors is elected on an annual basis;
|
•
|
We employ a majority vote standard for uncontested elections;
|
•
|
Our Compensation Committee of the Board of Directors works with independent consultants in conducting annual compensation reviews for our key executives, and compensates each individual primarily based on reaching certain performance metrics that determine the success of our company; and
|
•
|
We adhere to all other corporate governance principles outlined in our “Corporate Governance Guidelines” document on our website.
|
Year of Maturity
|
Fixed rate
debt
|
|
|
Weighted average rate
on fixed rate debt
|
|
|
Variable rate
debt
|
|
|
Weighted average rate
on variable rate debt
|
|
||
2018
|
$
|
2.1
|
|
|
5.59
|
%
|
|
$
|
6.4
|
|
|
4.78
|
%
|
2019
|
4.5
|
|
|
5.59
|
|
|
620.2
|
|
|
3.44
|
|
||
2020
|
82.2
|
|
|
4.99
|
|
|
250.2
|
|
|
3.74
|
|
||
2021
|
310.1
|
|
|
5.72
|
|
|
6.8
|
|
|
5.21
|
|
||
2022
|
1,059.7
|
|
|
3.43
|
|
|
—
|
|
|
—
|
|
||
Thereafter
|
4,218.6
|
|
|
4.12
|
|
|
—
|
|
|
—
|
|
||
Totals
(1)
|
$
|
5,677.2
|
|
|
4.09
|
%
|
|
$
|
883.6
|
|
|
3.55
|
%
|
Fair Value
(2)
|
$
|
5,676.5
|
|
|
|
|
$
|
883.8
|
|
|
|
(1)
|
Excludes net premiums recorded on mortgages payable, net original issuance premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and term loans. At
June 30, 2018
, the unamortized balance of net premiums on mortgages payable is
$5.1 million
, the unamortized balance of net original issuance premiums on notes payable is
$11.1 million
, and the balance of deferred financing costs on mortgages payable is
$209,000
, on notes payable is
$36.2 million
, and on term loans is
$469,000
.
|
(2)
|
We base the estimated fair value of the fixed rate senior notes and bonds at
June 30, 2018
on the indicative market prices and recent trading activity of our senior notes and bonds payable. We base the estimated fair value of our fixed rate and variable rate mortgages at
June 30, 2018
on the relevant forward interest rate curve, plus an applicable credit-adjusted spread. We believe that the carrying value of the credit facility balance and term loans balance reasonably approximate their estimated fair values at
June 30, 2018
.
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•
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619 shares of stock, at a weighted average price of $50.25, in April 2018;
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•
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232 shares of stock, at a weighted average price of $52.07, in May 2018; and
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•
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267 shares of stock, at a weighted average price of $53.13, in June 2018.
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2.1
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2.2
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3.1
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3.2
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3.3
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3.4
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3.5
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4.1
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4.2
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4.3
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4.4
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4.5
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4.6
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4.7
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4.8
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4.9
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4.10
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4.11
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4.12
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4.13
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4.14
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4.15
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4.16
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4.17
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4.18
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4.19
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4.20
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4.21
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4.22
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4.23
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4.24
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4.25
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4.26
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4.27
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*31.1
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*31.2
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*32
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*101
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The following materials from Realty Income Corporation’s Quarterly Report on Form 10-Q for the period ended
June 30, 2018
, formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements.
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REALTY INCOME CORPORATION
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Date: August 2, 2018
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/s/ SEAN P. NUGENT
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Sean P. Nugent
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Senior Vice President, Controller
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(Principal Accounting Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Realty Income Corporation for the quarter ended June 30, 2018;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 2, 2018
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/s/ JOHN P. CASE
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John P. Case
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Realty Income Corporation for the quarter ended June 30, 2018;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 2, 2018
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/s/ PAUL M. MEURER
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Paul M. Meurer
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Executive Vice President,
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Chief Financial Officer and Treasurer
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(i)
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the accompanying quarterly report on Form 10-Q of the Company for the quarter ended June 30, 2018, (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Act”); and
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(ii)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ JOHN P. CASE
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John P. Case
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Chief Executive Officer
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/s/ PAUL M. MEURER
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Paul M. Meurer
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Executive Vice President, Chief Financial Officer and Treasurer
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