What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-21 · 635 added, 577 removed, 897 unchanged (57% of the section changed)

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Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets, December 31, 202 3 and 202 2

Consolidated Balance Sheets, December 31, 2024 and December 31, 2023

Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2024, 2023, and 2022

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Fair Value of Land in Real Estate Acquisitions

As discussed in Note 4 to the consolidated financial statements, during 2023 the Company acquired $8.2 billion of real estate properties.

As discussed in Note 1, the purchase price of a real estate acquisition is typically allocated among the individual components of both tangible and intangible assets and liabilities acquired based on their estimated relative fair values.

We identified the evaluation of the fair value of land in real estate acquisitions as a critical audit matter.

Evaluation of the Fair Value of Acquired Land

As discussed in Notes 2 and 4 to the consolidated financial statements, during 2024 the Company acquired $10.1 billion of real estate properties.

We identified the evaluation of the fair value of acquired land as a critical audit matter.

Specifically, the measurement of the fair values of land is dependent upon significant assumptions of market land values for which relevant external market data is not always readily available.

Subjective and complex auditor judgment was required in evaluating the fair value measurements given the sensitivity of the fair value measurements to changes in these assumptions.

Subjective auditor judgment was required in evaluating the fair value measurements given the sensitivity of the fair value measurements to changes in these assumptions.

The following are the primary procedures we performed to address this critical audit matter.

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February 25, 2025

Financial Statements

REALTY INCOME CORPORATION AND SUBSIDIARIES

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Line of credit payable and commercial paper 1,130,201 764,390

Term loan, net 1,331,841 249,755

Term loans, net 2,358,417 1,331,841

Mortgages payable, net 80,784 821,587

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Stockholders’ equity:

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000 shares authorized, 752,460 and 660,300 shares issued and outstanding as of December 31, 2023, and December 31, 2022, respectively

Common stock and paid in capital, par value $ 0.01 per share, 1,300,000 shares authorized, 891,511 and 752,460 shares issued and outstanding as of December 31, 2024 and 2023, respectively

$ 47,451,068 $ 39,629,709

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Provisions for impairment 425,833 87,082 25,860

Merger and integration-related costs 14,464 13,897 167,413

Merger, transaction, and other costs, net 96,292 14,464 13,897

Total expenses 4,489,294 3,188,646 2,540,158

Gain on sales of real estate 117,275 25,667 102,957

Foreign currency and derivative (loss) gain, net ( 13,414 ) ( 13,311 ) 710

Gain (loss) on extinguishment of debt — 367 ( 97,178 )

Equity in income and impairment of investment in unconsolidated entities 2,546 ( 6,448 ) 1,106

Foreign currency and derivative gain (loss), net 3,420 ( 13,414 ) ( 13,311 )

Gain on extinguishment of debt — — 367

Equity in earnings of unconsolidated entities 7,793 2,546 ( 6,448 )

Other income, net 23,606 23,789 30,511

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Net income attributable to noncontrolling interests ( 6,569 ) ( 4,605 ) ( 3,008 )

Net income attributable to the Company 860,772 872,309 869,408

Preferred stock dividends ( 7,763 ) — —

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

Net income available to common stockholders $ 847,893 $ 872,309 $ 869,408

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Net income available to common stockholders $ 847,893 $ 872,309 $ 869,408

Total other comprehensive gain

Total other comprehensive (loss) income

Foreign currency translation adjustment ( 32,883 ) 64,326 ( 55,154 )

Unrealized (loss) gain on derivatives, net ( 2,782 ) ( 37,265 ) 97,054

Total other comprehensive gain $ 27,061 $ 41,900 $ 59,567

Total other comprehensive (loss) income $ ( 35,665 ) $ 27,061 $ 41,900

Comprehensive income available to common stockholders $ 812,228 $ 899,370 $ 911,308

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Years ended December 31, 2024, 2023, and 2022

stock Preferred

capital Shares of

capital Distributions

net income Accumulated other comprehensive income (loss) Total

net income Accumulated other comprehensive income Total

stockholders’

equity Noncontrolling

equity Non-controlling

interests Total

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Other comprehensive income — — — — — 41,900 41,900 — 41,900

Shares issued in merger 162,044 11,556,715 — — 11,556,715 3,160 11,559,875

Orion Divestiture — ( 1,140,769 ) — — ( 1,140,769 ) ( 1,352 ) ( 1,142,121 )

Distributions paid and payable — — — — ( 1,832,030 ) — ( 1,832,030 ) ( 4,125 ) ( 1,836,155 )

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Contributions by noncontrolling interests — — — — — — — 40,097 40,097

Reallocation of equity — ( 3,210 ) — — ( 3,210 ) 3,210 —

Share-based compensation, net — — 258 19,218 — — 19,218 — 19,218

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Net income — — — — 860,772 — 860,772 6,569 867,341

Other comprehensive income — — — 27,061 27,061 — 27,061

Other comprehensive loss — — — — — ( 35,665 ) ( 35,665 ) — ( 35,665 )

Distributions paid and payable — — — — ( 2,742,079 ) — ( 2,742,079 ) ( 10,398 ) ( 2,752,477 )

Contributions by noncontrolling interests — — — — — 40,097 40,097

Share issuance, net of costs — — 30,381 1,754,895 — — 1,754,895 — 1,754,895

Shares issued with merger 6,900 167,394 108,308 6,043,641 — — 6,043,641 — 6,043,641

Contributions by noncontrolling interests — — — — — — — 2,022 2,022

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 — — 362 23,591 — — 23,591 — 23,591

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Non-cash revenue adjustments ( 116,017 ) ( 62,029 ) ( 57,009 )

(Gain) loss on extinguishment of debt — ( 367 ) 97,178

Gain on extinguishment of debt — — ( 367 )

Amortization of net premiums on mortgages payable 30 ( 12,803 ) ( 13,622 )

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Amortization of deferred financing costs 23,939 26,670 15,613

(Gain) loss on interest rate swaps ( 7,189 ) 718 2,905

Foreign currency and unrealized derivative loss, net 37,776 220,948 27,223

Foreign currency and unrealized derivative (gain) loss, net ( 19,394 ) 37,776 220,948

Non-cash interest expense (income) 11,505 ( 7,189 ) 718

Gain on sales of real estate ( 117,275 ) ( 25,667 ) ( 102,957 )

Equity in income and impairment of investment in unconsolidated entities ( 2,546 ) 6,448 ( 1,106 )

Distributions from unconsolidated entities 5,807 1,605 365

Equity in earnings of unconsolidated entities ( 7,793 ) ( 2,546 ) 6,448

Distributions on common equity from unconsolidated entities 21,038 5,807 1,605

Provisions for impairment 425,833 87,082 25,860

Deferred income taxes 3,552 — —

Change in assets and liabilities

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Non-refundable escrow deposits ( 225 ) ( 200 ) ( 5,667 )

Net cash paid in merger — — ( 366,030 )

Net cash acquired in merger 93,683 — —

Net cash used in investing activities ( 3,342,883 ) ( 9,354,854 ) ( 8,387,076 )

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Cash distributions to common stockholders ( 2,691,719 ) ( 2,111,793 ) ( 1,813,431 )

Cash distributions to preferred stockholders ( 7,763 ) — —

Borrowings on line of credit and commercial paper programs 36,887,003 77,338,040 28,539,299

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Proceeds from term loan — 1,029,383 —

Principal payment on term loan ( 250,000 ) — —

Proceeds from notes payable issued 2,657,925 4,239,745 2,154,662

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Principal payments on mortgages payable ( 740,505 ) ( 22,015 ) ( 312,234 )

Payments upon extinguishment of debt — — ( 96,583 )

Proceeds from common stock offerings, net 1,742,810 5,439,462 4,556,028

Proceeds from dividend reinvestment and stock purchase plan 11,812 11,519 11,654

Redemption of preferred stock ( 172,510 ) — —

Distributions to noncontrolling interests ( 10,143 ) ( 7,725 ) ( 3,935 )

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Debt issuance costs ( 60,615 ) ( 81,898 ) ( 34,156 )

Net cash received from Orion Divestiture — — 593,484

Other items, including shares withheld upon vesting ( 8,856 ) ( 7,022 ) ( 4,790 )

Net cash provided by financing activities 6,437,356 5,738,243 4,577,120

Net cash (used in) provided by financing activities ( 21,158 ) 6,437,356 5,738,243

Effect of exchange rate changes on cash and cash equivalents ( 5,904 ) 24,023 ( 20,511 )

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Summary of Significant Accounting Policies

Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”) was founded in 1969 and is organized as a Maryland corporation.

We invest in commercial real estate and have elected to be taxed as a real estate investment trust ("REIT").

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

As of December 31, 2023, we owned or held interests in a diversified portfolio of 13,458 properties located in all 50 states of the United States ("U.S."), Puerto Rico, the United Kingdom ("U.K."), France, Germany, Ireland, Italy, Portugal, and Spain, with approximately 272.1 million square feet of leasable space.

Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”), a Maryland corporation, is an S&P 500 company and real estate partner to the world's leading companies.

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 December 31, 2024, we owned or held interests in a diversified portfolio of 15,621 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 339.4 million square feet of leasable space.

In January 2024, we completed our merger (the "Merger") with Spirit Realty Capital, Inc.

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

Information with respect to number of properties, leasable square feet, average initial lease term and initial weighted average cash yield is unaudited.

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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 (loss) gain, net' in our consolidated statements of income and comprehensive income.

The resulting adjustment is reflected in 'Foreign currency and derivative gain (loss), 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.

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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 December 31, 2023 and 2022 (in thousands):

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

December 31, 2024 December 31, 2023

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

Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction (see note 12, Noncontrolling Interests ).

Reclassification .

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

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

Previously, this was categorized as 'Accounts receivable, net' on our consolidated balance sheets.

Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction.

For further details, see note 11, Noncontrolling Interests .

Use of Estimates.

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Income Taxes.

We have elected to be taxed as a REIT, under the Internal Revenue Code of 1986, as amended.

We have elected to be taxed as a real estate investment trust ("REIT"), under the Internal Revenue Code of 1986, as amended.

We believe we have qualified and continue to qualify as a REIT.

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Our use of TRS entities enables us to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings.

For our international territories, we are liable for taxes in the United Kingdom and Spain.

Accordingly, provisions have been made for U.K.

and Spain income taxes.

Therefore, the income taxes recorded on our consolidated statements of income and comprehensive income represent amounts accrued or paid by Realty Income and its subsidiaries for U.S.

income taxes on our TRS entities, city and state income and franchise taxes, and income taxes for the U.K.

We are liable for taxes in our applicable international territories and have made the appropriate provisions in those territories.

Therefore, the income taxes recorded in our consolidated statements of income and comprehensive income represent amounts for U.S.

income taxes on our TRS entities, city and state income and franchise taxes, as well as income taxes for the applicable international territories.

We recognize deferred income tax in our taxable subsidiaries, including certain international jurisdictions.

Deferred income tax assets and liabilities are generally the result of temporary differences between book and tax accounting, such as timing differences caused by different useful lives used for depreciation.

We provide for a valuation allowance for deferred income tax assets if we believe some or all of the deferred income tax assets may not be realized.

As of December 31, 2024, we had $ 3.5 million of net deferred tax liabilities, which are reported in 'Other liabilities' on our consolidated balance sheets.

Earnings and profits that determine the taxability of distributions to stockholders differ from net income reported for financial reporting purposes primarily due to differences in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.

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Loans Receivable .

The loans we acquired during 2023 are classified as held for investment and are carried at their amortized cost basis.

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

Our acquired loans are classified as held for investment and are carried at their amortized cost basis.

We recognize interest income on loans receivable using a method that approximates 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.

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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 for which 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 statements 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 client's 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 year ended December 31, 2023, we recognized a provision for credit losses of $ 4.9 million, which includes $ 2.5 million of allowances on loans receivable and $ 2.4 million of allowances on financing receivables.

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

For further details, see note 6, Investments in Loans and Financing Receivables.

Merger, Transaction, and Other Costs, Net.

Merger, transaction, and other costs, net 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 year ended December 31, 2024, we incurred $ 96.3 million of merger, transaction, and other costs, net consisting of $ 86.7 million of transaction and integration-related costs related to Spirit (see note 2), $ 5.1 million related to the lease termination of a legacy corporate facility, and $ 4.5 million related to the establishment of our private fund.

Gain on Sales of Real Estate .

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Allocation of the Purchase Price of Real Estate Acquisitions .

We evaluate whether or not substantially all of the value of acquired assets is concentrated in a single identifiable asset or group of identifiable assets to determine whether a transaction is accounted for as an asset acquisition or a business combination.

A majority of our

acquisitions qualify as asset acquisitions, and the transaction costs associated with those acquisitions are capitalized.

On the other hand, we expense the transaction costs and categorize them as merger and integration-related costs on our consolidated statements of income and comprehensive income for transactions that qualify as a business combination.

For business combinations, we recognize the amount of any purchase consideration that exceeds the fair value of all identified assets acquired and liabilities assumed as goodwill and may record measurement period adjustments within one year of the acquisition date as permitted under ASC 805, Business Combinations .

For asset acquisitions, we allocate the cost of real estate acquired, inclusive of transaction costs, to:

(1) land, (2) building and improvements, and (3) identified intangible assets and liabilities, based in each case on their relative estimated fair values.

Intangible assets and liabilities consist of above-market or below-market lease value of in-place leases and the value of in-place leases, as applicable.

Additionally, above-market rents on certain leases under which we are a lessor are accounted for as financing receivables amortizing over the lease term, while below-market rents on certain leases under which we are a lessor are accounted for as prepaid rent.

In an acquisition of multiple properties, we must also allocate the purchase price among the properties.

The allocation of the purchase price is based on our assessment of estimated fair values of the land, building and improvements, and identified intangible assets and liabilities, utilizing market-based evidence and commonly applied valuation approaches.

In addition, any assumed notes payable or mortgages are recorded at their estimated fair values.

