Realty Income Pitch Deck
Crystallizing Value Creation:
Illustrative Sale-Leaseback Scenarios
REALTY
INCOME
SLB transactions: Inherently a deleveraging
and value-enhancing exercise for
shareholders of corporate sellers
$500 MILLION SALE-LEASEBACK TRANSACTION AT 6.0% CAP RATE
$30 MILLION ANNUAL LEASE PAYMENT
CORPORATE SELLER USES PROCEEDS TO DE-LEVER BALANCE
SHEET...
CORPORATE SELLER USES PROCEEDS FOR SHARE
BUYBACK...
PRE-SLB
$ IN MILLIONS
Real Estate
PRE-SLB
ADJUSTMENTS
POST-SLB
$ IN MILLIONS
ADJUSTMENTS
POST-SLB
$500
($500)
$0
Real Estate
$500
($500)
$0
Total Debt
$3,100
($500)
$2,600
Total Debt
$3,100
$3,100
Rent
$0
$30
$30
Common Equity
$6,000
($500) +$140
$5,640
Total Lease Adj. Debt(1)
$3,100
($500) + $225
$2,825
Shares Outstanding
100
($500/$60)
91.7
EBITDA
$800
($30)
$770
Price/Share
$60
$61.5
Total Debt/EBITDA
3.9x
3.4x
Earnings
Lease Adj. Debt/ EBITDAR
3.9x
3.5x
EPS
$500
($30)
$470
$5.00
$5.13
Note: The information on this slide is for illustrative purposes only and contains many assumptions that may and will differ depending on many
factors, including the company, the transaction and the market generally.
(1) Assuming rating agency rent capitalization at 7.5x.
P/E
12.0x
12.0x
22
22
Note: Assuming constant P/E | Corporate seller uses $500 million of SLB proceeds to buy back 8.3 million shares at $60/sh.View entire presentation