REALTY INCOME CORP 10-K

Item 8: Financial Statements and Supplementary Data Table of Contents A. Reports of Independent Registered Public Accounting Firm B. Consolidated Balance Sheets, December 31, 2024 and December 31, 2023 C. Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2024, 2023, and 2022 D. Consolidated Statements of Equity, Years ended December 31, 2024, 2023, and 2022 E. Consolidated Statements of Cash Flows, Years ended December 31, 2024, 2023, and 2022 F. Notes to Consolidated Financial Statements G. Schedule III Real Estate and Accumulated Depreciation Schedules not filed: All schedules, other than that indicated in the Table of Contents, have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes. 46 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Realty Income Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Realty Income Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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 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. 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 fair values. 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 auditor judgment was required in evaluating the fair value measurements given the sensitivity of the fair value measurements to changes in these assumptions. 47 Table of Contents The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to allocate the purchase price of real estate acquisitions. This included controls over the measurement of the fair value of land. For a selection of real estate acquisitions, we involved valuation professionals with specialized skills and knowledge who assisted in evaluating a selection of the Company’s acquired land values by comparing them to independently developed ranges using market data from industry transaction databases and published industry reports. /s/ KPMG LLP We have served as the Company’s auditor since 1993. San Diego, California February 25, 2025 48 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Realty Income Corporation: Opinion on Internal Control Over Financial Reporting We have audited Realty Income Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 25, 2025 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP San Diego, California February 25, 2025 49 Table of Contents Item 1: Financial Statements REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) December 31, 2024 December 31, 2023 ASSETS Real estate held for investment, at cost: Land $ 17,320,520 $ 14,929,310 Buildings and improvements 40,974,535 34,657,094 Total real estate held for investment, at cost 58,295,055 49,586,404 Less accumulated depreciation and amortization ( 7,381,083 ) ( 6,072,118 ) Real estate held for investment, net 50,913,972 43,514,286 Real estate and lease intangibles held for sale, net 94,979 31,466 Cash and cash equivalents 444,962 232,923 Accounts receivable, net 877,668 710,536 Lease intangible assets, net 6,322,992 5,017,907 Goodwill 4,932,199 3,731,478 Investment in unconsolidated entities 1,229,699 1,172,118 Other assets, net 4,018,568 3,368,643 Total assets $ 68,835,039 $ 57,779,357 LIABILITIES AND EQUITY Distributions payable $ 238,045 $ 195,222 Accounts payable and accrued expenses 759,416 738,526 Lease intangible liabilities, net 1,635,770 1,406,853 Other liabilities 923,128 811,650 Line of credit payable and commercial paper 1,130,201 764,390 Term loans, net 2,358,417 1,331,841 Mortgages payable, net 80,784 821,587 Notes payable, net 22,657,592 18,602,319 Total liabilities $ 29,783,353 $ 24,672,388 Commitments and contingencies (Note 21) Stockholders’ equity: 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 Distributions in excess of net income ( 8,648,559 ) ( 6,762,136 ) Accumulated other comprehensive income 38,229 73,894 Total stockholders’ equity $ 38,840,738 $ 32,941,467 Noncontrolling interests 210,948 165,502 Total equity $ 39,051,686 $ 33,106,969 Total liabilities and equity $ 68,835,039 $ 57,779,357 The accompanying notes to consolidated financial statements are an integral part of these statements. 50 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands, except per share amounts) Years ended December 31, 2024 2023 2022 REVENUE Rental (including reimbursable) $ 5,043,748 $ 3,958,150 $ 3,299,657 Other 227,394 120,843 44,024 Total revenue 5,271,142 4,078,993 3,343,681 EXPENSES Depreciation and amortization 2,395,644 1,895,177 1,670,389 Interest 1,016,955 730,423 465,223 Property (including reimbursable) 377,675 316,964 226,330 General and administrative 176,895 144,536 138,459 Provisions for impairment 425,833 87,082 25,860 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 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 Income before income taxes 933,942 928,935 917,599 Income taxes ( 66,601 ) ( 52,021 ) ( 45,183 ) Net income 867,341 876,914 872,416 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 Amounts available to common stockholders per common share: Net income, basic and diluted $ 0.98 $ 1.26 $ 1.42 Weighted average common shares outstanding: Basic 862,959 692,298 611,766 Diluted 863,792 693,024 612,181 Net income available to common stockholders $ 847,893 $ 872,309 $ 869,408 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 (loss) income $ ( 35,665 ) $ 27,061 $ 41,900 Comprehensive income available to common stockholders $ 812,228 $ 899,370 $ 911,308 The accompanying notes to consolidated financial statements are an integral part of these statements. 51 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (in thousands) Years ended December 31, 2024, 2023, and 2022 Shares of preferred stock Preferred stock and paid in capital Shares of common stock Common stock and paid in capital Distributions in excess of net income Accumulated other comprehensive income Total stockholders’ equity Non-controlling interests Total equity Balance, December 31, 2021 — — 591,262 $ 29,578,212 $ ( 4,530,571 ) $ 4,933 $ 25,052,574 $ 76,826 $ 25,129,400 Net income — — — — 869,408 — 869,408 3,008 872,416 Other comprehensive income — — — — — 41,900 41,900 — 41,900 Distributions paid and payable — — — — ( 1,832,030 ) — ( 1,832,030 ) ( 4,125 ) ( 1,836,155 ) Share issuances, net of costs — — 68,876 4,570,766 — — 4,570,766 — 4,570,766 Contributions by noncontrolling interests — — — — — — — 51,221 51,221 Reallocation of equity — — — ( 3,210 ) — — ( 3,210 ) 3,210 — Share-based compensation, net — — 162 13,741 — — 13,741 — 13,741 Balance, December 31, 2022 — — 660,300 $ 34,159,509 $ ( 5,493,193 ) $ 46,833 $ 28,713,149 $ 130,140 $ 28,843,289 Net income — — — — 872,309 — 872,309 4,605 876,914 Other comprehensive income — — — — — 27,061 27,061 — 27,061 Distributions paid and payable — — — — ( 2,141,252 ) — ( 2,141,252 ) ( 9,340 ) ( 2,150,592 ) Share issuances, net of costs — — 91,902 5,450,982 — — 5,450,982 — 5,450,982 Contributions by noncontrolling interests — — — — — — — 40,097 40,097 Share-based compensation, net — — 258 19,218 — — 19,218 — 19,218 Balance, December 31, 2023 — — 752,460 $ 39,629,709 $ ( 6,762,136 ) $ 73,894 $ 32,941,467 $ 165,502 $ 33,106,969 Net income — — — — 860,772 — 860,772 6,569 867,341 Other comprehensive loss — — — — — ( 35,665 ) ( 35,665 ) — ( 35,665 ) Distributions paid and payable — — — — ( 2,742,079 ) — ( 2,742,079 ) ( 10,398 ) ( 2,752,477 ) 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 Balance, December 31, 2024 — — 891,511 $ 47,451,068 $ ( 8,648,559 ) $ 38,229 $ 38,840,738 $ 210,948 $ 39,051,686 The accompanying notes to consolidated financial statements are an integral part of these statements. 