What changed in this filing

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Item 1. Financial Statements

2024-11-05 compared with 2024-08-06 · 289 added, 245 removed, 874 unchanged (38% of the section changed)

3 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Real estate held for investment, at cost:

23 unchanged sentences

Commitments and contingencies (note 20)

6.000 % Series A cumulative redeemable preferred stock and paid in capital, par value $ 0.01 per share, 69,900 shares authorized, 6,900 shares and no shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively, liquidation preference $ 25.00 per share

$ 167,394 $ —

Stockholders’ equity:

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000 shares authorized, 870,848 and 752,460 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000 shares authorized, 875,197 and 752,460 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

$ 46,505,688 $ 39,629,709

9 unchanged sentences

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

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

2024 2023 2024 2023

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Provisions for impairment 96,920 16,808 282,867 59,801

Merger and integration-related costs 2,754 341 96,858 1,648

Merger, transaction, and other costs 8,610 2,884 105,468 4,532

Total expenses 1,103,153 805,885 3,335,261 2,347,366

Gain on sales of real estate 50,563 7,572 92,290 19,675

Foreign currency and derivative gain (loss), net 511 ( 2,552 ) 4,557 7,770

Foreign currency and derivative (loss) gain, net ( 1,672 ) ( 2,813 ) 2,885 4,957

Equity in earnings of unconsolidated entities 5,087 — 5,440 411

6 unchanged sentences

Preferred stock dividends ( 2,588 ) — ( 7,763 ) —

Excess of redemption value over carrying value of preferred shares redeemed ( 5,116 ) — ( 5,116 ) —

Net income available to common stockholders $ 261,781 $ 233,473 $ 648,281 $ 653,904

Amounts available to common stockholders per common share:

Basic $ 0.30 $ 0.29 $ 0.45 $ 0.63

Diluted $ 0.29 $ 0.29 $ 0.45 $ 0.63

Net income, basic and diluted $ 0.30 $ 0.33 $ 0.75 $ 0.96

Weighted average common shares outstanding:

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Net income available to common stockholders $ 261,781 $ 233,473 $ 648,281 $ 653,904

Total other comprehensive income

Total other comprehensive income (loss)

Foreign currency translation adjustment 74,615 ( 61,401 ) 59,797 ( 3,605 )

Unrealized gain (loss) on derivatives, net 7,324 ( 6,410 ) 16,246 ( 8,572 )

Total other comprehensive income $ 10,542 $ 22,636 $ 1,428 $ 49,224

Unrealized (loss) gain on derivatives, net ( 46,474 ) 7,193 ( 30,228 ) ( 1,379 )

Total other comprehensive income (loss) $ 28,141 $ ( 54,208 ) $ 29,569 $ ( 4,984 )

Comprehensive income available to common stockholders $ 289,922 $ 179,265 $ 677,850 $ 648,920

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(in thousands) (unaudited)

Three months ended June 30, 2024, and 2023

Three months ended September 30, 2024, and 2023

stock Preferred

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interests Total

Balance, March 31, 2024

Balance, June 30, 2024

6,900 $ 167,394 870,848 $ 46,230,789 $ ( 7,724,318 ) $ 75,322 $ 38,581,793 $ 165,277 $ 38,747,070

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Contributions by noncontrolling interests — — — — — — — 489 489

Issuance of common partnership units — — — ( 768 ) — — ( 768 ) 47,253 46,485

Preferred shares redeemed ( 6,900 ) ( 167,394 ) — — ( 5,116 ) — ( 5,116 ) — ( 5,116 )

Share-based compensation, net

— — ( 5 ) 6,395 — — 6,395 — 6,395

Balance, June 30, 2024

Balance, September 30, 2024

— $ — 875,197 $ 46,505,688 $ ( 8,151,359 ) $ 103,463 $ 38,457,792 $ 211,918 $ 38,669,710

Balance, March 31, 2023

Balance, June 30, 2023

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

Net income — — — — 233,473 — 233,473 404 233,877

Other comprehensive income — — — — — 22,636 22,636 — 22,636

Other comprehensive loss — — — — — ( 54,208 ) ( 54,208 ) — ( 54,208 )

Distributions paid and payable — — — — ( 547,781 ) — ( 547,781 ) ( 2,497 ) ( 550,278 )

2 unchanged sentences

Share-based compensation, net — — ( 1 ) 6,196 — — 6,196 — 6,196

Balance, June 30, 2023

Balance, September 30, 2023

— $ — 723,894 $ 38,031,829 $ ( 6,416,534 ) $ 41,849 $ 31,657,144 $ 166,274 $ 31,823,418

Six months ended June 30, 2024 and 2023

Nine months ended September 30, 2024 and 2023

stock Preferred

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Contributions by noncontrolling interests — — — — — — — 1,770 1,770

Issuance of common partnership units — — — ( 768 ) — — ( 768 ) 47,253 46,485

Preferred shares redeemed ( 6,900 ) ( 167,394 ) — — ( 5,116 ) — ( 5,116 ) — ( 5,116 )

Share-based compensation, net — — 356 14,382 — — 14,382 — 14,382

Balance, June 30, 2024

Balance, September 30, 2024

— $ — 875,197 $ 46,505,688 $ ( 8,151,359 ) $ 103,463 $ 38,457,792 $ 211,918 $ 38,669,710

1 unchanged sentence

Net income — — — — 653,904 — 653,904 3,248 657,152

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

Other comprehensive loss — — — — — ( 4,984 ) ( 4,984 ) — ( 4,984 )

Distributions paid and payable — — — — ( 1,577,245 ) — ( 1,577,245 ) ( 7,108 ) ( 1,584,353 )

2 unchanged sentences

Share-based compensation, net — — 246 13,973 — — 13,973 — 13,973

Balance, June 30, 2023

Balance, September 30, 2023

— $ — 723,894 $ 38,031,829 $ ( 6,416,534 ) $ 41,849 $ 31,657,144 $ 166,274 $ 31,823,418

3 unchanged sentences

(in thousands) (unaudited)

Six months ended June 30,

Nine months ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Amortization of deferred financing costs 17,694 19,498

Foreign currency and unrealized derivative gain, net ( 5,104 ) ( 6,289 )

Foreign currency and unrealized derivative (gain) loss, net ( 33,582 ) 10,188

Non-cash interest expense (income) 9,179 ( 5,390 )

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Proceeds from dividend reinvestment and stock purchase plan 8,814 8,382

Redemption of preferred stock ( 172,510 ) —

Distributions to noncontrolling interests ( 7,185 ) ( 5,585 )

Net payments on derivative settlements — ( 9,285 )

Net receipts on derivative settlements — 2,191

Debt issuance costs ( 59,285 ) ( 35,014 )

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

September 30, 2024

Summary of Significant Accounting Policies

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The Company was founded in 1969 and our shares of common stock trade on the New York Stock Exchange ("NYSE") under the symbol “O”.

As of June 30, 2024, we owned or held interests in a diversified portfolio of 15,450 properties located in all 50 states of the United States ("U.S."), the United Kingdom ("U.K."), and six other countries in Europe, with approximately 335.3 million square feet of leasable space.

As of September 30, 2024, we owned or held interests in a diversified portfolio of 15,457 properties located in all 50 states of the United States ("U.S."), the United Kingdom ("U.K."), and six other countries in Europe, with approximately 336.6 million square feet of leasable space.

In January 2024, we completed our merger with Spirit Realty Capital, Inc.

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When the debt is remeasured to the functional currency of the entity, a gain or loss can result.

The resulting adjustment is reflected in 'Foreign currency and derivative gain (loss), net' in our consolidated statements of income and comprehensive income.

The resulting adjustment is reflected in 'Foreign currency and derivative (loss) gain, net' in our consolidated statements of income and comprehensive income.

In the statement of cash flows, cash flows denominated in foreign currencies are translated using the exchange rates in effect at the time of the respective cash flows or at average exchange rates for the period, depending on the nature of the cash flow items.

