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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-25 · 253 added, 225 removed, 370 unchanged (56% of the section changed)

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O), an S&P 500 company, is real estate partner to the world's leading companies ® .

Founded in 1969, we invest in diversified commercial real estate and, as of December 31, 2024, have a portfolio of over 15,600 properties in all 50 U.S.

states, the U.K., and six other countries in Europe.

Founded in 1969, we serve our clients as a full-service real estate capital provider.

As of December 31, 2025, we have a portfolio of over 15,500 properties in all 50 U.S.

states, the U.K., and eight other countries in Europe.

We are known as “The Monthly Dividend Company ® ” and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time.

Since our founding, we have declared 656 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats ® index for having increased our dividend for the last 30 consecutive years.

Since our listing on the NYSE in 1994, we have had 133 dividend increases and are a member of the S&P 500 Dividend Aristocrats ® index for having increased our dividend for over 31 consecutive years.

As of December 31, 2025, we owned or held interests in 15,511 properties, with approximately 355.0 million square feet of leasable space leased to 1,761 clients doing business in 92 separate industries.

Of the 15,621 properties in our portfolio as of December 31, 2024, 15,316, or 98.0%, were single-client properties, and the remaining were multi–client properties.

Of the 15,511 properties in our portfolio as of December 31, 2025, 15,167, or 97.8%, were single-tenant properties, and the remaining were multi–tenant properties.

Our total portfolio had a weighted average remaining lease term (excluding rights to extend a lease at the option of the client) of approximately 8.8 years.

Total portfolio annualized contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables) on our leases as of December 31, 2024 was $4.97 billion.

As of December 31, 2024, approximately 32.4% of our total portfolio annualized contractual rent came from properties leased to our investment grade clients, their subsidiaries or affiliated companies.

As of December 31, 2024, our top 20 clients (based on percentage of total portfolio annualized contractual rent) represented approximately 36.4% of our annualized rent and 10 of these clients had investment grade credit ratings or were subsidiaries or affiliates of investment grade companies.

Approximately 91% of our annualized retail contractual rent as of December 31, 2024, was derived from our clients with a service, non-discretionary, and/or low price point component to their business.

Total portfolio annualized base rent (defined as the monthly cash base rent for all leases in place as of the end of the period, multiplied by 12, excluding percentage rent) on our leases as of December 31, 2025 was $5.31 billion.

As of December 31, 2025, approximately 32.2% of our total portfolio annualized base rent came from properties leased to our investment grade clients, their subsidiaries or affiliated companies.

As of December 31, 2025, our top 20 clients (based on percentage of total portfolio annualized base rent) represented approximately 35.8% of our annualized base rent and 11 of these clients had investment grade credit ratings or were subsidiaries or affiliates of investment grade companies.

Approximately 91% of our annualized retail base rent as of December 31, 2025, was derived from our clients with a service, non-discretionary, and/or low price point component to their business.

Unless otherwise specified, references to rental revenue in the Management's Discussion and Analysis of Financial Condition and Results of Operations are exclusive of reimbursements from clients for recoverable real estate taxes and operating expenses totaling $340.4 million, $303.1 million, and $274.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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Increases in Monthly Dividends to Common Stockholders

We have continued our 56-year history of paying monthly dividends.

In addition, we have increased the dividend five times during 2024 and twice during 2025.

We have continued our 57-year history of paying monthly dividends by increasing the dividend five times during 2025 and once during 2026.

As of February 2026, we have paid 113 consecutive quarterly dividend increases and increased the dividend 133 times since our listing on the NYSE in 1994.

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1st increase Dec 2024 Jan 2025 $ 0.2640 $ 0.0005

2nd increase Mar 2024 Apr 2024 $ 0.2570 $ 0.0005

3rd increase May 2024 Jun 2024 $ 0.2625 $ 0.0055

2nd increase Feb 2025 Mar 2025 $ 0.2680 $ 0.0040

3rd increase Mar 2025 Apr 2025 $ 0.2685 $ 0.0005

4th increase Jun 2025 Jul 2025 $ 0.2690 $ 0.0005

5th increase Sep 2025 Oct 2025 $ 0.2695 $ 0.0005

2025 Dividend increases

2026 Dividend increase

1st increase Dec 2025 Jan 2026 $ 0.2700 $ 0.0005

2nd increase Feb 2025 Mar 2025 $ 0.2680 $ 0.0040

The dividends paid per share during the year ended December 31, 2025 totaled $3.2170, as compared to $3.1255 during the year ended December 31, 2024, an increase of $0.0915, or 2.9%.

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Although we expect to continue our policy of paying monthly dividends, we cannot guarantee that we will maintain our current level of dividends, that we will continue our pattern of increasing dividends per share, or what our actual dividend yield will be in any future period.

Closing of Spirit Merger

On January 23, 2024, we closed on our previously announced stock-for-stock merger with Spirit.

The Merger is further described in note 2, Merger with Spirit Realty Capital, Inc.

, to the consolidated financial statements contained in this annual report.

During the year ended December 31, 2024, we invested $3.9 billion at an initial weighted average cash yield of 7.4%, including an investment in 546 properties, properties under development or expansion, and investments in loans.

See notes 4 , Investments in Real Estate, 5, Investments in Unconsolidated Entities, and 6, Investments in Loans and Financing Receivables, to the consolidated financial statements contained in this annual report for further details.

Private Fund Business

In December 2025, we secured an additional $816.3 million in commitments for the Fund, bringing total commitments to approximately $1.5 billion.

As a result of this and previously announced closings, the Company anticipates to close its cornerstone equity capital raise round on or before March 31, 2026 and is capping its commitments during this round at $1.7 billion.

During the year ended December 31, 2025, we invested $6.3 billion at an initial weighted average cash yield of 7.3%, including investments in 380 properties, properties under development or expansion, unconsolidated entities, a preferred equity investment, and loans.

See notes 4 through 7 to the consolidated financial statements for further details.

Preferred Equity Investment in CityCenter Las Vegas Real Estate Assets

In December 2025, we acquired an $800.0 million preferred equity interest in the real estate assets of CityCenter Las Vegas, comprised of the ARIA Resort & Casino and Vdara Hotel & Spa, which is owned by funds affiliated with Blackstone Real Estate.

Blackstone Real Estate will retain 100% of the common equity ownership of the property, which will continue to be operated by MGM Resorts International.

Establishment of Joint Venture with GIC

In January 2026, we announced the establishment of a strategic relationship with GIC, a leading global institutional investor, including the formation of a build-to-suit development joint venture with total combined commitments of over $1.5 billion.

During the year ended December 31, 2025, we sold 425 properties with total net proceeds received of $744.0 million.

Equity Capital Raising

During 2024, we raised $1.8 billion of proceeds from the sale of common stock, at a weighted average price of $58.33 per share, primarily through proceeds from the sale of common stock through our ATM program.

The ATM program issuances during 2024 included 30.2 million shares issued pursuant to forward sale confirmations.

As of December 31, 2024, 1.8 million shares of common stock subject to forward sale confirmations have been executed but not settled.

In November 2025, we replaced our prior ATM program with a new ATM program, pursuant to which we may offer and sell up to 150.0 million shares of common stock.

