Realty Income Corporation · NYSE:O
Realty Income — Q1 2019 Earnings Presentation
25 slides from Realty Income's earnings presentation, May 1, 2019
Slide 1: Supplemental Operating & Financial Data Q1 2019
Exhibit 99.2 an S&P 500 SUPPLEMENTAL OPERATING company S&P High Yield & FINANCIAL DATA Dividend Aristocrats® Q1 2019 index member
Slide 2: Table of Contents
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 Adjusted EBITDAre & Coverage Ratios 1
Slide 3: Corporate Overview
Corporate Overview Corporate Profile Senior Management Realty Income, The Monthly Dividend Company®, is an S&P 500 company Sumit Roy, President & Chief Executive Officer dedicated to providing stockholders with dependable monthly dividends Paul M. Meurer, Executive VP, Chief Financial Officer and Tr
Slide 4: Consolidated Statements of Income
Consolidated Statements Of Income (dollars in thousands, except per share amounts) (unaudited) Three months ended March 31, 2019 2018 REVENUE Rental (including reimbursable) (1) $ 354,037 $ 317,848 Other 328 447 Total revenue 354,365 318,295 EXPENSES Depreciation and amortization 137,517 131,103 Int
Slide 5: Funds From Operations (FFO)
Funds From Operations (FFO) (dollars 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. Also presented is information regarding distributions paid to common stockholde
Slide 6: Adjusted Funds From Operations (AFFO)
Adjusted Funds From Operations (AFFO) (dollars 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 AFFO. Also presented is information regarding distributions paid t
Slide 7: Consolidated Balance Sheets
Consolidated Balance Sheets (dollars in thousands , except per share amounts) March 31, 2019 December 31, 2018 ASSETS (unaudited) Real estate, at cost: Land $ 4,751,091 $ 4,682,660 Buildings and improvements 12,178,429 11,858,806 Total real estate, at cost 16,929,520 16,541,466 Less accumulated depr
Slide 8: Debt Summary
Debt Summary (dollars in thousands) Maturity Date as of Principal Balance as of Interest Rate as of Weighted Average March 31, 2019 March 31, 2019 % of Debt March 31, 2019 Years until Maturity Credit Facility Credit Facility (1) March 24, 2023 $ 838,000 11.9% 3.26% 4.0 years Unsecured Term Loans Ter
Slide 9: Debt Maturities
Debt Maturities as of March 31, 2019 (dollars in millions) Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loans Payable Notes and Bonds Total Interest Rate (1) 2019 $ — $ — $ 19.4 $ — $ 19.4 4.67% 2020 — 250.0 82.4 — 332.4 3.21% 2021 — — 67.0 250.0
Slide 10: Capitalization & Financial Ratios
Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Capitalization as of March 31, 2019 Capital Structure as of March 31, 2019 Principal Debt Balance Credit Facility $ 838,000 Unsecured Term Loans 500,000 Senior Unsecured Notes and Bonds 5,400,000 Mortgages Payable 297
Slide 11: Adjusted EBITDAre & Coverage Ratios
Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three months ended March 31, 2019 Debt Service & Fixed Charge Coverage (3) Net income $ 111,230 Interest 70,020 Income taxes 1,445 Depreciation and amortization 137,517 Provisions for imp
Slide 12: Debt Covenants
Debt Covenants As of March 31, 2019 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 investors to show our ability to incu
Slide 13: Investment Summary
Investment Summary (dollars in thousands) Cash Weighted Number of Leasable Capitalization Average Lease First Quarter 2019 Properties Investment Cash Rents Square Feet Rate (1) Term (Years) New Property Acquisitions 97 $ 508,573 $ 33,905 1,908,385 6.7% 17.0 Properties under Development (2) 8 10,919
Slide 14: Disposition Summary
Disposition Summary (dollars in thousands) Cash Capitalization First Quarter 2019 Number of Properties Original Investment Net Book Value Net Proceeds (2) Rate (1) Occupied 4 $ 7,309 $ 5,550 $ 11,542 9.5% Vacant 14 $ 22,654 $ 8,764 $ 9,813 — Total Real Estate Dispositions 18 $ 29,963 $ 14,314 $ 21,3
