R E A L T Y I N C O M E
B U I L D I N G G R O W T H B Y D E S I G N
2 0 2 0 A N N U A L R E P O R T
A B O U T
R E A L T Y
I N C O M E
Realty Income, The Monthly Dividend
Company®, is an S&P 500 company
dedicated to providing stockholders
with dependable monthly income. The
company is structured as a REIT, and its
monthly dividends are supported by the
cash flow from over 6,500 real estate
properties owned under long-term lease
agreements with commercial clients.
T A B L E
O F
C O N T E N T S
2 COMPANY PERFORMANCE
4 LETTER TO SHAREHOLDERS
10 HISTORICAL FINANCIAL PERFORMANCE
12 REAL ESTATE PORTFOLIO
16 DISCIPLINED INVESTMENT PROCESS
18 CONSERVATIVE CAPITAL STRUCTURE
20 DEPENDABLE MONTHLY DIVIDENDS
22 SELECT FINANCIAL DATA
29 COMPANY INFORMATION
A B O U T
T H E
C O V E R
The cubes on the cover, none of which are
the same, symbolize our commitment to
diversity, equality and inclusion (DE&I), a
dynamic corporate culture that encourages
team members to think outside the box,
and a systemic approach to building
company growth by design.
15.3%
TOTAL
4.8%
COMPOUND
4.4%
COMPOUND
SHAREHOLDER
AVERAGE ANNUAL
AVERAGE ANNUAL
RETURN
AFFO PER SHARE
GROWTH
DIVIDEND PER
SHARE GROWTH
P E R F O R M A N C E H I G H L I G H T S
S I N C E 1 9 9 4 N Y S E L I S T I N G ( 1 )
109
DIVIDEND
INCREASES
0
DIVIDEND
REDUCTIONS
93
CONSECUTIVE
QUARTERLY
DIVIDEND
INCREASES
(1)AS OF 12/31/20
1
$2.31
BILLION
INVESTMENT
VOLUME
C O M P A N Y
P E R F O R M A N C E
C O M P O U N D AV E R A G E A N N U A L T O T A L
S H A R E H O L D E R R E T U R N S I N C E 1 9 9 4 N Y S E L I S T I N G ( 1 )
( A S O F D E C E M B E R 3 1 , 2 0 2 0 )
REALTY INCOME
15.3%
NASDAQ COMPOSITE
11.4%
DOW JONES INDUSTRIAL AVERAGE
S&P 500
10.7%
10.4%
EQUITY REIT INDEX
10.1%
(1)Reference page 27 for additional information on total shareholder return
C O M P A R I S O N O F $ 1 0 0 I N V E S T E D I N R E A L T Y I N C O M E
V S . M A J O R S T O C K I N D I C E S ( 1 9 9 4 - 2 0 2 0 )
REALTY INCOME
EQUITY REIT INDEX
DOW JONES INDUSTRIAL AVERAGE
S &P 500
NASDAQ COMPOSITE
$3,331
$1,711
$1,454
$1,350
$1,261
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
12
13
14 15
16
17
18
19 20
E A R N I N G S A N D D I V I D E N D S
COMPOUND AVERAGE ANNUAL GROWTH SINCE 1994 NYSE LISTING
4.8% AFFO PER SHARE GROWTH
4.4% DIVIDEND PER SHARE GROWTH
$3.39
2020 AFFO PER SHARE
$2.81(1)
2020 ANNUALIZED
DIVIDEND PER SHARE
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
11
12
13
14
15
16
17
18
19
20
(1)Annualized dividend amount reflects the December declared dividend rate
per share multiplied by 12. Information as of 12/31/2020.
2
15.3%
$2.31
BILLION
INVESTMENT
VOLUME
2020
PERFORMANCE
HIGHLIGHTS
2.1%
AFFO PER SHARE
GROWTH
3.1%
DIVIDEND PER SHARE
GROWTH
$1.57
BILLION
REVENUE
$2.31
BILLION
INVESTMENT
VOLUME
97.9%
PORTFOLIO
OCCUPANCY
100.0%
RECAPTURE RATE
ON RE-LEASING
ACTIVITY
$4.1
BILLION
CAPITAL RAISED
33
SUMIT ROY, PRESIDENT & CHIEF EXECUTIVE OFFICER
“As I reflect on 2020,
it is clear our success
would not have been
possible without our
many partnerships.
We Are One Team.”
4
D E A R F E L L O W
S H A R E H O L D E R S ,
I want to share how deeply I appreciate our
We remain focused on addressing the
team’s continued commitment to delivering
hardships faced by many and are proud,
and advancing our company’s objectives.
committed and inspired by our resiliency
My colleagues truly represent and embody
and determination to building growth
the great values that have driven our
by design together with our people,
company’s success. The depth and breadth
clients, shareholders, and the communities
of our talented team members remain key
we serve.
competitive advantages which were further
demonstrated during the past year. Our
company, communities, country, and world
faced a challenging and unprecedented
environment over the last year. Now, as in
the past and future, we embrace adversity
for the opportunities it presents and the
lessons we learn.
I am proud of the resiliency of our team,
whose dedication to our shared purpose,
mission, vision, and values continue to drive
our business forward through the persistent
remote-work environment.
I am committed to the resiliency of our
overall real estate portfolio, which ended
the year with portfolio occupancy of 97.9%,
demonstrating the stability of our operations
amid macroeconomic volatility.
I am inspired by the resiliency of our
business, which maintained a strong financial
position and delivered AFFO per share growth
of 2.1% since last year, reflecting the strength
of our clients and partnerships.
As I reflect on 2020, it is clear our success
would not have been possible without our
many partnerships. We Are One Team. We
seek to partner with our stakeholders to
create shared value through diligent execution
of our company’s strategy, constant focus
on improving our company’s risk profile,
and dedication to being a responsible
corporate citizen. We are committed to
promoting the following values:
Do the right thing, because how we act
is as important as what we accomplish.
Take ownership, because our clients’ success
is our success.
Empower each other, so everyone will be
inspired to give their best every day.
Celebrate differences, because diversity,
equality, and inclusion make us stronger.
Give more than we take, in our community
and the environment.
5
We remain committed to corporate
Earlier this year, it was my pleasure to
responsibility today and for our future.
welcome Christie Kelly to our management
During 2020, we continued to advance our
team as Executive Vice President, Chief
environmental, social, and governance (ESG)
Financial Officer and Treasurer. Christie
initiatives. Notably, we expanded our Diversity,
joined our Board of Directors in 2019, served
Equality and Inclusion (DE&I) program to
as a member of our Audit Committee, and
include a formal DE&I Policy Statement,
has been a valuable contributor. Christie
which has been woven into the fabric of
brings significant finance, real estate, and
our culture through ongoing training and
international business experience, and I look
development, leader-led conversations, and
forward to continuing to partner with
active listening. We continued our annual
Christie to advance our company’s
financial contribution to San Diego Habitat
strategies and objectives.
for Humanity, shared our organizational
statement supporting racial and social
equality, and implemented a prompt
response to COVID-19 to benefit and
protect our many stakeholders.
Additionally, in February 2021 we welcomed
Michelle Bushore as Executive Vice President,
Chief Legal Officer, General Counsel and
Secretary. Michelle joins our leadership team
with extensive legal, corporate governance,
Our commitment to environmental
transactional and risk management experience.
responsibility remains steadfast. Alongside
this report, we are proud to issue our
inaugural Sustainability Report which
details our team’s dedicated efforts and
progress on this important journey. Our
Sustainability Report can be found in our
Mike Pfeiffer will remain serving and leading
our company through June 2021 as Chief
Administrative Officer while assisting Christie
and Michelle through their transition until
his retirement.
website’s corporate responsibility section,
Mike first joined Realty Income in 1990, played
and I encourage all stakeholders to read
the Sustainability Report to understand
a pivotal role during the company’s public
listing in 1994, and his contributions have
the significant emphasis we place on these
been instrumental to our growth and success.
initiatives. While our dedicated Sustainability
As the company’s longest tenured executive,
Department drives many of these efforts,
we believe ESG considerations permeate
Mike has been an invaluable leader within our
Realty Income community for all stakeholders
throughout the organization at every level,
and a trusted partner to me. Words cannot
including through active oversight by our
fully reflect on Mike’s positive impact on all
Board of Directors, and I remain focused,
of us, as his impact on our company is part
dedicated and driven to continue integrating
of who we are. Please join me in wishing
these values throughout our One Team in
Mike only the best during his well-deserved
Realty Income and all those we serve.
retirement.
