Realty Income Corporation · NYSE:O
Realty Income — Q4 2023 Earnings Presentation
31 slides from Realty Income's earnings presentation, Feb 20, 2024
Slide 1: Supplemental Operating & Financial Data Q4 2023
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q4 2023 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q4 2023 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 2023 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 2023 Supplemental Operating & Financial Data 4 Three months ended December 31, Years ended December 31, 2023 2022 2023 2022 REVENUE Rental (including reimbursable) (1) $ 1,028,710 $ 873,346 $ 3,958,150 $ 3,299,657 Other 47,575 15,304 120,843 44,024 Total revenue 1,076,285 888,650 4,078,993 3,343,
Slide 5: FFO and Normalized FFO
Q4 2023 Supplemental Operating & Financial Data 5 FFO and Normalized FFO (1) (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 and Normalized FFO. Also presented is i
Slide 6: Adjusted Funds From Operations (AFFO)
Q4 2023 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 2023 Supplemental Operating & Financial Data 7 Consolidated Balance Sheets (in thousands, except per share amounts) (unaudited) December 31, 2023 December 31, 2022 ASSETS Real estate held for investment, at cost: Land $ 14,929,310 $ 12,948,835 Buildings and improvements 34,657,094 29,707,751 Tota
Slide 8: Debt Summary
Q4 2023 Supplemental Operating & Financial Data 8 Debt Summary as of December 31, 2023 (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 2026 $ — — % — % 2.5 years Com
Slide 9: Senior Unsecured Notes and Bonds
Q4 2023 Supplemental Operating & Financial Data 9 Senior Unsecured Notes and Bonds as of December 31, 2023 (dollars in thousands) Maturity Dates Principal Amount (Currency Denomination) (1) Principal Balance (USD) as of December 31, 2023 (1) % of Debt Interest Rate 4.600% Notes due 2024 February 6,
Slide 10: Debt Maturities
Q4 2023 Supplemental Operating & Financial Data 10 Debt Maturities as of December 31, 2023 (dollars in millions) Principal Due Credit Facility and Commercial Paper (1) Unsecured Term Loans (2) Mortgages Payable Senior Unsecured Notes and Bonds (3) Proportionate Share of Unconsolidated Entities Debt
Slide 11: Capitalization & Financial Ratios
Q4 2023 Supplemental Operating & Financial Data 11 Capitalization & Financial Ratios (dollars in thousands, except as otherwise noted) Cash on Hand $ 232,923 Availability under Credit Facility 4,250,000 Unsettled ATM Forwards 337,836 Less: Commercial Paper Borrowings (764,390) $ 4,056,369 (5) As app
Slide 12: Adjusted EBITDAre & Coverage Ratios
Q4 2023 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, 2023 Net income $ 219,762 Interest 208,313 Income taxes 15,803 Depreciat
Slide 13: Debt Covenants
Q4 2023 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 2023 Supplemental Operating & Financial Data 14 Investment Summary Number of Properties Investment ($ in millions) Cash Income ($ in millions) (1) Leasable Square Feet (in thousands) Initial Weighted Average Cash Yield (2) Weighted Average Term (Years) Q4 2023 Acquisitions - U.S. real estate (3)
Slide 15: Disposition Summary
Q4 2023 Supplemental Operating & Financial Data 15 Disposition Summary (dollars in thousands) Number of Properties (1) Net Book Value Net Sales Proceeds (1) Net Cash Capitalization Rate (2) Q1 2023 Occupied — $ — $ — — % Vacant 26 24,316 28,595 — Total real estate dispositions 26 $ 24,316 $ 28,595 T
Slide 16: Development Pipeline
Q4 2023 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) 169 $ 356,941 $ 414,557 $ 771,498 (3) 46 % 100 % Develop
Slide 17: Client Diversification
Q4 2023 Supplemental Operating & Financial Data 17 Our Top 20 Clients Our 20 largest clients based on percentage of total annualized contractual rent, which does not give effect to deferred rent, at December 31, 2023, include the following: Our Investment Grade Clients (3) Number of Leases 6,476 Per
Slide 18: Top 10 Industries
Q4 2023 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, 2023 2022 2021 2020 2019 Grocery 11.4% 10.0% 10.2% 9.8% 7.9% Convenience Stores 10.2 8.6 9.1 11.9 12.3 Dollar Stores 7.1 7.4
Slide 19: Industry Diversification
Q4 2023 Supplemental Operating & Financial Data 19 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2023 2022 2021 2020 2019 United States Aerospace 0.3% 0.4% 0.4% 0.6% 0.8% Apparel stores 1.4 1.4 1.5 1.3 1.1 Automotive collision services 1.1 0.
Slide 20: Industry Diversification (continued)
Q4 2023 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2023 2022 2021 2020 2019 Motor vehicle dealerships 1.6 1.4 1.3 1.6 1.6 Other manufacturing 0.5 0.5 0.5 0.4 0.6 Packaging 0.6 0.5 0.6 0.9 0.8 Pet
Slide 21: Geographic Diversification
Q4 2023 Supplemental Operating & Financial Data 21 Geographic Diversification Balanced presence in 50 states, Puerto Rico, the United Kingdom, France, Germany, Ireland, Italy, Portugal, and Spain Top Ten Regions Based on Total Portfolio Annualized Contractual Rent United Kingdom 12.6% Texas 9.6% Cal
Slide 22: Property Type Composition
Q4 2023 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, 2023 Percentage of Total Portfolio Annualized Contractual Rent as
Slide 23: Same Store Rental Revenue
Q4 2023 Supplemental Operating & Financial Data 23 Q4 2023 Same Store Rental Revenue Number of properties 10,498 Square footage 188,609,650 Q4 2023 $ 713,541 Q4 2022 $ 695,391 Change (in dollars) $ 18,150 Change (percent) 2.6 % YTD 2023 Same Store Rental Revenue Number of properties 10,498 Square fo
Slide 24: Same Store Rental Revenue (Cont'd)
Q4 2023 Supplemental Operating & Financial Data 24 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Three months ended December 31, Years ended December 31, Property Type 2023 2022 $ Change % Change 2023 2022 $ Change % Change Retail $ 601,502 $ 585,515 $ 15,987 2.7 % $ 2,407,041 $ 2,36
Slide 25: Occupancy
Q4 2023 Supplemental Operating & Financial Data 25 By Property Occupied properties 13,230 Total properties 13,423 Occupancy 98.6 % By Square Footage Occupied square footage 268,909,681 Total square footage 271,961,762 Occupancy 98.9 % By Rental Revenue (Economic Occupancy) Quarterly cash rental reve
Slide 26: Leasing Activity
Q4 2023 Supplemental Operating & Financial Data 26 Leasing Activity（1） (dollars in thousands) Q4 2023 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 45,975 $ 3,906 $ 938 $ 50,819 New cash rents* $ 48,740 $ 3,017 $ 912 $
Slide 27: Lease Expirations
Q4 2023 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, 2023. Leases on our
Slide 28: Earnings Guidance
Q4 2023 Supplemental Operating & Financial Data 28 Earnings Guidance Summarized below are approximate estimates of the key components of our 2024 earnings guidance, which gives effect to the merger between us and Spirit, which closed on January 23, 2024: 2024 Guidance Net income per share (1) $1.22
Slide 29: Analyst Coverage
Q4 2023 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 BMO Capital Markets Eric Borden eric.borden@bmo.com (347) 213-9706 BNP Pa
Slide 30: Glossary
Q4 2023 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 2023 Supplemental Operating & Financial Data 31 Glossary (Cont'd) Funds From Operations (FFO) (cont'd) We consider FFO to be an appropriate supplemental measure of a REIT’s operating performance as it is based on a net income analysis of property portfolio performance that adds back items such as