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 and six months ended June 30, 2024 are not necessarily an indication of the results that may be expected for the entire year.

Operating results for the three and nine months ended September 30, 2024 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, 2023, which are included in our 2023 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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Variable interest entities ("VIEs") are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above.

A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

An entity that meets both conditions above is deemed the primary beneficiary and

consolidates the VIE.

be significant to the VIE.

An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE.

We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur.

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

At June 30, 2024, we are considered the primary beneficiary of Realty Income, L.P.

At September 30, 2024, we are considered the primary beneficiary of Realty Income, L.P.

and certain investments, including investments in joint ventures.

Below is a summary of selected financial data of such consolidated VIEs, included on our consolidated balance sheets at June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024 December 31, 2023

Below is a summary of selected financial data of such consolidated VIEs, included on our consolidated balance sheets at September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

Net real estate

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Taxes and operating expenses paid directly by our clients are recorded on a net basis.

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.

Other revenue includes certain property-related revenue not included in rental revenue and interest income recognized on financing receivables for above-market leases acquired through sale-leaseback transactions.

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 ASC 842, Leases .

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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.

Loans Receivable .

We hold our loans receivable for long-term investment.

We recognize interest income on loans receivable using the effective-interest method.

Direct costs associated with originating loans, along with any premium or discount, are deferred and amortized as an adjustment to interest income over the term of the loan using the effective interest method.

When management identifies the full recovery of the contractually specified payments of principal and interest of a loan is less than probable, we evaluate the expected loss amount and place it on non-accrual status.

We made the accounting policy election to record accrued interest on our loan portfolio separate from our loan receivable and other lending investments.

These loans and the related interest receivable are presented in 'Other assets, net' on our consolidated balance sheets.

Financing Receivables.

For properties we acquire that qualify as sale-leaseback transactions and the purchase price is in excess of the fair value of the real estate acquired, the difference is accounted for as financing receivables, presented within 'Other assets, net' on our consolidated balance sheets.

Rent payments are allocated between rental income and the financing receivable.

Interest income on the financing receivable is recognized using the interest rate implicit in the leaseback and presented within 'Other' revenue in our consolidated statement of income and comprehensive income.

Allowance for Credit Losses .

The allowance for credit losses, which is recorded as a reduction to loans receivable and financing receivable within 'Other assets, net' on our consolidated balance sheets, is measured using a probability of default method based on our clients' respective credit ratings and the expected value of the underlying collateral upon its repossession.

The allowance for credit losses, which is recorded as a reduction to loans receivable and financing receivable within 'Other assets, net' on our consolidated balance sheets, is measured using a probability of default method based on our clients' respective credit ratings, our historical experience, and the expected value of the underlying collateral upon its repossession.

If we determine a financing receivable no longer shares risk characteristics with other financing receivables in the pool, we evaluate the financing receivable for expected credit losses on an individual basis.

Included in our model are factors that incorporate forward-looking information.

Allowance for credit losses is presented in 'Provisions for impairment' in our consolidated statements of income and comprehensive income.

During the three and six months ended June 30, 2024, we recognized a provision for credit losses of $ 9.3 million and $ 10.5 million, respectively.

The amount recognized during the six months ended June 30, 2024 is comprised of increases of $ 4.6 million in allowances on loans receivable and $ 5.9 million in allowances on financing receivables.

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, 2024 and 2023, there were no impairments of goodwill.

Changes in our allowance for credit losses are presented in 'Provisions for impairment' in our consolidated statements of income and comprehensive income.

The following summarizes the activity within the allowance for credit losses related to loans and financing receivable for the nine months ended September 30, 2024 (in millions):

Loans Receivable Financing Receivable Total

Allowance for credit losses at December 31, 2023

$ 2.5 $ 2.4 $ 4.9

Provision for credit losses (1)

4.5 69.8 74.3

Initial allowance for PCD assets (2)

Write-offs (3)

( 1.8 ) — ( 1.8 )

Foreign currency remeasurement 0.4 — 0.4

Allowance for credit losses at September 30, 2024

$ 7.4 $ 72.2 $ 79.6

(1) During the nine months ended September 30, 2024, provisions for credit losses on loans receivable were primarily attributable to loans acquired during 2024.

The increase in provision for credit losses on financing receivables is primarily due to a client in the convenience store industry that has defaulted on their lease payments and was fully reserved for as of September 30, 2024.

(2) Includes the recognition of an initial expected credit loss of $ 1.8 million for a purchased credit deteriorated ("PCD") loan we acquired in conjunction with our merger with Spirit.

(3) Includes a reduction due to the sale of a PCD loan in September 2024.

Merger, Transaction, and Other Costs.

Merger, transaction, and other costs include (i) merger-related transaction costs, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to a merger, (ii) organization costs for potential strategic ventures and business lines, (iii) corporate facilities lease termination costs, and (iv) other costs that do not align with the ongoing operations of our business.

During the three and nine months ended September 30, 2024, we incurred $ 8.6 million and $ 105.5 million, respectively, of merger, transaction, and other costs consisting primarily of $ 2.9 million and $ 99.8 million, respectively, of transaction and integration-related costs related to Spirit and $ 5.1 million for each of the respective periods related to the lease termination of a legacy corporate facility.

Recent Accounting Standards Not Yet Adopted.

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Pursuant to the terms and subject to the conditions of the Merger Agreement, Spirit merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Merger”).

At the effective time of the Merger (the “Effective Time”), (i) each outstanding share of Spirit common stock, par value $ 0.05 per share, automatically converted into 0.762 (the “Exchange Ratio”) of a newly issued share of our common stock, subject to adjustments as set forth in the Merger Agreement, and cash in lieu of fractional shares, and (ii) each outstanding share of Spirit’s 6.000 % Series A Cumulative Redeemable Preferred Stock, par value $ 0.01 per share, converted into the right to receive one share of newly issued Realty Income 6.000 % Series A Cumulative Redeemable Preferred Stock, having substantially the same terms as the Spirit Series A Preferred Stock.

At the effective time of the Merger (the “Effective Time”), (i) each outstanding share of Spirit common stock, par value $ 0.05 per share, automatically converted into 0.762 (the “Exchange Ratio”) of a newly issued share of our common stock, subject to adjustments as set forth in the Merger Agreement, and cash in lieu of fractional shares, and (ii) each outstanding share of Spirit’s 6.000 % Series A Cumulative Redeemable Preferred Stock, par value $ 0.01 per share, converted into the right to receive one share of newly issued Realty Income 6.000 % Series A Cumulative Redeemable Preferred Stock (“Realty Income Series A preferred stock”), having substantially the same terms as the Spirit Series A Preferred Stock.

Immediately prior to the Effective Time, each award of outstanding restricted Spirit common stock and Spirit performance share award was cancelled and converted into Realty Income common stock, using the Exchange Ratio.

For more details, see note 16, Redeemable Preferred Stock.

For more details, see note 16, Series A Preferred Stock.

The primary reason for the merger was to expand our size, scale and diversification, in order to further position us as the real estate partner of choice for large net lease transactions.

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March 31, 2024 Measurement Period Adjustments At Acquisition Date As Reported

June 30, 2024

September 30, 2024

Land $ 1,853,895 $ 3,247 $ 1,857,142

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(3) The weighted average amortization period for acquired lease intangible liabilities is 8.2 years.

The assessment of fair value is preliminary and is based on information that was available to management at the time the consolidated financial statements were prepared.

Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date.

As of June 30, 2024, we had not finalized the determination of fair values allocated to certain assets and liabilities.

The assessment of fair value is considered preliminary and is based on a valuation prepared by the Company with assistance of a third-party valuation specialist.

We are in the process of finalizing our review of the inputs used in the valuation to ensure accuracy and procedures are performed within our policy.

Accordingly, certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, loss contingencies, and goodwill are subject to change.

The finalization of our purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed up to a year after the date of our merger with Spirit, which could be material.

We expect to complete our purchase accounting assessment in the fourth quarter of 2024.

Measurement period adjustments are recorded in the period in which they are determined, as if they had been completed at the acquisition date.

