Realty Income Corporation · NYSE:O
Realty Income — Q1 2022 Earnings Presentation
31 slides from Realty Income's earnings presentation, May 4, 2022
Slide 1: Supplemental Operating & Financial Data Q1 2022
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q1 2022 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q1 2022 Supplemental Operating & Financial Data 2 Table of Contents Corporate Overview 3 Financial Summary Consolidated Statements of Income 4 Funds From Operations (FFO) and Normalized Funds From Operations (Normalized FFO) 5 Adjusted Funds From Operations (AFFO) 6 Consolidated Balance Sheets 7 Deb
Slide 3: Corporate Overview
Q1 2022 Supplemental Operating & Financial Data 3 One Team Senior Management Neil M. Abraham, EVP, Chief Strategy Officer, Realty Income International - President Michelle Bushore, EVP, Chief Legal Officer, General Counsel and Secretary Mark E. Hagan, EVP, Chief Investment Officer Shannon Kehle, EVP
Slide 4: Consolidated Statements of Income
Q1 2022 Supplemental Operating & Financial Data 4 (unaudited) Three Months Ended March 31, 2022 2021 REVENUE Rental (including reimbursable) (1) $ 799,565 $ 439,365 Other (2) 7,778 2,889 Total revenue 807,343 442,254 EXPENSES Depreciation and amortization 403,762 177,985 Interest 106,403 73,075 Prop
Slide 5: FFO and Normalized FFO
Q1 2022 Supplemental Operating & Financial Data 5 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 6: Adjusted Funds From Operations (AFFO)
Q1 2022 Supplemental Operating & Financial Data 6 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 7: Consolidated Balance Sheets
Q1 2022 Supplemental Operating & Financial Data 7 Consolidated Balance Sheets (in thousands, except per share and share count data) (unaudited) March 31, 2022 December 31, 2021 ASSETS Real estate held for investment, at cost: Land $ 11,158,545 $ 10,753,750 Buildings and improvements 25,648,515 25,15
Slide 8: Debt Summary
Q1 2022 Supplemental Operating & Financial Data 8 Debt Summary as of March 31, 2022 (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 $ 569,625 3.6 % 1.24 %
Slide 9: Senior Unsecured Notes and Bonds
Q1 2022 Supplemental Operating & Financial Data 9 Senior Unsecured Notes and Bonds (1) (dollars in thousands) Maturity Dates Principal Amount (Currency Denomination) Principal Balance (USD) as of March 31, 2022 % of Debt Interest Rate 4.600% Notes due 2024 (2) February 6, 2024 $ 499,999 $ 499,999 3.
Slide 10: Debt Maturities
Q1 2022 Supplemental Operating & Financial Data 10 Debt Maturities as of March 31, 2022 (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 $ 950.0 $ —
Slide 11: Capitalization & Financial Ratios
Q1 2022 Supplemental Operating & Financial Data 11 Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Cash on Hand $ 151,624 Availability under Credit Facility (4) 2,430,375 Less: Commercial Paper Borrowings (950,000) $ 1,631,999 (3) Liquidity calculation excludes bor
Slide 12: Adjusted EBITDAre & Coverage Ratios
Q1 2022 Supplemental Operating & Financial Data 12 Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three Months Ended March 31, 2022 Net income $ 199,971 Interest 106,403 Income taxes 10,981 Depreciation and amortization 403,762 Provis
Slide 13: Debt Covenants
Q1 2022 Supplemental Operating & Financial Data 13 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 14: Investment Summary
Q1 2022 Supplemental Operating & Financial Data 14 Investment Summary Number of Properties Investment ($ in millions) Cash Rents ($ in millions) Leasable Square Feet (in thousands) Initial Weighted Average Cash Lease Yield (1) Weighted Average Lease Term (Years) Q1 2022 Acquisitions - U.S. 139 $ 629
Slide 15: Disposition Summary
Q1 2022 Supplemental Operating & Financial Data 15 Disposition Summary (dollars in thousands) Number of Properties Net Book Value Net Sales Proceeds Net Cash Capitalization Rate (1) Q1 2022 Occupied 3 $ 2,844 $ 3,132 8.9% Vacant 31 109,183 119,051 — Total real estate dispositions 34 $ 112,027 $ 122,
Slide 16: Development Pipeline
Q1 2022 Supplemental Operating & Financial Data 16 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) 102 $ 56,319 $ 446,964 $ 503,283 (3) 11 % 100 % Developm
Slide 17: Our Top Clients
Q1 2022 Supplemental Operating & Financial Data 17 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 March 31, 2022, include the following: Our Investment Grade Clients (3) Number of Leases 5,4
Slide 18: Top 10 Industries
Q1 2022 Supplemental Operating & Financial Data 18 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Grocery stores 10.4% 10.2% 9.8% 7.9% 5.0% Convenience stores 9.1 9.1 11.9 12.3 12.6 Dollar stores 7
Slide 19: Industry Diversification
Q1 2022 Supplemental Operating & Financial Data 19 Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 United States Aerospace 0.4% 0.4% 0.6% 0.8% 0.9% Apparel stores 1.5 1.5 1.3 1.1 1.2 Automotive collision services 1.0 1.