The estimated fair values of our mortgages payable have been calculated by discounting the future cash flows using applicable interest rates that have been adjusted for factors, such as industry type, client investment grade, maturity date, and comparable borrowings for similar assets.

The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenue and expenses.

Our estimated fair value determinations are based on management’s judgment, utilizing various factors, including:

market land and building values, market rental rates, discount rates and capitalization rates.

We evaluate whether or not substantially all of the fair value of acquired assets is concentrated in a single identifiable asset or group of identifiable assets to determine whether a transaction is accounted for as an asset acquisition or a business combination.

As the fair value of most of our real estate acquisitions is concentrated in either a single identifiable asset or a group of similar identifiable assets, our real estate transactions are generally accounted for as asset acquisitions, and the transaction costs associated with those acquisitions are capitalized to the basis of the acquired properties.

Any difference between the total cost and estimated fair value of an asset acquisition is allocated to the real estate properties (i.e., land and buildings/improvements) and related lease intangibles (i.e., in-place lease and any related off-market terms) on a relative fair value basis.

All other assets acquired and liabilities assumed are recorded at fair value.

For business combinations, on the other hand, we expense the transaction costs and categorize them as 'Merger, transaction, and other costs, net' in our consolidated statements of income and comprehensive income.

All assets acquired and liabilities assumed in a business combination are recorded at fair value.

The amount of any purchase consideration that exceeds the fair value of all identified assets acquired and liabilities assumed is recognized as goodwill.

To the extent that the purchase price is less than the fair value, however, a gain on bargain purchase is recognized.

As permitted under ASC 805, Business Combinations, we may record measurement period adjustments within one year of the acquisition date.

Whether a transaction is accounted for as an asset acquisition or business combination, the measurement of fair value is based on management's judgment and various factors, including market land and building values, market rental rates, discount rates, and capitalization rates.

Our methodology for measuring and allocating the fair value of real estate acquisitions includes both observable market data (categorized as level 2 on the three-level valuation hierarchy of ASC 820, Fair Value Measurement ), and unobservable inputs that reflect our own internal assumptions (categorized as level 3 under ASC 820).

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From time to time, we have used, and may continue to use, the assistance of independent third parties specializing in real estate valuations to prepare our purchase price allocations.

The allocation of tangible assets (which includes land and buildings/improvements) of an acquired property with an in-place lease is based upon relative fair value.

The allocation of tangible assets (which includes land and buildings/improvements) of an acquired property with an in-place lease is based upon fair value.

Land is typically valued utilizing the sales comparison (or market) approach.

Buildings and improvements are typically valued under the replacement cost approach.

Operating properties may be valued using the direct capitalization method, a type of income approach where a capitalization rate is applied to the stabilized estimated net operating income of a property.

The determined fair value of each property is then allocated to land, building, and improvements at a property level.

In allocating the fair value to identified intangibles for above-market or below-market leases, an amount is recorded based on the present value of the difference between (i) the contractual amount to be paid pursuant to the in-place lease and (ii) our estimate of fair market lease rate for the corresponding in-place lease, measured over the remaining assumed contract term of the lease.

The value of in-place leases is determined by our estimated costs related to acquiring a client and the carrying costs that would be incurred over the vacancy period to locate a client if the property were vacant, considering market conditions and costs to execute similar leases at the time of acquisition.

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 on our consolidated statements of income and comprehensive income.

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to depreciation and amortization expense over the remaining periods of the respective leases.

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 value of in-place leases, exclusive of the value of above-market and below-market

in-place leases, is amortized to depreciation and amortization expense over the remaining periods of the respective leases.

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

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Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets.

Twenty-nine properties were classified as held for sale at December 31, 2023.

Thirty-six properties were classified as held for sale at December 31, 2024.

If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify the property as held for investment.

We measure and record

a property that is reclassified as held for investment at the lower of (i) its carrying value before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for investment or (ii) the estimated fair value at the date of the subsequent decision not to sell.

We measure and record a property that is reclassified as held for investment at the lower of (i) its carrying value before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for investment or (ii) the estimated fair value at the date of the subsequent decision not to sell.

Investment in Unconsolidated Entities.

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The carrying value of our investment is included in 'Investment in unconsolidated entities' on our consolidated balance sheets.

We record our proportionate share of net income from the unconsolidated entities in 'Equity in income and impairment of investment in unconsolidated entities' in our consolidated statements of income and comprehensive income.

We record our proportionate share of net income from the unconsolidated entities in 'Equity in earnings of unconsolidated entities' in our consolidated statements of income and comprehensive income.

With regard to distributions from unconsolidated entities, we have elected the nature of distribution approach as the information is available to us to determine the nature of the underlying activity that generated the distributions.

In accordance with such approach, cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that are generated from other activities, such as property sales, debt refinancing or sale and redemptions of our investments of our investments are classified as a return of investment (cash inflow from investing activities).

In accordance with such approach, cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that are generated from other activities, such as property sales, debt refinancing or sale and redemptions of our investments are classified as a return of investment (cash inflow from investing activities).

Our contribution to the unconsolidated entities or any distributions from them as returns of investment are classified as investing activities.

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Upon the closing of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill.

In connection with the Merger, we recorded goodwill as a result of consideration exceeding the net assets acquired.

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

Deferred Financing Costs.

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Buildings and improvements that are under redevelopment, or are being developed, are carried at cost and no depreciation is recorded on these assets.

Additionally, amounts essential to the development of the property, such as pre-construction, development, construction, interest and other costs incurred during the period of development are capitalized.

Additionally, amounts essential to the development of the property, such as pre-

construction, development, construction, interest and other costs incurred during the period of development are capitalized.

We cease capitalization when the property is available for occupancy upon substantial completion of property improvements to accommodate the client's use, but in any event no later than one year from the completion of major construction activity.

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During our ownership of properties that are accounted for under the equity method and considered unconsolidated entities, and when circumstances indicate that a decrease in the value of an equity method investment has occurred that is other than temporary, we recognize an impairment loss, which requires significant judgment.

To determine whether the impairment loss is other-than-temporary, we consider whether it has the ability and intent to hold the investment until the carrying value is fully recovered.

To determine whether the impairment loss is other-than-temporary, we consider whether we have the ability and intent to hold the investment until the carrying value is fully recovered.

We evaluate the impairment of our investment in unconsolidated entities in accordance with accounting standards for equity investments by first reviewing each investment for indicators of impairment.

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The majority of inputs used to value our derivatives fall within level 2 of the fair value hierarchy.

The recognition of changes in the fair value of derivatives is recorded in net income unless the derivative is designated as a cash flow or net investment hedge, in which case the change in fair value is recorded in other comprehensive income and subsequently reclassified to a designated account in our consolidated statements of income and comprehensive income in the periods during which the hedged transaction affects earnings.

Segment Reporting.

Our business is characterized as owning and leasing commercial properties under long-term, mostly triple net lease agreements (whereby clients are responsible for property taxes, insurance and maintenance

costs), and these economic characteristics are similar across various property types, geographic locations, and industries in which our clients operate.

Information reviewed by our chief operating decision maker in evaluating performance and allocating resources are primarily operating results and cash flow analysis for the overall company.

Therefore, we operate and manage the business in one operating and reportable segment.

ASC 280, Segment Reporting, requires certain entity-wide annual disclosures for entities with a single reportable segment.

The following table disaggregates domestic and international revenue by major asset types and geographic regions (in millions):

Years ended December 31,

Retail $ 2,754.2 $ 374.0 $ 65.4 $ 3,193.6

Industrial 515.4 43.7 — 559.1

205.5 — — 205.5

Rental (including reimbursable) $ 3,475.1 $ 417.7 $ 65.4 $ 3,958.2

Other revenue 120.8

Total revenue $ 4,079.0

Retail $ 2,455.9 $ 243.3 $ 30.9 $ 2,730.1

Industrial 465.2 30.2 — 495.4

74.2 — — 74.2

Rental (including reimbursable) $ 2,995.3 $ 273.5 $ 30.9 $ 3,299.7

Other revenue 44.0

Total revenue $ 3,343.7

Retail $ 1,566.7 $ 138.9 $ 4.2 $ 1,709.8

Industrial 261.5 9.6 — 271.1

84.1 — — 84.1

Rental (including reimbursable) $ 1,912.3 $ 148.5 $ — $ 2,065.0

Other revenue 15.5

Total revenue $ 2,080.5

(1) Other includes properties in Spain, starting in September 2021, in Italy, starting in October 2022, in Ireland, starting in June 2023, and in France, Germany, and Portugal starting in December 2023.

(2) Other includes the following asset types:

office, agriculture and gaming.

Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and finance leases.

As of December 31, 2023, no individual country or asset-type represented more than 10% of total revenue, other than as presented in the tables above.

In addition, as of December 31, 2023, no individual country or asset-type represented more than 10% of the total assets, other than as presented in the tables below.

The following table disaggregates domestic and international total long-lived assets (in millions):

As of December 31,

Long-lived assets $ 36,577.1 $ 6,787.1 $ 1,496.1 $ 44,860.3 $ 33,685.6 $ 4,596.1 $ 582.7 $ 38,864.4

Remaining assets 12,919.1 10,808.7

Total assets $ 57,779.4 $ 49,673.1

(1) Other includes properties in Spain, starting in September 2021, in Italy, starting in October 2022, in Ireland, starting in June 2023, and in France, Germany, and Portugal, starting in December 2023.

Recent Accounting Standards Not Yet Adopted.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes , to enhance income tax disclosures, provide more information about tax risks and opportunities present in worldwide operations, and to disaggregate existing income tax disclosures.

The recognition of changes in the fair

value of derivatives is recorded in net income unless the derivative is designated as a cash flow or net investment hedge, in which case the change in fair value is recorded in other comprehensive income and subsequently reclassified to a designated account in our consolidated statements of income and comprehensive income in the periods during which the hedged transaction affects earnings.

Newly Issued Accounting Standards.

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, requiring all public business entities to provide additional disclosure of the nature of expenses included in the income statement.

This ASU is effective for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, on a prospective basis, with early adoption permitted.

We are currently evaluating the impact on our financial statement disclosures.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes , to enhance income tax disclosures, provide more information about tax risks and opportunities present in worldwide operations, and to disaggregate existing income tax disclosures.

The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively.

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We are currently evaluating the impact on our financial statement disclosures.

In November 2023, FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting , establishing improvements to reportable segments disclosures to enhance segment reporting under Topic 280.

This ASU aims to change how public entities identify and aggregate operating segments and apply quantitative thresholds to determine their reportable segments.

This ASU also requires public entities that operate as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures.

The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and the amendments should be applied retrospectively to all periods presented in the financial statements.

We are currently evaluating the impact on our financial statement disclosures.

Merger with VEREIT, Inc.

and Orion Office REIT Inc.

Merger with VEREIT

On November 1, 2021, we completed our acquisition of VEREIT, Inc.

("VEREIT"), and the merger was consummated.

Pursuant to the terms of the Merger Agreement and subject to the terms thereof, upon the consummation of the merger, (i) each outstanding share of VEREIT common stock, and each outstanding common partnership unit of VEREIT Operating Partnership, L.P., ("VEREIT OP") owned by any of its partners other than VEREIT, Realty Income or their respective affiliates, was automatically converted into 0.705 of newly issued shares of our common stock, or in certain instances, Realty Income L.P.

units, and (ii) each VEREIT OP outstanding common unit owned by VEREIT, Realty Income or their respective affiliates remained outstanding as partnership interests in the surviving entity.

Each outstanding VEREIT stock option and restricted stock unit that were unvested as of November 1, 2021 were converted into equivalent options and restricted stock units, in each case with respect to the share of the Company's common stock, using the equity award exchange ratio in accordance with the Merger Agreement.

Merger and Integration-Related Costs

In conjunction with our merger with VEREIT, we incurred merger-related transaction costs of $ 4.8 million, $ 13.9 million, and $ 167.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Merger and integration-related costs consist of advisory fees, attorney fees, accountant fees, public filing fees and additional incremental and non-recurring costs necessary to convert data and systems, retain employees and otherwise enable us to operate the acquired business or assets efficiently.

Recently Adopted Accounting Standards.

The Company adopted ASU 2023-07, Segment Reporting , during the fourth quarter of 2024, which established improvements to reportable segments disclosures to enhance segment reporting under Topic 280.

This ASU was intended to change how public entities identify and aggregate operating segments and apply quantitative thresholds to determine their reportable segments.

This ASU also required public entities that operate as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures.

Refer to note 20, Segment and Geographic Information, for our updated disclosure.

Merger with Spirit Realty Capital, Inc.

On October 29, 2023, we entered into an Agreement and Plan of Merger (as amended, or the “Merger Agreement”) with Saints MD Subsidiary, Inc., (“Merger Sub”), a Maryland corporation and direct wholly owned subsidiary of Realty Income, and Spirit, a Maryland corporation.

On January 23, 2024, we completed our merger with Spirit.

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.

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 ("Spirit Series A Preferred Stock"), 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, 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.

The Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations , with Realty Income as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value.

The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data):

Shares of Spirit common stock exchanged (1)

Exchange Ratio 0.762

Shares of Realty Income common stock issued 108,308,064

Opening price of Realty Income common stock on January 23, 2024 $ 55.80

Fair value of Realty Income common stock issued to the former holders of Spirit common stock $ 6,043,590

Shares of Realty Income Series A Preferred Stock issued in exchange for Spirit Series A Preferred Stock 6,900,000

Opening price of Realty Income Series A Preferred Stock on January 23, 2024 $ 24.26

Fair value of Realty Income Series A Preferred Stock issued to the former holders of Spirit Series A Preferred Stock $ 167,394

Cash paid for fractional shares $ 51

Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (2)

Consideration transferred $ 6,186,284

(1) Includes 142.1 million shares of Spirit common stock outstanding as of January 23, 2024, which were converted into Realty Income common stock at the Effective Time at an Exchange Ratio of 0.762 per share of Spirit common stock.

