Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - REALTY INCOME CORP | realtyincomeexhibit991.htm |
| 8-K - 8-K - REALTY INCOME CORP | o-20200803.htm |
Exhibit 99.2 An S&P 500 SUPPLEMENTAL OPERATING company S&P 500 & FINANCIAL DATA Dividend Aristocrats® Q2 2020 index member
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 11 Debt Covenants 12 Transaction Summary Investment Summary 13 Disposition Summary 14 Development Pipeline 15 Real Estate Portfolio Summary Tenant Diversification 16 Top 10 Industries 17 Industry Diversification 18 Geographic Diversification 20 Property Type Composition 22 Same Store Rental Revenue 23 Leasing Data Occupancy 25 Leasing Activity 26 Lease Expirations 27 COVID-19 Summary of COVID-19 Impact 28 Rent Collections by Industry 29 Analyst Coverage 31 This Supplemental Operating & Financial Data should be read in connection with the company's second quarter 2020 earnings press release (included as Exhibit 99.1 of the company's Current Report on Form 8-K, filed on August 3, 2020) as certain disclosures, definitions, and reconciliations in such announcement have not been included in this Supplemental Operating & Financial Data. Q2 2020 Supplemental Operating & Financial Data 2
Corporate Overview Corporate Profile Senior Management Realty Income, The Monthly Dividend Company®, is an S&P 500 company Sumit Roy, President & Chief Executive Officer and member of the S&P 500 Dividend Aristocrats® index dedicated to Michael R. Pfeiffer, EVP, Chief Administrative Officer, General Counsel and providing stockholders with dependable monthly dividends that increase Secretary over time. For over 51 years, we have been acquiring and managing Neil M. Abraham, EVP, Chief Strategy Officer freestanding commercial real estate that generates rental revenue under Mark E. Hagan, EVP, Chief Investment Officer long-term, net-lease agreements, and supports our monthly dividend. Benjamin N. Fox, EVP, Asset Management & Real Estate Operations Portfolio Overview At June 30, 2020, we owned a diversified portfolio of 6,541 properties Credit Ratings located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.), with Moody’s A3 Stable Outlook approximately 106.4 million square feet of leasable space. Our properties Standard & Poor’s A- Stable Outlook are leased to approximately 600 different tenants doing business in 50 separate industries. Approximately 84% of our quarterly rental revenue Fitch BBB+ Stable Outlook was generated from retail properties, 11% from industrial properties, and the remaining 5% from other property types. Our physical occupancy as of June 30, 2020 was 98.5%, with a weighted average remaining lease term Dividend Information as of July 2020 of approximately 9.0 years. Total portfolio annualized contractual rental ▪ Current annualized dividend of 2.8020 per share revenue on our leases as of June 30, 2020 is approximately $1.582 billion. ▪ Compound average annual dividend growth rate of approximately 4.5% Common Stock ▪ 601 consecutive monthly dividends declared ▪ 91 consecutive quarterly dividend increases Our Common Stock is traded on the New York Stock Exchange under the symbol "O“. June 30, 2020 Corporate Headquarters Closing price $ 59.50 11995 El Camino Real Shares and units outstanding 345,486,540 San Diego, California 92130 Market value of common equity $ 20,556,449,000 Phone: (858) 284-5000 Total market capitalization $ 28,469,322,000 London Office Transfer Agent 42 Brook St. Computershare London, United Kingdom W1K 5DB Phone: (877) 218-2434 Phone: 020 3931 6856 Website: www.computershare.com Website: www.realtyincome.com Q2 2020 Supplemental Operating & Financial Data 3
Consolidated Statements Of Income (dollars in thousands, except per share amounts) (unaudited) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 REVENUE Rental (including reimbursable) (1) $ 410,201 $ 364,252 $ 822,358 $ 718,289 Other (2) 4,435 1,198 6,619 1,526 Total revenue 414,636 365,450 828,977 719,815 EXPENSES Depreciation and amortization 168,328 150,426 332,913 287,943 Interest 77,841 72,488 153,766 142,508 Property (including reimbursable) 26,452 21,342 52,058 42,978 General and administrative 19,063 18,585 40,027 33,693 Income taxes 2,838 1,155 5,601 2,600 Provisions for impairment 13,869 13,061 18,347 17,733 Total expenses 308,391 277,057 602,712 527,455 Gain on sales of real estate 1,323 6,891 39,829 14,154 Foreign currency and derivative gains (losses), net 502 136 (1,062) 136 Loss on extinguishment of debt — — (9,819) — Net income 108,070 95,420 255,213 206,650 Net income attributable to noncontrolling interests (246) (226) (562) (514) Net income available to common stockholders $ 107,824 $ 95,194 $ 254,651 $ 206,136 Net income available to common stockholders per common share: Basic and Diluted $ 0.31 $ 0.31 $ 0.75 $ 0.67 (1) Includes rental revenue (reimbursable) of $20,964 and $16,405 for the three months ended June 30, 2020 and June 30, 2019, respectively, and $41,330 and $33,751 for the six months ended June 30, 2020 and June 30, 2019, respectively. Unless otherwise specified, references to rental revenue in this document are exclusive of reimbursements from tenants for recoverable real estate taxes and operating expenses. In addition, we recorded reserves as a reduction of rental revenue of $8.5 million (of which $2.1 million was related to straight-line rent receivables) for the second quarter of 2020, $417,000 for the second quarter of 2019, $10.2 million (of which $2.8 million was related to straight-line rent receivables) for the six months ended June 30, 2020, and $2.4 million (of which $1.4 million was related to straight-line receivables) for the six months ended June 30, 2019. (2) The three and six months ended June 30, 2020 includes $1.4 million and $1.5 million, respectively, of interest income from short-term investments and money market funds. The three and six months ended June 30, 2019 includes $166,000 and $296,000, respectively, of interest income from money market funds. There were no short-term investments in the three or six months ended June 30, 2019. Q2 2020 Supplemental Operating & Financial Data 4
