Realty Income Corporation · NYSE:O
Realty Income — Q4 2017 Earnings Presentation
27 slides from Realty Income's earnings presentation, Feb 21, 2018
Slide 1: Table Of Contents
Table Of Contents 2 Q4 2017 Supplemental Operating & Financial Data This Supplemental Operating & Financial Data should be read in connection with the company's fourth quarter 2017 earnings press release (included as Exhibit 99.1 of the company's Current Report on Form 8-K, filed on February 21, 201
Slide 2: Corporate Overview
Senior Management John P. Case, Chief Executive Officer Sumit Roy, President and Chief Operating Officer Paul M. Meurer, Executive VP, Chief Financial Officer and Treasurer Michael R. Pfeiffer, Executive VP, General Counsel and Secretary Neil M. Abraham, Executive VP, Chief Investment Officer Benjam
Slide 3: Consolidated Statements Of Income
Consolidated Statements Of Income (dollars in thousands, except per share amounts) 4 Q4 2017 Supplemental Operating & Financial Data (unaudited) (unaudited) Three months ended Year ended December 31, December 31, 2017 2016 2017 2016 REVENUE Rental $ 298,899 $ 275,224 $ 1,166,224 $ 1,057,413 Tenant r
Slide 4: Funds From Operations (FFO)
Funds From Operations (FFO) (dollars in thousands, except per share amounts) 5 Q4 2017 Supplemental Operating & Financial Data 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
Slide 5: Adjusted Funds From Operations (AFFO)
Adjusted Funds From Operations (AFFO) (dollars in thousands, except per share amounts) 6 Q4 2017 Supplemental Operating & Financial Data 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 prese
Slide 6: Consolidated Balance Sheets
Consolidated Balance Sheets (dollars in thousands , except per share amounts) 7 Q4 2017 Supplemental Operating & Financial Data December 31, 2017 December 31, 2016 ASSETS (unaudited) Real estate, at cost: Land $ 4,080,400 $ 3,752,204 Buildings and improvements 10,936,069 10,112,212 Total real estate
Slide 7: Debt Summary
Debt Summary (dollars in thousands) 8 Q4 2017 Supplemental Operating & Financial Data Principal Interest Weighted Maturity Date as of Balance as of Rate as of Average Years December 31, 2017 December 31, 2017 % of Debt December 31, 2017 until Maturity Credit Facility Credit Facility (1) June 30, 201
Slide 8: Debt Maturities
Debt Maturities (dollars in millions) 9 Q4 2017 Supplemental Operating & Financial Data Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loans Payable Notes and Bonds Total Interest Rate (1) 2018 $ - $ 195.9 $ 21.9 $ 350.0 $ 567.8 2.10% 2019 110.0 - 2
Slide 9: Capitalization & Financial Ratios
Capital Structure as of December 31, 2017 Capitalization & Financial Ratios (dollars in thousands , except per share amounts) 10 Q4 2017 Supplemental Operating & Financial Data Liquidity as of December 31, 2017 Cash on Hand $ 6,898 Availability under Credit Facility 1,890,000 $ 1,896,898 Capitalizat
Slide 10: Adjusted EBITDA & Coverage Ratios
Debt Service Coverage (4) Fixed Charge Coverage (5) Adjusted EBITDA & Coverage Ratios (dollars in thousands) 11 Q4 2017 Supplemental Operating & Financial Data Reconciliation of Net Income to Adjusted EBITDA (1) Three months ended December 31, 2017 Net income $ 60,952 Interest (2) 103,903 Income tax
Slide 11: Debt Covenants
Debt Covenants 12 Q4 2017 Supplemental Operating & Financial Data As of December 31, 2017 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,
Slide 12: Investment Summary
First Quarter 2017 Number of Properties Investment Cash Rents Leasable Square Feet Cash Capitalization Rate (1) Weighted Average Lease Term (Years) New Property Acquisitions (2) 51 $ 365,754 $ 22,190 1,026,428 6.1% 16.5 Properties under Development (3) 9 4,982 382 435,298 7.7% 11.3 Total Real Estate
Slide 13: Disposition Summary
First Quarter 2017 Number of Properties Original Investment Net Book Value Net Proceeds Cash Capitalization Rate (1) Occupied 2 $ 12,004 $ 9,264 $ 14,831 8.3% Vacant 12 18,718 11,329 16,401 - Total Real Estate Dispositions 14 $ 30,722 $ 20,593 $ 31,232 The unlevered internal rate of return on proper
Slide 14: Development Pipeline