6
OUR 2020 RESULTS
Our disciplined approach to managing the
business continued throughout 2020. During
the year, we grew AFFO per share, or the
cash earnings available to pay dividends
to our shareholders, by 2.1% to $3.39. This
growth allowed us to increase the dividend
by 3.1% as compared to 2019. The continued
strength of our operations enabled us
to increase the dividend while achieving
an AFFO payout ratio of 82.4%, which we
believe provided a comfortable margin of
safety for our shareholders. While our total
shareholder return during 2020 was negative
11.6% assuming reinvestment of dividends,
we like to remind our shareholders that the
company’s stock price does not always move
commensurate with our operating or financial
performance, as external, macroeconomic,
and other factors can impact the company’s
stock price. We seek to deliver favorable
estate transactions sourced and reviewed.
Total investments in the U.K. during 2020
were approximately $921 million, which
continues to validate our view that the
international platform significantly expands
our addressable market for growth. Our
investment strategy continues to focus on
partnering with clients that are high-quality
operators in resilient industries, and we are
pleased that the majority of our investment
volume during 2020 included properties
leased to operators in the grocery, home
improvement, and general merchandise
industries. In addition to our high occupancy
levels of 97.9%, we achieved a 100% rent
recapture rate on re-leasing activity during
the year. Since our public listing in 1994,
year-end occupancy has never been below
96% and, since 1996, we have achieved a rent
recapture rate of over 100% on re-leasing
activity involving over 3,500 leases.
long-term risk-adjusted returns for our
Through turbulent market conditions in
shareholders and, as of year-end, we had
2020, we maintained a strong financial
delivered a compound average annual total
position and remain committed to being
shareholder return since our public listing in
one of only a handful of REITs with at least
1994 of 15.3%. At Realty Income, the dividend
two credit ratings of A3/A- or better by the
remains our strategic and operational lodestar,
major rating agencies. We established a $1.0
and in January of 2020, we were proud to be
billion commercial paper program during the
added to the S&P 500 Dividend Aristocrats®
year, which further strengthens our financial
index for having increased the dividend every
position by providing additional access to
year for the past 25 consecutive years. As of
low-cost debt financing, and we completed
this writing, we are one of only three REITs
our debut public issuance of Sterling-
and 65 companies in this exclusive index.
denominated unsecured notes. In 2020,
During 2020, we invested over $2.3 billion
in high-quality real estate, acquiring less
than 4% of the $63.6 billion in potential real
we raised approximately $1.9 billion of
equity capital and $2.2 billion of long-term
fixed-rate debt, achieving record-low coupon
rates for the respective tenors in the REIT
7
sector for the 5-year and 12-year unsecured
partnering with high-quality operators
notes we issued in December 2020. We
who are leaders in their respective industry.
believe we remain well-positioned for 2021
with a conservative capital structure and
strong liquidity, ending the year with Net
Debt-to-Adjusted EBITDAre of 5.3x, full
availability on our $3.0 billion multi-currency
revolving credit facility, and no outstanding
balance under our $1.0 billion commercial
paper program.
COVID-19
We have prioritized the health and safety of
our team members and community through
numerous efforts during the COVID-19
pandemic, including implementing a remote-
The COVID-19 pandemic created an
unprecedented shock to consumer demand
that impacted industries across the globe.
As a result, certain industries and operators
within our portfolio have been negatively
impacted. Specifically, government-mandated
closures and social-distancing requirements
have affected the theater industry and, to a
lesser extent, the health and fitness industry.
Although these industries are experiencing
challenges, we are pleased to partner
with top operators as we face these
challenges together.
work environment, utilizing technology
LOOKING AHEAD
for communication and collaboration, and
allocating resources to support the wellbeing
of our team. While our focus remains forward-
looking as we seek to leverage our position of
strength for continued growth, it is important
to reflect on and learn from challenging
circumstances like the COVID-19 pandemic.
We are pleased that our top industries of
convenience stores, grocery stores, drug
stores, and dollar stores, which comprise
As I contemplate our company’s current
position and outlook, I am committed,
inspired and optimistic. I believe the quality
of our real estate portfolio is unparalleled in
our company’s history, our global investment
pipeline has never been more active, and a
low interest rate environment has historically
been supportive of our business.
As the largest company within the public net
over 37% of our annualized rental revenue,
lease REIT sector, we are uniquely positioned
sell non-discretionary essential goods and
to leverage our size and scale to pursue
maintained financial strength throughout
growth opportunities.
the pandemic. In fact, we are proud to
partner with many of our clients who play an
important role in addressing the public health
crisis. Our real estate portfolio is deliberately
designed to be resilient through a variety of
economic environments, and we believe the
performance of the portfolio throughout the
challenging economic environment driven by
COVID-19 validates our investment strategy of
Our size and scale contribute to our
financial strength and flexibility – our
two credit ratings of A3/A- allow us access
to low-cost debt capital, our $3.0 billion
multicurrency revolving credit facility and $1.0
billion commercial paper program provide
significant liquidity, and our conservative
capital structure, of which approximately 72%
is equity, positions us favorably to pursue
opportunities.
8
Our size and scale afford us the ability
to expand into new markets – since our
international expansion in 2019, we have
directed our prior successes remain pillars
upon which we will build Realty Income’s
future. We will seek to continue building
acquired over $1.7 billion of high-quality
growth by design through leveraging our
real estate in the United Kingdom, and we
business platform, fostering an innovative
continue to expand our platform as we
environment, and relying upon our proven
review new opportunities and grow our
values of resiliency and growth.
international presence.
Our size and scale allow us to pursue large-
scale portfolio acquisitions – robust access
to capital and the ability to complete large-
Our purpose, which is centered around
building enduring relationships and brighter
financial futures, remains the galvanizing
principle for us. We remain focused on
scale transactions without creating client or
ensuring the stability and growth in earnings
industry diversification issues position us for
and dividends, and we are guided by our
unique opportunities.
mission, vision, and values that culminate in
Our size and scale provide access to data
and resources – leveraging both information
from within our real estate portfolio of over
6,500 properties, as well as alternative and
external data sources, allows us to make
key decisions using best-in-class, and often
seeking to create benefits for all stakeholders.
Across all we do, we take the long view every
day, in every relationship, to provide stability
to the clients we serve, the team we nurture,
the communities we support, and the people
who invest in us.
proprietary, information.
Thank you for your continued support, and for
We believe investments in technology
and a data-driven approach to managing
the business will be pivotal to our future
joining us on our continued journey to being
a reliable partner while working together on
creating a better world.
successes, and we are prioritizing these
Sincerely,
initiatives as we look toward our next chapter.
Our investment appetite remains robust, and
we have the people, processes, and systems
in place to continue evolving and delivering
upon our strategy. We are proud of the
platform our company has built throughout
our 52-year history, and the values which have
Sumit Roy
President & Chief Executive Officer
9
HISTORICAL FINANCIAL PERFORMANCE
(UNAUDITED; DOLLARS IN MILLIONS, except per share data)
(1) Total revenue excludes gains on sales and contractually obligated reimbursements from clients. Prior to 2016, total revenue excluded revenue from Crest Net Lease, a subsidiary of Realty Income.
Consistent with Realty Income’s financial reporting methodology changes, total revenue for 2016 and later includes revenue from Crest Net Lease. In addition, total revenue prior to 2015 included
amounts reclassified to income from discontinued operations.
