Document
false0000726728 0000726728 2020-02-19 2020-02-19
United States
Securities and Exchange Commission
Washington, D.C. 20549 
Form 8-K
Current Report 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 
Date of report:  February 19, 2020
(Date of Earliest Event Reported) 
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter) 
Maryland
 
1-13374
 
33-0580106
(State or Other Jurisdiction of
Incorporation or Organization)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
11995 El Camino Real, San Diego, California 92130
(Address of principal executive offices) 
(858) 284-5000
(Registrant’s telephone number, including area code) 
N/A
(former name or former address, if changed since last report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange On Which Registered
Common Stock, $0.01 Par Value
O
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐



Item 2.02        Results of Operations and Financial Condition 
On February 19, 2020, Realty Income Corporation (the “Company”) issued a press release setting forth its results of operations for the quarter and year ended December 31, 2019.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  This information, including the information contained in the press release, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not incorporated by reference into any of the Company’s filings, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Additionally, on February 19, 2020, the Company made available on its website a financial supplement containing operating and financial data of the Company (“Supplemental Operating and Financial Data”) for the quarter and year ended December 31, 2019 and such Supplemental Operating and Financial Data is furnished as Exhibit 99.2 hereto.  The Supplemental Operating and Financial Data included as Exhibit 99.2 to this report is being furnished pursuant to this Item 2.02 of Form 8-K and is also being furnished under Item 7.01—“Regulation FD Disclosure” of Form 8-K, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act and is not incorporated by reference into any of the Company’s filings, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Item 7.01        Regulation FD Disclosure. 
On February 19, 2020, the Company made available on its website a financial supplement containing operating and financial data of the Company (“Supplemental Operating and Financial Data”) for the quarter and year ended December 31, 2019 and such Supplemental Operating and Financial Data is furnished as Exhibit 99.2 hereto.  The Supplemental Operating and Financial Data included as Exhibit 99.2 to this report is being furnished pursuant to this Item 7.01 of Form 8-K and is also being furnished under Item 2.02—“Results of Operations and Financial Condition” of Form 8-K, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act and is not incorporated by reference into any of the Company’s filings, whether made before or after the date hereof, regardless of any general incorporation language in any such filing. 
Item 9.01         Financial Statements and Exhibits 
(d)  Exhibits 
99.1   Press release dated February 19, 2020 
99.2   Supplemental Operating and Financial Data for the quarter and year ended December 31, 2019
104 The Form 8-K cover page, formatted in Inline Extensible Business Reporting Language and included as Exhibit 101




SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated: February 19, 2020
REALTY INCOME CORPORATION
 
 
 
By:
/s/ MICHAEL R. PFEIFFER
 
 
Michael R. Pfeiffer
 
 
Executive Vice President, Chief Administrative Officer, General Counsel and Secretary



Exhibit 99.1
pressreleaseheader.jpg


REALTY INCOME ANNOUNCES OPERATING RESULTS FOR
FOURTH QUARTER AND 2019 


SAN DIEGO, CALIFORNIA, February 19, 2020....Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced operating results for the fourth quarter and year ended December 31, 2019. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.

COMPANY HIGHLIGHTS:

For the year ended December 31, 2019:

•
Net income per share was $1.38
•
AFFO per share increased 4.1% to $3.32, compared to 2018
•
Invested $3.7 billion in 789 properties and properties under development or expansion, including $797.8 million in 18 properties in the United Kingdom (U.K.)
•
Generated a rent recapture rate of 102.6% on re-leasing activity
•
Dividends paid per common share increased 3.0%, compared to 2018
•
Raised $2.2 billion from the sale of common stock

For the quarter ended December 31, 2019:

•
Net income per share was $0.39
•
AFFO per share increased 8.9% to $0.86, compared to the quarter ended December 31, 2018
•
Invested $1.7 billion in 556 properties and properties under development or expansion, including $221.0 million in five properties in the U.K.
•
Generated a rent recapture rate of 106.2% on re-leasing activity
•
Raised $582.2 million from the sale of common stock

CEO Comments

“We are pleased to complete another year of strong operating results and favorable risk-adjusted returns for our shareholders, particularly in a year that marked the 50th anniversary of our company’s founding and the 25th anniversary of our public listing,” said Sumit Roy, Realty Income’s President and Chief Executive Officer. “We successfully executed our strategy across all areas of the business, and I would like to thank our talented team for their hard work and dedication in pursuing our mission. We invested approximately $3.7 billion in high-quality real estate during 2019, a record year for property-level acquisitions, including $1.7 billion during the fourth quarter. We ended 2019 with portfolio occupancy of 98.6% while generating a rent recapture rate of approximately 103% on re-leasing activity during the year. To finance our investment activity, we raised over $3.0 billion of capital during 2019 at favorable pricing, including approximately $2.2 billion of equity. This month, we were added to the exclusive S&P 500 Dividend Aristocrats® index as an S&P 500 constituent that has raised its dividend every year for the last 25 consecutive years.”

“Our investment pipeline, both domestic and international, remains robust, and we believe we will continue to enjoy excellent access to well-priced capital. Accordingly, we expect to invest $2.25 billion to $2.75 billion in 2020 based on current market conditions. Combined with the continued strength of our portfolio, we are introducing 2020 AFFO per share guidance of $3.50 to $3.56, representing annual growth of 5.4% to 7.2%.”


pressreleasefooter.jpg

Select Financial Results

The following summarizes our select financial results (dollars in millions, except per share data):
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2019

 
2018

 
2019

 
2018

Total revenue
$
397.5

 
$
342.6

 
$
1,491.6

 
$
1,327.8

Net income available to common stockholders (1)(2)
$
129.3

 
$
85.1

 
$
436.5

 
$
363.6

Net income per share (2)
$
0.39

 
$
0.29

 
$
1.38

 
$
1.26

Funds from operations (FFO) available to common
stockholders (2)(3)
$
280.4

 
$
217.7

 
$
1,039.6

 
$
903.3

FFO per share (2)
$
0.85

 
$
0.73

 
$
3.29

 
$
3.12

Adjusted funds from operations (AFFO) available to common
stockholders (3)
$
282.0

 
$
236.8

 
$
1,050.0

 
$
924.6

AFFO per share
$
0.86

 
$
0.79

 
$
3.32

 
$
3.19

(1) The calculation to determine net income for a real estate company includes provisions for impairment, gains on sales of real estate, and foreign currency gains and losses. These items can vary from quarter to quarter and can significantly impact net income and period to period comparisons.
(2) Net income available to common stockholders and FFO in 2018 were impacted by a severance payment made to our former chief executive officer (CEO) in October 2018. The total value of cash, stock compensation and professional fees incurred as a result of this severance was $28.3 million; however, the net amount, after incorporating accruals for the CEO compensation previous to this severance, was $18.7 million, equivalent to $0.06 per share.
(3) The company considers FFO and AFFO to be appropriate supplemental measures of a Real Estate Investment Trust’s (REIT’s) operating performance. Realty Income defines FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts’ (Nareit’s) definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, and reduced by gains on property sales. AFFO further adjusts FFO for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company’s ongoing operating performance. Presentation of the information regarding FFO and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered as measures of liquidity, our ability to make cash distributions, or our ability to pay interest payments. See the reconciliations of net income available to common stockholders to FFO and AFFO on pages seven and eight of this press release.

Dividend Increases
In December 2019, Realty Income announced the 89th consecutive quarterly dividend increase, which is the 104th increase in the amount of the dividend since the company’s listing on the New York Stock Exchange (NYSE) in 1994. The annualized dividend amount as of December 31, 2019 was $2.73 per share. The amount of monthly dividends paid per share increased 3.0% to $2.711 in 2019, as compared to $2.631 in 2018. The company distributed $852.1 million in common dividends to shareholders in 2019, representing 81.2% of its AFFO of $1.05 billion.

In January 2020, Realty Income announced an increase of the February 2020 annualized dividend to $2.79 per share, as compared to the February 2019 annualized dividend amount of $2.706, which represents an increase of 3.1%. The new monthly dividend amount of $0.2325 per share was paid on February 14, 2020.

Real Estate Portfolio Update

As of December 31, 2019, Realty Income’s portfolio consisted of 6,483 properties located in 49 U.S. states, Puerto Rico and the U.K., leased to 301 different commercial tenants doing business in 50 industries. The properties are primarily freestanding and leased under long-term, net lease agreements with a weighted average remaining lease term of 9.2 years. The company's portfolio of commercial real estate continues to perform well and provides dependable rental revenue supporting the payment of monthly dividends. As of December 31, 2019, portfolio occupancy was 98.6% with 94 properties available for lease out of the 6,483, as compared to 98.3% as of September 30, 2019 and 98.6% as of December 31, 2018.








- 2 -

Changes in Occupancy
Properties available for lease at September 30, 2019
102

Lease expirations
44

Re-leases to same tenant (1)
(25
)
Re-leases to new tenant (1)(2)
(3
)
Dispositions
(24
)
Properties available for lease at December 31, 2019
94

(1) 
The annual new rent on these re-leases was $6.457 million, as compared to the previous annual rent of $6.079 million on the same properties, representing a rent recapture rate of 106.2% on the properties re-leased during the quarter ended December 31, 2019.
(2) 
Re-leased to two new tenants after a period of vacancy, and one new tenant without vacancy.
Properties available for lease at December 31, 2018
80

Lease expirations
304

Re-leases to same tenant (1)
(199
)
Re-leases to new tenant (1)(2)
(15
)
Dispositions
(76
)
Properties available for lease at December 31, 2019
94

(1) 
The annual new rent on these re-leases was $54.978 million, as compared to the previous annual rent of $53.605 million on the same properties, representing a rent recapture rate of 102.6% on the properties re-leased during the year ended December 31, 2019.
(2) 
Re-leased to eight new tenants after a period of vacancy, and seven new tenants without vacancy.

Investments in Real Estate
The following table summarizes our acquisitions in the U.S. and U.K. for the periods indicated below:
 
Number of Properties

 
Square Feet
(in millions)

 
Investment
($ in millions)

 
Weighted Average Lease Term (Years)

 
Initial Average Cash Lease Yield

Three months ended December 31, 2019
 
 
 
 
 
 
 
 
 
Acquisitions - U.S. (in 42 states)
539

 
5.4

 
$
1,447.9

 
10.5

 
7.0
%
Acquisitions - U.K. (1)
5

 
0.4

 
221.0

 
17.1

 
5.2
%
Total Acquisitions
544

 
5.8

 
1,668.9

 
11.2

 
6.8
%
Properties under Development - U.S.
12

 
0.3

 
20.6

 
13.5

 
7.1
%
Total (2)
556

 
6.1

 
$
1,689.5

 
11.2

 
6.8
%
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2019
 
 
 
 
 
 
 
 
 
Acquisitions - U.S. (in 45 states)
753

 
11.6

 
$
2,860.8

 
13.0

 
6.8
%
Acquisitions - U.K. (1)
18

 
1.6

 
797.8

 
15.6

 
5.2
%
Total Acquisitions
771

 
13.2

 
3,658.6

 
13.4

 
6.4
%
Properties under Development - U.S.
18

 
0.5

 
56.6

 
15.1

 
7.3
%
Total (3)
789

 
13.7

 
$
3,715.2

 
13.5

 
6.4
%
 
 
 
 
 
 
 
 
 
 
(1) 
Represents investments of £169.7 million Sterling during the quarter ended December 31, 2019 and £625.8 million Sterling during the year ended December 31, 2019 converted at the applicable exchange rate on the date of acquisition.
(2) 
The tenants occupying the new properties operate in 26 industries, and are 100.0% retail, based on rental revenue. Approximately 47% of the rental revenue generated from acquisitions during the fourth quarter of 2019 is from investment grade rated tenants, their subsidiaries or affiliated companies.
(3) 
The tenants occupying the new properties operate in 31 industries, and are 94.6% retail and 5.4% industrial, based on rental revenue. Approximately 36% of the rental revenue generated from acquisitions during 2019 is from investment grade rated tenants, their subsidiaries or affiliated companies.