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 stockholders and the weighted average number of common shares used for the basic and diluted FFO per share computations. We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts’ (Nareit’s) definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus impairments of depreciable real estate assets, and reduced by gains on property sales. Presentation of the information regarding FFO and AFFO (described on page 6) is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered as measures of liquidity, of our ability to make cash distributions, or of our ability to pay interest payments. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income available to common stockholders $ 107,824 $ 95,194 $ 254,651 $ 206,136 Depreciation and amortization 168,328 150,426 332,913 287,943 Depreciation of furniture, fixtures and equipment (152) (147) (278) (302) Provisions for impairment 13,869 13,061 18,347 17,733 Gain on sales of real estate (1,323) (6,891) (39,829) (14,154) FFO adjustments allocable to noncontrolling interests (208) (154) (363) (192) FFO available to common stockholders $ 288,338 $ 251,489 $ 565,441 $ 497,164 FFO allocable to dilutive noncontrolling interests 348 362 717 670 Diluted FFO $ 288,686 $ 251,851 $ 566,158 $ 497,834 FFO per common share, basic and diluted $ 0.84 $ 0.81 $ 1.66 $ 1.62 Distributions paid to common stockholders $ 240,470 $ 208,864 $ 474,294 $ 413,410 FFO available to common stockholders in excess of distributions paid to common stockholders $ 47,868 $ 42,625 $ 91,147 $ 83,754 Weighted average number of common shares used for FFO: Basic 343,515,406 311,032,972 340,061,487 307,293,949 Diluted 344,148,378 311,785,281 340,744,384 308,000,806 Q2 2020 Supplemental Operating & Financial Data 5
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 to common stockholders and the weighted average number of common shares used for the basic and diluted AFFO per share computations. We define AFFO as FFO adjusted for unique revenue and expense items, which the company believes are not as pertinent to the measurement of the company’s ongoing operating performance. Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution). Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income available to common stockholders (1) $ 107,824 $ 95,194 $ 254,651 $ 206,136 Cumulative adjustments to calculate FFO (2) 180,514 156,295 310,790 291,028 FFO available to common stockholders 288,338 251,489 565,441 497,164 Executive severance charge — — 3,463 — Loss on extinguishment of debt — — 9,819 — Amortization of share-based compensation 4,882 4,527 8,624 7,291 Amortization of deferred financing costs 1,476 1,133 2,836 2,173 Amortization of net mortgage premiums (356) (354) (710) (708) Loss on interest rate swaps 1,306 686 1,992 1,364 Straight-line payments from cross-currency swaps 623 799 1,346 799 Leasing costs and commissions (973) (707) (1,111) (1,030) Recurring capital expenditures (21) (116) (21) (172) Straight-line rent (6,242) (7,230) (14,024) (12,092) Amortization of above and below-market leases, net 6,087 3,627 12,517 7,741 Other adjustments 121 81 2,291 139 AFFO available to common stockholders $ 295,241 $ 253,935 $ 592,463 $ 502,669 AFFO allocable to dilutive noncontrolling interests 356 368 732 — Diluted AFFO $ 295,597 $ 254,303 $ 593,195 $ 502,669 AFFO per common share: Basic $ 0.86 $ 0.82 $ 1.74 $ 1.64 Diluted $ 0.86 $ 0.82 $ 1.74 $ 1.63 Distributions paid to common stockholders $ 240,470 $ 208,864 $ 474,294 $ 413,410 AFFO available to common stockholders in excess of distributions paid to common stockholders $ 54,771 $ 45,071 $ 118,169 $ 89,259 Weighted average number of common shares used for AFFO: Basic 343,515,406 311,032,972 340,061,487 307,293,949 Diluted 344,148,378 311,785,281 340,744,384 307,580,127 (1) The three and six months ended June 30, 2020 includes $14.1 million of rent deferred as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the FASB and $46.1 million of uncollected rent from the second quarter for which we have not granted a lease concession. As of June 30, 2020, collection of the $60.2 million of unpaid rent is probable. Deferrals accounted for as modifications totaling $161,000 for the three and six months ended June 30, 2020 have not been added back to AFFO. See page 28 for accounting treatment of COVID-19 rent deferrals. (2) See reconciling items for FFO presented under "Funds from Operations (FFO).” Q2 2020 Supplemental Operating & Financial Data 6
Consolidated Balance Sheets (dollars in thousands , except per share amounts) (unaudited) June 30, 2020 December 31, 2019 ASSETS Real estate held for investment, at cost: Land $ 5,772,734 $ 5,684,034 Buildings and improvements 14,096,997 13,833,882 Total real estate held for investment, at cost 19,869,731 19,517,916 Less accumulated depreciation and amortization (3,367,420) (3,117,919) Real estate held for investment, net 16,502,311 16,399,997 Real estate and lease intangibles held for sale, net 40,551 96,775 Cash and cash equivalents 35,345 54,011 Short-term investment 300,000 — Accounts receivable 255,609 181,969 Lease intangible assets, net 1,508,177 1,493,383 Other assets, net 460,554 328,661 Total assets $ 19,102,547 $ 18,554,796 LIABILITIES AND EQUITY Distributions payable $ 81,384 $ 76,728 Accounts payable and accrued expenses 201,176 177,039 Lease intangible liabilities, net 322,744 333,103 Other liabilities 248,547 262,221 Line of credit payable 628,551 704,335 Term loans, net 249,258 499,044 Mortgages payable, net 394,816 410,119 Notes payable, net 6,602,152 6,288,049 Total liabilities 8,728,628 8,750,638 Stockholders’ equity: Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 345,023,421 and 333,619,106 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively 13,704,121 12,873,849 Distributions in excess of net income (3,306,588) (3,082,291) Accumulated other comprehensive loss (53,084) (17,102) Total stockholders’ equity 10,344,449 9,774,456 Noncontrolling interests 29,470 29,702 Total equity 10,373,919 9,804,158 Total liabilities and equity $ 19,102,547 $ 18,554,796 Q2 2020 Supplemental Operating & Financial Data 7