(2) FFO and AFFO are non-GAAP financial measures. Refer to Management’s Discussion and Analysis in the Company’s 2020 Form 10-K for the definitions of FFO and AFFO and a reconciliation of each
to net income available to common stockholders. For 2012 and 2013, FFO has been adjusted to add back American Realty Capital Trust merger-related costs
(3) Does not include properties held for sale
(4) Includes new properties acquired by Realty Income and Crest Net Lease and properties under development, redevelopment, or expansion
(5) All share and per share amounts reflect the 2-for-1 stock split that occurred on December 31, 2004
(6) Annualized dividend amount reflects the December declared dividend rate per share multiplied by 12
10
For the Years Ended December 31,2020201920182017201620152014201320122011Total revenue(1)$1,572$1,423$1,281 $1,170$1,060$980$895$760$484$422Net income available to common stockholders$395$436$364$302$288$257$228$204$115$133FFO available to common stockholders(2)$1,142$1,040$903$773$735$652$563$462$269$249AFFO available to common stockholders(2)$1,173$1,050$925$839$736$647$562$463$274$253Dividends paid to common stockholders$964$852$762$689$611$533$479$409$236$219AT YEAR ENDReal estate at cost, before accumulated depreciation and amortization(3) $21,016$19,518 $16,541 $15,016$13,864$12,297$11,154$9,899$5,921$4,972Number of properties 6,592 6,483 5,797 5,172 4,9444,5384,3273,8963,0132,634Gross leasable square feet (millions)1111069390837671633827Properties acquired(4)244789764303505286506974423164Cost of properties acquired(4)$2,307$3,715$1,797 $1,519$1,859$1,259$1,402$4,670$1,165$1,016Property dispositions1269312859773846754426Net proceeds from property dispositions$262$109$142$167$91$66$107$134$51$24Number of industries51504847474747474438Portfolio occupancy rate97.9%98.6%98.6%98.4%98.3%98.4%98.4%98.2%97.2%96.7%Remaining weighted average lease term (years)9.09.29.29.59.810.010.210.811.011.3PER COMMON SHARE DATA(5)Net income (diluted)$1.14$1.38$1.26$1.10$1.13$1.09$1.04$1.06$0.86$1.05Funds from operations (“FFO”)(2)$3.31$3.29$3.12$2.82$2.88$2.77$2.58$2.41$2.02$1.98Adjusted funds from operations (“AFFO”)(2)$3.39$3.32$3.19$3.06$2.88$2.74$2.57$2.41$2.06$2.01Dividends paid$2.794$2.711$2.631$2.527$2.392$2.271$2.192$2.147$1.772$1.737Annualized dividend amount(6)$2.814$2.73$2.65$2.55$2.43$2.29$2.20$2.19$1.82$1.75Common shares outstanding (millions)361334304284260250225207133133INVESTMENT RESULTSClosing price on December 31,$62.17 $73.63 $63.04 $57.02$57.48$51.63$47.71$37.33$40.21$34.96Dividend yield(7)(8)4.5%3.7%4.2%4.5%4.6%4.4%5.9%5.3%5.1%5.1%Total return to stockholders(9)(11.8%)21.1%15.2%3.6%16.0%13.0%33.7%(1.8%)20.1%7.3% 2010
2009
2008 2007
2006
2005 2004 2003
2002
2001
2000
1999 1998 1997 1996
1995
1994
$346
$329
$331
$296
$241
$198
$178
$150
$138
$121
$116
$105
$107
$107
$108
$116
$99
$90
$90
$77
$194
$191
$186
$190
$156
$130
$121
$105
$197
$193
$192
$193
$159
$131
$126
$107
$183
$178
$170
$158
$130
$109
$97
$84
$69
$95
$96
$78
$58
$78
$79
$65
$45
$67
$68
$58
$41
$66
$66
$56
$85
$41
$63
$62
$52
$68
$35
$52
$52
$44
$57
$32
$48
$47
$43
$52
$26
$40
$40
$37
$49
$15
$39
$39
$39
$4,113 $3,439 $3,409 $3,239 $2,744 $2,096 $1,691 $1,533 $1,286 $1,178 $1,074 $1,017
$890
$700
$565
$515
$451
2,496
2,339
2,348
2,270
1,955
1,646
1,533 1,404
1,197
1,124
1,068
1,076
970
826
740
685
630
21
186
19
16
19
19
17
13
12
11
10
10
108
357
378
156
194
302
111
117
9
22
9
8
110
149
6
96
5
62
5
58
$714
$58
$190
$534
$770
$487
$215
$372
$139
$156
$99
$181
$193
$142
$56
$65
28
25
29
$27
$20
$28
32
30
30
10
$7
30
13
23
43
35
35
35
21
$11
$23
$35
$23
$20
$40
$45
29
29
30
28
26
25
24
3
$9
24
5
$3
22
10
$4
14
7
$4
8
3
$1
7
4
4
$3
5
$4
5
96.6%
96.8%
97.0%
97.9%
98.7%
98.5%
97.9% 98.1%
97.7%
98.2%
97.7%
98.4%
99.5% 99.2% 99.1%
99.3%
99.4%
11.4
11.2
11.9
13.0
12.9
12.4
12.0
11.8
10.9
10.4
9.8
10.7
10.2
9.8
9.5
9.2
9.5
$1.01
$1.03
$1.06
$1.16
$1.11
$1.12
$1.15 $1.08
$1.01
$0.99
$0.84
$0.76
$0.78 $0.74 $0.70
$0.63
$0.39
$1.83
$1.84
$1.83
$1.89
$1.73
$1.62
$1.53 $1.47
$1.40
$1.33
$1.26
$1.23
$1.18 $1.11 $1.04
$1.00
$0.98
$1.86
$1.86
$1.90
$1.92
$1.77
$1.63
$1.61 $1.50
$1.41
$1.34
$1.27
$1.24
$1.17 $1.10 $1.03
$0.98
$0.98
$1.722 $1.707 $1.662 $1.560 $1.437 $1.346 $1.241 $1.181 $1.151 $1.121 $1.091 $1.043 $0.983 $0.946 $0.931 $0.913 $0.300
$1.73
$1.72
$1.70
$1.64
$1.52
$1.40
$1.32 $1.20
$1.17
$1.14
$1.11
$1.08
$1.02 $0.96 $0.95
$0.93
$0.90
118
104
104
101
101
84
79
76
70
66
53
54
54
51
46
46
39
$34.20 $25.91 $23.15 $27.02 $27.70 $21.62 $25.29 $20.00 $17.50 $14.70 $12.44 $10.31 $12.44 $12.72 $11.94 $11.25
$8.56
6.6%
7.4%
6.1%
5.6%
6.7%
5.3%
6.2%
6.7%
7.8%
9.0%
10.6%
8.4%
7.7%
7.9%
8.3%
10.7%
9.9%
38.6%
19.3%
(8.2%)
3.2%
34.8%
(9.2%) 32.7% 21.0%
26.9%
27.2%
31.2%
(8.7%)
5.5% 14.5% 15.4%
42.0%
28.5%
(7) Dividend yield was calculated by dividing the dividend paid per share, during the year, by the closing share price on December 31 or the last trading day of the preceding year. Dividend yield
excludes special dividends
(8) The 1994 dividend yield is based on the annualized dividends for the period from August 15, 1994 (the date of the consolidation of the predecessors to the Company) to December 31, 1994. The
1994 total return is based on the price change from the opening on October 18, 1994 (the Company’s first day of trading) to December 31, 1994 plus the annualized dividend yield
(9) Total return calculated as the difference between the closing stock price as of period end less the closing stock price as of previous period, plus dividends paid in period, divided by closing stock
price as of end of previous period. Does not include reinvestment of dividends
11
For the Years Ended December 31,2020201920182017201620152014201320122011Total revenue(1)$1,572$1,423$1,281 $1,170$1,060$980$895$760$484$422Net income available to common stockholders$395$436$364$302$288$257$228$204$115$133FFO available to common stockholders(2)$1,142$1,040$903$773$735$652$563$462$269$249AFFO available to common stockholders(2)$1,173$1,050$925$839$736$647$562$463$274$253Dividends paid to common stockholders$964$852$762$689$611$533$479$409$236$219AT YEAR ENDReal estate at cost, before accumulated depreciation and amortization(3) $21,016$19,518 $16,541 $15,016$13,864$12,297$11,154$9,899$5,921$4,972Number of properties 6,592 6,483 5,797 5,172 4,9444,5384,3273,8963,0132,634Gross leasable square feet (millions)1111069390837671633827Properties acquired(4)244789764303505286506974423164Cost of properties acquired(4)$2,307$3,715$1,797 $1,519$1,859$1,259$1,402$4,670$1,165$1,016Property dispositions1269312859773846754426Net proceeds from property dispositions$262$109$142$167$91$66$107$134$51$24Number of industries51504847474747474438Portfolio occupancy rate97.9%98.6%98.6%98.4%98.3%98.4%98.4%98.2%97.2%96.7%Remaining weighted average lease term (years)9.09.29.29.59.810.010.210.811.011.3PER COMMON SHARE DATA(5)Net income (diluted)$1.14$1.38$1.26$1.10$1.13$1.09$1.04$1.06$0.86$1.05Funds from operations (“FFO”)(2)$3.31$3.29$3.12$2.82$2.88$2.77$2.58$2.41$2.02$1.98Adjusted funds from operations (“AFFO”)(2)$3.39$3.32$3.19$3.06$2.88$2.74$2.57$2.41$2.06$2.01Dividends paid$2.794$2.711$2.631$2.527$2.392$2.271$2.192$2.147$1.772$1.737Annualized dividend amount(6)$2.814$2.73$2.65$2.55$2.43$2.29$2.20$2.19$1.82$1.75Common shares outstanding (millions)361334304284260250225207133133INVESTMENT RESULTSClosing price on December 31,$62.17 $73.63 $63.04 $57.02$57.48$51.63$47.71$37.33$40.21$34.96Dividend yield(7)(8)4.5%3.7%4.2%4.5%4.6%4.4%5.9%5.3%5.1%5.1%Total return to stockholders(9)(11.8%)21.1%15.2%3.6%16.0%13.0%33.7%(1.8%)20.1%7.3%
R E A L E S T A T E
P O R T F O L I O
12
Our confidence in continuing to provide
monthly dividends that increase over time
stems from the quality of our real estate
portfolio, which is designed to embody
fortress-like strength and resiliency.