During the year ended December 31, 2025, we raised $2.4 billion of proceeds from the sale of common stock at a weighted average price of $57.14 per share, primarily through the settlement of 42.0 million shares of common stock under our ATM program.

As of December 31, 2025, we had outstanding forward sale agreements under our ATM program for a total of 12.6 million shares of common stock, representing expected net proceeds of approximately $708.5 million (assuming full physical settlement of such agreements).

See note 16 , Stockholders' Equity , to the consolidated financial statements contained in this annual report for further details.

Credit Facilities

In April 2025, we closed on the recast and expansion of our multi-currency unsecured credit facilities totaling $5.38 billion, including a $1.38 billion unsecured facility for the Fund.

See note 8 , Credit Facilities and Commercial Paper Programs , to the consolidated financial statements for further details.

Term Loan Amendment

In November 2025, we entered into a term loan agreement that amends and restates the previous agreement governing our $1.5 billion multi-currency term loan, dated January 6, 2023.

The agreement provides for a £900.0 million Sterling-denominated term loan facility that will initially mature in January 2028, before giving effect to one twelve-month extension option.

See note 9, Term Loans, to the consolidated financial statements for further details.

Note Issuances

In September 2024, we issued £350.0 million of 5.000% senior unsecured notes due October 2029 and £350.0 million of 5.250% senior unsecured notes due September 2041.

In August 2024, we issued $500.0 million of 5.375% senior unsecured notes due September 2054.

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

In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit Realty, L.P.

(“Spirit OP”).

See note 10, Notes Payable , to the consolidated financial statements contained in this annual report for further details.

Redemption of Preferred Stock

On September 30, 2024, we redeemed all 6.9 million shares outstanding of our 6.000% Series A Preferred Stock (“Realty Income Series A Preferred Stock”), which was converted from Spirit's outstanding preferred stock in connection with the Merger, at a redemption price of $25.00 per share, plus accrued and unpaid dividends.

For more details, see note 16, Series A Preferred Stock, to the consolidated financial statements contained in this annual report.

In October 2025, we issued $400.0 million of 3.950% senior unsecured notes due February 2029 and $400.0 million of 4.500% senior unsecured notes due February 2033.

In June 2025, we issued €650.0 million of 3.375% senior unsecured notes due June 2031 and €650.0 million of 3.875% senior unsecured notes due June 2035.

In April 2025, we issued $600.0 million of 5.125% senior unsecured notes due April 2035.

See note 11 , Notes Payable , to the consolidated financial statements for further details.

Convertible Bond Issuance

In January 2026, we issued $862.5 million aggregate principal amount of 3.500% convertible senior notes due January 2029 in a private offering, for estimated net proceeds of $845.5 million.

We used approximately $101.9 million of the net proceeds to repurchase approximately 1.8 million shares of our common stock concurrently with the pricing of the offering.

Portfolio Discussion

Leasing Results

At December 31, 2024, we had 205 properties available for lease or sale out of 15,621 properties in our portfolio, which represents a 98.7% occupancy rate based on the number of properties in our portfolio.

Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and include properties owned by unconsolidated joint ventures.

As of December 31, 2025, we had 173 properties available for lease or sale out of 15,511 properties in our portfolio, which represents a 98.9% occupancy rate based on the number of properties in our portfolio.

Our property-level occupancy rate excludes properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and includes properties owned by unconsolidated joint ventures.

Below is a summary of our portfolio activity for the periods indicated below:

Three months ended December 31, 2025

Properties available for lease at September 30, 2024

Properties available for lease as of September 30, 2025

Lease expirations (1)

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Vacant dispositions (115)

Properties available for lease at December 31, 2024

Properties available for lease as of December 31, 2025

Year ended December 31, 2025

Properties available for lease at December 31, 2023

Properties available for lease as of December 31, 2024

Lease expirations (1)

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Vacant dispositions (334)

Properties available for lease at December 31, 2024

Properties available for lease as of December 31, 2025

(1) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.

During the three months ended December 31, 2024, the new annualized contractual rent on re-leases was $52.5 million, as compared to the previous annual rent of $48.9 million on the same units, representing a rent recapture rate of 107.4% on the units re-leased.

During the year ended December 31, 2024, the new annualized contractual rent on re-leases was $184.0 million, as compared to the previous annual rent of $174.2 million on the same units, representing a rent recapture rate of 105.6% on the units re-leased.

During the three months ended December 31, 2025, the new annualized base rent on re-leased units was $88.30 million, as compared to the previous annual rent of $84.21 million on the same units, representing a rent recapture rate of 104.9% on the re-leased units.

During the year ended December 31, 2025, the new annualized base rent on re-leased units was $301.99 million, as compared to the previous annual rent of $290.61 million on the same units, representing a rent recapture rate of 103.9% on the re-leased units.

As part of our re-leasing costs, we pay leasing commissions to unrelated, third-party real estate brokers consistent with the commercial real estate industry standard, and sometimes provide rent concessions to our clients.

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Impact of Current Macroeconomic Conditions

We continue to monitor developments related to macroeconomic factors that could have an adverse impact on our business and our clients.

Our clients face additional challenges, including potential changes in consumer confidence levels, behavior and spending and increased operational expenses, such as with respect to labor costs.

We monitor developments related to macroeconomic factors that could have an adverse impact on our business and our clients.

Our clients face challenges that may differ from or be additional to challenges we face, including potential changes in consumer confidence levels, behavior and spending and increased operational expenses, including potential impacts from changes in global trade policies.

The extent of the future effects on our business, results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future developments, none of which can be predicted.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2024, we had $3.7 billion of liquidity, which consists of cash and cash equivalents of $445.0 million, unsettled ATM forward equity of $91.8 million, and $3.1 billion of availability under our $4.25 billion unsecured revolving credit facility, net of $1.1 billion of borrowing on the revolving credit facility and after deducting $67.3 million in borrowings under our commercial paper programs.

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

Our primary cash obligations, for the current year and subsequent years, are included in the “Material Cash Requirements” table, which is presented later in this section.

Our primary cash obligations are included in the “Material Cash Requirements” table, which is presented later in this section.

We expect to fund our operating expenses and other short-term liquidity requirements, including property acquisitions and development costs, payment of principal and interest on our outstanding indebtedness, property improvements, re-leasing costs, and cash distributions to common stockholders, primarily through a combination of the following:

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• Issuances of common stock or debt, or other securities offerings;

• Additional borrowings under our revolving credit facility or commercial paper programs, which are backstopped by our credit facility;

• Additional borrowings under our credit facilities or commercial paper programs, which are backstopped by our credit facilities;

• Short-term loans;

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• Credit investment repayments.

In addition to these sources of liquidity, we are exploring various capital diversification initiatives, including the establishment of a third-party private capital open-end fund.

In addition to these sources of liquidity, in 2025 we launched a perpetual life fund, raising approximately $1.5 billion in commitments from institutional investors.

The Company anticipates to close its cornerstone equity capital raise round on or before March 31, 2026 and is capping its commitments during this round at $1.7 billion.

