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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 377 added, 311 removed, 497 unchanged (58% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share and share count data) (unaudited)

March 31, 2023 December 31, 2022

(in thousands, except per share amounts) (unaudited)

June 30, 2023 December 31, 2022

Real estate held for investment, at cost:

23 unchanged sentences

Stockholders’ equity:

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000,000 shares authorized, 673,206,775 and 660,300,195 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000 shares authorized, 708,773 and 660,300 shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively

37,149,380 34,159,509

8 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share and share count data) (unaudited)

Three months ended March 31,

(in thousands, except per share amounts) (unaudited)

Three months ended June 30,

Six months ended June 30,

2023 2022 2023 2022

Rental (including reimbursable) $ 995,289 $ 800,800 $ 1,920,578 $ 1,600,365

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Gain on sales of real estate 7,824 40,572 12,103 50,728

Foreign currency and derivative gain (loss), net 10,322 ( 590 )

Equity in income of unconsolidated entities — 954

Foreign currency and derivative (loss) gain, net ( 2,552 ) 7,480 7,770 6,890

Gain on extinguishment of debt — 127 — 127

Equity in income and impairment of investment in unconsolidated entities 411 ( 6,627 ) 411 ( 5,673 )

Other income, net 3,020 2,806 5,750 4,658

5 unchanged sentences

Amounts available to common stockholders per common share:

Net Income, basic and diluted $ 0.34 $ 0.34

Net income available to common stockholders per common share, basic and diluted $ 0.29 $ 0.37 $ 0.63 $ 0.71

Weighted average common shares outstanding:

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Net income available to common stockholders $ 195,415 $ 223,207 $ 420,431 $ 422,576

Total other comprehensive income:

Total other comprehensive income (loss):

Foreign currency translation adjustment 29,046 ( 48,992 ) 57,796 ( 59,698 )

Unrealized (loss) gain on derivatives, net ( 6,410 ) 33,454 ( 8,572 ) 77,144

Total other comprehensive income $ 26,588 $ 32,984

Total other comprehensive income (loss) $ 22,636 $ ( 15,538 ) $ 49,224 $ 17,446

Comprehensive income available to common stockholders $ 218,051 $ 207,669 $ 469,655 $ 440,022

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CONSOLIDATED STATEMENTS OF EQUITY

(dollars in thousands) (unaudited)

Three months ended March 31, 2023, and 2022

(in thousands) (unaudited)

Three months ended June 30, 2023, and 2022

capital Distributions

4 unchanged sentences

interests Total

Balance, December 31, 2021

Balance, March 31, 2023

673,207 $ 34,958,608 $ ( 5,772,923 ) $ 73,421 $ 29,259,106 $ 128,232 $ 29,387,338

3 unchanged sentences

Share issuances, net of costs 35,519 2,183,194 — — 2,183,194 — 2,183,194

Contributions by noncontrolling interests — — — — — 39,559 39,559

Share-based compensation, net

47 7,578 — — 7,578 — 7,578

Balance, June 30, 2023

708,773 $ 37,149,380 $ ( 6,102,226 ) $ 96,057 $ 31,143,211 $ 167,932 $ 31,311,143

Balance, March 31, 2022

601,567 $ 30,236,374 $ ( 4,772,112 ) $ 37,917 $ 25,502,179 $ 76,546 $ 25,578,725

Net income — — 223,207 — 223,207 615 223,822

Other comprehensive loss — — — ( 15,538 ) ( 15,538 ) — ( 15,538 )

Distributions paid and payable — — ( 450,245 ) — ( 450,245 ) ( 894 ) ( 451,139 )

Share issuances, net of costs 15,961 1,060,529 — — 1,060,529 — 1,060,529

Share-based compensation, net 36 6,480 — — 6,480 — 6,480

Balance, June 30, 2022

617,564 $ 31,303,383 $ ( 4,999,150 ) $ 22,379 $ 26,326,612 $ 76,267 $ 26,402,879

Six months ended June 30, 2023 and 2022

capital Distributions

net income Accumulated

comprehensive

stockholders’

equity Noncontrolling

interests Total

Balance, December 31, 2022 660,300 $ 34,159,509 $ ( 5,493,193 ) $ 46,833 $ 28,713,149 $ 130,140 $ 28,843,289

Net income — — 420,431 — 420,431 2,844 423,275

Other comprehensive income — — — 49,224 49,224 — 49,224

Distributions paid and payable — — ( 1,029,464 ) — ( 1,029,464 ) ( 4,611 ) ( 1,034,075 )

Share issuances, net of costs 48,226 2,982,094 — — 2,982,094 2,982,094

Contributions by noncontrolling interests — — — — — 39,559 39,559

Share-based compensation, net 247 7,777 — — 7,777 — 7,777

Balance, June 30, 2023

708,773 $ 37,149,380 $ ( 6,102,226 ) $ 96,057 $ 31,143,211 $ 167,932 $ 31,311,143

Balance December 31, 2021 591,262 $ 29,578,212 $ ( 4,530,571 ) $ 4,933 $ 25,052,574 $ 76,826 $ 25,129,400

Net income — — 422,576 — 422,576 1,217 423,793

3 unchanged sentences

Share-based compensation, net 169 4,598 — — 4,598 — 4,598

Balance, March 31, 2023

Balance, June 30, 2022

617,564 $ 31,303,383 $ ( 4,999,150 ) $ 22,379 $ 26,326,612 $ 76,267 $ 26,402,879

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands) (unaudited)

Three months ended March 31,

(in thousands) (unaudited)

Six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Non-cash revenue adjustments ( 33,420 ) ( 25,332 )

Gain on extinguishment of debt — ( 127 )

Amortization of net premiums on mortgages payable ( 6,396 ) ( 7,091 )

2 unchanged sentences

(Loss) gain on interest rate swaps ( 3,600 ) 1,446

Foreign currency and unrealized derivative (gain) loss, net ( 8,942 ) 590

Foreign currency and unrealized derivative loss, net ( 6,289 ) ( 6,890 )

Gain on sales of real estate ( 12,103 ) ( 50,728 )

Equity in income of unconsolidated entities — ( 954 )

Equity in income and impairment of investment in unconsolidated entities ( 411 ) 5,673

Distributions from unconsolidated entities — 1,490

8 unchanged sentences

Proceeds from sales of real estate 60,460 272,245

Return of investment from unconsolidated entities 3,927 746

Insurance proceeds received 7,198 16,046

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Basis of Presentation

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We are listed on the New York Stock Exchange ("NYSE") under the symbol “O”.

As of June 30, 2023, we owned or held interests in a diversified portfolio of 13,118 properties located in all 50 states of the United States ("U.S."), Puerto Rico, the United Kingdom ("U.K."), Spain, Italy, and Ireland, with approximately 255.5 million square feet of leasable space.

Our accompanying unaudited consolidated financial statements were prepared from our books and records in accordance with accounting principles generally accepted in the United States of America ("U.S.

In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented have been included.

Operating results for the three months ended March 31, 2023 are not necessarily an indication of the results that may be expected for the entire year.

Operating results for the three and six months ended June 30, 2023 are not necessarily an indication of the results that may be expected for the entire year.

Readers of this quarterly report should refer to our audited consolidated financial statements for the year ended December 31, 2022, which are included in our 2022 Annual Report on Form 10-K , as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report.

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Unless otherwise indicated, all dollar amounts are expressed in USD.

We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and assesses our performance.

For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements into USD at the time we consolidate those subsidiaries’ financial statements.

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We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest.

Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity.

Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction (see note 9, Noncontrolling Interests ).

At March 31, 2023, Realty Income, L.P.

At June 30, 2023, Realty Income, L.P.

and certain investments, including investments in joint ventures, are considered VIEs in which we were deemed the primary beneficiary based on our controlling financial interests.

Below is a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets at March 31, 2023, and December 31, 2022 (in thousands):

March 31, 2023 December 31, 2022

Below is a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets at June 30, 2023, and December 31, 2022 (in thousands):

June 30, 2023 December 31, 2022

Net real estate

3 unchanged sentences

$ 159,014 $ 60,127

The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest.

Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity.

Reclassification .

Certain prior period amounts have been reclassified to conform to the current year presentation.

Value-added tax receivable is now included in 'Other assets, net', in the consolidated balance sheets.

Previously, this was categorized as 'Accounts receivable, net' in the consolidated balance sheets.

Use of Estimates .

The consolidated financial statements were prepared in conformity with U.S.

GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Segment Reporting.

We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and assesses our performance.

Income Taxes.