- 3 -

Rent Increases
The following summarizes our same store rents on 4,811 properties under lease (dollars in millions):
 
Quarter Ended December 31,
 
Year Ended December 31,
 
Increase
 
2019

 
2018

 
2019

 
2018

 
Three months

 
Twelve months

Rental Revenue
$
296.5

 
$
290.8

 
$
1,175.6

 
$
1,157.6

 
2.0
%
 
1.6
%

Property Dispositions
The following summarizes our property dispositions (dollars in millions):
 
Quarter Ended
December 31, 2019
 
Year Ended
December 31, 2019
Properties sold
29

 
93

Net sales proceeds
$
36.3

 
$
108.9

Gain on sales of real estate
$
14.2

 
$
30.0


Liquidity and Capital Markets

Equity Capital Raising
During the quarter ended December 31, 2019, Realty Income raised $582.2 million from the sale of common stock at a weighted average price of $75.52 per share. During 2019, Realty Income raised $2.2 billion from the sale of common stock at a weighted average price of $72.40 per share.

Credit Facility
Realty Income has an unsecured revolving credit facility, which is comprised of a $3.0 billion revolving credit facility, with an initial term that expires in March 2023 (subject to two six-month options to extend), and a $250.0 million term loan due March 2024. The revolving credit facility also has a $1.0 billion expansion feature. As of December 31, 2019, the balance of borrowings outstanding under our revolving credit facility was $704.3 million.

Early Redemption of 5.75% Notes Due January 2021
In January 2020, we completed the early redemption on all $250.0 million in principal amount of our outstanding 5.750% Notes due January 2021, plus accrued and unpaid interest. As a result of the early redemption, we will recognize an estimated $9.8 million loss on extinguishment of debt during the first quarter of 2020.

2020 Earnings Guidance

We estimate AFFO per share for 2020 of $3.50 to $3.56. AFFO adjusts FFO for unique revenue and expense items, which are not as pertinent to the measurement of Realty Income’s ongoing operating performance.

We estimate FFO per share for 2020 of $3.45 to $3.51, inclusive of a $0.03 per share loss due to the early redemption of the 5.750% Notes due 2021. FFO per share for 2020 is based on a net income per share range of $1.42 to $1.48, plus estimated real estate depreciation and impairments of $2.09 per share, and reduced by potential estimated gains on sales of investment properties of $0.06 per share (in accordance with Nareit’s definition of FFO).

Additional earnings guidance detail can be found in Realty Income’s supplemental materials available on Realty Income’s corporate website at www.realtyincome.com/investors/financial-information/quarterly-results.

Conference Call Information

In conjunction with the release of Realty Income’s operating results, the company will host a conference call on
February 20, 2020 at 11:30 a.m. PT to discuss the results. To access the conference, dial (877) 701-6180. When prompted, provide the conference ID 9079776.


- 4 -

A telephone replay of the conference call can also be accessed by calling (800) 585-8367 and entering the passcode 9079776. The telephone replay will be available through March 5, 2020. A live webcast will be available in listen-only mode by clicking on the webcast link on the company’s home page or in the investors section at www.realtyincome.com.

A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. The webcast replay will be available through March 5, 2020. No access code is required for this replay.

Supplemental Materials

Supplemental materials on fourth quarter and 2019 operating results are available on Realty Income’s corporate website at www.realtyincome.com/investors/financial-information/quarterly-results.

About Realty Income

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 6,400 real estate properties owned under long-term lease agreements with commercial tenants. To date, the company has declared 596 consecutive common stock monthly dividends throughout its 51-year operating history and increased the dividend 105 times since Realty Income's public listing in 1994 (NYSE: O). The company is a member of the S&P 500 Dividend Aristocrats® index. Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, domestic and foreign real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, changes in foreign currency exchange rates, property acquisitions and the timing of these acquisitions, charges for property impairments, and the outcome of any legal proceedings to which the company is a party, as described in the company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

Investor Contact:
Jonathan Pong, CFA, CPA
SVP, Capital Markets and Finance
(858) 284-5177

- 5 -

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts) (unaudited)
 
 
Three Months

 
Three Months

 
Year Ended

 
Year Ended

 
 
Ended 12/31/19

 
Ended 12/31/18

 
12/31/19

 
12/31/18

REVENUE
 
 
 
 
 
 
 
 
Rental (including reimbursable)
 
$
394,217

 
$
341,181

 
$
1,484,818

 
$
1,321,546

Other
 
3,312

 
1,395

 
6,773

 
6,292

Total revenue
 
397,529

 
342,576

 
1,491,591

 
1,327,838

 
 
 
 
 
 
 
 
 
EXPENSES
 
 
 
 
 
 
 
 
Depreciation and amortization
 
156,594

 
137,711

 
593,961

 
539,780

Interest
 
75,073

 
70,635

 
290,991

 
266,020

General and administrative
 
16,330

 
34,178

 
66,483

 
84,148

Property (including reimbursable)
 
25,253

 
17,732

 
88,585

 
66,326

Income taxes
 
1,736

 
1,607

 
6,158

 
5,340

Provisions for impairment
 
8,950

 
1,235

 
40,186

 
26,269

Total expenses
 
283,936

 
263,098

 
1,086,364

 
987,883

Gain on sales of real estate
 
14,168

 
5,825

 
29,996

 
24,643

Foreign currency and derivative gains, net
 
1,792

 
—

 
2,255

 
—

Net income
 
129,553

 
85,303

 
437,478

 
364,598

Net income attributable to noncontrolling interests
 
(256
)
 
(231
)
 
(996
)
 
(984
)
Net income available to common stockholders
 
$
129,297

 
$
85,072

 
$
436,482

 
$
363,614

 
 
 
 
 
 
 
 
 
Funds from operations available to common stockholders (FFO)
 
$
280,396

 
$
217,743

 
$
1,039,591

 
$
903,257

Adjusted funds from operations available to common stockholders (AFFO)
 
$
281,986

 
$
236,813

 
$
1,050,015

 
$
924,558

 
 
 
 
 
 
 
 
 
Per share information for common stockholders:
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
Basic and Diluted
 
$
0.39

 
$
0.29

 
$
1.38

 
$
1.26

 
 
 
 
 
 
 
 
 
FFO:
 
 
 
 
 
 
 
 
Basic and Diluted
 
$
0.85

 
$
0.73

 
$
3.29

 
$
3.12

 
 
 
 
 
 
 
 
 
AFFO:
 
 
 
 
 
 
 
 
Basic
 
$
0.86

 
$
0.80

 
$
3.32

 
$
3.19

Diluted
 
$
0.86

 
$
0.79

 
$
3.32

 
$
3.19

 
 
 
 
 
 
 
 
 
Cash dividends paid per common share
 
$
0.681

 
$
0.662

 
$
2.711

 
$
2.631



- 6 -

FUNDS FROM OPERATIONS (FFO)
(dollars in thousands, except per share amounts)

We define FFO, a non-GAAP measure, consistent with Nareit’s definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of real estate assets, reduced by gains on real estate sales.
 
 
Three Months

 
Three Months

 
Year Ended

 
Year Ended

 
 
Ended 12/31/19

 
Ended 12/31/18

 
12/31/19

 
12/31/18

 
 
 
 
 
 
 
 
 
Net income available to common stockholders
 
$
129,297

 
$
85,072

 
$
436,482

 
$
363,614

Depreciation and amortization
 
156,594

 
137,711

 
593,961

 
539,780

Depreciation of furniture, fixtures and equipment
 
(127
)
 
(158
)
 
(565
)
 
(650
)
Provisions for impairment
 
8,950

 
1,235

 
40,186

 
26,269

Gain on sales of real estate
 
(14,168
)
 
(5,825
)
 
(29,996
)
 
(24,643
)
FFO adjustments allocable to noncontrolling interests
 
(150
)
 
(292
)
 
(477
)
 
(1,113
)
FFO available to common stockholders
 
$
280,396

 
$
217,743

 
$
1,039,591

 
$
903,257

FFO allocable to dilutive noncontrolling interests
 
372

 
473

 
1,403

 
867

Diluted FFO
 
$
280,768

 
$
218,216

 
$
1,040,994

 
$
904,124

 
 
 
 
 
 
 
 
 
FFO per common share:
 
 
 
 
 
 
 
 
Basic and Diluted
 
$
0.85

 
$
0.73

 
$
3.29

 
$
3.12

 
 
 
 
 
 
 
 
 
Distributions paid to common stockholders
 
$
222,476

 
$
196,834

 
$
852,134

 
$
761,582

 
 
 
 
 
 
 
 
 
FFO available to common stockholders in excess of distributions paid to common stockholders
 
$
57,920

 
$
20,909

 
$
187,457

 
$
141,675

 
 
 
 
 
 
 
 
 
Weighted average number of common shares used for FFO:
 
 
 
 
 
 
 
 
Basic
 
328,565,734

 
297,730,206

 
315,837,012

 
289,427,430

Diluted
 
329,364,027

 
298,609,734

 
316,601,350

 
289,923,984



- 7 -

ADJUSTED FUNDS FROM OPERATIONS (AFFO)
(dollars in thousands, except per share amounts) 

We define AFFO as FFO adjusted for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company’s ongoing operating performance.  Most companies in our industry use a similar measurement to AFFO, but they may use the term “CAD” (for Cash Available for Distribution) or “FAD” (for Funds Available for Distribution). 
 
