Realty Income Corporation · NYSE:O
Realty Income — Q1 2021 Earnings Presentation
33 slides from Realty Income's earnings presentation, May 3, 2021
Slide 1: Supplemental Operating & Financial Data Q1 2021
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q1 2021 An S&P 500 company S&P 500 Dividend Aristocrats ® index member Exhibit 99.2
Slide 2: Table of Contents
Q1 2021 Supplemental Operating & Financial Data 2 Table of Contents Corporate Overview 3 COVID-19 Impact Summary of COVID-19 Impact 4 Financial Summary Consolidated Statements of Income 6 Funds From Operations (FFO) 7 Adjusted Funds From Operations (AFFO) 8 Consolidated Balance Sheets 9 Debt Summary
Slide 3: Corporate Overview
Q1 2021 Supplemental Operating & Financial Data 3 One Team Senior Management Neil M. Abraham, EVP, Chief Strategy Officer Michelle Bushore, EVP, Chief Legal Officer, General Counsel and Secretary Mark E. Hagan, EVP, Chief Investment Officer Christie B. Kelly, EVP, Chief Financial Officer and Treasur
Slide 4: Summary of COVID-19 Impact
Q1 2021 Supplemental Operating & Financial Data 4 Summary of COVID-19 Impact Percentages of Contractual Rent Collected as of March 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 M
Slide 5: Summary of COVID-19 Impact (Cont'd)
Q1 2021 Supplemental Operating & Financial Data 5 Summary of COVID-19 Impact (Cont'd) Unpaid Contractual Base Rent Summary (1) (in millions) As of Percentage of March 31, 2021 Total Unpaid rent and rent deferred included in AFFO $ 92.1 66.3 % Reserves on contractual base rent (2) 46.4 33.4 Reduction
Slide 6: Consolidated Statements of Income
Q1 2021 Supplemental Operating & Financial Data 6 (unaudited) Three Months Ended March 31, 2021 2020 REVENUE Rental (including reimbursable) (1) $ 439,365 $ 412,157 Other 3,439 2,184 Total revenue 442,804 414,341 EXPENSES Depreciation and amortization 177,985 164,585 Interest 73,075 75,925 Property
Slide 7: Funds From Operations
Q1 2021 Supplemental Operating & Financial Data 7 Funds From Operations(1) (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 re
Slide 8: Adjusted Funds From Operations
Q1 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 FFO and AFFO. Also presented is information regarding distributions paid to common stockholders and the weighte
Slide 9: Consolidated Balance Sheets
Q1 2021 Supplemental Operating & Financial Data 9 Consolidated Balance Sheets (dollars in thousands, except per share amounts) (unaudited) March 31, 2021 December 31, 2020 ASSETS Real estate held for investment, at cost: Land $ 6,672,885 $ 6,318,926 Buildings and improvements 15,171,070 14,696,712 T
Slide 10: Debt Summary
Q1 2021 Supplemental Operating & Financial Data 10 Debt Summary (dollars in thousands) Maturity Date as of March 31, 2021 Principal Balance as of March 31, 2021 % of Debt Interest Rate as of March 31, 2021 Weighted Average Years Until Maturity Credit Facility and Commercial Paper (1) Credit Facility
Slide 11: Debt Maturities
Q1 2021 Supplemental Operating & Financial Data 11 Debt Maturities as of March 31, 2021 (dollars in millions) Debt Maturities Year of Maturity Credit Facility and Commercial Paper (1) Term Loan Mortgages Payable Senior Unsecured Notes and Bonds Total Weighted Average Expiring Interest Rate (2) 2021
Slide 12: Capitalization & Financial Ratios
Q1 2021 Supplemental Operating & Financial Data 12 Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Cash on Hand $ 183,984 Availability under Credit Facility 3,000,000 Less: Commercial Paper Borrowings (675,000) $ 2,508,984 (2) Liquidity calculation excludes availab
Slide 13: Adjusted EBITDAre & Coverage Ratios
Q1 2021 Supplemental Operating & Financial Data 13 Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) and Pro Forma Adjusted EBITDAre Three Months Ended March 31, 2021 Net income (2) $ 96,236 Interest 73,075 Loss on extinguishment of debt
Slide 14: Debt Covenants
Q1 2021 Supplemental Operating & Financial Data 14 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 15: Investment Summary
Q1 2021 Supplemental Operating & Financial Data 15 Investment Summary (dollars in thousands) Number of Properties Investment Cash Rents Leasable Square Feet Initial Average Cash Lease Yield (1) Weighted Average Lease Term (Years) Q1 2021 Acquisitions - U.S. (2) 77 $ 566,909 $ 31,887 2,298,606 5.6% 1
Slide 16: Disposition Summary