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Other revenue includes certain property-related revenue not included in rental revenue and interest income recognized on financing receivables for certain leases with above-market terms.

The COVID-19 pandemic and the measures taken to limit its spread have negatively impacted the economy across many industries, including the industries in which some of our clients operate.

We continue to assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases .

We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends (including trends arising from the COVID-19 pandemic) and other facts and circumstances related to the applicable clients.

If we conclude the collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered

We assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases .

We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends and other facts and circumstances related to the applicable clients.

If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized.

The majority of concessions granted to our clients as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged.

In accordance with the guidance provided by the Financial Accounting Standards Board ("FASB") staff, we have elected to account for these leases as if the right of deferral existed in the lease contract and therefore continue to recognize lease revenue in accordance with the lease contract in effect.

In limited circumstances, the undiscounted cash flows resulting from deferrals granted increased significantly from original lease terms, which required us to account for these as lease modifications and resulted in an insignificant impact to consolidated rental revenue.

Similarly, rent abatements granted, which are also accounted for as lease modifications, have impacted our rental revenue by an insignificant amount.

As of March 31, 2023, other than the information related to the reserves recorded to date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable.

However, since the impact to rent collections for our clients affected by the COVID-19 pandemic is ongoing, we do not know the types of future concessions, if any, that will ultimately be granted, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available.

Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary.

Goodwill is qualitatively assessed to determine whether a quantitative impairment assessment is necessary.

Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value.

If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value.

We perform our annual goodwill impairment assessment as of June 30.

During the six months ended June 30, 2023 and 2022, there were no impairments of goodwill.

Concentration of Credit Risk.

There were no clients who accounted for more than more than 10% of our total revenue for each of the six months ended June 30, 2023, and 2022.

Recent Accounting Pronouncements.

The Company reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

Supplemental Detail for Certain Components of Consolidated Balance Sheets (dollars in thousands):

Supplemental Detail for Certain Components of Consolidated Balance Sheets (in thousands):

Accounts receivable, net, consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Straight-line rent receivables, net $ 440,939 $ 363,993

2 unchanged sentences

Lease intangible assets, net, consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

In-place leases

8 unchanged sentences

Other assets, net, consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Financing receivables $ 1,556,342 $ 933,116

1 unchanged sentence

Right of use asset - financing leases 538,168 467,920

Restricted escrow deposits 50,009 37,627

Value-added tax receivable 51,983 24,726

Prepaid expenses 39,595 28,128

1 unchanged sentence

Derivative assets and receivables – at fair value 32,730 83,100

Restricted escrow deposits 23,995 37,627

Credit facility origination costs, net 14,730 17,196

5 unchanged sentences

Accounts payable and accrued expenses consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Notes payable - interest payable $ 169,773 $ 129,202

Derivative liabilities and payables – at fair value 93,017 64,724

Accrued costs on properties under development 65,981 26,559

Property taxes payable 63,337 45,572

Value-added tax payable 44,981 23,375

Accrued income taxes 40,826 22,626

Accrued property expenses 26,718 25,290

Value-added tax payable 24,500 23,375

Accrued costs on properties under development 23,776 26,559

Mortgages, term loans, and credit line - interest payable 7,802 5,868

Merger and integration-related costs 6,464 1,464

Other items 46,948 55,921

1 unchanged sentence

Lease intangible liabilities, net, consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Below-market leases

4 unchanged sentences

Other liabilities consist of the following at:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Lease liability - operating leases, net $ 428,178 $ 440,096

4 unchanged sentences

Investments in Real Estate

We acquire land, buildings and improvements necessary for the successful operations of commercial clients.

Acquisitions of Real Estate

Below is a summary of our acquisitions for the period indicated below:

Below is a summary of our acquisitions for the six months ended June 30, 2023:

Properties Leasable

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Lease Yield (1)

Three months ended March 31, 2023 (2)

Acquisitions - U.S.

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Since it is possible that a client could default on the payment of contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above.

Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $ 0.7 million received as settlement credits as reimbursement of free rent periods for the three months ended March 31, 2023.

Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $ 1.5 million received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2023.

In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return.

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estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs.

(2) None of our investments during the three months ended March 31, 2023 caused any one client to be 10% or more of our total assets at March 31, 2023.

(3) Includes three U.K.

development properties that represent an investment of £ 3.8 million during the three months ended March 31, 2023, converted at the applicable exchange rate on the funding dates.

(2) Includes £ 8.7 million of investments in three U.K.

development properties and € 10.2 million of investment in one Spain development property, converted at the applicable exchange rates on the funding dates.

(3) Our clients occupying the new properties are 89.9 % retail and 10.1 % industrial based on annualized contractual rent.

Approximately 42 % of the annualized contractual rent generated from acquisitions during the three months ended March 31, 2023 is from our investment grade rated clients, their subsidiaries or affiliated companies.

The acquisitions during the three months ended March 31, 2023 had no contingent consideration.

The aggregate purchase price of the assets acquired during the three months ended March 31, 2023 has been allocated as follows (in millions):

Acquisitions - USD Acquisitions - Sterling

Approximately 26 % of the annualized contractual rent generated from acquisitions during the six months ended June 30, 2023 is from our investment grade rated clients, their subsidiaries or affiliated companies.

The aggregate purchase price of the assets acquired during the six months ended June 30, 2023 has been allocated as follows (in millions):

Acquisitions - USD Acquisitions - Sterling Acquisitions - Euro

$ 665.4 £ 141.0 € 15.2

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Lease intangible assets (2)

328.6 76.3 14.4

Other assets (3)

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( 57.0 ) ( 0.1 ) —

$ 3,717.8 £ 588.9 € 50.8

(1) Sterling-denominated land includes £ 7.6 million of right of use assets under long-term ground leases.

(2) The weighted average amortization period for acquired lease intangible assets is 11.6 years.

(3) USD-denominated other assets consist entirely of $ 59.8 million of financing receivables with above-market terms.

(3) USD-denominated other assets consist entirely of financing receivables with above-market terms.

Sterling-denominated other assets consist of £ 11.1 million of financing receivables with above-market terms and £ 48.6 million of right-of-use assets accounted for as finance leases.

(4) The weighted average amortization period for acquired lease intangible liabilities is 16.8 years.

(5) USD-denominated other liabilities consist entirely of $ 0.6 million of deferred rent on certain below-market leases.

The properties acquired during the three months ended March 31, 2023 generated total revenues of $ 7.3 million and net income of $ 2.8 million during the three months ended March 31, 2023.

(5) USD-denominated other liabilities consist entirely of deferred rent on certain below-market leases.

The properties acquired during the six months ended June 30, 2023 generated total revenues of $ 70.8 million and net income of $ 32.9 million during the six months ended June 30, 2023.

Investments in Existing Properties

During the three months ended March 31, 2023, we capitalized costs of $ 13.8 million on existing properties in our portfolio, consisting of $ 13.3 million for non-recurring building improvements, $ 0.4 million for re-leasing costs, and $ 0.1 million for recurring capital expenditures.

In comparison, during the three months ended March 31, 2022, we capitalized costs of $ 12.0 million on existing properties in our portfolio, consisting of $ 9.6 million for non-recurring building improvements, $ 2.4 million for re-leasing costs and less than $ 0.1 million for recurring capital expenditures.

During the six months ended June 30, 2023, we capitalized costs of $ 31.9 million on existing properties in our portfolio, consisting of $ 26.3 million for non-recurring building improvements, $ 5.5 million for re-leasing costs, and $ 0.1 million for recurring capital expenditures.

In comparison, during the six months ended June 30, 2022, we capitalized costs of $ 37.8 million on existing properties in our portfolio, consisting of $ 31.8 million for non-recurring building improvements, $ 3.2 million for re-leasing costs, and $ 2.8 million for recurring capital expenditures.

Properties with Existing Leases

The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets.

The values of the in-place leases are amortized as depreciation and amortization expense.

The amounts amortized to expense for all of our in-place leases, for the three months ended March 31, 2023, and 2022 were $ 157.4 million and $ 160.1 million, respectively.

The amounts amortized to expense for all of our in-place leases, for the six months ended June 30, 2023, and 2022 were $ 319.4 million and $ 318.3 million, respectively.

The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in the consolidated statements of income and comprehensive income.

The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the three months ended March 31, 2023, and 2022 were $ 39.8 million, and $ 21.9 million, respectively.

The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the six months ended June 30, 2023, and 2022 were $ 86.8 million and $ 48.6 million, respectively.

If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate.