These characteristics were tested during
2020 as the global COVID-19 pandemic
resulted in the temporary closure of properties
with clients in certain industries. Despite
these challenges, the cash flow generating
capacity of our portfolio persevered, resulting
in another year of dividend growth. As of
December 31, 2020, our real estate portfolio
consisted of 6,592 properties, which are
primarily freestanding, net leased, single-client
commercial properties well diversified by:
• CLIENT – Approximately 600 clients
where over half of annualized contractual
rental revenue is generated from investment-
grade rated operators or their subsidiaries
• INDUSTRY – Our clients operate across
51 different industries
• GEOGRAPHY – 49 states, Puerto Rico,
and the United Kingdom
• PROPERTY TYPE – Primarily retail and
industrial
“We have built up our Development team which has
allowed us to expand our efforts in acquiring new assets for
within our existing portfolio. While remaining consistent with
its mission, vision, and values, Realty Income is broadening
its investment possibilities to drive additional
earnings growth.”
Janeen Drakulich
Senior Vice President, Development
PROPERTY TYPE
DIVERSIFICATION
N U M B E R
% O F
O F P R O P E R T I E S R E V E N U E ( 1 )
R E T A I L
6,419
84.4%
I N D U S T R I A L
O F F I C E
A G R I C U L T U R E
115
43
15
10.9%
3.1%
1.6%
( 1 ) B A S ED O N T O T A L P O R T F O L I O A N N U A L I Z E D
C O N T R A C T U A L R E N T A S O F D E C E M B E R 3 1 , 2 0 2 0
TOP 10
INDUSTRIES
% O F
R E V E N U E ( 1 )
C O N V E N IE N C E S T O R E S
G R O C E R Y S T O R E S
D R U G S T O R E S
D O L L A R S T O R E S
H E A L T H A N D F I T N E S S
T H E A T E R S
H O M E I M P R O V E M E N T
T R A N S P O R T A T I O N S E R V I C E S
G E N E R A L M E R C H A N D I S E
11.9%
9.8%
8.2%
7.6%
6.7%
5.6%
5.3%
4.3%
3.9%
3.4%
( 1 )B A S E D O N T O T A L P O R T F O L I O A N N U A L I Z E D C O N T R A C T U A L
R E N T A S O F D E C E M B E R 3 1 , 2 0 2 0 . T H E P R E S E N T A T I O N
O F T O P 1 0 I N D U S T R I E S C O M B I N E S T O T A L P O R T F O L I O
A N N U A L I Z E D C O N T R A C T U A L R E N T C O N T R I B U T I O N
F R O M U . S . A N D U . K . P R O P E R T I E S .
13
construction as well as pursuing value-creation opportunities
R E S T A U R A N T S - Q U I C K S E R V I C E
R E A L E S T A T E
P O R T F O L I O
( C O N T I N U E D )
GEOGR APHIC DIVERSIFIC ATION
As a % of Revenue(1)
<1%
1–2%
2–3%
3–4%
4–5%
5–6%
6–11%
(1)Based on total portfolio annualized rent as of December 31, 2020
SITE AND % REVENUE
TEXAS 10.5% CALIFORNIA 8.8% UNITED KINGDOM 6.2%
ILLINOIS 5.8% FLORIDA 5.3% NEW YORK 4.2%
%
4
.
9
9
PORTFOLIO OCCUPANCY (1 )
%
9
.
7
9
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
( 1 )B Y N U M B E R O F P R O P E R T I E S
14
while innovating judiciously to pursue adjacent
D O L L A R G E N E R A L *
growth verticals that support the generation of
favorable long-term risk adjusted returns.
F E D E X *
D O L L A R T R E E / FA M I LY D O L L A R * 5 5 0
3 . 3 %
activity. Our sustained occupancy levels and
W A L M A R T / S A M ’ S C L U B *
Since our company’s founding in 1969, we have
continued to refine our investment philosophy
to build a real estate portfolio that can perform
throughout any economic cycle. As we look to
the future, we expect our portfolio strategy to
remain anchored to well-located assets leased
to industry-leading operators with strong credit
profiles. 2020 reaffirmed our desire to center
our portfolio around clients that operate in
industries that are “essential” to the consumer,
Throughout our history as a public company,
year-end occupancy has never been below
96% and, since 1996, we’ve achieved a rent
recapture rate of over 100% on re-leasing
favorable re-leasing results reflect the expertise,
talent and experience exhibited by our Asset
Management and Real Estate Operations teams,
who we believe excel at maximizing the value
of our existing real estate portfolio. Going
forward, we will continue to utilize our size and
scale to provide holistic, world-class service
to our clients. Our comprehensive programs
and solutions will seek to not only strengthen
the existing alliances with our clients, but also
increase our profitability.
“Our Asset Management and Real Estate Operations teams
generate sustained portfolio value through a combination
of active asset management and an integrated client-centric
approach. This strategy allows us to leverage our resources to
create mutually beneficial outcomes, ultimately driving internal
growth while strengthening our portfolio.”