52 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years ended December 31, 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 867,341 $ 876,914 $ 872,416 Adjustments to net income: Depreciation and amortization 2,395,644 1,895,177 1,670,389 Amortization of share-based compensation 57,493 26,227 21,617 Non-cash revenue adjustments ( 116,017 ) ( 62,029 ) ( 57,009 ) Gain on extinguishment of debt — — ( 367 ) Amortization of net premiums on mortgages payable 30 ( 12,803 ) ( 13,622 ) Amortization of net premiums on notes payable ( 3,309 ) ( 60,657 ) ( 62,989 ) Amortization of deferred financing costs 23,939 26,670 15,613 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 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 Accounts receivable and other assets 28,082 ( 111,286 ) ( 29,524 ) Accounts payable, accrued expenses and other liabilities 2,607 285,293 ( 5,290 ) Net cash provided by operating activities 3,573,276 2,958,769 2,563,856 CASH FLOWS FROM INVESTING ACTIVITIES Investment in real estate ( 3,262,437 ) ( 8,053,595 ) ( 8,886,436 ) Improvements to real estate, including leasing costs ( 121,411 ) ( 68,692 ) ( 95,514 ) Investment in unconsolidated entities ( 70,381 ) ( 1,179,306 ) — Investment in loans ( 631,650 ) ( 201,621 ) — Proceeds from sales of real estate 589,450 117,354 436,115 Return of investment from unconsolidated entities — 3,927 1,401 Net proceeds from sale of unconsolidated entities — — 108,088 Proceeds from note receivable 57,300 — 5,867 Insurance proceeds received 2,788 27,279 49,070 Non-refundable escrow deposits ( 225 ) ( 200 ) ( 5,667 ) Net cash acquired in merger 93,683 — — Net cash used in investing activities ( 3,342,883 ) ( 9,354,854 ) ( 8,387,076 ) CASH FLOWS FROM FINANCING ACTIVITIES 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 Payments on line of credit and commercial paper programs ( 36,528,598 ) ( 79,398,193 ) ( 27,434,617 ) 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 Principal payment on notes payable ( 849,999 ) — — Principal payments on mortgages payable ( 740,505 ) ( 22,015 ) ( 312,234 ) 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 ) Net receipts on derivative settlements — 7,853 79,763 Debt issuance costs ( 60,615 ) ( 81,898 ) ( 34,156 ) Other items, including shares withheld upon vesting ( 8,856 ) ( 7,022 ) ( 4,790 ) 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 ) Net increase (decrease) in cash, cash equivalents and restricted cash 203,331 65,294 ( 105,488 ) Cash, cash equivalents and restricted cash, beginning of period 292,175 226,881 332,369 Cash, cash equivalents and restricted cash, end of period $ 495,506 $ 292,175 $ 226,881 For supplemental disclosures, see note 19 , S upplemental Disclosures of Cash Flow Information . The accompanying notes to consolidated financial statements are an integral part of these statements. 53 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 1. Summary of Significant Accounting Policies 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. (“Spirit”). 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. Basis of Presentation . These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Intercompany accounts and transactions are eliminated in consolidation. The U.S. Dollar ("USD") is our reporting currency. Unless otherwise indicated, all dollar amounts are expressed in USD. For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements into USD at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are included in 'Accumulated other comprehensive income' ("AOCI") on our consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period. We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in 'Foreign currency and derivative gain (loss), net' in our consolidated statements of income and comprehensive income. 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. Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification ("ASC") 810, Consolidation. Voting interest entities ("VOEs") are entities considered to have sufficient equity at risk and which the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests. Variable interest entities ("VIEs") are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances. 54 Table of Contents At December 31, 2024, we are considered the primary beneficiary of Realty Income, L.P. and certain investments, including investments in joint ventures. Below is a summary of selected financial data of such consolidated VIEs, included on our consolidated balance sheets at December 31, 2024 and December 31, 2023 (in thousands): December 31, 2024 December 31, 2023 Net real estate $ 2,882,135 $ 2,866,272 Total assets $ 3,461,843 $ 3,588,720 Total liabilities $ 131,096 $ 134,366 The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction. For further details, see note 11, Noncontrolling Interests . Use of Estimates. The consolidated financial statements were prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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. For more detail, see note 18, Net Income per Common Share. Cash Equivalents and Restricted Cash . We consider all short-term, highly liquid investments that are readily convertible to cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Restricted cash includes cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the U.S. Internal Revenue Code, impounds related to mortgages payable and cash that is not immediately available to Realty Income (i.e. escrow deposits for future acquisitions). Cash accounts maintained on behalf of Realty Income in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, Realty Income has not experienced any losses in such accounts. Income Taxes. 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. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in the U.S., we generally will not be required to pay U.S. income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries ("TRS"). A TRS is a subsidiary of a REIT that is subject to federal, state and local income taxes, as applicable. 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. 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. 