Debt Summary (dollars in thousands) Maturity Date as of Principal Balance as of Interest Rate as of Weighted Average June 30, 2020 June 30, 2020 % of Debt June 30, 2020 Years until Maturity Credit Facility (1) (7) Credit Facility March 24, 2023 $ 628,551 7.9 % 0.92 % 2.7 years Unsecured Term Loan Term Loan - Realty Income 2024 (2) March 24, 2024 $ 250,000 3.2 % 3.89 % 3.7 years Deferred financing costs (742) Carrying value 249,258 Senior Unsecured Notes and Bonds 3.250% Notes due 2022 October 15, 2022 950,000 12.0 % 3.25 % 4.650% Notes due 2023 August 1, 2023 750,000 9.5 % 4.65 % 3.875% Notes due 2024 July 15, 2024 350,000 4.4 % 3.88 % 3.875% Notes due 2025 April 15, 2025 500,000 6.3 % 3.88 % 4.125% Notes due 2026 October 15, 2026 650,000 8.2 % 4.13 % 3.000% Notes due 2027 January 15, 2027 600,000 7.6 % 3.00 % 3.650% Notes due 2028 January 15, 2028 550,000 7.0 % 3.65 % 3.250% Notes due 2029 June 15, 2029 500,000 6.3 % 3.25 % 3.250% Notes due 2031 (3) January 15, 2031 600,000 7.5 % 3.25 % 2.730% Notes due 2034 (4) May 20, 2034 390,632 4.9 % 2.73 % 5.875% Bonds due 2035 March 15, 2035 250,000 3.2 % 5.88 % 4.650% Notes due 2047 March 15, 2047 550,000 7.0 % 4.65 % Principal amount 6,640,632 83.9 % 3.77 % (7) 8.3 years Unamortized net premiums and deferred financing costs (38,480) Carrying value 6,602,152 Mortgages Payable 26 mortgages on 91 properties October 2020 - June 2032 393,690 (5) 5.0 % 4.90 % (7) 2.7 years Unamortized net premiums and deferred financing costs 1,126 Carrying value 394,816 Total Debt $ 7,912,873 (6) 100.0 % 3.60 % (7) 7.4 years Fixed Rate $ 7,284,322 92.1 % Variable Rate $ 628,551 7.9 % (1) We have a $3.0 billion unsecured revolving credit facility bearing interest at LIBOR, plus 0.775% with an initial term that expires in March 2023. It includes, at our election, two six-month extension options, at a cost of 0.0625% of the facility commitment, or $1.875 million per option. The credit facility also has a $1.0 billion expansion option, which is subject to obtaining lender commitments. As of June 30, 2020, the outstanding balance was $628.6 million, including £329.5 million Sterling, leaving $2.4 billion available on the credit facility, excluding the $1.0 billion accordion feature. (2) Borrowings under the term loan have been swapped to fixed and bears interest at an effective rate of 3.89%. (3) In July 2020, we issued $350 million of additional aggregate amount of our existing 3.250% senior unsecured notes due in January 2031. (4) Represents the principal balance (in U.S. dollars) of the Sterling-denominated private placement of £315.0 million, which approximates $390.6 million converted at the applicable exchange rate on June 30, 2020. (5) The mortgages payable are at fixed interest rates as of June 30, 2020. (6) Excludes non-cash unamortized net original issuance premiums recorded on the senior unsecured notes and bonds, non-cash unamortized net premiums recorded on the mortgages payable, and deferred financing costs on the term loans, notes and bonds, and mortgages payable. (7) The totals are calculated as the weighted average interest rate as of June 30, 2020 for each respective category. The credit facility includes £329.5 million Sterling-denominated borrowings with a weighted average interest rate of 0.90% at June 30, 2020. Q2 2020 Supplemental Operating & Financial Data 8
Debt Maturities as of June 30, 2020 (dollars in millions) Debt Maturities Year of Credit Term Mortgages Senior Unsecured Weighted Average Maturity Facility Loan Payable Notes and Bonds(1) Total Interest Rate(2) 2020 $ — $ — $ 69.5 $ — $ 69.5 4.80% 2021 — — 68.8 — 68.8 5.61% 2022 — — 111.8 950.0 1,061.8 3.43% 2023 628.6 — 20.6 750.0 1,399.2 4.64% 2024 — 250.0 112.2 350.0 712.2 3.97% Thereafter — — 10.8 4,590.6 4,601.4 3.73% Totals $ 628.6 $ 250.0 $ 393.7 $ 6,640.6 $ 7,912.9 (1) In July 2020, we issued $350 million of additional aggregate amount of our existing 3.250% senior unsecured notes due in January 2031. (2) Weighted average interest rate for 2023 excludes the credit facility. Mortgages Payable Maturities by Quarter Year of First Second Third Fourth Weighted Average Maturity Quarter Quarter Quarter Quarter Total Interest Rate 2020 $ — $ — $ 1.7 $ 67.8 $ 69.5 4.80% 2021 18.7 18.2 31.0 0.9 68.8 5.61% 2022 0.9 10.5 62.2 38.2 111.8 4.97% 2023 0.9 6.5 12.4 0.8 20.6 4.44% 2024 0.8 0.8 0.9 109.7 112.2 4.47% Thereafter — — — 10.8 10.8 5.64% Totals $ 21.3 $ 36.0 $ 108.2 $ 228.2 $ 393.7 Q2 2020 Supplemental Operating & Financial Data 9
Capitalization & Financial Ratios (dollars in thousands, except per share amounts) Capitalization as of June 30, 2020 Capital Structure as of June 30, 2020 Principal Debt Balance Credit Facility $ 628,551 Unsecured Term Loan 250,000 Senior Unsecured Notes and Bonds (1) 6,640,632 Mortgages Payable 393,690 Total Debt $ 7,912,873 Equity Shares/Units Stock Price Market Value Common Stock (NYSE: "O") 345,023,421 $ 59.50 $ 20,528,893 Common Units 463,119 $ 59.50 $ 27,556 Total Equity $ 20,556,449 Total Market Capitalization (2) $ 28,469,322 Debt/Total Market Capitalization (2) 27.8 % (1) In July 2020, we issued $350 million of additional aggregate amount of our existing 3.250% senior unsecured notes due in January 2031. (2) Our enterprise value was $28,133,977 (total market capitalization less cash on hand and short term investments). The percentage for debt to enterprise value is materially consistent with that presented for total market capitalization. Dividend Data Year-over-Year YTD 2020 YTD 2019 Growth Rate Liquidity as of June 30, 2020 Common Dividend Paid per Share $ 1.392 $ 1.350 3.1 % Cash on Hand $ 35,345 AFFO per Share (diluted) $ 1.74 $ 1.63 6.7 % Short-term investment (3) 300,000 AFFO Payout Ratio 80.0 % 82.8 % Availability under Credit Facility 2,371,449 $ 2,706,794 (3) Consists of a term deposit that matured on July 24, 2020. Q2 2020 Supplemental Operating & Financial Data 10
Adjusted EBITDAre & Coverage Ratios (dollars in thousands) Reconciliation of Net Income to Adjusted EBITDAre (1) Three Months Ended June 30, 2020 Debt Service & Fixed Charge Coverage Net income $ 108,070 Interest 77,841 Income taxes 2,838 Depreciation and amortization 168,328 Provisions for impairment 13,869 Gain on sales of real estate (1,323) Foreign currency and derivative gains, net (2) (502) Quarterly Adjusted EBITDAre $ 369,121 Net Debt $ 7,539,432 Annualized Adjusted EBITDAre $ 1,476,484 Net Debt/Adjusted EBITDAre (3) 5.1 (1) The National Association of Real Estate Investment Trust (Nareit) came to the conclusion that a Nareit-defined EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) would provide investors with a consistent measure to help make investment decisions among certain REITs. Our definition of “Adjusted EBITDAre” is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gains and losses (which is consistent with our previous calculations of "Adjusted EBITDAre"). We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter, as earnings (net income) before (i) interest expense, including non-cash loss (gain) on swaps, (ii) income and franchise taxes, (iii) real estate depreciation and amortization, (iv) provisions for impairment, (v) gain on sales of real estate, and (vi) foreign currency and derivative gains and losses, net. Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT’s performance because it is widely followed by industry analysts, lenders and investors. Management also believes the use of an annualized quarterly Adjusted EBITDAre metric is meaningful because it represents the company’s current earnings run rate for the period presented. The ratio of our total debt to our annualized quarterly Adjusted EBITDAre is also used to determine vesting of performance share awards granted to our executive officers. Adjusted EBITDAre should be considered along with, but not as an alternative to net income as a measure of our operating performance. (2) Includes foreign currency gains and losses as a result of intercompany debt and certain remeasurement transactions. (3) Our ratio of net debt-to-Adjusted EBITDAre, which is used by management as a measure of leverage, is calculated as net debt (which we define as total debt per the consolidated balance sheet, less cash and cash equivalents and short term investments maturing within 30 days), divided by annualized quarterly Adjusted EBITDAre. Q2 2020 Supplemental Operating & Financial Data 11