Ben Fox
Executive Vice President,
Asset Management & Real Estate Operations
CLIEN T
DIVERSIFICATION
W A L G R E EN S *
7 - E L E V E N*
L A F I T N E S S
S A I N S B U R Y ’ S
N U M B E R
O F L E A S E S
% O F
R E V E N U E ( 1 )
2 4 8
5 . 7 %
4 3 2
7 8 7
4 1
4 . 8 %
4 . 3 %
3 . 7 %
5 6
1 8
5 8
4 1
3 2
1 6
3 . 1 %
3 . 0 %
2 . 9 %
2 . 7 %
2 . 7 %
2 . 4 %
R E G A L C I N E M A S ( C I N E W O R L D )
A M C T H E A T R E S
L I F E T I M E F I T N E S S
C I R C L E K ( C O U C H E -T A R D ) *
2 7 7
1 . 8 %
B J ’ S W H O L E S A L E C L U B S
T R E A S U R Y W I N E E S T A T E S
C V S P H A R M A C Y *
S P E E D W AY ( M A R A T H O N ) *
K R O G E R *
T E S C O *
H O M E D E P O T *
1 5
1 7
8 8
1 6 1
2 2
1 0
2 2
1 . 7 %
1 . 6 %
1 . 5 %
1 . 5 %
1 . 5 %
1 . 4 %
1 . 3 %
G P M I N V E S T M E N T S / F A S M A R T 2 0 2
1 . 3 %
( 1 )B A S E D O N T O T A L P O R T F O L I O A N N U A L I Z E D C O N T R A C T U A L R E N T
A S O F D E C E M B E R 3 1 , 2 0 2 0
* D E N O T E S I N V E S T M E N T G R A D E R A T E D C L I E N T S , W H O A R E O U R
C L I E N T S W I T H A C R E D I T R A T I N G , A N D O U R C L I E N T S T H A T A R E
S U B S I D I A R I E S O R A F F I L I A T E S O F C O M PA N I E S W I T H A C R E D I T
R A T I N G , A S O F 1 2 / 3 1 / 2 0 , O F B A A 3 / B B B - O R H I G H E R F R O M
O N E O F T H E T H R E E M A J O R R A T I N G A G E N C I E S
( M O O D Y ’ S / S & P / F I T C H )
15
D I S C I P L I N E D
I N V E S T M E N T
P R O C E S S
“Despite the tumult of the past year and our physical
“During 2020, our business benefitted from the strength of
separation, we worked closely together as One Team. This
our partnerships, the diligence of our investment approach,
was especially true in our international business, in which
and the experience of our team as we executed on our robust
we invested almost $1.0 billion in high-quality assets in the
investment pipeline to complete over $2.3 billion of acquisitions
UK during 2020. We are grateful to our clients, colleagues
during the year. We will seek to continue leveraging our
and partners for their support in achieving this result.
competitive advantages of size and scale to pursue large
Looking forward, we hope to extend and replicate this
transactions to drive growth in earnings and dividends.”
success in other international markets.”
Neil Abraham
Executive Vice President,
Chief Strategy Officer
Mark Hagan
Executive Vice President,
Chief Investment Officer
16
TOTA L REVEN UE (1 )
(DO LLA RS IN MI LLI ON S)
$1,572
We focus on acquiring freestanding, single-
client commercial properties leased to high
quality clients under long-term, net lease
agreements, typically in excess of 10 years.
In 2020, we reviewed approximately $63.6 billion
of investment opportunities that satisfied one or
more of these criteria, resulting in the selection of
$2.3 billion of real estate investments.
Of these acquisitions, approximately $921 million
was invested internationally across 24 properties
$49
in the UK. Since our first international acquisition
in 2019, we’ve added more than $1.7 billion of
international real estate to our portfolio. We
expect international markets to remain a focus
of our acquisition strategy, as new geographies
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
12 13 14 15 16 17 18 19 20
( 1 )S E E PA G E 1 0 , F O O T N O T E 1 , F O R T H E D E F I N I T I O N O F T O TA L R E V E N U E .
significantly expand our addressable market and,
demographic trends relative to the property’s
therefore, growth opportunities.
All our acquisition opportunities undergo a
rigorous, multi-step internal underwriting and
legal diligence process. The process begins with
a review of the real estate fundamentals. We
intended use, potential alternative uses, and
overall viability of the market.
Next, we carefully review the characteristics,
credit, and overall financial strength of the client
and their industry. Our Research team conducts
target properties located in significant markets or
a thorough financial review and analysis of the
strategic locations critical to generating revenue
client, including an assessment of the store
for the client. We examine the property-
level attributes such as access and signage,
ACQUISITIONS SEL ECTIVITY
(D O LLARS IN BI LLIO NS )
A M O U N T
S O U R C E D
A M O U N T
A C Q U I R E D S E L E C T I V I T Y ( 1 )
2 0 1 0
2 0 1 1
2 0 1 2
2 0 1 3
2 0 1 4
2 0 1 5
2 0 1 6
2 0 1 7
2 0 1 8
2 0 1 9
2 0 2 0
$ 5 . 7
$ 1 3 . 3
$ 1 7. 0
$ 3 9 . 4
$ 2 4 . 3
$ 3 1 . 7
$ 2 8 . 5
$ 3 0 . 4
$ 3 2 . 1
$ 5 7. 4
$ 6 3 . 6
$ 0 . 7 1
$ 1 . 0 2
$ 1 . 1 6
$ 4 . 6 7
$ 1 . 4 0
$ 1 . 2 6
$ 1 . 8 6
$ 1 . 5 2
$ 1 . 8 0
$ 3 . 7 2
$ 2 . 3 1
1 2 %
8 %
7 %
1 2 %
6 %
4 %
7 %
5 %
6 %
7 %
4 %
( 1 )S E L E C T I V I T Y I S C A L C U L A T E D A S T H E A M O U N T O F
A C Q U I S I T I O N S A C Q U I R E D D I V I D E D B Y T H E A M O U N T
O F A C Q U I S I T I O N S S O U R C E D
level performance and retail operations, when
available, to try to identify the client’s highest
performing locations. Our team stays abreast
of industry trends and frequently meets with
industry management representatives to better
understand our clients’ operations.
The information gathered on the real estate,
lease characteristics, client, and industry informs
the suitable price for an investment. Our goal
is to ensure the real estate that we acquire is
appropriately priced relative to replacement cost
and leased at rental rates that are generally in line
with market rent in order to support strong long-
term investment returns generated by each asset.
Our Investment Committee collectively reviews
these characteristics and metrics when making
investment decisions. In addition, investment
opportunities above a certain threshold require
approval by our Board of Directors. We believe
this rigorous selection process maintains the
quality of our investment portfolio and supports
the stability of our cash flow over time.
17
C O N S E R VA T I V E
C A P I T A L
S T R U C T U R E
18
Our commitment to the dividend is
“Our commitment to maintaining low financial leverage, high
demonstrated by the way we manage our
balance sheet. We believe it is important
to maintain a conservative capital structure
primarily comprised of equity. At the end of
2020, our total market capitalization was
$31.3 billion, of which $22.5 billion, or
approximately 71.8%, was common equity.
When we use debt to fund our growth, we
coverage ratios and strong liquidity positioned us well during the
depths of market volatility experienced in 2020. We believe our
size, scale, and access to capital are competitive advantages
that, by design, contribute to our resiliency during even the
most challenging of circumstances. Thank you to our clients,
stockholders and Realty Income team for their dedication during
strive to structure it in a conservative manner.
these unprecedented times.”
Currently, 100% of our outstanding bonds
are fixed rate and unsecured with a weighted
average remaining term to maturity of 8.2 years,
which closely aligns with the weighted average
lease term for our portfolio of 9.0 years. As of
December 31, 2020, our Net Debt-to-Adjusted
EBITDAre(1) ratio was a healthy 5.3x, our fixed
charge coverage ratio was 5.1x, and 100% of
our debt was fixed rate.
As one of only a handful of REITs with at least
two ‘A’ credit ratings, our A3/A- credit ratings
provide us with a low cost of public unsecured
debt. In December 2020, we achieved record-
low coupons in the REIT sector for 5-year and
12-year USD-denominated senior unsecured
notes. Additionally, we completed our debut
public offering of Sterling-denominated senior
unsecured notes, achieving an effective annual
yield to maturity of 1.71% due 2030.
Christie Kelly
Executive Vice President,
Chief Financial Officer and Treasurer
Ample liquidity is key for financial stability
and growth. We maintain a $3.0 billion
multi-currency unsecured revolving line of
credit, which provides us flexibility to close
on acquisitions quickly and opportunistically
raise equity and/or long-term debt when capital
market dynamics are most favorable to us. In
2020, we established a $1.0 billion commercial
paper program, which further enhances our
financial agility by providing additional access
to low-cost short-term liquidity.