55 Table of Contents 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. We regularly analyze our various international, federal and state filing positions and only recognize the income tax effect in our financial statements when certain criteria regarding uncertain income tax positions have been met. We believe that our income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provisions for uncertain tax positions have been recorded on our consolidated financial statements. Lease Revenue Recognition and Accounts Receivable. The majority of our leases are accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Any rental revenue contingent upon our client’s sales, or percentage rent, is recognized only after our client exceeds their sales breakpoint. Rental increases based upon changes in the consumer price indices are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated rental revenue from our clients for recoverable real estate taxes and operating expenses are included in contractually obligated reimbursements by our clients, a component of rental revenue, in the period when such costs are incurred. Taxes and operating expenses paid directly by our clients are recorded on a net basis. Other revenue includes certain property-related revenue not included in rental revenue and interest income recognized on financing receivables for certain leases with above-market terms. We assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under ASC 842, Leases . We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all of lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized. Loans Receivable . 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. When management identifies the full recovery of the contractually specified payments of principal and interest of a loan is less than probable, we evaluate the expected loss amount and place it on non-accrual status. We made the accounting policy election to record accrued interest on our loan portfolio separate from our loan receivable and other lending investments. These loans and the related interest receivable are presented in 'Other assets, net' on our consolidated balance sheets. Financing Receivables. For properties we acquire that qualify as sale-leaseback transactions and 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 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. 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. 56 Table of Contents 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 . When real estate is sold, the carrying amount of the applicable assets is derecognized with a corresponding gain from the sale recognized in our consolidated statements of income and comprehensive income. We record a gain on sale of real estate pursuant to provisions under ASC 610-20 , Gains and Losses from the Derecognition of Nonfinancial Assets . We determine whether we would have a controlling financial interest in the property after the sale. We record a gain from the sale of real estate provided that various criteria, relating to the terms of the sale and any subsequent involvement by us with the real estate, have been met. Allocation of the Purchase Price of Real Estate Acquisitions . 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). Given the significance of the unobservable inputs, we believe the allocations of fair value of real estate acquisitions should be categorized as level 3 under ASC 820. 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 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 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 57 Table of Contents 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. Real Estate and Lease Intangibles Held for Sale. We generally reclassify assets to held for sale when the disposition has been approved, there are no known contingencies relating to the sale and the consummation of the disposition is considered probable within one year. Upon classifying a real estate investment as held for sale, we will no longer recognize depreciation expense related to the depreciable assets of the property. 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. 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. Investment in Unconsolidated Entities. Investments in unconsolidated entities of which we are not considered the primary beneficiary, include VIEs and are accounted for using the equity method as we have the ability to exercise significant influence over operating and financing policies of these investments. We initially recognize the fair value of our contribution as an equity method investment. We subsequently adjust these balances for our proportionate share of net earnings/losses of the entities, distributions received, and contributions made. Transaction costs related to the formation of equity method investments are also capitalized, resulting in a basis difference. This basis difference is amortized over the estimated useful life of the respective underlying assets and/or liabilities. 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 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 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. Our investment in unconsolidated entities includes preferred interests. Upon acquisition, we assess whether such investment should be considered debt or equity securities based on investment terms. As of December 31, 2024, our investment balance includes preferred interests classified as equity securities without a readily determinable fair value, for which we elect to apply the measurement alternative and record the value of the investment at cost, less any applicable impairment. Goodwill. 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. Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining or originating financing. Deferred financing costs, other than those associated with the line of credit, are presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability. Deferred financing costs related to the line of credit are included in 'Other assets, net' in the accompanying consolidated balance sheets. These costs are amortized to interest expense over the terms of the respective financing agreements that approximates the effective interest method. Depreciation and Amortization . Land, buildings and improvements are recorded and stated at cost. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives, while ordinary repairs and maintenance are expensed as incurred. 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- 58 Table of Contents 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. Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Buildings 25 to 35 years Building improvements 4 to 35 years Equipment 5 to 25 years Lease commissions and property improvements to accommodate the client's use The shorter of the term of the related lease or useful life Acquired in-place leases Remaining terms of the respective leases Provisions for Impairment - Real Estate Assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property, a fair value analysis is performed and, to the extent the estimated fair value is less than the current book value, a provision for impairment is recorded to reduce the book value to estimated fair value. Key assumptions that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates. For further details, see note 12, Fair Value Measurements. Provisions for Impairment - Goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary. Goodwill is qualitatively assessed to determine whether a quantitative impairment assessment is necessary. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value. We perform our annual goodwill impairment assessment as of June 30. During the years ended December 31, 2024, 2023, and 2022, there were no impairments of goodwill. Provisions for Impairment - Investment in Unconsolidated Entities. 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 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. If indicators are present, we estimate the fair value of the investments. If the carrying value of the investment is greater than the estimated fair value, we make an assessment of whether the impairment is temporary or other-than-temporary. In making this assessment, we consider the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the entity, and our intent and ability to retain the interest long enough for a recovery in market value. The investment is then reduced to its estimated fair value if conclusions indicate the impairment is other than temporary. Equity Offering Costs. Underwriting commissions and offering costs have been reflected as a reduction of additional paid-in-capital on our consolidated balance sheets. Derivative and Hedging Activities . Derivatives are financial arrangements among two or more parties with returns linked to or “derived” from an underlying equity, debt, commodity, other asset, liability, interest rate, foreign exchange rate or another index, or the occurrence or nonoccurrence of a specified event. The settlement of a derivative is determined by its underlying notional amount specified in the contract. Derivative contracts may be entered into outright or embedded within a non-derivative host contract, and may be listed, traded on exchanges or privately negotiated directly between two parties. We actively manage interest rate and foreign currency exposures arising from our liquidity and funding activities using derivative instruments. We record all derivatives on the balance sheet at fair value. 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 59 Table of Contents 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. Early adoption is permitted. We are currently evaluating the impact on our financial statement disclosures. 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. 2. 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. 60 Table of Contents 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) 142,136,567 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 Less: Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (2) $ ( 24,751 ) 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. A. 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 ASSETS 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 LIABILITIES 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. 61 Table of Contents 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. B. 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. C. Unaudited Pro Forma Financial Information 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, 2024 2023 Total revenues $ 5,319.1 $ 4,868.2 Net income $ 945.9 $ 893.2 Basic and diluted earnings per share $ 1.10 $ 1.12 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. 3. Supplemental Detail for Certain Components of Consolidated Balance Sheets (in thousands): A. Accounts receivable, net, consist of the following at: December 31, 2024 December 31, 2023 Straight-line rent receivables, net $ 694,844 $ 516,692 Client receivables, net 182,824 193,844 $ 877,668 $ 710,536 B. Lease intangible assets, net, consist of the following at: December 31, 2024 December 31, 2023 In-place leases $ 7,347,301 $ 5,500,404 Above-market leases 2,203,420 1,811,400 Accumulated amortization of in-place leases ( 2,487,302 ) ( 1,746,377 ) Accumulated amortization of above-market leases ( 742,338 ) ( 549,319 ) Other items 1,911 1,799 $ 6,322,992 $ 5,017,907 62 Table of Contents C. Other assets, net, consist of the following at: December 31, 2024 December 31, 2023 Financing receivables, net $ 1,609,044 $ 1,570,943 Loan receivable, net 828,500 205,339 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 Value-added tax receivable 48,075 100,672 Derivative assets and receivables - at fair value 47,165 21,170 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 Non-refundable escrow deposits 225 200 Other items 56,510 38,859 $ 4,018,568 $ 3,368,643 D. Accounts payable and accrued expenses consist of the following at: December 31, 2024 December 31, 2023 Notes payable - interest payable $ 261,605 $ 218,811 Property taxes payable 92,440 78,809 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 $ 759,416 $ 738,526 E. Lease intangible liabilities, net, consist of the following at: December 31, 2024 December 31, 2023 Below-market leases $ 2,119,200 $ 1,728,027 Accumulated amortization of below-market leases ( 483,430 ) ( 321,174 ) $ 1,635,770 $ 1,406,853 F. Other liabilities consist of the following at: December 31, 2024 December 31, 2023 Lease liability - operating leases $ 452,956 $ 425,213 Rent received in advance and other deferred revenue 352,334 312,195 Lease liability - financing leases 77,190 44,345 Security deposits 35,594 28,250 Other items 5,054 1,647 $ 923,128 $ 811,650 63 Table of Contents 4. Investments in Real Estate A. Acquisitions of Real Estate Below is a summary of our acquisitions for the year ended December 31, 2024 (unaudited): Number of Properties Leasable Square Feet (in thousands) Investment ($ in millions) Weighted Average Lease Term (Years) Initial Weighted Average Cash Lease Yield (1) Acquisitions - U.S. 287 3,535 $ 1,402.9 13.9 6.7 % Acquisitions - Europe 62 4,263 1,072.0 6.9 7.5 % Total acquisitions 349 7,798 $ 2,474.9 10.7 7.0 % Properties under development (2) 192 7,093 690.7 15.4 7.4 % Total (3) 541 14,891 $ 3,165.6 11.8 7.1 % (1) The initial weighted average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $ 1.5 million received as settlement credits as reimbursement of free rent periods for the year ended December 31, 2024. In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: 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 £ 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 Land $ 367.0 £ 279.7 € 56.5 Buildings and improvements 979.6 412.7 133.8 Lease intangible assets (1) 133.7 125.9 14.5 Other assets (2) 183.0 1.1 6.6 Lease intangible liabilities (3) ( 37.8 ) ( 12.5 ) ( 2.5 ) Other liabilities (4) ( 23.1 ) — ( 12.9 ) Total $ 1,602.4 £ 806.9 € 196.0 (1) The weighted average amortization period for acquired lease intangible assets is 9.4 years. (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. (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. 