Realty Income Corporation · NYSE:O
Realty Income — Q1 2024 Earnings Presentation
32 slides from Realty Income's earnings presentation, May 6, 2024
Slide 1: Supplemental Operating & Financial Data Q1 2024
SUPPLEMENTAL OPERATING & FINANCIAL DATA Q1 2024 An S&P 500 company S&P 500 Dividend Aristocrats® index member Exhibit 99.2
Slide 2: Table of Contents
Q1 2024 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
Q1 2024 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
Q1 2024 Supplemental Operating & Financial Data 4 Three months ended March 31, 2024 2023 REVENUE Rental (including reimbursable) (1) $ 1,208,169 $ 925,289 Other 52,316 19,110 Total revenue 1,260,485 944,399 EXPENSES Depreciation and amortization 581,064 451,477 Interest 240,614 154,132 Property (inc
Slide 5: FFO and Normalized FFO
Q1 2024 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)
Q1 2024 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
Q1 2024 Supplemental Operating & Financial Data 7 Consolidated Balance Sheets (in thousands, except per share amounts) (unaudited) March 31, 2024 December 31, 2023 ASSETS Real estate held for investment, at cost: Land $ 16,787,731 $ 14,929,310 Buildings and improvements 39,674,812 34,657,094 Total r
Slide 8: Debt Summary
Q1 2024 Supplemental Operating & Financial Data 8 Debt Summary as of March 31, 2024 (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 $ 806,496 3.2 % 5.95 % 2.2 y
Slide 9: Debt Maturities
Q1 2024 Supplemental Operating & Financial Data 9 Debt Maturities as of March 31, 2024 (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 Tota
Slide 10: Debt Summary by Currency
Q1 2024 Supplemental Operating & Financial Data 10 Debt Summary by Currency as of March 31, 2024 (in millions) Credit Facility and Commercial Paper Unsecured Term Loans Mortgages Payable Senior Unsecured Notes and Bonds Proportionate Share of Unconsolidated Entities Debt Total Weighted Average Inter
Slide 11: Capitalization & Financial Ratios
Q1 2024 Supplemental Operating & Financial Data 11 Capitalization & Financial Ratios (dollars in thousands, except as otherwise noted) Cash on Hand $ 680,159 Availability under Credit Facility 3,443,504 Unsettled ATM Forwards 62,942 Less: Commercial Paper Borrowings (216,020) $ 3,970,585 (4) As appl
Slide 12: Adjusted EBITDAre & Coverage Ratios
Q1 2024 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 March 31, 2024 Net income $ 133,899 Interest 240,614 Income taxes 15,502 Depreciation
Slide 13: Debt Covenants
Q1 2024 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
Q1 2024 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) Q1 2024 Acquisitions - U.S. real estate 5 $
Slide 15: Disposition Summary
Q1 2024 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 2024 Occupied 3 $ 12,077 $ 13,935 7.0 % Vacant 43 66,973 81,689 — Total real estate dispositions 46 $ 79,050 $ 95,6
Slide 16: Development Pipeline
Q1 2024 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) 96 $ 344,017 $ 236,231 $ 580,247 (3) 59 % 100 % Developm
Slide 17: Our Top Clients
Q1 2024 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 March 31, 2024, include the following: Our Investment Grade Clients (3) Number of Leases 6,809 Percen
Slide 18: Top 10 Industries
Q1 2024 Supplemental Operating & Financial Data 18 (1)Top 10 Industries Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2024 2023 2022 2021 2020 Grocery 10.1% 11.4% 10.0% 10.2% 9.8% Convenience Stores 9.5 10.2 8.6 9.1 11.9 Dollar Stores 6.5 7.1
Slide 19: Industry Diversification
Q1 2024 Supplemental Operating & Financial Data 19 Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2024 2023 2022 2021 2020 United States Aerospace 0.3% 0.3% 0.4% 0.4% 0.6% Apparel stores 1.6 1.4 1.4 1.5 1.3 Automotive collision services 1.1 1.