 
Three Months

 
Three Months

 
Year Ended

 
Year Ended

 
 
Ended 12/31/19

 
Ended 12/31/18

 
12/31/19

 
12/31/18

Net income available to common stockholders
 
$
129,297

 
$
85,072

 
$
436,482

 
$
363,614

Cumulative adjustments to calculate FFO (1)
 
151,099

 
132,671

 
603,109

 
539,643

FFO available to common stockholders
 
280,396

 
217,743

 
1,039,591

 
903,257

Executive severance charge (2)
 
—

 
18,651

 
—

 
18,651

Amortization of share-based compensation
 
3,184

 
2,943

 
13,662

 
15,470

Amortization of deferred financing costs (3)
 
1,283

 
1,119

 
4,754

 
3,991

Amortization of net mortgage premiums
 
(354
)
 
(354
)
 
(1,415
)
 
(1,520
)
Loss (gain) on interest rate swaps
 
694

 
331

 
2,752

 
(2,733
)
Straight-line payments from cross-currency swaps (4)
 
1,762

 
—

 
4,316

 
—

Leasing costs and commissions
 
(222
)
 
(1,076
)
 
(2,102
)
 
(3,907
)
Recurring capital expenditures
 
(224
)
 
(555
)
 
(801
)
 
(1,084
)
Straight-line rent
 
(8,940
)
 
(6,480
)
 
(28,674
)
 
(24,687
)
Amortization of above and below-market leases
 
6,109

 
4,427

 
19,336

 
16,852

Other adjustments (5)
 
(1,702
)
 
64

 
(1,404
)
 
268

AFFO available to common stockholders
 
$
281,986

 
$
236,813

 
$
1,050,015

 
$
924,558

AFFO allocable to dilutive noncontrolling interests
 
378

 
487

 
1,442

 
901

Diluted AFFO
 
$
282,364

 
$
237,300

 
$
1,051,457

 
$
925,459

 
 
 
 
 
 
 
 
 
AFFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.86

 
$
0.80

 
$
3.32

 
$
3.19

Diluted
 
$
0.86

 
$
0.79

 
$
3.32

 
$
3.19

 
 
 
 
 
 
 
 
 
Distributions paid to common stockholders
 
$
222,476

 
$
196,834

 
$
852,134

 
$
761,582

 
 
 
 
 
 
 
 
 
AFFO available to common stockholders in excess of distributions paid to common stockholders
 
$
59,510

 
$
39,979

 
$
197,881

 
$
162,976

 
 


 


 


 


Weighted average number of common shares used for AFFO:
 
 
 
 
 
 
Basic
 
328,565,734

 
297,730,206

 
315,837,012

 
289,427,430

Diluted
 
329,364,027

 
298,609,734

 
316,601,350

 
289,923,984


(1) 
See FFO calculation on page seven for reconciling items.
(2) 
The executive severance charge represents the incremental costs incurred upon our former CEO's departure in October 2018 per the reconciliation below:
Cash
$
9,817

Stock compensation
17,902

Professional fees
574

Total value of severance
28,293

Amount accrued for CEO compensation prior to separation
(9,642
)
Incremental severance
$
18,651

(3) 
Includes the amortization of costs incurred and capitalized upon issuance of our notes payable, assumption of our mortgages payable and issuance of our term loans. The deferred financing costs are being amortized over the lives of the respective notes payable, mortgages and term loans. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
(4) 
Straight-line payments from cross-currency swaps represent quarterly payments in U.S. dollars received by us from counterparties in exchange for associated foreign currency payments. These USD payments are fixed and determinable for the duration of the associated hedging transaction.
(5) 
Includes adjustments allocable to noncontrolling interests, obligations related to financing lease liabilities, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions.


- 8 -

HISTORICAL FFO AND AFFO
(dollars in thousands, except per share amounts)
For the three months ended December 31,
 
2019

 
2018

 
2017

 
2016

 
2015

 
 
 
 
 
 
 
 
 
 
 
Net income available to common stockholders
 
$
129,297

 
$
85,072

 
$
60,852

 
$
85,671

 
$
76,171

Depreciation and amortization, net of furniture, fixtures and equipment
 
156,467

 
137,553

 
126,915

 
117,580

 
105,537

Provisions for impairment
 
8,950

 
1,235

 
6,679

 
3,709

 
1,378

Gain on sales of real estate
 
(14,168
)
 
(5,825
)
 
(23,208
)
 
(6,696
)
 
(5,126
)
FFO adjustments allocable to noncontrolling interests
 
(150
)
 
(292
)
 
(250
)
 
(431
)
 
(52
)
 
 
 
 
 
 
 
 
 
 
 
FFO
 
$
280,396

 
$
217,743

 
$
170,988

 
$
199,833

 
$
177,908

 
 
 
 
 
 
 
 
 
 
 
FFO per diluted share
 
$
0.85

 
$
0.73

 
$
0.61

 
$
0.77

 
$
0.71

 
 
 
 
 
 
 
 
 
 
 
AFFO
 
$
281,986

 
$
236,813

 
$
215,312

 
$
192,964

 
$
170,023

 
 
 
 
 
 
 
 
 
 
 
AFFO per diluted share
 
$
0.86

 
$
0.79

 
$
0.76

 
$
0.75

 
$
0.68

 
 
 
 
 
 
 
 
 
 
 
Cash dividends paid per share
 
$
0.681

 
$
0.662

 
$
0.636

 
$
0.606

 
$
0.572

 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding - FFO
 
329,364,027

 
298,609,734

 
282,023,488

 
259,010,432

 
249,508,956

 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding - AFFO
 
329,364,027

 
298,609,734

 
282,428,692

 
259,010,432

 
249,508,956

 
For the year ended December 31,
 
2019

 
2018

 
2017

 
2016

 
2015

 
 
 
 
 
 
 
 
 
 
 
Net income available to common stockholders
 
$
436,482

 
$
363,614

 
$
301,514

 
$
288,491

 
$
256,686

Depreciation and amortization, net of furniture, fixtures and equipment
 
593,396

 
539,130

 
498,231

 
449,196

 
408,404

Provisions for impairment
 
40,186

 
26,269

 
14,751

 
20,664

 
10,560

Gain on sales of real estate
 
(29,996
)
 
(24,643
)
 
(40,898
)
 
(21,979
)
 
(22,243
)
FFO adjustments allocable to noncontrolling interests
 
(477
)
 
(1,113
)
 
(933
)
 
(977
)
 
(970
)
 
 
 
 
 
 
 
 
 
 
 
FFO
 
$
1,039,591

 
$
903,257

 
$
772,665

 
$
735,395

 
$
652,437

 
 
 
 
 
 
 
 
 
 
 
FFO per diluted share
 
$
3.29

 
$
3.12

 
$
2.82

 
$
2.88

 
$
2.77

 
 
 
 
 
 
 
 
 
 
 
AFFO
 
$
1,050,015

 
$
924,558

 
$
838,638

 
$
736,374

 
$
647,028

 
 
 
 
 
 
 
 
 
 
 
AFFO per diluted share
 
$
3.32

 
$
3.19

 
$
3.06

 
$
2.88

 
$
2.74

 
 
 
 
 
 
 
 
 
 
 
Cash dividends paid per share
 
$
2.711

 
$
2.631

 
$
2.527

 
$
2.392

 
$
2.271

 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding - FFO
 
316,601,350

 
289,923,984

 
273,936,752

 
255,822,679

 
235,891,368

 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding - AFFO
 
316,601,350

 
289,923,984

 
274,024,934

 
255,822,679

 
235,891,368




- 9 -

REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data) (unaudited)
 
 
December 31, 2019

 
December 31, 2018

ASSETS
 
 
 
 
Real estate, at cost:
 
 
 
 
Land
 
$
5,684,034

 
$
4,682,660

Buildings and improvements
 
13,833,882

 
11,858,806

Total real estate, at cost
 
19,517,916

 
16,541,466

Less accumulated depreciation and amortization
 
(3,117,919
)
 
(2,714,534
)
Net real estate held for investment
 
16,399,997

 
13,826,932

Real estate held for sale, net
 
96,775

 
16,585

Net real estate
 
16,496,772

 
13,843,517

Cash and cash equivalents
 
54,011

 
10,387

Accounts receivable
 
181,969

 
144,991

Lease intangible assets, net
 
1,493,383

 
1,199,597

Other assets, net
 
328,661

 
61,991

Total assets
 
$
18,554,796

 
$
15,260,483

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Distributions payable
 
$
76,728

 
$
67,789

Accounts payable and accrued expenses
 
177,039

 
133,765

Lease intangible liabilities, net
 
333,103

 
310,866

Other liabilities
 
262,221

 
127,109

Line of credit payable
 
704,335

 
252,000

Term loans, net
 
499,044

 
568,610

Mortgages payable, net
 
410,119

 
302,569

Notes payable, net
 
6,288,049

 
5,376,797

Total liabilities
 
8,750,638

 
7,139,505

 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 333,619,106 shares issued and outstanding as of December 31, 2019 and 370,100,000 shares authorized, 303,742,090 shares issued and outstanding as of December 31, 2018
 
12,873,849

 
10,754,495

Distributions in excess of net income
 
(3,082,291
)
 
(2,657,655
)
Accumulated other comprehensive loss
 
(17,102
)
 
(8,098
)
Total stockholders’ equity
 
9,774,456

 
8,088,742

Noncontrolling interests
 
29,702

 
32,236

Total equity
 
9,804,158

 
8,120,978

Total liabilities and equity
 
$
18,554,796

 
$
15,260,483


- 10 -

Realty Income Performance vs. Major Stock Indices
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
NASDAQ
 
Realty Income
 
REIT Index (1)
 
DJIA
 
S&P 500
 
Composite
 
Dividend
 
Total
 
Dividend
 
Total
 
Dividend
 
Total
 
Dividend
 
Total
 
Dividend
 
Total
 
yield
 
return (2)
 
yield
 
return (3)
 
yield
 
return (3)
 
yield
 
return (3)
 
yield
 
return (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10/18 to 12/31/1994
 10.5%
 
 10.8%
 
 7.7%
 
0.0%
 
 2.9%
 
(1.6%)
 
 2.9%
 
(1.2%)
 
 0.5%
 
(1.7%)
1995
 8.3%
 
 42.0%
 
 7.4%
 
 15.3%
 
 2.4%
 
 36.9%
 
 2.3%
 
 37.6%
 
 0.6%
 
 39.9%
1996
 7.9%
 
 15.4%
 
 6.1%
 
 35.3%
 
 2.2%
 
 28.9%
 
 2.0%
 
 23.0%
 
 0.2%
 
 22.7%
1997
 7.5%
 
 14.5%
 
 5.5%
 
 20.3%
 
 1.8%
 
 24.9%
 
 1.6%
 
 33.4%
 
 0.5%
 
 21.6%
1998
 8.2%
 
 5.5%
 
 7.5%
 
(17.5%)
 
 1.7%
 
 18.1%
 
 1.3%
 
 28.6%
 
 0.3%
 
 39.6%
1999
 10.5%
 
(8.7%)
 
 8.7%
 
(4.6%)
 
 1.3%
 
 27.2%
 
 1.1%
 
 21.0%
 
 0.2%
 
 85.6%
2000
 8.9%
 
 31.2%
 
 7.5%
 
 26.4%
 
 1.5%
 
(4.7%)
 
 1.2%
 
(9.1%)
 
