--- ticker: O company: Realty Income Corporation filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 18 risks_removed: 20 risks_modified: 71 risks_unchanged: 43 source: SEC EDGAR url: https://riskdiff.com/o/2025-vs-2024/ markdown_url: https://riskdiff.com/o/2025-vs-2024/index.md generated: 2026-06-01 --- # Realty Income Corporation: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 18 | | Risks removed | 20 | | Risks modified | 71 | | Unchanged | 43 | --- ## New in Current Filing: We are subject to risks and liabilities in connection with forming and attracting third-party investment in our anticipated fund business, investing in new or existing co-investment ventures or funds, and managing properties through our anticipated fund business or other co-investment ventures. As previously publicly disclosed, we anticipate forming a fund business, and may explore options to form other co-investment ventures in the future. Our organizational documents do not limit the amount of available funds that we may invest in our anticipated fund business or other co-investment ventures. We currently intend to develop and acquire properties through our new fund business and co-investment ventures and we may also make investments in other entities at our discretion in the future. However, there can be no assurance that we will be able to form our anticipated fund business and co-investment ventures on the timeline expected, or at all, attract third-party investment or that additional investments in our anticipated fund business or other co-investment ventures to develop or acquire properties in the future will be successful, or that such anticipated fund business or other co-investment ventures will improve our consolidated financial position or results of operations. Further, there can be no assurance that we are able to realize value from our existing or future investments. Our anticipated fund business or other co-investment ventures are expected to involve certain additional risks that we do not currently otherwise face, including the risks inherent in owning, operating and managing one or more funds, risks related to our ability to negotiate third-party investments, such as valuation, operational limitations, 13 13 13 Table of Contents Table of Contents management fee structures and other incentive fees, on terms that are beneficial to us, and the inherent conflicts that may exist in allocating investment opportunities effectively between us and the fund or such other co-investment ventures. In addition, the same factors that may impact the valuation of our existing portfolio, as otherwise discussed in this Annual Report on Form 10-K, may also impact the portfolios to be held by the funds or co-investment ventures and could result in other than temporary impairment of our investment and a reduction in fee revenues, if any. Our fund business may be subject to some or all of the risks more fully described in "We may engage in development, speculative development, or expansion projects or invest in new asset classes, which would subject us to additional risks that could negatively impact our operations." Such risks may adversely impact our anticipated fund business's or our other co-investment ventures' financial position or results of operation. --- ## New in Current Filing: Increased scrutiny and changing expectations from regulators and other stakeholders regarding sustainability practices and reporting could impact our business practices, cause us to incur additional costs and expose us to new risks. We seek to promote effective energy efficiency and other sustainability strategies and compliance with federal, state and international laws and regulations related to climate change, both internally and with our partners across our value chain, including with our clients. Our sustainability strategies and efforts to comply with the various federal, state and international laws and regulations related to climate change could result in significant capital expenditures to improve our existing properties, properties we may acquire, and other business practices. Any changes to such laws and regulations could also result in increased operating costs or capital expenditures at our properties. If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our clients and investors may be damaged and we may incur fines and/or penalties. Tenants of net-leased properties are typically responsible for maintenance and other day-to-day management of the properties. This lack of control over our net-leased properties makes it difficult for us to collect property-level environmental data and to enforce related initiatives, which may impact our ability to comply with certain shareholder expectations or regulatory disclosure requirements to which we are subject or to comply with reporting frameworks or other established frameworks and standards. If we are unable to successfully collect the data necessary to comply with these disclosure requirements, standards or expectations, we may be subject to increased regulatory risk, of if such data is incomplete or unfavorable, our relationship with our investors or other stakeholders, our stock price, and our access to capital may be negatively impacted. 17 17 17 Table of Contents Table of Contents Additionally, our sustainability disclosures may reflect aspirational goals, targets, and other expectations and assumptions, which are necessarily uncertain and may not be realized. If we fail to satisfy the environmental, social, and governance expectations of investors, tenants and other stakeholders, our initiatives are not executed as planned, or we do not satisfy our goals, then our third-party ratings, reputation and financial results could be adversely affected. There can be no assurance that any of our sustainability strategies will result in reduced operating costs, higher occupancy or higher rental rates or deter our existing clients from relocating to properties owned by our competitors. In addition, both advocates and opponents to certain sustainability matters are increasingly resorting to a range of activism forms, including shareholder proposals, media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business. The occurrence of any of the foregoing could have an adverse effect on the price of our stock and our financial condition and results of operations. --- ## New in Current Filing: We are subject to complex and changing laws, regulations, policies, and executive orders, which exposes us to potential liabilities, increased costs and other adverse effects on our business. We are subject to complex and changing laws, regulations, policies, and executive orders, locally, internationally and federally, and the enforcement and interpretations thereof, and compliance with these laws, regulations, policies and executive orders is onerous and expensive. New and changing laws, regulations, policies, and executive orders, or the enforcement and interpretations thereof, can adversely affect our business in many ways, including by increasing costs, negatively impacting the creditworthiness of our existing or potential clients, changing the interpretations or enforceability of existing business relationships or agreements, creating legal liability or reputational harm to the Company or distractions for management, generating operational disruptions, and requiring changes to our business, strategies or operations. Changes in law, enforcement priorities, policy, and other actions that materially adversely affect our business may be announced with little or no advance notice and we may not be able to effectively mitigate all adverse impacts from such measures or ensure timely compliance. These changes could also expose us to significant fines, government investigations, litigation and reputational harm, all of which could be costly, result in distractions for management, adversely impact our operational results, and could alter our ability to execute on our strategic plans. All of these impacts could materially adversely affect our business, reputation, results of operations and financial condition. Item 1B: Unresolved Staff Comments There are no unresolved staff comments. Item 1C: Cybersecurity We maintain a cyber risk management program to identify, assess, manage, mitigate, and respond to cybersecurity threats. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. The program is integrated within our enterprise risk management system and addresses our IT networks and related systems that are essential to the operation of our business. We maintain controls and procedures, including third-party oversight procedures, and cybersecurity training for all employees on an annual basis, which are designed to ensure prompt escalation of cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management in a timely manner. We work with third parties that assist us to identify, assess, and manage cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers, and penetration testing firms. Our cybersecurity program and designated incident response team are comprised of key employees, and third-party information security experts from leading cybersecurity incident response firms, who are responsible for efficiently and effectively responding to cybersecurity incidents. We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans. 21 21 21 Table of Contents Table of Contents We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See "Risk Factors - We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business." --- ## New in Current Filing: Dispositions During the year ended December 31, 2024, we sold 294 properties with total net proceeds received of $589.5 million. --- ## New in Current Filing: Redemption of Preferred Stock On September 30, 2024, we redeemed all 6.9 million shares outstanding of our 6.000% Series A Preferred Stock ("Realty Income Series A Preferred Stock"), which was converted from Spirit's outstanding preferred stock in connection with the Merger, at a redemption price of $25.00 per share, plus accrued and unpaid dividends. For more details, see note 16, Series A Preferred Stock, to the consolidated financial statements contained in this annual report. 25 25 25 Table of Contents Table of Contents --- ## New in Current Filing: Portfolio Discussion Leasing Results At December 31, 2024, we had 205 properties available for lease or sale out of 15,621 properties in our portfolio, which represents a 98.7% occupancy rate based on the number of properties in our portfolio. Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and include properties owned by unconsolidated joint ventures. Below is a summary of our portfolio activity for the periods indicated below: Three months ended December 31, 2024Properties available for lease at September 30, 2024196 Lease expirations (1) 286 Re-leases to same client(197)Re-leases to new client(24)Vacant dispositions(56)Properties available for lease at December 31, 2024205 Year ended December 31, 2024Properties available for lease at December 31, 2023193 Lease expirations (1)928 Re-leases to same client(638)Re-leases to new client(56)Vacant dispositions(222)Properties available for lease at December 31, 2024205 --- ## New in Current Filing: Three months ended December 31, 2024 Properties available for lease at September 30, 2024 Lease expirations (1) Properties available for lease at December 31, 2024 --- ## New in Current Filing: Impact of Current Macroeconomic Conditions We continue to monitor developments related to macroeconomic factors that could have an adverse impact on our business and our clients. Our clients face additional challenges, including potential changes in consumer confidence levels, behavior and spending and increased operational expenses, such as with respect to labor costs. 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. --- ## New in Current Filing: Material Cash Requirements The following table summarizes the maturity of each of our obligations as of December 31, 2024 (dollars in millions): Credit Facility and Commercial Paper (1)Unsecured TermLoansMortgages PayableSenior Unsecured Notes and BondsInterest (2)Ground Leases Paid by the Company (3)Ground Leases Paid byOur Clients (4)Other (5)Total2025$67.3 $800.0 $43.4 $1,050.0 $1,002.5 $12.5 $31.8 $557.1 $3,564.6 20261,062.9 1,060.6 12.0 2,375.0 845.2 17.6 32.4 117.9 5,523.6 2027 - 500.0 22.3 2,313.6 736.8 11.1 30.5 98.2 3,712.5 2028 - - 1.3 2,499.8 633.2 8.9 27.5 2.2 3,172.9 2029 - - 1.3 2,387.5 589.0 10.0 25.0 1.9 3,014.7 Thereafter - - 1.0 12,312.8 2,922.1 406.7 336.4 11.0 15,990.0 Total$1,130.2 $2,360.6 $81.3 $22,938.7 $6,728.8 $466.8 $483.6 $788.3 $34,978.3 --- ## New in Current Filing: Other Revenue The following summarizes our total other revenue (in millions): Years ended December 31,20242023ChangeInterest income on financing receivables$124.4 $102.8 $21.6 Interest income on loans and preferred equity investments100.0 16.8 83.2 Other3.0 1.2 1.8 $227.4 $120.8 106.6 --- ## New in Current Filing: Merger, Transaction, and Other Costs, Net During the year ended December 31, 2024, we incurred $96.3 million of merger, transaction, and other costs, net consisting of $86.7 million of transaction and integration-related costs related to Spirit, which largely consisted of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger, as well as $5.1 million related to the lease termination of a legacy corporate facility, and $4.5 million of organization costs incurred related to our private fund. For the year ended December 31, 2023, we incurred $14.5 million of merger, transaction, and other costs, net, the majority of which was related to the Merger that closed in January 2024. --- ## New in Current Filing: Equity in Earnings of Unconsolidated Entities Equity in earnings of unconsolidated entities was $7.8 million for the year ended December 31, 2024, compared to $2.5 million for the year ended December 31, 2023. The increase in equity in earnings of unconsolidated entities is due to an increase in our joint venture investments. --- ## New in Current Filing: Preferred Stock Dividends The increase in preferred stock dividends of $7.8 million for the year ended December 31, 2024 as compared with the same period in 2023 is due to the issuance of Realty Income Series A Preferred Stock in connection with the Merger. --- ## New in Current Filing: Excess of Redemption Value over Carrying Value of Preferred Shares Redeemed In September 2024, we redeemed all 6.9 million of Realty Income Series A Preferred Stock outstanding. 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. --- ## New in Current Filing: 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. --- ## New in Current Filing: 2. Merger with Spirit Realty Capital, Inc. On October 29, 2023, we entered into an Agreement and Plan of Merger (as amended, or the "Merger Agreement") with Saints MD Subsidiary, Inc., ("Merger Sub"), a Maryland corporation and direct wholly owned subsidiary of Realty Income, and Spirit, a Maryland corporation. On January 23, 2024, we completed our merger with Spirit. Pursuant to the terms and subject to the conditions of the Merger Agreement, Spirit merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation. At the effective time of the Merger (the "Effective Time"), (i) each outstanding share of Spirit common stock, par value $0.05 per share, automatically converted into 0.762 (the "Exchange Ratio") of a newly issued share of our common stock, subject to adjustments as set forth in the Merger Agreement, and cash in lieu of fractional shares, and (ii) each outstanding share of Spirit's 6.000% Series A Cumulative Redeemable preferred stock, par value $0.01 per share ("Spirit Series A Preferred Stock"), converted into the right to receive one share of newly issued Realty Income 6.000% Series A Cumulative Redeemable preferred stock ("Realty Income Series A Preferred Stock"), having substantially the same terms as the Spirit Series A Preferred Stock. Immediately prior to the Effective Time, each award of outstanding restricted Spirit common stock and Spirit performance share award was cancelled and converted into Realty Income common stock, using the Exchange Ratio. For more details, see note 16, Series A Preferred Stock. The primary reason for the Merger was to expand our size, scale and diversification, in order to further position us as the real estate partner of choice for large net lease transactions. 60 60 60 Table of Contents Table of Contents The Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with Realty Income as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value. The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data): Shares of Spirit common stock exchanged (1)142,136,567 Exchange Ratio0.762Shares of Realty Income common stock issued108,308,064Opening 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 Shares of Spirit common stock exchanged (1) Less: Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (2) (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, 2024Measurement Period AdjustmentsAt Acquisition Date As Reported December 31, 2024ASSETSLand$1,853,895 $3,247 $1,857,142 Buildings and improvements4,859,162 90,314 4,949,476 Total real estate held for investment6,713,057 93,561 6,806,618 Real estate and lease intangibles held for sale35,650 (1,583)34,067 Cash and cash equivalents93,683 - 93,683 Accounts receivable12,959 (145)12,814 Lease intangible assets (1)2,214,615 (32,804)2,181,811 Goodwill1,259,864 (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 LIABILITIESAccounts payable and accrued expenses$56,407 $(1,934)$54,473 Lease intangible liabilities (3)378,369 (203)378,166 Other liabilities101,954 142 102,096 Term loans1,300,000 - 1,300,000 Notes payable2,481,486 - 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 --- ## New in Current Filing: December 31, 2024 Lease intangible assets (1) Other assets (2) Lease intangible liabilities (3) (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. (3) 61 61 61 Table of Contents Table of Contents The initial assessment of fair value provided in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024 were considered preliminary and were based on information that was available to management at the time the consolidated financial statements were prepared. Measurement period adjustments were recorded in the period in which they were determined, as if they had been completed at the acquisition date. Before the first anniversary of the date of the Merger, final measurement period adjustments recorded in the year ended December 31, 2024 resulted from updated valuations related to real estate assets and liabilities, in addition to loans receivable. The adjustments were determined based on additional information that existed at the acquisition date but was not contemplated in our initial fair value assessment and resulted in a decrease to goodwill of $59.1 million. Approximately $1.20 billion has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated financing and corporate overhead cost savings. None of the goodwill recognized is deductible for tax purposes. B. Merger-related Transaction CostsIn 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 31,20242023Total 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. --- ## New in Current Filing: 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, 2024MaturityAmortized CostAllowanceCarrying Amount (1)Senior Secured Notes ReceivableOctober 2029 - November 2030$797.2 $(11.4)$785.8 Mortgage LoanSeptember 203833.5 - 33.5 Unsecured LoanDecember 202610.2 (0.9)9.3 Total$840.9 $(12.3)$828.6 December 31, 2023MaturityAmortized CostAllowanceCarrying Amount (1)Senior Secured Note ReceivableOctober 2029$174.3 $(2.5)$171.8 Mortgage LoanSeptember 203833.5 - 33.5 Total$207.8 $(2.5)$205.3 --- ## No Match in Current: Following the Merger, we may be unable to integrate the operations of Spirit successfully, or realize the anticipated synergies and related benefits of the Merger and the transactions contemplated by the Merger Agreement or do so within the anticipated time frame. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The Merger involves the combination of two companies which operated as independent public companies. We will be required to devote significant management attention and resources to integrating the operations of Spirit. Potential difficulties we may encounter in the integration process include the following: •the inability to successfully combine Spirit's operations with ours in a manner that permits the combined company to achieve operating efficiencies (including with the integration of information technology systems), cost savings and efficiencies, revenues, synergies or other benefits either in the time frame anticipated or at all; •lost revenue and clients as a result of certain clients of either us or Spirit deciding not to do business with the combined company; •the continued complexities associated with managing a multi-national combined company, integrating certain personnel from the two companies, and the complexities associated with the separation of personnel; •the complexities of combining two companies with different histories, regulatory restrictions, markets and clients; •the failure to retain key employees of either of the two companies; •potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger and the transactions contemplated by the Agreement and Plan of Merger, dated October 29, 2023 (the "Merger Agreement"), by and among the Company, Saints MD Subsidiary, Inc., a Maryland corporation and wholly owned subsidiary of the Company, and Spirit; and •performance shortfalls at one or both of the two companies as a result of the diversion of management's attention caused by completing the Merger and integrating Spirit's operations with ours. In addition, as disclosed, certain legal proceedings were instituted against us, Spirit, and the former Spirit directors and we may see additional legal proceedings instituted in the future. The pendency and outcome of any legal proceedings is uncertain and may result in additional costs, expenses and the diversion of management's attention 18 18 18 Table of Contents Table of Contents all of which could have an adverse effect on our business, operating results and price of our common stock or our ability to raise additional capital. --- ## No Match in Current: Our historical and unaudited pro forma condensed combined financial statements may not be representative of our results after the Merger and the transactions contemplated by the Merger Agreement. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The Merger and the transactions contemplated by the Merger Agreement were completed in January 2024. Accordingly, our historical financial statements and our operating results for the periods prior to such time do not give effect to those transactions. In addition, the unaudited pro forma condensed combined financial statements related to such transactions that we have previously prepared were created for informational purposes only and do not purport to be indicative of the financial position or results of operations that actually would have occurred had the Merger and the transactions contemplated by the Merger Agreement been completed as of the dates indicated, nor does it purport to be indicative of our future operating results or financial position after the Merger and the transactions contemplated by the Merger Agreement. The unaudited pro forma condensed combined financial statements reflect adjustments, which were based upon preliminary estimates, to allocate the purchase price to Spirit's assets and liabilities and certain estimates and assumptions regarding the Merger and the transactions contemplated by the Merger Agreement that we and Spirit believe are reasonable under the circumstances. In addition, the unaudited pro forma condensed combined financial statements do not reflect other future events that occur after the Merger and the transactions contemplated by the Merger Agreement, including the costs related to the planned integration of the two companies and any future nonrecurring charges resulting from the Merger and the transactions contemplated by the Merger Agreement, and do not consider potential impacts of current market conditions on revenues or expense efficiencies. As a result, we cannot assure you that our historical and unaudited pro forma condensed combined financial statements will be representative of our results for future periods. --- ## No Match in Current: Our common stockholders will be diluted by the Merger. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* At the closing of the Merger, we issued approximately 108.0 million additional shares of common stock. Consequently, as a result of this dilution, our common stockholders as of immediately prior to the Merger have less voting control and influence over our management and policies after the effective time of the Merger than they previously exercised over our management and policies. --- ## No Match in Current: Appointment of New Chief Financial Officer and Treasurer ("CFO") *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Effective January 1, 2024, Jonathan Pong was appointed Executive Vice President, CFO and Treasurer, replacing Christie Kelly, our former CFO, upon her planned retirement that was announced in June 2023. 26 26 26 Table of Contents Table of Contents --- ## No Match in Current: Pan European Sale and Leaseback with Decathlon SE ("Decathlon") *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* We entered the markets of France, Germany, and Portugal for the first time through sale-leaseback transactions with affiliates of Decathlon, a world leader in retail sporting goods and an investment grade rated company, for €527.0 million, which includes 82 retail properties located in France, Germany, Italy, Portugal, and Spain. --- ## No Match in Current: Investments in Unconsolidated Joint Ventures *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* In October 2023, we completed our previously announced $951.4 million acquisition of common and preferred interests from Blackstone Real Estate Trust, Inc. ("BREIT") in a new joint venture that owns a 95% interest in the real estate of The Bellagio Las Vegas. The investment included $301.4 million of common equity in the joint venture in exchange for an indirect interest of 21.9% in the property and a $650.0 million preferred equity interest in the joint venture with an expected rate of return of 8.1%. 27 27 27 Table of Contents Table of Contents In November 2023, we established a joint venture with Digital Realty Trust, Inc. ("Digital Realty") to support the development of two build-to-suit data centers in Northern Virginia. We invested approximately $199.8 million to acquire an 80% equity interest in the venture, while Digital Realty maintains a 20% interest. Each partner will fund its pro rata share of the remaining $117.7 million estimated development cost for the first phase of the project, which is slated for completion in mid-2024. See note 5, Investments in Unconsolidated Entities, to the consolidated financial statements for further details. --- ## No Match in Current: Material Cash Requirements *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The following table summarizes the maturity of each of our obligations as of December 31, 2023 (dollars in millions): Credit Facility and Commercial Paper (1)Unsecured TermLoans (2)Mortgages PayableSenior Unsecured Notes and Bonds (3)Interest (4)GroundLeases Paid by the Company (5)GroundLeases Paid byOur Clients (6)Other (7)Totals2024$764.4 $250.0 $740.5 $850.0 $773.8 $14.3 $30.4 $728.5 $4,151.9 2025 - - 44.0 1,050.0 700.4 12.6 29.8 29.1 1,865.9 2026 - 1,082.0 12.0 2,075.0 587.5 18.3 28.9 11.0 3,814.7 2027 - - 22.3 2,027.8 525.9 10.1 26.9 0.3 2,613.3 2028 - - 1.3 2,049.8 443.0 9.9 23.5 - 2,527.5 Thereafter - - 2.3 10,509.5 2,173.6 303.8 242.6 3.8 13,235.6 Totals$764.4 $1,332.0 $822.4 $18,562.1 $5,204.2 $369.0 $382.1 $772.7 $28,208.9 --- ## No Match in Current: Other Revenue *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Other revenue primarily relates to interest income recognized on financing receivables for certain leases with above-market terms and interest income recognized on client loans and preferred equity investments. The increase in other revenue for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to higher interest income on financing receivables of $60.9 million driven by an increase in recent sale-leaseback transactions with above-market lease terms, in addition to an increase of $17.0 million from interest income earned on new loans and preferred equity investments entered into during the year. --- ## No Match in Current: Merger and Integration-Related Costs *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Merger and integration-related costs consist of advisory fees, attorney fees, accountant fees, and incremental and non-recurring costs necessary to convert data and systems, retain employees, and otherwise enable us to operate the acquired business or assets efficiently. For the year ended December 31, 2023, we incurred $14.5 million of merger and integration-related costs, the majority of which was related to the Spirit merger that closed in January 2024. For the year ended December 31, 2022, we incurred $13.9 million of merger and integration-related transaction costs in conjunction with our VEREIT merger. --- ## No Match in Current: Equity in Income and Impairment of Investment in Unconsolidated Entities *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Equity in income for the year ended December 31, 2023 primarily relates to investments made in two unconsolidated joint ventures during the fourth quarter of 2023. See note 5, Investments in Unconsolidated Entities, to the consolidated financial statements for further details. The loss for the year ended December 31, 2022 was primarily driven by an other than temporary impairment related to the sale of three equity method investments acquired in our merger with VEREIT in November 2021. --- ## No Match in Current: Merger with VEREIT *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* On November 1, 2021, we completed our acquisition of VEREIT, Inc. ("VEREIT"), and the merger was consummated. Pursuant to the terms of the Merger Agreement and subject to the terms thereof, upon the consummation of the merger, (i) each outstanding share of VEREIT common stock, and each outstanding common partnership unit of VEREIT Operating Partnership, L.P., ("VEREIT OP") owned by any of its partners other than VEREIT, Realty Income or their respective affiliates, was automatically converted into 0.705 of newly issued shares of our common stock, or in certain instances, Realty Income L.P. units, and (ii) each VEREIT OP outstanding common unit owned by VEREIT, Realty Income or their respective affiliates remained outstanding as partnership interests in the surviving entity. Each outstanding VEREIT stock option and restricted stock unit that were unvested as of November 1, 2021 were converted into equivalent options and restricted stock units, in each case with respect to the share of the Company's common stock, using the equity award exchange ratio in accordance with the Merger Agreement. A. Merger and Integration-Related CostsIn conjunction with our merger with VEREIT, we incurred merger-related transaction costs of $4.8 million, $13.9 million, and $167.4 million for the years ended December 31, 2023, 2022, and 2021, respectively. Merger and integration-related costs consist of advisory fees, attorney fees, accountant fees, public filing fees and additional incremental and non-recurring costs necessary to convert data and systems, retain employees and otherwise enable us to operate the acquired business or assets efficiently. B. Unaudited Pro Forma Financial Information Our consolidated results of operations for year ended December 31, 2021 include $176.3 million of revenues and $36.7 million of net income associated with the results of operations of VEREIT OP. The following unaudited pro forma information presents a summary of our combined results of operations for the year ended December 31, 2021 as if our merger with VEREIT had occurred on January 1, 2020 (in millions, except per share data). The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results. In accordance with ASC 805, Business Combinations, the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc. ("Orion"). Year ended December 31, 2021 Total revenues$3,084.3 Net income$734.6 Basic and diluted earnings per share$1.27 The unaudited pro forma financial information above includes the following nonrecurring significant adjustment made to account for certain costs incurred as if our merger with VEREIT had been completed on January 1, 2020: merger and integration-related costs of $167.4 million were excluded within the pro forma financial information for 2021. 