Debt Covenants As of June 30, 2020 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 incur additional debt under the terms of our senior unsecured notes and bonds as well as to disclose our current compliance with such covenants, and are not measures of our liquidity or performance. Required Actuals Limitation on incurrence of total debt ≤ 60% of adjusted undepreciated assets 38.1 % Limitation on incurrence of secured debt ≤ 40% of adjusted undepreciated assets 1.9 % Debt service and fixed charge coverage (trailing 12 months) (1) ≥ 1.5x 5.4x Maintenance of total unencumbered assets ≥ 150% of unsecured debt 267.3 % (1) Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that: (i) the incurrence of any Debt (as defined in the covenants) incurred by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four quarter period), (ii) the repayment or retirement of any of our Debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters had in each case occurred on July 1, 2019, and subject to certain additional adjustments. Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of July 1, 2019, nor does it purport to reflect our debt service coverage ratio for any future period. Q2 2020 Supplemental Operating & Financial Data 12
Investment Summary (dollars in thousands) Weighted Number of Leasable Initial Average Cash Average Lease Properties Investment Cash Rents Square Feet Lease Yield (1) Term (Years) Q1 Acquisitions - U.S. 54 $ 318,300 $ 20,645 1,423,690 6.5% 14.8 2020 Acquisitions - U.K. 4 165,573 8,400 389,680 5.1% 12.5 Total Acquisitions 58 $ 483,873 $ 29,045 1,813,370 6.0% 14.2 Properties under Development (2) 7 2,142 161 177,545 7.5% 10.6 Total Real Estate Investments 65 $ 486,015 $ 29,206 1,990,915 6.0% 14.1 Approximately 36% of the annualized revenue generated by these investments is from investment grade tenants (3) Q2 Acquisitions - U.S. 26 $ 94,284 $ 6,025 427,656 6.4% 12.9 2020 Acquisitions - U.K. 2 58,178 3,569 98,630 6.1% 9.9 Total Acquisitions 28 $ 152,462 $ 9,594 526,286 6.3% 11.8 Properties under Development (2) 4 1,727 178 45,560 10.3% 10.4 Total Real Estate Investments 32 $ 154,189 $ 9,772 571,846 6.3% 11.8 Approximately 41% of the annualized revenue generated by these investments is from investment grade tenants (3) YTD Acquisitions - U.S. 80 $ 412,584 $ 26,670 1,851,346 6.5% 14.4 2020 Acquisitions - U.K. 6 223,751 11,969 488,310 5.3% 11.8 Total Acquisitions 86 $ 636,335 $ 38,639 2,339,656 6.1% 13.6 Properties under Development (2) 8 3,869 339 179,662 8.8% 10.5 Total Real Estate Investments 94 $ 640,204 $ 38,978 2,519,318 6.1% 13.6 Approximately 37% of the annualized revenue generated by these investments is from investment grade tenants (3) (1) Cash capitalization rates are computed as contractual cash net operating income for the first twelve months following the acquisition date, divided by the total cost of the property (including all expenses borne by Realty Income). (2) Includes investments during the period in new development and development of existing properties. Cash rents noted reflect total cash rents to be received on this investment amount upon completion of the properties under development. (3) Refer to footnote 3 on page 16 for our definition of investment grade tenants. Q2 2020 Supplemental Operating & Financial Data 13
Disposition Summary (dollars in thousands) Net Cash Capitalization Number of Properties Initial Investment Net Book Value Net Sales Proceeds Rate (1) Q1 Occupied 4 $ 88,273 $ 79,739 $ 116,082 6.2% 2020 Vacant 13 14,730 7,373 10,151 — Total Real Estate Dispositions 17 $ 103,003 $ 87,112 $ 126,233 The unlevered internal rate of return on properties sold during the first quarter was 11.1% Q2 Occupied — $ — $ — $ — — 2020 Vacant 12 14,726 6,073 7,410 — Total Real Estate Dispositions 12 $ 14,726 $ 6,073 $ 7,410 The unlevered internal rate of return on properties sold during the second quarter was 6.1% YTD Occupied 4 $ 88,273 $ 79,739 $ 116,082 6.2% 2020 Vacant 25 29,456 13,446 17,561 — Total Real Estate Dispositions 29 $ 117,729 $ 93,185 $ 133,643 The unlevered internal rate of return on properties sold during the first six months was 10.5% (1) Cash capitalization rates are computed as annualized current month contractual cash net operating income, divided by the net proceeds received upon sale of the property (including all expenses borne by Realty Income). Q2 2020 Supplemental Operating & Financial Data 14
Development Pipeline (dollars in thousands) As of June 30, 2020 Investment Estimated Remaining Retail Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) 1 $ — $ 1,566 $ 1,566 100 % Development of existing properties 3 5,669 2,016 7,685 92 % 4 $ 5,669 $ 3,582 $ 9,251 Investment Estimated Remaining Non-Retail Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) — $ — $ — $ — — % Development of existing properties — — — — — % — $ — $ — $ — Investment Estimated Remaining Total Number of Properties to Date Investment Total Commitment Percent Leased (2) New development (1) 1 $ — $ 1,566 $ 1,566 100 % Development of existing properties 3 5,669 2,016 7,685 92 % 4 $ 5,669 $ 3,582 $ 9,251 (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 2020 and April 2021. Q2 2020 Supplemental Operating & Financial Data 15