The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at March 31, 2023 (dollars in thousands):

(decrease) to

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The following table summarizes our properties sold during the periods indicated below (dollars in millions):

Three months ended March 31,

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Number of properties 29 70 55 104

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Under our revolving credit facility, our current investment grade credit ratings provide for USD borrowings at the Secured Overnight Financing Rate ("SOFR"), plus 0.725 % with a SOFR adjustment charge of 0.10 % and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.95 % over SOFR, British Pound Sterling at the Sterling Overnight Indexed Average (“SONIA”), plus 0.725 % with a SONIA adjustment charge of 0.0326 % and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.8826 % over SONIA, and Euro Borrowings at one-month Euro Interbank Offered Rate (“EURIBOR”), plus 0.725 %, and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.85 % over one-month EURIBOR.

As of March 31, 2023, credit facility origination costs of $ 16.0 million are included in other assets, net, as compared to $ 17.2 million at December 31, 2022, on our consolidated balance sheets.

As of June 30, 2023, we had a borrowing capacity of $ 3.4 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 867.5 million, comprised of £ 644.0 million Sterling and € 45.0 million Euro borrowings, as compared to an outstanding balance at December 31, 2022 of $ 2.0 billion, comprised of € 1.8 billion Euro and £ 70.0 million Sterling borrowings.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 4.6 % and 1.5 % during the six months ended June 30, 2023, and 2022, respectively.

At June 30, 2023, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 5.6 %.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at June 30, 2023, we were in compliance with the covenants under our revolving credit facility.

As of June 30, 2023, credit facility origination costs of $ 14.7 million are included in other assets, net, as compared to $ 17.2 million at December 31, 2022, on our consolidated balance sheets.

These costs are being amortized over the remaining term of our revolving credit facility.

As of March 31, 2023, we had a borrowing capacity of $ 3.1 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 1.1 billion, comprised of $ 770.0 million USD and £ 305.0 million Sterling borrowings, as compared to an outstanding balance at December 31, 2022 of $ 2.0 billion, comprised of € 1.8 billion Euro and £ 70.0 million Sterling borrowings.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 3.7 % and 1.1 % during the three months ended March 31, 2023, and 2022, respectively.

At March 31, 2023, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 5.4 %.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at March 31, 2023, we were in compliance with the covenants under our revolving credit facility.

Commercial Paper Programs

We have a USD-denominated unsecured commercial paper program, under which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $ 1.5 billion, as well as a Euro-denominated unsecured commercial paper program, which permits us to issue additional unsecured commercial notes up to a maximum aggregate amount of $ 1.5 billion (or foreign currency equivalent).

Our Euro-denominated

unsecured commercial paper program may be issued in USD or various foreign currencies, including but not limited to, Euros, Sterling, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary terms in the European commercial paper market.

notes up to a maximum aggregate amount of $ 1.5 billion (or foreign currency equivalent).

Our Euro-denominated unsecured commercial paper program may be issued in USD or various foreign currencies, including but not limited to, Euros, Sterling, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary terms in the European commercial paper market.

The commercial paper ranks on a parity in right of payment with all of our other unsecured senior indebtedness outstanding from time to time, including borrowings under our revolving credit facility, our term loans and our outstanding senior unsecured notes.

Proceeds from commercial paper borrowings are used for general corporate purposes.

As of March 31, 2023, the balance of borrowings outstanding under our commercial paper programs was $ 157.5 million, consisting entirely of € 145.0 million of Euro-denominated borrowings, as compared to $ 701.8 million outstanding commercial paper borrowings, including € 361.0 million of Euro-denominated borrowings, at December 31, 2022.

The weighted average interest rate on outstanding borrowings under our commercial paper programs was 3.5 % and 0.5 % for the three months ended March 31, 2023, and 2022, respectively.

As of March 31, 2023, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 3.1 %.

As of June 30, 2023, the balance of borrowings outstanding under our commercial paper programs was $ 122.7 million, consisting entirely of USD borrowings, as compared to $ 701.8 million outstanding commercial paper borrowings, including € 361.0 million of Euro-denominated borrowings, at December 31, 2022.

The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.5 % and 0.8 % for the six months ended June 30, 2023, and 2022, respectively.

As of June 30, 2023, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 5.4 %.

We use our $ 4.25 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper programs.

1 unchanged sentence

In January 2023, we entered into a term loan agreement, permitting us to incur multicurrency term loans, up to an aggregate of $ 1.5 billion in total borrowings.

As of March 31, 2023, we had $ 1.1 billion in multicurrency borrowings, including $ 90.0 million, £ 705.0 million and € 85.0 million in outstanding borrowings.

As of June 30, 2023, we had $ 1.1 billion in multicurrency borrowings, including $ 90.0 million, £ 705.0 million, and € 85.0 million in outstanding borrowings.

The 2023 term loans initially mature in January 2024 and include two 12-month maturity extensions that can be exercised at our option.

1 unchanged sentence

In conjunction with our 2023 term loans, we entered into interest rate swaps which fix our per annum interest rate.

As of March 31, 2023, the effective interest rate, after giving effect to the interest rate swaps, was 5.0 %.

As of June 30, 2023, the effective interest rate, after giving effect to the interest rate swaps, was 5.0 %.

We also have a $ 250.0 million senior unsecured term loan, which matures in March 2024.

In conjunction with this term loan, we also entered into an interest rate swap.

As of March 31, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8 %.

At March 31, 2023, deferred financing costs of $ 6.5 million are included net of the term loans principal balance, as compared to $ 0.2 million related to our $ 250.0 million term loan at December 31, 2022, on our consolidated balance sheets.

As of June 30, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8 %.

At June 30, 2023, deferred financing costs of $ 4.4 million are included net of the term loans principal balance, as compared to $ 0.2 million related to our $ 250.0 million term loan at December 31, 2022, on our consolidated balance sheets.

These costs are being amortized over the remaining term of the term loans.

As of March 31, 2023, we were in compliance with the covenants contained in the term loans.

As of June 30, 2023, we were in compliance with the covenants contained in the term loans.

Mortgages Payable

During the three months ended March 31, 2023, we mad e $ 1.2 million in principal payments.

During the three months ended March 31, 2022, we made $ 43.6 million in princi pal payments, including the full repayment of one mortgage for $ 42.5 million.

No mortgages were assumed during the three months ended March 31, 2023, or 2022.

During the six months ended June 30, 2023, we made $ 8.1 million in principal payments, including the full repayment of one mortgage for $ 5.7 million.

No mortgages were assumed during the six months ended June 30, 2023.

Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan.

Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender.

At March 31, 2023, we were in compliance with these covenants.

The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $ 0.7 million at March 31, 2023 and $ 0.8 million at December 31, 2022.

At June 30, 2023, we were in compliance with these covenants.

The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $ 0.7 million at June 30, 2023 and $ 0.8 million at December 31, 2022.

These costs are being amortized over the remaining term of each mortgage.

The following table summarizes our mortgages payable as of March 31, 2023 and December 31, 2022 (dollars in millions):

The following table summarizes our mortgages payable as of June 30, 2023 and December 31, 2022 (dollars in millions):

Properties (1)

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Financing Costs

March 31, 2023 136 4.8 % 3.4 % 1.1 $ 842.1 $ 8.5 $ 850.6

June 30, 2023 135 4.8 % 3.3 % 0.9 $ 836.3 $ 5.4 $ 841.7

December 31, 2022 136 4.8 % 3.3 % 1.4 $ 842.3 $ 11.6 $ 853.9

(1) At March 31, 2023 and at December 31, 2022, there were 18 mortgages on 136 properties.

(1) At June 30, 2023, there were 17 mortgages on 135 properties and at December 31, 2022, there were 18 mortgages on 136 properties.

With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity.

At March 31, 2023 and December 31, 2022, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.0 % to 6.9 % March 31, 2023 and December 31, 2022, respectively.

(3) Effective interest rates ranged from 2.5 % to 6.6 % and 2.7 % to 6.6 % at March 31, 2023 and December 31, 2022, respectively.

The following table summarizes the maturity of mortgages payable as of March 31, 2023, excluding net premiums of $ 9.2 million and deferred financing costs of $ 0.7 million (dollars in millions):

At June 30, 2023 and December 31, 2022, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.0 % to 6.9 % at June 30, 2023 and December 31, 2022, respectively.

(3) Effective interest rates ranged from 2.0 % to 6.6 % and 2.7 % to 6.6 % at June 30, 2023 and December 31, 2022, respectively.