64 Table of Contents B. Investments in Existing Properties During the year ended December 31, 2024, we capitalized costs of $ 122.9 million on existing properties in our portfolio, consisting of $ 113.9 million for non-recurring building improvements, $ 8.6 million for re-leasing costs, and $ 0.4 million for recurring capital expenditures. In comparison, during the year ended December 31, 2023, we capitalized costs of $ 59.8 million on existing properties in our portfolio, consisting of $ 49.6 million for non-recurring building improvements, $ 9.9 million for re-leasing costs, and $ 0.3 million for recurring capital expenditures. C. Properties with Existing Leases The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible liabilities, net' on our consolidated balance sheets. The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases, for the years ended December 31, 2024, 2023, and 2022 were $ 870.2 million, $ 651.1 million, and $ 634.9 million, respectively. The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in our consolidated statements of income and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the years ended December 31, 2024, 2023, and 2022 were $ 34.7 million, $ 61.5 million, and $ 55.6 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate. The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at December 31, 2024 (in thousands): Net increase (decrease) to rental revenue Increase to amortization expense 2025 $ ( 33,129 ) $ 781,647 2026 ( 35,661 ) 683,461 2027 ( 36,420 ) 584,504 2028 ( 29,521 ) 494,976 2029 ( 25,537 ) 427,901 Thereafter 334,956 1,887,510 Total $ 174,688 $ 4,859,999 D. Gain on Sales of Real Estate The following table summarizes our properties sold during the periods indicated below (dollars in millions): Years ended December 31, 2024 2023 2022 Number of properties 294 121 170 Net sales proceeds $ 589.5 $ 117.4 $ 436.1 Gain on sales of real estate $ 117.3 $ 25.7 $ 103.0 65 Table of Contents 5. Investments in Unconsolidated Entities 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 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 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. 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, 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 earnings in unconsolidated entities $ 7,793 $ 2,546 $ ( 6,448 ) A. 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. B. 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. C. Bellagio Las Vegas Joint Venture Interests 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. 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. As a holder of preferred interests, we do not receive any additional voting rights, nor do we have conversion and redemption rights. Our maximum exposure to loss associated with this VIE is limited to our common and preferred equity investments. 66 Table of Contents D. Industrial Partnerships 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. 6. Investments in Loans and Financing Receivables A. Loans 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 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 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, 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. 67 Table of Contents 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. B. 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 C. 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) 1.8 — 1.8 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. 7. Revolving Credit Facility and Commercial Paper Programs A. Credit Facility 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 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. 68 Table of Contents As of December 31, 2024, credit facility origination costs of $ 7.3 million are included in 'Other assets, net', as compared to $ 12.3 million at December 31, 2023, on our consolidated balance sheets. These costs are being amortized over the remaining term of our revolving credit facility. B. 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 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, 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 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. 8. Term Loans 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. As of December 31, 2024, we were in compliance with the covenants contained in the term loans. 69 Table of Contents 9. Mortgages Payable 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. 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 following table summarizes our mortgages payable as of December 31, 2024 and December 31, 2023 (dollars in millions): As Of Number of Properties (1) Weighted Average Stated Interest Rate Weighted Average Effective Interest Rate Weighted Average Remaining Years Until Maturity Remaining Principal Balance Unamortized Discount and Deferred Financing Costs Balance, net Mortgage Payable Balance December 31, 2024 17 4.0 % 4.5 % 1.4 $ 81.3 $ ( 0.5 ) $ 80.8 December 31, 2023 131 4.8 % 3.3 % 0.4 $ 822.4 $ ( 0.8 ) $ 821.6 (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 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. 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 Principal 2025 $ 43.4 2026 12.0 2027 22.3 2028 1.3 2029 1.3 Thereafter 1.0 Total $ 81.3 70 Table of Contents 10. Notes Payable A. General 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): Maturity Dates Principal (Currency Denomination) Carrying Value (USD) as of December 31, 2024 December 31, 2023 4.600 % Notes due 2024 February 6, 2024 $ 499,999 $ — $ 499,999 3.875 % Notes due 2024 July 15, 2024 $ 350,000 — 350,000 3.875 % Notes due 2025 April 15, 2025 $ 500,000 500,000 500,000 4.625 % Notes due 2025 November 1, 2025 $ 549,997 549,997 549,997 5.050 % Notes due 2026 January 13, 2026 $ 500,000 500,000 500,000 0.750 % Notes due 2026 March 15, 2026 $ 325,000 325,000 325,000 4.875 % Notes due 2026 June 1, 2026 $ 599,997 599,997 599,997 4.450 % 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 1.875 % Notes due 2027 (2) January 14, 2027 £ 250,000 312,975 318,450 3.000 % Notes due 2027 January 15, 2027 $ 600,000 600,000 600,000 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 3.950 % Notes due 2027 August 15, 2027 $ 599,873 599,873 599,873 3.650 % Notes due 2028 January 15, 2028 $ 550,000 550,000 550,000 3.400 % Notes due 2028 January 15, 2028 $ 599,816 599,816 599,816 2.100 % 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 4.700 % Notes due 2028 December 15, 2028 $ 400,000 400,000 400,000 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 3.160 % Notes due 2030 June 30, 2030 £ 140,000 175,266 178,332 4.875 % Notes due 2030 (2) July 6, 2030 € 550,000 569,415 607,915 1.625 % Notes due 2030 (2) December 15, 2030 £ 400,000 500,760 509,520 3.250 % Notes due 2031 January 15, 2031 $ 950,000 950,000 950,000 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 5.625 % Notes due 2032 October 13, 2032 $ 750,000 750,000 750,000 2.850 % Notes due 2032 December 15, 2032 $ 699,655 699,655 699,655 1.800 % Notes due 2033 March 15, 