Tenant Diversification Top 20 Tenants (3) Our 20 largest tenants based on percentage of total portfolio annualized contractual rental Investment Grade Tenants : revenue at June 30, 2020 include the following: Number of Leases 3,477 Percentage of Annualized Rents 48% Investment Grade Number of Ratings Tenant Leases % of Revenue (1) (S&P/Moody's/Fitch) Walgreens 248 6.0% BBB/Baa2/BBB- 7-Eleven 403 4.7% AA-/Baa1/- Dollar General 771 4.5% BBB/Baa2/- FedEx 41 3.9% BBB/Baa2/- Dollar Tree / Family Dollar 550 3.4% BBB-/Baa3/- LA Fitness 57 3.4% — Regal Cinemas (Cineworld) 42 2.9% — AMC Theaters 32 2.7% — Walmart / Sam's Club 54 2.5% AA/Aa2/AA Sainsbury's 16 2.5% — Lifetime Fitness 16 2.4% — Circle K (Couche-Tard) 280 1.9% BBB/Baa2/- BJ's Wholesale Clubs 15 1.8% — CVS Pharmacy 88 1.6% BBB/Baa2/- Treasury Wine Estates 17 1.6% — Super America (Marathon) 161 1.6% BBB/Baa2/BBB Kroger 22 1.5% BBB/Baa1/- GPM Investments / Fas Mart 207 1.4% — TBC Corp 159 1.2% A-/Baa1/- Home Depot 19 1.2% A/A2/A Total 3,198 52.8% (3) We define investment grade tenants as tenants with a credit rating, and (2) Weighted Average EBITDAR/Rent Ratio on Retail Properties 2.7x tenants that are subsidiaries or affiliates of companies with a credit Median EBITDAR/Rent Ratio on Retail Properties 2.5x (2) rating, of Baa3/BBB- or higher from one of the three major rating (1) agencies (Moody’s/S&P/Fitch). Approximately 48% of our annualized Amounts for each tenant are calculated independently, therefore, the individual percentages may not rental revenue is generated from properties leased to investment grade sum to the total. tenants, their subsidiaries or affiliated companies. Refer to page 22 for (2) Based on an analysis of the most recently provided information from all retail tenants that provide such investment grade composition by property type. information. We do not independently verify the information we receive from our retail tenants. Q2 2020 Supplemental Operating & Financial Data 16
Top 10 Industries (1) Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended June 30, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 Convenience stores 12.0% 11.9 % 11.2 % 9.6 % 8.7 % 9.2 % Drug stores 9.1 9.0 10.2 10.9 11.2 10.6 Dollar stores 8.1 7.3 7.5 7.9 8.6 8.9 Grocery stores 8.0 6.2 5.0 4.4 3.1 3.0 Health and fitness 7.1 7.5 7.4 7.5 8.1 7.7 Theaters 6.3 6.3 5.5 5.0 4.9 5.1 Restaurants - quick service 4.8 6.2 5.7 5.1 4.9 4.2 Transportation services 4.2 4.6 5.0 5.4 5.5 5.4 Restaurants - casual dining 3.0 3.2 3.2 3.8 3.9 3.8 Home improvement 2.9 3.0 3.0 2.6 2.5 2.4 (1) The presentation of Top 10 Industries combines rental revenue contribution from U.S. and U.K. properties. Q2 2020 Supplemental Operating & Financial Data 17
Industry Diversification Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended June 30, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 U.S. Aerospace 0.7% 0.8 % 0.8 % 0.9 % 1.0 % 1.1 % Apparel stores 1.4 1.1 1.3 1.6 1.9 2.0 Automotive collision services 1.1 1.1 0.9 1.0 1.0 1.0 Automotive parts 1.7 1.6 1.7 1.3 1.3 1.4 Automotive service 2.2 2.3 2.2 2.2 1.9 1.9 Automotive tire services 2.1 2.2 2.4 2.6 2.7 2.9 Beverages 2.1 2.3 2.5 2.7 2.6 2.7 Child care 2.2 2.3 1.7 1.8 1.9 2.0 Consumer electronics 0.3 0.3 0.3 0.3 0.3 0.3 Consumer goods 0.6 0.6 0.7 0.8 0.9 0.9 Convenience stores 12.0 11.9 11.2 9.6 8.7 9.2 Crafts and novelties 0.8 0.6 0.7 0.6 0.6 0.6 Diversified industrial 0.6 0.7 0.8 0.9 0.9 0.8 Dollar stores 8.1 7.3 7.5 7.9 8.6 8.9 Drug stores 9.1 9.0 10.2 10.9 11.2 10.6 Education 0.2 0.2 0.3 0.3 0.3 0.3 Electric utilities 0.1 0.1 0.1 0.1 0.1 0.1 Entertainment 0.3 0.4 0.4 0.4 0.5 0.5 Equipment services 0.4 0.4 0.4 0.4 0.6 0.5 Financial services 2.0 2.1 2.3 2.4 1.8 1.7 Food processing 0.8 0.6 0.5 0.6 1.1 1.2 General merchandise 3.0 2.5 2.3 2.0 1.8 1.7 Government services 0.7 0.8 0.9 1.0 1.1 1.2 Grocery stores 5.0 4.9 5.0 4.4 3.1 3.0 Health and beauty 0.2 0.3 0.2 * * * * Less than 0.1% Q2 2020 Supplemental Operating & Financial Data 18
Industry Diversification (Cont'd) Percentage of Rental Revenue (excluding reimbursable) For the Quarter Ended For the Year Ended June 30, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2018 2017 2016 2015 Health and fitness 7.1% 7.5 % 7.4 % 7.5 % 8.1 % 7.7 % Health care 1.6 1.4 1.5 1.4 1.5 1.7 Home furnishings 0.8 0.7 0.8 0.9 0.8 0.9 Home improvement 2.9 3.0 3.0 2.6 2.5 2.4 Machinery 0.1 0.1 0.1 0.1 0.1 0.1 Motor vehicle dealerships 1.6 1.9 1.9 2.1 1.9 1.6 Office supplies 0.2 0.2 0.2 0.2 0.3 0.3 Other manufacturing 0.6 0.6 0.7 0.8 0.8 0.7 Packaging 1.0 1.0 1.1 1.0 0.8 0.8 Paper 0.1 0.1 0.1 0.1 0.1 0.1 Pet supplies and services 0.8 0.5 0.5 0.6 0.6 0.7 Restaurants - casual dining 3.0 3.2 3.2 3.8 3.9 3.8 Restaurants - quick service 4.8 6.2 5.7 5.1 4.9 4.2 Shoe stores 0.2 0.3 0.5 0.6 0.7 0.7 Sporting goods 0.8 0.9 1.1 1.4 1.6 1.8 Telecommunications 0.5 0.5 0.6 0.6 0.6 0.7 Theaters 6.3 6.3 5.5 5.0 4.9 5.1 Transportation services 4.2 4.6 5.0 5.4 5.5 5.4 Wholesale clubs 2.5 2.7 3.0 3.3 3.6 3.8 Other 0.1 0.6 0.8 0.8 0.9 1.0 Total U.S. 96.9% 98.7 % 100 % 100 % 100 % 100 % U.K. Grocery stores 3.0 1.3 — — — — Health care 0.1 — — — — — Theaters * * — — — — Total U.K. 3.1% 1.3 % — % — % — % — % Totals 100% 100 % 100 % 100 % 100 % 100 % * Less than 0.1% Q2 2020 Supplemental Operating & Financial Data 19
Geographic Diversification (dollars in thousands) Approximate Rental Revenue for Percentage of Number of Percent Leasable the Quarter Ended Rental Location Properties Leased Square Feet June 30, 2020 (1) Revenue Alabama 227 98 % 2,148,400 $ 7,796 2.0 % Alaska 3 100 274,600 536 0.1 Arizona 153 99 2,085,300 8,825 2.3 Arkansas 102 99 1,183,200 3,472 0.9 California 231 99 6,643,800 34,210 8.8 Colorado 100 96 1,582,900 5,943 1.5 Connecticut 21 90 1,378,200 4,088 1.0 Delaware 19 100 101,400 690 0.2 Florida 432 98 4,697,800 20,648 5.3 Georgia 300 98 4,612,100 14,476 3.7 Idaho 14 93 103,200 441 0.1 Illinois 296 98 6,396,500 22,230 5.7 Indiana 204 99 2,565,600 10,499 2.7 Iowa 45 100 2,443,200 4,414 1.1 Kansas 122 96 2,256,800 6,251 1.6 Kentucky 93 100 1,826,100 5,358 1.4 Louisiana 137 96 1,905,500 6,177 1.6 Maine 27 100 277,800 1,473 0.4 Maryland 38 100 1,494,000 6,449 1.7 Massachusetts 59 95 942,800 4,529 1.2 Michigan 223 100 2,610,800 9,322 2.4 Minnesota 172 99 2,326,800 11,108 2.9 Mississippi 187 98 2,021,800 5,657 1.5 Missouri 187 96 3,019,600 9,493 2.4 (1) Includes rental revenue for all properties owned at June 30, 2020. Excludes revenue of $1 from sold properties and rental revenue (reimbursable) of $20,964. Q2 2020 Supplemental Operating & Financial Data 20