61 61 61 Table of Contents Table of Contents --- ## No Match in Current: Orion Divestiture *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Following of the closing of our merger with VEREIT, we contributed 92 office real estate assets, a consolidated real estate venture holding one office asset, and an unconsolidated real estate venture holding five office assets to a wholly owned subsidiary named Orion. On November 12, 2021, we distributed the outstanding shares of Orion common stock to our shareholders on a pro rata basis at a rate of one share of Orion common stock for every ten shares of Realty Income common stock held on November 12, 2021, the applicable record date. The fair market value of these shares for tax distribution was determined to be $20.6272 per share, which was calculated using the five-day volume weighted average share price after issuance. For more detail, see note 16, Distributions Paid and Payable. In conjunction with the Orion Divestiture, we incurred approximately $1.9 million and $6.0 million of transaction costs during the year ended December 31, 2022 and 2021, which were included in 'Merger and integration-related costs' within our consolidated statements of income and comprehensive income. As part of the Orion Divestiture, Orion paid us a dividend of $425.0 million and reimbursed $170.2 million to us for the early redemption of mortgage loans underlying the contributed assets prior to the effectuation of the Orion Divestiture. The distribution of Orion resulted in the derecognition of net assets of $1.74 billion, which net of the aforementioned cash payments of $595.2 million, resulted in a reduction to additional paid in capital of $1.14 billion. --- ## No Match in Current: 6. Investments in Loans *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The following table presents information about our loans as of December 31, 2023 (dollars in thousands): Amortized CostAllowanceCarrying Amount (1)Senior Secured Note Receivable$174,337 $(2,498)$171,839 Mortgage Loan33,500 - 33,500 Total$207,837 $(2,498)$205,339 --- ## No Match in Current: Year of Maturity *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Principal Totals 68 68 68 Table of Contents Table of Contents --- ## No Match in Current: Principal Amount (1) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* 4.650% notes due August 2023 redeemed in December 2021 3.25% notes due October 2022 redeemed in January 2021 (1) The redeemed principal amounts presented exclude the amounts we paid in accrued and unpaid interest. --- ## No Match in Current: 11. Issuances of Common Stock *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* A. At-the-Market ("ATM") Program In August 2023, we replaced our prior ATM program with a new ATM program, pursuant to which we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices. Upon settlement, subject to certain exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which cases we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser. Of the 120.0 million shares of our common stock available for sale under the prior ATM program at its inception, a total of 101.8 million of those shares were sold, the remainder of which were terminated. As of December 31, 2023, we had 81.3 million shares remaining for future issuance under our new ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder. The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions, shares in thousands): Years ended December 31,202320222021Shares of common stock issued under the ATM program(1)91,69968,60846,291Gross proceeds$5,483.2 $4,599.4 $3,207.9 Sales agents' commissions and other offering expenses(43.7)(43.4)(28.4)Net proceeds$5,439.5 $4,556.0 $3,179.5 Shares of common stock issued under the ATM program(1) (1) During the year ended December 31, 2023, 91.1 million shares were sold and 91.7 million shares were settled pursuant to forward sale confirmations. In addition, as of December 31, 2023, 6.2 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $55.03 per share. We currently expect to fully settle forward sale agreements outstanding by June 30, 2024, representing $337.8 million in net proceeds, for which the weighted average forward price at December 31, 2023 was $54.70 per share. (1) B. Dividend Reinvestment and Stock Purchase Plan ("DRSPP") Our DRSPP, provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions. Our DRSPP also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions. Our DRSPP authorizes up to 26.0 million common shares to be issued. At December 31, 2023, we had 11.0 million shares remaining for future issuance under our DRSPP program. The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions, shares in thousands): Years ended December 31,202320222021Shares of common stock issued under the DRSPP program198176 168 Gross proceeds$11.5 $11.7 $11.2 71 71 71 Table of Contents Table of Contents C. Issuance of Common Stock in Connection with VEREIT Acquisition On November 1, 2021, we completed our acquisition of VEREIT. As a result of the merger, former VEREIT common stockholders, VEREIT OP common unitholders and awardees of vested share awards separated from Realty Income and received approximately 162 million shares of Realty Income common stock, based on the shares of VEREIT common stock and common units of VEREIT OP outstanding as of October 29, 2021. D. Issuances of Common Stock in Underwritten Public Offerings During 2021, we issued an aggregate of 21.3 million shares of common stock, including 2.8 million shares purchased by the underwriters upon the exercise of their option to purchase additional shares. After deducting underwriting discounts, the aggregate net proceeds of $1.3 billion were used to fund investment opportunities, for general corporate purposes and working capital. There were no comparative offerings during the years ended December 31, 2023 or 2022. --- ## No Match in Current: Total unrealized (loss) gain on derivatives, net *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The following table summarizes the amount of gain (loss) on derivatives reclassified from AOCI (in thousands): Years ended December 31,Derivatives in Cash Flow Hedging RelationshipsLocation of Gain (Loss) Recognized in Income202320222021Cross-currency swapsForeign currency and derivative (loss) gain, net$ - $30,814 $3,541 Interest rate swapsInterest expense15,794 (4,487)(10,343)Foreign currency forwardsForeign currency and derivative (loss) gain, net4,251 2,139 - Interest rate swaptionsInterest expense(6,859) - - Total derivatives in cash flow hedging relationships$13,186 $28,466 $(6,802)Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair ValueForeign currency and derivative (loss) gain, net$1,415 $(29,708)$ - Total derivatives in fair value hedging relationships$1,415 $(29,708)$ - Derivatives in Net Investment Hedging RelationshipsCross-currency swaps - Net InvestmentForeign currency and derivative (loss) gain, net$62 $ - $ - Total derivatives in net investment hedging relationships$62 $ - $ - Net increase (decrease) to net income $14,663 $(1,242)$(6,802) --- ## No Match in Current: 15. Lessor Operating Leases *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Operating Leases At December 31, 2023, we owned or held interests in 13,458 properties. Of the 13,458 properties, 13,197, or 98.1%, are single-client properties, and the remaining are multi-client properties. At December 31, 2023, 193 properties were available for lease or sale. The majority of our leases are accounted for as operating leases. The vast majority of our leases are net leases where our client pays or reimburses us for property taxes and assessments and carries insurance coverage for public liability, property damage, fire, and extended coverage. Rent based on a percentage of our client's gross sales, or percentage rent, for the years ended December 31, 2023, 2022, and 2021 was $14.8 million, $14.9 million, and $6.5 million, respectively. At December 31, 2023, minimum future annual rental revenue to be received on the operating leases for the next five years and thereafter are as follows (in thousands): Future Minimum Operating Lease PaymentsFuture Minimum Direct Financing and Sale-Type Lease Payments (1)2024$4,006,574 $1,037 20253,918,126 812 20263,747,064 814 20273,531,235 751 20283,222,392 710 Thereafter24,768,619 25,139 Totals$43,194,010 $29,263 --- ## No Match in Current: Future Minimum Direct Financing and Sale-Type Lease Payments (1) *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* (1) Related to six properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments. 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. No individual client's rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the years ended December 31, 2023, 2022, and 2021. 78 78 78 Table of Contents Table of Contents --- ## No Match in Current: 16. Distributions Paid and Payable *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* 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: 202320222021January$0.2485$0.2465 $0.2345 February0.24850.2465 0.2345 March0.25450.2465 0.2345 April0.25500.2470 0.2350 May0.25500.2470 0.2350 June0.2550 0.2470 0.2350 July0.2555 0.2475 0.2355 August0.2555 0.2475 0.2355 September0.2555 0.2475 0.2355 October0.25600.2480 0.2360 November0.25600.2480 0.2360 December0.25600.2480 0.2460 Total$3.0510 $2.9670 $2.8330 Total At December 31, 2023, a distribution of $0.2565 per common share was payable and was paid in January 2024. At December 31, 2022, a distribution of $0.2485 per common share was payable and was paid in January 2023. The following presents the federal income tax characterization of distributions paid or deemed to be paid per common share for the years: 202320222021Ordinary income$2.8434500 $2.7867654 $1.5146899 Nontaxable distributions0.2075500 - 3.2925615 Total capital gain distribution - 0.1802346 0.0854609 Totals (1)$3.0510000 $2.9670000 $4.8927123 Totals (1) (1) The amount distributed in 2021 includes the $2.060 tax distribution of Orion shares, that occurred in conjunction with the Orion Divestiture on November 12, 2021, after our merger with VEREIT on November 1, 2021. The fair market value of these shares for tax distribution was determined to be $20.6272 per share, which was calculated using the five-day volume weighted average share price after issuance. --- ## Modified: Real estate property investments are illiquid. We may not be able to acquire or dispose of properties when desired or on favorable terms. **Key changes:** - Reworded sentence: "Our ability to quickly buy, sell or exchange any of our properties, or to contribute our properties to co-investment, including in response to changes in economic and other conditions will be limited and U.S." **Prior (2024):** Real estate investments are relatively illiquid. Our ability to quickly buy, sell or exchange any of our properties in response to changes in economic and other conditions will be limited and U.S. and foreign tax and regulatory regimes and authorities may impose or have the effect of restricting or limiting our ability to sell properties. No assurances can be given that we will recognize full value, at a price and at terms that are acceptable to us, for any property that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. **Current (2025):** Real estate investments are relatively illiquid. Our ability to quickly buy, sell or exchange any of our properties, or to contribute our properties to co-investment, including in response to changes in economic and other conditions will be limited and U.S. and non-U.S. tax and regulatory regimes and authorities - competition from other owners of properties that are trying to dispose of their properties, availability of capital, economic and market conditions and other factors beyond our control, may impose or have the effect of restricting or limiting our ability to sell or contribute properties. No assurances can be given that we will recognize full value, at a price and at terms that are acceptable to us, for any property that we are required to sell or contribute for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. --- ## Modified: ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("AFFO") **Key changes:** - Reworded sentence: "The following summarizes our AFFO (in millions, except per share data): Years ended December 31,20242023% ChangeAFFO available to common stockholders$3,621.4$2,774.930.5 %AFFO per common share (1)$4.19$4.004.8 % AFFO available to common stockholders AFFO per common share (1) (1) All per share amounts are presented on a diluted per common share basis." - Reworded sentence: "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)." - Reworded sentence: "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, 43 43 43 Table of Contents Table of Contents so comparisons with other REITs may not be meaningful." **Prior (2024):** 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 (dollars in millions, except per share data): Years ended December 31,20232022% ChangeAFFO available to common stockholders$2,774.9$2,401.415.6 %AFFO per common share (1)$4.00$3.922.0 % AFFO available to common stockholders AFFO per common share (1) (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. 42 42 42 Table of Contents Table of Contents 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 (dollars in thousands, except per share amounts): Years ended December 31,20232022Net income available to common stockholders$872,309 $869,408 Cumulative adjustments to calculate Normalized FFO (1)1,964,293 1,616,382 Normalized FFO available to common stockholders2,836,602 2,485,790 Gain on extinguishment of debt - (367)Amortization of share-based compensation26,227 21,617 Amortization of net debt premiums and deferred financing costs (2)(44,568)(67,150)Non-cash (gain) loss on interest rate swaps(7,189)718 Non-cash change in allowance for credit losses4,874 - Straight-line impact of cash settlement on interest rate swaps (3)7,190 1,558 Leasing costs and commissions(9,878)(5,236)Recurring capital expenditures(331)(587)Straight-line rent and expenses, net(141,130)(120,252)Amortization of above and below-market leases, net79,101 63,243 Proportionate share of adjustments for unconsolidated entities932 (4,239)Other adjustments (4)23,040 26,264 AFFO available to common stockholders$2,774,870 $2,401,359 AFFO allocable to dilutive noncontrolling interests5,540 4,033 Diluted AFFO$2,780,410 $2,405,392 AFFO per common share:Basic$4.01 $3.93 Diluted$4.00 $3.92 Distributions paid to common stockholders$2,111,793 $1,813,432 AFFO available to common stockholders in excess of distributions paid to common stockholders$663,077 $587,927 Weighted average number of common shares used for computation per share:Basic692,298 611,766 Diluted694,819 613,473 Cumulative adjustments to calculate Normalized FFO (1) Amortization of net debt premiums and deferred financing costs (2) Straight-line impact of cash settlement on interest rate swaps (3) Other adjustments (4) (1)See reconciling items for Normalized FFO presented under "Funds from Operations Available to Common Stockholders ("FFO") and Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO")". (2)Includes the amortization of net premiums on notes payable and assumption of our mortgages payable, which are being amortized over the life of the applicable debt, and costs incurred and capitalized upon issuance and exchange of our notes payable, assumption of our mortgages payable and issuance of our term loans, which are also being amortized over the lives of the applicable debt. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included. (3)Represents the straight-line amortization of $72.0 million gain realized upon the termination of $500.0 million in notional interest rate swaps in October 2022, over the term of the $750.0 million of 5.625% senior unsecured notes due October 2032. (4)Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, straight-line payments from cross-currency swaps, obligations related to financing lease liabilities, and adjustments allocable to noncontrolling interests. 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. 43 43 43 Table of Contents Table of Contents 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. Item 7A: Quantitative and Qualitative Disclosures about Market Risk We are exposed to economic risks from interest rates and foreign currency exchange rates. A portion of these risks is hedged, but the risks may affect our financial statements. **Current (2025):** 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): Years ended December 31,20242023% ChangeAFFO available to common stockholders$3,621.4$2,774.930.5 %AFFO per common share (1)$4.19$4.004.8 % AFFO available to common stockholders AFFO per common share (1) (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. 42 42 42 Table of Contents Table of Contents 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. Years ended December 31,20242023Net income available to common stockholders$847,893 $872,309 Cumulative adjustments to calculate Normalized FFO (1)2,716,058 1,964,293 Normalized FFO available to common stockholders3,563,951 2,836,602 Excess of redemption value over carrying value of preferred shares redeemed5,116 - Amortization of share-based compensation32,741 26,227 Amortization of net debt discounts (premiums) and deferred financing costs15,361 (44,568)Amortization of acquired interest rate swap value (2)13,935 - Non-cash change in allowance for credit losses (3)106,801 4,874 Leasing costs and commissions(8,558)(9,878)Recurring capital expenditures(402)(331)Straight-line rent and expenses, net(171,887)(141,130)Amortization of above and below-market leases, net55,870 79,101 Deferred tax expense3,552 - Proportionate share of adjustments for unconsolidated entities(2,078)932 Other adjustments (4)7,035 23,041 AFFO available to common stockholders$3,621,437 $2,774,870 AFFO allocable to dilutive noncontrolling interests6,599 5,540 Diluted AFFO$3,628,036 $2,780,410 AFFO per common share:Basic$4.20 $4.01 Diluted$4.19 $4.00 Distributions paid to common stockholders$2,691,719 $2,111,793 AFFO available to common stockholders in excess of distributions paid to common stockholders$929,718 $663,077 Weighted average number of common shares used for computation per share:Basic862,959 692,298 Diluted865,842 694,819 Cumulative adjustments to calculate Normalized FFO (1) Amortization of acquired interest rate swap value (2) Non-cash change in allowance for credit losses (3) Other adjustments (4) (1)See reconciling items for Normalized FFO presented under "Funds from Operations Available to Common Stockholders ("FFO") and Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO")". (2)Includes the amortization of the purchase price allocated to interest rate swaps acquired in the Merger. (3)Credit losses primarily relate to the impairment of financing receivables. (4)Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, straight-line payments from cross-currency swaps, obligations related to financing lease liabilities, adjustments allocable to noncontrolling interests, and gains and losses on the sale of loans receivable. 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, 43 43 43 Table of Contents Table of Contents 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. Item 7A: Quantitative and Qualitative Disclosures about Market Risk We are exposed to economic risks from interest rates and foreign currency exchange rates. A portion of these risks is hedged, but the risks may affect our financial statements. --- ## Modified: Property taxes may increase without notice. **Key changes:** - Reworded sentence: "While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our clients, and, as we continue to expand into new verticals, the concentration of our leases under which we are primarily responsible for property taxes may increase, enhancing our exposure to such risks." **Prior (2024):** Real estate property taxes on our properties (including properties we develop or acquire) may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities. While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our clients. **Current (2025):** Real estate property taxes on our properties (including properties we develop or acquire) may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities. While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our clients, and, as we continue to expand into new verticals, the concentration of our leases under which we are primarily responsible for property taxes may increase, enhancing our exposure to such risks. 15 15 15 Table of Contents Table of Contents --- ## Modified: The market value of our capital stock and debt securities could be substantially affected by various factors. **Key changes:** - Reworded sentence: "The market value of our capital stock and debt securities will depend on many factors, which may change from time to time and may be outside of our control, including: •Prevailing interest rates, increases in which may have an adverse effect on the market value of our capital stock and debt securities; •The market for similar securities issued by other REITs; •General economic, political and financial market conditions; •The financial condition, performance and prospects of us, our clients and our competitors; •Changes in tax, legal and regulatory obligations, including without limitation due to changes in federal, state, or local governing administrations; •Litigation and regulatory proceedings; •Changes in financial estimates or recommendations by securities analysts with respect to us, our competitors or our industry; •Changes in our mix of investments and revenue-generating activities over time; •Changes in our credit ratings; •Actual or anticipated variations in quarterly operating results of us and our competitors; and •Failure to achieve the perceived benefits of our strategic acquisitions and/or engagement in new verticals, investment structures or other revenue-generating activities." - Reworded sentence: "18 18 18 Table of Contents Table of Contents" **Prior (2024):** The market value of our capital stock and debt securities will depend on many factors, which may change from time to time and may be outside of our control, including: •Prevailing interest rates, increases in which may have an adverse effect on the market value of our capital stock and debt securities; •The market for similar securities issued by other REITs; •General economic, political and financial market conditions; •The financial condition, performance and prospects of us, our clients and our competitors; •Changes in legal and regulatory taxation obligations; •Litigation and regulatory proceedings; •Changes in financial estimates or recommendations by securities analysts with respect to us, our competitors or our industry; •Changes in our credit ratings; •Actual or anticipated variations in quarterly operating results of us and our competitors; and •Failure to achieve the perceived benefits of the Merger and the transactions contemplated by the Merger Agreement or if the effect of the Merger and the transactions contemplated by the Merger Agreement on our results of operations or financial condition is not consistent with the expectations of financial or industry analysts. In addition, over the last several years, prices of common stock and debt securities in the U.S., trading markets have experienced extreme price fluctuations, and the market values of our common stock and debt securities have also fluctuated significantly during this period. As a result of these and other factors, investors who purchase our capital stock and debt securities may experience a decrease, which could be substantial and rapid, in the market value of our capital stock and debt securities, including decreases unrelated to our operating performance or prospects. 19 19 19 Table of Contents Table of Contents **Current (2025):** The market value of our capital stock and debt securities will depend on many factors, which may change from time to time and may be outside of our control, including: •Prevailing interest rates, increases in which may have an adverse effect on the market value of our capital stock and debt securities; •The market for similar securities issued by other REITs; •General economic, political and financial market conditions; •The financial condition, performance and prospects of us, our clients and our competitors; •Changes in tax, legal and regulatory obligations, including without limitation due to changes in federal, state, or local governing administrations; •Litigation and regulatory proceedings; •Changes in financial estimates or recommendations by securities analysts with respect to us, our competitors or our industry; •Changes in our mix of investments and revenue-generating activities over time; •Changes in our credit ratings; •Actual or anticipated variations in quarterly operating results of us and our competitors; and •Failure to achieve the perceived benefits of our strategic acquisitions and/or engagement in new verticals, investment structures or other revenue-generating activities. Prices of common stock and debt securities in the U.S., trading markets have experienced extreme price fluctuations, and the market values of our common stock and debt securities have also fluctuated significantly during this period. As a result of these and other factors, investors who purchase our capital stock and debt securities may experience a decrease, which could be substantial and rapid, in the market value of our capital stock and debt securities, including decreases unrelated to our operating performance or prospects. 18 18 18 Table of Contents Table of Contents --- ## Modified: Impact of Real Estate and Capital Markets **Prior (2024):** 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. **Current (2025):** 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. --- ## Modified: Foreign Currency Exchange Rates **Key changes:** - Reworded sentence: "45 45 45 Table of Contents Table of Contents Item 8: Financial Statements and Supplementary Data Table of Contents A.Reports of Independent Registered Public Accounting FirmB.Consolidated Balance Sheets, December 31, 2024 and December 31, 2023C.Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2024, 2023, and 2022D.Consolidated Statements of Equity, Years ended December 31, 2024, 2023, and 2022E.Consolidated Statements of Cash Flows, Years ended December 31, 2024, 2023, and 2022F.Notes to Consolidated Financial StatementsG.Schedule III Real Estate and Accumulated Depreciation Schedules not filed: All schedules, other than that indicated in the Table of Contents, have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes." **Prior (2024):** We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge. We continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments, including currency exchange swaps, and foreign currency forward contracts with financial counterparties where practicable. Such derivative instruments are viewed as risk management tools and are not used for speculative or trading purposes. Additionally, our inability to redeploy rent receipts from our international operations on a timely basis subjects us to foreign exchange risk. 45 45 45 Table of Contents Table of Contents Item 8: Financial Statements and Supplementary Data Table of Contents A.Reports of Independent Registered Public Accounting FirmB.Consolidated Balance Sheets, December 31, 2023 and 2022C.Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2023, 2022, and 2021D.Consolidated Statements of Equity, Years ended December 31, 2023, 2022, and 2021E.Consolidated Statements of Cash Flows, Years ended December 31, 2023, 2022, and 2021F.Notes to Consolidated Financial StatementsG.Schedule III Real Estate and Accumulated Depreciation Schedules not filed: All schedules, other than that indicated in the Table of Contents, have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes. Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets, December 31, 2023 and 2022 Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2023, 2022, and 2021 Consolidated Statements of Equity, Years ended December 31, 2023, 2022, and 2021 Consolidated Statements of Cash Flows, Years ended December 31, 2023, 2022, and 2021 Notes to Consolidated Financial Statements Schedule III Real Estate and Accumulated Depreciation 46 46 46 Table of Contents Table of Contents **Current (2025):** We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments. Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates. We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge. We continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments, including currency exchange swaps, and foreign currency forward contracts with financial counterparties where practicable. Such derivative instruments are viewed as risk management tools and are not used for speculative or trading purposes. Additionally, our inability to redeploy rent receipts from our international operations on a timely basis subjects us to foreign exchange risk. 45 45 45 Table of Contents Table of Contents Item 8: Financial Statements and Supplementary Data Table of Contents A.Reports of Independent Registered Public Accounting FirmB.Consolidated Balance Sheets, December 31, 2024 and December 31, 2023C.Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2024, 2023, and 2022D.Consolidated Statements of Equity, Years ended December 31, 2024, 2023, and 2022E.Consolidated Statements of Cash Flows, Years ended December 31, 2024, 2023, and 2022F.Notes to Consolidated Financial StatementsG.Schedule III Real Estate and Accumulated Depreciation Schedules not filed: All schedules, other than that indicated in the Table of Contents, have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes. Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets, December 31, 2024 and December 31, 2023 Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Equity, Years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Cash Flows, Years ended December 31, 2024, 2023, and 2022 Notes to Consolidated Financial Statements Schedule III Real Estate and Accumulated Depreciation 46 46 46 Table of Contents Table of Contents --- ## Modified: As a property owner, we may be subject to unknown environmental liabilities. **Key changes:** - Reworded sentence: "We could be subject to liability, including strict liability, by virtue of our ownership interest for environmental contamination." - Reworded sentence: "Our portfolio includes properties leased to operators of convenience stores that sell petroleum-based fuels, to operators of oil change and tune-up facilities, and operators that use chemicals and other waste products." - Reworded sentence: "Certain of our other properties, including those leased for industrial purposes, may also involve operations or activities that could give rise to environmental liabilities or could have been built using asbestos or other building materials that require owners or operators to undertake special precautions including removal, abatement, or adequately train or inform those that come in contact with such materials." - Reworded sentence: "While we maintain environmental insurance policies, our insurance could be unavailable or insufficient to address an environmental liability and/or we could be unable to obtain insurance for environmental matters at a reasonable cost or at all." - Reworded sentence: "However, we acquire properties with existing leases in place and the indemnities and other lease terms can have different indemnification requirements including for environmental matters than what is provided for in our leases that we negotiate directly with clients." **Prior (2024):** Investments in real property can create a potential for environmental liability. An owner of property can face liability for environmental contamination created by the presence or discharge of hazardous substances on the property. We can face such liability regardless of our knowledge of the contamination; the timing of the contamination; the cause of the contamination; or the party responsible for the contamination of the property. There may be environmental conditions associated with our properties of which we are unaware. A number of our properties are leased to operators of convenience stores that sell petroleum-based fuels, to operators of oil change and tune-up facilities, and operators that use chemicals and other waste products. These facilities and some other of our properties, use, or may have used in the past, underground lifts or storage tanks for the storage of petroleum-based or waste products, which could create a potential for the release of hazardous substances. Certain of our other properties, particularly those leased for industrial-type purposes, may also involve operations or activities that could give rise to environmental liabilities. The presence of hazardous substances on a property may adversely affect our client's ability to continue to operate that property or our ability to lease or sell that property and we may incur substantial remediation costs or third-party liability claims. Although our leases generally require our clients to operate in compliance with all applicable federal, state, and local environmental laws, ordinances and regulations, and to indemnify us against any environmental liabilities arising from the clients' activities on the properties, we could nevertheless be subject to liability, including strict liability, by virtue of our ownership interest. There also can be no assurance that our clients could or would satisfy their indemnification obligations under their leases. The discovery of environmental liabilities attached to our properties could have an adverse effect on our results of operations, our financial condition, or our ability to make distributions to stockholders and to pay the principal of and interest on our debt securities and other indebtedness. Some of our properties were built during the period when asbestos was commonly used in building construction and we may acquire other buildings that contain asbestos in the future. Environmental laws govern the presence, maintenance, and removal of asbestos-containing materials, or ACMs, and require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, that they adequately inform or train those who may come into contact with asbestos and that they undertake special precautions, including removal or other abatement in the event that asbestos is disturbed during renovation or demolition of a building. These laws may impose fines and penalties on building owners or operators for failure to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. 