Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the documents incorporated by reference, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). When used in this quarterly report, the words “estimated,” “anticipated,” “expect,” “believe,” “intend,” “continue,” “should,” “may,” “likely,” “plans,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business and portfolio including management thereof; our platform; growth strategies, investment pipeline, and intentions to acquire or dispose of properties (including geographies, timing, partners, clients and terms); re-leases, re-development and speculative development of properties and expenditures related thereto; operations and results; the announcement of operating results, strategy, plans, and the intentions of management; our share repurchase program; settlement of shares of common stock sold pursuant to forward sale confirmations under our At-the-Market (“ATM”) program; dividends, including the amount, timing and payments of dividends; and macroeconomic and other business trends, including interest rates and trends in the market for long-term leases of freestanding, single-client properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships and other arrangements.

Additional factors that may cause risks and uncertainties include those risks described in "Item 1A, Risk Factors" in Part II of this Quarterly Report on Form 10-Q, for the quarter ended June 30, 2025.

Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date this quarterly report was filed with the Securities and Exchange Commission (the "SEC"). Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and operating results may differ materially from what is expressed or forecasted in this quarterly report and forecasts made in the forward-looking statements discussed in this quarterly report might not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

OVERVIEW

Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies*®*. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of June 30, 2025, we have a portfolio of over 15,600 properties in all 50 states of the United States ("U.S."), the United Kingdom ("U.K."), and seven other countries in Europe. We are known as “The Monthly Dividend Company®” and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 661 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for over 30 consecutive years.

As of June 30, 2025, we owned or held interests in 15,606 properties, with approximately 346.3 million square feet of leasable space leased to 1,630 clients doing business in 91 separate industries. Of the 15,606 properties in our portfolio as of June 30, 2025, 15,284, or 97.9%, were single-client properties, and the remaining were multi–client properties. Our total portfolio of 15,606 properties as of June 30, 2025 had a weighted average remaining lease

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term (excluding rights to extend a lease at the option of the client) of approximately 9.0 years. Total portfolio annualized base rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables) on our leases as of June 30, 2025 was $5.17 billion.

As of June 30, 2025, approximately 33.9% of our total portfolio annualized base rent comes from properties leased to our investment grade clients, their subsidiaries or affiliated companies. As of June 30, 2025, our top 20 clients (based on percentage of total portfolio annualized base rent) represented approximately 36.4% of our annualized base rent and 11 of these clients have investment grade credit ratings or are subsidiaries or affiliates of investment grade companies. Approximately 91% of our annualized retail base rent as of June 30, 2025, is derived from our clients with a service, non-discretionary, and/or low price point component to their business.

Unless otherwise specified, references to rental revenue in the Management's Discussion and Analysis of Financial Condition and Results of Operations are exclusive of reimbursements from clients for recoverable real estate taxes and operating expenses totaling $87.4 million and $80.6 million for the three months ended June 30, 2025 and 2024, respectively, and $174.8 million and $153.3 million for the six months ended June 30, 2025 and 2024, respectively.

RECENT DEVELOPMENTS

Increases in Monthly Dividends to Common Stockholders

We have continued our 56-year history of paying monthly dividends by increasing the dividend four times during 2025. As of July 2025, we have paid 111 consecutive quarterly dividend increases and increased the dividend 131 times since our listing on the New York Stock Exchange (“NYSE”) in 1994.


2025 Dividend increases	Month Declared	Month Paid	Monthly Dividend per share		Increase per share
1st increase	Dec 2024	Jan 2025	$	0.2640	$	0.0005
2nd increase	Feb 2025	Mar 2025	$	0.2680	$	0.0040
3rd increase	Mar 2025	Apr 2025	$	0.2685	$	0.0005
4th increase	Jun 2025	Jul 2025	$	0.2690	$	0.0005

The dividends paid per share during the six months ended June 30, 2025 totaled $1.6015, as compared to $1.5460 during the six months ended June 30, 2024, an increase of $0.055, or 3.6%.

The monthly dividend of $0.2690 per share represents a current annualized dividend of $3.228 per share, and an annualized dividend yield of 5.6% based on the last reported sale price of our common stock on the NYSE of $57.61 on June 30, 2025. Although we expect to continue our policy of paying monthly dividends, we cannot guarantee that we will maintain our current level of dividends, that we will continue our pattern of increasing dividends per share, or what our actual dividend yield will be in any future period.

Investments

During the three months ended June 30, 2025, we invested $1.2 billion at an initial weighted average cash yield of 7.2%, including investments in 102 properties, properties under development or expansion, and loans.

During the six months ended June 30, 2025, we invested $2.5 billion at an initial weighted average cash yield of 7.3%, including investments in 176 properties, properties under development or expansion, and loans.

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

Dispositions

During the three months ended June 30, 2025, we sold 73 properties with total net proceeds received of $116.8 million.

During the six months ended June 30, 2025, we sold 128 properties with total net proceeds received of $209.4 million.

Equity Capital Raising

During the three months ended June 30, 2025, we raised $631.6 million of proceeds from the sale of common stock, at a weighted average price of $56.39 per share, primarily through proceeds from the sale of common stock

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through our ATM program. The ATM program issuances during the three months ended June 30, 2025 included 11.2 million shares issued pursuant to forward sale confirmations. As of June 30, 2025, 7.6 million shares of common stock subject to forward sale confirmations have been executed but not settled. See note 15, Stockholders' Equity, to the consolidated financial statements for further details.

Credit Facilities

In April 2025, we closed on the recast and expansion of our multi-currency unsecured credit facilities totaling $5.38 billion, including a $1.38 billion unsecured facility for our private fund. See note 7, Credit Facilities and Commercial Paper Programs, to the consolidated financial statements for further details.

Note Issuances

In June 2025, we issued €650.0 of 3.375% senior unsecured notes due June 2031 (the “2031 notes”), and €650.0 of 3.875% senior unsecured notes due June 2035 (the “2035 notes”).

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

See note 10, Notes Payable, to the consolidated financial statements for further details.

Portfolio Discussion

Leasing Results

At June 30, 2025, we had 212 properties available for lease or sale out of 15,606 properties in our portfolio, which represents a 98.6% occupancy rate based on the number of properties in our portfolio. Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and include properties owned by unconsolidated joint ventures. Below is a summary of our portfolio activity for the periods indicated below:


Three months ended June 30, 2025
Properties available for lease at March 31, 2025			231
Lease expirations (1)			355
Re-leases to same client			(293)
Re-leases to new client			(17)

Vacant dispositions			(64)
Properties available for lease at June 30, 2025			212

Six months ended June 30, 2025
Properties available for lease at December 31, 2024			205
Lease expirations (1)			599
Re-leases to same client			(453)
Re-leases to new client			(26)

Vacant dispositions			(113)
Properties available for lease at June 30, 2025			212

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

During the three months ended June 30, 2025, the new annualized base rent on re-leased units was $96.8 million, as compared to the previous annual rent of $93.6 million on the same units, representing a rent recapture rate of 103.4% on the re-leased units.

