Realty Income Corporation · NYSE:O
Realty Income — Q4 2021 Earnings Presentation
33 slides from Realty Income's earnings presentation, Feb 22, 2022
Slide 1: Supplemental Operating & Financial Data Q4 2021
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q4 2021 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q4 2021 Supplemental Operating & Financial Data 2 Table of Contents Corporate Overview 3 Rent Collections Update 4 Rental Revenue Reserves and Reserve Reversals 5 Financial Summary Consolidated Statements of Income 6 Funds From Operations (FFO) and Normalized Funds From Operations (Normalized FFO) 7
Slide 3: Corporate Overview
Q4 2021 Supplemental Operating & Financial Data 3 One Team Senior Management Neil M. Abraham, President, Realty Income International & EVP, Chief Strategy Officer Michelle Bushore, EVP, Chief Legal Officer, General Counsel and Secretary Mark E. Hagan, EVP, Chief Investment Officer Shannon Kehle, EVP
Slide 4: Rent Collections Update
Q4 2021 Supplemental Operating & Financial Data 4 Rent Collections Update Percentages of Contractual Rent Collected as of December 31, 2021 (1) Collection rates are calculated as the aggregate contractual rent collected for the applicable period from the beginning of that applicable period through D
Slide 5: Rental Revenue Reserves and Reserve Reversals
Q4 2021 Supplemental Operating & Financial Data 5 Rental Revenue Reserves and Reserve Reversals (1) Theater Industry Update As of December 31, 2021, our clients in the theater industry represented 3.4% of our annualized contractual rent. As of December 31, 2021, we were fully reserved for the outsta
Slide 6: Consolidated Statements of Income
Q4 2021 Supplemental Operating & Financial Data 6 (unaudited) (unaudited) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 REVENUE Rental (including reimbursable) (1) $ 679,000 $ 415,306 $ 2,064,958 $ 1,639,533 Other (2) 6,019 2,322 15,505 7,554 Total revenue 685,019 417,6
Slide 7: FFO and Normalized FFO
Q4 2021 Supplemental Operating & Financial Data 7 FFO and Normalized FFO (1) (in thousands, except per share and share count 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 Normalized FFO. Also p
Slide 8: Adjusted Funds From Operations (AFFO)
Q4 2021 Supplemental Operating & Financial Data 8 The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable GAAP measure) to Normalized FFO and AFFO. Also presented is information regarding distributions paid to common stockholders and
Slide 9: Consolidated Balance Sheets
Q4 2021 Supplemental Operating & Financial Data 9 Consolidated Balance Sheets (in thousands, except per share and share count data) (unaudited) December 31, 2021 December 31, 2020 ASSETS Real estate held for investment, at cost: Land $ 10,753,750 $ 6,318,926 Buildings and improvements 25,155,178 14,
Slide 10: Debt Summary
Q4 2021 Supplemental Operating & Financial Data 10 Debt Summary as of December 31, 2021 (dollars in thousands) Maturity Dates Carrying Value (USD) % of Debt Interest Rate Weighted Average Years Until Maturity Credit Facility and Commercial Paper (1) Credit Facility March 24, 2023 $ 650,000 4.3 % 0.8
Slide 11: Senior Unsecured Notes and Bonds
Q4 2021 Supplemental Operating & Financial Data 11 Senior Unsecured Notes and Bonds (1) (dollars in thousands) Maturity Dates Principal Amount (Currency Denomination) Principal Balance (USD) as of December 31, 2021 % of Debt Interest Rate 4.600% Notes due 2024 (2) February 6, 2024 $ 499,999 $ 499,99
Slide 12: Debt Maturities
Q4 2021 Supplemental Operating & Financial Data 12 Debt Maturities as of December 31, 2021 (dollars in millions) Year of Maturity Credit Facility and Commercial Paper (1) Term Loan Mortgages Payable Senior Unsecured Notes and Bonds (2) Total Weighted Average Expiring Interest Rate (3) 2022 $ 901.4 $
Slide 13: Capitalization & Financial Ratios
Q4 2021 Supplemental Operating & Financial Data 13 Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Cash on Hand $ 258,579 Availability under Credit Facility (4) 2,350,000 Less: Commercial Paper Borrowings (901,376) $ 1,707,203 (3) Liquidity calculation excludes bor
Slide 14: Adjusted EBITDAre & Coverage Ratios
Q4 2021 Supplemental Operating & Financial Data 14 Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) and Pro Forma Adjusted EBITDAre Three Months Ended December 31, 2021 Net income (2) $ 4,467 Interest 100,739 Loss on extinguishment of d
Slide 15: Debt Covenants
Q4 2021 Supplemental Operating & Financial Data 15 Debt Covenants 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 investo
Slide 16: Investment Summary
Q4 2021 Supplemental Operating & Financial Data 16 Investment Summary (1) (dollars in thousands) Number of Properties Investment Cash Rents Leasable Square Feet Initial Weighted Average Cash Lease Yield (2) Weighted Average Lease Term (Years) Q1 2021 Acquisitions - U.S. 77 $ 566,909 $ 31,887 2,298,6
Slide 17: Disposition Summary
Q4 2021 Supplemental Operating & Financial Data 17 Disposition Summary (1) (dollars in thousands) Number of Properties Net Book Value (2) Net Sales Proceeds Net Cash Capitalization Rate (3) Q1 2021 Occupied 4 $ 9,954 $ 12,592 7.2% Vacant 23 16,265 22,113 — Total real estate dispositions 27 $ 26,219
Slide 18: Development Pipeline
Q4 2021 Supplemental Operating & Financial Data 18 Development Pipeline (dollars in thousands) Retail Number of Properties Investment to Date Estimated Remaining Investment Total Commitment Percent Funded Percent Leased (1) New development (2) 68 $ 48,882 $ 232,897 $ 281,780 (3) 17 % 100 % Developme
Slide 19: Client Diversification
Q4 2021 Supplemental Operating & Financial Data 19 Our Top 20 Clients Our 20 largest clients based on percentage of total portfolio annualized contractual rent, which does not give effect to deferred rent at December 31, 2021 include the following: Our Investment Grade Clients (3) Number of Leases 5
Slide 20: Top 10 Industries
Q4 2021 Supplemental Operating & Financial Data 20 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 Grocery stores 10.2% 9.8% 7.9% 5.0% 5.3% Convenience stores 9.1 11.9 12.3 12.6 9.3 Dollar stores 7.