The following table summarizes the maturity of mortgages payable as of June 30, 2023, excluding $ 5.4 million related to unamortized net premiums and deferred financing costs (dollars in millions):

Year of Maturity

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Notes Payable

Our senior unsecured notes and bonds are USD-denominated and Sterling-denominated.

At June 30, 2023, our senior unsecured notes and bonds are USD-denominated and Sterling-denominated.

Foreign-denominated notes are converted at the applicable exchange rate on the balance sheet date.

The following are sorted by maturity date (in millions):

Principal Amount (Currency Denomination) Carrying Value (USD) as of

March 31, 2023 December 31, 2022

4.600 % notes, $ 500 issued February 2014, of which $ 485 was exchanged in November 2021, both due in February 2024 (1)

$ 500 $ 500 $ 500

3.875 % notes, issued in June 2014 and due in July 2024

$ 350 350 350

3.875 % notes, issued in April 2018 and due in April 2025

$ 500 500 500

4.625 % notes, $ 550 issued October 2018, of which $ 544 was exchanged in November 2021, both due in November 2025 (1)

$ 550 550 550

5.050 % notes, issued in January 2023 and due in January 2026

0.750 % notes, issued December 2020 and due in March 2026

$ 325 325 325

4.875 % notes, $ 600 issued June 2016, of which $ 596 was exchanged in November 2021, both due in June 2026 (1)

$ 600 600 600

4.125 % notes, $ 250 issued in September 2014 and $ 400 issued in March 2017, both due in October 2026

$ 650 650 650

1.875 % notes, issued in January 2022 and due in January 2027

£ 250 309 301

3.000 % notes, issued in October 2016 and due in January 2027

$ 600 600 600

1.125 % notes, issued in July 2021 and due in July 2027

£ 400 495 482

3.950 % notes, $ 600 issued August 2017, of which $ 594 was exchanged in November 2021, both due in August 2027 (1)

$ 600 600 600

3.650 % notes, issued in December 2017 and due in January 2028

$ 550 550 550

3.400 % notes, $ 600 issued June 2020, of which $ 598 was exchanged in November 2021, both due in January 2028 (1)

$ 600 600 600

2.200 % notes, $ 500 issued November 2020, of which $ 497 was exchanged in November 2021, both due in June 2028 (1)

$ 500 500 500

3.250 % notes, issued in June 2019 and due in June 2029

$ 500 500 500

3.100 % notes, $ 600 issued December 2019, of which $ 596 was exchanged in November 2021, both due in December 2029 (1)(2)

$ 599 599 599

4.850 % notes, issued in January 2023 and due in March 2030

3.160 % notes, issued in June 2022 and due in June 2030

£ 140 173 169

1.625 % notes, issued in October 2020 and due December 2030

£ 400 495 482

3.250 % notes, $ 600 issued in May 2020 and $ 350 issued in July 2020, both due in January 2031

$ 950 950 950

3.180 % notes, issued in June 2022 and due in June 2032

£ 345 427 416

5.625 % notes, issued in October 2022 and due in October 2032

$ 750 750 750

2.850 % notes, $ 700 issued November 2020, of which $ 699 was exchanged in November 2021, both due in December 2032 (1)

$ 700 700 700

1.800 % notes, issued in December 2020 and due in March 2033

$ 400 400 400

1.750 % notes, issued in July 2021 and due in July 2033

£ 350 433 422

2.730 % notes, issued in May 2019 and due in May 2034

£ 315 390 379

5.875 % bonds, $ 100 issued in March 2005 and $ 150 issued in June 2011, both due in March 2035

$ 250 250 250

3.390 % notes, issued in June 2022 and due in June 2037

£ 115 142 138

2.500 % notes, issued in January 2022 and due in January 2042

£ 250 309 301

4.650 % notes, $ 300 issued in March 2017 and $ 250 issued in December 2017, both due in March 2047

$ 550 550 550

The following are sorted by maturity date (in thousands):

Carrying Value (USD) as of

Maturity Dates Principal (Currency Denomination) June 30, 2023 December 31, 2022

4.600 % Notes due 2024

February 6, 2024 $ 499,999 $ 499,999 $ 499,999

3.875 % Notes due 2024

July 15, 2024 $ 350,000 350,000 350,000

3.875 % Notes due 2025

April 15, 2025 $ 500,000 500,000 500,000

4.625 % Notes due 2025

November 1, 2025 $ 549,997 549,997 549,997

5.050 % Notes due 2026

January 13, 2026 $ 500,000 500,000 —

0.750 % Notes due 2026

March 15, 2026 $ 325,000 325,000 325,000

4.875 % Notes due 2026

June 1, 2026 $ 599,997 599,997 599,997

4.125 % Notes due 2026

October 15, 2026 $ 650,000 650,000 650,000

1.875 % Notes due 2027

January 14, 2027 £ 250,000 317,700 301,225

3.000 % Notes due 2027

January 15, 2027 $ 600,000 600,000 600,000

1.125 % Notes due 2027

July 13, 2027 £ 400,000 508,320 481,960

3.950 % Notes due 2027

August 15, 2027 $ 599,873 599,873 599,873

3.650 % Notes due 2028

January 15, 2028 $ 550,000 550,000 550,000

3.400 % Notes due 2028

January 15, 2028 $ 599,816 599,816 599,816

2.200 % Notes due 2028

June 15, 2028 $ 499,959 499,959 499,959

4.700 % Notes due 2028

December 15, 2028 $ 400,000 400,000 —

3.250 % Notes due 2029

June 15, 2029 $ 500,000 500,000 500,000

3.100 % Notes due 2029

December 15, 2029 $ 599,291 599,291 599,291

4.850 % Notes due 2030

March 15, 2030 $ 600,000 600,000 —

3.160 % Notes due 2030

June 30, 2030 £ 140,000 177,912 168,686

1.625 % Notes due 2030

December 15, 2030 £ 400,000 508,320 481,960

3.250 % Notes due 2031

January 15, 2031 $ 950,000 950,000 950,000

3.180 % Notes due 2032

June 30, 2032 £ 345,000 438,426 415,691

5.625 % Notes due 2032

October 13, 2032 $ 750,000 750,000 750,000

2.850 % Notes due 2032

December 15, 2032 $ 699,655 699,655 699,655

1.800 % Notes due 2033

March 15, 2033 $ 400,000 400,000 400,000

1.750 % Notes due 2033

July 13, 2033 £ 350,000 444,780 421,715

4.900 % Notes due 2033

July 15, 2033 $ 600,000 600,000 —

2.730 % Notes due 2034

May 20, 2034 £ 315,000 400,302 379,544

5.875 % Bonds due 2035

March 15, 2035 $ 250,000 250,000 250,000

3.390 % Notes due 2037

June 30, 2037 £ 115,000 146,142 138,563

2.500 % Notes due 2042

January 14, 2042 £ 250,000 317,700 301,225

4.650 % Notes due 2047

March 15, 2047 $ 550,000 550,000 550,000

Total principal amount $ 16,383,189 $ 14,114,156

Unamortized net premiums, deferred financing costs and basis adjustment on interest rate swaps designated as fair value hedge (3)

Unamortized net premiums, deferred financing costs and cumulative basis adjustment on fair value hedge (1)

92,400 163,857

(1) Carrying Value (USD) includes the portion of the VEREIT OP notes that remained outstanding, totaling $ 39.1 million in the aggregate at March 31, 2023 and December 31, 2022, that were not exchanged in the exchange offers commenced by us with respect to the outstanding bonds of VEREIT OP in connection with the consummation of the merger with VEREIT (the "Exchange Offers").

(2) These notes were originally issued by VEREIT OP in December of 2019 for the principal amount of $ 600 million.

The amount of Realty Income debt issued through the Exchange Offers was $ 599 million, resulting from cancellations due to late tenders that forfeited the early participation premium of $ 30 per $1,000 principal amount and cash paid in lieu of fractional shares.

(3) In January 2023, we entered into three-year , fixed-to-variable interest rate swaps, which are accounted for as fair value hedges.

See Note 10, Financial Instruments and Fair Value Measurements, for further details.

The following table summarizes the maturity of our notes and bonds payable as of March 31, 2023, excluding $ 133.3 million related to unamortized net premiums, deferred financing costs, and basis adjustment on interest rate swaps designated as fair value hedge (dollars in millions):

$ 16,475,589 $ 14,278,013

(1) In January 2023, in conjunction with the pricing of these senior unsecured notes due January 2026, we entered into three-year , fixed-to-variable interest rate swaps, which are accounted for as fair value hedges.

See Note 11, Derivative Instruments for further details.