2033 $ 400,000 400,000 400,000 71 Table of Contents Maturity Dates Principal (Currency Denomination) Carrying Value (USD) as of December 31, 2024 December 31, 2023 1.750 % Notes due 2033 (2) July 13, 2033 £ 350,000 438,165 445,830 4.900 % Notes due 2033 July 15, 2033 $ 600,000 600,000 600,000 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 5.125 % Notes due 2034 (2) July 6, 2034 € 550,000 569,415 607,915 5.875 % Bonds due 2035 March 15, 2035 $ 250,000 250,000 250,000 3.390 % Notes due 2037 June 30, 2037 £ 115,000 143,969 146,487 6.000 % Notes due 2039 (2) December 5, 2039 £ 450,000 563,355 573,210 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 4.650 % Notes due 2047 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 (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. (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 2026 2,375.0 2027 2,313.6 2028 2,499.8 2029 2,387.5 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. Interest incurred on all of the notes and bonds was $ 840.3 million, $ 598.6 million, and $ 431.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations. All of these notes and bonds contain various covenants, including: (i) a limitation on incurrence of any debt which would cause our debt to total adjusted assets ratio to exceed 60 %; (ii) a limitation on incurrence of any secured debt which would cause our secured debt to total adjusted assets ratio to exceed 40 %; (iii) a limitation on incurrence of any debt which would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150 % of our outstanding unsecured debt. At December 31, 2024, we were in compliance with these covenants. 72 Table of Contents B. Note Issuances 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 2024 February 2029 $ 450.0 99.23 % 4.923 % 5.125 % Notes January 2024 February 2034 $ 800.0 98.91 % 5.265 % 5.375 % Notes August 2024 September 2054 $ 500.0 98.37 % 5.486 % 5.000 % Notes September 2024 October 2029 £ 350.0 99.14 % 5.199 % 5.250 % Notes September 2024 September 2041 £ 350.0 96.21 % 5.601 % C. 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 % 3.200 % Notes due January 2027 $ 292.7 97.56 % 2.100 % Notes due March 2028 $ 443.8 98.62 % 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. D. 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 11. Noncontrolling Interests 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. represented 9.95 % ownership interest in Realty Income L.P. We hold the remaining 90.05 % interest and consolidate the entity. 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 . 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. We determined that the units meet the requirements to qualify for presentation as permanent equity. 73 Table of Contents The following table represents the change in the carrying value of all noncontrolling interests through December 31, 2024 (in thousands): Realty Income, L.P. units (1) Other Noncontrolling Interests Total Carrying value at December 31, 2022 $ 115,801 $ 14,339 $ 130,140 Contributions — 40,097 40,097 Distributions ( 5,663 ) ( 3,677 ) ( 9,340 ) Allocation of net income 3,934 671 4,605 Carrying value at December 31, 2023 $ 114,072 $ 51,430 $ 165,502 Contributions — 2,022 2,022 Distributions ( 6,810 ) ( 3,588 ) ( 10,398 ) Allocation of net income 5,898 671 6,569 Issuance of common partnership units 54,643 ( 7,390 ) 47,253 Carrying value at December 31, 2024 $ 167,803 $ 43,145 $ 210,948 (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. and other VIEs. For further information, see note 1, Summary of Significant Accounting Policies . 12. Fair Value Measurements Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820, Fair Value Measurements and Disclosures , sets forth a fair value hierarchy that categorizes inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. • Level 1 – Quoted market prices in active markets for identical assets and liabilities • Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other market-corroborated inputs • Level 3 – Inputs that are unobservable and significant to the overall fair value measurement We evaluate our hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from period to period. Changes in the type of inputs may result in a reclassification for certain assets. We have not historically had changes in classifications and do not expect that changes in classifications between levels will be frequent. 74 Table of Contents The following tables present the carrying values and estimated fair values of financial instruments as of December 31, 2024 and 2023 (in millions): December 31, 2024 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 Assets: Loans receivable $ 828.5 $ — $ 791.4 $ 43.7 Derivative assets 47.2 — 47.2 — Total assets $ 875.7 $ — $ 838.6 $ 43.7 Liabilities: Mortgages payable $ 81.3 $ — $ — $ 80.0 Notes and bonds payable 22,938.7 — 20,665.5 928.0 Derivative liabilities 81.5 — 81.5 — Total liabilities $ 23,101.5 $ — $ 20,747.0 $ 1,008.0 December 31, 2023 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 Assets: Loans receivable $ 205.3 $ — $ 171.8 $ 33.5 Derivative assets 21.2 — 21.2 — Total assets $ 226.5 $ — $ 193.0 $ 33.5 Liabilities: Mortgages payable $ 822.4 $ — $ — $ 814.5 Notes and bonds payable 18,562.1 — 16,620.8 982.9 Derivative liabilities 119.6 — 119.6 — Total liabilities $ 19,504.1 $ — $ 16,740.4 $ 1,797.4 A. 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, 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. The following table reflects the carrying amounts and estimated fair values of our financial instruments not measured at fair value on our consolidated balance sheets (in millions): December 31, 2024 December 31, 2023 Carrying value Fair value Carrying value Fair value Loans receivable $ 828.5 $ 835.1 $ 205.3 $ 205.3 Mortgages payable (1) $ 81.3 $ 80.0 $ 822.4 $ 814.5 Notes and bonds payable (1) $ 22,938.7 $ 21,593.5 $ 18,562.1 $ 17,603.7 (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. 75 Table of Contents 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. B. Financial Instruments Measured at Fair Value on a Recurring Basis For derivative assets and liabilities, we may utilize interest rate swaps, interest rate swaptions, and forward-starting swaps to manage interest rate risk, and cross-currency swaps, currency exchange swaps, and foreign currency forwards to manage foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, spot and forward rates, as well as option volatility. Derivative fair values also include credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within level 2 on the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize level three inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties. However, at 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 2. For more details on our derivatives, see note 13, Derivative Instruments . C. Items Measured at Fair Value on a Non-Recurring Basis Impairment of Real Estate Investments Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments only under certain circumstances, such as when an impairment write-down occurs. Depending on impairment triggering events during the applicable period, impairments are typically recorded for properties sold, in the process of being sold, vacant, in bankruptcy, or experiencing difficulties with collection of rent. The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (dollars in millions): Years ended December 31, 2024 2023 2022 Carrying value prior to impairment $ 770.7 $ 194.5 $ 140.9 Less: total provisions for impairment of real estate (1) ( 319.0 ) ( 82.2 ) ( 25.9 ) Carrying value after impairment $ 451.7 $ 112.3 $ 115.0 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. Estimating future cash flows is highly subjective and estimates can differ materially from actual results. 