9 9 9 Table of Contents Table of Contents While we have not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to environmental contamination, if environmental contamination should exist on any of our properties, we could be subject to liability, including strict liability, by virtue of our ownership interest. In addition, while we maintain environmental insurance policies, it is possible that our insurance could be insufficient to address any particular environmental situation and/or that, in the future, we could be unable to obtain insurance for environmental matters at a reasonable cost, or at all. Our clients are generally responsible for, and indemnify us against, liabilities for environmental matters that arise during the lease terms as a result of clients' activities on the properties. However, it is possible that one or more of our clients could fail to have sufficient funds to cover any such indemnification or to meet applicable state financial assurance obligations or such environmental contamination may predate our client's lease term, and thus we may still be obligated to pay for any such environmental liabilities. **Current (2025):** Investments in real property can create a potential for environmental liability. We could be subject to liability, including strict liability, by virtue of our ownership interest for environmental contamination. Further, laws and regulations governing environmental contamination change and we have been, and in the future may be, subject to additional liability by virtue of these changes. We can face such liability regardless of our knowledge of the contamination; the timing of the contamination; the cause of the contamination; or the party responsible for the contamination of the property. There may be environmental conditions associated with our properties of which we are unaware. Our portfolio includes properties leased to operators of convenience stores that sell petroleum-based fuels, to operators of oil change and tune-up facilities, and operators that use chemicals and other waste products. These facilities and some other of our properties, use, or may have used in the past, underground lifts or storage tanks for the storage of petroleum-based or waste products, which could create a potential for the release of hazardous substances. Certain of our other properties, including those leased for industrial purposes, may also involve operations or activities that could give rise to environmental liabilities or could have been built using asbestos or other building materials that require owners or operators to undertake special precautions including removal, abatement, or adequately train or inform those that come in contact with such materials. The presence of hazardous substances on a property may adversely affect our client's ability to continue to operate that property or our ability to lease or sell that property and we may incur substantial remediation costs or third-party liability claims. Although our leases generally require our clients to operate in compliance with all applicable federal, state, and local environmental laws, ordinances and regulations, and to indemnify us against any environmental liabilities arising from the clients' activities on the properties, we could nevertheless be subject to liability, including strict liability, by virtue of our ownership interest. There also can be no assurance that our clients could or would satisfy their indemnification obligations under their leases. The discovery of environmental liabilities attached to our properties could have an adverse effect on our results of operations, our financial condition, or our ability to make distributions to stockholders and to pay the principal of and interest on our debt securities and other indebtedness. While we maintain environmental insurance policies, our insurance could be unavailable or insufficient to address an environmental liability and/or we could be unable to obtain insurance for environmental matters at a reasonable cost or at all. Our clients are generally responsible for, and indemnify us against, liabilities for environmental matters that arise during the lease terms as a result of clients' activities on the properties. However, we acquire properties with existing leases in place and the indemnities and other lease terms can have different indemnification requirements including for environmental matters than what is provided for in our leases that we negotiate directly with clients. It is also possible that one or more of our clients could fail to have sufficient funds to cover any such indemnification or to meet applicable state financial assurance obligations or such environmental contamination may predate our client's lease term, and thus we may still be obligated to pay for any such environmental liabilities. --- ## Modified: Our acquisition of additional properties may have a significant effect on our business, liquidity, financial position and/or results of operations. **Key changes:** - Reworded sentence: "We cannot provide any assurances that we will be successful in consummating future mergers and acquisitions or acquisitions on favorable terms or that we will realize expected cash yields, integration results, operating efficiencies, cost savings, revenue enhancements, synergies, or other benefits." - Reworded sentence: "We have made and may continue to make acquisitions of properties (including through the use of alternative lease and acquisition structures such as joint ventures, partnerships, fund and other structures) or engage in other revenue-generating businesses, that fall outside our historical focus on wholly-owned freestanding, single-client, net lease retail locations in the U.S." **Prior (2024):** Our future success will depend, in part, upon our ability to manage our mergers and acquisitions, acquisitions, and expansion opportunities under prevailing market conditions. We are regularly engaged in the process of identifying, analyzing, underwriting, and negotiating possible acquisition transactions. We cannot provide any assurances that we will be successful in consummating future mergers and acquisitions or acquisitions on favorable terms or that we will realize expected cash yields, operating efficiencies, cost savings, revenue enhancements, synergies, or other benefits. Our inability to consummate one or more acquisitions on such terms, our failure to adequately underwrite and identify risks and obligations when acquiring properties, or our failure to realize the intended benefits from one or more acquisitions, could have a significant adverse effect on our business, liquidity, financial position and/or results of operations, including as a result of our incurrence of additional indebtedness and related interest expense and our assumption of unforeseen contingent liabilities in connection with completed acquisitions. We have made and may continue to make acquisitions of properties (including through the use of alternative acquisition structures such as joint ventures, partnerships, fund and other structures) that fall outside our historical focus on freestanding, single-client, net lease retail locations in the U.S. We may be exposed to a variety of new risks by expanding into new property types (e.g., non-retail businesses), geographies, lease and acquisition structures, and clients who engage in non-retail businesses. These risks may be enhanced by our limited experience in managing new property types, geographies, lease and acquisition structures, clients. and the laws and/or culture of non-U.S. geographies. **Current (2025):** Our future success will depend, in part, upon our ability to manage our mergers and acquisitions, acquisitions, and expansion opportunities under prevailing market conditions. We are regularly engaged in the process of identifying, analyzing, underwriting, and negotiating possible acquisition transactions. We cannot provide any assurances that we will be successful in consummating future mergers and acquisitions or acquisitions on favorable terms or that we will realize expected cash yields, integration results, operating efficiencies, cost savings, revenue enhancements, synergies, or other benefits. In addition, we have historically engaged in, and may again in the future engage in strategic acquisitions of operating businesses, in which case we would be subject to risks related to our ability to successfully underwrite such target's businesses effectively and to combine such target's operations with ours in a manner that permits the combined company to achieve operating efficiencies (including with the integration of information technology systems), cost savings and efficiencies, revenues, synergies or other benefits either in the time frame anticipated or at all. Our inability to consummate one or more acquisitions on such terms, our failure to adequately underwrite and identify risks and obligations when acquiring properties, or our failure to realize the intended benefits from one or more acquisitions, could have a significant adverse effect on our business, liquidity, financial position and/or results of operations, including as a result of our incurrence of additional indebtedness and related interest expense and our assumption of unforeseen contingent liabilities in connection with completed acquisitions. We have made and may continue to make acquisitions of properties (including through the use of alternative lease and acquisition structures such as joint ventures, partnerships, fund and other structures) or engage in other revenue-generating businesses, that fall outside our historical focus on wholly-owned freestanding, single-client, net lease retail locations in the U.S. We may be exposed to a variety of new risks by expanding into new investments, property types (e.g., non-retail businesses), geographies, lease and acquisition structures, and clients who engage in non-retail businesses. For instance, while we have historically predominantly owned and leased commercial properties under long-term, net lease agreements, as we expand into new verticals, the composition of our lease portfolio may include a higher concentration of alternative lease structures, under which we may be primarily 12 12 12 Table of Contents Table of Contents responsible for other expenses and liabilities with respect to the property, including property taxes, insurance and maintenance costs. These risks may be enhanced by our limited experience in managing these new investments or activities, property types, geographies, lease and acquisition structures, clients and the laws and/or culture of non-U.S. geographies. --- ## Modified: 13. Derivative Instruments **Key changes:** - Reworded sentence: "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." - Reworded sentence: "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." - Reworded sentence: "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." - Reworded sentence: "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)." - Reworded sentence: "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." **Prior (2024):** 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. Derivative Designated as Hedging Instruments - Cash Flow Hedges We entered into foreign currency forward contracts to sell GBP, USD, and EUR and buy EUR, USD, and GBP to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in British Pound Sterling ("GBP") and Euro ("EUR"). Forward points on the forward contracts are included in the assessment of hedge effectiveness. We executed variable-to-fixed interest rate swaps to add stability to interest expense and to manage our exposure to interest rate movements associated with our term loans. To mitigate the impact of fluctuating interest rates, we also entered into interest rate swaption agreements during March 2023, structuring them as swaption corridors, in anticipation of issuing USD denominated bonds. Interest rate swaption corridors are a combination of two swaption positions. Specifically, we purchased a payer swaption, an option that allows us to enter into a swap where we will pay the fixed rate and receive the floating rate of the swap, and we also sold a payer swaption, an option that provides the counterparty with the right to enter into a swap where we will receive the fixed rate and pay the floating rate of the swap. The total premium paid for the March 2023 transaction was $7.6 million. All three hedging instruments are designated as cash flow hedges. Derivative Designated as Hedging Instruments - Fair Value Hedges 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 (loss) gain, net' on a systematic and rational basis, as net cash settlements and interest accruals on the respective cross currency swaps occur, over the remaining life of the hedging instruments. Derivative Designated as Hedging Instruments - Net Investment Hedges During the fourth quarter of 2023, we designated the three existing cross-currency swaps that had not been designated as hedging instruments through the third quarter of 2023 as net investment hedges to mitigate the risks associated with our investment in EUR-denominated foreign operations. These cross-currency swaps qualify as net investment hedges under the criteria prescribed in accordance with ASC Topic 815-20, Hedging - General. We use the spot method of assessing hedge effectiveness and apply the consistent election to the excluded component by 75 75 75 Table of Contents Table of Contents recognizing changes in the fair value of the hedging instruments attributable to the excluded component in the same manner as described above. Any difference between the change in the fair value of the excluded components and the amounts recognized in earnings is reported in other comprehensive income as part of the foreign cumulative translation adjustment. The gain or loss on the portion of the derivative instruments included in the assessment of effectiveness is reported in other comprehensive income as part of the 'Foreign currency translation adjustment' line item, to the extent the relationship is highly effective. If the company's net investment changes during a reporting period, the hedge relationship will be assessed for whether a de-designation is warranted (only if the hedge notional amount is outside of prescribed tolerance). 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 (loss) gain, net' in our consolidated statements of income and comprehensive income. The following table summarizes the terms and fair values of our derivative financial instruments at December 31, 2023 and 2022 (dollars in millions): Derivative TypeNumber of Instruments (1)Notional Amount as ofWeighted Average Strike Rate (2)Maturity Date (3)Fair Value - asset (liability) as ofDerivatives Designated as Hedging InstrumentsDecember 31, 2023December 31, 2022December 31, 2023December 31, 2022Interest rate swaps9$1,630.0 $250.04.26%Jan 2024 - Jan 2026$0.3 $5.6 Interest rate swaptions61,000.0 - (4)Feb 20342.6 - Cross-currency swaps - Fair Value (5)3320.0 320.0(6)Oct 2032(59.8)(33.3)Cross-currency swaps - Net Investment (5)3280.0 - (7)Oct 2032(53.2) - Foreign currency forwards22162.3 185.5(8)Jan 2024 - Dec 20242.7 16.1 $3,392.3 $755.5 $(107.4)$(11.6)Derivatives not Designated as Hedging InstrumentsCurrency exchange swaps4$1,810.6 $2,427.7(9)Jan 2024 - Feb 2024$8.9 $58.8 Cross-currency swaps (5)0 - 280.0 - %Oct 2032 - (29.5)$1,810.6 $2,707.7 $8.9 $29.3 Total of all Derivatives$5,202.9 $3,463.2 $(98.5)$17.7 **Current (2025):** 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. 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' 77 77 77 Table of Contents Table of Contents The following table summarizes the terms and fair values of our derivative financial instruments at December 31, 2024 and December 31, 2023 (dollars in millions): Derivative TypeNumber of Instruments (1)Notional Amount as ofWeighted Average Strike Rate (2)Maturity Date (3)Fair Value - asset (liability) as ofDerivatives Designated as Hedging InstrumentsDecember 31, 2024December 31, 2023December 31, 2024December 31, 2023Interest rate swaps (4)10$2,180.0 $1,630.03.40%Jun 2025 - Aug 2027$24.3 $0.3 Interest rate swaptions (5) - - 1,000.0 - - - 2.6 Cross-currency swaps - Fair Value3320.0 320.0(6)Oct 2032(42.2)(59.8)Cross-currency swaps - Net Investment3280.0 280.0(7)Oct 2032(37.6)(53.2)Foreign currency forwards26349.5 162.3(8)Jan 2025 - Jun 20269.3 2.7 $3,129.5 $3,392.3 $(46.2)$(107.4)Derivatives not Designated as Hedging InstrumentsCurrency exchange swaps4$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) --- ## Modified: Rental Revenue (excluding reimbursable) **Key changes:** - Reworded sentence: "The table below summarizes the increase in rental revenue (excluding reimbursable) in the years ended December 31, 2024 and 2023 (dollars in millions): Number of PropertiesYears ended December 31,20242023ChangeProperties acquired during 2024 & 20233,777$1,278.6 $273.8 $1,004.8 Same store rental revenue (1)11,4793,319.1 3,302.4 16.7 Constant currency adjustment (2)N/A15.2 - 15.2 Properties sold during and prior to 202443419.2 47.9 (28.7)Straight-line rent and other non-cash adjustmentsN/A(1.7)(34.2)32.5 Vacant rents, development and other (3)36590.6 91.3 (0.7)Other excluded revenue (4)N/A19.6 2.8 16.8 Total$4,740.6 $3,684.0 $1,056.6 Properties acquired during 2024 & 2023 Same store rental revenue (1) Constant currency adjustment (2) Properties sold during and prior to 2024 Vacant rents, development and other (3) Other excluded revenue (4) (1)The same store rental revenue percentage increased by 0.5% for the year ended December 31, 2024 as compared with the same period in 2023." - Reworded sentence: "Of the 16,694 in-place leases in the portfolio, 13,734, or 82.3%, 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." - Reworded sentence: "32 32 32 Table of Contents Table of Contents" **Prior (2024):** The table below summarizes our rental revenue (excluding reimbursable) for the years ended December 31, 2023 and 2022 (dollars in thousands): Number of PropertiesYears ended December 31,20232022ChangeProperties acquired during 2023 & 20222,608$808,797 $184,684 $624,113 Same store rental revenue (1)10,4982,851,747 2,799,549 52,198 Constant currency adjustment (2)N/A(10,001)(11,228)1,227 Properties sold during and prior to 20233125,246 30,371 (25,125)Straight-line rent and other non-cash adjustmentsN/A(34,721)20,871 (55,592)Vacant rents, development and other (3)35260,097 83,266 (23,169)Other excluded revenue (4)N/A2,784 7,459 (4,675)Totals$3,683,949 $3,114,972 $568,977 Properties acquired during 2023 & 2022 Same store rental revenue (1) Constant currency adjustment (2) Properties sold during and prior to 2023 Vacant rents, development and other (3) Other excluded revenue (4) (1)The same store rental revenue percentage increase for the year ended December 31, 2023 as compared to the same period in 2022 is 1.9%. (2)For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2023. None of the properties in France, Germany, Ireland, Italy, or Portugal met our same store pool definition for the periods presented. (3)Relates to the aggregate of (i) rental revenue from 325 properties that were available for lease during part of 2023 or 2022, and (ii) rental revenue for 27 properties under development or completed developments that do not meet our same store pool definition for the periods presented. (4)Primarily consists of reimbursements for tenant improvements and rental revenue that is not contractual base rent such as lease termination. 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 14,262 in-place leases in the portfolio, which excludes 270 vacant units, 11,717, or 82.2%, 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. Rent based on a percentage of our client's gross sales, or percentage rent, was $14.8 million and $14.9 million for the years ended December 31, 2023 and 2022, respectively, which represents less than 1% of rental revenue. At December 31, 2023, our portfolio of 13,458 properties was 98.6% leased with 193 properties available for lease, as compared to 99.0% leased with 126 properties available for lease at December 31, 2022. 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. 33 33 33 Table of Contents Table of Contents **Current (2025):** The table below summarizes the increase in rental revenue (excluding reimbursable) in the years ended December 31, 2024 and 2023 (dollars in millions): Number of PropertiesYears ended December 31,20242023ChangeProperties acquired during 2024 & 20233,777$1,278.6 $273.8 $1,004.8 Same store rental revenue (1)11,4793,319.1 3,302.4 16.7 Constant currency adjustment (2)N/A15.2 - 15.2 Properties sold during and prior to 202443419.2 47.9 (28.7)Straight-line rent and other non-cash adjustmentsN/A(1.7)(34.2)32.5 Vacant rents, development and other (3)36590.6 91.3 (0.7)Other excluded revenue (4)N/A19.6 2.8 16.8 Total$4,740.6 $3,684.0 $1,056.6 Properties acquired during 2024 & 2023 Same store rental revenue (1) Constant currency adjustment (2) Properties sold during and prior to 2024 Vacant rents, development and other (3) Other excluded revenue (4) (1)The same store rental revenue percentage increased by 0.5% for the year ended December 31, 2024 as compared with the same period in 2023. (2)For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2024. None of the properties in France, Germany, Ireland, or Portugal met our same store pool definition for the periods presented. In addition, the same store pool excludes properties assumed on January 23, 2024 as a result of the Merger. (3)Relates to the aggregate of (i) rental revenue from 315 properties that were available for lease during part of 2024 or 2023 for the year ended December 31, 2024, and (ii) rental revenue for 50 properties under development or completed developments that do not meet our same store pool definition for the year ended December 31, 2024. (4)"Other excluded revenue" primarily consists of reimbursements for tenant improvements and rental revenue that is not contractual base rent such as lease termination settlements. 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 16,694 in-place leases in the portfolio, 13,734, or 82.3%, 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. Rent based on a percentage of our clients' gross sales, or percentage rent, was $16.0 million and $14.8 million for the years ended December 31, 2024 and 2023, respectively. Percentage rent represents less than 1% of rental revenue. At December 31, 2024, our portfolio of 15,621 properties was 98.7% leased with 205 properties available for lease or sale, as compared to 98.6% leased with 193 properties available for lease at December 31, 2023. 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. 32 32 32 Table of Contents Table of Contents --- ## Modified: Lease Yield (1) **Key changes:** - Reworded sentence: "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." - Reworded sentence: "(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." - Reworded sentence: "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." - Reworded sentence: "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 $55.6 million, respectively." - Reworded sentence: "The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at December 31, 2024 (in thousands): Net increase (decrease) torental revenueIncrease toamortizationexpense2025$(33,129)$781,647 2026(35,661)683,461 2027(36,420)584,504 2028(29,521)494,976 2029(25,537)427,901 Thereafter334,956 1,887,510 Total$174,688 $4,859,999" **Prior (2024):** Acquisitions - Europe Properties under development (2) Total (3) (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 $4.4 million received as settlement credits as reimbursement of free rent periods for the year ended December 31, 2023. 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 £34.3 million of investments in U.K. development properties and €29.3 million of investment in Spain development properties, converted at the applicable exchange rates on the funding dates. (3)Our clients occupying the new properties are 88.7% retail, 8.5% industrial, and 2.8% other property types based on net operating income. Approximately 31.4% of the net operating income generated from acquisitions during the year ended December 31, 2023 is from investment grade rated clients, their subsidiaries, or affiliated companies. 63 63 63 Table of Contents Table of Contents The aggregate purchase price of the assets acquired during the year ended December 31, 2023 has been allocated as follows (in millions): Acquisitions - USDAcquisitions - SterlingAcquisitions - EuroLand (1)$779.5 £477.2 €288.6 Buildings and improvements2,842.5 909.0 462.3 Lease intangible assets (2)430.0 130.1 36.8 Other assets (3)559.9 257.3 35.2 Lease intangible liabilities (4)(115.1)(12.4)(0.9)Other liabilities (5)(9.1)(2.6)(9.6)$4,487.7 £1,758.6 €812.4 Land (1) Lease intangible assets (2) Other assets (3) Lease intangible liabilities (4) Other liabilities (5) (1)Sterling-denominated land includes £7.1 million of right of use assets under long-term ground leases. (2)The weighted average amortization period for acquired lease intangible assets is 11.3 years. (3)USD-denominated other assets consist entirely of financing receivables with above-market terms. Sterling-denominated other assets primarily consist of £66.1 million of financing receivables with above-market terms and £191.1 million of right-of-use assets accounted for as finance leases. Euro-denominated other assets consist of €17.4 million of financing receivables with above-market terms, €10.6 million of right-of-use assets accounted for as finance leases and €7.2 million of right-of-use assets under ground leases. (4)The weighted average amortization period for acquired lease intangible liabilities is 16.9 years. (5)USD-denominated other liabilities consist entirely of deferred rent on certain below-market leases. Sterling-denominated other liabilities primarily consist of £2.3 million of deferred rent on certain below-market leases and £0.2 million of lease liabilities under financing leases. Euro-denominated other liabilities consists of €1.6 million of deferred rent on certain below-market leases, €4.4 million of lease liabilities under ground leases, €2.1 million of lease liabilities under financing leases, and €1.5 million of other liabilities. (5) USD-denominated other liabilities consist The properties acquired during the year ended December 31, 2023 generated total revenue and net income of $302.3 million and $152.4 million, respectively. B. Investments in Existing Properties 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. In comparison, during the year ended December 31, 2022, we capitalized costs of $96.7 million on existing properties in our portfolio, consisting of $88.3 million for non-recurring building improvements, $5.2 million for re-leasing costs, and $3.2 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, 2023, 2022 and 2021 were $651.1 million, $634.9 million, and $247.6 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, 2023, 2022 and 2021 were $61.5 million, $55.6 million, and $35.4 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate. The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at December 31, 2023 (dollars in thousands): Net increase (decrease) torental revenueIncrease toamortizationexpense2024$(57,431)$593,845 2025(51,025)512,189 2026(43,447)456,383 2027(34,900)395,966 2028(24,525)336,868 Thereafter356,100 1,458,777 Totals$144,772 $3,754,028 **Current (2025):** Acquisitions - Europe Properties under development (2) Total (3) (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 - USDAcquisitions - SterlingAcquisitions - EuroLand$367.0 £279.7 €56.5 Buildings and improvements979.6 412.7 133.8 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 Lease intangible assets (1) Other assets (2) Lease intangible liabilities (3) Other liabilities (4) (1)The weighted average amortization period for acquired lease intangible assets is 9.4 years. (2)USD-denominated other assets primarily consist of $159.8 million of financing receivables allocated to sales-leaseback transactions and $23.1 million of right-of-use assets accounted for as finance leases. Sterling-denominated other assets consist entirely of right-of-use assets accounted for as finance leases. Euro-denominated other assets consist entirely of sale-leasebacks accounted for as financing receivables. (3)The weighted average amortization period for acquired lease intangible liabilities is 13.2 years. (4)USD-denominated other liabilities consist entirely of lease liabilities under financing leases. Euro-denominated other liabilities consist entirely of deferred rent on certain below-market leases. The aggregate purchase price of the assets acquired during the year ended December 31, 2024 included contingent consideration obligations related to leasing activities for a multi-tenant property acquired. At December 31, 2024, we had accrued $11.5 million for remaining amounts deemed probable and estimable. The properties acquired during the year ended December 31, 2024 generated total revenue and net income of $72.5 million and $24.3 million, respectively. 64 64 64 Table of Contents Table of Contents B. Investments in Existing Properties During the year ended December 31, 2024, we capitalized costs of $122.9 million on existing properties in our portfolio, consisting of $113.9 million for non-recurring building improvements, $8.6 million for re-leasing costs, and $0.4 million for recurring capital expenditures. In comparison, during the year ended December 31, 2023, we capitalized costs of $59.8 million on existing properties in our portfolio, consisting of $49.6 million for non-recurring building improvements, $9.9 million for re-leasing costs, and $0.3 million for recurring capital expenditures. C. Properties with Existing Leases The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible liabilities, net' on our consolidated balance sheets. The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases, for the years ended December 31, 2024, 2023, and 2022 were $870.2 million, $651.1 million, and $634.9 million, respectively. The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in our consolidated statements of income and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the years ended December 31, 2024, 2023, and 2022 were $34.7 million, $61.5 million, and $55.6 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate. The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at December 31, 2024 (in thousands): Net increase (decrease) torental revenueIncrease toamortizationexpense2025$(33,129)$781,647 2026(35,661)683,461 2027(36,420)584,504 2028(29,521)494,976 2029(25,537)427,901 Thereafter334,956 1,887,510 Total$174,688 $4,859,999 --- ## Modified: 12. Fair Value Measurements **Key changes:** - Reworded sentence: "74 74 74 Table of Contents Table of Contents The following tables present the carrying values and estimated fair values of financial instruments as of December 31, 2024 and 2023 (in millions): December 31, 2024Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Loans receivable$828.5 $ - $791.4 $43.7 Derivative assets47.2 - 47.2 - Total assets$875.7 $ - $838.6 $43.7 Liabilities:Mortgages payable$81.3$ - $ - $80.0 Notes and bonds payable22,938.7 - 20,665.5 928.0 Derivative liabilities81.5 - 81.5 - Total liabilities$23,101.5 $ - $20,747.0 $1,008.0 December 31, 2023Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Loans receivable$205.3 $ - $171.8 $33.5 Derivative assets21.2 - 21.2 - Total assets$226.5 $ - $193.0 $33.5 Liabilities:Mortgages payable$822.4$ - $ - $814.5 Notes and bonds payable18,562.1 - 16,620.8 982.9 Derivative liabilities119.6 - 119.6 - Total liabilities$19,504.1 $ - $16,740.4 $1,797.4 A." - Reworded sentence: "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, 2024December 31, 2023Carrying valueFair valueCarrying valueFair valueLoans 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" **Prior (2024):** 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. The following tables present the carrying values and estimated fair values of financial instruments as of December 31, 2023 and 2022 (in millions): December 31, 2023Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Loans receivable (1) $205.3 $ - $171.8 $33.5 Derivative assets21.2 - 21.2 - Total assets$226.5 $ - $193.0 $33.5 Liabilities:Mortgages payable$822.4$ - $ - $814.5 Notes and bonds payable18,562.1 - 17,603.7 - Derivative liabilities119.6 - 119.6 - Total liabilities$19,504.1 $ - $17,723.3 $814.5 Loans receivable (1) (1) Considering the proximity of time between the issuance and measurement of the two loans acquired during the fourth quarter of 2023, we have concluded that the carrying value reasonably approximates the estimated fair value at December 31, 2023. We determined our investment in mortgage loan is categorized as level 3 of the fair value hierarchy given our experience with mortgage borrowings. December 31, 2022Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Derivative assets$83.1 $ - $83.1 $ - Total assets$83.1 $ - $83.1 $ - Liabilities:Mortgages payable$842.3$ - $ - $810.4 Notes and bonds payable14,114.2 - 12,522.8 - Derivative liabilities64.7 - 64.7 - Total liabilities$15,021.2 $ - $12,587.5 $810.4 73 73 73 Table of Contents Table of Contents 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, 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, 2023December 31, 2022Carrying valueFair valueCarrying valueFair valueMortgages payable (1)$822.4$814.5 $842.3$810.4 Notes and bonds payable (2)$18,562.1$17,603.7 $14,114.2$12,522.8 **Current (2025):** Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820, Fair Value Measurements and Disclosures, sets forth a fair value hierarchy that categorizes inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. •Level 1 - Quoted market prices in active markets for identical assets and liabilities •Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other market-corroborated inputs •Level 3 - Inputs that are unobservable and significant to the overall fair value measurement We evaluate our hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from period to period. Changes in the type of inputs may result in a reclassification for certain assets. We have not historically had changes in classifications and do not expect that changes in classifications between levels will be frequent. 