The Company seeks to hold additional closings during the life of the Fund, and the Company intends to evaluate other opportunities to raise private capital in the future, including potentially through additional funds and/or joint venture opportunities.

We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing capacity are sufficient to meet our liquidity needs for the next twelve months.

We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our credit facility and commercial paper programs.

We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our credit facilities and commercial paper programs.

Long-Term Liquidity Requirements

Our goal is to deliver dependable monthly dividends to our stockholders that increase over time.

Our primary goal is to deliver dependable monthly dividends to stockholders that increase over time.

Historically, we have met our principal short-term and long-term capital needs, including the funding of high-quality real estate acquisitions, investments in loans to clients, property development, and capital expenditures by issuing common stock, long-term unsecured notes, and term loan borrowings.

Over the long term, we believe that common stock should be the majority of our capital structure.

We may issue common stock when we believe our share price is at a level that allows for the proceeds of an offering to be accretively invested into additional properties or to permanently finance properties that were initially financed by our revolving credit facility, commercial paper programs, or shorter-term debt securities.

However, we cannot assure you that we will have access to the capital markets at all times and at terms that are acceptable to us.

While the issuance of common stock has historically been an important component of our capital structure, we continue to broaden and diversify our sources of capital to reduce reliance on the public capital markets.

This approach enhances capital availability across market cycles, improves cost‑of‑capital certainty, and increases financial flexibility.

However, there can be no assurance that our efforts will be successful.

Capitalization

As of December 31, 2025, our total capitalization was $82.5 billion.

Total capitalization consisted of $47.8 billion of common equity (based on the December 31, 2024 closing price on the NYSE of $53.41 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $27.2 billion on our revolving credit facility, commercial paper, term loans, mortgages payable, senior unsecured notes and bonds, and our proportionate share of unconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums).

Our total debt to capitalization was 36.3% at December 31, 2024.

Universal Shelf Registration

On February 16, 2024, we filed a new shelf registration statement with the SEC, which is effective for a term of three years and will expire in February 2027.

In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit.

The securities covered by this registration statement include (1) common stock, (2) preferred stock, (3) debt securities, (4) depositary shares representing fractional interests in shares of preferred stock, (5) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (6) any combination of these securities.

We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered.

The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

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 at prevailing market prices or at negotiated prices or by any other methods permitted by applicable law.

As of December 31, 2024, there were approximately 1.8 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, representing approximately $91.8 million in expected net proceeds, which have been executed at a weighted average price of $51.80 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates).

Total capitalization consisted of $52.8 billion of common equity (based on the December 31, 2025 closing price on the NYSE of $56.37 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $29.7 billion on our credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds and our proportionate share of joint venture debt (excluding unamortized deferred financing costs, discounts, and premiums).

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 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.

No shares were repurchased in 2025.

In January 2026, we repurchased approximately 1.8 million shares of our common stock for approximately $101.9 million.

See note 23 , Subsequent Events , to the consolidated financial statements for further details.

During the year ended December 31, 2025, we settled approximately 42.0 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $2.4 billion of net proceeds.

As of December 31, 2024, we had 55.5 million shares remaining for future issuance under our ATM program.

As of December 31, 2025, we had outstanding forward-sale agreements under our ATM program for a total of 12.6 million shares of common stock, representing approximately $708.5 million in expected net proceeds, which have been executed at a weighted average price of $56.26 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates).

Additionally, as of December 31, 2025, we had 141.1 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.

Debt Financing Activities

At December 31, 2024, our total outstanding borrowings of revolving credit facility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $26.5 billion, with a weighted average maturity of 5.8 years and a weighted average interest rate of 3.9%.

As of December 31, 2025, our total outstanding borrowings of credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $29.1 billion, with a weighted average maturity of 5.5 years and a weighted average interest rate of 3.9%.

As of December 31, 2025, approximately 93% of our total debt was fixed rate debt.

See notes 7 through 10 to the consolidated financial statements contained in this annual report for additional information about our outstanding debt, along with our debt financing activities during the year ended December 31, 2024 below.

See notes 8 through 11 to the consolidated financial statements for additional information about our outstanding debt, along with our debt financing activities during the year ended December 31, 2025 below.

Credit Facilities

In April 2025, we entered into new $4.0 billion unsecured multicurrency revolving credit facilities, to amend and restate our previous $4.25 billion unsecured revolving credit facility.

Our new revolving credit facilities consist of (a) a $2.0 billion unsecured multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2027 and (b) a $2.0 billion unsecured multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2029 (collectively, the “RI Credit Facilities”).

The RI Credit Facilities also include two six-month extensions for each facility, which can be exercised at our option.

As of December 31, 2025, we had a borrowing capacity of $2.7 billion available on our RI Credit Facilities (subject to customary conditions to borrowing) and an outstanding balance of $1.3 billion.

In connection with the closing of the RI Credit Facilities, the Fund entered into a newly-established $1.38 billion unsecured credit facility, which provides for (a) an up to $1.0 billion unsecured revolving credit facility and (b) an up to $380.0 million unsecured delayed draw term loan which is available to be drawn for twelve months after April 29, 2025 (the "Closing Date") (collectively, the “Fund Credit Facilities”).

The revolving credit facility under the Fund Credit Facilities matures in April 2029 and the delayed draw term loan under the Fund Credit Facilities matures in April 2028.

The Fund Credit Facilities also include two six-month extensions for each facility, which can be exercised at our option.

The aggregate amount under the Fund Credit Facilities can be increased to up to $2.0 billion pursuant to an accordion expansion feature, which is subject to obtaining lender commitments.

As of December 31, 2025, we had a borrowing capacity of $1.2 billion available on our Fund Credit Facilities (subject to customary conditions to borrowing) and an outstanding balance of $182.0 million.

Term Loan Amendment

In November 2025, we entered into a term loan agreement that amends and restates the previous agreement governing our $1.5 billion multi-currency term loan, dated January 6, 2023.

The agreement provides for a £900.0 million Sterling-denominated term loan facility that will initially mature in January 2028, before giving effect to one twelve-month extension option.As of December 31, 2025, we had an outstanding balance of $1.2 billion.

In conjunction with the closing, we executed variable-to-fixed interest rate swaps, which fix the weighted average per annum interest rate at 4.3% over the two-year term.

Term Loan Redemptions

In August 2025, we repaid our $300.0 million unsecured term loan in full upon maturity, plus $0.3 million in accrued and unpaid interest.

In June 2025, we repaid our $500.0 million unsecured term loan in full upon maturity, plus $2.3 million in accrued and unpaid interest.

Mortgage Repayments

During the year ended December 31, 2025, we made $44.6 million in principal payments, including the full repayment of three mortgages for $42.9 million.

Note Issuances

During the year ended December 31, 2025, we issued the following notes and bonds:

Note Issuances Date of Issuance Maturity Date Principal amount

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

January 2024 February 2029 $ 450.0 99.23 % 4.923 %

January 2024 February 2034 $ 800.0 98.91 % 5.265 %

August 2024 September 2054 $ 500.0 98.37 % 5.486 %

September 2024 October 2029 £ 350.0 99.14 % 5.199 %

September 2024 September 2041 £ 350.0 96.21 % 5.601 %

In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit OP.