The following table summarizes the maturity of our notes and bonds payable as of June 30, 2023, excluding $ 92.4 million related to unamortized net premiums, deferred financing costs, and basis adjustment on interest rate swaps designated as fair value hedges (dollars in millions):

Year of Maturity

Thereafter 10,382.3

As of March 31, 2023, the weighted average interest rate on our notes and bonds payable was 3.4 %, which includes the effect of the interest rate swaps, and the weighted average remaining years until maturity was 6.8 years.

Interest incurred on all of the notes and bonds was $ 130.3 million and $ 103.1 million for the three months ended March 31, 2023, and 2022, respectively.

As of June 30, 2023, the weighted average interest rate on our notes and bonds payable was 3.6 %, and the weighted average remaining years until maturity was 6.7 years.

Interest incurred on all of the notes and bonds was $ 144.1 million and $ 103.0 million for the three months ended June 30, 2023, and 2022, respectively, and $ 274.4 million and $ 206.1 million for the six months ended June 30, 2023, and 2022, respectively.

Our outstanding notes and bonds are unsecured;

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and (iv) the maintenance at all times of total unencumbered assets not less than 150 % of our outstanding unsecured debt.

At March 31, 2023, we were in compliance with these covenants.

At June 30, 2023, we were in compliance with these covenants.

Note Issuances

During the three months ended March 31, 2023, and 2022, we issued the following notes and bonds (in millions):

First Quarter 2023 Issuances

Date of Issuance Maturity Date Principal amount used Price of par value Effective semi-annual yield to maturity

During the six months ended June 30, 2023, we issued the following notes and bonds (in millions):

Date of Issuance Maturity Date Principal amount Price of par value Effective semi-annual yield to maturity

5.050 % Notes

January 2023 January 2026 $ 500.0 (1)

99.618 % 5.189 %

4.850 % Notes

January 2023 March 2030 $ 600.0 98.813 % 5.047 %

First Quarter 2022 Issuances

Date of Issuance Maturity Date Principal amount used Price of par value Effective semi-annual yield to maturity

1.875 % Notes January 2022 January 2027 £ 250.0 99.487 % 1.974 %

2.500 % Notes January 2022 January 2042 £ 250.0 98.445 % 2.584 %

The proceeds from each of these offerings were used to repay borrowings outstanding under our credit facility, to fund investment opportunities, and for other general corporate purposes.

In April 2023, we issued $ 400.0 million of 4.70 % senior unsecured notes due December 2028 and $ 600.0 million of 4.90 % senior unsecured notes due July 2033.

4.700 % Notes

April 2023 December 2028 $ 400.0 98.949 % 4.912 %

4.900 % Notes

April 2023 July 2033 $ 600.0 98.020 % 5.148 %

(1) In January 2023, we issued $ 500 million of 5.05 % senior unsecured notes due January 13, 2026, which are callable at par on January 13, 2024.

In July 2023, we issued € 550.0 million of 4.875 % senior unsecured notes due July 2030 and € 550.0 million of 5.125 % senior unsecured notes due July 2034.

See note 18, Subsequent Events, for further details.

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At-the-Market ("ATM") Program

Under our current ATM program, we may offer and sell up to 120,000,000 shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices.

Under our current ATM program, we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices.

Upon settlement, subject to certain exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which cases we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser.

As of March 31, 2023, we had 45,081,312 additional shares remaining for future issuance under our ATM program.

As of June 30, 2023, we had 24.3 million additional shares remaining for future issuance under our ATM program.

We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.

The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions):

Three months ended March 31,

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Shares of common stock issued under the ATM program (1)

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Gross proceeds $ 2,195.7 $ 1,067.3 $ 2,997.4 $ 1,727.5

Sales agents' commissions ( 5.3 ) ( 3.9 )

Other offering expenses ( 0.2 ) ( 0.1 )

Sales agents' commissions and other offering expenses ( 15.2 ) ( 10.7 ) ( 20.7 ) ( 14.8 )

Net proceeds $ 2,180.5 $ 1,056.6 $ 2,976.7 $ 1,712.7

(1) During the three months ended March 31, 2023, 25,538,809 shares were sold and 12,664,478 were settled pursuant to forward sale confirmations.

In addition, as of March 31, 2023, 19,619,215 shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial price of $ 62.59 per share.

We currently expect to fully settle forward sale agreements outstanding by June 30, 2023, representing $ 1.2 billion in net proceeds, for which the weighted average forward price at March 31, 2023 was $ 62.17 per share.

Our forward sale confirmations are accounted for as equity instruments, as we have determined the agreements meet the derivatives and hedging guidance scope exception.

No shares were sold pursuant to forward sale confirmations during the three months ended March 31, 2022.

(1) During the three and six months ended June 30, 2023, 20.7 million and 46.3 million shares were sold, respectively, and 35.5 million and 48.1 million shares were settled pursuant to forward sale confirmations, respectively.

In addition, as of June 30, 2023, 4.9 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial price of $ 59.33 per share.

We currently expect to fully settle forward sale agreements outstanding by September 30, 2023, representing $ 287.0 million in net proceeds, for which the weighted average forward price at June 30, 2023 was $ 58.72 per share.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

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Our DRSPP also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions.

Our DRSPP authorizes up to 26,000,000 common shares to be issued.

At March 31, 2023, we had 11,118,162 shares remaining for future issuance under our DRSPP program.

Our DRSPP authorizes up to 26.0 million common shares to be issued.

At June 30, 2023, we had 11.1 million shares remaining for future issuance under our DRSPP program.

The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions):

Three months ended March 31,

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Shares of common stock issued under the DRSPP program 44,118 43,260 85,781 84,631

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Noncontrolling Interests

There are four entities with noncontrolling interests that we consolidate, consisting of our operating partnership, (Realty Income, L.P.), a joint venture acquired in December 2019, and two development joint ventures ( one acquired in December 2020 and one acquired in May 2021).

The following table represents the change in the carrying value of all noncontrolling interests through March 31, 2023 (dollars in thousands):

As of June 30, 2023, we have six entities with noncontrolling interests that we consolidate, consisting of our operating partnership, (Realty Income, L.P.), a joint venture formed in 2023 in connection with the acquisition of properties, a joint venture acquired in December 2019, and three development joint ventures ( one acquired in December 2020, one acquired in May 2021, and one acquired in April 2023).

The following table represents the change in the carrying value of all noncontrolling interests through June 30, 2023 (in thousands):

Realty Income, L.P.

Noncontrolling

Interests Total

Carrying value at December 31, 2022

$ 115,801 $ 14,339 $ 130,140

Contributions (2)

— 39,559 39,559

Distributions (3)

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1,925 919 2,844

Carrying value at March 31, 2023

Carrying value at June 30, 2023

$ 114,900 $ 53,032 $ 167,932

(1) 1,795,167 units were outstanding as of March 31, 2023 and December 31, 2022.

(2) Include a non-cash reduction of noncontrolling interest of $ 1.5 million from our partner's responsibility to absorb construction cost overages for a development joint venture during the three months ended March 31, 2023.

Financial Instruments and Fair Value Measurements

(1) 1,795,167 units were outstanding as of both June 30, 2023 and December 31, 2022.

(2) Includes contributions of $ 39.2 million for the issuance of a 5.0 % joint venture interest as partial consideration paid on property acquisitions and contributions of $ 0.4 million related to a 5.0 % interest in a development joint venture.

(3) Includes a non-cash reduction of noncontrolling interest of $ 1.5 million from our partner's responsibility to absorb construction cost overages for a development joint venture during the six months ended June 30, 2023.

Fair Value Measurements

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).

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• Level 1 – Unadjusted quoted prices in active markets

Financial instruments are classified as Level 1 if their value is observable in an active market.

Fair value measurements are classified as Level 1 if their value is observable in an active market.

Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily available, and the price represents actual and regularly occurring market transactions.

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• Level 2 – Valuation Technique Using Observable Inputs

Financial instruments classified as Level 2 are valued using quoted prices for identical instruments in markets that are not considered to be active, or quoted prices for similar assets or liabilities in active markets, or valuation techniques in which all significant inputs are observable or can be corroborated by observable market data for substantially the entire contractual term of the financial asset or liability.

Fair value measurements classified as Level 2 are valued using quoted prices for identical instruments in markets that are not considered to be active, or quoted prices for similar assets or liabilities in active markets, or valuation techniques in which all significant inputs are observable or can be corroborated by observable market data for substantially the entire contractual term of the financial asset or liability.

• Level 3 – Valuation Technique Using Significant Unobservable Inputs

Financial instruments are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs).