74 74 74 Table of Contents Table of Contents The following tables present the carrying values and estimated fair values of financial instruments as of December 31, 2024 and 2023 (in millions): December 31, 2024Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Loans receivable$828.5 $ - $791.4 $43.7 Derivative assets47.2 - 47.2 - Total assets$875.7 $ - $838.6 $43.7 Liabilities:Mortgages payable$81.3$ - $ - $80.0 Notes and bonds payable22,938.7 - 20,665.5 928.0 Derivative liabilities81.5 - 81.5 - Total liabilities$23,101.5 $ - $20,747.0 $1,008.0 December 31, 2023Hierarchy LevelCarrying ValueLevel 1Level 2Level 3Assets:Loans receivable$205.3 $ - $171.8 $33.5 Derivative assets21.2 - 21.2 - Total assets$226.5 $ - $193.0 $33.5 Liabilities:Mortgages payable$822.4$ - $ - $814.5 Notes and bonds payable18,562.1 - 16,620.8 982.9 Derivative liabilities119.6 - 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, 2024December 31, 2023Carrying valueFair valueCarrying valueFair valueLoans 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 --- ## Modified: Carrying value **Key changes:** - Reworded sentence: "Fair value Mortgages payable (1) Notes and bonds payable (1) (1) Excludes non-cash net premiums and discounts as well as deferred financing costs recorded on mortgages payable." - Reworded sentence: "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." - Reworded sentence: "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." - Added sentence: "76 76 76 Table of Contents Table of Contents" **Prior (2024):** Fair value Mortgages payable (1) Notes and bonds payable (2) (1)Excludes non-cash net premiums or discounts recorded on the mortgages payable. The unamortized balance of these net discounts was $0.4 million at December 31, 2023, and $12.4 million of net premiums at December 31, 2022. Also excludes deferred financing costs of $0.4 million at December 31, 2023, and $0.8 million at December 31, 2022. (2)Excludes non-cash net premiums recorded on notes payable. The unamortized balance of the net premiums was $125.3 million at December 31, 2023, and $224.6 million at December 31, 2022. Also excludes deferred financing costs of $83.8 million and a favorable basis adjustment on interest rate swaps designated as fair value hedges of $1.3 million at December 31, 2023, and $60.7 million of deferred financing costs at December 31, 2022. The estimated fair values of our mortgages payable and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant forward interest rate curve, plus an applicable credit-adjusted spread. Because this methodology includes unobservable inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related to our mortgages payable is categorized as level 3 of the fair value hierarchy. The estimated fair values of our publicly-traded senior notes and bonds payable are based upon indicative market prices and recent trading activity of our senior notes and bonds payable. Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to our notes and bonds payable is categorized as level 2 of the fair value hierarchy. 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, 2023, and 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety are classified as level two. For more details on our derivatives, see note 14, 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. 74 74 74 Table of Contents Table of Contents Depending on impairment triggering events during the applicable period, impairments are typically recorded for properties sold, in the process of being sold, vacant, in bankruptcy, or experiencing difficulties with collection of rent. The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (in millions): Years ended December 31,202320222021Carrying value prior to impairment$194.5 $140.9 $169.2 Less: total provisions for impairment (1)(82.2)(25.9)(39.0)Carrying value after impairment$112.3 $115.0 $130.2 Less: total provisions for impairment (1) (1) Excludes provision for current expected credit loss of $4.9 million at December 31, 2023. The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions and purchase offers received from third parties, which are Level 3 inputs. 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. **Current (2025):** Fair value Mortgages payable (1) Notes and bonds payable (1) (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. (1) The estimated fair values of our mortgage loan receivable, unsecured loan receivable, mortgages payable, and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant input, such as forward interest rate curve, plus an applicable credit-adjusted spread. Because this methodology includes unobservable inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related to the named financial instruments are categorized as level 3 of the fair value hierarchy. 75 75 75 Table of Contents Table of Contents The estimated fair values of our senior secured loans receivable, publicly-traded senior notes and bonds payable are based upon indicative market prices and recent trading activity of each financial instrument. Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to these financial instruments is categorized as level 2 of the fair value hierarchy. B. Financial Instruments Measured at Fair Value on a Recurring Basis For derivative assets and liabilities, we may utilize interest rate swaps, interest rate swaptions, and forward-starting swaps to manage interest rate risk, and cross-currency swaps, currency exchange swaps, and foreign currency forwards to manage foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, spot and forward rates, as well as option volatility. Derivative fair values also include credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within level 2 on the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize level three inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties. However, at December 31, 2024 and 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety are classified as level 2. For more details on our derivatives, see note 13, Derivative Instruments. C. Items Measured at Fair Value on a Non-Recurring Basis Impairment of Real Estate Investments Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments only under certain circumstances, such as when an impairment write-down occurs. Depending on impairment triggering events during the applicable period, impairments are typically recorded for properties sold, in the process of being sold, vacant, in bankruptcy, or experiencing difficulties with collection of rent. The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (dollars in millions): Years ended December 31,202420232022Carrying 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 sale17 2 - Classified as held for investment88 16 5 Sold132 94 89 Less: total provisions for impairment of real estate (1) (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. (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, The valuation of impaired assets is determined using valuation techniques including applying a capitalization rate to estimated net operating income of a property, analysis of recent comparable sales transactions and purchase offers received from third parties, which are level 3 inputs. We may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of such real estate. Estimating future cash flows is highly subjective and estimates can differ materially from actual results. 76 76 76 Table of Contents Table of Contents --- ## Modified: LIQUIDITY AND CAPITAL RESOURCES **Key changes:** - Reworded sentence: "As of December 31, 2024, we had $3.7 billion of liquidity, which consists of cash and cash equivalents of $445.0 million, unsettled ATM forward equity of $91.8 million, and $3.1 billion of availability under our $4.25 billion unsecured revolving credit facility, net of $1.1 billion of borrowing on the revolving credit facility and after deducting $67.3 million in borrowings under our commercial paper programs." - Reworded sentence: "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 facility or commercial paper programs, which are backstopped by our credit facility; •Short-term loans; •Asset dispositions; and •Credit investment repayments In addition to these sources of liquidity, we are exploring various capital diversification initiatives, including the establishment of a third-party private capital open-end fund." - Removed sentence: "28 28 28 Table of Contents Table of Contents" **Prior (2024):** As of December 31, 2023, we had $4.1 billion of liquidity, which consists of cash and cash equivalents of $232.9 million, including £46.1 million denominated in Sterling and €43.6 million denominated in Euro, unsettled ATM forward equity of $337.8 million, and $3.5 billion of availability under our $4.25 billion unsecured revolving credit facility, after deducting $764.4 million in borrowings under our commercial paper programs. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under these 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 cash provided by operating activities, borrowings under our revolving credit facility, short-term term loans, and under our commercial paper programs, and through public securities offerings. We expect to fund the next twelve months of obligations through a combination of the following: •Cash and cash equivalents; •Future cash flows from operations; •Issuances of common stock or debt; and •Additional borrowings under our revolving credit facility and our term loan (after deducting outstanding borrowings under our commercial paper programs). We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing capacity is sufficient to meet our liquidity needs for the next twelve months. We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our credit facility and commercial paper programs. 28 28 28 Table of Contents Table of Contents **Current (2025):** As of December 31, 2024, we had $3.7 billion of liquidity, which consists of cash and cash equivalents of $445.0 million, unsettled ATM forward equity of $91.8 million, and $3.1 billion of availability under our $4.25 billion unsecured revolving credit facility, net of $1.1 billion of borrowing on the revolving credit facility and after deducting $67.3 million in borrowings under our commercial paper programs. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under our commercial paper programs. Our primary cash obligations, for the current year and subsequent years, are included in the "Material Cash Requirements" table, which is presented later in this section. 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 facility or commercial paper programs, which are backstopped by our credit facility; •Short-term loans; •Asset dispositions; and •Credit investment repayments In addition to these sources of liquidity, we are exploring various capital diversification initiatives, including the establishment of a third-party private capital open-end fund. We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing capacity are sufficient to meet our liquidity needs for the next twelve months. We intend, however, to use permanent or long-term capital to fund property acquisitions and to repay future borrowings under our credit facility and commercial paper programs. --- ## Modified: Investments in Unconsolidated Entities **Key changes:** - Reworded sentence: "As of December 31, 2024, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million." **Prior (2024):** As of December 31, 2023, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million. 31 31 31 Table of Contents Table of Contents **Current (2025):** As of December 31, 2024, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million. 30 30 30 Table of Contents Table of Contents --- ## Modified: ATM Program **Key changes:** - Reworded sentence: "Under our current ATM program, which we entered into in August 2023, we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE at prevailing market prices or at negotiated prices or by any other methods permitted by applicable law." **Prior (2024):** As of December 31, 2023, there were approximately 6.2 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, representing approximately $337.8 million in expected net proceeds, which have been executed at a weighted average price of $54.70 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). During the year ended December 31, 2023, we settled approximately 91.7 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $5.4 billion of net proceeds. As of December 31, 2023, we had 81.3 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. **Current (2025):** Under our current ATM program, which we entered into in August 2023, we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE at prevailing market prices or at negotiated prices or by any other methods permitted by applicable law. As of December 31, 2024, there were approximately 1.8 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, representing approximately $91.8 million in expected net proceeds, which have been executed at a weighted average price of $51.80 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates). During the year ended December 31, 2024, we settled approximately 30.2 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $1.7 billion of net proceeds. 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. --- ## Modified: Property Expenses (reimbursable) **Key changes:** - Reworded sentence: "Property expenses (reimbursable) increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023 primarily due to an increase in portfolio size, resulting in higher common area maintenance, property taxes, and insurance expenses paid on behalf of our clients." **Prior (2024):** Property expenses (reimbursable) consist of reimbursable property taxes and operating costs paid on behalf of our clients. The increase in property expenses (reimbursable) for the year ended December 31, 2023 is proportional to overall portfolio growth. **Current (2025):** Property expenses (reimbursable) consist of reimbursable property taxes and operating costs paid on behalf of our clients. Property expenses (reimbursable) increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023 primarily due to an increase in portfolio size, resulting in higher common area maintenance, property taxes, and insurance expenses paid on behalf of our clients. --- ## Modified: Allocation of the Purchase Price of Real Estate Acquisitions **Key changes:** - Reworded sentence: "We evaluate whether or not substantially all of the value of acquired assets is concentrated in a single identifiable asset or group of identifiable assets to determine whether a transaction is accounted for as an asset acquisition or a business combination." - Reworded sentence: "Additionally, above-market rents on leases acquired through sale-leaseback transactions under which we are a lessor are accounted for as financing receivables amortizing over the lease term, while below-market rents on leases under which we are a lessor are accounted for as prepaid rent." - Added sentence: "36 36 36 Table of Contents Table of Contents" **Prior (2024):** Management must make significant assumptions in determining the fair value of assets acquired and liabilities assumed. When acquiring a property for investment purposes, we typically allocate the cost of real estate acquired, inclusive of transaction costs, to: (1) land, (2) building and improvements, and (3) identified intangible assets and liabilities, based in each case on their relative estimated fair values. Intangible assets and liabilities consist of above-market or below-market lease value and the value of in-place leases, as applicable. Additionally, above-market rents on certain leases under which we are a lessor are accounted for as financing receivables amortizing over the lease term, while below-market rents on certain leases under which we are a lessor are accounted for as prepaid rent. In an acquisition of multiple properties, we must also allocate the purchase price among the properties. The allocation of the purchase price is based on our assessment of estimated fair value of the land, building and improvements, and identified intangible assets and liabilities and is often based upon the various characteristics of the market where the property is located. In addition, any assumed mortgages are recorded at their estimated fair values. The estimated fair values of our mortgages payable have been calculated by discounting the future cash flows using applicable interest rates that have been adjusted for factors, such as industry type, client investment grade, maturity date, and comparable borrowings for similar assets. The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenue and expenses. **Current (2025):** Management must make significant assumptions in determining the fair value of assets acquired and liabilities assumed. We evaluate whether or not substantially all of the value of acquired assets is concentrated in a single identifiable asset or group of identifiable assets to determine whether a transaction is accounted for as an asset acquisition or a business combination. A majority of our acquisitions qualify as asset acquisitions and the transaction costs associated with those acquisitions are capitalized. However, for transactions that qualify as business combinations, such as the Merger, we expense the transaction costs and categorize them as merger, transaction, and other costs, net in our consolidated statements of income and comprehensive income. For business combinations, we recognize the amount of any purchase consideration that exceeds the fair value of all identified assets acquired and liabilities assumed as goodwill and may record measurement period adjustments within one year of the acquisition date as permitted under ASC 805, Business Combinations (for more details see note 2, Merger with Spirit Realty Capital, Inc. to our consolidated financial statements contained in this annual report). For asset acquisitions, we allocate the cost of real estate acquired, inclusive of transaction costs, to: (1) land, (2) building and improvements, and (3) identified intangible assets and liabilities, based in each case on their relative estimated fair values. For business combinations, all assets acquired and liabilities assumed are recorded at fair value. The difference between the purchase consideration and the aggregated fair value is recognized as goodwill or a gain on bargain purchase. Intangible assets and liabilities consist of above-market or below-market lease value and the value of in-place leases, as applicable. Additionally, above-market rents on leases acquired through sale-leaseback transactions under which we are a lessor are accounted for as financing receivables amortizing over the lease term, while below-market rents on leases under which we are a lessor are accounted for as prepaid rent. In an acquisition of multiple properties, we must also allocate the purchase price among the properties. The allocation of the purchase price is based on our assessment of estimated fair value of the land, building and improvements, and identified intangible assets and liabilities and is often based upon the various characteristics of the market where the property is located. In addition, any assumed mortgages are recorded at their estimated fair values. The estimated fair values of our mortgages payable have been calculated by discounting the future cash flows using applicable interest rates that have been adjusted for factors, such as industry type, client investment grade, maturity date, and comparable borrowings for similar assets. The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenue and expenses. 36 36 36 Table of Contents Table of Contents --- ## Modified: on variable rate debt **Key changes:** - Reworded sentence: "(1) Thereafter Total (2) Fair Value (3) (1)In January 2024, we entered into interest rate swaps on our 2023 term loans, which fixed our per annum interest rate at 4.9% until January 2026." - Reworded sentence: "44 44 44 Table of Contents Table of Contents At December 31, 2024, our outstanding mortgages payable, notes, and bonds had fixed interest rates." - Reworded sentence: "At December 31, 2024, a 1% change in interest rates on our variable-rate debt would change our interest rate costs by $11.3 million." **Prior (2024):** (1) (2) (3) Thereafter Totals (4) Fair Value (5) (1)In conjunction with our $250.0 million senior unsecured term loan, which matures in March 2024, we entered into an interest rate swap, and as of December 31, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8%. (2)The maturity date for our 2023 term loans reflects the closing of our previous twelve-month extension option and assumes the additional twelve-month extension available at the company's option is exercised. In conjunction with closing, we executed one-year variable-to-fixed interest rate swaps, which fix our per annum interest rate at 5.0% over the initial term. Accordingly, the 2023 term loans have been presented as fixed rate debt as of December 31, 2023 in the table above. (3)In January 2023, we issued $500.0 million of 5.05% senior unsecured notes due January 13, 2026, which were callable at par beginning on January 13, 2024. In conjunction with the pricing of these senior unsecured notes due January 2026, we executed three-year, fixed-to-variable interest rate swaps totaling $500.0 million, which are subject to the counterparties' right to terminate the swaps at any time following the 2026 notes par call date. (4)Excludes net premiums and discounts recorded on mortgages payable, net premiums recorded on notes payable, deferred financing costs on term loans, mortgages payable, notes payable, and the basis adjustment on interest rate swaps designated as fair value hedges on notes payable. 44 44 44 Table of Contents Table of Contents (5)We base the estimated fair value of our fixed rate mortgages and private senior notes payable at December 31, 2023, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread. We base the estimated fair value of the publicly traded fixed rate senior notes and bonds at December 31, 2023, on the indicative market prices and recent trading activity of our senior notes and bonds payable. We believe that the carrying values of the line of credit, commercial paper borrowings, and term loan balances reasonably approximate their estimated fair values at December 31, 2023. The table above incorporates only those exposures that exist as of December 31, 2023. It does not consider those exposures or positions that could arise after that date. As a result, our ultimate realized gain or loss, with respect to interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the time, and interest rates. At December 31, 2023, our outstanding mortgages payable, notes, and bonds had fixed interest rates. Interest on our credit facility and commercial paper borrowings and term loans is variable. However, the variable interest rate feature on our term loans have been mitigated by interest rate swap agreements. At December 31, 2023, a 1% change in interest rates on our variable-rate debt would change our interest costs by $12.6 million. **Current (2025):** (1) Thereafter Total (2) Fair Value (3) (1)In January 2024, we entered into interest rate swaps on our 2023 term loans, which fixed our per annum interest rate at 4.9% until January 2026. (2)Excludes net premiums and discounts recorded on mortgages payable, net premiums and discounts recorded on notes payable, and deferred financing costs on term loans, mortgages payable, notes payable. (3)We base the estimated fair value of our fixed rate mortgages and private senior notes payable at December 31, 2024, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread. We base the estimated fair value of the publicly traded fixed rate senior notes and bonds at December 31, 2024, on the indicative market prices and recent trading activity of our senior notes and bonds payable. We believe that the carrying values of the line of credit, commercial paper borrowings, and term loans reasonably approximate their estimated fair values at December 31, 2024. The table above incorporates only those exposures that exist as of December 31, 2024. It does not consider those exposures or positions that could arise after that date. As a result, our ultimate realized gain or loss, with respect to interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the time, and interest rates. 44 44 44 Table of Contents Table of Contents At December 31, 2024, our outstanding mortgages payable, notes, and bonds had fixed interest rates. Interest on our credit facility and commercial paper borrowings and term loans is variable. However, the variable interest rate feature on our term loans have been mitigated by interest rate swap agreements. At December 31, 2024, a 1% change in interest rates on our variable-rate debt would change our interest rate costs by $11.3 million. --- ## Modified: Property Expenses (excluding reimbursable) **Key changes:** - Reworded sentence: "Property expenses (excluding reimbursable) increased by $31.8 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to a higher number of properties available for lease compared with the same periods in 2023, in addition to acquisitions in 2023 and 2024 in which the lease terms do not obligate the tenant to pay certain expenses, which resulted in higher repairs and maintenance costs, property insurance and taxes." **Prior (2024):** Property expenses (excluding reimbursable) consist of costs associated with properties available for lease, non-net-leased properties and general portfolio expenses and include, but are not limited to, property taxes, maintenance, insurance, utilities, property inspections and legal fees. The increase in property expenses (excluding reimbursable) for the year ended December 31, 2023 as compared with the same period in 2022 is primarily impacted by property tax and property management expenses. **Current (2025):** Property expenses (excluding reimbursable) consist of costs associated with properties available for lease, non-net-leased properties and general portfolio expenses and include, but are not limited to, property taxes, maintenance, insurance, utilities, property inspections and legal fees. Property expenses (excluding reimbursable) increased by $31.8 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to a higher number of properties available for lease compared with the same periods in 2023, in addition to acquisitions in 2023 and 2024 in which the lease terms do not obligate the tenant to pay certain expenses, which resulted in higher repairs and maintenance costs, property insurance and taxes. --- ## Modified: The following discussion and analysis reflect our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023. **Key changes:** - Reworded sentence: "GENERAL Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies." **Prior (2024):** GENERAL Realty Income, The Monthly Dividend Company®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats® index for having increased its dividend every year for over 25 consecutive years. We invest in people and places to deliver dependable monthly dividends that increase over time. We are structured as a REIT requiring us annually to distribute at least 90% of our taxable income (excluding net capital gains) in the form of dividends to our stockholders. The monthly dividends are supported by the cash flow generated from real estate owned under long-term net lease agreements with our commercial clients. As of December 31, 2023, we owned or held interests in a diversified portfolio of 13,458 properties located in all 50 U.S. states, Puerto Rico, the U.K., France, Germany, Ireland, Italy, Portugal, and Spain, with approximately 272.1 million square feet of leasable space to clients doing business in 86 separate industries. Of the 13,458 properties in the portfolio at December 31, 2023, 13,197, or 98.1%, are single-client properties, of which 13,007 were leased, and the remaining are multi-client properties. Our total portfolio has a weighted average remaining lease term (excluding rights to extend a lease at the option of our client) of approximately 9.8 years. 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 $274.2 million, $184.7 million and $104.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. **Current (2025):** GENERAL Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies. Founded in 1969, we invest in diversified commercial real estate and, as of December 31, 2024, have a portfolio of over 15,600 properties in all 50 U.S. states, the U.K., and six other countries in Europe. We are known as "The Monthly Dividend Company®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 656 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for the last 30 consecutive years. As of December 31, 2024, we owned or held interests in 15,621 properties, with approximately 339.4 million square feet of leasable space leased to 1,565 clients doing business in 89 separate industries. Of the 15,621 properties in our portfolio as of December 31, 2024, 15,316, or 98.0%, were single-client properties, and the remaining were multi-client properties. Our total portfolio had a weighted average remaining lease term (excluding rights to extend a lease at the option of the client) of approximately 9.3 years. Total portfolio annualized contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables) on our leases as of December 31, 2024 was $4.97 billion. As of December 31, 2024, approximately 32.4% of our total portfolio annualized contractual rent came from properties leased to our investment grade clients, their subsidiaries or affiliated companies. As of December 31, 2024, our top 20 clients (based on percentage of total portfolio annualized contractual rent) represented approximately 36.4% of our annualized rent and 10 of these clients had investment grade credit ratings or were subsidiaries or affiliates of investment grade companies. Approximately 91% of our annualized retail contractual rent as of December 31, 2024, was derived from our clients with a service, non-discretionary, and/or low price point component to their business. 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 $303.1 million, $274.2 million, and $184.