Slide 15: Development Pipeline
Development Pipeline (dollars in thousands) Investment Retail Number of Properties to Date Remaining Investment Total Commitment Percent Leased (2) New development (1) 4 $ 8,934 $ 13,617 $ 22,551 100% Development of existing properties 1 $ 1,926 $ 218 $ 2,144 100% 5 $ 10,860 $ 13,835 $ 24,695 Invest
Slide 16: Tenant Diversification
Tenant Diversification Top 20 Tenants Investment Grade Tenants(2): Our 20 largest tenants based on percentage of total portfolio annualized rental revenue at March 31, 2019 include the following: Number of Leases 3,129 Percentage of Annualized Rents 51% Investment Grade Weighted Average Annual Growt
Slide 17: Industry Diversification
Industry Diversification Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended March 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2019 2018 2017 2016 2015 2014 Aerospace 0.8% 0.8% 0.9% 1.0% 1.1% 1.2% Apparel stores 1.2 1.3 1.6 1.9 2.0 2.0 Automotive collision
Slide 18: Geographic Diversification
Geographic Diversification (dollars in thousands) Approximate Rental Revenue for Percentage of Number of Percent Leasable the Quarter Ended Rental State Properties Leased Square Feet March 31, 2019 (1) Revenue Alabama 168 98% 1,586,900 $ 5,955 1.8% Alaska 3 100 274,600 547 0.2 Arizona 117 100 1,811,
Slide 19: Property Type Composition
Property Type Composition (dollars in thousands) Percentage of Rental Percentage of Rental Revenue for Revenue for the Annualized Revenue Approximate Leasable the Quarter Ended Quarter Ended from Investment Property Type Number of Properties Square Feet March 31, 2019 (1) March 31, 2019 Grade Tenant
Slide 20: Same Store Rental Revenue
Same Store Rental Revenue (dollars in thousands) First Quarter 2019 Same Store Rental Revenue Top 3 Industries Contributing to the Change Number of Properties 4,891 Quarter ended Quarter ended Net % Change Square Footage 84,732,627 Industry March 31, 2019 March 31, 2018 Change by Industry Q1 2019 $
Slide 21: Occupancy
Occupancy By Property Change in Occupancy Occupied Properties 5,774 Vacant Properties at 12/31/18 80 Total Properties 5,876 Occupancy 98.3% Expiration Activity (1) + 108 Leasing Activity (2) - 71 By Square Footage Vacant Disposition Activity (3) - 15 Occupied Square Footage 93,916,004 Total Square F
Slide 22: Leasing Activity
Leasing Activity (dollars in thousands) Re-leased to New Tenant Allocation Based on Number of Leases Re-leased to Without After a Period Re-leasing Q1 2019 Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 16,454 $ 488 $ 39 $ 16,981 New Cash Rents* $ 17,360 $ 334 $ 78 $ 17,772 Recapture Rate
Slide 23: Lease Expirations
Lease Expirations (dollars in thousands) Our leases have a weighted average remaining lease term of approximately 9.2 years. Total Portfolio (1) Approx. % of Expiring Leases Leasable Rental Rental Year Retail Non-Retail Sq. Feet Revenue Revenue 2019 158 6 1,804,500 $ 8,265 2.4% 2020 221 13 3,955,500
Slide 24: Earnings Guidance
Earnings Guidance We estimate FFO per share for 2019 of $3.26 to $3.31. We estimate AFFO per share for 2019 of $3.28 to $3.33, an increase of 3% to 4% over 2018 AFFO per share of $3.19. Summarized below are approximate estimates of the key components of the company’s 2019 earnings guidance: 2019 Gui
Slide 25: Analyst Coverage
Analyst Coverage Equity Research Baird RJ Milligan rjmilligan@rwbaird.com (813) 273-8252 Bank of America Merrill Lynch Joshua Dennerlein joshua.dennerlein@baml.com (646) 855-1681 Kevin Speight kevin.speight@baml.com (646) 855-1379 BTIG Michael Gorman mgorman@btig.com (212) 738-6138 James Sullivan js