(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 2018 and July 2018. Development Pipeline (dollars in thousands) 15 Q4 2017 Supp
Slide 15: Tenant Diversification
Top 20 Tenants Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at December 31, 2017 include the following: Investment Grade Tenants (2) : Number of Properties 2,186 Percentage of Annualized Rents 46% Percentage of Leases with Rental Increases, Based on Revenue
Slide 16: Industry Diversification
* Less than 0.1% Industry Diversification 17 Q4 2017 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at the end of each period presented, including revenue from properties reclassified as discontinued operations. Percentage of Rental Revenue (1) For the Q
Slide 17: Industry Diversification (Cont'd)
Industry Diversification (Cont’d) 18 Q4 2017 Supplemental Operating & Financial Data * Less than 0.1% (1) Includes rental revenue for all properties owned at the end of each period presented, including revenue from properties reclassified as discontinued operations. Percentage of Rental Revenue (1)
Slide 18: Geographic Diversification
* Less than 0.1% (1) Includes rental revenue for all properties owned at December 31, 2017. Excludes rental revenue of $1,412 from sold properties. Geographic Diversification (dollars in thousands) 19 Q4 2017 Supplemental Operating & Financial Data Approximate Rental Revenue for Percentage of Number
Slide 19: Property Type Composition
Property Type Composition (dollars in thousands) 20 Q4 2017 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at December 31, 2017. Excludes rental revenue of $1,412 from sold properties. (2) Refer to footnote 2 on page 16 for our definition of investment g
Slide 20: Fourth Quarter 2017 Same Store Rental Revenue
Top 3 Industries Contributing to the Change Quarter ended Quarter ended Net % Change Industry December 31, 2017 December 31, 2016 Change by Industry Child Care $ 4,972 $ 4,641 $ 331 7.1 % Restaurants – Casual Dining 7,589 7,272 317 4.4 % Health and Fitness 20,434 20,118 316 1.6 % Fourth Quarter 2017
Slide 21: Same Store Rental Revenue (Cont'd)
Same Store Rental Revenue (Cont’d)(dollars in thousands) 22 Q4 2017 Supplemental Operating & Financial Data Same Store Rental Revenue by Property Type Fourth Quarter 2017 Quarter ended Quarter ended Net % Change by Contribution by Property Type December 31, 2017 December 31, 2016 Change Property Typ
Slide 22: Occupancy
By Property Occupied Properties 5,089 Total Properties 5,172 Occupancy 98.4% By Square Footage Occupied Square Footage 87,742,464 Total Square Footage 89,602,143 Occupancy 97.9% By Rental Revenue (Economic Occupancy) Quarterly Rental Revenue $ 294,009,690 Quarterly Vacant Rental Revenue $ 4,581,829
Slide 23: Leasing Activity
Allocation Based on Number of Leases Leasing Activity (dollars in thousands) 24 Q4 2017 Supplemental Operating & Financial Data (1) Incremental yield reflects the yield generated by capital commitments made at the time of re-lease, and is calculated as the incremental cash rents divided by additiona
Slide 24: Expirations
25 (1) This table sets forth the timing of remaining lease term expirations on our 5,062 net leased, single-tenant properties as of December 31, 2017 and their contribution to rental revenue for the quarter ended December 31, 2017. Excludes 28 multi-tenant properties and 83 vacant properties, includ
Slide 25: Earnings Guidance
26 We estimate FFO per share for 2018 of $3.11 to $3.19. We estimate AFFO per share for 2018 of $3.14 to $3.20, an increase of 3% to 5% over 2017 AFFO per share of $3.06. Summarized below are approximate estimates of the key components of the company’s 2018 earnings guidance: Earnings Guidance Q4 20
Slide 26: Analyst Coverage
27 Q4 2017 Supplemental Operating & Financial Data Realty Income Corporation 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 Corporation's performance made by t
Slide 27: Analyst Coverage
Analyst Coverage REALTY (INCOME The Monty vidend Company" aul Research ae Magan ‘inlgan@baidcom (x27.082 Witla Harman ‘wtaman@rwbaiicom (4192982337 Bank of Ameria Merl ch Joana Dennen Joibuadennedeng@bantcom (6105s 1681 onc nae Goran ‘maamanetiacon ane. Janes in iaahan@bigcom aun78.6139 apts oe Ons