See note 10, Notes Payable , to the consolidated financial statements contained in this annual report for further details.

2025 Issuances Date of Issuance Maturity Date Principal amount (in millions) Price of par value Effective yield to maturity

April 2025 April 2035 $ 600.0

98.37 % 5.337 %

June 2025 June 2031 € 650.0 99.57 % 3.456 %

June 2025 June 2035 € 650.0 99.55 % 3.930 %

October 2025 February 2029 $ 400.0 99.41 % 4.143 %

October 2025 February 2033 $ 400.0 98.87 % 4.685 %

Convertible Bond Issuance

In January 2026, we issued $862.5 million aggregate principal amount of 3.500% convertible senior notes due January 2029 in a private offering, for estimated net proceeds of $845.5 million.

We used approximately $101.9 million of the net proceeds to repurchase approximately 1.8 million shares of our common stock concurrently with the pricing of the offering.

The notes will be senior, unsecured obligations of Realty Income and will accrue interest at a rate of 3.500% per annum, payable semi-annually in arrears.

The notes will mature on January 15, 2029, unless earlier repurchased, redeemed or converted.

See note 23 , Subsequent Events , to the consolidated financial statements for further details.

Note Repayments

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

Note Repayments Date of Issuance Maturity Date Principal amount

2025 Repayments Date of Issuance Maturity Date Principal amount

(in millions)

February 2014 February 2024 $ 500.0

June 2014 July 2024 $ 350.0

Term Loan Issuances

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”).

Term Loan Redemption

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

Mortgage Repayments

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.

April 2018 April 2025 $ 500.0

October 2018 November 2025 $ 550.0

2026 Repayment Date of Issuance Maturity Date Principal amount

(in millions)

January 2023 January 2026 $ 500.0

Note Covenants

The following is a summary of the key financial covenants for our senior unsecured notes, as defined and calculated per the terms of our senior notes and bonds.

These calculations, which are not based on U.S.

GAAP, are presented to investors to show our ability to incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance with such covenants and are not measures of our liquidity or performance.

GAAP measurements, are presented to investors to show our ability to incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance with such covenants and are not measures of our liquidity or performance.

The actual amounts as of December 31, 2025, are:

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(1) Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that:

(i) the incurrence of any debt (as defined in the covenants) incurred by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other debt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters had in each case occurred on January 1, 2024 and subject to certain additional adjustments.

Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of January 1, 2024, nor does it purport to reflect our debt service coverage ratio for any future period.

(i) the incurrence of any Debt (as defined in the covenants) by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our Debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters and subject to certain additional adjustments.

Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of the first day of four-quarter period, nor does it purport to reflect our debt service coverage ratio for any future period.

Fixed charge coverage is calculated in the same manner as the debt service coverage.

The following is our calculation of debt service and fixed charge coverage at December 31, 2024 (in thousands, for trailing twelve months):

The following is our calculation of debt service and fixed charge coverage as of December 31, 2025 (in thousands, for trailing twelve months):

Net income attributable to the Company

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Total pro forma debt service charge

Debt service and fixed charge coverage ratio

Debt service and fixed charge coverage ratio 4.7x

Credit Agency Ratings

The borrowing interest rates under our revolving credit facility are based upon our ratings assigned by credit rating agencies.

The borrowing interest rates under our revolving credit facilities are based upon our ratings assigned by credit rating agencies.

As of December 31, 2025, we were assigned the following investment grade corporate credit ratings on our senior unsecured notes and bonds:

Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook.

In addition, we were assigned the following ratings on our commercial paper at December 31, 2024:

In addition, we were assigned the following ratings on our commercial paper as of December 31, 2025:

Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.

Based on our credit agency ratings as of December 31, 2024, interest rates under our credit facility for U.S.

borrowings would have been at the SOFR, plus 0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility fee of 0.125%, for all-in drawn 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 drawn pricing of 0.8826% over SONIA, and for Euro ("EUR") borrowings at one-month EURIBOR, plus 0.725%, and a revolving credit facility fee of 0.125%, for all-in drawn pricing of 0.85% over one-month EURIBOR.

In addition, our credit facility provides that the interest rates can range between:

(i) SOFR/SONIA/EURIBOR, plus 1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) SOFR/SONIA/EURIBOR, plus 0.70% if our credit rating is A/A2 or higher.

In addition, our credit facility provides for a facility commitment fee based on our credit ratings, which ranges from:

Based on our credit rating agency ratings as of December 31, 2025, our credit facilities provide for (i) USD borrowings at Secured Overnight Financing Rate ("SOFR") plus 0.725% and (ii) British Pound Sterling ("GBP") borrowings at the Sterling Overnight Indexed Average (“SONIA”) plus 0.725%, and (iii) EURO ("EUR") borrowings at a benchmark rate selected in accordance with the credit agreement.

A revolving credit facility commitment fee of 0.125% is payable on the total commitment amount.

The credit agreement also provides flexibility to elect different interest rate tenors or daily rate options for each currency tranche.

In addition, our credit facilities provide that the interest rates can range between:

(i) SOFR/SONIA/Euro Interbank Offered Rate (“EURIBOR”), plus 1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) SOFR/SONIA/EURIBOR, plus 0.70% if our credit rating is A/A2 or higher.

In addition, our credit facilities provide for a facility commitment fee based on our credit ratings, which ranges from:

(i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.

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Material Cash Requirements

The following table summarizes the maturity of each of our obligations as of December 31, 2024 (dollars in millions):

Credit Facility and Commercial Paper (1)

Unsecured Term

Loans Mortgages Payable Senior Unsecured Notes and Bonds Interest (2)

Ground Leases Paid by the Company (3)

Ground Leases Paid by

Our Clients (4)

The following table summarizes the maturity of each of our obligations as of December 31, 2025 (in millions):

2026 2027 2028 2029 2030 Thereafter Total

Credit Facilities (1)

$ — $ 823.5 $ — $ 683.1 $ — $ — $ 1,506.6

Commercial Paper (2)

516.8 — — — — — 516.8

Unsecured Term Loans — 500.0 1,211.0 — — — 1,711.0

Mortgages Payable 12.0 22.3 1.3 1.3 1.0 — 37.9

Senior Unsecured Notes and Bonds 2,375.0 2,374.5 2,499.8 2,820.3 2,472.3 12,801.9 25,343.8

1,069.4 964.5 801.1 731.4 597.5 2,877.8 7,041.7

Ground Leases Paid by the Company (4)

20.4 13.8 11.7 12.9 13.4 570.7 642.9

Ground Leases Paid by Our Clients (5)

31.7 30.1 27.2 24.9 23.3 311.0 448.2

663.8 175.0 4.6 — — 4.6 848.0

Thereafter — — 1.0 12,312.8 2,922.1 406.7 336.4 11.0 15,990.0

Total $ 4,689.1 $ 4,903.7 $ 4,556.7 $ 4,273.9 $ 3,107.5 $ 16,566.0 $ 38,096.9

(1) The initial term of the credit facility expires in June 2026 and includes, at our option, two six-month extensions.