 0.3%
 
(39.3%)
2001
 7.8%
 
 27.2%
 
 7.1%
 
 13.9%
 
 1.9%
 
(5.5%)
 
 1.4%
 
(11.9%)
 
 0.3%
 
(21.1%)
2002
 6.7%
 
 26.9%
 
 7.1%
 
 3.8%
 
 2.6%
 
(15.0%)
 
 1.9%
 
(22.1%)
 
 0.5%
 
(31.5%)
2003
 6.0%
 
 21.0%
 
 5.5%
 
 37.1%
 
 2.3%
 
 28.3%
 
 1.8%
 
 28.7%
 
 0.6%
 
 50.0%
2004
 5.2%
 
 32.7%
 
 4.7%
 
 31.6%
 
 2.2%
 
 5.6%
 
 1.8%
 
 10.9%
 
 0.6%
 
 8.6%
2005
 6.5%
 
(9.2%)
 
 4.6%
 
 12.2%
 
 2.6%
 
 1.7%
 
 1.9%
 
 4.9%
 
 0.9%
 
 1.4%
2006
 5.5%
 
 34.8%
 
 3.7%
 
 35.1%
 
 2.5%
 
 19.0%
 
 1.9%
 
 15.8%
 
 0.8%
 
 9.5%
2007
 6.1%
 
 3.2%
 
 4.9%
 
(15.7%)
 
 2.7%
 
 8.8%
 
 2.1%
 
 5.5%
 
 0.8%
 
 9.8%
2008
 7.3%
 
(8.2%)
 
 7.6%
 
(37.7%)
 
 3.6%
 
(31.8%)
 
 3.2%
 
(37.0%)
 
 1.3%
 
(40.5%)
2009
 6.6%
 
 19.3%
 
 3.7%
 
 28.0%
 
 2.6%
 
 22.6%
 
 2.0%
 
 26.5%
 
 1.0%
 
 43.9%
2010
 5.1%
 
 38.6%
 
 3.5%
 
 27.9%
 
 2.6%
 
 14.0%
 
 1.9%
 
 15.1%
 
 1.2%
 
 16.9%
2011
 5.0%
 
 7.3%
 
 3.8%
 
 8.3%
 
 2.8%
 
 8.3%
 
 2.3%
 
 2.1%
 
 1.3%
 
(1.8%)
2012
 4.5%
 
 20.1%
 
 3.5%
 
 19.7%
 
 3.0%
 
 10.2%
 
 2.5%
 
 16.0%
 
 2.6%
 
 15.9%
2013
 5.8%
 
(1.8%)
 
 3.9%
 
 2.9%
 
 2.3%
 
 29.6%
 
 2.0%
 
 32.4%
 
 1.4%
 
 38.3%
2014
 4.6%
 
 33.7%
 
 3.6%
 
 28.0%
 
 2.3%
 
 10.0%
 
 2.0%
 
 13.7%
 
 1.3%
 
 13.4%
2015
 4.4%
 
 13.0%
 
 3.9%
 
 2.8%
 
 2.6%
 
 0.2%
 
 2.2%
 
 1.4%
 
 1.4%
 
 5.7%
2016
 4.2%
 
 16.0%
 
 4.0%
 
 8.6%
 
 2.5%
 
 16.5%
 
 2.1%
 
 12.0%
 
 1.4%
 
 7.5%
2017
 4.5%
 
 3.6%
 
 3.9%
 
 8.7%
 
 2.2%
 
 28.1%
 
 1.9%
 
 21.8%
 
 1.1%
 
 28.2%
2018
 4.2%
 
 15.2%
 
 4.4%
 
(4.0%)
 
 2.5%
 
(3.5%)
 
 2.2%
 
(4.4%)
 
 1.4%
 
(3.9%)
2019
3.7%
 
21.1%
 
3.7%
 
28.7%
 
2.4%
 
25.3%
 
1.9%
 
31.5%
 
 1.1%
 
35.2%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compound Average
Annual Total Return (5)
 
16.5%
 
 
 
10.8%
 
 
 
10.7%
 
 
 
10.1%
 
 
 
10.3%
 
Note:   The 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) 
The Compound Average Annual Total Return rates are calculated in the same manner for each period from Realty Income’s NYSE listing on October 18, 1994 through December 31, 2019, and (except for NASDAQ) assume 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.

- 11 -
Exhibit 99.2 An S&P 500 SUPPLEMENTAL OPERATING company S&P 500 & FINANCIAL DATA Dividend Aristocrats® Q4 2019 index member

 
Table Of Contents Corporate Overview 3 Financial Summary Consolidated Statements Of Income 4 Funds From Operations (FFO) 5 Adjusted Funds From Operations (AFFO) 6 Consolidated Balance Sheets 7 Debt Summary 8 Debt Maturities 9 Capitalization & Financial Ratios 10 Adjusted EBITDAre & Coverage Ratios 11 Debt Covenants 12 Transaction Summary Investment Summary 13 Disposition Summary 14 Development Pipeline 15 Real Estate Portfolio Summary Tenant Diversification 16 Top 10 Industries 17 Industry Diversification 18 Geographic Diversification 20 Property Type Composition 22 Same Store Rental Revenue 23 Leasing Data Occupancy 25 Leasing Activity 26 Lease Expirations 27 Earnings Guidance 28 Analyst Coverage 29 This Supplemental Operating & Financial Data should be read in connection with the company's fourth quarter 2019 earnings press release (included as Exhibit 99.1 of the company's Current Report on Form 8-K, filed on February 19, 2020) as certain disclosures, definitions, and reconciliations in such announcement have not been included in this Supplemental Operating & Financial Data. Q4 2019 Supplemental Operating & Financial Data 2

 
Corporate Overview Corporate Profile Senior Management Realty Income, The Monthly Dividend Company®, is an S&P 500 company Sumit Roy, President & Chief Executive Officer dedicated to providing stockholders with dependable monthly dividends Michael R. Pfeiffer, EVP, Chief Administrative Officer, General Counsel and that increase over time. The monthly dividends are supported by the cash Secretary flow generated from real estate owned under long-term, net lease Neil M. Abraham, EVP, Chief Strategy Officer agreements with commercial tenants. For over 51 years, Realty Income has been acquiring and managing freestanding commercial properties that Mark E. Hagan, EVP, Chief Investment Officer generate rental revenue under long-term, net lease agreements. Benjamin N. Fox, EVP, Asset Management & Real Estate Operations Portfolio Overview Credit Ratings At December 31, 2019, we owned a diversified portfolio of 6,483 properties Moody’s A3 Stable Outlook located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.), with Standard & Poor’s A- Stable Outlook approximately 106.3 million square feet of leasable space. Our properties are leased to 301 different commercial tenants doing business in 50 Fitch BBB+ Stable Outlook separate industries. Approximately 83% of our quarterly rental revenue was generated from retail properties, 12% from industrial properties, and Dividend Information as of February 2020 the remaining 5% from other property types. Our physical occupancy as of December 31, 2019 was 98.6%, with a weighted average remaining lease ▪ Current annualized dividend of $2.79 per share term of approximately 9.2 years. Annualized base rent on our leases as of ▪ Compound average annual dividend growth rate of approximately 4.6% December 31, 2019 is approximately $1.553 billion. ▪ 596 consecutive monthly dividends declared ▪ 89 consecutive quarterly dividend increases Common Stock Our Common Stock is traded on the New York Stock Exchange under the symbol "O“. December 31, 2019 Corporate Headquarters Closing price $ 73.63 11995 El Camino Real Shares and units outstanding 334,082,225 San Diego, California 92130 Market value of common equity $ 24,598,474,000 Phone: (858) 284-5000 Total market capitalization $ 32,528,824,000 London Office Transfer Agent 42 Brook St. Computershare London, United Kingdom W1K 5DB Phone: (877) 218-2434 Phone: 020 3931 6856 Website: www.computershare.com Website: www.realtyincome.com Q4 2019 Supplemental Operating & Financial Data 3

 
Consolidated Statements Of Income (dollars in thousands, except per share amounts (1)) (unaudited) (unaudited) Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 REVENUE Rental (including reimbursable) (2) $ 394,217 $ 341,181 $ 1,484,818 $ 1,321,546 Other 3,312 1,395 6,773 6,292 Total revenue 397,529 342,576 1,491,591 1,327,838 EXPENSES Depreciation and amortization 156,594 137,711 593,961 539,780 Interest 75,073 70,635 290,991 266,020 General and administrative 16,330 34,178 66,483 84,148 Property (including reimbursable) 25,253 17,732 88,585 66,326 Income taxes 1,736 1,607 6,158 5,340 Provisions for impairment 8,950 1,235 40,186 26,269 Total expenses 283,936 263,098 1,086,364 987,883 Gain on sales of real estate 14,168 5,825 29,996 24,643 Foreign currency and derivative gains, net 1,792 — 2,255 — Net income 129,553 85,303 437,478 364,598 Net income attributable to noncontrolling interests (256) (231) (996) (984) Net income available to common stockholders $ 129,297 $ 85,072 $ 436,482 $ 363,614 Net income available to common stockholders per common share: Basic and Diluted $ 0.39 $ 0.29 $ 1.38 $ 1.26 (1) Unless otherwise indicated, all dollar amounts are expressed in U.S. dollars. (2) Includes rental revenue (reimbursable) of $19,810 and $11,776 for the three months ended December 31, 2019 and December 31, 2018, respectively, and $69,085 and $46,950 for the years ended December 31, 2019 and December 31, 2018, respectively. Unless otherwise specified, references to rental revenue in this document are exclusive of reimbursements from tenants for recoverable real estate taxes and operating expenses. Q4 2019 Supplemental Operating & Financial Data 4

 
Funds From Operations (FFO) (dollars in thousands, except per share amounts) The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable GAAP measure) to FFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted FFO per share computations. We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts’ (Nareit’s) definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of depreciable real estate assets, and reduced by gains on property sales. Presentation of the information regarding FFO and AFFO (described on page 6) is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered as measures of liquidity, of our ability to make cash distributions, or of our ability to pay interest payments. Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Net income available to common stockholders $ 129,297 $ 85,072 $ 436,482 $ 363,614 Depreciation and amortization 156,594 137,711 593,961 539,780 Depreciation of furniture, fixtures and equipment (127) (158) (565) (650) Provisions for impairment 8,950 1,235 40,186 26,269 Gain on sales of real estate (14,168) (5,825) (29,996) (24,643) FFO adjustments allocable to noncontrolling interests (150) (292) (477) (1,113) FFO available to common stockholders $ 280,396 $ 217,743 $ 1,039,591 $ 903,257 FFO allocable to dilutive noncontrolling interests 372 473 1,403 867 Diluted FFO $ 280,768 $ 218,216 $ 1,040,994 $ 904,124 FFO per common share: Basic and Diluted $ 0.85 $ 0.73 $ 3.29 $ 3.12 Distributions paid to common stockholders $ 222,476 $ 196,834 $ 852,134 $ 761,582 FFO available to common stockholders in excess of distributions paid to common stockholders $ 57,920 $ 20,909 $ 187,457 $ 141,675 Weighted average number of common shares used for FFO: Basic 328,565,734 297,730,206 315,837,012 289,427,430 Diluted 329,364,027 298,609,734 316,601,350 289,923,984 Q4 2019 Supplemental Operating & Financial Data 5