The portion of the converted unvested Spirit restricted stock awards related to post-combination expense is removed in footnote (2) below.

(2) Represents the fair value of fully vested Spirit restricted stock and performance share awards that were accelerated and converted into Realty Income common stock at the Effective Time, reflecting the value attributable to post-combination services.

Spirit restricted stock and performance share awards are included in Spirit's outstanding common stock as of the date of the Merger.

The fair value attributable to pre-combination services was $ 41.7 million and is included in the consideration transferred above.

Final Purchase Price Allocation

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

At Acquisition Date As Reported

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

December 31, 2024

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

Buildings and improvements 4,859,162 90,314 4,949,476

Total real estate held for investment 6,713,057 93,561 6,806,618

Real estate and lease intangibles held for sale 35,650 ( 1,583 ) 34,067

Cash and cash equivalents 93,683 — 93,683

Accounts receivable 12,959 ( 145 ) 12,814

Lease intangible assets (1)

2,214,615 ( 32,804 ) 2,181,811

Goodwill 1,259,864 ( 59,143 ) 1,200,721

Other assets (2)

174,672 ( 1,881 ) 172,791

Total assets acquired $ 10,504,500 $ ( 1,995 ) $ 10,502,505

Accounts payable and accrued expenses $ 56,407 $ ( 1,934 ) $ 54,473

Lease intangible liabilities (3)

378,369 ( 203 ) 378,166

Other liabilities 101,954 142 102,096

Term loans 1,300,000 — 1,300,000

Notes payable 2,481,486 — 2,481,486

Total liabilities assumed $ 4,318,216 $ ( 1,995 ) $ 4,316,221

Net assets acquired, at fair value $ 6,186,284 $ — $ 6,186,284

Total purchase price $ 6,186,284 $ — $ 6,186,284

(1) The weighted average amortization period for acquired lease intangible assets is 10.8 years.

(2) Includes $ 53.9 million of gross contractual loans receivable, the fair value of which was $ 47.1 million, and we expect to collect substantially all of the loans receivable as of the acquisition date.

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

The initial assessment of fair value provided in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024 were considered preliminary and were based on information that was available to management at the time the consolidated financial statements were prepared.

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

Before the first anniversary of the date of the Merger, final measurement period adjustments recorded in the year ended December 31, 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.

Approximately $ 1.20 billion has been allocated to goodwill.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed.

The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated financing and corporate overhead cost savings.

None of the goodwill recognized is deductible for tax purposes.

Merger-related Transaction Costs

In conjunction with the Merger, we incurred $ 86.7 million of merger-related transaction costs during the year ended December 31, 2024, 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

Our consolidated results of operations for year ended December 31, 2021 include $ 176.3 million of revenues and $ 36.7 million of net income associated with the results of operations of VEREIT OP.

The following unaudited pro forma information presents a summary of our combined results of operations for the year ended December 31, 2021 as if our merger with VEREIT had occurred on January 1, 2020 (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.

In accordance with ASC 805, Business Combinations , the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc.

Year ended December 31, 2021

The following unaudited pro forma information presents a summary of our combined results of operations for the years ended December 31, 2024 and 2023, respectively, as if the Merger had occurred on January 1, 2023 (in millions, except per share data).

The 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.

Years ended December 31,

Total revenues $ 5,319.1 $ 4,868.2

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Basic and diluted earnings per share $ 1.10 $ 1.12

The unaudited pro forma financial information above includes the following nonrecurring significant adjustment made to account for certain costs incurred as if our merger with VEREIT had been completed on January 1, 2020:

merger and integration-related costs of $ 167.4 million were excluded within the pro forma financial information for 2021.

Orion Divestiture

Following of the closing of our merger with VEREIT, we contributed 92 office real estate assets, a consolidated real estate venture holding one office asset, and an unconsolidated real estate venture holding five office assets to a wholly owned subsidiary named Orion.

On November 12, 2021, we distributed the outstanding shares of Orion common stock to our shareholders on a pro rata basis at a rate of one share of Orion common stock for every ten shares of Realty Income common stock held on November 12, 2021, the applicable record date.

The fair market value of these shares for tax distribution was determined to be $ 20.6272 per share, which was calculated using the five-day volume weighted average share price after issuance.

For more detail, see note 16, Distributions Paid and Payable .

In conjunction with the Orion Divestiture, we incurred approximately $ 1.9 million and $ 6.0 million of transaction costs during the year ended December 31, 2022 and 2021, which were included in 'Merger and integration-related costs' within our consolidated statements of income and comprehensive income.

As part of the Orion Divestiture, Orion paid us a dividend of $ 425.0 million and reimbursed $ 170.2 million to us for the early redemption of mortgage loans underlying the contributed assets prior to the effectuation of the Orion Divestiture.

The distribution of Orion resulted in the derecognition of net assets of $ 1.74 billion, which net of the aforementioned cash payments of $ 595.2 million, resulted in a reduction to additional paid in capital of $ 1.14 billion.

Our consolidated results of operations for the year ended December 31, 2024 include $ 762.7 million of revenues and $ 103.1 million of net income, respectively, associated with the results of operations of Spirit from the closing of the Merger on January 23, 2024 to December 31, 2024.

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

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In-place leases $ 7,347,301 $ 5,500,404

$ 5,500,404 $ 5,324,565

Accumulated amortization of in-place leases

( 1,746,377 ) ( 1,409,878 )

Above-market leases 2,203,420 1,811,400

1,811,400 1,697,367

Accumulated amortization of in-place leases ( 2,487,302 ) ( 1,746,377 )

Accumulated amortization of above-market leases ( 742,338 ) ( 549,319 )

( 549,319 ) ( 443,688 )

Other items 1,911 1,799

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Financing receivables, net $ 1,609,044 $ 1,570,943

Right of use asset - financing leases 706,837 467,920

Right of use asset - operating leases, net 594,712 603,097

Loan receivable, net 828,500 205,339

Value-added tax receivable 100,672 24,726

Right of use asset - financing leases, net 653,353 706,837

Right of use asset - operating leases, net 619,350 594,712

Prepaid expenses 63,499 33,252

Impounds related to mortgages payable 53,005 18,152

Value-added tax receivable 48,075 100,672

Derivative assets and receivables - at fair value 47,165 21,170

Corporate assets, net 12,948 12,334

Credit facility origination costs, net 12,264 17,196

Restricted escrow deposits 36,326 6,247

Interest receivable 16,071 6,139

Impounds related to mortgages payable 14,218 53,005

Corporate assets, net 12,763 12,948

Credit facility origination costs, net 7,331 12,264

Investment in sales type lease 6,138 6,056

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Notes payable - interest payable $ 261,605 $ 218,811

Derivative liabilities and payables – at fair value 119,620 64,724

Property taxes payable 92,440 78,809

Accrued costs on properties under development 65,967 26,559

Value-added tax payable 64,885 23,375

Accrued income taxes 84,884 61,070

Derivative liabilities and payables - at fair value 81,524 119,620

Accrued property expenses 61,118 54,208

Accrued costs on properties under development 59,602 65,967

Value-added tax payable 26,829 64,885

Mortgages, term loans, and credit line - interest payable 4,584 8,580

Accrued merger-related costs 3,482 4,551

Other items 83,348 62,025

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Below-market leases $ 2,119,200 $ 1,728,027

$ 1,728,027 $ 1,617,870

Accumulated amortization of below-market leases ( 483,430 ) ( 321,174 )

$ 1,635,770 $ 1,406,853

$ 1,406,853 $ 1,379,436

Other liabilities consist of the following at:

December 31, 2024 December 31, 2023

Lease liability - operating leases, net $ 425,213 $ 440,096

Lease liability - operating leases $ 452,956 $ 425,213

Rent received in advance and other deferred revenue 352,334 312,195

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Security deposits 35,594 28,250

Other acquisition liabilities 1,647 —

Other items 5,054 1,647

$ 923,128 $ 811,650

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Properties Leasable

(in thousands, unaudited) Investment

($ in millions) Weighted

(Years) Initial

(in thousands) Investment

($ in millions) Weighted Average

(Years) Initial Weighted

Lease Yield (1)

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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 £ 34.3 million of investments in U.K.

development properties and € 29.3 million of investment in Spain development properties, converted at the applicable exchange rates on the funding dates.

(3) Our clients occupying the new properties are 88.7 % retail, 8.5 % industrial, and 2.8 % other property types based on net operating income.

Approximately 31.4 % of the net operating income generated from acquisitions during the year ended December 31, 2023 is from investment grade rated clients, their subsidiaries, or affiliated companies.

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

(2) Includes £ 86.6 million of Sterling-denominated investments and € 60.1 million of Euro-denominated investments, converted at the applicable exchange rates on the funding dates.

(3) Our clients occupying the new properties are 89.3 % retail and 10.7 % industrial based on net operating income.

Approximately 47 % of the net operating income generated from acquisitions during the year ended December 31, 2024 was from investment grade rated clients, their subsidiaries, or affiliated companies at the date of acquisition.

Additionally, in November 2024, we purchased an office property in London for an aggregate purchase price of $ 161.6 million, which will serve as our U.K.

headquarters.

The aggregate purchase price, excluding properties under development as of December 31, 2024, has been allocated as follows (in millions):

Acquisitions - USD Acquisitions - Sterling Acquisitions - Euro

$ 779.5 £ 477.2 € 288.6

Land $ 367.0 £ 279.7 € 56.5

Buildings and improvements 979.6 412.7 133.8

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( 23.1 ) — ( 12.9 )

$ 4,487.7 £ 1,758.6 € 812.4

(1) Sterling-denominated land includes £ 7.1 million of right of use assets under long-term ground leases.

Total $ 1,602.4 £ 806.9 € 196.0

(1) The weighted average amortization period for acquired lease intangible assets is 9.4 years.

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

Sterling-denominated other assets primarily consist of £ 66.1 million of financing receivables with above-market terms and £ 191.1 million of right-of-use assets accounted for as finance leases.

Euro-denominated other assets consist of € 17.4 million of financing receivables with above-market terms, € 10.6 million of right-of-use assets accounted for as finance leases and € 7.2 million of right-of-use assets under ground leases.

(2) USD-denominated other assets primarily consist of $ 159.8 million of financing receivables allocated to sales-leaseback transactions and $ 23.1 million of right-of-use assets accounted for as finance leases.

Sterling-denominated other assets consist entirely of right-of-use assets accounted for as finance leases.

Euro-denominated other assets consist entirely of sale-leasebacks accounted for as financing receivables.

(3) The weighted average amortization period for acquired lease intangible liabilities is 13.2 years.

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

Sterling-denominated other liabilities primarily consist of £ 2.3 million of deferred rent on certain below-market leases and £ 0.2 million of lease liabilities under financing leases.

Euro-denominated other liabilities consists of € 1.6 million of deferred rent on certain below-market leases, € 4.4 million of lease liabilities under ground leases, € 2.1 million of lease liabilities under financing leases, and € 1.5 million of other liabilities.

(4) USD-denominated other liabilities consist entirely of lease liabilities under financing leases.

Euro-denominated other liabilities consist entirely of deferred rent on certain below-market leases.

The aggregate purchase price of the assets acquired during the year ended December 31, 2024 included contingent consideration obligations related to leasing activities for a multi-tenant property acquired.

At December 31, 2024, we had accrued $ 11.5 million for remaining amounts deemed probable and estimable.

The properties acquired during the year ended December 31, 2024 generated total revenue and net income of $ 72.5 million and $ 24.3 million, respectively.

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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 December 31, 2023 (dollars in thousands):

(decrease) to

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Thereafter 334,956 1,887,510

Totals $ 144,772 $ 3,754,028

Total $ 174,688 $ 4,859,999

Gain on Sales of Real Estate

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Investments in Unconsolidated Entities

The following is a summary of our investments in unconsolidated entities as of December 31, 2023 and 2022 (in thousands):

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

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

Investment As of December 31, 2023

12/31/2023 12/31/2022

As of December 31, 2024

December 31, 2024

December 31, 2023

Data Center Joint Venture 80.0 % 2 $ 299,165 $ 226,021

Bellagio Las Vegas Joint Venture - Common Equity Interest 21.9 % 1 274,057 296,097

Bellagio Las Vegas Joint Venture - Preferred Equity Interest n/a n/a 650,000 650,000

Data Center Development Joint Venture 80.0 % 2 226,021 —

Industrial Partnerships 20.0 % — — —

Passport Park Joint Venture (2)

95.0 % 3 6,477 —

Industrial Partnerships n/a n/a — —

Total investment in unconsolidated entities $ 1,229,699 $ 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 $ 7.9 million as of December 31, 2024.

Equity in income and impairment of investment in unconsolidated entities consists of the following (in thousands):

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

(2) Our investment in Passport Park Joint Venture includes $ 4.2 million in preferred equity.

The joint venture is required to redeem all of the preferred equity investment in June 2028, with two extension options available.

Equity in earnings of unconsolidated entities consists of the following (in thousands):

Years ended December 31,

Investment 2023 2022 2021

Bellagio Las Vegas Joint Venture - Common Equity Interest $ 2,139 $ — $ —

2024 2023 2022

Data Center Development Joint Venture $ 6,940 $ — $ —

Bellagio Las Vegas Joint Venture - Common Equity Interest ( 980 ) 2,139 —

Passport Park Joint Venture — — —

Industrial Partnerships 1,833 407 ( 6,448 )

Equity in income and impairment of investment in unconsolidated entities

Equity in earnings in unconsolidated entities

$ 7,793 $ 2,546 $ ( 6,448 )

Passport Park Joint Venture

In November 2024, we established a joint venture with Trammell Crow Company ("TCC") to develop and operate three industrial facilities in Irving, Texas.

As of December 31, 2024, we have invested $ 6.2 million, including $ 5.7 million in cash, in exchange for a 95.0 % equity interest in the joint venture, including preferred equity.

We have committed to investing an additional $ 158.0 million to finance the development.