Slide 20: Industry Diversification (continued)
Q1 2022 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Machinery 0.1 0.1 0.1 0.1 0.1 Motor vehicle dealerships 1.2 1.3 1.6 1.6 1.8 Office supplies 0.2 0.2 0.1 0.2 0.2 Other ma
Slide 21: Geographic Diversification
Q1 2022 Supplemental Operating & Financial Data 21 Geographic Diversification Balanced presence in 50 states, Puerto Rico, the United Kingdom and Spain.
Slide 22: Property Type Composition
Q1 2022 Supplemental Operating & Financial Data 22 Property Type Composition (dollars in thousands) Property Type Number of Properties Approximate Leasable Square Feet (1) Total Portfolio Annualized Contractual Rent as of March 31, 2022 Percentage of Total Portfolio Annualized Contractual Rent as of
Slide 23: Same Store Rental Revenue
Q1 2022 Supplemental Operating & Financial Data 23 Q1 2022 Same Store Rental Revenue Number of properties 9,728 Square footage 169,816,153 Q1 2022 $ 629,886 Q1 2021 $ 605,266 Increase (in dollars) $ 24,620 Increase (percent) 4.1 % Same Store Rental Revenue (1) (dollars in thousands) Top 3 Industries
Slide 24: Same Store Rental Revenue (Cont'd)
Q1 2022 Supplemental Operating & Financial Data 24 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Q1 2022 Three Months Ended Three Months Ended Net % Change by Property Type March 31, 2022 March 31, 2021 Change Property Type Retail $ 530,809 $ 507,946 $ 22,863 4.5 % Industrial 86,118
Slide 25: Occupancy
Q1 2022 Supplemental Operating & Financial Data 25 By Property Occupied properties 11,132 Total properties 11,288 Occupancy (1) 98.6 % By Square Footage Occupied square footage 211,223,443 Total square footage 213,893,637 Occupancy 98.8 % By Rental Revenue (Economic Occupancy) Quarterly cash rental
Slide 26: Leasing Activity
Q1 2022 Supplemental Operating & Financial Data 26 Allocation Based on Number of Leases Leasing Activity Q1 2022 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 27,048,773 $ 309,441 $ 2,483,070 $ 29,841,284 New cash rent
Slide 27: Lease Expirations
Q1 2022 Supplemental Operating & Financial Data 27 (1) This table sets forth the timing of remaining lease term 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 March 31, 2022. Leases on our mul
Slide 28: Earnings Guidance
Q1 2022 Supplemental Operating & Financial Data 28 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 29: Analyst Coverage
Q1 2022 Supplemental Operating & Financial Data 29 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 30: Glossary
Q1 2022 Supplemental Operating & Financial Data 30 Glossary T Adjusted EBITDAre. The National Association of Real Estate Investment Trusts (Nareit) established a EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent
Slide 31: Glossary (Cont'd)
Q1 2022 Supplemental Operating & Financial Data 31 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