The measurement period adjustments recorded in the nine months ended September 30, 2024 resulted from updated valuations related to real estate assets and liabilities, in addition to loans receivable.

The adjustments were determined based on additional information that existed at the acquisition date but was not contemplated in our initial fair value assessment and resulted in a decrease to goodwill of $ 59.1 million.

A preliminary estimate of approximately $ 1.20 billion has been allocated to goodwill.

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None of the goodwill recognized is expected to be deductible for tax purposes.

The measurement period adjustments recorded in the three months ended June 30, 2024 resulted from updated valuations related to real estate assets and liabilities, in addition to loans receivable.

Merger and Integration-Related Costs

In conjunction with our merger with Spirit, we incurred $ 2.8 million and $ 96.9 million of merger-related transaction costs during the three and six months ended June 30, 2024, respectively, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger.

Merger, transaction, and other costs

In conjunction with our merger with Spirit, we incurred $ 2.9 million and $ 99.8 million of merger-related transaction costs during the three and nine months ended September 30, 2024, respectively, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger.

Unaudited Pro Forma Financial Information

The following unaudited pro forma information presents a summary of our combined results of operations for the three and six months ended June 30, 2024 and 2023, respectively, as if our merger with Spirit had occurred on January 1, 2023 (in millions, except per share data).

The following unaudited pro forma information presents a summary of our combined results of operations for the nine months ended September 30, 2024 and three and nine months ended September 30, 2023, respectively, as if our merger with Spirit had occurred on January 1, 2023 (in millions, except per share data).

The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2023 2024 2023

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Net income $ 250.5 $ 759.4 $ 673.3

Basic earnings per share $ 0.30 $ 0.28 $ 0.58 $ 0.54

Diluted earnings per share $ 0.29 $ 0.28 $ 0.58 $ 0.54

Our consolidated results of operations for the three and six months ended June 30, 2024 include $ 206.8 million and $ 361.8 million of revenues, respectively, and $ 56.1 million and $ 63.0 million of net income, respectively, associated with the results of operations of Spirit from the merger closing date of January 23, 2024 to June 30, 2024.

Basic and diluted earnings per share $ 0.31 $ 0.88 $ 0.85

Our consolidated results of operations for the three and nine months ended September 30, 2024 include $ 202.8 million and $ 563.8 million of revenues, respectively, and $ 40.2 million and $ 96.0 million of net income, respectively, associated with the results of operations of Spirit from the merger closing date of January 23, 2024 to September 30, 2024.

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

Accounts receivable, net, consist of the following at:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Straight-line rent receivables, net $ 662,569 $ 516,692

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

In-place leases

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Other assets, net, consist of the following at:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Financing receivables, net $ 1,500,862 $ 1,570,943

Right of use asset - financing leases 694,253 706,837

Right of use asset - financing leases, net 671,831 706,837

Right of use asset - operating leases, net 624,939 594,712

Loan receivable, net 622,593 205,339

Value-added tax receivable 77,936 100,672

Prepaid expenses 58,520 33,252

Derivative assets and receivables - at fair value 52,195 21,170

Value-added tax receivable 49,412 100,672

Non-refundable escrow deposits 38,750 200

Restricted escrow deposits 37,317 6,247

Corporate assets, net 14,226 12,948

Interest receivable 25,712 6,139

Derivative assets and receivables - at fair value 15,524 21,170

Impounds related to mortgages payable 13,604 53,005

Corporate assets, net 12,576 12,948

Credit facility origination costs, net 8,564 12,264

Investment in sales type lease 6,120 6,056

Non-refundable escrow deposits — 200

Other items 49,849 38,859

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Accounts payable and accrued expenses consist of the following at:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Notes payable - interest payable $ 245,089 $ 218,811

Accrued costs on properties under development 103,715 65,967

Value-added tax payable 89,955 64,885

Derivative liabilities and payables - at fair value 158,024 119,620

Property taxes payable 104,752 78,809

Accrued costs on properties under development 78,833 65,967

Accrued income taxes 77,287 61,070

Accrued property expenses 63,912 54,208

Value-added tax payable 55,676 64,885

Accrued merger-related costs 18,786 4,551

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Below-market leases

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Other liabilities consist of the following at:

June 30, 2024 December 31, 2023

Lease liability - operating leases, net $ 473,173 $ 425,213

September 30, 2024 December 31, 2023

Lease liability - operating leases $ 458,545 $ 425,213

Rent received in advance and other deferred revenue 317,206 312,195

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Acquisitions of Real Estate

Below is a summary of our acquisitions for the six months ended June 30, 2024:

Below is a summary of our acquisitions for the nine months ended September 30, 2024:

Properties Leasable

(in thousands) Investment

($ in millions) Weighted

(Years) Initial

($ in millions) Weighted Average

(Years) Initial Weighted

Lease Yield (1)

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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 $ 0.5 million received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2024.

Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $ 1.2 million received as settlement credits as reimbursement of free rent periods for the nine months ended September 30, 2024.

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) Includes £ 35.2 million of investments relating to U.K.

development properties, € 17.7 million of investments relating to Spain development properties, and € 6.9 million of investments relating to Portugal development properties, converted at the applicable exchange rates on the funding dates.

(2) Includes £ 50.6 million of Sterling-denominated investments, and € 38.9 million of Euro-denominated investments, converted at the applicable exchange rates on the funding dates.

(3) Our clients occupying the new properties are 84.9 % retail and 15.1 % industrial based on net operating income.

Approximately 31 % of the net operating income generated from acquisitions during the six months ended June 30, 2024 is from investment grade rated clients, their subsidiaries, or affiliated companies.

The aggregate purchase price of the assets acquired during the six months ended June 30, 2024 has been allocated as follows (in millions):

Approximately 28 % of the net operating income generated from acquisitions during the nine months ended September 30, 2024 was from investment grade rated clients, their subsidiaries, or affiliated companies at the date of acquisition.

The aggregate purchase price of the assets acquired during the nine months ended September 30, 2024 has been allocated as follows (in millions):

Acquisitions - USD Acquisitions - Sterling Acquisitions - Euro

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(3) The weighted average amortization period for acquired lease intangible liabilities is 10.6 years.

The properties acquired during the six months ended June 30, 2024 generated total revenue and net income of $ 13.1 million and $ 3.6 million, respectively.

The aggregate purchase price of the assets acquired during the nine months ended September 30, 2024 included contingent consideration obligations related to leasing activities for a multi-tenant property acquired.

At September 30, 2024, we had accrued $ 15.7 million for remaining amounts deemed probable and estimable.

The properties acquired during the nine months ended September 30, 2024 generated total revenue and net income of $ 34.2 million and $ 10.8 million, respectively.

Investments in Existing Properties

During the six months ended June 30, 2024, we capitalized costs of $ 49.3 million on existing properties in our portfolio, consisting of $ 46.2 million for non-recurring building improvements, $ 3.1 million for re-leasing costs, and less than $ 0.1 million for recurring capital expenditures.

In comparison, 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.

During the nine months ended September 30, 2024, we capitalized costs of $ 84.7 million on existing properties in our portfolio, consisting of $ 78.6 million for non-recurring building improvements, $ 5.9 million for re-leasing costs, and $ 0.2 million for recurring capital expenditures.

In comparison, during the nine months ended September 30, 2023, we capitalized costs of $ 43.6 million on existing properties in our portfolio, consisting of $ 36.5 million for non-recurring building improvements, $ 6.9 million for re-leasing costs, and $ 0.2 million for recurring capital expenditures.

Properties with Existing Leases

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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 six months ended June 30, 2024, and 2023 were $ 434.2 million and $ 319.4 million, respectively.

The amounts amortized to expense for all of our in-place leases, for the nine months ended September 30, 2024, and 2023 were $ 652.8 million and $ 489.2 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 our 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 six months ended June 30, 2024, and 2023 were $ 19.1 million and $ 28.9 million, respectively.