76 Table of Contents 13. Derivative Instruments In the normal course of business, our operations are exposed to economic risks from interest rates and foreign currency exchange rates. We may enter into derivative financial instruments to offset these underlying economic risks. 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 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. These swaps involve the receipt of fixed-rate amounts for variable interest rate payments over the life of the swaps without exchange of the underlying principal amount. We also designate some of our cross-currency swaps as fair value hedges as we use them to hedge foreign currency risk associated with changes in spot rates on foreign-denominated debt. For these hedging instruments, we have elected to exclude the change in fair value of the cross-currency swaps related to both time value and cross-currency basis spread from the assessment of hedge effectiveness (the "excluded component"). Changes in the fair value of the cross-currency swaps attributable to these excluded components are recorded to other comprehensive income and subsequently recognized in 'Foreign currency and derivative gain (loss), net' on a systematic and rational basis, as net cash settlements and interest accruals on the respective cross currency swaps occur, over the remaining life of the hedging instruments. 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 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 We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP and EUR. These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes. As the currency exchange swap is not accounted for as a hedging instrument, the change in fair value is recorded in earnings through the caption entitled 'Foreign currency and derivative gain (loss), net' in our consolidated statements of income and comprehensive income. 77 Table of Contents 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 Weighted Average Strike Rate (2) Maturity Date (3) Fair Value - asset (liability) as of Derivatives Designated as Hedging Instruments December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Interest rate swaps (4) 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 3 320.0 320.0 (6) Oct 2032 ( 42.2 ) ( 59.8 ) Cross-currency swaps - Net Investment 3 280.0 280.0 (7) Oct 2032 ( 37.6 ) ( 53.2 ) 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 ) Derivatives not Designated as Hedging Instruments Currency exchange swaps 4 $ 1,725.3 $ 1,810.6 (9) Jan 2025 $ 11.8 $ 8.9 $ 1,725.3 $ 1,810.6 $ 11.8 $ 8.9 Total of all Derivatives $ 4,854.8 $ 5,202.9 $ ( 34.4 ) $ ( 98.5 ) (1) This column represents the number of instruments outstanding as of December 31, 2024. (2) Weighted average strike rate is calculated using the notional value as of December 31, 2024. (3) This column represents maturity dates for instruments outstanding as of December 31, 2024. (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 %. (7) USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.716 %. (8) Weighted average forward GBP-USD exchange rate of 1.29 . (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. We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default. 78 Table of Contents The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands): Years ended December 31, Derivatives in Cash Flow Hedging Relationships 2024 2023 2022 Cross-currency swaps $ — $ — $ ( 5,091 ) Interest rate swaps ( 5,575 ) ( 11,171 ) 98,310 Foreign currency forwards 6,546 ( 13,349 ) 8,540 Interest rate swaptions 1,471 1,858 — Total derivatives in cash flow hedging relationships $ 2,442 $ ( 22,663 ) $ 101,759 Derivatives in Fair Value Hedging Relationships Cross-currency swaps - Fair Value $ ( 5,224 ) $ ( 14,602 ) $ ( 4,705 ) Total derivatives in fair value hedging relationships $ ( 5,224 ) $ ( 14,602 ) $ ( 4,705 ) Total unrealized (loss) gain on derivatives, net $ ( 2,782 ) $ ( 37,265 ) $ 97,054 Derivatives and Non-derivatives in Net Investment Hedging Relationships Cross-currency swaps - Net Investment $ 13,569 $ ( 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 Recognized in Income 2024 2023 2022 Cross-currency swaps Foreign currency and derivative gain (loss), net $ — $ — $ 30,814 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 ( 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 gain (loss), net $ 1,806 $ 1,415 $ ( 29,708 ) Total derivatives in fair value hedging relationships $ 1,806 $ 1,415 $ ( 29,708 ) Derivatives in Net Investment Hedging Relationships 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 $ — Net increase (decrease) to net income $ 40,453 $ 14,663 $ ( 1,242 ) 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. 79 Table of Contents The following table details our foreign currency and derivative gains (losses), net included in income (in thousands): Years ended December 31, 2024 2023 2022 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 (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: 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 ) 14. Leases A. As Lessor At December 31, 2024, we owned or held interests in 15,621 properties. Of the 15,621 properties, 15,316 , or 98.0 %, are single-client properties, and the remaining are multi-client properties. At December 31, 2024, 205 properties were available for lease or sale. The majority of our leases are accounted for as operating leases. 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) 2025 $ 4,845.1 $ 1.4 2026 4,685.1 1.4 2027 4,433.6 1.0 2028 4,082.3 0.7 2029 3,681.2 0.8 Thereafter 27,654.5 24.3 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. Two properties are subject to sales-type leases and, therefore, revenue is recognized as sales-type lease income on the discounted cash flows of the lease payments. Amounts reflected are the cash rent on these respective properties. B. As Lessee We are the lessee under certain ground lease arrangements, building, and corporate office space leases, which are primarily accounted for as operating leases. 80 Table of Contents 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 Leases Total 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. 