Slide 20: Industry Diversification (continued)
Q1 2024 Supplemental Operating & Financial Data 20 Percentage of Total Portfolio Annualized Contractual Rent As of Mar 31, Dec 31, Dec 31, Dec 31, Dec 31, 2024 2023 2022 2021 2020 Motor vehicle dealerships 1.7 1.6 1.4 1.3 1.6 Other manufacturing 0.8 0.5 0.5 0.5 0.4 Packaging 0.7 0.6 0.5 0.6 0.9 Pet
Slide 21: Geographic Diversification
Q1 2024 Supplemental Operating & Financial Data 21 Geographic Diversification Balanced presence in all 50 U.S. states, the U.K., and six other countries in Europe Top Ten Regions Based on Total Portfolio Annualized Contractual Rent United Kingdom 11.1% Texas 10.5% Florida 5.2% California 5.0% Illino
Slide 22: Property Type Composition
Q1 2024 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 March 31, 2024 Percentage of Total Portfolio Annualized Contractual Rent as of
Slide 23: Q1 2024 Same Store Rental Revenue
Q1 2024 Supplemental Operating & Financial Data 23 Q1 2024 Same Store Rental Revenue Number of properties 11,716 Square footage (2) 217,232,058 Q1 2024 $ 843,453 Q1 2023 $ 837,053 Change (in dollars) $ 6,400 Change (percent) 0.8 % Same Store Rental Revenue (1) (dollars in thousands) Top 3 Industries
Slide 24: Same Store Rental Revenue (Cont'd)
Q1 2024 Supplemental Operating & Financial Data 24 Same Store Rental Revenue (1) (Cont'd) (dollars in thousands) Three months ended March 31, Property Type 2024 2023 $ Change % Change Retail $ 691,530 $ 688,923 $ 2,607 0.4 % Industrial 111,079 107,937 3,142 2.9 % Gaming 25,437 25,000 437 1.7 % Other
Slide 25: Occupancy
Q1 2024 Supplemental Operating & Financial Data 25 By Property Occupied properties(1) 15,251 Total properties(1) 15,468 Occupancy 98.6 % By Square Footage Occupied square footage(1) 330,516,635 Total square footage(1) 334,141,813 Occupancy 98.9 % By Rental Revenue (Economic Occupancy) Quarterly cash
Slide 26: Leasing Activity
Q1 2024 Supplemental Operating & Financial Data 26 Leasing Activity (1) (dollars in thousands) Q1 2024 Re-leased to New Client Re-leased to Without After a Period Re-leasing Same Client Vacancy of Vacancy Totals Prior cash rents $ 54,452 $ 1,742 $ 720 $ 56,914 New cash rents* $ 57,076 $ 1,347 $ 944
Slide 27: Lease Expirations
Q1 2024 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 March 31, 2024. Leases on our mul
Slide 28: Earnings Guidance
Q1 2024 Supplemental Operating & Financial Data 28 Earnings Guidance Summarized below are approximate estimates of the key components of our 2024 earnings guidance: Prior 2024 Guidance (1) Revised 2024 Guidance Net income per share (2) $1.22 - $1.34 $1.23 - $1.35 Real estate depreciation and impairm
Slide 29: Analyst Coverage
Q1 2024 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
Q1 2024 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)
Q1 2024 Supplemental Operating & Financial Data 31 Glossary (Cont'd) Funds From Operations (FFO) (cont'd) In addition, FFO and AFFO should not be considered measures of liquidity, of our ability to make cash distributions, or of our ability to pay interest payments. We consider FFO to be an appropri
Slide 32: Glossary (Cont'd)
Q1 2024 Supplemental Operating & Financial Data 32 Glossary (Cont'd) Total Annualized Contractual Rent of our acquisitions and properties under development is the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables, as of the balance sheet date, multiplied by