We have determined that we are not the primary beneficiary of this VIE because power to direct all activities significantly affecting the joint venture’s economic performance is shared.

TCC is the managing member, and we do not have substantive kick-out rights.

We will continuously evaluate whether we are the primary beneficiary as power to direct significant activities of the VIE can change over the life of the joint venture.

Our maximum exposure to loss is limited to our common and preferred equity investments, including the committed development funding.

Data Center Joint Venture

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

in November 2023.

This joint venture owns and operates two data centers.

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

As of December 31, 2024, each partner funded its pro rata share of the remaining estimated development cost for the first phase of the project, which was completed during 2024.

Bellagio Las Vegas Joint Venture Interests

In October 2023, we invested $ 951.4 million to acquire common and preferred interests from Blackstone Real Estate Trust, Inc.

("BREIT") in a joint venture that owns a 95.0 % interest in the real estate of The Bellagio Las Vegas.

The investment included $ 301.4 million of common equity in the joint venture in exchange for an indirect interest of 21.9 % in the property and a $ 650.0 million preferred equity interest in the joint venture.

The joint venture we formed with Blackstone Real Estate Income Trust owns a 95.0 % equity 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 years ended December 31, 2024 and 2023, we recognized interest income of $ 52.8 million and $ 13.0 million for 8.1 % preferential cumulative distributions, included 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 December 31, 2024, all of which was non-recourse to us with limited customary exceptions.

The Company's preferred equity investment entitles it to certain preferential cumulative distributions out of operating and capital proceeds pursuant to the terms and conditions of the preferred equity.

There is no maturity date on the preferred equity investment, which bears interest of 8.1 %, payable monthly in arrears in cash, with rate increases commencing in year 7.

BREIT may cause the joint venture to redeem all or a portion of the preferred equity investment, and Realty Income may cause the joint venture to redeem all or a portion of the preferred equity investment if BREIT or its affiliates cease to control the joint venture, in each case, for a cash payment equaling the sum of the amount to be redeemed plus, prior to the first anniversary of the transaction, a redemption fee of 3.0 %, or, after the first anniversary and prior to the fourth anniversary of the transaction, a redemption fee of 2.0 %.

Interest income is determined by applying the interest rate to the sum of the outstanding balance of preferred equity and any accrued but unpaid interests.

During the year ended December 31, 2023, we recognized interest income of $ 13.0 million included within 'Other revenue' in our consolidated statements of income and comprehensive income.

We have determined that this joint venture is a VIE, and we are not the primary beneficiary as we do not have power to direct activities that most significantly impact the joint venture's economic performance.

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Our maximum exposure to loss associated with this VIE is limited to our common and preferred equity investments.

Data Center Development Joint Venture

In November 2023, we established a joint venture with Digital Realty Trust, Inc.

("Digital Realty") to support the development of two build-to-suit data centers in Northern Virginia.

We invested $ 201.2 million to acquire an 80.0 % equity interest in the venture, while Digital Realty maintains a 20.0 % interest.

We have determined that this joint venture is a VIE.

While we have an 80.0 % interest in the joint venture, we are not the primary beneficiary because we do not have power to direct activities that significantly impact the joint venture's economic performance as we were not engaged when the joint venture partner initially developed the construction plan and entered into the lease agreement.

Digital Realty is the managing member, and we do not have substantive kick-out rights.

We will continuously evaluate whether we are the primary beneficiary as the power to direct activities that most significantly affect economic performance can change over the life of the joint venture.

Our maximum exposure to loss associated with this VIE is limited to our equity investment and our pro rata share of the remaining $ 117.7 million of estimated development costs for the first phase of the project.

Industrial Partnerships

All seven assets held by our industrial partnerships were sold during the year ended December 31, 2022.

As the portion of the net proceeds applied to our investment basis that we expected to receive at closing was less than our $ 121.4 million carrying amount of investment in unconsolidated entities, we recognized an other than temporary impairment of $ 8.5 million during the year ended December 31, 2022.

The other than temporary impairments are included in 'Equity in income and impairment of investment in unconsolidated entities' in our consolidated statements of income and comprehensive income for the periods presented.

Investments in Loans

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

Amortized Cost Allowance Carrying Amount (1)

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

Mortgage Loan 33,500 — 33,500

All seven assets held by our industrial partnerships were sold during the year ended December 31, 2022, resulting in the recognition of an other-than-temporary impairment of $ 8.5 million, which was included in 'Equity in earnings of unconsolidated entities' for the year ended December 31, 2022.

During the years ended December 31, 2024 and 2023, equity in earnings was primarily related to the resolution of income tax disputes and resulting distribution of cash the partnership had reserved for possible tax payments.

Investments in Loans and Financing Receivables

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

December 31, 2024

Maturity Amortized Cost Allowance Carrying Amount (1)

Senior Secured Notes Receivable October 2029 - November 2030 $ 797.2 $ ( 11.4 ) $ 785.8

Mortgage Loan September 2038 33.5 — 33.5

Unsecured Loan December 2026 10.2 ( 0.9 ) 9.3

Total $ 840.9 $ ( 12.3 ) $ 828.6

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

Senior Secured Note Receivable

In November 2023, the Company purchased a Sterling-denominated senior secured note with a principal amount of £ 142.0 million, equivalent to $ 180.9 million as of December 31, 2023.

The interest only note bears interest at Sterling Overnight Indexed Average (“SONIA”) plus 6.75 % and matures in October 2029.

December 31, 2023

Maturity Amortized Cost Allowance Carrying Amount (1)

Senior Secured Note Receivable October 2029 $ 174.3 $ ( 2.5 ) $ 171.8

Mortgage Loan September 2038 33.5 — 33.5

Total $ 207.8 $ ( 2.5 ) $ 205.3

(1) The total carrying amount of the investment in loans excludes accrued interest of $ 13.8 million and $ 3.4 million as of December 31, 2024 and 2023, respectively, which is recorded to 'Other assets, net' on our consolidated balance sheets.

Senior Secured Notes Receivable

In December 2024, we acquired a senior secured note with a principal amount of £ 200.0 million, equivalent to $ 250.4 million as of December 31, 2024.

The interest-only note matures in November 2030 and bears interest at Sterling Overnight Indexed Average (“SONIA”) plus a margin ranging from 4.50 % to 5.25 %, based on the borrower's leverage ratio.

As of December 31, 2024, the margin is determined to be 5.25 %.

The Company paid £ 199.0 million for the note and accounted for the discount at amortized cost.

The discount is being amortized over the term of the note.

The discount will be amortized over the term of the note.

In September 2024, our interest in a loan with a carrying amount of $ 5.3 million, which was acquired in conjunction with the Merger, 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.

In May 2024, we acquired a senior secured note, maturing in May 2030, with a principal amount of £ 300.0 million, equivalent to $ 375.6 million as of December 31, 2024.

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

In November 2023, we acquired a senior secured note with a principal amount of £ 142.0 million, equivalent to $ 177.8 million as of December 31, 2024.

The interest-only note bears interest that has been adjusted to SONIA plus 5.75 % during the year ended December 31, 2024 and matures in October 2029.

The Company paid £ 136.7 million for the note and accounted for the discount at amortized cost.

The discount will be amortized over the term of the note.

Mortgage Loan

In October 2023, the Company issued a $ 33.5 million mortgage loan which is collateralized by nine automotive service properties located across seven different states.

In October 2023, we issued a $ 33.5 million mortgage loan which is collateralized by nine automotive service properties located across seven different states.

The interest-only loan bears interest at 8.37 % subject to annual increases and matures in October 2038.

Unsecured Loan

In conjunction with the Merger, we acquired an 11.0 % fixed-rate, unsecured loan with a principal amount of $ 11.0 million.

This interest-only loan was recorded at its acquisition-date fair value of $ 9.8 million and matures in December 2026.

Financing Receivables

The following table presents information about our investments in sale-leaseback transactions accounted for as financing receivables in accordance with ASC 842, Leases as of December 31, 2024 and December 31, 2023 (dollars in millions):

Carrying Value as of

Maturity December 31, 2024 December 31, 2023

Financing receivables, net 2028 - 2048 $ 1,609.0 $ 1,570.9

Total $ 1,609.0 $ 1,570.9

Allowance for Credit Losses

The following table summarizes the activity within the allowance for credit losses related to loans and financing receivable for the year ended December 31, 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)

10.0 96.8 106.8

Initial allowance for PCD assets (2)

Write-offs (3)

( 1.8 ) — ( 1.8 )

Foreign currency remeasurement ( 0.2 ) — ( 0.2 )

Allowance for credit losses at December 31, 2024

$ 12.3 $ 99.2 $ 111.5

(1) During the year ended December 31, 2024, provisions for credit losses on loans receivable were primarily attributable to loans acquired during 2024.

The increase for credit losses on financing receivables is primarily due to a client in the convenience store industry that defaulted on its lease payments and was fully reserved for, in addition to a partial reserve for a significant decline in the credit worthiness of a client in the automotive services industry.

(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 the Merger.

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

Revolving Credit Facility and Commercial Paper Programs

Credit Facility

We have a $ 4.25 billion unsecured revolving multicurrency credit facility that matures in June 2026, includes two six-month extensions that can be exercised at our option, and allows us to borrow in up to 14 currencies, including USD.

We have a $ 4.25 billion unsecured revolving multi-currency credit facility that matures in June 2026, includes two six-month extensions that can be exercised at our option, and allows us to borrow in up to 14 currencies, including USD.

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 the Secured Overnight Financing Rate ("SOFR"), plus 0.725 % with a SOFR adjustment charge of 0.10 % and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.95 % over SOFR, British Pound Sterling at

the SONIA, plus 0.725 % with a SONIA adjustment charge of 0.0326 % and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.8826 % over SONIA, and Euro Borrowings at one-month Euro Interbank Offered Rate (“EURIBOR”), plus 0.725 %, and a revolving credit facility fee of 0.125 %, for all-in pricing of 0.85 % over one-month EURIBOR.

As of December 31, 2023, we had a borrowing capacity of $ 4.25 billion available on our revolving credit facility (subject to customary conditions to borrowing) and no outstanding balance as compared to an outstanding balance at December 31, 2022 of $ 2.0 billion, comprised of € 1.8 billion Euro and £ 70.0 million Sterling borrowings.

The weighted average interest rate on outstanding borrowings under our revolving credit facility was 4.8 % during the year ended December 31, 2023, and 1.8 % during the year ended December 31, 2022.

Under our revolving credit facility, our investment grade credit ratings at December 31, 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, for British Pound Sterling ("GBP") borrowings, 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 December 31, 2024, we had a borrowing capacity of $ 3.19 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $ 1.1 billion, including £ 376.0 million GBP and € 572.0 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 4.8 % during the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 4.4 %.

Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at December 31, 2024, we were in compliance with the covenants under our revolving credit facility.

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Commercial Paper Programs

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

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

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

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

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

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

(“VEREIT”) in 2021 and unexchanged 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 December 31, 2023, the balance of borrowings outstanding under our commercial paper programs was $ 764.4 million, including € 583.0 million of Euro-denominated borrowings, as compared to $ 701.8 million outstanding commercial paper borrowings, including € 361.0 million of EUR borrowings, at December 31, 2022.

The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.8 % for the year ended December 31, 2023, and 1.6 % for the year ended December 31, 2022.

As of December 31, 2023, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.4 %.

As of December 31, 2024, the balance of borrowings outstanding under our commercial paper programs was $ 67.3 million, including € 65.0 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 4.6 % and 4.8 % for the years ended December 31, 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.

The commercial paper borrowings generally carry a term of less than a year.

We regularly review our credit facility and commercial paper programs and may seek to extend, renew or replace our credit facility and commercial paper programs, to the extent we deem appropriate.

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

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

The 2023 term loans 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 Sterling-denominated loans, and EURIBOR for Euro-denominated loans.

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

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

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

In conjunction with this term loan, we entered into an interest rate swap and as of December 31, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8 %.

At December 31, 2023, deferred financing costs of $ 0.1 million are included net of the term loans principal balance, as compared to $ 0.2 million related to our $ 250.0 million term loan at December 31, 2022, on our consolidated balance sheets.

We review our credit facility and commercial paper programs and may seek to extend, renew, or replace our credit facility and commercial paper programs, to the extent we deem appropriate.

In January 2024, in connection with the Merger, we entered into an amended and restated term loan agreement (which replaced Spirit's then-existing term loans with various lenders).

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”).

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.

In January 2024, we entered into interest rate swaps which fix our per annum interest rate at 4.9 % until January 2026.

As of December 31, 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 maturity date for the 2023 term loans was January 2025;

however, in December 2024, we exercised the remaining twelve-month extension option, extending the maturity to January 2026.

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 EUR-denominated loans.

During the year ended December 31, 2024, we repaid our $ 250.0 million senior unsecured term loan in full upon maturity.

Deferred financing costs were $ 2.2 million at December 31, 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.

1 unchanged sentence

Mortgages Payable

During the year ended December 31, 2023, we made $ 22.0 million in principal payments, including the full repayment of two mortgages for $ 17.4 million.

During the year ended December 31, 2022, we made $ 312.2 million in principal payments, including the full repayment of 12 mortgages for $ 308.0 million.

During the year ended December 31, 2024, we made $ 740.5 million in principal payments, including the full repayment of five mortgages for $ 735.9 million.

No mortgages were assumed during the year ended December 31, 2024.

We assumed eight mortgages on 17 properties totaling $ 45.1 million during the year ended December 31, 2022.

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 December 31, 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 $ 0.4 million and $ 0.8 million at December 31, 2023 and 2022, respectively.

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

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

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

Properties (1)

1 unchanged sentence

Balance Unamortized

Premium (Discount)

Financing Costs

2 unchanged sentences

(1) At December 31, 2024, there were 11 mortgages on 17 properties and at December 31, 2023, there were 16 mortgages on 131 properties.

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

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

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

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

(3) Effective interest rates ranged from 0.5 % to 6.6 % and 2.7 % to 6.6 % at December 31, 2023 and December 31, 2022, respectively.