During the six months ended June 30, 2025, the new annualized base rent on re-leased units was $143.1 million, as compared to the previous annual rent of $138.1 million on the same units, representing a rent recapture rate of 103.6% on the re-leased units.

As part of our re-leasing costs, we pay leasing commissions to unrelated, third-party real estate brokers consistent with the commercial real estate industry standard, and sometimes provide rent concessions to our clients. We do not consider the collective impact of the leasing commissions or rent concessions to our clients to be material to our financial position or results of operations.

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Impact of Inflation

Leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, retail price index in the case of certain leases in the U.K. (typically subject to ceilings), or increases in clients’ sales volumes. We expect that inflation will cause these lease provisions to result in rent increases over time. During times when inflation is greater than increases in rent, as provided for in the leases, rent increases may not keep up with the rate of inflation and other costs.

Moreover, our strategic focus on the use of net lease agreements reduces our exposure to rising property expenses due to inflation because the client is responsible for property expenses. Even though the utilization of net leases reduces our exposure to rising property expenses due to inflation, substantial inflationary pressures and increased costs may have an adverse impact on our clients if increases in their operating expenses exceed increases in revenue, which may adversely affect our clients' ability to pay rent. Additionally, inflationary periods may cause us to experience increased costs of financing, make it difficult to refinance debt at attractive rates or at all, and may adversely affect the properties we can acquire if the cost of financing an acquisition is in excess of our anticipated earnings from such property, thereby limiting the properties that can be acquired.

Impact of Real Estate and Capital Markets

In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain periods, the global capital markets have experienced significant price volatility, dislocations, and liquidity disruptions, which may impact our access to and cost of capital. We continually monitor the commercial real estate and global capital markets carefully and, if required, will make decisions to adjust our business strategy accordingly.

Impact of Current Macroeconomic Conditions

We monitor developments related to macroeconomic factors that could have an adverse impact on our business and our clients. Our clients face challenges that may differ from or be additional to challenges we face, including potential changes in consumer confidence levels, behavior and spending and increased operational expenses, including potential impacts from changes in global trade policies. The extent of the future effects on our business, results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future developments, none of which can be predicted.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2025, we had $5.1 billion of liquidity, which consists of cash and cash equivalents of $800.4 million, unsettled ATM forward equity of $422.8 million, and $3.9 billion of availability under our $5.38 billion revolving credit facilities, net of $1.4 billion of borrowing on the revolving credit facilities and after deducting $98.6 million in borrowings under our commercial paper programs. We use our unsecured revolving credit facilities as a liquidity backstop for the repayment of the notes issued under our commercial paper programs.

Our primary cash obligations, for the current year and subsequent years, are included in the “Material Cash Requirements” table, which is presented later in this section. We expect to fund our operating expenses and other short-term liquidity requirements, including property acquisitions and development costs, payment of principal and interest on our outstanding indebtedness, property improvements, re-leasing costs, and cash distributions to common stockholders, primarily through a combination of the following:

Cash and cash equivalents;
Future cash flows from operations;
Issuances of common stock or debt, or other securities offerings;
Additional borrowings under our revolving credit facilities or commercial paper programs, which are backstopped by our credit facilities;
Short-term loans;
Asset dispositions; and
Credit investment repayments.

In addition to these sources of liquidity, we are currently in discussions to raise third-party capital for an open-end fund or other vehicles. If successful, these efforts would provide further capital to develop and acquire properties. We may also make investments in other entities at our discretion in the future.

We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing capacity are sufficient to meet our liquidity needs for the next twelve months. We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our revolving credit facilities and commercial paper programs.

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Long-Term Liquidity Requirements

Our goal is to deliver dependable monthly dividends to our stockholders that increase over time. Historically, we have met our principal short-term and long-term capital needs, including the funding of high-quality real estate acquisitions, investments in loans to clients, property development, and capital expenditures by issuing common stock, long-term unsecured notes, and term loan borrowings. Over the long term, we believe that common stock should be the majority of our capital structure. We may issue common stock when we believe our share price is at a level that allows for the proceeds of an offering to be accretively invested into additional properties or to permanently finance properties that were initially financed by our revolving credit facilities, commercial paper programs, or shorter-term debt securities. However, we cannot assure you that we will have access to the capital markets at all times and at terms that are acceptable to us.

Capitalization

As of June 30, 2025, our total capitalization was $82.2 billion. Total capitalization consisted of $52.8 billion of common equity (based on the June 30, 2025 closing price on the NYSE of $57.61 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $29.3 billion on our revolving credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds and our proportionate share of unconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums).

Share Repurchase Program

In February 2025, our Board of Directors authorized a share repurchase program for up to $2.0 billion in shares of our common stock, which will expire in January 2028. Repurchases under the repurchase program may be made at management’s discretion from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions, Rule 10b5-1 plans or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. The repurchase program does not obligate us to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. No share repurchases have been made to date under the repurchase program.

ATM Program

During the six months ended June 30, 2025, we settled approximately 22.4 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $1.2 billion of net proceeds. As of June 30, 2025, there were approximately 7.6 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, representing approximately $422.8 million in expected net proceeds, which have been executed at a weighted average price of $55.92 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates). Additionally, as of June 30, 2025, we had 27.3 million shares remaining for future issuance under our ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.

Debt Financing Activities

At June 30, 2025, our total outstanding borrowings of revolving credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $28.7 billion, with a weighted average maturity of 5.8 years and a weighted average interest rate of 3.9%. As of June 30, 2025, approximately 95% of our total debt was fixed rate debt. See notes 7 through 10 to the consolidated financial statements for additional information about our outstanding debt, along with our debt financing activities during the six months ended June 30, 2025 below.

Term Loan Redemption

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

Mortgage Repayments

During the six months ended June 30, 2025, we made $43.8 million in principal payments, including the full repayment of three mortgages for $42.9 million.

Note Issuances

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

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

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Note Repayment

In April 2025, we repaid $500.0 million of outstanding 3.875% senior unsecured notes, plus accrued and unpaid interest, upon maturity.

Credit Facilities

In April 2025, we entered into new $4.0 billion unsecured multicurrency revolving credit facilities, to amend and restate our previous $4.25 billion unsecured revolving credit facility. Our new revolving credit facilities consist of (a) a $2.0 billion unsecured multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2027 and (b) a $2.0 billion unsecured multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2029 (collectively, the “RI Credit Facilities”). The RI Credit Facilities also include two six-month extensions for each facility, which can be exercised at our option.

In connection with the closing of the RI Credit Facilities, our U.S. Core Plus Fund (the "Fund") entered into a newly-established $1.38 billion unsecured credit facility, for which we are a guarantor, which provides for (a) an up to $1.0 billion unsecured revolving credit facility and (b) an up to $380.0 million unsecured delayed draw term loan which is available to be drawn for twelve months after April 29, 2025 (the "Closing Date") (collectively, the “Fund Facilities”). The revolving credit facility under the Fund Facilities matures in April 2029 and the delayed draw term loan under the Fund Facilities matures in April 2028. The Fund Facilities also include two six-month extensions for each facility, which can be exercised at our option. The aggregate amount under the Fund Facilities can be increased to up to $2.0 billion pursuant to an accordion expansion feature, which is subject to obtaining lender commitments.

Covenants

The following is a summary of the key financial covenants for our senior unsecured notes, as defined and calculated per the terms of our senior notes and bonds. These calculations, which are not based on accounting principles generally accepted in the United States of America ("U.S. GAAP"), are presented to investors to show our ability to incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance with such covenants and are not measures of our liquidity or performance. The actual amounts as of June 30, 2025, are:


Note Covenants	Required	Actual
Limitation on incurrence of total debt	< 60% of adjusted assets	42.0	%
Limitation on incurrence of secured debt	< 40% of adjusted assets	0.2	%
Debt service and fixed charge coverage (trailing 12 months) (1)	> 1.5x	4.5x
Maintenance of total unencumbered assets	> 150% of unsecured debt	238.7	%

(1) Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that: (i) the incurrence of any Debt (as defined in the covenants) incurred by us since the first day of such four-quarter period and the application of the proceeds therefrom (including to refinance other Debt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our Debt since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four quarters and subject to certain additional adjustments. Such pro forma ratio has been prepared on the basis required by that debt service covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred as of the first day of four-quarter period, nor does it purport to reflect our debt service coverage ratio for any future period. Fixed charge coverage is calculated in the same manner as the debt service coverage. The following is our calculation of debt service and fixed charge coverage at June 30, 2025 (in thousands, for trailing twelve months):


Net income attributable to the Company	$	915,832
Plus: interest expense, excluding the amortization of deferred financing costs	1,057,057
Plus: provision for taxes	75,178
Plus: depreciation and amortization	2,465,794
Plus: provisions for impairment	499,839
Plus: pro forma adjustments	190,072
Less: gain on sales of real estate	(136,651)
Income available for debt service, as defined	$	5,067,121
Total pro forma debt service charge	$	1,122,854
Debt service and fixed charge coverage ratio	4.5x

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Credit Agency Ratings

The borrowing interest rates under our revolving credit facilities are based upon our ratings assigned by credit rating agencies. As of June 30, 2025, we were assigned the following investment grade corporate credit ratings on our senior unsecured notes and bonds: Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook. In addition, we were assigned the following ratings on our commercial paper at June 30, 2025: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.

Based on our credit rating agency ratings as of June 30, 2025, interest rates under our credit facilities provide for USD borrowings at Secured Overnight Financing Rate (“SOFR”), plus 0.725% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.850% over SOFR, for British Pound Sterling (“GBP”) borrowings, at Sterling Overnight Indexed Average (“SONIA”), plus 0.725% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.850% over SONIA, and for 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 0.850% over one-month EURIBOR.

Borrowings under the Fund Facilities bear interest at SOFR plus 0.725% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.850% over SOFR. A commitment fee of 0.20% is payable on undrawn delayed draw term loan commitments beginning 91 days after the Closing Date.

In addition, our credit facilities provide that the interest rates can range between: (i) SOFR/SONIA/EURIBOR, plus 1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) SOFR/SONIA/EURIBOR, plus 0.70% if our credit rating is A/A2 or higher. In addition, our credit facilities provide for a facility commitment fee based on our credit ratings, which ranges from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.

We also issue senior debt securities from time to time and our credit ratings can impact the interest rates charged in those transactions. If our credit ratings or ratings outlook change, our cost to obtain debt financing could increase or decrease. The credit ratings assigned to us could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that our ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. Moreover, a rating is not a recommendation to buy, sell or hold our debt securities or common stock.

Material Cash Requirements

The following table summarizes the maturity of each of our obligations as of June 30, 2025 (in millions):


	2025		2026		2027		2028		2029		Thereafter		Total
RI Credit Facilities (1)	$	—	$	—	$	1,271.3	$	—	$	102.2	$	—	$	1,373.5

Commercial Paper (2)	98.6		—		—		—		—		—		98.6
Unsecured Term Loans	300.0		1,156.7		500.0		—		—		—		1,956.7
Mortgages Payable	0.8		12.0		22.3		1.3		1.3		1.0		38.7
Senior Unsecured Notes and Bonds	550.0		2,375.0		2,391.3		2,499.8		2,429.3		14,952.6		25,198.0
Interest (3)	622.1		994.2		867.7		744.6		700.1		3,431.3		7,360.0
Ground Leases Paid by the Company (4)	7.0		17.9		11.3		9.1		10.2		411.7		467.2
Ground Leases Paid by Our Clients (5)	16.1		32.6		30.7		27.7		25.3		337.3		469.7
Other (6)	304.6		271.5		71.4		9.3		2.7		15.1		674.6
Total	$	1,899.2	$	4,859.9	$	5,166.0	$	3,291.8	$	3,271.1	$	19,149.0	$	37,637.0

(1) The initial terms of the RI Credit Facilities expire in April 2027 and April 2029 and include, at our option, two six-month extensions. The initial term of the revolving credit facility under the Fund Facilities expires in April 2029 and includes, at our option, two six-month extensions. At June 30, 2025, there were $1.4 billion of outstanding borrowings under our RI Credit Facilities.

(2) At June 30, 2025, commercial paper programs outstanding were $98.6 million, maturing in July 2025.

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

(4) We currently pay the ground lessors directly for the rent under certain ground lease arrangements.

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

(6) “Other” consists of $580.9 million of commitments under construction contracts, $89.7 million for tenant improvements, recurring capital expenditures, and non-recurring building improvements, and $4.0 million for contingent purchase consideration obligations related to leasing activities from a multi-tenant property acquired.

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Investments in Unconsolidated Entities

As of June 30, 2025, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million.

DIVIDEND POLICY

Distributions are paid monthly to holders of shares of our common stock.

Distributions are paid monthly to the limited partners holding common units of Realty Income, L.P., each on a per unit basis that is equal to the amount paid per share to our common stockholders (subject to the adjustment factor applicable to those units at the time of such distribution).

In order to maintain our status as a real estate investment trust ("REIT") for federal income tax purposes, we generally are required to distribute dividends to our stockholders aggregating annually at least 90% of our taxable income (excluding net capital gains), and we are subject to income tax to the extent we distribute less than 100% of our taxable income (including net capital gains). In 2024, our cash distributions to common stockholders totaled $2.69 billion, or approximately 126.1% of our estimated taxable income of $2.13 billion. Certain measures are available to us to reduce or eliminate our tax exposure as a REIT, and accordingly, no provision for U.S. federal income taxes, other than our taxable REIT subsidiaries (each, a "TRS"), has been made. Our estimated taxable income reflects non-cash deductions for depreciation and amortization. Our estimated taxable income is presented to show our compliance with REIT dividend requirements and is not a measure of our liquidity or operating performance. We intend to continue to make distributions to our stockholders that are sufficient to meet this dividend requirement and that will reduce or eliminate our exposure to income taxes. Furthermore, we believe our cash on hand and funds from operations are sufficient to support our current level of cash distributions to our stockholders. We distributed $1.602 per share to stockholders during the six months ended June 30, 2025, representing 75.9% of our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $2.11.

Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, Funds from Operations Available to Common Stockholders ("FFO"), Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO"), AFFO, cash flow from operations, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, our debt service requirements, and any other factors the Board of Directors may deem relevant. In addition, our revolving credit facilities contain financial covenants that could limit the amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or interest on borrowings under our revolving credit facilities.

Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax. The maximum tax rate of non-corporate taxpayers for “qualified dividend income” is generally 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends are attributable to dividends received from certain taxable corporations (such as our TRSs) or to income that was subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year). However, non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017.

Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the stockholders’ basis in their stock, but not below zero. Distributions in excess of that basis generally will be taxable as a capital gain to stockholders. Approximately 30.4% of the distributions to our common stockholders, made or deemed to have been made in 2024, were classified as a return of capital for federal income tax purposes.

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RESULTS OF OPERATIONS

The following is a comparison of our results of operations for the three and six months ended June 30, 2025 and 2024.

Total Revenue

The following summarizes our total revenue (in thousands):


	Three months ended June 30,						Six months ended June 30,
	2025		2024		Change		2025		2024		Change
Rental (excluding reimbursements)	$	1,250,764	$	1,204,160	$	46,604	$	2,476,443	$	2,339,615	$	136,828
Rental (reimbursements)	87,424		80,568		6,856		174,802		153,282		21,520
Other	72,190		54,715		17,475		139,638		107,031		32,607
Total revenue	$	1,410,378	$	1,339,443	$	70,935	$	2,790,883	$	2,599,928	$	190,955

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Rental Revenue (excluding reimbursements)

The table below summarizes the increase in rental revenue (excluding reimbursements) in the three and six months ended June 30, 2025 and 2024 (dollars in thousands):


	Three months ended June 30,
	Number of Properties	2025		2024		Change
Properties acquired during 2025 & 2024	545	$	75,776	$	11,305	$	64,471
Same store rental revenue (1)	14,622	1,166,683		1,154,028		12,655
Constant currency adjustment (2)	N/A	(6,231)		(13,860)		7,629
Properties sold during and prior to 2025	430	84		14,808		(14,724)
Straight-line rent and other non-cash adjustments	N/A	(6,251)		4,640		(10,891)
Vacant rents, development and other (3)	439	29,805		32,414		(2,609)
Other excluded revenue (4)	N/A	8,956		15,867		(6,911)

Revenue from unconsolidated entities (6)	N/A	(19,875)		(16,838)		(3,037)
Revenue attributable to noncontrolling interests (7)	N/A	1,817		1,796		21
Total		$	1,250,764	$	1,204,160	$	46,604

	Six months ended June 30,
	Number of Properties	2025		2024		Change
Properties acquired during 2025 & 2024	545	$	132,370	$	13,969	$	118,401
Same store rental revenue (1)	14,622	2,333,674		2,305,213		28,461
Constant currency adjustment (2)	N/A	(31,599)		(26,113)		(5,486)
Properties sold during and prior to 2025	436	1,321		29,843		(28,522)
Straight-line rent and other non-cash adjustments	N/A	(943)		10,492		(11,435)
Vacant rents, development and other (3)	439	68,241		64,939		3,302
Other excluded revenue (4)	N/A	9,990		16,060		(6,070)
Less: Spirit rental revenue (5)	N/A	—		(47,047)		47,047
Revenue from unconsolidated entities (6)	N/A	(40,243)		(31,324)		(8,919)
Revenue attributable to noncontrolling interests (7)	N/A	3,632		3,583		49
Total		$	2,476,443	$	2,339,615	$	136,828

(1)The same store rental revenue percentage increased by 1.1% and 1.2% for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively.

(2)For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of June 30, 2025.

(3)Relates to the aggregate of (i) rental revenue from 319 properties that were available for lease during part of 2025 or 2024 for the three and six months ended June 30, 2025, respectively and (ii) rental revenue for 120 properties under development or completed developments that do not meet our same store pool definition for the three and six months ended June 30, 2025, respectively.

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

(5)Amounts for the six months ended June 30, 2024 represent rental revenue from Spirit properties, which were not included in our financial statements prior to the close of the merger with Spirit on January 23, 2024.

(6)Represents our pro-rata share of rental revenue from properties owned by unconsolidated joint ventures.

(7)Represents the portion of rental revenue attributable to noncontrolling interest based on their pro-rata ownership.

For purposes of determining the same store rent property pool, we include all properties that were owned for the entire year-to-date period, for both the current and prior year, except for properties during the current or prior year that; (i) were vacant at any time, (ii) were under development or redevelopment, or (iii) were involved in eminent domain and rent was reduced. Each of the exclusions from the same store pool are separately addressed within the applicable sentences above, explaining the changes in rental revenue for the period.

Of the 16,952 in-place leases in the portfolio, 13,825, or 81.6%, were under leases that provide for increases in rents through: base rent increases tied to inflation (typically subject to ceilings), percentage rent based on a percentage of the clients’ gross sales, fixed increases, or a combination of two or more of the aforementioned rent provisions.

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Rent based on a percentage of our clients' gross sales, or percentage rent, was $2.8 million and $2.4 million for the three months ended June 30, 2025 and 2024, respectively. Rent based on a percentage of our clients' gross sales, or percentage rent, was $8.6 million and $7.7 million for the six months ended June 30, 2025 and 2024, respectively. Percentage rent represents less than 1% of rental revenue.

At June 30, 2025, our portfolio of 15,606 properties was 98.6% leased with 212 properties available for lease or sale, as compared to 98.8% leased with 185 properties available for lease at June 30, 2024. It has been our experience that approximately 1% to 4% of our property portfolio will be available for lease at any given time; however, it is possible that the number of properties available for lease or sale could increase in the future, given the nature of economic cycles and other unforeseen global events.

Rental Revenue (reimbursements)

A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses. Contractually obligated reimbursements by our clients increased by $6.9 million and $21.5 million for the three and six months ended June 30, 2025 as compared to the same period in 2024, primarily due to higher reimbursable property taxes and maintenance due to growth in our portfolio.

Other Revenue

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


	Three months ended June 30,						Six months ended June 30,
	2025		2024		Change		2025		2024		Change
Interest income on financing receivables	$	32,055	$	29,910	$	2,145	$	64,343	$	61,373	$	2,970
Interest income on loans and preferred equity investments	39,232		24,020		15,212		73,629		44,100		29,529
Other	903		785		118		1,666		1,558		108
	$	72,190	$	54,715	$	17,475	$	139,638	$	107,031	$	32,607

Total other revenue increased by $17.5 million and $32.6 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to higher interest income on loans due to growth in our loan portfolio.

Expenses

The following summarizes our total expenses (in thousands):


	Three months ended June 30,								Six months ended June 30,
	2025			2024			Change		2025			2024			Change
Depreciation and amortization	$	647,849		$	605,570		$	42,279	$	1,256,784		$	1,186,634		$	70,150
Interest	283,824			246,931			36,893		552,198			487,545			64,653
Property (excluding reimbursements)	19,998			19,283			715		39,301			35,930			3,371
Property (reimbursements)	87,424			80,568			6,856		174,802			153,282			21,520
General and administrative	49,329			45,070			4,259		93,373			85,912			7,461
Provisions for impairment	143,363			96,458			46,905		259,952			185,947			74,005
Merger, transaction, and other costs, net	331			2,754			(2,423)		610			96,858			(96,248)
Total expenses	$	1,232,118		$	1,096,634		$	135,484	$	2,377,020		$	2,232,108		$	144,912
Total revenue (1)	$	1,322,954		$	1,258,875				$	2,616,081		$	2,446,646
General and administrative expenses as a percentage of total revenue (1)	3.7		%	3.6		%			3.6		%	3.5		%
Property expenses (excluding reimbursements) as a percentage of total revenue (1)	1.5		%	1.5		%			1.5		%	1.5		%

(1) Excludes client reimbursements.

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Depreciation and Amortization

Depreciation and amortization increased by $42.3 million and $70.2 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to the acquisitions of properties in 2024 and 2025, which were partially offset by property dispositions.

Interest Expense

The following is a summary of the components of our interest expense (in thousands):


	Three months ended June 30,								Six months ended June 30,
	2025			2024			Change		2025			2024			Change
Interest on our revolving credit facilities, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps	$	279,407		$	250,129		$	29,278	$	546,018		$	493,233		$	52,785
Revolving credit facility commitment fees	1,508			1,343			165		2,836			2,686			150
Amortization of debt origination and deferred financing costs	7,162			5,874			1,288		13,082			11,693			1,389
Gain on interest rate swaps	(1,873)			(1,799)			(74)		(3,778)			(3,600)			(178)
Amortization of net mortgage premiums and discounts	72			54			18		137			(69)			206
Amortization of net note premiums and discounts	909			26			883		1,561			(4,125)			5,686
Capital lease obligation	533			533			—		1,057			964			93
Interest capitalized	(3,894)			(9,229)			5,335		(8,715)			(13,237)			4,522
Interest expense	$	283,824		$	246,931		$	36,893	$	552,198		$	487,545		$	64,653
Revolving credit facilities, commercial paper, term loans, mortgages and senior unsecured notes and bonds
Average outstanding balances	$	28,813,067		$	25,445,195		$	3,367,872	$	28,264,598		$	25,048,044		$	3,216,554
Weighted average interest rates	3.88		%	4.02		%			3.87		%	4.03		%

Interest expense increased by $36.9 million, or 14.9%, and $64.7 million, or 13.3%, for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to higher average borrowings and increased amortization of note premiums and discounts, partially offset by lower weighted average interest rates. See notes to the accompanying consolidated financial statements for additional information regarding our indebtedness.

Property Expenses (excluding reimbursements)

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

Property expenses (excluding reimbursements) increased by $0.7 million and $3.4 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to an increase in properties available for lease compared to the same periods in 2024.

Property Expenses (reimbursements)

Property expenses (reimbursements) consist of property taxes and operating costs paid on behalf of our clients. Property expenses (reimbursements) increased by $6.9 million and $21.5 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to an increase in portfolio size, resulting in higher maintenance, property taxes, and insurance expenses paid on behalf of our clients.

General and Administrative Expenses

General and administrative expenses increased by $4.3 million and $7.5 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to higher employee costs and professional fees as we continue to invest in our people and our platform.

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Provisions for Impairment

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


	Three months ended June 30,						Six months ended June 30,
	2025		2024		Change		2025		2024		Change
Provisions for impairment of real estate	$	142,254	$	87,204	$	55,050	$	239,672	$	175,401	$	64,271
Provisions for credit losses	1,109		9,254		(9,437)		20,280		10,546		9,734
Provisions for impairment	$	143,363	$	96,458	$	46,905	$	259,952	$	185,947	$	74,005

Provisions for impairment increased by $46.9 million and $74.0 million for the three and six months ended June 30, 2025, as compared to the same periods in 2024, respectively. The increase was primarily driven by higher real estate impairment charges related to properties leased to clients in bankruptcy or experiencing financial distress as well as properties that were sold or are more likely than not to be sold in the next twelve months.

Merger, Transaction, and Other Costs, Net

Merger, transaction, and other costs, net decreased by $2.4 million and $96.2 million for the three and six months ended June 30, 2025, as compared to the same periods in 2024, respectively, primarily due to completion of the Merger in January 2024.

Gain on Sales of Real Estate

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


	Three months ended June 30,						Six months ended June 30,
	2025		2024		Change		2025		2024		Change
Number of properties sold	73		76		(3)		128		122		6
Net sales proceeds	$	116,841	$	106,280	$	10,561	$	209,414	$	201,904	$	7,510
Gain on sales of real estate	$	38,566	$	25,153	$	13,413	$	61,103	$	41,727	$	19,376

Foreign Currency and Derivative (Loss) Gain, net

We borrow in the functional currencies of the countries in which we invest. Net foreign currency gain and loss are primarily related to the remeasurement of intercompany debt from foreign subsidiaries and outstanding borrowings denominated in the local currencies we invest in. Derivative gain and loss are primarily related to mark-to-market adjustments on derivatives that do not qualify for hedge accounting and settlement of designated derivatives reclassified from Accumulated Other Comprehensive Income ("AOCI").

Foreign currency and derivative (loss) gain, net was a loss of $4.4 million and $6.9 million for the three and six months ended June 30, 2025, compared to a gain of $0.5 million and $4.6 million for the same periods in 2024, respectively, primarily due to the impact of foreign currency fluctuations, largely offset by derivative hedges.

Equity in Earnings of Unconsolidated Entities

Equity in earnings of unconsolidated entities was $3.3 million and $7.6 million for the three and six months ended June 30, 2025 as compared to $2.0 million and $0.4 million for the same periods in 2024, respectively, primarily attributable to an increase in earnings in our data center development joint venture, which commenced leasing in 2024.

Other Income, Net

Other income, net increased by $1.3 million and $3.0 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, primarily due to higher bank interest income and miscellaneous revenue.

Income TaxesIncome taxes primarily consist of international income taxes accrued or paid by us and our subsidiaries, as well as state and local taxes. The increase of $8.4 million and $8.6 million in income taxes for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, is primarily attributable to higher taxable income in the U.K. and Europe and higher state franchise taxes.

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Preferred Stock Dividends

The decrease in preferred stock dividends of $2.6 million and $5.2 million for the three and six months ended June 30, 2025 as compared to the same periods in 2024, respectively, is due to the issuance of Realty Income Series A Preferred Stock during the six months ended June 30, 2024 in connection with the Merger. In September 2024, we redeemed all 6.9 million shares of Realty Income Series A Preferred Stock outstanding.

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NON-GAAP FINANCIAL MEASURES

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("Adjusted EBITDAre")

Nareit established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent measure to help make investment decisions among REITs. Our definition of “Adjusted EBITDAre” is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gain and loss and merger, transaction, and other costs, net. We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) provisions for impairment, (v) merger, transaction, and other costs, net, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities. Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT’s performance because it provides a view of our operating performance, analyzes our ability to meet interest payment obligations before the effects of income tax, depreciation and amortization expense, provisions for impairment, gain on sales of real estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-cash items that industry observers believe are less relevant to evaluating the operating performance of a company. In addition, EBITDAre is widely followed by industry analysts, lenders, investors, rating agencies, and others as a means of evaluating the operational cash generating capacity of a company prior to servicing debt obligations. Management also believes the use of an annualized quarterly Adjusted EBITDAre metric, which we refer to as Annualized Adjusted EBITDAre, is meaningful because it represents our current earnings run rate for the period presented. Annualized Adjusted EBITDAre and Annualized Pro Forma Adjusted EBITDAre, as defined below, are also used to determine the vesting of performance share awards granted to executive officers. Annualized Adjusted EBITDAre should be considered along with, but not as an alternative to net income as a measure of our operating performance. We define Annualized Pro Forma Adjusted EBITDAre as Annualized Adjusted EBITDAre, subject to certain adjustments to incorporate Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S. GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The Annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes. We believe Annualized Pro Forma Adjusted EBITDAre is a useful non-GAAP supplemental measure, as it excludes investments that were no longer owned at the balance sheet date and includes the annualized rent from investments acquired during the quarter. Management also uses our ratios of Net Debt/Annualized Adjusted EBITDAre, Net Debt/Annualized Pro Forma Adjusted EBITDAre, Net Debt and Preferred Stock/Annualized Adjusted EBITDAre, and Net Debt and Preferred Stock/Annualized Pro Forma Adjusted EBITDAre as measures of leverage in assessing our financial performance, which is calculated as net debt (which we define as total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by annualized quarterly Adjusted EBITDAre and annualized Pro Forma Adjusted EBITDAre, respectively.

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The following is a reconciliation of net income (which we believe is the most comparable U.S. GAAP measure) to Adjusted EBITDAre and Annualized Pro Forma EBITDAre calculations for the periods indicated below (dollars in thousands):


	Three months ended June 30,
	2025			2024
Net income	$	199,011		$	260,968
Interest	283,824			246,931

Income taxes	24,065			15,642
Depreciation and amortization	647,849			605,570
Provisions for impairment	143,363			96,458
Merger, transaction, and other costs, net	331			2,754
Gain on sales of real estate	(38,566)			(25,153)
Foreign currency and derivative loss (gain), net	4,388			(511)

Proportionate share of adjustments from unconsolidated entities	19,774			16,911

Quarterly Adjusted EBITDAre	$	1,284,039		$	1,219,570
Annualized Adjusted EBITDAre (1)	$	5,136,156		$	4,878,280
Annualized Pro Forma Adjustments	$	56,842		$	33,813
Annualized Pro Forma Adjusted EBITDAre	$	5,192,998		$	4,912,093
Total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts	$	28,665,619		$	25,712,293
Proportionate share of unconsolidated entities debt, excluding deferred financing costs	659,190			659,190
Less: Cash and cash equivalents	(800,447)			(442,820)
Net Debt (2)	$	28,524,362		$	25,928,663
Preferred Stock	—			167,394
Net Debt and Preferred Stock	$	28,524,362		$	26,096,057
Net Debt/Annualized Adjusted EBITDAre	5.6		x	5.3		x
Net Debt/Annualized Pro Forma Adjusted EBITDAre	5.5		x	5.3		x
Net Debt and Preferred Stock/ Annualized Adjusted EBITDAre	5.6		x	5.3		x
Net Debt and Preferred Stock/ Annualized Pro Forma Adjusted EBITDAre	5.5		x	5.3		x

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

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

As described above, the Annualized Pro Forma Adjustments, which include transaction accounting adjustments in accordance with U.S. GAAP, consist of adjustments to incorporate the Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the periods, consistent with the requirements of Article 11 of Regulation S-X. The annualized Pro Forma Adjustments are consistent with the debt service coverage ratio calculated under financial covenants for our senior unsecured notes. The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDAre calculation for the periods indicated below (in thousands):


	Three months ended June 30,
	2025		2024
Annualized pro forma adjustments from investments acquired or stabilized	$	61,709	$	39,329
Annualized pro forma adjustments from investments disposed	(4,867)		(5,516)
Annualized Pro Forma Adjustments	$	56,842	$	33,813

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

We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts' definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairments of depreciable real estate assets, and reduced by gain on property sales. We define Normalized FFO, a non-GAAP financial measure, as FFO excluding merger, transaction, and other costs, net. We define diluted FFO and diluted normalized FFO as FFO and normalized FFO adjusted for dilutive noncontrolling interests.

The following summarizes our FFO and Normalized FFO (in millions, except per share data):


	Three months ended June 30,						Six months ended June 30,
	2025		2024		% Change		2025		2024		% Change
FFO available to common stockholders	$	955.7	$	929.1	2.9	%	$	1,893.4	$	1,714.8	10.4	%
FFO per common share (1)	$	1.06	$	1.07	(0.9)	%	$	2.11	$	2.01	5.0	%
Normalized FFO available to common stockholders	$	956.1	$	931.9	2.6	%	$	1,894.0	$	1,811.7	4.5	%
Normalized FFO per common share (1)	$	1.06	$	1.07	(0.9)	%	$	2.11	$	2.12	(0.5)	%

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

We consider FFO and Normalized FFO to be appropriate supplemental measures of a REIT’s operating performance as they are based on a net income analysis of property portfolio performance that adds back items such as depreciation and impairments for FFO, and adds back merger, transaction, and other costs, net, for Normalized FFO. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative.

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The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S. GAAP measure) to FFO and Normalized FFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (in thousands, except per share amounts):


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Net income available to common stockholders	$	196,919	$	256,804	$	446,734	$	386,500
Depreciation and amortization	647,849		605,570		1,256,784		1,186,634
Depreciation of furniture, fixtures and equipment	(604)		(610)		(1,142)		(1,233)
Provisions for impairment of real estate	142,254		87,204		239,672		175,401
Gain on sales of real estate	(38,566)		(25,153)		(61,103)		(41,727)
Proportionate share of adjustments for unconsolidated entities	9,085		6,380		15,340		11,054
FFO adjustments allocable to noncontrolling interests	(1,189)		(1,062)		(2,882)		(1,813)
FFO available to common stockholders	$	955,748	$	929,133	$	1,893,403	$	1,714,816
FFO allocable to dilutive noncontrolling interests	2,417		1,595		4,842		2,935
Diluted FFO	$	958,165	$	930,728	$	1,898,245	$	1,717,751

FFO available to common stockholders	$	955,748	$	929,133	$	1,893,403	$	1,714,816
Merger, transaction, and other costs, net	331		2,754		610		96,858
Normalized FFO available to common stockholders	$	956,079	$	931,887	$	1,894,013	$	1,811,674
Normalized FFO allocable to dilutive noncontrolling interests	2,417		1,595		4,842		2,935
Diluted Normalized FFO	$	958,496	$	933,482	$	1,898,855	$	1,814,609

FFO per common share, basic and diluted	$	1.06	$	1.07	$	2.11	$	2.01


Normalized FFO per common share, basic and diluted	$	1.06	$	1.07	$	2.11	$	2.12


Distributions paid to common stockholders	$	727,450	$	676,215	$	1,439,274	$	1,312,714
FFO after distributions	$	228,298	$	252,918	$	454,129	$	402,102
Normalized FFO after distributions	$	228,629	$	255,672	$	454,739	$	498,960
Weighted average number of common shares used for FFO and Normalized FFO:
Basic	902,966		870,319		897,338		852,621
Diluted	906,398		872,520		900,797		854,806

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ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS

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

The following summarizes our AFFO (in millions, except per share data):


	Three months ended June 30,						Six months ended June 30,
	2025		2024		% Change		2025		2024		% Change
AFFO available to common stockholders	$	947.5	$	921.1	2.9	%	$	1,897.2	$	1,783.9	6.4	%
AFFO per common share (1)	$	1.05	$	1.06	(0.9)	%	$	2.11	$	2.09	1.0	%

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

We consider AFFO to be an appropriate supplemental measure of our performance. Most companies in our industry use a similar measurement, but they may use the term “CAD” (for Cash Available for Distribution), “FAD” (for Funds Available for Distribution) or other terms. Our AFFO calculations may not be comparable to AFFO, CAD or FAD reported by other companies, and other companies may interpret or define such terms differently than we do.

We believe the non-GAAP financial measure AFFO provides useful information to investors because it is a widely accepted industry measure of the operating performance of real estate companies that is used by industry analysts and investors who look at and compare those companies. In particular, AFFO provides an additional measure to compare the operating performance of different REITs without having to account for differing depreciation assumptions and other unique revenue and expense items which are not pertinent to measuring a particular company’s on-going operating performance. Therefore, we believe that AFFO is an appropriate supplemental performance metric, and that the most appropriate U.S. GAAP performance metric to which AFFO should be reconciled is net income available to common stockholders. Presentation of the information regarding FFO, Normalized FFO, and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, Normalized FFO, and AFFO in the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO, Normalized FFO, and AFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as alternatives to net income as an indication of our performance. FFO, Normalized FFO, and AFFO should not be considered as alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO, Normalized FFO, and AFFO should not be considered as measures of liquidity, our ability to make cash distributions, or our ability to pay interest payments.

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The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S. GAAP measure) to Normalized FFO and AFFO. Also presented is information regarding distributions paid to common stockholders and the weighted average number of common shares used for the basic and diluted computation per share (in thousands, except per share amounts). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported AFFO.


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Net income available to common stockholders	$	196,919	$	256,804	$	446,734	$	386,500
Cumulative adjustments to calculate Normalized FFO (1)	759,160		675,083		1,447,279		1,425,174
Normalized FFO available to common stockholders	956,079		931,887		1,894,013		1,811,674
Debt-related non-cash items:
Amortization of net debt discounts and deferred financing costs	8,257		799		14,890		2,196


Amortization of acquired interest rate swap value (2)	3,555		3,710		7,266		6,514
Capital expenditures from operating properties:

Leasing costs and commissions	(1,985)		(2,129)		(2,865)		(3,056)

Recurring capital expenditures	(221)		(52)		(240)		(52)
Other non-cash items:
Non-cash change in allowance for credit losses (3)	1,109		9,254		20,280		10,546
Amortization of share-based compensation	8,110		7,267		14,009		16,519
Straight-line rent and expenses, net	(30,226)		(47,587)		(74,038)		(92,447)
Amortization of above and below-market leases, net	6,287		13,806		21,613		28,080
Deferred tax expense	413		—		309		—
Proportionate share of adjustments for unconsolidated entities	(1,678)		(538)		(1,641)		382
Other adjustments (4)	(2,209)		4,657		3,611		3,589
AFFO available to common stockholders	$	947,491	$	921,074	$	1,897,207	$	1,783,945
AFFO allocable to dilutive noncontrolling interests	2,401		1,587		4,802		2,946
Diluted AFFO	$	949,892	$	922,661	$	1,902,009	$	1,786,891
AFFO per common share, basic and diluted	$	1.05	$	1.06	$	2.11	$	2.09


Distributions paid to common stockholders	$	727,450	$	676,215	$	1,439,274	$	1,312,714
AFFO after distributions	$	220,041	$	244,859	$	457,933	$	471,231
Weighted average number of common shares used for AFFO:
Basic	902,966		870,319		897,338		852,621
Diluted	906,398		872,520		900,797		854,806

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

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

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

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

PROPERTY PORTFOLIO INFORMATION

At June 30, 2025, most of the properties in our portfolio were leased under net lease agreements. A net lease typically requires the client to be responsible for monthly rent and certain property operating expenses including property taxes, insurance, and maintenance. In addition, clients of our properties typically pay rent increases based on: (1) fixed increases, (2) increases tied to inflation (typically subject to ceilings), or (3) additional rent calculated as a percentage of the clients' gross sales above a specified level.

We define total portfolio annualized base rent as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables, as of the balance sheet date, multiplied by 12, excluding percentage rent, interest income on loans and preferred equity investments, and including our pro rata share of such revenues from properties owned by unconsolidated joint ventures. We believe total portfolio annualized base rent is a useful supplemental operating measure, as it excludes properties that were no longer owned at the balance sheet date and includes the annualized rent from properties acquired during the quarter. Total portfolio annualized base rent has not been reduced to reflect reserves recorded as adjustments to U.S. GAAP rental revenue in the periods presented.

Top 20 Industry Concentrations

We are engaged in a single business activity, which is the leasing of property to clients, generally on a net basis. That business activity spans various geographic boundaries and includes property types and clients engaged in various industries. Even though we have a single segment, we believe our investors continue to view diversification as a key component of our investment philosophy and so we believe it remains important to present certain information regarding our property portfolio classified according to the business of the respective clients, expressed as a percentage of our total portfolio annualized base rent:


	Percentage of Total Portfolio Annualized Base Rent by Industry
	As of
	June 30, 2025	December 31, 2024
Grocery	10.7%	10.1%
Convenience Stores	9.8	10.2
Home Improvement	6.4	6.0
Dollar Stores	6.2	6.4
Restaurants-Quick Service	4.9	4.9
Drug Stores	4.6	4.7
Health and Fitness	4.4	4.3
Automotive Service	4.3	4.5
Restaurants-Casual Dining	3.8	4.0
General Merchandise	3.3	3.2
Gaming	3.1	3.2
Home Furnishings	3.0	2.8
Health Care	2.7	2.7
Sporting Goods	2.4	2.3
Apparel Stores	2.4	2.2
Transportation Services	2.3	2.3
Wholesale Clubs	2.2	2.3
Theaters	2.0	2.1
Entertainment	1.9	1.8
Motor Vehicle Dealerships	1.8	1.8

Property Type Composition

The following table sets forth certain property type information regarding our property portfolio as of June 30, 2025 (dollars and square footage in thousands):


Property Type	Number of Properties	Leasable Square Feet (1)	Annualized Base Rent		Percentage of Annualized Base Rent
Retail	14,967	217,102	$	4,129,062	79.9	%
Industrial	569	119,989	755,608		14.6
Gaming	2	5,053	162,635		3.1
Other (2)	68	4,190	122,403		2.4
Total	15,606	346,334	$	5,169,708	100.0	%

(1)Represents leasable building square footage and includes our portfolio of unconsolidated joint ventures based on ownership percentage. Excludes 2,962 acres of leased land categorized as agriculture at June 30, 2025.

(2)"Other" primarily includes 27 properties classified as agriculture with $35.1 million in annualized base rent, 14 properties classified as office with $32.8 million in annualized base rent, 21 properties classified as country clubs with $25.9 million in annualized base rent, and three properties classified as data centers with $24.5 million in annualized base rent, as well as one land parcel under development.

Client Diversification

The following table sets forth the 20 largest clients in our property portfolio, expressed as a percentage of total portfolio annualized base rent, which does not give effect to deferred rent or interest earned on loans and preferred equity investments, at June 30, 2025:


Client	Number of Leases	Percentage of Portfolio Annualized Base Rent (1)
7-Eleven	825	3.4	%
Dollar General	1,762	3.2
Walgreens	400	3.2
Dollar Tree / Family Dollar (2)	1,362	2.9
Life Time Fitness	41	2.1
EG Group	414	2.1
Wynn Resorts	1	2.0
(B&Q) Kingfisher	67	2.0
FedEx	82	1.8
Asda	40	1.6
Sainsbury's	39	1.6
BJ's Wholesale Club	45	1.5
Tesco	27	1.4
Tractor Supply	227	1.3
CVS Pharmacy	210	1.2
MGM (Bellagio) (3)	1	1.1
LA Fitness	63	1.1
Home Depot	40	1.1
AMC Theatres	39	1.0
Walmart / Sam's Club	62	1.0
Total	5,747	36.4	%

(1)Amounts for each client are calculated independently; therefore, the individual percentages may not sum to the total.

(2)Subsequent to June 30, 2025, Dollar Tree's sale of Family Dollar was completed.

(3)Represents our proportionate share of the annualized base rent of the unconsolidated joint venture.

Lease Expirations

The following table sets forth certain information regarding the timing of the lease term expirations in our portfolio (excluding rights to extend a lease at the option of the client) and their contribution to total portfolio annualized base rent as of June 30, 2025 (dollars and square footage in thousands):


	Total Portfolio (1)
	Expiring Leases		Annualized Base Rent		Percentage of Annualized Base Rent
Year	Retail	Non-Retail
2025	387	9	$	73,158	1.4	%
2026	925	50	226,163		4.5
2027	1,628	51	372,462		7.2
2028	1,781	72	421,044		8.1
2029	1,874	49	456,693		8.8
2030	1,224	47	365,375		7.2
2031	755	56	346,748		6.7
2032	1,154	48	321,814		6.2
2033	1,041	27	327,337		6.3
2034	807	32	347,686		6.7
2035	610	23	191,069		3.7
2036	611	24	203,999		3.9
2037	544	23	157,676		3.0
2038	381	24	148,904		2.9
2039	501	7	143,475		2.8
2040-2143	2,060	127	1,066,105		20.6
Total	16,283	669	$	5,169,708	100.0	%

(1)Leases on our multi-client properties are counted separately in the table above.

Geographic Diversification

The following table sets forth certain geographic information regarding our property portfolio as of June 30, 2025 (square footage in thousands):


Location	Number of Properties	Percent Leased		Approximate Leasable Square Feet	Percentage of Annualized Base Rent

Alabama	501	99	%	6,031	1.7	%
Alaska	16	100		623	0.2
Arizona	290	99		4,651	1.8
Arkansas	306	100		3,497	0.9
California	380	99		14,992	4.7
Colorado	204	100		3,937	1.4
Connecticut	59	98		2,664	0.6
Delaware	26	100		283	0.1
Florida	1,080	99		13,582	5.2
Georgia	716	99		11,749	3.5
Hawaii	22	100		48	0.1
Idaho	39	100		402	0.2
Illinois	599	99		14,171	4.2
Indiana	487	99		12,363	2.5
Iowa	123	99		4,353	0.7
Kansas	215	100		5,549	1.0
Kentucky	445	99		7,049	1.5
Louisiana	378	100		5,915	1.6
Maine	113	99		1,396	0.5
Maryland	100	99		4,364	1.2
Massachusetts	217	99		7,885	3.8
Michigan	582	99		8,645	2.6
Minnesota	290	100		5,686	1.6
Mississippi	341	100		5,374	1.1
Missouri	441	98		6,808	1.7
Montana	30	100		401	0.2
Nebraska	88	100		1,339	0.3
Nevada	81	100		4,638	1.8
New Hampshire	70	97		1,307	0.4
New Jersey	156	97		2,819	1.3
New Mexico	148	100		2,206	0.7
New York	377	100		6,848	2.6
North Carolina	489	98		10,182	2.5
North Dakota	26	100		597	0.2
Ohio	837	96		22,585	4.1
Oklahoma	402	97		5,713	1.5
Oregon	41	100		686	0.3
Pennsylvania	368	99		7,419	2.0
Rhode Island	34	100		344	0.2
South Carolina	392	99		6,191	1.7
South Dakota	39	100		603	0.2
Tennessee	577	100		9,854	2.4
Texas	1,872	97		35,734	9.7
Utah	57	100		2,619	0.6
Vermont	19	100		175	0.1
Virginia	423	99		9,242	2.5
Washington	84	100		1,881	0.7
West Virginia	110	100		1,099	0.4
Wisconsin	329	100		8,553	1.8
Wyoming	24	100		195	0.1
Puerto Rico	6	100		59	*
U.S. Virgin Islands	1	100		38	*
France	28	100		1,407	0.3
Germany	4	100		190	*
Ireland	22	100		2,406	0.8
Italy	42	100		2,708	0.8
Poland	3	100		3,551	0.5
Portugal	5	100		142	*
Spain	98	100		8,051	1.3
United Kingdom	354	100		32,535	13.6
Total/average	15,606	99	%	346,334	100.0	%
•*Less than 0.1%

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IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

For information on the impact of new accounting standards on our consolidated financial statements, see note 1, Summary of Significant Accounting Policies, to our Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements have been prepared in accordance with U.S. GAAP and are the basis for our discussion and analysis of financial condition and results of operations. Preparing our consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. We believe that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. There have been no material changes to the Critical Accounting Policies disclosed in our annual report on Form 10-K for the year ended December 31, 2024. This summary should be read in conjunction with the more complete discussion of our accounting policies and procedures included in note 1, Summary of Significant Accounting Policies and Procedures and New Accounting Standards, to our consolidated financial statements in our annual report.

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