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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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-

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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

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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.

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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.

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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

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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

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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.

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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

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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.

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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.

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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.

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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.

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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

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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

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	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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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 EBITDAre 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.

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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.

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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

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	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.

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