Realty Income (O) released fourth quarter and full-year earnings for 2014 on Tuesday evenings and recorded adjusted funds from operation, AFFO, of $0.65 per share. Because AFFO excludes depreciation of real estate, as well as one time charges, it is a better indicator of cash flow and performance for real estate investment trusts, REITs, than the more traditional net income. Although Realty’s Income earnings missed consensus estimates by $0.01 per share, it represents a 4.8% increase from the fourth quarter of 2013.

For the full-year, the company reported AFFO of $2.57, which is a 6.6% improvement from 2013. Realty Income’s CEO John Case suggested that he was “[P]leased to report excellent operating performance for the fourth quarter and for 2014… This earnings growth allowed us to increase dividends paid per share by 2.1% in 2014, and another 3.0% this month.”

CEO Case went on to say that the company was recently added to the “exclusive S&P High Yield Dividend Aristocrats® index for increasing our dividend every year for 20 years.”

Portfolio update
During the year, Realty Income made $1.4 billion in acquisitions which makes 2014 the "second most acquisitive year in the company's history." The properties added to a portfolio of predominately retail properties which stands at 4,327, today. 

The company suggested that they will continue to remain selective with acquisition, but considering the “healthy volume of acquisitions opportunities we are currently seeing, we are raising our acquisitions guidance for 2015 from $500 million - $800 million to $700 million - $1 billion.”

Most importantly, Realty Income has $1.12 billion worth of available credit they can borrow at any time. This, along with cash and equity, gives the company plenty of ammunition to make their acquisition guidance a reality.

Leasing activity
2014 was also one of the most active years for lease-rollover, and Realty Income was able to “re-lease 203 properties with expiring leases to existing tenants or new tenants, recapturing 99.3% of expiring rent.”

This allowed the company to improve its total portfolio occupancy rate to 98.4%, a 0.2% increase from last year. This remains among the highest occupancy rates in the industry, and the highest for Realty Income since 2007.

2015 guidance
Realty Income suggested that AFFO should range from $2.66 to $2.71 for the full-year 2015. This would represent an improvement of 3.5% to 5.4%.

For investor looking for a deeper look into Realty Income’s full-year results, the company will be holding its conference call on February 18th at 11:30am, which you can access through Realty Income’s investor relations website.