Geographic Diversification (Cont'd) (dollars in thousands) Approximate Rental Revenue for Percentage of Number of Percent Leasable the Quarter Ended Rental Location Properties Leased Square Feet June 30, 2020 (1) Revenue Montana 12 100 % 89,100 $ 536 0.1 % Nebraska 62 97 866,400 2,274 0.6 Nevada 24 96 1,196,900 2,153 0.5 New Hampshire 14 100 321,500 1,464 0.4 New Jersey 79 99 1,252,000 7,622 2.0 New Mexico 60 100 504,200 2,002 0.5 New York 139 98 3,028,600 16,532 4.2 North Carolina 202 99 3,334,500 11,236 2.9 North Dakota 8 100 126,900 336 0.1 Ohio 342 98 6,731,800 17,311 4.4 Oklahoma 191 98 2,377,600 8,145 2.1 Oregon 30 100 644,600 2,278 0.6 Pennsylvania 223 100 2,265,900 9,127 2.3 Rhode Island 3 100 158,000 815 0.2 South Carolina 179 97 1,811,000 8,408 2.2 South Dakota 23 96 258,500 683 0.2 Tennessee 260 99 3,850,400 11,892 3.1 Texas 804 99 11,630,800 41,467 10.7 Utah 23 100 949,700 2,339 0.6 Vermont 1 100 65,500 191 * Virginia 219 99 3,357,000 10,994 2.8 Washington 50 98 913,400 3,726 1.0 West Virginia 36 100 528,100 1,854 0.5 Wisconsin 128 98 3,106,200 9,003 2.3 Wyoming 9 100 63,900 379 0.1 Puerto Rico 4 100 28,300 150 * U.K. 24 100 2,058,800 12,234 3.1 Totals/Average 6,541 98 % 106,417,800 $ 389,236 100 % * Less than 0.1% (1) Includes rental revenue for all properties owned at June 30, 2020. Excludes revenue of $1 from sold properties and rental revenue (reimbursable) of $20,964. Q2 2020 Supplemental Operating & Financial Data 21
Property Type Composition (dollars in thousands) Percentage of Rental Percentage of Rental Revenue for the Revenue for the Annualized Revenue Approximate Leasable Quarter Ended Quarter Ended from Investment Grade Property Type Number of Properties Square Feet (1) June 30, 2020 (2) June 30, 2020 Tenants (3) Retail 6,364 76,343,300 $ 326,516 83.9 % 43.9 % Industrial 119 26,714,300 42,344 10.9 80.2 Office 43 3,175,700 13,660 3.5 86.7 Agriculture 15 184,500 6,716 1.7 — Totals 6,541 106,417,800 $ 389,236 100.0 % 48.5 % (1) Includes leasable building square footage. Excludes 3,300 acres of leased land categorized as agriculture at June 30, 2020. (2) Includes rental revenue for all properties owned at June 30, 2020. Excludes revenue of $1 from sold properties and rental revenue (reimbursable) of $20,964. (3) Refer to footnote 3 on page 16 for our definition of investment grade tenants. Q2 2020 Supplemental Operating & Financial Data 22
Same Store Rental Revenue (dollars in thousands) Second Quarter 2020 Top 3 Industries Contributing to the Change Same Store Rental Revenue Quarter Ended Quarter Ended Net % Change Number of Properties 5,539 Industry June 30, 2020 June 30, 2019 Change by Industry Square Footage 86,741,825 Restaurants - quick service $ 17,724 $ 20,509 $ (2,785) (13.6) % Q2 2020 $ 315,655 Restaurants - casual dining 10,153 10,579 (426) (4.0) % Q2 2019 $ 317,022 Health care - U.S. 4,955 4,534 421 9.3 % Decrease (in dollars) $ (1,367) Decrease (percent) (0.4) % Year-to-Date 2020 Top 3 Industries Contributing to the Change Same Store Rental Revenue Six Months Ended Six Months Ended Net % Change Number of Properties 5,539 Industry June 30, 2020 June 30, 2019 Change by Industry Square Footage 86,741,825 Restaurants - quick service $ 38,765 $ 41,416 $ (2,651) (6.4) % YTD 2020 $ 635,566 Motor vehicle dealerships 12,027 13,550 (1,523) (11.2) % YTD 2019 $ 636,678 Sporting goods 5,518 6,098 (580) (9.5) % Decrease (in dollars) $ (1,112) Decrease (percent) (0.2) % Our calculation of same store rental revenue includes $12.9 million of rent deferred for future payment as a result of lease concessions we granted in response to the COVID-19 pandemic and recognized under the practical expedient provided by the Financial Accounting Standards Board (FASB). Our calculation of same store rental revenue also includes $35.9 million of uncollected rent from the second quarter of 2020 for which we have not granted a lease concession. As of June 30, 2020, we deemed collection of $48.8 million of unpaid rent as probable over the existing lease term. If these applicable amounts of rent deferrals and uncollected rent were excluded from our calculation of same store rental revenue, the decreases for the second quarter and first six months of 2020 would have been (14.1)% and (6.5)%, respectively. See page 28 for the accounting treatment of COVID-19 rent deferrals. Same Store Pool Defined For purposes of determining the properties used to calculate our same store rental revenue pool, we include all properties that we owned for the entire year-to-date period, for both the current and prior year except for properties during the current or prior year that were: (i) vacant at any time, (ii) under development or redevelopment, or (iii) involved in eminent domain and rent was reduced. Rental revenue amounts presented in our same store rent calculation exclude straight-line rent, the amortization of above and below-market leases, and reimbursements from tenants for recoverable real estate taxes and operating expenses. Q2 2020 Supplemental Operating & Financial Data 23
Same Store Rental Revenue (Cont'd) (dollars in thousands) Same Store Rental Revenue by Property Type Second Quarter 2020 Quarter Ended Quarter Ended Net % Change by Property Type June 30, 2020 June 30, 2019 Change Property Type Industrial $ 36,563 $ 36,403 $ 160 0.4 % Retail 260,275 262,310 (2,035) (0.8) % Agriculture 5,612 5,543 69 1.2 % Office 13,205 12,766 439 3.4 % Total $ 315,655 $ 317,022 $ (1,367) (0.4) % Year-to-Date 2020 Six Months Ended Six Months Ended Net % Change by Property Type June 30, 2020 June 30, 2019 Change Property Type Industrial $ 73,036 $ 72,390 $ 646 0.9 % Retail 524,894 527,284 (2,390) (0.5) % Agriculture 11,224 11,086 138 1.2 % Office 26,412 25,918 494 1.9 % Total $ 635,566 $ 636,678 $ (1,112) (0.2) % Reconciliation of Same Store Rental Revenue to Rental Revenue (including reimbursable) Quarter Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Same store rental revenue $ 315,655 $ 317,022 $ 635,566 $ 636,678 Straight-line rent 6,319 6,869 14,173 11,731 Amortization of above and below-market leases (7,773) (4,365) (15,871) (8,504) Tenant reimbursements 20,964 16,405 41,330 33,751 Revenue from excluded properties (1) 75,036 28,321 147,160 44,633 Rental revenue (including reimbursable) $ 410,201 $ 364,252 $ 822,358 $ 718,289 (1) See Same Store Pool Defined on page 23. Q2 2020 Supplemental Operating & Financial Data 24
Occupancy By Property Change in Occupancy Occupied Properties 6,440 Vacant Properties at 3/31/2020 97 Total Properties 6,541 Occupancy 98.5 % Expiration Activity (1) + 81 Leasing Activity (2) - 65 By Square Footage Vacant Disposition Activity (3) - 12 Occupied Square Footage 104,396,090 Total Square Footage 106,417,842 Vacant Properties at 6/30/2020 101 Occupancy 98.1 % (1) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the current quarter. (Economic Occupancy) By Rental Revenue (2) Includes 60 expirations that were re-leased to the same tenants without Quarterly Cash Rental Revenue $ 392,972,397 vacancy, two that were re-leased to new tenants without a period of vacancy, and three that were re-leased to new tenants after a period of vacancy. See Quarterly Cash Vacant Rental Revenue (1) $ 6,209,754 page 26 for additional detail on re-leasing activity. (3) Occupancy 98.4% Includes ten properties that were vacant at the beginning of the quarter. (1) Based on contractual monthly rents received immediately preceding the date of vacancy. Occupancy by Number of Properties Q2 2020 Supplemental Operating & Financial Data 25