The following table summarizes the maturity of mortgages payable as of December 31, 2023, excluding $ 0.8 million related to unamortized net discounts and deferred financing costs (dollars in millions):

The following table summarizes the maturity of mortgages payable as of December 31, 2024, excluding $ 0.5 million related to unamortized net premiums and discounts and deferred financing costs (dollars in millions):

Year of Maturity

1 unchanged sentence

Notes Payable

At December 31, 2023, our senior unsecured notes and bonds are USD-denominated, Sterling-denominated, and Euro-denominated.

At December 31, 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.

The carrying value within the table below includes a portion of certain outstanding notes that have been assumed in both current and historical mergers that were not exchanged for new notes issued by Realty Income.

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, (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):

Carrying Value (USD) as of

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

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

December 31, 2024 December 31, 2023

4.600 % Notes due 2024

13 unchanged sentences

4.450 % Notes due 2026 (1)

September 15, 2026 $ 299,968 299,968 —

4.125 % Notes due 2026

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

4 unchanged sentences

3.200 % Notes due 2027 (1)

January 15, 2027 $ 299,984 299,984 —

1.125 % Notes due 2027 (2)

July 13, 2027 £ 400,000 500,760 509,520

6 unchanged sentences

2.100 % Notes due 2028 (1)

March 15, 2028 $ 449,994 449,994 —

2.200 % Notes due 2028

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

2 unchanged sentences

4.750 % Notes due 2029

February 15, 2029 $ 450,000 450,000 —

3.250 % Notes due 2029

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

4.000 % Notes due 2029 (1)

July 15, 2029 $ 399,999 399,999 —

5.000 % Notes due 2029 (2)

October 15, 2029 £ 350,000 438,165 —

3.100 % Notes due 2029

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

3.400 % Notes due 2030 (1)

January 15, 2030 $ 500,000 500,000 —

4.850 % Notes due 2030

March 15, 2030 $ 600,000 600,000 600,000

8 unchanged sentences

3.200 % Notes due 2031 (1)

February 15, 2031 $ 449,995 449,995 —

5.750 % Notes due 2031 (2)

December 5, 2031 £ 300,000 375,570 382,140

2.700 % Notes due 2032 (1)

February 15, 2032 $ 350,000 350,000 —

3.180 % Notes due 2032

June 30, 2032 £ 345,000 431,906 439,461

5 unchanged sentences

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

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

December 31, 2024 December 31, 2023

1.750 % Notes due 2033 (2)

3 unchanged sentences

5.125 % Notes due 2034

February 15, 2034 $ 800,000 800,000 —

2.730 % Notes due 2034

May 20, 2034 £ 315,000 394,348 401,247

8 unchanged sentences

5.250 % Notes due 2041 (2)

September 4, 2041 £ 350,000 438,165 —

2.500 % Notes due 2042 (2)

January 14, 2042 £ 250,000 312,975 318,450

1 unchanged sentence

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

5.375 % Notes due 2054

September 1, 2054 $ 500,000 500,000 —

Total principal amount $ 22,938,737 $ 18,562,064

Unamortized net premiums, deferred financing costs, and cumulative basis adjustment on fair value hedge (2)

Unamortized net (discounts) premiums, deferred financing costs, and cumulative basis adjustment on fair value hedges (3)(4)

( 281,145 ) 40,255

$ 22,657,592 $ 18,602,319

(1) In connection with the Merger, we completed our debt exchange offer to exchange all outstanding notes issued by Spirit Realty, L.P.

("Spirit OP") on January 23, 2024 for new notes issued by Realty Income.

Prior to the completion of the Merger on January 23, 2024, these notes were not the obligation of Realty Income.

Additional details regarding the exchange offers are provided in the Note Exchange Offers Associated with the Merger section below.

(2) Interest paid annually.

Interest on the remaining senior unsecured notes and bond obligations included in the table is paid semi-annually.

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

See note 14, Derivative Instruments for further details.

The following table summarizes the maturity of our notes and bonds payable as of December 31, 2023, excluding $ 40.3 million related to unamortized net premiums, deferred financing costs, and basis adjustment on interest rate swaps designated as fair value hedges (dollars in millions):

Year of Maturity

(3) As a result of the Merger, the carrying values of the senior notes exchanged were adjusted to fair value.

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

During the three months ended December 31, 2024, these interest rate swaps totaling $ 500 million notional were terminated.

The following table summarizes the maturity of our notes and bonds payable as of December 31, 2024, excluding unamortized net premiums and discounts, deferred financing costs (dollars in millions):

Year of Maturity Principal

2025 $ 1,050.0

Thereafter 12,312.8

Total $ 22,938.7

As of December 31, 2024, the weighted average interest rate on our notes and bonds payable was 3.8 %, and the weighted average remaining years until maturity was 6.6 years.

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Note Issuances

During the years ended December 31, 2023 and 2022 we issued the following notes and bonds (in millions):

2023 Issuances Date of Issuance Maturity Date Principal amount Price of par value Effective yield to maturity

5.050 % Notes

January 2023 January 2026 $ 500.0 (1)

99.618 % 5.189 %

4.850 % Notes

January 2023 March 2030 $ 600.0 98.813 % 5.047 %

4.700 % Notes

April 2023 December 2028 $ 400.0 98.949 % 4.912 %

4.900 % Notes

April 2023 July 2033 $ 600.0 98.020 % 5.148 %

4.875 % Notes

July 2023 July 2030 € 550.0 99.421 % 4.975 %

5.125 % Notes

July 2023 July 2034 € 550.0 99.506 % 5.185 %

5.750 % Notes

December 2023 December 2031 £ 300.0 99.298 % 5.862 %

6.000 % Notes

December 2023 December 2039 £ 450.0 99.250 % 6.075 %

2022 Issuances Date of Issuance Maturity Date Principal amount Price of par value Effective yield to maturity

1.875 % Notes

January 2022 January 2027 £ 250.0 99.487 % 1.974 %

During the year ended December 31, 2024, we issued the following notes and bonds:

2024 Issuances Date of Issuance Maturity Date Principal amount

(in millions) Price of par value Effective yield to maturity

4.750 % Notes

January 2022 January 2042 £ 250.0 98.445 % 2.584 %

January 2024 February 2029 $ 450.0 99.23 % 4.923 %

5.125 % Notes

June 2022 June 2030 £ 140.0 100.000 % 3.160 %

January 2024 February 2034 $ 800.0 98.91 % 5.265 %

5.375 % Notes

June 2022 June 2032 £ 345.0 100.000 % 3.180 %

August 2024 September 2054 $ 500.0 98.37 % 5.486 %

5.000 % Notes

June 2022 June 2037 £ 115.0 100.000 % 3.390 %

September 2024 October 2029 £ 350.0 99.14 % 5.199 %

5.250 % Notes

October 2022 October 2032 $ 750.0 99.879 % 5.641 %

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

In January 2024, we issued $ 450.0 million of 4.750 % senior unsecured notes due February 2029 and $ 800.0 million of 5.125 % senior unsecured notes due February 2034.

See note 21, Subsequent Events, for further details.

Note Repayments

We redeemed the following principal amounts (in millions) of certain outstanding notes, prior to their maturity.

As a result of these early redemptions, we recognized the following losses on extinguishment of debt (in millions) in our consolidated statements of income and comprehensive income.

There were no comparable repayments for the years ended December 31, 2023 or 2022.

Loss on Extinguishment of Debt

2021 Repayments Principal Amount (1)

Amount of Loss Period Recognized

4.650 % notes due August 2023 redeemed in December 2021

$ 750.0 $ 46.4 December 31, 2021

3.25 % notes due October 2022 redeemed in January 2021

$ 950.0 $ 46.5 March 31, 2021

(1) The redeemed principal amounts presented exclude the amounts we paid in accrued and unpaid interest.

Issuances of Common Stock

At-the-Market ("ATM") Program

In August 2023, we replaced our prior ATM program with a new ATM program, pursuant to which we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices.

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

Of the 120.0 million shares of our common stock available for sale under the prior ATM program at its inception, a total of 101.8 million of those shares were sold, the remainder of which were terminated.

As of December 31, 2023, we had 81.3 million shares remaining for future issuance under our new ATM program.

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

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

Years ended December 31,

September 2024 September 2041 £ 350.0 96.21 % 5.601 %

Note Exchange Offers Associated with the Merger

As part of the Merger, Realty Income exchanged the following notes issued by Spirit OP, a wholly owned subsidiary of the Company with notes of substantially identical economic terms issued by Realty Income:

Series of Spirit Notes Tenders and Consents Received as of the Expiration Date

(in millions) Percentage of Total Outstanding Principal Amount of Such Series of Spirit Notes

4.450 % Notes due September 2026

$ 291.7 97.24 %

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

3.200 % Notes due January 2027

$ 292.7 97.56 %

Gross proceeds $ 5,483.2 $ 4,599.4 $ 3,207.9

Sales agents' commissions and other offering expenses ( 43.7 ) ( 43.4 ) ( 28.4 )

Net proceeds $ 5,439.5 $ 4,556.0 $ 3,179.5

(1) During the year ended December 31, 2023, 91.1 million shares were sold and 91.7 million shares were settled pursuant to forward sale confirmations.

In addition, as of December 31, 2023, 6.2 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $ 55.03 per share.

We currently expect to fully settle forward sale agreements outstanding by June 30, 2024, representing $ 337.8 million in net proceeds, for which the weighted average forward price at December 31, 2023 was $ 54.70 per share.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

Our DRSPP, provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions.

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

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

At December 31, 2023, we had 11.0 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):

Years ended December 31,

2.100 % Notes due March 2028

$ 443.8 98.62 %

Shares of common stock issued under the DRSPP program 198 176 168

Gross proceeds $ 11.5 $ 11.7 $ 11.2

Issuance of Common Stock in Connection with VEREIT Acquisition

On November 1, 2021, we completed our acquisition of VEREIT.

As a result of the merger, former VEREIT common stockholders, VEREIT OP common unitholders and awardees of vested share awards separated from Realty Income and received approximately 162 million shares of Realty Income common stock, based on the shares of VEREIT common stock and common units of VEREIT OP outstanding as of October 29, 2021.

Issuances of Common Stock in Underwritten Public Offerings

During 2021, we issued an aggregate of 21.3 million shares of common stock, including 2.8 million shares purchased by the underwriters upon the exercise of their option to purchase additional shares.

After deducting underwriting discounts, the aggregate net proceeds of $ 1.3 billion were used to fund investment opportunities, for general corporate purposes and working capital.

There were no comparative offerings during the years ended December 31, 2023 or 2022.

4.000 % Notes due July 2029

$ 391.7 97.93 %

3.400 % Notes due January 2030

$ 484.5 96.91 %

3.200 % Notes due February 2031

$ 445.0 98.90 %

2.700 % Notes due February 2032

$ 347.6 99.31 %

To induce holders of the Spirit OP notes to participate in the exchange, Realty Income offered noteholders electing to exchange their notes a cash payment equal to 10 basis points of the note principal amount held.

Across the various note classes, Realty Income had a success rate of approximately 98.1 % on the exchange, resulting in a cash payment of $ 2.7 million to participating noteholders.

The exchange was accounted for as a modification of the existing Spirit OP notes assumed in the Merger.

The interest rate, interest payment dates, redemption terms and maturity of each series of Realty Income notes issued by Realty Income in the exchange offers were the same as those of the corresponding series of Spirit notes exchanged.

With respect to the notes originally issued by Spirit OP that remained outstanding, we amended the indenture governing such notes to, among other things, eliminate substantially all of the restrictive covenants in such indenture.

Note Repayments

During the year ended December 31, 2024, we repaid the following notes, plus accrued and unpaid interest upon maturity.

There were no comparable repayments for the year ended December 31, 2023.

2024 Repayments Date of Issuance Maturity Date Principal amount

(in millions)

4.600 % Notes

February 2014 February 2024 $ 500.0

3.875 % Notes

June 2014 July 2024 $ 350.0

Noncontrolling Interests

As of December 31, 2023, we have seven 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.

As of December 31, 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.

At December 31, 2024, outstanding common partnership units in Realty Income, L.P.

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None of our common partnership units have voting rights.

Common partnership units are entitled to monthly distributions equal to the amount paid to common stockholders of Realty Income, and are redeemable in cash or Realty Income common stock, at our option, and at a conversion ratio of 1.02934 due to the Orion Divestiture, subject to certain exceptions.

Prior to the Orion Divestiture, the conversion ratio was one to one.

These issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate.

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Realty Income, L.P.

Noncontrolling

Interests Total

Other Noncontrolling Interests Total

Carrying value at December 31, 2022

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Contributions — 40,097 40,097

51,221 — 51,221

Reallocation of equity 3,210 — 3,210

Distributions ( 5,663 ) ( 3,677 ) ( 9,340 )

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Distributions ( 6,810 ) ( 3,588 ) ( 10,398 )

( 5,663 ) ( 3,677 ) ( 9,340 )

Allocation of net income 5,898 671 6,569

3,934 671 4,605

Issuance of common partnership units 54,643 ( 7,390 ) 47,253

Carrying value at December 31, 2024

$ 167,803 $ 43,145 $ 210,948

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

1,060,709 units were outstanding as of December 31, 2021.

(2) In September 2022, we issued 734,458 common partnership units in Realty Income, L.P.

in connection with the acquisition of nine properties and recorded $ 51.2 million of contributions to noncontrolling interests.

(3) Primarily related to contributions of $ 39.2 million for the issuance of a 5.0 % joint venture interest as partial consideration paid on property acquisitions.

The remaining amount represents contributions for two development joint ventures.

(4) Includes a non-cash reduction of noncontrolling interest of $ 1.5 million from our partner's responsibility to absorb construction cost overages for a development joint venture during the year ended December 31, 2023.

(1) 2,681,808 units were outstanding as of December 31, 2024 and 1,795,167 units were outstanding as of December 31, 2023 and 2022.

