Realty Income Corporation · NYSE:O
Realty Income — Q1 2020 Earnings Presentation
29 slides from Realty Income's earnings presentation, May 4, 2020
Slide 1: Q1 2020 Supplemental Operating & Financial Data
Exhibit 99.2 An S&P 500 SUPPLEMENTAL OPERATING company S&P 500 & FINANCIAL DATA Dividend Aristocrats® Q1 2020 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 ® and member of the S&P 500 Dividend Aristocrats index dedicated to Michael R. Pfeiffer, EVP, Chief Administrative Officer, Genera
Slide 4: Consolidated Statements Of Income
Consolidated Statements Of Income (dollars in thousands, except per share amounts (1)) (unaudited) Three Months Ended March 31, 2020 2019 REVENUE Rental (including reimbursable) (2) $ 412,157 $ 354,037 Other 2,184 328 Total revenue 414,341 354,365 EXPENSES Depreciation and amortization 164,585 137,5
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) March 31, 2020 December 31, 2019 ASSETS Real estate held for investment, at cost: Land $ 5,742,023 $ 5,684,034 Buildings and improvements 14,070,733 13,833,882 Total real estate held for investment, at cost 19,
Slide 8: Debt Summary
Debt Summary (dollars in thousands) Maturity Date as of Principal Balance as of Interest Rate as of Weighted Average March 31, 2020 March 31, 2020 % of Debt March 31, 2020 Years until Maturity Credit Facility Credit Facility (1) March 24, 2023 $ 615,176 8.1% 1.29% (6) 3.0 years Unsecured Term Loans
Slide 9: Debt Maturities
Debt Maturities as of March 31, 2020 (dollars in millions) Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loans Payable Notes and Bonds Total Interest Rate(1) 2020 $ — $ 250.0 $ 82.6 $ — $ 332.6 3.20% 2021 — — 68.8 — 68.8 5.61% 2022 — — 111.8 950.0
Slide 10: Capitalization & Financial Ratios
Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Capitalization as of March 31, 2020 Capital Structure as of March 31, 2020 (2) Principal Debt Balance Credit Facility (2) $ 615,176 Unsecured Term Loans 500,000 Senior Unsecured Notes and Bonds 6,041,230 Mortgages Pay
Slide 11: Adjusted EBITDAre & Coverage Ratios
Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three Months Ended March 31, 2020 Debt Service & Fixed Charge Coverage Net income $ 147,143 Interest 75,925 Executive severance charge 3,463 Loss on extinguishment of debt 9,819 Income ta
Slide 12: Debt Covenants
Debt Covenants As of March 31, 2020 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 incu
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. 54 $ 318,300 $ 20,645 1,423,690 6.5% 14.8 2020 Acquisitions - U.K. 4 165,573 8,400 389,680 5.1% 12
Slide 14: Disposition Summary
Disposition Summary (dollars in thousands) Net Cash Capitalization Number of Properties Initial Investment Net Book Value Net Sales Proceeds Rate (1) Q1 Occupied 4 $ 88,273 $ 79,739 $ 116,082 6.2% 2020 Vacant 13 14,730 7,373 10,151 — Total Real Estate Dispositions 17 $ 103,003 $ 87,112 $ 126,233 The
Slide 15: Development Pipeline
Development Pipeline (dollars in thousands) As of March 31, 2020 Investment Estimated Remaining Retail Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) 3 $ 6,438 $ 10,942 $ 17,380 100% Development of existing properties 2 4,737 2,241 6,978 83% 5 $ 11,17
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 March 31, 2020 include the following: Number of Leases 3,473 Percentage of Annualized Rents 48% Investment Grade Number of Ratings Tenant Lea
Slide 17: Top Industries
Top 10 Industries (1) Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 Convenience stores 11.9% 11.9% 11.2% 9.6% 8.7% 9.2% Drug stores 9.0 9.0 10.2 10.9 11.2 10.6 Dollar stor
Slide 18: Industry Diversification
Industry Diversification Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 U.S. Aerospace 0.7% 0.8% 0.8% 0.9% 1.0% 1.1% Apparel stores 1.2 1.1 1.3 1.6 1.9 2.0 Automotive colli
Slide 19: Industry Diversification (Cont'd)
Industry Diversification (Cont'd) Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 Health and fitness 7.2% 7.5% 7.4% 7.5% 8.1% 7.7% Health care 1.6 1.4 1.5 1.4 1.5 1.7 Home f
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 March 31, 2020 (1) Revenue Alabama 228 98% 2,148,700 $ 7,883 2.0% Alaska 3 100 274,600 536 0.1 Arizona 153 100 2,0
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 March 31, 2020 (1) Revenue Montana 12 100% 89,100 $ 504 0.1% Nebraska 62 98 866,100 2,365 0.6 Nevada 24 9
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) March 31, 2020 (2) March 31, 2020 Grade Te
Slide 23: Same Store Rental Revenue
Same Store Rental Revenue (dollars in thousands) First Quarter 2020 Top 3 Industries Contributing to the Change Same Store Rental Revenue Quarter Ended Quarter Ended Net % Change Industry March 31, 2020 March 31, 2019 Change by Industry Number of Properties 5,535 Convenience Stores $ 41,435 $ 40,934
Slide 24: Occupancy
Occupancy By Property Change in Occupancy Occupied Properties 6,428 Vacant Properties at 12/31/2019 94 Total Properties 6,525 Occupancy 98.5% Expiration Activity (1) + 109 Leasing Activity (2) - 93 By Square Footage Vacant Disposition Activity (3) - 13 Occupied Square Footage 104,094,543 Total Squar
Slide 25: 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 Q1 2020 Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 14,776 $ 2,967 $ 254 $ 17,997 New Cash Rents* $ 15,327 $ 2,210 $ 281 $ 17,818 Recapture
Slide 26: 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 March 31, 2020 Revenue 2020 126 8 1,701,4
Slide 27: Summary of COVID-19 Impact
Summary of COVID-19 Impact The COVID-19 pandemic and the measures taken to limit the spread are negatively impacting the economy, including the industries in which some of our tenants operate. These impacts are likely to continue and may increase in severity as the duration of the pandemic lengthens
Slide 28: April Rent Collections by Industry
April Rent Collections by Industry Percentage Percentage of April 2020 of April 2020 Percentage Total Contractual Percentage Total Contractual of Total Contractual Rent of Total Contractual Rent Rent due Collected as of Rent due Collected as of for April 2020 (1) May 1, 2020 (1) for April 2020 (1) M
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