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. --- ## Modified: We may engage in development, speculative development, or expansion projects or invest in new asset classes, which would subject us to additional risks that could negatively impact our operations. **Key changes:** - Reworded sentence: "The inability to successfully complete development, speculative development, expansion or other value-added projects or to complete them on a timely basis could adversely affect our business and results of operations." - Reworded sentence: "Such risks include: •When investing in new assets or transaction structures, we will be exposed to the risk that those assets or structures, or the income generated thereby, will affect our ability to meet the requirements to maintain our REIT status, or will subject us to additional regulatory requirements or limitations; •Our partners or investors may share certain approval rights over major decisions or have the ability to appoint persons to governing bodies; •Our partners or investors may seek to exit or redeem their investment, and may do so simultaneously, causing the venture or fund to seek capital to satisfy these requests on less than optimal terms; •If our partners or investors fail to fund their share of any required capital contributions, then we may choose to contribute such capital or the venture or fund may have to raise additional capital or incur indebtedness on less than optimal terms; •Our partners or investors may have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the venture or fund and adversely impact our consolidated financial position or results of operations; •The venture or fund or other governing agreements may restrict the transfer of an interest in the co-investment venture or fund or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; •Our relationships with our partners or investors are likely to be contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, the venture or fund may terminate or we may not continue to invest in or manage the assets underlying such relationships resulting in a decrease in our assets under management and a reduction in fee revenues; and •Disputes between us and our partners or investors may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture or fund to additional risk." **Prior (2024):** We may engage in development, speculative development, or other expansion projects, which could require us to raise additional capital and obtain additional state and local permits. A decision by any governmental agency not to issue a required permit or substantial delays in the permitting process could cause us to incur penalties, delay us from receiving rental payments or result in us receiving reduced rental payments, or prevent us from pursuing the development, speculative development, or expansion project altogether. Additionally, any such new development, speculative development, or expansion project may not operate at designed capacity or may cost more to operate than we expect. The inability to successfully complete development, speculative development, or expansion projects or to complete them on a timely basis could adversely affect our business and results of operations. 15 15 15 Table of Contents Table of Contents We have recently increased on investments in assets and transaction structures that are outside of our traditional business, including entering into new asset classes, such as casinos and vertical farms, and entering into (or expanding our use of) new transaction structures, such as joint ventures, lending, and increased exploration of sale-leaseback transactions. In addition, in the future, we may invest in new or different assets or enter into new transaction structures that may or may not be closely related to our current business. These new assets and transaction structures may have new, different or increased risks than what we are currently exposed to in our business and we may not be able to manage these risks successfully. Additionally, when investing in such new assets or transaction structures, we will be exposed to the risk that those assets or structures, or the income generated thereby, will affect our ability to meet the requirements to maintain our REIT status, or will subject us to additional regulatory requirements or limitations. If we are not able to successfully manage the risks associated with such new assets, it could have an adverse effect on our business, results of operations and financial condition. **Current (2025):** We may engage in development, speculative development, or other expansion projects, which could require us to raise additional capital and obtain additional state and local permits. A decision by any governmental agency not to issue a required permit or substantial delays in the permitting process could cause us to incur penalties, delay us from receiving rental payments or result in us receiving reduced rental payments, or prevent us from pursuing the development, speculative development, or expansion project altogether. Additionally, any such new development, speculative development, or expansion project may not operate at designed capacity or may cost more to operate than we expect. The inability to successfully complete development, speculative development, expansion or other value-added projects or to complete them on a timely basis could adversely affect our business and results of operations. We have and may continue to make investments and utilize transaction structures that are outside of our traditional business, including entering into new asset classes, such as casinos and vertical farms, and entering into (or expanding our use of) new transaction structures, such as strategic co-investment ventures, joint ventures, funds, lending, and increased exploration of sale-leaseback transactions. We invest and may continue to invest in new or different assets or enter into new transaction structures that may or may not be closely related to our current business and which could require new or additional processes, controls, systems and personnel. These new assets and transaction structures may have new, different or increased risks than what we are currently exposed to in our business and we may not be able to manage these risks successfully. Such risks include: •When investing in new assets or transaction structures, we will be exposed to the risk that those assets or structures, or the income generated thereby, will affect our ability to meet the requirements to maintain our REIT status, or will subject us to additional regulatory requirements or limitations; •Our partners or investors may share certain approval rights over major decisions or have the ability to appoint persons to governing bodies; •Our partners or investors may seek to exit or redeem their investment, and may do so simultaneously, causing the venture or fund to seek capital to satisfy these requests on less than optimal terms; •If our partners or investors fail to fund their share of any required capital contributions, then we may choose to contribute such capital or the venture or fund may have to raise additional capital or incur indebtedness on less than optimal terms; •Our partners or investors may have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the venture or fund and adversely impact our consolidated financial position or results of operations; •The venture or fund or other governing agreements may restrict the transfer of an interest in the co-investment venture or fund or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; •Our relationships with our partners or investors are likely to be contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, the venture or fund may terminate or we may not continue to invest in or manage the assets underlying such relationships resulting in a decrease in our assets under management and a reduction in fee revenues; and •Disputes between us and our partners or investors may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture or fund to additional risk. If we are not able to successfully manage the risks associated with such new assets, it could have an adverse effect on our business, results of operations and financial condition. --- ## Modified: Location of Gain Recognized in Income **Key changes:** - Reworded sentence: "Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net" **Prior (2024):** Foreign currency and derivative (loss) gain, net Foreign currency and derivative (loss) gain, net Foreign currency and derivative (loss) gain, net **Current (2025):** Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net Foreign currency and derivative gain (loss), net --- ## Modified: 11. Noncontrolling Interests **Key changes:** - Reworded sentence: "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." - Reworded sentence: "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." - Reworded sentence: "73 73 73 Table of Contents Table of Contents The following table represents the change in the carrying value of all noncontrolling interests through December 31, 2024 (in thousands): Realty Income, L.P." **Prior (2024):** As of December 31, 2023, we have seven entities with noncontrolling interests that we consolidate, including an operating partnership, Realty Income, L.P., and interests in consolidated property partnerships not wholly-owned by us. At December 31, 2023, outstanding common partnership units in Realty Income, L.P. represented 6.9% ownership interest in Realty Income L.P. We hold the remaining 93.1% 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 due to the Orion Divestiture, subject to certain exceptions. Prior to the Orion Divestiture, the conversion ratio was one to one. These issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate. We determined that the units meet the requirements to qualify for presentation as permanent equity. The following table represents the change in the carrying value of all noncontrolling interests through December 31, 2023 (in thousands): Realty Income, L.P. units (1)OtherNoncontrollingInterestsTotalCarrying value at December 31, 2021$62,416 $14,410 $76,826 Contributions (2)51,221 - 51,221 Reallocation of equity3,210 - 3,210 Distributions(3,818)(307)(4,125)Allocation of net income2,772 236 3,008 Carrying value at December 31, 2022$115,801 $14,339 $130,140 Contributions (3) - 40,097 40,097 Distributions (4)(5,663)(3,677)(9,340)Allocation of net income3,934 671 4,605 Carrying value at December 31, 2023$114,072 $51,430 $165,502 **Current (2025):** As of December 31, 2024, we have ten entities with noncontrolling interests that we consolidate, including an operating partnership, Realty Income, L.P., and interests in consolidated property partnerships not wholly-owned by us. At December 31, 2024, outstanding common partnership units in Realty Income, L.P. represented 9.95% ownership interest in Realty Income L.P. We hold the remaining 90.05% interest and consolidate the entity. None of our common partnership units have voting rights. Common partnership units are entitled to monthly distributions equal to the amount paid to common stockholders of Realty Income, and are redeemable in cash or Realty Income common stock, at our option, and at a conversion ratio of 1.02934. These issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate. We determined that the units meet the requirements to qualify for presentation as permanent equity. 73 73 73 Table of Contents Table of Contents The following table represents the change in the carrying value of all noncontrolling interests through December 31, 2024 (in thousands): Realty Income, L.P. units (1)Other Noncontrolling InterestsTotalCarrying 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 income3,934 671 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 income5,898 671 6,569 Issuance of common partnership units54,643 (7,390)47,253 Carrying value at December 31, 2024$167,803 $43,145 $210,948 --- ## Modified: Market Information **Key changes:** - Reworded sentence: "Our common stock is traded on the New York Stock Exchange ("NYSE") under the ticker symbol "O." Holders There were approximately 13,200 registered holders of record of our common stock as of January 30, 2025." - Reworded sentence: "22 22 22 Table of Contents Table of Contents" **Prior (2024):** Our common stock is traded on the NYSE under the ticker symbol "O." Holders There were approximately 13,800 registered holders of record of our common stock as of January 31, 2024. This figure does not reflect the beneficial ownership of shares of our common stock. 23 23 23 Table of Contents Table of Contents **Current (2025):** Our common stock is traded on the New York Stock Exchange ("NYSE") under the ticker symbol "O." Holders There were approximately 13,200 registered holders of record of our common stock as of January 30, 2025. This figure does not reflect the beneficial ownership of shares of our common stock. 22 22 22 Table of Contents Table of Contents --- ## Modified: Gain on Sales of Real Estate **Key changes:** - Reworded sentence: "The following summarizes our property dispositions (dollars in millions): Years ended December 31,20242023Number of properties sold294 121 Net sales proceeds$589.5 $117.4 Gain on sales of real estate$117.3 $25.7" **Prior (2024):** The following summarizes our property dispositions (dollars in millions): Years ended December 31,20232022Number of properties sold121 170 Net sales proceeds$117.4 $436.1 Gain on sales of real estate$25.7 $103.0 35 35 35 Table of Contents Table of Contents **Current (2025):** The following summarizes our property dispositions (dollars in millions): Years ended December 31,20242023Number of properties sold294 121 Net sales proceeds$589.5 $117.4 Gain on sales of real estate$117.3 $25.7 --- ## Modified: Note Issuances **Key changes:** - Added sentence: "In September 2024, we issued £350.0 million of 5.000% senior unsecured notes due October 2029 and £350.0 million of 5.250% senior unsecured notes due September 2041." - Added sentence: "In August 2024, we issued $500.0 million of 5.375% senior unsecured notes due September 2054." - Reworded sentence: "See note 10, Notes Payable, to the consolidated financial statements contained in this annual report for further details." **Prior (2024):** In January 2024, we issued $450.0 million of 4.750% senior unsecured notes due February 2029 and $800.0 million of 5.125% senior unsecured notes due February 2034. In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit Realty, L.P. ("Spirit OP"). See note 21, Subsequent Events, to the consolidated financial statements for further details. In December 2023, we issued £300.0 million of 5.750% senior unsecured notes due December 2031 and £450.0 million of 6.000% senior unsecured notes due December 2039. In July 2023, we issued €550.0 million of 4.875% senior unsecured notes due July 2030 and €550.0 million of 5.125% senior unsecured notes due July 2034. In April 2023, we issued $400.0 million of 4.700% senior unsecured notes due December 2028 and $600.0 million of 4.900% senior unsecured notes due July 2033. In January 2023, we issued $500.0 million of 5.050% senior unsecured notes due January 2026 and $600.0 million of 4.850% senior unsecured notes due March 2030. See note 10. Notes Payable, to the consolidated financial statements for further details. **Current (2025):** In September 2024, we issued £350.0 million of 5.000% senior unsecured notes due October 2029 and £350.0 million of 5.250% senior unsecured notes due September 2041. In August 2024, we issued $500.0 million of 5.375% senior unsecured notes due September 2054. In January 2024, we issued $450.0 million of 4.750% senior unsecured notes due February 2029 and $800.0 million of 5.125% senior unsecured notes due February 2034. In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit Realty, L.P. ("Spirit OP"). See note 10, Notes Payable, to the consolidated financial statements contained in this annual report for further details. --- ## Modified: Fair Value - asset (liability) **Key changes:** - Reworded sentence: "as of Interest rate swaps (4) Interest rate swaptions (5) Cross-currency swaps - Fair Value Cross-currency swaps - Net Investment Currency exchange swaps (1)This column represents the number of instruments outstanding as of December 31, 2024." - Reworded sentence: "(8)Weighted average forward GBP-USD exchange rate of 1.29." - Reworded sentence: "78 78 78 Table of Contents Table of Contents The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands): Years ended December 31,Derivatives in Cash Flow Hedging Relationships202420232022Cross-currency swaps$ - $ - $(5,091)Interest rate swaps(5,575)(11,171)98,310 Foreign currency forwards 6,546 (13,349)8,540 Interest rate swaptions1,471 1,858 - Total derivatives in cash flow hedging relationships$2,442 $(22,663)$101,759 Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair Value$(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 RelationshipsCross-currency swaps - Net Investment$13,569 $(4,272)$ - Foreign currency debt2,315 - - 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 RelationshipsLocation of Gain Recognized in Income202420232022Cross-currency swapsForeign currency and derivative gain (loss), net$ - $ - $30,814 Interest rate swapsInterest31,385 15,794 (4,487)Foreign currency forwardsForeign currency and derivative gain (loss), net3,831 4,251 2,139 Interest rate swaptionsInterest(13)(6,859) - Total derivatives in cash flow hedging relationships$35,203 $13,186 $28,466 Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair ValueForeign 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 RelationshipsCross-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)" **Prior (2024):** Interest rate swaps Cross-currency swaps - Fair Value (5) Cross-currency swaps - Net Investment (5) Currency exchange swaps Cross-currency swaps (5) (1)This column represents the number of instruments outstanding as of December 31, 2023. (2)Weighted average strike rate is calculated using the notional value as of December 31, 2023. (3)This column represents maturity dates for instruments outstanding as of December 31, 2023. (4)Represent purchased payer swaptions with a strike rate of 3.75% and sold payer swaptions with a strike rate of 4.25%. (5)In October 2022, we entered into six cross-currency swaps to exchange €612 million for $600 million maturing in October 2032. We redesignated $280 million of three cross-currency swaps as net investment hedges in December 2023. (6)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.681%. (7)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.716%. (8)Weighted average forward GBP-USD exchange rate of 1.30. (9)Weighted average exchange rates of 1.27 for GBP-USD and 0.86 for EUR-GBP. (9) We measure our derivatives at fair value and include the balances within 'Other assets, net' and 'Accounts payable and accrued expenses' on our consolidated balance sheets. We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default. 76 76 76 Table of Contents Table of Contents The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands): Years ended December 31,Derivatives in Cash Flow Hedging Relationships202320222021Cross-currency swaps$ - $(5,091)$8,232 Interest rate swaps(11,171)98,310 34,659 Foreign currency forwards (13,349)8,540 7,557 Interest rate swaptions1,857 - - Total derivatives in cash flow hedging relationships$(22,663)$101,759 $50,448 Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair Value$(14,602)$(4,705)$ - Total derivatives in fair value hedging relationships$(14,602)$(4,705)$ - Total unrealized (loss) gain on derivatives, net$(37,265)$97,054 $50,448 Derivatives in Net Investment Hedging RelationshipsCross-currency swaps - Net Investment$(4,272)$ - $ - Total unrealized loss recorded in foreign currency translation adjustment$(4,272)$ - $ - **Current (2025):** as of Interest rate swaps (4) Interest rate swaptions (5) Cross-currency swaps - Fair Value Cross-currency swaps - Net Investment Currency exchange swaps (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 $200.0 million notional in December 2024 because the forecasted transaction did not occur. (6)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.681%. (7)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.716%. (8)Weighted average forward GBP-USD exchange rate of 1.29. (9)Weighted average exchange rates of 0.83 for EUR-GBP and 1.27 for GBP-USD. (9) We measure our derivatives at fair value and include the balances within 'Other assets, net' and 'Accounts payable and accrued expenses' on our consolidated balance sheets. We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default. 78 78 78 Table of Contents Table of Contents The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands): Years ended December 31,Derivatives in Cash Flow Hedging Relationships202420232022Cross-currency swaps$ - $ - $(5,091)Interest rate swaps(5,575)(11,171)98,310 Foreign currency forwards 6,546 (13,349)8,540 Interest rate swaptions1,471 1,858 - Total derivatives in cash flow hedging relationships$2,442 $(22,663)$101,759 Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair Value$(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 RelationshipsCross-currency swaps - Net Investment$13,569 $(4,272)$ - Foreign currency debt2,315 - - 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 RelationshipsLocation of Gain Recognized in Income202420232022Cross-currency swapsForeign currency and derivative gain (loss), net$ - $ - $30,814 Interest rate swapsInterest31,385 15,794 (4,487)Foreign currency forwardsForeign currency and derivative gain (loss), net3,831 4,251 2,139 Interest rate swaptionsInterest(13)(6,859) - Total derivatives in cash flow hedging relationships$35,203 $13,186 $28,466 Derivatives in Fair Value Hedging RelationshipsCross-currency swaps - Fair ValueForeign 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 RelationshipsCross-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) --- ## Modified: Equity in earnings in unconsolidated entities **Key changes:** - Reworded sentence: "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." - Reworded sentence: "66 66 66 Table of Contents Table of Contents D." **Prior (2024):** A. Bellagio Las Vegas Joint Venture Interests In October 2023, we invested $951.4 million to acquire common and preferred interests from Blackstone Real Estate Trust, Inc. ("BREIT") in a joint venture that owns a 95.0% interest in the real estate of The Bellagio Las Vegas. The investment included $301.4 million of common equity in the joint venture in exchange for an indirect interest of 21.9% in the property and a $650.0 million preferred equity interest in the joint venture. The unconsolidated entity had total debt outstanding of $3.0 billion as of December 31, 2023, all of which was non-recourse to us with limited customary exceptions. The Company's preferred equity investment entitles it to certain preferential cumulative distributions out of operating and capital proceeds pursuant to the terms and conditions of the preferred equity. There is no maturity date on the preferred equity investment, which bears interest of 8.1%, payable monthly in arrears in cash, with rate increases commencing in year 7. BREIT may cause the joint venture to redeem all or a portion of the preferred equity investment, and Realty Income may cause the joint venture to redeem all or a portion of the preferred equity investment if BREIT or its affiliates cease to control the joint venture, in each case, for a cash payment equaling the sum of the amount to be redeemed plus, prior to the first anniversary of the transaction, a redemption fee of 3.0%, or, after the first anniversary and prior to the fourth anniversary of the transaction, a redemption fee of 2.0%. Interest income is determined by applying the interest rate to the sum of the outstanding balance of preferred equity and any accrued but unpaid interests. During the year ended December 31, 2023, we recognized interest income of $13.0 million included within 'Other revenue' in our consolidated statements of income and comprehensive income. 65 65 65 Table of Contents Table of Contents 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. B. Data Center Development Joint Venture In November 2023, we established a joint venture with Digital Realty Trust, Inc. ("Digital Realty") to support the development of two build-to-suit data centers in Northern Virginia. We invested $201.2 million to acquire an 80.0% equity interest in the venture, while Digital Realty maintains a 20.0% interest. We have determined that this joint venture is a VIE. While we have an 80.0% interest in the joint venture, we are not the primary beneficiary because we do not have power to direct activities that significantly impact the joint venture's economic performance as we were not engaged when the joint venture partner initially developed the construction plan and entered into the lease agreement. Digital Realty is the managing member, and we do not have substantive kick-out rights. We will continuously evaluate whether we are the primary beneficiary as the power to direct activities that most significantly affect economic performance can change over the life of the joint venture. Our maximum exposure to loss associated with this VIE is limited to our equity investment and our pro rata share of the remaining $117.7 million of estimated development costs for the first phase of the project. C. Industrial Partnerships All seven assets held by our industrial partnerships were sold during the year ended December 31, 2022. As the portion of the net proceeds applied to our investment basis that we expected to receive at closing was less than our $121.4 million carrying amount of investment in unconsolidated entities, we recognized an other than temporary impairment of $8.5 million during the year ended December 31, 2022. The other than temporary impairments are included in 'Equity in income and impairment of investment in unconsolidated entities' in our consolidated statements of income and comprehensive income for the periods presented. **Current (2025):** A. Passport Park Joint Venture In November 2024, we established a joint venture with Trammell Crow Company ("TCC") to develop and operate three industrial facilities in Irving, Texas. As of December 31, 2024, we have invested $6.2 million, including $5.7 million in cash, in exchange for a 95.0% equity interest in the joint venture, including preferred equity. We have committed to investing an additional $158.0 million to finance the development. We have determined that we are not the primary beneficiary of this VIE because power to direct all activities significantly affecting the joint venture's economic performance is shared. TCC is the managing member, and we do not have substantive kick-out rights. We will continuously evaluate whether we are the primary beneficiary as power to direct significant activities of the VIE can change over the life of the joint venture. Our maximum exposure to loss is limited to our common and preferred equity investments, including the committed development funding. B. Data Center Joint Venture We own an 80.0% equity interest in a joint venture that we formed with Digital Realty Trust, Inc. in November 2023. This joint venture owns and operates two data centers. As we do not control this VOE, we account for it under the equity method. As of December 31, 2024, each partner funded its pro rata share of the remaining estimated development cost for the first phase of the project, which was completed during 2024. C. Bellagio Las Vegas Joint Venture Interests The joint venture we formed with Blackstone Real Estate Income Trust owns a 95.0% equity interest in the real estate of The Bellagio Las Vegas. We made an initial investment in October 2023, including $301.4 million of common equity for an indirect interest of 21.9% in the property and a $650.0 million preferred equity interest. During the years ended December 31, 2024 and 2023, we recognized interest income of $52.8 million and $13.0 million for 8.1% preferential cumulative distributions, included within 'Other' revenue in our consolidated statements of income and comprehensive income. The unconsolidated entity had total debt outstanding of $3.0 billion as of December 31, 2024, all of which was non-recourse to us with limited customary exceptions. We have determined that this joint venture is a VIE, and we are not the primary beneficiary as we do not have power to direct activities that most significantly impact the joint venture's economic performance. As a holder of preferred interests, we do not receive any additional voting rights, nor do we have conversion and redemption rights. Our maximum exposure to loss associated with this VIE is limited to our common and preferred equity investments. 66 66 66 Table of Contents Table of Contents D. Industrial Partnerships All seven assets held by our industrial partnerships were sold during the year ended December 31, 2022, resulting in the recognition of an other-than-temporary impairment of $8.5 million, which was included in 'Equity in earnings of unconsolidated entities' for the year ended December 31, 2022. During the years ended December 31, 2024 and 2023, equity in earnings was primarily related to the resolution of income tax disputes and resulting distribution of cash the partnership had reserved for possible tax payments. --- ## Modified: Capitalization **Key changes:** - Reworded sentence: "As of December 31, 2024, our total capitalization was $74.9 billion." **Prior (2024):** As of December 31, 2023, our total market capitalization was $65.4 billion. Total market capitalization consisted of $43.3 billion of common equity (based on the December 31, 2023 closing price on the NYSE of $57.42 and assuming the conversion of common units of Realty Income, L.P.) and total outstanding borrowings of $22.1 billion on our revolving credit facility, commercial paper, term loans, mortgages payable, senior unsecured notes and bonds, and our proportionate share of unconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums). Our total debt to market capitalization was 33.8% at December 31, 2023. **Current (2025):** As of December 31, 2024, our total capitalization was $74.9 billion. Total capitalization consisted of $47.8 billion of common equity (based on the December 31, 2024 closing price on the NYSE of $53.41 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $27.2 billion on our revolving credit facility, commercial paper, term loans, mortgages payable, senior unsecured notes and bonds, and our proportionate share of unconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums). Our total debt to capitalization was 36.3% at December 31, 2024. 