 
Adjusted Funds From Operations (AFFO) (dollars in thousands, except per share amounts) The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable GAAP measure) to FFO and AFFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted AFFO per share computations. We define AFFO as FFO adjusted for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company’s ongoing operating performance. Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution). Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Net income available to common stockholders $ 129,297 $ 85,072 $ 436,482 $ 363,614 Cumulative adjustments to calculate FFO (1) 151,099 132,671 603,109 539,643 FFO available to common stockholders 280,396 217,743 1,039,591 903,257 Executive severance charge — 18,651 — 18,651 Amortization of share-based compensation 3,184 2,943 13,662 15,470 Amortization of deferred financing costs 1,283 1,119 4,754 3,991 Amortization of net mortgage premiums (354) (354) (1,415) (1,520) Loss (gain) on interest rate swaps 694 331 2,752 (2,733) Straight-line payments from cross-currency swaps 1,762 — 4,316 — Leasing costs and commissions (222) (1,076) (2,102) (3,907) Recurring capital expenditures (224) (555) (801) (1,084) Straight-line rent (8,940) (6,480) (28,674) (24,687) Amortization of above and below-market leases 6,109 4,427 19,336 16,852 Other adjustments (1,702) 64 (1,404) 268 AFFO available to common stockholders $ 281,986 $ 236,813 $ 1,050,015 $ 924,558 AFFO allocable to dilutive noncontrolling interests 378 487 1,442 901 Diluted AFFO $ 282,364 $ 237,300 $ 1,051,457 $ 925,459 AFFO per common share: Basic $ 0.86 $ 0.80 $ 3.32 $ 3.19 Diluted $ 0.86 $ 0.79 $ 3.32 $ 3.19 Distributions paid to common stockholders $ 222,476 $ 196,834 $ 852,134 $ 761,582 AFFO available to common stockholders in excess of distributions paid to common stockholders $ 59,510 $ 39,979 $ 197,881 $ 162,976 Weighted average number of common shares used for AFFO: Basic 328,565,734 297,730,206 315,837,012 289,427,430 Diluted 329,364,027 298,609,734 316,601,350 289,923,984 (1) See reconciling items for FFO presented under "Funds from Operations (FFO).” Q4 2019 Supplemental Operating & Financial Data 6

 
Consolidated Balance Sheets (dollars in thousands , except per share amounts) (unaudited) December 31, 2019 December 31, 2018 ASSETS Real estate, at cost: Land $ 5,684,034 $ 4,682,660 Buildings and improvements 13,833,882 11,858,806 Total real estate, at cost 19,517,916 16,541,466 Less accumulated depreciation and amortization (3,117,919) (2,714,534) Net real estate held for investment 16,399,997 13,826,932 Real estate held for sale, net 96,775 16,585 Net real estate 16,496,772 13,843,517 Cash and cash equivalents 54,011 10,387 Accounts receivable 181,969 144,991 Lease intangible assets, net 1,493,383 1,199,597 Other assets, net 328,661 61,991 Total assets $ 18,554,796 $ 15,260,483 LIABILITIES AND EQUITY Distributions payable $ 76,728 $ 67,789 Accounts payable and accrued expenses 177,039 133,765 Lease intangible liabilities, net 333,103 310,866 Other liabilities 262,221 127,109 Line of credit payable 704,335 252,000 Term loans, net 499,044 568,610 Mortgages payable, net 410,119 302,569 Notes payable, net 6,288,049 5,376,797 Total liabilities 8,750,638 7,139,505 Stockholders’ equity: Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 333,619,106 shares issued and outstanding as of December 31, 2019 and 370,100,000 shares authorized, 303,742,090 shares issued and outstanding as of December 31, 2018 12,873,849 10,754,495 Distributions in excess of net income (3,082,291) (2,657,655) Accumulated other comprehensive loss (17,102) (8,098) Total stockholders’ equity 9,774,456 8,088,742 Noncontrolling interests 29,702 32,236 Total equity 9,804,158 8,120,978 Total liabilities and equity $ 18,554,796 $ 15,260,483 Q4 2019 Supplemental Operating & Financial Data 7

 
Debt Summary (dollars in thousands) Maturity Date as of Principal Balance as of Interest Rate as of Weighted Average December 31, 2019 December 31, 2019 % of Debt December 31, 2019 Years until Maturity Credit Facility Credit Facility (1) March 24, 2023 $ 704,335 8.9% 2.24% (7) 3.2 years Unsecured Term Loans Term Loan - Realty Income 2020 (2) June 30, 2020 250,000 3.2% 2.62% 0.5 years Term Loan - Realty Income 2024 (2) March 24, 2024 250,000 3.2% 3.89% 4.2 years (7) Principal amount 500,000 6.4% 3.25% 2.4 years Deferred financing costs (956) Carrying value 499,044 Senior Unsecured Notes and Bonds 5.750% Notes due 2021 (3) January 15, 2021 250,000 3.2% 5.75% 3.250% Notes due 2022 October 15, 2022 950,000 11.9% 3.25% 4.650% Notes due 2023 August 1, 2023 750,000 9.4% 4.65% 3.875% Notes due 2024 July 15, 2024 350,000 4.4% 3.88% 3.875% Notes due 2025 April 15, 2025 500,000 6.3% 3.88% 4.125% Notes due 2026 October 15, 2026 650,000 8.1% 4.13% 3.000% Notes due 2027 January 15, 2027 600,000 7.6% 3.00% 3.650% Notes due 2028 January 15, 2028 550,000 6.9% 3.65% 3.250% Notes due 2029 June 15, 2029 500,000 6.3% 3.25% 2.730% Notes due 2034 (4) May 20, 2034 417,595 5.3% 2.73% 5.875% Bonds due 2035 March 15, 2035 250,000 3.2% 5.88% 4.650% Notes due 2047 March 15, 2047 550,000 6.9% 4.65% Principal amount 6,317,595 79.5% 3.89% (7) 8.3 years Unamortized net premiums and deferred financing costs (29,546) Carrying value 6,288,049 Mortgages Payable 27 mortgages on 92 properties July 2020 - June 2032 408,420 (5) 5.2% 4.93% (7) 3.1 years Unamortized net premiums and deferred financing costs 1,699 Carrying value 410,119 Total Debt $ 7,930,350 (6) 100.0% 3.76% (7) 7.2 years Fixed Rate $ 7,226,015 91.1% Variable Rate $ 704,335 8.9% (1) We have a $3.0 billion unsecured revolving credit facility bearing interest at LIBOR, plus 0.775% with an initial term that expires in March 2023. It includes, at our election, two six-month extension options, at a cost of 0.0625% of the facility commitment, or $1.875 million per option. The credit facility also has a $1.0 billion expansion option. As of December 31, 2019, the outstanding balance was $704.3 million, including £169.2 million Sterling, leaving $2.3 billion available on the credit facility. (2) Borrowings under the term loans have been swapped to fixed and bear interest at all-in rates of 2.62% and 3.89%, for the term loan due 2020 and the term loan due 2024, respectively. (3) In January 2020, we redeemed all $250.0 million in principal amount of our 5.750% Notes due January 2021. As a result of the early redemption, we will recognize an estimated $9.8 million loss on extinguishment of debt during the first quarter of 2020. (4) Represents the principal balance (in U.S. dollars) of the Sterling-denominated private placement of £315.0 million, which approximates $417.6 million converted at the applicable exchange rate on December 31, 2019. (5) The mortgages payable are at fixed interest rates as of December 31, 2019. (6) Excludes non-cash unamortized net original issuance premiums recorded on the senior unsecured notes and bonds, non-cash unamortized net premiums recorded on the mortgages payable, and deferred financing costs on the term loans, notes and bonds, and mortgages payable.  (7) The totals are calculated as the weighted average interest rate as of December 31, 2019 for each respective category. The credit facility includes £169.2 million Sterling borrowings with a weighted average interest rate of 1.53% at December 31, 2019. Q4 2019 Supplemental Operating & Financial Data 8

 
Debt Maturities as of December 31, 2019 (dollars in millions) Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loans Payable Notes and Bonds (1) Total Interest Rate (2) 2020 $ — $ 250.0 $ 84.2 $ — $ 334.2 3.21% 2021 — — 68.8 250.0 318.8 5.72% 2022 — — 111.8 950.0 1,061.8 3.43% 2023 704.3 — 20.6 750.0 1,474.9 4.64% 2024 — 250.0 112.2 350.0 712.2 3.97% Thereafter — — 10.8 4,017.6 4,028.4 3.79% Totals $ 704.3 $ 500.0 $ 408.4 $ 6,317.6 $ 7,930.3 (1) In January 2020, we redeemed all $250.0 million in principal amount of our outstanding 5.75% Notes due January 2021. As a result, we will recognize an estimated $9.8 million loss on extinguishment of debt during the first quarter of 2020. (2) Weighted average interest rate for 2023 excludes the credit facility. Mortgages Payable Maturities by Quarter  Year of First Second Third Fourth Weighted Average Maturity Quarter Quarter Quarter Quarter Total Interest Rate 2020 $ 1.7 $ 1.7 $ 13.0 $ 67.8 $ 84.2 4.98% 2021 18.7 18.2 31.0 0.9 68.8 5.61% 2022 0.9 10.5 62.2 38.2 111.8 4.97% 2023 0.9 6.5 12.4 0.8 20.6 4.44% 2024 0.8 0.8 0.9 109.7 112.2 4.47% Thereafter — — — 10.8 10.8 5.64% Totals $ 23.0 $ 37.7 $ 119.5 $ 228.2 $ 408.4 Q4 2019 Supplemental Operating & Financial Data 9

 
Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Capitalization as of December 31, 2019 Capital Structure as of December 31, 2019 Principal Debt Balance Credit Facility $ 704,335 Unsecured Term Loans 500,000 Senior Unsecured Notes and Bonds (1) 6,317,595 Mortgages Payable 408,420 Total Debt $ 7,930,350 Shares / Equity Units Stock Price Market Value Common Stock (NYSE: "O") 333,619,106 $ 73.63 $ 24,564,375 Common Units 463,119 $ 73.63 $ 34,099 Total Equity $ 24,598,474 Total Market Capitalization (2) $ 32,528,824 Debt/Total Market Capitalization (2) 24.4% (1) In January 2020, we redeemed all $250.0 million in principal amount of our outstanding 5.75% Notes due January 2021. (2) Our enterprise value was $32,474,813 (total market capitalization less cash on hand). The percentage for debt to enterprise value is materially consistent with that presented for total market capitalization. Dividend Data Year-over-Year Liquidity as of December 31, 2019 2019 2018 Growth Rate Common Dividend Paid per Share $ 2.711 $ 2.631 3.0% Cash on Hand $ 54,011 AFFO per Share (diluted) $ 3.32 $ 3.19 4.1% Availability under Credit Facility 2,295,665 AFFO Payout Ratio 81.7% 82.5% $ 2,349,676 Q4 2019 Supplemental Operating & Financial Data 10