The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the nine months ended September 30, 2024, and 2023 were $ 26.1 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 June 30, 2024 (dollars in thousands):

(decrease) to

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

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Investments in Unconsolidated Entities

The following is a summary of our investments in unconsolidated entities as of June 30, 2024 and December 31, 2023 (dollars in thousands):

The following is a summary of our investments in unconsolidated entities as of September 30, 2024 and December 31, 2023 (dollars in thousands):

Ownership % Number of Properties Carrying Amount (1) of Investment as of

Investment As of June 30, 2024

June 30, 2024

Investment As of September 30, 2024

September 30, 2024

December 31, 2023

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Total investment in unconsolidated entities $ 1,224,974 $ 1,172,118

(1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $ 7.8 million as of June 30, 2024.

(1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $ 7.7 million as of September 30, 2024.

The basis difference is primarily attributable to capitalized interest for the data center joint venture development funding.

Bellagio Las Vegas Joint Venture Interests

This joint venture owns a 95.0 % interest in the real estate of The Bellagio Las Vegas.

The joint venture we formed with Blackstone Real Estate Income Trust owns a 95.0 % interest in the real estate of The Bellagio Las Vegas.

We made an initial investment in October 2023, including $ 301.4 million of common equity for an indirect interest of 21.9 % in the property and a $ 650.0 million preferred equity interest.

During the six months ended June 30, 2024, we recognized interest income of $ 26.3 million for 8.1 % preferential cumulative distributions within 'Other' revenue in our consolidated statements of income and comprehensive income.

The unconsolidated entity had total debt outstanding of $ 3.0 billion as of June 30, 2024, all of which was non-recourse to us with limited customary exceptions.

During the nine months ended September 30, 2024, we recognized interest income of $ 39.5 million for 8.1 % preferential cumulative distributions within 'Other' revenue in our consolidated statements of income and comprehensive income.

The unconsolidated entity had total debt outstanding of $ 3.0 billion as of September 30, 2024, all of which was non-recourse to us with limited customary exceptions.

Data Center Joint Venture

We own an 80.0 % equity interest in a joint venture that owns and operates two data centers that were substantially completed during the second quarter of 2024.

Based on our reevaluation conducted during the second quarter of 2024, we determined that this joint venture is a VOE.

As we do not control this joint venture, we account for it under the equity method.

Our maximum exposure to loss associated with this VOE is limited to our equity investment and our pro rata share of the remaining $ 52.4 million of estimated development costs for the first phase of the project.

We own an 80.0 % equity interest in the joint venture that we formed with Digital Realty Trust.

As we do not control this VOE, we account for it under the equity method.

This joint venture owns and operates two data centers.

Our maximum exposure to loss associated with this joint venture is limited to our equity investment and our pro rata share of the remaining $ 35.4 million of estimated development costs for the first phase of the project.

Investments in Loans

The following table presents information about our loans as of June 30, 2024 and December 31, 2023 (dollars in thousands):

June 30, 2024

Amortized Cost Allowance (1)

Carrying Amount (2)

Senior Secured Notes Receivable (3)

$ 559,580 $ ( 7,945 ) $ 551,635

Mortgage Loans 33,500 — 33,500

Unsecured Loan 9,948 ( 1,035 ) 8,913

The following table presents information about our loans as of September 30, 2024 and December 31, 2023 (dollars in thousands):

September 30, 2024

Maturity Date Amortized Cost Allowance Carrying Amount (1)

Senior Secured Notes Receivable October 2029 - May 2030 $ 586,414 $ ( 6,476 ) $ 579,938

Mortgage Loans September 2038 33,500 — 33,500

Unsecured Loan December 2026 10,053 ( 898 ) 9,155

Total $ 629,967 $ ( 7,374 ) $ 622,593

December 31, 2023

Amortized Cost Allowance (1)

Carrying Amount (2)

Senior Secured Note Receivable $ 174,337 $ ( 2,498 ) $ 171,839

Mortgage Loan 33,500 — 33,500

Maturity Date Amortized Cost Allowance Carrying Amount (1)

Senior Secured Note Receivable October 2029 $ 174,337 $ ( 2,498 ) $ 171,839

Mortgage Loan September 2038 33,500 — 33,500

Total $ 207,837 $ ( 2,498 ) $ 205,339

(1) During the six months ended June 30, 2024, our allowance for credit losses increased by $ 6.5 million, attributable to the loans we acquired in conjunction with our merger with Spirit and another senior secured note we acquired in May 2024.

(2) The total carrying amount of the investment in loans excludes accrued interest of $ 9.4 million and $ 3.4 million as of June 30, 2024 and December 31, 2023, respectively, which is recorded to 'Other assets, net' on our consolidated balance sheets.

(3) Includes a loan acquired in conjunction with our merger with Spirit with an estimated acquisition date fair value of $ 4.6 million.

Since it was a purchased credit deteriorated loan, we recorded the initial expected credit loss of $ 1.8 million by adjusting the amortized cost basis.

(1) The total carrying amount of the investment in loans excludes accrued interest of $ 23.5 million and $ 3.4 million as of September 30, 2024 and December 31, 2023, respectively, which is recorded to 'Other assets, net' on our consolidated balance sheets.

Senior Secured Notes Receivable

In May 2024, we acquired a GBP-denominated senior secured note, maturing in May 2030, with a principal amount of £ 300.0 million, equivalent to $ 379.1 million as of June 30, 2024.

In May 2024, we acquired a GBP-denominated senior secured note, maturing in May 2030, with a principal amount of £ 300.0 million, equivalent to $ 402.1 million as of September 30, 2024.

The interest only note bears interest at a fixed rate of 8.125 % and is callable at par beginning in May 2026.

In September 2024, our interest in a loan with a carrying amount of $ 5.3 million, which was acquired in conjunction with our merger with Spirit, was transferred to a third-party buyer.

As a result of this transfer, we recorded a loss of $ 1.5 million, presented in 'Other income, net' in our consolidated statements of income and comprehensive income.

Revolving Credit Facility and Commercial Paper Programs

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Our revolving credit facility also has a $ 1.0 billion expansion option, which is subject to obtaining lender commitments.

Under our revolving credit facility, our current investment grade credit ratings provide for USD borrowings at 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 ("GBP") at the 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 ("EUR") 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 June 30, 2024, we had a borrowing capacity of $ 3.40 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 0.8 billion, including £ 0.6 billion GBP and € 40.0 million EUR borrowings.

Under our revolving credit facility, our investment grade credit ratings at September 30, 2024 provide for USD borrowings at 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, GBP 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 ("EUR") 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 September 30, 2024, we had a borrowing capacity of $ 3.82 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 0.4 billion, including £ 0.3 billion GBP and € 6.0 million EUR borrowings.

There was no outstanding balance at December 31, 2023.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 5.7 % and 4.6 % during the six months ended June 30, 2024, and 2023, respectively.

At June 30, 2024, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 5.8 %.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at June 30, 2024, we were in compliance with the covenants under our revolving credit facility.

As of June 30, 2024, credit facility origination costs of $ 9.8 million are included in 'Other assets, net', as compared to $ 12.3 million at December 31, 2023, on our consolidated balance sheets.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 5.4 % and 4.8 % during the nine months ended September 30, 2024, and 2023, respectively.

At September 30, 2024, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 5.7 %.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at September 30, 2024, we were in compliance with the covenants under our revolving credit facility.

As of September 30, 2024, credit facility origination costs of $ 8.6 million are included in 'Other assets, net', as compared to $ 12.3 million at December 31, 2023, on our consolidated balance sheets.

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

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The commercial paper ranks pari passu in right of payment with all of our other unsecured senior indebtedness outstanding, exclusive of unexchanged VEREIT, Inc.

("VEREIT") and Spirit bonds, from time to time, including borrowings under our revolving credit facility, our term loans and our outstanding senior unsecured notes (and is structurally subordinated to all our subsidiary debt).

(“VEREIT”) and Spirit bonds, including borrowings under our revolving credit facility, our term loans and our outstanding senior unsecured notes (and is structurally subordinated to all our subsidiary debt).