Fair value measurements are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs).

Such inputs are generally determined based on observable inputs of a similar nature, historical observations on the level of the inputs, or other analytical techniques.

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The fair value of short-term financial instruments such as cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, accounts payable, distributions payable, line of credit payable and commercial paper borrowings, and other liabilities approximate their carrying value in the accompanying consolidated balance sheets, due to their short-term nature.

The aggregate fair value of our term loans approximates carrying value due to the frequent repricing of the variable interest rate charged on the borrowing, which is based on the daily SOFR.

The fair value of our financial instruments not carried at fair value are disclosed as follows (in millions):

March 31, 2023 Carrying value

Estimated fair value

Mortgages payable assumed in connection with acquisitions (1)

$ 842.1 $ 820.0

Notes and bonds payable (2)

$ 15,296.7 $ 13,833.5

December 31, 2022 Carrying value

Estimated fair value

Mortgages payable assumed in connection with acquisitions (1)

The aggregate fair value of our term loans approximates carrying value due to the frequent repricing of the variable interest rate charged on the borrowing.

The following table reflects the carrying amounts and estimated fair values of our financial instruments (in millions):

June 30, 2023 December 31, 2022

Carrying value

Mortgages payable (1)

$ 836.3 $ 812.5 $ 842.3 $ 810.4

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(1) Excludes non-cash net premiums recorded on the mortgages payable.

The unamortized balance of these net premiums was $ 9.2 million at March 31, 2023, and $ 12.4 million at December 31, 2022.

Also excludes deferred financing costs of $ 0.7 million at March 31, 2023, and $ 0.8 million at December 31, 2022.

(2) Excludes non-cash premiums and discounts recorded on notes payable.

The unamortized balance of the net premiums was $ 200.0 million at March 31, 2023, and $ 224.6 million at December 31, 2022.

Also excludes deferred financing costs of $ 66.3 million and basis adjustment on interest rate swaps designated as fair value hedges of $ 0.4 million at March 31, 2023, and $ 60.7 million of deferred financing costs at December 31, 2022.

The estimated fair values of our mortgages payable assumed in connection with acquisitions and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant forward interest rate curve, plus an applicable credit-adjusted spread.

The unamortized balance of these net premiums was $ 6.0 million at June 30, 2023, and $ 12.4 million at December 31, 2022.

Also excludes deferred financing costs of $ 0.7 million at June 30, 2023, and $ 0.8 million at December 31, 2022.

(2) Excludes non-cash net premiums recorded on notes payable.

The unamortized balance of the net premiums was $ 168.8 million at June 30, 2023, and $ 224.6 million at December 31, 2022.

Also excludes deferred financing costs of $ 71.8 million and basis adjustment on interest rate swaps designated as fair value hedges of $ 4.6 million at June 30, 2023, and $ 60.7 million of deferred financing costs at December 31, 2022.

The estimated fair values of our mortgages payable and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant forward interest rate curve, plus an applicable credit-adjusted spread.

Because this methodology includes unobservable inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related to our mortgages payable is categorized as level three on the three-level valuation hierarchy.

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Although we have determined that the majority of the inputs used to value our derivatives fall within level two on the three-level valuation hierarchy, the credit valuation adjustments associated with our derivatives utilize level three inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties.

However, at March 31, 2023, and December 31, 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

However, at June 30, 2023, and December 31, 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As a result, we determined that our derivative valuations in their entirety are classified as level two.

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Depending on impairment triggering events during the applicable period, impairments are typically recorded for properties sold, in the process of being sold, vacant, in bankruptcy, or experiencing difficulties with collection of rent.

The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (dollars in millions):

Three months ended March 31,

The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (in millions):

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Carrying value prior to impairment $ 97.0 $ 64.5 $ 125.5 $ 98.2

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Carrying value after impairment $ 67.2 $ 56.8 $ 82.5 $ 83.5

Derivative Designated as Hedging Instruments

The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions and purchase offers received from third parties, which are Level 3 inputs.

We may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

Estimating future cash flows is highly subjective and estimates can differ materially from actual results.

Derivative Instruments

In the normal course of business, our operations are exposed to economic risks from interest rates and foreign currency exchange rates.

We may enter into derivative financial instruments to offset these underlying economic risks.

Derivative Designated as Hedging Instruments - Cash Flow Hedges

In order to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in British Pound Sterling ("GBP") and Euro ("EUR"), we have a hedging strategy to enter into foreign currency forward contracts to sell GBP, USD, and EUR and buy EUR, USD, and GBP.

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Amounts reported in other comprehensive income related to foreign currency derivative contracts will be reclassified to other gain and (loss) in the same period during which the hedged forecasted transactions affect earnings.

To add stability to interest expense and to manage our exposure to interest rate movements associated with our 2023 term loans, we executed six one-year variable-to-fixed interest rate swaps maturing January 2024.

We designated these interest rate swaps as cash flow hedges in accordance with Topic 815, Derivatives and Hedging .

To add stability to interest expense and to manage our exposure to interest rate movements associated with our term loans, we executed variable-to-fixed interest rate swaps.

These interest rate swaps are designated as cash flow hedges.

The interest rate swaps are recorded on the consolidated balances sheets at fair value.

Changes to fair value are recorded to accumulated other comprehensive income, or AOCI, and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings.

In January 2023, we issued $ 500.0 million of 5.05 % senior unsecured notes due January 13, 2026, which are callable at par on January 13, 2024.

In conjunction with the pricing of the 2026 notes, we executed two three-year , fixed-to-variable interest rate swaps totaling $ 500.0 million, which are subject to the counterparties' right to terminate the swaps at any time following the 2026 notes par call date.

We designated these interest rate swaps as fair value hedges in accordance with Topic 815, Derivatives and Hedging .

These interest rate swaps are recorded on the consolidated balances sheets at fair value, with changes in fair value recognized in earnings.

The carrying value of the hedged item on the balance sheet is adjusted through earnings by the equal and offsetting amount of the change in fair value of the swaps.

For the three months ended March 31, 2023, such adjustments decreased the carrying value of notes payable by $ 0.4 million.

Interest accruals on the swaps are recorded as adjustments to interest expense on the hedged item.

In March 2023, we entered into six interest rate swaption agreements to mitigate the impact of fluctuating interest rates, structured as a swaption corridor, in anticipation of issuing USD denominated bonds.

Interest rate swaption corridors are a combination of two swaption positions, whereby we purchase a payer swaption, which is an option that allows us to enter into a swap where we will pay the fixed rate and receive the floating rate of the swap, and sell a swaption, which is an option that provides the counterparty with the right to enter into a swap where we will receive the fixed rate and pay the floating rate of the swap.

To mitigate the impact of fluctuating interest rates, we have also entered into interest rate swaption agreements, structured as a swaption corridor, in anticipation of issuing USD denominated bonds.

Interest rate swaption corridors are a combination of two swaption positions, whereby we purchase a payer swaption, which is an option that allows us to enter into a swap where we will pay the fixed rate and receive the floating rate of the swap, and sell a payer swaption, which is an option that provides the counterparty with the right to enter into a swap where we will receive the fixed rate and pay the floating rate of the swap.

For the swaption corridor entered into during March 2023, the combination of purchasing the payer swaption and selling the swaption resulted in a premium being paid of $ 7.6 million.

We designated the swaptions as qualifying hedging instruments and accounted for these derivatives as cash flow hedges.

The interest rate swaptions are designated as cash flow hedges.

Changes in fair value of the swaptions have been recorded in AOCI.

Derivative Designated as Hedging Instruments - Fair Value Hedges

Periodically, we enter into and designate fixed-to-floating interest rate swaps as fair value hedges.

The purpose of these swaps is to manage interest rate risk by managing our mix of fixed-rate and variable-rate debt.

These swaps involve the receipt of fixed-rate amounts for variable interest rate payments over the life of the swaps without exchange of the underlying principal amount.

We also designate some of our cross-currency swaps as fair value hedges.

The purpose of these contracts is to hedge foreign currency risk associated with changes in spot rates on foreign-denominated debt.

For these hedges, we have elected to exclude the change in fair value of the cross-currency swaps related to both time value and cross-currency basis spread from the assessment of hedge effectiveness (the "excluded component").

Changes in the fair value of the cross-currency swaps attributable to changes in the spot rates on the final notional exchanges and changes in the value of the hedged assets due to changes in the spot rates are recorded in 'Foreign currency

and derivative (loss) gain, net'.