27 27 27 Table of Contents Table of Contents --- ## Modified: 5. Investments in Unconsolidated Entities **Key changes:** - Reworded sentence: "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 PropertiesCarrying Amount (1) of Investment as of As of December 31, 2024December 31, 2024December 31, 2023Data Center Joint Venture80.0%2$299,165 $226,021 Bellagio Las Vegas Joint Venture - Common Equity Interest21.9%1274,057 296,097 Bellagio Las Vegas Joint Venture - Preferred Equity Interestn/an/a650,000 650,000 Passport Park Joint Venture (2)95.0%36,477 - Industrial Partnershipsn/an/a - - Total investment in unconsolidated entities$1,229,699 $1,172,118" **Prior (2024):** The following is a summary of our investments in unconsolidated entities as of December 31, 2023 and 2022 (in thousands): Ownership % Number of PropertiesCarrying Amount(1) of Investment as of InvestmentAs of December 31, 202312/31/202312/31/2022Bellagio Las Vegas Joint Venture - Common Equity Interest21.9%1$296,097 $ - Bellagio Las Vegas Joint Venture - Preferred Equity Interestn/an/a650,000 - Data Center Development Joint Venture80.0%2226,021 - Industrial Partnerships20.0% - - - Total investment in unconsolidated entities$1,172,118 $ - **Current (2025):** 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 PropertiesCarrying Amount (1) of Investment as of As of December 31, 2024December 31, 2024December 31, 2023Data Center Joint Venture80.0%2$299,165 $226,021 Bellagio Las Vegas Joint Venture - Common Equity Interest21.9%1274,057 296,097 Bellagio Las Vegas Joint Venture - Preferred Equity Interestn/an/a650,000 650,000 Passport Park Joint Venture (2)95.0%36,477 - Industrial Partnershipsn/an/a - - Total investment in unconsolidated entities$1,229,699 $1,172,118 --- ## Modified: CONSOLIDATED STATEMENTS OF CASH FLOWS **Key changes:** - Reworded sentence: "(in thousands) Years ended December 31,202420232022CASH FLOWS FROM OPERATING ACTIVITIESNet income$867,341 $876,914 $872,416 Adjustments to net income:Depreciation and amortization2,395,644 1,895,177 1,670,389 Amortization of share-based compensation57,493 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 payable30 (12,803)(13,622)Amortization of net premiums on notes payable(3,309)(60,657)(62,989)Amortization of deferred financing costs23,939 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 entities21,038 5,807 1,605 Provisions for impairment425,833 87,082 25,860 Deferred income taxes3,552 - - Change in assets and liabilitiesAccounts receivable and other assets28,082 (111,286)(29,524)Accounts payable, accrued expenses and other liabilities2,607 285,293 (5,290)Net cash provided by operating activities3,573,276 2,958,769 2,563,856 CASH FLOWS FROM INVESTING ACTIVITIESInvestment 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 estate589,450 117,354 436,115 Return of investment from unconsolidated entities - 3,927 1,401 Net proceeds from sale of unconsolidated entities - - 108,088 Proceeds from note receivable57,300 - 5,867 Insurance proceeds received2,788 27,279 49,070 Non-refundable escrow deposits(225)(200)(5,667)Net cash acquired in merger93,683 - - Net cash used in investing activities(3,342,883)(9,354,854)(8,387,076)CASH FLOWS FROM FINANCING ACTIVITIESCash 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 programs36,887,003 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 issued2,657,925 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 plan11,812 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 cash203,331 65,294 (105,488)Cash, cash equivalents and restricted cash, beginning of period292,175 226,881 332,369 Cash, cash equivalents and restricted cash, end of period$495,506 $292,175 $226,881 For supplemental disclosures, see note 19, Supplemental Disclosures of Cash Flow Information." **Prior (2024):** (in thousands) Years ended December 31,202320222021CASH FLOWS FROM OPERATING ACTIVITIESNet income$876,914 $872,416 $360,747 Adjustments to net income:Depreciation and amortization1,895,177 1,670,389 897,835 Amortization of share-based compensation26,227 21,617 41,773 Non-cash revenue adjustments(62,029)(57,009)(23,380)(Gain) loss on extinguishment of debt - (367)97,178 Amortization of net premiums on mortgages payable(12,803)(13,622)(3,498)Amortization of net premiums on notes payable(60,657)(62,989)(10,349)Amortization of deferred financing costs26,670 15,613 12,333 (Gain) loss on interest rate swaps(7,189)718 2,905 Foreign currency and unrealized derivative loss, net37,776 220,948 27,223 Gain on sales of real estate(25,667)(102,957)(55,798)Equity in income and impairment of investment in unconsolidated entities(2,546)6,448 (1,106)Distributions from unconsolidated entities5,807 1,605 365 Provisions for impairment87,082 25,860 38,967 Change in assets and liabilitiesAccounts receivable and other assets(111,286)(29,524)(38,292)Accounts payable, accrued expenses and other liabilities285,293 (5,290)(24,714)Net cash provided by operating activities2,958,769 2,563,856 1,322,189 CASH FLOWS FROM INVESTING ACTIVITIESInvestment in real estate(8,053,595)(8,886,436)(6,313,076)Improvements to real estate, including leasing costs(68,692)(95,514)(19,080)Investment in unconsolidated entities(1,179,306) - - Investment in loans(201,621) - - Proceeds from sales of real estate117,354 436,115 250,536 Return of investment from unconsolidated entities3,927 1,401 38,345 Net proceeds from sale of unconsolidated entities - 108,088 - Proceeds from note receivable - 5,867 - Insurance proceeds received27,279 49,070 - Non-refundable escrow deposits(200)(5,667)(28,390)Net cash paid in merger - - (366,030)Net cash used in investing activities(9,354,854)(8,387,076)(6,437,695)CASH FLOWS FROM FINANCING ACTIVITIESCash distributions to common stockholders(2,111,793)(1,813,431)(1,169,026)Borrowings on line of credit and commercial paper programs77,338,040 28,539,299 9,082,206 Payments on line of credit and commercial paper programs(79,398,193)(27,434,617)(7,508,332)Proceeds from term loan 1,029,383 - - Proceeds from notes payable issued4,239,745 2,154,662 1,033,387 Principal payment on notes payable - - (1,700,000)Principal payments on mortgages payable(22,015)(312,234)(66,575)Payments upon extinguishment of debt - - (96,583)Proceeds from common stock offerings, net 5,439,462 4,556,028 4,442,725 Proceeds from dividend reinvestment and stock purchase plan11,519 11,654 11,232 Distributions to noncontrolling interests(7,725)(3,935)(1,707)Net receipts on derivative settlements7,853 79,763 3,266 Debt issuance costs(81,898)(34,156)(13,405)Net cash received from Orion Divestiture - - 593,484 Other items, including shares withheld upon vesting(7,022)(4,790)(33,552)Net cash provided by financing activities6,437,356 5,738,243 4,577,120 Effect of exchange rate changes on cash and cash equivalents24,023 (20,511)20,076 Net increase (decrease) in cash, cash equivalents and restricted cash65,294 (105,488)(518,310)Cash, cash equivalents and restricted cash, beginning of period226,881 332,369 850,679 Cash, cash equivalents and restricted cash, end of period$292,175 $226,881 $332,369 For supplemental disclosures, see note 18, Supplemental Disclosures of Cash Flow Information. **Current (2025):** (in thousands) Years ended December 31,202420232022CASH FLOWS FROM OPERATING ACTIVITIESNet income$867,341 $876,914 $872,416 Adjustments to net income:Depreciation and amortization2,395,644 1,895,177 1,670,389 Amortization of share-based compensation57,493 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 payable30 (12,803)(13,622)Amortization of net premiums on notes payable(3,309)(60,657)(62,989)Amortization of deferred financing costs23,939 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 entities21,038 5,807 1,605 Provisions for impairment425,833 87,082 25,860 Deferred income taxes3,552 - - Change in assets and liabilitiesAccounts receivable and other assets28,082 (111,286)(29,524)Accounts payable, accrued expenses and other liabilities2,607 285,293 (5,290)Net cash provided by operating activities3,573,276 2,958,769 2,563,856 CASH FLOWS FROM INVESTING ACTIVITIESInvestment 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 estate589,450 117,354 436,115 Return of investment from unconsolidated entities - 3,927 1,401 Net proceeds from sale of unconsolidated entities - - 108,088 Proceeds from note receivable57,300 - 5,867 Insurance proceeds received2,788 27,279 49,070 Non-refundable escrow deposits(225)(200)(5,667)Net cash acquired in merger93,683 - - Net cash used in investing activities(3,342,883)(9,354,854)(8,387,076)CASH FLOWS FROM FINANCING ACTIVITIESCash 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 programs36,887,003 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 issued2,657,925 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 plan11,812 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 cash203,331 65,294 (105,488)Cash, cash equivalents and restricted cash, beginning of period292,175 226,881 332,369 Cash, cash equivalents and restricted cash, end of period$495,506 $292,175 $226,881 For supplemental disclosures, see note 19, Supplemental Disclosures of Cash Flow Information. --- ## Modified: Increases in Monthly Dividends to Common Stockholders **Key changes:** - Reworded sentence: "We have continued our 56-year history of paying monthly dividends." **Prior (2024):** We have continued our 55-year history of paying monthly dividends. In addition, we increased the dividend five times during 2023 and once during 2024. As of February 2024, we have paid 105 consecutive quarterly dividend increases and increased the dividend 123 times since our listing on the NYSE in 1994. 2023 Dividend increasesMonth DeclaredMonth PaidMonthly Dividend per shareIncrease per share1st increaseDec 2022Jan 2023$0.2485 $0.0005 2nd increaseFeb 2023Mar 2023$0.2545 $0.0060 3rd increaseMar 2023Apr 2023$0.2550 $0.0005 4th increaseJun 2023Jul 2023$0.2555 $0.0005 5th increaseSep 2023Oct 2023$0.2560 $0.0005 2024 Dividend increase1st increaseDec 2023Jan 2024$0.2565 $0.0005 **Current (2025):** We have continued our 56-year history of paying monthly dividends. In addition, we have increased the dividend five times during 2024 and twice during 2025. As of February 2025, we have paid 109 consecutive quarterly dividend increases and increased the dividend 129 times since our listing on the NYSE in 1994. 2024 Dividend increasesMonth DeclaredMonth PaidMonthly Dividend per shareIncrease per share1st increaseDec 2023Jan 2024$0.2565 $0.0005 2nd increaseMar 2024Apr 2024$0.2570 $0.0005 3rd increaseMay 2024Jun 2024$0.2625 $0.0055 4th increaseJun 2024Jul 2024$0.2630 $0.0005 5th increaseSep 2024Oct 2024$0.2635 $0.0005 2025 Dividend increases1st increaseDec 2024Jan 2025$0.2640 $0.0005 2nd increaseFeb 2025Mar 2025$0.2680 $0.0040 --- ## Modified: Rental Revenue (reimbursable) **Key changes:** - Reworded sentence: "Contractually obligated reimbursements by our clients increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the growth of our portfolio due to acquisitions; partially offset by lower recoverable taxes as a result of a modification of tax remittance terms with a client in the prior year." **Prior (2024):** A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses. The increase in contractually obligated reimbursements by our clients for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to higher recoverable real estate tax taxes from overall portfolio growth. **Current (2025):** A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses. Contractually obligated reimbursements by our clients increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the growth of our portfolio due to acquisitions; partially offset by lower recoverable taxes as a result of a modification of tax remittance terms with a client in the prior year. --- ## Modified: Investments **Key changes:** - Reworded sentence: "During the year ended December 31, 2024, we invested $3.9 billion at an initial weighted average cash yield of 7.4%, including an investment in 546 properties, properties under development or expansion, and investments in loans." **Prior (2024):** During the year ended December 31, 2023, we invested $9.5 billion at an initial weighted average cash yield of 7.1%, including an investment in 1,408 properties, properties under development or expansion, investments in loans and a preferred equity investment. See notes 4, Investments in Real Estate, 5, Investments in Unconsolidated Entities, and 6, Investments in Loans, to the consolidated financial statements for further details. **Current (2025):** During the year ended December 31, 2024, we invested $3.9 billion at an initial weighted average cash yield of 7.4%, including an investment in 546 properties, properties under development or expansion, and investments in loans. See notes 4, Investments in Real Estate, 5, Investments in Unconsolidated Entities, and 6, Investments in Loans and Financing Receivables, to the consolidated financial statements contained in this annual report for further details. --- ## Modified: 2025 Dividend increases **Key changes:** - Reworded sentence: "24 24 24 Table of Contents Table of Contents The dividends paid per share during the year ended December 31, 2024 totaled $3.126, as compared to $3.051 during the year ended December 31, 2023, an increase of $0.075, or 2.5%." **Prior (2024):** The dividends paid per share during 2023 totaled $3.051, as compared to $2.967 during 2022, an increase of $0.084, or 2.8%. 25 25 25 Table of Contents Table of Contents The monthly dividend of $0.2565 per share represents a current annualized dividend of $3.0780 per share, and an annualized dividend yield of 5.4% based on the last reported sale price of our common stock on the NYSE of $57.42 on December 31, 2023. 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. **Current (2025):** 24 24 24 Table of Contents Table of Contents The dividends paid per share during the year ended December 31, 2024 totaled $3.126, as compared to $3.051 during the year ended December 31, 2023, an increase of $0.075, or 2.5%. The monthly dividend of $0.2680 per share represents a current annualized dividend of $3.216 per share, and an annualized dividend yield of 6.0% based on the last reported sale price of our common stock on the NYSE of $53.41 on December 31, 2024. 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. --- ## Modified: Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bonds **Key changes:** - Reworded sentence: "Interest expense increased by $286.6 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher average borrowings and weighted average interest rates." **Prior (2024):** 34 34 34 Table of Contents Table of Contents The increase in interest expense for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to higher average debt and weighted average interest. See notes to the accompanying consolidated financial statements for additional information regarding our indebtedness. **Current (2025):** Interest expense increased by $286.6 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher average borrowings and weighted average interest rates. Included in the overall increase, $67.4 million was from lower non-cash amortization of debt discounts and premiums, primarily due to the amortization of the discount recorded to reflect the fair value of senior notes exchanged in the Merger. These increases were partially offset by higher capitalized interest driven by increased development activity. See notes to the accompanying consolidated financial statements contained in this annual report for additional information regarding our indebtedness. --- ## Modified: 9. Mortgages Payable **Key changes:** - Reworded sentence: "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." - Reworded sentence: "At December 31, 2024, we were in compliance with these covenants." **Prior (2024):** During the year ended December 31, 2023, we made $22.0 million in principal payments, including the full repayment of two mortgages for $17.4 million. During the year ended December 31, 2022, we made $312.2 million in principal payments, including the full repayment of 12 mortgages for $308.0 million. No mortgages were assumed during the year ended December 31, 2023. We assumed eight mortgages on 17 properties totaling $45.1 million during the year ended December 31, 2022. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At December 31, 2023, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $0.4 million and $0.8 million at December 31, 2023 and 2022, respectively. These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of December 31, 2023 and 2022 (dollars in millions): **Current (2025):** 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): --- ## Modified: Other Income, Net **Key changes:** - Reworded sentence: "Other income, net decreased by $0.2 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to lower gains on insurance proceeds, largely offset by higher interest on short-term investments." - Reworded sentence: "The increase of $14.6 million in income taxes for the year ended December 31, 2024 as compared with the same period in 2023 is primarily attributable to higher taxable income in the U.K." **Prior (2024):** Certain miscellaneous non-recurring revenue is included in 'other income, net'. The decrease of $6.7 million for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to lower gains on insurance proceeds from recoveries on property losses exceeding our carrying value. 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 in income taxes for the year ended December 31, 2023 as compared with the same period in 2022 is primarily attributable to higher taxable income in the UK; partially offset by lower UK tax rates. 36 36 36 Table of Contents Table of Contents **Current (2025):** Other income, net decreased by $0.2 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to lower gains on insurance proceeds, largely offset by higher interest on short-term investments. 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 $14.6 million in income taxes for the year ended December 31, 2024 as compared with the same period in 2023 is primarily attributable to higher taxable income in the U.K. 35 35 35 Table of Contents Table of Contents --- ## Modified: Repurchases of Equity Securities **Key changes:** - Reworded sentence: "During the three months ended December 31, 2024, the following shares of stock were withheld for state and federal payroll taxes on the vesting of employee stock awards, as permitted under the Realty Income 2021 Incentive Award Plan, (the "2021 Plan"): Period Total Number of Shares Purchased Average Price Paid per ShareOctober 1, 2024 - October 31, 2024221 $62.95 November 1, 2024 - November 30, 20241,234 $56.96 December 1, 2024 - December 31, 20248,485 $53.50 Total 9,940 $54.14 Item 6: Reserved 23 23 23 Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations" **Prior (2024):** During the three months ended December 31, 2023, the following shares of stock were withheld for state and federal payroll taxes on the vesting of employee stock awards, as permitted under the Realty Income 2021 Incentive Award Plan, (the "2021 Plan"): Period Total Number of Shares Purchased Average Price Paid per ShareOctober 1, 2023 - October 31, 20232,242 $49.06 November 1, 2023 - November 30, 20231,283 $51.92 December 1, 2023 - December 31, 202311,735 $57.22 Total 15,260 $55.58 Item 6: Reserved 24 24 24 Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations **Current (2025):** During the three months ended December 31, 2024, the following shares of stock were withheld for state and federal payroll taxes on the vesting of employee stock awards, as permitted under the Realty Income 2021 Incentive Award Plan, (the "2021 Plan"): Period Total Number of Shares Purchased Average Price Paid per ShareOctober 1, 2024 - October 31, 2024221 $62.95 November 1, 2024 - November 30, 20241,234 $56.96 December 1, 2024 - December 31, 20248,485 $53.50 Total 9,940 $54.14 Item 6: Reserved 23 23 23 Table of Contents Table of Contents Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations --- ## Modified: Changes in U.S. or Non-U.S. tax laws and regulations, including changes to tax rates, and legislative or other actions may adversely affect us or our investors. **Key changes:** - Reworded sentence: "Federal income taxation laws are constantly under review and may change." - Reworded sentence: "New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us as well as the amount of tax we are required to pay." **Prior (2024):** The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Services, or the IRS, and the U.S. Department of the Treasury, or the Treasury. Changes to the tax laws, with or without retroactive application, could adversely affect us or our investors, including holders of our common stock or debt securities. We cannot predict how changes in the tax laws might affect us or our investors. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other 10 10 10 Table of Contents Table of Contents entities more attractive relative to an investment in a REIT. In addition, the tax treatment of certain of our sale-leaseback transactions could change, which could make such sale-leaseback transactions less attractive to potential sellers and lessees and negatively impact our operations. **Current (2025):** Federal income taxation laws are constantly under review and may change. Additionally, the governments of many of the other countries in which we operate may enact changes to the tax laws of such countries. Changes to the tax laws, with or without retroactive application, could adversely affect us or our investors, including holders of our common stock or debt securities. We cannot predict how changes in the tax laws might affect us or our investors. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us as well as the amount of tax we are required to pay. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT. In addition, the tax treatment of certain of our sale-leaseback transactions could change, which could make such sale-leaseback transactions less attractive to potential sellers and lessees and negatively impact our operations. --- ## Modified: 3. Supplemental Detail for Certain Components of Consolidated Balance Sheets (in thousands): **Key changes:** - Reworded sentence: "(in thousands): A.Accounts receivable, net, consist of the following at:December 31, 2024December 31, 2023Straight-line rent receivables, net$694,844 $516,692 Client receivables, net182,824 193,844 $877,668 $710,536 B.Lease intangible assets, net, consist of the following at:December 31, 2024December 31, 2023In-place leases$7,347,301 $5,500,404 Above-market leases2,203,420 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 items1,911 1,799 $6,322,992 $5,017,907 62 62 62 Table of Contents Table of Contents C.Other assets, net, consist of the following at:December 31, 2024December 31, 2023Financing receivables, net$1,609,044 $1,570,943 Loan receivable, net828,500 205,339 Right of use asset - financing leases, net653,353 706,837 Right of use asset - operating leases, net619,350 594,712 Prepaid expenses63,499 33,252 Value-added tax receivable48,075 100,672 Derivative assets and receivables - at fair value47,165 21,170 Restricted escrow deposits36,326 6,247 Interest receivable16,071 6,139 Impounds related to mortgages payable14,218 53,005 Corporate assets, net12,763 12,948 Credit facility origination costs, net7,331 12,264 Investment in sales type lease6,138 6,056 Non-refundable escrow deposits225 200 Other items56,510 38,859 $4,018,568 $3,368,643 Right of use asset - financing leases, net Right of use asset - financing leases, net Right of use asset - operating leases, net Right of use asset - operating leases, net D.Accounts payable and accrued expenses consist of the following at:December 31, 2024December 31, 2023Notes payable - interest payable$261,605 $218,811 Property taxes payable92,440 78,809 Accrued income taxes84,884 61,070 Derivative liabilities and payables - at fair value81,524 119,620 Accrued property expenses61,118 54,208 Accrued costs on properties under development59,602 65,967 Value-added tax payable26,829 64,885 Mortgages, term loans, and credit line - interest payable4,584 8,580 Accrued merger-related costs3,482 4,551 Other items83,348 62,025 $759,416 $738,526 E.Lease intangible liabilities, net, consist of the following at:December 31, 2024December 31, 2023Below-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, 2024December 31, 2023Lease liability - operating leases$452,956 $425,213 Rent received in advance and other deferred revenue 352,334 312,195 Lease liability - financing leases77,190 44,345 Security deposits35,594 28,250 Other items5,054 1,647 $923,128 $811,650 Lease liability - operating leases Lease liability - operating leases Lease liability - financing leases Lease liability - financing leases 63 63 63 Table of Contents Table of Contents" **Prior (2024):** (in thousands): A.Accounts receivable, net, consist of the following at:December 31, 2023December 31, 2022Straight-line rent receivables, net$516,692 $363,993 Client receivables, net193,844 179,244 $710,536 $543,237 A. B.Lease intangible assets, net, consist of the following at:December 31, 2023December 31, 2022In-place leases$5,500,404 $5,324,565 Accumulated amortization of in-place leases(1,746,377)(1,409,878)Above-market leases1,811,400 1,697,367 Accumulated amortization of above-market leases(549,319)(443,688)Other items1,799 - $5,017,907 $5,168,366 C.Other assets, net, consist of the following at:December 31, 2023December 31, 2022Financing receivables, net$1,570,943 $933,116 Right of use asset - financing leases706,837 467,920 Right of use asset - operating leases, net594,712 603,097 Loan receivable, net205,339 - Value-added tax receivable100,672 24,726 Prepaid expenses33,252 28,128 Impounds related to mortgages payable53,005 18,152 Derivative assets and receivables - at fair value21,170 83,100 Corporate assets, net12,948 12,334 Credit facility origination costs, net12,264 17,196 Restricted escrow deposits6,247 37,627 Interest receivable6,139 - Investment in sales type lease6,056 5,951 Non-refundable escrow deposits200 5,667 Other items38,859 39,939 $3,368,643 $2,276,953 Lease intangible assets, net, consist of the following at: In-place leases Accumulated amortization of in-place leases Above-market leases Accumulated amortization of above-market leases Other assets, net, consist of the following at: Right of use asset - financing leases Right of use asset - financing leases Right of use asset - operating leases, net Right of use asset - operating leases, net 62 62 62 Table of Contents Table of Contents D.Accounts payable and accrued expenses consist of the following at:December 31, 2023December 31, 2022Notes payable - interest payable$218,811 $129,202 Derivative liabilities and payables - at fair value119,620 64,724 Property taxes payable78,809 45,572 Accrued costs on properties under development65,967 26,559 Value-added tax payable64,885 23,375 Accrued income taxes61,070 22,626 Accrued property expenses54,208 25,290 Mortgages, term loans, and credit line - interest payable8,580 5,868 Other items66,576 55,921 $738,526 $399,137 Accounts payable and accrued expenses consist of the following at: E.Lease intangible liabilities, net, consist of the following at:December 31, 2023December 31, 2022Below-market leases$1,728,027 $1,617,870 Accumulated amortization of below-market leases(321,174)(238,434)$1,406,853 $1,379,436 Lease intangible liabilities, net, consist of the following at: Below-market leases Accumulated amortization of below-market leases F.Other liabilities consist of the following at:December 31, 2023December 31, 2022Lease liability - operating leases, net$425,213 $440,096 Rent received in advance and other deferred revenue 312,195 269,645 Lease liability - financing leases44,345 49,469 Security deposits28,250 15,577 Other acquisition liabilities1,647 - $811,650 $774,787 Other liabilities consist of the following at: Lease liability - operating leases, net Lease liability - operating leases, net Lease liability - financing leases Lease liability - financing leases **Current (2025):** (in thousands): A.Accounts receivable, net, consist of the following at:December 31, 2024December 31, 2023Straight-line rent receivables, net$694,844 $516,692 Client receivables, net182,824 193,844 $877,668 $710,536 B.Lease intangible assets, net, consist of the following at:December 31, 2024December 31, 2023In-place leases$7,347,301 $5,500,404 Above-market leases2,203,420 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 items1,911 1,799 $6,322,992 $5,017,907 62 62 62 Table of Contents Table of Contents C.Other assets, net, consist of the following at:December 31, 2024December 31, 2023Financing receivables, net$1,609,044 $1,570,943 Loan receivable, net828,500 205,339 Right of use asset - financing leases, net653,353 706,837 Right of use asset - operating leases, net619,350 594,712 Prepaid expenses63,499 33,252 Value-added tax receivable48,075 100,672 Derivative assets and receivables - at fair value47,165 21,170 Restricted escrow deposits36,326 6,247 Interest receivable16,071 6,139 Impounds related to mortgages payable14,218 53,005 Corporate assets, net12,763 12,948 Credit facility origination costs, net7,331 12,264 Investment in sales type lease6,138 6,056 Non-refundable escrow deposits225 200 Other items56,510 38,859 $4,018,568 $3,368,643 Right of use asset - financing leases, net Right of use asset - financing leases, net Right of use asset - operating leases, net Right of use asset - operating leases, net D.Accounts payable and accrued expenses consist of the following at:December 31, 2024December 31, 2023Notes payable - interest payable$261,605 $218,811 Property taxes payable92,440 78,809 Accrued income taxes84,884 61,070 Derivative liabilities and payables - at fair value81,524 119,620 Accrued property expenses61,118 54,208 Accrued costs on properties under development59,602 65,967 Value-added tax payable26,829 64,885 Mortgages, term loans, and credit line - interest payable4,584 8,580 Accrued merger-related costs3,482 4,551 Other items83,348 62,025 $759,416 $738,526 E.Lease intangible liabilities, net, consist of the following at:December 31, 2024December 31, 2023Below-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, 2024December 31, 2023Lease liability - operating leases$452,956 $425,213 Rent received in advance and other deferred revenue 352,334 312,195 Lease liability - financing leases77,190 44,345 Security deposits35,594 28,250 Other items5,054 1,647 $923,128 $811,650 Lease liability - operating leases Lease liability - operating leases Lease liability - financing leases Lease liability - financing leases 63 63 63 Table of Contents Table of Contents --- ## Modified: Total Expenses **Key changes:** - Reworded sentence: "The following summarizes our total expenses (in millions): Years ended December 31,20242023ChangeDepreciation and amortization$2,395.6$1,895.2$500.4Interest1,017.0730.4286.6Property (excluding reimbursable)74.642.831.8Property (reimbursable)303.1274.228.9General and administrative176.9144.532.4Provisions for impairment425.887.1338.7Merger, transaction, and other costs, net96.314.581.8Total expenses$4,489.3$3,188.7$1,300.6Total revenue (1)$4,968.1$3,804.8General and administrative expenses as a percentage of total revenue (1)3.6 %3.8 %Property expenses (excluding reimbursable) as a percentage of total revenue (1)1.5 %1.1 % Total revenue (1) General and administrative expenses as a percentage of total revenue (1) Property expenses (excluding reimbursable) as a percentage of total revenue (1) (1) Excludes rental revenue (reimbursable)." **Prior (2024):** The following summarizes our total expenses (in thousands): Years ended December 31,20232022ChangeDepreciation and amortization$1,895,177$1,670,389$224,788Interest730,423465,223265,200Property (excluding reimbursable)42,76341,6451,118Property (reimbursable)274,201184,68589,516General and administrative144,536138,4596,077Provisions for impairment87,08225,86061,222Merger and integration-related costs14,46413,897567Total expenses$3,188,646$2,540,158$648,488Total revenue (1)$3,804,792$3,158,996General and administrative expenses as a percentage of total revenue (1)3.8 %4.4 %Property expenses (excluding reimbursable) as a percentage of total revenue (1)1.1 %1.3 % Total revenue (1) General and administrative expenses as a percentage of total revenue (1) Property expenses (excluding reimbursable) as a percentage of total revenue (1) (1) Excludes rental revenue (reimbursable). **Current (2025):** The following summarizes our total expenses (in millions): Years ended December 31,20242023ChangeDepreciation and amortization$2,395.6$1,895.2$500.4Interest1,017.0730.4286.6Property (excluding reimbursable)74.642.831.8Property (reimbursable)303.1274.228.9General and administrative176.9144.532.4Provisions for impairment425.887.1338.7Merger, transaction, and other costs, net96.314.581.8Total expenses$4,489.3$3,188.7$1,300.6Total revenue (1)$4,968.1$3,804.8General and administrative expenses as a percentage of total revenue (1)3.6 %3.8 %Property expenses (excluding reimbursable) as a percentage of total revenue (1)1.5 %1.1 % Total revenue (1) General and administrative expenses as a percentage of total revenue (1) Property expenses (excluding reimbursable) as a percentage of total revenue (1) (1) Excludes rental revenue (reimbursable). --- ## Modified: Foreign Currency and Derivative Gain (Loss), Net **Key changes:** - Reworded sentence: "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." **Prior (2024):** 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. Derivative gain and loss primarily relates 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 for the year ended December 31, 2023 was a loss of $13.4 million, primarily due to foreign currency fluctuations related to the remeasurement of intercompany debt. In June 2022, following the early prepayment of our Sterling-denominated intercompany loan receivable from our consolidated foreign subsidiaries, we terminated the four cross-currency swaps used to hedge the foreign currency exposure of the intercompany loan. As the hedge relationship was terminated and the future principal and interest associated with the prepaid intercompany loan will not occur, $20.0 million gain was reclassified from AOCI to 'Foreign currency and derivative (loss) gain, net' during the year ended December 31, 2022. The reclassification from AOCI was offset by $7.9 million in losses from the intercompany loan remeasurement on the final exchange. **Current (2025):** 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 gain (loss), net was a $3.4 million gain for the year ended December 31, 2024 as compared $13.4 million loss with the same period in 2023, primarily due to the impact of foreign currency fluctuations on the remeasurement of intercompany debt. --- ## Modified: Balance, net **Key changes:** - Reworded sentence: "(1)At December 31, 2024, there were 11 mortgages on 17 properties and at December 31, 2023, there were 16 mortgages on 131 properties." **Prior (2024):** (1)At December 31, 2023, there were 16 mortgages on 131 properties and at December 31, 2022, there were 18 mortgages on 136 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At December 31, 2023 and December 31, 2022, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at December 31, 2023 and December 31, 2022, respectively. (3) Effective interest rates ranged from 0.5% to 6.6% and 2.7% to 6.6% at December 31, 2023 and December 31, 2022, respectively. The following table summarizes the maturity of mortgages payable as of December 31, 2023, excluding $0.8 million related to unamortized net discounts and deferred financing costs (dollars in millions): Year of MaturityPrincipal2024$740.5202544.0202612.0202722.320281.3Thereafter2.3Totals$822.4 **Current (2025):** (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. (1) 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 MaturityPrincipal2025$43.4202612.0202722.320281.320291.3Thereafter1.0Total$81.3 --- ## Modified: Interest Expense **Key changes:** - Reworded sentence: "The following is a summary of the components of our interest expense (in thousands): Years ended December 31,20242023Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps$1,018,445$788,344Credit facility commitment fees5,4015,357Amortization of debt origination and deferred financing costs23,93926,670Gain on interest rate swaps(7,180)(7,189)Amortization of net mortgage premiums and discounts30(12,803)Amortization of net note premiums and discounts(3,309)(60,657)Capital lease obligation2,0251,509Interest capitalized(22,396)(10,808)Interest expense$1,016,955$730,423Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bondsAverage outstanding balances$25,508,037$20,537,222Weighted average interest rates4.07 %3.83 % Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps" **Prior (2024):** The following is a summary of the components of our interest expense (in thousands): Years ended December 31,20232022Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps$788,344$523,384Credit facility commitment fees5,3574,908Amortization of debt origination and deferred financing costs26,67014,149(Gain) loss on interest rate swaps(7,189)718Amortization of net mortgage premiums(12,803)(13,622)Amortization of net note premiums(60,657)(62,989)Capital lease obligation1,5091,464Interest capitalized(10,808)(2,789)Interest expense$730,423$465,223Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bondsAverage outstanding balances$20,537,222$16,460,928Weighted average interest rates3.83 %3.15 % Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps **Current (2025):** The following is a summary of the components of our interest expense (in thousands): Years ended December 31,20242023Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps$1,018,445$788,344Credit facility commitment fees5,4015,357Amortization of debt origination and deferred financing costs23,93926,670Gain on interest rate swaps(7,180)(7,189)Amortization of net mortgage premiums and discounts30(12,803)Amortization of net note premiums and discounts(3,309)(60,657)Capital lease obligation2,0251,509Interest capitalized(22,396)(10,808)Interest expense$1,016,955$730,423Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bondsAverage outstanding balances$25,508,037$20,537,222Weighted average interest rates4.07 %3.83 % Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps --- ## Modified: General and Administrative Expenses **Key changes:** - Reworded sentence: "General and administrative expenses increased by $32.