Slide 21: Industry Diversification
Q4 2021 Supplemental Operating & Financial Data 21 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 United States Aerospace 0.4% 0.6% 0.8% 0.9% 1.0% Apparel stores 1.5 1.3 1.1 1.2 1.4 Automotive collision services 1.0 1.
Slide 22: Industry Diversification (continued)
Q4 2021 Supplemental Operating & Financial Data 22 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 Machinery 0.1% 0.1% 0.1% 0.1% 0.1% Motor vehicle dealerships 1.3 1.6 1.6 1.8 2.0 Office supplies 0.2 0.1 0.2 0.2 0.2 Oth
Slide 23: Geographic Diversification
Q4 2021 Supplemental Operating & Financial Data 23 Geographic Diversification Balanced presence in 50 states, Puerto Rico, the United Kingdom and Spain.
Slide 24: Property Type Composition
Q4 2021 Supplemental Operating & Financial Data 24 Property Type Composition (dollars in thousands) Property Type Number of Properties Approximate Leasable Square Feet (1) Total Portfolio Annualized Contractual Rent as of December 31, 2021 Percentage of Total Portfolio Annualized Contractual Rent as
Slide 25: Q4 2021 Same Store Rental Revenue
Q4 2021 Supplemental Operating & Financial Data 25 Q4 2021 Same Store Rental Revenue Number of properties 6,046 Square footage 93,607,451 Q4 2021 $ 369,407 Q4 2020 $ 352,202 Increase (in dollars) $ 17,205 Increase (percent) 4.9 % Same Store Rental Revenue (1) (dollars in thousands) Top 3 Industries
Slide 26: Same Store Rental Revenue (Cont'd)
Q4 2021 Supplemental Operating & Financial Data 26 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Q4 2021 Three Months Ended Three Months Ended Net % Change by Property Type December 31, 2021 December 31, 2020 Change Property Type Retail $ 323,684 $ 308,124 $ 15,560 5.0 % Industrial 3
Slide 27: Occupancy
Q4 2021 Supplemental Operating & Financial Data 27 By Property Occupied properties 10,972 Total properties 11,136 Occupancy (1) 98.5 % By Square Footage Occupied square footage 207,520,521 Total square footage 210,067,467 Occupancy 98.8 % By Rental Revenue (Economic Occupancy) Quarterly cash rental
Slide 28: Leasing Activity
Q4 2021 Supplemental Operating & Financial Data 28 Allocation Based on Number of Leases Leasing Activity Q4 2021 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 45,898,829 $ 1,249,741 $ 1,075,717 $ 48,224,287 New cash re
Slide 29: Lease Expirations
Q4 2021 Supplemental Operating & Financial Data 29 (1) This table sets forth the timing of remaining lease terms expirations in our portfolio (excluding rights to extend a lease at the option of the client) and their contributions to annualized contractual rent as of December 31, 2021. Leases on our
Slide 30: Earnings Guidance
Q4 2021 Supplemental Operating & Financial Data 30 Earnings Guidance Summarized below are approximate estimates of the key components of our 2022 earnings guidance: 2022 Guidance Net income per share $1.08 to $1.25 Real estate depreciation and impairments per share $2.83 Gains on sales of properties
Slide 31: Analyst Coverage
Q4 2021 Supplemental Operating & Financial Data 31 Analyst Coverage Equity Research Baird Wes Golladay wgolladay@rwbaird.com (216) 737-7510 Bank of America Securities Joshua Dennerlein joshua.dennerlein@bofa.com (646) 855-1681 Berenberg Nate Crossett nate.crossett@berenberg-us.com (646) 949-9030 BTI
Slide 32: Glossary
Q4 2021 Supplemental Operating & Financial Data 32 Glossary T Adjusted EBITDAre. The National Association of Real Estate Investment Trusts (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
Slide 33: Glossary (Cont'd)
Q4 2021 Supplemental Operating & Financial Data 33 Glossary (Cont'd) Initial Weighted Average Cash Lease Yield (acquisitions) is 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 expe