Changes in the fair value of the cross-currency swaps attributable to the excluded components are recorded to Other comprehensive income and will be recognized in Foreign currency and derivative (loss) gain, net on a systematic and rational basis, as net cash settlements and interest accruals on the respective cross currency swaps occur, over the remaining life of the hedging instruments.

Derivatives Not Designated as Hedging Instruments

We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP and EUR.

These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes.

As the currency exchange swap is not accounted for as a hedging instrument, the change in fair value is recorded in earnings through the caption entitled 'Foreign currency and derivative (loss) gain, net' in the consolidated statements of income and comprehensive income.

The following table summarizes the terms and fair values of our derivative financial instruments at June 30, 2023 and December 31, 2022 (dollars in millions):

Derivative Type

Number of Instruments (1)

Notional Amount as of

Weighted Average Strike Rate (2)

Maturity Date (3)

Fair Value - asset (liability) as of

Derivatives Designated as Hedging Instruments June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

Interest rate swaps

9 $ 1,630.0 $ 250.0 4.26 % Jan 2024 - Jan 2026 $ 6.4 $ 5.6

Interest rate swaptions 6 1,000.0 — (4) Feb 2034 8.8 —

Cross-currency swaps

3 320.0 320.0 (5) Oct 2032 ( 45.6 ) ( 33.3 )

Foreign currency forwards 24 144.0 185.5 (6) Jul 2023 - Dec 2024 6.9 16.1

$ 3,094.0 $ 755.5 $ ( 23.5 ) $ ( 11.6 )

Derivatives not Designated as Hedging Instruments

Currency exchange swaps

1 $ 214.9 $ 2,427.7 (7) July 2023 $ 3.5 $ 58.8

Cross-currency swaps 3 280.0 280.0 (5) Oct 2032 ( 40.3 ) ( 29.5 )

$ 494.9 $ 2,707.7 $ ( 36.8 ) $ 29.3

Total of all Derivatives $ 3,588.9 $ 3,463.2 $ ( 60.3 ) $ 17.7

(1) This column represents the number of instruments outstanding as of June 30, 2023.

(2) Weighted average strike rate is calculated using the notional value as of June 30, 2023.

(3) This column represents maturity dates for instruments outstanding as of June 30, 2023.

(4) Represent purchased payer swaptions with a strike rate of 3.75 % and a sold payer swaptions with a strike rate of 4.25 %.

(5) USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.697 %.

(6) Weighted average forward GBP-USD exchange rate of 1.34 .

(7) Weighted average EUR-USD exchange rate of 1.07 .

We measure our derivatives at fair value and include the balances within other assets and accounts payable as well as accrued expenses on our consolidated balance sheets.

We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default.

The following table summarizes the amount of unrecognized gain (loss) on derivatives in other comprehensive income (in thousands):

Three months ended March 31,

Three months ended

June 30, Six months ended

Derivatives in Cash Flow Hedging Relationships 2023 2022 2023 2022

Currency swaps $ — $ 1,895

Cross-currency swaps $ — $ ( 6,986 ) $ — $ ( 5,091 )

Interest rate swaps 3,564 30,386 1,844 69,391

Foreign currency forwards ( 4,081 ) 10,054 ( 9,194 ) 12,844

Interest rate swaption ( 1,287 ) —

Interest rate swaptions 4,840 — 3,553 —

Total derivatives in cash flow hedging relationships $ 4,323 $ 33,454 $ ( 3,797 ) $ 77,144

Derivatives in Fair Value Hedging Relationships

Currency swaps $ 5,958 $ —

Cross-currency swaps $ ( 10,733 ) $ — $ ( 4,775 ) $ —

Total derivatives in fair value hedging relationships $ ( 10,733 ) $ — $ ( 4,775 ) $ —

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The following table summarizes the amount of gain (loss) on derivatives reclassified from AOCI (in thousands):

Three months ended March 31,

Three months ended

June 30, Six months ended

Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income 2023 2022 2023 2022

Currency swaps Foreign currency and derivative gain (loss), net $ — $ 6,114

Interest rate swaps Interest expense 1,480 ( 2,530 )

Cross-currency swaps Foreign currency and derivative gain (loss), net $ — $ 21,527 $ — $ 27,641

Interest rate swaps Interest income 3,259 ( 2,153 ) 4,739 ( 4,683 )

Foreign currency forwards Foreign currency and derivative gain (loss), net 892 — 2,323 —

Interest rate swaptions Interest expense ( 2,358 ) — ( 2,358 ) —

Total derivatives in cash flow hedging relationships $ 1,793 $ 19,374 $ 4,704 $ 22,958

Derivatives in Fair Value Hedging Relationships

Currency swaps Foreign currency and derivative gain (loss), net $ 294 $ —

Cross-currency swaps Foreign currency and derivative gain (loss), net $ 190 $ — $ 484 $ —

Total derivatives in fair value hedging relationships $ 190 $ — $ 484 $ —

Net increase to net income $ 1,983 $ 19,374 $ 5,188 $ 22,958

We expect to reclassify $ 12.8 million from AOCI as a decrease to interest expense relating to interest rate swaps and $ 7.9 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months.

Derivatives Not Designated as Hedging Instruments

We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP and EUR.

These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes.

As the currency exchange swap is not accounted for as a hedging instrument, the change in fair value is recorded in earnings through the caption entitled 'Foreign currency and derivative gain (loss), net' in the consolidated statements of income and comprehensive income.

We expect to reclassify $ 18.2 million from AOCI as a decrease to interest expense relating to interest rate swaps and interest rate swaption and $ 6.6 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months.

The following table details our foreign currency and derivative gains (losses), net included in income (in thousands):

Three months ended March 31,

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Realized foreign currency and derivative gain (loss), net:

Loss on the settlement of undesignated derivatives $ ( 345 ) $ ( 2,681 )

(Loss) gain on the settlement of undesignated derivatives $ ( 981 ) $ 79,308 $ ( 1,326 ) $ 76,628

Gain on the settlement of designated derivatives reclassified from AOCI 1,082 21,527 2,807 27,641

Gain (loss) on the settlement of transactions with third parties 1,326 ( 52 )

(Loss) gain on the settlement of transactions with third parties ( 51 ) 1,004 1,275 952

Total realized foreign currency and derivative gain, net $ 50 $ 101,839 $ 2,756 $ 105,221

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Gain (loss) on remeasurement of certain assets and liabilities 4,792 ( 131,633 ) 13,190 ( 158,326 )

Total unrealized foreign currency and derivative gain (loss), net $ 7,616 $ ( 3,971 )

Total foreign currency and derivative gains (losses), net

$ 10,322 $ ( 590 )

The following table summarizes the terms and fair values of our derivative financial instruments at March 31, 2023 and December 31, 2022 (dollars in millions):

Derivative Type

Number of Instruments (1)

Accounting Classification Notional Amount as of

Weighted Average Strike Rate (2)

Maturity Date (3)

Fair Value - asset (liability) as of

Derivatives Designated as Hedging Instruments March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

Interest rate swaps

9 Derivative $ 1,630.0 $ 250.0 4.26 % Jan 2024 - Jan 2026 $ 5.3 $ 5.6

Interest rate swaptions 6 Derivative 1,000.0 — (4) Feb 2034 6.3 —

Cross-currency swaps

3 Derivative 320.0 320.0 (5) Oct 2032 ( 33.1 ) ( 33.3 )

Foreign currency forwards 24 Derivative 155.9 185.5 (6) Apr 2023 - Aug 2024 11.0 16.1

$ 3,105.9 $ 755.5 $ ( 10.5 ) $ ( 11.6 )

Derivatives not Designated as Hedging Instruments

Currency exchange swaps (7)

2 Derivative $ 475.9 $ 2,427.7 (8) April 2023 $ ( 1.1 ) $ 58.8

Cross-currency swaps 3 Derivative 280.0 280.0 (5) Oct 2032 ( 29.3 ) ( 29.5 )

$ 755.9 $ 2,707.7 $ ( 30.4 ) $ 29.3

Total of all Derivatives $ 3,861.8 $ 3,463.2 $ ( 40.9 ) $ 17.7

(1) This column represents the number of instruments outstanding as of March 31, 2023.

(2) Weighted average strike rate is calculated using the notional value as of March 31, 2023.

(3) This column represents maturity dates for instruments outstanding as of March 31, 2023.

(4) Represent purchase swaptions with a strike rate of 3.75 % and a sold swaption with a strike rate of 4.25 %.

(5) USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.697 %.

(6) Weighted average forward GBP-USD exchange rate of 1.35 .