At December 31, 2024, there were $1,062.9 million of outstanding borrowings under our revolving credit facility, and commercial paper programs outstanding were $67.3 million, which mature between January 2025 and March 2025.

(1) The initial terms of the RI Credit Facilities expire in April 2027 and April 2029 and include, at our option, two six-month extensions.

The initial term of the revolving credit facility under the Fund Credit Facilities expires in April 2029 and includes, at our option, two six-month extensions.

(2) Commercial paper programs outstanding were $516.8 million, maturing between January 2026 and February 2026.

(3) Interest on the commercial paper programs, term loans, mortgages payable, and senior unsecured notes and bonds has been calculated based on outstanding balances at period end through their respective maturity dates.

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(5) Our clients, who are generally sub-tenant clients under ground leases, are responsible for paying the rent under these ground leases.

In the event our client fails to pay the ground lease rent, we are primarily responsible.

(5) “Other” consists of $683.3 million of commitments under construction contracts, $93.5 million for tenant improvements, re-leasing costs, recurring capital expenditures, and non-recurring building improvements, and $11.5 million for contingent purchase consideration obligations related to leasing activities for a multi-tenant property acquired.

(6) “Other” consists of $805.0 million of commitments under construction contracts, and $43.0 million for tenant improvements, recurring capital expenditures, and building improvements.

Investments in Unconsolidated Entities

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We distributed $3.22 per share to stockholders during the year ended December 31, 2025, representing 75.2% of our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $4.28.

Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, Funds from Operations Available to Common Stockholders ("FFO"), Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO"), AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, our debt service requirements, and any other factors the Board of Directors may deem relevant.

In addition, our credit facility contains financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our credit facility.

Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, Funds from Operations Available to Common Stockholders ("FFO"), Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO"), AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code, our debt service requirements, and any other factors the Board of Directors may deem relevant.

In addition, our RI Credit Facilities contain financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our RI Credit Facilities.

Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax.

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In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends are attributable to dividends received from certain taxable corporations (such as our TRSs) or to income that was subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year).

However, non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017, and before January 1, 2026.

Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the stockholders’ basis in their stock, but not below zero.

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Total Revenue

The following summarizes our total revenue (in millions):

The following summarizes our total revenue (in thousands):

Years ended December 31,

2025 2024 Change

Rental (excluding reimbursable)

Rental (excluding reimbursements)

$ 5,096,934 $ 4,740,660 $ 356,274

Rental (reimbursable)

Rental (reimbursements)

340,398 303,088 37,310

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$ 5,749,377 $ 5,271,142 $ 478,235

Rental Revenue (excluding reimbursable)

The table below summarizes the increase in rental revenue (excluding reimbursable) in the years ended December 31, 2024 and 2023 (dollars in millions):

Number of Properties Years ended December 31,

2024 2023 Change

Rental Revenue (excluding reimbursements)

The table below summarizes the increase in rental revenue (excluding reimbursements) in the years ended December 31, 2025 and 2024 (dollars in thousands):

Years ended December 31,

Number of Properties 2025 2024 Change

Properties acquired during 2025 & 2024

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N/A 58,714 19,601 39,113

Spirit rental revenue (5)

N/A — (47,047) 47,047

Total $ 5,096,934 $ 4,740,660 $ 356,274

(1) The same store rental revenue percentage increased by 0.5% for the year ended December 31, 2024 as compared with the same period in 2023.

(1) The same store rental revenue percentage increased by 1.3% for the year ended December 31, 2025 as compared to the same period in 2024.

(2) For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2025.

None of the properties in France, Germany, Ireland, or Portugal met our same store pool definition for the periods presented.

In addition, the same store pool excludes properties assumed on January 23, 2024 as a result of the Merger.

(3) Relates to the aggregate of (i) rental revenue from 315 properties that were available for lease during part of 2024 or 2023 for the year ended December 31, 2024, and (ii) rental revenue for 50 properties under development or completed developments that do not meet our same store pool definition for the year ended December 31, 2024.

(4) "Other excluded revenue" primarily consists of reimbursements for tenant improvements and rental revenue that is not contractual base rent such as lease termination settlements.

(3) Relates to the aggregate of (i) rental revenue from 294 properties that were available for lease during part of 2025 or 2024 for the year ended December 31, 2025, respectively and (ii) rental revenue for 126 properties under development or completed developments that do not meet our same store pool definition for the years ended December 31, 2025, respectively.

(4) "Other excluded revenue" primarily consists of reimbursements related to lease termination fees and other settlement income.

(5) Amounts for the year ended December 31, 2024 represent rental revenue from Spirit Realty Capital, Inc.

(“Spirit”) properties, which were not included in our financial statements prior to the close of the merger (the "Merger") with Spirit on January 23, 2024.

For purposes of determining the same store rent property pool, we include all properties that were owned for the entire year-to-date period, for both the current and prior year, except for properties during the current or prior year that;

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Percentage rent represents less than 1% of rental revenue.

At December 31, 2024, our portfolio of 15,621 properties was 98.7% leased with 205 properties available for lease or sale, as compared to 98.6% leased with 193 properties available for lease at December 31, 2023.

As of December 31, 2025, our portfolio of 15,511 properties was 98.9% leased with 173 properties available for lease or sale, as compared to 98.7% leased with 205 properties available for lease as of December 31, 2024.

It has been our experience that approximately 1% to 4% of our property portfolio will be available for lease at any given time;

however, it is possible that the number of properties available for lease or sale could increase in the future, given the nature of economic cycles and other unforeseen global events.

Rental Revenue (reimbursable)

Rental Revenue (reimbursements)

A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses.

Contractually obligated reimbursements by our clients increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the growth of our portfolio due to acquisitions;

partially offset by lower recoverable taxes as a result of a modification of tax remittance terms with a client in the prior year.

Contractually obligated reimbursements by our clients increased by $37.3 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher reimbursable property taxes and maintenance due to growth in our portfolio.

Other Revenue

The following summarizes our total other revenue (in millions):

The following summarizes our total other revenue (in thousands):

Years ended December 31,

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$ 312,045 $ 227,394 $ 84,651

Total Expenses

The following summarizes our total expenses (in millions):

Total other revenue increased by $84.7 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher interest income on loans and preferred equity investments driven by growth in our loan portfolio.

The following summarizes our total expenses (in thousands):

Years ended December 31,

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Interest 1,134,879 1,016,955 117,924

Property (excluding reimbursable) 74.6 42.8 31.8

Property (reimbursable) 303.1 274.2 28.9

Property (excluding reimbursements) 88,402 74,587 13,815

Property (reimbursements) 340,398 303,088 37,310

General and administrative 202,554 176,895 25,659

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General and administrative expenses as a percentage of total revenue (1)

Property expenses (excluding reimbursable) as a percentage of total revenue (1)

(1) Excludes rental revenue (reimbursable).

Property expenses (excluding reimbursements) as a percentage of total revenue (1)

(1) Excludes client reimbursements.

Depreciation and Amortization

Depreciation and amortization increased by $500.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the Merger and the acquisitions of properties in 2023 and 2024, which were partially offset by property dispositions.

Real estate assets acquired in the Merger contributed an additional $413.4 million of depreciation and amortization for the year ended December 31, 2024.

