Realty Income Corporation · NYSE:O
Realty Income — Q4 2022 Earnings Presentation
31 slides from Realty Income's earnings presentation, Feb 21, 2023
Slide 1: Supplemental Operating & Financial Data Q4 2022
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q4 2022 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q4 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
Q4 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
Q4 2022 Supplemental Operating & Financial Data 4 Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 REVENUE Rental (including reimbursable) (1) $ 873,346 $ 679,000 $ 3,299,657 $ 2,064,958 Other 15,304 6,019 44,024 15,505 Total revenue 888,650 685,019 3,343,681 2,080,463 EX
Slide 5: FFO and Normalized FFO
Q4 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)
Q4 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
Q4 2022 Supplemental Operating & Financial Data 7 Consolidated Balance Sheets (in thousands, except per share and share count data) (unaudited) December 31, 2022 December 31, 2021 ASSETS Real estate held for investment, at cost: Land $ 12,948,835 $ 10,753,750 Buildings and improvements 29,707,751 25
Slide 8: Debt Summary
Q4 2022 Supplemental Operating & Financial Data 8 Debt Summary as of December 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 (2) June 26, 2026 $ 2,027,240 11.3
Slide 9: Senior Unsecured Notes and Bonds
Q4 2022 Supplemental Operating & Financial Data 9 Senior Unsecured Notes and Bonds (dollars in thousands) Maturity Dates Principal Amount (Currency Denomination) Principal Balance (USD) as of December 31, 2022 % of Debt Interest Rate 4.600% Notes due 2024 February 6, 2024 $ 499,999 $ 499,999 2.8 % 4
Slide 10: Debt Maturities
Q4 2022 Supplemental Operating & Financial Data 10 Debt Maturities as of December 31, 2022 (dollars in millions) Principal Due Credit Facility and Commercial Paper (1) Term Loan (2) Mortgages Payable Senior Unsecured Notes and Bonds (3) Total Weighted Average Expiring Interest Rate (4) 2023 $ 701.8
Slide 11: Capitalization & Financial Ratios
Q4 2022 Supplemental Operating & Financial Data 11 Capitalization & Financial Ratios (dollars in thousands, except as otherwise noted) Cash on Hand $ 171,102 Availability under Credit Facility 2,222,760 Less: Commercial Paper Borrowings (701,800) $ 1,692,062 (5) Liquidity calculation excludes borrow
Slide 12: Adjusted EBITDAre & Coverage Ratios
Q4 2022 Supplemental Operating & Financial Data 12 Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre and Pro Forma Adjusted EBITDAre (1) Three Months Ended December 31, 2022 Net income $ 228,336 Interest 131,290 Income taxes 9,381 Depreciati
Slide 13: Debt Covenants
Q4 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
Q4 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
Q4 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
Q4 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) 192 $ 154,700 $ 513,783 $ 668,483 (3) 23 % 100 % Develop
Slide 17: Our Top Clients
Q4 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 December 31, 2022, include the following: Our Investment Grade Clients (3) Number of Leases
Slide 18: Top 10 Industries
Q4 2022 Supplemental Operating & Financial Data 18 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Grocery stores 10.0% 10.2% 9.8% 7.9% 5.0% Convenience stores 8.6 9.1 11.9 12.3 12.6 Dollar stores 7
Slide 19: Industry Diversification
Q4 2022 Supplemental Operating & Financial Data 19 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 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 1.4 1.5 1.3 1.1 1.2 Automotive collision services 0.9 1.
Slide 20: Industry Diversification (continued)
Q4 2022 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Motor vehicle dealerships 1.4 1.3 1.6 1.6 1.8 Other manufacturing 0.5 0.5 0.4 0.6 0.7 Packaging 0.5 0.6 0.9 0.8 1.0 Pet
Slide 21: Geographic Diversification
Q4 2022 Supplemental Operating & Financial Data 21 Geographic Diversification Balanced presence in 50 states, Puerto Rico, the United Kingdom, Spain and Italy. Top Ten Regions Based on Total Portfolio Annualized Contractual Rent Texas 10.4% United Kingdom 9.5% California 5.8% Illinois 5.2% Florida 5
Slide 22: Property Type Composition
Q4 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 December 31, 2022 Percentage of Total Portfolio Annualized Contractual Rent as
Slide 23: Same Store Rental Revenue
Q4 2022 Supplemental Operating & Financial Data 23 Q4 2022 Same Store Rental Revenue Number of properties 9,615 Square footage 167,391,055 Q4 2022 $ 607,986 Q4 2021 $ 608,223 Decrease (in dollars) $ (237) Change (percent) — % 2022 Same Store Rental Revenue Number of properties 9,615 Square footage 1
Slide 24: Same Store Rental Revenue (Cont'd)
Q4 2022 Supplemental Operating & Financial Data 24 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Q4 2022 2022 Three Months Ended Net % Change by Year Ended Net % Change Property Type December 31, 2022 December 31, 2021 Change Property Type December 31, 2022 December 31, 2021 Change P
Slide 25: Occupancy
Q4 2022 Supplemental Operating & Financial Data 25 By Property Occupied properties 12,111 Total properties 12,237 Occupancy (1) 99.0 % By Square Footage Occupied square footage 234,593,723 Total square footage 236,845,409 Occupancy 99.0 % By Rental Revenue (Economic Occupancy) Quarterly cash rental
Slide 26: Leasing Activity
Q4 2022 Supplemental Operating & Financial Data 26 Leasing Activity (dollars in thousands) Q4 2022 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 36,301 $ 482 $ 931 $ 37,714 New cash rents* $ 37,144 $ 786 $ 1,227 $ 39,1
Slide 27: Lease Expirations
Q4 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 December 31, 2022. Leases on our
Slide 28: Earnings Guidance
Q4 2022 Supplemental Operating & Financial Data 28 Earnings Guidance Summarized below are approximate estimates of the key components of our 2023 earnings guidance: 2023 Guidance Net income per share $1.20 to $1.32 Real estate depreciation and impairments per share $2.84 Other adjustments per share
Slide 29: Analyst Coverage
Q4 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 BNP Paribas Exane Nate Crossett nate.crossett@exanebnpparibas.com (646) 7
Slide 30: Glossary
Q4 2022 Supplemental Operating & Financial Data 30 Glossary Adjusted EBITDAre. The National Association of Real Estate Investment Trusts (Nareit) established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent m
Slide 31: Glossary (Cont'd)
Q4 2022 Supplemental Operating & Financial Data 31 Glossary (Cont'd) Funds From Operations (FFO), a non-GAAP financial measure, consistent with the Nareit definition, is net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairm