Realty Income Corporation · NYSE:O
Realty Income — Q2 2017 Earnings Presentation
27 slides from Realty Income's earnings presentation, Jul 26, 2017
Slide 1: Table Of Contents
Table Of Contents 2 Q2 2017 Supplemental Operating & Financial Data This Supplemental Operating & Financial Data should be read in connection with the company's second quarter 2017 earnings press release (included as Exhibit 99.1 of the company's Current Report on Form 8-K, filed on July 26, 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 Q2 2017 Supplemental Operating & Financial Data (unaudited) (unaudited) Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 REVENUE Rental $ 288,049 $ 260,056 $ 573,870 $ 516,857 Tenant reimbur
Slide 4: Funds From Operations (FFO)
Funds From Operations (FFO) (dollars in thousands, except per share amounts) 5 Q2 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 Q2 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 Q2 2017 Supplemental Operating & Financial Data June 30, 2017 December 31, 2016 ASSETS (unaudited) Real estate, at cost: Land $ 3,916,218 $ 3,752,204 Buildings and improvements 10,446,765 10,112,212 Total real estate, at
Slide 7: Debt Summary
Debt Summary (dollars in thousands) 8 Q2 2017 Supplemental Operating & Financial Data Principal Interest Weighted Balance as of Rate as of Average Years Maturity Date June 30, 2017 % of Debt June 30, 2017 until Maturity Credit Facility Credit Facility (1) June 30, 2019 $ 648,000 10.8% 2.12% 2.0 year
Slide 8: Debt Maturities
Debt Maturities (dollars in millions) 9 Q2 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 (1) 2017 $ - $ - $ 38.3 $ 175.0 $ 213.3 5.61% 2018 - 70.0 21.9 35
Slide 9: Capitalization & Financial Ratios
Capital Structure as of June 30, 2017 Capitalization & Financial Ratios (dollars in thousands , except per share amounts) 10 Q2 2017 Supplemental Operating & Financial Data Liquidity as of June 30, 2017 Cash on Hand $ 10,945 Availability under Credit Facility 1,352,000 $ 1,362,945 Capitalization as
Slide 10: Adjusted EBITDA & Coverage Ratios
Debt Service Coverage (2) Fixed Charge Coverage (3) Adjusted EBITDA & Coverage Ratios (dollars in thousands) 11 Q2 2017 Supplemental Operating & Financial Data Reconciliation of Net Income to Adjusted EBITDA (1) Three months ended June 30, 2017 Net income $ 81,259 Interest 63,679 Income taxes 441 De
Slide 11: Debt Covenants
Debt Covenants 12 Q2 2017 Supplemental Operating & Financial Data As of June 30, 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 July 2017 and March 2018. Development Pipeline (dollars in thousands) 15 Q2 2017 Supple
Slide 15: Top Tenants
Top 20 Tenants Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at June 30, 2017 include the following: Investment Grade Tenants (2) : Number of Properties 2,135 Percentage of Annualized Rents 46% Percentage of Leases with Rental Increases, Based on Revenue 71%
Slide 16: Industry Diversification
* Less than 0.1% Industry Diversification 17 Q2 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 Q2 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 June 30, 2017. Excludes rental revenue of $179 from sold properties. Geographic Diversification (dollars in thousands) 19 Q2 2017 Supplemental Operating & Financial Data Approximate Rental Revenue for Percentage of Number of Pe
Slide 19: Property Type Composition
Property Type Composition (dollars in thousands) 20 Q2 2017 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at June 30, 2017. Excludes rental revenue of $179 from sold properties. (2) Refer to footnote 2 on page 16 for our definition of investment grade t
Slide 20: Second Quarter 2017 Same Store Rental Revenue
Top 3 Industries Contributing to the Change Quarter ended Quarter ended Net % Change Industry June 30, 2017 June 30, 2016 Change by Industry Health and Fitness $ 20,546 $ 20,257 $ 289 29.2 % Automotive Tire Services 7,560 7,370 190 19.2 % Restaurants – Quick Service 10,986 10,826 160 16.2 % Second Q
Slide 21: Same Store Rental Revenue (Cont'd)
Same Store Rental Revenue (Cont’d)(dollars in thousands) 22 Q2 2017 Supplemental Operating & Financial Data Same Store Rental Revenue by Property Type Second Quarter 2017 Quarter ended Quarter ended Net % Change by Contribution by Property Type June 30, 2017 June 30, 2016 Change Property Type Proper
Slide 22: Occupancy
By Property Occupied Properties 4,952 Total Properties 5,028 Occupancy 98.5% By Square Footage Occupied Square Footage 84,562,815 Total Square Footage 85,343,147 Occupancy 99.1% By Rental Revenue (Economic Occupancy) Quarterly Rental Revenue $ 284,819,527 Quarterly Vacant Rental Revenue $ 2,635,583
Slide 23: Leasing Activity
Allocation Based on Number of Leases Leasing Activity (dollars in thousands) 24 Q2 2017 Supplemental Operating & Financial Data (1) Incremental yield reflects the yield generated by capital commitments made at the time of re-lease, and is calculated as the incremental cash rents divided by additiona
Slide 24: Expirations
25 * Less than 0.1% (1) This table sets forth the timing of remaining lease term expirations on our 4,925 net leased, single-tenant properties as of June 30, 2017 and their contribution to rental revenue for the quarter ended June 30, 2017. Excludes 28 multi-tenant properties and 76 vacant propertie
Slide 25: Earnings Guidance
26 We estimate FFO per share for 2017 of $2.96 to $3.01. We estimate AFFO per share for 2017 of $3.03 to $3.07, an increase of 5.2% to 6.6% 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 26: Analyst Coverage
27 Q2 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 27: Analyst Coverage
Analyst Coverage REALTY QB INCOME The Monty Dividend Company" uit Research are Miigan ‘inligandidcom us 23.8282 ‘wsam Harman ‘whaman@ovbaedcom (410 2982337 Bank of Aria Mel yeh Josh Dene Joshademeringbamlcom (646885 168 sn Metee Garman ‘maamanebiacon au78-6138 James Svan Jndhantbigcom i738 6139 onac