Q1 2021 Supplemental Operating & Financial Data 16 Disposition Summary (dollars in thousands) Number of Properties Initial Investment Net Book Value Net Sales Proceeds Net Cash Capitalization Rate (1) Q1 2021 Occupied 4 $ 10,735 $ 9,954 $ 12,592 7.2% Vacant 23 33,166 16,265 22,113 — Total real estat
Slide 17: Development Pipeline
Q1 2021 Supplemental Operating & Financial Data 17 Development Pipeline (dollars in thousands) Retail Number of Properties Investment to Date Estimated Remaining Investment Total Commitment Percent Funded Percent Leased (2) New development (1) 11 $ 12,162 $ 26,517 $ 38,679 31 % 100 % Development of
Slide 18: Our Top Clients
Q1 2021 Supplemental Operating & Financial Data 18 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, 2021 include the following: Our Investment Grade Clients(3): Number of Leases 3,6
Slide 19: Top Industries
Q1 2021 Supplemental Operating & Financial Data 19 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 2016 Convenience stores 12.0% 11.9% 12.3% 12.6% 9.3% 10.0% Grocery stores 10.0 9.8 7.9 5.0
Slide 20: Industry Diversification
Q1 2021 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 2016 U.S. Aerospace 0.6% 0.6% 0.8% 0.9% 1.0% 1.1% Apparel stores 1.3 1.3 1.1 1.2 1.4 1.7 Automotive collision
Slide 21: Industry Diversification (Cont'd)
Q1 2021 Supplemental Operating & Financial Data 21 Industry Diversification (Cont'd) Percentage of Total Portfolio Annualized Contractual Rent As of March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2021 2020 2019 2018 2017 2016 Health care 1.5% 1.5% 1.6% 1.6% 1.4% 1.5% Home furnishings 0.7 0.7 0.8
Slide 22: Geographic Diversification
Q1 2021 Supplemental Operating & Financial Data 22 Geographic Diversification (dollars in thousands) Total Portfolio Percentage of Approximate Annualized Contractual Total Portfolio Number of Percent Leasable Rent as of Annualized Location Properties Leased Square Feet March 31, 2021 Contractual Ren
Slide 23: Geographic Diversification (Cont'd)
Q1 2021 Supplemental Operating & Financial Data 23 Geographic Diversification (Cont'd) (dollars in thousands) Total Portfolio Percentage of Approximate Annualized Contractual Total Portfolio Number of Percent Leasable Rent as of Annualized Location Properties Leased Square Feet March 31, 2021 Contra
Slide 24: Property Type Composition
Q1 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 March 31, 2021 Percentage of Total Portfolio Annualized Contractual Rent as of
Slide 25: Q1 2021 Same Store Rental Revenue
Q1 2021 Supplemental Operating & Financial Data 25 Q1 2021 Same Store Rental Revenue Number of properties 6,127 Square footage 97,064,405 Q1 2021 $ 372,862 Q1 2020 $ 375,809 Decrease (in dollars) $ (2,947) Decrease (percent) (0.8) % Same Store Rental Revenue(1) (dollars in thousands) Top 3 Industrie
Slide 26: Same Store Rental Revenue (Cont'd)
Q1 2021 Supplemental Operating & Financial Data 26 Same Store Rental Revenue(1) (Cont'd) (dollars in thousands) Q1 2021 Three Months Ended Three Months Ended Net % Change by Property Type March 31, 2021 March 31, 2020 Change Property Type Retail $ 314,686 $ 317,656 $ (2,970) (0.9) % Industrial 39,83
Slide 27: Occupancy
Q1 2021 Supplemental Operating & Financial Data 27 By Property Occupied properties 6,531 Total properties 6,662 Occupancy 98.0 % By Square Footage Occupied square footage 112,403,095 Total square footage 114,241,813 Occupancy 98.4 % By Rental Revenue (Economic Occupancy) Quarterly cash rental revenu
Slide 28: Leasing Activity
Q1 2021 Supplemental Operating & Financial Data 28 Allocation Based on Number of Leases Leasing Activity (dollars in thousands) Q1 2021 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 6,705 $ 172 $ 4,272 $ 11,149 New cas
Slide 29: Lease Expirations
Q1 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 March 31, 2021. Leases on our mu
Slide 30: Earnings Guidance
Q1 2021 Supplemental Operating & Financial Data 30 Earnings Guidance We estimate FFO per share for 2021 of $3.26 to $3.34, inclusive of a $0.13 per share loss due to the early redemption of the 3.250% notes due 2022. We estimate AFFO per share for 2021 of $3.44 to $3.49, an increase of 1.5% to 2.9%
Slide 31: Analyst Coverage
Q1 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
Q1 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)
Q1 2021 Supplemental Operating & Financial Data 33 Glossary (Cont'd) Initial 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 expenses born