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher employee costs of $19.6 million and higher professional fees of $7.9 million as we continue to invest in our people and our platform." **Prior (2024):** General and administrative expenses are expenditures related to the operations of our company, including employee-related costs, professional fees, and other general overhead costs associated with running our business. The increase in general and administrative expenses for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to higher payroll-related compensation costs associated with the growth of the company. **Current (2025):** General and administrative expenses increased by $32.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher employee costs of $19.6 million and higher professional fees of $7.9 million as we continue to invest in our people and our platform. 34 34 34 Table of Contents Table of Contents --- ## Modified: Inflation (including prolonged inflationary periods) may adversely affect our results of operations, financial condition and liquidity. **Key changes:** - Reworded sentence: "Even though net leases are structured so as to reduce 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." - Reworded sentence: "Inflationary periods may cause us to experience increased costs of financing, making it difficult to incur or refinance debt at attractive rates or at all, and may adversely affect the investments we make if the cost of financing is in excess of our anticipated earnings from such investment thereby limiting the investments we can make." - Removed sentence: "Item 1B: Unresolved Staff Comments There are no unresolved staff comments." - Removed sentence: "Item 1C: Cybersecurity We maintain a cyber risk management program to identify, assess, manage, mitigate, and respond to cybersecurity threats." - Removed sentence: "We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business." **Prior (2024):** Increased inflation or anticipated inflationary periods, such as the period in which we are currently in, could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations. During times when inflation is greater than increases in rent, as provided for in our leases, rent increases may not keep up with the rate of inflation and other costs (including increases in employment and other fees and expenses). Government regulations may limit the indices we can utilize in lease adjustments thereby limiting our ability to increase rent. Even though net leases reduce 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. The U.K. government plans to migrate away from the Retail Price Index ("RPI"), to alternatives such as the Consumer Price Index including owner occupiers' housing costs, that may result in a lower measure of inflation and, in turn, have a negative impact on our lease revenue currently tied to RPI in the U.K. Inflationary periods may cause us to experience increased costs of financing, making it difficult to incur or 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. To the extent periods of high inflation are prolonged, these results may be exacerbated. Item 1B: Unresolved Staff Comments There are no unresolved staff comments. Item 1C: Cybersecurity We maintain a cyber risk management program to identify, assess, manage, mitigate, and respond to cybersecurity threats. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. The program is integrated within our enterprise risk management system and addresses our IT networks and related systems that are essential to the operation of our business. We maintain controls and procedures, including third-party oversight procedures, and cybersecurity training for all employees on an annual basis, which are designed to ensure prompt escalation of cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management in a timely manner. We work with third parties that assist us to identify, assess, and manage cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers, and penetration testing firms. Our cybersecurity program and designated incident response team are comprised of key employees, and third-party information security experts from leading cybersecurity incident response firms, who are responsible for efficiently and effectively responding to cybersecurity incidents. We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans. Our Cybersecurity Risk Committee, chaired by our Head of IT, and comprised of functional leaders, provides oversight, direction and guidance related to the cybersecurity risk management decisions. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See "Risk Factors - We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business." 22 22 22 Table of Contents Table of Contents **Current (2025):** Increased inflation or anticipated inflationary periods, such as the period in which we are currently in, could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations. During times when inflation is greater than increases in rent, as provided for in our leases, rent increases may not keep up with the rate of inflation and other costs (including increases in employment and other fees and expenses). Government regulations may limit the indices we can utilize in lease adjustments thereby limiting our ability to increase rent. Even though net leases are structured so as to reduce 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. The U.K. government plans to migrate away from the Retail Price Index ("RPI"), to alternatives such as the Consumer Price Index including owner occupiers' housing costs, that may result in a lower measure of inflation and, in turn, have a negative impact on our lease revenue currently tied to RPI in the U.K. Inflationary periods may cause us to experience increased costs of financing, making it difficult to incur or refinance debt at attractive rates or at all, and may adversely affect the investments we make if the cost of financing is in excess of our anticipated earnings from such investment thereby limiting the investments we can make. To the extent periods of high inflation are prolonged, these results may be exacerbated. --- ## Modified: Newly Issued Accounting Standards. **Key changes:** - Reworded sentence: "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." - Removed sentence: "In November 2023, FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting, establishing improvements to reportable segments disclosures to enhance segment reporting under Topic 280." - Removed sentence: "This ASU aims to change how public entities identify and aggregate operating segments and apply quantitative thresholds to determine their reportable segments." - Removed sentence: "This ASU also requires public entities that operate as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures." - Removed sentence: "The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and the amendments should be applied retrospectively to all periods presented in the financial statements." **Prior (2024):** In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes, to enhance income tax disclosures, provide more information about tax risks and opportunities present in worldwide operations, and to disaggregate existing income tax disclosures. The 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. In November 2023, FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting, establishing improvements to reportable segments disclosures to enhance segment reporting under Topic 280. This ASU aims to change how public entities identify and aggregate operating segments and apply quantitative thresholds to determine their reportable segments. This ASU also requires public entities that operate as a single reportable segment to provide all segment disclosures in Topic 280, not just entity level disclosures. The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and the amendments should be applied retrospectively to all periods presented in the financial statements. We are currently evaluating the impact on our financial statement disclosures. **Current (2025):** 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. --- ## Modified: 8. Term Loans **Key changes:** - Reworded sentence: "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)." - Reworded sentence: "As of December 31, 2024, we were in compliance with the covenants contained in the term loans." **Prior (2024):** In January 2023, we entered into a term loan agreement, permitting us to incur multicurrency term loans, up to an aggregate of $1.5 billion in total borrowings. As of December 31, 2023, we had $1.1 billion in multicurrency borrowings, including $90.0 million, £705.0 million, and €85.0 million in outstanding borrowings. The 2023 term loans mature in January 2025, with one remaining twelve-month maturity extension available at our option. Our A3/A- credit ratings provide for a borrowing rate of 80 basis points over the applicable benchmark rate, which includes adjusted SOFR for USD-denominated loans, adjusted SONIA for Sterling-denominated loans, and EURIBOR for Euro-denominated loans. In conjunction with our 2023 term loans, we entered into interest rate swaps which fix our per annum interest rate. As of December 31, 2023, the effective interest rate, after giving effect to the interest rate swaps, was 5.0%. We also have a $250.0 million senior unsecured term loan, which matures in March 2024. In conjunction with this term loan, we entered into an interest rate swap and as of December 31, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8%. 67 67 67 Table of Contents Table of Contents At December 31, 2023, deferred financing costs of $0.1 million are included net of the term loans principal balance, as compared to $0.2 million related to our $250.0 million term loan at December 31, 2022, on our consolidated balance sheets. These costs are being amortized over the remaining term of the term loans. As of December 31, 2023, we were in compliance with the covenants contained in the term loans. At December 31, 2023, deferred financing costs of **Current (2025):** In January 2024, in connection with the Merger, we entered into an amended and restated term loan agreement (which replaced Spirit's then-existing term loans with various lenders). The amended and restated term loan agreements are fixed through interest rate swaps at a weighted average interest rate of 3.9%. Pursuant to the amended and restated term loan agreement, we borrowed $800.0 million in aggregate total borrowings, $300.0 million of which matures in August 2025 and $500.0 million of which matures in August 2027 (the "$800 million term loan agreement"). We also entered into an amended and restated term loan agreement pursuant to which we borrowed $500.0 million in aggregate total borrowings which matures in June 2025 (the "$500 million term loan agreement"). In January 2023, we entered into our 2023 term loan agreement, which allows us to incur up to an aggregate of $1.5 billion in multi-currency borrowings. In January 2024, we entered into interest rate swaps which fix our per annum interest rate at 4.9% until January 2026. As of December 31, 2024, we had $1.1 billion in multi-currency borrowings, including $90.0 million, £705.0 million, and €85.0 million in outstanding borrowings. The maturity date for the 2023 term loans was January 2025; however, in December 2024, we exercised the remaining twelve-month extension option, extending the maturity to January 2026. Our A3/A- credit ratings provide for a borrowing rate of 80 basis points over the applicable benchmark rate, which includes adjusted SOFR for USD-denominated loans, adjusted SONIA for GBP-denominated loans, and EURIBOR for EUR-denominated loans. During the year ended December 31, 2024, we repaid our $250.0 million senior unsecured term loan in full upon maturity. Deferred financing costs were $2.2 million at December 31, 2024 and are included net of the term loans' principal balance, as compared to $0.1 million related to our 2023 term loans at December 31, 2023 on our consolidated balance sheets. These costs are being amortized over the remaining term of the term loans. As of December 31, 2024, we were in compliance with the covenants contained in the term loans. 69 69 69 Table of Contents Table of Contents --- ## Modified: Equity Capital Raising **Key changes:** - Reworded sentence: "During 2024, we raised $1.8 billion of proceeds from the sale of common stock, at a weighted average price of $58.33 per share, primarily through proceeds from the sale of common stock through our ATM program." **Prior (2024):** We have an At-The-Market ("ATM") program, pursuant to which we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE at prevailing market prices or at negotiated prices or by any other methods permitted by applicable law. During 2023, we raised $5.5 billion of net proceeds from the sale of common stock, at a weighted average price of $59.79 per share, primarily through proceeds from the sale of common stock through our At-the-Market ("ATM") Program. The ATM program issuances during 2023 included 91.7 million shares issued pursuant to forward sale confirmations. As of December 31, 2023, 6.2 million shares of common stock subject to forward sale confirmations have been executed but not settled. See note 11, Issuances of Common Stock, to the consolidated financial statements for further details. **Current (2025):** During 2024, we raised $1.8 billion of proceeds from the sale of common stock, at a weighted average price of $58.33 per share, primarily through proceeds from the sale of common stock through our ATM program. The ATM program issuances during 2024 included 30.2 million shares issued pursuant to forward sale confirmations. As of December 31, 2024, 1.8 million shares of common stock subject to forward sale confirmations have been executed but not settled. See note 15, Stockholders' Equity, to the consolidated financial statements contained in this annual report for further details. --- ## Modified: Our Clients (4) **Key changes:** - Reworded sentence: "Other (5) (1) The initial term of the credit facility expires in June 2026 and includes, at our option, two six-month extensions." - Reworded sentence: "(5) "Other" consists of $683.3 million of commitments under construction contracts, $93.5 million for tenant improvements, re-leasing costs, recurring capital expenditures, and non-recurring building improvements, and $11.5 million for contingent purchase consideration obligations related to leasing activities for a multi-tenant property acquired." **Prior (2024):** Other (7) (1) The initial term of the credit facility expires in June 2026 and includes, at our option, two six-month extensions. At December 31, 2023, there were no borrowings under our revolving credit facility, and commercial paper programs outstanding were $764.4 million, which matured between January 2024 and February 2024. (2) The maturity date for our 2023 term loans reflects the closing of our previous twelve-month extension option and assumes the additional twelve-month extension available at the company's option is exercised. (3) Excludes our January 2024 issuance of $450.0 million of 4.750% senior unsecured notes due February 2029 and $800.0 million of 5.125% senior unsecured notes due February 2034. (4) 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. Excludes interest on the January 2024 issuances of $450.0 million of unsecured senior notes due February 2029 and $800.0 million of unsecured senior notes due February 2034. (5) We currently pay the ground lessors directly for the rent under the ground leases. (6) Our clients, who are generally sub-tenants clients under ground leases, are responsible for paying the rent under these ground leases. In the event our client fails to pay the ground lease rent, we are primarily responsible. (7) "Other" consists of $740.0 million of commitments under construction contracts, and $32.7 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements. **Current (2025):** Other (5) (1) The initial term of the credit facility expires in June 2026 and includes, at our option, two six-month extensions. At December 31, 2024, there were $1,062.9 million of outstanding borrowings under our revolving credit facility, and commercial paper programs outstanding were $67.3 million, which mature between January 2025 and March 2025. (2) 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. (3) We currently pay the ground lessors directly for the rent under certain ground lease arrangements. (4) Our clients, who are generally sub-tenant clients under ground leases, are responsible for paying the rent under these ground leases. In the event our client fails to pay the ground lease rent, we are primarily responsible. (5) "Other" consists of $683.3 million of commitments under construction contracts, $93.5 million for tenant improvements, re-leasing costs, recurring capital expenditures, and non-recurring building improvements, and $11.5 million for contingent purchase consideration obligations related to leasing activities for a multi-tenant property acquired. --- ## Modified: Year ended December 31, 2024 **Key changes:** - Reworded sentence: "Properties available for lease at December 31, 2023 Lease expirations (1) Properties available for lease at December 31, 2024 (1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above." **Prior (2024):** Leasing Results At December 31, 2023, we had 193 properties available for lease or sale out of 13,458 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, 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 December 31, 2023Properties available for lease at September 30, 2023159 Lease expirations (1)266 Re-leases to same client(164)Re-leases to new client(26)Vacant dispositions(42)Properties available for lease at December 31, 2023193 Properties available for lease at September 30, 2023 Lease expirations (1) Properties available for lease at December 31, 2023 Year ended December 31, 2023Properties available for lease at December 31, 2022126 Lease expirations (1)984 Re-leases to same client(750)Re-leases to new client(51)Vacant dispositions(116)Properties available for lease at December 31, 2023193 Properties available for lease at December 31, 2022 Lease expirations (1) Properties available for lease at December 31, 2023 (1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above. During the three months ended December 31, 2023, the new annualized contractual rent on re-leases was $52.7 million, as compared to the previous annual rent of $50.8 million on the same units, representing a rent recapture rate of 103.6% on the units re-leased, which excludes restructurings associated with the Cineworld bankruptcy. Including Cineworld restructured leases that resulted in lease extensions, the recapture rate was 94.1% for the three months ended December 31, 2023. We re-leased 20 units to new clients without a period of vacancy, and 12 units to new clients after a period of vacancy. During the year ended December 31, 2023, the new annualized contractual rent on re-leases was $198.1 million, as compared to the previous annual rent of $190.3 million on the same units, representing a rent recapture rate of 104.1% on the units re-leased, which excludes restructurings associated with the Cineworld bankruptcy. Including Cineworld restructured leases that resulted in lease extensions, the recapture rate was 101.1% for the year ended December 31, 2023. We re-leased 27 units to new clients without a period of vacancy, and 39 units to new clients after a period of vacancy. 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. **Current (2025):** Properties available for lease at December 31, 2023 Lease expirations (1) Properties available for lease at December 31, 2024 (1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above. During the three months ended December 31, 2024, the new annualized contractual rent on re-leases was $52.5 million, as compared to the previous annual rent of $48.9 million on the same units, representing a rent recapture rate of 107.4% on the units re-leased. During the year ended December 31, 2024, the new annualized contractual rent on re-leases was $184.0 million, as compared to the previous annual rent of $174.2 million on the same units, representing a rent recapture rate of 105.6% on the units re-leased. 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. --- ## Modified: Years ended December 31, 2024, 2023, and 2022 **Key changes:** - Reworded sentence: "Shares ofpreferredstockPreferredstock andpaid incapitalShares ofcommonstockCommonstock andpaid incapitalDistributionsin excess ofnet incomeAccumulated other comprehensive incomeTotalstockholders'equityNon-controllinginterestsTotalequityBalance, 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 merger6,900 167,394 108,308 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 Balance, December 31, 2021 Balance, December 31, 2022 Balance, December 31, 2023 Balance, December 31, 2024" **Prior (2024):** Shares ofcommonstockCommonstock andpaid incapitalDistributionsin excess ofnet incomeAccumulated other comprehensive income (loss)Totalstockholders'equityNoncontrollinginterestsTotalequityBalance, December 31, 2020361,303 $14,700,050 $(3,659,933)$(54,634)$10,985,483 $32,247 $11,017,730 Net income - - 359,456 - 359,456 1,291 360,747 Other comprehensive income - - - 59,567 59,567 - 59,567 Shares issued in merger162,044 11,556,715 - - 11,556,715 3,160 11,559,875 Orion Divestiture - (1,140,769) - - (1,140,769)(1,352)(1,142,121)Distributions paid and payable - - (1,230,094) - (1,230,094)(1,868)(1,231,962)Share issuances, net of costs67,777 4,453,953 - - 4,453,953 - 4,453,953 Contributions by noncontrolling interests - - - - - 43,390 43,390 Reallocation of equity - 42 - - 42 (42) - Share-based compensation, net138 8,221 - - 8,221 - 8,221 Balance, December 31, 2021591,262 $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 costs68,876 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, net162 13,741 - - 13,741 - 13,741 Balance, December 31, 2022660,300 $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)Contributions by noncontrolling interests - - - - - 40,097 40,097 Share issuance, net of costs91,902 5,450,982 - - 5,450,982 - 5,450,982 Share-based compensation, net258 19,218 - - 19,218 - 19,218 Balance, December 31, 2023752,460 $39,629,709 $(6,762,136)$73,894 $32,941,467 $165,502 $33,106,969 Balance, December 31, 2020 Balance, December 31, 2021 Balance, December 31, 2022 Balance, December 31, 2023 **Current (2025):** Shares ofpreferredstockPreferredstock andpaid incapitalShares ofcommonstockCommonstock andpaid incapitalDistributionsin excess ofnet incomeAccumulated other comprehensive incomeTotalstockholders'equityNon-controllinginterestsTotalequityBalance, 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 merger6,900 167,394 108,308 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 Balance, December 31, 2021 Balance, December 31, 2022 Balance, December 31, 2023 Balance, December 31, 2024 --- ## Modified: Realty Income, L.P. units (1) **Key changes:** - Reworded sentence: "Carrying value at December 31, 2022 Carrying value at December 31, 2023 Contributions Carrying value at December 31, 2024 (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." - Reworded sentence: "At December 31, 2024, we are considered the primary beneficiary of Realty Income, L.P." **Prior (2024):** Carrying value at December 31, 2021 Contributions (2) Carrying value at December 31, 2022 Contributions (3) Distributions (4) Allocation of net income Carrying value at December 31, 2023 (1) 1,795,167 units were outstanding as of both December 31, 2023 and December 31, 2022. 1,060,709 units were outstanding as of December 31, 2021. (2) In September 2022, we issued 734,458 common partnership units in Realty Income, L.P. in connection with the acquisition of nine properties and recorded $51.2 million of contributions to noncontrolling interests. (3) Primarily related to contributions of $39.2 million for the issuance of a 5.0% joint venture interest as partial consideration paid on property acquisitions. The remaining amount represents contributions for two development joint ventures. (4) Includes a non-cash reduction of noncontrolling interest of $1.5 million from our partner's responsibility to absorb construction cost overages for a development joint venture during the year ended December 31, 2023. At December 31, 2023, 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. At December 31, 2023, we are considered the primary beneficiary of Realty Income, L.P. and other VIEs. For further information, see note 72 72 72 Table of Contents Table of Contents **Current (2025):** Carrying value at December 31, 2022 Carrying value at December 31, 2023 Contributions Carrying value at December 31, 2024 (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. (1) 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. At December 31, 2024, we are considered the primary beneficiary of Realty Income, L.P. and other VIEs. For further information, see note --- ## Modified: Year of Maturity **Key changes:** - Reworded sentence: "Principal Total 70 70 70 Table of Contents Table of Contents" **Prior (2024):** Principal Totals 68 68 68 Table of Contents Table of Contents **Current (2025):** Principal Total 70 70 70 Table of Contents Table of Contents --- ## Modified: As OfNumber ofProperties (1)WeightedAverageStatedInterestRate WeightedAverageEffectiveInterestRate WeightedAverageRemainingYears UntilMaturityRemainingPrincipalBalanceUnamortizedDiscountand DeferredFinancing CostsBalance, netMortgagePayableBalanceDecember 31, 2024174.0 %4.5 %1.4$81.3 $(0.5)$80.8 December 31, 20231314.8 %3.3 %0.4$822.4 $(0.8)$821.6 **Key changes:** - Reworded sentence: "As Of Number of Properties (1) Weighted Average Stated Interest Rate Weighted Average Effective Interest Rate" **Prior (2024):** As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) **Current (2025):** As Of Number of Properties (1) Weighted Average Stated Interest Rate Weighted Average Effective Interest Rate --- ## Modified: Our business is subject to risks associated with climate change. **Key changes:** - Reworded sentence: "Our business is subject to risks associated with the effects of climate change, and a market shift to a lower carbon economy, and may be subject to further risks in the future." - Reworded sentence: "The effects of climate change may lead to increased costs for us and our clients to adapt to the demands and expectations of lowering our carbon footprint, including with respect to setting carbon reduction targets, implementing renewable energy, retrofitting properties to be more energy efficient and implementing longer-term low-carbon solutions." - Reworded sentence: "The structure of our leasing contracts and operating model presents challenges in partnering with clients to implement necessary decarbonization initiatives." **Prior (2024):** Our business is subject to risks associated with the effects of climate change, and a resulting shift to a lower carbon economy, and may be subject to further risks in the future. Climate change could adversely affect our business through both chronic and acute perils including, but not limited to, extreme weather, changes in precipitation and temperature, and rising sea levels, all of which may result in physical damage to, or a decrease in demand for, our properties located in the areas affected by these conditions, and may adversely impact consumer behaviors, preferences and spending for our clients, which may impact their ability to fulfill their obligations under our leases, or our ability to re-lease the properties in the future. In addition, should the impact of climate change be severe or occur for lengthy periods of time, connectivity, labor and supply chains could impact business continuity for ourselves and our clients. Chronic climate change may lead to increased costs for us and our clients to adapt to the demands and expectations of climate change or lower carbon usage, including with respect to heating, cooling or electricity costs, retrofitting properties to be more energy efficient or comply with new rules or regulations, or other unforeseen costs. These risks could adversely affect our reputation, financial condition or results of operations. We seek to promote effective energy efficiency and other sustainability strategies and compliance with federal, state and international laws and regulations related to climate change, both internally and with our clients. Our sustainability strategies and efforts to comply with changes in federal, state and international laws and regulations on climate change could result in significant capital expenditures to improve our existing properties or properties we may acquire. Any changes to such laws and regulations could also result in increased operating costs or capital expenditures at our properties. If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our clients and investors may be damaged and we may incur fines and/or penalties. Moreover, there can be no assurance that any of our sustainability strategies 17 17 17 Table of Contents Table of Contents will result in reduced operating costs, higher occupancy or higher rental rates or deter our existing clients from relocating to properties owned by our competitors. In addition, tenants of net-leased properties are responsible for maintenance and other day-to-day management of the properties. This lack of control over our net-leased properties makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain regulatory disclosure requirements to which we are subject (such as the anticipated changes to the SEC's climate-related disclosure rules) or comply effectively with established Environmental, Social and Governance ("ESG") frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, Task Force for Climate-Related Financial Disclosures ("TCFD") and the Sustainability Accounting Standards Board. If we are unable to successfully collect the data necessary to comply with these disclosure requirements, we may be subject to increased regulatory risk and if such data is incomplete or unfavorable, our relationship with our investors, our stock price, and our access to capital may be negatively impacted. **Current (2025):** Our business is subject to risks associated with the effects of climate change, and a market shift to a lower carbon economy, and may be subject to further risks in the future. A failure to adequately adapt to climate change could adversely affect our business through both chronic and acute perils including, but not limited to, extreme weather, changes in precipitation and temperature, and rising sea levels, all of which may result in physical damage to, or a decrease in demand for, our properties located in the areas affected by these conditions, and may adversely impact consumer behaviors, preferences and spending for our clients, and insurance costs, which may impact their ability to fulfill their obligations under our leases, or our ability to re-lease the properties in the future. In addition, should the impact of climate change be severe or occur for lengthy periods of time, connectivity, labor and supply chains could impact business continuity for ourselves and our clients. The effects of climate change may lead to increased costs for us and our clients to adapt to the demands and expectations of lowering our carbon footprint, including with respect to setting carbon reduction targets, implementing renewable energy, retrofitting properties to be more energy efficient and implementing longer-term low-carbon solutions. These risks could adversely affect our reputation, financial condition or results of operations. The structure of our leasing contracts and operating model presents challenges in partnering with clients to implement necessary decarbonization initiatives. --- ## Modified: Depreciation and Amortization **Key changes:** - Reworded sentence: "Depreciation and amortization increased by $500.