15. Stockholders' Equity A. Common Stock 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, Month 2024 2023 2022 January $ 0.2565 $ 0.2485 $ 0.2465 February 0.2565 0.2485 0.2465 March 0.2565 0.2545 0.2465 April 0.2570 0.2550 0.2470 May 0.2570 0.2550 0.2470 June 0.2625 0.2550 0.2470 July 0.2630 0.2555 0.2475 August 0.2630 0.2555 0.2475 September 0.2630 0.2555 0.2475 October 0.2635 0.2560 0.2480 November 0.2635 0.2560 0.2480 December 0.2635 0.2560 0.2480 Total $ 3.1255 $ 3.0510 $ 2.9670 At December 31, 2024, a distribution of $ 0.2640 per common share was payable and was paid in January 2025. At December 31, 2023, a distribution of $ 0.2565 per common share was payable and was paid in January 2024. The following presents the federal income tax characterization of distributions paid or deemed to be paid per common share for the years: 2024 2023 2022 Ordinary income $ 2.1759803 $ 2.8434500 $ 2.7867654 Nontaxable distributions 0.9495197 0.2075500 — Total capital gain distribution — — 0.1802346 Total $ 3.1255000 $ 3.0510000 $ 2.9670000 81 Table of Contents B. 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. Upon settlement, subject to certain exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which cases we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser. As of 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 Shares of common stock issued under the ATM program (1) 30,169 91,699 68,608 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. C. 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 Shares of common stock issued under the DRSPP program 212 198 176 Gross proceeds $ 11.8 $ 11.5 $ 11.7 16. 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. 82 Table of Contents 17. 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") 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. As a result, 6.2 million additional shares were available for issuance under the 2021 Plan. 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. 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. A. Restricted Stock The following table summarizes our common stock grant activity: 2024 2023 2022 Number of shares Weighted average price (1) Number of shares Weighted average price (1) Number of shares Weighted average price (1) Outstanding nonvested shares, beginning of year 347,051 $ 67.89 242,660 $ 67.12 212,630 $ 65.20 Shares granted 346,321 $ 52.66 222,511 $ 65.40 156,274 $ 67.37 Shares vested ( 151,977 ) $ 56.45 ( 110,634 ) $ 61.28 ( 118,160 ) $ 63.95 Shares forfeited ( 27,096 ) $ 58.08 ( 7,486 ) $ 66.91 ( 8,084 ) $ 67.78 Outstanding nonvested shares, end of each period 514,299 $ 61.54 347,051 $ 67.89 242,660 $ 67.12 (1) Grant date fair value. 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. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares. 83 Table of Contents B. Restricted Stock Units 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 Number of restricted stock units Weighted average price (1) Number of restricted stock units Weighted average price (1) Number of restricted stock units Weighted average price (1) Outstanding nonvested shares, beginning of year 42,612 $ 65.62 58,513 $ 67.91 67,367 $ 69.69 Shares granted 30,538 $ 52.72 15,065 $ 66.41 24,820 $ 66.82 Shares vested ( 22,640 ) $ 58.31 ( 29,492 ) $ 70.30 ( 26,917 ) $ 70.55 Shares forfeited ( 11,979 ) $ 56.76 ( 1,474 ) $ 71.02 ( 6,757 ) $ 71.14 Outstanding nonvested shares, end of each period 38,531 $ 62.45 42,612 $ 65.62 58,513 $ 67.91 (1) Grant date fair value. 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. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The expense amortization period for restricted stock units 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 units are fully expensed at the grant date. C. Performance Shares During 2024, 2023, and 2022, we granted annual performance share awards, as well as dividend equivalent rights, to our executive officers. The number of performance shares that vest for each of the three years is based on the achievement of the following performance goals: Weighting for year granted Annual Performance Awards Metrics 2024 2023 2022 Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index 50 % 55 % 55 % Dividend per share growth rate 25 % 20 % 20 % Net Debt-to-Pro Forma Adjusted EBITDA re Ratio 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 following table summarizes our performance share grant activity: 2024 2023 2022 Number of performance shares Weighted average price (1) Number of performance shares Weighted average price (1) Number of performance shares Weighted average price (1) Outstanding nonvested shares, beginning of year 561,769 $ 72.64 470,880 $ 73.37 388,139 $ 68.09 Shares granted 309,363 $ 55.25 215,040 $ 73.32 174,940 $ 77.73 Shares vested ( 186,193 ) $ 57.16 ( 124,151 ) $ 76.59 ( 74,247 ) $ 59.62 Shares forfeited — $ — — $ — ( 17,952 ) $ 58.59 Outstanding nonvested shares, end of each period 684,939 $ 68.99 561,769 $ 72.64 470,880 $ 73.37 (1) Grant date fair value. 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. 84 Table of Contents 18. Net Income per Common Share 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): 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 19. 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. (1) $ 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) 36,326 6,247 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. 85 Table of Contents 20. Segment and Geographic Information A. 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 Property (excluding reimbursable) $ 74.6 $ 42.8 $ 41.6 Cash G&A expenses (1) $ 144.2 $ 118.3 $ 116.9 (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. B. Geographic Information The following table disaggregates domestic and international revenue by major asset types and geographic regions (in millions): Years ended December 31, 2024 U.S. U.K. Other (1) Total Retail $ 3,368.5 $ 508.2 $ 133.2 $ 4,009.9 Industrial 747.0 48.1 — 795.1 Other (2) 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 2023 U.S. U.K. Other (1) Total Retail $ 2,754.2 $ 374.0 $ 65.4 $ 3,193.6 Industrial 515.4 43.7 — 559.1 Other (2) 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 86 Table of Contents 2022 U.S. U.K. Other (1) Total Retail $ 2,455.9 $ 243.3 $ 30.9 $ 2,730.1 Industrial 465.2 30.2 — 495.4 Other (2) 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, 2024 2023 U.S. U.K. Other (1) Total U.S. U.K. Other (1) Total 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. 21. 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. 22. Subsequent Events A. Dividends In January 2025, we declared a dividend of $ 0.2640 per share to our common stockholders, which was paid in February 2025. In addition, in February 2025, we declared a dividend of $ 0.2680 , which will be paid in March 2025. B. 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. 87 Table of Contents Item 9: A Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.