Realty Income Corporation · NYSE:O
Realty Income — Q4 2016 Earnings Presentation
27 slides from Realty Income's earnings presentation, Feb 22, 2017
Slide 1: Table of Contents
Corporate Overview 3 Financial Summary Consolidated Statements Of Income 4 Funds From Operations (FFO) 5 Adjusted Funds From Operations (AFFO) 6 Consolidated Balance Sheets 7 Debt Summary 8 Debt Maturities 9 Capitalization & Financial Ratios 10 EBITDA & Coverage Ratios 11 Debt Covenants 12 Transacti
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 Q4 2016 Supplemental Operating & Financial Data (unaudited) (unaudited) Three months ended Year ended December 31, December 31, 2016 2015 2016 2015 REVENUE Rental $ 275,224 $ 252,733 $ 1,057,413 $ 976,865 Tenant rei
Slide 4: Funds From Operations (FFO)
Funds From Operations (FFO) (dollars in thousands, except per share amounts) 5 Q4 2016 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 Q4 2016 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 Q4 2016 Supplemental Operating & Financial Data December 31, 2016 December 31, 2015 ASSETS (unaudited) Real estate, at cost: Land $ 3,752,204 $ 3,286,004 Buildings and improvements 10,112,212 9,010,778 Total real estate,
Slide 7: Debt Summary
Debt Summary (dollars in thousands) 8 Q4 2016 Supplemental Operating & Financial Data Principal Interest Weighted Balance as of Rate as of Average Years Maturity Date December 31, 2016 % of Debt December 31, 2016 until Maturity Credit Facility Credit Facility (1) June 30, 2019 $ 1,120,000 19.1% 1.67
Slide 8: Debt Maturities
Debt Maturities (dollars in millions) 9 Q4 2016 Supplemental Operating & Financial Data Debt Maturities Year of Credit Term Senior Unsecured Mortgages Weighted Average Maturity Facility Loan Notes and Bonds Payable Total Interest Rate (1) 2017 $ - $ - $ 175.0 $ 103.2 $ 278.2 5.41% 2018 - 70.0 350.0
Slide 9: Capitalization & Financial Ratios
Capital Structure as of December 31, 2016 Capitalization & Financial Ratios (dollars in thousands , except per share amounts) 10 Q4 2016 Supplemental Operating & Financial Data Liquidity as of December 31, 2016 Cash on Hand $ 9,420 Availability under Credit Facility 880,000 $ 889,420 Capitalization
Slide 10: EBITDA & Coverage Ratios
Debt Service Coverage (2) Fixed Charge Coverage (3) EBITDA & Coverage Ratios (dollars in thousands) 11 Q4 2016 Supplemental Operating & Financial Data Reconciliation of Net Income to EBITDA (1) Three months ended December 31, 2016 Net income $ 92,724 Interest 48,935 Income taxes 449 Depreciation and
Slide 11: Debt Covenants
Debt Covenants 12 Q4 2016 Supplemental Operating & Financial Data As of December 31, 2016 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,
Slide 12: Investment Summary
First Quarter 2016 Number of Properties Investment Cash Rents Leasable Square Feet Cash Capitalization Rate (1) Weighted Average Lease Term (Years) New Property Acquisitions (2) 80 $ 300,523 $ 19,708 877,997 6.6% 16.3 Properties under Development (3) 23 52,118 3,547 853,273 6.8% 13.1 Total Real Esta
Slide 13: Disposition Summary
First Quarter 2016 Number of Properties Original Investment Net Book Value Net Proceeds Cash Capitalization Rate (1) Occupied 2 $ 3,455 $ 2,535 $ 3,377 6.9% Vacant 9 12,511 6,148 7,661 - Total Real Estate Dispositions 11 $ 15,966 $ 8,683 $ 11,038 The unlevered internal rate of return on properties s
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 is between January 2017 and June 2017. Development Pipeline (dollars in thousands) 15 Q4 2016 Suppl
Slide 15: Tenant Diversification
Top 20 Tenants Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at December 31, 2016 include the following: Investment Grade Tenants (2) : Number of Properties 1,990 Percentage of Annualized Rents 47% Percentage of Leases with Rental Increases, Based on Revenue
Slide 16: Industry Diversification
* Less than 0.1% Industry Diversification 17 Q4 2016 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 Q4 2016 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 December 31, 2016. Excludes rental revenue of $323 from sold properties. EXPIRATIONS (dollars in thousands) Geographic Diversification (dollars in thousands) 19 Q4 2016 Supplemental Operating & Financial Data Approximate Rental
Slide 19: Property Type Composition
Property Type Composition (dollars in thousands) 20 Q4 2016 Supplemental Operating & Financial Data (1) Includes rental revenue for all properties owned at December 31, 2016. Excludes rental revenue of $323 from sold properties. (2) Refer to footnote 2 on page 16 for our definition of investment gra
Slide 20: Same Store Rental Revenue
Top 3 Industries Contributing to the Change Quarter ended Quarter ended Net % Change Industry December 31, 2016 December 31, 2015 Change by Industry Convenience Stores $ 22,757 $ 22,241 $ 516 2.3 % Grocery Stores 7,578 7,254 324 4.5 % Health and Fitness 14,951 14,738 213 1.4 % Fourth Quarter 2016 Sa
Slide 21: Same Store Rental Revenue (Cont'd)
Same Store Rental Revenue (Cont’d)(dollars in thousands) 22 Q4 2016 Supplemental Operating & Financial Data Same Store Rental Revenue by Property Type Fourth Quarter 2016 Quarter ended Quarter ended Net % Change by Contribution by Property Type December 31, 2016 December 31, 2015 Change Property Typ
Slide 22: Occupancy
By Property Occupied Properties 4,860 Total Properties 4,944 Occupancy 98.3% By Square Footage Occupied Square Footage 82,121,833 Total Square Footage 83,045,677 Occupancy 98.9% By Rental Revenue (Economic Occupancy) Quarterly Rental Revenue $ 269,361,645 Quarterly Vacant Rental Revenue $ 3,078,938
Slide 23: Leasing Activity
Allocation Based on Number of Leases Leasing Activity (dollars in thousands) 24 Q4 2016 Supplemental Operating & Financial Data Re-leased to New Tenant Q4 2016 Re-leased to Without After a Period Re-leasing Totals Same Tenant Vacancy of Vacancy Prior Cash Rents $ 9,560 $ 941 $ 511 $ 11,012 New Cash
Slide 24: Expirations
25 * Less than 0.1% (1) This table sets forth the timing of remaining lease term expirations on our 4,836 net leased, single-tenant properties as of December 31, 2016 and their contribution to rental revenue for the quarter ended December 31, 2016. Excludes 24 multi-tenant properties and 84 vacant p
Slide 25: Earnings Guidance
26 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 26: Analyst Coverage
27 Q4 2016 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
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