 
Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three Months Ended December 31, 2019 Debt Service & Fixed Charge Coverage (4) Net income $ 129,553 Interest 75,073 Income taxes 1,736 Depreciation and amortization 156,594 Provisions for impairment 8,950 Gain on sales of real estate (14,168) Foreign currency and derivative gains, net (2) (1,792) Quarterly Adjusted EBITDAre $ 355,946 Annualized Adjusted EBITDAre $ 1,423,784 Net Debt/Adjusted EBITDAre (3) 5.5 (1) The National Association of Real Estate Investment Trust (Nareit) came to the conclusion that a Nareit-defined EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) would provide investors with a consistent measure to help make investment decisions among REITs. Our definition of “Adjusted EBITDAre” is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gains and losses, as described below (which is consistent with our previous calculations of "Adjusted EBITDAre"). We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter, as earnings (net income) before (i) interest expense, including non-cash loss (gain) on swaps, (ii) income and franchise taxes, (iii) real estate depreciation and amortization, (iv) impairment losses, (v) gain on sales of real estate and (vi) foreign currency and derivative gains, net. Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT’s performance because it is widely followed by industry analysts, lenders and investors. Management also believes the use of an annualized quarterly Adjusted EBITDAre metric is meaningful because it represents the company’s current earnings run rate for the period presented. The ratio of our total debt to our annualized quarterly Adjusted EBITDAre is also used to determine vesting of performance share awards granted to our executive officers. Adjusted EBITDAre should be considered along with, but not as an alternative to net income as a measure of our operating performance. (2) Includes foreign currency gains and losses as a result of intercompany debt and certain remeasurement transactions. (3) Our ratio of net debt-to-Adjusted EBITDAre, which is used by management as a measure of leverage, is calculated as net debt (which we define as total debt per the consolidated balance sheet, less cash and cash equivalents, divided by annualized quarterly Adjusted EBITDAre). Q4 2019 Supplemental Operating & Financial Data 11

 
Debt Covenants As of December 31, 2019 The following is a summary of the key financial covenants for our senior unsecured notes and bonds, as defined and calculated per their terms. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show our ability to incur additional debt under the terms of our senior unsecured notes and bonds as well as to disclose our current compliance with such covenants, and are not measures of our liquidity or performance. Required Actuals Limitation on incurrence of total debt ≤ 60% of adjusted undepreciated assets 39.6% Limitation on incurrence of secured debt ≤ 40% of adjusted undepreciated assets 2.1% Debt service and fixed charge coverage (trailing 12 months) (1) ≥ 1.5x 5.0x Maintenance of total unencumbered assets ≥ 150% of unsecured debt 256.9% (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 January 1, 2019, 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 January 1, 2019, nor does it purport to reflect our debt service coverage ratio for any future period. Our fixed charge coverage is calculated in the same manner as our debt service coverage, 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. Q4 2019 Supplemental Operating & Financial Data 12

 
Investment Summary (dollars in thousands) Weighted Number of Leasable Initial Average Cash (1) Average Lease Properties Investment Cash Rents Square Feet Lease Yield Term (Years) Q1 Acquisitions - U.S. 97 $ 508,573 $ 33,905 1,908,385 6.7% 17.0 2019 Properties under Development (2) 8 10,919 785 349,752 7.2% 17.3 Total Real Estate Investments 105 $ 519,492 $ 34,690 2,258,137 6.7% 17.0 Approximately 31% of the annualized revenue generated by these investments is from investment grade tenants (3) Q2 Acquisitions - U.S. 78 $ 532,297 $ 36,841 2,244,414 6.9% 14.8 2019 Acquisitions - U.K. 12 549,192 28,833 1,131,283 5.3% 14.8 Total Acquisitions 90 $ 1,081,489 $ 65,674 3,375,697 6.1% 14.8 Properties under Development (2) 12 13,243 965 417,428 7.3% 15.9 Total Real Estate Investments 102 $ 1,094,732 $ 66,639 3,793,125 6.1% 14.8 Approximately 12% of the annualized revenue generated by these investments is from investment grade tenants (3) Q3 Acquisitions - U.S. 39 $ 372,019 $ 21,320 2,041,723 5.7% 15.1 2019 Acquisitions - U.K. 1 27,622 1,319 37,737 4.8% 20.6 Total Acquisitions 40 $ 399,641 $ 22,639 2,079,460 5.7% 15.4 Properties under Development (2) 11 11,865 910 446,670 7.7% 15.0 Total Real Estate Investments 51 $ 411,506 $ 23,549 2,526,130 5.7% 15.4 Approximately 56% of the annualized revenue generated by these investments is from investment grade tenants (3) Q4 Acquisitions - U.S. 539 $ 1,447,917 $ 101,491 5,435,901 7.0% 10.5 2019 Acquisitions - U.K. 5 221,032 11,471 414,656 5.2% 17.1 Total Acquisitions 544 $ 1,668,949 $ 112,962 5,850,557 6.8% 11.2 Properties under Development (2) 12 20,558 1,463 266,073 7.1% 13.5 Total Real Estate Investments 556 $ 1,689,507 $ 114,425 6,116,630 6.8% 11.2 Approximately 47% of the annualized revenue generated by these investments is from investment grade tenants (3) YE Acquisitions - U.S. 753 $ 2,860,806 $ 193,557 11,630,423 6.8% 13.0 2019 Acquisitions - U.K. 18 797,846 41,623 1,583,676 5.2% 15.6 Total Acquisitions 771 $ 3,658,652 $ 235,180 13,214,099 6.4% 13.4 Properties under Development (2) 18 56,585 4,123 522,173 7.3% 15.1 Total Real Estate Investments 789 $ 3,715,237 $ 239,303 13,736,272 6.4% 13.5 Approximately 36% of the annualized revenue generated by these investments is from investment grade tenants (3) (1) Cash capitalization rates are computed as contractual cash net operating income for the first twelve months following the acquisition date, divided by the total cost of the property (including all expenses borne by Realty Income). (2) Includes investments during the period in new development and development of existing properties. Cash rents noted reflect total cash rents to be received on this investment amount upon completion of the properties under development. (3) Refer to footnote 3 on page 16 for our definition of investment grade tenants. Q4 2019 Supplemental Operating & Financial Data 13

 
Disposition Summary (dollars in thousands) Net Cash Capitalization Number of Properties Original Investment Net Book Value Net Proceeds (1) Rate (2) Q1 Occupied 4 $ 7,309 $ 5,550 $ 11,542 9.5% 2019 Vacant 14 22,654 8,764 9,813 — Total Real Estate Dispositions 18 $ 29,963 $ 14,314 $ 21,355 The unlevered internal rate of return on properties sold during the first quarter was 5.4% Q2 Occupied 2 $ 16,637 $ 13,122 $ 15,572 7.9% 2019 Vacant 16 19,561 8,134 13,024 — Total Real Estate Dispositions 18 $ 36,198 $ 21,256 $ 28,596 The unlevered internal rate of return on properties sold during the second quarter was 7.9% Q3 Occupied 6 $ 6,256 $ 5,098 $ 6,469 8.4% 2019 Vacant 21 35,005 14,673 15,080 — Total Real Estate Dispositions 27 $ 41,261 $ 19,771 $ 21,549 The unlevered internal rate of return on properties sold during the third quarter was 7.6% Q4 Occupied 5 $ 10,719 $ 8,282 $ 14,416 6.8% 2019 Vacant 24 34,146 13,787 21,894 — Total Real Estate Dispositions 29 $ 44,865 $ 22,069 $ 36,310 The unlevered internal rate of return on properties sold during the fourth quarter was 10.4% YE Occupied 17 $ 40,921 $ 32,052 $ 47,999 8.1% 2019 Vacant 75 111,366 45,358 59,811 — Total Real Estate Dispositions 92 $ 152,287 $ 77,410 $ 107,810 The unlevered internal rate of return on properties sold during 2019 was 8.3% (1) Data excludes properties sold as a result of eminent domain activities. During the first quarter of 2019 we were awarded net proceeds of $1,101,000 related to one eminent domain transaction. (2) Cash capitalization rates are computed as annualized current month contractual cash net operating income, divided by the net proceeds received upon sale of the property (including all expenses borne by Realty Income). Q4 2019 Supplemental Operating & Financial Data 14

 
Development Pipeline (dollars in thousands) Investment Estimated Remaining Retail Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) 4 $ 6,265 $ 12,636 $ 18,901 100% Development of existing properties 2 3,651 3,327 6,978 83% 6 $ 9,916 $ 15,963 $ 25,879 Investment Estimated Remaining Non-Retail Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) — $ — $ — $ — —% Development of existing properties — — — — —% — $ — $ — $ — Investment Estimated Remaining Total Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) 4 $ 6,265 $ 12,636 $ 18,901 100% Development of existing properties 2 3,651 3,327 6,978 83% 6 $ 9,916 $ 15,963 $ 25,879 For the year ended December 31, 2019, the Company had six development properties under construction (noted above) and 12 development properties completed during the year. Estimated total costs are approximately $87.9 million. (1) Includes build-to-suit developments and forward take-out commitments on development properties with leases in place. (2) Estimated rental revenue commencement dates on properties under development are between January 2020 and April 2021. Q4 2019 Supplemental Operating & Financial Data 15

 
Tenant Diversification Top 20 Tenants Investment Grade Tenants (3): Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at December 31, 2019 include the following: Number of Leases 3,460 Percentage of Annualized Rents 49% Investment Grade Number of Ratings Tenant Leases % of Revenue (1) (S&P/Moody's/Fitch) (3) Walgreens 250 6.1% BBB/Baa2/BBB 7-Eleven 403 4.8% AA-/Baa1/- Dollar General 752 4.4% BBB/Baa2/- FedEx 41 4.0% BBB/Baa2/- Dollar Tree / Family Dollar 550 3.5% BBB-/Baa3/- LA Fitness 58 3.4% — AMC Theatres 34 3.0% — Regal Cinemas (Cineworld) 42 2.9% — Walmart / Sam's Club 54 2.6% AA/Aa2/AA Sainsbury's 15 2.4% — Lifetime Fitness 14 2.1% — Circle K (Couche-Tard) 285 1.9% BBB/Baa2/- BJ's Wholesale Clubs 15 1.8% — CVS Pharmacy 88 1.7% BBB/Baa2/- Treasury Wine Estates 17 1.7% — Super America (Marathon) 161 1.6% BBB/Baa2/BBB Kroger 22 1.6% BBB/Baa1/- GPM Investments / Fas Mart 206 1.4% — TBC Corp 159 1.3% A-/Baa1/- Home Depot 17 1.2% A/A2/A Total 3,183 53.3% (3) We define investment grade tenants as tenants with a credit rating of Weighted Average EBITDAR/Rent Ratio on Retail Properties 2.8x (2) Baa3/BBB- or higher from one of the three major rating agencies (Moody’s/S&P/Fitch). Approximately 49% of our annualized rental Median EBITDAR/Rent Ratio on Retail Properties 2.6x (2) revenue is generated from properties leased to investment grade tenants, their subsidiaries or affiliated companies. Refer to page 22 for (1) investment grade composition by property type. Amounts for each tenant are calculated independently, therefore, the individual percentages may not sum to the total. (2) Based on an analysis of the most recently provided information from all retail tenants that provide such information. We do not independently verify the information we receive from our retail tenants. Q4 2019 Supplemental Operating & Financial Data 16

