Realty Income Corporation · NYSE:O
Realty Income — Q4 2019 Earnings Presentation
29 slides from Realty Income's earnings presentation, Feb 19, 2020
Slide 1: Supplemental Operating & Financial Data Q4 2019
Exhibit 99.2 An S&P 500 SUPPLEMENTAL OPERATING company S&P 500 & FINANCIAL DATA Dividend Aristocrats® Q4 2019 index member
Slide 2: Table of Contents
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 1
Slide 3: Corporate Overview
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, Gene
Slide 4: Consolidated Statements of Income
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
Slide 5: Funds From Operations (FFO)
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 stockholde
Slide 6: Adjusted Funds From Operations (AFFO)
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 t
Slide 7: Consolidated Balance Sheets
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 d
Slide 8: Debt Summary
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 Te
Slide 9: Debt Maturities
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 — —
Slide 10: Capitalization & Financial Ratios
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 P
Slide 11: Adjusted EBITDAre & Coverage Ratios
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
Slide 12: Debt Covenants
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 i
Slide 13: Investment Summary
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 10,919 785 349,7
Slide 14: Disposition Summary
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 unleve
Slide 15: Development Pipeline
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 In
Slide 16: Tenant Diversification
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
Slide 17: Top Industries
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 s
Slide 18: Industry Diversification
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 co
Slide 19: Industry Diversification (Cont'd)
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 furn
Slide 20: Geographic Diversification
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
Slide 21: Geographic Diversification (Cont'd)
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 2
Slide 22: Property Type Composition
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 Gr
Slide 23: Same Store Rental Revenue
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
Slide 24: Same Store Rental Revenue (Cont'd)
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 35,54
Slide 25: Occupancy
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
Slide 26: Leasing Activity
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 10
Slide 27: Lease Expirations
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 2,5
Slide 28: Earnings Guidance
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
Slide 29: Analyst Coverage
Analyst Coverage Equity Research Baird RJ Milligan rjmilligan@rwbaird.com (813) 273-8252 Bank of America Merrill Lynch Joshua Dennerlein joshua.dennerlein@baml.com (646) 855-1681 BTIG Michael Gorman mgorman@btig.com (212) 738-6138 James Sullivan jsullivan@btig.com (212) 738-6139 Capital One Chris Lu