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 we 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 December 31, 2024, we are considered the primary beneficiary of Realty Income, L.P.

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Loans receivable $ 828.5 $ — $ 791.4 $ 43.7

$ 205.3 $ — $ 171.8 $ 33.5

Derivative assets 47.2 — 47.2 —

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Total liabilities $ 23,101.5 $ — $ 20,747.0 $ 1,008.0

(1) Considering the proximity of time between the issuance and measurement of the two loans acquired during the fourth quarter of 2023, we have concluded that the carrying value reasonably approximates the estimated fair value at December 31, 2023.

We determined our investment in mortgage loan is categorized as level 3 of the fair value hierarchy given our experience with mortgage borrowings.

December 31, 2023

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Carrying Value Level 1 Level 2 Level 3

Loans receivable $ 205.3 $ — $ 171.8 $ 33.5

Derivative assets 21.2 — 21.2 —

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Financial Instruments Not Measured at Fair Value on our Consolidated Balance Sheets

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

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

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

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Carrying value

Loans receivable $ 828.5 $ 835.1 $ 205.3 $ 205.3

Mortgages payable (1)

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$ 22,938.7 $ 21,593.5 $ 18,562.1 $ 17,603.7

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

The unamortized balance of these net discounts was $ 0.4 million at December 31, 2023, and $ 12.4 million of net premiums at December 31, 2022.

Also excludes deferred financing costs of $ 0.4 million at December 31, 2023, and $ 0.8 million at December 31, 2022.

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

The unamortized balance of the net premiums was $ 125.3 million at December 31, 2023, and $ 224.6 million at December 31, 2022.

Also excludes deferred financing costs of $ 83.8 million and a favorable basis adjustment on interest rate swaps designated as fair value hedges of $ 1.3 million at December 31, 2023, and $ 60.7 million of deferred financing costs at December 31, 2022.

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

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

Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to our notes and bonds payable is categorized as level 2 of the fair value hierarchy.

(1) Excludes non-cash net premiums and discounts as well as deferred financing costs recorded on mortgages payable.

Excludes non-cash net premiums and discounts, deferred financing costs, and the cumulative basis adjustment on fair value hedges recorded on notes payable.

The estimated fair values of our mortgage loan receivable, unsecured loan receivable, mortgages payable, and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant input, such as 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 the named financial instruments are categorized as level 3 of the fair value hierarchy.

The estimated fair values of our senior secured loans receivable, publicly-traded senior notes and bonds payable are based upon indicative market prices and recent trading activity of each financial instrument.

Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to these financial instruments is categorized as level 2 of the fair value hierarchy.

Financial Instruments Measured at Fair Value on a Recurring Basis

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However, at December 31, 2024 and 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.

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

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

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

Years ended December 31,

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Carrying value prior to impairment $ 770.7 $ 194.5 $ 140.9

total provisions for impairment (1)

total provisions for impairment of real estate (1)

( 319.0 ) ( 82.2 ) ( 25.9 )

Carrying value after impairment $ 451.7 $ 112.3 $ 115.0

(1) Excludes provision for current expected credit loss of $ 4.9 million at December 31, 2023.

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.

Number of properties:

Classified as held for sale 17 2 —

Classified as held for investment 88 16 5

Sold 132 94 89

(1) Real estate assets that were deemed to be impaired for the year ended December 31, 2024 primarily relate to two office properties which were acquired and retained in our merger with VEREIT in 2021, properties leased to clients in bankruptcies or financial distress, as well as 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 applying a capitalization rate to estimated net operating income of a property, analysis of recent comparable sales transactions and purchase offers received from third parties, which are level 3 inputs.

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

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

Derivative Designated as Hedging Instruments - Cash Flow Hedges

We entered into foreign currency forward contracts to sell GBP, USD, and EUR and buy EUR, USD, and GBP to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in British Pound Sterling ("GBP") and Euro ("EUR").

Derivatives Designated as Hedging Instruments - Cash Flow Hedges

We enter into foreign currency forward contracts to sell GBP and EUR and buy USD to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in GBP and EUR.

Forward points on the forward contracts are included in the assessment of hedge effectiveness.

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

To mitigate the impact of fluctuating interest rates, we also entered into interest rate swaption agreements during March 2023, structuring them as swaption corridors, in anticipation of issuing USD denominated bonds.

Interest rate swaption corridors are a combination of two swaption positions.

Specifically, we purchased a payer swaption, an option that allows us to enter into a swap where we will pay the fixed rate and receive the floating rate of the swap, and we also sold a payer swaption, an option that provides the counterparty with the right to enter into a swap where we will receive the fixed rate and pay the floating rate of the swap.

The total premium paid for the March 2023 transaction was $ 7.6 million.

All three hedging instruments are designated as cash flow hedges.

Derivative Designated as Hedging Instruments - Fair Value Hedges

We also execute variable-to-fixed interest rate swaps and use interest rate swaption agreements to add stability to interest expense and to manage our exposure to interest rate movements associated with our term loans or forecasted transactions.

When it is probable that the forecasted transaction will not occur by the end of the specific time period or within an additional two-month period thereafter, the net derivative instrument gain or loss and any gains and losses that were reported in AOCI pursuant to the hedge of a forecasted transaction are recognized immediately in earnings through the caption entitled 'Interest' in our consolidated statements of income and comprehensive income.

Derivatives Designated as Hedging Instruments - Fair Value Hedges

Periodically, we enter into and designate fixed-to-floating interest rate swaps to manage interest rate risk by managing our mix of fixed-rate and variable-rate debt.

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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 (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.

Derivative Designated as Hedging Instruments - Net Investment Hedges

During the fourth quarter of 2023, we designated the three existing cross-currency swaps that had not been designated as hedging instruments through the third quarter of 2023 as net investment hedges to mitigate the risks associated with our investment in EUR-denominated foreign operations.

These cross-currency swaps qualify as net investment hedges under the criteria prescribed in accordance with ASC Topic 815-20, Hedging - General .

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.

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.

Derivatives Designated as Hedging Instruments - Net Investment Hedges

To mitigate the foreign currency exchange rate variations associated with our investment in EUR-denominated foreign operations, we may enter into derivative instruments, such as cross-currency swaps that qualify as net investment hedges under the criteria prescribed in accordance with ASC 815-20, Hedging - General .

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.

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 the company’s 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).

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 hedges.

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 December 31, 2024, the total principal amount of foreign currency debt obligations designated as net investment hedges was $ 59.9 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 (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 December 31, 2023 and 2022 (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 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 December 31, 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

Fair Value - asset (liability)

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

Interest rate swaps (4)

9 $ 1,630.0 $ 250.0 4.26 % Jan 2024 - Jan 2026 $ 0.3 $ 5.6

Interest rate swaptions 6 1,000.0 — (4) Feb 2034 2.6 —

10 $ 2,180.0 $ 1,630.0 3.40 % Jun 2025 - Aug 2027 $ 24.3 $ 0.3

Interest rate swaptions (5)

— — 1,000.0 — — — 2.6

Cross-currency swaps - Fair Value

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3 280.0 280.0 (7) Oct 2032 ( 37.6 ) ( 53.2 )

Foreign currency forwards 22 162.3 185.5 (8) Jan 2024 - Dec 2024 2.7 16.1

Foreign currency forwards 26 349.5 162.3 (8) Jan 2025 - Jun 2026 9.3 2.7

$ 3,129.5 $ 3,392.3 $ ( 46.2 ) $ ( 107.4 )

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Currency exchange swaps

4 $ 1,810.6 $ 2,427.7 (9) Jan 2024 - Feb 2024 $ 8.9 $ 58.8

Cross-currency swaps (5)

0 — 280.0 —% Oct 2032 — ( 29.5 )

4 $ 1,725.3 $ 1,810.6 (9) Jan 2025 $ 11.8 $ 8.9

$ 1,725.3 $ 1,810.6 $ 11.8 $ 8.9

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(3) This column represents maturity dates for instruments outstanding as of December 31, 2024.

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

(5) In October 2022, we entered into six cross-currency swaps to exchange € 612 million for $ 600 million maturing in October 2032.

We redesignated $ 280 million of three cross-currency swaps as net investment hedges in December 2023.

(4) During the year ended December 31, 2024, we entered into five variable-to-fixed interest rate swaps when we extended the maturity of the 2023 term loans and designated them as cash flow hedges.

We also designated five other 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 the Merger.

The acquisition date fair value of these acquired 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 $ 1.0 billion in notional entered into in March 2023, of which $ 800.0 million was terminated in January 2024 in connection with a senior unsecured note issuance.

A total termination premium of $ 3.4 million we received was deferred in other comprehensive income and will be recognized in interest expense over the 10-year tenor of the notes due 2034.

We discontinued cash flow hedge accounting for the remaining swaption of the $ 200.0 million notional in December 2024 because the forecasted transaction did not occur.

(6) USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.681 %.

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(8) Weighted average forward GBP-USD exchange rate of 1.29 .

(9) Weighted average exchange rates of 1.27 for GBP-USD and 0.86 for EUR-GBP.

(9) Weighted average exchange rates of 0.83 for EUR-GBP and 1.27 for GBP-USD.

We measure our derivatives at fair value and include the balances within 'Other assets, net' and 'Accounts payable and accrued expenses' on our consolidated balance sheets.

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Total unrealized (loss) gain on derivatives, net $ ( 2,782 ) $ ( 37,265 ) $ 97,054

$ ( 37,265 ) $ 97,054 $ 50,448

Derivatives in Net Investment Hedging Relationships

Derivatives and Non-derivatives in Net Investment Hedging Relationships

Cross-currency swaps - Net Investment $ 13,569 $ ( 4,272 ) $ —

Total unrealized loss recorded in foreign currency translation adjustment $ ( 4,272 ) $ — $ —

Foreign currency debt 2,315 — —

Total unrealized gain (loss) recorded in foreign currency translation adjustment $ 15,884 $ ( 4,272 ) $ —

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

Years ended December 31,

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

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

2024 2023 2022

Cross-currency swaps Foreign currency and derivative (loss) gain, net

Cross-currency swaps Foreign currency and derivative gain (loss), net

$ — $ — $ 30,814

Interest rate swaps Interest expense 15,794 ( 4,487 ) ( 10,343 )

Foreign currency forwards Foreign currency and derivative (loss) gain, net

Interest rate swaps Interest 31,385 15,794 ( 4,487 )

Foreign currency forwards Foreign currency and derivative gain (loss), net

3,831 4,251 2,139

Interest rate swaptions Interest expense ( 6,859 ) — —

Interest rate swaptions Interest ( 13 ) ( 6,859 ) —

Total derivatives in cash flow hedging relationships $ 35,203 $ 13,186 $ 28,466

Derivatives in Fair Value Hedging Relationships

Cross-currency swaps - Fair Value Foreign currency and derivative (loss) gain, net

Cross-currency swaps - Fair Value Foreign currency and derivative gain (loss), net

$ 1,806 $ 1,415 $ ( 29,708 )

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Derivatives in Net Investment Hedging Relationships

Cross-currency swaps - Net Investment Foreign currency and derivative (loss) gain, net $ 62 $ — $ —

Cross-currency swaps - Net Investment (excluded component) Foreign currency and derivative gain (loss), net

$ 3,444 $ 62 $ —

Total derivatives in net investment hedging relationships $ 3,444 $ 62 $ —

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$ 40,453 $ 14,663 $ ( 1,242 )

We expect to reclassify $ 8.0 million from AOCI as a decrease to interest expense relating to interest rate swaps and interest rate swaptions and $ 3.6 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months.

We expect to reclassify $ 10.0 million from AOCI as a decrease to interest expense relating to interest rate swaps and $ 9.2 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months.

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

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2024 2023 2022

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

Gain on the settlement of undesignated derivatives $ 18,051 $ 204,392 $ 24,392

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

(Loss) gain on the settlement of undesignated derivatives $ ( 33,053 ) $ 18,051 $ 204,392

Gain on the settlement of designated derivatives reclassified from AOCI 9,082 5,728 3,245

Gain (loss) on the settlement of transactions with third parties 583 ( 553 ) ( 134 )

Total realized foreign currency and derivative gain, net $ 24,362 $ 207,084 $ 27,799

(Loss) gain on the settlement of transactions with third parties 1,498 583 ( 553 )

Total realized foreign currency and derivative (loss) gain, net $ ( 22,473 ) $ 24,362 $ 207,084

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

(Loss) gain on the change in fair value of undesignated derivatives $ ( 5,231 ) $ 29,316 $ ( 14,714 )

Loss on remeasurement of certain assets and liabilities ( 32,545 ) ( 249,711 ) ( 12,375 )

Total unrealized foreign currency and derivative loss, net $ ( 37,776 ) $ ( 220,395 ) $ ( 27,089 )

Total foreign currency and derivative (loss) gain, net $ ( 13,414 ) $ ( 13,311 ) $ 710

Lessor Operating Leases

Gain (loss) on the change in fair value of undesignated derivatives $ 11,893 $ ( 5,231 ) $ 29,316

Gain (loss) on remeasurement of certain assets and liabilities 14,000 ( 32,545 ) ( 249,711 )

Total unrealized foreign currency and derivative gain (loss), net $ 25,893 $ ( 37,776 ) $ ( 220,395 )

Total foreign currency and derivative gain (loss), net $ 3,420 $ ( 13,414 ) $ ( 13,311 )

At December 31, 2024, we owned or held interests in 15,621 properties.

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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 client's gross sales, or percentage rent, for the years ended December 31, 2023, 2022, and 2021 was $ 14.8 million, $ 14.9 million, and $ 6.5 million, respectively.

At December 31, 2023, minimum future annual rental revenue to be received on the operating leases for the next five years and thereafter are as follows (in thousands):

At December 31, 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 years ended December 31, 2024, 2023, and 2022 was $ 16.0 million, $ 14.8 million, and $ 14.9 million respectively.

At December 31, 2024, minimum future annual rental revenue to be received on the operating leases for the next five years and thereafter are as follows (dollars in millions):

Future Minimum Operating Lease Payments Future Minimum Direct Financing and Sale-Type Lease Payments (1)

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Thereafter 27,654.5 24.3

Totals $ 43,194,010 $ 29,263

(1) Related to six properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments.

Total $ 49,381.8 $ 29.6

(1) Related to three properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments.

Amounts reflected are the cash rent on these respective properties.

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Amounts reflected are the cash rent on these respective properties.

No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the years ended December 31, 2023, 2022, and 2021.

Distributions Paid and Payable

We are the lessee under certain ground lease arrangements, building, and corporate office space leases, which are primarily accounted for as operating leases.

At December 31, 2024, minimum future rental payments due from the Company over the next five years and thereafter are as follows (dollars in millions):

Operating Leases Finance

2025 $ 39.9 $ 4.3 $ 44.2

2026 40.0 10.0 50.0

2027 39.3 2.3 41.6

2028 34.0 2.4 36.4

2029 31.4 3.6 35.0

Thereafter 567.0 176.3 743.3

Total $ 751.6 $ 198.9 $ 950.5

Present value adjustment for remaining lease payments (1)

( 298.6 ) ( 121.7 )

Total lease liability $ 453.0 $ 77.2

(1 ) The discount rates are specific for individual leases primarily based on the lease term.

The range of discount rates used to calculate the present value of the operating lease payments is 1.23 % to 6.42 % and for finance lease payments is 1.47 % to 6.21 %.

The weighted average discount rate was derived from estimated incremental borrowing rates based on our credit quality, as we did not have any borrowings at the balance sheet date with comparable terms to our lease agreements.

At December 31, 2024, the weighted average discount rate for operating leases is 3.96 % and the weighted average remaining lease term is 23.74 years.

At December 31, 2024, the weighted average discount rate for finance leases is 5.02 % and the weighted average remaining lease term is 32.47 years.

Stockholders' Equity

We pay monthly distributions to our common stockholders.

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

Years ended December 31,

2024 2023 2022

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Total capital gain distribution — — 0.1802346

$ 3.0510000 $ 2.9670000 $ 4.8927123

(1) The amount distributed in 2021 includes the $ 2.060 tax distribution of Orion shares, that occurred in conjunction with the Orion Divestiture on November 12, 2021, after our merger with VEREIT on November 1, 2021.

The fair market value of these shares for tax distribution was determined to be $ 20.6272 per share, which was calculated using the five-day volume weighted average share price after issuance.

Net Income per Common Share

Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period.

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

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

Total $ 3.1255000 $ 3.0510000 $ 2.9670000

At-the-Market ("ATM") Program

Under our current ATM program, which we entered into in August 2023, we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices.

As of December 31, 2024, we had 55.5 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.

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

Years ended December 31,

2024 2023 2022

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

692,298 611,766 414,535

Incremental shares from share-based compensation 349 395 235

Dilutive effect of forward ATM offerings 377 20 —

Weighted average shares used for diluted net income per share computation

693,024 612,181 414,770

Unvested shares from share-based compensation that were anti-dilutive 117 32 45

Weighted average partnership common units convertible to common shares that were anti-dilutive

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

30,169 91,699 68,608

Weighted average forward ATM offerings that were anti-dilutive 759 644 —

Supplemental Disclosures of Cash Flow Information

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

Gross proceeds $ 1,760.1 $ 5,483.2 $ 4,599.4

Sales agents' commissions and other offering expenses ( 17.3 ) ( 43.7 ) ( 43.4 )

Net proceeds $ 1,742.8 $ 5,439.5 $ 4,556.0

(1) During the year ended December 31, 2024, 25.8 million shares were sold and 30.2 million shares were settled pursuant to forward sale confirmations.

In addition, as of December 31, 2024, 1.8 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $ 53.32 per share.

We currently expect to fully settle forward sale agreements outstanding by June 30, 2025, representing $ 91.8 million in net proceeds, for which the weighted average forward price at December 31, 2024 was $ 51.80 per share.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

Our DRSPP provides our common stockholders with a convenient and economical method of purchasing our common stock and reinvesting their distributions.

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

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

At December 31, 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):

Years ended December 31,

2024 2023 2022

Supplemental disclosures:

Cash paid for interest $ 692,004 $ 501,716 $ 355,483

Cash paid for income taxes $ 12,283 $ 45,031 $ 19,676

Cash paid for merger and integration-related costs $ 11,329 $ 22,783 $ 157,115

Non-cash activities:

Net (decrease) increase in fair value of derivatives $ ( 116,145 ) $ 58,753 $ 40,489

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

Mortgages assumed at fair value (1)

$ — $ 45,079 $ 911,525

Notes payable assumed at fair value $ — $ — $ 4,946,965

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

$ — $ 51,221 $ 38,783

Non-cash assets and liabilities assumed in merger $ — $ — $ 11,559,875

Non-cash assets and liabilities distributed in Orion Divestiture $ — $ — $ 1,142,121

(1) For the year ended December 31, 2021, includes £ 31.0 million Sterling, converted at the applicable exchange rate on the date of transaction, for one mortgage and $ 869.1 million, estimated at fair value, for ten mortgages from our merger with VEREIT.

(2) For the year ended December 31, 2022, includes 734,458 common partnership units of Realty Income L.P.

that were issued in connection with the acquisition of nine properties.

For the year ended December 31, 2021, includes $ 1.8 million for the issuance of 56,400 units on November 1, 2021 that were a result of our merger with VEREIT, $ 20.4 million for the issuance of 300,604 units on November 30, 2021 that were a partial consideration for an acquisition of properties, and $ 16.6 million for the issuance of 240,586 units on December 30, 2021 that were issued to a new partner in connection with an industrial property contribution.

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):

December 31, 2023 December 31, 2022

Cash and cash equivalents shown in the consolidated balance sheets $ 232,923 $ 171,102

Restricted escrow deposits (1)

Impounds related to mortgages payable (1)

53,005 18,152

Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 292,175 $ 226,881

(1) Included within 'other assets, net' on our consolidated balance sheets (see note 3, Supplemental Detail for Certain Components of Consolidated Balance Sheets ).

These amounts consist of cash that we are legally entitled to, but that is not immediately available to us.

As a result, these amounts were considered restricted as of the dates presented.

Shares of common stock issued under the DRSPP program 212 198 176

Gross proceeds $ 11.8 $ 11.5 $ 11.7

Series A Preferred Stock

As part of the Merger Agreement with Spirit, each outstanding share of Spirit Series A Preferred Stock, par value $ 0.01 per share, converted into the right to receive one share of newly issued Realty Income Series A 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.

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 year ended December 31, 2024.

Common Stock Incentive Plan

In March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income 2021 Incentive Award Plan (the "2021 Plan").

The 2021 Plan offers our directors, employees, and consultants an opportunity to own our stock and/or rights that will reflect our growth, development and financial success.

Except as noted below, the aggregate number of shares of our common stock subject to options, stock purchase rights ("SPR"), stock appreciation rights ("SAR"), and other awards, will be no more than 8.9 million shares.

The maximum number of shares that may be subject to options, SPR, SAR and other awards granted under the plan to any individual in any calendar year may not exceed 3.2 million, and the maximum aggregate amount of cash that may be paid in cash during any calendar year with respect to one or more shares payable in cash shall be $ 10.0 million.

The 2021 Plan replaced the Realty Income Corporation 2012 Incentive Award Plan (the"2012 Plan"), which was set to expire in March 2022 and from which no further awards have been granted.

The disclosures below incorporate activity for both the 2012 Plan and the 2021 Plan.

In connection with our merger with VEREIT, shares which remained available for issuance under the VEREIT, Inc.

In March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income 2021 Incentive Award Plan (the "2021 Plan") which replaced the Realty Income 2012 Incentive Award Plan (the "2012 Plan").

The 2021 Plan provides for the award to our directors, employees, and consultants of up to 8.9 million shares.

In connection with our merger with VEREIT in 2021, shares which remained available for issuance under the VEREIT, Inc.

2021 Equity Incentive Plan immediately prior to the closing of the merger (as adjusted by the Exchange Ratio) may be used for awards under the 2021 Plan and will not reduce the shares authorized for grant under the 2021 Plan, to the extent that awards using such shares (i) are permitted without stockholder approval under applicable stock exchange rules, (ii) are made only to VEREIT service providers or individuals who become Realty Income service providers following the date of the consummation of the merger, and (iii) are only granted under the 2021 Plan during the period commencing on the date of the consummation of the merger and ending on June 2, 2031.

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The amount of share-based compensation costs recognized in 'General and administrative' in our consolidated statements of income and comprehensive income was $ 32.7 million, $ 26.2 million, and $ 21.6 million during the years ended December 31, 2024, 2023, and 2022, respectively.

Also, in connection with the merger, each outstanding VEREIT, Inc.

stock option and restricted stock unit that were unvested as of November 1, 2021 were converted into equivalent options and restricted stock units, in each case with respect to shares of the Company's common stock, using the equity award exchange ratio in accordance with the merger agreement.

The converted awards issued by Realty Income have identical terms to the original VEREIT, Inc.

On November 1, 2021, we issued 0.4 million shares of Realty Income common stock in settlement of equity awards that vested upon the separation of certain former-VEREIT employees and directors in connection with the merger.

This issuance is excluded from the Restricted Stock Units and Stock Options sections below, as the awards were not granted under the 2021 Plan.

The aggregate fair value of the converted awards was $ 71.6 million, of which i.) $ 44.0 million related to pre-combination services and is included in the consideration transferred in the merger ii.) $ 25.6 million of expense was recognized during November in merger and integration-related costs related to the acceleration of vesting upon the separation of certain employees in connection with the merger, and iii.) $ 2.0 million will be amortized through general and administrative expenses over the remaining vesting term for former VEREIT, Inc.

employees who were retained by Realty Income.

The following disclosures are inclusive of converted awards for former VEREIT employees continuing as employees of Realty Income, which are reflected as grants, as the replacement awards represent newly issued awards settled in Realty Income common shares.

In connection with the Orion Divestiture, each stock option, restricted stock unit and performance award outstanding at November 12, 2021 was entitled to an equitable adjustment equal to the ratio of the five-day volume weighted average per-share price of Realty Income common stock prior to the Orion Divestiture divided by the five-day volume weighted average per-share of Realty Income common stock following the Orion Divestiture, resulting in an adjustment factor of approximately 1.002342 .

The equitable adjustment was considered a modification in accordance with the provisions of ASC 718, Compensation-Stock Compensation .

As a result, we compared the fair value of each award immediately prior to the equitable adjustment to the fair value immediately after the equitable adjustment to measure incremental compensation cost, if any.

The equitable adjustment did not result in any incremental fair value.

Therefore, no stock-based compensation expense was recorded as of result of the modification.

The following disclosures are inclusive of these adjustments, which has been labeled 'Equitable adjustment - Orion Divestiture' throughout.

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 at the date of acquisition in merger, transaction, and other costs, net related to the value attributable to post-combination services.

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

Restricted Stock

5 unchanged sentences

Outstanding nonvested shares, beginning of year 347,051 $ 67.89 242,660 $ 67.12 212,630 $ 65.20

242,660 $ 67.12 212,630 $ 65.20 219,482 $ 63.69

Shares granted

3 unchanged sentences

Outstanding nonvested shares, end of each period 514,299 $ 61.54 347,051 $ 67.89 242,660 $ 67.12

347,051 $ 67.89 242,660 $ 67.12 212,630 $ 65.20

(1) Grant date fair value.

(2) Our restricted stock awards granted to employees vest over a service periods not exceeding four-years .

Additionally effective November 1, 2022, and applied retroactively for all outstanding awards, we have a retirement provision whereby the vesting date for eligible participants is accelerated based on certain criteria.

The vesting schedule for shares granted to non-employee directors is as follows:

• For directors with less than six years of service at the date of grant, shares vest in 33.33 % annual increments upon re-election to the Board at each of the three Annual Meetings of Stockholders following the grant date;

• For directors with six years of service at the date of grant, shares vest in 50 % annual increments upon re-election to the Board at each of the two Annual Meetings of Stockholders following the grant date;

• For directors with seven years of service at the date of grant, shares are 100 % vested upon re-election to the Board in the following year;

• For directors with eight or more years of service at the date of grant, there is immediate vesting as of the date the shares of stock are granted.

For the years ended December 31, 2023, 2022, and 2021, respectively, we granted 40,000 , 40,000 , and 36,000 total shares of restricted stock granted to the independent members of our Board of Directors in connection with our annual awards in May 2023, 2022 and 2021, respectively.

In addition, in November 2021, we granted 8,000 shares of restricted stock to the new members of our Board of Directors, which vest in equal parts over a three-year service period.

In connection with our annual awards, 20,000 , 20,000 , and 24,000 shares vested immediately and 20,000 , 20,000 , and 12,000 shares vest in equal parts over a three-year service period for the years ended December 31, 2023, 2022, and 2021, respectively.

For each of the years ended December 31, 2024, 2023, and 2022, we granted 40,000 shares of restricted stock to the independent members of our Board of Directors in connection with our annual awards in May of each year.

The vesting period of these shares is up to three years , based on each director's years of service, and is subject to the director's continued service through each applicable vesting date.

In addition, in February 2024, we granted 4,000 shares of restricted stock to a new member of our Board of Directors, which vest in equal parts over a three-year period.

In connection with shares granted in each respective year, 16,000 , 20,000 , and 20,000 shares vested immediately and 28,000 , 20,000 , and 20,000 shares vest in equal parts over a three-year service period.

As of December 31, 2024, the remaining unamortized share-based compensation expense related to restricted stock totaled $ 19.7 million, which is being amortized on a straight-line basis over the service period of each applicable award.

The expense amortization period for restricted stock is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age.

For employees who have already met the qualifying retirement age, restricted stock is fully expensed at the grant date.