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 Q2 2020 Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 13,977 $ 331 $ 820 $ 15,128 New Cash Rents* $ 14,478 $ 235 $ 621 $ 15,334 Recapture Rate 103.6 % 71.0 % 75.7 % 101.4 % Number of Leases 60 2 3 65 Average Months Vacant — — 7.9 0.4 Lease Incentives(1) $ — $ — $ — $ — *Percentage of Total Annualized Portfolio Rental Revenue: 1.0 % Re-leased to New Tenant Re-leased to Without After a Period Re-leasing Year-to-Date Same Tenant Vacancy of Vacancy Totals Prior Cash Rents $ 28,753 $ 3,298 $ 1,073 $ 33,124 New Cash Rents* $ 29,805 $ 2,445 $ 902 $ 33,152 Recapture Rate 103.7 % 74.1 % 84.1 % 100.1 % Number of Leases 150 3 5 158 Average Months Vacant — — 12.7 0.4 Lease Incentives(1) $ — $ — $ — $ — *Percentage of Total Annualized Portfolio Rental Revenue: 2.1 % (1) Lease incentives are defined as capital outlays made on behalf of a tenant that are specific to the tenant’s use and benefit, and are not capitalized as improvements to the property. Q2 2020 Supplemental Operating & Financial Data 26
Lease Expirations (dollars in thousands) Our leases have a weighted average remaining lease term of approximately 9.0 years. Total Portfolio (1) Approx. Rental Revenue for % of Expiring Leases Leasable the Quarter Ended Rental Year Retail Non-Retail Sq. Feet June 30, 2020 Revenue 2020 66 8 1,433,500 $ 3,824 1.0 % 2021 357 14 3,280,200 12,381 3.2 2022 412 22 8,899,800 20,176 5.2 2023 549 23 10,227,100 30,864 8.0 2024 411 16 7,076,900 22,793 5.9 2025 475 19 7,932,400 28,146 7.3 2026 328 4 5,185,200 17,853 4.6 2027 564 6 7,310,600 23,785 6.1 2028 442 14 10,394,400 27,513 7.1 2029 533 6 9,088,100 29,230 7.5 2030 258 14 5,003,500 23,384 6.0 2031 315 26 6,844,700 29,223 7.5 2032 135 4 3,799,400 15,155 3.9 2033 283 3 3,682,900 18,661 4.8 2034 322 1 4,548,400 28,012 7.2 2035 - 2045 890 5 9,596,600 57,219 14.7 Totals 6,340 185 104,303,700 $ 388,219 100.0 % (1) This table sets forth the timing of remaining lease term expirations in our portfolio and their contribution to rental revenue for the quarter ended June 30, 2020. The lease expirations for leases under construction are based on the estimated date of completion of those projects. Excludes revenue of $1,017 from expired leases, $1 from sold properties, and rental revenue (reimbursable) of $20,964 at June 30, 2020. Leases on our multi-tenant properties are counted separately in the table above. Q2 2020 Supplemental Operating & Financial Data 27
Summary of COVID-19 Impact The COVID-19 pandemic and the measures taken to limit the spread are negatively impacting the economy, including the industries in which some of our tenants operate. These impacts are likely to continue and may increase in severity as the duration of the pandemic lengthens. As a result, we continue to work diligently with our tenants affected by the pandemic to understand their financial liquidity in regard to their lease obligations to us. On April 9, 2020 we withdrew our 2020 guidance that was provided on February 19, 2020 due the ongoing uncertainty regarding the impact of the COVID-19 pandemic and measures taken to limit its spread. We are reinstating guidance relating to our acquisition volume, which we currently estimate at $1.25 - $1.75 billion for 2020. We continue to evaluate the impacts of the COVID-19 pandemic on our business as the situation continues to evolve. Percentages of Contractual Rent Collected by Month as of July 31, 2020 Month Ended Month Ended Month Ended Quarter Ended Month Ended April 30, 2020 May 31, 2020 June 30, 2020 June 30, 2020 July 31, 2020 Contractual rent collected(1) across total portfolio 88.4% 84.9% 86.1% 86.5% 91.5% Contractual rent collected(1) from top 20 tenants(2) 83.0% 82.1% 82.5% 82.5% 90.7% Contractual rent collected(1) from investment grade 100.0% 98.4% 98.9% 99.1% 100.0% tenants(3) (1) Contractual rent is the aggregate cash amount charged to tenants inclusive of monthly base rent receivables. U.K. rent (which is payable in pounds Sterling) was converted at the exchange rate in effect on May 1, 2020 for rents collected for the month of April 2020, on June 1, 2020 for rents collected for the month of May 2020, on July 1, 2020 for rents collected for the month of June 2020, and on July 31, 2020 for rents collected for the month of July 2020. (2) We define top 20 tenants as our 20 largest tenants based on percentage of total portfolio annualized contractual rental revenue as of the last day of such period. (3) We define investment grade tenants as tenants with a credit rating, and tenants that are subsidiaries or affiliates of companies with a credit rating, of Baa3/BBB- or higher from one of the three major rating agencies (Moody’s/S&P/Fitch). Accounting Treatment of Rent Deferrals The majority of the concessions granted to our tenants as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In these cases, we have currently determined that the collection of substantially all rent payments is probable. Our accounting policy establishes that rent collection must be probable for lease revenue recognition and does not provide for partial reserving. On April 8, 2020, the FASB staff and FASB board members discussed questions about the accounting for COVID-19 related rent concessions under Topic 842, Leases. The FASB staff suggested, and FASB board members agreed, that in the context of the COVID-19 crisis, for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient and account for rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. Since the majority of our deferrals qualify under the practical expedient, we do not expect rental revenue used to calculate Net Income and Nareit FFO to be significantly impacted by deferrals. AFFO has not been adjusted for COVID-19 rent deferrals recognized under GAAP where we have determined that collection is probable. Q2 2020 Supplemental Operating & Financial Data 28