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

As of June 30, 2024, the balance of borrowings outstanding under our commercial paper programs was $ 302.2 million, including € 100.0 million of EUR borrowings, as compared to $ 764.4 million outstanding commercial paper borrowings, including € 583.0 million of EUR borrowings, at December 31, 2023.

The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.5 % for both the six months ended June 30, 2024, and 2023.

As of June 30, 2024, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 5.0 %.

As of September 30, 2024, we have no outstanding borrowings under our commercial paper programs, as compared to $ 764.4 million outstanding commercial paper borrowings, including € 583.0 million of EUR borrowings, at December 31, 2023.

The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.6 % and 4.7 % for the nine months ended September 30, 2024, and 2023, respectively.

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.

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The amended and restated term loan agreements are fixed through interest rate swaps at a weighted average interest rate of 3.9 %.

Pursuant to the amended and restated term loan agreement, we borrowed $ 800.0 million in aggregate total borrowings,

$ 300.0 million of which matures in August 2025 and $ 500.0 million of which matures in August 2027 (the “$ 800 million term loan agreement”).

Pursuant to the amended and restated term loan agreement, we borrowed $ 800.0 million in aggregate total borrowings, $ 300.0 million of which matures in August 2025 and $ 500.0 million of which matures in August 2027 (the “$ 800 million term loan agreement”).

We also entered into an amended and restated term loan agreement pursuant to which we borrowed $ 500.0 million in aggregate total borrowings which matures in June 2025 (the “$ 500 million term loan agreement”).

In January 2023, we entered into our 2023 term loan agreement, which allows us to incur up to an aggregate of $ 1.5 billion in multi-currency borrowings.

As of June 30, 2024, we had $ 1.1 billion in multi-currency borrowings, including $ 90.0 million, £ 705.0 million, and € 85.0 million in outstanding borrowings.

As of September 30, 2024, we had $ 1.1 billion in multi-currency borrowings, including $ 90.0 million, £ 705.0 million, and € 85.0 million in outstanding borrowings.

The 2023 term loans mature in January 2025, with one remaining twelve-month maturity extension available at our option.

Our A3/A- credit ratings provide for a borrowing rate of 80 basis points over the applicable benchmark rate, which includes adjusted SOFR for USD-denominated loans, adjusted SONIA for GBP-denominated loans, and EURIBOR for Euro-denominated loans.

In January 2024, we entered into interest rate swaps which fix our per annum interest rate at 4.9 % until January 2026, which is the term loan maturity date if our remaining extension option is exercised.

Deferred financing costs were $ 2.0 million at June 30, 2024 and are included net of the term loans principal balance, as compared to $ 0.1 million related to our 2023 term loans at December 31, 2023, on our consolidated balance sheets.

Deferred financing costs were $ 1.4 million at September 30, 2024 and are included net of the term loans principal balance, as compared to $ 0.1 million related to our 2023 term loans at December 31, 2023, on our consolidated balance sheets.

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

As of June 30, 2024, we were in compliance with the covenants contained in the term loans.

As of September 30, 2024, we were in compliance with the covenants contained in the term loans.

Mortgages Payable

During the six months ended June 30, 2024, we made $ 622.4 million in principal payments, including the full repayment of two mortgages for $ 620.0 million.

No mortgages were assumed during the six months ended June 30, 2024.

During the nine months ended September 30, 2024, we made $ 626.3 million in principal payments, including the full repayment of three mortgages for $ 622.7 million.

No mortgages were assumed during the nine months ended September 30, 2024.

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 June 30, 2024, 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 $ 0.3 million at June 30, 2024 and $ 0.4 million at December 31, 2023.

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

The following table summarizes our mortgages payable as of June 30, 2024 and December 31, 2023 (dollars in millions):

At September 30, 2024, we were in compliance with these covenants.

The following table summarizes our mortgages payable as of September 30, 2024 and December 31, 2023 (dollars in millions):

Properties (1)

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Financing Costs

June 30, 2024 49 4.3 % 4.6 % 1.1 $ 199.8 $ ( 0.7 ) $ 199.0

September 30, 2024 48 4.3 % 4.6 % 0.8 $ 198.1 $ ( 0.6 ) $ 197.5

December 31, 2023 131 4.8 % 3.3 % 0.4 $ 822.4 $ ( 0.8 ) $ 821.6

(1) At June 30, 2024, there were 14 mortgages on 49 properties and at December 31, 2023, there were 16 mortgages on 131 properties.

(1) At September 30, 2024, there were 13 mortgages on 48 properties and at December 31, 2023, there were 16 mortgages on 131 properties.

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

At June 30, 2024 and December 31, 2023, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.0 % to 6.9 % at June 30, 2024 and December 31, 2023, respectively.

(3) Effective interest rates ranged from 2.8 % to 6.6 % and 0.5 % to 6.6 % at June 30, 2024 and December 31, 2023, respectively.

The following table summarizes the maturity of mortgages payable as of June 30, 2024, excluding $ 0.7 million related to unamortized net discounts and deferred financing costs (dollars in millions):

At September 30, 2024 and December 31, 2023, all mortgages were at fixed interest rates.

(2) Stated interest rates ranged from 3.0 % to 6.9 % at September 30, 2024 and December 31, 2023, respectively.

(3) Effective interest rates ranged from 2.8 % to 6.8 % and 0.5 % to 6.6 % at September 30, 2024 and December 31, 2023, respectively.

The following table summarizes the maturity of mortgages payable as of September 30, 2024, excluding $ 0.6 million related to unamortized net discounts and deferred financing costs (dollars in millions):

Year of Maturity

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Notes Payable

At June 30, 2024, our senior unsecured notes and bonds are USD-denominated, GBP-denominated, and EUR-denominated.

At September 30, 2024, our senior unsecured notes and bonds are USD-denominated, GBP-denominated, and EUR-denominated.

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

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We expect to fund the next twelve months of obligations through a combination of the following:

(i) cash and cash equivalents, (ii) future cash flows from operations, (ii) issuances of common stock or debt, (iv) additional borrowings under our revolving credit facility and (v) investment dispositions and/or credit investment repayments.

(i) cash and cash equivalents, (ii) future cash flows from operations, (iii) issuances of common stock, debt, or other securities offerings, (iv) additional borrowings under our revolving credit facility, (v) short term loans, and (vi) asset dispositions and/or credit investment repayments.

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

Maturity Dates Principal (Currency Denomination) Carrying Value (USD) as of

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

4.600 % Notes due 2024

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

Maturity Dates Principal (Currency Denomination) Carrying Value (USD) as of

September 30, 2024 December 31, 2023

3.400 % Notes due 2028

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5.000 % Notes due 2029 (2)

October 15, 2029 £ 350,000 469,105 —

3.100 % Notes due 2029

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

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

Maturity Dates Principal (Currency Denomination) Carrying Value (USD) as of

June 30, 2024 December 31, 2023

3.390 % Notes due 2037

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5.250 % Notes due 2041 (2)

September 4, 2041 £ 350,000 469,105 —

2.500 % Notes due 2042 (2)

January 14, 2042 £ 250,000 335,075 318,450

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

5.375 % Notes due 2054

September 1, 2054 $ 500,000 500,000 —

Total principal amount $ 23,381,663 $ 18,562,064

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See note 13, Derivative Instruments for further details.

The following table summarizes the maturity of our notes and bonds payable as of June 30, 2024, excluding unamortized net discounts, deferred financing costs, and basis adjustments on interest rate swaps designated as fair value hedges (dollars in millions):

The following table summarizes the maturity of our notes and bonds payable as of September 30, 2024, excluding unamortized net discounts, deferred financing costs, and basis adjustments on interest rate swaps designated as fair value hedges (dollars in millions):

Year of Maturity

Thereafter 15,085.8

In July 2024, we repaid $ 350.0 million of outstanding 3.875 % senior unsecured notes, plus accrued and unpaid interest, upon maturity.