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

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Restricted Stock Units

During 2023, 2022 and 2021, and in connection with our merger with VEREIT Inc., we also granted restricted stock units that primarily vest over service periods of three or four-years and have the same economic rights as shares of restricted stock:

During 2024, 2023, and 2022, we also granted restricted stock units that vest over service periods of four-years and have the same economic rights as shares of restricted stock:

2024 2023 2022

3 unchanged sentences

Outstanding nonvested shares, beginning of year 42,612 $ 65.62 58,513 $ 67.91 67,367 $ 69.69

58,513 $ 67.91 67,367 $ 69.69 18,670 $ 70.38

Equitable adjustment - Orion Divestiture (2)

Shares granted 30,538 $ 52.72 15,065 $ 66.41 24,820 $ 66.82

2 unchanged sentences

Outstanding nonvested shares, end of each period 38,531 $ 62.45 42,612 $ 65.62 58,513 $ 67.91

42,612 $ 65.62 58,513 $ 67.91 67,367 $ 69.69

(1) Grant date fair value.

(2) Effective with the Orion Divestiture on November 12, 2021, outstanding equity awards were adjusted by a conversion ratio of 1.002342 per one Realty Income share then held.

As of December 31, 2024, the remaining share-based compensation expense related to the restricted stock units totaled $ 1.4 million and is being recognized on a straight-line basis over the service period.

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Net Debt-to-Pro Forma Adjusted EBITDA re Ratio

25 % 25 % N/A

Net Debt-to-Adjusted EBITDA re Ratio

The annual performance shares are earned based on our performance related to our metrics above, and vest 50 % on the first and second January 1 after the end of the three-year performance period, subject to continued service.

The performance period for the 2021 performance awards began on January 1, 2021 and ended on December 31, 2023.

The performance period for the 2022 performance awards began on January 1, 2022 and will end on December 31, 2024.

The performance period for the 2023 performance awards began on January 1, 2023 and will end on December 31, 2025.

On November 15, 2021, the Compensation Committee approved a one-time grant of performance share awards and a one-time cash bonus to certain of our named executives in connection with the completion of our merger with VEREIT and the transactions contemplated thereby, including the Orion Divestiture (the "VEREIT Transaction").

The awards were made to reward the executives for the successful consummation of the VEREIT Transaction and were intended to retain and motivate the executives to achieve optimal synergies and incentivize further growth from the merger.

The performance shares were earned based on our performance related to Adjusted Funds from Operations Available to Common Stockholders ("AFFO") accretion ( 50 % weighting) and general and administrative expense synergies ( 50 % weighting), and vested 50 % upon the completion of the performance period.

The remaining 50 % vested on the one-year anniversary of the completion of the applicable performance period.

All vesting is subject to continued service.

The performance period was one year for the AFFO accretion targets from January 1, 2022 to December 31, 2022, and was two years for the general and administrative expense synergies from January 1, 2022 to December 31, 2023.

25 % 25 % 25 %

The annual performance shares vest 50 % as of the date of which the plan administrator determines the achievement of the applicable goals during the applicable three-year performance period and the remaining 50 % on January 1 of the following year, subject to continued service.

The fair value of the performance shares was estimated on the date of grant using a Monte Carlo Simulation model.

The fair value of the one-time performance shares was based on the fair value of our common stock at the grant date and is dependent on the probability of satisfying the performance conditions stipulated in the award grant.

The following table summarizes our performance share grant activity, inclusive of annual performance shares and the one-time performance shares related to the merger with VEREIT:

The following table summarizes our performance share grant activity:

2024 2023 2022

3 unchanged sentences

Outstanding nonvested shares, beginning of year 561,769 $ 72.64 470,880 $ 73.37 388,139 $ 68.09

470,880 $ 73.37 388,139 $ 68.09 291,759 $ 69.73

Equitable adjustment - Orion Divestiture (2)

Shares granted 309,363 $ 55.25 215,040 $ 73.32 174,940 $ 77.73

2 unchanged sentences

Outstanding nonvested shares, end of each period 684,939 $ 68.99 561,769 $ 72.64 470,880 $ 73.37

561,769 $ 72.64 470,880 $ 73.37 388,139 $ 68.09

(1) Grant date fair value.

(2) Effective with the Orion Divestiture on November 12, 2021, outstanding equity awards were adjusted by a conversion ratio of 1.002342 per one Realty Income share then held.

As of December 31, 2024, the remaining share-based compensation expense related to the performance shares totaled $ 19.6 million and is being recognized on a tranche-by-tranche basis over the service period.

Stock Options

In connection with our merger with VEREIT in 2021, 709,426 stock options were converted with a weighted average exercise price of $ 53.80 per option.

There were no outstanding stock options prior to the VEREIT merger, and no additional stock options have since been granted.

The fair value of the stock options as of their grant date is determined using the Black-Scholes option pricing model, which requires the input of assumptions including expected terms, expected volatility, dividend yield and risk-free rate.

As of December 31, 2023, we had 28,343 outstanding nonvested stock options with a weighted average exercise price of $ 54.50 per option.

Their weighted average remaining contractual term is 4.8 years.

Compensation expense for stock options is recognized on a straight-line basis over the service period described above.

During the years ended December 31, 2023, we recorded no expense related to stock options.

During each of the years ended December 31, 2022 and 2021, we recorded less than $ 0.1 million of expense related to stock options.

As of December 31, 2023, there was no unamortized expense relating to our outstanding stock options.

Commitments and Contingencies

In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business.

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 December 31, 2023, we had commitments of $ 32.7 million, which primarily relate to re-leasing costs, recurring capital expenditures, and non-recurring building improvements.

In addition, as of December 31, 2023, we had committed $ 740.0 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between January 2024 and January 2025.

We have certain properties that are subject to ground leases, which are accounted for as operating leases.

At December 31, 2023, minimum future rental payments for the next five years and thereafter are as follows (in millions):

Operating Leases Finance

Net Income per Common Share

Years ended December 31,

2024 2023 2022

Weighted average shares used for the basic net income per share computation 862,959 692,298 611,766

Incremental shares from share-based compensation 411 349 395

Dilutive effect of forward ATM offerings 422 377 20

Weighted average shares used for diluted net income per share computation 863,792 693,024 612,181

Unvested shares from share-based compensation that were anti-dilutive 179 117 32

Weighted average partnership common units convertible to common shares that were anti-dilutive 2,050 1,795 1,292

Weighted average forward ATM offerings that were anti-dilutive 519 759 644

Supplemental Disclosures of Cash Flow Information

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

Years ended December 31,

2024 2023 2022

Supplemental disclosures:

Cash paid for interest $ 970,009 $ 692,004 $ 501,716

Cash paid for income taxes $ 32,278 $ 12,283 $ 45,031

Non-cash activities:

Net increase (decrease) in fair value of derivatives $ 64,092 $ ( 116,145 ) $ 58,753

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

Notes payable assumed at fair value $ 2,481,486 $ — $ —

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

Mortgages assumed at fair value $ — $ — $ 45,079

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

$ 47,253 $ — $ 51,221

(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):

December 31, 2024 December 31, 2023

Cash and cash equivalents shown in the consolidated balance sheets $ 444,962 $ 232,923

Restricted escrow deposits (1)

Impounds related to mortgages payable (1)

14,218 53,005

Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 495,506 $ 292,175

(1) Included within 'Other assets, net' on our consolidated balance sheets (see note 3, Supplemental Detail for Certain Components of Consolidated Balance Sheets ).

These amounts consist of cash that we are legally entitled to, but that is not immediately available to us.

As a result, these amounts were considered restricted as of the dates presented.

Segment and Geographic Information

Segment Information

Our business is characterized as owning and leasing commercial properties under long-term, net lease agreements (whereby clients are responsible for property taxes, insurance and maintenance costs), and these economic characteristics are similar across various property types, geographic locations, and industries in which our clients operate.

The Company's chief operating decision maker ("CODM") is its President, Chief Executive Officer.

Information reviewed by our CODM in evaluating performance and allocating resources is primarily operating results and cash flow analysis on a consolidated basis.

Therefore, we operate and manage the business in one operating and reportable segment.

The CODM assesses performance and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

Our significant segment expenses include consolidated expense categories presented in our consolidated statements of income and comprehensive income, as well as additional significant segment expense categories reported within 'Property (including reimbursable)' and 'General and administrative' expense captions, as follows (in millions):

Years ended December 31,

2024 2023 2022

Thereafter 497.5 48.9 546.4

Total $ 681.1 $ 70.0 $ 751.1

Present value adjustment for remaining lease payments (1)

Property (excluding reimbursable) $ 74.6 $ 42.8 $ 41.6

Cash G&A expenses (1)

$ 144.2 $ 118.3 $ 116.9

Total lease liability $ 425.2 $ 44.3

(1 ) The discount rates are specific for individual leases primarily based on the lease term.

The range of discount rates used to calculate the present value of the operating lease payments is 0.94 % to 6.42 % and for finance lease payments is 1.14 % to 6.21 %.

At December 31, 2023, the weighted average discount rate for operating leases is 3.66 % and the weighted average remaining lease term is 23.1 years.

At December 31, 2023, the weighted average discount rate for finance leases is 3.47 % and the weighted average remaining lease term is 22.6 years.

(1) Represents 'General and administrative' expenses as presented in our consolidated statements of income and comprehensive income, less share-based compensation costs.

Other segment items included in consolidated net income consist of 'Gain on sales of real estate' and 'Other income, net', as presented in our consolidated statements of income and comprehensive income.

Geographic Information

The following table disaggregates domestic and international revenue by major asset types and geographic regions (in millions):

Years ended December 31,

Retail $ 3,368.5 $ 508.2 $ 133.2 $ 4,009.9

Industrial 747.0 48.1 — 795.1

237.9 0.8 — 238.7

Rental (including reimbursable) $ 4,353.4 $ 557.1 $ 133.2 $ 5,043.7

Other revenue 227.4

Total revenue $ 5,271.1

Retail $ 2,754.2 $ 374.0 $ 65.4 $ 3,193.6

Industrial 515.4 43.7 — 559.1

205.5 — — 205.5

Rental (including reimbursable) $ 3,475.1 $ 417.7 $ 65.4 $ 3,958.2

Other revenue 120.8

Total revenue $ 4,079.0

Retail $ 2,455.9 $ 243.3 $ 30.9 $ 2,730.1

Industrial 465.2 30.2 — 495.4

74.2 — — 74.2

Rental (including reimbursable) $ 2,995.3 $ 273.5 $ 30.9 $ 3,299.7

Other revenue 44.0

Total revenue $ 3,343.7

(1) Other includes rental revenue generated from all other European countries we operate in.

(2) Other includes all other property types in our portfolio.

No individual client’s revenue represented more than 10% of our total revenue for each of the years ended December 31, 2024, 2023, and 2022.

Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and finance leases.

The following table disaggregates domestic and international total long-lived assets (in millions):

As of December 31,

Long-lived assets $ 43,186.5 $ 7,485.6 $ 1,617.7 $ 52,289.8 $ 36,577.1 $ 6,787.1 $ 1,496.1 $ 44,860.3

Remaining assets 16,545.2 12,919.1

Total assets $ 68,835.0 $ 57,779.4

(1) Other includes long-lived assets in all other European countries we operate in.

Commitments and Contingencies

In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business.

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 December 31, 2024, we had commitments of $ 93.5 million, which primarily relate to tenant improvements, recurring capital expenditures, and non-recurring building improvements.

In addition, as of December 31, 2024, we had committed $ 683.3 million under construction contracts related to development projects, which have estimated rental revenue commencement dates between February 2025 and March 2026.

Subsequent Events

1 unchanged sentence

In addition, in February 2025, we declared a dividend of $ 0.2680 , which will be paid in March 2025.

Agreement and Plan of Merger

On January 23, 2024, we completed our acquisition of Spirit in an all-stock transaction.

Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, the transaction was subject to the approval of Spirit’s stockholders and satisfaction of other customary closing conditions.

Pursuant to the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, (i) each outstanding share of Spirit common stock, par value $ 0.05 per share (other than the Excluded Common Shares (as defined in the Merger Agreement)) automatically converted into 0.762 of a newly issued share of our common stock, subject to adjustment 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.

In connection with our merger with Spirit, we completed the $ 2.7 billion exchange in principal of outstanding notes issued by Spirit Realty, L.P.

(“Spirit OP”), a wholly owned subsidiary of the Company following the Merger, for new notes issued by Realty Income and entered into $ 800.0 million and $ 500.0 million term loan agreements, which provide for the assumption of Spirit OP's existing term loan agreements.

Due to the close proximity of the acquisition date and the Company's filing of its annual report on Form 10-K for the year ended December 31, 2023, the initial accounting for the business combination is incomplete, and therefore we are unable to disclose the information required by ASC 805, Business Combinations .

Such information will be included in the Company's subsequent Form 10-Q.

Notes Issuance

In January 2024, we issued $ 450.0 million of 4.750 % senior unsecured notes due February 2029 (the “2029 Notes”), and $ 800.0 million of 5.125 % senior unsecured notes due February 2034 (the “2034 Notes”).

The public offering price for the 2029 Notes was 99.225 % of the principal amount for an effective annual yield to maturity of 4.923 %, and the public offering price for the 2034 Notes was 98.910 % of the principal amount for an effective annual yield to maturity of 5.265 %.

Interest on the 2029 Notes and the 2034 Notes is paid semi-annually.

ATM Forward Offerings

As of February 20, 2024, ATM forward agreements for a total of 10.8 million shares remain unsettled with total expected net proceeds of approximately $ 605 million of which 4.6 million shares were executed in January 2024.

Share Repurchase Program

In February 2025, our Board of Directors authorized a share repurchase program for up to $ 2.0 billion in shares of our common stock, which will expire in January 2028.

Repurchases under the repurchase program may be made at management’s discretion from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions, Rule 10b5-1 plans or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements.

The share repurchase program does not obligate us to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at our discretion.

A Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data