 
Top 10 Industries (1)  Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended December 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2019 2019 2018 2017 2016 2015 Convenience stores 11.6% 11.9% 11.2% 9.6% 8.7% 9.2% Drug stores 8.6 9.0 10.2 10.9 11.2 10.6 Dollar stores 7.3 7.3 7.5 7.9 8.6 8.9 Grocery stores 7.3 6.2 5.0 4.4 3.1 3.0 Health and Fitness 7.3 7.5 7.4 7.5 8.1 7.7 Theaters 6.7 6.3 5.5 5.0 4.9 5.1 Restaurants - quick service 6.2 6.2 5.7 5.1 4.9 4.2 Transportation services 4.4 4.6 5.0 5.4 5.5 5.4 Restaurants - casual dining 3.1 3.2 3.2 3.8 3.9 3.8 Home improvement 2.9 3.0 3.0 2.6 2.5 2.4 (1) The presentation of Top 10 Industries combines rental revenue contribution from U.S. and U.K. properties. Q4 2019 Supplemental Operating & Financial Data 17

 
Industry Diversification  Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended December 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2019 2019 2018 2017 2016 2015 U.S. Aerospace 0.8% 0.8% 0.8% 0.9% 1.0% 1.1% Apparel stores 1.1 1.1 1.3 1.6 1.9 2.0 Automotive collision services 1.1 1.1 0.9 1.0 1.0 1.0 Automotive parts 1.5 1.6 1.7 1.3 1.3 1.4 Automotive service 2.3 2.3 2.2 2.2 1.9 1.9 Automotive tire services 2.1 2.2 2.4 2.6 2.7 2.9 Beverages 2.1 2.3 2.5 2.7 2.6 2.7 Child care 2.3 2.3 1.7 1.8 1.9 2.0 Consumer appliances 0.4 0.5 0.5 0.5 0.5 0.6 Consumer electronics 0.3 0.3 0.3 0.3 0.3 0.3 Consumer goods 0.6 0.6 0.7 0.8 0.9 0.9 Convenience stores 11.6 11.9 11.2 9.6 8.7 9.2 Crafts and novelties 0.6 0.6 0.7 0.6 0.6 0.6 Diversified industrial 0.7 0.7 0.8 0.9 0.9 0.8 Dollar stores 7.3 7.3 7.5 7.9 8.6 8.9 Drug stores 8.6 9.0 10.2 10.9 11.2 10.6 Education 0.2 0.2 0.3 0.3 0.3 0.3 Electric utilities 0.1 0.1 0.1 0.1 0.1 0.1 Entertainment 0.4 0.4 0.4 0.4 0.5 0.5 Equipment services 0.4 0.4 0.4 0.4 0.6 0.5 Financial services 2.0 2.1 2.3 2.4 1.8 1.7 Food processing 0.8 0.6 0.5 0.6 1.1 1.2 General merchandise 2.7 2.5 2.3 2.0 1.8 1.7 Government services 0.7 0.8 0.9 1.0 1.1 1.2 Grocery stores 5.0 4.9 5.0 4.4 3.1 3.0 Health and beauty 0.2 0.3 0.2 * * * * Less than 0.1% Q4 2019 Supplemental Operating & Financial Data 18

 
Industry Diversification (Cont'd)  Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended December 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2019 2019 2018 2017 2016 2015 Health and fitness 7.3 7.5 7.4 7.5 8.1 7.7 Health care 1.5 1.4 1.5 1.4 1.5 1.7 Home furnishings 0.7 0.7 0.8 0.9 0.8 0.9 Home improvement 2.9 3.0 3.0 2.6 2.5 2.4 Insurance * * 0.1 0.1 0.1 0.1 Jewelry * * 0.1 0.1 0.1 0.1 Machinery 0.1 0.1 0.1 0.1 0.1 0.1 Motor vehicle dealerships 2.1 1.9 1.9 2.1 1.9 1.6 Office supplies 0.2 0.2 0.2 0.2 0.3 0.3 Other manufacturing 0.6 0.6 0.7 0.8 0.8 0.7 Packaging 0.9 1.0 1.1 1.0 0.8 0.8 Paper 0.1 0.1 0.1 0.1 0.1 0.1 Pet supplies and services 0.6 0.5 0.5 0.6 0.6 0.7 Restaurants - casual dining 3.1 3.2 3.2 3.8 3.9 3.8 Restaurants - quick service 6.2 6.2 5.7 5.1 4.9 4.2 Shoe stores 0.2 0.3 0.5 0.6 0.7 0.7 Sporting goods 1.0 0.9 1.1 1.4 1.6 1.8 Telecommunications 0.5 0.5 0.6 0.6 0.6 0.7 Theaters 6.7 6.3 5.5 5.0 4.9 5.1 Transportation services 4.4 4.6 5.0 5.4 5.5 5.4 Wholesale clubs 2.6 2.7 3.0 3.3 3.6 3.8 Other 0.1 0.1 0.1 0.1 0.2 0.2 Total U.S. 97.7% 98.7% 100% 100% 100% 100% U.K. Grocery stores 2.3 1.3 — — — — Theaters * * — — — — Total U.K. 2.3% 1.3% —% —% —% —% Totals 100% 100% 100% 100% 100% 100% * Less than 0.1% Q4 2019 Supplemental Operating & Financial Data 19

 
Geographic Diversification (dollars in thousands) Approximate Rental Revenue for Percentage of Number of Percent Leasable the Quarter Ended Rental Location Properties Leased Square Feet December 31, 2019 (1) Revenue Alabama 228 98% 2,148,700 $ 6,685 1.8% Alaska 3 100 274,600 536 0.1 Arizona 152 100 2,081,700 7,751 2.1 Arkansas 102 100 1,183,200 2,743 0.7 California 226 99 6,423,600 32,641 8.7 Colorado 100 96 1,582,900 6,208 1.7 Connecticut 21 95 1,378,200 3,661 1.0 Delaware 19 100 101,400 670 0.2 Florida 430 98 4,632,000 20,480 5.5 Georgia 299 99 4,544,200 14,498 3.9 Idaho 14 93 103,200 403 0.1 Illinois 291 99 6,333,100 22,014 5.9 Indiana 204 99 2,565,600 9,710 2.6 Iowa 47 96 3,222,400 4,551 1.2 Kansas 122 97 2,256,800 6,078 1.6 Kentucky 93 100 1,826,100 5,012 1.3 Louisiana 138 97 1,910,000 5,815 1.6 Maine 27 100 277,800 1,306 0.4 Maryland 38 100 1,494,000 6,519 1.7 Massachusetts 58 95 896,100 3,883 1.0 Michigan 211 99 2,438,800 8,288 2.2 Minnesota 174 98 2,360,600 10,764 2.9 Mississippi 177 98 1,930,300 5,664 1.5 Missouri 188 96 3,023,000 9,283 2.5 (1) Includes rental revenue for all properties owned at December 31, 2019. Excludes revenue of $354 from sold properties and rental revenue (reimbursable) of $19,810. Q4 2019 Supplemental Operating & Financial Data 20

 
Geographic Diversification (Cont'd) (dollars in thousands) Approximate Rental Revenue for Percentage of Number of Percent Leasable the Quarter Ended Rental Location Properties Leased Square Feet December 31, 2019 (1) Revenue Montana 12 100 89,100 $ 544 0.1% Nebraska 62 100 866,100 1,988 0.5 Nevada 24 96 1,196,900 2,153 0.6 New Hampshire 14 100 321,500 1,546 0.4 New Jersey 76 99 1,057,300 6,469 1.7 New Mexico 60 100 504,200 1,527 0.4 New York 135 99 2,918,200 16,243 4.3 North Carolina 199 100 3,305,300 11,029 2.9 North Dakota 8 100 126,900 237 0.1 Ohio 342 98 8,019,600 17,704 4.7 Oklahoma 190 99 2,368,200 8,099 2.2 Oregon 29 100 624,300 2,693 0.7 Pennsylvania 225 99 2,264,100 11,089 3.0 Rhode Island 3 100 158,000 815 0.2 South Carolina 180 96 1,816,800 9,244 2.5 South Dakota 23 100 258,500 582 0.2 Tennessee 259 99 3,819,700 11,404 3.0 Texas 798 100 11,447,300 40,996 11.0 Utah 23 100 949,700 2,313 0.6 Vermont 1 100 65,500 191 * Virginia 215 99 3,156,700 10,313 2.8 Washington 50 98 913,400 3,626 1.0 West Virginia 35 100 519,000 1,554 0.4 Wisconsin 127 98 2,855,800 7,703 2.1 Wyoming 9 100 63,900 374 0.1 Puerto Rico 4 100 28,300 149 * U.K. 18 100 1,570,500 8,305 2.3 Totals\Average 6,483 99% 106,273,100 $ 374,053 100% * Less than 0.1% (1) Includes rental revenue for all properties owned at December 31, 2019. Excludes revenue of $354 from sold properties and rental revenue (reimbursable) of $19,810. Q4 2019 Supplemental Operating & Financial Data 21

 
Property Type Composition (dollars in thousands) Percentage of Rental Percentage of Rental Revenue for Revenue for the Annualized Revenue Approximate Leasable the Quarter Ended Quarter Ended from Investment Property Type Number of Properties Square Feet (1) December 31, 2019 (2) December 31, 2019 Grade Tenants (3) Retail 6,305 74,397,000 $ 310,499 83.0% 44.1% Industrial 120 28,520,100 43,189 11.5 79.9 Office 43 3,171,500 13,657 3.7 86.5 Agriculture 15 184,500 6,708 1.8 — Totals 6,483 106,273,100 $ 374,053 100.0% (1) Includes leasable building square footage. Excludes 3,300 acres of leased land categorized as agriculture at December 31, 2019. (2) Includes rental revenue for all properties owned at December 31, 2019. Excludes revenue of $354 from sold properties and rental revenue (reimbursable) of $19,810. (3) Refer to footnote 3 on page 16 for our definition of investment grade tenants. Q4 2019 Supplemental Operating & Financial Data 22