As of June 30, 2024, the weighted average interest rate on our notes and bonds payable was 3.8 %, and the weighted average remaining years until maturity was 6.3 years.

Interest incurred on all of the notes and bonds was $ 206.1 million and $ 144.1 million for the three months ended June 30, 2024, and 2023, respectively, and $ 406.6 million and $ 274.4 million for the six months ended June 30, 2024, and 2023, respectively.

As of September 30, 2024, the weighted average interest rate on our notes and bonds payable was 3.8 %, and the weighted average remaining years until maturity was 6.9 years.

Interest incurred on all of the notes and bonds was $ 211.4 million and $ 159.7 million for the three months ended September 30, 2024, and 2023, respectively, and $ 618.0 million and $ 434.1 million for the nine months ended September 30, 2024, and 2023, 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 June 30, 2024, we were in compliance with these covenants.

At September 30, 2024, we were in compliance with these covenants.

Note Issuances

During the six months ended June 30, 2024, we issued the following notes and bonds (in millions):

During the nine months ended September 30, 2024, we issued the following notes and bonds (in millions):

2024 Issuances Date of Issuance Maturity Date Principal amount Price of par value Effective yield to maturity

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January 2024 February 2034 $ 800.0 98.91 % 5.265 %

5.375 % Notes

August 2024 September 2054 $ 500.0 98.37 % 5.486 %

5.000 % Notes

September 2024 October 2029 £ 350.0 99.14 % 5.199 %

5.250 % Notes

September 2024 September 2041 £ 350.0 96.21 % 5.601 %

Note Exchange Offers Associated with our Merger with Spirit

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Noncontrolling Interests

As of June 30, 2024, we have ten entities with noncontrolling interests that we consolidate, including an operating partnership, Realty Income, L.P., and interests in consolidated property partnerships not wholly-owned by us.

The following table represents the change in the carrying value of all noncontrolling interests through June 30, 2024 (in thousands):

As of September 30, 2024, we have eight entities with noncontrolling interests that we consolidate, including an operating partnership, Realty Income, L.P., and interests in consolidated property partnerships not wholly-owned by us.

The following table represents the change in the carrying value of all noncontrolling interests through September 30, 2024 (in thousands):

Realty Income, L.P.

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4,287 544 4,831

Carrying value at June 30, 2024

Issuance of common partnership units (2)

54,643 ( 7,390 ) 47,253

(1) 1,795,167 units were outstanding as of both June 30, 2024 and December 31, 2023.

At June 30, 2024, we are considered the primary beneficiary of Realty Income, L.P.

Carrying value at September 30, 2024

$ 168,375 $ 43,543 $ 211,918

(1) 2,681,808 and 1,795,167 units were outstanding as of September 30, 2024 and December 31, 2023, respectively.

(2) In July 2024, a joint venture partner converted their interests in two consolidated property partnerships into 156,621 common partnership units in Realty Income, LP and recorded the excess over carrying value of $ 0.8 million as a reduction to common stock and paid in capital.

In September 2024, we completed the acquisition of 42 properties by paying cash and by issuing 730,020 common partnership units in Realty Income, LP.

At September 30, 2024, we are considered the primary beneficiary of Realty Income, L.P.

and other VIEs.

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We have not historically had changes in classifications and do not expect that changes in classifications between levels will be frequent.

The following tables present the carrying values and estimated fair values of financial instruments as of June 30, 2024 and December 31, 2023 (in millions):

June 30, 2024

The following tables present the carrying values and estimated fair values of financial instruments as of September 30, 2024 and December 31, 2023 (in millions):

September 30, 2024

Hierarchy Level

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The following table reflects the carrying amounts and estimated fair values of our financial instruments not measured at fair value on our consolidated balance sheets (in millions):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Carrying value

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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 3 of the fair value hierarchy.

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 and private senior notes payable are categorized as level 3 of the fair value hierarchy.

The estimated fair values of our publicly-traded senior notes and bonds payable are based upon indicative market prices and recent trading activity of our senior notes and bonds payable.

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Although we have determined that the majority of the inputs used to value our derivatives fall within level 2 on the fair value 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 June 30, 2024, and December 31, 2023, 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.

However, at September 30, 2024, and December 31, 2023, 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 2.

For more details on our derivatives, see note 13, Derivative Instruments .

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

Carrying value prior to impairment $ 133.8 $ 37.5 $ 488.7 $ 161.4

total provisions for impairment (1) (2)

total provisions for impairment of real estate (1)

( 33.1 ) ( 16.8 ) ( 208.6 ) ( 59.8 )

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Sold 24 23 59 66

(1) Excludes provision for current expected credit loss of $ 9.3 million and $ 10.5 million for the three and six months ended June 30, 2024.

(2) Real estate assets that were deemed to be impaired for the six months ended June 30, 2024 primarily relate to two office properties which were acquired and retained in our merger with VEREIT in 2021, 17 properties leased to clients in bankruptcies, as well as certain properties that are more likely than not to be sold in the next twelve months.

(1) Real estate assets that were deemed to be impaired for the nine months ended September 30, 2024 primarily relate to two office properties which were acquired and retained in our merger with VEREIT in 2021, 23 properties leased to clients in bankruptcies, as well as certain properties that are more likely than not to be sold in the next twelve months.

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.

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For these hedging instruments, 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 these excluded components are recorded to other comprehensive income and subsequently recognized in 'Foreign currency and derivative gain (loss), 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.

Changes in the fair value of the cross-currency swaps attributable to these excluded components are recorded to other comprehensive income and subsequently 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 Designated as Hedging Instruments - Net Investment Hedges

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We use the spot method of assessing hedge effectiveness and apply the consistent election to the excluded component by recognizing changes in the fair value of the hedging instruments attributable to the excluded component in the same manner as described above.

Any difference between the change in the fair value of the excluded components and

the amounts recognized in earnings is reported in other comprehensive income as part of the foreign cumulative translation adjustment.

Any difference between the change in the fair value of the excluded components and the amounts recognized in earnings is reported in other comprehensive income as part of the foreign cumulative translation adjustment.

The gain or loss on the portion of the derivative instruments included in the assessment of effectiveness is reported in other comprehensive income as part of the 'Foreign currency translation adjustment' line item, to the extent the relationship is highly effective.

If our net investment changes during a reporting period, the hedge relationship will be assessed for whether a de-designation is warranted (only if the hedge notional amount is outside of prescribed tolerance).

Further, certain EUR-denominated bonds and borrowings under our Revolving Credit Facility and Term Loans (all as defined in notes 7 and 8 , respectively) may be also designated as, and are effective as, net investment hedge.

Changes in the value of such borrowings, related to changes in the spot rates, will be recorded in the same manner as foreign currency translation adjustments.

As of September 30, 2024, the total principal amount of foreign currency debt obligations designated as net investment hedges was $ 60.1 million.

Derivatives Not Designated as Hedging Instruments

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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 our consolidated statements of income and comprehensive income.

The following table summarizes the terms and fair values of our derivative financial instruments at June 30, 2024 and December 31, 2023 (dollars in millions):

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 our consolidated statements of income and comprehensive income.

The following table summarizes the terms and fair values of our derivative financial instruments at September 30, 2024 and December 31, 2023 (dollars in millions):

Derivative Type

Number of Instruments (1)

Notional Amount as of

Notional Amount

Weighted Average Strike Rate (2)

Maturity Date (3)

Fair Value - asset (liability) as of

Derivatives Designated as Hedging Instruments June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Fair Value - asset (liability)

Derivatives Designated as Hedging Instruments September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

Interest rate swaps (4)

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3 280.0 280.0 (7) Oct 2032 ( 52.8 ) ( 53.2 )

Foreign currency forwards 22 262.3 162.3 (8) Jul 2024 - Dec 2025 2.2 2.7

Foreign currency forwards 31 357.6 162.3 (8) Oct 2024 - Jun 2026 ( 15.2 ) 2.7

$ 3,637.6 $ 3,392.3 $ ( 113.6 ) $ ( 107.4 )

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Currency exchange swaps

4 $ 1,454.0 $ 1,810.6 (9) Jul 2024 $ 3.4 $ 8.9

3 $ 1,251.0 $ 1,810.6 (9) Oct 2024 $ ( 28.9 ) $ 8.9

$ 1,251.0 $ 1,810.6 $ ( 28.9 ) $ 8.9

Total of all Derivatives $ 4,888.6 $ 5,202.9 $ ( 142.5 ) $ ( 98.5 )

(1) This column represents the number of instruments outstanding as of June 30, 2024.