Depreciation and amortization increased by $128.6 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to the acquisitions of properties in 2024 and 2025, which were partially offset by property dispositions.

Interest Expense

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Years ended December 31,

Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps

2025 2024 Change

Interest on our revolving credit facilities, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps

$ 1,114,048 $ 1,018,445 $ 95,603

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Gain on interest rate swaps (7,322) (7,180) (142)

Amortization of net mortgage premiums and discounts 30 (12,803)

Amortization of net note premiums and discounts (3,309) (60,657)

Amortization of net mortgage and note discounts (premiums) 7,069 (3,279) 10,348

Capital lease obligation 2,414 2,025 389

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Interest expense $ 1,134,879 $ 1,016,955 $ 117,924

Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bonds

Revolving credit facilities, commercial paper, term loans, mortgages and senior unsecured notes and bonds

Average outstanding balances $ 28,319,680 $ 25,508,037 $ 2,811,643

Weighted average interest rates 3.93 % 4.07 %

Interest expense increased by $286.6 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher average borrowings and weighted average interest rates.

Included in the overall increase, $67.4 million was from lower non-cash amortization of debt discounts and premiums, primarily due to the amortization of the discount recorded to reflect the fair value of senior notes exchanged in the Merger.

These increases were partially offset by higher capitalized interest driven by increased development activity.

See notes to the accompanying consolidated financial statements contained in this annual report for additional information regarding our indebtedness.

Property Expenses (excluding reimbursable)

Property expenses (excluding reimbursable) consist of costs associated with properties available for lease, non-net-leased properties and general portfolio expenses and include, but are not limited to, property taxes, maintenance, insurance, utilities, property inspections and legal fees.

Property expenses (excluding reimbursable) increased by $31.8 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to a higher number of properties available for lease compared with the same periods in 2023, in addition to acquisitions in 2023 and 2024 in which the lease terms do not obligate the tenant to pay certain expenses, which resulted in higher repairs and maintenance costs, property insurance and taxes.

Property Expenses (reimbursable)

Property expenses (reimbursable) consist of reimbursable property taxes and operating costs paid on behalf of our clients.

Property expenses (reimbursable) increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023 primarily due to an increase in portfolio size, resulting in higher common area maintenance, property taxes, and insurance expenses paid on behalf of our clients.

Interest expense increased by $117.9 million, or 11.6%, for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher average borrowings in 2025, as well as higher amortization of net note discounts (premiums) and deferred financing costs.

See notes to the accompanying consolidated financial statements for additional information regarding our indebtedness.

Property Expenses (excluding reimbursements)

Property expenses (excluding reimbursements) consist of costs associated with properties available for lease, non-net-leased properties and general portfolio expenses and include, but are not limited to, property taxes, maintenance, insurance, utilities, property inspections and legal fees.

Property expenses (excluding reimbursements) increased by $13.8 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to the volume of asset acquisitions during the period resulting in higher repairs and maintenance costs and property management expenses.

Property Expenses (reimbursements)

Property expenses (reimbursements) consist of property taxes and operating costs paid on behalf of our clients.

Property expenses (reimbursements) increased by $37.3 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher reimbursable property taxes and maintenance due to growth in our portfolio.

General and Administrative Expenses

General and administrative expenses increased by $32.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher employee costs of $19.6 million and higher professional fees of $7.9 million as we continue to invest in our people and our platform.

General and administrative expenses are expenditures related to the operations of our company, including employee-related costs, professional fees, and other general overhead costs associated with running our business.

General and administrative expenses increased by $25.7 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher employee costs and professional fees as we continue to invest in our people and our platform.

Provisions for Impairment

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

The following table summarizes our provisions for impairment during the periods indicated below (in thousands):

Years ended December 31,

2025 2024 Change

Provisions for impairment of real estate $ 434,497 $ 319,032 $ 115,465

Provision for credit losses 106.8 4.9

Provisions for credit losses 36,838 106,801 (69,963)

Provisions for impairment $ 471,335 $ 425,833 $ 45,502

Provisions for impairment increased by $338.7 million for the year ended December 31, 2024, as compared with the same period in 2023, as a result of increases of $236.8 million in impairment of real estate, primarily due to a higher number of properties impaired under the held for sale model, and $101.9 million in higher credit losses recognized on financing receivables for distressed clients accounted for under sales leaseback transactions.

Provisions for impairment of real estate increased by $115.5 million during the year ended December 31, 2025 as compared to the same period in 2024, primarily due to properties that were sold or are more likely than not to be sold in the next twelve months and properties leased to clients in bankruptcy or experiencing financial distress.

Provisions for credit losses decreased by $70.0 million during the year ended December 31, 2025 as compared to the same period in 2024, primarily due to lower credit losses recognized on financing receivables related to distressed clients accounted for under sales leaseback transactions.

Merger, Transaction, and Other Costs, Net

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, which largely consisted of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger, as well as $5.1 million related to the lease termination of a legacy corporate facility, and $4.5 million of organization costs incurred related to our private fund.

For the year ended December 31, 2023, we incurred $14.5 million of merger, transaction, and other costs, net, the majority of which was related to the Merger that closed in January 2024.

During the year ended December 31, 2025, we incurred $24.2 million of merger, transaction, and other costs, net consisting primarily of placement fees incurred in fundraising for the Fund.

During the year ended December 31, 2024, we incurred $96.3 million of merger, transaction, and other costs, net consisting primarily of transaction and integration-related costs related to Spirit, $5.1 million related to the lease termination of a legacy corporate facility, and $4.5 million related to the establishment of the Fund.

Gain on Sales of Real Estate

The following summarizes our property dispositions (dollars in millions):

The following summarizes our property dispositions (dollars in thousands):

Years ended December 31,

2025 2024 Change

Number of properties sold 425 294 131

1 unchanged sentence

Gain on sales of real estate $ 177,640 $ 117,275 $ 60,365

Foreign Currency and Derivative Gain (Loss), Net

Foreign Currency and Derivative (Loss) Gain, Net

We borrow in the functional currencies of the countries in which we invest.

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Derivative gain and loss are primarily related to mark-to-market adjustments on derivatives that do not qualify for hedge accounting and settlement of designated derivatives reclassified from Accumulated Other Comprehensive Income ("AOCI").

Foreign currency and derivative gain (loss), net was a $3.4 million gain for the year ended December 31, 2024 as compared $13.4 million loss with the same period in 2023, primarily due to the impact of foreign currency fluctuations on the remeasurement of intercompany debt.

Foreign currency and derivative (loss) gain, net was a $28.7 million loss for the year ended December 31, 2025, compared to a $3.4 million gain for the same period in 2024, primarily due to the impact of foreign currency fluctuations on our foreign-denominated assets and liabilities, as well as derivative instruments we executed to reduce the effect of these fluctuations.

Equity in Earnings of Unconsolidated Entities

Equity in earnings of unconsolidated entities was $7.8 million for the year ended December 31, 2024, compared to $2.5 million for the year ended December 31, 2023.

The increase in equity in earnings of unconsolidated entities is due to an increase in our joint venture investments.

Equity in earnings of unconsolidated entities increased by $5.5 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily attributable to an increase in earnings in our data center development joint venture, which commenced leasing in 2024.

Other Income, Net

Other income, net decreased by $0.2 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to lower gains on insurance proceeds, largely offset by higher interest on short-term investments.

Other income, net increased by $5.8 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily from higher interest earned on cash and cash equivalent balances, in addition to higher insurance proceed gains and miscellaneous other income.

Income taxes primarily consist of international income taxes accrued or paid by us and our subsidiaries, as well as state and local taxes.

The increase of $14.6 million in income taxes for the year ended December 31, 2024 as compared with the same period in 2023 is primarily attributable to higher taxable income in the U.K.

The increase of $18.7 million in income taxes for the year ended December 31, 2025 as compared to the same period in 2024 is primarily attributable to higher taxable income in the U.K.

and Europe and higher state franchise taxes.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests increased by $4.6 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily attributable to the launch of the Fund, with the first closing of third-party investments occurring at the beginning of the fourth quarter.

Preferred Stock Dividends

The increase in preferred stock dividends of $7.8 million for the year ended December 31, 2024 as compared with the same period in 2023 is due to the issuance of Realty Income Series A Preferred Stock in connection with the Merger.

The decrease in preferred stock dividends of $7.8 million for the year ended December 31, 2025 as compared to the same period in 2024 is due to the issuance of Realty Income Series A Preferred Stock during the year ended December 31, 2024 in connection with the Merger.

In September 2024, we redeemed all 6.9 million of Realty Income Series A Preferred Stock outstanding.

Excess of Redemption Value Over Carrying Value of Preferred Shares Redeemed

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Management must make significant assumptions in determining the fair value of assets acquired and liabilities assumed.

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

A majority of our acquisitions qualify as asset acquisitions and the transaction costs associated with those acquisitions are capitalized.

However, for transactions that qualify as business combinations, such as the Merger, we expense the transaction costs and categorize them as merger, transaction, and other costs, net in our consolidated statements of income and comprehensive income.

For business combinations, we recognize the amount of any purchase consideration that exceeds the fair value of all identified assets acquired and liabilities assumed as goodwill and may record measurement period adjustments within one year of the acquisition date as permitted under ASC 805, Business Combinations (for more details see note 2, Merger with Spirit Realty Capital, Inc.

to our consolidated financial statements contained in this annual report).

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

When acquiring a property for investment purposes, we allocate the cost of real estate acquired, inclusive of transaction costs, to:

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

For business combinations, all assets acquired and liabilities assumed are recorded at fair value.

The difference between the purchase consideration and the aggregated fair value is recognized as goodwill or a gain on bargain purchase.

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

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Our definition of “Adjusted EBITDA re ” is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gain and loss and merger, transaction, and other costs, net.

We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) provisions for impairment, (v) merger, transaction, and other costs, net, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities.

Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDA re differently than we do.

We define Adjusted EBITDA re , a non-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) provisions for impairment, (v) merger, transaction, and other costs, net, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities and consolidated entities with noncontrolling interests.

Our Adjusted EBITDA re may not be comparable to Adjusted EBITDA re reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDA re differently than we do.

Management believes Adjusted EBITDA re to be a meaningful measure of a REIT’s performance because it provides a view of our operating performance, analyzes our ability to meet interest payment obligations before the effects of income tax, depreciation and amortization expense, provisions for impairment, gain on sales of real estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-cash items that industry observers believe are less relevant to evaluating the operating performance of a company.

In addition, EBITDA re is widely followed by industry analysts, lenders, investors, rating agencies, and others as a means of evaluating the operational cash generating capacity of a company prior to servicing debt obligations.

Management also believes the use of an annualized quarterly Adjusted EBITDA re metric, which we refer to as Annualized Adjusted EBITDA re , is meaningful because it represents our current earnings run rate for the period presented.

In addition, EBITDA re is widely followed by industry analysts, lenders, investors, rating agencies, and others as a means of evaluating the operating performance of business activities prior to servicing debt obligations.

Management also believes the use of an Annualized Adjusted EBITDAre metric is meaningful because it represents our current earnings run rate for the period presented.

Annualized Adjusted EBITDA re and Annualized Pro Forma Adjusted EBITDA re , as defined below, are also used to determine the vesting of performance share awards granted to executive officers.

Annualized Adjusted EBITDA re should be considered along with, but not as an alternative to net income as a measure of our operating performance.

We define Annualized Pro Forma Adjusted EBITDA re as Annualized Adjusted EBITDA re , subject to certain adjustments to incorporate Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and to remove Adjusted EBITDA re from investments we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S.

GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period.

We define Annualized Pro Forma Adjusted EBITDA re as Annualized Adjusted EBITDA re , subject to certain adjustments to incorporate Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDA re from investments we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S.

GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter, and adjusted for our pro-rata share.

Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDA re on a pro forma basis in accordance with Article 11 of Regulation S-X.

The Annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes.

We believe Annualized Pro Forma Adjusted EBITDA re is a useful non-GAAP supplemental measure, as it excludes investments that were no longer owned at the balance sheet date and includes the annualized rent from investments acquired during the quarter.

Management also uses our ratios of Net Debt/Annualized Adjusted EBITDA re and Net Debt/Annualized Pro Forma Adjusted EBITDA re as measures of leverage in assessing our financial performance, which is calculated as net debt (which we define as total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by annualized quarterly Adjusted EBITDA re and annualized Pro Forma Adjusted EBITDA re , respectively.

Management also uses our ratios of Net Debt/Annualized Adjusted EBITDA re and Net Debt/Annualized Pro Forma Adjusted EBITDA re as measures of leverage in assessing our financial performance, which is calculated as net debt (which we define as total debt, excluding deferred financing costs and net discounts, less cash and cash equivalents, at our pro-rata share), divided by Annualized Adjusted EBITDA re and Annualized Pro Forma Adjusted EBITDA re , respectively.

The following is a reconciliation of net income (which we believe is the most comparable U.S.

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Gain on sales of real estate (67,430)

Foreign currency and derivative (gain) loss, net (535) 18,371

Foreign currency and derivative loss, net 18,902

Proportionate share of adjustments from unconsolidated entities 19,576

Quarterly Adjusted EBITDA re

$ 1,223,533 $ 984,309

Adjustments attributable to noncontrolling interests (12,236)

Adjusted EBITDA re

Annualized Adjusted EBITDA re (1)

$ 4,894,132 $ 3,937,236

Annualized Pro Forma Adjustments $ 51,811

Annualized Pro Forma Adjusted EBITDA re

$ 4,973,275 $ 4,012,155

Total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts $ 26,510,798 $ 21,480,869

Total debt per the consolidated balance sheets, excluding deferred financing costs and net discounts $ 29,116,111

Proportionate share of unconsolidated entities debt, excluding deferred financing costs 659,190

Cash and cash equivalents (444,962) (232,923)

$ 26,725,026 $ 21,907,136

Noncontrolling interests share of debt, excluding deferred financing costs (55,637)

Pro-Rata Share of cash and cash equivalents (2)

Net Debt/Annualized Adjusted EBITDA re

Net Debt/Annualized Pro Forma Adjusted EBITDA re

(1) We calculate Annualized Adjusted EBITDA re by multiplying the Quarterly Adjusted EBITDA re by four.

(2) Net Debt is total debt per our consolidated balance sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents.

Reconciliation of Consolidated Cash to Pro-Rata Share of Cash and Cash equivalents

Cash and cash equivalents per the consolidated balance sheet $ 434,842

proportionate share of unconsolidated entities cash 6,609

adjustments allocable to noncontrolling interests (22,049)

Total Pro-Rata Share of cash and cash equivalents

(1) We calculate Annualized Adjusted EBITDA re by multiplying the Adjusted EBITDA re for the applicable quarter by four.

(2) Reflects adjustments for our share based on our proportionate economic ownership of our joint ventures (which adds our pro-rata share of unconsolidated entities and deducts our noncontrolling interests share).

(3) Net Debt is total debt, excluding deferred financing costs and net discounts, less cash and cash equivalents, at our Pro-Rata Share.

As described above, the Annualized Pro Forma Adjustments, which include transaction accounting adjustments in accordance with U.S.

GAAP, consist of adjustments to incorporate the Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and remove Adjusted EBITDA re from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the period, consistent with the requirements of Article 11 of Regulation S-X.

The annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes.

The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDA re calculation for the periods indicated below (in thousands):

GAAP and adjusted for our pro-rata share, consist of adjustments to incorporate the Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDA re from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the periods, consistent with the requirements of Article 11 of Regulation S-X.

The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDA re calculation for the period indicated below (in thousands):

Three months ended

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Annualized Pro Forma Adjustments $ 51,811

FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("FFO") AND NORMALIZED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("Normalized FFO")

FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS AND NORMALIZED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS

We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts' definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairments of depreciable real estate assets, and reduced by gain on property sales.

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(1) All per share amounts are presented on a diluted per common share basis.

We consider FFO and Normalized FFO to be appropriate supplemental measures of a REIT’s operating performance as they are based on a net income analysis of property portfolio performance that adds back items such as depreciation and impairments for FFO, and adds back merger, transaction, and other costs, net, for Normalized FFO.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time.

Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative.

The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S.

GAAP measure) to FFO and Normalized FFO.

Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (dollars in thousands, except per share amounts):

Years ended December 31,

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Merger, transaction, and other costs, net (1)

24,214 96,292

Normalized FFO available to common stockholders $ 3,884,537 $ 3,563,951

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Distributions paid to common stockholders $ 2,920,895 $ 2,691,719

FFO available to common stockholders in excess of distributions paid to common stockholders $ 775,940 $ 710,345

Normalized FFO available to common stockholders in excess of distributions paid to common stockholders $ 872,232 $ 724,809

FFO after distributions $ 939,428 $ 775,940

Normalized FFO after distributions $ 963,642 $ 872,232

Weighted average number of common shares used for FFO and Normalized FFO:

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Diluted 911,015 865,842

Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative.

ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("AFFO")

(1) During the year ended December 31, 2025, we incurred $24.2 million of merger, transaction, and other costs, net, consisting primarily of placement fees incurred in fundraising for the Fund.

During the year ended December 31, 2024, we incurred $96.3 million of merger transaction and other costs, net, primarily related to transaction and integration related costs related to the Spirit merger.

ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS

We define AFFO, a non-GAAP measure, as FFO adjusted for unique revenue and expense items, which we believe are not as pertinent to the measurement of our ongoing operating performance.

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Our AFFO calculations may not be comparable to AFFO, CAD or FAD reported by other companies, and other companies may interpret or define such terms differently than we do.

We believe the non-GAAP financial measure AFFO provides useful information to investors because it is a widely accepted industry measure of the operating performance of real estate companies that is used by industry analysts and investors who look at and compare those companies.

In particular, AFFO provides an additional measure to compare the operating performance of different REITs without having to account for differing depreciation assumptions and other unique revenue and expense items which are not pertinent to measuring a particular company’s on-going operating performance.

Therefore, we believe that AFFO is an appropriate supplemental performance metric, and that the most appropriate U.S.

GAAP performance metric to which AFFO should be reconciled is net income available to common stockholders.

Presentation of the information regarding FFO, Normalized FFO, and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, Normalized FFO, and AFFO in the same way, so comparisons with other REITs may not be meaningful.

Furthermore, FFO, Normalized FFO, and AFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as alternatives to net income as an indication of our performance.

FFO, Normalized FFO, and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities.

In addition, FFO, Normalized FFO, and AFFO should not be considered as measures of liquidity, our ability to make cash distributions, or our ability to pay interest payments.

The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S.

1 unchanged sentence

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

These reclassifications had no impact on previously reported AFFO.

Years ended December 31,

3 unchanged sentences

Normalized FFO available to common stockholders 3,884,537 3,563,951

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

Amortization of share-based compensation 32,741 26,227

Amortization of net debt discounts (premiums) and deferred financing costs 15,361 (44,568)

Debt-related non-cash items:

Amortization of net debt discounts and deferred financing costs 36,705 15,361

Amortization of acquired interest rate swap value (2)

Non-cash change in allowance for credit losses (3)

11,048 13,935

Capital expenditures from operating properties:

Leasing costs and commissions (9,481) (8,558)

Recurring capital expenditures (335) (402)

Other non-cash items:

Non-cash change in allowance for credit losses 36,838 106,801

Amortization of share-based compensation 30,770 32,741

Straight-line rent and expenses, net (169,217) (171,887)

2 unchanged sentences

Proportionate share of adjustments for unconsolidated entities (2,991) (2,078)

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

Other adjustments (3)

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Distributions paid to common stockholders $ 2,920,895 $ 2,691,719

AFFO available to common stockholders in excess of distributions paid to common stockholders $ 929,718 $ 663,077

Weighted average number of common shares used for computation per share:

AFFO after distributions $ 965,003 $ 929,718

Weighted average number of common shares used for AFFO:

Basic 907,169 862,959

Diluted 911,015 865,842

(1) See reconciling items for Normalized FFO presented under “Funds from Operations Available to Common Stockholders ("FFO") and Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO")".

(1) See reconciling items for Normalized FFO presented under “Funds from Operations Available to Common Stockholders and Normalized Funds from Operations Available to Common Stockholders".

(2) Includes the amortization of the purchase price allocated to interest rate swaps acquired in the Merger.

(3) Credit losses primarily relate to the impairment of financing receivables.

(4) Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, straight-line payments from cross-currency swaps, obligations related to financing lease liabilities, adjustments allocable to noncontrolling interests, and gains and losses on the sale of loans receivable.

Therefore, we believe that AFFO is an appropriate supplemental performance metric, and that the most appropriate U.S.

GAAP performance metric to which AFFO should be reconciled is net income available to common stockholders.

so comparisons with other REITs may not be meaningful.

FFO, Normalized FFO, and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities.

In addition, FFO, Normalized FFO, and AFFO should not be considered as measures of liquidity, our ability to make cash distributions, or our ability to pay interest payments.

(3) Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, obligations related to financing lease liabilities, and adjustments allocable to noncontrolling interests.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis