Realty Income Corporation · NYSE:O
Realty Income — Q1 2017 Earnings Presentation
26 slides from Realty Income's earnings presentation, Apr 25, 2017
Slide 1: Table Of Contents
Table Of Contents 2 Q1 2017 Supplemental Operating & Financial Data This Supplemental Operating & Financial Data should be read in connection with the company's first quarter 2017 earnings press release (included as Exhibit 99.1 of the company's Current Report on Form 8-K, filed on April 25, 2017) a
Slide 2: Corporate Overview
Senior Management John P. Case, Chief Executive Officer Sumit Roy, President and Chief Operating Officer Paul M. Meurer, Executive VP, Chief Financial Officer and Treasurer Michael R. Pfeiffer, Executive VP, General Counsel and Secretary Neil M. Abraham, Executive VP, Chief Investment Officer Credit
Slide 3: Consolidated Statements Of Income
Consolidated Statements Of Income (dollars in thousands, except per share amounts) 4 Q1 2017 Supplemental Operating & Financial Data (unaudited) Three months ended March 31, 2017 2016 REVENUE Rental $ 285,821 $ 256,801 Tenant reimbursements 11,229 9,105 Other 975 1,210 Total revenue 298,025 267,116
Slide 4: Funds From Operations (FFO)
Funds From Operations (FFO) (dollars in thousands, except per share amounts) 5 Q1 2017 Supplemental Operating & Financial Data 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
Slide 5: Adjusted Funds From Operations (AFFO)
Adjusted Funds From Operations (AFFO) (dollars in thousands, except per share amounts) 6 Q1 2017 Supplemental Operating & Financial 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 AFFO. Also prese
Slide 6: Consolidated Balance Sheets
Consolidated Balance Sheets (dollars in thousands , except per share amounts) 7 Q1 2017 Supplemental Operating & Financial Data March 31, 2017 December 31, 2016 ASSETS (unaudited) Real estate, at cost: Land $ 3,832,452 $ 3,752,204 Buildings and improvements 10,327,309 10,112,212 Total real estate, a
Slide 7: Debt Summary
Debt Summary (dollars in thousands) 8 Q1 2017 Supplemental Operating & Financial Data Principal Interest Weighted Balance as of Rate as of Average Years Maturity Date March 31, 2017 % of Debt March 31, 2017 until Maturity Credit Facility Credit Facility (1) June 30, 2019 $ - - - 2.2 years Unsecured
Slide 8: Debt Maturities
Debt Maturities (dollars in millions) 9 Q1 2017 Supplemental Operating & Financial Data Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loan Payable Notes and Bonds Total Interest Rate 2017 $ - $ - $ 101.1 $ 175.0 $ 276.1 5.42% 2018 - 70.0 21.9 350.0
Slide 9: Capitalization & Financial Ratios
Capital Structure as of March 31, 2017 Capitalization & Financial Ratios (dollars in thousands , except per share amounts) 10 Q1 2017 Supplemental Operating & Financial Data Liquidity as of March 31, 2017 Cash on Hand $ 27,598 Availability under Credit Facility (3) 2,000,000 $ 2,027,598 (3) As of Ap
Slide 10: EBITDA & Coverage Ratios
Debt Service Coverage (2) Fixed Charge Coverage (4) EBITDA & Coverage Ratios (dollars in thousands) 11 Q1 2017 Supplemental Operating & Financial Data Reconciliation of Net Income to EBITDA (1) Three months ended March 31, 2017 Net income $ 89,035 Interest 59,305 Income taxes 1,047 Depreciation and
Slide 11: Debt Covenants
Debt Covenants 12 Q1 2017 Supplemental Operating & Financial Data As of March 31, 2017 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
Slide 12: Investment Summary
First Quarter 2017 Number of Properties Investment Cash Rents Leasable Square Feet Cash Capitalization Rate (1) Weighted Average Lease Term (Years) New Property Acquisitions (2) 51 $ 365,754 $ 22,190 1,026,428 6.1% 16.5 Properties under Development (3) 9 4,982 382 435,298 7.7% 11.3 Total Real Estate
Slide 13: Disposition Summary
First Quarter 2017 Number of Properties Original Investment Net Book Value Net Proceeds Cash Capitalization Rate (1) Occupied 2 $ 12,004 $ 9,264 $ 14,831 8.3% Vacant 12 18,718 11,329 16,401 - Total Real Estate Dispositions 14 $ 30,722 $ 20,593 $ 31,232 The unlevered internal rate of return on proper
Slide 14: Development Pipeline
(1) Includes build-to-suit developments and forward take-out commitments on development properties with leases in place. (2) Estimated rental revenue commencement dates on properties under development are between April 2017 and October 2017. Development Pipeline (dollars in thousands) 15 Q1 2017 Sup
Slide 15: Top Tenants
Top 20 Tenants Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at March 31, 2017 include the following: Investment Grade Tenants (2) : Number of Properties 1,991 Percentage of Annualized Rents 45% Percentage of Leases with Rental Increases, Based on Revenue 74
Slide 16: Industry Diversification
* Less than 0.1% Industry Diversification 17 Q1 2017 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at the end of each period presented, including revenue from properties reclassified as discontinued operations. Percentage of Rental Revenue (1) For the Q
Slide 17: Industry Diversification (Cont'd)
Industry Diversification (Cont’d) 18 Q1 2017 Supplemental Operating & Financial Data * Less than 0.1% (1) Includes rental revenue for all properties owned at the end of each period presented, including revenue from properties reclassified as discontinued operations. Percentage of Rental Revenue (1)
Slide 18: Geographic Diversification
* Less than 0.1% (1) Includes rental revenue for all properties owned at March 31, 2017. Excludes rental revenue of $365 from sold properties. EXPIRATIONS (dollars in thousands) Geographic Diversification (dollars in thousands) 19 Q1 2017 Supplemental Operating & Financial Data Approximate Rental Re
Slide 19: Property Type Composition
Property Type Composition (dollars in thousands) 20 Q1 2017 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at March 31, 2017. Excludes rental revenue of $365 from sold properties. (2) Refer to footnote 2 on page 16 for our definition of investment grade
Slide 20: Same Store Rental Revenue
Top 3 Industries Contributing to the Change Quarter ended Quarter ended Net % Change Industry March 31, 2017 March 31, 2016 Change by Industry Motor Vehicle Dealerships $ 5,321 $ 4,124 $ 1,197 29.0 % Sporting Goods 3,165 2,687 478 17.8 % Child Care 5,395 4,939 456 9.2 % First Quarter 2017 Same Store
Slide 21: Occupancy
By Property Occupied Properties 4,897 Total Properties 4,980 Occupancy 98.3% By Square Footage Occupied Square Footage 83,244,306 Total Square Footage 84,084,287 Occupancy 99.0% By Rental Revenue (Economic Occupancy) Quarterly Rental Revenue $ 278,200,923 Quarterly Vacant Rental Revenue $ 2,781,441
Slide 22: Leasing Activity
Allocation Based on Number of Leases Leasing Activity (dollars in thousands) 23 Q1 2017 Supplemental Operating & Financial Data Q1 2017 Re-leased to New Tenant Re-leased to Without After a Period Re-leasing Totals Same Tenant Vacancy of Vacancy Prior Cash Rents $ 7,165 $ - $ 565 $ 7,730 New Cash Ren
Slide 23: Expirations
24 * Less than 0.1% (1) This table sets forth the timing of remaining lease term expirations on our 4,873 net leased, single-tenant properties as of March 31, 2017 and their contribution to rental revenue for the quarter ended March 31, 2017. Excludes 24 multi-tenant properties and 83 vacant propert
Slide 24: Earnings Guidance
25 We estimate FFO per share for 2017 of $3.00 to $3.06. We estimate AFFO per share for 2017 of $3.00 to $3.06, an increase of 4.2% to 6.3% over 2016 AFFO per share of $2.88. Summarized below are approximate estimates of the key components of the company’s 2017 earnings guidance: Earnings Guidance Q
Slide 25: Analyst Coverage
26 Q1 2017 Supplemental Operating & Financial Data Realty Income Corporation is covered by the analysts at the firms listed above. This list may not be complete and is subject to change. Please note that any opinions, estimates or forecasts regarding Realty Income Corporation's performance made by t
Slide 26: Analyst Coverage
Analyst Coverage REALTY (INCOME The Monty Dividend Company" aul Research ee Moan inlioan@ovbsedcom qanz-0s2 “Wan Harman ‘shamasBretaedom (310 298.2357 ak of Amerie Mil yc Josh Demers Jpohademero gta com (46085 1681 ic Mtoe! Gorman ‘moomanghincon 212 738.6138 Jame Svan ‘ihan@bsacom 212 738.6139 Capt