Rent Collections by Industry Percentage of Total Contractual Rent Due Percentage of Total Contractual Rent Collected as of: July 2020 (1) June 2020 (1) May 2020 (1) April 2020 (1) July 2020 (1) June 2020 (1) May 2020 (1) April 2020 (1) U.S. Aerospace 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% Apparel stores 1.3 1.3 1.3 1.2 1.3 1.1 0.9 1.2 Automotive collision services 1.1 1.0 1.0 1.0 1.1 1.0 1.0 1.0 Automotive parts 1.6 1.6 1.6 1.6 1.5 1.6 1.6 1.6 Automotive service 2.5 2.5 2.5 2.5 2.3 1.9 2.0 2.5 Automotive tire services 2.0 2.0 2.0 2.1 2.0 1.9 1.7 2.1 Beverages 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Child care 2.2 2.1 2.2 2.1 1.8 1.6 0.7 1.6 Consumer electronics 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Consumer goods 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 Convenience stores 12.2 12.1 12.0 12.1 12.1 12.0 11.9 12.0 Crafts and novelties 0.8 0.8 0.7 0.7 0.8 0.8 0.7 0.6 Diversified industrial 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Dollar stores 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 Drug stores 8.5 8.5 8.5 8.6 8.5 8.5 8.5 8.6 Education 0.2 0.2 0.2 0.2 0.1 0.2 0.2 0.2 Electric utilities 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Entertainment 0.3 0.3 0.3 0.3 0.1 0.1 0.2 0.3 Equipment services 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Financial services 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 Food processing 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 General merchandise 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 Government services 0.7 0.7 0.7 0.7 0.7 0.7 0.6 0.6 Grocery stores 5.0 5.1 5.1 5.1 5.0 5.1 5.1 5.1 Health and beauty 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Health and fitness 7.1 7.1 7.2 7.2 6.3 3.0 3.5 3.6 (1) Contractual rent is the aggregate cash amount charged to tenants inclusive of monthly base rent receivables. U.K. rent (which is payable in pounds Sterling) was converted at the exchange rate in effect on May 1, 2020 for rents collected for the month of April 2020, on June 1, 2020 for rents collected for the month of May 2020, on July 1, 2020 for rents collected for the month of June 2020, and on July 31, 2020 for rents collected for the month of July 2020. Q2 2020 Supplemental Operating & Financial Data 29
Rent Collections by Industry (cont'd) Percentage of Total Contractual Rent Due Percentage of Total Contractual Rent Collected as of: July 2020 (1) June 2020 (1) May 2020 (1) April 2020 (1) July 2020 (1) June 2020 (1) May 2020 (1) April 2020 (1) U.S. (continued) Health care 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% Home furnishings 0.8 0.8 0.8 0.9 0.7 0.7 0.4 0.5 Home improvement 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 Machinery 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Motor vehicle dealerships 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 Office supplies 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 Other manufacturing 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.6 Packaging 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Paper 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Pet supplies and services 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Restaurants - casual dining 3.1 3.1 3.1 3.1 2.7 2.7 2.5 2.7 Restaurants - quick service 5.7 5.7 5.7 5.7 5.0 4.8 4.5 5.3 Shoe stores 0.2 0.2 0.2 0.2 * * * 0.2 Sporting goods 0.8 0.8 0.8 0.8 0.8 0.6 0.8 0.8 Telecommunications 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Theaters 5.9 6.0 5.9 6.0 0.9 — 0.2 0.2 Transportation services 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 Wholesale clubs 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 Other 0.1 0.2 0.2 0.2 0.1 0.1 0.1 0.1 Total U.S. 96.2% 96.2% 96.1% 96.4% 87.7% 82.3% 81.0% 84.8% U.K. Grocery stores 3.7 3.7 3.8 3.5 3.7 3.7 3.8 3.5 Theaters * * * * — — — — Health care 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Total U.K. 3.8% 3.8% 3.9% 3.6% 3.8% 3.8% 3.9% 3.6% Totals 100.0% 100.0% 100.0% 100.0% 91.5% 86.1% 84.9% 88.4% * Less than 0.1% (1) Contractual rent is the aggregate cash amount charged to tenants inclusive of monthly base rent receivables. U.K. rent (which is payable in pounds Sterling) was converted at the exchange rate in effect on May 1, 2020 for rents collected for the month of April 2020, on June 1, 2020 for rents collected for the month of May 2020, on July 1, 2020 for rents collected for the month of June 2020, and on July 31, 2020 for rents collected for the month of July 2020. Q2 2020 Supplemental Operating & Financial Data 30
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 Berenberg Nate Crossett nate.crossett@berenberg-us.com (646) 949-9030 BTIG Michael Gorman mgorman@btig.com (212) 738-6138 James Sullivan jsullivan@btig.com (212) 738-6139 Capital One Chris Lucas christopher.lucas@capitalone.com (571) 633-8151 Citigroup Michael Bilerman michael.bilerman@citi.com (212) 816-1383 Christy McElroy christy.mcelroy@citi.com (212) 816-6981 D.A. Davidson Barry Oxford boxford@dadco.com (212) 240-9871 Deutsche Bank Shivani Sood shivani.sood@db.com (212) 250-4617 Edward Jones James Shanahan jim.shanahan@edwardjones.com (314) 515-5292 Green Street Spenser Allaway sallaway@greenstreetadvisors.com (949) 640-8780 Janney Montgomery Scott Robert Stevenson robstevenson@janney.com (646) 840-3217 Jefferies Linda Tsai ltsai@jefferies.com (212) 778-8011 Jonathan Petersen jpetersen@jefferies.com (212) 284-1705 Brandon Travis btravis@jefferies.com (212) 778-8743 J.P. Morgan Anthony Paolone anthony.paolone@jpmorgan.com (212) 622-6682 Nikita Bely nikita.bely@jpmorgan.com (212) 622-0695 Ladenburg Thalmann John Massocca jmassocca@ladenburg.com (212) 409-2543 Mizuho Haendel St. Juste haendel.st.juste@us.mizuho-sc.com (212) 205-7860 Morgan Stanley Vikram Malhotra vikram.malhotra@morganstanley.com (212) 761-7064 Raymond James Collin Mings collin.mings@raymondjames.com (727) 567-2585 Paul Puryear paul.puryear@raymondjames.com (727) 567-2253 Marnie Georges marnie.georges@raymondjames.com (727) 567-2638 RBC Capital Markets Wes Golladay wes.golladay@rbccm.com (440) 715-2650 Brian Hawthorne brian.hawthorne@rbccm.com (440) 715-2653 Scotiabank Nicholas Yulico nicholas.yulico@scotiabank.com (212) 225-6904 Greg McGinniss greg.mcginniss@scotiabank.com (212) 225-6906 Stifel Simon Yarmak yarmaks@stifel.com (443) 224-1345 Moshe Levin levinm@stifel.com (443) 224-1264 Wells Fargo Todd Stender todd.stender@wellsfargo.com (562) 637-1371 Philip DeFelice philip.defelice@wellsfargo.com (443) 263-6442 Jason Belcher jason.belcher@wellsfargo.com (443) 462-7354 Realty Income 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's performance made by these analysts are theirs alone and do not represent opinions, estimates or forecasts of Realty Income or its management. Realty Income does not by its reference above or distribution imply, and expressly disclaims, any endorsement of or concurrence with any information, estimates, forecasts, opinions, conclusions or recommendations provided by analysts. Q2 2020 Supplemental Operating & Financial Data 31