(7) Represent one GBP currency exchange swap with a notional amount of $ 61.6 million and one EUR currency exchange swap with an associated notional amount of $ 414.3 million as of March 31, 2023.

(8) Weighted average EUR-USD exchange rate of 1.09 and GBP-USD exchange rate of 1.23 .

We measure our derivatives at fair value and include the balances within other assets and accounts payable as well as accrued expenses on our consolidated balance sheets.

Total unrealized foreign currency and derivative (loss) gain, net $ ( 2,602 ) $ ( 94,359 ) $ 5,014 $ ( 98,331 )

Total foreign currency and derivative (losses) gains, net $ ( 2,552 ) $ 7,480 $ 7,770 $ 6,890

Lessor Operating Leases

At March 31, 2023, we owned or held interests in 12,492 properties.

At June 30, 2023, we owned or held interests in 13,118 properties.

Of the 13,118 properties, 12,882 , or 98.2 %, are single-client properties, and the remaining are multi-client properties.

At March 31, 2023, 131 properties were available for lease or sale.

At June 30, 2023, 137 properties were available for lease or sale.

The majority of our leases are accounted for as operating leases.

Substantially all of our leases are net leases where our client pays or reimburses us for property taxes and assessments, maintains the interior and exterior of the building and leased premises, and carries insurance coverage for public liability, property damage, fire and extended coverage.

Rent based on a percentage of our client's gross sales, or percentage rent, for the three months ended March 31, 2023, and 2022 was $ 4.1 million, and $ 3.7 million, respectively.

Major Clients - No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the three months ended March 31, 2023, and 2022.

Substantially all of our leases are net leases where our client pays or reimburses us for property taxes and assessments and carries insurance coverage for public liability, property damage, fire and extended coverage.

Rent based on a percentage of our client's gross sales, or percentage rent, for the three months ended June 30, 2023, and 2022 was $ 1.7 million, and $ 2.2 million, respectively.

Percentage rent for the six months ended June 30, 2023, and 2022 was $ 5.8 million, and $ 6.0 million, respectively.

Distributions Paid and Payable

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The following is a summary of monthly distributions paid per common share for the periods indicated below:

Three months ended March 31,

January $ 0.2485 $ 0.2465

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March 0.2545 0.2465

April 0.2550 0.2470

May 0.2550 0.2470

June 0.2550 0.2470

$ 1.5165 $ 1.4805

At March 31, 2023, a distribution of $ 0.2550 per common share was payable and was paid in April 2023.

At June 30, 2023, a distribution of $ 0.2555 per common share was payable and was paid in July 2023.

Net Income per Common Share

1 unchanged sentence

Diluted net income per common share is computed by dividing net income available to common stockholders, plus income attributable to dilutive shares and convertible common units for the period, by the weighted average number of common shares that would have been outstanding assuming the issuance of common shares for all potentially dilutive common shares outstanding during the reporting period.

The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation:

Three months ended March 31,

The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation (shares in thousands):

Three months ended

June 30, Six months ended

2023 2022 2023 2022

Weighted average shares used for the basic net income per share computation

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Supplemental Disclosures of Cash Flow Information

The following table summarizes our supplemental cash flow information during the periods indicated below (dollars in thousands):

Three months ended March 31,

The following table summarizes our supplemental cash flow information during the periods indicated below (in thousands):

Six months ended

Supplemental disclosures:

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Net (decrease) increase in fair value of derivatives $ ( 77,982 ) $ 146,181

The following table provides a reconciliation of cash and cash equivalents reported within the consolidated balance sheets to the total of the cash, cash equivalents and restricted cash reported within the consolidated statements of cash flows (dollars in thousands):

March 31, 2023 March 31, 2022

Increase in noncontrolling interests from property acquisitions $ 39,156 $ —

Mortgages assumed at fair value $ — $ 45,079

June 30, 2023 June 30, 2022

Cash and cash equivalents shown in the consolidated balance sheets $ 253,693 $ 172,849

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This note should be read in conjunction with the more complete discussion of our 2021 Plan included in note 17 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

The amount of share-based compensation costs recognized in 'General and administrative' in the consolidated statements of income and comprehensive income was $ 6.3 million and $ 5.0 million during the three months ended March 31, 2023, and 2022, respectively.

The amount of share-based compensation costs recognized in 'General and administrative' in the consolidated statements of income and comprehensive income was $ 7.6 million and $ 6.6 million during the three months ended

June 30, 2023, and 2022, respectively, and $ 13.9 million and $ 11.6 million during the six months ended June 30, 2023 and 2022, respectively.

Restricted Stock and Restricted Stock Units

During the three months ended March 31, 2023, we granted 170,241 shares of common stock under the 2021 Plan.

During the six months ended June 30, 2023, we granted 219,951 shares of common stock under the 2021 Plan.

This included 40,000 total shares of restricted stock granted to the independent members of our Board of Directors in connection with our annual awards in May 2023, 20,000 shares of which vested immediately and 20,000 shares of which vest in equal parts over a three-year service period.

Our restricted stock awards granted to employees vest over a service period not exceeding four-years .

During the three months ended March 31, 2023, we also granted 13,375 restricted stock units, all of which vest over a four-year service period.

As of March 31, 2023, the remaining unamortized share-based compensation expense related to restricted stock awards and units totaled $ 23.0 million, which is being amortized on a straight-line basis over the service period of each applicable award.

During the six months ended June 30, 2023, we also granted 14,876 restricted stock units, all of which vest over a four-year service period.

As of June 30, 2023, the remaining unamortized share-based compensation expense related to restricted stock awards and units totaled $ 21.7 million, which is being amortized on a straight-line basis over the service period of each applicable award.

The amount of share-based compensation is based on the fair value of the stock at the grant date.

We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares.

Performance Shares

During the three months ended March 31, 2023, we granted 193,868 performance shares, as well as dividend equivalent rights, to our executive officers.

During the six months ended June 30, 2023, we granted 193,868 performance shares, as well as dividend equivalent rights, to our executive officers.

The performance shares are earned based on our Total Shareholder Return (TSR) performance relative to select industry indices and peer groups as well as achievement of certain operating metrics, and vest 50 % on the first and second January 1 after the end of the three-year performance period, subject to continued service.

As of March 31, 2023, the remaining share-based compensation expense related to the performance shares totaled $ 27.7 million.

As of June 30, 2023, the remaining share-based compensation expense related to the performance shares totaled $ 24.3 million.

The performance shares are being recognized on a tranche-by-tranche basis over the service period.

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We believe that the outcome of the proceedings will not have a material adverse effect upon our consolidated financial position or results of operations.

At March 31, 2023, we had commitments of $ 14.9 million, which primarily relate to re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of March 31, 2023, we had committed $ 509.5 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between April 2023 and August 2024.

At June 30, 2023, we had commitments of $ 15.2 million, which primarily relate to re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of June 30, 2023, we had committed $ 764.9 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between July 2023 and July 2024.

Subsequent Events

In April 2023, we declared a dividend of $ 0.2550 per share to our common stockholders, which will be paid in May 2023.

In July 2023, we declared a dividend of $ 0.2555 per share to our common stockholders, which will be paid in August 2023.

ATM Forward Offerings

As of May 4, 2023, ATM forward agreements for a total of 23.4 million shares remain unsettled with total expected net proceeds of approximately $ 1.5 billion of which 3.8 million shares were executed in April 2023.

As of August 3, 2023, ATM forward agreements for a total of 11.0 million shares remain unsettled with total expected net proceeds of approximately $ 651.4 million of which 6.1 million shares were executed in July 2023.

Notes Issuance

In April 2023, we issued $ 400.0 million of 4.70 % senior unsecured notes due December 2028 (the "2028 Notes") and $ 600.0 million of 4.90 % senior unsecured notes due July 2033 (the "2033 Notes").

The public offering price for the 2028 Notes was 98.949 % of the principal amount for an effective semi-annual yield to maturity of 4.912 % and the public offering price for the 2033 Notes was 98.020 % of the principal amount for an effective semi-annual yield to maturity of 5.148 %.

In July 2023, we issued € 550.0 million of 4.875 % senior unsecured notes due July 2030 (the “2030 Notes”), and € 550.0 million of 5.125 % senior unsecured notes due July 2034 (the “2034 Notes”).

The public offering price for the 2030 Notes was 99.421 % of the principal amount for an effective annual yield to maturity of 4.975 %, and the public offering price for the 2034 Notes was 99.506 % of the principal amount for an effective annual yield to maturity of 5.185 %.

Interest on the 2030 Notes and the 2034 Notes is paid annually.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements