Realty Income Corp Reports Record Adjusted Funds From Operations

Realty Income (O -0.03%) announced after the market closed today its funds from operation rose by 8.3% to $0.65 per share in the first quarter. In total its funds from operations rose by nearly 30% to $134.5 million as a result of significant gains recognized from the acquisitions it made throughout 2013, including American Realty Capital Trust.

Revenue at Realty Income rose from $176 million to $222 million, a gain of 26%. The company recognized a benefit from its acquisitions, which resulted in its single-tenant properties growing from 3,525 to 4,208, a gain of 19.5%, it also saw its occupancy rate rise to 98.3%, its highest level since 2007.

The adjusted funds from operations, which factors out acquisition and other adjustments, reached a record of $0.64 per share, a gain of almost 7% over its results in the first quarter of last year. The company also highlighted that its adjusted funds from operations has risen by almost 40% from $0.46 per share seen in the first quarter of 2010. Its dividend has risen by 28% since 2010, from $0.43 to $0.55.

The company has also been aggressively acquiring and property and issuing shares, as its shares rose from 172 million in the first quarter of last year to 207 million in the most recent quarter, growing by 35 million shares, or 20%. The company also noted it issued an addition 13.8 million shares on April 1 of this year to repay a credit agreement related to its acquisitions.

In the first quarter the company made $656 million of acquisitions, spanning 35 states and involved with 22 different tenants. This was the second highest total dollar value of acquisitions in a quarter in the history of Realty Income.

"Acquisitions again contributed to these positive first quarter results. We are pleased to have continued to add to the portfolio's credit quality and diversification through these acquisitions," noted the CEO of Realty Income, John Case, in the company's earnings announcement. He concluded by remarking, "we are well positioned with ample liquidity to fund 2014 acquisitions activity."