(2) Weighted average strike rate is calculated using the notional value as of June 30, 2024.

(3) This column represents maturity dates for instruments outstanding as of June 30, 2024.

(4) During the six months ended June 30, 2024, we entered into five variable-to-fixed interest rate swaps when we extended maturity of the 2023 term loans and designated them as cash flow hedges.

(1) This column represents the number of instruments outstanding as of September 30, 2024.

(2) Weighted average strike rate is calculated using the notional value as of September 30, 2024.

(3) This column represents maturity dates for instruments outstanding as of September 30, 2024.

(4) During the nine months ended September 30, 2024, we entered into five variable-to-fixed interest rate swaps when we extended maturity of the 2023 term loans and designated them as cash flow hedges.

We also designated five variable-to-fixed interest rate swaps we acquired from Spirit as cash flow hedges to mitigate the interest rate risk associated with the term loans we assumed in conjunction with our merger with Spirit.

The acquisition date fair value of these derivatives was $ 35.1 million in total and will be reclassified from AOCI to interest expense over the remaining life of the term loans on a systematic and rational basis.

The acquisition date fair value of these derivatives was $ 35.1 million in total and will be reclassified from AOCI to interest expense over the remaining life of the term loans.

(5) There were six interest swaptions equal to $ 1 billion in notional entered into in March 2023, of which $ 800 million was terminated in January 2024 in connection with a senior unsecured note issuance.

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Derivatives in Cash Flow Hedging Relationships 2024 2023 2024 2023

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Total derivatives in fair value hedging relationships $ 351 $ ( 3,917 ) $ 3,641 $ ( 8,691 )

Total unrealized gain (loss) on derivatives, net $ 7,324 $ ( 6,410 ) $ 16,246 $ ( 8,572 )

Derivatives in Net Investment Hedging Relationships

Total unrealized (loss) gain on derivatives, net $ ( 46,474 ) $ 7,193 $ ( 30,228 ) $ ( 1,379 )

Derivatives and Non-derivatives in Net Investment Hedging Relationships

Cross-currency swaps - Net Investment $ ( 12,715 ) $ — $ ( 1,094 ) $ —

Total unrealized gain recorded in foreign currency translation adjustment $ 6,748 $ — $ 11,621 $ —

Foreign currency debt ( 2,232 ) — ( 2,232 ) —

Total unrealized loss recorded in foreign currency translation adjustment $ ( 14,947 ) $ — $ ( 3,326 ) $ —

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

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Derivatives in Cash Flow Hedging Relationships Location of Gain Recognized in Income

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Interest rate swaps Interest $ 8,316 $ 5,316 $ 25,836 $ 10,055

Foreign currency forwards Foreign currency and derivative gain, net 1,569 892 3,680 2,323

Foreign currency forwards Foreign currency and derivative (loss) gain, net 739 1,662 4,419 3,985

Interest rate swaptions Interest 82 ( 2,250 ) ( 827 ) ( 4,609 )

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Derivatives in Fair Value Hedging Relationships

Cross-currency swaps - Fair Value Foreign currency and derivative gain, net $ 538 $ 190 $ 999 $ 484

Cross-currency swaps - Fair Value Foreign currency and derivative (loss) gain, net $ 98 $ 570 $ 1,097 $ 1,054

Total derivatives in fair value hedging relationships $ 98 $ 570 $ 1,097 $ 1,054

Derivatives in Net Investment Hedging Relationships

Cross-currency swaps - Net Investment Foreign currency and derivative gain, net $ 938 $ — $ 1,807 $ —

Cross-currency swaps - Net Investment (excluded component) Foreign currency and derivative (loss) gain, net $ 549 $ — $ 2,356 $ —

Total derivatives in net investment hedging relationships $ 549 $ — $ 2,356 $ —

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2024 2023 2024 2023

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

Loss on the settlement of undesignated derivatives $ ( 5,119 ) $ ( 981 ) $ ( 20,384 ) $ ( 1,326 )

(Loss) gain on the settlement of undesignated derivatives $ ( 34,164 ) $ 11,432 $ ( 54,548 ) $ 10,106

Gain on the settlement of designated derivatives reclassified from AOCI 1,386 2,233 7,872 5,039

Gain (loss) on the settlement of transactions with third parties ( 9 ) ( 51 ) ( 15 ) 1,275

(Loss) gain on the settlement of transactions with third parties ( 18 ) 410 ( 33 ) 1,685

Total realized foreign currency and derivative (loss) gain, net $ ( 32,796 ) $ 14,075 $ ( 46,709 ) $ 16,830

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

Gain (loss) on the change in fair value of undesignated derivatives $ 3,408 $ ( 7,394 ) $ 5,546 $ ( 8,176 )

(Loss) gain on remeasurement of certain assets and liabilities ( 814 ) 4,792 12,924 13,190

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

(Loss) gain on the change in fair value of undesignated derivatives $ ( 28,915 ) $ 12,910 $ ( 23,369 ) $ 4,734

Gain (loss) on remeasurement of certain assets and liabilities 60,039 ( 29,798 ) 72,963 ( 16,607 )

Total unrealized foreign currency and derivative gain (loss), net $ 31,124 $ ( 16,888 ) $ 49,594 $ ( 11,873 )

Total foreign currency and derivative gain (loss), net $ 511 $ ( 2,552 ) $ 4,557 $ 7,770

Total foreign currency and derivative (loss) gain, net $ ( 1,672 ) $ ( 2,813 ) $ 2,885 $ 4,957

Lessor Operating Leases

At June 30, 2024, we owned or held interests in 15,450 properties.

At September 30, 2024, we owned or held interests in 15,457 properties.

Of the 15,457 properties, 15,156 , or 98.1 %, are single-client properties, and the remaining are multi-client properties.

At June 30, 2024, 185 properties were available for lease or sale.

At September 30, 2024, 196 properties were available for lease or sale.

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

The vast majority 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 clients' gross sales, or percentage rent, for the three months ended June 30, 2024, and 2023 was $ 2.4 million, and $ 1.7 million, respectively.

Percentage rent for the six months ended June 30, 2024, and 2023 was $ 7.7 million, and $ 5.8 million, respectively.

No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the six months ended June 30, 2024, and 2023.

At September 30, 2024, most of the properties in our portfolio were leased under net lease agreements 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 clients' gross sales, or percentage rent, for the three months ended September 30, 2024, and 2023 was $ 3.1 million, and $ 2.2 million, respectively.

Percentage rent for the nine months ended September 30, 2024, and 2023 was $ 10.8 million, and $ 8.0 million, respectively.

No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the nine months ended September 30, 2024, and 2023.

Stockholders' Equity

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

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January $ 0.2565 $ 0.2485

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June 0.2625 0.2550

July 0.2630 0.2555

August 0.2630 0.2555

September 0.2630 0.2555

$ 2.3350 $ 2.2830

At June 30, 2024, a distribution of $ 0.2630 per common share was payable and was paid in July 2024.

At September 30, 2024, a distribution of $ 0.2635 per common share was payable and was paid in October 2024.

At-the-Market ("ATM") Program

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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 June 30, 2024, we had 73.2 million shares remaining for future issuance under our ATM program.

As of September 30, 2024, we had 56.7 million 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.

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2024 2023 2024 2023

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Net proceeds $ 266.6 $ 873.3 $ 809.9 $ 3,850.0

(1) During the three and six months ended June 30, 2024, 3.5 million and 8.1 million shares were sold, respectively, and 9.6 million shares were settled pursuant to forward sale confirmations.