(1)Adjusted EBITDAre is a non-GAAP financial measure. Refer to
Management’s Discussion and Analysis in the Company’s 2020
Form 10-K for a definition and reconciliation to net income.
“Our business model is well-situated to appeal to a diverse
array of investor mandates. During 2020, the resiliency of
our cash flow stream allowed us to continue increasing the
dividend during the pandemic, complete another year of
positive earnings growth, and quickly pivot back towards
growth in the second half of the year.”
Jonathan Pong
Senior Vice President,
Head of Corporate Finance
CONS ERVATIVE CA PITA L
STRUCTURE
71.8%
COMMON
EQUITY
AT 1 2/3 1/2 071.8+28.2
28.2%
DEBT
19
D E P E N D A B L E
M O N T H LY
D I V I D E N D S
20
As The Monthly Dividend Company®, we
Since our company’s listing on the NYSE in
remain committed to operating our company
1994, we have increased the dividend every year
in a manner that provides our shareholders
at a compound average annual growth rate of
with dependable monthly dividends that
increase over time. Every business decision we
make is focused on positioning and preparing
approximately 4.4% and have never reduced the
dividend. As of year-end, we are proud to be
one of only three REITs and 65 total companies
our portfolio and balance sheet to continue
in the S&P 500 Dividend Aristocrats® index,
generating predictable cash flow. The dividend
which includes S&P 500 constituents that have
is sacrosanct. Our commitment is evidenced
increased their dividend every year for the last
by our track record of dividend performance.
25 consecutive years.
“As I reflect on my 30+ year tenure at the company, I continue to be
“We’re extremely proud of our team members. At a time of great
impressed by the unparalleled dedication, commitment and mission
uncertainty, we came together and made Realty Income a better
shared by my fellow team members that has resulted in the company’s
place to work. We transitioned our normal day-to-day, and started
impressive growth and success over the many years. More recently I have
to approach our roles and responsibilities in a new way with a fresh
been excited to see the growth of the company’s ESG initiatives as
perspective. We took the opportunity to invent new processes,
these values continue to touch every part of the organization, and
strengthen our client relationships, and build more meaningful
I am inspired by the strategic direction taken in this regard.”
teams – that are united and resilient.”
Michael R. Pfeiffer
Executive Vice President,
Chief Administrative Officer
Shannon Kehle
Senior Vice President,
Human Resources
CONSISTEN T DIVIDEND GROWTH
AN NUALI ZED DIV IDE NDS PE R S HA RE
AN D D IVI DEN D I N CR EASES (1)
4.4% COMPOUND AVERAGE ANNUAL GROWTH RATE
93 CONSECUTIVE QUARTERLY INCREASES
109 DIVIDEND INCREASES SINCE 1994 NYSE LISTING
$2.81
$0.90
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
( 1 )A N N U A L I Z E D D I V I D E N D A M O U N T R E F L E C T S T H E D E C E M B E R D E C L A R E D D I V D I E N D R AT E P E R S H A R E M U LT I P L I E D B Y 1 2
21
S E L E C T
F I N A N C I A L
D A T A ( 1 )
23 CONSOLIDATED BALANCE SHEETS
24 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
25 CONSOLIDATED STATEMENTS OF EQUITY
26 CONSOLIDATED STATEMENTS OF CASH FLOWS
27 REALTY INCOME PERFORMANCE VS. MAJOR STOCK INDICES
(1) This financial data is derived from our audited financial statements found in the company’s 2020 Form 10-K
22
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
At December 31, 2020 and 2019
(Dollars in thousands, except share data)
ASSETS
Real estate held for investment, at cost:
Land
Buildings and improvements
Total real estate held for investment, at cost
Less accumulated depreciation and amortization
Real estate held for investment, net
Real estate and lease intangibles held for sale, net
Cash and cash equivalents
Accounts receivable, net
Lease intangible assets, net
Other assets, net
Total assets
LIABILITIES AND EQUITY
Distributions payable
Accounts payable and accrued expenses
Lease intangible liabilities, net
Other liabilities
Line of credit payable and commercial paper
Term loans, net
Mortgages payable, net
Notes payable, net
Total liabilities
Commitments and contingencies
Stockholders’ equity:
2020
2019
$
6,318,926
$ 5,684,034
14,696,712
21,015,638
13,833,882
19,517,916
(3,549,486)
(3,117,919)
17,466,152
16,399,997
19,004
824,476
285,701
1,710,655
434,297
96,775
54,011
181,969
1,493,383
328,661
$ 20,740,285
$ 18,554,796
$
85,691
$
76,728
241,336
321,198
256,863
-
249,358
300,360
8,267,749
9,722,555
177,039
333,103
262,221
704,335
499,044
410,119
6,288,049
8,750,638
Common stock and paid in capital, par value $0.01 per share,
740,200,000 shares authorized, 361,303,445 and 333,619,106 shares
issued and outstanding as of December 31, 2020 and December 31, 2019,
respectively
Distributions in excess of net income
Accumulated other comprehensive loss
Total stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
14,700,050
12,873,849
(3,659,933)
(3,082,291)
(54,634)
(17,102)
10,985,483
9,774,456
32,247
29,702
11,017,730
9,804,158
$ 20,740,285
$ 18,554,796
The accompanying notes to consolidated financial statements are an integral part of these statements and may be found in the company’s 2020 Form 10-K.
23
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years ended December 31, 2020, 2019 and 2018
(Dollars in thousands, except per share data)
REVENUE
Rental (including reimbursable)
$
1,639,533
$
1,484,818
$
1,321,546
2020
2019
2018
Other
Total revenue
EXPENSES
Depreciation and amortization
Interest
Property (including reimbursable)
General and administrative
Income taxes
Provisions for impairment
Total expenses
Gain on sales of real estate
Foreign currency and derivative gains, net
Loss on extinguishment of debt
Net income
Net income attributable to noncontrolling interests
12,092
6,773
6,292
1,651,625
1,491,591
1,327,838
677,038
309,336
104,603
73,215
14,693
147,232
593,961
290,991
88,585
66,483
6,158
40,186
1,326,117
1,086,364
76,232
4,585
(9,819)
396,506
(1,020)
29,996
2,255
—
437,478
(996)
539,780
266,020
66,326
84,148
5,340
26,269
987,883
24,643
—
—
364,598
(984)
Net income available to common stockholders
$
395,486
$
436,482
$
363,614
Amounts available to common stockholders per common share:
Net income
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
Other comprehensive income:
$
$
1.15
1.14
$
$
1.38
1.38
$
$
1.26
1.26
345,280,126
315,837,012
289,427,430
345,415,258
316,159,277
289,923,984
Net income available to common stockholders
$
395,486
$
436,482
$
363,614
Foreign currency translation adjustment
Unrealized loss on derivatives, net
(2,606)
(34,926)
186
(9,190)
—
(8,098)
Comprehensive income attributable to the Company
$
357,954
$
427,478
$
355,516
The accompanying notes to consolidated financial statements are an integral part of these statements and may be found in the company’s 2020 Form 10-K.
