Realty Income Corporation · NYSE:O
Realty Income — Q2 2022 Earnings Presentation
31 slides from Realty Income's earnings presentation, Aug 3, 2022
Slide 1: Supplemental Operating & Financial Data Q2 2022
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q2 2022 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q2 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
Q2 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
Q2 2022 Supplemental Operating & Financial Data 4 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 REVENUE Rental (including reimbursable) (1) $ 800,800 $ 460,256 $ 1,600,365 $ 899,621 Other (2) 9,619 3,042 17,397 5,931 Total revenue 810,419 463,298 1,617,762 905,552 EXPENSE
Slide 5: FFO and Normalized FFO
Q2 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)
Q2 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
Q2 2022 Supplemental Operating & Financial Data 7 Consolidated Balance Sheets (in thousands, except per share and share count data) (unaudited) June 30, 2022 December 31, 2021 ASSETS Real estate held for investment, at cost: Land $ 11,605,933 $ 10,753,750 Buildings and improvements 26,101,185 25,155
Slide 8: Debt Summary
Q2 2022 Supplemental Operating & Financial Data 8 Debt Summary as of June 30, 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 June 26, 2026 $ 219,121 1.4 % 2.18 % 4.
Slide 9: Senior Unsecured Notes and Bonds
Q2 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 June 30, 2022 % of Debt Interest Rate 4.600% Notes due 2024 (1) February 6, 2024 $ 499,999 $ 499,999 3.2
Slide 10: Debt Maturities
Q2 2022 Supplemental Operating & Financial Data 10 Debt Maturities(1) as of June 30, 2022 (dollars in millions) Year of Maturity Credit Facility and Commercial Paper (2) Term Loan Mortgages Payable Senior Unsecured Notes and Bonds Total Weighted Average Expiring Interest Rate (3) 2022 $ 930.0 $ — $
Slide 11: Capitalization & Financial Ratios
Q2 2022 Supplemental Operating & Financial Data 11 Capitalization & Financial Ratios (dollars in thousands, except as otherwise noted) Cash on Hand $ 172,849 Availability under Credit Facility (4) 4,030,879 Less: Commercial Paper Borrowings (950,000) $ 3,253,728 (3) Liquidity calculation excludes bo
Slide 12: Adjusted EBITDAre & Coverage Ratios
Q2 2022 Supplemental Operating & Financial Data 12 Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three Months Ended June 30, 2022 Net income $ 223,822 Interest 110,121 Gain on extinguishment of debt (127) Income taxes 14,658 Deprecia
Slide 13: Debt Covenants
Q2 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
Q2 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
Q2 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
Q2 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) 177 $ 84,215 $ 495,170 $ 579,386 (3) 15 % 100 % Developm
Slide 17: Our Top Clients
Q2 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 June 30, 2022, include the following: Our Investment Grade Clients (3) Number of Leases 5,56
Slide 18: Top 10 Industries
Q2 2022 Supplemental Operating & Financial Data 18 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Jun 30, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Grocery stores 10.5% 10.2% 9.8% 7.9% 5.0% Convenience stores 9.2 9.1 11.9 12.3 12.6 Dollar stores 7
Slide 19: Industry Diversification
Q2 2022 Supplemental Operating & Financial Data 19 Percentage of Total Portfolio Annualized Contractual Rent As of Jun 30, 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)
Q2 2022 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of Jun 30, Dec 31, Dec 31, Dec 31, Dec 31, 2022 2021 2020 2019 2018 Machinery 0.2 0.1 0.1 0.1 0.1 Motor vehicle dealerships 1.3 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
Q2 2022 Supplemental Operating & Financial Data 21 Geographic Diversification Balanced presence in 50 states, Puerto Rico, the United Kingdom and Spain. Top Ten Regions Based on Total Portfolio Annualized Contractual Rent Texas 10.7% U.K. 9.1% California 6.3% Illinois 5.3% Florida 5.3% Ohio 4.5% Geo
Slide 22: Property Type Composition
Q2 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 June 30, 2022 Percentage of Total Portfolio Annualized Contractual Rent as of
Slide 23: Same Store Rental Revenue
Q2 2022 Supplemental Operating & Financial Data 23 Q2 2022 Same Store Rental Revenue Number of properties 9,686 Square footage 168,881,270 Q2 2022 $ 615,633 Q2 2021 $ 603,572 Increase (in dollars) $ 12,061 Increase (percent) 2.0 % YTD 2022 Same Store Rental Revenue Number of properties 9,686 Square
Slide 24: Same Store Rental Revenue (Cont'd)
Q2 2022 Supplemental Operating & Financial Data 24 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Q2 2022 YTD 2022 Three Months Ended Net % Change by Six Months Ended Net %Change Property Type June 30, 2022 June 30, 2021 Change Property Type June 30, 2022 June 30, 2021 Change Property
Slide 25: Occupancy
Q2 2022 Supplemental Operating & Financial Data 25 By Property Occupied properties 11,295 Total properties 11,427 Occupancy (1) 98.9 % By Square Footage Occupied square footage 216,485,426 Total square footage 218,485,083 Occupancy 99.1 % By Rental Revenue (Economic Occupancy) Quarterly cash rental
Slide 26: Leasing Activity
Q2 2022 Supplemental Operating & Financial Data 26 Leasing Activity (dollars in thousands) Q2 2022 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 32,832 $ 469 $ 327 $ 33,628 New cash rents* $ 34,167 $ 685 $ 662 $ 35,514
Slide 27: Lease Expirations
Q2 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 June 30, 2022. Leases on our mult
Slide 28: Earnings Guidance
Q2 2022 Supplemental Operating & Financial Data 28 Earnings Guidance Summarized below are approximate estimates of the key components of our 2022 earnings guidance: Prior 2022 Guidance Revised 2022 Guidance Net income per share $1.08 to $1.25 $1.14 to $1.27 Real estate depreciation and impairments p
Slide 29: Analyst Coverage
Q2 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 Connor Siversky connor.siversky@berenberg-us.com (646) 949-9037
Slide 30: Glossary
Q2 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)
Q2 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