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the Merger and the acquisitions of properties in 2023 and 2024, which were partially offset by property dispositions." **Prior (2024):** The increase in depreciation and amortization for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to overall portfolio growth from acquisitions. **Current (2025):** Depreciation and amortization increased by $500.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the Merger and the acquisitions of properties in 2023 and 2024, which were partially offset by property dispositions. Real estate assets acquired in the Merger contributed an additional $413.4 million of depreciation and amortization for the year ended December 31, 2024. 33 33 33 Table of Contents Table of Contents --- ## Modified: Total Revenue **Key changes:** - Reworded sentence: "The following summarizes our total revenue (in millions): Years ended December 31,20242023ChangeRental (excluding reimbursable)$4,740.6 $3,684.0 $1,056.6 Rental (reimbursable)303.1 274.2 28.9 Other227.4 120.8 106.6 Total revenue$5,271.1 $4,079.0 $1,192.1 Rental (excluding reimbursable) Rental (reimbursable) Other Total revenue" **Prior (2024):** The following summarizes our total revenue (dollars in thousands): Years ended December 31,20232022ChangeRental (excluding reimbursable)$3,683,949 $3,114,972 $568,977 Rental (reimbursable)274,201 184,685 89,516 Other120,843 44,024 76,819 Total revenue$4,078,993 $3,343,681 $735,312 Rental (excluding reimbursable) Rental (reimbursable) Other Total revenue **Current (2025):** The following summarizes our total revenue (in millions): Years ended December 31,20242023ChangeRental (excluding reimbursable)$4,740.6 $3,684.0 $1,056.6 Rental (reimbursable)303.1 274.2 28.9 Other227.4 120.8 106.6 Total revenue$5,271.1 $4,079.0 $1,192.1 Rental (excluding reimbursable) Rental (reimbursable) Other Total revenue --- ## Modified: CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME **Key changes:** - Reworded sentence: "(in thousands, except per share amounts) Years ended December 31, 202420232022REVENUERental (including reimbursable)$5,043,748 $3,958,150 $3,299,657 Other227,394 120,843 44,024 Total revenue5,271,142 4,078,993 3,343,681 EXPENSESDepreciation and amortization2,395,644 1,895,177 1,670,389 Interest1,016,955 730,423 465,223 Property (including reimbursable)377,675 316,964 226,330 General and administrative176,895 144,536 138,459 Provisions for impairment425,833 87,082 25,860 Merger, transaction, and other costs, net96,292 14,464 13,897 Total expenses4,489,294 3,188,646 2,540,158 Gain on sales of real estate117,275 25,667 102,957 Foreign currency and derivative gain (loss), net3,420 (13,414)(13,311)Gain on extinguishment of debt - - 367 Equity in earnings of unconsolidated entities7,793 2,546 (6,448)Other income, net23,606 23,789 30,511 Income before income taxes933,942 928,935 917,599 Income taxes(66,601)(52,021)(45,183)Net income867,341 876,914 872,416 Net income attributable to noncontrolling interests(6,569)(4,605)(3,008)Net income attributable to the Company860,772 872,309 869,408 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:Basic862,959 692,298 611,766 Diluted863,792 693,024 612,181 Net income available to common stockholders$847,893 $872,309 $869,408 Total other comprehensive (loss) incomeForeign currency translation adjustment(32,883)64,326 (55,154)Unrealized (loss) gain on derivatives, net(2,782)(37,265)97,054 Total other comprehensive (loss) income$(35,665)$27,061 $41,900 Comprehensive income available to common stockholders$812,228 $899,370 $911,308" **Prior (2024):** (in thousands, except per share amounts) Years ended December 31, 202320222021REVENUERental (including reimbursable)$3,958,150 $3,299,657 $2,064,958 Other120,843 44,024 15,505 Total revenue4,078,993 3,343,681 2,080,463 EXPENSESDepreciation and amortization1,895,177 1,670,389 897,835 Interest730,423 465,223 323,644 Property (including reimbursable)316,964 226,330 133,605 General and administrative144,536 138,459 96,980 Provisions for impairment87,082 25,860 38,967 Merger and integration-related costs14,464 13,897 167,413 Total expenses3,188,646 2,540,158 1,658,444 Gain on sales of real estate25,667 102,957 55,798 Foreign currency and derivative (loss) gain, net(13,414)(13,311)710 Gain (loss) on extinguishment of debt - 367 (97,178)Equity in income and impairment of investment in unconsolidated entities2,546 (6,448)1,106 Other income, net23,789 30,511 9,949 Income before income taxes928,935 917,599 392,404 Income taxes(52,021)(45,183)(31,657)Net income876,914 872,416 360,747 Net income attributable to noncontrolling interests(4,605)(3,008)(1,291)Net income available to common stockholders$872,309 $869,408 $359,456 Amounts available to common stockholders per common share:Net income, basic and diluted$1.26 $1.42 $0.87 Weighted average common shares outstanding:Basic692,298 611,766 414,535 Diluted693,024 612,181 414,770 Net income available to common stockholders$872,309 $869,408 $359,456 Total other comprehensive gainForeign currency translation adjustment64,326 (55,154)9,119 Unrealized (loss) gain on derivatives, net(37,265)97,054 50,448 Total other comprehensive gain$27,061 $41,900 $59,567 Comprehensive income available to common stockholders$899,370 $911,308 $419,023 **Current (2025):** (in thousands, except per share amounts) Years ended December 31, 202420232022REVENUERental (including reimbursable)$5,043,748 $3,958,150 $3,299,657 Other227,394 120,843 44,024 Total revenue5,271,142 4,078,993 3,343,681 EXPENSESDepreciation and amortization2,395,644 1,895,177 1,670,389 Interest1,016,955 730,423 465,223 Property (including reimbursable)377,675 316,964 226,330 General and administrative176,895 144,536 138,459 Provisions for impairment425,833 87,082 25,860 Merger, transaction, and other costs, net96,292 14,464 13,897 Total expenses4,489,294 3,188,646 2,540,158 Gain on sales of real estate117,275 25,667 102,957 Foreign currency and derivative gain (loss), net3,420 (13,414)(13,311)Gain on extinguishment of debt - - 367 Equity in earnings of unconsolidated entities7,793 2,546 (6,448)Other income, net23,606 23,789 30,511 Income before income taxes933,942 928,935 917,599 Income taxes(66,601)(52,021)(45,183)Net income867,341 876,914 872,416 Net income attributable to noncontrolling interests(6,569)(4,605)(3,008)Net income attributable to the Company860,772 872,309 869,408 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:Basic862,959 692,298 611,766 Diluted863,792 693,024 612,181 Net income available to common stockholders$847,893 $872,309 $869,408 Total other comprehensive (loss) incomeForeign currency translation adjustment(32,883)64,326 (55,154)Unrealized (loss) gain on derivatives, net(2,782)(37,265)97,054 Total other comprehensive (loss) income$(35,665)$27,061 $41,900 Comprehensive income available to common stockholders$812,228 $899,370 $911,308 --- ## Modified: Provisions for Impairment **Key changes:** - Reworded sentence: "The following table summarizes our provisions for impairment during the periods indicated below (in millions): Years ended December 31,20242023Provisions for impairment of real estate$319.0 $82.2 Provision for credit losses106.8 4.9 Provisions for impairment$425.8 $87.1 Provisions for impairment increased by $338.7 million for the year ended December 31, 2024, as compared with the same period in 2023, as a result of increases of $236.8 million in impairment of real estate, primarily due to a higher number of properties impaired under the held for sale model, and $101.9 million in higher credit losses recognized on financing receivables for distressed clients accounted for under sales leaseback transactions." **Prior (2024):** Provisions for impairment consist of impairment on long-lived assets and allowances for credit losses on financing receivables and loans. The increase in impairment for the year ended December 31, 2023 as compared with the same period in 2022 is primarily due to higher provisions for impairment associated with our real estate assets, summarized in the following table (dollars in millions): Years ended December 31,20232022Carrying value prior to impairment$194.5 $140.9 Less: total provisions for impairment (1)(82.2)(25.9)Carrying value after impairment$112.3 $115.0 Less: total provisions for impairment (1) (1) Excludes provision for current expected credit loss of $4.9 million at December 31, 2023. **Current (2025):** The following table summarizes our provisions for impairment during the periods indicated below (in millions): Years ended December 31,20242023Provisions for impairment of real estate$319.0 $82.2 Provision for credit losses106.8 4.9 Provisions for impairment$425.8 $87.1 Provisions for impairment increased by $338.7 million for the year ended December 31, 2024, as compared with the same period in 2023, as a result of increases of $236.8 million in impairment of real estate, primarily due to a higher number of properties impaired under the held for sale model, and $101.9 million in higher credit losses recognized on financing receivables for distressed clients accounted for under sales leaseback transactions. --- ## Modified: amortization **Key changes:** - Reworded sentence: "Gain on Sales of Real Estate The following table summarizes our properties sold during the periods indicated below (dollars in millions):Years ended December 31,202420232022Number of properties294 121 170 Net sales proceeds$589.5 $117.4 $436.1 Gain on sales of real estate$117.3 $25.7 $103.0 65 65 65 Table of Contents Table of Contents" **Prior (2024):** expense 64 64 64 Table of Contents Table of Contents 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 31,202320222021Number of properties121 170 154 Net sales proceeds$117.4 $436.1 $250.3 Gain on sales of real estate$25.7 $103.0 $55.8 **Current (2025):** expense 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 31,202420232022Number of properties294 121 170 Net sales proceeds$589.5 $117.4 $436.1 Gain on sales of real estate$117.3 $25.7 $103.0 65 65 65 Table of Contents Table of Contents --- ## Modified: Debt Financing Activities **Key changes:** - Reworded sentence: "At December 31, 2024, our total outstanding borrowings of revolving credit facility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $26.5 billion, with a weighted average maturity of 5.8 years and a weighted average interest rate of 3.9%." - Reworded sentence: "These calculations, which are not based on U.S." - Reworded sentence: "The actual amounts as of December 31, 2024, are: Note CovenantsRequiredActualLimitation on incurrence of total debt< 60% of adjusted assets41.1 %Limitation on incurrence of secured debt< 40% of adjusted assets0.3 %Debt service and fixed charge coverage (trailing 12 months) (1)> 1.5x4.7xMaintenance of total unencumbered assets> 150% of unsecured debt244.5 %" **Prior (2024):** At December 31, 2023, our total outstanding borrowings of revolving credit facility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $21.5 billion, with a weighted average maturity of 5.9 years and a weighted average interest rate of 3.9%. As of December 31, 2023, approximately 94% 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 year ended December 31, 2023 below. 29 29 29 Table of Contents Table of Contents Note Issuances During the year ended December 31, 2023, we issued the following notes and bonds (in millions): Note IssuanceDate of IssuanceMaturity DatePrincipal amountPrice of par valueEffective yield to maturity5.050% NotesJanuary 2023January 2026$500.0 99.618 %5.189 %4.850% NotesJanuary 2023March 2030$600.0 98.813 %5.047 %4.700% NotesApril 2023December 2028$400.0 98.949 %4.912 %4.900% NotesApril 2023July 2033$600.0 98.020 %5.148 %4.875% NotesJuly 2023July 2030€550.0 99.421 %4.975 %5.125% NotesJuly 2023July 2034€550.0 99.506 %5.185 %5.750% NotesDecember 2023December 2031£300.0 99.298 %5.862 %6.000% NotesDecember 2023December 2039£450.0 99.250 %6.075 % 5.050% Notes 4.850% Notes 4.700% Notes 4.900% Notes 4.875% Notes 5.125% Notes 5.750% Notes 6.000% Notes In January 2024, we issued $450.0 million of 4.750% senior unsecured notes due February 2029 and $800.0 million of 5.125% senior unsecured notes due February 2034. In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit OP. See note 21, Subsequent Events, to the consolidated financial statements for further details. Term Loans In January 2023, we entered into a term loan agreement, permitting us to incur multicurrency term loans, up to an aggregate of $1.5 billion in total borrowings. As of December 31, 2023, we had $1.1 billion in multicurrency borrowings, including $90.0 million, £705.0 million, and €85.0 million in outstanding borrowings. The 2023 term loans mature in January 2025 with one remaining 12-month maturity extension available at our option. In conjunction with our 2023 term loans, we entered into interest rate swaps which fix our per annum interest rate. As of December 31, 2023, the effective interest rate, after giving effect to the interest rate swaps, was 5.0%. 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 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 December 31, 2023, are: Note CovenantsRequiredActualLimitation on incurrence of total debt< 60% of adjusted assets39.7 %Limitation on incurrence of secured debt< 40% of adjusted assets1.6 %Debt service coverage (trailing 12 months) (1)> 1.5x4.7xMaintenance of total unencumbered assets> 150% of unsecured debt257.9 % **Current (2025):** At December 31, 2024, our total outstanding borrowings of revolving credit facility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $26.5 billion, with a weighted average maturity of 5.8 years and a weighted average interest rate of 3.9%. As of December 31, 2024, approximately 96% of our total debt was fixed rate debt. See notes 7 through 10 to the consolidated financial statements contained in this annual report for additional information about our outstanding debt, along with our debt financing activities during the year ended December 31, 2024 below. Note Issuances During the year ended December 31, 2024, we issued the following notes and bonds: Note IssuancesDate of IssuanceMaturity DatePrincipal amount(in millions)Price of par valueEffective yield to maturity4.750% NotesJanuary 2024February 2029$450.0 99.23 %4.923 %5.125% NotesJanuary 2024February 2034$800.0 98.91 %5.265 %5.375% NotesAugust 2024September 2054$500.0 98.37 %5.486 %5.000% NotesSeptember 2024October 2029£350.0 99.14 %5.199 %5.250% NotesSeptember 2024September 2041£350.0 96.21 %5.601 % 4.750% Notes 5.125% Notes 5.375% Notes 5.000% Notes 5.250% Notes In connection with the Merger, we also completed the $2.7 billion exchange in principal of outstanding notes issued by Spirit OP. See note 10, Notes Payable, to the consolidated financial statements contained in this annual report for further details. 28 28 28 Table of Contents Table of Contents Note Repayments During the year ended December 31, 2024, we repaid the following notes, plus accrued and unpaid interest upon maturity: Note RepaymentsDate of IssuanceMaturity DatePrincipal amount(in millions)4.600% NotesFebruary 2014February 2024$500.0 3.875% NotesJune 2014July 2024$350.0 4.600% Notes 3.875% Notes Term Loan Issuances In January 2024, in connection with the Merger, we entered into an amended and restated term loan agreement (which replaced Spirit's then-existing term loans with various lenders). The amended and restated term loan agreements are fixed through interest rate swaps at a weighted average interest rate of 3.9%. Pursuant to the amended and restated term loan agreement, we borrowed $800.0 million in aggregate total borrowings, $300.0 million of which matures in August 2025 and $500.0 million of which matures in August 2027 (the "$800 million term loan agreement"). We also entered into an amended and restated term loan agreement pursuant to which we borrowed $500.0 million in aggregate total borrowings which matures in June 2025 (the "$500 million term loan agreement"). Term Loan Redemption During the year ended December 31, 2024, we repaid our $250.0 million senior unsecured term loan in full upon maturity. Mortgage Repayments During the year ended December 31, 2024, we made $740.5 million in principal payments, including the full repayment of five mortgages for $735.9 million. Covenants The following is a summary of the key financial covenants for our senior unsecured notes, as defined and calculated per the terms of our senior notes and bonds. These calculations, which are not based on U.S. GAAP, are presented to investors to show our ability to incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance with such covenants and are not measures of our liquidity or performance. The actual amounts as of December 31, 2024, are: Note CovenantsRequiredActualLimitation on incurrence of total debt< 60% of adjusted assets41.1 %Limitation on incurrence of secured debt< 40% of adjusted assets0.3 %Debt service and fixed charge coverage (trailing 12 months) (1)> 1.5x4.7xMaintenance of total unencumbered assets> 150% of unsecured debt244.5 % --- ## Modified: Carrying Amount (1) **Key changes:** - Reworded sentence: "(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." - Reworded sentence: "The discount will be amortized over the term of the note." **Prior (2024):** (1) The total carrying amount of the investment in loans excludes accrued interest of $3.4 million as of December 31, 2023, which is recorded to 'Other assets, net' on our consolidated balance sheets. (1) accrued interest A. Senior Secured Note Receivable In November 2023, the Company purchased a Sterling-denominated senior secured note with a principal amount of £142.0 million, equivalent to $180.9 million as of December 31, 2023. The interest only note bears interest at Sterling Overnight Indexed Average ("SONIA") plus 6.75% and matures in October 2029. The Company paid £136.7 million for the note and accounted for the discount at amortized cost. The discount is being amortized over the term of the note. B. Mortgage Loan In October 2023, the Company issued a $33.5 million mortgage loan which is collateralized by nine automotive service properties located across seven different states. The interest only loan bears interest at 8.25% subject to annual increases and matures in October 2038. **Current (2025):** (1) The total carrying amount of the investment in loans excludes accrued interest of $13.8 million and $3.4 million as of December 31, 2024 and 2023, respectively, which is recorded to 'Other assets, net' on our consolidated balance sheets. Senior Secured Notes Receivable In December 2024, we acquired a senior secured note with a principal amount of £200.0 million, equivalent to $250.4 million as of December 31, 2024. The interest-only note matures in November 2030 and bears interest at Sterling Overnight Indexed Average ("SONIA") plus a margin ranging from 4.50% to 5.25%, based on the borrower's leverage ratio. As of December 31, 2024, the margin is determined to be 5.25%. The Company paid £199.0 million for the note and accounted for the discount at amortized cost. The discount will be amortized over the term of the note. In September 2024, our interest in a loan with a carrying amount of $5.3 million, which was acquired in conjunction with the Merger, was transferred to a third-party buyer. As a result of this transfer, we recorded a loss of $1.5 million, presented in 'Other income, net' in our consolidated statements of income and comprehensive income. In May 2024, we acquired a senior secured note, maturing in May 2030, with a principal amount of £300.0 million, equivalent to $375.6 million as of December 31, 2024. The interest-only note bears interest at a fixed rate of 8.125% and is callable at par beginning in May 2026. In November 2023, we acquired a senior secured note with a principal amount of £142.0 million, equivalent to $177.8 million as of December 31, 2024. The interest-only note bears interest that has been adjusted to SONIA plus 5.75% during the year ended December 31, 2024 and matures in October 2029. The Company paid £136.7 million for the note and accounted for the discount at amortized cost. The discount will be amortized over the term of the note. Mortgage Loan In October 2023, we issued a $33.5 million mortgage loan which is collateralized by nine automotive service properties located across seven different states. The interest-only loan bears interest at 8.37% subject to annual increases and matures in October 2038. 67 67 67 Table of Contents Table of Contents Unsecured Loan In conjunction with the Merger, we acquired an 11.0% fixed-rate, unsecured loan with a principal amount of $11.0 million. This interest-only loan was recorded at its acquisition-date fair value of $9.8 million and matures in December 2026. B. Financing Receivables The following table presents information about our investments in sale-leaseback transactions accounted for as financing receivables in accordance with ASC 842, Leases as of December 31, 2024 and December 31, 2023 (dollars in millions): Carrying Value as ofMaturityDecember 31, 2024December 31, 2023Financing receivables, net2028 - 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 ReceivableFinancing Receivable TotalAllowance for credit losses at December 31, 2023$2.5$2.4$4.9Provision for credit losses (1) 10.096.8106.8Initial allowance for PCD assets (2) 1.8 - 1.8Write-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 Allowance for credit losses at December 31, 2023 Provision for credit losses (1) Initial allowance for PCD assets (2) Write-offs (3) Allowance for credit losses at December 31, 2024 (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. (3) --- ## Modified: CONSOLIDATED BALANCE SHEETS **Key changes:** - Reworded sentence: "(in thousands, except per share amounts) December 31, 2024December 31, 2023ASSETSReal estate held for investment, at cost:Land$17,320,520 $14,929,310 Buildings and improvements40,974,535 34,657,094 Total real estate held for investment, at cost58,295,055 49,586,404 Less accumulated depreciation and amortization(7,381,083)(6,072,118)Real estate held for investment, net50,913,972 43,514,286 Real estate and lease intangibles held for sale, net94,979 31,466 Cash and cash equivalents444,962 232,923 Accounts receivable, net877,668 710,536 Lease intangible assets, net6,322,992 5,017,907 Goodwill4,932,199 3,731,478 Investment in unconsolidated entities1,229,699 1,172,118 Other assets, net4,018,568 3,368,643 Total assets$68,835,039 $57,779,357 LIABILITIES AND EQUITYDistributions payable$238,045 $195,222 Accounts payable and accrued expenses759,416 738,526 Lease intangible liabilities, net1,635,770 1,406,853 Other liabilities923,128 811,650 Line of credit payable and commercial paper1,130,201 764,390 Term loans, net2,358,417 1,331,841 Mortgages payable, net80,784 821,587 Notes payable, net22,657,592 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 income38,229 73,894 Total stockholders' equity$38,840,738 $32,941,467 Noncontrolling interests210,948 165,502 Total equity$39,051,686 $33,106,969 Total liabilities and equity$68,835,039 $57,779,357 Commitments and contingencies (Note 21) 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" **Prior (2024):** (in thousands, except per share amounts) December 31, 2023December 31, 2022ASSETSReal estate held for investment, at cost:Land$14,929,310 $12,948,835 Buildings and improvements34,657,094 29,707,751 Total real estate held for investment, at cost49,586,404 42,656,586 Less accumulated depreciation and amortization(6,072,118)(4,904,165)Real estate held for investment, net43,514,286 37,752,421 Real estate and lease intangibles held for sale, net31,466 29,535 Cash and cash equivalents232,923 171,102 Accounts receivable, net710,536 543,237 Lease intangible assets, net5,017,907 5,168,366 Goodwill3,731,478 3,731,478 Investment in unconsolidated entities1,172,118 - Other assets, net3,368,643 2,276,953 Total assets$57,779,357 $49,673,092 LIABILITIES AND EQUITYDistributions payable$195,222 $165,710 Accounts payable and accrued expenses738,526 399,137 Lease intangible liabilities, net1,406,853 1,379,436 Other liabilities811,650 774,787 Line of credit payable and commercial paper764,390 2,729,040 Term loan, net1,331,841 249,755 Mortgages payable, net821,587 853,925 Notes payable, net18,602,319 14,278,013 Total liabilities24,672,388 20,829,803 Commitments and contingencies (Note 20)Stockholders' equity:Common stock and paid in capital, par value $0.01 per share, 1,300,000 shares authorized, 752,460 and 660,300 shares issued and outstanding as of December 31, 2023, and December 31, 2022, respectively39,629,709 34,159,509 Distributions in excess of net income(6,762,136)(5,493,193)Accumulated other comprehensive income73,894 46,833 Total stockholders' equity32,941,467 28,713,149 Noncontrolling interests165,502 130,140 Total equity33,106,969 28,843,289 Total liabilities and equity$57,779,357 $49,673,092 Commitments and contingencies (Note 20) Common stock and paid in capital, par value $0.01 per share, 1,300,000 shares authorized, 752,460 and 660,300 shares issued and outstanding as of December 31, 2023, and December 31, 2022, respectively **Current (2025):** (in thousands, except per share amounts) December 31, 2024December 31, 2023ASSETSReal estate held for investment, at cost:Land$17,320,520 $14,929,310 Buildings and improvements40,974,535 34,657,094 Total real estate held for investment, at cost58,295,055 49,586,404 Less accumulated depreciation and amortization(7,381,083)(6,072,118)Real estate held for investment, net50,913,972 43,514,286 Real estate and lease intangibles held for sale, net94,979 31,466 Cash and cash equivalents444,962 232,923 Accounts receivable, net877,668 710,536 Lease intangible assets, net6,322,992 5,017,907 Goodwill4,932,199 3,731,478 Investment in unconsolidated entities1,229,699 1,172,118 Other assets, net4,018,568 3,368,643 Total assets$68,835,039 $57,779,357 LIABILITIES AND EQUITYDistributions payable$238,045 $195,222 Accounts payable and accrued expenses759,416 738,526 Lease intangible liabilities, net1,635,770 1,406,853 Other liabilities923,128 811,650 Line of credit payable and commercial paper1,130,201 764,390 Term loans, net2,358,417 1,331,841 Mortgages payable, net80,784 821,587 Notes payable, net22,657,592 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 income38,229 73,894 Total stockholders' equity$38,840,738 $32,941,467 Noncontrolling interests210,948 165,502 Total equity$39,051,686 $33,106,969 Total liabilities and equity$68,835,039 $57,779,357 Commitments and contingencies (Note 21) 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 --- ## Modified: December 31, 2023 **Key changes:** - Reworded sentence: "Passport Park Joint Venture (2) (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." **Prior (2024):** (1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $2.2 million as of December 31, 2023. Equity in income and impairment of investment in unconsolidated entities consists of the following (in thousands): Years ended December 31,Investment202320222021Bellagio Las Vegas Joint Venture - Common Equity Interest$2,139 $ - $ - Data Center Development Joint Venture - - - Industrial Partnerships407 (6,448)1,106 Equity in income and impairment of investment in unconsolidated entities$2,546 $(6,448)$1,106 **Current (2025):** Passport Park Joint Venture (2) (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 31,202420232022Data Center Development Joint Venture$6,940 $ - $ - Bellagio Las Vegas Joint Venture - Common Equity Interest(980)2,139 - Passport Park Joint Venture - - - Industrial Partnerships1,833 407 (6,448)Equity in earnings in unconsolidated entities$7,793 $2,546 $(6,448) --- ## Modified: Net increase (decrease) to net income **Key changes:** - Reworded sentence: "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." **Prior (2024):** We expect to reclassify $8.0 million from AOCI as a decrease to interest expense relating to interest rate swaps and interest rate swaptions and $3.6 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months. 77 77 77 Table of Contents Table of Contents The following table details our foreign currency and derivative gains (losses), net included in income (in thousands): Years ended December 31,202320222021Realized foreign currency and derivative gain (loss), net:Gain on the settlement of undesignated derivatives$18,051 $204,392 $24,392 Gain on the settlement of designated derivatives reclassified from AOCI5,728 3,245 3,541 Gain (loss) on the settlement of transactions with third parties583 (553)(134)Total realized foreign currency and derivative gain, net$24,362 $207,084 $27,799 Unrealized foreign currency and derivative gain (loss), net:(Loss) gain on the change in fair value of undesignated derivatives$(5,231)$29,316 $(14,714)Loss on remeasurement of certain assets and liabilities(32,545)(249,711)(12,375)Total unrealized foreign currency and derivative loss, net$(37,776)$(220,395)$(27,089)Total foreign currency and derivative (loss) gain, net$(13,414)$(13,311)$710 **Current (2025):** 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. --- ## Modified: Expected Maturity Data **Key changes:** - Reworded sentence: "The following table summarizes the maturity of our debt as of December 31, 2024 (dollars in millions): Year of Principal DueFixed ratedebtWeighted average rateon fixed rate debtVariable ratedebtWeighted average rateon variable rate debt2025$1,893.44.22 %$67.3 3.05 %20263,447.6(1)4.33 %1,062.9 4.41 %20272,835.92.85 % - - 20282,501.03.19 % - - 20292,388.83.94 % - - Thereafter12,313.94.07 % - - Total (2)$25,380.63.88 %$1,130.2 4.33 %Fair Value (3)$24,034.1$1,130.2" **Prior (2024):** The following table summarizes the maturity of our debt as of December 31, 2023 (dollars in millions): Year of Principal DueFixed ratedebtWeighted average rateon fixed rate debtVariable ratedebtWeighted average rateon variable rate debt2024$1,840.5(1)4.48 %$764.4 4.37 %20251,094.04.23 % - - 20262,669.0(2)4.18 %500.0 (3)3.05 %20272,050.12.66 % - - 20282,051.13.43 % - - Thereafter10,511.83.91 % - - Totals (4)$20,216.53.84 %$1,264.4 3.85 %Fair Value (5)$19,250.2$1,264.3 **Current (2025):** The following table summarizes the maturity of our debt as of December 31, 2024 (dollars in millions): Year of Principal DueFixed ratedebtWeighted average rateon fixed rate debtVariable ratedebtWeighted average rateon variable rate debt2025$1,893.44.22 %$67.3 3.05 %20263,447.6(1)4.33 %1,062.9 4.41 %20272,835.92.85 % - - 20282,501.03.19 % - - 20292,388.83.94 % - - Thereafter12,313.94.07 % - - Total (2)$25,380.63.88 %$1,130.2 4.33 %Fair Value (3)$24,034.1$1,130.2 --- ## Modified: Closing of Spirit Merger **Key changes:** - Reworded sentence: "On January 23, 2024, we closed on our previously announced stock-for-stock merger with Spirit." **Prior (2024):** On January 23, 2024, we closed on our previously announced merger with Spirit, which is further described in note 21, Subsequent Events, to the consolidated financial statements. The Spirit portfolio consisted of 2,018 U.S. retail, industrial and other properties across 49 states. With assets that are highly complementary to our existing portfolio, this transaction enhances the diversification and depth of our real estate portfolio and will allow us to strengthen our longstanding relationships with existing clients and curate new ones. **Current (2025):** On January 23, 2024, we closed on our previously announced stock-for-stock merger with Spirit. The Merger is further described in note 2, Merger with Spirit Realty Capital, Inc., to the consolidated financial statements contained in this annual report. --- ## Modified: 4. Investments in Real Estate **Key changes:** - Reworded sentence: "Acquisitions of Real Estate Below is a summary of our acquisitions for the year ended December 31, 2024 (unaudited): Number ofPropertiesLeasableSquare Feet(in thousands)Investment($ in millions)Weighted AverageLease Term(Years)Initial WeightedAverage CashLease Yield (1)Acquisitions - U.S." **Prior (2024):** A. Acquisitions of Real Estate Below is a summary of our acquisitions for the year ended December 31, 2023 (unaudited): Number ofPropertiesLeasableSquare Feet(in thousands, unaudited)Investment($ in millions)WeightedAverageLease Term(Years)Initial WeightedAverage CashLease Yield (1)Acquisitions - U.S. 838 15,030 $3,802.3 15.96.9 %Acquisitions - Europe 177 14,737 3,080.4 13.77.1 %Total acquisitions1,015 29,767 $6,882.7 14.97.0 %Properties under development (2)390 8,094 1,270.3 16.46.8 %Total (3)1,405 37,861 $8,153.0 15.17.0 % Initial Weighted **Current (2025):** A. Acquisitions of Real Estate Below is a summary of our acquisitions for the year ended December 31, 2024 (unaudited): Number ofPropertiesLeasableSquare Feet(in thousands)Investment($ in millions)Weighted AverageLease Term(Years)Initial WeightedAverage CashLease Yield (1)Acquisitions - U.S. 287 3,535 $1,402.9 13.96.7 %Acquisitions - Europe 62 4,263 1,072.0 6.97.5 %Total acquisitions349 7,798 $2,474.9 10.77.0 %Properties under development (2)192 7,093 690.7 15.47.4 %Total (3)541 14,891 $3,165.6 11.87.1 % --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*