24
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
Years ended December 31, 2020, 2019 and 2018
(Dollars in thousands)
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated
other
comprehensive
loss
Balance, December 31, 2017
284,213,685
$
9,624,264 $
(2,253,763) $
Net income
Other comprehensive loss
Distributions paid and payable
—
—
—
—
-
—
Share issuances, net of costs
19,304,878
1,119,297
Contributions by noncontrolling
interests
Redemption of common units
Reallocation of equity
-
88,182
—
Share-based compensation, net
135,345
-
2,829
(774)
8,879
Total
stockholders’
equity
Noncontrolling
interests
Total equity
$
7,371,501 $
19,207 $ 7,390,708
—
—
363,614
363,614
-
(8,098)
(8,098)
984
—
364,598
(8,098)
(768,506)
—
—
—
—
—
—
—
—
—
—
—
(768,506)
(1,996)
(770,502)
1,119,297
—
1,119,297
-
18,848
18,848
2,829
(5,581)
(2,752)
(774)
8,879
774
—
—
8,879
Balance, December 31, 2018
303,742,090
$ 10,754,495 $
(2,657,655) $
(8,098) $
8,088,742 $
32,236 $ 8,120.978
Net income
Other comprehensive loss
Distributions paid and payable
—
—
—
—
—
—
Share issuances, net of costs
29,818,978
2,117,983
Contributions to noncontrolling
interests
Redemption of common units
Reallocation of equity
—
-
—
Share-based compensation, net
58,038
—
(6,866)
(653)
8,890
436,482
—
436,482
—
(9,004))
(9,004)
996
—
437,478
(9,004)
(861,118)
—
—
—
—
—
—
—
—
—
—
—
(861,118)
(1,296)
(862,414)
2,117,983
—
2,117,983
—
11,370
11.370
(6,866)
(14,257)
(21,123)
(653)
8,890
653
—
—
8,890
Balance, December 31, 2019
333,619,106
$ 12,873,849 $
(3,082,291) $
(17,102) $
9,774,456 $
29,702 $ 9,804,158
Net income
Other comprehensive loss
Distributions paid and payable
—
—
—
—
—
—
Share issuances, net of costs
27,564,163
1,817,978
Contributions by noncontrolling
interests
Reallocation of equity
—
—
—
47
Share-based compensation, net
120,176
8,176
395,486
—
395,486
1,020
396,506
—
(37,532)
(37,532)
—
(37,532)
(973,128)
—
—
—
—
—
—
—
—
—
(973,128)
(1,596)
(974,724)
1,817,978
—
1,817,978
—
47
8,176
3,168
3,168
(47)
—
—
8,176
Balance, December 31, 2020
361,303,445
$ 14,700,050 $
(3,659,933) $
(54,634) $ 10,985,483 $
32,247
$ 11,017,730
The accompanying notes to consolidated financial statements are an integral part of these statements and may be found in the company’s 2020 Form 10-K.
25
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Years ended December 31, 2020, 2019 and 2018
(Dollars in thousands)
CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to net income:
Depreciation and amortization
Loss on extinguishment of debt
Amortization of share-based compensation
Non-cash revenue adjustments
Amortization of net premiums on mortgages payable
Amortization of net premiums on notes payable
Amortization of deferred financing costs
Loss (gain) on interest rate swaps
Foreign currency and derivative gains, net
Gain on sales of real estate
Provisions for impairment on real estate
Change in assets and liabilities
Accounts receivable and other assets
Accounts payable, accrued expenses and other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in real estate
Improvements to real estate, including leasing costs
Proceeds from sales of real estate
Insurance and other proceeds received
Collection of loans receivable
Non-refundable escrow deposits
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to common stockholders
Borrowings on line of credit and commercial paper program
Payments on line of credit and commercial paper program
Principal payment on term loan
Proceeds from notes and bonds payable issued
Principal payment on notes payable
Proceeds from term loan
Payments upon extinguishment of debt
Principal payments on mortgages payable
Proceeds from common stock offerings, net
Proceeds from dividend reinvestment and stock purchase plan
Proceeds from At-the-Market (ATM) program, net
Redemption of common units
Distributions to noncontrolling interests
Net receipts on derivative settlements
Debt issuance costs
Other items, including shares withheld upon vesting
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year
2020
2019
2018
$ 396,506
$ 437,478
$ 364,598
677,038
9,819
16,503
(3,562)
(1,258)
(1,754)
11,003
4,353
(4,585)
(76,232)
147,232
(79,240)
19,720
1,115,543
(2,283,130)
(8,708)
259,459
—
—
—
(2,032,379)
(964,167)
3,528,042
(4,246,755)
(250,000)
2,200,488
(250,000)
—
(9,445)
(108,789)
728,883
9,109
1,094,938
—
(1,596)
4,106
(19,456)
(23,279)
1,692,079
4,431
779,674
71,005
$ 850,679
593,961
—
13,662
(9,338)
(1,415)
(995)
9,795
2,752
(2,255)
(29,996)
40,186
(8,954)
24,056
1,068,937
(3,572,581)
(23,536)
108,911
—
—
(14,603)
(3,501,809)
(852,134)
2,816,632
(2,365,368)
(70,000)
897,664
—
—
—
(20,723)
845,061
8,437
1,264,518
(21,123)
(1,342)
4,881
(9,129)
(4,772)
2,492,602
(9,796)
49,934
21,071
$ 71,005
539,780
—
27,267
(7,835)
(1,520)
(1,256)
9,021
(2,733)
—
(24,643)
26,269
(6,901)
18,695
940,742
(1,769,335)
(25,350)
142,286
7,648
5,267
(200)
(1,639,684)
(761,582)
1,774,000
(1,632,000)
(125,866)
497,500
(350,000)
250,000
—
(21,905)
—
9,114
1,125,364
(2,752)
(1,930)
-
(18,685)
(33,387)
707,871
—
8,929
12,142
$ 21,071
The accompanying notes to consolidated financial statements are an integral part of these statements and may be found in the company’s 2020 Form 10-K.
26
REALTY INCOME PERFORMANCE VS. MAJOR STOCK INDICES
Realty Income
Equity REIT Index(1)
Dow Jones
Industrial Average
S&P 500
NASDAQ Composite
DIVIDEND
YIELD
TOTAL
RETURN (2)
DIVIDE ND
YIELD
TOTAL
RETURN ( 3)
D I VI D EN D
YI E LD
TOTA L
RE TU RN ( 3)
D I VI D EN D
YI E LD
TOTA L
RE TU RN ( 3)
D I VI D EN D
YI E LD
TOTAL
RET URN (4)
10.5%
8.3%
10.8%
42.0%
7.7%
7.4%
0.0%
15.3%
2.9%
2.4%
(1.6%)
36.9%
2.9%
2.3%
(1.2%)
37.6%
0.5%
0.6%
(1.7%)
39.9%
7.9%
15.4%
6.1%
35.3%
2.2%
28.9%
2.0%
23.0%
0.2%
22.7%
7.5%
14.5%
5.5%
20.3%
1.8%
24.9%
1.6%
33.4%
0.5%
21.6%
8.2%
5.5%
7.5%
(17.5%)
1.7%
18.1%
1.3%
28.6%
0.3%
39.6%
10.5%
(8.7%)
8.7%
(4.6%)
1.3%
27.2%
1.1%
21.0%
0.2%
85.6%
8.9%
31.2%
7.5%
26.4%
1.5%
(4.7%)
1.2%
(9.1%)
0.3%
(39.3%)
7.8%
27.2%
7.1%
13.9%
1.9%
(5.5%)
1.4%
(11.9%)
0.3%
(21.1%)
6.7%
26.9%
7.1%
3.8%
2.6%
(15.0%)
1.9%
(22.1%)
0.5%
(31.5%)
6.0%
21.0%
5.5%
37.1%
2.3%
28.3%
1.8%
28.7%
0.6%
50.0%
5.2%
32.7%
4.7%
31.6%
2.2%
5.6%
1.8%
10.9%
0.6%
8.6%
6.5%
(9.2%)
4.6%
12.2%
2.6%
1.7%
1.9%
4.9%
0.9%
1.4%
5.5%
34.8%
3.7%
35.1%
2.5%
19.0%
1.9%
15.8%
0.8%
9.5%
6.1%
3.2%
4.9%
(15.7%)
2.7%
8.8%
2.1%
5.5%
0.8%
9.8%
7.3%
(8.2%)
7.6%
(37.7%)
3.6%
(31.8%)
3.2%
(37.0%)
1.3%
(40.5%)
6.6%
19.3%
3.7%
28.0%
2.6%
22.6%
2.0%
26.5%
1.0%
43.9%
5.1%
38.6%
3.5%
27.9%
2.6%
14.0%
1.9%
15.1%
1.2%
16.9%
5.0%
7.3%
3.8%
8.3%
2.8%
8.3%
2.3%
2.1%
1.3%
(1.8%)
4.5%
20.1%
3.5%
19.7%
3.0%
10.2%
2.5%
16.0%
2.6%
15.9%
5.8%
(1.8%)
3.9%
2.9%
2.3%
29.6%
2.0%
32.4%
1.4%
38.3%
4.6%
33.7%
3.6%
28.0%
2.3%
10.0%
2.0%
13.7%
1.3%
13.4%
4.4%
13.0%
3.9%
2.8%
2.6%
0.2%
2.2%
1.4%
1.4%
5.7%
4.2%
16.0%
4.0%
8.6%
2.5%
16.5%
2.1%
12.0%
1.4%
7.5%
4.5%
3.6%
3.9%
8.7%
2.2%
28.1%
1.9%
21.8%
1.1%
28.2%
4.2%
15.2%
4.4%
(4.0%)
2.5%
(3.5%)
2.2%
(4.4%)
1.4%
(3.9%)
3.7%
21.1%
3.7%
28.7
2.4%
25.3
1.9%
31.5
1.1%
35.2%
4.5%
(11.8%)
3.6%
(5.1%)
1.9%
9.7%
1.5%
18.4%
0.9%
43.6%
10/18–12/31
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
COMPOUND
AVERAGE ANNUAL
TOTAL RETURN(5)
15.3%
10.1%
10.7%
10.4%
11.4%
Note: All of these dividend yields are calculated as annualized dividends based on the last dividend paid in applicable time period divided by the closing price as of period end.