In addition, as of June 30, 2024, 4.7 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $ 53.32 per share.

We currently expect to fully settle forward sale agreements outstanding by September 30, 2024, representing $ 247.8 million in net proceeds, for which the weighted average forward price at June 30, 2024 was $ 52.87 per share.

(1) During the three and nine months ended September 30, 2024, 16.5 million and 24.6 million shares were sold, respectively, and 4.3 million and 13.9 million and shares were settled pursuant to forward sale confirmations.

In addition, as of September 30, 2024, 16.8 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $ 57.58 per share.

We currently expect to fully settle forward sale agreements outstanding by December 31, 2024, representing $ 958.1 million in net proceeds, for which the weighted average forward price at September 30, 2024 was $ 56.88 per share.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

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

At June 30, 2024, we had 10.8 million shares remaining for future issuance under our DRSPP program.

At September 30, 2024, we had 10.8 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, shares in thousands):

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2024 2023 2024 2023

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Gross proceeds $ 2.6 $ 3.0 $ 8.8 $ 8.4

Redeemable Preferred Stock

Series A Preferred Stock

As part of the Merger Agreement with Spirit, each outstanding share of Spirit’s 6.000 % Series A Cumulative Redeemable Preferred Stock, par value $ 0.01 per share, converted into the right to receive one share of newly issued Realty Income 6.000 % Series A Cumulative Redeemable Preferred Stock, having substantially the same terms as the Spirit Series A Preferred Stock, resulting in 6.9 million shares of Realty Income Series A Preferred Stock issued.

We are authorized to issue up to 69.9 million shares of our preferred stock.

As of June 30, 2024, we had 6.9 million shares of our preferred stock outstanding.

The 6.000 % Series A Cumulative Redeemable Preferred Stock trades on the NYSE under the ticker symbol "O PR".

The 6.000 % Series A Cumulative Redeemable Preferred Stock is classified as mezzanine equity on our consolidated balance sheets as it is contingently redeemable for cash or the value of the property, rights or securities to be paid or distributed upon the occurrence of a change of control event, which is not solely within our control.

Our preferred stock pays cumulative cash dividends at the rate of 6.000 % per annum on their liquidation preference of $ 25.00 per share (equivalent to $ 1.50 per share on an annual basis).

We may, at our option, redeem the 6.000 % Series A Cumulative Redeemable Preferred Stock, in whole or in part, at any time for cash at a redemption price of $ 25.00 per share, plus any accrued and unpaid dividends up to, but excluding, the redemption date.

Dividends are payable quarterly in arrears on or about the last day of March, June, September and December of each year.

During the six months ended June 30, 2024, we paid two quarterly dividends to holders of our preferred stock totaling $ 0.750 per share, or $ 5.2 million.

In September 2024, we redeemed all 6.9 million shares of Realty Income Series A preferred stock outstanding.

The shares were redeemed at redemption value of $ 25.00 per share, plus accrued and unpaid dividends to September 30, 2024.

The excess of the $ 25.00 liquidation price per share over the carrying value of Realty Income Series A preferred stock redeemed resulted in a loss on redemption of $ 5.1 million for the three months ended September 30, 2024.

Common Stock Incentive Plan

This note should be read in conjunction with the more complete discussion of the Realty Income 2021 Incentive Award Plan (the “2021 Plan”), included in note 19 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

The amount of share-based compensation costs recognized in 'General and administrative' in our consolidated statements of income and comprehensive income was $ 7.3 million and $ 7.6 million during the three months ended June 30, 2024, and 2023, respectively, and $ 16.5 million and $ 13.9 million during the six months ended June 30, 2024, and 2023, respectively.

The amount of share-based compensation costs recognized in 'General and administrative' in our consolidated statements of income and comprehensive income was $ 6.4 million and $ 6.2 million during the three months ended September 30, 2024, and 2023, respectively, and $ 22.9 million and $ 20.2 million during the nine months ended September 30, 2024, and 2023, respectively.

In connection with the Merger, each outstanding Spirit restricted stock award and performance share award was cancelled and converted into Realty Income common stock, using the Exchange Ratio in accordance with the Merger Agreement.

The issuance is excluded from the sections below, as the awards were not granted under the 2021 Plan.

The aggregate fair value of fully vested Spirit awards converted into Realty Income common stock was $ 66.5 million, of which i.) $ 41.7 million related to pre-combination services and is included in the consideration transferred in the merger and ii.) $ 24.8 million of expense was recognized in January in merger and integration-related costs related to the value attributable to post-combination services.

The aggregate fair value of fully vested Spirit awards converted into Realty Income common stock was $ 66.5 million, of which i.) $ 41.7 million related to pre-combination services and is included in the consideration transferred in the merger and ii.) $ 24.8 million of expense was recognized in January in merger, transaction, and other costs related to the value attributable to post-combination services.

For more details, please see note 2, Merger with Spirit Realty Capital, Inc.

Restricted Stock and Restricted Stock Units

During the six months ended June 30, 2024, we granted 341,522 shares of common stock under the 2021 Plan.

During the nine months ended September 30, 2024, we granted 343,890 shares of common stock under the 2021 Plan.

This included 44,000 total shares of restricted stock granted to the independent members of our Board of Directors, 4,000 of which were granted to a new member in the first quarter of 2024, and the remaining 40,000 shares of which were granted in connection with our annual awards in May 2024.

1 unchanged sentence

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

During the six months ended June 30, 2024, we also granted 30,322 restricted stock units, all of which vest over a four-year service period.

As of June 30, 2024, the remaining unamortized share-based compensation expense related to restricted stock awards and units totaled $ 27.5 million, which is being amortized on a straight-line basis over the service period of each applicable award.

During the nine months ended September 30, 2024, we also granted 30,538 restricted stock units, all of which vest over a four-year service period.

As of September 30, 2024, the remaining unamortized share-based compensation expense related to restricted stock awards and units totaled $ 23.8 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.

1 unchanged sentence

Performance Shares

During the six months ended June 30, 2024, we granted 274,358 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 June 30, 2024, the remaining share-based compensation expense related to the performance shares totaled $ 26.1 million.

During the nine months ended September 30, 2024, we granted 274,358 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 % after the end of the three-year performance period and the remaining 50 % on January 1 of the following year, subject to continued service.

As of September 30, 2024, the remaining share-based compensation expense related to the performance shares totaled $ 22.5 million.

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

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2024 2023 2024 2023

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

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Supplemental disclosures:

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Non-cash activities:

Net increase (decrease) in fair value of derivatives $ 62,048 $ ( 77,982 )

Net decrease in fair value of derivatives $ ( 44,050 ) $ ( 51,386 )

Term loans assumed at fair value $ 1,300,000 $ —

1 unchanged sentence

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

Issuance/conversion of common partnership units of Realty Income, L.P.

(1) See note 11, Noncontrolling Interests for further details.

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

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Cash and cash equivalents shown in the consolidated balance sheets $ 396,956 $ 344,129

10 unchanged sentences

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 June 30, 2024, we had commitments of $ 91.5 million, which primarily relate to tenant improvements, re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of June 30, 2024, we had committed $ 393.9 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between July 2024 and April 2025.

At September 30, 2024, we had commitments of $ 77.8 million, which primarily relate to tenant improvements, re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of September 30, 2024, we had committed $ 394.9 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between November 2024 and July 2025.

Subsequent Events

In July 2024, we declared a dividend of $ 0.2630 per share to our common stockholders, which will be paid in August 2024.

In October 2024, we declared a dividend of $ 0.2635 per share to our common stockholders, which will be paid in November 2024.

ATM Forward Offerings

As of August 5, 2024, ATM forward agreements for a total of 8.3 million shares remain unsettled with total expected net proceeds of approximately $ 447.8 million, of which 3.7 million shares were executed in July 2024.

As of November 4, 2024, ATM forward agreements for a total of 17.0 million shares remain unsettled with total expected net proceeds of approximately $ 968.7 million, of which 0.2 million shares were executed in October 2024.

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