 
Same Store Rental Revenue (dollars in thousands) Fourth Quarter 2019 Top 3 Industries Contributing to the Change Same Store Rental Revenue Quarter Ended Quarter Ended Net % Change Industry December 31, 2019 December 31, 2018 Change by Industry Number of Properties 4,811 Motor Vehicle Dealerships $ 7,748 $ 5,954 $ 1,794 30.1% Square Footage 83,399,809 Dollar Stores 23,681 23,048 633 2.7% Q4 2019 $ 296,477 Sporting Goods 3,315 2,776 539 19.4% Q4 2018 $ 290,785 Increase (in dollars) $ 5,692 Increase (percent) 2.0% 2019 Top 3 Industries Contributing to the Change Same Store Rental Revenue Year Ended Year Ended Net % Change Industry December 31, 2019 December 31, 2018 Change by Industry Number of Properties 4,811 Dollar Stores $ 93,959 $ 91,895 $ 2,064 2.2% Square Footage 83,399,809 Motor Vehicle Dealerships 27,310 25,380 1,930 7.6% 2019 $ 1,175,576 Convenience Stores 111,992 110,188 1,804 1.6% 2018 $ 1,157,576 Increase (in dollars) $ 18,000 Increase (percent) 1.6% Same Store Pool Defined For purposes of determining the properties used to calculate our same store rental revenue pool, we include all properties that we owned for the entire year-to-date period, for both the current and prior year except for properties during the current or prior year that were: (i) vacant at any time, (ii) under development or redevelopment, or (iii) involved in eminent domain and rent was reduced. Rental revenue amounts presented in our same store rent calculation exclude straight-line rent, the amortization of above and below-market leases and reimbursements from tenants for recoverable real estate taxes and operating expenses. Same Store Rental Revenue for All Properties Owned (1) Number of Properties 4,951 2019 $ 1,210,200 2018 $ 1,193,346 Increase (in dollars) $ 16,854 Increase (percent) 1.4% (1) Includes revenue generated from all properties owned continuously from January 1, 2018 through December 31, 2019. Q4 2019 Supplemental Operating & Financial Data 23

 
Same Store Rental Revenue (Cont'd) (dollars in thousands) Same Store Rental Revenue by Property Type Fourth Quarter 2019 Quarter Ended Quarter Ended Net % Change by Property Type December 31, 2019 December 31, 2018 Change Property Type Retail $ 241,345 $ 236,113 $ 5,232 2.2 % Industrial 36,014 35,543 471 1.3 % Agriculture 5,604 5,535 69 1.2 % Office 13,514 13,594 (80) (0.6)% Total $ 296,477 $ 290,785 $ 5,692 2.0 % 2019 Year Ended Year Ended Net % Change by Property Type December 31, 2019 December 31, 2018 Change Property Type Retail $ 956,070 $ 939,839 $ 16,231 1.7 % Industrial 143,686 141,532 2,154 1.5 % Agriculture 22,295 22,019 276 1.3 % Office 53,525 54,186 (661) (1.2)% Total $ 1,175,576 $ 1,157,576 $ 18,000 1.6 % Q4 2019 Supplemental Operating & Financial Data 24

 
Occupancy By Property Change in Occupancy Occupied Properties 6,389 Vacant Properties at 9/30/2019 102 Total Properties 6,483 Occupancy 98.6% Expiration Activity (1) + 44 Leasing Activity (2) - 28 By Square Footage Vacant Disposition Activity (3) - 24 Occupied Square Footage 104,419,847 Total Square Footage 106,273,208 Vacant Properties at 12/31/2019 94 Occupancy 98.3% (1) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current quarter. By Rental Revenue (Economic Occupancy) (2) Includes 25 expirations that were re-leased to the same tenants without Quarterly Cash Rental Revenue $ 367,145,274 vacancy, one that was re-leased to a new tenant without a period of vacancy and two that were re-leased to new tenants after a period of vacancy. See Quarterly Cash Vacant Rental Revenue (1) $ 4,718,685 page 26 for additional detail on re-leasing activity. Occupancy 98.7% (3) Includes 16 properties that were vacant at the beginning of the quarter. (1) Based on contractual monthly rents received immediately preceding the date of vacancy. Occupancy by Number of Properties Q4 2019 Supplemental Operating & Financial Data 25

 
Leasing Activity (dollars in thousands) Re-leased to New Tenant Allocation Based on Number of Leases Re-leased to Without After a Period Re-leasing Q4 2019 Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 5,680 $ 106 $ 293 $ 6,079 New Cash Rents* $ 6,125 $ 122 $ 210 $ 6,457 Recapture Rate 107.8% 115.1% 71.7% 106.2% Number of Leases 25 1 2 28 Average Months Vacant — — 35.5 2.5 Lease Incentives(1) $ — $ — $ — $ — *Percentage of Total Annualized Portfolio Rental Revenue: 0.4% Re-leased to New Tenant Re-leased to Without After a Period Re-leasing 2019 Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 51,754 $ 744 $ 1,107 $ 53,605 New Cash Rents* $ 53,196 $ 610 $ 1,172 $ 54,978 Recapture Rate 102.8% 82.0% 105.9% 102.6% Number of Leases 199 7 8 214 Average Months Vacant — — 17.7 0.7 Lease Incentives (1) $ — $ — $ — $ — *Percentage of Total Annualized Portfolio Rental Revenue: 3.5% (1) Lease incentives are defined as capital outlays made on behalf of a tenant that are specific to the tenant’s use and benefit, and are not capitalized as improvements to the property. Q4 2019 Supplemental Operating & Financial Data 26

 
Lease Expirations (dollars in thousands)  Our leases have a weighted average remaining lease term of approximately 9.2 years. Total Portfolio (1) Approx. Rental Revenue for % of Expiring Leases Leasable the Quarter Ended Rental Year Retail Non-Retail Sq. Feet December 31, 2019 Revenue 2020 223 12 2,569,200 $ 9,679 2.6% 2021 326 16 5,281,900 15,098 4.0 2022 417 23 9,516,900 21,500 5.8 2023 557 23 10,344,900 31,139 8.3 2024 415 16 7,039,400 22,182 5.9 2025 394 16 7,298,300 26,700 7.1 2026 330 4 5,101,200 16,768 4.5 2027 560 5 6,702,600 23,018 6.2 2028 436 14 10,227,400 24,697 6.6 2029 520 7 9,490,100 25,230 6.8 2030 221 14 4,242,700 20,081 5.4 2031 322 25 6,294,400 28,717 7.7 2032 133 4 3,723,100 13,965 3.7 2033 284 1 3,486,200 17,731 4.7 2034 312 1 4,375,500 27,451 7.4 2035 - 2044 834 5 8,667,100 49,604 13.3 Totals 6,284 186 104,360,900 $ 373,560 100.0% (1) This table sets forth the timing of remaining lease term expirations in our portfolio and their contribution to rental revenue for the quarter ended December 31, 2019. The lease expirations for leases under construction are based on the estimated date of completion of those projects. Excludes revenue of $493 from expired leases, $354 from sold properties, and rental revenue (reimbursable) of $19,810 at December 31, 2019. Leases on our multi-tenant properties are counted separately in the table above. Q4 2019 Supplemental Operating & Financial Data 27

 
Earnings Guidance We estimate FFO per share for 2020 of $3.45 to $3.51, inclusive of a $0.03 per share loss due to the early redemption of the 5.750% Notes due 2021. We estimate AFFO per share for 2020 of $3.50 to $3.56, an increase of 5% to 7% over 2019 AFFO per share of $3.32. Summarized below are approximate estimates of the key components of the company’s 2020 earnings guidance: 2020 Guidance Net income per share $1.42 to $1.48 Real estate depreciation and impairments per share $2.09 Gains on sales of properties per share ($0.06) FFO per share $3.45 to $3.51 AFFO per share $3.50 to $3.56 Same store rent growth 1.0% Occupancy 98% G&A expenses (% of revenues) (1)(2) 5.0% Property expenses (non-reimbursable) (% of revenues) (1) 1.5% Income tax expenses $10 to $13 million Acquisition volume $2.25 to $2.75 billion Disposition volume $200 to $225 million (1) Excludes tenant reimbursement revenue. (2) Cash G&A (which excludes stock-based compensation expense) as a percentage of rental revenue, excluding reimbursements, is expected to be approximately 4% in 2020. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, domestic and foreign real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets,changes in foreign currency exchange rates, property acquisitions and the timing of these acquisitions, charges for property impairments, and the outcome of any legal proceedings to which the company is a party, as described in the company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this Supplemental Operating & Financial Data. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made. Q4 2019 Supplemental Operating & Financial Data 28

 
Analyst Coverage Equity Research Baird RJ Milligan [email protected] (813) 273-8252 Bank of America Merrill Lynch Joshua Dennerlein [email protected] (646) 855-1681 BTIG Michael Gorman [email protected] (212) 738-6138 James Sullivan [email protected] (212) 738-6139 Capital One Chris Lucas [email protected] (571) 633-8151 Citigroup Michael Bilerman [email protected] (212) 816-1383 Christy McElroy [email protected] (212) 816-6981 D.A. Davidson Barry Oxford [email protected] (212) 240-9871 Deutsche Bank Shivani Sood [email protected] (212) 250-4617 Edward Jones James Shanahan [email protected] (314) 515-5292 Green Street Spenser Allaway [email protected] (949) 640-8780 Janney Montgomery Scott Robert Stevenson [email protected] (646) 840-3217 Jefferies Linda Tsai [email protected] (212) 778-8011 Jonathan Petersen [email protected] (212) 284-1705 Brandon Travis [email protected] (212) 778-8743 J.P. Morgan Anthony Paolone [email protected] (212) 622-6682 Nikita Bely [email protected] (212) 622-0695 Ladenburg Thalmann John Massocca [email protected] (212) 409-2543 Mizuho Securities USA, Inc. Haendel St. Juste [email protected] (212) 205-7860 Morgan Stanley Vikram Malhotra [email protected] (212) 761-7064 Kevin Egan [email protected] (212) 761-5028 Raymond James Collin Mings [email protected] (727) 567-2585 Paul Puryear [email protected] (727) 567-2253 Marnie Georges [email protected] (727) 567-2638 RBC Capital Markets Wes Golladay [email protected] (440) 715-2650 Brian Hawthorne [email protected] (440) 715-2653 Scotiabank Nicholas Yulico [email protected] (212) 225-6904 Greg McGinniss [email protected] (212) 225-6906 Stifel Simon Yarmak [email protected] (443) 224-1345 Moshe Levin [email protected] (443) 224-1264 Wells Fargo Todd Stender [email protected] (562) 637-1371 Philip DeFelice [email protected] (443) 263-6442 Jason Belcher [email protected] (443) 462-7354 Realty Income is covered by the analysts at the firms listed above. This list may not be complete and is subject to change. Please note that any opinions, estimates or forecasts regarding Realty Income's performance made by these analysts are theirs alone and do not represent opinions, estimates or forecasts of Realty Income or its management. Realty Income does not by its reference above or distribution imply, and expressly disclaims, any endorsement of or concurrence with any information, estimates, forecasts, opinions, conclusions or recommendations provided by analysts. Q4 2019 Supplemental Operating & Financial Data 29