Dividend yield sources: Nareit website and Bloomberg, except for the 1994 NASDAQ dividend yield which was sourced from Datastream / Thomson Financial.
(1) FTSE Nareit US Equity REIT Index, as per Nareit website.
(2) Calculated as the difference between the closing stock price as of period end less the closing stock price as of previous period, plus dividends paid in period, divided by closing stock price
as of end of previous period. Does not include reinvestment of dividends for the annual percentages.
(3) Includes reinvestment of dividends. Source: Nareit website and Factset.
(4) Price only index, does not include dividends as NASDAQ did not report total return metrics for the entirety of the measurement period. Source: Factset.
(5) All of these Compound Average Annual Total Return rates are calculated in the same manner: from Realty Income’s NYSE listing on October 18, 1994 through December 31, 2020, and (except
for NASDAQ) assuming reinvestment of dividends. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes
no representation about its future performance or how it will compare in performance to other indices in the future.
27
TOTAL RETURN PERFORMAN CE
REALTY INCOME CORPORATION
RUSSELL 2000
S&P 500
REALTY INCOME PEER GROUP INDEX*
E
U
L
A
V
X
E
D
N
I
220
200
180
160
140
120
100
80
12/31/15
12/31/16
12/31/17
12/31/18
12/31/19
12/31/20
P E R I O D E N D I N G
I N D E X
12/31/15
12/31/16
12/31/17
12/31/18
12/31/19
12/31/20
Realty Income Corporation
100.00
115.78
120.04
139.16
168.74
149.23
Russell 2000
S&P 500
100.00
121.31
139.08
123.77
155.35
186.36
100.00
111.96
136.40
130.40
171.50
203.05
Realty Income Peer Group Index* 100.00
101.82
103.88
104.07
121.83
104.98
* R E A LT Y I N C O M E P E E R G R O U P I N D E X C O N S I S T S O F 1 8 C O M PA N I E S W I T H A N I M P L I E D M A R K E T C A P I TA L I Z AT I O N B E T W E E N $ 7.1 B I L L I O N A N D $ 4 0 . 3 B I L L I O N
A S O F D E C E M B E R 3 1 , 2 0 2 0 .
28
C O M P A N Y I N F O R M A T I O N
B O A R D O F D I R E C T O R S
Kathleen R. Allen, Ph.D.
Founding Director, Center for
Technology Commercialization,
University of Southern California
A. Larry Chapman
Retired, Executive Vice President,
Head of Commercial Real Estate,
Wells Fargo Bank
Reginald H. Gilyard
Senior Advisor,
Boston Consulting Group, Inc
Priya Cherian Huskins
Senior Vice President and Partner,
Woodruff-Sawyer & Co.
Gregory T. McLaughlin
Chief Executive Officer,
PGA TOUR First Tee Foundation
Gerardo I. Lopez
Operating Partner
and Head of the Operating Group,
SoftBank Investment Advisers
Michael D. McKee
Non-Executive Chairman
Principal, The Contrarian Group
Ronald L. Merriman
Retired Vice Chair and Partner,
KPMG LLP
Sumit Roy
President &
Chief Executive Officer
E X E C U T I V E & S E N I O R O F F I C E R S
Neil Abraham
Executive Vice President,
Chief Strategy Officer
Michelle Bushore
Executive Vice President,
Chief Legal Officer, General
Counsel and Secretary
TJ Chun
Senior Vice President,
Investments & Head of
Asset Management
Janeen S. Drakulich
Senior Vice President,
Development
Ross Edwards
Senior Vice President,
Leasing & Real Estate
Operations
Benjamin N. Fox
Executive Vice President,
Asset Management &
Real Estate Operations
Mark Hagan
Executive Vice President,
Chief Investment Officer
Shannon Jensen
Senior Vice President,
Associate General Counsel
and Assistant Secretary
Christie Kelly
Executive Vice President,
Chief Financial Officer
and Treasurer
Shannon Kehle
Senior Vice President,
Human Resources
Scott Kohnen
Senior Vice President,
Research
Ed Noguera
Managing Director,
Head of Europe
A D D I T I O N A L O F F I C E R S
Greg Azar
Vice President,
Head of Property
Management
Goran Bistric
Vice President,
Strategy
Steve Burchett
Vice President,
Senior Legal Counsel
Kyle Campbell
Vice President,
Senior Legal Counsel,
Risk Management
Elizabeth Cate
Vice President,
Asset Management
Jill Cossasboom
Vice President,
Assistant Controller,
Systems
John R. Couvillion
Vice President,
Development
Austin DeLana
Vice President,
International
Investments
Kristin Ferrell
Vice President,
Head of Lease
Administration
Jonathan Kresser
Vice President,
Finance Operations
Michael Lee
Vice President,
Tax Director
April Little
Vice President,
Acquisitions
Sean P. Nugent
Senior Vice President,
Controller
Michael R. Pfeiffer
Executive Vice President,
Chief Administrative Officer
Jonathan Pong
Senior Vice President,
Head of Corporate Finance
Sumit Roy
President &
Chief Executive Officer
Lori Satterfield
Senior Vice President, Associate
General Counsel, Asset Management
& Real Estate Operations
Cary Wenthur
Senior Vice President,
Managing Director -
Acquisitions
Garret Pavelko
Vice President,
Asset Management,
Office & Industrial
Matt Renner
Vice President,
Assistant Controller,
Corporate Accounting
Joe Stewart
Vice President,
Information Technology
Ann Zhang
Vice President,
Assistant Controller,
Property Accounting
T R A N S F E R A G E N T
For shareholder administration and account
information, please visit Computershare’s
website at www.computershare.com or
call toll-free at 1-877-218-2434.
I N D E P E N D E N T R E G I S T E R E D
P U B L I C A C C O U N T I N G F I R M
KPMG LLP
San Diego, CA
F O R A D D I T I O N A L
C O R P O R A T E I N F O R M A T I O N
Visit the Realty Income corporate
website at www.realtyincome.com
Contact your financial advisor,
or Realty Income at:
877-924-6266
ir@realtyincome.com
Copies of Realty Income’s Annual Report
are available upon written request to:
REALTY INCOME CORPORATION
Attention: Investor Relations
11995 El Camino Real
San Diego, CA 92130
Re
R E A L T Y I N C O M E
1 1 9 9 5 E L C A M I N O R E A L
S A N D I E G O , C A 9 2 1 3 0
W W W . R E A L T Y I N C O M E . C O M